SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT (AMENDMENT NO. 6) PURSUANT TO
SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
-------------------------------
DYNAMICS CORPORATION OF AMERICA
(Name of Subject Company)
WHX CORPORATION
SB ACQUISITION CORP.
(Bidders)
COMMON STOCK, PAR VALUE $.10 PER SHARE
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
(Title of Class of Securities)
268039 10 4
(CUSIP Number of Class of Securities)
MR. RONALD LABOW
CHAIRMAN OF THE BOARD
WHX CORPORATION
110 EAST 59TH STREET
NEW YORK, NY 10022
TELEPHONE: (212) 355-5200
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidder)
with a copy to:
ILAN K. REICH, ESQ.
OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
505 PARK AVENUE
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 753-7200
-------------------------------
This Statement amends and supplements the Tender Offer Statement on
Schedule 14D-1 filed with the Securities and Exchange Commission on March 31,
1997, as previously amended and supplemented, by SB Acquisition Corp.
("Purchaser"), a New York corporation and a wholly owned subsidiary of WHX
Corporation, a Delaware corporation ("Parent"), to purchase any and all shares
of Common Stock, par value $.10 per share (the "Shares") of the Company,
including the associated Common Stock Purchase Rights issued pursuant to the
Rights Agreement, dated as of January 30, 1986, as amended on December 27, 1995,
between the Company and First National Bank of Boston, as Rights Agent, at a
price of $45 per Share, net to the seller in cash, without interest thereon,
upon the terms and subject to the conditions set forth in the Offer to Purchase,
dated March 31, 1997, as amended and supplemented from time to time (the "Offer
to Purchase") and in the related Letters of Transmittal (which, together with
any amendments or supplements thereto, including the First Supplement dated
April 9, 1997, the Second Supplement dated April 15, 1997 and the Third
Supplement dated April 30, 1997 (the "Third Supplement"), constitute the
"Offer"). Capitalized terms used and not defined herein shall have the meanings
assigned to such terms in the Offer to Purchase and the Schedule 14D-1.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT
COMPANY.
Item 3 is hereby amended and supplemented by reference to Sections 3
and 4 of the Third Supplement.
<PAGE>
ITEM 4. SOURCE AND AMONT OF FUNDS OR OTHER CONSIDERATION.
Item 4 is hereby amended and restated by reference to Section 2 of the
Third Supplement.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
Item 5 is hereby amended and supplemented by reference to Sections 3
and 4 of the Third Supplement.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO THE SUBJECT COMPANY'S SECURITIES.
Item 7 is hereby amended and supplemented by reference to Sections 4
and 6 of the Third Supplement.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a) (1) Offer to Purchase, dated March 31, 1997.*
(2) Letter of Transmittal.*
(3) Notice of Guaranteed Delivery.*
(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.*
(5) Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other
Nominees.*
(6) Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.*
(7) Text of Press Release, issued by Parent on March 31,
1997.*
(8) Summary Advertisement published on April 1, 1997.*
(9) Text of Press Release, issued by Parent on April 9,
1997.*
(10) First Supplement to Offer to Purchase, dated April 9,
1997.*
(11) Revised Letter of Transmittal*
(12) Revised Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.*
(13) Revised Letter to Clients for use by Brokers,
Dealers, Commercial Banks, Trust Companies and Other
Nominees.*
(14) Second Supplement to Offer to Purchase, dated April
15, 1996.*
(15) Revised Letter of Transmittal.*
(16) Revised Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.*
(17) Revised Letter to Clients for use by Brokers,
Dealers, Commercial Banks, Trust Companies and Other
Nominees.*
(18) Revised Notice of Guaranteed Delivery.*
(19) Complaint in DYNAMICS CORPORATION OF AMERICA vs. WHX
CORPORATION AND SB ACQUISITION CORP. (3:97 CV 702
(GLG)) filed in the United States District Court,
District of Connecticut, on April 14, 1997.*
(20) Text of Press Release, issued by Parent on April 29,
1997.*
(21) Text of Press Release, issued by Parent on April 30,
1997. (22) Third Supplement to Offer to Purchase,
dated April 30, 1997.
(22) Third Supplement to Offer to Purchase, dated April
30, 1997.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
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* Previously provided.
-2-
<PAGE>
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: April 30, 1997
WHX CORPORATION
By: /s/ Stewart E. Tabin
----------------------------
Name: Stewart E. Tabin
Title: Assistant Treasurer
SB ACQUISITION CORP.
By: /s/ Stewart E. Tabin
--------------------------------
Name: Stewart E. Tabin
Title: Vice President
-3-
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER PAGE
(a) (1) Offer to Purchase, dated March 31, 1997.*
(2) Letter of Transmittal.*
(3) Notice of Guaranteed Delivery.*
(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.*
(5) Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.*
(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.*
(7) Text of Press Release, issued by Parent on March 31,
1997.*
(8) Summary Advertisement published on April 1, 1997.*
(9) Text of Press Release, issued by Parent on April 9,
1997.*
(10) First Supplement to Offer to Purchase, dated April 9,
1997.*
(11) Revised Letter of Transmittal*
(12) Revised Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.*
(13) Revised Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.*
(14) Second Supplement to Offer to Purchase dated April 15,
1997.*
(15) Revised Letter of Transmittal.*
(16) Revised Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.*
(17) Revised Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.*
(18) Revised Notice of Guaranteed Delivery.*
(19) Complaint in DYNAMICS CORPORATION OF AMERICA vs. WHX
CORPORATION AND SB ACQUISITION CORP. (3:97 CV 702
(GLG)) filed in the United States District Court,
District of Connecticut, on April 14, 1997.*
(20) Text of Press Release, issued by Parent on April 29,
1997.*
(21) Text of Press Release, issued by Parent on April 30,
1997.
(22) Third Supplement to Offer to Purchase, dated April 30,
1997.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
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* Previously provided.
-4-
WHX AMENDS TENDER OFFER --
WILL NOW SEEK TO PURCHASE ANY AND ALL
SHARES OF DYNAMICS CORP. OF AMERICA
New York -- April 30, 1997 -- WHX Corporation (NYSE: WHX) announced
today that its wholly-owned subsidiary, SB Acquisition Corp., is amending its
current tender offer for common stock of Dynamics Corporation of America (NYSE:
DYA) to be for any and all shares. The expiration and withdrawal date of the
tender offer is being extended until 6:00 p.m. on Tuesday, May 20, 1997.
The amended tender offer is subject to two new conditions: first, the
invalidation or redemption of Dynamics Corp. of America's "poison pill" rights
plan; and, second, an appropriate waiver by the Board of Directors of Dynamics
Corp. of America under the New York business combination statute. The tender
offer is not subject to financing.
As of last night, approximately 1.53 million shares (40% of the total
shares outstanding) had been tendered into SB Acquisition Corp.'s tender offer
for up to 649,000 shares (approximately 17%).
WHX also announced that it plans to solicit proxies at the annual
meeting of shareholders of Dynamics Corp. of America, which has been rescheduled
for August 1, 1997. WHX plans to propose six nominees to the Board of Directors,
as well as several by-law amendments and a shareholder resolution requesting the
Board
<PAGE>
of Directors to remove the anti-takeover impediments to WHX's tender offer.
On April 14, 1997, Dynamics Corp. of America announced that it had
increased the size of the Board of Directors from seven to nine members,
resulting in the Board of Directors being divided into three classes of
directors rather than two. WHX contends that this action is illegal because,
among other things, Dynamics Corp. of America's charter improperly grants the
Board of Directors, rather than shareholders, the discretion to re-classify the
Board from two to three classes. WHX contends that under applicable New York law
a company's charter can specify only one category of board classification, not
multiple classifications as is the case with Dynamics Corp. of America's
charter.
Furthermore, through its action on April 14 the current Board
improperly extended the terms of six current directors for one year beyond the
two-year terms to which they were originally elected in 1995 and 1996. WHX
contends that this action is also illegal under applicable New York law. WHX
plans to promptly seek judicial review of these issues.
-2-
EXHIBIT (A)(22)
THIRD SUPPLEMENT, DATED APRIL 30, 1997,
TO THE OFFER TO PURCHASE DATED MARCH 31, 1997
SB ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
WHX CORPORATION
OFFERS TO PURCHASE FOR CASH ANY AND ALL SHARES OF
COMMON STOCK (INCLUDING THE ASSOCIATED RIGHTS) OF
DYNAMICS CORPORATION OF AMERICA
AT A PRICE OF $45 PER SHARE
------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 6:00 P.M., NEW YORK CITY TIME, ON
TUESDAY, MAY 20, 1997, UNLESS THE OFFER IS EXTENDED. THE OFFER IS NOT SUBJECT TO
ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS (1) THE RIGHTS (AS DEFINED IN
THE OFFER TO PURCHASE) HAVING BEEN REDEEMED BY THE BOARD OF DIRECTORS OF
DYNAMICS CORPORATION OF AMERICA OR SB ACQUISITION CORP. BEING SATISFIED, IN ITS
REASONABLE JUDGMENT, THAT THE RIGHTS HAVE BEEN INVALIDATED OR ARE OTHERWISE
INAPPLICABLE TO THE OFFER AND THE MERGER (AS DEFINED IN THE OFFER TO PURCHASE)
AND (2) SB ACQUISITION CORP. BEING SATISFIED, IN ITS REASONABLE JUDGEMENT, THAT
THE RESTRICTIONS CONTAINED IN THE NEW YORK BUSINESS COMBINATION LAW (AS DEFINED
HEREIN) WILL NOT APPLY TO THE ACQUISITION OF SHARES PURSUANT TO THE OFFER OR TO
THE MERGER. SEE THE INTRODUCTION AND SECTIONS 13 AND 14. THE OFFER IS NOT
SUBJECT TO FINANCING.
------------------------
IMPORTANT
Any shareholder desiring to tender all or any portion of such
shareholder's Shares (as defined herein) should either (i) complete and sign the
Letter of Transmittal (or a facsimile thereof) in accordance with the
instructions in the Letter of Transmittal, have such shareholder's signature
thereon guaranteed if required by Instruction 1 to the Letter of Transmittal,
mail or deliver the Letter of Transmittal (or such facsimile thereof) and any
other required documents to the Depositary and either deliver the certificates
for such Shares to the Depositary along with the Letter of Transmittal (or a
facsimile thereof) or deliver such Shares pursuant to the procedure for
book-entry transfer set forth in Section 3 of the Offer to Purchase prior to the
expiration of the Offer or (ii) 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 tender such Shares. Any shareholder who desires to tender Shares and
whose certificates for such Shares are not immediately available, or who cannot
comply with the procedures for book-entry transfer described in the Offer to
Purchase on a timely basis, may tender such Shares by following the procedures
for guaranteed delivery set forth in Section 3 of the Offer to Purchase.
Unless and until Purchaser declares that the Rights Condition (as
defined herein) is satisfied, holders of Shares will be required to tender one
Right for each Share tendered in order to effect a valid tender of such Share.
If the Distribution Date (as defined in the Offer to Purchase) does not occur
prior to the Expiration Date (as defined herein), a tender of Shares will also
constitute a tender of the associated Rights. If the Distribution Date occurs
prior to the Expiration Date, the procedures set forth in Section 3 with respect
to the separate delivery of certificates evidencing the Rights must be followed
to effect a valid tender.
Questions and requests for assistance or for additional copies of the
Offer to Purchase, the First Supplement thereto, the Second Supplement thereto,
this Third Supplement thereto, the revised Letter of Transmittal or other tender
offer materials, may be directed to the Information Agent (as defined in the
Offer to Purchase) at its address and telephone number set forth on the back
cover of this Third Supplement.
April 30, 1997
<PAGE>
TO THE HOLDERS OF COMMON STOCK OF DYNAMICS CORPORATION AMERICA:
INTRODUCTION
The following information amends and supplements the Offer to Purchase
dated March 31, 1997 (the "Offer to Purchase"), as amended and supplemented by
the First Supplement thereto, dated April 10, 1997 (the "First Supplement"), the
Second Supplement thereto, dated April 15, 1997 (the "Second Supplement"), and
this Third Supplement thereto, dated April 30, 1997 (the "Third Supplement"), of
SB Acquisition Corp., a New York corporation ("Purchaser") and a wholly-owned
subsidiary of WHX Corporation, a Delaware corporation ("Parent") pursuant to
which Purchaser is now offering to purchase any and all shares of common stock,
par value $.10 per share (the "Shares") of Dynamics Corporation of America, a
New York corporation (the "Company"), including the associated Common Stock
Purchase Rights issued pursuant to the Rights Agreement dated as of January 30,
1986, as amended on December 27, 1995, between the Company and First National
Bank of Boston, as Rights Agent, at a price of $45 per Share, net to the seller
in cash, without interest thereon (the "Offer Price"), upon the terms and
subject to the conditions set forth in the Offer to Purchase, as amended and
supplemented by the First Supplement, the Second Supplement and this Third
Supplement, and in the related Letter of Transmittal (which, as amended from
time to time, together constitute the "Offer").
Except as otherwise set forth in this Third Supplement, the terms and
conditions previously set forth in the Offer to Purchase, the First Supplement
and the Second Supplement remain applicable in all respects to the Offer, and
this Third Supplement should be read in conjunction with the Offer to Purchase,
the First Supplement and the Second Supplement. Unless the context requires
otherwise, terms not defined herein have the meanings ascribed to them in the
Offer to Purchase, the First Supplement and the Second Supplement.
RIGHTS CONDITION. CONSUMMATION OF THE OFFER IS CONDITIONED UPON THE
RIGHTS HAVING BEEN REDEEMED BY THE COMPANY'S BOARD OF DIRECTORS OR PURCHASER
BEING SATISFIED, IN ITS REASONABLE JUDGEMENT, THAT THE RIGHTS HAVE BEEN
INVALIDATED OR ARE OTHERWISE INAPPLICABLE TO THE OFFER AND THE MERGER (THE
"RIGHTS CONDITION").
Based on publicly available information, Purchaser believes that, as of
the date hereof, the Rights are not exercisable, certificates for Rights have
not been issued and the Rights are evidenced by the certificates for Shares.
Unless the Rights Condition is satisfied, shareholders will be required
to tender one Right for each Share tendered in order to effect a valid tender or
Shares in accordance with the procedures set forth in Section 3. Unless the
Distribution Date occurs prior to the Expiration Date, a tender of Shares will
also constitute a tender of the associated Rights. Under the terms of the Rights
Agreement, a Distribution Date will occur ten days after the public announcement
of the commencement of, or the intention to commence, a tender offer for 25% or
more of the Shares. As soon as practicable after the Distribution Date, separate
certificates evidencing the Rights will be mailed to holders of record of Shares
as of the close of business on the Distribution Date and such separate
certificates alone will evidence the Rights. If a Distribution Date has
occurred, certificates representing a number of Rights equal to the number of
Shares being tendered must be delivered to the Depositary in order for such
Shares to be validly tendered.
According to the Company 8-A, the Rights Agreement provides that, at
any time prior to a person becoming an Acquiring Person (as defined in the
Rights Agreement (see Section 7)), the Company's Board of Directors may redeem
the Rights in whole, but not in part, at a price of $.05 per Right.
Parent and Purchaser are requesting that the Company's Board of
Directors redeem the Rights. Redemption of the Rights (or an amendment of the
Rights Agreement which Purchaser is satisfied, in its reasonable judgment,
renders the Rights inapplicable to the Offer and the Merger) would satisfy the
Rights Condition. There can be no assurance that the Company's Board of
Directors will take such action. In the event that the Company's Board of
Directors fails to do so prior to the intended date of the consummation of the
Offer, Purchaser expects its nominees
<PAGE>
to the Company's Board of Directors, if elected at the Annual Meeting, and
subject to their fiduciary duties, to take such appropriate action as shall
result in the satisfaction of the Rights Condition. See Section 13.
BUSINESS COMBINATION CONDITION. CONSUMMATION OF THE OFFER IS
CONDITIONED UPON PURCHASER BEING SATISFIED, IN ITS REASONABLE JUDGMENT, THAT THE
RESTRICTIONS CONTAINED IN SECTION 912 OF THE NYBCL (THE "NEW YORK BUSINESS
COMBINATION LAW") WILL NOT APPLY TO THE ACQUISITION OF SHARES PURSUANT TO THE
OFFER OR THE MERGER (THE "BUSINESS COMBINATION CONDITION").
Parent and Purchaser are requesting that the Company's Board of
Directors take appropriate action so that the New York Business Combination Law
is not applicable to the acquisition of Shares pursuant to the Offer or the
Merger. See Section 14. There can be no assurance that the Company's Board of
Directors will do so. In the event that the Company's Board of Directors fails
to do so prior to the intended date of the consummation of the Offer, the
Purchaser expects its nominees to the Company's Board of Directors, if elected
at the Annual Meeting, and subject to their fiduciary duties, to take such
appropriate action as shall result in the satisfaction of the Business
Combination Condition.
Certain other conditions to the Offer are described in Section 13.
Subject to the applicable rules and regulations of the SEC, Purchaser expressly
reserves the right, in its sole discretion, to waive, in whole or in part, any
one or more of the conditions to the Offer. See Sections 13 and 14.
In the event the Offer is not consummated, Parent and Purchaser intend
to explore all options which may be available to them at such time and
permissible under all applicable laws and regulations, which may include,
without limitation, the solicitation of proxies at future meetings of
shareholders to elect nominees, and take such other actions, as may be necessary
or appropriate to further the objective of completing the Merger at $45 per
Share in cash, and/or the acquisition of Shares through open market purchases,
privately negotiated transactions, another tender offer, or otherwise upon such
terms and at such prices as they shall determine, which may be at prices other
than the price to be paid pursuant to the Offer. Parent and Purchaser also
reserve the right to dispose of Shares.
See Section 11.
According to the Company's Proxy Statement dated March 26, 1997, as of
March 14, 1997 there were 3,815,194 Shares outstanding. The Purchaser already
owns 109,861 Shares (approximately 2.9%). PURCHASER HAS NOT ACCEPTED FOR PAYMENT
OR PURCHASED ANY OF THE APPROXIMATELY 1.53 MILLION SHARES (40% OF THE TOTAL
SHARES OUTSTANDING) TENDERED PURSUANT TO THE OFFER AS OF THE ORIGINAL EXPIRATION
DATE (NAMELY, 12:00 MIDNIGHT ON APRIL 29, 1997). BY FOLLOWING THE PROCEDURES SET
FORTH IN SECTION 4, TENDERING SHAREHOLDERS MAY WITHDRAW THOSE SHARES AT ANY TIME
PRIOR TO THE NEW EXPIRATION DATE (NAMELY, 6:00 P.M., TUESDAY, MAY 20, 1997).
THIS OFFER TO PURCHASE, THE FIRST SUPPLEMENT, THE SECOND SUPPLEMENT,
THIS THIRD SUPPLEMENT AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
-------------------------------
1. TERMS OF THE OFFER; EXPIRATION DATE.
The discussion set forth in Section 1 of the Offer to Purchase is
hereby amended and supplemented as follows:
Upon the terms and subject to the conditions of the Offer (including,
if the Offer is extended or amended, the terms and conditions of any extension
or amendment), Purchaser will accept for payment and pay for any and
-2-
<PAGE>
all Shares which are validly tendered prior to the Expiration Date (as
hereinafter defined) and not properly withdrawn in accordance with Section 4.
The term "Expiration Date" means 6:00 p.m., New York City time, on Tuesday, May
20, 1997, unless and until Purchaser, in its sole discretion, shall have
extended the period of time during 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 Purchaser shall expire.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OF
THE RIGHTS CONDITION, THE BUSINESS COMBINATION CONDITION AND THE EXPIRATION OR
TERMINATION OF ALL THE OTHER CONDITIONS SET FORTH IN SECTION 13.
2. SOURCE AND AMOUNT OF FUNDS.
The discussion set forth in Section 9 of the Offer to Purchase is
hereby amended and restated as follows:
Purchaser estimates that the total amount of funds required to purchase
Shares pursuant to the Offer and to pay all related costs and expenses will be
approximately $180 million. Purchase plans to obtain such funds through capital
contributions or advances made by Parent. As of March 31, 1997, Parent had
available over $350 million in cash and cash equivalents.
3. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.
The discussion set forth in Section 10 of the Offer to Purchase is
hereby amended and supplemented as follows:
On April 29, 1997, Parent and Purchaser issued the following press
release in the early afternoon:
"New York -- April 29, 1997 -- WHX Corporation (NYSE: WHX)
announced today that Federal District Court Judge Gerard Goettel has issued an
order which preliminarily enjoins the tender offer for up to 649,000 shares
(approximately 17%) of Dynamics Corporation of America until twenty calendar
days after certain corrective disclosures are made. The tender offer is
currently scheduled to expire at midnight tonight.
WHX is currently reviewing the court's order and will announce
its response in the near future. At the present time, approximately one million
shares of Dynamics Corp. stock were tendered to the depository."
Also on April 29, 1997, an officer of the Company, in commenting on the
decision by Judge Goettel, remarked, "we hope it's a victory for shareholders."
On April 30, 1997, Parent and Purchaser issued the following press
release:
"New York -- April 30, 1997 -- WHX Corporation (NYSE: WHX)
announced today that its wholly-owned subsidiary, SB Acquisition Corp., is
amending its current tender offer for common stock of Dynamics Corporation of
America (NYSE: DYA) to be for any and all shares. The expiration and withdrawal
date of the tender offer is being extended until 6:00 p.m. on Tuesday, May 20,
1997.
The amended tender offer is subject to two new conditions:
first, the invalidation or redemption of Dynamics Corp. of America's "poison
pill" rights plan; and, second, an appropriate waiver by the Board of Directors
of Dynamics Corp. of America under the New York business combination statute.
The tender offer is not subject to financing.
As of last night, approximately 1.53 million shares (40% of
the total shares outstanding) had been tendered into SB Acquisition Corp.'s
tender offer for up to 649,000 shares (approximately 17%).
-3-
<PAGE>
WHX also announced that it plans to solicit proxies at the annual
meeting of shareholders of Dynamics Corp. of America, which has been rescheduled
for August 1, 1997. WHX plans to propose six nominees to the Board of Directors,
as well as several by-law amendments and a shareholder resolution requesting the
Board of Directors to remove the anti-takeover impediments to WHX's tender
offer.
On April 14, 1997, Dynamics Corp. of America announced that it had
increased the size of the Board of Directors from seven to nine members,
resulting in the Board of Directors being divided into three classes of
directors rather than two. WHX contends that this action is illegal because,
among other things, Dynamics Corp. of America's charter improperly grants the
Board of Directors, rather than shareholders, the discretion to re-classify the
Board from two to three classes. WHX contends that under applicable New York law
a company's charter can specify only one category of board classification, not
multiple classifications as is the case with Dynamics Corp. of America's
charter.
Furthermore, through its action on April 14 the current Board
improperly extended the terms of six current directors for one year beyond the
two-year terms to which they were originally elected in 1995 and 1996. WHX
contends that this action is also illegal under applicable New York law. WHX
plans to promptly seek judicial review of these issues."
4. PURPOSE OF THE OFFER; THE MERGER OFFER; PROXY SOLICITATION;
PLANS FOR THE COMPANY.
The discussion set forth in Section 11 of the Offer to Purchase is
hereby amended and supplemented as follows:
Parent and Purchaser plan to solicit proxies at the annual meeting of
shareholders of the Company, which has been rescheduled for August 1, 1997 (the
"Annual Meeting"). The Company has announced that only three directors will be
nominated for election at the Annual Meeting. Parent and Purchaser plan
nonetheless to propose six nominees to the Board of Directors, as well as
several by-law amendments and shareholder resolutions requesting the Board of
Directors of the Company to remove the anti-takeover impediments to Purchaser's
tender offer. Specifically, Parent intends to solicit proxies from the
shareholders of the Company at the Annual Meeting to: (i) adopt shareholder
by-laws which will permit holders of at least 9.9% of the Shares to call a
special meeting and permit the removal of directors at any time without cause
and (ii) adopt a shareholder resolution which repeals by-law provisions adopted
after March 14, 1997. Approval of these shareholder by-laws and resolutions
would require the vote of 80% of the Shares. Furthermore, Parent intends to
solicit proxies from the shareholders of the Company at the Annual Meeting to
adopt precatory shareholder resolutions which request the Board to rescind and
cancel the Rights and take such other actions (including under the New York
Business Combination Law) as may be necessary or appropriate to promptly effect
the Merger. Notwithstanding the vote by shareholders, these resolutions would
not be binding upon the Board of Directors of the Company. THE OFFER DOES NOT
CONSTITUTE A SOLICITATION OF PROXIES FOR ANY MEETING OF THE COMPANY'S
SHAREHOLDERS. ANY SUCH SOLICITATION WOULD BE MADE ONLY PURSUANT TO SEPARATE
PROXY MATERIALS COMPLYING WITH APPLICABLE SECURITIES LAWS.
On April 14, 1997, the Company increased the size of its Board of
Directors from seven to nine members, resulting in the Board of Directors being
divided into three classes of directors rather than two. Parent and Purchaser
contend that this action is illegal because, among other things, the Company's
Certificate of Incorporation improperly grants the Board of Directors, rather
than shareholders, the discretion to re-classify the Board from two to three
classes. Parent and Purchaser contend that under applicable New York law, a
company's charter can specify only one category of board classification, not
multiple classifications as is the case with the Company's charter documents.
Furthermore, through its action on April 14 the current Board improperly
extended the terms of six current directors for one year beyond the two-year
terms to which they were originally elected in 1995 and 1996. Parent and
Purchaser contend that this action is also illegal under applicable New York
law. Parent and Purchaser plan to promptly seek judicial review of these issues.
The Offer is not conditioned on judicial resolution of these issues. If
Purchaser acquires Shares pursuant to the Offer prior to such judicial
resolution, Parent
-4-
<PAGE>
and Purchaser intend to explore all options which may be available to them from
time to time and permissible under all applicable laws and regulations in
furtherance of the objective of completing the Merger at $45 per Share in cash,
including, without limitation, the solicitation of proxies at future meetings of
shareholders to elect nominees, and take such other actions, as may be necessary
or appropriate toward that goal, and/or the acquisition of additional Shares
through open market purchases, privately negotiated transactions, another tender
offer, or otherwise upon such terms and at such prices as they shall determine,
which may be at prices other than the price to be paid pursuant to the Offer.
Parent and Purchaser also reserve the right to dispose of Shares.
Purchaser and Parent hereby provide corrective disclosure that (i) if
Article XV of the Company's Certificate of Incorporation is applicable and
Purchaser acquires 5% of the Shares pursuant to the Offer or otherwise, the
affirmative vote of the holders of 80% of the Shares would be required to
approve the Merger unless Purchaser and Parent are successful in having Article
XV of the Company's Certificate of Incorporation declared invalid and (ii) if
Purchaser and Parent are deemed to be part of a Schedule 13(d) group with
Lichtenstein (as defined in the Second Supplement) and if at any time Purchaser
or Parent are deemed to be a beneficial owner of more than 20% of the Company's
outstanding Shares, (x) Purchaser and Parent would be obligated to comply with
the terms of the New York Business Combination Law and (y) the Rights issued
under the Rights Agreement would be triggered, thereby resulting in potential
dilution to Parent's ownership position.
5. CONDITIONS OF THE OFFER.
The discussion set forth in Section 13 of the Offer to Purchase is
hereby amended and supplemented as follows:
Notwithstanding any other provisions of the Offer, and in addition to
(and not in limitation of) Purchaser's rights to extend and amend the Offer at
any time in its reasonable discretion, Purchaser shall not be required to accept
for payment or, subject to any applicable rules and regulations of the SEC,
including Rule 14e-1(c) under the Exchange Act (relating to Purchaser's
obligation to pay for or return tendered Shares promptly after termination or
withdrawal of the Offer), pay for, and may delay the acceptance for payment of
or, subject to the restriction referred to above, the payment for, any tendered
Shares, and may terminate the Offer as to any Shares not then paid for, if in
the reasonable judgment of Purchaser, at any time on or after March 27, 1997 and
prior to the acceptance for payment for, such Shares, unless (i) the Rights
Condition shall have been satisfied and (ii) the Business Combination Condition
shall have been satisfied. Furthermore, notwithstanding any other term or
provision of the Offer, and in addition to its other rights under the Offer,
Purchaser will not be required to accept for payment or, subject as aforesaid,
to pay for any Shares not theretofore accepted for payment or paid for, and may
terminate or amend the Offer if, at any time on or after March 27, 1997, and
regardless of any delay in exercising any such rights, and before the acceptance
of such Shares for payment or, subject to any applicable rules and regulations
of the SEC, the payment therefor, any of the events previously enumerated in
Section 13 shall have occurred (or if such events or facts shall have occurred
prior to March 27, 1997, but shall not have been publicly disclosed until after
such date).
6. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS
The discussion set forth in Section 14 of the Offer to Purchase is
hereby amended and supplemented as follows:
Appraisal Rights. If the Merger is consummated, shareholders of the
Company would have certain rights to dissent and demand appraisal of their
Shares under the NYBCL. Dissenting shareholders who comply with the requisite
statutory procedures under the NYBCL would be entitled to a judicial
determination and payment of the "fair value" of their Shares as of the close of
business on the day prior to the date of shareholder authorization of the
Merger, together with interest thereon, at such rate as the court finds
equitable, from the date the Merger is consummated until the date of payment.
Under the NYBCL, in fixing the fair value of the Shares, a court would
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consider the nature of the transaction giving rise to the shareholders' right to
receive payment for Shares and its effects on the Company and its shareholders,
the concepts and methods then customary in the relevant securities and financial
markets for determining fair value of shares of a corporation engaging in a
similar transaction under comparable circumstances and all other relevant
factors.
Certain Litigation. On April 29, 1997, Judge Gerard L. Goettel of the
United States District Court, District of Connecticut, issued an order granting
the Company's motion for a preliminary injunction to the extent of directing
that Purchaser and Parent make further and complete disclosures on certain
subjects, and that the Offer be extended for an additional twenty days. The text
of the court's order is as follows:
"This matter comes before the court on plaintiff's motion for a
preliminary injunction enjoining defendants WHX Corporation and SB Acquisition
Corporation, a subsidiary of WHX formed solely for purposes of the instant
transaction ("WHX") , from (1) acquiring shares of plaintiff Dynamics
Corporation of America ("DCA") stock as part of an existing tender offer
commenced on March 31, 1997 with the ultimate objective being a merger and (2)
from making false or misleading statements in its solicitation and other related
relief until WHX complies with the federal securities laws. For the reasons
discussed below, plaintiff's motion for injunctive relief (document #4) is
GRANTED.
FACTS
DCA is a diversified manufacturer of commercial and industrial
products. DCA also holds a 44.1% stake in CTS Corporation. WHX is a domestic
integrated steel manufacturer; SB Corporation is a wholly owned subsidiary of
WHX that was organized to act as the acquiring corporation in connection with
the WHX tender offer that forms the basis of this litigation. Ronald LaBow
("LaBow") is the chairman of WHX. Warren Lichtenstein ("Lichtenstein") is a
holder of approximately 5% of DCA stock. In July 1996, Lichtenstein filed with
the SEC a Statement on Schedule 13D stating that as of July 26, 1996, he
beneficially owned 209,700 shares (or 5.5%) of DCA's outstanding common stock.
LaBow began purchasing DCA shares in the open market on March 4, 1997.
On March 13, 1997, the last business day before the record date for the DCA 1997
annual meeting of shareholders, LaBow negotiated with Lichtenstein for the
purchase of 80,000 shares of DCA stock at $32.50 per share-- $7.50 per share
less than the tender offer price made less than three weeks later. The number of
shares sold were enough to relieve Lichtenstein of his 13D filing obligations.
While Lichtenstein subsequently purchased 51,500 shares at $45 per share-- a
price $7.50 per share higher than he had received from WHX a few weeks earlier--
this purchase was not enough to set him above the 5% reporting threshold.
Defendants contend that prior to this sale, Lichtenstein and WHX had no business
contacts regarding DCA.
WHX continued to purchase additional DCA shares in the open market on
March 17, 18, and 24. These purchases totaled 9,600 shares. No further purchase
offers were made until after the tender offer was announced on March 31, 1997.
Under the terms of tender offer, WHX stated its intent to acquire up to 17% of
DCA's outstanding common stock at $40 per share. This price was later raised to
$45 per share. (If completed this would still leave WHX with less than 20% of
the stock-- an important dividing line.)
DISCUSSION
There are two distinct bases for the plaintiff's motion. The more
definitive one is the claim that WHX is part of a group under ss. 13D of the
1934 Act in that they have aligned themselves with Lichtenstein and his
affiliates. If there is in fact a group (and it takes only two parties to make a
group) it will have more than 20% of the stock and the proposed merger of WHX
with DCA would be prohibited for five years by New York Business Corporate
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Law ss. 912(b).1 In addition, if defendants complete the tender offer, with or
without Lichtenstein, it would trigger Article XV of DCA shareholder's rights
agreement which requires an 80% affirmative vote of the shareholders to merge,
rather than the 2/3 vote required by ss. 912(b), simply by having more than 5%
of stock. Moreover, the failure to disclose Lichtenstein's cooperation would
violate the Williams Act as described below. Both sides have submitted extensive
briefing on the question of whether Lichtenstein is working in collaboration
with the defendants' interest and both sides deny the need for an evidentiary
hearing claiming that the affidavits and transcripts presented clearly favor
their argument that there is or is not a group.
Lichtenstein clearly is a player in this corporate drama. While we
cannot say with any certainty at this point whether Lichtenstein is merely
prepared to hold the coat of LaBow or whether he is prepared to enter the fray
as a combatant, the resolution of this issue depends, to a great extent, upon
the credibility of Lichtenstein and LaBow, who have denied such an affinity. As
such, this is not an issue easily or, perhaps properly, determined simply on
paper. "[A] judge should not resolve a factual dispute on affidavits and
depositions for then he is merely showing a preference for `one piece of paper
to another.'" SECURITIES AND EXCHANGE COMMISSION V. SPECTRUM, LTD., 489 F.2d
535, 540 (2d Cir. 1973) , QUOTING, SIMS V. GREENE, 161 F.2d 87, 88 (3d Cir.
1947). SEE ALSO FENGLER V. NUMISMATIC AMERICANA, INC., 832 F.2d 745, 747 (2d
cir. 1987) (on preliminary injunction motion, where essential facts are in
dispute, there must be a hearing and appropriate findings of fact must be made);
FORTS V. WARD, 566 F.2d 849, 851 (2d Cir. 1977) (motions for preliminary
injunction should not be resolved on basis of affidavits; evidentiary hearing is
required to decided credibility issues). Accordingly, an evidentiary hearing
seems appropriate.
The second basis for the proposed injunction concerns misleading
disclosures made by the defendants in violation of ss.ss. 14(a), (d), and (e) of
the Securities and Exchange Act of 1934. The initial tender offer disclosures
were clearly improper in two respects.2 Moveover, defendants went forward with
these erroneous proposals even though the SEC had indicated that they were
improper. Thereafter, the tender offer disclosures were amended to eliminate
those two objectionable aspects when the SEC threatened action. The SEC has not
offered any further objections to the amended disclosures. Plaintiff, however,
argues that the amended disclosures are misleading in several respects.
(1) Plaintiff contends that the disclosures are inadequate because of
their failure to admit group status. As we have indicated above, we are not
prepared to rule on that issue without an evidentiary hearing.
(2) Plaintiff also argues that the amended disclosures should reveal
that defendant's initial disclosures were deemed to violate SEC rules and
regulation, yet were made despite SEC advice to the contrary. However, we do not
know of any requirement that one must confess error in an amended disclosure,
provided that the amended disclosure is thereafter full and complete. Thus, at
least with respect to plaintiff's first two claims, we find WHX's disclosures to
be satisfactory at this time.
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1 N.Y. Bus. Corp. Law ss. 912 prevents hostile bidders from affecting the
second-step in merger freezeout transactions by prohibiting an offeror who
acquires at least twenty percent of direct or indirect beneficial ownership of
outstanding common stock from voting that block of stock and thereafter entering
into business combinations, unless the board of the target corporation approves.
2 Initially, WHX proposed to purchase shares only from shareholders who could
also provide it with a proxy that could be voted at the plaintiff's 1997
shareholders meeting which was scheduled to occur shortly after the tender offer
period. This violated the SEC's "all holders rule" Rule 24(d)-10(a), 17 C.F.R.
ss.ss. 240.14(d)-10 (a). It also sought to have a provision allowing it to
change of the number of shares that it intended to purchase without extending
the expiration date of the proposed offer in the event that certain action was
taken by the DCA Board. Under appropriate SEC rules, such an amendment would
require an extension of ten business days in the event that the change was made
more than ten business day into the offer.
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(3) In addition, plaintiff points to specific language in the
disclosures that it claims is inadequate. The present disclosures state that WHX
"may be" required to comply with New York law if it is found to be a group.
There is, however, no "may" involved: WHX will be required to comply with ss.
912(b) if it is found to be in a group since it will have, collectively, over
20% of the corporation's stock. Conditional representations in a tender offer
are improper. POLAROID CORP. V. DISNEY, 862 F.2d 987, 1004-05 (3d Cir. 1988).
(4) Similar conditional use of "may" also is set forth by defendants
with respect to the applicability of Article XV of DCA's Article of
Incorporation. Under that provision, if WHX acquires 5% or more of DCA's
outstanding shares of common stock, an affirmative vote of 80% of DCA shares
would be required to approve a merger. The most direct way around this
provision, and indeed the manner being pursued by defendants, is to have Article
XV eliminated as being in violation of New York ss. 912(b).3 A more proper way
to describe the situation would have been to advise shareholders that an 80%
vote of the shares would be required to approve a merger unless the defendants
succeeded in having Article XV stricken.
(5) Plaintiff also complains about the failure of the defendants to
indicate its future plans with respect to shareholders if it is foreclosed from
effecting a merger for five years. (In its brief, WHX says it is prepared to be
a passive investor if it cannot complete the sought-after back-end merger.) In
light of the difficulties defendants will face in achieving this merger, we
believe that WHX's intent in this regard is material and should be disclosed, at
least to the extent included in the brief.
To obtain a preliminary injunction, a movant must show: (1) irreparable
harm and (2) either (a) a likelihood of success on the merits or (b)
sufficiently serious questions going to the merits to make them fair grounds for
litigation, plus a balance of the hardships tipping decidedly toward the party
requesting the preliminary relief. ICN PHARMACEUTICALS, INC. V. KHAN, 2 F.3d
484, 490 (2d Cir. 1993); JACKSON DAIRY, INC. V. H.P. HOOD & SONS, INC., 596 F.2d
70, 72 (2d Cir. 1979). A district court's decision to issue a preliminary
injunction is subject only to an abuse of discretion standard. SPEARS, LEEDS &
KELLOGG V. CENTRAL LIFE ASSURANCE CO., 85 F.3d 21, 25 (2d Cir. 1996) (reversal
appropriate only where district court abused its discretion in applying
incorrect law, basing its decision on clearly erroneous findings of fact, or
making an error in the substance or the form of injunction issued), CERT.
DENIED, 117 S. Ct. 609 (1996).
Plaintiff seeks this preliminary injunction relying on the provisions
of the Williams Act amendments to the Securities and Exchange Act of 1934 ("1934
Act"), adopted by Congress in 1968 in response to the growing use of cash tender
offers as a means of achieving corporate takeovers. PIPER V. CHRIS-CRAFT
INDUSTRIES, INC., 430 U.S. 1, 22 (1977). The Williams Act was intended to insure
that shareholders of companies for which tender offers are made receive, on a
timely basis, meaningful and accurate information to enable them to make an
informed investment decision. ID. at 35; ICN PHARMACEUTICALS, INC. V. KHAN, 2
F.3d at 490.
Pursuant to the Williams Act, one making a tender offer must disclose
information specified in ss. 13D of the 1934 Act (regarding group status) and
other information as the SEC may prescribe. Sections 14(d) and (e) of the 1934
Act make it unlawful to misrepresent or omit to state any material fact. SEE 15
U.S.C. ss. 78n(d), (e).4
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3 Defendants have already filed motion for summary judgment seeking such
relief.
4 Materiality for ss. 14(d) and (e) purposes is governed by the same
standard as that governing Rule 10b-5 or Rule 14a-9 and 15, SEABOARD WORLD
AIRLINES, INC. V. TIGER INTERNATIONAL, INC., 600 F.2d 355, 360-61 (2d Cir.
1979), and is defined as follows:
An omitted fact is material if there is a substantial likelihood that a
reasonable shareholder would consider it important in deciding [whether
to tender her stock] . . . It does not require proof of a substantial
likelihood that disclosure of the omitted fact would have caused the
reasonable investor to change his vote. What the standard does
contemplate is a showing of substantial likelihood that, under all the
circumstances, the omitted fact would have assumed significance in the
deliberations of a reasonable shareholder. Put another way, there must
be a substantial likelihood that the disclosure of the omitted fact
would have been viewed by the reasonable investor as having
significantly altered the `total Mix' of the information made
available.
PRUDENT REAL ESTATE TRUST V. JOHNCAMP REALTY, INC., 599 F. 2d 1140, 1147 (2d
Cir. 1979), QUOTING, TSC INDUSTRIES, INC. V. NORTHWAY, INC., 426 U.S. 438, 449
(1976).
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<PAGE>
In the context of the Williams Act, a preliminary injunction may be issued where
there is clear and convincing evidence of a pending and continuous violation of
SEC rules and regulations and the moving party has made a showing of irreparable
harm. MAYNARD OIL CO. V. DELTEC PANAMERICA S.A., 630 F. Supp. 502, 507 (S.D.N.Y.
1985); SCHMIDT V. ENERTEC CORP., 598 F. Supp. 1528, 1543 (S.D.N.Y. 1984).
Under the facts as presented by the parties, we find that, at least
with respect to DCA's shareholders who have to make a decision on whether to
tender their shares, they face irreparable harm if they do not have a full and
complete understanding of the ramifications of the situation. SEE ICN
PHARMACEUTICALS V. KAHN, 2 F.3d at 489 (curative disclosure sufficient because
shareholders had time to consider offer); TREADWAY COMPANIES INC. V. CARE CORP.,
638 F.2d 357, 380 (2d Cir. 1980) (curative disclosure sufficient only because
shareholders had four months to ponder decision). SEE ALSO GEARHART INDUSTRIES,
INC. V. SMITH INTERNATIONAL, INC., 741 F.2d 707, 716 (5th Cir. 1984) (finding
14(e) disclosure violation warranted injunctive relief until such time as proper
disclosure was made and a short period thereafter); PABST BREWING CO. V. JACOBS,
549 F. Supp. 1068, 1079 (D.Del.) (granting injunctive relief for corrective
disclosure and 30 days cooling-off period for disclosure violations), AFF'D, 707
F.2d 1392 (3d Cir. 1982) ; KIRSCH CO. V. BLISS AND LAUGHLIN INDUSTRIES, INC.,
495 F. Supp. 488, 507 (W.D.Mich. 1980) (enjoining defendant from purchasing
shares until 30 days after filing was amended). Some of DCA's shareholders might
not tender if they are aware of the potential effect of N.Y.Bus. Law ss. 912(b)
and DCA's Art. XV. Yet, their tenders cannot be withdrawn after purchases are
effected by WHX, pursuant to the terms of the tender offer. Conversely, some
shareholders who will not tender might do so if they were provided with such
information, but they are locked out of the offer after the existing stock
tender is completed.
Furthermore, defendants cannot claim that they will be harmed by having
to make the disclosures required by law, even if correction of past
misrepresentations causes a delay in the offer. The only claim of injury by
defendants is that it cannot consummate the proposed purchase today. Certainly,
that is one factor to consider. But, we think that it is important, in weighing
this interest, to bear in mind that the interest is dependent upon the legality
of WHX's offer. SEE GULF & WESTERN INDUSTRIES, INC. V. GREAT-ATLANTIC & PACIFIC
TEA CO., INC., 476 F.2d 687, 698 (2d Cir. 1973).
Finally, in our view, the public interest also is served by affording
the shareholders with the information they need to make a fully informed
decision as to whether to cast their lot with DCA or to tender their stock and
invest their money elsewhere. Such shareholders are entitled to the degree of
candor which has become customary in business practice and is required by the
Williams Act.
CONCLUSION
Accordingly, we GRANT plaintiff's motion for the preliminary injunction
(document # 4) to the extent of directing that further and complete disclosures
be made on these subjects by the defendants and that the tender offer period,
which is presently scheduled to expire on April 29, 1997, be extended for an
additional twenty days.
So ordered."
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The corrective disclosure mandated by the court's order is set forth in
Section 4 of this Third Supplement.
80% Vote. If the Rights Condition and the Business Combination
Condition are satisfied and/or waived in the reasonable judgment of Purchaser,
the Merger could not be consummated if Article XV of the Company's Certificate
of Incorporation is deemed to be valid and legal unless 80% of the Shares vote
to approve the Merger. If the Purchaser cannot consummate the Merger due to the
failure to obtain the favorable vote of 80% of the Shares as required by Article
XV of the Company's Certificate of Incorporation or otherwise, Parent and
Purchaser intend to explore all options which may be available to them at such
time and permissible under all applicable laws and regulations, which may
include, without limitation, the solicitation of proxies at future meetings of
shareholders to elect nominees, and take such other actions, as may be necessary
or appropriate to further the objective of completing the Merger at $45 per
Share in cash, and/or the acquisition of Shares through open market purchases,
privately negotiated transactions, another tender offer, or otherwise upon such
terms and at such prices as they shall determine, which may be at prices other
than the price to be paid pursuant to the Offer. Parent and Purchaser also
reserve the right to dispose of Shares.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; EXCHANGE
LISTING AND EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS.
A new Section 16 is added to the Offer to Purchase as follows:
The purchase of Shares pursuant to the Offer will reduce the number of
Shares that might otherwise trade publicly and could reduce the number of
holders of Shares, which could adversely affect the liquidity and market value
of the remaining Shares held by the public. Following the Offer, a large
percentage of the outstanding Shares may be owned by Purchaser.
According to the NYSE's published guidelines, the NYSE would consider
delisting the Shares if, among other things, the number of record holders of at
least 100 Shares should fall below 1,200, the number of publicly held Shares
(exclusive of holdings of officers, directors and their families and other
concentrated holdings of 10% or more ("NYSE Excluded Holdings")) should fall
below 600,000 or the aggregate market value of publicly held Shares (exclusive
of NYSE Excluded Holdings) should fall below $5,000,000. If, as a result of the
purchase of Shares pursuant to the Offer or otherwise, the Shares no longer meet
the requirements of the NYSE for continued listing and the listing of the Shares
is discontinued, the market for the Shares could be adversely affected.
If the NYSE were to delist the Shares, it is possible that the Shares
would continue to trade on another securities exchange or in the
over-the-counter market and that price or other quotations would be reported by
such exchange or through the National Association of Securities Dealers
Automated Quotation System ("Nasdaq") or other sources. The extent of the public
market therefor and the availability of such quotations would depend, however,
upon such factors as the number of shareholders and/or the aggregate market
value of such securities remaining at such time, the interest in maintaining a
market in the Shares on the part of securities firms, the possible termination
of registration under the Exchange Act as described below and other factors.
Purchaser cannot predict whether the reduction in the number of Shares that
might otherwise trade publicly would have an adverse or beneficial effect on the
market price for or marketability of the Shares or whether it would cause future
market prices to be greater or less than the price at which Shares may be
acquired pursuant to the Offer.
The Shares are currently "margin securities" under the rules of the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board").
Among other things, this status has the effect of allowing lenders to extend
credit to shareholders who wish to use the Shares as collateral. Depending upon
factors similar to those described above with respect to NYSE eligibility,
following the Offer the Shares might no longer constitute "margin securities"
for purposes of the Federal Reserve Board's margin regulations, in which event
Shares could no longer be used as collateral for margin loans made by brokers.
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The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application by the Company to the SEC if the
Shares are not listed on a national securities exchange and there are fewer than
300 record holders of the Shares. The termination of registration of the Shares
under the Exchange Act would substantially reduce the information required to be
furnished by the Company to holders of Shares and to the SEC and would make
certain provisions of the Exchange Act, such as the short-swing profit recovery
provisions of Section 16(b), the requirement of furnishing a proxy statement in
connection with shareholders' meetings pursuant to Section 14(a), and the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions, no longer applicable to the Shares. In addition,
"affiliates" of the Company and persons holding "restricted securities" of the
Company may be deprived of the ability to dispose of such securities pursuant to
Rule 144 promulgated under the Securities Act of 1933, as amended.
If registration of the Shares under the Exchange Act were terminated,
the Shares would no longer be eligible for Nasdaq reporting.
8. MISCELLANEOUS. Parent and Purchaser have filed with the SEC an
amendment to the Schedule 14D-1 pursuant to Rule 14d-3 of the General Rules and
Regulations under the Securities Exchange Act, furnishing certain additional
information with respect to the Offer, and may file further amendments thereto.
The Schedule 14D-1, and any amendments thereto, including exhibits, may be
inspected at, and copies may be obtained from, the same places and in the same
manner as set forth in Section 7 of the Offer to Purchase (except that they will
not be available at the regional offices of the SEC).
Except as modified by this Third Supplement, the terms set forth in the
Offer to Purchase, the First Supplement, the Second Supplement and the related
Letters of Transmittal remain applicable in all respects to the Offer and this
Third Supplement should be read in conjunction with the Offer to Purchase, the
First Supplement, the Second Supplement and the related Letter of Transmittal.
SB ACQUISITION CORP.
April 30, 1997
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Manually executed facsimile copies of the Letter of Transmittal,
properly completed and duly signed, will be accepted. The Letter of Transmittal,
certificates for the Shares and any other required documents should be sent by
each shareholder of the Company or his broker, dealer, commercial bank, trust
company or other nominee to the Depositary at one of its addresses set forth
below:
The Depositary for the Offer is:
HARRIS TRUST COMPANY OF NEW YORK
By Mail: By Overnight Courier: By Hand:
Wall Street Station 77 Water Street, 4th Floor Receive Window
P.O. Box 1023 New York, NY 10005 77 Water Street, 5th Floor
New York, NY 10268-1023 New York, NY 10005
By Facsimile Transmission:
(for Eligible Institutions Only)
(212) 701-7636 or 7637
For Information Telephone (call collect):
(212) 701-7624
Any questions or requests for assistance or additional copies of the
Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may be directed to the Information Agent or the Dealer Manager at their
respective telephone numbers and locations listed below. You may also contact
your broker, dealer, commercial bank or trust company or other nominee for
assistance concerning the Offer.
The Information Agent for the Offer is:
GEORGESON & COMPANY INC.
Wall Street Plaza
New York, New York 10005
Telephone: (212) 440-9800
or
CALL TOLL FREE: (800) 223-2064
