SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
Trident Rowan Group, Inc.
(Formerly known as Detomaso Industries, Inc.)
(Name of Issuer)
Trident Rowan Group, Inc.
(Name of person(s) filing statement)
Common Stock, $.01 par value
(Title of class of Securities)
[89 614K 106]
(Cusip number of class of securities)
Morrison Cohen Singer & Weinstein, LLP
750 Lexington Avenue
New York, NY 10022
Attn: David Lerner, Esq.
(212) 735-8600
(Name,address and telephone number of person authorized to
receive notices and communications on behalf of the
person(s) filing statement)
September 25, 1996
(Date tender offer first published, sent or given to security holders)
Calculation of filing fee
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Transaction Valuation(1) Amount of filing fee
$13,394,767 $2679
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/ / Check box if any part of the fee is offset as provided by Rule
0-11(A)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
Amount previously paid:__________________ Filing party:__________________
Form or registration no.:________________ Date filed:____________________
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(1) Calculated solely for the purpose of determining the filing fee, based upon
the purchase of 1,260,684 shares at $10.625 per share, which per share
valuation is based upon the average of the bid ($10.50) and asked ($10.75)
prices of the shares on September 11, 1996.
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ITEM 1. SECURITY AND ISSUER
(a) The issuer of the securities to which this Schedule 13E-4 relates is
Trident Rowan Group, Inc., a Maryland corporation (the "Company"), and the
address of its principal executive office is P.O. Box 856, 107 Monmouth Street,
Red Bank, New Jersey 07701.
(b) This Schedule 13E-4 relates to the offer by the Company to purchase
1,260,684 shares (the "Shares") (or such lesser number of shares as are properly
tendered) of its common stock, par value $.01 per share (the "Common Stock"),
4,742,865 shares of which Common Stock were outstanding as of September 10,
1996, at a price of $12.26 per share (the "Repurchase Price"). Depending on the
number of Shares tendered, the Company will pay up to all of the Repurchase
Price, but in any event not less than $8.58 per share, in cash, and will pay the
balance of the Repurchase Price, if any, by delivery of the Company's 8%
promissory notes, payable as to principal on the second anniversary of their
issuance and will bear interest, payable annually, at 8% per annum, subject to
reduction to a rate of 5% per annum if prepaid in full within 9 months of
issuance. The Company's purchase of the Shares will be upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated September
25, 1996 (the "Offer to Purchase"), and in the related Letter of Transmittal and
Notice of Election, which together constitute the "Offer," copies of which are
attached as Exhibit (a)(i) and (a)(2), respectively, and incorporated herein by
reference. Executive officers and directors of the Company may participate in
the Offer on the same basis as the Company's other shareholders, although the
Company has been advised that no director or executive officer of the Company
intends to tender any Shares pursuant to the Offer. The information set forth in
"Introduction" and "The Offer - Section 1, Number of Shares; Proration;
Restriction on Transfer of the Notes" of the Offer to Purchase is incorporated
herein by reference.
(c) The information set forth in "Introduction" and "The Offer - Section 6,
Price Range of Shares; Dividends" of the Offer to Purchase is incorporated
herein by reference.
(d) Not applicable.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
(a) The information set forth in "The Offer - Section 8, Source and Amount
of Funds" of the Offer to Purchase is incorporated herein by reference.
(b) Not applicable.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
(a)-(g) The information set forth in "The Offer - Section 8, Source and
Amount of Funds," "The Offer - Section 7, Reasons for, and Effects of, the
Offer," "The Offer - Section 10, Interest of Directors and Officers;
Transactions and Arrangements Concerning Shares" and "The Offer - Section 11,
Effects of the Offer on the Market for Shares; Registration under the Exchange
Act" of the Offer to Purchase is incorporated herein by reference.
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(h) Not applicable.
(i) Not applicable.
(j) Not applicable.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
On August 14, 1996 the Company entered into an agreement and plan of merger
(the "Merger Agreement") with The Carey Winston Company ("Carey Winston") and
DTI Acquisition Corp., a wholly owned subsidiary of the Company. Subject to the
occurrence or failure to occur of certain conditions, pursuant to the Merger
Agreement, DTI Acquisition Corp. will merge (the "Merger") with and into Carey
Winston, as a result of which Carey Winston will become a wholly owned
subsidiary of the Company and the shareholders of Carey Winston will acquire
approximately 800,000 shares of Common Stock, subject to adjustment.
The Closing of the Merger will take place on the 35th day following the
closing of the Company's proposed registered public offering of common stock
(see, "Introduction -- Planned Stock Offering" of the Offer to Purchase). The
Merger Agreement will terminate if the proposed public offering has not closed
by March 31, 1997.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE ISSUER'S SECURITIES.
The information set forth in "Introduction" and "The Offer - Section 8,
Source and Amount of Funds," "The Offer - Section 7, Reasons for, and Effects
of, the Offer," and "The Offer - Section 10, Interest of Directors and Officers;
Transactions and Arrangements Concerning Shares" of the Offer to Purchase is
incorporated herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED, OR TO BE COMPENSATED.
Not Applicable.
ITEM 7. FINANCIAL INFORMATION.
(a)-(b) The information set forth in "The Offer - Section 9, Certain
Information Concerning the Company" of the Offer to Purchase is incorporated
herein by reference, the information set forth on pages 32 through 64 of the
Company's Annual Report to Shareholders incorporated by reference into the
Company's Annual Report on Form 10-K for the year ended December 31, 1995, is
incorporated herein by reference, and the information set forth on pages 2
through 8 of the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996, is incorporated herein by reference.
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ITEM 8. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) The information set forth in "The Offer - Section 12, Certain Legal
Matters; Regulatory Approvals" of the Offer to Purchase is incorporated herein
by reference.
(c) The information set forth in "The Offer - Section 11, Effect of the
Offer on the Market for Shares; Registration under the Exchange Act of the Offer
to Purchase is incorporated herein by reference.
(d) Not applicable.
(e) The information set forth in the Offer to Purchase and Letter of
Transmittal is incorporated herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a) (1) Form of Offer to Purchase, dated September 25, 1996.
(2) Form of Letter of Transmittal (including Certifications of
Taxpayer Identification Number on Form W-9).
(3) Form of Notice of Election.
(4) President's letter to shareholders.
(5) Overview of Trident Rowan Group.
(6) Background on Temporary Integrated Management, S.p.A.
(7) Background on Moto Guzzi, S.p.A.
(8) Background on The Carey Winston Company.
(9) Report to Shareholders for Second Quarter 1996.
(b) Not Applicable.
(c) Not Applicable.
(d) Not Applicable.
(e) Not Applicable.
(f) Not Applicable.
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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 Schedule 13E-4 is true, complete and
correct.
September 12, 1996 TRIDENT ROWAN GROUP, INC.
By: /s/ Howard E. Chase
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Name: Howard E. Chase
Title: President
Exhibit (a)(1)
Stock Repurchase Program
Stock Repurchase Program
by
Trident Rowan Group, Inc.
For, depending on an election required to be made by each participating
shareholder, (i) up to a maximum of 1,260,684 Shares of Common Stock at a
repurchase price of $12.26 per share payable by delivery of a minimum of
$8.58 in cash and the Company's 8% two year non-negotiable promissory
note for the balance of the repurchase price, or (ii) up to a maximum of
787,928 shares of Common Stock at a repurchase price of $12.26 per share,
payable all in cash.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT, EASTERN TIME, ON
OCTOBER 23, 1996, UNLESS THE OFFER IS EXTENDED.
Trident Rowan Group, Inc. (the "Company", formerly known as De Tomaso
Industries, Inc.) is initiating a program (the "Program") to repurchase a
maximum of 1,260,684 Shares of its Common Stock, $.01 par value ("Shares"), or
such lesser number of Shares as are properly submitted and not withdrawn, for a
repurchase price of $12.26 per Share (the "Repurchase Price"). If a shareholder
elects to tender up to, but not more than, 50% of such shareholder's Shares, the
entire Repurchase Price will be paid to such shareholder in cash. If a
shareholder elects to tender more than 50%, but not more than 80% of such
shareholder's Shares, then depending on the number of Shares so tendered, the
Company will pay up to all of the Repurchase Price, but in any event not less
than the amount of $8.58 per Share, in cash, and will pay the balance of the
Repurchase Price, if any, by delivery of the Company's 8% non-negotiable
promissory notes, payable two years from the date of issuance. The Company will
not, under any circumstances, acquire more than 80% of the number of Shares held
of record by any shareholder, regardless of the aggregate number of Shares
submitted under the Program.
THE PROGRAM IS NOT CONDITIONED UPON ANY MINIMUM OF NUMBER OF SHARES BEING
SUBMITTED.
Subject to the foregoing limitations on the number of Shares which may be
tendered, to the extent that a record shareholder acts as a nominee, custodian,
broker or dealer for one or more beneficial owners of Shares, such record
shareholder may not submit for repurchase more than that percentage of the
Shares beneficially owned by each such beneficial owner which such beneficial
owner has elected to tender. Such nominee shareholder will be required to
certify as to the election made by each such beneficial owner.
BECAUSE THE MAXIMUM NUMBER OF SHARES SUBJECT TO THIS OFFER REPRESENTS 80% OF ALL
SHARES BENEFICIALLY OWNED BY SHAREHOLDERS FOR WHOSE BENEFIT THIS PROGRAM HAS
BEEN INITIATED, THERE IS NO PRORATION PERIOD CONTAINED IN THIS PROGRAM.
The Shares are traded on the National Association of Securities Dealer's
Inc.'s small capitalization market.
SHAREHOLDERS RESIDING IN STATES WHICH DO NOT PERMIT THE ISSUANCE OF NOTES
WITHOUT REGISTRATION UNDER APPLICABLE "BLUE SKY" LAWS, WHICH REGISTRATION MAY
NOT BE EFFECTED BY THE COMPANY, MAY ONLY ACCEPT THE 50% OFFER. THE 80% OFFER IS
NOT MADE IN SUCH STATES.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER, THE
COMPANY AND ITS BOARD OF DIRECTORS DO NOT RECOMMEND THAT ANY SHAREHOLDER
PARTICIPATE IN THE PROGRAM. EACH SHAREHOLDER, HOWEVER, MUST MAKE HIS, HER OR ITS
OWN DECISION WHETHER TO PARTICIPATE, AND, IF SO, TO WHAT EXTENT.
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IMPORTANT
Any shareholder desiring to participate in the Program should either (1)
complete and sign the Letter of Transmittal or a facsimile copy thereof in
accordance with the instructions contained therein, and mail or deliver it,
together with certificates for the Shares being tendered, a Notice of Election
and any other documents required thereby, including signature guarantees, to
American Stock Transfer & Trust Company, the paying agent for the Program
("Paying Agent"), or (2) request such shareholder's broker, dealer, commercial
bank, trust company or other nominee to effect the transaction for such
shareholder. A shareholder having Shares registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact such
broker, dealer, commercial bank, trust company or other nominee if such
shareholder desires to participate in the Program.
SHARES SUBMITTED UNDER THIS PROGRAM MAY BE WITHDRAWN AT ANY TIME WHILE THE OFFER
REMAINS OPEN. ADDITIONALLY, IN ACCORDANCE WITH APPLICABLE FEDERAL RULES, IF SUCH
SHARES HAVE NOT YET BEEN ACCEPTED BY THE COMPANY FOR PAYMENT, SUCH SHARES MAY BE
WITHDRAWN AFTER THE EXPIRATION OF 40 BUSINESS DAYS FROM THE COMMENCEMENT DATE
HEREOF.
Any questions or requests for assistance or for additional copies of the
Program materials or the Letter of Transmittal should be directed to the
Company. Shareholders may also contact their broker, dealer, commercial bank,
trust company or other nominee for assistance.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY AS TO WHETHER SHAREHOLDERS SHOULD PARTICIPATE OR REFRAIN FROM
PARTICIPATING IN THE PROGRAM. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE PROGRAM OTHER
THAN THOSE CONTAINED IN THESE PROGRAM MATERIALS OR IN THE LETTER OF TRANSMITTAL.
IF MADE OR GIVEN, SUCH RECOMMENDATION AND SUCH INFORMATION AND REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
As of September 10, 1996, there were 4,742,865 Shares outstanding. Of such
number, approximately 33.9%, or 1,607,142 Shares, are held beneficially or of
record by "public" shareholders. The remaining Shares are owned beneficially or
of record by parties who have agreed not to participate in the Program,
including Finprogetti, S.p.A. ("Finprogetti"), persons who are themselves
shareholders of Finprogetti, officers and directors of the Company, a trust
which holds certain shares formerly owned by the Company's former Chairman, Mr.
Alejandro De Tomaso, and certain others. An additional 982,500 Shares issuable
to executive officers of the Company in connection with the exercise of certain
stock options, are not available for participation in the Program.
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TABLE OF CONTENTS
SECTION PAGE
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INTRODUCTION................................................................. 4
THE OFFER.................................................................... 8
1. Number of Shares; Proration; Restriction on Transfer of the Notes.... 8
2. Procedure for Share Submission....................................... 9
3. Withdrawal Rights.................................................... 11
4. Acceptance for Payment of Shares and Payment of Purchase Price....... 11
5. Certain Conditions of the Offer...................................... 12
6. Price Range of Shares; Dividends..................................... 14
7. Reasons for, and Effects of, the Offer............................... 14
8. Source and Amount of Funds........................................... 15
9. Certain Information Concerning the Company........................... 15
10. Interest of Directors and Officers; Transactions and Arrangements
Concerning Shares.................................................... 24
11. Effects of the Offer on the Market for Shares; Registration Under
the Exchange Act..................................................... 24
12. Certain Legal Matters; Regulatory Approvals.......................... 25
13. Certain Federal Income Tax Consequences.............................. 25
14. Extension of Offer; Termination; Amendment........................... 28
15. Fees and Expenses.................................................... 28
16. Miscellaneous........................................................ 29
3
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INTRODUCTION
Summary of the Offer
The Company is making two mutually exclusive offers to each public
shareholder of record: (a) to purchase up to 80% of such shareholder's Shares
(subject to restrictions described below regarding the record shareholders who
are nominees for more than one beneficial shareholder) for a combination of cash
and non-negotiable promissory notes having a face value aggregating $12.26 per
Share (the "80% Offer"); or (b) to purchase up to 50% of each such shareholder's
Shares (again subject to the restrictions applicable to record shareholders who
are nominees for more than one beneficial shareholder) in cash for $12.26 per
Share (the "50% Offer"). The 80% Offer and the 50% Offer are referred to
collectively as (the "Offer").
Notes issued in part payment of the 80% Offer will be non-negotiable and
non-transferable, and will be payable as to principal on the second anniversary
of their issuance and will bear interest, payable annually, at 8% per annum,
subject to reduction to a rate of 5% per annum if the Note is prepaid in full
within 9 months of its issuance. The amount of cash payable pursuant to the 80%
Offer is dependent upon the number of Shares tendered pursuant thereto, provided
that not less than $8.58 per Share will be paid in cash.
A shareholder, upon tendering Shares, must make an election as to which of
the two offers the shareholder desires to accept. If a shareholder elects to
accept either the 80% Offer or the 50% Offer, but tenders less than the maximum
number of Shares which could be tendered, such shareholder may not then increase
the number of Shares or elect to accept the offer not previously selected
without first withdrawing their first election. Unless withdrawn, the election
precludes the shareholder from tendering additional Shares under either offer.
The election will include a representation by the shareholder that the number of
Shares tendered does not exceed the maximum permitted in connection with the
offer so elected.
Absent the submission of a withdrawal of an election, a later submitted
election will be disregarded and will be of no force or effect. Shareholders
should therefore consider carefully their preferred course of action prior to
submitting an election and tendering any Shares.
Background
Since 1993, the Company has been engaged in a basic refocus of its
operations and strategic direction, the outgrowth largely of the sudden illness
in that year of the Company's former chairman, Alejandro De Tomaso, and,
contemporaneously, the divestiture by the Company of the entirety of its
controlling interest in what was then its principal operating subsidiary,
Maserati S.p.A. ("Maserati") to Fiat Auto S.p.A. ("Fiat").
In January 1993, the Company was primarily a manufacturer of luxury Italian
automobiles under the "Maserati" brand name, and, secondarily, was a
manufacturer of Italian motorcycles under the "Moto Guzzi" brand name. After
sustaining significant losses in its operations for many years, and after trying
without success to engage in viable strategic relationships with larger, better
financed automobile companies, the Company sold its remaining 51% equity
interest in its Maserati operations to Fiat (see "Maserati Sale" below), having
sold 49% of Maserati's equity to Fiat in 1990.
The Company today, as a result of actions undertaken by the Board of
Directors, including the sale of Maserati, is profoundly different from the
Company as it existed in January 1993. While continuing to operate its Moto
Guzzi S.p.A. motorcycle business, as a result of the July 17, 1995 acquisition
of the operating assets of Finprogetti, the Company, through Temporary
Integrated Management, S.p.A. ("T.I.M."), has established itself as a provider
of hands-on temporary management services and capital to companies which
represent "turnaround" opportunities or which otherwise present opportunistic
investment possibilities for the Company as "portfolio companies" (see,
"Finprogetti Acquisition" below). In addition, the Company has bolstered its
capital through the private sale of the Company's Common Stock to certain
Finprogetti investors in connection with the Finprogetti Acquisition. Certain
real estate assets acquired from
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Finprogetti are intended to be liquidated and the proceeds used in connection
with the Company's new turnaround and opportunistic investment business. The
Company has also contracted to acquire The Carey Winston Company, which is
engaged in the management and disposition of real estate assets for outside
clients (see "Carey Winston Acquisition" below).
In 1993, following the sale of Maserati, a number of shareholders held the
view that the Company no longer was engaged in the business which had led to
their investing in the Company's Common Stock. They also felt that the
securities market did not reflect the value they thought was inherent in the
Company's assets. In response, the Board, in the course of examining the
Company's strategic direction and continuing viability after the Maserati Sale,
began to examine whether and under what circumstances the proceeds of the
Maserati Sale and other assets could be distributed to shareholders.
In 1993, after the Maserati Sale, the Company's only operating subsidiary
was G.B.M. S.p.A. (since renamed Moto Guzzi S.p.A.) ("Moto Guzzi"). At that
time, Moto Guzzi, which had been acquired by the Company in 1972, was a
manufacturer of medium and high priced motorcycles which for years had been both
unprofitable and undercapitalized. The Company's Board was prepared to consider
a capital investment by or joint venture with a third party, the sale of its
interest in Moto Guzzi, or some other form of business combination to repair
Moto Guzzi's capital deficiencies and financial condition.
When those efforts proved unsuccessful, the Company, in May 1994, engaged
T.I.M. to provide Moto Guzzi with critically needed temporary management in
order to staunch losses and to design a plan for the future growth or sale of
the subsidiary. Management selected and installed by T.I.M. continues to operate
Moto Guzzi. As described below, under T.I.M.'s direction, Moto Guzzi increased
production and sales, reduced costs, and achieved, in 1995, virtual break-even
results on an operating basis. Operations at Moto Guzzi have continued to
improve in 1996, substantially in accord with budgeted expectations. An
operating profit was achieved in the second quarter of 1996. Moto Guzzi today
manufactures a high priced line of motorcycles which vary in engine displacement
from 300cc to 1,100cc, although the subsidiary has determined to focus its
future sales and development efforts on its larger motorcycles, having engines
of 750cc or greater.
T.I.M. is now a wholly-owned subsidiary of the Company, having been
acquired in 1995 as part of the purchase of substantially all of the operating
assets of Finprogetti, (see "Finprogetti Acquisition", below). While the
operations of T.I.M. to date have not been material to the consolidated results
of operations of the Company, the acquisition of T.I.M. was an essential
component of the redirection of the Company's business strategy, as it permits
the Company to combine T.I.M.'s skill and knowledge in providing capable
management to troubled businesses with the Company's abilities in analyzing
capital requirements and transaction structuring, and to apply such capabilities
to identifying and exploiting investment opportunities arising out of T.I.M.'s
management engagement.
Previously, in November, 1993, T.I.M.'s management services were engaged by
Finprogetti, itself a financially troubled, privately held Italian corporation,
the capital of which was invested in real estate and financial services
ventures. Finprogetti acquired a 55% equity interest in T.I.M. in November, 1994
by buying Shares from Albino Collini, T.I.M.'s founder. Sig. Collini had become
Finprogetti's managing director in November, 1993.
Finprogetti Acquisition
In December 1994, the Company received an offer from Finprogetti, which it
subsequently accepted, in which it was proposed that: (a) the Company would
acquire substantially all of the operating assets of Finprogetti, including its
Italian real estate interests, its T.I.M. subsidiary, a leasing and factoring
company and certain Italian tax receivables aggregating Lit. 5,150,000,000, in
exchange for newly issued Shares of the Company's common stock valued at Lit.
20,106.73 per share ($12.26 at the then-prevailing exchange rate), and (b)
Finprogetti would make or cause others to make additional equity investments in
the Company aggregating up to Lit. 15,000,000,000 paying cash therefor at the
same price of Lit. 20,106.73 per share. If aggregate additional equity
investments were less than Lit. 15,000,000,000, it was agreed that Finprogetti
would realize a reduction in the number of Shares to be issued in connection
with the
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acquisition of the Finprogetti assets.
After the receipt of cash of Lit. 8,204,000,000 (approximately U.S.
$5,000,000) for the subscription to 408,008 Shares, the Company adjusted the
number of Shares issued for the Finprogetti assets to 1,922,652 Shares. Of such
1,922,652 Shares, 248,673 are being held in escrow pending realization by the
Company of a tax receivable of Lit. 5,150,000,000 that was included in the
assets acquired.
As a result of the July 1995 acquisition of Finprogetti and the strategic
repositioning of the Company to realize value from its management strengths, the
Company concluded that distributing the proceeds of the Maserati Sale, and
generally liquidating and distributing the Company's remaining assets was no
longer in the best interests of the Company or all shareholders. As described in
greater detail below, the Company has instead employed its financial and human
capital in furtherance of its new business activities. Nevertheless, adhering to
its promise to shareholders to enable them to realize value for their Shares,
the Company has commenced the Program which is intended simultaneously to
benefit the public shareholders while maintaining the Company's capital and
class of publicly traded common stock.
L.I.T.A. Acquisition
On July 25, 1995, in the first application of its new business plan
following its acquisition of Finprogetti's subsidiaries, the Company, through
one of its Italian subsidiaries, acquired L.I.T.A. S.p.A. ("L.I.T.A."), an
Italian manufacturer of steel tubing used for automotive purposes and in the
manufacture of metal furniture.
T.I.M. had been retained to manage L.I.T.A. after a material decline in
L.I.T.A.'s operations, and to oversee its sale to a third party to be identified
by T.I.M. The physical and operational presence of T.I.M. at L.I.T.A., its
ability to examine and comprehensively analyze the managed company's operational
and capital needs and T.I.M.'s ability to meet its client's strategic objective
of selling L.I.T.A. represents an example of an investment opportunity arising
from T.I.M.'s management business. The stock of L.I.T.A. was acquired at a cost
of Lit. 615,000,000, representing a discount of approximately Lit. 1,600,000,000
from the book value of L.I.T.A.'s assets. Through management provided to
L.I.T.A. by T.I.M., the Company hopes to enhance the value of L.I.T.A. as a
portfolio company and benefit both from income generated from L.I.T.A.'s
operations and from an eventual disposition of the rejuvenated subsidiary. While
1996 revenues are expected to reflect a significant increase over 1995 levels, a
steep drop in steel prices, reflected in a similar drop in revenues realized by
L.I.T.A. from the sale of its steel tubing, produced operating losses thus far
in 1996.
Proposed Carey Winston Acquisition
On August 14, 1996 the Company entered into an agreement and plan of merger
(the "Merger Agreement") with The Carey Winston Company ("Carey Winston"), the
leading real estate management company in the Baltimore/ Washington, D.C. area,
and DTI Acquisition Corp., a wholly owned subsidiary of the Company. Pursuant to
the Merger Agreement, DTI Acquisition Corp. will merge with and into Carey
Winston (the "Merger") , as a result of which Carey Winston will become a wholly
owned subsidiary of the Company, and the current shareholders of Carey Winston
will become beneficial owners of an aggregate of approximately 800,000 Shares,
subject to adjustment.
The Merger Agreement provides that the closing of the Merger will take
place on the 35th day following the closing of the Company's proposed registered
public offering of common stock (see, "Planned Stock Offering" below). The
Merger Agreement may be terminated if, among other things, the proposed public
offering has not closed by March 31, 1997. THERE CAN BE NO ASSURANCE EITHER THAT
THE PROPOSED PUBLIC OFFERING WILL TAKE PLACE IN TIMELY FASHION, IF AT ALL, OR
THAT THE MERGER WILL BE CONSUMMATED. Carey Winston provides fully integrated
real estate services to its large and growing base of commercial and
institutional clients, including property management, leasing, appraisal and
evaluation, mortgage banking and real estate investment and advisory services.
It does not itself own or develop real estate properties. Carey Winston is
engaged in a strategic program to acquire other regional real estate management
firms to capitalize on the trend toward consolidation in the industry. Its
ownership by the Company also enhances the ability of the Company to provide to
its client base in Europe real estate services.
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THE COMPANY AND ITS BOARD OF DIRECTORS ARE OF THE VIEW THAT THE FINPROGETTI
ACQUISITION, THE L.I.T.A. ACQUISITION, THE PROPOSED PUBLIC OFFERING, THE PENDING
CAREY WINSTON ACQUISITION AND THE OVERALL STRATEGIC REFOCUS OF THE COMPANY'S
BUSINESS ARE BENEFICIAL TO THE COMPANY'S FUTURE OPERATIONS, AND, THEREFORE, THE
COMPANY AND ITS BOARD OF DIRECTORS DO NOT RECOMMEND THAT THE SHAREHOLDERS
PARTICIPATE IN THE PROGRAM, BUT, RATHER, MAINTAIN THEIR OWNERSHIP OF THE
COMPANY'S STOCK. THERE CAN BE NO ASSURANCE HOWEVER THAT THE COMPANY'S FUTURE
OPERATIONS WILL BE IMPROVED BY SUCH ACQUISITIONS AND STRATEGIC REFOCUSING.
Planned Stock Offering
The Company intends, as soon as possible following the termination of the
Program, and regardless of the aggregate number of Shares which the Company
repurchases under the Program, to commence an offering of common stock and
common stock purchase warrants, the proceeds of which are intended to be used
for working capital in the Company's portfolio companies, and in connection with
its turn-around management and entrepreneurial investment opportunities
businesses.
The Maserati Sale
Background
In January 1990, as part of the Company's reorganization of its Maserati
manufacturing and distribution system and as part of its strategic affiliation
with Fiat, Italy's largest automobile company, the Company's O.A.M. subsidiary
sold 49% of its equity interest in Maserati to Fiat. On May 17, 1993, Maserati
having continued to sustain substantial operating losses as it had for several
years, losses which threatened its continuing viability, O.A.M. entered into a
definitive agreement with Fiat for the sale of its remaining 51% equity interest
in Maserati. Under the agreement of acquisition, Fiat paid O.A.M. an aggregate
of Lit. 75,750,000,000 in cash and by the assignment to O.A.M. of certain debt
owed by the Company's American Finance S.p.A. subsidiary to Fiat, all in three
installments.
The agreement also contemplated, but does not require, the potential
development of a parcel of land in Milan which was and is still owned by
Maserati and which Maserati had used to manufacture Maserati and Innocenti
automobiles. The land is now owned by Fiat due to its acquisition of Maserati.
O.A.M. will be entitled to receive up to a 5.25% equity interest in the real
estate development company formed to develop the property if certain conditions
are met, including the realization by the development company of proceeds upon a
sale of the parcel in excess of its approximate Lit. 109,8 00,000,000 book
value. Nothing in the agreement either requires Fiat to sell or otherwise
develop the parcel or limits in any way the price at which the parcel could be
sold. No assurance can be given that O.A.M. will receive any additional compen
sation relating to the development of the land.
The Company realized a gain on the sale equal to the sum of the Company's
accumulated deficiency in assets attributable to Maserati, the then-present
value of the debt of A.F. assigned by Fiat to O.A.M. and the cash proceeds paid
by Fiat in 1994 and 1995.
7
<PAGE>
THE OFFER
1. NUMBER OF SHARES; PRORATION; RESTRICTIONS ON TRANSFER OF THE NOTES
Upon the terms and subject to the conditions of the Offer, the Company will
accept for payment (and thereby purchase) up to a maximum of 1,260,684 Shares or
such lesser number of Shares as are properly submitted and not withdrawn in
accordance with Section 3 hereof before the Expiration Date, for a Repurchase
Price (the "Repurchase Price") of $12.26 per Share. A maximum of 1,260,684
Shares are eligible for repurchase only if all eligible shareholders elect to
accept the 80% Offer with respect to 80% of their Shares. A maximum of 787,928
Shares are eligible for repurchase if all eligible shareholders elect to accept
the 50% Offer with respect to 50% of their Shares. "Expiration Date" shall mean
12:00 midnight, New York City time, on October 23, 1996, unless and until the
Company shall have extended the period of time for which the Offer is open, in
which event the term "Expiration Date" shall refer to the latest time and date
at which the Offer, as so extended by the Company, shall expire. See Section 14
for a discussion of the Company's rights to extend the period of the Offer, or
to delay, terminate or amend same. The Company reserves the right, in its sole
discretion, at any time and from time to time, to extend the period of time
during which the Offer is open by giving oral or written notice of such
extension to the Paying Agent and making a public announcement thereof. A
shareholder may accept either the 80% Offer or the 50% Offer, but not both. A
shareholder may tender fewer than all of the Shares eligible to be tendered
under whichever Offer is accepted. Inasmuch as the Board of Directors does not
recommend that any shareholder participate in the Program, it is unlikely that
the Company will exercise its right to extend the period during which the Offer
is open.
The Offer is not conditioned upon any minimum number of Shares being
submitted for purchase, but is, however, subject to certain other conditions.
See Section 5, below.
(a) The 80% Offer. Each Share purchased by the Company under the 80% Offer
will be purchased at the Repurchase Price, payable net to the seller as follows:
such amount of cash as the Board of Directors shall have determined upon the
expiration of the Offer, which shall be not less than $8.58 per Share (the "Cash
Portion"), plus an unsecured non-negotiable promissory note of the Company (the
"Note"), payable as to principal on the second anniversary of its issuance, in
the principal amount equal to the difference between the Repurchase Price and
the Cash Portion, plus interest thereon, payable annually, at the rate of 8% per
annum, subject to reduction to a rate of 5% per annum if the Note is prepaid in
whole prior to the expiration of nine months from its issuance. The Company may
prepay the Note in whole or in part, prior to its payment date. Such Note shall
be non-transferrable. There is no existing market for the Notes and none will be
established by the Company. Shareholders residing in states which do not permit
the issuance of Notes without registration under applicable "blue sky" laws,
which registration may not be effected by the Company, may only accept the 50%
Offer. The 80% Offer is not made in such states.
(b) The 50% Offer. All Shares purchased by the Company under the 50% Offer
will be purchased at the Repurchase Price, in cash, net to each seller.
If (a) the Company (i) increases or decreases the price at which the Shares
are offered to be purchased, (ii) increases the number of Shares which the
Company will accept for purchase and such increase exceeds two percent of the
outstanding Shares or (iii) decreases the number of Shares which the Company
will accept for purchase, and (b) the Offer is scheduled to expire at any time
earlier than the expiration of the period ending on the tenth business day from
and including the date that notice of such increase or decrease is first
published, sent or given in the manner specified in Section 14 hereof, the Offer
will be extended until the expiration of such ten business day period. For
purposes of the Offer, a "business day" means any day other than a Saturday,
Sunday or Federal holiday and consists of the time period from 12:01 a.m. until
12:00 midnight, New York City time.
If the number of Shares properly tendered and not withdrawn before the
Expiration Date is less than or equal to 1,260,684 (or such greater or lesser
number as the Company may elect to purchase pursuant to the Offer), the Company,
upon the terms and subject to the conditions of the Offer, will purchase at the
Repurchase Price all Shares so submitted and not withdrawn.
8
<PAGE>
Under no circumstances may a shareholder submit for purchase more than 80%
of the Shares then beneficially owned by such shareholder. The Company will not
accept from any Shareholder more than 80% of the Shares beneficially owned by
such shareholder. Accordingly, the submission of the maximum number of Shares by
all eligible Shareholders cannot result in the submission of more than the
number of Shares the Company is willing to accept and as a result, there are no
proration rights and no time period for the determination of such rights.
A person submitting Shares for purchase as record holder for another person
or persons as beneficial owner(s), including brokers and persons holding Shares
in trust or custodial capacity, shall be permitted to submit no more than that
percentage of Shares which such beneficial owner or owners has or have elected
to submit pursuant either to the 80% Offer or the 50% Offer, and shall be
required to submit proof of instruction from each such beneficial owner with
respect to which Offer has been accepted, the number of Shares requested to be
submitted, and the aggregate beneficial holdings of such beneficial owner as of
such date, and to certify that the aggregate number of Shares tendered by each
such record holder does not exceed the sum of all tenders requested by all such
beneficial holders who have duly elected to participate in this Program.
Consequently, each such record owner, for example, may submit for purchase 80%
of each beneficial owners' Shares only if each and all such beneficial owners
for whose benefit such record owners hold Shares have elected to participate
fully in the 80% Offer and have instructed such record owner to submit for
purchase 80% of each such beneficial owner's holdings. No request by any
beneficial owner to tender less than 80% of such beneficial owner's Shares shall
accrue to the benefit of any other beneficial owner.
The Notes which may be issued by the Company in partial payment of the
Purchase Price will be issued pursuant to an exemption from the registration
requirements of the Securities Act of 1933 (the "Securities Act"). Accordingly,
shareholders who receive Notes in the Program may not, in any event, resell such
Notes to the public without their prior registration under the Securities Act or
absent the availability of an exemption from such registration requirements.
Each shareholder accepting Notes in the Program is required to represent to
the Company in the Letter of Transmittal that (i) the Notes are to be acquired
by the shareholder in the ordinary course of business, (ii) the shareholder is
not party to any understanding with any person to participate in the
distribution of the Notes and (iii) the shareholder acknowledges that any person
participating in the Program for the purpose of distributing the Notes must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with a resale of the Notes.
2. PROCEDURE FOR SHARE SUBMISSION
Proper Tender of Shares. For Shares to be properly submitted for purchase
pursuant to the Offer, certificates for such Shares, together with a properly
completed and duly executed Letter of Transmittal (or a facsimile copy thereof),
with any required signature guarantees, a Notice of Election and any other
documents required by the Letter of Transmittal, must be received before the
Expiration Date by the Paying Agent at its address set forth on the
back cover of this Offer to Purchase from or on behalf of each tendering
shareholder.
It is a violation of Section 14(e) of the Securities Exchange Act of 1934
(the "Exchange Act"), and Rule 14e-4 promulgated thereunder, for a person to
tender Shares for such person's own account unless the person so tendering (a)
owns such Shares or (b) owns an option, warrant or right to purchase such Shares
and intends to acquire Shares for tender by exercise of such option, warrant or
right.
Section 14(e) and Rule 14e-4 provide a similar restriction applicable to
the tender or guarantee of a tender on behalf of another person. A tender of
Shares made pursuant to any method of delivery set forth herein will constitute
a binding agreement between the tendering shareholder and the Company, upon the
terms and subject to the conditions of the Offer, including the tendering
shareholder's representation that (i) such shareholder owns the Shares being
tendered within the meaning of Rule 14e-4 promulgated under the Exchange Act and
(ii) the tender of such Shares complied with Rule 14e-4.
Signature Guarantees and Methods of Delivery. No signature guarantee is
required on the Letter of Transmittal (i) if same is signed by the registered
owner of the Shares (which term includes, for purposes of this Section, any
participant in the Depository Trust Company, Midwest Securities Trust Company or
Philadelphia Depository Trust Company
9
<PAGE>
(collectively the "Book Entry Transfer Facilities") whose name appears on a
security position listing as the owner of the Shares) tendered therewith, and
payment and delivery are to be made directly to such registered owner at such
owner's address shown on the records of the Company or (ii) if Shares are
tendered for the account of a financial institution that is a member in good
standing of a registered national securities exchange or of the National
Association of Securities Dealers, Inc., a commercial bank or trust company
having an office, branch or agency in the United States or an eligible
guarantor institution (bank, stockbroker, savings and loan association or
credit union with membership in an approved signature guarantee medallion
program), pursuant to Rule 17Ad-15 promulgated under the Securities Exchange
Act of 1934 (each an "Eligible Institution"). In all other cases, all signatures
on the Letter of Transmittal must be guaranteed by an Eligible Institution. If
a certificate representing Shares is registered in the name of a person other
than the person signing a Letter of Transmittal, or if payment is to be made,
or certificates for Shares not purchased or tendered are to be issued, to a
person other than the registered owner, the certificate must be endorsed or
accompanied by an appropriate stock power, in either case signed exactly as
the name of the registered owner appears on the certificate, with the signature
on the certificate of stock power guaranteed by an Eligible Institution. In all
cases, payment for Shares tendered and accepted for payment pursuant to the
Offer will be made only after timely receipt by the Paying Agent of
certificates for such Shares (or a timely confirmation of a book entry transfer
of such Shares into the Paying Agent's account at one of the Book Entry Transfer
Facilities), a properly completed and duly executed Letter of Transmittal (or a
facsimile thereof) and any other documents required by the Letter of
Transmittal. THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING STOCK
CERTIFICATES, THE LETTER OF TRANSMITTAL, NOTICE OF ELECTION AND ANY OTHER
REQUIRED DOCUMENTS, IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER.
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED.
Book-Entry Delivery. The Paying Agent will establish an account with
respect to the Shares at each of the Book-Entry Transfer Facilities for purposes
of the Offer within two business days after the date of this Offer to Purchase.
Any financial institution that is a participant in a Book-Entry Transfer
Facility's system may make book-entry delivery of the Shares by causing such
facility to transfer such Shares into the Paying Agent's account in accordance
with such facility's procedure for such transfer. Even though delivery of Shares
may be effected through book-entry transfer into the Paying Agent's account at
one of the Book-Entry Transfer Facilities, a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof), with any required
signature guarantees, a Notice of Election and other required documents, must,
in any case, be transmitted to and received by the Paying Agent at its address
set forth on the back cover of this Offer to Purchase before the Expiration
Date. Delivery of the Letter of Transmittal and any other required documents to
one of the Book-Entry Transfer Facilities does not constitute delivery to the
Paying Agent.
Federal Backup Withholding. Unless an exemption applies under the
applicable law concerning "backup withholding" of Federal income tax, the Paying
Agent will be required to withhold, and will withhold, 31 percent of the gross
proceeds otherwise payable to a shareholder (or other payee) pursuant to the
Offer, and from amounts constituting interest payable to a shareholder under any
Notes issued to him pursuant to the 80% Offer, unless the shareholder (or other
payee) provides such person's tax identification number (social security number
or employer identification number) and certifies that such number is correct.
Each tendering shareholder, other than a noncorporate foreign shareholder,
should complete and sign the main signature form and the Substitute Form W-9
included as part of the Letter of Transmittal so as to provide the information
and certification necessary to avoid backup withholding, unless an applicable
exemption exists and is proved in a manner satisfactory to the Company and the
Paying Agent. Noncorporate foreign shareholders generally should complete and
sign a Form W-8, Certificate of Foreign Status, a copy of which may be obtained
from the Paying Agent, in order to avoid backup withholding. However, redemption
proceeds and interest payments under the Notes made to non-residents of the
United States will in any event be subject to U.S. withholding tax of 30% unless
the recipient establishes either (i) an entitlement to a reduced rate of tax
under an income tax treaty between the United States and his country of
residence by furnishing a completed Form 1001 to the Company; or (ii) that the
payment is effectively connected with the conduct of the recipient's trade or
business in the United States by furnishing a completed Form 4224 to the
Company.
For a discussion of certain other Federal income tax consequences of the
Offer, see Section 13.
Determination of Validity; Rejection of Shares; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the number of Shares
to be accepted, the sufficiency and priority of the Notice of Election, the
price to be paid therefor and the validity, form, eligibility (including time of
receipt) and acceptance for payment of any tender of
10
<PAGE>
Shares will be determined by the Company, in its sole discretion, which
determination shall be final and binding on all parties. The Company reserves
the absolute right to reject any or all tenders determined by it not to be in
proper form or the acceptance for payment of which may, in the opinion of the
Company's counsel, be unlawful. The Company also reserves the absolute right to
waive any of the conditions of the Offer (except as otherwise provided in
Section 6) and any defect or irregularity in the tender of any particular
Shares. No tender of Shares will be deemed properly made until all defects or
irregularities have been cured or waived. None of the Company, the Paying Agent,
or any other person is or will be obligated to give notice of any defects or
irregularities in tenders, and none of them will incur any liability for failure
to give any such notice.
3. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 3, a tender of Shares pursuant
to the Offer is irrevocable. Shares tendered pursuant to the Offer may be
withdrawn at any time before the Expiration Date. Additionally, and in
accordance with applicable rules under Federal securities laws, unless
theretofore accepted for payment by the Company, Shares may be withdrawn after
12:00 Midnight, New York City time, of the 40th business day after September
25, 1996 (the "Commencement Date.")
For a withdrawal to be effective, the Paying Agent must timely receive (at
its address set forth on the back cover of this Offer to Purchase) a written or
facsimile transmission notice of withdrawal. Any notice of withdrawal must
specify the name of the person having tendered the Shares to be withdrawn,
the number of Shares to be withdrawn and, if different from the name of the
person who tendered the Shares, the name of the registered owner of such Shares.
If the certificates for Shares to be withdrawn have been delivered or otherwise
identified to the Paying Agent, then, prior to the release of such certificates,
the tendering shareholder must also submit the serial numbers shown on the
particular certificates evidencing such Shares and the signature on the notice
of withdrawal must be guaranteed by an Eligible Institution (except in the case
of Shares tendered by an Eligible Institution). If Shares have been delivered
pursuant to the procedure for book-entry transfer set forth in Section 2, the
notice of withdrawal must specify the name and the number of the account at the
applicable Book-Entry Transfer Facility to be credited with the withdrawn Shares
and otherwise comply with the procedures of such facility.
If a shareholder desires to revoke a Notice of Election to participate in
either the 80% Offer or the 50% Offer and intends to accept the alternative
Offer, such shareholder must first fully comply with the withdrawal requirements
set forth above, and then properly and timely submit a new Notice of Election in
accordance with Section 2. A substitute Notice of Election which is submitted to
the Paying Agent without full compliance with the foregoing withdrawal
requirements will be disregarded by the Company and will be of no force or
effect. Shareholders residing in states which do not permit the issuance of
Notes without registration under applicable "blue sky" laws, which registration
will not be effected by the Company, may only accept the 50% Offer. The 80%
Offer is not made in such states.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Company, in its sole discretion,
which determination shall be final and binding on all parties. None of the
Company, the Paying Agent or any other person is or will be obligated to give
any notice of any defects or irregularities in any notice of withdrawal, and
none of them will incur any liability for failure to give any such notice. A
withdrawal of a tender may not be rescinded and Shares properly withdrawn shall
thereafter been deemed not to be validly tendered for purposes of the Offer.
Withdrawn Shares, however, may be re-tendered before the Expiration Date by
again following one of the procedures described in Section 2.
4. ACCEPTANCE FOR PAYMENT OF SHARES AND PAYMENT OF PURCHASE PRICE.
For purposes of the Offer, the Company will be deemed to have accepted for
payment (and thereby purchased), Shares which are tendered and not withdrawn
when, as and if the Company gives oral or written notice to the Paying Agent of
its acceptance of such Shares pursuant the terms and subject to the conditions
of the Offer. The Company will purchase and pay for a maximum of 1,260,684
Shares or such lesser number of Shares as are properly tendered pursuant to
Section 2 and not withdrawn as permitted in Section 3 as soon as practicable
after the Expiration Date.
11
<PAGE>
Payment for Shares purchased pursuant to the Offer will be made by the
Company by depositing the aggregate Repurchase Price therefor with the Paying
Agent, which will act as agent for tendering shareholders for the purpose of
receiving payment from the Company and transmitting payment to the tendering
shareholders. Notwithstanding any other provision hereof, payment for Shares
accepted for payment pursuant to this Offer will in all cases be made only after
timely receipt by the Paying Agent of certificates for such Shares (or a timely
confirmation by a Book-Entry Transfer Facility of book-entry transfer of such
Shares to the Paying Agent), a properly completed and executed Letter of
Transmittal (or a facsimile thereof) with any required signature guarantees, a
Notice of Election and any other required documents. Under no circumstances will
interest be paid on the Repurchase Price of the Shares to be paid by the
Company, regardless of any delay in making such payment, other than pursuant to
the Notes.
The Company will pay any stock transfer taxes with respect to the transfer
and sale of Shares to it or to its order pursuant the Offer. If, however,
payment is to be made to, or certificates for Shares not purchased or tendered
are to be registered in the name of, any person other than the registered
holder, or if tendered certificates are registered in the name of any person
other than the person(s) signing the Letter of Transmittal, the amount of any
stock transfer taxes (whether imposed on the registered holder or such other
person) payable on account of the transfer to such person will be deducted from
the Repurchase Price unless evidence satisfactory to the Company of the payment
of such taxes or an exemption therefrom is submitted. See Instruction 6 of the
Letter of Transmittal.
ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY AND SIGN
THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL (OR, IN THE CASE
OF A NONCORPORATE FOREIGN SHAREHOLDER, A FORM W-8, WHICH IS OBTAINABLE FROM THE
PAYING AGENT) MAY BE SUBJECT TO A FEDERAL BACKUP WITHHOLDING TAX OF 31 PERCENT
OF THE GROSS PROCEEDS TO BE PAID TO SUCH SHAREHOLDER OR OTHER PAYEE PURSUANT TO
THE OFFER AND ON AMOUNTS CONSTITUTING INTEREST UNDER ANY NOTES ISSUED PURSUANT
TO THE 80% OFFER. REDEMPTION PROCEEDS, AND INTEREST PAYMENTS UNDER THE NOTES,
MADE TO NON-RESIDENTS OF THE UNITED STATES WILL IN ANY EVENT BE SUBJECT TO
WITHHOLDING TAX OF 30% UNLESS THE RECIPIENT ESTABLISHES EITHER (A) AN
ENTITLEMENT TO A REDUCED RATE OF TAX UNDER AN INCOME TAX TREATY BETWEEN THE
UNITED STATES AND HIS COUNTRY OF RESIDENCE BY FURNISHING A COMPLETED FORM 1001
TO THE COMPANY, OR (B) THAT THE PAYMENT IS EFFECTIVELY CONNECTED WITH THE
CONDUCT OF THE RECIPIENT'S TRADE OR BUSINESS IN THE UNITED STATES BY FURNISHING
A COMPLETED FORM 4224 TO THE COMPANY. SEE SECTION 2.
5. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, and in addition to (and
not in limitation of) the Company's right to extend or amend the Offer at any
time in its sole discretion, the Company shall not be required to accept for
payment or pay for any Shares tendered, and may terminate or amend the offer, if
at any time on or after midnight of the 20th business day after the Commencement
Date, and before acceptance for payment of or payment for any such Shares, any
of the following shall have occurred (or shall have been determined by the
Company to have occurred):
(a) there shall have been threatened, instituted or pending any action
or proceeding by any government or governmental, regulatory or
administrative agency or authority or tribunal or any other person,
domestic or foreign, before any court or governmental, regulatory or
administrative authority, agency or tribunal, domestic or foreign, which
(i) challenges the making of the Offer, the acquisition of Shares pursuant
to the Offer or otherwise, directly or indirectly, relates in any manner to
the Offer; (ii) in the sole judgment of the Company, could materially
affect the business, condition (financial or otherwise), income, operations
or prospects of the Company and its subsidiaries, taken as a whole, or
otherwise materially impair in any way the contemplated future conduct of
the business of the Company or any of its subsidiaries or materially impair
the Offer's contemplated benefits to the Company;
(b) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered,
12
<PAGE>
amendment, enforced or deemed to be applicable to the Offer or the Company
or any of its subsidiaries, by any court or any government or governmental,
regulatory or administrative authority, agency or tribunal, domestic or
foreign, which, in the Company's sole judgment, would or might directly or
indirectly (i) make the acceptance for payment of, or payment for, some or
all the Shares illegal or otherwise restrict or prohibit consummation of
the Offer; or (ii) delay or restrict the ability of the Company, or render
the Company unable, to accept for payment, or pay for, some or all the
Shares;
(c) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any United States national
securities exchange or in the over-the-counter market (excluding any
coordinated trading halt triggered solely as a result of a specified
decrease in a market index), (ii) the declaration of a banking moratorium
or any suspension of payments in respect of banks in the United States,
(iii) the commencement of a war, armed hostilities or other international
or national crisis directly or indirectly involving the United States, (iv)
any limitation (whether or not mandatory) by any governmental, regulatory
or administrative agency or authority on, or any event which, in the sole
judgment of the Company, might affect, the extension of credit by banks or
other lending institutions in the United States, (v) any significant
decrease in the market price of the Shares, (vi) any change in the general
political, market, economic or financial conditions in the United States or
abroad that could, in the sole judgment of the Company, have a material
adverse effect on the business, condition (financial or otherwise), income,
operations or prospects of the Company and its subsidiaries, taken as a
whole, or the trading in the Shares, or (vii) in the case of any of the
foregoing existing at the time of the commencement of the Offer, in the
sole judgment of the Company, a material escalation, acceleration or
worsening thereof;
(d) any tender or exchange offer with respect to the Shares (other
than the Offer), or any merger, acquisition, business combination or other
similar transaction with or involving the Company or any subsidiary, shall
have been proposed, announced or made by any person or entity;
(e) (i) any person, entity or "group" (as that term is used in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended) shall have
acquired, or proposed to acquire, beneficial ownership of more than five
percent of the outstanding Shares (other than a person, entity or group
which had publicly disclosed such ownership in a Schedule 13D or 13G (or an
amendment thereto) on file with the Securities and Exchange Commission (the
"Commission") prior to the Expiration Date, (ii) any new group shall have
been formed which beneficially owns more than five percent of the
outstanding Shares or (iii) any person, entity or group shall have filed a
Notification and Report Form under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, or made a public announcement reflecting an
intent to acquire the Company or any of its subsidiaries or any of their
respective assets or securities; or
(f) there shall be a reasonable likelihood that the purchase of Shares
pursuant to the Offer will cause either (i) the Shares to be held of record
by fewer than 300 persons or (ii) the Shares neither to be listed on any
"national securities exchange" (as such term is used in the Exchange Act)
nor to be "authorized to be quoted on an inter-dealer quotation system of
any registered national securities association" (as such term is used in
Rule 13e-3(a)(3)(ii)(B) under the Exchange Act);
which, in the sole judgment of the Company, in any such case and regardless of
the circumstances (including any action or inaction by the Company) giving rise
to such condition, makes it inadvisable to proceed with the Offer or with such
acceptance for payment or payment.
The Company does not intend to waive the condition set forth in paragraph
(f) above.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances (including any action or
inaction by the Company) giving rise to any such condition, and any such
condition may be waived by the Company, in whole or in part, at any time and
from time to time in its sole discretion; provided, however, that the Exchange
Act requires that all conditions to the Offer, other than those relating to the
receipt of certain necessary governmental approvals, must be satisfied or waived
before the Expiration Date. The Company's failure
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<PAGE>
at any time to exercise any of the foregoing rights shall not be deemed a waiver
of any such right; the waiver of any such rights with respect to particular
facts and circumstances shall not be deemed a waiver with respect to any other
facts or circumstances; and each such right shall be deemed an ongoing right
which may be asserted at any time and from time to time. Any determination by
the Company concerning the events described above and any related judgment by
the Company regarding the inadvisability of proceeding with the acceptance for
payment or payment for any tendered Shares will be final and binding on all
parties.
6. PRICE RANGE OF SHARES; DIVIDENDS
As of September 10, 1996, there were 1,289 holders of record of the
Company's Common Stock.
The Company's Common Stock traded on the non-NASD over-the-counter
market, commonly called the "pink sheets" in 1993 and until September 23, 1994.
Since September 24, 1994, the common stock has traded on the NASDAQ
small-capitalization market system. The reported prices represent inter-dealer
prices, which do not include retail mark-ups, mark-downs, or any commission to
the broker-dealer, and may not necessarily represent actual transactions.
Bid Prices
----------
1993 High Bid Low Bid
- ---- -------- -------
1st Quarter 3 1/2 3 1/2
2nd Quarter 4 1/2 4
3rd Quarter -- --
4th Quarter 2 2
1994
- ----
lst Quarter 3 2 1/2
2nd Quarter 5 1/2 2 1/2
3rd Quarter through September 23 5 1/2 4
September 26 through September 30 5 4 1/2
4th Quarter 9 1/4 4 1/4
1995
- ----
lst Quarter 9 1/2 7 3/4
2nd Quarter 9 5/8 8 1/2
3rd Quarter 9 3/4 9 3/8
4th Quarter 10 1/2 9 1/2
1996
- ----
lst Quarter 10 7/8 10 1/4
2nd Quarter 10 3/4 9 5/8
3rd Quarter through August 27 10 1/8 8 3/4
No dividends were declared or paid during 1993, 1994 or 1995. The Company
does not believe that its capital needs will permit the payment of any dividend
in the foreseeable future.
7. REASONS FOR, AND EFFECTS OF, THE OFFER
While the Offer is genuine and the Company will fulfill its obligation to
accept for purchase all Shares properly submitted for purchase and not
withdrawn, the Company is making the Offer with the hope that it is not
accepted. The Offer is the culmination of a promise made to shareholders in
connection with the 1993 Maserati Sale that, because the Company,
14
<PAGE>
by selling its remaining interest in Maserati, had ended its long-standing
involvement in the automobile industry, and with the Maserati name in
particular, the attraction which many shareholders had to the Company had been
severed. Since it was the view of many of these shareholders that the
then-current market price did not accurately or adequately reflect the inherent
value of the Company, the Board of Director undertook to examine means by which
shareholder value could be returned to shareholders following the Maserati Sale.
Among the transactions contemplated was a complete liquidation and
dissolution of the Company. The Finprogetti Acquisition, the retirement of
Alejandro De Tomaso, and the refocusing of the Company's business via a
strategic plan to utilize the Company as a vehicle to profit from its capital
and turnaround management skills compelled the Board to conclude that
dissolution and liquidation was inadvisable, and that implementing the new
business plan would, in the long term, provide ample opportunity to achieve
greater shareholder value than could be realized by a current liquidation.
Nevertheless, the Board adhered to the promise made to shareholders in
prior years, and concluded that the Offer would achieve the ends of those
shareholders who wished to sever their relationship with the Company, and of
those shareholders who share the Company's desire to maintain and grow its
business.
The Repurchase Price is the same price at which the Finprogetti acquisition
was consummated. Such price was determined by the Board of Directors, assisted
by an international accounting firm, in December, 1994, following careful
analysis of the Company's then-existing financial condition, its business
prospects, and the offer of Finprogetti which culminated in the Finprogetti
Acquisition.
If, in the aggregate, the Offer is maximally accepted, the Company will pay
a total of approximately $10,819,190 in cash. Additionally, if eligible
shareholders all maximally accept the 80% Offer in lieu of the 50% Offer, the
Company will incur debt under the Notes of $4,636,756. A presentation of the
financial statements of the Company on a pro forma basis is annexed hereto, and
shareholders are encouraged to read them carefully. Because full acceptance of
the Offer will necessarily deplete working capital with which the Company plans
to execute its new business plan, such full acceptance could have a material
adverse effect on the Company's ability to achieve its strategic goals.
The maximal acceptance of the Offer will not cause the Company's class of
common stock to be delisted from the National Association of Securities Dealers,
Inc.'s small capitalization market, but may prevent such stock from achieving a
listing on the NASD's National Market System.
8. SOURCE AND AMOUNT OF FUNDS
Assuming the Company purchases 1,260,684 Shares pursuant to the 80% Offer
at a Repurchase Price of $12.26 per Share, the Company expects the maximum
aggregate cost to be approximately $15,455,946. To the extent the number of
Shares tendered is less than the maximum, the Company reserves the right, in its
sole discretion, to increase the portion of the Repurchase Price paid in cash
and reduce the portion represented by Notes. If all eligible shareholders
maximally accept the 50% Offer, the Company expects the maximum aggregate cost
to be $9,659,997.
It is anticipated that the Company will fund the purchase of Shares
pursuant to the Offers and the payment of related fees and expenses in cash from
working capital and, in the case of the 80% Offer, through the incurrence of
debt through the issuance of the Notes. The Company has reserved approximately
$11,000,000 of its cash to purchase Shares pursuant to the Offer.
9. CERTAIN INFORMATION CONCERNING THE COMPANY.
The Company is a Maryland corporation organized in 1917. Through its
subsidiaries, it is engaged in the manufacture and sale of "Moto Guzzi"
motorcycles and of steel tubing for the furniture and automotive industries.
Through other subsidiaries, it also provides temporary management assistance and
capital support to third parties, and evaluates opportunities to make
opportunistic investments in such clients and others. The Company has,
additionally, contracted to
15
<PAGE>
acquire The Carey Winston Company, a real estate management service company
based in the Washington, DC area. See also "Background" above.
CERTAIN FINANCIAL INFORMATION
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
Set forth below is certain summary historical consolidated financial
information of the Company and its subsidiaries. The historical financial
information (other than the ratios of earnings to fixed charges) was derived
from the audited consolidated financial statements included in the Company's
Annual Report on Form 10-K, including Amendments No. 1 and No. 2 thereto, for
the year ended December 31, 1995 (the "Company's 1995 Annual Report"), and from
the unaudited summary consolidated financial statements included in the
Company's Quarterly Reports on Form 10-Q for the periods ended March 31 and June
30, 1996 (the "Company's 1996 Quarterly Reports"), each of which is hereby
incorporated herein by reference, and other information and data contained in
the Company's 1995 Annual Report and the Company's 1996 Quarterly Reports. More
comprehensive financial information is included in such reports and the
financial information which follows is qualified in its entirety by reference to
such reports and all of the financial statements and related notes contained
therein, copies of which may be obtained as set forth below under the caption
"Additional Information."
16
<PAGE>
Trident Rowan Group, Inc.
Summary Historical Consolidated Financial Information
Summary Income Statement Information
<TABLE>
<CAPTION>
In Millions of Lire Year ended Year ended 6 Months 6 Months
(except per share data) December 31 December 31 June 30 June 30
1995 1994 1996 1995
Unaudited
<S> <C> <C> <C> <C>
Net Sales ..................................... 72,253 51,994 49,001 29,466
Operating Losses (Note) ....................... (6,104) (4,090) (2,276) (3,330)
Net Loss ...................................... (6,980) (3,277) (4,355) (3,511)
Loss per share, in Lire ....................... (2,065) (1,593) (918) (1,706)
Average number of shares in issue ............. 3,380,441 2,057,446 4,744,332 2,057,446
Loss per share if preferred shares converted
to ordinary shares in July 1995 had been
converted January 1, 1995...................... (1,978) n/a n/a (1,492)
Ratio of Earnings to Fixed Charges............. n/a n/a n/a n/a
<CAPTION>
In US$'000 (except per share data) Year ended Year ended 6 Months 6 Months
December 31 December 31 June 30 June 30
1995 1994 1996 1995
Unaudited
<S> <C> <C> <C> <C>
Net Sales ..................................... 47,723 34,342 32,365 19,462
Operating Losses (Note)........................ (4,032) (2,701) (1,503) (2,199)
Net Loss ...................................... (4,610) (2,164) (2,876) (2,319)
Loss per share, in $ .......................... (1.36) (1.05) (0.61) (1.13)
Average number of shares in issue.............. 3,380,441 2,057,446 4,744,332 2,057,446
Loss per share if preferred shares converted
to ordinary shares in July 1995 had been
converted January 1, 1995...................... (1.31) n/a n/a (0.99)
Ratio of Earnings to Fixed Charges............. n/a n/a n/a n/a
</TABLE>
Notes
Operating losses are net sales less cost of sales, operating expenses and other
expenses plus rental and other income. I.e. loss from continuing operations
before interest income and expense, taxation and minority interests.
The ratio of earnings to fixed charges has not been calculated as earnings are
negative.
17
<PAGE>
Trident Rowan Group, Inc.
Summary Historical Consolidated Financial Information
Summary Balance Sheet Information
In millions of Lire June 30 December 31
1996 1995 1994
---------- -----------------
Unaudited
Cash and marketable securities ................... 22,966 24,137 10,286
Other current assets ............................. 83,279 71,552 69,755
------- ------- -------
Current assets ................................... 106,245 95,689 80,041
Property, plant & equipment and other
assets, excluding goodwill & intangibles ......... 65,387 80,932 38,620
------- ------- -------
Total assets excluding goodwill & intangibles .... 171,632 176,621 118,661
Goodwill and intangibles ......................... 6,118 6,209 --
------- ------- -------
Total assets ..................................... 177,750 182,830 118,661
======= ======= =======
Advances from banks .............................. 36,003 27,159 15,784
Current portion of loans ......................... 6,950 11,416 5,681
Other current liabilities ........................ 32,945 33,788 24,854
------- ------- -------
75,898 72,363 46,319
Long term loans .................................. 14,532 18,098 5,004
Other long term liabilities, minority interests .. 26,342 28,599 24,181
Shares subject to repurchase ..................... 12,424 12,549 --
Shareholders' equity ............................. 48,554 51,221 43,157
------- ------- -------
Total liabilities and equity ..................... 177,750 182,830 118,661
======= ======= =======
Book value per share, in Lire (Note) ............. 12,237 13,008 14,115
======= ======= =======
Notes
In the calculation of book value per share, 776,530 shares subject to repurchase
under certain conditions and are classified outside of equity in the financial
statements have been excluded. If such shares were considered a part of
permanent equity then book value per share would be:
Book value per share, in Lire (Note) 12,853 13,527 14,115
======= ======= =======
18
<PAGE>
Trident Rowan Group, Inc.
Summary Historical Consolidated Financial Information
Summary Balance Sheet Information (Convenience Translation)
In US$'000 June 30 December 31
1996 1995 1994
---------- -----------------
Unaudited
Cash and marketable securities ................... 15,169 15,943 6,794
Other current assets ............................. 55,006 47,260 46,073
------- ------- -------
Current assets ................................... 70,175 63,203 52,867
Property, plant & equipment and other
assets, excluding goodwill & intangibles ......... 43,188 53,456 25,509
------- ------- -------
Total assets excluding goodwill & intangibles .... 113,363 116,659 78,376
Goodwill and intangibles ......................... 4,041 4,101 --
------- ------- -------
Total assets ..................................... 117,404 120,760 78,376
======= ======= =======
Advances from banks .............................. 23,780 17,939 10,425
Current portion of loans ......................... 4,590 7,540 3,752
Other current liabilities ........................ 21,761 22,316 16,417
------- ------- -------
50,131 47,795 30,594
Long term loans .................................. 9,598 11,954 3,305
Other long term liabilities, minority interests .. 17,399 18,890 15,972
Shares subject to repurchase ..................... 8,206 8,289 --
Shareholders, equity ............................. 32,070 33,832 28,505
------- ------- -------
Total liabilities and equity ..................... 117,404 120,760 78,376
======= ======= =======
Book value per share, in US$ ..................... 8.08 8.59 9.32
======= ======= =======
Notes
Translation of lire amounts into US Dollar amounts is included solely for the
convenience of the readers of the financial statements and has been made at the
rate of Lit. 1,514 to US $1, the approximate exchange rate at August 31, 1996.
It should not be construed that the assets and liabilities, expressed in US
dollar equivalents, can actually be realized in or extinguished by US dollars at
that or any other rate.
In the calculation of book value per share, 776,530 shares subject to repurchase
under certain conditions and are classified outside of equity in the financial
statements have been excluded. If such shares were considered a part of
permanent equity then book value per share would be:
Book value per share, in US$...................... 8.49 8.94 9.32
======= ======= =======
19
<PAGE>
SUMMARY UNAUDITED CONSOLIDATED PRO FORMA FINANCIAL INFORMATION
The following summary unaudited consolidated pro forma financial information
gives effect to the purchase of Shares pursuant to the Offer, based on certain
assumptions described in the Notes to Summary Unaudited Consolidated Pro Forma
Financial Information and gives effect to the purchase of Shares pursuant to the
Offer as if it had occurred on January 1, 1996 and January 1, 1995, with respect
to income statement data and on June 30, 1996 and December 31, 1995, with
respect to balance sheet data. The summary unaudited consolidated pro forma
financial information should be read in conjunction with the summary
consolidated historical financial information and does not purport to be
indicative of the results that would actually have been obtained had the
purchase of the Shares pursuant to the Offer been completed at the dates
indicated or that may be obtained in the future.
20
<PAGE>
Trident Rowan Group, Inc.
Summary Unaudited Proforma Consolidated Financial Information
Summary Income Statement Information
<TABLE>
<CAPTION>
In Millions of lire In US$'000
----------------------- ----------------------
6 Months Year Ended 6 Months Year Ended
June 30 December 31 June 30 December 31
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net Sales .......................... 49,001 72,253 32,365 47,723
--------- --------- --------- ---------
Operating Losses (Note) ............ (2,276) (6,104) (1,503) (4,032)
--------- --------- --------- ---------
Net Loss ........................... (5,253) (8,914) (3,470) (5,888)
--------- --------- --------- ---------
Loss per share, in Lire/US$ ........ (1,508) (4,205) (1.00) (2.78)
--------- --------- --------- ---------
Average number of shares in issue... 3,483,648 2,119,757 3,483,648 2,119,757
--------- --------- --------- ---------
Ratio of Earnings to Fixed Charges.. n/a n/a n/a n/a
--------- --------- --------- ---------
</TABLE>
Notes
Translation of lire amounts into US Dollar amounts is included solely for the
convenience of the readers of the financial statements and has been made at the
rate of Lit. 1,514 to US $1, the approximate exchange rate at August 31, 1996.
It should not be construed that the assets and liabilities, expressed in US
dollar equivalents, can actually be realized in or extinguished by US dollars at
that or any other rate.
The Proforma income statements show the estimated net loss and net loss per
share if the Stock Repurchase Program had taken place on 1 January 1995 and
shareholders had submitted the maximum number of shares for repurchase under the
80% offer. The maximum amount to be paid of 1,260,684 shares at $12.26 or
$15,455,986 has been converted into Lire at the approximate August 31, 1996
exchange rate of 1,514. Proforma adjustments to net loss include the effects of
decreased interest receivable, less related taxation effects, and the interest
payable on the loan note.
Operating losses are net sales less cost of sales, operating expenses and other
expenses plus rental and other income. I.e. loss from continuing operations
before interest income and expense, taxation and minority interests.
The ratio of earnings to fixed charges has not been calculated as earnings are
negative.
21
<PAGE>
Trident Rowan Group, Inc.
Summary Proforma Consolidated Financial Information
Summary Balance Sheet Information
<TABLE>
<CAPTION>
In Millions of lire In US$'000
----------------------- ----------------------
6 Months Year Ended 6 Months Year Ended
June 30 December 31 June 30 December 31
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Cash and marketable securities ......... 6,586 7,757 4,350 5,124
Other current assets ................... 83,279 71,552 55,006 47,260
------- ------- ------- -------
Current assets ......................... 89,865 79,309 59,356 52,384
Property, plant and equipment and other
assets, excluding goodwill and tangibles 65,387 80,932 43,188 53,456
------- ------- ------- -------
Total assets excluding goodwill and
intangibles ............................ 155,252 160,241 102,544 105,840
Goodwill and intangibles ............... 6,118 6,209 4,041 4,101
------- ------- ------- -------
Total assets ........................... 161,370 166,450 106,585 109,941
------- ------- ------- -------
Advances from banks .................... 36,003 27,159 23,780 17,939
Current portion of loans ............... 6,950 11,416 4,590 7,540
Other current liabilities .............. 35,777 35,722 23,631 23,594
------- ------- ------- -------
78,730 74,297 52,001 49,073
Long term loans ........................ 21,552 25,118 14,235 16,590
Other long term liabilities, minority
Interests ............................ 26,342 28,599 17,399 18,890
Shares subject to repurchase ........... 12,424 12,549 8,206 8,289
Shareholders' equity ................... 22,322 25,887 14,744 17,098
------- ------- ------- -------
Total liabilities and equity ........... 161,370 166,450 106,585 109,940
------- ------- ------- -------
Book value per share, in Lire/US$(Note) 8,246 9,670 5,45 6.39
------- ------- ------- -------
</TABLE>
Notes
Translation of lire amounts into US Dollar amounts is included solely for the
convenience of the readers of the financial statements and has been made at the
rate of Lit. 1,514 to US $1, the approximate exchange rate at August 31, 1996.
It should not be construed that the assets and liabilities, expressed in US
dollar equivalents, can actually be realized in or extinguished by US dollars at
that or any other rate.
22
<PAGE>
The Proforma Summary Balance Sheets reflect the effects on cash, debt and equity
if the Repurchase Program had taken place on 1 January 1995 and shareholders had
submitted the maximum number of shares for repurchase under the 80% offer. The
maximum amount to be paid of 1,260,684 shares at $12.26 or $15,455,986 has been
converted into Lire at the approximate August 31, 1996 exchange rate of 1,514.
Proforma adjustments reflected in the statements are as follows:
<TABLE>
<CAPTION>
In Millions of lire In US$'000
----------------------- ----------------------
6 Months Year Ended 6 Months Year Ended
June 30 December 31 June 30 December 31
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Reduction in cash for payment ............ 16,380 16,380 10,819 10,819
Increase in loans for loan note .......... 7,020 7,020 4,637 4,637
Decrease in equity for repurchase ........ 23,400 23,400 15,456 15,456
Decrease in equity and increase in accrued
expenses for interest, net of tax effect 2,832 1,934 1,871 1,277
In the calculation of book value per share, 776,530 shares subject to repurchase
under certain conditions and are classified outside of equity in the financial
statements have been excluded. If such shares were considered a part of
permanent equity then book value per share would be:
Book Value per share, in Lire/US$ (Note) 9,974 11,129 6.59 7.35
===== ====== ==== ====
</TABLE>
23
<PAGE>
ADDITIONAL INFORMATION
The Company is subject to the informational reporting requirements of the
Exchange Act and in accordance therewith the Company files reports, proxy
statements and other information with the Commission. Additional information
concerning the Company is set forth in the Company's Annual Report on Form 10-K,
including Amendments No.1 and No. 2 thereto for the year ended December 31, 1995
and the Company's Quarterly Report on Form 10-Q for the period ended June 30,
1996. The Company has filed an Issuer Tender Offer Statement on Schedule 13E-4
with the Commission which includes certain additional information relating to
the Offer. The reports, proxy statements and other information filed by the
Company with the Commission can be inspected and copied at the public reference
facilities maintained by the Commission at Judiciary Plaza, Room 1024, 450 Fifth
Street, N.W., Washington D.C. 20549.
10. INTEREST OF DIRECTORS AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS CONCERN-
ING SHARES.
As of September 10, 1996, the Company had issued and outstanding 4,742,865
Shares and had reserved 982,500 Shares for issuance upon exercise of outstanding
stock options, of which 228,000 are currently exercisable. The maximum 1,260,684
Shares that the Company is offering to purchase under the 80% Offer represents
approximately 26.6% of the Shares currently outstanding. As of September 10,
1996, the Company's directors and executive officers as a group (10 persons)
beneficially owned an aggregate of 398,943 Shares representing approximately
6.8% of the outstanding Shares, assuming the exercise by such persons of their
currently exercisable options. If the Company purchases 1,260,684 Shares
pursuant to the 80% Offer, then after the purchase of Shares pursuant to the
offer, the Company's executive officers and directors as a group would own
beneficially approximately 11.5% immediately after the Offer, assuming the
exercise by such persons of their currently exercisable options.
On September 10, 1996, Howard E. Chase, President of the Company, purchased
10,000 Shares on the open market for his own account. He has advised the board
of directors that he will not submit the Shares for repurchase under the
Program. Other than the foregoing, neither the Company, nor any subsidiary of
the Company nor, to the best of the Company's knowledge, any of the Company's
directors or executive officers, nor any affiliate of any of the foregoing, had
any transactions involving the Shares during the 40 business days prior to the
date hereof.
Certain shareholders of the Company, including Finprogetti, certain
shareholders of Finprogetti, officers and directors of the Company, and a trust
which holds certain shares formerly owned by the Company's former Chairman, Mr.
Alejandro De Tomaso, have agreed not to participate in the Program.
Except for outstanding options to purchase Shares granted from time to time
to certain employees (including executive officers) of the Company pursuant to
the Company's stock option plans, the agreement to acquire Carey Winston, and
except as otherwise described herein, neither the Company nor, to the best of
the Company's knowledge, any of its affiliates, directors or executive officers,
is a party to any contract, arrangement, understanding or relationship with any
other person relating, directly or indirectly, to the Offer with respect to any
securities of the Company including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or the voting
of any such securities, joint ventures, loan or option arrangement, puts or
calls, guaranties of loans, guaranties against loss or the giving or withholding
of proxies, consents or authorizations.
11. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE
EXCHANGE ACT.
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise be traded publicly but cannot, by design,
reduce the number of shareholders. The Company anticipates that there will be a
sufficient number of Shares outstanding and publicly traded following
consummation of the Offer to ensure a continued trading market for the Shares.
Based upon published guidelines of the NASD, the Company does not believe that
its purchase of Shares pursuant to the Offer will cause the Company's remaining
Shares to be delisted from the NASD Small Capitalization Market.
24
<PAGE>
The Shares are registered under the Exchange Act, which requires, among
other things, that the Company furnish certain information to its shareholders
and the Commission and comply with the Commission's proxy rules in connection
with meetings of the Company's shareholders. The Company believes that its
purchase of Shares pursuant to the Offer will not result in the Shares becoming
eligible for deregistration under the Exchange Act.
12. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS
The Company is not aware of any license or regulatory permit that appears
to be material to the Company's business that might be adversely affected by the
Company's acquisition of Shares as contemplated herein or of any approval or
other action by any government or governmental, administrative or regulatory
authority or agency, domestic or foreign, that would be required for the
acquisition or ownership of Shares by the Company as contemplated herein. Should
any such approval or other action be required, the Company presently
contemplates that such approval or other action will be sought. The Company is
unable to predict whether it may determine that it is required to delay the
acceptance for payment of or payment for Shares tendered pursuant to the
Offering pending the outcome of any such matter. There can be no assurance that
any such approval or other action, if needed, would be obtained or would be
obtained without substantial conditions or that the failure to obtain any such
approval or other action might not result in adverse consequences to the
Company's business. The Company's obligations under the Offer to accept for
payment and pay for Shares is subject to certain conditions. See Section 5.
13. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following summary describes certain United States federal income tax
consequences relevant to the Offers. It is based upon the Internal Revenue Code
of 1986, as presently amended (the "Code"), existing and proposed Treasury
Regulations promulgated thereunder, administrative pronouncements and judicial
decisions, all of which are subject to change (either prospectively or
retroactively), which changes could materially affect the tax consequences
described herein.
This summary is necessarily general in nature, and does not address all of
the tax consequences that may be relevant to particular shareholders in light of
their personal circumstances, or to certain types of shareholders (such as
certain financial institutions, dealers in securities or commodities, insurance
companies, tax-exempt organizations or persons who hold Shares as a position in
a straddle). In particular, the discussion herein applies only to a shareholder
which is a United States resident for federal income tax purposes, which
generally means (i) an individual who is a citizen or resident of the United
States, (ii) a corporation, partnership or other entity created or organized in
or under the laws of the United States, any State or any political subdivision
thereof, or (iii) an estate or trust the income of which is subject to United
States federal income taxation regardless of source. This summary further
assumes that all Shares are held as "capital assets", and it thus may not be
applicable with respect to Shares acquired as compensation (including Shares
acquired upon the exercise of options). The summary also does not address the
state, local or foreign tax conse quences of participating in the Offer. Each
shareholder should consult his tax advisor as to the particular consequences to
him of participation in either Offer.
Consequences to Tendering Shareholders of Exchange of Shares Pursuant to
the Offer. A redemption of Shares pursuant to either of the Offers will be a
taxable transaction for United States federal income tax purposes. As to any
particular shareholder, and depending upon his individual circumstances, the
redemption will be treated either as (i) a so-called "sale or exchange" of a
shareholder's redeemed Shares, on which gain or loss will be recognized or,
alternatively, (ii) as a "distribution" from the Company, which could be taxed
wholly or partially as a dividend as discussed below.
Under Section 302 of the Code, a redemption will be treated as a "sale or
exchange" if the redemption (i) results in a "complete termination" of a
redeeming shareholder's equity interest in the Company, (ii) results in a
"substantially disproportionate" redemption with respect to such shareholder or
(iii) is "not essentially equivalent to a dividend" with respect to such
shareholder. Each of these tests measures the reduction in a shareholder's
ownership of Shares resulting from the redemption, taking into account not only
Shares he actually owns, but also Shares owned by certain related individuals
and entities. Under these constructive ownership rules, an individual
shareholder is generally considered to own the Shares owned directly or
indirectly by or for his or her spouse and his or her children, grandchildren
and parents, and to own a proportionate number of the Shares owned by trusts or
estates in which the
25
<PAGE>
shareholder has a beneficial interest, by partnerships in which the shareholder
is a partner, and by corporations in which the shareholder owns, directly or
indirectly, 50% or more in value of the stock. Similarly, Shares directly or
indirectly owned by beneficiaries of estates or trusts, by partners of
partnerships and, under certain circumstances, by shareholders of corporations
may be considered owned by these entities. A shareholder will generally also be
deemed to own Shares which he has the right to acquire by exercise of an option.
The Offers being made by the Company to its shareholders contemplate a
redemption of not more than 80% of any shareholder's shareholdings in the
Company (in the case of the 80% Offer), or not more than 50% of a shareholder's
shareholdings in the Company (in the case of the 50% Offer), so that a
redemption of a shareholder's Shares pursuant to either of such Offers would not
qualify as one which results in "complete termination" of such shareholder's
interest for purposes of Code Section 302.
An exchange of Shares will be a "substantially disproportionate" redemption
with respect to a shareholder if his percentage ownership interest of the
Company's voting stock owned by such shareholder immediately after the exchange
is less than 80% of the percentage ownership interest of the Company's voting
stock owned by such shareholder immediately before the exchange (taking into
account the reduction in Shares outstanding caused by the redemption).
If a shareholder does not tender enough Shares to satisfy the
"substantially disproportionate" test, the shareholder may nonetheless satisfy
the "not essentially equivalent to a dividend" test. A shareholder who wishes to
satisfy (or avoid) the "not essentially equivalent to a dividend" test is urged
to consult such shareholder's tax advisor because this test will be met if the
reduction in such shareholder's proportionate interest in the Company
constitutes a "meaningful reduction" given such shareholder's particular facts
and circumstances. The IRS has taken the position in published rulings that any
reduction (even the most modest) in the percentage interest of a shareholder
whose relative stock interest in a publicly held corporation is minimal (an
interest of less than 1% should satisfy this requirement) and who exercises no
control over corporate affairs would constitute such a "meaningful reduction."
If a shareholder sells Shares to persons other than the Company at or about
the time such shareholder also sells Shares to the Company pursuant to either of
the Offers, and if the various sales effected by the shareholder are part of an
overall plan to reduce or terminate such shareholder's proportionate interest in
the Company, then the sales to persons other than the Company may, for federal
income tax purposes, be integrated with the shareholder's sale of Shares
pursuant to the Offer and, if integrated, may be taken into account in
determining whether the shareholder satisfies any of the three tests described
above. A shareholder should consult his tax advisor regarding the treatment of
other exchanges of Shares for cash which may be integrated with such
shareholder's sale of Shares to the Company pursuant to the Offer.
All of the Section 302 tests described above require, at a minimum, that a
redeeming shareholder's percentage ownership interest in the Company (and not
just the aggregate number of Shares he owns) in fact be reduced by reason of the
redemption. A shareholder's ownership percentage interest in the Company after
the redemption is determined by reference not only to the Shares he himself owns
(directly and constructively), but also by reference to the total number of
Company Shares then outstanding which, in turn, will depend upon the number of
Shares tendered for redemption by other shareholders. Accordingly, it may be
impossible for the Company or any shareholder to predict how many Shares a
shareholder should tender for redemption in order for such redemption to be
treated for federal income tax purposes as either a "sale or exchange" or as a
"distribution".
Calculating Gain or Loss if Sale or Exchange Treatment Obtains. If the
redemption of a shareholder's Shares pursuant to either Offer is treated as a
"sale or exchange" as to such shareholder, then the shareholder will recognize,
for tax purposes, gain or loss on such redemption equal to the difference
between (i) the amount of cash and the fair market value of the Note received,
and (ii) such shareholder's tax basis in the Shares redeemed. Any such gain or
loss will be capital gain or loss and will be long-term capital gain or loss if
the holding period of the Shares exceeds one year as of the date of the
exchange. Gain or loss must be determined separately for each block of Shares
(that is, Shares acquired at the same cost in a single transaction) that is
redeemed. A shareholder may be able to designate (generally through his broker)
which blocks of Shares are tendered pursuant to the Offer. Each shareholder
should consult his tax advisor concerning the mechanics and desirability of such
a designation.
26
<PAGE>
Shareholders considering accepting the 80% Offer should note that, because
Shares of the Company are publicly traded, any gain recognized by that
shareholder attributable to his receipt of a Note pursuant to the 80% Offer
cannot be reported by him on the installment method. Rather, all such gain must
recognized for federal income tax purposes in the year of receipt of the Note
even though payment of principal under the Note will not be paid until its
maturity. For purposes of calculating such gain, the Note will be valued at its
fair market value on the date of issuance, which fair market value will be
determined by reference to the public trading price of Shares on that day and
therefore may not necessarily be the same as the Note's stated principal amount.
If a shareholder recognizes loss on the redemption of his Shares, some or
all of such loss will not be allowed as an income tax deduction under the
so-called "wash sale" rules of Code Section 1091 if, at any time during the
period commencing 30 days before, and ending 30 days after, the redemption, the
shareholder purchases (or enters into a contract or option to purchase) other
Shares of the Company.
Consequence of the Redemption Being Treated as a Distribution. If a
shareholder tenders only a small amount of his Shares pursuant to the Offers so
that his percentage ownership of the Company (including Shares constructively
owned by him) does not decrease sufficiently to constitute a "sale or exchange"
under the Section 302 tests described above, then the entire amount of cash and
the fair market value of the Note received by such shareholder in such
redemption will be treated as a dividend in the year of the redemption to the
extent of the Company's current and accumulated earnings and profits. Such a
dividend will be includible in the shareholder's gross income as ordinary income
in its entirety, without reduction for the tax basis of the Shares redeemed, and
no loss will be recognized for tax purposes. The shareholder's tax basis in the
Shares redeemed, however, will be added to such shareholder's tax basis in the
remaining Shares that he owns. To the extent that the cash and Note received in
exchange for Shares is treated as a dividend to a corporate shareholder, (i) it
will be eligible for a dividends-received deduction (subject to applicable
limitations) and (ii) it will be subject to the "extraordinary dividend"
provisions of the Code. A corporate shareholder should consult its tax advisor
concerning the availability of the dividends-received deduction and the
application of the "extraordinary dividend" provisions of the Code.
If the amount of the distribution exceeds the Company's earnings and
profits, such excess will be treated first as a non-taxable return of capital to
the shareholder to the extent of his tax basis in his Shares, with any balance
being treated as a gain from the sale or exchange of his Shares.
Original Issue Discount Rules Applicable to the Notes. Shareholders
contemplating accepting the 80% Offer should note that the Notes issued pursuant
to such Offer may bear "original issue discount" within the meaning of Code
Sections 1271-1275. Under the original issue discount rules, the difference
between an obligation's "issue price" and its "stated redemption price at
maturity" (which includes all payments of interest other than "qualified stated
interest") is considered original issue discount. Because the Notes are issued
in exchange for publicly traded stock, Code Section 1273(b)(3)(B) provides that
the Notes' "issue price" will be equal to the fair market value of the Shares of
the Company stock for which they are issued (reduced, in this case, by the cash
portion of the redemption proceeds paid by the company for those Shares), which
amount is generally considered to be the fair market value of the Notes. This
"issue price" may be more, or less, than the stated principal amount of a Note.
If the issue price is less, the resulting original issue discount must be
accrued by a holder of a Note as interest income, for federal income tax
purposes, on a constant yield to maturity basis over the term of the Note
regardless of the noteholder's method of accounting for income tax purposes. If
a Note's issue price exceeds its face amount, the excess so-called "amortizable
bond premium" must be amortized by a noteholder on a constant yield to maturity
basis over the term of the Note, and will offset (and so reduce) the interest
income a noteholder will recognize attributable to his receipt of interest
payments on his Note.
Within 30 days after the issuance of the Notes, if the Notes bear original
issue discount, the Company is required to furnish certain information with
respect to such original issue discount to the Internal Revenue Service.
Consequences to Shareholders who do not Tender Pursuant to the Offers.
Shareholders who do not accept the Company's Offers to tender their Shares will
not incur any tax liability as a result of the consummation of the Offers.
See Section 2 with respect to the application of federal income tax
withholding to payments made to foreign shareholders and backup withholding.
27
<PAGE>
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION
ONLY. EACH SHAREHOLDER IS URGED TO CONSULT HIS OWN TAX ADVISOR TO DETERMINE THE
PARTICULAR TAX CONSEQUENCES TO HIM OF THE OFFER, INCLUDING THE APPLICABILITY AND
EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS.
14. EXTENSION OF OFFER; TERMINATION; AMENDMENT.
The Company expressly reserves the right, in its sole discretion, at any
time and from time to time, and regardless of whether or not any of the events
set forth in Section 5 shall have occurred or shall be deemed by the Company to
have occurred, to extend the period of time during which the Offer is open and
thereby delay acceptance for payment of, and payment for, any Shares by giving
oral or written notice of such extension to the Paying Agent and making a public
announcement thereof. The Company also expressly reserves the right, in its sole
discretion, to terminate the Offer and not accept for payment or pay for any
Shares not theretofore accepted for payment or paid for or, subject to
applicable law, to postpone payment for Shares upon the occurrence of any of the
conditions specified in Section 5 hereof by giving oral or written notice of
such termination of postponement to the Paying Agent and making a public
announcement thereof. The Company's reservation of the right to delay payment
for Shares which it has accepted for payment is limited by Rule 13e-4(f)(5)
promulgated under the Exchange Act, which requires that the Company must pay the
consideration offered or return the Shares tendered promptly after termination
or withdrawal of a tender offer. Subject to compliance with applicable law, the
Company further reserves the right, in its sole discretion, and regardless of
whether any of the events set forth in Section 5 shall have occurred or shall be
deemed by the Company to have occurred, to amend the Offer in any respect
(including, without limitation, by decreasing or increasing the consideration
offered in the Offer to holders of Shares or by decreasing or increasing the
number of Shares being sought in the Offer). Amendments to the Offer may be made
at any time and from time to time effected by public announcement thereof, such
announcement, in the case of an extension, to be issued no later than 9:00 a.m.,
New York City time, on the next business day after the last previously scheduled
or announced Expiration Date. Any public announcement made pursuant to the Offer
will be disseminated promptly to shareholders in a manner reasonably designated
to inform shareholders of such change. Without limiting the manner in which the
Company may choose to make a public announcement, except as required by
applicable law, the Company shall have no obligation to publish, advertise or
otherwise communicate any such public announcement other than by making a
release to the Dow Jones News Service.
If the Company materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer, the
Company will extend the Offer to the extent required by Rules 13e-4(d)(2) and
13e-4(e)(2) promulgated under the Exchange Act. These rules require that the
minimum period during which an offer must remain open following material changes
in the terms of the Offer or information concerning the Offer (other than a
change in price or a change in percentage of securities sought) will depend on
the facts and circumstances, including the relative materiality of such terms or
information. If (i) the Company increases or decreases the price to be paid for
Shares or the number of Shares being sought in the Offer and, in the event of an
increase in the number of Shares being sought, such increase exceeds 2% of the
outstanding Shares, and (ii) the Offer is scheduled to expire at any time
earlier than the expiration of a period ending on the tenth business day from,
and including, the date that such notice of an increase or decrease is first
published, sent or given in the manner specified in this Section 14, the Offer
will be extended until the expiration of such period of ten business days.
15. FEES AND EXPENSES.
The Company has not retained any financial advisor, dealer manager or
information agent in connection with the Offer.
The Company has retained American Stock Transfer & Trust Company to act as
the Paying Agent. The Paying Agent may contact holders of Shares by mail,
telephone, telegraph and personal interviews and may request brokers, dealers
and other nominee shareholders to forward materials relating to the Offer to
beneficial owners. The Paying Agent will receive reasonable and customary
compensation for services, will be reimbursed by the Company for certain
reasonable out-of-pocket expenses and will be indemnified against certain
liabilities in connection with the Offer, including certain liabilities under
the federal securities laws.
28
<PAGE>
No fees or commissions will be payable to brokers, dealers or other persons
(other than fees to the Paying Agent as described above) for soliciting tenders
of Shares pursuant to the Offer. The Company, however, upon request, will
reimburse brokers, dealers and commercial banks for customary mailing and
handling expenses incurred by such persons in forwarding the Offer and related
materials to the beneficial owners of Shares held by any such person as a
nominee or in a fiduciary capacity. No broker, dealer, commercial bank or trust
company has been authorized to act as the agent of the Company, or the Paying
Agent for purposes of the Offer. The Company will pay or cause to be paid all
stock transfer taxes, if any, on its purchase of Shares except as otherwise
provided in Section 5 and in Instruction 7 in the Letter of Transmittal.
16. MISCELLANEOUS.
The Company is not aware of any jurisdiction where the making of the Offer
is not in compliance with applicable law, except that under "blue sky" laws of
certain states, the Notes may not be issued without registration thereof.
Shareholders residing in such states may only accept the 50% Offer. The 80%
Offer is not made in such states. If the Company becomes aware of any
jurisdiction where the making of the Offer is not in compliance with any valid
applicable law, the Company will make a good faith effort to comply with such
law. If, after such good faith effort, the Company cannot comply with the such
law, the Offer will not be made to (nor will tenders be accepted from or on
behalf of) the holders of Shares residing in such jurisdiction. In any
jurisdiction the securities or blue sky laws of which require the Offer to be
made by a licensed broker or dealer, the Offer is being made on the Company's
behalf by the Paying Agent or one or more registered brokers or dealers licenses
licensed under the laws of such jurisdiction.
Pursuant to Rule 13e-4 of the General Rules and Regulations under the
Exchange Act, the Company has filed with the Commission an Issuer Tender Offer
Statement on Schedule 13E-4 which contains additional information with respect
to the Offer. Such Schedule 13E-4, including the exhibits and any amendments
thereto, may be examined, and copies may be obtained, at the same places and in
the same manner as is set forth in Section 9 with respect to information
concerning the Company.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION TO MAKE ANY
REPRESENTATION ON BEHALF OF THE COMPANY OR THE PAYING AGENT IN CONNECTION WITH
THE OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED
LETTER OF TRANSMITTAL IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE PAYING AGENT.
TRIDENT ROWAN GROUP, INC.
P.O. Box 856
107 Monmouth Street
Red Bank, NJ 07701
September 25, 1996
29
<PAGE>
Facsimile copies of the Letter of Transmittal will be accepted from
Eligible Institutions. The Letter of Transmittal and certificates for Shares and
any other required documents should be sent or delivered by each shareholder or
his broker, dealer, commercial bank, trust company or nominee to the Paying
Agent at its address set forth below. Any questions or requests for assistance
or additional copies of the Offer to Purchase, the Letter of Transmittal or the
Notice of Election may be directed to the Paying Agent at the telephone numbers
and location listed below. Shareholders may also contact their local broker,
dealer, commercial bank, trust company or nominee for assistance concerning the
Offer.
Paying Agent for the Offer is:
AMERICAN STOCK TRANSFER & TRUST COMPANY
By Mail: By Hand:
American Stock Transfer & Trust Company American Stock Transfer & Trust Company
40 Wall Street, 46th Floor 40 Wall Street, 46th Floor
New York, NY 10005 New York, NY 10005
Telephone:
718-921-8200
By Overnight Courier:
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, NY 10005
30
Exhibit (a)(1)
NOTICE OF ELECTION
to accompany a Letter of Transmittal
and Certificates for Shares of
Common Stock
of
TRIDENT ROWAN GROUP, INC.
when submitted pursuant to an Election
in connection with its Stock Repurchase Program
for up to a maximum of 1,260,684 shares
of Common Stock at a repurchase price of $12.26 per share.
This Notice of Election and the accompanying Letter of Transmittal are to
be completed by stockholders of Trident Rowan Group, Inc. (the "Company")
tendering shares of the Company's common stock, $.01 par value (the "Shares"),
in connection with the Company's program to repurchase a maximum of 1,260,684
Shares (the "Stock Repurchase Program"). Stockholders should refer to the Letter
of Transmittal and to the Company's Offer to Purchase (the "Offer to Purchase"),
dated September 25, 1996, for a comprehensive description of the Stock
Repurchase Program and for detailed instructions on the procedure for tendering
Shares.
ELECTION OPTIONS
The Company is making two mutually exclusive offers to each public
shareholder of record: (a) to purchase up to 80% of such shareholder's holdings
for a combination of cash and non-negotiable promissory notes aggregating $12.26
per share (the "80% Offer"), or (b) to purchase up to 50% of such shareholder's
holdings for $12.26 in cash (the "50% Offer"). A shareholder, upon tendering
shares, must make an election (the "Election") as to which of the two offers the
shareholder desires to accept. The two offers are mutually exclusive and, unless
withdrawn, the Election precludes the shareholder from tendering additional
shares under either offer.
A. The 80% Offer. All Shares purchased by the Company under the 80% Offer
will be purchased for a repurchase price of $12.26 (the "Purchase Price"), net
to the seller as follows: an amount of cash as the Board of Directors of the
Company shall have determined upon the expiration of the Stock Repurchase
Program, which shall not be less than $8.58 per Share (the "Cash Portion"), plus
an unsecured non-negotiable Promissory Note of the Company (the "Note"), payable
on the second anniversary of its issuance, in the principal amount equal to the
difference between the Purchase Price and the Cash Portion, plus interest
thereon at the rate of 8% per annum. Interest shall be paid on the first
anniversary of the Note and at maturity. The Company may prepay the Note in
whole or in part prior to its payment date. If the Note is prepaid in whole, and
not in part, prior to the expiration of nine months from its issuance, the
interest rate of the Note, from its date of issuance, shall be 5% per annum, and
not 8% per annum. Such Note shall be non-transferable and shall be required to
be held until paid in full. There is no market for the Notes and none will be
established by the Company.
B. The 50% Offer. All shares purchased by the Company under the 50% Offer
will be purchased at the Purchase Price, in cash, net to the seller.
See "The Offer to Purchase-Introduction" and "The Offer to Purchase - The
Offer, Number of Shares; Proration" for a complete description of the 50% Offer
and the 80% Offer.
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND
CONDITIONS OF THE REPURCHASE PROGRAM
1. Election Option; Letter of transmittal. The Election must be made by
checking one of the two boxes set forth below. The 50% Offer and the 80% Offer
are mutually exclusive. This Notice of Election must be accompanied by a
properly completed and duly executed Letter of Transmittal and the
certificate(s) representing the Shares tendered.
2. Withdrawal of Election. This Notice of Election may be withdrawn by
notifying the Paying Agent in writing at the address set forth below at any time
before October 23, 1996 (the "Expiration Date") in accordance with the
instructions set forth in Section 3 of the Offer to Purchase. If the tendering
shareholder desires to participate in the Stock Repurchase Program after
withdrawal of the Notice of Election, a new Notice of Election, accompanied by a
properly completed and duly executed Letter of Transmittal and certificate(s)
representing the Shares tendered must be submitted prior to the Expiration Date.
ELECTION
Tendering shareholders must check one of the two boxes below:
/ / The undersigned hereby elects to tender Shares pursuant to the 50%
Offer. The undersigned represents that it is not tendering more than
50% of the Shares owned by it beneficially and of record.
/ / The undersigned hereby elects to tender Shares pursuant to the 80%
Offer. The undersigned represents that it is not tendering more than
80% of the Shares owned by it beneficially and of record.
If the tendering shareholder is the owner of record on behalf of more than one
beneficial owner, the tendering shareholder must check the following box.
/ / The undersigned certifies that the number of Shares tendered does not
exceed the sum of all tenders requested by all beneficial holders on
whose behalf the undersigned acts as owner of record, all of which
beneficial owners have duly elected to participate in the Stock
Repurchase Program in accordance with its terms. The undersigned
further certifies that the number of Shares tendered, with respect to
each such beneficial owner, does not exceed the number of Shares
specified in such beneficial owner's tender instructions.
2
<PAGE>
PLEASE SIGN HERE
x___________________________________, ________________________________
x___________________________________, ________________________________
Signature(s) of Owner(s) Date
Area Code and Telephone No.__________
(Must be signed by the registered holder(s) exactly as the name(s)
appear(s) on the certificate(s) or by person(s) authorized to become registered
holder(s) by the certificates and documents transmitted herewith. If signature
is by a trustee, executor, administrator, guardian, officer or other person
acting in a fiduciary or representative capacity, please set forth the following
information.
Name(s): __________________________________
__________________________________
(Please Type or Print)
Capacity: __________________________________
Address: __________________________________
__________________________________
(Include Zip Code)
SIGNATURE GUARANTEE
(If required by Instruction 4)
Signature(s) Guaranteed by
an Eligible Institution: ________________________________________________
(Authorized Signature)
________________________________________________
(Title)
________________________________________________
(Name of Firm)
________________________________________________
(Address)
________________________________________________
(Area Code and Telephone No.)
Dated:_________________________________________
The Paying Agent is:
AMERICAN STOCK TRANSFER & TRUST COMPANY
For Information Call:
(718) 921-8200
By Mail, Hand or Overnight Courier
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
3
Exhibit (a)(3)
LETTER OF TRANSMITTAL
For Certificates Representing Shares of
Common Stock, Par Value $.01 Per Share,
of
Trident Rowan Group, Inc.
Surrendered for Payment of $12.26 Per Share
Pursuant to the Stock Repurchase Program
of
Trident Rowan Group Inc.
-----------
The Paying Agent is:
AMERICAN STOCK TRANSFER & TRUST COMPANY
For Information Call:
(718) 921-8200
By Mail, Hand or Overnight Courier
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
Delivery of this instrument to an address other than as set forth above
will not constitute a valid delivery. The instructions accompanying this Letter
of Transmittal should be read carefully before this Letter of Transmittal is
completed.
This Letter of Transmittal together with a Notice of Election are to be
completed, signed by each "holder" (as hereinafter defined) of outstanding
shares of common stock, $.01 par value per share (the "Shares"), of Trident
Rowan Group, Inc. (the "Company") represented by the certificates surrendered
herewith for payment and mailed or delivered, together with all such
certificates, to American Stock Transfer & Trust Company (the "Paying Agent").
See Instructions. This Letter of Transmittal is to be used by holders if: (i)
certificates representing the Shares are to be physically delivered to the
Paying Agent herewith by the holder or (ii) tender of the Shares is to be made
by book-entry transfer to the Paying Agent's account at any of the "Book-Entry
Transfer Facilities" (as hereinafter defined). Delivery of documents to a
Book-Entry Transfer Facility does not constitute deliver to the Paying Agent.
The term "holder" with respect to the Stock Repurchase Program (as
hereinafter defined) means any person: (i) in whose name Shares are registered
on the books of the Company or any other person who has obtained a properly
completed stock power from the registered Share holder; or (ii) whose Shares are
held of record by a Book-Entry Transfer Facility who desires to deliver such
Shares by book-entry at such facility.
The instructions included with this Letter of Transmittal must be followed.
Questions and requests for assistance or for additional copies of the Offer to
Purchase (as hereinafter defined), this Letter of Transmittal and the Notice of
Election should be directed to the Paying Agent. See Instruction 11 herein.
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF CERTIFICATE(S) SURRENDERED
(See Instructions)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Name(s) and Address(es) of Registered Holder(s) Certificate(s) Surrendered
(Please fill in exactly as name(s) appear(s) on certificate(s)) (Attached additional sheet if necessary)
- ------------------------------------------------------------------------------------------------------------------------------------
Number
of Shares
Certificate represented by Shares Tendered
Number(s)* Certificate(s) (if less than all)**
--------------------------------------------------------------
______________________________________________________________
______________________________________________________________
______________________________________________________________
Total Shares
____________________________________________________________________________________________________________________________________
</TABLE>
If the space provided is inadequate, list the certificate numbers and
number of shares on a separate signed schedule and affix the list to this Letter
of Transmittal. All tenders must be in whole Shares.
- ----------
* Need not be completed by holders tendering by book-entry transfer.
** Unless indicated in the column labeled "Shares Tendered," any tendering
holder of Shares will be deemed to have tendered the number of Shares
represented by the column labeled "Number of Shares Represented by
Certificate(s)." The aggregate number of Shares tendered, however, cannot
exceed 50%, or 80% (depending on the election made by the tendering holder)
of all Shares owned by the holder.
2
<PAGE>
SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby surrenders to the Paying Agent the number of Shares
listed above represented by the certificates (the "Certificates") listed above,
which Shares are being tendered for a repurchase price of $12.26 per Share (the
"Repurchase Price"), which Repurchase Price may, depending upon the number of
Shares tendered and the election option chosen by the tendering holder in the
Notice of Election, be paid (the "Repurchase Payment") all in cash or with a
combination of cash and the Company's 8% promissory notes (the "Notes"), all
upon the terms and subject to the conditions set forth in the accompanying Offer
to Purchase, dated as of September 25, 1996 (the "Offer to Purchase"), to which
the Company is a party, receipt of which Offer to Purchase is hereby
acknowledged. The Offer to Purchase, this Letter of Transmittal and the Notice
of Election together constitute the Company's program to repurchase ("Stock
Repurchase Program") a maximum of 1,260,684 Shares.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares and
that the Company will acquire good and unencumbered title thereto, free and
clear of all liens, charges and encumbrances, and that the same will not be
subject to any adverse claim. The undersigned hereby acknowledges that delivery
of the Shares will be effected and risk of loss and title to such Shares will
pass only upon proper delivery of the Shares to the Paying Agent. The
undersigned hereby further represents that any Notes acquired as part of the
Repurchase Payment will have been acquired in the ordinary course of business of
the holder receiving such Notes, that the holder does not have any arrangement
or understanding with any person to participate in the distribution of such
Notes and that the holder is not an "affiliate", as defined in Rule 405 under
the Securities Act of 1933 (the "Securities Act"), of the Company or any of its
subsidiaries. The undersigned represents that it is not engaged in, and does not
intend to engage in, a distribution of the Notes. The undersigned will, upon
request, execute and deliver any additional documents deemed by the Paying Agent
or the Company to be necessary or desirable to complete the assignment, transfer
and purchase of the Shares tendered hereby.
The undersigned hereby irrevocably constitutes and appoints the Paying
Agent the true and lawful agent and attorney-in-fact of the undersigned with
respect to the Shares and any and all rights represented thereby with full power
of substitution and resubstitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest) to deliver the Shares, together with
all accompanying evidences of transfer and authenticity, to the Company for
cancellation upon receipt by the Paying Agent, as the agent of the undersigned,
of the Repurchase Payment therefor. The authority herein conferred or agreed to
be conferred will not be affected by, and will survive, the death or incapacity
of the undersigned, and any obligation of the undersigned hereunder will be
binding upon the heirs, personal representatives, successors and assigns of the
undersigned.
The undersigned understands that surrender of the Shares for payment of the
Repurchase Payment will not be deemed to have occurred unless and until the
Paying Agent has received the Certificates, this Letter of Transmittal (or a
facsimile hereof) and the Notice of Election, properly completed and duly
executed, together with all accompanying evidence of authority in form
satisfactory to the Company (which may delegate such power in whole or in part
to the Paying Agent). All questions as to the validity, form and eligibility of
any surrender of Certificates hereunder will be determined by the Company, which
determination shall be final and binding on all parties. The undersigned hereby
agrees, upon request, to execute and deliver any additional documents deemed by
the Paying Agent or the Company to be necessary or desirable in connection with
the surrender of the Certificates.
Subject to the proper completion of this Letter of Transmittal and the
Notice of Election, the Paying Agent is hereby authorized to issue the check and
any Notes to be issued in exchange for the Shares surrendered herewith in the
name of the undersigned. Unless otherwise indicated under "Special Delivery
Instructions," the Paying Agent is hereby authorized to mail the check to be
issued in exchange for the Certificates surrendered herewith to the undersigned
at the address set forth below.
3
<PAGE>
- --------------------------------------------------------------------------------
PLEASE SIGN HERE
(Also Complete Substitute W-9 Below)
(See Instructions 1, 3, and 5 and the following paragraph)
X___________________________________________________, __________________________
X___________________________________________________, __________________________
Signature(s) of Owner(s) Date
Area Code and Tel. No.:______________________
(Must be signed by the registered holder(s) exactly as the
name(s) appear(s) on the Certificate(s) or by person(s) authorized to become
registered holder(s) by the Certificates and documents transmitted herewith. If
signature is by a trustee, executor, administrator, guardian, officer or other
person acting in a fiduciary or representative capacity, please set forth the
following information. See Instructions 2 and 5).
Name(s): __________________________________________________
__________________________________________________
(Please Type or Print)
Capacity: __________________________________________________
Address: __________________________________________________
__________________________________________________
(Include Zip Code)
SIGNATURE GUARANTEE
(If required by Instruction 4)
Signature(s) Guaranteed by
an Eligible Institution: __________________________________________________
(Authorized Signature)
__________________________________________________
(Title)
__________________________________________________
(Name of Firm)
__________________________________________________
(Address)
__________________________________________________
(Area Code and Telephone No.)
Dated:____________________________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(Also Complete Substitute W-9 Below)
(See Instructions 1, 4 and 6)
To be completed ONLY if the check and Notes to be issued in exchange for the
Shares surrendered herewith is to be sent to someone other than the undersigned
or to the undersigned at an address other than that above.
Mail Check to:
Name: __________________________________________________
(Please Print)
Address: __________________________________________________
__________________________________________________
(Include Zip Code)
- --------------------------------------------------------------------------------
4
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS
OF THE REPURCHASE PROGRAM
1. Delivery of this Letter of Transmittal, Notice of Election and the
Certificate(s). In accordance with Instructions set forth herein, the
Certificate(s), together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), with any required signature guarantees and
any other documents required by this Letter of Transmittal, and a properly
completed and duly executed Notice of Election must be received by the Paying
Agent at its address set forth herein in order to make an effective delivery.
The number of shares tendered by this Letter of Transmittal may not exceed the
number of Shares which may be tendered pursuant to the election option indicated
by the holder on the Notice of Election.
2. Tender by Holder. Only a holder of Shares may tender such shares in the
Stock Repurchase Program Offer. Any beneficial holder of Shares who is not the
registered holder and who wishes to tender should arrange with the registered
holder to execute and deliver this Letter of Transmittal and a Notice of
Election on his or her behalf or must, prior to completing and executing this
Letter of Transmittal and a Notice of Election and delivering his or her Shares,
either make appropriate arrangements to register ownership of the Shares in such
beneficial holder's name or obtain a properly completed stock power from the
registered holder.
3. Partial Tenders. Tender of Shares will be accepted only in whole share
amounts. If less than the entire number of Shares represented on a Certificate
is tendered, the tendering holder must fill in the number of Shares tendered in
the fourth column of the box entitled "Description of Certificates Surrendered"
above. All of the Shares delivered to the Paying Agent will be deemed to have
been tendered unless otherwise indicated. If less than all of the Shares
represented by a Certificate are tendered, then a Certificate representing
Shares not tendered will be sent to the holder at his or her registered address,
unless a different address is provided in the appropriate box on this Letter of
Transmittal, promptly after the Shares are accepted for exchange. See
Instruction 1 as to the aggregate number of Shares which may be tendered.
The method of delivery of the Certificate(s) and all other required
documents is at the election and risk of the surrendering stockholder. If
delivery is by mail, certified or registered mail with return receipt requested,
properly insured, is recommended.
4. Guarantee of Signature(s). No signature guarantee is required on this
Letter of Transmittal if (i) this Letter of Transmittal is signed by the
registered holder(s) of the Shares surrendered herewith, unless such holder(s)
has completed the box entitled "Special Delivery Instructions" above or (ii)
such Shares are tendered for the account of a financial institution that is a
member in good standing of a registered national securities exchange, or of the
National Association of Securities Dealers, Inc., a commercial bank or trust
company having an office, branch or agency in the United States or an eligible
guarantor institution (bank, stockbroker, savings and loan association or credit
union with membership in an approved signature guarantee medallion program),
pursuant to Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934
(each an "Eligible Institution"). In all other cases, all signatures on this
Letter of Transmittal must be guaranteed by an Eligible Institution.
5. Signature(s) on Letter of Transmittal, Notice of Election, Certificates
and Stock Powers; Endorsement(s).
(a) If this Letter of Transmittal is signed by the registered holder(s) of
the Shares surrendered hereby, the signature(s) must correspond with the name(s)
as written on the face of the Certificate(s) without alteration, enlargement or
any change whatsoever.
(b) If any of the Shares are held of record by two or more joint holders,
all such persons must sign this
5
<PAGE>
Letter of Transmittal.
(c) If any of the Shares are registered in different names on several
Certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal and any necessary accompanying documents as there are
different registrations of Shares.
(d) If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares, the Certificate(s) must be endorsed or
accompanied by appropriate stock powers and, in either case, signed exactly as
the name(s) of the registered holder(s) appear(s) on the Certificate(s).
Signatures on any such Certificate or stock power must be guaranteed by an
Eligible Institution (unless signed by an Eligible Institution).
(e) If this Letter of Transmittal or any Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to the Paying Agent of the authority of such person to so act must
be submitted with this Letter of Transmittal.
(f) The foregoing instructions are also applicable to the Notice of
Election.
6. Special Delivery Instructions. If the check and Note to be issued for
the Shares surrendered herewith is to be sent to someone other than the person
signing this Letter of Transmittal or to the person signing the Letter of
Transmittal at an address other than that set forth below such person's
signature, the box of this Letter of Transmittal entitled "Special Delivery
Instructions" should be completed.
7. Substitute Form W-9. The surrendering holder is required to provide the
Paying agent with a correct Taxpayer Identification Number ("TIN") on Substitute
Form W-9, which is provided under "Important Tax Information" below, and to
certify that the holder is not subject to backup withholding. Failure to provide
the information on the Substitute Form W-9 may subject such person to 31%
federal income tax withholding on the payment of the Merger Payment. The box in
Part 2 of the Substitute Form W-9 may be checked if the tendering holder has not
been issued a TIN and has applied for a TIN or intends to apply for a TIN in the
near future. If the box in Part 2 is checked and the Depositary is not provided
with a TIN within 60 days, the Depositary will withholder 31% on all payments of
the Merger Payment thereafter until a TIN is provided to the Paying Agent.
8. Transfer Taxes. If the Shares are registered in the name of any
person(s) other than the person(s) signing this Letter of Transmittal, and
accordingly the Repurchase Payment is to be sent to person(s) signing this
Letter of Transmittal and not the registered holder(s) of the Shares, the amount
of any transfer taxes (whether imposed on the registered holder(s) or the
person(s) signing this Letter of Transmittal) payable on account of the transfer
to the person(s) signing this Letter of Transmittal will be deducted from the
Repurchase Payment unless satisfactory evidence of payment of such taxes, or
exemption therefrom, is submitted. Except as provided in this Instruction 8, it
will not be necessary for transfer tax stamps to be affixed to the
Certificate(s) tendered herewith or funds to cover such stamps to be provided
with this Letter of Transmittal.
9. Waiver of Conditions. The Company reserves the absolute right to amend,
waive or modify specified conditions in the Stock Repurchase Program in the case
of any Shares tendered.
10. Mutilated, Lost, Stolen or Destroyed Certificates. In the event that
the holder is unable to deliver to the Paying Agent Certificate(s) due to the
loss, theft or destruction of such Certificate(s), this Letter of Transmittal
may nevertheless be submitted, together with any other documents that may be
required, subject to acceptance at the discretion of the Company, provided,
among other requirements, that the stockholder agrees to indemnify the Company
by signing a form of indemnity agreement acceptable to the Company or posting
such security as may be required.
11. Request for Assistance or Additional Copies. Questions and request for
assistance or additional copies of this Letter of Transmittal, the Offer to
Purchase and the Guidelines for Certification of Taxpayer Identification
6
<PAGE>
Number on Substitute Form W-9 should be directed to the Paying Agent at the
telephone number and address set forth herein.
IMPORTANT TAX INFORMATION
Backup Withholding. Federal income tax law requires that a stockholder
surrendering Shares for payment provide the Paying Agent with such stockholder's
correct TIN on Substitute Form W-9, which in the case of a surrendering
stockholder who is an individual is his or her social security number, and to
certify that the stockholder is not subject to backup withholding. If the Paying
Agent is not provided with the correct TIN, such stockholder may be subject to a
$50 penalty imposed by the Internal Revenue Service (the "IRS"). In addition,
payments that are made to such stockholder may be subject to 31% backup
withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to backup withholding and reporting
requirements and should indicate their status by writing "exempt" across the
face of the Substitute Form W-9. In order for a foreign individual to qualify as
an exempt recipient, the stockholder must submit a Form W-8, signed under
penalties of perjury, attesting to that individual's exempt status. A Form W-8
can be obtained from the Paying Agent. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for more
instructions.
If backup withholding applies, the Paying Agent is required to withhold 31%
of any payment made to the stockholder. Backup withholding is not an additional
tax. Rather, the federal income tax liability of persons subject to backup
withholding will be reduced by the amount of such withholding. If backup
withholding results in an overpayment of taxes, a refund may be obtained, from
the IRS.
Purpose of Substitute Form W-9. To prevent backup withholding, each
stockholder surrendering Shares must provide such stockholder's correct TIN by
completing the form below, certifying that the TIN provided on the Substitute
Form W-9 is correct (or that such stockholders is awaiting a TIN) and that (i)
the stockholder has not been notified by the IRS that the stockholder is subject
to backup withholding as a result of a failure to report all interest or
dividends or (ii) the IRS has notified the stockholder that the stockholder is
no longer subject to backup withholding.
The stockholder is required to give the TIN (i.e., the social security
number or employer identification number) of the record owner of the Shares. If
the Shares are registered in more than one name or are not registered in the
name of the actual owner, consult the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for information on which
TIN to report. The box in Part 2 of the Substitute Form W-9 may be checked if
you have not been issued a TIN and have applied for a TIN or intend to apply for
a TIN in the near future. If the box in Part 2 is checked and the Paying Agent
is not provided with a TIN within 60 days, backup withholding will begin and
continue until you furnish your TIN to the Paying Agent.
Foreign Shareholders. Proceeds payable to foreign shareholders will, in any
event, be subject to 30% withholding unless such shareholder furnishes a
completed Form 1001 claiming the benefit of a reduced rate of taxation under an
income tax treaty with such shareholder's country of residence, or a completed
Form 4224. Foreign shareholders should consult their foreign tax advisors as to
the appropriateness of submitting either form.
7
<PAGE>
<TABLE>
<CAPTION>
PAYOR'S NAME: AMERICAN STOCK TRANSFER & TRUST COMPANY
- ------------------------------------------------------------------------------------------------------
<S> <C>
SUBSTITUTE Part 1-PLEASE PROVIDE YOUR TIN IN TIN:_____________________
Form W-9 THE BOX AT RIGHT AND CERTIFY BY
SIGNING AND DATING BELOW Social Security Number or
Employee Identification
Number
--------------------------------------------------------------
Department of the Treasure Part 2 -
Internal Revenue Service Awaiting TIN o
--------------------------------------------------------------
Payor's Request for Taxpayer
Identification Number(TIN) CERTIFICATION-UNDER THE PENALTIES OR PERJURY, I CERTIFY THAT
and Certification (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 (2) I am not subject to backup withholding
either because I have not been notified by the Internal
Revenue Service (the "IRS") that I am subject to backup
withholding as a result of a failure to report all interest
or dividends or the IRS has notified me that I am no longer
subject to backup withholding. (You must cross out Item (2)
above if you have been notified by the IRS that you are
subject to backup withholding because of underreporting
interest or dividends on your return. However, if after being
notified by the IRS that you were subject to backup
withholding you received another notification from the IRS
that you are no longer subject to backup withholding, do not
cross out Item (2).)
Signature:___________________________ Date:_____________
- ------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE STOCK
REPURCHASE PROGRAM. 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 2 OF SUBSTITUTE FORM W-9
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAX IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number within 60 days, 31% of all
reportable payments made to me thereafter will be withheld until I provide a
number
______________________________________ ____________________
Signature Date
- --------------------------------------------------------------------------------
8
EXHIBIT (a)(4)
Dear Shareholders:
Following your Company's Annual Meeting of Shareholders held on August 22, 1996,
at which our name had been changed to Trident Rowan Group, Inc., our Company is
initiating its planned stock repurchase program. Terms and conditions of that
program are contained in the attached document.
As stated in the Company's recently issued Proxy Material, and reiterated at the
Annual Meeting of Shareholders, Management recommends against shareholders
participating in the repurchase program. Why?
We say this for two reasons: First, Management firmly believes that the
prospects for your Company are good. Second, we believe the value of Trident
Rowan's business is substantially greater than that which is reflected in the
current market price for our shares.
Looking at prospects for Trident Rowan Group, we would like you to consider the
following facts:
FACT # 1:
Senior management has developed and has begun to implement a new corporate
mission for the Company. Central to that strategy Trident Rowan Group: 1)
undertakes management interventions in troubled businesses and businesses
in transition, with the specific objective of enabling them to realize
enhanced value; 2) seeks to turn around client companies and to enhance
their value by utilizing the professional leadership provided by its
network of talented, experienced managers, by selectively using its own
capital, and by leveraging its access to the international financial
markets; and 3) utilizes client engagements to identify suitable investment
opportunities which, through the application of professional management
and/or an infusion of capital, can provide superior returns to its
shareholders.
Trident Rowan Group's opportunistic acquisition of LITA S.p.A.--a steel
tubing company--following a Temporary Integrated Management (TIM)
engagement, is strong evidence of the new strategy in action. In the first
half of 1996, tons produced have increased 42% versus the same period last
year.
FACT # 2:
Moto Guzzi, under TIM management, represents a dramatic turnaround. As of
the end of this year's second quarter, Moto Guzzi achieved an operating
profit for the first time in more than a decade; revenues and unit sales
have been increased more than 60% since 1994. In addition, production is up
81% since TIM has managed Moto Guzzi.
<PAGE>
FACT # 3
The Company has been able to attract an entirely new senior management team
which is highly professional and highly motivated. This group, by virtue of
a stock option program which only permits option holders to realize value
when the Company's share price exceeds $12.26, has a major incentive to
undertake steps which will contribute to an increase in the value of the
Company's shares by increasing revenues and earnings.
FACT # 4
Trident Rowan Group has announced an agreement to acquire The Carey Winston
Company, the leading real estate services company in the Washington, D.C.
metropolitan area. Carey Winston -- which has posted a profit for each of
the last five years, and expects to generate annual revenues of $35 million
in 1996 --is poised for significant growth in the Mid-Atlantic region. In
addition, Carey Winston will also enable Trident Rowan Group to expand its
mission and activities to include the management of real estate assets in
Europe.
As for the value of the Trident Rowan Group business, it is worth noting one key
fact. The equity value of the investment in Moto Guzzi in the TRG balance sheet
is approximately $6.3 million. Based on recent discussions with both merchant
and investment bankers, who have expressed an interest either in investing in or
acquiring Moto Guzzi, the current value of Moto Guzzi on a stand-along basis
could exceed $20 million. There cannot be any guarantee that such value could be
realized by the Company; in particular, such indicative values were subject to
due diligence and are dependent on the availability of significant finance for
the further expansion of Moto Guzzi. Nevertheless, we consider that such
discussions validate our belief that the value of Moto Guzzi has been
significantly enhanced under TIM's mangement and we also believe that this
enhancement of value is not fully reflected in the TRG share price.
We believe these are compelling facts, and represent compelling reasons to argue
for a bright future for Trident Rowan Group, Inc. Accompanying this letter are
additional materials relating to various aspects of Trident Rowan Group which
may assist you in making your decision.
As a final note, the Company would like you to know that comments shared with
Management after our Annual Meeting of shareholders in New York on August 22,
and after a shareholders information meeting, held in Cleveland the following
day, reflect a generally positive reaction to our new management, corporate
mission and strategy, and to the impending acquisition of Carey Winston.
Many thanks for your careful review, and thoughtful consideration of the facts.
Sincerely,
Howard E. Chase
President
EXHIBIT (a)(5)
TRIDENT ROWAN GROUP, INC.
THE COMPANY:
Trident Rowan Group has a new mission and a new organizational structure. Its
shares, which continue to be quoted on NASDAQ, have been publicly traded since
1963, originally under the name of Rowan Industries Inc.
and subsequently as De Tomaso Industries, Inc.
Trident Rowan Group includes companies with expertise in managing industrial
assets, enhancing the value of real estate properties, and providing select,
corporate financial services. The company's executives reflect a broad range of
managerial and professional skills.
Trident Rowan Group is a Maryland, U.S. corporation, which, in addition to its
U.S. operations, owns operating subsidiaries in Italy.
THE MISSION:
Trident Rowan Group undertakes management interventions in troubled businesses
and businesses in transition, with the specific objective of enabling them to
realize enhanced value.
Trident Rowan Group seeks to turn around client companies and to enhance their
value by utilizing the professional leadership provided by its network of
talented, experienced managers, by selectively using its own capital, and by
leveraging its access to the international financial markets.
Trident Rowan Group also utilizes client engagements to identify suitable
investment opportunities which, through the application of professional
management and/or an infusion of capital, can provide superior returns to its
shareholders.
<PAGE>
THE STRUCTURE:
Trident Rowan Group operates in the following areas:
management intervention, through TIM S.p.A, which analyzes all operational
aspects of client companies and provides management services;
merchant banking, through its Merchant Banking Division, which analyzes and
structures the financial aspects of investment opportunities provided by client
companies;
Upon consummation of the Carey Winston transaction, Trident Rowan Group will
also operate in real estate services. Carey Winston is the leading real estate
services provider in the Washington, D.C. metropolitan area, and a company that
has begun to apply its expertise to the European real estate market, as well.
THE RESULTS:
Trident Rowan Group manages its own portfolio companies producing the following
results:
Moto Guzzi: Gross margin has more than doubled in one and a half years of
management, and this subsidiary has achieved an operating profit for the first
time in more than a decade;
LITA: In the first half of 1996, tons produced have increased 42% versus the
same period last year.
Carey Winston: whose acquisition by Trident Rowan is expected to be completed
this year, has implemented an acquisition plan and increased revenues by
approximately 20% through its first acquisition.
THE EXIT:
Trident Rowan Group's investments in portfolio companies are made with a
deliberate exit strategy in place, developed with the combined skills of the
Merchant Banking Division and TIM's managers. The objective of this planning is
to provide superior returns for TRG and its shareholders.
Trident Rowan Group's international profile gives it access to the world's major
capital markets and strategic buyers.
<PAGE>
PROSPECTS:
Trident Rowan Group is planning a public offering of common shares to build its
working capital and to increase the number of shares in the public float. The
capital raised will be utilized primarily to fund the overall mission of the
Company.
Trident Rowan Group operates in the U.S. and in Italy. Its strategy is to expand
into those European countries where it can place, opportunistically,
professional management talent and financial resources.
SUMMARIZED FINANCIAL POSITION (ACCORDING TO US GAAP)
Billions of Lire Millions of US Dollars
--------------------- ----------------------
30/6/95 31/12/95 30/6/95 31/12/95
Unaudited Unaudited
Cash and marketable securities 23.0 24.1 15.2 15.9
Accounts receivable 45.9 39.7 30.3 26.2
Inventory 35.9 30.7 23.7 20.3
Property, plant & equipment 9.8 7.7 6.5 5.1
Real estate for sale 22.0 34.2 14.5 22.6
Other assets 41.2 46.3 27.2 30.6
Total Assets 177.8 182.8 117.4 120.8
----- ----- ----- -----
Advances from banks 36.0 27.2 23.8 17.9
Other current liabilities 39.9 45.2 26.4 29.9
Long term loans 14.5 18.1 9.6 12.0
Other long term liabilities
& minority interests 26.3 28.6 17.4 18.9
Shares subject to repurchase 12.4 12.5 8.2 8.3
Shareholders equity 48.6 51.2 32.1 33.8
Total liabilities and equity 177.8 182.8 117.4 120.8
----- ----- ----- -----
EXHIBIT (a)(6)
Temporary Integrated Management (TIM)
FUNCTIONS PROVIDED
Chief Executive Officer - Chief Operating Officer - Chief Financial Officer -
Executive Officer - Merger and Acquisition Team Leader - Treasurer -
PROGRAMS DEVELOPED
Corporate Restructuring - Modernization Programs - Reorganization of Marketing
Function - Financial Restructuring - Technological Innovation - Sale of
Companies - Divestiture Programs -Production/Marketing Joint Ventures - Start-up
Operations
BENEFITS DERIVED
Profit Growth - Productivity Improvements - Staff Reductions - Increase of Net
Worth - Management Training/Development - Cross Fertilization of Ideas -
Shortening of Decision-Making Times - Bridging Culture Gaps
"The Approach And Skills Required In The Management Of Change And Crisis
Differ From Those Required In Managing Stable Organizations"
<PAGE>
Temporary Integrated Management (TIM)
TIM provides temporary management for companies facing special problems,
challenges or opportunities. It utilizes its network of experienced manager
associates to fill individual management positions or to provide an entire
temporary management team for its clients.
A Strategic Business Plan, based on the client's specific objectives, provides
the focus for each TIM mandate. The plan also provides the standards towards
which will be measured the performance at the end of the mandate. Since TIM
strongly believes in value-added partnerships with its clients, a significant
portion of TIM's compensation is tied to results obtained by its temporary
managers.
In addition to the services of the individual managers, TIM contributes to the
success of its clients by providing the experience and expertise of its own
professional staff, as well as its partners and its associates.
STRATEGIC PLAN
The Plan is drafted together with the client to serve as a blueprint to manage
the change. It is based on a through understanding of the company, its position
in the industry and the senior management's expectations.
IMPLEMENTATION
The temporary manager is carefully chosen by his specific experience and is
given the powers necessary to implement the Plan in all its aspects according to
a pre-established timetable. He is introduced into the daily operations of the
company and this includes transfer of professional know-how and on-the-job
training.
INTEGRATION
The TIM permanent management team contributes with its multiple experience to
support the implementation, increasing the professional value added to the
company and complementing the work of the temporary manager.
COMPLETION
Once the Plan is brought to a conclusion the temporary manager's mandate ends.
Performance-based compensation is calculated according to the pre-agreed formula
as per the results actually achieved.
EXHIBIT (a)(7)
Moto Guzzi
Moto Guzzi, a major subsidiary of Trident Rowan Group, Inc., is a 75 year old
company which has earned a reputation as one of the elite motorcycle
manufacturers worldwide.
Under the management of Trident Rowan's Temporary Integrated Management (TIM),
Moto Guzzi continues to achieve a dramatic turnaround. As of the end of this
year's second quarter, Moto Guzzi posted an operating profit for the first time
in more than a decade. Further, revenues and unit sales have been increased more
than 60% since 1994.
In addition, as indicated below, the production of Moto Guzzi motor cycles has
doubled since year end 1993.
Production of Moto Guzzi Motor Cycles
[The following chart was represented as a bar graph in the printed material]
[GRAPHIC OMITTED]
Moto Guzzi has also implemented a selective program of component outsourcing,
which has both improved profitability and increased margins. Under TIM
management, the demand for Moto Guzzi motorcycles continues to exceed the
supply, which is not surprising given the company's increased emphasis on
performance and styling.
Today, Moto Guzzi produces four prominent models, all of which will be available
in the important U.S. market. These models are the striking, new V-10 Centauro,
that is being haled as a cross between a "naked" sportsbike and a power cruiser;
a newly refined model called the RS; a fuel-injected version of Moto Guzzi's
highly rated Sport 1100 sportbike; and the fuel-injected version of the
company's best-selling California 1000 cruiser.
<PAGE>
Moto Guzzi has also set ambitious targets for increased sales in the U.S.,
through its acquisition of Moto America, Inc., the exclusive U.S. importer and
distributor of Moto Guzzi motorcycles. In addition, new programs are being
implemented to boost Moto Guzzi sales in the Far East.
Exhibit (a)(8)
The Carey Winston Company
Corporate Profile
The Carey Winston Company, founded in 1942, is the leading commercial real
estate services provider in the Washington, D.C. Metropolitan Area.
Carey Winston, whose mission is to provide ultimate real estate solutions
exceeding the expectations of its clients, has developed into a fully integrated
real estate services organization with core business areas of: property
management, asset management, leasing, investment sales, mortgage banking,
appraisal and real estate advisory services. Within the past year, The Carey
Winston Company has expanded its breadth of services through the acquisition of
a major, Washington, D.C. area real estate consulting and appraisal firm, Delta
Associates, located in Alexandria, Virginia, and through its recent combination
with Barrueta & Associates, located in Washington, D.C. As a result, after the
closing of the latter transaction, Carey Winston will have approximately 525
employees.
Client Services
- ---------------
Commercial Leasing
Property Management
Investment Sales
Commercial Finance
Retail Services
Carey Winston Realty Advisors
CW Creative Equities
Financial & Realty Services, LLC (FRS)
Corporate Resource & Research Group
Delta Associates
1995 Commercial Leasing Figures
- -------------------------------
Licensed leasing agents 70
Number of transactions 922
Square feet leased 7,310,000
Aggregate value $600,000,000
Office Space Leased in 1995
- ---------------------------
556 transactions
3,475,000 square feet leased
$450,000,000
<PAGE>
Industrial Space Leased in 1995
- -------------------------------
281 transactions
3,293,000 square feet leased
$82,000,000
Retail Space Leased in 1995
- ---------------------------
85 transactions
542,000 square feet leased
$68,000,000
Exhibit (a)(9)
DeTomaso Industries, Inc.
President's Report to the Shareholders for:
Second Quarter Ended June 30, 1996
August, 1996
Dear Shareholders:
I am pleased to tell you that this report is the first of an on-going series of
quarterly President's letters that will be sent to all shareholders of record.
These reports will summarize financial results for the period -- in this
instance the second quarter ended June 30, 1996 -- and will address important
company-related events which have occurred since my last letter. This report,
and the ones that follow, represent our strong commitment to respond to your
requests for a more open line of communication with your company.
As for DTI results in the second quarter of 1996, I am pleased to report our
Company achieved a sharp improvement in revenues, up 29%, and a significant
reduction in net loss as compared to the first quarter of this year. More
specifically, in this period DTI reported a loss of Lit. 951 million (US$
620,000*) on net sales revenue of Lit. 25,343 million (US$ 16,510,000), versus a
loss of Lit. 3,404 million (US$ 2,217,590) on net sales revenue of Lit. 23,658
million (US$ 15,059,000) in the first quarter.
The most significant operational development in the second quarter was that Moto
Guzzi achieved an operating profit its first in more than a decade. Further,
unit production of motorcycles rose 21% and the Company benefited from price
increases, averaging 5%. This good news is strong evidence that we are
succeeding in our turnaround at Moto Guzzi. Further increases in sales and
earnings at Moto Guzzi are expected for the balance of the year.
In the category of "breaking news," I am delighted to report that on August 8,
1996, DTI agreed to acquire The Carey Winston Company (CW), Washington, D.C.
area's leading commercial real estate management and services provider, for $8.4
million, of which not less than 80% of the purchase price will be paid in stock,
and not more than 20% will be in cash. This business combination is the
outgrowth of an informal joint venture between DTI and CW which has existed for
the better part of a year. During that time, we have jointly pursued real estate
brokerage and management opportunities in Italy and the U.S. As a result, the
strategic benefits of combining forces became increasingly apparent.
<PAGE>
The transaction will improve Carey Winston's ability to implement its
growth-through-acquisition program in the U.S. Additionally, through DTI's
European relationships, Carey Winston is being provided access to brokerage,
management and other real estate service opportunities in Europe, and
specifically, in Italy. DTI, with Carey Winston, now has the ability to manage
both corporate and real estate assets for its clients. We believe the
opportunities for new business are tremendous. In Carey Winston, we have joined
forces with a leading real estate services company. Parenthetically, Carey
Winston, which announced the acquisition of Barrueta & Associates only a few
weeks ago, has combined sales of approximately $35 million and total personnel
of 525.
I am confident that the "new DTI" has a sound strategy and the people to execute
it.
Thanks for your support and interest. With a little good luck, and a lot of hard
work, future news should continue to be good.
Howard E. Chase
President
DE TOMASO INDUSTRIES, INC.
Operating Highlights
For the 3 months Ended June 30, 1996
<TABLE>
<CAPTION>
3 Months 3 Months 3 Months 3 Months
30 June 30 June 30 June 30 June
1996 1995 1996 1995
(In Millions of Italian (In Thousands of US Dollars
Lire except net loss per share) except net loss per share)*
<S> <C> <C> <C> <C>
Net sales Lit. 25,343 Lit. 19,616 $ 16,510 $ 12, 779
Gross margin 5,123 3,668 3,337 2,390
Operating
expenses, net (5,259) (3,475) (3,426) (2,264)
Finance
(cost)/income net (110) (162) (72) (106)
Net Income (Loss) Lit. (951) Lit. (69) $ (620) $ (45)
Net Income (Loss) per
share ** Lit. (200) Lit. (34) $ (0.13) $ (0.02)
</TABLE>
<PAGE>
DE TOMASO INDUSTRIES, INC.
Operating Highlights
For the 6 months Ended June 30, 1996
<TABLE>
<CAPTION>
6 Months 6 Months 6 Months 6 Months
30 June 30 June 30 June 30 June
1996 1995 1996 1995
(In Millions of Italian (In Thousands of US Dollars
Lire except net loss per share) except net loss per share)*
<S> <C> <C> <C> <C>
Net sales Lit. 49,001 Lit. 29,466 $ 31,922 $ 19,196
Gross margin 6,878 2,500 4,480 1,629
Operating
expenses, net (9,154) (5,830) (5,964) (3,798)
Finance
(cost)/income net (1,138) 78 (741) 51
Net Income (Loss) Lit. (4,355) Lit. (3,511) $ (2,838) $ (2,287)
Net Income (Loss)
per share ** Lit. (918) Lit. (1,706) $ (0.60) $ (1.11)
</TABLE>
# # #
* Translated in U.S. dollar equivalents at the exchange rate prevailing at
June 30, 1996
** Net loss per share calculated on the average number of shares outstanding
during the period
<PAGE>
Moto Guzzi
Moto Guzzi, a major subsidiary of Trident Rowan Group, Inc., is a 75 year old
company which has earned a reputation as one of the elite motorcycle
manufacturers worldwide.
Under the management of Trident Rowan's Temporary Integrated Management (TIM),
Moto Guzzi continues to achieve a dramatic turnaround. As of the end of this
year's second quarter, Moto Guzzi posted an operating profit for the first time
in more than a decade. Further, revenues and unit sales have been increased more
than 60% since 1994.
In addition, as indicated below, the production of Moto Guzzi motor cycles has
doubled since year end 1993.
Production of Moto Guzzi Motor Cycles
Qtr. Qtr. Qtr. Qtr. Total
YE 93 433 961 962 791 3,147
Q1 94 961 962 791 696 3,410
Q2 95 962 791 696 987 3,436
Q3 94 791 696 987 928 3,402
YE 95 696 987 928 1245 3,856
Q1 95 987 928 1245 812 3,972
Q2 95 928 1,245 812 1,455 4,440
Q3 95 1,245 812 1,455 1,241 4,753
YE 95 812 1,455 1,241 1,706 5,214
Q1 96 1,455 1,241 1,706 1,520 5,922
Q2 96 1,241 1,706 1,520 1,760 6,227
Moto Guzzi has also implemented a selective program of component outsourcing,
which has both improved profitability and increased margins. Under TIM
management, the demand for Moto Guzzi motorcycles continues to exceed the
supply, which is not surprising given the company's increased emphasis on
performance and styling.
Today, Moto Guzzi produces four prominent models, all of which will be available
in the important U.S. market. These models are the striking, new V-10 Centauro,
that is being haled as a cross between a "naked" sportsbike and a power cruiser;
a newly refined model called the RS; a fuel-injected version of Moto Guzzi's
highly rated
<PAGE>
Sport 1100 sportbike; and the fuel-injected version of the
company's best-selling California 1000 cruiser.
Moto Guzzi has also set ambitious targets for increased sales in the U.S.,
through its acquisition of Moto America, Inc., the exclusive U.S. importer and
distributor of Moto Guzzi motorcycles. In addition, new programs are being
implemented to boost Moto Guzzi sales in the Far East.
