<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 17, 1994
REGISTRATION NO. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
POPE & TALBOT, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 94-0777139
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
</TABLE>
1500 S.W. FIRST AVENUE
PORTLAND, OREGON 97201
(503) 228-9161
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)
------------------------
CARLOS M. LAMADRID
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
POPE & TALBOT, INC.
1500 S.W. FIRST AVENUE
PORTLAND, OREGON 97201
(503) 228-9161
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
------------------------
Copies to:
<TABLE>
<S> <C>
GEORGE D. TUTTLE, ESQ. DANIEL J. WINNIKE, ESQ.
STEVEN J. TONSFELDT, ESQ. HOWARD, RICE, NEMEROVSKI,
BROBECK, PHLEGER & HARRISON CANADY, ROBERTSON, FALK & RABKIN
ONE MARKET PLAZA A PROFESSIONAL CORPORATION
SPEAR STREET TOWER THREE EMBARCADERO CENTER
SAN FRANCISCO, CALIFORNIA 94105 SAN FRANCISCO, CALIFORNIA 94111-4065
(415) 442-0900 (415) 434-1600
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
------------------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER SECURITY(2) PRICE(2) REGISTRATION FEE
- --------------------------------------------------------------------------------------------------
Common Stock, par value
$1.00 per share................ 1,538,551 Shares $26.42 $40,648,518 $14,017
- --------------------------------------------------------------------------------------------------
</TABLE>
(1) Maximum number of shares issuable upon conversion of a maximum of
$39,910,000 outstanding aggregate principal amount of the Company's 6%
Convertible Subordinated Debentures Due March 1, 2012.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 of the Securities Act of 1933.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
PROSPECTUS
1,538,551 SHARES
POPE & TALBOT, INC.
COMMON STOCK
This Prospectus covers the issuance of a maximum of 1,538,551 shares of
Common Stock, $1.00 par value ("Common Stock"), of Pope & Talbot, Inc. (the
"Company") upon conversion of its outstanding 6% Convertible Subordinated
Debentures Due March 1, 2012 (the "Debentures") or to Bear, Stearns & Co. Inc.
(the "Purchaser") under the standby arrangements described below and the resale
of any shares of Common Stock purchased by the Purchaser pursuant to such
standby arrangements or acquired by the Purchaser upon conversion of Debentures
as described below.
On February 17, 1994, the Company called for the redemption on March 4,
1994 (the "Redemption Date") of the $39,910,000 outstanding aggregate principal
amount of its Debentures at a redemption price of 101.8% of the principal amount
plus accrued interest of $.50 from March 1, 1994 to the Redemption Date for each
$1,000 principal amount of Debentures, making a total of $1,018.50 payable for
each such $1,000 principal amount (the "Redemption Payment"). The right to
convert the Debentures into shares of Common Stock expires at 5:00 p.m. New York
time, on February 25, 1994 (the "Conversion Expiration Date"). Thereafter, no
further conversion of Debentures may be made, and any Debentures not duly
surrendered for conversion prior to the close of business on the Conversion
Expiration Date or for redemption prior to the close of business on the
Redemption Date shall become due and cease to accrue interest.
The Company has made arrangements with the Purchaser pursuant to which the
Purchaser has agreed, subject to certain conditions, to purchase from the
Company the shares of Common Stock that otherwise would have been delivered upon
conversion of Debentures that are either (i) duly surrendered for redemption on
or prior to the Redemption Date or (ii) not duly surrendered for conversion on
or prior to the Conversion Expiration Date or for redemption on or prior to the
Redemption Date. Such shares will be purchased by the Purchaser for an aggregate
purchase price equal to the aggregate Redemption Payment for those Debentures.
The proceeds will be used by the Company to redeem Debentures. The Purchaser
also may purchase Debentures in the open market or otherwise prior to the
Conversion Expiration Date and has agreed to surrender for conversion Debentures
so purchased by it and any additional Debentures beneficially owned by it.
Prior to and after the Redemption Date, the Purchaser may offer Common
Stock, including shares acquired through the purchase and conversion of
Debentures, directly to the public at prices set from time to time by the
Purchaser and to dealers at such prices less a selling concession to be
determined by the Purchaser. Prior to the Conversion Expiration Date, each such
price when set will not exceed the greater of the last sale or current asked
price of the Common Stock on the New York Stock Exchange (the "NYSE") plus a
dealer's concession, and the offering price will not be increased more than once
in any calendar day. Sales of Common Stock by the Purchasers may be made on the
NYSE in block trades or in privately negotiated transactions. In effecting such
transactions, the Purchaser may realize profits or losses independent of its
compensation described under "Standby Arrangements." If the Purchaser purchases
less than 123,000 shares from the Company on the Redemption Date, it will remit
to the Company 50% of any net profits realized by it from sales of such shares.
Offers of shares by the Purchaser will be subject to prior sale, to receipt and
acceptance of shares by it, and to approval of certain legal matters by counsel.
The Company has agreed to indemnify the Purchaser against, and to provide
contribution with respect to certain liabilities, including liabilities under
the Securities Act of 1933. See "Standby Arrangements."
The Common Stock is listed on the NYSE and the Pacific Stock Exchange, and
the Debentures are listed on the NYSE. On February 16, 1994, the last reported
sale price of the Common Stock on the NYSE Composite Tape was $32 3/8 per share.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
BEAR, STEARNS & CO. INC.
------------------------
The date of this Prospectus is February 17, 1994.
<PAGE> 3
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
AND/OR THE DEBENTURES AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK OR PACIFIC STOCK
EXCHANGES OR OTHERWISE. SUCH STABILIZATION, IF COMMENCED, MAY BE DISCONTINUED AT
ANY TIME.
AVAILABLE INFORMATION
Pope & Talbot, Inc., including its subsidiaries ("Pope & Talbot" or the
"Company"), is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements, information statements and other
information with the Securities and Exchange Commission (the "Commission").
Reports, proxy statements and other information filed by the Company may be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's Regional Offices located at Seven World Trade Center, 13th Floor,
New York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such material can be obtained by mail from the
Public Reference Branch of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates. In addition, such material can be inspected at
the offices of the New York and Pacific Stock Exchanges on which certain of the
Company's securities are listed.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits thereto, referred to as
the "Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is hereby made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company pursuant
to the Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the year ended December 31,
1992;
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1993, June 30, 1993, and September 30, 1993;
3. The Company's Current Report on Form 8-K filed on February 17, 1994; and
4. All other documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Common
Stock offered hereby shall be deemed to be incorporated by reference
into this Prospectus and to be a part hereof from the date of filing of
such documents.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the request of any such person, a copy of any
or all of the documents which are incorporated herein by reference (other than
exhibits to such information, unless such exhibits are specifically incorporated
by reference into the information this Prospectus incorporates). Requests should
be directed to Pope & Talbot, Inc., 1500 S.W. First Avenue, Portland, Oregon
97201, Attention: Investor Relations Department, telephone (503) 228-9161.
2
<PAGE> 4
THE COMPANY
Pope & Talbot is engaged principally in the wood products and pulp and
paper businesses. The Company's wood products business involves the manufacture
and sale of standardized and specialty lumber and the sale of wood chips. In its
pulp and paper business, the Company manufactures and sells a full line of
private label consumer tissue and disposable diaper products, and bleached kraft
pulp for newsprint and writing paper. During 1993, wood products accounted for
approximately 48% of the Company's revenues, consumer tissue accounted for 17%,
diapers 27% and bleached kraft pulp 8%.
The Company, a Delaware corporation, was originally incorporated as a
California corporation in 1940. It is the successor to a partnership formed in
San Francisco, California in 1849 that acquired its first timberlands and opened
a lumber mill in the Seattle, Washington area in 1853.
Since the mid-1980s, the Company has reduced its dependency on timber from
the Pacific Northwest. The Company currently operates six sawmills with an
estimated annual capacity of 785 million board feet, of which approximately 80%
is located in British Columbia and the Black Hills region of South Dakota and
Wyoming, including the Company's 225 board feet capacity sawmill in Castlegar,
British Columbia which was acquired by the Company in 1992. The remaining 20% of
the Company's capacity comes from the Company's sawmill in Port Gamble,
Washington where environmental concerns have had a negative impact on the
availability of timber.
In order to expand and broaden its sources of revenue, the Company acquired
its pulp, consumer tissue and disposable diaper businesses in the late 1970s and
the 1980s. The Halsey, Oregon pulp mill produces bleached kraft pulp which is
sold in the open market and to newsprint and writing paper manufacturers in the
Pacific Northwest. The Company's private label tissue business manufactures
towels, napkins, bathroom tissue and facial tissue from recycled paper at two
mills in the U.S. Disposable diapers are produced by the Company at four mills
in the U.S. The Company sells its tissue and diaper products under private
labels to grocery chains, variety-discount chains and grocery wholesalers.
Market prices in the Company's tissue and market pulp businesses have been weak
in recent years and the Company expects this weak pricing to continue for the
foreseeable future.
The businesses in which the Company is engaged are extremely competitive,
and a number of the Company's competitors are substantially larger than the
Company with correspondingly greater resources. In particular, competition in
the tissue products and disposable diaper markets is extremely strong, both in
terms of price and product innovation.
The Company's principal executive offices are located at 1500 S.W. First
Avenue, Portland, Oregon 97201, and its telephone number is (503) 228-9161.
3
<PAGE> 5
1993 RESULTS OF OPERATIONS
Pope & Talbot reported a significant improvement in earnings in 1993 as
compared with 1992 due to the strong performance of the Company's wood products
and diaper businesses. Revenues in 1993 were $628.9 million compared with $544.3
million in the prior year, an increase of 15.5%. Operating profit was $36.4
million as compared to an operating loss of $2.5 million in the prior year, and
net income was $21.0 million as compared to a net loss in 1992 of $2.3 million.
The increase in revenues and profits was due in large part to the following
factors: improved demand in housing construction and additional timber
harvesting restrictions in the Pacific Northwest, both of which helped to
increase lumber prices available to the Company by an average of approximately
34% during 1993; the full-year effect of the increase in the Company's lumber
capacity from the 1992 acquisition of the sawmill in Castlegar, British
Columbia; and operation of the Company's diaper plants at full capacity during
the year due to strong demand. Revenue growth and profitability were, however,
adversely impacted by continued weak pricing in the tissue and market pulp
businesses, which continued to produce losses in 1993. Certain financial
information regarding the Company's results of operations for 1993 and financial
condition as of December 31, 1993 is set forth herein and in the Company's
Current Report on Form 8-K filed on February 17, 1994, which is incorporated
herein by reference. See "Selected Consolidated Financial Data."
The Company's operating results have depended in the past, and will
continue to depend, in part, on general economic conditions and markets for its
products. No assurance can be given as to whether, or to what extent, the
Company will incur losses in the future.
4
<PAGE> 6
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
December 31, 1993 and as adjusted to give effect to the conversion of all of the
Debentures into Common Stock. To the extent that any Debentures are redeemed for
cash, the Company would recognize a loss on the extinguishment of the Debentures
equal to the premium paid plus a pro rata portion of the unamortized debt
issuance costs. In addition, paid-in capital will be adjusted for the fees paid
to the Purchaser under the Standby Agreement and other expenses related to the
transaction net of the Company's share of any profits realized on sales of
shares of Common Stock purchased from the Company pursuant to the terms of the
Standby Agreement.
<TABLE>
<CAPTION>
DECEMBER 31, 1993
---------------------------
ACTUAL AS ADJUSTED(1)
-------- --------------
(IN THOUSANDS)
<S> <C> <C>
Long-term debt less current portion:
6% convertible subordinated debentures due 2012.................. $ 40,000 --
Industrial revenue bond.......................................... 4,000 $ 4,000
8 3/8% debentures due 2013....................................... 75,000 75,000
SELP note payable................................................ 15,599 15,599
-------- --------------
Total long-term debt less current portion................ 134,599 94,599
-------- --------------
Stockholders' equity:
Preferred Stock, $10 par value, 1,500,000 shares authorized, none
issued........................................................ -- --
Common Stock, $1 par value, 20,000,000 shares authorized,
12,429,352 issued, 13,971,372 as adjusted to reflect
conversion of Debentures(2)................................... 12,429 13,971
Additional paid-in capital....................................... 3,370 40,474
Retained earnings................................................ 185,762 185,762
Cumulative translation adjustments............................... (4,578) (4,578)
Common Stock, held in treasury, at cost (713,554 shares)......... (12,662) (12,662)
-------- --------------
Total stockholders' equity............................... 184,321 222,967
-------- --------------
Total capitalization................................ $318,920 $317,566
-------- --------------
-------- --------------
</TABLE>
- ---------------
(1) Adjusted to reflect the conversion of the Debentures, the estimated fees
paid to the Purchaser under the Standby Agreement, the unamortized debt
issuance costs related to the Debentures, and other expenses related to the
transaction.
(2) Excludes shares reserved for issuance under stock options granted under the
Company's stock option plans.
5
<PAGE> 7
SELECTED CONSOLIDATED FINANCIAL DATA
The following information has been derived from the Company's consolidated
financial statements, which statements have been audited by Arthur Andersen &
Co., independent public accountants, as indicated in their reports incorporated
by reference herein. Said reports include an explanatory paragraph regarding
accounting changes. This financial data should be read in conjunction with the
notes to the consolidated financial statements and other information contained
in the documents incorporated herein by reference.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------------
1993 1992 1991 1990 1989
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
INCOME DATA:
Revenues.................................. $628,926 $544,345 $502,275 $562,493 $613,898
Cost of sales............................. 554,172 509,821 475,780 501,845 520,225
Selling, general and administrative....... 29,634 29,783 27,707 26,587 25,850
Interest expense.......................... 8,714 5,622 3,941 3,925 4,188
Other gains (losses), net................. -- (1,589) (1,940) 867 5,555
-------- -------- -------- -------- --------
Income (loss) before income taxes and
cumulative effect of accounting
changes................................ 36,406 (2,470) (7,093) 31,003 69,190
Income tax provision (benefit)............ 14,831 (218) (1,998) 11,174 25,553
-------- -------- -------- -------- --------
Income (loss) before cumulative effect of
accounting changes..................... 21,575 (2,252) (5,095) 19,829 43,637
Cumulative effect of accounting
changes(1)............................. (562) -- (6,467) -- --
-------- -------- -------- -------- --------
Net income (loss)................. $ 21,013 $ (2,252) $(11,562) $ 19,829 $ 43,637
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
COMMON SHARE DATA:
Primary net income (loss) per common
share:
Income (loss) before cumulative effect
of accounting changes................ $ 1.85 $ (.19) $ (.44) $ 1.70 $ 3.70
Cumulative effect of accounting
changes.............................. (.05) -- (.56) -- --
-------- -------- -------- -------- --------
Primary earnings (loss) per share......... $ 1.80 $ (.19) $ (1.00) $ 1.70 $ 3.70
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Fully diluted net income (loss) per common
share:
Income (loss) before cumulative effect
of accounting changes................ $ 1.71 $ (.19) $ (.44) $ 1.61 $ 3.35
Cumulative effect of accounting
changes.............................. (.04) -- (.56) -- --
-------- -------- -------- -------- --------
Fully diluted earnings (loss) per share... $ 1.67 $ (.19) $ (1.00) $ 1.61 $ 3.35
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Weighted average primary shares
outstanding............................ 11,685 11,609 11,588 11,687 11,801
Weighted average fully diluted shares
outstanding............................ 13,492 13,165 13,137 13,259 13,474
Cash dividends............................ $ .76 $ .76 $ .76 $ .72 $ .60
</TABLE>
6
<PAGE> 8
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
----------------------------------------------------
1993 1992 1991 1990 1989
-------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Current assets............................ $169,897 $138,288 $122,393 $131,612 $129,803
Properties, net........................... 269,200 222,500 213,964 209,673 212,015
Other assets.............................. 16,724 8,893 10,626 12,655 13,657
-------- -------- -------- -------- --------
Total assets...................... $455,821 $369,681 $346,983 $353,940 $355,475
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Current liabilities....................... $101,162 $ 79,668 $ 64,545 $ 49,389 $ 65,803
Long-term obligations..................... 27,803 24,227 16,934 4,401 2,672
Long-term debt............................ 134,599 89,500 69,000 77,490 67,560
Deferred income taxes..................... 7,936 3,892 9,896 16,132 20,146
Stockholders' equity...................... 184,321 172,394 186,608 206,528 199,294
-------- -------- -------- -------- --------
Total liabilities and
stockholders' equity............ $455,821 $369,681 $346,983 $353,940 $355,475
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Book value per share(2)................... $ 15.73 $ 14.85 $ 16.09 $ 17.83 $ 16.91
</TABLE>
- ---------------
(1) For the year ended December 31, 1993, cumulative effect of accounting
changes consists of a charge of $2,326 for a change in the method of
accounting for income taxes as required by Statement of Financial Accounting
Standards No. 109 and a benefit of $1,764 (after related income tax
provision of $1,168) for a change in the method of accounting for supplies
inventories. For the year ended December 31, 1991, cumulative effect of
accounting changes consists of a charge of $6,467 (after related income tax
benefit of $3,474) for adoption of Statement of Financial Accounting
Standards No. 106, "Employers' Accounting for Postretirement Benefits other
than Pensions."
(2) Excludes shares reserved for issuance under stock options granted under the
Company's stock option plans.
7
<PAGE> 9
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Company's Common Stock is listed on the New York and Pacific Stock
Exchanges and is quoted under the symbol "POP." The following table sets forth
for the periods indicated the high and low sales prices per share as reported on
the New York Stock Exchange Composite Tape and cash dividends paid per share.
<TABLE>
<CAPTION>
STOCK PRICE
------------- DIVIDENDS
HIGH LOW PAID
---- ---- ---------
<S> <C> <C> <C>
1992:
First Quarter........................................... $19 3/4 $15 1/4 $ .19
Second Quarter.......................................... 19 3/4 14 5/8 .19
Third Quarter........................................... 15 7/8 13 5/8 .19
Fourth Quarter.......................................... 16 7/8 13 3/8 .19
1993:
First Quarter........................................... $28 1/8 $16 $ .19
Second Quarter.......................................... 26 7/8 21 1/2 .19
Third Quarter........................................... 25 1/2 20 .19
Fourth Quarter.......................................... 29 7/8 20 7/8 .19
1994:
First Quarter (through February 16, 1994)............... $32 5/8 $28 1/8 $ .19
</TABLE>
On February 16, 1994, the last sale price of the Common Stock on the New
York Stock Exchange Composite Tape was $32 3/8.
The Company's Board of Directors intends to continue its present policy of
paying quarterly dividends. However, the amount and timing of future dividends
will necessarily depend upon the earnings and financial requirements of the
Company, restrictions in credit agreements and such other factors as the Board
of Directors may deem relevant.
USE OF PROCEEDS
There will be no proceeds to the Company from the issuance of Common Stock
upon conversion of Debentures by holders thereof. The net proceeds from the sale
of any Common Stock to the Purchaser pursuant to the standby arrangements
described herein will be used to effect redemption of any Debentures not
tendered for conversion. Any additional proceeds from the sale of Common Stock
pursuant to the standby arrangements described herein will be added to working
capital and used for general business purposes.
8
<PAGE> 10
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 1,500,000 shares of
Preferred Stock, $10.00 par value, and 20,000,000 shares of Common Stock, $1.00
par value. As of February 9, 1994, the Company had outstanding 11,785,039 shares
of Common Stock. Such number of outstanding shares would be increased to
13,326,674 if all of the Debentures were to be converted into Common Stock. No
shares of Preferred Stock were outstanding or reserved for issuance on such
date.
The following descriptions, which include a summary of certain provisions
of the Company's Certificate of Incorporation, do not purport to be complete and
are qualified in their entirety by reference to the Certificate of
Incorporation.
COMMON STOCK
Holders of Common Stock are entitled to cast one vote per share except that
they are entitled to cumulate votes in the election of directors. The Board of
Directors is divided into three classes, each consisting of three directors.
Directors serve for three-year terms, and only one class of directors is elected
each year. Holders of Common Stock are entitled to such dividends as the Board
of Directors in its discretion may declare out of legally available funds,
subject to any preference applicable to outstanding Preferred Stock. Holders of
Common Stock are also entitled, in the event of liquidation, subject to any
preference applicable to any outstanding shares of Preferred Stock, to receive
pro rata all assets remaining available for distribution to stockholders. The
Common Stock has no conversion rights, nor are there any preemptive,
subscription, redemption or call provisions applicable to the Common Stock.
Certain provisions of the Company's Certificate of Incorporation and
Bylaws, as well as the Delaware Anti-Takeover Law and the Stockholders' Rights
Agreement described below, may adversely affect attempts to acquire control of
the Company. Business combinations involving the Company and beneficial owners
of 15% or more of the Company's voting stock must be approved by holders of 85%
or more of the total voting power of all outstanding shares entitled to vote in
the election of directors, considered as one class, unless the Board of
Directors has approved the business combination or certain minimum price and
procedural requirements are met. Corporate action may be taken only at an annual
or special meeting, but not by written consent of the stockholders in lieu of a
meeting. Special meetings may be called only by the Board of Directors or by a
committee of the Board authorized by the Board to do so. The Bylaws of the
Company may be adopted, amended or repealed by the Board of Directors or by
two-thirds of the Company's outstanding voting shares. Finally, the provisions
described above which are contained in the Company's Certificate of
Incorporation may be subject to repeal or amendment only upon the approval of
two-thirds or more of the total voting power of the outstanding shares, except
for the provision requiring an 85% stockholder vote to approve certain business
combinations, which is subject to repeal or amendment only upon the approval of
85% or more of the total voting power of the outstanding shares.
As of December 31, 1993, the Company had 1,398 holders of record of its
Common Stock. The Company's Common Stock is listed on the New York Stock
Exchange and the Pacific Stock Exchange.
PREFERRED STOCK
The authorized shares of Preferred Stock are issuable, without further
stockholder approval, in one or more series as determined by the Board of
Directors, with such voting rights, designations, powers, preferences, dividend
rates, liquidation and conversion rights, and other qualifications, limitations
and restrictions as are specified by the Board of Directors. The issuance of
shares of Preferred Stock would necessarily create some preferences in favor of
the holders of such shares over the holders of shares of Common Stock. Except as
described in the next paragraph, there are no present plans to issue any shares
of Preferred Stock.
In connection with the adoption of the Stockholders' Rights Agreement
described below, the Board of Directors authorized the issuance of 150,000
shares of Series A Junior Participating Preferred Stock ("Series A Preferred").
Each share of Series A Preferred will be entitled to a minimum preferential
quarterly
9
<PAGE> 11
dividend payment of $35 per share, but will be entitled to an aggregate dividend
of 100 times the dividend declared per share of Common Stock. In the event of
liquidation, the holders of the shares of Series A Preferred will be entitled to
receive a minimum preferential liquidation payment equal to $7,000 per share,
but will be entitled to an aggregate payment of 100 times the payment made per
share of Common Stock. Each share of Series A Preferred will have one hundred
(100) votes, voting together with the shares of Common Stock. Finally, in the
event of any merger, consolidation or other transaction in which shares of
Common Stock are exchanged, each share of Series A Preferred will be entitled to
receive 100 times the amount received per share of Common Stock. These rights
are protected by certain antidilution provisions. The Series A Preferred is not
redeemable.
In the event of a proposed merger, tender offer, proxy contest or other
attempt to gain control of the Company not approved by the Board of Directors,
it would be possible for the Board of Directors to authorize the issuance of one
or more additional series of Preferred Stock having rights and preferences which
might impede the success of the proposal.
DELAWARE ANTI-TAKEOVER LAW
Section 203 of the Delaware General Corporation Law ("Section 203")
generally provides that a stockholder acquiring more than 15% of the outstanding
voting stock of a corporation subject to the statute (an "Interested
Stockholder") but less than 85% of such stock may not engage in certain
"Business Combinations" with the corporation for a period of three years after
the date on which the stockholder became an Interested Stockholder unless (i)
prior to such date the Corporation's board of directors approved either the
Business Combination or the transactions in which the stockholder became an
Interested Stockholder; or (ii) the Business Combination is approved by the
corporation's board of directors and authorized at a stockholders' meeting by a
vote of at least two-thirds of the corporation's outstanding voting stock not
owned by the Interested Stockholder. Under Section 203, these restrictions will
not apply to certain Business Combinations proposed by an Interested Stockholder
following the earlier of the announcement or notification of one of certain
extraordinary transactions involving the corporation and a person who was not an
Interested Stockholder during the previous three years or who became an
Interested Stockholder with the approval of the corporation's board of
directors, if such extraordinary transaction is approved or not opposed by a
majority of the directors who were directors prior to any person becoming an
Interested Stockholder during the previous three years or were recommended for
election or elected to succeed such directors by a majority of such directors.
Section 203 defines the term "Business Combination" to encompass a wide
variety of transactions with or caused by an Interested Stockholder, including
transactions in which the Interested Stockholder receives or could receive a
benefit on other than a pro rata basis with other stockholders, such as mergers,
certain asset sales, certain issuances of additional shares to the Interested
Stockholder, transactions with the corporation which increase the proportionate
interest in the corporation directly or indirectly owned by the Interested
Stockholder, or transactions in which the Interested Stockholder receives
certain other benefits.
The provisions of Section 203 could delay or frustrate the removal of
incumbent directors or a change of control of the Company. The provisions could
also discourage, impede or prevent a merger, tender offer or proxy contest, even
if such event would be favorable to the interests of stockholders.
STOCKHOLDERS' RIGHTS AGREEMENT
In April 1988, the Company adopted a Rights Agreement pursuant to which one
Preferred Share Purchase Right (a "Right") was distributed for each outstanding
share of Common Stock. Each right entitles stockholders to buy one one-hundreth
of a share of Series A Junior Participating Preferred Stock at an exercise price
of $35 upon the occurrence of certain events. The Rights expire on April 24,
1998, unless earlier redeemed by the Company.
The Rights become exercisable if a person acquires 20% or more of the
Company's Common Stock or announces a tender offer that would result in such
person owning 20% or more of the Company's Common Stock. If the Rights become
exercisable, the holder of each Right (other than the person whose acquisition
10
<PAGE> 12
triggered the exercisability of the Rights) will be entitled to purchase, at the
Right's then-current market price, a number of shares of Common Stock having a
market value of twice the exercise price. In addition, if the Company were to be
acquired in a merger or business combination after the Rights become
exercisable, each Right will entitle its holder to purchase, at the Right's
then-current exercise price, common stock of the acquiring company having a
market value of twice the exercise price. The Rights are redeemable by the
Company at a price of $0.25 per Right at any time within ten days after a person
has acquired 20% or more of the Common Stock.
REDEMPTION OF THE DEBENTURES AND EXPIRATION OF CONVERSION PRIVILEGE
The Company has elected to redeem and will redeem on March 4, 1994 all of
its outstanding Debentures at a redemption price of $1,018.50 per $1,000
principal amount of Debentures, which includes a redemption premium of $18.00
and accrued interest from March 1, 1994 of $.50. Interest will cease to accrue
on the Debentures on the Redemption Date. As alternatives to redemption, a
holder of Debentures may either:
(i) Convert the Debentures into shares of Common Stock of the Company
("Shares") at the conversion price of $25.94 per Share (or 38.55 Shares for
each $1,000 principal amount of Debentures); or
(ii) Sell the Debentures through brokers or otherwise.
The conversion alternative to redemption will expire at 5:00 p.m., New York
time, on February 25, 1994, and any Debentures not properly surrendered for
conversion on or prior to such date will be redeemed by the Company as provided
in the Debentures and the Indenture.
As long as the market price per Share is greater than or equal to $26.42,
holders of Debentures will receive, upon conversion, Shares (plus cash in lieu
of fractional Shares) having a market value greater than the total amount of
cash receivable upon redemption. The last reported sale price of the Shares on
February 16, 1994 was $32.375. If the holder of a $1,000 principal amount of
Debentures had converted the Debentures on February 16, 1994, such holder would
have received Shares (including cash in lieu of fractional Shares) having a
market value of $1,248.06.
The next scheduled interest payment date is March 1, 1994, at which time an
interest payment of $30 per $1,000 principal amount of Debentures will be paid
to holders of record as of February 15, 1994, in respect of interest accrued
from September 1, 1993 to and including February 28, 1994. Such interest payment
will be made on March 1, 1994 to such holders of record regardless of whether
such holders elect to convert their Debentures into Shares prior to such time.
Chemical Trust Company of California has been appointed Paying and
Conversion Agent in respect of the Debentures. In order either to convert your
Debentures or to surrender your Debentures for redemption, you must deliver your
Debenture Certificates to Chemical Trust Company of California, by mail or by
hand, in accordance with the instructions in the Letter of Transmittal
(including the Notice of Guaranteed Delivery described therein).
Debenture holders who wish to convert, but whose Debenture Certificates are
not available or who cannot deliver their Debenture Certificates and all other
documents required by the Letter of Transmittal to the Paying and Conversion
Agent prior to 5:00 p.m., New York time, on February 25, 1994, must elect to
convert their Debentures according to the instructions for guaranteed delivery
set forth in the Letter of Transmittal.
Holders of Debentures will realize taxable gain or loss upon a redemption
of the Debentures, but will generally not recognize gain or loss upon
conversion. Holders of the Debentures should consult their tax advisors as to
the federal, state and local tax treatment applicable to them upon conversion or
redemption of the Debentures.
11
<PAGE> 13
STANDBY ARRANGEMENTS
The Company has entered into an agreement (the "Standby Agreement") with
Bear, Stearns & Co. Inc. (the "Purchaser") pursuant to which the Purchaser has
agreed, subject to certain conditions, to purchase from the Company the shares
of Common Stock that otherwise would have been delivered upon conversion of
Debentures that are either (i) duly surrendered for redemption on or prior to
the Redemption Date or (ii) not duly surrendered for conversion on or prior to
the Conversion Expiration Date or for redemption on or prior to the Redemption
Date. Such shares of Common Stock will be purchased by the Purchaser for an
aggregate purchase price equal to the aggregate redemption payment to be made
for those Debentures.
The Purchaser may also purchase Debentures for its own account in the open
market or otherwise on or prior to the Conversion Expiration Date and has agreed
to surrender for conversion all Debentures so purchased by it and any additional
Debentures beneficially owned by it.
A maximum of 1,538,551 shares of Common Stock is subject to purchase under
the Standby Agreement, which amount represents the number of shares of Common
Stock issuable upon conversion of the $39,910,000 principal amount of Debentures
outstanding as of February 16, 1994.
Prior to and after the Redemption Date, the Purchaser may offer Common
Stock, including shares acquired through the purchase and conversion of
Debentures, directly to the public at prices set from time to time by the
Purchaser and to dealers at such prices less a selling concession to be
determined by the Purchaser. Prior to the Conversion Expiration Date, each such
price when set will not exceed the greater of the last sale or current asked
price of Common Stock on the New York Stock Exchange plus a dealer's concession,
and the offering price will not be increased more than once in any calendar day.
Sales of Common Stock by the Purchaser may be made on the New York Stock
Exchange, in block trades or in privately negotiated transactions. In effecting
such transactions, the Purchaser may realize profits or losses independent of
its compensation described below. Offers of shares by the Purchaser will be
subject to prior sale, to receipt and acceptance of shares by them, and to
approval of certain legal matters by counsel.
The Company has agreed to pay the Purchaser a standby fee of $400,000, plus
an additional $1.00 per share for each share in excess of 77,000 shares
purchased by the Purchaser pursuant to the Standby Agreement or acquired by the
Purchaser upon conversion of Debentures purchased by it subsequent to the date
hereof (collectively, the "Compensable Shares"). If the number of shares
purchased by the Purchaser pursuant to the Standby Agreement is less than
123,000, the Purchaser will remit to the Company an amount equal to 50% of the
net profits realized by it from sales of Compensable Shares (exclusive of shares
as to which the Purchaser had established a short position prior to the
Conversion Expiration Date). The Company has agreed to reimburse the Purchaser
for its out-of-pocket expenses in connection with the transactions contemplated
by the Standby Agreement and to indemnify the Purchaser against, and to provide
contribution with respect to, certain liabilities under the Securities Act of
1933, as amended.
Pursuant to the Standby Agreement, the Company has agreed that for a period
of 90 days from the date hereof, without the prior written consent of the
Purchaser, it will not, and will cause officers and directors to agree not to,
publicly announce its intention to issue or sell, or issue, sell, offer or agree
to sell or otherwise dispose of any shares of its capital stock (or securities
convertible into or exchangeable for capital stock), other than the (i) sale of
the shares offered hereby, (ii) issuance of shares upon the exercise of
presently outstanding options and the sales of shares in "cashless exercises" of
any such options, (iii) issuance of shares upon conversion of Debentures, or
(iv) the grant of options under the Company's employee benefit plans. Also, for
a period of 90 days from the date hereof, the Company has agreed not to acquire,
agree or commit to acquire or publicly announce its intention to acquire,
directly or through any subsidiary, assets or securities of any other person,
firm or corporation in a transaction or series of related transactions that
would be material to the Company.
The Purchaser has from time to time in recent years performed various
investment banking and other financial advisory services for the Company for
which it has received customary compensation.
12
<PAGE> 14
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for the
Company by Brobeck, Phleger & Harrison, San Francisco, California. Certain
matters will be passed upon for the Purchaser by Howard, Rice, Nemerovski,
Canady, Robertson, Falk & Rabkin, a Professional Corporation, San Francisco,
California. Mr. H.W. Budge, a retired partner and of counsel to Brobeck, Phleger
& Harrison, is a director of the Company. Mr. Budge and certain other members of
such firm own shares of the Company's Common Stock.
EXPERTS
The audited financial statements and schedules of Pope & Talbot
incorporated by reference in this Prospectus and elsewhere in the Registration
Statement have been audited by Arthur Andersen & Co., independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated by reference herein in reliance upon authority of said firm as
experts in giving said reports. Reference should be made to said reports which
contain an explanatory paragraph regarding accounting changes.
13
<PAGE> 15
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS OFFERING OTHER
THAN THOSE CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR THE PURCHASER. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THESE
SECURITIES OFFERED IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE SUCH AN OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF
THE COMPANY SINCE SUCH DATE.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
The Company........................... 3
1993 Results of Operations............ 4
Capitalization........................ 5
Selected Consolidated Financial
Data................................ 6
Price Range of Common Stock and
Dividends........................... 8
Use of Proceeds....................... 8
Description of Capital Stock.......... 9
Redemption of the Debentures and
Expiration of Conversion
Privilege........................... 11
Standby Arrangements.................. 12
Legal Matters......................... 13
Experts............................... 13
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
POPE & TALBOT, INC.
1,538,551 SHARES
COMMON STOCK
---------------------
PROSPECTUS
---------------------
BEAR, STEARNS & CO. INC.
FEBRUARY 17, 1994
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth an itemized statement of all estimated
expenses in connection with the issuance and distribution of the securities
being registered:
<TABLE>
<S> <C>
Registration fee.......................................................... $ 14,000
Printing and engraving expenses........................................... 15,000
Legal expenses............................................................ 75,000
Accounting fees and expenses.............................................. 10,000
State Securities laws fees and expenses................................... 5,000
Miscellaneous............................................................. 10,000
---------
Total................................................................ $ 129,000
---------
---------
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 145 of the Delaware General Corporation Law permits a corporation
to grant indemnification to directors, officers and other agents in terms
sufficiently broad to permit indemnification under certain circumstances for
liabilities, including expenses, arising in connection with the Securities Act
of 1933, as amended. Pursuant to the Bylaws of the Company, directors and
officers of the Company are indemnified to the full extent permitted by law
against all expenses (including attorneys' fees), judgments, fines or settlement
amounts incurred or paid by them in any action or proceeding, including any
action by or on behalf of the Company, on account of their service as an officer
or director of the Company. The Bylaws further provide that the rights conferred
under such Bylaws shall not be deemed exclusive of any other right such persons
may have or acquire under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise. The Restated Certificate of Incorporation
of the Company precludes, with certain exceptions, the Company and its
stockholders from recovering monetary damages from directors for business
decisions that breach such directors' fiduciary duty.
Reference is made to Section 9(b) of the form of Standby Agreement filed as
an exhibit hereto pursuant to which the Purchaser may, under certain
circumstances, indemnify the directors and officers of the Company. Directors
and officers of the Company may also be indemnified in certain circumstances
under the terms of other underwriting agreements entered into by the Company in
connection with prior public offerings.
ITEM 16. EXHIBITS.
<TABLE>
<S> <C>
1.1 Form of Standby Agreement.
5.1 Opinion of Brobeck, Phleger & Harrison.
20.1 Notice of Redemption.
20.2 Letter of Transmittal.
23.1 Consent of Arthur Andersen & Co.
23.2 Consent of Brobeck, Phleger & Harrison (included in the Opinion of Counsel filed as
Exhibit 5.1 hereto).
24.1 Power of Attorney (included on page II-3 of this Registration Statement).
</TABLE>
ITEM 17. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
II-1
<PAGE> 17
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
For purposes of determining any liability under the Securities Act of 1933,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
II-2
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Portland, Oregon, on this 17th day of February, 1994.
POPE & TALBOT, INC.
By /s/ PETER T. POPE
Peter T. Pope
President, Chief Executive Officer
and Chairman of the Board
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of Pope & Talbot, Inc., a
Delaware corporation, do hereby constitute and appoint Peter T. Pope and Carlos
M. Lamadrid, and each of them, the lawful attorneys and agents or attorney and
agent, with power and authority to do any and all acts and things and to execute
any and all instruments which said attorneys and agents, and any one of them,
determine may be necessary or advisable or required to enable said corporation
to comply with the Securities Act of 1933, as amended, and any rules or
regulations or requirements of the Securities and Exchange Commission in
connection with this Registration Statement. Without limiting the generality of
the foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
all that said attorneys and agents or any of them shall do or cause to be done
by virtue hereof. This Power of Attorney may be signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------- ------------------------------ ------------------
<C> <S> <C>
/s/ PETER T. President, Chief Executive February 17, 1994
POPE Officer and Chairman of the
Peter T. Pope Board
/s/ ADOLPHUS ANDREWS, JR. Director February 17, 1994
Adolphus Andrews, Jr.
/s/ HAMILTON W. BUDGE Director February 17, 1994
Hamilton W. Budge
/s/ EDWARD COOLEY Director February 17, 1994
Edward Cooley
/s/ CHARLES CROCKER Director February 17, 1994
Charles Crocker
</TABLE>
II-3
<PAGE> 19
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------- ------------------------------ ------------------
<C> <S> <C>
/s/ WARREN E. MCCAIN Director February 17, 1994
Warren E. McCain
/s/ ROBERT STEVENS MILLER, JR. Director February 17, 1994
Robert Stevens Miller, Jr.
/s/ HUGO G. L. POWELL Director February 17, 1994
Hugo G. L. Powell
/s/ BROOKS WALKER, JR. Director February 17, 1994
Brooks Walker, Jr.
/s/ CARLOS M. LAMADRID Senior Vice President, February 17, 1994
Carlos M. Lamadrid Secretary, Treasurer and Chief
Financial Officer
/s/ DENNIS E. BUNDAY Financial Controller February 17, 1994
Dennis E. Bunday
</TABLE>
II-4
<PAGE> 20
POPE & TALBOT, INC.
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBIT DESCRIPTION PAGE
- ------- ------------------------------------------------------------------------ -------------
<C> <S> <C>
1.1 Form of Standby Agreement.
5.1 Opinion of Brobeck, Phleger & Harrison.
20.1 Notice of Redemption.
20.2 Letter of Transmittal.
23.1 Consent of Arthur Andersen & Co.
23.2 Consent of Brobeck, Phleger & Harrison (included in the Opinion of
Counsel filed as Exhibit 5.1 hereto).
24.1 Power of Attorney (included on page II-3 of this Registration
Statement).
</TABLE>
<PAGE> 1
EXHIBIT 1.1
POPE & TALBOT, INC.
STANDBY PURCHASE AGREEMENT
FEBRUARY 17, 1994
NEW YORK, NEW YORK
BEAR, STEARNS & CO. INC.
245 PARK AVENUE
NEW YORK, NEW YORK 10167
Dear Sirs:
Pope & Talbot, Inc., a Delaware corporation (the "Company"), proposes to
redeem on March 4, 1994 (the "Redemption Date") all of the $39,910,000
outstanding principal amount of its 6% Convertible Subordinated Debentures Due
March 1, 2012 (the "Debentures") at a price (the "Redemption Price") equal to
101.8% of the principal amount thereof plus accrued interest from March 1, 1994
to the Redemption Date, and will cause requisite notice of such redemption to be
duly given. The Debentures are entitled to the benefits of an Indenture, dated
as of March 1, 1987 (the "Indenture"), between the Company and Chemical Trust
Company of California as successor Trustee ("Trustee"), and are convertible into
1,538,551 shares of the Company's common stock, $1.00 par value (the "Common
Stock"), at a conversion price of $25.94 per share of Common Stock. The right to
convert the Debentures into shares of Common Stock will terminate at 5:00 p.m.,
local time in New York, New York, on February 25, 1994 (the "Conversion
Expiration Date").
To assure the availability of funds to effect the contemplated redemption
of the Debentures, the Company desires to make arrangements pursuant to which
you would purchase from the Company the shares of Common Stock (hereafter, the
"Shares") that otherwise would have been issuable upon conversion of those
Debentures that are not duly surrendered for conversion pursuant to the
Indenture, such purchase to be made for an aggregate price equal to the
aggregate Redemption Price of those Debentures, including accrued interest to
the Redemption Date. The Company hereby confirms its agreement with you with
respect to those arrangements.
1. SALE AND PURCHASE OF SHARES.
In reliance upon the representations, warranties and agreements of the
Company contained herein, but subject to the terms and conditions herein set
forth, you agree to purchase, and the Company agrees to issue, sell and deliver
to you, at and for a price (the "Purchase Price") of $26.42 per Share, the
Shares.
2. PAYMENT AND DELIVERY.
(a) At the direction of the Company, Trustee shall give to the Company and
to you, at or immediately after 3:00 p.m., New York time, on the Redemption
Date, written notice of the aggregate principal amount of Debentures surrendered
to Trustee for redemption by 3:00 p.m., New York time, on the Redemption Date.
Immediately thereafter, you shall direct Citibank, N.A., New York, New York
("Citibank") to transfer from your account at Citibank to the account of
Trustee, in its capacity as Trustee and Paying Agent, immediately available
funds in an amount equal to the aggregate Redemption Price of the Debentures
specified in the Company's notice referred to in the preceding sentence.
Simultaneously with such payment, the Company shall deliver to you, at 245 Park
Avenue, New York, New York 10167, or at such other location as shall be mutually
acceptable to the Company and you, a certificate or certificates evidencing
those of the Shares as would otherwise have been issuable upon conversion of the
Debentures so surrendered for redemption, the aggregate Purchase Price of which
Shares shall be the amount of the funds so transferred pursuant to the preceding
sentence.
(b) At the Company's direction, Trustee shall give to the Company and you,
at or immediately after 5:00 p.m., New York City time, on the Redemption Date,
written notice of the aggregate principal amount of Debentures not theretofore
duly surrendered to the Paying and Conversion Agent named in the Indenture prior
to the applicable time of expiration of the conversion right specified in the
first introductory paragraph of
1
<PAGE> 2
this Agreement. Immediately thereafter, you shall cause Citibank to transfer
from your account at Citibank to a designated account of the Trustee, in its
capacity as Trustee and Paying Agent, immediately available funds in an amount
equal to the aggregate Redemption Price of that principal amount of Debentures
(hereafter, the "Remaining Debentures") as shall equal the excess of (i) the
amount of Debentures specified in such notice over (ii) the amount of Debentures
specified in the notice previously furnished by Trustee pursuant to subparagraph
(a) of this Section 2. Simultaneously with such transfer, the Company shall
deliver to you, at your offices as aforesaid or at such other location as shall
be mutually acceptable to the Company and you, a certificate or certificates
evidencing those of the Shares as would otherwise be issuable upon conversion of
the Remaining Debentures, the aggregate purchase price of which Shares shall be
the amount of the funds so transferred pursuant to the preceding sentence.
(c) Certificates representing the Shares so delivered to you shall be
registered in such name or names and shall be in such denominations as the
Representative may request in a written notice to the Company at least two
business days prior to the Redemption Date.
(d) The Company shall reimburse you for the incremental cost to you
resulting from your payment for the Shares in immediately available funds rather
than New York Clearing House funds at the prevailing federal funds rate plus 25
basis points.
3. RESALE OF SHARES; OPEN MARKET TRANSACTIONS; SOLICITATIONS.
(a) The Company understands that you intend to resell the Shares, as well
as shares of Common Stock issued or issuable to you upon conversion of
Debentures purchased by you subsequent to the date hereof (the "Conversion
Shares"), from time to time at prices prevailing in the open market, as set
forth in the Prospectus (as defined in Section 5(a) hereof), and confirms that
you and dealers selected by you have been authorized by the Company to
distribute the Prospectus in connection with such resales. You agree to remit to
the Company an amount equal to 50% of the amount by which (i) the aggregate
proceeds (net of selling concessions, commissions, transfer taxes and other
directly related expenses) realized by you in respect of sales of Shares and
Conversion Shares (exclusive, however, of shares of Common Stock with respect to
which you may have established a short position prior to the Redemption Date)
exceeds (ii) the Purchase Price per share for each such Share and Conversion
Share so sold, but only if the aggregate number of Shares purchased by you
pursuant to this Agreement, together with Conversion Shares acquired by you upon
conversion of Debentures purchased by you subsequent to the date hereof, is less
than 123,000 shares of Common Stock. For the purposes of the foregoing, any
Shares not sold by or for your account prior to the close of business on the
tenth day after the Redemption Date shall be deemed to have been sold on such
tenth day for an amount equal to the last sale price of the Common Stock on such
day as reported on the New York Stock Exchange Composite Tape. Settlement of the
profit sharing arrangement set forth in this Paragraph shall occur as soon as
reasonably practicable after the final disposition by you of all Shares
purchased by you pursuant to this Agreement.
(b) The Company acknowledges that it is aware that you may (but shall have
no obligation to) purchase Debentures, in the open market or otherwise, in such
amounts and at such prices as you may deem advisable. You agree to present for
conversion at or immediately prior to 5:00 p.m. in New York City on the
Conversion Expiration Date and convert any Debentures so acquired and any
additional Debentures beneficially owned by you. Shares of Common Stock issued
to you on conversion of Debentures may be sold by you at any time or from time
to time. The Company further acknowledges that it is aware that you may purchase
or sell shares of Common Stock for long or short account on the New York Stock
Exchange, Pacific Stock Exchange, or otherwise, at such times and prices and on
such terms as you deem advisable, and that such purchases or sales, if
commenced, may be discontinued at any time. Nothing contained herein shall limit
your right, in your discretion, to determine the price or prices at which, or
the time or times when, any Debentures or shares of Common Stock may be
purchased or sold by you, whether prior to or after the Redemption Date and
whether for long or short account.
(c) The Company has not paid or given, and will not pay or give, directly
or indirectly, any commission or other remuneration for soliciting conversions
of Debentures into Common Stock.
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4. COMPENSATION.
As full compensation to you for your commitments hereunder, the Company
shall pay to you (i) on the date hereof, the aggregate sum of $400,000 (the
"Standby Commitment Fee"), and (ii) on the Redemption Date, a further sum (the
"Take-up Fee") equal to $1.00 per Share for each Share purchased by you
hereunder and each Conversion Share issued or issuable to you upon conversion of
Debentures acquired by you subsequent to the date hereof (as contemplated by
Section 3(b) hereof); provided that no Take-up Fee shall be payable unless the
aggregate number of Shares purchased by you hereunder, together with all
Conversion Shares issued or issuable to you upon conversion of Debentures
acquired by you subsequent to the date hereof, exceeds 77,000 shares. All such
fees shall be payable in New York Clearing House (next day) funds. You shall
have the right, in lieu of receiving payment of the Take-up Fee from the
Company, to deduct an amount equal to the aggregate Take-up Fee from the
aggregate purchase price of the Shares purchased by you on the Redemption Date.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933 (the "Act") and has prepared and filed with the
Securities and Exchange Commission (the "Commission"), pursuant to the Act and
the rules and regulations promulgated by the Commission thereunder (the
"Regulations"), a registration statement on Form S-3, including a prospectus,
covering the maximum number of shares or Common Stock that would constitute the
Shares. As used in this Agreement, (i) the term "Effective Date" means the date
that the registration statement hereinabove referred to is declared effective by
the Commission, (ii) the term "Registration Statement" means such registration
statement including all financial statements, schedules and exhibits, and (iii)
the term "Prospectus" means the form of final prospectus relating to the Shares
first filed with the Commission pursuant to Rule 424(b) of the Regulations or,
if no filing pursuant to Rule 424(b) is required, the form of final prospectus
included in the Registration Statement at the Effective Date. Any reference
herein to the Registration Statement or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 which were filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), on or before the Effective Date or the date of the
Prospectus, as the case may be, and any reference herein to the terms "amend,"
"amendment" or "supplement," when used with respect to the Registration
Statement or the Prospectus shall be deemed to refer to and include the filing
of any document under the Exchange Act after the Effective Date or the date of
the Prospectus, as the case may be, that is deemed to be incorporated therein by
reference.
(b) When the Registration Statement shall become effective, when the
Prospectus is first filed with the Commission pursuant to Rule 424(b) of the
Regulations (if such filing is required), when any amendment to the Registration
Statement or supplement to the Prospectus is filed with the Commission, and at
the Redemption Date, the Registration Statement and the Prospectus and any
amendments thereof and supplements thereto will comply in all material respects
with the applicable provisions of the Act and the Regulations, and will not
contain an untrue statement of a material fact and will not omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading. No representation and
warranty is made in this subsection (b), however, with respect to any
information contained in or omitted from the Registration Statement or the
Prospectus or any amendment thereof or supplement thereto in reliance upon and
in conformity with information with respect to you furnished in writing to the
Company by you expressly for use therein. The documents incorporated by
reference in the Registration Statement and the Prospectus, when they were first
filed with the Commission (or, if an amendment with respect to any such document
was filed, when such amendment was filed with the Commission), complied in all
material respects with the applicable provisions of the Exchange Act and the
rules and regulations of the Commission thereunder; and any further documents so
filed and incorporated by reference prior to the termination of the offering of
Shares by you will, when they are filed with the Commission, comply in all
material respects with the applicable provisions of the Exchange Act and the
rules and regulations of the Commission thereunder;
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none of such filed documents when they were so filed (or, if an amendment with
respect thereto was filed, when such amendment was filed), contained 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; and no such further
document, when it is filed with the Commission, will contain an untrue statement
of 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.
(c) Arthur Andersen & Co., whose report is filed with the Commission and
incorporated by reference in and made a part of the Registration Statement, are
independent public accountants with regard to the Company as required by the Act
and the Regulations. The consolidated financial statements of the Company and
its consolidated subsidiaries included or incorporated by reference in the
Registration Statement present fairly the consolidated financial position and
results of operations of the Company and its consolidated subsidiaries at the
respective dates thereof and for the respective periods covered thereby. Such
financial statements have been prepared in accordance with United States
generally accepted accounting principles consistently applied throughout the
periods involved except as otherwise stated therein.
(d) Subsequent to the respective dates as of which information is given in
the Registration Statement, except as set forth in the Registration Statement,
there has not been any material adverse change in the business, properties,
operations, condition (financial or other) or results of operations of the
Company and its subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, and since the date of the
latest balance sheet included or incorporated by reference in the Registration
Statement, neither the Company nor any of its subsidiaries has incurred any
liabilities or obligations, direct or contingent, which are material to the
Company and its subsidiaries taken as a whole, except for liabilities or
obligations which were incurred in the ordinary course of business or are
disclosed in the Registration Statement.
(e) This Agreement has been duly and validly authorized, executed and
delivered by the Company and is a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that (i) rights to indemnity or contribution hereunder may be limited by
Federal or state securities laws or the public policy underlying such laws, (ii)
such enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and (iii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
(f) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereto, including
but not limited to the call of the Debentures for redemption on the Redemption
Date, the conversion or redemption of the Debentures and the issuance and sale
of the Shares pursuant hereto, will not (i) conflict with or result in a breach
of any of the terms and provisions of, or constitute a default (or an event
which with notice or lapse of time, or both, would constitute a default) or
require consent under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its
subsidiaries, pursuant to the terms of any agreement, instrument, franchise,
license or permit to which the Company or any of its subsidiaries is a party or
by which any of such corporations or their respective properties or assets may
be bound (other than those as to which requisite waivers or consents have been
obtained by the Company, copies of which have been furnished to you, and those
that, individually or in the aggregate, would not have a material adverse effect
on the Company and its subsidiaries taken as a whole), or (ii) violate or
conflict with any provision of the certificate of incorporation, by-laws, or
equivalent instruments, of the Company or any of its subsidiaries listed in
Appendix I hereto, or (iii) violate or conflict with any judgment, decree,
order, statute, rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties or assets, except for those
violations or conflicts that, individually or in the aggregate, would not have a
material adverse effect on the Company and its subsidiaries taken as a whole. No
consent, approval, authorization, order, registration, filing, qualification,
license or permit of or with any court or any public, governmental or regulatory
agency or body having jurisdiction over the Company or any of its subsidiaries
or any of their respective properties or assets is required for the execution,
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<PAGE> 5
delivery and performance of this Agreement by the Company, and the consummation
of the transactions contemplated hereby, including without limitation the
issuance, sale and delivery of the Shares to be issued, sold and delivered by
the Company hereunder, except (i) such as have been made or obtained, (ii) the
registration under the Act of the Shares and (iii) such consents, approvals,
authorizations, orders, registrations, filings, qualifications, licenses and
permits as may be required under state securities or Blue Sky laws in connection
with the distribution of the Shares by you.
(g) All of the currently outstanding shares of capital stock of the Company
are duly and validly authorized and issued, are fully paid and nonassessable and
were not issued in violation of or subject to any preemptive rights. The Shares
and any Conversion Shares have been duly and validly authorized and, when issued
and delivered in accordance with this Agreement, will have been duly and validly
issued and delivered, and will be fully paid and nonassessable, and will not
have been issued in violation or subject to any preemptive rights. The Company
had, at December 31, 1993, an authorized and outstanding capitalization as set
forth in the Registration Statement and as shall be set forth in the Prospectus.
The Common Stock conforms to the description thereof set forth in, or
incorporated by reference into, the Registration Statement and as shall be set
forth in, or incorporated by reference into, the Prospectus.
(h) Each of the Company and its subsidiaries listed on Appendix I hereto
has been duly organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation. Each of the
Company and its subsidiaries is duly qualified and in good standing as a foreign
corporation in each jurisdiction in which the character or location of its
properties (owned, leased or licensed) or the nature or conduct of its business
makes such qualification necessary, except for those failures to be so qualified
or in good standing which will not in the aggregate have a material adverse
effect on the Company and its subsidiaries taken as a whole. Each of the Company
and its subsidiaries has all requisite power and authority, and all necessary
consents, approvals, authorizations, orders, registrations, qualifications,
licenses and permits of and from all public, regulatory or governmental agencies
and bodies, to own, lease and operate its properties and conduct its business as
now being conducted and as described in the Registration Statement and as shall
be described in the Prospectus (except for those the absence of which,
individually or in the aggregate, would not have a material adverse effect on
the Company and its subsidiaries taken as a whole) and no such consent,
approval, authorization, order, registration, qualification, license or permit
contains a restriction that is materially burdensome to the Company and its
subsidiaries taken as a whole and that shall not be disclosed in the Prospectus.
(i) The Company has no material subsidiary except as set forth on Appendix
I hereto. All of the issued and outstanding capital stock of each such
subsidiary of the Company has been duly and validly issued and is fully paid and
nonassessable and free of preemptive rights and is owned directly or indirectly
by the Company, except as disclosed in the Registration Statement and as shall
be disclosed in the Prospectus, free and clear of any lien, claim, security
interest, restriction on transfer, stockholders' agreement or voting trust,
except for such liens, claims, security interests, restrictions on transfer,
stockholders' agreements and voting trusts as are disclosed in the Registration
Statement and as shall be disclosed in the Prospectus or such as do not and will
not, individually or in the aggregate, have a material adverse effect upon the
financial condition, results of operations, operations or business of the
Company and its subsidiaries taken as a whole.
(j) Except as disclosed in the Registration Statement and as shall be
disclosed in the Prospectus, there is no commitment, plan, arrangement or
understanding on the part of the Company to issue, and there is outstanding no
option, warrant, right or convertible security upon the exercise of which the
Company or any subsidiary may be obligated to issue, any shares of its capital
stock.
(k) There is no civil or governmental action, suit, proceeding or
investigation before any court, arbitration panel or other tribunal or before or
by a public, regulatory or governmental agency or body pending or, to the
knowledge of management of the Company or any of its subsidiaries, threatened
against, or involving the properties or business of, the Company or any of its
subsidiaries, which, if resolved against the Company or such subsidiary,
individually, or to the extent involving related claims or issues, in the
aggregate, is of a character required to be disclosed in the Registration
Statement and the Prospectus which has not been disclosed therein; and there is
no contract or other document concerning the Company or any of its
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<PAGE> 6
subsidiaries of a character required to be disclosed in the Registration
Statement and the Prospectus or to be filed as an exhibit to the Registration
Statement, that has not been so disclosed or filed.
(l) The Debentures are convertible into Common Stock at a conversion price
of $25.94 per share. As of the close of business in New York City on the
business day last preceding the date hereof, there were outstanding $39,910,000
aggregate principal amount of Debentures. The redemption of all of the
Debentures on the Redemption Date has been duly authorized by all requisite
corporate action on the part of the Company and, by the close of business in New
York City on February 17, 1994, all of the Debentures shall have been duly
called for redemption on the Redemption Date in accordance with the terms of the
Indenture.
(m) Each of the Company and its subsidiaries has good and marketable title
to all real and personal properties and assets which are owned by it, free and
clear of all liens, security interests, pledges, charges, encumbrances, and
mortgages (except as disclosed in the Registration Statement and as may be
disclosed in the Prospectus or such as individually or in the aggregate do not
now have, and will not in the future have, a material adverse effect upon the
financial condition, results of operations, operations, business, properties,
assets or liabilities of the Company and its subsidiaries taken as a whole).
Nothing exists which would prevent, the continued ownership, leasing, licensing
or use of such real property in the business of the Company or such subsidiary
as presently conducted or as the Prospectus may indicate it contemplates
conducting (except as may be disclosed in the Prospectus or such as individually
or in the aggregate do not now have and will not in the future have a material
adverse effect upon the financial condition, results of operations, operations,
business, properties, assets or liabilities of the Company and its subsidiaries
taken as a whole).
(n) Neither the Company nor any subsidiary nor, to the best knowledge of
the Company or such subsidiary, any other party, is in violation or breach of,
or in the default with respect to complying with, any material provision of any
contract, agreement, instrument, lease, license, arrangement or understanding to
which the Company or such subsidiary is a party and which is material to the
Company and its subsidiaries taken as a whole, except for such violations,
breaches and defaults as, individually or in the aggregate, would not have
material adverse effect on the financial condition, results of operations,
operations or business of the Company and its subsidiaries taken as a whole;
each such contract, agreement, instrument, lease, license, arrangement and
understanding is in full force and effect. The Company and each of its
subsidiaries listed in Appendix I hereto enjoys peaceful and undisturbed
possession in all material respects under all material leases and licenses under
which it is operating, and neither the Company nor any subsidiary is in
violation or breach of, or in default with respect to, any term of its
certificate of incorporation (or other charter document) or by-laws (or other
governing document), except where the same would not have a material adverse
effect on the Company and its subsidiaries taken as a whole.
(o) All patents, patent applications, trademarks, trademark applications,
trade names, service marks, copyrights, franchises, and other intangible
properties and assets (all of the foregoing being herein called "Intangibles")
that the Company or any subsidiary owns or has pending, or under which it is
licensed, and that are material to the Company and its subsidiaries taken as a
whole, are in good standing and uncontested. Neither the Company nor any
subsidiary has received notice of its infringement of asserted Intangibles of
others. To the knowledge of management of the Company and each subsidiary, there
is no infringement by others of Intangibles of the Company or such subsidiary
that has had or that is reasonably likely in the future to have a materially
adverse effect on the financial condition, results of operations, operations or
business of the Company and its subsidiaries taken as a whole.
(p) Other than as disclosed in the Registration Statement and as shall be
disclosed in the Prospectus, no labor dispute with the employees of the Company
or any of its subsidiaries exists or, to the knowledge of management of the
Company, is imminent that, singly or in the aggregate, is or is reasonably
likely to be material to the Company and its subsidiaries taken as a whole, and
the Company is not aware of any existing or imminent labor disturbance by the
employees of any of its principal suppliers, manufacturers or contractors that
reasonably can be expected to have a material adverse effect on the financial
condition, results of operations, operations or business of the Company and its
subsidiaries taken as a whole.
(q) (A) All United States Federal income tax returns of the Company and
each of its subsidiaries required by law to be filed have been filed and all
taxes shown by the said returns or otherwise assessed which
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<PAGE> 7
are due and payable have been paid, except assessments against which appeals
have been or will be promptly taken and (B) the Company and its subsidiaries
have filed all other tax returns that are required to have been filed by them
pursuant to applicable law of all other jurisdictions, except, as to each of the
foregoing clauses (A) and (B), insofar as the failure to file such returns,
individually and in the aggregate, would not have a material adverse effect on
the financial condition, results of operations, operations or business of the
Company and its subsidiaries taken as a whole, and the Company and its
subsidiaries have paid all taxes due pursuant to said returns or pursuant to any
assessment received by the Company or its subsidiaries, except for such taxes,
if any, as are being contested in good faith and as to which adequate reserves
have been provided in accordance with generally accepted accounting principles
or if the failure to make any or all such payments, singly or in the aggregate,
would not be material to the Company and its subsidiaries, taken as a whole. The
charges, accruals and reserves on the consolidated books of the Company in
respect of any income and corporation tax liability for any years not finally
determined are adequate to meet any assessments or reassessments for additional
income tax for any years not finally determined, except to the extent of any
inadequacy which would not have a material adverse effect on the financial
condition, results of operations, operations or business of the Company and its
subsidiaries taken as a whole.
(r) Neither the Company nor any of its officers, directors or affiliates
(as defined in the Regulations) has taken or will take, in contemplation of or
in connection with the transactions contemplated hereby, any action designed to
cause or result in, or that has constituted or may constitute, or that has
caused or resulted in or might reasonably be expected to cause or result in,
stabilization or manipulation of the price of any securities of the Company.
(s) Neither the Company nor any of its subsidiaries is, or is conducting
its business in a manner that would cause it to become, an "investment company"
or a company "controlled" by an "investment company" as defined in the
Investment Company Act of 1940, as amended.
(t) No person or entity has the right by contract or otherwise, to require
registration under the Act of shares of Common Stock or other securities of the
Company solely because of the filing or effectiveness of the Registration
Statement.
(u) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions by the Company
and its subsidiaries are executed in accordance with management's general or
specific authorization; (ii) transactions by the Company and its subsidiaries
are recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (iii) the access to the respective assets of the
Company and its subsidiaries is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
6. COVENANTS OF THE COMPANY.
The Company covenants and agrees with you that:
(a) The Company will use its best efforts to cause the Registration
Statement to become effective promptly after the filing thereof with the
Commission. The Company will promptly advise you, and confirm such advice in
writing, (1) when the Registration Statement or any post-effective amendment
thereto has become effective, (2) of the initiation or threatening of any
proceedings for, or receipt by the Company of any notice with respect to, the
suspension of the qualification of the Shares for sale in any jurisdiction or
the issuance of any order suspending the effectiveness of the Registration
Statement, and (3) of receipt by the Company or any representative or attorney
of the Company of any other communications from the Commission relating to the
Company, the Registration Statement, any preliminary prospectus, the Prospectus
or the transactions contemplated by this Agreement. The Company will make every
reasonable effort to prevent the issuance of an order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereto and, if any such order is issued, to obtain its lifting as soon as
possible. The Company will not file any amendment to the Registration Statement
or any supplement to the Prospectus before or after the Effective Date to which
you shall reasonably object in writing after being timely furnished in advance a
copy thereof.
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(b) If, at any time when a prospectus relating to the Shares is required to
be delivered under the Act, any event shall have occurred as a result of which
the Prospectus as then amended or supplemented includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it shall be necessary at any
time to amend or supplement the Registration Statement or Prospectus to comply
with the Act or the Regulations, the Company will (i) notify you promptly and
prepare and file with the Commission an appropriate amendment or supplement (in
form and substance reasonably satisfactory to you) which will correct such
statement or omission and (ii) use its best efforts to have any necessary
amendment to the Registration Statement declared effective as soon as possible.
(c) The Company will promptly delivery to you three manually-signed copies
of the Registration Statement, including exhibits and all documents incorporated
by reference therein and all amendments thereto, and to those persons including
yourself who you identify to the Company, such number of copies of the
Prospectus, the Registration Statement, all amendments of and supplements to
such documents, if any, and all documents incorporated by reference in the
Registration Statement and Prospectus or any amendment or supplement thereto,
without exhibits, as you may reasonably request.
(d) The Company will endeavor in good faith, in cooperation with you, at or
prior to the time the Registration Statement becomes effective, to qualify the
Shares for offering and sale under the securities laws of such jurisdictions as
you may designate and to maintain such qualification in effect for so long as
required for the distribution thereof.
(e) The Company will make generally available (within the meaning of
Section 11(a) of the Act) to its security holders and to you as soon as
practicable, an earnings statement, covering a period of at least twelve
consecutive full calendar months commencing after the effective date of the
Registration Statement, that satisfies the provisions of Section 11(a) of the
Act and Rule 158 of the Regulations.
(f) During a period of three (3) years from the effective date of the
Registration Statement, the Company will furnish to you copies of (i) all
reports to its stockholders, and (ii) all reports, financial statements and
proxy or information statements filed by the Company with the Commission or any
national securities exchange.
(g) The Company will apply the proceeds from the sale of the Shares as set
forth under "Use of Proceeds" in the Prospectus.
(h) The Common Stock currently outstanding, and Common Stock issuable on
conversion of the Debentures, is listed or approved for listing on notice of
issuance, as the case may be, on the New York Stock Exchange ("NYSE") and the
Pacific Stock Exchange ("PSE"). Application has been made to list the Shares on
the NYSE and PSE, upon official notice of issuance. The Company shall cause the
Shares to be duly authorized for listing on the NYSE and PSE, subject only to
official notice of issuance, on or prior to the Conversion Expiration Date.
(i) During a period of ninety (90) days from the date hereof, the Company
will not, without your prior written consent, (A) publicly announce its
intention to issue or sell, or issue, sell, offer or agree to sell, or otherwise
dispose of, directly or indirectly, any capital stock (or any securities
convertible into, exercisable for or exchangeable for capital stock), and the
Company has obtained and will deliver to you on the date hereof a written
undertaking from each of the Company's officers and directors, not to engage in
any of the aforementioned transactions on his or its own behalf, other than (i)
the Company's issuance and sale of Shares hereunder, (ii) the Company's issuance
of shares of Common Stock upon the exercise of presently outstanding stock
options or upon the conversion of presently outstanding Debentures, (iii) the
Company's issuance of shares of Common Stock or stock options under its employee
benefit plans, or (iv) the sale of shares of Common Stock through "cashless
exercises" of presently outstanding stock options, or (B) acquire, agree or
commit to acquire or publicly announce its intention to acquire, directly or
through a subsidiary, assets or securities of any other person, firm or
corporation in a transaction or series of related transactions that would be
material to the Company and its subsidiaries, taken as a whole.
(j) On the date hereof the Company shall mail or cause to be mailed to all
holders of Debentures, and shall cause to be published where and in the manner
required by the Indenture and in such other newspapers
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<PAGE> 9
as you shall specify, the required notice of the redemption of the Debentures on
the Redemption Date (together with notice of the other rights of the holders of
the Debentures) in the form heretofore submitted to you, and shall furnish to
you such number of copies thereof as you reasonably may request.
(k) The Company will direct Chemical Trust Company of California, as Paying
and Conversion Agent for the Debentures, to advise you daily of the aggregate
principal amount of Debentures (x) surrendered for conversion into Common Stock
and (y) surrendered for redemption, in each case through the close of business
on the immediately preceding business day.
(l) The Company will (i) give you at least one business day's prior written
notice of the contents of any press release or other public announcement it
intends to issue on or prior to the Redemption Date and (ii) consider in good
faith any comments you may have concerning the timing and content of such press
release or other public announcement.
7. PAYMENT OF EXPENSES.
Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, the Company hereby agrees to pay
all costs and expenses incident to the performance of the obligations of the
Company hereunder, including those in connection with (i) preparing, printing,
duplicating, filing and distributing the Registration Statement, as originally
filed and all amendments thereto (including all exhibits thereto), the
Prospectus and any amendments thereof or supplements thereto, and all other
documents related to the public offering of the Shares (including those supplied
to you in quantities as hereinabove stated), (ii) the issuance and delivery of
the Shares to you (including any transfer or other taxes payable thereon), (iii)
the qualification of the Shares under state and foreign securities or Blue Sky
laws, including the fees and disbursements of your counsel in relation thereto
and (iv) the listing of the Shares on the NYSE and PSE. In addition, the Company
shall reimburse you for your out-of-pocket expenses incurred in connection with
this Agreement and the consummation of the transactions contemplated hereby,
including the reasonable fees and disbursements of your counsel.
8. CONDITIONS OF YOUR OBLIGATIONS.
Your respective obligations to purchase and pay for the Shares as provided
herein shall be subject to the accuracy in all material respects of the
representations and warranties of the Company herein contained as of the date
hereof and as of the Redemption Date, to the absence of any material
misstatement or omission from any certificates, opinions, written statements or
letters furnished pursuant to this Section 8 to you or to Howard, Rice,
Nemerovski, Canady, Robertson, Falk & Rabkin, A Professional Corporation ("your
counsel"), to the performance by the Company of its obligations hereunder in all
material respects, and to the following additional conditions:
(a) The Registration Statement shall have become effective not later than
5:00 p.m., New York City time, on the next business day following the date
hereof or at such later time and date as shall have been consented to in writing
by you, no stop order suspending the effectiveness of the Registration Statement
or any post-effective amendment thereof shall have been issued and no
proceedings therefor shall have been initiated or threatened by the Commission.
(b) On the date hereof and on the Redemption Date, you shall have received
the opinion of Brobeck, Phleger & Harrison, counsel for the Company, dated the
date of its delivery, addressed to you and in form and substance satisfactory to
your counsel, to the effect that:
(i) Each of the Company and its domestic subsidiaries listed in
Appendix I hereto (the "Material Domestic Subsidiaries") has been duly
organized and is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation. Each of the Company and its
Material Domestic Subsidiaries is duly qualified and in good standing as a
foreign corporation in each jurisdiction in which the character or location
of its properties (owned, leased or licensed) or the nature or conduct of
its business makes such qualification necessary, except for those failures
to be so qualified or in good standing which will not in the aggregate have
a material adverse effect on the Company and its
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<PAGE> 10
subsidiaries taken as a whole. Each of the Company and its Material
Domestic Subsidiaries has full corporate power and authority to own its
respective properties and conduct its business as described in the
Registration Statement and the Prospectus except where the failure to have
the necessary power and authority would not have a materially adverse
affect on the Company and its subsidiaries taken as a whole. All of the
issued and outstanding capital stock of each domestic subsidiary of the
Company has been duly and validly issued and is fully paid and
nonassessable and free of preemptive rights and is owned directly or
indirectly by the Company, free and clear of any lien, claim or security
interest (other than as disclosed in the Registration Statement) and, to
the knowledge of such counsel, any restriction on transfer, stockholders'
agreement, voting trust or other defect of title whatsoever.
(ii) The Company has authorized capital stock as set forth in the
Registration Statement and the Prospectus. The Shares to be delivered
pursuant to this Agreement have been duly and validly authorized and, when
delivered in accordance with this Agreement, will be duly and validly
issued and outstanding, fully paid and nonassessable and will not have been
issued in violation of or subject to any preemptive rights. Upon delivery
of the Shares and payment therefor as contemplated by this Agreement, you
will receive good, valid and marketable title to the Shares purchased by
you, free and clear of all liens, encumbrances, claims, security interests,
restrictions on transfer and other defects of title whatsoever (other than
those resulting from any action taken by you or any person taking action
through or under you). The Common Stock conforms in all material respects
to the description thereof contained in or incorporated by reference into
the Registration Statement and the Prospectus.
(iii) The Common Stock currently outstanding is listed on the NYSE and
PSE; and the Shares have been duly authorized for listing on the NYSE and
PSE, subject only to official notice of issuance (which opinion regarding
the Shares is required only on the Redemption Date).
(iv) This Agreement has been duly and validly authorized, executed and
delivered by the Company and is a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except (A) that rights to indemnity and/or contribution hereunder may be
limited by Federal or state securities laws or the public policy underlying
such laws, (B) that such enforcement may be subject to bankruptcy,
insolvency, reorganization or other similar laws now or hereafter in effect
relating to creditors' rights generally, and (C) that the remedy of
specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(v) To such counsel's knowledge, there is no legal or governmental
proceeding required to be disclosed in the Registration Statement and the
Prospectus which has not been disclosed therein as so required; and to such
counsel's knowledge there is no contract or other document concerning the
Company or any of its subsidiaries of a character required to be described
in the Registration Statement and the Prospectus or to be filed as an
exhibit to the Registration Statement, that has not been so described or
filed.
(vi) The call of the Debentures for redemption as contemplated hereby
has been duly and validly authorized by all necessary corporate action on
the part of the Company and complies with all applicable requirements of
the Indenture.
(vii) The execution, delivery and performance of this Agreement by the
Company, and the consummation of the transactions contemplated hereby,
including without limitation the call of the Debentures for redemption and
issuance, sale and delivery of the Shares, do not (A) conflict with or
result in a breach of any of the terms and provisions of, or constitute a
default (or an event which with notice or lapse of time, or both, would
constitute a default) or require consent under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to the terms of
any agreement, instrument, franchise, license or permit known to such
counsel to which the Company or any of its subsidiaries is a party or by
which any of such corporations or their respective properties or assets is
bound (other than those as to which requisite waivers or consents have been
obtained by the Company and those that, individually or in the aggregate,
would not have a material adverse effect upon the Company and its
subsidiaries taken as a whole) or
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<PAGE> 11
(B) violate or conflict with any provision of the certificate of
incorporation, by-laws or equivalent instruments of the Company or any of
its subsidiaries that are organized under the laws of any state or other
jurisdiction in the United States, or (C) to the best knowledge of such
counsel, violate or conflict with any judgment, decree, order, statute,
rule or regulation of any court or any public, governmental or regulatory
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties or assets, except for
those violations or conflicts that, singly or in the aggregate, would not
have a material adverse effect on the Company and its subsidiaries taken as
a whole. To such counsel's knowledge, no consent, approval, authorization,
order, registration, filing, qualification, license or permit of or with
any court or any public, governmental, or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
respective properties or assets is required for the execution, delivery and
performance of this Agreement by the Company, and the consummation of the
transactions contemplated hereby, including without limitation the
issuance, sale and delivery of the Shares, except for (1) such as may be
required under state and foreign securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by you (as to which such
counsel need express no opinion) and (2) such as have been made or obtained
under the Act or the rules of the NYSE and PSE.
(viii) To such counsel's knowledge, no person or entity has the right,
by contract or otherwise, to require registration under the Act of shares
of Common Stock or other securities of the Company solely because of the
filing or effectiveness of the Registration Statement.
(ix) The Registration Statement and the Prospectus and any amendments
thereof or supplements thereto (other than the financial statements and
schedules and other financial and statistical data included or incorporated
by reference therein, and the exhibits to the Registration Statement, as to
which no opinion need be rendered) comply as to form in all material
respects with the requirements of the Act and the Regulations. The
documents filed under the Exchange Act and incorporated by reference in the
Registration Statement and the Prospectus or any amendment thereof or
supplement thereto (other than the financial statements and schedules and
other financial and statistical data included or incorporated by reference
therein, as to which no opinion need be rendered), as of the dates they
were so filed, complied as to form in all material respects with the
Exchange Act and the rules and regulations of the Commission thereunder.
(x) The Registration Statement is effective under the Act, and, to the
best knowledge of such counsel, no stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto has
been issued and no proceedings therefor have been initiated or threatened
by the Commission.
In addition, such counsel shall state that it has participated in
conferences with officers and other representatives of the Company,
representatives of the independent certified public accountants of the Company
and you at which the contents of the Registration Statement, the Prospectus and
any amendment thereof or supplement thereto and related matters were discussed
and, although such counsel has not undertaken to investigate or verify
independently, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus or any amendment thereof or supplement thereto
(except as to matters referred to in the last sentence of clause (ii) above), on
the basis of the foregoing nothing has caused such counsel to believe that
either the Registration Statement at the time it became effective (or any
amendment thereof made prior to the Redemption Date, as of the date of such
amendment) contained an untrue statement of material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus as of the date thereof
(or any amendment thereof or supplement thereto made prior to the Redemption
Date, as of the date of such amendment or supplement) contained an untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need express no belief or opinion with respect to the
financial statements and schedules and other financial and statistical data
included therein, and the exhibits to the Registration Statement).
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<PAGE> 12
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States, the
State of California and Delaware corporate law, to the extent it deems proper
and to the extent specified in such opinion, if at all, upon an opinion or
opinions (in form and substance reasonably satisfactory to your counsel) of
other counsel reasonably acceptable to your counsel, familiar with the
applicable laws; and (B) as to matters of fact, to the extent such counsel deems
proper, on certificates of responsible officers and other representatives of the
Company, certificates of public officials, and certificates or other written
statements of officers of departments of various jurisdictions having custody of
documents respecting the corporate existence or good standing of the Company and
its subsidiaries. The opinion of such counsel for the Company shall state that
the opinion of any such other counsel is in form satisfactory to such counsel
and, in his opinion, you and he are justified in relying thereon.
(c) On the Redemption Date, you shall have received the favorable opinion
of counsel to the Canadian subsidiary of the Company listed in Appendix I hereto
("Subject Subsidiary") as to the absence of any pending or threatened litigation
that might result in a judgment or decree having a material adverse effect on
the condition (financial or other), earnings, business or properties of the
Subject Subsidiary, the due incorporation and continuing existence in good
standing under the laws of its jurisdiction of incorporation of the Subject
Subsidiary, the due qualification in and continuing good standing of the Subject
Subsidiary under the laws of each foreign jurisdiction in which it owns or
leases material properties or conducts material business and where such
qualification is required by law, the due authorization and valid issuance of
the outstanding capital stock of each such Subject Subsidiary and the ownership
thereof directly or indirectly by the Company free and clear of any liens,
claims, security interests, the absence (to such counsel's knowledge) of any
outstanding options, warrants or other rights to acquire, by purchase, exchange
or conversion, shares of the capital stock of the Subject Subsidiary and the
absence (to such counsel's knowledge) of any violation, breach or default on the
part of the Subject Subsidiary of or under any agreement, lease or license that
is material to the Company and its subsidiaries taken as a whole.
(d) On the Redemption Date you shall have received a certificate of the
Chief Financial Officer of the Company, dated the date of its delivery, to the
effect that the conditions set forth in Section 8(a) hereof have been satisfied,
that as of the date hereof and as of the date of such certificate the
representations and warranties of the Company set forth in Section 5 hereof are
accurate in all material respects and that as of the date of such certificate
the obligations of the Company to be performed hereunder on or prior thereto
have been duly performed in all material respects.
(e) At the time this Agreement is executed and on the Redemption Date you
shall have received a letter from Arthur Andersen & Co., independent public
accountants for the Company, dated the date of its delivery, addressed to you,
and in form and substance satisfactory to you, to the effect that: (i) they are
independent certified public accountants with respect to the Company within the
meaning of the Act and the applicable Regulations and stating that the answer to
Item 10 of the Registration Statement is correct insofar as it relates to them;
(ii) in their opinion, the financial statements and schedules of the Company
included and incorporated by reference in the Registration Statement and the
Prospectus and covered by their opinions therein comply as to form in all
material respects with the applicable accounting requirements of the Act and the
Regulations and the Exchange Act and the applicable published rules and
regulations of the Commission thereunder; (iii) on the basis of procedures (but
not an examination made in accordance with generally accepted auditing
standards) consisting of a reading of the minutes of meetings and consents of
the stockholders and boards of directors of the Company and its subsidiaries and
the committees of such boards subsequent to December 31, 1992, inquiries of
officers and other employees of the Company and its subsidiaries who have
responsibility for financial and accounting matters of the Company and its
subsidiaries with respect to transactions and events subsequent to December 31,
1992, and other specified procedures and inquiries to a date not more than five
days prior to the date of such letter, nothing has come to their attention that
would cause them to believe that: (A) the unaudited consolidated financial
statements and schedules of the Company contained or incorporated by reference
in the Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the Regulations and the
Exchange Act and the applicable published rules and regulations of the
Commission thereunder or that such unaudited consolidated financial statements
are not fairly presented in conformity with generally accepted
12
<PAGE> 13
accounting principles, except to the extent certain footnote disclosures have
been omitted in accordance with applicable rules of the Commission under the
Exchange Act, applied on a basis substantially consistent with that of the
audited consolidated financial statements included and incorporated by reference
in the Prospectus, (B) with respect to the period subsequent to December 31,
1993 there were, as of the date of the most recent available monthly
consolidated financial statements of the Company and its subsidiaries, if any,
and as of a specified date not more than five days prior to the date of such
letter, any changes in the capital stock or long-term indebtedness of the
Company or any decrease in net current assets or stockholders' equity of the
Company, in each case as compared with the amounts shown in the most recent
balance sheet included and incorporated by reference in the Prospectus, except
for changes or decreases which the Prospectus may disclose have occurred or may
occur or which are set forth in such letter, or (C) that during the period from
December 31, 1993 to the date of the most recent available monthly consolidated
financial statements of the Company and its subsidiaries, if any, and to a
specified date not more than five days prior to the date of such letter, there
was any decrease, as compared with the corresponding period in the prior fiscal
year, in net sales, total or per share net income before cumulative effect of
accounting change or of net income, except for decreases which the Prospectus
may disclose have occurred or may occur or which are set forth in such letter;
and (iv) stating that they have compared specific dollar amounts, numbers of
shares, percentages of revenues and earnings, and other financial information
pertaining to the Company and its subsidiaries set forth in the Prospectus,
which have been specified by you prior to the date of this Agreement, to the
extent that such amounts, numbers, percentages and information may be derived
from the general accounting and financial records of the Company and its
subsidiaries or from schedules furnished by the Company, and excluding any
questions requiring an interpretation by legal counsel, with the results
obtained from the application of specified readings, inquiries and other
appropriate procedures specified by you (which procedures do not constitute an
examination in accordance with generally accepted auditing standards) set forth
in such letter, and found by them to be in agreement.
(f) All proceedings taken in connection with the sale of the Shares as
herein contemplated shall be satisfactory in form and substance to you and to
your counsel, and you shall have received from your counsel a favorable opinion,
dated as of the Redemption Date, with respect to the issuance and sale of the
Shares as you may reasonably require, and the Company shall have furnished to
your counsel such documents as they reasonably may request for the purpose of
enabling them to pass upon such matters.
(g) Prior to the Redemption Date, the Company shall have furnished to you
such further information, certificates and documents as you may reasonably
request.
If any of the conditions specified in this Section 8 shall not have been
fulfilled when and as required by this Agreement, or if any of the certificates,
opinions, written statements or letters furnished to you or to your counsel
pursuant to this Section 8 shall not be in all material respects reasonably
satisfactory in form and substance to you and to your counsel, all of your
obligations hereunder may be canceled by you at, or at any time prior to, the
Redemption Date. Notice of such cancellation shall be given to the Company in
writing, or by telephone, telecopy, telex or telegraph, confirmed in writing.
9. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless you and each person,
if any, who controls you within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, against any and all losses, liabilities, claims,
damages and expenses whatsoever (including but not limited to reasonable
attorneys' fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any claim or litigation, asserted,
commenced or threatened, and any and all amounts paid in settlement of any claim
or litigation), joint or several, to which you or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
or the Prospectus, or in any supplement thereto or amendment thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein (in the case of the Prospectus, in light of the circumstances under
which they were made) not misleading;
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<PAGE> 14
provided, however, that the Company will not be liable in any such case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information with reference to you furnished to
the Company by you expressly for use therein. This indemnity agreement will be
in addition to any liability which the Company may otherwise have, including
under this Agreement.
(b) You agree to indemnify and hold harmless the Company, each of the
directors of the Company, each of the officers of the Company who shall have
signed the Registration Statement, and each other person, if any, who controls
the Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, against any losses, liabilities, claims, damages and expenses
whatsoever (including but not limited to reasonable attorneys' fees and any and
all expenses whatsoever reasonably incurred in investigating, preparing or
defending against any claim or litigation, asserted, commenced or threatened,
and any and all amounts paid in settlement of any claim or litigation), joint or
several, to which the Company or any of them may become subject under the Act,
the Exchange Act or otherwise, insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any amendment thereof or the
Prospectus or any amendment thereof or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein (in
the case of the Prospectus, in light of the circumstances under which they were
made) not misleading, in each case to the extent, but only to the extent, that
any such loss, liability, claim, damage or expense arises out of or is based
upon any untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information with respect to you furnished to the Company by you expressly for
use therein. This indemnity will be in addition to any liability which either of
you otherwise may have, including under this Agreement.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the assertion of any claim or the commencement of any
litigation, such indemnified party shall, if a claim for indemnification in
respect thereof is to be made against the indemnifying party under such
subsection, notify each party against whom indemnification is to be sought in
writing of the assertion or commencement thereof (but the failure so to notify
an indemnifying party shall not relieve it from any liability which it may have
under this Section 9 except to the extent that it has been prejudiced in any
material respect by such failure or from any liability which it may otherwise
have). In case any such litigation is brought against any indemnified party, and
it notifies an indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein, and to the extent it may elect by
written notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party. Notwithstanding the
foregoing, the indemnified party or parties shall have the right to employ its
or their own counsel in any such litigation, but the fees and expenses of such
counsel shall be at the expense of such indemnified party or parties unless (i)
the employment of such counsel shall have been authorized in writing by one of
the indemnifying parties in connection with the defense of such litigation, (ii)
the indemnifying parties shall not have employed counsel to take charge of the
defense of such litigation within a reasonable time after notice of the
commencement thereof, or (iii) such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the
right to direct the defense of such litigation on behalf of the indemnified
party or parties), in any of which events such fees and expenses shall be borne
by the indemnifying parties. The indemnifying party under subsection (a) or (b)
above shall only be liable for the legal expenses of one counsel for all
indemnified parties in each jurisdiction in which any claim or litigation is
brought; provided, however, that the indemnifying party shall be liable for
separate counsel for any indemnified party in a jurisdiction if counsel to the
indemnified parties shall have reasonably concluded that there may be defenses
available to such indemnified party that are different from or additional to
those available to one or more of the other indemnified parties and that
separate counsel for such indemnified party is prudent under the circumstances.
Anything in this subsection to the contrary notwith-
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<PAGE> 15
standing, an indemnifying party shall not be liable for any settlement of any
claim or litigation effected without its written consent; provided, however,
that such consent was not unreasonably withheld.
10. CONTRIBUTION.
In order to provide for contribution in circumstances in which the
indemnification provided for in Section 9 hereof is for any reason held to be
unavailable, the Company and you shall contribute to the aggregate losses,
claims, damages, liabilities and expenses of the nature contemplated by such
indemnification provision (including any investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claims asserted, but after deducting in the case of
losses, claims, damages, liabilities and expenses suffered by the Company, any
contribution received by the Company from persons, other than you, who may also
be liable for contribution, including persons who control the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, officers
of the Company who signed the Registration Statement and directors of the
Company) to which the Company and you may be subject, in such proportion as is
appropriate to reflect the relative benefits received by the Company and you
from the transactions contemplated hereby or, if such allocation is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to above but also the relative fault of the
Company and you in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and you shall be deemed to be in the same proportion as (x) the total proceeds
from the sale of the Shares to you (net of the Take-up Fees but before deducting
expenses) received by the Company bears to (y) the Take-up Fees received by you.
The relative fault of the Company and of you shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or you and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and you agree that it would not be just
and equitable if contribution pursuant to this Section 10 were determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to above. Notwithstanding the
provisions of this Section 10, (i) in no case shall you be required to
contribute any amount in excess of the amount by which the Take-up Fee
applicable to the Shares purchased by you pursuant to this Agreement exceeds the
amount of any damages which you have otherwise been required to pay by reason of
any untrue or alleged untrue statement or omission or alleged omission, and (ii)
no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 10,
each person, if any, who controls you within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act shall have the same rights to
contribution as you, and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to clauses (i) and (ii) of this Section 10. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this Section 10, notify such party or parties from whom contribution may
be sought, but the omission to so notify such party or parties shall not relieve
the party or parties from whom contribution may be sought from any obligation it
or they may have under this Section 10 or otherwise. No party shall be liable
for contribution with respect to any action or claim settled without its written
consent; provided, however, that such written consent was not unreasonably
withheld.
11. SUPPLIED INFORMATION.
The Company and you acknowledge that the statements with respect to the
arrangements with you set forth on the cover page of the Prospectus and under
the caption "Standby Arrangements" in the Prospectus constitute the only
information with reference to you furnished in writing by you expressly for use
in the Registration Statement.
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<PAGE> 16
12. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS.
All representations, warranties and agreements of the Company and you
contained in this Agreement, including the indemnity agreements contained in
Section 9 hereof and the contribution agreements contained in Section 10 hereof,
shall remain operative and in full force and effect regardless of any
investigation made by you or any controlling person of you or by or on behalf of
the Company, any of its officers and directors or any controlling person
thereof, and shall survive delivery of and payment for the Shares to and by you.
The representations contained in Section 5 hereof and the agreements contained
in Sections 7, 9 and 10 hereof shall survive the termination of this Agreement,
including pursuant to Section 13 hereof.
13. EFFECTIVE DATE OF AGREEMENT; TERMINATION.
(a) This Agreement shall become effective when you and the Company shall
have received notification of the effectiveness of the Registration Statement.
Until this Agreement becomes effective as aforesaid, it may be terminated by the
Company by notifying you or by you by notifying the Company.
(b) You shall have the right to terminate this Agreement at any time prior
to the Redemption Date by notice to the Company from you, without liability
(other than with respect to Sections 9 and 10) on your part to the Company if,
on or prior to such date, (i) the Company shall have failed, refused or been
unable to perform in any material respect any agreement on its part to be
performed hereunder, (ii) any other condition to your obligations hereunder in
Section 8 hereof is not fulfilled when and as required in any material respect
or (iii) in your reasonable opinion any material adverse change shall have
occurred since the respective dates as of which information is given in the
Registration Statement or the Prospectus in the condition (financial or other)
of the Company and its subsidiaries taken as a whole, whether or not arising in
the ordinary course of business other than as set forth in the Prospectus.
(c) Any notion of termination pursuant to this Section 13 shall be by
telephone, telex, telephonic facsimile, or telegraph, confirmed in writing by
letter.
14. NOTICES.
All communications hereunder, except as may be otherwise specifically
provided herein, shall be in writing and, if sent to you shall be mailed,
delivered, or telexed, telegraphed or faxed and confirmed in writing to Bear,
Stearns & Co. Inc., 245 Park Avenue, New York, New York 10167, Attention:
Corporate Finance Department (Fax No. (212) 272-3092); and if sent to the
Company, shall be mailed, delivered or telexed, telegraphed or faxed and
confirmed in writing to Pope & Talbot, Inc., 1500 S.W. First Avenue, Portland,
Oregon 97201, Attention: Chief Financial Officer (Fax No.: (503) 220-2722).
15. PARTIES.
This Agreement shall inure solely to the benefit of, and shall be binding
upon, you and the Company and the controlling persons, directors, officers,
employees and agents referred to in Sections 9 and 10 hereof, and their
respective successors and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision contained herein. The
term "successors and assigns" shall not include a purchaser, in its capacity as
such, of Shares from you.
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<PAGE> 17
16. CONSTRUCTION.
This Agreement shall be construed in accordance with the internal laws of
the State of New York.
If the foregoing correctly sets forth the understanding between you and the
Company, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between us.
Very truly yours,
POPE & TALBOT, INC.
By
Name:
Title:
Accepted as of the date
first above written.
BEAR, STEARNS & CO. INC.
By
Name:
Title:
17
<PAGE> 18
APPENDIX I
MATERIAL SUBSIDIARIES
<TABLE>
<CAPTION>
JURISDICTION OF
NAME INCORPORATION
-------------------------------------------------- --------------------
<S> <C> <C>
(1) Pope & Talbot Ltd. British Columbia
(2) Pope & Talbot FSC, Inc. U.S. Virgin Islands
(3) Pope & Talbot Wis., Inc. Delaware
</TABLE>
18
<PAGE> 1
EXHIBIT 5.1
February 17, 1994
Pope & Talbot, Inc.
1500 S.W. First Avenue
Portland, OR 97201
Re: Pope & Talbot, Inc.
Ladies and Gentlemen:
In connection with the registration of 1,538,551 shares of Pope & Talbot,
Inc. Common Stock on a Registration Statement on Form S-3 under the Securities
Act of 1933, as amended, we advise you that, in our opinion, the number of such
shares of Common Stock when, as and if issued and sold in accordance with the
Standby Purchase Agreement dated the date hereof, will be duly authorized,
validly issued and outstanding, and fully paid and nonassessable.
We consent to the reference to our firm under the caption "Legal Opinions"
in the Registration Statement and to the filing of this opinion as an exhibit to
the Registration Statement.
Very truly yours,
BROBECK, PHLEGER & HARRISON
<PAGE> 1
EXHIBIT 20.1
Notice of Redemption
POPE & TALBOT, INC.
HAS CALLED FOR REDEMPTION ALL OF ITS
6% CONVERTIBLE SUBORDINATED DEBENTURES DUE MARCH 1, 2012
ON MARCH 4, 1994
------------------------------------------------------------------------------
THE CONVERSION PRIVILEGE EXPIRES AT 5:00 P.M.
NEW YORK TIME ON FEBRUARY 25, 1994
------------------------------------------------------------------------------
Notice is hereby given that Pope & Talbot, Inc. (the "Company"), pursuant
to the terms of the Indenture dated as of March 1, 1987 between the Company and
Chemical Trust Company of California, as successor trustee, has called for
redemption on March 4, 1994 (the "Redemption Date") all of its 6% Convertible
Subordinated Debentures Due March 1, 2012 (the "Debentures"). The total
redemption price is $1,018.50 for each $1,000 principal amount of Debentures,
computed as described in Paragraph 2 below. Debentures are convertible at any
time prior to 5:00 p.m., New York time, on February 25, 1994 into shares of
Common Stock of the Company ("Shares") at the conversion price described in
Paragraph 1 below. This Notice of Redemption is not intended as a solicitation
or as advice either to convert or sell your Debentures.
ALTERNATIVES AVAILABLE TO HOLDERS OF DEBENTURES
1. CONVERT THE DEBENTURES INTO SHARES AT A CONVERSION PRICE OF $25.94 PER
SHARE (OR 38.55 SHARES FOR EACH $1,000 PRINCIPAL AMOUNT OF DEBENTURES), WITH
CASH IN LIEU OF FRACTIONAL SHARES. The last reported sale price of the Shares on
the New York Stock Exchange Composite Tape on February 16, 1994 was $32.375 per
Share. IF THE HOLDER OF A $1,000 PRINCIPAL AMOUNT DEBENTURE HAD CONVERTED THE
DEBENTURE ON FEBRUARY 16, 1994, SUCH HOLDER WOULD HAVE RECEIVED SHARES (PLUS
CASH IN LIEU OF FRACTIONAL SHARES) HAVING A MARKET VALUE OF $1,248.06. Cash will
be paid for fractional Shares based upon the average of the last reported sale
prices of Shares on the New York Stock Exchange for the 15 consecutive business
days commencing 20 days prior to the date on which the Debentures are received
for conversion by Chemical Trust Company of California, the paying and
conversion agent (the "Paying and Conversion Agent").
2. SURRENDER THE DEBENTURES FOR REDEMPTION AT THE TOTAL REDEMPTION PRICE OF
$1,018.50 FOR EACH $1,000 PRINCIPAL AMOUNT OF DEBENTURES. The total redemption
price represents (i) the redemption price of $1,018.00 plus (ii) accrued and
unpaid interest from March 1, 1994 to the Redemption Date of $.50 for each
$1,000 principal amount of Debentures. Interest on the Debentures will cease to
accrue on and after the Redemption Date.
3. SELL THE DEBENTURES THROUGH BROKERS OR OTHERWISE.
PAYMENT OF ACCRUED INTEREST
The next scheduled interest payment date is March 1, 1994, at which time an
interest payment of $30 per $1,000 principal amount of Debentures will be paid
to holders of record as of February 15, 1994, in respect of interest accrued
from September 1, 1993 to and including February 28, 1994. SUCH INTEREST PAYMENT
WILL BE MADE ON MARCH 1, 1994 TO SUCH HOLDERS OF RECORD REGARDLESS OF WHETHER
SUCH HOLDERS ELECT TO CONVERT THEIR DEBENTURES INTO SHARES PRIOR TO SUCH TIME.
FACTORS TO BE CONSIDERED
Debentures are convertible into Shares until 5:00 p.m., New York time, on
February 25, 1994, at a conversion price of $25.94 per Share (or 38.55 Shares
for each $1,000 principal amount of Debentures). Debentures to be converted must
be received by the Paying and Conversion Agent prior to 5:00 p.m., New York
time, on February 25, 1994.
THE LAST REPORTED SALE PRICE OF THE SHARES ON FEBRUARY 16, 1994 WAS $32.375
PER SHARE. AS LONG AS THE MARKET PRICE PER SHARE IS EQUAL TO OR GREATER THAN
$26.42, HOLDERS OF DEBENTURES WILL RECEIVE, UPON CONVERSION, SHARES (PLUS CASH
IN LIEU OF FRACTIONAL SHARES) HAVING A MARKET VALUE GREATER THAN THE TOTAL
AMOUNT OF CASH RECEIVABLE UPON REDEMPTION.
<PAGE> 2
TAX CONSEQUENCES
Holders of Debentures will realize taxable gain or loss upon a redemption
of the Debentures, but will generally not recognize gain or loss upon
conversion. Holders of Debentures should consult their tax advisors as to the
federal, state and local tax treatment applicable to them upon conversion or
redemption of the Debentures.
------------------------
MANNER OF CONVERSION OR REDEMPTION
Holders of Debentures may convert their Debentures or obtain payment of the
total redemption price upon surrender of their Debenture Certificates, by hand
or by mail, to the Paying and Conversion Agent at 50 California Street, Tenth
Floor, San Francisco, California 94111 or in care of Chemical Bank, 55 Water
Street, North Building, Corporate Trust Securities Window, Second Floor, New
York, New York 10041. Holders of Debentures who elect to convert must satisfy
the requirements set forth in the Debenture Certificate, which requirements are
also set forth in the Letter of Transmittal. Debenture holders who wish to
convert, but whose Debenture Certificates are not immediately available or who
cannot deliver Debenture Certificates and all other documents required by the
Letter of Transmittal prior to 5:00 p.m., New York time, February 25, 1994 must
elect to convert their Debentures according to the instructions for guaranteed
delivery set forth in the Letter of Transmittal. Questions and requests for
assistance or for additional copies of any documents should be directed to the
Paying and Conversion Agent at (415) 954-9539 or (415) 954-9543 or the Investor
Relations Department of the Company at (503) 228-9161.
February 17, 1994
<PAGE> 1
EXHIBIT 20.2
If you wish to convert your Debentures by means of this Letter of
Transmittal, then your Debenture Certificate(s) and this Letter of Transmittal
must be RECEIVED by the Paying and Conversion Agent listed below PRIOR TO 5:00
P.M., NEW YORK TIME, ON FEBRUARY 25, 1994. This Letter of Transmittal is to be
used only if Debenture Certificates are to be forwarded herewith. Debenture
holders whose Debenture Certificates are not immediately available or who cannot
deliver their Debenture Certificates and all other documents required hereby to
the Paying and Conversion Agent prior to 5:00 p.m., New York time, on February
25, 1994 must elect to convert their Debenture(s) according to the instructions
for guaranteed delivery set forth in Instruction 7 on the reverse.
POPE & TALBOT, INC.
LETTER OF TRANSMITTAL
(TO ACCOMPANY 6% CONVERTIBLE SUBORDINATED DEBENTURES DUE MARCH 1, 2012)
PAYING AND CONVERSION AGENT:
By Mail or By Hand
<TABLE>
<C> <S> <C>
Chemical Trust Company of California Chemical Trust Company of California
50 California Street c/o Chemical Bank
10th Floor or 55 Water Street, North Building
San Francisco, CA 94111 Corporate Trust Securities Window, 2nd Floor
(415) 954-9561 New York, NY 10041
(415) 954-9561
</TABLE>
Ladies and Gentlemen:
Enclosed herewith are 6% Convertible Subordinated Debenture(s) Due March 1,
2012 (the "Debentures") of Pope & Talbot, Inc. (the "Company") numbered and
registered as listed below:
ITEM A.
- --------------------------------------------------------------------------------
IF THE NAME(S) AND ADDRESS SHOWN ARE NOT CORRECT,
PLEASE INDICATE ANY CHANGES NECESSARY.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
-- DEBENTURE HOLDERS PLEASE FILL IN --
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------
NAME(S) AND ADDRESS OF REGISTERED HOLDER(S) DEBENTURE PRINCIPAL
(MUST BE EXACTLY AS NAME(S) APPEAR(S) ON DEBENTURE) NUMBER(S) AMOUNT
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
TOTAL PRINCIPAL
AMOUNT
- -----------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 2
ITEM B.
The above Debentures are surrendered for the action indicated below.
<TABLE>
<S> <C>
1. / / CONVERSION into shares of Common Stock of the Company ("Shares") at the conversion
price of $25.94 per Share (or 38.55 Shares per $1,000 principal amount of Debentures),
with cash in lieu of fractional Shares. (See Instruction 2.) Complete Items C and E.
NOTE: AS LONG AS THE MARKET PRICE PER SHARE IS GREATER THAN OR EQUAL TO $26.42, HOLDERS
OF DEBENTURES WILL RECEIVE, UPON CONVERSION, SHARES (PLUS CASH IN LIEU OF FRACTIONAL
SHARES) HAVING A MARKET VALUE GREATER THAN THE TOTAL AMOUNT OF CASH RECEIVABLE
UPON REDEMPTION.
2. / / REDEMPTION at a price of $1,018.00 per $1,000 principal amount of Debentures, plus
accrued and unpaid interest to the Redemption Date of $.50, for a total redemption
price of $1,018.50 per $1,000 principal amount of Debentures. (See Instruction 3.)
Complete Items D and E.
3. / / PARTIAL CONVERSION/PARTIAL REDEMPTION (if this box is checked you must attach
additional instructions indicating which Debentures you wish to convert into Shares and
which Debentures you wish to have redeemed). If this box is checked and no additional
instructions are provided, the delivery of Debentures prior to 5:00 p.m., New York
time, on February 25, 1994, will be treated by the Paying and Conversion Agent as
instructions to convert such Debentures into Shares.
/ / CHECK HERE IF DEBENTURE CERTIFICATES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE PAYING AND CONVERSION AGENT.
IF NO BOX IS CHECKED AND THE ABOVE DEBENTURES ARE RECEIVED BY THE PAYING AND CONVERSION
AGENT PRIOR TO 5:00 P.M., NEW YORK TIME, ON FEBRUARY 25, 1994, SUCH DEBENTURES WILL BE
DEEMED SURRENDERED FOR CONVERSION INTO SHARES. IF ANY DEBENTURES ARE RECEIVED AFTER
THAT TIME, SUCH DEBENTURES WILL BE REDEEMED.
</TABLE>
2
<PAGE> 3
ITEM C.
CONVERSION
-- DEBENTURE HOLDERS PLEASE COMPLETE --
1. If the stock certificate(s) evidencing Shares of Common Stock and/or check
(if any) are to be issued in the name of a person other than as indicated in
Item A above, fill in this space. See Instructions 1, 4 and 5.
Issue to:
Name:
Type or Print
Address
Zip Code
Social Security Number or
Taxpayer I.D. Number
2. If stock certificate(s) evidencing Shares of Common Stock and/or check (if
any) are to be mailed to an address other than as indicated in Item A above,
fill in this space. See Instruction 1.
Mail to:
Name
Type or Print
Address
Zip Code
ITEM D.
REDEMPTION
-- DEBENTURE HOLDERS PLEASE COMPLETE --
1. If the check is to be issued to a person other than as indicated in Item A
above, fill in this space. See Instructions 1, 4, and 5.
Issue to:
Name:
Type or Print
Address
Zip Code
Social Security Number or
Taxpayer I.D. Number
2. If the check is to be mailed to an address other than as indicated in Item A
above, fill in this space. See Instruction 1.
Mail to:
Name
Type or Print
Address
Zip Code
3
<PAGE> 4
ITEM E.
SIGNATURE
The signature(s) on this Letter of Transmittal must correspond exactly with the
name(s) of the (1) registered owners of the Debenture(s) surrendered, or (2)
persons to whom such Debenture(s) has (have) been properly assigned or
transferred. If stock certificate(s) are to be issued in a name other than that
of the registered owner of the Debenture(s) surrendered or persons to whom such
Debenture(s) has (have) been properly assigned or transferred, or if a check is
to be made payable to a different name, the signature of the holder must be
guaranteed by either a bank or trust company, a broker or dealer which is a
member of the National Association of Securities Dealers, Inc., or by a member
of a national securities exchange. See Instructions 1, 4 and 5.
Dated:
Signature:
Signature:
Telephone:
Social Security Number or Taxpayer I.D. Number:
- --------------------------------------------------------------------------------
Signature Guarantee:
Dated:
- --------------------------------------------------------------------------------
(Name of Firm Issuing Guarantee)
- --------------------------------------------------------------------------------
(Signature of Officer)
- --------------------------------------------------------------------------------
(Title of Officer Signing This Guarantee)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Address of Guaranteeing Firm)
4
<PAGE> 5
INSTRUCTIONS
1. General
The Debenture(s), together with the signed and completed Letter of
Transmittal and any additional material (see Instruction 2 below), should be
mailed in the enclosed addressed envelope or otherwise delivered to Chemical
Trust Company of California, the Paying and Conversion Agent, at the address
indicated on the front of this Letter of Transmittal. If mail is used, it is
recommended that registered mail, properly insured, be used as a precaution
against loss. Consideration should be given to using some form of express
delivery service as the conversion alternative discussed below expires at 5:00
p.m., New York time, on February 25, 1994. The method of transmitting the
Debenture(s) and the Letter of Transmittal is at the option and risk of the
Debenture holder.
ITEMS A, B AND E OF THIS LETTER OF TRANSMITTAL MUST BE COMPLETED IN ALL
CASES.
2. If You Wish to Convert
If you wish to convert your Debentures into Shares of Common Stock, then
prior to 5:00 p.m., New York time, on February 25, 1994 you must deposit with
the Paying and Conversion Agent (i) the Debenture(s), (ii) this Letter of
Transmittal, duly completed and (iii) any other documents required by this
Letter of Transmittal. If your Debenture Certificate(s) are not immediately
available, please see Instruction 7.
THE METHOD OF DELIVERY OF ALL REQUIRED DOCUMENTS IS AT THE ELECTION AND
RISK OF THE TENDERING DEBENTURE HOLDER; IF DELIVERY IS BY MAIL, REGISTERED MAIL
WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS STRONGLY RECOMMENDED.
If the stock certificate(s) and check in lieu of fractional Shares, if any,
are to be issued in the same name(s) as that in which the surrendered
Debenture(s) are registered and mailed to the same address as given in Item A,
complete Items A, B and E.
If the stock certificate(s) and check in lieu of fractional Shares, if any,
are to be issued in the name or names of a different person(s), see Instructions
4, 5 and 6 and complete Items A, B, C and E.
If the stock certificate(s) and check in lieu of fractional Shares, if any,
are to be mailed to an address different from that given in Item A, complete
Items A, B, C and E.
No fractional Shares will be issued upon any conversion. Instead, a cash
payment for fractional Shares will be made on the basis of the average of the
last reported sale prices of the Common Stock on the New York Stock Exchange for
the 15 consecutive business days commencing 20 days prior to that on which your
duly completed Letter of Transmittal and surrendered Debenture(s) are received
by the Paying and Conversion Agent.
NOTE: AS LONG AS THE MARKET PRICE PER SHARE IS GREATER THAN OR EQUAL TO
$26.42, HOLDERS OF DEBENTURES WILL RECEIVE, UPON CONVERSION, SHARES (PLUS CASH
IN LIEU OF FRACTIONAL SHARES) HAVING A MARKET VALUE GREATER THAN THE TOTAL
AMOUNT OF CASH RECEIVABLE UPON REDEMPTION.
3. If You Wish Your Debenture(s) Redeemed
If you wish your Debenture(s) to be redeemed by the Company for cash,
deliver your Debenture Certificate(s) and this Letter of Transmittal, duly
completed, to the Paying and Conversion Agent. A check for $1,018.50 per $1,000
principal amount of Debentures will be sent to you when the Debenture
Certificate(s) have been received by the Paying and Conversion Agent, but in no
event earlier than March 4, 1994.
If the check is to be issued in the same name(s) as that in which the
surrendered Debentures are registered and mailed to the same address as given in
Item A, complete Items A, B and E.
If the check is to be issued in a different name or names, see Instructions
4 and 5 and complete Items A, B, D and E.
If the check is to be mailed to an address different from that given in
Item A, complete Items A, B, D and E.
5
<PAGE> 6
4. Certificate or Check to Be Issued in a Different Name
If a stock certificate evidencing Shares or a check is to be issued in the
name of a person other than that of the registered owner of the Debentures, the
Debentures must be properly endorsed or be accompanied by appropriate powers,
properly executed by the registered owner(s), and the signature(s) to the
endorsement or on the stock power must be guaranteed by a commercial bank or
trust company, a broker or dealer which is a member of the National Association
of Securities Dealers, Inc. or by a member of a national securities exchange.
5. Signature by Fiduciary or Other Than Registered Holder
If the Letter of Transmittal is signed in Item E by an executor,
administrator, trustee, guardian, attorney or the like, the Letter of
Transmittal and Debenture Certificate(s) must be accompanied by evidence,
satisfactory to the Paying and Conversion Agent and the Company, of the
authority of such person to sign the Letter of Transmittal.
If the Letter of Transmittal is signed in Item E by a person other than the
registered holder, who is not a person described in the preceding paragraph, the
Debenture Certificate(s) must be properly endorsed or be accompanied by
appropriate powers, properly executed by the registered holder(s), and the
signature(s) to the endorsement or on the stock power must be guaranteed by a
commercial bank or trust company, a broker or dealer which is a member of the
National Association of Securities Dealers, Inc. or by a member of a national
securities exchange.
6. Joint Holders or Certificates Registered in Different Names
If Debentures are tendered by joint holders or owners, all such persons
must sign the Letter of Transmittal in Item E. If Debentures are registered in
different names or forms of ownership, separate Letters of Transmittal must be
completed, signed and returned for each different registration.
7. Notice of Guaranteed Delivery
Debenture holders wishing to convert their Debentures whose Debenture
Certificates are not immediately available or who cannot deliver their Debenture
Certificates and all other documents required hereby to the Paying and
Conversion Agent on or prior to 5:00 p.m., New York time, on February 25, 1994
may elect to convert their Debentures pursuant to the following procedures: (i)
such election to convert must be made by or through a member firm of a
registered national securities exchange, a member of the National Association of
Securities Dealers, Inc. or a commercial bank or trust company having an office,
branch or agency in the United States, (ii) a properly completed and duly
executed Notice of Guaranteed Delivery substantially in the form provided by the
Company must be received by the Paying and Conversion Agent on or prior to 5:00
p.m., New York time, on February 25, 1994, and (iii) the Debenture Certificates
for all tendered Debentures in proper form for transfer, together with a
properly completed and duly executed Letter of Transmittal or facsimile thereof
and all other documents required by this Letter of Transmittal, must be received
by the Paying and Conversion Agent within five business days after the date such
Notice of Guaranteed Delivery is received by the Paying and Conversion Agent.
Notwithstanding the foregoing, Shares will be issued in respect of Debentures
surrendered for conversion only after timely receipt by the Paying and
Conversion Agent of the Debenture Certificates, a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) and any other documents
required by the Letter of Transmittal.
8. Transfer Taxes
It is not anticipated that any transfer taxes will be payable in connection
with the issuance of certificates evidencing Shares upon conversion of the
Debentures. If, however, it should develop that such taxes are payable, the
converting holder will be charged.
9. Lost or Destroyed Debenture Certificate(s)
If your Debenture Certificate(s) have been either lost or destroyed, notify
the Paying and Conversion Agent of this fact immediately by telephone at (415)
954-9561 or by mail at the address set forth on the front of this Letter of
Transmittal. You will then be instructed as to the steps you must take in order
to convert or have redeemed the
6
<PAGE> 7
Debentures that you own. This form and related documents cannot be processed
until the missing Debenture Certificate(s) have been replaced. You must act
immediately if you wish to safeguard your rights.
10. Questions and Additional Copies
All questions regarding appropriate procedures for converting Debentures
and requests for additional copies of the Notice of Redemption, Letter of
Transmittal and Notice of Guaranteed Delivery should be directed to the Paying
and Conversion Agent at the address and telephone number set forth on the front
of this Letter of Transmittal.
11. Payment of Accrued Interest
The next scheduled interest payment date is March 1, 1994, at which time an
interest payment of $30 per $1,000 principal amount of Debentures will be paid
to holders of record as of February 16, 1994, in respect of interest accrued
from September 1, 1993 to and including February 28, 1994. Such payment will be
made to such holders of record on March 1, 1994 regardless of whether such
holders elect to convert their Debentures into Shares prior to such time.
12. Substitute Form W-9
Each Debenture holder is required to provide the Paying and Conversion
Agent with a correct taxpayer identification number ("TIN") on Substitute Form
W-9 which is provided under "Important Tax Information" below, and to indicate
that the Debenture holder is not subject to backup withholding by checking the
box in Part 2 of the form. Failure to provide the information on the form may
subject the Debenture holder to 31 percent (31%) backup withholding on the
payments made to the Debenture holder or other payee with respect to Debentures
redeemed or amounts paid for fractional Shares. The box in Part 3 of the form
may be checked if the Debenture holder has not been issued a TIN and has applied
for a TIN or intends to apply for a TIN in the near future. If the box in Part 3
is checked and the Paying and Conversion Agent is not provided with a TIN within
sixty (60) days, the Paying and Conversion Agent will withhold 31 percent (31%)
on all such payments thereafter until a TIN is provided.
IMPORTANT TAX INFORMATION
Under federal income tax law, a Debenture holder whose Debentures are
redeemed or who receives cash for fractional shares is required by law to
provide the Paying and Conversion Agent with such Debenture holder's correct TIN
on Substitute Form W-9 below. If such Debenture holder is an individual, the TIN
is his or her social security number. If the Paying and Conversion Agent is not
provided with the correct TIN, the Debenture holder or other payee may be
subject to a $50 penalty imposed by the Internal Revenue Service. In addition,
payments that are made to such Debenture holder or other payee with respect to
Debentures redeemed or with respect to amounts paid for fractional shares may be
subject to backup withholding.
Certain Debenture holders (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, that Debenture holder must submit a statement, signed under
penalties of perjury, attesting to that individual's exempt status. Such
statements can be obtained from the Paying and Conversion Agent.
If backup withholding applies, the Paying and Conversion Agent is required
to withhold 31 percent (31%) of any such payments made to the Debenture holder
or other payee. Backup withholding is not an additional tax. Rather, the tax
liability of persons subject to backup withholding will be reduced by the amount
of tax withheld. If withholding results in an overpayment of taxes, a refund may
be obtained.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments made to a Debenture holder or
other payee, the Debenture holder is required to notify the Paying and
Conversion Agent of the Debenture holder's correct TIN by completing the form
below, certifying that the TIN provided on Substitute Form W-9 is correct (or
that such Debenture holder is awaiting a TIN) and that (1) the Debenture holder
has not been notified by the Internal Revenue Service that the Debenture holder
is subject to backup withholding as a result of failure to report all interest
or dividends or (2) the Internal Revenue Service has notified the Debenture
holder that the Debenture holder is no longer subject to backup withholding.
7
<PAGE> 8
WHAT NUMBER TO GIVE THE PAYING AND CONVERSION AGENT
The Debenture holder is required to give the Paying and Conversion Agent
the TIN (e.g., social security number or employer identification number) of the
registered holder of the Debentures.
PAYER'S NAME:
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE Social Security Number
FORM W-9 BOX AT RIGHT AND CERTIFY BY SIGNING AND OR
DATING BELOW Employer Identification
Number
-----------------------------------------------------------------------
PART 2 -- Check the box if you are NOT subject to backup withholding
Department of the under the provisions of Section 3406(a)(1)(c) of the Internal Revenue
Treasury Code because (1) you have not been notified that you are subject to
Internal Revenue backup withholding as a result of failure to report all interest or
Service dividends or (2) the Internal Revenue Service has notified you that
PAYER'S REQUEST FOR you are no longer subject to backup withholding. / /
TAXPAYER
IDENTIFICATION NUMBER
(TIN)
- ------------------------------------------------------------------------------------------------
CERTIFICATION -- UNDER PENALTIES OF PERJURY, I CERTIFY PART 3 --
THAT THE INFORMATION PROVIDED ON THIS FORM IS TRUE, Awaiting TIN
CORRECT, AND COMPLETE.
SIGNATURE DATE
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE CALL. PLEASE REVIEW
ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
8
<PAGE> 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
FOR THIS TYPE OF SOCIAL SECURITY
ACCOUNT: NUMBER OF --
<S> <C>
GIVE THE EMPLOYER
FOR THIS TYPE OF IDENTIFICATION
ACCOUNT: NUMBER OF --
- ------------------------
1. An individual's The individual
account
2. Two or more The actual owner of the
individuals (joint account or, if combined
account) funds, any one of the
individuals(1)
3. Husband and wife The actual owner of the
(joint account) account or, if joint
funds, either person(1)
4. Custodian account of The minor(2)
a minor (Uniform Gift
to Minors Act)
5. Adult and minor The adult or, if the
(joint account) minor is the only
contributor, the
minor(1)
6. Account in the name The ward, minor or
of guardian or incompetent person(3)
committee for a
designated ward,
minor or incompetent
person
7. a. The usual The grantor-trustee(1)
revocable savings
trust account
(grantor is also
trustee)
b. So-called trust The actual owner(1)
account that is not
a legal or valid
trust under State
law
8. Sole proprietorship The owner(4)
account
9. A valid trust, The legal entity (Do not
estate, or pension furnish the identifying
trust 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, The organization
charitable or
educational
organization account
12. Partnership account The partnership
held in the name of
the business
13. Association, club or The organization
other tax-exempt
organization
14. A broker or The broker or nominee
registered nominee
15. Account with the The public entity
Department of
Agriculture in the
name of a public
entity (such as a
State or local
government, school
district, or prison)
that receives
agricultural program
payments
</TABLE>
- --------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) 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.
9
<PAGE> 10
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- 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 non-exempt 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 (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to non-resident aliens.
- Payments on tax-free covenant bonds under 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, 6041A(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 includable 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.
10
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EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our reports
and to all references to our Firm included in or made a part of this
registration statement.
/s/ ARTHUR ANDERSEN & CO.
Portland, Oregon,
February 14, 1994
