<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
DECEMBER 9, 1997
(DATE TENDER OFFER FIRST PUBLISHED, SENT OR GIVEN TO SECURITY HOLDERS)
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CALCULATION OF FILING FEE
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<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE
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<S> <C>
$54,050,000 $15,944.75
</TABLE>
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* Calculated solely for the purpose of calculating the filing fee, based on
the purchase of 2,350,000 shares at $23.00 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 2,350,000 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 $23.00 nor less than $18.00 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 December 9, 1997 (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) The information set forth in the Introduction to and in Section 8 of the
Offer to Purchase is incorporated herein by reference.
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.
<PAGE>
(c) The information set forth in Section 11 of the Offer to Purchase is
incorporated herein by reference.
(d) None.
(e) None.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<C> <S>
(a)(1) Form of Offer to Purchase dated December 9, 1997
(a)(2) Form of Letter of Transmittal dated December 9, 1997, 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 December 9, 1997
(a)(5) Form of letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and other Nominees dated December 9, 1997
(a)(6) Form of letter to stockholders from Alyn V. Essman, Chairman of the
Board and Chief Executive Officer of the Company dated December 9,
1997
(a)(7) Summary Advertisement dated December 9, 1997
(a)(8) Press Release dated December 9, 1997
(b) Revolving Credit Agreement, dated June 16, 1997, by and among the
Company and certain Banks, including Mercantile Bank National
Association in its capacity as a Bank and as agent for the Banks,
incorporated herein by reference to Exhibit 10.6 of the Company's
Form 8-K filed on July 1, 1997.
(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: December 9, 1997
CPI Corp.
/s/ Alyn V. Essman
----------------------------------
(Name) Alyn V. Essman
(Title) Chairman and Chief Executive
Officer
3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
<C> <S> <C>
(a)(1) Form of Offer to Purchase dated December 9, 1997
(a)(2) Form of Letter of Transmittal dated December 9, 1997, 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
December 9, 1997
(a)(5) Form of letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and other Nominees dated December 9, 1997
(a)(6) Form of letter to stockholders from Alyn V. Essman, Chairman of
the Board and Chief Executive Officer of the Company dated
December 9, 1997
(a)(7) Summary Advertisement dated December 9, 1997
(a)(8) Press Release dated December 9, 1997
</TABLE>
<PAGE>
CPI CORP.
Exhibit 99.(a)(1)
OFFER TO PURCHASE FOR CASH UP TO
2,350,000 SHARES OF ITS COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
AT A PURCHASE PRICE NOT IN EXCESS OF $23.00
NOR LESS THAN $18.00 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON WEDNESDAY, JANUARY 7, 1998, 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 $23.00 nor less
than $18.00 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 $23.00 nor less than $18.00 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
2,350,000 Shares (or such lesser number of Shares as are
properly tendered at prices not in excess of $23.00 nor
less than $18.00 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 2,350,000 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 December 8, 1997 the last
full trading day on the NYSE prior to the announcement and
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 Harris Trust Company of New York (the "Depositary"), 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 VALIDLY COMPLETE THE LETTER OF
TRANSMITTAL INCLUDING THE SECTION 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:
CREDIT FIRST
SUISSE BOSTON
December 9, 1997
<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 $23.00 nor less than $18.00 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 $23.00
nor less than $18.00 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..............
2,350,000 Shares (or such lesser number of Shares as
are properly tendered at prices not in excess of
$23.00 nor less than $18.00 per share).
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 who tender their
Shares directly to the Depositary. 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 Wednesday, January 7, 1998, at 12:00 Midnight, New
Proration Dates........ 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 Wednesday,
January 7, 1998 unless the Offer is extended by the
Company, and, unless previously purchased, after
12:00 Midnight, New York City time, on Thursday, Feb-
ruary 5, 1998. 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 Decem-
ber 8, 1997 and as of the Expiration Date, if such
stockholder tenders all such Shares at or below the
Purchase Price prior to the Expiration Date and
checks the "Odd Lots" box in the Letter of Transmit-
tal. See Section 1.
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
- ------- ----
<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..................................... 8
4. Withdrawal Rights................................................... 12
5. Purchase of Shares and Payment of Purchase Price.................... 13
6. Certain Conditions of the Offer..................................... 14
7. Price Range of Shares; Dividends.................................... 15
8. Source and Amount of Funds.......................................... 16
9. Certain Information Concerning the Company.......................... 16
10. Interest of Directors and Officers; Transactions and Arrangements
Concerning Shares...................................................... 20
11. Effects of the Offer on the Market for Shares; Registration under
the Exchange Act....................................................... 21
12. Certain Legal Matters; Regulatory Approvals......................... 22
13. Certain United States Federal Income Tax Consequences............... 22
14. Extension of Offer, Termination; Amendment.......................... 24
15. Fees and Expenses................................................... 25
16. Miscellaneous....................................................... 25
SCHEDULE A Certain Transactions Involving Shares.......................... A-1
</TABLE>
THIS OFFER TO PURCHASE CONTAINS CERTAIN "FORWARD LOOKING STATEMENTS" THAT
ARE SUBJECT TO RISK AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS AND
PERFORMANCE COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED DEPENDING ON, AMONG
OTHER THINGS, CUSTOMER DEMAND FOR THE COMPANY'S SERVICES, THE AMOUNT OF
REVENUE DERIVED FROM THE PORTRAIT STUDIO DIVISION AND THE OVERALL LEVEL OF
ECONOMIC ACTIVITY IN THE COMPANY'S MAJOR MARKETS.
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 $23.00 nor less than $18.00 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 $23.00 nor less than $18.00 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
2,350,000 Shares (or such lesser number of Shares as are properly tendered at
prices not in excess of $23.00 nor less than $18.00 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
2,350,000 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 2,350,000 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 SUBSTITUTE FORM
W-9 THAT IS INCLUDED AS PART OF THE LETTER OF TRANSMITTAL MAY BE SUBJECT TO
REQUIRED UNITED STATES FEDERAL INCOME TAX BACKUP 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 Credit
Suisse First Boston Corporation ("Credit Suisse First Boston" or the "Dealer
Manager"), Harris Trust Company of New York (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 a
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. On
October 2, 1997, the Company announced that the Company and Kodak had agreed
to terminate their photofinishing joint venture. Pursuant to the termination,
Kodak has purchased the remaining 49% of Fox that it did not already own
pursuant to the joint venture arrangement, for a purchase price of $53.9
million that was paid as follows: $10 million in cash in consideration for the
Company's agreement not to compete with Fox for a period of two years and
$43.9 million in the form of a non-interest bearing note that matures on
January 4, 1999 (the "Photofinishing Transaction"). The funds required to
complete the Offer and pay related expenses will be provided from the $10
million cash payment to the Company from Kodak referred to above, Fox's
repayment of a $4 million note held by the Company that matured on October 4,
1997, other working capital and cash from operations and the balance, if
required, from borrowings incurred by the Company under its revolving credit
facility (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
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
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 $23.00 nor less than $18.00 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, where Shares are tendered by the
registered owner thereof directly to the Depositary, the usual transaction
costs associated with market sales. In addition, stockholders owning fewer
than 100 Shares whose Shares are purchased pursuant to the Offer and who
tender directly 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 December 8, 1997, the Company had issued and outstanding 11,872,861
Shares and had reserved 2,474,993 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 12,699 Shares for issuance with respect to unvested
awards under the Company's 1981 Stock Bonus Plan (the "Stock Bonus Plan"). The
2,350,000 Shares that the Company is offering to purchase pursuant to the
Offer represent approximately 19.8% of the Company's Shares outstanding on
December 8, 1997 (approximately 18.3% assuming exercise of outstanding
exerciseable Options). The Shares are listed and traded on the NYSE under the
symbol "CPY." On December 8, 1997, the last full trading day on the NYSE prior
to the announcement and 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 2,350,000 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 $23.00 nor less
than $18.00 per Share in cash.
5
<PAGE>
The term "Expiration Date" means 12:00 Midnight, New York City time, on
Wednesday, January 7, 1998 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 right to extend,
delay, terminate or amend the Offer. The Company reserves the right to
purchase more than 2,350,000 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
2,350,000 Shares (or such lesser number of Shares as are properly tendered at
prices not in excess of $23.00 nor less than $18.00 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 $23.00 nor
less than $18.00 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 $23.00 nor less than $18.00 net per Share in cash,
that will enable it to purchase 2,350,000 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 2,350,000 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 December 8,
1997 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.
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
five 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 $23.00 nor less than $18.00 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, where Shares are tendered by the
registered owner thereof directly to the Depositary, 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. 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.
The Board of Directors has determined that the Company's financial condition
and outlook and current market conditions, including recent trading prices of
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
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
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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 from the $10 million payment to the Company from Kodak as part of the
Photofinishing Transaction (see the Introduction), Fox's repayment of a $4
million note held by the Company that matured on October 4, 1997, other
working capital and cash from operations and the balance, if required, from
borrowings incurred by the Company under its revolving credit facility. 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 3,361,832 Shares and may purchase an
additional 1,138,168 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 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.
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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 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 in good standing of the
Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(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.
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.
United States Federal Income Tax Backup 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 Internal Revenue Service ("IRS"), unless the
stockholder or other payee provides its taxpayer identification number
(employer identification number or social security number) to the Depositary
(as payor) and certifies under penalties of perjury 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
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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. If the Depositary is not
provided with the correct taxpayer identification number, the United States
Holder (as defined in Section 13 herein) also may be subject to a penalty
imposed by the IRS. If withholding results in an overpayment of taxes, a
refund may be obtained. Certain "exempt recipients" (including, among others,
all corporations and certain Non-United States Holders (as defined in Section
13 herein)) are not subject to these backup withholding and information
reporting requirements. In order for a Non-United States Holder 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 UNITED STATES FEDERAL INCOME TAX BACKUP 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 BACKUP 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 AS PART OF THE LETTER OF
TRANSMITTAL.
For a discussion of certain United States federal income tax consequences to
tendering stockholders, see Section 13.
Withholding For Non-United States Holders. Even if a Non-United States
Holder 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 Non-United States Holder 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. In order to obtain a
reduced rate of withholding pursuant to a tax treaty, a Non-United States
Holder 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 Non-United States Holder must deliver to the Depositary a
properly completed and executed IRS Form 4224. The Depositary will determine a
stockholder's status as a Non-United States Holder 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
Non-United States Holder may be eligible to obtain a refund of all or a
portion of any tax withheld if such Non-United States Holder meets the
"complete termination," "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. Non-United States Holders 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
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(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.
Return of Tendered Shares. 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 Harris Trust and Savings Bank, the parent company of
Harris Trust Company of New York, 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 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
Harris Trust and Savings Bank 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,
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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
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 Thursday,
February 5, 1998.
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
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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.
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 2,350,000 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 $23.00 nor less than $18.00 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 five 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.
13
<PAGE>
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.
ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY, SIGN
AND RETURN TO THE DEPOSITARY THE SUBSTITUTE FORM W-9 INCLUDED WITH THE LETTER
OF TRANSMITTAL MAY BE SUBJECT TO REQUIRED FEDERAL INCOME TAX BACKUP
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 NON-UNITED STATES HOLDERS.
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 December 9, 1997
and prior to the Expiration Date any of the following events shall have
occurred (or shall have been determined by the Company to have occurred) that,
in the Company's reasonable 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 reasonable 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 reasonable 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
14
<PAGE>
or administrative agency or authority on, or any event that, in the
Company's reasonable 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 reasonable 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 Standard and Poor's Index of 500 Industrial
Companies by an amount in excess of 10% measured from the close of business
on December 8, 1997;
(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 December 8, 1997), (ii) any such
entity, group or person who has filed a Schedule 13D or Schedule 13G with
the Commission on or before December 8, 1997 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; or
(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 reasonable 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 reasonable 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>
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...................................... 19.50 13.88 0.14
4th Quarter...................................... 18.50 16.38 0.14
1997:
1st Quarter...................................... $19.38 $16.00 $0.14
2nd Quarter...................................... 22.06 16.00 0.14
3rd Quarter ..................................... 27.56 19.75 0.14
4th Quarter (through December 8, 1997)........... 23.87 17.75 0.14
</TABLE>
15
<PAGE>
On December 8, 1997, the last full trading day on the NYSE prior to the
announcement and commencement of the Offer, the closing price 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 2,350,000 Shares pursuant to the Offer at a
purchase price of $23.00 per Share, the Company expects the maximum aggregate
cost, including all fees and expenses applicable to the Offer, to be
approximately $54,650,000. It is anticipated that the Company will fund the
purchase of Shares pursuant to the Offer and the payment of related fees and
expenses from the $10 million payment to the Company from Kodak as part of the
Photofinishing Transaction (see the Introduction), Fox's repayment of a $4
million note held by the Company that matured on October 4, 1997, other
working capital and cash from operations and the balance, if required, from
borrowings by the Company under its revolving credit facility.
On June 16, 1997 the Company entered into a three year, $40 million
revolving credit facility (the "Credit Agreement"), among the Company, the
banks signatory thereto (the "Banks") and Mercantile Bank National
Association, as agent (the "Agent"). Borrowings under the Credit Agreement by
the Company bear interest at a rate per annum equal to, at the Company's
option, either a variable interest rate charged at LIBOR plus the applicable
margin rate of 0.50% to 1.25%, or at a federal funds rate plus the applicable
margin rate of 0.50% to 1.25% or prime rate. In respect of borrowings, an
unused commitment fee of between 0.125% and 0.25% is payable to the Banks
quarterly in arrears. Borrowings under the Credit Agreement are unsecured and
mature on June 16, 2000. The Credit Agreement also contains certain
representations and warranties, covenants and conditions customary to credit
facilities of this nature. As of the date hereof, there have been no
borrowings under the Credit Agreement other than letters of credit in the
aggregate of $4,007,430.
The Company currently anticipates that any borrowings under the Credit
Agreement will be repaid out of working capital.
The preceding description of the Credit Agreement is qualified in its
entirety by reference to the text of the Credit Agreement, which is
incorporated by reference as an exhibit to the Issuer Tender Offer Statement
on Schedule 13E-4 (the "Schedule 13E-4") of which this Offer to Purchase forms
a part. A copy of the Schedule 13E-4 may be obtained from the Commission in
the manner provided in Section 10 under the heading "--Additional
Information."
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 throughout the United States, Canada and Puerto Rico and
posters, prints and framing outlets in the United States.
16
<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 1, 1997 (the "Company's
1996 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 November 8, 1997 and November 9, 1996 (the "Company's Quarterly
Reports"), and other information and data contained in the Company's 1996
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
40 WEEKS ENDED 52 WEEKS ENDED
----------------------- -----------------------
NOVEMBER 8, NOVEMBER 9, FEBRUARY 1, FEBRUARY 3,
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS: (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS AND RATIOS)
Net sales................ 246,824 355,543 467,034 526,651
Costs and expenses:
Cost of sales (exclusive
of depreciation ex-
pense).................. 41,433 93,898 110,013 135,559
Selling, administrative
and general expenses.... 175,792 230,178 298,703 318,413
Depreciation and amorti-
zation.................. 22,820 31,194 37,946 41,007
Income from operations.... 6,779 273 20,372 31,672
Net interest expense...... 2,226 3,153 3,769 4,597
Other income.............. 877 480 501 563
Interest in joint venture
profit (loss) ........... (3,304) (430) (485) --
Gain (loss) on sale of
interest in
Photofinishing segment... (4,189) 6,180 6,180 --
Earnings (loss) before
income taxes and
discontinued operations.. (2,063) 3,350 22,799 27,638
Income tax expense (bene-
fit)..................... (311) 1,239 8,436 9,979
Earnings (loss) before
discontinued operations.. (1,752) 2,111 14,363 17,659
Discontinued operations... -- -- -- (3,326)
Net earnings (loss)... (1,752) 2,111 14,363 14,333
Earnings (loss) per common
share:
Earnings (loss) before
discontinued opera-
tions................... (0.15) 0.15 1.06 1.26
Discontinued operations.. -- -- -- (0.24)
Net earnings (loss)... (0.15) 0.15 1.06 1.02
Weighted average number of
common and common
equivalent shares
outstanding.............. 12,009 14,016 13,518 13,989
Ratio of earnings to fixed
charges (1).............. -- -- 1.45 1.55
Deficiency of earnings
available to cover fixed
charges.................. 8,341 9,293 -- --
CONDENSED CONSOLIDATED
BALANCE SHEETS (AT PERIOD
END):
Assets
Total current assets..... 133,403 93,060 63,685 72,825
Total assets............. 264,458 279,161 246,720 300,488
Liabilities and stockhold-
ers' equity
Total current liabili-
ties.................... 49,186 52,342 50,847 64,013
Long-term debt........... 59,798 44,870 44,888 54,804
Total liabilities........ 128,853 106,234 107,195 126,320
Stockholders' equity..... 135,605 172,927 139,525 174,168
Book value per common
share outstanding (2)... 11.42 12.41 11.94 12.56
Shares outstanding at end
of period............... 11,871 13,934 11,686 13,867
</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.
17
<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 Transaction only and (ii) the Photofinishing Transaction
together with the assumed purchase pursuant to the Offer of 2,350,000 shares
(a) at a $18 Purchase Price and (b) at a $23 Purchase Price, as if the
transactions had occurred on February 1, 1997 and February 4, 1996, with
respect to income statement data and on November 8, 1997 and February 1, 1997,
with respect to balance sheet data. The assumptions on which the pro forma
financial information is based, including a description of the Photofinishing
Transaction for this purpose, 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>
40 WEEKS ENDED NOVEMBER 8, 1997 52 WEEKS ENDED FEBRUARY 1, 1997
------------------------------------------- -------------------------------------------
PRO FORMA PRO FORMA
-------------------------------- ------------------------------------
PHOTOFINISHING PHOTOFINISHING
TRANSACTION AND TRANSACTION AND
----------------- -----------------
PHOTOFINISHING $18 $23 PHOTOFINISHING $18 $23
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............... 246,824 246,824 246,824 246,824 467,034 352,516 352,516 352,516
Costs and expenses:
Cost of sales
(exclusive of
depreciation
expense).............. 41,433 41,433 41,433 41,433 110,013 63,595 63,595 63,595
Selling, administrative
and general expenses.. 175,792 176,936 176,936 176,936 298,703 239,444 239,444 239,444
Depreciation and amor-
tization.............. 22,820 22,782 22,782 22,782 37,946 28,798 28,798 28,798
Income from operations
....................... 6,779 5,673 5,673 5,673 20,372 20,679 20,679 20,679
Net interest expense
(income)............... 2,226 (197) 1,827 2,327 3,769 176 2,644 3,372
Interest in joint
venture profit
(loss)................. (3,304) 0 0 0 (485) 0 0 0
Gain (loss) on sale of
interest in
photofinishing
segment................ (4,189) 0 0 0 6,180 0 0 0
Other income............ 877 4,201 4,201 4,201 501 5,501 5,501 5,501
Earnings (loss) before
income taxes........... (2,063) 10,071 8,047 7,547 22,799 26,004 23,536 22,808
Income tax expense (ben-
efit).................. (311) 3,726 2,977 2,792 8,436 9,621 8,708 8,439
Net earnings (loss)... (1,752) 6,345 5,070 4,755 14,363 16,383 14,828 14,369
Earnings (loss) per com-
mon share:
Net earnings (loss)... (0.15) 0.53 0.52 0.49 1.06 1.39 1.57 1.52
Weighted average number
of common and common
equivalent shares out-
standing............... 12,009 12,009 9,659 9,659 13,518 11,781 9,431 9,431
Ratio of earnings to
fixed charges.......... -- 1.38 1.22 1.15 1.45 1.78 1.52 1.46
Deficiency of earnings
available to cover
fixed charges.......... 8,341 -- -- -- -- -- -- --
CONDENSED CONSOLIDATED
BALANCE SHEETS (AT
PERIOD END):
Assets
Total current assets... 133,403 133,403 103,403 103,403 63,685 115,519 87,019 87,019
Total assets........... 264,458 264,458 234,458 234,458 246,720 250,449 221,949 221,949
Liabilities and stockholders' equity
Total current liabili-
ties.................. 49,186 49,186 62,086 73,836 50,847 50,847 65,247 76,997
Long-term debt......... 59,798 59,798 59,798 59,798 44,888 44,888 44,888 44,888
Total liabilities...... 128,853 128,853 141,753 153,503 107,195 116,097 130,497 142,247
Stockholders' equity... 135,605 135,605 92,705 80,955 139,525 134,352 91,452 79,702
Book value per common
share outstanding..... 11.42 11.42 9.74 8.50 11.94 11.50 9.80 8.54
Shares outstanding at
end of period......... 11,871 11,871 9,521 9,521 11,686 11,686 9,336 9,336
</TABLE>
18
<PAGE>
NOTES TO SUMMARY UNAUDITED CONSOLIDATED PRO FORMA FINANCIAL INFORMATION
The following assumptions regarding the Photofinishing Transaction and the
Offer were made in presenting the pro forma financial information.
(1) For the purposes of presenting the pro forma financial information the
"Photofinishing Transaction" includes (i) the entry into the
photofinishing joint venture with Kodak, (ii) the results of the Company's
tender offer made on October 7, 1996 and (iii) the termination of the
photofinishing joint venture with Kodak. The termination of the
photofinishing joint venture resulted in a non-interest bearing note of
$43.9 million ($40.3 million as discounted) which matures on January 4,
1999, payment of the $4.0 million working capital note due to the Company
from Fox that matured on October 4, 1997, and proceeds of $10.0 million in
consideration for the Company's agreement not to compete with Fox for a
period of two years (reflected in the Company's "Other income"). Adjusted
to reflect the accretion of imputed interest on the $43.9 million note
receivable and the other proceeds from such termination, net interest
expense is reduced by $1,526,000 (net of tax) for the 40 weeks ended
November 8, 1997 and $2,264,000 (net of tax) for the fiscal year ended
February 1, 1997. The pro forma presentation also reflects the loss of
service revenues, reduced by estimated expense reductions, for charges to
Fox for certain management services provided by the Company (including
consulting services by certain executive employees of the Company) as well
as the elimination of the Company's 49% share of Fox's income as reflected
in minority interest in unconsolidated subsidiary.
(2) The Offer results in the Company's acquisition of 2,350,000 Shares
pursuant to the Offer for $42,900,000 at $18.00 per Share and $54,650,000
at $23.00 including estimated costs of the Offer of $600,000. Net interest
expense has been adjusted to reflect the use of funds in the Offer.
(3) The 52-week period ended February 1, 1997 has been adjusted to reflect the
entry into the joint venture with Kodak announced on October 7, 1996, and
the stock repurchase on November 12, 1996, as if they both had occurred on
February 4, 1996. On entering into the joint venture with Kodak, the
Company sold a 51% interest in Fox for $56.1 million in cash reduced by
$2.5 million for expenses of the transaction. In the stock repurchase on
November 12, 1996, the Company purchased 2,250,000 shares of its common
stock at $19 per share for $43.6 million including $850,000 in expenses
for the transaction.
(4) 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.
(5) 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.
19
<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 December 8, 1997, the Company had issued and outstanding 11,872,861
Shares and had reserved 2,474,993 Shares for issuance upon exercise of
outstanding Options and 12,699 Shares with respect to unvested awards under
the Stock Bonus Plan. The 2,350,000 Shares that the Company is offering to
purchase represent approximately 19.8% of the Shares then outstanding
(approximately 18.3% assuming exercise of outstanding exerciseable Options).
As of December 8, 1997, the Company's directors and executive officers as a
group (17 persons) beneficially owned an aggregate of 1,277,092 Shares
representing approximately 9.9% 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 although certain executive officers and directors have
an interest in Shares held by the trustee of the Profit Sharing Plan and the
trustee will be making an independent decision whether or not to tender any
such Shares. If the Company purchases 2,350,000 Shares pursuant to the Offer,
and neither executive officers or directors nor the trustee of the Profit
Sharing Plan 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 12.2% 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.
20
<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 or other repurchase will
not become an Acquiring Person unless such person or entity acquires
additional Shares following the Offer or other repurchase.
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
21
<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 the principal United States federal income
tax consequences of an exchange of Shares for cash pursuant to the Offer by
United States Holders (as defined below). This summary is based upon the
Internal Revenue Code of 1986, as amended to the date hereof (the "Code"),
existing and proposed United States Treasury Regulations promulgated
thereunder, rulings, administrative pronouncements and judicial decisions,
changes to which could 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 or traders in securities or commodities,
insurance companies, tax-exempt organizations or persons who hold Shares as a
position in a "straddle" or as part of a "hedging" or "conversion" transaction
for United States federal income tax purposes or that have a functional
currency other than the United States dollar). For purposes of this summary, a
"United States Holder" is a holder of Shares that for United States federal
income tax purposes is (i) a citizen or resident of the United States, (ii) a
corporation or partnership created or organized in or under the laws of the
United States or any State or division thereof (including the District of
Columbia), (iii) an estate the income of which is subject to United States
federal income taxation regardless of its source or (iv) a trust (a) the
administration over which a United States court can exercise primary
supervision and (b) all of the substantial decisions of which one or more
United States persons have the authority to control. Notwithstanding the
preceding sentence, to the extent provided in United States Treasury
Regulations, certain trusts in existence on
22
<PAGE>
August 20, 1996, and treated as United States persons prior to such date, that
elect to continue to be treated as United States persons will also be United
States Holders. A "Non-United States Holder" is a holder of Shares other than
a United States Holder. Non-United States Holders who are not subject to
United States federal income tax on a net basis should see Section 3 for a
discussion of the applicable United States withholding rules and the potential
for obtaining a refund of all or a portion of the tax withheld. This summary
may not be applicable with respect to Shares acquired as compensation
(including Shares acquired upon the exercise of stock options or which were or
are subject to forfeiture restrictions). This 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 the 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. As a consequence of the exchange, the United States Holder will,
depending on such holder's particular circumstances, be treated either as
having sold such holder's Shares or as having received a dividend distribution
from the Company with the tax consequences described below.
Under Section 302 of the Code, a United States Holder whose Shares are
exchanged pursuant to the Offer will be treated as having sold such holder's
Shares, and thus will recognize gain or loss if the exchange (i) results in a
"complete termination" of all of such holder's equity interest in the Company,
(ii) is a "substantially disproportionate" redemption with respect to such
holder or (iii) is "not essentially equivalent to a dividend" with respect to
the holder, each as discussed below. In applying each of the Section 302
tests, a United States Holder will be treated as owning Shares actually or
constructively owned by certain related individuals and entities.
A United States Holder that exchanges all Shares actually and constructively
owned by such holder for cash pursuant to the Offer will be treated as having
completely terminated such holder's equity interest in the Company. An
exchange of Shares for cash will be "substantially disproportionate" with
respect to a United States Holder if the percentage of the then outstanding
Shares actually and constructively owned by such holder immediately after the
exchange is less than 80% of the percentage of the Shares actually and
constructively owned by such holder immediately before the exchange. A United
States Holder will satisfy the "not essentially equivalent to a dividend" test
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 exchange 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.
If a United States Holder is treated as having sold such holder's Shares
under the tests described above, such holder will recognize gain or loss equal
to the difference between the amount of cash received and such holder's
adjusted tax basis in the Shares exchanged therefor. Any such gain or loss
will be capital gain or loss. In the case of a noncorporate United States
Holder, the maximum marginal United States federal income tax rate applicable
to such gain will be lower than the maximum marginal United States federal
income tax rate applicable to ordinary income if such United States Holder's
holding period for such Shares exceeds one year and will be further reduced if
such Shares were held for more than 18 months.
If a United States Holder who exchanges Shares pursuant to the Offer is not
treated under Section 302 as having sold such holder's Shares for cash, cash
received by such holder will be treated as a dividend to the extent of such
holder's rateable share of the Company's current and accumulated earnings and
profits. Such a dividend
23
<PAGE>
will be includible in the United States Holder's gross income as ordinary
income without reduction for the adjusted tax basis of the Shares exchanged,
and no loss will be recognized. In such event the United States Holder's
adjusted tax basis in its remaining Shares exchanged generally will be added
to such holder's adjusted tax basis in the remaining Shares. To the extent
that cash received in exchange for Shares is treated as a dividend to a
corporate United States Holder, such holder will be (i) eligible for a
dividends-received deduction (subject to applicable limitations) and (ii)
subject to the "extraordinary dividend" provisions of the Code. To the extent,
if any, 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 to what extent 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 exchanged pursuant to the Offer to
ensure that such exchange will be treated as a sale, 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 or whose Tender is not
Accepted Pursuant to the Offer. Stockholders, none of whose Shares will be
exchanged pursuant to the Offer, will not incur any United States federal
income 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 Non-United States Holders 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 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
24
<PAGE>
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. For the
purposes of the Offer, a "business day" means any day other than a Saturday,
Sunday or Federal holiday and consists of the time period from 12:01 am
through 12:00 midnight, New York City time.
15. FEES AND EXPENSES.
The Company has retained Credit Suisse First Boston to act as its financial
advisor, as well as the Dealer Manager, in connection with the Offer. Credit
Suisse First Boston will receive a fee for its services of $300,000. The
Company also has agreed to reimburse Credit Suisse 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 Credit
Suisse First Boston against certain liabilities in connection with the Offer,
including liabilities under the federal securities laws. Credit Suisse 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 Harris Trust Company of New York 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 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
25
<PAGE>
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.
December 9, 1997
26
<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. Alyn Essman, Chairman of the Board and Chief Executive Officer, gifted
10,000 Shares to the Jewish Federation, on October 7, 1997.
Mr. Walter G. Blossfield, Executive Vice-President of the Portrait Studio
Division, exercised options over 6,000 Shares at an exercise price of $18.375
per Share and 6,100 Shares at an exercise price of $15.50 per Share and sold
12,100 Shares in the open market at prices ranging between $24.00 and $24.875
per Share on October 22, 1997. On October 23, 1997, he exercised options over
a further 5,900 Shares at an exercise price of $15.50 and sold 8,297 Shares in
the open market at a price of $24.00 per Share.
Mr. Patrick J. Morris, Senior Executive Vice-President, gifted 465 Shares to
United Way on October 22, 1997 and sold 10,000 Shares in the open market at a
price of $26.472 per Share on October 24, 1997.
Mr. Barry Arthur, Executive Vice-President and Chief Financial Officer, sold
2,000 Shares in the open market at a price of $25.875 per Share on October 30,
1997.
Ms. Fran Scheper, Executive Vice-President, Human Resources sold 1,633
Shares in the open market at a price of $25.00 per Share on October 28, 1997.
On November 7, 1997 she sold a further 456 Shares in the open market at prices
ranging between $25.00 and $25.375 per Share.
Mr. Richard Tarpley, Executive Vice-President, Manufacturing exercised
options over 2,000 Shares at an exercise price of $15.50 per Share and sold
2,000 Shares in the open market at a price of $26.50 per Share on each of
October 30, 1997 and November 3, 1997.
Mr. William Cronin, Executive Vice-President, Marketing sold 200 Shares in
the open market at a price of $18.125 per Share on November 24, 1997.
A-1
<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:
HARRIS TRUST COMPANY OF NEW YORK
By Mail: By Overnight Courier: By Hand:
Wall Street Station 88 Pine Street, 19th Floor Receive Window
P.O. Box 1023 New York, NY 10005 88 Pine Street, 19th Floor
New York, NY 10268-1023 New York, NY 10005
By Facsimile Transmission:
(for Eligible Institutions Only)
(212) 701-7636
(212) 701-6737
Confirm by Telephone:
(212) 701-7663
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:
LOGO
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:
CREDIT SUISSE FIRST BOSTON CORPORATION
Eleven Madison Avenue
New York, New York 10010-3629
(800) 881-8320
December 9, 1997
<PAGE>
Exhibit 99.(a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
CPI CORP.
PURSUANT TO THE OFFER TO PURCHASE DATED DECEMBER 9, 1997
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, JANUARY 7, 1998, UNLESS THE
OFFER IS EXTENDED.
TO: HARRIS TRUST COMPANY OF NEW YORK, DEPOSITARY
By Mail: Facsimile Transmission: By Hand:
Wall Street Station (for Eligible Institutions Receive Window
P.O. Box 1023 Only) 88 Pine Street, 19th Floor
New York, NY 10268-1023 New York, NY 10005
(212) 701-7636
(212) 701-6737
CONFIRM BY TELEPHONE:
(212) 701-7663
By Overnight Courier:
88 Pine Street, 19th Floor
New York, NY 10005
---------------
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 WILL 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 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 signed 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
[_] 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
[_] 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
December 8, 1997 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
December 8, 1997, 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 December 8, 1997, 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 HARRIS TRUST COMPANY OF NEW YORK:
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 December 9, 1997 (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.
<PAGE>
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 $23.00 nor less than $18.00 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
2,350,000 Shares (or such lesser number of Shares as are properly tendered at
prices not in excess of $23.00 nor less than $18.00 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> <C>
[_] $18.000 [_] $18.875 [_] $19.750 [_] $20.625 [_] $21.500 [_] $22.375
[_] $18.125 [_] $19.000 [_] $19.875 [_] $20.750 [_] $21.625 [_] $22.500
[_] $18.250 [_] $19.125 [_] $20.000 [_] $20.875 [_] $21.750 [_] $22.625
[_] $18.375 [_] $19.250 [_] $20.125 [_] $21.000 [_] $21.875 [_] $22.750
[_] $18.500 [_] $19.375 [_] $20.250 [_] $21.125 [_] $22.000 [_] $22.875
[_] $18.625 [_] $19.500 [_] $20.375 [_] $21.250 [_] $22.125 [_] $23.000
[_] $18.750 [_] $19.625 [_] $20.500 [_] $21.375 [_] $22.250
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
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 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.
- ------------------------------------------------------------------------------
[_] 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
Issue: [_] Check to: an address other than that shown
[_] Certificates to: on page 1 above.
Name(s)___________________________ Mail: [_] Check to: [_] Certificates to:
(PLEASE PRINT)
Address___________________________ Name(s)___________________________
__________________________________ (PLEASE PRINT)
(ZIP CODE) Address___________________________
__________________________________ __________________________________
(TAXPAYER IDENTIFICATION OR (ZIP CODE)
SOCIAL SECURITY NUMBER)
---------------------------------- ----------------------------------
<PAGE>
----------------------------------------------------------------------------
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: ___________________,
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: ___________________, ______________
----------------------------------------------------------------------------
<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 in good standing
of the Security Transfers Agents Medallion Program, the New York Stock
Exchange Medallion Signature Guarantee Program or the Stock Exchange
Medallion Program (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 (3) 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
<PAGE>
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.
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 any stock transfer taxes payable on the
transfer to it of Shares purchased pursuant to the Offer. If, however:
(a) payment of the 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 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 therefrom
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 December 8, 1997 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.
<PAGE>
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.
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 Harris Trust Company of New York 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
Internal Revenue Service ("IRS"), unless the stockholder or other payee
provides its taxpayer identification number (employer identification number or
social security number) to the Depositary (as payor) and certifies under
penalty of perjury 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. If the Depositary is not provided
<PAGE>
with the correct taxpayer identification number, the tendering stockholder
also may be subject to a penalty imposed by the IRS. The box in part 3 of the
form should be checked if the tendering stockholder has not been issued a TIN
and has applied for a TIN or intends to apply for a TIN in the near future. If
the box in Part 3 is checked and the Depositary is not provided with a TIN
prior to the payment of the Purchase Price, the Depositary will withhold 31%
on all such payments of the Purchase Price. If the tendering stockholder
provides the Depositary with a certified TIN within 60 days, the amount
withheld shall be refunded by the Depositary. If withholding results in an
overpayment of taxes, a refund may be obtained. Certain "exempt recipients"
(including, among others, all corporations and certain Non-United States
Holders (as defined herein)) are not subject to these backup withholding and
information reporting requirements. In order for a Non-United States Holder 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 NON-UNITED STATES HOLDER. Even if a Non-United States
Holder 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 Non-United States Holder 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
Non-United States Holder is any stockholder that for United States federal
income tax purposes is not (i) a citizen or resident of the United States,
(ii) a corporation or partnership created or organized in or under the laws of
the United States or any State or division thereof (including the District of
Columbia), (iii) an estate the income of which is subject to United States
federal income taxation regardless of the source of such income or (iv) a
trust (a) the administration over which a United States court can exercise
primary supervision and (b) all of the substantial decisions of which one or
more United States persons have the authority to control. Notwithstanding the
preceding sentence, to the extent provided in United States Treasury
Regulations, certain trusts in existence on August 20, 1996, and treated as
United States persons prior to such date, that elect to continue to be treated
as United States persons will also not be Non-United States Holders. In order
to obtain a reduced rate of withholding pursuant to a tax treaty, a Non-United
States Holder 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 Non-United States Holder must deliver to the Depositary a
properly completed and executed IRS Form 4224. The Depositary will determine a
stockholder's status as a Non-United States Holder and eligibility for a
reduced rate of, or an exemption from, withholding by reference to 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 Non-
United States Holder may be eligible to obtain a refund of all or a portion of
any tax withheld if such Non-United States Holder meets the "complete
termination," "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. Non-United States Holders 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: HARRIS TRUST COMPANY OF NEW YORK
- -------------------------------------------------------------------------------
PART 1: PLEASE PROVIDE
YOUR TIN IN THE BOX AT
RIGHT AND CERTIFY BY
SIGNING AND DATING BELOW.
SUBSTITUTE For individuals, this is ----------------------
FORM W-9 your social security Social Security Number
number (SSN). Resident
PAYER'S REQUEST aliens that do not have
FOR TAXPAYER or are not eligible to OR ___________________
IDENTIFICATION receive a SSN may use Employer Identification
NUMBER (TIN) your individual TIN. For Number
AND CERTIFICATION other entities, this is
your employer identification
number (EIN). For sole
proprietorships, either
your SSN or EIN may be
used. Refer to the chart
on page 1 of the Guidelines
for Certification of
Taxpayer Identification
Number on Substitute
Form W-9 (the "Guidelines")
for further clarification.
If you do not have a
TIN, see instructions
on how to obtain a TIN
on page 2 of the Guidelines,
check the appropriate box
in Part 3 below indicating
that you are awaiting
a TIN and certify by
signing and dating below.
----------------------------------------------------------
PART 2: For Payees exempt from backup
withholding, see the enclosed Guidelines and
complete as instructed therein.
----------------------------------------------------------
PART 3: Awaiting TIN [_]
----------------------------------------------------------
CERTIFICATION--Under penalties of perjury, I
certify that (1) the number shown on this form is
my correct TIN (or I am waiting for a number to
be issued to me) 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 (see page 2 of the Guidelines for further
clarification).
The Internal Revenue Service does not require
your consent to any provision of this document
other than certifications to avoid backup
withholding.
SIGNATURE ________________________________________
DATE _____________________________________________
NAME _____________________________________________
(PLEASE PRINT)
ADDRESS __________________________________________
__________________________________________________
(INCLUDE ZIP CODE)
- -------------------------------------------------------------------------------
FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 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:
LOGO
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:
CREDIT SUISSE FIRST BOSTON CORPORATION
Eleven Madison Avenue
New York, New York 10010-3629
(800) 881-8320
<PAGE>
Exihibit 99.(a)(3)
CPI CORP.
NOTICE OF GUARANTEED DELIVERY OF SHARES OF COMMON STOCK
As set forth in Section 3 of the Offer to Purchase (as defined below), 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 December 9, 1997 (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: HARRIS TRUST COMPANY OF NEW YORK
By Mail: Facsimile Transmission: By Hand:
WALL STREET STATION (FOR ELIGIBLE RECEIVE WINDOW
P.O. BOX 1023 INSTITUTIONS ONLY) 88 PINE STREET, 19TH
NEW YORK, NY 10268-1023 (212) 701-7636 FLOOR
(212) 701-6737 NEW YORK, NY 10005
CONFIRM BY TELEPHONE:
(212) 701-7663
By Overnight Courier:
88 PINE STREET, 19TH FLOOR
NEW YORK, NY 10005
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 WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible
Institution" under the instructions thereto, such signature guarantee must
appear in the applicable space provided in the signature box on the Letter of
Transmittal.
<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
December 8, 1997 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
December 8, 1997, 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 December 8, 1997, 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> <C>
[_] $18.000 [_] $18.875 [_] $19.750 [_] $20.625 [_] $21.500 [_] $22.375
[_] $18.125 [_] $19.000 [_] $19.875 [_] $20.750 [_] $21.625 [_] $22.500
[_] $18.250 [_] $19.125 [_] $20.000 [_] $20.875 [_] $21.750 [_] $22.625
[_] $18.375 [_] $19.250 [_] $20.125 [_] $21.000 [_] $21.875 [_] $22.750
[_] $18.500 [_] $19.375 [_] $20.250 [_] $21.125 [_] $22.000 [_] $22.875
[_] $18.625 [_] $19.500 [_] $20.375 [_] $21.250 [_] $22.125 [_] $23.000
[_] $18.750 [_] $19.625 [_] $20.500 [_] $21.375 [_] $22.250
</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
----------------------------------- [_] Philadelphia Depository Trust
Area Code(s) and Telephone Number(s) Company
Account Number: ___________________
3
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned is a member in good standing of the Security Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Guarantee
Program or the Stock Exchange Medallion Program (each such entity, an
"Eligible Institution") 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 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: _______________________,
DO NOT SEND CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES MUST BE
SENT WITH THE LETTER OF TRANSMITTAL.
4
<PAGE>
Exhibit 99.(a)(4)
CREDIT SUISSE FIRST BOSTON CORPORATION
Eleven Madison Avenue
New York, New York 10010-3629
CPI CORP.
OFFER TO PURCHASE FOR CASH UP TO
2,350,000 SHARES OF ITS COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
AT A PURCHASE PRICE NOT IN EXCESS OF $23.00
NOR LESS THAN $18.00 PER SHARE
------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, JANUARY 7, 1998, 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 2,350,000
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 $23.00 nor less than
$18.00 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 December 9, 1997 (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
$23.00 nor less than $18.00 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 2,350,000 Shares (or such lesser
number of Shares as are properly tendered at prices not in excess of $23.00
nor less than $18.00 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 2,350,000 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 2,350,000 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 such Shares 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 December 9, 1997;
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 December 9, 1997, 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 WEDNESDAY, JANUARY 7, 1998, 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 (or a manually signed facsimile thereof) including any
required signature guarantees 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,
commercial bank, trust company, savings bank or savings and loan association
having an office, branch or agency in the United States, which is a member in
good standing of the Security Transfer Agents Medallion Program, the New York
Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange
Medallion Program. 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
Credit Suisse 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 (toll free).
Very truly yours,
Credit Suisse 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>
Exhibit 99.(a)(5)
CPI CORP.
OFFER TO PURCHASE FOR CASH UP TO
2,350,000 SHARES OF ITS COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
AT A PURCHASE PRICE NOT IN EXCESS OF $23.00
NOR LESS THAN $18.00 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, JANUARY 7, 1998, UNLESS THE
OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated December 9,
1997, 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 2,350,000 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
$23.00 nor less than $18.00 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
$23.00 nor less than $18.00 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 2,350,000 Shares (or such lesser
number of Shares as are properly tendered at prices not in excess of $23.00
nor less than $18.00 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 2,350,000 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 2,350,000 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 $23.00 nor less than
$18.00 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 Wednesday, January 7, 1998, unless the
Company extends the Offer.
5. The Offer is for 2,350,000 Shares, constituting approximately 19.8% of
the Shares outstanding as of December 8, 1997.
6. Tendering stockholders will not be obligated to pay any brokerage
commissions or solicitation fees to the Dealer Manager, Depositary,
Information Agent or the Company 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
December 8, 1997 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 WEDNESDAY, JANUARY 7, 1998, UNLESS THE
COMPANY EXTENDS THE OFFER.
As described in Section 1 of the Offer to Purchase, if more than 2,350,000
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 December 9, 1997, 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 December 8, 1997,
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> <C>
[_] $18.000 [_] $18.875 [_] $19.750 [_] $20.625 [_] $21.500 [_] $22.375
[_] $18.125 [_] $19.000 [_] $19.875 [_] $20.750 [_] $21.625 [_] $22.500
[_] $18.250 [_] $19.125 [_] $20.000 [_] $20.875 [_] $21.750 [_] $22.625
[_] $18.375 [_] $19.250 [_] $20.125 [_] $21.000 [_] $21.875 [_] $22.750
[_] $18.500 [_] $19.375 [_] $20.250 [_] $21.125 [_] $22.000 [_] $22.875
[_] $18.625 [_] $19.500 [_] $20.375 [_] $21.250 [_] $22.125 [_] $23.000
[_] $18.750 [_] $19.625 [_] $20.500 [_] $21.375 [_] $22.250
</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: _________________________,
___________________________________
(Taxpayer identification or Social
Security Number)
4
<PAGE>
Exhibit 99.(a)(6)
LOGO
December 9, 1997
To Our Stockholders:
CPI Corp. is offering to purchase up to 2,350,000 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 $23.00 or less than
$18.00 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 December 8, 1997, the last trading day prior to the announcement and
commencement of the offer, the closing price per Share for CPI Corp.'s common
stock on the New York Stock Exchange ("NYSE") was $19.50. Any stockholder,
tendering shares directly to the Depositary, 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 directly
to the Depositary 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 the 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,
LOGO
Alyn V. Essman
Chairman of the
Board and Chief
Executive Officer
<PAGE>
EXHIBIT 99.(a)(7)
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 December 9, 1997. 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 Credit Suisse First
Boston Corporation ("Credit Suisse First Boston" or the "Dealer Manager"), 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 2,350,000 SHARES OF ITS COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
AT A PURCHASE PRICE NOT IN EXCESS OF $23
NOR LESS THAN $18 PER SHARE
CPI Corp., a Delaware corporation (the "Company"), invites its stockholders
to tender up to 2,350,000 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 $23 nor less than $18 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 December 9, 1997 and in the related Letter of
Transmittal (which together constitute the "Offer").
- --------------------------------------------------------------------------------
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.
<PAGE>
The Company will determine the single per Share price, not in excess of $23
nor less than $18 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 2,350,000 Shares (or such lesser number of Shares as are
properly tendered at prices not in excess of $23 nor less than $18 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 Wednesday, January 7, 1998, 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
2,350,000 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 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 $23 nor less than $18 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
2,350,000 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 beneficially
owned, 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 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 Harris Trust Company of
New York (the "Depositary") and making a public announcement thereof.
<PAGE>
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 Thursday, February 5, 1998. 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 (as defined in the Offer to Purchase) (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, New York 10010
(212) 929-5500 (Call Collect)
or
Call Toll-Free (800) 322-2885
The Dealer Manager for the Offer is:
CREDIT FIRST
SUISSE BOSTON
Eleven Madison Avenue
New York, New York 10010-3629
(800) 881-8320 (toll free)
December 9, 1997
<PAGE>
EXHIBIT 99.(a)(8)
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 DUTCH AUCTION SELF-TENDER OFFER
FOR UP TO 2,350,000 SHARES
ST.LOUIS, MO., December 9, 1997--CPI Corp. (NYSE - CPY) today announced that it
is commencing today an offer to purchase up to 2,350,000 shares of common stock,
or approximately 19.8% 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 $23.00 nor less than $18.00 per share. The offer expires
at 12:00 midnight, New York City time on January 7, 1998.
Questions and requests for assistance or for copies of the Offer of 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 approximately 1,200 retail
locations, including 1,030 Sears Portrait Studios in the U.S., Puerto Rico and
Canada and 157 Prints Plus wall decor stores.
INFORMATION AGENT: DEALER MANAGER:
MacKenzie Partners, Inc. Credit Suisse First Boston
156 Fifth Avenue Eleven Madison Avenue
New York, NY 10010 New York, NY 10010
(800) 322-2885 (800) 881-8320
