<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT
(PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934)
----------------
CBI INDUSTRIES, INC.
(NAME OF SUBJECT COMPANY)
PRAXAIR, INC.
PX ACQUISITION CORP.
(BIDDERS)
COMMON STOCK, $2.50 PAR VALUE PER SHARE (AND THE ASSOCIATED RIGHTS)
(TITLE OF CLASS OF SECURITIES)
124800-10-3
(CUSIP NUMBER OF CLASS OF SECURITIES)
DAVID H. CHAIFETZ
VICE PRESIDENT, GENERAL COUNSEL
AND SECRETARY
PRAXAIR, INC.
39 OLD RIDGEBURY ROAD
DANBURY, CONNECTICUT 06810-5113
(203) 837-2000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER)
----------------
Copies to:
NEIL T. ANDERSON, ESQ.
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
(212) 558-4000
CALCULATION OF FILING FEE
----------------------------------------------------------
TRANSACTION VALUATION* AMOUNT OF FILING FEE**
----------------------------------------------------------
$1,433,700,704 $286,740.14
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* FOR THE PURPOSE OF CALCULATING THE FILING FEE ONLY.
THIS CALCULATION ASSUMES THE PURCHASE OF 44,803,147
SHARES (AND ASSOCIATED RIGHTS) OF COMMON STOCK, PAR
VALUE $2.50 PER SHARE ("SHARES"), OF CBI INDUSTRIES,
INC. (THE "COMPANY") (EQUAL TO THE SUM OF (I) 38,206,403
SHARES ISSUED AND OUTSTANDING AS OF JUNE 30, 1995,
ACCORDING TO THE COMPANY, (II) 5,272,044 SHARES RESERVED
FOR ISSUANCE UPON CONVERSION OF THE ISSUED AND
OUTSTANDING SHARES OF $2.27 CONVERTIBLE VOTING PREFERRED
STOCK, PAR VALUE $1.00 PER SHARE, ACCORDING TO THE
COMPANY, AND (III) 1,324,700 SHARES SUBJECT TO ISSUANCE
UPON EXERCISE OF OPTIONS FOR SHARES, ACCORDING TO THE
COMPANY), AT $32 PER SHARE.
** 1/50 OF ONE PERCENT OF TRANSACTION VALUATION.
[_]CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY RULE 0-11(A)(2)
AND IDENTIFY THE FILING WITH WHICH THE OFFSETTING FEE WAS PREVIOUSLY PAID.
IDENTIFY THE PREVIOUS FILING BY REGISTRATION STATEMENT NUMBER OR THE FORM OR
SCHEDULE AND THE DATE OF ITS FILING.
AMOUNT PREVIOUSLY PAID: NOT APPLICABLE. FILING PARTY: NOT
APPLICABLE.
FORM OR REGISTRATION: NOT APPLICABLE. DATE FILED: NOT
APPLICABLE.
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<PAGE>
CUSIP NO. 124800103
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Praxair, Inc.
(06-1249050)
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2. Check the Appropriate Box if a Member of a Group (a) [_]
(b) [_]
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3. SEC Use Only
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4. Sources of Funds
WC, BK
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5. Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(e) or 2(f) [_]
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6. Citizenship or Place of Organization
Delaware
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7. Aggregate Amount Beneficially Owned by Each Reporting
Person
79,200
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8. Check if the Aggregate Amount in Row (7) Excludes [_]
Certain Shares
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9. Percent of Class Represented by Amount in Row (7)
.0
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10. Type of Reporting Person
CO
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2
<PAGE>
CUSIP NO. 124800103
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1. Name of Reporting Person S.S. or I.R.S. Identification
No. of Above Person
PX Acquisition Corp.
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2. Check the Appropriate Box if a Member of a Group (a) [_]
(b) [_]
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3. SEC Use Only
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4. Sources of Funds
AF
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5. Check Box if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(f) [_]
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6. Citizen or Place of Organization
Delaware
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7. Aggregate Amount Beneficially Owned by Each Reporting Person
100
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8. Check if the Aggregate Amount in Row (7) Excludes [_]
Certain Shares
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9. Percent of Class Represented by Amount in Row (7)
.0
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10. Type of Reporting Person
CO
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3
<PAGE>
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is CBI Industries, Inc., a Delaware
corporation (the "Company"), which has its principal executive offices at 800
Jorie Boulevard, Oak Brook, Illinois, 60521-2268 (telephone number (708) 572-
7000).
(b) This schedule relates to the offer by PX Acquisition Corp., a Delaware
corporation (the "Purchaser") and wholly owned subsidiary of Praxair, Inc., a
Delaware corporation ("Praxair"), to purchase all outstanding shares of Common
Stock, par value $2.50 per share (the "Shares"), of the Company (including any
associated Rights) at $32.00 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 November 3, 1995 (the "Offer to Purchase") and the
related Letter of Transmittal, copies of which are attached hereto as Exhibits
(a)(1) and (a)(2), respectively. The information set forth in the
"Introduction" section of the Offer to Purchase is incorporated herein by
reference.
(c) The information set forth in the "The Tender Offer--6. Price Range of the
Shares; Dividends on the Shares" section of the Offer to Purchase is
incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d), (g) The information set forth in the "Introduction" and "The Tender
Offer--9. Certain Information Concerning the Purchaser and Praxair " sections
of, and Schedule I to, the Offer to Purchase is incorporated herein by
reference.
(e)-(f) None of the Purchaser or Praxair nor, to the best knowledge of the
Purchaser and Praxair, any of the persons listed in Schedule I to the Offer to
Purchase, has during the last five years (i) been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) been
a party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any
violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) The information set forth in the "Introduction" and "The Tender
Offer--11. Contacts and Transactions with the Company; Background of the Offer"
sections of the Offer to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in the "The Tender Offer--10. Source and
Amount of Funds" section of the Offer to Purchase is incorporated herein by
reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE PARENT.
(a)-(g) The information set forth in the "Introduction," "The Tender Offer--
7. Effect of the Offer on the Market for the Shares; Stock Quotation; Exchange
Act Registration; Margin Regulations" and "The Tender Offer--12. Purpose of the
Offer; Plans for the Company" sections of the Offer to Purchase is incorporated
herein by reference.
4
<PAGE>
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth in the "The Tender Offer--11. Contacts and
Transactions with the Company; Background of the Offer" section of the Offer to
Purchase is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES
Not applicable.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the "The Tender Offer--16. Fees and Expenses"
section of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN PARENTS.
The information set forth in the "The Tender Offer--9. Certain Information
Concerning the Purchaser and Praxair" section of the Offer to Purchase is
incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) Not applicable.
(b)-(c) The information set forth in the "The Tender Offer--15. Certain Legal
Matters" section of the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in the "The Tender Offer--7. Effect of the
Offer on the Market for the Shares; Stock Quotation; Exchange Act Registration;
Margin Regulations" section of the Offer to Purchase is incorporated herein by
reference.
(e) The information set forth in the "The Tender Offer--12. Purpose of the
Offer; Plans for the Company" section of the Offer to Purchase is incorporated
herein by reference.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal is incorporated herein by reference in its entirety.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase dated November 3, 1995.
(a)(2) Letter of Transmittal with respect to the Shares (and associated Rights).
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Form of letter, dated November 3, 1995, from CS First Boston Corporation
to brokers, dealers, commercial banks, trust companies and other
nominees.
(a)(5) Form of letter to clients for use by brokers, dealers, commercial banks,
trust companies and other nominees.
(a)(6) Form of summary advertisement dated November 3, 1995.
(a)(7) Text of press release dated November 1, 1995.
(a)(8) Text of press release dated November 3, 1995.
(a)(9) IRS Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
5
<PAGE>
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
(g) Complaint in Praxair, Inc. v. CBI Industries, Inc., filed in the Delaware
Court of Chancery on October 30, 1995.
6
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
PRAXAIR, INC.
/s/ David H. Chaifetz
By:__________________________________
Name: David H. Chaifetz
Title: Vice President, General
Counsel and Secretary
Dated: November 3, 1995
PX ACQUISITION CORP.
/s/ David H. Chaifetz
By:__________________________________
Name: David H. Chaifetz
Title: President--Secretary
7
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGES
------- ----------- ------------
<C> <S> <C>
(a)(1) Offer to Purchase dated November 3, 1995.
Letter of Transmittal with respect to the Shares (and
(a)(2) associated Rights).
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Form of letter, dated November 3, 1995, from CS First
Boston Corporation to brokers, dealers, commercial
banks, trust companies and other nominees.
(a)(5) Form of letter to clients for use by brokers, dealers,
commercial banks, trust companies and other nominees.
(a)(6) Form of summary advertisement dated November 3, 1995.
(a)(7) Text of press release dated November 1, 1995.
(a)(8) Text of press release dated November 3, 1995.
(a)(9) IRS Guidelines for Certification of Taxpayer
Identification Number on Substitute
Form W-9.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
(g) Complaint in Praxair, Inc. v. CBI Industries, Inc.,
filed in the Delaware Court of Chancery on October 30,
1995.
</TABLE>
<PAGE>
EXHIBIT 99.(A)(1)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Rights)
OF
CBI INDUSTRIES, INC.
AT
$32.00 NET PER SHARE
BY
PX ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
PRAXAIR, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, DECEMBER 4, 1995,
UNLESS THE OFFER IS EXTENDED.
---------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (i) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED BELOW)
THAT NUMBER OF SHARES (AS DEFINED BELOW) THAT WOULD REPRESENT AT LEAST A MA-
JORITY OF ALL OUTSTANDING SHARES ON A FULLY DILUTED BASIS ON THE DATE OF
PURCHASE, (ii) CBI INDUSTRIES, INC.'S (THE "COMPANY'S") RIGHTS (AS DEFINED
BELOW) HAVING BEEN REDEEMED BY THE BOARD OF DIRECTORS OF THE COMPANY OR PX
ACQUISITION CORP. (THE "PURCHASER") BEING SATISFIED, IN ITS SOLE DISCRE-
TION, THAT THE RIGHTS HAVE BEEN INVALIDATED OR ARE OTHERWISE INAPPLICABLE
TO THE OFFER AND THE SECOND STEP CASH MERGER (AS DEFINED BELOW), (iii)
THE PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT AFTER CON-
SUMMATION OF THE OFFER, THE RESTRICTIONS CONTAINED IN SECTION 203 OF THE
DELAWARE GENERAL CORPORATION LAW ("SECTION 203 OF THE DGCL") WILL NOT
APPLY TO THE SECOND STEP CASH MERGER, (iv) THE PURCHASER BEING SATIS-
FIED, IN ITS SOLE DISCRETION, THAT NO SUPERMAJORITY VOTE WILL BE RE-
QUIRED BY ARTICLES TENTH OR FIFTEENTH OF THE COMPANY'S RESTATED CER-
TIFICATE OF INCORPORATION, AS AMENDED (THE "RESTATED COMPANY CERTIFI-
CATE OF INCORPORATION"), TO APPROVE THE SECOND STEP CASH MERGER OR
THAT AFTER CONSUMMATION OF THE OFFER THAT THE PURCHASER WILL OTHER-
WISE POSSESS SUFFICIENT VOTING POWER TO EFFECT THE SECOND STEP CASH
MERGER WITHOUT THE AFFIRMATIVE VOTE OF ANY PERSON OTHER THAN THE
PURCHASER, AND (v) THE PURCHASER BEING SATISFIED, IN ITS SOLE
DISCRETION, THAT THE PURCHASER HAS OBTAINED SUFFICIENT FINANCING
TO ENABLE IT TO CONSUMMATE THE OFFER AND THE SECOND STEP CASH
MERGER. SEE THE INTRODUCTION AND SECTIONS 1, 14 AND 15 HEREIN.
---------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares (including the associated Rights) should either (i) complete and
execute the Letter of Transmittal (or manually executed facsimile thereof) in
accordance with the Instructions in the Letter of Transmittal, have such
stockholder's signature thereon guaranteed if required by Instruction 1 to the
Letter of Transmittal, mail or deliver the Letter of Transmittal (or such
facsimile), or, in the case of a book-entry transfer effected pursuant to the
procedure set forth in Section 2 herein, an Agent's Message (as defined below)
in lieu of the Letter of Transmittal, and any other required documents to the
Depositary and either deliver the certificates for such shares and, if
separate, the certificate(s) representing the associated Rights to the
Depositary along with the Letter of Transmittal (or facsimile) or deliver such
Shares (and Rights, if applicable) pursuant to the procedure for book-entry
transfer set forth in Section 2 herein or (ii) request such stockholder's
broker, dealer, bank, trust company or other nominee to effect the transaction
for such stockholder. Stockholders having Shares and, if applicable, Rights
registered in the name of a broker, dealer, bank, trust company or other
nominee are urged to contact such broker, dealer, bank, trust company or other
nominee if they desire to tender such Shares and, if applicable, Rights so
registered. Unless and until the Purchaser declares that the Rights Condition
(as defined below) is satisfied, stockholders will be required to tender one
Right for each Share tendered in order to effect a valid tender of such Share.
A stockholder who desires to tender Shares and Rights and whose certificates
for such Shares (and Rights, if applicable) are not immediately available, or
who cannot comply with the procedure for book-entry transfer on a timely
basis, or who cannot deliver all required documents to the Depositary prior to
the Expiration Date, may tender such Shares (and Rights, if applicable) by
following the procedure for guaranteed delivery set forth in Section 2 herein.
Questions and requests for assistance, or for additional copies of this
Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed
Delivery or other Offer documents may be directed to the Information Agent or
the Dealer Manager at their respective addresses and telephone numbers set
forth on the back cover of this Offer to Purchase. Holders of Shares may also
contact brokers, dealers, commercial banks and trust companies for assistance
concerning the Offer. Copies of the foregoing will be furnished at the
Purchaser's expense. No fees or commissions will be payable to brokers,
dealers or other persons other than the Dealer Manager and the Information
Agent for soliciting tenders of Shares pursuant to the Offer.
---------------
The Dealer Manager for the Offer is:
CS First Boston
November 3, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTRODUCTION............................................................. 1
THE TENDER OFFER......................................................... 5
1. Terms of the Offer................................................... 5
2. Procedure for Tendering Shares and Rights............................ 6
3. Withdrawal Rights.................................................... 10
4. Acceptance for Payment and Payment................................... 11
5. Certain Federal Income Tax Consequences.............................. 12
6. Price Range of the Shares; Dividends on the Shares................... 13
7. Effect of the Offer on the Market for the Shares; Stock Quotation;
Exchange Act Registration; Margin Regulations........................ 13
8. Certain Information Concerning the Company........................... 14
9. Certain Information Concerning the Purchaser and Praxair............. 16
10. Source and Amount of Funds........................................... 18
11. Contacts and Transactions with the Company; Background of the Offer.. 18
12. Purpose of the Offer; Plans for the Company.......................... 21
13. Dividends and Distributions.......................................... 29
14. Certain Conditions of the Offer...................................... 29
15. Certain Legal Matters................................................ 33
16. Fees and Expenses.................................................... 37
17. Miscellaneous........................................................ 38
</TABLE>
Schedule I--Directors and Executive Officers of Praxair and the Purchaser
i
<PAGE>
To the Holders of Common Stock (including the Associated Rights) of CBI
Industries, Inc.:
INTRODUCTION
PX Acquisition Corp., a Delaware corporation (the "Purchaser"), which is a
wholly owned subsidiary of Praxair, Inc., a Delaware corporation ("Praxair"),
hereby offers to purchase all outstanding shares of Common Stock, par value
$2.50 per share (the "Shares"), of CBI Industries, Inc., a Delaware
corporation (the "Company"), together with (unless and until the Purchaser
declares that the Rights Condition (as defined below) is satisfied) the
associated rights (the "Rights") issued pursuant to the Rights Agreement,
dated as of March 4, 1986, as amended (the "Rights Agreement"), between the
Company and First Chicago Trust Company of New York, as Rights Agent (the
"Rights Agent"), at a price of $32.00 per Share (and associated Right), net to
the seller in cash, without interest thereon (the "Offer Price"), upon the
terms and subject to the conditions set forth in this Offer to Purchase and in
the related Letter of Transmittal (which, together with any amendments or
supplements hereto or thereto, collectively constitute the "Offer"). All
references herein to "Rights" shall include all benefits that may inure to
holders of the Rights pursuant to the Rights Agreement and, unless the context
otherwise requires, all references herein to "Shares" shall include the
associated Rights.
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares pursuant to the Offer.
The Purchaser will pay all fees and expenses of CS First Boston Corporation
("CS First Boston"), which is acting as Dealer Manager (the "Dealer Manager"),
The Bank of New York, which is acting as the Depositary (the "Depositary"),
and Morrow & Co., Inc., which is acting as Information Agent (the "Information
Agent"), incurred in connection with the Offer. See Section 16 herein.
Over the course of the past six months Mr. H. William Lichtenberger, the
Chairman and Chief Executive Officer of Praxair, and Mr. John E. Jones, the
Chairman, President and Chief Executive Officer of the Company, have had
several discussions regarding a possible transaction to effect a business
combination involving the Company and Praxair. On October 20, 1995, Mr. Jones
indicated to Mr. Lichtenberger that the Company had decided not to continue
such discussions. On October 27, 1995, in a letter to Mr. Jones, Mr.
Lichtenberger proposed to the Board of Directors of the Company a merger (the
"Proposed Merger") pursuant to which the Company's stockholders would receive
$32.00 for each Share. Praxair proposed to pay this $32.00 consideration in
either cash or shares of common stock of Praxair. Praxair's willingness to
effect the Proposed Merger was subject to the negotiation of a mutually
satisfactory definitive merger agreement containing customary terms and
closing conditions. The Company has thus far been unwilling to continue to
discuss the Proposed Merger with representatives of Praxair (see Section 11
herein) and, accordingly, the Purchaser has commenced the Offer. However,
Praxair intends to continue to seek to negotiate with the Company with respect
to the Proposed Merger. The Purchaser reserves the right to amend or terminate
the Offer if such negotiations result in a merger agreement with the Company.
In such event, the consideration to be received by the holders of Shares could
include or consist of cash, shares of Praxair common stock, other securities
or any combination thereof. Accordingly, under such circumstances, such
negotiations could result in, among other things, termination of the Offer
(see Section 14 herein) and submission of the Proposed Merger to the Company's
stockholders for their approval. Praxair anticipates that a period of no more
than 60 to 90 days from the signing of a definitive merger agreement regarding
the Proposed Merger would be required for consummation of the Proposed Merger.
The purpose of the Offer is to enable the Purchaser, if it is not able to
effect the Proposed Merger, to acquire control of, and the entire equity
interest in, the Company. The Offer is intended to facilitate the acquisition
of all the Shares. If the Offer is consummated, then as soon as practicable
thereafter, the Purchaser will seek to consummate a merger between the Company
and the Purchaser or another direct or indirect wholly owned subsidiary of
Praxair (the "Second Step Cash Merger"). The purpose of the Second Step Cash
Merger is to acquire all Shares not tendered and purchased pursuant to the
Offer or otherwise. Pursuant to the Second Step Cash Merger, each then
outstanding Share (other than Shares owned by the Purchaser or Praxair or any
of their subsidiaries, Shares held in the treasury of the Company and Shares
owned by stockholders who perfect
1
<PAGE>
dissenters' rights under the Delaware General Corporation Law (the "DGCL"))
would be converted into the right to receive an amount in cash equal to the
price per Share paid pursuant to the Offer.
Although the Purchaser will seek to have the Company consummate the Second
Step Cash Merger as soon as practicable after consummation of the Offer, if
the Board of Directors of the Company opposes the Offer and the Second Step
Cash Merger, certain terms of the Rights, the DGCL and the Restated Company
Certificate of Incorporation may affect the ability of the Purchaser to
consummate the Offer, to obtain control of the Company and to effect the
Second Step Cash Merger. Accordingly, timing of the consummation of the Offer
and the Second Step Cash Merger will depend upon a variety of factors and
legal requirements, the actions of the Board of Directors of the Company, the
number of Shares (if any) acquired by the Purchaser pursuant to the Offer and
whether the conditions to the Offer are satisfied or waived. See Section 12
herein.
Certain Federal income tax consequences of the sale of Shares pursuant to
the Offer are described in Section 5 herein.
The Offer is conditioned upon, among other things, the following:
Minimum Tender Condition. THE OFFER IS CONDITIONED UPON THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED BELOW) AT
LEAST THAT NUMBER OF SHARES (THE "MINIMUM NUMBER OF SHARES") THAT WOULD
REPRESENT A MAJORITY OF ALL OUTSTANDING SHARES ON A FULLY DILUTED BASIS ON THE
DATE OF PURCHASE (THE "MINIMUM TENDER CONDITION"). FOR PURPOSES OF THE OFFER
(OTHER THAN IN THE CONTEXT OF FINANCIAL STATEMENT INFORMATION), "ON A FULLY
DILUTED BASIS" MEANS, AS OF ANY DATE, THE NUMBER OF SHARES OUTSTANDING
TOGETHER WITH SHARES THAT THE COMPANY IS REQUIRED TO ISSUE PURSUANT TO
OBLIGATIONS OUTSTANDING AT THAT DATE UNDER CONVERTIBLE SECURITIES, STOCK
OPTIONS OR OTHERWISE. THE PURCHASER RESERVES THE RIGHT (SUBJECT TO THE
APPLICABLE RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION
(THE "COMMISSION")) TO WAIVE OR REDUCE THE MINIMUM TENDER CONDITION AND TO
ELECT TO PURCHASE, PURSUANT TO THE OFFER, FEWER THAN THE MINIMUM NUMBER OF
SHARES. SEE SECTIONS 1 AND 14 HEREIN.
According to the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1995 (the "Company 10-Q"), as of June 30, 1995, there were
38,206,403 Shares issued and outstanding. According to the Company 10-Q, as of
June 30, 1995, there were 3,514,696 issued and outstanding shares of $2.27
Convertible Voting Preferred Stock, Series C, par value $1.00 per Share (the
"Convertible Preferred Shares"). According to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994 (the "Company 10-K"),
each Convertible Preferred Share is convertible, at the option of the holder
at any time, into 1.5 Shares (subject to adjustment), which conversion would
result in the issuance of 5,272,044 Shares. According to the Company 10-K, as
of December 31, 1994, there were 1,324,700 Shares subject to issuance upon
exercise of outstanding options. Based on the foregoing and assuming that no
options were granted after December 31, 1994, and no options were exercised or
expired from January 1, 1995 through June 30, 1995 and assuming no Shares or
Convertible Preferred Shares were issued or reacquired since July 1, 1995,
there would be 44,803,147 Shares outstanding on a fully diluted basis and the
Minimum Number of Shares would be 22,401,574. However, the actual Minimum
Number of Shares will depend on the facts as they exist on the date of
purchase.
The Offer is not being made for (nor will any tenders be accepted of) the
Convertible Preferred Shares. Holders of the Convertible Preferred Shares who
wish to participate in the Offer must first convert their Convertible
Preferred Shares into Shares in accordance with the terms of such Convertible
Preferred Shares. Based on public information available to the Purchaser, the
Purchaser believes that each share of Convertible Preferred Shares is
convertible into 1.5 Shares (subject to adjustment). If the Purchaser obtains
control of the Company's Board of Directors, it intends to cause the Company
to redeem (the "Redemption") the Convertible Preferred Shares prior to the
Second Step Cash Merger. The Convertible Preferred Shares are redeemable at a
redemption price of $32.40 per share, plus accrued dividends. Each Convertible
Preferred Share is entitled to vote with the holders of Shares, voting
together as a single group, and is entitled to 1.5 votes per share (subject to
adjustment). For information regarding the right of the holders of Preferred
Stock to vote on certain matters, including certain mergers, see Section 12.
2
<PAGE>
Rights Condition. THE OFFER IS CONDITIONED UPON THE RIGHTS HAVING BEEN
REDEEMED BY THE BOARD OF DIRECTORS OF THE COMPANY OR THE PURCHASER BEING
SATISFIED, IN ITS SOLE DISCRETION, THAT THE RIGHTS HAVE BEEN INVALIDATED OR
ARE OTHERWISE INAPPLICABLE TO THE OFFER AND THE SECOND STEP CASH MERGER (THE
"RIGHTS CONDITION"). THE RIGHTS ARE DESCRIBED IN THE COMPANY'S REGISTRATION
STATEMENT ON FORM 8-A DATED MARCH 7, 1986, AS AMENDED BY THE FORMS 8-A/A DATED
DECEMBER 20, 1994 AND MARCH 8, 1995 AND THE EXHIBITS THERETO (THE "COMPANY 8-
A"), AND A SUMMARY OF THAT DESCRIPTION AND THE RIGHTS AGREEMENT IS PROVIDED
BELOW AND MORE FULLY IN SECTION 12 HEREIN.
The Rights Agreement provides that, until the close of business on the
Distribution Date (as defined below), the Rights will be transferred with and
only with the certificates for Shares and the surrender for transfer of any
certificates for Shares will also constitute the surrender for transfer of the
Rights associated with the Shares represented by such certificate.
Based on publicly available information, the Purchaser believes that, as of
the date of this Offer to Purchase, the Rights were not exercisable,
certificates for Rights had not been issued and the Rights were evidenced by
the certificates for Shares to which the Rights are attached. The Purchaser
believes that, as a result of the announcement of commencement of the Offer,
the Distribution Date may occur as early as November 15, 1995, unless prior to
such date the Company's Board of Directors redeems the Rights, amends the
Rights Agreement to make the Rights inapplicable to the Offer or delays the
Distribution Date.
UNLESS THE RIGHTS CONDITION IS SATISFIED, STOCKHOLDERS WILL BE REQUIRED TO
TENDER TWO-THIRDS ( 2/3) OF A RIGHT (SUBJECT TO ADJUSTMENT) FOR EACH SHARE
TENDERED IN ORDER TO EFFECT A VALID TENDER OF SHARES IN ACCORDANCE WITH THE
PROCEDURES SET FORTH IN SECTION 2 HEREIN. ACCORDINGLY, STOCKHOLDERS WHO SELL
THEIR RIGHTS SEPARATELY FROM THEIR SHARES AND DO NOT OTHERWISE ACQUIRE RIGHTS
MAY NOT BE ABLE TO SATISFY THE REQUIREMENTS OF THE OFFER FOR A VALID TENDER OF
SHARES. UNLESS THE DISTRIBUTION DATE OCCURS, A TENDER OF SHARES WILL ALSO
CONSTITUTE A TENDER OF THE ASSOCIATED RIGHTS.
On October 30, 1995, Praxair commenced litigation against the Company and
members of the Board of Directors of the Company in the Delaware Court of
Chancery seeking, among other things, an order compelling the Board of
Directors of the Company to redeem the Rights or to amend the Rights Agreement
to make the Rights inapplicable to any acquisition proposal that equals or
exceeds the Proposed Merger and declaring that the Company's Board of
Directors are in breach of their fiduciary duty by continuing to deploy the
Rights Agreement.
Praxair and the Purchaser are hereby requesting that the Board of Directors
of the Company redeem the Rights or amend the Rights Agreement to make the
Rights inapplicable to the Offer and the Second Step Cash Merger and that the
Board of Directors of the Company take no action to extend the expiration of
the Rights or the Rights Agreement or enter into any similar agreement.
However, there can be no assurance that the Board of Directors of the Company
will do so.
Redemption of the Rights (or an amendment of the Rights Agreement to make
the Rights inapplicable to the Offer and the Second Step Cash Merger) would
satisfy the Rights Condition.
Business Combination Condition. THE OFFER IS CONDITIONED UPON THE PURCHASER
BEING SATISFIED, IN ITS SOLE DISCRETION, AFTER CONSUMMATION OF THE OFFER, THAT
THE RESTRICTIONS CONTAINED IN SECTION 203 OF THE DGCL WILL NOT APPLY TO THE
SECOND STEP CASH MERGER (THE "BUSINESS COMBINATION CONDITION"). A SUMMARY OF
THE PROVISIONS OF SECTION 203 OF THE DGCL IS SET FORTH IN SECTION 15 HEREIN.
Section 203 of the DGCL, in general, prohibits a Delaware corporation such
as the Company from engaging in a Business Combination (as defined in Section
15 herein) with an Interested Stockholder (as defined in Section 15 herein)
for a period of three years following the date that such person became an
Interested Stockholder unless (a) prior to the date that such person became an
Interested Stockholder, the board of directors of the corporation approved
either the Business Combination or the transaction that resulted in the
stockholder becoming an
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Interested Stockholder, (b) upon consummation of the transaction that resulted
in the stockholder becoming an Interested Stockholder, the Interested
Stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, excluding stock held by
directors who are also officers of the corporation and employee stock plans
that do not provide employees with the right to determine confidentially
whether shares held subject to the plan will be tendered in a tender or
exchange offer, or (c) on or subsequent to the date such person became an
Interested Stockholder, the Business Combination is approved by the board of
directors of the corporation and authorized at a meeting of stockholders, and
not by written consent, by the affirmative vote of the holders of at least 66
2/3% of the outstanding voting stock of the corporation not owned by the
Interested Stockholder. See Section 15 herein.
The Purchaser and Praxair are hereby requesting that the Company's Board of
Directors adopt a resolution approving and recommending the Offer and the
Second Step Cash Merger for purposes of Section 203 of the DGCL. However,
there can be no assurance that the Board of Directors of the Company will do
so.
Approval of the Offer and the Second Step Cash Merger by the Board of
Directors of the Company under Section 203 of the DGCL would satisfy the
Business Combination Condition.
Articles Condition. THE OFFER IS CONDITIONED UPON THE PURCHASER BEING
SATISFIED, IN ITS SOLE DISCRETION, THAT NO SUPERMAJORITY VOTE WILL BE REQUIRED
BY ARTICLE TENTH ("ARTICLE TENTH") OR ARTICLE FIFTEENTH ("ARTICLE FIFTEENTH")
OF THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION TO APPROVE THE SECOND
STEP CASH MERGER OR THAT AFTER CONSUMMATION OF THE OFFER THAT THE PURCHASER
WILL OTHERWISE POSSESS SUFFICIENT VOTING POWER TO EFFECT THE SECOND STEP CASH
MERGER WITHOUT THE AFFIRMATIVE VOTE OF ANY PERSON OTHER THAN THE PURCHASER. A
SUMMARY OF THE ARTICLES IS PROVIDED BELOW AND MORE FULLY IN SECTION 12 HEREIN.
Article Tenth requires the affirmative vote of holders of not less than two-
thirds ( 2/3) of the outstanding Shares entitled to vote and the affirmative
vote of not less than two-thirds ( 2/3) of each series of shares of preferred
stock of the Company entitled to vote as a class on such issue or, where the
Board of Directors of the Company has recommended such action, the affirmative
vote of holders of a majority of the outstanding Shares entitled to vote and
the affirmative vote of a majority of each series of the outstanding shares of
preferred stock of the Company entitled to vote as a class on such issue to
effect, among other things, a merger or consolidation. See Section 12 herein.
Currently, the Company does not have any series of shares of preferred stock
entitled by its terms to vote as a class on any matter. The Purchaser does not
anticipate including in the terms of the Second Step Cash Merger any provision
that would give any series of shares of preferred stock a right to vote as a
class on such merger under the DGCL.
In addition to any affirmative vote required by law or any other article of
the Restated Company Certificate of Incorporation, Article Fifteenth requires
the affirmative vote by the holders of at least 80% of the then outstanding
Shares entitled to vote and the affirmative vote of at least 80% of each
series of the outstanding shares of preferred stock of the Company entitled to
vote as a class on such issue to approve Business Combinations (as defined in
Section 12 herein) involving an Interested Stockholder (as defined in Section
12 herein), unless (i) the Business Combination is either approved by a
majority of the Continuing Directors (as defined below) or (ii) all of the
Price and Procedural Requirements (as defined in Section 12 herein) are met.
See Section 12 herein.
Praxair and the Purchaser are hereby requesting that the Board of Directors
of the Company adopt a resolution approving and recommending the Second Step
Cash Merger pursuant to the Articles. However, there can be no assurance that
the Board of Directors of the Company will do so.
Approval and recommendation of the Second Step Cash Merger by the Board of
Directors of the Company or, in the case of Article Fifteenth, the
satisfaction of certain specified price criteria and procedural requirements
would satisfy the Articles Condition. See Section 12 herein.
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The Financing Condition. THE OFFER IS CONDITIONED UPON THE PURCHASER BEING
SATISFIED, IN ITS SOLE DISCRETION, THAT THE PURCHASER HAS OBTAINED SUFFICIENT
FINANCING TO ENABLE IT TO CONSUMMATE THE OFFER AND THE SECOND STEP CASH MERGER
(THE "FINANCING CONDITION"). SEE SECTION 10 HEREIN FOR A DESCRIPTION OF THE
PLANS OF THE PURCHASER FOR FINANCING THE OFFER AND THE SECOND STEP CASH
MERGER.
Certain other conditions to the Offer are described in Section 14 herein.
The Purchaser reserves the right (but shall not be obligated) to waive any or
all such conditions. See Sections 1, 12, 14 and 15 herein.
THE TENDER OFFER
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of such extension or
amendment), the Purchaser will accept for payment, and pay for, all Shares
validly tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 3 herein. The term "Expiration Date" means 12:00
Midnight, New York City time, on Monday, December 4, 1995, unless and until
the 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 mean the latest time and date at which the Offer, as so extended by the
Purchaser, will expire.
THE OFFER IS CONDITIONED UPON SATISFACTION OF THE MINIMUM TENDER CONDITION,
THE RIGHTS CONDITION, THE BUSINESS COMBINATION CONDITION, THE ARTICLES
CONDITION, THE FINANCING CONDITION, THE EXPIRATION OR TERMINATION OF THE
WAITING PERIOD IMPOSED BY THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF
1976, AS AMENDED, AND THE REGULATIONS THEREUNDER (THE "HSR ACT") AND THE
SATISFACTION OF THE OTHER CONDITIONS SET FORTH IN SECTION 14 HEREIN.
Subject to the applicable rules and regulations of the Commission, the
Purchaser 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 or facts set
forth in Section 14 herein shall have occurred, (a) to extend the period of
time during which the Offer is open, and thereby delay acceptance for payment
of and the payment for any Shares, by giving oral or written notice of such
extension to the Depositary and (b) to amend the Offer in any other respect by
giving oral or written notice of such amendment to the Depositary. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE FOR TENDERED SHARES,
WHETHER OR NOT THE PURCHASER EXERCISES ITS RIGHT TO EXTEND THE OFFER.
If by 12:00 Midnight, New York City time, on Monday, December 4, 1995 (or
any date or time then set as the Expiration Date), any or all of the
conditions to the Offer have not been satisfied or waived, the Purchaser
reserves the right (but shall not be obligated), subject to the applicable
rules and regulations of the Commission, (a) to terminate the Offer and not
accept for payment or pay for any Shares and return all tendered Shares to
tendering stockholders, (b) to waive all the unsatisfied conditions and accept
for payment and pay for all Shares validly tendered prior to the Expiration
Date and not theretofore withdrawn, (c) to extend the Offer and, subject to
the right of stockholders to withdraw Shares until the Expiration Date, retain
the Shares that have been tendered during the period or periods for which the
Offer is extended or (d) to amend the Offer.
There can be no assurance that the Purchaser will exercise its right to
extend the Offer. Any extension, amendment or termination will be followed as
promptly as practicable by public announcement. In the case of an extension,
Rule 14e-1(d) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires that the announcement be issued no later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled Expiration Date in accordance with the public announcement
requirements of Rule 14d-4(c) under the Exchange Act. Subject to applicable
law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which
require that any material change in the information published, sent or given
to stockholders in connection with the Offer be promptly disseminated to
stockholders in a manner reasonably designed to inform stockholders of such
change), and without limiting the manner in which the Purchaser may choose to
make any public announcement, the Purchaser will not have any obligation to
publish, advertise or otherwise communicate
5
<PAGE>
any such public announcement other than by making a release to the Dow Jones
News Service. As used in this Offer to Purchase, "business day" has the
meaning set forth in Rule 14d-1 under the Exchange Act.
If the Purchaser extends the Offer or if the Purchaser is delayed in its
acceptance for payment of, or payment (whether before or after its acceptance
for payment of Shares) for, Shares or it is unable to pay for Shares pursuant
to the Offer for any reason, then, without prejudice to the Purchaser's rights
under the Offer, the Depositary may retain tendered Shares on behalf of the
Purchaser, and such Shares may not be withdrawn except to the extent tendering
stockholders are entitled to withdrawal rights as described in Section 3
herein. However, the ability of the Purchaser to delay the payment for Shares
that the Purchaser has accepted for payment is limited by Rule 14e-1(c) under
the Exchange Act, which requires that a bidder pay the consideration offered
or return the securities deposited by or on behalf of holders of securities
promptly after the termination or withdrawal of such bidder's offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will disseminate additional tender offer materials and extend
the Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under
the Exchange Act. 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 the percentage of
securities sought, will depend upon the facts and circumstances then existing,
including the relative materiality of the changed terms or information. With
respect to a change in price or a change in the percentage of securities
sought, a minimum extension of the Offer of 10 business days is generally
required to allow for adequate dissemination to stockholders and investor
response.
Requests are being made to the Company pursuant to Rule 14d-5 of the
Exchange Act and Section 220 of the DGCL for the use of the Company's
stockholder lists and security position listings for the purpose of
disseminating the Offer to holders of Shares. This Offer to Purchase, the
related Letter of Transmittal and the other relevant materials will be mailed
to record holders of Shares, and will be furnished to brokers, dealers, banks,
trust companies and similar persons whose names, or the names of whose
nominees, appear on the stockholder lists, or, if applicable, who are listed
as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of Shares, by the Purchaser
following receipt of such lists or listings from the Company, or by the
Company if the Company so elects.
2. PROCEDURE FOR TENDERING SHARES AND RIGHTS
Valid Tender. For a stockholder validly to tender Shares and Rights pursuant
to the Offer, either (a) a properly completed and duly executed Letter of
Transmittal (or a manually executed facsimile thereof) in accordance with the
Instructions of the Letter of Transmittal, with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message in
lieu of a Letter of Transmittal, and any other required documents, must be
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase prior to the Expiration Date and either certificates
for tendered Shares (and Rights, if applicable) must be received by the
Depositary at one of such addresses or such Shares and Rights must be
delivered pursuant to the procedures for book-entry transfer set forth below
(and a Book-Entry Confirmation (as defined below) received by the Depositary),
in each case prior to the Expiration Date, or (b) the tendering stockholder
must comply with the guaranteed delivery procedures set forth below.
The Offer is not being made for (nor will any tenders be accepted of) the
Convertible Preferred Shares. Holders of the Convertible Preferred Shares who
wish to participate in the Offer must first convert their Convertible
Preferred Shares into Shares in accordance with the terms of such Convertible
Preferred Shares. Based on public information available to the Purchaser and
Praxair, Praxair believes that each share of Convertible Preferred Shares is
convertible into 1.5 Shares (subject to adjustment).
UNLESS THE RIGHTS CONDITION IS SATISFIED, STOCKHOLDERS WILL BE REQUIRED TO
TENDER TWO-THIRDS ( 2/3) OF A RIGHT (SUBJECT TO ADJUSTMENT) FOR EACH SHARE
TENDERED IN ORDER TO EFFECT A VALID TENDER OF SHARES.
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ACCORDINGLY, STOCKHOLDERS WHO SELL THEIR RIGHTS SEPARATELY FROM THEIR SHARES
AND DO NOT OTHERWISE ACQUIRE RIGHTS MAY NOT BE ABLE TO SATISFY THE
REQUIREMENTS OF THE OFFER FOR A VALID TENDER OF SHARES. UNLESS THE
DISTRIBUTION DATE OCCURS, A TENDER OF SHARES WILL ALSO CONSTITUTE A TENDER OF
THE ASSOCIATED RIGHTS.
Until the close of business on the Distribution Date, the Rights will be
transferred with and only with the certificates for Shares and the surrender
for transfer of any certificates for Shares will also constitute the transfer
of the Rights associated with the Shares represented by such certificates.
If the Distribution Date occurs and separate certificates representing the
Rights are distributed to holders of Shares prior to the time a holder's
Shares are tendered pursuant to the Offer, certificates representing a number
of Rights equal to the number of Shares tendered must be delivered to the
Depositary, or, if available, a Book-Entry Confirmation received by the
Depositary with respect thereto, in order for such Shares to be validly
tendered. If the Distribution Date occurs and separate certificates
representing the Rights are not distributed prior to the time Shares are
tendered pursuant to the Offer, Rights may be tendered prior to a stockholder
receiving separate certificates for Rights by use of the guaranteed delivery
procedure described below. A tender of Shares constitutes an agreement by the
tendering stockholder to deliver certificates representing a number of Rights
equal to the number of Shares tendered pursuant to the Offer to the Depositary
prior to expiration of the period permitted by such guaranteed delivery
procedures for delivery of certificates for, or a Book-Entry Confirmation with
respect to, Rights (the "Rights Delivery Period"). However, after expiration
of the Rights Delivery Period, the Purchaser may elect to reject as invalid a
tender of Shares with respect to which certificates for, or a Book-Entry
Confirmation with respect to, an equal number of Rights have not been received
by the Depositary. Nevertheless, the Purchaser will be entitled to accept for
payment Shares tendered by a stockholder prior to receipt of the certificates
for the Rights required to be tendered with such Shares, or a Book-Entry
Confirmation with respect to such Rights, and either (a) subject to complying
with applicable rules and regulations of the Commission, withhold payment for
such Shares pending receipt of the certificates for, or a Book-Entry
Confirmation with respect to, such Rights or (b) make payment for Shares
accepted for payment pending receipt of the certificates for, or a Book-Entry
Confirmation with respect to, such Rights in reliance upon the agreement of a
tendering stockholder to deliver Rights and such guaranteed delivery
procedures. Any determination by the Purchaser to make payment for Shares in
reliance upon such agreement and such guaranteed delivery procedures or, after
expiration of the Rights Delivery Period, to reject a tender as invalid will
be made in the sole and absolute discretion of the Purchaser.
The Depositary will establish accounts with respect to the Shares at The
Depository Trust Company, the Midwest Securities Trust Company and the
Philadelphia Depository Trust Company (each a "Book-Entry Transfer Facility"
and, collectively, 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 any of the Book-Entry Transfer
Facilities' systems may make book-entry transfer of Shares by causing a Book-
Entry Transfer Facility to transfer such Shares into the Depositary's account
in accordance with such Book-Entry Transfer Facility's procedures for such
transfer. However, although delivery of Shares may be effected through book-
entry delivery into the Depositary's account at a Book-Entry Transfer
Facility, the Letter of Transmittal (or facsimile thereof), properly completed
and duly executed, with any required signature guarantees, or an Agent's
Message in lieu of the Letter of Transmittal, and any other required
documents, must, in any case, be transmitted to, and received by, the
Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase prior to the Expiration Date, or the tendering stockholder must
comply with the guaranteed delivery procedures described below. If the
Distribution Date occurs, the Depositary will also make a request to establish
an account with respect to the Rights at each of the Book-Entry Transfer
Facilities, but no assurance can be given that book-entry transfer of Rights
will be available. If book-entry transfer of Rights is available, the
foregoing book-entry transfer procedures will also apply to Rights. If book-
entry transfer of Rights is not available and the Distribution Date occurs, a
tendering stockholder will be required to tender Rights by means of physical
delivery to the Depositary of certificates for Rights (in which event
references in this Offer to Purchase to Book-Entry Confirmations with respect
to Rights will be inapplicable). The confirmation of a book-entry transfer of
Shares or Rights into the Depositary's account at a Book-Entry Transfer
Facility as described above is referred to herein
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<PAGE>
as a "Book-Entry Confirmation." Delivery of documents to a Book-Entry Transfer
Facility in accordance with such Book-Entry Transfer Facility's procedures
does not constitute delivery to the Depositary.
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility
has received an express acknowledgement from the participant in such Book-
Entry Transfer Facility tendering the Shares that such participant has
received and agrees to be bound by the terms of the Letter of Transmittal and
that the Purchaser may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF SHARES, RIGHTS, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES
WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ENSURE TIMELY DELIVERY.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (a) if the Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Section, includes any participant
in any of the Book-Entry Transfer Facilities' systems whose name appears on a
security position listing as the owner of the Shares) of Shares and Rights
tendered therewith and such registered holder has not completed either the box
entitled "Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal or (b) if such Shares and Rights
are tendered for the account of a financial institution (including most
commercial banks, savings and loan associations and brokerage houses) that is
a participant in the Security Transfer Agents Medallion Program, the New York
Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange
Medallion Program (each, an "Eligible Institution"). In all other cases, all
signatures on the Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instructions 1 and 5 to the Letter of Transmittal. If the
certificates for Shares or Rights are registered in the name of a person other
than the signer of the Letter of Transmittal, or if payment is to be made or
certificates for Shares or Rights not tendered or not accepted for payment are
to be returned to a person other than the registered holder of the
certificates surrendered, the tendered certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered holders or owners appear on the certificates,
with the signatures on the certificates or stock powers guaranteed as
aforesaid. See Instructions 1 and 5 to the Letter of Transmittal.
Guaranteed Delivery. A stockholder who desires to tender Shares and Rights
pursuant to the Offer and whose certificates for Shares (and Rights, if
applicable) are not immediately available (including because certificates for
Rights have not yet been distributed by the Rights Agent), or who cannot
comply with the procedure for book-entry transfer on a timely basis, or who
cannot deliver all required documents to the Depositary prior to the
Expiration Date, may tender such Shares (and Rights, if applicable) by
following all of the procedures set forth below:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser, is
received by the Depositary, as provided below, prior to the
Expiration Date; and
(iii) the certificates for all tendered Shares (and Rights, if
applicable), in proper form for transfer (or a Book-Entry
Confirmation with respect to all such Shares (and Rights, if
applicable), together with a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), with any required
signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message in lieu of the Letter of Transmittal), and any other
required documents, are received by the Depositary
8
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within (a) in the case of Shares, three trading days after the date
of execution of such Notice of Guaranteed Delivery or (b) in the case
of Rights, a period ending on the later of (1) three trading days
after the date of execution of such Notice of Guaranteed Delivery or
(2) three business days (as defined above) after the date
certificates for Rights are distributed to stockholders by the Rights
Agent. A "trading day" is any day on which the New York Stock
Exchange, Inc. (the "NYSE") is open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the Depositary
or transmitted by telegram, facsimile transmission or mail to the Depositary
and must include a guarantee by an Eligible Institution in the form set forth
in such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (a) certificates for (or a timely Book-Entry
Confirmation with respect to) such Shares and, if the Distribution Date
occurs, certificates for (or a timely Book-Entry Confirmation, if available,
with respect to) the associated Rights (unless the Purchaser elects to make
payment for such Shares pending receipt of the certificates for, or a Book-
Entry Confirmation with respect to, such Rights as described above), (b) a
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees (or, in the case of a book-
entry transfer, an Agent's Message in lieu of the Letter of Transmittal) and
(c) any other documents required by the Letter of Transmittal. Accordingly,
tendering stockholders may be paid at different times depending upon when
certificates for Shares (and Rights, if applicable) or Book-Entry
Confirmations with respect to Shares (and Rights, if applicable) are actually
received by the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON
THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF
ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
If the Rights Condition is satisfied, the guaranteed delivery procedures
with respect to certificates for Rights and the requirement for the tender of
Rights will no longer apply.
The valid tender of Shares and, if applicable, Rights pursuant to one of the
procedures described above will constitute a binding agreement between the
tendering stockholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
Appointment. By executing a Letter of Transmittal as set forth above, the
tendering stockholder will irrevocably appoint designees of the Purchaser as
such stockholder's attorneys-in-fact and proxies in the manner set forth in
the Letter of Transmittal, each with full power of substitution, to the full
extent of such stockholder's rights with respect to the Shares and Rights
tendered by such stockholder and accepted for payment by the Purchaser and
with respect to any and all other Shares, Rights or other securities or rights
issued or issuable in respect of such Shares and Rights on or after the date
of this Offer to Purchase. All such proxies will be considered coupled with an
interest in the tendered Shares and Rights. Such appointment will be effective
when, and only to the extent that, the Purchaser accepts for payment Shares
tendered by such stockholder as provided herein. Upon such appointment, all
prior powers of attorney, proxies and consents given by such stockholder with
respect to such Shares, Rights or other securities or rights will, without
further action, be revoked and no subsequent powers of attorney, proxies,
consents or revocations may be given (and, if given, will not be deemed
effective). The designees of the Purchaser will thereby be empowered to
exercise all voting and other rights with respect to such Shares, Rights and
other securities or rights in respect of any annual, special or adjourned
meeting of the Company's stockholders, actions by written consent in lieu of
any such meeting or otherwise, as they in their sole discretion deem proper.
The Purchaser reserves the right to require that, in order for Shares and
Rights to be deemed validly tendered, immediately upon the Purchaser's
acceptance for payment of such Shares and Rights, the Purchaser must be able
to exercise full voting consent and other rights with respect to such Shares,
Rights and other securities or rights, including voting at any meeting of
stockholders.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
or Rights will be determined by the Purchaser in its sole discretion, which
determination will be final and binding. The Purchaser 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 or payment for which may, in the opinion of
the Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute
right to waive any
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defect or irregularity in the tender of any Shares or Rights of any particular
stockholder whether or not similar defects or irregularities are waived in the
case of other stockholders. No tender of Shares or Rights will be deemed to
have been validly made until all defects or irregularities relating thereto
have been cured or waived. None of the Purchaser, Praxair, the Depositary, the
Information Agent, the Dealer Manager or any other person will be under any
duty to give notification of any defects or irregularities in tenders or incur
any liability for failure to give any such notification. The Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter
of Transmittal and the Instructions thereto) will be final and binding.
Backup Withholding. In order to avoid "backup withholding" of Federal income
tax on payments of cash pursuant to the Offer, a stockholder surrendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such stockholder's correct taxpayer identification number ("TIN") on a
Substitute Form W-9 and certify under penalties of perjury that such TIN is
correct and that such stockholder is not subject to backup withholding. If a
stockholder does not provide such stockholder's correct TIN or fails to
provide the certifications described above, the Internal Revenue Service (the
"IRS") may impose a penalty on such stockholder and payment of cash to such
stockholder pursuant to the Offer may be subject to backup withholding of 31%.
All stockholders surrendering Shares pursuant to the Offer should complete and
sign the main signature form and the Substitute Form W-9 included as part of
the Letter of Transmittal 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 Purchaser and the Depositary).
Certain stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign stockholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See
Instruction 9 to the Letter of Transmittal.
3. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 3, tenders of Shares and Rights
are irrevocable. Shares and Rights tendered pursuant to the Offer may be
withdrawn pursuant to the procedures set forth below at any time prior to the
Expiration Date and, unless theretofore accepted for payment and paid for by
the Purchaser pursuant to the Offer, may also be withdrawn at any time after
January 1, 1996. Shares or Rights may not be withdrawn unless the associated
Rights or Shares, as the case may be, are also withdrawn. A withdrawal of
Shares or Rights will also constitute a withdrawal of the associated Rights or
Shares, as the case may be.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase and
must specify the name of the person having tendered the Shares and Rights to
be withdrawn, the number of Shares and Rights to be withdrawn and the name of
the registered holder of the Shares and Rights to be withdrawn, if different
from the name of the person who tendered the Shares and Rights. If
certificates for Shares or Rights have been delivered or otherwise identified
to the Depositary, then, prior to the physical release of such certificates,
the serial numbers shown on such certificates must be submitted to the
Depositary and, unless such Shares or Rights have been tendered by an Eligible
Institution, the signatures on the notice of withdrawal must be guaranteed by
an Eligible Institution. If Shares or Rights have been delivered pursuant to
the procedures for book-entry transfer as set forth in Section 2 herein, any
notice of withdrawal must also specify the name and number of the account at
the appropriate Book-Entry Transfer Facility to be credited with the withdrawn
Shares and otherwise comply with such Book-Entry Transfer Facility's
procedures. Withdrawals of tenders of Shares and Rights may not be rescinded,
and any Shares and Rights properly withdrawn will thereafter be deemed not
validly tendered for purposes of the Offer. However, withdrawn Shares and
Rights may be retendered by again following one of the procedures described in
Section 2 herein at any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser in its sole
discretion, which determination will be final and binding. None of the
Purchaser, Praxair, the Depositary, the Information Agent, the Dealer Manager
or any other person will be under
10
<PAGE>
any duty to give notification of any defects or irregularities in any notice
of withdrawal or incur any liability for failure to give any such
notification.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment and will pay for all
Shares validly tendered prior to the Expiration Date and not properly
withdrawn in accordance with Section 3 herein promptly after the Expiration
Date. All questions as to the satisfaction of such terms and conditions will
be determined by the Purchaser in its sole discretion, which determination
will be final and binding. See Sections 1 and 14 herein. The Purchaser
expressly reserves the right, in its sole discretion, to delay acceptance for
payment of or payment for Shares in order to comply in whole or in part with
any applicable law, including, without limitation, the HSR Act. Any such
delays will be effected in compliance with Rule 14e-1(c) under the Exchange
Act (relating to a bidder's obligation to pay for or return tendered
securities promptly after the termination or withdrawal of such bidder's
offer).
Praxair is filing a Notification and Report Form with respect to the Offer
under the HSR Act. The waiting period under the HSR Act with respect to the
Offer will expire at 11:59 p.m., New York City time, on the fifteenth calendar
day after the date of such filing, unless early termination of the waiting
period is granted. However, the Antitrust Division of the Department of
Justice (the "Antitrust Division") or the Federal Trade Commission (the "FTC")
may extend the waiting period by requesting additional information or
documentary material from Praxair. If such a request is made, such waiting
period will expire at 11:59 p.m., New York City time, on the tenth calendar
day after substantial compliance by Praxair with such request. See Section 15
herein for additional information concerning the HSR Act and the applicability
of the antitrust laws to the Offer.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (a) certificates
for (or a timely Book-Entry Confirmation with respect to) such Shares and, if
the Distribution Date occurs, certificates for (or a timely Book-Entry
Confirmation, if available, with respect to) the associated Rights (unless the
Purchaser elects to make payment for such Shares pending receipt of the
certificates for, or a Book-Entry Confirmation, if available, with respect to,
such Rights as described in Section 2 herein), (b) a Letter of Transmittal (or
manually executed facsimile thereof), properly completed and duly executed,
with any required signature guarantees (or, in the case of a book-entry
transfer, an Agent's Message in lieu of a Letter of Transmittal) and (c) any
other documents required by the Letter of Transmittal. The per Share
consideration paid to any stockholder pursuant to the Offer will be the
highest per Share consideration paid to any other stockholder pursuant to the
Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares properly tendered to the Purchaser and
not withdrawn as, if and when the Purchaser gives oral or written notice to
the Depositary of the Purchaser's acceptance for payment of such Shares.
Payment for Shares accepted for payment pursuant to the Offer will be made by
deposit of the purchase price therefor with the Depositary, which will act as
agent for tendering stockholders for the purpose of receiving payment from the
Purchaser and transmitting payment to tendering stockholders. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE
PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY
IN MAKING SUCH PAYMENT.
If the Purchaser is delayed in its acceptance for payment of or payment for
Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer (but subject to compliance with Rule 14e-1(c) under the Exchange
Act), the Depositary may, nevertheless, on behalf of the Purchaser, retain
tendered Shares, and such Shares may not be withdrawn except to the extent
tendering stockholders are entitled to exercise, and duly exercise, withdrawal
rights as described in Section 3 herein.
11
<PAGE>
If any tendered Shares are not purchased pursuant to the Offer for any
reason, certificates for any such Shares and, if applicable, the associated
Rights will be returned, without expense to the tendering stockholder (or, in
the case of Shares or Rights delivered by book-entry transfer of such Shares
or Rights into the Depositary's account at a Book-Entry Transfer Facility
pursuant to the procedure set forth in Section 2 herein, such Shares or Rights
will be credited to an account maintained at the appropriate Book-Entry
Transfer Facility), as promptly as practicable after the expiration or
termination of the Offer.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to Praxair, or to one or more direct or indirect wholly
owned subsidiaries of Praxair, the right to purchase Shares tendered pursuant
to the Offer, but any such transfer or assignment will not relieve the
Purchaser of its obligations under the Offer and will in no way prejudice the
rights of tendering stockholders to receive payment for Shares validly
tendered and accepted for payment pursuant to the Offer.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The receipt of cash pursuant to the Offer or the Second Step Cash Merger
will be a taxable transaction for Federal income tax purposes under the
Internal Revenue Code of 1986, as amended (the "Code"), and may also be a
taxable transaction under applicable state, local or foreign income or other
tax laws. Generally, for Federal income tax purposes, a tendering stockholder
will recognize gain or loss equal to the difference between the amount of cash
received by the stockholder pursuant to the Offer or the Second Step Cash
Merger and the aggregate tax basis in the Shares tendered by the stockholder
and purchased pursuant to the Offer or converted in the Second Step Cash
Merger, as the case may be. Gain or loss will be calculated separately for
each block (i.e., Shares acquired at the same time in a single transaction) of
Shares tendered and purchased pursuant to the Offer or converted in the Second
Step Cash Merger, as the case may be.
If Shares are held by a stockholder as capital assets, gain or loss
recognized by the stockholder will be capital gain or loss for federal income
tax purposes, which will be long-term capital gain or loss if the
stockholder's holding period for the Shares exceeds one year. Under present
law, long-term capital gains recognized by an individual stockholder will
generally be taxed at a maximum Federal income tax rate of 28%, and long-term
capital gains recognized by a corporate stockholder will be taxed at a maximum
Federal income tax rate of 35%. There is currently pending legislation that if
adopted will reduce the maximum Federal income tax rate for long-term capital
gain to 19.8% in the case of individuals and 28% in the case of corporations.
A stockholder (other than certain exempt stockholders including, among
others, all corporations and certain foreign individuals and entities) that
tenders Shares may be subject to 31% backup withholding unless the stockholder
provides its TIN and certifies that such number is correct or properly
certifies that it is awaiting a TIN, or unless an exemption applies. A
stockholder that does not furnish its TIN may be subject to a penalty imposed
by the IRS. See "Procedure For Tendering Shares and Rights--Backup
Withholding" in Section 2 herein.
If backup withholding applies to a stockholder, the Depositary is required
to withhold 31% from payments to such stockholder. Backup withholding is not
an additional tax. Rather, the amount of the backup withholding can be
credited against the Federal income tax liability of the person subject to the
backup withholding, provided that the required information is given to the
IRS. If backup withholding results in an overpayment of tax, a refund can be
obtained by the stockholder upon filing an appropriate income tax return.
THE FOREGOING DISCUSSION MAY NOT BE APPLICABLE WITH RESPECT TO SHARES
RECEIVED PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS
COMPENSATION OR WITH RESPECT TO HOLDERS OF SHARES WHO ARE SUBJECT TO SPECIAL
TAX TREATMENT UNDER THE CODE, SUCH AS NON-U.S. PERSONS, LIFE INSURANCE
COMPANIES, TAX-EXEMPT ORGANIZATIONS AND FINANCIAL INSTITUTIONS, AND MAY NOT
APPLY TO A HOLDER OF SHARES IN LIGHT OF INDIVIDUAL CIRCUMSTANCES. STOCKHOLDERS
ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR TAX
CONSEQUENCES TO THEM (INCLUDING THE APPLICATION AND EFFECT OF ANY STATE, LOCAL
OR FOREIGN INCOME AND OTHER TAX LAWS) OF THE OFFER AND THE SECOND STEP CASH
MERGER.
12
<PAGE>
6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES
According to the Company 10-K, the Shares are listed and traded on the NYSE.
Since March 3, 1995, the Shares have been listed and traded under the symbol
"CBI"; prior to that date the Shares were listed and traded under the symbol
"CBH". The following table sets forth, for each of the periods indicated, the
high and low sales prices per Share as reported by published financial sources
and the amount of cash dividends paid per Share, based on public sources.
CBI INDUSTRIES, INC.
<TABLE>
<CAPTION>
CASH
CALENDAR YEAR HIGH LOW DIVIDENDS PAID
- ------------- ------- ------- --------------
<S> <C> <C> <C>
1993
First Quarter.................................. $30.750 $25.500 $0.12
Second Quarter................................. 29.750 21.750 0.12
Third Quarter.................................. 29.000 25.000 0.12
Fourth Quarter................................. 32.000 23.625 0.12
1994
First Quarter.................................. $35.875 $28.000 $0.12
Second Quarter................................. 31.375 25.625 0.12
Third Quarter.................................. 30.750 25.875 0.12
Fourth Quarter................................. 27.625 20.000 0.12
1995
First Quarter.................................. $26.000 $21.750 $0.12
Second Quarter................................. 27.250 23.000 0.12
Third Quarter.................................. 27.750 22.750 0.12
Fourth Quarter (through November 2)............ 33.500 19.000 N.A.
</TABLE>
On October 27, 1995, the last full trading day before Praxair's announcement
of the Proposed Merger, the last reported sale quotation of the Shares on the
NYSE was $20.125 per Share. On November 2, 1995, the last full trading day
before Praxair commenced the Offer, the last reported sales price was $32.125.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
Upon the occurrence of the Distribution Date, the Rights are to detach, and
may trade separately, from the Shares. See Section 12 herein. IF THE
DISTRIBUTION DATE OCCURS AND THE RIGHTS BEGIN TO TRADE SEPARATELY FROM THE
SHARES, STOCKHOLDERS SHOULD ALSO OBTAIN A CURRENT MARKET QUOTATION FOR THE
RIGHTS.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK QUOTATION; EXCHANGE
ACT REGISTRATION; MARGIN REGULATIONS
Market for the Shares. The purchase of Shares pursuant to the Offer will
reduce the number of holders of Shares and the number of Shares that might
otherwise trade publicly and could adversely affect the liquidity and market
value of the remaining Shares held by the public.
Stock Quotation. The Shares are listed on the NYSE. According to the NYSE's
published guidelines, the NYSE would consider delisting the Shares if, among
other things, the number of holders of at least 100 Shares should fall below
1,200, the number of publicly held Shares (exclusive of holdings of officers
and directors of the Company and their immediate families and other
concentrated holdings of 10% or more) should fall below 600,000, or the
aggregate market value of the publicly held Shares should fall below
$5,000,000. According to the Company 10-K, there were approximately 8,000
holders of record of Shares at February 15, 1995 and according to the Company
10-Q, as of June 30, 1995, there were 38,206,403 Shares issued and
outstanding.
13
<PAGE>
If the NYSE were to delist the Shares, the market therefor could be
adversely affected. It is possible that the Shares would be traded on other
securities exchanges or in the over-the-counter market, and that price
quotations would be reported by such exchanges, or through the Nasdaq National
Market ("Nasdaq") or other sources. The extent of the public market for the
Shares and the availability of such quotations would, however, depend upon the
number of stockholders and/or the aggregate market value of the Shares
remaining at such time, the interest in maintaining a market in the Shares on
the part of securities firms, the possible termination of registration of the
Shares under the Exchange Act and other factors. If, as a result of the
purchase of the Shares pursuant to the Offer or otherwise, the Shares no
longer meet the requirements of the NYSE for continued inclusion in the NYSE
and the Shares are no longer included in the NYSE, the market for Shares could
be adversely affected.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Registration of the Shares under the Exchange Act may be
terminated upon application of the Company to the Commission if the Shares are
neither listed on a national securities exchange nor held by 300 or more
holders of record. Termination of registration of the Shares under the
Exchange Act would substantially reduce the information required to be
furnished by the Company to its stockholders and to the Commission and would
make certain provisions of the Exchange Act no longer applicable to the
Company, such as the short-swing profit recovery provisions of Section 16(b)
of the Exchange Act, the requirement of furnishing a proxy statement pursuant
to Section 14(a) of the Exchange Act in connection with stockholders' meetings
and the related requirement of furnishing an annual report to stockholders and
the requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions. Furthermore, the ability of "affiliates" of the Company
and persons holding "restricted securities" of the Company to dispose of such
securities pursuant to Rule 144 or 144A promulgated under the Securities Act
of 1933, as amended (the "Securities Act"), may be impaired or eliminated. The
Purchaser may seek to cause the Company to apply for termination of
registration of the Shares under the Exchange Act as soon after the completion
of the Offer as the requirements for such termination are met.
Based on publicly available information, the Rights may be registered under
the Exchange Act. If the Distribution Date occurs and the Rights detach from
the Shares, the foregoing discussion with respect to the effect of the Offer
on any such Exchange Act registration would apply to the Rights in a similar
manner.
If registration of the Shares is not terminated prior to the Second Step
Cash Merger, then the Shares will be delisted from the NYSE and the
registration of the Shares and Rights under the Exchange Act will be
terminated following the consummation of the Second Step Cash Merger.
Margin Regulations. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of
allowing brokers to extend credit on the collateral of the Shares. Depending
upon factors similar to those described above regarding listing and market
quotations, it is possible that, following the Offer, the Shares would no
longer constitute "margin securities" for the purposes of the margin
regulations of the Federal Reserve Board and therefore could no longer be used
as collateral for loans made by brokers.
8. CERTAIN INFORMATION CONCERNING THE COMPANY
The Company is a Delaware corporation with its principal offices at 800
Jorie Blvd., Oak Brook, IL 60521-2268. According to the Company 10-K, the
Company classifies its operations in three major business segments: Industrial
Gases, Contracting Services and Investments. The Company has stated in the
Company 10-K that its Industrial Gases segment is the world's largest supplier
of carbon dioxide in its various forms; the Industrial Gases segment also
produces, processes and markets a wide variety of other industrial/medical and
specialty gases and assembles and sells industrial gas-related equipment. The
Company has also stated in the Company 10-K that the Contracting Services
segment is organized as a worldwide construction group that provides, through
separate subsidiaries, a broad range of services, including design,
engineering, fabrication, project management, general contracting and
specialty construction services, including non-destructive inspection and
14
<PAGE>
post-weld heat treatment and that the Investments segment provides
transshipment, storage, bunkering and blending services for hydrocarbon
products at the island of St. Eustatius in the Caribbean and in Nova Scotia,
Canada and operates a special products terminal in Brownsville, Texas.
Set forth below is certain selected consolidated financial information with
respect to the Company and its subsidiaries excerpted from the information
contained in the Company 10-K, the Company 10-Q and the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1994:
CBI INDUSTRIES, INC.
SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED
------------------------------------ ---------------------
JUNE 30, JUNE 30,
1994 1993 1992 1995 1994
---------- ---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
SUMMARY OF EARNINGS
DATA:
Revenues.............. $1,890,907 $1,671,744 $1,672,774 $ 937,101 $ 871,873
Income from
operations........... 160,540 26,145 (1) 166,280 78,661 71,787
Income before taxes,
minority interest and
cumulative effect of
accounting changes... 118,910 (2,235)(1) 145,500 56,298 53,985
Net income (loss) to
holders of Shares.... 45,454 (39,846)(1) 65,537(2) 20,060 20,236
Net income (loss) per
Share................ 1.20 (1.07)(1) 1.79(2) 0.53 0.54
Net income (loss) per
fully diluted Share.. 1.10 (0.89)(1) 1.59(2) 0.48 0.49
BALANCE SHEET DATA:(3)
Total assets.......... $2,008,712 $1,870,245 $1,685,325 $2,072,932 $1,924,093
Current assets........ 517,854 471,274 434,160 524,736 489,006
Current liabilities... 379,052 345,070 325,458 357,989 337,171
Long-term debt........ 666,730 607,579 410,998 677,063 665,039
Common stockholders'
equity............... 677,698 643,532 688,294 691,037 661,110
</TABLE>
- --------
(1) After a special charge of $91,600 ($68,400 after tax), which was
equivalent to a net loss per Share of $1.84 ($1.60 on a fully diluted
basis).
(2) Before cumulative effect of accounting changes.
(3) At period end.
Recent Developments. On October 30, 1995, the Company announced net income
of $10.4 million for the quarter ended September 30, 1995. Net income to
holders of Shares was $7.7 million or $0.20 per Share, compared to $7.9
million or $0.20 cents per Share for the same quarter in 1994. Net income per
Share on a fully diluted basis for the quarter was $0.19, compared to $0.20
for the same quarter in 1994. Revenues for the quarter decreased to $449
million from $489 million for the same quarter in 1994, representing a decline
of 8 percent.
The Company also announced net income of $34.6 million for the nine months
ended September 30, 1995. Net income to holders of Shares was $27.7 million or
$0.73 per Share, compared to $28.1 million or $0.74 per Share for the same
period in 1994. Net income per Share on a fully diluted basis was $0.67,
compared to $0.69 for the same period in 1994. Revenues for the nine month
period increased to $1.39 billion from $1.36 billion for the same period in
1994.
The Rights. For a summary description of the Rights, see Section 12 herein.
15
<PAGE>
The Articles. For a summary description of the Articles, see Section 12
herein.
More comprehensive financial information and a more comprehensive
description of the Company are included in the Company 10-K, the Company 10-Q
and other documents filed by the Company with the Commission, and the
foregoing summary is qualified in its entirety by reference to the Company 10-
K, the Company 10-Q and such other documents and all the financial information
(including any related notes) contained therein. The Company 10-K, the Company
10-Q and such other documents should be available for inspection and copies
thereof should be obtainable in the manner set forth below under "Available
Information".
Available Information. The Company is subject to the informational
requirements of the Exchange Act and, in accordance therewith, is required to
file reports relating to its business, financial condition and other matters.
Information as of particular dates concerning the Company's directors and
officers, their remuneration, stock options and other matters, the principal
holders of the Company's securities and any material interest of such persons
in transactions with the Company is required to be disclosed in proxy
statements distributed to the Company's stockholders and filed with the
Commission. Such reports, proxy statements and other information should be
available for inspection at the public reference facilities of the Commission
at 450 Fifth Street, N.W., Washington, DC 20549, and at the regional offices
of the Commission located at Seven World Trade Center, 13th Floor, New York,
NY 10048 and Citicorp Center, 500 West Madison Street (Suite 1400), Chicago,
IL 60661. Copies of such information should be obtainable, by mail, upon
payment of the Commission's customary charges, by writing to the Commission's
principal office at 450 Fifth Street, N.W., Washington, DC 20549. Such
material should also be available for inspection at the offices of Nasdaq
Operations, 1735 K Street, N.W., Washington, DC 20006.
The information concerning the Company contained herein has been taken from
or based upon publicly available documents on file with the Commission and
other publicly available information. Although the Purchaser and Praxair do
not have any knowledge that any such information is untrue, neither the
Purchaser nor Praxair takes any responsibility for the accuracy or
completeness of such information or for any failure by the Company to disclose
events that may have occurred and may affect the significance or accuracy of
any such information.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PRAXAIR
The Purchaser, a Delaware corporation, which is a wholly owned subsidiary of
Praxair, was organized to acquire the Company and has not conducted any
unrelated activities since organization. The principal office of the Purchaser
is located at the principal office of Praxair. All outstanding shares of
capital stock of the Purchaser are owned by Praxair.
On June 30, 1992, Praxair became an independent public company. At that
time, Union Carbide Corporation distributed all of Praxair's common stock to
existing Union Carbide stockholders on a one-for-one basis. Prior to that
date, Praxair was a wholly owned subsidiary of Union Carbide.
Praxair is the largest supplier of industrial gases in North and South
America and one of the three largest worldwide. The gases find wide use in the
primary metals, metal fabrication, chemicals, medical, electronics, petroleum
refining, aerospace, food processing, oil and gas, glass, environmental
remediation, printing and pulp and paper industries.
Praxair's industrial gases business began in 1907 with the founding of the
Linde Air Products Company, the first company in the United States to produce
oxygen from air using a cryogenic process. Praxair has been, and continues to
be, a major technological innovator in the industrial gases industry and has
done much to create value for its customers by developing new applications for
industrial gases and to open new markets by lowering the cost of supply.
16
<PAGE>
Praxair's surface technologies business supplies wear-resistant and high-
temperature corrosion-resistant metallic and ceramic coatings and powders to
many industries, including aircraft, paper, petrochemicals, printing and
textiles.
Set forth below is certain selected consolidated financial information with
respect to Praxair and its subsidiaries excerpted from the information
contained in Praxair's Annual Report on Form 10-K for the period ended
December 31, 1994 (the "Praxair 1994 10-K") and Quarterly Reports on Form 10-Q
for the quarter ended June 30, 1995 (the "Praxair 10-Q") and the quarter ended
June 30, 1994:
PRAXAIR, INC.
SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED
-------------------------- -----------------
JUNE 30, JUNE 30,
1994 1993 1992 1995 1994
------- ------- ------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
SUMMARY OF EARNINGS DATA:
Sales........................ $ 2,711 $ 2,438 $ 2,604 $1,544 $1,256
Income from operations....... 447 341 276 275 202
Income before taxes, minority
interests and cumulative
effects of accounting
changes..................... 346 240 166 216 158
Net income to common
stockholders................ 203 143(1) 84(1) 132 97
Net income per share of
common stock................ 1.45 1.06(1) 0.64(1) 0.93 0.70
BALANCE SHEET DATA:(2)
Total assets................. $ 3,520 $ 3,255 $ 3,344 $3,850 $3,295
Current assets............... 840 691 691 911 698
Current liabilities.......... 889 831 1,210 944 724
Long-term debt............... 893 964 669 1,014 949
Common stockholders' equity.. 839 635 544 977 744
</TABLE>
- --------
(1) Before cumulative effects of accounting changes.
(2) At period end.
Recent Developments. On October 19, 1995, Praxair reported net income of $64
million or $0.44 per share of common stock for the quarter ended September 30,
1995, compared to $51 million or $0.36 per share of common stock for the same
period in 1994, representing an increase of 25 percent. Sales for the quarter
increased to $795 million from $733 million, up 8 percent from the same
quarter in 1994.
Praxair also reported net income of $196 million or $1.37 per share of
common stock for the nine months ended September 30, 1995, compared to $148
million or $1.06 per share of common stock for the same period in 1994,
representing an increase of 32 percent. Sales for the nine month period
increased to $2.34 billion from $1.99 billion, up 18 percent from the same
period in 1994.
As of September 30, 1995, Praxair's debt-to-capital ratio was 49.7 percent.
More comprehensive financial information and a more comprehensive
description of Praxair are included in the Praxair 1994 10-K, the Praxair 10-Q
and other documents filed by Praxair with the Commission, and the foregoing
summary is qualified in its entirety by reference to the Praxair 1994 10-K,
the Praxair 10-Q and such other documents and all the financial information
(including any related notes) contained therein. The Praxair
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1994 10-K, the Praxair 10-Q and such other documents should be available for
inspection and copies thereof should be obtainable in the manner set forth
below under "Available Information".
Available Information. Praxair is subject to the informational requirements
of the Exchange Act and, in accordance therewith, files reports relating to
its business, financial condition and other matters. Information, as of
particular dates, concerning Praxair's directors and officers, their
remuneration, stock options and other matters, the principal holders of
Praxair's securities and any material interest of such persons in transactions
with Praxair is required to be disclosed in proxy statements distributed to
Praxair's stockholders and filed with the Commission. Such reports, proxy
statements and other information should be available for inspection at the
Commission and copies thereof should be obtainable from the Commission in the
same manner as is set forth with respect to the Company in Section 8 herein.
Such material should also be available for inspection at the offices of The
New York Stock Exchange, Inc., 20 Broad Street, New York, NY 10005.
10. SOURCE AND AMOUNT OF FUNDS
The Purchaser estimates that the total amount of funds required pursuant to
the Offer to purchase the number of Shares outstanding on a fully diluted
basis and to pay fees and expenses related to the Offer will be approximately
$1.5 billion. See the Introduction and Section 16 herein. The Purchaser plans
to obtain the necessary funds through capital contributions or advances made
by Praxair. Praxair plans to obtain the necessary funds, together with funds
necessary to refinance any existing borrowings of Praxair and its subsidiaries
and the Company and its subsidiaries that become payable as a result of
completion of the Offer or the Second Step Cash Merger, pursuant to one or
more credit facilities to be obtained from one or more commercial banks or
other financial institutions. Praxair is currently in discussions with a small
group of financial institutions regarding the establishment of such a credit
facility and is seeking to obtain terms and conditions for such facility as
advantageous to Praxair as are available in the market. Praxair believes it
will be able to obtain the financing necessary to consummate the Offer and the
Second Step Cash Merger.
THE CONSUMMATION OF THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE
PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE PURCHASER HAS
OBTAINED SUFFICIENT FINANCING TO ENABLE IT TO CONSUMMATE THE OFFER AND THE
SECOND STEP CASH MERGER.
11. CONTACTS AND TRANSACTIONS WITH THE COMPANY; BACKGROUND OF THE OFFER
Shortly after the December 1994 unsolicited proposal by another company to
acquire certain assets of the Company, Mr. Lichtenberger contacted Mr. Jones
to advise him of Praxair's willingness to consider a variety of possible
transactions with the Company involving its industrial gases business, if the
Company concluded it wished to effect some transaction in response to the
unsolicited proposal. Mr. Jones indicated he would contact Praxair if he
wished to pursue such a transaction.
Several months later Mr. Lichtenberger contacted Mr. Jones to arrange a
meeting. On May 19, 1995, Mr. Lichtenberger and Mr. Jones met in Chicago,
Illinois and Mr. Lichtenberger raised with Mr. Jones a variety of possible
transactions between Praxair and the Company, including the possibility of a
business combination between Praxair and the Company. Mr. Jones indicated he
would consider Mr. Lichtenberger's ideas and respond after such consideration.
Having heard no response from Mr. Jones, on August 28, 1995, Mr.
Lichtenberger telephoned Mr. Jones to solicit a response regarding the
possible transactions discussed at the May 19, 1995 meeting. During that call
they agreed to meet on August 31, 1995 in the New York area.
On August 31, 1995, Mr. Lichtenberger and Mr. John A. Clerico, Vice
President and Chief Financial Officer of Praxair, met with Mr. Jones and Mr.
A. J. Schneider, Chief Financial Officer of the Company, and discussed further
a possible business combination between Praxair and the Company. During the
course of that meeting Mr. Lichtenberger and Mr. Jones discussed the business
rationale and strategic benefits of such a business combination as well as
various possible structures and bases upon which such a business combination
might proceed. At the conclusion of the meeting, Mr. Jones indicated he would
contact Mr. Lichtenberger after the
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Labor Day holiday. On September 5, 1995, Mr. Jones called Mr. Lichtenberger to
discuss further the possible business combination that had been the subject of
the August 31 meeting. Mr. Jones indicated on that call that he wanted to
consider the matter further and they should talk further on Mr.
Lichtenberger's return from a scheduled overseas trip.
In a late September, 1995 telephone conversation, Mr. Jones indicated that
he would respond to Mr. Lichtenberger following the Company's planned October
10th Board of Directors meeting.
On October 20, 1995, Mr. Jones telephoned Mr. Lichtenberger to indicate that
the Company had decided to discontinue their discussions relating to a
business combination between Praxair and the Company.
On October 27, 1995, Mr. Lichtenberger telephoned Mr. Jones to inform him
that Praxair was making a formal proposal to the Board of Directors of the
Company relating to the Proposed Merger. In addition, the following letter was
hand delivered to Mr. Jones:
October 27, 1995
Mr. John E. Jones
Chairman, President and Chief Executive Officer
CBI Industries, Inc.
800 Jorie Boulevard
Oak Brook, IL 60521-7001
Dear John:
As you know, over the past six months you and I have had several
discussions regarding a possible transaction to effect a merger of our
respective companies. Based on our conversations, I think we both realize
that significant benefits could be realized by both our companies from such
a transaction. Therefore, I was greatly disappointed when you told me on
October 20 that you had decided not to continue our discussions.
As I told you during that telephone conversation, in recent weeks we at
Praxair have continued to carefully study the dynamics and potential
advantages of a business combination of Praxair and CBI. As a result, we
now feel even more strongly that such a business combination would result
in significant strategic benefits for both our companies and our respective
shareholders. In light of your current position which you communicated to
me on October 20, and given what we continue to view as the compelling
rationale for a business combination, we have decided that the best way to
proceed is for Praxair to submit a specific proposal to your Board of
Directors for its formal consideration.
Accordingly, on behalf of the Board of Directors of Praxair, I am pleased
to propose herewith the merger of Praxair and CBI pursuant to which your
shareholders would receive $32.00 for each share of CBI common stock, which
we would propose to pay in either cash or Praxair common stock. Our
proposal to effect a merger of Praxair and CBI is subject to the
negotiation of a mutually satisfactory definitive merger agreement
containing customary terms and closing conditions.
I hope that you will recognize the powerful business logic behind our
proposal and that you will promptly submit it to your Board of Directors
for its consideration with a favorable recommendation from you. It is our
hope that, after appropriate consideration by your Board of Directors, your
Board will authorize proceeding with the negotiation of the definitive
merger agreement on the terms we have proposed.
The price per share in our merger proposal is based on our present
knowledge of CBI, which is limited to public information. It is our view
that the price we are proposing would be both fair and highly attractive to
your shareholders. Our proposal offers your shareholders a significant
premium over the current market value of CBI.
The transaction we propose represents a clearly attractive opportunity
for Praxair to combine the leading industrial gases supplier in North and
South America and the premier world supplier of carbon
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dioxide. The combined enterprise will be strongly positioned to maximize
our marketing, engineering and technological skills as it expands its
operations further into major global markets. It will also be able to
develop significant new applications for a wide range of products and
advanced technologies to enable our customers to improve their
productivity, product quality and environmental performance. Together,
Praxair's and CBI's business portfolios and synergies will provide the
enterprise with considerable opportunities to support strong future sales
and earnings growth.
We are prepared to move promptly in connection with our proposal. We
would be happy to meet with you and other members of your Board of
Directors and senior management as soon as practicable to discuss our
proposal in detail and to answer any questions you or they may have. We
realize that your Board of Directors will want to carefully consider our
proposal, but we do ask that the Board respond to us as soon as possible,
and in any event by noon, on November 1, 1995.
While we would very much prefer that a business combination of our
companies be effected pursuant to the negotiation of a merger on the terms
we have proposed, you and your Board should appreciate that if your Board
rejects our proposal to negotiate a merger, we reserve the right to propose
directly to the shareholders of CBI a cash offer for CBI by Praxair.
We look forward to hearing the response of your Board of Directors after
it has reviewed our merger proposal.
Sincerely,
H.W. Lichtenberger
On October 29, 1995, Praxair issued a press release, which set forth the
foregoing letter and indicated that Praxair had proposed to the Company's
Board of Directors the Proposed Merger.
On October 30, 1995, Praxair commenced litigation against the Company and
the members of the Board of Directors of the Company in the Delaware Court of
Chancery, seeking among other things, an order (i) compelling the Company's
Board of Directors to redeem the Rights or to amend the Rights Agreement so as
to make the Rights inapplicable to any acquisition proposal which equals or
exceeds the Proposed Merger and (ii) declaring that the Company's Board of
Directors are in breach of their fiduciary duty by continuing to deploy the
Rights Agreement.
On October 31, 1995, Mr. Jones telephoned Mr. Lichtenberger to indicate that
(i) the Company would not respond to Mr. Lichtenberger's October 27th letter
by Praxair's deadline of noon on November 1, 1995 and (ii) the Board of
Directors would consider in due course the matters contained in Mr.
Lichtenberger's October 27th letter.
On November 1, 1995, Praxair issued a press release, which noted that (i)
the Company had not met the November 1, 1995 response deadline and (ii)
Praxair intended to commence the Offer on November 3, 1995.
As of November 3, 1995, Praxair owned an aggregate of 79,200 Shares or
approximately 0.2% of the Shares reported by the Company to be outstanding as
of June 30, 1995. On October 26, 1995 Praxair purchased 17,500 Shares at
$19.125 per Share and 18,700 Shares at $19.250 per Share, and on October 27,
1995 Praxair purchased 43,000 Shares at $19.875 per Share. Each of the
foregoing purchases was effected by a broker-dealer in open-market purchases.
The Purchaser is the beneficial owner of 100 Shares. On November 2, 1995,
Praxair transferred to the Purchaser 100 Shares through a broker-dealer
journal transfer transaction. Except as described in this Offer to Purchase
(including Schedule I hereto), none of the Purchaser, Praxair or, to the best
knowledge of the Purchaser, any of the persons listed in Schedule I hereto, or
any associate or majority owned subsidiary of the Purchaser, Praxair or any of
the persons so listed, beneficially owns any equity security of the Company,
and none of the Purchaser, Praxair or, to the best knowledge of the Purchaser,
any of the other persons referred to above, or any of the respective
directors, executive officers or subsidiaries of any of the foregoing, has
effected any transaction
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in any equity security of the Company during the past 60 days. The Purchaser
and Praxair disclaim beneficial ownership of any Shares owned by any pension
plan of Praxair or any affiliate of Praxair.
Except as described in this Offer to Purchase and other than for ordinary
course intercompany inventory purchases and sales not material to the Company,
Praxair or its affiliates, as of the date hereof (a) there have not been any
contacts, transactions or negotiations between the Purchaser or Praxair, any
of their respective subsidiaries or, to the best knowledge of the Purchaser,
any of the persons listed in Schedule I hereto, on the one hand, and the
Company or any of its directors, officers or affiliates, on the other hand,
that are required to be disclosed pursuant to the rules and regulations of the
Commission and (b) none of the Purchaser, Praxair or, to the best knowledge of
the Purchaser, any of the persons listed in Schedule I hereto has any
contract, arrangement, understanding or relationship with any person with
respect to any securities of the Company. During the Offer, the Purchaser and
Praxair intend to have ongoing contacts and negotiations with the Company and
its directors, officers and stockholders.
12. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY
Purpose. The purpose of the Offer is to enable Praxair, if it is not able to
effect the Proposed Merger, to acquire control of, and the entire equity
interest in, the Company. The Offer is intended to facilitate the acquisition
of all the Shares. If the Offer is consummated, then as soon as practicable
thereafter, Praxair will seek to consummate the Second Step Cash Merger. The
purpose of the Second Step Cash Merger is to acquire all Shares not tendered
and purchased pursuant to the Offer or otherwise. Pursuant to the Second Step
Cash Merger, each then outstanding Share (other than Shares owned by the
Purchaser or Praxair or any of their subsidiaries, Shares held in the treasury
of the Company and Shares owned by stockholders who perfect dissenters' rights
under the DGCL) would be converted into the right to receive an amount in cash
equal to the price per Share paid pursuant to the Offer. However, pursuant to
Section 251 of the DGCL, the Second Step Cash Merger would require the
approval of the Board of Directors of the Company. As the Board of Directors
of the Company is divided into three classes (with only one class elected per
year), Praxair would be able to effect the Second Step Cash Merger only with
the support of existing members of the Company's Board of Directors or after
successfully electing two classes of directors supportive of the Second Step
Cash Merger to the Company's Board of Directors.
Except in the case of a "short-form" merger as described below, and assuming
satisfaction of the Business Combination Condition, under the DGCL the
approval of the Company's Board of Directors and the affirmative vote of
holders of a majority of the outstanding Shares (including any Shares owned by
the Purchaser) would be required to approve the Second Step Cash Merger. If
the Purchaser acquires, through the Offer or otherwise, voting power with
respect to at least a majority of the outstanding Shares, which would be the
case if the Minimum Tender Condition were satisfied and the Purchaser were to
accept for payment Shares tendered pursuant to the Offer, it would have
sufficient voting power to effect the Second Step Cash Merger, subject to
approval of the Board of Directors of the Company, without the vote of any
other stockholder of the Company under the DGCL. However, pursuant to the
Restated Company Certificate of Incorporation, if the Articles Condition is
not satisfied, a vote greater than the affirmative vote of the majority of the
Shares entitled to vote may be required to effect the Second Step Cash Merger
(as more fully described below). As noted in the Introduction, each
Convertible Preferred share is entitled to vote with the holders of Shares,
voting together as a single class, and is entitled to 1.5 votes per
Convertible Preferred Share.
The DGCL also provides that if a parent company owns at least 90% of each
class of stock of a subsidiary, the parent company can effect a "short form"
merger with that subsidiary without the action of the subsidiary's Board of
Directors or a stockholder vote. The Company has outstanding the Convertible
Preferred Shares and two series of cumulative convertible preferred stock.
Under the DGCL, the Purchaser would have to acquire 90% of each class of stock
of the Company in order to effect a short form merger. See "Board and
Stockholder Approval" below.
If the Second Step Cash Merger has not been consummated, the Purchaser or an
affiliate of the Purchaser may, either immediately following the consummation
or termination of the Offer (whether or not the Purchaser purchases Shares
pursuant to the Offer), or from time to time thereafter, seek to acquire
additional Shares through
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open market purchases, privately negotiated transactions, a tender offer or
exchange offer or otherwise, upon such terms and at such prices as it may
determine, which may be more or less than the price to be paid pursuant to the
Offer. Alternatively, the Purchaser and its affiliates reserve the right to
sell or otherwise dispose of any or all of the Shares acquired by them
pursuant to the Offer or otherwise, upon such terms and at such prices as they
shall determine.
The precise timing and other details of any merger or other business
combination transaction will depend on a variety of factors such as general
economic conditions and prospects, the future prospects, asset value and
earnings of the Company, the number of Shares acquired by the Purchaser
pursuant to the Offer or otherwise and the statutory requirements described
above. The Purchaser can give no assurance that a merger or other business
combination will be proposed or that, if it is proposed, it will not be
delayed or abandoned. The Purchaser expressly reserves the right not to
propose any merger or similar business combination involving the Company, or
to propose a merger or other business combination on terms other than those
set forth herein, and its ultimate decision could be affected by information
hereafter obtained by the Purchaser, changes in general economic or market
conditions or in the business of the Company or other factors.
Praxair intends to continue to seek to negotiate with the Company with
respect to the Proposed Merger. If such negotiations result in a definitive
merger agreement regarding the Proposed Merger, the consideration to be
received by holders of Shares could include or consist of securities, cash or
any combination thereof. Accordingly, such negotiations could result in, among
other things, termination of the Offer (see Section 14) and submission of the
Proposed Merger to the Company's stockholders for their approval. Praxair
anticipates that a period of no more than 60 to 90 days from the signing of a
definitive merger agreement regarding the Proposed Merger would be required
for the consummation of the Proposed Merger.
Plans for the Company. Praxair intends that the Liquid Carbonic segment of
the Company will be fully integrated with Praxair's business, thereby
broadening product offerings and geographic coverage, providing opportunities
for expansion into new geographies and taking advantage of opportunities for
cost synergies.
The Company's other two segments, Contracting Services and Investments (see
Section 8 herein) are not currently viewed as strategic to Praxair's
industrial gases business. Praxair intends to examine the performance of both
segments, their business strategies and their potential for future sales and
earnings growth, as well as earnings quality in evaluating alternatives for
such segments.
The Rights. Set forth below is a summary description of the Rights derived
from the Company 8-A and the Rights Agreement. On March 4, 1986, the Board of
Directors of the Company declared a dividend of one Right for each outstanding
Share to the stockholders of record at the close of business on March 18,
1986. Each Right entitles the registered holder to purchase from the Company a
unit consisting of one one-hundredth of a share (a "Unit") of Series A Junior
Participating Preferred Stock, $1.00 par value per share, at a price of $75
per Unit, subject to adjustment (the "Exercise Price"). The description and
terms of the Rights are set forth in a Rights Agreement between the Company
and First Chicago Trust Company of New York, as Rights Agent.
The Rights are evidenced by the certificates for Shares outstanding, and no
separate Right certificates will be distributed. A "Distribution Date" for the
Rights will occur upon the earlier of (i) 10 days following the date (the
"Stock Acquisition Date") of a public announcement by the Company or an
Acquiring Person (as defined below) that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired beneficial ownership
of 10% or more of the outstanding Shares or (ii) 10 business days (or such
later date as may be determined by action of the Board of Directors of the
Company prior to such time or any person becomes an Acquiring Person)
following the commencement of (or a public announcement of an intention to
make) a tender offer or exchange offer if, upon consummation thereof, the
person or group proposing such offer could be the beneficial owner of 10% or
more of such outstanding Shares.
Until the close of business on the Distribution Date, the Rights will be
transferred with and only with certificates for Shares and the surrender for
transfer of any certificates for Shares will also constitute the surrender for
transfer of the Rights associated with the Shares represented by such
certificate. Until the Distribution Date (or earlier redemption or expiration
of the Rights), new certificates for Shares issued after March 18, 1986 upon
transfer or new issuance for Shares will contain a notation incorporating the
Rights Agreement by reference.
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The Rights are not exercisable until the Distribution Date. The Rights will
expire on March 18, 1996, unless earlier redeemed by the Company as described
below.
As soon as practicable following the Distribution Date (but subject to the
exercise of the Company's right of redemption referred to below), separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Shares as of the close of business on the
Distribution Date. From and after the Distribution Date, such separate Right
Certificates alone will evidence the Rights.
If any person becomes an Acquiring Person, then the Rights Agreement
requires that proper provision be made so that each holder of a Right, other
than Rights beneficially owned by the Acquiring Person and certain affiliated
or associated persons (which will thereafter be void), will thereafter have
the right to receive upon exercise that number of Shares (or, in certain
circumstances, other securities, property and/or cash) having a market value
of two times the Exercise Price. In the event that, following the time that
any person becomes an Acquiring Person, the Company is acquired in a merger or
other business combination transaction or 50% or more of the assets or earning
power of the Company and its subsidiaries are sold, the Rights Agreement
requires that proper provisions be made so that each holder of a Right (except
voided Rights) will thereafter have the right to receive, upon the exercise
thereof at the then current Exercise Price, that number of shares of common
stock of the acquiring company (or the recipient of the greatest portion of
the assets or earning power) that at the time of such transaction will have a
market value of two times the Exercise Price.
The Rights Agreement provides that, at any time after any person becomes an
Acquiring Person and prior to the acquisition by such person and its
associates and affiliates of 50% or more of the outstanding Shares, the Board
of Directors of the Company may authorize the exchange of all or part of the
then outstanding and exercisable Rights (other than voided Rights) at an
exchange ratio of one Share per Right (subject to adjustment).
The Exercise Price payable, and the number of Units or other securities or
property issuable, upon exercise of the Rights are subject to adjustment from
time to time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Series A Junior
Participating Preferred Stock, (ii) upon the grant to holders of the Series A
Junior Participating Preferred Stock of certain rights or warrants to
subscribe for Series A Junior Participating Preferred Stock or convertible
securities at less than the current market price of the Preferred Stock or
(iii) upon the distribution to holders of the Series A Junior Participating
Preferred Stock of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants (other than
those referred to above).
The Board of Directors of the Company may, at its option, at any time prior
to 5:00 p.m., New York City time, on the earlier of (a) the twentieth day
following a Stock Acquisition Date or (b) March 18, 1996, redeem all but not
less than all the then outstanding Rights at a redemption price of $.05 per
Right (as adjusted) (the "Redemption Price"). Immediately upon the action of
the Board of Directors of the Company ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
Until a Right is exercised, it will not entitle the holder to any rights as
a stockholder of the Company (other than those as an existing stockholder),
including, without limitation, the right to vote or to receive dividends.
The terms of the Rights may be amended by the Board of Directors of the
Company, but (following the Distribution Date) no amendment may adversely
affect the interests of holders of the Rights. Prior to the Distribution Date,
the interests of the holders of the Rights shall be deemed coincident with the
interests of the holders of the Shares.
The foregoing summary of the Rights Agreement does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement
and the other documents included in the Company 8-A. The Company 8-A should be
available for inspection and copies thereof should be obtainable in the manner
set forth below under "Available Information."
PURSUANT TO THE RIGHTS CONDITION, THE OFFER IS CONDITIONED UPON THE RIGHTS
HAVING BEEN REDEEMED BY THE BOARD OF DIRECTORS OF THE COMPANY OR THE PURCHASER
BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE RIGHTS HAVE BEEN INVALIDATED
OR ARE OTHERWISE INAPPLICABLE TO THE OFFER AND THE SECOND STEP CASH MERGER.
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UNLESS THE RIGHTS CONDITION IS SATISFIED, STOCKHOLDERS WILL BE REQUIRED TO
TENDER TWO-THIRDS (2/3) OF A RIGHT (SUBJECT TO ADJUSTMENT) FOR EACH SHARE
TENDERED IN ORDER TO EFFECT A VALID TENDER OF SHARES IN ACCORDANCE WITH THE
PROCEDURES SET FORTH IN SECTION 2 HEREIN. ACCORDINGLY, STOCKHOLDERS WHO SELL
THEIR RIGHTS SEPARATELY FROM THEIR SHARES AND DO NOT OTHERWISE ACQUIRE RIGHTS
MAY NOT BE ABLE TO SATISFY THE REQUIREMENTS OF THE OFFER FOR A VALID TENDER OF
SHARES. UNLESS THE DISTRIBUTION DATE OCCURS, A TENDER OF SHARES WILL ALSO
CONSTITUTE A TENDER OF THE ASSOCIATED RIGHTS.
On October 30, 1995, Praxair commenced litigation against the Company and
members of the Board of Directors of the Company in the Delaware Court of
Chancery seeking, among other things, an order compelling the Board of
Directors of the Company to redeem the Rights or to amend the Rights Agreement
to make the Rights inapplicable to any acquisition proposal that equals or
exceeds the Proposed Merger and declaring that the Company's Board of
Directors are in breach of their fiduciary duty by continuing to deploy the
Rights Agreement.
Praxair and the Purchaser are hereby requesting that the Board of Directors
of the Company redeem the Rights or amend the Rights Agreement to make the
Rights inapplicable to the Offer and the Second Step Cash Merger and that the
Board of Directors of the Company take no action to extend the expiration of
the Rights or the Rights Agreement or enter into any similar agreement.
However, there can be no assurance that the Board of Directors of the Company
will do so.
Redemption of the Rights (or an amendment of the Rights Agreement to make
the Rights inapplicable to the Offer and the Second Step Cash Merger) would
satisfy the Rights Condition.
The Articles. Set forth below is a summary of the Articles derived from the
Restated Company Certificate of Incorporation:
Article Tenth. Article Tenth requires the affirmative vote of holders of
not less than two-thirds (2/3) of the outstanding Shares entitled to vote
and the affirmative vote of not less than two-thirds (2/3) of each series
of shares of preferred stock of the Company entitled to vote as a class on
such issue; or, where the Board of Directors of the Company has recommended
such action, the affirmative vote of holders of a majority of the
outstanding Shares entitled to vote and the affirmative vote of a majority
of each series of the outstanding shares of preferred stock of the Company
entitled to vote as a class on such issue, to effect:
(a) a merger or consolidation (except where the Company owns at least
90% of the voting securities of a corporation which merges into the
Company or, unless prohibited by the Restated Company Certificate of
Incorporation, except where the Board of Directors of the Company is
authorized under the law of Delaware to approve a merger without
stockholder approval); (b) dissolution or liquidation; (c) sale or
other disposition of all or substantially all of the assets of the
Company; or (d) amendment of the Restated Company Certificate of
Incorporation.
Article Fifteenth. In addition to any affirmative vote required by law or
any other article of the Restated Company Certificate of Incorporation,
Article Fifteenth requires the affirmative vote by the holders of at least
80% of the then outstanding Shares entitled to vote and the affirmative
vote of at least 80% of each series of the outstanding shares of preferred
stock of the Company entitled to vote as a class on such issue ("Voting
Stock") to approve Business Combinations (as defined below) unless (i) the
Business Combination is approved by a majority of the Continuing Directors
(as defined below) or (ii) all of the Price and Procedural Requirements (as
defined below) are met.
For the purposes of Article Fifteenth, a "Business Combination" means any
one or more of the following transactions: (a) any merger or consolidation
of the Company or any Subsidiary (as defined below) with (i) any Interested
Stockholder or (ii) any other corporation (whether or not itself an
Interested Stockholder) which is, or after such merger or consolidation
would be, an Affiliate of an Interested Stockholder; or (b) any sale,
lease, exchange, mortgage, pledge, transfer or other disposition (in one
transaction or a series of transactions) to or with any Interested
Stockholder or any Affiliate of any Interested Stockholder of any assets of
the Company or any Subsidiary having an aggregate Fair Market Value (as
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defined below) of $1,000,000 or more; or (c) the issuance or transfer by
the Company or any Subsidiary (in one transaction or a series of
transactions) of any securities of the Company or any Subsidiary to any
Interested Stockholder or any Affiliate of any Interested Stockholder in
exchange for cash, securities or other property (or a combination thereof)
having an aggregate Fair Market Value of $1,000,000 or more; or (d) the
adoption of any plan or proposal for the liquidation or dissolution of the
Company proposed by or on behalf of an Interested Stockholder or any
Affiliate of any Interested Stockholder; or (e) any reclassification of
securities (including any reverse stock split), or recapitalization of the
Company, or any merger or consolidation of the Company with any of its
Subsidiaries or any other transaction (whether or not with or into or
otherwise involving an Interested Stockholder) which has the effect,
directly or indirectly, of increasing the proportionate share of the
outstanding shares of any class of equity or convertible securities of the
Company or any Subsidiary which is directly or indirectly owned by any
Interested Stockholder or any Affiliate of any Interested Stockholder.
For the purposes of Article Fifteenth, the following terms shall have the
following meanings:
"Interested Stockholder" means any person (other than the Company or
any Subsidiary) who or which: (a) is the Beneficial Owner (as defined
below), directly or indirectly, of more than 10% of the voting power of
the outstanding Voting Stock; or (b) is an Affiliate of the Company and
at any time within the two-year period immediately prior to the date in
question was the Beneficial Owner, directly or indirectly, of 10% or
more of the voting power of the then outstanding Voting Stock; or (c)
is an assignee of or has otherwise succeeded to any shares of Voting
Stock which were at any time within the two-year period immediately
prior to the date in question Beneficially Owned by any Interested
Stockholder, if such assignment or succession shall have occurred in
the course of a transaction or series of transactions not involving a
public offering within the meaning of the Securities Act of 1933. For
the purposes of determining whether a person is an "Interested
Stockholder," the number of shares of Voting Stock deemed to be
outstanding shall include shares deemed owned through application of
the term "Beneficial Owner" but shall not include any other shares of
Voting Stock which may be issuable pursuant to any agreement,
arrangement or understanding, or upon exercise of conversion rights,
warrants or options, or otherwise.
A person shall be "Beneficial Owner" of any Voting Stock: (a) which
such person or any of its Affiliates or Associates (as defined below)
beneficially owns, directly or indirectly; or (b) which such person or
any of its Affiliates or Associates has (i) the right to acquire
(whether such right is exercisable immediately or only after the
passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange
rights, warrants or options, or otherwise, or (ii) the right to vote
pursuant to any agreement, arrangement or understanding; or (c) which
are beneficially owned, directly or indirectly, by any other person
with which such person or any of its Affiliates or Associates has any
agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of Voting Stock.
"Affiliate" or "Associate" has the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on January 1, 1983.
"Subsidiary" means any corporation of which more than 48% of any
class of equity security is owned, directly or indirectly, by the
Company; provided, however, that for the purposes of the definition of
Interested Stockholder, the term "Subsidiary" shall mean only a
corporation of which more than 48% of each class of equity security is
owned, directly or indirectly, by the Company.
"Continuing Director" means any member of the Board of Directors of
the Company who is unaffiliated with the Interested Stockholder and was
a member of the Board prior to the time that the Interested Stockholder
became an Interested Stockholder, and any successor of a Continuing
Director who is unaffiliated with the Interested Stockholder and is
recommended to succeed a Continuing Director by a majority of
Continuing Directors then on the Board of Directors of the Company.
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"Fair Market Value" means: (a) in the case of stock, the highest
closing sale price during the 30-day period immediately preceding the
date in question of a share of such stock on the Composite Tape for
NYSE-Listed Stocks, or, if such stock is not quoted on the Composite
Tape, on the NYSE, or, if such stock is not listed on such Exchange, on
the principal United States securities exchange registered under the
Exchange Act on which such stock is listed, or, if such stock is not
listed on any such exchange, the highest closing bid quotation with
respect to a share of such stock during the 30-day period preceding the
date in question on the National Association of Securities Dealers,
Inc. Automated Quotations System or any system then in use, or if no
such quotations are available, the fair market value on the date in
question of a share of such stock as determined by the Board of
Directors of the Company in good faith; and (b) in the case of property
other than cash or stock, the fair market value of such property on the
date in question as determined by the Board of Directors of the Company
in good faith.
For the purposes of Article Fifteenth, the "Price and Procedural
Requirements" means the satisfaction of all of the price and procedural
requirements described in paragraphs (a) to (e) below:
(a) The aggregate amount of the cash and the Fair Market Value as of
the date of the consummation of the Business Combination of
consideration other than cash to be received per share by holders of
Shares in such Business Combination shall be at least equal to the
higher of (i) the highest price previously paid for any Share by any
person who is an Interested Stockholder at the time of the first public
announcement of the proposal of the Business Combination, or (ii) the
highest per Share closing public market price within the two year
period immediately prior to the time of the first public announcement
of the proposal of the Business Combination for any Share by the
Interested Stockholder. The price paid for any Share shall be the
amount of cash plus the Fair Market Value of any other consideration
paid therefor, determined at the time of payment thereof.
(b) The consideration to be received by holders of a particular class
of outstanding Voting Stock (including Shares) shall be in cash or in
the same form as the Interested Stockholder has previously paid for
shares of such class of Voting Stock. If the Interested Stockholder has
paid for shares of any class of Voting Stock with varying forms of
consideration, the form of consideration for such class of Voting Stock
shall be either cash or the form used to acquire the largest number of
shares of such class of Voting Stock previously acquired by it.
(c) After such Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such Business Combination:
(i) there shall have been (1) no reduction in the annual rate of
dividends paid on the Shares (except as necessary to reflect any
subdivision of the Shares), except as approved by a majority of the
Continuing Directors, and (2) an increase in such annual rate of
dividends as necessary to reflect any reclassification (including any
reverse stock split), recapitalization, reorganization or any similar
transaction which has the effect of reducing the number of outstanding
Shares, unless the failure so to increase such annual rate is approved
by a majority of the Continuing Directors; and (ii) such Interested
Stockholder shall have not become the beneficial owner of any
additional shares of Voting Stock except as part of the transaction
which results in such Interested Stockholder becoming an Interested
Stockholder.
(d) After such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder shall not have received the
benefit, directly or indirectly (except proportionately as a
stockholder), of any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax advantages
provided by the Company, whether in anticipation of or in connection
with such Business Combination or otherwise.
(e) A proxy or information statement describing the proposed Business
Combination and complying with the requirements of the Exchange Act and
the rules and regulations thereunder (or any subsequent provisions
replacing the Exchange Act, rules or regulations) shall be mailed to
all stockholders of the Company at least 30 days prior to the
consummation of such Business Combination (whether or not such proxy or
information statement is required to be mailed pursuant to the Exchange
Act or subsequent provisions).
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(In the event of any Business Combination in which the Company
survives, the phrase "other consideration to be received" as used in
paragraphs (a) and (b) above shall include the shares and/or the shares
of any other class of outstanding Voting Stock retained by the holders
of such Shares or shares, as the case may be.)
The terms of the Second Step Merger would not satisfy the foregoing Price
and Procedural Requirements because the highest per Share closing public
market price within the two year period immediately prior to November 3, 1995
exceeded the Offer Price.
The foregoing summary of the Articles does not purport to be complete and is
qualified in its entirety by reference to the Restated Company Certificate of
Incorporation. The Restated Company Certificate of Incorporation should be
available for inspection and copies thereof should be obtainable in the manner
set forth above under "Available Information." See Section 8 herein.
PURSUANT TO THE ARTICLES CONDITION, THE OFFER IS CONDITIONED UPON THE
PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT NO SUPERMAJORITY VOTE
WILL BE REQUIRED BY ARTICLE TENTH OR ARTICLE FIFTEENTH OF THE COMPANY'S
RESTATED CERTIFICATE OF INCORPORATION TO APPROVE THE SECOND STEP CASH MERGER
OR THAT AFTER CONSUMMATION OF THE OFFER THAT THE PURCHASER WILL OTHERWISE
POSSESS SUFFICIENT VOTING POWER TO EFFECT THE SECOND STEP CASH MERGER WITHOUT
THE AFFIRMATIVE VOTE OF ANY PERSON OTHER THAT THE PURCHASER.
Praxair and the Purchaser are hereby requesting that the Board of Directors
of the Company adopt a resolution approving and recommending the Second Step
Cash Merger pursuant to the Articles on the grounds that the failure to do so
would constitute a breach of fiduciary duty to the Company stockholders.
However, there can be no assurance that the Board of Directors of the Company
will do so.
Approval and recommendation of the Second Step Cash Merger by the Board of
Directors of the Company or, in the case of Article Fifteenth, the
satisfaction of certain specified price criteria and procedural requirements
would satisfy the Articles Condition.
Board and Stockholder Approval. Under the DGCL, except in the case of a
short-form merger as described below, the Second Step Cash Merger would
require the approval of the Company's Board of Directors prior to submitting
it to a vote of the Company's stockholders. According to publicly available
information, the Company's Board of Directors is currently divided into three
classes serving staggered terms of three years each. The DGCL provides that
any director or the entire board of directors may be removed, with or without
cause, by the holders of a majority of the shares then entitled to vote at an
election of directors, except that in the case of a corporation whose board is
divided into classes in accordance with the DGCL, shareholders may effect such
removal only for cause unless a corporation's certificate of incorporation
provides otherwise. The Restated Company Certificate of Incorporation does not
provide otherwise. The Company's by-laws provide that vacancies may be filled
by a majority of the directors then in office.
The Purchaser presently intends to request as soon as practicable following
consummation of the Offer that a majority of the then-current members of the
Company's Board of Directors resign and to cause nominees of the Purchaser to
be elected to fill the resulting vacancies. Should such request be refused,
the Purchaser intends to take such action as may be necessary and lawful to
secure control of the Board of Directors of the Company. In this connection,
in the event that the Company's 1996 Annual Meeting of Stockholders is held
after the Minimum Condition has been satisfied and the Offer has been
consummated, the Purchaser will control sufficient votes to replace one-third
of the Company's Board of Directors. As a result of the staggered terms of the
Company's directors, however, and the above referenced provisions of the DGCL,
absent cooperation of the Company's Board, or action or inaction by the
Company's directors that constitutes "cause" for removal within the meaning of
the DGCL, the Purchaser would be unable to obtain control of a majority of the
Company's Board of Directors until at least the Company's 1997 Annual Meeting
of Stockholders. In the event that the Purchaser obtains control of the
Company's Board of Directors, the Purchaser would expect, subject to the
fiduciary obligations of the directors, to seek approval of the Second Step
Cash Merger as soon as practical thereafter.
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In addition to approval by the Boards of Directors of each of the
corporations desiring to merge, in the case of a merger such as the Second
Step Cash Merger, the DGCL requires the approval of the agreement of merger by
the stockholders of the acquired corporation by the affirmative vote of
holders of a majority of all the outstanding shares of stock entitled to vote.
Assuming the Offer is consummated and the Minimum Condition, the Articles
Condition and other conditions to the Offer are satisfied, the Purchaser will
hold sufficient voting power to ensure stockholder approval of the Second Step
Cash Merger.
The DGCL also provides that if a parent company owns at least 90% of each
class of stock of a subsidiary, the parent company can effect a short form
merger with that subsidiary without the action of the subsidiary's Board of
Directors or the other stockholders of the subsidiary. In addition to the
Shares, the Company has outstanding the Convertible Preferred Shares, shares
of 7.48% Cumulative Preferred Stock, Series D (the "Series D Preferred") and
shares of 6.75% Cumulative Preferred Stock, Series E (the "Series E
Preferred"). Under the DGCL, the Purchaser would have to acquire 90% of each
class of stock of the Company in order to effect a short form merger without
the approval of the Company's Board of Directors.
Appraisal Rights. Holders of Shares do not have appraisal rights as a result
of the Offer. However, if the Second Step Cash Merger is consummated, holders
of Shares at the effective time of the Second Step Cash Merger will have
certain rights pursuant to the provisions of Section 262 of the DGCL ("Section
262") to dissent and demand appraisal of their Shares. Under Section 262,
dissenting stockholders who comply with the applicable statutory procedures
will be entitled to receive a judicial determination of the fair value of
their Shares (exclusive of any element of value arising from the
accomplishment or expectation of the Second Step Cash Merger) and to receive
payment of such fair value in cash, together with a fair rate of interest, if
any. Any such judicial determination of the fair value of Shares could be
based upon factors other than, or in addition to, the price per Share to be
paid in the Second Step Cash Merger or the market value of the Shares. The
value so determined could be more or less than the price per Share to be paid
in the Second Step Cash Merger.
The foregoing summary of Section 262 does not purport to be complete and is
qualified in its entirety by reference to Section 262. In addition, Praxair
intends to continue to negotiate with the Company with respect to the
acquisition of the Company by Praxair. If such negotiations result in a
definitive merger agreement between the Company and Praxair (other than with
respect to the Second Step Cash Merger), holders of Shares may or may not have
appraisal rights under Section 262 in connection with the consummation of the
merger contemplated thereby, depending upon the terms of any such merger.
Going Private Transactions. The Commission has adopted Rule 13e-3 under the
Exchange Act which is applicable to certain "going private" transactions and
which may under certain circumstances be applicable to the Second Step Cash
Merger or any other merger involving the Company. However, Rule 13e-3 would be
inapplicable if (a) the Shares are deregistered under the Exchange Act prior
to the merger or (b) any such merger is consummated within one year after the
purchase of the Shares pursuant to the Offer and such merger provided for
stockholders to receive cash for their Shares in an amount at least equal to
the amount paid per Share in the Offer. If applicable, Rule 13e-3 requires,
among other things, that certain financial information concerning the fairness
of the proposed transaction and the consideration offered to minority
stockholders in such transaction be filed with the Commission and disclosed to
stockholders prior to the consummation of the transaction.
The Company has thus far been unwilling to continue to discuss the Proposed
Merger with representatives of Praxair (see Section 11 herein) and,
accordingly, the Purchaser commenced the Offer. However, Praxair intends to
continue to seek to negotiate with the Company with respect to the Proposed
Merger. If such negotiations result in a definitive merger agreement regarding
the Proposed Merger, the consideration to be received by holders of Shares
could include or consist of securities, cash or any combination thereof.
Accordingly, such negotiations could result in, among other things,
termination of the Offer (see Section 14 herein) and submission of the
Proposed Merger to the Company's stockholders for their approval. Praxair
anticipates that a period of no more than 60 to 90 days from the signing of a
definitive merger agreement regarding the Proposed Merger would be required
for the consummation of the Proposed Merger.
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13. DIVIDENDS AND DISTRIBUTIONS
If, on or after the date of this Offer to Purchase, the Company should (a)
split, combine or otherwise change the Shares or its capitalization, (b)
acquire or otherwise cause a reduction in the number of outstanding Shares or
other securities or (c) issue or sell additional Shares (other than the
issuance of Shares under option prior to the date of this Offer to Purchase,
in accordance with the terms of such options as publicly disclosed prior to
the date of this Offer to Purchase), shares of any other class of capital
stock, other voting securities or any securities convertible into or
exchangeable for, or rights, warrants or options, conditional or otherwise, to
acquire, any of the foregoing, then, subject to the provisions of Section 14
herein, the Purchaser, in its sole discretion, may make such adjustments as it
deems appropriate in the Offer Price and other terms of the Offer, including,
without limitation, the number or type of securities offered to be purchased.
If, on or after the date of this Offer to Purchase, the Company should
declare or pay any cash dividend on the Shares or other distribution on the
Shares, or issue with respect to the Shares any additional Shares, shares of
any other class of capital stock, other voting securities or any securities
convertible into, or rights, warrants or options, conditional or otherwise, to
acquire, any of the foregoing, payable or distributable to stockholders of
record on a date prior to the transfer of the Shares purchased pursuant to the
Offer to the Purchaser or its nominee or transferee on the Company's stock
transfer records, then, subject to the provisions of Section 14 herein, (a)
the Offer Price may, in the sole discretion of the Purchaser, be reduced by
the amount of any such cash dividend or cash distribution or (b) the whole of
any such noncash dividend, distribution or issuance to be received by the
tendering stockholders will (i) be received and held by the tendering
stockholders for the account of the Purchaser and will be required to be
promptly remitted and transferred by each tendering stockholder to the
Depositary for the account of the Purchaser, accompanied by appropriate
documentation of transfer, or (ii) at the direction of the Purchaser, be
exercised for the benefit of the Purchaser, in which case the proceeds of such
exercise will promptly be remitted to the Purchaser. Pending such remittance
and subject to applicable law, the Purchaser will be entitled to all rights
and privileges as owner of any such noncash dividend, distribution, issuance
or proceeds and may withhold the entire Offer Price or deduct from the Offer
Price the amount or value thereof, as determined by the Purchaser in its sole
discretion.
14. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other term or provision of the Offer, the Purchaser will
not be required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including Rule 14e-l(c) under the Exchange Act
(relating to a bidder's obligation to pay for or return tendered securities
promptly after the termination or withdrawal of such bidder's offer), to pay
for any Shares not theretofore accepted for payment or paid for unless (1) the
Minimum Tender Condition shall have been satisfied, (2) the Rights Condition
shall have been satisfied, (3) the Business Combination Condition shall have
been satisfied, (4) the Articles Condition shall have been satisfied, (5) the
Financing Condition shall have been satisfied and (6) any waiting period under
the HSR Act applicable to the purchase of Shares pursuant to the Offer shall
have expired or been terminated. Furthermore, notwithstanding any other term
or provision of the Offer, the 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 the date of this Offer to Purchase, and before the
acceptance of such Shares for payment or the payment therefor, any of the
following events or facts shall have occurred or the Purchaser shall have
learned about any such events or facts:
(a) there shall be threatened, instituted or pending any action,
proceeding, application or counterclaim by any government or governmental,
regulatory or administrative authority or agency, domestic, foreign or
supranational (each, a "Governmental Entity"), or by any other person,
domestic or foreign, before any court or Governmental Entity, (i)(A)
challenging or seeking to, or which is reasonably likely to, make illegal,
delay or otherwise directly or indirectly restrain or prohibit, or seeking
to, or which is reasonably likely to, impose voting, procedural, price or
other requirements, in addition to those required by Federal securities
laws and the DGCL (each as in effect on the date of this Offer to
Purchase), in connection with, the making of the Offer, the acceptance for
payment of, or payment for, some of or all the Shares by the Purchaser,
Praxair or any other affiliate of Praxair or the consummation by the
Purchaser, Praxair or any
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other affiliate of Praxair of the Second Step Cash Merger or other business
combination with the Company, (B) seeking to obtain material damages or (C)
otherwise directly or indirectly relating to the transactions contemplated
by the Offer, the Second Step Cash Merger or any such business combination,
(ii) seeking to prohibit or impose any limitations upon the ownership or
operation by the Purchaser, Praxair or any other affiliate of Praxair of
all or any portion of the business or assets of the Company or any of its
subsidiaries or of the Purchaser, Praxair or any other affiliate of Praxair
or to compel the Purchaser, Praxair or any other affiliate of Praxair to
dispose of or hold separate all or any portion of the business or assets of
the Company or any of its subsidiaries or of the Purchaser, Praxair or any
other affiliate of Praxair (iii) seeking to impose or confirm limitations
on the ability of the Purchaser, Praxair or any other affiliate of Praxair
effectively to exercise full rights of ownership of the Shares, including,
without limitation, the right to vote any Shares acquired or owned by the
Purchaser, Praxair or any other affiliate of Praxair on all matters
properly presented to the Company's stockholders, (iv) to require
divestiture by the Purchaser, Praxair or any other affiliate of Praxair of
any Shares, (v) which in the sole judgment of Purchaser might result in any
material diminution in the benefits expected to be derived by the
Purchaser, Praxair or any other affiliate of Praxair as a result of the
transactions contemplated by the Offer, the Second Step Cash Merger or
other business combination with the Company, (vi) otherwise directly or
indirectly relating to the Offer or the Second Step Cash Merger or which
otherwise, in the sole judgment of the Purchaser, might materially
adversely affect the Company or any of its subsidiaries or the Purchaser,
Praxair or any other affiliate of Praxair or the value of the Shares or
(vii) in the sole judgment of the Purchaser, materially adversely affecting
the business, properties, assets, liabilities, capitalization,
stockholders' equity, condition (financial or otherwise), operations,
licenses or franchises, results of operations or prospects of the Company
or any of its subsidiaries;
(b) there shall be any action taken, or any statute, rule, regulation,
legislation, interpretation, judgment, order or injunction sought,
proposed, enacted, enforced, promulgated, amended, issued or deemed
applicable to (i) the Purchaser, Praxair or any other affiliate of Praxair
or the Company or any of its subsidiaries or (ii) the Offer, the Second
Step Cash Merger or other business combination by the Purchaser, Praxair or
any other affiliate of Praxair with the Company, by any government,
legislative body or court, domestic, foreign or supranational, or other
Governmental Entity or any other person, domestic or foreign, other than
the routine application of the waiting period provisions of the HSR Act to
the Offer, or any court or Governmental Entity shall take or threaten any
action, that, in the sole judgment of the Purchaser, might, directly or
indirectly, result in any of the consequences referred to in clauses (i)
through (vii) of paragraph (a) above;
(c) any change (or any condition, event or development involving a
prospective change) shall have occurred or been threatened in the business,
properties, assets, liabilities, capitalization, stockholders' equity,
condition (financial or otherwise), operations, licenses or franchises,
results of operations or prospects of the Company or any of its
subsidiaries that, in the sole judgment of the Purchaser, is or may be
materially adverse to the Company or any of its subsidiaries, or the
Purchaser shall have become aware of any fact that, in the sole judgment of
the Purchaser, has or may have material adverse significance with respect
to either the value of the Company or any of its subsidiaries or the value
of the Shares to the Purchaser, Praxair or any other affiliate of Praxair;
(d) there shall have occurred or been threatened (i) any general
suspension of trading in, or limitation on times or prices for, securities
on any national securities exchange or in the over-the-counter market in
the United States, (ii) any significant adverse change in interest rates,
the financial markets or major stock exchange indices in the United States
or abroad or in the market price of Shares, including, without limitation,
a decline of at least 10% in either the Dow Jones Average of Industrial
Stocks or the Standard & Poors 500 Index from that existing at the close of
business on October 27, 1995, (iii) any change in the general political,
market, economic, regulatory or financial conditions in the United States
or abroad that could, in the sole judgment of the Purchaser, have a
material adverse effect upon the business, properties, assets, liabilities,
capitalization, stockholders' equity, condition (financial or otherwise),
operations, licenses or franchises, results of operations or prospects of
the Company or any of its subsidiaries or the trading in, or value of, the
Shares, (iv) any material change in United States currency exchange rates
or any other
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currency exchange rates or a suspension of, or limitation on, the markets
therefor, (v) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (vi) any limitation
(whether or not mandatory) by any government, domestic, foreign or
supranational, or Governmental Entity on, or other event that, in the sole
judgment of the Purchaser, might affect, the extension of credit by banks
or other lending institutions, (vii) a commencement of a war or armed
hostilities or other national or international calamity directly or
indirectly involving the United States or (viii) in the case of any of the
foregoing existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof;
(e) the Company or any of its subsidiaries shall have (i) split, combined
or otherwise changed, or authorized or proposed a split, combination or
other change of, the Shares or its capitalization, (ii) acquired or
otherwise caused a reduction in the number of, or authorized or proposed
the acquisition or other reduction in the number of, outstanding Shares or
other securities of the Company (except for redemption of the Rights in
accordance with the terms of the Rights Agreement), (iii) issued,
distributed, pledged or sold, or authorized or proposed the issuance,
distribution, pledge or sale of, additional Shares (other than the issuance
of Shares under option prior to the date of this Offer to Purchase, in
accordance with the terms of such options as publicly disclosed prior to
the date of this Offer to Purchase), shares of any other class of capital
stock, other voting securities or any securities convertible into or
exchangeable for, or rights, warrants or options, conditional or otherwise,
to acquire, any of the foregoing, (iv) declared or paid, or proposed to
declare or pay, any dividend or other distribution, whether payable in
cash, securities or other property, on or with respect to any shares of
capital stock of the Company (other than with respect to cash dividends
ordinary in timing and amount on the Shares, the Convertible Preferred
Shares, the Series D Preferred and the Series E Preferred), (v) entered
into any agreement for, or authorized, recommended, proposed or announced
its intention to authorize, recommend or propose, enter into or cause, any
transaction or arrangement that could adversely affect the value of the
Shares, (vi) proposed, adopted or authorized or announced its intention to
propose, adopt or authorize any amendment to the Company's Restated
Certificate of Incorporation or By-Laws or similar organizational
documents, (vii) altered or proposed to alter any material term of any
outstanding security (including the Rights), other than to amend the Rights
Agreement to make the Rights inapplicable to the Offer and the Second Step
Cash Merger, (viii) incurred any debt other than in the ordinary course of
business or any debt containing burdensome covenants, (ix) authorized,
recommended, proposed or entered into an agreement with respect to any
merger, consolidation, liquidation, dissolution, business combination,
change in capitalization, acquisition of assets, disposition of assets,
release or relinquishment of any material contractual or other right of the
Company or any of its subsidiaries or any comparable event not in the
ordinary course of business, (x) authorized, recommended, proposed or
entered into, or announced its intention to authorize, recommend, propose
or enter into, any agreement or arrangement with any person or group that
in the sole judgment of the Purchaser could, individually or in the
aggregate, adversely affect either the value of the Company or any of its
subsidiaries or the value of the Shares, Praxair or any other affiliate of
Praxair, (xi) entered into any employment, severance or similar agreement,
arrangement or plan with or for the benefit of any of its employees other
than in the ordinary course of business or transferred into escrow, trust
or similar arrangement any amounts required to fund any benefit or payment
to employees or entered into or amended any agreements, arrangements or
plans so as to provide for increased or accelerated benefits, to its
employees as a result of or in connection with the transactions
contemplated by the Offer, the Second Step Cash Merger or other business
combination or (xii) except as may be required by law, taken any action to
terminate or amend any employee benefit plan (as defined in Section 3(2) of
the Employee Retirement Income Security Act of 1974, as amended) of the
Company or any of its subsidiaries, or the Purchaser shall have become
aware of any such action that was not disclosed in publicly available
filings prior to the date of this Offer to Purchase;
(f) a tender or exchange offer for any Shares shall have been made or
publicly proposed to be made by any other person (including the Company or
any of its subsidiaries or affiliates), or it shall have been publicly
disclosed or the Purchaser shall have otherwise learned that (i) any
person, entity (including the Company or any of its subsidiaries) or
"group" (within the meaning of Section 13(d)(3) of the Exchange Act) shall
have acquired or proposed to acquire beneficial ownership of more than 5%
of any class or series
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of capital stock of the Company (including the Shares), through the
acquisition of stock, the formation of a group or otherwise, or shall have
been granted any right, option or warrant, conditional or otherwise, to
acquire beneficial ownership of more than 5% of any class or series of
capital stock of the Company (including the Shares), other than
acquisitions for bona fide arbitrage purposes only and other than
acquisitions by financial institutions, (ii) any such person, entity or
group which has publicly disclosed any such ownership or right to acquire
more than 5% of any class or series of capital stock of the Company
(including the Shares) or its subsidiaries prior to October 27, 1995 shall
have acquired or proposed to acquire additional shares of any class or
series of capital stock of the Company (including the Shares) or its
subsidiaries constituting more than 1% of such class or series or shall
have been granted any option or right to acquire more than 1% of such class
or series of capital stock of the Company (including the Shares) or its
subsidiaries, other than acquisitions for bona fide arbitrage purposes only
and other than acquisitions by financial institutions, (iii) any person or
group shall have entered into a definitive agreement or an agreement in
principle or made a proposal with respect to a tender offer or exchange
offer or a merger, share exchange, consolidation or other business
combination or a sale of assets (other than in the ordinary course of
business) with or involving the Company or any of its subsidiaries or (iv)
any person shall have filed a Notification and Report Form under the HSR
Act (or amended a prior filing to increase the applicable filing threshold
set forth therein) or made a public announcement reflecting an intent to
acquire the Company or any assets or subsidiaries of the Company;
(g) (i) any material contractual right of the Company or any of its
subsidiaries shall be impaired or otherwise adversely affected or any
material amount of indebtedness of the Company or any of its subsidiaries
shall become accelerated or otherwise become due or become subject to
acceleration prior to its stated due date, in any case with or without
notice or the lapse of time or both as a result of or in connection with
the transactions contemplated by the Offer or the Second Step Cash Merger
or other business combination involving the Company, (ii) any covenant,
term or condition in any of the Company's or any of its subsidiaries'
instruments or agreements that has or may have (whether considered alone or
in the aggregate with other covenants, terms or conditions), a material
adverse effect on (x) the business, properties, assets, liabilities,
capitalization, stockholders' equity, condition (financial or otherwise),
operations, licenses or franchises, results of operations or prospects of
the Company or any of its subsidiaries (including, but not limited to, any
event of default that may result from the consummation of the Offer, the
acquisition of control of the Company or any of its subsidiaries or the
Second Step Cash Merger or other similar business combination involving the
Company) or (y) the value of the Shares in the hands of Praxair, the
Purchaser or any of their respective affiliates or (z) the consummation by
Praxair, the Purchaser or any of their respective affiliates of the Offer
and the Second Step Cash Merger or any other business combination involving
the Company or (iii) any report, document, instrument, financial statement
or schedule of the Company or any of its subsidiaries filed with the
Commission contained when filed, an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances under
which they were made, not misleading; or
(h) any approval, permit, authorization, favorable review or consent of
any court or Governmental Entity (including those described or referred to
in this Section 14) shall not have been obtained on terms satisfactory to
Purchaser in its sole discretion; or
(i) the Purchaser or Praxair and the Company shall have entered into an
agreement that the Offer be terminated or amended or the Purchaser or
Praxair shall have entered into an agreement with the Company providing for
a merger or other business combination with the Company;
which, in the sole judgment of the Purchaser in any such case, and regardless
of the circumstances (including, without limitation, any action or inaction by
the Purchaser, Praxair or any other affiliate of Praxair) giving rise to any
such condition, makes it inadvisable to proceed with the Offer and/or with
such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of the Purchaser and its
affiliates and may be asserted by the Purchaser regardless of the
circumstances (including, without limitation, any action or inaction by the
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Purchaser or any of its affiliates) giving rise to any such condition or may
be waived by the Purchaser in whole or in part at any time and from time to
time in its sole discretion. The failure by the Purchaser at any time to
exercise any of the foregoing rights will not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and
circumstances will not be deemed a waiver with respect to any other facts and
circumstances and each such right will be deemed an ongoing right that may be
asserted at any time and from time to time. Any determination by the Purchaser
concerning the events described in this Section 14 will be final and binding
upon all parties.
15. CERTAIN LEGAL MATTERS
Except as described in this Section 15, based on a review of publicly
available filings made by the Company with the Commission and other publicly
available information concerning the Company, neither the Purchaser nor
Praxair is aware of any license or regulatory permit that appears to be
material to the business of the Company and its subsidiaries, taken as a
whole, that might be adversely affected by the Purchaser's acquisition of
Shares (and the indirect acquisition of the stock of the Company's
subsidiaries) as contemplated herein or of any approval or other action by any
Governmental Entity that would be required or desirable for the acquisition or
ownership of Shares by the Purchaser as contemplated herein. Should any such
approval or other action be required or desirable, the Purchaser and Praxair
currently contemplate that such approval or other action will be sought,
except as described below under "State Takeover Laws." While, except as
otherwise expressly described in this Section 15, the Purchaser does not
presently intend to delay the acceptance for payment of or payment for Shares
tendered pursuant to the Offer 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
failure to obtain any such approval or other action might not result in
consequences adverse to the Company's business or that certain parts of the
Company's business might not have to be disposed of if such approvals were not
obtained or such other actions were not taken or in order to obtain any such
approval or other action. If certain types of adverse action are taken with
respect to the matters discussed below, the Purchaser could decline to accept
for payment or pay for any Shares tendered. See Section 14 herein for certain
conditions to the Offer.
State Takeover Laws. A number of states throughout the United States have
enacted takeover statutes that purport, in varying degrees, to be applicable
to attempts to acquire securities of corporations that are incorporated or
have assets, stockholders, executive offices or places of business in such
states. In Edgar v. MITE Corp., the Supreme Court of the United States held
that the Illinois Business Takeover Act, which involved state securities laws
that made the takeover of certain corporations more difficult, imposed a
substantial burden on interstate commerce and therefore was unconstitutional.
In CTS Corp. v. Dynamics Corp. of America, however, the Supreme Court of the
United States held that a state may, as a matter of corporate law and, in
particular, those laws concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without prior approval of the remaining stockholders, provided
that such laws were applicable only under certain conditions. Subsequently, a
number of Federal courts ruled that various state takeover statutes were
unconstitutional insofar as they apply to corporations incorporated outside
the state of enactment.
Except as described herein, the Purchaser has not attempted to comply with
any state takeover statutes in connection with the Offer. The Purchaser
reserves the right to challenge the validity or applicability of any state law
allegedly applicable to the Offer and nothing in this Offer to Purchase nor
any action taken in connection herewith is intended as a waiver of that right.
In the event that any state takeover statute is found applicable to the Offer,
the Purchaser might be unable to accept for payment or pay for Shares tendered
pursuant to the Offer or be delayed in continuing or consummating the Offer.
In such case, the Purchaser may not be obligated to accept for payment or pay
for any Shares tendered. See Section 14 herein.
Section 203 of the DGCL. Section 203 of the DGCL, in general, prohibits a
Delaware corporation such as the Company from engaging in a "Business
Combination" (defined as a variety of transactions, including mergers) with an
"Interested Stockholder" (defined generally as a person that is the beneficial
owner of 15% or
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more of a corporation's outstanding voting stock) for a period of three years
following the date that such person became an Interested Stockholder unless
(a) prior to the date such person became an Interested Stockholder, the board
of directors of the corporation approved either the Business Combination or
the transaction that resulted in the stockholder becoming an Interested
Stockholder, (b) upon consummation of the transaction that resulted in the
stockholder becoming an Interested Stockholder, the Interested Stockholder
owned at least 85% of the voting stock of the corporation outstanding at the
time the transaction commenced, excluding stock held by directors who are also
officers of the corporation and employee stock ownership plans that do not
provide employees with the right to determine confidentially whether shares
held subject to the plan will be tendered in a tender or exchange offer or (c)
on or subsequent to the date such person became an Interested Stockholder, the
Business Combination is approved by the board of directors of the corporation
and authorized at a meeting of stockholders, and not by written consent, by
the affirmative vote of the holders of at least 66-2/3% of the outstanding
voting stock of the corporation not owned by the Interested Stockholder.
Under Section 203 of the DGCL, the restrictions described above do not apply
if, among other things (a) the corporation's original certificate of
incorporation contains a provision expressly electing not to be governed by
Section 203 of the DGCL; (b) the corporation, by action of its stockholders,
adopts an amendment to its certificate of incorporation or by-laws expressly
electing not to be governed by Section 203 of the DGCL, provided that, in
addition to any other vote required by law, such amendment to the certificate
of incorporation or by-laws must be approved by the affirmative vote of a
majority of the shares entitled to vote, which amendment would not be
effective until 12 months after the adoption of such amendment and would not
apply to any Business Combination between the corporation and any person who
became an Interested Stockholder of the corporation on or prior to the date of
such adoption; (c) the corporation does not have a class of voting stock that
is (1) listed on a national securities exchange, (2) authorized for quotation
on an inter-dealer quotation system of a registered national securities
association or (3) held of record by more than 2,000 stockholders, unless any
of the foregoing results from action taken, directly or indirectly, by an
Interested Stockholder or from a transaction in which a person becomes an
Interested Stockholder; or (d) a stockholder becomes an Interested Stockholder
"inadvertently" and thereafter divests itself of a sufficient number of shares
so that such stockholder ceases to be an Interested Stockholder. Under Section
203 of the DGCL, the restrictions described above also do not apply to certain
Business Combinations proposed by an Interested Stockholder following the
announcement or notification of one of certain extraordinary transactions
involving the corporation and a person who had not been an Interested
Stockholder during the previous three years or who became an Interested
Stockholder with the approval of a majority of the corporation's directors.
Section 203 of the DGCL provides that, during such three-year period, the
corporation may not merge or consolidate with an Interested Stockholder or any
affiliate or associate thereof, and also may not engage in certain other
transactions with an Interested Stockholder or any affiliate or associate
thereof, including, without limitation, (a) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of assets (except
proportionately as a stockholder of the corporation) having an aggregate
market value equal to 10% or more of the aggregate market value of all assets
of the corporation determined on a consolidated basis or the aggregate market
value of all the outstanding stock of a corporation; (b) any transaction which
results in the issuance or transfer by the corporation or by certain
subsidiaries thereof of any stock of the corporation or such subsidiaries to
the Interested Stockholder, except pursuant to a transaction which effects a
pro rata distribution to all stockholders of the corporation; (c) any
transaction involving the corporation or certain subsidiaries thereof which
has the effect of increasing the proportionate share of the stock of any class
or series, or securities convertible into the stock of any class or series, of
the corporation or any such subsidiary which is owned directly or indirectly
by the Interested Stockholder (except as a result of immaterial changes due to
fractional share adjustments) or (d) any receipt of the Interested Stockholder
of the benefit (except proportionately as a stockholder of such corporation)
of any loans, advances, guarantees, pledges or other financial benefits
provided by or through the corporation.
PURSUANT TO THE BUSINESS COMBINATION CONDITION, THE OFFER IS CONDITIONED
UPON THE PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT AFTER
CONSUMMATION OF THE OFFER, THE RESTRICTIONS CONTAINED IN SECTION 203 OF THE
DGCL WILL NOT APPLY TO THE SECOND STEP CASH MERGER. SEE SECTION 15 HEREIN.
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The Purchaser and Praxair are hereby requesting that the Company's Board of
Directors adopt a resolution approving the Offer and the Second Step Cash
Merger for purposes of Section 203 of the DGCL. However, there can be no
assurance that the Board of Directors of the Company will do so.
Approval of the Offer and the Second Step Cash Merger by the Board of
Directors of the Company under Section 203 of the DGCL would satisfy the
Business Combination Condition. See Section 14 herein.
Praxair and the Purchaser are hereby requesting that the Board of Directors
of the Company adopt a resolution approving and recommending the Second Step
Cash Merger pursuant to the Articles. However, there can be no assurance that
the Board of Directors of the Company will do so.
For a more full description of the Articles, see Section 12 herein.
Approval and recommendation of the Second Step Cash Merger by the Board of
Directors of the Company or, in the case of Article Fifteenth, the
satisfaction of certain specified price criteria and procedural requirements
would satisfy the Articles Condition. See Sections 12 and 14 herein.
The Rights. On October 30, 1995, Praxair commenced litigation against the
Company and members of the Board of Directors of the Company in the Delaware
Court of Chancery seeking, among other things, an order compelling the Board
of Directors of the Company to redeem the Rights or to amend the Rights
Agreement to make the Rights inapplicable to any acquisition proposal that
equals or exceeds the Proposed Merger and declaring that the Company's Board
of Directors are in breach of their fiduciary duty by continuing to deploy the
Rights Agreement.
Praxair and the Purchaser are hereby requesting that the Board of Directors
of the Company redeem the Rights or amend the Rights Agreement to make the
Rights inapplicable to the Offer and the Second Step Cash Merger and that the
Board of Directors of the Company take no action to extend the expiration of
the Rights or the Rights Agreement or enter into any similar agreement.
However, there can be no assurance that the Board of Directors of the Company
will do so.
For a more full description of the Rights, see Section 12 herein.
Redemption of the Rights (or an amendment of the Rights Agreement to make
the Rights inapplicable to the Offer and the Second Step Cash Merger) would
satisfy the Rights Condition. See Sections 12 and 14 herein.
Antitrust. Under the provisions of the HSR Act applicable to the Offer, the
acquisition of Shares under the Offer may be consummated following the
expiration of a 15-calendar day waiting period following the filing by Praxair
of a Notification and Report Form with respect to the Offer, unless Praxair
receives a request for additional information or documentary material from the
Antitrust Division or the FTC or unless early termination of the waiting
period is granted. Praxair made such filing on November 3, 1995. If, within
the initial 15-day waiting period, either the Antitrust Division or the FTC
requests additional information or material from Praxair concerning the Offer,
the waiting period will be extended and would expire at 11:59 p.m., New York
City time, on the tenth calendar day after the date of substantial compliance
by Praxair with such request. Only one extension of the waiting period
pursuant to a request for additional information is authorized by the HSR Act.
Thereafter, such waiting period may be extended only by court order or with
the consent of Praxair. In practice, complying with a request for additional
information or material can take a significant amount of time. In addition, if
the Antitrust Division or the FTC raises substantive issues in connection with
a proposed transaction, the parties may engage in negotiations with the
relevant governmental agency concerning possible means of addressing those
issues and may agree to delay consummation of the transaction while such
negotiations continue.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's proposed
acquisition of the Company. At any time before or after the Purchaser's
acquisition of Shares pursuant to the Offer, the Antitrust Division or the FTC
could take such action under the
35
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antitrust laws as it deems necessary or desirable in the public interest,
including seeking to enjoin the purchase of Shares pursuant to the Offer or
the consummation of the Second Step Cash Merger or seeking the divestiture of
Shares acquired by the Purchaser or the divestiture of substantial assets of
the Company or its subsidiaries or Praxair or its subsidiaries. Private
parties and state governmental authorities, including one or more state
attorneys general may also bring legal action under the antitrust laws under
certain circumstances and may seek damages. There can be no assurance that a
challenge to the Offer on antitrust grounds will not be made or, if such a
challenge is made, of the result thereof. See Section 14 herein.
Investment Canada Act. According to the Company Annual Report, the Company
conducts certain operations in Canada. The Investment Canada Act (the "ICA")
requires that notice of the acquisition of "control" (as defined in the ICA)
by "non-Canadians" (as defined in the ICA) of any "Canadian business" (as
defined in the ICA) be furnished to Investment Canada, a Canadian Governmental
Entity.
The acquisition of Shares by the Purchaser pursuant to the Offer may
constitute an indirect acquisition of a "Canadian business" within the meaning
of the ICA. The Purchaser intends to file any notice required under the ICA.
Canadian Pre-Merger Notification Requirements. Certain provisions of
Canada's Competition Act require pre-notification to the Director of
Investigation and Research appointed under the Competition Act (the "Canadian
Director") of significant corporate transactions, such as the acquisition of a
large percentage of the stock of a public company that has Canadian
operations, or a merger or consolidation involving such an entity. Pre-
notification is generally required with respect to transactions in which the
parties to the transactions and their affiliates have assets in Canada, or
annual gross revenues from sales in, from or into Canada, in excess of Cdn.
$400 million and which involve the direct or indirect acquisition of an
operating business, the value of the assets of which, or the annual gross
revenues from sales in or from Canada generated from these assets, exceed Cdn.
$35 million. For transactions subject to the notification requirements, notice
must be given seven or 21 days prior to the completion of the transaction
depending on the information provided to the Canadian Director. The Canadian
Director may waive the waiting period. After the applicable waiting period
expires or is waived, the transaction may be completed. If the Canadian
Director determines that the proposed transaction prevents or lessens, or is
reasonably likely to prevent or lessen, competition substantially in a
definable market, the Canadian Director may apply to the Competition Tribunal,
a special purpose Canadian tribunal, to, among other things, require the
disposition of the Canadian assets acquired in such transaction. The Purchaser
intends to file any required notice and information with respect to its
proposed acquisition with the Canadian Director and, to the extent necessary,
observe the applicable waiting period and/or apply to the Canadian Director
for an advance ruling certificate to the effect that the Offer or Second Step
Cash Merger would not prevent or lessen, or be likely to prevent or lessen,
competition substantially in a definable market.
EEA and National Merger Regulation. According to the Company 10-K, the
Company conducts substantial operations in the European Economic Area (the
"EEA"). EEC Regulation 4064/89 (the "Merger Regulation") and Article 57 of the
European Economic Area Agreement require that concentrations with a "Community
dimension" be notified in prescribed form to the Commission of the European
Communities (the "European Commission") for review and approval prior to being
put into effect. In such cases, the European Commission will, with certain
exceptions, have exclusive jurisdiction to review the concentration as opposed
to the individual countries within the EEA.
The Offer will be deemed to have a "Community dimension" if the combined
aggregate worldwide annual revenues of both Praxair and the Company exceed ECU
5 billion, if the Community-wide annual revenues of each of Praxair and the
Company exceed ECU 250 million and if both Praxair and the Company do not
receive more than two-thirds of their respective Community-wide revenues from
one and the same country. Concentrations that are found not to be subject to
the Merger Regulation may be subject to the various national merger control
regimes of the countries of the EEA, resulting in the possibility that it may
be necessary or desirable to obtain approvals from the various national
authorities.
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<PAGE>
Based upon information contained in the Company 10-K, the Purchaser
currently believes that the Offer should not be considered to have a
"Community dimension". Therefore, the Purchaser does not currently intend to
file a notification with the European Commission, but does expect to obtain
approvals from various national authorities, including without limitation,
Spain.
Other Foreign Laws. The Company 10-K and other publicly available
information indicate that the Company or a subsidiary or affiliate conducts
business or owns assets in foreign jurisdictions other than the EEA and Canada
where regulatory filings or approvals may be required or desirable in
connection with the consummation of the Offer. These jurisdictions include,
without limitation, Australia, Japan, Malaysia, Poland, Brazil, Bolivia,
Chile, Venezuela and Mexico. Certain of such filings or approvals, if required
or desirable, may not be made or obtained prior to the expiration of the
Offer. After commencement of the Offer, the Purchaser will seek further
information regarding the applicability of any such laws and currently intends
to take such action as may be required or desirable. If any government or
governmental authority or agency takes any action prior to the completion of
the Offer that, in the sole judgment of the Purchaser, might have certain
adverse effects, the Purchaser will not be obligated to accept for payment or
pay for any Shares tendered. There can be no assurance that a challenge to the
Offer will not be made pursuant to the merger control, foreign investment or
securities regimes of, or by private legal action in, one or more of the
various countries where the Company or a subsidiary or affiliate conducts
business or owns assets (or alternatively, if applicable, pursuant to the
Merger Regulation) or by legal action brought by private parties or, if such a
challenge is made, what the outcome will be. See Section 14 herein.
Environmental. Certain federal and state environmental laws can require
environmental filings or transfers or reissuances of permits in the event of a
change in ownership. In particular, the proposed transaction could require
environmental filings for any facilities of the Company and its subsidiaries
located in Connecticut and New Jersey. These filings could trigger
environmental investigations and requirements for remediation. Based upon a
review of certain publicly available information concerning the Company,
neither the Purchaser nor Praxair is aware of any environmental requirements
that would be triggered by the Purchaser's acquisition of the Shares or the
Second Step Cash Merger that would appear to be material to the business of
the Company and its subsidiaries taken as a whole.
16. FEES AND EXPENSES
Except as set forth below, neither Praxair nor the Purchaser will pay any
fees or commissions to any broker, dealer or other person for soliciting
tenders of Shares pursuant to the Offer.
CS First Boston is acting as the Dealer Manager in connection with the Offer
and is acting as financial advisor to Praxair in connection with its effort to
acquire the Company, for which services Praxair has agreed to pay CS First
Boston aggregate fees of up to a maximum of $7.1 million (a substantial
portion of which maximum fee is contingent upon the consummation of a
"Transaction"). For purposes of this Section 16, a "Transaction" shall mean
any acquisition of 50% or more of the voting power of the Company's
outstanding voting securities whether by a tender offer or two-step
acquisition, or effective control of the Company or a majority of its or its
subsidiaries' assets through a merger, asset acquisition or other form of
acquisition. Praxair has also agreed to reimburse CS First Boston (in its
capacity as Dealer Manager and financial advisor) for its reasonable out-of-
pocket expenses, including the fees and expenses of its legal counsel,
incurred in connection with its engagement, and to indemnify CS First Boston
and certain related persons against certain liabilities and expenses in
connection with its engagement, including certain liabilities under the
federal securities laws. CS First Boston has rendered various investment
banking and other advisory services to Praxair and its affiliates in the past
and is expected to continue to render such services, for which it has received
and will continue to receive customary compensation from Praxair and its
affiliates.
In the ordinary course of its business, CS First Boston engages in
securities trading, market-making and brokerage activities and may, at any
time, hold long or short positions and may trade or otherwise effect
transactions in securities of the Company. As of November 2, 1995, CS First
Boston held a net long position of 10,200 Shares.
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The Purchaser and Praxair have retained Morrow & Co., Inc. to act as the
Information Agent and The Bank of New York to serve as the Depositary in
connection with the Offer. The Information Agent and the Depositary each will
receive reasonable and customary compensation for their services, be
reimbursed for certain reasonable out-of-pocket expenses and be indemnified
against certain liabilities and expenses in connection therewith, including
certain liabilities and expenses under the Federal securities laws.
Neither the Purchaser nor Praxair will pay any fees or commissions to any
broker or dealer or other person (other than the Dealer Manager and the
Information Agent) in connection with the solicitation of tenders of
Shares pursuant to the Offer. Brokers, dealers, banks and trust companies will
be reimbursed by the Purchaser upon request for customary mailing and handling
expenses incurred by them in forwarding material to their customers.
17. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of
such jurisdiction. Neither the Purchaser nor Praxair is aware of any
jurisdiction in which the making of the Offer or the acceptance thereof would
not be in compliance with the laws of such jurisdiction. To the extent the
Purchaser or Praxair becomes aware of any state law that would limit the class
of offerees in the Offer, the Purchaser will amend the Offer and, depending on
the timing of such amendment, if any, will extend the Offer to provide
adequate dissemination of such information to holders of Shares prior to the
expiration of the Offer. In any jurisdiction the securities, blue sky or other
laws of which require the Offer to be made by a licensed broker or dealer, the
Offer is being made on behalf of the Purchaser by the Dealer Manager or one or
more registered brokers or dealers licensed under the laws of such
jurisdiction.
No person has been authorized to give any information or to make any
representation on behalf of the Purchaser or Praxair not contained herein or
in the Letter of Transmittal and, if given or made, such information or
representation must not be relied upon as having been authorized.
The Purchaser and Praxair have filed with the Commission the Tender Offer
Statement on Schedule 14D-1 pursuant to Rule 14d-3 under the Exchange Act,
together with exhibits, furnishing certain additional information with respect
to the Offer, and may file amendments thereto. Such Schedule 14D-1 and any
amendments thereto, including exhibits, should be available for inspection and
copies should be obtainable in the manner set forth in Section 9 herein
(except that such material will not be available at the regional offices of
the Commission).
PX ACQUISITION CORP.
November 3, 1995
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PRAXAIR AND THE PURCHASER
DIRECTORS AND EXECUTIVE OFFICERS OF PRAXAIR
The name, business address, present principal occupation or employment and
five-year employment history of each of the directors and executive officers
of Praxair (1) are set forth below. All such directors and executive officers
listed below are citizens of the United States except Messrs. Achaval,
deBulhoes, Natarajan and vonKrannichfeldt, who are citizens of Argentina,
Brazil, Singapore and Switzerland, respectively. The business address of each
director or executive officer is Praxair, Inc., 39 Old Ridgebury Road,
Danbury, Connecticut 06810-5113.
<TABLE>
<CAPTION>
NAME, AGE AND POSITION WITH PRAXAIR; PRINCIPAL OCCUPATION OR
BUSINESS ADDRESS EMPLOYMENT; 5-YEAR EMPLOYMENT HISTORY
---------------- ----------------------------------------------
<S> <C>
H. William Lichtenberger (59) Director since 1992. Chairman and Chief
Executive Officer of Praxair since 1992. In
1986, Mr. Lichtenberger was elected a Vice-
President of Union Carbide Corporation and was
appointed President of the Union Carbide
Chemicals and Plastics Business Group, which in
1989 became Union Carbide Chemicals and Plastics
Company Inc. He was elected President and Chief
Operating Officer and a director of Union
Carbide Corporation in 1990. He resigned as an
officer and director of Union Carbide
Corporation upon Praxair's spin-off in 1992. Mr.
Lichtenberger is a member of the Conference
Board, and The Business Roundtable and its
Policy Committee. He is Chairman of United Negro
College Fund's Connecticut Corporate Campaign
and is on the Advisory Board of the Fairfield
County Boy Scouts. Mr. Lichtenberger is also a
director of Olin Corporation and Ingersoll Rand
Company.
Alejandro Achaval (62) Director since 1992. Consultant. Mr. Achaval
served as Vice Chairman and Chief Executive
Officer, IPAKO Industrias Petroquimicas
Argentinas S.A. between 1975 and his retirement
in 1994. Mr. Achaval is Vice Chairman of the
Chamber of Chemical and Petrochemical Industries
in Argentina. He is also a director of I.D.E.A.
Argentine Institute for Management Development
and of the National Institute of Technology
(INTI) and is a director and member of the
Executive Committee of the U.I.A. (Argentine
Board of Industry) and the Fundacion Invertir
(an Argentine investment foundation). Mr.
Achaval is also a director of Praxair Argentina
S.A., an indirect subsidiary of Praxair, Inc.
John A. Clerico (53) Director since 1992. Vice President and Chief
Financial Officer of Praxair since 1992. Mr.
Clerico was elected Vice President and Treasurer
of Union Carbide Corporation in 1986 and
Principal Financial Officer in 1989. In 1988 he
was also elected Treasurer of Praxair.
</TABLE>
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(1) Praxair was incorporated as Union Carbide Industrial Gases Inc. In 1992,
it adopted its current name in connection with its spin-off from Union
Carbide Corporation. As used in this Schedule I, references to Praxair
shall, where applicable, mean Union Carbide Industrial Gases Inc.
S-1
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE AND POSITION WITH PRAXAIR; PRINCIPAL OCCUPATION OR
BUSINESS ADDRESS EMPLOYMENT; 5-YEAR EMPLOYMENT HISTORY
---------------- ----------------------------------------------
<S> <C>
In 1990 he was elected to the position of Chief
Financial Officer of Union Carbide Corporation.
He resigned as an officer of Union Carbide
Corporation upon Praxair's spin-off in 1992,
assuming his current position. He was also the
Treasurer of Praxair between 1992 and 1994. Mr.
Clerico is a member of the International
Treasurers' Association, the National
Association of Corporate Treasurers, the
Financial Executives Institute and the Multiple
Sclerosis Society and is on the Board of
Directors of the Danbury Chamber of Commerce.
John J. Creedon (71) Director since 1992. Consultant and Director of
various corporations. Mr. Creedon served as
President and Chief Executive Officer of
Metropolitan Life Insurance Company between 1983
and 1989 and as Chairman of its Executive
Committee from 1989 to 1991. Mr. Creedon is a
trustee of New York University and New York
University Law Center Foundation. He is also a
director or trustee of a number of other
nonprofit organizations. Mr. Creedon is also a
director of Banco Santander, Corporate Partners,
Melville Corporation, Metropolitan Life
Insurance Company, NYNEX Corporation, Rockwell
International Corporation, Sonat Inc. and Union
Carbide Corporation.
C. Fred Fetterolf (67) Director since 1992. Director of various
corporations. Mr. Fetterolf served as Director
and President of Aluminum Company of America
between 1983 and 1991, adding the title of Chief
Operating Officer in 1985. Mr. Fetterolf is a
trustee of Eastern College and Carnegie Mellon
University, a director of WQED and a director of
numerous community organizations. Mr. Fetterolf
is also a director of Allegheny Ludlum
Corporation, Mellon Bank Corporation, Mellon
Bank, N.A., Quaker State Corporation, Union
Carbide Corporation and Urethane Technologies,
Inc.
Dale F. Frey (63) Director since 1993. Chairman and President,
General Electric Investment Corporation since
1984. Vice President, General Electric Company
since 1980. Mr. Frey served as Vice President,
Corporate Investments and as Treasurer of
General Electric Company from 1986 through 1993.
Mr. Frey is Chairman of the Damon Runyon-Walter
Winchell Cancer Research Fund and a trustee of
Franklin & Marshall College. He is also a member
of the Warburg Pincus Advisory Committee, and
the Investment Advisory Committee of the New
York State Common Retirement Fund. Mr. Frey is
also a director of Doubletrees Hotel
Corporation, General Electric Financial
Services, Inc., Kingsway Managers Holdings
Limited and USF&G Corporation.
</TABLE>
S-2
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE AND POSITION WITH PRAXAIR; PRINCIPAL OCCUPATION OR
BUSINESS ADDRESS EMPLOYMENT; 5-YEAR EMPLOYMENT HISTORY
---------------- ----------------------------------------------
<S> <C>
Claire W. Gargalli (52) Director since 1992. Vice Chairman, Diversified
Search Companies since 1990. Ms. Gargalli served
as Director, President and Chief Operating
Officer of Equimark Corporation between 1987 and
1990. During that period she also served as
Chairman and Chief Executive Officer of Equibank
and as Chairman of Liberty Savings Bank. Ms.
Gargalli is a trustee of Carnegie Mellon
University, Middlebury College, Medical College
of Pennsylvania and Medical College Hospitals.
Ms. Gargalli is also a director of Western Atlas
Inc.
Edgar G. Hotard (52) Director since 1992. President of Praxair since
1990. Mr. Hotard served as Vice President and
General Manager for Bulk Industrial Gases of
Praxair between 1985 and 1990. Mr. Hotard was
elected a Vice President of Union Carbide
Corporation in 1990. He resigned as an officer
of Union Carbide Corporation upon Praxair's
spin-off in 1992. Mr. Hotard is past Chairman of
the Board of the International Oxygen
Manufacturers' Association and past Chairman of
the Compressed Gas Association. He is a director
of the U.S./China Business Council and a member
of the Dean's Advisory Council of the University
of New York at Buffalo. Mr. Hotard is also a
director of Aquarion Company and Iwatani
Industrial Gases (Osaka, Japan).
Ronald L. Kuehn, Jr. (60) Director since 1992. Chairman, President and
Chief Executive Officer of Sonat Inc. since
1986. Mr. Kuehn is a trustee of Tuskegee
University, Birmingham-Southern College and the
Southern Research Institute. He is on the
Advisory Board of Cumberland School of Law and a
member of the University of Alabama at
Birmingham President's Council. He is also a
director of the Interstate Natural Gas
Association of America and a director of the Gas
Research Institute. Mr. Kuehn is active in
numerous community and charitable organizations.
Mr. Kuehn is also a director of AmSouth
Bancorporation, Protective Life Corporation,
Sonat Offshore Drilling Inc., Southern Natural
Gas Company and Union Carbide Corporation.
Benjamin F. Payton (62) Director since 1992. President, Tuskegee
University since 1981. Dr. Payton is on the
Visiting Committee of Harvard University and the
Board of Visitors of Air University. He is also
a director of the Alabama Shakespeare Festival,
the United Negro College Fund, the Southern
Regional Council and National Action Council for
Minority Engineers. Dr. Payton is active in
numerous other educational and community
organizations. Dr. Payton is also a director of
AmSouth Bancorporation, AmSouth Bank, ITT
Corporation, ITT Sheraton Corporation, Liberty
Corporation, Morrisons Restaurants Inc. and
Sonat Inc.
</TABLE>
S-3
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE AND POSITION WITH PRAXAIR; PRINCIPAL OCCUPATION OR
BUSINESS ADDRESS EMPLOYMENT; 5-YEAR EMPLOYMENT HISTORY
---------------- ----------------------------------------------
<S> <C>
G. Jackson Ratcliffe, Jr. (59) Director since 1992. Chairman, President and
Chief Executive Officer of Hubbell Incorporated
since 1987. Mr. Ratcliffe is on the Board of
Governors of the National Electrical
Manufacturers Association (NEMA), a trustee of
the Manufacturers' Alliance for Productivity and
Innovation, Inc. (MAPI) and a member of the
Listed Company Advisory Committee of the New
York Stock Exchange. Mr. Ratcliffe is also a
director of Aquarion Company and Olin
Corporation.
H. Mitchell Watson, Jr. (58) Director since 1992. President, Sigma Group of
America since 1992. Mr. Watson served as Vice
President, Marketing and Service for IBM
Corporation between 1985 and 1989. In 1989, he
was elected President and Chief Executive
Officer of ROLM Company, a position he held
until 1992. Mr. Watson is President and Chairman
of the Executive Committee of Helen Keller
International. He is also a trustee of the
Interdenominational Theological Center, a member
of the Development Council of the University of
Tennessee and a former President of the North
Carolina Symphony. Mr. Watson is also a director
of Plasti-Line, Inc. and Roadway Services Inc.
Leonard M. Baker (61) Vice President, Technology, of Praxair. Mr.
Baker served as Vice President, Technology of
Union Carbide Corporation between 1986 and 1992.
Mr. Baker assumed his current position in 1992.
Paul J. Bilek (48) Vice President, North American Merchant Gases,
of Praxair. Mr. Bilek served as Business
Director for Bulk Industrial Gases of Praxair
between 1988 and 1992. He served as President of
Praxair Canada, Inc. between 1992 and 1993 and
as President of Praxair Surface Technologies,
Inc. between 1993 and 1995.
David H. Chaifetz (52) Vice President, General Counsel and Secretary of
Praxair. Mr. Chaifetz joined the Union Carbide
Corporation Law Department in 1975. In 1985, he
was appointed Assistant General Counsel of Union
Carbide Corporation. In 1986, he became Group
General Counsel, Industrial Gases/Carbon
Products and, in 1989, he was appointed General
Counsel of Praxair. Mr. Chaifetz assumed his
current position in 1992.
Felix deBulhoes (55) Vice President of Praxair since 1993. Mr
deBulhoes is also Chairman and President of S.A.
White Martins, a Praxair-affiliated company. He
has held that position since 1988.
</TABLE>
S-4
<PAGE>
<TABLE>
<S> <C>
Michael E. DeDomenico (48) Vice President, Europe, of Praxair. Mr
DeDomenico served as Director, Sales and
Commercial Development of Praxair between 1990
and 1993 and as President of Praxair Canada Inc.
in 1993. He assumed his current position in
1993.
Jesus E. Gonzalez (54) Vice President, North American On-Site Gases, of
Praxair. Mr. Gonzalez served as Business
Director, North American On-Site Gases, of
Praxair between 1990 and 1994. He assumed his
current position in 1994.
Barbara R. Harris (48) Vice President, Human Resources, of Praxair. Ms.
Harris assumed her current position in 1994 when
she joined Praxair. Ms. Harris served as Vice
President, Human Resources of Applied Power Inc.
between 1990 and 1994. She has had senior human
resources responsibilities at Okidata America
Inc. between 1987 and 1990 and at General
Electric Company between 1970 and 1987.
Ramasami Natarajan (62) Vice President, Asia, of Praxair. Mr. Natarajan
served as Vice President, Asia, of Union Carbide
Corporation between 1989 and 1995.
Jose R. Rivero (50) Vice President, North American Packaged Gases,
of Praxair, and President, Praxair Canada, Inc.
Mr. Rivero served as General Manager, Packaged
Gases of Praxair between 1990 and 1992. He
served as Vice-President, Specialty Products,
Packaged Gases and Latin America Business
Development of Praxair between 1992 and 1993.
Mr. Rivero assumed his current positions in
1993.
J. Robert Vipond (49) Vice President and Controller of Praxair. Mr
Vipond assumed his current position in 1994 when
he joined Praxair. Mr. Vipond served as Chief
Financial Officer of the Corporate Finance Group
of GE Capital, a wholly owned subsidiary of
General Electric Company, between 1990 and 1994.
He was Manager, Financial Planning and
Compliance of GE Aerospace between 1988 and 1990
and Manager, Finance of RCA Aerospace and
Defense between 1986 and 1988.
Thomas W. von Krannichfeldt (45) Vice President of Praxair and President of
Praxair Surface Technologies, Inc. Mr. von
Krannichfeldt served as President of Praxair
Puerto Rico, Inc. between 1989 and 1993 and as
President of Linde de Mexico S.A. de C.V.
between 1993 and 1995.
</TABLE>
S-5
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER
The name, business address, present principal occupation or employment and
five-year employment history of each of the directors and executive officers
of the Purchaser are set forth below. The business address of each such
director and executive officer is PX Acquisition Corp., in care of Praxair,
Inc., 39 Old Ridgebury Road, Danbury, Connecticut 06810-5113. All such
directors and executive officers listed below are citizens of the United
States.
<TABLE>
<CAPTION>
NAME, AGE AND POSITION WITH THE PURCHASER; PRINCIPAL OCCUPATION OR
BUSINESS ADDRESS EMPLOYMENT; 5-YEAR EMPLOYMENT HISTORY
---------------- ----------------------------------------------------
<S> <C>
David H. Chaifetz (52) Director and President--Secretary of the
Purchaser. See description above.
John A. Clerico (53) Director and Vice President--Treasurer of the
Purchaser. See description above.
</TABLE>
S-6
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by each holder of Shares or
such stockholder's 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:
THE BANK OF NEW YORK
By Mail: Facsimile Transmission: By Hand or Overnight
(for Eligible Courier:
Institutions Only)
(212) 815-6213
Tender and Exchange Tender and Exchange
Department Department 101 Barclay
P.O. Box 11248 Street Receive and
Church Street Station Deliver Window New York,
New York, NY 10286-1248 NY 10286
For Information Telephone:
(800) 507-9357
----------------
Questions and requests for assistance or for additional copies of this 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, trust company or other nominee for
assistance concerning the Offer.
The Information Agent for the Offer is:
MORROW & CO., INC.
909 Third Avenue, 20th Floor
New York, New York 10022
(212) 754-8000
Toll Free (800) 566-9061
Banks and Brokerage Firms please call:
(800) 662-5200
The Dealer Manager for the Offer is:
CS FIRST BOSTON
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
(800) 227-4117
<PAGE>
EXHIBIT 99.(A)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
CBI INDUSTRIES, INC.
Pursuant to the Offer to Purchase Dated November 3, 1995
by
PX ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
PRAXAIR, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, DECEMBER 4, 1995, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
THE BANK OF NEW YORK
By Mail: Facsimile Transmission: By Hand or Overnight
(for Eligible Courier:
Institutions Only)
(212) 815-6213
Tender and Exchange
Department Tender and Exchange
P.O. Box 11248 Department 101 Barclay
Church Street Station Street Receive and
New York, NY 10286-1248 Deliver Window New York,
NY 10286
Confirm by Telephone:
(800) 507-9357
---------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used either if certificates for Shares
(and Rights, if applicable) (as such terms are defined below) are to be
forwarded herewith or, unless an Agent's Message (as defined in the Offer to
Purchase dated November 3, 1995 (the "Offer to Purchase")) is used in lieu of
this Letter of Transmittal, if delivery of Shares (and Rights, if applicable)
is to be made by book-entry transfer (in the case of Rights, if available) to
an account maintained by the Depositary at a Book-Entry Transfer Facility as
defined in and pursuant to the procedures set forth in Section 2 of the Offer
to Purchase. UNLESS THE RIGHTS CONDITION (AS DEFINED IN THE OFFER TO PURCHASE)
IS SATISFIED, STOCKHOLDERS WILL BE REQUIRED TO TENDER TWO-THIRDS (2/3) OF A
RIGHT (SUBJECT TO ADJUSTMENT) FOR EACH SHARE TENDERED IN ORDER TO EFFECT A
VALID TENDER OF SHARES IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN SECTION
2 OF THE OFFER TO PURCHASE. ACCORDINGLY, STOCKHOLDERS WHO SELL THEIR RIGHTS
SEPARATELY FROM THEIR SHARES AND DO NOT OTHERWISE ACQUIRE RIGHTS MAY NOT BE
ABLE TO SATISFY THE REQUIREMENTS OF THE OFFER (AS DEFINED HEREIN) FOR A VALID
TENDER OF SHARES. UNLESS THE DISTRIBUTION DATE (AS DEFINED IN THE OFFER TO
PURCHASE) OCCURS, A TENDER OF SHARES WILL ALSO CONSTITUTE A TENDER OF THE
ASSOCIATED RIGHTS. Stockholders who deliver Shares (and Rights, if applicable)
by book-entry transfer are referred to herein as "Book-Entry Stockholders" and
other stockholders are referred to herein as "Certificate Stockholders."
Stockholders who desire to tender Shares (and Rights, if applicable) pursuant
to the Offer and whose certificates for Shares (and Rights, if applicable) are
not immediately available (including because certificates for Rights have not
yet been distributed by the Rights Agent (as defined in the Offer to
Purchase)), or who cannot comply with the procedure for book-entry transfer on
a timely basis, or who cannot deliver all required documents to the Depositary
prior to the Expiration Date (as defined in the Offer to Purchase) may tender
such Shares (and Rights, if applicable) by following all of the guaranteed
delivery procedures set forth in Section 2 of the Offer to Purchase. See
Instruction 2. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN
ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
<PAGE>
[_] CHECK HERE IF TENDERED SHARES (AND RIGHTS, IF APPLICABLE) ARE BEING
DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE
DEPOSITARY WITH A BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING
(ONLY PARTICIPANTS IN A BOOK-ENTRY TRANSFER FACILITY MAY DELIVER SHARES (AND
RIGHTS, IF APPLICABLE) BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution: ______________________________________________
Check box of Book-Entry Transfer Facility:
[_] The Depository Trust Company
[_] Midwest Securities Trust Company
[_] Philadelphia Depository Trust Company
Account Number: _____________________________________________________________
Transaction Code Number: ____________________________________________________
[_] CHECK HERE IF TENDERED SHARES (AND RIGHTS, IF APPLICABLE) ARE BEING
DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE
DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s): _____________________________________________
Date of Execution of Notice of Guaranteed Delivery: _________________________
Name of Institution that Guaranteed Delivery: _______________________________
If delivered by book-entry transfer check box of Book-Entry Transfer
Facility:
[_] The Depository Trust Company
[_] Midwest Securities Trust Company
[_] Philadelphia Depository Trust Company
Account Number: _____________________________________________________________
Transaction Code Number: ____________________________________________________
2
<PAGE>
<TABLE>
<CAPTION>
DESCRIPTION OF SHARES TENDERED
- ---------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED OWNER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) AP-
PEAR(S) SHARES TENDERED
ON CERTIFICATE(S)) (ATTACH ADDITIONAL LIST IF NECESSARY)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TOTAL NUMBER
OF SHARES NUMBER
CERTIFICATE REPRESENTED BY OF SHARES
NUMBER(S)(/1/) CERTIFICATE(S)(/1/) TENDERED(/2/)
----------------------------- --------------------- -------------
----------------------------- --------------------- -------------
----------------------------- --------------------- -------------
----------------------------- --------------------- -------------
----------------------------- --------------------- -------------
----------------------------- --------------------- -------------
TOTAL SHARES
- ---------------------------------------------------------------------------------------------------------
</TABLE>
(1) Need not be completed by Book-Entry Stockholders.
(2) Unless otherwise indicated, it will be assumed that all Shares described
above are being tendered. See Instruction 4.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION OF RIGHTS TENDERED(/1/)
- ----------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED OWNER(S) RIGHTS TENDERED
(PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL LIST IF NECESSARY)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TOTAL NUMBER
OF RIGHTS NUMBER
CERTIFICATE REPRESENTED BY OF RIGHTS
NUMBER(S)(/2/)(/3/) CERTIFICATE(S)(/3/) TENDERED(/4/)
------------------------------- -------------------- -------------
------------------------------- -------------------- -------------
------------------------------- -------------------- -------------
------------------------------- -------------------- -------------
------------------------------- -------------------- -------------
------------------------------- -------------------- -------------
TOTAL RIGHTS
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Need not be completed if the Distribution Date has not occurred.
(2) If the tendered Rights are represented by separate certificates,
complete using the certificate numbers of such certificates for Rights.
If the tendered Rights are not represented by separate certificates, or
if such certificates have not been distributed, complete using the
certificate numbers of the Shares with respect to which the Rights were
issued. Stockholders tendering Rights that are not represented by
separate certificates should retain a copy of this description in order
to accurately complete the Notice of Guaranteed Delivery if the
Distribution Date occurs.
(3) Need not be completed by Book-Entry Stockholders who are delivering
Rights by book-entry transfer.
(4) Unless otherwise indicated, it will be assumed that all Rights described
above are being tendered. See Instruction 4.
- --------------------------------------------------------------------------------
3
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to PX Acquisition Corp., a Delaware
corporation (the "Purchaser"), which is a wholly owned subsidiary of Praxair,
Inc., a Delaware corporation, the above-described shares of Common Stock, par
value $2.50 per share (the "Shares"), of CBI Industries, Inc., a Delaware
corporation (the "Company"), together with (unless and until the Purchaser
declares that the Rights Condition (as defined in the Offer to Purchase) is
satisfied) the associated rights (the "Rights") issued pursuant to the Rights
Agreement, dated as of March 4, 1986, as amended (the "Rights Agreement"),
between the Company and First Chicago Trust Company of New York, as Rights
Agent (the "Rights Agent"), upon the terms and subject to the conditions set
forth in the Offer to Purchase dated November 3, 1995, and this Letter of
Transmittal (which, together with any amendments or supplements thereto or
hereto, collectively constitute the "Offer"), receipt of which is hereby
acknowledged.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of such extension or
amendment), and subject to, and effective upon, acceptance for payment of, and
payment for, the Shares (and Rights, if applicable) tendered herewith in
accordance with the terms of the Offer, the undersigned hereby sells, assigns
and transfers to, or upon the order of, the Purchaser all right, title and
interest in and to all the Shares (and Rights, if applicable) that are being
tendered hereby (and any and all other Shares, Rights or other securities or
rights issued or issuable in respect thereof on or after November 3, 1995),
and irrevocably constitutes and appoints the Bank of New York (the
"Depositary"), the true and lawful agent and attorney-in-fact of the
undersigned, with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to the full
extent of the undersigned's rights with respect to such Shares (and Rights, if
applicable) (and any such other Shares, Rights or securities or rights), (a)
to deliver certificates for such Shares (and Rights, if applicable) (and any
such other Shares, Rights or securities or rights) or transfer ownership of
such Shares (and Rights, if applicable) (and any such other Shares, Rights or
securities or rights) on the account books maintained by a Book-Entry Transfer
Facility together, in any such case, with all accompanying evidences of
transfer and authenticity to, or upon the order of, the Purchaser, (b) to
present such Shares (and Rights, if applicable) (and any such other Shares,
Rights or securities or rights) for transfer on the Company's books and (c) to
receive all benefits and otherwise exercise all rights of beneficial ownership
of such Shares (and Rights, if applicable) (and any such other Shares, Rights
or securities or rights), all in accordance with the terms of the Offer.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the tendered Shares
(and Rights, if applicable) (and any and all other Shares, Rights or other
securities or rights issued or issuable in respect of such Shares or Rights on
or after November 3, 1995) and, if and when the same are accepted for payment
by the Purchaser, the Purchaser will acquire good title thereto, free and
clear of all liens, restrictions, claims and encumbrances, and the same will
not be subject to any adverse claim. The undersigned will, upon request,
execute any additional documents deemed by the Depositary or the Purchaser to
be necessary or desirable to complete the sale, assignment and transfer of the
tendered Shares (and Rights, if applicable) (and any and all other Shares,
Rights or other securities or rights issued or issuable in respect thereof on
or after November 3, 1995).
THE UNDERSIGNED UNDERSTANDS THAT, UNLESS THE RIGHTS CONDITION IS SATISFIED,
STOCKHOLDERS WILL BE REQUIRED TO TENDER TWO-THIRDS (2/3) OF A RIGHT (SUBJECT
TO ADJUSTMENT) FOR EACH SHARE TENDERED IN ORDER TO EFFECT A VALID TENDER OF
SHARES IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN SECTION 2 OF THE OFFER
TO PURCHASE. ACCORDINGLY, STOCKHOLDERS WHO SELL THEIR RIGHTS SEPARATELY FROM
THEIR SHARES AND DO NOT OTHERWISE ACQUIRE RIGHTS MAY NOT BE ABLE TO SATISFY
THE REQUIREMENTS OF THE OFFER FOR A VALID TENDER OF SHARES. UNLESS THE
DISTRIBUTION DATE OCCURS, A TENDER OF SHARES WILL ALSO CONSTITUTE A TENDER OF
THE ASSOCIATED RIGHTS. If the Distribution Date occurs and separate
certificates representing the Rights are distributed to holders of Shares
prior to the time a holder's Shares are tendered herewith, certificates
representing a number of Rights equal to two-thirds (2/3) times the number of
Shares being tendered herewith must be delivered to the Depositary, or, if
available, a Book-Entry Confirmation must be received by the Depositary with
respect thereto, in order for such Shares tendered herewith to be validly
tendered. If the Distribution Date occurs and separate certificates
representing the Rights are not distributed prior to the time Shares are
tendered herewith, Rights may be tendered prior to a stockholder receiving
separate certificates for Rights by use of the guaranteed delivery procedure
described in Section 2 of the Offer to Purchase. A tender of Shares
constitutes an agreement by the tendering stockholder to deliver certificates
representing a number of Rights equal to two-thirds (2/3) times the number of
Shares tendered pursuant to the Offer to the Depositary prior to expiration of
the period permitted by such guaranteed delivery procedure for delivery of
certificates for, or a Book-Entry Confirmation with respect to, Rights (the
"Rights Delivery Period"). However, after expiration of the Rights Delivery
Period, the Purchaser may elect to reject as invalid a tender of Shares with
respect to which certificates for, or a Book-Entry Confirmation with respect
to, a number of Rights equal to two-thirds (2/3) times the number of Shares
have not been received by the Depositary. Nevertheless, the Purchaser will be
entitled to accept for payment Shares tendered by the undersigned prior to
receipt of the certificates for the Rights required to be tendered with such
Shares, or a Book-Entry Confirmation with respect to such Rights, and either
(a), subject to complying with the applicable rules and regulations of the
Securities and Exchange Commission, withhold payment for such Shares pending
receipt of the certificates for, or a Book-Entry Confirmation with respect to,
such Rights or (b) make payment for Shares accepted for payment pending
receipt of the certificates for, or a Book-Entry Confirmation with respect to,
such Rights in reliance upon the agreement of a tendering stockholder to
deliver Rights and such guaranteed delivery procedures. Any determination by
the Purchaser to make payment for Shares in reliance upon such agreement and
such guaranteed delivery procedures or, after expiration of the Rights
Delivery Period, to reject a tender as invalid will be made in the sole and
absolute discretion of the Purchaser.
4
<PAGE>
All authority conferred or agreed to be conferred pursuant to this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable. See
Section 3 of the Offer to Purchase.
The undersigned hereby irrevocably appoints the designees of the Purchaser
the attorneys-in-fact and proxies of the undersigned, each with full power of
substitution, to vote at any annual, special or adjourned meeting of the
Company's stockholders or otherwise in such manner as each such attorney-in-
fact and proxy or his substitute shall in his sole discretion deem proper with
respect to, to execute any written consent concerning any matter as each such
attorney-in-fact and proxy or his substitute shall in his sole discretion deem
proper with respect to, and to otherwise act as each such attorney-in-fact and
proxy or his substitute shall in his sole discretion deem proper with respect
to, the Shares (and Rights, if applicable) tendered hereby that have been
accepted for payment by the Purchaser prior to the time any such action is
taken and with respect to which the undersigned is entitled to vote (and any
and all other Shares, Rights or other securities or rights issued or issuable
in respect of such Shares (and Rights, if applicable) on or after November 3,
1995). This appointment is effective when, and only to the extent that, the
Purchaser accepts for payment such Shares (and Rights, if applicable) as
provided in the Offer to Purchase. This power of attorney and proxy are
irrevocable, are granted in consideration of the acceptance for payment of
such Shares (and Rights, if applicable) in accordance with the terms of the
Offer and shall be considered coupled with an interest in the Shares (and
Rights, if applicable). Upon such acceptance for payment, all prior powers of
attorney, proxies and consents given by the undersigned with respect to such
Shares. Rights or other securities or rights will, without further action, be
revoked and no subsequent powers of attorney, proxies, consents or revocations
may be given (and, if given, will not be deemed effective) by the undersigned.
The undersigned understands that the valid tender of Shares (and Rights, if
applicable) pursuant to any of the procedures described in Section 2 of the
Offer to Purchase, and in the Instructions hereto will constitute a binding
agreement between the undersigned and the Purchaser upon the terms and subject
to the conditions of the Offer. Without limiting the foregoing, if the price
to be paid in the Offer is amended in accordance with the Offer, the price to
be paid to the undersigned will be the amended price notwithstanding the fact
that a different price is stated in this Letter of Transmittal.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any certificates
for Shares (and Rights, if applicable) not tendered or accepted for payment in
the name(s) of the registered holder(s) appearing under "Description of Shares
Tendered" and "Description of Rights Tendered," respectively. Similarly,
unless otherwise indicated under "Special Delivery Instructions," please mail
the check for the purchase price and/or return any certificates for Shares
(and Rights, if applicable) not tendered or accepted for payment (and
accompanying documents, as appropriate) to the address(es) of the registered
holder(s) appearing under "Description of Shares Tendered" and "Description of
Rights Tendered," respectively. In the event that both the Special Delivery
Instructions and the Special Payment Instructions are completed, please issue
the check for the purchase price and/or return any certificates for Shares
(and Rights, if applicable) not tendered or accepted for payment (and any
accompanying documents, as appropriate) in the name of, and deliver such check
and/or return such certificates (and any accompanying documents, as
appropriate) to, the person or persons so indicated. Unless otherwise
indicated herein under "Special Payment Instructions," please credit any
Shares (and Rights, if applicable) tendered herewith by book-entry transfer
that are not accepted for payment by crediting the account at the Book-Entry
Transfer Facility designated above. The undersigned recognizes that the
Purchaser has no obligation pursuant to the Special Payment Instructions to
transfer any Shares (and Rights, if applicable) from the name of the
registered holder thereof if the Purchaser does not accept for payment any of
the Shares (and Rights, if applicable) so tendered.
[_] CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE
BEEN LOST OR DESTROYED AND SEE INSTRUCTION 11.
Number of Shares represented by the lost or destroyed certificates: ___________
5
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
(SEE INSTRUCTIONS 5 AND 7)
To be completed ONLY if To be completed ONLY if
certificates for Shares or Rights certificates for Shares or Rights
not tendered or not accepted for not tendered or not accepted for
payment and/or the check for the payment and/or the check for the
purchase price of Shares or purchase price of Shares or
Rights accepted for payment are Rights accepted for payment are
to be issued in the name of to be sent to someone other than
someone other than the the undersigned, or the
undersigned. undersigned at an address other
than that above.
Issue: [_] Check[_] Certificate(s) to:
Mail: [_] Check[_] Certificate(s) to:
Name _____________________________
Please Print Name _____________________________
Please Print
Address __________________________
Address __________________________
----------------------------------
(Include Zip Code) ----------------------------------
(Include Zip Code)
----------------------------------
(Employer Identification or ----------------------------------
Social Security No.) (Employer Identification or
Social Security No.)
6
<PAGE>
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
Signature(s) of Stockholders(s) ____________________________________________
____________________________________________________________________________
Dated: , 1995
(Must be signed by registered holder(s) as name(s) appear(s) on the
certificate(s) for the Shares or Rights or on a security position listing
or by person(s) authorized to become registered holder(s) by certificate(s)
and documents transmitted herewith. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or
others acting in a fiduciary or representative capacity, please provide the
following information and see Instruction 5.)
Dated: , 1995
Name(s) ____________________________________________________________________
____________________________________________________________________________
(PLEASE PRINT)
Capacity (Full Title) ______________________________________________________
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone No. ________________________________________________
Employer Identification or Social Security Number __________________________
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature _______________________________________________________
Name _______________________________________________________________________
(PLEASE PRINT)
Name of Firm _______________________________________________________________
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone No. ________________________________________________
Dated: ___________________ , 1995
7
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this Section, includes any
participant in any of the Book-Entry Transfer Facilities' systems whose name
appears on a security position listing as the owner of the Shares) of Shares
(and Rights, if applicable) tendered herewith and such registered holder(s)
has completed neither the box entitled "Special Payment Instructions" nor the
box entitled "Special Delivery Instructions" on their Letter of Transmittal or
(b) if such Shares (and Rights, if applicable) are tendered for the account of
a financial institution (including most commercial banks, savings and loan
associations and brokerage houses) that is a participant in the Security
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Guarantee Program or the Stock Exchange Medallion Program (each an
"Eligible Institution"). In all other cases, all signatures on this Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction 5.
2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed by
a tendering stockholder either if certificates for Shares (and Rights, if
applicable) are to be forwarded herewith or, unless an Agent's Message (as
defined below) is used in lieu of this Letter of Transmittal, if delivery of
Shares (and Rights, if applicable) is to be made by book-entry transfer (in
the case of Rights, if available) to an account maintained by the Depositary
at a Book-Entry Transfer Facility pursuant to the procedures set forth in
Section 2 of the Offer to Purchase. For a stockholder validly to tender Shares
(and Rights, if applicable) pursuant to the Offer, either (a) a properly
completed and duly executed Letter of Transmittal (or a manually executed
facsimile thereof) in accordance with these Instructions, with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message in lieu of a Letter of Transmittal, and any other required documents,
must be received by the Depositary at one of its addresses set forth herein
prior to the Expiration Date and either certificates for tendered Shares (and
Rights, if applicable) must be received by the Depositary at one of such
addresses or such Shares (and Rights, if applicable) must be delivered
pursuant to the procedures for book-entry transfer set forth herein (and a
Book-Entry Confirmation, in the case of Rights, if available, received by the
Depositary), in each case prior to the Expiration Date, or (b) the tendering
stockholder must comply with the guaranteed delivery procedures set forth
below and in Section 2 of the Offer to Purchase.
The Offer is not being made for (nor will any tenders be accepted of) the
Convertible Preferred Shares (as defined in the Offer to Purchase). Holders of
the Convertible Preferred Shares who wish to participate in the Offer must
first convert their Convertible Preferred Shares into Shares in accordance
with the terms of such Convertible Preferred Shares.
UNLESS THE RIGHTS CONDITION IS SATISFIED, STOCKHOLDERS WILL BE REQUIRED TO
TENDER TWO-THIRDS (2/3) OF A RIGHT (SUBJECT TO ADJUSTMENT) FOR EACH SHARE
TENDERED IN ORDER TO EFFECT A VALID TENDER OF SHARES. ACCORDINGLY,
STOCKHOLDERS WHO SELL THEIR RIGHTS SEPARATELY FROM THEIR SHARES AND DO NOT
OTHERWISE ACQUIRE RIGHTS MAY NOT BE ABLE TO SATISFY THE REQUIREMENTS OF THE
OFFER FOR A VALID TENDER OF SHARES. UNLESS THE DISTRIBUTION DATE OCCURS, A
TENDER OF SHARES WILL ALSO CONSTITUTE A TENDER OF THE ASSOCIATED RIGHTS.
Until the close of business on the Distribution Date, the Rights will be
transferred with and only with the certificates for Shares and the surrender
for transfer of any certificates for Shares will also constitute the transfer
of the Rights associated with the Shares represented by such certificate. If
the Distribution Date occurs and separate certificates representing the Rights
are distributed to holders of Shares prior to the time Shares are tendered
herewith, certificates representing a number of Rights equal to two-thirds (2/3)
of the number of Shares being tendered herewith must be delivered to the
Depositary, or, if available, a Book-Entry Confirmation must be received by the
Depositary with respect thereto, in order for such Shares tendered herewith to
be validly tendered. If the Distribution Date occurs and separate certificates
representing the Rights are not distributed prior to the time Shares are
tendered herewith, Rights may be tendered prior to a stockholder receiving the
certificates for Rights by use of the guaranteed delivery procedure described
below.
A stockholder who desires to tender Shares (and Rights, if applicable)
pursuant to the Offer and whose certificates for Shares (and Rights, if
applicable) are not immediately available (including because certificates for
Rights have not yet been distributed by the Rights Agent) or who cannot comply
with the procedure for book-entry transfer on a timely basis, or who cannot
deliver all required documents to the Depositary prior to the Expiration Date,
may tender such Shares (and Rights, if applicable) by properly completing and
duly executing the Notice of Guaranteed Delivery pursuant to the guaranteed
delivery procedure set forth in Section 2 of the Offer to Purchase. Pursuant
to such procedure, (a) such tender must be made by or through an Eligible
Institution, (b) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser, must be
received by the Depositary, as provided below, prior to the Expiration Date
and (c) the certificates for all tendered Shares (and Rights, if applicable),
in proper form for transfer (or a Book-Entry Confirmation, in the case of the
Rights, if available, with respect to all such Shares (and Rights, if
applicable)) together with a properly completed and duly executed Letter of
Transmittal (or a manually executed facsimile thereof) with any required
signature guarantees (or, in the case of a book-entry transfer, an Agent's
Message in lieu of a Letter of Transmittal), and any other required documents,
are received by the Depositary within (i), in the case of Shares, three
trading days after the date of execution of such Notice of Guaranteed Delivery
or (ii), in the case of Rights, a period ending on the later of (1) three
trading days after the date of execution of such Notice of Guaranteed Delivery
or (2) three business days (as defined in the Offer to Purchase) after the
date certificates for Rights are distributed to stockholders by the Rights
Agent. A "trading day" is any day on which the New York Stock Exchange, Inc.
is open for business. Stockholders may not extend the foregoing time period
for delivery of Rights to the Depositary by providing a second Notice of
Guaranteed Delivery with respect to such Rights.
8
<PAGE>
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility
has received an express acknowledgement from the participant in such Book-
Entry Transfer Facility tendering the Shares that such participant has
received and agrees to be bound by the terms of the Letter of Transmittal and
that the Purchaser may enforce such agreement against the participant.
The signatures on this Letter of Transmittal cover the Shares and, if
applicable, the Rights tendered hereby whether or not such Rights are
delivered simultaneously with such Shares.
THE METHOD OF DELIVERY OF SHARES, RIGHTS, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES
(AND RIGHTS, IF APPLICABLE) WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY
RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER,
BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares (and Rights, if applicable) will be purchased. All tendering
stockholders, by execution of this Letter of Transmittal (or a manually
executed facsimile thereof), waive any right to receive any notice of the
acceptance of their Shares (and Rights, if applicable) for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares (and Rights, if applicable)
should be listed on a separate schedule attached hereto.
4. PARTIAL TENDERS (APPLICABLE TO CERTIFICATE STOCKHOLDERS ONLY). If fewer
than all the Shares (and Rights, if applicable) evidenced by any certificate
submitted are to be tendered, fill in the number of Shares (and Rights, if
applicable) that are to be tendered in the box entitled "Number of Shares
Tendered" or "Number of Rights Tendered," as appropriate. In any such case,
new certificate(s) for the remainder of the Shares (and Rights, if applicable)
that were evidenced by the old certificate(s) will be sent to the registered
holder, unless otherwise provided in the appropriate box on this Letter of
Transmittal, as soon as practicable after the acceptance for payment of, and
payment for, the Shares (and Rights, if applicable) tendered herewith. All
Shares (and Rights, if applicable) represented by certificates delivered to
the Depositary will be deemed to have been tendered unless otherwise
indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder of the Shares
(and Rights, if applicable) tendered hereby, the signature must correspond
with the name as written on the face of the certificate(s) without any change
whatsoever.
If any of the Shares (and Rights, if applicable) tendered hereby are owned
of record by two or more joint owners, all such owners must sign this Letter
of Transmittal.
If any tendered Shares (and Rights, if applicable) are registered in
different names on several certificates, it will be necessary to complete,
sign and submit as many separate Letters of Transmittal as there are different
registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity,
such persons should so indicate when signing, and proper evidence satisfactory
to the Purchaser of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares (and Rights, if applicable) listed and transmitted hereby, no
endorsements of certificates or separate stock powers are required unless
payment or certificates for Shares (and Rights, if applicable) not tendered or
accepted for payment are to be issued to a person other than the registered
owner(s). Signatures on such certificates or stock powers must be guaranteed
by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the certificates listed, the certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or names of the registered owner or owners appear on the
certificates. Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution.
6. STOCK TRANSFER TAXES. The Purchaser will pay any stock transfer taxes
with respect to the transfer and sale of Shares (and Rights, if applicable) to
it or its order pursuant to the Offer. If, however, payment of the purchase
price is to be made to, or if certificates for Shares (and Rights, if
applicable) not tendered or accepted for payment are to be registered in the
name of, any person(s) other than the registered holder(s), or if tendered
certificates are registered in the name(s) of any person(s) other than the
person(s) signing this Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the registered holder(s) or such person(s)) payable
on account of the transfer to such person(s) will be deducted from the
purchase price unless satisfactory evidence of the payment of such taxes or
exemption therefrom is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
9
<PAGE>
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued in
the name of, and/or certificates for Shares (and Rights, if applicable) not
accepted for payment are to be returned to, a person other than the signer of
this Letter of Transmittal or if a check is to be sent and/or such
certificates are to be returned to a person other than the signer of this
Letter of Transmittal or to an address other than that shown above, the
appropriate boxes on this Letter of Transmittal should be completed.
8. WAIVER OF CONDITIONS. The Purchaser reserves the absolute right in its
sole discretion to waive any of the specified conditions of the Offer, in
whole or in part, in the case of any Shares (and Rights, if applicable)
tendered.
9. 31% BACKUP WITHHOLDING. In order to avoid "backup withholding" of Federal
income tax on payments of cash pursuant to the Offer, a stockholder
surrendering Shares in the Offer must, unless an exemption applies, provide
the Depositary with such stockholder's correct taxpayer identification number
("TIN") on Substitute Form W-9 in this Letter of Transmittal and certify under
penalties of perjury that such TIN is correct and that such stockholder is not
subject to backup withholding. If a stockholder does not provide such
stockholder's correct TIN or fails to provide the certifications described
above, the Internal Revenue Service (the "IRS") may impose a penalty on such
stockholder and payment of cash to such stockholder pursuant to the Offer may
be subject to backup withholding of 31%.
Backup withholding is not an additional income tax. Rather, the amount of
the backup withholding can be credited against the Federal income tax
liability of the person subject to the backup withholding, provided that the
required information is given to the IRS. If backup withholding results in an
overpayment of tax, a refund can be obtained by the stockholder upon filing an
income tax return.
The stockholder is required to give the Depositary the TIN (i.e., social
security number or employer identification number) of the record owner of the
Shares. If the Shares are held in more than one name or are not in the name of
the actual owner, consult the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for additional guidance
on which number to report.
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
stockholder has not been issued a TIN and has applied for a TIN or intends to
apply for a TIN in the near future. If the box in Part 3 is checked, the
stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% on all payments made prior to the time a properly certified TIN
is provided to the Depositary. However, such amounts will be refunded to such
stockholder if a TIN is provided to the Depositary within 60 days.
Certain stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign stockholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See the
enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for more instructions.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for
assistance or additional copies of the Offer to Purchase, the Letter of
Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
directed to the Information Agent or the Dealer Manager at their respective
addresses set forth below.
11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate representing
Shares (and Rights, if applicable) has been lost, destroyed or stolen, the
stockholder should promptly notify the Depositary by checking the box
immediately preceding the special payment/special delivery instructions and
indicating the number of Shares (and Rights, if applicable) lost. The
stockholder will then be instructed as to the steps that must be taken in
order to replace the certificate. This Letter of Transmittal and related
documents cannot be processed until the procedures for replacing lost or
destroyed certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR MANUALLY EXECUTED FACSIMILE
THEREOF), TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF
A BOOK-ENTRY TRANSFER, AN AGENT'S MESSAGE IN LIEU OF THIS LETTER OF
TRANSMITTAL, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE AND EITHER CERTIFICATES FOR TENDERED
SHARES (AND RIGHTS, IF APPLICABLE) MUST BE RECEIVED BY THE DEPOSITARY OR
SHARES (AND RIGHTS, IF APPLICABLE) MUST BE DELIVERED PURSUANT TO THE
PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH CASE PRIOR TO THE EXPIRATION DATE,
OR THE TENDERING STOCKHOLDER MUST COMPLY WITH THE PROCEDURES FOR GUARANTEED
DELIVERY.
10
<PAGE>
PAYER'S NAME: PX ACQUISITION CORP.
----------------------------
PART I--PLEASE PROVIDE YOUR Social security number
TIN IN THE BOX AT RIGHT AND or
CERTIFY BY SIGNING AND
DATING BELOW ----------------------------
SUBSTITUTE Employer identification
number
FORM W-9 -------------------------------------------------------------
DEPARTMENT OF PART 2--Certificates--Under penalties of perjury, I certify
THE TREASURY that:
INTERNAL
REVENUE SERVICE (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
PAYER'S REQUEST
FOR (2) I am not subject to backup withholding because (a) I am
TAXPAYER exempt from backup withholding or (b) I have not been
IDENTIFICATION notified by the Internal Revenue Service ("IRS") that I
NUMBER (TIN) am subject to backup withholding as a result of a
failure to report all interest or dividends or (c) the
IRS has notified me that I am no longer subject to
backup withholding.
-------------------------------------------------------------
CERTIFICATION INSTRUCTIONS--You must cross
out item (2) in Part 2 above if you have PART 3
been notified by the IRS that you are
subject to backup withholding because of AWAITING TIN [_]
underreporting of interest or dividends on
your tax returns. However, if after being
notified by the IRS that you were subject ---------------
to backup withholding you received another PART 4
notification from the IRS stating that you EXEMPT TIN [_]
are no longer subject to backup
withholding, do not cross out item(2). If
you are exempt from backup withholding,
check the box in Part 4 above.
-------------------------------------------------------------
SIGNATURE________________________________DATE ________, 1995
-------------------------------------------------------------
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF SUBSTITUTE FORM W-9
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(b) I intend to mail or deliver an application in the near future. I
understand that, if I do not provide a taxpayer identification number to
the Depositary, 31% of all reportable payments made to me will be withheld,
but will be refunded if I provide a certified taxpayer identification
number within 60 days.
------------------------------------- -------------------------------------
SIGNATURE DATE
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT
IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO
THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION
OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR
ADDITIONAL INFORMATION.
11
<PAGE>
The Information Agent for the Offer is:
MORROW & CO., INC.
909 Third Avenue, 20th Floor
New York, NY 10022
(212) 754-8000
Toll Free (800) 566-9061
Banks and Brokerage Firms please call:
(800) 662-5200
The Dealer Manager for the Offer is:
CS FIRST BOSTON
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
(800) 227-4117
November 3, 1995
12
<PAGE>
EXHIBIT 99.(A)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
CBI INDUSTRIES, INC.
As set forth in Section 2 of the Offer to Purchase (as defined below), this
form or one substantially equivalent hereto must be used to accept the Offer
(as defined below) if certificates for shares of Common Stock, par value $2.50
per share (the "Shares"), of CBI Industries, Inc., a Delaware corporation (the
"Company"), and, if applicable, certificates of any associated rights (the
"Rights") issued pursuant to the Rights Agreement, dated as of March 4, 1986,
between the Company and First Chicago Trust Company of New York, as Rights
Agent (the "Rights Agent"), are not immediately available (including because
certificates for Rights have not yet been distributed by the Rights Agent or if
the procedure for book-entry transfer cannot be completed on a timely basis or
time will not permit all required documents to reach the Depositary prior to
the Expiration Date (as defined below)). This form may be delivered by hand to
the Depositary or transmitted by telegram, facsimile transmission or mail to
the Depositary and must include a guarantee by an Eligible Institution (as
defined in the Offer to Purchase) in the form set forth herein. See Section 2
of the Offer to Purchase.
The Depositary for the Offer is:
THE BANK OF NEW YORK
By Mail: Facsimile Transmission: By Hand or Overnight
(for Eligible Courier:
Institutions Only)
(212) 815-6213
Tender and Exchange
Department Tender and Exchange
P.O. Box 11248 Department 101 Barclay
Church Street Station Street Receive and
New York, NY 10286-1248 Deliver Window New York,
NY 10286
Confirm by Telephone:
(800) 507-9357
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS
VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A
VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
(as defined below) under the instructions thereto, such signature guarantee
must appear in the applicable space provided in the signature box on the Letter
of Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to PX Acquisition Corp., a Delaware
corporation (the "Purchaser"), which is a wholly owned subsidiary of Praxair,
Inc., a Delaware corporation, upon the terms and subject to the conditions set
forth in the Offer to Purchase dated November 3, 1995 (the "Offer to Purchase")
and the related Letter of Transmittal, receipt of which is hereby acknowledged,
the number of Shares and Rights set forth below, all pursuant to the guaranteed
delivery procedures set forth in the Section 2 of the Offer to Purchase.
Number of Shares:____________________ Area Code and Tel. No.:______________
Name(s) of Record Holder(s):_________ (Check one box if Shares or Rights
will be tendered by book-entry
- ------------------------------------- transfer)
- ------------------------------------- [_] The Depository Trust Company
PLEASE PRINT [_] Midwest Securities Trust Company
[_] Philadelphia Depository Trust
Number of Rights:____________________ Company
Certificate Nos. (if available):_____ Signature(s):________________________
- ------------------------------------- -------------------------------------
Address(es):_________________________ Account Number:______________________
- ------------------------------------- -------------------------------------
ZIP CODE
Dated:_______________________________
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agent's Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program (an "Eligible Institution"), hereby
guarantees to deliver to the Depositary either the certificates representing
the Shares (and Rights, if applicable) tendered hereby, in proper form for
transfer, or a Book-Entry Confirmation with respect to such Shares (and Rights,
if applicable), together with a properly completed and duly executed Letter of
Transmittal (or manually executed facsimile thereof), with any required
signature guarantees (or, in the case of a book-entry transfer, an Agent's
Message in lieu of a Letter of Transmittal), and any other required documents
(a), in the case of Shares, within three trading days after the date hereof and
(b), in the case of Rights, within a period ending on the later of (i) three
trading days after the date hereof or (ii) three business days after the date
certificates for Rights are distributed to stockholders by the Rights Agent.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares (and Rights, if applicable) to the Depositary within
the time period shown herein. Failure to do so could result in a financial loss
to such Eligible Institution. All terms used herein have the meaning set forth
in the Offer to Purchase.
- ------------------------------------- -------------------------------------
NAME OF FIRM AUTHORIZED SIGNATURE
- ------------------------------------- -------------------------------------
ADDRESS TITLE
- ------------------------------------- Name:________________________________
ZIP CODE PLEASE PRINT
Area Code and Tel. No.:______________ Date:__________________________, 1995
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES FOR
SHARES (AND RIGHTS, IF APPLICABLE) SHOULD BE SENT WITH YOUR LETTER OF
TRANSMITTAL.
2
<PAGE>
EXHIBIT 99.(A)(4)
LOGO CS First Boston
CS First Boston
Corporation
Park Avenue Plaza
55 East 52nd Street
New York, New York
10055
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
of
CBI INDUSTRIES, INC.
at
$32.00 NET PER SHARE
by
PX ACQUISITION CORP.
a Wholly Owned Subsidiary of
PRAXAIR, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, DECEMBER 4, 1995,
UNLESS THE OFFER IS EXTENDED.
November 3, 1995
To Brokers, Dealers, Banks,
Trust Companies and other Nominees:
We have been engaged by PX Acquisition Corp., a Delaware corporation (the
"Purchaser"), which is a wholly owned subsidiary of Praxair, Inc., a Delaware
corporation ("Praxair"), to act as Dealer Manager in connection with the Offer
to Purchase dated November 3, 1995 (the "Offer to Purchase") for cash all
outstanding shares of Common Stock, par value $2.50 per share (the "Shares"),
of CBI Industries, Inc., a Delaware corporation (the "Company"), together with
(unless and until the Purchaser declares that the Rights Condition (as defined
in the Offer to Purchase) is satisfied) the associated rights (the "Rights")
issued pursuant to the Rights Agreement, dated as of March 4, 1986, as amended
between the Company and First Chicago Trust Company of New York, as Rights
Agent upon the terms and subject to the conditions set forth in the Offer to
Purchase and in the related Letter of Transmittal (which, together with any
amendments or supplements thereto, collectively constitute the "Offer"). Please
furnish copies of the enclosed materials to those of your clients for whom you
hold Shares registered in your name or in the name of your nominee.
Unless the Rights Condition is satisfied, stockholders will be required to
tender two-thirds (2/3) of a Right (subject to adjustment) for each share
tendered in order to effect a valid tender of shares in accordance with the
procedures set forth in Section 2 of the Offer to Purchase. Accordingly,
stockholders who sell their Rights separately from their shares and do not
otherwise acquire Rights may not be able to satisfy the requirements of the
Offer for a valid tender of shares. Unless the Distribution Date (as defined in
the Offer to Purchase) occurs, a tender of shares will also constitute a tender
of the Associated Rights.
<PAGE>
Enclosed herewith are copies of the following documents:
1. Offer to Purchase dated November 3, 1995;
2. Letter of Transmittal to be used by stockholders of the Company in
accepting the Offer;
3. A printed form of letter that may be sent to your clients for whose
account you hold Shares (and Rights, if applicable) in your name or in the
name of a nominee, with space provided for obtaining such clients'
instructions with regard to the Offer;
4. Notice of Guaranteed Delivery;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. Return envelope addressed to The Bank of New York, the Depositary.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS (i) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE
OFFER TO PURCHASE) THAT NUMBER OF SHARES THAT WOULD REPRESENT AT LEAST A
MAJORITY OF ALL OUTSTANDING SHARES ON A FULLY DILUTED BASIS ON THE DATE OF
PURCHASE, (ii) THE RIGHTS HAVING BEEN REDEEMED BY THE BOARD OF DIRECTORS OF THE
COMPANY OR THE PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE
RIGHTS HAVE BEEN INVALIDATED OR ARE OTHERWISE INAPPLICABLE TO THE OFFER AND THE
SECOND STEP CASH MERGER (AS DEFINED IN THE OFFER TO PURCHASE), (iii) THE
PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT AFTER CONSUMMATION OF
THE OFFER, THE RESTRICTIONS CONTAINED IN SECTION 203 OF THE DELAWARE GENERAL
CORPORATION LAW WILL NOT APPLY TO THE SECOND STEP CASH MERGER, (iv) THE
PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT NO SUPERMAJORITY VOTE
WILL BE REQUIRED BY ARTICLES TENTH OR FIFTEENTH OF THE COMPANY'S RESTATED
CERTIFICATE OF INCORPORATION, AS AMENDED, TO APPROVE THE SECOND STEP CASH
MERGER OR THAT AFTER CONSUMMATION OF THE OFFER THAT PURCHASER WILL OTHERWISE
POSSESS SUFFICIENT VOTING POWER TO EFFECT THE SECOND STEP CASH MERGER WITHOUT
THE AFFIRMATIVE VOTE OF ANY PERSON OTHER THAN THE PURCHASER AND (v) THE
PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE PURCHASER HAS
OBTAINED SUFFICIENT FINANCING TO ENABLE IT TO CONSUMMATE THE OFFER AND THE
SECOND STEP CASH MERGER.
We urge you to contact your clients promptly. Please note that the Offer and
Withdrawal Rights will expire at 12:00 Midnight, New York City time, on Monday,
December 4, 1995, unless the Offer is extended by the Purchaser.
Neither the Purchaser nor Praxair will pay any fees or commissions to any
broker or dealer or other person (other than the Dealer Manager and the
Information Agent as described in the Offer to Purchase) in connection with the
solicitation of tenders of Shares (and Rights, if applicable) pursuant to the
Offer. You will be reimbursed upon request for customary mailing and handling
expenses incurred by you in forwarding the enclosed offering materials to your
customers.
2
<PAGE>
Additional copies of the enclosed material may be obtained by contacting the
Information Agent or the Dealer Manager at their respective addresses and
telephone numbers set forth on the back cover of the enclosed Offer to
Purchase.
Very truly yours,
CS FIRST BOSTON CORPORATION
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR ANY
OTHER PERSON THE AGENT OF THE PURCHASER, PRAXAIR, THE DEPOSITARY, THE
INFORMATION AGENT OR THE DEALER MANAGER OR AUTHORIZE YOU OR ANY OTHER PERSON TO
GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF ANY OF THEM WITH
RESPECT TO THE OFFER NOT CONTAINED IN THE OFFER TO PURCHASE OR THE LETTER OF
TRANSMITTAL.
3
<PAGE>
EXHIBIT 99.(A)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
CBI INDUSTRIES, INC.
at
$32.00 NET PER SHARE
by
PX ACQUISITION CORP.
a Wholly Owned Subsidiary of
PRAXAIR, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, DECEMBER 4, 1995,
UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated November 3,
1995 (the "Offer to Purchase") and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute
the "Offer") relating to the Offer by PX Acquisition Corp., a Delaware
corporation (the "Purchaser"), which is a wholly owned subsidiary of Praxair,
Inc., a Delaware corporation ("Praxair"), to purchase for cash all outstanding
shares of Common Stock, par value $2.50 per share (the "Shares"), of CBI
Industries, Inc., a Delaware corporation (the "Company"), together with (unless
and until the Purchaser declares that the Rights Condition (as defined in the
Offer to Purchase) is satisfied) the associated rights (the "Rights") issued
pursuant to the Rights Agreement, dated as of March 4, 1986, as amended,
between the Company and First Chicago Trust Company of New York, as Rights
Agent. UNLESS THE RIGHTS CONDITION IS SATISFIED, STOCKHOLDERS WILL BE REQUIRED
TO TENDER TWO-THIRDS (2/3) OF A RIGHT (SUBJECT TO ADJUSTMENT) FOR EACH SHARE
TENDERED IN ORDER TO EFFECT A VALID TENDER OF SHARES IN ACCORDANCE WITH THE
PROCEDURES SET FORTH IN SECTION 2 OF THE OFFER TO PURCHASE. ACCORDINGLY,
STOCKHOLDERS WHO SELL THEIR RIGHTS SEPARATELY FROM THEIR SHARES AND DO NOT
OTHERWISE ACQUIRE RIGHTS MAY NOT BE ABLE TO SATISFY THE REQUIREMENTS OF THE
OFFER FOR A VALID TENDER OF SHARES. UNLESS THE DISTRIBUTION DATE (AS DEFINED IN
THE OFFER TO PURCHASE) OCCURS, A TENDER OF SHARES WILL ALSO CONSTITUTE A TENDER
OF THE ASSOCIATED RIGHTS.
We are the holder of record of Shares held by us for your account. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
We request instructions as to whether you wish to tender any or all of the
Shares (and Rights, if applicable) held by us for your account, pursuant to the
terms and conditions set forth in the Offer.
<PAGE>
Your attention is directed to the following:
1. The tender offer price is $32.00 per Share (and associated Right, if
applicable), net to the seller in cash, without interest thereon, upon the
terms and subject to the conditions of the Offer.
2. The Offer is being made for all of the outstanding Shares (and Rights,
if applicable).
3. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON MONDAY, DECEMBER 4, 1995, UNLESS THE OFFER IS EXTENDED
BY THE PURCHASER.
4. The Offer is conditioned upon, among other things, (i) there being
validly tendered and not withdrawn prior to the Expiration Date (as defined
in the Offer to Purchase) that number of Shares that would represent at
least a majority of all outstanding Shares on a fully diluted basis on the
date of purchase, (ii) the Rights having been redeemed by the Board of
Directors of the Company or the Purchaser being satisfied, in its sole
discretion, that the Rights have been invalidated or are otherwise
inapplicable to the Offer and the Second Step Cash Merger (as defined in
the Offer to Purchase), (iii) the Purchaser being satisfied, in its sole
discretion, that after consummation of the Offer, the restrictions
contained in Section 203 of the Delaware General Corporation Law will not
apply to the Second Step Cash Merger, (iv) the Purchaser being satisfied,
in its sole discretion, that no supermajority vote will be required by
Articles Tenth or Fifteenth of the Company's Restated Certificate of
Incorporation, as amended, to approve the Second Step Cash Merger or that
after consummation of the Offer that Purchaser will otherwise possess
sufficient voting power to effect the Second Step Cash Merger without the
affirmative vote of any person other than the Purchaser and (v) the
Purchaser being satisfied, in its sole discretion, that the Purchaser has
obtained sufficient financing to enable it to consummate the Offer and the
Second Step Cash Merger.
5. Any stock transfer taxes applicable to a sale of Shares (and Rights,
if applicable) to the Purchaser will be borne by the Purchaser, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
Your instruction to us should be forwarded promptly to permit us to submit a
tender on your behalf prior to the expiration of the Offer.
If you wish to have us tender any of or all of your Shares (and Rights, if
applicable) held by us for your account, please so instruct us by completing,
executing, detaching and returning to us the instruction form on the detachable
part hereof. An envelope to return your instructions to us is enclosed. If you
authorize the tender of your Shares (and Rights, if applicable), all such
Shares (and Rights, if applicable) will be tendered unless otherwise specified
on the detachable part hereof. Your instructions should be forwarded to us in
ample time to permit us to submit a tender on your behalf prior to the
expiration of the Offer.
In all cases, payment for Shares (and Rights, if applicable) accepted for
payment pursuant to the Offer will be made only after timely receipt by The
Bank of New York (the "Depositary"), of (a) certificates for (or a timely Book-
Entry Confirmation (as defined in the Offer to Purchase) with respect to) such
Shares and, if the Distribution Date occurs, certificates for (or a timely
Book-Entry Confirmation, if available, with respect to) the associated Rights
(unless the Purchaser elects to make payment for such Shares and Rights,
pending receipt of the certificates for, or a Book-Entry Confirmation with
respect to, such Rights as described in Section 2 of the Offer to Purchase),
(b) a Letter of Transmittal (or a manually executed facsimile thereof),
properly completed and duly executed, with any required signature guarantees
(or, in the case of a book-entry transfer, an Agent's Message in lieu of a
Letter of Transmittal) and (c) any other documents required by the Letter of
Transmittal. Accordingly, tendering stockholders may be paid at different times
depending upon when certificates for Shares (and Rights, if applicable) or
Book-Entry Confirmations with respect to Shares (and Rights, if applicable and
if available) are actually received by the Depositary. UNDER NO CIRCUMSTANCES
WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE
PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
The Offer is not being made to, nor will tenders be accepted from, or on
behalf of, holders of Shares (and Rights, if applicable) in any jurisdiction in
which the making or acceptance of the Offer would not be in compliance with the
laws of such jurisdiction.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO
THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
CBI INDUSTRIES, INC.
The undersigned acknowledge(s) receipt of your letter, the Offer to Purchase
of PX Acquisition Corp. dated November 3, 1995 (the "Offer to Purchase") and
the related Letter of Transmittal relating to shares of Common Stock, par value
$2.50 per share (the "Shares"), of CBI Industries, Inc., a Delaware corporation
(the "Company"), including the associated rights (the "Rights").
This will instruct you to tender the number of Shares and Rights indicated
below held by you for the account of the undersigned, on the terms and subject
to the conditions set forth in such Offer to Purchase and Letter of
Transmittal.
Number of Shares Number of Rights
to be Tendered* to be Tendered*
Shares Rights
-------- --------
SIGN HERE
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
SIGNATURE(S) (PLEASE PRINT NAME(S) AND
ADDRESS(ES))
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
(Area Code(s) and Telephone (Tax Identification or Social
Number(s)) Security Number(s))
Dated: , 1995
- --------
* UNLESS THE RIGHTS CONDITION (AS DEFINED IN THE OFFER TO PURCHASE) IS
SATISFIED, STOCKHOLDERS WILL BE REQUIRED TO TENDER TWO-THIRDS (2/3) OF A
RIGHT FOR EACH SHARE TENDERED TO EFFECT A VALID TENDER OF SHARES. UNLESS THE
DISTRIBUTION DATE (AS DEFINED IN THE OFFER TO PURCHASE) OCCURS, A TENDER OF
SHARES WILL ALSO CONSTITUTE A TENDER OF THE ASSOCIATED RIGHTS. Unless
otherwise indicated, it will be assumed that all your Shares (and Rights, if
applicable) are to be tendered.
3
<PAGE>
EXHIBIT 99(A)(6)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares or Rights. The Offer is made solely by the Offer to Purchase
dated November 3, 1995, and the related Letter of Transmittal, and is not being
made to (nor will tenders be accepted from or on behalf of) holders of Shares or
Rights in any jurisdiction in which the making of the Offer or the acceptance
thereof would not be in compliance with the laws of such jurisdiction. In any
jurisditions where securities, blue sky or other laws require the Offer to be
made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of the Purchaser by CS First Boston Corporation or one or more registered
brokers or dealers licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Rights)
of
CBI Industries, Inc.
at
$32.00 Net Per Share
by
PX Acquisition Corp.
a Wholly Owned Subsidiary of
Praxair, Inc.
PX Acquisition Corp., a Delaware corporation (the "Purchaser"), which is
a wholly owned subsidiary of Praxair, lnc., a Delaware corporation ("Praxair"),
hereby offers to purchase all outstanding shares of Common Stock, par value
$2.50 per share (the "Shares"), of CBI Industries, Inc., a Delaware corporation
(the "Company"), together with (unless and until the Purchaser declares that the
Rights Condition (as defined in the Offer to Purchase) is satisfied) the
associated rights (the "Rights") issued pursuant to the Rights Agreement, dated
as of March 4, 1986, as amended (the "Rights Agreement"), between the Company
and First Chicago Trust Company of New York, as Rights Agent (the "Rights
Agent"), at a price of $32.00 per Share (and associated Right), 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 dated November 3,
1995 (the "Offer to Purchase"), and in the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer"). All references herein to "Rights" shall include all benefits that may
inure to holders of the Rights pursuant to the Rights Agreement and, unless the
context otherwise requires, all references herein to "Shares" shall include the
associated Rights. Unless the Rights Condition is satisfied, stockholders will
be required to tender two-thirds (2/3) of a Right (subject to adjustment) for
each Share tendered in order to effect a valid tender of Shares in accordance
with the procedures set forth in Section 2 of the Offer to Purchase.
Accordingly, stockholders who sell their Rights separately from their Shares and
do not otherwise acquire Rights may not be able to satisfy the requirements of
the Offer for a valid tender of Shares. Unless the Distribution Date (as defined
in the Offer to Purchase) occurs, a tender of Shares will also constitute a
tender of the associated Rights.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MONDAY, DECEMBER 4, 1995, UNLESS THE OFFER IS EXTENDED.
The purpose of the Offer is to enable the Purchaser, if it is not able to
effect the Proposed Merger (as defined in the Offer to Purchase), to acquire
control of, and the entire equity interest in, the Company. The Offer is
intended to facilitate the acquisition of all the Shares. If the Offer is
consummated, then as soon as practicable thereafter, the Purchaser will seek to
consummate a merger between the Company and the Purchaser or another direct or
indirect wholly owned subsidiary of Praxair (the "Second Step Cash Merger"). The
purpose of the Second Step Cash Merger is to acquire all Shares not tendered and
purchased pursuant to the Offer or otherwise. Pursuant to the Second Step Cash
Merger, each then outstanding Share (other than Shares owned by the Purchaser or
Praxair or any of their subsidiaries, Shares held in the treasury of the Company
and Shares owned by stockholders who perfect dissenters" rights under the
Delaware General Corporation Law (the ODGCLO)) would be converted into the right
to receive an amount in cash equal to the price per Share paid pursuant to the
Offer. Praxair intends to continue to seek to negotiate with the Company with
respect to the Proposed Merger. The Purchaser reserves the right to amend or
terminate the Offer if such negotiations result in a merger agreement with the
Company.
The Offer is conditioned upon, among other things, (i) there being
validly tendered and not withdrawn prior to the Expiration Date (as
defined below) that number of Shares that would represent at least a majority of
all outstanding Shares on a fully diluted basis on the date of purchase, (ii)
the Rights having been redeemed by the Board of Directors of the Company or the
Purchaser being satisfied, in its sole discretion, that the Rights have been
invalidated or are otherwise inapplicable to the Offer and the Second Step Cash
Merger, (iii) the Purchaser being satisfied, in its sole discretion, that after
consummation of the Offer, the restrictions contained in Section 203 of the DGCL
will not apply to the Second Step Cash Merger, (iv) the Purchaser being
satisfied, in its sole discretion, that no supermajority vote will be required
by Articles Tenth or Fifteenth of the Company's Restated Certificate of
Incorporation, as amended, to approve the Second Step Cash Merger or that after
consummation of the Offer that the Purchaser will otherwise possess sufficient
voting power to effect the Second Step Cash Merger without the affirmative vote
of any person other than the Purchaser and (v) the Purchaser being satisfied, in
its sole discretion, that the Purchaser has obtained sufficient financing to
enable it to consummate the Offer and the Second Step Cash Merger. See Sections
1, 14 and 15 of the Offer to Purchase.
The term "Expiration Date" means 12:00 midnight, New York City time, on
Monday, December 4, 1995, unless and until the
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 mean the latest time and date at which the Offer, as so extended by
the Purchaser, will expire.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares properly tendered to the Purchaser
and not withdrawn as, if and when the Purchaser gives oral or written notice to
The Bank of New York (the "Depositary") of the Purchaser's acceptance for
payment of such Shares. Payment for Shares accepted for payment pursuant to the
Offer will be made by deposit of the purchase price therefor with the
Depositary, which will act as agent for tendering stockholders for the purpose
of receiving payment from the Purchaser and transmitting payment to tendering
stockholders. Under no circumstances will interest be paid on the purchase price
of the Shares to be paid by the Purchaser, regardless of any extension of the
Offer or any delay in making such payment.
In all cases, payment for Shares accepted for payment pursuant to the
Offer will be made only after timely receipt by the Depositary of
(a) certificates for (or a timely Book-Entry Confirmation (as defined in the
Offer to Purchase) with respect to) such Shares and, if the
Distribution Date occurs, certificates for (or a timely Book-Entry Confirmation,
if available, with respect to) the associated Rights (unless the
Purchaser elects to make payment for such Shares pending receipt of the
certificates for, or a Book-Entry Confirmation, if available, with
respect to, such Rights as described in Section 2 of the Offer to Purchase), (b)
a Letter of Transmittal (or a manually executed facsimile thereof), properly
completed and duly executed, with any required signature guarantees (or, in the
case of a book-entry transfer, an Agent's Message (as defined in the Offer to
Purchase) in lieu of a Letter of Transmittal) and (c) any other documents
required by the Letter of Transmittal. The per Share consideration paid to any
stockholder pursuant to the Offer will be the highest per Share consideration
paid to any other stockholder pursuant to the Offer.
Except as otherwise provided in Section 3 of the Offer to Purchase,
tenders of Shares and Rights are irrevocable. Shares and Rights tendered
pursuant to the Offer may be withdrawn pursuant to the procedures set forth in
the Offer to Purchase at any time prior to the Expiration Date and, unless
theretofore accepted for payment and paid for by the Purchaser pursuant to the
Offer, may also be withdrawn at any time after January 1, 1996. Shares or Rights
may not be withdrawn unless the associated Rights or Shares, as the case may be,
are also withdrawn. A withdrawal of Shares or Rights will also constitute a
withdrawal of the associated Rights or Shares, as the case may be.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of the Offer to Purchase and
must specify the name of the person having tendered the Shares and the Rights to
be withdrawn, the number of Shares and Rights to be withdrawn and the name of
the registered holder of the Shares and the Rights to be withdrawn, if different
from the name of the person who tendered the Shares and the Rights. If
certificates for Shares or Rights have been delivered or otherwise identified to
the Depositary, then, prior to the physical release of such certificates, the
serial numbers shown on such certificates must be submitted to the Depositary
and, unless such Shares or Rights have been tendered by an Eligible Institution
(as defined in the Offer to Purchase), the signatures on the notice of
withdrawal must be guaranteed by an Eligible Institution. If Shares or Rights
have been delivered pursuant to the procedures for book-entry transfer as set
forth in Section 2 of the Offer to Purchase, any notice of withdrawal must also
specify the name and number of the account at the appropriate Book-Entry
Transfer Facility (as defined in the Offer to Purchase) to be credited with the
withdrawn Shares and otherwise comply with such Book-Entry Transfer Facility's
procedures. Withdrawals of tenders of Shares and Rights may not be rescinded,
and any Shares and Rights properly withdrawn will thereafter be deemed not
validly tendered for purposes of the Offer. However, withdrawn Shares and Rights
may be retendered by again following one of the procedures described in Section
2 of the Offer to Purchase at any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser in its sole
discretion, which determination will be final and binding. None of the
Purchaser, Praxair, the Depositary, the Information Agent, the Dealer Manager or
any other person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure to
give such notification.
Subject to the applicable rules and regulations of the Securities and
Exchange Commission, the Purchaser reserves the right, in its sole discretion,
at any time or from time to time, and regardless of whether or not any of the
events set forth in Section 14 of the Offer to Purchase shall have occurred, (a)
to extend the period of time during which the Offer is open, and thereby delay
acceptance for payment of and the payment for any Shares, by giving oral or
written notice of such extension to the Depositary and (b) to amend the Offer in
any other respect by giving oral or written notice of such amendment to the
Depositary.
The information required to be disclosed by paragraph (e)(l)(vii) of Rule
14d-6 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), is incorporated herein by reference.
Requests are being made to the Company pursuant to 14d-5 of the Exchange
Act and Section 220 of the DGCL for the use of the Company's stockholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase, the related Letter of Transmittal and
the other relevant materials will be mailed to record holders of Shares, and
will be furnished to brokers, dealers, banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the stockholder
lists, or, if applicable, who are listed as participants in a clearing agency's
security position listing, for subsequent transmittal to beneficial owners of
Shares, by the Purchaser following receipt of such lists or listings from the
Company or by the Company if the Company so elects.
The Offer to Purchase and the Letter of Transmittal contain important
information that should be read before any decision is made with respect to the
Offer.
Questions and requests for assistance, or for additional copies of the
Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery
or other Offer documents may be directed to the Information Agent or the Dealer
Manager at their respective telephone numbers and addresses listed below.
Holders of Shares may also contact brokers, dealers, commercial banks and trust
companies or other nominees for assistance concerning the Offer. Copies of the
foregoing will be furnished at the Purchaser's expense. No fees or commissions
will be payable to brokers, dealers or other persons other than the Dealer
Manager and the Information Agent for soliciting tenders of Shares pursuant to
the Offer.
The Information Agent for the Offer is:
MORROW & CO., INC.
909 Third Avenue, 20th Floor
New York, New York 10022
(212) 754-8000
Toll Free (800) 566-9061
Banks and Brokerage Firms please call:
(800) 662-5200
The Dealer Manager for the Offer is:
CS First Boston
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
Toll Free Telephone: (800) 227-4117
November 3, 1995
<PAGE>
EXHIBIT 99(a)(7)
[LETTERHEAD OF PRAXAIR]
Contacts:
--------
Thomas M. Daly, Jr. Nigel D. Muir Investor Relations
Roy Winnick Praxair, Inc. ------------------
Kekst and Company 203-837-2240 Scott S. Cunningham
212-593-2655 Praxair, Inc.
203-837-2073
PRAXAIR ANNOUNCES INTENT TO BEGIN TENDER OFFER TO ACQUIRE CBI INDUSTRIES FOR
$32.00 PER SHARE IN CASH
DANBURY, Conn., November 1, 1995 - Praxair, Inc. (NYSE: PX) today announced
that it intends to commence on Friday, November 3, 1995, a cash tender offer
for all of the outstanding common shares of CBI Industries, Inc. (NYSE: CBI) at
a price of $32.00 per share, net to the seller, in cash
The tender offer will be scheduled to expire at midnight Eastern time on
Monday, December 4, 1995, unless extended. CBI has approximately 45 million
shares outstanding on a fully diluted basis, giving the transaction a total
capital value, including equity and debt, of $2.1 billion
H. William Lichtenberger, Praxair's chairman and chief executive
officer, said, "We continue to be hopeful that the Board of Directors of CBI
will respond in a positive way to the merger proposal presented in my letter to
CBI chairman, president and chief executive officer John E. Jones on October 27.
We believe that the CBI Board will ultimately recognize the significant benefits
for both our companies and our respective shareholders of a strategic
combination of Praxair and CBI under the terms we have proposed."
Lichtenberger said, "In the absence of such a response, however, and as
I indicated in my letter of October 27, we will now proceed to present our
proposal directly to the shareholders of CBI, for whom our $32.00 per share cash
offer represents a substantial premium over the recent price of their CBI
stock."
- more -
<PAGE>
Page 2 - CBI Industries
The complete terms and conditions of the offer will be set forth in the
Offer to Purchase, a copy of which will be available when the offer commences.
CS First Boston Corporation is the Dealer Manager for the offer.
Praxair is the largest industrial gases company in North and South
America, and one of the largest worldwide, with 1994 sales of $2.7 billion. The
company produces, sells and distributes atmospheric, process and specialty
gases, and high-performance surface coatings. Praxair is a leader in the
commercialization of new technologies that bring productivity and environmental
benefits to a diverse group of industries.
<PAGE>
EXHIBIT 99(A)(8)
[LETTERHEAD OF PRAXAIR]
CONTACTS:
Thomas M. Daly, Jr. Nigel D. Muir Investor Relations
Roy Winnick Praxair, Inc. ------------------
Kekst and Company 203-837-2240 Scott S. Cunningham
212-593-2655 Praxair, Inc.
203-837-2073
PRAXAIR COMMENCES TENDER OFFER FOR CBI INDUSTRIES
DANBURY, Conn., November 3, 1995 - Praxair, Inc. (NYSE: PX) today commenced its
previously announced cash tender offer for all of the outstanding common shares
of CBI Industries, Inc. (NYSE: CBI) at a price of $32.00 per share, net to the
seller, in cash. The tender offer is scheduled to expire at midnight Eastern
time on Monday, December 4, 1995, unless extended.
The complete terms and conditions of the offer are set forth in the
Offer to Purchase, copies of which are available by contacting the information
agent, Morrow & Company, at 1-800-662-5200.
Praxair also said it will file today a Premerger Notification and Report
Form with the Federal Trade Commission and the Antitrust Division of the
Department of Justice under the Hard-Scott-Rodino Act.
CS First Boston Corporation is the Dealer Manager for the Offer.
Praxair is the largest industrial gases company in North and South
America, and one of the largest worldwide, with 1994 sales of $2.7 billion. The
company produces, sells and distributes atmospheric, process and specialty
gases, and high-performance surface coatings. Praxair is a leader in the
commercialization of new technologies that bring productivity and environmental
benefits to a diverse group of industries.
<PAGE>
EXHIBIT 99(A)(9)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER.--
Social Security numbers have nine digits separated by two hyphens: i.e. 000-00-
0000. Employer identification numbers have nine digits separated by only one
hyphen: i.e. 00-0000000. The table below will help determine the number to give
the payer.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- --------------------------------------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals (joint account) The actual owner of the account or,
if combined funds, any one of the
individuals(1)
3. Husband and wife (joint account) The actual owner of the account or,
if joint funds, either person(1)
4. Custodian account of a minor (Uniform The minor(2)
Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if the minor is the
only contributor, the minor(1)
6. Account in the name of guardian or The ward, minor, or incompetent
committee for a designated ward, minor, person(3)
or incompetent person
7. a. The usual revocable savings trust The grantor-trustee(1)
account (grantor is also trustee)
b. So-called trust account that is not The actual owner(1)
a legal or valid trust under State
law
8. Sole proprietorship account The owner(4)
<CAPTION>
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- --------------------------------------------------------------------------------
<S> <C>
9. A valid trust, estate, or pension trust The legal entity (Do not furnish
the identifying number of the
personal representative or trustee
unless the legal entity itself is
not designated in the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or educational The organization
organization account
12. Partnership account held in the name The partnership
of the business
13. Association, club, or other tax-exempt The organization
organization
14. A broker or registered nominee The broker or nominee
15. Account will the Department of Agri- The public entity
culture in the name of a public entity
(such as a State or local government,
school district, or prison) that
receives agricultural program payments
</TABLE>
- --------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Card, or Form SS-4,
Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a), or an individual
retirement plan.
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization or any agency, or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a).
. An exempt charitable remainder trust, or a nonexempt trust described in
section 4947(a)(1).
. An entity registered at all times under the Investment Company Act of 1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (include exempt-interest dividends under
section 852).
. Payments described in section 6049(b)(5) to non-resident aliens.
. Payments on tax-free covenant bonds under the section 1451.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1984, payers must generally
withhold 20% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES.
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
under-payment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
EXHIBIT 99(G)
COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
PRAXAIR, INC., )
)
Plaintiff, )
)
v. ) C.A. No. 14648
)
CBI INDUSTRIES, INC., JOHN E. )
JONES, LEWIS E. AKIN, )
WILEY N. CALDWELL, E.H. )
CLARK, JR., JOHN F. RIORDAN, )
GARY E. MACDOUGAL, JOHN T. )
HORTON, STEPHANIE PACE )
MARSHALL, ROBERT T. STEWART, )
EDWARD J. MOONEY, ROBERT J. )
DAY, and ROBERT G. WALLACE, )
)
Defendants. )
COMPLAINT
---------
Plaintiff, Praxair, Inc. ("Praxair") by its attorneys, as and for its
complaint herein, alleges upon knowledge with respect to itself and its own
acts, and upon information and belief as to all other matters, as follows:
NATURE OF THE ACTION
--------------------
1. Plaintiff brings this action for injunctive and/or declaratory relief
to prevent defendant CBI Industries, Inc. ("CBI") and its Board of Directors
from deploying CBI's poison pill in violation of fiduciary duties owed to CBI's
stockholders.
2. CBI has experienced an extended period of poor performance and
disappointing earnings. This poor performance has been reflected in a decline
in its stock price from $30 in September 1994 (the last time the stock even
traded as high as $30
- 1 -
<PAGE>
per share) to its current level of $20 1/8. Despite this steep and consistent
decline -- and perhaps because of it -- CBI's board has chosen to insulate
itself against any takeover attempts by adopting an array of takeover defense
measures, including a poison pill with an unjustifiably low 10% threshold.
3. Fortunately for CBI's stockholders, a means of escape has emerged. On
October 29, 1995, Praxair announced that it had proposed to the Board of
Directors of CBI a merger in which stockholders of CBI would receive
consideration of $32.00 per common share of CBI, either in Praxair stock or in
cash, and that if the Board of Directors of CBI was unwilling to agree to a
merger with Praxair that Praxair reserved the right to make a cash offer to the
CBI stockholders directly.
4. Praxair's proposal represents a substantial premium over the market
price for CBI shares prior to Praxair's announcement. The proposal does not
pose any threat to the interests of CBI's stockholders or to CBI's corporate
policy and effectiveness. The poison pill, by contrast, is unreasonable because
it shelters incumbent management from the consequences of its poor performance
by deterring acquisition proposals.
5. Prior to making the proposal to CBI's Board, Praxair's Chief Executive
Officer had engaged in discussions for many months with his counterpart at CBI.
In those discussions, Praxair's CEO made clear, as he did in an October 27, 1995
letter to CBI's Board of Directors, that Praxair was prepared to pay full value
to stockholders of CBI in an acquisition of the Company. In
- 2 -
<PAGE>
response, CBI's CEO told Praxair's CEO that he was terminating discussions.
6. Thus, instead of pursuing a possible transaction that could deliver
enhanced value to stockholders, CBI has instead chosen to take refuge behind its
poison pill, which effectively prevents Praxair or anyone else from acquiring
CBI.
7. The CBI Board of Directors should not be allowed to entrench themselves
to deprive the CBI stockholders of the opportunity to obtain fair value for
their shares. The poison pill serves no valid corporate purpose in the current
circumstances and should be enjoined.
THE PARTIES
-----------
8. Plaintiff Praxair is a Delaware corporation with its principal place of
business in Danbury, Connecticut. Praxair is the largest supplier of industrial
gases in the United States, with 1994 sales of $2.7 billion. Praxair is
beneficial owner of approximately 74,000 shares of CBI common stock.
9. Defendant CBI is a Delaware corporation with its principal place of
business in Oak Brook, Illinois. CBI's principal lines of business are
industrial gases and construction.
10. Defendant John E. Jones is Chairman and Chief Executive Officer and a
director of CBI. The remaining individual defendants are all directors of CBI.
BACKGROUND
----------
11. CBI's earnings have consistently failed to meet consensus projections
by market analysts -- a problem that has
- 3 -
<PAGE>
resulted in the continued slide in its share price and underperformance relative
to leading market indicators. CBI's stock price has declined 21.5% since
January 1, 1995 while the S&P Specialty Chemical Index has risen 20.7%. CBI's
market performance fares even worse when compared with the S&P 500 Index, which
has increased 26.2% so far this year. Management performance and prospects for
improvement have been so poor that several prominent market analysts have
recently downgraded their recommendations for CBI stock, leading one analyst,
after meeting with CBI management, to characterize "the [CBI] story" as
"underwhelming."
12. Since the spring of 1995, H. William Lichtenberger, Chairman and Chief
Executive Officer of Praxair, has had several discussions with CBI's Chairman
and CEO, Mr. Jones, concerning a possible transaction to effect a merger of
Praxair and CBI and the significant benefits that such a transaction would have
for CBI.
13. On October 20, Mr. Jones told Mr. Lichtenberger that Mr. Jones had
decided not to continue such discussions.
14. On October 27, Mr. Lichtenberger sent a letter to Mr. Jones, stating
in pertinent part (a copy of the full letter is annexed hereto as Exhibit A):
As you know, over the past six months you and I have
had several discussions regarding a possible transaction
to effect a merger of our respective companies. Based on
our conversations, I think we both realize that
significant benefits could be realized by both our
companies from such a transaction. Therefore, I was
greatly disappointed when you told me on October 20 that
you had decided not to continue our discussions.
As I told you during that telephone conversation, in
recent weeks we at Praxair have continued to carefully
study the dynamics
- 4 -
<PAGE>
and potential advantages of a business combination of
Praxair and CBI. As a result, we now feel even more
strongly that such a business combination of our
companies would result in significant strategic benefits
for both our companies and our respective shareholders.
In light of your current position which you communicated
to me on October 20, and given what we continue to view
as the compelling rationale for a business combination,
we have decided that the best way to proceed is for
Praxair to submit a specific proposal to your Board of
Directors for its formal consideration.
Accordingly, on behalf of the Board of Directors of
Praxair, I am pleased to propose herewith the merger of
Praxair and CBI pursuant to which your shareholders would
receive $32.00 for each share of CBI common stock, which
we would propose to pay in either cash or Praxair common
stock. Our proposal to effect a merger of Praxair and CBI
is subject to the negotiation of a mutually satisfactory
definitive merger agreement containing customary terms
and closing conditions.
* * *
While we would very much prefer that a business
combination of our companies be effected pursuant to the
negotiation of a merger on the terms we have proposed,
you and your Board should appreciate that if your Board
rejects our proposal to negotiate a merger, we reserve
the right to propose directly to the shareholders of CBI
a cash offer for CBI by Praxair.
15. The consideration offered in the Merger Proposal should be
attractive to CBI stockholders because it offers CBI stockholders a significant
premium over the current market price of CBI stock. On October 27, 1995, the
last New York Stock Exchange trading day before announcement of Praxair's merger
proposal, the closing price of CBI shares was $20.125 per share. Thus, the
merger consideration represents a premium of $11.875 per share (or 59%) over the
market price of the shares immediately prior to
- 5 -
<PAGE>
Praxair's announcement, or $9.625 per share (or 43%) over the average of the
market price of the shares ($22.375 per share) for the thirty days immediately
prior to such announcement.
16. The Merger Proposal poses no threat to the interests of CBI's
stockholders or to CBI's corporate policy and effectiveness. On the contrary,
if accepted the Merger Proposal would achieve value for CBI stockholders and
achieve more valuable uses for CBI's businesses.
17. An acquisition of CBI by Praxair or anyone else cannot be
completed successfully because of CBI's poison pill.
THE POISON PILL
---------------
18. On March 4, 1986, the Board of Directors of CBI entered into a
Rights Agreement (the "poison pill"), pursuant to which Rights were issued to
holders of Common Stock. The Rights are not exercisable and trade with the
Common Stock until occurrence of a Distribution Date.
19. Under the poison pill as originally adopted, "flip-in" rights
were triggered when any person acquired 20% or more of CBI's common stock. The
effect of triggering the "flip-in" rights is a substantial dilution of the
interest of the 20% holder. The 20% trigger was reduced to 10% by an amendment
to the poison pill effective as of December 20, 1994. This amendment was
adopted in response to efforts by Airgas Inc. to purchase CBI's industrial gas
unit and was apparently intended to further entrench management. The measure
achieved the desired result: Airgas dropped its bid four weeks after the poison
pill was amended.
- 6 -
<PAGE>
20. The poison pill makes prohibitively expensive any acquisition of
more than 10% of CBI's Common Stock because, if a person makes such an
acquisition, shareholders other than the 10% holder will have a right to acquire
additional shares of Common Stock on terms that will result in a substantial
dilution of the value of the shares of the 10% holder.
21. The poison pill effectively allows the Board to unilaterally
block any attempt to acquire more than 10% of CBI, even such attempts that
provide substantial benefits to CBI's stockholders. Given the current
circumstances of the Company and the attractive proposal made by Praxair, CBI
Board's fiduciary duties require them to redeem the Rights to permit Praxair or
anyone else to provide value to CBI's stockholders.
IRREPARABLE INJURY
------------------
22. Plaintiffs do not have an adequate remedy at law. Only through
the exercise of the Court's equitable powers will plaintiffs and CBI's other
stockholders be protected from immediate and irreparable injury. Unless the
Court enjoins the use of CBI's poison pill, CBI's stockholders will be deprived
of the opportunity to achieve the values that such proposals can deliver for
their shares. Moreover, Praxair will be denied any meaningful access to or
control over CBI and will be hindered in or prevented from exercising its
fundamental stockholder rights under Delaware law. Should that occur, Praxair
will have lost the unique opportunity to acquire CBI, and CBI's other
stockholders will have lost the opportunity to sell their shares for a
substantial premium.
- 7 -
<PAGE>
AS AND FOR A FIRST CAUSE OF ACTION
(Injunctive Relief)
-----------------------------------
23. Plaintiffs repeat and reallege each and every allegation
contained in paragraphs 1 through 22 above, as if fully set forth herein.
24. CBI's Board of Directors' use of the poison pill in the current
circumstances is a violation of their fiduciary duties because it (i) deters
acquisition proposals, including but not limited to the attractive proposal made
by Praxair, (ii) shelters a poor-performing management from a change in control,
and (iii) deprives CBI stockholders of the opportunity to achieve value for
their shares. This ongoing violation of their fiduciary duties, and the
resulting irreparable injury to stockholders of CBI, will continue unless
enjoined.
25. Plaintiffs do not have an adequate remedy at law.
AS AND FOR A SECOND CAUSE OF ACTION
(Declaratory Judgment)
-----------------------------------
26. Plaintiffs repeat and reallege each and every allegation
contained in paragraphs 1 through 25 above, as if fully set forth herein.
27. An actual dispute exists as to whether the CBI Board of Directors
is acting in accordance with its fiduciary duties by continuing to employ the
poison pill to deter attempts to acquire CBI notwithstanding the poor
performance by CBI's management and the attractive proposal by Praxair. A
declaratory judgment should be entered determining that the fiduciary
obligations of CBI's Board of Directors requires the Board to redeem the Rights
associated with the poison pill or to amend the poison pill so as
- 8 -
<PAGE>
to make the Rights inapplicable to any advantageous acquisition proposal which
equals or exceeds the Praxair proposal.
28. Plaintiffs do not have an adequate remedy at law.
WHEREFORE, plaintiffs respectfully request that this Court enter an
order and judgment:
(a) compelling CBI's Board of Directors to redeem the Rights
associated with the poison pill or to amend the poison pill so as to make
the Rights inapplicable to any advantageous acquisition proposal which
equals or exceeds the Praxair proposal, and preliminarily and permanently
enjoining CBI, its directors, officers, successors, agents, servants,
subsidiaries, employees and attorneys, and all persons acting in concert or
participating with them, from taking any action to interfere with the
Praxair or any other advantageous acquisition proposal;
(b) declaring that CBI's Board of Directors are in breach of
their fiduciary duty to stockholders of CBI by continuing to deploy the
poison pill; and
(c) granting such other relief as the Court may deem just and
proper.
- 9 -
<PAGE>
MORRIS, NICHOLS, ARSHT & TUNNELL
__________________________________
Martin P. Tully
Elaine C. Reilly
1201 N. Market Street
P.O. Box 1347
Wilmington, DE 19899
(302) 658-9200
Attorneys for Plaintiff
OF COUNSEL:
John L. Hardiman
William L. Farris
SULLIVAN & CROMWELL
125 Broad Street
New York, New York 10004
(212) 558-4000
October 30, 1995
- 10 -
<PAGE>
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
PRAXAIR, INC. )
)
Plaintiffs, )
)
v. ) Civil Action No. 14648
)
CBI INDUSTRIES, INC., JOHN E. )
JONES, LEWIS E. AKIN, )
WILEY N. CALDWELL, E.H. )
CLARK, JR., JOHN F. RIORDAN, )
GARY E. MACDOUGAL, JOHN T. )
HORTON, STEPHANIE PACE )
MARSHALL, ROBERT T. STEWART, )
EDWARD J. MOONEY, ROBERT J. )
DAY, and ROBERT G. WALLACE, )
)
Defendants. )
PLAINTIFFS' FIRST REQUEST
FOR PRODUCTION OF DOCUMENTS
---------------------------
Plaintiff requests pursuant to Rule 34 of the Rules of the Court of
Chancery that defendants produce the following documents for inspection and
copying at the offices of Sullivan & Cromwell, 125 Broad Street, New York, New
York.
DEFINITIONS
-----------
(i) "Praxair" shall mean Praxair, Inc., a Delaware corporation.
(ii) "CBI" shall mean CBI Industries, Inc., a Delaware corporation.
(iii) "Rights Plans" shall mean the March 4, 1986 Rights Agreement entered
into by the Board of Directors of CBI pursuant to which Rights were issued to
holders of common stock.
- 1 -
<PAGE>
(iv) "Document" shall mean and include all written or graphic matter or
other means of preserving thought or expression, however produced or reproduced,
encompassed by Court of Chancery Rule 34.
(v) The terms "reflecting," "referring to," or "relating to" shall mean
directly or indirectly mentioning, discussing or describing, pertaining to or
being connected with, a stated subject matter.
(vi) In construing this request: (a) the singular shall include the plural
and the plural shall include the singular; (b) the masculine, feminine or neuter
pronoun shall not exclude the other genders; (c) the conjunctions "and" and "or"
shall be read either disjunctively or conjunctively so as to bring within the
scope of this request all information that might otherwise be construed to be
outside its scope; and (d) the word "any" shall be read to mean each and every.
INSTRUCTIONS
------------
A. Each document is to be produced, with all nonidentical copies and
drafts thereof, in its entirety, without abbreviation or redaction.
B. The documents requested herein are those dated or prepared on or
after January 1, 1994, unless otherwise specified.
C. In the event that any document called for by this Request is not
produced under claim of privilege or other immunity from discovery, such
document shall be identified by stating (i) its author; (ii) each addressee;
(iii) each person who has seen or received a copy of the document or with whom
the document was
- 2 -
<PAGE>
discussed; (iv) the document's date, subject matter, number of pages,
attachments and appendices; (v) present custodian of the document; and (vi) the
nature of the privilege or immunity asserted. If the document is not produced
under claim of attorney-client privilege, then the name of the attorneys, the
name of the clients, and the basis of the alleged privilege shall also be
identified.
D. This request shall be deemed continuing so as to require further and
supplemental production as the defendants receive or generate additional
documents between the time of original production and the time of decision in
this matter.
Documents Requested
-------------------
1. All documents reflecting, referring to, relating to or concerning all
communications between H. William Lichtenberger and John E. Jones concerning any
possible merger, asset acquisition or other business combination involving
Praxair and CBI.
2. All documents reflecting, referring to, relating to or concerning any
consideration by the CBI Board of Directors, by any officer or director of CBI,
by any employee of CBI, or by any financial or legal advisor to CBI, of any
merger, asset acquisition or other business combination involving Praxair and
CBI.
3. All documents dated or prepared on or after January 1, 1986
reflecting, referring to, relating to or concerning the Rights Plan or any
consideration by the CBI Board of Directors as to any possible amendment or
restatement of the Rights Plan, whether or not such amendment or restatement
became effective.
- 3 -
<PAGE>
4. All documents concerning adoption of article TENTH of CBI's Restateed
Certificate of Incorporation.
5. All documents concerning adoption of article FIFTEENTH of CBI's
Restated Certificate of Incorporation.
MORRIS, NICHOLS, ARSHT & TUNNELL
/s/ Elaine C. Reilly
----------------------------------
Martin P. Tully
Elaine C. Reilly
1201 North Market Street
P.O. Box 1347
Wilmington, DE 19899
(302) 658-9200
Attorneys for Plaintiff
Praxair, Inc.
OF COUNSEL:
John L. Hardiman
William L. Farris
SULLIVAN & CROMWELL
125 Broad Street
New York, New York 10004
(212) 558-4000
October 30, 1995
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[LETTERHEAD OF PRAXAIR, INC.]
October 27, 1995
Mr. John E. Jones
Chairman, President and Chief
Executive Officer
CBI Industries, Inc.
800 Jorie Boulevard
Oak Brook, IL 60522-7001
Dear John:
As you know, over the past six months you and I have had several
discussions regarding a possible transaction to effect a merger of our
respective companies. Based on our conversations, I think we both realize that
significant benefits could be realized by both our companies from such a
transaction. Therefore, I was greatly disappointed when you told me on October
20 that you had decided not to continue our discussions.
As I told you during that telephone conversation, in recent weeks we at
Praxair have continued to carefully study the dynamics and potential advantages
of a business combination of Praxair and CBI. As a result, we now feel even
more strongly that such a business combination would result in significant
strategic benefits for both our companies and our respective shareholders. In
light of your current position which you communicated to me on October 20, and
given what we continue to view as the compelling rationale for a business
combination, we have decided that the best way to proceed is for Praxair to
submit a specific proposal to your Board of Directors for its formal
consideration.
Accordingly, on behalf of the Board of Directors of Praxair, I am
pleased to propose herewith the merger of Praxair and CBI pursuant to which your
shareholders would receive $32.00 for each share of CBI common stock, which we
would propose to pay in either cash or Praxair common stock. Our proposal to
effect a merger of Praxair and CBI is subject to the negotiation of a mutually
satisfactory definitive merger agreement containing customary terms and closing
conditions.
I hope that you will recognize the powerful business logic behind our
proposal and that you will promptly submit it to your Board of Directors for its
consideration with a favorable recommendation from you. It is our hope that,
after appropriate consideration by your Board of Directors, your Board will
authorize proceeding with the negotiation of the definitive merger agreement on
the terms we have proposed.
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Mr. John E. Jones
CBI Industries, Inc.
Page two
The price per share in our merger proposal is based on our present
knowledge of CBI, which is limited to public information. It is our view that
the price we are proposing would be both fair and highly attractive to your
shareholders. Our proposal offers your shareholders a significant premium over
the current market value of CBI.
The transaction we propose represents a clearly attractive opportunity
for Praxair to combine the leading industrial gases supplier in North and South
America and the premier world supplier of carbon dioxide. The combined
enterprise will be strongly positioned to maximize our marketing, engineering
and technological skills as it expands its operations further into major global
markets. It will also be able to develop significant new applications for a
wide range of products and advanced technologies to enable our customers to
improve their productivity, product quality and environmental performance.
Together, Praxair's and CBI's business portfolios and synergies will provide the
enterprise with considerable opportunities to support strong future sales and
earning growth.
We are prepared to move promptly in connection with our proposal. We
would be happy to meet with you and other members of your Board of Directors and
senior management as soon as practicable to discuss our proposal in detail and
to answer any questions you or they may have. We realize that your Board of
Directors will want to carefully consider our proposal, but we do ask that the
Board respond to us as soon as possible, and in any event by noon, on November
1, 1995.
While we would very much prefer that a business combination of our
companies be effected pursuant to the negotiation of a merger on the terms we
have proposed, you and your Board should appreciate that if your Board rejects
our proposal to negotiate a merger, we reserve the right to propose directly to
the shareholders of CBI a cash offer for CBI by Praxair.
We look forward to hearing the response of your Board of Directors after
it has reviewed our merger proposal.
Sincerely,
/s/ H. W. Lichtenberger
H. W. Lichtenberger
