<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934)
CPI CORP.
(NAME OF ISSUER)
CPI CORP.
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, PAR VALUE $.40 PER SHARE 125902106
(TITLE OF CLASS OF SECURITIES) (CUSIP NUMBER OF CLASS OF SECURITIES)
----------------
ALYN V. ESSMAN
CPI CORP.
1706 WASHINGTON AVENUE
ST. LOUIS, MISSOURI 63103
(314) 231-1575
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES
AND COMMUNICATIONS ON BEHALF OF PERSONS(S) FILING STATEMENT)
----------------
COPIES TO:
WILLIAM F. WYNNE, JR., ESQ.
WHITE & CASE
1155 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
(212) 819-8200
OCTOBER 7, 1996
(DATE TENDER OFFER FIRST PUBLISHED, SENT OR GIVEN TO SECURITY HOLDERS)
----------------
CALCULATION OF FILING FEE
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<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE
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<S> <C>
$49,500,000 $9,900
</TABLE>
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* Calculated solely for the purpose of calculating the filing fee, based on
the purchase of 2,250,000 shares at $22.00 per share.
[_Check]box if any part of the fee is offset as provided by Rule 0-11 (a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number or the Form or
Schedule and the date of its filing.
<TABLE>
<S> <C> <C> <C>
Amount Previously Paid: Not applicable Filing party: Not applicable
Form or Registration No.: Not applicable Date Filed: Not applicable
</TABLE>
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<PAGE>
ITEM 1. SECURITY AND ISSUER.
(a) The name of the issuer is CPI Corp. (the "Company"), and the address of
its principal executive office is 1706 Washington Avenue, St. Louis, Missouri
63103.
(b) This Schedule 13E-4 relates to the offer (the "Offer") by the Company to
purchase up to 2,250,000 shares of its common stock, $.40 par value per share
(the "Shares") (including the associated Preferred Stock Purchase Rights
issued pursuant to the Rights Agreement, dated as of May 1, 1989, between the
Company and the Rights Agent named therein, as amended), at prices not in
excess of $22.00 nor less than $19.00 per Share in cash, as specified by
stockholders tendering their Shares, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated October 7, 1996 (the
"Offer to Purchase"), and in the related Letter of Transmittal, copies of
which are attached hereto as Exhibits (a)(1) and (a)(2), respectively. The
Offer is being made to all holders of Shares, including officers, directors
and affiliates of the Company. The information set forth in the Introduction
to, and in Sections 1 and 10 of the Offer to Purchase is incorporated herein
by reference.
(c) The information set forth in the Introduction to and in Section 7 of the
Offer to Purchase is incorporated herein by reference.
(d) This statement is being filed by the Issuer.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in the Introduction to and in Section 8 of the
Offer to Purchase is incorporated herein by reference.
(b) Not Applicable.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
(a-j) The information set forth in the Introduction to and in Section 2 of
the Offer to Purchase is incorporated herein by reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth in Section 10 of the Offer to Purchase and the
information set forth in Schedule A thereto, is incorporated herein by
reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERTAKINGS OR RELATIONSHIPS WITH RESPECT TO
THE ISSUER'S SECURITIES.
The information set forth in Section 10 of the Offer to Purchase is
incorporated herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in Section 15 of the Offer to Purchase is
incorporated herein by reference.
ITEM 7. FINANCIAL INFORMATION.
(a-b) The information set forth in Section 9 of the Offer to Purchase is
incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
(a) Not Applicable.
(b) The information set forth in Section 12 of the Offer to Purchase is
incorporated herein by reference.
(c) The information set forth in Section 11 of the Offer to Purchase is
incorporated herein by reference.
<PAGE>
(d) None.
(e) None.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<C> <S>
(a)(1) Form of Offer to Purchase dated October 7, 1996
(a)(2) Form of Letter of Transmittal dated October 7, 1996, together with
Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9
(a)(3) Form of Notice of Guaranteed Delivery
(a)(4) Form of letter from CS First Boston to Brokers, Dealers, Commercial
Banks, Trust Companies and other Nominees dated October 7, 1996
(a)(5) Form of letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and other Nominees dated October 7, 1996
(a)(6) Form of letter to stockholders from Alyn V. Essman, Chairman of the
Board and Chief Executive Officer of the Company dated October 7,
1996
(a)(7) Summary Advertisement dated October 7, 1996
(a)(8) Press Release dated October 7, 1996
(b) Not Applicable.
(c) Not Applicable.
(d) Not Applicable.
(e) Not Applicable.
(f) Not Applicable.
</TABLE>
2
<PAGE>
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: October 7, 1996
CPI Corp.
/s/ Alyn V. Essman
-------------------------------------
(Name) Alyn V. Essman
(Title) Chairman and Chief Executive Officer
3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
(a)(1) Form of Offer to Purchase dated October 7, 1996
(a)(2) Form of Letter of Transmittal dated October 7, 1996, together
with Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9
(a)(3) Form of Notice of Guaranteed Delivery
(a)(4) Form of letter from CS First Boston to Brokers, Dealers,
Commercial Banks, Trust Companies and other Nominees dated
October 7, 1996
(a)(5) Form of letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and other Nominees dated
October 7, 1996
(a)(6) Form of letter to stockholders from Alyn V. Essman, Chairman of
the Board and Chief Executive Officer of the Company dated
October 7, 1996
(a)(7) Summary Advertisement dated October 7, 1996
(a)(8) Press Release dated October 7, 1996
</TABLE>
<PAGE>
CPI CORP.
OFFER TO PURCHASE FOR CASH UP TO
2,250,000 SHARES OF ITS COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
AT A PURCHASE PRICE NOT IN EXCESS OF $22.00
NOR LESS THAN $19.00 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, NOVEMBER 4, 1996, UNLESS THE OFFER IS EXTENDED.
-----------
CPI Corp., a Delaware corporation (the "Company"), hereby invites its
stockholders to tender shares of its Common Stock, $.40 par value per share
(the "Shares") (including the associated Preferred Stock Purchase Rights
(the "Rights") issued pursuant to the Rights Agreement, dated as of May 1,
1989, between the Company and the Rights Agent named therein, as
amended), to the Company at prices not in excess of $22.00 nor less than
$19.00 per Share in cash, as specified by stockholders tendering their
Shares, upon the terms and subject to the conditions set forth herein
and in the related Letter of Transmittal, which together constitute
the "Offer." The Company will determine the single per Share price,
not in excess of $22.00 nor less than $19.00 per Share, net to the
seller in cash (the "Purchase Price"), that it will pay for Shares
properly tendered pursuant to the Offer, taking into account the
number of Shares so tendered and the prices specified by
tendering stockholders. The Company will select the lowest
Purchase Price that will allow it to buy 2,250,000 Shares (or
such lesser number of Shares as are properly tendered at
prices not in excess of $22.00 nor less than $19.00 per
Share). All Shares properly tendered at prices at or below
the Purchase Price and not withdrawn will be purchased at
the Purchase Price, upon the terms and subject to the
conditions of the Offer, including the proration
provisions. All Shares acquired in the Offer will be
acquired at the Purchase Price. The Company reserves
the right, in its sole discretion, to purchase more
than 2,250,000 Shares pursuant to the Offer. See
Section 14.
-----------
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6.
-----------
The Shares are listed and traded on the New York Stock Exchange, Inc. (the
"NYSE") under the symbol "CPY." On August 16, 1996, the last full trading day
on the NYSE prior to the announcement of the Offer, the closing per Share
sales price as reported on the NYSE Composite Tape was $17.625. On October
4, 1996, the last full trading day on the NYSE prior to the commencement of
the Offer, the closing per Share sales price as reported on the NYSE
Composite Tape was $19.50. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET
QUOTATIONS FOR THE SHARES. SEE SECTION 7.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
STOCKHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR
SHARES. EACH STOCKHOLDER MUST MAKE THE DECISION WHETHER TO TENDER
SHARES AND, IF SO, HOW MANY SHARES AND AT WHAT PRICE OR PRICES
SHARES SHOULD BE TENDERED. THE COMPANY HAS BEEN ADVISED THAT NONE
OF ITS DIRECTORS OR EXECUTIVE OFFICERS INTENDS TO TENDER ANY
SHARES PURSUANT TO THE OFFER.
-----------
IMPORTANT
Any stockholder wishing to tender all or any part of his or her Shares
should either (a) complete and sign a Letter of Transmittal (or a facsimile
thereof) in accordance with the instructions in the Letter of Transmittal and
either mail or deliver it with any required signature guarantee and any other
required documents to Boatmen's Trust Company (the "Depositary") c/o
IBJ Schroder Bank & Trust Company, and either mail or deliver the stock
certificates for such Shares to the Depositary (with all such other documents)
or tender such Shares pursuant to the procedure for book-entry tender set
forth in Section 3, or (b) request a broker, dealer, commercial bank, trust
company or other nominee to effect the transaction for such stockholder.
Holders of Shares registered in the name of a broker, dealer, commercial bank,
trust company or other nominee should contact such person if they desire to
tender their Shares. Any stockholder who desires to tender Shares and whose
certificates for such Shares cannot be delivered to the Depositary or who
cannot comply with the procedure for book-entry transfer or whose other
required documents cannot be delivered to the Depositary, in any case, by the
expiration of the Offer must tender such Shares pursuant to the guaranteed
delivery procedure set forth in Section 3.
TO PROPERLY TENDER SHARES, STOCKHOLDERS MUST COMPLETE THE SECTION OF THE
LETTER OF TRANSMITTAL RELATING TO THE PRICE AT WHICH THEY ARE TENDERING
SHARES.
Questions and requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery
may be directed to the Information Agent or to the Dealer Manager at their
respective addresses and telephone numbers set forth on the back cover of this
Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of
Transmittal or the Notice of Guaranteed Delivery may be obtained from the
Information Agent.
-----------
THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON
BEHALF OF THE COMPANY AS TO WHETHER STOCKHOLDERS SHOULD TENDER OR REFRAIN FROM
TENDERING SHARES PURSUANT TO THE OFFER. THE COMPANY HAS NOT AUTHORIZED ANY
PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION
WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN OR IN THE RELATED LETTER OF
TRANSMITTAL. IF GIVEN OR MADE, ANY SUCH RECOMMENDATION OR ANY SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY.
-----------
The Dealer Manager for the Offer is:
CS First Boston
October 7, 1996
<PAGE>
SUMMARY
This general summary is solely for the convenience of the Company's
stockholders and is qualified in its entirety by reference to the full text and
more specific details in this Offer to Purchase.
Purchase Price.......... The Company will select a single Purchase Price which
will be not more than $22.00 nor less than $19.00 per
Share. All Shares purchased by the Company will be
purchased at the Purchase Price even if tendered at
or below the Purchase Price. Each stockholder desir-
ing to tender Shares must specify in the Letter of
Transmittal the minimum price (not more than $22.00
nor less than $19.00 per Share) at which such stock-
holder is willing to have his or her Shares purchased
by the Company.
Number of Shares to be
Purchased.............. 2,250,000 Shares (or such lesser number of Shares as
are properly tendered).
How to Tender Shares.... See Section 3. Call the Information Agent, the Dealer
Manager or consult your broker for assistance.
Brokerage Commissions... None for registered stockholders. Stockholders hold-
ing Shares through brokers or banks are urged to con-
sult such brokers or banks to determine whether
transaction costs are applicable if stockholders ten-
der Shares through such brokers or banks and not di-
rectly to the Depositary.
Stock Transfer Tax...... None, if payment is made to the registered holder.
Expiration and
Proration Dates........ Monday, November 4, 1996, at 12:00 Midnight, New York
City time, unless extended by the Company.
Payment Date............ As soon as practicable after the termination of the
Offer.
Position of the Company
and its Directors...... Neither the Company nor its Board of Directors makes
any recommendation to stockholders as to whether to
tender or refrain from tendering their Shares. Each
stockholder must make the decision whether to tender
Shares and, if so, how many Shares and at what price
or prices Shares should be tendered. The Company has
been advised that none of its directors or executive
officers intends to tender any Shares pursuant to the
Offer.
Withdrawal Rights....... Tendered Shares may be withdrawn at any time until
12:00 Midnight, New York City time, on November, 4,
1996 unless the Offer is extended by the Company,
and, unless previously purchased, after 12:00 Mid-
night, New York City time, on December 3, 1996. See
Section 4.
Odd Lots................ There will be no proration of Shares tendered by any
stockholder owning beneficially or of record less
than 100 Shares as of the close of business on Octo-
ber 4, 1996 and as of the Expiration Date, who ten-
ders all such Shares at or below the Purchase Price
prior to the Expiration Date and who checks the "Odd
Lots" box in the Letter of Transmittal. See Sec-
tion 1.
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
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<S> <C>
INTRODUCTION.............................................................. 4
THE OFFER................................................................. 5
1. Number of Shares; Proration......................................... 5
2. Purpose of the Offer; Certain Effects of the Offer.................. 7
3. Procedures for Tendering Shares..................................... 9
4. Withdrawal Rights................................................... 13
5. Purchase of Shares and Payment of Purchase Price.................... 14
6. Certain Conditions of the Offer..................................... 15
7. Price Range of Shares; Dividends.................................... 16
8. Source and Amount of Funds.......................................... 17
9. Certain Information Concerning the Company.......................... 17
10. Interest of Directors and Officers; Transactions and Arrangements
Concerning Shares...................................................... 21
11. Effects of the Offer on the Market for Shares; Registration under
the Exchange Act....................................................... 22
12. Certain Legal Matters; Regulatory Approvals......................... 23
13. Certain United States Federal Income Tax Consequences............... 23
14. Extension of Offer, Termination; Amendment.......................... 25
15. Fees and Expenses................................................... 26
16. Miscellaneous....................................................... 27
SCHEDULE A Certain Transactions Involving Shares.......................... A-1
</TABLE>
3
<PAGE>
To the Holders of Common Stock of CPI Corp.:
INTRODUCTION
CPI Corp., a Delaware corporation (the "Company"), invites its stockholders
to tender shares of its Common Stock, par value $.40 per share (the "Shares")
(including the associated Preferred Stock Purchase Rights (the "Rights")
issued pursuant to the Rights Agreement, dated as of May 1, 1989, between the
Company and the Rights Agent named therein, as amended), to the Company at
prices not in excess of $22.00 nor less than $19.00 per Share in cash, as
specified by stockholders tendering their Shares, upon the terms and subject
to the conditions set forth herein and in the related Letter of Transmittal,
which together constitute the "Offer." The Company will determine the single
per Share price, not in excess of $22.00 nor less than $19.00 per Share, net
to the seller in cash (the "Purchase Price"), that it will pay for Shares
properly tendered pursuant to the Offer, taking into account the number of
Shares so tendered and the prices specified by tendering stockholders. The
Company will select the lowest Purchase Price that will allow it to buy
2,250,000 Shares (or such lesser number of Shares as are properly tendered at
prices not in excess of $22.00 nor less than $19.00 per Share). All Shares
properly tendered prior to the Expiration Date (as defined in Section 1) at
prices at or below the Purchase Price and not withdrawn will be purchased at
the Purchase Price, upon the terms and subject to the conditions of the Offer,
including the proration provisions. All Shares acquired in the Offer will be
acquired at the Purchase Price. Shares tendered at prices in excess of the
Purchase Price and Shares not purchased because of proration will be returned
at the Company's expense to the stockholders who tendered such Shares. The
Company reserves the right, in its sole discretion, to purchase more than
2,250,000 Shares pursuant to the Offer. See Section 14.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
STOCKHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES.
EACH STOCKHOLDER MUST MAKE THE DECISION WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES AND AT WHAT PRICE OR PRICES SHARES SHOULD BE TENDERED. THE
COMPANY HAS BEEN ADVISED THAT NONE OF ITS DIRECTORS OR EXECUTIVE OFFICERS
INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER.
Upon the terms and subject to the conditions of the Offer, if at the
expiration of the Offer more than 2,250,000 Shares (or such greater number of
Shares as the Company may elect to purchase) are properly tendered at or below
the Purchase Price and not withdrawn, the Company will buy Shares first from
all Odd Lot Holders (as defined in Section 1) who properly tender all their
Shares at or below the Purchase Price and then on a pro rata basis from all
other stockholders who properly tender Shares at prices at or below the
Purchase Price (and do not withdraw them prior to the expiration of the
Offer). See Section 1.
The Purchase Price will be paid net to the tendering stockholder in cash for
all Shares purchased. Tendering stockholders will not be obligated to pay
brokerage commissions, solicitation fees or, subject to Instruction 7 of the
Letter of Transmittal, stock transfer taxes on the purchase of Shares by the
Company. Stockholders holding Shares through brokers or banks are urged to
consult such brokers or banks to determine whether transaction costs are
applicable if stockholders tender Shares through such brokers or banks and not
directly to the Depositary. HOWEVER, ANY TENDERING STOCKHOLDER OR OTHER PAYEE
WHO FAILS TO COMPLETE, SIGN AND RETURN TO THE DEPOSITARY THE FORM W-9 THAT IS
INCLUDED WITH THE LETTER OF TRANSMITTAL MAY BE SUBJECT TO REQUIRED BACKUP
UNITED STATES FEDERAL INCOME TAX WITHHOLDING OF 31% OF THE GROSS PROCEEDS
PAYABLE TO SUCH STOCKHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. SEE SECTION
3. The Company will pay all fees and expenses of CS First Boston Corporation
("CS First Boston" or the "Dealer Manager"), Boatmen's Trust Company (the
"Depositary") and MacKenzie Partners, Inc. (the "Information Agent") incurred
in connection with the Offer. See Section 15.
4
<PAGE>
On October 7, 1996, the Company announced that it had completed its
previously announced photofinishing joint venture with Eastman Kodak Company
("Kodak") whereby Kodak purchased new shares of Fox Photo, Inc. ("Fox")
constituting 51% of the outstanding common stock of Fox for a cash purchase
price of $56.1 million, subject to adjustment (the "Photofinishing Joint
Venture Transaction"). The funds required to complete the Offer and pay
related expenses will be provided primarily by the proceeds received from the
Photofinishing Joint Venture Transaction. See Section 8.
The Board of Directors has determined that the Company's financial condition
and outlook and current market conditions, including recent trading prices of
the Shares, make this an attractive time to repurchase a significant portion
of the outstanding Shares. In the view of the Board of Directors, the Offer
represents a significant acceleration and expansion of what would otherwise
have been a continuing share repurchase program and an attractive investment
and use of proceeds of the Photofinishing Joint Venture Transaction that
should benefit the Company and its stockholders over the long term. In
particular, the Board of Directors believes that the purchase of Shares at
this time is consistent with the Company's long term corporate goal of seeking
to increase stockholder value.
The Offer provides stockholders who are considering a sale of all or a
portion of their Shares with the opportunity to determine the price or prices
(not in excess of $22.00 nor less than $19.00 per Share) at which they are
willing to sell their Shares and, subject to the terms and conditions of the
Offer, to sell those Shares for cash without the usual transaction costs
associated with market sales. In addition, stockholders owning fewer than 100
Shares whose Shares are purchased pursuant to the Offer not only will avoid
the payment of brokerage commissions but also will avoid any applicable odd-
lot discounts payable on a sale of their Shares in a NYSE transaction. The
Offer also allows stockholders to sell a portion of their Shares while
retaining a continuing equity interest in the Company. Stockholders who
determine not to accept the Offer will realize a proportionate increase in
their relative equity interest in the Company, and thus in the Company's
future earnings and assets subject to the Company's right to issue additional
Shares and other equity securities in the future.
As of September 24, 1996, the Company had issued and outstanding 13,919,062
Shares and had reserved 1,773,753 Shares for issuance upon exercise of
outstanding stock options ("Options") under the Company's Stock Option Plan
and the Company's Voluntary Stock Option Plan (collectively the "Option
Plans") and had reserved 29,880 Shares for issuance with respect to unvested
awards under the Company's 1981 Stock Bonus Plan (the "Stock Bonus Plan"). The
2,250,000 Shares that the Company is offering to purchase pursuant to the
Offer represent approximately 16% of the Company's Shares outstanding on
September 24, 1996 (approximately 14% assuming exercise of outstanding
Options). The Shares are listed and traded on the NYSE under the symbol "CPY."
On August 16, 1996, the last full trading day on the NYSE prior to the
announcement of the Offer, the closing per Share sales price as reported on
the NYSE Composite Tape was $17.625. On October 4, 1996, the last full trading
day on the NYSE prior to the commencement of the Offer, the closing per Share
sales price as reported on the NYSE Composite Tape was $19.50. STOCKHOLDERS
ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. See Section 7.
THE OFFER
1. NUMBER OF SHARES; PRORATION.
Upon the terms and subject to the conditions of the Offer, the Company will
purchase 2,250,000 Shares or such lesser number of Shares as are properly
tendered (and not withdrawn in accordance with Section 4) prior to the
Expiration Date (as defined below) at prices not in excess of $22.00 nor less
than $19.00 per Share in cash. The term "Expiration Date" means 12:00
Midnight, New York City time, on Monday, November 4, 1996 unless and until the
Company, in its sole discretion, shall have extended the period of time during
which the Offer will remain open, in which event the term "Expiration Date"
shall refer to the latest time and date at which the Offer, as so extended by
the Company, shall expire. See Section 14 for a description of the Company's
5
<PAGE>
right to extend, delay, terminate or amend the Offer. The Company reserves the
right to purchase more than 2,250,000 Shares pursuant to the Offer. In
accordance with applicable regulations of the Securities and Exchange
Commission (the "Commission"), the Company may purchase pursuant to the Offer
an additional amount of Shares not to exceed 2% of the outstanding Shares
without amending or extending the Offer. See Section 14. In the event of an
over-subscription of the Offer as described below, Shares tendered at or below
the Purchase Price prior to the Expiration Date will be subject to proration,
except for Odd Lots as explained below. The proration period also expires on
the Expiration Date.
The Company will select the lowest Purchase Price that will allow it to buy
2,250,000 Shares (or such lesser number of Shares as are properly tendered at
prices not in excess of $22.00 nor less than $19.00 per Share). All Shares
properly tendered at prices at or below the Purchase Price and not withdrawn
will be purchased at the Purchase Price, upon the terms and subject to the
conditions of the Offer, including the proration provisions. All Shares
purchased in the Offer will be purchased at the Purchase Price.
THE OFFER IS NOT CONDITIONED ON THE TENDER OF ANY MINIMUM NUMBER OF SHARES,
BUT IS SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6.
In accordance with Instruction 5 of the Letter of Transmittal, stockholders
desiring to tender Shares must specify the price, not in excess of $22.00 nor
less than $19.00 per Share, at which they are willing to sell their Shares to
the Company. As promptly as practicable following the Expiration Date, the
Company will, in its sole discretion, determine the Purchase Price that it
will pay for Shares properly tendered pursuant to the Offer and not withdrawn,
taking into account the number of Shares tendered and the prices specified by
tendering stockholders. The Company intends to select the lowest Purchase
Price, not in excess of $22.00 nor less than $19.00 net per Share in cash,
that will enable it to purchase 2,250,000 Shares (or such lesser number of
Shares as are properly tendered) pursuant to the Offer. Shares properly
tendered pursuant to the Offer at or below the Purchase Price and not
withdrawn will be purchased at the Purchase Price, upon the terms and subject
to the conditions of the Offer, including the proration provisions. All Shares
tendered and not purchased pursuant to the Offer, including Shares tendered at
prices in excess of the Purchase Price and Shares not purchased because of
proration, will be returned to the tendering stockholders at the Company's
expense as promptly as practicable following the Expiration Date.
Priority of Purchases. Upon the terms and subject to the conditions of the
Offer, if more than 2,250,000 Shares (or such greater number of Shares as the
Company may elect to purchase) have been properly tendered at prices at or
below the Purchase Price and not withdrawn prior to the Expiration Date, the
Company will purchase properly tendered Shares on the basis set forth below:
(a) first, all Shares tendered and not withdrawn prior to the Expiration
Date by any Odd Lot Holder (as defined below) who:
(1) tenders all Shares beneficially owned by such Odd Lot Holder at a
price at or below the Purchase Price (tenders of less than all Shares
owned by such stockholder will not qualify for this preference); and
(2) completes the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery;
and
(b) second, after purchase of all of the foregoing Shares, all other
Shares properly tendered at prices at or below the Purchase Price and not
withdrawn prior to the Expiration Date, on a pro rata basis (with
appropriate adjustments to avoid purchases of fractional Shares) as
described below.
Odd Lots. For purposes of the Offer, the term "Odd Lots" shall mean all
Shares properly tendered prior to the Expiration Date at prices at or below
the Purchase Price and not withdrawn by any person (an "Odd Lot Holder") who
owned, beneficially or of record, as of the close of business on October 4,
1996 and as of the
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Expiration Date, an aggregate of fewer than 100 Shares and so certified in the
appropriate place on the Letter of Transmittal and, if applicable, on the
Notice of Guaranteed Delivery. In order to qualify for this preference, an Odd
Lot Holder must tender all such Shares in accordance with the procedures
described in Section 3. As set forth above, Odd Lots will be accepted for
payment before proration, if any, of the purchase of other tendered Shares.
This preference is not available to partial tenders or to beneficial or record
holders of an aggregate of 100 or more Shares, even if such holders have
separate accounts or certificates representing fewer than 100 Shares. By
accepting the Offer, an Odd Lot Holder would not only avoid the payment of
brokerage commissions but also would avoid any applicable odd lot discounts in
a sale of such holder's Shares. Any stockholder wishing to tender all of such
stockholder's Shares pursuant to this Section should complete the box
captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on the
Notice of Guaranteed Delivery.
The Company also reserves the right, but will not be obligated, to purchase
all Shares properly tendered by any stockholder who tendered all Shares owned,
beneficially or of record, at or below the Purchase Price and who, as a result
of proration, would then own, beneficially, an aggregate of fewer than 100
Shares. If the Company exercises this right, it will increase the number of
Shares that it is offering to purchase by the number of Shares purchased
through the exercise of the right.
Proration. In the event that proration of tendered Shares is required, the
Company will determine the proration factor as soon as practicable following
the Expiration Date. Proration for each stockholder tendering Shares, other
than Odd Lot Holders, shall be based on the ratio of the number of Shares
properly tendered and not withdrawn by such stockholder to the total number of
Shares properly tendered and not withdrawn by all stockholders, other than Odd
Lot Holders, at or below the Purchase Price. Because of the difficulty in
determining the number of Shares properly tendered (including Shares tendered
by guaranteed delivery procedures, as described in Section 3) and not
withdrawn, and because of the odd lot procedure, the Company does not expect
that it will be able to announce the final proration factor or commence
payment for any Shares purchased pursuant to the Offer until approximately
seven NYSE trading days after the Expiration Date. The preliminary results of
any proration will be announced by press release as promptly as practicable
after the Expiration Date. Stockholders may obtain such preliminary
information from the Information Agent or the Dealer Manager and may be able
to obtain such information from their brokers.
As described in Section 13, the number of Shares that the Company will
purchase from a stockholder may affect the United States federal income tax
consequences to the stockholder of such purchase and, therefore, may be
relevant to a stockholder's decision whether or not to tender Shares. The
Letter of Transmittal affords each tendering stockholder the opportunity to
designate the order of priority in which Shares tendered are to be purchased
in the event of proration.
This Offer to Purchase and the related Letter of Transmittal will be mailed
to record holders of Shares and will be furnished to brokers, banks and
similar persons whose names, or the names of whose nominees, appear on the
Company's stockholder list or, if applicable, who are listed as participants
in a clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
2. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER.
The Offer provides stockholders who are considering a sale of all or a
portion of their Shares with the opportunity to determine the price or prices
(not in excess of $22.00 nor less than $19.00 per Share) at which they are
willing to sell their Shares and, subject to the terms and conditions of the
Offer, to sell those Shares for cash without the usual transaction costs
associated with market sales. In addition, Odd Lot Holders whose Shares are
purchased pursuant to the Offer not only will avoid the payment of brokerage
commissions but also will avoid any applicable odd lot discounts payable on a
sale of their Shares in a NYSE transaction. The Offer also allows stockholders
to sell a portion of their Shares while retaining a continuing equity interest
in the Company.
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Stockholders who determine not to accept the Offer will realize a
proportionate increase in their relative equity interest in the Company, and
thus in the Company's future earnings and assets, subject to the Company's
right to issue additional Shares and other equity securities in the future.
On August 8, 1996, the Company announced that it had entered into a
definitive agreement with Kodak to establish a joint venture with Kodak to own
and operate the Company's former retail photofinishing business. On October 7,
1996 the Company announced that it had completed the Photofinishing Joint
Venture Transaction. Upon completion of the Photofinishing Joint Venture
Transaction, Kodak purchased new shares of Fox constituting 51% of the
outstanding common stock of Fox for a cash purchase price of $56.1 million.
The purchase price is subject to upward or downward adjustment to account for
changes in Fox's net worth between April 27, 1996 and October 4, 1996.
Pursuant to the terms of a Stockholders' Agreement (the "Stockholders'
Agreement") entered into by Kodak, the Company, Consumer Programs Holding,
Inc. and Fox at completion of the Photofinishing Joint Venture Transaction, at
any time from and after January 1, 1999 Kodak can require the Company to sell
its interest in Fox and the Company can require Kodak to purchase the
Company's interest in Fox for a price equal to 49% of the difference resulting
from (A) Fox's "fair market value" (as determined pursuant to the
Stockholders' Agreement at the time such "put" or "call" right is exercised)
minus (B) $30.0 million. In no event, however, will such purchase price for
the Company's remaining interest in Fox be less than $53.9 million.
Additionally, prior to January 1, 1999, the Stockholders' Agreement will
entitle Kodak to require that the Company sell its remaining interest in Fox
to Kodak upon a "change in control" (as defined in the Stockholders'
Agreement) of the Company for a purchase price of $53.9 million.
The Photofinishing Joint Venture Transaction also includes provisions
whereby, in return for certain support, administrative and consulting services
to be provided to Fox, the Company or its affiliates will receive certain
fees. See "Certain Information Concerning the Company--Summary Unaudited
Consolidated Financial Information" below.
The Board of Directors has determined that the Company's financial condition
and outlook and current market conditions, including recent trading prices of
the Shares, make this an attractive time to repurchase a significant portion
of the outstanding Shares. In the view of the Board of Directors, the Offer
represents a significant acceleration and expansion of what would otherwise
have been a continuing share repurchase program and an attractive investment
and use of the proceeds of the Photofinishing Joint Venture Transaction that
should benefit the Company and its stockholders over the long term. In
particular, the Board of Directors believes that the purchase of Shares at
this time is consistent with the Company's long term corporate goal of seeking
to increase stockholder value. The funds required to complete the Offer and
pay related expenses will be provided by the proceeds received from the
Photofinishing Joint Venture Transaction. See Section 8.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
STOCKHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES
AND NEITHER HAS AUTHORIZED ANY PERSON TO MAKE ANY SUCH RECOMMENDATION.
STOCKHOLDERS ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN THE OFFER,
CONSULT THEIR OWN INVESTMENT AND TAX ADVISORS AND MAKE THEIR OWN DECISIONS
WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE
OR PRICES AT WHICH TO TENDER. THE COMPANY HAS BEEN ADVISED THAT NONE OF ITS
DIRECTORS OR EXECUTIVE OFFICERS INTENDS TO TENDER ANY SHARES PURSUANT TO THE
OFFER.
The Company may in the future purchase additional Shares on the open market,
in private transactions, through tender offers or otherwise, subject to the
approval of the Board of Directors. The Company's Board has previously
authorized a 4.5 million Share stock repurchase program pursuant to which the
Company has previously purchased 3,302,548 Shares and may purchase an
additional 1,197,452 Shares in the future. Any such purchases may be on the
same terms or on terms which are more or less favorable to stockholders than
the terms of the Offer. However, Rule 13e-4 under the Securities Exchange Act
of 1934, as amended (the "Exchange
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Act"), prohibits the Company and its affiliates from purchasing any Shares,
other than pursuant to the Offer, until at least ten business days after the
Expiration Date. Any possible future purchases by the Company will depend on
many factors, including the market price of the Shares, the results of the
Offer, the Company's business and financial position and general economic and
market conditions.
Shares the Company acquires pursuant to the Offer will be held in the
Company's treasury (unless and until the Company determines to retire such
Shares) and will be available for the Company to issue without further
stockholder action (except as required by applicable law or the rules of the
NYSE or any other securities exchange on which the Shares are listed) for
purposes including, but not limited to, the acquisition of other businesses,
the raising of additional capital for use in the Company's business and the
satisfaction of obligations under existing or future employee benefit plans.
The Company has no current plans for issuance of the Shares repurchased
pursuant to the Offer.
3. PROCEDURES FOR TENDERING SHARES.
Proper Tender of Shares. For Shares to be tendered properly pursuant to the
Offer, (a) the certificates for such Shares (or confirmation of receipt of
such Shares pursuant to the procedures for book-entry transfer set forth
below), together with a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile thereof) including any required
signature guarantees and any other documents required by the Letter of
Transmittal, must be received prior to 12:00 Midnight, New York City time, on
the Expiration Date by the Depositary at its address set forth on the back
cover of this Offer to Purchase or (b) the tendering stockholder must comply
with the guaranteed delivery procedure set forth below. IN ACCORDANCE WITH
INSTRUCTION 5 OF THE LETTER OF TRANSMITTAL, STOCKHOLDERS DESIRING TO TENDER
SHARES PURSUANT TO THE OFFER MUST PROPERLY INDICATE IN THE SECTION CAPTIONED
"PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED" ON THE
LETTER OF TRANSMITTAL THE PRICE (IN MULTIPLES OF $.125) AT WHICH THEIR SHARES
ARE BEING TENDERED. Stockholders who desire to tender Shares at more than one
price must complete a separate Letter of Transmittal for each price at which
Shares are tendered, provided that the same Shares cannot be tendered (unless
properly withdrawn previously in accordance with the terms of the Offer) at
more than one price. TO PROPERLY TENDER SHARES, ONE AND ONLY ONE PRICE BOX
MUST BE CHECKED IN THE APPROPRIATE SECTION ON EACH LETTER OF TRANSMITTAL.
IN ADDITION, ODD LOT HOLDERS WHO TENDER ALL SUCH SHARES MUST COMPLETE THE
BOX CAPTIONED "ODD LOTS" ON THE LETTER OF TRANSMITTAL AND, IF APPLICABLE, ON
THE NOTICE OF GUARANTEED DELIVERY, TO QUALIFY FOR THE PREFERENTIAL TREATMENT
AVAILABLE TO ODD LOT HOLDERS AS SET FORTH IN SECTION 1.
Stockholders who hold Shares through brokers or banks are urged to consult
such brokers or banks to determine whether transaction costs are applicable if
stockholders tender Shares through such brokers or banks and not directly to
the Depositary.
Signature Guarantees and Method of Delivery. No signature guarantee is
required: (i) if the Letter of Transmittal is signed by the registered holder
of the Shares (which term, for purposes of this Section 3, shall include any
participant in The Depository Trust Company, the Midwest Securities Trust
Company or the Philadelphia Depository Trust Company (each, a "Book-Entry
Transfer Facility" and collectively, the "Book-Entry Transfer Facilities")
whose name appears on a security position listing as the owner of the Shares)
tendered therewith and such holder has not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal; or (ii) if Shares are tendered for
the account of a member firm of a registered national securities exchange, a
member of the National Association of Securities Dealers, Inc. or a commercial
bank or trust company having an office, branch or agency in the United States
(each such entity being hereinafter referred to as an "Eligible Institution").
See Instruction 1 of the Letter of Transmittal. If a certificate for Shares is
registered in the name of a person other than the person executing a Letter of
Transmittal, or if payment is to be made, or Shares not purchased or tendered
are to be issued, to a person other than the registered holder, then the
certificate must be endorsed or accompanied by an appropriate stock power, in
either case, signed exactly as the name of the registered holder appears on
the certificate, or stock power guaranteed by an Eligible Institution.
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In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of
certificates for such Shares (or a timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at a Book-Entry Transfer
Facility as described above), a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile thereof) and any other documents
required by the Letter of Transmittal. THE METHOD OF DELIVERY OF ALL
DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES, THE LETTER OF TRANSMITTAL AND
ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND RISK OF THE TENDERING
STOCKHOLDER. IF DELIVERY IS BY MAIL, THEN REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
Book-Entry Delivery. The Depositary will establish an account with respect
to the Shares for purposes of the Offer at each Book-Entry Transfer Facility
within two business days after the date of this Offer to Purchase, and any
financial institution that is a participant in the respective Book-Entry
Transfer Facility's system may make book-entry delivery of the Shares by
causing such facility to transfer Shares into the Depositary's account in
accordance with the respective Book-Entry Transfer Facility's procedures for
transfer. Although delivery of Shares may be effected through a book-entry
transfer into the Depositary's account at the Book-Entry Transfer Facility,
either (i) a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile thereof) with any required signature guarantees and
any other required documents must, in any case, be transmitted to and received
by the Depositary at its address set forth on the back cover of this Offer to
Purchase prior to the Expiration Date, or (ii) the guaranteed delivery
procedure described below must be followed. DELIVERY OF DOCUMENTS TO A BOOK-
ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Backup United States Federal Income Tax Withholding. Under the United States
federal income tax backup withholding rules, unless an exemption applies under
the applicable law and regulations, 31% of the gross proceeds payable to a
stockholder or other payee pursuant to the Offer must be withheld and remitted
to the United States Treasury, unless the stockholder or other payee provides
his or her taxpayer identification number (employer identification number or
social security number) to the Depositary and certifies that such number is
correct. Therefore, each tendering stockholder should complete and sign the
Substitute Form W-9 included as part of the Letter of Transmittal so as to
provide the information and certification necessary to avoid backup
withholding, unless such stockholder otherwise establishes to the satisfaction
of the Depositary that it is not subject to backup withholding. Certain
stockholders (including, among others, all corporations and certain foreign
stockholders (in addition to foreign corporations)) are not subject to these
backup withholding and reporting requirements. In order for a foreign
stockholder to qualify as an exempt recipient, that stockholder must submit an
IRS Form W-8 or a Substitute Form W-8, signed under penalties of perjury,
attesting to that stockholder's exempt status. Such statements can be obtained
from the Depositary. See Instruction 14 of the Letter of Transmittal.
TO PREVENT BACKUP UNITED STATES FEDERAL INCOME TAX WITHHOLDING EQUAL TO 31%
OF THE GROSS PAYMENTS MADE TO STOCKHOLDERS FOR SHARES PURCHASED PURSUANT TO
THE OFFER, EACH STOCKHOLDER WHO DOES NOT OTHERWISE ESTABLISH AN EXEMPTION FROM
SUCH WITHHOLDING MUST PROVIDE THE DEPOSITARY WITH THE STOCKHOLDER'S CORRECT
TAXPAYER IDENTIFICATION NUMBER AND PROVIDE CERTAIN OTHER INFORMATION BY
COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED WITH THE LETTER OF TRANSMITTAL.
For a discussion of certain United States federal income tax consequences to
tendering stockholders, see Section 13.
Withholding For Foreign Stockholders. Even if a foreign stockholder has
provided the required certification to avoid backup withholding, the
Depositary will withhold United States federal income taxes equal to 30% of
the gross payments payable to a foreign stockholder or his agent unless the
Depositary determines that a reduced rate of withholding is available pursuant
to a tax treaty or that an exemption from withholding is applicable because
such gross proceeds are effectively connected with the conduct of a trade or
business within
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the United States. For this purpose, a foreign stockholder is any stockholder
that is not (i) a citizen or resident of the United States, (ii) a
corporation, partnership, or other entity created or organized in or under the
laws of the United States, any State or any political subdivision thereof or
(iii) an estate or trust the income of which is subject to United States
federal income taxation regardless of the source of such income. In order to
obtain a reduced rate of withholding pursuant to a tax treaty, a foreign
stockholder must deliver to the Depositary before the payment a properly
completed and executed IRS Form 1001. In order to obtain an exemption from
withholding on the grounds that the gross proceeds paid pursuant to the Offer
are effectively connected with the conduct of a trade or business within the
United States, a foreign stockholder must deliver to the Depositary a properly
completed and executed IRS Form 4224. The Depositary will determine a
stockholder's status as a foreign stockholder and eligibility for a reduced
rate of, or exemption from, withholding by reference to any outstanding
certificates or statements concerning eligibility for a reduced rate of, or
exemption from, withholding (e.g., IRS Form 1001 or IRS Form 4224) unless
facts and circumstances indicate that such reliance is not warranted. A
foreign stockholder may be eligible to obtain a refund of all or a portion of
any tax withheld if such stockholder meets the "complete redemption,"
"substantially disproportionate" or "not essentially equivalent to a dividend"
test described in Section 13 or is otherwise able to establish that no tax or
a reduced amount of tax is due. Backup withholding generally will not apply to
amounts subject to the 30% or a treaty-reduced rate of withholding. Foreign
stockholders are urged to consult their own tax advisors regarding the
application of United States federal income tax withholding, including
eligibility for a withholding tax reduction or exemption, and the refund
procedure. See Instruction 15 of the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share certificates cannot be delivered to the
Depositary prior to the Expiration Date (or the procedures for book-entry
transfer cannot be completed on a timely basis) or if time will not permit all
required documents to reach the Depositary prior to the Expiration Date, such
Shares may nevertheless be tendered, provided that all of the following
conditions are satisfied:
(a) such tender is made by or through an Eligible Institution;
(b) the Depositary receives by hand, mail, overnight carrier, telegram or
facsimile transmission, prior to the Expiration Date, a properly completed
and duly executed Notice of Guaranteed Delivery substantially in the form
the Company has provided with this Offer to Purchase (specifying the price
at which the Shares are being tendered), including (where required) a
signature guarantee by an Eligible Institution; and
(c) the certificates for all tendered Shares, in proper form for transfer
(or confirmation of book-entry transfer of such Shares into the
Depositary's account at one of the Book-Entry Transfer Facilities),
together with a properly completed and duly executed Letter of Transmittal
(or a manually signed facsimile thereof) and any required signature
guarantees or other documents required by the Letter of Transmittal, are
received by the Depositary within three NYSE trading days after the date of
receipt by the Depositary of such Notice of Guaranteed Delivery.
If any tendered Shares are not purchased, or if less than all Shares
evidenced by a stockholder's certificates are tendered, certificates for
unpurchased Shares will be returned as promptly as practicable after the
expiration or termination of the Offer or, in the case of Shares tendered by
book-entry transfer at a Book-Entry Transfer Facility, such Shares will be
credited to the appropriate account maintained by the tendering stockholder at
the appropriate Book-Entry Transfer Facility, in each case without expense to
such stockholder.
Dividend Reinvestment Plan. Shares credited to participants' accounts under
the Company's Dividend Reinvestment Plan (the "Dividend Reinvestment Plan")
will be tendered by Boatmen's Trust Company, as administrator, according to
instructions provided to the administrator from participants in the Dividend
Reinvestment Plan. Dividend Reinvestment Plan Shares for which the
administrator has not received timely instructions from participants will not
be tendered. The administrator will make available to the participants whose
accounts are credited with Shares under the Dividend Reinvestment Plan all
documents furnished to stockholders generally in connection with the Offer.
BECAUSE THE DEPOSITARY FOR THE OFFER ALSO ACTS AS ADMINISTRATOR OF THE
DIVIDEND REINVESTMENT PLAN, PARTICIPANTS IN THE DIVIDEND REINVESTMENT PLAN MAY
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USE THE LETTER OF TRANSMITTAL TO INSTRUCT THE ADMINISTRATOR REGARDING THE
OFFER BY COMPLETING THE BOX ENTITLED "TENDER OF DIVIDEND REINVESTMENT PLAN
SHARES." Each participant may direct that all, some or none of the Shares
credited to the participant's account under the Dividend Reinvestment Plan be
tendered and the price at which such participant's Shares are to be tendered.
Participants in the Dividend Reinvestment Plan are urged to read the Letter of
Transmittal and related materials carefully.
If a participant tenders all of such participant's Dividend Reinvestment
Plan Shares, and all such Shares are purchased by the Company pursuant to the
Offer, such tender will be deemed to be authorization and written notice to
Boatmen's Trust Company of termination of such participant's participation in
the Dividend Reinvestment Plan.
Company Stock Option Plans. The Company is not offering, as part of the
Offer, to purchase any of the Options outstanding under the Company's Stock
Option Plans and tenders of such Options will not be accepted. Holders of
Options who wish to participate in the Offer may either (i) comply with the
procedures for guaranteed delivery set forth under "Guaranteed Delivery" above
without having to exercise their Options until after the results of the Offer
are known (provided, however, that an Option holder will not be required to
make the requisite tender through an Eligible Institution and may personally
execute and deliver the Notice of Guaranteed Delivery) or (ii) exercise their
Options and purchase Shares of the Company's common stock and then tender such
Shares pursuant to the Offer, provided that, in the case of either (i) or
(ii), any such exercise of an Option and tender of Shares is in accordance
with the terms of the Option Plans and the Options. In no event are any
Options to be delivered to the Depositary in connection with a tender of
Shares hereunder. An exercise of an Option cannot be revoked even if Shares
received upon the exercise thereof and tendered in the Offer are not purchased
in the Offer for any reason.
Company Restricted Stock Plan. Certain key employees of the Company have
been granted restricted shares pursuant to the provisions of the Company's
Restricted Stock Plan (the "Restricted Stock Plan"). Pursuant to the
provisions of the Restricted Stock Plan, restricted shares granted to plan
participants must remain deposited with the Company until the time that the
shares become freely transferable in accordance with the provisions of the
Restricted Stock Plan and the grant of such shares, and cannot be tendered in
the Offer by the participant until such time. Restricted shares which have
become freely transferable shall thereafter be deemed Shares and may be
tendered pursuant to the Offer. Any question with respect to the status of any
restricted shares, as to when any particular participant's restricted shares
expire or become freely transferable or whether restricted shares (which have
become freely transferable) may be tendered pursuant to the Offer may be
directed to Jane E. Nelson, General Counsel and Secretary at (314) 231-1575.
RESTRICTED SHARES WHICH HAVE NOT BECOME FREELY TRANSFERABLE MAY NOT BE
TENDERED PURSUANT TO THE OFFER.
Company Stock Bonus Plan. Holders of outstanding but unvested stock bonus
awards under the Stock Bonus Plan may not participate in the Offer with
respect to such unvested awards.
Determination of Validity; Rejection of Shares; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the number of Shares
to be accepted, the price to be paid for Shares to be accepted and the
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validity, form, eligibility (including time of receipt) and acceptance for
payment of any tender of Shares will be determined by the Company, in its sole
discretion, and its determination shall be final and binding on all parties.
The Company reserves the absolute right to reject any or all tenders of any
Shares that it determines are not in proper form or the acceptance for payment
of or payment for which may, in the opinion of the Company's counsel, be
unlawful. The Company also reserves the absolute right to waive any of the
conditions of the Offer or any defect or irregularity in any tender with
respect to any particular Shares or any particular stockholder and the
Company's interpretation of the terms of the Offer will be final and binding
on all parties. No tender of Shares will be deemed to have been properly made
until all defects or irregularities have been cured by the tendering
stockholder or waived by the Company. None of the Company, the Dealer Manager,
the Depositary, the Information Agent or any other person shall be obligated
to give notice of any defects or irregularities in tenders, nor shall any of
them incur any liability for failure to give any such notice.
Tendering Stockholder's Representation and Warranty; Company's Acceptance
Constitutes an Agreement. 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 the Company that (a) such stockholder has a net
long position in the Shares being tendered within the meaning of Rule 14e-4
promulgated by the Commission under the Exchange Act and (b) the tender of
such Shares complies with Rule 14e-4. 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 and at the end of the proration period or period
during which Shares are accepted by lot (including any extensions thereof),
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 convertible into or
exchangeable or exercisable for the Shares tendered and will acquire such
Shares for tender by conversion, exchange or exercise and (ii) will deliver or
cause to be delivered such Shares 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. The Company's acceptance
for payment of Shares tendered pursuant to the Offer will constitute a binding
agreement between the tendering stockholder and the Company upon the terms and
conditions of the Offer.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares pursuant
to the Offer are irrevocable. Shares tendered pursuant to the Offer may be
withdrawn at any time prior to the Expiration Date and, unless theretofore
accepted for payment by the Company pursuant to the Offer, may also be
withdrawn at any time after 12:00 Midnight, New York City time, on December 3,
1996.
For a withdrawal to be effective, a notice of withdrawal must be in written,
telegraphic or facsimile transmission form and must be received in a timely
manner by the Depositary at its address set forth on the back cover of this
Offer to Purchase. Any such notice of withdrawal must specify the name of the
tendering stockholder, the name of the registered holder, if different from
that of the person who tendered such Shares, the number of Shares tendered and
the number of Shares to be withdrawn. If the certificates for Shares to be
withdrawn have been delivered or otherwise identified to the Depositary, then,
prior to the release of such certificates, the tendering stockholder must also
submit the serial numbers shown on the particular certificates for 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 by an
Eligible Institution). If Shares have been tendered pursuant to the procedure
for book-entry tender set forth in Section 3, the notice of withdrawal also
must specify the name and the number of the account at the applicable Book-
Entry Transfer Facility to be credited with the withdrawn Shares and otherwise
comply with the procedures of such facility. None of the Company, the Dealer
Manager, the Depositary, the Information Agent or any other person shall be
obligated to give notice of any defects or irregularities in any notice of
withdrawal nor shall any of them incur liability for failure to give any such
notice. All questions as to the form and validity (including time of receipt)
of notices of withdrawal will be determined by the Company, in its sole
discretion, which determination shall be final and binding.
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Withdrawals may not be rescinded and any Shares withdrawn will thereafter be
deemed not properly tendered for purposes of the Offer unless such withdrawn
Shares are properly retendered prior to the Expiration Date by again following
one of the procedures described in Section 3.
If the Company extends the Offer, is delayed in its purchase of Shares or is
unable to purchase Shares pursuant to the Offer for any reason, then, without
prejudice to the Company's rights under the Offer, the Depositary may, subject
to applicable law, retain tendered Shares on behalf of the Company, and such
Shares may not be withdrawn except to the extent tendering stockholders are
entitled to withdrawal rights as described in this Section 4.
5. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE.
Upon the terms and subject to the conditions of the Offer, as promptly as
practicable following the Expiration Date, the Company (i) will determine the
Purchase Price it will pay for the Shares properly tendered and not withdrawn
prior to the Expiration Date, taking into account the number of Shares so
tendered and the prices specified by tendering stockholders, and (ii) will
accept for payment and pay for (and thereby purchase) Shares properly tendered
at prices at or below the Purchase Price and not withdrawn prior to the
Expiration Date. For purposes of the Offer, the Company will be deemed to have
accepted for payment (and therefore purchased) Shares that are properly
tendered at or below the Purchase Price and not withdrawn (subject to the
proration provisions of the Offer) only when, as and if it gives oral or
written notice to the Depositary of its acceptance of such Shares for payment
pursuant to the Offer.
Upon the terms and subject to the conditions of the Offer, promptly
following the Expiration Date the Company will accept for payment and pay a
single per Share Purchase Price for 2,250,000 Shares (subject to increase or
decrease as provided in Section 14) or such lesser number of Shares as are
properly tendered at prices not in excess of $22.00 nor less than $19.00 per
Share and not withdrawn as permitted in Section 4.
The Company will pay for Shares purchased pursuant to the Offer by
depositing the aggregate Purchase Price therefor with the Depositary, which
will act as agent for tendering stockholders for the purpose of receiving
payment from the Company and transmitting payment to the tendering
stockholders.
In the event of proration, the Company will determine the proration factor
and pay for those tendered Shares accepted for payment as soon as practicable
after the Expiration Date; however, the Company does not expect to be able to
announce the final results of any proration and commence payment for Shares
purchased until approximately seven NYSE trading days after the Expiration
Date. Certificates for all Shares tendered and not purchased, including all
Shares tendered at prices in excess of the Purchase Price and Shares not
purchased due to proration, will be returned (or, in the case of Shares
tendered by book-entry transfer, such Shares will be credited to the account
maintained with the applicable Book-Entry Transfer Facility by the participant
therein who so delivered such Shares) to the tendering stockholder at the
Company's expense as promptly as practicable after the Expiration Date without
expense to the tendering stockholders. Under no circumstances will interest on
the Purchase Price be paid by the Company by reason of any delay in making
payment. In addition, if certain events occur, the Company may not be
obligated to purchase Shares pursuant to the Offer. See Section 6.
The Company will pay all stock transfer taxes, if any, payable on the
transfer to it of Shares purchased pursuant to the Offer. If, however, payment
of the Purchase Price is to be made to, or (in the circumstances permitted by
the Offer) if unpurchased Shares are to be registered in the name of, any
person other than the registered holder, or if tendered certificates are
registered in the name of any person other than the person signing the Letter
of Transmittal, the amount of all stock transfer taxes, if any (whether
imposed on the registered holder or such other person), payable on account of
the transfer to such person will be deducted from the Purchase Price unless
satisfactory evidence of the payment of the stock transfer taxes, or exemption
therefrom, is submitted. See Instruction 7 of the Letter of Transmittal.
14
<PAGE>
ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY, SIGN
AND RETURN TO THE DEPOSITARY THE FORM W-9 INCLUDED WITH THE LETTER OF
TRANSMITTAL MAY BE SUBJECT TO REQUIRED BACKUP FEDERAL INCOME TAX WITHHOLDING
OF 31% OF THE GROSS PROCEEDS PAID TO SUCH STOCKHOLDER OR OTHER PAYEE PURSUANT
TO THE OFFER. SEE SECTION 3. ALSO SEE SECTION 3 REGARDING UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES FOR FOREIGN STOCKHOLDERS.
6. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, the Company shall not be
required to accept for payment, purchase or pay for any Shares tendered, and
may terminate or amend the Offer or may postpone the acceptance for payment
of, or the purchase of and the payment for Shares tendered, subject to Rule
13e-4(f) under the Exchange Act, if at any time on or after October 7, 1996
and prior to the time of payment for any such Shares (whether any Shares have
theretofore been accepted for payment, purchased or paid for pursuant to the
Offer) any of the following events shall have occurred (or shall have been
determined by the Company to have occurred) that, in the Company's judgment in
any such case and regardless of the circumstances giving rise thereto
(including any action or omission to act by the Company), makes it inadvisable
to proceed with the Offer or with such acceptance for payment:
(a) there shall have been threatened, instituted or pending any action or
proceeding by any government or governmental, regulatory or administrative
agency, authority or tribunal or any other person, domestic or foreign,
before any court, authority, agency or tribunal that directly or indirectly
(i) challenges the making of the Offer, the acquisition of some or all of
the Shares pursuant to the Offer or otherwise relates in any manner to the
Offer, or (ii) in the Company's sole judgment, could materially and
adversely affect the business, condition (financial or other), income,
operations or prospects of the Company and its subsidiaries, taken as a
whole, or otherwise materially impair in any way the contemplated future
conduct of the business of the Company or any of its subsidiaries or
materially impair the contemplated benefits of the Offer to the Company;
(b) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered,
amended, enforced or deemed to be applicable to the Offer or the Company or
any of its subsidiaries, by any court or any authority, agency or tribunal
that, in the Company's sole judgment, would or might directly or indirectly
(i) make the acceptance for payment of, or payment for, some or all of the
Shares illegal or otherwise restrict or prohibit consummation of the Offer,
(ii) delay or restrict the ability of the Company, or render the Company
unable, to accept for payment or pay for some or all of the Shares, (iii)
materially impair the contemplated benefits of the Offer to the Company or
(iv) materially and adversely affect the business, condition (financial or
other), income, operations or prospects of the Company and its
subsidiaries, taken as a whole, or otherwise materially impair in any way
the contemplated future conduct of the business of the Company or any of
its subsidiaries;
(c) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on any national securities exchange
or in the over-the-counter market, (ii) the declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States, (iii) the commencement of a war, armed hostilities or other
international or national calamity directly or indirectly involving the
United States, (iv) any limitation (whether or not mandatory) by any
governmental, regulatory or administrative agency or authority on, or any
event that, in the Company's sole judgment, might affect, the extension of
credit by banks or other lending institutions in the United States, (v) any
significant decrease in the market price of the Shares or any change in the
general political, market, economic or financial conditions in the United
States or abroad that could, in the sole judgment of the Company, have a
material adverse effect on the Company's business, operations or prospects
or the trading in the Shares, (vi) in the case of any of the foregoing
existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof or (vii) any decline in either the Dow
Jones Industrial Average or the
15
<PAGE>
Standard and Poor's Index of 500 Industrial Companies by an amount in
excess of 10% measured from the close of business on October 4, 1996;
(d) a tender or exchange offer for any or all of the Shares (other than
the Offer), or any merger, business combination or other similar
transaction with or involving the Company or any subsidiary, shall have
been proposed, announced or made by any person;
(e) (i) any entity, "group" (as that term is used in Section 13(d)(3) of
the Exchange Act) or person shall have acquired or proposed to acquire
beneficial ownership of more than 5% of the outstanding Shares (other than
any such person, entity or group who has filed a Schedule 13D or Schedule
13G with the Commission on or before October 4, 1996), (ii) any such
entity, group or person who has filed a Schedule 13D or Schedule 13G with
the Commission on or before October 4, 1996 shall have acquired or proposed
to acquire beneficial ownership of an additional 2% or more of the
outstanding Shares or (iii) any person, entity or group shall have filed a
Notification and Report Form under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 or made a public announcement reflecting an intent
to acquire the Company or any of its subsidiaries or any of their
respective assets or securities other than in connection with a transaction
authorized by the Board of Directors of the Company.
(f) any change or changes shall have occurred in the business, financial
condition, assets, income, operations, prospects or stock ownership of the
Company or its subsidiaries that, in the Company's sole judgment, is or may
be material to the Company or its subsidiaries.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances (including any action
or inaction by the Company) giving rise to any such condition, and may be
waived by the Company, in whole or in part, at any time and from time to time
in its sole discretion. The Company's failure 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. Any determination by the Company concerning the events
described above will be final and binding.
7. PRICE RANGE OF SHARES; DIVIDENDS.
The Shares are listed and traded on the NYSE. The following table sets
forth, for the fiscal quarters indicated, the high and low closing per Share
sales prices on the NYSE Composite Tape as compiled from published financial
sources and the cash dividends paid, or to be paid, per Share in each of the
Company's fiscal quarter:
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
------ ------ ---------
<S> <C> <C> <C>
1994:
1st Quarter...................................... $16.63 $14.50 $0.14
2nd Quarter...................................... 18.13 14.25 0.14
3rd Quarter...................................... 21.88 17.25 0.14
4th Quarter...................................... 20.50 13.88 0.14
1995:
1st Quarter...................................... $17.75 $14.25 $0.14
2nd Quarter...................................... 21.75 16.88 0.14
3rd Quarter...................................... 22.13 17.75 0.14
4th Quarter...................................... 21.13 14.50 0.14
1996:
1st Quarter...................................... $16.88 $14.63 $0.14
2nd Quarter...................................... 18.25 14.75 0.14
3rd Quarter (through October 4, 1996)............ 19.50 13.88 0.14
</TABLE>
16
<PAGE>
On August 16, 1996, the last full trading day on the NYSE prior to the
announcement of the Offer, the closing per Share sales price on the NYSE
Composite Tape was $17.625. On October 4, 1996, the last full trading day on
the NYSE prior to the commencement of the Offer, the closing per Share sales
price on the NYSE Composite Tape was $19.50. STOCKHOLDERS ARE URGED TO OBTAIN
CURRENT MARKET QUOTATIONS FOR THE SHARES.
8. SOURCE AND AMOUNT OF FUNDS.
Assuming the Company purchases 2,250,000 Shares pursuant to the Offer at a
purchase price of $22.00 per Share, the Company expects the maximum aggregate
cost, including all fees and expenses applicable to the Offer, to be
approximately $50,350,000. It is anticipated that the Company will fund the
purchase of Shares pursuant to the Offer and the payment of related fees and
expenses primarily with the cash proceeds received from the Photofinishing
Joint Venture Transaction and to the extent necessary, from working capital.
The Company will obtain the proceeds from the Photofinishing Joint Venture
Transaction from Fox through Fox's repayment of an existing intercompany debt
owing to a subsidiary of the Company. See Section 2.
9. CERTAIN INFORMATION CONCERNING THE COMPANY.
GENERAL
The Company, a Delaware corporation organized on April 26, 1982, whose
principal executive office is located at 1706 Washington Avenue, St. Louis, MO
63103, is a holding company engaged, through its subsidiaries, in developing
and marketing consumer services and related products through a network of
centrally-managed, small retail locations. The Company operates professional
portrait studios, photographic finishing laboratories through a joint venture
with Kodak, and posters, prints and framing outlets throughout the United
States, Canada and Puerto Rico.
17
<PAGE>
CERTAIN FINANCIAL INFORMATION
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
Set forth below is certain summary historical consolidated financial
information of the Company and its subsidiaries. The historical financial
information (other than the ratios of earnings to fixed charges) was derived
from the audited consolidated financial statements included in the Company's
Annual Report on Form 10-K for the year ended February 3, 1996 (the "Company's
1995 Annual Report"), and from the unaudited summary consolidated financial
statements included in the Company's Quarterly Reports on Form 10-Q for the
periods ended July 20, 1996 and July 22, 1995 (the "Company's Quarterly
Reports"), and other information and data contained in the Company's 1995
Annual Report and the Company's Quarterly Reports. More comprehensive
financial information is included in such reports and the financial
information which follows is qualified in its entirety by reference to such
reports and all of the financial statements and related notes contained
therein, copies of which may be obtained as set forth below under the caption
"Additional Information."
<TABLE>
<CAPTION>
UNAUDITED
24 WEEKS ENDED 52 WEEKS ENDED
------------------ -----------------------
JULY 20, JULY 22, FEBRUARY 3, FEBRUARY 4,
1996 1995 1996 1995
-------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C>
CONDENSED CONSOLIDATED (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS AND
STATEMENTS OF OPERATIONS: RATIOS)
Net sales.................... 210,108 210,449 526,651 517,521
Costs and expenses:
Cost of sales (exclusive of
depreciation expense)....... 58,453 56,144 135,559 142,343
Selling, administrative and
general expenses............ 135,442 130,470 318,413 309,144
Depreciation and amortiza-
tion........................ 19,193 18,646 41,007 35,726
Income (loss) from opera-
tions........................ (2,980) 5,189 31,672 30,308
Net interest expense.......... 2,008 1,966 4,597 4,338
Other income.................. 331 156 563 443
Earnings (loss) before income
taxes and discontinued opera-
tions........................ (4,657) 3,379 27,638 26,413
Income tax expense............ (1,723) 1,250 9,979 9,773
Earnings (loss) before discon-
tinued operations............ (2,934) 2,129 17,659 16,640
Discontinued operations....... -- (551) (3,326) (1,818)
Net earnings (loss)....... (2,934) 1,578 14,333 14,822
Earnings (loss) per common
share:
Earnings (loss) before dis-
continued operations........ (0.21) 0.15 1.26 1.18
Discontinued operations...... -- (0.04) (0.24) (0.13)
Net earnings (loss)....... (0.21) 0.11 1.02 1.05
Weighted average number of
common and common equivalent
shares outstanding........... 13,982 13,914 13,989 14,101
Ratio of earnings to fixed
charges (1).................. N/A N/A 1.55 1.53
Deficiency of earnings avail-
able to cover fixed charges.. 12,807 4,075 N/A N/A
CONDENSED CONSOLIDATED BALANCE
SHEETS (AT PERIOD END):
Assets
Total current assets......... 68,702 72,366 72,825 81,982
Total assets................. 293,236 300,457 300,488 300,481
Liabilities and stockholders'
equity
Total current liabilities.... 64,036 70,576 64,013 69,767
Long-term debt............... 54,846 59,777 54,804 59,742
Total liabilities............ 124,601 135,301 126,320 134,481
Stockholders' equity......... 168,635 165,156 174,168 166,000
Book value per common share
outstanding (2)............. 12.12 11.91 12.56 12.01
Shares outstanding at end of
period...................... 13,919 13,863 13,867 13,821
</TABLE>
NOTES TO SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
(1) For the purpose of calculating the ratio of earnings to fixed charges,
"earnings" consists of earnings before equity in earnings of affiliates
and minority interest, taxes on earnings, dividends received from
affiliates and "fixed charges". "Fixed charges" consists of interest and
amortization of debt expense and estimated interest components of rentals.
(2) Book value per common share outstanding is calculated as total
stockholders' equity divided by the number of Shares outstanding at the
end of the period.
18
<PAGE>
SUMMARY UNAUDITED CONSOLIDATED PRO FORMA FINANCIAL INFORMATION
The following summary unaudited consolidated pro forma financial information
is based on historical information which has been adjusted to reflect (i) the
Photofinishing Joint Venture Transaction only and (ii) the Photofinishing
Joint Venture Transaction together with the assumed purchase pursuant to the
Offer of 2,250,000 shares (a) at a $19.00 Purchase Price and (b) at a $22.00
Purchase Price, as if the transactions had occurred on February 4, 1996 and
February 5, 1995, with respect to income statement data and on July 20, 1996
and February 3, 1996, with respect to balance sheet data. The assumptions on
which the pro forma financial information is based are further described in
the Notes to Summary Unaudited Consolidated Pro Forma Financial Information.
The summary unaudited consolidated pro forma financial information should be
read in conjunction with the summary consolidated historical financial
information and does not purport to be indicative of the results that would
actually have been obtained had the purchase of the Shares pursuant to the
Offer been completed at the dates indicated or that may be obtained in the
future.
<TABLE>
<CAPTION>
24 WEEKS ENDED JULY 20, 1996 52 WEEKS ENDED FEBRUARY 3, 1996
-------------------------------------------- --------------------------------------------
PRO FORMA PRO FORMA
--------------------------------- --------------------------------------
PHOTOFINISHING PHOTOFINISHING
JOINT VENTURE JOINT VENTURE
PHOTOFINISHING TRANSACTION AND PHOTOFINISHING TRANSACTION AND
JOINT ------------------ JOINT ------------------
VENTURE $19 $22 VENTURE $19 $22
TRANSACTION PURCHASE PURCHASE TRANSACTION PURCHASE PURCHASE
HISTORICAL ONLY PRICE PRICE HISTORICAL ONLY PRICE PRICE
---------- -------------- -------- -------- ---------- -------------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS AND RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CONDENSED CONSOLIDATED
STATEMENTS OF OPERA-
TIONS:
Net sales............... 210,108 131,888 131,888 131,888 526,651 338,243 338,243 338,243
Costs and expenses:
Cost of sales
(exclusive of
depreciation
expense).............. 58,453 27,165 27,165 27,165 135,559 60,196 60,196 60,196
Selling, administrative
and general expenses.. 135,442 95,354 95,354 95,354 318,413 224,294 224,294 224,294
Depreciation and amor-
tization 19,193 11,413 11,413 11,413 41,007 23,450 23,450 23,450
Income (loss) from oper-
ations ................ (2,980) (2,044) (2,044) (2,044) 31,672 30,303 30,303 30,303
Net interest expense.... 2,008 783 1,790 1,946 4,597 1,942 4,122 4,460
Minority interest in
unconsolidated
subsidiary............. -- (596) (596) (596) -- 372 372 372
Other income............ 331 331 331 331 563 563 563 563
Earnings (loss) before
income taxes and
discontinued
operations............. (4,657) (3,092) (4,099) (4255) 27,638 29,296 27,116 26,778
Income tax expense...... (1,723) (1,144) (1,517) (1,574) 9,979 10,593 9,786 9,661
Earnings (loss) before
discontinued opera-
tions.................. (2,934) (1,948) (2,582) (2,681) 17,659 18,703 17,330 17,117
Discontinued opera-
tions.................. -- -- -- -- (3,326) (3,326) (3,326) (3,326)
Net earnings (loss)... (2,934) (1,948) (2,582) (2,681) 14,333 15,377 14,004 13,791
Earnings (loss) per com-
mon share:
Earnings (loss) before
discontinued opera-
tions................. (0.21) (0.14) (0.22) (0.23) 1.26 1.34 1.48 1.46
Discontinued opera-
tions................. -- -- -- -- (0.24) (0.24) (0.29) (0.29)
Net earnings (loss)... (0.21) (0.14) (0.22) (0.23) 1.02 1.10 1.19 1.17
Weighted average number
of common and common
equivalent shares out-
standing............... 13,982 13,982 11,732 11,732 13,989 13,989 11,739 11,739
Ratio of earnings to
fixed charges N/A N/A N/A N/A 1.55 3.84 3.01 2.91
Deficiency of earnings
available to cover
fixed charges.......... 12,807 6,754 7,174 7,330 N/A N/A N/A N/A
CONDENSED CONSOLIDATED
BALANCE SHEETS (AT PE-
RIOD END):
Assets
Total current assets... 68,702 91,798 48,015 48,015 72,825 99,937 54,775 48,025
Total assets........... 293,236 276,061 232,278 232,278 300,488 284,268 239,106 232,356
Liabilities and stockholders' equity
Total current liabili-
ties.................. 64,036 40,057 40,595 47,345 64,013 40,148 40,148 40,148
Long-term debt......... 54,846 54,846 54,846 54,846 54,804 54,804 54,804 54,804
Total liabilities...... 124,601 102,756 103,294 110,044 126,320 104,589 104,589 104,589
Stockholders' equity... 168,635 173,305 128,984 122,234 174,168 179,679 134,517 127,767
Book value per common
share outstanding..... 12.12 12.45 11.05 10.48 12.56 12.96 11.58 11.00
Shares outstanding at
end of period......... 13,919 13,919 11,669 11,669 13,867 13,867 11,617 11,617
</TABLE>
19
<PAGE>
NOTES TO SUMMARY UNAUDITED CONSOLIDATED PRO FORMA FINANCIAL INFORMATION
The following assumptions regarding the Photofinishing Joint Venture
Transaction and the Offer were made in presenting the pro forma financial
information.
(1) The Photofinishing Joint Venture Transaction results in cash proceeds to
the Company of $49.6 million after deducting $2.5 million for expenses of
the transaction and a $4.0 million working capital loan to Fox in the form
of a one-year promissory note. Adjusted to reflect the proceeds of the
Photofinishing Joint Venture Transaction (including the promissory note),
net interest expense is reduced by $721,000 (net of tax) for the 24 weeks
ended July 20, 1996 and $1,562,000 (net of tax) for the fiscal year ended
February 3, 1996, respectively. The Photofinishing Joint Venture
Transaction also results in the restatement of the photofinishing
operation to the equity method of accounting reflecting the decrease in
ownership of Fox to 49%. The Company's 49% share of Fox's income is
reflected in minority interest in unconsolidated subsidiary. The pro forma
presentation also includes charges to Fox for certain management services
provided by the Company (including consulting services by certain
executive employees of the Company).
(2) The Offer results in the Company's acquisition of 2,250,000 Shares
pursuant to the Offer for $43,600,000 at $19.00 per Share and $50,350,000
at $22.00 per Share including estimated costs of the Offer of $850,000.
Net interest expense has been adjusted to reflect the difference between
the cash proceeds of the Photofinishing Joint Venture Transaction and the
estimated use of funds in the Offer. These amounts are not material.
(3) For the purpose of calculating the ratio of earnings to fixed charges,
"earnings" consists of earnings before equity in earnings of affiliates
and minority interest, tax on earnings, dividends received from affiliates
and "fixed charges". "Fixed charges" consists of interest and amortization
of debt expenses and estimated interest components of rental expenses.
(4) Book value per share is calculated as total stockholders' equity divided
by the number of pro forma shares outstanding at the end of the period.
20
<PAGE>
ADDITIONAL INFORMATION
The Company is subject to the informational filing requirements of the
Exchange Act and, in accordance therewith, is obligated to file reports and
other information with the Commission relating to its business, financial
condition and other matters. Information, as of particular dates, concerning
the Company's directors and officers, their remuneration, options granted to
them, the principal holders of the Company's securities and any material
interest of such persons in transactions with the Company is required to be
disclosed in proxy statements 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 the Commission at 450 Fifth Street, N.W., Room 2120, Washington,
D.C. 20549; at its regional offices located at 500 West Madison Street, Suite
1400, Chicago, Illinois 60661; and 7 World Trade Center, New York, New York
10048. Copies of such material may also be obtained by mail, upon payment of
the Commission's customary charges, from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.
The Commission also maintains a Web site on the World Wide Web at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission. Such reports, proxy statements and other information concerning
the Company also can be inspected at the offices of the NYSE, 20 Broad Street,
New York, New York 10005, on which the Shares are listed.
10. INTEREST OF DIRECTORS AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS
CONCERNING SHARES.
As of September 24, 1996, the Company had issued and outstanding 13,919,062
Shares and had reserved 1,773,753 Shares for issuance upon exercise of
outstanding Options and 29,880 Shares with respect to unvested awards under
the Stock Bonus Plan. The 2,250,000 Shares that the Company is offering to
purchase represent approximately 16% of the Shares then outstanding
(approximately 14% assuming exercise of outstanding Options). As of September
24, 1996, the Company's directors and executive officers as a group (20
persons) beneficially owned an aggregate of 1,096,595 Shares representing
approximately 7.6% of the outstanding Shares, assuming the exercise by such
persons of their currently exercisable Options, and including all Shares
awarded to such persons under the Company's Restricted Stock Plan (the
"Restricted Stock Plan") and Shares allocated to the accounts of such persons
under the Company's Employee Profit Sharing Plan and Trust (the "Profit
Sharing Plan"). Each of the Company's executive officers and directors has
advised the Company that he or she does not intend to tender any Shares
pursuant to the Offer. If the Company purchases 2,250,000 Shares pursuant to
the Offer, and no executive officers or directors tender Shares pursuant to
the Offer, then after the purchase of Shares pursuant to the Offer, the
Company's executive officers and directors as a group would own beneficially
approximately 9.0% of the outstanding Shares immediately after the Offer,
assuming the exercise by such persons of their currently exercisable Options,
and including all Shares awarded to such persons under the Restricted Stock
Plan and Shares allocated to the accounts of such persons under the Profit
Sharing Plan.
Except as set forth in Schedule A, based on the Company's records and on
information provided to the Company by its directors, executive officers and
subsidiaries, neither the Company, nor any associate or subsidiary of the
Company nor, to the best of the Company's knowledge, any of the directors or
executive officers of the Company or any of its subsidiaries, nor any
associates or subsidiaries of any of the foregoing, has effected any
transactions involving the Shares during the 40 business days prior to the
date hereof.
Except as otherwise described herein, neither the Company nor, to the best
of the Company's knowledge, any of its affiliates, directors or executive
officers, is a party to any contract, arrangement, understanding or
relationship with any other person relating, directly or indirectly, to the
Offer 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.
21
<PAGE>
On May 1, 1989, the Board of Directors of the Company declared a dividend
distribution of one Right for each Share to stockholders of record at the
close of business on May 11, 1989 (the "Record Date"). Except as set forth
below, each Right entitles the registered holder to purchase from the Company
one one-hundredth of a share of Series A Participating Preferred Stock (a
"Series A Share"), without par value, at a price of $85.00 (the "Rights
Price"), subject to adjustment for dilution. This summary is qualified in its
entirety by the Rights Agreement dated as of May 1, 1989 between the Company
and the Rights Agent named therein, as amended (the "Rights Agreement"), which
the Company has filed with the Commission.
The Rights currently are attached to certificates representing Shares and no
separate Rights certificates have been distributed. The Rights will separate
from the Shares and a distribution of Rights certificates will occur upon the
earlier to occur of (i) 10 days following a public announcement that a person
or group of affiliated or associated persons (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of 15% or
more of the outstanding Shares (the "Shares Acquisition Date") or (ii) 10
business days (or such later date as the Board of Directors may determine)
following the commencement of a tender offer or exchange offer if, upon
consummation thereof, such person or group would be the beneficial owner of
30% or more of the outstanding Shares (the earlier of such dates being called
the "Distribution Date"). Until the Distribution Date the Rights will be
evidenced by the certificates representing Shares and will be transferred with
and only with Share certificates.
The Rights are not exercisable until the Distribution Date and will expire
on May 11, 1999, unless earlier redeemed or exchanged by the Company as
described below.
While each Right initially provides for the acquisition of one one-hundredth
of a Series A Share at the Rights Price, the Rights Agreement provides that if
an Acquiring Person becomes the beneficial owner of 15% or more of the then
outstanding Shares (other than pursuant to a tender offer for all outstanding
Shares at a price and on terms approved by a majority of the Independent
Directors (as defined in the Rights Agreement)), each holder of a Right will
thereafter have the right to receive, upon the exercise thereof at the Rights
Price, Shares (or, in certain circumstances, cash, property, or other
securities of the Company) having a value equal to two times the Rights Price.
Notwithstanding the foregoing, following the occurrence of the event set forth
above, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person will be
null and void.
If, at any time following the Shares Acquisition Date, (i) the Company
engages in a merger or other business combination transaction in which the
Company is not the surviving corporation or in which the Company is the
surviving corporation but in which its Shares are changed or exchanged (other
than certain mergers that follow a tender offer or exchange offer described in
the preceding paragraph), or (ii) more than 50% of the Company's assets or
earning power is sold or transferred, the Rights Agreement provides that
proper provision shall be made so that each holder of a Right (other than
Rights that previously have been voided as set forth above) shall thereafter
have the right to receive, upon the exercise thereof at the Rights Price,
Shares of the acquiring company having a value equal to two times the Rights
Price.
At any time after the date of the Rights Agreement until the date upon which
an Acquiring Person becomes such, the Board of Directors may redeem the Rights
in whole, but not in part, at a price of $.01 per Right, subject to
adjustments.
Pursuant to the Rights Agreement, any person or entity that becomes the
owner of 15% or more of the Company's outstanding Shares as a result of the
Company's purchase of Shares pursuant to the Offer will not become an
Acquiring Person unless such person or entity acquires additional Shares
following the Offer.
11. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE
EXCHANGE ACT.
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise be traded publicly and may reduce the
number of stockholders. Nonetheless, the Company anticipates
22
<PAGE>
that there will be a sufficient number of Shares outstanding and publicly
traded following consummation of the Offer to ensure a continued trading
market for the Shares. Based upon published guidelines of the NYSE, the
Company does not believe that its purchase of Shares pursuant to the Offer
will cause the Company's remaining Shares to be delisted from the NYSE.
The Shares are currently "margin securities" under the rules of the Federal
Reserve Board. This has the effect, among other things, of allowing brokers to
extend credit to their customers using such Shares as collateral. The Company
believes that, following the purchase of Shares pursuant to the Offer, the
Shares will continue to be "margin securities" for purposes of the Federal
Reserve Board's margin regulations.
The Shares are registered under the Exchange Act, which requires, among
other things, that the Company furnish certain information to its stockholders
and the Commission and comply with the Commission's proxy rules in connection
with meetings of the Company's stockholders. The Company believes that its
purchase of Shares pursuant to the Offer will not result in the Shares
becoming eligible for deregistration under the Exchange Act.
12. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
The Company is not aware of any license or regulatory permit that appears to
be material to the Company's business that might be adversely affected by the
Company's acquisition of Shares as contemplated herein or of any approval or
other action by any government or governmental, administrative or regulatory
authority or agency, domestic or foreign, that would be required for the
acquisition or ownership of Shares by the Company as contemplated herein.
Should any such approval or other action be required, the Company presently
contemplates that such approval or other action will be sought. The Company is
unable to predict whether it may determine that it is required to delay the
acceptance for payment of or payment for Shares tendered pursuant to the
Offering pending the outcome of any such matter. There can be no assurance
that any such approval or other action, if needed, would be obtained or would
be obtained without substantial conditions or that the failure to obtain any
such approval or other action might not result in adverse consequences to the
Company's business. The Company's obligations under the Offer to accept for
payment and pay for Shares is subject to certain conditions. See Section 6.
13. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.
The following summary describes certain United States federal income tax
consequences relevant to the Offer. The discussion contained in this summary
is based upon the Internal Revenue Code of 1986, as amended to the date hereof
(the "Code"), existing and proposed Treasury regulations promulgated
thereunder, rulings, administrative pronouncements and judicial decisions,
changes to which could materially affect the tax consequences described herein
and could be made on a retroactive basis.
This summary discusses only Shares held as capital assets, within the
meaning of Section 1221 of the Code, and does not address all of the tax
consequences that may be relevant to particular stockholders in light of their
personal circumstances, or to certain types of stockholders (such as certain
financial institutions, dealers in securities or commodities, insurance
companies, tax-exempt organizations or persons who hold Shares as a position
in a "straddle" or as part of "hedging" or "conversion" transaction for United
States federal income tax purposes). In particular, the discussion of the
consequences of an exchange of Shares for cash pursuant to the Offer applies
only to a United States Holder. For purposes of this summary, a "United States
Holder" is a holder of Shares that is (i) a citizen or resident of the United
States, (ii) a corporation, partnership or other entity created or organized
in or under the laws of the United States, any State or any political
subdivision thereof, or (iii) an estate or trust the income of which is
subject to United States federal income taxation regardless of its source.
This discussion does not address the tax consequences to foreign stockholders
who will be subject to United States federal income tax on a net basis on the
proceeds of their exchange of Shares pursuant to the Offer because such income
is effectively connected with the conduct of a trade or business within the
United States. Such stockholders are generally taxed in a manner similar to
United States stockholders; however, certain special
23
<PAGE>
rules apply. Foreign stockholders who are not subject to U.S. federal income
tax on a net basis should see Section 3 for a discussion of the applicable
U.S. withholding rules and the potential for obtaining a refund of all or a
portion of the tax withheld. The summary may not be applicable with respect to
Shares acquired as compensation (including Shares acquired upon the exercise
of options or which were or are subject to forfeiture restrictions). The
summary also does not address the state, local or foreign tax consequences of
participating in the Offer. EACH HOLDER OF SHARES SHOULD CONSULT SUCH HOLDER'S
TAX ADVISOR AS TO THE PARTICULAR CONSEQUENCES TO SUCH HOLDER OF PARTICIPATION
IN THE OFFER.
Consequences to Tendering Stockholders of Exchange of Shares for Cash
Pursuant to the Offer. An exchange of Shares for cash in the Offer by a United
States Holder will be a taxable transaction for United States federal income
tax purposes and may also be a taxable transaction under applicable state,
local, foreign or other tax laws. As a consequence of the exchange, the United
States Holder will, depending on such holder's particular circumstances, be
treated either as recognizing gain or loss from the disposition of the Shares
or as receiving a dividend distribution from the Company. In general, if a
United States Holder does not exercise control over the affairs of the Company
and all Shares actually and constructively owned by such United States Holder
under the applicable attribution rules are tendered and exchanged for cash in
the Offer, such holder should be treated as recognizing gain or loss from the
disposition of Shares.
Under Section 302 of the Code, a United States Holder will recognize gain or
loss on an exchange of Shares for cash if the exchange (i) results in a
"complete termination" of all of such holder's equity interest in the Company,
(ii) results in a "substantially disproportionate" redemption with respect to
such holder or (iii) is "not essentially equivalent to a dividend" with
respect to the holder. In applying each of the Section 302 tests, a United
States Holder is in general deemed to constructively own the Shares actually
owned by certain related individuals and entities. For example, an individual
holder is generally considered to own the Shares owned directly or indirectly
by or for his or her spouse and his or her children, grandchildren and
parents. In addition, a holder is considered to own a proportionate number of
the Shares owned by trusts or estates in which the holder has a beneficial
interest, by partnerships in which the holder is a partner, and by
corporations in which the holder owns, directly or indirectly, 50% or more in
value of the stock. Similarly, Shares directly or indirectly owned by
beneficiaries of estates or trusts, by partners of partnerships and, under
certain circumstances, by stockholders of corporations may be considered owned
by these entities. A United States Holder will generally also be deemed to own
Shares which the holder has the right to acquire by exercise of an option.
A United States Holder that exchanges all Shares actually and constructively
owned by such holder for cash pursuant to the Offer will be regarded as having
completely terminated such holder's equity interest in the Company. An
exchange of Shares for cash will be a "substantially disproportionate"
redemption with respect to a United States Holder if the percentage of the
then outstanding Shares owned by such holder immediately after the exchange is
less than 80% of the percentage of the Shares owned by such holder immediately
before the exchange. If an exchange of Shares for cash fails to satisfy the
"substantially disproportionate" test, the United States Holder may
nonetheless satisfy the "not essentially equivalent to a dividend" test. A
United States Holder who wishes to satisfy (or avoid) the "not essentially
equivalent to a dividend" test is urged to consult such holder's tax advisor
because this test will be met only if the reduction in such holder's
proportionate interest in the Company constitutes a "meaningful reduction"
given such holder's particular facts and circumstances. The IRS has indicated
in published rulings that any reduction in the percentage interest of a
stockholder whose relative stock interest in a publicly held corporation is
minimal (an interest of less than 1% should satisfy this requirement) and who
exercises no control over corporate affairs should constitute such a
"meaningful reduction." If a United States Holder sells Shares to persons
other than the Company at or about the time such holder also sells Shares to
the Company pursuant to the Offer, and the various sales effected by the
holder are part of an overall plan to reduce or terminate such holder's
proportionate interest in the Company, then the sales to persons other than
the Company may, for United States federal income tax purposes, be integrated
with the holder's sale of Shares pursuant to the Offer and, if integrated, may
be taken into account in determining whether the holder satisfies any of the
three tests described above. A United States Holder should consult such
holder's
24
<PAGE>
tax advisor regarding the treatment of other exchanges of Shares for cash
which may be integrated with such holder's sale of Shares to the Company
pursuant to the Offer.
If a United States Holder is treated as recognizing gain or loss from the
disposition of Shares for cash, such gain or loss will be equal to the
difference between the amount of cash received and such holder's tax basis in
the Shares exchanged therefor. Any such gain or loss will be capital gain or
loss and will be long-term capital gain or loss if the holding period of the
Shares exceeds one year as of the date of the exchange.
If a United States Holder is not treated under the Section 302 tests as
recognizing gain or loss on an exchange of Shares for cash, the entire amount
of cash received by such holder in such exchange will be treated as a dividend
to the extent of the Company's current and accumulated earnings and profits.
Such a dividend will be includible in the United States Holder's gross income
as ordinary income in its entirety, without reduction for the tax basis of the
Shares exchanged, and no loss will be recognized. The United States Holder's
tax basis in the Shares exchanged, however, will be added to such holder's tax
basis in the remaining Shares that it owns. To the extent that cash received
in exchange for Shares is treated as a dividend to a corporate United States
Holder, (i) it will be eligible for a dividends-received deduction (subject to
applicable limitations) and (ii) it will be subject to the "extraordinary
dividend" provisions of the Code. A corporate United States Holder should
consult its tax advisor concerning the availability of the dividends-received
deduction and the application of the "extraordinary dividend" provisions of
the Code. To the extent that the cash received by a United States Holder
exceeds the Company's current and accumulated earnings and profits, it will be
treated first as a tax-free return of such United States Holder's tax basis in
the Shares and thereafter as capital gain.
The Company cannot predict whether or the extent to which the Offer will be
oversubscribed. If the Offer is oversubscribed, proration of tenders pursuant
to the Offer will cause the Company to accept fewer shares than are tendered.
Therefore, a United States Holder can be given no assurance that a sufficient
number of such holder's Shares will be purchased pursuant to the Offer to
ensure that such purchase will be treated as a sale or exchange, rather than
as a dividend, for United States federal income tax purposes pursuant to the
rules discussed above.
Consequences to Stockholders who do not Tender Pursuant to the
Offer. Stockholders who do not accept the Company's Offer to tender their
Shares will not incur any tax liability as a result of the consummation of the
Offer.
See Section 3 with respect to the application of United States federal
income tax withholding to payments made to foreign stockholders and backup
withholding tax requirements.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY.
EACH STOCKHOLDER IS URGED TO CONSULT SUCH HOLDER'S OWN TAX ADVISOR TO
DETERMINE THE PARTICULAR TAX CONSEQUENCES TO SUCH HOLDER OF THE OFFER,
INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS.
14. EXTENSION OF OFFER, TERMINATION; AMENDMENT.
The Company expressly reserves the right, in its sole discretion, at any
time and from time to time, and regardless of whether or not any of the events
set forth in Section 6 shall have occurred or shall be deemed by the Company
to have occurred, to extend the period of time during which the Offer is open
and thereby delay acceptance for payment of, and payment for, any Shares by
giving oral or written notice of such extension to the Depositary and making a
public announcement thereof. The Company also expressly reserves the right, in
its sole discretion, to terminate the Offer and not accept for payment or pay
for any Shares not theretofore accepted for payment or paid for or, subject to
applicable law, to postpone payment for Shares upon the occurrence of any of
the conditions specified in Section 6 hereof by giving oral or written notice
of such termination or postponement to the Depositary and making a public
announcement thereof. The Company's reservation of the right to delay payment
for Shares which it has accepted for payment is limited by Rule 13e-4(f)(5)
promulgated
25
<PAGE>
under the Exchange Act, which requires that the Company must pay the
consideration offered or return the Shares tendered promptly after termination
or withdrawal of a tender offer. Subject to compliance with applicable law,
the Company further reserves the right, in its sole discretion, and regardless
of whether any of the events set forth in Section 6 shall have occurred or
shall be deemed by the Company to have occurred, to amend the Offer in any
respect (including, without limitation, by decreasing or increasing the
consideration offered in the Offer to holders of Shares or by decreasing or
increasing the number of Shares being sought in the Offer). Amendments to the
Offer may be made at any time and from time to time effected by public
announcement thereof, such announcement, in the case of an extension, to be
issued no later than 9:00 a.m., New York City time, on the next business day
after the last previously scheduled or announced Expiration Date. Any public
announcement made pursuant to the Offer will be disseminated promptly to
stockholders in a manner reasonably designed to inform stockholders of such
change. Without limiting the manner in which the Company may choose to make a
public announcement, except as required by applicable law, the Company shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by making a release to the Dow Jones News
Service.
If the Company materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer, the
Company will extend the Offer to the extent required by Rules 13e-4 (d)(2) and
13e-4(e)(2) promulgated under the Exchange Act. These rules require that the
minimum period during which an offer must remain open following material
changes in the terms of the Offer or information concerning the Offer (other
than a change in price or a change in percentage of securities sought) will
depend on the facts and circumstances, including the relative materiality of
such terms or information. If (i) the Company increases or decreases the price
to be paid for Shares, the number of Shares being sought in the Offer or the
Dealer Manager's soliciting fees and, in the event of an increase in the
number of Shares being sought, such increase exceeds 2% of the outstanding
Shares, and (ii) the Offer is scheduled to expire at any time earlier than the
expiration of a period ending on the tenth business day from, and including,
the date that such notice of an increase or decrease is first published, sent
or given in the manner specified in this Section 14, the Offer will be
extended until the expiration of such period of ten business days.
15. FEES AND EXPENSES.
The Company has retained CS First Boston to act as its financial advisor, as
well as the Dealer Manager, in connection with the Offer. CS First Boston will
receive a fee for its services of $400,000. The Company also has agreed to
reimburse CS First Boston for certain reasonable out-of-pocket expenses
incurred in connection with the Offer, including reasonable fees and expenses
of counsel, and to indemnify CS First Boston against certain liabilities in
connection with the Offer, including liabilities under the federal securities
laws. CS First Boston has rendered various investment banking and other
advisory services to the Company in the past, for which it has received
customary compensation, and may render similar services to the Company in the
future.
The Company has retained MacKenzie Partners, Inc. to act as Information
Agent and Boatmen's Trust Company to act as Depositary in connection with the
Offer. The Information Agent may contact holders of Shares by mail, telephone,
telegraph and personal interviews and may request brokers, dealers and other
nominee stockholders to forward materials relating to the Offer to beneficial
owners. The Information Agent and the Depositary will each receive reasonable
and customary compensation for their respective services, will be reimbursed
by the Company for certain reasonable out-of-pocket expenses and will be
indemnified against certain liabilities in connection with the Offer,
including certain liabilities under the federal securities laws.
No fees or commissions will be payable by the Company to brokers, dealers or
other persons (other than fees to the Dealer Manager, the Information Agent
and the Depositary as described above) for soliciting tenders of Shares
pursuant to the Offer. Stockholders holding Shares through brokers or banks
are urged to consult such brokers or banks to determine whether transaction
costs are applicable if stockholders tender Shares through such brokers or
banks and not directly to the Depositary. The Company, however, upon request,
will reimburse brokers, dealers and commercial banks for customary mailing and
handling expenses incurred by such persons in forwarding the Offer and related
materials to the beneficial owners of Shares held by any such person as a
nominee or in a fiduciary capacity. No broker, dealer, commercial bank or
trust company has been authorized
26
<PAGE>
to act as the agent of the Company, the Dealer Manager, the Information Agent
or the Depositary for purposes of the Offer. The Company will pay or cause to
be paid all stock transfer taxes, if any, on its purchase of Shares except as
otherwise provided in Instruction 7 in the Letter of Transmittal.
16. MISCELLANEOUS.
The Company is not aware of any jurisdiction where the making of the Offer
is not in compliance with applicable law. If the Company becomes aware of any
jurisdiction where the making of the Offer is not in compliance with any valid
applicable law, the Company will make a good faith effort to comply with such
law. If, after such good faith effort, the Company cannot comply with such
law, the Offer will not be made to (nor will tenders be accepted from or on
behalf of) the holders of Shares residing in such jurisdiction. In any
jurisdiction the securities or blue sky laws of which require the Offer to be
made by a licensed broker or dealer, the Offer is being made on the Company's
behalf by the Dealer Manager or one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
Pursuant to Rule 13e-4 of the General Rules and Regulations under the
Exchange Act, the Company has filed with the Commission an Issuer Tender Offer
Statement on Schedule 13E-4 which contains additional information with respect
to the Offer. Such Schedule 13E-4, including the exhibits and any amendments
thereto, may be examined, and copies may be obtained, at the same places and
in the same manner as is set forth in Section 9 with respect to information
concerning the Company.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE COMPANY OR THE DEALER MANAGER IN CONNECTION
WITH THE OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE
RELATED LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR THE DEALER MANAGER.
CPI CORP.
October 7, 1996
27
<PAGE>
SCHEDULE A
CERTAIN TRANSACTIONS INVOLVING SHARES
Except as set forth below, based on the Company's records and on information
provided to the Company by its directors, executive officers and subsidiaries,
neither the Company, nor any subsidiary or associate of the Company nor, to
the best of the Company's knowledge, any of the directors or executive
officers of the Company or any of its subsidiaries, nor any associates or
subsidiaries of any of the foregoing, has effected any transactions involving
the Shares during the 40 business days preceding the date hereof:
Mr. Harry Stecher, President of the Company's Portrait Studio Division, was
the recipient of 160 Shares transferred to him on August 14, 1996, as legatee
under a will.
<PAGE>
Facsimile copies of the Letter of Transmittal will be accepted from Eligible
Institutions. The Letter of Transmittal and certificates for Shares and any
other required documents should be sent or delivered by each stockholder or
such stockholder's broker, dealer, commercial bank, trust company or nominee
to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
BOATMEN'S TRUST COMPANY
By Mail: By Hand:
c/o IBJ Schroder Bank & Trust c/o IBJ Schroder Bank & Trust
Company Company
P.O. Box 84 One State Street
Bowling Green Station New York, New York 10004
New York, New York 10274-0084 Attn: Securities Processing
Window
Subcellar One, (SC-1)
By Facsimile Transmission: Telephone: By Overnight Courier:
(212) 858-2611 (212) 858-2103 c/o IBJ Schroder Bank & Trust
(for Eligible Institutions Only) Company
Confirm by Telephone One State Street
New York, New York 10004
Attn: Securities Processing
Window
Subcellar One, (SC-1)
Any questions or requests for assistance or additional copies of the Offer
to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery
may be directed to the Information Agent or the Dealer Manager at the
telephone numbers and locations listed below. Stockholders may also contact
their local broker, dealer, commercial bank, trust company or nominee for
assistance concerning the Offer. To confirm delivery of Shares, stockholders
are directed to contact the Depositary.
The Information Agent for the Offer is:
MacKenzie Partners, Inc.
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
Call Toll-Free (800) 322-2885
The Dealer Manager for the Offer is:
CS FIRST BOSTON
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
(800) 881-8320
October 7, 1996
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
CPI CORP.
PURSUANT TO THE OFFER TO PURCHASE DATED OCTOBER 7, 1996
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, NOVEMBER 4, 1996, UNLESS THE OFFER
IS EXTENDED.
TO: BOATMEN'S TRUST COMPANY, DEPOSITARY
<TABLE>
<S> <C> <C>
By Mail: Facsimile Transmission: By Hand:
c/o IBJ Schroder Bank & Trust Company (for Eligible Institutions c/o IBJ Schroder Bank & Trust Company
P.O. Box 84 Only) One State Street
Bowling Green Station New York, New York 10004
New York, New York 10274-0084 Attn: Securities Processing Window
Subcellar One, (SC-1)
</TABLE>
(212) 858-2611
CONFIRM BY TELEPHONE:
(212) 858-2103
By Overnight Courier:
c/o IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
Attn: Securities Processing Window
Subcellar One, (SC-1)
---------------
Delivery of this instrument and all other documents to an address or
transmission of instructions to a facsimile number other than as set forth
above does not constitute a valid delivery.
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL, INCLUDING THE
ACCOMPANYING INSTRUCTIONS, CAREFULLY BEFORE CHECKING ANY BOX BELOW.
This Letter of Transmittal is to be used only if (a) certificates for Shares
(as defined below) are to be forwarded herewith or (b) a tender of Shares is
being made concurrently by book-entry transfer to the account maintained by
the Depositary at The Depository Trust Company, the Midwest Securities Trust
Company or the Philadelphia Depository Trust Company (hereinafter,
collectively referred to as the "Book-Entry Transfer Facilities") pursuant to
Section 3 of the Offer to Purchase. See Instruction 2.
DESCRIPTION OF SHARES TENDERED
(SEE INSTRUCTIONS 3 AND 4)
- - - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE USE PRE-ADDRESSED LABEL OR FILL IN TENDERED CERTIFICATES
EXACTLY AS NAME(S) APPEAR(S) ON CERTIFICATE(S)) (ATTACH SIGNED ADDITIONAL LIST IF NECESSARY)
- - - -----------------------------------------------------------------------------------------------------
CERTIFICATE NUMBER OF NUMBER OF SHARES
NUMBER(S)* SHARES TENDERED**
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
<S> <C> <C> <C>
TOTAL SHARES
TENDERED
</TABLE>
- - - -------------------------------------------------------------------------------
Indicate in this box the order (by certificate number) in which Shares are
to be purchased in event of proration. (Attach additional list if
necessary.)*** See Instruction 10.
1st 2nd 3rd 4th 5th
- - - -------------------------------------------------------------------------------
* DOES NOT need to be completed if Shares are tendered by book-entry
transfer.
** If you desire to tender fewer than all Shares evidenced by any
certificates listed above, please indicate in this column the number of
Shares you wish to tender. Otherwise, all Shares evidenced by such
certificates will be deemed to have been tendered. See Instruction 4.
*** If you do not designate an order, in the event less than all Shares
tendered are purchased due to proration, Shares will be selected for
purchase by the Depositary.
<PAGE>
NOTE: SIGNATURE MUST BE PROVIDED BELOW
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY
Stockholders who desire to tender Shares pursuant to the Offer (as defined
below) and who cannot deliver their certificates for their Shares (or who are
unable to comply with the procedures for book-entry transfer on a timely
basis) and all other documents required by this Letter of Transmittal to the
Depositary at or before the Expiration Date (as defined in the Offer to
Purchase) may 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 one of the Book-Entry Transfer Facilities does not
constitute delivery to the Depositary.
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH ONE OF THE BOOK-ENTRY
TRANSFER FACILITIES AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: ___________________________________________
Check Box of Applicable Book-Entry Transfer Facility:
[_] The Depository Trust Company
[_] Midwest Securities Trust Company
[_] Philadelphia
Depository Trust
Company
Account Number______________________________________________________________
Transaction Code Number_____________________________________________________
[_]CHECK HERE IF CERTIFICATES FOR TENDERED SHARES ARE BEING DELIVERED
PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE
DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s): __________________________________________
Date of Execution of Notice of Guaranteed Delivery: ______________________
Name of Institution that Guaranteed Delivery: ____________________________
Check Box of Applicable Book-Entry Transfer Facility and Give Account
Number if Delivered by Book-Entry Transfer.
[_] The Depository Trust Company
[_] Midwest Securities Trust Company
[_] Philadelphia
Depository Trust
Company
Account Number______________________________________________________________
ODD LOTS
(SEE INSTRUCTION 8)
To be completed ONLY if the Shares are being tendered by or on behalf of
a person owning beneficially or of record, as of the close of business on
October 4, 1996 and who continues to own beneficially or of record as of
the Expiration Date, an aggregate of fewer than 100 Shares. The undersigned
either (check one box):
[_]was the beneficial or record owner of, as of the close of business on
October 4, 1996, and continues to own beneficially or of record as of
the Expiration Date, an aggregate of fewer than 100 Shares, all of which
are being tendered; or
[_]is a broker dealer, commercial bank, trust company, or other nominee
that (a) is tendering for the beneficial owner(s) thereof, Shares with
respect to which it is the record holder and (b) believes, based upon
representations made to it by such beneficial owner(s), that each such
person was the beneficial or record owner of, as of the close of
business on October 4, 1996, and continues to own beneficially or of
record as of the Expiration Date, an aggregate of fewer than 100 Shares
and is tendering all of such Shares.
In addition, the undersigned is tendering Shares either (check one box):
[_]at the Purchase Price (defined below), as the same shall be determined
by the Company in accordance with the terms of the Offer (persons
checking this box need not indicate the price per Share below); or
[_]at the price per Share indicated below under "Price (In Dollars) Per
Share At Which Shares Are Being Tendered" in this Letter of Transmittal.
<PAGE>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
TO BOATMEN'S TRUST COMPANY:
The undersigned hereby tenders to CPI Corp., a Delaware corporation (the
"Company"), the above described shares of the Company's common stock, $.40 par
value per share (the "Shares") (including the associated Preferred Stock
Purchase Rights (the "Rights") issued pursuant to the Rights Agreement, dated
as of May 1, 1989, between the Company and the Rights Agent named therein, as
amended), at the price per Share indicated in this Letter of Transmittal, net
to the seller in cash, upon the terms and subject to the conditions set forth
in the Company's Offer to Purchase, dated October 7, 1996 (the "Offer to
Purchase"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which together constitute the "Offer").
Subject to and effective upon acceptance for payment of the Shares tendered
hereby in accordance with the terms and subject to the conditions of the Offer
(including, if the Offer is extended or amended, the terms and conditions of
such extension or amendment), the undersigned hereby sells, assigns and
transfers to, or upon the order of, the Company all right, title and interest
in and to all the Shares that are being tendered hereby and orders the
registration of all such Shares if tendered by book-entry transfer and hereby
irrevocably constitutes and appoints the Depositary as the true and lawful
agent and attorney-in-fact of the undersigned (with full knowledge that said
Depositary also acts as the agent of the Company) with respect to such Shares
with full power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest), to:
(a) deliver certificate(s) for such Shares or transfer ownership of such
Shares on the account books maintained by any of the Book-Entry Transfer
Facilities, together in either such case with all accompanying evidences of
transfer and authenticity, to, or upon the order of, the Company upon
receipt by the Depositary, as the undersigned's agent, of the aggregate
Purchase Price (as defined below) with respect to such Shares;
(b) present certificates for such Shares for cancellation and transfer on
the Company's books; and
(c) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Shares, subject to the next paragraph, all in accordance
with the terms of the Offer.
The undersigned hereby represents and warrants to the Company that:
(a) 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 the undersigned's acceptance of
the terms and conditions of the Offer, including the undersigned's
representation and warranty that:
(i) the undersigned has a net long position in Shares or equivalent
securities at least equal to the Shares tendered within the meaning of
Rule 14e-4 under the Securities Exchange Act of 1934, as amended, and
(ii) such tender of Shares complies with Rule 14e-4;
(b) when and to the extent the Company accepts such Shares for purchase,
the Company will acquire good, marketable and unencumbered title to them,
free and clear of all security interests, liens, charges, encumbrances,
conditional sales agreements or other obligations relating to their sale or
transfer, and not subject to any adverse claim;
(c) on request, the undersigned will execute and deliver any additional
documents the Depositary or the Company deems necessary or desirable to
complete the assignment, transfer and purchase of the Shares tendered
hereby; and
(d) the undersigned has read and agrees to all of the terms of the Offer.
All authorities conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned, and any
obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, executors, administrators, successors, assigns,
trustees in bankruptcy, and legal representatives of the undersigned. Except
as stated in the Offer to Purchase, this tender is irrevocable.
The name(s) and address(es) of the registered holder(s) should be printed
above, if they are not already printed above, exactly as they appear on the
certificates representing Shares tendered hereby. The certificate numbers, the
number of Shares represented by such certificates and the number of Shares
that the undersigned wishes to tender, should be set forth in the appropriate
boxes above. The price at which such Shares are being tendered should be
indicated in the box below.
The undersigned understands that the Company will, upon the terms and
subject to the conditions of the Offer, determine a single per Share price
(not in excess of $22.00 nor less than $19.00 per Share) net to the seller in
cash (the "Purchase Price") that it will pay for Shares properly tendered and
not withdrawn prior to the Expiration Date pursuant to the Offer, taking into
account the number of Shares so tendered and the prices (in multiples of
$.125) specified by tendering stockholders. The undersigned understands that
the Company will select the lowest Purchase Price that will allow it to buy
2,250,000 Shares (or such lesser number of Shares as are properly tendered at
prices not in excess of $22.00 nor less than
<PAGE>
$19.00 per share) pursuant to the Offer. The undersigned understands that all
Shares properly tendered prior to the Expiration Date at prices at or below
the Purchase Price and not withdrawn will be purchased at the Purchase Price,
upon the terms and subject to the conditions of the Offer, including its
proration provisions, and that the Company will return all other Shares not
purchased pursuant to the Offer, including Shares tendered at prices greater
than the Purchase Price and not withdrawn prior to the Expiration Date and
Shares not purchased because of proration.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, the Company may terminate or amend the Offer or may
postpone the acceptance for payment of, or the payment for, Shares tendered or
may accept for payment fewer than all of the Shares tendered hereby. In any
such event, the undersigned understands that certificate(s) for any Shares
delivered herewith but not tendered or not purchased will be returned to the
undersigned at the address indicated above, unless otherwise indicated under
the "Special Payment Instructions" or "Special Delivery Instructions" below.
The undersigned recognizes that the Company has no obligation, pursuant to the
Special Payment Instructions, to transfer any certificate for Shares from the
name of its registered holder, or to order the registration or transfer of
Shares tendered by book-entry transfer, if the Company purchases none of the
Shares represented by, such certificate or tendered by such book-entry
transfer.
The undersigned understands that acceptance of Shares by the Company for
payment will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Offer.
The check for the aggregate net Purchase Price for such of the Shares
tendered hereby as are purchased will be issued to the order of the
undersigned and mailed to the address indicated above, unless otherwise
indicated under the Special Payment Instructions or the Special Delivery
Instructions below.
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
(SEE INSTRUCTION 5)
- - - -------------------------------------------------------------------------------
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED,
THERE IS NO PROPER TENDER OF SHARES
(Stockholders who desire to tender Shares at more than one price must
complete a separate Letter of Transmittal for each price at which Shares
are tendered.)
- - - -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
[_] $19.000 [_] $19.675 [_] $20.250 [_] $20.875 [_] $21.500
[_] $19.125 [_] $19.750 [_] $20.375 [_] $21.000 [_] $21.675
[_] $19.250 [_] $19.875 [_] $20.500 [_] $21.125 [_] $21.750
[_] $19.375 [_] $20.000 [_] $20.675 [_] $21.250 [_] $21.875
[_] $19.500 [_] $20.125 [_] $20.750 [_] $21.375 [_] $22.000
</TABLE>
TENDER OF DIVIDEND REINVESTMENT PLAN SHARES
(SEE INSTRUCTION 9)
This section is to be completed ONLY if Shares held in the Company's
Dividend Reinvestment Plan are to be tendered.
[_]By checking this box, the undersigned represents that the undersigned is
a participant in the Company's Dividend Reinvestment Plan and hereby
instructs the Depositary to tender on behalf of the undersigned the
following number of Shares credited to the Dividend Reinvestment Plan
account of the undersigned at the Purchase Price per Share indicated in
the box entitled "Price (In Dollars) Per Share At Which Shares Are Being
Tendered" in this Letter of Transmittal:
Shares(/1/)
- - - -------------------------------------------------------------------------------
(/1/)The undersigned understands and agrees that all Shares held in the
Dividend Reinvestment Plan account(s) of the undersigned will be
tendered if the above box is checked and the space above is left blank.
<PAGE>
[_] CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE
BEEN LOST OR DESTROYED AND SEE INSTRUCTION 16.
Number of Shares represented by the lost or destroyed certificates:____________
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 6, 7 AND (SEE INSTRUCTIONS 1, 4, 6, 7 AND
11) 11)
To be completed ONLY if certif- To be completed ONLY if certif-
icates for Shares not tendered or icates for Shares not tendered or
not purchased and/or any check not purchased and/or any check
for the aggregate Purchase Price for the Purchase Price of Shares
of Shares purchased are to be is- purchased, issued in the name of
sued in the name of someone other the undersigned, are to be mailed
than the undersigned. to someone other than the under-
signed or to the undersigned at
an address other than that shown
above.
Issue: [_] Check to: Mail: [_] Check to:
[_] Certificates to: [_] Certificates to:
Name(s)___________________________ Name(s)___________________________
(PLEASE PRINT) (PLEASE PRINT)
Address___________________________ Address___________________________
__________________________________ __________________________________
(ZIP CODE) (ZIP CODE)
__________________________________
(TAXPAYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL STOCKHOLDERS)
(PLEASE COMPLETE AND RETURN THE ENCLOSED SUBSTITUTE FORM W-9)
(Must be signed by the registered holder(s) exactly as name(s) appear(s)
on certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificate(s) and documents
transmitted with this Letter of Transmittal. If signature is by a trustee,
executor, administrator, guardian, attorney-in-fact, officer of a
corporation or another person acting in a fiduciary or representative
capacity, please set forth full title and see Instruction 6.)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
SIGNATURE(S) OF OWNER(S)
Dated: __________________,1996
Name(s): ___________________________________________________________________
(PLEASE PRINT)
Capacity (full title): _____________________________________________________
Address: ___________________________________________________________________
(INCLUDE ZIP CODE)
Area Code(s) and Telephone Number(s): ______________________________________
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 6)
Name of Firm: ______________________________________________________________
Authorized Signature: ______________________________________________________
Name: ______________________________________________________________________
(PLEASE PRINT)
Title: _____________________________________________________________________
Address: ___________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number: ____________________________________________
Dated: _________________, 1996
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required if either:
(a) this Letter of Transmittal is signed by the registered holder of the
Shares (which term, for purposes of this document, shall include any
participant in a Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of such Shares) exactly as the name
of the registered holder appears on the certificate tendered with this
Letter of Transmittal and payment and delivery are to be made directly to
such owner unless such owner has completed either the box entitled "Special
Payment Instructions" or "Special Delivery Instructions" above; or
(b) such Shares are tendered for the account of a member firm of a
registered national securities exchange, a member of the National
Association of Securities Dealers, Inc. or a commercial bank or trust
company having an office, branch or agency in the United States (each such
entity, an "Eligible Institution").
In all other cases, an Eligible Institution must guarantee all signatures on
this Letter of Transmittal. See Instruction 6.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be used only if certificates for
Shares are delivered with it to the Depositary (or such certificates will be
delivered pursuant to a Notice of Guaranteed Delivery previously sent to the
Depositary) or if a tender for Shares is being made concurrently pursuant to
the procedure for tender by book-entry transfer set forth in Section 3 of the
Offer to Purchase. Certificates for all physically tendered Shares or
confirmation of a book-entry transfer into the Depositary's account at a Book-
Entry Transfer Facility of Shares tendered electronically, together in each
case with a properly completed and duly executed Letter of Transmittal or duly
executed and manually signed facsimile of it, and any other documents required
by this Letter of Transmittal, should be mailed or delivered to the Depositary
at the appropriate address set forth herein and must be delivered to the
Depositary on or before the Expiration Date (as defined in the Offer to
Purchase). DELIVERY OF DOCUMENTS TO ONE OF THE BOOK-ENTRY TRANSFER FACILITIES
DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Stockholders whose certificates are not immediately available or who cannot
deliver certificates for their Shares and all other required documents to the
Depositary before the Expiration Date, or whose Shares cannot be delivered on
a timely basis pursuant to the procedures for book-entry transfer, must, in
any such case, tender their Shares by or through any Eligible Institution by
properly completing and duly executing and delivering a Notice of Guaranteed
Delivery (or facsimile of it) and by otherwise complying with the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant
to such procedure, certificates for all physically tendered Shares or book-
entry confirmations, as the case may be, as well as a properly completed and
duly executed Letter of Transmittal (or facsimile of it) and all other
documents required by this Letter of Transmittal, must be received by the
Depositary within three New York Stock Exchange trading days after receipt by
the Depositary of such Notice of Guaranteed Delivery, all as provided in
Section 3 of the Offer to Purchase.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, facsimile transmission or mail to the Depositary and must include a
signature guarantee by an Eligible Institution in the form set forth in such
Notice. For Shares to be tendered validly pursuant to the guaranteed delivery
procedure, the Depositary must receive the Notice of Guaranteed Delivery on or
before the Expiration Date.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES,
IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE
DELIVERY.
The Company will not accept any alternative, conditional or contingent
tenders, nor will it purchase any fractional Shares, except as expressly
provided in the Offer to Purchase. All tendering stockholders, by execution of
this Letter of Transmittal (or a facsimile of it), waive any right to receive
any notice of the acceptance of their tender.
3. INADEQUATE SPACE. If the space provided in the box captioned "Description
of Shares Tendered" is inadequate, the certificate numbers and/or the number
of Shares should be listed on a separate signed schedule and attached to this
Letter of Transmittal.
4. PARTIAL TENDERS AND UNPURCHASED SHARES. (Not applicable to stockholders
who tender by book-entry transfer.) If fewer than all of the Shares evidenced
by any certificate are to be tendered, fill in the number of Shares that are
to be tendered in the column entitled "Number of Shares Tendered," in the box
captioned "Description of Shares Tendered." In such case, if any tendered
Shares are purchased, a new certificate for the remainder of the Shares
(including any Shares not purchased) evidenced by the old certificate(s) will
be issued and sent to the registered holder(s), unless otherwise specified in
either the "Special Payment Instructions" or "Special Delivery Instructions"
box on this Letter of Transmittal, as soon as practicable after the Expiration
Date. Unless otherwise indicated, all Shares represented by the certificate(s)
listed and delivered to the Depositary will be deemed to have been tendered.
<PAGE>
5. INDICATION OF PRICE AT WHICH SHARES ARE BEING TENDERED. For Shares to be
properly tendered, the stockholder MUST check the box indicating the price per
Share at which such holder is tendering Shares under "Price (In Dollars) Per
Share at Which Shares Are Being Tendered" on this Letter of Transmittal. ONLY
ONE BOX MAY BE CHECKED. IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS
CHECKED, THERE IS NO PROPER TENDER OF SHARES. A stockholder wishing to tender
portions of such holder's Share holdings at different prices must complete a
separate Letter of Transmittal for each price at which such holder wishes to
tender each such portion of such holder's Shares. The same Shares cannot be
tendered (unless previously properly withdrawn as provided in Section 4 of the
Offer to Purchase) at more than one price.
6. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS.
(a) 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 any change
whatsoever.
(b) If the Shares are registered in the names of two or more joint holders,
each such holder must sign this Letter of Transmittal.
(c) 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 (or facsimiles of it) as there are different
registrations of certificates.
(d) When this Letter of Transmittal is signed by the registered holder(s) of
the Shares listed and transmitted hereby, no endorsement(s) of certificate(s)
representing such Shares or separate stock power(s) are required unless
payment is to be made or the certificate(s) for Shares not tendered or not
purchased are to be issued to a person other than the registered holder(s).
SIGNATURE(S) ON SUCH CERTIFICATE(S) MUST BE GUARANTEED BY AN ELIGIBLE
INSTITUTION. If this Letter of Transmittal is signed by a person other than
the registered holder(s) of the certificate(s) listed, or if payment is to be
made or their certificate(s) for Shares not tendered or not purchased are to
be issued to a person other than the registered holder(s), the certificate(s)
must be endorsed or accompanied by appropriate stock power(s), in either case
signed exactly as the name(s) of the registered holder(s) appears on the
certificate(s), and the signature(s) on such certificate(s) or stock power(s)
must be guaranteed by an Eligible Institution. See Instruction 1.
(e) If this Letter of Transmittal or any certificate(s) or stock power(s)
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 must
submit proper evidence satisfactory to the Company of their authority so to
act.
7. STOCK TRANSFER TAXES. Except as provided in this Instruction 7, no stock
transfer tax stamps or funds to cover such stamps need accompany this Letter
of Transmittal. The Company will pay or cause to be paid any stock transfer
taxes payable on the transfer to it of Shares purchased pursuant to the Offer.
If, however:
(a) payment of the aggregate Purchase Price for Shares tendered hereby
and accepted for purchase is to be made to any person other than the
registered holder(s);
(b) Shares not tendered or not accepted for purchase are to be registered
in the name(s) of any person(s) other than the registered holder(s); or
(c) tendered certificates are registered in the name(s) of any person(s)
other than the person(s) signing this Letter of Transmittal;
then the Depositary will deduct from such aggregate Purchase Price the amount
of any stock transfer taxes (whether imposed on the registered holder, such
other person or otherwise) payable on account of the transfer to such person,
unless satisfactory evidence of the payment of such taxes or any exemption
from them is submitted.
8. ODD LOTS. As described in Section 1 of the Offer to Purchase, if the
Company is to purchase fewer than all Shares tendered before the Expiration
Date and not withdrawn, the Shares purchased first will consist of all Shares
properly tendered by any stockholder who owned beneficially or of record, as
of the close of business on October 4, 1996 and as of the Expiration Date, an
aggregate of fewer than 100 Shares, and who tenders all of such holder's
Shares at or below the Purchase Price (an "Odd Lot Holder"). This preference
will not be available unless the box captioned "Odd Lots" is completed.
9. DIVIDEND REINVESTMENT PLAN. If a tendering stockholder desires to have
tendered pursuant to the Offer Shares credited to the stockholder's account
under the Company's Dividend Reinvestment Plan (the "Dividend Reinvestment
Plan"), the box captioned "Tender of Dividend Reinvestment Plan Shares" should
be completed. A participant in the Dividend Reinvestment Plan may complete
such box on only one Letter of Transmittal submitted by such participant. If a
participant submits more than one Letter of Transmittal and completes such box
on more than one Letter of Transmittal, the participant will be deemed to have
elected to tender all Shares credited to the stockholder's account under the
Dividend Reinvestment Plan at the lowest of the prices specified in such
Letters of Transmittal.
<PAGE>
If a stockholder authorizes a tender of Shares held in the Dividend
Reinvestment Plan, all such Shares credited to such stockholder's account(s),
including fractional Shares, will be tendered, unless otherwise specified in
the appropriate space in the box captioned "Tender of Dividend Reinvestment
Plan Shares." In the event that the box captioned "Tender of Dividend
Reinvestment Plan Shares" is not completed, no Shares held in the tendering
stockholder's account will be tendered. See Section 3 of the Offer to Purchase
for a further explanation of the procedures for tendering and consequences of
tendering Dividend Reinvestment Plan Shares. If a participant tenders all of
such participant's Dividend Reinvestment Plan Shares and all such Shares are
purchased by the Company pursuant to the Offer, such tender will be deemed to
be authorization and written notice to Boatmen's Trust Company of termination
of such participant's participation in the Dividend Reinvestment Plan.
10. ORDER OF PURCHASE IN EVENT OF PRORATION. As described in Section 1 of
the Offer to Purchase, stockholders may designate the order in which their
Shares are to be purchased in the event of proration. The order of purchase
may have an effect on the federal income tax treatment of the Purchase Price
for the Shares purchased. See Sections 1 and 13 of the Offer to Purchase.
11. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If certificate(s) for Shares
not tendered or not purchased and/or check(s) are to be issued in the name of
a person other than the signer of the Letter of Transmittal or if such
certificates and/or checks are to be sent to someone other than the person
signing the Letter of Transmittal or to the signer at a different address, the
boxes captioned "Special Payment Instructions" and/or "Special Delivery
Instructions" on this Letter of Transmittal should be completed as applicable
and signatures must be guaranteed as described in Instruction 1.
12. IRREGULARITIES. All questions as to the number of Shares to be accepted,
the price to be paid therefor and the validity, form, eligibility (including
time of receipt) and acceptance for payment of any tender of Shares will be
determined by the Company in its sole discretion, which determinations shall
be final and binding on all parties. The Company reserves the absolute right
to reject any or all tenders of Shares it determines not to be in proper form
or the acceptance of which or payment for which may, in the opinion of the
Company's counsel, be unlawful. The Company also reserves the absolute right
to waive any of the conditions of the Offer or any defect or irregularity in
any tender with respect to any particular Shares or any particular
stockholder, and the Company's interpretation of the terms of the Offer
(including these instructions) will be final and binding on all parties. No
tender of Shares will be deemed to be properly made until all defects and
irregularities have been cured by the tendering stockholder or waived by the
Company. Unless waived, any defects or irregularities in connection with
tenders must be cured within such time as the Company shall determine. None of
the Company, the Dealer Manager (as defined in the Offer to Purchase), the
Depositary, the Information Agent (as defined in the Offer to Purchase) or any
other person is or will be obligated to give notice of any defects or
irregularities in tenders and none of them will incur any liability for
failure to give any such notice.
13. QUESTIONS AND REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions
and requests for assistance may be directed to, or additional copies of the
Offer to Purchase, the Notice of Guaranteed Delivery and this Letter of
Transmittal may be obtained from, the Information Agent or the Dealer Manager
at their addresses and telephone numbers set forth at the end of this Letter
of Transmittal or from your broker, dealer, commercial bank or trust company.
14. FORM W-9 AND FORM W-8. Under the United States federal income tax backup
withholding rules, unless an exemption applies under the applicable law and
regulations, 31% of the gross proceeds payable to a stockholder or other payee
pursuant to the Offer must be withheld and remitted to the United States
Treasury, unless the stockholder or other payee provides his or her taxpayer
identification number (employer identification number or social security
number) to the Depositary and certifies that such number is correct.
Therefore, each tendering stockholder should complete and sign the Substitute
Form W-9 included as part of the Letter of Transmittal so as to provide the
information and certification necessary to avoid backup withholding, unless
such stockholder otherwise establishes to the satisfaction of the Depositary
that it is not subject to backup withholding. Certain stockholders (including,
among others, all corporations and certain foreign stockholders (in addition
to foreign corporations)) are not subject to these backup withholding and
reporting requirements. In order for a foreign stockholder to qualify as an
exempt recipient, that stockholder must submit an IRS Form W-8 or a Substitute
Form W-8, signed under penalties of perjury, attesting to that stockholder's
exempt status. Such statements can be obtained from the Depositary.
15. WITHHOLDING ON FOREIGN STOCKHOLDERS. Even if a foreign stockholder has
provided the required certification to avoid backup withholding, the
Depositary will withhold United States federal income taxes equal to 30% of
the gross payments payable to a foreign stockholder or his agent unless the
Depositary determines that a reduced rate of withholding is available pursuant
to a tax treaty or that an exemption from withholding is applicable because
such gross proceeds are effectively connected with the conduct of a trade or
business within the United States. For this purpose, a foreign stockholder is
any stockholder that is not (i) a citizen or resident of the United States,
(ii) a corporation, partnership or other entity created or organized in or
under the laws of the United States, any State or any political subdivision
thereof, or (iii) an estate or trust the income of which is subject to United
States federal income taxation regardless of the source of such income. In
order to obtain a reduced rate of withholding pursuant to a tax treaty, a
foreign stockholder must deliver to the Depositary before the payment a
properly completed and executed IRS Form 1001. In order to obtain an exemption
from withholding on the grounds that the gross proceeds paid pursuant to the
Offer are effectively connected with the conduct of a trade or business within
the United States, a foreign stockholder must deliver to the Depositary a
properly completed and executed IRS Form 4224. The Depositary will determine a
stockholder's status as a foreign stockholder and eligibility for a reduced
rate of, or an exemption from, withholding by reference to outstanding
certificates or statements concerning eligibility for a reduced
<PAGE>
rate of, or exemption from, withholding (e.g., IRS Form 1001 or IRS Form 4224)
unless facts and circumstances indicate that such reliance is not warranted. A
foreign stockholder may be eligible to obtain a refund of all or a portion of
any tax withheld if such stockholder meets the "complete redemption,"
"substantially disproportionate" or "not essentially equivalent to a dividend"
test described in Section 13 of the Offer to Purchase or is otherwise able to
establish that no tax or a reduced amount of tax is due. Backup withholding
generally will not apply to amounts subject to the 30% or treaty-reduced rate
of withholding. Foreign stockholders are urged to consult their own tax
advisors regarding the application of United States federal income tax
withholding, including eligibility for a withholding tax reduction or
exemption, and the refund procedure.
16. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary by checking the box immediately preceding the
special payment/special delivery instructions and indicating the number of
Shares so lost, destroyed or stolen. The stockholder will then be instructed
by the Depositary as to the steps that must be taken in order to replace the
certificate. This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, destroyed or stolen
certificates have been followed.
IMPORTANT: This Letter of Transmittal or a facsimile hereof (together with
certificates for the Shares being tendered and all other required documents),
or a Notice of Guaranteed Delivery must be received prior to 12:00 Midnight,
New York City time, on the Expiration Date. STOCKHOLDERS ARE ENCOURAGED TO
RETURN A COMPLETED FORM W-9 WITH THEIR LETTER OF TRANSMITTAL.
<PAGE>
PAYER'S NAME: BOATMEN'S TRUST COMPANY
PART 1: PLEASE PROVIDE
YOUR TIN IN THE BOX AT
RIGHT AND CERTIFY BY
SIGNING AND DATING BELOW.
For individuals, this is
your social security
number (SSN). For other
entities, this is your
employer identification
number (EIN). For sole
proprietorships, either
your SSN or EIN may be
used.
---------------------
SUBSTITUTE Social Security Number
FORM W-9
OR __________________
Employer
Identification
Number
PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER (TIN)
PART 2: For Payees exempt from backup withholding,
see the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form
W-9 and complete as instructed therein.
---------------------------------------------------------
PART 3: Awaiting TIN [_]
---------------------------------------------------------
CERTIFICATION--Under the penalties of perjury, I
certify that (1) the number shown on this form is
my correct Taxpayer Identification Number (or I am
waiting for a number to be issued to me) and
either (a) I have mailed or delivered an
application to receive a taxpayer identification
number to the appropriate IRS center or Social
Security Administration office or (b) I intend to
mail or deliver an application in the near future
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 IRS that I
am subject to backup withholding as a result of a
failure to report all interest or dividends; or
(c) the IRS has notified me that I am no longer
subject to backup withholding. Certification
instructions--You must cross out Item (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.
SIGNATURE _________________________________________
DATE ______________________________________________
NAME ______________________________________________
(PLEASE PRINT)
ADDRESS ___________________________________________
___________________________________________________
(INCLUDE ZIP CODE)
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.
SIGN
--
HERE
<PAGE>
The Information Agent for the Offer is:
MacKenzie Partners, Inc.
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
Call Toll-Free (800) 322-2885
The Dealer Manager for the Offer is:
CS FIRST BOSTON
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
(800) 881-8320
<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
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- - - --------------------------------------------
<S> <C>
1. Individual The individual
2. Two or more individuals The actual owner
(joint account) of the account
or, if combined
funds, the first
individual on
the account(1)
3. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
4.a. The usual revocable The grantor-
savings trust (grantor trustee(1)
is also trustee)
b. The so-called trust The actual
account that is not a owner(1)
legal or valid trust
under state law
5. Sole proprietorship The owner(3)
- - - --------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
--
<S> <C>
6. Sole proprietorship The owner(3)
7. A valid trust, estate, The legal
or pension trust entity(4)
8. Corporate The corporation
9. Association, club, The organization
religious, charitable,
educational or other
tax-exempt
organization
10. Partnership The partnership
11. A broker or registered The broker or
nominee nominee
12. Account with the The public
Department of entity
Agriculture in the
name of a public
entity (such as a
state or local
government, school
district, or prison)
that receives
agricultural program
payments
--
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Show your individual name. You may also enter your business name. You may
use your social security number or employer identification number.
(4) List first and circle the name of the legal trust, estate, or pension
trust. (Do not furnish the TIN of the personal representative or trustee
unless the legal entity itself is not designated in the account title.)
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
HOW TO OBTAIN A NUMBER
If you do not have a taxpayer identification number ("TIN"), apply for one im-
mediately. To apply, obtain Form SS-5, Application for a Social Security Num-
ber Card (for individuals), from your local office of the Social Security Ad-
ministration, or Form SS-4, Application for Employer Identification Number
(for business and other entities), at your local IRS office.
To complete Form W-9 if you do not have a TIN, write "Applied for" in the
space for the TIN in Part I, sign and date the form, and give it to the re-
quester. Generally, you will then have 60 days to obtain a TIN and furnish it
to the requester. If the requester does not receive your TIN within 60 days,
backup withholding, if applicable, will begin and continue until you furnish
your TIN to the requester. For reportable interest or divided payments, the
payer must exercise one of the following options concerning backup withholding
during this 60-day period. Under option (1), a payer must backup withhold on
any withdrawals you make from your account after 7 business days after the re-
quester receives this form back from you. Under option (2), the payer must
backup withhold on any reportable interest or dividend payments made to your
account, regardless of whether you make any withdrawals. The backup withhold-
ing under option (2) must begin no later than 7 business days after the re-
quester receives this form back. Under option (2), the payer is required to
refund the amounts withheld if your certified TIN is received within the 60-
day period and you were not subject to backup withholding during that period.
NOTE: Writing "Applied for" on the form means that you have already applied
for a TIN OR that you intend to apply for one in the near future.
AS SOON AS YOU RECEIVE YOUR TIN, COMPLETE ANOTHER FORM W-9, INCLUDE YOUR
TIN, SIGN AND DATE THE FORM, AND GIVE IT TO THE REQUESTER.
PAYEES 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 (1) through (13) and a person registered under the Investment Advis-
ers Act of 1940 who regularly acts as a broker are exempt. Payments subject to
reporting under Sections 6041 and 6041A of the Internal Revenue Code of 1986,
as amended,* are generally exempt from backup withholding only if made to pay-
ees described in items (1) through (7), except a corporation that provides
medical and health care services or bills and collects payments for such serv-
ices is not exempt from backup withholding or information reporting. Only pay-
ees 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 individual
retirement arrangement (IRA) or 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 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 instrumentali-
ties.
7. A foreign central bank of issue.
8. A dealer in securities or commodities required to register in the U.S. or
a possession of the U.S.
9. A futures commission merchant registered with the Commodity Futures Trad-
ing Commission.
10. A real estate investment trust.
11. An entity registered at all times during the tax year under the Invest-
ment 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 Secre-
taries, 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.
. 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 not paid in money.
. Payments made by certain foreign organizations.
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 pro-
vided your correct TIN to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in section 6049(b)(5) to non-resident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Mortgage interest paid by you.
Exempt payees described above should file Form W-9 to avoid erroneous backup
withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TIN, WRITE "EXEMPT"
IN THE BLOCK IN PART II ON THE FACE OF THE FORM, SIGN AND DATE THE FORM AND
RETURN IT TO THE PAYER.
Payments that are not subject to information reporting are also not subject
to backup withholding. For details, see Sections 6041, 6041A(a), 6042, 6044,
6045, 6049, 6050A and 6050N and the regulations thereunder.
PRIVACY ACT NOTICE.--Section 6109 requires you to furnish your correct TIN to
persons who must file information returns with the IRS to report dividends,
interest and certain other income paid to
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 3
you, mortgage interest you paid, the acquisition or abandonment of secured
property, or contributions you made to an IRA. The IRS uses the numbers for
identification purposes and to help verify the accuracy of your tax return.
Payers must be given the numbers whether or not recipients are required to
file tax returns. Payers must generally withhold 31% of taxable interest,
dividends, and certain other payments to a payee who does not furnish a TIN to
a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TIN.--If you fail to furnish your correct
TIN to a payer, you are subject to a penalty of $50 for each such failure un-
less 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 backup
withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying certi-
fications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
(4) MISUSE OF TINS. If the requester discloses or uses TINs in violation of
Federal law, the requester may be subject to civil and criminal penalties.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX ADVISOR OR THE INTERNAL REVENUE
SERVICE.
- - - --------
* Unless otherwise indicated, all section references herein are to the Inter-
nal Revenue Code of 1986, as amended.
<PAGE>
CPI CORP.
NOTICE OF GUARANTEED DELIVERY OF SHARES OF COMMON STOCK
This form or a facsimile hereof must be used to accept the Offer (as defined
below) if:
(a) certificates for shares of common stock, $.40 par value per share (the
"Shares") (including the associated Preferred Stock Purchase Rights issued
pursuant to the Rights Agreement, dated as of May 1, 1989, between CPI Corp.
and the Rights Agent named therein, as amended), of CPI Corp., a Delaware
corporation (the "Company"), cannot be delivered to the Depositary prior to
the Expiration Date (as defined in Section 1 of the Company's Offer to
Purchase dated October 7, 1996 (the "Offer to Purchase")); or
(b) the procedure for book-entry transfer (set forth in Section 3 of the
Offer to Purchase) cannot be completed on a timely basis; or
(c) the Letter of Transmittal (or a facsimile thereof) and all other
required documents cannot be delivered to the Depositary prior to the
Expiration Date.
This form, properly completed and duly executed, may be delivered by hand,
mail or facsimile transmission to the Depositary. See Section 3 of the Offer
to Purchase.
TO: BOATMEN'S TRUST COMPANY
By Mail: Facsimile Transmission: By Hand:
C/O IBJ SCHRODER BANK & (FOR ELIGIBLE C/O IBJ SCHRODER BANK &
TRUST COMPANY INSTITUTIONS ONLY) TRUST COMPANY
P.O. BOX 84 (212) 858-2611 ONE STATE STREET
BOWLING GREEN STATION NEW YORK, NEW YORK 10004
NEW YORK, NEW YORK CONFIRM BY TELEPHONE: ATTN: SECURITIES
10274-0084 (212) 858-2103 PROCESSING WINDOW
SUBCELLAR ONE, (SC-1)
By Overnight Courier:
C/O IBJ SCHRODER BANK & TRUST COMPANY
ONE STATE STREET
NEW YORK, NEW YORK 10004
ATTN: SECURITIES PROCESSING WINDOW
SUBCELLAR ONE, (SC-1)
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN AS SET FORTH
ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible
Institution" under the instructions thereto, such signature guarantee must
appear in the applicable space provided in the signature box on the Letter of
Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to the Company at the price per Share
indicated in this Notice of Guaranteed Delivery, upon the terms and subject to
the conditions set forth in the Offer to Purchase and the related Letter of
Transmittal (which together constitute the "Offer"), receipt of both of which
is hereby acknowledged, Shares pursuant to the guaranteed delivery
procedure set forth in Section 3 of the Offer to Purchase.
ODD LOTS
To be completed ONLY if the Shares are being tendered by or on behalf of
a person owning beneficially or of record, as of the close of business on
October 4, 1996 and who continues to own beneficially or of record as of
the Expiration Date, an aggregate of fewer than 100 Shares. The
undersigned either (check one box):
[_]was the beneficial or record owner of, as of the close of business on
October 4, 1996, and continues to own beneficially or of record as of
the Expiration Date, an aggregate of fewer than 100 Shares, all of which
are being tendered; or
[_]is a broker, dealer, commercial bank, trust company, or other nominee
that (a) is tendering for the beneficial owner(s) thereof, Shares with
respect to which it is the record holder, and (b) believes, based upon
representations made to it by such beneficial owner(s), that each such
person was the beneficial or record owner of, as of the close of
business on October 4, 1996, and continues to own beneficially or of
record as of the Expiration Date, an aggregate of fewer than 100 Shares
and is tendering all of such Shares.
In addition, the undersigned is tendering Shares either (check one box):
[_]at the Purchase Price, as the same shall be determined by the Company in
accordance with the terms of the Offer (persons checking this box need
not indicate the price per Share below); or
[_]at the price per Share indicated below under "Price (In Dollars) Per
Share At Which Shares Are Being Tendered."
2
<PAGE>
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
- - - --------------------------------------------------------------------------------
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED,
THERE IS NO PROPER TENDER OF SHARES
(STOCKHOLDERS WHO DESIRE TO TENDER SHARES AT MORE THAN ONE PRICE MUST
COMPLETE A SEPARATE NOTICE OF GUARANTEED DELIVERY FOR EACH PRICE AT WHICH
SHARES ARE TENDERED.)
- - - --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
[_] $19.000 [_] $19.675 [_] $20.250 [_] $20.875 [_] $21.500
[_] $19.125 [_] $19.750 [_] $20.375 [_] $21.000 [_] $21.675
[_] $19.250 [_] $19.875 [_] $20.500 [_] $21.125 [_] $21.750
[_] $19.375 [_] $20.000 [_] $20.675 [_] $21.250 [_] $21.875
[_] $19.500 [_] $20.125 [_] $20.750 [_] $21.375 [_] $22.000
</TABLE>
(Please type or print) SIGN HERE
Certificate Nos. (if available): -----------------------------------
----------------------------------- Signature(s)
----------------------------------- Dated: ____________________________
Name(s)
----------------------------------- If Shares will be tendered by book-
Address(es) entry transfer, check one box:
-----------------------------------
[_] The Depository Trust Company
----------------------------------- [_] Midwest Securities Trust
Area Code(s) and Telephone Number(s) Company
[_] Philadelphia Depository Trust
Company
Account Number: ___________________
3
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned is a member firm of a registered national securities
exchange, a member of the National Association of Securities Dealers, Inc., or
a commercial bank or trust company having an office, branch, or agency in the
United States and represents that: (a) the above-named person(s) "own(s)" the
Shares tendered hereby within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended, and (b) such tender of Shares
complies with such Rule 14e-4, and guarantees that the Depository will receive
(i) certificates of the Shares tendered hereby in proper form for transfer, or
(ii) confirmation that the Shares tendered hereby have been delivered pursuant
to the procedure for book-entry transfer (set forth in Section 3 of the Offer
to Purchase) into the Depositary's account at The Depository Trust Company,
Midwest Securities Trust Company or Philadelphia Depository Trust Company, as
the case may be, together with a properly completed and duly executed Letter
of Transmittal (or manually signed facsimile thereof) and any other documents
required by the Letter of Transmittal, all within three New York Stock
Exchange trading days after the date the Depositary receives this Notice of
Guaranteed Delivery.
Authorized Signature: _____________ Address: __________________________
Name: _____________________________
(Please Print) -----------------------------------
----------------------------------- -----------------------------------
(Including Zip Code)
----------------------------------- Area Code and Telephone Number: ___
Title: ____________________________
___________________________________
Name of Firm: _____________________ Date: _______________________, 1996
DO NOT SEND CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES MUST BE
SENT WITH THE LETTER OF TRANSMITTAL.
4
<PAGE>
CS FIRST BOSTON CORPORATION
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
CPI CORP.
OFFER TO PURCHASE FOR CASH UP TO
2,250,000 SHARES OF ITS COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
AT A PURCHASE PRICE NOT IN EXCESS OF $22.00
NOR LESS THAN $19.00 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, NOVEMBER 4, 1996, UNLESS THE OFFER
IS EXTENDED.
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
CPI Corp., a Delaware corporation (the "Company"), has appointed us to act
as Dealer Manager in connection with its offer to purchase for cash 2,250,000
shares (or such lesser number of shares as are properly tendered) of its
Common Stock, $.40 par value per share (the "Shares") (including the
associated Preferred Stock Purchase Rights issued pursuant to the Rights
Agreement, dated as of May 1, 1989, between the Company and the Rights Agent
named therein, as amended), at prices not in excess of $22.00 nor less than
$19.00 per Share in cash, as specified by stockholders tendering their Shares,
upon the terms and subject to the conditions set forth in its Offer to
Purchase, dated October 7, 1996 (the "Offer to Purchase"), and in the related
Letter of Transmittal (which together constitute the "Offer").
The Company will determine the single per Share price, not in excess of
$22.00 nor less than $19.00 per Share, net to the seller in cash (the
"Purchase Price"), that it will pay for Shares properly tendered pursuant to
the Offer, taking into account the number of Shares so tendered and the prices
specified by tendering stockholders. The Company will select the lowest
Purchase Price that will allow it to buy 2,250,000 Shares (or such lesser
number of Shares as are properly tendered at prices not in excess of $22.00
nor less than $19.00 per Share). All Shares properly tendered prior to the
Expiration Date (as defined in the Offer to Purchase) at prices at or below
the Purchase Price and not withdrawn will be purchased at the Purchase Price,
upon the terms and subject to the conditions of the Offer, including the
proration provisions. All Shares acquired in the Offer will be acquired at the
Purchase Price. Shares tendered at prices in excess of the Purchase Price and
Shares not purchased because of proration will be returned at the Company's
expense to the stockholders who tendered such Shares. The Company reserves the
right, in its sole discretion, to purchase more than 2,250,000 Shares pursuant
to the Offer. See Sections 1 and 14 of the Offer to Purchase.
Upon the terms and subject to the conditions of the Offer, if at the
Expiration Date more than 2,250,000 Shares (or such greater number of Shares
as the Company may elect to purchase) are properly tendered at or below the
Purchase Price and not withdrawn, the Company will buy shares first from all
Odd Lot Holders (as defined in the Offer to Purchase) who properly tender all
their Shares at or below the Purchase Price and then on a pro rata basis from
all other stockholders who properly tender Shares at prices at or below the
Purchase Price (and do not withdraw them prior to the Expiration Date). See
Sections 1 and 3 of the Offer to Purchase.
<PAGE>
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6 OF
THE OFFER TO PURCHASE.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are
enclosing the following documents:
1. Offer to Purchase, dated October 7, 1996;
2. Letter to Clients 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;
3. Letter, dated October 7, 1996, from Alyn V. Essman, Chairman of the
Board and Chief Executive Officer of the Company, to stockholders of the
Company;
4. Letter of Transmittal for your use and for the information of your
clients (together with accompanying Substitute Form W-9); and
5. Notice of Guaranteed Delivery to be used to accept the Offer if the
Share certificates and all other required documents cannot be delivered to
the Depositary by the Expiration Date or if the procedure for book-entry
transfer cannot be completed on a timely basis.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER,
PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MONDAY, NOVEMBER 4, 1996, UNLESS THE OFFER IS EXTENDED.
No fees or commissions will be payable by the Company to brokers, dealers or
other persons for soliciting tenders of Shares pursuant to the Offer other
than fees paid to the Dealer Manager, the Information Agent or the Depositary
as described in the Offer to Purchase. The Company, however, upon request,
will reimburse you for customary mailing and handling expenses incurred by you
in forwarding any of the enclosed materials to the beneficial owners of Shares
held by you as a nominee or in a fiduciary capacity. The Company will pay or
cause to be paid any stock transfer taxes applicable to its purchase of
Shares, except as otherwise provided in Instruction 7 of the Letter of
Transmittal.
To take advantage of the Offer, a duly executed and properly completed
Letter of Transmittal and any other required documents should be sent to the
Depositary with either certificate(s) representing the tendered Shares or
confirmation of their book-entry transfer all in accordance with the
instructions set forth in the Letter of Transmittal and the Offer to Purchase.
As described in Section 3, "The Offer--Procedure for Tendering Shares," of
the Offer to Purchase, tenders may be made without the concurrent deposit of
stock certificates or concurrent compliance with the procedure for book-entry
transfer, if such tenders are made by or through a broker or dealer which is a
member firm of a registered national securities exchange, or a member of the
National Association of Securities Dealers, Inc. or a commercial bank or trust
company (not a savings bank or savings and loan association) having an office,
branch or agency in the United States. Certificates for Shares so tendered (or
a confirmation of a book-entry transfer of such Shares into the Depositary's
account at one of the "Book-Entry Transfer Facilities" described in the Offer
to Purchase), together with a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof) and any other documents
required by the Letter of Transmittal, must be received by the Depositary
within three New York Stock Exchange trading days after timely receipt by the
Depositary of a properly completed and duly executed Notice of Guaranteed
Delivery.
Any inquiries you may have with respect to the Offer should be addressed to
CS First Boston Corporation or to the Information Agent at their respective
addresses and telephone numbers set forth on the back cover page of the Offer
to Purchase.
2
<PAGE>
Additional copies of the enclosed material may be obtained from the
undersigned, telephone: (800) 881-8320 (toll free) or from the Information
Agent, MacKenzie Partners, Inc., telephone: (800) 322-2885.
Very truly yours,
CS First Boston Corporation
Enclosures
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON AS AN AGENT OF THE COMPANY OR ANY OF ITS AFFILIATES, THE
DEALER MANAGER, THE INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR
ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY
OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED
HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE>
CPI CORP.
OFFER TO PURCHASE FOR CASH UP TO
2,250,000 SHARES OF ITS COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
AT A PURCHASE PRICE NOT IN EXCESS OF $22.00
NOR LESS THAN $19.00 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, NOVEMBER 4, 1996, UNLESS THE OFFER
IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated October 7,
1996, and the related Letter of Transmittal (which together constitute the
"Offer") in connection with the Offer by CPI Corp., a Delaware corporation
(the "Company"), to purchase 2,250,000 shares (or such lesser number of shares
as are properly tendered) of its Common Stock, $.40 par value per share (the
"Shares") (including the associated Preferred Stock Purchase Rights issued
pursuant to the Rights Agreement, dated as of May 1, 1989, between the Company
and the Rights Agent named therein, as amended), at prices not in excess of
$22.00 nor less than $19.00 per Share in cash, as specified by stockholders
tendering their Shares, upon the terms and subject to the conditions set forth
in the Offer.
The Company will determine the single per Share price, not in excess of
$22.00 nor less than $19.00 per Share, net to the seller in cash (the
"Purchase Price"), that it will pay for Shares properly tendered pursuant to
the Offer, taking into account the number of Shares so tendered and the prices
specified by tendering stockholders. The Company will select the lowest
Purchase Price that will allow it to buy 2,250,000 Shares (or such lesser
number of Shares as are properly tendered at prices not in excess of $22.00
nor less than $19.00 per Share). All Shares properly tendered prior to the
Expiration Date (as defined in the Offer to Purchase) at prices at or below
the Purchase Price and not withdrawn will be purchased at the Purchase Price,
upon the terms and subject to the conditions of the Offer, including the
proration provisions. All Shares acquired in the Offer will be acquired at the
Purchase Price. Shares tendered at prices in excess of the Purchase Price and
Shares not purchased because of proration will be returned at the Company's
expense to the stockholders who tendered such Shares. The Company reserves the
right, in its sole discretion, to purchase more than 2,250,000 Shares pursuant
to the Offer. See Sections 1 and 14 of the Offer to Purchase.
Upon the terms and subject to the conditions of the Offer, if at the
Expiration Date more than 2,250,000 Shares (or such greater number of Shares
as the Company may elect to purchase) are properly tendered at or below the
Purchase Price and not withdrawn, the Company will buy Shares first from Odd
Lot Holders (as defined in the Offer to Purchase) who properly tender all
their Shares at or below the Purchase Price and then on a pro rata basis from
all other stockholders who properly tender Shares at prices at or below the
Purchase Price (and do not withdraw them prior to the Expiration Date). See
Sections 1 and 3 of the Offer to Purchase.
We are the owner of record of Shares held for your account. As such, we are
the only ones who can tender your Shares, and then only pursuant to your
instructions. WE ARE SENDING YOU THE LETTER OF TRANSMITTAL FOR YOUR
INFORMATION ONLY; YOU CANNOT USE IT TO TENDER SHARES WE HOLD FOR YOUR ACCOUNT.
Please instruct us as to whether you wish us to tender any or all of the
Shares we hold for your account on the terms and subject to the conditions of
the Offer.
We call your attention to the following:
1. You may tender Shares at prices not in excess of $22.00 nor less than
$19.00 per Share as indicated in the attached Instruction Form, net to you
in cash.
<PAGE>
2. You may designate the priority in which your Shares shall be purchased
in the event of proration.
3. The Offer is not conditioned on any minimum number of Shares being
tendered. The Offer is, however, subject to certain other conditions set
forth in the Offer to Purchase.
4. The Offer, proration period and withdrawal rights will expire at 12:00
Midnight, New York City time, on Monday, November 4, 1996, unless the
Company extends the Offer.
5. The Offer is for 2,250,000 Shares, constituting approximately 16% of
the Shares outstanding as of September 24, 1996.
6. Tendering stockholders will not be obligated to pay any solicitation
fees or, subject to Instruction 7 of the Letter of Transmittal, stock
transfer taxes on the Company's purchase of Shares pursuant to the Offer.
7. If you held beneficially or of record, as of the close of business on
October 4, 1996 and continue to hold as of the Expiration Date, an
aggregate of fewer than 100 Shares, and you instruct us to tender on your
behalf all such Shares at or below the Purchase Price before the Expiration
Date and check the box captioned "Odd Lots" in the attached Instruction
Form, the Company, upon the terms and subject to the conditions of the
Offer, will accept all such Shares for purchase before proration, if any,
of the purchase of other Shares properly tendered at or below the Purchase
Price.
8. If you wish to tender portions of your Shares at different prices, you
must complete a separate Instruction Form for each price at which you wish
to tender each such portion of your Shares. We must submit separate Letters
of Transmittal on your behalf for each such price you will accept for each
such portion tendered.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing, detaching and returning to us the attached
Instruction Form. An envelope to return your Instruction Form to us is
enclosed. If you authorize us to tender your Shares, we will tender all such
Shares unless you specify otherwise on the attached Instruction Form.
YOUR INSTRUCTION FORM SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US
TO SUBMIT A TENDER ON YOUR BEHALF ON OR BEFORE THE EXPIRATION DATE OF THE
OFFER. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, NOVEMBER 4, 1996, UNLESS THE COMPANY
EXTENDS THE OFFER.
As described in Section 1 of the Offer to Purchase, if more than 2,250,000
Shares (or such greater number of Shares as the Company may elect to purchase)
have been properly tendered at or below the Purchase Price and not withdrawn
prior to the Expiration Date, the Company will purchase tendered Shares on the
basis set forth below:
(a) first, all Shares tendered and not withdrawn prior to the Expiration
Date by any Odd Lot Holder (as defined in the Offer to Purchase) who:
(1) tenders all Shares owned beneficially or of record by such Odd
Lot Holder at a price at or below the Purchase Price (tenders of less
than all Shares owned by such stockholder will not qualify for this
preference); and
(2) completes the box captioned "Odd Lots" on the Letter of
Transmittal and if applicable on the Notice of Guaranteed Delivery; and
(b) second, after purchase of all of the foregoing Shares, all other
Shares properly tendered at prices at or below the Purchase Price and not
withdrawn prior to the Expiration Date on a pro rata basis (with
appropriate adjustments to avoid purchases of fractional Shares) as
described in Section 1 of the Offer to Purchase.
2
<PAGE>
The Offer is being made to all holders of Shares. The Company is not aware
of any jurisdiction where the making of the Offer is not in compliance with
applicable law. If the Company becomes aware of any jurisdiction where the
making of the Offer is not in compliance with any valid applicable law, the
Company will make a good faith effort to comply with such law. If, after such
good faith effort, the Company cannot comply with such law, the Offer will not
be made to, nor will tenders be accepted from or on behalf of, the holders of
Shares residing in such jurisdiction. In any jurisdiction the securities or
blue sky laws of which require the Offer to be made by a licensed broker or
dealer, the Offer is being made on the Company's behalf by the Dealer Manager
or one or more registered brokers or dealers licensed under the laws of such
jurisdiction.
INSTRUCTION FORM
INSTRUCTIONS FOR TENDER OF SHARES OF CPI CORP.
Please tender to CPI Corp. (the "Company"), on (our) (my) behalf, the number
of Shares indicated below, which are beneficially owned by (us) (me) and
registered in your name, upon terms and subject to the conditions contained in
the Offer to Purchase of the Company dated October 7, 1996, and the related
Letter of Transmittal, the receipt of both of which is acknowledged.
NUMBER OF SHARES TO BE TENDERED: SHARES
ODD LOTS
[_]By checking this box the undersigned represents that the undersigned owned
beneficially or of record as of the close of business on October 4, 1996,
and continues to own beneficially or of record as of the Expiration Date,
an aggregate of fewer than 100 Shares and is tendering all of such Shares.
In addition, the undersigned is tendering Shares either (check one box):
[_]at the Purchase Price, as the same shall be determined by the Company in
accordance with the terms of the Offer (persons checking this box need not
indicate the price per Share below); or
[_]at the price per Share indicated below under "Price (In Dollars) Per Share
At Which Shares Are Being Tendered."
3
<PAGE>
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
- - - -------------------------------------------------------------------------------
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED,
THERE IS NO PROPER TENDER OF SHARES
(Stockholders who desire to tender Shares at more than one price must
complete a separate Instruction Form for each price at which Shares are
tendered.)
- - - -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
[_] $19.000 [_] $19.675 [_] $20.250 [_] $20.875 [_] $21.500
[_] $19.125 [_] $19.750 [_] $20.375 [_] $21.000 [_] $21.675
[_] $19.250 [_] $19.875 [_] $20.500 [_] $21.125 [_] $21.750
[_] $19.375 [_] $20.000 [_] $20.675 [_] $21.250 [_] $21.875
[_] $19.500 [_] $20.125 [_] $20.750 [_] $21.375 [_] $22.000
</TABLE>
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE OPTION AND RISK OF THE
TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
STOCKHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES.
EACH STOCKHOLDER MUST MAKE THE DECISION WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES AND AT WHAT PRICE OR PRICES SHARES SHOULD BE TENDERED.
Signature(s): _____________________ Address: __________________________
___________________________________ -----------------------------------
Name(s): __________________________ (Including Zip Code)
___________________________________ Area Code and Telephone Number: ___
(Please Print) Date: _______________________, 1996
___________________________________
(Taxpayer identification or Social
Security Number)
4
<PAGE>
[Letterhead of CPI]
October 7, 1996
To Our Stockholders:
CPI Corp. is offering to purchase up to 2,250,000 shares of its common stock
(the "Shares") (including the associated Preferred Stock Purchase Rights) from
existing stockholders. The price will not be in excess of $22.00 nor less than
$19.00 per Share. CPI Corp. is conducting the tender offer through a procedure
commonly referred to as a "Dutch Auction." This allows you to select the price
within the specified price range at which you are willing to sell your Shares
to CPI Corp.
On August 16, 1996, the last trading day prior to the announcement of the
offer, the closing price per Share for CPI Corp.'s common stock on the New
York Stock Exchange (the "NYSE") was $17.625, and on October 4, 1996, the last
trading day prior to the commencement of the offer, the closing price per
Share on the NYSE was $19.50. Any stockholder whose Shares are purchased in
the offer will receive the net purchase price in cash and will not incur the
usual transaction costs associated with open-market sales. Any stockholders
owning an aggregate of less than 100 Shares whose Shares are properly tendered
and purchased pursuant to the offer will avoid the applicable odd lot
discounts payable on sales of odd lots on the NYSE.
The offer is explained in detail in the enclosed Offer to Purchase and
Letter of Transmittal. I encourage you to read these materials carefully
before making any decision with respect to the offer. The instructions on how
to tender Shares are also explained in detail in the accompanying materials.
Neither CPI Corp. nor its Board of Directors makes any recommendation to
stockholders as to whether to tender or refrain from tendering their Shares.
Each stockholder must make the decision whether to tender Shares and, if so,
how many Shares and at what price or prices Shares should be tendered. The
Company has been advised that none of its directors or executive officers
intends to tender any Shares pursuant to the offer.
Sincerely,
/S/ Alyn V. Essman
Alyn V. Essman
Chairman of the Board and Chief
Executive Officer
<PAGE>
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 and the
related Letter of Transmittal which are being mailed to stockholders of CPI
Corp. on or about October 7, 1996. While the Offer is being made to all
stockholders of the Company, tenders will not be accepted from or on behalf of
the stockholders in any jurisdiction in which the acceptance thereof would not
be in compliance with the laws of such jurisdiction. In those jurisdictions
whose laws require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on behalf of the Company by CS First Boston
Corporation ("CS First Boston"), or one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
by
CPI Corp.
Up To 2,250,000 Shares Of Its Common Stock
(including the associated Preferred Stock Purchase Rights)
At A Purchase Price Not In Excess Of
$22.00 Nor Less Than $19.00 Per Share
CPI Corp., a Delaware corporation (the "Company"), invites its stockholders
to tender up to 2,250,000 shares of its Common Stock, $.40 par value per share
(the "Shares") (including the associated Preferred Stock Purchase Rights issued
pursuant to the Rights Agreement, dated as of May 1, 1989, between the Company
and the Rights Agent named therein, as amended), to the Company at prices not in
excess of $22.00 nor less than $19.00 per Share in cash, as specified by
stockholders tendering their Shares, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated October 7, 1996 and in the
related Letter of Transmittal (which together constitute the "Offer").
- - - --------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON MONDAY, NOVEMBER 4, 1996, UNLESS THE OFFER IS EXTENDED.
- - - --------------------------------------------------------------------------------
The Offer is not conditioned on any minimum number of Shares being
tendered. The Offer is, however, subject to certain other conditions set forth
in the Offer to Purchase.
The Board of Directors of the Company has approved the Offer. However,
neither the Company nor its Board of Directors makes any recommendation to
stockholders as to whether to tender or refrain from tendering their Shares.
Each stockholder must make the decision whether to tender Shares and, if so, how
many Shares and at what price or prices Shares should be tendered. The Company
has been advised that none of its directors or executive officers intends to
tender any Shares pursuant to the Offer.
The Company will determine the single per Share price, not in excess of
$22.00 nor less than $19.00 per Share, net to the seller in cash, that it will
pay for Shares properly tendered pursuant to the Offer, taking into account the
number of Shares so tendered and the prices specified by tendering stockholders.
The Company will select the lowest purchase price (the "Purchase Price") that
will allow it to buy 2,250,000 Shares (or such lesser number of Shares as are
properly tendered at prices not in excess of $22.00 nor less than $19.00 per
Share). All Shares properly tendered prior to the Expiration Date at prices at
or below the Purchase Price and not withdrawn will be purchased at the Purchase
Price, upon the terms and subject to the conditions of the Offer, including the
proration provisions. All Shares acquired in the Offer will be acquired at the
Purchase Price. The term "Expiration Date" means 12:00 Midnight, New York City
time, on Monday, November 4, 1996, unless and until the Company, in its sole
discretion, shall have extended the period of time during which the Offer will
remain open, in which event the term "Expiration Date" shall refer to the latest
time and date at which the Offer, as so extended by the Company, shall expire.
The Company reserves the right, in its sole discretion, to purchase more than
2,250,000 Shares pursuant to the Offer. For purposes of the Offer, the Company
will be deemed to have accepted for payment (and therefore purchased) Shares
properly tendered at or below the Purchase Price and not withdrawn (subject to
the proration provisions of the Offer) only when, as and if the Company gives
oral or written notice to the Depositary of its acceptance of such Shares for
payment pursuant to the Offer. Payment for Shares tendered and accepted for
payment pursuant to the Offer will be made only after timely receipt by the
Depositary of certificates for such Shares (or a timely confirmation of a book-
entry transfer of such Shares into the Depositary's account at a Book-Entry
Transfer Facility (as defined in the Offer to Purchase)), a properly completed
and duly executed Letter of Transmittal (or manually signed facsimile thereof)
and any other documents required by the Letter of Transmittal.
The Board of Directors has determined that the Company's financial
condition and outlook and current market conditions, including recent trading
prices of the Shares, makes this an attractive time to repurchase a significant
portion of the outstanding Shares. In the view of the Board of Directors, the
Offer represents a significant acceleration and expansion of what would
otherwise have been a continuing share repurchase program and an attractive
investment and use of proceeds of the recently completed photofinishing joint
venture with Eastman Kodak Company that should benefit the Company and its
stockholders over the long term. In particular, the Board of Directors believes
that the purchase of Shares at this time is consistent with the Company's long
term corporate goal of seeking to increase stockholder value. Accordingly, the
Company is providing stockholders with the opportunity to determine the price or
prices (not greater than $22.00 nor less than $19.00 per Share) at which they
are willing to sell their Shares, subject to the terms and conditions of the
Offer and without the usual transaction costs associated with market sales. The
Offer also allows stockholders to sell a portion of their Shares while retaining
a continuing equity position in the Company if they so desire.
Upon the terms and subject to the conditions of the Offer, if more than
2,250,000 Shares (or such greater number of Shares as the Company may elect to
purchase) have been properly tendered at prices at or below the Purchase Price
and not withdrawn prior to the Expiration Date, the Company will purchase
properly tendered Shares on the following basis: (a) first, all Shares properly
tendered and not withdrawn prior to the Expiration Date by any Odd Lot Holder
(as defined in the Offer to Purchase) who: (1) tenders all Shares owned,
beneficially or of record, by such Odd Lot Holder at a price at or below the
Purchase Price (partial tenders will not qualify for this preference); and (2)
completes the box captioned "Odd Lots" on the Letter of Transmittal and, if
applicable, on the Notice of Guaranteed Delivery; and (b) second, after purchase
of all of the foregoing Shares, all other Shares properly tendered at prices at
or below the Purchase Price and not withdrawn prior to the Expiration Date, on a
pro rata basis (with appropriate adjustments to avoid purchases of fractional
Shares) as described below. The Company also reserves the right, but will not be
obligated, to purchase all Shares properly tendered by any stockholder who
tendered all Shares owned, beneficially or of record, at or below the Purchase
Price and who, as a result of proration, would then own, beneficially, an
aggregate of fewer than 100 Shares. If the Company exercises this right, it will
increase the number of Shares that it is offering to purchase by the number of
Shares purchased through the exercise of the right.
The Company expressly reserves the right, in its sole discretion, at any
time and from time to time to extend the period of time during which the Offer
is open and thereby delay acceptance for payment of, and payment for, any Shares
by giving oral or written notice of such extension to Boatmen's Trust Company
(the "Depositary") and making a public announcement thereof.
Shares tendered pursuant to the Offer may be withdrawn at any time prior to
the Expiration Date and, unless theretofore accepted for payment by the Company
pursuant to the Offer, may also be withdrawn at any time after 12:00 Midnight,
New York City time, on Tuesday, December 3, 1996. For a withdrawal to be
effective, a notice of withdrawal must be in written, telegraphic or facsimile
transmission form and must be received in a timely manner by the Depositary at
its address set forth on the back cover of the Offer to Purchase. Any such
notice of withdrawal must specify the name of the tendering stockholder, the
name of the registered holder, if different from that of the person who tendered
such Shares, the number of Shares tendered and the number of Shares to be
withdrawn. If the certificates for Shares to be withdrawn have been delivered or
otherwise identified to the Depositary, then, prior to the release of such
certificates, the tendering stockholder must also submit the serial numbers
shown on the particular certificates for 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 by an Eligible Institution).
If Shares have been tendered pursuant to the procedure for book-entry tender set
forth in the Offer to Purchase, the notice of withdrawal also must specify the
name and the number of the account at the applicable Book-Entry Transfer
Facility to be credited with the withdrawn Shares and otherwise comply with the
procedures of such facility.
THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY TENDERS ARE MADE. The
information required to be disclosed by Rule 13e-4(d)(1) under the Securities
Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is
incorporated herein by reference. The Offer to Purchase and the related Letter
of Transmittal are being mailed to record holders of Shares and are being
furnished to brokers, banks and similar persons whose names or the names of
whose nominees, appear on the Company's stockholder list or, if applicable, who
are listed as participants in a clearing agency's security position listing for
subsequent transmittal to beneficial owners of Shares.
Additional copies of the Offer to Purchase and the Letter of Transmittal
may be obtained from the Depositary, the Information Agent or the Dealer Manager
and will be furnished promptly at the Company's expense.
The Information Agent for the Offer is:
[MacKenzie Partners, Inc.]
156 Fifth Avenue
New York, NY 10010
(212) 929-5500 (Call Collect)
or
Call Toll-Free (800) 322-2885
The Dealer Manager for the Offer is:
CS First Boston
Park Avenue Plaza
55 East 52nd Street
New York, NY 10055
Call Toll-Free (800) 881-8320
October 7, 1996
<PAGE>
CPI CORP.
NEWS FOR IMMEDIATE RELEASE FOR RELEASE_________
- - - -------------------------------------------------------------------------------
FOR FURTHER INFORMATION, CONTACT:
NAME Alyn V. Essman FIRM CPI Corporation
-------------------- -------------------
ADDRESS 1706 Washington Ave. CITY St. Louis
-------------------- -------------------
STATE, ZIP Missouri 63103 TELEPHONE (314) 231-1575
----------------- --------------
- - - --------------------------------------------------------------------------------
FOR FURTHER INFORMATION
AT THE FINANCIAL RELATIONS BOARD
George Zagoudis, Chicago 312/266-7800
After 6:00 p.m. 708/705-7240
Kathy Phelan, New York, NY 212/661-8030
CPI CORP. ANNOUNCES COMPLETION OF SALE OF 51 PERCENT OF FOX PHOTO UNIT TO
KODAK, CPI ALSO ANNOUNCES DUTCH AUCTION SELF-TENDER OFFER FOR 2.25 MILLION
SHARES
ST. LOUIS, MO., October 7, 1996 -- CPI Corp. today announced that Eastman Kodak
Company has completed its purchase of a 51% stake in CPI's Fox Photo, Inc.
subsidiary for $56.1 million in cash.
Kodak and CPI will operate the Fox Photo business as a joint venture, with Ted
deBuhr, a 22-year veteran of the photo industry, as president.
The joint venture will showcase to consumers a rapidly emerging family of
digital imaging products and services, as well as a full line of traditional
photographic products, designed to increase consumer involvement with picture
taking and utilization. In addition, the joint venture will serve as the
foundation for Kodak's planned new program of retail identity options for photo
retailers across the U.S.
CPI also announced that it is commencing today an offer to purchase up to
2,250,000 shares of its common stock, or approximately 16% of its shares
outstanding, from existing stockholders. CPI is conducting the tender offer
through a procedure commonly referred to as a "Dutch Auction" tender offer, in
which stockholders can tender their shares at prices not in excess of $22.00 nor
less than $19.00 per share. The offer expires at 12:00 Midnight, New York City
time, on November 4, 1996.
Questions and requests for assistance or for copies of the Offer to Purchase,
the Letter of Transmittal, or the Notice of Guaranteed Delivery may be directed
to the Information Agent or to the Dealer Manager at their respective addresses
and telephone numbers listed below.
CPI is a consumer services company operating over 1,700 retail locations,
including 1,028 Sears Portrait Studios in the U.S., Puerto Rico and Canada, 153
Prints Plus wall decor locations and, in the joint venture with Kodak, 551
photofinishing locations.
INFORMATION AGENT: DEALER MANAGER:
MacKenzie Partners, Inc. CS First Boston
156 Fifth Avenue Park Avenue Plaza
New York, NY 10010 55 East 52nd Street
(800) 322-2885 New York, NY 10055
(800) 881-8320
CPI corp - 1706 Washington Avenue - St. Louis, Missouri 63103
