<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 17, 1994
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
ELDEC CORPORATION
(Name of Subject Company)
CRANE ACQUISITION CORP.
CRANE CO.
(Bidders)
COMMON STOCK, PAR VALUE $0.05 PER SHARE
(Title of Class of Securities)
284452 10 9
(CUSIP Number of Class of Securities)
------------------------
PAUL R. HUNDT
SECRETARY
CRANE CO.
100 FIRST STAMFORD PLACE
STAMFORD, CT 06902
TELEPHONE NUMBER (203) 363-7300
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Bidders)
------------------------
COPIES TO:
Albert F. Lilley
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
Telephone: (212) 530-5754
------------------------
CALCULATION OF FILING FEE
------------------------------
------------------------------
<TABLE>
<CAPTION>
TRANSACTION AMOUNT OF
VALUE* FILING FEE**
<S> <C>
---------------------------
$78,482,586 $15,696.52
---------------------------
---------------------------
<FN>
* Pursuant to, and as provided by, Rule 0-11(d), this amount is based upon the
Bidder's offer to purchase 6,037,122 shares of Common Stock of the Subject
Company at $13 cash per share, which is equal to the sum of (i) all of the
Shares outstanding at February 4, 1994 and (ii) the number of Shares subject
to outstanding options under the Subject Company's employee stock option
plans at February 4, 1994, in each case, as provided by the Subject Company.
** 1/50 of 1% of Transaction Valuation.
</TABLE>
/ / Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: Filing Party:
Form or Registration No.: Date Filed:
Page 1 of Pages
The Exhibit Index is located on Page
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
CUSIP NO. 284452 10 9
1) Name of Reporting Persons S.S. or I.R.S. Identification
Nos. of Above Persons __Crane Co. I.R.S. No. 13-1952290__
2) Check the Appropriate box if a Member of a Group (See Instructions)
/ / (a) ___________________________________________________________________
/ / (b) ___________________________________________________________________
3) SEC Use Only ______________________________________________________________
4) Sources of Funds (See Instructions) __BK___________________________________
5) /X/ Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(e) or (2(f).
6) Citizenship or Place of Organization __Delaware____________________________
7) Aggregate Amount Beneficially Owned by Each Reporting Person __0___________
8) / / Check if the Aggregate Amount in Row 7 Excludes Certain Shares (See
Instructions).
9) Percent of Class Represented by Amount in Row 7 __NA_______________________
10) Type of Reporting Person (See Instructions) __CO___________________________
2
<PAGE>
CUSIP NO. 284452 10 9
1) Name of Reporting Persons S.S. or I.R.S. Identification
Nos. of Above Persons __Crane Acquisition Corp.*__
2) Check the Appropriate box if a Member of a Group (See Instructions)
/ / (a) __________________________________________________________________
/ / (b) __________________________________________________________________
3) SEC Use Only ______________________________________________________________
4) Sources of Funds (See Instructions) __AF__
5) / / Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(e)or (2(f).
6) Citizenship or Place of Organization __Washington__________________________
7) Aggregate Amount Beneficially Owned by Each Reporting Person __0___________
8) / / Check if the Aggregate Amount in Row 7 Excludes Certain Shares (See
Instructions).
9) Percent of Class Represented by Amount in Row 7 __NA_______________________
10) Type of Reporting Person (See Instructions) __CO__________________________
- ------------------------
* Has not yet received I.R.S. Identification No.
3
<PAGE>
TENDER OFFER
This Tender Offer Statement on Schedule 14D-1 relates to the offer by Crane
Acquisition Corp., a Washington corporation (the "Purchaser"), and a wholly
owned subsidiary of Crane Co., a Delaware corporation ("Crane"), to purchase all
outstanding shares of Common Stock, $0.05 par value per share (the "Shares"), of
ELDEC Corporation, a Washington corporation (the "Company"), at a price of $13
per share, net to the seller in cash and without interest thereon, on the terms
and subject to the conditions set forth in the Offer to Purchase, dated February
17, 1994 (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
(which collectively constitute the "Offer").
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is ELDEC Corporation, a Washington
corporation, and the address of its principal executive offices is 16700 - 13th
Avenue West, P.O. Box 100, Lynnwood, WA 98046-0100.
(b) The exact title of the class of equity securities being sought in the
Offer is Common Stock, $0.05 par value per share, of the Company. The
information set forth in the Introduction to the Offer to Purchase is
incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of the Shares;
Dividends") of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d), (g) This Statement is filed by the Purchaser and Crane. The
information set forth in the Introduction and Section 9 ("Certain Information
Concerning the Purchaser and Crane") of, and Schedule I to, the Offer to
Purchase is incorporated herein by reference.
(e)-(f) Neither Crane nor any of the persons identified in this Item 2 has,
during the last five years (i) been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) except: On March 28,
1991, Crane pleaded NOLO CONTENDERE, in the United States District Court for the
Middle District of Georgia, Macon Division, to a one count information to the
effect that one of its divisions, since dissolved, having knowledge of the
actual commission of a felony, to wit, that a purchasing agent of a customer was
attempting, in violation of 26 USC Section 7201, to evade taxes on certain
monies which he had caused employees of the division to pay to him to ensure
that his employer would continue to buy products from that division, had
concealed and had not as soon as possible made known same to some judge or other
person in civil authority under the United States, all in violation of 18 USC
Section 4, and was fined $100,000, or (ii) been a party to a civil proceeding of
a judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting activities subject to, Federal or State
securities laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) The information set forth in Section 9 ("Certain Information Concerning
the Purchaser and Crane") of the Offer to Purchase is incorporated herein by
reference.
(b) The information set forth in Section 10 ("Background of the Offer;
Contacts with the Company; The Merger Agreement; The Stock Purchase Agreement;
The Confidentiality Agreement; Statutory Requirements") of the Offer to Purchase
is incorporated herein by reference. Since January 1, 1990 there have been no
contacts, negotiations or transactions required to be set forth in this item.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in Section 12 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
4
<PAGE>
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDERS.
(a)-(e) The information set forth in the Introduction, Section 9 ("Certain
Information Concerning the Purchaser and Crane"), Section 10 ("Background of the
Offer; Contacts with the Company; The Merger Agreement; The Stock Purchase
Agreement; The Confidentiality Agreement; Statutory Requirements") and Section
11 ("Purpose of the Offer; Plans for the Company") of the Offer to Purchase are
incorporated herein by reference. Except as set forth therein, there are no
plans or proposals required to be set forth in this item.
(f)-(g) The information set forth in Section 7 ("Effect of the Offer on the
Market for the Shares; NASDAQ Quotation; Exchange Act Registration; Margin
Regulations") of the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introduction, Section 9 ("Certain
Information Concerning the Purchaser and Crane"), Section 10 ("Background of the
Offer; Contacts with the Company; The Merger Agreement; The Stock Purchase
Agreement; The Confidentiality Agreement; Statutory Requirements") and Section
11 ("Purpose of the Offer; Plans for the Company") of the Offer to Purchase is
incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information in the Introduction, Section 10 ("Background of the Offer;
Contacts with the Company; The Merger Agreement; The Stock Purchase Agreement;
The Confidentiality Agreement; Statutory Requirements"), Section 11 ("Purpose of
the Offer; Plans for the Company") and Section 16 ("Certain Fees and Expenses")
of the Offer to Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and Section 16 ("Certain Fees
and Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF BIDDERS.
The information in Section 9 ("Certain Information Concerning the Purchaser
and Crane") of the Offer to Purchase is incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information in Section 10 ("Background of the Offer; Contacts with
the Company; The Merger Agreement; The Stock Purchase Agreement; The
Confidentiality Agreement; Statutory Requirements") of the Offer to Purchase is
incorporated herein by reference.
(b)-(c) The information set forth in Section 15 ("Certain Legal Matters;
Required Regulatory Approvals") of the Offer to Purchase is incorporated herein
by reference.
(d) The information set forth in the Introduction Section 6 ("Price Range
of the Shares; Dividends") Section 7 ("Effect of the Offer on the Market for the
Shares; NASDAQ Quotation; Exchange Act Registration; Margin Regulations"),
Section 12 ("Source and Amount of Funds") and Section 15 ("Certain Legal
Matters; Required Regulatory Approvals") of the Offer to Purchase is
incorporated herein by reference.
(e) The information set forth in Section 15 ("Certain Legal Matters;
Required Regulatory Approvals") of the Offer to Purchase is incorporated herein
by reference.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2),
respectively, is incorporated herein by reference.
5
<PAGE>
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<C> <S>
(a)(1) Offer to Purchase, dated February 17, 1994.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter from the Information Agent to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form
W-9.
(a)(7) Text of Press Release issued by Crane, dated February 11, 1994.
(b) Not applicable.
(c)(1) Agreement for Merger and Reorganization, dated as of February 11, 1994 among Crane
Co., Crane Acquisition Corp. and ELDEC Corporation.
(c)(2) Stock Purchase Agreement made and entered into as of February 11, 1994 among the
individual shareholders and trusts described in Schedule A thereto, Crane Co. and
Crane Acquisition Corp.
(c)(3) Confidentiality Agreement between the Company and Crane Co. dated December 17, 1993.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
</TABLE>
6
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
CRANE ACQUISITION CORP.
By: /s/ PAUL R. HUNDT
-----------------------------------
Name: Paul R. Hundt
Title: Vice President
Dated: February 17, 1994
CRANE CO.
By: /s/ PAUL R. HUNDT
-----------------------------------
Name: Paul R. Hundt
Title: Vice President
Dated: February 17, 1994
7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE
EXHIBIT NO.
- ------- ---
<S> <C> <C>
(a)(1) Offer to Purchase, dated February 17, 1994
(a)(2) Letter of Transmittal
(a)(3) Notice of Guaranteed Delivery
(a)(4) Letter from the Information Agent to Brokers, Dealers,
Commercial Banks, Trust Companies and other Nominees
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9
(a)(7) Text of Press Release issued by Crane, dated as of February
11, 1994
(c)(1) Agreement for Merger and Reorganization dated February 11,
1994 Crane Co., Crane Acquisition Corp. and ELDEC.
(c)(2) Stock Purchase Agreement dated as of February 11, 1994 among
the individual shareholders and trusts described in
Schedule A thereto, Crane Co. and Crane Acquisition Corp.
(c)(3) Confidentiality Agreement between the Company and Crane Co.
dated December 17, 1993.
</TABLE>
8
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
ELDEC CORPORATION
AT
$13 NET PER SHARE
BY
CRANE ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CRANE CO.
----------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MARCH 17, 1994, UNLESS THE OFFER IS EXTENDED.
------------------------
THE OFFER IS SUBJECT TO CERTAIN TERMS AND CONDITIONS CONTAINED IN THIS OFFER
TO PURCHASE. SEE THE INTRODUCTION AND SECTIONS 1, 14 AND 15.
------------------------
THE BOARD OF DIRECTORS OF ELDEC CORPORATION (THE "COMPANY") HAS UNANIMOUSLY
APPROVED THE OFFER AND THE MERGER REFERRED TO HEREIN, HAS DETERMINED THAT THE
OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS
OF THE COMPANY AND RECOMMENDS THAT SUCH STOCKHOLDERS ACCEPT THE OFFER AND TENDER
THEIR SHARES PURSUANT TO THE OFFER.
------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of his or her Shares
should either (a) complete and sign the Letter of Transmittal (or a facsimile
thereof) in accordance with the instructions in the Letter of Transmittal and
mail or deliver it together with the certificate(s) representing tendered Shares
and any other required documents, to the Depositary or tender such Shares
pursuant to the procedure for book-entry transfer set forth in Section 3 or (b)
request his or her broker, dealer, commercial bank, trust company or other
nominee to effect the transaction for him or her. A stockholder whose Shares are
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee must contact such broker, dealer, commercial bank, trust company
or other nominee if he or she desires to tender such Shares.
A stockholder who desires to tender his or her shares and whose certificates
representing such Shares are not immediately available or who cannot comply with
the procedures for book-entry transfer on a timely basis may tender such Shares
by following the procedures for guaranteed delivery set forth in Section 3.
Questions and requests for assistance may be directed to the Information
Agent at its address and telephone number set forth on the back cover of this
Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of
Transmittal, the Notice of Guaranteed Delivery and other related materials may
be obtained from the Information Agent or from brokers, dealers, commercial
banks and trust companies.
------------------------
The Information Agent for the Offer is:
Beacon Hill Partners, Inc.
------------------------
February 17, 1994
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
---------
<S> <C> <C>
INTRODUCTION.................................................................................................... 3
THE TENDER OFFER................................................................................................ 4
1. Terms of the Offer................................................................................... 4
2. Acceptance for Payment and Payment................................................................... 6
3. Procedures for Accepting the Offer and Tendering Shares.............................................. 7
4. Withdrawal Rights.................................................................................... 9
5. Certain Tax Consequences............................................................................. 10
6. Price Range of the Shares; Dividends................................................................. 11
7. Effect of the Offer on the Market for the Shares; NASDAQ Quotation; Exchange Act Registration; Margin
Regulations......................................................................................... 12
8. Certain Information Concerning the Company........................................................... 13
9. Certain Information Concerning the Purchaser and Crane............................................... 16
10. Background of the Offer; Contacts with the Company; The Merger Agreement; The Stock Purchase
Agreement; The Confidentiality Agreement; Statutory Requirements.................................... 19
11. Purpose of the Offer; Plans for the Company.......................................................... 27
12. Source and Amount of Funds........................................................................... 28
13. Dividends and Distributions.......................................................................... 28
14. Certain Conditions of the Offer...................................................................... 29
15. Certain Legal Matters; Required Regulatory Approvals................................................. 30
16. Certain Fees and Expenses............................................................................ 32
17. Miscellaneous........................................................................................ 33
Schedule I -- Directors and Executive Officers of Crane and the Purchaser
</TABLE>
2
<PAGE>
TO: ALL HOLDERS OF SHARES OF COMMON STOCK OF
ELDEC CORPORATION:
INTRODUCTION
Crane Acquisition Corp., a Washington corporation (the "Purchaser") and a
wholly owned subsidiary of Crane Co., a Delaware corporation ("Crane"), hereby
offers to purchase all outstanding shares of Common Stock, par value $0.05 per
share (the "Shares"), of ELDEC Corporation, a Washington corporation (the
"Company"), at a price of $13 per Share, net to the seller in cash, without
interest thereon (the "Offer Price"), upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which together constitute the "Offer").
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares pursuant to the
Offer. The Purchaser will pay all charges and expenses of First Interstate Bank,
as Depositary (the "Depositary"), and Beacon Hill Partners, Inc., as Information
Agent (the "Information Agent"), incurred in connection with the Offer. See
Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED UNANIMOUSLY THE OFFER AND
THE MERGER (AS DEFINED BELOW), HAS DETERMINED THAT THE OFFER AND THE MERGER ARE
FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY AND
RECOMMENDS THAT SUCH STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES
PURSUANT TO THE OFFER.
THE OFFER IS SUBJECT TO CERTAIN TERMS AND CONDITIONS CONTAINED IN THIS OFFER
TO PURCHASE. SEE SECTIONS 1, 14 and 15.
The Offer is being made pursuant to an Agreement for Merger and
Reorganization (the "Merger Agreement"), dated as of February 11, 1994, among
Crane, the Purchaser and the Company. The Merger Agreement provides, among other
things, that following the consummation of the Offer, subject to the terms and
conditions contained in the Merger Agreement and in accordance with the relevant
provisions of the Washington Business Corporation Act (the "WBCA"), the
Purchaser will be merged into the Company ("Merger") and the Company will be the
surviving corporation (the "Surviving Corporation"), and, on the effective date
of the Merger (the "Effective Date"), each outstanding Share (other than Shares
owned by Crane, any direct or indirect subsidiary of Crane or the Company and
Shares held by stockholders who perfect their appraisal rights under the WBCA)
will be converted into the right to receive an amount in cash equal to the price
per Share paid pursuant to the Offer (the "Merger Consideration").
Morgan Stanley & Co. Incorporated ("Morgan Stanley" or the "Financial
Advisor") has advised the Company's Board of Directors that the $13 per Share in
cash to be received by the holders of Shares in the Offer and the Merger is fair
from a financial point of view to such holders (the "Fairness Opinion"). A copy
of the Fairness Opinion is contained in the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
to be filed by the Company with the Securities and Exchange Commission (the
"Commission" or the "SEC") in connection with the Offer and which is being
mailed to stockholders herewith. Stockholders are urged to read the Fairness
Opinion in its entirety for a description of the assumptions made, factors
considered and procedures followed by the Financial Advisor and also the
Schedule 14D-9 in its entirety, including Item 5 thereof, for a description of
the fees payable to the Financial Advisor for its services relating to the Offer
and the Merger, including the rendering of the Fairness Opinion.
The Company's Board of Directors has unanimously approved and adopted the
Merger Agreement and the Plan of Merger, rendering Section 23B.17.020 (the
"Washington Fair Price Statute")
3
<PAGE>
and Section 23B.19.040 (the "Washington Moratorium Statute") inapplicable to the
Merger and to the Stock Purchase Agreement hereinafter described. After giving
effect to the Board's unanimous approval of the Merger Agreement, the
affirmative vote of the holders of at least 66 2/3% of the outstanding Shares is
the only approval required under the WBCA in order to give effect to the Merger.
See Section 10.
Furthermore, under the WBCA, if the Purchaser acquires at least 90% of the
outstanding Shares, the Purchaser would have the power to consummate the Merger
without a meeting or vote of the other stockholders of the Company pursuant to
the "short form" merger provisions of the WBCA. Under the WBCA as currently in
effect, the Purchaser believes that a "short form" merger would have to be
effected in the form of a merger of the Company into the Purchaser. Any such
merger would require an amendment to the Merger Agreement and may require the
consent of third parties under certain of the agreements to which the Company is
subject. See Section 10.
The Company has advised the Purchaser that, as of February 4, 1994 there
were 5,695,647 Shares outstanding. As of that date, 341,475 Shares were reserved
for issuance pursuant to the Company's Incentive Stock Option Plans (the "Option
Plans") and 250,910 shares were reserved for issuance pursuant to the Company's
Employee Stock Purchase Plan (the "Stock Purchase Plan"). The Purchaser has been
advised that the Company will terminate the Stock Purchase Plan prior to
consummation of the Offer. Based on the information supplied by the Company, the
Purchaser will need to purchase (pursuant to the Offer, the Stock Purchase
Agreement hereinafter described, or otherwise) at least 3,797,288 Shares
(assuming that no Shares are issued in addition to those outstanding on February
4, 1994 and assuming termination of the Stock Purchase Plan prior to
consummation of the Offer) or 3,967,570 Shares (on a fully-diluted basis) in
order to have sufficient voting power to approve the Merger without the
affirmative vote of any other stockholder of the Company and 5,126,082 Shares
(assuming no Shares are issued in addition to those outstanding on February 4,
1994 and assuming termination of the Stock Purchase Plan prior to consummation
of the Offer) or 5,351,901 Shares (on a fully diluted basis) in order to effect
the Merger as a "short form" merger without a meeting or vote of any other
stockholder of the Company. The Merger Agreement provides that immediately prior
to the consummation of the Offer, holders of then outstanding stock options
under the Option Plans will receive cash payments from the Company in settlement
of each such option. See Section 10. This may have the effect of reducing the
number of Shares issued upon exercise of options under the Option Plans.
Under a Stock Purchase Agreement (the "Stock Purchase Agreement") dated as
of February 11, 1994, among the individual shareholders and trusts described in
Schedule A thereto (the "Selling Stockholders"), Crane and the Purchaser,
Purchaser has agreed to purchase and the Selling Stockholders have agreed to
sell to Purchaser a total of 2,899,872 Shares (the "Subject Shares")
constituting approximately 51% of the Shares outstanding on February 4, 1994,
immediately following the acceptance for purchase and purchase of Shares
pursuant to the Offer, at the Merger Consideration. Also pursuant to the Stock
Purchase Agreement, if the Company's Board of Directors shall publicly withdraw
or modify in a manner adverse to Crane and Purchaser its recommendation of the
Offer, the Merger Agreement or the Merger, or recommend another acquisition
transaction, or shall have resolved to do any of the foregoing, then Purchaser
shall have the right to purchase the Subject Shares at $13 per share.
THE TENDER OFFER
1. TERMS OF THE OFFER. Upon the terms and subject to the conditions of the
Offer (including, if the Offer is extended or amended, the terms and conditions
of any such extension or amendment), the Purchaser will accept for payment and
thereby purchase all Shares validly tendered and not withdrawn in accordance
with the procedures set forth in Section 4 on or prior to the Expiration Date
(as hereinafter defined). The term "Expiration Date" means 12:00 Midnight, New
York City time, on March 17, 1994, unless and until the Purchaser, in its sole
discretion (but subject to the terms and
4
<PAGE>
conditions in the Merger Agreement), shall have extended the period of time for
which the Offer is open, in which event the term "Expiration Date" shall mean
the latest time and date at which the Offer, as so extended by the Purchaser,
shall expire.
The Purchaser expressly reserves the right, at any time or from time to
time, and regardless of whether or not any of the events set forth in Section 14
herein shall have occurred or shall have been determined by the Purchaser to
have occurred, to extend the period of time during which the Offer is open for
not more than 12 business days beyond the initially scheduled Expiration Date,
and thereby delay acceptance for payment of, and the payment for, any Shares, by
giving oral or written notice of such extension to the Depositary. There can be
no assurance that the Purchaser will exercise its right to extend the Offer.
During any such extension, all Shares previously tendered and not withdrawn will
remain subject to the Offer. See Section 4. The Purchaser acknowledges (a) that
Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Purchaser to pay the consideration offered or
return the Shares tendered promptly after the termination or withdrawal of the
Offer and (b) that the Purchaser may not delay acceptance for payment of, or
payment for, any Shares upon the occurrence of any of the conditions specified
in Section 14 without extending the period of time during which the Offer is
open. If any condition to the Offer is not satisfied by the Expiration Date,
then the Purchaser reserves the right to (1) decline to purchase any of the
Shares tendered, terminate the Offer and return all tendered Shares to tendering
shareholders, (2) extend the Offer for up to 60 business days after the
initially scheduled Expiration Date if there is a reasonable basis to believe
that such condition could be satisfied within such 60 business day period and,
subject to withdrawal rights set forth in Section 4 herein, retain all tendered
Shares until the expiration of the Offer as extended, or (3) waive all of the
unsatisfied conditions (other than the condition relating to the expiration of
the HSR Act (as defined below)) and, subject to complying with applicable rules
and regulations of the SEC, purchase all Shares validly tendered and not
withdrawn. The Purchaser also reserves the right, at any time or from time to
time, and regardless of whether or not any of the events set forth in Section 14
herein shall have occurred or shall have been determined by the Purchaser to
have occurred, to amend the terms and conditions of the Offer, provided that no
change may be made which (i) decreases the Offer Price, (ii) changes the form of
the consideration to be paid in the Offer, (iii) reduces the number of Shares
tendered for in the Offer or (iv) imposes conditions to the Offer in addition to
those specified in Section 14 herein.
Any such extension, delay, termination, waiver or amendment will be followed
as promptly as practicable by public announcement thereof, and such announcement
in the case of an extension will be made no later than 9:00 A.M., New York City
time, on the next business day after the previously scheduled Expiration Date.
Without limiting the manner in which the Purchaser may choose to make any public
announcement, subject to applicable law (including Rules 14d-4(c) and 14d-6(d)
under the Exchange Act, which require that material changes be promptly
disseminated to holders of Shares), the Purchaser shall have no obligation to
publish, advertise or otherwise communicate any such public announcement other
than by issuing a release to the Dow Jones News Service.
If the Purchaser makes a material change in the terms of the Offer, or if it
waives a material condition of the Offer, the Purchaser will extend the Offer to
the extent required by Rules 14d-4(c) and 14d-6(d) under the Exchange Act. The
minimum period during which an offer must remain open following material changes
in the terms of the offer, other than a change in price or a change in any
dealer's soliciting fee, will depend upon the facts and circumstances, including
the materiality of the changes. With respect to a change in price or a change in
any dealer's soliciting fee, a minimum ten business day period from the date of
such change is generally required to allow for adequate dissemination to
stockholders. Accordingly, if prior to the Expiration Date, the Purchaser should
increase the consideration offered pursuant to the Offer, and if the Offer is
scheduled to expire at any time earlier than the period ending on the tenth
business day from and including the date that notice of such increase is first
published, sent or given to holders of Shares, the Offer will be extended at
least until
5
<PAGE>
the expiration of such ten business day period. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or a federal holiday
and consists of the time period from 12:01 A.M. through 12:00 Midnight, New York
City time.
The Company has provided Purchaser, the Depositary and the Information Agent
with the Company's stockholder list and security position listings for the
purpose of disseminating the Offer to holders of Shares. This Offer to Purchase
and the related Letter of Transmittal will be mailed to record holders of shares
whose names appear on the Company's stockholder list and will be furnished, for
subsequent transmittal to beneficial owners of Shares, to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the stockholder list or, if applicable, who are
listed as participants in a clearing agency's security position listing for
subsequent transmittal to beneficial Owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of the Offer as so extended or amended), the Purchaser will
purchase, by accepting for payment, and will pay for all Shares validly tendered
and not withdrawn (as permitted by Section 4) prior to the Expiration Date
promptly after the later to occur of (i) the Expiration Date and (ii) the
satisfaction or waiver of the conditions to the Offer set forth in Section 14.
In addition, subject to applicable rules of the Commission, the Purchaser
expressly reserves the right to delay acceptance for payment of, or payment for,
Shares pending receipt of any regulatory or governmental approvals specified in
Section 15.
The Purchaser and the Company will file with the Federal Trade Commission
(the "FTC") and the Antitrust Division of the Department of Justice (the
"Antitrust Division") Premerger Notification and Report Forms under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), with respect to the acquisition of the Company. The waiting period under
the HSR Act applicable to the Purchaser's acquisition of the Company and the
Shares, including through the Offer and the Merger, will expire 15 days from the
date of such filing. See Section 15 for additional information regarding the HSR
Act and other antitrust considerations.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) Share Certificates for
such Shares or timely confirmation (a "Book-Entry Confirmation") of the
book-entry transfer of such Shares into the Depositary's account at the
Depository Trust Company, the Midwest Securities Trust Company or the
Philadelphia Depository Trust Company (collectively, the "Book-Entry Transfer
Facilities"), pursuant to the procedures set forth in Section 3, (ii) the Letter
of Transmittal (or a facsimile thereof) properly completed and duly executed,
with any required signature guarantees, or an Agent's Message (as defined below)
in connection with a book-entry transfer, and (iii) any other documents required
by the Letter of Transmittal.
The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares which are the subject of such Book-Entry
Confirmation, that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that the Purchaser may enforce such
agreement against such participant.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as, if
and when the Purchaser gives oral or written notice to the Depositary of the
Purchaser's acceptance of such Shares for payment pursuant to the Offer. In all
cases, upon the terms and subject to the conditions of the Offer, payment for
Shares purchased pursuant to the Offer will be made by deposit of the purchase
price therefor with the Depositary, which will act as agent for tendering
stockholders for the purpose of receiving payment from the Purchaser and
transmitting payment to validly tendering stockholders. Under no circumstances
will interest on the purchase price for Shares be paid by the Purchaser by
reason of any delay in making such payment.
6
<PAGE>
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if Share Certificates are submitted representing more Shares than are
tendered, Share Certificates representing unpurchased or untendered Shares will
be returned, without expense to the tendering stockholder (or, in the case of
Shares delivered by book-entry transfer into the Depositary's account at a Book-
Entry Transfer Facility pursuant to the procedures set forth in Section 3, such
Shares will be credited to an account maintained within such Book-Entry Transfer
Facility), as promptly as practicable following the expiration, termination or
withdrawal of the Offer.
If, prior to the Expiration Date, the Purchaser shall increase the
consideration offered to holders of Shares pursuant to the Offer, such increased
consideration shall be paid to all holders of Shares that are purchased pursuant
to the Offer, whether or not such Shares were tendered prior to such increase in
consideration.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to one or more of Crane's subsidiaries or affiliates the
right to purchase Shares tendered pursuant to the Offer, but any such transfer
or assignment will not relieve the Purchaser of its obligations under the Offer
or prejudice the rights of tendering stockholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Offer.
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES.
VALID TENDER OF SHARES
Except as set forth below, in order for Shares to be validly tendered
pursuant to the Offer, the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, together with any required signature
guarantees, or an Agent's Message in connection with a book-entry delivery of
Shares and any other documents required by the Letter of Transmittal, must be
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase on or prior to the Expiration Date and either (i)
Share Certificates representing tendered Shares must be received by the
Depositary or such Shares must be tendered pursuant to the procedure for
book-entry transfer set forth below and a Book-Entry Confirmation must be
received by the Depositary, in each case on or prior to the Expiration Date, or
(ii) the guaranteed delivery procedures set forth below must be complied with.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING STOCKHOLDER,
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
BOOK-ENTRY TRANSFER
The Depositary will make a request to establish accounts with respect to the
Shares at each of the Book-Entry Transfer Facilities for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in the system of any Book-Entry Transfer
Facility may make book-entry delivery of Shares by causing such Book-Entry
Transfer Facility to transfer such Shares into the Depositary's account at such
Book-Entry Transfer Facility in accordance with such Book-Entry Transfer
Facility's procedures for such transfer. However, although delivery of Shares
may be effected through book-entry transfer into the Depositary's account at a
Book-Entry Transfer Facility, the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or an Agent's Message in connection with a book-entry transfer and
any other required documents must, in any case, be transmitted to and received
by, the Depositary at one of its addresses set forth on the back cover of this
Offer to Purchase on or prior to the Expiration Date, or the guaranteed delivery
procedure set forth below must be complied with.
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH
SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
7
<PAGE>
SIGNATURE GUARANTEES
Signatures on all Letters of Transmittal must be guaranteed by a firm that
is a bank, broker, dealer, credit union, savings association or other entity
which is a member in good standing of a Medallion Signature Guarantee Program
(an "Eligible Institution"), unless the Shares tendered thereby are tendered (i)
by a registered holder of Shares who has not completed either the box labeled
"Special Payment Instructions" or the box labeled "Special Delivery
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution. See Instruction 1 of the Letter of Transmittal.
If the Share Certificates are registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made to, or
Share Certificates for unpurchased Shares are to be issued or returned to a
person other than the registered holder, then the tendered certificates must be
endorsed or accompanied by appropriate stock powers, signed exactly as the name
or names of the registered holder or holders appear on the certificates, with
the signatures on the certificates or stock powers guaranteed by an Eligible
Institution as provided in the Letter of Transmittal. See Instructions 1 and 5
of the Letter of Transmittal.
If the Share Certificates are forwarded separately to the Depository, a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof) must accompany each such delivery.
GUARANTEED DELIVERY
If a stockholder desires to tender Shares pursuant to the Offer and such
stockholder's Share Certificates are not immediately available or time will not
permit all required documents to reach the Depositary on or prior to the
Expiration Date, or the procedure for book-entry transfer cannot be completed on
a timely basis, such Shares may nevertheless be tendered if all of the following
guaranteed delivery procedures are duly complied with:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser, is received
by the Depositary, as provided below, on or prior to the Expiration Date;
and
(iii) the Share Certificates (or a Book-Entry Confirmation) representing
all tendered Shares, in proper form for transfer together with a properly
completed and duly executed Letter of Transmittal (or a facsimile thereof),
with any required signature guarantees (or, in the case of a book-entry
transfer, an Agent's Message) and any other documents required by the Letter
of Transmittal are received by the Depositary within five National
Association of Securities Dealers ("NASD") Automatic Quotation System
("NASDAQ") trading days after the date of execution of such Notice of
Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
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 of
Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of Share Certificates for, or of Book-Entry
Confirmation with respect to, such Shares, a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof), together with any
required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message) and any other documents required by the Letter of Transmittal.
Accordingly, payment might not be made to all tendering stockholders at the same
time, and will depend upon when Share Certificates or Book-Entry Confirmations
of such Shares are received into the Depositary's account at a Book-Entry
Transfer Facility.
BACK-UP FEDERAL TAX WITHHOLDING
Under the federal income tax laws, the Depositary will be required to
withhold 31 percent of the amount of any payments made to certain stockholders
pursuant to the Offer. To prevent back-up
8
<PAGE>
federal income tax withholding on payments made to certain stockholders with
respect to the purchase price of Shares purchased pursuant to the Offer, each
such stockholder must provide the Depositary with such stockholder's correct
taxpayer identification number and certify that such stockholder is not subject
to back-up federal income tax withholding by completing the Substitute Form W-9
included in the Letter of Transmittal. See Section 5 hereof and Instruction 10
of the Letter of Transmittal.
APPOINTMENT AS PROXY
By executing the Letter of Transmittal, a tendering stockholder irrevocably
appoints designees of the Purchaser, and each of them, as such stockholder's
attorneys-in-fact and proxies, with full power of substitution, in the manner
set forth in the Letter of Transmittal, to the full extent of such stockholder's
rights with respect to the Shares tendered by such stockholder and accepted for
payment and paid for by the Purchaser and with respect to any and all other
Shares and other securities or rights issued or issuable in respect of such
Shares on or after the date of this Offer to Purchase. All such proxies shall be
considered coupled with an interest in the tendered Shares. Such appointment
will be effective when, and only to the extent that, the Purchaser pays for such
Shares by depositing the purchase price therefor with the Depositary. Upon such
payment, all prior powers of attorney and proxies given by such stockholder with
respect to such Shares and such other securities or rights will be revoked,
without further action, and no subsequent powers of attorney and proxies may be
given by such stockholder (and, if given, will not be deemed effective). The
designees of the Purchaser will, with respect to the Shares for which such
appointment is effective, be empowered to exercise all voting and other rights
of such stockholder as they in their sole discretion may deem proper at any
annual or special meeting of the Company's stockholders, or any adjournment or
postponement thereof. The Purchaser reserves the right to require that, in order
for Shares to be deemed validly tendered, immediately upon the payment for such
Shares, the Purchaser or its designee must be able to exercise full voting
rights with respect to such Shares and other securities, including voting at any
meeting of stockholders.
DETERMINATION OF VALIDITY
All questions as to the form of documents and validity, eligibility
(including time of receipt) and acceptance for payment of any tender of Shares
will be determined by the Purchaser, in its sole discretion, whose determination
shall be final and binding on all parties. The Purchaser reserves the absolute
right to reject any or all tenders determined by it not to be in proper form or
the acceptance of or payment for which may, in the opinion of the Purchaser's
counsel, be unlawful. The Purchaser also reserves the absolute right to waive
any of the conditions of the Offer or any defect or irregularity in any tender
of Shares of any particular stockholder whether or not similar defects or
irregularities are waived in the case of other stockholders.
The Purchaser's interpretation of the terms and conditions of the Offer
(including the Letter of Transmittal and the instructions thereto) will be final
and binding. No tender of Shares will be deemed to have been validly made until
all defects and irregularities have been cured or waived. None of the Purchaser,
Crane, any of their affiliates or assigns, if any, the Depositary, the
Information Agent or any other person will be under any duty to give any
notification of any defects or irregularities in tenders, nor shall they incur
any liability for failure to give such notification.
The Purchaser's acceptance for payment of Shares tendered pursuant to any of
the procedures described above will constitute a binding agreement between the
tendering stockholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
4. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section 4,
tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered
pursuant to the Offer may be withdrawn at any time on or prior to the Expiration
Date and, unless theretofore accepted for payment as provided herein, may also
be withdrawn at any time after April 18, 1994 (or such later date as may apply
in case the Offer is extended).
9
<PAGE>
If, for any reason whatsoever, acceptance for payment of any Shares tendered
pursuant to the Offer is delayed, or the Purchaser is unable to accept for
payment or pay for Shares tendered pursuant to the Offer, then, without
prejudice to the Purchaser's rights set forth herein, the Depositary may,
nevertheless, on behalf of the Purchaser retain tendered Shares and such Shares
may not be withdrawn except to the extent that the tendering stockholder is
entitled to and duly exercises withdrawal rights as described in this Section 4.
Any such delay will be by an extension of the Offer to the extent required by
law.
In order for a withdrawal to be effective, a written or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
such notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn, and (if Share
Certificates have been tendered) the name of the registered holder of the Shares
as set forth in the Share Certificate, if different from that of the person who
tendered such Shares. If Share Certificates have been delivered or otherwise
identified to the Depositary, then prior to the physical release of such
certificates, the tendering stockholder must submit the serial numbers shown on
the particular certificates evidencing the Shares to be withdrawn and the
signature on the notice of withdrawal must be guaranteed by an Eligible
Institution, except in the case of Shares tendered for the account of the
Eligible Institution. If Shares have been tendered pursuant to the procedures
for book-entry transfer set forth in Section 3, the notice of withdrawal must
specifiy the name and number of the account at the appropriate Book-Entry
Transfer Facility to be credited with the withdrawn shares, in which case a
notice of withdrawal will be effective if delivered to the Depositary by any
method of delivery described in the first sentence of this paragraph.
Withdrawals of Shares may not be rescinded. Any shares properly withdrawn will
be deemed not validly tendered for purposes of the Offer, but may be retendered
at any subsequent time prior to the Expiration Date by following any of the
procedures described in Section 3.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination shall be final and binding. None of the
Purchaser, Crane, any of their affiliates or assigns, if any, the Depositary,
the Information Agent or any other person will be under any duty to give any
notification of any defects or irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification.
5. CERTAIN TAX CONSEQUENCES. The summary of tax consequences set forth
below is for general information only and is based on the law as currently in
effect. The tax treatment of each stockholder will depend in part upon such
stockholder's particular situation.
FEDERAL INCOME TAX
The following discussion may not be applicable to certain types of
stockholders, including stockholders who acquired Shares pursuant to the
exercise of employee stock options or otherwise as compensation, individuals who
are not citizens or residents of the United States and foreign corporations, or
entities that are otherwise subject to special tax treatment under the Internal
Revenue Code of 1986, as amended (the "Code"), such as insurance companies,
tax-exempt entities and regulated investment companies. ALL STOCKHOLDERS SHOULD
CONSULT WITH THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES OF THE
OFFER AND THE MERGER TO THEM, INCLUDING THE APPLICABILITY AND EFFECT OF THE
ALTERNATIVE MINIMUM TAX, AND ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX
LAWS.
The receipt of cash pursuant to the Offer or the Merger will be a taxable
transaction for federal income tax purposes under the Code, and may also be a
taxable transaction under applicable state, local or foreign income or other tax
laws. Generally, for federal income tax purposes a tendering stockholder will
recognize gain or loss in an amount equal to the difference between the cash
received and the stockholder's adjusted tax basis in the Shares tendered by the
stockholder and purchased pursuant to the Offer or the Merger, as the case may
be. Gain or loss will be calculated for each block of Shares tendered and
purchased pursuant to the Offer. For federal income tax purposes, such gain or
loss will be a capital gain or loss if the Shares are a capital asset in the
hands of the stockholder, and
10
<PAGE>
any such capital gain or loss will be long term if the stockholder's holding
period is more than one year, or short term if the stockholder's holding period
is one year or less, as of the date of the sale of the Shares or the effective
date of the Merger, as the case may be. Long-term capital gain is currently
subject to a maximum marginal federal income tax rate of 28%. Short-term capital
gain is subject to a maximum marginal federal income tax rate of 39.6%. There
are limitations on the deductibility of capital losses.
REAL ESTATE TRANSFER TAXES
Under certain circumstances, the State of Washington may impose taxes (the
"Transfer Taxes") on the gain or proceeds from the sale of the Shares pursuant
to the Offer or the Merger attributable to real property of the Company or its
subsidiaries in such jurisdiction. If any Transfer Taxes are owing in connection
with the purchase of Shares by the Purchaser pursuant to the Offer, the
Purchaser will file all necessary tax returns and pay such taxes. If any
Transfer Taxes are owing as a result of the Merger, the Purchaser will cause the
Company to file all necessary tax returns and pay any such taxes. By tendering
Shares, a stockholder is authorizing the Surviving Corporation in the Merger, to
complete and file any ncessary tax forms or otherwise take action with respect
to the Transfer Taxes in connection with the Offer. The payment of any Transfer
Taxes by the Company should have no effect on the amount of gain or loss
realized by any stockholder for federal income tax purposes.
6. PRICE RANGE OF THE SHARES; DIVIDENDS. The Company has confirmed to the
Purchasers that the Shares are traded principally in the over-the-counter market
and are quoted through the NASDAQ National Market System. The Shares are quoted
on the NASDAQ National Market System under the symbol "ELDC". The following
table sets forth, for the periods indicated, the reported high and low sale
prices for the Shares as reported on the NASDAQ National Market System, all as
reported in published financial sources.
<TABLE>
<CAPTION>
High Low
--------- ---------
<S> <C> <C> <C>
1991
First Quarter ending June 30, 1991 $ 10 $ 7
Second Quarter ending September 29, 1991 9 7
Third Quarter ending December 29, 1991 7- 3/4 4- 1/2
Fourth Quarter ending March 29, 1992 7 5- 1/4
1992
First Quarter ending June 28, 1992 $ 6- 1/2 $ 4- 1/4
Second Quarter ending September 27, 1992 5- 3/4 4- 1/4
Third Quarter ending December 27, 1992 6- 1/4 4- 3/8
Fourth Quarter ending March 28, 1993 6- 1/2 4- 3/4
1993
First Quarter ending June 27, 1993 $ 6- 1/4 $ 5- 1/4
Second Quarter ending September 26, 1993 6- 3/4 4- 3/4
Third Quarter ending December 26, 1993 6- 3/4 6
Fourth Quarter (through February 16, 1994) 13- 1/8 6
</TABLE>
11
<PAGE>
The Company does not pay regular dividends and there are currently no plans
to commence payments of regular dividends.
On February 10, 1994, the last full day of trading before the issuance of a
joint press release by Crane and the Company announcing the proposed acquisition
of the Company and the per Share purchase price of $13 in cash (see Section 10),
the reported closing price on the NASDAQ National Market System for the Shares
was $10- 1/8 per Share, according to published sources.
On February 16, 1994, the last full day of trading prior to the commencement
of the Offer, the reported closing price on the NASDAQ National Market System
for the Shares was $12- 7/8 per Share, according to published sources.
STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; NASDAQ QUOTATION;
EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS.
EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES
The purchase of Shares pursuant to the Offer will reduce the number of
Shares that might otherwise trade publicly and, depending upon the number of
Shares so purchased, could adversely affect the liquidity and market value of
the remaining Shares held by the public. The purchase of Shares pursuant to the
Offer can also be expected to reduce the number of holders of Shares.
NASDAQ QUOTATION
Depending upon the aggregate market value and the number of Shares not
purchased pursuant to the Offer, the Shares may no longer meet the quantitative
requirements of the NASD for continued inclusion in the NASDAQ National Market
System, which require that an issuer have at least 200,000 publicly held shares,
held by at least 400 stockholders or 300 stockholders of round lots, with a
market value of $1 million and must have net tangible assets of at least $1
million, $2 million or $4 million (depending on profitability levels during the
issuer's four most recent fiscal years) and a minimum bid price per Share of
$1.00 (unless the issuer has a public float of $3 million and $4 million of net
tangible assets). If these standards were not met, quotations might continue to
be published in the Regular NASDAQ System, but (subject to certain exceptions
and other maintenance criteria) if the number of holders of Shares were to fall
below 300, or if the number of publicly held Shares were to fall below 100,000,
or the market value of the publicly held Shares were to fall below $200,000, the
rules of the NASD provide that the Shares would no longer be "qualified" for
NASDAQ reporting and NASDAQ could cease to provide any quotations. Shares held
directly or indirectly by an officer or director of the Company or by any
beneficial owner of more than 10% of the Shares will ordinarily not be
considered as being publicly held for this purpose. In the event the Shares were
no longer eligible for NASDAQ quotation, quotations might still be available
from other sources. The extent of the public market for the Shares and the
availability of such quotations would, however, depend upon the number of
stockholders and/or the aggregate market value of the Shares remaining at such
time, the interest in maintaining a market in the Shares on the part of
securities firms, the possible termination of registration of the Shares under
the Exchange Act as described below, and other factors.
The Purchaser cannot predict whether the reduction in the number of Shares
that might otherwise trade publicly would have an adverse or beneficial effect
on the market price for or marketability of the Shares or whether it would cause
future market prices to be greater or less than the price in the Offer.
EXCHANGE ACT REGISTRATION
The Shares are currently registered under the Exchange Act. The purchase of
the Shares pursuant to the Offer may result in the Shares becoming eligible for
deregistration under the Exchange Act. Registration of the Shares may be
terminated upon application of the Company to the Commission if the Shares are
not listed on a "national securities exchange" and there are fewer than 300
record
12
<PAGE>
holders of Shares. Termination of registration of the Shares under the Exchange
Act would substantially reduce the information required to be furnished by the
Company to its stockholders and the Commission and would make certain provisions
of the Exchange Act, such as the short-swing profit recovery provisions of
Section 16(b) and the requirements of furnishing a proxy statement in connection
with stockholders' meetings pursuant to Section 14(a), no longer applicable to
the Company. If the Shares are no longer registered under the Exchange Act, the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions would no longer be applicable to the Company. Furthermore,
the ability of "affiliates" of the Company and persons holding "restricted
securities" of the Company to dispose of such securities pursuant to Rule 144
promulgated under the Securities Act of 1933, as amended, may be impaired or
eliminated. If, as a result of the purchase of Shares pursuant to the Offer, the
Company is no longer required to maintain registration of the Shares under the
Exchange Act, the Purchaser intends to cause the Company to apply for
termination of such registration. See Section 11.
If registration of the Shares is not terminated prior to the Merger, then
the Shares will be removed from eligibility for NASDAQ quotation and the
registration of the Shares under the Exchange Act will be terminated following
the consummation of the Merger.
MARGIN REGULATIONS
The Shares are presently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board"),
which have the effect, among other things, of allowing brokers to extend credit
on the collateral of such Shares for the purpose of buying, carrying or trading
in securities ("Purpose Loans"). Depending on factors such as the number of
record holders of the Shares and the number and market value of publicly held
Shares, following the purchase of Shares pursuant to the Offer, the Shares might
no longer constitute "margin securities" for purposes of the Federal Reserve
Board's margin regulations and, therefore, could no longer be used as collateral
for Purpose Loans made by brokers. In addition, if registration of the Shares
under the Exchange Act was terminated, the Shares would no longer constitute
"margin securities".
8. CERTAIN INFORMATION CONCERNING THE COMPANY. Except as otherwise set
forth herein, the information concerning the Company contained in this Offer to
Purchase, including financial information, has been furnished by the Company or
has been taken from or based upon publicly available documents and records on
file with the Commission and other public sources. Neither the Purchaser nor the
Information Agent assumes any responsibility for the accuracy or completeness of
the information concerning the Company furnished by the Company or contained in
such documents and records or for any failure by the Company to disclose events
which may have occurred or may affect the significance or accuracy of any such
information but which are unknown to Crane, the Purchaser or the Information
Agent.
The Company is a Washington corporation with its principal executive offices
located at 16700 - 13th Avenue West, P.O. Box 100, Lynnwood, WA 98046-0100. The
following general description of the Company's business has been taken from the
Company's Annual Report on Form 10-K for the fiscal year ended March 28, 1993
(the "1992 10-K").
The Company designs, manufactures and markets custom electronic and
electromechanical products and systems for applications that are technically and
environmentally demanding. The Company's primary market is aerospace, both
commercial and military, and its major customers are airframe manufacturers,
aircraft engine manufacturers and electronic systems manufacturers. Its
operating units provide: sensing systems and power conversion products to
airframe manufacturers; power supplies to electronic systems houses and fuel
flowmeters and diagnostic systems to aircraft engine manufacturers. The Company
has four major product lines: sensing systems that monitor the status of
aircraft landing gear, doors and flight surfaces; low voltage and high voltage
power supplies for avionic and defense electronic systems; monitor and control
devices for aircraft engines, including fuel flowmeters and engine diagnostic
systems; battery chargers, transformer-rectifiers and other devices that
regulated the DC power on aircraft.
13
<PAGE>
The selected financial information of the Company and its consolidated
subsidiaries set forth below has been excerpted and derived from the 1992 10-K,
the Company's Quarterly Report on Form 10-Q for the quarter ended December 26,
1993 (the "Third Quarter 1993 10-Q") and the Company's Quarterly Report on Form
10-Q for the quarter ended December 27, 1992 (the "Third Quarter 1992 10-Q").
More comprehensive financial information is included in such reports (including
management's analysis of results of operations and financial position) and other
documents filed with the Commission. The following financial information is
qualified in its entirety by reference to the 1992 10-K, the Third Quarter 1993
10-Q and the Third Quarter 1992 10-Q and all other such reports and documents
filed with the Commission and all of the financial statements and related notes
contained therein. The 1992 10-K, the Third Quarter 1993 10-Q and the Third
Quarter 1992 10-Q and certain other reports may be examined and copies may be
obtained at the offices of the Commission in the manner set forth below.
ELDEC CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEARS ENDED
-------------------- -------------------------------------
DEC. 26, DEC. 27, MARCH 28, MARCH 29, MARCH 31,
1993 1992 1993 1992 1991
--------- --------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
INCOME
Net Sales................................................. 73,302 81,485 108,415 109,945 122,983
Cost of Sales............................................. 43,300 48,579 63,658 71,781 76,888
Gross Profit.............................................. 30,002 32,906 44,757 38,164 46,095
Selling, General and Administrative Expenses.............. 21,057 19,748 27,780 26,838 28,249
Research and Development.................................. 7,617 10,355 13,056 12,798 12,465
Operating Income (Loss)................................... 1,328 2,803 3,921 (1,472) 5,381
Other (Income) Expense.................................... 1,307 918 1,361 1,941 961
Income (Loss) Before Income Taxes......................... 21 1,885 2,560 (3,413) 4,420
Income Tax Provision (benefit)............................ (536) 558 803 (1,654) 1,356
Income (Loss)............................................. 557 1,327 1,757 (1,759) 3,064
Discontinued Operations Income (Loss)..................... -- -- -- -- (402)
Extraordinary Expense..................................... -- -- -- (105) (211)
Cumulative Effect of Accounting Change.................... -- 673 673 -- --
--------- --------- ----------- -----------
Net income (Loss)................................... 557 2,000 2,430 (1,864) 2,451
</TABLE>
<TABLE>
<CAPTION>
AT AT
-------------------- ------------------------
DEC. 26, DEC. 27, MARCH 28, MARCH 29,
1993 1992 1993 1992
--------- --------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Total Current Assets.................................................. 69,154 66,070 66,217 50,952
Other Non-Current Assets, Net......................................... 2,726 3,001 2,760 2,882
Property, Plant and Equipment......................................... 41,315 43,535 43,258 40,273
Total Current Liabilities............................................. 16,472 18,320 16,312 18,033
Long-Term Debt........................................................ 25,000 25,000 25,000 9,100
Deferred Income Taxes................................................. 4,065 3,127 4,065 3,127
Other Non-Current Liabilities......................................... 1,630 1,340 1,630 1,340
Shareholders' Equity.................................................. 66,028 64,819 65,228 62,507
</TABLE>
CERTAIN PROJECTIONS. The Company does not as a matter of course make public
forecasts as to future sales or earnings. However, in connection with the
Company's discussions with Crane concerning the Offer and the Merger,
projections of financial performance of the Company from 1994 through 1999
14
<PAGE>
were provided to Crane as part of an information memorandum dated December 1993,
delivered on behalf of the Company by Morgan Stanley, financial advisor to the
Company. A summary of these projections is set forth below. The projections do
not give effect to the Offer or the Merger.
The projections reflect a five-year plan for the years ending in March and
were prepared in connection with the Company's anticipated sale.
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
--------- --------- ----------- ----------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net Sales............................. $ 99,987 $ 98,442 $ 113,766 $ 126,647 $ 143,506 $ 152,590
Operating Income...................... 4,348 9,911 8,167 19,819 23,350 25,204
Net Income............................ 2,209 5,355 4,203 12,041 14,520 15,892
</TABLE>
The Company has informed Crane that in preparing the foregoing projections,
the following general assumptions, among others, were used: (i) a general
decline in military and commercial sales levels over the next four years with a
projected recovery in 1998 or 1999, (ii) the Company's Aircraft Systems Division
is expected to out-perform the market for new aircraft due to increased platform
content on recently won new programs, (iii) a general decline in the power
supply market and a corresponding decline in the Company's Power Conversion
Division through 1995, improving in 1996 and beyond due to product and market
development efforts and targeted new market segments, (iv) noise reduction
requirements will present opportunities for engine modifications or new engine
retrofits on existing aircraft which is expected to increase the demand for the
Company's mass flowmeters and the Company's Monitor and Control Division plans
to expand its engine sensor and instrumentation business with new product
introductions, (v) a reduction in marketing expenses through 1995 due to reduced
proposal activity and continued reductions in headcount and an increase
thereafter growing at the same rate as the growth in sales, (vi) a slight
reduction in general and administrative expenses through 1995 and growth
thereafter at a rate slightly below the rate of sales growth due to continuing
efforts to constrain such expenses and improved productivity and (vii) beginning
in 1995, capital expenditures at a constant percentage of revenue representing a
reduction from recent years due to required test equipment purchases associated
with certain new programs.
BECAUSE THE ESTIMATES AND ASSUMPTIONS UNDERLYING THE ABOVE PROJECTIONS ARE
INHERENTLY SUBJECT TO SIGNIFICANT ECONOMIC AND COMPETITIVE UNCERTAINTIES BEYOND
THE COMPANY'S CONTROL, THERE CAN BE NO ASSURANCE THAT THE PROJECTED RESULTS CAN
BE REALIZED, OR THAT ACTUAL RESULTS WOULD NOT BE MATERIALLY HIGHER OR LOWER THAN
THOSE PROJECTED. NEITHER THE COMPANY NOR CRANE OR THE PURCHASER ASSUME ANY
RESPONSIBILITY FOR THE ACCURACY OF SUCH INFORMATION. MOREOVER, THE PROJECTIONS
WERE NOT PREPARED WITH A VIEW TO PUBLIC DISCLOSURE OR COMPLYING WITH PUBLISHED
GUIDELINES OF THE COMMISSION OR THE GUIDELINES ESTABLISHED BY THE AMERICAN
INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS. THE PROJECTIONS ARE INCLUDED IN THIS
OFFER TO PURCHASE ONLY BECAUSE SUCH INFORMATION WAS PROVIDED TO CRANE. CRANE AND
PURCHASER DID NOT RELY ON THE FOREGOING PROJECTIONS AND RELATED ASSUMPTIONS IN
CONNECTION WITH THIS OFFER TO PURCHASE.
The Company is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is required to file periodic reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Certain information, as of
particular dates, concerning the Company's directors and officers (including
their remuneration and the stock options granted to them), the principal holders
of the Company's securities, any material interests of such persons in
transactions with the Company and other matters is required to be disclosed in
proxy statements and annual reports distributed to the Company's stockholders
and filed with the Commission. Such reports, proxy statements and other
information may be inspected and copied at the Commission's public reference
facilities at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and should also be available for inspection at the following
regional offices of the Commission: 7 World Trade Center, New York, New York
10048; and 500 West Madison Street, Chicago, Illinois 60621; and copies may be
obtained by mail at prescribed rates, from the principal office of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
15
<PAGE>
9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND CRANE.
THE PURCHASER
The Purchaser, a Washington corporation, was incorporated on February 10,
1994 for the purpose of acquiring the Company, and has engaged in no activities
to date, other than those incidental to its organization and making the Offer.
The Purchaser is a wholly owned subsidiary of Crane. The principal office of the
Purchaser is 100 First Stamford Place, Stamford, CT 06902. Since the Purchaser
is newly formed and has minimal assets and capitalization, no meaningful
financial information with respect to the Purchaser is available.
CRANE
Crane is a Delaware corporation with its principal executive offices located
at 100 First Stamford Place, Stamford, CT 06902.
Crane is a diversified manufacturer of engineered industrial products,
serving niche markets in aerospace, fluid handling, automatic merchandising and
the construction industry. Crane's wholesale distribution business serves the
building products markets and industrial customers. Founded in 1855, Crane
employs over 8,500 people in North America, Europe and Australia. Crane's
strategy is to maintain a balanced business mix, to focus on niche businesses
with high market share and to avoid capital-intensive and cyclical businesses.
The name, business address, citizenship, present principal occupation and
employment history of each of the directors and executive officers of the
Purchaser and Crane are set forth in Schedule I to this Offer to Purchase.
Crane is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is required to file periodic reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Certain information, as of
particular dates, concerning Crane's business, principal physical properties,
capital structure, material pending legal proceedings, operating results,
financial condition, directors and officers (including their remuneration and
stock options granted to them), the principal holders of Crane's securities, any
material interests of such persons in transactions with Crane and other matters
is required to be disclosed in proxy statements and annual reports distributed
to Crane's stockholders and filed with the Commission. Such reports, proxy
statements and other information may be inspected and copied at the Commission's
public reference facilities in the same manner as set forth with respect to the
Company in Section 8. In addition, such information is also available for
inspection at the NYSE, 20 Broad Street, New York, New York 10005.
Set forth below is a summary of certain consolidated financial information
with respect to Crane and its subsidiaries for its fiscal years ended and as of
December 31, 1992, 1991 and 1990, excerpted from financial statements presented
in Crane's Annual Report on Form 10-K for the fiscal year ended December 31,
1992 filed with the Commission and for the nine months ended and as of September
30, 1993 and 1992, excerpted from financial statements presented in Crane's
Quarterly Reports on Form 10-Q for the fiscal quarters ended September 30, 1993
and September 30, 1992 filed with the Commission. More comprehensive financial
information is included in such reports (including management's analysis of
results of operations and financial position) and other documents filed by Crane
with the Commission, and the financial information summary set forth below is
qualified in its entirety by reference to such reports, which are incorporated
herein by reference, and all the financial information and related notes
contained therein.
16
<PAGE>
CRANE CO.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
---------------------- ---------------------------------------
1993 1992 1992 1991 1990
-------- ------------ -------------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT INFORMATION:
Net Sales.......................... $987,930 $990,953 $1,306,977 $1,302,532 $1,438,248
Operating Costs and Expenses....... 921,466 970,254 1,261,733 1,223,630 1,324,937
-------- ------------ -------------- ---------- ----------
Operating Profit................... 66,464 20,699(a) 45,244(a) 78,902 113,311
Other Income (Deductions).......... (3,852) (4,290) (6,555) (6,497) (10,823)
-------- ------------ -------------- ---------- ----------
Income Before Taxes................ 62,612 16,409 38,689 72,405 102,488
Provision for Income Taxes......... 23,358 6,368 14,403 27,412 39,753
-------- ------------ -------------- ---------- ----------
Cumulative Effect of a Change in
accounting for postretirement
benefits.......................... -- -- -- (22,341) --
-------- ------------ -------------- ---------- ----------
Net Income......................... $ 39,254 $ 10,041(a) $ 24,286(a) $ 22,652 $ 62,735
-------- ------------ -------------- ---------- ----------
-------- ------------ -------------- ---------- ----------
Net Income Per Share............... $ 1.30 $ .32(a) $ .79(a) $ .72 $ 1.96
Dividends Per Share................ $ .5625 $ .5625 $ .75 $ .75 $ .75
<FN>
- ------------------------
(a) Includes a special charge of $39,444 ($24,400 after tax) or $.78 per
share.
</TABLE>
<TABLE>
<CAPTION>
AT SEPTEMBER 30, AT DECEMBER 31,
------------------------ ------------------------
1993 1992 1992 1991
----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
BALANCE SHEET INFORMATION:
Total Current Assets.......................................... $ 404,062 $ 430,228 $ 378,653 $ 377,360
Property, Plant and Equipment................................. 168,235 166,559 163,185 176,904
Other Assets.................................................. 28,280 14,742 26,205 12,902
Cost in excess of net assets acquired......................... 60,899 61,662 62,168 63,071
Total Current Liabilities..................................... 191,880 199,204 174,023 169,900
Long Term Debt................................................ 105,492 111,564 111,048 83,847
Deferred Income Taxes......................................... 6,097 11,518 3,673 19,186
Reserves and Other Liabilities................................ 19,701 20,553 23,008 9,554
Accrued Postretirement Benefits............................... 40,214 39,891 39,398 38,371
Accrued Pension Liability..................................... 7,701 8,889 7,709 8,901
Total Common Shareholders' Equity............................. 290,391 281,572 271,352 300,478
</TABLE>
On January 24, 1994, Crane issued a press release which provides in
pertinent part:
"Crane Co. today reported net income for the fourth quarter ended December
31, 1993 of $9.6 million, or 32 cents per share. This compares to last year's
fourth quarter results of $14.2 million or 47 cents per share. Fourth quarter
earnings were lower than last year due to an unfavorable jury award at National
Vendors, a higher LIFO charge at Huttig Sash & Door and a higher tax rate.
17
<PAGE>
For the year ended December 31,1993, earnings were up 3 percent to $1.62 per
share. Earnings per share in 1992 were $1.57 before a special charge of 78
cents.
Two acquisitions were completed during the quarter: Filon in mid-October and
Burks Pumps, Inc. just before year-end. Filon has been integrated with Kemlite's
fiberglass panel business with the benefits already evident in fourth quarter
results. The Burk Pumps acquisition will substantially increase Crane's
participation in niche engineered pump markets.
CRANE CO. AND SUBSIDIARIES NET SALES AND NET INCOME
<TABLE>
<CAPTION>
FOR THE PERIODS ENDED DEC. 31,
------------------------------------------------------
THREE MONTHS TWELVE MONTHS
------------------------ ----------------------------
1993 1992 1993 1992
----------- ----------- ------------- -------------
(000'S OMITTED)
<S> <C> <C> <C> <C>
Net Sales................................................ $ 322,275 $ 316,024 $ 1,310,205 $ 1,306,977
Depreciation and Amortization............................ 7,669 6,869 29,420 28,530
Special Charge........................................... (39,444)
----------- ----------- ------------- -------------
Operating Profit......................................... 19,392 24,545 85,856 45,244
Income Before Taxes...................................... 17,206 22,280 79,818 38,689
Provision for Income Taxes............................... 7,567 8,035 30,925 14,403
----------- ----------- ------------- -------------
Net Income......................................... $ 9,639 $ 14,245 $ 48,893 $ 24,286
----------- ----------- ------------- -------------
----------- ----------- ------------- -------------
Primary Net Income Per Share............................. $ .32 $ .47 $ 1.62 $ .79(a)
Average Shares Outstanding............................... 30,184 30,553 30,217 30,845
<FN>
- ------------------------
(a) Includes after-tax effect of special charge of $(.78) per share.
</TABLE>
Sales for the fourth quarter were $322 million, 2 percent above the $316
million for the same period in 1992. Fourth quarter operating profit totalled
$19.4 million, 21 percent below the 1992 level of $24.5 million. Sales for the
full year were $1.3 billion, slightly above last year's results. Operating
profit for the year ended December 31, 1993 of $85.9 million, increased 1
percent compared to 1992 earnings of $84.7 million, excluding the $39.4 million
special charge."
- - -
Except as set forth elsewhere in this Offer to Purchase: (i) neither the
Purchaser nor Crane nor, to the knowledge of the Purchaser and Crane, any of the
persons listed in Schedule I hereto or any associate or majority-owned
subsidiary or any pension, profit-sharing or similar plan of the Purchaser,
Crane or any of the persons so listed, beneficially owns or has a right to
acquire any Shares or any other equity securities of the Company; (ii) neither
the Purchaser nor Crane nor, to the knowledge of the Purchaser and Crane, any of
the persons or entities referred to in clause (i) above or any of their
executive officers, directors or subsidiaries has effected any transaction in
the Shares or any other equity securities of the Company during the past 60
days; (iii) neither the Purchaser nor Crane nor, to the knowledge of the
Purchaser or Crane, any of the persons listed in Schedule I hereto has any
contract, arrangement, understanding or relationship with any other person with
respect to any securities of the Company, including, but not limited to, the
transfer or voting thereof, joint ventures, loan or option arrangements, puts or
calls, guarantees of loans, guarantees against loss or the giving or withholding
of proxies, consents or authorizations; (iv) since January 1, 1991, there have
been no transactions which would require reporting under the rules and
regulations of the Commission between the Purchaser, Crane or any of their
respective subsidiaries or, to the knowledge of the Purchaser and Crane, any of
the persons listed in Schedule I hereto, on the one hand, and the Company, any
of its affiliates which are corporations or any of its executive officers,
directors or affiliates, on the other had; and (v) since January 1, 1991, there
have been no contacts, negotiations or transactions between the Purchaser, Crane
or any of their respective subsidiaries or, to the knowledge of the Purchaser
and Crane, any of the persons listed in Schedule I hereto, on the one hand, and
the
18
<PAGE>
Company or its subsidiaries or affiliates, on the other hand, concerning a
merger, consolidation or acquisition, tender offer or other acquisition of
securities, an election of directors or a sale or other transfer of a material
amount of assets of the Company.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY; THE MERGER
AGREEMENT; THE STOCK PURCHASE AGREEMENT; THE CONFIDENTIALITY AGREEMENT;
STATUTORY REQUIREMENTS.
BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY
In May, 1993, Crane, as part of an effort to expand its activities in the
aerospace industry, retained Roger D. Williams & Co., a financial advisor, to
help identify potential acquisition candidates. Crane determined that the
Company would fit well with Crane's existing business strategies, and a letter
dated June 7, 1993, from Roger D. Williams to Thomas K. Brown, President and
Chief Executive Officer of the Company, expressed the possibility of a potential
business combination with respect to the Company. As a result of several
subsequent contacts by Mr. Williams, on July 6, 1993, Mr. Williams and a Crane
executive toured the Company's facilities and met with Mr. Brown and other
representatives of the Company in Lynnwood and Bothell, Washington to obtain
specific information concerning the Company's financial affairs and other
matters.
Further discussions between Mr. Williams and Mr. Brown were held in
late-July and early-August and, at the request of the Company, on August 18,
1993 Crane made a preliminary, non-binding proposal which contemplated the
purchase of all of the outstanding common stock of the Company for a cash
purchase price of $12.50 per share. No further significant contacts between
Crane and the Company occurred until mid-December when Crane was provided with
an information memorandum concerning the Company by Morgan Stanley.
On January 5, 1994, following review of the information memorandum, Crane
again proposed to purchase, through a cash tender offer at $12.50 per share, the
common stock of the Company. Meetings and other conversations between
representatives of the Company and Crane were held from mid to late-January,
including a management presentation by the Company.
In response to these discussions, on January 31, 1994, Crane submitted a
proposal to the Company, pursuant to which Crane would acquire all shares of
common stock of the Company at $13.00 per share. On February 6, 1994, the
parties' senior managements and financial and legal advisers commenced meeting
to negotiate a definitive agreement for the merger of the Company and a
subsidiary of Crane, to be preceded by a cash tender offer for the Shares. These
meetings continued through February 11, 1994. On that date, the Merger Agreement
was approved by the Company's and Crane's respective boards of directors and was
executed on behalf of each of the parties and the transaction was publicly
announced.
THE MERGER AGREEMENT
The following is a summary of the Merger Agreement, a copy of which is filed
as an Exhibit to the Tender Offer Statement on Schedule 14D-1 (the "Schedule
14D-1") filed by the Purchaser and Crane with the Commission in connection with
the Offer. Such summary is qualified in its entirety by reference to the Merger
Agreement.
THE OFFER
The Merger Agreement provides for the commencement of the Offer as promptly
as reasonably practicable, but in no event later than five business days after
the initial public announcement of Purchaser's intention to commence the Offer.
The obligation of Purchaser to accept for payment and pay for Shares tendered
pursuant to the Offer is subject only to satisfaction of the conditions
described in Section 14 hereof. No change in the Offer may be made which
decreases the Offer Price or the number of Shares tendered for in the Offer, or
which changes in the form of consideration or imposes conditions to the Offer in
addition to those described in Section 14 hereto.
19
<PAGE>
COMPANY ACTION
The Company has approved and consented to the Offer and the Board of
Directors of the Company has (i) determined that the Offer and the Merger, taken
together, are fair to and in the best interest of the Company's stockholders;
(ii) recommended that the stockholders of the Company accept the Offer and vote
in favor of the Merger; (iii) taken all necessary steps to render inapplicable
to the Merger the Washington Moratorium Statute, which prohibits certain
"significant business transactions" with a greater-than-ten percent stockholder;
and (iv) taken all necessary steps so that the Offer, the Merger or the
transactions contemplated by the Merger Agreement, to the extent permitted by
law, not be subject to any state takeover law.
THE MERGER
At the Effective Time (as defined in the Merger Agreement), the Purchaser
will be merged into the Company in accordance with the applicable provisions of
the WBCA. At the Effective Time, (i) each Share then owned by Crane or Purchaser
and each Share then held in the treasury of the Company will be canceled; (ii)
each then remaining outstanding Share (other than Dissenting Shares, as
hereinafter defined) will be converted into the right to receive the Merger
Consideration in cash, without interest; (iii) all then outstanding shares of
common stock of Purchaser will be converted into one fully paid and
non-assessable share of common stock of the Company or the Surviving
Corporation; and (iv) all outstanding Shares held by stockholders who shall have
properly exercised appraisal rights, if any, with respect thereto under the
applicable provisions of the WBCA ("Dissenting Shares") will not be converted
into the right to receive the Merger Consideration pursuant to the Merger, but
will be entitled to receive payment of the appraised value of such Shares in
accordance with the provisions of the WBCA. In addition, (i) the Articles of
Incorporation of Purchaser, as in effect immediately prior to the Effective
Time, will be the Articles of Incorporation of the Surviving Corporation; (ii)
the by-laws of Purchaser, as in effect immediately prior to the Effective Time,
will be the by-laws of the Surviving Corporation; and (iii) the directors and
officers of Purchaser immediately prior to the Effective Time will be the
directors and officers of the Surviving Corporation.
VOTE REQUIRED TO APPROVE MERGER
The WBCA requires, among other things, that the adoption of any plan of
merger or consolidation of the Company must be approved by the Company's Board
of Directors and by the vote of the holders of two-thirds of the outstanding
Shares entitled to vote thereon. The Company's Board of Directors has
unanimously approved the Offer and the Merger and the only further action of the
Company required to approve the Merger will be the approval by such vote of
shareholders. The unanimous approval of the Merger Agreement by the Company's
Board of Directors has rendered inapplicable Section 23B.17.020 of the WBCA,
which would otherwise have prevented the Shares held by the Purchaser (as an
interested stockholder) from being counted towards the two-thirds majority. The
Purchaser has agreed to vote all outstanding Shares beneficially owned by it in
favor of adoption of the Merger.
CONDITIONS OF THE MERGER
The Merger Agreement provides that the obligations of the Company, Crane and
the Purchaser to consummate the Merger are subject to the satisfaction of the
following conditions: (1) the Plan of Merger shall have been approved by the
stockholders of the Company (to the extent the approval of such stockholders is
required) in accordance with the WBCA; (2) no provision of any applicable law or
regulation and no judgment, injunction, order or decree shall restrict, prevent
or prohibit the consummation of the Merger; (3) each of the Company, Crane and
the Purchaser shall have performed and complied with, in all material respects,
each agreement, covenant and obligation of such party required by the Merger
Agreement; and (4) the Purchaser shall have purchased shares validly tendered
pursuant to the Offer.
TERMINATION OF THE MERGER AGREEMENT
The Merger Agreement may be terminated and the Merger may be abandoned at
any time before the Effective Time (notwithstanding any approval of the Merger
by the stockholders):
20
<PAGE>
(1) by mutual written agreement of the Company, Crane and the Purchaser,
provided that the Company cannot so agree at a time when Crane, its subsidiaries
or affiliates are in control of the Board of Directors of the Company,
(2) by either the Company or Crane upon notification to the non-terminating
party by the terminating party:
(a) if the Company shall submit the Plan of Merger to the Company's
stockholders and the requisite vote of the Company's stockholders shall not
have been obtained; or
(b) if any court of competent jurisdiction or other competent
governmental authority shall have issued a judgment, decree, order or writ
making illegal or otherwise restricting, preventing or prohibiting the
Merger and such judgment, decree, order or writ shall have become final and
nonappealable.
(3) By the Company:
(a) Upon two days' prior written notice to Crane if the Purchaser (or
any of its subsidiaries or affiliates) shall not have paid for the Shares
pursuant to the Offer within 45 days after the commencement of the Offer;
PROVIDED, HOWEVER, that the Company shall not be permitted to terminate this
Agreement pursuant to this clause (a) if such failure to pay for the Shares
shall have been caused by or resulted from an event described in clause (2)
(b) above and such event shall not have become final and nonappealable, in
which event the Company may terminate the Merger Agreement only if the
Purchaser shall have failed to purchase Shares pursuant to the Offer within
ten (10) business days after the elimination of such judgment, decree, order
or writ, but in any event within sixty (60) days following issuance of such
judgment, decree, order or writ; or
(b) if the Offer shall have expired or been terminated in accordance
with its terms without any of the Shares having been purchased thereunder
and the Purchaser shall have failed to purchase within ten (10) days thereof
the Shares purchasable by the Purchaser under the Stock Purchase Agreement;
or
(c) upon two days' prior written notice to Crane if the Effective Time
shall not have occurred on or before November 30, 1994 due to a failure of
any of the conditions set forth in the Merger Agreement; or
(d) if, prior to the purchase of Shares pursuant to the Offer,
(i) the Board of Directors of the Company shall have withdrawn or
modified in a manner adverse to Crane or the Purchaser its approval or
recommendation of the Offer, the Merger Agreement or the Merger in order
to permit the Company to execute a definitive agreement providing for the
acquisition of the Company or in order to approve another tender offer
for the Shares, in either case, as determined by the Board of Directors
of the Company in good faith, after consultation with its legal and
financial advisers, to be financially more favorable to the Company's
stockholders than the Offer, or
(ii) the Board of Directors of the Company shall have recommended
such other acquisition or offer,
provided that, in the case of either (i) or (ii), the Purchaser shall have
failed to purchase within ten days thereafter the Shares purchasable by the
Purchaser under the Stock Purchase Agreement,
(4) by Crane and the Purchaser upon two days' prior written notice to the
Company:
(a) if, due to an occurrence which would result in a failure to satisfy
any of the conditions set forth in Section 14 hereof, the Purchaser (or any
of its subsidiaries or affiliates) shall have terminated the Offer (or
permitted it to expire) without the purchase of the Shares thereunder) or
21
<PAGE>
(b) if the Effective Time shall not have occurred on or before November
30, 1994 due to a failure of any of the conditions to the obligations of the
Crane and the Purchaser set forth in the Merger Agreement; or
(c) if the Company shall have withdrawn or modified in any manner
adverse to the Purchaser its approval or recommendation of the Offer, the
Merger Agreement or the Merger, provided that if the Purchaser shall
purchase within ten days thereafter the Shares purchasable by the Purcahser
under the Stock Purchase Agreement, and thereby owns at least a majority of
the Shares, the Purchaser shall use its best efforts to consummate a Merger
as contemplated by the Merger Agreement; or
(d) if the Company deliberately fails to perform any covenant or
agreement under the Merger Agreement and such failure has resulted in, or is
reasonably expected to result in, a Material Adverse Effect (as defined
below); or
(e) if the Purchaser shall have failed to pay for Shares pursuant to the
Offer because of the occurrence of an event described in clause (2)(b) above
and such event shall not have become final and nonappealable, in which event
Crane and the Purchaser may terminate the Merger Agreement only if the
Purchaser shall not be permitted to purchase Shares pursuant to the Offer
within sixty (60) days following such event.
As used herein, "Material Adverse Effect" shall mean a material adverse
effect on (i) the business, assets, liabilities, results of operations,
condition (financial or otherwise) or prospects of the Company and its
subsidiaries taken as a whole, (ii) the ability of the Company to perform its
obligations under, and to consummate the transactions contemplated by, the
Merger Agreement, the Plan of Merger or any other agreement or instrument
contemplated thereby or to be entered into in connection herewith or therewith.
Notwithstanding the foregoing, a "Material Adverse Effect" shall not include any
material adverse effect caused by (i) any change in general economic conditions
or financial markets, (ii) any change in economic conditions in the industries
in which the Company operates or (iii) any change resulting from the
announcement of the Offer or the Merger.
NO SOLICITATIONS
The Company has agreed that it and its subsidiaries will not, directly and
indirectly, through any officer, director, agent or otherwise, (i) initiate,
solicit or encourage the submission of proposals or offers from any Person (a
"Potential Acquiror") relating to any Acquisition Transaction (as defined
below), or (ii) participate in any negotiations regarding, or furnish to any
Potential Acquiror any information with respect to any of the foregoing, or
(iii) otherwise cooperate in any way with, or assist or participate in,
facilitate or encourage any effort or attempt by any Potential Acquiror to seek
to do any of the foregoing. The company shall promptly notify Crane of any
proposal, expression of interest or offer relating to an Acquisition
Transaction, including the terms and conditions thereof and of any amendments or
revisions thereto and the identity of the Potential Acquiror. The Company shall
not terminate, make any changes in, or waive any rights under any contract to
which it is a party, to the extent such contract governs (i) the conduct of
another party with respect to purchases of Shares or the making of proposals for
a business combination with the Company, or (ii) the right of another party to
make use of information relating to the Company which is not publicly available.
The Company shall use its best efforts to enforce the terms of any such
contract. The Company has agreed to immediately cease and cause to be terminated
any existing activities, discussions or negotiations with any parties conducted
heretofore with any respect to any Acquisition Transaction. Notwithstanding the
foregoing, the Company is not prohibited from (i) taking any actions or
permitting any events described above, if, and to the extent that, the Board of
Directors shall conclude in good faith on advice of independent counsel that
such action should be taken in order for the Board of Directors of the Company
to act in a manner which is consistent with its fiduciary obligations under
applicable law or (ii) taking any position necessary in order to comply with the
filing and disclosure requirements of Rules 14d-9 and 14e-2(a) promulgated under
the Exchange Act. The Board of Directors of the Company has agreed to provide to
Crane reasonable notice of any action contemplated by the next
22
<PAGE>
preceding sentence and shall continue to consult with Crane after taking such
action. For the purposes hereof, "Acquisition Transaction" means any merger,
consolidation or other business combination involving the Company or any of its
subsidiaries, or any acquisition in any manner of all or a substantial portion
of the equity of, or all or a substantial portion of the assets of, the Company
and its subsidiaries taken as a whole, whether for cash, securities or any other
consideration or combination thereof other than pursuant to the transactions
contemplated by the Merger Agreement.
OPERATION OF THE COMPANY'S BUSINESS UNTIL THE EFFECTIVE TIME
The Merger Agreement provides that from the date thereof until the Effective
Time the Company will use its best efforts to preserve substantially intact the
business organization and reputation of the Company and its subsidiaries, to
maintain the assets and properties of the Company and its subsidiaries in good
working order and condition, ordinary wear and tear excepted, to maintain
insurance with respect to assets and businesses of the Company and its
subsidiaries in such amounts and against such risks and losses as are currently
in effect, and to preserve the present relationships of the Company and its
subsidiaries with persons having significant business relations therewith, and
use reasonable efforts to keep available the services of the present officers
and employees of the Company and its subsidiaries.
The Merger Agreement further provides that the Company and its subsidiaries
shall conduct their respective businesses only in the ordinary course consistent
with past practice. Without limiting the generality of the foregoing, the
Company has agreed that neither it nor any of its subsidiaries will, without the
prior written consent of Crane: (i) issue or sell or commit to issue or sell any
capital stock of or other ownership interest in the Company or any of its
subsidiaries other than pursuant to exercise of outstanding stock options in
accordance with their terms; (ii) grant or commit to grant any options,
warrants, convertible securities or other rights to subscribe for, purchase or
otherwise acquire any shares of capital stock of or other ownership interest in
the Company or any of its subsidiaries; (iii) declare, set aside or pay any
dividend or distribution with respect to the capital stock of the Company or any
of its subsidiaries not wholly owned; (iv) directly or indirectly redeem,
purchase or otherwise acquire or commit to acquire any capital stock of the
Company or any Option with respect thereto; (v) split, combine, reclassify or
take similar action with respect to any of its capital stock or issue or
authorize or propose the issuance of any other securities in respect of, in in
leiu of or in substitution for shares of its capital stock; (vi) adopt a plan of
complete or partial liquidation or resolutions providing for or authorizing such
liquidation or a dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization; (vii) amend or propose to amend the
Articles of Incorporation, By-laws or other governing instruments of the Company
or any of its subsidiaries; (viii) except in the ordinary course of its business
consistent with past practice, enter into, amend or terminate any employment,
management or consulting agreement, or any collective bargaining agreement, with
any Person; (ix) (A) incur any indebtedness other than in the ordinary course of
its business consistent with past practice, or (B) voluntarily purchase, cancel,
prepay or otherwise provide for a complete or partial discharge in advance of a
scheduled repayment date with respect to, or waive any right under, any
indebtedness other than in the ordinary course of its business consistent with
past practice; (x) acquire (by merging or consolidating with, or by purchasing a
substantial equity interest in or a substantial portion of the assets of, or by
any other manner) any business or any corporation, partnership, association or
other business organization or division thereof or otherwise acquire or enter
into any agreement relating to such an acquisition; (xi) except to the extent
required by applicable law, (A) make or permit to be made any material change in
(i) any pricing, marketing, purchasing, investment, accounting, financial
reporting, inventory, credit, allowance or tax practice or policy or (ii) any
method of calculating any bad debt, contingency or other reserve for accounting,
financial reporting or tax purposes or (B) make any material tax election or
settle or compromise any material income tax liability with any Governmental or
Regulatory Authority; (xii) other than sales of products and inventory in the
ordinary course of its business consistent with past practice, sell, lease,
license, grant any security interest in or otherwise dispose of or encumber any
of its assets or properties, including without limitation, any of its
23
<PAGE>
intellectual property; (xiii) make any representation or promise, oral or
written, to any officer, employee or consultant of the Company or any of its
subsidiaries concerning any benefit plan, or concerning benefits to be provided
to such person following the Effective Time, except, in each case, for
statements consistent with the terms of any Company benefit plan (as constituted
on February 11, 1994) and for statements as to the rights or accrued benefits of
any such person under the terms of any Company benefit plan; (xiv) make any
increase in salary, wages or other compensation of (a) any present or former
director, officer or consultant of the Company or any of its subsidiaries or (b)
any employee of the Company or any of its subsidiaries other than in the
ordinary course of its business consistent with past practice; (xv) establish or
modify (A) targets, goals, pools or similar provisions in respect of any fiscal
year under any Company benefit plan, employment-related agreement or other
employee compensation arrangement or (B) salary ranges, increase guidelines or
similar provisions in respect of any Company benefit plan, employment-related
agreement or other employee compensation arrangement; (xvi) adopt, enter into,
amend, modify or terminate (partially or completely) any Company benefit plan
except to the extent required by applicable law or in the ordinary course of its
business consistent with past practice; (xvii) enter into, amend or modify any
contract with any person containing any provision or covenant prohibiting or
limiting the ability of the Company or any subsidiary to engage in any business
or limiting the ability of any person to compete with the Company or any
subsidiary; (xviii) enter into, amend or modify any contract, or engage in any
new transaction outside the ordinary course of business consistent with past
practice or not on an arm's length basis, with any shareholder or affiliate of
the Company or any of its subsidiaries; (xix) enter into, amend in any material
respect, or terminate any contract, except in the ordinary course of its
business consistent with past practice; (xx) make any capital expenditures or
commitments for additions to plant, property or equipment constituting capital
assets which individually exceed $50,000, or in the aggregate exceed $250,000;
(xxi) make any change in the lines of business in which it participates or is
engaged; or (xxii) enter into any contract, agreement, commitment or arrangement
to do or engage in any of the foregoing.
In addition, the Company has agreed to confer on a regular and frequent
basis with Crane, through a liaison designated by Crane and satisfactory to the
chief executive officer of the Company, with respect to its business and
operations and other matters relevant to the Merger, and to promptly advise
Crane, of any change or event having, or, which, insofar as can be reasonably
foreseen, could have, a Material Adverse Effect.
COMPANY BOARD REPRESENTATION
Upon the purchase by Purchaser, pursuant to the Offer or pursuant to
Purchaser's rights under the Stock Purchase Agreement, or otherwise, of at least
a majority of the outstanding Shares, Purchaser is forthwith entitled to
designate at least a majority of the Company's Board of Directors.
EMPLOYEE STOCK OPTIONS
The Merger Agreement provides that immediately prior to the consummation of
the Offer, each holder of then outstanding employee or non-employee director
stock options (whether or not then exercisable) shall receive from the Company
in settlement of each option a cash payment from the Company in an amount equal
to the product of (i) the difference between (1) the Merger Consideration and
(2) the exercise price per share for the purchase of Shares under such option,
and (ii) the number of Shares covered by such option.
INDEMNIFICATION AND INSURANCE
Crane has agreed that it will cause the Surviving Corporation, from and
after the Effective Time, to (except to the extent prohibited by applicable law)
indemnify, defend and hold harmless the present and former directors, officers
and employees of the Company and its subsidiaries in office prior to the
Effective Time with respect to all acts and omissions by such persons on or
prior to the Effective Time to, the fullest extent provided in the Company's
Articles of Incorporation and By-Laws in effect on February 11, 1994 ( and
advance expenses incurred in defense of any action or suit in respect of any
such act or omission as provided therein). Crane has also agreed to, or to cause
the Surviving
24
<PAGE>
Corporation to, maintain directors and officers liability insurance coverage
applicable to the Company's and its subsidiaries' directors and officers
providing substantially the same coverages and limits as the Company directors
and officers liability insurance coverage existing on the date hereof, and keep
such coverage in force until the expiration or six (6) years after the Effective
Time with respect to any error or omission which may be alleged to have occurred
prior to the Effective Time to the extent the same would have been covered by
the present Company directors and officers liability insurance coverage;
PROVIDED, HOWEVER, that such insurance shall be required to be maintained only
to the extent that the annual premium (or the premium on any annualized basis)
does not exceed one hundred and fifty percent (150%) of the annual premium
currently paid by the Company for such insurance. The Company has represented to
Crane that there are no claims currently asserted or, to its knowledge,
threatened which would give rise to such indemnification or potential payment
under such insurance.
REPRESENTATIONS AND WARRANTIES
The Merger Agreement contains various representations and warranties of the
Company all of which terminate on February 18, 1994.
THE STOCK PURCHASE AGREEMENT
Under a Stock Purchase Agreement (the "Stock Purchase Agreement") dated as
of February 11, 1994, among the individual shareholders and trusts described in
Schedule A thereto (the "Selling Stockholders"), Crane and the Purchaser,
Purchaser has agreed to purchase and the Selling Stockholders have agreed to
sell to Purchaser a total of 2,899,872 Shares (the "Subject Shares")
constituting approximately 51% of the Shares outstanding on February 4, 1994,
immediately following the acceptance for purchase and purchase of Shares
pursuant to the Offer, at the Merger Consideration. Also pursuant to the Stock
Purchase Agreement, if the Company's Board of Directors shall publicly withdraw
or modify in a manner adverse to Crane and Purchaser its recommendation of the
Offer, the Merger Agreement or the Merger, or recommend another acquisition
transaction, or shall have resolved to do any of the foregoing, then Purchaser
shall have the right to purchase the Subject Shares at $13 per share.
THE CONFIDENTIALITY AGREEMENT
The Company and Crane entered into a Confidentiality Agreement dated
December 17, 1993 ( the "Confidentiality Agreement") which provides that each
party will maintain the confidentiality of information received from the other
party. In addition, Crane agreed that, for a period of eighteen months from the
date of the Confidentiality Agreement, neither it nor any of its affiliates
would, without the prior written consent of the Company or its Board of
Directors, acquire or offer to acquire any Shares, solicit any proxies to vote
such Shares, or make any public announcement with respect to any extraordinary
transaction involving the Company. The Company has informed Crane that, by
approving the making of the Offer and the Merger Agreement, the Board of
Directors waived the restrictions of the Confidentiality Agreement as and to the
extent necessary to permit the making and the consummation of the Offer and the
execution and performance of the Stock Purchase Agreement.
The foregoing includes a summary of certain provisions of the Merger
Agreement, the Stock Purchase Agreement and the Confidentiality Agreement,
copies of which have been filed as Exhibits to the Schedule 14D-1. The Merger
Agreement should be available for examination and copies should be obtainable in
the manner set forth in Section 8 hereof (except that Schedule 14D-1 will not be
available in the regional offices of the Commission). The description of the
Merger Agreement, the Stock Purchase Agreement and the Confidentiality Agreement
set forth herein do not purport to be complete and are qualified in their
entirety by reference to the Merger Agreement, the Stock Purchase Agreement and
the Confidentiality Agreement.
STATUTORY REQUIREMENTS
STOCKHOLDER VOTE
The Company has advised the Purchaser that, as of February 4, 1994, there
were 5,695,647 Shares outstanding. As of that date, 341,475 Shares were reserved
for issuance pursuant to the
25
<PAGE>
Company's Incentive Stock Option Plans (the "Option Plans") and 250,910 Shares
were reserved for issuance pursuant to the Company's Employee Stock Purchase
Plan (the "Stock Purchase Plan"). The Purchaser has been advised that the
Company will terminate the Stock Purchase Plan prior to consummation of the
Offer. Based on the information supplied by the Company, the Purchaser will need
to purchase (pursuant to the Offer, the Stock Purchase Agreement hereinafter
described, or otherwise) at least 3,797,288 Shares (assuming that no Shares are
issued in addition to those outstanding on February 4, 1994 and assuming
termination of the Stock Purchase Plan prior to consummation of the Offer) or
3,967,570 Shares (on a fully-diluted basis) in order to have sufficient voting
power to approve the Merger without the affirmative vote of any other
stockholder of the Company and 5,126,082 Shares (assuming no Shares are issued
in addition to those outstanding on February 4, 1994 and assuming termination of
the Stock Purchase Plan prior to consummation of the Offer) or 5,351,901 Shares
(on a fully diluted basis) in order to effect the Merger as a "short form"
merger without a meeting or vote of any other stockholder of the Company. The
Merger Agreement provides that immediately prior to the consummation of the
Offer, holders of then outstanding stock options under the Option Plans will
receive cash payments from the Company in settlement of each such option. See
Section 10. This may have the effect of reducing the number of Shares issued
upon exercise of options under the Option Plans.
If the Purchaser acquires at least 90% of the outstanding Shares, the
Purchaser would have the power to consummate the Merger without a meeting or
vote of the other shareholders of the Company pursuant to the "short form"
merger provisions of the WBCA. Under the WBCA as currently in effect, the
Purchaser believes that a "short form" merger would have to be effected in the
form of a merger of the Company into the Purchaser. Any such merger would
require amendment of the Merger Agreement and may require the consent of third
parties under certain of the agreements to which the Company is subject.
Although the Purchaser, Crane and the Company have agreed to consummate the
Merger, there can be no assurance that the Merger will be consummated or as to
the timing of the Merger because the Merger is subject to certain conditions,
some of which are beyond the control of the Purchaser, Crane and the Company.
See "The Merger Agreement -- Conditions to the Merger" in this Section 10. Since
the Purchaser's ultimate objective is to acquire ownership of all of the Shares,
if the Merger does not take place due to the failure to satisfy certain
conditions to the Merger, by agreement of the Purchaser, Crane and the Company,
or otherwise, the Purchaser would consider, and reserves the right to effect,
the acquisition, whether directly or through an affiliate, of Shares through
privately negotiated or open market purchases, or subsequent tender offers or by
any other permissible means deemed advisable by it, including, without
limitation, a reverse stock split, or a different merger or other combination of
the Company with the Purchaser or an affiliate or subsidiary thereof. Any of
these possible transactions might be on terms the same as, or more or less
favorable than, those of the Offer or the Merger.
DISSENTERS' RIGHTS
Holders of Shares do not have appraisal rights as a result of the Offer.
However, if the Merger is ultimately consummated, shareholders who have filed
timely notices of intent to dissent will have certain rights under the WBCA to
dissent to the Merger and receive payment of the fair value of their Shares.
Such rights to dissent, if the statutory procedures are complied with, could
result in a judicial determination of the fair value of the Shares required to
be paid to dissenting shareholders. The fair value of the Shares awarded to
dissenting shareholders would be the fair value as of the time immediately
preceding the consummation of the Merger, and would exclude any appreciation or
depreciation that occurred in anticipation of the Merger. The court would also
allow interest, at a rate that it determines to be fair and equitable, from the
date on which the Merger is consummated.
Crane and the Purchaser cannot make any representations as to the outcome of
any determination of fair value by a court, and holders of Shares should
recognize that such a determination of fair value could result in a price higher
than, lower than, or equal to the price available to shareholders
26
<PAGE>
pursuant to the Merger. Moreover, Crane may argue in such a court proceeding
that, for purposes of such proceeding, the fair value of the Shares is less than
the price available pursuant to the Merger. Under Washington law, the court may
consider a variety of factors in determining fair value. These include the
market price at which the Shares are trading, the net value of the Company's
assets, the anticipated future business prospects of the Company, estimates of
the capitalized value of future earnings and other factors. Washington law
requires that the court consider all relevant facts and curcumstances in
determining the fair value and that it did not give undue emphasis to any one
factor.
The Merger may be found to be subject to additional requirements for the
existence of "fairness." Several recent cases in jurisdictions other than
Washington, which may or may not apply to a merger or other business combination
involving the Company, have held that a controlling shareholder of a company
involved in a merger or other business combination has a fiduciary duty to the
other shareholders. In determining whether the controlling shareholder has
fulfilled such duty to the shareholders, certain courts have considered, among
other things, the type and amount of the consideration to be received by such
other shareholders and whether the other shareholders are accorded appraisal
rights.
THE FOREGOING SUMMARY OF THE RIGHTS OF OBJECTING STOCKHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
STOCKHOLDERS DESIRING TO EXERCISE THEIR DISSENTERS' RIGHTS. THE PRESERVATION AND
EXERCISE OF DISSENTERS' RIGHTS ARE CONDITIONED ON STRICT ADHERENCE TO THE
APPLICABLE PROVISIONS OF THE WBCA.
"GOING PRIVATE" TRANSACTIONS
The Commission has adopted Rule 13e-3 under the Exchange Act which is
applicable to certain "going private" transactions and which may under certain
curcumstances be applicable to the Merger. However, Rule 13e-3 would be
inapplicable if (i) the Shares are deregistered under the Exchange Act prior to
the Merger or other business combination or (ii) the Merger or other business
combination is consummated within one year after the purchase of the Shares
pursuant to the Offer and the amount paid per Share in the Merger or other
business combination is at least equal to the amount paid per Share in the
Offer. If applicable, Rule 13e-3 requires, among other things, that certain
financial information concerning the fairness of the proposed transaction and
the consideration offered to minority stockholders in such transaction be filed
with the Commission and disclosed to stockolders prior to the consummation of
the transaction.
11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY.
PURPOSE OF THE OFFER
The purpose of the Offer is to acquire as many Shares as possible as a first
step in the acquisition by the Purchaser of the entire equity interest in the
Company. The purpose of the Merger is to acquire all Shares not tendered and
purchased pursuant to the Offer, the Stock Purchase Agreement or otherwise. The
Purchaser currently intends, as soon as practicable following completion of the
Offer, to seek to consummate the Merger.
27
<PAGE>
PLANS FOR THE COMPANY
Except as described in this Offer to Purchase, based on their current
knowledge of the Company, Crane and the Purchaser have no present plans or
proposals that would result in (i) an extraordinary corporate transaction, such
as a merger, consolidation, reorganization or liquidation involving the Company
or any of its subsidiaries, (ii) sale or transfer of a material amount of assets
involving the Company or any of its subsidiaries, (iii) any material changes in
the Company's present capitalization or dividend policy of the Company, or (iv)
any other material change in the Company's corporate structure or business.
However, Crane and its affiliates are continuing their review of the Company and
its assets, corporate structure, capitalization, operations, properties,
policies, management and personnel. After the completion of such review, Crane
may propose or develop alternative plans or proposals, including mergers,
transfers of a material amount of assets or other transactions or changes of the
nature described above. Crane and the Purchaser also reserve the right to effect
any change in the Company's operations, properties, policies, management and
personnel as may be deemed necessary as a result of such continuing review
thereof. Crane expects that upon effectiveness of the Merger or shortly
thereafter, the Board of Directors of the Company will be composed exclusively
of representatives of Crane and representatives of Crane will be added to or
replace existing directors of the Company's subsidiaries.
12. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required to
purchase all of the Shares pursuant to the Offer, the Stock Purchase Agreement
and the Merger, to pay the Company's net indebtedness if certain long-term
lenders accept the offer to repay which the Company is required to make upon a
change in control and to pay all fees and expenses in connection with the Offer
and the Merger is expected to approximate $94 million. All sums required for the
foregoing purposes will be provided by Crane to the Purchaser and will be
borrowed by Crane under existing unsecured, short-term lines of credit.
13. DIVIDENDS AND DISTRIBUTIONS. Except as contemplated by the Merger
Agreement (including, without limitation, the making of the Offer) the Company
has agreed that neither it nor any of its subsidiaries will, between the date of
the Merger Agreement and the Effective Time, directly or indirectly do, or
propose or agree to do, any of the following without the prior written consent
of Purchaser:
(i) issue or sell or commit to issue or sell any capital stock of or
other ownership interest in the Company or any of its Subsidiaries other
than pursuant to exercise of outstanding Company Employee Options in
accordance with their terms;
(ii) grant or commit to grant any Options, warrants, convertible
securities or other rights to subscribe for, purchase or otherwise acquire
any shares of capital stock of or other ownership interest in the Company or
any of its Subsidiaries;
(iii) declare, set aside or pay any dividend of distribution with respect
to the capital stock of the Company or any of its Subsidiaries not wholly
owned;
(iv) directly or indirectly redeem, purchase or otherwise acquire or
commit to acquire any capital stock of the Company or any Option with
respect thereto; or
(v) split, combine, reclassify or take similar action with respect to
any of the its capital stock or issue or authorize or propose the issuance
of any other securities in respect of, in lieu of or in substitution for
shares of its capital stock;
If shares are purchased pursuant to the Offer, and, on or after March 17,
1994, the Company should declare or pay any dividend on the Shares or any
distribution (including, without limitation, the issuance of additional Shares
pursuant to a stock dividend or stock split, the issuance of other securities or
the issuance of rights for the purchase of any securities) with respect to the
Shares that is payable or distributable to stockholders of record on a date
prior to the transfer into the name of the Purchaser or its nominees or
transferees on the Company's stock transfer records of the Shares
28
<PAGE>
purchased pursuant to the Offer, then, without prejudice to the Purchaser's
rights under Section 14, (i) the purchase price per Share payable by the
Purchaser pursuant to the Offer shall be reduced by the amount of any such cash
dividend or cash distribution and (ii) any such noncash dividend, distribution,
issuance, proceeds or right to be received by the tendering stockholders shall
(a) be received and held by the tendering stockholders for the account of the
Purchaser and will be required to be promptly remitted and transferred by each
tendering stockholder to the Depositary for the account of the Purchaser,
accompanied by appropriate documentation of transfer, or (b) at the direction of
the Purchaser, be exercised for the benefit of the Purchaser, in which case the
proceeds of such exercise will promptly be remitted to the Purchaser. Pending
such remittance and subject to applicable law, the Purchaser will be entitled to
all rights and privileges as owner of any such noncash dividend, distribution,
issuance, proceeds or right and may withhold the entire purchase price or deduct
from the purchase price the amount of value thereof, as determined by the
Purchaser in its sole discretion.
14. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provisions
of the Offer, and in addition to (and not in limitation of) the Purchaser's
rights to extend and amend the Offer at any time in its sole discretion (subject
to the provisions of the Merger Agreement), the Purchaser shall not be required
to accept for payment or, subject to any applicable rules and regulations of the
SEC, including Rule 14e-1(c) under the Securities Exchange Act (relating the
Purchaser's obligation to pay for or return tendered Shares promptly after
termination or withdrawal of the Offer), pay for, and may delay the acceptance
for payment of or, subject to the restriction referred to above, the payment
for, any tendered Shares, and may terminate the Offer as to any Shares not then
paid for, if (i) Shares representing (together with shares available for
purchase by the Purchaser under the Stock Purchase Agreement) less than 66- 2/3%
of the Shares outstanding on a fully diluted basis shall have been validly
tendered and not properly withdrawn pursuant to the Offer, (ii) any applicable
waiting period under the HSR Act shall not have expired or terminated, or (iii)
at any time on or after February 11, 1994 and before the time of payment for any
such Shares (whether or not any Shares have theretofore been accepted for
payment or paid for pursuant to the Offer), any of the following events shall
have occurred and remain in effect:
(a) there shall have been any action taken, or any Law or Order
promulgated, entered, enforced, enacted, issued or deemed applicable to the
Offer or the Merger by any court of competent jurisdiction or other
competent governmental or regulatory authority which directly or indirectly
(1) prohibits, or imposes any material limitations on, Crane or the
Purchaser's ownership or operation (or that of any of their respective
subsidiaries or affiliates) of all or a material portion of their or the
Company's businesses or assets, or compels Crane or the Purchaser (or their
respective Subsidiaries and affiliates) to dispose of or hold separate any
material portion of the business or assets of the Company or Crane and their
respective subsidiaries, in each case taken as a whole, (2) prohibits or
makes illegal the acceptance for payment, payment for or purchase of Shares
pursuant to the Offer or the consummation of the Offer or the Merger, (3)
results in the delay in or restricts the ability of the Purchaser, or
renders the Purchaser unable, to accept for payment, pay for or purchase
some or all of the Shares tendered pursuant to the Offer, (4) imposes or
confirms material limitations on the ability of the Purchaser or Crane (or
any of their respective Subsidiaries or affiliates) effectively to exercise
full rights of ownership of the Shares purchased pursuant to the Offer,
including, without limitation, the right to vote such Shares on all matters
properly presented to the Company's stockholders, or (5) has or is
reasonably expected to have a Material Adverse Effect;
(b) there shall be instituted or pending any action, proceeding or
counterclaim brought by a governmental or regulatory authority (1)
challenging the acquisition by Crane or the Purchaser of Shares or otherwise
seeking to restrain or prohibit the consummation of the Offer or the Merger
or seeking to obtain any material damages as a result thereof, or (2) that
could reasonably be expected to result, directly or indirectly, in any of
the consequences referred to in clauses (1) through (5) of paragraph (a)
above;
(c) there shall have occurred a change or event subsequent to February
11, 1994 which has had, or is reasonably expected to have a Material Adverse
Effect;
29
<PAGE>
(d) the Company shall not have performed and complied with each
agreement, covenant and obligation required by the Merger Agreement to be
performed or complied with by it except where the failure to perform or
comply has not had or is not reasonably expected to have a Material Adverse
Effect;
(e) the Merger Agreement shall have been terminated in accordance with
its terms;
(f) the Company's Board of Directors shall have publicly (including by
amendment of the Schedule 14D-9) withdrawn or modified in a manner adverse
to Crane and the Purchaser its recommendation of the Offer, the Merger
Agreement or the Merger, or recommended another Acquisition Transaction, or
shall have resolved to do any of the foregoing; or
(g) Crane, the Purchaser and the Company shall have agreed that the
Purchaser shall terminate the Offer or postpone the payment for Shares
thereunder;
which in the good faith judgment of Crane and the Purchaser, in any such case,
and regardless of the circumstances (including any action or inaction by Crane
or the Purchaser giving rise to such condition) makes it inadvisable to proceed
with the Offer or with such acceptance for payment or payment or with the
Merger.
The foregoing conditions are for the sole benefit of Crane and the
Purchaser, may be asserted by Crane and Crane Acquisition Corp. regardless of
the circumstances (including any action or inaction by Crane or the Purchaser)
giving rise to any such condition and, subject to the terms and conditions of
the Merger Agreement, may be waived by Crane and the Purchaser, in whole or in
part at any time and from time to time in the sole discretion of Crane and the
Purchaser. The failure by Crane and the Purchaser at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right and each
such right shall be deemed an ongoing right which may be asserted at any time
and from time to time.
15. CERTAIN LEGAL MATTERS; REQUIRED REGULATORY APPROVALS. Except as set
forth in this Offer to Purchase, based on a review of publicly available
information regarding the Company and the review of certain information
furnished by the Company to the Purchaser and Crane and discussions of
representatives of Purchaser and Crane with representatives of the Company
during Purchaser's and Crane's investigation of the Company (see Section 10),
the Purchaser and Crane are not aware of any licenses or regulatory permits that
would be material to the business of the Company, and its subsidiaries, taken as
a whole, and that might be adversely affected by the Purchaser's acquisition of
Shares (and the indirect acquisition of the stock of the Company's subsidiaries)
as contemplated herein, or any filings, approvals or other actions by or with
any domestic, foreign or supranational governmental authority or administrative
or regulatory agency that would be required prior to the acquisition of Shares
(or the indirect acquisition of the stock of the Company's subsidiaries) by the
Purchaser pursuant to the Offer as contemplated herein. Should any such approval
or other action be required, there can be no assurance that any such additional
approval or action, if needed, would be obtained without substantial conditions
or that adverse consequences might not result to the Company's business, or that
certain parts of the Company's or Crane's business might not have to be disposed
of or held separate or other substantial conditions complied with in order to
obtain such approval or action or in the event that such approvals were not
obtained or such actions were not taken. The Purchaser's obligation to purchase
and pay for Shares is subject to certain conditions, including conditions with
respect to legal matters discussed in this Section 15. See Section 14.
STATE TAKEOVER LAWS. The Company is incorporated under the laws of the
State of Washington. As a Washington corporation, the Company is subject to the
provisions of the WBCA, including those described below.
THE WASHINGTON MORATORIUM STATUTE. The Washington Moratorium Statute
purports to prohibit certain "significant business transactions" of a target
corporation with a greater-than-ten percent shareholder (an "acquiring person")
for a period of five years unless the board of directors of the target
corporation, prior to the acquiring person's stock acquisition, approves the
acquisition by
30
<PAGE>
the acquiring person of more than 10% of the target corporation's voting stock
or approves the significant business transaction itself. The Washington
Moratorium Statute defines a significant business transaction to include a
merger between a target corporation and an acquiring corporation and any
agreement providing therefor.
The Company's Board of Directors has unanimously approved the Merger
Agreement and the transactions contemplated thereby, including the Offer and the
Merger, which approvals constitute approval of all "significant business
transactions" and "purchases of shares" contemplated by the Merger Agreement for
purposes of the Washington Moratorium Statute.
THE WASHINGTON FAIR PRICE STATUTE. The Washington Fair Price Statute
generally requires that certain business combination transactions between a
corporation and a 20% shareholder must be approved by a two-thirds vote of
disinterested shareholders, unless (1) such transaction is approved by a
majority of the corporation's disinterested directors or (2) a majority of the
disinterested directors determines that the fair market value of the
consideration to be received by the disinterested shareholders, for shares of
any class of which shares are owned by any interested shareholder, is not less
than the highest fair market value paid by any interested shareholder in
acquiring shares of the same class within 24 months of the proposed transaction.
The Company's Board of Directors has unanimously approved the Merger
Agreement and the transactions contemplated thereby, including the Offer and the
Merger, rendering the Washington Fair Price Statute inapplicable to the Offer
and the Merger.
The foregoing summaries of the Washington Moratorium Statute and the
Washington Fair Price Statute do not purport to be complete and are qualified in
their entirety by reference to the provisions of such Statutes.
A number of other states have adopted takeover laws and regulations which
purport, to varying degrees, to be applicable to attempts to acquire securities
of corporations which are incorporated in such states or which have substantial
assets, security holders, principal executive offices or principal places of
business therein. To the extent that certain provisions of certain of these
state takeover statutes purport to apply to the Offer, the Purchaser believes
that such laws conflict with federal law and constitute an unconstitutional
burden on interstate commerce. In 1982, the Supreme Court of the United States,
in EDGAR V. MITE CORP., invalidated on constitutional grounds the Illinois
Business Takeovers Statute, which as a matter of state securities law, made
takeovers of corporations meeting certain requirements more difficult, and the
reasoning in such decision is likely to apply to certain other state takeover
statutes. In 1987, however, in CTS CORP. V. DYNAMICS CORP. OF AMERICA, the
Supreme Court of the United States held that the State of Indiana could, as a
matter of corporate law and, in particular, those aspects of corporate law
concerning corporate governance, constitutionally disqualify a potential
acquiror from voting on the affairs of a target corporation without the prior
approval of the remaining stockholders, provided that such laws were applicable
only under certain conditions.
The Company, directly or through subsidiaries, conducts business in a number
of states throughout the United States, some of which have enacted takeover
laws. Purchaser does not know whether any of these laws will, by their terms,
apply to the Offer or the Merger and has not complied with any such laws. Should
any person seek to apply any state takeover law, Purchaser will take such action
as then appears desirable, which may include challenging the validity or
applicability of any such statute in appropriate court proceedings. In the event
it is asserted that one or more state takeover laws is applicable to the Offer
or the Merger, and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer, Purchaser might be required to
file certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, Purchaser might be unable to accept for
payment any Shares tendered pursuant to the Offer, or be delayed in continuing
or consummating the Offer and the Merger. In such case, the Purchaser may not be
obligated to accept for purchase, or pay for, any Shares tendered. See Section
14.
31
<PAGE>
ANTITRUST. Under the HSR Act, and the rules and regulations that have been
promulgated thereunder by the Federal Trade Commission (the "FTC"), certain
acquisition transactions may not be consummated until certain information and
documentary material has been furnished for review by the Antitrust Division of
the Department of Justice (the "Antitrust Division") and the FTC and certain
waiting period requirements have been satisfied. The acquisition of Shares
pursuant to the Offer is, and the Merger may be, subject to such requirements.
Crane and the Purchaser will file a Premerger Notification and Report Form with
the Antitrust Division and the FTC in connection with the purchase of Shares
pursuant to the Offer and the Merger.
Under the provisions of the HSR Act applicable to the Offer, the purchase of
Shares pursuant to the Offer may not be consummated until the expiration of a
15-calendar day waiting period following the filing by Crane, unless such
waiting period is earlier terminated by the FTC and the Antitrust Division or
Crane receives a request for additional information or documentary material from
the Antitrust Division or the FTC prior thereto. If either the FTC or the
Antitrust Division were to request additional information or documentary
material from Crane, the waiting period would expire at 11:59 p.m., New York
City time, on the tenth calendar day after the date of substantial compliance
with such request. Thereafter, the waiting period could be extended only by
court order or with the consent of Crane. The additional 10-calendar day waiting
period may be terminated sooner by the FTC and the Antitrust Division. Although
the Company is required to file certain information and documentary material
with the Antitrust Division and the FTC in connection with the Offer, neither
the Company's failure to make such filings nor a request from the Antitrust
Division or the FTC for additional information or documentary material made to
the Company will extend the waiting period with respect to the Offer.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the acquisition of Shares by the
Purchaser pursuant to the Offer and the Merger. At any time before or after the
Purchaser's purchase of Shares, the Antitrust Division or the FTC could take
such action under the antitrust laws as either deems necessary or desirable in
the public interest, including seeking to enjoin the purchase of Shares pursuant
to the Offer, the divestiture of Shares purchased thereunder or the divestiture
of substantial assets of the Company or Crane. Private parties as well as state
attorneys general may also bring legal actions under the antitrust laws under
certain circumstances.
Based upon an examination of publicly available information relating to the
businesses in which the Company is engaged, the Purchaser and Crane believe that
the acquisition of Shares pursuant to the Offer and the Merger would not violate
the antitrust laws. The Purchaser and Crane believe that retention of all of the
operations of the Company and Crane should be permitted under the antitrust
laws. Nevertheless, there can be no assurance that a challenge to the Offer on
antitrust grounds will not be made, or, if such challenge is made, what the
result will be. See Section 14.
FOREIGN APPROVALS. According to the 1992 10-K, the Company also conducts
business in a number of foreign countries and jurisdictions. In connection with
the acquisition of the Shares pursuant to the Offer, the laws of certain of
those foreign countries and jurisdictions may require the filing of information
with, or the obtaining of the approval of, governmental authorities in such
countries and jurisdictions. The governments in such countries and jurisdictions
might attempt to impose additional conditions on the Company's operations
conducted in such countries and jurisdictions as a result of the acquisition of
the Shares pursuant to the Offer or the Merger. There can be no assurance that
the Purchaser will be able to cause the Company or its subsidiaries to satisfy
or comply with such laws or that compliance or non-compliance will not have
adverse consequences for the Company or any subsidiary after purchase of the
Shares pursuant to the Offer or the Merger. Neither the Purchaser nor Crane is
aware of any material pending legal proceedings relating to the Offer.
16. CERTAIN FEES AND EXPENSES. Beacon Hill Partners, Inc. has been retained
by the Purchaser as Information Agent in connection with the Offer. The
Information Agent may contact holders of Shares by mail, telephone, telex,
telegraph and personal interview and may request brokers, dealers and
32
<PAGE>
other nominee stockholders to forward material relating to the Offer to
beneficial owners. Customary compensation will be paid for all such services in
addition to reimbursement of reasonable out-of-pocket expenses. The Purchaser
has agreed to indemnify the Information Agent against certain liabilities and
expenses, including liabilities under the federal securities laws.
In addition, First Interstate Bank has been retained as the Depositary. The
Depositary has not been retained to make solicitations or recommendations in its
role as Depositary. The Depositary will receive reasonable and customary
compensation for its services in connection with the Offer, will be reimbursed
for its reasonable out-of-pocket expenses and will be indemnified against
certain liabilities and expenses in connection therewith.
Except as set forth above, the Purchaser will not pay any fees or
commissions to any broker, dealer or other person (other than the Information
Agent) for soliciting tenders of Shares pursuant to the Offer. Brokers, dealers,
commercial banks and trust companies and other nominees will, upon request, be
reimbursed by the Purchaser for customary clerical and mailing expenses incurred
by them in forwarding materials to their customers.
17. MISCELLANEOUS. Crane and the Purchaser have filed with the Commission
the Schedule 14D-1, together with exhibits, pursuant to Rule 14d-3 of the
General Rules and Regulations under the Exchange Act, furnishing certain
additional information with respect to the Offer, and may file amendments
thereto. Such Schedule 14D-1 and any amendments thereto, including exhibits, may
be examined and copies may be obtained from the office of the Commission in the
same manner as described in Section 8 with respect to information concerning the
Company, except that they will not be available at the regional offices of the
Commission.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR CRANE NOT CONTAINED IN THIS OFFER
TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, ANY SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Neither the delivery of the Offer to Purchase nor any purchase pursuant to the
Offer, shall, under any circumstances, create any implication that there has
been no change in the affairs of Crane, the Purchaser or the Company since the
date as of which information is furnished or the date of this Offer to Purchase.
CRANE ACQUISITION CORP.
February 17, 1994
33
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF CRANE
The following table sets forth the name, business address and principal
occupation or employment at the present time and during the last five years, and
the name, principal business and address of any corporation or other
organization in which such employment is or was conducted, of each director and
executive officer of Crane. Except as otherwise noted, each such person is a
citizen of the United States and the business address of each such person is 100
First Stamford Place, Stamford, CT 06902. Except as otherwise noted, each
occupation set forth opposite a person's name refers to employment with Crane
and each such person has held such occupation for at least the past five years.
All directors and executive officers of the Purchaser are executive officers of
Crane and are identified in the table below.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND BUSINESS
ADDRESS AND MATERIAL OCCUPATIONS, OFFICES OR EMPLOYMENTS
NAME HELD DURING THE PAST FIVE YEARS
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
DIRECTORS
Mone Anathan, III Director since 1992, President, Filene's Basement Corp.,
40 Walnut Street Boston, MA (Retailer), 1988 to present; President,
Wellesley, MA 02181 Filene's Basement, a division of Federated Department
Stores, 1982 to 1988. Other directorships: Medusa
Corporation, Brookstone, Inc., Harvard Community Health
Plan, Advest Advantage Trusts.
E. Thayer Bigelow, Jr. Director since 1984. President and Chief Executive
300 First Stamford Place Officer, Time Warner Cable Programming Inc., Stamford,
Stamford, CT 06902 CT, 1991 to present; President, Home Box Office, Inc.
(cable programming and entertainment), a subsidiary of
Time Warner Inc., 1988 to 1991; President, American
Television and Communications Corporation (cable
television systems), a subsidiary of Time Inc., 1988;
Chief Financial Officer, Time, Inc., 1984 to 1988. Other
directorships: Medusa Corporation, BET Holdings, Inc.
R.S. Evans Chairman and Chief Executive Officer, 1984 to present;
President 1987 to 1991 and since June 30, 1992, Director
since 1979. Chairman and Chief Executive Officer of
Medusa Corporation, 1987 to present. Other
directorships: Medusa Corporation, Fansteel, Inc., HBD
Industries, Inc., Mid-Ocean Reinsurance Company Ltd.
Richard S. Forte Director since 1983. President, Forte Cashmere Company,
8A Pleasant Street Inc., Woonsocket, RI (importer and manufacturer), 1988
South Natick, MA 01760 to present; General Partner, Forte Cashmere Company 1982
to 1988; President, Jewell Brook Mills Inc. (woolen
spinners), 1981 to 1988. Other directorships: Medusa
Corporation.
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Dorsey R. Gardner Director 1982 to 1986 and since 1989.
One Post Office Square President, Kelso Management Co., Inc.,
Boston, MA 02109 Boston, MA (investment management). Other
directorships: American Values, III, IV,
Medusa Corporation, POCA Corp.
Dwight C. Minton Director since 1983. Chairman of the Board
469 N. Harrison Street and Chief Executive Officer, Church & Dwight
Princeton, NJ 08543 Co., Inc., Princeton, NJ (manufacturer of
consumer and specialty products). Other
directorships: Medusa Corporation, Chemical
Bank of New Jersey; First Brands Corporation.
Charles J. Queenan, Jr. Director since 1986. Partner, Kirpatrick &
1500 Oliver Building Lockhart, Pittsburgh, PA (attorneys at law).
Pittsburgh, PA 15222 Other directorships: Fansteel, Inc.,
Allegheny Ludlum Corporation, Medusa
Corporation.
Arthur A. Seeligson, Jr. Director since 1982. Independent Oil
4040 Broadway - Room 510 Operator, Investments, San Antonio, TX. Other
San Antonio, TX 78209 directorships: Medusa Corporation.
Boris Yavitz Director since 1987. Paul Garrett Professor
Old Canoe Place Road of Public Policy and Business Responsibility
Hampton Bays, NY 11946 and Former Dean, Columbia University Graduate
School of Business, New York, NY; Deputy
Chairman and Director, Federal Reserve Bank
of New York, 1976 to 1982; Director, The
Institute for the Future. Other
directorships: J.C. Penney Company Inc.,
Barnes Group, Inc., Medusa Corporation.
EXECUTIVE OFFICERS
R. S. Evans Chairman, Chief Executive Officer and
President. President of the Purchaser.
Jeremiah P. Cronin Vice President--Finance and Chief Financial
Officer, previously Senior Vice President
Finance and Administration of Research-
Cottrel, Inc. Vice President Finance and
Treasurer of the Purchaser.
Paul R. Hundt Vice President, Secretary and General
Counsel. Vice President, Secretary and
Director of the Purchaser.
L. Hill Clark Executive Vice President, previously
241 South Abbe Road President, Lear Romec Division of Crane, 1990
Elyria, Ohio 44035 to 1994; Plant Manager, Allied Signal
Aerospace, 1982-1989.
Robert J. Muller, Jr. Executive Vice President, previously Vice
President.
Anthony D. Pantaleoni Vice President--Environment, Health & Safety,
previously Director of Environmental, Health
and Safety Audit Programs of Hoechst
Celanese. Director of Environmental, Health
and Safety Affairs of Specialty Chemicals
Group.
Richard B. Phillips Vice President--Human Resources, previously
Director of Human Resources.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
Michael L. Raithel Controller
David S. Smith Vice President--Corporate Development,
previously Vice President, Corporate Finance,
Bankers Trust Company. Vice President of the
Purchaser.
Gil A. Dickoff Treasurer, previously Assistant Treasurer.
</TABLE>
3
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each stockholder
of the Company or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary at one of its addresses set forth below:
THE DEPOSITARY FOR THE OFFER IS:
FIRST INTERSTATE BANK
<TABLE>
<S> <C> <C> <C>
BY MAIL: FACSIMILE BY HAND: BY OVERNIGHT DELIVERY:
First Interstate Bank TRANSMISSION: First Interstate Bank First Interstate Bank
Special Services Unit (For Eligible 120 Broadway 26610 West Agoura Road
P.O. Box 4177 Institutions 33rd Floor Calabasas, CA 91302
Woodland Hills, CA 91365-4177 only) New York, NY 10271 (818) 880-3114
(818) 880-7176 or
CONFIRM BY First Interstate Bank
TELEPHONE 999 Third Avenue
(818) 880-3114 14th Floor
Seattle, WA 98104
</TABLE>
Questions and requests for assistance may be directed to the Information
Agent at its respective addresses and telephone numbers listed below. Additional
copies of this Offer to Purchase, the Letter of Transmittal and other tender
offer materials may be obtained from the Information Agent as set forth below,
and will be furnished promptly at the Purchaser's expense. You may also contact
your broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[Insert Camera Ready Proof]
1
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
ELDEC CORPORATION
PURSUANT TO THE OFFER TO PURCHASE DATED FEBRUARY 17, 1994 BY
CRANE ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CRANE CO.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MARCH
17, 1994, UNLESS THE OFFER IS EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
FIRST INTERSTATE BANK
<TABLE>
<CAPTION>
BY MAIL: FACSIMILE TRANSMISSION: BY HAND: BY OVERNIGHT DELIVERY:
- ----------------------------- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C> <C>
FIRST INTERSTATE BANK (for Eligible FIRST INTERSTATE BANK FIRST INTERSTATE BANK
Special Services Unit Institutions only) 120 Broadway 26610 West Agoura Road
P.O. Box 4177 (818) 880-7176 33rd Floor Calabasas, CA 91302
Woodland Hills, CA 91365-4177 CONFIRM BY TELEPHONE: New York, NY 10271 (818) 880-3114
(818) 880-3114 or
FIRST INTERSTATE BANK
999 Third Avenue
14th Floor
Seattle, WA 98104
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A NUMBER
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders either if
certificates for Shares (as defined below) are to be forwarded herewith or if
tenders of Shares are to be made by book-entry transfer to an account maintained
by First Interstate Bank (the "Depositary") at The Depository Trust Company, the
Midwest Securities Trust Company or the Philadelphia Depository Trust Company
(each a "Book-Entry Transfer Facility" and collectively referred to as the
"Book-Entry Transfer Facilities") pursuant to the procedures set forth in
Section 3 of the Offer to Purchase (as defined below). Stockholders who tender
Shares by book-entry transfer are referred to herein as "Book-Entry
Stockholders."
Holders of Shares whose certificates for such Shares (the "Share
Certificates") are not immediately available or who cannot deliver their Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase) or who cannot
complete the procedures for book-entry transfer on a timely basis, must tender
their Shares according to the guaranteed delivery procedures set forth in
Section 3 of the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO
A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<PAGE>
/ / CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER FACILITY AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution: --------------------------------------------
Check Box of Book-Entry Transfer Facility:
- ------------------------------------------
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number: -----------------------------------------------------------
Transaction Code Number: --------------------------------------------------
/ / CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING.
PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.
Name(s) of Registered Holder(s):
- ----------------------------------------------------
Window Ticket Number (if any): ---------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
- ---------------------------------
Name of Institution which Guaranteed Delivery: ------------------------------
<TABLE>
<S> <C> <C> <C>
DESCRIPTION OF SHARES TENDERED
NAME(S) AND ADDRESS(ES)
OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY
AS
NAME(S) APPEAR(S) ON SHARE SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
TOTAL NUMBER OF
SHARES REPRESENTED
SHARE CERTIFICATE BY SHARE NUMBER OF SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
Total Shares
* Need not be completed by Book-Entry Stockholders.
** Unless otherwise indicated, it will be assumed that all Shares represented by certificates
delivered to the Depositary
are being tendered. See Instruction 4.
</TABLE>
NOTE: SIGNATURE(S) MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
<PAGE>
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Crane Acquisition Corp., a Washington
corporation (the "Purchaser") and a wholly owned subsidiary of Crane Co., a
Delaware corporation ("Crane"), the above-described shares of Common Stock, par
value $0.05 per share (the "Shares"), of ELDEC Corporation, a Washington
corporation (the "Company"), at a purchase price of $13 per Share, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated February 17, 1994 (the
"Offer to Purchase"), receipt of which is hereby acknowledged, and in this
Letter of Transmittal (which together constitute the "Offer"). The undersigned
understands that the Purchaser reserves the right to transfer or assign, in
whole or from time to time in part, to one or more of its or Crane's affiliates,
the right to purchase all or any portion of the Shares tendered pursuant to the
Offer.
Subject to, and effective upon, acceptance for payment of, or payment for,
Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms or conditions of any such extension or amendment), the undersigned hereby
sells, assigns and transfers to, or upon the order of, the Purchaser all right,
title and interest in and to all of the Shares that are being tendered hereby
and any and all dividends, distributions, other Shares, rights or other
securities issued or issuable in respect thereof on or after March 17, 1994 and
payable or distributable to the undersigned on a date prior to the transfer to
the name of the Purchaser or nominee or transferee of the Purchaser on the
Company's stock transfer records of the Shares tendered herewith (a
"Distribution"), and constitutes and appoints the Depositary the true and lawful
agent and attorney-in-fact of the undersigned with respect to such Shares (and
any Distributions), with full power of substitution (such power of attorney
being deemed to be an irrevocable power coupled with an interest), to (i)
deliver Share Certificates (and any Distributions), or transfer ownership of
such Shares (and any Distributions) on the account books maintained by a
Book-Entry Transfer Facility, together, in any such case, with all accompanying
evidences of transfer and authenticity to, or upon the order of, the Purchaser,
upon receipt by the Depositary, as the undersigned's agent, of the purchase
price (adjusted, if appropriate, as provided in the Offer to Purchase), (ii)
present such Shares (and any Distributions) for transfer on the books of the
Company and (iii) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares (and any Distributions), all in accordance
with the terms and subject to the conditions of the Offer.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall be binding upon successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned hereby irrevocably appoints each designee of the Purchaser,
the attorney-in-fact and proxy of the undersigned, with full power of
substitution, to the full extent of the undersigned's rights with respect to all
Shares tendered hereby and accepted for payment and paid for by the Purchaser
(and any Distributions). All such proxies shall be considered coupled with an
interest in the Shares tendered herewith. Such appointment will be effective
when, and only to the extent that, the Purchaser pays for such Shares by
depositing the purchase price therefor with the Depositary. Upon such acceptance
for payment, all prior powers of attorney and proxies given by the undersigned
with respect to such Shares and such other securities or rights will be revoked,
without further action, and no subsequent powers of attorneys and proxies may be
given (and, if given, will be deemed ineffective). The designees of the
Purchaser will, with respect to the Shares for which such appointment is
effective, be empowered to exercise all voting and other rights of the
undersigned as they in their sole discretion may deem proper at any annual or
special meeting of the Company's stockholders, or any adjournment or
postponement thereof. The Purchaser reserves the right to require that, in order
for Shares to be deemed validly tendered, immediately upon the payment of such
Shares, the Purchaser or its designee must be able to exercise full voting
rights with respect to such Shares and other securities, including voting at any
meeting of stockholders then scheduled.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby (and any Distributions) and that, when the same are accepted for payment
and paid for by the Purchaser, the Purchaser will
<PAGE>
acquire good, marketable and unencumbered title thereto, free and clear of all
liens, restrictions, charges and encumbrances and that the Shares tendered
hereby (and any Distributions) will not be subject to any adverse claim. The
undersigned, upon request, will execute and deliver any additional documents
deemed by the Depositary or the Purchaser to be necessary or desirable to
complete the sale, assignment and transfer of Shares tendered hereby (and any
Distributions). In addition, the undersigned shall promptly remit and transfer
to the Depositary for the account of the Purchaser any and all other
Distributions in respect of the Shares tendered hereby, accompanied by
appropriate documentation of transfer, and, pending such remittance or
appropriate assurance thereof, the Purchaser shall be, subject to applicable
law, entitled to all rights and privileges as owner of any such Distributions,
and may withhold the entire purchase price of Shares tendered hereby, or deduct
from such purchase price the amount or value thereof as determined by the
Purchaser in its sole discretion.
Tender of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date (as defined in the Offer to Purchase) and, unless theretofore
accepted for payment by the Purchaser pursuant to the Offer, may also be
withdrawn at any time after April 18, 1994. See Section 4 of the Offer to
Purchase.
Unless otherwise indicated herein under "Special Payment Instructions",
please issue the check for the purchase price and/or return any Share
Certificates not tendered or not accepted for payment in the name(s) of the
registered holder(s) appearing under "Description of Shares Tendered".
Similarly, unless otherwise indicated under "Special Delivery Instructions",
please mail the check for the purchase price and/or return any Share
Certificates not tendered or not accepted for payment (and accompanying
documents, as appropriate) to the address(es) of the registered holder(s)
appearing under "Description of Shares Tendered". In the event that both the
Special Payment Instructions and the Special Delivery Instructions are
completed, please issue the check for the purchase price and/or return any Share
Certificates not tendered or not accepted for payment in the name of, and
deliver such check and/or return Share Certificates to, the person(s) so
indicated. The undersigned recognizes that the Purchaser has no obligation
pursuant to the Special Payment Instructions to transfer any Shares from the
name of the registered holder thereof if the Purchaser does not accept for
payment any of the Shares tendered hereby.
<PAGE>
<TABLE>
<S> <C>
SPECIAL PAYMENT INSTRUCTIONS
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)
(See Instructions 1, 5, 6 and 7)
To be completed ONLY if Share
Certificates not ten-
To be completed ONLY if Share
Certificates not tendered or not accepted
for payment and/or the check for the dered
or not accepted for payment and/or the
check for the purchase price of Shares
accepted for payment are to be
purchase
price of Shares accepted for payment are
to be issued in the name of someone other
than the under-
sent to someone other than
the undersigned or to the
signed. undersigned at an address other
than that shown above.
Issue / / check
Mail / / check
/ / certificates to: / / certificates to:
Name:
- ------------------------------------------
Name:
------------------------------------------
- ------------------------------------------
---------------------------------------------
(Please Type or Print)
(Please Type or Print)
Address:
- ------------------------------------------
Address:
------------------------------------------
- ------------------------------------------
------------------------------------------
(Include Zip Code)
(Include Zip Code)
- ------------------------------------------
(Taxpayer Identification or Social
Security No.)
(See Substitute Form W-9 on reverse side)
</TABLE>
<PAGE>
IMPORTANT
STOCKHOLDER: SIGN HERE AND COMPLETE SUBSTITUTE FORM W-9 ON REVERSE
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF STOCKHOLDER(S))
Dated:
- ------------------------------------------------------------------------------,
19
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on
the Share Certificates or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustees, executors, administrators,
guardians, attorneys-in-fact, agents, officers of corporations or others acting
in a fiduciary or representative capacity, please provide the following
information. See instruction 5.)
Name(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please Type or Print)
Capacity (Full Title):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(See Instruction 5)
Area Codes and Telephone Numbers:
- ------------------------------------------------------------------------------
Home
- ------------------------------------------------------------------------------
Business
Taxpayer Identification or Social Security No.:
- ----------------------------------------------------------------------
(Complete Substitute Form W-9
on Reverse)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature:
- --------------------------------------------------------------------------------
Name:
- --------------------------------------------------------------------------------
(Please Type or Print)
Title:
- --------------------------------------------------------------------------------
Name of Firm:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
(Area Code and Tel. No.)
- --------------------------------------------------------------------------------
Dated:
- --------------------------------------------------------------------------------
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, signatures
on this Letter of Transmittal must be guaranteed by a firm that is a bank,
broker, dealer, credit union, savings association or other entity which is a
member in good standing of a Medallion Signature Guarantee Program (an "Eligible
Institution"), unless the Shares tendered hereby are tendered (i) by the
registered holder of such Shares who has completed neither the box entitled
"Special Payment Instructions" nor the box entitled "Special Delivery
Instructions" herein or (ii) for the account of an Eligible Institution. See
Instruction 5. If the Share Certificates are registered in the name of a person
other than the signer of this Letter of Transmittal, or if payment is to be made
to, or Share Certificates for unpurchased Shares are to be issued or returned
to, a person other than the registered owner, then the tendered certificates
must be endorsed or accompanied by duly executed stock powers, in either case
signed exactly as the name or names of the registered owner or owners appear on
the certificates, with the signatures on the certificates or stock powers
guaranteed by an Eligible Institution as provided herein. See Instruction 5.
2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be used either
if Share Certificates are to be forwarded herewith or if tenders are to be made
pursuant to the procedures for tender by book-entry transfer set forth in
Section 3 of the Offer to Purchase. Share Certificates, or timely confirmation
(a "Book-Entry Confirmation") of a book-entry transfer of such Shares into the
Depositary's account at a Book-Entry Transfer Facility, as well as this Letter
of Transmittal (or a facsimile hereof), properly completed and duly executed,
with any required signature guarantees, or an Agent's Message (as defined in
Section 2 of the Offer to Purchase) in connection with a book-entry transfer and
any other documents required by this Letter of Transmittal, must be received by
the Depositary at one of its addresses set forth herein prior to the Expiration
Date. Stockholders whose Share Certificates are not immediately available or who
cannot deliver their Share Certificates and all other required documents to the
Depositary prior to the Expiration Date or who cannot complete the procedures
for delivery by book-entry transfer on a timely basis may tender their Shares by
properly completing and duly executing a Notice of Guaranteed Delivery pursuant
to the guaranteed delivery procedures set forth in Section 3 of the Offer to
Purchase. Pursuant to such procedure: (i) such tender must be made by or through
an Eligible Institution, (ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form made available by the Purchaser
must be received by the Depositary prior to the Expiration Date, and (iii) the
Share Certificates (or a Book-Entry Confirmation) representing all tendered
Shares, in proper form for transfer, together with a Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees (or, in the case of a book-entry transfer, an Agent's
Message) and any other documents required by this Letter of Transmittal, must be
received by the Depositary within five National Association of Securities
Dealers Automated Quotation System trading days after the date of execution of
such Notice of Guaranteed Delivery, all as provided in Section 3 of the Offer to
Purchase. If Share Certificates are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof) must accompany each such delivery.
The method of delivery of Share Certificates, this Letter of Transmittal and
all other required documents, including delivery through any Book-Entry Transfer
Facility, is at the option and sole risk of the tendering stockholder and the
delivery will be deemed made only when actually received by the Depositary. If
delivery is by mail, registered mail with return receipt requested, properly
insured, is recommended. In all cases, sufficient time should be allowed to
ensure timely delivery.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or a facsimile thereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein under "Description of
Shares Tendered" is inadequate, the certificate numbers and/or the number of
Shares should be listed on a separate signed schedule attached hereto.
<PAGE>
4. PARTIAL TENDERS (NOT APPLICABLE TO BOOK-ENTRY STOCKHOLDERS). If fewer
than all the Shares represented by any Share Certificates delivered to the
Depositary herewith are to be tendered hereby, fill in the number of Shares
which are to be tendered in the box entitled "Number of Shares Tendered". In
such case, a new Share Certificate for the untendered Shares will be sent,
without expense, to the person(s) signing this Letter of Transmittal, unless
otherwise provided in the box entitled "Special Delivery Instructions" on this
Letter of Transmittal, as soon as practicable after the Expiration Date. All
Shares represented by certificate(s) delivered to the Depositary will be deemed
to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificate(s) without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory to
the Purchaser of such person's authority so to act must be submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made, or Share
Certificates not tendered or not purchased are to be issued or returned, to a
person other than the registered holder(s). Signatures on such certificates or
stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares evidenced by the certificate(s) listed and
transmitted hereby, the certificate(s) must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear on the certificate(s). Signatures on such
certificate(s) or stock powers must be guaranteed by an Eligible Institution.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, the
Purchaser will pay or cause to be paid any stock transfer taxes with respect to
the transfer and sale of purchased Shares to it or its order pursuant to the
Offer. If, however, payment of the purchase price is to be made to, or (in the
circumstances permitted hereby) if Share Certificates not tendered or not
purchased are to be registered in the name of, any person other than the
registered holder(s), or if tendered Share Certificates are registered in the
name of any person other than the person(s) signing this Letter of Transmittal,
the amount of any stock transfer taxes (whether imposed on the registered
holder(s) or such person) payable on account of the transfer to such person will
be deducted from the purchase price unless satisfactory evidence of the payment
of such taxes or exemption therefrom is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificate(s) listed in this Letter of
Transmittal.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check and/or Share
Certificates for unpurchased Shares are to be issued in the name of a person
other than the signer of this Letter of Transmittal or if a check is to be sent
and/or such Share Certificates are to be returned to someone other than the
signer of this Letter of Transmittal or to an address other than that shown
above, the appropriate boxes on this Letter of Transmittal should be completed.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance may be directed to the Information Agent at its address or
telephone number set forth below and additional
<PAGE>
copies of the Offer to Purchase, this Letter of Transmittal and the Notice of
Guaranteed Delivery may be obtained at the Purchaser's expense from the
Information Agent at its address set forth below or from a broker, dealer,
commercial bank or trust company.
9. WAIVER OF CONDITIONS. The conditions of the Offer may be waived by the
Purchaser, in whole or in part, at any time or from time to time in the
Purchaser's sole discretion.
10. BACKUP WITHHOLDING TAX. Each tendering stockholder is required to
provide the Depositary with a correct Taxpayer Identification Number ("TIN") on
Substitute Form W-9, which is provided under "Important Tax Information" below.
Failure to provide the information on the Substitute Form W-9 may subject the
tendering stockholder to 31% federal income tax backup withholding on the
payment of the purchase price. The box in Part 3 of the form may be checked if
the tendering stockholder has not been issued a TIN and has applied for a number
or intends to apply for a number in the near future. If the box in Part 3 is
checked and the Depositary is not provided with a TIN within 60 days, the
Depositary will withhold 31% of all payments of the purchase price, if any, made
thereafter pursuant to the Offer until a TIN is provided to the Depositary.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED, TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES
(OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN AGENT'S MESSAGE) AND CERTIFICATES
OR BOOK-ENTRY CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY
THE DEPOSITARY, OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, PRIOR TO THE EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payer) with the
stockholder's correct TIN on Substitute Form W-9 below. If the stockholder is an
individual, the TIN is his or her social security number. The Certificate of
Awaiting Taxpayer Identification Number should be completed if the tendering
stockholder has not been issued a TIN and has applied for a number or intends to
apply for a number in the near future. Failure to furnish timely a correct TIN
or include all required information will subject the taxpayer to a $50 penalty
for each failure. There are civil and criminal penalties for giving false
information to avoid backup withholding. A stockholder who provides false
information may be subject to a civil penalty of up to $500 and a criminal
penalty, upon conviction, of a fine up to $1,000 or imprisonment of up to one
year, or both.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. For a foreign individual to qualify as an exempt recipient, that
stockholder must submit a statement, signed under penalties of perjury,
attesting to that individual's exempt status. Forms for such statements can be
obtained from the Depositary. See the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional
instructions.
If (i) the stockholder does not furnish the Depositary with a TIN in the
required manner; (ii) the IRS notifies the Depositary that the TIN provided is
incorrect; or (iii) the stockholder is required, but fails, to certify it is not
subject to backup withholding, backup withholding will apply. If backup
withholding applies, the Depositary is required to withhold 31% of any payments
made to the stockholder. Backup withholding is not an additional tax. Rather,
the tax liability of persons subject to backup withholding will be credited by
the amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding with respect to payment of
the purchase price for Shares purchased pursuant to the Offer, a stockholder
must provide the Depositary with his or her correct TIN by completing the
Substitute Form W-9 below certifying that the TIN provided on Substitute From
W-9 is correct (or that the stockholder is awaiting a TIN) and that (1) the
stockholder has not been notified by the Internal Revenue Service that he or she
is subject to backup withholding as a result of failure to report all interest
or dividends or (2) the Internal Revenue Service has notified the stockholder
that he or she is no longer subject to backup withholding.
<PAGE>
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If the Shares are in more than one name or are not in the name
of the actual owner, consult the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional guidance on
which number to report.
<PAGE>
<TABLE>
<S> <C> <C> <C>
PAYER'S NAME: FIRST INTERSTATE BANK
Social Security Number
Part 1 -- PLEASE PROVIDE YOUR TIN
IN THE BOX AT RIGHT AND CERTIFY
BY SIGNING AND DATING BELOW
OR
SUBSTITUTE Employer Identification Number
FORM W-9 Part 2 -- Check the box if you are NOT subject to backup withholding
Department of the because (1) you have not been notified that you are subject to backup
Treasury withholding as a result of failure to report all interest or
Internal Revenue dividends or (2) the Internal Revenue Service has notified you that
Service you are not longer subject to backup withholding. / /
PAYER'S REQUEST FOR CERTIFICATION -- UNDER THE PENALTIES OF
TAXPAYER IDENTIFICATION PERJURY, I CERTIFY THAT THE INFORMATION
NUMBER (TIN) / / PROVIDED ON THIS FORM IS TRUE, CORRECT AND
COMPLETE.
SIGNATURE ----------------- DATE
----------------- PART 3 --
AWAITING TIN / /
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE
IF YOU CHECKED THE BOX IN PART 3 OF
SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (a) I have mailed or
delivered an application to receive a taxpayer identification number
to the appropriate Internal Revenue Service Center or Social Security
Administration Office or (b) I intend to mail or deliver an
application in the near future. I understand that if I do not provide
a taxpayer identification number within sixty (60) days, 31% of all
reportable payments made to me thereafter will be withheld until I
provide a number.
------------------------------- -------------------------------
Signature Date
</TABLE>
<PAGE>
(DO NOT WRITE IN BOX IMMEDIATELY BELOW)
Date Received:
- ---------------- Accepted By:
- ---------------- Checked By:
- ----------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SHARES SHARES SHARES CHECK AMOUNT SHARES
SURRENDERED TENDERED ACCEPTED NO. OF CHECK RETURNED CERTIFICATE NO.
</TABLE>
Delivery Prepared By:
- ---------------- Checked By:
- ---------------- Date:
- ----------------
THE INFORMATION AGENT FOR THE OFFER IS:
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
ELDEC CORPORATION
This Notice of Guaranteed Delivery or one substantially equivalent hereto
must be used to accept the Offer (as defined below) if certificates representing
shares of Common Stock, par value $0.05 per share (the "Shares"), of ELDEC
Corporation, a Washington corporation (the "Company"), are not immediately
available or time will not permit all required documents to reach First
Interstate Bank (the "Depositary") on or prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase (as defined below)), or the
procedure for delivery by book-entry transfer cannot be completed on a timely
basis. This Notice of Guaranteed Delivery may be delivered by hand or sent by
facsimile transmission or mail to the Depositary. See Section 3 of the Offer to
Purchase.
THE DEPOSITARY FOR THE OFFER IS:
FIRST INTERSTATE BANK
<TABLE>
<S> <C> <C> <C>
BY MAIL: FACSIMILE BY HAND: BY OVERNIGHT DELIVERY:
First Interstate Bank TRANSMISSION: First Interstate Bank First Interstate Bank
Special Services Unit (For Eligible 120 Broadway 26610 West Agoura Road
P.O. Box 4177 Institutions 33rd Floor Calabasas, CA 91302
Woodland Hills, CA 91365-4177 only) New York, NY 10271 (818) 880-3114
(818) 880-7176 or
CONFIRM BY First Interstate Bank
TELEPHONE 999 Third Avenue
(818) 880-3114 14th Floor
Seattle, WA 98104
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A
NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an Eligible Institution under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
Ladies and Gentlemen:
The undersigned hereby tenders to Crane Acquisition Corp., a Washington
corporation (the "Purchaser") and a wholly owned subsidiary of Crane Co., a
Delaware corporation, upon the terms and subject to the conditions set forth in
the Offer to Purchase, dated February 17, 1994 (the "Offer to Purchase"), and in
the related Letter of Transmittal (which together constitute the "Offer"),
receipt of each of which is hereby acknowledged, the number of Shares indicated
below pursuant to the guaranteed delivery procedures set forth in Section 3 of
the Offer to Purchase.
<TABLE>
<S> <C>
Number of Shares: Name(s) of Record Holder(s):
Account Number:
Certificate No(s). Address(es):
(if available):
Area Code and
If Share(s) will be tendered by book-entry Telephone Number(s):
transfer, check one box:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company Signature(s):
/ / Philadelphia Depository Trust Company
Account Number:
Date:
</TABLE>
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a bank, broker, dealer, credit union,
savings association or other entity which is a member in good standing of a
Medallian Signature Guarantee Program, hereby guarantees to deliver to the
Depositary, at one of its addresses set forth above, the certificates
representing all tendered Shares, in proper form for transfer, or a Book-Entry
Confirmation (as defined in the Offer to Purchase), together with a properly
completed and duly executed Letter of Transmittal (or a facsimile thereof), with
any required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message (as defined in the Offer to Purchase)), and any other documents
required by the Letter of Transmittal within five National Association of
Securities Dealers Automated Quotation System trading days after the date of
execution of this Notice of Guaranteed Delivery.
<TABLE>
<S> <C>
Name of Firm:
(Authorized Signature)
Title:
Address:
Name:
(Please type or print)
Zip Code
Date:
Area Code and Telephone Number:
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED
DELIVERY. CERTIFICATES FOR SHARES SHOULD BE SENT WITH YOUR LETTER OF
TRANSMITTAL.
2
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
ELDEC CORPORATION
AT
$13 NET PER SHARE
BY
CRANE ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CRANE CO.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MARCH 17, 1994, UNLESS THE OFFER IS EXTENDED.
February 17, 1994
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Crane Acquisition Corp., a Washington corporation
(the "Purchaser") and a wholly owned subsidiary of Crane Co., a Delaware
corporation ("Crane"), to act as Information Agent in connection with the
Purchaser's offer to purchase for cash all the outstanding shares of Common
Stock, par value $0.05 per share (the "Shares"), of ELDEC Corporation, a
Washington corporation (the "Company"), at a price of $13 per Share, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated February 17, 1994 (the
"Offer to Purchase"), and in the related Letter of Transmittal (which together
constitute the "Offer") enclosed herewith. Holders of Shares whose certificates
for such Shares (the "Share Certificates") are not immediately available or who
cannot deliver their Share Certificates and all other required documents to the
Depositary (as defined below) prior to the Expiration Date (as defined in the
Offer to Purchase), or who cannot complete the procedures for book-entry
transfer on a timely basis, must tender their Shares according to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase.
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Shares registered in your name or in the name of your
nominee.
The Offer is subject to certain terms and conditions contained in the Offer
to Purchase. See the Introduction and Sections 1, 14 and 15 of the Offer to
Purchase.
THE BOARD OF DIRECTORS OF ELDEC CORPORATION (THE "COMPANY") HAS UNANIMOUSLY
APPROVED THE OFFER AND THE MERGER REFERRED TO HEREIN, HAS DETERMINED THAT THE
OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS
OF THE COMPANY AND RECOMMENDS THAT SUCH STOCKHOLDERS ACCEPT THE OFFER AND TENDER
THEIR SHARES PURSUANT TO THE OFFER.
<PAGE>
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase, dated February 17, 1994.
2. The blue Letter of Transmittal to tender Shares for your use and for the
information of your clients. Facsimile copies of the Letter of Transmittal may
be used to tender Shares.
3. The yellow Notice of Guaranteed Delivery for Shares to be used to accept
the Offer if Share Certificates are not immediately available or if such
certificates and all other required documents cannot be delivered to First
Interstate Bank (the "Depositary") by the Expiration Date or if the procedure
for book-entry transfer cannot be completed by the Expiration Date.
4. A letter to stockholders of the Company from the President of the
Company.
5. The Solicitation/Recommendation Statement on Schedule 14D-9 filed by the
Company and mailed to stockholders of the Company.
6. A white printed form of letter which may be sent to your clients for
whose accounts you hold Shares registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions with
regard to the Offer.
7. Guidelines of the Internal Revenue Service for Certification of Taxpayer
Identification Number on Substitute Form W-9.
8. A return envelope addressed to First Interstate Bank, the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON MARCH 17, 1994 UNLESS THE OFFER IS
EXTENDED.
In order to take advantage of the Offer, (i) a duly executed and properly
completed Letter of Transmittal and any required signature guarantees (or, in
the case of a book-entry transfer, an Agent's Message (as defined in the Offer
to Purchase)) or other required documents should be sent to the Depositary, and
(ii) either Share Certificates representing the tendered Shares should be
delivered to the Depositary, or such Shares should be tendered by book-entry
transfer into the Depositary's account maintained at one of the Book Entry
Transfer Facilities (as described in the Offer to Purchase), all in accordance
with the instructions set forth in the Letter of Transmittal and the Offer to
Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Share Certificates or other required documents on or prior to the
Expiration Date or to comply with the book-entry transfer procedures on a timely
basis, a tender may be effected by following the guaranteed delivery procedures
specified in Section 3 of the Offer to Purchase.
The Purchaser will not pay any commissions or fees to any broker, dealer or
other person (other than the Depositary and the Information Agent, as described
in the Offer to Purchase) for soliciting tenders of Shares pursuant to the
Offer. The Purchaser will, however, upon request, reimburse you for customary
clerical and mailing expenses incurred by you in forwarding any of the enclosed
materials to your clients. The Purchaser will pay or cause to be paid any stock
transfer taxes payable on the transfer of Shares to it, except as otherwise
provided in Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to,
and additional copies of the enclosed material may be obtained from the
Information Agent, at its address and telephone number set forth on the back
cover of the Offer to Purchase.
Very truly yours,
Beacon Hill Partners, Inc.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, CRANE, THE COMPANY, THE
DEPOSITARY OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THEM, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED
DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
ELDEC CORPORATION
AT
$13 NET PER SHARE
BY
CRANE ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CRANE CO.
THE OFFER AND WITHDRAWAL RIGHTS
WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK
CITY TIME, ON MARCH 17, 1994,
UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated February
17, 1994 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") relating to the offer by Crane Acquisition
Corp., a Washington corporation (the "Purchaser") and wholly-owned subsidiary of
Crane Co., a Delaware corporation ("Crane"), to purchase all outstanding shares
of Common Stock, par value $0.05 per share (the "Shares"), of ELDEC Corporation,
a Washington corporation (the "Company"), at a price of $13 per Share, net to
the seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer. Holders of Shares whose certificates for such
Shares (the "Share Certificates") are not immediately available or who cannot
deliver their Share Certificates, and all other required documents to the
Depositary (as defined below) prior to the Expiration Date (as defined in the
Offer to Purchase), or who cannot complete the procedures for book-entry
transfer on a timely basis, must tender their Shares according to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase.
We are the holder of record of Shares held by us for your account. A tender
of such Shares can be made only by us as the holder of record and pursuant to
your instructions. The Letter of Transmittal is furnished to you for your
information only and cannot be used by you to tender Shares held by us for your
account.
Accordingly, we request instructions as to whether you wish to have us
tender on your behalf any or all Shares held by us for your account pursuant to
the terms and conditions set forth in the Offer.
Please note the following:
1. The tender price is $13 per Share net to you in cash without interest
thereon, upon the terms and subject to the conditions set forth in the Offer.
2. The Offer is being made for all outstanding Shares.
<PAGE>
3. The Offer is subject to certain terms and conditions contained in the
Offer to Purchase. See the Introduction and Sections 1, 14 and 15 of the Offer
to Purchase.
4. THE BOARD OF DIRECTORS OF ELDEC CORPORATION (THE "COMPANY") HAS
UNANIMOUSLY APPROVED THE OFFER AND THE MERGER REFERRED TO HEREIN, HAS DETERMINED
THAT THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE
STOCKHOLDERS OF THE COMPANY AND RECOMMENDS THAT SUCH STOCKHOLDERS ACCEPT THE
OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
5. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by Purchaser
pursuant to the Offer.
6. The Offer and withdrawal rights will expire at 12:00 midnight, New York
City time, on Thursday, March 17, 1994, unless the Offer is extended.
7. Notwithstanding any other provision of the Offer, payment for Shares
accepted for payment pursuant to the Offer will in all cases be made only after
timely receipt by the Depositary of (a) certificates for such Shares and or
timely confirmation of the book-entry transfer of such Shares into the account
maintained by First Interstate Bank (the "Depositary") at The Depository Trust
Company, the Midwest Securities Trust Company or the Philadelphia Depository
Trust Company (collectively, the "Book-Entry Transfer Facilities"), pursuant to
the procedures set forth in Section 3 of the Offer to Purchase, (b) the Letter
of Transmittal (or a facsimile thereof), properly completed and duly executed,
with any required signature guarantees (or, in the case of a book-entry
transfer, an Agent's Message (as defined in the Offer to Purchase)), and (c) any
other documents required by the Letter of Transmittal. Accordingly, payment may
not be made to all tendering stockholders at the same time depending upon when
certificates for or confirmations of book-entry transfer of such Shares into the
Depositary's account at a Book-Entry Transfer Facility are actually received by
the Depositary.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form set forth on the next page of this letter. If you
authorize the tender of your Shares, all such Shares will be tendered unless
otherwise specified on the next page of this letter. An envelope to return your
instructions to us is enclosed. Your instructions should be forwarded to us in
ample time to permit us to submit a tender on your behalf prior to the
expiration of the Offer.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK
OF
ELDEC CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase dated February 17, 1994 and the related Letter of Transmittal in
connection with the Offer by Crane Acquisition Corp., a Washington corporation
(the "Purchaser") and a wholly-owned subsidiary of Crane Co., a Delaware
corporation, to purchase all outstanding shares of Common Stock, par value $0.05
per share (the "Shares"), of ELDEC Corporation, a Washington corporation.
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
Number of Shares to Be
Tendered Shares
Date:
SIGN HERE
Signature(s)
(Print Name(s))
(Print Address(s))
(Area Code and
Telephone Number(s))
(Taxpayer Identification or
Social Security Number(s))
3
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYOR.
Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payor.
<TABLE>
<C> <S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
GIVE THE GIVE THE EMPLOYER
SOCIAL SECURITY IDENTIFICATION
NUMBER OF-- FOR THIS TYPE OF NUMBER OF--
FOR THIS TYPE OF ACCOUNT ACCOUNT
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<C> <S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner of the
(joint account) account or, if combined
funds, the first
individual on the
account(1)
3. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
4. (a) The usual revocable The grantor-trustee(1)
savings trust
account (grantor is
also trustee)
(b) So-called trust The actual owner(1)
account that is not
a legal or valid
trust under state
law
5. Sole proprietorship The owner(3)
account
6. Sole proprietorship The owner(3)
account
7. A valid trust, estate The legal entity (Do not
or pension trust furnish the identifying
number of the personal
representative or trustee
unless the legal entity
itself is not designated
in the account title.)(4)
8. Corporate account The corporation
9. Association, club, The organization
religious, charitable
educational or other
tax-exempt organization
account
10. Partnership account The partnership
11. A broker or registered The broker or nominee
nominee
12. Account with the The public entity
Department of
Agriculture in the name
of a public entity
(such as a state or
local government,
school district or
prison) that receives
agricultural program
payments
</TABLE>
- --------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Show the name of the individual. You may also enter the business name. You
may use your SSN or EIN.
(4) List first and circle the name of the legal trust, estate, or pension trust.
Note: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- - A corporation.
- - An organization exempt from tax under section 501(a),
or an individual retirement plan, or a custodial account under section
403(b)(7).
- - The United States or any agency or instrumentality
thereof.
- - A state, the District of Columbia, a possession of the
United States, or any political subdivision or instrumentality thereof.
- - A foreign government or any political subdivision,
agency or instrumentality thereof.
- - An international organization or any agency or
instrumentality thereof.
- - A foreign central bank of issue.
- - A registered dealer in securities or commodities
registered in the U.S. or a possession of the U.S.
- - A real estate investment trust.
- - An entity registered at all times during the tax year
under the Investment Company Act of 1940.
- - A common trust fund operated by a bank under
section 584(a).
- - A financial institution.
- - A middleman known in the investment community as
a nominee or listed in the most recent publication of the American Society of
Corporate Secretaries, Inc., Nominee List.
- - A trust exempt from tax under section 664 as described in
section 4947.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- - Payments to nonresident aliens subject to withholding
under section 1441.
- - Payments to partnerships not engaged in a trade or
business in the U.S. and which have at least one nonresident partner.
- - Payments of patronage dividends where the amount
received is not paid in money.
- - Payments made by certain foreign organizations.
Payments of interest not generally subject to backup withholding include the
following:
- - Payments of interest on obligations issued by
individuals.
NOTE: You may be subject to backup withholding if this interest is $600 or
more and is paid in the course of the payor's trade or business and you have
not provided your correct taxpayer identification number to the payor.
- - Payments of tax-exempt interest (including exempt-
interest dividends under section 852).
- - Payments described in section 6049(b)(5) to
nonresident aliens.
- - Payments on tax-free covenant bonds under section
1451.
- - Payments made by certain foreign organizations.
- - Mortgage interest paid to you.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYOR, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYOR. ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6042, 6044, 6045, 6049, 6050A and 6050N.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend interest
or other payments to give taxpayer identification numbers to payors who must
report the payments to the IRS. The IRS uses the numbers for identification
purposes. Payors must be given the numbers whether or not recipients are
required to file tax returns. Payors must generally withhold 31% of taxable
interest, dividend and certain other payments to a payee who does not furnish a
taxpayer identification number to a payor. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payor, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. --Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION
CONTACT YOUR TAX CONSULTANT OR
THE INTERNAL REVENUE SERVICE
<PAGE>
[CRANE LOGO]
FOR IMMEDIATE RELEASE
CRANE CO. TO ACQUIRE ELDEC CORPORATION
STAMFORD, CONNECTICUT -- February 11, 1994 -- Crane Co. of Stamford,
Connecticut and ELDEC Corporation of Lynnwood, Washington jointly announced
today that they had signed a definitive merger agreement whereby a subsidiary of
Crane will commence a tender offer at $13.00 per share in cash for all
outstanding shares of common stock of ELDEC. The tender offer upon completion,
will be followed by a merger in which any nontendering stockholders will have
the right to obtain $13.00 per share in cash.
As part of the transaction, Crane has signed agreements with certain ELDEC
shareholders to purchase approximately 51% of the outstanding ELDEC shares at
$13.00 per share. ELDEC has approximately 5,695,647 shares outstanding.
ELDEC stated that it board of directors had approved the offer and
recommended its acceptance. Morgan Stanley & Co. Incorporated acted as
financial adviser to ELDEC.
The tender offer will be commenced on or before Friday, February 18, 1994,
and an offer to purchase and related letter of transmittal will be mailed to all
shareholders.
ELDEC custom designs and manufactures electronic and electromechanical
systems for aerospace and defense applications. Founded in 1957, ELDEC is a
subcontractor to a large number of major aerospace and defense electronics
contractors.
Crane Co. is a diversified manufacturer of engineered industrial products
serving niche markets in the aerospace, fluid handling, automatic merchandising
and the construction industry. Crane's wholesale distribution business serves
the building products market and industrial customers.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AGREEMENT FOR MERGER AND REORGANIZATION
AMONG
CRANE CO.
CRANE ACQUISITION CORP.
AND
ELDEC CORPORATION
DATED AS OF FEBRUARY 11, 1994
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
AGREEMENT FOR MERGER AND REORGANIZATION
TABLE OF CONTENTS
PAGE
----
ARTICLE I
THE OFFER
1.01 The Offer ...................................................... 3
1.02 Company Action ................................................ 5
1.03 Company Board Representation; Section 14(f) ................... 8
ARTICLE II
THE MERGER
2.01 Execution and Filing .......................................... 10
2.02 Consummation of Merger; Closing................................ 10
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.01 Organization, Etc.............................................. 11
3.02 Capital Stock of the Company................................... 11
3.03 Capital Stock of Company Subsidiaries and Other
Ownership Interests............................................. 13
3.04 SEC Filings and Financial Information.......................... 13
3.05 Tax Matters.................................................... 15
3.06 Absence of Undisclosed Liabilities............................. 16
3.07 Title to Properties............................................ 16
3.08 Agreements, Contracts and Commitments.......................... 16
3.09 Intellectual Property; Infringement of Patents,
Trademarks, etc................................................. 21
3.10 No Breach of Statute or Contract; Governmental
Authorizations; Required Consents............................... 23
3.11 Investigations; Litigation..................................... 25
3.12 Authorization of Agreement..................................... 26
3.13 Schedule 14D-9 and Other Filings............................... 27
3.14 Broker's or Finder's Fees, etc................................. 28
3.15 1993 Proxy Statement........................................... 29
3.16 Insurance...................................................... 29
3.17 Vote Required.................................................. 29
3.18 Opinion of Financial Advisor................................... 30
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
4.01 Organization, etc.............................................. 30
4.02 No Breach of Statute or Contract; Governmental
Authorizations; Required Consents............................... 30
i
<PAGE>
PAGE
----
4.03 Authorization of Agreement..................................... 32
4.04 Broker's or Finder's Fees, etc................................. 33
4.05 Information Supplied........................................... 33
4.06 Capitalization of Acquisition Sub.............................. 34
4.07 Ownership of Company Stock..................................... 35
4.08 Financing...................................................... 35
ARTICLE V
CERTAIN AGREEMENTS
5.01 Operation of Business of the Company........................... 35
5.02 No Solicitations............................................... 41
5.03 Access to Information; Confidentiality......................... 43
5.04 Shareholder Approval........................................... 44
5.05 The Company Employee Options................................... 45
5.06 Proxy Statement................................................ 45
5.07 Regulatory and Other Approvals................................. 46
5.08 Notice of Dissenting Shares.................................... 47
5.09 Availability of Funds.......................................... 48
5.10 Payment of Real Estate Excise Taxes............................ 48
5.11 Retirement Plan Contribution................................... 48
5.12 Expenses....................................................... 49
5.13 Fulfillment of Conditions...................................... 49
ARTICLE VI
CONDITIONS OF MERGER
6.01 Conditions to Each Party's Obligation to Effect
the Merger...................................................... 49
6.02 Conditions to Obligation of Parent and
Acquisition Sub to Effect the Merger............................ 50
6.03 Conditions to Obligation of the Company to Effect
the Merger...................................................... 51
ARTICLE VII
TERMINATION OF OBLIGATIONS;
PAYMENT OF EXPENSES; WAIVERS
7.01 Termination of Agreement and Abandonment of
Merger.......................................................... 51
7.02 Effect of Termination.......................................... 56
7.03 Waiver......................................................... 57
ARTICLE VIII
GENERAL
8.01 Amendments..................................................... 57
8.02 Further Instruments............................................ 57
8.03 Public Announcements........................................... 58
ii
<PAGE>
PAGE
----
8.04 Governing Law.................................................. 58
8.05 Notices........................................................ 58
8.06 No Assignment; Binding Effect.................................. 59
8.07 Entire Agreement............................................... 60
8.08 Counterparts................................................... 60
8.09 Indemnification................................................ 60
8.10 Termination of Representations and Warranties.................. 61
8.11 No Third Party Beneficiaries................................... 62
8.12 Invalid Provisions............................................. 62
8.13 Headings....................................................... 63
ARTICLE IX
DEFINITIONS
9.01 Definitions................................................... 63
_______________
Annex A - Conditions to the Offer
Exhibit A - Form of Articles of Merger
iii
<PAGE>
AGREEMENT FOR MERGER AND REORGANIZATION
AGREEMENT FOR MERGER AND REORGANIZATION dated as of
February 11, 1994, among CRANE CO., a Delaware corporation ("PARENT"), CRANE
ACQUISITION CORP., a Washington corporation which is a wholly owned subsidiary
of Parent ("ACQUISITION SUB"), and ELDEC CORPORATION, a Washington
corporation ("COMPANY"):
RECITALS
WHEREAS, the Boards of Directors of the Company, Parent and
Acquisition Sub have each determined that it is advisable and in the best
interests of their respective shareholders to consummate, and have approved,
the business combination transaction provided for herein in which (i)
Acquisition Sub would make a cash tender offer to acquire all of the issued
and outstanding shares of Common Stock, par value $0.05 per share, of the
Company (the "COMPANY COMMON STOCK") upon the terms and subject to the
conditions of this Agreement and (ii) subsequently Acquisition Sub would merge
with and into the Company (the "MERGER") and the Company would become a
wholly owned subsidiary of Parent;
WHEREAS, substantially concurrently with the execution and
delivery of this Agreement, Parent, Acquisition Sub and certain holders of
shares of Company Common Stock have entered into a stock purchase agreement
(the "STOCK PURCHASE AGREEMENT") pursuant to which Acquisition Sub has
agreed to purchase from such holders, and such holders have agreed to sell to
Acquisition
<PAGE>
Sub, a total of 2,899,872 shares of Company Common Stock at $13.00 per share,
subject to the terms and conditions set forth therein, and such holders have
placed into escrow such shares to secure their respective obligations under
the Stock Purchase Agreement;
WHEREAS, the Boards of Directors of the Parent, Acquisition Sub,
and the Company, respectively, have approved this Agreement and the Plan of
Merger;
WHEREAS, the Company, Parent and Acquisition Sub desire to make
certain representations, warranties and agreements in connection with the
transactions contemplated by this Agreement and also to prescribe various
conditions to the consummation of such transactions;
WHEREAS, the Company has heretofore delivered to Parent a letter
dated February 11, 1994 setting forth certain disclosures required by this
Agreement and specifying the section or sections hereof making reference to
such disclosures (the "COMPANY LETTER"); and
WHEREAS, Parent has heretofore delivered to the Company a letter
dated February 11, 1994 setting forth certain disclosures required by this
Agreement and specifying the section or sections hereof making reference to
such disclosures (the "PARENT LETTER"):
2
<PAGE>
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements, provisions and covenants herein contained, the parties
agree as follows:
ARTICLE I
THE OFFER
1.01 THE OFFER. (a) Provided that this Agreement shall not
have been terminated in accordance with SECTION 7.01 and none of the events
set forth in Annex A hereto shall have occurred or be continuing, as promptly
as practicable after the date hereof, but in no event later than five business
days after the date hereof, Parent shall cause Acquisition Sub to, and
Acquisition Sub shall, commence (within the meaning of Rule 14d-2 under the
Securities Exchange Act of 1934, as amended (such Act and the rules and
regulations promulgated thereunder being referred to herein as the
"SECURITIES EXCHANGE ACT")) a cash tender offer (the "OFFER") to acquire
all of the issued and outstanding shares of Company Common Stock for $13.00
per share (such amount, or any greater amount per share paid pursuant to the
Offer, the "PER SHARE AMOUNT") net to the seller in cash. The obligation of
Acquisition Sub to consummate the Offer and to accept for payment and to pay
for shares of Company Common Stock tendered pursuant to the Offer shall be
subject only to the conditions set forth in Annex A hereto. Acquisition Sub
expressly reserves the right to waive any such condition (other than the
condition relating to the expiration of the Hart-Scott-Rodino Act (as defined
in ARTICLE IX)), to increase the Per Share Amount and to make any other
changes in the terms and conditions
3
<PAGE>
of the Offer; PROVIDED, HOWEVER, that no change may be made which (i)
decreases the Per Share Amount, (ii) changes the form of consideration to be
paid in the Offer, (iii) reduces the number of shares of Company Common Stock
that Acquisition Sub has tendered for in the Offer or (iv) imposes conditions
to the Offer in addition to those set forth in Annex A hereto; PROVIDED,
HOWEVER, that (1) the Offer may be extended to the extent required by law in
connection with an increase in the consideration to be paid pursuant to the
Offer, (2) the Offer may be extended by Acquisition Sub in its sole discretion
for not more than 12 business days beyond the initially scheduled expiration
date, and (3) the Offer may be extended by Acquisition Sub for up to 60
business days after the initially scheduled expiration date if upon any
expiration of the Offer any condition to the Offer shall not be satisfied and
there is a reasonable basis to believe that such condition could be satisfied
within such 60 business day period. Assuming the prior satisfaction or
waiver of the conditions of the Offer and subject to the foregoing right to
extend the Offer, Acquisition Sub shall pay for shares of Company Common Stock
tendered pursuant to the Offer as soon as practicable after termination
thereof.
(b) As soon as practicable on the date of commencement of
the Offer, Acquisition Sub shall file with the SEC (as defined in ARTICLE
IX) a Tender Offer Statement on Schedule 14D-1 promulgated under the
Securities Exchange Act (together with all amendments and supplements thereto,
the "SCHEDULE 14D-1") with respect to the Offer, and take such steps
4
<PAGE>
as are necessary to cause the Offer to Purchase (as defined below) to be
disseminated to the holders of shares of Company Common Stock as and to the
extent required by applicable federal securities laws. The Schedule 14D-1
shall contain an offer to purchase (the "OFFER TO PURCHASE") and forms of
the related letter of transmittal and any related summary advertisement (the
Schedule 14D-1, the Offer to Purchase and such other documents, together with
all amendments and supplements thereto, the "OFFER DOCUMENTS"). Parent,
Acquisition Sub and the Company shall correct promptly any information
provided by any of them for use in the Offer Documents which shall have become
false or misleading, and Parent and Acquisition Sub shall take all steps
necessary to cause the Schedule 14D-1 as so corrected to be filed with the SEC
and the other Offer Documents as so corrected to be disseminated to holders of
shares of Company Common Stock, in each case as and to the extent required by
applicable federal securities laws. The Company and its counsel shall be
given an opportunity to review and comment on the Offer Documents prior to
their being filed with the SEC, and Parent and Acquisition Sub will provide
the Company and its counsel in writing with any comments that Parent or
Acquisition Sub receives from the SEC or its staff with respect to the Offer
Documents promptly after receipt of any such comments.
1.02 COMPANY ACTION. (a) The Company hereby approves and
consents to the Offer and represents that (i) the Board of Directors of the
Company, at a meeting duly called and held, has (A) determined that this
Agreement, the Plan of Merger and the
5
<PAGE>
transactions contemplated hereby and thereby, including the Offer and the
Merger, taken together, are fair to and in the best interests of the holders
of shares of Company Common Stock, (B) approved and adopted this Agreement,
the Plan of Merger and the transactions contemplated hereby and thereby, (C)
subject to its fiduciary duties under applicable laws as advised by
independent legal counsel, recommended that the shareholders of the Company
accept the Offer, tender their shares of Company Common Stock thereunder to
Acquisition Sub and, if required by applicable law in order to consummate the
Merger, approve the Plan of Merger and the transactions contemplated thereby;
PROVIDED, HOWEVER, that such recommendation may be withdrawn or modified
in accordance with SECTION 5.02, (D) taken all necessary steps to render
Section 23B.19.040 of the WBCA (as defined in ARTICLE IX) inapplicable to
the Merger and (E) resolved to elect not to be subject, to the extent
permitted by law, to any state takeover law that may purport to be applicable
to the Offer, the Merger or the transactions contemplated by this Agreement,
and (ii) the Company has received the written opinion of Morgan Stanley & Co.
Incorporated, the Company's independent financial advisor, dated the date
hereof, to the effect that, as of the date hereof, the consideration to be
received by holders of shares of Company Common Stock pursuant to the Offer
and the Merger, taken together, is fair from a financial point of view to the
holders of shares of Company Common Stock. Subject to the right of the
Company's Board of Directors to withdraw, suspend, modify or amend its
recommendation as provided in the preceding sentence,
6
<PAGE>
the Company hereby consents to the inclusion in the Offer Documents of the
recommendation of the Company's Board of Directors described in the
immediately preceding sentence.
(b) As soon as practicable on the date of commencement of
the Offer, the Company shall file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 promulgated under the Securities Exchange Act
(together with all amendments and supplements thereto, the "SCHEDULE 14D-9")
containing the recommendation of the Board of Directors of the Company
described in SECTION 1.02(A), and shall take such steps as are necessary to
cause the Schedule 14D-9 to be disseminated to the holders of shares of
Company Common Stock as and to the extent required by applicable federal
securities laws. The Company, Parent and Acquisition Sub shall correct
promptly any information provided by any of them for use in the Schedule 14D-9
which shall have become false or misleading, and the Company shall take all
steps necessary to cause the Schedule 14D-9 as so corrected to be filed with
the SEC and disseminated to holders of shares of Company Common Stock, in each
case as and to the extent required by applicable federal securities laws.
Parent and its counsel shall be given an opportunity to review and comment on
the Schedule 14D-9 prior to its being filed with the SEC, and the Company will
provide Parent and its counsel in writing with any comments that the Company
receives from the SEC or its staff with respect to the Schedule 14D-9 promptly
after receipt of any such comments.
7
<PAGE>
(c) The Company shall promptly furnish Acquisition Sub with
mailing labels containing the names and addresses of all record holders of
shares of Company Common Stock and with security position listings of shares
of Company Common Stock held in stock depositories, each as of a recent date,
together with all other available listings and computer files containing
names, addresses and security position listings of record holders and
beneficial owners of shares of Company Common Stock. The Company shall
furnish Acquisition Sub with such additional information, including, without
limitation, updated listings and files of shareholders, mailing labels and
security position listings and such other assistance as Parent, Acquisition
Sub or their agents may reasonably request in communicating the Offer to
record and beneficial holders of shares of Company Common Stock. Subject to
the requirements of applicable law, and except for such steps as are necessary
to disseminate the Offer Documents and any other documents necessary to
consummate the Offer or the Merger, Parent and Acquisition Sub shall hold in
confidence (subject to the terms and conditions of the Confidentiality
Agreement dated December 17, 1993 between the Company and Parent) the
information contained in such labels, listings and files, shall use such
information only in connection with the Offer and the Merger, and, if this
Agreement shall be terminated in accordance with SECTION 7.01, shall deliver
to the Company all copies of such information then in their possession.
1.03 COMPANY BOARD REPRESENTATION; SECTION 14(F). (a) Upon
the purchase by Acquisition Sub, pursuant to the Offer,
8
<PAGE>
the Stock Purchase Agreement or otherwise, of such number of shares of Company
Common Stock as represents at least a majority of the then issued and
outstanding shares of Company Common Stock, and from time to time thereafter,
Acquisition Sub shall be entitled forthwith to designate up to such number of
directors, rounded up to the next whole number, as shall give Acquisition Sub
representation on the Board of Directors of the Company equal to the product
of the total number of directors on the Board of Directors of the Company
(giving effect to any directors elected pursuant to this sentence) multiplied
by the percentage that the aggregate number of shares of Company Common Stock
beneficially owned by Acquisition Sub or any affiliate of Acquisition Sub
following such purchase bears to the total number of shares of Company Common
Stock then outstanding, and the Company shall, at such time, promptly take all
actions necessary to cause Acquisition Sub's designees to be elected as
directors of the Company, including by increasing the size of the Board of
Directors of the Company or securing the resignations of incumbent directors
or both.
(b) The Company's obligations to appoint Acquisition Sub's
designees to the Board of Directors of the Company shall be subject to Section
14(f) of the Securities Exchange Act and Rule 14f-1 promulgated thereunder.
The Company shall promptly take, at its expense, all actions required pursuant
to such Section and Rule in order to fulfill its obligations under this
Section, and shall include in the Schedule 14D-9 such information with respect
to the Company and its officers and directors as is
9
<PAGE>
required under Section 14(f) and Rule 14f-1 to fulfill such obligations.
Parent or Acquisition Sub shall supply to the Company and be solely
responsible for any information with respect to either of them and their
nominees, officers, directors and affiliates required by such Section 14(f)
and Rule 14f-1.
ARTICLE II
THE MERGER
2.01 Execution and Filing. Subject to the provisions of ARTICLE
VI, the Plan of Merger shall be executed by Acquisition Sub and the Company,
the Articles of Merger shall be executed by the Company in its capacity as the
Surviving Corporation, and such Articles of Merger and Plan of Merger shall be
delivered to the Secretary of State of the State of Washington for filing as
provided in RCW 23B.11.050 of the WBCA on the Closing Date.
2.02 CONSUMMATION OF MERGER; CLOSING. The closing of the
transactions contemplated by this Agreement will take place at the offices of
Davis Wright Tremaine, 2600 Century Square, 1501 Fourth Avenue, Seattle,
Washington, at 10:00 a.m., Pacific Time, as soon as practicable after
consummation of the Offer and, if required by applicable law in order to
consummate the Merger, after the approval of the Plan of Merger by the
requisite vote of the shareholders of the Company, provided that the other
closing conditions set forth in ARTICLE VI have been satisfied or, if
permissible, waived in accordance with this Agreement, or at such other
place and time or on such other date as may be mutually
10
<PAGE>
agreed upon in writing by the parties hereto, (the "CLOSING DATE").
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Acquisition Sub
as follows:
3.01 ORGANIZATION, ETC. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Washington. The Company has all requisite corporate power and authority to
own, operate and lease its properties and assets and to carry on its business
as now being conducted. Each of the Company's Subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization and has all requisite corporate
power and authority to own, operate and lease its properties and assets and to
carry on its business as now being conducted. The Company and each of its
Subsidiaries is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction in which such qualification is required,
except for jurisdictions in which the failure so to qualify or to be in good
standing would not, individually or in the aggregate, have a Material Adverse
Effect.
3.02 CAPITAL STOCK OF THE COMPANY. The authorized capital stock
of the Company consists of 4,000,000 shares of preferred stock, none of which
is issued and outstanding, and 10,000,000 shares of Company Common Stock. As
of February 4, 1994, 5,695,647 shares of Company Common Stock were issued and
11
<PAGE>
outstanding, no shares were held in the treasury of the Company and 592,385
shares were reserved for issuance pursuant to outstanding Company Employee
Options. Since February 4, 1994, there has been no change in the number of
issued and outstanding shares of Company Common Stock or shares of Company
Common Stock held in treasury or reserved for issuance, other than in
connection with the issuance of shares of Company Common Stock pursuant to the
exercise of Company Employee Options. Except pursuant to this Agreement, and
except for outstanding Company Employee Options, there are no outstanding
subscriptions, options, warrants, rights (including "phantom" stock rights),
preemptive rights or other contracts, commitments, understandings or
arrangements, including any right of conversion or exchange under any
outstanding security, instrument or agreement (together, "OPTIONS"),
obligating the Company or any of its Subsidiaries to issue or sell any shares
of capital stock of the Company or to grant, extend or enter into any Option
with respect thereto. There are no outstanding contractual obligations of the
Company or any of its Subsidiaries to purchase, redeem or otherwise acquire
any shares of capital stock of the Company. All issued and outstanding shares
of Company Common Stock are, and all shares reserved for issuance will be,
upon issuance in accordance with the terms specified in the instruments or
agreements pursuant to which they are issuable, duly authorized, validly
issued, fully paid and nonassessable, and there are no preemptive rights in
respect thereof.
12
<PAGE>
3.03 CAPITAL STOCK OF COMPANY SUBSIDIARIES AND OTHER OWNERSHIP
INTERESTS. SECTION 3.03 OF THE COMPANY LETTER contains a list of all the
Subsidiaries of the Company and the jurisdiction of incorporation of each such
Subsidiary. All the outstanding shares of capital stock of each such
Subsidiary are owned, beneficially and of record, by the Company, free and
clear of any liens, claims, mortgages, security interests, or encumbrances
(each, a "LIEN"), are duly authorized, validly issued, fully paid and
nonassessable, and there are no preemptive rights in respect thereof. Except
as set forth in SECTION 3.03 OF THE COMPANY LETTER, there are no outstanding
Options, calls or commitments of any kind to any Person relating to any shares
of the capital stock of any Subsidiary of the Company or securities
convertible into or exchangeable for shares of the capital stock of any
Subsidiary of the Company. Except as set forth in SECTION 3.03 OF THE
COMPANY LETTER, the Company does not own, and there are no outstanding
commitments of the Company in respect of any investment in, or Options
providing for the purchase by the Company or any of its Subsidiaries of, any
security or other interest in any Person which is not a wholly owned
Subsidiary of the Company.
3.04 SEC FILINGS AND FINANCIAL INFORMATION. The Company has
made available to Parent (i) a copy of all forms, reports, registration
statements and filings made or required to be made by it or any Subsidiary of
the Company with the SEC since March 31, 1991 (as such documents have since
the time of their filing been amended or supplemented, the "COMPANY SEC
REPORTS").
13
<PAGE>
As of the date filed or amended, as the case may be, each such Company SEC
Report did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The audited consolidated financial statements and unaudited
interim consolidated financial statements (including, in each case, the notes,
if any, thereto) of the Company and its Subsidiaries included in the 1993 10-K
and the Quarterly 10-Q's (the "COMPANY FINANCIAL STATEMENTS") complied in
all material respects with the published rules and regulations of the SEC with
respect thereto, were prepared in accordance with GAAP (except as otherwise
noted therein) and fairly present (subject, in the case of the unaudited
interim financial statements contained in the Quarterly 10-Q's, to normal,
recurring year-end audit adjustments which are not expected, individually or
in the aggregate, to be material) the consolidated financial position of the
Company and its Subsidiaries as of the dates thereof and the consolidated
results of their operations and changes in financial position for the periods
then ended. For the purposes of this Agreement, all financial statements
referred to in this SECTION 3.04 shall be deemed to include any notes to
such financial statements, and each Subsidiary of the Company is treated as a
consolidated subsidiary of the Company in the Company Financial Statements for
all periods covered thereby.
14
<PAGE>
3.05 TAX MATTERS. For the purposes of this SECTION 3.05, the
term "Company" shall be deemed to include the Company and each of its
subsidiaries.
(a) The Company has filed all Tax Returns required to be filed
prior to the date of the Company Letter. The Company (i) has paid all Taxes
that are due, or claimed or asserted by any taxing authority to be due, from
the Company for the periods covered by the Tax Returns or (ii) has duly and
fully provided reserves adequate to pay all Taxes in accordance with GAAP.
(b) The Company has not requested any extension of time within
which to file any Tax Return, which extension remains in effect on the date
hereof.
(c) The statute of limitations for the assessment of all Federal
income Taxes has expired for all applicable Tax Returns of the Company through
March 25, 1990; and no deficiency for any Taxes has been suggested, proposed,
asserted or assessed against the Company that has not been resolved and paid
in full or which has had or is reasonably expected to have a Material Adverse
Effect.
(d) Except as set forth in SECTION 3.05(D) OF THE COMPANY
LETTER, to the Knowledge of the Company, no audits or other administrative
proceedings or court proceedings are presently pending with regard to any
Federal or Washington State Taxes or Tax Returns of the Company.
(e) No agreements relating to allocating or sharing of Taxes
have been entered into by the Company.
15
<PAGE>
3.06 ABSENCE OF UNDISCLOSED LIABILITIES. Neither the Company
nor any Subsidiary has any liabilities (whether absolute, accrued, contingent,
known or unknown), except: (i) liabilities that are disclosed in the Company
Balance Sheet, (ii) liabilities that are disclosed in the Company SEC Reports,
(iii) liabilities incurred since December 26, 1993 in the ordinary course of
business consistent with past practice, (iv) liabilities disclosed in SECTION
3.06 OF THE COMPANY LETTER, or (v) liabilities which, individually or in the
aggregate, have not had and are not reasonably expected to have a Material
Adverse Effect.
3.07 TITLE TO PROPERTIES. (a) SECTION 3.07(A) OF THE COMPANY
LETTER contains a true and correct list of (i) each parcel of real property
owned by the Company or any Subsidiary, (ii) each parcel of real property
leased by the Company or any Subsidiary (as lessee or lessor) and (iii) all
Liens relating to or affecting any parcel of real property referred to in
clause (i).
(b) The Company and its Subsidiaries have good and marketable
title, or valid leasehold rights in the case of leased property, to all real
property and all personal property, owned or leased by them, free and clear of
all Liens which, when viewed in the aggregate, would have a Material Adverse
Effect.
3.08 AGREEMENTS, CONTRACTS AND COMMITMENTS. (a) Except as set
forth in SECTION 3.08(A) OF THE COMPANY LETTER or in the Company SEC Reports
filed prior to the date of this
16
<PAGE>
Agreement, as of the date hereof, neither the Company nor any of its
Subsidiaries is a party to any oral or written:
(i) union or collective bargaining agreement;
(ii) agreement with any executive officer or other key employee of
the Company or any of its Subsidiaries, the benefits of which are
contingent or vest, or the terms of which are materially altered, upon
the occurrence of a transaction involving the Company or any of its
Subsidiaries of the nature contemplated by this Agreement;
(iii) Company Benefit Plan, any of the benefits of which will be
increased, or the vesting of the benefits of which will be accelerated,
by the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement;
(iv) agreement to pay any employee, director or affiliate of the
Company or any Subsidiary in any year an amount in excess of $100,000;
(v) agreement with any Person containing any provision or
covenant prohibiting or limiting the ability of the Company or any
Subsidiary to engage in any business activity or compete with any Person
or prohibiting or limiting the ability of any Person to compete with the
Company or any Subsidiary;
(vi) partnership, joint venture, shareholders' or other similar
Contracts with any Person;
17
<PAGE>
(vii) Contract relating to Indebtedness of the Company or any
Subsidiary in excess of $500,000;
(viii) lease with a remaining term of greater than one year from
the date of this Agreement that involves the payment or potential
payment, pursuant to the terms of such lease, of more than $50,000
annually;
(ix) Contract (including for this purpose any Contract to which,
to the Knowledge of the Company, the Company has ever been a party)
relating to (A) the disposition or acquisition of any real property,
product lines, or businesses, and (B) any merger or other business
combination;
(x) Contract (other than Benefit Plans) that (A) involves the
payment or potential payment, pursuant to the terms of any such
Contract, by or to the Company or any Subsidiary of more than $150,000
annually and (B) cannot be terminated by the Company within sixty (60)
days after giving notice of termination without resulting in any
material cost or penalty to the Company or any Subsidiary.
(b) Except as set forth in SECTION 3.08(B) OF THE COMPANY
LETTER, to the Knowledge of the Company, each Contract required to be
disclosed in SECTION 3.08(A) OF THE COMPANY LETTER pursuant to clause (x) of
paragraph (a) above, is in full force and effect and constitutes a legal,
valid and binding agreement, enforceable in accordance with its terms, of each
party thereto. Except as disclosed in the 1993 10-K or in SECTION 3.08(B) OF
THE COMPANY LETTER, neither the Company nor any of its Subsidiaries,
18
<PAGE>
nor to the Knowledge of the Company any other party thereto, is in breach or
violation of, or in default in the performance or observance of any term or
provision of, and no event has occurred which, with notice or lapse of time or
both, could be reasonably expected to result in a default or right of
termination under, (i) the certificates of incorporation or bylaws (or other
comparable charter documents) of the Company or any of its Subsidiaries or
(ii) any Contract to which the Company or any of its Subsidiaries is a party
or by which the Company or any of its Subsidiaries or any of their respective
assets or properties is bound, except in the case of clause (ii) for breaches,
violations, defaults and terminations which, individually or in the aggregate,
are not having and could not be reasonably expected to have a Material Adverse
Effect.
(c) SECTION 3.08(C) OF THE COMPANY LETTER (i) contains a true
and complete list and description of each of the Company Benefit Plans, (ii)
identifies each of the Company Benefit Plans that is a Qualified Plan, and
(iii) identifies each Company Benefit Plan which is, or at any time during the
six-year period preceding the date of this Agreement was, a Defined Benefit
Plan. Neither the Company nor any of its Subsidiaries has scheduled or agreed
upon future increases of benefit levels (or creations of new benefits) with
respect to any Company Benefit Plan, and no such increases or creation of
benefits have been proposed, made the subject of representations to employees
or requested or demanded by employees under circumstances which make it
reasonable to expect that such increases will be granted.
19
<PAGE>
(d) Except as disclosed in the Company SEC Reports or as set
forth in SECTION 3.08(D) OF THE COMPANY LETTER:
(i) neither the Company, any of its Subsidiaries, nor any ERISA
Affiliate has at any time contributed to or been obligated to contribute
to any Multiemployer Plan;
(ii) each of the Company Benefit Plans is, and its administration
is and has been since inception, in all material respects in compliance
with, and neither the Company nor any of its Subsidiaries has received
any claim or notice that any Company Benefit Plan is not in compliance
with, all applicable laws and orders and prohibited transactions
exemptions, including the requirements of ERISA, the Code, the Age
Discrimination in Employment Act and the Americans with Disabilities
Act. Each Qualified Plan is qualified under Section 401(a) of the Code,
and has received a favorable determination from the Internal Revenue
Service regarding such qualification;
(iii) to the Knowledge of the Company, no event has occurred, and
there exists no condition or set of circumstances in connection with any
Company Benefit Plan, under which the Company or any of its Subsidiaries
could reasonably be expected to be subject to any risk of material
liability under Section 409 of ERISA, Section 502(i) of ERISA or Section
4975 of the Code;
(iv) to the Knowledge of the Company, no event has occurred and
there exists no condition or set of circumstances that could reasonably
be expected to result
20
<PAGE>
in, and no transaction contemplated by this Agreement will result in,
liability under Section 302(c)(11), 4062, 4063, 4064 or 4069 of ERISA
with respect to the Company, any of its Subsidiaries, any ERISA
Affiliate or Parent. No "reportable event" within the meaning of
Section 4043 of ERISA has occurred with respect to any Defined Benefit
Plan. No accumulated funding deficiency, as defined in Section 412 of
the Code, whether or not waived, exists with respect to any Defined
Benefit Plan; and
(v) no employer securities, employer real property or other
employer property is included in the assets of any Company Benefit Plan.
(e) SECTION 3.08(E) OF THE COMPANY LETTER lists all Company
Employee Options (including in each case the holder, exercise price, date of
grant and number of shares covered thereby) that were outstanding as of
February 4, 1994. No additional Company Employee Options have been granted or
otherwise become outstanding since such date. From and after the Effective
Date, all outstanding Company Employee Options shall cease to be exercisable.
3.09 INTELLECTUAL PROPERTY; INFRINGEMENT OF PATENTS, TRADEMARKS,
ETC. The Company and its Subsidiaries have all right, title and interest in,
or a valid and binding license to use, all Intellectual Property (as defined
below) individually or in the aggregate material to the conduct of the
businesses of the Company and its Subsidiaries taken as a whole. SECTION
3.09 OF THE COMPANY LETTER contains a true and correct list of each
21
<PAGE>
license to use Intellectual Property held by or granted by the Company or any
of its Subsidiaries. To the Knowledge of the Company, neither the Company nor
any Subsidiary of the Company is in default (or with the giving of notice or
lapse of time or both, would be in default) in any material respect under any
such license, the Intellectual Property held by, or licensed by or to, the
Company or any of its Subsidiaries is not being infringed by any third party,
and neither the Company nor any Subsidiary of the Company is infringing any
Intellectual Property of any third party, except for such defaults and
infringements which, individually or in the aggregate, are not having and
could not be reasonably expected to have a Material Adverse Effect. Except as
disclosed in SECTION 3.09 OF THE COMPANY LETTER, no Intellectual Property
relating to products or processes researched and/or developed by the Company
or any of its Subsidiaries has been or is required to be transferred or
conveyed other than by means of a non-exclusive license to the direct or
indirect customers of the Company or any of its Subsidiaries which funded or
directed such research and/or development, and SECTION 3.09 OF THE COMPANY
LETTER sets forth a description of the Intellectual Property required to be
so transferred or conveyed. For purposes of this Agreement, "INTELLECTUAL
PROPERTY" means patents and patent rights, trade secrets, trademarks and
trademark rights, trade names and trade name rights, service marks and service
mark rights, service names and service name rights, copyright and copyright
rights and other proprietary intellectual property rights (excluding any
commercially available software) and all
22
<PAGE>
pending applications for and registrations of any of the foregoing.
3.10 NO BREACH OF STATUTE OR CONTRACT; GOVERNMENTAL
AUTHORIZATIONS; REQUIRED CONSENTS. (a) The execution and delivery of this
Agreement do not, and the execution, delivery, and consummation of the Plan of
Merger will not, and subject to (i) obtaining the requisite approvals
specified in paragraph (c) below and in SECTION 3.10(A) OF THE COMPANY LETTER
and (ii) the expiration of the applicable waiting period under the
Hart-Scott-Rodino Act, the consummation of the transactions contemplated
hereby and thereby, and the continued conduct of the respective businesses of
the Company and its Subsidiaries following the Effective Date in substantially
the same manner as such businesses are currently conducted, will not, conflict
with, result in a violation or breach of, constitute (with or without notice
or lapse of time or both) a default under, result in or give to any Person any
right of payment or reimbursement, termination, cancellation, modification or
acceleration of, or result in the creation or imposition of any Lien upon any
of the assets or properties of the Company or any of its Subsidiaries under,
any of the terms, conditions or provisions of (x) the Articles of
Incorporation or Bylaws of the Company or any of its Subsidiaries, (y) any
statute, law, rule, regulation or ordinance (together, "LAWS"), or any
judgment, decree, order, writ, permit or license (together, "ORDERS"), of
any court, tribunal, arbitrator, authority, agency, commission, official or
other instrumentality of the United States or any foreign country or
23
<PAGE>
any domestic or foreign state, county, city or other political subdivision (a
"GOVERNMENTAL OR REGULATORY AUTHORITY"), applicable to the Company or any of
its Subsidiaries or any of their respective assets or properties, or (z) any
note, bond, mortgage, security agreement, indenture, license, franchise,
permit, concession, contract, lease or other instrument, obligation or
agreement of any kind (together, "CONTRACTS"), to which the Company or any
of its Subsidiaries is subject or is a party or by which the Company or any of
its Subsidiaries or any of their assets or properties may be bound or affected
and, in the case of each of the foregoing, which singly or in the aggregate
could have a Material Adverse Effect.
(b) The Company and each of its Subsidiaries is in compliance
with all Environmental Laws and all other Laws and Orders, the failure to
comply with which, and has obtained all Environmental Permits, the failure to
obtain which, singly or in the aggregate, has had or is reasonably expected to
have a Material Adverse Effect, and none of them has received any claim or
notice to the contrary. Without limitation as to the foregoing, neither the
Company nor any of its Subsidiaries, nor any of their respective agents or
representatives, have taken or omitted to take any action, which constitutes a
violation of the Foreign Corrupt Practices Act of 1977, as amended, 15 U.S.C.
section 78dd or any Law prohibiting compliance with what is commonly known as
the "Arab boycott."
(c) Except for (i) applicable requirements of the Securities
Exchange Act and the Hart-Scott-Rodino Act, (ii) the
24
<PAGE>
filing of the Schedule 14D-9 and the Proxy Statement with the SEC pursuant to
the Securities Exchange Act, (iii) if required by applicable law, the Company
Shareholders' Approval, (iv) the filing of the Articles of Merger and other
appropriate merger documents required by the WBCA with the Secretary of State
of the State of Washington and appropriate documents with the relevant
authorities of other states in which the Company and Acquisition Sub are
qualified to do business, and (v) other approvals and filings specified in
SECTION 3.10(C) OF THE COMPANY LETTER, neither the Company nor any of its
Subsidiaries is required to submit any notice, report or other filing with, or
to obtain any consent or approval of or from, any Governmental or Regulatory
Authority or other Person in order for the Company to consummate the
transactions contemplated by this Agreement and the Plan of Merger, or in
order for the Company and its Subsidiaries to conduct their respective
businesses following the Effective Date in substantially the same manner as
such businesses are currently conducted.
3.11 INVESTIGATIONS; LITIGATION. (a) There are, to the
Knowledge of the Company, no pending or threatened investigations, reviews or
inquiries by any Governmental or Regulatory Authority with respect to the
Company or any Subsidiary or with respect to the activities of any present or
former officer, director or employee of the Company.
(b) Except as described in SECTION 3.11(B) OF THE COMPANY
LETTER, (i) there are no actions or proceedings pending or, to the Knowledge
of the Company, threatened against the
25
<PAGE>
Company or any Subsidiary, which if adversely determined could, individually
or in the aggregate, have a Material Adverse Effect, or, to the Knowledge of
the Company, any facts or circumstances that could reasonably be expected to
give rise to any such actions or proceedings, (ii) there are no outstanding
domestic or foreign judgments, decrees or orders against the Company or any
Subsidiary enjoining any of them in respect of, or the effect of which is to
prohibit, any business practice or the acquisition of any property or the
conduct of business in any area, which judgments, decrees and orders,
individually or in the aggregate, have had or could have a Material Adverse
Effect, and (iii) there are no actions pending, or to the Knowledge of the
Company, threatened against the directors or any director of the Company
alleging a breach of such directors' or director's fiduciary duties.
3.12 AUTHORIZATION OF AGREEMENT. The Company has full
corporate power and authority to enter into this Agreement and the Plan of
Merger and, if and to the extent required by applicable law, subject (in the
case of the Plan of Merger) to obtaining the Company Shareholders' Approval
(as defined in SECTION 5.04), to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Agreement and the Plan of Merger and, if
and to the extent required by applicable law, subject (in the case of the Plan
of Merger) to the Company Shareholders' Approval, the performance, and the
consummation by the Company of the transactions contemplated
26
<PAGE>
hereby and thereby have been duly and validly authorized and approved by the
Board of Directors of the Company, the Board of Directors of the Company has
recommended approval of the Plan of Merger by the shareholders of the Company
and directed that the Plan of Merger be submitted to the shareholders of the
Company for their consideration, and no other corporate proceedings on the
part of the Company or its shareholders are necessary to authorize the
execution, delivery and performance of this Agreement and the Plan of Merger
by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby. This Agreement has been duly and validly
executed and delivered by the Company and, if and to the extent required by
applicable law, subject (in the case of the Plan of Merger) to the obtaining
of the Company Shareholders' Approval, constitutes, and the Plan of Merger,
when duly and validly executed and delivered by the Company as contemplated
hereby, will constitute, the legal, valid and binding obligations of the
Company enforceable against the Company in accordance with their terms, except
as enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
3.13 SCHEDULE 14D-9 AND OTHER FILINGS. (a) The Schedule 14D-9
to be filed by the Company with the SEC will not, at the date it is filed with
the SEC and first published, sent or
27
<PAGE>
given to shareholders, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
are made, not misleading. The Schedule 14D-9 will comply as to form in all
material respects with the requirements of the Securities Exchange Act.
(b) Neither the information supplied or to be supplied in writing
by or on behalf of the Company for inclusion, nor the information incorporated
by reference from documents filed by the Company or any of its Subsidiaries
with the SEC, in the Offer Documents or any document to be filed by Parent or
Acquisition Sub with the SEC or any other Governmental or Regulatory Authority
in connection with the Offer will on the date of such filing or at the date
they are filed with the SEC and first published, sent or given to
shareholders, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they are
made, not misleading.
3.14 BROKER'S OR FINDER'S FEES, ETC. Except as disclosed in
SECTION 3.14 OF THE COMPANY LETTER, no agent, broker investment banker, or
other Person acting on behalf of the Company or any of its Subsidiaries or
under the authority of any of them is or will be entitled, directly or
indirectly, to any broker's or finder's fee or any other commission or similar
fee
28
<PAGE>
from any of the parties hereto in connection with any of the transactions
contemplated herein.
3.15 1993 PROXY STATEMENT. Since the date of the proxy
statement of the Company mailed to its shareholders with respect to its 1993
annual meeting of shareholders, there has not been any transaction,
relationship or indebtedness which would have been required to have been
disclosed in such proxy statement by Item 404 of Regulation S-K promulgated by
the SEC if it had occurred or been in existence prior to the date of such
proxy statement.
3.16 INSURANCE. The Company has made available to Parent
prior to the execution of this Agreement all material liability, property,
workers' compensation, directors' and officers' liability and other insurance
policies currently in effect that insure the business, operations, properties,
assets, directors or employees of the Company or any of its Subsidiaries.
3.17 VOTE REQUIRED. Unless the Merger may be consummated in
accordance with Section 23B.11.040 of the WBCA as contemplated by SECTION
5.04(B), the affirmative vote of the holders of record of at least sixty six
and two-thirds percent (66-2/3%) of the outstanding shares of Company Common
Stock with respect to the approval of the Plan of Merger is the only vote of
the holders of any class or series of the capital stock of the Company
required to authorize and approve the consummation of the Merger and the other
transactions contemplated hereby.
29
<PAGE>
3.18 OPINION OF FINANCIAL ADVISOR. The Company has received
the opinion of Morgan Stanley & Co. Incorporated dated the date hereof, to the
effect that, as of the date hereof, the consideration to be received in the
Merger by the holders of shares of Company Common Stock is fair from a
financial point of view to such holders.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent and Acquisition Sub represent and warrant to the Company as
follows:
4.01 ORGANIZATION, ETC. Parent and Acquisition Sub are
corporations duly organized, validly existing and in good standing under the
laws of Delaware and the State of Washington, respectively. Each of Parent
and Acquisition Sub has all requisite corporate power and authority to own,
operate and lease its properties and assets and to carry on its business as
now being conducted. Copies of the charters and bylaws of each of Parent and
Acquisition Sub have heretofore been delivered to the Company, and such copies
are accurate and complete as of the date hereof.
4.02 NO BREACH OF STATUTE OR CONTRACT; GOVERNMENTAL
AUTHORIZATIONS; REQUIRED CONSENTS. (a) The execution and delivery of this
Agreement by Parent and Acquisition Sub do not, and the execution and delivery
of the Plan of Merger by Acquisition Sub will not, and subject to the
expiration of the applicable waiting period under the Hart-Scott-Rodino Act,
the
30
<PAGE>
transactions contemplated hereby and thereby will not, result in a violation
or breach of, constitute (with or without notice or lapse of time or both) a
default under, result in or give any Person any right of payment or
reimbursement, termination, cancellation, modification or acceleration of, or
result in the creation or imposition of any Lien upon any of the assets or
properties of Parent or Acquisition Sub under any of the terms, conditions or
provisions of (i) any provision of the Certificate or Articles of
Incorporation or Bylaws of Parent or Acquisition Sub, (ii) any Law or Order of
any Governmental or Regulatory Authority applicable to Parent or any of its
Subsidiaries, or any of their respective assets and properties, or (iii) any
Contract to which Parent or any of its Subsidiaries is a party or to which any
of its or their assets or properties is subject and which is material to the
financial condition of Parent and its Subsidiaries taken as a whole.
(b) Except for (i) applicable requirements of the
Hart-Scott-Rodino Act, (ii) the filing of the Articles of Merger and other
appropriate merger documents required by the WBCA with the Secretary of State
of the State of Washington and appropriate documents with the relevant
authorities of other states in which the Company and its Subsidiaries are
qualified to do business, (iii) such reports under Section 13(a) of the
Securities Exchange Act as may be required in connection with this Agreement
and the transactions contemplated hereby, (iv) applicable requirements of
Section 23B.19.040 of the WBCA, (v) the filing of the Schedule
31
<PAGE>
14D-1 with the SEC pursuant to the Securities Exchange Act, and (vi) the
requisite approvals by Parent, as Acquisition Sub's sole shareholder, neither
Parent nor Acquisition Sub is required to submit any notice, report or other
filing with, or obtain any consent or approval of or from, any Governmental or
Regulatory Authority or other Person in order for Parent or Acquisition Sub to
consummate the Offer and the Merger as contemplated by this Agreement and the
Plan of Merger.
4.03 AUTHORIZATION OF AGREEMENT. Parent has full corporate
power and authority to enter into this Agreement, and Acquisition Sub has full
corporate power and authority to enter into this Agreement and the Plan of
Merger, and, in each case, to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement by Parent, and the
execution and delivery of this Agreement and the Plan of Merger by Acquisition
Sub, have been duly and validly authorized and approved by the Boards of
Directors of Parent and Acquisition Sub, respectively. This Agreement has
been duly and validly executed and delivered by Parent and Acquisition Sub and
constitutes, and the Plan of Merger, when duly and validly executed and
delivered by Acquisition Sub (subject to the approval of such execution and
delivery by Parent as the sole shareholder of Acquisition Sub) will
constitute, the legal, valid and binding obligations of Parent and Acquisition
Sub, as the case may be, enforceable against Parent and Acquisition Sub in
accordance with its terms, except as enforceability may be
32
<PAGE>
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
4.04 BROKER'S OR FINDER'S FEES, ETC. Except as disclosed in
SECTION 4.04 OF THE PARENT LETTER, no agent, broker, investment banker, or
other Person acting on behalf of Parent or any of its Subsidiaries or under
the authority of any of them is or will be entitled, directly or indirectly,
to any broker's or finder's fee or any other commission or similar fee from
any of the parties hereto in connection with any of the transactions
contemplated herein.
4.05 INFORMATION SUPPLIED. (a) The Offer Documents and any
other documents to be filed by Parent or Acquisition Sub with the SEC or any
other Governmental or Regulatory Authority in connection with the Offer or the
Merger and the other transactions contemplated hereby will not, on the date of
its filing or, with respect to the Offer Documents, on the date they are filed
with the SEC and first published, sent or given to shareholders of the
Company, as the case may be, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they are made, not misleading, except that no representation is made by
Parent or Acquisition Sub with respect to information
33
<PAGE>
supplied in writing by or on behalf of the Company expressly for inclusion
therein and information incorporated by reference therein from documents filed
by the Company or any of its Subsidiaries with the SEC. The Offer Documents
and any other such documents filed by Parent or Acquisition Sub with the SEC
under the Securities Exchange Act will comply as to form in all material
respects with the requirements of the Securities Exchange Act.
(b) Neither the information supplied or to be supplied in writing
by or on behalf of Parent or Acquisition Sub for inclusion, nor the
information incorporated by reference from documents filed by Parent or any of
its Subsidiaries with the SEC, in the Schedule 14D-9, will on the date it is
filed with the SEC and first published, sent or given to shareholders of the
Company, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made,
not misleading.
4.06 CAPITALIZATION OF ACQUISITION SUB. The authorized capital
stock of Acquisition Sub consists of 50,000 shares of common stock having no
par value, 1,000 of which shares are duly and validly issued and outstanding,
fully paid and nonassessable. Acquisition Sub has not and does not conduct
any business operations.
34
<PAGE>
4.07 OWNERSHIP OF COMPANY STOCK. As of the date hereof,
neither Parent, Acquisition Sub nor any other Subsidiary of Parent, owns any
shares of Company Common Stock.
4.08 FINANCING. Acquisition Sub will have as of the Closing
Date, sufficient funds and/or credit arrangements to acquire all the
outstanding shares of Company Common Stock in the Offer and the Merger in
accordance with this Agreement and to make all other necessary payments of
fees and expenses in connection with the transactions contemplated by this
Agreement.
ARTICLE V
CERTAIN AGREEMENTS
5.01 OPERATION OF BUSINESS OF THE COMPANY. At all times between
the date of this Agreement and the Effective Time:
(a) The Company will (i) use its best efforts to preserve
substantially intact the business organization and reputation of the Company
and its Subsidiaries, to maintain the assets and properties of the Company and
its Subsidiaries in good working order and condition, ordinary wear and tear
excepted, to maintain insurance with respect to assets and businesses of the
Company and its Subsidiaries in such amounts and against such risks and losses
as are currently in effect, and to preserve the present relationships of the
Company and its Subsidiaries with Persons having significant business
relations therewith, and (ii) use reasonable efforts to keep available the
services of the present officers and employees of the Company and its
Subsidiaries.
35
<PAGE>
(b) The Company and its Subsidiaries shall comply in all
material respects with all Laws and Orders of all Governmental or Regulatory
Authorities applicable to them, and shall conduct their respective businesses
only in the ordinary course consistent with past practice and, by way of
amplification and not limitation, neither the Company nor any of its
Subsidiaries will, except as expressly contemplated by this Agreement or as
expressly set forth in SECTION 5.01(C) OF THE COMPANY LETTER, without the
prior written consent of Parent:
(i) issue or sell or commit to issue or sell any capital stock of
or other ownership interest in the Company or any of its Subsidiaries
other than pursuant to exercise of outstanding Company Employee Options
in accordance with their terms;
(ii) grant or commit to grant any Options, warrants, convertible
securities or other rights to subscribe for, purchase or otherwise
acquire any shares of capital stock of or other ownership interest in
the Company or any of its Subsidiaries;
(iii) declare, set aside or pay any dividend or distribution with
respect to the capital stock of the Company or any of its Subsidiaries
not wholly owned;
(iv) directly or indirectly redeem, purchase or otherwise acquire
or commit to acquire any capital stock of the Company or any Option with
respect thereto;
36
<PAGE>
(v) split, combine, reclassify or take similar action with
respect to any of the its capital stock or issue or authorize or propose
the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock;
(vi) adopt a plan of complete or partial liquidation or resolutions
providing for or authorizing such liquidation or a dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization;
(vii) amend or propose to amend the Articles of Incorporation,
Bylaws or other governing instruments of the Company or any of its
Subsidiaries;
(viii) except in the ordinary course of its business consistent with
past practice, enter into, amend or terminate any employment, management
or consulting agreement, or any collective bargaining agreement, with
any Person;
(ix) (A) incur any Indebtedness other than in the ordinary course
of its business consistent with past practice, or (B) voluntarily
purchase, cancel, prepay or otherwise provide for a complete or partial
discharge in advance of a scheduled repayment date with respect to, or
waive any right under, any Indebtedness other than in the ordinary
course of its business consistent with past practice;
37
<PAGE>
(x) acquire (by merging or consolidating with, or by purchasing a
substantial equity interest in or a substantial portion of the assets
of, or by any other manner) any business or any corporation,
partnership, association or other business organization or division
thereof or otherwise acquire or enter into any agreement relating to
such an acquisition;
(xi) except to the extent required by applicable law, (A) make or
permit to be made any material change in (i) any pricing, marketing,
purchasing, investment, accounting, financial reporting, inventory,
credit, allowance or tax practice or policy or (ii) any method of
calculating any bad debt, contingency or other reserve for accounting,
financial reporting or tax purposes or (B) make any material tax
election or settle or compromise any material income tax liability with
any Governmental or Regulatory Authority;
(xii) other than sales of products and inventory in the ordinary
course of its business consistent with past practice, sell, lease,
license, grant any security interest in or otherwise dispose of or
encumber any of its assets or properties, including, without limitation,
any of its Intellectual Property;
(xiii) make any representation or promise, oral or written, to any
officer, employee or consultant of the Company or any of its
Subsidiaries concerning any Company Benefit Plan, or concerning benefits
to be provided to such
38
<PAGE>
Person following the Effective Time, except, in each case, for
statements consistent with the terms of any Company Benefit Plan (as
constituted on the date hereof) and for statements as to the rights or
accrued benefits of any such Person under the terms of any Company
Benefit Plan;
(xiv) make any increase in salary, wages or other compensation of
(a) any present or former director, officer or consultant of the Company
or any of its Subsidiaries or (b) any employee of the Company or any of
its Subsidiaries other than in the ordinary course of its business
consistent with past practice;
(xv) establish or modify (A) targets, goals, pools or similar
provisions in respect of any fiscal year under any Company Benefit Plan,
employment-related agreement or other employee compensation arrangement
or (B) salary ranges, increase guidelines or similar provisions in
respect of any Company Benefit Plan, employment-related agreement or
other employee compensation arrangement;
(xvi) adopt, enter into, amend, modify or terminate (partially or
completely) any Company Benefit Plan except to the extent required by
applicable law or in the ordinary course of its business consistent with
past practice;
(xvii) enter into, amend or modify any Contract with any Person
containing any provision or covenant prohibiting or limiting the ability
of the Company or any Subsidiary to
39
<PAGE>
engage in any business or limiting the ability of any Person to compete
with the Company or any Subsidiary;
(xviii) enter into, amend or modify any Contract, or engage in any new
transaction outside the ordinary course of business consistent with past
practice or not on an arm's length basis, with any shareholder or
affiliate of the Company or any of its Subsidiaries;
(xix) enter into, amend in any material respect, or terminate any
Contract, except in the ordinary course of its business consistent with
past practice.
(xx) make any capital expenditures or commitments for additions
to plant, property or equipment constituting capital assets which
individually exceed $50,000, or in the aggregate exceed $250,000;
(xxi) make any change in the lines of business in which it
participates or is engaged; or
(xxii) enter into any contract, agreement, commitment or arrangement
to do or engage in any of the foregoing.
(c) The Company shall confer on a regular and frequent basis with
Parent upon the request of Parent with respect to its business and operations
and other matters relevant to the Merger, and shall promptly advise Parent,
orally and, if requested by Parent, in writing, of any change or event,
including, without limitation, any complaint, investigation or hearing by any
Governmental or Regulatory Authority (or communication indicating the same may
be contemplated) or the institution or threat of any
40
<PAGE>
litigation or investigation, in each case, having, or which, insofar as can be
reasonably foreseen, could have, a Material Adverse Effect. In order to
facilitate timely liaison between the Company and Parent, Parent may appoint a
representative, satisfactory to the chief executive officer of the Company,
who would possess full authority to speak for Parent with respect to the
operation of the business of the Company and act as Parent's advisor to the
Company with respect thereto.
5.02 NO SOLICITATIONS. The Company and its Subsidiaries will
not, directly or indirectly, through any officer, director, agent or
otherwise, (i) initiate, solicit or encourage the submission of proposals or
offers from any Person (a "POTENTIAL ACQUIROR") relating to any Acquisition
Transaction (as defined below), or (ii) participate in any negotiations
regarding, or furnish to any Potential Acquiror any information with respect
to any of the foregoing, or (iii) otherwise cooperate in any way with, or
assist or participate in, facilitate or encourage any effort or attempt by any
Potential Acquiror to seek to do any of the foregoing. The Company shall
promptly notify Parent orally (and in writing if requested) of any proposal,
expression of interest or offer relating to an Acquisition Transaction,
including the terms and conditions thereof and of any amendments or revisions
thereto and the identity of the Potential Acquiror. The Company shall not
terminate, make any changes in, or waive any rights under any Contract to
which it is a party, to the extent such Contract
41
<PAGE>
governs (i) the conduct of another party with respect to purchases of shares
of Company Common Stock or the making of proposals for a business combination
with the Company, or (ii) the right of another party to make use of
information relating to the Company which is not publicly available. The
Company shall use its best efforts to enforce the terms of any such Contract.
The Company will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any Acquisition Transaction. Nothing contained herein shall
be construed to prohibit the Company or its Board of Directors from (i) taking
any actions or permitting any events described above, but only to the extent
the Board of Directors shall conclude in good faith on advice of independent
counsel that such action should be taken in order for the Board of Directors
of the Company to act in a manner which is consistent with its fiduciary
obligations under applicable law or (ii) taking any position necessary in
order to comply with the filing and disclosure requirements of Rules 14d-9 and
14e-2(a). The Board of Directors of the Company shall provide to Parent
reasonable notice, orally (and in writing if requested), of any action
contemplated by the next preceding sentence and shall continue to consult with
Parent after taking such action. As used in this Agreement, "ACQUISITION
TRANSACTION" means any merger, consolidation or other business combination
involving the Company or any of its Subsidiaries, or any acquisition in any
manner of all or a substantial portion of the equity of, or all
42
<PAGE>
or a substantial portion of the assets of, the Company and its Subsidiaries
taken as a whole, whether for cash, securities or any other consideration or
combination thereof other than pursuant to the transactions contemplated by
this Agreement.
5.03 ACCESS TO INFORMATION; CONFIDENTIALITY. (a) The Company
shall, and shall cause its Subsidiaries to, throughout the period from the
date hereof to the Effective Time, (i) provide Parent and its Representatives,
and any Person or entity who is considering providing financing to Parent in
connection with the Offer or the Merger and its Representatives, with full
access, upon reasonable prior notice and during normal business hours, to all
officers, employees, agents and accountants of the Company and its
Subsidiaries and their respective assets, properties, books and records, but
only to the extent that such access does not unreasonably interfere with the
business and operations of the Company and its Subsidiaries, and (ii) furnish
promptly to such Persons (x) a copy of each report, statement, schedule and
other document filed or received by the Company or any of its Subsidiaries
pursuant to the requirements of federal or state securities laws or filed with
any other Governmental or Regulatory Authority, and (y) all other information
and data (including, without limitation, copies of Contracts, Company Employee
Benefit Plans and other books and records) concerning the business and
operations of the Company and its Subsidiaries as Parent or any of such other
Persons reasonably may request. No investigation pursuant to this paragraph
or otherwise shall
43
<PAGE>
affect any representation or warranty contained in this Agreement or any
condition to the obligations of the parties hereto.
(b) Parent agrees that all information provided under this
SECTION 5.03 will be subject to the terms and conditions of the
Confidentiality Agreement dated December 17, 1993 between the Company and
Parent.
5.04 SHAREHOLDER APPROVAL. (a) If required by applicable law
in order to consummate the Merger, the Company shall submit the Plan of Merger
for the approval of its shareholders (the "COMPANY SHAREHOLDERS' APPROVAL")
at the Special Meeting of Shareholders which shall be called, convened and
held as soon as practicable, and shall solicit proxies from its shareholders
authorizing Persons named therein to vote in favor of such proposal. The
Board of Directors of the Company shall recommend a shareholder vote in favor
of the approval of the Plan of Merger. The Parent shall cause Acquisition Sub
to approve the Plan of Merger.
(b) Notwithstanding the foregoing, in the event that Acquisition
Sub shall acquire at least 90 percent of the then outstanding shares of
Company Common Stock, the parties hereto shall, subject to ARTICLE VI, at
the request of Acquisition Sub take all necessary and appropriate action to
cause the Merger to become effective in accordance with Section 23B.11.040 of
the WBCA, as soon as reasonably practicable after such acquisition, without a
meeting of the shareholders of the Company.
44
<PAGE>
5.05 THE COMPANY EMPLOYEE OPTIONS. Immediately prior to the
consummation of the Offer, each holder of then outstanding Company Employee
Options (whether or not then exercisable) will be entitled to receive from the
Company, and shall receive, in settlement of each Company Employee Option a
cash payment from the Company in an amount equal to the product of (i) the
difference between (1) Per Share Amount and (2) the exercise price per share
for the purchase of Company Common Stock under such Company Employee Option,
and (ii) the number of shares of Company Common Stock covered by such Company
Employee Option.
5.06 PROXY STATEMENT. If required by applicable law, the
Company shall prepare and file with the SEC a proxy statement or information
statement, as the case may be, relating to the Special Meeting of Shareholders
contemplated in SECTION 5.04, to be sent to shareholders of the Company, as
amended or supplemented from time to time (as so amended or supplemented, the
"PROXY STATEMENT") as soon as reasonably practicable after the consummation
of the Offer, and shall use its best efforts to have the Proxy Statement
cleared by the SEC. If at any time prior to the Effective Time any event
shall occur that should be set forth in an amendment of or a supplement to the
Proxy Statement, the Company shall prepare and file with the SEC such
amendment or supplement as soon thereafter as is reasonably practicable.
Parent, Acquisition Sub and the Company shall cooperate with each other in the
preparation of the Proxy Statement, and the Company shall notify Parent of the
receipt of
45
<PAGE>
any comments of the SEC with respect to the Proxy Statement and of any
requests by the SEC for any amendment or supplement thereto or for additional
information, and shall provide to Parent promptly copies of all correspondence
between the Company or any representative of the Company and the SEC with
respect to the Proxy Statement. The Company shall give Parent and its counsel
the opportunity to review the Proxy Statement and all responses to requests
for additional information by and replies to comments of the SEC before their
being filed with, or sent to, the SEC. Each of the Company, Parent and
Acquisition Sub agrees to use its best efforts, after consultation with the
other parties hereto, to respond promptly to all such comments of and requests
by the SEC and to cause the Proxy Statement to be mailed to the holders of
Company Common Stock entitled to vote at the Special Meeting of Shareholders
at the earliest practicable time.
5.07 REGULATORY AND OTHER APPROVALS. Subject to the terms
and conditions of this Agreement and without limitation to the provisions of
SECTIONS 5.05 and 5.06, each of the Company and Parent will proceed
diligently and in good faith and will use all commercially reasonable efforts
to do, or cause to be done, all things necessary, proper or advisable to, as
promptly as practicable, (a) obtain all consents, waivers, approvals or
actions of, make all filings with and give all notices to Governmental or
Regulatory Authorities or any other public or private third parties required
of Parent, the Company or any of their Subsidiaries to consummate the Offer,
the Merger and the
46
<PAGE>
other matters contemplated hereby, and (b) provide such other information and
communications to such Governmental or Regulatory Authorities or other public
or private third parties as the other party hereto or such Governmental or
Regulatory Authorities or other public or private third parties may reasonably
request in connection therewith. In addition to and not in limitation of the
foregoing, each of the parties will (x) take promptly all actions necessary to
make the filings required of Parent and the Company or their affiliates under
the Hart-Scott-Rodino Act, (y) comply at the earliest practicable date with
any request for additional information received by such party or its
affiliates from the Federal Trade Commission (the "FTC") or the Antitrust
Division of the Department of Justice (the "ANTITRUST DIVISION") pursuant to
the Hart-Scott-Rodino Act, and (z) cooperate with the other party in
connection with such party's filings under the Hart-Scott-Rodino Act and in
connection with resolving any investigation or other inquiry concerning the
Offer or the Merger or the other matters contemplated by this Agreement
commenced by either the FTC or the Antitrust Division or state attorneys
general.
5.08 NOTICE OF DISSENTING SHARES. The Company shall (a)
promptly notify Parent of the Company's receipt of all written demands from
Dissenting Shareholders pursuant to Chapter 23B.13 of the WBCA for appraisal
of shares in connection with the Merger, (b) not enter into any negotiations
with Dissenting Shareholders without prior consultation with Parent and (c)
not
47
<PAGE>
enter into any settlement with, or make or agree to make any payment to, such
Dissenting Shareholders without the prior written consent of Parent.
5.09 AVAILABILITY OF FUNDS. Immediately prior to the Effective
Time when all conditions to its obligations to effect the Merger have been
satisfied, Acquisition Sub will deposit, or cause to be deposited, with the
Exchange Agent sufficient immediately available funds in lawful money of the
United States to effect the Merger and carry out this Agreement and the Plan
of Merger substantially in accordance with the terms hereof and thereof.
5.10 PAYMENT OF REAL ESTATE EXCISE TAXES. The Company and
Parent shall execute such affidavits and other documents as may be required by
the State of Washington Department of Revenue, and the Company shall pay
immediately following the consummation of the Offer the Washington real estate
excise tax payable upon transfer of a controlling interest of a corporation
owning real estate in the State of Washington, if any.
5.11 RETIREMENT PLAN CONTRIBUTION. If not previously made, the
Parent shall make or cause the Company to make, when due, the employer
contributions to the ELDEC Corporation Retirement Plan and Trust for fiscal
year 1994 and the employer matching contributions under the Company's Deferred
Income Plan and Trust (401(k)) for fiscal year 1994, which shall be in an
amount not to exceed the minimum amount required by law or by the applicable
plan document.
48
<PAGE>
5.12 EXPENSES. Except as set forth in SECTION 7.02, whether
or not the Offer or the Merger is consummated, all costs and expenses incurred
in connection with this Agreement and the transactions contemplated hereby and
thereby shall be paid by the party incurring such cost or expense.
5.13 FULFILLMENT OF CONDITIONS. Subject to the terms and
conditions of this Agreement, each of Parent and the Company will take or
cause to be taken all commercially reasonable steps necessary or desirable and
proceed diligently and in good faith to satisfy each condition to the other's
obligations contained in this Agreement and Annex A attached hereto and to
consummate and make effective the transactions contemplated by this Agreement,
and neither Parent nor the Company will, nor will it permit any of its
Subsidiaries to, take or fail to take any action that could be reasonably
expected to result in the nonfulfillment of any such condition.
ARTICLE VI
CONDITIONS OF MERGER
6.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligation of each party to effect the Merger is
subject to the fulfillment, at or prior to the Closing, of each of the
following conditions:
(a) SHAREHOLDER APPROVAL. Unless the Merger may be consummated
in accordance with Section 23B.11.040 of the WBCA as contemplated by SECTION
5.04(B), the Plan of Merger shall have
49
<PAGE>
been approved by the requisite vote of the shareholders of the Company under
the WBCA and the Company's articles of incorporation.
(b) NO INJUNCTIONS OR RESTRAINTS. No court of competent
jurisdiction or other competent Governmental or Regulatory Authority shall
have enacted, issued, promulgated, enforced or entered any Law or Order
(whether temporary, preliminary or permanent) which is then in effect and has
the effect of making illegal or otherwise restricting, preventing or
prohibiting consummation of the Merger or the other transactions contemplated
by this Agreement.
(c) CONSUMMATION OF OFFER. Acquisition Sub or its permitted
assignee shall have purchased all shares of Company Common Stock validly
tendered and not withdrawn pursuant to the Offer.
6.02 CONDITIONS TO OBLIGATION OF PARENT AND ACQUISITION SUB TO
EFFECT THE MERGER. The obligation of Parent and Acquisition Sub to effect
the Merger is further subject to the fulfillment, at or prior to the Closing,
of the additional condition (which may be waived in whole or in part by Parent
and Acquisition Sub in their sole discretion) that the Company shall have
performed and complied with each agreement, covenant and obligation required
by this Agreement to be so performed or complied with by the Company at or
prior to the Closing except where the failure to perform or comply has not had
or is not reasonably expected to have a Material Adverse Effect, and the
50
<PAGE>
Company shall have delivered to Parent a certificate, dated the Closing Date
and executed on behalf of the Company by its Chairman of the Board, President
or any Vice President, to such effect.
6.03 CONDITIONS TO OBLIGATION OF THE COMPANY TO EFFECT THE
MERGER. The obligation of the Company to effect the Merger is further
subject to the fulfillment, at or prior to the Closing, of the additional
condition (which may be waived in whole or in part by the Company in its sole
discretion) that Parent and Acquisition Sub shall have performed and complied
with, in all material respects, each agreement, covenant and obligation
required by this Agreement to be so performed or complied with by Parent or
Acquisition Sub at or prior to the Closing, and Parent and Acquisition Sub
shall each have delivered to the Company a certificate, dated the Closing Date
and executed on behalf of Parent by its Chairman of the Board, President or
any Vice President and on behalf of Acquisition Sub by its Chairman of the
Board, President or any Vice President, to such effect.
ARTICLE VII
TERMINATION OF OBLIGATIONS;
PAYMENT OF EXPENSES; WAIVERS
7.01 TERMINATION OF AGREEMENT AND ABANDONMENT OF MERGER.
Anything herein to the contrary notwithstanding, this Agreement and the Plan
of Merger may be terminated, and the
51
<PAGE>
Merger contemplated hereby may be abandoned, at any time before the Effective
Time, whether before or after approval of the Plan of Merger by the
shareholders of the Company, as follows, and in no other manner:
(a) by mutual written agreement of the parties hereto duly
authorized by action taken by or on behalf of their respective Boards of
Directors at any time that Parent, its subsidiaries or affiliates are not in
control of the Board of Directors of the Company;
(b) by either the Company or Parent upon notification to the
non-terminating party by the terminating party:
(i) if the Company Shareholders' Approval shall not be obtained by
reason of the failure to obtain the requisite vote upon a vote held at a
meeting of such shareholders, or any adjournment thereof, called
therefor; or
(ii) if any court of competent jurisdiction or other competent
Governmental or Regulatory Authority shall have issued an Order making
illegal or otherwise restricting, preventing or prohibiting the Merger
and such Order shall have become final and nonappealable.
(c) By the Company:
(i) Upon two days' prior written notice to Parent if the
Acquisition Sub (or any of its subsidiaries or affiliates) shall not
have paid for the Company Common Stock pursuant to the Offer within 45
days after the commencement of the Offer; PROVIDED, HOWEVER, that the
Company shall not
52
<PAGE>
be permitted to terminate this Agreement pursuant to this clause (i) if
such failure to pay for shares of Company Common Stock shall have been
caused by or resulted from the issuance of any Order by a court of
competent jurisdiction or other competent Governmental or Regulatory
Authority making illegal or otherwise restricting, preventing or
prohibiting the Offer or the Merger and such Order shall not have become
final and nonappealable, in which event the Company may terminate this
Agreement pursuant to this SECTION 7.01(B)(I) only if Acquisition Sub
shall have failed to purchase shares of Company Common Stock pursuant to
the Offer within ten (10) business days after the elimination of such
Order, but in any event within sixty (60) days following issuance of
such Order; or
(ii) If the Offer shall have expired or been terminated in
accordance with its terms without any of the Company Common Stock having
been purchased thereunder and Acquisition Sub shall have failed to
purchase within ten (10) days thereof the shares of Company Common Stock
purchasable by Acquisition Sub under the Stock Purchase Agreement; or
(iii) Upon two days' prior written notice to Parent if the
Effective Time shall not have occurred on or before November 30, 1994
due to a failure of any of the conditions to the obligations of the
Company set forth in SECTION 6.01 OR 6.03 hereof; or
53
<PAGE>
(iv) If, prior to the purchase of Company Common Stock pursuant
to the Offer, (A) the Board of Directors of the Company shall have
withdrawn or modified in a manner adverse to the Parent or Acquisition
Sub its approval or recommendation of the Offer, this Agreement or the
Merger in order to permit the Company to execute a definitive agreement
providing for the acquisition of the Company or in order to approve
another tender offer for the Company Common Stock, in either case, as
determined by the Board of Directors of the Company in good faith, after
consultation with its legal and financial advisors, to be financially
more favorable to the Company's shareholders than the transactions
contemplated hereby, or (B) the Board of Directors of the Company shall
have recommended such other acquisition or offer, provided that, in the
case of either (A) or (B), Acquisition Sub shall have failed to purchase
within ten days thereafter the shares of Company Common Stock
purchasable by Acquisition Sub under the Stock Purchase Agreement.
(d) By the Parent and Acquisition Sub upon two days' prior
written notice to the Company:
(i) If, due to an occurrence which would result in a failure to
satisfy any of the conditions set forth in Annex A hereto, the
Acquisition Sub (or any of its subsidiaries or affiliates) shall have
(A) failed to commence the Offer by the date provided for in Section
1.01 hereof; or (B) terminated the Offer (or permitted it to
54
<PAGE>
expire) without the purchase of the Company Common Stock thereunder; or
(ii) If the Effective Time shall not have occurred on or before
November 30, 1994 due to a failure of any of the conditions to the
obligations of the Parent and the Acquisition Sub set forth in Sections
6.01 and 6.02 hereof; or
(iii) If the Company shall have withdrawn or modified in any
manner adverse to the Acquisition Sub its approval or recommendation of
the Offer, this Agreement or the Merger, provided that if Acquisition
Sub shall purchase within ten days thereafter the shares of Company
Common Stock purchasable by Acquisition Sub under the Stock Purchase
Agreement, and thereby owns at least a majority of the Company Common
Stock, Acquisition Sub shall use its best efforts to consummate a Merger
as contemplated by this Agreement; or
(iv) If the Company deliberately fails to perform any covenant
or agreement under this Agreement and such failure has resulted in, or
is reasonably expected to result in, a Material Adverse Effect; or
(v) If Acquisition Sub shall have failed to pay for shares of
Company Common Stock pursuant to the Offer because of the issuance of
any Order by a court of competent jurisdiction or other competent
Governmental or Regulatory Authority making illegal or otherwise
restricting, preventing or prohibiting the Offer or the Merger and such
55
<PAGE>
Order shall not have become final and nonappealable, in which event
Parent and Acquisition Sub may terminate this Agreement pursuant to this
Section 7.01(d)(v) only if Acquisition Sub shall not be permitted to
purchase shares of Company Common Stock pursuant to the Offer within
sixty (60) days following issuance of such Order; or
(vi) At any time on or before February 18, 1994 if the
representations and warranties made by the Company, taken as a whole,
shall not have been true and correct, and shall continue not to be true
and correct, which has resulted in, or is reasonably expected to result
in a Material Adverse Effect.
7.02 EFFECT OF TERMINATION. If this Agreement is validly
terminated by either the Company or Parent pursuant to SECTION 7.01, (a)
this Agreement will forthwith become null and void and there will be no
liability or obligation on the part of either the Company or Parent (or any of
their respective Representatives or affiliates) in respect of this Agreement,
except (i) that the provisions of SECTIONS 5.03(B), 5.12, 5.13 and 8.09
will continue to apply following any such termination and (ii) that nothing
contained herein shall relieve any party hereto from liability for any wilful
or grossly negligent breach of its representations, warranties, covenants or
agreements contained in this Agreement and (b) Acquisition Sub shall terminate
the Offer, if still pending, without purchasing any additional shares of
Company Common Stock thereunder.
56
<PAGE>
7.03 WAIVER. Except as otherwise set forth herein, at any time
prior to the Effective Time any party hereto may to the extent permitted by
applicable law (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties of the other parties hereto
contained herein or in any document delivered pursuant hereto or (iii) waive
compliance with any of the covenants, agreements or conditions of the other
parties hereto contained herein. No such extension or waiver shall be
effective unless set forth in a written instrument duly executed by or on
behalf of the party extending the time of performance or waiving any such
inaccuracy or non-compliance. No waiver by any party of any term or condition
of this Agreement, in any one or more instances, shall be deemed to be or
construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion.
ARTICLE VIII
GENERAL
8.01 AMENDMENTS. Except as otherwise set forth herein, this
Agreement and any exhibit attached hereto may be amended, supplemented or
modified only by an instrument in writing signed by an authorized officer of
each of the parties hereto at any time prior to the Effective Time.
8.02 FURTHER INSTRUMENTS. Each party agrees to execute and
deliver such instruments and take such other action as shall be reasonably
required, or as shall be reasonably requested by any other party, in order to
carry out the
57
<PAGE>
transactions, agreements and covenants contemplated in this Agreement and the
Plan of Merger at or prior to the Effective Time.
8.03 PUBLIC ANNOUNCEMENTS. The parties hereto agree that press
releases and other public communications of any sort relating to this
Agreement, the Plan of Merger or the transactions contemplated hereby or
thereby are subject to the approval of the parties hereto, such approval not
to be unreasonably withheld; PROVIDED, HOWEVER, that the foregoing
restriction shall not prevent any party hereto from issuing a press release or
other public communication that is otherwise required by law or the rules of
any applicable securities exchange or national market system. Parent and the
Company will cooperate with each other in the development and distribution of
all press releases and other public announcements with respect to this
Agreement and the transactions contemplated hereby, and will furnish the other
with drafts of any such releases and announcements as far in advance as
practicable.
8.04 GOVERNING LAW. This Agreement and the legal relations
between the parties shall be governed by and construed in accordance with the
internal laws of the State of Washington applicable to a contract executed and
performed in such State, without giving effect to the conflicts of laws
principles thereof.
8.05 NOTICES. All notices and other communications hereunder
shall be in writing and shall be given or made (and shall be deemed to have
been duly given or made upon receipt) by
58
<PAGE>
delivery in Person, by overnight courier service, by telecopy, or by
registered or certified mail to the respective parties at the following
addresses or telecopy numbers (or at such other address or telecopy numbers
for a party as shall be specified in a notice given in accordance with this
SECTION 8.05):
(a) if to the Company:
ELDEC Corporation
16700 13th Avenue West
P.O. Box 100
Lynnwood, WA 98046-0100
Attention: President
with a copy to:
Davis Wright Tremaine
2600 Century Square
1501 Fourth Avenue
Seattle, Washington 98101-1688
Attention: William G. Pusch
(b) if to Parent or Acquisition Sub
Crane Co.
100 First Stamford Place
Stamford, CT 06902
Attention: Secretary
with a copy to:
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, NY 10005
Attention: Albert F. Lilley
8.06 NO ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor
any right, interest or obligation hereunder may be assigned by any party
hereto without the prior written consent of the other parties hereto and any
attempt to do so will be void, except that Acquisition Sub may assign any or
all of its rights,
59
<PAGE>
interests and obligations hereunder, including the right to purchase all or
any portion of the shares of Company Common Stock tendered pursuant to the
Offer, to another direct or indirect wholly owned Subsidiary of Parent,
provided that any such Subsidiary agrees in writing to be bound by all of the
terms, conditions and provisions contained herein. Subject to the preceding
sentence, this Agreement is binding upon, inures to the benefit of and is
enforceable by the parties hereto and their respective successors and assigns.
8.07 ENTIRE AGREEMENT. This Agreement and the exhibits and
documents delivered pursuant hereto or thereto or referred to herein or
therein contain the entire agreement among Parent, Acquisition Sub and the
Company with respect to the transactions contemplated herein and therein and
supersede all previous negotiations, commitments and writings, except the
provisions of the Confidentiality Agreement dated December 17, 1994 entered
into between the Company and Parent which shall remain in effect.
8.08 COUNTERPARTS. This Agreement may be executed and
delivered in one or more counterparts, each of which shall be deemed an
original, but all of which together will constitute one and the same
instrument.
8.09 INDEMNIFICATION. Parent agrees that it will cause the
Surviving Corporation, from and after the Effective Time, to (except to the
extent prohibited by applicable law) indemnify, defend and hold harmless the
present and former directors, officers and employees of the Company and its
60
<PAGE>
Subsidiaries in office prior to the Effective Time with respect to all acts
and omissions by such Persons on or prior to the Effective Time to, the
fullest extent provided in the Company's Articles of Incorporation and By-Laws
in effect on the date hereof (and advance expenses incurred in defense of any
action or suit in respect of any such act or omission as provided therein).
Parent shall, or shall cause the Surviving Corporation to, maintain directors
and officers liability insurance coverage applicable to the Company's and its
Subsidiaries' directors and officers providing substantially the same coverage
and limits as the Company directors and officers liability insurance coverage
existing on the date hereof, and keep such coverage in force until the
expiration or six (6) years after the Closing Date with respect to any error
or omission which may be alleged to have occurred prior to the Effective Time
to the extent the same would have been covered by the present Company
directors and officers liability insurance coverage; PROVIDED, HOWEVER,
that such insurance shall be required to be maintained only to the extent that
the annual premium (or the premium on an annualized basis) does not exceed one
hundred and fifty percent (150%) of the annual premium currently paid by the
Company for such insurance. The Company represents and warrants that there
are no claims currently asserted or, to its knowledge, threatened which would
give rise to such indemnification or potential payment under such insurance.
8.10 TERMINATION OF REPRESENTATIONS AND WARRANTIES. The
covenants and agreements contained in this Agreement (other
61
<PAGE>
than the Plan of Merger) or in any instrument delivered pursuant to this
Agreement shall not survive the Merger but shall terminate at the Effective
Time, except for the agreements contained in SECTION 8.09, which
shall survive the Effective Time. The representations and warranties
contained in this Agreement, or in any instrument delivered pursuant to this
Agreement, shall terminate, be of no further force or effect and shall not
survive beyond February 18, 1994.
8.11 NO THIRD PARTY BENEFICIARIES. The terms and provisions of
this Agreement are intended solely for the benefit of each party hereto and
their respective successors or permitted assigns, and except as provided in
SECTION 8.09 (which is intended to be for the benefit of the Persons
entitled to indemnification and the benefits of insurance pursuant thereto,
and may be enforced by any of such Persons), as provided in SECTION 5.11
(which is intended to be for the benefit of the Persons entitled to the
benefits pursuant thereto, and may be enforced by any of such Persons), as
provided in SECTION 5.10 (which is intended to be for the benefit of the
Persons who might otherwise be obligated to make such payments pursuant
thereto, and may be enforced by such Persons), and as provided in SECTION
5.05 (which is intended to be for the benefit of the Persons who are entitled
to such payments, and may be enforced by any of such Persons), it is not the
intention of the parties to confer third-party beneficiary rights upon any
other Person.
8.12 INVALID PROVISIONS. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under
62
<PAGE>
any present or future law, and if the rights or obligations of any party
hereto under this Agreement will not be materially and adversely affected
thereby, (i) such provision will be fully severable, (ii) this Agreement will
be construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part hereof, (iii) the remaining provisions of
this Agreement will remain in full force and effect and will not be affected
by the illegal, invalid or unenforceable provision or by its severance
herefrom and (iv) in lieu of such illegal, invalid or unenforceable provision,
there will be added automatically as a part of this Agreement a legal, valid
and enforceable provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible.
8.13 HEADINGS. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
ARTICLE IX
DEFINITIONS
9.01 DEFINITIONS. For the purposes of this Agreement, the
following terms shall have the following meanings, which apply to both the
singular and plural forms of the terms defined:
"ACQUISITION SUB" shall have the meaning set forth in the
forepart of this Agreement.
"ACQUISITION TRANSACTION" shall have the meaning set forth in
SECTION 5.02.
"ANTITRUST DIVISION" shall have the meaning set forth in
SECTION 5.07.
63
<PAGE>
"ARTICLES OF MERGER" shall mean the articles of merger
substantially in the form of EXHIBIT A hereto to be filed with the Secretary
of State of the State of Washington pursuant to RCW 23B.11.040 of the WBCA to
effect the Merger.
"CLOSING DATE" shall have the meaning set forth in SECTION
2.02.
"CODE" shall mean the Internal Revenue Code of 1986.
"COMPANY" shall have the meaning set forth in the forepart of
this Agreement.
"COMPANY BALANCE SHEET" shall mean the balance sheet of the
Company and the related footnotes for the fiscal year ended March 28, 1993
appearing in the 1993 10-K.
"COMPANY BENEFIT PLAN" means any Plan entered into, established,
maintained, contributed to or required to be contributed to by the Company,
any of its Subsidiaries or any ERISA Affiliate and existing on the date of
this Agreement or at any time subsequent thereto and on or prior to the
Effective Time and, in the case of a Defined Benefit Plan, at any time during
the six-year period preceding the date of this Agreement.
"COMPANY COMMON STOCK" shall have the meaning set forth in the
first recital of this Agreement.
"COMPANY EMPLOYEE OPTIONS" shall mean the stock options granted
to employees of the Company to acquire Company Common Stock described in a
schedule for ARTICLE IX in the Company Letter.
"COMPANY FINANCIAL STATEMENTS" shall have the meaning set forth
in SECTION 3.04.
64
<PAGE>
"COMPANY LETTER" shall have the meaning set forth in the fifth
recital of this Agreement.
"COMPANY SEC REPORTS" shall have the meaning set forth in
SECTION 3.04.
"COMPANY SHAREHOLDERS' APPROVAL" shall have the meaning set
forth in SECTION 5.04.
"CONTRACTS" shall have the meaning set forth in SECTION 3.10.
"DEFINED BENEFIT PLAN" means any Company Benefit Plan subject to
the provisions of Section 412 of the Code or Section 302 of ERISA, or Title IV
of ERISA.
"DISSENTING SHAREHOLDER" shall mean any Company shareholder who
shall have not voted in favor of the Merger and shall have filed a written
demand for appraisal for his or her shares pursuant to Chapter 23B.13 of the
WBCA.
"EFFECTIVE TIME" shall mean the date and time of the filing of
the Articles of Merger with the Office of the Secretary of the State of
Washington pursuant to RCW 23B.11.050 of the WBCA.
"ENVIRONMENTAL LAW" shall mean any and all present and future
Laws or Orders of any Governmental or Regulatory Authorities, in each case as
now or hereafter in effect, relating to the regulation or protection of human
health, safety or the environment or to emissions, discharges, Releases or
threatened Releases of pollutants, contaminants, chemicals or toxic or
hazardous substances or wastes into the indoor or outdoor environment,
including, without limitation, ambient air, soil,
65
<PAGE>
surface water, ground water, wetlands, land or subsurface strata, or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants,
chemicals or toxic or hazardous substances or wastes.
"ENVIRONMENTAL PERMITS" shall mean all environmental, health and
safety permits, licenses, approvals, consents and other authorizations from
Governmental or Regulatory Authorities, including any permit by rule, required
under any applicable Environmental Law to carry on the business and activities
of the Company and its Subsidiaries.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"ERISA AFFILIATE" means any corporation or other trade or
business that is treated as a single employer with the Company or any of its
subsidiaries under Section 414 of the Code.
"EXCHANGE AGENT" shall mean the financial institution designated
by the Company to act as exchange agent for the surrender of certificates for,
and payment for, the shares of the Company Common Stock following the Merger.
"FTC" shall have the meaning set forth in SECTION 5.07.
"GAAP" shall mean generally accepted accounting principles,
consistently applied throughout the specified period and in the immediately
prior comparable period.
"GOVERNMENTAL OR REGULATORY AUTHORITY" shall have the meaning
set forth in SECTION 3.10.
66
<PAGE>
"HART-SCOTT-RODINO ACT" shall mean the Hart-Scott-Rodino
Antitrust Improvements Act of 1976.
"HAZARDOUS MATERIAL" shall mean, collectively, (a) any petroleum
or petroleum products, flammable materials, explosives, radioactive materials,
asbestos, urea formaldehyde foam insulation, and transformers or other
equipment that contain polychlorinated biphenyls, (b) any chemicals or other
materials or substances that are now or hereafter become defined as or
included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes," "restricted hazardous
wastes," "toxic substances," "toxic pollutants," "contaminants," "pollutants"
or words of similar import under any Environmental Law and (c) any other
chemical or other material or substance, exposure to which is now or hereafter
prohibited, limited or regulated under any Environmental Law.
"INDEBTEDNESS" of any Person shall mean all obligations of such
Person (i) for borrowed money, (ii) evidenced by notes, bonds, debentures, or
similar instruments, (iii) for the deferred purchase of goods or services
(other than trade payables or accruals incurred in the ordinary course of
business), (iv) under capital leases and (v) in the nature of guarantees of
the obligations described in clauses (i) through (iv) above of any Person.
"INTELLECTUAL PROPERTY" shall have the meaning set forth in
SECTION 3.09.
67
<PAGE>
"KNOWLEDGE OF THE COMPANY" shall be deemed to mean actual
knowledge after due inquiry, of any executive officer or the Chairman of the
Board of the Company.
"LAWS" shall have the meaning set forth in SECTION 3.10.
"LIEN" shall have the meaning set forth in SECTION 3.03.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect
on (i) the business, assets, liabilities, results of operations, condition
(financial or otherwise) or prospects of the Company and its Subsidiaries
taken as a whole, (ii) the ability of the Company to perform its obligations
under, and to consummate the transactions contemplated by, this Agreement, the
Plan of Merger or any other agreement or instrument contemplated hereby or
thereby or to be entered into in connection herewith or therewith.
Notwithstanding the foregoing, a "Material Adverse Effect" shall not include
any material adverse effect caused by (i) any change in general economic
conditions or financial markets, (ii) any change in economic conditions in the
industries in which the Company operates or (iii) any change resulting from
the announcement of the Offer or the Merger.
"MERGER" shall have the meanings set forth in the first recital
of this Agreement.
"MULTIEMPLOYER PLAN" shall have the meaning set forth in Section
3(37) of ERISA.
68
<PAGE>
"1993 10-K" shall mean the Company's annual report on Form 10-K
for the period ended March 28, 1993.
"OFFER" shall have the meaning ascribed to it in SECTION
1.01(A).
"OFFER DOCUMENTS" shall have the meaning ascribed to it in
SECTION 1.01(B).
"OFFER TO PURCHASE" shall have the meaning ascribed to it in
SECTION 1.01(B).
"OPTIONS" shall have the meaning set forth in SECTION 3.02.
"ORDERS" shall have the meaning set forth in SECTION 3.10.
"PARENT" shall have the meaning set forth in the forepart of
this Agreement.
"PARENT LETTER" shall have the meaning set forth in the sixth
recital of this Agreement.
"PER SHARE AMOUNT" shall have the meaning ascribed to it in
SECTION 1.01(A).
"PERSON" shall mean an individual, partnership, corporation,
joint stock company, trust, joint venture, association or unincorporated
organization, or any other form of business or professional entity other than
a Subsidiary.
"PLAN" means any employment, bonus, incentive compensation,
deferred compensation, pension, profit sharing, retirement, stock purchase,
stock option, stock ownership, stock appreciation rights, phantom stock, leave
of absence, layoff, vacation, day or dependent care, legal services,
cafeteria, life,
69
<PAGE>
health, medical, accident, disability, workers' compensation
or other insurance, severance, separation, termination, change ofcontrol or
other benefit plan, agreement, practice, policy or arrangement of
any kind, whether written or oral, including, but not limited to, any
"employee benefit plan" within the meaning of Section 3(3) of ERISA.
"PLAN OF MERGER" shall mean the plan of merger substantially in
the form of Exhibit A to the Articles of Merger.
"POTENTIAL ACQUIROR" shall have the meaning set forth in
SECTION 5.02.
"PROXY STATEMENT" shall have the meaning ascribed to it in
SECTION 5.06.
"QUALIFIED PLAN" means each Company Benefit Plan that is
intended to be qualified under Section 401(a) of the Code.
"QUARTERLY 10-Q'S" shall mean the Company's quarterly reports on
Form 10-Q for the periods ended June 27, 1993, September 26, 1993 and December
26, 1993, respectively.
"RELEASES" shall mean any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment, including, without
limitation, the movement of Hazardous Materials through ambient air, soil,
surface water, ground water, wetlands, land or subsurface strata.
"REPRESENTATIVES" of any Person shall mean all officers,
directors, employees, investment bankers, financial advisors, attorneys,
accountants or other agents or representatives of such Person.
70
<PAGE>
"SCHEDULE 14D-1" shall have the meaning ascribed to it in
SECTION 1.01(B).
"SCHEDULE 14D-9" shall have the meaning ascribed to it in
SECTION 1.02(B).
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES EXCHANGE ACT" shall mean the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated thereunder.
"SPECIAL MEETING OF SHAREHOLDERS" shall mean the special meeting
of the Company's shareholders to be held, if required by applicable law in
order to consummate the Merger, to consider approval of the Plan of Merger as
contemplated by SECTION 5.04.
"STOCK PURCHASE AGREEMENT" shall have the meaning set forth in
the second recital of this Agreement.
"SUBSIDIARIES" shall mean with respect to Parent and the Company all
corporations (or equivalent legal entity under foreign law) of which Parent or
the Company, as the case may be, owns, directly or indirectly, more than 50%
of the stock the holders of which are ordinarily and generally, in the absence
of contingencies or understandings, entitled to vote for the election of a
majority of the directors; PROVIDED that, with respect to consolidated
financial statements referred to in this Agreement, "Subsidiaries" shall
include only those corporations the accounts of which are consolidated with
Parent or the Company, as the case may be.
71
<PAGE>
"SURVIVING CORPORATION" shall mean the surviving corporation in
the Merger.
"TAXES" shall mean any federal, state, county, local or foreign
taxes, charges, fees, levies, other assessments, or withholding taxes or
charges imposed by an Governmental or Regulatory Authority, and includes any
interest and penalties (civil or criminal) on or additions to any taxes and
any expenses incurred in connection with the determination, settlement or
litigation of any Tax liability.
"TAX RETURN" shall mean any report, return or other information
(including any amendments) required to be supplied to a Governmental or
Regulatory Authority by the Company with respect to Taxes, including, where
permitted or required, combined or consolidated returns for any group of
entities that includes the Company.
"WBCA" means the Washington Business Corporation Act, Title 23B
of the Revised Code of Washington.
72
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf by its officers thereunto duly
authorized, all as of the day and year first above written.
CRANE CO.
By /S/ DAVID S. SMITH
---------------------------------
Name: David S. Smith
Title: Vice President -
Corporate Development
CRANE ACQUISITION CORP.
By /S/ DAVID S. SMITH
----------------------------------
Name: David S. Smith
Title: Vice President
ELDEC CORPORATION
By /S/ THOMAS K. BROWN
---------------------------------
Name: Thomas K. Brown
Title: President
73
<PAGE>
ANNEX A
CONDITIONS TO THE OFFER
The capitalized terms used in this Annex A shall have the meanings
ascribed to them in the Agreement for Merger and Reorganization to which it is
attached, except that the term "MERGER AGREEMENT" shall be deemed to refer
to such Agreement and Plan of Merger.
Notwithstanding any other provisions of the Offer, and in addition
to (and not in limitation of) Acquisition Sub's rights to extend and amend the
Offer at any time in its sole discretion (subject to the provisions of the
Merger Agreement), Acquisition Sub shall not be required to accept for payment
or, subject to any applicable rules and regulations of the SEC, including Rule
14e-1(c) under the Securities Exchange Act (relating to Acquisition Sub's
obligation to pay for or return tendered shares of Company Common Stock
promptly after termination or withdrawal of the Offer), pay for, and may delay
the acceptance for payment of or, subject to the restriction referred to
above, the payment for, any tendered shares of Company Common Stock, and may
terminate the Offer as to any shares of Company Common Stock not then paid
for, if (i) shares of Company Common Stock representing (together with shares
available for purchase by Acquisition Sub under the Stock Purchase Agreement)
less than 66-2/3% of the shares of Company Common Stock outstanding on a fully
diluted basis shall have been validly tendered and not properly withdrawn
pursuant to the Offer, (ii) any applicable waiting period under the
Hart-Scott-Rodino Act shall not have expired or terminated, or (iii) at any
time on or after February 11, 1994 and before the time of payment for any such
shares of Company Common Stock (whether or not any shares of Company Common
Stock have theretofore been accepted for payment or paid for pursuant to the
Offer), any of the following events shall have occurred and remain in effect:
(a) there shall have been any action taken, or any Law or Order
promulgated, entered, enforced, enacted, issued or deemed applicable to
the Offer or the Merger by any court of competent jurisdiction or other
competent Governmental or Regulatory Authority which directly or
indirectly (1) prohibits, or imposes any material limitations on, Parent
or Acquisition Sub's ownership or operation (or that of any of their
respective Subsidiaries or affiliates) of all or a material portion of
their or the Company's businesses or assets, or compels Parent or
Acquisition Sub (or their respective Subsidiaries and affiliates) to
dispose of or hold separate any material portion of the business or
assets of the Company or Parent and their respective Subsidiaries, in
each case taken as a whole, (2) prohibits or makes illegal the
acceptance for payment, payment for or purchase of shares of Company
Common Stock pursuant to the Offer or
74
<PAGE>
the consummation of the Offer or the Merger, (3) results in the delay in
or restricts the ability of Acquisition Sub, or renders Acquisition Sub
unable, to accept for payment, pay for or purchase some or all of the
shares of Company Common Stock tendered pursuant to the Offer, (4)
imposes or confirms material limitations on the ability of Acquisition
Sub or Parent (or any of their respective Subsidiaries or affiliates)
effectively to exercise full rights of ownership of the shares of
Company Common Stock purchased pursuant to the Offer, including, without
limitation, the right to vote such shares of Company Common Stock on all
matters properly presented to the Company's stockholders, or (5) has or
is reasonably expected to have a Material Adverse Effect;
(b) there shall be instituted or pending any action, proceeding
or counterclaim brought by a Governmental or Regulatory Authority (1)
challenging the acquisition by Parent or Acquisition Sub of shares of
Company Common Stock or otherwise seeking to restrain or prohibit the
consummation of the Offer or the Merger or seeking to obtain any
material damages as a result thereof, or (2) that could reasonably be
expected to result, directly or indirectly, in any of the consequences
referred to in clauses (1) through (5) of paragraph (a) above;
(c) there shall have occurred a change or event subsequent to
February 11, 1994 which has had, or is reasonably expected to have a
Material Adverse Effect;
(d) the Company shall not have performed and complied with each
agreement, covenant and obligation required by the Merger Agreement to
be performed or complied with by it except where the failure to perform
or comply has not had or is not reasonably expected to have a Material
Adverse Effect;
(e) the Merger Agreement shall have been terminated in
accordance with its terms;
(f) the Company's Board of Directors shall have publicly
(including by amendment of the Schedule 14D-9) withdrawn or modified in
a manner adverse to Parent and Acquisition Sub its recommendation of the
Offer, the Merger Agreement or the Merger, or recommended another
Acquisition Transaction, or shall have resolved to do any of the
foregoing; or
(g) Parent, Acquisition Sub and the Company shall have agreed
that Acquisition Sub shall terminate the Offer or postpone the payment
for shares of Company Common Stock thereunder;
75
<PAGE>
which in the good faith judgment of Parent and Acquisition Sub, in any such
case, and regardless of the circumstances (including any action or inaction by
Parent or Acquisition Sub giving rise to such condition) makes it inadvisable
to proceed with the Offer or with such acceptance for payment or payment or
with the Merger.
The foregoing conditions are for the sole benefit of Parent and
Acquisition Sub, may be asserted by Parent and Acquisition Sub regardless of
the circumstances (including any action or inaction by Parent or Acquisition
Sub) giving rise to any such condition and, subject to the terms and
conditions of the Merger Agreement, may be waived by Parent and Acquisition
Sub, in whole or in part at any time and from time to time in the sole
discretion of Parent and Acquisition Sub. The failure by Parent and
Acquisition Sub 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.
76
<PAGE>
EXHIBIT A
to the Agreement
for Merger and
Reorganization
ARTICLES OF MERGER
of
Crane Acquisition Corp.
into
ELDEC Corporation
Pursuant to the provisions of RCW 23B.11.050, these Articles of
Merger are executed for the purpose of merging Crane Acquisition Corp., a
Washington corporation (the "Disappearing Corporation"), into ELDEC
Corporation, a Washington corporation (the "Surviving Corporation").
1. The Plan of Merger (the "Plan") approved by the sole
shareholder of the Disappearing Corporation and by the shareholders of the
Surviving Corporation is attached as EXHIBIT A and incorporated herein by
reference.
2. The Merger (as defined in the Plan) was duly approved by the
shareholders of the Surviving Corporation and by the sole shareholder of the
Disappearing Corporation pursuant to RCW 23B.11.030.
3. The Merger of the Disappearing Corporation with and into the
Surviving Corporation in accordance with the Plan shall be effective upon the
filing of these Articles of Merger in the Office of the Secretary of State of
the State of Washington.
Dated: _________________, 1994.
ELDEC CORPORATION
By ___________________________
Its________________________
A1
<PAGE>
EXHIBIT A TO ARTICLES OF MERGER
PLAN OF MERGER
This PLAN OF MERGER ("PLAN") is made and entered into as
of______________, 1994, between ELDEC Corporation, a Washington corporation
("COMPANY") and Crane Acquisition Corp., a Washington corporation
("ACQUISITION SUB"). Company and Acquisition Sub are sometimes collectively
referred to in this Plan as the "CONSTITUENT CORPORATIONS."
R E C I T A L S:
The Company and Acquisition Sub have, together with
Crane Co., a Delaware corporation ("PARENT") and sole shareholder of
Acquisition Sub, entered into an Agreement for Merger and Reorganization,
dated as of February 11, 1994, (the "MERGER AGREEMENT"), and deem it
advisable and in the best interests of the Company and Acquisition Sub,
respectively, and their respective shareholders, that Acquisition Sub be
merged with and into the Company (the "MERGER") as authorized by the laws of
the State of Washington and pursuant to the terms and conditions of the Merger
Agreement.
NOW THEREFORE, in consideration of the premises and of the mutual
covenants, agreements and conditions set forth herein, the parties agree as
follows:
1. MERGER; EFFECTIVENESS. Acquisition Sub shall be merged with
and into the Company (hereinafter sometimes called the "SURVIVING
CORPORATION") pursuant to the applicable provisions of the Washington
Business Corporation Act ("WBCA"), as amended, and in accordance with the
terms and conditions of this Plan and the Merger Agreement. Upon the
execution by the Surviving Corporation of Articles of Merger (the "ARTICLES
OF MERGER") with respect to the adoption of this Plan and the filing of such
Articles with the Secretary of State of the State of Washington, the Merger
shall become effective (the "EFFECTIVE TIME").
2. ARTICLES OF INCORPORATION. The Articles of Incorporation of
the Acquisition Sub, a copy of which is attached hereto as EXHIBIT A, shall,
at the Effective Time, become the Articles of Incorporation of the Surviving
Corporation until the same shall be altered, amended, or repealed.
A2
<PAGE>
3. BYLAWS. The Bylaws of the Surviving Corporation shall, at
the Effective Time, be amended to conform to the Bylaws of Acquisition Sub in
effect at the Effective Time.
4. DIRECTORS AND OFFICERS. The directors and officers of
Acquisition Sub in office at the Effective Time shall, at the Effective Time,
become the directors and officers, respectively, of the Surviving Corporation
and shall hold such offices in accordance with and subject to the Articles of
Incorporation and Bylaws of the Surviving Corporation, as in effect
immediately after the Effective Time, until their successors are duly elected
or appointed and qualified in accordance with applicable law.
5. CONVERSION OF SHARES. At the Effective Time, by virtue of
the Merger and without any action on the part of the holder of any shares:.
(a) Each outstanding share of Company Common Stock (each, a
"SHARE") (other than any Dissenting Shares (as defined below)) shall be
converted into the right to receive cash from the Acquisition Sub in the
amount of $_______________ per Share.
From and after the Effective Time, all Shares (other than any
Dissenting Shares) shall no longer be outstanding and shall automatically
cease to exist, and each holder of a certificate representing any such Shares
shall cease to have any rights with respect thereto (other than any
dissenter's rights that a holder of Dissenting Shares may have under the WBCA)
and their sole right shall be to receive payment for their Shares as provided
herein.
(b) Each share of stock in Acquisition Sub issued and outstanding
immediately prior to the Effective Time shall be converted into one fully paid
and nonassessable share of Common Stock of the Surviving Corporation and shall
constitute the only issued and outstanding shares of capital stock of the
Surviving Corporation.
6. DISSENTING SHARES. Notwithstanding any provision of this
Plan to the contrary, each outstanding share of Company Common Stock the
holder of which has not voted in favor of the Merger, has perfected such
holder's right to an appraisal of such holder's shares in accordance with the
applicable provisions of the WBCA and has not effectively withdrawn or lost
such right to appraisal (a "DISSENTING SHARE"), shall not be converted into
or represent a right to receive the payment pursuant to SECTION 5(A), but
the holder thereof shall be entitled only to such rights as are granted by the
applicable provisions of the WBCA; PROVIDED, HOWEVER, that any Dissenting
Share held by a Person at the Effective Time who shall, after the Effective
Time, withdraw the demand for appraisal or lose the right of appraisal,
A3
<PAGE>
in either case pursuant to the WBCA, shall be deemed to be converted into, as
of the Effective Time, the right to receive the payment pursuant to SECTION
5(A).
7. EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. On the Closing Date, Parent shall deposit
with [_________________] or such other bank or trust company mutually
acceptable to the Company and Parent (the "EXCHANGE AGENT"), a cash amount
equal to the aggregate payments required pursuant to SECTION 5(A) to which
holders of shares of Company Common Stock shall be entitled upon consummation
of the Merger, to be held for the benefit of and distributed to such holders
in accordance with this Section. The Exchange Agent shall agree to hold such
funds (such funds, together with earnings thereon, being referred to herein as
the "EXCHANGE FUND") for delivery as contemplated by this Section and upon
such additional terms as may be agreed upon by the Exchange Agent, the Company
and Parent before the Effective Time. If for any reason (including losses)
the Exchange Fund is inadequate to pay the cash amounts to which holders of
shares of Company Common Stock shall be entitled, Parent shall deposit with
the Securities Exchange Act of 1934, as amended, additional funds for the
payment thereof.
(b) EXCHANGE PROCEDURES. As soon as reasonably practicable
after the Effective Time, the Surviving Corporation shall cause the Exchange
Agent to mail to each holder of record of a certificate or certificates which
immediately prior to the Effective Time represented outstanding shares of
Company Common Stock (the "CERTIFICATES") whose shares are converted into
the right to receive payment pursuant to SECTION 5(A) (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such
other provisions as the Surviving Corporation may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in
exchange for such payment. Upon surrender of a Certificate for cancellation
to the Exchange Agent, together with such letter of transmittal duly executed
and completed in accordance with its terms, the holder of such Certificate
shall be entitled to receive in exchange therefor a check representing the
payment set forth in SECTION 5(A) per share of Company Common Stock
represented thereby which such holder has the right to receive hereunder, and
the Certificate so surrendered shall forthwith be canceled. In no event shall
the holder of any Certificate be entitled to receive interest on any funds to
be received in the Merger. In the event of a transfer of ownership of Company
Common Stock which is not registered in the transfer records of the Company,
the payment hereunder may be issued to a transferee if the
A4
<PAGE>
Certificate representing such Company Common Stock is presented to the
Exchange Agent accompanied by all documents required to evidence and effect
such transfer and by evidence that any applicable stock transfer taxes have
been paid. Until surrendered as contemplated by this Section, each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender the payment per share of Company
Common Stock represented thereby as contemplated by SECTION 5(A).
(c) NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. All
cash paid upon the surrender of shares of Company Common Stock in accordance
with the terms hereof shall be deemed to have been paid in full satisfaction
of all rights pertaining to such shares of Company Common Stock. From and
after the Effective Time, the stock transfer books of the Company shall be
closed and there shall be no further registration of transfers on the stock
transfer books of the Surviving Corporation of the shares of Company Common
Stock which were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation for any reason, they shall be canceled and exchanged as provided
in this Section.
(d) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange
Fund which remains undistributed to the shareholders of the Company for
__________ (__) months after the Effective Time shall be delivered to the
Surviving Corporation, upon demand, and any shareholders of the Company who
have not theretofore complied with this Section shall thereafter look only to
the Surviving Corporation (subject to abandoned property, escheat and other
similar laws) as general creditors for payment of their claim for the
applicable payment per share. Neither Parent nor the Surviving Corporation
shall be liable to any holder of shares of Company Common Stock for cash
representing any payment delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
8. RIGHTS, DUTIES, POWERS, LIABILITIES, ETC. At the Effective
Time, the separate existence of Acquisition Sub shall cease, and Acquisition
Sub shall be merged in accordance with the provisions of this Plan and the
Merger Agreement with and into the Company and the Surviving Corporation shall
continue its corporate existence under the laws of the State of Washington
and thereupon and thereafter all the rights, privileges, properties, and
franchises of each of the Constituent ("CORPORATIONS") shall vest in the
Surviving Corporation, the Surviving Corporation shall be responsible and
liable for all liabilities and obligations of the Company and Acquisition Sub
and all other effects of the Merger specified in RCW 23B.11.060 shall result
therefrom.
A5
<PAGE>
9. IMPLEMENTATION. Each of the Constituent Corporations shall,
subject to the terms of the Merger Agreement, take, or cause to be taken, all
action or do, or cause to be done, all things necessary, proper, or advisable
under the laws of the State of Washington to consummate and make effective the
Merger.
10. TERMINATION. This Plan may be terminated for any reason at
any time before the filing of the Articles of Merger with the Secretary of
State of the State of Washington (whether before or after approval by the
shareholders of the Constituent Corporations, or either of them) by resolution
of the Board of Directors of either of the Constituent Corporations;
PROVIDED, HOWEVER, that no such termination shall affect the contractual
rights of the Constituent Corporations under the Merger Agreement.
11. AMENDMENT. This Plan may, to the extent permitted by law,
be amended, supplemented, or interpreted at any time by action taken by the
Board of Directors of both of the Constituent Corporations; PROVIDED,
HOWEVER, that this Plan may not be amended or supplemented after having been
approved by the shareholders of a Constituent Corporation except by a vote or
consent of shareholders in accordance with applicable law.
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Plan of Merger as of the date first set forth above.
ELDEC CORPORATION
By ___________________________
Name:
Title:
CRANE ACQUISITION CORP.
By ___________________________
Name:
Title:
A6
<PAGE>
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and
entered into as of February 11, 1994, among the individual shareholders and
trusts described in Schedule A hereto (the "Selling Shareholders"), Crane Co.,
a Delaware corporation ("Crane") and Crane Acquisition Corp., a Washington
corporation ("Purchaser").
WHEREAS, Crane, Purchaser and ELDEC Corporation, a Washington
corporation (the "Company"), are entering into an agreement for merger and
reorganization dated as of February 11, 1994 (the "Merger Agreement") pursuant
to which Purchaser would acquire the entire equity of the Company by means of
(a) a tender offer by Purchaser for any and all Company Common Stock at $13.00
per share to be followed by (b) the merger described in the Merger Agreement,
in which each share of Company Common Stock (other than those owned by
shareholders who properly possess and exercise dissenters' rights and those
owned by Purchaser or any of its affiliates) would be converted into the right
to receive the Per Share Amount described in the Merger Agreement; and
WHEREAS, each Selling Shareholder owns the number of shares of
Company Common Stock set forth opposite the Selling Shareholder's name on
Schedule A annexed hereto, aggregating 2,899,872 shares (the "Subject Shares")
and constituting in excess of 50% of the issued and outstanding shares of the
Company.
Capitalized terms used but not defined herein shall have the
meanings assigned to such terms in the Merger Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, the parties hereto agree as follows:
1. PURCHASE OF SUBJECT SHARES. Selling Shareholders agree to
sell and Crane agrees to cause Purchaser to purchase the Subject Shares
immediately following the acceptance for purchase and purchase by Purchaser of
Company Common Stock pursuant to the Offer, at the Per Share Amount net to the
Selling Shareholders in cash. In the event the Offer is terminated because of
the occurrence of the event specified in clause (f) of the Conditions to the
Offer set forth in Annex A to the Merger Agreement, Purchaser shall have the
right to purchase (the "Subject Share Option"), and Selling Shareholders shall
sell to Purchaser upon exercise by Purchaser of the Subject Share Option, the
Subject Shares at $13.00 per share.
2. EXERCISE OF SUBJECT SHARE OPTION. Purchaser shall give a
written notice to the designated representative of the Selling Shareholders
(the "Designated Representative" who shall
<PAGE>
be Robert J. Gellert until such time as Purchaser shall be advised on behalf of
the Selling Shareholders of the name of a successor Designated Representative)
of Purchaser's intention to exercise the Subject Share Option. The closing of
the purchase of the Subject Shares (the "Closing") pursuant to the Subject Share
Option shall take place in the offices of Milbank, Tweed, Hadley & McCloy on a
date and at a time designated by Purchaser at the time Purchaser gives notice
of its intention to exercise the Subject Share Option (which date and time may
be one day after the delivery of such notice or earlier if reasonably
practicable), provided that if any waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), applicable to
the exercise of the Subject Share Option shall not at such time have expired or
been terminated, then the Closing shall take place not more than five business
days following the expiration or termination of such waiting periods. The
Subject Share Option, if not theretofore exercised, shall expire ten days
following termination of the Offer, except that if the Subject Share Option
cannot be exercised by reason of any applicable judgment, decree or order, or
because any waiting periods under the HSR Act shall not have expired or been
terminated, the expiration date of the Subject Share Option shall be extended
until five business days after such impediment to exercise shall have been
removed (such expiration date is referred to herein as the "Expiration Date")
or the expiration or termination of the HSR Act waiting periods, as the case
may be.
3. CLOSING. At the Closing, and also upon purchase of the
Subject Shares in connection with a purchase of the Company Common Stock
pursuant to the Offer:
(a) Crane shall cause Purchaser to make payment to the
Designated Representative on behalf of the Selling Shareholders of the
purchase price for the Subject Shares by delivery of a bank or cashier's
check payable in immediately available funds to the order of each of the
respective Selling Shareholders; and
(b) each of the Selling Shareholders shall cause to be delivered
to the Purchaser the certificate or certificates representing the
Subject Shares together with stock powers endorsed in blank.
4. COVENANTS OF THE SELLING SHAREHOLDERS. Except in
accordance with the provisions of this Agreement, each of the Selling
Shareholders agrees, and the Designated Representative for and on behalf of
the Selling Shareholders hereby covenants, that until the Subject Share Option
shall have terminated, the Selling Shareholders (in their capacity as
shareholders) will not:
(a) sell, transfer, pledge, assign or otherwise dispose of, or
enter into any contract, option or other arrangement or understanding
with respect to the sale, transfer, pledge, assignment or other
disposition of any of
2
<PAGE>
the Subject Shares, other than a transfer of up to 60,000 of the Subject
Shares to a person who shall become a party to this Agreement and be
bound hereby as one of the Selling Shareholders;
(b) grant any proxies, deposit any of the Subject Shares into a
voting trust or enter into a voting agreement with respect to any of the
Subject Shares; or
(c) solicit or encourage (including by way of furnishing any
non-public information concerning the Company's business, properties or
assets) any party to acquire or offer to acquire the Company, any of its
shares of capital stock or a material portion of its assets or business.
5. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS
AND DESIGNATED REPRESENTATIVE. Each of the Selling Shareholders and the
Designated Representative hereby represents and warrants to Crane as follows:
(a) the Subject Shares attributable to the Selling Shareholders
on Schedule A annexed hereto are the only shares of Company Common Stock
which the respective Selling Shareholders have the right, power and
authority to sell and each of the Selling Shareholders, respectively,
has no right to acquire any other shares of Company Common Stock;
(b) each of the Selling Shareholders, and the Designated
Representative on behalf of each of the Selling Shareholders, has the
right, power and authority to execute and deliver this Agreement and to
sell the Subject Shares in accordance with the terms of this Agreement;
such execution, delivery and sale will not violate, or require any
consent, approval, or notice under, any provision of law (other than the
HSR Act) or the terms of any governing instrument or result in the
breach of any outstanding agreement or instrument to which any of the
Selling Shareholders or the Designated Representative is a party or is
subject; and this Agreement has been duly executed and delivered by or
on behalf of each of the Selling Shareholders and constitutes a legal,
valid and binding agreement of each of the Selling Shareholders,
enforceable in accordance with its terms;
(c) the Subject Shares attributable to each of the Selling
Shareholders are free and clear of all liens, claims, security interests
or any other circumstances whatsoever ("Encumbrances") with respect to
the ownership or voting of the Subject Shares or otherwise, other than
Encumbrances created pursuant to this Agreement; and there are no
outstanding options, warrants or rights to purchase
or acquire, or agreements relating to, the Subject Shares other than
this Agreement;
3
<PAGE>
(d) upon purchase of the Subject Shares in accordance with the
terms hereof, the Purchaser will be vested with good title to the
Subject Shares, free and clear of all Encumbrances;
(e) annexed hereto as a part hereof are copies of general powers
of attorney executed by each of the ELDEC Individual Shareholders
described in Schedule A annexed hereto, in each case appointing Robert
J. Gellert as attorney-in-fact, who, as the Designated Representative
hereby represents and warrants that each of the ELDEC Individual
Shareholders executing such powers of attorney is now alive, has not at
any time revoked or repudiated the power of attorney, was at the time of
execution of the power of attorney (in the judgment of the Designated
Representative) of sound mind, and each such power of attorney is
currently in full force and effect; and
(f) to the best knowledge of the Designated Representative,
having made due inquiry of counsel, the person or persons executing and
delivering this Agreement on behalf of the trusts described in Schedule
A are fully empowered under applicable law and the terms of the
governing documents with respect to the trusts, respectively, to act on
behalf of each of the trusts in connection with a disposition of the
Subject Shares pursuant to this Agreement.
6. REPRESENTATIONS AND WARRANTIES OF CRANE AND PURCHASER.
Crane hereby represents and warrants to each of the Selling Shareholders that:
(a) it has all requisite corporate power and authority to
execute and deliver this Agreement and to cause Purchaser to purchase
the Subject Shares in accordance with the terms of this Agreement; such
execution, delivery and purchase have been duly authorized by all
necessary corporate action on the part of Crane and Purchaser; and this
Agreement has been duly executed and delivered by Crane and Purchaser
and constitutes a legal, valid and binding agreement on the part of
Crane and Purchaser, enforceable in accordance with its terms; and
(b) the Purchaser shall purchase the Subject Shares for
investment and not with a view to the distribution thereof.
7. ESCROW PROVISIONS. The Subject Shares are being deposited
with Milbank, Tweed, Hadley & McCloy, as Escrow Agent (the "Escrow Agent") to
be held pending transfer to a depository acceptable to the parties hereto,
which depository shall continue to hold the Subject Shares for the term of
this Agreement. Each of the Selling Shareholders hereby deposits with the
Escrow Agent upon the terms and subject to the conditions contained herein a
certificate or certificates representing the number of shares of
4
<PAGE>
Company Common Stock specified opposite the name of each of the Selling
Shareholders on Schedule A hereto, duly endorsed in blank or accompanied by
stock powers endorsed in blank.
8. FURTHER ASSURANCES. In connection with the purchase of
Subject Shares by Purchaser, each of the Selling Shareholders and the
Designated Representative will execute and deliver all such further documents
and instruments and take all such further action as may be necessary in order
to consummate the transactions contemplated hereby.
9. EXPENSES. Each party hereto shall pay its own expenses
incurred in connection with this Agreement.
10. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed in that state without regard to its
conflict of law rules.
11. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute but one agreement.
12. INDEMNIFICATION. Crane agrees to hold harmless and
indemnify Milbank, Tweed, Hadley & McCloy from and against any and all losses,
claims, damages, liabilities and expenses (including reasonable costs of
investigation and attorneys' fees) arising out of any claim made, or action,
suit or proceeding commenced in connection with this Agreement.
5
<PAGE>
IN WITNESS WHEREOF, the parties have entered into this Agreement
as of the date first written above.
JENNIFER S. PETSCHEK
ALEXANDRA PETSCHEK
SUSAN F.J. PETSCHEK
ELINOR G. BARBER
CHRISTINE BARBER-SMITH
PHILIP G. BARBER
JOHN R. BARBER
MAX E. GELLERT
M. CAROL GELLERT
ROBERT J. GELLERT
ROSA F. GELLERT
YVONNE G. LEREW
DAVID B.S. GELLERT
NICHOLAS P. GELLERT
PAUL K. GELLERT
BRIDGET G. LYONS
DONALD N. GELLERT
PETER J. GELLERT
ANNA M. GELLERT
ALEXANDER G. GELLERT
ANTHONY E. GELLERT
MARTIN F. GELLERT
BARBARA S. GELLERT
HUBERT J. GELLERT
GLENN P. GELLERT
TRACY M. GELLERT
MIDORI A. GELLERT
VICTORIA E.M. GELLERT
JENNIFER A. ROSS
BARBARA C. ROSS
JOHN M. GELLERT
CATHERINE A. GELLERT
By: /S/ ROBERT J. GELLERT
--------------------------------
Robert J. Gellert, as
Attorney-in-Fact for each of
the above-named persons
6
<PAGE>
ELINOR & BERNARD BARBER TRUST
U/I 7/18/89, FBO CHLOE BARBER
SMITH; JOHN R. BARBER, DAVID B.
GELLERT & ROBERT J. GELLERT,
TRUSTEES
ROBERT J. GELLERT, TRUSTEE
U/I 6/13/82, FBO SAGE AND LUCAS
BARBER-SMITH
ELINOR & BERNARD BARBER TRUST
U/I 7/19/89, FBO CECILY MAY
BARBER; JOHN R. BARBER, DAVID
B. GELLERT & ROBERT J. GELLERT,
TRUSTEES
ROBERT J. GELLERT, TRUSTEE UNDER
ARTICLE VIII OF THE WILL OF
NATALIE S. GELLERT, FBO MAX E.
GELLERT
ROBERT J. GELLERT, TRUSTEE
U/I 6/11/85, FBO MAX JAMES
GELLERT
ROBERT J. GELLERT, TRUSTEE
U/I 10/5/73, FBO MAX JAMES
GELLERT
ROBERT J. GELLERT, TRUSTEE
U/I 11/15/73, FBO RUTH M. GELLERT
MAX E. GELLERT TRUST U/I 12/15/92
FBO HEATHER NATALIE GELLERT
GOLDEN, DAVID B. GELLERT, TRUSTEE
MAX E. GELLERT TRUST U/I 12/15/92
FBO HEATHER GOLDEN, DAVID B.
GELLERT, PETER J. GELLERT, ROBERT
J. GELLERT, TRUSTEES
MAX E. GELLERT TRUST U/I 12/22/92,
FBO DALTON JEFFREY GELLERT
GOLDEN; DAVID B. GELLERT, TRUSTEE
MAX E. GELLERT TRUST U/I 12/22/92
FBO DALTON GOLDEN, DAVID B.
GELLERT, PETER J. GELLERT, ROBERT
J. GELLERT, TRUSTEES
TRUST U/I 6/1/89 FBO ANNETTE LEREW
7
<PAGE>
TRUST U/I 6/1/89 FBO TODD LEREW
ROBERT J. GELLERT, TRUSTEE UNDER
PAR. FOURTH A U/W OF ROBERT A.
GELLERT, FBO DONALD N. GELLERT
ROBERT J. GELLERT, TRUSTEE UNDER
PAR. FOURTH B U/W OF ROBERTA
GELLERT, FBO JAMES H. GELLERT
ROBERT J. GELLERT, TRUSTEE UNDER
PAR. FOURTH B U/W OF ROBERTA
GELLERT, FBO LAURA M. GELLERT
ROBERT J. GELLERT, TRUSTEE UNDER
PAR. FOURTH B U/W OF ROBERTA
GELLERT, FBO SUSANNA C. GELLERT
PETER J. GELLERT, TRUSTEE U/I
12/8/76, FBO CHILDREN OF DONALD
N. GELLERT
ROBERT J. GELLERT, TRUSTEE U/I
12/29/69, FBO CHILDREN OF HUBERT
J. GELLERT (MIDORI)
ROBERT J. GELLERT, TRUSTEE U/I
12/6/71, FBO VICTORIA GELLERT
ROBERT J. GELLERT, TRUSTEE U/I
9/13/60, FBO CATHERINE G. ROSS
ROBERT J. GELLERT, TRUSTEE U/I
4/5/84, FBO CHILDREN OF MICHAEL
E. GELLERT
By the following person or persons
as Trustee as applicable for
each of the above Trusts:
/s/ David B. Gellert
/s/ William R. Peters
/s/ Robert J. Gellert
/s/ Peter J. Gellert
__________________________________
8
<PAGE>
/S/ ROBERT J. GELLERT
--------------------------------
ROBERT J. GELLERT, AS DESIGNATED
REPRESENTATIVE
CRANE CO.
By: /S/ DAVID SMITH
------------------
VICE PRESIDENT
CRANE ACQUISITION CORP.
By: /S/ DAVID SMITH
------------------
VICE PRESIDENT
9
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
ELDEC INDIVIDUAL SHAREHOLDERS SHARES 10-FEB-94
<S> <C> <C> <C>
B32000 JENNIFER S. PETSCHEK 1,000 MERRILL LYNCH
B33000 ALEXANDRA PETSCHEK 1,000 MERRILL LYNCH
B40010 SUSAN F.J. PETSCHEK 19,500 MORGAN GUARANTY
C20000 ELINOR G. BARBER 275,490
C23000 CHRISTINE BARBER-SMITH 12,858 KIDDER PEABODY
C24000 PHILIP G. BARBER 10,808
C25000 JOHN R. BARBER 19,508
C30000 MAX E. GELLERT* 648,904
C31100 M. CAROL GELLERT 21,000
C40000 ROBERT J. GELLERT 236,510
C41000 ROSA F. GELLERT 27,468
C42000 YVONNE G. LEREW 17,724
C43000 DAVID B.S. GELLERT 21,524
C44000 NICHOLAS P. GELLERT 21,524
C45000 PAUL K. GELLERT 21,524
C50000 BRIDGET G. LYONS* 332,890
C60000 DONALD N. GELLERT 139,463 CITIBANK
E20000 PETER J. GELLERT 21,103
E21000 ANNA M. GELLERT 24,976
E22000 ALEXANDER G. GELLERT 22,460
E23000 ANTHONY E. GELLERT 24,280
E30000 MARTIN F. GELLERT 72,318
E31000 BARBARA S. GELLERT 28,000 CITIBANK
E40000 HUBERT J. GELLERT 158
E42000 GLENN P. GELLERT 25,040
E43000 TRACY M. GELLERT 25,040
E44000 MIDORI A. GELLERT 23,040
E45000 VICTORIA E.M. GELLERT 21,040
E53000 JENNIFER A. ROSS 2,500
E54000 BARBARA C. ROSS 2,500
F22000 JOHN M. GELLERT 12,359
F23000 CATHERINE A. GELLERT 12,359
---------
2,145,868
* MAX E. GELLERT REDUCED BY 35,000 SHARES AND BRIDGET G. LYONS REDUCED BY
25,000 SHARES - PROSPECTIVE CHARITABLE CONTRIBUTION.
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
ELDEC SHARES HELD BY TRUSTS SHARES 10-FEB-94
<S> <C> <C> <C>
C23401 ELINOR & BERNARD BARBER TRUST U/I 7/18/89
FBO CHLOE BARBER-SMITH; JOHN R. BARBER,
DAVID B. GELLERT & ROBERT J. GELLERT TRUSTEES 3,300
C23801 ROBERT J. GELLERT, TRUSTEE U/I 5/13/82
FBO SAGE AND LUCAS BARBER-SMITH 13,118
C24201 ELINOR & BERNARD BARBER TRUST U/I 7/19/89
FBO CECILY MAY BARBER; JOHN R. BARBER,
DAVID B. GELLERT & ROBERT J. GELLERT TRUSTEES 3,300
C30001 ROBERT J. GELLERT, TRUSTEE UNDER ARTICLE VIII
OF THE WILL OF NATALIE S. GELLERT
FBO MAX E. GELLERT 8,624
C32201 ROBERT J. GELLERT, TRUSTEE U/I 6/11/85
FBO MAX JAMES GELLERT 8,820
C32202 ROBERT J. GELLERT, TRUSTEE U/I 10/5/73
FBO MAX JAMES GELLERT 110,470
C33001 ROBERT J. GELLERT, TRUSTEE U/I 11/15/73
FBO RUTH M. GELLERT 110,353
C33201 MAX E. GELLERT TRUST U/I 12/15/92
FBO HEATHER NATALIE GELLERT GOLDEN,
DAVID B. GELLERT TRUSTEE 9,000
C68001 MAX E. GELLERT TRUST U/I 12/15/92
FBO HEATHER GOLDEN, DAVID B. GELLERT,
PETER J. GELLERT, ROBERT J. GELLERT, TRUSTEES 3,000
C33301 MAX E. GELLERT TRUST U/I 12/22/92
FBO DALTON JEFFREY GELLERT GOLDEN,
DAVID B. GELLERT TRUSTEE 9,000
C33302 MAX E. GELLERT TRUST U/I 12/22/92
FBO DALTON GOLDEN, DAVID B. GELLERT,
PETER J. GELLERT, ROBERT J. GELLERT, TRUSTEES 3,000
C42201 TRUST U/I 6/1/89 FBO ANNETTE LEREW 5,850
C42301 TRUST U/I 6/1/89 FBO TODD LEREW 5,850
C60001 ROBERT J. GELLERT, TRUSTEE UNDER PAR. FOURTH A
U/W OF ROBERTA GELLERT FBO DONALD N. GELLERT 140,952
C62002 ROBERT J. GELLERT, TRUSTEE UNDER PAR. FOURTH B
U/W OF ROBERTA GELLERT FBO JAMES H. GELLERT 9,016
C63002 ROBERT J. GELLERT, TRUSTEE UNDER PAR. FOURTH B
U/W OF ROBERTA GELLERT FBO LAURA M. GELLERT 9,016
C64002 ROBERT J. GELLERT, TRUSTEE UNDER PAR. FOURTH B
U/W OF ROBERTA GELLERT FBO SUSANNA C. GELLERT 9,016
C68001 PETER J. GELLERT, TRUSTEE U/I 12/8/76 FBO
CHILDREN OF DONALD N. GELLERT 50,400
E44001 ROBERT J. GELLERT, TRUSTEE U/I 12/29/69 FBO
CHILDREN OF HUBERT J. GELLERT (MIDORI) 2,000
E45003 ROBERT J. GELLERT, TRUSTEE U/I 12/6/71 FBO
VICTORIA GELLERT 4,000
E50001 ROBERT J. GELLERT, TRUSTEE U/I 9/13/60
FBO CATHERINE G. ROSS 100,310
F28002 ROBERT J. GELLERT, TRUSTEE U/I 4/5/84
FBO CHILDREN OF MICHAEL E. GELLERT 75,600
-------
694,004
AFTER PROSPECTIVE CHARITABLE CONTRIBUTION:
LEOPOLD R. GELLERT FAMILY TRUST 60,000
-------
754,004
</TABLE>
<PAGE>
December 17, 1993
Mr. David S. Smith
Vice President-Corporate Development
Crane Co.
100 First Stamford Place
Stamford, CT 06902
CONFIDENTIALITY AGREEMENT
Dear Sirs:
In connection with your possible interest in a negotiated transaction (the
"Transaction") involving ELDEC Corporation (the "Company"), you have requested
that we or our representatives furnish you or your representatives with
certain information relating to the Company or the Transaction. All such
information (whether written or oral) furnished (whether before or after the
date hereof) by us or our directors, officers, employees, affiliates,
representatives (including, without limitation, financial advisors, attorneys
and accountants) or agents (collectively, "our Representatives") to you or
your directors, officers, employees, affiliates, representatives (including,
without limitation, financial advisors, attorneys and accountants) or agents
or your potential sources of financing for the Transaction (collectively,
"your Representatives") and all analyses, compilations, forecasts, studies or
other documents prepared by you or your Representatives in connection with
your or their review of, or your interest in, the Transaction which contain or
reflect any such information is hereinafter referred to as the "Information".
The term Information will not, however, include information which (i) is or
becomes publicly available other than as a result of a disclosure by you or
your Representatives or (ii) is or becomes available to you on a
nonconfidential basis from a source (other than us or our Representatives)
which, to the best of your knowledge after due inquiry, is not prohibited from
disclosing such information to you by a legal, contractual or fiduciary
obligation to us. We will furnish Information that is reasonably available to
ELDEC and has been or is being (i) generally furnished to other bidders and
(ii) reasonably requested by you in the context of the proposed Transaction.
<PAGE>
Accordingly, you hereby agree that:
1. You and your Representatives (i) will keep the Information confidential
and will not (except as required by applicable law, regulation or legal
process, and only after compliance with paragraph 3 below), without our
prior written consent, disclose any Information in any manner
whatsoever, and (ii) will not use any Information other than in
connection with the Transaction; PROVIDED, HOWEVER, that you may
reveal the Information to your Representatives (a) who have been
identified to and approved by the Company prior to receiving the
Information, (b) who need to know the Information for the purpose of
evaluating the Transaction, (c) who are informed by you of the
confidential nature of the Information and (d) who agree to act in
accordance with the terms of this letter agreement. You will cause your
Representatives to observe the terms of this letter agreement, and you
will be responsible for any breach of this letter agreement by any of
your Representatives.
2. You and your Representatives will not (except as required by applicable
law, regulation or legal process, and only after compliance with
paragraph 3 below), without our prior written consent, disclose to any
person the fact that the Information exists or has been made available,
that you are considering the Transaction or any other transaction
involving the Company, or that discussions or negotiations are taking or
have taken place concerning the Transaction or involving the Company or
any term, condition or other fact relating to the Transaction or such
discussions or negotiations, including, without limitation, the status
thereof. For the purpose of this letter agreement, the term "person"
shall be broadly construed and shall, without limitation, include the
media, governmental entities, any corporation, partnership, group,
individual or other entity, including any potential partners or sources
of financing you may be considering in connection with this transaction.
Before any person receives any Information, the person must enter into a
letter agreement with the Company similar to this agreement regarding
the treatment and confidentiality of the Information.
3. In the event that you or any of your Representatives are requested
pursuant to, or required by, applicable law, regulation or legal process
to disclose any of the Information, you will notify us promptly so that
we may seek a protective order or other appropriate remedy or, in our
sole discretion, waive compliance with the terms of this letter
agreement. In the event that no such protective order or other remedy
is obtained, or that the Company waives compliance with the terms of
this letter agreement, you will furnish only that portion of the
2
<PAGE>
Information which you are advised by counsel is legally required and
will exercise all reasonable efforts to obtain reliable assurance that
confidential treatment will be accorded the Information.
4. If you determine not to proceed with the Transaction, you will promptly
inform our Representative, Morgan Stanley & Co. Incorporated ("Morgan
Stanley"), of that decision and, in that case, and at any time upon the
request of the Company or any of our Representatives, you will either
(i) promptly destroy all copies of the written Information in your or
your Representatives' possession and confirm such destruction to us in
writing, or (ii) promptly deliver to the Company at your own expense all
copies of the written Information in your or your Representatives'
possession. Any oral Information will continue to be subject to the
terms of this letter agreement.
5. You acknowledge that neither we, nor Morgan Stanley or its affiliates,
nor our other Representatives, nor any of our or their respective
officers, directors, employees, agents or controlling persons within the
meaning of Section 20 of the Securities Exchange Act of 1934, as
amended, makes any express or implied representation or warranty as to
the accuracy or completeness of the Information, and you agree that no
such person will have any liability relating to the Information or for
any errors therein or omissions therefrom. You further agree that you
are not entitled to rely on the accuracy or completeness of the
Information and that you will be entitled to rely solely on such
representations and warranties as may be included in any definitive
agreement with respect to the Transaction, subject to such limitations
and restrictions as may be contained therein.
6. You are aware, and you will advise your Representatives who are informed
of the matters that are the subject of this letter agreement, of the
restrictions imposed by the United States securities laws on the
purchase or sale of securities by any person who has received material,
non-public information from the issuer or such securities and on the
communication of such information to any other person when it is
reasonably foreseeable that such other person is likely to purchase or
sell such securities in reliance upon such information.
7. You agree that, for a period of eighteen months from the date of this
letter agreement, neither you nor any of your affiliates will, without
the prior written consent of the Company or its Board of Directors: (i)
acquire, offer to acquire, or agree to acquire, directly or indirectly,
by purchase or otherwise, any voting securities or direct or
3
<PAGE>
indirect rights to acquire any voting securities of the Company or any
subsidiary thereof, or of any successor to or person in control of the
Company, or any assets of the Company or any subsidiary or division
thereof or of any such successor or controlling person; (ii) make, or in
any way participate in, directly or indirectly, any "solicitation" of
"proxies" (as such terms are used in the rules of the Securities
Exchange Commission) to vote, or seek to advise or influence any person
or entity with respect to the voting of, any voting securities of the
Company; (iii) make any public announcement with respect to, or submit a
proposal for, or offer of (with or without conditions) any extraordinary
transaction involving the Company or its securities or assets; (iv)
form, join or in any way participate in a "group" (as defined in Section
13 (d)(3) of the Securities Exchange Act of 1934, as amended) in
connection with any of the foregoing; or (v) unless the Board of
Directors of the Company approves a transaction which would result in a
change of control of the Company and require the approval of the
Company's common stockholders, request the Company or any of our
Representatives, directly or indirectly, to amend or waive any provision
of this paragraph. You will promptly advise the Company of any inquiry
or proposal made to you with respect to any of the foregoing.
8. You agree that, for a period of two years from the date of this letter
agreement, you or any of your authorized agents will not directly
solicit for employment any employee of the Company or any of its
subsidiaries with whom you have had contact or who became known to you
in connection with your consideration of the Transaction.
9. You agree that all (i) communications regarding the Transaction, (ii)
requests for additional information, facility tours or management
meetings, and (iii) discussions or questions regarding procedures with
respect to the Transaction, will be first submitted or directed to
Morgan Stanley and not to the Company. You acknowledge and agree that
(a) we and our Representatives are free to conduct the process leading
up to a possible Transaction as we and our Representatives, in our sole
discretion, determine (including, without limitation, by negotiating
with any prospective buyer and entering into a preliminary or definitive
agreement without prior notice to you or any other person), (b) we
reserve the right, in our sole discretion, to change the procedures
relating to our consideration of the Transaction at any time without
prior notice to you or any other person, to reject any and all proposals
made by you or any of your Representatives with regard to the
Transaction, and to terminate discussions and negotiations with you at
any time and for any reason, and
4
<PAGE>
(c) unless and until a written definitive agreement concerning the
Transaction has been executed, neither we nor any of our Representatives
will have any liability to you with respect to the Transaction, whether
by virtue of this letter agreement, any other written or oral expression
with respect to the Transaction or otherwise.
10. You acknowledge that remedies at law may be inadequate to protect us
against any actual or threatened breach of this letter agreement by you
or by your Representatives, and, without prejudice to any other rights
and remedies otherwise available to us, you agree to the granting of
injunctive relief in our favor without proof of actual damages. In the
event of litigation relating to this letter agreement, if a court of
competent jurisdiction determines in a final, nonappealable order that
this letter agreement has been breached by you or by your
Representatives, then you will reimburse the Company for its costs and
expenses (including, without limitation, legal fees and expenses)
incurred in connection with all such litigation.
11. You agree that no failure or delay by us in exercising any right, power
or privilege hereunder will operate as a waiver thereof, nor will any
single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any right, power or privilege
hereunder.
12. This letter agreement will be governed by and construed in accordance
with the laws of the State of Washington applicable to contracts between
residents of that State and executed in and to be performed in that
State.
13. This letter agreement contains the entire agreement between you and us
concerning the confidentiality of the Information, and no modifications
of this letter agreement or waiver of the terms and conditions hereof
will be binding upon you or us, unless approved in writing by each of
you and us.
5
<PAGE>
Please confirm your agreement with the foregoing by signing and returning to
the undersigned the duplicate copy of this letter enclosed herewith.
Very truly yours,
ELDEC CORPORATION
By:__________________
Name:________________
Title:_______________
Accepted and Agreed as of the date
first written above:
____________________________
CRANE CO.
/s/ R. S. Evans
By:_________________________
R. S. Evans
Name:_______________________
CEO
Title:______________________
6
