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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
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CRSS INC.
(Name of Subject Company)
ATC ACQUISITION CORP.,
A wholly owned subsidiary
of
AMERICAN TRACTEBEL CORPORATION
(Bidder)
COMMON STOCK, $1.00 PAR VALUE
(INCLUDING THE ASSOCIATED RIGHTS)
(Title of Class of Securities)
126 270 10 7 (COMMON STOCK)
(CUSIP Number of Class of Securities)
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on behalf of Bidder)
ALAN N. WAXMAN, ESQ.
SQUIRE, SANDERS & DEMPSEY
520 MADISON AVENUE
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 872-9800
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CALCULATION OF FILING FEE*
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TRANSACTION VALUATION* AMOUNT OF FILING FEE**
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$206,629,350 $41,326
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* For purposes of calculating fee only. This amount assumes the purchase of
14,250,300 Shares (all of Subject Company's outstanding Shares on a fully
diluted basis, excluding shares beneficially owned by Bidder) at $14.50 per
Share.
** 1/50 of 1% of Transaction valuation.
/ / Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: N/A
Form or Registration No.: N/A
Filing Party: N/A
Date Filed: N/A.
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CUSIP NO. 126 270 10 7
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1) Names of Reporting Persons S.S. or I.R.S. Identification Numbers of Above
Person:
American Tractebel Corporation
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2) Check the Appropriate Box if a Member of a Group (See Instructions):
/ / (a)
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/ / (b)
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3) SEC Use Only:
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4) Sources of Funds (See Instructions):
AF AND WC
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5) / / Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(e) or 2(f).
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6) Citizenship or Place of Organization: DELAWARE
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7) Aggregate Amount Beneficially owned by Each Reporting Person: 0
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8) / / Check if the Aggregate Amount in Row 7 Excludes Certain Shares (See
Instructions)
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9) Percent of Class Represented by Amount in Row 7: 0%
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10) Type of Reporting Person (See Instructions): CO
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CUSIP NO. 126 270 10 7
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1) Names of Reporting Persons S.S. or I.R.S. Identification Numbers of Above
Person:
ATC ACQUISITION CORP.
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2) Check the Appropriate Box if a Member of a Group (See Instructions):
/ / (a)
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/ / (b)
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3) SEC Use Only:
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4) Sources of Funds (See Instructions):
AF
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5) / / Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(e) or 2(f).
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6) Citizenship or Place of Organization: DELAWARE
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7) Aggregate Amount Beneficially owned by Each Reporting Person: 0
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8) / / Check if the Aggregate Amount in Row 7 Excludes Certain Shares (See
Instructions)
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9) Percent of Class Represented by Amount in Row 7: 0%
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10) Type of Reporting Person (See Instructions): CO
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ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is CRSS Inc., a Delaware corporation
(the "Company"), which has its principal executive offices at 1177 West
Loop South, Houston Texas 77027.
(b) This statement relates to a tender offer by ATC Acquisition Corp., a
Delaware corporation (the "Purchaser") and a wholly owned subsidiary of American
Tractebel Corporation, a Delaware corporation ("Tractebel"), to purchase all
outstanding shares of common stock, $1.00 par value (the "Shares") of the
Company including the associated Rights ("Rights") upon the terms and subject to
the conditions set forth in the Offer to Purchase and in the related Letter of
Transmittal (collectively, the "Offer"), copies of which are attached hereto as
Exhibits (a)(1) and (a)(2), respectively.
The information set forth in the Introduction and in Section 1 ("Terms of
the Offer") of the Offer to Purchase is incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of Shares;
Dividends") of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) This statement is filed by the Purchaser.
The information concerning the name, state or other place of incorporation,
principal business and address of Purchaser and Tractebel and the information
concerning the name, residence or business address, present principal occupation
or employment, and material occupations during the last five years of the
directors and executive officers of Purchaser and Tractebel are set forth in the
Introduction, Section 9 ("Certain Information Concerning the Purchaser and
Tractebel") and Schedule I of the Offer to Purchase and are incorporated herein
by reference.
(e) and (f) During the last five years neither the Purchaser nor Tractebel
nor, to the best knowledge of the Purchaser and Tractebel, any of the persons
listed in Schedule I to the Offer to Purchase has been (i) convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree, or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any violation
of such laws.
(g) Information concerning the citizenship of each of the directors and
executive officers of the Purchaser and Tractebel is set forth in Schedule I to
the Offer to Purchase and is incorporated herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) Neither Purchaser nor Tractebel nor, to the best knowledge of the
Purchaser and Tractebel, any of the persons listed in Schedule I to the Offer to
Purchase has engaged in any transaction since July 1, 1992 with the Company, any
corporation affiliated with the Company, or any of the Company's executive
officers, directors or affiliates that would be required to be disclosed under
this Item 3(a).
(b) Except as set forth in the Introduction and Section 9 ("Certain
Information Concerning the Purchaser and Tractebel") of the Offer to Purchase;
Section 10 ("Background of the Offer; Contacts with the Company") of the Offer
to Purchase; and Section 11 ("Purpose of the Offer; the Merger; the Merger
Agreement; and Description of Rights") of the Offer to Purchase, which are
incorporated herein by reference, there have been no contacts, negotiations or
transactions since July 1, 1992, between the Purchaser or Tractebel or, to the
best knowledge of the Purchaser and Tractebel, any of the persons listed in
Schedule I to the Offer to Purchase or any subsidiary of the Purchaser or
Tractebel, on the one hand, and the Company or any corporation affiliated with
the Company or any of the Company's executive officers, directors or affiliates,
1
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on the other hand, concerning a merger, consolidation or acquisition, a tender
offer or other acquisition of securities, an election of directors, or a sale or
other transfer of a material amount of assets.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) and (b) The information set forth in Section 12 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
(c) Purchaser and Tractebel do not anticipate that the initial source of
all or any part of the financing related to the Offer will be from loans made in
the ordinary course of business of a bank. However, Purchaser and Tractebel may
seek financing from banks to refinance any nonbank bridge financing obtained in
connection with the Offer.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) Information concerning the purposes of the Offer set forth in
Section 11 ("Purpose of the Offer; the Merger; the Merger Agreement; and
Description of Rights") and Section 12 ("Source and Amount of Funds") of the
Offer to Purchase is incorporated herein by reference.
(f)-(g) The information concerning the possible effects of the Offer set
forth in Section 7 ("Effect of the Offer on Market for the Shares; Stock
Exchange Listing; Exchange Act Registration") is incorporated herein by
reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) and (b) The information set forth in Section 9 ("Certain Information
Concerning the Purchaser and Tractebel") and Section 11 ("Purpose of the Offer;
the Merger; the Merger Agreement; the Stock Option Agreement; Description of
Rights") of the Offer to Purchase is incorporated herein by reference. Except as
set forth in said Sections 9 and 11 of the Offer to Purchase, neither the
Purchaser nor Tractebel nor, to the best knowledge of the Purchaser and
Tractebel, any of the persons listed in Schedule I to the Offer to Purchase or
any associate or majority-owned subsidiary of the Purchaser or Tractebel or any
of the persons so listed, beneficially owns or has any right to acquire directly
or indirectly, any Shares, and neither the Purchaser nor Tractebel, any of the
persons or entities referred to above or any executive officer, director or
subsidiary of any of the foregoing has effected any transaction in the Shares
during the past sixty (60) days.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The description of all contracts, arrangements, understandings or
relationships between the Purchaser or Tractebel or, to the best knowledge of
the Purchaser and Tractebel, any of the persons listed in Schedule I to the
Offer to Purchase or any subsidiary of the Purchaser or Tractebel, on the one
hand, and any person with respect to any securities of the Company set forth in
Section 9 ("Certain Information Concerning the Purchaser and Tractebel") of the
Offer to Purchase; Section 10 ("Background of the Offer; Contacts with the
Company") of the Offer to Purchase; Section 11 ("Purpose of the Offer; the
Merger; the Merger Agreement; Description of Rights") of the Offer to Purchase;
and Section 12 ("Source and Amount of Funds") of the Offer to Purchase is
incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information with respect to persons employed, retained or to be
compensated by the Purchaser or Tractebel or by any person on their behalf to
make solicitations or recommendations in connection with the Offer and the terms
of such employment, retention and compensation set forth in the Introduction and
in Section 16 ("Fees and Expenses") of the Offer to Purchase is incorporated
herein by reference.
2
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ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Although the financial statements of American Tractebel Corporation are not
regarded as material to a decision by a security holder of the Company to sell,
tender or hold the securities being sought in the Offer, reference is hereby
made to the financial information set forth in Section 9 ("Certain Information
Concerning the Purchaser and Tractebel") of the Offer to Purchase, which is
incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) None.
(b) and (c) The information relating to regulatory requirements and
regulatory approvals that may be required and the applicability of antitrust
laws set forth in Section 15 ("Certain Legal Matters") of the Offer to Purchase
is incorporated herein by reference.
(d) The information relating to the applicability of the margin
requirements of Section 7 of the Exchange Act set forth in Section 7 ("Effect of
the Offer on Market for the Shares; Stock Exchange Listing; Exchange Act
Registration") of the Offer to Purchase is incorporated herein by reference.
(e) There are no material pending legal proceedings relating to the Offer.
(f) Additional information with respect to the Offer contained in Exhibits
a(1) and a(2) hereto is incorporated herein in its entirety.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
The following Exhibits are filed herewith:
a(1) Form of Offer to Purchase dated May 18, 1995.
a(2) Form of Letter of Transmittal (together with the accompanying
Substitute Form W-9).
a(3) Form of Notice of Guaranteed Delivery.
a(4) Form of Letter from Goldman, Sachs & Co. to Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.
a(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees to their Clients.
a(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
a(7) Text of Joint Press Release issued on May 17, 1995.
a(8) Form of Summary Publication to be published on May 18, 1995.
c(9) Agreement of Merger among CRSS Inc., American Tractebel Corporation
and ATC Acquisition Corp. dated as of May 16, 1995.
3
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: May 18, 1995
ATC ACQUISITION CORP.
By: /s/ Philippe van Marcke
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Name: Philippe van Marcke
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Title: President
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4
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
CRSS INC.
AT
$14.50 NET PER SHARE
BY
ATC ACQUISITION CORP.,
A WHOLLY OWNED SUBSIDIARY OF
AMERICAN TRACTEBEL CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
FRIDAY, JUNE 16, 1995, UNLESS THE OFFER IS EXTENDED.
THE BOARD OF DIRECTORS OF CRSS INC. HAS DETERMINED, BY THE UNANIMOUS VOTE OF ALL
DIRECTORS PRESENT, THAT THE OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST
INTERESTS OF CRSS INC. AND ITS STOCKHOLDERS AND RECOMMENDS THAT STOCKHOLDERS
ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT THERETO.
The Offer is conditioned upon, among other things, such number of Shares being
validly tendered and not withdrawn which will represent not less than a majority
of the Shares outstanding on a fully diluted basis on the date of purchase.
IMPORTANT
Any stockholder desiring to tender all or any portion of his Shares
(including the associated Rights) should either (a) complete and sign the Letter
of Transmittal or a facsimile thereof in accordance with the instructions in the
Letter of Transmittal, mail or deliver it and any other required documents to
the Depositary, and either deliver the certificates for such Shares to the
Depositary along with the Letter of Transmittal or deliver such Shares pursuant
to the procedures for book-entry transfer set forth in Section 3 or (b) request
his broker, dealer, commercial bank, trust company or other nominee to effect
the transaction for him. 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 desires to tender such Shares.
A stockholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available, or who cannot comply
with the procedures for book-entry transfer on a timely basis, may tender such
Shares by following the procedures for guaranteed delivery set forth in Section
3.
Questions and requests for assistance may be directed to the Dealer
Managers or the Information Agent at their respective addresses and telephone
numbers set forth on the back cover of this Offer to Purchase. Requests for
additional copies of this Offer to Purchase and the Letter of Transmittal may be
directed to the Information Agent or to brokers, dealers, commercial banks or
trust companies.
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The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO.
May 18, 1995
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TABLE OF CONTENTS
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PAGE
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Introduction.......................................................................... 1
1. Terms of the Offer............................................................. 2
2. Acceptance for Payment and Payment for Shares.................................. 3
3. Procedure for Accepting the Offer and Tendering Shares......................... 5
4. Withdrawal Rights.............................................................. 7
5. Certain Federal Income Tax Considerations...................................... 8
6. Price Range of Shares; Dividends............................................... 9
7. Effect of the Offer on Market for the Shares; Stock Exchange Listing; Exchange
Act
Registration................................................................... 9
8. Certain Information Concerning the Company..................................... 10
9. Certain Information Concerning Purchaser and Tractebel......................... 12
10. Background of the Offer; Contacts with the Company............................. 13
11. Purpose of the Offer; the Merger; the Merger Agreement; and Description of
Rights......................................................................... 14
12. Source and Amount of Funds..................................................... 20
13. Dividends and Distributions.................................................... 20
14. Certain Conditions of the Offer................................................ 20
15. Certain Legal Matters.......................................................... 21
16. Fees and Expenses.............................................................. 24
17. Miscellaneous.................................................................. 24
Schedule I............................................................................ I-1
Directors and Executive Officers of Parent and Purchaser.............................. I-1
</TABLE>
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To the Holders of Common Stock of CRSS Inc.:
INTRODUCTION
ATC Acquisition Corp., a Delaware corporation ("Purchaser") and a wholly
owned subsidiary of American Tractebel Corporation, a Delaware corporation
("Tractebel or Parent"), hereby offers to purchase, for $14.50 per Share, net to
the seller in cash, 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"), all outstanding shares of common stock, $1.00 par value
(the "Shares"), of CRSS Inc., a Delaware corporation (the "Company"), including
the associated Rights (the "Rights") issued pursuant to the Rights Agreement
dated as of November 29, 1988, as amended by an Amendment to Rights Agreement
dated as of January 27, 1994 and by a Second Amendment to Rights Agreement dated
as of May 16, 1995 (the "Rights Agreement") between the Company and First
Chicago Trust Company of New York, as successor Trustee for Morgan Shareholders
Services Trust Company (the "Rights Agent"). Unless the context otherwise
requires, all references to Shares shall include the associated Rights, and all
references to such Rights shall include all benefits that may inure to the
holders of Shares or to the holders of such Rights pursuant to the Rights
Agreement. 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, transfer taxes on the purchase of Shares by Purchaser pursuant to
the Offer. Tractebel will pay all charges and expenses of Society National Bank
(the "Depositary"), Morrow & Co., Inc. (the "Information Agent") and Goldman,
Sachs & Co. (the "Dealer Managers") incurred in connection with the Offer.
THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED, BY THE UNANIMOUS VOTE
OF ALL DIRECTORS PRESENT, THAT THE OFFER AND THE MERGER ARE FAIR TO AND IN THE
BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS THAT
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT THERETO.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, SUCH NUMBER OF SHARES
BEING VALIDLY TENDERED AND NOT WITHDRAWN WHICH WILL REPRESENT NOT LESS THAN A
MAJORITY OF THE SHARES OUTSTANDING ON A FULLY DILUTED BASIS ON THE DATE OF
PURCHASE (THE "MINIMUM CONDITION").
The Offer is being made pursuant to the terms of an Agreement of Merger,
dated as of May 16, 1995 (the "Merger Agreement"), among the Company, Purchaser
and Tractebel pursuant to which, after the completion of the Offer and upon the
terms and subject to the conditions of the Merger Agreement, the Purchaser will
be merged with and into the Company (the "Merger") and each Share issued and
outstanding immediately prior to the Merger, other than Shares owned by
Purchaser, Tractebel, Powerfin S.A., the parent of Tractebel ("Powerfin S.A."),
or any direct or indirect subsidiary of same, and Shares as to which appraisal
rights have been properly exercised in accordance with Delaware law, will be
converted into the right to receive cash in an amount per Share equal to the
highest price paid per Share by Purchaser pursuant to the Offer.
The Offer is the first step and the Merger is the second step in
Tractebel's proposed acquisition of the entire equity interest in the Company.
Following completion of the Offer, if required by applicable law, the Merger
will be submitted for adoption by the stockholders of the Company. Under
Delaware law, the affirmative votes of holders of a majority of the outstanding
shares of the Company entitled to vote on the Merger, including any Shares owned
by Purchaser or Tractebel, would be required to adopt the Merger. However, if
Purchaser owns 90% or more of each class of outstanding shares of the Company,
no vote of the stockholders of the Company would be required to consummate the
Merger and the Merger would close as soon as practicable after completion of the
Offer.
On May 11, 1995, the Board of Directors of the Company approved the Merger
Agreement in substantially the form presented to and reviewed by the Board and
recommended acceptance of the
<PAGE> 4
Offer conditioned on receipt of an offer substantially on the terms contemplated
by the draft of the Merger Agreement presented to and reviewed by the Board and
on certain other matters. The Company has represented to Purchaser and Tractebel
in the Merger Agreement that, as of May 9, 1995, 12,809,177 Shares were issued
and outstanding and 1,441,123 Shares were reserved for issuance under
outstanding employee stock options. Based on the foregoing there are a total of
14,250,300 Shares outstanding or issuable upon exercise of outstanding options.
ACCORDINGLY, PURCHASER BELIEVES THAT THE MINIMUM CONDITION WOULD BE SATISFIED IF
AT LEAST 7,125,151 SHARES ("MINIMUM SHARES") ARE VALIDLY TENDERED AND NOT
WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED IN SECTION 1). Purchaser
reserves the right (but shall not be obligated), subject to the rules and
regulations of the Securities and Exchange Commission (the "Commission"), and
subject to obtaining the consent of the Company, to waive or amend the Minimum
Condition and to purchase fewer than the Minimum Shares pursuant to the Offer.
According to the Company's Report on Form 8-A filed on November 30, 1988
and the Company's Report on Form 8-A/A filed on March 29, 1994 with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), on November 29, 1988, the Board of Directors of the Company
declared a dividend distribution of one Right for each outstanding Share to
holders of record of Shares on December 12, 1988. At any time prior to the
earlier of (i) the tenth calendar day following the Stock Acquisition Date (as
defined in Section 11), (ii) December 11, 1998, or (iii) under certain
circumstances, the consummation of a merger or a consolidation of the Company
with or into, or a sale, mortgage or other transfer of more than 50% of the
assets or earning power of the Company to, a person or entity which is not an
Acquiring Person (as defined in Section 11), the Company may redeem the Rights
in whole, but not in part, at a price of $.01 per Right.
The Company has agreed in the Merger Agreement that, not later than
immediately prior to the commencement of the Offer, the Board of Directors of
the Company shall take such action as is necessary to amend the Rights Agreement
to provide that the transaction contemplated by the Offer and the Merger
Agreement will not trigger the Rights issued under the Rights Agreement and to
provide that neither Parent nor Purchaser shall be deemed to be an "Acquiring
Person" under the Rights Agreement. See Section 11 for a more complete
description of the Rights. As set forth in Section 14, the Company's compliance
with the covenants contained in the Merger Agreement is a condition to
Purchaser's obligation to purchase Shares in the Offer. The Company has advised
Purchaser that the amendment has been effected.
1. TERMS OF THE OFFER. Upon the terms and subject to the conditions of the
Offer, Purchaser will accept for payment and will pay for all Shares that are
validly tendered on or prior to the Expiration Date (as hereinafter defined) and
not properly withdrawn in accordance with Section 4 of this Offer to Purchase.
The term "Expiration Date" means 5:00 p.m., New York City time, on Friday, June
16, 1995, unless and until Purchaser, in its sole discretion, 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 Purchaser shall expire.
Subject to the applicable rules and regulations of the Commission and the
terms of the Merger Agreement, Purchaser expressly reserves the right, in its
sole discretion, at any time or from time to time, (a) to extend the period of
time during which the Offer is open by giving oral or written notice of such
extension to the Depositary and during any such extension, all Shares previously
tendered and not purchased or withdrawn in accordance with Section 4 will remain
subject to the Offer; (b) to delay acceptance for payment of or payment for any
Shares, regardless of whether such Shares were theretofore accepted for payment,
or to terminate the Offer and not accept for payment or pay for any Shares not
theretofore accepted for payment or paid for, upon the occurrence of any of the
conditions specified in Section 14, by giving oral or written notice of such
delay in payment or termination to the Depositary; and (c) at any time, or from
time to time, to amend the Offer in any respect. Any extension, delay in
payment, termination or amendment will be followed as promptly as practicable by
public announcement thereof, such announcement in the case of an extension to be
issued no later than 9:00 a.m., New York City time, on the next business day
after the previously
2
<PAGE> 5
scheduled Expiration Date. Without limiting the manner in which Purchaser may
choose to make any public announcement, 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. The reservation by
Purchaser of the right to delay payment for Shares which the Purchaser has
accepted for payment is subject to the provisions of Rule 14e-1(c) under the
Exchange Act, which requires that Purchaser pay the consideration offered or
return the Shares deposited by or on behalf of stockholders promptly after the
termination or withdrawal of the Offer.
If, by the Expiration Date, any or all of the conditions to the Offer (see
Section 14) have not been satisfied or waived, Purchaser may elect to, subject
to complying with applicable rules and regulations of the Commission and with
the terms of the Merger Agreement, (a) extend the Offer and, subject to
applicable withdrawal rights, retain all tendered Shares until the expiration of
the Offer, as extended, subject to the terms of the Offer, (b) waive any or all
of such conditions and, subject to any required extension, accept for payment
all tendered Shares and not extend the Offer, (c) terminate the Offer and not
accept for payment any Shares and return all tendered Shares to tendering
stockholders or (d) delay purchase of or payment for Shares until the
satisfaction or waiver of the conditions of the Offer even though the Offer has
expired.
If Purchaser decides to increase the consideration offered in the Offer to
holders of Shares and the Offer is scheduled to expire at any time earlier than
the expiration of a period ending on the tenth business day from and including
the date that notice of such increase is first published, sent or given to
holders of Shares, the Offer will be extended until the expiration of such
period of ten business days. The Commission has announced that, under Rules
14d-4(c) and 14d-6(d) under the Exchange Act, material changes in the terms of a
tender offer, including waiver of a minimum share condition, or information
concerning the tender offer, may require that information regarding such changes
be disseminated to stockholders and that the tender offer be extended for a
sufficient period of time to allow security holders to consider such material
changes or information in deciding whether to tender, withdraw or hold their
Shares. In the event that Purchaser determines to reduce the number of Shares
required to be tendered and waive or amend the Minimum Condition, to the extent
permitted by the Merger Agreement, or otherwise takes action requiring
dissemination of information or extension of the Offer, Purchaser will
disseminate all material changes in the Offer in accordance with the
requirements of Rule 14d-4 under the Exchange Act and intends to extend the
Offer, to the extent required by applicable law, in order to permit holders of
Shares adequate time to consider such changes. With respect to a change in the
percentage of securities sought of more than 2% of the outstanding Shares or a
change in price, a minimum period of ten business days is generally required to
allow for adequate dissemination to, and consideration by, stockholders. For the
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 agreed to provide Purchaser with the names and addresses of
all record holders of Shares and lists of securities positions and Shares held
in stock depositories. This Offer to Purchase and the related Letter of
Transmittal will be mailed to record holders of Shares and will be furnished to
brokers, banks and similar persons whose names or the names of whose nominees
appear on lists of holders of the Company's Shares or, if applicable, who are
listed as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms and
subject to the conditions of the Offer (including, if the Offer is extended or
amended, the terms and conditions of any such extension or amendment), Purchaser
will purchase, by accepting for payment, and will pay for, all Shares validly
tendered prior to the Expiration Date and not properly withdrawn, as soon as
practicable after the latest to occur of (i) the Expiration Date and (ii) the
satisfaction or waiver of the conditions of the Offer set forth in Section 14;
provided, however, notwithstanding anything herein to the contrary, and even if
all conditions to the Offer have been satisfied or waived, Purchaser may extend
the expiration date of the Offer if (i) at least 80% of the Shares outstanding
3
<PAGE> 6
on a fully diluted basis have been validly tendered for payment, and (ii)
Purchaser reasonably determines such extension is appropriate in order to enable
it to purchase at least 90% of the outstanding Shares on a fully diluted basis
in the Offer and (iii) Purchaser waives all other conditions to the Offer, (in
which case, Purchaser may extend the expiration date for up to ten business days
beyond the time it would otherwise be required to accept validly tendered Shares
for payment). In addition, Purchaser expressly reserves the right to delay
acceptance for payment or payment for Shares in order to comply, in whole or in
part, with any applicable law. In all cases, payment for Shares accepted for
payment pursuant to the Offer will be made only after timely receipt by the
Depositary of (a) 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, Midwest Securities Trust
Company or Philadelphia Depository Trust Company (individually, a "Book-Entry
Transfer Facility" and, collectively, the "Book-Entry Transfer Facilities")
pursuant to the procedures set forth in Section 3, (b) a properly completed and
duly executed Letter of Transmittal (or a facsimile thereof), with any required
signature guarantees and (c) any other documents required by the Letter of
Transmittal.
Pursuant to the requirement of the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act"), certain information is required to be
filed with the Federal Trade Commission (the "FTC") and the Antitrust Division
of the Department of Justice (the "Antitrust Division") and a prescribed waiting
period must expire or be terminated by the FTC and the Antitrust Division prior
to the purchase of Shares by Purchaser pursuant to the Offer. The required
information with respect to the purchase of Shares was filed by Parent on May
18, 1995, and, accordingly, the waiting period under the HSR Act is scheduled to
expire at 11:59 p.m., New York City time, on June 2, 1995. However, prior to the
expiration of such waiting period, the FTC or the Antitrust Division may extend
the waiting period with respect to the filing by requesting additional
information or documentary material from Parent. If such a request is made, the
waiting period will expire at 11:59 p.m., New York City time, on the tenth
calendar day after substantial compliance by Parent. Thereafter, such waiting
period can only be extended by court order or with the consent of Parent. The
waiting period under the HSR Act may be terminated by the FTC and the Antitrust
Division prior to its expiration. Early termination of the waiting period has
been requested by Parent. See Section 15.
Exon-Florio. Under Section 721 of Title VII of the United States Defense
Production Act of 1950, as amended by Section 5021 of the Omnibus Trade and
Competitiveness Act of 1988 and the National Defense Authorization Act for
Fiscal Year 1993 ("Exon-Florio"), the President of the United States is
authorized to prohibit or suspend acquisitions, mergers or takeovers by foreign
persons of persons engaged in interstate commerce in the United States if the
President determines, after investigation, that such foreign persons in
exercising control of such acquired persons might take action that threatens to
impair the national security of the United States and that other provisions of
existing law do not provide adequate authority to protect national security.
Pursuant to Exon-Florio, notice of an acquisition by a foreign person is to be
made to the Committee on Foreign Investment in the United States ("CFIUS"),
which is comprised of representatives of the Departments of the Treasury, State,
Commerce, Defense and Justice, the Office of Management and Budget, the United
States Trade Representative's Office and the Council of Economic Advisors, and
which has been selected by the President to administer Exon-Florio, either
voluntarily by the parties to such proposed acquisition, merger or takeover or
by any member of CFIUS.
A determination that an investigation is called for must be made within 30
days after notification of a proposed acquisition, merger or takeover is first
filed with CFIUS. Any such investigation must be completed within 45 days of
such determination. Any decision by the President to take action must be
announced within 15 days of the completion of the investigation. Although
Exon-Florio neither requires the filing of a notification nor prohibits the
consummation of an acquisition, merger or takeover, if notification is not made,
such an acquisition, merger or takeover thereafter
4
<PAGE> 7
remains indefinitely subject to divestment should the President subsequently
determine that the national security of the United States has been threatened or
impaired. Although Parent and the Company do not believe, based on their review
of publicly available information, that the Offer or the Merger threatens to
impair the national security of the United States, there can be no assurance
that a challenge to the Offer or the Merger based on Exon-Florio will not be
made or, if made, what the result will be. Accordingly, Parent and the Company
intend to file a notification with CFIUS.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares properly tendered as, if and when
Purchaser gives oral or written notice to the Depositary of Purchaser's
acceptance for payment of such Shares. Payment for Shares accepted for payment
pursuant to the Offer will be made by deposit of the purchase price therefor
with the Depositary, which will act as agent for the tendering stockholders for
the purpose of receiving payment from Purchaser and transmitting such payment to
the tendering stockholders. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE
PURCHASE PRICE OF THE SHARES TO BE PAID BY PURCHASER, REGARDLESS OF ANY DELAY IN
MAKING PAYMENT.
If any tendered Shares are not accepted for payment or paid for, for any
reason, including without limitation because of an invalid tender, the
occurrence of an event set forth as a condition in Section 14 or otherwise, or
if Share Certificates are submitted representing more Shares than are tendered,
then, without expense to the tendering stockholder, certificates for such
unpurchased or untendered Shares will be returned (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 accounts maintained at such Book-Entry Transfer Facility),
as promptly as practicable after the expiration or termination of the Offer.
If Purchaser increases the consideration to be paid for Shares pursuant to
the Offer, such increased consideration will be paid for all Shares purchased
pursuant to the Offer, regardless of whether such Shares have been tendered
prior to such increase in consideration.
Purchaser reserves the right to transfer or assign, in whole or from time
to time in part, to Parent, or Powerfin S.A. or to one or more corporations
directly or indirectly wholly owned by Parent or Powerfin S.A., the right to
purchase Shares tendered pursuant to the Offer, but any such transfer or
assignment will not relieve Purchaser of its obligations under the Offer and
will in no way prejudice the rights of tendering stockholders to receive payment
for Shares validly tendered and accepted for payment pursuant to the Offer.
3. PROCEDURE FOR ACCEPTING THE OFFER AND TENDERING SHARES. Except as set
forth below, in order for Shares to be validly tendered pursuant to the Offer,
either (a) the Letter of Transmittal (or a facsimile copy thereof), properly
completed and duly executed with any required signature guarantees and any other
required documents, must be received by the Depositary at one of its addresses
set forth on the back cover of this Offer to Purchase and either (i) the
certificates for such tendered Shares must be received by the Depositary at one
of such addresses or (ii) such Shares must be delivered 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 (b) the tendering stockholder must comply with the guaranteed delivery
procedure set forth below.
The Depositary will establish an account with respect to the Shares at each
Book-Entry Transfer Facility for purposes of the Offer within two business days
after the date of this Offer to Purchase. Any financial institution that is a
participant in the Book-Entry Transfer Facility systems may make book-entry
delivery of the Shares by causing a Book-Entry Transfer Facility to transfer
such Shares into the Depositary's account at such Book-Entry Transfer Facility
in accordance with the Book-Entry Transfer Facility's procedure 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 facsimile thereof), properly completed
and duly executed with any required signature guarantees 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
5
<PAGE> 8
cover of this Offer to Purchase on or prior to the Expiration Date, or the
tendering stockholder must comply with the guaranteed delivery procedure
described below.
Signature Guarantees. If a Letter of Transmittal is signed by the
registered holder (which term, for purposes hereof, shall include any
participant in a Book-Entry Transfer Facility whose name appears on a security
position listing as the owner) of the Shares tendered thereunder and payment is
to be made directly to such registered holder, or if Shares are tendered for the
account of a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc., or by a commercial bank or
trust company having an office or correspondent in the United States (each of
the foregoing being referred to as an "Eligible Institution"), no signature
guarantee is required. In all other cases, all signatures on the Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction 1 of
the Letter of Transmittal.
If a Share Certificate is registered in the name of a person other than the
signer of the Letter of Transmittal, or if payment is to be made (or
certificates for unpurchased Shares are to be returned) to a person other than
the registered owner, the Share Certificates must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name or names of
the registered owner or owners appear(s) on the certificates, with the
signature(s) on the certificates or stock powers guaranteed by an Eligible
Institution. See Instruction 5 of the Letter of Transmittal.
The method of delivery of Share Certificates and all other required
documents, including delivery through any Book-Entry Transfer Facility, is at
the election and risk of the tendering stockholder. In all cases, sufficient
time should be allowed to ensure timely delivery.
Guaranteed Delivery. If a stockholder wishes to tender Shares pursuant to
the Offer and the certificate(s) for such Shares are not immediately available,
or time will not permit all required documents to reach the Depositary prior to
the Expiration Date, or the procedures for book-entry transfer cannot be
completed on a timely basis, such Shares may nevertheless be tendered, if all of
the following conditions are satisfied:
(a) such tender is made by or through an Eligible Institution;
(b) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by Purchaser herewith,
is received by the Depositary as provided below on or prior to the
Expiration Date; and
(c) certificates representing all tendered Shares, in proper form for
transfer by delivery, or Book-Entry Confirmation, in each case together
with a properly completed and duly executed Letter of Transmittal (or a
facsimile thereof), with any required signature guarantees, and any other
documents required by the Letter of Transmittal, are received by the
Depositary within five (5) New York Stock Exchange, Inc. ("NYSE") trading
days after the date of execution of such Notice of Guaranteed Delivery.
To prevent back up federal income tax withholding with respect to payment
of the purchase price of Shares purchased pursuant to the Offer, a stockholder
must provide the Depositary with his correct taxpayer identification number or
certify that he is not subject to back up federal income tax withholding by
completing the Substitute Form W-9 included in the Letter of Transmittal. See
Instruction 9 of the Letter of Transmittal.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, telex, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in such
Notice of Guaranteed Delivery.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of the
certificates representing such Shares, or of a Book-Entry Confirmation of the
delivery thereof the Letter of Transmittal (or a facsimile
6
<PAGE> 9
thereof), properly completed and duly executed with any required signature
guarantees, and any other documents required by the Letter of Transmittal.
Appointment of Proxy. By executing a Letter of Transmittal, a tendering
stockholder irrevocably appoints designees of Purchaser as his 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
Purchaser and with respect to any and all other shares or other securities
issued or issuable in respect of such Shares on or after May 16, 1995. Such
appointment will be effective when, and only to the extent that, Purchaser
accepts such Shares for payment and pays therefor by depositing the purchase
price thereof with the Depositary as agent for the tendering stockholder. Upon
such acceptance for payment, and payment, all prior proxies given by such
stockholder with respect to such Shares (and such other shares and securities)
will be revoked, without further action, and no subsequent proxies may be given
(and, if given, will not be deemed effective) by such stockholder. Upon such
acceptance for payment, and payment, the designees of the Purchaser will be
empowered to exercise all voting and other rights of such stockholder as they in
their sole discretion may deem proper at any annual or special meeting of the
Company's stockholders, or any adjournment or postponement thereof, or in
connection with any action that may be taken by consent in lieu of any such
meeting or otherwise held after acceptance for payment of and payment for shares
tendered by such stockholder. Purchaser reserves the right to require that, in
order for Shares to be validly tendered, immediately upon the acceptance for
payment of such Shares the Purchaser will be able to exercise full voting rights
with respect to such Shares.
The acceptance for payment by Purchaser of Shares pursuant to any of the
procedures described above will constitute a binding agreement between the
tendering stockholder and Purchaser in accordance with the terms and subject to
the conditions of the Offer.
Determination of Validity. All questions as to the form, validity,
eligibility (including timeliness of receipt) and acceptance for payment of any
tendered Shares will be determined by Purchaser, in its sole discretion, which
determination shall be final and binding on all parties. Purchaser reserves the
absolute right to reject any or all tenders of any particular Shares determined
by it not to be in proper form or the acceptance for payment of which may, in
the opinion of Purchaser's counsel, be unlawful. Purchaser also reserves the
absolute right to waive any of the conditions of the Offer, to the extent
permitted by the Merger Agreement, or any defect or irregularity in the tender
of any particular Shares. None of Purchaser, its affiliates, the Depositary, the
Dealer Managers, the Information Agent or any other person shall be under any
duty to give notification of any defects or irregularities in tenders and shall
not incur any liability for failure to give any such notification. No tender of
Shares will be deemed to have been validly made until all defects and
irregularities relating thereto have been cured or waived. 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.
Tax Withholding. Under Federal tax laws, the Depositary will be required to
withhold 31% of the amount of any payments made to certain stockholders pursuant
to the Offer. To avoid such Federal income tax backup withholding with respect
to cash received by a stockholder pursuant to the Offer, a tendering stockholder
must provide the Depositary with its correct taxpayer identification number or
certify that he is not subject to Federal income tax backup withholding by
completing the Substitute Form W-9 included with the Letter of Transmittal. See
Instruction 9 and the information under the caption "Important Tax Information"
in the Letter of Transmittal.
4. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section 4, all
tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered
pursuant to the Offer may be withdrawn pursuant to the procedures set forth
below at any time prior to the Expiration Date. Unless theretofore paid pursuant
to the Offer, Shares may also be withdrawn at any time after July 17, 1995.
7
<PAGE> 10
For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase. Any 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
the name of the registered holder, if different from the name of the person who
tendered the Shares. If Share Certificates have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such Share
Certificates, the tendering stockholders must also submit the serial numbers on
the particular Share Certificates to be withdrawn and the signatures on the
notice of withdrawal must be guaranteed by an Eligible Institution (except, with
respect to signature guarantees, in the case of Shares tendered by an Eligible
Institution). If Shares have been delivered pursuant to the procedures for
book-entry transfer as set forth in Section 3, any notice of withdrawal must
also specify the name and number of the account at any applicable Book-Entry
Transfer Facility to be credited with the withdrawn Shares and otherwise comply
with such Book-Entry Transfer Facility's procedures.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser, in its sole discretion,
which determination shall be final and binding on all parties. None of
Purchaser, its affiliates, the Dealer Managers, the Depositary, the Information
Agent or any other person will be under any duty to give notification of any
defects or irregularities in any notice of withdrawal or incur any liability for
failure to give such notification. Any Shares properly withdrawn will be deemed
not to have been tendered for purposes of the Offer. However, withdrawn Shares
may be retendered at any subsequent time prior to the Expiration Date by
following any of the procedures described in Section 3.
If Purchaser extends the Offer or is delayed in its payment for Shares, for
any reason, then, without prejudice to Purchaser's rights hereunder, the
Depositary may retain tendered Shares on behalf of Purchaser and such Shares may
not be withdrawn except to the extent that tendering stockholders are entitled
to withdrawal rights as set forth in this Section 4.
5. CERTAIN FEDERAL INCOME TAX CONSIDERATIONS. The receipt of cash for
Shares pursuant to the Offer (or in the Merger) will be a taxable transaction
for federal income tax purposes in which a selling stockholder will be required
to allocate the cash received between the Shares surrendered in proportion to
their fair market value (and may also be a taxable transaction under applicable
state, local or other tax laws). In general, a stockholder will recognize gain
or loss for such purposes equal to the difference between his tax basis for the
Shares he sells in such transaction and the amount of cash received therefor.
Assuming that the Shares are held by a stockholder as capital assets, such gain
or loss will be long-term capital gain or loss if, on the date of the sale, such
Shares have been held for more than one year.
Long-term capital gains recognized by individuals are currently taxable at
a maximum federal income tax rate of 28%, and the maximum marginal federal
income tax rate for individuals is 39.6%. Long-term capital gains recognized by
corporations are currently taxable at the same federal rates as ordinary income
and the maximum marginal federal income tax rate for corporations is 35%.
However, many higher income individuals and corporations will be subject to
higher effective marginal federal income tax rates resulting from the phaseout
of certain tax benefits and graduated tax rates. Excess short-term and long-term
capital losses generally may be deducted by a noncorporate taxpayer against
ordinary income only in an amount not to exceed $3,000.00 in any year. Capital
losses are deductible by corporations only against capital gains.
The foregoing discussion may not be applicable to a stockholder who
acquired Shares pursuant to the exercise of employee stock options or otherwise
as compensation, or to any individual stockholder who is not a citizen or
resident of the United States, or to a foreign corporation if its ownership of
Shares is not effectively connected with the United States trade or business of
such corporation.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND IS BASED UPON PRESENT LAW. STOCKHOLDERS ARE URGED TO
CONSULT THEIR TAX ADVISORS TO DETERMINE
8
<PAGE> 11
THE SPECIFIC TAX CONSEQUENCES OF THE OFFER AND THE MERGER TO THEM, INCLUDING THE
APPLICATION AND EFFECT OF STATE AND LOCAL INCOME AND OTHER TAX LAWS.
6. PRICE RANGE OF SHARES; DIVIDENDS. The Shares are traded on the NYSE.
The following table sets forth, for the periods indicated, the high and low sale
prices per Share on the NYSE composite tape, and the amount of cash dividends
paid per Share as reported in published financial sources.
<TABLE>
<CAPTION>
CASH
HIGH LOW DIVIDENDS
---- --- ---------
<S> <C> <C> <C>
Fiscal Year Beginning July 1, 1992:
First Quarter............................................. $10 3/4 $7 $ .03
Second Quarter............................................ 11 1/8 7 .03
Third Quarter............................................. 11 8 1/2 .03
Fourth Quarter............................................ 9 5/8 7 1/2 .03
Fiscal Year Beginning July 1, 1993:
First Quarter............................................. 10 8 1/4 .03
Second Quarter............................................ 10 3/8 8 3/8 .03
Third Quarter............................................. 13 1/4 9 3/4 .03
Fourth Quarter............................................ 12 3/8 9 1/2 .03
Fiscal Year Beginning July 1, 1994 (through May 16, 1995):
First Quarter............................................. 11 5/8 10 .03
Second Quarter............................................ 11 7/8 10 .03
Third Quarter............................................. 10 1/2 9 1/8 .03
Fourth Quarter
(through May 16, 1995).................................. 10 1/8 9 .03*
<FN>
- ---------------
* Such dividend is payable May 25, 1995 to stockholders of record on May 15,
1995 and may be retained by such stockholders regardless of whether or when
they tender their shares.
</TABLE>
On May 16, 1995, the last full trading day prior to the announcement of the
Merger Agreement and Purchaser's intention to make the Offer, the reported
closing sales price on the NYSE Composite Tape was $10 per Share.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
7. EFFECT OF THE OFFER ON MARKET FOR THE SHARES; STOCK EXCHANGE LISTING;
EXCHANGE ACT REGISTRATION. The purchase of Shares pursuant to the Offer will
reduce the number of Shares that might otherwise trade publicly and will reduce
the number of holders of Shares, which could adversely affect the liquidity and
market value of the remaining Shares held by the public.
Depending on the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the listing requirements of the NYSE and may,
therefore, be delisted from the NYSE. The NYSE's published guidelines indicate
that the NYSE would consider delisting the Shares if, among other things, the
number of record holders of at least 100 Shares should fall below 1,200 or if
the number of publicly-held Shares (exclusive of holdings of officers, directors
or their immediate families and other concentrated holdings of 10% or more)
should fall below 600,000, or if the aggregate market value of such publicly
held Shares should fall below $5 million. Depending upon the number of Shares
purchased pursuant to the Offer, the Shares may no longer meet the requirements
for continued listing on the NYSE. If not delisted sooner, the Shares will be
delisted from the NYSE after the Merger.
To the extent that the Shares are delisted from any exchange, the markets
therefor could be adversely affected. If the Shares were no longer to trade on
any national securities exchange, it is possible that the Shares would continue
to trade on other securities exchanges or in the over-the-counter market and
that price quotations for the Shares would be reported through the National
Association of Securities Dealers' Automated Quotation System ("NASDAQ") or
other sources. The extent of the public market for the Shares and the
availability of such quotations would, however, depend upon the number of Shares
held by stockholders other than Purchaser and its
9
<PAGE> 12
affiliates and officers and directors of the Company, the number of stockholders
and/or the aggregate market value of the Shares remaining at such time, the
interest in maintaining a market in the Shares on the part of securities firms,
the possible termination of registration under the Exchange Act, as described
below, and other factors.
The Shares are currently "margin securities" as that term is defined under
the rules of the Board of Governors of the Federal Reserve System (the "Federal
Reserve"), which has the effect, among other things, of allowing brokers to
extend credit on the collateral of such securities. Depending upon factors
similar to those described above regarding listing and market quotations,
following the Offer, the Shares might no longer constitute "margin securities"
for purposes of the Federal Reserve's margin regulations, in which event the
Shares could no longer be used as collateral for loans made by brokers.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application by the Company to the Commission
if there are fewer than 300 record holders of Shares and if the Shares are not
listed on a national securities exchange. 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 to the
Commission and would make certain provisions of the Exchange Act, such as the
requirement to furnish a proxy statement in connection with a stockholders'
meeting pursuant to Section 14(a), and the requirements of Rule 13e-3 under the
Exchange Act with respect to going private transactions, no longer applicable
with respect to the Shares. Moreover, if the Company does not have a class of
equity security registered pursuant to Section 12 of the Exchange Act, the
profit recovery provision of Section 16(b) of the Exchange Act would no longer
be applicable to the Shares. If registration of the Shares under the Exchange
Act were terminated, the Shares would no longer be "margin securities" or
eligible for listing or NASDAQ reporting. Further, the ability of affiliates of
the Company and of persons holding Shares that are "restricted securities" of
the Company to dispose of such Shares under Rule 144 promulgated under the
Securities Act of 1933, as amended (the "Securities Act"), may be impaired. In
the event the Shares are eligible for termination of registration, Parent
intends to cause the Company to apply for such termination as soon as possible
following the Offer.
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 taken from or based upon
publicly available documents and records on file with the Commission and other
public sources and is qualified in its entirety by reference thereto. Purchaser
takes no 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 that may have
occurred or may affect the significance or accuracy of any such information but
which are unknown to Purchaser.
The Company and its subsidiaries are engaged in the business of managing,
owning and operating energy (power and steam) and process facilities and are
also involved in the construction management and maintenance of projects in
which the Company has an ownership interest. The Company is a Delaware
corporation with its principal executive offices located at 1177 West Loop
South, Suite 800, Houston, Texas 77027.
The following selected consolidated financial information relating to the
Company and its subsidiaries has been taken or derived from the audited
financial statements contained in the Company's Annual Report on Form 10-K for
the fiscal year ended June 30, 1994 (the "1994 10-K") and the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1995 (the
"10-Q"). More comprehensive financial information is included in the Company's
1994 10-K, the 10-Q and in other documents filed by the Company with the
Commission. The financial information that follows is qualified in its entirety
by reference to such reports and other documents, including the financial
statements and related notes contained therein. Such reports and other documents
may be examined and copies may be obtained from the offices of the Commission in
the manner set forth below.
10
<PAGE> 13
CRSS INC.
SELECTED FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30
---------------------------------------
1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
Revenues............................................... $ 28,419 $ 37,975 $ 30,519
Equity income in partnerships.......................... 14,327 8,038 5,027
Operating income from continuing operations............ 14,096 13,610 4,676
Earnings (loss) from continuing operations............. 3,718 4,318 (1,085)
Net earnings (loss).................................... 1,474 (5,427) (17,992)
Primary and fully diluted earnings (loss) per common
share:
Earnings from continuing operations............... 0.28 0.33 (0.08)
Net earnings (loss)............................... 0.11 (0.41) (1.35)
Dividends per common share............................. 0.12 0.12 0.12
Equity investment in partnerships...................... 61,538 24,358 14,476
Total assets........................................... 210,672 219,733 208,242
Non-recourse project financing......................... 60,937 63,238 65,368
Other long-term obligations............................ 7,845 8,055 5,635
</TABLE>
The Company reported the following for its fiscal third quarter ended March
31, 1995, and for the nine months then ended, as compared to the like periods of
the prior fiscal year.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
MARCH 31 MARCH 31
----------------------- -----------------------
1995 1994 1995 1994
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues...................................... $ 7,254 $ 7,067 $ 21,768 $ 22,001
Equity income in partnerships................. 4,817 3,216 14,272 10,802
Operating income from continuing operations... 3,207 3,671 10,026 10,229
Earnings from continuing operations........... 1,108 1,056 3,204 2,486
Net earnings (loss)........................... 1,108 1,300 (5,519) 3,514
Primary and fully diluted earnings (loss) per
common share:
Earnings from continuing operations...... 0.09 0.08 0.25 0.19
Net earnings (loss)...................... 0.09 0.10 (0.42) 0.27
Dividends per common share.................... 0.03 0.03 0.09 0.09
</TABLE>
<TABLE>
<CAPTION>
AS OF
MARCH
31,
1995
--------
<S> <C>
Equity investment in partnerships............. $ 62,672
Total assets.................................. 195,709
Non-recourse project financing................ 59,098
Other long-term obligations................... 5,227
</TABLE>
The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith is required to file periodic reports, proxy
statements and other information
11
<PAGE> 14
with the Commission relating to its business, financial condition and other
matters. Information as of particular dates concerning the Company's operating
results, financial condition, directors and officers, their compensation, stock
or stock options granted to them, the principal holders of the Company's
securities, and 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 are available
for inspection at the public reference facilities maintained by the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following regional
offices of the Commission: Seven World Trade Center, 13th Floor, New York, New
York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material may be obtained, by mail, upon payment of the
Commission's customary charges, by writing to its principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549. Such material is also available for
inspection at the NYSE, 20 Broad Street, New York, New York 10005.
9. CERTAIN INFORMATION CONCERNING PURCHASER AND TRACTEBEL. Purchaser is a
Delaware corporation that has not carried on any significant activities other
than in connection with the Offer. The principal office of Purchaser is located
at 12 East 49th Street, New York, New York 10017. Purchaser presently has no
significant assets or liabilities other than those related to the Offer and the
Merger. Since Purchaser has minimal assets and capitalization, no meaningful
financial information is available.
Purchaser is a wholly owned subsidiary of Tractebel. The principal office
of Tractebel is 12 E. 49th Street, New York, New York 10017. Parent has been
active in the independent power business and owns a 50% or greater interest in
six power facilities. These facilities include four wood-fired projects in New
England, one hydroelectric facility also located in New England and, through
Parent's Canadian affiliate, a gas-fired cogeneration facility under
construction in Windsor, Ontario.
The following summarized consolidated financial information of Tractebel
and its consolidated subsidiaries has been derived from the audited consolidated
financial statements for the years ended December 31, 1994 and December 31,
1993, which have been prepared in conformity with generally accepted accounting
principles ("GAAP").
AMERICAN TRACTEBEL CORPORATION AND SUBSIDIARIES
SUMMARIZED CONSOLIDATED BALANCE SHEETS
AT DECEMBER 31, 1994 AND 1993
<TABLE>
<CAPTION>
1994 1993
---- ----
(IN MILLIONS)
<S> <C> <C>
Assets:
Current assets......................................................... $ 25 $ 22
Properties and equipment............................................... 90 93
Other assets........................................................... 51 48
---- ----
Total....................................................................... $166 $163
===== =====
Liabilities and stockholders' equity:
Current liabilities.................................................... $ 8 $ 10
Noncurrent liabilities................................................. 99 99
Stockholders' equity................................................... 59 54
---- ----
Liabilities and stockholders' equity........................................ $166 $163
===== =====
</TABLE>
12
<PAGE> 15
AMERICAN TRACTEBEL CORPORATION AND SUBSIDIARIES
SUMMARIZED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
(IN MILLIONS)
<S> <C> <C> <C>
Revenues................................................................ $57 $53 $33
Other income............................................................ 3 2 1
---- ---- ----
Total.............................................................. 60 55 34
Costs and expenses...................................................... 51 47 29
Income taxes............................................................ 3 2 2
---- ---- ----
Net income......................................................... $ 6 $ 6 $ 3
</TABLE>
Neither Purchaser nor Tractebel, nor, to the best knowledge of Purchaser
and Tractebel, any of the persons listed in Schedule I, nor any associate or
subsidiary of Purchaser or Tractebel or any person so listed, beneficially owns
or has the right to acquire any Shares. Neither Purchaser nor Tractebel nor, to
the best knowledge of Purchaser and Tractebel, (a) any person listed in Schedule
I, (b) any associate or subsidiary of Purchaser or Tractebel or any person
listed in Schedule I, or (c) any director, executive officer or majority owned
subsidiary of any person named in (a) or (b) above, has effected any transaction
in the Shares during the past 60 days.
Except as set forth in this Offer to Purchase, neither Purchaser nor
Tractebel, nor, to the best knowledge of Purchaser and Tractebel, any person
listed in Schedule I, has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Company, including, but not limited to, any contract, arrangement, understanding
or relationship concerning the transfer or the voting of any securities of the
Company, joint ventures, loan or option arrangements, puts or calls, guarantees
of loans, guarantees against loss, guarantees of profits, division of losses or
profits, the giving or withholding of proxies, or voting trusts. Except as set
forth in this Offer to Purchase, there have been no contracts, negotiations or
transactions between Tractebel or any of its subsidiaries or, to the best of
Tractebel's knowledge, any of the persons listed in Schedule I, on the one hand,
and the Company or its affiliates on the other hand, concerning a merger,
consolidation or acquisition, a tender offer or other acquisition of securities,
an election of directors or a sale or other transfer of a material amount of
assets. Except as set forth in this Offer to Purchase, neither Purchaser nor
Tractebel, nor to the best knowledge of Purchaser and Tractebel, any of the
persons listed in Schedule I, has had any transactions with the Company or any
of its executive officers, directors or affiliates that would require disclosure
under the rules and regulations of the Commission.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY. In December 1994
and January 1995, Philippe van Marcke, President of Parent, received two phone
calls from Morgan Stanley & Co. Incorporated about an opportunity to enter into
discussions for the acquisition, merger or other business combination with the
Company. Mr. van Marcke expressed an interest in pursuing that discussion and,
as a condition to obtaining further information about the Company in order to
evaluate a proposed transaction, Parent executed a Confidentiality Agreement
dated as of January 20, 1995 ("Confidentiality Agreement"). Under the
Confidentiality Agreement, Parent is required to keep confidential certain
information relating to the Company and may not use such information other than
in connection with the proposed transaction or as otherwise authorized pursuant
to the Merger Agreement. In the event Parent decides not to proceed with the
transaction, the Confidentiality Agreement requires Parent to return all such
information to the Company and to destroy all other copies of written
information. The terms of the Confidentiality Agreement also provide that, for a
period of two years from the date of the agreement, except in certain
circumstances described in the Merger Agreement, Parent and its affiliates may
not, without the prior written consent of the Company, (i) acquire, offer to
acquire or agree to acquire any voting securities or assets of the Company or
any subsidiary thereof, or of any successor to or person in control of the
Company; (ii)
13
<PAGE> 16
make or participate in any solicitation of proxies to vote, or seek to advise or
influence any person or entity with respect to the voting of, any voting
securities of the Company; or (iii) make any public announcement with respect
to, or submit a proposal for, or offer of, any extraordinary transaction
involving the Company or its securities or assets.
At a meeting in Houston on January 25, 1995, Mr. van Marcke and other
representatives from Parent met with Bruce Wilkinson, James Stewart and William
Gardiner, the Chief Executive Officer, President and Chief Financial Officer,
respectively, of the Company, to discuss the possibility of a business
combination.
Following the January 25 meeting, Mr. van Marcke obtained the approval of
Tractebel's parent, Powerfin, S.A., to continue to evaluate a proposed
transaction with the Company. Parent retained Goldman, Sachs & Co. as financial
advisors pursuant to the terms of an engagement letter dated February 24, 1995.
See Section 16 for a description of the terms of the engagement letter.
On March 6, Mr. van Marcke and other officers of Parent met again with Mr.
Wilkinson and other Company officers in Houston. At that meeting, Mr. van Marcke
indicated that Parent could probably offer no more than the market price for
Company stock, but that Parent wanted to continue to evaluate the possibility of
an acquisition.
On or about March 14, Mr. Wilkinson telephoned Mr. van Marcke and indicated
that the Company's Executive Committee would be meeting on March 30 and unless
the Company received a stronger indication of interest from Parent, the Company
would proceed with discussions with other parties or decide to discontinue such
discussions.
On March 28 and 29, 1995, Mr. van Marcke discussed orally with Mr.
Wilkinson a price range of $11 to $12 per Share. On March 30, 1995, Mr. van
Marcke formally advised Mr. Wilkinson that Parent's preliminary investigation of
the Company indicated a price range of $11 to $12 per Share. Mr. Wilkinson
reported this to the Company's Executive Committee at a meeting held that same
day, and then reported back to Mr. van Marcke that such price range was
considered unacceptable by the Company's Executive Committee.
On April 7, Messrs. van Marcke and Wilkinson met in Houston where they
agreed to commence more extensive due diligence efforts to determine a price for
a proposal to acquire the Company. During the week of April 10, Parent's
representatives, including its legal and financial advisors, met with Company
representatives to review the Company's financial and business information. Mr.
van Marcke also met with Mr. Wilkinson during this week to discuss the status of
the due diligence efforts.
At an April 23 meeting in Houston between Daniel Deroux, Managing Director
and Chief Executive Officer of Parent, and Mr. van Marcke and Messrs. Wilkinson,
Stewart, Gardiner and other Company officers, Mr. van Marcke indicated that
Tractebel could not make a final decision to proceed with an acquisition by the
Company's April 27 Board meeting. However, it was decided that Mr. van Marcke
would make a presentation at the Company's April 27 Board meeting at which he
would discuss the terms and the timing for formalizing the proposed acquisition.
The presentation was made at the Board meeting during which the Board scheduled
another meeting to be held on May 11.
During the period from May 1 through May 11, Parent's representatives
toured the Company's facilities, continued their evaluation of the Company's
business and operations and entered into discussions about the terms of the
Merger Agreement. During this time, Mr. van Marcke informed Mr. Wilkinson that
he would be meeting with Powerfin S.A. principals in Brussels to discuss final
approval of the proposed tender offer.
On May 15, 1995, the Board of Directors of Parent approved the Offer and
the Merger subject to approval of its European affiliates. Such approval was
obtained on May 16, 1995.
11. PURPOSE OF THE OFFER; THE MERGER; THE MERGER AGREEMENT; AND DESCRIPTION
OF RIGHTS. The purpose of the Offer and the Merger Agreement is to facilitate
the acquisition by Parent of the entire
14
<PAGE> 17
equity interest in the Company. The purpose of the Merger is to acquire all
outstanding Shares not tendered and purchased pursuant to the Offer.
The Merger Agreement provides that Parent will cause Purchaser to make the
Offer, and that the Company consents to the Offer. Subject to the terms and
conditions of the Merger Agreement and the Delaware General Corporation Law, at
the Effective Time (as defined below), Purchaser will be merged with and into
the Company and the Company will be the surviving corporation (the "Surviving
Corporation") and will continue to be governed by the laws of the State of
Delaware. The date and time when the certificate of merger is filed with the
Secretary of State of the State of Delaware or such later date as is specified
in the certificate of merger is referred to herein as the "Effective Time." The
Merger Agreement provides that at the Effective Time, each then outstanding
Share, other than Shares owned by Parent, Powerfin S.A. or Purchaser, or any
direct or indirect subsidiary of same, and Shares as to which appraisal rights
have been properly exercised in accordance with Delaware law, will be converted
into the right to receive $14.50 in cash, or any greater amount paid to
stockholders pursuant to the Offer. Any Shares owned by Parent, Powerfin S.A. or
Purchaser, or any direct or indirect subsidiary of same, and Shares held in the
Company's treasury, will be canceled in the Merger without payment of any
consideration therefor. Each outstanding share of common stock of Purchaser will
be converted into and become a share of common stock of the Surviving
Corporation, which thereafter will constitute all of the issued and outstanding
shares of capital stock of the Surviving Corporation.
The Merger Agreement provides that in the event Purchaser becomes the
beneficial owner of at least a majority of the Shares, Parent will be entitled,
subject to compliance with applicable law, to designate at its option up to that
number of directors, rounded up to the nearest whole number, of the Company's
Board of Directors as will make the percentage of the Company's directors
designated by Parent equal to the percentage of outstanding Shares held by
Parent and any of its direct or indirect wholly owned subsidiaries (including
Purchaser). The Company will, upon the request of Parent, promptly increase the
size of its Board of Directors and/or use reasonable efforts to secure the
resignation of such number of directors as is necessary to enable Parent's
designees to be elected to the Company's Board of Directors and shall use
reasonable efforts to cause Parent's designees to be so elected, subject in all
cases to Section 14(f) of the Exchange Act, provided that, prior to the
Effective Time, the Company will use reasonable efforts to assure that the
Company's Board of Directors always has (at the Company's election) at least
three members who are directors of the Company as of the date of the Merger
Agreement.
If necessary to consummate the Merger under applicable law and the
Company's Certificate of Incorporation and By-Laws, promptly after the purchase
of Shares pursuant to the Offer, the Company has agreed to take all action
necessary to convene a meeting of its stockholders to consider and vote upon
adoption of the Merger Agreement. Subject to its fiduciary duties, the Board of
Directors of the Company has agreed to recommend such adoption. Purchaser and
Parent have agreed that at such meeting they will vote or cause to be voted all
Shares directly or indirectly held by them in favor of the Merger. The
affirmative vote of the holders of a majority of the outstanding Shares is
required under the Delaware General Corporation Law and the Company's
Certificate of Incorporation and By-Laws to adopt the Merger Agreement.
Under the Merger Agreement, the Company has agreed that not later than
immediately prior to the commencement of the Offer, the Board of Directors of
the Company will take all such action as is necessary to amend the Rights
Agreement to provide that the transaction contemplated by the Offer and Merger
Agreement will not trigger the Rights issued under the Rights Agreement and to
provide that neither Parent nor Purchaser shall be deemed to be an "Acquiring
Person" under the Rights Agreement. The Company has advised Purchaser and Parent
that it has adopted such an amendment. In addition and except as contemplated in
the preceding sentence, the Company has agreed not to take any action that
would, or is intended to, alter or amend the Rights Agreement or redeem the
Rights with respect to an acquisition of Shares, other than pursuant to the
Offer, unless the Board of Directors of the Company has determined that such
action or redemption is necessary in order for members of the Board to satisfy
their fiduciary duties.
15
<PAGE> 18
The Company has agreed pursuant to the Merger Agreement that prior to the
consummation of the Merger it will, and will cause its subsidiaries to, conduct
their respective businesses only in the ordinary course and will use
commercially reasonable efforts to preserve intact the business organization of
the Company and its subsidiaries, to keep available the services of its and
their present officers and key employees, and to preserve the goodwill of those
having business relationships with the Company and its subsidiaries. In
particular, among other restrictions, until the consummation of the Merger, the
Company will not and will not permit any of its subsidiaries to, except as
contemplated by the Merger Agreement, make or propose any change or amendment to
their respective certificate of incorporation or by-laws; or purchase or redeem
the Shares, or declare, set aside, make or pay any dividend or other
distribution or payment with respect to, the Shares other than regular quarterly
cash dividends of $.03 per share; issue or sell any shares of capital stock of
any of them or options, warrants or rights (other than pursuant to the Rights
Agreement) relating to, or enter into any contract or arrangement with respect
to the issuance of, any shares of capital stock of any of them; or adjust,
split, combine or reclassify any of their capital stock or make any other
changes in their capital structure; or, except in the ordinary course of
business, incur or assume any indebtedness or make any loans, advances or
capital contributions to or investments in any other person (other than such
transactions with wholly owned subsidiaries of the Company).
Further, Parent and the Company have agreed that in connection with certain
employee stock options that contain "change of control" provisions relating to
settlement of the stock options in cash, the Company shall use commercially
reasonable efforts to procure the surrender of all such options as have not
theretofore been exercised in consideration of the cash payment prescribed by
such "change of control" provisions. As to any option not so surrendered, if
requested by Purchaser, the Company shall use commercially reasonable efforts to
obtain, prior to the Effective Time, the consent of the holder of such option to
acquire upon payment of the exercise price an amount of cash equal to the Merger
Price in lieu of each Share formerly covered thereby.
In the Merger Agreement, the Company has agreed that it will not (nor will
it permit any subsidiary to), directly or indirectly, solicit or initiate any
proposals or offers from any person relating to any acquisition or purchase of
all or a material amount of the assets of, or any securities of, or any merger,
consolidation or business combination with, the Company or any of its
subsidiaries, or, except to the extent required by the fiduciary obligations of
the Company's Board of Directors, participate in any negotiations regarding, or
furnish to any other person any information with respect to, any effort or
attempt by any other person to do or seek any of the foregoing. The Company is
obligated to notify Parent promptly in the event of any such proposal or offer
and provide certain information concerning such offer or proposal.
The obligations of the Company, Parent and Purchaser to consummate the
Merger are subject to the fulfillment of certain conditions, including the
following: (a) if required under applicable law, the Merger Agreement shall have
been adopted by the requisite vote of the Company's stockholders; (b) Purchaser
shall have purchased Shares pursuant to the Offer (provided, that this condition
shall be deemed to have been satisfied with respect to Parent and Purchaser if
Purchaser fails to pay for Shares pursuant to the Offer in violation of the
terms of the Offer) (c) all applicable waiting periods under the HSR Act and
Exon-Florio shall have expired or been terminated; (d) no order, injunction,
decree or ruling by any court of competent jurisdiction or any governmental body
shall have been entered precluding the consummation of the Merger; and (e) there
will not have been any action taken or any statute, rule or regulation enacted,
promulgated or deemed applicable to the Merger which would prevent the
consummation of the Merger. In addition, Parent and Purchaser are not obligated
to consummate the Merger if holders of options to acquire more than 100,000
Shares have failed to exercise or surrender their options or to consent to
payment of the "spread" discussed above in lieu of Shares covered thereby.
The Merger Agreement may be terminated and the Merger may be abandoned in
certain circumstances, including: (a) by mutual consent of Parent, Purchaser and
the Company; (b) by Parent, Purchaser or the Company (i) if, with certain
exceptions, the Merger is not consummated
16
<PAGE> 19
prior to December 31, 1995; provided, that the party seeking to terminate the
Merger Agreement is not in breach thereof in any material respect, (ii) if an
injunction or other order issued by any court of competent jurisdiction
precluding the consummation of the Merger shall have been issued and shall have
become final and nonappealable, (iii) if, prior to the purchase of any Shares
pursuant to the Offer, the Board of Directors of the Company withdraws or
modifies in a manner adverse to Parent or Purchaser its approval or
recommendation of the Offer because of the fiduciary duty of the Board of
Directors, or (iv) if the Offer shall terminate or expire or is withdrawn
without any Shares having been purchased thereunder or if Purchaser has not
purchased Shares validly tendered and not withdrawn within 120 days after
commencement of the Offer; provided, that the party seeking to terminate the
Merger Agreement is not in breach thereof in any material respect; and (c) by
the Company, if Parent or Purchaser materially breaches any of the
representations and warranties or covenants contained in the Merger Agreement.
Subject to applicable law, the Merger Agreement may be amended or
supplemented at any time prior to the consummation of the Merger, except that
after approval of the Merger Agreement by the stockholders of the Company, no
amendment may be made that reduces the per Share consideration to be received by
stockholders of the Company in the Merger.
The Merger Agreement also provides that the Company will pay to Parent and
Purchaser a fee of $5,500,000 in the event (i) Parent, Purchaser or the Company
terminates the Merger Agreement because, prior to the purchase of Shares, the
Company's Board of Directors withdraws or modifies its approval of the Offer in
a manner adverse to Parent or Purchaser in the exercise of its fiduciary duty
and (ii) the Company, within 12 months thereafter, enters into an agreement with
respect to certain third party acquisitions or a certain type of third party
acquisition occurs. If the Merger Agreement is terminated for the reason set
forth in the preceding sentence or if Purchaser or Parent terminates the Merger
Agreement pursuant to condition (a) described in Section 14 (other than solely
by reason of a material adverse change beyond the reasonable control of the
Company), the Company shall also pay to Parent an amount equal to $1,000,000.00.
This payment shall be made no later than five business days after termination of
the Merger Agreement. In no event shall Purchaser or Parent be entitled to a fee
of more than $5,500,000.
The foregoing description of the terms and provisions of the Merger
Agreement is qualified in its entirety by reference to the text of the
agreement. A copy of the Merger Agreement is filed as an exhibit to the Schedule
14D-1, which may be obtained from the Commission (but not the regional offices
of the Commission) and the NYSE in the manner set forth in Section 8.
In the event that the Merger is consummated, holders of Shares will have
certain rights under Delaware law to demand the appraisal value of their Shares.
Under Delaware law, stockholders who comply with certain statutory procedures
will be entitled to receive a judicial determination of the value of their
Shares as of the day prior to the day stockholders vote on the Merger, or if
Purchaser owns 90% or more of each class of outstanding shares of the Company,
the day prior to adoption of the Merger Agreement by the Board of Directors of
the Company, in both circumstances exclusive of any element of value arising
from the expectation or accomplishment of the Merger. The value so determined
could be more or less than the purchase price per Share offered pursuant to the
Offer.
In the event Purchaser purchases Shares pursuant to the Offer and the
Merger is consummated more than one year after the completion of the Offer,
compliance by Parent with Rule 13e-3 under the Exchange Act would be required,
unless the Shares were to be deregistered under the Exchange Act prior to such
transaction. Rule 13e-3 requires, among other things, that certain financial
information concerning the Company, and certain information relating to the
fairness of the proposed Merger and the consideration offered to stockholders in
such transaction, be filed with the Commission and disclosed to stockholders
prior to consummation of the Merger.
Upon consummation of the Offer, Parent intends to seek additional
information concerning the Company and, after review thereof, and subject to the
terms of the Merger Agreement, may propose the acquisition or disposition of
assets or other changes in the Company's business, corporate structure,
capitalization, Board of Directors, management or dividend policy.
17
<PAGE> 20
Parent plans to maintain the Company's operations headquarters in Houston,
Texas under the Company's existing management structure. Parent's plans for the
Company call for the continued operation of the Company's existing facilities.
Except as indicated in this Offer to Purchase, neither Purchaser nor Parent has
any present plans or proposals that relate to or would result in an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation involving the Company or any of its subsidiaries, a sale or transfer
of a material amount of the assets of the Company or any of its subsidiaries or
any other material changes in the Company's corporate structure or business or
the composition of its Board of Directors or management.
Whether or not Purchaser purchases Shares pursuant to the Offer, subject to
the terms of the Merger Agreement and the Confidentiality Agreement between the
Company and Parent (the "Confidentiality Agreement"), Purchaser expressly
reserves the right to acquire, following consummation or termination of the
Offer, and may thereafter acquire, subject to the availability of Shares at
favorable prices and the availability of financing, additional Shares through
open market purchases, privately negotiated transactions, another tender offer
or otherwise. Any such purchases of additional Shares might be on terms which
are the same as, or more or less favorable than, those of this Offer. In any
event, Purchaser is under no obligation to effect any such purchases. Purchaser
also reserves the right, subject to the terms the Merger Agreement, to dispose
of any or all Shares that it may acquire.
Rights. According to the Company's Registration Report on Form 8-A filed
on November 30, 1988, on November 29, 1988, the Board of Directors of the
Company declared a dividend of one Right for each outstanding Share, payable to
holders of record of Shares at the close of business on December 12, 1988, and
authorized the issuance of one Right for each Share issued between December 12,
1988 and the earlier of the Rights Distribution Date (as defined below), the
date on which the Rights are redeemed, or December 11, 1998. Under the Rights
Agreement, such Rights, when exercisable, entitle the registered holder thereof
to purchase from the Company one-fifth of a Share and a note (a "Note") in the
principal amount equal to four-fifths of the current market price of a Share on
the date of exercise (a "Right Unit") at a purchase price of $72.00 per Right
Unit (the "Right Purchase Price"), subject to adjustment and payable in cash.
According to the Company's Registration Report on Form 8-A/A filed on March
29, 1994, the Rights Agreement was amended on January 27, 1994. In addition, the
Company has informed the Purchaser that, pursuant to the Merger Agreement, the
Rights Agreement was further amended on May 16, 1995. The description contained
herein is of the Rights Agreement as amended.
Upon the terms of the Rights Agreement, until the earlier of the tenth
calendar day after (a) the first date of a public announcement (such date being
the "Stock Acquisition Date") that an individual, firm, corporation or other
entity, together with all Affiliates and Associates (as each is defined in the
Rights Agreement) thereof, but excluding the Company, any subsidiary, employee
benefit or stock ownership plan of the Company (including an entity holding
shares for or pursuant to such plan), has acquired Beneficial Ownership (as
defined in the Rights Agreement) of 20% or more of the Company's outstanding
Shares (such individual, firm, corporation or other entity, together with such
Affiliates and Associates, being an "Acquiring Person") or (b) the date of the
commencement of a tender offer or exchange offer for 30% or more of the
outstanding Shares (the earlier of such dates being the "Rights Distribution
Date"), the Rights will be evidenced by certificates representing Shares (the
"Share Certificates") and will be transferred with and only with the Shares. The
Rights Agreement provides that as soon as practicable after the Rights
Distribution Date, separate certificates (the "Rights Certificates") evidencing
the Rights will be mailed to holders of record of Shares as of the closing of
business on the Rights Distribution Date and such separate Rights Certificates
alone will evidence the Rights.
The Flip-In Right. In the event that (a) any Acquiring Person or Associate
or Affiliate of any Acquiring Person, directly or indirectly, shall (i) merge
into the Company or otherwise combine with the Company and the Company shall be
the continuing or surviving corporation of such merger or combination and its
Common Stock shall remain outstanding and unchanged, (ii) merge or
18
<PAGE> 21
otherwise combine with any subsidiary of the Company, (iii) in one or more
transactions, transfer any assets to the Company or any subsidiary in exchange
(in whole or in part) for shares of any class of capital stock of the Company or
any subsidiary or for securities exercisable for or convertible into shares of
any class of capital stock of the Company or any subsidiary, or otherwise obtain
from the Company or any subsidiary, with or without consideration, any
additional shares of any class of capital stock of the Company or any subsidiary
or securities exercisable for or convertible into shares of any class of capital
stock of the Company or any subsidiary (other than as part of a pro rata
distribution to all holders of such shares of any class of capital stock of the
Company or any subsidiary), (iv) sell, purchase, lease, exchange, mortgage,
pledge, transfer or otherwise dispose (in one or more transactions), to, from or
with, as the case may be, the Company or any subsidiary, assets on terms and
conditions less favorable to the Company than the Company would be able to
obtain in arm's-length negotiations with an unaffiliated third party, (v)
receive any compensation from the Company or any subsidiary other than
compensation for full-time employment as an employee at rates in accordance with
the Company's (or its subsidiaries') past practices, or (vi) receive the
benefit, directly or indirectly (except proportionately as a stockholder), of
any loans, advances, guarantees, pledges or other financial assistance or any
tax credits or other tax advantage provided by the Company or any subsidiaries,
or (b) during such time as there is an Acquiring Person, there shall be any
reclassification of securities (including any reverse stock split), or
recapitalization of the Company, or any merger or consolidation of the Company
with any subsidiary or any other transaction or series of transactions (whether
or not with or into or otherwise involving an Acquiring Person), which has the
effect, directly or indirectly, of increasing by more than 1% the proportionate
share of the outstanding shares of any class of equity securities or of
securities exercisable for or convertible into equity securities of the Company
or any subsidiary which is directly or indirectly beneficially owned by any
Acquiring Person or any Associate or Affiliate of any Acquiring Person, then
proper provision shall be made so that each holder of a Right other than Rights
that are or were beneficially owned by the Acquiring Person after the date upon
which the Acquiring Person became such (which will thereafter be void) shall
thereafter have the right to receive, upon the exercise thereof at the then
current Right Purchase Price, that number of shares having a market value of two
times the Right Purchase Price.
The Flip-Over Right. In the event that, directly or indirectly, at any
time following the Stock Acquisition Date, (a) the Company shall consolidate
with or merge into, any Acquiring Person or any Associate or Affiliate of any
Acquiring Person and the Company shall not be the continuing or surviving
corporation of such merger or combination, (b) any Acquiring Person or any
Associate or Affiliate of any Acquiring Person shall consolidate with the
Company, or merge with or into the Company and the Company shall be the
continuing or surviving corporation of such merger or consolidation and, in
connection with such merger or consolidation, all or part of the Shares shall be
changed into or exchanged for stock or other securities of such other Person or
cash or any other property, or (c) the Company shall sell or otherwise transfer
(or one or more subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its subsidiaries (taken as a whole) to any
Acquiring Person or any Associate or Affiliate of any Acquiring Person, proper
provision shall be made so that each holder of a Right, other than Rights that
are or were beneficially owned by such Acquiring Person after the date upon
which such Acquiring Person became such (which will thereafter be void), shall
thereafter have the right to receive, upon the exercise thereof at the then
current Right Purchase Price of such Right, that number of shares of common
stock (or, under certain circumstances, an economically equivalent security or
securities) of the surviving, resulting or acquiring person which at the time of
such transaction would have a market value of two times the Right Purchase
Price. However, this flip-over right does not apply in the case of the proposed
Merger because it is inapplicable when the Merger is with a party who acquired
Shares pursuant to a tender or exchange offer for all outstanding Shares at a
price and on terms determined by the Company to be at a price which is fair to
the stockholders and otherwise in the best interests of the Company and its
stockholders.
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<PAGE> 22
At any time prior to the Stock Acquisition Date, December 11, 1998, or,
under certain circumstances, upon a merger or a consolidation of the Company
with or into a corporation that is not an Acquiring Person, the Company may
redeem the Rights in whole, but not in part, at the Rights Redemption Price.
Under the terms of the Merger Agreement, the Company has agreed to take all
action necessary to provide that the transaction contemplated by the Offer and
the Merger Agreement will not trigger the Rights issued under the Rights
Agreement and to provide that neither Parent nor Purchaser shall be deemed to be
an Acquiring Person under the Rights Agreement.
The foregoing description of the Rights is qualified in its entirety by
reference to the text of the Rights Agreement and the other documents included
in the Company's Report on Form 8-A filed on November 30, 1988 with the
Commission and in the Company's Report Form 8-A/A filed on March 29, 1994, which
may be obtained in the manner set forth in Section 8.
12. SOURCE AND AMOUNT OF FUNDS. The total amount of funds estimated by
Purchaser and Tractebel to be required to purchase all outstanding Shares and to
pay related fees and expenses is approximately $207 to $210 million. Tractebel
currently intends to obtain these funds, in part, from available cash. In
addition, Parent will receive a capital increase of $110 million from Powerfin
S.A. and Powerfin S.A. or other parties will provide the balance of the funds
needed in the form of a bridge loan. It is the expectation of Parent and
Powerfin S.A. that the bridge loan will be refinanced by third-party borrowings
following the close of the transaction with CRSS Inc. At the present time,
Parent has not entered discussions with potential funding sources regarding the
refinancing of the bridge loan.
13. DIVIDENDS AND DISTRIBUTIONS. The Company has covenanted in the Merger
Agreement that it will not, except as contemplated under certain employee stock
options, issue or sell any shares of capital stock prior to the Effective Date.
The Company has also agreed in the Merger Agreement that, except in
connection with the redemption of Rights, it will not declare or pay any
dividend on the Shares other than regular quarterly dividends of $.03 per Share
consistent with the Company's past established schedule of declaration, payment
and record dates.
14. CERTAIN CONDITIONS OF THE OFFER. The Offer is conditioned upon, among
other things, satisfaction of the Minimum Condition. Purchaser reserves the
right (but shall not be obligated) to waive any or all of the conditions of the
Offer, except as limited by the terms of the Merger Agreement. The Merger
Agreement provides that any such condition other than the Minimum Condition may
be waived by Purchaser in its sole discretion. Waiver of the Minimum Condition
by Purchaser requires the approval of the Company.
In addition to the Minimum Condition, and notwithstanding any other
provision of the Offer, Purchaser shall not be required to accept for payment,
purchase or pay for any Shares tendered, and (subject to the terms of the Merger
Agreement) may terminate or amend the Offer or may postpone the acceptance for
payment or payment for the Shares tendered, if at any time on or after May 16,
1995 and before acceptance for payment or 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 shall occur and shall, in the sole
judgment of Parent, in any such case regardless of the circumstances giving rise
to any such condition, make it inadvisable to proceed with the Offer or such
acceptance for payment or purchase of or payment for any of the Shares:
(a) any representation or warranty of the Company in the Merger
Agreement shall have been untrue as of the date of the Merger Agreement or
shall have become untrue prior to acceptance for payment or payment for
Shares which untrue representations or warranties, in the aggregate, if
accurately stated would have revealed matters materially adverse to the
business, properties, assets, condition (financial or otherwise), results
of operations or prospects of the Company and its subsidiaries, taken as a
whole, or the Company shall have breached any of its covenants or
agreements contained in the Merger Agreement, which breach
20
<PAGE> 23
or breaches, in the aggregate, would have a material adverse effect on the
business, properties, assets, condition (financial or otherwise), results
of operations or prospects of the Company and its subsidiaries, taken as a
whole, or would have a material adverse effect upon the transactions
contemplated by the Merger Agreement; provided this condition does not
provide a basis for terminating the Offer unless and until Parent provides
written notice to the Company of the asserted breach of representation,
warranty or covenant, and the Company fails to cure such breach within five
(5) business days after receiving such notice;
(b) any United States or Belgian statute, rule or regulation shall be
enacted, promulgated, entered or enforced that is applicable to the Offer
or the Merger, that would have the effect of making the Offer or the Merger
or the consummation thereof illegal or preclude Parent or Purchaser from
exercising full rights of ownership with respect to the Shares or require
that any material portion of the assets or business of Parent or the
Company be divested or held separate;
(c) there shall have occurred and be continuing (i) any general
suspension of, or trading in or limitation of prices for, securities on the
New York Stock Exchange, (ii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States or Belgium
or any general limitation on or condition applicable to lending
institutions which has had or is reasonably expected to have a material
adverse effect on the extension of credit by such lending institutions,
(iii) the commencement of a war, armed hostilities or other international
or national calamity directly or indirectly involving the United States or
Belgium that commenced after the date hereof, or (iv) in the case of the
foregoing existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof;
(d) there shall be in effect any preliminary or final injunction or
other order issued by any United States or Belgian court or United States
or Belgian governmental, administrative or regulatory agency or authority
of competent jurisdiction (i) making the acceptance for payment of or
payment for a material amount of or all of the Shares illegal or (ii)
enjoining or prohibiting the Merger, the Offer or the acquisition by the
Parent or Purchaser of the Shares or preventing Parent or Purchaser from
exercising full rights of ownership with respect to a material amount of
the Shares or requiring that a material amount of the assets or business of
the Parent or the Company be divested or held separate;
(e) the Company shall have authorized, recommended, proposed or
publicly announced its intent to enter into any merger, consolidation,
liquidation, dissolution, business combination, acquisition or disposition
of a material amount of assets or securities or taken any action to
implement any such transaction previously authorized, recommended, proposed
or publicly announced, other than, in each case, the Offer and the Merger
or modified its recommendation of the Offer adversely to Purchaser;
(f) the Merger Agreement shall have been terminated in accordance with
its terms; or
(g) any waiting period under the HSR Act or Exon-Florio applicable to
the purchase of Shares pursuant to the Offer shall not have expired or been
terminated.
The foregoing conditions are for the sole benefit of Purchaser and Parent
and may be waived by either Purchaser or Parent in whole or in part at any time
and from time to time in its sole discretion, except that waiver of the Minimum
Condition requires the approval of the Company.
15. CERTAIN LEGAL MATTERS.
General. Except as otherwise disclosed herein, Purchaser is not aware of
any license or other regulatory permit that appears to be material to the
business of the Company and its subsidiaries, taken as a whole, that might be
adversely affected by the acquisition of Shares by Purchaser pursuant to the
Offer or of any approval or other action by any governmental, administrative or
regulatory agency or authority that would be required prior to the acquisition
of Shares by Purchaser pursuant to the Offer. Should any such approval or other
action be required, it is currently
21
<PAGE> 24
contemplated that such approval or action would be sought. There is no present
intention, however, to delay the purchase of Shares tendered pursuant to the
Offer pending the outcome of any such matter other than for the duration of
waiting periods under the HSR Act and Exon-Florio described in Section 2 and
below (subject to Purchaser's right to decide not to purchase Shares if any of
the conditions of Section 14 shall have occurred). There can be no assurance
that any such approval or other action, if needed, would be obtained without
substantial conditions or that adverse consequences might not result to the
Company's business or that certain parts of the Company's business might not
have to be disposed of in the event that such approvals were not obtained or
such other actions were not taken, any of which could cause Purchaser to elect
to terminate the Offer to the extent provided in Section 14.
State Takeover Laws. A number of states have adopted takeover laws that by
their terms are applicable to attempts to acquire corporations which are
incorporated in such states, or have substantial assets, security holders,
principal executive offices or principal places of business therein. In Edgar v.
MITE Corporation, the Supreme Court of the United States invalidated, on
constitutional grounds, the Illinois Business Takeover Act, which, as a matter
of state securities law, made takeovers of corporations meeting certain
requirements more difficult. In CTS Corp. v. Dynamics Corp. of America, however,
the Supreme Court held that a state may, as a matter of corporate law and, in
particular, those laws 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. The state
law before the Supreme Court was by its terms applicable only to corporations
that had a substantial number of stockholders in the state and were incorporated
there.
Purchaser has not taken action to comply with any state takeover laws,
other than laws of the State of Delaware. Should any governmental official or
third party seek to apply any state takeover law to the Offer, Purchaser will
take such action as then appears desirable and anticipates that it will contest
the validity of such statute in appropriate court proceedings; however, if 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 to receive approvals from, the relevant state authorities, and
Purchaser might be unable to accept for payment or pay for Shares tendered
pursuant to the Offer, or be delayed in continuing or consummating the Offer. In
such cases, Purchaser may not be obligated to accept for payment or pay for any
tendered Shares. See Section 14.
The Delaware Takeover Act, Section 203 of the Delaware General Corporation
Law (the "Delaware Takeover Act"), regulates, and under some conditions forbids
or postpones, business combinations of Delaware corporations with interested
stockholders. However, such limitations are not applicable if the board of
directors of the Delaware corporation approved the business combination or the
transaction which resulted in the stockholder becoming an interested
stockholder, prior to the time that such interested stockholder status arose.
The Company has represented in the Merger Agreement that its board of directors
has approved the Offer and the Merger as being in the best interests of, and
fair to, the Company and its stockholders. Therefore, Purchaser believes that
the limitations of the Delaware Takeover Act are not applicable.
Other Foreign Approvals. There are no foreign approvals required to
consummate this transaction.
Antitrust. Under the HSR Act and the rules that have been promulgated
thereunder by the FTC, certain acquisition transactions may not be consummated
unless certain information has been furnished to the Antitrust Division and the
FTC and certain waiting period requirements have been satisfied. The acquisition
of Shares by Purchaser is subject to these requirements. See Section 2.
Parent filed on May 18, 1995, a Notification and Report Form with respect
to the Offer with the Antitrust Division and the FTC. Under the provisions of
the HSR Act applicable to the purchase of Shares pursuant to the Offer, such
purchases may not be made until the expiration of a 15-calendar day waiting
period following the filings by Parent, unless such waiting period is earlier
terminated by
22
<PAGE> 25
the FTC or the Assistant Attorney General in charge of the Antitrust Division.
Accordingly, unless earlier terminated, the waiting period under the HSR Act
applicable to the purchase of Shares pursuant to the Offer will expire at 11:59
p.m., New York City time, on June 2, 1995, unless Parent receives a request for
additional information or documentary material prior thereto. Pursuant to the
HSR Act, Parent has requested early termination of the waiting periods
applicable to the Offer. There can be no assurances given, however, that the
15-day HSR Act waiting period will be terminated early. If either the FTC or the
Antitrust Division were to request additional information or documentary
materials from Parent, the waiting period would expire at 11:59 p.m., New York
City time, on the tenth calendar day after the date of a proper response by the
Company or Parent, as the case may be, to such request. Thereafter, the waiting
period could be extended only by court order or with the consent of Parent. If
the acquisition of Shares is delayed pursuant to request by the FTC or the
Antitrust Division for additional information or documentary material pursuant
to the HSR Act, the Offer may, but need not, be extended and, in any event, the
purchase of and payment for Shares will be deferred until 10 days after Parent
has made a proper response to such a request for additional information, unless
the 10-day extended period expires on or before the date when the initial 15-day
period would otherwise have expired or unless the waiting period is sooner
terminated by the FTC or the Antitrust Division. See Section 2. Only one
extension of such waiting period pursuant to a request for additional
information is authorized by the rules promulgated under the HSR Act, except by
court order or with the consent of Parent. Any such extension of the waiting
period will not give rise to any withdrawal rights not otherwise provided for by
applicable law. See Section 4.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
Purchaser pursuant to the Offer. At any time before or after the purchase by
Purchaser of Shares pursuant to the Offer, the FTC or the Antitrust Division
could take such action under the antitrust laws as either deems necessary or
desirable in the public interest, including seeking to enjoin the purchase of
Shares pursuant to the Offer or seeking the divestiture of Shares purchased by
Purchaser or the divestiture of substantial assets of Purchaser or Parent, their
subsidiaries or of the Company or its subsidiaries. Private parties may also
bring legal action under the antitrust laws under certain circumstances.
Purchaser believes that the Offer and the Merger will not violate 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 a challenge is made, what the
result will be. See Section 14.
Exon-Florio. Under Section 721 of Title VII of the United States Defense
Production Act of 1950, as amended by Section 5021 of the Omnibus Trade and
Competitiveness Act of 1988 and the National Defense Authorization Act for
Fiscal Year 1993 ("Exon-Florio"), the President of the United States is
authorized to prohibit or suspend acquisitions, mergers or takeovers by foreign
persons of persons engaged in interstate commerce in the United States if the
President determines, after investigation, that such foreign persons in
exercising control of such acquired persons might take action that threatens to
impair the national security of the United States and that other provisions of
existing law do not provide adequate authority to protect national security.
Pursuant to Exon-Florio, notice of an acquisition by a foreign person is to be
made to the Committee on Foreign Investment in the United States ("CFIUS"),
which is comprised of representatives of the Departments of the Treasury, State,
Commerce, Defense and Justice, the Office of Management and Budget, the United
States Trade Representative's Office and the Council of Economic Advisors, and
which has been selected by the President to administer Exon-Florio, either
voluntarily by the parties to such proposed acquisition, merger or takeover or
by any member of CFIUS.
A determination that an investigation is called for must be made within 30
days after notification of a proposed acquisition, merger or takeover is first
filed with CFIUS. Any such investigation must be completed within 45 days of
such determination. Any decision by the President to take action must be
announced within 15 days of the completion of the investigation. Although
Exon-Florio neither requires the filing of a notification nor prohibits the
consummation of an acquisition, merger or takeover, if notification is not made,
such an acquisition, merger or takeover thereafter remains
23
<PAGE> 26
indefinitely subject to divestment should the President subsequently determine
that the national security of the United States has been threatened or impaired.
Although Parent and the Company do not believe based on their review of publicly
available information that the Offer or the Merger threatens to impair the
national security of the United States, there can be no assurance that a
challenge to the Offer or the Merger based on Exon-Florio will not be made or,
if made, what the result will be. Accordingly, Parent and the Company intend to
file a notification with CFIUS.
16. FEES AND EXPENSES. Goldman, Sachs & Co. ("Goldman Sachs") are acting
as financial advisors to Tractebel in connection with its possible acquisition
of Shares and as Dealer Managers for the Offer. Tractebel entered into an
agreement with Goldman Sachs, dated February 24, 1995 (the "Engagement Letter")
pursuant to which Parent agreed to pay Goldman Sachs an initial fee of
$100,000.00 (an "Initial Retainer") for their services as financial advisors.
Beginning with the month of June, Parent agreed to pay an additional fee of
$30,000.00 (an "Advisory Fee") for each month during which Goldman Sachs
provided significant services to Parent in connection with its possible
acquisition of Shares. In addition, if at least 50% of the outstanding Shares or
at least 50% of the assets of the Company are acquired, Goldman Sachs will
receive $1,500,000.00 (a "Success Fee"). If less than 50% of the outstanding
Shares or assets are acquired, a mutually acceptable Success Fee of not less
than 2% of the aggregate consideration will be paid to Goldman Sachs. The
Initial Retainer and the first three monthly Advisory Fees will be credited
against the Success Fee. Parent has also agreed to reimburse Goldman Sachs for
their reasonable out-of-pocket expenses, including fees and disbursements of
counsel and sales and use taxes. Parent is not obligated to reimburse Goldman
Sachs for fees and disbursements of counsel and accountants that exceed the
limit specified in the Engagement Letter, unless waived by Parent. Parent has
also agreed to indemnify Goldman Sachs against certain liabilities and expenses
in connection with their services. Parent and Goldman Sachs entered into a
Dealer Managers Agreement for Goldman Sachs' services as Dealer Managers,
including liabilities under the federal securities laws. Under this agreement,
Parent is not required to pay Goldman Sachs additional compensation for Goldman
Sachs' services as Dealer Managers.
Tractebel has retained Morrow & Co., Inc. to act as the Information Agent
and Society National Bank to act as the Depositary in connection with the Offer.
The Information Agent may contact holders of Shares by mail, telephone, telex,
telegraph or in person and may request brokers, dealers and other nominee
holders to forward the Offer materials to beneficial owners of Shares. The
Information Agent and the Depositary will receive reasonable and customary
compensation for such services, plus reimbursement for certain out-of-pocket
expenses and may be indemnified against certain liabilities and expenses in
connection with their respective services, including liabilities under the
federal securities laws.
Parent will not pay any fees or commissions to brokers, dealers or other
persons (other than the Dealer Managers and the Information Agent) for
soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, commercial
banks and trust companies will be reimbursed by Parent for customary mailing and
handling expenses incurred by them in forwarding material to their customers.
17. MISCELLANEOUS. The Offer is not being made to nor will tenders be
accepted from or on behalf of holders of Shares in any jurisdiction in which the
making of the Offer or the acceptance thereof would not be in compliance with
the laws of such jurisdiction. However, Purchaser may, in its sole discretion,
take such action as it may deem necessary to make the Offer in any such
jurisdiction and extend the Offer to holders of Shares in such jurisdiction.
Purchaser has filed with the Commission a Tender Offer Statement on
Schedule 14D-1 pursuant to Rule 14d-3 under the Exchange Act, furnishing certain
additional information with respect to the Offer, and may file amendments
thereto. Such Statement and any amendments thereto, including exhibits, may be
examined and copies may be obtained from the principal office of the Commission
in Washington, D.C. in the manner set forth in Section 8.
24
<PAGE> 27
No person has been authorized to give any information or make any
representation on behalf of Purchaser or Parent not contained in this Offer to
Purchase or in the related Letter of Transmittal and, if given or made, such
information or representation must not be relied upon as having been authorized.
ATC ACQUISITION CORP.
May 18, 1995
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<PAGE> 29
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
ATC ACQUISITION CORP. AND AMERICAN TRACTEBEL CORPORATION
1. DIRECTORS AND EXECUTIVE OFFICERS OF ATC ACQUISITION CORP. The following
table sets forth the name, and principal occupation or employment at the present
time and during the last five years, and the name and principal business of any
corporation or other organization in which such employment is or was conducted,
of each director and executive officer of ATC Acquisition Corp. Each such person
has a primary business address of 12 East 49th St., New York, NY 10017. Each
person has held the positions set forth opposite his name for at least five
years, except as otherwise indicated. Each director and executive officer is a
citizen of the United States.
DIRECTORS AND EXECUTIVE OFFICERS OF ATC ACQUISITION CORP.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL
OCCUPATION OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- ------------------------------------- ----------------------------------------------------
<S> <C>
Daniel Deroux........................ is the Chairman of the Board of ATC Acquisition
Corp. and has been the Managing Director & Chief
Executive Officer of American Tractebel since 1993.
Mr. Deroux is also a director of Powerfin S.A., as
well as a member of the General Management Committee
of Tractebel S.A. Mr. Deroux joined the Tractebel
Group in 1963. Mr. Deroux is a citizen of Belgium.
Philippe van Marcke.................. is President and a director of ATC Acquisition Corp.
Mr. van Marcke is also the President of American
Tractebel. Mr. van Marcke joined the Tractebel Group
in 1984.
Paul J. Cavicchi..................... is a Vice President of ATC Acquisition Corp. and has
been Vice President, Business Development of
American Tractebel since August 1991. Previously,
Mr. Cavicchi was Manager, Venture Development with
Community Energy Alternatives Inc. (CEA), based in
Ridgewood, New Jersey.
Gary L. Greenblatt................... is Vice President and a director of ATC Acquisition
Corp. Mr. Greenblatt joined American Tractebel in
February 1993. He serves as American Tractebel's
Vice President Finance and Treasurer. Prior thereto,
Mr. Greenblatt was Vice President of Generale
Investment Banking Corporation and Generale Bank New
York Branch.
Bradford Randolph.................... is General Counsel and Secretary of ATC Acquisition
Corp. Mr. Randolph joined American Tractebel in
November 1993 and was appointed General Counsel and
Secretary in May 1994. Mr. Randolph was previously
the Treasurer and Vice President of Taxes with the
North American headquarters of Euro RSCG Holdings,
Inc., a French-based multinational advertising and
public relations company.
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The following table sets
forth the name, business address and principal occupation or employment at the
present time and during the last
I-1
<PAGE> 30
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 Tractebel. Except as otherwise indicated
below, each person is a citizen of the United States, and the business address
of each person is 12 East 49th St., New York, NY 10017. Each person has held the
occupation set forth opposite his name for at least five years, except as
otherwise indicated.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL
OCCUPATION OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- ------------------------------------- ----------------------------------------------------
<S> <C>
Baron Bodson......................... is a director of American Tractebel and has been the
Chief Executive Officer and Managing Director of
Tractebel S.A. since he joined the company in 1989.
Baron Bodson is also the Chairman of the General
Management Committee of Tractebel S.A., as well as
the Chairman of Powerfin S.A. Baron Bodson is a
citizen of Belgium.
Baron Guy de Wouters................. is a director of American Tractebel and is also a
Vice Chairman of Tractebel S.A., as well as a
director of Powerfin S.A. Baron de Wouters joined
the Tractebel Group in 1987. Baron de Wouters is a
citizen of Belgium.
Paul-Henri Denuit.................... is a director of American Tractebel and has been the
Chief Executive Officer and Managing Director of
Coditel S.A. since 1971. Coditel is a part of the
Tractebel Group. Mr. Denuit is also director of
Tractebel S.A., as well as a member of its General
Management Committee. Mr. Denuit joined the
Tractebel Group in 1957. Mr. Denuit is a citizen of
Belgium.
Manfred Loeb......................... has been Chairman of the Board of American Tractebel
since 1988. Mr. Loeb is also Vice Chairman of
Powerfin S.A., as well as a director of Tractebel
S.A. and a member of its General Management
Committee. Mr. Loeb joined the Tractebel Group in
1952. Mr. Loeb is a citizen of Belgium.
Daniel Deroux........................ is a director of American Tractebel and has been the
Managing Director & Chief Executive Officer of
American Tractebel since 1993. Mr. Deroux is also a
director of Powerfin S.A., as well as a member of
the General Management Committee of Tractebel S.A.
Mr. Deroux is also Chief Executive Officer of
Electricity and Gas International, a division of
Tractebel S.A. Mr. Deroux joined the Tractebel Group
in 1963. Mr. Deroux is a citizen of Belgium.
Paul Haine........................... is a director of American Tractebel and is the Chief
Finance & Administration Officer of the Tractebel
Group. Mr. Haine is also a director of Powerfin
S.A., as well as a director of Tractebel S.A. and a
member of its General Management Committee. Mr.
Haine joined the Tractebel Group in 1966. Mr. Haine
is a citizen of Belgium.
</TABLE>
I-2
<PAGE> 31
<TABLE>
<CAPTION>
PRESENT PRINCIPAL
OCCUPATION OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- ------------------------------------- ----------------------------------------------------
<S> <C>
Albert Rolin......................... is a director of American Tractebel and has been the
Chief Executive Officer and Managing Director of the
Fabricom Group since 1991. Fabricom is a part of the
Tractebel Group. Mr. Rolin is also a director of
Tractebel S.A., as well as a member of its General
Management Committee. Mr. Rolin joined the Tractebel
Group in 1959. Mr. Rolin is a citizen of Belgium.
Philippe van Marcke.................. is a director and has been the President of American
Tractebel since 1993. Mr. van Marcke joined the
Tractebel Group in 1984.
Paul J. Cavicchi..................... is and has been Vice President, Business Development
of American Tractebel since 1991. Previously, Mr.
Cavicchi was Manager, Venture Development with
Community Energy Alternatives Inc. (CEA), based in
Ridgewood, New Jersey.
Gary L. Greenblatt................... is Vice President Finance and Treasurer of American
Tractebel and has been with the company since 1993.
Prior thereto, Mr. Greenblatt was Vice President of
Generale Investment Banking Corporation and Generale
Bank New York Branch.
Keith L. Pronske..................... is Vice President, Business Development/Latin
America of American Tractebel and has been with the
company since 1994. He was previously employed with
Bevilacqua Knight, Inc., of Oakland, California,
since 1991. Mr. Pronske attended business school at
San Francisco State University, California, where he
obtained a Master's Degree in Business
Administration.
Jean Rappe........................... is Vice President, Engineering & Projects of
American Tractebel and has been with the company
since 1993. Prior to his appointment with the
company, Mr. Rappe was a Design Engineer with
Tractebel Energy Engineering in Brussels, Belgium,
and a Project Manager with Laser Applications
Belgium (LABEL) based in Mons, Belgium.
Bradford Randolph.................... is General Counsel and Secretary of American
Tractebel and has been with the company since 1993.
Mr. Randolph was previously the Treasurer and Vice
President of Taxes with the North American
headquarters of Euro RSCG Holdings, Inc., a French-
based multinational advertising and public relations
company.
</TABLE>
I-3
<PAGE> 32
Letters of Transmittal and certificates for your Shares should be sent or
delivered by you or your broker, dealer, commercial bank or trust company to the
Depositary at one of the addresses set forth below:
DEPOSITARY:
SOCIETY NATIONAL BANK
<TABLE>
<S> <C>
By Mail: By Hand:
Society National Bank Society National Bank
Key Services Corporation KeyCorp Shareholder Services, Inc.
P.O. Box 6477 700 Louisiana Street, Suite 2620
Cleveland, Ohio 44101-1477 Houston, Texas 77002
OH-01-49-0120 Attn: Lorraine Rodewald
Attn: Reorganization Department -or-
Society National Bank
Key Services Corporation
4900 Tiedeman Road
Brooklyn, Ohio 44114-2302
Attn: Reorganization Department
Telephone Numbers: By Facsimile
(For information call collect) (216) 813-4269
(800) 539-6549 Confirm by telephone:
or (216) 813-6598
(713) 546-5500
</TABLE>
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Managers at their respective addresses and telephone numbers
specified below. Additional copies of the Offer to Purchase and the Letters of
Transmittal may be obtained from the Information Agent. A stockholder may also
contact brokers, dealers, commercial banks or trust companies for assistance
concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
MORROW & CO., INC.
909 Third Avenue, 20th Floor
New York, New York 10022
Toll Free 1-800-566-9058
Or Call Collect (212) 754-8000
Banks and Brokerage Firms please call:
1-800-662-5200
THE DEALER MANAGERS FOR THE OFFER ARE:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
(212) 902-1000
I-4
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
CRSS INC.
PURSUANT TO THE OFFER TO PURCHASE DATED MAY 18, 1995
OF
ATC ACQUISITION CORP.,
A WHOLLY OWNED SUBSIDIARY OF
AMERICAN TRACTEBEL CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON FRIDAY, JUNE 16, 1995, UNLESS THE OFFER IS EXTENDED.
TO: SOCIETY NATIONAL BANK (THE "DEPOSITARY")
DELIVERY ADDRESSES
<TABLE>
<S> <C>
By Mail: By Hand:
Society National Bank Society National Bank
Key Services Corporation KeyCorp Shareholder Services, Inc.
P.O. Box 6477 700 Louisiana Street, Suite 2620
Cleveland, Ohio 44101-1477 Houston, Texas 77002
OH-01-49-0120 Attn: Lorraine Rodewald
Attn: Reorganization Department -or-
Society National Bank
Key Services Corporation
4900 Tiedeman Road
Brooklyn, Ohio 44114-2302
Attn: Reorganization Department
OTHER INFORMATION
Telephone Numbers: By Facsimile:
(For information call collect) (216) 813-4269
(800) 539-6549 Confirm by telephone:
or (216) 813-6598
(713) 546-5500
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE OTHER THAN THE ONES
LISTED 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 holders of Shares
(including the associated Rights) (as defined below) if either certificates
representing Shares ("Share Certificates") are to be submitted herewith, or
tender of Shares is to be made by book-entry transfer to the account maintained
by the Depositary at The Depository Trust Company, Midwest Securities Trust
Company or Philadelphia Depository Trust Company (collectively, "Book-Entry
Transfer Facilities") pursuant to the procedures set forth in Section 3 of the
Offer to Purchase.
Stockholders who tender Shares by book-entry transfer are referred to
herein as "Book-Entry Stockholders" and all other stockholders are referred to
herein as "Certificate Stockholders." Stockholders whose certificates for Shares
are not immediately available (or who cannot comply with the book-entry transfer
procedures on a timely basis) or who cannot deliver their certificates and all
other documents required hereby to the Depositary on or prior to the Expiration
Date must tender their Shares according to the guaranteed delivery procedure 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> 2
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY
LADIES AND GENTLEMEN:
The undersigned hereby tenders to ATC Acquisition Corp., a Delaware
corporation ("Purchaser"), and a wholly owned subsidiary of American Tractebel
Corporation, a Delaware corporation ("Tractebel"), at a price of $14.50 per
Share, net to the seller in cash, upon the terms and subject to the conditions
set forth in the Offer to Purchase dated May 18, 1995 (the "Offer to Purchase"),
receipt of which is hereby acknowledged, and in this Letter of Transmittal
(which together with the Offer to Purchase constitute the "Offer"), the
above-described shares of common stock, $1.00 par value (the "Shares"), of CRSS
Inc., a Delaware corporation (the "Company"), including the associated Rights
(the "Rights") issued pursuant to the Rights Agreement dated as of November 29,
1988, as amended to date (the "Rights Agreement"), between the Company and First
Chicago Trust Company of New York, as successor Trustee to Morgan Shareholders
Services Trust Company (the "Rights Agent"). Purchaser reserves the right to
transfer or assign, in whole or from time to time in part, to Tractebel or
Tractebel's parent, Powerfin, S.A., or to one or more affiliates of Tractebel,
the right to purchase Shares tendered pursuant to the Offer.
Subject to and effective upon acceptance for payment of and payment for the
Shares tendered herewith in accordance with the terms of the Offer, the
undersigned hereby sells, assigns and transfers to, or upon the order of,
Purchaser all right, title and interest to and in all Shares being tendered
hereby. The undersigned hereby irrevocably appoints the Depositary the true and
lawful agent and attorney-in-fact of the undersigned with respect to such
Shares, with full power of substitution (such power of attorney being deemed to
be an irrevocable power coupled with an interest), to (a) deliver certificates
representing such Shares, or transfer ownership of such Shares on the account
books maintained by a Book-Entry Transfer Facility, together in either such case
with all accompanying evidences of transfer and authenticity, to or upon the
order of Purchaser; (b) present such Shares for registration and transfer on the
books of the Company; and (c) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares, all in accordance with the terms
of the Offer.
The undersigned hereby irrevocably appoints the designees of Purchaser, and
each of them, the attorneys and proxies of the undersigned, each with full power
of substitution, to vote in such manner as each such attorney and proxy or his
substitute shall, in his sole discretion, deem proper, and otherwise act
(including pursuant to written consent) with respect to all the Shares tendered
hereby that have been accepted for payment and paid for by Purchaser prior to
the time of such vote or action, which the undersigned is entitled to vote (or
consent with respect thereto) at any meeting of stockholders (whether annual or
special and whether or not an adjourned meeting) of the Company or otherwise.
This proxy is irrevocable and is granted in consideration of, and is effective
upon, the acceptance for payment of such Shares by Purchaser in accordance with
the terms of the Offer. Such acceptance for payment shall revoke all prior
proxies granted by the undersigned at any time with respect to such Shares and
no subsequent proxies will be given (and if given, will not be deemed to be
effective) with respect thereto by the undersigned.
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 that when the same are accepted for payment by Purchaser,
Purchaser will acquire good title thereto, free and clear of all liens,
restrictions, charges and encumbrances and the same will not be subject to any
adverse claim. The undersigned, upon request, will execute and deliver any
additional documents deemed by the Depositary or Purchaser to be necessary or
desirable to complete the sale, assignment and transfer of the Shares tendered
hereby.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and any obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. Except as stated in the Offer, this tender is
irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and Purchaser upon the terms and subject to the conditions set forth in the
Offer.
<PAGE> 3
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any Shares not
tendered or 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 certificates representing Shares not tendered
or 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 Delivery Instructions and the
Special Payment Instructions are completed, please issue the check for the
purchase price and/or return any certificates representing Shares not tendered
or accepted for payment in the name of, and deliver such check and/or return
such certificates to, the person(s) so indicated. Stockholders delivering Shares
by book-entry transfer may request that any Shares not accepted for payment be
returned by crediting such account maintained at a Book-Entry Transfer Facility
as such stockholder may designate by making an appropriate entry under "Special
Payment Instructions." The undersigned recognizes that Purchaser has no
obligation pursuant to the Special Payment Instructions to transfer any Shares
from the name of the registered holder thereof if Purchaser does not accept for
payment any of the Shares so tendered.
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
To be completed ONLY if certificates representing Shares not tendered or not
purchased and/or the check for the purchase price of Shares purchased are to be
issued in the name of someone other than the undersigned.
Issue: / / check and/or certificate(s) to:
Name:
- -------------------------------------------------------------
(Please Print)
Address:
- -------------------------------------------------------------
- -------------------------------------------------------------
(Include Zip Code)
Taxpayer
Identification No.
- -------------------------------------------------------------
(Complete Substitute Form W-9)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
To be completed ONLY if certificates representing Shares not tendered or not
purchased and/or the check for the purchase price of Shares purchased are to be
sent to the undersigned at an address other than that shown above.
Mail: / / check and/or certificate(s) to:
Name:
- -------------------------------------------------------------
(Please Print)
Address:
- -------------------------------------------------------------
- -------------------------------------------------------------
(Include Zip Code)
<PAGE> 4
IMPORTANT
STOCKHOLDERS SIGN HERE
(Please Complete Substitute Form W-9 below)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Signature(s) of Holder(s))
Dated:_________________________________, 1995
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
Share Certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 5.)
Name(s):________________________________________________________________________
________________________________________________________________________________
(Please Print)
Capacity (full title)___________________________________________________________
Address ________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number__________________________________________________
Taxpayer Identification Number__________________________________________________
(Complete Substitute Form W-9 on reverse side)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature____________________________________________________________
Name of Firm____________________________________________________________________
Dated:_________________________________, 1995
<PAGE> 5
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. SIGNATURE GUARANTEES. No signature guarantee on this Letter of
Transmittal is required if this Letter of Transmittal is (i) signed by the
registered holder (which term, for purposes hereof, shall include any
participant in a Book-Entry Transfer Facility whose name appears on a security
position listing as the owner) of Shares tendered herewith and payment is to be
made directly to such registered holder, or (ii) if Shares are tendered for the
account of a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc., or by a commercial bank or
trust company having an office or correspondent in the United States (each of
the foregoing being referred to as an "Eligible Institution"). In all other
cases, all signatures on this Letter of Transmittal must be guaranteed by an
Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of
Transmittal is to be completed by holders of Shares if either certificates
representing Shares are to be forwarded herewith to the Depositary or if tenders
of Shares are to be made pursuant to the procedures for delivery by book-entry
transfer set forth in Section 3 of the Offer to Purchase. Certificates
representing all physically tendered Shares, or confirmation of any book-entry
transfer into the Depositary's account at a Book-Entry Transfer Facility of
Shares tendered electronically ("Book-Entry Confirmation"), together with this
Letter of Transmittal (or a facsimile copy hereof), properly completed and duly
executed, with any required signature guarantees, and any other documents
required by this Letter of Transmittal must be received by the Depositary at one
of its addresses set forth herein on or prior to the Expiration Date (as defined
in the Offer to Purchase). If a stockholder wishes to tender Shares pursuant to
the Offer and such stockholder's certificates are not immediately available (or
the procedure for book-entry transfer cannot be completed on a timely basis) or
time will not permit all required documents to reach the Depositary at or prior
to the Expiration Date, such Shares may nevertheless be tendered if the
procedures for guaranteed delivery set forth in Section 3 of the Offer to
Purchase are followed, including that all of the following conditions are met:
(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 Purchaser herewith, is received by the Depositary as provided
below prior to the Expiration Date, (iii) Share Certificates representing all
tendered Shares in proper form for transfer, or a Book-Entry Confirmation for
all Shares delivered electronically, in each case together with this Letter of
Transmittal (or a facsimile copy hereof), properly completed and duly executed,
with any required signature guarantees, and any other documents required by this
Letter of Transmittal, are received by the Depositary within five (5) New York
Stock Exchange, Inc. ("NYSE") trading days after the date of execution of each
Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING
DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF
THE TENDERING STOCKHOLDER, AND EXCEPT AS OTHERWISE PROVIDED IN THIS INSTRUCTION
2, THE DELIVERY WILL BE DEEMED TO BE MADE ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
SHAREHOLDERS WHO HAVE LOST THEIR CERTIFICATES MUST CONTACT THE TRANSFER
AGENT AND COMPLETE REPLACEMENT PROCEDURES IN ORDER TO PARTICIPATE IN THIS OFFER.
TO REPORT LOST CERTIFICATES, SHAREHOLDERS SHOULD CALL (800) 539-6549 (KEYCORP
SHAREHOLDER SERVICES - HOUSTON) AND OBTAIN AFFIDAVIT OF LOSS AND INDEMNITY BOND
DOCUMENTS.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering holders of Shares, by
execution of this Letter of Transmittal (or a facsimile copy hereof), waive any
right to receive any notice of the acceptance for payment of their Shares.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
signed schedule attached hereto.
4. PARTIAL TENDERS. (Applicable to Certificate Stockholders only.) If fewer
than all the Shares evidenced by any Share Certificate submitted are to be
tendered, fill in the number of Shares that are to be tendered in the box
entitled "Number of Shares Tendered." In such cases, new certificate(s) will be
sent to the registered holder unless otherwise provided in the appropriate box
on this Letter of Transmittal, as soon as practicable after the Expiration Date.
All Shares represented by certificates delivered to the Depositary will be
deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond exactly with the name(s) as
written on the face(s) of the certificates without alteration, enlargement or
any change whatsoever.
If any of the Shares tendered hereby are held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any Shares tendered hereby are registered in different names on different
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 is signed by the registered holder(s) of the
Shares tendered herewith, no endorsements of certificates or separate stock
powers are required, unless payment of the purchase price is to be made to, or
Shares not tendered or accepted for payment are to be returned in the name of,
any person other than the registered holder(s). Signatures on any such
certificates or stock powers must be guaranteed by an Eligible Institution.
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
Purchaser of the authority to so act must be submitted.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered herewith, the certificates must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the
<PAGE> 6
registered holder(s) appear(s) on the certificate(s) for such Shares. Signatures
on any such certificates or stock powers must be guaranteed. All such guarantees
must be made by a financial institution (such as a bank or broker) which is a
participant in the Securities Transfer Agents Medallion Program ("STAMP"), the
New York Stock Exchange, Inc. Medallion Signature Program ("MSP"), or the Stock
Exchanges Medallion Program ("SEMP").
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6,
Purchaser will pay any stock transfer taxes applicable to the transfer and sale
of purchased Shares to it or its order pursuant to the Offer. If payment of the
purchase price is to be made to, or if certificates representing Shares not
tendered or purchased are to be registered in the name of, any person other than
the registered holder(s), or if tendered certificates are registered in the name
of any person other than the person(s) signing this Letter of Transmittal, the
amount of any stock transfer taxes (whether imposed on the registered holder(s)
or such other person) payable on account of the transfer to such person will be
deducted from the purchase price unless satisfactory evidence of the payment of
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 the check for the purchase
price of any Shares purchased is to be issued and/or certificates for Shares not
tendered or not purchased are to be issued in the name of a person other than
the signer of this Letter of Transmittal, or if the check and/or any
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. Book-Entry Stockholders
may request that Shares not purchased be credited to such account maintained at
the Book-Entry Transfer Facility as such stockholders may designate under
Special Payment Instructions. If no such instructions are given, such Shares not
purchased will be returned by crediting the account of the Book-Entry Transfer
Facility designated above.
8. REQUEST FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for
assistance may be directed to, or additional copies of the Offer to Purchase,
this Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained
from, the Information Agent or the Dealer Managers at the telephone numbers
and/or addresses set forth below or from your broker, dealer, commercial bank or
trust company.
9. SUBSTITUTE FORM W-9. The tendering stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on
Substitute Form W-9, which is provided below, and to indicate that such
stockholder is not subject to backup withholding by checking the box in Part 2
of the form. Failure to provide the information on the form may subject the
tendering stockholder to 31% federal income tax 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 of the
form is checked and the Depositary is not provided with a TIN within 60 days,
the Depositary will withhold 31% on all payments of the purchase price
thereafter until a TIN is provided to the Depositary.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE COPY HEREOF (TOGETHER
WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED
DOCUMENTS) OR THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE
DEPOSITARY, ON OR PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO
PURCHASE).
IMPORTANT TAX INFORMATION
Under federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required by law to provide the Depositary (as payer)
with such stockholder's correct TIN on Substitute Form W-9 below. If such
stockholder is an individual, the TIN is his social security number. If the
Depositary is not provided with the correct TIN, payments that are made to such
stockholder with respect to Shares purchased pursuant to the Offer may be
subject to backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to those backup withholding and reporting
requirements. In order 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. 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 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
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of his correct TIN by completing the
Substitute Form W-9 below certifying that the TIN provided on such form is
correct (or that such stockholder is awaiting a TIN) and that (1) such holder
has not been notified by the Internal Revenue Service that he is subject to
backup withholding as a result of failure to report all interest or dividends or
(2) the Internal Revenue Service has notified such holder that he is no longer
subject to backup withholding (see Part 2 of Substitute Form W-9).
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 owner of the Shares. If
the Shares are in more than one name or are not in the name of the actual owner,
consult the enclosed "Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9" for additional guidance on which number to
report.
PAYER'S NAME: SOCIETY NATIONAL BANK
<PAGE> 7
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT Social Security Number
FORM W-9 RIGHT AND CERTIFY BY SIGNING AND DATING BELOW.
OR
Employer Identification Number
---------------------------------------------------------------------------------------------------
PART 2 -- For Payees exempt from backup withholding, see the enclosed Guidelines for Certification
DEPARTMENT OF THE TREASURY of Taxpayer Identification Number on Substitute Form W-9 and complete as instructed therein.
INTERNAL REVENUE SERVICE
PAYER'S REQUEST FOR CERTIFICATES -- Under penalties of perjury, I certify that:
TAXPAYER
IDENTIFICATION NUMBER (TIN) (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for
a number to be issued to me), and
- ------------------------------
PART 3 -- Awaiting TIN (2) I am not subject to backup withholding either because I have not been notified by the Internal
Please see Below Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to
/ / report all interest or dividends, or the IRS has notified me that I am no longer subject to
backup withholding.
CERTIFICATION INSTRUCTIONS -- YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY
IRS THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING INTEREST OR DIVIDENDS
ON YOUR TAX RETURN. HOWEVER, IF AFTER BEING NOTIFIED BY IRS THAT YOU WERE SUBJECT TO BACKUP
WITHHOLDING YOU RECEIVED ANOTHER NOTIFICATION FROM IRS THAT YOU ARE NO LONGER SUBJECT TO BACKUP
WITHHOLDING, DO NOT CROSS OUT ITEM (2). (ALSO SEE INSTRUCTIONS IN THE ENCLOSED GUIDELINES.)
----------------------------------------------------------------------------------------------
SIGNATURE DATE
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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 taxpayer identification number.
- -------------------------------------- --------------------------------------
Signature Date
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 3 OF SUBSTITUTE FORM W-9.
<PAGE> 8
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
/ / CHECK HERE IF SHARES ARE BEING TENDERED BY BOOK-ENTRY TRANSFER MADE TO THE
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution_____________________________________________
Account Number____________________________________________________________
Transaction Code Number___________________________________________________
/ / CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s)___________________________________________
Date of Execution of Notice of Guaranteed Delivery________________________
Name of Institution that Guaranteed Delivery______________________________
If Delivered by Book-Entry Transfer, Check Box: / /
Book-Entry Transfer Facility______________________________________________
Account Number____________________________________________________________
THE INFORMATION AGENT FOR THE OFFER IS:
MORROW & CO., INC.
909 Third Avenue, 20th Floor
New York, New York 10022
Toll Free 1-800-566-9058
Or Call Collect: (212) 754-8000
Banks and Brokerage Firms please call:
1-800-662-5200
THE DEALER MANAGERS FOR THE OFFER ARE:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
(212) 902-1000
May 18, 1995
<PAGE> 9
<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- -------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) CERTIFICATE(S) TENDERED
(PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- -------------------------------------------------------------------------------------------------------------
| | TOTAL NUMBER | |
| | OF SHARES | NUMBER |
| CERTIFICATE | REPRESENTED BY | 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 any certificate(s)
delivered to the Depositary are being tendered. See Instruction 4.
- -------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
CRSS INC.
As set forth in Section 3 of the Offer to Purchase (as defined below), this
form or one substantially equivalent hereto must be used to accept the Offer (as
defined below) if certificates representing shares of common stock, $1.00 par
value (the "Shares"), of CRSS Inc., a Delaware corporation (the "Company"), and
the associated rights (the "Rights") issued pursuant to the Rights Agreement
dated as of November 29, 1988, as amended to date, between the Company and First
Chicago Trust Company of New York, as successor Trustee to Morgan Shareholders
Services Trust Company (the "Rights Agent"), are not immediately available, if
the procedures for book-entry transfer cannot be completed on a timely basis, or
if time will not permit all required documents to reach Society National Bank,
the Depositary, prior to the Expiration Date (as defined in Section 1 of the
Offer to Purchase). Such form may be delivered by hand or sent by telegram,
telex, facsimile transmission, or mail to the Depositary. See Section 3 of the
Offer to Purchase.
TO: SOCIETY NATIONAL BANK, DEPOSITARY
DELIVERY ADDRESSES
<TABLE>
<S> <C>
By Mail: By Hand:
Society National Bank Society National Bank
Key Services Corporation KeyCorp Shareholder Services, Inc.
P.O. Box 6477 700 Louisiana Street, Suite 2620
Cleveland, Ohio 44101-1477 Houston, Texas 77002
Attn: Lorraine Rodewald
-or-
Society National Bank
Key Services Corporation
4900 Tiedeman Road
Brooklyn, Ohio 44114-2302
Attn: Reorganization Department
</TABLE>
OTHER INFORMATION
<TABLE>
<S> <C>
Telephone Numbers: By Facsimile:
(For information call collect) (216) 813-4269
(800) 539-6549 Confirm by telephone:
or (216) 813-6598
(713) 546-5500
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER
THAN THE ONES LISTED ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION
UNDER THE INSTRUCTION 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 ATC Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of Tractebel Corporation, a Delaware
corporation, upon the terms and subject to the conditions set forth in its Offer
to Purchase dated May 18, 1995 (the "Offer to Purchase") and the related Letter
of Transmittal (which together with the Offer to Purchase constitute the
"Offer"), receipt of which is hereby acknowledged, the number of Shares and
associated Rights set forth below, all pursuant to the guaranteed delivery
procedures set forth in Section 3 of the Offer to Purchase.
<TABLE>
<S> <C>
Number of
Shares:____________________
Number of
Rights:____________________
Certificate Nos. (if available): Name(s) of Record Holder(s):
- --------------------------------------------------- ---------------------------------------------------
- --------------------------------------------------- ---------------------------------------------------
(Please Print)
Check ONE box if Shares or Rights will be tendered Address:
by book-entry transfer ---------------------------------------------------
/ / The Depository Trust Company ---------------------------------------------------
/ / Midwest Securities Trust Company Area Code and
/ / Philadelphia Depository Trust Company Tel. No.:
---------------------------------------------------
---------------------------------------------------
Account Number:----------------------------------- ---------------------------------------------------
Signature(s)
Dated:---------------------------------------------
</TABLE>
<PAGE> 2
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member firm of a registered national securities exchange
or of the National Association of Securities Dealers, Inc., or a commercial bank
or trust company having an office or correspondent in the United States (each of
the foregoing being referred to as an "Eligible Institution"), hereby guarantees
delivery to the Depositary, at one of its addresses set forth above, of
certificates representing the Shares tendered hereby, in proper form for
transfer, or confirmation of book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company ("Book-Entry Transfer
Facility"), with delivery of a properly completed and duly executed Letter of
Transmittal (or a facsimile copy thereof), and any other required documents,
within five (5) New York Stock Exchange, Inc. ("NYSE") trading days of the date
hereof:
<TABLE>
<S> <C>
______________________________________________________ ______________________________________________________
Name of Firm Authorized Signature
______________________________________________________ ______________________________________________________
Address Title
______________________________________________________ Name _________________________________________________
Zip Code Please Type or Print
______________________________________________________ Dated:__________________________________________, 1995
Area Code and Telephone Number
</TABLE>
THE ELIGIBLE INSTITUTION THAT COMPLETES THIS FORM MUST COMMUNICATE THE
GUARANTEE TO THE DEPOSITARY AND MUST DELIVER THE LETTER OF TRANSMITTAL AND
CERTIFICATES FOR SHARES TO THE DEPOSITARY WITHIN THE TIME PERIOD SHOWN HEREIN.
FAILURE TO DO SO COULD RESULT IN A FINANCIAL LOSS TO SUCH ELIGIBLE INSTITUTION.
DO NOT SEND SHARE CERTIFICATES
WITH THIS FORM -- SHARE CERTIFICATES SHOULD BE SENT WITH
THE LETTER OF TRANSMITTAL
<PAGE> 1
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
(212) 902-1000
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
CRSS INC.
AT $14.50 NET PER SHARE
BY
ATC ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
AMERICAN TRACTEBEL CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
FRIDAY, JUNE 16, 1995, UNLESS THE OFFER IS EXTENDED.
MAY 18, 1995
TO BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES AND OTHER NOMINEES:
We have been appointed by ATC Acquisition Corp., a Delaware corporation
("Purchaser") and a wholly owned subsidiary of American Tractebel Corporation, a
Delaware corporation ("Parent"), to act as Dealer Managers in connection with
Purchaser's offer to purchase all outstanding shares of common stock, $1.00 par
value (the "Common Stock"), of CRSS Inc., a Delaware corporation (the
"Company"), including the associated Rights (the "Rights") issued pursuant to
the Rights Agreement dated as of November 29, 1988, as amended by an Amendment
to Rights Agreement dated as of January 27, 1994 and a Second Amendment to
Rights Agreement dated as of May 16, 1994 (the "Rights Agreement"), between the
Company and First Chicago Trust Company of New York, as successor Trustee for
Morgan Shareholders Services Trust Company, as Rights Agent (the "Rights" and,
together with the Common Stock, the "Shares"), at a price of $14.50 per Share,
net to the seller in cash, upon the terms and subject to the conditions set
forth in Purchaser's Offer to Purchase, dated May 18, 1995 (the "Offer to
Purchase"), and the related Letter of Transmittal (which together constitute the
"Offer") enclosed herewith. Please furnish copies of the enclosed materials to
those of your clients for whose accounts you hold Shares registered in your name
or in the name of your nominee.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST A
MAJORITY OF THE THEN OUTSTANDING SHARES ON A FULLY DILUTED BASIS. THE OFFER IS
ALSO CONDITIONED UPON, AMONG OTHER THINGS, THE EXPIRATION OR TERMINATION OF ANY
APPLICABLE ANTITRUST WAITING PERIODS.
Enclosed for your information and use are copies of the following
documents:
1. Offer to Purchase, dated May 18, 1995.
2. Letter of Transmittal to be used by holders of Shares in accepting the
Offer and tendering Shares (together with accompanying Substitute Form W-9).
3. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
4. Notice of Guaranteed Delivery to be used to accept the Offer if the
Shares and all other required documents are not immediately available or cannot
be delivered to Society National Bank (the "Depositary") by the Expiration Date
(as defined in the Offer to Purchase) or if the procedure for book-entry
transfer cannot be completed by the Expiration Date.
5. A Solicitation/Recommendation Statement on Schedule 14D-9 filed with the
Securities and Exchange Commission by the Company.
6. A 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; and
7. Return envelope addressed to the Depositary.
<PAGE> 2
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
FRIDAY, JUNE 16, 1995, UNLESS THE OFFER IS EXTENDED.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates
evidencing such Shares (or a confirmation of a book-entry transfer of such
Shares into the Depositary's account at one of the Book-Entry Transfer
Facilities (as defined in the Offer to Purchase), (ii) a Letter of Transmittal
(or facsimile thereof) properly completed and duly executed and (iii) any other
required documents in accordance with the instructions contained in the Letter
of Transmittal.
If a holder of Shares wishes to tender Shares, but cannot deliver such
holder's certificates or other required documents, or cannot comply with the
procedure for book-entry transfer, prior to the expiration of the Offer, a
tender of Shares may be effected by following the guaranteed delivery procedure
described in Section 3 of the Offer to Purchase.
Purchaser will not pay any fees or commissions to any broker, dealer or
other person (other than the Dealer Managers, the Depositary and the Information
Agent as described in the Offer) in connection with the solicitation of tenders
of Shares pursuant to the Offer. However, Purchaser will reimburse you for
customary mailing and handling expenses incurred by you in forwarding any of the
enclosed materials to your clients. Purchaser will pay or cause to be paid any
stock transfer taxes payable with respect to 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
Goldman, Sachs & Co. or Morrow & Co., Inc. (the "Information Agent") at their
respective addresses and telephone numbers set forth on the back cover page of
the Offer to Purchase.
Additional copies of the enclosed material may be obtained from the
Information Agent, at the address and telephone numbers set forth on the back
cover page of the Offer to Purchase.
Very truly yours,
GOLDMAN, SACHS & CO.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL AUTHORIZE YOU
OR ANY OTHER PERSON TO ACT ON BEHALF OF OR AS THE AGENT OF PARENT, PURCHASER,
THE COMPANY, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE DEPOSITARY, OR OF
ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY
DOCUMENT OR TO MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH
THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED
THEREIN.
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
CRSS INC.
AT $14.50 NET PER SHARE
BY
ATC ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
AMERICAN TRACTEBEL CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
FRIDAY, JUNE 16, 1995, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are an Offer to Purchase dated May 18, 1995
(the "Offer to Purchase") and a related Letter of Transmittal (which together
constitute the "Offer") relating to an offer by ATC Acquisition Corp., a
Delaware corporation ("Purchaser") and a wholly owned subsidiary of American
Tractebel Corporation, a Delaware corporation ("Tractebel"), to purchase for
$14.50 per Share, net to the seller in cash, upon the terms and subject to the
conditions of the Offer, all outstanding shares of common stock, par value $1.00
per share (the "Shares"), of CRSS Inc., a Delaware corporation (the "Company"),
including the associated Rights (the "Rights") issued pursuant to the Rights
Agreement dated as of November 29, 1988, as amended by an Amendment to Rights
Agreement dated as of January 27, 1994 and a Second Amendment to Rights
Agreement dated as of May 16, 1995 (the "Rights Agreement"), between the Company
and First Chicago Trust Company of New York, as successor Trustee for Morgan
Shareholders Services Trust Company, as Rights Agent. Unless the context
otherwise requires, all references to Shares shall include the associated
Rights, and all references to such Rights shall include all benefits that may
inure to the holders of Shares or to the holders of such Rights pursuant to the
Rights Agreement. THIS MATERIAL IS BEING FORWARDED TO YOU AS THE BENEFICIAL
OWNER OF SHARES CARRIED BY US IN YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. 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 tender any
or all of such Shares held by us for your account, upon the terms and subject to
the conditions set forth in the Offer.
Your attention is invited to the following:
1. The Offer price is $14.50 per Share, net to the seller in cash.
2. The Offer is being made for all outstanding Shares.
3. The Board of Directors of the Company has recommended that the
Company's stockholders accept the Offer and tender their Shares
pursuant to the Offer.
4. The Offer and withdrawal rights will expire at 5:00 p.m., New York
City time, on Friday, June 16, 1995, unless the Offer is extended.
5. The Offer is conditioned upon, among other things, (a) such number of
Shares being validly tendered and not withdrawn which will represent
not less than a majority of the Shares outstanding on a fully diluted
basis on the date of purchase (the "Minimum Share Condition") and (b)
the expiration of any applicable antitrust waiting periods.
6. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the transfer of Shares pursuant
to the Offer.
<PAGE> 2
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and is being made to all holders of Shares. Purchaser is not aware
of any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. If Purchaser becomes aware
of any valid state statute prohibiting the making of the Offer or the acceptance
of Shares pursuant thereto, Purchaser will use commercially reasonable efforts
to comply with any such state statute. If, after such commercially reasonable
efforts, Purchaser cannot comply with such state statute, the Offer will not be
made to (nor will tenders be accepted from or on behalf of) the holders of
Shares in such state. In any jurisdiction where the securities, blue sky or
other laws require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on behalf of Purchaser by Goldman, Sachs & Co.
or one or more registered brokers or dealers licensed under the laws of such
jurisdiction.
If you wish to have us tender any or all of the Shares held by us for your
account, please instruct us by completing, executing and returning to us the
instruction form contained in this letter. An envelope in which to return your
instructions to us is enclosed. If you authorize a tender of your Shares, all
such Shares will be tendered unless otherwise indicated in such instruction
form. PLEASE FORWARD YOUR INSTRUCTIONS TO US IN AMPLE TIME TO PERMIT US TO
SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
CRSS INC.
The undersigned acknowledge(s) receipt of your letter, the Offer to
Purchase dated May 18, 1995, and the related Letter of Transmittal relating to
the offer by ATC Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of American Tractebel Corporation, a Delaware corporation, to
purchase all outstanding shares of common stock, par value $1.00 per share of
CRSS Inc., including the associated Rights (as defined in the Offer to Purchase)
(the "Shares").
This will instruct you to tender the number of Shares indicated below that
are held by you for the account of the undersigned, on the terms and subject to
the conditions set forth in the Offer.
Number of Shares to be tendered* SIGN HERE
- ------------------------------------- -------------------------------------
-------------------------------------
-------------------------------------
Signature(s)
-------------------------------------
-------------------------------------
-------------------------------------
Please print name(s) and address(es) here
-------------------------------------
Area Code and Tel. No(s)
-------------------------------------
Tax Identification No(s)
Dated: , 1995
*Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
<PAGE> 1
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
<TABLE>
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the payer.
<S> <C> <C> <C>
- --------------------------------------------------------- ---------------------------------------------------------
GIVE THE GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF-- NUMBER OF--
- --------------------------------------------------------- ---------------------------------------------------------
1. An individual's account The individual 7. Corporate The corporation
2. Two or more individuals The actual owner of 8. Association, club, religious, The organization
(joint account) the account or, if charitable, educational or
combined funds, any other tax-exempt
one of the individu- organization
als(1) 9. Partnership The partnership
3. Custodian account of a minor The minor(2) 10. A broker or registered The broker or
(Uniform Gift to Minors Act) nominee nominee
4. a. The usual revocable The grantor- 11. Account with the Department The public entity
savings trust account trustee(1) of Agriculture in the name of
(grantor is also trustee) a public entity (such as a
b. So-called trust account The actual owner(1) State or local government,
that is not a legal or school district, or prison)
valid trust under State law that receives agricultural
5. Sole proprietorship account The owner(3) program payments
6. A valid trust, estate, or Legal entity (Do not
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)
- --------------------------------------------------------- ---------------------------------------------------------
<FN>
(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 owner.
(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.
</TABLE>
<PAGE> 2
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 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 (the "IRS") and
apply for a number.
PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING
The following lists payees that are exempt from backup withholding and
information reporting. For interest and dividends, all listed payees are exempt
except item (9). For broker transactions, payees listed in (1) through (13), and
a person registered under the Investment Advisers Act of 1940 who regularly acts
as a broker are exempt. Payments subject to reporting under sections 6041 and
6041A are generally exempt from backup withholding only if made to payees
described in items (1) through (7), except that a corporation that provides
medical and health care services or bills and collects payments for such
services is not exempt from backup withholding or information reporting. Only
payees described in items (2) through (6) are exempt from backup withholding for
barter exchange transactions, patronage dividends, and payments by certain
fishing boat operators.
(1) A corporation.
(2) An organization exempt from tax under section 501(a), or an individual
retirement plan (IRA), or a custodial account under 403(b)(7).
(3) The United States or any agency or instrumentality thereof.
(4) A state, the District of Columbia, a possession of the United States, or
any political subdivision or instrumentality thereof.
(5) A foreign government or a political subdivision, agency or
instrumentality thereof.
(6) An international organization or any agency or instrumentality thereof.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the U.S. or
a possession of the U.S.
(9) A futures commission merchant registered with the Commodity Futures
Trading Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the
Investment Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in
the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List.
(15) A trust exempt from tax under section 664(c) or described in section
4947(a)(1).
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 nonresidential 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 interests on obligations issued by individuals.
Note: You may be subject to backup withholding if this interest is $600 or
more and is paid in the course of the payer's trade or business and you have
not provided your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt interest dividends under
section 852).
- 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 by you.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Payments are not subject to information reporting and are also not subject to
backup withholding. For details, see sections 6041, 6041A(a), 6042, 6044, 6045,
6049, 6050A and 6050N and the regulations thereunder.
PRIVACY ACT NOTICE.--Section 6109 requires you to furnish your correct taxpayer
identification number (TIN) to persons who must file information returns with
IRS to report interest, dividends, and certain other income paid to you,
mortgage interest you paid, the acquisition or abandonment of secured property,
or contributions you made to an individual retirement arrangement (IRA). IRS
uses the numbers for identification purposes and to help verify the accuracy of
your tax return. You must provide your TIN whether or not you are required to
file a tax return. Payers must generally withhold 31% of taxable interest,
dividend, and certain other payments to a payee who does not furnish a TIN to a
payer. Certain penalties may also apply.
PENALTIES
(1) PENALTIES FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you
fail to furnish your taxpayer identification number to a requester, 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) FAILURE TO REPORT CERTAIN ITEMS ON YOUR TAX RETURN -- If you fail to
properly include on your tax return certain items reported to IRS, such failure
will be treated as being due to negligence and will be subject to a penalty
equal to the sum of 20% on any portion of an underpayment of tax attributable to
that failure unless there is clear and convincing evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis that results in no imposition of
backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE
<PAGE> 1
[CRSS LETTERHEAD]
NEWS RELEASE
CONTACTS
AMERICAN TRACTEBEL: CRSS:
PHILIPPE VAN MARCKE BRUCE WILKINSON
212/751-6333, ext. 16 713/552-2324
GARY GREENBLATT BILL GARDINER
212/751-6333, ext. 15 713/552-2160
FOR IMMEDIATE RELEASE
AMERICAN TRACTEBEL CORPORATION TO ACQUIRE CRSS INC.
THROUGH TENDER OFFER
NEW YORK CITY; HOUSTON, May 17 - American Tractebel Corporation has entered
into a merger agreement with CRSS Inc. (NYSE: CRX) providing for American
Tractebel through a wholly-owned subsidiary to acquire CRSS through a cash
tender offer. The tender offer will commence promptly for all shares of CRSS at
a cash price of $14.50 per share, to be followed by a cash merger at the same
price for shares not tendered. The expiration date of the offer will be twenty
business days following the commencement, unless the offer is extended.
Including all outstanding options, CRSS has approximately 14.2 million shares
outstanding.
Purchase of shares pursuant to the tender offer will be subject to not less
than a majority of the outstanding shares on a fully diluted basis being validly
tendered and not withdrawn prior to the expiration date of the offer. In
addition, the offer is subject to usual and customary conditions, including
expiration of all applicable waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 and the Exon-Florio Amendment.
The tender offer and subsequent cash merger were approved by the Board of
Directors of CRSS by unanimous vote of the directors present. The CRSS Board
determined that the terms of the offer and merger are fair to, and in the best
interests of CRSS shareholders and recommends that existing shareholders tender
their shares.
CRSS is a leading developer and operator of independent power and industrial
energy facilities. CRSS has developed primarily domestic energy projects that
represent a total capital investment of approximately $823
- more -
<PAGE> 2
CRSS Inc.
Page 2
million and produce combined electrical and thermal energy in excess of 1,340
equivalent megawatts for utility and industrial customers.
Commenting on the announced acquisition, Philippe van Marcke, President of
American Tractebel, states, "We are delighted to have the opportunity to
significantly increase our North American assets through CRSS' impressive list
of existing projects and projects under development. The acquisition will allow
a very experienced management and development team and highly skilled staff to
join us in our efforts within our industrial market niche."
Bruce Wilkinson, Chairman and Chief Executive Officer of CRSS, said, "We are
extremely pleased that a merger agreement has been reached with American
Tractebel. This is an outstanding value for our shareholders. Our entire
management team is enthusiastic about becoming part of the Tractebel
organization."
American Tractebel Corporation, based in New York, is an owner, operator and
developer of independent power generation projects in the United States and
Canada. American Tractebel Corporation is a subsidiary of Powerfin S.A. which
is the worldwide developer of independent electricity and gas projects for the
Tractebel Group, a Brussels-based major industrial group. Tractebel Group's
activities throughout the world include generation, transmission and
distribution of electricity, transportation and distribution of natural gas as
well as communications, engineering, technical installations and services to
the community, water treatment, environmental services and real estate.
Goldman, Sachs & Co. are acting as Dealer Managers of the tender offer.
<PAGE> 3
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares. The Offer is made solely by the Offer to Purchase dated
May 18, 1995 and the related Letter of Transmittal and is not being made to,
nor will tenders be accepted from or on behalf of, holders of Shares residing
in any jurisdiction in which the making of the Offer or acceptance thereof
would not be in compliance with the laws of such jurisdiction. In those
jurisdictions where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of Purchaser by Goldman, Sachs & Co. or one or more of the
registered brokers or dealers licensed under the laws of such jurisdictions.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
CRSS INC.
AT
$14.50 NET PER SHARE
BY
ATC AQUISITION CORP.,
A WHOLLY OWNED SUBSIDIARY OF
AMERICAN TRACTEBEL CORPORATION
ATC Aquisition Corp., a Delaware corporation and a wholly owned
subsidiary of American Tractebel Corporation (the "Purchaser"), is offering to
purchase for cash all outstanding shares of common stock, par value $1.00 per
share including the associated rights (the "Shares") of CRSS Inc., a Delaware
corporation at $14.50 per Share, net to the seller in cash (the "Offer"). All
information required to be disclosed by Rule 14d-6(e)(1)(vii) of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended, is
included in the Schedule 14D-1 to be filed by Purchaser with the Securities and
Exchange Commission with respect to this transaction and is herein incorporated
by reference. A stockholder's list and securities position listings have been
requested by Purchaser and tender offer materials will be mailed to all
stockholders of record and will be furnished to brokers, banks and similar
persons whose name appears or whose nominee appears on the list of stockholders
or, if applicable, who are listed as participants in a clearing agency's
security position listing for subsequent transmittal to beneficial owners of
such securities. Any stockholder desiring to tender all or any portion of his
or her Shares should either (a) contact the Information Agent for the Offer at
the address or phone numbers listed below to request that Purchaser's tender
offer material, including the Offer to Purchase, Letter of Transmittal and
instructions to the Letter of Transmittal and any other required documents be
delivered to such stockholder at Purchaser's expense 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 desires to tender such Shares. A stockholder who desires to tender Shares
and whose certificates representing such Shares are not immediately available,
or who cannot comply with the procedures for book-entry transfer on a timely
basis, may tender such Shares by following the procedures for guaranteed
delivery set forth in the Offer to Purchase.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON FRIDAY, JUNE 16, 1995, UNLESS THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, such number of
Shares being validly tendered and not withdrawn which will represent not less
than a majority of the Shares outstanding on a fully diluted basis on the date
of purchase.
For purposes of the Offer, Purchaser will be deemed to have accepted
for payment (and thereby purchased) tendered Shares, if and when Purchaser
gives oral or written notice to the Depositary, as agent for the tendering
stockholders, of Purchaser's acceptance of such Shares for payment pursuant to
the Offer. Any stockholder who has tendered Shares pursuant to the Offer will
have the right to withdraw such Shares during the period the tender remains
open by giving notice of withdrawal to the Depositary for the Offer in
accordance with the terms of the Offer to Purchase. Subject to the terms of the
Offer, Purchaser reserves the right, at any time or from time to time, to
extend the period during which the Offer is open by giving oral or written
notice of such extension to the Depositary.
Questions and requests for assistance may be directed to the Dealer
Managers or the Information Agent at their respective addresses and telephone
numbers set forth below. A stockholder may obtain a copy of the tender offer
materials by contacting the Information Agent.
The Information Agent for the Offer is:
MORROW & CO., INC.
909 Third Avenue, 20th Floor
New York, New York 10022
Banks & Brokers Call Toll Free 1-800-662-5200
All Others Call Toll Free 1-800-566-9058
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
(212) 902-1000
May 18, 1995
<PAGE> 1
AGREEMENT OF MERGER
AMONG
AMERICAN TRACTEBEL CORPORATION,
ATC ACQUISITION CORP.
AND
CRSS INC.
DATED AS OF
MAY 16, 1995
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
I. THE TENDER OFFER.................................................................. 1
1.1. The Offer................................................................... 1
1.2. Company Action.............................................................. 1
1.3. Stockholder Lists........................................................... 2
1.4. Board of Directors of the Company........................................... 2
II. THE MERGER........................................................................ 2
2.1. Merger...................................................................... 2
2.1.1. Merger............................................................... 2
2.1.2. Effective Time....................................................... 2
2.1.3. Effect of Merger..................................................... 3
2.1.4. Conversion of Shares................................................. 3
2.2. Stockholders' Meeting of the Company........................................ 3
2.3. Consummation of the Merger.................................................. 3
2.4. Payment for Shares.......................................................... 3
2.5. Closing of the Company's Transfer Books..................................... 4
2.6. Company Stock Options and Related Matters................................... 4
2.7. Dissenters' Rights.......................................................... 5
III. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER............................ 5
3.1. Corporate Organization...................................................... 5
3.2. Authority................................................................... 5
3.3. Offer Documents............................................................. 5
3.4. Merger Proxy Statement...................................................... 6
3.5. Fees........................................................................ 6
3.6. Consents and Approvals; No Violation........................................ 6
3.7. Financing................................................................... 6
3.8. Not a Public Utility........................................................ 6
IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................................... 6
4.1. Corporate Organization...................................................... 6
4.2. Capitalization.............................................................. 7
4.3. Authority................................................................... 7
4.4. Consent and Approvals; No Violation......................................... 7
4.5. Commission Filings.......................................................... 8
4.6. Absence of Certain Changes.................................................. 8
4.7. Fees........................................................................ 8
4.8. Offer Documents............................................................. 9
4.9. Schedule 14D-9.............................................................. 9
4.10. Merger Proxy Statement...................................................... 9
4.11. Qualifying Facility......................................................... 9
V. COVENANTS.......................................................................... 9
5.1. Acquisition Proposals....................................................... 9
5.2. Amendment of Rights Agreement............................................... 9
5.3. Interim Operations.......................................................... 10
5.3.1. Conduct of Business.................................................. 10
5.3.2. Certificate of Incorporation and By-Laws............................. 10
5.3.3. Capital Stock........................................................ 10
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
5.3.4. Dividends............................................................ 10
5.3.5. Employee Plans, Compensation, Etc.................................... 10
5.3.6. Debt................................................................. 11
5.4. Access and Information...................................................... 11
5.5. Certain Filings, Consents and Arrangements.................................. 11
5.6. Merger Proxy Statement...................................................... 11
5.7. Additional Agreements....................................................... 11
5.8. Compliance with Antitrust Laws.............................................. 12
5.9. Publicity................................................................... 12
5.10. Directors' and Officers' Insurance: Indemnification......................... 12
5.11. Employee Benefits........................................................... 13
5.11.1. Employment Agreements............................................... 13
5.11.2. Employee Benefits................................................... 13
5.11.3. No Guaranty......................................................... 13
VI. CONDITIONS......................................................................... 13
6.1. Conditions.................................................................. 13
6.1.1. Purchase of Shares................................................... 13
6.1.2. Shareholder Approval................................................. 13
6.1.3. Injunctions; Illegality.............................................. 13
6.1.4. HSR Act and Exon-Florio.............................................. 13
6.2. Conditions to Parent and Purchaser Obligations.............................. 14
VII. MISCELLANEOUS..................................................................... 14
7.1. Termination................................................................. 14
7.2. Non-Survival of Representations, Warranties and Agreements.................. 14
7.3. Waiver and Amendment........................................................ 14
7.4. Entire Agreement............................................................ 15
7.5. Applicable Law.............................................................. 15
7.6. Interpretation.............................................................. 15
7.7. Notices..................................................................... 15
7.8. Counterparts................................................................ 16
7.9. Parties in Interest; Assignment............................................. 16
7.10. Expenses.................................................................... 16
7.11. Obligation of Parent........................................................ 17
7.12. Enforcement of the Agreement................................................ 17
7.13. Severability................................................................ 17
7.14. Fiduciary Duty.............................................................. 17
</TABLE>
ii
<PAGE> 4
AGREEMENT OF MERGER
AGREEMENT OF MERGER, dated as of May 16, 1995 (the "Agreement"), among
American Tractebel Corporation, a Delaware corporation ("Parent"), ATC
Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of
Parent ("Purchaser"), and CRSS Inc., a Delaware corporation (the "Company").
WHEREAS, the Boards of Directors of Parent, Purchaser and the Company have
each determined that it is in the best interests of their respective
stockholders for the Company to be acquired upon the terms and subject to the
conditions set forth herein; and
WHEREAS, in furtherance thereof, Parent has organized Purchaser.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, Parent, Purchaser and the Company hereby
agree as follows:
I. THE TENDER OFFER
1.1. The Offer. Provided that this Agreement has not been terminated in
accordance with Section 7.1 hereof and none of the events set forth in Exhibit A
has occurred or exists, Purchaser will, and Parent will cause Purchaser to,
commence (within the meaning of Rule 14d-2(a) promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) as promptly as
practicable after the date hereof, but in any event not later than May 24, 1995,
a tender offer for all outstanding shares of Common Stock, $1 par value
(referred to herein as the "Shares" and individually as a "Share"), of the
Company at a price of $14.50 per Share, net to the seller in cash (the "Price
Per Share"). (Such tender offer, as it may be amended from time to time pursuant
to this Agreement, being referred to herein as the "Offer.") The Offer will be
subject only to the conditions set forth in Exhibit A, including without
limitation the condition that a number of Shares be validly tendered and not
withdrawn prior to the expiration date provided in the Offer which, when added
to the Shares beneficially owned by Parent, Purchaser and their affiliates, will
represent not less than a majority of the Shares outstanding on a fully diluted
basis (the "Minimum Share Condition"). Any such condition other than the Minimum
Share Condition may be waived by Purchaser in its sole discretion. Purchaser
may, at any time, transfer or assign to Powerfin, S.A., the parent corporation
of Parent, or to one or more corporations directly or indirectly wholly owned by
Parent or Powerfin, S.A. the right to purchase all or any portion of the Shares
tendered pursuant to the Offer, but any such transfer or assignment will not
relieve 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. Purchaser will accept for payment all Shares validly
tendered pursuant to the Offer and not withdrawn as soon as legally permissible,
and pay for all such Shares as promptly as practicable thereafter, in each case
upon the terms and subject to the conditions of the Offer. Notwithstanding
anything herein to the contrary, it is understood and agreed that Purchaser may
extend the expiration date of the Offer for up to ten business days beyond the
time it would otherwise be required to accept validly tendered Shares for
payment if (i) at least 80% of the Shares outstanding on a fully diluted basis
have been validly tendered for payment, (ii) Purchaser reasonably determines
such extension is appropriate in order to enable it to purchase at least 90% of
the outstanding Shares on a fully diluted basis in the Offer and (iii) Purchaser
waives all other conditions to the Offer.
1.2. Company Action. The Company consents to the Offer. As soon as
practicable after the date of commencement of the Offer, the Company will file
with the Securities and Exchange Commission (the "Commission") and mail to the
holders of Shares a Solicitation/Recommendation Statement on Schedule 14D-9
pursuant to the Exchange Act (the "Schedule 14D-9"). The Schedule 14D-9 will
set forth, and the Company hereby represents, that the Board of Directors of the
Company has at a meeting duly called and held and at which a quorum was present
and acting throughout, by the unanimous vote of all directors present (a)
determined that the Offer and the Merger are fair to and in the best interests
of the Company and its stockholders, (b) approved the Offer, this Agreement and
the Merger, and (c) recommended that the holders of Shares accept the Offer and
tender their Shares pursuant thereto; provided, however, that such
<PAGE> 5
recommendation may be withdrawn, modified or amended to the extent required by
the Board of Directors' Fiduciary Duty (as defined in Section 7.14 hereof). The
Company has received the written opinion of Morgan Stanley & Co. Incorporated
that the consideration to be received by the holders of the Shares pursuant to
the Agreement is fair from a financial point of view. The Company represents
that its Board of Directors has taken all actions which are necessary on the
part of the Company or its Board of Directors for purposes of Section 251 of the
General Corporation Law of the State of Delaware (the "GCL"). The Company has
taken all appropriate actions so that the restrictions on business combinations
contained in Section 203 of the GCL will not apply with respect to or as a
result of the transactions contemplated by this Agreement.
1.3. Stockholder Lists. The Company will promptly furnish Purchaser a
computer tape or diskette containing the names and addresses of all record
holders of Shares and lists of securities positions of Shares held in stock
depositories, each as of a recent date, and will promptly furnish Purchaser with
such additional information, including updated lists of stockholders of the
Company and lists of securities positions, and such other assistance as
Purchaser or its agents may reasonably request in connection with the Offer.
Subject to the requirements of law, and except for such steps as are necessary
to disseminate the Offer Documents (as defined in Section 3.3 hereof) and other
documents contemplated hereby, Parent and Purchaser will hold in confidence the
information furnished pursuant to this Section 1.3, will use such information
only in connection with the Offer, and, if this Agreement is terminated, will
upon request deliver to the Company the computer tape or diskette, together with
any copy thereof and all such information, and any copies or extracts therefrom,
in its possession or under its control.
1.4. Board of Directors of the Company. Upon Purchaser's acquisition of a
majority of the outstanding shares of Common Stock pursuant to the Offer or
otherwise, and from time to time thereafter so long as Powerfin, S.A. or Parent
and/or any of its direct or indirect wholly owned subsidiaries (including
Purchaser) owns a majority of the outstanding shares of Common Stock, Parent
will be entitled, subject to compliance with applicable law, to designate at its
option up to that number of directors, rounded up to the nearest whole number,
of the Company's Board of Directors as will make the percentage of the Company's
directors designated by Parent equal to the percentage of outstanding shares of
Common Stock held by Parent and any of its direct or indirect wholly owned
subsidiaries (including Purchaser). The Company will, upon the request of
Parent, promptly increase the size of its Board of Directors and/or use its
reasonable efforts to secure the resignation of such number of directors as is
necessary to enable Parent's designees to be elected to the Company's Board of
Directors and shall use its reasonable efforts to cause Parent's designees to be
so elected, subject in all cases to Section 14(f) of the Exchange Act, provided
that, prior to the Effective Time (as defined in Section 2.1.2 hereof), the
Company will use its reasonable efforts to assure that the Company's Board of
Directors always has (at the Company's election) at least three members who are
directors of the Company as of the date hereof.
II. THE MERGER
2.1. Merger.
2.1.1. Merger. Subject to the terms and conditions hereof, (a) Purchaser
will be merged with and into the Company and the separate corporate existence of
Purchaser will thereupon cease (the "Merger") in accordance with the applicable
provisions of the GCL, and (b) each of the Company, Purchaser and Parent will
use its commercially reasonable efforts to cause the Merger to be consummated as
soon as practicable following the expiration of the Offer.
2.1.2. Effective Time. As soon as practicable following fulfillment or
waiver of the conditions specified in Article VI hereof, and provided that this
Agreement has not been terminated or abandoned pursuant to Section 7.1 hereof,
the Company and Purchaser (the "Constituent Corporations") will cause a
Certificate of Merger (the "Certificate of Merger") to be filed with the
Secretary of State of the State of Delaware as provided in Sections 103 and 251
or 253 of the GCL. The Merger will become effective at the time that the
Certificate of Merger has been filed with the Secretary of State of the State of
Delaware or at such other time specified in the Certificate of Merger as the
effective time (the "Effective Time").
2
<PAGE> 6
2.1.3. Effect of Merger. The Company will be the surviving corporation in
the Merger (sometimes hereinafter referred to as the "Surviving Corporation")
and will continue to be governed by the laws of the State of Delaware, and the
separate corporate existence of Purchaser shall cease. The Certificate of
Incorporation (the "Certificate of Incorporation") and the By-Laws (the
"By-Laws") of the Company in effect at the Effective Time will be the
Certificate of Incorporation and By-Laws of the Surviving Corporation, until
duly amended in accordance with their terms and the GCL. The directors of
Purchaser immediately prior to the Effective Time will be the initial directors
of the Surviving Corporation, and the officers of the Company at the Effective
Time will be the initial officers of the Surviving Corporation, to serve in
accordance with the By-Laws. Upon the consummation of the Merger, the Surviving
Corporation shall thereupon and thereafter possess all assets and property of
every description, and every interest therein, wherever located, and the rights,
privileges, immunities, powers, franchises and authority, of a public as well as
of a private nature, of each of the Constituent Corporations, and all
obligations belonging to or due each of the Constituent Corporations shall be
vested in the Surviving Corporation without further act or deed. Title to any
real estate or any interest therein vested in any Constituent Corporation shall
not revert or in any way be impaired by reason of the Merger. The Surviving
Corporation shall thenceforth be liable for all the obligations of each
Constituent Corporation, including any liability to holders of Dissenting Shares
(as defined in Section 2.7 hereof). Any claim existing, or action or proceeding
pending, by or against any Constituent Corporation, may be prosecuted to
judgment, with right of appeal, as if the Merger had not taken place, or the
Surviving Corporation may be substituted in place of any Constituent
Corporation. All the rights of creditors of each Constituent Corporation shall
be preserved unimpaired, and all liens upon the property of any Constituent
Corporation shall be preserved unimpaired but only as to the property affected
by such liens immediately prior to the Effective Time. The Merger shall have the
effects set forth in Section 259 of the GCL.
2.1.4. Conversion of Shares. At the Effective Time, (a) each
then-outstanding Share not owned by Parent or Powerfin, S.A., Purchaser or any
other direct or indirect subsidiary of Parent or Powerfin, S.A. (other than
those Shares held in the treasury of the Company or Dissenting Shares) will be
cancelled and retired and be converted into a right to receive in cash an amount
per Share equal to the highest price paid per Share by Purchaser pursuant to the
Offer (the "Merger Price"), (b) each then-outstanding Share owned by Parent or
Powerfin, S.A., Purchaser or any other direct or indirect subsidiary of Parent
or Powerfin, S.A., will be cancelled and retired, and no payment will be made
with respect thereto, (c) each Share issued and held in the Company's treasury
will be cancelled and retired, and no payment will be made with respect thereto,
and (d) each outstanding share of common stock of Purchaser will be converted
into and become a share of common stock of the Surviving Corporation, which
thereafter will constitute all of the issued and outstanding shares of capital
stock of the Surviving Corporation.
2.2. Stockholders' Meeting of the Company. The Company will take all
action necessary in accordance with applicable law and the Certificate of
Incorporation and By-Laws to convene a meeting of its stockholders promptly
after the purchase of Shares pursuant to the Offer to consider and vote upon the
approval of the Merger, if such stockholder approval is required by applicable
law. At any such meeting all of the Shares then owned by Parent, Powerfin, S.A.,
Purchaser or any other direct or indirect subsidiary of Parent or Powerfin, S.A.
will be voted in favor of the Merger. Subject to its Fiduciary Duty, the Board
of Directors of the Company will recommend that the Company's stockholders
approve the Merger if such stockholder approval is required.
2.3. Consummation of the Merger. The closing of the Merger (the
"Closing") will take place (a) at the principal executive offices of the
Company as promptly as practicable after the later of (i) the day of (and
immediately following) the receipt of approval of the Merger by the Company's
stockholders if such approval is required, or as soon as practicable after
completion of the Offer if such approval by stockholders is not required, and
(ii) the day on which the last of the conditions set forth in Article VI hereof
is satisfied or duly waived, or (b) at such other time and place and on such
other date as Purchaser and the Company may agree.
2.4. Payment for Shares. Purchaser will authorize the depositary for the
Offer (or one or more commercial banks organized under the laws of the United
States or any state thereof with capital, surplus and undivided profits of at
least $100,000,000) to act as Paying Agent hereunder with respect to the Merger
(the "Paying Agent"). Each holder (other than holders of Dissenting Shares, and
other than Parent,
3
<PAGE> 7
Powerfin, S.A., Purchaser or any direct or indirect subsidiary of Parent or
Powerfin, S.A.) of a certificate or certificates which prior to the Effective
Time represented Shares will be entitled to receive, upon surrender to the
Paying Agent of such certificate or certificates for cancellation and subject to
any required withholding of taxes, the aggregate amount of cash into which the
Shares previously represented by such certificate or certificates will have been
converted in the Merger. On or before the Effective Time, Purchaser will deposit
with the Paying Agent sufficient funds to make all payments pursuant to the
preceding sentence. Pending payment of such funds to the holders of Shares, such
funds shall be held and invested by the Paying Agent as Parent directs. Any net
profit resulting from, or interest or income produced by, such investments will
be payable to the Surviving Corporation or Parent, as Parent directs. Parent
will promptly replace any monies lost through any investment made pursuant to
this Section 2.4. Following the Effective Time, each certificate which
immediately prior to the Effective Time represented outstanding Shares (other
than Dissenting Shares and Shares owned by Parent, Powerfin, S.A., Purchaser or
any other direct or indirect subsidiary of Parent or Powerfin, S.A.) will be
deemed for all corporate purposes to evidence only the right to receive upon
such surrender the aggregate amount of cash into which the Shares represented
thereby will have been converted, subject to any required withholding of taxes.
No interest will be paid on the cash payable upon the surrender of the
certificate or certificates. Any cash delivered or made available to the Paying
Agent pursuant to this Section 2.4 and not exchanged for certificates
representing Shares within two years after the Effective Time will be returned
by the Paying Agent to the Surviving Corporation which thereafter will act as
Paying Agent, subject to the rights of holders of unsurrendered certificates
representing Shares under this Article II. Thereafter, any former stockholders
of the Company who have not theretofore complied with the instructions for
exchanging their certificates representing Shares will thereafter look only to
the Surviving Corporation for payment of their claim for the consideration set
forth in Section 2.1, without any interest thereon, but will have no greater
rights against the Surviving Corporation (or either Constituent Corporation)
than may be accorded to general creditors thereof under applicable law.
Notwithstanding the foregoing, neither the Paying Agent nor any party hereto
will be liable to a holder of Shares for any cash or interest thereon delivered
to a public official pursuant to applicable abandoned property laws. Promptly
after the Effective Time, the Paying Agent will mail to each record holder of
certificates (other than Parent, Powerfin, S.A., Purchaser or any direct or
indirect subsidiary of Parent or Powerfin, S.A. which immediately prior to the
Effective Time represented Shares (the "Certificates") a form of letter of
transmittal (the "Transmittal Letter") and instructions for use thereof in
surrendering such Certificates which will specify that delivery will be
effected, and risk of loss and title to the Certificates will pass, only upon
proper delivery of the Certificates to the Paying Agent in accordance with the
terms of delivery specified in the Transmittal Letter and instructions for use
thereof in surrendering such Certificates and receiving the Merger Price for
each Share previously represented thereby.
2.5. Closing of the Company's Transfer Books. At the Effective Time, the
stock transfer books of the Company will be closed and no transfer of Shares
will thereafter be made. If, after the Effective Time, Certificates are
presented to the Surviving Corporation, they will be cancelled, retired and
exchanged for cash as provided in Section 2.4 hereof, subject to applicable law
in the case of Dissenting Shares.
2.6. Company Stock Options and Related Matters. With respect to the
outstanding stock options to purchase shares of Common Stock of the Company (the
"Options") pursuant to Company's 1990 Long-Term Incentive Plan, 1984
Non-Qualified Stock Option Plan and 1981 Incentive Stock Option Plan, (a) prior
to the Effective Time, in the case of Options that contain provisions
specifically relating to settlement thereof in cash upon a change of control of
the Company ("change-of-control provisions"), the Company shall use its
commercially reasonable efforts to procure the surrender of all such Options as
have not theretofore been exercised in consideration of the cash payment
prescribed by the change-of-control provisions, and (b) in the case of each
outstanding Option that does not contain change-of-control provisions, after
acceptance of Shares for payment and payment therefor and prior to the Effective
Time, the Company shall use its commercially reasonable efforts to procure the
surrender of all such Options. As to any Option not so surrendered, if requested
by Purchaser, the Company shall use its commercially reasonable efforts to
obtain, prior to the Effective Time, the consent of the holder of the Option to
acquire upon payment of the exercise price an amount of cash equal to the Merger
Price in lieu of each Share formerly covered thereby.
4
<PAGE> 8
2.7. Dissenters' Rights. Notwithstanding anything in this Agreement to
the contrary, any Shares which are issued and outstanding immediately prior to
the Effective Time and which are held by stockholders of the Company who shall
not have voted such Shares in favor of the adoption of the Merger and who shall
have delivered a written demand for the appraisal of such Shares in the manner
provided in Section 262 of the GCL ("Dissenting Shares") shall not be converted
as described in Section 2.1.4 hereof but shall become the right to receive
payment of the appraisal value of such shares in accordance with the provisions
of Section 262 of the GCL; provided, however, that (i) if any holder of
Dissenting Shares shall subsequently withdraw such holder's demand for payment
of the appraisal value of such Shares (within sixty (60) days of the Effective
Time or with the consent of the Surviving Corporation by its directors), (ii) if
any holder fails to comply with such Section 262 (unless the Surviving
Corporation by its directors waives such failure), (iii) if the Purchaser
abandons or is finally enjoined or prevented from carrying out, or the
stockholders rescind their adoption of, the Merger, (iv) if the Surviving
Corporation and any holder of Dissenting Shares will not have come to an
agreement as to the appraisal value of such holder's Dissenting Shares, and
neither such holder of Dissenting Shares nor the Surviving Corporation has filed
or joined in a petition demanding a determination of the appraisal value of all
Dissenting Shares within the period provided in Section 262 of the GCL or (v) if
any holder of Dissenting Shares otherwise loses (through failure to perfect or
otherwise) the right to appraisal of the Dissenting Shares, the right and
obligation of such holder or holders (as the case may be) to receive such
appraisal value and to sell such Shares shall terminate, and such Shares shall
thereupon be deemed to have been extinguished and to have been converted, as of
the Effective Time of the Merger, into the right to receive the Merger Price,
without interest. Persons who have perfected statutory rights with respect to
Dissenting Shares as aforesaid shall not be paid by the Surviving Corporation as
provided in this Agreement and shall have only such rights as are provided by
Section 262 of the GCL with respect to such Shares.
III. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser hereby jointly and severally represent and warrant to
the Company that:
3.1. Corporate Organization. Each of Parent and Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation and has all requisite corporate power and
authority to own, lease and operate its properties and assets and to carry on
its business as it is now being conducted. Parent is the record and beneficial
owner of all of the outstanding capital stock of Purchaser.
3.2. Authority. Each of Parent and Purchaser has the requisite corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
approved by the respective Boards of Directors of Parent and Purchaser and by
Parent as the sole stockholder of Purchaser and no other corporate proceedings
on the part of Parent or Purchaser are necessary to consummate the transactions
so contemplated. This Agreement has been duly executed and delivered by each of
Parent and Purchaser and constitutes a valid and binding obligation of each of
Parent and Purchaser, enforceable against Parent and Purchaser in accordance
with its terms.
3.3. Offer Documents. The documents (the "Offer Documents") pursuant to
which the Offer will be made, including the Schedule 14D-1 filed by Purchaser
pursuant to the Exchange Act (the "Schedule 14D-1"), will comply as to form in
all material respects with the provisions of the Exchange Act and the rules and
regulations thereunder. The information contained in the Offer Documents (other
than information supplied in writing by the Company expressly for inclusion in
the Offer Documents) will not, at the respective times the Schedule 14D-1 or any
amendments or supplements thereto are filed with the Commission, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading.
Purchaser will promptly correct any statements in the Schedule 14D-1 and the
Offer Documents that have become false or misleading and take all steps
necessary to cause such Schedule 14D-1 as so corrected to be filed with the
Commission and such Offer Documents as so corrected to be disseminated to
holders of Shares, in each case as and to the extent required by applicable law.
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3.4. Merger Proxy Statement. None of the information to be supplied by
Parent or Purchaser expressly for inclusion in a proxy or information statement
of the Company required to be mailed to the Company's stockholders in connection
with the Merger (the "Merger Proxy Statement"), or in any amendments or
supplements thereto will, at the time of (a) the first mailing thereof or (b)
the meeting, if any, of stockholders to be held in connection with the Merger,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
3.5. Fees. Except for the fees payable to Goldman, Sachs & Co., neither
Parent nor Purchaser nor any of Parent's other subsidiaries has paid or will
become obligated to pay any fee or commission to any broker, finder or
intermediary in connection with the transactions contemplated hereby.
3.6. Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement by Parent and Purchaser nor the consummation by
Parent and Purchaser of the transactions contemplated hereby will (a) conflict
with, or result in any breach or violation of, any provision of their respective
certificates of incorporation or by-laws (or comparable governing instruments),
or (b) violate, conflict with, constitute a breach or default (or an event
which, with notice or lapse of time or both, would constitute a breach or
default) under, or result in the termination of, or accelerate the performance
required by, or result in the creation of any lien or other encumbrance upon any
of the properties or assets of Parent or any of its subsidiaries under, any of
the terms, conditions or provisions of any order, writ, injunction, decree,
statute, rule or regulation, governmental permit or license, or note, bond,
mortgage, indenture, deed of trust, license, lease agreement or other instrument
or obligation to which Parent or any such subsidiary is a party or to which they
or any of their respective properties or assets are subject, except for such
violations, conflicts, breaches, defaults, terminations, accelerations or
creations of liens or other encumbrances, which, individually or in the
aggregate, will not have a material adverse effect upon the ability of Parent or
Purchaser to perform their respective obligations under this Agreement, or (c)
except as set forth in Schedule 3.6, require any consent, approval,
authorization or permit of or from, or filing with or notification to, any
court, governmental authority or other regulatory or administrative agency or
commission ("Governmental Entity") of the United States or of any state or local
government or any subdivision thereof (the "U.S.") or of Belgium or any local
government or subdivision thereof, except (i) pursuant to the Exchange Act, (ii)
filing certificates of merger pursuant to the GCL and the laws of any other
state, (iii) filings required under the securities or blue sky laws of the
various states, (iv) filings under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act") and the "Exon-Florio Amendment" to the
Omnibus Trade and Competitiveness Act of 1988, as amended ("Exon-Florio"), or
(v) consents, approvals, authorizations, permits, filings or notifications which
if not obtained or made will not, individually or in the aggregate, have a
material adverse effect upon the ability of Parent or Purchaser to perform their
respective obligations under this Agreement.
3.7. Financing. Prior to the expiration of the Offer, Parent or Purchaser
will have all funds necessary for the purchase of the Shares pursuant to the
Offer. Prior to the Effective Time, Parent or Purchaser will have all funds
necessary to consummate the Merger.
3.8. Not a Public Utility. Assuming the accuracy of the representation
made by the Company contained in Section 4.11 hereof, neither Parent nor
Purchaser is and the acquisition of Shares pursuant to the Offer will not cause
the Company to be deemed to be a public utility, electric utility holding
company, affiliate or combination thereof within the meaning of the Public
Utility Holding Company Act of 1935 ("PUHCA"), as amended.
IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to each of Parent and Purchaser
that:
4.1. Corporate Organization. Each of the Company and its subsidiaries is
a corporation or partnership duly organized, validly existing and in good
standing under the laws of its respective country or state of organization and
is in good standing or qualified to conduct business in each jurisdiction where
failure to so qualify or be in good standing is reasonably likely to have a
material adverse effect on the business, properties,
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<PAGE> 10
assets, condition (financial or otherwise), results of operations or prospects
of the Company and its subsidiaries, taken as a whole. Each of the Company and
its subsidiaries has the requisite corporate or other power to own, lease and
operate its properties and assets and to carry on its businesses as they are now
being conducted. The Company has furnished Parent true and correct copies of its
Certificate of Incorporation and By-Laws, as amended to the date hereof. The
Company's Certificate of Incorporation and By-Laws as so delivered are in full
force and effect.
4.2. Capitalization. As of the date hereof, the authorized capital stock
of the Company consists of (i) 50,000,000 Shares and (ii) 2,000,000 shares of
Preferred Stock, no par value ("Preferred Stock"). As of May 9, 1995, (a)
12,809,177 Shares were validly issued and outstanding, fully paid and
nonassessable and not subject to preemptive rights, (b) no shares of Preferred
Stock were issued or outstanding and (c) Options to purchase an aggregate of
1,441,123 Shares at exercise prices reflected in Schedule 4.2 were outstanding.
Since May 9, 1995, the Company has not issued any additional Shares other than
pursuant to the exercise of Options outstanding on May 9, 1995, has not issued
any shares of Preferred Stock, has not granted any additional Options and has
not modified outstanding Options except as expressly contemplated in this
Agreement. Except as set forth in this Section 4.2 or in Schedule 4.2, there are
no shares of capital stock of the Company authorized, issued or outstanding and
there are no outstanding subscriptions, options, warrants, rights, convertible
securities (other than the Rights (as such term is defined in Section 5.2
hereof)) or any other agreements or commitments of any character relating to the
issued or unissued capital stock or other securities or equity interests of the
Company or any of its subsidiaries (other than the Rights) obligating the
Company or any of its subsidiaries to issue, deliver or sell, or cause to be
issued, delivered or sold, shares of capital stock or equity interests of the
Company or any of its subsidiaries or obligating the Company or any of its
subsidiaries to grant, extend or enter into any subscription, option, warrant,
right, convertible security or other similar agreement or commitment. Except as
set forth in Schedule 4.2, there are no voting trusts or other agreements or
understandings to which the Company or any subsidiary of the Company is a party
with respect to the voting of the capital stock of the Company.
4.3. Authority. The Company has the requisite corporate power and
authority to enter into this Agreement and, except for any required approval of
the Company's stockholders with respect to the Merger, to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
approved by the Board of Directors of the Company and no other corporate
proceedings on the part of the Company are necessary to authorize this Agreement
or to consummate the transactions so contemplated, subject, to the extent
required with respect to the consummation of the Merger, to approval, if
necessary, by the stockholders of the Company as provided in Section 2.2 hereof.
This Agreement has been duly executed and delivered by, and constitutes a valid
and binding obligation of, the Company, enforceable against the Company in
accordance with its terms.
4.4. Consent and Approvals; No Violation. Neither the execution and
delivery of this Agreement by the Company nor the consummation by the Company of
the transactions contemplated hereby will (a) conflict with or result in any
breach or violation of any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the termination of, or accelerate the performance required by, or
result in the creation of any lien or other encumbrance upon any of the
properties or assets of the Company or any of its subsidiaries under, any of the
terms, conditions or provisions of (i) their respective certificates of
incorporation or by-laws (or similar governing document) or (ii) any order,
writ, injunction, decree, statute, rule or regulation, governmental permit or
license, or note, bond, mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation to which the Company or any such
subsidiary is a party or to which they or any of their respective properties or
assets are subject, except for such violations, conflicts, breaches, defaults,
terminations, accelerations or creations of liens or other encumbrances, which
are set forth on Schedule 4.4 or which, individually or in the aggregate, will
not have a material adverse effect on the business, properties, assets,
condition (financial or otherwise), results of operations or prospects of the
Company and its subsidiaries, taken as a whole, or (b) require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Entity, except (i) pursuant to the Exchange Act, (ii) filing
certificates of merger pursuant to the GCL and the laws of any other state,
(iii) filings required under the securities or blue sky laws of the various
states, (iv) filings under
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<PAGE> 11
the HSR Act or Exon-Florio, or (v) consents, approvals, authorizations, permits,
filings or notifications which, if not obtained or made will not, individually
or in the aggregate, have a material adverse effect on the business, properties,
assets, condition (financial or otherwise), results of operations or prospects
of the Company and its subsidiaries, taken as a whole.
4.5. Commission Filings. The Company has heretofore filed all reports
with the Commission required to be filed pursuant to the Exchange Act since
January 1, 1993, and has made available to Parent copies of all such reports,
including without limitation each registration statement, Current Report on Form
8-K, proxy or information statement, Annual Report on Form 10-K and Quarterly
Report on Form 10-Q filed during such period (in the case of each such report,
including all exhibits thereto) (the "SEC Documents"). The SEC Documents did not
(as of their respective filing dates) contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. The audited and unaudited
consolidated financial statements, together with the notes thereto, of the
Company included (or incorporated by reference) in the SEC Documents fairly
present the financial position of the Company and its consolidated subsidiaries
as of the dates thereof and the results of their operations and changes in
financial position for the periods then ended in accordance with generally
accepted accounting principles applied on a consistent basis (except as stated
in such financial statements, including the related notes, and except that the
quarterly financial statements do not contain all the footnote disclosures
required by generally accepted accounting principles), subject, in the case of
the unaudited financial statements, to normal year-end audit adjustments and any
other adjustments described therein. The information in the Annual Report of the
Company on Form 10-K for the fiscal year ended June 30, 1994 (the "1994 Form
10-K") and in the reports filed by the Company with the Commission under the
Exchange Act subsequent to the filing with the Commission of the 1994 Form 10-K,
taken as a whole, when read together with the information included in this
Agreement and the schedules and exhibits hereto, does not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. The
Company has provided Purchaser with a copy of each document of which it is aware
which is of the character of document which would otherwise be required to be
filed by the Company with the Commission as an exhibit (other than financial
statements, financial exhibits or financial schedules) to any Annual Report on
Form 10-K, Quarterly Report on Form 10-Q or Current Report on Form 8-K required
to be filed by the Company under the Exchange Act, if filed with respect to a
period ending on the date hereof, which has not been previously filed or
incorporated by reference in the SEC Documents or which is not referred to in
Schedule 5.3.5 hereto.
4.6. Absence of Certain Changes. Except as disclosed in the SEC Documents
or Schedule 4.6 or as disclosed to Parent by the Company in a writing on or
before the date hereof, since June 30, 1994, there has not been (a) any material
adverse change in the business, properties, assets, condition (financial or
otherwise), results of operations or prospects of the Company and its
subsidiaries, taken as a whole, (b) in the case of the Company, any declaration,
setting aside or payment of any dividend or other distribution with respect to
its capital stock, other than the regular cash dividends on Shares or (c) any
material change by the Company in accounting principles or methods. Except as
described in Schedule 5.3.5 and except for normal increases in the ordinary
course of business that are consistent with past practices and that, in the
aggregate, do not result in a material increase in benefits or compensation
expense to the Company or pursuant to existing collective bargaining agreements,
since June 30, 1994, the Company has not adopted or amended any agreements,
trusts, plans, funds or other arrangements of the type described in Section
5.3.5 or increased the compensation or fringe benefits of any director, officer
or employee or paid any benefit not required by any existing plan or arrangement
(including without limitation the granting of stock options or stock
appreciation rights) or taken any action or granted any benefit not expressly
required under the terms of any existing agreements, trusts, plans, funds or
other such arrangements or entered into any contract, agreement, commitment or
arrangement to do any of the foregoing.
4.7. Fees. Except as set forth in Schedule 4.7, neither the Company nor
any of its subsidiaries has paid or become obligated to pay any fee or
commission to any broker, finder or intermediary in connection with the
transactions contemplated hereby.
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4.8. Offer Documents. None of the information supplied by the Company or
its subsidiaries expressly for inclusion in the Offer Documents or in any
amendments thereto or supplements thereto will, at the time supplied or upon the
expiration of the Offer, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
4.9. Schedule 14D-9. Schedule 14D-9 will comply as to form in all
material respects with the applicable requirements of the Exchange Act and the
rules and regulations thereunder and will not at the respective times the
Schedule 14D-9 or any amendments thereto or supplements thereto are filed with
the Commission, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The Company will promptly correct any statements in the
Schedule 14D-9 that have become false or misleading and take all steps necessary
to cause such Schedule 14D-9 as so corrected to be filed with the Commission and
to be disseminated to holders of Shares, in each case as and to the extent
required by applicable law.
4.10. Merger Proxy Statement. The Merger Proxy Statement and all
amendments thereto and supplements thereto will comply as to form in all
material respects with the applicable requirements of the Exchange Act and the
rules and regulations promulgated thereunder and will not, at the time of (a)
first mailing thereof or (b) the meeting, if any, of stockholders to be held in
connection with the Merger, together with any amendments thereto and supplements
thereto, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that no representation is made by the Company with
respect to information supplied in writing by Parent or Purchaser for inclusion
in the Merger Proxy Statement.
4.11. Qualifying Facility. Assuming the accuracy of the representation of
Parent and Purchaser contained in Section 3.8 hereof, (i) each of the electric
generating facilities in which the Company or any of its subsidiaries owns an
equity interest qualifies as a "qualifying facility" ("QF") within the meaning
of the Public Utility Regulatory Policies Act of 1978 and all rules and
regulations adopted thereunder and (ii) each electric generating facility
currently under development by the Company or any of its subsidiaries is
expected to qualify as a QF or as an "Exempt Wholesale Generator" under Section
32 of PUHCA.
V. COVENANTS
5.1. Acquisition Proposals. Except as set forth in Schedule 5.1, each of
the Company and its subsidiaries will not, directly or indirectly, and will
instruct and otherwise use its commercially reasonable efforts to cause their
respective officers, directors, employees, agents or advisors or other
representatives or consultants not to, (i) directly or indirectly, solicit or
initiate any proposals or offers from any person relating to any acquisition or
purchase of all or a material amount of the assets of, or any securities of, or
any merger, consolidation or business combination with, the Company or any of
its subsidiaries or (ii) except to the extent required by the Fiduciary Duty of
the Company's Board of Directors, participate in any negotiations regarding, or
furnish to any other person any information with respect to, or otherwise
cooperate in any way with, or assist or participate in, facilitate or encourage,
any effort or attempt by any other person to do or seek any of the foregoing.
The Company will promptly notify Parent in the event of any proposal or offer of
the type referred to in clause (i) of the first sentence of this Section 5.1,
indicating in reasonable detail the identity of the persons involved and the
terms and conditions of any proposal or offer. The Company will promptly notify
Parent in the event of the occurrence of any matter referred to in clause (ii)
of the first sentence of this Section 5.1 and indicate in reasonable detail the
identity of the persons involved.
5.2. Amendment of Rights Agreement. Not later than immediately prior to
the commencement of the Offer, the Board of Directors of the Company shall take
such action as is necessary to amend the Rights Agreement (the "Rights
Agreement"), dated as of November 29, 1988, between the Company and Morgan
Shareholder Services Trust Company ("MSSTC"), as Rights Agent, as amended by
amendment dated January 27, 1994, to provide that the transaction contemplated
by the Offer and this Agreement will not
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trigger the Rights issued thereunder (the "Rights") and to provide that neither
Parent nor Purchaser shall be deemed to be an "Acquiring Person" under the
Rights Agreement. Except as contemplated by the previous sentence, the Company
will not take any action to, or intended to, alter or amend the Rights Agreement
or redeem the Rights with respect to an acquisition of the Shares, other than
the Offer, unless the Board of Directors of the Company has determined that such
action or redemption is necessary in order for members of the Board to satisfy
their Fiduciary Duties.
5.3. Interim Operations. During the period from the date of this
Agreement to the earlier of the time that the designees of Parent have been
elected or appointed to, and constitute a majority of, the Board of Directors of
the Company pursuant to Section 1.4 hereof or the Effective Time, except as
specifically contemplated by this Agreement, or as set forth in Schedule 5.3 or
as otherwise approved by the Purchaser in writing:
5.3.1. Conduct of Business. The Company will, and will cause each of its
subsidiaries to, conduct their respective businesses only in, and not take any
action except in, the ordinary and usual course of its business except as the
Board of Directors deems to be required in the exercise of its Fiduciary Duty
with notice in writing thereof to Parent. The Company will use its commercially
reasonable efforts to preserve intact the business organization of the Company
and each of its subsidiaries, to keep available the services of its and their
present officers and key employees, and to preserve the goodwill of those having
business relationships with it or its subsidiaries.
5.3.2. Certificate of Incorporation and By-Laws. The Company will not,
and will not permit any of its subsidiaries to, make or propose any change or
amendment to their respective certificates of incorporation or by-laws (or
comparable governing instruments).
5.3.3. Capital Stock. Except as set forth in Schedule 4.2, the Company
will not, and will not permit any of its subsidiaries to, issue or sell any
shares of capital stock or any other securities or equity interests of any of
them or issue any securities convertible into or exchangeable for, or options,
warrants to purchase, scrip, rights to subscribe for, calls or commitments of
any character whatsoever relating to (other than pursuant to and to the extent
required by the Rights Agreement), or enter into any contract, understanding or
arrangement with respect to the issuance of, any shares of capital stock or any
other securities or equity interests of any of them or enter into any
arrangement or contract with respect to the purchase or voting of shares of
their capital stock or equity interests, or adjust, split, combine or reclassify
any of their capital stock or other securities or equity interests, or make any
other changes in their capital structures.
5.3.4. Dividends. Except as contemplated by Section 5.2 hereof, the
Company will not declare, set aside, pay or make any dividend or other
distribution or payment (whether in cash, stock or property) with respect to, or
purchase or redeem, any shares of capital stock or equity interests other than
regular quarterly cash dividends of $0.03 per Share consistent with the
Company's past established schedule of declaration, payment and record dates.
5.3.5. Employee Plans, Compensation, Etc. Except (i) as contemplated by
this Agreement, including in Section 2.6 and this Section 5.3.5, (ii) as set
forth in Schedule 5.3.5 and (iii) for normal increases in the ordinary course of
business that are consistent with past practices and that, in the aggregate, do
not result in a material increase in benefits or compensation expense to the
Company or pursuant to collective bargaining agreements as presently in effect,
the Company will not, and will not permit any of its subsidiaries to, adopt or
amend any bonus, profit-sharing, compensation, severance, termination, stock
option, pension, retirement, deferred compensation, employment or other employee
benefit agreements, trusts, plans, funds or other arrangements for the benefit
or welfare of any director, officer or employee, or increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay any
benefit not required by any existing plan or arrangement (including without
limitation the granting of stock options or stock appreciation rights) or take
any action or grant any benefit not expressly required under the terms of any
existing agreements, trusts, plans, funds or other such arrangements or enter
into any contract, agreement, commitment or arrangement to do any of the
foregoing.
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5.3.6. Debt. Except as set forth on Schedule 5.3.6, the Company and its
subsidiaries will not, except in the ordinary course of its business, (a) incur
or assume any indebtedness, or (b) make any loans, advances or capital
contributions to, or investments (other than intercompany accounts and
short-term investments pursuant to customary cash management systems of the
Company in the ordinary course and consistent with past practices) in, any other
person other than such of the foregoing as are made by the Company to or in
wholly owned subsidiaries of the Company in an amount not to exceed $2,000,000
in the aggregate.
5.4. Access and Information. The Company will (and will cause each of its
subsidiaries to) afford to Parent and its representatives (including without
limitation directors, officers and employees of Parent and its affiliates, and
counsel, accountants and other professionals retained by Parent) such access
during normal business hours throughout the period prior to the Effective Time
to the Company's books, records (including without limitation tax returns and
work papers of the Company's independent auditors), properties, personnel and to
such other information as Parent reasonably requests, provided, however, that no
investigation pursuant to this Section 5.4 will affect or be deemed to modify
any of the representations or warranties made by the Company in this Agreement.
The rights and obligations of each of Parent and the Company pursuant to the
Confidentiality Agreement, dated January 20, 1995 between Parent and the
Company, will survive the execution and delivery of this Agreement, and all
information obtained by Parent or any of its representatives (including without
limitation directors, officers and employees of Parent and its affiliates and
counsel, accountants and other professionals retained by Parent) pursuant hereto
(including, without limitation, pursuant to Section 1.3 hereof) shall be deemed
"Information" as that term is defined in such Confidentiality Agreement, and
shall be subject to the provisions of that Confidentiality Agreement, except to
the extent that Parent is advised by counsel that disclosure of any such
information, including the existence of the Confidentiality Agreement, is
required by law in connection with the offer or the Merger; provided, however,
that: (i) Section 7 of the Confidentiality Agreement will not apply to prevent
the Offer and the Merger pursuant to this Agreement or to prevent Purchaser from
continuing its offer to purchase Shares during the 120-day period commencing on
the date of the commencement of the Offer if this Agreement is terminated
pursuant to Section 7.1(f) hereof; (ii) Section 9 of the Confidentiality
Agreement will no longer apply; and (iii) to the extent that any attempt is made
to enforce the Confidentiality Agreement in the context of the Offer and Merger,
such suit will be brought in a forum referred to in Section 7.12.
5.5. Certain Filings, Consents and Arrangements. Parent, Purchaser and
the Company will (a) promptly make their respective filings, and will thereafter
use their commercially reasonable efforts promptly to make any required
submissions, under the HSR Act and Exon-Florio with respect to the Offer, the
Merger and the other transactions contemplated by this Agreement and (b)
cooperate with one another (i) in promptly determining whether any filings are
required to be made or consents, approvals, permits or authorizations are
required to be obtained under any other U.S. or foreign law or regulation and
(ii) in promptly making any such filings, furnishing information required in
connection therewith and seeking timely to obtain any such consents, approvals,
permits or authorizations.
5.6. Merger Proxy Statement. As soon as practicable after the termination
or expiration of the Offer, the Company will, if required by applicable law in
order to consummate the Merger, prepare the Merger Proxy Statement, file it with
the Commission, respond to comments from the Commission, as appropriate, and
mail it to all holders of Shares. Parent, Purchaser and the Company will
cooperate with each other in the preparation of the Merger Proxy Statement;
without limiting the generality of the foregoing, Parent and Purchaser will
furnish to the Company the information relating to Parent and Purchaser required
by the Exchange Act to be set forth in the Merger Proxy Statement.
5.7. Additional Agreements. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use commercially reasonable
efforts to cause fulfillment of all conditions under this Agreement and to use
commercially reasonable efforts to take promptly, or cause to be taken, all
actions and to do promptly, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement, including using commercially
reasonable efforts to obtain all necessary actions or non-actions, extensions,
waivers, consents and approvals from all applicable Governmental Entities,
effecting all necessary registrations and filings (including without limitation
filings under the HSR Act and Exon-Florio) and obtaining any required
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contractual consents, subject, however, to any required votes of the
stockholders of the Company. If, at any time after the Effective Time, the
Surviving Corporation reasonably considers or is advised that any deeds, bills
of sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of either of the Constituent Corporations acquired or to be
acquired by the Surviving Corporation as a result of, or in connection with the
Merger or otherwise to carry out the purposes of this Agreement, the officers
and directors of the Surviving Corporation will be authorized to execute and
deliver, in the name and on behalf of each of the Constituent Corporations or
otherwise, all such deeds, bills of sale, assignments and assurances and to take
and do, in the name and on behalf of each of the Constituent Corporations or
otherwise, all such other actions and things as may be necessary or desirable to
vest, perfect or confirm any and all right, title and interest in, to and under
such rights, properties or assets in the Surviving Corporation or otherwise to
carry out the purposes of this Agreement.
5.8. Compliance with Antitrust Laws. Each of Parent and the Company will
use commercially reasonable efforts to resolve such objections, if any, which
may be asserted with respect to the Offer or the Merger under the antitrust
laws. In the event a suit is instituted challenging the Offer or the Merger as
violative of the antitrust laws, each of Parent and the Company will use
commercially reasonable efforts to resist or resolve such suit. Parent and the
Company will use commercially reasonable efforts to take such action as may be
required: (a) by the Antitrust Division of the Department of Justice or the
Federal Trade Commission in order to resolve such objections as either of them
may have to the Offer or the Merger under the antitrust laws, or (b) by any
federal or state court of the United States, in any suit brought by a private
party or Governmental Entity challenging the Offer or the Merger as violative of
the antitrust laws, in order to avoid the entry of, or to effect the dissolution
of, any injunction, temporary restraining order or other order which has the
effect of preventing the consummation of the Offer or the Merger.
Notwithstanding the foregoing, however, none of Parent, Purchaser or the Company
will be required prior to the Effective Time to commit to a material divestiture
transaction or to commit to hold separate any of the material businesses,
product lines or assets of Parent or its affiliates or the Company.
5.9. Publicity. The Company and Parent will consult with each other in
issuing any press releases or otherwise making public statements with respect to
the transactions contemplated hereby and in making any filings with any
Governmental Entity or with any national securities exchange with respect
thereto.
5.10. Directors' and Officers' Insurance: Indemnification. From and after
the earlier of the Effective Time or the time the Parent's designees have been
elected or appointed to, and constitute a majority of, the Board of Directors of
the Company pursuant to Section 1.4 hereof (the "D&O Initial Date"), (a) Parent
will cause the Surviving Corporation to maintain the current directors' and
officers' insurance and indemnification policies or one or more equivalent
policies, subject to terms and provisions no less advantageous, for all present
and former directors and officers of the Company, covering the claims made
within three (3) years after the D&O Initial Date, if such policies are
available on a commercially reasonable basis, and (b) after the Effective Time
Parent will cause the Surviving Corporation to maintain the right to
indemnification, and to advancement of expenses, of officers and directors as
provided for in the Certificate of Incorporation and By-Laws of the Company,
with respect to indemnification for acts and omissions occurring prior to the
Effective Time, including without limitation in connection with the transactions
contemplated by the Agreement. Without limitation of the foregoing, in the event
that any such officer or director becomes involved in any capacity in any
action, proceeding or investigation in connection with any matter, including,
without limitation, the transactions contemplated by this Agreement, occurring
prior to, and including, the Effective Time, Parent will cause the Surviving
Corporation to pay as incurred such officer's or director's legal and other
expenses (including the costs of any investigation and preparation) incurred in
connection therewith in accordance with the procedures authorized in the By-Laws
of the Company and the GCL. Parent shall cause the Surviving Corporation to pay
all expenses, including reasonable attorneys' fees, that may be incurred by any
officer or director in enforcing the indemnity and other obligations provided
for in this Section 5.10.
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5.11. Employee Benefits.
5.11.1. Employment Agreements. After the Effective Time, Parent will
cause the Surviving Corporation to honor, in accordance with their respective
terms in effect on this date, the employment agreements to which the Company is
a party and which are described in Schedule 5.11.1 hereof.
5.11.2. Employee Benefits. Parent agrees that it shall cause the
Surviving Corporation to provide to the employees of the Surviving Corporation
Employee Benefits (as defined below) which in the aggregate are at least as
favorable as those provided by Parent from time to time to its employees who are
similarly situated; provided that such Employee Benefits shall be, in the
aggregate, at least as favorable as those currently provided by the Company to
its employees. "Employee Benefits" shall mean all pension, profit sharing,
Section 401(k), excess benefit, deferred compensation, incentive compensation,
cash bonus, severance pay, cafeteria, flexible compensation, life insurance,
medical, dental, disability, welfare or vacation plans or arrangements of any
kind and any other employee, pension benefit plan or employee welfare benefit
plan (as such terms are defined in Sections 3(2) and 3(1), respectively, of
ERISA) in which employees of the Company or any of its subsidiaries participate;
provided that "Employee Benefits" shall not include any defined benefit pension
plans or any stock-based plans, agreements, or arrangements or stock-based
provisions in plans, agreements, or arrangements or any change of control
provisions in any plans, agreements, or arrangements other than change of
control provisions that solely apply to the Merger. Parent shall cause the
Surviving Corporation to (i) credit the employees of the Surviving Corporation
with all of their years of service with the Company and its subsidiaries for
purposes of all Employee Benefits, (ii) maintain the Senior Management Deferred
Compensation Plan (the "SMDCP"), the Supplemental Executive Retirement Plan (the
"SERP"), and the Senior Executive Officer Early Retirement Plan (the "SEOERP")
on at least as favorable terms as are in effect on the date hereof (other than
change of control provisions that do not apply to the Merger), and fulfill the
obligations of the Company thereunder. In addition, Parent will cause the
Surviving Corporation to fulfill the obligations of the Company pursuant to the
Company's Discretionary Bonus Plan described on Schedule 5.11.2 with respect to
the current fiscal year. Parent confirms that the acceptance for payment, and
purchase of, the Shares pursuant to the Offer shall constitute a "Change in
Control" for purposes of the SERP, but that none of the transactions
contemplated by this Agreement shall constitute a "Change in Control" for
purposes of the SMDCP.
5.11.3 No Guaranty. Parent's obligations under Sections 5.10 and 5.11 do
not constitute a guaranty of the obligations of the Surviving Corporation.
VI. CONDITIONS
6.1. Conditions. The obligations of Parent, Purchaser and the Company to
consummate the Merger are subject to the satisfaction, at or before the
Effective Time, of each of the following conditions, as applicable thereto:
6.1.1. Purchase of Shares. Purchaser will have accepted for payment and
purchased Shares pursuant to the Offer in accordance with the terms thereof;
provided that this condition shall be deemed to have been satisfied with respect
to Parent and Purchaser if Purchaser fails to pay for Shares pursuant to the
Offer in violation of the terms of the Offer.
6.1.2. Shareholder Approval. The stockholders of the Company will have
duly approved the Merger and adopted this Agreement, if required by applicable
law.
6.1.3. Injunctions; Illegality. The consummation of the Merger will not
be precluded by any order, injunction, decree or ruling of a court of competent
jurisdiction or any Governmental Entity (each party agreeing to use its best
efforts to rectify any such occurrence), and there will not have been any action
taken or any statute, rule or regulation enacted, promulgated or deemed
applicable to the Merger by any Governmental Entity which would prevent the
consummation of the Merger.
6.1.4. HSR Act and Exon-Florio. Any applicable waiting period under the
HSR Act and Exon-Florio will have expired or been terminated.
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<PAGE> 17
6.2. Conditions to Parent and Purchaser Obligations. The obligations of
Parent and Purchaser to consummate the Merger will be subject to the
satisfaction at or prior to the Effective Time of the additional conditions that
(a) except for Options to acquire 100,000 Shares all Options shall have been
exercised or surrendered for the cash consideration contemplated by Section 2.6
hereof or, as to any Option not so surrendered or exercised in excess of Options
to acquire 100,000 Shares, the holder shall have consented to acquire upon
payment of the exercise price an amount of cash equal to the Merger Price in
lieu of each Share covered thereby and (b) the Company will have satisfied and
complied with in all material respects each of the covenants of the Company
contained herein from the time the Purchaser accepts Shares for payment pursuant
to the Offer up to and including the earlier of the time that the designees of
Parent have been elected or appointed to, and constitute a majority of, the
Board of Directors of the Company pursuant to Section 1.4 hereof or the
Effective Time.
VII. MISCELLANEOUS
7.1. Termination. This Agreement may be terminated and the Merger
contemplated hereby may be abandoned (a) by the mutual consent of the Boards of
Directors of Parent, Purchaser and the Company; (b) by Parent and Purchaser, on
the one hand, or the Company, on the other hand, if the Offer expires or is
terminated or withdrawn in accordance with its terms without any Shares being
purchased thereunder or if Purchaser has not purchased Shares validly tendered
and not withdrawn pursuant to the Offer within 120 days after commencement of
the offer, provided, however, that the party seeking to terminate this Agreement
pursuant to this Section 7.1(b) is not in breach of this Agreement in any
material respect; (c) by the Company, if Parent or Purchaser materially breaches
any of the representations and warranties or covenants contained in this
Agreement; (d) by either Parent and Purchaser or the Company, if the Merger is
not consummated prior to December 31, 1995; provided, however, that the right to
terminate this Agreement under this Section 7.1(d) will not be available to any
party whose failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of the Effective Time to occur on or
before such date; (e) by either Parent and Purchaser, on the one hand, or the
Company, on the other hand, if either one (or any permitted assignee hereunder)
is precluded by an order or injunction (other than an order or injunction issued
on a preliminary basis) of a court of competent jurisdiction from consummating
the Merger and all means of appeal and all appeals from such order or injunction
have been finally exhausted; and (f) by either Parent and Purchaser, on the one
hand, or the Company, on the other hand, if prior to the purchase of any Shares
pursuant to the Offer, the Board of Directors of the Company withdraws or
modifies in a manner adverse to Parent or Purchaser its approval or
recommendation of the Offer because of the Fiduciary Duty of the Board of
Directors. In the event of any termination and abandonment pursuant to this
Section 7.1, no party hereto (or any of its directors or officers) shall have
any liability or further obligation to any other party to this Agreement, except
for obligations under the last sentence of Sections 1.3 and 5.4 and all of
Sections 5.10 and 7.10 hereof and except that nothing herein will relieve any
party from liability for any breach of this Agreement. Any action by the Company
to terminate this Agreement pursuant to this Section 7.1 will require only the
approval of a majority of the directors of the Company then in office who are
directors of the Company on the date hereof, or persons nominated or elected to
succeed such directors by a majority of such directors (the "Continuing
Directors").
7.2. Non-Survival of Representations, Warranties and Agreements. The
representations and warranties or agreements in this Agreement will terminate at
the Effective Time or the earlier termination of this Agreement pursuant to
Section 7.1, as the case may be, provided, however, that if the Merger is
consummated, Sections 2.4, 5.7, 5.10 and 5.11 hereof will survive the Effective
Time to the extent contemplated by such Sections, and provided further, however,
that the last sentence of Sections 1.3 and 5.4 hereof and all of Sections 5.10
and 7.10 hereof will in all events survive any termination of this Agreement.
7.3. Waiver and Amendment. Subject to applicable provisions of the GCL,
any provision of this Agreement may be waived at any time by the party which is,
or whose stockholders are, entitled to the benefits thereof, and this Agreement
may be amended or supplemented at any time, provided that no amendment will be
made after any stockholder approval of the Merger which reduces the Merger Price
without further stockholder approval, provided further that any action by the
Company to waive, amend or supplement any
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<PAGE> 18
provision of this Agreement or provide any consent authorized hereunder or
enforce any of the Company's rights hereunder, will require the approval only of
a majority of the Continuing Directors of the Company. No such waiver,
amendment, supplement or consent will be effective unless in a writing which
makes express reference to this Section 7.3 and is signed by the party or
parties sought to be bound thereby.
7.4. Entire Agreement. This Agreement contains the entire agreement among
Parent, Purchaser and the Company with respect to the Offer, the Merger and the
other transactions contemplated hereby and thereby, and, except as contemplated
by Section 5.4 hereof, this Agreement supersedes all prior agreements among the
parties with respect to such matters.
7.5. APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN THAT STATE.
7.6. Interpretation. For purposes of this Agreement, a "subsidiary" of a
corporation means any corporation, partnership, limited liability company, trust
or other entity 50% or more of the outstanding voting securities or equity
interests of which are directly or indirectly owned by such other corporation.
The descriptive headings contained herein are for convenience and reference only
and will not affect in any way the meaning or interpretation of this Agreement.
7.7. Notices. All notices and other communications hereunder will be in
writing and will be given (and will be deemed to have been duly given upon
receipt) by delivery in person, by cable, telecopy, telex or other standard form
of telecommunications, or by registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:
If to the Company to:
CRSS Inc.
1177 West Loop South
Suite 800
Houston, Texas 77027
Attention: Chairman and Chief Executive Officer
Telecopy No.: (713) 552-2364
With copies to:
Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P.
3400 Texas Commerce Tower
Houston, Texas 77002
Attention: Gene G. Lewis
Telecopy No.: (713) 223-3717
If to Parent or Purchaser to:
American Tractebel Corporation
12 East 49th Street
New York, New York 10017
Attention: President
Telecopy No.: (212) 319-1626
With a copy to:
Squire, Sanders & Dempsey
520 Madison Avenue
32nd Floor
New York, New York 10022
Attention: Alan N. Waxman
Telecopy No.: (212) 872-9814
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<PAGE> 19
or to such other address as any party may have furnished to the other parties in
writing in accordance herewith.
7.8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original but all of which
together will constitute but one agreement.
7.9. Parties in Interest; Assignment. This Agreement is not intended to
nor will it confer upon any other person (other than the parties hereto) any
rights or remedies. Except as otherwise expressly provided herein, this
Agreement is binding upon and is solely for the benefit of the parties hereto
and their respective successors, legal representatives and assigns, except that
Sections 5.10 and 5.11 are intended to be for the benefit of the parties
referred to therein, and may be enforced on behalf of the persons identified
therein. Purchaser will have the right (a) to assign to Powerfin, S.A., Parent
or any direct or indirect wholly owned subsidiary of Parent or Powerfin, S.A.
any and all rights and obligations of Purchaser under this Agreement, including
without limitation the right to substitute in its place Powerfin, S.A., Parent
or such a subsidiary as one of the Constituent Corporations in the Merger (such
subsidiary assuming all of the obligations of Purchaser in connection with the
Merger), provided that any such assignment will not relieve Parent or Purchaser
from any of its obligations hereunder, and (b) to transfer to Powerfin, S.A. or
Parent or to any direct or indirect wholly owned subsidiary of Parent or
Powerfin, S.A. the right to purchase Shares tendered pursuant to the Offer,
provided that any such transfer will not relieve Purchaser from any of its
obligations hereunder.
7.10. Expenses. (a) Except as set forth in Section 7.10(b) and (c), all
costs and expenses incurred in connection with the Offer, this Agreement and the
transactions contemplated hereby will be paid by the party incurring such costs
and expenses. No termination of this Agreement shall relieve any party for any
other obligation that it may have for breach hereof.
(b) If:
(i) Parent, Purchaser or the Company terminates this Agreement pursuant to
Section 7.1(f), and within 12 months thereafter, the Company enters into an
agreement with respect to a Third Party Acquisition (as defined below) or a
Third Party Acquisition occurs, involving any party (or any affiliate thereof)
(x) with whom the Company had any discussions with respect to a Third Party
Acquisition, (y) to whom the Company furnished information with respect to or
with a view to a Third Party Acquisition or (z) who had submitted a proposal or
expressed any interest publicly or to the Company in a Third Party Acquisition,
in the case of each of clauses (x), (y) and (z), prior to such termination; or
(ii) Parent, Purchaser or the Company terminates this Agreement pursuant
to Section 7.1(f), and within 12 months thereafter a Third Party Acquisition
shall occur involving a direct or indirect consideration (or implicit valuation)
for Shares in excess of the Price Per Share;
then the Company shall pay to Parent and Purchaser a fee of $5,500,000;
provided, however, that the Company in no event shall be obligated to pay more
than one such fee with respect to all such agreements and occurrences and such
termination, and provided further that the fee required to be paid under this
Section 7.10(b) shall be reduced dollar-for-dollar by any fee paid by the
Company to Parent under Section 7.10(c).
"Third Party Acquisition" means the occurrence of any of the following
events: (i) the acquisition of all of the Company by merger or otherwise by any
person other than Parent, Purchaser or any affiliate thereof (a "Third Party");
or (ii) the acquisition by a Third Party of 50% or more of the total assets of
the Company and its subsidiaries, taken as a whole; or (iii) the acquisition by
a Third Party of 50% or more of the outstanding Shares.
(c) In recognition of the significant expenditure of management time and
resources and substantial out-of-pocket expenses incurred by Parent and
Purchaser in connection with the negotiation of this Agreement and investigation
of the transactions contemplated hereby, and in light of the difficulty in
calculating the value of such management time, resources and other expenses,
upon the termination of this Agreement (i) by Parent or Purchaser pursuant to
Condition (a) set forth in Exhibit A (other than solely by reason of a material
16
<PAGE> 20
adverse change beyond the reasonable control of the Company), or (ii) under
circumstances in which the Company shall be obligated to pay a fee pursuant to
Section 7.10(b), the Company shall pay to Parent $1,000,000.
(d) Any payment required to be made pursuant to Section 7.10(b) or (c)
shall be made as promptly as practicable but not later than five business days
after termination of this Agreement and shall be made by wire transfer of
immediately available funds to an account designated by Parent.
7.11. Obligation of Parent. Whenever this Agreement requires Purchaser to
take any action, such requirement will be deemed to include an undertaking on
the part of Parent to cause Purchaser to take such action.
7.12. Enforcement of the Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties hereto will be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in the United States
District Court for the State of Delaware or any Delaware state court having
jurisdiction, this being in addition to any other remedy to which they are
entitled at law or in equity (except that no remedy shall be sought in any court
other than the United States District Court for the State of Delaware or any
Delaware state court).
7.13. Severability. If any term, provision or portion of any provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other terms, provisions or remaining portions of
provisions of this Agreement will nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner adverse to any party hereto. Upon any such
determination that any term, provision or portion of any provision is invalid,
illegal or incapable of being enforced, the parties hereto will negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated by this Agreement are consummated to the extent
possible.
7.14. Fiduciary Duty. Whenever used in this Agreement, "Fiduciary Duty"
or "Fiduciary Duties" shall mean action taken or not taken because the Board of
Directors of the Company, based upon advice of such independent legal counsel
with experience in such matters, has determined that such action or inaction is
necessary in order for the members of the Board of Directors to satisfy their
duties under applicable law. Purchaser and Parent agree that each of the firms
of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P. and Richards Layton & Finger are
independent legal counsel, with experience in such matters for the purposes
hereof; provided, however, that this does not prohibit the Company from relying
on other independent legal counsel with experience in such matters for the
purposes hereof. In the case of the last sentence of Section 5.2, a written
opinion of the Company's independent counsel selected by the Company's Board of
Directors shall be rendered and a copy of such opinion shall be delivered to
Parent and Purchaser as soon as reasonably practicable following the
determination by the Board referred to in such last sentence.
------------------------------
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<PAGE> 21
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement.
CRSS INC.
By /s/ Bruce W. Wilkinson
-----------------------------------
Title: Chairman and Chief Executive
Officer
AMERICAN TRACTEBEL CORPORATION
By /s/ Philippe van Marcke
-----------------------------------
Title: President
ATC ACQUISITION CORP.
By /s/ Philippe van Marcke
-----------------------------------
Title: President
18
<PAGE> 22
EXHIBIT A
CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment, purchase or pay for any Shares tendered, and
(subject to the terms of the Merger Agreement) may terminate or amend the Offer
or may postpone the acceptance for payment or payment for the Shares tendered,
if at any time on or after May 16, 1995 and before acceptance for payment of 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 shall occur and
shall, in the sole judgment of Parent, in any such case regardless of the
circumstances giving rise to any such condition, make it inadvisable to proceed
with the Offer or such acceptance for payment or purchase of or payment for any
of the Shares:
(a) any representation or warranty of the Company in the Merger
Agreement shall have been untrue as of the date of the Merger Agreement or
shall have become untrue prior to acceptance for payment or payment for
Shares which untrue representations or warranties, in the aggregate, if
accurately stated would have revealed matters materially adverse to the
business, properties, assets, condition (financial or otherwise), results
of operations or prospects of the Company and its subsidiaries, taken as a
whole, or the Company shall have breached any of its covenants or
agreements contained in the Merger Agreement, which breach or breaches, in
the aggregate, would have a material adverse effect on the business,
properties, assets, condition (financial or otherwise), results of
operations or prospects of the Company and its subsidiaries, taken as a
whole, or would have a material adverse effect upon the transactions
contemplated by the Merger Agreement; provided this condition does not
provide a basis for terminating the Offer unless and until Parent provides
written notice to Company of the asserted breach of representation,
warranty or covenant, and Company fails to cure such breach within five (5)
business days after receiving such notice;
(b) the number of Shares validly tendered and not withdrawn prior to
the Expiration Date, which when added to the Shares beneficially owned by
Parent, Purchaser and their affiliates represent less than a majority of
the Shares outstanding on a fully diluted basis, or less than such lower
number of Shares outstanding as the Purchaser or Parent shall have set as a
revised minimum condition for tendered Shares as permitted under the Merger
Agreement;
(c) any United States or Belgian statute, rule or regulation shall be
enacted, promulgated, entered or enforced that is applicable to the Offer
or the Merger, that would have the effect of making the Offer or the Merger
or the consummation thereof illegal or preclude Parent or Purchaser from
exercising full rights of ownership with respect to the Shares or require
that any material portion of the assets or business of Parent or its
affiliates or the Company or its subsidiaries be divested or held separate;
(d) there shall have occurred and be continuing (i) any general
suspension of trading in, or limitation of prices for, securities on the
New York Stock Exchange, (ii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States or Belgium
or any general limitation on or condition applicable to lending
institutions which has had or is reasonably expected to have a material
adverse effect on the extension of credit by such lending institutions,
(iii) the commencement of a war, armed hostilities or other international
or national calamity directly or indirectly involving the United States or
Belgium that commenced after the date hereof, or (iv) in the case of the
foregoing existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof;
(e) there shall be in effect any preliminary or final injunction or
other order issued by any United States or Belgian court or United States
or Belgian governmental, administrative or regulatory agency or authority
of competent jurisdiction (i) making the acceptance for payment of or
payment for a material amount of or all of the Shares illegal or (ii)
enjoining or prohibiting the Merger, the Offer or the acquisition by Parent
or Purchaser of the Shares or preventing Parent or Purchaser from
exercising full
A-1
<PAGE> 23
rights of ownership with respect to a material amount of the Shares or
requiring that a material amount of the assets or business of Parent or the
Company be divested or held separate;
(f) the Company shall have authorized, recommended, proposed or
publicly announced its intent to enter into any merger, consolidation,
liquidation, dissolution, business combination, acquisition or disposition
of a material amount of assets or securities or taken any action to
implement any such transaction previously authorized, recommended, proposed
or publicly announced, other than, in each case, the Offer and the Merger
or modified its recommendation of the Offer adversely to Purchaser;
(g) the Merger Agreement shall have been terminated in accordance with
its terms; or
(h) any waiting period under the HSR Act or Exon-Florio applicable to
the purchase of Shares pursuant to the Offer shall not have expired or been
terminated.
The foregoing conditions are for the sole benefit of Purchaser and Parent
and may be waived by Purchaser or Parent in whole or in part at any time and
from time to time in its sole discretion, except that waiver of the Minimum
Share Condition (as defined in the Merger Agreement), requires the approval of
the Company.
A-2
