<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
------------------------
CALMAT CO.
(Name of Subject Company)
ALB ACQUISITION CORPORATION
VULCAN MATERIALS COMPANY
(Bidders)
------------------------
COMMON STOCK, PAR VALUE $1 PER SHARE
(Title of Class of Securities)
131271108
(CUSIP Number of Class of Securities)
------------------------
WILLIAM F. DENSON, III
ALB ACQUISITION CORPORATION
VULCAN MATERIALS COMPANY
ONE METROPLEX DRIVE
BIRMINGHAM, ALABAMA 35209
(205) 877-3204
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications
on Behalf of Bidder)
COPIES TO:
EDWARD D. HERLIHY, ESQ.
WACHTELL, LIPTON, ROSEN & KATZ
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019
(212) 403-1000
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE**
<S> <C>
$803,299,373 $160,660
</TABLE>
* For purposes of calculating the filing fee only. Based upon 23,797,279
shares of Common Stock, par value $1.00 per share, of CalMat Co. outstanding
on November 9, 1998, plus the number of Shares issuable upon exercise of all
outstanding options.
** The fee, calculated in accordance with Rule 0-11(d) of the Securities
Exchange Act of 1934, is 1/50th of one percent of the aggregate 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 date of its filing.
<TABLE>
<S> <C> <C> <C>
Amount Previously Paid: None Filing Party: N/A
Form of Registration No.: N/A Date Filed: N/A
</TABLE>
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<PAGE>
CUSIP NO. 131271108 14D-1 AND 13D
<TABLE>
<C> <S>
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
ALB Acquisition Corporation (Pending)
2. Check the Appropriate Box if a Member of a Group (a) / /
(b) /X/
3. SEC Use Only
4. Sources of Funds
AF
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(e) or 2(f) / /
6. Citizenship or Place of Organization
Delaware
7. Aggregate Amount Beneficially Owned by Each Reporting Person
676,549 shares of common stock, par value $1.00 per share of
CalMat Co.*
8. Check Box if the Aggregate Amount in Row (7) Excludes Certain
Shares
/ /
9. Percent of Class Represented by Amount in Row (7)
2.8%
10. Type of Reporting Person
CO
</TABLE>
* On November 14, 1998, Vulcan Materials Company ("Parent") entered into
support agreements (the "Support Agreements") with each member of the Board of
Directors of CalMat Co. (the "Company"). Pursuant to the Support Agreements,
upon the terms set forth therein, such stockholders generally have agreed to
tender, in accordance with the terms of the tender offer described in this
statement (the "Offer") 639,549 shares of common stock, par value $1.00 per
share (the "Common Stock"), of the Company, which shares are reflected in Rows 7
and 9 of pages 2 and 3 of this Schedule 14D-1. The Support Agreements are
described in more detail in Section 11 of the Offer to Purchase dated November
20, 1998.
2
<PAGE>
CUSIP NO. 131271108 14D-1 AND 13D
<TABLE>
<C> <S>
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Vulcan Materials Company
I.R.S. No. 63-0366371
2. Check the Appropriate Box if a Member of a Group (a) / /
(b) / /
3. SEC Use Only
4. Sources of Funds
WC, BK, OO
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(e) or 2(f) / /
6. Citizenship or Place of Organization
New Jersey
7. Aggregate Amount Beneficially Owned by Each Reporting Person
676,549 shares of Common Stock
8. Check Box if the Aggregate Amount in Row (7) Excludes Certain
Shares
/ /
9. Percent of Class Represented by Amount in Row (7)
2.8%
10. Type of Reporting Person
CO
</TABLE>
3
<PAGE>
This Schedule 14D-1 Tender Offer Statement relates to the offer by ALB
Acquisition Corporation (the "Purchaser"), a Delaware corporation and a
wholly-owned subsidiary of Vulcan Materials Company, a New Jersey corporation
("Parent"), to purchase all outstanding shares of Common Stock, par value $1.00
per share (the "Shares"), of CalMat Co., a Delaware corporation (the "Company"),
and the associated common share purchase rights (the "Rights") issued pursuant
to the Rights Agreement, dated as of September 22, 1987, as amended as of
October 26, 1992, July 22, 1997 and November 14, 1998 between the Company and
First Chicago Trust Company of New York, as Rights Agent (as the same may be
amended, the "Rights Agreement"), at a purchase price of $31.00 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 together constitute the "Offer"), which
are annexed to and filed with this Schedule 14D-1 as Exhibits (a)(1) and (a)(2),
respectively. The Purchaser has been formed by Parent in connection with the
Offer and the transactions contemplated thereby. This Schedule 14D-1 is being
filed on behalf of the Purchaser and Parent.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is CalMat Co. The address of its
principal executive offices is 3200 San Fernando Road, Los Angeles, California
90065.
(b) Reference is hereby made to the information set forth in the
"Introduction," Section 1 ("Terms of the Offer") and Section 11 ("Purpose of the
Offer; the Merger Agreement; the Support Agreements; Appraisal Rights; Plans for
the Company; "Going Private" Transactions; the Rights") of the Offer to
Purchase, which is incorporated herein by reference.
(c) Reference is hereby made to the information set forth in Section 6
("Price Range of the Shares; Dividends") of the Offer to Purchase, which is
incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) This Statement is being filed on behalf of Parent and the Purchaser
for purposes of the Schedule 14D-1. Reference is hereby made to the information
set forth in the "Introduction," Section 9 ("Certain Information Concerning
Parent and the Purchaser") and Schedule I (Directors and Executive Officers of
Parent and the Purchaser) of the Offer to Purchase, which is incorporated herein
by reference.
(e)-(f) During the last five years, neither Parent nor the Purchaser, nor,
to the best of their knowledge, any of their respective executive officers and
directors listed in Schedule I (Directors and Executive Officers of Parent and
the Purchaser) of the Offer to Purchase, which is incorporated herein by
reference, has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or 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.
(g) Reference is hereby made to the information set forth in Schedule I
(Directors and Executive Officers of Parent and the Purchaser) of the Offer to
Purchase, which is incorporated herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) Reference is hereby made to the information set forth in the
"Introduction," Section 9 ("Certain Information Concerning Parent and the
Purchaser"), Section 10 ("Background of the Offer; Contacts with the Company")
and Section 11 ("Purpose of the Offer; the Merger Agreement; the
4
<PAGE>
Support Agreements; Appraisal Rights; Plans for the Company; "Going Private"
Transactions; the Rights") of the Offer to Purchase, which is incorporated
herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) Reference is made to the information set forth in Section 12
("Source and Amount of Funds") of the Offer to Purchase, which is incorporated
herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(g) Reference is hereby made to the information set forth in the
"Introduction," Section 7 ("Possible Effects of the Offer on the Market for the
Shares; NYSE Listing; Exchange Act Registration; Margin Regulations"), Section
10 ("Background of the Offer; Contacts with the Company"), Section 11 ("Purpose
of the Offer; the Merger Agreement; the Support Agreements; Appraisal Rights;
Plans for the Company; "Going Private" Transactions; the Rights") and Section 13
("Dividends and Distributions") of the Offer to Purchase, which is incorporated
herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) Reference is hereby made to the information set forth in Section 9
("Certain Information Concerning Parent and the Purchaser") and Schedule I
(Directors and Executive Officers of Parent and the Purchaser) of the Offer to
Purchase, which is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
Reference is hereby made to the information set forth in the "Introduction,"
Section 9 ("Certain Information Concerning Parent and the Purchaser"), Section
10 ("Background of the Offer; Contacts with the Company"), Section 11 ("Purpose
of the Offer; the Merger Agreement; the Support Agreements; Appraisal Rights;
Plans for the Company; "Going Private" Transactions; the Rights") and Section 15
("Certain Legal Matters; Required Regulatory Approvals") of the Offer to
Purchase, which is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Reference is hereby made to the information set forth in Section 16
("Certain Fees and Expenses") of the Offer to Purchase, which is incorporated
herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Reference is hereby made to the information set forth in Section 9 ("Certain
Information Concerning Parent and the Purchaser") of the Offer to Purchase,
which is incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) Reference is hereby made to the information set forth in the
"Introduction," Section 10 ("Background of the Offer; Contacts with the
Company") and Section 11 ("Purpose of the Offer; the Merger Agreement; the
Support Agreements; Appraisal Rights; Plans for the Company; "Going Private"
Transactions; the Rights") of the Offer to Purchase, which is incorporated
herein by reference.
(b)-(c) Reference is hereby made to the information set forth in the
"Introduction," Section 11 ("Purpose of the Offer; the Merger Agreement; the
Support Agreements; Appraisal Rights; Plans for the
5
<PAGE>
Company; "Going Private" Transactions; the Rights") and Section 15 ("Certain
Legal Matters; Required Regulatory Approvals") of the Offer to Purchase, which
is incorporated herein by reference.
(d) Reference is hereby made to the information set forth in Section 7
("Possible Effects of the Offer on the Market for the Shares; NYSE Listing;
Exchange Act Registration; Margin Regulations") of the Offer to Purchase, which
is incorporated herein by reference.
(e) Reference is hereby made to the information set forth in Section 15
("Certain Legal Matters; Required Regulatory Approvals") of the Offer to
Purchase, which is incorporated herein by reference.
(f) Reference is hereby made to the entire texts of the Offer to Purchase
and the related Letter of Transmittal, which are incorporated herein by
reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<C> <S>
(a)(1) --Offer to Purchase, dated November 20, 1998.
(a)(2) --Letter of Transmittal.
(a)(3) --Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Nominees.
(a)(4) --Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies
and Nominees.
(a)(5) --Notice of Guaranteed Delivery.
(a)(6) --Guidelines for Certification of Taxpayer Identification Number on Substitute Form
W-9.
(a)(7) --Text of press release issued by Parent and the Company on November 16, 1998.
(a)(8) --Form of Summary Advertisement, dated November 20, 1998.
(c)(1) --Agreement and Plan of Merger, dated as of November 14, 1998, by and among the
Company, the Purchaser and Parent.
(c)(2) --Form of Support Agreement entered into between Parent and John C. Argue, Arthur
Brown, Denis R. Brown, Harry M. Conger, Rayburn S. Dezember, A. Frederick
Gerstell, Richard A. Grant, Jr., Edward A. Landry, Thomas L. Lee, Thomas M.
Linden, Georgia R. Nelson and Stuart T. Peeler.
(c)(3) --Confidentiality Agreement, dated as of September 24, 1998, between the Company and
Parent.
(d) --Not applicable.
(e) --Not applicable.
(f) --Not applicable.
</TABLE>
6
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Dated: November 20, 1998
<TABLE>
<S> <C> <C>
VULCAN MATERIALS COMPANY
By: /s/ DONALD M. JAMES
-----------------------------------------
Name: Donald M. James
Title: Chairman and Chief Executive
Officer
ALB ACQUISITION CORPORATION
By: /s/ DONALD M. JAMES
-----------------------------------------
Name: Donald M. James
Title: Chairman and Chief Executive
Officer
</TABLE>
7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ---------- -----------------------------------------------------------------------------------
<C> <S>
(a)(1) --Offer to Purchase, dated November 20, 1998.
(a)(2) --Letter of Transmittal.
(a)(3) --Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Nominees.
(a)(4) --Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies
and Nominees.
(a)(5) --Notice of Guaranteed Delivery.
(a)(6) --Guidelines for Certification of Taxpayer Identification Number on Substitute Form
W-9.
(a)(7) --Text of press release issued by Parent and the Company on November 16, 1998.
(a)(8) --Form of Summary Advertisement, dated November 20, 1998.
(c)(1) --Agreement and Plan of Merger, dated as of November 14, 1998, by and among the
Company, the Purchaser and Parent.
(c)(2) --Form of Support Agreement entered into between Parent and John C. Argue, Arthur
Brown, Denis R. Brown, Harry M. Conger, Rayburn S. Dezember, A. Frederick
Gerstell, Richard A. Grant, Jr., Edward A. Landry, Thomas L. Lee, Thomas M.
Linden, Georgia R. Nelson and Stuart T. Peeler.
(c)(3) --Confidentiality Agreement, dated as of September 24, 1998, between the Company
and Parent.
(d) --Not applicable.
(e) --Not applicable.
(f) --Not applicable.
</TABLE>
8
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
CALMAT CO.
BY
ALB ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY
OF
VULCAN MATERIALS COMPANY
AT
$31.00 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, JANUARY 1, 1999, UNLESS THE OFFER IS EXTENDED.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY HAS DETERMINED THAT THE
OFFER AND THE MERGER (AS SUCH TERMS ARE DEFINED HEREIN), ARE FAIR TO AND IN THE
BEST INTERESTS OF THE STOCKHOLDERS OF THE COMPANY, HAS APPROVED THE OFFER AND
MERGER AGREEMENT AND RECOMMENDS ACCEPTANCE OF THE OFFER BY THE COMPANY'S
STOCKHOLDERS.
--------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, SHARES REPRESENTING AT
LEAST A MAJORITY OF THE TOTAL NUMBER OF OUTSTANDING SHARES OF COMMON STOCK OF
THE COMPANY ON A FULLY DILUTED BASIS BEING VALIDLY TENDERED AND NOT PROPERLY
WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AND CERTAIN OTHER CONDITIONS. SEE
SECTION 14.
--------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares (as defined herein) either should (a) complete and sign the Letter of
Transmittal (or a facsimile thereof) in accordance with the instructions in the
Letter of Transmittal, including any required signature guarantees, and mail or
deliver it together with the certificate(s) representing tendered Shares and any
other required documents to the Depositary (as defined herein) or tender such
Shares pursuant to the procedures for book-entry transfer set forth in Section 3
or (b) request such stockholder's broker, dealer, commercial bank, trust company
or other nominee to effect such transaction. A stockholder whose Shares are
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee must contact such broker, dealer, commercial bank, trust company
or other nominee if such stockholder desires to tender such Shares.
The Rights (as defined herein) are presently evidenced by the certificates
for the Shares and a tender by a stockholder of such stockholder's Shares will
also constitute a tender of the associated Rights. A stockholder who desires to
tender Shares and whose certificates representing such Shares are not
immediately available or who cannot comply with the procedures for book-entry
transfer on a timely basis may tender such Shares by following the procedures
for guaranteed delivery set forth in Section 3.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Managers at their respective addresses and telephone numbers
set forth on the back cover of this Offer to Purchase. Additional copies of this
Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery
and other related materials may be obtained from the Information Agent or from
brokers, dealers, commercial banks, trust companies and other nominees.
--------------------------
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
THE DEALER MANAGERS FOR THE OFFER ARE:
GOLDMAN, SACHS & CO.
November 20, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Introduction........................................................................ 1
1. Terms of the Offer............................................................... 2
2. Acceptance for Payment and Payment............................................... 4
3. Procedures for Tendering Shares.................................................. 5
4. Withdrawal Rights................................................................ 8
5. Certain Tax Consequences......................................................... 8
6. Price Range of the Shares; Dividends............................................. 9
7. Possible Effects of the Offer on the Market for the Shares; NYSE Listing;
Exchange Act Registration; Margin Regulations..................................... 10
8. Certain Information Concerning the Company....................................... 11
9. Certain Information Concerning Parent and the Purchaser.......................... 13
10. Background of the Offer; Contacts with the Company............................... 14
11. Purpose of the Offer; the Merger Agreement; the Support Agreements; Appraisal
Rights; Plans for the Company; "Going Private" Transactions; the Rights........... 15
12. Source and Amount of Funds....................................................... 25
13. Dividends and Distributions...................................................... 25
14. Certain Conditions of the Offer.................................................. 26
15. Certain Legal Matters; Required Regulatory Approvals............................. 27
16. Certain Fees and Expenses........................................................ 29
17. Miscellaneous.................................................................... 30
SCHEDULE I Directors and Executive Officers of Parent and the Purchaser............. I-1
</TABLE>
<PAGE>
To: All Holders of Shares of Common Stock of CalMat Co.:
INTRODUCTION
ALB Acquisition Corporation (the "Purchaser"), a Delaware corporation and a
wholly-owned subsidiary of Vulcan Materials Company, a New Jersey corporation
("Parent"), hereby offers to purchase all outstanding shares of common stock,
par value $1 per share (the "Shares"), of CalMat Co., a Delaware corporation
(the "Company"), and the associated Common Share Purchase Rights (the "Rights")
issued pursuant to the Rights Agreement, dated as of September 22, 1987, as
amended as of October 26, 1992, July 22, 1997, and November 14, 1998, between
the Company and First Chicago Trust Company of New York, as Rights Agent (as the
same may be amended, the "Rights Agreement"), at a purchase price of $31.00 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 this Offer to
Purchase and in the related Letter of Transmittal (which together constitute the
"Offer"). Unless the context otherwise requires, all references to Shares shall
include the associated Rights.
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 by the Purchaser
pursuant to the Offer. The Purchaser will pay all charges and expenses of First
Chicago Trust Company of New York, as Depositary (the "Depositary"), Goldman,
Sachs & Co., as Dealer Managers (the "Dealer Managers"), and Georgeson & Company
Inc., as Information Agent (the "Information Agent"), incurred in connection
with the Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY HAS DETERMINED THAT THE
OFFER AND THE MERGER (AS SUCH TERMS ARE DEFINED HEREIN) ARE FAIR TO AND IN THE
BEST INTERESTS OF THE STOCKHOLDERS OF THE COMPANY, HAS APPROVED THE OFFER AND
THE MERGER AGREEMENT AND RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY ACCEPT THE
OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
Credit Suisse First Boston Corporation ("CSFB"), the Company's financial
advisor, has delivered to the Board of Directors of the Company an oral opinion
delivered November 11, 1998 (which opinion was subsequently confirmed in writing
on November 14, 1998), to the effect that, as of such date, the cash
consideration to be received by the holders of Shares pursuant to the Offer and
the Merger is fair to such holders from a financial point of view. A copy of
such opinion is included with the Company's Solicitation/ Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9"), which is being mailed to
stockholders concurrently herewith, and stockholders are urged to read such
opinion in its entirety for a description of the assumptions made, matters
considered and limitations of the review undertaken by CSFB.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, SHARES REPRESENTING AT
LEAST A MAJORITY OF THE TOTAL NUMBER OF OUTSTANDING SHARES ON A FULLY DILUTED
BASIS (NOT TAKING INTO ACCOUNT THE RIGHTS) BEING VALIDLY TENDERED AND NOT
PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER (THE "MINIMUM
CONDITION"). THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER TERMS AND CONDITIONS.
THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JANUARY
1, 1999, UNLESS EXTENDED. SEE SECTIONS 1, 14, AND 15.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of November 14, 1998 (the "Merger Agreement"), by and among the Company, the
Purchaser and Parent pursuant to which, following the consummation of the Offer
and the satisfaction or waiver of certain conditions, the Purchaser will be
merged with and into the Company (the "Merger"), with the Company continuing as
the surviving corporation (the "Surviving Corporation"). In the Merger, each
outstanding Share (other than Shares held by Parent, the Purchaser or any
wholly-owned subsidiary of Parent or the Purchaser or in the treasury of the
Company or by any wholly-owned subsidiary of the Company, which Shares will be
canceled with no payment being made with respect thereto, and other than Shares,
if any, held by stockholders who perfect their appraisal rights under Delaware
law ("Dissenting Shares")) will, by virtue of the Merger and without any action
by the holder thereof, be converted into the right to receive $31.00 (or any
higher price Purchaser determines in its sole discretion to pay in the Offer) in
cash, payable to the
<PAGE>
holder thereof, without interest thereon, upon the surrender of the certificate
formerly representing such Share. The Merger Agreement is more fully described
in Section 11 below. Certain federal income tax consequences of the sale of
Shares pursuant to the Offer and the Merger, as the case may be, are described
in Section 5 below.
If the Minimum Condition and the other conditions to the Offer are satisfied
and the Offer is consummated, the Purchaser will own a sufficient number of
Shares to ensure that the Merger will be approved. Under the Delaware General
Corporation Law (the "GCL"), if, after consummation of the Offer the Purchaser
owns at least 90% of the Shares then outstanding, the Purchaser will be able to
cause the Merger to occur without a vote of the Company's stockholders. If,
however, after consummation of the Offer, the Purchaser owns less than 90% of
the then outstanding Shares, a vote of the Company's stockholders will be
required under the GCL to approve the Merger, and a significantly longer period
of time will be required to effect the Merger. See Section 11. The Merger
Agreement provides that Purchaser will vote its Shares in favor of the Merger
and thereby have enough votes to adopt the Merger Agreement.
Concurrently with the execution of the Merger Agreement, Parent entered into
Support Agreements (the "Support Agreements") with each member of the Board of
Directors of the Company. Pursuant to the Support Agreements, such directors
have agreed, among other things, to validly tender, pursuant to and in
accordance with the terms of the Offer, all of the Shares directly owned
(beneficially or of record) by them, subject to certain exceptions. In the
aggregate, approximately 639,549 Shares are subject to the Support Agreements,
representing approximately 2.7% of the outstanding Shares. See Section 11.
The Company has informed the Purchaser that, as of November 9, 1998, there
were 23,797,279 Shares issued and outstanding and, as of November 6, 1998, there
were 2,115,604 Shares reserved for issuance upon the exercise of outstanding
stock options ("Options") granted under the Company's stock option or similar
plans or agreements.
Based on the foregoing and assuming no additional Shares (or warrants,
options or rights exercisable for, or securities convertible into, Shares), have
been issued (other than Shares issued pursuant to such Options) if the Purchaser
were to acquire approximately 12,957,000 Shares pursuant to the Offer (including
the Shares which pursuant to the Support Agreements are required to be tendered
in the Offer), the Minimum Condition would be satisfied.
No appraisal rights are available in connection with the Offer; however,
stockholders may have appraisal rights in connection with the Merger regardless
of whether the Merger is consummated with or without a vote of the Company's
stockholders. See 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.
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions set forth in the Offer
(including, if the Offer is extended or amended, the terms and conditions of any
such extension or amendment), the Purchaser will accept for payment and thereby
purchase all Shares validly tendered on or prior to the Expiration Date and not
withdrawn in accordance with the procedures set forth in Section 4, as soon as
practicable after such Expiration Date. The Offer is conditioned upon, among
other things, the satisfaction of the Minimum Condition and the expiration or
termination of all waiting periods imposed by the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"). See Section 14. If at any
Expiration Date any of the conditions to the Offer are not satisfied or waived
by the Purchaser, or if required by any rule or position of the Securities and
Exchange Commission (the "Commission"), the Purchaser shall
2
<PAGE>
extend the Offer until all such conditions are satisfied or waived; PROVIDED
that no individual extension shall extend beyond five business days, or for such
longer period as required by law or any such rule or position, and the Purchaser
shall in no event be required to extend the Offer beyond March 31, 1999. If all
the conditions to the Offer are satisfied or waived at any Expiration Date and
more than 70% but less than 90% of the outstanding Shares on a fully diluted
basis have been validly tendered and not withdrawn in the Offer, the Purchaser
reserves the right, in its sole discretion, to extend the Offer from time to
time for up to a maximum of ten additional business days in the aggregate for
all such extensions, notwithstanding the prior satisfaction or waiver of the
conditions to the Offer. The Offer will remain open until 12:00 midnight, New
York City time, on Friday, January 1, 1999 (the "Expiration Date"), unless and
until the Purchaser extends the period of time for which the Offer is open, in
which event the term "Expiration Date" will mean the time and date at which the
Offer, as so extended by the Purchaser, will expire. During any extension, all
Shares previously tendered and not withdrawn will remain subject to the Offer
and subject to the right of a tendering stockholder to withdraw such
stockholder's Shares. See Section 4. Under no circumstances will interest be
paid on the purchase price for tendered Shares, whether or not the Offer is
extended.
Subject to the applicable regulations of the Commission, and except as set
forth in the Merger Agreement and discussed below, the Purchaser expressly
reserves the right, in its sole discretion, at any time or from time to time, to
waive any condition or otherwise amend the Offer in any respect, in each case,
by giving oral or written notice of such waiver or amendment to the Depositary.
In the Merger Agreement, the Purchaser has agreed that without the prior written
consent of the Company, it will not (i) decrease the price per Share or change
the form of consideration payable in the Offer, (ii) decrease the number of
Shares sought to be purchased in the Offer, (iii) subject to Parent's and
Purchaser's right to waive the same (subject to clause (iv) below), amend the
conditions to the Offer, (iv) waive the Minimum Condition, or (v) amend any
other term of the Offer in a manner adverse to the holders of Shares.
Any extension, termination or amendment of the Offer will be followed as
promptly as practicable by public announcement thereof. In the case of an
extension, Rule 14e-1(d) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), requires that the announcement be issued no later than
9:00 a.m., New York City time, on the next business day after the previously
scheduled Expiration Date in accordance with the public announcement
requirements of Rule 14e-1 under the Exchange Act. Subject to applicable law
(including Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act, which
require that any material change in the information published, sent or given to
stockholders in connection with the Offer be promptly disseminated to
stockholders in a manner reasonably designed to inform stockholders of such
change), and without limiting the manner in which the Purchaser may choose to
make any public announcement, the Purchaser will not have any obligation to
publish, advertise or otherwise communicate any such public announcement other
than by making a release to the Dow Jones News Service. As used in this Offer to
Purchase, "business day" has the meaning set forth in Rule 14d-1 under the
Exchange Act. The rights reserved by the Purchaser in the preceding paragraph
are in addition to the Purchaser's rights pursuant to Section 14.
If the Purchaser makes a material change in the terms of the Offer, or if it
waives a material condition to the Offer, the Purchaser will extend the Offer
and disseminate additional tender offer materials to the extent required by
Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. With respect to a
change in price, a minimum ten business day period from the date of such change
is generally required under applicable Commission rules and regulations to allow
for adequate dissemination to stockholders. The minimum period during which a
tender offer must remain open following material changes in the terms of the
offer, other than a change in price or a change in percentage of securities
sought, will depend upon the facts and circumstances, including the materiality
of the changes. In the Commission's view, an offer should remain open for a
minimum of five business days from the date the material change is first
published, sent or given to stockholders, and, if material changes are made with
respect to information that approaches the significance of price and the
percentage of securities sought, a minimum of ten business days may be required
to allow for adequate dissemination and investor response.
3
<PAGE>
As of the date of this Offer to Purchase, the Rights are evidenced by the
certificates representing Shares and do not trade separately. Accordingly, by
tendering a certificate representing Shares, a stockholder is automatically
tendering a similar number of associated Rights. If, however, pursuant to the
Rights Agreement or for any other reason, the Rights detach and separate
certificates representing Rights ("Rights Certificates") are issued,
stockholders will be required to tender one Right for each Share tendered in
order to effect a valid tender of such Share.
The Company has provided the Purchaser with the Company's stockholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase, the related Letter of Transmittal and
other relevant materials will be mailed by the Purchaser to record holders of
Shares and will be furnished by the Purchaser to brokers, dealers, commercial
banks, trust companies and similar persons whose names, or the names of whose
nominees, appear on the securityholder lists or, if applicable, who are listed
as participants in a clearing agency's security position listing, for subsequent
transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of the Offer as so
extended or amended), the Purchaser will purchase, by accepting for payment, and
will pay for, all Shares validly tendered and not properly withdrawn (in
accordance with Section 4) prior to the expiration of the Offer as soon as
practicable after the Expiration Date. In addition, subject to applicable rules
of the Commission, the Purchaser expressly reserves the right, in its sole
discretion, to delay acceptance for payment of, or payment for, Shares in order
to comply with applicable law, including the HSR Act. See Sections 1 and 15.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) certificates
representing such Shares ("Share Certificates") or timely confirmation (a
"Book-Entry Confirmation") of the book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company (the "Book-Entry Transfer
Facility") pursuant to the procedures set forth in Section 3; (ii) the
appropriate 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 which are the subject of such Book-Entry
Confirmation 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.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as, if
and when the Purchaser gives oral or written notice to the Depositary of the
Purchaser's acceptance of such Shares for payment pursuant to the Offer. In all
cases, upon the terms and subject to the conditions of the Offer, payment for
Shares purchased pursuant to the Offer will be made by deposit of the purchase
price therefor with the Depositary, which will act as agent for tendering
stockholders for the purpose of receiving payment from the Purchaser and
transmitting payment to validly tendering stockholders.
UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE
PAID BY THE PURCHASER.
The reservation by Purchaser of the right to delay the acceptance or
purchase of or payment for Shares is subject to the provisions of Rule 14e-1(c)
under the Exchange Act, which requires Purchaser to pay the consideration
offered or to return Shares deposited by or on behalf of stockholders promptly
after the termination or withdrawal of the Offer.
4
<PAGE>
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if Share Certificates are submitted representing more Shares than are
tendered, Share Certificates representing unpurchased or untendered Shares will
be returned, without expense to the tendering stockholder (or, in the case of
Shares delivered by book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility pursuant to the procedures set forth in Section 3,
such Shares will be credited to an account maintained within the Book-Entry
Transfer Facility), as promptly as practicable following the expiration,
termination or withdrawal of the Offer.
IF, PRIOR TO THE EXPIRATION DATE, THE PURCHASER SHALL INCREASE THE
CONSIDERATION OFFERED TO HOLDERS OF SHARES PURSUANT TO THE OFFER, SUCH INCREASED
CONSIDERATION SHALL BE PAID TO ALL HOLDERS OF SHARES THAT ARE PURCHASED PURSUANT
TO THE OFFER, WHETHER OR NOT SUCH SHARES WERE TENDERED PRIOR TO SUCH INCREASE IN
CONSIDERATION.
The Purchaser reserves the right, subject to the provisions of the Merger
Agreement, to assign, in whole or from time to time in part, to one or more of
Parent's subsidiaries or affiliates the right to purchase all or any portion of
the Shares tendered pursuant to the Offer, but no such assignment will relieve
Parent of any liability under the Merger Agreement for any breach of the Merger
Agreement by any such assignee.
3. PROCEDURES FOR TENDERING SHARES.
VALID TENDER. Except as set forth below, in order for Shares to be validly
tendered pursuant to the Offer, a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof), together with any required signature
guarantees or an Agent's Message in connection with a book-entry delivery of
Shares and any other documents required by the Letter of Transmittal must be
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase on or prior to the Expiration Date and either (i)
Share Certificates representing tendered Shares must be received by the
Depositary or tendered pursuant to the procedure for book-entry transfer set
forth below and Book-Entry Confirmation must be received by the Depositary, in
each case on or prior to the Expiration Date, or (ii) the guaranteed delivery
procedures set forth below must be complied with. No alternate, conditional or
contingent tenders will be accepted.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, RIGHTS CERTIFICATES (IF
APPLICABLE), THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE OPTION AND SOLE RISK OF THE TENDERING STOCKHOLDER, AND DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE
CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
BOOK-ENTRY TRANSFER. The Depositary will establish an account with respect
to the Shares at the Book-Entry Transfer Facility for purposes of the Offer. Any
financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry delivery of Shares by causing the
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at the Book-Entry Transfer Facility in accordance with the Book-Entry
Transfer Facility's procedures for such transfer. However, although delivery of
Shares may be effected through book-entry transfer into the Depositary's account
at the Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or an Agent's Message in connection with a book-entry transfer, and
any other required documents must, in any case, be transmitted to and received
by the Depositary at one of its addresses set forth on the back cover of this
Offer to Purchase on or prior to the Expiration Date, or the guaranteed delivery
procedure set forth below must be complied with.
5
<PAGE>
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.
SIGNATURE GUARANTEES. Signatures on all Letters of Transmittal must be
guaranteed by a firm that 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 (an "Eligible Institution"), unless the Shares
tendered thereby are tendered (i) by a registered holder of Shares who has not
completed either the box labeled "Special Payment Instructions" or the box
labeled "Special Delivery Instructions" on the Letter of Transmittal or (ii) for
the account of an Eligible Institution. See Instructions 1 and 5 of the Letter
of Transmittal.
If the Share Certificates are registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made to, or
Share Certificates for unpurchased Shares are to be issued or returned to, a
person other than the registered holder, then the tendered certificates must be
endorsed or accompanied by appropriate stock powers, signed exactly as the name
or names of the registered holder or holders appear on the certificates, with
the signatures on the certificates or stock powers guaranteed by an Eligible
Institution as provided in the Letter of Transmittal. See Instructions 1 and 5
of the Letter of Transmittal.
If the Share Certificates are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) must accompany each such delivery.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates are not immediately
available or time will not permit all required documents to reach the Depositary
on or prior to the Expiration Date or the procedures for book-entry transfer
cannot be completed on a timely basis, such Shares or Rights may nevertheless be
tendered if all of the following guaranteed delivery procedures are duly
complied with:
(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 (or a Book-Entry Confirmation) representing all
tendered Shares, in proper form for transfer together with a properly
completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message) and any other documents
required by the Letter of Transmittal are received by the Depositary
within three New York Stock Exchange trading days after the date of
execution of such Notice of Guaranteed Delivery. A "New York Stock
Exchange trading day" is any day on which The New York Stock Exchange
is open for business.
The Notice of Guaranteed Delivery may be delivered by hand or mail to the
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such Notice of Guaranteed Delivery and a representation that the
stockholder on whose behalf the tender is being made is deemed to own the Shares
being tendered within the meaning of Rule 14e-4 under the Exchange Act.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of Share Certificates for, or, of Book-Entry
Confirmation with respect to, such Shares, a properly completed and duly
executed Letter of Transmittal (or 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 appropriate Letter of
Transmittal. Accordingly, payment might not be made to all tendering
stockholders at the same time, and will depend upon when Share Certificates are
received by the Depositary or Book-Entry Confirmations of such Shares are
received into the Depositary's account at the Book-Entry Transfer Facility.
6
<PAGE>
BACKUP WITHHOLDING. Under the backup federal income tax withholding laws
applicable to certain stockholders (other than certain exempt stockholders,
including, among others, all corporations and certain foreign individuals), the
Depositary may be required to withhold 31% of the amount of any payments made to
such stockholders pursuant to the Offer or the Merger. To prevent backup federal
income tax withholding, each such stockholder must provide the Depositary with
such stockholder's correct taxpayer identification number and certify that such
stockholder is not subject to backup federal income tax withholding by
completing the Substitute Form W-9 included in the Letter of Transmittal. See
Instruction 9 of the Letter of Transmittal.
APPOINTMENT AS PROXY. By executing the Letter of Transmittal, a tendering
stockholder irrevocably appoints designees of the Purchaser as such
stockholder's agents, attorneys-in-fact and proxies, with full power of
substitution, in the manner set forth in the Letter of Transmittal, to the full
extent of such stockholder's rights with respect to the Shares tendered by such
stockholder and accepted for payment by the Purchaser and with respect to any
and all other Shares and other securities or rights issued or issuable in
respect of such Shares on or after the date of this Offer to Purchase. 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 upon the
acceptance for payment of such Shares by the Purchaser in accordance with the
terms of the Offer. Upon such acceptance for payment, all other powers of
attorney and proxies given by such stockholder with respect to such Shares and
such other securities or rights prior to such payment will be revoked, without
further action, and no subsequent powers of attorney and proxies may be given by
such stockholder (and, if given, will not be deemed effective). The designees of
the Purchaser will, with respect to the Shares and such other securities and
rights 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, or by consent in lieu of any such
meeting or otherwise. In order for Shares to be deemed validly tendered,
immediately upon the acceptance for payment of such Shares, the Purchaser or its
designee must be able to exercise full voting rights with respect to such Shares
and other securities, including voting at any meeting of stockholders.
DETERMINATION OF VALIDITY. All questions as to the form of documents and
the validity, eligibility (including time of receipt) and acceptance for payment
of any tender of Shares will be determined by the Purchaser, in its sole
discretion, whose determination shall be final and binding on all parties. The
Purchaser reserves the absolute right to reject any or all tenders determined by
it not to be in proper form or the acceptance of or payment for which may, in
the opinion of the Purchaser's counsel, be unlawful. The Purchaser also reserves
the absolute right to waive any of the conditions of the Offer to the extent
permitted by applicable law and the Merger Agreement or any defect or
irregularity in any tender of Shares of any particular stockholder whether or
not similar defects or irregularities are waived in the case of other
stockholders.
A tender of Shares pursuant to any of the procedures described above will
constitute the tendering Stockholder's acceptance of the terms and conditions of
the Offer, as well as the tendering Stockholder's representation and warranty to
Purchaser that (a) such Stockholder has a net long position in the Shares being
tendered within the meaning of Rule 14e-4 under the Exchange Act and (b) the
tender of such Shares complies with Rule 14e-4 under the Exchange Act. It is a
violation of Rule 14e-4 for a person, directly or indirectly, to tender Shares
for such person's own account unless, at the time of tender, the person so
tendering (i) has a net long position equal to or greater than the amount of (x)
Shares tendered or (y) other securities immediately convertible into or
exchangeable or exercisable for the Shares tendered and such person will acquire
such Shares for tender by conversion, exchange or exercise and (ii) will cause
such Shares to be delivered in accordance with the terms of the Offer. Rule
14e-4 provides a similar restriction applicable to the tender or guarantee of a
tender on behalf of another person.
7
<PAGE>
The Purchaser's interpretation of the terms and conditions of the Offer will
be final and binding. No tender of Shares will be deemed to have been validly
made until all defects and irregularities with respect to such tender have been
cured or waived by the Purchaser. None of Parent, the Purchaser or any of their
respective affiliates or assigns, the Depositary, the Information Agent or any
other person or entity will be under any duty to give any notification of any
defects or irregularities in tenders or incur any liability for failure to give
any such notification.
The Purchaser's acceptance for payment of Shares tendered pursuant to any of
the procedures described above will constitute a binding agreement between the
tendering stockholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares made
pursuant to the Offer are irrevocable. 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 as provided herein, may also be withdrawn at
any time after January 18, 1999.
If, for any reason whatsoever, acceptance for payment of any Shares tendered
pursuant to the Offer is delayed, or the Purchaser is unable to accept for
payment or pay for Shares 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, retain tendered Shares and such Shares
may not be withdrawn except to the extent that the tendering stockholder is
entitled to and duly exercises withdrawal rights as described in this Section 4.
In order for a withdrawal to be effective, a written or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
such notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn, and (if Share
Certificates have been tendered) the name of the registered holder of the Shares
as set forth in the Share Certificate, if different from that of the person who
tendered such Shares. If Share Certificates have been delivered or otherwise
identified to the Depositary, then prior to the physical release of such
certificates, the tendering stockholder must submit the serial numbers shown on
the particular certificates evidencing the Shares to be withdrawn and the
signature on the notice of withdrawal must be guaranteed by an Eligible
Institution, except in the case of Shares tendered for the account of an
Eligible Institution. If Shares have been tendered pursuant to the procedures
for book-entry transfer set forth in Section 3, the notice of withdrawal must
specify the name and number of the account at the Book-Entry Transfer Facility
to be credited with the withdrawn Shares, in which case a notice of withdrawal
will be effective if delivered to the Depositary by any method of delivery
described in the first sentence of this paragraph. Withdrawals of Shares may not
be rescinded. Any Shares properly withdrawn will be deemed not validly tendered
for purposes of the Offer, but may be tendered at any subsequent time prior to
the Expiration Date by following any of the procedures described in Section 3.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination shall be final and binding. None of Parent, the
Purchaser or any of their respective affiliates or assigns, the Depositary, the
Information Agent or any other person or entity will be under any duty to give
any notification of any defects or irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification.
5. CERTAIN TAX CONSEQUENCES.
The receipt of cash for Shares pursuant to the Offer or the Merger will be a
taxable transaction for federal income tax purposes and may also be a taxable
transaction under applicable state, local, foreign and other tax laws. For
federal income tax purposes, each selling or exchanging stockholder would
generally recognize gain or loss equal to the difference between the amount of
cash received and such
8
<PAGE>
stockholder's tax basis for the sold or exchanged Shares. Such gain or loss will
be capital gain or loss (assuming the Shares are held as a capital asset) and
any such capital gain or loss will be long term capital gain if the stockholder
held the Shares for more than one year. In the case of a stockholder who is an
individual, such capital gain will generally be subject to tax at a maximum rate
of 20%. Stockholders with a calendar tax year will be treated as having taxable
gain or loss for the 1999 tax year.
The foregoing discussion may not be applicable to certain types of
stockholders, including stockholders who acquired Shares pursuant to the
exercise of employee stock options or otherwise as compensation, individuals who
are not citizens or residents of the United States and foreign corporations, or
entities that are otherwise subject to special tax treatment under the Internal
Revenue Code of 1986, as amended (such as insurance companies, tax-exempt
entities and regulated investment companies). This discussion does not address
all aspects of federal income taxation that may be relevant to a particular
stockholder in light of such stockholder's personal investment circumstances nor
does it address any aspect of foreign, state, local or estate and gift taxation
that may be applicable to a stockholder.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY. STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS WITH
RESPECT TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE OFFER AND MERGER,
INCLUDING FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES.
6. PRICE RANGE OF THE SHARES; DIVIDENDS.
The Shares are traded on the New York Stock Exchange ("NYSE") under the
symbol "CZM." The following table sets forth, for the periods indicated, the
reported high and low sale prices for the Shares on the NYSE for the period
indicated, and the cash dividends declared on the Company's common stock during
each quarter presented.
CALMAT CO.
<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C> <C>
1996
First Quarter......................................... $18 3/4 $17 1/4 $ .10
Second Quarter........................................ $18 7/8 $16 3/8 $ .10
Third Quarter......................................... $18 3/4 $16 3/4 $ .10
Fourth Quarter........................................ $19 3/4 $18 $ .10
1997
First Quarter......................................... $19 1/4 $17 1/4 $ .10
Second Quarter........................................ $22 $17 $ .10
Third Quarter......................................... $26 $20 1/2 $ .10
Fourth Quarter........................................ $28 $23 3/8 $ .10
1998
First Quarter......................................... $29 1/2 $24 7/8 $ .10
Second Quarter........................................ $28 1/8 $21 9/16 $ .10
Third Quarter......................................... $23 15/16 $15 1/4 $ .10
Fourth Quarter (through November 19, 1998)............ $30 15/16 $15 13/16 --
</TABLE>
9
<PAGE>
On November 13, 1998, the last full day of trading prior to the announcement
of the execution of the Merger Agreement, according to publicly available
sources, the reported closing price on the NYSE for the Shares was $27 3/16 per
Share. Pursuant to the Merger Agreement, the Company agreed to discountinue its
regular $.10 per Share quarterly dividend.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
7. POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR THE SHARES; NYSE LISTING;
EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS.
POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR THE SHARES. The purchase of
Shares pursuant to the Offer will reduce the number of Shares that might
otherwise trade publicly and could adversely affect the liquidity and market
value of the remaining Shares held by the public. The purchase of Shares
pursuant to the Offer can also be expected to reduce the number of holders of
Shares. 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 or whether it
would cause future market prices to be greater or less than the Offer price
therefor.
NYSE LISTING. The purchase of Shares pursuant to the Offer will reduce the
number of holders of Shares and the number of Shares that might otherwise trade
publicly and could adversely affect the liquidity and market value of the
remaining Shares held by the public.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the standards for continued listing if, among other
things, the number of publicly held Shares falls below 600,000, the number of
holders of 100 Shares or more (or a unit of trading if less than 100 shares)
falls below 1,200, or the aggregate market value of such publicly held Shares
falls below $8,000,0000. Shares held by officers or directors of the Company or
their immediate families, and other concentrated holdings of 10% or more of the
Shares, ordinarily will not be considered as being publicly held for this
purpose.
In the event the Shares are no longer eligible for NYSE Listing, quotations
might still be available from other sources. The extent of the public market for
the Shares and the availability of such quotations would, however, depend upon
the number of holders of such Shares remaining at such time, the interest in
maintaining a market in such Shares on the part of securities firms, the
possible termination of registration of such Shares under the Exchange Act as
described below and other factors.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. The purchase of the 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 by the Company to the
Commission if the Shares are not listed on a "national securities exchange" and
there are fewer than 300 record holders of Shares. Termination of registration
of the Shares under the Exchange Act would substantially reduce the information
required to be furnished by the Company to its stockholders and the Commission
and would make certain provisions of the Exchange Act, such as the short-swing
profit recovery provisions of Section 16(b) under the Exchange Act and the
requirements of furnishing a proxy statement in connection with stockholders'
meetings pursuant to Section 14(a) or 14(c) under the Exchange Act and the
related requirement of an annual report, no longer applicable to the Company. If
the Shares are no longer registered under the Exchange Act, the requirements of
Rule 13e-3 under the Exchange Act with respect to "going private" transactions
would no longer be applicable to the Company. Furthermore, the ability of
"affiliates" of the Company and persons holding "restricted securities" of the
Company to dispose of such securities pursuant to Rule 144 promulgated under the
Securities Act of 1933, as amended, may be impaired or, with respect to certain
persons, eliminated. If registration of the Shares under the Exchange Act were
terminated, the Shares would no longer be "margin securities" or eligible for
NYSE listing. The Purchaser believes that the purchase of the Shares pursuant to
the Offer may result in the Shares becoming eligible for deregistration under
the
10
<PAGE>
Exchange Act, and it would be the intention of the Purchaser to cause the
Company to make an application for termination of registration of the Shares as
soon as possible after successful completion of the Offer if the registration of
Shares is then eligible for such termination.
If registration of the Shares is not terminated prior to the Merger, then
the Shares will no longer be eligible for NYSE listing and the registration of
the Shares under the Exchange Act will be terminated following the consummation
of the Merger.
MARGIN REGULATIONS. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which have the effect, among other things, of allowing
brokers to extend credit on the collateral of such Shares for the purpose of
buying, carrying or trading in securities ("Purpose Loans"). Depending upon
factors such as the number of record holders of the Shares and the number and
market value of publicly held Shares, following the purchase of Shares pursuant
to the Offer, the Shares might no longer constitute "margin securities" for
purposes of the Federal Reserve Board's margin regulations and, therefore, could
no longer be used as collateral for Purpose Loans made by brokers. In addition,
if registration of the Shares under the Exchange Act were terminated, the Shares
would no longer constitute "margin securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
The Company is a Delaware corporation with its principal executive offices
located at 3200 San Fernando Road, Los Angeles, California 90065. The following
description of the Company's business has been taken from, and is qualified in
its entirety by reference to, the Form 10-K filed by the Company for the year
ended December 31, 1997 (the "Form 10-K"):
CalMat Co. (the "Company" or "Registrant") has its corporate headquarters
in Los Angeles, California and has operations throughout the state of
California, in Phoenix and Tucson, Arizona, and in Albuquerque, New
Mexico. The Company was formed in 1984 by the business combination of
California Portland Cement Company ("CPC") and Conrock Co. ("Conrock").
Following its formation, the Company operated CPC as its Cement Division.
The Company subsequently disposed of the Cement Division in an exchange
transaction with Onoda California, Inc. in 1990. The Company's operations
are primarily concentrated in two business segments. One business
segment, the Construction Materials Division, is engaged in the
manufacture, production, distribution and sale of construction materials:
aggregates (crushed rock, sand and gravel), hot-mix asphalt and ready
mixed concrete. This business segment experiences fluctuations with
general levels of activity in the construction industry and with weather-
related construction delays, which normally occur during the first and
fourth quarters each year. The other business segment, the Properties
Division, is engaged in the ownership, leasing and management of
industrial and office buildings, the ownership and leasing of undeveloped
real property and sales of real property.
The selected financial information of the Company and its consolidated
subsidiaries set forth below has been excerpted and derived from the Form 10-K
and from the Form 10-Q filed by the Company for the nine months ended September
30, 1998. More comprehensive financial and other information is included in such
report (including management's discussion and analysis of financial condition
and results of operations) and in other reports and documents filed by the
Company with the Commission. The financial information set forth below is
qualified in its entirety by reference to such reports and documents filed with
the Commission and the financial statements and related notes contained therein.
These reports and other documents may be examined and copies thereof may be
obtained in the manner set forth below.
11
<PAGE>
CALMAT CO.
SELECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
NINE MONTHS ENDED -------------------------------
SEPTEMBER 30, 1998 1997 1996 1995
-------------------- --------- --------- ---------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
REVENUES:
Net sales and operating revenues.... $ 379,108 $ 460,973 $ 399,083 $ 370,313
Net gains on sale of real estate.... 2,143 5,377 5,500 4,133
Other income........................ 5,284 6,462 3,312 3,736
---------- --------- --------- ---------
386,535 472,812 407,895 378,182
---------- --------- --------- ---------
COST AND EXPENSES:
Cost of products sold and operating
expenses.......................... 314,567 394,764 347,163 326,513
Selling, general and administrative
expenses.......................... 34,867 44,908 37,746 35,847
Interest expense.................... 6,422 7,713 5,944 2,675
Other expenses...................... 1,378 1,783 1,864 3,005
Special charges..................... -- -- -- 47,000
---------- --------- --------- ---------
357,234 449,168 392,717 415,040
---------- --------- --------- ---------
Income (loss) before income taxes..... 29,301 23,644 15,178 (36,858)
Federal and state income taxes........ 9,569 7,042 5,844 (15,487)
---------- --------- --------- ---------
Net income (loss)..................... $ 19,732 $ 16,602 $ 9,334 $ (21,371)
---------- --------- --------- ---------
Net income (loss)--diluted............ $ 0.82 $ 0.70 $ 0.40 $ (0.92)
---------- --------- --------- ---------
---------- --------- --------- ---------
Weighted average number of shares
outstanding......................... 23,953 23,724 23,263 23,176
---------- --------- --------- ---------
---------- --------- --------- ---------
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, --------------------
1998 1997 1996
-------------- --------- ---------
<S> <C> <C> <C>
BALANCE SHEET DATA (AT END OF PERIOD)
Current assets........................................ $ 143,303 $ 121,552 $ 110,239
Property, plant and equipment, net.................... 453,165 431,478 411,465
Goodwill, net......................................... 49,994 48,719 50,410
Other assets.......................................... 37,217 34,059 28,602
Total assets.......................................... 683,679 635,808 600,716
Current liabilities................................... 94,908 73,812 57,537
Other long-term liabilities........................... 35,909 37,701 38,429
Deferred income taxes................................. 59,345 59,349 56,325
Long-term debt........................................ 130,256 118,401 116,233
Stockholders' equity.................................. 363,261 346,545 332,192
Total liabilities and stockholders equity............. 683,679 635,808 600,716
</TABLE>
The Company is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is required to file periodic reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Certain information, as of
particular dates, concerning the Company's business, principal physical
properties, capital structure,
12
<PAGE>
material pending legal proceedings, operating results, financial condition,
directors and officers (including their remuneration and the stock options
granted to them), the principal holders of the Company's securities, any
material interests of such persons in transactions with the Company and certain
other matters is required to be disclosed in proxy statements and annual reports
distributed to the Company's stockholders and filed with the Commission. Such
reports, proxy statements and other information can be inspected and copied at
the public reference facilities maintained by Commission at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional
offices at 500 West Madison Street, Chicago, Illinois 60606 and 7 World Trade
Center, New York, New York 10048. Copies of such material can also be obtained
at prescribed rates from the Public Reference Section of the Commission at its
principal office at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549. Such material may be obtained electronically by visiting the Commission's
web site on the Internet at http://www.sec.gov. The Shares are traded on the New
York Stock Exchange. Reports, proxy statements and other information concerning
the Company should also be available for inspection at the New York Stock
Exchange, at 20 Broad Street, New York, New York 10005.
Although neither Parent nor the Purchaser has any knowledge that any such
information is untrue, neither Parent nor the Purchaser takes any responsibility
for the accuracy or completeness of information contained in this Offer to
Purchase with respect to the Company or any of its subsidiaries or affiliates or
for any failure by the Company to disclose events which may have occurred or may
affect the significance or accuracy of any such information.
9. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER.
Parent is a New Jersey corporation whose principal executive offices are
located at One Metroplex Drive, Birmingham, Alabama 35209. Parent produces,
distributes and sells construction materials and industrial and specialty
chemicals. Parent is the nation's leading producer of construction aggregates.
Parent operates primarily through two business groups: Construction Materials
and Chemicals. In 1997, Parent had approximately 7,180 employees and net sales
of approximately $1.7 billion.
The Purchaser's principal executive offices are located care of Vulcan
Materials Company, One Metroplex Drive, Birmingham, Alabama 35209. The Purchaser
is a newly formed Delaware corporation and a wholly-owned subsidiary of Parent.
The Purchaser has not conducted any business other than in connection with the
Offer and the Merger, and was formed solely for the purpose of consummating the
Offer and the Merger and carrying out related transactions.
The name, business address, citizenship, present principal occupation and
employment history for the past five years of each of the directors and
executive officers of Parent and the Purchaser are set forth in Schedule I.
Parent is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is required to file periodic reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Certain information, as of
particular dates, concerning Parent's business, principal physical properties,
capital structure, material pending legal proceedings, operating results,
financial condition, directors and officers (including their remuneration and
stock options granted to them), the principal holders of Parent's securities,
any material interests of such persons in transactions with Parent and certain
other matters is required to be disclosed in proxy statements and annual reports
distributed to Parent's stockholders and filed with the Commission. Such
reports, proxy statements and other information may be inspected and copied at
the Commission's public reference facilities and should also be available for
inspection at the New York Stock Exchange, 20 Broad Street, New York, New York
10005. Such material may be obtained electronically by visiting the Commission's
website on the Internet at http://www.sec.gov.
Other than 37,000 Shares that are owned by Parent and were acquired in the
ordinary course of Parent's business and not during the past 60 days, and except
as set forth elsewhere in this Offer to
13
<PAGE>
Purchase or Schedule I hereto: (i) neither Parent nor the Purchaser nor, to the
knowledge of Parent or the Purchaser, any of the persons listed in Schedule I
hereto or any associate or majority-owned subsidiary of Parent or the Purchaser
or any of the persons so listed, beneficially owns or has a right to acquire any
Shares or any other equity securities of the Company; (ii) neither Parent nor
the Purchaser nor, to the knowledge of Parent or the Purchaser, any of the
persons or entities referred to in clause (i) above or any of their executive
officers, directors or subsidiaries has effected any transaction in the Shares
or any other equity securities of the Company during the past 60 days; (iii)
neither Parent nor the Purchaser nor, to the knowledge of Parent or the
Purchaser, any of the persons listed in Schedule I hereto, has any contract,
arrangement, understanding or relationship with any other person with respect to
any securities of the Company (including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or the voting
of any such securities, joint ventures, loan or option arrangements, puts or
calls, guaranties of loans, guaranties against loss or the giving or withholding
of proxies, consents or authorizations); (iv) since January 1, 1995, there have
been no transactions which would require reporting under the rules and
regulations of the Commission between Parent or the Purchaser or any of their
respective subsidiaries or, to the knowledge of Parent or the Purchaser, any of
the persons listed in Schedule I hereto, on the one hand, and the Company or any
of its executive officers, directors or affiliates, on the other hand; and (v)
since January 1, 1995, there have been no contacts, negotiations or transactions
between Parent or the Purchaser or any of their respective subsidiaries or, to
the knowledge of Parent or the Purchaser, any of the persons listed in Schedule
I hereto, on the one hand, and the Company or any of its subsidiaries or
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.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.
From time to time over the past ten years, Parent and the Company have
engaged in discussions on various matters relating to their respective
companies, including the possibility of a business combination or other
strategic transaction between Parent and the Company. In late August, 1998,
Donald M. James, Chairman and Chief Executive Officer of Parent, telephoned A.
Frederick Gerstell, Chairman and Chief Executive Officer of the Company, to
request a meeting.
On September 8, 1998, Messrs. James and Gerstell met and discussed generally
a business combination. At the meeting, Mr. James indicated that Parent was
willing to consider an acquisition of the Company for cash, but that Parent
would need to conduct a due diligence investigation of the Company before it
would be in a position to make or proceed with any proposal regarding such a
transaction. Mr. Gerstell indicated that he might be willing to consider such a
possible transaction between the companies and that he would confer with the
Company's Board of Directors and its advisors regarding Parent's interest in
such a possible transaction. Following the meeting, the parties agreed that,
although specific terms with respect to a possible transaction had not been
discussed, it would be appropriate to enter into an agreement relating to the
exchange of confidential information, which was executed by Parent and the
Company on September 24, 1998.
After conferring with and receiving authorization to proceed from the
Company's Board of Directors in early October, Mr. Gerstell contacted Mr. James
and indicated that the Company was willing to continue discussions regarding a
possible acquisition of the Company by Parent and to permit Parent to commence a
preliminary due diligence review of the Company. Between October 12 and October
31, 1998, the Company provided Parent with information relating to the Company
and its businesses, and representatives of Parent and the Company continued to
discuss generally the possible structures and potential valuations of an
acquisition transaction. During these discussions, representatives of Parent
proposed potential ranges of valuation for the Company which representatives of
the Company indicated were insufficient.
At a meeting of Parent's Board of Directors held on November 1, 1998, Mr.
James and other members of Parent's senior management discussed with the
directors the results of the discussions
14
<PAGE>
between the parties and of the preliminary due diligence review of the Company.
Following deliberation thereon, the Board authorized Mr. James and senior
management to continue discussions regarding the possible acquisition of the
Company by Parent and to make a definitive proposal to the Company. On November
1, 1998, Mr. James made a proposal to Mr. Gerstell for an acquisition of the
Company by Parent at a per Share price of $30.00 in cash, subject to completion
of its due diligence review of the Company and negotiation and execution of
definitive documentation and board approval thereof.
A meeting of the Company's Board of Directors was held on November 4, 1998,
at which Parent's proposal was considered by the Company's directors, and
presentations relating thereto were given by senior management and financial and
legal advisors. Following that meeting, at the request of the Company's Board of
Directors, Mr. Gerstell informed Mr. James that the Company was prepared to
permit Parent to complete its due diligence and to negotiate definitive terms
with respect to the acquisition of the Company by Parent at a per Share price of
$31.00 in cash, subject to approval of the Company's Board of Directors of the
terms and conditions to be contained in the definitive documentation. After
consulting with Parent's Board of Directors, senior management and advisors, Mr.
James informed Mr. Gerstell on November 5, 1998, that Parent was prepared to
increase the proposed per Share price to $31.00, subject to the conditions
previously discussed.
Between November 5 and November 10, 1998, representatives of Parent
continued their due diligence review of the Company at the Company's
headquarters in Los Angeles, California. On November 7, 1998, Parent furnished
the Company with a draft Merger Agreement. Additional discussions between
Parent, the Company and their respective advisors took place between November 7
and November 11, 1998, during which the significant terms of the Merger
Agreement were negotiated. At a meeting of the Company's Board of Directors held
on November 11, 1998, Mr. Gerstell, other members of the Company's management
and the Company's financial and legal advisors discussed the terms and
conditions of the contemplated transaction. At that meeting a form of the Merger
Agreement was presented to, and unanimously approved by, the Board of Directors
of the Company, subject to approval by Parent's Board of Directors of the Merger
Agreement and subject to satisfactory resolution of the final terms of the
Merger Agreement.
From November 12 through November 14, 1998, Parent, the Company and their
respective advisors negotiated the remaining provisions of the Merger Agreement
on the terms authorized by the Company's Board of Directors at its November 11
meeting. At a meeting of Parent's Board of Directors held on November 14, 1998,
Mr. James, other members of Parent's senior management and Parent's financial
and legal advisors presented the terms of the proposed Merger Agreement and
discussed with the Board various factors relating to the transactions
contemplated thereby, including the per Share price. After due consideration,
the Board of Directors of Parent unanimously approved the Merger Agreement. The
Merger Agreement was executed later that day by Parent and the Company. On
November 16, 1998, the parties issued a joint press release announcing the
execution of the Merger Agreement.
11. PURPOSE OF THE OFFER; THE MERGER AGREEMENT; THE SUPPORT AGREEMENTS;
APPRAISAL RIGHTS; PLANS FOR THE COMPANY; "GOING PRIVATE" TRANSACTIONS; THE
RIGHTS.
(A) PURPOSE.
The purpose of the Offer and the Merger is to acquire control of, and the
entire equity interest in, the Company. The Offer, as the first step in the
acquisition of the Company, is intended to facilitate the acquisition of all the
Shares. The purpose of the Merger is to acquire all capital stock of the Company
not purchased pursuant to the Offer or otherwise. As a result of the Offer and
the Merger, the Company will become a wholly-owned subsidiary of Parent.
The following is a summary of certain provisions of the Merger Agreement and
the Support Agreements. This summary is qualified in its entirety by reference
to the Merger Agreement and the Support
15
<PAGE>
Agreements, which are incorporated by reference and copies of which have been
filed with the Commission as exhibits to the Schedule 14D-1. The Merger
Agreement and the Support Agreements may be examined and copies may be obtained
at the places set forth in Section 8. Defined terms used herein and not defined
herein shall have the respective meanings assigned to those terms in the Merger
Agreement.
(B) THE MERGER AGREEMENT
THE OFFER. The Merger Agreement provides that the Purchaser will commence
the Offer and that, upon the terms and subject to prior satisfaction or waiver
of the conditions of the Offer, as set forth in Section 14, the Purchaser will
purchase all Shares validly tendered and not withdrawn pursuant to the Offer.
The Merger Agreement provides that, without the prior written consent of the
Company, the Purchaser will not (i) decrease the Offer price or change the form
of consideration payable in the Offer, (ii) decrease the number of Shares sought
to be purchased in the Offer, (iii) subject to Parent's and Purchaser's right to
waive same (subject to clause (iv) below), amend the conditions to the Offer or
impose additional conditions to the Offer, (iv) waive the Minimum Condition or
(v) amend any other term of the Offer in a manner adverse to the holders of
Shares. Notwithstanding the foregoing, the Purchaser is required to extend the
Offer from time to time, (i) 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 all Shares shall not have been satisfied or waived or (ii) for any
period required by any rule, regulation, interpretation or position of the
Commission or its staff applicable to the Offer; PROVIDED that no individual
extension shall extend beyond five business days, or for such longer period as
required by any applicable law or any such rule, regulation, interpretation or
position, from the immediately preceding Expiration Date and that Purchaser is
in no event required to extend the Offer beyond March 31, 1999. In addition, if
all conditions to the Offer are satisfied and the number of Shares tendered and
not withdrawn is more than 70%, but less than 90%, of the outstanding number of
Shares on a fully diluted basis, the Purchaser shall have the right, in its sole
discretion, to extend the Offer from time to time for up to a maximum of ten
additional business days in the aggregate for all such extensions beyond the
latest Expiration Date under the provisions described in the preceding sentence.
RECOMMENDATION. The Company has represented to Parent in the Merger
Agreement that the Board of Directors of the Company (the "Company Board"), at a
meeting duly called and held, has (i) determined by unanimous vote that the
Offer and the Merger are fair to and in the best interests of the Company's
stockholders, (ii) approved the Offer and the Merger Agreement in accordance
with the GCL, (iii) recommended acceptance of the Offer and adoption of the
Merger Agreement by the Company's stockholders (if such adoption is required by
applicable law), and (iv) taken all other action necessary to render Section 203
of the GCL and the Rights inapplicable to the Offer and the Merger; PROVIDED,
HOWEVER, that such recommendation and approval may be withdrawn, modified or
amended to the extent that the Company Board determines in good faith, after
consultation with its outside legal counsel, that failure to take such action
would constitute a breach of the Company Board's fiduciary obligations under
applicable law. The Company further represented that, prior to the execution of
the Merger Agreement, CSFB has delivered to the Company Board its opinion, and
as of the date of execution of the Merger Agreement (November 14, 1998)
delivered its written opinion, in each case to the effect that, as of the date
of such opinion, the cash consideration to be received by the holders of the
Shares pursuant to the Offer and the Merger is fair to such holders from a
financial point of view.
DIRECTORS. The Merger Agreement provides that, subject to compliance with
applicable law, Parent, promptly upon the payment by the Purchaser for Shares
pursuant to the Offer, and from time to time thereafter, is entitled to
designate such number of directors, rounded up to the next whole number, on the
Company Board as is equal to the product of the total number of directors on the
Company Board (determined after giving effect to the directors so elected
pursuant to such provision) multiplied by the percentage that the aggregate
number of Shares beneficially owned by Parent or its affiliates bears to the
total number of Shares then outstanding. The Company shall, upon request of
Parent, promptly take
16
<PAGE>
all actions necessary to cause Parent's designees to be so elected, including,
if necessary, seeking the resignations of one or more existing directors;
PROVIDED, HOWEVER, that prior to the time the Merger becomes effective (the
"Effective Time"), the Company Board shall always have at least two members who
are neither officers, directors, affiliates or designees of the Purchaser or any
of its affiliates ("Purchaser Insiders"). If the number of directors who are not
Purchaser Insiders is reduced below two prior to the Effective Time, the
remaining director who is not a Purchaser Insider will be entitled to designate
a person who is not a Purchaser Insider to fill such vacancy. Following the
election or appointment of Parent's designees and prior to the Effective Time,
any amendment or termination of the Merger Agreement by the Company, any
extension by the Company of the time for performance of any of the obligations
or other acts of Parent or the Purchaser, any waiver of any of the Company's
rights thereunder or any other actions taken by the Company, will require the
concurrence of a majority of the directors of the Company then in office who are
not Purchaser Insiders (or in the case where there are two or fewer directors
who are not Purchaser Insiders, the concurrence of one director who is not a
Purchaser Insider) if such amendment, termination, extension, waiver or action
would be reasonably likely to have an adverse effect on the minority
stockholders of the Company.
THE MERGER. The Merger Agreement provides that, at the Effective Time, the
Purchaser will be merged with and into the Company. Following the Merger, the
separate corporate existence of the Purchaser will cease and the Company will
continue as the Surviving Corporation.
The Company has agreed pursuant to the Merger Agreement that, if required by
applicable law in order to consummate the Merger, it will (i) duly call, give
notice of, convene and hold a special meeting of its stockholders as soon as
practicable following the acceptance for payment of and payment for Shares by
the Purchaser pursuant to the Offer for the purpose of adopting the Merger
Agreement; (ii) prepare and file with the Commission a preliminary proxy
statement relating to the Merger Agreement, and use its reasonable best efforts
(x) to obtain and furnish the information required to be included by the
Commission in the Proxy Statement (as defined herein) and, after consultation
with Parent, to respond promptly to any comments made by the Commission with
respect to the preliminary proxy statement and to cause a definitive proxy
statement (the "Proxy Statement") to be mailed to its stockholders and (y) to
obtain the necessary approvals of the Merger and adoption of the Merger
Agreement by its stockholders; and (iii) subject to the fiduciary obligations of
the Company Board under applicable law, include in the Proxy Statement the
recommendation of the Company Board that stockholders of the Company vote in
favor of the approval of the Merger Agreement. Parent has agreed in the Merger
Agreement that it will vote, or cause to be voted, all of the Shares then owned
by it, the Purchaser or any of its other subsidiaries in favor of the approval
of the Merger and the Merger Agreement.
The Merger Agreement further provides that, notwithstanding the foregoing,
if Parent, the Purchaser or any other of Parent's subsidiaries acquires at least
90% of the outstanding Shares pursuant to the Offer or otherwise, the parties to
the Merger Agreement will take all necessary and appropriate action to cause the
Merger to become effective as soon as practicable after the acceptance for
payment of and payment for the Shares by the Purchaser pursuant to the Offer
without a meeting of the stockholders of the Company, in accordance with Section
253 of the GCL.
CHARTER, BYLAWS, DIRECTORS AND OFFICERS. The Certificate of Incorporation
of the Purchaser, as in effect immediately prior to the Effective Time, shall be
the Certificate of Incorporation of the Surviving Corporation, until thereafter
amended in accordance with the provisions thereof and applicable law. The
By-Laws of the Purchaser in effect at the Effective Time shall be the By-Laws of
the Surviving Corporation, until thereafter amended in accordance with
applicable law. Subject to applicable law, the directors of the Purchaser
immediately prior to the Effective Time will be the initial directors of the
Surviving Corporation and will hold office until their respective successors are
duly elected and qualified, or their earlier death, resignation or removal, and
the officers of the Purchaser immediately prior to the Effective Time will be
the initial officers of the Surviving Corporation.
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<PAGE>
CONVERSION OF SECURITIES. By virtue of the Merger and without any action on
the part of the holders thereof, at the Effective Time each Share issued and
outstanding immediately prior to the Effective Time (other than (i) 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 and without any action on the
part of the holder thereof, will be canceled and retired and will cease to exist
with no payment being made with respect thereto and (ii) Dissenting Shares) will
be canceled and retired and will be converted into the right to receive $31.00
(or any higher Purchaser determines in its sole discretion to pay in the Offer)
net per Share in cash, payable to the holder thereof, without interest thereon
(the "Merger Price"), upon surrender of the certificate formerly representing
such Share. At the Effective Time, each share of common stock of the Purchaser,
par value $.01 per share, issued and outstanding immediately prior to the
Effective Time will, by virtue of the Merger and without any action on the part
of the holder thereof, be converted into and become one validly issued, fully
paid and non-assessable share of common stock, par value $.01 per share, of the
Surviving Corporation.
The Merger Agreement provides that, prior to the Effective Time, the Company
Board (or, if appropriate, any committee thereof) shall adopt appropriate
resolutions and use its reasonable best efforts to provide for the cancellation,
effective at the Effective Time, of all the outstanding Options granted under
any stock option or similar plan of the Company (the "Stock Plans"), or under
any agreement, without any payment therefor except as otherwise discussed in
this Section 11. Immediately prior to the Effective Time, all Options (whether
vested or unvested) will be canceled (and to the extent exercisable shall no
longer be exercisable) and will entitle each holder thereof, in cancellation and
settlement therefor, to a payment, if any, in cash by the Company (less any
applicable withholding taxes), at the Effective Time, equal to the product of
(i) the total number of Shares subject to such Option and (ii) the excess, if
any, of the Merger Price over the exercise price per Share subject to such
Option (the "Cash Payments").
REPRESENTATIONS AND WARRANTIES. Pursuant to the Merger Agreement, the
Company has made customary representations and warranties to the Parent and the
Purchaser with respect to, among other matters, its organization and
qualification, capitalization, authority, required filings, consents and
approvals, financial statements, public filings, litigation, compliance with
law, employee benefit plans, environmental matters, material contracts, opinion
of financial advisor, information to be included in the Schedule 14D-1, the
Proxy Statement or the other documents required to be filed with the Commission
or any other governmental authority relating to the Offer and the Merger, tax
status, condition of assets, relationships with customers and employees and the
absence of any material adverse effects on the Company. The Parent and the
Purchaser have made customary representations and warranties to the Company with
respect to, among other matters, its organization, qualifications, authority,
required filings, consents and approvals, information to be included in the
Schedule 14D-9, the Proxy Statement or the other documents required to be filed
with the Commission or any other governmental authority relating to the Offer
and the Merger and availability of funds.
COVENANTS. The Merger Agreement obligates the Company and its subsidiaries,
from the date of the Merger Agreement until the Effective Time, to conduct their
operations only in the ordinary and usual course of business consistent with
past practice and obligates the Company and its subsidiaries to use their
reasonable best efforts to preserve intact their business organizations, to keep
available the services of their present officers and key employees and to
preserve the good will of those having business relationships with them. The
Merger Agreement also contains specific restrictive covenants as to certain
impermissible activities of the Company prior to the Effective Time, which
provide that the Company will not (and will not permit any of its subsidiaries
to) take certain actions without the prior written consent of Parent including,
among other things, restrictions on amendments to its certificate of
incorporation or by-laws, issuances or sales of its securities, changes in
capital structure, dividends and other distributions, repurchases or redemptions
of securities, material acquisitions or dispositions, increases in compensation
or adoption of new benefit plans and certain other material events or
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transactions. This provision prevents the Company from declaring and paying its
regular $.10 per Share quarterly dividend.
ACCESS TO INFORMATION. The Merger Agreement provides that, until the
Effective Time, the Company will give Parent and the Purchaser and their
representatives reasonable access, during normal business hours, to the offices
and other facilities and to the books and records of the Company and its
subsidiaries, and to provide Parent and the Purchaser copies of documents filed
pursuant to federal or state securities laws during this period, and, upon
reasonable request, other information with respect to the business and
operations of the Company and its subsidiaries.
EFFORTS. Subject to the terms and conditions provided in the Merger
Agreement, each of the Company, Parent and the Purchaser shall cooperate and use
their respective reasonable best efforts to make or cause to be made all filings
necessary or proper under applicable laws and regulations to consummate and make
effective the transactions contemplated by the Merger Agreement.
Each of the parties also has agreed to use its reasonable best efforts to
obtain as promptly as practicable all Consents (as defined in the Merger
Agreement) of any governmental authorities or any other person required in
connection with, and waivers of any Violations (as defined in the Merger
Agreement) that may be caused by, the consummation of the transactions
contemplated by the Merger Agreement.
PUBLIC ANNOUNCEMENTS. The Merger Agreement provides that the Company, on
the one hand, and Parent and the Purchaser, on the other hand, agree to consult
promptly with each other prior to issuing any press release or otherwise making
any public statement with respect to the Offer, the Merger and the other
transactions contemplated by the Merger Agreement, agree to provide to the other
party for review a copy of any such press release or statement, and shall not
issue any such press release or make any such public statement prior to such
consultation and review, unless required by applicable law or any listing
agreement with a securities exchange.
EMPLOYEE BENEFIT ARRANGEMENTS. With respect to employee benefit matters,
the Merger Agreement provides that, from and after the Effective Time, Parent
will honor, or Parent will cause to have honored, all obligations under the
Company's employee benefit plans, subject to certain dollar limitations with
respect to specified employment, severance and change in control agreements.
Notwithstanding the foregoing, from and after the Effective Time, Parent or its
designee may exercise any right to amend, modify, alter or terminate any Plan,
provided that any such action will not adversely affect any vested rights or any
rights for which the agreement of the other party or a beneficiary is required.
The Merger Agreement also provides that employees of the Surviving Corporation
immediately following the Effective Time who immediately prior to the Effective
Time were employees of the Company or any Company subsidiary will be given
credit for purposes of eligibility, vesting and levels of benefits (other than
for benefit accrual purposes under defined benefit pension plans) under each
employee benefit plan, program, policy or arrangement of Parent or the Surviving
Corporation in which such employees participate subsequent to the Effective Time
for all service with the Company and any Company subsidiary prior to the
Effective Time (to the extent such credit was given by the Company or any
Company subsidiary). The Company has agreed that it will not take any action
which could prevent or impede the termination of the 1987 Stock Option Plan, the
1990 Stock Option Plan, the 1993 Stock Option Plan, the 1998 Stock Option Plan
and the Employee Stock Purchase Plan of the Company, as any of them may have
been amended, and all other Stock Plans and any other plan, program or
arrangement providing for the issuance or grant of any other interest in respect
of the capital stock of the Company or any subsidiary of the Company, in each
case, effective prior to the Effective Time. The Company has agreed to use its
reasonable best efforts to obtain all necessary consents so that after the
Effective Time, holders of Options will have no rights other than the rights of
the holders of Options to receive the Cash Payment, if any, in cancellation and
settlement thereof.
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INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE. Pursuant to the Merger
Agreement, Parent has agreed that from and after the Effective Time all rights
to indemnification, defense and advancement of funds existing at the date of the
Merger Agreement in favor of individuals who were directors or officers of the
Company or any of its subsidiaries at or prior to the Effective Time as set
forth in the Certificate of Incorporation or By-Laws of the Company or pursuant
to certain agreements shall survive the Merger and shall continue in full force
and effect and will be honored by the Surviving Corporation. The Merger
Agreement further provides that the Company shall, and from and after the
Effective Time, the Surviving Corporation shall, cause to be maintained in
effect for not less than six years (except as provided below) from the Effective
Time the current policies of the directors' and officers' liability insurance
maintained by the Company; PROVIDED that the Surviving Corporation may
substitute therefor other policies of at least the same coverage amounts and
which contain terms and conditions not less advantageous in the aggregate to the
beneficiaries for the current policies and PROVIDED that such substitution shall
not result in any gaps or lapses in coverage with respect to matters occurring
prior to the Effective Time; and PROVIDED, FURTHER, that the Surviving
Corporation shall not be required to pay an annual premium in excess of 200% of
the last annual premium paid by the Company prior to the date hereof (which the
Company represents to be $233,200 for the 12-month period ending June 27, 1998)
and if the Surviving Corporation is unable to obtain such insurance it shall
obtain as much comparable insurance as possible for an annual premium equal to
such maximum amount. Notwithstanding the foregoing, at any time on or after the
third anniversary of the Effective Time, Parent may, at its election, provide
funds to the Surviving Corporation to the extent necessary so that the Surviving
Corporation may self-insure with respect to the level and scope of insurance
coverage required in lieu of causing to remain in effect any directors' and
officers' liability insurance policy.
Any indemnified party under the Merger Agreement wishing to claim such
indemnification, upon learning of any such claim, action, suit, proceeding or
investigation, must promptly notify Parent thereof (but any such failure or
delay will not relieve Parent of liability except to the extent Parent is
materially prejudiced as the indemnifying as a result of such failure or delay).
After the Effective Time, in the event of any such claim, action, suit,
proceeding or investigation (whether arising before or after the Effective
Time), (i) Parent or the Surviving Corporation will have the right to assume the
defense thereof and Parent will not be liable to such Indemnified Parties for
any legal expenses of other counsel or any other expenses subsequently incurred
by such indemnified parties in connection with the defense thereof, (ii) the
indemnified parties will cooperate in the defense of any such matter and (iii)
Parent will not be liable for any settlement effected without its prior written
consent, which consent will not be reasonably withheld, provided that Parent
shall not have any obligation to any indemnified party when and if a court of
competent jurisdiction shall ultimately determine, and such determination shall
have become final and non-appealable, that such person is not entitled to
indemnification in such manner under applicable law. The Merger Agreement
provides that any indemnified party may retain its own separate counsel
reasonably satisfactory to such party if there is a conflict of interest
requiring separate representation under applicable principles of professional
responsibility and Parent will be responsible for any reasonable legal fees or
expenses of such counsel subsequently incurred by such indemnified party in
connection with such participation or defense which will be paid promptly as
detailed statements of such fees and expenses are received.
NOTIFICATION OF CERTAIN MATTERS. Parent and the Company have agreed to
promptly notify each other of (i) the occurrence or non-occurrence of any fact
or event which would be reasonably likely (A) to cause any representation or
warranty contained in the Merger Agreement to be untrue or inaccurate in any
material respect at any time prior to the Effective Time or (B) to cause any
covenant, condition or agreement under the Merger Agreement not to be complied
with or satisfied and (ii) any failure of the Company, Parent or the Purchaser,
as the case may be, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it under the Merger Agreement;
PROVIDED, HOWEVER, that no such notification will affect the representations or
warranties of any party or the conditions to the obligations of any party. Each
of the Company, Parent and the Purchaser is also required to 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 the Merger Agreement.
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RIGHTS AGREEMENT. The Company covenants and agrees in the Merger Agreement
that it will not (i) redeem the Rights, (ii) amend the Rights Agreement or (iii)
take any action which would allow any Person (as defined in the Rights
Agreement) other than Parent or the Purchaser to acquire beneficial ownership of
25% or more of the Shares without causing a Distribution Date (as such term is
defined in the Rights Agreement) to occur.
STATE TAKEOVER LAWS. The Merger Agreement provides that each party will,
upon the request of another party, take all reasonable steps to assist in any
challenge by such other party to the validity or applicability to the
transactions contemplated by the Merger Agreement, including the Offer and the
Merger, of any state takeover law.
NO SOLICITATION. The Merger Agreement requires the Company, its affiliates
and their respective officers, directors (in their capacity as such), employees,
representatives and agents to immediately cease any existing discussions or
negotiations with any parties with respect to any acquisition or exchange of all
or any material portion of the assets of, or any material equity interest in,
the Company or any of its subsidiaries or any business combination with the
Company or any of its subsidiaries. The Merger Agreement further provides that,
prior to the Effective Time, the Company will not authorize or permit any of its
subsidiaries or any of its or its subsidiaries' directors (in their capacity as
such), officers, employees, agents or representatives, directly or indirectly,
to solicit, initiate, encourage or facilitate, or furnish or disclose non-public
information in furtherance of, any inquiries or the making of any proposal with
respect to any merger, liquidation, recapitalization, consolidation or other
business combination involving the Company or its subsidiaries or acquisition of
any material amount of capital stock or any material portion of the assets of
the Company or of its subsidiaries (except for acquisitions of assets in the
ordinary course of business consistent with past practice), or any combination
of the foregoing (an "Acquisition Transaction"), or negotiate or engage in
substantive discussions with any person with respect to any Acquisition
Transaction or enter into or resolve to enter into any agreement, arrangement or
understanding with respect to any Acquisition Transaction or requiring it to
abandon, terminate or fail to consummate the Merger or any other transaction
contemplated by the Merger Agreement; PROVIDED, HOWEVER, that the Company may
furnish information to, and negotiate or otherwise engage in substantive
discussions with, any person who has delivered a bona fide written proposal for
an Acquisition Transaction, and may terminate the Merger Agreement pursuant to
Section 8.1(g) of the Merger Agreement in order to immediately thereafter enter
into a definitive agreement with respect to such Acquisition Transaction, in
each case, if the Company Board determines in good faith following consultation
with outside counsel that failing to take such action would constitute a breach
of the fiduciary obligations of the Company Board under applicable law, provided
that prior to furnishing non-public information to any such party, the Company
shall have entered into a confidentiality agreement containing terms at least as
favorable to the Company as those of the Confidentiality Agreement (other than
the stand-still provisions thereof) with respect to the maintenance of
confidentiality and the permitted use of information provided by or on behalf of
the Company.
The Merger Agreement further provides that, from and after the execution of
the Merger Agreement, the Company will promptly advise Parent of any
discussions, negotiations or proposals relating to an Acquisition Transaction,
identify the offeror and furnish to Parent a copy of any such proposal, if it is
in writing, or a written summary of any such proposal relating to an Acquisition
Transaction if it is not in writing, and that the Company will promptly advise
Parent of any material development relating to any such proposal, including
results of any discussions or negotiations with respect thereto.
Nothing in the Merger Agreement prohibits the Company from taking and
disclosing to its stockholders a position contemplated by Rule 14d-9 or Rule
14e-2(a) under the Exchange Act or from making any disclosure to the Company's
stockholders, in each case, if, in the good faith judgment of the Company Board
following consultation with outside counsel, failure to take such positions or
so to disclose such would constitute a violation of applicable law.
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CONDITIONS TO CONSUMMATION OF THE MERGER. Pursuant to the Merger Agreement,
the respective obligations of Parent, the Purchaser and the Company to
consummate the Merger are subject to the satisfaction or waiver, at or before
the Effective Time, of each of the following conditions: (i) the stockholders of
the Company shall have duly adopted the Merger Agreement, if required by
applicable law; (ii) the Purchaser shall have accepted for payment and paid for
Shares pursuant to the Offer in accordance with the terms of the Merger
Agreement; and (iii) the consummation of the Merger is not restrained, enjoined
or prohibited by any order, judgment, decree, injunction or ruling of a court of
competent jurisdiction or any governmental authority and there is not any
statute, rule or regulation enacted, promulgated or deemed applicable to the
Merger by any governmental authority which prevents the consummation of the
Merger or has the effect of making the purchase of Shares illegal.
TERMINATION. The Merger Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, notwithstanding approval
thereof by the stockholders of the Company (with any termination by Parent also
being an effective termination by the Purchaser), provided that if Shares are
accepted for payment pursuant to the Offer, neither Parent nor the Purchaser may
terminate the Merger Agreement or abandon the Merger except pursuant to clause
(a) below:
(a) by the mutual written consent of Parent and the Company, by action
of their respective Boards of Directors;
(b) by the Company if (i) Parent or the Purchaser fails to commence the
Offer as provided in Section 1.1 of the Agreement, or (ii) Parent or the
Purchaser has not accepted for payment and paid for the Shares pursuant to
the Offer in accordance with the terms of the Offer on or before March 31,
1999;
(c) by Parent or the Company if the Offer expires pursuant to its terms
without any Shares being purchased thereunder;
(d) by Parent or the Company if any court of competent jurisdiction or
other governmental authority shall have issued an order, decree or ruling or
taken any other action permanently enjoining, restraining or otherwise
prohibiting the Merger or the acceptance for payment of, or payment for,
Shares pursuant to the Offer and such order, decree or ruling or other
action shall have become final and nonappealable, provided that the party
seeking to terminate the Merger Agreement shall have used its reasonable
best efforts to remove or lift such order, decree or ruling;
(e) by Parent if the Company breaches its covenant in Section 6.8 of
the Merger Agreement (relating to the Rights Agreement);
(f) by Parent if the Company Board shall have withdrawn or modified
(including by amendment of the Schedule 14D-9) in a manner adverse to the
Purchaser its approval or recommendation of the Offer, the Merger Agreement
or the Merger, shall have approved or recommended any Acquisition
Transaction, or shall have resolved to effect any of the foregoing; and
(g) by the Company in accordance with Section 6.10 of the Merger
Agreement.
In the event of the termination of the Merger Agreement in accordance with
its terms, the Merger Agreement will become void and have no effect, without any
liability on the part of any party or its directors, officers or stockholders,
other than certain specified provisions, which shall survive any such
termination; PROVIDED that no party would be relieved from liability for any
willful breach of the Merger Agreement.
FEES AND EXPENSES. Except as provided below, whether or not the Merger is
consummated, all costs and expenses incurred in connection with the Offer, the
Merger Agreement and the transactions contemplated by the Merger Agreement will
be paid by the party incurring such expenses. In the event that the Merger
Agreement is terminated pursuant to subparagraphs (e), (f) or (g) under
"Termination" as described above (or is terminated pursuant to subparagraph (c)
as a result of the failure to satisfy the conditions set forth in paragraph (d)
of Section 14), then the Company will within two business days after
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such termination (except for a termination under subparagraph (g) in which case
payment is to be made upon or prior to such termination) pay Parent a
termination fee of $20,000,000 (the "Termination Fee") in immediately available
funds by wire transfer to an account designated by Parent. In the event that (i)
a bona fide Acquisition Transaction has been proposed to the Company or publicly
announced or disclosed, (ii) the Merger Agreement is subsequently terminated
pursuant to subparagraph (b)(ii) or (c) (other than as a result of the failure
of any of the conditions set forth in paragraph (d) of Section 14) under
"Termination" above and (iii) within six months of such termination the Company
shall have entered into a definitive agreement or a written agreement in
principle providing for an Acquisition Transaction with respect to, directly or
indirectly, more than 50% of the capital stock of the Company or of the assets
(based on fair market value) of the Company and its subsidiaries, taken as a
whole, then the Company shall pay Parent the Termination Fee at or prior to
execution of such agreement or agreement in principle in immediately available
funds by wire transfer to an account designated by Parent.
AMENDMENT. The Merger Agreement may be amended by the Company, Parent and
the Purchaser at any time before or after any approval of the Merger Agreement
by the stockholders of the Company but, after any such approval, no amendment
will be made which decreases the price to be paid in the Merger or which
adversely affects the rights of the Company's stockholders thereunder without
the approval of such stockholders or which otherwise violates applicable law.
The Merger Agreement provides that any amendment or termination of the Merger
Agreement following the election of Parent's designees to the Company Board,
which would be reasonably likely to have an adverse effect on the minority
stockholders, requires the concurrence of a majority of the directors of the
Company Board who are not Purchaser Insiders (or in the case where there are two
or fewer directors who are not Purchaser Insiders, the concurrence of one
director who is not a Purchaser Insider).
EXTENSION; WAIVER. Subject to the Merger Agreement, at any time prior to
the Effective Time, the parties thereto may (i) extend the time for the
performance of any of the obligations or other acts of any other party thereto,
(ii) waive any inaccuracies in the representations and warranties contained
therein of any other party thereto or in any document, certificate or writing
delivered pursuant to the Merger Agreement by any other party thereto or (iii)
waive compliance by any other party with any of the agreements or conditions.
The Merger Agreement provides that following the election of Parent's designees
to the Company Board and prior to the Effective Time, any extension by the
Company of the time for the performance of any of the obligations or other acts
of Parent or the Purchaser or waiver of any of the Company's rights under the
Merger Agreement or any other actions by the Company, in each case, which would
be reasonably likely to have an adverse effect on the minority stockholders,
will require the concurrence of a majority of the directors of the Company then
in office who are not Purchaser Insiders (or in the case where there are two or
fewer directors who are not Purchaser Insiders, the concurrence of one director
who is not a Purchaser Insider).
(C) THE SUPPORT AGREEMENTS
Concurrently with the execution of the Merger Agreement, Parent entered into
Support Agreements with each member of the Board of Directors of the Company. In
the aggregate, such stockholders owned 639,549 Shares, representing
approximately 2.7% of the Shares outstanding as of November 14, 1998.
Pursuant to the Support Agreements the stockholder(s) have agreed to tender
and not withdraw their Shares pursuant to and in accordance with the terms of
the Offer.
Each of these stockholders also agreed that such stockholder will not sell,
contract to sell or otherwise dispose of such stockholder's Shares other than
(i) pursuant to the Offer, (ii) with Parent's written consent and (iii) Shares
transferred to the Company in connection with the exercise of stock options.
Nothing in the Support Agreements restricts the stockholders' abilities to (i)
withdraw Shares from the Offer or dispose of Shares in open market sales, in
each case at any time after December 27, 1998, if a bona fide Acquisition
Transaction has not been proposed publicly or to the Company prior to such date
or (ii) take certain other actions.
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The agreements contained in each Support Agreement may be terminated by any
party thereto at any time after the earlier of payment for the Shares pursuant
to the Offer and the termination of the Merger Agreement in accordance with its
terms.
(D) APPRAISAL RIGHTS. No appraisal rights are available in connection with
the Offer. If the Merger is consummated, however, stockholders of the Company
who have not tendered their Shares will have certain rights under the GCL to
dissent and demand appraisal of, and to receive payment in cash of the fair
value of, their Shares. Stockholders who perfect such rights by complying with
the procedures set forth in Section 262 of the GCL ("Section 262") will have the
fair value of their Shares (exclusive of any element of value arising from the
accomplishment or expectation of the Merger) determined by the Delaware Court of
Chancery and will be entitled to receive a cash payment equal to such fair value
from the Surviving Corporation. In addition, such dissenting stockholders would
be entitled to receive payment of a fair rate of interest from the date of
consummation of the Merger on the amount determined to be the fair value of
their Shares. In determining the fair value of the Shares, the court is required
to take into account all relevant factors. Accordingly, such determination could
be based upon considerations other than, or in addition to, the market value of
the Shares, including, among other things, asset values and earning capacity. In
WEINBERGER V. UOP, INC., the Delaware Supreme court stated 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. The WEINBERGER court also noted that under Section 262,
fair value is to be determined "exclusive of any element of value arising from
the accomplishment of exception of the merger." In CEDE & CO. v. TECHNICOLOR,
INC., however, the Delaware Supreme Court stated that, in the context of a
two-step cash merger, "to the extent that value has been added following a
change in majority control before cash-out, it is still value attributable to
the going concern," to be included in the appraisal process. As a consequence,
the fair value determined in any appraisal proceeding could be more or less than
the consideration to be paid in the Offer and the Merger.
Parent does not intend to object, assuming the proper procedures are
followed, to the exercise of appraisal rights by any stockholder and the demand
for appraisal of, and payment in cash for the fair value of, the Shares. Parent
intends, however, to cause the Surviving Corporation to argue in an appraisal
proceeding that, for purposes of such proceeding, the fair value of each Share
is less than the price paid in the Merger. In this regard, stockholders should
be aware that opinions of investment banking firms as to the fairness from a
financial point of view (including CSFB's opinion described herein) are not
necessarily opinions as to "fair value" under Section 262.
THE PRESERVATION AND EXERCISE OF DISSENTERS' RIGHTS REQUIRE STRICT ADHERENCE
TO THE APPLICABLE PROVISIONS OF THE GCL.
(E) PLANS FOR THE COMPANY. In connection with the Offer, Parent and the
Purchaser have reviewed, and will continue to review various possible business
strategies that they might consider in the event that the Purchaser acquires
control of the Company, whether pursuant to this Offer, the Merger or otherwise.
Such strategies could include, among other things, changes in the Company's
business, corporate structure, capitalization or management.
(F) "GOING PRIVATE" TRANSACTIONS. 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. However, Rule 13e-3 would be inapplicable if (i) the Shares are
deregistered under the Exchange Act prior to the Merger or other business
combination or (ii) the Merger or other business combination is consummated
within one year after the purchase of the Shares pursuant to the Offer and the
amount paid per Share in the Merger or other business combination is at least
equal to the amount paid per Share in the Offer. If applicable, Rule 13e-3
requires, among other things, that certain financial information concerning the
fairness of the proposed transaction and the consideration offered to minority
stockholders in such transaction be filed with the Commission and disclosed to
stockholders prior to the consummation of the transaction.
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(G) THE RIGHTS. According to the Company's Form 10-K for the fiscal year
ended December 31, 1992 (together with subsequent filings relating to the Rights
Agreement, the "Company 10-K"), on September 22, 1987, the Company declared a
dividend distribution of one Right for each outstanding Share, which entitles
the registered holder to purchase from the Company one Share, par value $1 per
share, of the Company at an exercise price of $90 per Share (the "Exercise
Price"), subject to adjustment.
The Rights Agreement provides that in the event that a person becomes the
beneficial owner of 25% or more of the outstanding Shares, each holder of a
Right can receive upon exercise that number of Shares of the Company having at
the time of such transaction a market value equal to two times the Exercise
Price. In the event that the Company is acquired in a merger or other business
combination transaction in which the Company is not the surviving corporation or
where 50% or more of the assets or earning power is sold or transferred, each
holder of a Right can receive common stock of the acquiring company having a
value equal to two times the Exercise Price. As a condition of the Offer and
pursuant to the Merger Agreement, the Company has taken all actions necessary to
make the Rights inapplicable to the Offer and the Merger.
The foregoing summary of the Rights Agreement does not purport to be
complete and is qualified in its entirety by reference to the Company 10-K and
the text of the Rights Agreement as set forth as an exhibit thereto filed with
the Commission, copies of which may be obtained in the manner set forth in
Section 8.
STOCKHOLDERS ARE REQUIRED TO TENDER ONE ASSOCIATED RIGHT FOR EACH SHARE
TENDERED IN ORDER TO EFFECT A VALID TENDER OF SUCH SHARE. IF THE DISTRIBUTION
DATE (AS DEFINED IN THE RIGHTS AGREEMENT) DOES NOT OCCUR PRIOR TO THE EXPIRATION
DATE, A TENDER OF SHARES WILL ALSO CONSTITUTE A TENDER OF THE ASSOCIATED RIGHTS.
SEE SECTIONS 1 AND 3.
12. SOURCE AND AMOUNT OF FUNDS.
The total amount of funds required by the Purchaser to consummate the Offer
and the Merger and to pay related fees and expenses is estimated to be
approximately $820 million. Parent will ensure that the purchaser has sufficient
funds to acquire all of the outstanding Shares pursuant to the Offer and the
Merger. The source of funds for the Offer and Merger will be comprised of
approximately $180 million in cash and cash equivalents and approximately $640
million in short-term borrowings. The short-term borrowings will consist of
commercial paper and, possibly, bank lines. Parent has arranged to have in place
bank lines of credit of $775 million to provide liquidity support for the
commercial paper. There is no financing condition to the Offer.
13. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that without the prior written consent of
Parent, the Company will not, and will not permit any of its subsidiaries to,
prior to the Effective Time, (i) issue, reissue or sell, or authorize the
issuance, reissuance or sale of (A) additional shares of capital stock of any
class, or securities convertible into capital stock of any class, or any rights,
warrants or options to acquire any convertible securities or capital stock,
other than the issuance of Shares (and the related Rights) pursuant to the
exercise of Options outstanding on the date of the Merger Agreement, or (B) any
other securities in respect of, in lieu of, or in substitution for, the Shares
outstanding on the date hereof, (ii) declare, set aside or pay any dividend or
other distribution (whether in cash, securities or property or any combination
thereof) in respect of any class or series of its capital stock other than
between any of the Company and any of its wholly-owned subsidiaries or (iii)
split, combine, subdivide, reclassify or redeem, purchase or otherwise acquire
or propose to redeem or purchase or otherwise acquire, any shares of its capital
stock, or any of its other securities. The restriction in clause (ii) of the
preceding sentence precludes the Company from declaring or paying its regular
$.10 per Share quarterly dividend.
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14. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provisions of the Offer, the Purchaser shall not
be required to accept for payment or pay for any tendered Shares and, subject to
the terms of the Merger Agreement, may amend the Offer, if (i) there shall not
be validly tendered and not properly withdrawn prior to the expiration of the
Offer that number of Shares which represents at least a majority of the total
number of outstanding Shares on a fully diluted basis on the date of purchase
(not taking into account the Rights) (the Minimum Condition), (ii) any waiting
period under the HSR Act applicable to the Offer or the Merger shall not have
expired or been terminated prior to the expiration of the Offer, or (iii) at any
time on or after November 14, 1998, and prior to the expiration of the Offer,
any of the following events (each, an "Event") shall occur:
(a) there shall be any action taken, or any statute, rule, regulation,
legislation, interpretation, judgment, order or injunction enacted,
enforced, promulgated, amended, issued or deemed applicable to the Offer or
the Merger, by any Governmental Entity (as defined in the Merger Agreement),
other than the application of the waiting period provisions of the HSR Act
to the Offer or to the Merger, that reasonably would be expected to: (i)
make illegal or otherwise prohibit consummation of the Offer or the Merger
or seek to obtain material damages or make materially more costly the making
of the Offer, (ii) prohibit or materially limit the ownership or operation
by Parent or the Purchaser of all or any material portion of the business or
assets of the Company or any of its subsidiaries taken as a whole or compel
Parent or the Purchaser to dispose of or hold separately all or any material
portion of the business or assets of Parent or the Company or any of its
subsidiaries taken as a whole, or seek to impose any material limitation on
the ability of Parent or the Purchaser to conduct its business or own such
assets, in each case as a result of or principally in connection with the
Offer or the Merger, (iii) impose material limitations on the ability of
Parent or the Purchaser effectively to acquire, hold or exercise full rights
of ownership of the Shares, including, without limitation, the right to vote
any Shares acquired or owned by the Purchaser or Parent on all matters
properly presented to the Company's stockholders or (iv) require divestiture
by Parent or the Purchaser of any Shares; or
(b) there shall be instituted or pending any action or proceeding by any
Governmental Entity seeking, or that would reasonably be expected to result
in, any of the consequences referred to in clauses (i) through (iv) of
paragraph (a) above or by any third party for which there is a substantial
likelihood of resulting in any of the consequences referred to in clauses
(i) through (iv) of paragraph (a) above; or
(c) there have been any changes or effects that would, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect
(as defined in the Merger Agreement) on the Company; or
(d) (i) it shall have been publicly disclosed or the Purchaser shall
have otherwise learned that beneficial ownership (determined for the
purposes of this paragraph (d) as set forth in Rule 13d-3 promulgated under
the Exchange Act) of 50% or more of the outstanding Shares has been acquired
by any person (including the Company or any of its subsidiaries or
affiliates) or group (as defined in Section 13(d)(3) under the Exchange
Act), (ii) the Company Board or any committee thereof shall have withdrawn,
or shall have modified or amended in a manner adverse to Parent or the
Purchaser, the approval, adoption or recommendation, as the case may be, of
the Offer or the Merger Agreement, or approved or recommended any
Acquisition Transaction, (iii) a person shall have entered into a definitive
agreement or an agreement in principle with the Company with respect to an
Acquisition Transaction (whether in violation of the Merger Agreement or
not) or (iv) the Company Board or any committee thereof shall have resolved
to do any of the foregoing; or
(e) the Company and the Purchaser and Parent shall have reached a
written agreement authorized by their respective Boards of Directors that
the Offer or the Merger Agreement be terminated, or the Merger Agreement
shall have been terminated in accordance with its terms; or
26
<PAGE>
(f) any of the representations and warranties of the Company set forth
in the Merger Agreement, when read without any exception or qualification as
to materiality or Material Adverse Effect on the Company, shall not be true
and correct, as if such representations and warranties were made at the time
of such determination (except as to any such representation or warranty
which speaks as of a specific date, which must be untrue or incorrect as of
such specific date), except where the failure to be so true and correct
would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect on the Company or prevent the consummation of the
Offer or the Merger; or
(g) the Company shall have failed to perform or to comply with any of
its obligations, covenants or agreements under the Merger Agreement in any
material respect.
The foregoing conditions (including those set forth in clauses (i) and (ii)
of the initial paragraph) may be asserted by Parent or the Purchaser regardless
of the circumstances giving rise to any such conditions. The conditions set
forth in clauses (a) through (g) above are for the benefit of the Parent and the
Purchaser and may be waived by Parent or the Purchaser in whole or in part at
any time and from time to time in their reasonable discretion, in each case,
subject to the terms of the Merger Agreement. The failure by Parent or the
Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right and each such right shall be deemed an ongoing
right which may be asserted at any time and from time to time.
15. CERTAIN LEGAL MATTERS; REQUIRED REGULATORY APPROVALS.
GENERAL. Except as set forth in this Offer to Purchase, based on its review
of publicly available filings by the Company with the Commission, neither Parent
nor the Purchaser is aware of any licenses or regulatory permits that appear to
be material to the business of the Company and its subsidiaries, taken as a
whole, and 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 any filings, approvals or other actions by or with
any domestic, foreign or supranational governmental authority or administrative
or regulatory agency that would be required for the acquisition or ownership of
the 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 presently
contemplated that such approval or action would be sought except as described
below under "State Takeover Laws." Should any such approval or other action be
required, there can be no assurance that any such approval or action would be
obtained without substantial conditions or that adverse consequences might not
result to the Company's or its subsidiaries' businesses, or that certain parts
of the Company's, Parent's, the Purchaser's or any of their respective
subsidiaries' businesses might not have to be disposed of or held separate or
other substantial conditions complied with in order to obtain such approval or
action or in the event that such approvals were not obtained or such actions
were not taken. The Purchaser's obligation to purchase and pay for Shares is
subject to certain conditions, including conditions with respect to litigation
and governmental actions. See Introduction and Section 14.
LITIGATION. On November 16 and 17, 1998, two purported stockholder class
action suits were filed on behalf of William Steiner and Charles Miller, who
allege that they are stockholders of the Company, against the Company and the
members of the Board and, in the case of the suit filed on behalf of Mr. Miller,
Parent in the Delaware Court of Chancery. These complaints are captioned WILLIAM
STEINER V. CALMAT CO., A. FREDERICK GERSTELL, JOHN C. ARGUE, ARTHUR BROWN, DENIS
R. BROWN, HARRY M. CONGER, RAYBURN S. DEZEMBER, WILLIAM P. HUSTON, EDWARD A.
LANDRY, THOMAS L. LEE, THOMAS M. LINDEN, GEORGIA R. NELSON AND STUART T. PEELER
and CHARLES MILLER V. A. FREDERICK GERSTELL, ARTHUR BROWN, DENIS R. BROWN,
RAYBURN S. DEZEMBER, HARRY M. CONGER, EDWARD A. LANDRY, THOMAS M. LINDEN,
RICHARD A. GRANT, JR., GEORGIA R. NELSON, STUART T. PEELER, JOHN C. ARGUE,
THOMAS L. LEE, CALMAT CO. AND VULCAN MATERIALS
27
<PAGE>
COMPANY (collectively, the "Complaints"). The Complaints allege, among other
things, that the defendants have breached their fiduciary duties to the
Company's stockholders by failing to maximize stockholder value. The Complaints
seek, among other things, an order enjoining consummation of the Offer and the
Merger. The Company believes that the Complaints are without merit.
STATE TAKEOVER LAWS. A number of states (including Delaware where the
Company is incorporated) 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 substantial
assets, stockholders, principal executive offices or principal places of
business therein. To the extent that certain provisions of certain of these
state takeover statutes purport to apply to the Offer or the Merger, the
Purchaser believes that such laws conflict with federal law and constitute an
unconstitutional burden on interstate commerce. In 1982, the Supreme Court of
the United States, in EDGAR V. MITE CORP., invalidated on constitutional grounds
the Illinois Business Takeovers Statute, which as a matter of state securities
law made takeovers of corporations meeting certain requirements more difficult.
The reasoning in such decision is likely to apply to certain other state
takeover statutes. In 1987, however, 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 apply to corporations incorporated outside
Oklahoma in that they would subject such corporations to inconsistent
regulations. Similarly, in TYSON FOODS, INC. V. MCREYNOLDS, a Federal district
court in Tennessee ruled that four Tennessee takeover statutes were
unconstitutional as applied to corporations incorporated outside Tennessee. This
decision was affirmed by the United States Court of Appeals for the Sixth
Circuit. In December 1988, a Federal district court in Florida held, in GRAND
METROPOLITAN PLC V. BUTTERWORTH, that the provisions of the Florida Affiliated
Transactions Act and Florida Control Share Acquisition Act were unconstitutional
as applied to corporations incorporated outside of Florida.
Section 203 of the GCL prevents certain "business combinations" with an
"interested stockholder" (generally, any person who owns or has the right to
acquire 15% or more of a corporation's outstanding voting stock) for a period of
three years following the time such person became an interested stockholder,
unless, among other things, prior to the time the interested stockholder became
such, the Board of Directors of the corporation approved either the business
combination or the transaction in which the interested stockholder became such.
The Board of Directors of the Company has unanimously approved the Offer, the
Merger and the Merger Agreement and the transactions contemplated thereby for
the purposes of Section 203 of the GCL.
The Purchaser has not attempted to comply with any state takeover statutes
in connection with the Offer or the Merger although, pursuant to the Merger
Agreement, the Company has represented that the Company Board has taken
appropriate action to render Section 203 of the GCL inapplicable to the Offer,
the Merger and the transactions contemplated by the Merger Agreement. The
Purchaser reserves the right to challenge the validity or applicability of any
state law allegedly applicable to the Offer or the Merger, 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 it is asserted that one or more takeover
statutes apply to the Offer or the Merger, and it is not determined by an
appropriate court that such statute or statutes do not apply or are invalid as
applied to the Offer or the Merger, as applicable, the Purchaser may be required
to file certain documents with, or receive approvals from, the relevant state
authorities, and 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 14. The
parties have agreed under the Merger Agreement to take, at the request of
another party, all reasonable steps to assist in any challenge by
28
<PAGE>
such requesting party to the validity or applicability to the transactions
contemplated by the Merger Agreement, including the Offer and the Merger, of any
state takeover law.
UNITED STATES ANTITRUST APPROVALS. Under the HSR Act, and the rules and
regulations that have been promulgated thereunder by the Federal Trade
Commission (the "FTC"), certain acquisition transactions may not be consummated
until certain information and documentary material has been furnished for review
by the FTC and the Antitrust Division of the Department of Justice (the
"Antitrust Division") and certain waiting period requirements have been
satisfied. The acquisition of Shares pursuant to the Offer and the Merger is
subject to such requirements.
Under the provisions of the HSR Act applicable to the Offer and the Merger,
the purchase of Shares pursuant to the Offer and the Merger may not be
consummated until the expiration of a 15-calendar-day waiting period following
the filing of certain required information and documentary material with respect
to the Offer with the FTC and the Antitrust Division, unless such waiting period
is earlier terminated by the FTC and the Antitrust Division. Parent expects to
file a Premerger Notification and Report Form with the FTC and the Antitrust
Division in connection with the purchase of Shares pursuant to the Offer and the
Merger under the HSR Act on November 20, 1998, and the required waiting period
with respect to the Offer and the Merger would expire at 12:00 a.m., New York
City time, on December 5, 1998, unless earlier terminated by the FTC or the
Antitrust Division or Parent receives a request for additional information or
documentary material prior thereto. If within such 15-calendar-day waiting
period either the FTC or the Antitrust Division were to request additional
information or documentary material from Parent, the waiting period with respect
to the Offer and the Merger would be extended for an additional period of 10
calendar days following the date of substantial compliance with such request by
Parent. Only one extension of the waiting period pursuant to a request for
additional information is authorized by the rules promulgated under the HSR Act.
Thereafter, the waiting period could be extended only by court order or with the
consent of Parent. The additional 10-calendar-day waiting period may be
terminated sooner by the FTC or the Antitrust Division. Although the Company is
required to file certain information and documentary material with the FTC and
the Antitrust Division in connection with the Offer, neither the Company's
failure to make such filings nor a request made to the Company from the FTC or
the Antitrust Division for additional information or documentary material will
extend the waiting period with respect to the purchase of Shares pursuant to the
Offer and the Merger.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the acquisition of Shares by the
Purchaser pursuant to the Offer and the Merger. At any time before or after the
Purchaser's purchase of Shares, the FTC or the Antitrust Division could take
such action under the antitrust laws as either deems necessary or desirable in
the public interest, including seeking to enjoin the purchase of Shares pursuant
to the Offer and the Merger, the divestiture of Shares purchased pursuant to the
Offer or the divestiture of substantial assets of Parent, the Purchaser, the
Company or any of their respective subsidiaries or affiliates. Private parties
as well as state attorneys general may also bring legal actions under the
antitrust laws under certain circumstances. See Section 14.
Based upon an examination of publicly available information relating to the
businesses in which the Company is engaged, the Purchaser believes that the
acquisition of Shares pursuant to the Offer and the Merger should not violate
the applicable antitrust laws. Nevertheless, there can be no assurance that a
challenge to the Offer and the Merger on antitrust grounds will not be made, or,
if such challenge is made, what the result will be. See Section 14.
16. CERTAIN FEES AND EXPENSES.
Goldman Sachs, & Co. ("Goldman Sachs") are acting as Dealer Managers in
connection with the Offer and have provided certain financial advisory services
in connection with the acquisition of the Company. Parent and the Purchaser have
agreed to pay Goldman Sachs a fee of (i) $6,000,000 in the
29
<PAGE>
event that Purchaser acquires at least 50% of the Shares or at least 50% of the
assets (based on the book value thereof) of the Company, (ii) $3,450,000 in the
event that Purchaser acquires less than 50% but more than 25% of the Shares or
assets (based on the book value thereof) of the Company, and (iii) 1.25% of the
consideration up to a maximum of $2,000,000 in the event that all or a portion
of the block of Shares held by the Dan Murphy Foundation is acquired. If the
Merger Agreement is terminated and the Company is required to pay the
Termination Fee to Parent, Parent has agreed to pay Goldman Sachs, upon payment
of the Termination Fee, an amount equal to 15% of the Termination Fee. Purchaser
has also agreed to reimburse Goldman Sachs for all reasonable out-of-pocket
expenses incurred by Goldman Sachs, including the fees and disbursements of
Goldman Sachs' attorneys, and to indemnify Goldman Sachs against liabilities and
expenses in connection with its engagement, including certain liabilities under
the federal securities laws.
Georgeson & Co. Inc. has been retained by the Purchaser as Information Agent
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 material
relating to the Offer to beneficial owners of Shares. The Purchaser will pay the
Information Agent reasonable and customary compensation for all such services in
addition to reimbursing the Information Agent for reasonable out-of-pocket
expenses in connection therewith.
In addition, First Chicago Trust Company of New York has been retained as
the Depositary. The Purchaser will pay the Depositary reasonable and customary
compensation for its services in connection with the Offer, will reimburse the
Depositary for its reasonable out-of-pocket expenses in connection therewith and
will indemnify the Depositary against certain liabilities and expenses in
connection therewith, including certain liabilities under the federal securities
laws.
Except as set forth above, neither Parent nor the Purchaser will pay any
fees or commissions to any broker, dealer or other person for soliciting tenders
of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust
companies and other nominees will, upon request, be reimbursed by Parent or the
Purchaser for customary clerical and mailing expenses incurred by them in
forwarding offering materials to their customers.
17. MISCELLANEOUS.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. However, the Purchaser
may, in its discretion, take such action as it may deem necessary to make the
Offer in any jurisdiction and extend the Offer to holders of Shares in such
jurisdiction.
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 will be deemed to be
made on behalf of the Purchaser by one or more registered brokers or dealers
that are licensed under the laws of such jurisdiction.
Parent and the Purchaser have filed with the Commission a Schedule 14D-1,
together with exhibits, pursuant to Rule 14d-3 of the General Rules and
Regulations under the Exchange Act, furnishing certain additional information
with respect to the Offer, and may file amendments thereto. Such Schedule 14D-1
and any amendments thereto, including exhibits, may be examined and copies may
be obtained from the office of the Commission in the same manner as described in
Section 8 with respect to information concerning the Company, except that copies
will not be available at the regional offices of the Commission.
30
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PARENT OR THE PURCHASER NOT CONTAINED IN THIS OFFER
TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, ANY SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Neither the delivery of the Offer to Purchase nor any purchase pursuant to
the Offer shall under any circumstances create any implication that there has
been no change in the affairs of Parent, the Purchaser, the Company or any of
their respective subsidiaries since the date as of which information is
furnished or the date of this Offer to Purchase.
ALB ACQUISITION CORPORATION
November 20, 1998
31
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT
The name, principal business address, present principal occupation or
employment and five-year employment history of each of the directors and
executive officers of Parent are set forth below. Unless otherwise indicated,
the principal business address of each such director and each such executive
officer is One Metroplex Drive, Birmingham, Alabama 35209. Unless otherwise
indicated below, each occupation set forth opposite an individual's name refers
to employment with Parent. Unless otherwise indicated below, all directors and
executive officers listed below are citizens of the United States.
DIRECTORS
<TABLE>
<CAPTION>
POSITION WITH PARENT; PRINCIPAL BUSINESS ADDRESS; PRINCIPAL
NAME AGE OCCUPATION OR EMPLOYMENT; 5-YEAR EMPLOYMENT HISTORY
- ------------------------ --- -----------------------------------------------------------
<S> <C> <C>
John K. Greene.......... 69 Director since 1974. Special Principal, William Blair &
Company, Chicago, Illinois (an investment banking firm),
since 1995; Partner of that company prior thereto.
Committee memberships: Audit Review; Governance and Succes-
sion; Finance and Pension Funds.
Douglas J. McGregor..... 57 Director since 1992. Formerly Chairman and Chief Executive
Officer, M.A. Hanna Company, Cleveland, Ohio (an
international specialty chemicals company with interests in
formulated polymers), from July, 1997; President and Chief
Executive Officer from January, 1997 to July, 1997;
President and Chief Operating Officer prior thereto.
Other directorships: KeyCorp.
Committee memberships: Audit Review; Compensation; Safety,
Health and Environmental Affairs.
Donald B. Rice.......... 59 Director since 1986.*President and Chief Executive Officer
of UroGenesys, Inc., Santa Monica, California (a
biotechnology company developing therapeutics and
diagnostic testing for urogenital cancer), since 1996;
President and Chief Operating Officer of Teledyne, Inc.,
Los Angeles, California (a manufacturer of aviation,
electronic, industrial, specialty metal and consumer
products), from 1993 to 1996; Secretary of the Air Force,
from 1989 to 1993.
Other directorships: Scios Inc.; UroGenesys, Inc.; Wells
Fargo & Company and Pilkington Aerospace.
Committee memberships: Audit Review; Executive; Finance and
Pension Funds; Governance and Succession.
</TABLE>
- ------------------------------
* Dr. Rice was first elected a director in 1986, and served until May, 1989,
when he was appointed Secretary of the Air Force. He was reelected a
director of Parent by the Board of Directors on February 12, 1993.
I-1
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH PARENT; PRINCIPAL BUSINESS ADDRESS; PRINCIPAL
NAME AGE OCCUPATION OR EMPLOYMENT; 5-YEAR EMPLOYMENT HISTORY
- ------------------------ --- -----------------------------------------------------------
<S> <C> <C>
Orin R. Smith........... 63 Director since 1983. Chairman and Chief Executive Officer
of Engelhard Corporation, Iselin, New Jersey (provider of
environmental technologies, performance products,
engineered materials and related services), since January,
1995; President and Chief Executive Officer of that company
prior thereto.
Other Directorships: Engelhard Corporation; Ingersoll-Rand
Company; Perkin-Elmer Corporation; Summit Bancorporation.
Committee memberships: Compensation; Executive; Governance
and Succession; Safety, Health and Environmental Affairs.
Marion H. Antonini...... 68 Director since 1983. Principal, Kohlberg & Company, Mount
Kisco, New York (a private merchant banking firm), since
January, 1998; Chairman, Chief Executive Officer and
President of Welbilt Corporation, Stamford, Connecticut (a
manufacturer and distributor of commercial food service
equipment and residential furnaces) prior thereto.
Other directorships: Engelhard Corporation;
Scientific-Atlanta, Inc. Turbo Chef; Northwestern Steel and
Wire.
Committee memberships: Compensation; Executive; Governance
and Succession; Finance and Pension Funds.
James V. Napier......... 61 Director since 1983. Chairman of the Board of
Scientific-Atlanta, Inc., Atlanta, Georgia (a manufacturer
and designer of telecommunication systems, satellite-based
communications networks, and instrumentation for
industrial, telecommunications and government
applications).
Other directorships: Engelhard Corporation; HBO & Co.;
Intelligent Systems, Inc.; Personnel Group of America,
Inc.; Scientific-Atlanta, Inc.; Westinghouse Air Brake Co.
Committee memberships: Audit Review; Compensation; Finance
and Pension Funds.
Livio D. DeSimone....... 62 Director since 1987. Chairman and Chief Executive Officer
of Minnesota Mining & Manufacturing Company, St. Paul,
Minnesota (a diversified manufacturer).
Other directorships: Cargill, Incorporated; Dayton Hudson
Corporation; General Mills, Inc.; Minnesota Mining &
Manufacturing Company.
Committee memberships: Compensation; Executive; Governance
and Succession; Safety, Health and Environmental Affairs.
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH PARENT; PRINCIPAL BUSINESS ADDRESS; PRINCIPAL
NAME AGE OCCUPATION OR EMPLOYMENT; 5-YEAR EMPLOYMENT HISTORY
- ------------------------ --- -----------------------------------------------------------
<S> <C> <C>
Donald M. James......... 49 Director since 1996. Chairman and Chief Executive Officer
of the Parent since May, 1997; President and Chief
Executive Officer from February, 1997 to May, 1997;
President and Chief Operating Officer from February, 1996
to February, 1997; President of the Parent's Southern
Division from 1994 to 1996; Senior Vice President, South,
Construction Materials Group of the Parent from 1995 to
1996; Senior Vice President and General Counsel of the
Parent from December, 1992 through 1993.
Other directorships: Protective Life Corporation.
Committee memberships: Executive.
Ann D. McLaughlin....... 57 Director since 1990. Chairman, The Aspen Institute, Aspen,
Colorado (an independent, nonprofit organization whose
programs are designed to enhance the ability of leaders to
understand national and international issues), since 1996;
Vice Chairman of that organization from 1993 to 1996;
President, Federal City Council, Washington, D.C. (a
nonpartisan, nonprofit organization which is dedicated to
improving the nation's capital), from 1990 until 1995;
President and Chief Executive Officer, New American Schools
Development Corporation, Arlington, Virginia (a private
organization which supports the design and establishment of
high-performance learning environments), from 1992 until
1993.
Other directorships: AMR Corporation; Donna Karan
International, Inc.; Fannie Mae; General Motors
Corporation; Harman International Industries, Inc.; Host
Marriott Corporation; Kellogg Company; Nordstrom, Inc.;
Union Camp Corporation.
Committee memberships: Audit Review; Executive; Finance and
Pension Funds; Safety, Health and Environmental Affairs.
Herbert A. Sklenar...... 67 Director since 1973. Chairman Emeritus of the Company since
May, 1997; Chairman of the Board from February, 1997 to
May, 1997; Chairman and Chief Executive Officer from May,
1992 to February, 1997; President and Chief Executive
Officer prior thereto.
Other directorships: AmSouth Bancorporation; Protective
Life Corporation; Temple-Inland, Inc.
Committee memberships: Finance and Pension Funds; Safety,
Health and Environmental Affairs.
</TABLE>
I-3
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH PARENT; PRINCIPAL BUSINESS ADDRESS; PRINCIPAL
NAME AGE OCCUPATION OR EMPLOYMENT; 5-YEAR EMPLOYMENT HISTORY
- ------------------------ --- -----------------------------------------------------------
<S> <C> <C>
EXECUTIVE OFFICERS
Donald M. James......... 49 Chairman and Chief Executive Officer. Elected Chairman of
the Board of Directors in May 1997. He became President and
Chief Executive Officer in February 1997. He was elected
President and Chief Operating Officer in February 1996. In
January 1994, he was elected President of the Southern
Division and in August 1995, he was also elected Senior
Vice President, South Construction Materials Group. He
joined Parent in 1992 as Senior Vice President and General
Counsel.
Peter J. Clemens, III... 54 Executive Vice President, Finance and Administration and
Treasurer since May 1997. He served as Executive Vice
President and Chief Administrative Officer from May 1996 to
May 1997. Prior to that time, he served as Senior Vice
President, West, Construction Materials Group and Senior
Vice President, Finance.
William F. Denson,
III................... 55 Senior Vice President, Law and Secretary since February
1998. He has served as Secretary since April 1981. He
served as Vice President and Assistant General Counsel
until he was elected Vice President, Law effective January
1, 1994.
Richard K. Carnwath..... 50 Vice President, Planning and Development since 1985.
J. Wayne Houston........ 49 Vice President, Human Resources since October 1997. Prior
to that time, he served as Director of Compensation and
Benefits.
Ejaz A. Khan............ 41 Controller since September 1995. He previously served as
Controller, Chemicals Division.
John A. Heilala......... 58 President, Chloralkali Business Unit since May 1996. From
1994, he served as Executive Vice President, Chlorakali,
and prior to that time he served as Vice President,
Manufacturing, Chemicals Division.
Robert A. Wason, IV..... 47 President, Performance Systems Business Unit, since May
1996. From 1994 until 1996, he served as Executive Vice
President, Performance Systems, and prior to that time he
served as Executive Vice President, Administration and
Business Development, Chemicals Division.
Guy M. Badgett, III..... 50 Chairman, Southern Division and President, Southeast
Division, since May 1997. He has served as President,
Southeast Division, since 1992.
William L. Glusac....... 48 President, Midwest Division, since 1994. Prior to that
time, he served as President, Southwest Division.
Daniel J. Leemon........ 60 President, Midsouth Division, since 1993. He previously
served as Senior Vice President, West, Construction
Materials Group.
Thomas R. Ransdell...... 56 President, Southwest Division, since 1994. He also served
as President, Vulcan Gulf Coast Materials, Inc., from 1987
to May 1997.
</TABLE>
I-4
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH PARENT; PRINCIPAL BUSINESS ADDRESS; PRINCIPAL
NAME AGE OCCUPATION OR EMPLOYMENT; 5-YEAR EMPLOYMENT HISTORY
- ------------------------ --- -----------------------------------------------------------
<S> <C> <C>
Daniel F. Sansone....... 46 President, Vulcan Gulf Coast Materials Divisions, since May
1997. From January 1994 to May 1997, he served as Vice
President, Finance. He previously served as Vice President
and Controller.
James W. Smack.......... 55 President, Mideast Division, since 1991.
</TABLE>
I-5
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
OF THE PURCHASER
The name, principal business address, present principal occupation or
employment and five-year history of each of the directors and executive officers
of the Purchaser are set forth below. Unless otherwise indicated, the principal
business address of each such director and each such executive officer is One
Metroplex Drive, Birmingham, Alabama 35209. Unless otherwise indicated, all
directors and executive officers listed below are citizens of the United States.
DIRECTORS
<TABLE>
<CAPTION>
POSITION WITH THE PURCHASER; PRINCIPAL BUSINESS ADDRESS;
PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AGE 5-YEAR EMPLOYMENT HISTORY
- ------------------------ --- -----------------------------------------------------------
<S> <C> <C>
Donald M. James......... 49 Chairman and Chief Executive Officer. Otherwise, same as
above.
</TABLE>
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
POSITION WITH THE PURCHASER; PRINCIPAL BUSINESS ADDRESS;
PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AGE 5-YEAR EMPLOYMENT HISTORY
- ------------------------ --- -----------------------------------------------------------
<S> <C> <C>
Donald M. James......... 49 Chairman and Chief Executive Officer. Otherwise, same as
above.
Peter J. Clemens, III... 54 Vice President and Treasurer. Otherwise, same as above.
William F. Denson,
III................... 55 Vice President and Secretary. Otherwise, same as above.
</TABLE>
I-6
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each stockholder
of the Company or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary at one of its addresses set forth below:
THE DEPOSITARY FOR THE OFFER IS:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: BY OVERNIGHT DELIVERY: BY HAND:
First Chicago Trust Company of New York First Chicago Trust Company of New York First Chicago Trust Company of New York
Tenders & Exchanges Tenders & Exchanges Tenders & Exchanges
Suite 4660 c/o Securities Transfer and Reporting Suite 4680
P.O. Box 2569 Services Inc. 14 Wall Street, 8th Floor
Jersey City, NJ 07303-2569 One Exchange Plaza--Third Floor New York, NY 10005
New York, NY 10006
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Questions and requests for assistance may be directed to the Information
Agent or the Dealer Managers at their respective addresses and telephone numbers
set forth below. Additional copies of this Offer to Purchase, the Letter of
Transmittal and other tender offer materials may be obtained from the
Information Agent as set forth below and will be furnished promptly at the
Purchaser's expense. Stockholders may also contact their broker, dealer,
commercial bank, trust company or other nominee for assistance concerning the
Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
Wall Street Plaza
New York, New York 10005
(800) 223-2064 (Toll Free)
(212) 440-9800 (Call Collect)
THE DEALER MANAGERS FOR THE OFFER ARE:
GOLDMAN, SACHS & CO.
85 BROAD STREET
NEW YORK, NY 10004
(800) 323-5678 (TOLL FREE)
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
CALMAT CO.
PURSUANT TO THE OFFER TO PURCHASE
DATED NOVEMBER 20, 1998
BY
ALB ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY
OF
VULCAN MATERIALS COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, JANUARY 1, 1999, UNLESS THE OFFER IS
EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
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BY MAIL: BY OVERNIGHT DELIVERY:
First Chicago Trust Company of New York First Chicago Trust Company of New York
Tenders & Exchanges Tenders & Exchanges
Suite 4660 c/o Securities Transfer and Reporting Services
P.O. Box 2569 Inc.
Jersey City, NJ 07303-2569 One Exchange Plaza--Third Floor
New York, NY 10006
<CAPTION>
BY MAIL: BY HAND:
First Chicago Trust Company of New York First Chicago Trust Company of New York
Tenders & Exchanges Tenders & Exchanges
Suite 4660 Suite 4680
P.O. Box 2569 14 Wall Street, 8th Floor
Jersey City, NJ 07303-2569 New York, NY 10005
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DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS 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 (as defined in the Offer to Purchase dated November 20,
1998 (the "Offer to Purchase")) are to be forwarded herewith or, unless an
Agent's Message (as defined in the Offer to Purchase) is utilized, if tenders of
Shares are to be made by book-entry transfer to an account maintained by First
Chicago Trust Company of New York (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. Stockholders who tender Shares
by book-entry transfer are referred to herein as "Book-Entry Stockholders."
Holders of Shares whose certificates for such Shares (the "Share
Certificates") are not immediately available or who cannot deliver their Share
Certificates and all other required documents to the Depositary on or 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. See Instruction 2.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.
NOTE: SIGNATURES MUST BE PROVIDED ON THE INSIDE AND REVERSE BACK COVER. PLEASE
READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
<PAGE>
/ / CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: _____________________________________________
Account Number: _________________ Transaction Code Number: ________________
/ / CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING.
PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.
Name(s) of Registered Holder(s): ___________________________________________
Window Ticket Number (if any): _____________________________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Name of Institution which Guaranteed Delivery:
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DESCRIPTION OF SHARES TENDERED
<CAPTION>
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
NAME(S) APPEAR(S) ON CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
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TOTAL NUMBER
SHARE OF SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
Total Shares:
* Need not be completed by Book-Entry Stockholders.
** Unless otherwise indicated it will be assumed that all Shares represented by Share Certificates
delivered to the Depositary are being tendered. See Instruction 4.
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<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to ALB Acquisition Corporation (the
"Purchaser"), a Delaware corporation and a wholly-owned subsidiary of Vulcan
Materials Company, a New Jersey corporation ("Parent"), the above described
shares of Common Stock, par value $1 per share (the "Shares"), of CalMat Co., a
Delaware corporation (the "Company"), and the associated common share purchase
rights (the "Rights") issued pursuant to the Rights Agreement, dated as of
September 22, 1987, as amended as of October 26, 1992, July 22, 1997 and
November 14, 1998, between the Company and First Chicago Trust Company of New
York, as Rights Agent (as the same may be amended, the "Rights Agreement"),
pursuant to the Purchaser's offer to purchase all outstanding Shares at a price
of $31.00 (or any higher price Purchaser determines in its sole discretion to
pay in the Offer) 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, receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which together with the Offer to Purchase constitute the "Offer").
Unless the context otherwise requires, all references to Shares shall include
the associated Rights. The undersigned understands that the Purchaser reserves
the right to transfer or assign, in whole or from time to time in part, to one
or more of its direct or indirect subsidiaries or affiliates the right to
purchase all or any portion of the Shares tendered pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions 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 that are being tendered hereby and any and all dividends on
the Shares (including, without limitation, the issuance of additional Shares
pursuant to a stock dividend or stock split, the issuance of other securities,
the issuance of rights for the purchase of any securities, or any cash dividends
that are declared or paid by the Company on or after the date of the Offer to
Purchase and are payable or distributable to stockholders of record on a date
prior to the transfer into the name of the Purchaser or its nominees or
transferees on the Company's stock transfer records of the Shares purchased
pursuant to the Offer (collectively "Distributions")), and constitutes and
irrevocably appoints the Depositary the true and lawful agent, attorney-in-fact
and proxy of the undersigned to the full extent of the undersigned's rights with
respect to such Shares (and Distributions) with full power of substitution (such
power of attorney and proxy being deemed to be an irrevocable power coupled with
an interest), to (a) deliver Share Certificates (and Distributions), or transfer
ownership of such Shares on the account books maintained by the Book-Entry
Transfer Facility, together in either such case with all accompanying evidences
of transfer and authenticity, to or upon the order of the Purchaser upon receipt
by the Depositary, as the undersigned's agent, of the purchase price, (b)
present such Shares (and Distributions) 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 Distributions), all in accordance with the terms
of the Offer.
The undersigned hereby irrevocably appoints designees of the Purchaser, and
each of them, the attorneys-in-fact and proxies of the undersigned, each with
full power of substitution, to vote in such manner as each such attorney and
proxy or his or her substitute shall, in his or her sole discretion, deem
proper, and otherwise act (including pursuant to written consent) with respect
to all of the Shares tendered hereby which have been accepted for payment by the
Purchaser prior to the time of such vote or action (and Distributions) which the
undersigned is entitled to vote at any meeting of stockholders of the Company
(whether annual or special and whether or not an adjourned meeting), or by
written consent in lieu of such meeting, or otherwise. This power of attorney
and proxy is coupled with an interest in the Company and in the Shares and is
irrevocable and is granted in consideration of, and is effective upon, the
acceptance for payment of such Shares by the Purchaser in accordance with the
terms of the Offer. Such acceptance for payment shall revoke, without further
action, any other power of attorney or proxy granted by the undersigned at any
time with respect to such Shares (and Distributions) and no subsequent powers of
attorney or proxies will be given (and if given will be deemed not to be
effective) with respect thereto by the undersigned. The undersigned understands
that the Purchaser reserves the right to require that, in order for Shares to be
deemed validly tendered, immediately upon the Purchaser's acceptance for payment
of such Shares, the Purchaser is able to exercise full voting rights with
respect to such Shares and Distributions, including voting at any meeting of
stockholders.
<PAGE>
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby (and Distributions) and that when the same are accepted for payment by
the Purchaser, the Purchaser will acquire good, marketable and unencumbered
title thereto, 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 tendered hereby (and
Distributions). In addition, the undersigned shall promptly remit and transfer
to the Depositary for the account of the Purchaser any and all other
Distributions in respect of the Shares tendered hereby, accompanied by
appropriate documentation of transfer and, pending such remittance or
appropriate assurance thereof, the Purchaser shall be entitled to all rights and
privileges as owner of such Distributions and may withhold the entire purchase
price or deduct from the purchase price of Shares tendered hereby the amount or
value thereof, as determined by the Purchaser in its sole discretion.
All authority herein conferred or herein 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,
executors, administrators, legal representatives, successors and assigns of the
undersigned. Tenders of Shares 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
pursuant to the Offer, may also be withdrawn at any time after Monday, January
18, 1999. See Section 4 of the Offer to Purchase.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any Share
Certificates not tendered or accepted for payment in the name(s) of the
undersigned. Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the purchase price and/or return any
Share Certificates not tendered or accepted for payment (and accompanying
documents as appropriate) to the undersigned at the address shown below the
undersigned's signature. 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 return any Share Certificates not
tendered or accepted for payment in the name(s) of, and deliver said check
and/or return certificates to, the person or persons so indicated. Stockholders
tendering Shares by book-entry transfer may request that any Shares not accepted
for payment be returned by crediting such account maintained at the Book-Entry
Transfer Facility by making an appropriate entry under "Special Payment
Instructions." The undersigned recognizes that the Purchaser has no obligation
pursuant to the "Special Payment Instructions" to transfer any Shares from the
name of the registered holder thereof if the Purchaser does not accept for
payment any of such Shares.
<PAGE>
- ------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share Certificates not tendered or not purchased
and/or the check for the purchase price of Shares purchased are to be issued
in the name of someone other than the undersigned, or if Shares tendered by
book-entry transfer which are not purchased are to be returned by credit to
an account maintained at the Book-Entry Transfer Facility other than that
designated on the front cover.
Issue check and/or certificates to:
Name: ______________________________________________________________________
(Please Print)
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(Include Zip Code)
__________________________________________________________________________
(Tax Identification or Social Security No.)
(See Substitute Form W-9)
/ / Credit unpurchased Shares tendered by book-entry transfer to the
Book-Entry Transfer Facility account set forth below:
________________________________________________________________________
(Account Number)
- ------------------------------------------------------------
- ------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share Certificates not tendered or not purchased
and/or the check for the purchase price of Shares purchased are to be sent
to someone other than the undersigned, or to the undersigned at an address
other than that shown on the front cover.
Mail check and/or certificate to:
Name: ______________________________________________________________________
(Please Print)
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(Include Zip Code)
__________________________________________________________________________
(Tax Identification or Social Security No.)
- -----------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
IMPORTANT--SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9)
____________________________________________________________________________
____________________________________________________________________________
Signature(s) of Owner(s)
Dated: ___________________
(Must be signed by the registered holder(s) exactly as name(s) appear(s)
on the Share 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
necessary information. See Instruction 5.)
Name(s): ___________________________________________________________________
____________________________________________________________________________
(Please Print)
Capacity (full title): _____________________________________________________
Address: ___________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number: _________________________________________
Tax Identification or Social Security No.: _________________________________
(See Substitute Form W-9)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED--SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: ______________________________________________________
Name (Please print): _______________________________________________________
Name of Firm: ______________________________________________________________
Address: ___________________________________________________________________
____________________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number: ____________________________________________
Dated: ____________, 1998
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<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required (i) if this Letter of Transmittal is signed by the
registered holder(s) (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) of the Shares tendered
herewith, unless such holder(s) has completed either the box entitled "Special
Payment Instructions" or the box entitled "Special Delivery Instructions" on the
inside front cover hereof or (ii) if such Shares are tendered for the account of
a firm that 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 (an "Eligible Institution"). In all other cases, all
signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of
Transmittal is to be used either if Share Certificates are to be forwarded
herewith or, unless an Agent's Message (as defined in Section 2 of the Offer to
Purchase) is utilized, if tenders are to be made pursuant to the procedures for
tender by book-entry transfer set forth in Section 3 of the Offer to Purchase.
Share Certificates, or timely confirmation of a book-entry transfer (a
"Book-Entry Confirmation") of such Shares into the Depositary's account at the
Book-Entry Transfer Facility, as well as this Letter of Transmittal (or a
facsimile hereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message in the case of a book-entry
delivery, and any other documents required by this Letter of Transmittal, must
be received by the Depositary at one of its addresses set forth herein on or
prior to the Expiration Date. Stockholders whose Share Certificates are not
immediately available or who cannot deliver their Share Certificates and all
other required documents to the Depositary on or prior to the Expiration Date or
who cannot complete the procedures for delivery by book-entry transfer on a
timely basis may tender their Shares by properly completing and duly executing a
Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedures 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 on or
prior to the Expiration Date; and (iii) the Share Certificates (or a Book-Entry
Confirmation) representing all tendered Shares, in proper form for transfer
together with a properly completed and duly executed Letter of Transmittal (or a
facsimile hereof), 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 New York
Stock Exchange trading days after the date of execution of such Notice of
Guaranteed Delivery. A "New York Stock Exchange" trading day" is any day on
which The New York Stock Exchange is open for business. If Share Certificates
are forwarded separately to the Depositary, a properly completed and duly
executed Letter of Transmittal (or facsimile hereof) must accompany each such
delivery.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THIS LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY
THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal or facsimile hereof, waive any right to receive any
notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares and any other required
information should be listed on a separate schedule attached hereto and
separately signed on each page thereof in the same manner as this Letter of
Transmittal is signed.
<PAGE>
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares evidenced by any certificate submitted
are to be tendered, fill in the number of Shares which are to be tendered in the
box entitled "Number of Shares Tendered." In such case, new certificate(s) for
the remainder of the Shares that were evidenced by your old certificate(s) will
be sent to you, unless otherwise provided in the appropriate box marked "Special
Payment Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal, as soon as practicable after the Expiration Date. All Shares
represented by certificates delivered to the Depositary will be deemed to have
been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond exactly with the name(s) as
written on the face of the certificate(s) without alteration, enlargement or any
change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and proper evidence satisfactory to the
Purchaser of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to or
certificates for Shares not tendered or purchased are to be issued in the name
of a person other than the registered owner(s). Signatures on such certificates
or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Shares listed, the certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered owner(s) appear(s) on the certificates.
Signatures on such certificates or stock powers must be guaranteed by an
Eligible Institution.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, the
Purchaser will pay or cause to be paid any stock transfer taxes with respect to
the transfer and sale of purchased Shares to it or its order pursuant to the
Offer. If, however, payment of the purchase price is to be made to, or if
certificates for Shares not tendered or purchased are to be registered in the
name of, any person other than the registered holder(s), or if tendered
certificates are registered in the name of any person other than the person(s)
signing this Letter of Transmittal, the amount of any stock transfer taxes
(whether imposed on the registered holder(s) or such person) payable on account
of the transfer to such person will be deducted from the purchase price received
by such holder(s) pursuant to this Offer (i.e., such purchase price will be
reduced) unless satisfactory evidence of the payment of such taxes or exemption
therefrom is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued
in the name of, and/or certificates for unpurchased Shares are to be returned
to, a person other than the signer of this Letter of Transmittal or if a check
is to be sent and/or such certificates are to be returned to someone other than
the signer of this Letter of Transmittal or to an address other than that shown
on the front cover hereof, the appropriate boxes on this Letter of Transmittal
should be completed. Stockholders tendering Shares by book-entry transfer (i.e.,
Book-Entry Stockholders) may request that Shares not purchased be credited to
such account maintained at the Book-Entry Transfer Facility. If no such
instructions are given, such Shares not purchased will be returned by crediting
the account at the Book-Entry Transfer Facility.
<PAGE>
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
may be directed to the Information Agent at its address set forth below.
Requests for additional copies of the Offer to Purchase and this Letter of
Transmittal may be directed to the Information Agent or to brokers, dealers,
commercial banks or trust companies.
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, and 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.
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of such stockholder's correct TIN by
completing a Substitute Form W-9 certifying (i) that the TIN provided on
Substitute Form W-9 is correct (or that such stockholder is awaiting a TIN), and
(ii) that (a) such stockholder is exempt from backup withholding or (b) such
stockholder has not been notified by the Internal Revenue Service that such
stockholder is subject to backup withholding as a result of a failure to report
all interest or dividends or (c) the Internal Revenue Service has notified such
stockholder that such stockholder is no longer subject to backup withholding.
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
stockholder has not been issued a TIN and has applied for a TIN or intends to
apply for a TIN in the near future. If the box in Part 3 is checked, the
stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% 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 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. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary. The stockholder will then be instructed as to
the steps that must be taken in order to replace the certificate(s). This Letter
of Transmittal and related documents cannot be processed until the procedures
for replacing lost or destroyed certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY HEREOF) OR AN
AGENT'S MESSAGE TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY
TRANSFER OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY
AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR
TO THE EXPIRATION DATE.
<PAGE>
TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS
(SEE INSTRUCTION 9)
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PAYOR'S NAME:
SUBSTITUTE PART 1--Please provide your PART 3--Social Security Number
FORM W-9 name, address and TIN and or Employer ID Number
certify by signing and dating Awaiting TIN [ ]
below.
Name:
Address:
</TABLE>
<TABLE>
<S> <C>
DEPARTMENT OF THE TREASURY PART 2--CERTIFICATIONS--Under penalties of perjury, I certify
INTERNAL REVENUE SERVICE that:
PAYOR'S REQUEST FOR (1) The number shown on this form is my correct Taxpayer
TAXPAYER IDENTIFICATION Identification Number (or I am waiting for a number to be issued
NUMBER ("TIN") to me and have checked the box in Part 3) and
(2) I am not subject to backup withholding because: (a) I am
exempt from backup withholding, or (b) I have not been notified
by the Internal Revenue Service (the "IRS") that I am subject
to backup withholding as a result of a failure to report all
interest or dividends, or (c) the IRS has not 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 underreporting 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 DATE
</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 SUBSTITUTE FORM W-9.
<PAGE>
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 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:
- ----------------------------, 1998
FACSIMILE COPIES OF THE LETTER OF TRANSMITTAL, PROPERLY COMPLETED AND DULY
EXECUTED, WILL BE ACCEPTED. THE LETTER OF TRANSMITTAL, CERTIFICATES FOR SHARES
AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT OR DELIVERED BY EACH STOCKHOLDER
OF THE COMPANY OR HIS BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER
NOMINEE TO THE DEPOSITARY AT ONE OF ITS ADDRESSES SET FORTH BELOW:
THE DEPOSITARY FOR THE OFFER IS:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
BY MAIL: BY OVERNIGHT DELIVERY:
First Chicago Trust Company of New York First Chicago Trust Company of New York
Tenders & Exchanges Tenders & Exchanges
Suite 4660 c/o Securities Transfer and Reporting Services
P.O. Box 2569 Inc.
Jersey City, NJ 07303-2569 One Exchange Plaza--Third Floor
New York, NY 10006
<CAPTION>
BY MAIL: BY HAND:
First Chicago Trust Company of New York First Chicago Trust Company of New York
Tenders & Exchanges Tenders & Exchanges
Suite 4660 Suite 4680
P.O. Box 2569 14 Wall Street, 8th Floor
Jersey City, NJ 07303-2569 New York, NY 10005
</TABLE>
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Managers at their respective addresses and telephone numbers
listed below. Additional copies of the Offer to Purchase, the Letter of
Transmittal and other tender offer materials may be obtained from the
Information Agent as set forth below, and will be furnished promptly at the
Purchaser's expense. You may also contact your broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
Wall Street Plaza
New York, New York 10005
Toll Free (800) 223-2064
Banks and Brokerage Firms
please call:
(212) 440-9800
THE DEALER MANAGERS FOR THE OFFER ARE:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
Call Toll Free (800) 323-5678
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
CALMAT CO.
BY
ALB ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY
OF
VULCAN MATERIALS COMPANY
AT
$31.00 NET PER SHARE IN CASH
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, JANUARY 1, 1999, UNLESS THE OFFER IS EXTENDED.
November 20, 1998
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by ALB Acquisition Corporation, a Delaware
corporation (the "Purchaser"), and Vulcan Materials Company, a New Jersey
corporation ("Parent"), to act as Dealer Managers in connection with the
Purchaser's offer to purchase all outstanding shares of Common Stock, par value
$1 per share (the "Shares"), of CalMat Co., a Delaware corporation (the
"Company"), and the associated common share purchase rights at a purchase price
of $31.00 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 November 20, 1998 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which together constitute the "Offer") enclosed herewith.
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Shares registered in your name or in the name of your
nominee.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, SHARES REPRESENTING AT
LEAST A MAJORITY OF THE TOTAL NUMBER OF OUTSTANDING SHARES ON A FULLY DILUTED
BASIS BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE
OFFER. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS CONTAINED IN THE
OFFER TO PURCHASE. SEE THE INTRODUCTION AND SECTIONS 1, 14 AND 15 OF THE OFFER
TO PURCHASE
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase, dated November 20, 1998.
<PAGE>
2. The Letter of Transmittal for your use to tender Shares and for the
information of your clients. Facsimile copies of the Letter of Transmittal
may be used to tender Shares.
3. 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.
4. The Notice of Guaranteed Delivery for Shares to be used to accept the
Offer if certificates for Shares ("Share Certificates") and all other
required documents are not immediately available or cannot be delivered to
First Chicago Trust Company of New York (the "Depositary") by the Expiration
Date (as defined in the Offer to Purchase) or if the procedure for
book-entry transfer cannot be completed by the Expiration Date.
5. A Letter to stockholders from the Chairman and Chief Executive
Officer of the Company accompanied by the Company's
Solicitation/Recommendation Statement on Schedule 14D-9.
6. Guidelines of the Internal Revenue Service 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 WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JANUARY 1, 1999, UNLESS
THE OFFER IS EXTENDED.
In order to accept the Offer, a duly executed and properly completed Letter
of Transmittal and any required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase) in connection with a book-entry delivery of
Shares, and any other required documents should be sent to the Depositary and
either Share Certificates representing the tendered Shares should be delivered
to the Depositary, or Shares should be tendered by book-entry transfer into the
Depositary's account maintained at the Book Entry Transfer Facility (as
described in the Offer to Purchase), all in accordance with the instructions set
forth in the Letter of Transmittal and the Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Share Certificates or other required documents on or prior to the
Expiration Date or to comply with the book-entry transfer procedures on a timely
basis, a tender may be effected by following the guaranteed delivery procedures
specified in Section 3 of the Offer to Purchase.
The Purchaser will not pay any commissions or fees to any broker, dealer or
other person 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.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. However, the Purchaser
may, in its discretion, take such action as it may deem necessary to make the
Offer in any jurisdiction and extend the Offer to holders of Shares in such
jurisdiction.
<PAGE>
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 is being made on
behalf of the Purchaser by Goldman, Sachs & Co., the Dealer Managers for the
Offer, or one or more registered brokers or dealers that are licensed under the
laws of such jurisdiction.
Any inquiries you may have with respect to the Offer should be addressed to,
and additional copies of the enclosed material may be obtained from the
undersigned.
Very truly yours,
GOLDMAN, SACHS & CO.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF PARENT, THE PURCHASER, THE COMPANY, THE
DEPOSITARY, THE DEALER MANAGERS 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.
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
CALMAT CO.
BY
ALB ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY
OF
VULCAN MATERIALS COMPANY
AT
$31.00 NET PER SHARE IN CASH
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, JANUARY 1, 1999, UNLESS THE OFFER IS EXTENDED.
November 20, 1998
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated November
20, 1998 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") relating to the offer by ALB Acquisition
Corporation, a Delaware corporation (the "Purchaser"), and a wholly-owned
subsidiary of Vulcan Materials Company, a New Jersey corporation, to purchase
all outstanding shares of Common Stock, par value $1 per share (the "Shares"),
of CalMat Co., a Delaware corporation (the "Company"), and the associated common
share purchase rights (as described in the Offer to Purchase) (the "Rights"), at
a purchase price of $31.00 per Share, net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer to Purchase and in the related Letter of Transmittal enclosed herewith.
Unless the context otherwise requires, all references to Shares shall include
the associated Rights. Holders of Shares whose certificates for such Shares (the
"Share Certificates") are not immediately available, or who cannot deliver their
Share Certificates and all other required documents to the Depositary on or
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.
Accordingly, we request instructions as to whether you wish to have us
tender on your behalf any or all Shares held by us for your account pursuant to
the terms and conditions set forth in the Offer.
Please note the following:
1. The tender price is $31.00 per Share net to you in cash without
interest thereon, upon the terms and subject to the conditions set forth in
the Offer.
2. The Offer is being made for all outstanding Shares.
<PAGE>
3. The Offer is conditioned upon, among other things, Shares
representing at least a majority of the total number of outstanding Shares
on a fully diluted basis being validly tendered and not properly withdrawn
prior to the expiration of the Offer. The Offer is also subject to other
terms and conditions contained in the Offer to Purchase. See the
Introduction and Sections 1, 14 and 15 of the Offer to Purchase.
4. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter
of Transmittal, stock transfer taxes on the purchase of Shares by the
Purchaser pursuant to the Offer.
5. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Friday, January 1, 1999, unless the Offer is extended.
6. Payment for Shares purchased pursuant to the Offer will in all cases
be made only after timely receipt by First Chicago Trust Company of New York
(the "Depositary") of (a) Share Certificates or timely confirmation of the
book-entry transfer of such Shares into the account maintained by the
Depositary at The Depository Trust Company (the "Book-Entry Transfer
Facility"), pursuant to the procedures set forth in Section 3 of the Offer
to Purchase, (b) 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 connection
with a book-entry delivery, and (c) any other documents required by the
Letter of Transmittal. Accordingly, payment may not be made to all tendering
stockholders at the same time depending upon when certificates for or
confirmations of book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility are actually received by the
Depositary.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form set forth on the back page of this letter. If you
authorize the tender of your Shares, all such Shares will be tendered unless
otherwise specified on the back page of this letter. An envelope to return your
instructions to us is enclosed. 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.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. However, the Purchaser
may, in its discretion, take such action as it may deem necessary to make the
Offer in any jurisdiction and extend the Offer to holders of Shares in such
jurisdiction.
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 is being made on
behalf of the Purchaser by Goldman, Sachs & Co., the Dealer Managers for the
Offer, or one or more registered brokers or dealers that are licensed under the
laws of such jurisdiction.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
CALMAT CO.
BY
ALB ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY
OF
VULCAN MATERIALS COMPANY
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase, dated November 20, 1998 (the "Offer to Purchase"), and the related
Letter of Transmittal (which together constitute the "Offer") in connection with
the offer by ALB Acquisition Corporation, a Delaware corporation (the
"Purchaser"), and a wholly-owned subsidiary of Vulcan Materials Company, a New
Jersey corporation, to purchase all outstanding shares of Common Stock, par
value $1 per share (the "Shares"), of CalMat Co., a Delaware corporation, and
the associated common share purchase rights (as described in the Offer to
Purchase) (the "Rights"), at a purchase price of $31.00 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.
This will instruct you to tender to the Purchaser 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.
Number of Shares to Be Tendered: ____________ Shares*
- --------------------------------------------------------------------------------
SIGN BELOW
Account Number: _________________________ Signature(s) _________________________
Dated: ______________________, 1998
________________________________________________________________________________
Please type or print name(s)
________________________________________________________________________________
Please type or print address(es) heres
________________________________________________________________________________
Area Code and Telephone Number
________________________________________________________________________________
Taxpayer Identification or Social Security Number(s)
* Unless otherwise indicated, it will be assumed that you instruct us to
tender all Shares held by us for your account.
3
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
CALMAT CO.
TO
ALB ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY
OF
VULCAN MATERIALS COMPANY
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery or one substantially equivalent hereto
must be used to accept the Offer (as defined below) if certificates representing
shares of Common Stock, par value $1 per share (the "Shares"), of CalMat Co., a
Delaware corporation (the "Company"), and the associated Rights (as defined in
the Offer to Purchase), are not immediately available or time will not permit
all required documents to reach First Chicago Trust Company of New York (the
"Depositary") on or prior to the Expiration Date (as defined in the Offer to
Purchase), or the procedures for delivery by book-entry transfer cannot be
completed on a timely basis. This Notice of Guaranteed Delivery may be delivered
by hand or sent by mail to the Depositary. See Section 3 of the Offer to
Purchase.
THE DEPOSITARY FOR THE OFFER IS:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
BY MAIL: BY OVERNIGHT DELIVERY:
First Chicago Trust Company of New York First Chicago Trust Company of New York
Tenders & Exchanges Tenders & Exchanges
Suite 4660 c/o Securities Transfer and Reporting Services
P.O. Box 2569 Inc.
Jersey City, NJ 07303-2569 One Exchange Plaza--Third Floor
New York, NY 10006
<CAPTION>
BY MAIL: BY HAND:
First Chicago Trust Company of New York First Chicago Trust Company of New York
Tenders & Exchanges Tenders & Exchanges
Suite 4660 Suite 4680
P.O. Box 2569 14 Wall Street, 8th Floor
Jersey City, NJ 07303-2569 New York, NY 10005
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to ALB Acquisition Corporation, a Delaware
corporation (the "Purchaser") and a wholly-owned subsidiary of Vulcan Materials
Company, a New Jersey corporation, upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated November 20, 1998 (the "Offer to
Purchase"), and in the related Letter of Transmittal (which together constitute
the "Offer"), receipt of each of which is hereby acknowledged, the number of
Shares (including the associated common share purchase rights) indicated below
pursuant to the guaranteed delivery procedures set forth in Section 3 of the
Offer to Purchase.
<TABLE>
<S> <C>
Number of Shares (specify number of each Name(s) of Record Holder(s):
type):
Please Print
Certificate Nos. (if available) Address(es):
Include account number if Shares will be Zip Code
tendered by book-entry transfer (including Area Code and Tel. No.:
through DTC's ATOP): Signature(s):
Account Number:
Dated: , 1998
</TABLE>
2
<PAGE>
THE GUARANTEE BELOW MUST BE COMPLETED
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that 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, hereby guarantees to deliver to
the Depositary at one of its addresses set forth above either the certificates
representing all tendered Shares, in proper form for transfer, a Book-Entry
Confirmation (as defined in the Offer to Purchase), together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees, or, in the case of book-entry delivery of
Shares, an Agent's Message (as defined in the Offer to Purchase), and any other
documents required by the Letter of Transmittal within three New York Stock
Exchange trading days after the date of execution of this Notice of Guaranteed
Delivery. A "New York Stock Exchange trading day" is any day on which The New
York Stock Exchange is open for business.
<TABLE>
<S> <C>
Name of Firm Authorized Signature
Address Title
Name:
Zip Code Please Print
Area Code and Tel. No.: Date: , 1998
</TABLE>
NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE OF GUARANTEED
DELIVERY. SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF
TRANSMITTAL.
3
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
- -----------------------------------------------------
GIVE THE
TAXPAYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- -----------------------------------------------------
<S> <C> <C>
1. An individual's The individual
account
2. Two or more The actual owner of
individuals (joint the account or, if
account) combined funds, the
first individual on
the account(1)
3. Husband and wife The actual owner of
(joint account) the account or, if
joint funds, either
person (1)
4. Custodian account of The minor(2)
a minor (Uniform
Gift to Minors Act)
5. Adult and minor The adult or, if the
(joint account) minor is the only
contributor, the
minor(1)
6. Account in the name The ward, minor, or
of guardian or incompetent
committee for a person(3)
designated ward,
minor, or
incompetent person
7. a. The usual The grantor-
revocable savings trustee(1)
trust account
(grantor is also
trustee)
b. So-called trust The actual owner(1)
account that is
not a legal or
valid trust under
state law
8. Sole proprietorship The owner(4)
account
- -----------------------------------------------------
<CAPTION>
GIVE THE
TAXPAYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
<S> <C> <C>
- -----------------------------------------------------
9. A valid trust, The legal entity (Do
estate, or pension not furnish the
trust identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated in
the account
title.)(5)
10. Corporate account The corporation
11. Religious, The organization
charitable, or
educational
organization account
12. Partnership account The partnership
held in the name of
the business
13. Association, club, The organization
or other tax-exempt
organization
14. A broker or The broker or
registered nominee nominee
15. Account with the The public entity
Department of
Agriculture in the
name of a public
entity (such as a
State or local
government, school
district, or prison)
that receives
agricultural program
payments
</TABLE>
- ---------------------------------------------
- ---------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show your individual name. You may also enter your business name. You may
use either your social security number or your employer identification
number.
(5) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), at the local office of the Social Security
Administration or the Internal Revenue Service (the "IRS") and apply for a
number.
PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING
The following is a list of payees exempt from backup withholding and for
which no information reporting is required. For interest and dividends, all
listed payees are exempt except item (9). For broker transactions, payees listed
in items (1) through (13) and a person registered under the Investment Advisers
Act of 1940 who regularly acts as a broker are exempt. Payments subject to
reporting under sections 6041 and 6041A are generally exempt from backup
withholding only if made to payees described in items (1) through (7), except a
corporation that provides medical and health care services or bills and collects
payments for such services is not exempt from backup withholding or information
reporting. Only payees described in items (2) through (6) are exempt from backup
withholding for barter exchange transactions, patronage dividends, and payments
by certain fishing boat operators.
(1) A corporation.
(2) An organization exempt from tax under section 501(a), or an IRA, or a
custodial account under section 403(b)(7).
(3) The United States or any of its agencies or instrumentalities.
(4) A state, the District of Columbia, a possession of the United States, or any
of their political subdivisions or instrumentalities.
(5) A foreign government or any of its political subdivisions, agencies or
instrumentalities.
(6) An international organization or any of its agencies or instrumentalities.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the United
States or a possession of the United States.
(9) A futures commission merchant registered with the Commodity Futures Trading
Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the Investment
Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in the
most recent publication of the American Society of Corporate Secretaries,
Inc., Nominee List.
(15) A trust exempt from tax under section 664 or described in section 4947.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441
of the Code.
- Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business 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 of the Code).
- Payments described in section 6049(b)(5) of the Code to non-resident
aliens.
- Payments on tax-free covenant bonds under section 1451 of the Code.
- Payments made by certain foreign organizations.
- Payments of mortgage interest to you.
- Payments made to an appropriate nominee.
Exempt payees described above should file substitute Form W-9 to avoid possible
erroneous backup withholding. FILE THIS Form WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND
DATE THE FORM AND RETURN IT TO THE PAYER. IF YOU ARE A NON-RESIDENT ALIEN OR A
FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER A COMPLETED
INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see Sections 6041, 6041A(a), 6045, and 6050A and 6050N
of the Code and the regulations promulgated thereunder.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification 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 a payer. Certain penalties may
apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your correct 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 which results in no
imposition of backup withholding, you are subject to a penalty of $500.
(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>
Exhibit (a)(7)
VULCAN MATERIALS COMPANY TO ACQUIRE CALMAT COMPANY FOR
$31 PER SHARE
CREATES LARGEST COAST-TO-COAST PRODUCER OF QUALITY CONSTRUCTION MATERIALS
BIRMINGHAM, ALA AND LOS ANGELES (NOVEMBER 16, 1998) -- Vulcan Materials Company
[NYSE: VMC] and CalMat Company [NYSE: CZM] today announced they have entered
into a definitive merger agreement providing for the acquisition of all of the
shares of CalMat by Vulcan Materials at a per-share price of $31 in cash. The
transaction has a total equity value of $760 million, and Vulcan Materials will
assume approximately $130 million in CalMat debt for a total transaction value
of $890 million.
This combination further solidifies Vulcan Materials' position as the nation's
largest producer of construction aggregates, serving 21 western, midwestern,
southwestern and southern states from Virginia to California. The combined
company, which will also be one of the nation's largest producers of asphalt mix
for highway construction, will have 1998 estimated sales of $2.3 billion and
8,700 employees.
Under the terms of the agreement, a tender offer will be commenced this week to
purchase all outstanding shares of CalMat for $31 per share in cash. The tender
offer is expected to expire on January 1, 1999, with anticipated closing on
January 4, 1999. The Boards of Directors of Vulcan Materials and CalMat have
approved the agreement, and CalMat's board has voted unanimously to recommend
that all CalMat shareholders tender their shares. The transaction is expected
to be neutral to Vulcan's 1999 earnings per share, and to be accretive to
earnings per share in 2000. The transaction is not conditioned upon financing.
Under the terms of the definitive agreement, CalMat has agreed not to pay its
regular quarterly dividend of $.10 a share for the fourth quarter of 1998.
Donald M. James, Vulcan Materials chairman and chief executive officer, said,
"This combination creates a premier, fast-growing construction materials company
with strong positions throughout the Sunbelt, midwest and west. Our combined
geographic diversity and strong capital base will position us for better growth
than Vulcan Materials and CalMat could achieve as separate companies, while
strengthening our ability to withstand economic uncertainty. The strategic fit
of Vulcan and CalMat has been recognized by both companies' managements for over
a decade. We are pleased that Vulcan's strong balance sheet makes this
transaction possible at a time when Vulcan's interest rates are extremely
favorable and the outlook for our industry and our markets is bright. In
addition to the excellent strategic fit, we believe that Vulcan Materials and
CalMat should benefit through the exchange of best practices in operations,
procurement, product quality, and customer service. CalMat, as a subsidiary of
Vulcan Materials, will continue to be headquartered in Los Angeles."
A. Frederick Gerstell, CalMat's chairman and chief executive officer, said,
"CalMat's roots in California go back more than a century, and we are proud of
what we have accomplished. As we look to the future, it is clear to us that
this strategic alliance will enhance our leadership role in the future of the
west. We are delighted to join with Vulcan Materials, which has fulfilled a
similar historic leadership role in the eastern half of the United States.
Together, we are positioned for continued growth as we enter the next century.
<PAGE>
"This transaction delivers an attractive price to CalMat's shareholders, and
provides our customers the assurance of reliable supplies of the highest-quality
products and services well into the future," Mr. Gerstell continued. "This
transaction provides our employees with greater opportunities to grow along with
our combined company. We believe that, as a result, our communities, customers
and employees will benefit. We look forward to a productive partnership with
Vulcan Materials."
Donald M. James, chairman and chief executive officer of Vulcan Materials, will
continue as chairman and chief executive officer of the combined company. A.
Frederick Gerstell, chairman and chief executive officer of CalMat, will become
vice chairman and a director of Vulcan Materials. Mr. James said, "We are
extremely pleased that Fred will be joining our company. Fred is a leader in
the construction materials industry, and his background and experience will be
invaluable in helping to guide the combined company."
Goldman, Sachs & Co. acted as financial advisor to Vulcan Materials Company.
Credit Suisse First Boston Corporation acted as financial advisor to CalMat
Company.
Vulcan Materials Company is the largest producer of construction aggregates in
the United States and is recognized as one of the nation's leading producers of
chemicals.
CalMat Company is one of the largest U.S. producers of construction aggregates
and asphalt mix for highway construction.
This release contains forward-looking statements based on current expectations
that involve risk and uncertainties including, but not limited to, national and
regional economic conditions, adverse weather conditions in the companies'
markets, levels of construction spending in the companies' major markets,
unexpected operational difficulties and other risks as described in the
companies' annual reports on Form 10-K and quarterly reports on Form 10-Q filed
with the Securities and Exchange Commission. Although the companies believe
that the expectations reflected in such forward-looking statements, are based
upon reasonable assumptions, they can give no assurance that its expectations
will be achieved. Actual results and events may differ materially from what is
expressed or forecasted in such forward-looking statements.
NOTE TO EDITORS: TODAY'S NEWS RELEASE, ALONG WITH OTHER NEWS ABOUT VULCAN
MATERIALS COMPANY AND CALMAT COMPANY, IS AVAILABLE ON THE INTERNET AT HTTP//WWW
CALMAT.COM AND HTTP://WWW.VULCANMAT.COM.
<PAGE>
EXHIBIT (a)(8)
This announcement is neither an offer to purchase nor a solicitation of
an offer to sell Shares. The Offer is made solely by the Offer to
Purchase, dated November 20, 1998, and the related Letter of Transmittal,
and is being made to all holders of Shares. The Offer is not being made to
(nor will tenders be accepted from or on behalf of) holders of Shares in
any jurisdiction in which the making of the Offer or the acceptance thereof
would not be in compliance with the laws of such jurisdiction. 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 ALB Acquisition Corporation by Goldman,
Sachs & Co. or one or more registered brokers or dealers licensed
under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Common Share Purchase Rights)
of
CALMAT CO.
by
ALB Acquisition Corporation
a wholly-owned subsidiary of
Vulcan Materials Company
at
$31.00 Net Per Share
ALB Acquisition Corporation (the "Purchaser"), a Delaware
corporation and a wholly-owned subsidiary of Vulcan Materials Company, a New
Jersey corporation ("Parent"), is offering to purchase all outstanding shares
of Common Stock, par value $1 per share (the "Shares"), of CalMat Co., a
Delaware corporation (the "Company"), and the associated common share
purchase rights (the "Rights") issued pursuant to the Rights Agreement, dated
as of September 22, 1987, as amended as of October 26, 1992, July 22, 1997,
and November 14, 1998, between the Company and First Chicago Trust Company of
New York, as Rights Agent (as the same may be
<PAGE>
amended, the "Rights Agreement"), at a purchase price of $31.00 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
November 20, 1998 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which together constitute the "Offer"). Unless the context
otherwise requires, all references to Shares herein and in the Offer to Purchase
shall include the associated Rights.
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT NEW YORK CITY
TIME, ON FRIDAY, JANUARY 1, 1999, UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
The Offer is being made pursuant to an Agreement and Plan of Merger,
dated as of November 14, 1998 (the "Merger Agreement"), by and among the
Company, the Purchaser and Parent pursuant to which, following the
consummation of the Offer and the satisfaction of certain conditions, the
Purchaser will be merged with and into the Company (the "Merger"), with the
Company continuing as the surviving corporation. On the effective date of the
Merger, each outstanding Share (other than 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 will be canceled with no payment being made with respect
thereto, and other than Shares, if any, held by stockholders who perfect
their appraisal rights under Delaware law) will be converted into the right
to receive an amount equal to $31.00 in cash (without interest).
The Board of Directors of the Company unanimously has determined
that the Offer and the Merger are fair to and in the best interests of the
stockholders of the Company, has approved the Offer and the Merger Agreement
and recommends acceptance of the Offer by the Company's stockholders.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, SHARES
REPRESENTING AT LEAST A MAJORITY OF THE TOTAL NUMBER OF OUTSTANDING SHARES ON
A FULLY DILUTED BASIS BEING VALIDLY TENDERED AND NOT PROPERLY WITHDRAWN PRIOR
TO THE EXPIRATION OF THE OFFER. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND
CONDITIONS. SEE THE INTRODUCTION AND SECTIONS 1, 14 AND 15 OF THE OFFER TO
PURCHASE.
For purposes of the Offer, the Purchaser will be deemed to have
accepted for payment, and thereby purchased, Shares validly tendered and not
withdrawn as, if and when the Purchaser gives oral or written notice to First
Chicago Trust Company of New York, as depositary (the "Depositary") of the
Purchaser's acceptance of such Shares for payment pursuant to the Offer. In
all cases, upon the terms and subject to the conditions of the Offer, payment
for Shares purchased pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payment from the
Purchaser and transmitting payment to validly tendering stockholders. Under
no circumstances will interest on the purchase price for Shares be paid by
the Purchaser. In all cases, payment for Shares purchased pursuant to the
Offer will be made only after timely receipt by the Depositary of (i)
certificates representing Shares (the "Share Certificates") for such Shares
or timely confirmation of the book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company (the "Book-Entry
2
<PAGE>
Transfer Facility") pursuant to the procedures set forth in Section 3 of the
Offer to Purchase, (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 in the Offer to Purchase) in connection
with a book-entry transfer of Shares and (iii) any other documents required
by the Letter of Transmittal.
The Purchaser expressly reserves the right, in its sole discretion
(subject to the terms and conditions of the Merger Agreement), at any time
and from time to time, to extend the period during which the Offer is open
for any reason, including the existence of any of the conditions specified in
Section 14 of the Offer to Purchase, by giving oral or written notice of such
extension to the Depositary. Any such extension will be followed as promptly
as practicable by public announcement thereof, and such announcement will be
made no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date (as defined below).
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 as
provided in the Offer to Purchase, may also be withdrawn at any time after
Monday, January 18, 1999. The term "Expiration Date" means 12:00 midnight,
New York City time, on Friday, January 1, 1999, unless and until the
Purchaser, subject to the terms of the Merger Agreement, shall have further
extended the period of time for 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. In order for a
withdrawal to be effective, a written 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 such notice of
withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn, and (if Share Certificates
have been tendered) the name of the registered holder of the Shares as set
forth in the Share Certificate, if different from that of the person who
tendered such Shares. If Share Certificates have been delivered or otherwise
identified to the Depositary, then prior to the physical release of such
certificates, the tendering stockholder must submit the serial numbers shown
on the particular certificates evidencing the Shares to be withdrawn and the
signature on the notice of withdrawal must be guaranteed by a firm that 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 (an "Eligible Institution"), except in the case of Shares tendered
for the account of an Eligible Institution. If Shares have been tendered
pursuant to the procedures for book-entry transfer set forth in Section 3 of
the Offer to Purchase, the 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 this
paragraph. All questions as to the form and validity (including time of
receipt) of notices of withdrawal will be determined by the Purchaser, in its
sole discretion, whose determination shall be final and binding. Any Shares
properly withdrawn will be deemed not validly tendered for purposes of the
Offer, but may be tendered at any subsequent time prior to the Expiration
Date by following any of the procedures described in Section 3 of the Offer
to Purchase.
3
<PAGE>
The information required to be disclosed pursuant to 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 is providing 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, if required, other relevant materials will be mailed to record
holders of Shares and will be furnished to brokers, dealers, commercial banks,
trust companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder list or 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
Information Agent or the Dealer Managers at their respective addresses and
telephone numbers listed below. Additional copies of the Offer to Purchase,
the Letter of Transmittal, the Notice of Guaranteed Delivery and other
related materials may be obtained at the Purchaser's expense from the
Information Agent or from brokers, dealers, commercial banks and trust
companies. Neither Parent nor the Purchaser will pay any fees or commissions
to any broker, dealer or other person for soliciting tenders of Shares
pursuant to the Offer.
The Information Agent for the Offer is:
GEORGESON & COMPANY INC.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
ALL OTHERS CALL TOLL-FREE (800) 223-2064
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
(800) 323-5678
November 20, 1998
4
<PAGE>
EXHIBIT (c)(1)
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
November 14, 1998, by and among Vulcan Materials Company, a New Jersey
corporation ("Parent"), ALB Acquisition Corporation, a Delaware corporation and
a wholly-owned subsidiary of Parent (the "Purchaser"), and CalMat Co., a
Delaware corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, the
Purchaser and the Company have approved the acquisition of the Company by Parent
on the terms and subject to the conditions set forth in this Agreement;
WHEREAS, pursuant to this Agreement the Purchaser has agreed
to commence a tender offer (the "Offer") to purchase all of the outstanding
common stock, par value $1.00 per share (the "Common Shares," and together with
the associated common share purchase rights (the "Rights") issued pursuant to
the Rights Agreement (the "Rights Agreement"), dated as of September 22, 1987,
as amended as of October 26, 1992 and July 22, 1997, by and between the Company
and First Chicago Trust Company of New York, as Rights Agent, the "Shares"), at
a price per Share of $31.00 net to the seller in cash (such $31.00 price or any
higher price Purchaser determines in its sole discretion to pay in the Offer,
the "Offer Price");
WHEREAS, the Board of Directors of the Company (the "Company
Board") has, in light of and subject to the conditions set forth herein, (i)
approved the Offer, (ii) approved this Agreement and (iii) resolved to recommend
that the Company's stockholders accept the Offer and adopt this Agreement;
WHEREAS, the respective Boards of Directors of the Purchaser
and the Company have approved the merger of the Purchaser with and into the
Company (the "Merger"), in accordance with the General Corporation Law of the
State of Delaware (the "DGCL") and upon the terms and subject to the conditions
set forth in this Agreement, whereby each of the issued and outstanding Common
Shares not owned directly or indirectly by Parent, the Purchaser or the Company
will be converted into the right to receive an amount equal to the Offer Price
in cash;
WHEREAS, as a condition to and inducement to Parent's and the
Purchaser's willingness to enter into this Agreement, simultaneously with the
execution of this Agreement, each of the Company's directors are entering into
and delivering support agreements (the "Support Agreements") in the form
attached hereto as Exhibit B; and
WHEREAS, Parent, the Purchaser and the Company desire to make
certain representations, warranties, covenants and agreements in connection with
the Offer and the Merger and also to prescribe various conditions to the Offer
and the Merger;
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, Parent, the Purchaser and the Company agree as follows:
<PAGE>
ARTICLE I
THE OFFER
SECTION 1.1. The Offer.
(a) Provided that this Agreement shall not have been
terminated in accordance with Article VIII hereof and none of the events set
forth in Exhibit A hereto (the "Tender Offer Conditions") shall have occurred,
(i) as promptly as practicable but in no event later than the fifth business day
from the date of this Agreement, Parent shall (A) cause the Purchaser to
commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of
1934, as amended (including the rules and regulations promulgated thereunder,
the "Exchange Act")) the Offer and, (B) after affording the Company a reasonable
opportunity to review and comment thereon, file all necessary documents with the
Securities and Exchange Commission (the "SEC") in connection with the Offer (the
"Offer Documents") and (ii) Parent shall use reasonable best efforts to
consummate the Offer, subject to the terms and conditions thereof. The
obligation of the Purchaser to accept for payment and pay for any Shares
tendered pursuant thereto will be subject only to the satisfaction or waiver of
the Tender Offer Conditions.
(b) Without the prior written consent of the Company, the
Purchaser shall not (i) decrease the Offer Price or change the form of
consideration payable in the Offer, (ii) decrease the number of Shares sought to
be purchased in the Offer, (iii) subject to Parent's and Purchaser's right to
waive same (subject to clause (iv) below), amend the Tender Offer Conditions or
impose additional conditions to the Offer, (iv) waive the Minimum Condition (as
defined in Exhibit A hereto) or (v) amend any other term of the Offer in any
manner adverse to the holders of Common Shares. The Offer shall remain open
until the later of (x) the date that is 20 business days (as such term is
defined in Rule 14d-l(c)(6) under the Exchange Act) after the commencement of
the Offer and (y) January 1, 1999 (such later date being referred to herein as
the "Expiration Date"), unless the Purchaser shall have extended the period of
time for which the Offer is open pursuant to, and in accordance with, the two
succeeding sentences or as may be required by applicable law, in which event the
term "Expiration Date" shall mean the latest time and date as the Offer, as so
extended, may expire. If at any Expiration Date any of the Tender Offer
Conditions are not satisfied or waived by the Purchaser, or if required by any
rule, regulation, interpretation or position of the SEC or its staff applicable
to the Offer, the Purchaser shall extend the Offer from time to time until all
of the Tender Offer Conditions have been satisfied or waived or until an
extension is not required by such rule, regulation, interpretation or position;
provided that no individual extension shall extend beyond 5 business days (as
such term is defined in Rule 14d-1(c)(6) under the Exchange Act), or for such
longer period as required by any applicable law or any such rule, regulation,
interpretation or position, from the immediately preceding Expiration Date and
that the Purchaser shall in no event be required to extend the Offer beyond
March 31, 1999. In addition, if all of the Tender Offer Conditions are satisfied
and more than 70% but less than 90% of the outstanding Common Shares on a fully
diluted basis have been validly tendered and not withdrawn in the Offer, the
Purchaser shall have the right, in its sole discretion, to extend the Offer from
time to time for up to a maximum of ten additional business days in the
aggregate for all such extensions beyond the latest Expiration Date that
2
<PAGE>
would be permitted under the third sentence of this Section 1.1(b). Subject to
the terms of the Offer and this Agreement and the satisfaction or waiver of all
of the Tender Offer Conditions as of any Expiration Date, Parent shall cause the
Purchaser to, and the Purchaser shall, accept for payment and pay for all Shares
validly tendered and not withdrawn pursuant to the Offer as soon as practicable
after such Expiration Date of the Offer.
(c) Parent and the Purchaser represent that the Offer
Documents will comply in all material respects with the provisions of applicable
federal securities laws and, on the date filed with the SEC and on the date
first published, sent or given to the Company's stockholders, shall not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading, except that no representation is made by Parent or the Purchaser
with respect to information supplied by the Company in writing for inclusion in
the Offer Documents. Each of Parent and the Purchaser, on the one hand, and the
Company, on the other hand, agrees promptly to correct any information provided
by it for use in the Offer Documents if and to the extent that it shall have
become false or misleading in any material respect, and the 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 stockholders of the Company,
in each case, as and to the extent required by applicable federal securities
laws. Parent and the Purchaser agree to provide to the Company and its counsel
any comments Parent or the Purchaser or their counsel may receive from the SEC
or its staff with respect to the Offer Documents promptly after the receipt of
such comments.
SECTION 1.2. Company Actions.
(a) The Company shall, after affording Parent a reasonable
opportunity to review and comment thereon, file with the SEC and mail to the
holders of Common Shares, as promptly as practicable on the date of the filing
by Parent and the Purchaser of the Offer Documents with the SEC, a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with any
amendments or supplements thereto, the "Schedule 14D-9") reflecting the
recommendation of the Company Board that holders of Shares tender their Shares
pursuant to the Offer, and shall disseminate the Schedule 14D-9 as required by
Rule 14d-9 promulgated under the Exchange Act. The Schedule 14D-9 will set
forth, and the Company hereby represents, that the Company Board, at a meeting
duly called and held, has (i) determined by unanimous vote of its directors that
each of the transactions contemplated hereby, including each of the Offer and
the Merger, is fair to and in the best interests of the Company's stockholders,
(ii) approved the Offer and this Agreement in accordance with the DGCL and (iii)
recommended acceptance of the Offer and adoption of this Agreement by the
Company's stockholders (if such adoption is required by applicable law);
provided, however, that such recommendation, adoption and approval may be
withdrawn, modified or amended to the extent that the Company Board determines
in good faith following consultation with outside counsel that failure to take
such action would constitute a breach of the Company Board's fiduciary
obligations under applicable law. The Company further represents that, prior to
the execution hereof, Credit Suisse First Boston Corp. ("CSFB"), has delivered
to the Company Board its opinion (subsequently confirmed in writing) that, as of
the date hereof, the consideration to be received by the holders of Common
Shares (other than
3
<PAGE>
Parent or any of its affiliates) pursuant to the Offer and the Merger is fair to
such holders from a financial point of view. The Company hereby consents to the
inclusion in the Offer Documents of the recommendations of the Company Board
described in this Section 1.2(a).
(b) The Company represents that the Schedule 14D-9 will comply
in all material respects with the provisions of applicable federal securities
laws and, on the date filed with the SEC and on the date first published, sent
or given to the Company's stockholders, shall not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in light of
the circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to information supplied by
Parent or the Purchaser in writing for inclusion in the Schedule 14D-9. Each of
the Company, on the one hand, and Parent and the Purchaser, on the other hand,
agree promptly to correct any information provided by either of 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 to be disseminated to the stockholders of the Company, in each case, as
and to the extent required by applicable federal securities law. The Company
agrees to provide to Parent and its counsel any comments the Company or its
counsel may receive from the SEC or its staff with respect to the Schedule 14D-9
promptly after the receipt of such comments.
(c) In connection with the Offer, the Company will promptly
furnish the Purchaser with mailing labels, security position listings, any
available non-objecting beneficial owner lists and any available listing or
computer list containing the names and addresses of the record holders of the
Common Shares as of the most recent practicable date and shall furnish the
Purchaser with such additional available information (including, but not limited
to, updated lists of holders of Common Shares and their addresses, mailing
labels and lists of security positions and non-objecting beneficial owner lists)
and such other assistance as the Purchaser or its agents may reasonably request
in communicating the Offer to the Company's record and beneficial stockholders.
Subject to the requirements of applicable law, and except for such steps as are
reasonably necessary to disseminate the Offer Documents and any other documents
and information reasonably necessary to consummate the Offer and the Merger,
Parent and the Purchaser and their agents shall hold in confidence the
information contained in any such labels, listings and information, will use
such information only in connection with the Offer and the Merger and, if this
Agreement shall be terminated, will deliver to the Company or destroy (as
certified in writing), and will use their reasonable best efforts to cause their
agents to deliver to the Company or destroy (as certified in writing), all
copies of and any extracts or summaries from such information then in their
possession or control.
SECTION 1.3. Directors.
(a) Subject to compliance with applicable law, promptly upon
the payment by the Purchaser for Shares pursuant to the Offer, and from time to
time thereafter, Parent shall be entitled to designate such number of directors,
rounded up to the next whole number, on the Company Board as is equal to the
product of the total number of directors on the Company
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Board (determined after giving effect to the election of directors pursuant to
this sentence) multiplied by the percentage that the aggregate number of Common
Shares beneficially owned by Parent or its affiliates bears to the total number
of Common Shares then outstanding, and the Company shall, upon request of
Parent, promptly take all actions necessary to cause Parent's designees to be so
elected, including, if necessary, seeking the resignations of one or more
existing directors; provided, however, that prior to the Effective Time (as
defined in Section 2.2), the Company Board shall always have at least two
members who are neither officers, directors, affiliates or designees of the
Purchaser or any of its affiliates ("Purchaser Insiders"). If the number of
directors who are not Purchaser Insiders is reduced below two prior to the
Effective Time, the remaining director who is not a Purchaser Insider shall be
entitled to designate a person who is not a Purchaser Insider to fill such
vacancy.
(b) The Company's obligations to appoint Parent's designees to
the Board shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1
thereunder. The Company shall promptly take all actions required pursuant to
such Section and Rule in order to fulfill its obligations under this Section 1.3
and shall include in the Schedule 14D-9 such information supplied by Parent on a
timely basis with respect to Parent and its designees as is required under such
Section and Rule in order to fulfill its obligations under this Section 1.3.
Parent will supply any such information with respect to itself and its designees
required by such Section and Rule to the Company.
(c) Following the election or appointment of Parent's
designees pursuant to this Section 1.3 and prior to the Effective Time, any
amendment or 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 the Purchaser, any waiver of any of the Company's rights hereunder
or any other actions taken by the Company, will require the concurrence of a
majority of the directors of the Company then in office who are not Purchaser
Insiders (or in the case where there are two or fewer directors who are not
Purchaser Insiders, the concurrence of one director who is not a Purchaser
Insider) if such amendment, termination, extension, waiver or action would be
reasonably likely to have an adverse effect on the minority stockholders of the
Company.
ARTICLE II
THE MERGER
SECTION 2.1. The Merger. Upon the terms and subject to the
satisfaction or waiver of the conditions hereof, and in accordance with the
applicable provisions of this Agreement and the DGCL, at the Effective Time
the Purchaser shall be merged with and into the Company. Following the
Merger, the separate corporate existence of the Purchaser shall cease and the
Company shall continue as the surviving corporation (the "Surviving
Corporation").
SECTION 2.2. Effective Time. As soon as practicable, but in any
event within five business days, after the satisfaction or waiver of the
conditions set forth in Article VII, the Company shall execute, in the manner
required by the DGCL, and deliver to the Secretary of
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State of the State of Delaware a duly executed and verified certificate of
merger, and the parties shall take such other and further actions as may be
required by law to make the Merger effective. The time the Merger becomes
effective in accordance with applicable law is referred to herein as the
"Effective Time."
SECTION 2.3. Effects of the Merger. The Merger shall have the
effects set forth in the DGCL. Without limiting the generality of the foregoing,
and subject thereto, at the Effective Time, all the properties, rights,
privileges, powers and franchises of the Company and the Purchaser shall vest in
the Surviving Corporation, and all debts, liabilities and duties of the Company
and the Purchaser shall become the debts, liabilities and duties of the
Surviving Corporation.
SECTION 2.4. Certificate of Incorporation and By-Laws of the
Surviving Corporation.
(a) The Certificate of Incorporation of the Purchaser, as in
effect immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended in
accordance with the provisions thereof and applicable law.
(b) The By-Laws of the Purchaser in effect at the Effective
Time shall be the By-Laws of the Surviving Corporation until thereafter amended
in accordance with applicable law.
SECTION 2.5. Directors. Subject to applicable law, the directors
of the Purchaser immediately prior to the Effective Time shall be the initial
directors of the Surviving Corporation and shall hold office until their
respective successors are duly elected and qualified, or their earlier death,
resignation or removal.
SECTION 2.6. Officers. The officers of the Purchaser immediately
prior to the Effective Time shall be the initial officers of the Surviving
Corporation and shall hold office until their respective successors are duly
elected and qualified, or their earlier death, resignation or removal.
SECTION 2.7. Conversion of Common Shares. At the Effective Time,
by virtue of the Merger and without any action on the part of the holders
thereof, each Common Share issued and outstanding immediately prior to the
Effective Time (other than (i) any Common 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 Common Shares,
by virtue of the Merger and without any action on the part of the holder
thereof, shall be cancelled and retired and shall cease to exist with no payment
being made with respect thereto and (ii) Dissenting Shares (as defined in
Section 3.1)), shall be cancelled and retired and shall be converted into the
right to receive an amount equal to the Offer Price in cash (the "Merger
Price"), payable to the holder thereof, without interest thereon, upon surrender
of the certificate formerly representing such Common Share.
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SECTION 2.8. Conversion of Purchaser Common Stock. The Purchaser
has outstanding 1,000 shares of common stock, par value $.01 per share, all of
which are entitled to vote with respect to approval of this Agreement. At the
Effective Time, each share of common stock of the Purchaser issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into and become one validly issued, fully paid and non-assessable share of
common stock, par value $.01 per share, of the Surviving Corporation.
SECTION 2.9. Options; Stock Plans. Prior to the Effective Time,
the Company Board (or, if appropriate, any committee thereof) shall adopt
appropriate resolutions and use its reasonable best efforts to provide for the
cancellation, effective at the Effective Time, of all the outstanding stock
options (the "Options") heretofore granted under any stock option or similar
plan of the Company (the "Stock Plans"), or under any agreement, without any
payment therefor except as otherwise provided in this Section 2.9. Effective as
of immediately prior to the Effective Time, the Company shall accelerate the
vesting of all Options, if any, which are not then vested, and, giving effect to
the foregoing, each then vested option shall no longer be exercisable but shall
only entitle each holder thereof, in cancellation and settlement therefor, to a
payment in cash by the Company (subject to any applicable withholding taxes), at
the Effective Time, equal to the product of (x) the total number of Common
Shares subject to such vested option and (y) the excess of the Merger Price over
the exercise price per Common Share subject to such vested option (the "Cash
Payments"). The Company represents and warrants that it has taken all necessary
action to terminate the 1987 Stock Option Plan, the 1990 Stock Option Plan, the
1993 Stock Option Plan, the 1998 Stock Option Plan and the Employee Stock
Purchase Plan, as any of them may have been amended, and all other Stock Plans,
and any other plans, programs or arrangements providing for the issuance or
grant of any other interest in respect of the capital stock of the Company or
any subsidiary in each case effective immediately prior to the Effective Time.
The Company will take all reasonable steps to ensure that none of Parent, the
Company or any of their respective subsidiaries is or will be bound by any
Options or other options, warrants, rights or agreements that would entitle any
Person, other than Parent or its affiliates, to own any capital stock of the
Surviving Corporation or any of its subsidiaries or to receive any payment in
respect thereof.
SECTION 2.10. Stockholders' Meeting.
(a) If required by applicable law in order to consummate the
Merger, the Company, acting through the Company Board, shall, in accordance with
applicable law:
(i) duly call, give notice of, convene and hold a
special meeting of its stockholders (the "Special Meeting") as
soon as practicable following the acceptance for payment of and
payment for Common Shares by the Purchaser pursuant to the Offer
for the purpose of adopting this Agreement;
(ii) prepare and file with the SEC a preliminary proxy
statement relating to this Agreement, and use its reasonable best
efforts (x) to obtain and furnish the information required by the
SEC to be included in the Proxy Statement (as hereinafter
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defined) and, after consultation with Parent, to respond promptly
to any comments made by the SEC with respect to the preliminary
proxy statement and cause a definitive proxy statement (the "Proxy
Statement") to be mailed to its stockholders and (y) to obtain the
necessary approvals of the Merger and this Agreement by its
stockholders; and
(iii) subject to the fiduciary obligations of the
Company Board under applicable law as provided in Section 1.2(a),
include in the Proxy Statement the recommendation of the Company
Board that stockholders of the Company vote in favor of the
approval of this Agreement.
(b) Parent agrees that it will vote, or cause to be voted, all
of the Common Shares then owned by it, the Purchaser or any of its other
subsidiaries, including all Shares purchased pursuant to the Offer, in favor of
the approval of the Merger and of this Agreement.
SECTION 2.11. Merger Without Meeting of Stockholders.
Notwithstanding Section 2.10, in the event that Parent, the Purchaser or any
other subsidiary of Parent shall acquire at least 90% of the outstanding Common
Shares pursuant to the Offer or otherwise, the parties hereto agree to take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after the acceptance for payment of and payment for Common Shares
by the Purchaser pursuant to the Offer without a meeting of stockholders of the
Company, in accordance with Section 253 of the DGCL.
ARTICLE III
DISSENTING SHARES; PAYMENT FOR SHARES
SECTION 3.1. Dissenting Shares. Notwithstanding Section 2.7,
Common Shares outstanding immediately prior to the Effective Time and held by
a holder who has not voted in favor of the Merger or consented thereto in
writing and who has demanded appraisal for such Common Shares in accordance
with the DGCL ("Dissenting Shares") shall not be converted into a right to
receive the Merger Price, unless such holder fails to perfect or withdraws or
otherwise loses his right to appraisal. If after the Effective Time such
holder fails to perfect or withdraws or loses his right to appraisal, such
Common Shares shall be treated as if they had been converted as of the
Effective Time into a right to receive the Merger Price pursuant to Section
2.7. The Company shall give Parent prompt notice of any demands received by
the Company for appraisal of Common Shares, and Parent shall have the right
to participate in all negotiations and proceedings with respect to such
demands. The Company shall not, except with the prior written consent of
Parent, make any payment with respect to, or settle or offer to settle, or
otherwise negotiate any such demands.
SECTION 3.2. Payment for Common Shares.
(a) From and after the Effective Time, such bank or trust
company as shall be mutually reasonably acceptable to Parent and the Company
shall act as paying agent (the
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"Paying Agent") in effecting the payment of the Merger Price in respect of
certificates (the "Certificates") that, prior to the Effective Time, represented
Common Shares entitled to payment of the Merger Price pursuant to Section 2.7.
Promptly following the Effective Time, Parent or the Purchaser shall deposit, or
cause to be deposited, with the Paying Agent the aggregate Merger Price to which
holders of Common Shares shall be entitled at the Effective Time pursuant to
Section 2.7.
(b) Promptly after the Effective Time, Parent shall cause the
Paying Agent to mail to each record holder of Certificates that immediately
prior to the Effective Time represented Common Shares 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 Paying Agent and instructions for use in surrendering such
Certificates and receiving the Merger Price in respect thereof. Upon the
surrender of each such Certificate, the Paying Agent shall pay the holder of
such Certificate the Merger Price multiplied by the number of Common Shares
formerly represented by such Certificate, in consideration therefor, and such
Certificate shall forthwith be cancelled. Until so surrendered, each such
Certificate (other than Certificates representing Common Shares held by Parent
or 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 or
Dissenting Shares) shall represent solely the right to receive the aggregate
Merger Price relating thereto. No interest or dividends shall be paid or accrued
on the Merger Price. If the Merger Price (or any portion thereof) is to be
delivered to any person other than the person in whose name the Certificate
formerly representing Common Shares surrendered therefor is registered, it shall
be a condition to such right to receive such Merger Price that the Certificate
so surrendered shall be properly endorsed or otherwise be in proper form for
transfer and that the person surrendering such Certificate shall pay to the
Paying Agent any transfer or other taxes required by reason of the payment of
the Merger Price to a person other than the registered holder of the Certificate
surrendered, or shall establish to the satisfaction of the Paying Agent that
such tax has been paid or is not applicable. In the event any Certificate shall
have been lost, stolen or destroyed, the Paying Agent shall be required to pay
the full Merger Price in respect of any Common Shares represented by such
Certificate; however, Parent may require the owner of such lost, stolen or
destroyed Certificate to execute and deliver to the Paying Agent a form of
affidavit, in form and substance reasonably satisfactory to Parent, claiming
such Certificate to be lost, stolen or destroyed, and may require such owner to
post a bond in such amount as Parent may determine to be reasonably necessary as
indemnity against any claim that may be made against Parent or the Paying Agent.
(c) Promptly following the date which is 180 days after the
Effective Time, the Paying Agent shall deliver to the Surviving Corporation all
cash, Certificates and other documents in its possession relating to the
transactions described in this Agreement, and the Paying Agent's duties shall
terminate. Thereafter, each holder of a Certificate formerly representing a
Common Share may surrender such Certificate to the Surviving Corporation and
(subject to applicable abandoned property, escheat and similar laws) receive in
consideration therefor the aggregate Merger Price relating thereto, without any
interest or dividends thereon.
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(d) After the Effective Time, there shall be no transfers on
the stock transfer books of the Surviving Corporation of any Common Shares which
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates formerly representing Common Shares are presented
to the Surviving Corporation or the Paying Agent, they shall be surrendered and
cancelled in return for the payment of the aggregate Merger Price relating
thereto, as provided in this Article III.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the corresponding enumerated section of
the Disclosure Schedule delivered by the Company to Parent prior to the
execution of this Agreement (the "Company Disclosure Schedule"), the Company
represents and warrants to Parent and the Purchaser as follows:
SECTION 4.1. Organization and Qualification; Subsidiaries. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Each of the Company's subsidiaries is
duly organized, validly existing and is in good standing under the laws of the
jurisdiction of its organization, except where the failure to be so organized,
existing or in good standing would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company. The
Company and each of its subsidiaries has the requisite power and authority to
own, operate or lease its properties and to carry on its business as it is now
being conducted, and is duly qualified or licensed to do business, and, with
respect to the Company and the Company's subsidiaries that are organized in a
jurisdiction in the United States of America, is in good standing, in each
jurisdiction in which the nature of its business or the properties owned,
operated or leased by it makes such qualification, licensing or good standing
necessary, except where the failure to have such power or authority, or the
failure to be so qualified, licensed or in good standing, would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company. The term "Material Adverse Effect on the
Company," as used in this Agreement, means any change or effect that is or would
reasonably be expected to have a material adverse effect on the business,
assets, financial condition or results of operations of the Company and its
subsidiaries taken as a whole, other than any change or effect to the extent
attributable to (i) the economy or the securities markets in general, (ii) this
Agreement or the transactions contemplated hereby or the announcement thereof or
(iii) the Company's industry in general, and not specifically relating to the
Company or its subsidiaries. The Company has heretofore made available to Parent
and the Purchaser a complete and correct copy of the certificate of
incorporation and the by-laws or comparable organizational documents, each as
amended to the date hereof, of the Company and each of its subsidiaries and has
made available a complete and correct copy of the Rights Agreement as amended to
the date hereof.
SECTION 4.2. Capitalization; Subsidiaries. The authorized capital
stock of the Company consists of 100,000,000 Common Shares and 5,000,000 shares
of Preferred Stock, par value $1.00 per share (the "Preferred Stock"). As of the
close of business on November 9, 1998,
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23,797,279 Common Shares were issued and outstanding, all of which are entitled
to vote on this Agreement, and no Common Shares were held in treasury. As of the
date hereof, the Company has no shares of Preferred Stock issued or outstanding.
The Company has no shares reserved for issuance, except that, as of November 6,
1998, there were 2,115,604 Common Shares reserved for issuance pursuant to
outstanding Stock Options and rights granted under the Stock Plans and
37,641,169 Common Shares reserved for issuance upon exercise of the Rights.
Section 4.2 of the Company Disclosure Schedule sets forth as of November 6,
1998, the holders of all outstanding Options and the number, exercise prices,
vesting schedules and expiration dates of each grant to such holders. Since
January 1, 1998, the Company has not issued any shares of capital stock except
pursuant to the exercise of Options outstanding as of such date or as of the
date hereof. All the outstanding Common Shares are, and all Common Shares that
may be issued pursuant to the exercise of outstanding Options will be, when
issued in accordance with the respective terms thereof, duly authorized, validly
issued, fully paid and nonassessable and are not subject to, nor were they
issued in violation of, any preemptive rights. There are no bonds, debentures,
notes or other indebtedness having general voting rights (or convertible into
securities having such rights) ("Voting Debt") of the Company or any of its
subsidiaries issued and outstanding. Except as set forth in this Section 4.2,
and except for the Rights and the Rights Agreement, there are no existing
options, warrants, calls, subscriptions or other rights, agreements,
arrangements or commitments of any character to which the Company or any of its
subsidiaries is a party or by which any of them is bound, obligating the Company
or any of its subsidiaries to issue, transfer or sell or cause to be issued,
transferred or sold any shares of capital stock or Voting Debt of, or any other
equity or voting interest in, the Company or any of its subsidiaries or
securities convertible into or exchangeable for such shares or equity interests
or obligating the Company or any of its subsidiaries to grant, extend or enter
into any such option, warrant, call, subscription or other right, agreement,
arrangement or commitment. Except as contemplated by this Agreement, and except
for the Rights Agreement and the Company's obligations in respect of the Options
under the Stock Plans, there are no outstanding contractual obligations of the
Company or any of its subsidiaries to repurchase, redeem or otherwise acquire
any Common Shares or the capital stock of the Company or any of its
subsidiaries. Each of the outstanding shares of capital stock of each of the
Company's subsidiaries is duly authorized, validly issued, fully paid and
nonassessable, and, except as set forth in Section 4.2 of the Company Disclosure
Schedule, such shares of the Company's subsidiaries are owned by the Company or
by a subsidiary of the Company, in each case free and clear of any lien, claim,
option, charge, security interest or encumbrance (any of the foregoing, a
"Lien"). Set forth in Section 4.2 of the Company Disclosure Schedule is a
complete and correct list of each subsidiary (direct or indirect).
SECTION 4.3. Authority Relative to this Agreement and Related
Matters. The Company has all necessary corporate power and authority to execute
and deliver this Agreement and, except for any required approval by the
Company's stockholders in connection with consummation of the Merger, to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by the Company and the consummation by the Company of the
transactions
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contemplated in connection herewith have been duly and validly authorized and
approved by the Company Board and no other corporate proceedings on the part of
the Company are necessary to authorize or approve this Agreement or to
consummate the transactions contemplated hereby (other than, with respect to the
Merger, the approval of this Agreement by the affirmative vote of the holders of
a majority of the then outstanding Common Shares entitled to vote thereon, to
the extent required by applicable law). This Agreement has been duly and validly
executed and delivered by the Company and, assuming the due and valid
authorization, execution and delivery of such agreement by Parent and the
Purchaser, constitutes a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms.
SECTION 4.4. No Conflict; Required Filings and Consents.
(a) Assuming (i) the filings required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act")
are made and the waiting periods thereunder have been terminated or have
expired, (ii) the requirements of the Exchange Act and any applicable state
securities "blue sky" or takeover law are met, (iii) the filing of the
certificate of merger and other appropriate merger documents, if any, as
required by the DGCL, is made and (iv) approval of this agreement by the holders
of a majority of the Common Shares, if required by the DGCL, is received, none
of the execution and delivery of this Agreement by the Company, the consummation
by the Company of the transactions contemplated hereby or compliance by the
Company with any of the provisions hereof will (i) conflict with or violate the
Certificate of Incorporation or By-Laws of the Company or the comparable
organizational documents of any of its subsidiaries, (ii) result in a breach or
violation of, a default under or the triggering of any payment or other material
obligations pursuant to or rights under, any of the Company's existing Plans (as
hereinafter defined) or any grant or award made under any of the foregoing,
(iii) conflict with or violate any statute, ordinance, rule, regulation, order,
judgment, decree, permit or license applicable to the Company or any of its
subsidiaries, or by which any of them or any of their respective properties or
assets may be bound or affected, or (iv) result in a violation or breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in any loss of any
benefit, the triggering of any payment by, or the increase in any other
obligation of, the Company or any of its subsidiaries or the creation of any
Lien on any of the properties or assets of the Company or any of its
subsidiaries (any of the foregoing referred to in clause (ii), (iii) or this
clause (iv) being a "Violation") pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or any of their
respective properties may be bound or affected, other than, in the case of
clause (iii) or (iv) above, any such violations that, individually or in the
aggregate, would not (A) reasonably be expected to have a Material Adverse
Effect on the Company, (B) impair the ability of the Company to perform its
obligations under this Agreement or (C) prevent or materially delay consummation
of any transactions contemplated by this Agreement.
(b) None of the execution and delivery of this Agreement by
the Company, the consummation by the Company of the transactions contemplated
hereby or compliance by the Company with any of the provisions hereof will
require any consent, waiver, approval, authorization or permit of, or
registration or filing with or notification to (any of the foregoing being a
"Consent"), any government or subdivision thereof, domestic, foreign or
supranational or
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any administrative, governmental or regulatory authority, agency, commission,
tribunal or body, domestic, foreign or supranational (a "Governmental Entity"),
except for (i) compliance with any applicable requirements of the Exchange Act,
(ii) the filing of the appropriate certificate of merger and any other relevant
documents pursuant to the DGCL, and (iii) compliance with the HSR Act; provided
that the Company makes no representation with respect to such of the foregoing
as are required by reason of the regulatory status of Parent or any of its
subsidiaries or facts specifically pertaining to any of them.
SECTION 4.5. SEC Reports and Financial Statements.
(a) Since January 1, 1996, the Company has filed with the SEC
all forms, reports, schedules, registration statements and definitive proxy
statements required to be filed by the Company with the SEC (as they have been
amended since the time of their filing, and including any documents filed as
exhibits thereto, collectively, the "SEC Reports") and has heretofore made
available to Parent complete and correct copies of all such forms, reports,
schedules, registration statements, and proxy statements. As of their respective
dates, the SEC Reports (including but not limited to any financial statements or
schedules included or incorporated by reference therein) complied as to form in
all material respects with the requirements of the Exchange Act or the
Securities Act of 1933, as amended (the "Securities Act"), and the rules and
regulations of the SEC promulgated thereunder applicable, as the case may be, to
such SEC Reports, and none of the SEC Reports contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(b) The (i) consolidated balance sheets as of December 31,
1997 and 1996 and the consolidated statements of operations, common
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1997 (including the related notes and schedules thereto) of
the Company contained in the Company's Form 10-K, as amended prior to the date
hereof, for the fiscal year ended December 31, 1997, and (ii) the unaudited
consolidated balance sheet as of June 30, 1998 and the unaudited consolidated
statements of operations, common stockholders' equity and cash flows for the
three- and six-month periods ended June 30, 1998 of the Company contained in the
Company's Form 10-Q for the three-month period ended June 30, 1998, in each case
present fairly in all material respects the consolidated financial position and
the consolidated results of operations and cash flows of the Company and its
consolidated subsidiaries as of the dates or for the periods presented therein
and were prepared in accordance with United States generally accepted accounting
principles ("GAAP") consistently applied during the periods involved except as
otherwise noted therein, including in the related notes (subject, in the case of
unaudited statements, to the absence of notes and to recurring audit adjustments
normal in nature and amount).
(c) Except as reflected, reserved against or otherwise
disclosed in the financial statements of the Company included in the SEC Reports
filed prior to the date of this Agreement (the "Filed Company SEC Reports") or
the notes thereto, since December 31, 1997 neither the Company nor any of its
subsidiaries has incurred any liabilities or obligations (absolute, accrued,
fixed, contingent or otherwise) other than liabilities incurred in the ordinary
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course of business consistent with past practice that would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect on
the Company.
(d) The Company has heretofore furnished to Parent a complete
and correct copy of any amendments or modifications that have not yet been filed
with the SEC to any agreements, documents or other instruments that previously
had been filed by the Company with the SEC pursuant to the Securities Act and
the rules and regulations promulgated thereunder or the Exchange Act and the
rules and regulations promulgated thereunder.
SECTION 4.6. Environmental Matters.
(a) The business and operations of the Company and its
subsidiaries comply in all material respects with all applicable Environmental
Laws. The Company and its subsidiaries have obtained all material Governmental
Permits relating to Environmental Laws necessary for the operation of their
businesses; all such material Governmental Permits are in full force and effect,
and the Company and its subsidiaries are in compliance in all material respects
with all terms and conditions of such permits. Neither the Company nor any of
its subsidiaries is subject to any investigation by, order from or claim by any
person (including without limitation any Governmental Entity or prior owner or
operator of any of the Company Property) respecting (i) any Environmental Law,
(ii) any Remedial Action or (iii) any claim arising from the Release or
threatened Release of any Hazardous Materials into the environment, except for
any of the foregoing that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company. Neither
the Company nor any of its subsidiaries is subject to any judicial or
administrative proceeding, order, judgment, decree or settlement alleging or
addressing a violation of or liability under any Environmental Law, except for
such proceedings, orders, judgments, decrees or settlements that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company.
(b) Neither the Company nor any of its subsidiaries has (i)
reported a Release of a Hazardous Materials pursuant to Section 103(a) of
CERCLA, or any state equivalent; (ii) filed a notice pursuant to Section 103(c)
of CERCLA; or (iii) filed any notice under any applicable Environmental Law
reporting a violation of any applicable Environmental Law; except for any of the
foregoing that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company. There is not now with
respect to the operations of the Company or any of its subsidiaries, nor to the
best knowledge of the Company has there ever been, into, on or under any Company
Property, or into, on or under any other properties, including landfills, in
which Hazardous Materials have been disposed by the Company or any of its
subsidiaries, (A) any Release, (B) any treatment, recycling, storage or disposal
of any Hazardous Materials, or (C) any underground storage tank, surface
impoundment, landfill, leachfield or waste pile, except for such events that
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company.
(c) To the knowledge of the Company, any asbestos-containing
material or presumed asbestos-containing material that is on or part of any
Company Property does not violate any currently applicable Environmental Law in
any material respect. None of the
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products manufactured, distributed or sold by the Company or any of its
subsidiaries contained asbestos or asbestos-containing material other than for
any such manufacturing, distributions or sales that would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect on
the Company.
(d) For purposes of this Section:
(i) "Company Property" means any real or personal property,
plant, building, facility, structure, underground storage tank,
equipment or unit, or other asset now or, to the Company's knowledge,
previously, owned, leased or operated by the Company or any of its
present or, to the Company's knowledge as of the date hereof past,
subsidiaries.
(ii) "CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act, as amended, and any regulations
promulgated thereunder.
(iii) "Environmental Law" means all federal, state and local
laws or regulations relating to or addressing the environment, health
or safety, including but not limited to CERCLA, OSHA and RCRA and any
state equivalent thereof.
(iv) "Governmental Permits" means any permits, licenses,
certificates, orders, consents, authorizations, franchises and other
approvals from, or required by, any Governmental Entity that are used
by, or are necessary to own and to operate, the business of the Company
and its subsidiaries as currently configured and operated.
(v) "OSHA" means the Occupational Safety and Health Act, as
amended, and any regulations promulgated thereunder.
(vi) "Hazardous Materials" means, collectively, (A) any
petroleum or petroleum products, flammable explosives, radioactive
materials, asbestos in any form that is or could become friable, urea
formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing polycholorinated biphenyls in
excess of 50 parts per million, and radon gas; and (B) any chemicals,
materials, substances or wastes that are defined as or included in the
definition of "hazardous materials," "hazardous wastes" or "toxic
substances" under applicable Environmental Laws.
(vii) "RCRA" means the Resource Conservation and Recovery
Act, as amended, and any regulations promulgated thereunder.
(viii) "Release" means release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching
or migration of any Hazardous Materials into the environment or into or
out of any Company Property, including the movement of any Hazardous
Materials through or in the air, soil, surface water, groundwater or
Company Property.
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(ix) "Remedial Action" means all actions required to (a)
clean up, remove, treat or in any other way remediate any Hazardous
Material; (b) prevent the release of Hazardous Materials so that they
do not migrate or endanger or threaten to endanger public health or
welfare or the environment; or (c) perform studies, investigations and
care related to any such Hazardous Material.
SECTION 4.7. Compliance with Applicable Laws. Except with respect
to Environmental Laws, which are covered exclusively in Section 4.6, the Company
and its subsidiaries hold all permits, licenses, variances, exemptions, orders
and approvals of all Governmental Entities (the "Company Permits") as are
necessary to conduct their respective businesses in the manner currently
conducted, except for any such Company Permits the failure of which to have
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company. The Company and its subsidiaries are in
compliance with the terms of the Company Permits, except for such failures to be
in compliance that would not, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect on the Company. Except with respect
to Environmental Laws that are covered in Section 4.6, the business operations
of the Company and its subsidiaries have been conducted in compliance with all
laws, ordinances and regulations of any Governmental Entity, except for
violations that could not, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect on the Company.
SECTION 4.8. Change of Control. The total amounts payable to the
executives identified in Section 4.8 of the Company Disclosure Schedule
(excluding payments to such executives in respect of their vested options which
are listed in Section 4.2 of the Company Disclosure Schedule), as a result of
the transactions contemplated by this Agreement and/or any subsequent employment
termination (including any cash-out or acceleration of options and restricted
stock and any "gross-up" payments with respect to any of the foregoing), based
on the Offer Price being $31.00, will not exceed the amount set forth on such
schedule (subject to the adjustments specified therein).
SECTION 4.9. Litigation. There is no suit, claim, action,
proceeding or investigation pending or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries, which would,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company or would reasonably be expected to prevent or
materially delay the consummation of the transactions contemplated by this
Agreement. Neither the Company nor any of its subsidiaries is subject to any
outstanding order, writ, injunction or decree which, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect on the
Company or would reasonably be expected to prevent or materially delay the
consummation of the transactions contemplated hereby. This Section 4.9 does not
pertain to any matters to the extent arising out of this Agreement or the
transactions contemplated hereby.
SECTION 4.10. Information. None of the information supplied by the
Company in writing specifically for inclusion or incorporation by reference in
(i) the Offer Documents, (ii) the Proxy Statement or (iii) any other document to
be filed with the SEC or any other Governmental Entity in connection with the
transactions contemplated by this Agreement (the
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"Other Filings") will, at the respective times filed with the SEC or other
Governmental Entity and, in addition, in the case of the Proxy Statement, at the
date it or any amendment or supplement is mailed to stockholders and at the time
of the Special Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements made therein, in light of the circumstances under which
they were made, not misleading. The Proxy Statement will comply as to form in
all material respects with the provisions of the Exchange Act and the rules and
regulations thereunder, except that no representation is made by the Company
with respect to statements made therein based on information supplied by Parent
or the Purchaser in writing specifically for inclusion in the Proxy Statement.
SECTION 4.11. Certain Approvals. The Company Board has taken any
and all necessary and appropriate action to render inapplicable to the Offer,
the Merger and the transactions contemplated by this Agreement the provisions of
Section 203 of the DGCL. No other state takeover statute or similar statute or
regulation applies to the Offer, the Merger or the other transactions
contemplated by this Agreement.
SECTION 4.12. Employee Benefit Plans.
(a) Section 4.12(a) of the Company Disclosure Schedule
includes a complete list of all material employee benefit plans, programs, and
other arrangements providing benefits or compensation to any employee or former
employee or beneficiary or dependent thereof, whether or not written, and
whether covering one person or more than one person, sponsored or maintained by
the Company or any of its subsidiaries or to which the Company or any of its
subsidiaries contributes or is obligated to contribute ("Plans"). Without
limiting the generality of the foregoing, the term "Plans" includes all employee
welfare benefit plans within the meaning of Section 3(l) of the Employee
Retirement Income Security Act of 1974, as amended, and the regulations
thereunder ("ERISA") and all employee pension benefit plans within the meaning
of Section 3(2) of ERISA and all other material employee benefit, employment,
bonus, incentive, profit sharing, thrift, compensation, restricted stock,
retirement, savings, deferred compensation, stock purchase, stock option,
termination, severance, change in control, fringe benefit and other similar
plans, programs, agreements or arrangements.
(b) With respect to each Plan, the Company has made available
to Parent a true, correct and complete copy of: (i) each writing constituting a
part of such Plan, including without limitation all plan documents, benefit
schedules, trust agreements, and insurance contracts and other funding vehicles;
(ii) the most recent Annual Report (Form 5500 Series) and accompanying schedule,
if any; (iii) the current summary plan description, if any; (iv) the most recent
annual financial report, if any; (v) the most recent actuarial report, if any;
and (vi) the most recent determination letter from the Internal Revenue Service
(the "IRS"), if any. Except as specifically provided in the foregoing documents
made available to Parent, there are no amendments to or interpretations of any
Plan that have been adopted or approved nor has the Company or any of its
subsidiaries undertaken to make any such amendments or interpretations.
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(c) Section 4.12(c) of the Company Disclosure Schedule
identifies each Plan that is intended to be a "qualified plan" within the
meaning of Section 401(a) of the Internal Revenue Code of 1986, as amended, and
the Treasury Regulations thereunder (the "Code") ("Qualified Plans"). The IRS
has issued a favorable determination letter with respect to each Qualified Plan
that has not been revoked, and there are no existing circumstances nor any
events that have occurred that could adversely affect the qualified status of
any Qualified Plan or the related trust. Schedule 4.12(c) identifies each Plan
which is intended to meet the requirements of Code Section 501(c)(9), and each
such plan meets such requirements and provides no disqualified benefits (as such
term is defined in Code Section 4976(b)).
(d) All contributions required to be made to any Plan by
applicable law or regulation or by any plan document or other contractual
undertaking, and all premiums due or payable with respect to insurance policies
funding any Plan, for any period through the date hereof have been timely made
or paid in full or, to the extent not required to be made or paid on or before
the date hereof, have been fully reflected in the financial statements of the
Company included in the SEC Reports to the extent required under generally
accepted accounting principles.
(e) The Company and each of its subsidiaries have complied,
and are now in compliance, in all respects with all provisions of ERISA and
(with respect to any Plan) the Code and all laws and regulations applicable to
the Plans, other than any instances of non-compliance that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company. There is not now, nor do any circumstances exist
that could give rise to, any requirement for the posting of security with
respect to a Plan or the imposition of any lien on the assets of the Company or
any of its subsidiaries under ERISA or the Code. No prohibited transaction has
occurred with respect to any Plan.
(f) With respect to each Plan that is subject to Title IV or
Section 302 of ERISA or Section 412 or 4971 of the Code: (i) there does not
exist any accumulated funding deficiency within the meaning of Section 412 of
the Code or Section 302 of ERISA, whether or not waived; (ii) the fair market
value of the assets of such Plan equals or exceeds the actuarial present value
of all accrued benefits under such Plan (whether or not vested); (iii) no
reportable event within the meaning of Section 4043(c) of ERISA for which the
30-day notice requirement has not been waived has occurred, and the consummation
of the transactions contemplated by this agreement will not result in the
occurrence of any such reportable event; (iv) all premiums to the Pension
Benefit Guaranty Corporation ("PBGC") have been timely paid in full; (v) no
liability (other than for premiums to the PBGC) under Title IV of ERISA has been
or is expected to be incurred by the Company; and (vi) the PBGC has not
instituted proceedings to terminate any such Plan and, to the Company's
knowledge, no condition exists that presents a risk that such proceedings will
be instituted or which would constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any such
Plan.
(g) Except as set forth in Schedule 4.12(g) of the Company
Disclosure Schedule: (i) no Plan is a "multiemployer plan" within the meaning of
Section 4001(a)(3) of ERISA (a "Multiemployer Plan") or a plan that has two or
more contributing sponsors at least
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two of whom are not under common control, within the meaning of Section 4063 of
ERISA (a "Multiple Employer Plan"); (ii) none of the Company and its
subsidiaries, nor any entity, trade or business (whether or not incorporated)
which is or ever has been under common control, or which is or ever has been
treated as a single employer, with the Company or any of its subsidiaries under
Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA (an
"ERISA Affiliate"), has, at any time during the last six years, contributed to
or been obligated to contribute to any Multiemployer Plan or Multiple Employer
Plan; and (iii) none of the Company and its subsidiaries nor any ERISA
Affiliates has incurred any withdrawal liability as defined in Part I of
Subtitle E of Title IV of ERISA ("Withdrawal Liability") as a result of a
complete or partial withdrawal from any Multiemployer Plan or Multiple Employer
Plan that has not been satisfied in full. With respect to each Plan that is a
Multiemployer Plan or a Multiple Employer Plan, except as set forth in Schedule
4.12(g), (A) if the Company or any of its subsidiaries or any of their
respective ERISA Affiliates were to experience a withdrawal or partial
withdrawal from such plan, no Withdrawal Liability would be incurred that would,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company, and (B) none of the Company and its subsidiaries,
nor any of their respective ERISA Affiliates has received any notification, nor
has any reason to believe, that any such Plan is in reorganization, has been
terminated, is insolvent, or may reasonably be expected to be in reorganization,
to be insolvent, or to be terminated. There does not now exist, nor, to the
knowledge of the Company as of the date hereof, do any circumstances exist that
are reasonably likely to result in, any liability under (i) Title IV of ERISA,
(ii) Section 302 of ERISA, (iii) Sections 412 and 4971 of the Code, (iv) the
continuation coverage requirements of Sections 601 et seq. of ERISA and Section
4980D of the Code, or (v) to the knowledge of the Company as of the date hereof,
corresponding or similar provisions of foreign laws or regulations, other than a
liability that arises solely out of, or relate solely to, the Plans, that would
be a liability of the Company or any of its subsidiaries following the Closing,
in each case, that would, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company. Without limiting the
generality of the foregoing, none of the Company, its subsidiaries nor any ERISA
Affiliate of the Company or any of its subsidiaries has engaged in any
transaction described in Section 4069 or Section 4204 or 4212 of ERISA.
(h) Except as disclosed on Schedule 4.12 of the Company
Disclosure Schedule, neither the Company nor any of its subsidiaries has any
liability for life, health, medical or other welfare benefits to former
employees or beneficiaries or dependents thereof, except for health continuation
coverage as required by Section 4980B of the Code or Part 6 of Title I of ERISA
and at no expense to the Company and its subsidiaries. The Company and each of
its subsidiaries has reserved the right to amend, terminate or modify at any
time all plans or arrangements providing for retiree health or life insurance
coverage.
(i) There are no pending or threatened claims (other than
claims for benefits in the ordinary course), lawsuits or arbitrations which have
been asserted or instituted against the Plans, any fiduciaries thereof with
respect to their duties to the Plans or the assets of any of the trusts under
any of the Plans which could reasonably be expected to result in liability of
the Company or any of its subsidiaries to the PBGC, the Department of Treasury,
the Department
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of Labor or any Multiemployer Plan that would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company.
(j) Except as disclosed on Schedule 4.12 of the Company
Disclosure Schedule, neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will (either alone or
in conjunction with any other event) result in, cause the accelerated vesting or
delivery of, or increase the amount or value of, any payment or benefit to any
employee, officer or director of the Company or any of its subsidiaries. Without
limiting the generality of the foregoing, except as disclosed on Schedule 4.12
of the Company Disclosure Schedule, no amount paid or payable by the Company or
any of its subsidiaries in connection with the transactions contemplated hereby
(either solely as a result thereof or as a result of such transactions in
conjunction with any other event) will be an "excess parachute payment" within
the meaning of Section 280G of the Code.
SECTION 4.13. Taxes.
(a) The Company and each of its subsidiaries has filed all
federal, state, and all material county, local and foreign income Tax Returns
(as hereinafter defined) required to be filed by it, and all other material Tax
Returns required to be filed by it, and has paid or caused to be paid all Taxes
(as hereinafter defined) shown as due and payable on such Tax Returns in respect
of the periods covered by such returns and has made adequate provision in the
Company's financial statements for payment of all Taxes payable in respect of
all taxable periods or portions thereof ending on or before the date hereof,
except where the failures to so file or pay or make adequate provision would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company. Section 4.13 of the Company Disclosure Schedule
lists the periods through which the material Tax Returns required to be filed by
the Company or any of its subsidiaries have been examined by the IRS or other
appropriate taxing authority, or the period during which any assessments may be
made by the IRS or other appropriate taxing authority has expired. All material
deficiencies and assessments asserted as a result of such examinations or other
audits by federal, state, local or foreign taxing authorities have been paid,
fully settled or adequately provided for in the Company's financial statements,
and no issue or claim has been asserted in writing for Taxes by any taxing
authority for any prior period, the adverse determination of which would,
individually or in the aggregate, reasonably be expected to result in a
deficiency which could have a Material Adverse Effect on the Company, other than
those heretofore fully paid or fully provided for in the Company's financial
statements. There are no outstanding agreements or waivers extending the
statutory period of limitation applicable to any material Tax Return or any
material Taxes of the Company or any of its subsidiaries. Neither the Company
nor any of its subsidiaries has filed a consent pursuant to Section 341(f) of
the Code or agreed to have Section 341(f)(2) of the Code apply to any
disposition of a subsection (f) asset (as such term is defined in Section
341(f)(2) of the Code) owned by the Company or any of its subsidiaries. Neither
the Company nor any of its subsidiaries (i) has been during the preceding five
(5) years a member of an affiliated group filing consolidated returns for
federal income tax purposes (except for the group of which the Company is the
common parent), (ii) has any liability for the Taxes of any person (other than
the Company and its subsidiaries) under Treas. Reg. Section 1.1502-6 (or any
similar provision of state, local or foreign law)
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or (iii) is a party to a Tax sharing or Tax indemnity agreement or any other
agreement of a similar nature that remains in effect. The Company and each of
its subsidiaries have made all material estimated income tax deposits and all
other material required tax payments or deposits (including withholding taxes)
and have complied for all prior periods in all material respects with the tax
provisions of all applicable federal, state, local and other laws. The Company
has made available to Parent and the Purchaser correct and complete copies of
its federal income tax returns for the last three taxable years and has made
available such other tax returns as requested by Parent and the Purchaser.
(b) For purposes of this Agreement, the term "Taxes" means all
taxes, charges, fees, levies or other assessments, including, without
limitation, income, gross receipts, excise, property, sales, transfer, license,
payroll, withholding, capital stock and franchise taxes, imposed by the United
States or any state, local or foreign government or subdivision or agency
thereof, including any interest, penalties or additions thereto. For purposes of
this Agreement, the term "Tax Return" means any report, return or other
information or document required to be supplied to a taxing authority in
connection with Taxes.
SECTION 4.14. Absence of Certain Changes. Since December 31, 1997
(i) there have not been any changes or effects prior to the date hereof that
would, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company; (ii) the businesses of the Company and
each of its subsidiaries have been conducted only in the ordinary course and in
a manner consistent with past practice; and (iii) there has not been any
revaluation by the Company or any of its subsidiaries of any material assets,
including but not limited to writing down the value of inventory or writing off
notes or accounts receivable other than in the ordinary course of business.
SECTION 4.15. Labor Matters. Except as disclosed in the Filed
Company SEC Reports or on Section 4.15 of the Company Disclosure Schedule, no
employees of the Company or of any of its subsidiaries are represented by any
labor union or any collective bargaining organization. No labor organization or
group of employees of the Company or any of its subsidiaries has made a pending
demand for recognition or certification, and there are no representation or
certification proceedings or petitions seeking a representation proceeding
presently pending or threatened to be brought or filed, with the National Labor
Relations Board or any other labor relations tribunal or authority, which would,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company.
SECTION 4.16. Relationships with Customers, Suppliers,
Distributors and Sales Representatives. As of the date hereof, since December
31, 1997 the Company has not received written notice that any customer,
supplier, distributor or sales representative intends to cancel, terminate or
otherwise modify its relationship with the Company or any subsidiary which
would, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company.
SECTION 4.17. Contracts. Section 4.17 of the Company Disclosure
Schedule lists all written or oral contracts, agreements, guarantees or leases
(each a "Contract") to which
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the Company or any of its subsidiaries is a party and which fall within any of
the following categories: (i) material joint venture, partnership and similar
agreements, (ii) Contracts containing covenants purporting to limit the freedom
of the Company or any of its subsidiaries to compete in any line of business in
any geographic area or to hire or solicit any individual or group of
individuals, (iii) Contracts which after the Effective Time would have the
effect of limiting the freedom of Parent or its subsidiaries (other than the
Company and its subsidiaries) to compete in any line of business in any
geographic area or to hire any individual or group of individuals, (iv)
Contracts which contain minimum purchase conditions or requirements or other
terms that restrict or limit the purchasing relationships of the Company or any
of its subsidiaries and which have or had a term in excess of one year when
executed, (v) Contracts relating to any outstanding commitment for capital
expenditures in excess of $300,000, (vi) indentures, mortgages, promissory
notes, loan agreements, guarantees of amounts in excess of $100,000, letters of
credit or other agreements or instruments of the Company or any of its
subsidiaries or commitments for the borrowing or the lending of amounts in
excess of $100,000 by the Company or any of its subsidiaries or providing for
the creation of any charge, security interest, encumbrance or lien upon any of
the assets of the Company or any of its subsidiaries (vii) Contracts with or for
the benefit of any affiliate of the Company (other than subsidiaries of the
Company), (viii) any employment or consulting agreement requiring payments in
the aggregate in excess of $100,000; and (ix) any Contract that would reasonably
be expected to prohibit or materially delay the consummation of the transactions
contemplated by this Agreement. All of the Contracts required to be disclosed by
this Section 4.17 are valid and binding obligations of the Company or a
subsidiary of the Company and, to the Company's knowledge as of the date hereof,
the valid and binding obligation of each other party thereto, except such
Contracts which if not so valid and binding would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company. Neither the Company nor any of its subsidiaries nor, to the knowledge
of the Company, any other party thereto is in violation of or in default in
respect of, nor has there occurred an event or condition which with the passage
of time or giving of notice (or both) could constitute a default under, any such
Contract except such violations or defaults under such Contracts which,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on the Company.
SECTION 4.18. Rights Agreement. The Company and the Company Board
have authorized all necessary action to amend the Rights Agreement (without
redeeming the Rights) so that none of the execution or delivery of this
Agreement, the making of the Offer, the acquisition of Common Shares pursuant to
the Offer or the consummation of the Merger, in each case in accordance with the
terms of this Agreement, will (i) cause any Rights issued pursuant to the Rights
Agreement to become exercisable or to separate from the stock certificates to
which they are attached, (ii) cause Parent, the Purchaser or any of their
Affiliates or Associates to be an Acquiring Person (as such term is defined in
the Rights Agreement) or (iii) trigger other provisions of the Rights Agreement,
including giving rise to a Distribution Date (as such term is defined in the
Rights Agreement), and such amendment shall be in full force and effect from and
after the date hereof.
SECTION 4.19. Affiliated Transactions. Neither the Company nor any
of its subsidiaries nor any of their respective officers, directors, employees
or affiliates (nor any
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individual related by blood, marriage or adoption to any such individual), is a
party to any agreement, contract, commitment, transaction or understanding with
or binding upon the Company or any of its subsidiaries or any of their
respective assets or has engaged in any transaction with any of the foregoing
within the last twelve months except for customary payments to employees,
officers or directors in the ordinary course of business consistent with past
practice for services rendered in their capacity as employees, officers or
directors.
SECTION 4.20. Brokers. Except for the engagement of CSFB, none of
the Company, any of its subsidiaries, or any of their respective officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finder's fees in connection
with the transactions contemplated by this Agreement. The Company has previously
delivered to Parent a copy of the Company's engagement letter with CSFB. The
aggregate Merger Fees owed or which will be owing by the Company and its
subsidiaries in connection with the Offer, the Merger and the transactions
contemplated by this Agreement will not exceed the amount set forth in Section
4.20 of the Company Disclosure Schedule. "Merger Fees" means all fees and
expenses paid or payable by or on behalf of the Company or any of its
subsidiaries to all attorneys, accountants, investment bankers, financial
advisors and other experts and advisors incident to negotiation, preparation,
execution and consummation of this Agreement and the transactions contemplated
hereby.
SECTION 4.21. Opinion of CSFB. The Company has received the
opinion of CSFB to the effect (and the Company will receive a written opinion of
CSFB confirming) that, as of the date of this Agreement, the consideration to be
received by the holders of Common Shares (other than Parent or any of its
affiliates) pursuant to the Offer and the Merger is fair to such holders from a
financial point of view. The Company has previously delivered, or will deliver
promptly upon receipt, to Parent a true and correct copy of any such written
opinion.
SECTION 4.22. Condition of Assets. The properties and assets,
including the equipment, supplies and other consumables, owned, leased or used
by the Company and its subsidiaries in the operation of their respective
business are in good operating condition and repair, ordinary wear and tear
excepted, are reasonably suitable for the purposes for which they are used, are
reasonably adequate and sufficient for the Company's and its subsidiaries'
current operations and are directly related to the business of the Company and
its subsidiaries, in each case except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER
Parent and the Purchaser represent and warrant to the Company as
follows:
SECTION 5.1. Organization and Qualification. Parent is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New Jersey and each subsidiary of Parent is duly organized,
validly existing and in good standing under the laws of
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the jurisdiction of its organization, except where the failure to be so
organized, existing or in good standing would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Affect on Parent.
The Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Parent and each of its
subsidiaries (including the Purchaser) has the requisite power and authority to
own, operate or lease its properties and to carry on its business as it is now
being conducted, and is duly qualified or licensed to do business, and is in
good standing, in each jurisdiction in which the nature of its business or the
properties owned, operated or leased by it makes such qualification, licensing
or good standing necessary, except where the failure to have such power or
authority, or the failure to be so qualified, licensed or in good standing,
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on Parent. The term "Material Adverse Effect on Parent,"
as used in this Agreement, means any change or effect that is or would
reasonably be expected to have a material adverse effect on the business,
assets, financial condition or results of operations of Parent and its
subsidiaries taken as a whole, other than any change or effect to the extent
attributable to (i) the economy or the securities markets in general, (ii) this
Agreement or the transactions contemplated hereby or the announcement thereof or
(iii) Parent's industry in general, and not specifically relating to Parent or
its subsidiaries.
SECTION 5.2. Authority Relative to this Agreement. Each of Parent
and the Purchaser has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by Parent and the Purchaser and the
consummation by Parent and the Purchaser of the transactions contemplated hereby
have been duly and validly authorized and approved by the respective Boards of
Directors of Parent and the Purchaser and by Parent as sole stockholder of the
Purchaser and no other corporate proceedings on the part of Parent or the
Purchaser are necessary to authorize or approve this Agreement or to consummate
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by each of Parent and the Purchaser and, assuming the due and valid
authorization, execution and delivery by the Company, constitutes a valid and
binding obligation of each of Parent and the Purchaser enforceable against each
of them in accordance with its terms.
SECTION 5.3. No Conflict; Required Filings and Consents.
(a) Assuming (i) the filings required under the HSR Act are
made and the waiting periods thereunder have terminated or have expired, (ii)
the requirements of the Exchange Act and any applicable state securities, "blue
sky" or takeover law are met and (iii) the filing of the certificate of merger
and other appropriate merger documents, if any, as required by the DGCL, is
made, none of the execution and delivery of this Agreement by Parent or the
Purchaser, the consummation by Parent or the Purchaser of the transactions
contemplated hereby or compliance by Parent or the Purchaser with any of the
provisions hereof will (i) conflict with or violate the organizational documents
of Parent or the Purchaser, (ii) conflict with or violate any statute,
ordinance, rule, regulation, order, judgment, decree, permit or license
applicable to Parent or the Purchaser or any of their subsidiaries, or by which
any of them or any of their respective properties or assets may be bound or
affected, or (iii) result in a violation or breach of or constitute a default
(or an event which with notice or lapse of time or both would become a default)
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under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in any loss of any benefit, the triggering of any
payment by, or the increase in any other obligation of, Parent or any of its
subsidiaries or the creation of any Lien on any of the properties or assets of
Parent or any of its subsidiaries pursuant to any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Parent or the Purchaser or any of their
subsidiaries is a party or by which Parent or the Purchaser or any of their
subsidiaries or any of their respective properties or assets may be bound or
affected, other than, in the case of clause (ii) or (iii) above, any such
violations that, individually or in the aggregate, would not prevent or
materially delay the consummation of the transactions contemplated hereby or
thereby.
(b) None of the execution and delivery of this Agreement by
Parent and the Purchaser, the consummation by Parent and the Purchaser of the
transactions contemplated hereby or thereby or compliance by Parent and the
Purchaser with any of the provisions hereof will require any Consent of any
Governmental Entity, except for (i) compliance with any applicable requirements
of the Exchange Act and any state securities "blue sky" or takeover law, (ii)
the filing of a certificate of merger pursuant to the DGCL, and (iii) compliance
with the HSR Act; provided that Parent and Purchaser make no representation with
respect to such of the foregoing as are required by reason of the regulatory
status of the Company or any of its subsidiaries or facts specifically
pertaining to any of them.
SECTION 5.4. Information. None of the information supplied or to
be supplied by Parent and the Purchaser in writing specifically for inclusion or
incorporation by reference in (i) the Schedule 14D-9, (ii) the Proxy Statement
or (iii) the Other Filings will, at the respective times filed with the SEC or
such other Governmental Entity and, in addition, in the case of the Proxy
Statement, at the date it or any amendment or supplement is mailed to
stockholders and at the time of the Special Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading.
SECTION 5.5. Financing. Parent has, and will have at the closing
of the Offer and the Effective Time, available to it sufficient funds to
consummate the transactions contemplated by this Agreement, and will cause the
Purchaser to have sufficient funds available to consummate the Offer and the
Merger and the transactions contemplated hereby.
ARTICLE VI
COVENANTS
SECTION 6.1. Conduct of Business of the Company. Except as
expressly contemplated by this Agreement, or otherwise with the prior written
consent of Parent, during the period from the date of this Agreement to the
Effective Time, the Company will, and will cause each of its subsidiaries to,
conduct its operations only in the ordinary and usual course of business
consistent with past practice and will use its reasonable best efforts, and will
cause each of its subsidiaries to use its reasonable best efforts, to preserve
intact the business organization of
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the Company and each of its subsidiaries, to keep available the services of its
and their present officers and key employees, and to preserve the good will of
those having business relationships with it, including, without limitation,
maintaining satisfactory relationships with licensors, suppliers, distributors,
customers and others having business relationships with the Company. Without
limiting the generality of the foregoing, and except as otherwise expressly
contemplated by this Agreement, the Company will not, and will not permit any of
its subsidiaries to, prior to the Effective Time, without the prior written
consent of Parent:
(a) adopt any amendment to its Certificate of Incorporation or
By-Laws or comparable organizational documents or adopt a plan of merger,
consolidation, reorganization, dissolution or liquidation;
(b) sell, pledge or encumber any stock owned by it in any of
its subsidiaries;
(c) issue, reissue or sell, or authorize the issuance,
reissuance or sale of, (A) additional shares of capital stock of any class, or
securities convertible into capital stock of any class, or any rights, warrants
or options to acquire any convertible securities or capital stock, other than
the issuance of Common Shares (and the related Rights) pursuant to the exercise
of Options outstanding on the date hereof (or, if a Distribution Date (as
defined in the Rights Agreement) shall occur as a result of any action by a
party other than Parent or the Purchaser, the Rights) or (B) any other
securities in respect of, in lieu of, or in substitution for, Common Shares
outstanding on the date hereof (other than the Rights if a Distribution Date
shall occur under the aforesaid circumstances);
(d) declare, set aside or pay any dividend or other
distribution (whether in cash, securities or property or any combination
thereof) in respect of any class or series of its capital stock other than
between any of the Company and any of its wholly-owned subsidiaries;
(e) split, combine, subdivide, reclassify or redeem, purchase
or otherwise acquire, or propose to redeem or purchase or otherwise acquire, any
shares of its capital stock, or any of its other securities;
(f) except as set forth in Section 6.1 of the Company
Disclosure Schedule: hire any employee with aggregate annual compensation and
benefits in excess of $100,000, or increase the compensation or fringe benefits
payable or to become payable to its directors, officers or employees (whether
from the Company or any of its subsidiaries), or pay or award any benefit not
required by any existing plan or arrangement to any officer, director or
employee (including, without limitation, the granting of stock options, stock
appreciation rights, shares of restricted stock or performance units pursuant to
the Stock Plans or otherwise), or make any payment described in Section 4.8 of
this Agreement in excess of the amount set forth in Section 4.8 of the Company
Disclosure Schedule (subject to the adjustments specified therein), or grant any
severance or termination pay to any officer, director or other employee of the
Company or any of its subsidiaries (other than as required by existing
agreements or policies described in the Company Disclosure Schedule), or enter
into any employment or severance agreement with, any director, officer or other
employee of the Company or any of its subsidiaries or establish,
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adopt, enter into, amend or waive any performance or vesting criteria or
accelerate vesting or exercisability under any Plan for the benefit or welfare
of any current or former directors, officers or employees of the Company or its
subsidiaries or their beneficiaries or dependents, except, in each case, to the
extent required by applicable law or regulation or by the terms of any
collective bargaining agreement; provided that the Company may accelerate the
vesting of Options at any time prior to the Effective Time;
(g) acquire, mortgage, encumber, sell, lease, license or
dispose of any assets which are material to the Company or securities, except
pursuant to existing contracts or commitments in the ordinary course of business
consistent with past practice, or enter into any commitment or transaction
outside the ordinary course of business consistent with past practice other than
transactions between a wholly-owned subsidiary of the Company and the Company or
another wholly-owned subsidiary of the Company;
(h) (i) incur, assume or pre-pay any long-term debt or incur
or assume any short-term debt, except that the Company and its subsidiaries may
incur, assume or pre-pay debt in the ordinary course of business in amounts and
for purposes consistent with past practice under existing lines of credit, (ii)
assume, guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other person
except in the ordinary course of business consistent with past practice, (iii)
pay, discharge or satisfy any claims, liabilities or obligations (absolute,
accrued, contingent or otherwise), except in the ordinary course of business
consistent with past practice or pursuant to existing contracts or commitments
and in accordance with their terms, (iv) make any loans, advances or capital
contributions to, or investments in, any other person, except for loans,
advances, capital contributions or investments between any wholly-owned
subsidiary of the Company and the Company or another wholly-owned subsidiary of
the Company, (v) take any of the actions set forth in Section 6.1(h) of the
Company Disclosure Schedule, (vi) accelerate or delay in any material respect
collection of notes or accounts receivable in advance of or beyond their regular
due dates or the dates when the same would have been collected in the ordinary
course of business consistent with past practice, (vii) accelerate or delay in
any material respect payment of accounts payable beyond or in advance of its due
date or the date such liability would have been paid in the ordinary course of
business consistent with past practice, or (viii) vary the Company's inventory
practices in any material respect from the Company's past practices;
(i) settle or compromise any suit or claim or threatened suit
or claim if the amount involved in such settlement or compromise is greater than
$300,000 or if the aggregate amount involved for all such settlements and
compromises is in excess of $500,000;
(j) other than in the ordinary course of business consistent
with past practice, (i) modify, amend or terminate any contract, (ii) waive,
release, relinquish or assign any contract (or any of the Company's rights
thereunder), right or claim, or (iii) cancel or forgive any indebtedness owed to
the Company or any of its subsidiaries;
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(k) make any material tax election not required by law or
settle or compromise any material tax liability, except in the case of any such
liability to the extent reserved for on the Company's financial statements;
(l) 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 consistent with past practice;
(m) acquire (by merger, consolidation or acquisition of stock
or assets) any corporation, partnership or other business organization or
division thereof;
(n) enter into any contract or agreement other than in the
ordinary course of business consistent with past practice;
(o) except as may be required as a result of a change in law
or in generally accepted accounting principles, make any change in its methods
of accounting, including tax accounting policies and procedures;
(p) take, or commit to take, any action that would or is
reasonably likely to result in any of the Tender Offer Conditions or any of the
conditions to the Merger set forth in Article VII not being satisfied;
(q) agree in writing or otherwise to take any of the foregoing
actions prohibited under this Section 6.1.
SECTION 6.2. Access to Information. From the date of this
Agreement until the Effective Time, the Company will, and will cause its
subsidiaries, and each of their respective officers, employees, counsel,
advisors and representatives (collectively, the "Company Representatives") to,
give Parent and the Purchaser and their respective officers, employees, counsel,
advisors and representatives (collectively, the "Parent Representatives")
reasonable access, during normal business hours, to the offices and other
facilities and to the books and records of the Company and its subsidiaries and
will cause the Company Representatives and the Company's subsidiaries to furnish
Parent, the Purchaser and the Parent Representatives with such financial and
operating data and such other information with respect to the business and
operations of the Company and its subsidiaries as Parent and the Purchaser may
from time to time reasonably request. The Company shall furnish promptly to
Parent and the Purchaser a copy of each report, schedule, registration statement
and other document filed by it or its subsidiaries during such period pursuant
to the requirements of federal or state securities laws. Parent and the
Purchaser agree that any information furnished pursuant to this Section 6.2 will
be subject to the provisions of the letter agreement dated September 24, 1998
between Parent and the Company (the "Confidentiality Agreement").
SECTION 6.3. Efforts.
(a) Subject to the terms and conditions provided herein, each
of the Company, Parent and the Purchaser shall, and shall cause each of its
subsidiaries to, cooperate
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and use reasonable best efforts to make, or cause to be made, all filings
necessary or proper under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement, including but not
limited to cooperation in the preparation and filing of the Offer Documents, the
Schedule 14D-9, the Proxy Statement and any required filings under the HSR Act
(which filings under the HSR Act shall be made by the parties within five
business days after the date hereof) and any amendments to any thereof.
In addition, if at any time prior to the Effective Time any
event or circumstance relating to either the Company or Parent or the Purchaser
or any of their respective subsidiaries should be discovered by the Company or
Parent, as the case may be, that should be set forth in an amendment to the
Offer Documents or Schedule 14D-9, the discovering party will promptly inform
the other party of such event or circumstance. If at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, including the execution of additional instruments,
the proper officers and directors of each party to this Agreement shall take all
such necessary action.
(b) Each of the parties will use its reasonable best efforts
to (i) obtain as promptly as practicable all Consents of any Governmental Entity
or any other person required in connection with, and waivers of any Violations
that may be caused by, the consummation of the transactions contemplated by this
Agreement, (ii) prevent any action or proceeding by any Governmental Entity with
respect and adverse to the transactions contemplated by this Agreement, (iii)
defend any lawsuits or other proceedings challenging this Agreement or the
consummation of the transactions contemplated hereby, (iv) subject in the case
of the Company to its rights set forth in Sections 1.2(a) and 6.10(a), cause the
Tender Offer Conditions and the conditions to the Merger set forth in Article
VII to be satisfied.
(c) Except as otherwise expressly contemplated by this
Agreement, Parent will not, and will not permit any of its subsidiaries to,
during the period from the date of this Agreement to the Effective Time, without
the prior written consent of the Company take or commit to take any action that
would or is reasonably likely to result in any of the Tender Offer Conditions or
any of the conditions to the Merger set forth in Article VII not being
satisfied.
SECTION 6.4. Public Announcements. The Company, on the one hand,
and Parent and the Purchaser, on the other hand, agree to consult promptly with
each other prior to issuing any press release or otherwise making any public
statement (including statements made generally to employees or shareholders of
the Company and its subsidiaries) with respect to the Offer, the Merger and the
other transactions contemplated hereby, agree to provide to the other party for
review a copy of any such press release or statement, and shall not issue any
such press release or make any such public statement prior to such consultation
and review, unless required by applicable law or any listing agreement with a
securities exchange.
SECTION 6.5. Employee Benefit Arrangements.
(a) From and after the Effective Time, Parent will honor, or
cause to have honored, all obligations of the Company under the Plans; provided,
however, that with respect to the contracts listed in Section 6.5(d) of the
Company Disclosure Schedule, Parent shall
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not be required to pay or cause to be paid any amounts under such contracts in
excess of the amounts set forth in such Section 4.8 of the Company Disclosure
Schedule (subject to the adjustments specified therein). Notwithstanding the
foregoing, from and after the Effective Time, subject to the remaining
provisions of this Section 6.5(a), Parent or its designee may exercise any right
to amend, modify, alter or terminate any Plans, provided that any such action
shall not adversely affect the vested rights of any employees or other
beneficiaries which shall have arisen thereunder prior to such amendment,
modification, alteration or termination, and shall not affect any rights for
which the agreement of the other party or a beneficiary is required.
(b) From and after the Effective Time, Parent will, or will
cause the Surviving Corporation to, recognize the prior service with the Company
or its subsidiaries (to the extent such service was recognized by the Company or
its subsidiaries under any comparable Plan) of each employee of the Company or
any of its subsidiaries as of the Effective Time (the "Company Employees") in
connection with the Parent employee benefit plans for purposes of eligibility,
vesting and levels of benefits (but not for purposes of benefit accruals under
any defined benefit pension plan) in which such Company Employee is eligible to
participate following the Effective Time. From and after the Effective Time,
Parent will, or will cause the Surviving Corporation to (i) cause any
pre-existing conditions or limitations and eligibility waiting periods (to the
extent such limitations or waiting periods did not apply to the Company
Employees under the Plans) under any group health plans of Parent to be waived
with respect to the Company Employees and their eligible dependents and (ii)
give each Company Employee credit for the plan year in which the Effective Time
occurs towards applicable deductibles and annual out-of-pocket limits for
expenses incurred prior to the Effective Time. From and after the Effective
Time, Parent will, or will cause the Surviving Corporation, to provide severance
benefits to eligible Company Employees pursuant to the terms and conditions set
forth on Exhibit 6.5(d)(i) of the Company Disclosure Schedule.
(c) The Company will not take any action that could prevent or
impede the termination of the 1987 Stock Option Plan, the 1990 Stock Option
Plan, the 1993 Stock Option Plan, the 1998 Stock Option Plan and the Employee
Stock Purchase Plan, as any of them may have been amended, and all other Stock
Plans, and any other plans, programs or arrangements providing for the issuance
or grant of any other interest in respect of the capital stock of the Company or
any subsidiary, in each case, effective prior to the Effective Time. The Company
will use its reasonable best efforts to obtain all necessary consents so that,
after the Effective Time, holders of Options will have no rights other than the
rights of the holders of Options to receive the Cash Payment (less any required
withholding), if any, in cancellation and settlement thereof.
(d) Notwithstanding anything in this Agreement to the
contrary, (i) the Company (or Parent, if applicable) may take any of the actions
set forth in Section 6.5(d)(i) of the Company Disclosure Schedule before the
Expiration Date and (ii) the Company shall take all necessary actions,
including, without limitation, obtaining any required approvals by the Company's
Board of Directors or using reasonable best efforts to obtain any required
employee consents, in order to effectuate the items set forth in Section
6.5(d)(ii) of the Company Disclosure Schedule, upon the request of Parent and
effective prior to the date designated by Parent, and, in
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either case, such actions shall not be considered a violation of any provision
of this Agreement; provided, however, that the Company shall in no event be
required to take any of the actions set forth in Section 6.5(d)(ii) of the
Company Disclosure Schedule unless and until Parent and the Purchaser shall have
irrevocably waived all of the Tender Offer Conditions which they are permitted
to waive hereunder.
SECTION 6.6. Indemnification; Directors' and Officers' Insurance.
(a) Parent agrees that, from and after the Effective Time, all
rights to indemnification, defense and advancement of funds now existing in
favor of individuals who at or prior to the Effective Time were directors or
officers of the Company or any of its subsidiaries (the "Indemnified Parties"),
as set forth in the Certificate of Incorporation or By-Laws of the Company or
any agreements identified in Section 6.6 of the Company Disclosure Schedule,
shall survive the Merger with respect to matters existing or occurring at or
prior to the Effective Time. Parent agrees to cause the Surviving Corporation to
honor all rights to indemnification, defense and advancement of funds referred
to in the preceding sentence (including, to the extent required, providing
sufficient funding to enable the Surviving Corporation to satisfy its
obligations under the preceding sentence).
(b) Parent shall, or shall cause (including, to the extent
required, by providing sufficient funding) the Surviving Corporation to,
maintain in effect for not less than six years (subject to the last sentence of
this Section 6.6(b)) from the Effective Time the current policies of the
directors, and officers, liability insurance maintained by the Company; provided
that the Surviving Corporation may substitute therefor other policies of at
least the same coverage amounts and which contain terms and conditions not less
advantageous in the aggregate to the beneficiaries of the current policies and
provided that such substitution shall not result in any gaps or lapses in
coverage with respect to matters occurring prior to the Effective Time; and
provided, further, that the Surviving Corporation shall not be required to pay
an annual premium in excess of 200% of the last annual premium paid by the
Company prior to the date hereof (which the Company represents to be $233,200
for the 12-month period ending June 27, 1998) and if the Surviving Corporation
is unable to obtain the insurance required by this Section 6.6 (b) it shall
obtain as much comparable insurance as possible for an annual premium equal to
such maximum amount. Notwithstanding the foregoing, at any time on or after the
third anniversary of the Effective Time, Parent may, at its election, undertake
to provide funds to the Surviving Corporation to the extent necessary so that
the Surviving Corporation may self-insure with respect to the level and scope of
insurance coverage required under this Section 6.6(b) in lieu of causing to
remain in effect any directors, and officers, liability insurance policy.
(c) Any Indemnified Party wishing to claim indemnification
under paragraph (a) of this Section 6.6, upon learning of any such claim,
action, suit, proceeding or investigation, shall promptly notify Parent thereof,
but the failure to so notify shall not relieve Parent of any liability it may
have to such Indemnified Party if and to the extent such failure does not
materially prejudice Parent as the indemnifying party. After the Effective Time,
in the event of any such claim, action, suit, proceeding or investigation
(whether arising or asserted before or after the Effective Time), (i) Parent or
the Surviving Corporation shall have the right to assume
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the defense thereof and Parent shall not be liable to such Indemnified Parties
for any legal expenses of other counsel or any other expenses subsequently
incurred by such Indemnified Parties in connection with the defense thereof,
except that if Parent and the Surviving Corporation elect not to assume such
defense, or if counsel for the Indemnified Parties advises that there are issues
that raise conflicts of interest between Parent or the Surviving Corporation and
the Indemnified Parties, the Indemnified Parties may retain counsel satisfactory
to them, and Parent or the Surviving Corporation shall pay all reasonable fees
and expenses of such counsel for the Indemnified Parties promptly as detailed
statements therefor are received; provided, however, that Parent shall be
obligated pursuant to this paragraph (c) to pay for only one firm of counsel for
all Indemnified Parties in any jurisdiction unless the use of one counsel for
such Indemnified Parties would present such counsel with a conflict of interest,
(ii) the Indemnified Parties will cooperate in the defense of any such matter,
and (iii) Parent shall not be liable for any settlement effected without its
prior written consent, which consent shall not be unreasonably withheld; and
provided, further, that Parent shall not have any obligation hereunder to any
Indemnified Party if and when a court of competent jurisdiction shall ultimately
determine, and such determination shall have become final and non-appealable,
that the indemnification of such Indemnified Party in the manner contemplated
hereby is prohibited by applicable law.
(d) This Section 6.6 shall survive the consummation of the
Merger at the Effective Time, is intended to benefit the Indemnified Parties,
shall be binding on all successors and assigns of Parent and the Surviving
Corporation and shall be enforceable by the Indemnified Parties.
SECTION 6.7. Notification of Certain Matters. Parent and the
Company shall promptly notify each other of (i) the occurrence or non-occurrence
of any fact or event which would be reasonably likely (A) to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Effective Time or (B) to cause any covenant, condition or agreement under this
Agreement not to be complied with or satisfied 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; provided, however, that no such notification shall affect the
representations or warranties of any party or the conditions to the obligations
of any party hereunder. Each of the Company, Parent and the Purchaser shall give
prompt notice to the other parties hereof 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 6.8. Rights Agreement. The Company covenants and agrees
that it will not (i) redeem the Rights, (ii) amend the Rights Agreement or (iii)
take any action which would allow any Person (as defined in the Rights
Agreement) other than Parent or the Purchaser to acquire beneficial ownership of
25% or more of the Common Shares without causing a Distribution Date (as such
term is defined in the Rights Agreement) to occur.
SECTION 6.9. State Takeover Laws. Each party hereto shall, upon
the request of any other party hereto, take all reasonable steps to assist in
any challenge by such other party
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to the validity or applicability to the transactions contemplated by this
Agreement, including the Offer and the Merger, of any state takeover law.
SECTION 6.10. No Solicitation.
(a) The Company, its affiliates and their respective officers,
directors (in their capacity as such), employees, representatives and agents
shall immediately cease any existing discussions or negotiations, if any, with
any parties conducted heretofore with respect to any acquisition or exchange of
all or any material portion of the assets of, or any material equity interest
in, the Company or any of its subsidiaries or any business combination with the
Company or any of its subsidiaries. The Company agrees that, prior to the
Effective Time, it shall not, and shall not authorize or permit any of its
subsidiaries or any of its or its subsidiaries' directors (in their capacity as
such), officers, employees, agents or representatives, directly or indirectly,
to solicit, initiate, encourage or facilitate, or furnish or disclose nonpublic
information in furtherance of, any inquiries or the making of any proposal with
respect to any merger, liquidation, recapitalization, consolidation or other
business combination involving the Company or its subsidiaries or acquisition of
any material amount of capital stock or any material portion of the assets
(except for acquisition of assets in the ordinary course of business consistent
with past practice) of the Company or its subsidiaries, or any combination of
the foregoing (other than the Offer and the Merger) (an "Acquisition
Transaction"), or negotiate or engage in substantive discussions with any person
(other than the Purchaser, Parent or their respective directors, officers,
employees, agents and representatives) with respect to any Acquisition
Transaction or enter into or resolve to enter into any agreement, arrangement or
understanding with respect to any Acquisition Transaction or requiring it to
abandon, terminate or fail to consummate the Merger or any other transaction
contemplated by this Agreement; provided, however, that the Company may furnish
information to, and negotiate or otherwise engage in substantive discussions
with, any person who has delivered a bona fide written proposal for an
Acquisition Transaction, and may terminate this Agreement pursuant to Section
8.1(g) of this Agreement in order to immediately thereafter enter into a
definitive agreement with respect to such Acquisition Transaction, in each case,
if the Company Board determines in good faith following consultation with
outside counsel that failing to take such action would constitute a breach of
the fiduciary obligations of the Company Board under applicable law, provided
that prior to furnishing non-public information to any such party, the Company
shall have entered into a confidentiality agreement containing terms at least as
favorable to the Company as those of the Confidentiality Agreement (other than
the sixth paragraph thereof) with respect to the maintenance of confidentiality
and the permitted use of information provided by or on behalf of the Company.
(b) From and after the execution of this Agreement, the
Company shall promptly advise Parent of any discussions, negotiations or
proposals relating to an Acquisition Transaction, identify the offeror and
furnish to Parent a copy of any such proposal, if it is in writing, or a written
summary of any such proposal relating to an Acquisition Transaction if it is not
in writing. The Company shall promptly advise Parent of any material development
relating to any such proposal, including the results of any discussions or
negotiations with respect thereto.
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(c) Nothing contained in this Agreement shall prohibit the
Company from taking and disclosing to its stockholders a position contemplated
by Rule 14d-9 or Rule 14e-2(a) promulgated under the Exchange Act or from making
any disclosure to the Company's stockholders, in each case, if, in the good
faith judgment of the Board of Directors of the Company following consultation
with outside counsel, failure to take such positions or so to disclose such
would constitute a violation of applicable law.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.1. Conditions. The respective obligations of Parent, the
Purchaser and the Company to consummate the Merger are subject to the
satisfaction or waiver (by each such party), at or before the Effective Time, of
each of the following conditions:
(a) Stockholder Approval. The stockholders of the Company
shall have duly adopted this Agreement, if required by applicable law.
(b) Purchase of Common Shares. The Purchaser shall have
accepted for payment and paid for Common Shares pursuant to the Offer; provided,
however, that this condition shall be deemed to be satisfied with respect to the
obligation of Parent and the Purchaser to effect the Merger if the Purchaser
fails to accept for payment or pay for Common Shares pursuant to the Offer in
violation of the terms of the Offer or of this Agreement.
(c) Injunctions; Illegality. The consummation of the Merger
shall not be restrained, enjoined or prohibited by any order, judgment, decree,
injunction or ruling of a court of competent jurisdiction or any Governmental
Entity and there shall not have been any statute, rule or regulation enacted,
promulgated or deemed by a Governmental Entity applicable to the Merger by any
Governmental Entity which prevents the consummation of the Merger or has the
effect of making the purchase of Common Shares illegal; provided that each party
hereto shall use reasonable best efforts to prevent the entry of and to appeal
any such order, judgment, decree, injunction or ruling or the enactment,
promulgation or such other action by any Governmental Entity with respect to any
such statute, rule or regulation.
ARTICLE VIII
TERMINATION; AMENDMENTS; WAIVER
SECTION 8.1. Termination. This Agreement may be terminated and the
Merger contemplated hereby may be abandoned at any time prior to the Effective
Time, notwithstanding approval thereof by the stockholders of the Company (with
any termination by Parent also being an effective termination by the Purchaser);
provided that if Shares are accepted for payment pursuant to the Offer, neither
Parent nor the Purchaser may terminate this Agreement or abandon the Merger
except pursuant to clause (a) below:
34
<PAGE>
(a) by the mutual written consent of Parent and the Company,
by action of their respective Boards of Directors;
(b) by the Company if (i) Parent or the Purchaser fails to
commence the Offer as provided in Section 1.1 hereof, or (ii) Parent or the
Purchaser shall not have accepted for payment and paid for Common Shares
pursuant to the Offer in accordance with the terms hereof and thereof on or
before March 31, 1999;
(c) by Parent or the Company if the Offer expires pursuant to
its terms without any Common Shares being purchased thereunder;
(d) by Parent or the Company if any court of competent
jurisdiction or other Governmental Entity shall have issued an order, decree or
ruling or taken any other action permanently enjoining, restraining or otherwise
prohibiting the Merger or the acceptance for payment of, or payment for, Common
Shares pursuant to the Offer and such order, decree or ruling or other action
shall have become final and nonappealable, provided that the party seeking to
terminate this Agreement shall have used its reasonable best efforts to remove
or lift such order, decree or ruling;
(e) by Parent if the Company breaches its covenant in
Section 6.8;
(f) by Parent if the Company Board shall have withdrawn or
modified (including by amendment of the Schedule 14D-9) in a manner adverse to
the Purchaser its approval or recommendation of the Offer, this Agreement or the
Merger, shall have approved or recommended any Acquisition Transaction, or shall
have resolved to effect any of the foregoing; and
(g) by the Company in accordance with Section 6.10 of this
Agreement.
SECTION 8.2. Effect of Termination. In the event of the
termination of this Agreement pursuant to Section 8.1, this Agreement shall
forthwith become void and have no effect, without any liability on the part of
any party or its directors, officers or stockholders, other than the provisions
of the last sentence of Section 6.2 and the provisions of this Section 8.2 and
Section 8.3, which shall survive any such termination. Nothing contained in this
Section 8.2 shall relieve any party from liability for any willful breach of
this Agreement.
SECTION 8.3. Fees and Expenses.
(a) Whether or not the Merger is consummated, except as
otherwise specifically provided herein, all costs and expenses incurred in
connection with the Offer, this Agreement and the transactions contemplated by
this Agreement shall be paid by the party incurring such expenses.
(b) In the event that this Agreement is terminated pursuant to
Section 8.1 (e), (f) or (g) or pursuant to Section 8.1(c) as a result of the
failure of any of the conditions set
35
<PAGE>
forth in paragraph (d) of Exhibit A, then the Company shall, within two business
days after (or, in the case of a termination pursuant to Section 8.1(g), at or
prior to) such termination, pay Parent a termination fee of $20,000,000 (the
"Termination Fee") in immediately available funds by wire transfer to an account
designated by Parent. In the event that (i) a bona fide Acquisition Transaction
has been proposed to the Company or publicly announced or disclosed, (ii) this
Agreement is subsequently terminated pursuant to Section 8.1(b)(ii) or Section
8.1(c) (other than as a result of the failure of any of the conditions set forth
in paragraph (d) of Exhibit A) and (iii) within six months of such termination
the Company shall have entered into a definitive agreement or a written
agreement in principle providing for an Acquisition Transaction with respect to,
directly or indirectly, more than 50% of the capital stock of the Company or of
the assets (based on fair market value) of the Company and its subsidiaries,
taken as a whole, the Company shall pay Parent the Termination Fee at or prior
to execution of such agreement or agreement in principle in immediately
available funds by wire transfer to an account designated by Parent.
(c) The prevailing party in any legal action undertaken to
enforce this Agreement or any provision hereof shall be entitled to recover from
the other party the costs and expenses (including attorneys' and expert witness
fees) incurred in connection with such action.
SECTION 8.4. Amendment. Subject to Section 1.3(c), this Agreement
may be amended by the Company, Parent and the Purchaser at any time before or
after any approval of this Agreement by the stockholders of the Company but,
after any such approval, no amendment shall be made which decreases the Merger
Price or which adversely affects the rights of the Company's stockholders
hereunder without the approval of such stockholders or which otherwise violates
applicable law. This Agreement may not be amended except by an instrument in
writing signed on behalf of all the parties.
SECTION 8.5. Extension; Waiver. Subject to Section 1.3(c), at any
time prior to the Effective Time, Parent and the Purchaser, on the one hand, and
the Company, on the other hand, may (i) extend the time for the performance of
any of the obligations or other acts of the other, (ii) waive any inaccuracies
in the representations and warranties contained herein of the other or in any
document, certificate or writing delivered pursuant hereto by the other or (iii)
waive compliance by the other with any of the agreements or conditions. Any
agreement on the part of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Non-Survival of Representations and Warranties. The
representations and warranties made in this Agreement shall not survive beyond
the Effective Time. Notwithstanding the foregoing, the agreements set forth in
Section 2.9 (Options; Stock Plans), Section 3.2 (Payment for Common Shares), the
last sentence of the second paragraph of Section 6.3(a) (Efforts - further
action), Section 6.5 (Employee Benefit Arrangements) and Section 6.6
36
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(Indemnification; Directors' and Officers' Insurance) shall survive the
Effective Time indefinitely (except to the extent a shorter period of time is
explicitly specified therein).
SECTION 9.2. Entire Agreement; Assignment.
(a) This Agreement (including the documents and the
instruments referred to herein) constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof and thereof.
(b) Neither this Agreement nor any of the rights, interests or
obligations hereunder will be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
parties (except that the Purchaser may assign its rights, interest and
obligations to any affiliate or direct or indirect subsidiary of Parent without
the consent of the Company provided that no such assignment shall relieve Parent
of any liability for any breach by such assignee). Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
SECTION 9.3. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, each of which shall remain in full force
and effect.
SECTION 9.4. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be deemed to have
been duly given when delivered in person, by overnight courier or facsimile to
the respective parties as follows:
If to Parent or the Purchaser:
Vulcan Materials Company
One Metroplex Drive
Birmingham, Alabama 35209
Attention: General Counsel
Facsimile Number: (205) 877-3296
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Edward D. Herlihy, Esq.
Facsimile Number: (212) 403-2000
37
<PAGE>
If to the Company:
CalMat Co.
3200 San Fernando Road
Los Angeles, California 90065
Attention: General Counsel
Facsimile Number: (323) 258-1583
with a copy to:
Cravath, Swaine & Moore
825 Eighth Avenue
New York, New York 10019
Attention: Robert A. Kindler, Esq.
Facsimile Number: (212) 474-3700
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above;
provided that notice of any change of address shall be effective only upon
receipt thereof.
SECTION 9.5. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, regardless
of the laws that might otherwise govern under applicable principles of conflicts
of laws thereof. Each of the parties hereto (i) consents to submit itself to the
personal jurisdiction of any Delaware state court or any federal court located
in the State of Delaware in the event any dispute arises out of this Agreement,
(ii) agrees that it will not attempt to defeat or deny 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 in any court
other than a Delaware state court or a federal court sitting in the State of
Delaware.
SECTION 9.6. Descriptive Headings. The descriptive headings herein
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
SECTION 9.7. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same agreement.
SECTION 9.8. Parties in Interest. Except with respect to Sections
2.9 and 6.6 (which are intended to be for the benefit of the persons identified
therein, and may be enforced by such persons), this Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
38
<PAGE>
SECTION 9.9. Certain Definitions. As used in this Agreement:
(a) the term "affiliate," as applied to any person, shall mean
any other person directly or indirectly controlling, controlled by, or under
common control with, that person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that person, whether through the
ownership of voting securities, by contract or otherwise;
(b) the term "Person" or "person" shall include individuals,
corporations, partnerships, trusts, other entities and groups (which term shall
include a "group" as such term is defined in Section 13(d)(3) of the Exchange
Act); and
(c) the term "Subsidiary" or "subsidiaries" means, with
respect to Parent, the Company or any other person, any corporation,
partnership, joint venture or other legal entity of which Parent, the Company or
such other person, as the case may be (either alone or through or together with
any other subsidiary), owns, directly or indirectly, stock or other equity
interests the holders of which are generally entitled to more than 50% of the
vote for the election of the board of directors or other governing body of such
corporation or other legal entity.
SECTION 9.10. Specific Performance. 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. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any Delaware state court
or any federal court sitting in the State of Delaware, this being in addition to
any other remedy to which they are entitled at law or in equity.
39
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be executed on its behalf by its respective officer thereunto duly
authorized, all as of the day and year first above written.
ATTEST: VULCAN MATERIALS COMPANY
By: /s/ William F. Denson, III By: /s/ Donald M. James
---------------------------------- ----------------------------------
Name: William F. Denson, III Name: Donald M. James
Title: Senior Vice President Title: Chairman and Chief
Law and Secretary Executive Officer
ATTEST: ALB ACQUISITION CORPORATION
By: /s/ William F. Denson, III By: /s/ Donald M. James
---------------------------------- ----------------------------------
Name: William F. Denson, III Name: Donald M. James
Title: Senior Vice President, Title: Chairman and Chief
Law and Secretary Executive Officer
ATTEST: CALMAT CO.
By: /s/ By: /s/ A. Frederick Gerstell
---------------------------------- ----------------------------------
Name: Name: A. Ferderick Gerstell
Title: Title: Chairman and Chief Executive
Officer
40
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[BLANK PAGE]
41
<PAGE>
Exhibit A
The capitalized terms used in this Exhibit A shall have the
same meanings set forth in the Agreement and Plan of Merger to which this
Exhibit is attached, except that as used in this Exhibit A the term "Merger
Agreement" shall be deemed to refer to such Agreement and Plan of Merger.
Conditions to the Offer. Notwithstanding any other provisions
of the Offer, the Purchaser shall not be required to accept for payment or,
subject to any applicable rules and regulations of the SEC, including Rule
14e-1(c) promulgated under the Exchange Act, pay for any tendered Common Shares
and, subject to the terms of the Merger Agreement, may amend the Offer, if (i)
there shall not be validly tendered and not properly withdrawn prior to the
expiration of the Offer that number of Common Shares which represents at least a
majority of the total number of outstanding Common Shares on a fully diluted
basis on the date of purchase (not taking into account the Rights) (the "Minimum
Condition"), (ii) any waiting period under the HSR Act applicable to the Offer
or the Merger shall not have expired or been terminated prior to the expiration
of the Offer, or (iii) at any time on or after the date hereof and prior to the
expiration of the Offer, any of the following events (each, an "Event") shall
occur:
(a) there shall be any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or injunction
enacted, enforced, promulgated, amended, issued or deemed applicable to
the Offer or the Merger, by any Governmental Entity, other than the
application of the waiting period provisions of the HSR Act to the
Offer or to the Merger, that reasonably would be expected to: (i) make
illegal or otherwise prohibit consummation of the Offer or the Merger
or seek to obtain material damages or make materially more costly the
making of the Offer, (ii) prohibit or materially limit the ownership or
operation by Parent or the Purchaser of all or any material portion of
the business or assets of the Company or any of its subsidiaries taken
as a whole or compel Parent or the Purchaser to dispose of or hold
separately all or any material portion of the business or assets of
Parent or the Company or any of its subsidiaries taken as a whole, or
seek to impose any material limitation on the ability of Parent or the
Purchaser to conduct its business or own such assets, in each case as a
result of or principally in connection with the Offer or the Merger,
(iii) impose material limitations on the ability of Parent or the
Purchaser effectively to acquire, hold or exercise full rights of
ownership of the Common Shares, including, without limitation, the
right to vote any Common Shares acquired or owned by the Purchaser or
Parent on all matters properly presented to the Company's stockholders,
or (iv) require divestiture by Parent or the Purchaser of any Common
Shares; or
(b) there shall be instituted or pending any action or
proceeding by any Governmental Entity seeking, or that would reasonably
be expected to result in, any of the consequences referred to in
clauses (i) through (iv) of paragraph (a) above or by any third party
for which there is a substantial likelihood of resulting in any of the
consequences referred to in clauses (i) through (iv) of paragraph (a)
above; or
<PAGE>
(c) there have been any changes or effects that would,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company; or
(d) (i) it shall have been publicly disclosed or the Purchaser
shall have otherwise learned that beneficial ownership (determined for
the purposes of this paragraph (d) as set forth in Rule 13d-3
promulgated under the Exchange Act) of 50% or more of the outstanding
Common Shares has been acquired by any person (including the Company or
any of its subsidiaries or affiliates) or group (as defined in Section
13(d)(3) under the Exchange Act), (ii) the Company Board or any
committee thereof shall have withdrawn, or shall have modified or
amended in a manner adverse to Parent or the Purchaser, the approval,
adoption or recommendation, as the case may be, of the Offer or the
Merger Agreement, or approved or recommended any Acquisition
Transaction, (iii) a Person shall have entered into a definitive
agreement or an agreement in principle with the Company with respect to
an Acquisition Transaction (whether in violation of the Merger
Agreement or not), or (iv) the Company Board or any committee thereof
shall have resolved to do any of the foregoing; or
(e) the Company and the Purchaser and Parent shall have
reached a written agreement authorized by their respective Boards of
Directors that the Offer or the Merger Agreement be terminated, or the
Merger Agreement shall have been terminated in accordance with its
terms; or
(f) any of the representations and warranties of the Company
set forth in the Merger Agreement, when read without any exception or
qualification as to materiality or Material Adverse Effect on the
Company, shall not be true and correct, as if such representations and
warranties were made at the time of such determination (except as to
any such representation or warranty which speaks as of a specific date,
which must be untrue or incorrect as of such specific date), except
where the failure to be so true and correct would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse
Effect on the Company or prevent the consummation of the Offer or the
Merger; or
(g) the Company shall have failed to perform or to comply with
any of its obligations, covenants or agreements under the Merger
Agreement in any material respect.
The foregoing conditions (including those set forth in clauses
(i) and (ii) of the initial paragraph) may be asserted by Parent or the
Purchaser regardless of the circumstances giving rise to any such conditions.
The conditions set forth in clauses (a) through (g) above are for the benefit of
the Parent and the Purchaser and may be waived by Parent or the Purchaser in
whole or in part at any time and from time to time in their reasonable
discretion, in each case, subject to the terms of the Merger Agreement. The
failure by Parent or the Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time.
2
<PAGE>
Exhibit (c)(2)
FORM OF SUPPORT AGREEMENT
November 14, 1998
Vulcan Materials Company
One Metroplex Drive
Birmingham, Alabama 35209
Dear Sirs:
The undersigned understands that Vulcan Materials Company, a
New Jersey corporation ("Parent"), ALB Acquisition Corporation, a Delaware
corporation and a wholly-owned subsidiary of Parent (the "Purchaser"), and
CalMat Co., a Delaware corporation (the "Company"), are entering into an
Agreement and Plan of Merger dated as of the date hereof (the "Merger
Agreement"), pursuant to which the Purchaser agrees to make a tender offer (the
"Offer") for all outstanding shares of common stock, par value $1.00 per share,
of the Company (together with the associated rights under the Rights Agreement,
the "Common Stock"), at $31.00 per share net to the seller in cash (the "Offer
Price"), to be followed by a merger (the "Merger") of the Purchaser with and
into the Company. All capitalized terms used in this letter agreement but not
defined in this letter agreement shall have the meanings given such terms in the
Merger Agreement.
The undersigned is a stockholder of the Company and is
entering into this letter agreement to induce you to enter into the Merger
Agreement and to consummate the transactions contemplated thereby.
The undersigned confirms its agreement with you as follows:
1. The undersigned represents and warrants that Schedule I
annexed hereto sets forth the number of all Shares of which the undersigned is
the direct record or beneficial owner (together with any Shares acquired by the
undersigned after the date hereof and prior to the termination of the Offer
(whether upon the exercise of options or otherwise), the "Owned Shares") and
that the undersigned is on the date hereof the lawful owner of the number of the
Owned Shares set forth in Schedule I, free and clear of all Liens (including,
without limitation, voting agreements and commitments of any kind), except as
disclosed in Schedule I. The undersigned agrees that while this letter agreement
is in effect, she will promptly notify Parent of the number of all Shares and
Rights acquired by her after the date hereof, if any. As used in this Agreement,
"Rights" means any option, warrant, convertible or exchangeable security, right,
subscription, call, unsatisfied pre-emptive right or other agreement or right of
any kind to purchase or otherwise acquire (including, without limitation, by
exchange or conversion) any Shares. The Owned Shares shall in no event include
any Shares that are owned beneficially or of record by or held for the benefit
of any trust, foundation or other Person of which the undersigned is a trustee
or fiduciary.
<PAGE>
2. The undersigned agrees that the undersigned will not,
subject to the proviso in Section 3 hereof, contract to sell, sell or otherwise
transfer or dispose of any of the Owned Shares, any interest in any of the Owned
Shares or any Rights or voting rights with respect to the Owned Shares, other
than (i) pursuant to the Offer, (ii) with your prior written consent and (iii)
Owned Shares transferred to the Company in connection with the exercise of stock
options to the extent that as of the date hereof the related option agreement
permits Owned Shares to be so used in connection with the exercise of stock
options.
3. The undersigned agrees to validly tender (or to cause the
record owner of such shares to validly tender), pursuant to and in accordance
with the terms of the Offer, as soon as practicable after commencement of the
Offer, the Owned Shares, by physical delivery of the certificates therefor, and
to not withdraw such Shares, except following termination of this letter
agreement pursuant to Section 7 hereof; provided, however, that nothing in this
letter agreement shall restrict the undersigned's ability to (i) withdraw Owned
Shares from the Offer or dispose of Owned Shares in open market sales, in each
case at any time after December 27, 1998, if a bona fide Acquisition Transaction
has not been proposed publicly or to the Company prior to such date or (ii) take
any action necessary or desirable in order to avoid any liability which might
otherwise arise under Section 16(b) of the Exchange Act. The undersigned hereby
acknowledges and agrees that Parent's and the Purchaser's obligation to accept
for payment and pay for the Owned Shares is subject to the terms and conditions
of the Offer.
4. Nothing herein shall be construed to require the
undersigned, or any Person controlled by the undersigned, to take any action or
fail to take any action in violation of any applicable law.
5. The undersigned represents, warrants and agrees that (i)
the undersigned has all necessary power and authority to enter into this letter
agreement, (ii) this letter agreement is the legal, valid and binding agreement
of the undersigned, and (iii) this letter agreement is enforceable against the
undersigned in accordance with its terms.
6. The undersigned recognizes and acknowledges that a breach
by her of any covenants or agreements contained in this letter agreement will
cause Parent and the Purchaser to sustain damages for which they would not have
an adequate remedy at law for money damages, and therefore the undersigned
agrees that in the event of any breach of her covenants and agreements under
this letter agreement, each of Parent and Purchaser will be entitled to specific
performance of such covenants and agreements and to injunctive and other
equitable relief in addition to any other remedy to which it may be entitled at
law or in equity.
7. This letter agreement may be terminated at the option of
any party hereto at any time after the earlier of (i) the payment for the Shares
pursuant to the Offer and (ii) termination of the Merger Agreement pursuant to
its terms.
8. This letter agreement will be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to the
conflicts of laws principles that would otherwise apply thereunder.
Please confirm that the foregoing correctly states the
understanding between us by signing and returning to us a counterpart hereof.
<PAGE>
Very truly yours,
By:
------------------------------
Shareholder
Confirmed and agreed to on
the date first above written.
Vulcan Materials Company
By:
-----------------------------
Title:
--------------------------
<PAGE>
Schedule 1
<PAGE>
Exhibit (c)(3)
CALMAT CO.
3200 San Fernando Road
Los Angeles, California 90065
Vulcan Materials Company
One Metroplex Drive
Birmingham, Alabama
September 24, 1998
Dear Sirs:
In connection with our mutual consideration of a possible
business combination transaction (a "Transaction") involving Vulcan Materials
Company ("Vulcan") and CalMat Co. ("CalMat"), you have requested certain
information with respect to CalMat and we have requested certain information
with respect to Vulcan. As a condition to each party furnishing information to
the other, each party agrees (i) to treat confidentially, and to not disclose to
any person (other than disclosures expressly permitted by the terms hereof or to
which the disclosing party shall have consented in writing), such information
and any other non-public information that is furnished by or on behalf of the
disclosing party or its directors, officers, employees, agents, advisors, or
representatives or those of its agents or advisors (all the foregoing
collectively referred to as "Representatives") to the receiving party or its
Representatives, whether furnished before or after the date of this letter
agreement ("this Agreement"), and all notes, analyses, compilations, studies or
other documents or material, whether prepared by you or others, which contain or
otherwise reflect such information (collectively, the "Evaluation Material"),
and (ii) to not use any of the Evaluation Material for any purpose other than
evaluating a possible Transaction. With respect to any information disclosed in
connection with a possible Transaction or otherwise pursuant to this Agreement,
the party who has disclosed such information or on whose behalf such information
has been disclosed is referred to herein as the "disclosing party" and the other
party is referred to herein as the "receiving party".
The term "Evaluation Material" does not include information
that (a) becomes generally available to the public other than as a result of a
disclosure by the receiving party or its Representatives, (b) was available to
the receiving party on a non-confidential basis prior to its disclosure to the
receiving party by the disclosing party or its Representatives, or (c) becomes
available to the receiving party on a non-confidential basis from a source other
than the disclosing party or any of its Representatives, provided that such
source is not, to the receiving party's knowledge (after due inquiry), bound by
a confidentiality agreement with the disclosing party or any of its
Representatives.
1
<PAGE>
It is understood that the receiving party may disclose any of
the Evaluation Material to those of its Representatives who require such
material for the purpose of evaluating a possible Transaction (provided that
such Representatives shall be informed by the receiving party of the
confidential nature of the Evaluation Material). The receiving party agrees that
the Evaluation Material will be kept confidential by its Representatives and
that its Representatives will not disclose to any person (other than disclosures
expressly permitted by the terms hereof or to which the disclosing party shall
have consented in writing) any of the Evaluation Material. The receiving party
further agrees that its Representatives will not use any of the Evaluation
Material for any purpose other than evaluating a possible Transaction on its
behalf.
Without the prior written consent of the disclosing party, the
receiving party will not, and will cause its Representatives to not, disclose
(other than disclosures expressly permitted by the terms hereof or to which the
disclosing party shall have consented in writing) to any person (a) the fact
that the Evaluation Material has been made available to the receiving party or
any of its Representatives or that the receiving party or any of its
Representatives has inspected any portion of the Evaluation Material, (b) the
fact that any discussions or negotiations are taking place concerning a possible
Transaction, or (c) any of the terms, conditions or other facts with respect to
any possible Transaction, including the status thereof. The term "person" as
used in this Agreement shall be broadly interpreted to include without
limitation any corporation, company, partnership, organization, bank or
individual.
In the event that either party or any of its Representatives
is requested or required by a governmental authority or in connection with a
legal proceeding or pursuant to legal process to disclose any of the Evaluation
Material with respect to which such party is the receiving party or any other
matter referred to in the immediately preceding paragraph, it is agreed that
such party or Representative, as the case may be, will provide the other party
with prompt notice of each such request or requirement so that such other party
may seek promptly an appropriate protective order or other appropriate remedy
and/or waive compliance by such party or Representative subject to such request
or requirement with the provisions of this Agreement. In the event that such
protective order or other remedy is not obtained promptly, such party or
Representative subject to such request or requirement may furnish that portion
(and only that portion) of the Evaluation Material or other information with
respect to such matter which, in the written opinion of its counsel, it is
legally compelled to disclose and will exercise its best efforts to obtain
reliable assurance that confidential treatment will be accorded any Evaluation
Material or other information so furnished.
Each party agrees that, prior to the second anniversary of the
date of this Agreement, it and its affiliates will not (a) in any manner
acquire, agree to acquire or make any proposal to acquire, directly or
indirectly, any securities representing 5% or more of the outstanding shares of
any class of securities or any material assets of the other party or any of its
subsidiaries, except at the unsolicited specific written request of the other
party, (b) propose to enter into, directly or indirectly, any merger or other
business combination or similar transaction involving the other party or any of
its subsidiaries, except at the unsolicited specific written request of the
other party, (c) make, or in any way participate, directly or indirectly, in any
"solicitation" of "proxies" (as such terms are used in the proxy rules of the
Securities and Exchange Commission) to vote, or seek to advise or influence any
person with respect to the voting of, any
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securities of the other party or any of its subsidiaries, (d) form, join or in
any way participate in a "group" (within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934) with respect to any securities of the other
party or any of its subsidiaries, (e) otherwise act, alone or in concert with
others, to seek to control or influence the management, Board of Directors or
policies of the other party, (f) enter into any discussions, negotiations,
arrangements, understandings or agreements (whether written or oral) with any
other person (other than bona fide financial advisors who are not equity
participants) regarding a Transaction or any other possible purchase or sale of
any securities representing 5% or more of the outstanding shares of any class of
securities or significant assets of the other party or any of its subsidiaries,
(g) disclose any intention, plan or arrangement inconsistent with the foregoing
or (h) advise, assist or encourage any other persons in connection with any of
the foregoing; provided, however, that the foregoing restrictions shall not
prevent either party from (1) submitting a confidential non-public proposal
addressed to the Board of Directors of the other party to engage in any
transaction of the type enumerated above; provided, that, such proposal is
submitted through the other party's Chief Executive Officer and there is no
direct communication with any of such party's Board of Directors or (2) making a
public proposal to engage in a merger or other business combination or similar
transaction with the other party if such other party signs a letter of intent or
definitive agreement with a third party to engage in such a transaction. Each
party also agrees during such period not to (i) request the other party or its
Representatives, directly or indirectly, to amend or waive any provision of this
paragraph (including this sentence) or (ii) take any action which might require
such other party to make a public announcement regarding the possibility of a
Transaction.
The receiving party will promptly upon the written request of
the disclosing party deliver to the disclosing party all documents or other
matter furnished to the receiving party or its Representatives by or on behalf
of the disclosing party or its Representatives constituting or containing
Evaluation Material, together with all copies thereof in the possession of the
receiving party or its Representatives. In the event of such request, the
receiving party will promptly destroy all other documents or other matter
constituting or containing Evaluation Material in the possession of the
receiving party or its Representatives, with any such destruction promptly
confirmed by the receiving party in writing to the disclosing party.
Although the receiving party understands that the disclosing
party has endeavored to include in the Evaluation Material information known to
it which it believes to be relevant for the purpose of its investigation, the
receiving party further understand that neither the disclosing party nor any of
its Representatives makes any representation or warranty, express or implied, as
to the accuracy or completeness of the Evaluation Material. The receiving party
agrees that neither the disclosing party nor its Representatives shall have any
liability to the receiving party or any of its Representatives resulting from
the use of the Evaluation Material by the receiving party or such
Representatives. Only those representations and warranties that may be made by
either party or any of its affiliates in a definitive written agreement
regarding a Transaction, when, as and if executed and subject to such
limitations and restrictions as may be specified therein, shall have any legal
effect, and each party agrees that any determination to engage in a Transaction
will be based solely on the terms of such written agreement and on its own
investigation, analysis and assessment of Vulcan, in the case of CalMat, and
CalMat, in the case of Vulcan. Moreover, unless and until such a definitive
written agreement is entered into, neither party will be under any legal
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obligation of any kind whatsoever with respect to a Transaction except for the
matters specifically agreed to in this Agreement.
Each party hereby agrees to indemnify and hold harmless the
other party from any damage, loss, cost or liability (including reasonable legal
fees and the cost of enforcing this indemnity) arising out of or resulting from
any unauthorized use or disclosure by such party or its Representatives of the
Evaluation Material with respect to which such party is the receiving party or
any other breach of such party's obligations hereunder. Each party hereby
acknowledges that money damages would be both incalculable and an insufficient
remedy for any breach of this Agreement by such party and that any such breach
would cause the other party irreparable harm. Accordingly, each party agrees
that in the event of any breach or threatened breach of this Agreement by such
party, the other party, in addition to other remedies at law or in equity it may
have, shall be entitled, without the requirement of posting a bond or other
security, to equitable relief, including injunctive relief and specific
performance.
The terms of this Agreement may be amended, modified or waived
only by a separate writing signed by each party expressly so amending, modifying
or waiving such terms. It is understood and agreed that no failure or delay by
either party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any right, power or
privilege hereunder. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect. Each of the
parties agrees and consents to personal jurisdiction and service and venue in
any federal or state court within the State of Delaware having subject matter
jurisdiction, for the purpose of any action, suit or proceeding arising out of
or relating to this Agreement. This Agreement shall be governed by and construed
in accordance with the laws of State of Delaware applicable to contracts made
and to be fully performed in such State.
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If you are in agreement with the foregoing, please sign and
return one copy of this letter, which thereupon will constitute our agreement
with respect to the subject matter hereof.
Very truly yours,
CALMAT CO.
By: /s/
------------------------
Title:
Confirmed and agreed to as of
the date first above written:
VULCAN MATERIALS COMPANY
By: /s/
---------------------------
Name:
Title:
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