<PAGE>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
SCHEDULE 14D-1
(Amendment No. 11)
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
------------
ACME-CLEVELAND CORPORATION
(Name of Subject Company)
WEC ACQUISITION CORPORATION
DANAHER CORPORATION
(Bidders)
COMMON SHARES, PAR VALUE $1 PER SHARE
(INCLUDING THE ASSOCIATED RIGHTS)
SERIES A CONVERTIBLE PREFERRED SHARES,
WITHOUT PAR VALUE
(Title of Class of Securities)
004626107
(CUSIP Number of Class of Securities)
------------
PATRICK W. ALLENDER
WEC ACQUISITION CORPORATION
C/O DANAHER CORPORATION
1250 24TH STREET, N.W., SUITE 800
WASHINGTON, D.C. 20037
TELEPHONE: (202) 828-0850
(Name, address and telephone number of person authorized
to receive notices and communications on behalf of Bidders)
------------
Copy to:
MORRIS J. KRAMER, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
919 THIRD AVENUE
NEW YORK, N.Y. 10022
TELEPHONE: (212) 735-3000
CALCULATION OF FILING FEE
===============================================================================
<TABLE>
<CAPTION>
TRANSACTION AMOUNT OF
VALUATION* FILING FEE
- -------------------------------------------------------------------------------
<S> <C>
$202,437,720 $40,487.54
</TABLE>
===============================================================================
* For purposes of calculating fee only. This amount assumes the
purchase at a purchase price of $30 per Share of an aggregate of
6,747,924 Shares, consisting of 6,430,078 Common Shares, 161,374
Preferred Shares and 461,472 Shares issuable upon conversion of
Options (less 305,000 shares owned by Parent or any of its
affiliates). The amount of the filing fee, calculated in accordance
with Regulation 240.0-11 of the Securities Exchange Act of 1934, as
amended, equals 1/50th of one percent of the value of Shares
purchased.
[X] Check box if any part of the fee is offset as provided by Rule
0-11(A)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: $40,487.54 Filing Party: WEC Acquisition Corporation
Danaher Corporation
Form or Registration No.: Schedule 14D-1 Date Filed: June 3, 1996
Amendment No. 10
Tender Offer
Statement
================================================================================
<PAGE>
WEC Acquisition Corporation (the "Purchaser"), a Delaware corporation
and a wholly owned subsidiary of Danaher Corporation, a Delaware corporation
("Parent"), and Parent hereby amend and supplement their Tender Offer Statement
on Schedule 14D-1, as heretofore amended (the "Schedule 14D-1"), relating to the
Purchaser's offer to purchase all outstanding common shares, par value $1 per
share (including the associated rights), and all outstanding Series A
Convertible Preferred Shares, without par value (collectively, the "Shares"), of
Acme-Cleveland Corporation, an Ohio corporation (the "Company"). Capitalized
terms used herein and not otherwise defined shall have the meanings set forth in
the Schedule 14D-1 or the Offer to Purchase filed as an exhibit thereto.
ITEM 1. SECURITY AND SUBJECT COMPANY
Parent and the Company have entered into an Agreement and Plan of
Merger, dated as of May 31, 1996 (the "Merger Agreement"), which provides,
among other things, that the price to be paid in the Purchaser's tender offer
(the "Offer") be increased to $30 in cash per outstanding Share. The Merger
Agreement also provides for a follow-up merger of the Company and the Purchaser
at $30 per Share, pursuant to which each outstanding Share (other than Shares
owned by Parent or any subsidiary of Parent, Shares held as treasury shares by
the Company, and Shares owned by dissenting shareholders who perfect any
available dissenters' rights under Ohio law), will be converted into the right
to receive $30 per Share in cash. The Offer and the Merger Agreement are more
fully described in the Supplement, dated June 5, 1996 (the "Supplement"), to the
Purchaser's Offer to Purchase, dated March 7, 1996. A copy of the Supplement is
attached hereto as Exhibit (g)(14) and is incorporated herein by reference. The
information set forth in the Introduction and Section 1 of the Supplement is
incorporated herein by reference.
The information set forth in Exhibits (g)(15), (g)(16), (g)(17), (g)(18)
and (g)(19) is incorporated herein by reference.
ITEM 3. PAST CONTRACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY
(b) The information set forth in Section 7 of the Supplement is incorporated
herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
(a) The information set forth in Section 6 of the Supplement is incorporated
herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER
(a) - (c); (e) The information set forth in the Introduction and Section 8
of the Supplement is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in Section 8 of the Supplement is incorporated
herein by reference.
ITEM 10. ADDITIONAL INFORMATION
(a) The information set forth in Section 8 of the Supplement is incorporated
herein by reference.
(b); (e) The information set forth in Section 10 of the Supplement is
incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS
(g)(14) Supplement to the Offer to Purchase dated June 5, 1996.
(15) Revised Letter of Transmittal.
(16) Revised Letter to Brokers, Dealers, Banks, Trust Companies and
Other Nominees.
(17) Revised Letter to Clients for use by Brokers, Dealers, Banks,
Trust Companies and Other Nominees.
(18) Revised Notice of Guaranteed Delivery.
(19) Merger Agreement, dated May 31, 1996, among Parent, the Purchaser
and the Company.
2
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Statement is true, complete and
correct.
Dated: June 5, 1996
WEC ACQUISITION CORPORATION
By: /s/ C. Scott Brannan
-----------------------------------
Name: C. Scott Brannan
Title: Vice President Administration
and Controller
DANAHER CORPORATION
By: /s/ C. Scott Brannan
-----------------------------------
Name: C. Scott Brannan
Title: Vice President and Secretary
3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER EXHIBIT NAME NUMBER
- ----------- ------------------------------------------------------------------------------------ ----------
<S> <C> <C>
(g)(14) Supplement to the Offer to Purchase dated June 5, 1996.
(g)(15) Revised Letter of Transmittal.
(g)(16) Revised Letter to Brokers, Dealers, Banks, Trust Companies and Other Nominees.
(g)(17) Revised Letter to Clients for use by Brokers, Dealers, Banks, Trust Companies
and Other Nominees.
(g)(18) Revised Notice of Guaranteed Delivery.
(g)(19) Merger Agreement, dated May 31, 1996, among Parent, the Purchaser and the Company.
</TABLE>
<PAGE>
SUPPLEMENT TO THE OFFER TO PURCHASE
WEC ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
DANAHER CORPORATION
HAS AMENDED ITS OFFER TO INCREASE THE CASH PURCHASE PRICE FOR
ALL OUTSTANDING COMMON SHARES (INCLUDING THE ASSOCIATED RIGHTS) AND
ALL SERIES A CONVERTIBLE PREFERRED SHARES
OF
ACME-CLEVELAND CORPORATION
TO
$30 NET PER SHARE
- -------------------------------------------------------------------------------
THE OFFER HAS BEEN EXTENDED AND THE OFFER AND WITHDRAWAL
RIGHTS WILL NOW EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
TUESDAY, JULY 2, 1996, UNLESS THE OFFER IS FURTHER EXTENDED.
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER, THE MERGER
AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT, HAS
DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO AND IN THE
BEST INTERESTS OF THE COMPANY'S SHAREHOLDERS, AND RECOMMENDS THAT THE
SHAREHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES.
----------------
The Offer is conditioned on, among other things, (1) there being validly
tendered a number of Shares which, when added to the Shares beneficially
owned by Parent and any of its affiliates, constitutes at least a majority of
the Shares outstanding on a fully diluted basis immediately prior to the
expiration of the Offer, and (2) the acquisition of Shares pursuant to the Offer
being approved by the shareholders of the Company pursuant to the Ohio Control
Share Acquisition Law. See Section 9 of this Supplement. The Offer is not
conditioned on the receipt of financing.
----------------
IMPORTANT
Any shareholder desiring to tender all or any portion of such
shareholder's Shares should either (i) complete and sign the Letter of
Transmittal (or a facsimile thereof) in accordance with the instructions in
the Letter of Transmittal, have such shareholder's signature thereon
guaranteed if required by Instruction 1 to the Letter of Transmittal, mail or
deliver the Letter of Transmittal (or such facsimile) and any other required
documents to the Depositary and either deliver the certificates for such
Shares to the Depositary along with the Letter of Transmittal (or facsimile)
or deliver such Shares pursuant to the procedure for book-entry transfer set
forth in Section 2 of the Offer to Purchase or (ii) request such
shareholder's broker, dealer, commercial bank, trust company or other nominee
to effect the transaction for such shareholder. A shareholder having Shares
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee must contact such broker, dealer, commercial bank, trust
company or other nominee if such shareholder desires to tender such Shares.
If a shareholder desires to tender Shares and such shareholder's
certificates for Shares are not immediately available or the procedures for
book-entry transfer cannot be completed on a timely basis, or time will not
permit all required documents to reach the Depositary prior to the Expiration
Date, such shareholder's tender may be effected by following the procedure
for guaranteed delivery set forth in Section 2 of the Offer to Purchase.
Questions and requests for assistance may be directed to Merrill Lynch,
Pierce, Fenner & Smith Incorporated, the Dealer Manager, or to D.F. King &
Co., Inc. the Information Agent, at their respective addresses and telephone
numbers set forth on the back cover of this Supplement. Additional copies of
this Supplement, the Offer to Purchase, the Letter of Transmittal, the Notice
of Guaranteed Delivery and other related materials may be obtained from the
Information Agent or from brokers, dealers, or commercial banks and trust
companies.
The Dealer Manager for the Offer is:
----------------
MERRILL LYNCH & CO.
June 5, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Introduction .................................................... 1
1. Amended Terms of the Offer .................................. 2
2. Procedures for Accepting the Offer and Tendering Shares .... 2
3. Price Range of Shares; Dividends ............................ 2
4. Certain Information Concerning the Company .................. 2
5. Certain Information Concerning Parent ....................... 3
6. Source and Amount of Funds .................................. 4
7. Background of the Offer and Contacts with the Company ...... 4
8. Merger Agreement ............................................ 6
9. Certain Conditions of the Offer ............................. 13
10. Certain Legal Matters ....................................... 14
11. Miscellaneous ............................................... 14
</TABLE>
<PAGE>
To the Holders of Shares of
ACME-CLEVELAND CORPORATION:
The following information amends and supplements the Offer to Purchase,
dated March 7, 1996 (the "Offer to Purchase"), of WEC Acquisition Corporation
(the "Purchaser"), a Delaware corporation and a wholly owned subsidiary of
Danaher Corporation, a Delaware corporation ("Parent"), pursuant to which the
Purchaser is offering to purchase any and all outstanding common shares, $1 par
value per share, including the associated rights (the "Rights") issued pursuant
to the Rights Agreement, dated as of March 11, 1996, as amended, between the
Company (as defined below) and Society National Bank, as Rights Agent (the
"Common Shares"), and all outstanding Series A Convertible Preferred Shares,
without par value (the "Preferred Shares" and, together with the Common Shares,
the "Shares"), of Acme-Cleveland Corporation, an Ohio corporation (the
"Company"). The Purchaser has increased the price to be paid in the Offer to
$30 per Share, net to the seller in cash without interest thereon (the "Offer
Price"), upon the terms and subject to the conditions set forth in this
Supplement, the Offer to Purchase and the related Letter of Transmittal (which,
as amended from time to time, collectively constitute the "Offer").
This Supplement should be read in conjunction with the Offer to Purchase.
Except as otherwise set forth in this Supplement, the terms and conditions
previously set forth in the Offer to Purchase remain applicable in all
respects to the Offer. Unless the context requires otherwise, terms not
defined herein have the meanings ascribed to them in the Offer to Purchase.
Parent, the Purchaser and the Company have entered into an Agreement and
Plan of Merger dated as of May 31, 1996 (the "Merger Agreement"), which
provides for, among other things, an increase in the price per Share to be
paid pursuant to the Offer from $27 per Share to $30 per Share, net to the
seller in cash, without interest thereon, and the merger of the Purchaser with
and into the Company (the "Merger") following the purchase of Shares pursuant
to the Offer. In the Merger, each outstanding Share (other than Shares owned
by Parent or any subsidiary of Parent, Shares held as treasury shares by the
Company, and Shares owned by dissenting shareholders who perfect any available
dissenters' rights under Ohio law), will be converted into the right to receive
$30 per Share in cash.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER, THE MERGER
AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT, HAS
DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO AND IN THE
BEST INTERESTS OF THE COMPANY'S SHAREHOLDERS, AND RECOMMENDS THAT THE
SHAREHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES.
The Offer is conditioned on, among other things, (1) there being validly
tendered a number of Shares which, when added to the Shares beneficially
owned by Parent and any of its affiliates, constitutes at least a majority of
the Shares outstanding on a fully diluted basis immediately prior to the
expiration of the Offer (the "Minimum Condition") and (2) the acquisition of
Shares pursuant to the Offer being approved by the shareholders of the Company
pursuant to the Ohio Control Share Acquisition Law (the "Control Share
Condition"). See Section 9 of this Supplement.
Shareholders who have previously validly tendered their Shares pursuant to
the Offer are not required to take any further action, except as may be
required by the guaranteed delivery procedure if such procedure was utilized.
If Shares are accepted for payment and paid for by the Purchaser pursuant to
the Offer, such shareholders will receive, subject to the conditions of the
Offer, the increased cash price of $30 net per Share in cash. See Section 4
of the Offer to Purchase for the procedures for withdrawing Shares tendered
pursuant to the Offer.
Except as otherwise set forth in this Supplement, the terms and conditions
previously set forth in the Offer to Purchase remain applicable in all
respects to the Offer. The information set forth herein should be read in
conjunction with the Offer to Purchase and, unless the context otherwise
requires, terms not defined herein which are defined in the Offer to Purchase
have the meanings ascribed to them in the Offer to Purchase.
THE OFFER TO PURCHASE, THIS SUPPLEMENT AND THE REVISED LETTER OF
TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY
BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
<PAGE>
THE AMENDED OFFER
1. AMENDED TERMS OF THE OFFER. Section 1 of the Offer to Purchase is
amended and supplemented as follows:
In connection with the Merger Agreement, the price per Share to be paid
pursuant to the Offer has been increased from $27 per Share to $30 per Share,
net to the seller in cash without interest thereon. Upon the terms and
subject to the conditions of the Offer (including, if the Offer is further
extended or amended, the terms and conditions of any extension or amendment),
the Purchaser will accept for payment and pay the increased purchase price for
all of the Shares validly tendered prior to the Expiration Date (as herein
defined) and not properly withdrawn in accordance with Section 4 of the Offer to
Purchase (including Shares tendered prior to the date of this Supplement). The
term "Expiration Date" means 5:00 p.m., New York City time, on Tuesday, July 2,
1996, unless and until the Purchaser, subject to the terms of the Merger
Agreement, shall have extended the period of time during which the Offer is
open, in which event the term "Expiration Date" shall mean the latest time
and date at which the Offer, as so extended by the Purchaser, shall expire.
See Sections 8 and 9 of this Supplement for a description of the provisions of
the Merger Agreement regarding extensions of the Offer and waivers of conditions
by the Purchaser.
2. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES AND
RIGHTS. Section 2 of the Offer to Purchase is amended and supplemented as
follows:
Tendering shareholders should use the revised GREEN Letter of Transmittal
and the revised YELLOW Notice of Guaranteed Delivery included with this
Supplement. However, to the extent the revised GREEN Letter of Transmittal or
the revised YELLOW Notice of Guaranteed Delivery is not obtainable, tendering
shareholders may continue to use the BLUE Letter of Transmittal and the GREY
Notice of Guaranteed Delivery that were provided with the Offer to Purchase.
Although such BLUE Letter of Transmittal refers only to the Offer to Purchase
and indicates that the Offer will expire at 12:00 Midnight, New York City
time, on April 3, 1996, shareholders using such document to tender their
shares will nevertheless receive $30 net per Share in cash for each Share
validly tendered and not properly withdrawn, and accepted for payment pursuant
to the Offer, subject to the conditions of the Offer, and will be able to
tender their Shares pursuant to the Offer until 5:00 p.m., New York City
time, on Tuesday, July 2, 1996 (or such later date to which the Offer may be
extended).
Procedures for tendering Shares, as modified by the preceding paragraph, are
set forth in Section 3 of the Offer to Purchase.
3. PRICE RANGE OF THE SHARES; DIVIDENDS. Section 6 of the Offer to
Purchase is amended and supplemented as follows:
According to publicly available information, during the quarter ended
March 31, 1996 the Company declared a dividend of $.25 per Share. The
reported high and low closing sale prices per Share on the NYSE Composite
Tape for the fiscal quarter ended March 31, 1996 were $31.25 and $17.25
respectively. The reported high and low closing sale prices per Share on the
NYSE Composite Tape for the current fiscal quarter through June 3, 1996 were
$31.38 and $29.50 respectively. On May 30, 1996, the last full trading day
prior to the execution of the Merger Agreement, the reported closing price on
the NYSE Composite Tape was $29.50 per Share.
SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE
SHARES.
4. CERTAIN INFORMATION CONCERNING THE COMPANY. Section 8 of the Offer to
Purchase is amended and supplemented as follows:
Set forth below is certain selected consolidated financial information
relating to the Company and its subsidiaries excerpted from the information
contained in the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996 (the "Company Form 10-Q"). More comprehensive financial
information is included in the Company Form 10-Q, the Offer to Purchase and
other documents filed by the Company with the SEC, and the following summary
is qualified in its entirety by reference to such information. The Company
Form 10-Q and such other documents should be available for inspection and
copies thereof should be obtainable in the manner set forth in Section 8 in
the Offer to Purchase.
2
<PAGE>
ACME-CLEVELAND CORPORATION
SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MARCH 31,
------------------
1996 1995
-------- --------
<S> <C> <C>
Income Statement Data:
Net Sales .............................................................. $ 65,744 $ 56,804
Earnings from Continuing Operations .................................... $ 3,760 ($ 1,327)
Net Earnings (Loss) .................................................... 20,785 35,068
Earnings (Loss) per Share:
Earnings from Continuing Operations ................................... $0.55 ($0.20)
Net Earnings (Loss) .................................................... $3.04 $5.26
Balance Sheet Data (at end of period):
Total Assets ........................................................... $148,742 $161,849
Working Capital ........................................................ 59,074 59,262
Long-Term Debt ......................................................... 524 1,194
Total Shareholders' Equity ............................................. 107,828 76,980
</TABLE>
During the course of the discussions between Parent and the Company, the
Company provided Parent with certain information about the Company which is
not publicly available. The non-public information included the Company's
business plan for 1996. The 1996 business plan includes the following
estimated results:(i) net sales billed: $146,000,000; (ii) income from
operations: $15,000,000; (iii) net income: $10,250,000; and (iv) net income
per share: $1.50. In addition, Parent received preliminary information with
respect to the Company's business plan for the years 1997 through 1999. Over
this period, the Company would seek to achieve a compound annual growth rate
in net sales billed of approximately 16 per cent and a compound annual growth
rate in net income of approximately 30 per cent. In the case of 1997, the
Company's preliminary estimates for net sales billed, net income from
operations, net income and net income per share are $175,000,000,
$26,500,000, 15,000,000, and $2.12, respectively. The Company's business
plans were prepared solely for internal use and not for publication or with
a view to complying with the published guidelines of the Commission regarding
projections or with a view to complying with the AICPA Guide for Prospective
Financial Statements. The Company's business plans necessarily reflect
numerous assumptions with respect to industry performance, general business
and economic conditions and other matters, many of which are inherently
uncertain or beyond the Company's control. One cannot predict whether the
assumptions made in preparing the Company's business plans will be accurate,
and actual results may be materially higher or lower than those contained in
the plans. The inclusion of this information should not be regarded as an
indication that Parent, the Purchaser, the Company, the Dealer Manager or
anyone who received this information considered it a reliable predictor of
future events, and this information should not be relied on as such. None of
Parent, the Purchaser, the Dealer Manager or the Company assumes any
responsibility for the validity, reasonableness, accuracy or completeness of
the information presented, and the Company has made no representation or
warranty, express or implied, to Parent or the Purchaser regarding the
business plans or any of the information described above.
5. CERTAIN INFORMATION CONCERNING PARENT.
Set forth below is certain selected consolidated financial information
relating to the Parent excerpted from the information contained in Parent's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1996 (the
"Parent Form 10-Q"). More comprehensive financial information is included in
the Parent Form 10-Q, the Offer to Purchase and other documents filed by
Parent and the Purchaser with the SEC, and the following summary is qualified
in its entirety by reference to such information. The Parent Form 10-Q and
such other documents should be available for inspection and copies thereof
should be obtainable in the manner set forth in Section 9 in the Offer to
Purchase.
3
<PAGE>
DANAHER CORPORATION
SELECTED FINANCIAL DATA
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------
1996 1995
-------- --------
<S> <C> <C>
Income Statement Data:
Net Revenues ..................................... $ 409,557 $ 335,982
Earnings from Continuing Operations .............. 26,928 21,412
Net Earnings ..................................... 109,739 21,848
Earnings per Share:
Earnings from Continuing Operations .............. $0.45 $0.36
Net Earnings ..................................... $1.79 $0.37
Balance Sheet Data (at end of period):
Total Assets ..................................... $1,503,480 $1,185,112
Working Capital .................................. 15,266 29,257
Long-Term Debt ................................... 101,680 116,566
Total Shareholders' Equity ....................... 679,778 503,062
</TABLE>
In April, 1996, Steven M. Rales and Mitchell P. Rales sold 2 million shares
of common stock of Parent in an underwritten public offering, and they currently
beneficially own approximately 40% of the outstanding common stock of Parent.
6. SOURCE AND AMOUNT OF FUNDS. Section 10 of the Offer to Purchase is
amended and supplemented as follows:
As a result of the increase in price per Share to be paid pursuant to the
Offer, the Purchaser estimates that approximately $205 million will be
required to acquire all of the Shares pursuant to the Offer and the Merger
and to pay all related fees and expenses. The Purchaser plans to obtain all
funds needed for the Offer and the Merger through a capital contribution from
Parent. Parent plans to obtain funds for such capital contribution through
its existing Credit Agreement, dated as of September 7, 1990, as amended,
among Parent and the banks listed therein. The Credit Agreement is described
in Section 10 of the Offer to Purchase.
The Offer is not conditioned upon Parent or the Purchaser obtaining
financing. See Section 9 of this Supplement.
7. BACKGROUND OF THE OFFER AND CONTACTS WITH THE COMPANY. Section 11 of
the Offer to Purchase is amended and supplemented as follows:
Following the commencement of the Offer, on March 7, 1996, the Purchaser
requested a special meeting of the shareholders of the Company pursuant to
the Ohio Control Share Acquisition Law (the "Ohio Control Share Acquisition
Meeting"), for the purpose of permitting the shareholders of the Company to
authorize the Offer. On March 14, 1996, the Company called the Control Share
Acquisition Meeting for April 25, 1996.
On March 11, 1996, the Company announced that its Board of Directors had
adopted a shareholder rights plan. On March 19, 1996, the Purchaser amended
the Offer to condition the Offer on the Rights having been redeemed by the
Board of Directors or the Purchaser being satisfied that the Rights had been
invalidated or were otherwise inapplicable to the Offer and the then-proposed
merger.
On March 20, 1996, the Company issued a press release stating that its
Board of Directors had determined that the $27 per Share Offer price was
inadequate and not in the best interests of the
4
<PAGE>
Company and its shareholders. The Board also recommended that the Company's
shareholders not tender their shares pursuant to the Offer and vote against
the proposed "control share acquisition" at the Control Share Acquisition
Meeting.
The Company's press release also stated that the Board had directed the
Company's management, with the assistance of its advisors, to explore
strategic alternatives to optimize shareholder value, including, among other
things, a merger or reorganization, a purchase or sale of assets, the
acquisition of securities, or a material change in the capitalization or
dividend policy of the Company.
On April 17, 1996, the Company and Parent entered into agreements
providing that (1) the Company would permit Parent to participate in the
Company's process for the exploration of strategic alternatives, (2) the
Company would provide Parent and the Purchaser with substantially the same
information it was providing to others in connection with such process
(subject to Parent and the Purchaser's obligation to keep such information
confidential), (3) Parent would not alter any of the material terms of the
Offer (other than to terminate or extend the Offer) prior to June 30, 1996,
(4) Parent and the Company would cause the Control Share Acquisition Meeting to
be adjourned on or prior to June 30, 1996, and (5) the parties would seek to
adjourn the then-pending injunction hearing regarding the Ohio Control Share
Acquisition Law.
On April 18, 1996, at the request of Parent and the Company, the court
entered an order effectively suspending all proceedings in the then-pending
litigation until a time to be determined in the future.
On April 24, 1996, Parent began a due diligence review of the Company's
business and operations. As part of such review, Parent met with management
of the Company and was furnished with certain non-public information. See
Section 4 of this Supplement.
On April 25, 1996, the Ohio Control Share Acquisition Meeting was adjourned
until a time to be determined in the future.
On May 24, 1996, Parent sent the following letter to the Company:
The Board of Directors
Acme-Cleveland Corporation
30100 Chagrin Boulevard, Suite 100
Pepper Pike, Ohio 44124-5705
Attention: Mr. David L. Swift
Chairman and Chief Executive Officer
Gentlemen:
We are pleased to inform you that we are prepared to offer to acquire
Acme-Cleveland Corporation at a price of $29 per outstanding share of common
and preferred stock. Our proposal is conditioned on the execution of a
mutually satisfactory acquisition agreement, approval under relevant
provisions of Ohio law and the inapplicability of your shareholders rights
plan. Our proposal is not subject to financing or to further due diligence.
We believe that this represents a full and fair price and reflects, among
other things, our due diligence review of Acme-Cleveland and our discussions
with your investment bankers.
It has been over two months since you announced that you were actively
exploring strategic alternatives to optimize shareholder value. We believe
that this has been more than enough time and are disappointed by the lack of
a plan to conclude the process.
Accordingly, our proposal will expire at 9:00 a.m., New York time, on
Tuesday, May 28, 1996 unless you accept it prior to such time. If you do not
accept our proposal by such time, we intend to seek to call a special meeting
off shareholders for the purpose of replacing the Acme-Cleveland board of
directors. If our nominees are elected, we intend to propose and seek to
consummate the acquisition of Acme-Cleveland, in connection with our $27 per
share tender offer. This price would reflect both the expense of running a
proxy contest and the distracting influence of this prolonged process on the
company's operations.
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We would prefer not taking such a drastic step and would not be taking it
were it not for the length of time that this process has taken and our belief
that, without action on our part, the process might continue indefinitely,
which we believe would not be in the best interests of shareholders,
employees, customers and suppliers.
We and our advisors are ready to meet with you and your advisors at any
time to discuss our offer and to answer any questions that you may have. Our
objective continues to be to conclude promptly a transaction that is
supported by the Acme-Cleveland Board of Directors.
Sincerely,
George M. Sherman
President and CEO
On May 28, 1996, the Company rejected Parent's $29 per Share proposal, and
shortly thereafter the parties began discussing the possibility of a
transaction at $30 per Share. These discussions resulted in a definitive
agreement for a $30 per Share transaction, as reflected in the Merger
Agreement, which was executed on May 31, 1996.
8. MERGER AGREEMENT. Section 12 of the Offer to Purchase is amended and
supplemented as follows:
The following is a summary of the Merger Agreement. The summary is
qualified in its entirety by reference to the Merger Agreement, which has
been filed as an exhibit to the Schedule 14D-1 and is incorporated herein by
reference.
The Offer. Pursuant to the terms of the Merger Agreement, the Purchaser
has agreed to, and Parent has agreed to cause the Purchaser to, amend the
Offer (and to amend its Tender Offer Statement on Schedule 14D-1 to reflect
such amendment) (i) to reflect the increase in the Offer Price to $30;
(ii) to modify the conditions of the Offer to conform to the conditions of
the Offer provided for in the Merger Agreement (the "Offer Conditions") and
(iii) to extend the Offer until at least 5:00 p.m. on the date of the Ohio
Control Share Acquisition Meeting. At the Company's request, the Purchaser
will, and Parent will cause the Purchaser to, extend the Offer from time to
time for up to an aggregate of an additional ten business days following the
date of the Ohio Control Share Acquisition Meeting if, prior to 5:00 p.m. on
the date of such meeting, there are not validly tendered and not properly
withdrawn that number of Shares which, when aggregated with the Shares
currently owned by Parent and any of its affiliates, would represent at least
a majority of the Shares then outstanding on a fully diluted basis. Parent
has agreed to effect the amendment to the Offer described in the first
sentence of this paragraph will occur no later than five business days after
the public announcement of the execution of the Merger Agreement. The
Purchaser has also agreed that it will not, and Parent agrees that it will
cause the Purchaser not to, (i) decrease the Offer Price, (ii) change the
form of consideration payable in the Offer, (iii) change the Offer
Conditions, (iv) impose additional conditions to its obligation to consummate
the Offer and to accept for payment and purchase Shares tendered in the
Offer, or (v) change any other terms of the Offer in a manner adverse to the
holders of Shares. Notwithstanding the foregoing, the Purchaser may extend
the expiration date of the Offer to the extent required by law or if the
Offer Conditions are not satisfied. As further described below, the
obligation of the Purchaser to accept for payment and pay for Shares tendered
pursuant to the Offer will be subject only to the Offer Conditions, all of
which may be waived by the Purchaser in its sole discretion.
Pursuant to the terms of the Merger Agreement, the Company has represented
that the Board has (i) resolved to recommend that the Company's shareholders
accept the Offer and tender their Shares pursuant to the Offer and (ii)
received an opinion from Goldman, Sachs that the $30 in cash to be received by
the holders of shares in the Offer and the Merger, taken as a unitary
transaction, is fair to such holders. The Company also agrees to not withdraw,
modify, or amend its recommendation included herein that the Company's
shareholders accept the Offer and tender their Shares pursuant to the Offer,
unless (i) such recommendation would not be consistent with the fiduciary duties
of the Board under applicable law, as advised by counsel, or (ii) the Merger
Agreement is terminated in accordance with its terms.
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The Ohio Control Share Acquisition Meeting. In the Merger Agreement, the
Company has agreed to reconvene the Ohio Control Share Acquisition Meeting at
the earliest possible date, and the Company will not postpone or adjourn the
Ohio Control Share Acquisition Meeting (except as a result of the absence of a
quorum) without Parent's consent, unless Parent requests such postponement or
adjournment. The methods for identifying "interested shares" as defined in
Section 1701.01(CC) of the Ohio Revised Code and for determining whether
the related quorum requirement is met at the Ohio Control Share Acquisition
Meeting is as set forth in the Merger Agreement. Pursuant to the terms
of the Merger Agreement, the Board will recommend that the Company's
shareholders approve the proposed "control share acquisition" at the Ohio
Control Share Acquisition Meeting, unless such recommendation would not be
consistent with the Board's fiduciary duties under applicable law, as advised
by counsel, or the Merger Agreement is terminated in accordance with its
terms.
Board Designees. The Merger Agreement provides that, promptly following
the purchase by the Purchaser pursuant to the Offer of that number of Shares
which, when aggregated with the Shares owned by Parent and any of its
affiliates, represents at least a majority of the Shares then outstanding on
a fully diluted basis and subject to the Company's obligations under Section
14(f) of the Securities Exchange Act of 1934, as amended (the "'34 Act") and
Rule 14f-1 thereunder, the Purchaser will be permitted to designate members
of the Board such that the Purchaser will have a number of representatives on
the Board equal to the product, rounded up to the next whole number, of (i)
the total number of directors of the Company multiplied by (ii) the
percentage that the number of Shares then beneficially owned by the Purchaser
or its affiliates bears to the number of Shares outstanding at the time of
such purchase. The Company has agreed to increase the size of the Board, or
use its reasonable efforts to secure the resignation of directors, or both,
as may be necessary to permit the Purchaser's designees to be elected or
appointed to the Board. Notwithstanding the foregoing, prior to the Effective
Time (as defined herein), the Board will always have at least two members who
are not officers, designees, shareholders or affiliates of the Purchaser (the
"Independent Directors"). All of the Independent Directors will be
individuals who are currently directors of the Company, except to the extent
that such individuals do not wish to continue as directors or voluntarily
resign. The Company has further agreed to take all actions required pursuant
to Section 14(f) of the '34 Act and Rule 14f-1 thereunder in connection with
the election or appointment of the Purchaser's designees to the Board.
Furthermore, following the election or appointment of the Purchaser's
designees to the Board, any of the following will require the concurrence of
a majority of the Independent Directors, unless no individuals who are
currently directors of the Company wish to continue as directors or all such
individuals voluntarily resign: (i) any amendment to the Merger Agreement;
(ii) the termination of the Merger Agreement by the Company; (iii) any
extension by the Company of the time for the performance of the obligations
of the Purchaser or Parent under the Merger Agreement; (iv) any
recommendation to shareholders or any modification or withdrawal of any such
recommendation; or (v) any waiver of any of the Company's rights under the
Agreement. Parent expects that its nominees to the Board will be Steven M.
Rales, Mitchell P. Rales and George M. Sherman. They are 44, 39 and 54 years
old, respectively. None of such persons beneficially owns any Shares. See
Section 9 of the Offer to Purchase for Shares beneficially owned by Parent
and the Purchaser. See Schedule I to the Offer to Purchase for other
information regarding such persons. In addition to the information set forth
therein, Mr. Sherman is a director of Campbell Soup Company.
Disposition of Ohio Litigation. Pursuant to the terms of the Merger
Agreement, the Purchaser and Parent also have agreed, as promptly as possible
but in no event later than five business days after the public announcement
of the execution of the Merger Agreement, to move to withdraw, without
prejudice, their complaint in the case entitled Danaher Corporation, et al.,
v. Acme-Cleveland Corporation, et al., Case No. C2 96-0247, pending in the
United States District Court for the Southern District of Ohio, Eastern
Division. The Company has agreed to move to withdraw, without prejudice, its
counterclaims in that case.
The Merger. The Merger Agreement provides that, at the Effective Time, the
Purchaser will be merged with and into the Company in accordance with
applicable law. The Company will be the surviving corporation (the "Surviving
Corporation") in the Merger. As soon as practicable after satisfaction or
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waiver of all conditions to the Merger set forth in the Merger Agreement, the
parties will cause certain certificates of merger to be filed in accordance
with applicable state law. Upon filing of both of such certificates, the
Merger will become effective.
Until amended in accordance with applicable law, the articles of
incorporation and regulations of the Company in effect at the Effective Time
will be the articles of incorporation and regulations of the Surviving
Corporation after the consummation of the Merger. Until successors are duly
elected or appointed and qualified, from and after the Effective Time, the
officers and directors of the Purchaser at the Effective Time will be the
officers and directors of the Surviving Corporation after the consummation of
the Merger. The failure to retain the officers of the Company as officers of
the Surviving Corporation will qualify as Good Reason to terminate for purposes
of the Severance Pay Agreements between the Company and certain executive
officers of the Company or of a subsidiary of the Company and the Employment
Agreement between the Company and Mr. Swift, entitling such person to receive
lump sum payments under such contracts upon such termination.
By virtue of the Merger, at the Effective Time, (i) each then issued and
outstanding Common Share of the Purchaser will be converted into one Common
Share of the Surviving Corporation, (ii) each then issued and outstanding
Share, except for Shares held by the Company as a treasury share or owned by
Parent or any subsidiary of Parent (which Shares will be immediately canceled
and no payment will be made with respect thereto) will be converted into the
right to receive, without interest, an amount in cash equal to $30 (the
"Merger Consideration"). From and after the Effective Time, all Shares will
be canceled and retired and cease to exist and each holder of a certificate
representing any Shares immediately prior to the Effective Time will
thereafter cease to have any rights with respect to such Shares, except the
right to receive the Merger Consideration or the right, if any, to receive
payment from the Surviving Corporation of the "fair cash value" of such
Shares as determined in accordance with Section 1701.85 of the Ohio Revised
Code.
Stock Options and Performance Shares. At the earlier of the purchase of
Shares pursuant to the Offer and the Effective Time, subject to obtaining the
consent of the holder thereof, each outstanding option to purchase Common
Shares, whether or not exercisable, granted under an employee stock option or
incentive plan of the Company will be cancelled and converted into the right
to receive, without interest, an amount in cash equal to the product of (i)
the number of Common Shares subject to the option and (ii) the excess of (a)
the Merger Consideration over (b) the exercise price per share of the option.
At the earlier of the purchase of Shares pursuant to the Offer and the
Effective Time, subject to obtaining the consent of the holder thereof, each
Common Share to which an employee of the Company is entitled under the
Acme-Cleveland Corporation Performance and Equity Incentive Plan (the
"Performance Plan") will be cancelled and will be converted into the right to
receive, without interest, an amount in cash equal to the Merger
Consideration.
Representations and Warranties of the Company. In the Merger Agreement,
the Company has made customary representations and warranties to the
Purchaser and Parent, including, but not limited to, representations and
warranties relating to the following: the organization and qualifications of
the Company and its subsidiaries; the authority of the Company to enter into
and perform its obligations under the Merger Agreement and carry out the
related transactions; required consents and approvals; the capitalization of
the Company and its subsidiaries; filings made by the Company with the
Commission; the Company's consolidated financial statements; the absence of
certain changes or developments since September 30, 1995, including, without
limitation, any changes or developments since that date which would result in
a Company Material Adverse Effect; litigation; employee benefit matters;
taxes; intellectual property rights; environmental matters; state takeover
statutes; and documents supplied, filed or distributed by the Company
relating to the Offer.
Representations and Warranties of Parent and the Purchaser. Parent and the
Purchaser have also made customary representations and warranties in the
Merger Agreement, including, without limitation, representations and
warranties relating to the following: the organization of Parent and the
Purchaser; the authority of each of Parent and the Purchaser to enter into
and perform its obligations under the Merger Agreement and carry out the
related transactions; required consents and approvals; filings made by Parent
with the Commission; Parent's consolidated financial statements; litigation;
availability of sufficient funds to consummate the Offer; and documents
supplied, filed or distributed by Parent or the Purchaser relating to the
Offer.
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Covenants of the Company. In the Merger Agreement, the Company has agreed
that, except as contemplated or permitted by the Merger Agreement or
specifically disclosed in the schedules thereto, or as otherwise approved in
writing by Parent, from the date of the Merger Agreement until the Effective
Time, the Company and its subsidiaries will conduct their businesses in the
ordinary course consistent with past practice. The Merger Agreement provides
that from the date of the Merger Agreement until the Effective Time (i) the
Company will not adopt or propose any change or amendment in its articles of
incorporation or regulations; (ii) the Company will not, and will not permit
any of its subsidiaries to, merge, consolidate, or enter into a share
exchange with any other individual, corporation, partnership, association,
trust or other entity or organization (including a government or political
subdivision or any agency or instrumentality thereof) (a "Person"), sell,
lease, license, mortgage, pledge, or otherwise dispose of any material
assets, except (a) in the ordinary course consistent with past practice or
(b) transfers between the Company or its wholly owned subsidiaries; (iii) the
Company will not declare, set aside, or pay any dividends or make any
distributions on the Shares, other than normal quarterly dividends at the
rates in effect on the date of the Merger Agreement; (iv) the Company will
not, and will not permit any of its subsidiaries to, (a) issue, deliver,
sell, encumber, or authorize or propose the issuance, delivery, sale, or
encumbrance of, any capital stock or other securities of the Company or any
capital stock or other securities of its subsidiaries ("Company Subsidiary
Securities"), other than the issuance of Common Shares upon the exercise of
outstanding options to purchase Common Shares granted prior to the date
hereof or upon conversion of the Series A Preferred Shares, (b) split,
combine, or reclassify any Shares or Company Subsidiary Securities, (c)
repurchase, redeem, or otherwise acquire any capital stock or other
securities of the Company or any Company Subsidiary Securities, or (d) amend
the terms of any outstanding securities, (v) the Company will not make any
commitment or enter into any contract or agreement that is likely to be,
individually or in the aggregate, material to the Company and its
subsidiaries taken as a whole except in the ordinary course of business
consistent with past practice; (vi) except to the extent required by law, by
existing contract, or by policy currently in effect, the Company and its
Subsidiaries will not increase in any manner the compensation or fringe
benefits of any of its directors or officers, pay any pension or retirement
allowance to any directors or officers, or become a party to, amend, or
commit itself to any pension, retirement, profit-sharing, welfare-benefit
plan, or employment agreement with or for the benefit of any director or
officer, other than the payment of bonuses not exceeding, in the aggregate,
$200,000 to officers of the Company in the ordinary course of business
consistent with past practices; (vii) the Company will not, and will not
permit any of its subsidiaries to, make any tax election or settle or
compromise any material federal, state, local or foreign tax liability;
(viii) the Company will not take, and will not permit any of its subsidiaries
to take, any action that would make any representation or warranty of the
Company contained in the Merger Agreement inaccurate in any material respect
at, or as of, any time prior to the Effective Time or that would cause any
closing condition under the Merger Agreement not to be satisfied, except as
may be required by law; and (ix) the Company will not agree to do any of the
foregoing.
In the Merger Agreement, the Company has further agreed that, from the
date of the Merger Agreement until its termination, it and its subsidiaries
will not, and will use all reasonable efforts to cause their officers,
directors, employees, and agents not to, directly or indirectly, (i) take any
action to solicit or initiate any good faith offer or proposal for a merger
or other business combination involving the Company, the acquisition of the
entire equity interest in the Company, or the acquisition of all or
substantially all of the assets of the Company (a "Company Acquisition
Proposal"), other than the transactions contemplated by the Merger Agreement
or (ii) engage in negotiations or enter into agreements with any Person with
respect to a Company Acquisition Proposal, disclose any nonpublic information
relating to the Company or any of its subsidiaries, or afford access to the
properties, books, or records of the Company or any of its subsidiaries, to
any Person; provided, however, that the Company may engage in negotiations
with or disclose such non-public information, or provide such access to, any
Person who has made an unsolicited Company Acquisition Proposal if the Board,
after consultation with outside counsel to the Company, determines that its
fiduciary duties under applicable law require such actions. In such event,
the Company will notify Parent that it has received a Company Acquisition
Proposal and advise Parent of the material terms and conditions thereof.
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The Company has further agreed that, if required by the provisions of the
Ohio Revised Code in order to consummate the Merger, it will take all action
necessary in accordance with such law and with the Company's articles of
incorporation and regulations to convene a meeting of its shareholders to
approve the Merger and adopt the Merger Agreement (the "Merger Meeting"). The
Board will recommend that the Company's shareholders approve the Merger and
adopt the Merger Agreement, and will cause the Company to use all reasonable
efforts to solicit from the shareholders proxies to vote therefor, unless (i)
such recommendation would not be consistent with the fiduciary duties of the
Board under applicable law, as advised by counsel or (ii) the Merger
Agreement is terminated in accordance with its terms. If required by law for
the consummation of the Merger, the Company will prepare and file with the
Commission preliminary proxy materials relating to the approval of the Merger
and the adoption of the Merger Agreement by the Company's shareholders, will
provide Parent with any and all comments thereon by the Commission's staff,
will use all reasonable efforts to discuss with Parent any proposed changes
to such preliminary proxy materials prior to responding to any comments
thereon by the Commission's staff, and will file with the Commission revised
preliminary proxy materials, if appropriate, and definitive proxy materials
in a timely manner as required by the rules and regulations of the
Commission. Except as otherwise provided in the preceding sentence, the proxy
material relating to the Merger Meeting will include the recommendation of
the Board.
Covenants of Parent and the Purchaser. In the Merger Agreement, Parent and
the Purchaser have agreed, from and after the Effective Time, to indemnify,
defend, and hold harmless the present and former directors, officers, and
employees of the Company and its subsidiaries against all losses, claims,
damages, and liability in respect of acts or omissions by them at or prior to
the Effective Time. Parent will not take any action to terminate or amend the
Company's current directors' and officers' liability insurance in respect of
acts or omissions occurring at or prior to the Effective Time for at least
six years after the Effective Time.
Pursuant to the Merger Agreement, Parent and the Purchaser have agreed,
jointly and severally, that they will not, and will cause the Surviving
Corporation not to, contest the validity of (i) any employee benefit plan (as
defined in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) that is (a) subject to any provision of ERISA and
(b) is maintained, administered, or contributed to by the Company or any
affiliate and covers any employee or former employee of the Company or any
affiliate or under which the Company or any affiliate has any liability (the
"Company Employee Plans") or (ii) any employment, severance, welfare, or
other similar contract, arrangement, or policy, or any plan or arrangement
(written or oral) providing for compensation, benefit, bonus, profit-sharing,
stock option, or other stock related rights or other forms of incentive or
deferred compensation that (a) is not a Company Employee Plan, (b) is entered
into, maintained, or contributed to, as the case may be, by the Company or
any of its affiliates, and (c) covers any employee or former employee or
director or former director of the Company or any of its affiliates (the
"Company Benefit Arrangements"), and which Company Benefit Arrangements are
identified in the Merger Agreement, consist of immaterial arrangements with
one or more employees or groups of employees, or have been disclosed in any
report, schedule, registration statement or other document required to be
filed with the Commission and so filed prior to the date of the Merger
Agreement. Furthermore, Parent and the Purchaser will, and will cause the
Surviving Corporation to, provide the benefits and perform the obligations of
the Company and its subsidiaries to present or former officers and employees
of the Company or its subsidiaries arising on or before the Effective Time
under the Company Employee Plans and the Company Benefit Arrangements
identified above. In the Merger Agreement, Parent and the Purchaser also
jointly and severally agree to reimburse, and to cause the Surviving
Corporation to reimburse, such present or former officers and certain
employees for the costs, including reasonable attorneys' fees, of any
litigation initiated by, or initiated or threatened against, any of them in
connection with the enforcement of their rights set forth in the immediately
preceding two sentences; provided, however, that no such reimbursement will be
provided (and any such reimbursement previously made will be refunded) with
respect to any claim made by such present or former officer or employee if the
court determines that the claim was not made in good faith. With respect to
benefits arising after the Effective Time, Parent and the Purchaser have
stated in the Merger Agreement their intention that Parent will continue to
provide to the former employees of the Company and its subsidiaries who
remain as employees of the Surviving
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Corporation and its subsidiaries after the Effective Time each of the
benefits which they now receive from the Company and its subsidiaries at
least through December 31, 1996, including benefits under the Company
Employee Plans and the Company Benefit Arrangements, but excluding any
equity-based compensation or benefits. Parent and the Purchaser will continue
to provide to such employees, however, for at least one year after the
Effective Time, the same severance benefits as are now provided to them by
the Company.
Pursuant to the Merger Agreement, Parent has agreed to vote, or cause to
be voted, all Shares beneficially owned by it in favor of the Merger and the
Purchaser has agreed to consummate the Merger pursuant to the "short form"
merger provisions of the Ohio Revised Code if applicable.
Covenants of the Company, Parent and the Purchaser. Pursuant to the Merger
Agreement, the Company, Parent, and the Purchaser have agreed that, if any
"fair price", "moratorium", or "control share acquisition" statute or other
similar statute or regulation becomes applicable to the transactions
contemplated by the Merger Agreement, they will each, along with their
respective boards of directors, use all reasonable efforts to grant such
approvals and take such actions as are necessary so that the transactions
contemplated by the Merger Agreement may be consummated as promptly as
practicable on the terms contemplated thereby and otherwise act to minimize
the effects of such statute or regulation on the transactions contemplated by
the Merger Agreement.
Conditions to the Merger. The obligations of the Company, Parent and the
Purchaser to consummate the Merger are subject to the satisfaction, at or
before the Effective Time, of each of the following conditions: (i) if
required by applicable law, the Merger has been approved, and the Merger
Agreement has been adopted, by the requisite vote of the Company's
shareholders; and (ii) no provision of any applicable domestic law or
regulation, and no judgment, injunction, order or decree of a court or
governmental agency or authority of competent jurisdiction is in effect that
has the effect of making the Offer or the Merger illegal or otherwise
restrains or prohibits the purchase of Shares pursuant to the Offer or the
consummation of the Merger (provided, however, that each party agrees to use
all reasonable efforts, including appeals to higher courts, to have any such
judgment, injunction, order or decree lifted). The obligations of Parent and
the Purchaser to consummate the Merger are subject to satisfaction or waiver
of the Offer Conditions and to compliance by the Company with its obligations
set forth in the Merger Agreement related to the election or appointment of
the Purchaser's designees to the Board.
Termination. The Merger Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, notwithstanding any prior
approval of the Merger and adoption of the Merger Agreement by the Company's
shareholders, (i) by the mutual written consent of the Company, Parent, and
the Purchaser; (ii) by either the Company or Parent if the Merger has not
been consummated by November 30, 1996, provided that such right of
termination will not be available to any party that, at the time of
termination, is in material breach of its obligations under the Merger
Agreement; (iii) by either the Company or Parent if any applicable domestic
law, rule, or regulation makes consummation of the Merger illegal or if any
judgment, injunction, order, or decree of a court or governmental agency or
authority of competent jurisdiction restrains or prohibits the consummation
of the Merger, and such judgment, injunction, order, or decree has become
final and nonappealable; (iv) by either the Company or Parent if the
requisite vote of the Company's shareholders approving the Merger and
adopting the Merger Agreement has not been obtained at the meeting of the
shareholders called for that purpose, as contemplated by the Merger
Agreement; (v) by either the Company or Parent if the Offer terminates
without the purchase of Shares thereunder; (vi) prior to the purchase of
Shares by the Purchaser pursuant to the Offer, by Parent if the Board does
not publicly recommend in the Schedule 14D-9 or in the proxy material
relating to the Ohio Control Share Acquisition Meeting or the Merger Meeting
that the Company's shareholders accept the Offer and tender their Shares
pursuant to the Offer and approve the Merger and adopt the Merger Agreement
or if the Board withdraws, modifies, or changes such recommendation in any
manner adverse to Parent; or (vii) by the Company if the Company receives an
unsolicited Company Acquisition Proposal that the Board determines in good
faith, after consultation with its legal and financial advisors, is likely to
lead to a merger, acquisition, consolidation, or similar transaction that is
more favorable to the shareholders of the Company than the Merger, provided
the Company has given Parent at least five business days notice of the
material terms of the Company Acquisition Proposal and has paid the
Termination Fee (as defined below).
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In the event of any such termination of the Merger Agreement and
abandonment of the Merger, no party to the Merger Agreement (or any of its
directors or officers) will have any liability or further obligation to any
other party to the Merger Agreement except (i) as provided in the Merger
Agreement with respect to certain fees and expenses, (ii) for obligations
contained in the Merger Agreement with respect to payment of fees and
expenses and arising out of the applicability of the Confidentiality
Agreement between the Company and Parent, dated April 17, 1996 to information
provided pursuant to the Merger Agreement, which will survive termination of
the Merger Agreement and abandonment of the Merger, and (iii) for liability
for any breach of the Merger Agreement which will survive such termination.
Fees and Expenses. The Merger Agreement provides that, except as set forth
below, all costs and expenses incurred in connection with the Merger
Agreement will be paid by the party incurring the costs and expenses;
provided, however, the Company and Parent will each pay one-half of all
printing, filing, and mailing costs for the proxy statement and all filing
fees for filings required by the Commission or the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, and other regulatory filings.
Pursuant to the Merger Agreement, if (i) the Merger Agreement is
terminated by the Company because the Company receives an unsolicited Company
Acquisition Proposal that the Board determines in good faith, after
consultation with its legal and financial advisors, is likely to lead to a
merger, acquisition, consolidation, or similar transaction that is more
favorable to the shareholders of the Company than the Merger, (ii) any Person
publicly makes a Company Acquisition Proposal and thereafter the Merger
Agreement is terminated because the Merger has not been consummated by
November 30, 1996 or the Company's shareholders have failed to approve the
Merger and adopt the Merger Agreement, or (iii) any Person publicly makes a
Company Acquisition Proposal and thereafter the Merger Agreement is
terminated by Parent because the Board did not publicly recommended in the
Schedule 14D-9 or in the proxy material relating to the Ohio Control Share
Acquisition Meeting or the Merger Meeting that the Company's shareholders
accept the Offer and tender their Shares and approve the Merger and adopt the
Merger Agreement, or the Board has withdrawn, modified, or changed such
recommendations in any manner adverse to Parent, then the Company has agreed
to reimburse Parent and the Purchaser for all of their reasonable documented
out-of-pocket expenses and fees other than litigation expenses (subject to a
maximum reimbursement obligation of $1,500,000) actually incurred by Parent
in connection with the transactions contemplated by the Merger Agreement
prior to the termination of the Merger Agreement, including, without
limitation, all fees and expenses of counsel, financial advisors,
accountants, and environmental and other experts and consultants to Parent
and the Purchaser ("Transaction Costs"). If (i) the Merger Agreement is
terminated by the Company as set forth in clause (i) of the immediately
preceding sentence, (ii) any Person publicly makes a Company Acquisition
Proposal, thereafter the Merger Agreement is terminated as set forth in
clause (ii) of the immediately preceding sentence, and within 12 months after
termination the Company accepts or consummates any Company Acquisition
Proposal, or (iii) any Person publicly makes a Company Acquisition Proposal
and thereafter the Merger Agreement is terminated as set forth in clause
(iii) of the immediately preceding sentence, then, in addition to reimbursing
Parent and the Purchaser for their Transaction Costs, the Company has agreed
to pay to Parent a fee of $6,000,000 (the "Termination Fee").
In the Merger Agreement, Parent and the Purchaser have agreed that if
Parent receives a Termination Fee, neither Parent, the Purchaser, nor any of
their affiliates will assert or pursue in any manner, directly or indirectly,
any claim or cause of action (i) against any person submitting a Company
Acquisition Proposal or (ii) against the Company or any of its directors,
officers, employees, agents, or representatives based in whole or in part
upon its or their receipt, consideration, recommendation, or approval of the
Company Acquisition Proposal, including the Company's exercise of its right
to terminate the Merger Agreement.
Waiver and Amendment. Subject to applicable law, any provision of the
Merger Agreement may be amended or waived if such amendment or waiver is in
writing and signed, in the case of an amendment, by each of the parties to
the Merger Agreement, and, in the case of a waiver, by the party against whom
the waiver is to be effective.
9. CERTAIN CONDITIONS OF THE OFFER. Section 14 of the Offer to Purchase is
hereby amended and restated in its entirety as follows:
12
<PAGE>
The Purchaser will not be required to accept for payment or, subject to
any applicable rules and regulations of the Commission, including Rule
14e-1(c) under the Exchange Act (relating to the Purchaser's obligation to
pay for or return tendered Shares after the termination or withdrawal of the
Offer), to pay for any Shares not theretofore accepted for payment or paid
for pursuant to the Offer, if (i) there are not validly tendered and not
properly withdrawn prior to the expiration of the Offer that number of Shares
which, when aggregated with the Shares then owned by Parent and any of its
affiliates, represents at least a majority of the Shares then outstanding on
a fully diluted basis, or (ii) at any time on or after the date of the Merger
Agreement and at or before the time that the particular Shares are accepted
for payment (whether or not any other Shares have theretofore been accepted
for payment or paid for pursuant to the Offer) any of the following
conditions exist:
(a) any provision of any applicable domestic law or regulation, or any
judgment, injunction, order or decree of a court or governmental agency or
authority of competent jurisdiction, is in effect that (i) makes the Offer
or the Merger illegal or otherwise, directly or indirectly, prohibits,
materially restrains or makes materially more costly the making of the
Offer, the acceptance for payment of, payment for, or ownership, directly
or indirectly, of some or all of the Shares by the Purchaser or Parent or
materially delays the Merger, (ii) prohibits or materially limits the
ownership or operation by the Company or any of its subsidiaries that owns
a material portion of the business and assets of the Company and its
subsidiaries, taken as a whole, or by Parent, the Purchaser or any
subsidiaries of Parent or all or a material portion of the business and
assets of the Company and its subsidiaries, taken as a whole, or Parent
and its subsidiaries, taken as a whole, as a result of the Offer, the
Merger, or the other transactions contemplated by the Merger Agreement, or
(iii) imposes limitations on the ability of the Purchaser, Parent or any
subsidiaries of Parent effectively to acquire, hold or exercise full
rights of ownership of the Shares, including but not limited to the right
to vote any Shares acquired or owned by the Purchaser, Parent or any of
Parent's subsidiaries on all matters properly presented to the
shareholders of the Company, including but not limited to the approval of
the Merger Agreement and adoption of the Merger and the right to vote any
shares of capital stock of any subsidiaries of the Company (other than
immaterial subsidiaries) (each party agreeing to use all reasonable
efforts to have any such judgment, injunction, order or decree lifted);
(b) any consents, authorizations, orders and approvals of, or filings
or registrations with, any governmental commission, board or other
regulatory body required in connection with the execution, delivery and
performance of the Merger Agreement has not been obtained or made, except
(i) for the filings made in connection with the Merger contemplated by
Section 1.01(b) of the Merger Agreement and for the filing of any other
documents required to be filed after the purchase of Shares pursuant to
the Offer, and (ii) where the failure to obtain or make any such consent,
authorization, order, approval, filing or registration is not likely to
have a Company Material Adverse Effect or a Parent Material Adverse Effect
(each as defined in the Merger Agreement), and would not render the Offer
or the Merger illegal or provide a reasonable basis to conclude that the
parties or their affiliates or any of their respective directors or
officers will be subject to the risk of criminal liability;
(c) any Third Party Consents (as defined in the Merger Agreement) have
not been obtained, except to the extent that the failure to obtain any
Third Party Consents is not likely to have a Company Material Adverse
Affect;
(d) the Company has failed to perform its obligations under the Merger
Agreement at or prior to such time or any representations and warranties
of the Company contained in the Merger Agreement are not true at such time
as if made at and as of such time (unless the representation and warranty
is made as of a specific date, in which case such representation and
warranty will be true as of such date), except to the extent that the
failure to perform such obligation and the untruth of such representations
and warranties is not likely to have, individually or in the aggregate, a
Company Material Adverse Affect, and Parent has received a certificate
signed by an executive officer and by the chief financial officer of the
Company to the foregoing effect;
(e) the acquisition of Shares by the Purchaser pursuant to the Offer
has not been approved by the Company's shareholders as required by the
Control Share Acquisition Law;
13
<PAGE>
(f) the Merger Agreement has been terminated in accordance with its
terms; and
(g) the Company has not obtained the consents referred to in Sections
1.05 and 1.06 of the Merger Agreement.
The foregoing conditions are for the sole benefit of the Purchaser and
Parent and may be asserted by the Purchaser or may be waived by the Purchaser in
whole or in part at any time and from time to time in its sole discretion. The
failure by the Purchaser at any time to exercise any of the foregoing rights
will not be deemed a waiver of any such right and no single or partial exercise
of any such right will preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
10. CERTAIN LEGAL MATTERS. Section 15 of the Offer to Purchase is amended
and supplemented as follows:
Parent and the Purchaser commenced an action on March 7, 1996, in the Ohio
Federal District Court against the Company, the Commissioner of Securities
and the Director of Commerce of the Ohio Department of Commerce, seeking,
among other things, that the Court declare unconstitutional and enjoin
application of certain provisions of the Ohio Control Share Acquisition Law
(a) to the extent they were sought to be applied to impair the voting rights
of the types of "Interested Shares," as defined in Chapter 1701 of the ORC,
as such provisions may be applied to the Offer, and (b) to the extent they
prohibited the purchase or sale of Shares in interstate commerce.
On March 21, 1996, the Company filed an Answer and Counterclaims in which
it alleged, among other things, (i) if and to the extent that Parent and the
Purchaser, alone or with others, acquired 10% or more of the voting power of
the Company's stock in the election of directors, including by obtaining
proxies to elect directors at the Special Meeting, Parent and the Purchaser
would become "interested shareholders" subject to the prohibitions and
restrictions of the Ohio Business Combination Law, and (ii) Parent and the
Purchaser had failed to disclose the material fact that, if and to the extent
they became "interested shareholders" under the Ohio Business Combination Law
through the acquisition of over 10% of the voting power of the Company in the
election of directors by, inter alia, obtaining proxies, they would be
prohibited by that law from consummating the Merger for at least three years
and thereafter could only consummate such merger if they met further
requirements of the Ohio Business Combination Law imposing fair price and
super-majority voting standards. The Company requested an order dismissing
Parent's and the Purchaser's complaint, injunctive relief and such other
relief as the court deemed just and proper.
As described in Section 7 hereof, on April 18, 1996 the parties agreed to
seek to adjourn the then-pending injunction hearing regarding the Ohio
Control Share Acquisition Law. On April 24, 1996, the court entered an order
effectively suspending all proceedings in such litigation until an indefinite
time to be determined in the future. Pursuant to the terms of the Merger
Agreement, the Purchaser and Parent also have agreed, as promptly as possible
but in no event later than five business days after the public announcement
of the execution of the Merger Agreement, to move to withdraw, without
prejudice, their complaint in the case entitled Danaher Corporation, et al.,
v. Acme-Cleveland Corporation, et al., Case No. C2 96-0247, pending in the
United States District Court for the Southern District of Ohio, Eastern
Division. The Company has agreed to move to withdraw, without prejudice, its
counterclaims in that case.
11. MISCELLANEOUS. Parent and the Purchaser have filed with the SEC
amendments to the Schedule 14D-1 pursuant to Rule 14d-3 under the Exchange
Act with respect to the Offer. The Company has filed with the SEC amendments
to the Schedule 14D-9 setting forth the Company's recommendation of the Board
of Directors with respect to the Offer and other information required to be
included pursuant to Rule 14d-9. Amendment No. 5 to the Schedule 14D-9 is
being mailed to shareholders of the Company herewith. Such amendments to the
Schedule 14D-1 and Schedule 14D-9, including exhibits, which furnish certain
additional information with respect to the Offer, may be inspected at, and
copies may be obtained from, the same places and in the same manner as set
forth in Sections 8 and 9 of the Offer to Purchase (except that they will not
be available at the regional offices of the SEC).
WEC Acquisition Corporation
June 5, 1996
14
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by each shareholder of the
Company or such shareholder's broker, dealer, commercial bank, trust company
or other nominee to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<CAPTION>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Delivery:
P.O. Box 2559 (201) 222-4720 14 Wall Street
Suite 4660 or Eighth Floor
Jersey City, New Jersey (201) 222-4721 Suite 4680
07303-2559 New York, New York 10005
</TABLE>
Confirm Receipt of Notice of Guaranteed Delivery by telephone:
(201) 222-4707
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses or telephone
numbers set forth below. Additional copies of this Supplement, the Offer to
Purchase, the Letter of Transmittal and all other tender offer materials may
be obtained from the Information Agent as set forth below, and will be
furnished promptly at the Purchaser's expense. You may also contact your
broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. King & Co., Inc.
77 Water Street
New York, New York 10005
(212) 269-5550 (Call Collect)
or
(800) 628-8532
The Dealer Manager for the Offer is:
Merrill Lynch & Co.
World Financial Center
North Tower
New York, New York 10281-1305
(212) 236-4565 (Call Collect)
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER COMMON SHARES
(INCLUDING THE ASSOCIATED RIGHTS)
AND
SERIES A CONVERTIBLE PREFERRED SHARES
OF
ACME-CLEVELAND CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED MARCH 7, 1996
AND THE SUPPLEMENT THERETO
DATED JUNE 5, 1996
BY
WEC ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
DANAHER CORPORATION
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON JULY 2, 1996, UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<CAPTION>
<S> <C>
By Mail: By Hand:
P.O. Box 2559 14 Wall Street
Suite 4660-WEC Eighth Floor
Jersey City, New Jersey 07303-2559 Suite 4680-WEC
New York, New York 10005
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN
THIS LETTER OF TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE THE SUBSTITUTE
FORM W-9 PROVIDED BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This revised Letter of Transmittal or the previously circulated original
BLUE Letter of Transmittal is to be completed by shareholders either if
certificates evidencing Shares (as defined below) are to be forwarded
herewith or if delivery of Shares is to be made by book-entry transfer to the
Depositary's account at The Depository Trust Company ("DTC"), the Midwest
Securities Trust Company ("MSTC") or the Philadelphia
<PAGE>
Depository Trust Company ("PDTC") (each a "Book-Entry Transfer Facility" and
collectively, the "Book- Entry Transfer Facilities") pursuant to the
book-entry transfer procedure described in Section 2 of the Offer to Purchase
(as defined below). Delivery of documents to a Book-Entry Transfer Facility
does not constitute delivery to the Depositary.
Shareholders whose certificates evidencing Shares ("Share Certificates")
are not immediately available or who cannot deliver their Share Certificates
and all other documents required hereby to the Depositary prior to the
Expiration Date (as defined in Section l of the Offer to Purchase) or who
cannot complete the procedure for delivery by book-entry transfer on a timely
basis and who wish to tender their Shares must do so pursuant to the
guaranteed delivery procedure described in Section 2 of the Offer to
Purchase. See Instruction 2.
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
------------------------------------------------
Check Box of Applicable Book-Entry Transfer Facility:
(CHECK ONE) [ ] DTC [ ] MSTC [ ] PDTC
Account Number Transaction Code Number
----------------------- ------------------
[ ] CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE
THE FOLLOWING. PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF
GUARANTEED DELIVERY:
Name(s) of Registered Holder(s)
-----------------------------------------------
Window Ticket No. (if any)
----------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
----------------------------
Name of Institution which Guaranteed Delivery
---------------------------------
<PAGE>
<TABLE>
<CAPTION>
DESCRIPTION OF SHARES TENDERED
- ----------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAMES(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
APPEAR(S) ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- ----------------------------------------------- ---------------------------------------------------
TOTAL NUMBER OF
SHARE SHARES EVIDENCED NUMBER OF
CERTIFICATE BY SHARE SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
--------------- ----------------- ---------------
<S> <C> <C> <C>
--------------- ----------------- ---------------
--------------- ----------------- ---------------
--------------- ----------------- ---------------
--------------- ----------------- ---------------
TOTAL SHARES
- ----------------------------------------------- ---------------------------------------------------
</TABLE>
[ ] Check here if tendering Preferred Shares.
* Need not be completed by shareholders delivering Shares by book-entry
transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced
by each Share Certificate delivered to the
Depositary are being tendered hereby. See Instruction 4.
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS
LETTER OF TRANSMITTAL CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to WEC Acquisition Corporation, a Delaware
corporation ("Purchaser") and a wholly owned subsidiary of Danaher
Corporation, a Delaware corporation ("Parent"), the above- described common
shares, par value $1 per share, including the associated rights (the
"Rights") issued pursuant to the Rights Agreement (the "Rights Agreement"),
dated as of March 11, 1996, as amended, between the Company and Society
National Bank, as Rights Agent (the "Common Shares"), and the above-described
Series A Convertible Preferred Shares, without par value (the "Preferred
Shares" and, together with the Common Shares, the "Shares"), of
Acme-Cleveland Corporation, an Ohio corporation (the "Company"), upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
March 7, 1996 (the "Offer to Purchase"), as amended and supplemented by the
Supplement thereto dated June 5, 1996 (the "Supplement") and the related
Letter of Transmittal (which, as amended from time to time, collectively
constitute the "Offer"), receipt of which is hereby acknowledged. The
undersigned understands that Purchaser reserves the right to transfer or assign,
in whole or from time to time in part, to one or more of its affiliates, the
right to purchase all or any portion of the Shares tendered pursuant to the
Offer.
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith, in accordance with the terms of the Offer (including, if
the Offer is extended or amended, the terms and conditions of such extension
or amendment), the undersigned hereby sells, assigns and transfers to, or
upon the order of, Purchaser all right, title and interest in and to all the
Shares that are being tendered hereby and all dividends, distributions
(including, without limitation, distributions of additional Shares) and
rights declared, paid or distributed in respect of such Shares on or after
March 5, 1996 (collectively, "Distributions"), and irrevocably appoints the
Depositary the true and lawful agent and attorney-in-fact of the undersigned
with respect to such Shares and all Distributions, with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (i) deliver Share Certificates evidencing such
Shares and all Distributions, or transfer ownership of such Shares and all
Distributions on the account books maintained by a Book-Entry Transfer
Facility, together, in either case, with all accompanying evidences of
transfer and authenticity, to or upon the order of Purchaser, (ii) present
such Shares and all Distributions for transfer on the books of the Company
and (iii) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares and all Distributions, all in accordance
with the terms of the Offer.
By executing this Letter of Transmittal, the undersigned irrevocably
appoints Steven M. Rales, Mitchell P. Rales and Patrick W. Allender of the
Purchaser as proxies of the undersigned, each with full power of
substitution, to the full extent of the undersigned's rights with respect to
the Shares tendered by the undersigned
<PAGE>
and accepted for payment by the Purchaser (and any and all Distributions).
All such proxies shall be considered coupled with an interest in the tendered
Shares. This appointment will be effective if, when, and only to the extent
that, the Purchaser accepts such Shares for payment pursuant to the Offer.
Upon such acceptance for payment, all prior proxies given by the undersigned
with respect to such Shares (and such other Shares and securities) will,
without further action, be revoked, and no subsequent proxies may be given
nor any subsequent written consent executed by the undersigned (and, if given
or executed, will not be deemed to be effective) with respect thereto. The
designees of the Purchaser named above will, with respect to the Shares and
other securities for which the appointment is effective, be empowered to
exercise all voting and other rights of the undersigned as they in their sole
discretion may deem proper at any annual or special meeting of the
shareholders of the Company or any adjournment or postponement thereof, by
written consent in lieu of any such meeting or otherwise, and the Purchaser
reserves the right to require that, in order for Shares or other securities
to be deemed validly tendered, immediately upon the Purchaser's acceptance
for payment of such Shares, the Purchaser must be able to exercise full
voting rights with respect to such Shares.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and all Distributions, and that when such Shares are accepted
for payment by Purchaser, Purchaser will acquire good, marketable and
unencumbered title thereto and to all Distributions, free and clear of all
liens, restrictions, charges and encumbrances, and that none of such Shares
and Distributions will be subject to any adverse claim. The undersigned, upon
request, shall execute and deliver all additional documents deemed by the
Depositary or Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby and all Distributions.
In addition, the undersigned shall remit and transfer promptly to the
Depositary for the account of Purchaser all Distributions in respect of the
Shares tendered hereby, accompanied by appropriate documentation of transfer,
and, pending such remittance and transfer or appropriate assurance thereof,
Purchaser shall be entitled to all rights and privileges as owner of each
such Distribution and may withhold the entire purchase price of the Shares
tendered hereby or deduct from such purchase price, the amount or value of
such Distribution as determined by Purchaser in its sole discretion.
The Company has executed an amendment to the Rights Agreement that renders
the Rights inapplicable to the Offer. Accordingly, neither the Offer nor the
Merger will result in Parent or any of its Affiliates or Associates being
deemed an Acquiring Person or a Beneficial Owner (as such terms are defined
in the Rights Agreement).
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding
upon the heirs, personal representatives, successors and assigns of the
undersigned. Except as otherwise stated in the Offer to Purchase, as amended
and supplemented by the Supplement, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 2 of the Offer to Purchase and in the
instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the Offer. Purchaser's acceptance of such Shares for
payment will constitute a binding agreement between the undersigned and
Purchaser upon the terms and subject to the conditions of the Offer,
including, without limitation, the undersigned's representation and warranty
that the undersigned owns the Shares being tendered.
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the purchase price of all Shares
purchased, and return all Share Certificates evidencing Shares not purchased
or not tendered, in the name(s) of the registered holder(s) appearing above
under "Description of Shares Tendered." Similarly, unless otherwise indicated
in the box entitled "Special Delivery Instructions," please mail the check
for the purchase price of all Shares purchased and all Share Certificates
evidencing Shares not tendered or not purchased (and accompanying documents,
as appropriate) to the address(es) of the registered holder(s) appearing
above under "Description of Shares Tendered." In the event that the boxes
entitled "Special Payment Instructions" and "Special Delivery Instructions"
are both completed, please issue the check for the purchase price of all
Shares purchased and return all Share Certificates evidencing Shares not
purchased or not tendered in the name(s) of, and mail such check and Share
Certificates to, the person(s) so indicated. The undersigned recognizes that
Purchaser has no obligation, pursuant to the Special Payment Instructions, to
transfer any Shares from the name of the registered holder(s) thereof if
Purchaser does not purchase any of the Shares tendered hereby.
<PAGE>
=============================================================================
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares purchased
or Share Certificates evidencing Shares not tendered or not purchased are to
be issued in the name of someone other than the undersigned.
Issue [ ] check [ ] Share Certificate(s) to:
Name:
-----------------------------------------------------------------------
(Print)
Address:
--------------------------------------------------------------------
- -----------------------------------------------------------------------------
(Zip Code)
- -----------------------------------------------------------------------------
Taxpayer identification or Social Security Number
(See Substitute Form W-9 on reverse side)
=============================================================================
=============================================================================
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares purchased
or Share Certificates evidencing Shares not tendered or not purchased are to
be mailed to someone other than the undersigned, or to the undersigned at an
address other than that shown under "Description of Shares Tendered."
Mail [ ] check [ ] Share Certificate(s) to:
Name:
-----------------------------------------------------------------------
(Print)
Address:
--------------------------------------------------------------------
- -----------------------------------------------------------------------------
(Zip Code)
=============================================================================
<PAGE>
=============================================================================
IMPORTANT
SHAREHOLDERS: SIGN HERE
(Also Please Complete Substitute Form W-9 Included Herein)
X
- -----------------------------------------------------------------------------
X
- -----------------------------------------------------------------------------
SIGNATURE(S) OF HOLDER(S)
Dated:________________ , 1996
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
Share Certificates or on a security position listing or by a person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney- in-fact, officer of a corporation or other person acting
in a fiduciary or representative capacity, please provide the following
information. See Instruction 5.)
Name(s):
--------------------------------------------------------------------
- -----------------------------------------------------------------------------
(Please Print)
Capacity (full title):
------------------------------------------------------
Address:
--------------------------------------------------------------------
- -----------------------------------------------------------------------------
(include Zip Code)
Area Code and Telephone No.:
------------------------------------------------
Taxpayer Identification or Social Security No.:
-----------------------------
(See Substitute Form W-9
Included Herein)
GUARANTEE OF SIGNATURE(S)
(If Required--See Instructions 1 and 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE
IN SPACE BELOW.
=============================================================================
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. All signatures on this Letter of Transmittal
must be guaranteed by a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers,
Inc., or by a financial institution (including most commercial banks, savings
and loan associations and brokerage houses) that is a participant in the
Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(an "Eligible Institution"), unless (i) this Letter of Transmittal is signed
by the registered holder(s) of the Shares (which term, for purposes of this
document, shall include any participant in a Book-Entry Transfer Facility
whose name appears on a security position listing as the owner of Shares)
tendered hereby and such holder(s) has (have) completed neither the box
entitled "Special Payment Instructions" nor the box entitled "Special
Delivery Instructions" on the reverse hereof or (ii) such Shares are tendered
for the account of an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES. This Letter
of Transmittal is to be used either if Share Certificates are to be forwarded
herewith or if Shares are to be delivered by book-entry transfer pursuant to
the procedure set forth in Section 2 of the Offer to Purchase. Share
Certificates evidencing all physically tendered Shares, or a confirmation of
a book-entry transfer into the Depositary's account at a Book-Entry Transfer
Facility of all Shares delivered by book-entry transfer as well as a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) and
any other documents required by this Letter of Transmittal, must be received
by the Depositary at one of its addresses set forth on the reverse hereof
prior to the Expiration Date (as defined in Section l of the Supplement). If
Share Certificates are forwarded to the Depositary in multiple deliveries, a
properly completed and duly executed Letter of Transmittal must accompany each
such delivery. Shareholders whose Share Certificates are not immediately
available, who cannot deliver their Share Certificates and all other required
documents to the Depositary prior to the Expiration Date or who cannot complete
the procedure for delivery by book-entry transfer on a timely basis may tender
their Shares pursuant to the guaranteed delivery procedure described in Section
2 of the Offer to Purchase. Pursuant to such procedure: (i) such tender must be
made by or through an Eligible Institution; (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form made available
by Purchaser, must be received by the Depositary prior to the Expiration Date;
and (iii) the Share Certificates evidencing all physically delivered Shares in
proper form for transfer by delivery, or a confirmation of a book-entry transfer
into the Depositary's account at a Book-Entry Transfer Facility of all Shares
delivered by book-entry transfer, in each case together with a Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed,
with any required signature guarantees, and any other documents required by
this Letter of Transmittal, must be received by the Depositary within three
New York Stock Exchange, Inc. ("NYSE") trading days after the date of
execution of such Notice of Guaranteed Delivery, all as described in Section
2 of the Offer to Purchase.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER,
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. By execution of this Letter of
Transmittal (or a facsimile hereof), all tendering shareholders waive any
right to receive any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein under "Description of
Shares Tendered" is inadequate, the Share Certificate numbers, the number of
Shares evidenced by such Share Certificates and the number of Shares tendered
should be listed on a separate schedule and attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER). If fewer than all the Shares evidenced by any Share
Certificate delivered to the Depositary herewith are to be tendered hereby,
fill in the number of Shares which are to be tendered in the box entitled
"Number of Shares Tendered." In such
<PAGE>
cases, new Share Certificate(s) evidencing the remainder of the Shares that
were evidenced by the Share Certificates delivered to the Depositary herewith
will be sent to the person(s) signing this Letter of Transmittal, unless
otherwise provided in the box entitled "Special Delivery Instructions" on the
reverse hereof, as soon as practicable after the expiration or termination of
the Offer. All Shares evidenced by Share Certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, the signature(s) must correspond with the name(s) as
written on the face of the Share Certificates evidencing such Shares without
alteration, enlargement or any other change whatsoever.
If any Share tendered hereby is owned of record by two or more persons,
all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in the names of
different holders, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of such
Shares.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Share Certificates or separate
stock powers are required, unless payment is to be made to, or Share
Certificates evidencing Shares not tendered or not purchased are to be issued
in the name of, a person other than the registered holder(s), in which case,
the Share Certificate(s) evidencing the Shares tendered hereby must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear(s) on such Share
Certificate(s). Signatures on such Share Certificate(s) and stock powers must
be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Share Certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such Share Certificate(s). Signatures on
such Share Certificate(s) and stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to Purchaser of such person's authority so to
act must be submitted.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or
Share Certificate(s) evidencing Shares not tendered or not purchased are to
be issued in the name of, a person other than the registered holder(s), the
amount of any stock transfer taxes (whether imposed on the registered
holder(s), such other person or otherwise) payable on account of the transfer
to such other person will be deducted from the purchase price of such Shares
purchased, unless evidence satisfactory to Purchaser of the payment of such
taxes, or exemption therefrom, is submitted. Except as provided in this
Instruction 6, it will not be necessary for transfer tax stamps to be affixed
to the Share Certificates evidencing the Shares tendered hereby.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase
price of any Shares tendered hereby is to be issued, or Share Certificate(s)
evidencing Shares not tendered or not purchased are to be issued, in the name
of a person other than the person(s) signing this Letter of Transmittal or if
such check or any such Share Certificate is to be sent to someone other than
the person(s) signing this Letter of Transmittal or to the person(s) signing
this Letter of Transmittal but at an address other than that shown in the box
entitled "Description of Shares Tendered" on the reverse hereof, the
appropriate boxes on the reverse of this Letter of Transmittal must be
completed.
8. WAIVER OF CONDITIONS. The conditions to the Offer may be waived by the
Purchaser in whole or in part at any time and from time to time in its sole
discretion.
<PAGE>
9. QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions
and requests for assistance may be directed to the Dealer Manager or the
Information Agent at their respective addresses or telephone numbers set
forth below. Additional copies of the Offer to Purchase, the Supplement, this
revised Letter of Transmittal and the revised Notice of Guaranteed Delivery
may be obtained from the Information Agent or from brokers, dealers,
commercial banks or trust companies.
10. SUBSTITUTE FORM W-9. Each tendering shareholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information"
below, and to certify, under penalties of perjury, that such number is
correct and that such shareholder is not subject to backup withholding of
federal income tax. If a tendering shareholder has been notified by the
Internal Revenue Service that such shareholder is subject to backup
withholding, such shareholder must cross out item (2) of the Certification
box of the Substitute Form W-9, unless such shareholder has since been
notified by the Internal Revenue Service that such shareholder is no longer
subject to backup withholding. Failure to provide the information on the
Substitute Form W-9 may subject the tendering shareholder to 31% federal
income tax withholding on the payment of the purchase price of all Shares
purchased from such shareholder. If the tendering shareholder has not been
issued a TIN and has applied for one or intends to apply for one in the near
future, such shareholder should write "Applied For" in the space provided for
the TIN in Part I of the Substitute Form W-9, and sign and date the
Substitute Form W-9. If "Applied For" is written in Part l and the Depositary
is not provided with a TIN within 60 days, the Depositary will withhold 31%
on all payments of the purchase price to such shareholder until a TIN is
provided to the Depositary.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES
AND SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER
REQUIRED DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF
GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE
EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE).
IMPORTANT TAX INFORMATION
Under the federal income tax law, a shareholder whose tendered Shares are
accepted for payment is required by law to provide the Depositary (as payer)
with such shareholder's correct TIN on Substitute Form W-9 below. If such
shareholder is an individual, the TIN is such shareholder's social security
number. If the Depositary is not provided with the correct TIN, the
shareholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such shareholder with respect
to Shares purchased pursuant to the Offer may be subject to backup
withholding of 31%.
Certain shareholders (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, such individual must submit a statement, signed under
penalties of perjury, attesting to such individual's exempt status. Forms of
such statements can be obtained from the Depositary. See the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 for additional instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the shareholder. 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 from the
Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a shareholder
with respect to Shares purchased pursuant to the Offer, the shareholder is
required to notify the Depositary of such shareholder's correct TIN by
completing the form below certifying (a) that the TIN provided on Substitute
Form W-9 is correct (or that such shareholder is awaiting a TIN), and (b)
that (i) such shareholder has not been notified by the Internal Revenue
Service that such shareholder is subject to backup withholding as a result of
a failure to
<PAGE>
report all interest or dividends or (ii) the Internal Revenue Service has
notified such shareholder that such shareholder is no longer subject to
backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If the Shares are in more than one name or are not in the
name of the actual owner, consult the enclosed Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9 for additional
guidance on which number to report. If the tendering shareholder has not been
issued a TIN and has applied for a number or intends to apply for a number in
the near future, the shareholder should write "Applied For" in the space
provided for the TIN in Part I, and sign and date the Substitute Form W-9. If
"Applied For" is written in Part I and the Depositary is not provided with a
TIN within 60 days, the Depositary will withhold 31% of all payments of the
purchase price to such shareholder until a TIN is provided to the Depositary.
<PAGE>
ALL TENDERING SHAREHOLDERS MUST COMPLETE THE FOLLOWING:
<TABLE>
PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SUBSTITUTE PART I--Taxpayer Identification Number-- -------------------------------------
Form W-9 For all accounts, enter taxpayer Social Security Number
Depart of identification number in the box at right.
the Treasury (For most individuals, this is your social
Internal Revenue security number. If you do not have a OR __________________________________
Service number, see Obtaining a Number in the Employer Identification
enclosed Guidelines.) Certify by signing Number
PAYER'S and dating below. Note: If the account is in
REQUEST FOR more than one name, see the chart in the
TAXPAYER enclosed Guidelines to determine which
IDENTIFICATION number to give the payer.
NUMBER (If awaiting TIN write
(TIN) "Applied For")
PART II--For Payees Exempt From Backup Withholding, see the enclosed Guidelines
and complete as instructed therein.
CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or
I am waiting for a number to be issued to me), and
(2) I am not subject to backup withholding either because I have not been notified by
the Internal Revenue Service (the "IRS") that I am subject to backup withholding
as a result of failure to report all interest or dividends, or the IRS has notified me
that I am no longer subject to backup withholding.
CERTIFICATE INSTRUCTIONS--You must cross out item (2) above if you have been notified by
the IRS that you are subject to backup withholding because of underreporting interest
or dividends on your tax return. However, if after being notified by the IRS that you were
subject to backup withholding you received another notification from the IRS that you
are no longer subject to backup withholding, do not cross out item (2). (Also see
instructions in the enclosed Guidelines.)
------------------------------------------------------------------------------------------
SIGNATURE ............................................... DATE .................., 1996
- --------------------------------------------------------------------------------------------------------------------
</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 OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
The Information Agent for the Offer is:
D.F. King & Co., Inc.
77 Water Street
New York, New York 10005
Call Collect (212) 269-5550
OR
CALL TOLL FREE (800) 628-8532
The Dealer Manager for the Offer is:
Merrill Lynch & Co.
World Financial Center
North Tower
New York, New York 10281-1305
(212) 236-4565 (Call Collect)
June 5, 1996
<PAGE>
SUPPLEMENT TO THE OFFER TO PURCHASE
WEC ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
DANAHER CORPORATION
HAS INCREASED THE PRICE OF ITS OFFER
TO PURCHASE FOR CASH ALL OUTSTANDING
COMMON SHARES (INCLUDING THE ASSOCIATED RIGHTS)
AND
SERIES A CONVERTIBLE PREFERRED SHARES
OF
ACME-CLEVELAND CORPORATION
TO
$30 NET PER SHARE
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON JULY 2, 1996, UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
June 5, 1996
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by WEC Acquisition Corporation, a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Danaher
Corporation, a Delaware corporation ("Parent"), to act as Dealer Manager in
connection with the Purchaser's offer to purchase all outstanding common
shares, par value $1 per share, including the associated rights (the
"Rights") issued pursuant to the Rights Agreement (the "Rights Agreement"),
dated as of March 11, 1996, as amended, between the Company and Society
National Bank, as Rights Agent (the "Common Shares"), and all outstanding
Series A Convertible Preferred Shares, without par value (the "Preferred
Shares" and, together with the Common Shares, the "Shares"), of Acme-Cleveland
Corporation, an Ohio corporation (the "Company"), at a price of $30 per
Share, net to the seller in cash, without interest thereon (the "Offer
Price"), upon the terms and subject to the conditions set forth in the Offer
to Purchase, dated March 7, 1996 (the "Offer to Purchase"), as amended and
supplemented by the Supplement thereto dated June 5, 1996 (the "Supplement"),
and in the related Letter of Transmittal (which, as amended from time to
time, together constitute the "Offer"). The Supplement and the Letter of
Transmittal are enclosed herewith.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED A NUMBER OF SHARES WHICH, WHEN ADDED TO THE SHARES BENEFICIALLY
OWNED BY PARENT AND ANY OF ITS AFFILIATES, WOULD REPRESENT AT LEAST A MAJORITY
OF THE SHARES OUTSTANDING ON A FULLY DILUTED BASIS IMMEDIATELY PRIOR TO THE
EXPIRATION OF THE OFFER, AND (2) THE ACQUISITION OF SHARES PURSUANT TO THE OFFER
BEING AUTHORIZED BY THE SHAREHOLDERS OF THE COMPANY PURSUANT TO THE OHIO CONTROL
SHARE ACQUISITION LAW. SEE SECTION 9 OF THE SUPPLEMENT. THE OFFER IS NOT
CONDITIONED ON THE RECEIPT OF FINANCING.
<PAGE>
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares registered in your name or in the name of
your nominee. The Company has executed an amendment to the Rights Agreement
that renders the Rights inapplicable to the Offer. Accordingly, neither the
Offer nor the Merger will result in Parent or any of its Affiliates or
Associates being deemed an Acquiring Person of a Beneficial Owner (as such
terms are defined in the Rights Agreement).
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, or who hold
Shares registered in their own names, we are enclosing the following
documents:
1. The Supplement, dated June 5, 1996;
2. The revised green Letter of Transmittal to be used by holders of
Shares in accepting the Offer and tendering Shares;
3. The revised yellow Notice of Guaranteed Delivery to be used to accept
the Offer if the certificates evidencing such Shares (the "Share
Certificates") are not immediately available or time will not permit all
required documents to reach the Depositary (as defined in the Offer to
Purchase) prior to the Expiration Date (as defined in the Supplement)
or the procedure for book-entry transfer cannot be completed on a timely
basis;
4. A letter which may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominees, with
space provided for obtaining such clients' instructions with regard to the
Offer;
5. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9;
6. A return envelope addressed to the Depositary; and
7. Amendment No. 5, dated June 5, 1996, to the Schedule 14D-9 originally
filed on March 20, 1996 by the Company.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such
extension or amendment), the Purchaser will purchase, by accepting for
payment, and will pay for the Shares validly tendered prior to the Expiration
Date promptly after the Expiration Date. For purposes of the Offer, the
Purchaser will be deemed to have accepted for payment, and thereby purchased,
tendered Shares as, if and when the Purchaser gives oral or written notice to
the Depositary of the Purchaser's acceptance of such Shares for payment
pursuant to the Offer. In all cases, payment for Shares purchased pursuant to
the Offer will be made only after timely receipt by the Depositary of (i) the
Share Certificates or timely confirmation of a book-entry transfer of such
Shares, if such procedure is available, into the Depositary's account at The
Depository Trust Company, the Midwest Securities Trust Company or the
Philadelphia Depository Trust Company pursuant to the procedures set forth in
Section 2 of the Offer to Purchase, (ii) the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message (as defined in Section 2 of the
Offer to Purchase) and (iii) any other documents required by the Letter of
Transmittal.
The Purchaser will not pay any fees or commissions to any broker or dealer
or any other person (other than the Dealer Manager, the Information Agent and
the Depositary as described in Section 16 of the Offer to Purchase) in
connection with the solicitation of tenders of Shares pursuant to the Offer.
The Purchaser will, however, upon request, reimburse you for customary
mailing and handling expenses incurred by you in forwarding the enclosed
materials to your clients.
The Purchaser will pay any stock transfer taxes incident to the transfer
to it of validly tendered Shares, except as otherwise provided in Instruction
6 of the Letter of Transmittal.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00
P.M., NEW YORK CITY TIME, ON JULY 2, 1996, UNLESS THE OFFER IS EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or a facsimile thereof), with any required
signature guarantees and any other required documents, should be sent to the
Depositary, and certificates evidencing the tendered Shares should be
delivered or such Shares should be tendered by book-entry transfer, all in
accordance with the Instructions set forth in the Letter of Transmittal and
the Offer to Purchase.
If holders of Shares wish to tender Shares, but it is impracticable for
them to forward their Share Certificates or other required documents to the
Depositary prior to the Expiration Date or to comply with the procedures for
book-entry transfer on a timely basis, a tender may be effected by following
the guaranteed delivery procedures specified under Section 2 of the Offer to
Purchase.
2
<PAGE>
Any inquiries you may have with respect to the Offer should be addressed
to D.F. King & Co., Inc., the Information Agent, or Merrill Lynch, Pierce,
Fenner & Smith Incorporated, the Dealer Manager, at their respective
addresses and telephone numbers set forth on the back cover page of the Offer
to Purchase.
Additional copies of the enclosed materials and the Offer to Purchase may be
obtained by calling D.F. King & Co., Inc., the Information Agent, collect at
(212) 269-5550 or toll-free at (800) 628-8532, or from brokers, dealers,
commercial banks or trust companies.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON AS AN AGENT OF PARENT, THE PURCHASER, THE COMPANY, THE
DEPOSITARY, THE INFORMATION AGENT OR THE DEALER MANAGER, OR ANY AFFILIATE OF
ANY OF THE FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY
DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH
THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED, AND THE OFFER TO PURCHASE, AND THE
STATEMENTS CONTAINED THEREIN.
3
<PAGE>
SUPPLEMENT TO THE OFFER TO PURCHASE
WEC ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
DANAHER CORPORATION
HAS INCREASED THE PRICE OF ITS OFFER
TO PURCHASE FOR CASH ALL OUTSTANDING
COMMON SHARES (INCLUDING THE ASSOCIATED RIGHTS)
AND
SERIES A CONVERTIBLE PREFERRED SHARES
OF
ACME-CLEVELAND CORPORATION
TO
$30 NET PER SHARE
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME ON JULY 2, 1996, UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
June 5, 1996
To Our Clients:
Enclosed for your consideration is a Supplement, dated June 5, 1996 (the
"Supplement"), to the Offer to Purchase, dated March 7, 1996 (the "Offer to
Purchase"), and the related Letter of Transmittal (which, as amended from
time to time, together constitute the "Offer") in connection with the Offer
by WEC Acquisition Corporation, a Delaware corporation (the "Purchaser"), and
a wholly owned subsidiary of Danaher Corporation, a Delaware corporation
("Parent"), to purchase all outstanding common shares, par value $1 per
share, including the associated rights (the "Rights") issued pursuant to the
Rights Agreement (the "Rights Agreement"), dated as of March 11, 1996, as
amended, between the Company and Society National Bank, as Rights Agent (the
"Common Shares"), and all outstanding Series A Convertible Preferred Shares,
without par value (the "Preferred Shares" and, together with the Common
Shares, the "Shares"), of Acme-Cleveland Corporation, an Ohio corporation
(the "Company"), at a price of $30 per Share, net to the seller in cash,
without interest thereon (the "Offer Price"), upon the terms and subject to
the conditions set forth in the Offer to Purchase, as amended and
supplemented by the Supplement.
Shareholders whose certificates evidencing Shares ("Share Certificates")
are not immediately available or who cannot deliver their Share Certificates
and all other documents required by the Letter of Transmittal to the
Depositary prior to the Expiration Date (as defined in the Supplement)
or who cannot complete the procedure for delivery by book-entry transfer to
the Depositary's account at a Book-Entry Transfer Facility (as defined in
Section 2 of the Offer to Purchase) on a timely basis and who wish to tender
their Shares must do so pursuant to the guaranteed delivery procedure
described in Section 2 of the Offer to Purchase. See Instruction 2 of the
Letter of Transmittal. Delivery of documents to a Book-Entry Transfer
Facility in accordance with the Book-Entry Transfer Facility's procedures
does not constitute delivery to the Depositary.
THE MATERIAL IS BEING SENT TO YOU AS THE BENEFICIAL OWNER OF SHARES HELD
BY US FOR YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. WE ARE THE HOLDER OF
RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE
MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS.
THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND
CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT.
<PAGE>
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares held by us for your account, upon the terms
and subject to the conditions set forth in the Offer to Purchase, as amended
and supplemented by the Supplement.
Your attention is invited to the following:
1. The tender price is $30 per Share, net to the seller in cash,
without interest thereon.
2. The Offer and withdrawal rights will expire at 5:00 p.m., New York
City time, on July 2, 1996, unless the Offer is extended.
3. The Offer is being made for all outstanding Shares.
4. The Offer is conditioned upon, among other things, (1) there being
validly tendered a number of Shares which, when added to the Shares
beneficially owned by Parent, would represent at least a majority of the
Shares outstanding on a fully diluted basis on the date of purchase and
(2) the acquisition of Shares pursuant to the Offer being authorized by
the shareholders of the Company pursuant to the Ohio Control Share
Acquisition Law. See Section 9 of the Supplement.
5. The Offer is not conditioned on the receipt of financing.
Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by the Purchaser
pursuant to the Offer.
The Offer is made solely by the Offer to Purchase, the Supplement and the
related Letter of Transmittal. The Offer is not being made to (nor will
tenders be accepted from or on behalf of) holders of Shares in any
jurisdiction in which the making of the Offer or the acceptance thereof would
not be in compliance with the securities, blue sky or other laws of such
jurisdiction. Neither the Purchaser nor Parent is aware of any jurisdiction
in which the making of the Offer or the acceptance thereof would not be in
compliance with the laws of such jurisdiction. To the extent the Purchaser or
Parent becomes aware of any state law that would limit the class of offerees
in the Offer, the Purchaser will amend the Offer and, depending on the timing
of such amendment, if any, will extend the Offer to provide adequate
dissemination of such information to such holders of shares prior to the
expiration of the Offer. In any jurisdiction the securities, blue sky or
other laws of which require the Offer to be made by a licensed broker or
dealer, the Offer is being made on behalf of the Purchaser by the Dealer
Manager or one or more registered brokers or dealers licensed under the laws
of such jurisdiction.
Shareholders who have previously validly tendered and not properly
withdrawn their Shares pursuant to the Offer are not required to take any
further action, except as may be required by the procedure for guaranteed
delivery if such procedure was utilized. If Shares are accepted for payment
and paid for by the Purchaser pursuant to the Offer, such shareholders will
receive, subject to the conditions of the Offer, the increased price of $30
per Share.
If you wish to have us tender any or all of your Shares, please so
instruct us by completing, executing and returning to us the instruction form
contained in this letter. An envelope in which to return your instructions to
us is enclosed. If you authorize the tender of your Shares, all such Shares
will be tendered unless otherwise specified on the instruction form contained
in this letter. Your instructions should be forwarded to us in ample time to
permit us to submit a tender on your behalf prior to the expiration of the
Offer.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE SUPPLEMENT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING COMMON SHARES (INCLUDING THE ASSOCIATED RIGHTS)
AND
SERIES A CONVERTIBLE PREFERRED SHARES
OF
ACME-CLEVELAND CORPORATION
The undersigned acknowledge(s) receipt of your letter dated June 5, 1996, and
the Offer to Purchase, dated March 7, 1996, as amended and supplemented by the
Supplement thereto, dated June 5, 1996 (the "Supplement"), and the related
Letter of Transmittal (which, as amended from time to time, together constitute
the "Offer"), in connection with the Offer by WEC Acquisition Corporation, a
Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Danaher
Corporation, a Delaware corporation ("Parent"), to purchase all outstanding
common shares, par value $1 per share, including the associated rights (the
"Rights") issued pursuant to the Rights Agreement (the "Rights Agreement"),
dated as of March 11, 1996, as amended, between the Company and Society National
Bank, as Rights Agent (the "Common Shares"), and all outstanding Series A
Convertible Preferred Shares, without par value (the "Preferred Shares" and,
together with the Common Shares, the "Shares"), of Acme-Cleveland Corporation,
an Ohio corporation (the "Company"), at a price equal to $30 per Share, net to
the seller in cash.
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or, if no number is indicated below, all Shares) held by you
for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer to Purchase, as amended and supplemented by
the Supplement.
Number of Shares to be Tendered*
_____________ Shares
Account Number:
---------------
Dated:__________________ , 1996
SIGN HERE
-------------------------------
-------------------------------
Signature(s)
-------------------------------
-------------------------------
Please type or print name(s)
-------------------------------
-------------------------------
-------------------------------
Please type or print
address(es) here
-------------------------------
Area Code and Telephone Number
-------------------------------
Taxpayer Identification or
Social Security Number(s)
- ------------
* Unless otherwise indicated, it will be assumed that all Shares held by
us for your account are to be tendered.
3
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF COMMON SHARES
(INCLUDING THE ASSOCIATED RIGHTS)
AND
SERIES A CONVERTIBLE PREFERRED SHARES
OF
ACME-CLEVELAND CORPORATION
TO
WEC ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
DANAHER CORPORATION
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to accept the Offer (as defined below) if (i)
certificates ("Share Certificates") evidencing common shares, par value $1
per share, including the associated rights (the "Rights") issued pursuant to
the Rights Agreement (the "Rights Agreement"), dated as of March 11, 1996, as
amended, between the Company and Society National Bank, as Rights Agent (the
"Common Shares"), or Series A Convertible Preferred Shares, without par value
(the "Preferred Shares" and, together with the Common Shares, the "Shares"),
of Acme-Cleveland Corporation, an Ohio corporation (the "Company"), are not
immediately available, (ii) time will not permit all required documents to
reach First Chicago Trust Company of New York, as Depositary (the
"Depositary"), prior to the Expiration Date (as defined in Section 1 of the
Supplement referred to below) or (iii) the procedure for book-entry transfer
cannot be completed on a timely basis. This Notice of Guaranteed Delivery may
be delivered by hand or transmitted by telegram, facsimile transmission or
mail to the Depositary. See Section 2 of the Offer to Purchase.
THE DEPOSITARY FOR THE OFFER IS:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
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<CAPTION>
<S> <C> <C>
By Mail: By Facsimile By Hand:
P.O. Box 2559 (201) 222-4720 14 Wall Street
Suite 4660-WEC or Eighth Floor
Jersey City, New Jersey 07303-2559 (201) 222-4721 Suite 4680-WEC
New York, New York 10005
Confirm Receipt of Notice of Guaranteed Delivery by telephone:
(201) 222-4707
</TABLE>
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to WEC Acquisition Corporation, a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Danaher
Corporation, a Delaware corporation ("Parent"), upon the terms and subject to
the conditions set forth in the Offer to Purchase, dated March 7, 1996 (the
"Offer to Purchase"), as amended and supplemented by the Supplement thereto
dated June 5, 1996 (the "Supplement"), and the related Letter of Transmittal
(which, as amended from time to time, together constitute the "Offer"),
receipt of each of which is hereby acknowledged, the number of Shares specified
below pursuant to the guaranteed delivery procedures described in Section 2 of
the Offer to Purchase.
[ ] Check here if tendering Preferred Shares
Number of Shares:
-----------------------------------------------------------
Certificate Nos. (if available):
--------------------------------------------
Check ONE box if Shares will be tendered by book-entry transfer:
[ ] The Depository Trust Company
[ ] Midwest Securities Trust Company
[ ] Philadelphia Depository Trust Company
Account Number:
-------------------------------------------------------------
Dated:___________________ , 1996
Name(s) of Record Holder(s):
------------------------------------------------
------------------------------------------------
PLEASE PRINT
Address(es):
----------------------------------------------------------------
- -----------------------------------------------------------------------------
ZIP CODE
Company Area Code and Tel. No.:
---------------------------------------------
Area Code and Tel. No.:
-----------------------------------------------------
Signature(s):
---------------------------------------------------------------
- -----------------------------------------------------------------------------
2
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
The undersigned, a firm that is a commercial bank, broker, dealer, credit
union, savings association or other entity which is a member in good standing
of the Securities Transfer Agents Medallion Program, the New York Stock
Exchange Medallion Signature Guarantee Program or the Stock Exchange
Medallion Program hereby (a) represents that the tender of Shares effected
hereby complies with Rule 14e-4 of the Securities Exchange Act of 1934, as
amended, and (b) guarantees delivery to the Depositary, at one of its
addresses set forth above, of Share Certificates evidencing the Shares
tendered hereby in proper form for transfer, or confirmation of book-entry
transfer of such Shares into the Depositary's accounts at The Depository
Trust Company, the Midwest Securities Trust Company or the Philadelphia
Depository Trust Company, in each case with delivery of a properly completed
and duly executed Letter of Transmittal (or a facsimile thereof) with any
required signature guarantees, or an Agent's Message (as defined in Section 2
of the Offer to Purchase), and any other documents required by the Letter of
Transmittal, within three New York Stock Exchange, Inc. trading days after
the date of execution of this Notice of Guaranteed Delivery.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
Share Certificates to the Depositary within the time period shown herein.
Failure to do so could result in financial loss to such Eligible Institution.
- -----------------------------------------------------------------------------
NAME OF FIRM
- -----------------------------------------------------------------------------
ADDRESS
- -----------------------------------------------------------------------------
ZIP CODE
Area Code and Tel. No.:
-----------------------------------------------------
- -----------------------------------------------------------------------------
AUTHORIZED SIGNATURE
- -----------------------------------------------------------------------------
TITLE
Name:
-----------------------------------------------------------------------
PLEASE PRINT
Date:______________________ , 1996
NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE OF GUARANTEED DELIVERY.
SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
3
AGREEMENT AND PLAN OF MERGER
DATED AS OF
MAY 31, 1996
AMONG
ACME-CLEVELAND CORPORATION,
DANAHER CORPORATION,
AND
WEC ACQUISITION CORPORATION
<PAGE>
TABLE OF CONTENTS
<TABLE>
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ARTICLE I
THE TENDER OFFER AND MERGER......................... 1
SECTION 1.01. 831 Meeting; Tender Offer......................... 1
SECTION 1.02. The Merger........................................ 4
SECTION 1.03. Conversion of Shares.............................. 5
SECTION 1.04. Surrender and Payment............................. 5
SECTION 1.05. Company Options................................... 7
SECTION 1.06. Company Performance Plan.......................... 7
ARTICLE II
THE SURVIVING CORPORATION; THE PARENT DIRECTORS............ 8
SECTION 2.01. Articles of Incorporation......................... 8
SECTION 2.02. Regulations....................................... 8
SECTION 2.03. Directors and Officers............................ 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY............ 8
SECTION 3.01. Corporate Existence and Power..................... 8
SECTION 3.02. Corporate Authorization........................... 9
SECTION 3.03. Governmental Authorization........................ 9
SECTION 3.04. Non-Contravention................................. 9
SECTION 3.05. Capitalization.................................... 10
SECTION 3.06. Subsidiaries...................................... 11
SECTION 3.07. Company SEC Reports............................... 12
SECTION 3.08. Financial Statements; No Undisclosed
Liabilities....................................... 13
SECTION 3.09. Absence of Certain Changes........................ 13
SECTION 3.10. Litigation........................................ 14
SECTION 3.11. ERISA............................................. 14
SECTION 3.12. Taxes............................................. 17
SECTION 3.13. Intellectual Property Rights...................... 18
SECTION 3.14. Environmental Protection.......................... 19
SECTION 3.15. Finders and Investment Bankers.................... 20
SECTION 3.16. Vote Required..................................... 20
SECTION 3.17. Company Rights Agreement.......................... 21
SECTION 3.18. Takeover Statutes................................. 21
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE PARENT AND MERGER SUB........................ 22
SECTION 4.01. Corporate Existence and Power..................... 22
</TABLE>
i
<PAGE>
<TABLE>
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SECTION 4.02. Corporate Authorization........................... 22
SECTION 4.03. Governmental Authorization........................ 23
SECTION 4.04. Non-Contravention................................. 23
SECTION 4.05. Reports........................................... 24
SECTION 4.06. Financial Statements; No Undisclosed
Liabilities....................................... 24
SECTION 4.07. Litigation........................................ 25
SECTION 4.08. Vote Required..................................... 25
SECTION 4.09. Availability of Funds............................. 25
ARTICLE V
COVENANTS OF THE COMPANY........................ 26
SECTION 5.01. Conduct of the Company............................ 26
SECTION 5.02. Access to Information............................. 27
SECTION 5.03. Other Offers...................................... 28
SECTION 5.04. Notices of Certain Events......................... 28
SECTION 5.05. Merger Meeting; Proxy Statement................... 29
ARTICLE VI
COVENANTS OF THE PARENT AND MERGER SUB................... 30
SECTION 6.01. Director, Officer, and Employee Liability......... 30
SECTION 6.02. Employee Benefits................................. 30
ARTICLE VII
COVENANTS OF THE PARENT, MERGER SUB, AND THE COMPANY.......... 31
SECTION 7.01. Reasonable Efforts................................ 31
SECTION 7.02. Certain Filings and Consents...................... 31
SECTION 7.03. Public Announcements.............................. 32
SECTION 7.04. State Takeover Laws............................... 32
ARTICLE VIII
CONDITIONS TO THE MERGER........................... 32
SECTION 8.01. Conditions to the Obligations of Each
Party............................................. 32
SECTION 8.02. Conditions to the Obligations of the
Parent and Merger Sub............................. 33
ARTICLE IX
TERMINATION................................. 33
SECTION 9.01. Termination....................................... 33
SECTION 9.02. Effect of Termination............................. 34
ARTICLE X
MISCELLANEOUS.............................. 34
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
SECTION 10.01. Notices........................................... 34
SECTION 10.02. Survival.......................................... 35
SECTION 10.03. Amendments; No Waivers............................ 35
SECTION 10.04. Fees and Expenses................................. 36
SECTION 10.05. Successors and Assigns............................ 37
SECTION 10.06. Governing Law..................................... 37
SECTION 10.07. Counterparts; Effectiveness....................... 37
SECTION 10.08. Entire Agreement.................................. 37
SECTION 10.09. Headings.......................................... 38
SECTION 10.10. Severability...................................... 38
SECTION 10.11. Specific Performance.............................. 38
INDEX OF DEFINED TERMS ..................................................... 40
LIST OF SCHEDULES ..................................................... 41
</TABLE>
iii
<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of May
31, 1996 (this "Agreement"), is made by and between ACME-CLEVELAND
CORPORATION, an Ohio corporation (the "Company"), DANAHER CORPORATION, a
Delaware corporation (the "Parent"), and WEC ACQUISITION CORPORATION, a
Delaware corporation and wholly owned subsidiary of the Parent ("Merger Sub").
In consideration of the respective representations,
warranties, and agreements set forth herein, the parties agree as follows:
ARTICLE I
THE TENDER OFFER AND MERGER
SECTION 1.01. 831 Meeting; Tender Offer
(a) The Company will reconvene the Special Meeting
of Shareholders of the Company (the "831 Meeting") called for the purpose of
considering and acting upon a proposed "control share acquisition" of the
Company by Merger Sub, which was originally scheduled to be held on April 25,
1996, at the earliest practicable date. The methods for identifying
"interested shares," as defined in Section 1701.01(CC)(2) of the Ohio General
Corporation Law ("Ohio Law"), and for determining whether the related quorum
requirement is met at the 831 Meeting will be substantially as set forth in
Schedule 1.01(a) (831 Meeting Procedures). The Company will not postpone or
adjourn (other than for the absence of a quorum) the 831 Meeting without the
consent of the Parent, unless the Parent so requests. The Company's Board of
Directors will recommend that the Company's shareholders approve the proposed
"control share acquisition" at the 831 Meeting, unless (i) such recommendation
would not be consistent with the fiduciary duties of the Board of Directors
under applicable law, as advised by counsel, or (ii) this Agreement is
terminated in accordance with Article IX.
(b) As promptly as practicable, but in no event
later than five business days after the public announcement of the execution
of this Agreement, Merger Sub will, and the Parent will cause Merger Sub to,
amend and supplement its existing tender offer (as amended, the "Offer") to
provide that (i) the price to be paid thereunder for each outstanding Common
Share, $1 par value per share, of the Company, including the associated
Company Right (as defined in Section 3.05) (together with the Company Right, a
"Company Common Share"), and each Series A Convertible Preferred Share,
without par value, of the Company (a "Company A Preferred Share"; the Company
1
<PAGE>
Common Shares and the Company A Preferred Shares are collectively referred to
as "Company Shares") will be $30.00, (ii) the obligations of Merger Sub and
the Parent to consummate the Offer and to accept for payment and purchase the
Company Shares tendered in the Offer will be subject only to the conditions
set forth in Schedule 1.01(b) (Offer Conditions) (the "Offer Conditions"), and
(iii) the expiration date of the Offer will be extended until at least 5:00
p.m. on the date of the 831 Meeting. At the Company's request, Merger Sub
will, and the Parent will cause Merger Sub to, extend the expiration date of
the Offer from time to time for up to an aggregate of an additional ten
business days following the date of the 831 Meeting if the condition set forth
in clause (1) of the first paragraph of the Offer Conditions is not fulfilled
prior to 5:00 p.m. on the date of the 831 Meeting. Merger Sub will not, and
the Parent will cause Merger Sub not to, decrease the price payable in the
Offer, change the form of consideration payable in the Offer, change the Offer
Conditions, impose additional conditions to its obligation to consummate the
Offer and to accept for payment and purchase Company Shares tendered in the
Offer, or change any other terms of the Offer in a manner adverse to the
holders of the Company Shares, except that Merger Sub may extend the
expiration date of the Offer to the extent required by applicable law or if
the Offer Conditions are not satisfied.
(c) As soon as practicable, but in no event later
than five business days after the public announcement of the execution of this
Agreement, Merger Sub and the Parent will file with the Securities and
Exchange Commission (the "SEC") an amendment to its Tender Offer Statement on
Schedule 14D-1 (together with all supplements or amendments thereto, and
including all exhibits, the "Offer Documents") that reflects the amendment to
the Offer contemplated by Section 1.01(b). Merger Sub and the Parent will give
the Company and its counsel a reasonable opportunity to review the Offer
Documents prior to their being filed with the SEC or disseminated to the
Company's shareholders. Merger Sub and the Parent will, promptly after
receipt, furnish the Company and its counsel in writing with any comments that
Merger Sub, the Parent, or their counsel may receive from the SEC or its staff
with respect to the Offer Documents.
(d) As promptly as practicable, but in no event
later than five business days after the public announcement of the execution
of this Agreement, Merger Sub and the Parent will move to withdraw their
complaint in the case entitled Danaher Corporation, et al., v. Acme-Cleveland
Corporation, et al., Case No. C2 96-0247, pending in the United State District
Court for the Southern District of Ohio, Eastern Division, and the Company
will move to withdraw its counterclaims in that case, in each case without
prejudice.
2
<PAGE>
(e) As promptly as practicable, but in no event
later than the date on which the amendment to the Offer Documents referred to
in Section 1.01(c) is filed with the SEC, the Company will amend its Tender
Offer Solicitation/Recommendation Statement on Schedule 14D-9 ("Schedule
14D-9") to include a recommendation by the Company's Board of Directors that
the Company's shareholders accept the Offer and tender their Company Shares
pursuant to the Offer. The Company's Board of Directors has resolved to
recommend that the Company's shareholders accept the Offer and tender their
Company Shares pursuant to the Offer and has received an opinion from Goldman,
Sachs & Co., Inc. ("Goldman Sachs") that the Offer and the Merger, taken as a
unitary transaction, are fair. The Company's Board of Directors will not
withdraw, modify, or amend its recommendation, unless (i) such recommendation
would not be consistent with the fiduciary duties of the Board of Directors
under applicable law, as advised by counsel, or (ii) this Agreement is
terminated in accordance with Article IX.
(f) If requested by the Parent or Merger Sub, the
Company will, promptly following the purchase by Merger Sub pursuant to the
Offer of that number of Company Shares which, when aggregated with the Company
Shares then owned by the Parent and any of its affiliates, represents at least
a majority of the Company Shares then outstanding on a fully diluted basis,
take all actions necessary to cause persons designated by Merger Sub to become
directors of the Company so that the total number of directors so designated
equals the product, rounded up to the next whole number, of (i) the total
number of directors of the Company multiplied by (ii) the percentage that the
number of Company Shares then beneficially owned by Merger Sub or its
affiliates bears to the number of Company Shares outstanding at the time of
such purchase. In furtherance thereof, the Company will increase the size of
its Board of Directors, or use reasonable efforts to secure the resignation of
directors, or both as is necessary to permit that number of Merger Sub's
designees to be elected to the Company's Board of Directors; provided that,
prior to the Effective Time, the Company's Board of Directors will always have
at least two members who are not officers, designees, shareholders, or
affiliates of Merger Sub ("Independent Directors"). All of the Independent
Directors will be individuals who are currently directors of the Company,
except to the extent that such individuals do not wish to continue as
directors or voluntarily resign. The Company's obligations to appoint
designees to its Board of Directors will be subject to Section 14(f) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule
14f-1 promulgated thereunder. The Company will promptly take all actions
required pursuant to Section 14(f) and Rule 14f-1 in order to fulfill its
obligations under this Section 1.01 and will include in the Schedule 14D-9
such information with respect to the Company and its officers and directors as
is required under Section 14(f) and Rule 14f-1 in order to fulfill its
obligations under this Section 1.01.
3
<PAGE>
(g) Following the election or appointment of Merger
Sub's designees pursuant to Section 1.01(f), any amendment to this Agreement,
any termination of this Agreement by the Company, any extension by the Company
of the time for the performance of any of the obligations of Merger Sub or the
Parent under this Agreement, any recommendation to shareholders or any
modification or withdrawal of any such recommendation, or any waiver of any of
the Company's rights under this Agreement will require the concurrence of a
majority of the Independent Directors, unless no individuals who are currently
directors of the Company wish to continue as directors or voluntarily resign.
(h) The parties will cooperate with each other,
including by furnishing any necessary information and making any filings
required by applicable law, to ensure that the matters contemplated by this
Section 1.01 are consummated as promptly as practicable.
SECTION 1.02. The Merger.
(a) Upon the terms and subject to the conditions set
forth in this Agreement, at the Effective Time (as defined in Section
1.02(b)), Merger Sub will be merged with and into the Company in accordance
with (i) Ohio Law and (ii) the General Corporation Law of the State of
Delaware ("Delaware Law"). As a result of this merger (the "Merger"), the
separate existence of Merger Sub will cease and the Company will be the
surviving corporation (the "Surviving Corporation").
(b) As soon as practicable after satisfaction or, to
the extent permitted hereunder, waiver of all conditions to the Merger set
forth in Article VIII, the parties will cause (i) a certificate of merger in
such form as is required by, and executed in accordance with, Ohio Law to be
duly filed with the Secretary of State of the State of Ohio and (ii) a
certificate of merger in such form as is required by, and executed in
accordance with, Delaware Law to be duly filed with the Secretary of State of
the State of Delaware. The Merger will become effective when both certificates
of merger are so filed (the "Effective Time").
(c) From and after the Effective Time, the Merger
will have the effects specified in Ohio Law and Delaware Law.
(d) The closing of the Merger (the "Closing") will
take place (i) at the offices of Thompson Hine & Flory P.L.L, 3900 Society
Center, 127 Public Square, Cleveland, Ohio 44114-1216, at 10:00 a.m. on the
first business day following the date on which the last to be fulfilled or
waived of the conditions set forth in Article VIII (other than those
conditions that by their nature are to be satisfied at the Closing, but
subject to the fulfillment or waiver
4
<PAGE>
of those conditions at the Closing) have been satisfied or waived in
accordance with this Agreement or (ii) at such other place and time as the
parties may agree.
SECTION 1.03. Conversion of Shares.
At the Effective Time:
(a) Each Common Share of Merger Sub (a "Merger Sub
Common Share") issued and outstanding immediately prior to the Effective Time
will be converted into one Common Share of the Surviving Corporation.
(b) Each Company Share issued and outstanding
immediately prior to the Effective Time will, except as otherwise provided in
Section 1.03(c), be converted, by virtue of the Merger and without any action
on the part of the holder thereof, into the right to receive, without
interest, an amount in cash equal to $30.00 (the "Merger Consideration"). From
and after the Effective Time, all Company Shares, by virtue of the Merger and
without any action on the part of the holders thereof, will be canceled and
retired and cease to exist, and each holder of a certificate representing any
Company Shares immediately prior to the Effective Time (a "Share Certificate")
will thereafter cease to have any rights with respect to such Company Shares,
except the right to receive the Merger Consideration therefor upon the
surrender of the Share Certificate in accordance with Section 1.04 or the
right, if any, to receive payment from the Surviving Corporation of the "fair
cash value" of such Company Shares as determined in accordance with Section
1701.85 of the Ohio Law.
(c) Each outstanding Company Share held by the
Company as a treasury share or owned by the Parent or any Subsidiary of the
Parent immediately prior to the Effective Time will be canceled, and no
payment will be made with respect thereto.
SECTION 1.04. Surrender and Payment.
(a) Prior to the Effective Time, the Parent will
appoint an agent reasonably acceptable to the Company (the "Exchange Agent")
for the purpose of exchanging Share Certificates. The Parent will make
available to the Exchange Agent funds in amounts and at the times necessary
for the payment of the Merger Consideration in accordance with this Section
1.03 (such cash is referred to as the "Exchange Fund").
(b) Promptly after the Effective Time, the Parent
will send, or will cause the Exchange Agent to send, to each holder of a Share
5
<PAGE>
Certificate a letter of transmittal and instructions for use in surrendering
the Share Certificates for payment in accordance with this Section 1.04.
Provision also will be made for holders of Share Certificates to procure a
letter of transmittal and instructions and deliver such letter of transmittal,
together with their Share Certificates, in person immediately after the
Effective Time.
(c) After the Effective Time, Share Certificates
will represent the right, upon surrender thereof to the Exchange Agent,
together with a duly executed and properly completed letter of transmittal
relating thereto, to receive (i) cash in the amount to which such holder is
entitled under Section 1.03 after giving effect to any required tax
withholding or (ii) payment from the Surviving Corporation of the "fair cash
value" of such Company Shares as determined under Section 1701.85 of the Ohio
Law, subject to the conditions set forth therein. No interest will be paid or
will accrue on such amount. Share Certificates so surrendered will be
canceled. The Company will not settle any claim pursuant to Section 1701.85
without the consent of the Parent.
(d) If any cash is to be paid to a Person other than
the registered holder of the Shares Certificates surrendered in exchange
therefor, it will be a condition to such payment that the Share Certificates
so surrendered be properly endorsed or otherwise in proper form for transfer
and that the Person requesting such payment pay to the Exchange Agent any
transfer or other taxes required as a result of such issuance or establish to
the satisfaction of the Exchange Agent that such tax has been paid or is not
applicable. For purposes of this Agreement, "Person" means an individual, a
corporation, a partnership, an association, a trust, or any other entity or
organization, including a government or political subdivision or any agency or
instrumentality thereof.
(e) At and after the Effective Time, the stock
transfer books of the Company will be closed, and there will be no further
registration of transfers of Company Shares outstanding prior to the Effective
Time. If, at or after the Effective Time, Share Certificates are presented to
the Surviving Corporation, they will be canceled and exchanged in accordance
with this Article I.
(f) The Parent will attempt to contact (using
shareholder lists available to it) and provide the items to which reference is
made in paragraph (b) of this Section 1.04 to, all holders of Company Shares
entitled to receive the Merger Consideration. Any cash in the Exchange Fund
that remain unclaimed by the holders of Company Shares six months after the
Effective Time will be returned to the Parent, upon demand, and any such
holder who has not surrendered his Company Shares in accordance with this
6
<PAGE>
Section 1.04 prior to that time will thereafter look only to the Parent, as a
general creditor thereof, to pay the Merger Consideration to which such holder
is entitled pursuant to Section 1.03. Notwithstanding the foregoing, the
Parent will not be liable to any holder of Company Shares for any amount paid
to a public official pursuant to applicable abandoned property, escheat, or
similar laws.
(g) If any Share Certificate is lost, stolen, or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Share Certificate to be lost, stolen, or destroyed and, if required by
the Surviving Corporation, the posting by such Person of a bond in such
reasonable amount as the Parent may direct as indemnity against any claim that
may be made against it with respect to such Share Certificate, the Exchange
Agent will pay the cash payable in respect of such Share Certificate pursuant
to this Agreement.
SECTION 1.05. Company Options.
At the earlier of the purchase of Company Shares
pursuant to the Offer and the Effective Time, subject to obtaining the consent
of the holder thereof, each outstanding option (a "Company Option") to
purchase Company Common Shares, whether or not exercisable, granted under
employee stock option or incentive plans of the Company (the "Company Option
Plans") will be cancelled, and in consideration of such cancellation, will be
converted into the right to receive, without interest, an amount in cash equal
to the product of (i) the number of Company Common Shares subject to the
Company Option and (ii) the excess of (A) the Merger Consideration over (B)
the exercise price per share of the option. The Company will use reasonable
efforts to obtain, prior to the earlier of the purchase of Company Shares
pursuant to the Offer and the Effective Time, the written consent of each
holder of a Company Option in respect of such cancellation.
SECTION 1.06. Company Performance Plan.
At the earlier of the purchase of Company Shares
pursuant to the Offer and the Effective Time, subject to obtaining the consent
of the holder thereof, each Company Common Share to which an employee of the
Company is entitled under the Acme-Cleveland Corporation Performance and
Equity Incentive Plan (the "Company Performance Plan") will be cancelled, and
in consideration of such cancellation, will be converted into the right to
receive, without interest, an amount in cash equal to the Merger
Consideration. The Company will use reasonable efforts to obtain, prior to the
earlier of the purchase of Company Shares pursuant to the Offer and the
Effective Time, the
7
<PAGE>
written consent of each holder of a Company Common Share granted under the
Company Performance Plan in respect of such cancellation.
ARTICLE II
THE SURVIVING CORPORATION; THE PARENT DIRECTORS
SECTION 2.01. Articles of Incorporation.
The articles of incorporation of the Company in
effect at the Effective Time will be the articles of incorporation of the
Surviving Corporation after the consummation of the Merger until amended in
accordance with applicable law.
SECTION 2.02. Regulations.
The regulations of the Company in effect at the
Effective Time will be the regulations of the Surviving Corporation after the
consummation of the Merger until amended in accordance with applicable law.
SECTION 2.03. Directors and Officers.
From and after the Effective Time, until successors
are duly elected or appointed and qualified in accordance with applicable law,
the directors and officers of Merger Sub at the Effective Time will be the
directors and officers of the Surviving Corporation after the consummation of
the Merger.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Parent
that:
SECTION 3.01. Corporate Existence and Power.
The Company is a corporation duly incorporated,
validly existing, and in good standing under the laws of the State of Ohio and
has all requisite corporate power and authority to own, lease, and operate its
properties and to carry on its business as now conducted, except where the
failure to do so is not likely to have, individually or in the aggregate, a
material adverse effect on the financial condition, results of operations, or
business of the Company and its Subsidiaries (as defined in Section 3.06(a))
taken as a whole (a "Company Material Adverse Effect"). The term "Company
Material
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Adverse Effect" will not, however, include any event or change resulting from
this Agreement or the transactions contemplated by it. The Company is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where the character of the property owned or leased by it or
the nature of its activities makes such qualification necessary, except for
those jurisdictions where the failure to be so qualified is not likely to
have, individually or in the aggregate, a Company Material Adverse Effect.
SECTION 3.02. Corporate Authorization.
The execution, delivery, and performance by the
Company of this Agreement and the consummation by the Company of the Merger
and the other transactions contemplated by this Agreement are within the
Company's corporate power and authority and, except for any required approval
by the Company's shareholders in connection with the consummation of the the
Offer or the Merger, have been duly authorized by all necessary corporate
action on the part of the Company. This Agreement has been duly executed and
delivered by the Company and, assuming the due authorization, execution, and
delivery hereof by the Parent and Merger Sub, constitutes a legal, valid, and
binding agreement of the Company.
SECTION 3.03. Governmental Authorization.
The execution, delivery, and performance by the
Company of this Agreement and the consummation by the Company of the Merger
and the other transactions contemplated by this Agreement do not require any
consent, approval, authorization, or permit of, other action by, or filing
with, any governmental body, agency, official, or authority other than (i) as
set forth on Schedule 3.03 (Company Governmental Authorization), (ii) the
filing of appropriate certificates of merger in accordance with Ohio Law and
Delaware Law, (iii) compliance with applicable requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act") and the
Exchange Act, and (iv) approval by the Company's shareholders of the purchase
of Company Shares by Merger Sub pursuant to the Offer in accordance with
Section 1701.831 of the Ohio Law, except where the failure of any such action
to be taken or filing to be made is not likely to have, individually or in the
aggregate, a Company Material Adverse Effect or prevent or materially delay
consummation of the Offer or the Merger.
SECTION 3.04. Non-Contravention.
The execution, delivery, and performance by the
Company of this Agreement, the purchase of Company Shares by Merger Sub
pursuant to the Offer, and the consummation by the Company of the Merger and
the
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other transactions contemplated by this Agreement do not and will not (i)
contravene or conflict with the Articles of Incorporation or Regulations of
the Company, (ii) assuming compliance with the matters referred to in Section
3.03, contravene, conflict with, or constitute a violation of any provision of
any law, rule, regulation, judgment, injunction, order, or decree binding upon
or applicable to the Company or any of its Subsidiaries, (iii) constitute a
default, give rise to a right of termination, cancellation, or acceleration of
any right or obligation of the Company or any of its Subsidiaries, or give
rise to a loss of any benefit to which the Company or any of its Subsidiaries
is entitled, under any provision of any agreement or other instrument binding
upon the Company or any of its Subsidiaries or under any license, franchise,
permit, or other similar authorization held by the Company or any of its
Subsidiaries, or (iv) result in the creation or imposition of any Lien on any
asset of the Company or any of its Subsidiaries, except as set forth in
Schedule 3.04 (Company Liens Created) and except for any occurrences or
results referred to in clauses (ii), (iii), and (iv) that are not likely to
have, individually or in the aggregate, a material adverse effect on the
financial condition, results of operations, or business of the Company and its
Subsidiaries taken as a whole or prevent or delay consummation of the Offer or
the Merger. For purposes of this Agreement, "Lien" means, with respect to any
asset, any mortgage, lien, pledge, charge, security interest, encumbrance, or
other right or interest of another to or in, or adverse claim of any kind in
respect of, such asset.
SECTION 3.05. Capitalization.
(a) The Company has 10,936,285 authorized shares,
consisting of 10,000,000 Company Common Shares and 936,285 Serial Preferred
Shares without par value of the Company. The authorized classes and series of
Serial Preferred Shares without par value of the Company consist of 161,374
Company A Preferred Shares and 100,000 Series B Preferred Shares of the
Company ("Company B Preferred Shares"). As of May 30, 1996, (i) 6,430,078
Company Common Shares were issued and outstanding, (ii) 369,800 Company Common
Shares were reserved for future issuance upon exercise of outstanding Company
Options granted pursuant to the Company Option Plans, (iii) 91,672 Company
Common Shares were reserved for issuance under outstanding grants, or
available for future grants, under the Company Performance Plan, (iv) 161,374
Company Common Shares were reserved for issuance upon conversion of the
Company A Preferred Shares, and (v) 100,000 Company B Preferred Shares were
reserved for issuance upon exercise of the rights (the "Company Rights" or,
individually, a "Company Right") distributed in connection with the Rights
Agreement, dated as of March 11, 1996, between the Company and Society
National Bank, as Rights Agent, as amended by the First Amendment to Rights
Agreement, dated as of March 20, 1996 (as amended, the "Company Rights
Agreement"). As of May 30, 1996, 161,374
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Company A Preferred Shares were issued and outstanding, and no Company B
Preferred Shares were issued and outstanding. Except as described in this
Section 3.05 or in Schedule 3.05 (Company Capitalization), as of the date of
this Agreement, no shares of capital stock of the Company are reserved for
issuance for any other purpose. Each of the issued and outstanding Company
Shares is duly authorized, validly issued, and fully paid and nonassessable
and has not been issued in violation of (nor are any of the authorized Company
Shares subject to) any preemptive or similar rights created by statute, the
Articles of Incorporation, or the Regulations of the Company or any agreement
to which the Company is a party or is bound. Other than the Company A
Preferred Shares, the Company has no outstanding bonds, notes, or other
obligations the holders of which have the right to vote with the Company's
shareholders on any matter.
(b) Except as set forth in paragraph (a) of this
Section 3.05 or as set forth on Schedule 3.05, there are no options, warrants,
or other rights (including registration rights and conversion rights),
agreements, arrangements, or commitments to which the Company is a party
relating to the issued or unissued capital stock of the Company or obligating
the Company to grant, issue, or sell any shares of the capital stock of the
Company or other security of the Company. Except as set forth in Schedule
3.05, there are no obligations, contingent or otherwise, of the Company to
repurchase, redeem, or otherwise acquire any Company Shares, other capital
stock of the Company, or capital stock or other equity interests of any
Subsidiary of the Company.
(c) Schedule 3.05 lists, as of the date indicated,
(i) the number of Company Options outstanding and the exercise price of each
outstanding Company Option and (ii) the number of Company Common Shares that
employees of the Company are entitled to receive under the Company Performance
Plan.
SECTION 3.06. Subsidiaries.
(a) Each Subsidiary of the Company is a corporation
duly incorporated, validly existing, and in good standing under the laws of
jurisdiction of its incorporation or is a partnership duly constituted under
its governing law, has all requisite corporate or partnership power and
authority to own, lease, and operate its properties and to carry on its
business substantially as now conducted, and is duly qualified to do business
as a foreign corporation or partnership and is in good standing in each
jurisdiction where the character of the property owned or leased by it or the
nature of its activities makes such qualification necessary, except where the
failure to be so qualified is not likely to have, individually or in the
aggregate, a Company Material Adverse Effect. For purposes of this Agreement,
"Subsidiary" of any
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Person means (i) any corporation or other entity of which securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are, directly
or indirectly, owned by such Person, and (ii) any partnership of which such
Person is a general partner.
(b) Except as set forth on Schedule 3.06 (Company
Subsidiaries), each Subsidiary of the Company is wholly owned by the Company,
directly or indirectly, free and clear of any Lien and free and clear of any
other limitation or restriction (including any restriction on the right to
vote, sell, or otherwise dispose of such capital stock or other ownership
interests). Except as set forth on Schedule 3.06, there are no outstanding (i)
securities of the Company or any of its Subsidiaries convertible into or
exchangeable for shares of capital stock or other voting securities or
ownership interests in any such Subsidiary of the Company or (ii) options or
other rights to acquire from the Company or any of its Subsidiaries, and no
other obligation of the Company or any of its Subsidiaries to issue, any
capital stock, voting securities, or other ownership interests in, or any
securities convertible into or exchangeable for any capital stock, voting
securities, or ownership interests in, any such Subsidiary of the Company (the
items in clauses (i) and (ii), including capital stock, are collectively
referred to as the "Company Subsidiary Securities"). There are no outstanding
obligations of the Company or any of its Subsidiaries to repurchase, redeem,
or otherwise acquire any outstanding Company Subsidiary Securities.
SECTION 3.07. Company SEC Reports.
Since September 30, 1992, the Company has filed all
forms, reports, statements, and other documents required to be filed with the
SEC, including without limitation (i) all Annual Reports on Form 10-K, (ii)
all Quarterly Reports on Form 10-Q, (iii) all proxy statements relating to
meetings of shareholders (whether annual or special), (iv) all Current Reports
on Form 8- K, (v) all Solicitation/Recommendation Statements on Schedule
14D-9, and (vi) all other reports, schedules, registration statements, or
other documents required to be filed with the SEC (collectively, the "Company
SEC Reports"), except where the failure to file any such forms, reports,
statements, or other documents is not likely to have, individually or in the
aggregate, a Company Material Adverse Effect. The Company SEC Reports (x) were
prepared in all material respects in accordance with the requirements of the
Securities Act or the Exchange Act, as the case may be, and (y) did not at the
time they were filed contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
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SECTION 3.08. Financial Statements; No Undisclosed Liabilities.
The audited consolidated financial statements and
unaudited consolidated interim financial statements (including the related
notes and schedules) of the Company and its consolidated Subsidiaries included
or incorporated by reference in the Company SEC Reports (the "Company
Financial Statements") were prepared in accordance with generally accepted
accounting principles applied on a consistent basis (except as may be
indicated in the notes thereto) and fairly present the consolidated financial
position of the Company and its consolidated Subsidiaries as of the dates
thereof and their consolidated results of operations and cash flows for the
periods then ended, subject, in the case of any unaudited interim financial
statements, to normal year-end adjustments, none of which is likely to have,
individually or in the aggregate, a Company Material Adverse Effect. Neither
the Company nor its Subsidiaries has any liabilities, whether or not accrued,
contingent or otherwise, that are likely to have, individually or in the
aggregate, a Company Material Adverse Effect other than liabilities disclosed
in the Schedules hereto or in the Company SEC Reports or for which the Company
has made adequate reserves as reflected in the Company Financial Statements.
SECTION 3.09. Absence of Certain Changes.
Except as contemplated hereby or as described in any
Company SEC Report filed prior to the date hereof or as disclosed in Schedule
3.09 (Certain Company Changes) to this Agreement, since September 30, 1995,
(a) the Company and its Subsidiaries have conducted their business in all
material respects in the ordinary course consistent with past practices, (b)
there has not been any change or development, or combination of changes or
developments, that have had or are likely to have, individually or in the
aggregate, a Company Material Adverse Effect, (c) there has not been any
declaration, setting aside, or payment of any dividend or other distribution
with respect to any shares of capital stock of the Company other than the
Company Rights and quarterly dividends on the Company Shares at the rates in
effect on the date of this Agreement, or any repurchase, redemption, or other
acquisition by the Company or any of its Subsidiaries of any outstanding
shares of capital stock or other securities of, or other ownership interests
in, the Company or any of its Subsidiaries, (d) there has not been any
amendment of any term of any outstanding security of the Company or any of its
Subsidiaries other than with respect to the Company Rights, (e) there has not
been any incurrence, assumption, or guarantee by the Company or any of its
Subsidiaries of any indebtedness for borrowed money other than in the ordinary
course of business and in amounts and on terms consistent with past practices,
(f) there has not been any creation or assumption by the Company or any of its
Subsidiaries of any Lien on any material asset (including the sale, pledge, or
assignment of
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receivables) other than in the ordinary course of business consistent with
past practices, and (g) there has not been any change in any method of
accounting or accounting practice by the Company or any of its Subsidiaries,
except for any such change required by reason of a concurrent change in
generally accepted accounting principles or to conform a Subsidiary's
accounting policies and practices to those of the Company. Furthermore, except
pursuant to contractual obligations disclosed in any Company SEC Report filed
prior to the date hereof, as disclosed in Schedule 3.11, or pursuant to
immaterial arrangements with one or more employees or groups of employees,
there has not been any (i) grant of any severance or termination pay to any
director or executive officer of the Company or any of its Subsidiaries, (ii)
entering into of any employment, deferred compensation, or other similar
agreement (or any amendment to any such existing agreement) with any director
or executive officer of the Company or any of its Subsidiaries, (iii) increase
in benefits payable under any existing severance or termination pay policies
or employment agreements with any director or executive officer of the Company
or any of its Subsidiaries, or (iv) increase in compensation, bonus, or other
benefits payable to directors or executive officers of the Company or any of
its Subsidiaries.
SECTION 3.10. Litigation.
Except as disclosed in Schedule 3.10 (Company
Litigation), there are no actions, suits, investigations, or proceedings
pending or, to the knowledge of the Company, threatened against the Company,
any of its Subsidiaries, or any of their respective properties before any
court or arbitrator or any governmental body, agency, official, or authority
that are likely to have, individually or in the aggregate, a Company Material
Adverse Effect.
SECTION 3.11. ERISA.
(a) As used in this Section 3.11 and in Section
6.08, each of the following terms has the indicated meaning:
(i) "Affiliate" of any Person means any other
Person that, together with such Person, would be treated as a single
employer under Section 414 of the Code.
(ii) "Company Employee Plans" means each "employee
benefit plan," as defined in Section 3(3) of ERISA that (A) is
subject to any provision of ERISA and (B) is maintained,
administered, or contributed to by the Company or any affiliate and
covers any employee or former employee of the Company or any
affiliate or under which the Company or any affiliate has any
liability.
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(iii) "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
(iv) "Company Benefit Arrangement" means each
employment, severance, welfare, or other similar contract,
arrangement, or policy and each plan or arrangement (written or
oral) providing for compensation, benefit, bonus, profit-sharing,
stock option, or other stock related rights or other forms of
incentive or deferred compensation, that (A) is not a Company
Employee Plan, (B) is entered into, maintained, or contributed to,
as the case may be, by the Company or any of its affiliates, and (C)
covers any employee or former employee or director or former
director of the Company or any of its affiliates.
(b) The Company has heretofore made available to the
Parent, and agrees that it will as soon as practicable after the date of this
Agreement furnish the Parent upon the Parent's request with, copies of all
Company Employee Plans (and, if applicable, related trust agreements) and all
amendments thereto and the most recent Forms 5500 required to be filed with
respect thereto, IRS determination letters, and actuarial reports, in each
case to the extent applicable.
(c) Schedule 3.11 (Company Employee Plans)
identifies each Company Employee Plan that constitutes a "defined benefit
plan" as defined in Section 3(35) of ERISA. Except as set forth on Schedule
3.11, no Company Employee Plan constitutes a "multiemployer plan," as defined
in Section 3(37) of ERISA, and no Company Employee Plan is maintained in
connection with any trust described in Section 501(c)(9) of the Code. Except
as set forth on Schedule 3.11, no Company Employee Plan provides retiree
medical or life insurance benefits or is subject to Title IV of ERISA. Neither
the Company nor any of its affiliates has incurred any liability under Title
IV of ERISA, including, without limitation, arising in connection with the
termination of, or complete or partial withdrawal from, any plan currently or
previously covered by Title IV of ERISA that is likely to have, individually
or in the aggregate, a Company Material Adverse Effect, and the Pension
Benefit Guarantee Corporation has not instituted proceedings to terminate any
such plan nor do any conditions exist that present a material risk of such
occurrence. Nothing done or omitted to be done, and no transaction or holding
of any asset under or in connection with any Company Employee Plan, has or
will make the Company or any of its Subsidiaries or any officer or director of
the Company or any of its Subsidiaries subject to any liability under Title I
of ERISA or liable for any tax pursuant to Section 4975 of the Code that is
likely to have, individually or in the aggregate, a Company Material Adverse
Effect. With respect to each Company Employee Plan subject to Title IV of
ERISA, the
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Company has furnished the Parent with the most recent actuarial report showing
the present value of accrued benefits under such plan, based upon the
actuarial assumptions used for funding purposes with respect to such plan. No
Company Employee Plan or any trust established thereunder has incurred any
"accumulated funding deficiency" (as defined in section 302 of ERISA and
section 412 of the Code), whether or not waived, as of the last day of the
most recent fiscal year of each such plan ended prior to the date hereof; and
all contributions required to be made with respect thereto (whether pursuant
to the terms of any ERISA Plan or otherwise) on or prior to the date hereof
have been timely made. No Company Employee Plan is a multiemployer plan.
(d) Except to the extent it is not likely to have,
individually or in the aggregate, a Company Material Adverse Effect, (i) each
Company Employee Plan that is intended to be qualified under Section 401(a) of
the Code is so qualified and has been so qualified during the period from its
adoption to date, and each trust forming a part thereof is exempt from tax
pursuant to Section 501(a) of the Code, and (ii) each Company Employee Plan
has been maintained in compliance with its terms and with the requirements of
all applicable statutes, orders, final rules, and final regulations.
(e) Schedule 3.11 lists each Company Benefit
Arrangement currently in effect (other than any immaterial arrangement with
one or more employees or groups of employees or disclosed in any Company SEC
Report filed prior to the date hereof) provided to any director, executive
officer, or employee of the Company or any former director, executive officer,
or employee of the Company and sets forth each Company Benefit Arrangement
(other than any immaterial arrangement with one or more employees or groups of
employees or disclosed in any Company SEC Report filed prior to the date
hereof) with respect to which benefits will be accelerated or paid as a result
of the transactions contemplated by this Agreement. Copies of all written
Company Benefit Arrangements (other than any immaterial arrangement with one
or more employees or groups of employees) and all amendments thereto have
heretofore been made available to the Parent, and will promptly be furnished
to the Parent upon the Parent's request after the date of this Agreement.
Except to the extent that it is not likely to have, individually or in the
aggregate, a Company Material Adverse Effect, each Company Benefit Arrangement
has been maintained in compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules, and regulations that are
applicable to such Company Benefit Arrangement.
(f) Except for three employees whose compensation
arrangements are disclosed on Schedule 3.11, the Company does not anticipate
that any amounts payable under the Company Employee Plans and the
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Company Benefit Arrangements will fail to be deductible for federal income tax
purposes by virtue of section 280G of the Code. There are no pending,
threatened, or anticipated claims by or on behalf of any Company Employee Plan
or Company Benefit Arrangement, by any employee or beneficiary covered under
any such plan or arrangement, or otherwise involving any such plan or
arrangement, that are likely to have, individually or in the aggregate, a
Company Material Adverse Effect.
SECTION 3.12. Taxes.
Except for matters that are not likely to have,
individually or in the aggregate, a Company Material Adverse Effect, (a) the
Company and its Subsidiaries have timely filed all Tax Returns required to be
filed by them with any taxing authority with respect to Taxes for all periods
heretofore ended, taking into account any extension of time to file granted to
or obtained on behalf of the Company and its Subsidiaries, (b) all Taxes
required to be paid prior to the Effective Time have been duly and timely paid
or will be duly and timely paid by the Effective Time, (c) as of the date
hereof, no deficiency for any amount of Tax has been asserted or assessed by a
taxing authority against the Company or any of its Subsidiaries, except for
amounts for which the Company has made an adequate reserve as reflected in the
Company Financial Statements, (d) all liability for Taxes of the Company or
any of its Subsidiaries that are or will become due or payable with respect to
periods covered by the Company Financial Statements have been paid or
adequately reserved for on the Company Financial Statements to the extent
required by generally accepted accounting principles, (e) the Company and its
Subsidiaries are not liable for any Taxes arising out of membership or
participation in any consolidated, affiliated, combined, or unitary group in
which it or any of its Subsidiaries was at any time a member, (f) there are no
liens for Taxes upon the assets of the Company or of any of its Subsidiaries
other than for Taxes not yet due and payable, (g) the applicable statute of
limitations with respect to the assessment of Taxes of the Company and its
Subsidiaries have expired through their taxable years September 30, 1990, and
there are no outstanding waivers or comparable consents extending the statute
of limitations with respect to any Taxes or Tax Returns of the Company or any
of its Subsidiaries, (h) there are no audits, claims, actions, suits,
proceedings, or investigations now pending or threatened against or with
respect to the Company or any of its Subsidiaries in respect of any Taxes, (i)
neither the Company nor any of its Subsidiaries are parties to any agreement
providing for the allocation or sharing of Taxes except for intercompany
agreements between the Company and one or more of its Subsidiaries and certain
agreements providing for the disposition of The Cleveland Twist Drill Company
and The National Acme Company, and (j) there has been no change in the method
of accounting utilized by the Company or
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any of its Subsidiaries that would require an adjustment to taxable income
under section 481 of the Code.
For purposes of this Agreement, "Code" means the
Internal Revenue Code of 1986, as amended; "Taxes" or "Tax" means all federal,
state, local, and foreign taxes, levies, and other assessments, including
without limitation, all income, excise, property, sales, use, value added,
transfer, franchise, profits, withholding, payroll, social security, or other
taxes including any interest, additions to tax, and penalties applicable
thereto; and "Tax Return" means any return, declaration, statement, report,
schedule, information return, and other document (including any related or
supporting information) with respect to Taxes.
SECTION 3.13. Intellectual Property Rights.
(a) Schedule 3.13 (Company Intellectual Property
Rights) lists each of the following items that are likely to be, individually
or in the aggregate, material to the business of the Company and its
Subsidiaries: (i) patents and applications therefor, registrations of
trademarks (including service marks) and applications therefor, and
registrations of copyrights and applications therefor that are owned by the
Company or any of its Subsidiaries, (ii) unexpired licenses relating to the
Company Intellectual Property Rights (as defined in paragraph (d) of this
Section 3.13) that have been granted to or by the Company or any of its
Subsidiaries, and (iii) other agreements relating to Intellectual Property
Rights.
(b) To the Company's knowledge, the Company and its
Subsidiaries collectively own and have the right to use, and to license others
to use, all of the Company Intellectual Property Rights that are, individually
or in the aggregate, material to the conduct of the business of the Company
and its Subsidiaries. To the Company's knowledge, such ownership and right to
use, and to license others to use, are free and clear of all Liens, security
interests, claims, and rights to use of third parties that are likely to be,
individually or in the aggregate, material to the business of the Company and
its Subsidiaries.
(c) Neither the Company nor any of its Subsidiaries
has knowledge of any alleged or claimed infringement by any product or process
manufactured, used, sold, or under development by or for the Company or its
Subsidiaries that, if proven, is likely to have a Company Material Adverse
Effect.
(d) As used in this Agreement, the term
"Intellectual Property Rights" includes patents, patent applications,
trademarks, trademark
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applications, trade names, service marks, service mark applications,
copyrights, copyright applications, publication rights, and proprietary
computer programs, other computer software (including source codes and object
codes), inventions, know how, trade secrets, technology, processes, and
formulae. The term "Company Intellectual Property Rights" means all
Intellectual Property Rights that are used in the conduct of the business of
the Company and its Subsidiaries.
SECTION 3.14. Environmental Protection.
(a) As used in this Agreement, each of the following
terms have the indicated meaning:
(i) "Company Real Property" means the real
property now owned or leased by the Company or any of its
Subsidiaries.
(ii) "Environmental Law" means federal, state,
local, or foreign laws, statutes, rules, regulations, and ordinances
relating to the protection of the environment.
(iii) "Hazardous Material" means any hazardous,
toxic, or dangerous substance defined as such in (or for purposes of)
the Comprehensive Environmental Response, Compensation and Liability
Act, as amended ("CERCLA"), or any other Environmental Law.
(b) Except as set forth on Schedule 3.14 (Company
Environmental Matters) or as is not likely to have, individually or in the
aggregate, a Company Material Adverse Effect:
(i) The Company and each of its Subsidiaries is
and has been in compliance with all applicable Environmental Laws.
(ii) The Company has not treated, stored, or
disposed of any Hazardous Material on Company Real Property in
violation of any applicable Environmental Laws.
(iii) Neither the Company nor any of its
Subsidiaries has received any written notices, demand letters, or
written requests for information from any governmental body, agency,
official, or authority or third party indicating that the
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Company or any of its Subsidiaries is in violation of, or liable to
any person under, any Environmental Law.
(iv) There are no actions, suits, investigations,
or proceedings pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries or
involving any of the Company Real Property before any court or
arbitrator or any governmental body, agency, official, or authority
relating to any violation, or alleged violation, of any Environmental
Law.
(v) There are no underground storage tanks on any
Company Real Property.
(vi) The Company and its Subsidiaries have all
permits required by applicable Environmental Laws and are in
substantial compliance with the provisions of all such permits.
(vii) Neither the Company nor any of its
Subsidiaries has any obligation to any third party with to any
property sold or transferred to such third party relating to
Environmental Laws or the matters set forth in clauses (i) through
(vi) above.
(c) Neither the Company nor any of its Subsidiaries
has received written notice that any part of the Company Real Property has
been or is listed as a site containing Hazardous Material requiring
remediation under CERCLA or any other Environmental Law.
SECTION 3.15. Finders and Investment Bankers.
Except for Goldman Sachs, whose fees will be paid by
the Company, there is no investment banker, broker, finder, or other
intermediary that has been retained by or is authorized to act on behalf of
the Company or any of its Subsidiaries who might be entitled to any fee or
commission in connection with the transactions contemplated by this Agreement.
SECTION 3.16. Vote Required.
The only vote of the holders of any class or series
of capital stock of the Company necessary to approve the Merger is the
affirmative vote of the holders of a majority of the outstanding Company
Shares.
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SECTION 3.17. Company Rights Agreement.
To the Company's Knowledge, (a) none of the Parent
nor any of its Affiliates or Associates is an "Acquiring Person" (as defined
in the Company Rights Agreement) and (b) there has not been a "Shares
Acquisition Date" or "Triggering Event" (as defined in the Company Rights
Agreement) under the Company Rights Agreement. The Company has amended the
Company Rights Agreement to provide that (i) the execution, delivery, and
performance of this Agreement, the purchase of Company Shares pursuant to the
Offer, and the consummation of the Merger and other transactions contemplated
by this Agreement will not (A) cause the Parent or any of its Affiliates or
Associates to become an "Acquiring Person" (as defined in the Company Rights
Agreement) or (B) otherwise cause a "Shares Acquisition Date" or "Triggering
Event" (as defined in the Company Rights Agreement) to occur and (ii) upon
purchase of Company Shares pursuant to the Offer, the Rights (as defined in
the Company Rights Agreement) will no longer be exercisable, and the former
holders of the Rights will not have any claims or rights thereunder. The
Company has filed with the SEC and made available to the Parent a true and
correct copy of the Company Rights Agreement, as amended through the date
hereof.
SECTION 3.18. Takeover Statutes.
The Board of Directors of the Company have approved
the acquisition of Company Shares by Merger Sub pursuant to the Offer and the
Merger for purposes of Chapter 1704 of the Ohio Revised Code. No "fair price,"
"moratorium," "control share acquisition," or other similar antitakeover
statute or provision enacted under Ohio law applicable to the Company
(including, without limitation, Section 1701.831 of the Ohio Law and Chapter
1704 of the Ohio Revised Code) is applicable to the Merger or the other
transactions contemplated hereby.
SECTION 3.19. Information Supplied.
None of the information supplied or to be supplied
in writing by the Company for inclusion in the Offer Documents will, at the
respective times the Offer Documents or any amendments or supplements thereto
are filed with the SEC, contains or will contain an untrue statement of a
material fact or omits or will omit 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. The Schedule 14D-9,
at the times the Schedule 14D-9 or any amendments thereto are filed with the
SEC, did not and will not contain an untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements
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therein, in light of the circumstances under which they were made, not
misleading; except that, the foregoing does not apply to the extent that any
such untrue statement of a material fact or omission to state a material fact
was or is made by the Company in reliance upon and in conformity with written
information furnished to the Company by Merger Sub or the Parent specifically
for use in the Schedule 14D-9. No proxy solicitation materials distributed by
the Company to its shareholders or filed with the SEC in connection with the
831 Meeting or the Merger Meeting, including any amendments or supplements
thereto (collectively, the "Proxy Material"), will, at the times the Proxy
Material is mailed to the Company's shareholders, contain an untrue statement
of a material fact or omit 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 or, at the time of
the meeting of shareholders to which the Proxy Material relates or at the
Effective Time, omit to state any material fact necessary to correct any
statement that has become false or misleading in any earlier communication
with respect to the solicitation of any proxy for such meeting; except that,
the foregoing does not apply to the extent that any such untrue statement of a
material fact or omission to state a material fact was made by the Company in
reliance upon and in conformity with written information furnished to the
Company by Merger Sub or the Parent specifically for use in the Proxy
Material.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE PARENT AND MERGER SUB
The Parent and Merger Sub jointly and severally
represent and warrant to the Company that:
SECTION 4.01. Corporate Existence and Power.
The Parent and Merger Sub are corporations duly
incorporated, validly existing, and in good standing under the laws of the State
of Delaware.
SECTION 4.02. Corporate Authorization.
The execution, delivery, and performance by the
Parent and Merger Sub of this Agreement, the purchase by Merger Sub of Company
Shares pursuant to the Offer, and the consummation of the Merger and the other
transactions contemplated hereby by the Parent and Merger Sub are within the
their corporate power and authority and have been duly authorized by all
necessary corporate action on the part of the Parent and Merger Sub.
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This Agreement has been duly executed and delivered by the Parent and,
assuming the due authorization, execution, and delivery thereof by the
Company, constitutes a legal, valid, and binding agreement of the Parent and
Merger Sub.
SECTION 4.03. Governmental Authorization.
The execution, delivery, and performance by the
Parent and Merger Sub of this Agreement, the purchase of Company Shares by
Merger Sub pursuant to the Offer, and the consummation of the Merger and the
other transactions contemplated hereby by the Parent and Merger Sub do not
require any consent, approval, authorization, or permit of, other action by,
or filing with, any governmental body, agency, official, or authority other
than (i) as set forth on Schedule 4.03 (Parent Governmental Authorizations),
(ii) the filing of appropriate merger documents in accordance with Ohio Law
and Delaware Law, (iii) compliance with applicable requirements of the HSR Act
and the Exchange Act, and (iv) approval by the Company's shareholders of the
purchase of Company Shares by Merger Sub pursuant to the Offer in accordance
with Section 1701.831 of the Ohio Law, except where the failure of any such
action to be taken or filing to be made is not likely to have, individually or
in the aggregate, a material adverse effect on the financial condition,
results of operations, or business of the Parent and its Subsidiaries taken as
a whole (a "Parent Material Adverse Effect") or prevent or delay consummation
of the Offer or the Merger.
SECTION 4.04. Non-Contravention.
The execution, delivery, and performance by the
Parent and Merger Sub of this Agreement and the consummation of the Merger and
the other transactions contemplated hereby by the Parent and Merger Sub do not
and will not (i) contravene or conflict with the charter or by-laws of the
Parent or Merger Sub, (ii) assuming compliance with the matters referred to in
Section 4.03, contravene, conflict with, or constitute a violation of any
provision of any law, rule, regulation, judgment, injunction, order, or decree
binding upon or applicable to the Parent or any of its Subsidiaries, (iii)
constitute a default, give rise to a right of termination, cancellation, or
acceleration of any right or obligation of the Parent or any of its
Subsidiaries, or give rise to a loss of any benefit to which the Parent or any
of its Subsidiaries is entitled, under any provision of any agreement or other
instrument binding upon the Parent or any of its Subsidiaries or any license,
franchise, permit, or other similar authorization held by the Parent or any of
its Subsidiaries, or (iv) result in the creation or imposition of any Lien on
any asset of the Parent or any of its Subsidiaries, except for any occurrences
or results referred to in clauses (ii), (iii), and (iv) that are not likely to
have, individually or in the aggregate, a Parent
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Material Adverse Effect or prevent or delay consummation of the Offer or the
Merger.
SECTION 4.05. Reports.
Since December 31, 1992, the Parent has filed all
forms, reports, statements, and other documents required to be filed with the
SEC, including without limitation (1) all Annual Reports on Form 10-K, (2) all
Quarterly Reports on Form 10-Q, (3) all proxy statements relating to meetings
of shareholders (whether annual or special), (4) all Current Reports on Form
8- K, (5) all Solicitation/Recommendation Statements on Schedule 14D-9, and
(6) all other reports, schedules, registration statements, or other documents
required to be filed with the SEC (collectively, the "Parent SEC Reports"),
except where the failure to file any such forms, reports, statements, or other
documents is not likely to have, individually or in the aggregate, a Parent
Material Adverse Effect. The Parent SEC Reports (x) were prepared in all
material respects in accordance with the requirements of the Securities Act or
the Exchange Act, as the case may be, and (y) did not at the time they were
filed contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
SECTION 4.06. Financial Statements; No Undisclosed Liabilities.
The audited consolidated financial statements and
unaudited consolidated interim financial statements (including the related
notes and schedules) of the Parent and its consolidated Subsidiaries included
or incorporated by reference in the Parent SEC Reports (the "Parent Financial
Statements") were prepared in accordance with generally accepted accounting
principles applied on a consistent basis (except as may be indicated in the
notes thereto), and fairly present the consolidated financial position of the
Parent and its consolidated Subsidiaries as of the dates thereof and their
consolidated results of operations and cash flows for the periods then ended,
subject, in the case of any unaudited interim financial statements, to normal
year-end adjustments, none of which is, individually or in the aggregate,
likely to have an the Parent Material Adverse Effect. Neither the Parent nor
its Subsidiaries has any liabilities, whether or not accrued, contingent or
otherwise, that individually or in the aggregate, are likely to have an the
Parent Material Adverse Effect other than liabilities disclosed in the
Schedules hereto or in the Parent SEC Reports or for which the Parent has made
adequate reserves as reflected in the Parent Financial Statements.
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SECTION 4.07. Litigation.
There are no actions, suits, investigations, or
proceedings pending or, to any of its Subsidiaries before any court or
arbitrator or any governmental body, agency, official, or authority that seek
to restrain or prohibit the consummation of the Offer or the Merger.
SECTION 4.08. Vote Required.
No vote of the holders of any class or series of
capital stock of the Parent is necessary to approve the purchase of Company
Shares pursuant to the Offer or the Merger. The Merger has been approved by
the affirmative vote of the holder of all of the outstanding Merger Sub Common
Shares.
SECTION 4.09. Availability of Funds.
The Parent and Merger Sub have available to them
sufficient funds to enable them to consummate the transactions contemplated by
this Agreement.
SECTION 4.10. Information Supplied.
None of the information supplied or to be supplied
in writing by the Parent or Merger Sub for inclusion in the Schedule 14D-9 or
the Proxy Material will, at the time the Schedule 14D-9 or any amendments or
supplements thereto are filed with the SEC or the Proxy Material is mailed to
the Company's shareholders, contain an untrue statement of a material fact or
omit 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 or, in the case of the Proxy Material, at the time
of the meeting of shareholders to which the Proxy Material relates or at the
Effective Time, omit to state any material fact necessary to correct any
statement that has become false or misleading in any earlier communication
with respect to the solicitation of any proxy for such meeting. None of the
Offer Documents, at the times filed with the SEC or on the date first
published, sent, or given to the Company's shareholders, contain or will
contain an untrue statement of a material fact or omit or will omit 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; except that, the foregoing does not apply to the extent that
any such untrue statement of a material fact or omission to state a material
fact was or is made by the Parent or Merger Sub in reliance upon and in
conformity with written
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information furnished to the Parent or Merger Sub or the Company specifically
for use in the Schedule 14D-9.
ARTICLE V
COVENANTS OF THE COMPANY
The Company agrees that:
SECTION 5.01. Conduct of the Company.
Except as contemplated or permitted by this
Agreement or as disclosed on Schedule 5.01 (Company Conduct), or as otherwise
approved in writing by the Parent, from the date hereof until the Effective
Time, the Company and its Subsidiaries will conduct their businesses in the
ordinary course consistent with past practice. Subject to the foregoing
exceptions, from the date hereof until the Effective Time:
(a) the Company will not adopt or propose any change
or amendment in its Articles of Incorporation or Regulations;
(b) the Company will not, and will not permit any of
its Subsidiaries to, merge, consolidate, or enter into a share exchange with
any other Person, acquire any material stock or any material amount of assets
of any other Person, sell, lease, license, mortgage, pledge, or otherwise
dispose of any material assets, except (i) in the ordinary course consistent
with past practice or (ii) transfers between the Company or its wholly owned
Subsidiaries;
(c) the Company will not declare, set aside, or pay
any dividends or make any distributions on the Company Shares, other than
normal quarterly dividends at the rates in effect on the date of this
Agreement;
(d) the Company will not, and will not permit any of
its Subsidiaries to, (i) issue, deliver, sell, encumber, or authorize or
propose the issuance, delivery, sale, or encumbrance of, any capital stock or
other securities of the Company or any Company Subsidiary Securities, other
than the issuance of Company Common Shares upon the exercise of Company
Options granted prior to the date hereof or upon conversion of the Company
Preferred Shares, (ii) split, combine, or reclassify any Company Shares or
Company Subsidiary Securities, (iii) repurchase, redeem, or otherwise acquire
any capital stock or other securities of the Company or any Company Subsidiary
Securities, or (iv) amend the terms of any outstanding securities;
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(e) the Company will not make any commitment or
enter into any contract or agreement that is likely to be, individually or in
the aggregate, material to the Company and its Subsidiaries taken as a whole
except in the ordinary course of business consistent with past practice;
(f) except to the extent required by law, by
existing contract, or by policy currently in effect, the Company and its
Subsidiaries will not increase in any manner the compensation or fringe
benefits of any of its directors or officers, pay any pension or retirement
allowance to any directors or officers, or become a party to, amend, or commit
itself to any pension, retirement, profit-sharing, welfare benefit plan, or
employment agreement with or for the benefit or any director or officer, other
than the payment of bonuses not execcding, in the aggregate, $200,000 to
officers of the Company in the ordinary course of business consistent with
past practices;
(g) the Company will not, and will not permit any of
its Subsidiaries to, make any Tax election or settle or compromise any material
federal, state, local, or foreign Tax liability;
(h) the Company will not take, and will not permit
any of its Subsidiaries to take, any action that would make any representation
or warranty of the Company contained herein inaccurate in any material respect
at, or as of, any time prior to the Effective Time or that would cause any
closing condition hereunder not to be satisfied, except as may be required by
law; and
(i) the Company will not agree to do any of the
foregoing.
SECTION 5.02. Access to Information.
From the date hereof until the Effective Time, the
Company will, upon reasonable notice, give the Parent, its counsel, financial
advisors, auditors, and other authorized representatives reasonable access
during regular business hours to the offices, properties, books, and records
of the Company and its Subsidiaries, and will furnish to the Parent, its
counsel, financial advisors, auditors, and other authorized representatives
such financial and operating data and other information as such Persons may
reasonably request, for the purpose of evaluating changes in the financial
condition, results of operations, or business of the Company and its
Subsidiaries after the date of this Agreement and will instruct the Company's
employees, counsel, and financial advisors to cooperate with the Parent in its
evaluation. All information provided to, or obtained by, the Parent or Merger
Sub in connection with the transactions contemplated hereby will be
"Evaluation Material" for purposes of
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the confidentiality agreement, dated April 17, 1996, between the Parent and
the Company.
SECTION 5.03. Other Offers.
From the date hereof until the termination of this
Agreement, the Company and its Subsidiaries will not, and will use all
reasonable efforts to cause their officers, directors, employees, and agents
not to, directly or indirectly, (i) take any action to solicit or initiate any
Company Acquisition Proposal (as defined below) or (ii) engage in negotiations
or enter into agreements with any Person with respect to a Company Acquisition
Proposal, disclose any nonpublic information relating to the Company or any of
its Subsidiaries, or afford access to the properties, books, or records of the
Company or any of its Subsidiaries, to any Person, except that the Company may
engage in negotiations with, or disclose such non-public information, or
provide such access to, any Person who has made an unsolicited Company
Acquisition Proposal if the Board of Directors of the Company, after
consultation with outside counsel to the Company, determines that its
fiduciary duties under applicable law require such actions. In such event, the
Company will notify the Parent that the Company's Board of Directors has
received a Company Acquisition Proposal and advise the Parent of the material
terms and conditions thereof. For purposes of this Agreement, "Company
Acquisition Proposal" means any good faith offer or proposal for a merger or
other business combination involving the Company, the acquisition of the
entire equity interest in the Company, or the acquisition of all or
substantially all of the assets of the Company, other than the transactions
contemplated by this Agreement.
SECTION 5.04. Notices of Certain Events.
The Company will promptly notify the Parent of:
(i) any notice or other communication from any
Person alleging that the consent of any third party is or may be required in
connection with the transactions contemplated by this Agreement;
(ii) any notice or other communication from any
governmental or regulatory agency or authority in connection with the
transactions contemplated by this Agreement;
(iii) any actions, suits, claims, investigations, or
proceedings commenced or, to the knowledge of the Company, threatened against,
relating to, or involving or otherwise affecting the Company or any of its
Subsidiaries that, if pending on the date of this Agreement, would have been
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required to have been disclosed pursuant to Section 3.10 or that relate to the
consummation of the transactions contemplated by this Agreement; and
(iv) any notice of, or other communication relating
to, a default, or an event that with notice or lapse of time or both would
become a default, under any material agreement that is received by the Company
or any of its Subsidiaries subsequent to the date of this Agreement.
SECTION 5.05. Merger Meeting; Proxy Statement.
(a) The Merger will be consummated as soon as
practicable (and in no event later than four months after) the purchase of
Company Shares pursuant to the Offer. If Merger Sub is able to do so under
Ohio law, it will consummate the Merger pursuant to the "short form" merger
provisions of Ohio Law. The Parent will vote, or cause to be voted, all
Company Shares beneficially owned by it in favor of the Merger. If required by
Ohio Law in order to consummate the Merger, as soon as practicable following
the purchase of Company Shares pursuant to the Offer, the Company will take
all action necessary in accordance with Ohio Law and with the Company's
Articles of Incorporation and Regulations to convene a meeting of its
shareholders to approve the Merger and adopt this Merger Agreement (the
"Merger Meeting"). The Company's Board of Directors will recommend that the
Company's shareholders approve the Merger and adopt this Agreement, and will
cause the Company to use all reasonable efforts to solicit from the
shareholders proxies to vote therefor, unless (i) such recommendation would
not be consistent with the fiduciary duties of the Board of Directors under
applicable law, as advised by counsel, or (ii) this Agreement is terminated in
accordance with Article IX.
(b) The Company will, if required by law for the
consummation of the Merger, prepare and file with the SEC preliminary proxy
materials relating to the approval of the Merger and the adoption of this
Agreement by the Company's shareholders, will provide the Parent with any and
all comments thereon by the SEC's staff, will use all reasonable efforts to
discuss with the Parent any proposed changes to such preliminary proxy
materials prior to responding to any comments thereon by the SEC's staff, and
will file with the SEC revised preliminary proxy materials, if appropriate,
and definitive proxy materials in a timely manner as required by the rules and
regulations of the SEC. Subject to the last sentence of Section 5.05(a), the
Proxy Material relating to the Merger Meeting will include the recommendation
of the Company's Board of Directors.
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ARTICLE VI
COVENANTS OF THE PARENT AND MERGER SUB
The Parent and Merger Sub agree that:
SECTION 6.01. Director, Officer, and Employee Liability.
From and after the Effective Time, the Parent and
Merger Sub will indemnify, defend, and hold harmless the present and former
directors, officers, and employees of the Company and its Subsidiaries against
all losses, claims, damages, and liability in respect of acts or omissions by
them at or prior to the Effective Time. For at least six years after the
Effective Time, the Parent will not take any action or terminate or amend the
Company's current directors' and officers' liability insurance in respect of
acts or omissions occurring at or prior to the Effective Time. The Parent and
Merger Sub will be obligated pursuant to this Section 6.01 to pay for only one
firm of counsel for all indemnified parties in each matter that is the subject
of indemnification hereunder, unless the use of one counsel for such
indemnified parties would present such counsel with a conflict of interest, in
which case the Parent and Merger Sub need only pay for separate counsel to the
extent necessary to resolve such conflict.
SECTION 6.02. Employee Benefits.
(a) With respect to benefits arising after the
Effective Time, it is the intention of the Parent and Merger Sub that the
Parent will continue to provide to the former employees of the Company and its
Subsidiaries who remain as employees of the Surviving Corporation and its
Subsidiaries after the Effective Time each of the benefits they are now
receiving from the Company and its Subsidiaries, including benefits under the
Company Employee Plans and the Company Benefit Arrangements but excluding any
equity-based compensation or benefits, at least through December 31, 1996. In
any event, the Parent and Merger Sub will continue to provide to such
employees, for at least one year after the Effective Time, the same severance
benefits as are now provided to them by the Company.
(b) With respect to benefits arising on or before
the Effective Time, the Parent and Merger Sub acknowledge that they have been
given an opportunity to review all of the Company Employee Plans and Company
Benefit Arrangements and that they are aware of the cost of providing the
benefits and performing the obligations of the Company and its Subsidiaries
thereunder. The Parent and Merger Sub jointly and severally agree that they
will not, and will cause the Surviving Corporation not to, contest the
validity of any of the Company Employee Plans or the Company Benefit
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Arrangements that are identified or described on Schedule 3.11, that consist
of immaterial arrangements with one or more employees or groups of employees,
or that have been disclosed in any Company SEC Report filed prior to the date
hereof, and that, except as provided in Section 6.02(a) above, they will, and
will cause the Surviving Corporation to, provide the benefits and perform the
obligations of the Company and its Subsidiaries to present or former officers
and employees arising on or before the Effective Time under the Company
Employee Plans and such Company Benefit Arrangements. The Parent and Merger
Sub also jointly and severally agree to reimburse, and will cause the
Surviving Corporation to reimburse, such persons who are listed on Schedule
3.11 for the costs (including reasonable attorneys' fees) of any litigation
initiated by, or initiated or threatened against, any of them in connection
with the enforcement of their rights under this Section 6.02(b), except that
no such reimbursement will be paid (and any such reimbursement previously made
will be refunded) with respect to any particular claim made by a present or
former officer or employee if the court determines that the claim was not made
in good faith.
ARTICLE VII
COVENANTS OF THE PARENT, MERGER SUB, AND THE COMPANY
The Parent, Merger Sub, and the Company agree that:
SECTION 7.01. Reasonable Efforts.
Subject to the terms and conditions of this
Agreement, each party will use its reasonable best efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary
or advisable under applicable laws and regulations to consummate the
transactions contemplated by this Agreement as promptly as practicable.
SECTION 7.02. Certain Filings and Consents.
The Company and the Parent will cooperate with one
another (a) in determining whether any action by or in respect of, or filing
with, any governmental body, agency, official, or authority is required, or
any actions, consents, approvals, or waivers are required to be obtained from
parties to any material contracts ("Third Party Consents"), in connection with
the consummation of the transactions contemplated by this Agreement and (b) in
attempting to take all such actions, to obtain all such consents, approvals,
and waivers, and to make all such filings. The Company and the Parent will
each promptly file Notification and Report Forms under the HSR Act and will
use all reasonable efforts to respond as promptly as practicable to all
requests
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for additional information or documentation received from the Antitrust
Division of the United States Department of Justice or the Federal Trade
Commission.
SECTION 7.03. Public Announcements.
The Parent and the Company will consult with each
other before issuing any press release or making any public statement with
respect to this Agreement and the transactions contemplated hereby and, except
as may be required by applicable law or any listing agreement with the NYSE,
will not issue any such press release or make any such public statement prior
to such consultation.
SECTION 7.04. State Takeover Laws.
If any "fair price," "moratorium," or "control share
acquisition" statute or other similar statute or regulation becomes applicable
to the transactions contemplated by this Agreement, the Company, the Parent,
and Merger Sub and their respective Boards of Directors will use all
reasonable efforts to grant such approvals and take such actions as are
necessary so that the transactions contemplated by this Agreement may be
consummated as promptly as practicable on the terms contemplated hereby and
otherwise act to minimize the effects of such statute or regulation on the
transactions contemplated hereby.
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.01. Conditions to the Obligations of Each Party.
The obligations of the Company, the Parent, and
Merger Sub to consummate the Merger are subject to the satisfaction of the
following conditions:
(a) if required by applicable law, the Merger has
been approved, and this Agreement has been adopted, by the requisite vote of the
Company's shareholders; and
(b) no provision of any applicable domestic law or
regulation, and no judgment, injunction, order, or decree of a court or
governmental agency or authority of competent jurisdiction, that has the
effect of making the Offer or the Merger illegal or otherwise restrains or
prohibits the purchase of Company Shares pursuant to the Offer or the
consummation of the Merger is in effect (each party agreeing to use all
reasonable efforts, including
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appeals to higher courts, to have any such judgment, injunction, order, or
decree lifted).
SECTION 8.02. Conditions to the Obligations of the
Parent and Merger Sub.
The obligations of the Parent and Merger Sub to
consummate the Merger are subject to the satisfaction or waiver of the Offer
Conditions and to compliance by the Company with its obligations under Section
1.01(f).
ARTICLE IX
TERMINATION
SECTION 9.01. Termination.
This Agreement may be terminated and the Merger may
be abandoned at any time prior to the Effective Time (notwithstanding any
approval of Merger and adoption of this Agreement by the Company's
shareholders):
(a) by mutual written consent of the Company, the
Parent, and Merger Sub;
(b) by either the Company or the Parent if the
Merger has not been consummated by November 30, 1996, provided that the right
to terminate this Agreement under this clause (b) will not be available to any
party that, at the time of termination, is in material breach of any of its
obligations under this Agreement;
(c) by either the Company or the Parent if any
applicable domestic law, rule, or regulation makes consummation of the Merger
illegal or if any judgment, injunction, order, or decree of a court or
governmental agency or authority of competent jurisdiction restrains or
prohibits the consummation of the Merger, and such judgment, injunction,
order, or decree has become final and nonappealable;
(d) by either the Company or the Parent if the
shareholder approvals referred to in Section 8.01(a) have not been obtained at
the Merger Meeting;
(e) by either the Company or the Parent if the Offer
terminates without the purchase of Company Shares thereunder;
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(f) prior to the purchase of Company Shares by
Merger Sub pursuant to the Offer, by the Parent if the Board of Directors of
the Company does not publicly recommend in the Schedule 14D-9 or in the Proxy
Material relating to the 831 Meeting or the Merger Meeting that the Company's
shareholders accept the Offer and tender their Company Shares pursuant to the
Offer and approve the Merger and adopt the Merger Agreement, or if the Board
of Directors of the Company withdraws, modifies, or changes such
recommendation in any manner adverse to the Parent; or
(g) by the Company if the Company receives an
unsolicited Company Acquisition Proposal that the Board of Directors of the
Company determines in good faith, after consultation with its legal and
financial advisors, is likely to lead to a merger, acquisition, consolidation,
or similar transaction that is more favorable to the shareholders of the
Company than the transactions contemplated by this Agreement; provided that,
the Company has provided the Parent with at least five business days notice of
the material terms of such Company Acquisition Proposal and has paid the
Termination Fee (as defined in Section 10.04(b)) to the Parent.
SECTION 9.02. Effect of Termination.
If this Agreement is terminated and the Merger is
abandoned pursuant to Section 9.01, no party (or any of its directors or
officers) will have any liability or further obligation to any other party
except (a) as provided in Section 10.04, (b) that the agreements contained in
Section 10.04 and in the last sentence of Section 5.02 will survive the
termination hereof, and (c) that nothing herein will relieve any party from
liability for any breach of its obligations under this Agreement.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices.
All notices, requests, and other communications to
any party hereunder will be in writing (including telecopy) and will be given,
if to the Parent or Merger Sub, to:
Danaher Corporation
1250 24th Street, N.W., Suite 800
Washington, D.C. 20037
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Attention: President
with a copy to:
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, N.Y. 10022
Attention: Morris J. Kramer, Esq.
if to the Company, to:
Acme-Cleveland Corporation
30100 Chagrin Boulevard, Suite 100
Pepper Pike, OH 44124-5705
Attention: David L. Swift,
President and Chief Executive Offier
with a copy to:
Thompson Hine & Flory P.L.L.
3900 Key Tower
127 Public Square
Cleveland, OH 44114-1216
Attention: Donald H. Messinger, Esq.
or to such other address or telecopy number as such party may hereafter
specify for the purpose by notice to the other parties. Each such notice,
request, or other communication will be effective upon receipt.
SECTION 10.02. Survival.
None of the representations and warranties,
agreements, and other provisions contained in this Agreement or in any
certificate or other writing delivered pursuant to this Agreement, other than
Sections 6.01 and 6.02 and Article I, will survive the Effective Time.
SECTION 10.03. Amendments; No Waivers.
(a) Subject to the applicable provisions of Ohio Law
and Delaware Law, any provision of this Agreement may be amended or waived
prior to the Effective Time if, and only if, such amendment or waiver is in
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writing and signed, in the case of an amendment, by the Company, the Parent,
and Merger Sub or, in the case of a waiver, by the party against whom the
waiver is to be effective.
(b) No failure or delay by any party in exercising
any right, power, or privilege hereunder will operate as a waiver thereof, nor
will any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege.
SECTION 10.04. Fees and Expenses.
(a) Subject to paragraph (b) of this Section, all
costs and expenses incurred in connection with this Agreement will be paid by
the party incurring the costs and expenses, except that the Parent and the
Company will each pay one-half of all printing, filing, and mailing costs for
the Proxy Statement and all SEC, HSR Act, and other regulatory filing fees.
(b) If (i) this Agreement is terminated by the
Company pursuant to Section 9.01(g), (ii) any Person publicly makes a Company
Acquisition Proposal and thereafter this Agreement is terminated pursuant to
Section 9.01(b) or 9.01(d) because the Company's shareholders fail to approve
the Merger and adopt this Agreement, or (iii) any Person publicly makes a
Company Acquisition Proposal and thereafter this Agreement is terminated
pursuant to Section 9.01(f), then the Company will reimburse the Parent and
Merger Sub for all of their reasonable documented out-of-pocket expenses and
fees other than any expenses incurred in connection with the preparation for,
prosecution of, or defense of litigation (subject to a maximum reimbursement
obligation of $1,500,000) actually incurred by the Parent in connection with
the transactions contemplated by this Agreement prior to the termination of
this Agreement, including, without limitation, all fees and expenses of
counsel, financial advisors, accountants, and environmental and other experts
and consultants to the Parent and Merger Sub ("Transaction Costs").
Notwithstanding the preceding paragraph, if (i) this
Agreement is terminated by the Company pursuant to Section 9.01(g), (ii) any
Person publicly makes a Company Acquisition Proposal, thereafter this
Agreement is terminated pursuant to Section 9.01(b) or 9.01(d) because the
Company's shareholders fail to approve the Merger and adopt this Agreement,
and within 12 months after termination the Company accepts or consummates any
Company Acquisition Proposal, or (iii) any Person publicly makes a Company
Acquisition Proposal and thereafter this Agreement is terminated pursuant to
Section 9.01(f), then, in addition to reimbursing the Parent and Merger Sub
for their Transaction Costs, the Company will pay to the Parent a fee of
$6,000,000 ("Termination Fee"). The Termination Fee will be payable
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by delivery of immediately available funds at the time of termination, in the
case of termination under clause (i) or (iii) of the preceding sentence, or
immediately prior to the earlier of the acceptance or the consummation of the
Company Acquisition Proposal, in the case of termination under clause (ii).
(c) If the Parent receives a Termination Fee,
neither the Parent, Merger Sub, nor any of their affiliates will assert or
pursue in any manner, directly or indirectly, whether arising in tort,
contract, or otherwise, any claim or cause of action (i) against any person
submitting a Company Acquisition or (ii) against the Company or any of its
directors, officers, employees, agents, or representatives based in whole or
in part upon its or their receipt, consideration, recommendation, or approval
of an Alternative Transaction, including the Company's exercise of its right
of termination this Agreement under Section 9.
SECTION 10.05. Successors and Assigns.
The provisions of this Agreement will be binding
upon and inure to the benefit of the parties and their respective successors
and assigns, provided that no party may assign, delegate, or otherwise
transfer any of its rights or obligations under this Agreement without the
consent of the other parties.
SECTION 10.06. Governing Law.
This Agreement will be construed in accordance with
and governed by the law of the State of Ohio without regard to principles of
conflict of laws.
SECTION 10.07. Counterparts; Effectiveness.
This Agreement may be signed in any number of
counterparts, each of which will be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument. This
Agreement will become effective when each party has received counterparts
hereof signed by all of the other parties.
SECTION 10.08. Entire Agreement.
This Agreement and the confidentiality agreement,
dated April 17, 1996, between the Parent and the Company constitute the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior agreements, both written and oral, among the parties with
respect to the subject matter of this Agreement. No representation, warranty,
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or inducement not set forth herein has been made or relied upon by any party.
Neither this Agreement nor any provision hereof is intended to confer upon any
Person other than the parties any rights or remedies, except that the
provisions of Article I are intended for the benefit of the Company's
shareholders and holders of Company Options, and the provisions of Sections
6.01 and 6.02 are intended for the benefit of present and former directors,
officers, and employees of the Company.
SECTION 10.09. Headings.
The headings contained in this Agreement are for
reference purposes only and will not in any way affect the meaning or
interpretation of this Agreement.
SECTION 10.10. Severability.
If any term or other provision of this Agreement is
invalid, illegal, or unenforceable, all other provisions of this Agreement
will remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected.
SECTION 10.11. Specific Performance.
The parties agree that irreparable damage would
occur if any of the provisions of this Agreement are not performed in
accordance with the terms hereof and that the parties will be entitled to
specific performance of the terms hereof in addition to any other remedies at
law or in equity.
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IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed by their respective authorized officers as of
the day and year first above written.
DANAHER CORPORATION
By:_________________________
Name:
Title:
WEC ACQUISITION CORPORATION
By:_________________________
Name:
Title:
ACME-CLEVELAND CORPORATION
By:_________________________
Name:
Title:
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INDEX OF DEFINED TERMS
Page No.
---------
831 Meeting .............................................................. 1
Affiliate ................................................................ 14
Agreement ................................................................ 1
CERCLA ................................................................... 19
Closing .................................................................. 4
Company .................................................................. 1
Company A Preferred Share................................................. 1
Company Acquisition Proposal.............................................. 28
Company B Preferred Shares................................................ 10
Company Benefit Arrangement............................................... 15
Company Common Share...................................................... 1
Company Employee Plans.................................................... 14
Company Financial Statements.............................................. 13
Company Intellectual Property Rights...................................... 19
Company Material Adverse Effect........................................... 8
Company Option ........................................................... 7
Company Option Plans...................................................... 7
Company Performance Plan.................................................. 7
Company Real Property..................................................... 19
Company Rights ........................................................... 10
Company Rights Agreement.................................................. 10
Company SEC Reports....................................................... 12
Company Shares ........................................................... 2
Company Subsidiary Securities............................................. 12
Delaware Law ............................................................ 4
Effective Time ........................................................... 4
Environmental Law ........................................................ 19
ERISA ................................................................... 15
Exchange Act ............................................................. 3
Exchange Agent ........................................................... 5
Exchange Fund ........................................................... 5
Goldman Sachs ........................................................... 3
Hazardous Material ....................................................... 19
HSR Act ................................................................. 9
Independent Directors..................................................... 3
Intellectual Property Rights.............................................. 18
Lien .................................................................... 10
Merger ................................................................... 4
Merger Consideration...................................................... 5
Merger Meeting .......................................................... 29
Merger Sub ............................................................... 1
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Merger Sub Common Share .................................................. 5
Offer .................................................................... 1
Offer Conditions ......................................................... 2
Offer Documents .......................................................... 2
Ohio Law ................................................................ 1
Parent ................................................................... 1
Parent Financial Statements............................................... 24
Parent Material Adverse Effect............................................ 23
Parent SEC Reports ....................................................... 24
Person ................................................................... 6
Proxy Material ........................................................... 22
Schedule 14D-9 ........................................................... 3
SEC ...................................................................... 2
Share Certificate ........................................................ 5
Subsidiary ............................................................... 11
Surviving Corporation..................................................... 4
Termination Fee .......................................................... 36
Third Party Consents...................................................... 31
Transaction Costs ........................................................ 36
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LIST OF SCHEDULES
Schedule Designation
- -------- -----------
1.01(a) 831 Meeting Procedures
1.01(b) Offer Conditions
3.03 Company Governmental Authorization
3.04 Company Liens Created
3.05 Company Capitalization
3.06 Company Subsidiaries
3.09 Certain Company Changes
3.10 Company Litigation
3.11 Company Employee Plans
3.13 Company Intellectual Property Rights
3.14 Company Environmental Matters
4.03 Parent Governmental Authorizations
5.01 Company Conduct
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SCHEDULE 1.01(a)
831 MEETING PROCEDURES
1. CT Corporation Systems, Inc. shall be appointed to serve as
the sole Inspector of Elections (the "Inspector of Elections") for the
831 Meeting, subject to Section 1701.50 and other applicable
provisions of the Ohio General Corporation Law (the "OGCL") and the
further provisions of this Schedule 1.01(a).
2. The Inspector of Elections shall determine the presence of a quorum
in accordance with the provisions of Section 1701.831(E)(1) of the
OGCL for purposes of each of the two votes of shareholders required
by the provision.
3. For purposes of determining the presence of a quorum for the second
vote required by Section 1701.831(E)(1), and determining which
shares are entitled to participate in that second vote, the
Inspector of Elections shall exclude as "interested shares" the
following:
a. All shares beneficially owned by Danaher, as shown by the
last Schedule 14D-1 filed by Danaher with the SEC prior to
the 831 Meeting;
b. Shares beneficially owned by officers of Acme-Cleveland, as
shown in the proxy statement relating to the 831 Meeting;
c. Any additional shares known by the Inspector to Elections
to have been acquired by Danaher or any officer of
Acme-Cleveland after the date of the last Schedule 14D-1
filed by Danaher with the SEC or the date of the proxy
statement relating to the 831 meeting, as the case may be.
d. For purposes of the definition of "interested shares" set
forth in Section 1701.01(CC)(2) of the OGCL, any shares
acquired, directly or indirectly, by any person from the
holder or holders thereof and any other person acting in
concert with such holder or holders, for aggregate
consideration in excess of $250,000 during the period
beginning on March 7, 1996 and ending on the date of the 831
Meeting and not sold by such holder or holders prior to the
date of the 831 Meeting of Shareholders, to the extent that
any such
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"interested shares" are (i) identified by the holder or
holders thereof to the Inspector of Elections or (ii) are
otherwise determined by the Inspector of Elections to
represent "interested shares" on the basis of the record
list.
4. The proxy cards used by Acme-Cleveland and Danaher will not contain
any certification or otherwise solicit information regarding whether
the shares represented by the proxy are "interested shares."
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SCHEDULE 1.01(b)
OFFER CONDITIONS
Merger Sub will not be required to accept for
payment or, subject to any applicable rules and regulations of the SEC,
including Rule 14e-1(c) under the Exchange Act (relating to Merger Sub's
obligation to pay for or return tendered shares after the termination or
withdrawal of the Offer), to pay for any Company Shares not theretofore
accepted for payment or paid for pursuant to the Offer, if (1) there are not
validly tendered and not properly withdrawn prior to the expiration of the
Offer that number of Company Shares which, when aggregated with the Company
Shares then owned by the Parent and any of its affiliates, represents at least
a majority of the Company Shares then outstanding on a fully diluted basis or
(2) at any time on or after the date of the Merger Agreement and at or before
the time that the particular Company Shares are accepted for payment (whether
or not any other Company Shares have theretofore been accepted for payment or
paid for pursuant to the Offer) any of the following conditions exist:
(a) any provision of any applicable domestic law or
regulation, or any judgment, injunction, order, or decree of a court or
governmental agency or authority of competent jurisdiction, is in effect that
(i) makes the Offer or the Merger illegal or otherwise, directly or
indirectly, prohibits, materially restrains, or makes materially more costly
the making of the Offer, the acceptance for payment of, payment for, or
ownership, directly or indirectly, of some or all of the Company Shares by
Merger Sub or the Parent or materially delays the Merger; (ii) prohibits or
materially limits the ownership or operation by the Company or any of its
Subsidiaries that owns a material portion of the business and assets of the
Company and its Subsidiaries, taken as a whole, or by the Parent, Merger Sub,
or any Subsidiaries of the Parent or all or a material portion of the business
or assets of the Company and its Subsidiaries, taken as a whole, or the Parent
and its Subsidiaries, taken as a whole, as a result of the Offer, the Merger,
or the other transactions contemplated by the Merger Agreement, or (iii)
imposes limitations on the ability of Merger Sub, the Parent, or any of
Subsidiaries of the Parent effectively to acquire, hold, or exercise full
rights of ownership of the Company Shares, including but not limited to the
right to vote any Company Shares acquired or owned by Merger Sub, the Parent,
or any Subsidiaries of the Parent on all matters properly presented to the
shareholders of the Company, including but not limited to the approval of the
Merger Agreement and adoption of the Merger and the right to vote any shares
of capital stock of any Subsidiaries of the Company (other than immaterial
Subsidiaries) (each party agreeing to use all reasonable efforts, including
appeals to higher courts, to have any such judgment, injunction, order, or
decree lifted);
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