<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(E)(1) OF
THE SECURITIES EXCHANGE ACT OF 1934)
------------------------
FLEETWOOD ENTERPRISES, INC.
(Name of Issuer)
FLEETWOOD ENTERPRISES, INC.
(Name of Person(s) Filing Statement)
------------------------
COMMON STOCK, PAR VALUE $1.00 PER SHARE
(Title of Class of Securities)
------------------------
33909910
(CUSIP Number of Class of Securities)
------------------------
WILLIAM H. LEAR
VICE PRESIDENT-GENERAL COUNSEL AND SECRETARY
FLEETWOOD ENTERPRISES, INC.
3125 MYERS STREET, POST OFFICE BOX 7638
RIVERSIDE, CALIFORNIA 92513-7638
(909) 351-3500
(Name, address and telephone number of person authorized to receive notices
and communications on behalf of the person(s) filing statement)
------------------------
COPY TO:
Robert E. Dean, Esq.
Gibson, Dunn & Crutcher LLP
Jamboree Center, 4 Park Plaza
Irvine, California 92714
(714) 451-3954
MAY 31, 1996
(Date tender offer first published, sent or given to security holders)
------------------------
CALCULATION OF FILING FEE
<TABLE>
<S> <C>
TRANSACTION VALUATION* AMOUNT OF FILING FEE
$353,400,000 $70,680.00
</TABLE>
(*) Determined pursuant to Rule 0-11(b)(1) of the Securities Exchange Act of
1934. Assumes the purchase of 11,400,000 shares at the maximum tender offer
price of $31.00 per share.
/ / Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount previously paid: Filing party:
Form or registration no.: Date filed:
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<PAGE>
This Issuer Tender Offer Statement on Schedule 13E-4 (this "Statement")
relates to an offer by Fleetwood Enterprises, Inc., a Delaware corporation (the
"Company"), to purchase, upon the terms and subject to the conditions contained
in the Offer to Purchase, dated May 31, 1996 (the "Offer to Purchase"), and the
accompanying Letter of Transmittal (which together constitute the "Offer" and
which are annexed to and filed with this Statement as Exhibits (a)(1) and
(a)(2), respectively) up to 11,400,000 shares of Common Stock of the Company,
par value $1.00 per share (the "Shares") (including the associated Series A
Junior Participating Preferred Stock Purchase Rights (the "Rights") issued
pursuant to the Rights Agreement dated as of November 10, 1988, between the
Company and The First National Bank of Boston, as Rights Agent), at a price, net
to the sellers in cash, without interest thereon, not greater than $31.00 nor
less than $27.00 per Share, taking into consideration the number of Shares so
tendered and the prices specified by the tendering stockholders. Unless the
Rights are redeemed by the Company, a tender of Shares will also constitute a
tender of the associated Rights. Unless the context requires otherwise, all
references herein to the Shares shall include the associated Rights.
ITEM 1. SECURITY AND ISSUER.
(a) The name of the issuer is Fleetwood Enterprises, Inc., a Delaware
corporation. The address of its principal executive office is 3125 Myers Street,
Post Office Box 7638, Riverside, California 92513-7638.
(b) The class of equity securities to which this Statement relates is the
Company's Common Stock, par value $1.00 per share. The information set forth on
the cover page, including the inside front cover page, and in "11. INTERESTS OF
DIRECTORS AND OFFICERS; TRANSACTIONS AND AGREEMENTS CONCERNING THE SHARES" of
the Offer to Purchase is incorporated herein by reference.
(c) The information set forth in "7. PRICE RANGE OF SHARES; DIVIDENDS" of
the Offer to Purchase is incorporated herein by reference.
(d) Not applicable.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in "9. SOURCE AND AMOUNT OF FUNDS" of the
Offer to Purchase is incorporated herein by reference.
(b) The information set forth in "9. SOURCE AND AMOUNT OF FUNDS" of the
Offer to Purchase is incorporated herein by reference.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
(a)-(j) The information set forth in "8. PURPOSE OF THE OFFER; CERTAIN
EFFECTS OF THE OFFER" of the Offer to Purchase is incorporated herein by
reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth in "11. INTERESTS OF DIRECTORS AND OFFICERS;
TRANSACTIONS AND AGREEMENTS CONCERNING THE SHARES" of the Offer to Purchase is
incorporated herein by reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE ISSUER'S SECURITIES.
The information set forth in "11. INTERESTS OF DIRECTORS AND OFFICERS;
TRANSACTIONS AND AGREEMENTS CONCERNING THE SHARES" of the Offer to Purchase is
incorporated herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in "14. FEES AND EXPENSES" of the Offer to
Purchase is incorporated herein by reference.
2
<PAGE>
ITEM 7. FINANCIAL INFORMATION.
The incorporation by reference herein of the financial information described
below does not constitute an admission that such information is material to a
Company stockholder's decision to tender, sell, or hold Shares being sought in
the Offer.
(a) The information set forth in "10. CERTAIN INFORMATION CONCERNING THE
COMPANY -- SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION FOR THE
COMPANY" of the Offer to Purchase is incorporated herein by reference.
(b) The information set forth in "10. CERTAIN INFORMATION CONCERNING THE
COMPANY -- SUMMARY UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION" of
the Offer to Purchase is incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
The incorporation by reference herein of the information described below
does not constitute an admission that such information is material to a Company
stockholder's decision to tender, sell or hold Shares being sought in the Offer.
(a) The information set forth in "11. INTERESTS OF DIRECTORS AND OFFICERS;
TRANSACTIONS AND AGREEMENTS CONCERNING THE SHARES" of the Offer to Purchase is
incorporated herein by reference.
(b) The information set forth in "12. CERTAIN LEGAL AND REGULATORY MATTERS"
of the Offer to Purchase is incorporated herein by reference.
(c) The information set forth in Section "8. PURPOSE OF THE OFFER; CERTAIN
EFFECTS OF THE OFFER -- CERTAIN EFFECTS OF THE OFFER -- MARGINABILITY" of the
Offer to Purchase is incorporated herein by reference.
(d) None.
(e) The information set forth in the Offer to Purchase and the related
Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1)
and (a)(2), respectively, is incorporated herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- ------------------------------------------------------------
<S> <C>
(a)(1) Offer to Purchase, dated May 31, 1996
(a)(2) Form of Letter of Transmittal
(a)(3) Form of Notice of Guaranteed Delivery
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees
(a)(5) Form of Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9
(a)(7) Form of Letter to Stockholders from John C. Crean, Chairman
of the Board and Chief Executive Officer of the Company,
dated May 31, 1996
(a)(8) Form of press release issued by the Company on May 30, 1996
(b) Note Agreement, dated as of April 22, 1996, between the
Company and The Prudential Insurance Company of America
(c) None
(d) None
(e) Not applicable
(f) None
</TABLE>
3
<PAGE>
SIGNATURES
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.
FLEETWOOD ENTERPRISES, INC.
By: /s/ PAUL M. BINGHAM
-----------------------------------
Paul M. Bingham, Financial Vice
President
Dated: May 31, 1996
4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
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<S> <C> <C>
(a)(1) Offer to Purchase, dated May 31, 1996
(a)(2) Form of Letter of Transmittal
(a)(3) Form of Notice of Guaranteed Delivery
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees
(a)(5) Form of Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9
(a)(7) Form of Letter to Stockholders from John C. Crean, Chairman
of the Board and Chief Executive Officer of the Company,
dated May 31, 1996
(a)(8) Form of press release issued by the Company on May 30, 1996
(b) Note Agreement, dated as of April 22, 1996, between the
Company and The Prudential Insurance Company of America
(c) None
(d) None
(e) Not applicable
(f) None
</TABLE>
<PAGE>
OFFER TO PURCHASE FOR CASH
BY
FLEETWOOD ENTERPRISES, INC.
UP TO 11,400,000 SHARES OF ITS COMMON STOCK, PAR VALUE $1.00 PER SHARE
(INCLUDING THE ASSOCIATED SERIES A JUNIOR PARTICIPATING PREFERRED STOCK PURCHASE
RIGHTS)
AT A PURCHASE PRICE NOT GREATER THAN $31.00
NOR LESS THAN $27.00 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE
AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, JUNE 27, 1996,
UNLESS THE OFFER IS EXTENDED.
Fleetwood Enterprises, Inc., a Delaware corporation (the "Company"), hereby
invites its stockholders to tender shares of Common Stock of the Company, par
value $1.00 per share (the "Shares") (including the associated Series A Junior
Participating Preferred Stock Purchase Rights (the "Rights") issued pursuant to
the Rights Agreement dated as of November 10, 1988, between the Company and The
First National Bank of Boston, as Rights Agent), at a price, net to the sellers
in cash, without interest thereon, not greater than $31.00 nor less than $27.00
per Share, specified by such tendering stockholders, upon the terms and subject
to the conditions set forth herein and in the related Letter of Transmittal
(which together constitute the "Offer"). Unless the Rights are redeemed by the
Company, a tender of Shares will also constitute a tender of the associated
Rights. Unless the context requires otherwise, all references herein to the
Shares shall include the associated Rights. The Company will determine a single
per Share price (not greater than $31.00 nor less than $27.00 per Share) that it
will pay for Shares validly tendered pursuant to the Offer and not withdrawn
(the "Purchase Price"), taking into consideration the number of Shares so
tendered and the prices specified by the tendering stockholders. The Company
will select the lowest Purchase Price that will enable it to purchase 11,400,000
Shares (or such lesser number of Shares as are validly tendered and not
withdrawn at prices not greater than $31.00 nor less than $27.00 per Share)
pursuant to the Offer. The Company will purchase all Shares validly tendered at
prices at or below the Purchase Price and not withdrawn on or prior to the
Expiration Date (as defined in SECTION 1), upon the terms and subject to the
conditions of the Offer, including the provisions thereof relating to proration
and conditional tenders described herein. The Purchase Price will be paid in
cash, net to the seller, without interest thereon, with respect to all Shares
purchased. No separate consideration will be paid for the Rights. All Shares
tendered at prices in excess of the Purchase Price, Shares not purchased because
of proration and Shares that were conditionally tendered and not accepted for
purchase will be returned. Stockholders must complete the section of the Letter
of Transmittal relating to the price at which they are tendering Shares in order
to validly tender Shares.
--------------------------
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO OTHER CONDITIONS. SEE SECTION 5.
--------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either (1) complete and sign the Letter of Transmittal or a
facsimile thereof in accordance with the Instructions in the Letter of
Transmittal, mail or deliver it and any other required documents to The First
National Bank of Boston (the "Depositary"), and either mail or deliver the
certificates representing Shares to be tendered to the Depositary along with the
Letter of Transmittal or deliver such Shares pursuant to the procedure for
book-entry transfer set forth in SECTION 2 or (2) request such stockholder's
broker, dealer, commercial bank, trust company or nominee to effect the
transaction for such stockholder. A stockholder whose Shares are registered in
the name of a broker, dealer, commercial bank, trust company or nominee must
contact such broker, dealer, commercial bank, trust company or nominee if such
stockholder desires to tender such Shares. Any stockholder who desires to tender
Shares and whose certificates for such Shares are not immediately available, or
who cannot comply in a timely manner with the procedure for book-entry transfer,
should tender such Shares by following the procedure for guaranteed delivery set
forth in SECTION 2.
--------------------------
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE MAKING OF THE OFFER.
HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
TO ANY STOCKHOLDER AS TO WHETHER TO TENDER ALL, OR ANY, SHARES. EACH STOCKHOLDER
MUST MAKE SUCH STOCKHOLDER'S OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF
SO, HOW MANY SHARES TO TENDER AND AT WHAT PRICE. THE COMPANY HAS BEEN ADVISED
THAT CERTAIN DIRECTORS AND OFFICERS OF THE COMPANY INTEND TO TENDER SHARES
PURSUANT TO THE OFFER, WHICH SHARES IN THE AGGREGATE CONSTITUTE APPROXIMATELY
350,000 SHARES, OR APPROXIMATELY .77% OF THE SHARES OUTSTANDING AS OF MAY 30,
1996. SEE SECTION 11.
--------------------------
THE DEALER MANAGER FOR THE OFFER IS:
PAINEWEBBER INCORPORATED
THE DATE OF THIS OFFER TO PURCHASE IS MAY 31, 1996
<PAGE>
As of May 30, 1996, the Company had issued and outstanding 45,640,442 Shares
and had reserved for issuance upon exercise of outstanding stock options
2,617,624 Shares. The 11,400,000 Shares that the Company is offering to purchase
pursuant to the Offer represent approximately 25.0% of the Shares then
outstanding, or approximately 23.6% of the Shares then outstanding on a fully
diluted basis (assuming the exercise of all outstanding stock options). The
Shares are listed and principally traded on the New York Stock Exchange (the
"NYSE"). The Shares are also listed and traded on the Pacific Stock Exchange,
and call options are traded on the American Stock Exchange. The Shares trade
under the symbol "FLE." On May 29, 1996, the last full trading day prior to
announcement of the Offer, the closing price of the Shares on the NYSE Composite
Tape was $27.625 per Share. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET
QUOTATIONS FOR THE SHARES.
Questions or requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal or other tender offer materials may be
directed to the Information Agent or the Dealer Manager at their respective
addresses and telephone numbers set forth on the back cover of this Offer to
Purchase, and such copies will be furnished promptly at the Company's expense.
Stockholders may also contact their local broker, dealer, commercial bank or
trust company for assistance concerning the Offer.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY AS TO WHETHER STOCKHOLDERS SHOULD TENDER SHARES PURSUANT TO THE OFFER.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN
OR IN THE RELATED LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH RECOMMENDATION
AND SUCH OTHER INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
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<C> <S> <C>
INTRODUCTION.......................................................... 1
1. NUMBER OF SHARES; PRORATION; ODD LOTS................................. 2
2. PROCEDURE FOR TENDERING SHARES; CONDITIONAL TENDER OF SHARES.......... 4
3. WITHDRAWAL RIGHTS..................................................... 7
4. ACCEPTANCE OF SHARES FOR PAYMENT AND PAYMENT OF PURCHASE PRICE........ 8
5. CERTAIN CONDITIONS OF THE OFFER....................................... 9
6. EXTENSION OF THE OFFER; TERMINATION; AMENDMENTS....................... 11
7. PRICE RANGE OF SHARES; DIVIDENDS...................................... 12
8. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER.................... 12
9. SOURCE AND AMOUNT OF FUNDS............................................ 14
10. CERTAIN INFORMATION CONCERNING THE COMPANY............................ 15
11. INTERESTS OF DIRECTORS AND OFFICERS; TRANSACTIONS AND AGREEMENTS
CONCERNING THE SHARES................................................ 21
12. CERTAIN LEGAL AND REGULATORY MATTERS.................................. 21
13. CERTAIN FEDERAL INCOME TAX CONSEQUENCES............................... 22
14. FEES AND EXPENSES..................................................... 25
15. MISCELLANEOUS......................................................... 26
</TABLE>
<PAGE>
To the Holders of Shares of Common Stock of
Fleetwood Enterprises, Inc.:
INTRODUCTION
Fleetwood Enterprises, Inc., a Delaware corporation (the "Company"), hereby
invites its stockholders to tender shares of the Common Stock of the Company,
par value $1.00 per share (the "Shares") (including the associated Series A
Junior Participating Preferred Stock Purchase Rights (the "Rights") issued
pursuant to the Rights Agreement, dated as of November 10, 1988, between the
Company and The First National Bank of Boston, as Rights Agent), at a price, net
to the sellers in cash, without interest thereon, not greater than $31.00 nor
less than $27.00 per Share, specified by such tendering stockholders, upon the
terms and subject to the conditions set forth herein and in the related Letter
of Transmittal (which together constitute the "Offer"). Unless the Rights are
redeemed by the Company, a tender of Shares will also constitute a tender of the
associated Rights. Unless the context requires otherwise, all references herein
to the Shares shall include the associated Rights.
The Company will determine a single per Share price (not greater than $31.00
nor less than $27.00 per Share) that it will pay for the Shares validly tendered
pursuant to the Offer and not withdrawn (the "Purchase Price"), taking into
account the number of Shares so tendered and the prices specified by tendering
stockholders. The Company will select the lowest Purchase Price that will enable
it to purchase 11,400,000 Shares (or such lesser number of Shares as are validly
tendered and not withdrawn at prices not greater than $31.00 nor less than
$27.00 per Share) pursuant to the Offer. The Company will purchase all Shares
validly tendered at prices at or below the Purchase Price and not withdrawn on
or prior to the Expiration Date (as defined in SECTION 1), upon the terms and
subject to the conditions of the Offer, including the provisions relating to
proration and conditional tenders described below. The Purchase Price will be
paid in cash, net to the seller, without interest thereon, with respect to all
Shares purchased. No separate consideration will be paid for the Rights. All
Shares tendered at prices in excess of the Purchase Price, Shares not purchased
because of proration and Shares that were conditionally tendered and not
accepted for purchase will be returned.
On May 24, 1996, the Company completed the sale of its wholly-owned finance
subsidiary, Fleetwood Credit Corp. ("FCC"), for $156.6 million in cash. The net
proceeds from this sale will be used to purchase Shares in the Offer. See
SECTIONS 9 AND 10.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 5.
If more than 11,400,000 Shares (or such greater number of Shares as the
Company may elect to purchase) have been validly tendered at or below the
Purchase Price and not withdrawn on or prior to the Expiration Date, the Company
will purchase Shares first from stockholders who owned beneficially, as of the
close of business on May 30, 1996, and continue to own beneficially as of the
Expiration Date, an aggregate of fewer than 100 Shares and who properly tender
all their Shares at or below the Purchase Price, and then on a pro rata basis
from all other stockholders who validly tender Shares at or below the Purchase
Price. See SECTION 1.
Tendering stockholders will not be obligated to pay brokerage commissions,
solicitation fees or, subject to the Instructions to the Letter of Transmittal,
stock transfer taxes on the purchase of Shares by the Company pursuant to the
Offer. The Company will pay certain expenses of PaineWebber Incorporated (the
"Dealer Manager"), The First National Bank of Boston (the "Depositary") and D.F.
King & Co., Inc. (the "Information Agent") incurred in connection with the
Offer. See SECTION 14.
1
<PAGE>
ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE AND SIGN THE
SUBSTITUTE FORM W-9 THAT IS INCLUDED IN THE LETTER OF TRANSMITTAL MAY BE SUBJECT
TO UNITED STATES FEDERAL INCOME TAX BACKUP WITHHOLDING EQUAL TO 31% OF THE GROSS
PROCEEDS PAYABLE TO SUCH STOCKHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. SEE
SECTIONS 2 AND 13.
As of May 30, 1996, the Company had issued and outstanding 45,640,442 Shares
and had reserved for issuance upon exercise of outstanding stock options
2,617,624 Shares. The 11,400,000 Shares that the Company is offering to purchase
pursuant to the Offer represent approximately 25.0% of the Shares then
outstanding, or approximately 23.6% of the Shares then outstanding on a fully
diluted basis (assuming the exercise of all outstanding stock options).
The Shares are listed and principally traded on the New York Stock Exchange
(the "NYSE"). The Shares are also listed and traded on the Pacific Stock
Exchange, and call options are traded on the American Stock Exchange. The Shares
trade under the symbol "FLE." On May 29, 1996, the last full trading day prior
to announcement of the Offer, the closing price of the Shares on the NYSE
Composite Tape was $27.625 per Share. SEE SECTION 7. STOCKHOLDERS ARE URGED TO
OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE MAKING OF THE OFFER.
HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
TO ANY STOCKHOLDER AS TO WHETHER TO TENDER ALL, OR ANY, SHARES. EACH STOCKHOLDER
MUST MAKE SUCH STOCKHOLDER'S OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF
SO, HOW MANY SHARES TO TENDER AND AT WHAT PRICE. THE COMPANY HAS BEEN ADVISED
THAT CERTAIN DIRECTORS AND OFFICERS OF THE COMPANY INTEND TO TENDER SHARES
PURSUANT TO THE OFFER, WHICH SHARES IN THE AGGREGATE CONSTITUTE APPROXIMATELY
350,000 SHARES, OR APPROXIMATELY .77% OF THE SHARES OUTSTANDING AS OF MAY 30,
1996. SEE SECTION 11.
1. NUMBER OF SHARES; PRORATION; ODD LOTS
NUMBER OF SHARES. Upon the terms and subject to the conditions described
herein and in the Letter of Transmittal, the Company will purchase up to
11,400,000 Shares that are validly tendered on or prior to the Expiration Date
(as defined below) (and not properly withdrawn in accordance with SECTION 3) at
a price (determined in the manner set forth below) not greater than $31.00 nor
less than $27.00 per Share. The later of 12:00 midnight, New York City time, on
Thursday, June 27, 1996, or the latest time and date to which the Offer is
extended pursuant to SECTION 6, is referred to herein as the "Expiration Date."
If the Offer is oversubscribed as described below, only Shares tendered at or
below the Purchase Price on or prior to the Expiration Date will be eligible for
proration. The proration period also expires on the Expiration Date.
The Company will determine the Purchase Price taking into consideration the
number of Shares so tendered and the prices specified by tendering stockholders.
The Company will select the lowest Purchase Price that will enable it to
purchase 11,400,000 Shares (or such lesser number of Shares as is validly
tendered and not withdrawn at prices not greater than $31.00 nor less than
$27.00 per Share) pursuant to the Offer. Subject to SECTION 6, the Company
reserves the right, in its sole discretion, to purchase more than 11,400,000
Shares pursuant to the Offer, but does not currently plan to do so. The Offer is
not conditioned on any minimum number of Shares being tendered. THE OFFER IS,
HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 5.
In accordance with Instruction 5 of the Letter of Transmittal, each
stockholder who wishes to tender Shares must specify the price (not greater than
$31.00 nor less than $27.00 per Share, and in multiples of $.50 ) at which such
stockholder is willing to have the Company purchase such Shares. As promptly as
practicable following the Expiration Date, the Company will determine the
Purchase Price (not greater than $31.00 nor less than $27.00 per Share) that it
will pay for Shares validly
2
<PAGE>
tendered and not withdrawn pursuant to the Offer, taking into account the number
of Shares so tendered and the prices specified by tendering stockholders. All
Shares purchased pursuant to the Offer will be purchased at the Purchase Price.
All Shares not purchased pursuant to the Offer, including Shares tendered at
prices greater than the Purchase Price and Shares not purchased because of
proration or because they were conditionally tendered and not accepted for
purchase, will be returned to the tendering stockholders at the Company's
expense as promptly as practicable following the Expiration Date.
PRORATION. Upon the terms and subject to the conditions of the Offer, if
11,400,000 or fewer Shares have been validly tendered at or below the Purchase
Price and not withdrawn on or prior to the Expiration Date, the Company will
purchase all such Shares. Upon the terms and subject to the conditions of the
Offer, if more than 11,400,000 Shares have been validly tendered at or below the
Purchase Price and not withdrawn on or prior to the Expiration Date, the Company
will purchase Shares in the following order of priority:
(a) first, all Shares validly tendered at or below the Purchase Price
and not withdrawn on or prior to the Expiration Date by or on behalf of any
stockholder who owned beneficially, as of the close of business on May 30,
1996, and continues to own beneficially as of the Expiration Date, an
aggregate of fewer than 100 Shares and who validly tenders all of such
Shares (partial and conditional tenders will not qualify for this
preference) and completes the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, the Notice of Guaranteed Delivery; and
(b) then, after purchase of all of the foregoing Shares, subject to the
conditional tender provisions described in SECTION 2, all other Shares
validly tendered at or below the Purchase Price and not withdrawn on or
prior to the Expiration Date on a pro rata basis, if necessary (with
appropriate adjustments to avoid purchases of fractional Shares).
If proration of tendered Shares is required, (i) because of the difficulty
in determining the number of Shares validly tendered (including Shares tendered
by the guaranteed delivery procedure described in SECTION 2), (ii) as a result
of the "odd lot" procedure described below, and (iii) as a result of the
conditional tender procedure described in SECTION 2, the Company does not expect
that it would be able to announce the final proration factor or to commence
payment for any Shares purchased pursuant to the Offer until approximately seven
NYSE trading days after the Expiration Date. Preliminary results of proration
will be announced by press release as promptly as practicable after the
Expiration Date. Holders of Shares may obtain such preliminary information from
the Dealer Manager or the Information Agent and may also be able to obtain such
information from their brokers.
The Company expressly reserves the right, in its sole discretion, at any
time or from time to time, to extend the period of time during which the Offer
is open by giving oral or written notice of such extension to the Depositary and
making public announcement thereof. See SECTION 6. There can be no assurance,
however, that the Company will exercise its right to extend the Offer.
For purposes of the Offer, a "business day" means any day other than a
Saturday, Sunday or federal holiday and consists of the time period from 12:01
a.m. through 12:00 midnight, New York City time.
Copies of this Offer to Purchase and the related Letter of Transmittal are
being mailed to record holders of Shares and will be furnished to brokers, banks
and similar persons whose names, or the names of whose nominees, appear on the
Company's stockholder list or, if applicable, who are listed as participants in
a clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
ODD LOTS. All Shares validly tendered at or below the Purchase Price and
not withdrawn on or prior to the Expiration Date by or on behalf of any
stockholder who owned beneficially, as of the close of business on May 30, 1996,
and continues to own beneficially as of the Expiration Date, an aggregate of
fewer than 100 Shares, will be accepted for purchase before proration, if any,
of other tendered Shares. Partial and conditional tenders will not qualify for
this preference, and it is not available to
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beneficial holders of 100 or more Shares, even if such holders have separate
stock certificates for fewer than 100 Shares. By accepting the Offer, a
stockholder owning beneficially fewer than 100 Shares will avoid the payment of
brokerage commissions and the applicable odd lot discount payable in a sale of
such Shares in a transaction effected on a securities exchange.
As of May 28, 1996, there were approximately 1,768 holders of record of
Shares. Approximately 29% of these holders of record held individually fewer
than 100 Shares and held in the aggregate approximately 16,153 Shares. Because
of the large number of Shares held in the names of brokers and nominees, the
Company is unable to estimate the number of beneficial owners of fewer than 100
Shares or the aggregate number of Shares they own. Any stockholder wishing to
tender all of such stockholder's Shares pursuant to this Section should complete
the box captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on
the Notice of Guaranteed Delivery.
The Company also reserves the right, but will not be obligated, to purchase
all Shares validly tendered by any stockholder who tendered all Shares
beneficially owned at or below the Purchase Price and who, as a result of
proration, would then beneficially own an aggregate of fewer than 100 Shares. If
the Company exercises this right, it will increase the number of Shares that it
is offering to purchase in the Offer by the number of Shares purchased through
the exercise of such right.
2. PROCEDURE FOR TENDERING SHARES; CONDITIONAL TENDER OF SHARES
VALID TENDER OF SHARES. To validly tender Shares pursuant to the Offer,
either:
(a) a properly completed and duly executed Letter of Transmittal or
facsimile thereof, together with any required signature guarantees, or
Agent's Message (as defined below) in connection with a book-entry transfer,
and any other documents required by the Letter of Transmittal, must be
received by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase and either (i) certificates for the Shares
to be tendered must be received by the Depositary at one of such addresses
or (ii) such Shares must be delivered pursuant to the procedures for
book-entry transfer described below (and a confirmation of such delivery
received by the Depositary), in each case on or prior to the Expiration
Date, or
(b) the tendering holder of Shares must comply with the guaranteed
delivery procedure described below including, without limitation, completion
and execution of one or more Letters of Transmittal.
IN ACCORDANCE WITH INSTRUCTION 5 OF THE LETTER OF TRANSMITTAL, IN ORDER TO
TENDER SHARES PURSUANT TO THE OFFER, A STOCKHOLDER MUST INDICATE IN THE SECTION
CAPTIONED "PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED" ON
THE LETTER OF TRANSMITTAL, THE PRICE (IN MULTIPLES OF $.50) AT WHICH SUCH SHARES
ARE BEING TENDERED, EXCEPT THAT ANY STOCKHOLDER WHO OWNED BENEFICIALLY, AS OF
THE CLOSE OF BUSINESS ON MAY 30, 1996, AND CONTINUES TO OWN BENEFICIALLY AS OF
THE EXPIRATION DATE, AN AGGREGATE OF FEWER THAN 100 SHARES MAY CHECK THE BOX IN
THE SECTION OF THE LETTER OF TRANSMITTAL ENTITLED "ODD LOTS" INDICATING THAT THE
STOCKHOLDER IS TENDERING ALL OF SUCH STOCKHOLDER'S SHARES AT THE PURCHASE PRICE
DETERMINED BY THE COMPANY IN ACCORDANCE WITH THE TERMS OF THE OFFER.
STOCKHOLDERS WISHING TO TENDER SHARES AT MORE THAN ONE PRICE MUST COMPLETE
SEPARATE LETTERS OF TRANSMITTAL FOR EACH PRICE AT WHICH SUCH SHARES ARE BEING
TENDERED. THE SAME SHARES CANNOT BE TENDERED AT MORE THAN ONE PRICE. FOR A
TENDER OF SHARES TO BE VALID, A PRICE BOX, BUT ONLY ONE PRICE BOX, ON EACH
LETTER OF TRANSMITTAL MUST BE CHECKED.
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CERTIFICATES FOR SHARES, TOGETHER WITH A PROPERLY COMPLETED LETTER OF
TRANSMITTAL AND ANY OTHER DOCUMENTS REQUIRED BY THE LETTER OF TRANSMITTAL, MUST
BE DELIVERED TO THE DEPOSITARY AND NOT TO THE COMPANY. ANY SUCH DOCUMENTS
DELIVERED TO THE COMPANY WILL NOT BE FORWARDED TO THE DEPOSITARY AND THEREFORE
WILL NOT BE DEEMED TO BE PROPERLY TENDERED.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.
It is a violation of Rule 14e-4 promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), for a person to tender Shares for
his or her own account unless the person so tendering (i) has a net long
position equal to or greater than the amount of (x) Shares tendered or (y) other
securities immediately convertible into, exercisable, or exchangeable for the
amount of Shares tendered and will acquire such Shares for tender by conversion,
exercise or exchange of such other securities and (ii) will cause such Shares to
be delivered in accordance with the terms of the Offer. Rule 14e-4 provides a
similar restriction applicable to the tender or guarantee of a tender on behalf
of another person. The tender of Shares pursuant to any one of the procedures
described herein will constitute the tendering stockholder's representation and
warranty that (i) such stockholder has a net long position in the Shares being
tendered within the meaning of Rule 14e-4 promulgated under the Exchange Act,
and (ii) the tender of such Shares complies with Rule 14e-4. The Company's
acceptance for payment of Shares tendered pursuant to the Offer will constitute
a binding agreement between the tendering stockholder and the Company upon the
terms and subject to the conditions of the Offer.
BOOK-ENTRY DELIVERY. The Depositary will establish an account with respect
to the Shares at The Depository Trust Company ("DTC") and Philadelphia
Depository Trust Company ("PDTC") (hereinafter collectively referred to as the
"Book-Entry Transfer Facilities") for purposes of the Offer within two business
days after the date of this Offer to Purchase, and any financial institution
that is a participant in the system of any Book-Entry Transfer Facility may make
delivery of Shares by causing such Book-Entry Transfer Facility to transfer such
Shares into the Depositary's account in accordance with the procedures of such
Book-Entry Transfer Facility. Although delivery of Shares may be effected
through book-entry transfer, a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof), together with any required
signature guarantees, or an Agent's Message (as defined below) in connection
with a book-entry transfer, and any other required documents, must, in any case,
be transmitted to and received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase on or prior to the Expiration
Date, or the tendering holder of Shares must comply with the guaranteed delivery
procedure described below. Delivery of the required documents to one of the
Book-Entry Transfer Facilities in accordance with its procedures does not
constitute delivery to the Depositary and will not constitute a valid tender.
The term "Agent's Message" means a message transmitted by a Book-Entry Transfer
Facility to, and received by, the Depositary and forming a part of a Book-Entry
Confirmation, which states that such Book-Entry Transfer Facility has received
an express acknowledgment from the participant in such Book-Entry Transfer
Facility tendering the Shares that such participant has received and agrees to
be bound by the terms of the Letter of Transmittal and that the Company may
enforce such agreement against such participant.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and cannot deliver certificates for such Shares and all other required
documents to the Depositary on or prior to the Expiration Date or the procedure
for book-entry transfer cannot be complied with in a timely manner, such Shares
may nevertheless be tendered if all of the following conditions are met:
(a) such tender is made by or through an Eligible Institution (as
defined below);
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(b) a properly completed and duly executed Notice of Guaranteed Delivery
substantially in the form provided by the Company (with any required
signature guarantees) is received by the Depositary, as provided below, on
or prior to the Expiration Date; and
(c) the certificates for such tendered Shares (or a confirmation of a
book-entry transfer of such Shares into the Depositary's account at one of
the Book-Entry Transfer Facilities as described above), together with a
properly completed and duly executed Letter of Transmittal (or a manually
signed facsimile thereof), unless an Agent's Message in connection with a
book-entry transfer is used, and any other documents required by the Letter
of Transmittal, are received by the Depositary no later than 5:00 p.m., New
York City time, on the third NYSE trading day after the date of execution of
the Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, transmitted by
facsimile transmission or mailed to the Depositary and must include a guarantee
by an Eligible Institution in the form set forth in such Notice.
SIGNATURE GUARANTEES. Except as set forth below, all signatures on a Letter
of Transmittal must be guaranteed by a firm that is a member of a registered
national securities exchange or the National Association of Securities Dealers,
Inc., or by a commercial bank or trust company having an office or correspondent
in the United States that is a participant in an approved Signature Guarantee
Medallion Program (each of the foregoing being referred to as an "Eligible
Institution"). Signatures on a Letter of Transmittal need not be guaranteed if
(a) the Letter of Transmittal is signed by the registered holder of the Shares
(which term, for the purposes of this Section, includes any participant in any
Book-Entry Transfer Facility whose name appears on a security position listing
as the holder of the Shares) tendered therewith and such holder has not
completed the box entitled "Special Payment Instructions" or the box entitled
"Special Delivery Instructions" on the Letter of Transmittal, or (b) such Shares
are tendered for the account of an Eligible Institution. See Instructions 1 and
6 of the Letter of Transmittal.
DETERMINATION OF VALIDITY; REJECTION OF SHARES; WAIVER OF DEFECTS; NO
OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the Purchase Price,
the form of documents, the number of Shares to be accepted and the validity,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by the Company, in its sole discretion, which
determination shall be final and binding on all parties. The Company reserves
the absolute right to reject any or all tenders of Shares that it determines are
not in proper form or the acceptance for payment of or payment for Shares that
may, in the opinion of the Company's counsel, be unlawful. The Company also
reserves the absolute right to waive any defect or irregularity in any tender of
any particular Shares, and the Company's interpretation of the terms of the
Offer (including the Instructions in the Letter of Transmittal) will be final
and binding on all parties. None of the Company, the Dealer Manager, the
Depositary, the Information Agent or any other person is or will be under any
duty to give notice of any defect or irregularity in tenders, nor shall any of
them incur any liability for failure to give any such notice.
FEDERAL BACKUP WITHHOLDING. TO PREVENT UNITED STATES FEDERAL INCOME TAX
BACKUP WITHHOLDING EQUAL TO 31% OF THE GROSS PAYMENTS MADE PURSUANT TO THE
OFFER, EACH TENDERING STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH SUCH
STOCKHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER AND CERTAIN OTHER
INFORMATION BY PROPERLY COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED IN THE
LETTER OF TRANSMITTAL. FOREIGN STOCKHOLDERS (AS DEFINED IN SECTION 13) MUST
SUBMIT A PROPERLY COMPLETED FORM W-8 (WHICH MAY BE OBTAINED FROM THE DEPOSITARY)
IN ORDER TO PREVENT BACKUP WITHHOLDING. IN GENERAL, BACKUP WITHHOLDING DOES NOT
APPLY TO CORPORATIONS OR TO FOREIGN STOCKHOLDERS SUBJECT TO 30% (OR LOWER TREATY
RATE) WITHHOLDING ON GROSS PAYMENTS RECEIVED PURSUANT TO THE OFFER (AS DISCUSSED
IN SECTION 13). FOR A DISCUSSION OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES TO
TENDERING
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STOCKHOLDERS, SEE SECTION 13. EACH STOCKHOLDER IS URGED TO CONSULT WITH SUCH
STOCKHOLDER'S OWN TAX ADVISOR REGARDING SUCH STOCKHOLDER'S QUALIFICATION FOR
EXEMPTION FROM BACKUP WITHHOLDING AND THE PROCEDURE FOR OBTAINING ANY APPLICABLE
EXEMPTION.
CONDITIONAL TENDER OF SHARES. Under certain circumstances and subject to
the exceptions set forth in SECTION 1, the Company may prorate the number of
Shares purchased pursuant to the Offer. As discussed in SECTION 13, the number
of Shares to be purchased from a particular stockholder might affect the tax
treatment of such purchase to such stockholder and such stockholder's decision
whether to tender. EACH STOCKHOLDER IS URGED TO CONSULT WITH SUCH STOCKHOLDER'S
OWN TAX ADVISOR. A stockholder may tender Shares subject to the condition that a
specified minimum number of such holder's Shares tendered pursuant to a Letter
of Transmittal or, if applicable, a Notice of Guaranteed Delivery must be
purchased if any such Shares so tendered are purchased, and any stockholder
desiring to make such a conditional tender must so indicate in the box captioned
"Conditional Tender" in such Letter of Transmittal or Notice of Guaranteed
Delivery.
Any tendering stockholders wishing to make a conditional tender must
calculate and appropriately indicate such minimum number of Shares. If the
effect of accepting tenders on a pro rata basis would be to reduce the number of
Shares to be purchased from any stockholder (tendered pursuant to a Letter of
Transmittal or Notice of Guaranteed Delivery) below the minimum number so
specified, such tender will automatically be regarded as withdrawn (except as
provided in the next paragraph) and all Shares tendered by such stockholder
pursuant to such Letter of Transmittal or Notice of Guaranteed Delivery will be
returned as promptly as practicable thereafter.
If conditional tenders, which would otherwise be so regarded as withdrawn,
would cause the total number of Shares to be purchased to fall below 11,400,000,
then, to the extent feasible, the Company will select enough of such conditional
tenders that would otherwise have been so withdrawn to permit the Company to
purchase 11,400,000 Shares (or such greater number of Shares as the Company may
elect to purchase). In selecting among such conditional tenders, the Company
will select by lot and will limit its purchase in each case to the minimum
number of Shares designated by the stockholder in the applicable Letter of
Transmittal or Notice of Guaranteed Delivery as a condition to his or her
tender.
3. WITHDRAWAL RIGHTS
Tenders of Shares made pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date. Thereafter, such tenders are irrevocable, except
that they may be withdrawn after 12:00 midnight, New York City time, July 26,
1996 (or such later date if the Offer is extended for an additional period of
time) unless theretofore accepted for payment by the Company as provided in this
Offer to Purchase. If the Company extends the period of time during which the
Offer is open, is delayed in accepting for payment or paying for Shares, or is
unable to accept for payment or pay for Shares pursuant to the Offer for any
reason, then, without prejudice to the Company's rights under the Offer, the
Depositary may, on behalf of the Company, retain all Shares tendered, and such
Shares may not be withdrawn except as otherwise provided in this SECTION 3,
subject to Rule 13e-4(f)(5) under the Exchange Act, which provides that the
issuer making the tender offer shall either pay the consideration offered or
return the tendered securities promptly after the termination or withdrawal of
the tender offer.
WITHDRAWAL OF SHARES HELD IN PHYSICAL FORM. Tenders of Shares made pursuant
to the Offer may not be withdrawn after the Expiration Date, except that they
may be withdrawn after 12:00 midnight, New York City time, July 26, 1996 (or
such later date if the Offer is extended for an additional period of time)
unless accepted for payment by the Company as provided in this Offer to
Purchase. For a withdrawal to be effective, a stockholder of Shares held in
physical form must provide a written, telegraphic or facsimile transmission
notice of withdrawal to the Depositary at one of its addresses set forth on the
back cover of this Offer to Purchase before the Expiration Date, which notice
must contain: (A) the name of the person who tendered the Shares; (B) a
description of the Shares to be withdrawn; (C) the certificate numbers shown on
the particular certificates evidencing
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such Shares; (D) the signature of such stockholder executed in the same manner
as the original signature on the Letter of Transmittal (including any signature
guarantee (if such original signature was guaranteed)); and (E) if such Shares
are held by a new beneficial owner, evidence satisfactory to the Company that
the person withdrawing the tender has succeeded to the beneficial ownership of
the Shares. A purported notice of withdrawal that lacks any of the required
information will not be an effective withdrawal of a tender previously made.
WITHDRAWAL OF SHARES HELD WITH THE BOOK-ENTRY TRANSFER FACILITY. Tenders of
Shares made pursuant to the Offer may not be withdrawn after the Expiration
Date, except that they may be withdrawn after 12:00 midnight, New York City
time, July 26, 1996 (or such later date if the Offer is extended for an
additional period of time) unless accepted for payment by the Company as
provided in this Offer to Purchase. For a withdrawal to be effective, a
stockholder of Shares held with any of the Book-Entry Transfer Facilities must
(i) call such stockholder's broker and instruct such broker to withdraw such
tender of Shares by debiting the Depositary's account at such Book-Entry
Transfer Facility of all Shares to be withdrawn; and (ii) instruct such broker
to provide a written, telegraphic or facsimile transmission notice of withdrawal
to the Depositary on or before the Expiration Date. Such notice of withdrawal
shall contain (A) the name of the person who tendered the Shares; (B) a
description of the Shares to be withdrawn; and (C) if such Shares are held by a
new beneficial owner, evidence satisfactory to the Company that the person
withdrawing the tender has succeeded to the beneficial ownership of the Shares.
A purported notice of withdrawal that lacks any of the required information will
not be an effective withdrawal of a tender previously made.
Any permitted withdrawals of tenders of Shares may not be rescinded, and any
Shares so withdrawn will thereafter be deemed not validly tendered for purposes
of the Offer; provided, however, that withdrawn Shares may be re-tendered by
following the procedures for tendering prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by the Company, in its sole discretion,
which determination shall be final and binding on all parties. None of the
Company, the Dealer Manager, the Depositary, the Information Agent or any other
person is or will be under any duty to give notification of any defect or
irregularity in any notice of withdrawal or incur any liability for failure to
give any such notification.
4. ACCEPTANCE OF SHARES FOR PAYMENT AND PAYMENT OF PURCHASE PRICE
Upon the terms and subject to the conditions of the Offer and as promptly as
practicable after the Expiration Date, the Company will determine the Purchase
Price, taking into consideration the number of Shares tendered and the prices
specified by tendering stockholders, announce the Purchase Price, and (subject
to the proration and conditional tender provisions of the Offer) accept for
payment and pay the Purchase Price for Shares validly tendered at or below the
Purchase Price and not withdrawn on or prior to the Expiration Date. Thereafter,
payment for all Shares validly tendered on or prior to the Expiration Date and
accepted for payment pursuant to the Offer will be made by the Depositary by
check as promptly as practicable.
For purposes of the Offer, the Company shall be deemed to have accepted for
payment (and thereby purchased), subject to proration and conditional tenders,
Shares that are validly tendered and not withdrawn as, if and when the Company
gives oral or written notice to the Depositary of its acceptance for payment of
such Shares. In the event of proration, the Company will determine the proration
factor and pay for those tendered Shares accepted for payment as soon as
practicable after the Expiration Date. However, the Company does not expect to
be able to announce the final results of any such proration until approximately
seven NYSE trading days after the Expiration Date. The Company will pay for
Shares that it has purchased pursuant to the Offer by depositing the aggregate
Purchase Price therefor with the Depositary. The Depositary will act as agent
for tendering stockholders for the purpose of receiving payment from the Company
and transmitting payment to tendering stockholders. Under no circumstances will
interest be paid on amounts to be paid to tendering stockholders, regardless of
any delay in making such payment.
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Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for such Shares (or a timely
confirmation by a Book-Entry Transfer Facility of book-entry transfer of such
Shares to the Depositary), (ii) a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof) with any required signature
guarantees, or an Agent's Message in connection with a book-entry transfer and
(iii) any other documents required by the Letter of Transmittal. Accordingly,
payment may be made to tendering stockholders at different times if delivery of
the Shares and other required documents occurs at different times.
Certificates for all Shares not purchased, including all Shares tendered at
prices greater than the Purchase Price, Shares not purchased because of
proration and Shares that were conditionally tendered and not accepted, will be
returned (or, in the case of Shares tendered by book-entry transfer, such Shares
will be credited to an account maintained with one of the Book-Entry Transfer
Facilities by the participant therein who so delivered such Shares) as promptly
as practicable following the Expiration Date without expense to the tendering
stockholder.
Payment for Shares may be delayed in the event of difficulty in determining
the number of Shares properly tendered or if proration is required. See SECTION
1. In addition, if certain events occur, the Company may not be obligated to
purchase Shares pursuant to the Offer. See SECTION 5.
The Company will pay or cause to be paid any 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 is to be made to, or a
portion of the Shares delivered (whether in certificated form or by book-entry)
but not tendered or not purchased are to be registered in the name of, any
person other than the registered holder, or if tendered Shares are registered in
the name of any person other than the person signing the Letter of Transmittal
(unless such person is signing in a representative or fiduciary capacity), the
amount of any stock transfer taxes (whether imposed on the registered holder,
such other person or otherwise) payable on account of the transfer to such
person will be deducted from the Purchase Price unless satisfactory evidence of
the payment of such taxes, or exemption therefrom, is submitted. See Instruction
7 to the Letter of Transmittal.
ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY AND
SIGN THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL (OR, IN THE
CASE OF A FOREIGN INDIVIDUAL, A FORM W-8) MAY BE SUBJECT TO REQUIRED FEDERAL
INCOME TAX WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAID TO SUCH STOCKHOLDER OR
OTHER PAYEE PURSUANT TO THE OFFER. SEE SECTION 2.
5. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, the Company will not be
required to accept for payment or pay for any Shares tendered, and may terminate
or amend the Offer and may postpone (subject to the requirements of the Exchange
Act for prompt payment for or return of Shares tendered) the acceptance for
payment of Shares tendered, if at any time after May 30, 1996 (the
"Determination Date") and at or before acceptance for payment of any Shares any
of the following shall have occurred:
(a) there shall have been threatened, instituted or pending any action
or proceeding by any government or governmental, regulatory or
administrative agency or authority or tribunal or any other person, domestic
or foreign, before any court, authority, agency or tribunal that (i)
challenges the acquisition of Shares pursuant to the Offer or otherwise in
any manner relates to or affects the Offer or (ii) in the sole judgment of
the Company, could materially and adversely affect the business, condition
(financial or other), income, operations or prospects of the Company and its
subsidiaries, taken as a whole, or otherwise materially impair in any way
the contemplated future conduct of the business of the Company or any of its
subsidiaries or materially impair the Offer's contemplated benefits to the
Company;
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(b) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered,
amended, enforced or deemed to be applicable to the Offer or the Company or
any of its subsidiaries, by any legislative body, court, authority, agency
or tribunal which, in the Company's sole judgment, would or might directly
or indirectly (i) make the acceptance for payment of, or payment for, some
or all of the Shares illegal or otherwise restrict or prohibit consummation
of the Offer, (ii) delay or restrict the ability of the Company, or render
the Company unable, to accept for payment or pay for some or all of the
Shares, (iii) materially impair the contemplated benefits of the Offer to
the Company or (iv) materially and adversely affect the business, condition
(financial or other), income, operations or prospects of the Company and its
subsidiaries, taken as a whole, or otherwise materially impair in any way
the contemplated future conduct of the business of the Company or any of its
subsidiaries;
(c) it shall have been publicly disclosed or the Company shall have
learned that (i) any person or "group" (within the meaning of Section
13(d)(3) of the Exchange Act) has acquired or proposes to acquire beneficial
ownership of more than 5% of the outstanding Shares whether through the
acquisition of stock, the formation of a group, the grant of any option or
right, or otherwise (other than as disclosed in a Schedule 13D or 13G on
file with the Securities and Exchange Commission (the "Commission") on the
Determination Date) or (ii) any such person or group that on or prior to the
Determination Date had filed such a Schedule with the Commission thereafter
shall have acquired or shall propose to acquire whether through the
acquisition of stock, the formation of a group, the grant of any option or
right, or otherwise, beneficial ownership of additional Shares representing
2% or more of the outstanding Shares;
(d) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on any national securities exchange
or in the over-the-counter market, (ii) any decline in the market price of
the Shares by an amount in excess of 10% measured from the close of business
on the Determination Date, (iii) any change in the general political,
market, economic or financial conditions in the United States or abroad
that, in the Company's sole judgment, could have a material adverse effect
on the business, condition (financial or other), income, operations,
prospects, ability to obtain financing generally of the Company or any of
its subsidiaries, or the trading in the Shares, (iv) the declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States or any limitation on, or any event which, in the Company's
sole judgment, might affect, the extension of credit by lending institutions
in the United States, (v) the commencement of a war, armed hostilities or
other international or national calamity directly or indirectly involving
the United States or (vi) in the case of any of the foregoing existing at
the time of the commencement of the Offer, in the Company's sole judgment, a
material acceleration or worsening thereof;
(e) a tender or exchange offer with respect to some or all of the Shares
(other than the Offer), or a merger, acquisition or other business
combination proposal for the Company, shall have been proposed, announced or
made by another person or group (within the meaning of Section 13(d)(3) of
the Exchange Act);
(f) there shall have occurred any event or events that has resulted, or
in the sole judgment of the Company may result, directly or indirectly, in
an actual or threatened change in the business, condition (financial or
other), income, operations, stock ownership or prospects of the Company or
any of its subsidiaries; or
(g) there shall have occurred any decline in the Dow Jones Industrial
Average or the Standard & Poor's Composite 500 Stock Index by an amount in
excess of 5% measured from the close of business on the Determination Date;
and, in the sole judgment of the Company, such event or events make it
undesirable or inadvisable to proceed with the Offer or with such acceptance for
payment.
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The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances (including any action or
inaction by the Company) giving rise to any such condition, and any such
condition may be waived by the Company, in whole or in part, at any time and
from time to time in its sole discretion. The failure by the Company at any time
to exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be asserted
at any time and from time to time. Any determination by the Company concerning
the events described above will be final and binding on all parties.
The Exchange Act requires that all conditions to the Offer must be satisfied
or waived before the Expiration Date. In certain cases, waiver of a condition to
the Offer would require an extension of the Offer. See SECTION 6.
6. EXTENSION OF THE OFFER; TERMINATION; AMENDMENTS
The Company expressly reserves the right, in its sole discretion and at any
time or from time to time, to extend the period of time during which the Offer
is open by giving oral or written notice of such extension to the Depositary and
making a public announcement thereof. There can be no assurance, however, that
the Company will exercise its right to extend the Offer. During any such
extension, all Shares previously tendered will remain subject to the Offer,
except to the extent that such Shares may be withdrawn as set forth in SECTION
3. The Company also expressly reserves the right, in its sole discretion, (i) to
terminate the Offer and not accept for payment any Shares not theretofore
accepted for payment or, subject to Rule 13e-4(f)(5) under the Exchange Act,
which requires the Company either to pay the consideration offered or to return
the Shares tendered promptly after the termination or withdrawal of the Offer,
to postpone payment for Shares upon the occurrence of any of the conditions
specified in SECTION 5 hereof by giving oral or written notice of such
termination or postponement to the Depositary and making a public announcement
thereof and (ii) at any time, or from time to time, to amend the Offer in any
respect. Amendments to the Offer may be effected by public announcement. Without
limiting the manner in which the Company may choose to make public announcement
of any extension, termination or amendment, the Company shall have no obligation
(except as otherwise required by applicable law) to publish, advertise or
otherwise communicate any such public announcement, other than by making a
release to the Dow Jones News Service, except in the case of an announcement of
an extension of the Offer, in which case the Company shall have no obligation to
publish, advertise or otherwise communicate such announcement other than by
issuing a notice of such extension by press release or other public
announcement, which notice shall be issued no later than 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date. Material changes to information previously provided to holders of the
Shares in this Offer or in documents furnished subsequent thereto will be
disseminated to holders of Shares in compliance with Rule 13e-4(e)(2)
promulgated by the Commission under the Exchange Act.
If the Company materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer, the
Company will extend the Offer to the extent required by Rules 13e-4(d)(2) and
13e-4(e)(2) promulgated under the Exchange Act. These rules provide that the
minimum period during which an offer must remain open following material changes
in the terms of the offer or information concerning the offer (other than a
change in price, change in the dealer's soliciting fee or a change in percentage
of securities sought) will depend on the facts and circumstances, including the
relative materiality of such terms or information.
The Offer will continue or be extended for at least ten business days from
the time that the Company publishes, sends or gives to holders of Shares a
notice that the Company will (a) increase or decrease the price it will pay for
Shares or the amount of the Dealer Manager's soliciting fee or (b) increase
(except for an increase not exceeding 2% of the outstanding Shares) or decrease
the number of Shares it seeks to purchase.
11
<PAGE>
7. PRICE RANGE OF SHARES; DIVIDENDS
The Shares are listed and principally traded on the NYSE. The Shares are
also listed and traded on the Pacific Stock Exchange, and call options are
traded on the American Stock Exchange. The Shares trade under the symbol "FLE."
The following table sets forth the high and low sales prices per Share on the
NYSE Composite Tape and the cash dividends paid per Share for the Company's
fiscal quarters indicated.
<TABLE>
<CAPTION>
CASH
DIVIDENDS
PAID PER
FISCAL QUARTERS HIGH LOW SHARE
- ------------------------------------------------------------------------------ ------- ------- ---------
<S> <C> <C> <C> <C>
1994: 1st Quarter........................................................... $ 22.00 $ 16.50 $ .125
2nd Quarter........................................................... 24.625 19.25 .125
3rd Quarter........................................................... 25.875 20.625 .125
4th Quarter........................................................... 26.00 18.75 .125
1995: 1st Quarter........................................................... 23.875 19.125 .125
2nd Quarter........................................................... 27.25 21.50 .14
3rd Quarter........................................................... 23.125 17.75 .14
4th Quarter........................................................... 24.125 18.00 .14
1996: 1st Quarter........................................................... 22.75 18.125 .14
2nd Quarter........................................................... 21.375 19.125 .15
3rd Quarter........................................................... 27.625 20.50 .15
4th Quarter........................................................... 29.00 23.125 .15
1997: 1st Quarter (through May 29, 1996).................................... 28.875 24.125 .15
</TABLE>
On May 29, 1996, the last full trading day prior to announcement of the
Offer, the closing price of the Shares on the NYSE Composite Tape was $27.625
per Share. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE
SHARES.
The Company's policy is to consider dividend payments in the context of the
overall financial strength of the Company and earnings performance over an
extended period of time. The Company expects to continue this policy. In
accordance with past practice, the Company will consider its fiscal 1997
dividend payment schedule at its June 1996 Board of Directors meeting.
8. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER
PURPOSE OF THE OFFER. The Company believes that the purchase of the Shares
at this time represents an attractive investment opportunity that will benefit
the Company and its stockholders. The Company and its Board of Directors believe
that the Offer is in the best interests of the Company and its stockholders and
that it will enhance stockholder value both in the short term and long term.
Historically, other than commercial paper borrowings and long-term debt incurred
by FCC, the Company has funded its operations from operating cash flows and has
maintained reasonably high levels of cash and investments. Prior to the end of
the Company's fiscal year on April 28, 1996, the Company assumed approximately
$80.0 million of debt incurred by FCC to avoid a $2.5 million charge for early
payoff of the debt, with the Company receiving $80.0 million cash from FCC in
connection with the assumption. This resulted in aggregate cash and investments
at fiscal 1996 year end of approximately $288 million. In addition, on May 24,
1996, the Company completed the sale of FCC for cash proceeds of $156.6 million,
less approximately $4.6 million in expenses.
Given the significant cash flow from the Company's ongoing operations, the
lack of any significant debt and the relatively high level of cash due to the
sale of FCC, the Company's Board of Directors evaluated potential uses of these
financial resources consistent with maintaining or increasing the Company's
return on its stockholders' equity. Given the absence of any identified
acquisition candidates that were consistent with the Company's core business
operations and that were felt to enhance stockholder value and the belief that
the Shares are currently undervalued, the Board of Directors determined that the
repurchase of the Shares is the best investment available to the Company at this
time.
12
<PAGE>
The Offer will afford to stockholders who are considering the sale of all or
a portion of their Shares the opportunity to determine the price (not greater
than $31.00 nor less than $27.00 per Share) at which they are willing to sell
their Shares and, in the event the Company accepts such Shares, to dispose of
Shares without the usual transaction costs associated with a market sale. The
Offer will also allow qualifying stockholders owning beneficially fewer than 100
Shares to avoid the payment of brokerage commissions and the applicable odd lot
discount payable on a sale of Shares in a transaction effected on a securities
exchange. Correspondingly, the costs to the Company for servicing the accounts
of odd lot holders will be reduced. See SECTION 1.
CERTAIN EFFECTS OF THE OFFER.
CERTAIN POSSIBLE EFFECTS ON SHARE LIQUIDITY AND VALUE. The Company's
acquisition of Shares is structured as a tender offer so as to give all
stockholders an equal opportunity to sell their Shares to the Company. The
purchase of Shares pursuant to the Offer will reduce the number of Shares that
might otherwise trade publicly and may reduce the number of stockholders, either
of which may adversely affect the liquidity and value of Shares held by
remaining stockholders.
INCREASE IN PERCENTAGE INTEREST IN THE COMPANY FOR NON-TENDERING
STOCKHOLDERS. The Offer allows stockholders to sell a portion of their Shares
while retaining a continuing equity interest in the Company if they so desire.
Stockholders who decide not to participate or whose Shares are not purchased in
the Offer will realize a proportionate increase in their relative equity
interest in the Company and, thus, in the Company's future earnings and assets,
subject to the Company's right to issue additional Shares and other equity
securities in the future.
POSSIBLE FUTURE PURCHASES OF SHARES. If fewer than 11,400,000 Shares are
purchased pursuant to the Offer, the Company may repurchase the remainder of
such Shares on the open market, in privately negotiated transactions or
otherwise. Although the Company does not have any current plans to acquire
additional Shares, the Company may in the future purchase Shares on the open
market, in privately negotiated transactions, through tender offers or
otherwise, in such amounts, at such prices and at such times as the Company may
determine. The Company's Board of Directors previously has authorized the
repurchase of up to 1,700,000 Shares, which authorization remains unaffected by
the Offer. Rule 13e-4 under the Exchange Act generally prohibits the Company and
its affiliates from purchasing any Shares, other than pursuant to the Offer,
until at least ten business days after the Expiration Date. The Company will not
purchase any additional Shares until at least ten business days after the
Expiration Date. Any possible future purchases by the Company will depend on
many factors, including the market price of the Shares, the Company's business
and financial position, alternative investment opportunities available to the
Company, the results of the Offer and general economic and market conditions.
Any of these possible purchases may be on the same terms as, or on terms more of
less favorable than, those of the Offer.
POSSIBLE NEW ISSUANCES OF SHARES. The Company intends that all Shares it
purchases pursuant to the Offer will be retired and returned to their status as
authorized and unissued shares and will be available for issuance without
further stockholder action (except as required by applicable law or the rules of
the NYSE). Except for the issuance of Shares in connection with current employee
benefit plans, the Company has no present plans to issue the Shares purchased
pursuant to the Offer or any other authorized but unissued Shares.
COMPANY PLANS AND PROPOSALS. Except as disclosed in this Offer to Purchase,
the Company has no present plans or proposals which relate to or would result
in: (a) the acquisition by any person (other than by any subsidiary or
subsidiaries of the Company) of additional securities of the Company or the
disposition of securities of the Company (other than to any subsidiary or
subsidiaries of the Company); (b) an extraordinary corporate transaction, such
as a merger, reorganization or liquidation, involving the Company or any of its
subsidiaries which is material to the Company and its subsidiaries, taken as a
whole; (c) a sale or transfer of a material amount of assets of the Company and
its subsidiaries, taken as a whole; (d) any change in the present Board of
Directors or management of the Company; (e) any material change in the present
dividend rate or policy, or indebtedness or
13
<PAGE>
capitalization of the Company; (f) any other material change in the Company's
corporate structure or business; (g) any change in the Company's Certificate of
Incorporation or By-Laws or any actions which may impede the acquisition of
control of the Company by any person; (h) a class of equity security of the
Company being delisted from a national securities exchange; (i) a class of
equity security of the Company becoming eligible for termination of registration
pursuant to Section 12(g)(4) of the Exchange Act; or (j) the suspension of the
Company's obligation to file reports pursuant to Section 15(d) of the Exchange
Act. Under existing accounting rules, the Company will be unable to make an
acquisition using "pooling of interests" accounting for up to two years
following the purchase of the Shares.
EFFECTS ON MARKET FOR SHARES; REGISTRATION UNDER THE EXCHANGE ACT. The
Shares are registered under the Exchange Act, which requires, among other
things, that the Company furnish certain information to its stockholders and to
the Commission and comply with the Commission's proxy rules in connection with
meetings of the Company's stockholders. Registration of the Shares under the
Exchange Act may be terminated upon application by the Company to the Commission
if the Shares are held of record by fewer than 300 persons and are not listed on
a national securities exchange or an inter-dealer quotation system of a
registered national securities association. The Company's purchase of Shares
pursuant to the Offer will reduce the number of Shares that might otherwise
trade publicly and may reduce the number of stockholders. The Company does not
expect that the Offer will result in delisting of the Shares on either the NYSE
or Pacific Stock Exchange or termination of registration of the Shares under the
Exchange Act.
MARGINABILITY. The Shares are currently "margin securities" under the rules
of the Federal Reserve Board. This has the effect, among other things, of
allowing brokers to extend credit on the collateral of the Shares. The Company
believes that, following the purchase of Shares pursuant to the Offer, the
Shares will continue to be "margin securities" for purposes of the Federal
Reserve Board's margin regulations. Eligibility for treatment as margin
securities will, however, continue to depend on maintenance of minimum daily
trading volume.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE MAKING OF THE OFFER.
HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
TO ANY STOCKHOLDER AS TO WHETHER TO TENDER ALL, OR ANY, SHARES. EACH STOCKHOLDER
MUST MAKE SUCH STOCKHOLDER'S OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF
SO, HOW MANY SHARES TO TENDER AND AT WHAT PRICE. THE COMPANY HAS BEEN ADVISED
THAT CERTAIN DIRECTORS AND OFFICERS OF THE COMPANY INTEND TO TENDER SHARES
PURSUANT TO THE OFFER, WHICH SHARES IN THE AGGREGATE CONSTITUTE APPROXIMATELY
350,000 SHARES, OR APPROXIMATELY .77% OF THE SHARES OUTSTANDING AS OF MAY 30,
1996.
9. SOURCE AND AMOUNT OF FUNDS
Assuming that the Company purchases 11,400,000 Shares pursuant to the Offer
at a price of $31.00 per Share, the total amount required by the Company to
purchase such Shares will be $353.4 million, exclusive of fees and other
expenses. The Company estimates fees and other expenses for the Offer to be
approximately $1.1 million.
Funds for the purchase of the Shares will be obtained from existing cash and
investments, including the net proceeds from the sale of FCC, and the proceeds
of $80.0 million of borrowing assumed by the Company in connection with the FCC
sale. The Company otherwise does not contemplate or need to utilize additional
borrowing to complete the purchase of the Shares pursuant to the Offer.
The $80.0 million assumed by the Company in connection with the FCC sale is
an unsecured obligation of the Company under a Note Agreement dated as of April
22, 1996 (the "Note Agreement"), between the Company and The Prudential
Insurance Company of America. An aggregate of $25.0 million of 8.65% Senior
Fixed Rate Notes is due August 14, 1996. In addition to the fixed rate
14
<PAGE>
debt, the Company issued $30.0 million of Series A Senior Floating Rate Notes
due November 30, 2001, and $25.0 million of Series B Senior Floating Rate Notes
due June 1, 2005, at interest rates equal to three month LIBOR plus 57 basis
points and 55 basis points, respectively. Interest on the Notes (as defined in
the Note Agreement) is payable quarterly in arrears. The Notes may be prepaid,
in whole at any time or in part from time to time, by paying 100% of the
principal amount so prepaid plus interest thereon to the prepayment date and the
Yield-Maintenance Amount (as defined in the Note Agreement).
The Note Agreement provides for customary events of default, including,
without limitation: (i) certain defaults by the Company or any of its
subsidiaries on other indebtedness; and (ii) under certain circumstances, a
final judgment in an amount in excess of $20.0 million is rendered against the
Company or any material subsidiary. The Company also has agreed to certain
covenants while any Note is outstanding, including, without limitation, a
requirement that the Company's Consolidated Tangible Net Worth (as defined in
the Note Agreement) be not less than $325.0 million. Additional covenants limit
the ability of the Company and its subsidiaries to (i) create certain liens,
(ii) incur certain additional indebtedness, including indebtedness in excess of
20% of Consolidated Tangible Net Worth, (iii) enter into certain mergers or
consolidations, and (iv) enter into agreements limiting or restricting the
payment of dividends and certain other actions by the Company or its
subsidiaries.
The Company has no specific plans or arrangements to finance or repay the
indebtedness incurred under the Note Agreement other than according to the
expected schedule of required payments of principal under the Notes.
10. CERTAIN INFORMATION CONCERNING THE COMPANY
THE COMPANY. The Company is a Delaware corporation with its principal
executive offices located at 3125 Myers Street, Post Office Box 7638, Riverside,
California 92513-7638. The Company's telephone number is (909) 351-3500.
BUSINESS. The Company is the nation's largest producer of manufactured
housing and recreational vehicles (motor homes, travel trailers, folding
trailers and slide-in truck campers). The Company's principal manufacturing
activities are primarily conducted in 18 states within the U.S. and, to a much
lesser extent, in Canada. In addition, the Company operates three supply
companies which produce components for the primary manufacturing operations,
while also generating outside sales. Prior to its sale on May 24, 1996, FCC
provided wholesale and retail financing for the Company's recreational vehicles.
The FCC operations are included in the Company's financial statements as a
discontinued operation.
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION FOR THE COMPANY. The
following table sets forth, for the periods and dates indicated, summary
historical consolidated financial information for the Company. The summary
historical consolidated financial information for fiscal years 1994 and 1995 has
been derived from the audited consolidated financial statements of the Company
contained or incorporated by reference in the Company's Annual Reports on Form
10-K for the years ended April 24, 1994 and April 30, 1995. The summary
historical consolidated financial information for fiscal year 1996, which treats
the FCC operation as a discontinued operation, has been derived from unaudited
consolidated financial statements for the year ended April 28, 1996. The
Company's audited financial statements for the fiscal year ended April 28, 1996
will be filed with the Company's Annual Report on Form 10-K for fiscal 1996. The
summary historical consolidated financial information should be read in
conjunction with, and is qualified in its entirety by reference to, such audited
and unaudited financial statements and the related notes thereto. See ADDITIONAL
INFORMATION below.
15
<PAGE>
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FISCAL YEARS ENDED APRIL (1)(2)
------------------------------------
1995 1994
1996 ---------- ----------
-----------
(UNAUDITED)
<S> <C> <C> <C>
OPERATING DATA
Sales................................................................. $ 2,809,276 $2,807,862 $2,332,184
Cost of products sold................................................. 2,276,594 2,287,880 1,905,659
----------- ---------- ----------
Gross profit........................................................ 532,682 519,982 426,525
Operating expenses.................................................... 401,150 397,753 334,676
----------- ---------- ----------
Operating income...................................................... 131,532 122,229 91,849
Other income (expense):
Loss on disposition of European investment.......................... (28,000) -- --
Investment income................................................... 14,032 9,966 9,890
Interest expense.................................................... (1,429) (4,048) (2,549)
Other............................................................... (5,142) (700) 326
----------- ---------- ----------
(20,539) 5,218 7,667
Income from continuing operations before provision for income taxes,
minority interest and cumulative effect of accounting change......... 110,993 127,447 99,516
Provision for income taxes............................................ (41,543) (52,254) (40,717)
Minority interest in net loss of subsidiary........................... 451 805 1,254
----------- ---------- ----------
Income from continuing operations before cumulative effect of
accounting change.................................................... 69,901 75,998 60,053
Income from discontinued operations................................... 9,708 8,635 7,375
----------- ---------- ----------
Income before cumulative effect of accounting change.................. 79,609 84,633 67,428
Cumulative effect of change in accounting for income taxes............ -- -- 1,500
----------- ---------- ----------
Net income............................................................ $ 79,609 $ 84,633 $ 65,928
----------- ---------- ----------
----------- ---------- ----------
Net income per Common and equivalent share:
Continuing operations............................................... $ 1.50 $ 1.63 $ 1.30
Discontinued operations............................................. .21 .19 .16
Cumulative effect of accounting change.............................. -- -- (.03)
----------- ---------- ----------
Total........................................................... $ 1.71 $ 1.82 $ 1.43
----------- ---------- ----------
----------- ---------- ----------
Dividends declared per share of Common Stock outstanding.............. $ .60 $ .56 $ .50
----------- ---------- ----------
----------- ---------- ----------
Common and equivalent shares outstanding.............................. 46,469 46,531 46,207
----------- ---------- ----------
----------- ---------- ----------
</TABLE>
- ------------------------
(1) The Company's fiscal year is a 52 week year (53 weeks in fiscal 1995), which
ends on the last Sunday in April. The year ending dates for the past three
fiscal years were April 28, 1996, April 30, 1995 and April 24, 1994.
(2) Operating results of FCC, which was sold on May 24, 1996, have been
reclassified as income from "Discontinued Operations" for all years
presented.
16
<PAGE>
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (CONTINUED)
<TABLE>
<CAPTION>
FISCAL YEARS ENDED APRIL(1)(2)
------------------------------
1995 1994
1996 ------- -------
-----------
(UNAUDITED)
<S> <C> <C> <C>
BALANCE SHEET DATA
Cash.................................................................. $ 15,792 $ 9,410 $ 6,888
Investments........................................................... 272,138 93,456 91,205
Receivables........................................................... 173,380 152,210 158,054
Inventories........................................................... 137,899 215,293 183,654
Net assets of discontinued operations................................. 97,444 87,109 78,474
Property, plant and equipment......................................... 266,587 262,640 220,154
Deferred tax benefits................................................. 72,222 66,237 59,084
Cash value of Company-owned life insurance............................ 30,953 3,700 --
Other assets.......................................................... 42,517 49,692 47,706
Total assets.......................................................... 1,108,932 939,747 845,219
Accounts payable...................................................... 104,850 96,428 80,568
Employee compensation and benefits.................................... 109,552 101,570 96,326
Federal and state taxes on income..................................... (16,850) (12,905) (6,089)
Insurance reserves.................................................... 47,408 44,343 45,342
Long-term debt........................................................ 80,000 -- --
Other liabilities..................................................... 134,835 102,795 83,484
Total liabilities..................................................... 459,795 332,231 299,631
Stockholders' equity.................................................. 649,137 607,516 545,839
Book value per share.................................................. 14.22 13.20 11.87
</TABLE>
- ------------------------
(1) The Company's fiscal year is a 52 week year (53 weeks in fiscal 1995), which
ends on the last Sunday in April. The year ending dates for the past three
fiscal years were April 28, 1996, April 30, 1995 and April 24, 1994.
(2) The assets and liabilities of FCC, which was sold on May 24, 1996, have been
reclassified as "Net Assets of Discontinued Operations" for all years
presented.
RESULTS OF RECENT OPERATIONS; RECENT EVENTS. On May 28, 1996, the Company
reported earnings for the fourth quarter and fiscal year ended April 28, 1996.
Net income for the year was $79,609,000, or $1.71 per share, compared to
$84,633,000, or $1.82 per share, in the prior year. Fourth quarter earnings
totaled $15,498,000, or $.33 per share, down from $15,892,000, or $.34 per
share, a year ago. Both fourth quarter and fiscal year end earnings were
impacted by special non-recurring charges totaling $16.4 million, or $.35 per
share, related to investments in the Company's German RV operation and Southern
California real estate.
The Company's German RV operation was sold subsequent to the fiscal year end
on May 23, 1996. The Company recognized the loss on its investment in the fourth
quarter, resulting in a $28.0 million charge before income taxes. The Company
also decided to revalue an investment in undeveloped California land, which
resulted in a $4.0 million pre-tax charge against non-operating income. The
cumulative tax benefits related to the German investment loss amounted to $14.0
million, all of which was recognized in the fourth quarter. This lowered the
Company's effective tax rate to 15% versus a normal expected rate of about 40%.
Revenues for the year were $2.81 billion, virtually identical to the amount
recorded last year. Fourth quarter revenues reached an all-time high of $772.0
million, 9% ahead of the prior year's $706.5 million. Finance revenues from FCC
have been excluded from fiscal 1996 and prior year revenues.
17
<PAGE>
Fiscal 1996 revenues and earnings were mainly driven by favorable results
from the Company's housing group, which posted record sales and profits.
Manufactured housing revenues totaled $1.44 billion for the year, 5% ahead of
last year's $1.37 billion. Fourth quarter revenues were also up 5%, climbing to
$362.0 million from $343.6 million last year, on a 1% increase in shipments to
17,024 homes.
Recreational vehicle revenues in 1996 did not keep pace with the prior
year's record $1.39 billion, falling 5% to $1.32 billion. However, a strong
recovery in motor home sales boosted fourth quarter RV revenues 14% to $396.3
million, up from $347.8 million a year ago. RV operating profits in 1996 were
well below the prior year mainly as a result of reduced revenues earlier in the
year.
RV revenues for fiscal 1996 included $720.2 million for domestic motor home
sales, off 5% from the prior year. Travel trailer sales were also behind the
prior year, easing 7% to $458.2 million. By contrast, the folding trailer
division posted record 1996 sales of $87.2 million, 6% ahead of the prior year.
The European operation recorded annual revenues of $51.9 million, which was off
1%.
In the fourth quarter, domestic motor home sales increased 33% to $233.5
million on a 21% gain in unit volume to 4,135. Unit shipments of travel trailers
fell 4% to 9,622, leading to a slight 1% decline in revenues to $129.7 million.
Folding trailer sales, which got a boost from aggressive marketing programs in
last year's fourth quarter, fell 7% to $23.7 million as unit volume declined 17%
to 5,031. Revenues from the German RV unit were $9.4 million, off 37% on unit
sales of 117.
The Company's supply subsidiaries generated 1996 revenues of $48.8 million,
off 2% from the prior year. Fourth quarter sales of $13.7 million were 9% behind
the prior year period.
On May 24, 1996, the Company completed the sale of FCC to Associates First
Capital Corporation for $156.6 million in cash. As part of the transaction, an
operating agreement was signed to provide for long-term cooperation between the
Company and Associates First Capital Corporation and to provide for wholesale
and retail financing services to Company dealers and customers. The Company
recorded a gain of $35.3 million after applicable income taxes, on the
transaction, which gain will be recorded in the Company's first quarter of its
1997 fiscal year. The net proceeds from this sale will be used to purchase
Shares in the Offer.
SUMMARY UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION. The
following summary unaudited pro forma consolidated financial information gives
effect to the purchase of Shares pursuant to the Offer as if such purchase and
the FCC sale and related debt assumption had occurred at the dates indicated
based on certain assumptions described in the Notes to Summary Unaudited Pro
Forma Consolidated Financial Information. The summary unaudited pro forma
consolidated financial information should be read in conjunction with the
summary historical consolidated financial information and does not purport to be
indicative of the results that would actually have been obtained had the
purchase of the Shares pursuant to the Offer and the FCC sale and related debt
assumption been completed at the dates indicated or that may be obtained in the
future.
18
<PAGE>
SUMMARY UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
APRIL 28, 1996
-----------------------------------------
PRO FORMA
-----------------------------
ASSUMED ASSUMED
$27.00 PER $31.00 PER
SHARE SHARE
UNAUDITED PURCHASE PURCHASE
HISTORICAL PRICE PRICE
---------- ------------- -------------
<S> <C> <C> <C>
OPERATING DATA
Sales................................................................. $2,809,276 $2,809,276 $2,809,276
Cost and expenses..................................................... 2,677,744 2,677,744 2,677,744
Operating income...................................................... 131,532 131,532 131,532
Other income (expense)................................................ (20,539) (30,155) (32,868)
Income from continuing operations before income taxes................. 110,993 101,377 98,664
Income from continuing operations..................................... 69,901 64,131 62,504
Earnings per share from continuing operations......................... $ 1.50 $ 1.83 $ 1.78
Common and equivalent shares outstanding.............................. 46,469 35,069 35,069
BALANCE SHEET DATA
Total assets.......................................................... $1,108,932 $ 855,253 $ 809,653
Long-term debt........................................................ 80,000 80,000 80,000
Stockholders' equity.................................................. 649,137 375,614 330,014
Book value per share.................................................. 14.22 10.97 9.64
</TABLE>
NOTES TO SUMMARY UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following assumptions regarding the Offer were made in determining the
summary unaudited pro forma consolidated financial information:
(1) The operating data information assumes that the sale of FCC closed on
May 1, 1995, and that the 11,400,000 Shares are purchased at $27.00 and
$31.00 per Share, respectively, on the same day. The purchase price of
the Shares plus estimated expenses of $1,100,000 is assumed to be
financed from existing cash and investments, the net proceeds from the
sale of FCC, and the proceeds of $80 million of borrowing assumed by the
Company in connection with the FCC sale. The pro forma operating data
gives effect to the interest income foregone due to the sale of short
term investments and the additional interest expense charged to
operations due to the assumption of the $80 million of long-term debt,
net of the interest earned on additional cash savings as a result of
reduced dividends, all net of the related income tax benefit. The net
negative effect of these pro forma adjustments is approximately $5.8
million or $.16 per Share at $27.00 per Share or $7.4 million or $.21 per
Share at $31.00 per Share.
(2) The earnings per share from continuing operations gives effect to the
reduced number of shares that result from the repurchase of Shares
pursuant to the Offer, resulting in a $.49 per share increase in earnings
per share from continuing operations.
(3) The balance sheet information assumes that the sale of FCC closed on
April 28,1996, and that the 11,400,000 Shares are purchased at $27.00 and
$31.00 per Share, respectively, on the same day. The purchase price of
the Shares plus estimated expenses of $1,100,000 is assumed to be
financed from existing cash and investments, the net proceeds from the
sale of FCC, and the proceeds of $80.0 million of borrowing assumed by
the Company in connection with the FCC sale. The pro forma total assets
information reflects adjustments for the above transactions plus the
elimination of the net assets of discontinued operations of FCC. The pro
forma stockholder's equity information reflects the gain on the sale of
FCC, net of taxes, and the
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repurchase of the 11,400,000 Shares, including related expenses. The
book value per share information gives effect to the reduced number of
Shares outstanding subsequent to the repurchase of Shares pursuant to the
Offer.
(4) There can be no assurance that the Company will purchase 11,400,000
Shares or of the price at which Shares will be purchased.
THE RIGHTS. On November 10, 1988, the Board of Directors of the Company
declared a dividend distribution on each then outstanding Share of one Right to
acquire one one-hundredth share of Series A Junior Participating Preferred Stock
of the Company at an exercise price of $75.00, subject to adjustment. Rights are
also issued with Shares issued after the initial dividend distribution and
before the occurrence of certain specified events.
The Rights may only be exercised 10 days after public announcement that a
party has acquired or obtained the right to acquire 25% or more of the Company's
outstanding Common Stock; 10 business days after commencement of or announcement
of intention to commence a tender or exchange offer to acquire 30% or more of
the Shares; or 10 business days after the Board of Directors of the Company
determines that any person, alone or together with its affiliates and
associates, has become the beneficial owner of an amount of Common Stock which
the Board of Directors determines to be substantial (which amount shall in no
event be less than 15% of the shares of Common Stock outstanding) and at least a
majority of the Board of Directors who are not officers of the Company, after
reasonable inquiry and investigation, including consultation with such persons
as such directors shall deem appropriate, shall determine that such beneficial
ownership by such person is for the purpose of greenmail or is reasonably likely
to cause a material adverse impact on the Company (any such person being
referred to as an "Adverse Person"). In the event a party acquires 30% or more
of the Company's outstanding Shares in accordance with certain defined terms or
the Board of Directors determines that any person has become an Adverse Person,
each Right will entitle its holder to purchase, at the Right's then current
exercise price, a number of Shares having a market value of twice the Right's
then current exercise price.
The Rights do not have voting rights and expire November 9, 1998. They may
be redeemed by the Company at a price of $.02 per Right at any time prior to the
earlier of (i) their expiration; (ii) 10 days following a person's acquisition
of 25% or more of the Company's outstanding Common Stock; or (iii) the Board of
Directors' determination of a person to be an Adverse Person. If the Company is
acquired, under certain circumstances each Right entitles the holder to
purchase, at the Right's then current exercise price, a number of the acquiring
company's common shares having a market value of twice the Right's then current
exercise price.
Unless and until the Rights become exercisable, the Rights trade only with
the Shares and are represented by the stock certificates representing Shares. If
the Rights become exercisable, separate certificates representing the Rights
will be delivered to the holders of the Shares at such time, and the Rights will
then trade separately from the Shares. The Rights will not become exercisable or
separately tradable as a result of the Offer. Unless the Rights are redeemed by
the Company, a tender of Shares will also constitute a tender of the associated
Rights. No separate consideration will be paid for the Rights. Upon the purchase
of Shares by the Company pursuant to the Offer, the sellers of the Shares so
purchased will no longer own the Rights associated with such Shares.
ADDITIONAL INFORMATION. The Company is subject to the informational
requirements of the Exchange Act and in accordance therewith files reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Certain information as of
particular dates concerning the Company's directors and officers, their
remuneration, options granted to them, the principal holders of the Company's
securities and any material interest of such persons in transactions with the
Company is filed with the Commission. The Company has also filed an Issuer
Tender Offer Statement on Schedule 13E-4 with the Commission, which includes
certain additional information relating to the Offer. Such reports, as well as
such other material, may be inspected and copies may be obtained at the
Commission's public reference facilities at 450 Fifth
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Street, N.W., Washington, D.C. 20549, and should also be available for
inspection and copying at the regional offices of the Commission located at 7
World Trade Center, 13th Floor, New York, New York 10048, and Suite 1400,
Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois 60661.
Copies of such material may be obtained by mail, upon payment of the
Commission's customary fees, from the Commission's Public Reference Section at
450 Fifth Street, N.W., Washington, D.C. 20549. Such reports, proxy statements
and other information also should be available for inspection at the offices of
the New York Stock Exchange, 20 Broad Street, New York, New York, and at the
offices of the Pacific Stock Exchange, 301 Pine Street, San Francisco,
California. The Company's Schedule 13E-4 may not be available at the
Commission's regional offices.
11. INTERESTS OF DIRECTORS AND OFFICERS; TRANSACTIONS AND AGREEMENTS CONCERNING
THE SHARES
As of May 30, 1996, the Company had issued and outstanding 45,640,442 Shares
and had reserved for issuance upon exercise of outstanding stock options
2,617,624 Shares. The 11,400,000 Shares that the Company is offering to purchase
pursuant to the Offer represent approximately 25.0% of the Shares then
outstanding, or approximately 23.6% of the Shares then outstanding on a fully
diluted basis (assuming the exercise of all outstanding stock options). As of
May 30, 1996, the Company's directors and officers as a group beneficially owned
an aggregate of 10,660,271 Shares (including 2,164,824 Shares issuable upon
exercise of stock options exercisable within 60 days of such date), which
constituted approximately 22.3% of the outstanding Shares (assuming exercise of
all such options). The Company has been advised that certain directors and
officers of the Company intend to tender Shares pursuant to the Offer, which in
the aggregate constitute approximately 350,000 Shares, or approximately .77% of
the Shares outstanding on May 30, 1996. If the Company purchases 11,400,000
Shares pursuant to the Offer, including all Shares tendered by such directors
and officers and assuming no other director or officer of the Company tenders
Shares in the Offer, the percentage of outstanding Shares owned beneficially by
all of the Company's directors and officers as a group would increase to
approximately 28.3% of the Shares then outstanding (including, for this purpose,
Shares that may be acquired by such directors and officers pursuant to the
exercise of outstanding stock options exercisable within 60 days of the date
hereof). The Company has no agreement, arrangement or understanding with any of
its directors, officers, or affiliates concerning tenders of Shares by them
pursuant to the Offer.
Based upon the Company's records and upon information provided to the
Company by its directors, executive officers and affiliates, neither the Company
nor any of its subsidiaries nor, to the best of the Company's knowledge, any of
the directors or executive officers of the Company, nor any associates of any of
the foregoing, has effected any transactions in the Shares during the 40
business days prior to the date hereof. Except for the rights of directors and
executive officers to purchase Shares pursuant to the Company's stock option
plans, neither the Company nor, to the best of the Company's knowledge, any of
its directors or executive officers, is a party to any contract, arrangement,
understanding or relationship with any other person relating, directly or
indirectly, to any securities of the Company including, but not limited to, any
contract, arrangement, understanding or relationship concerning the transfer or
the voting of any such securities, joint ventures, loan or option arrangements,
puts or calls, guarantees of loans, guarantees against loss, or the giving or
withholding of proxies, consents or authorizations.
12. CERTAIN LEGAL AND REGULATORY MATTERS
The Company is not aware of any license or regulatory permit that appears to
be material to its business that might be adversely affected by its acquisition
of Shares as contemplated in the Offer or of any approval or other action by any
government or governmental, administrative or regulatory authority or agency,
domestic or foreign, that would be required for the Company's acquisition or
ownership of Shares pursuant to the Offer. Should any such approval or other
action be required, the Company currently contemplates that it will seek such
approval or other action. The Company cannot predict whether it may determine
that it is required to delay the acceptance for payment of Shares tendered
pursuant to the Offer pending the outcome of any such matter. There can be no
assurance
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that any such approval or other action, if needed, would be obtained or would be
obtained without substantial conditions or that the failure to obtain any such
approval or other action might not result in adverse consequences to the
Company's business. The Company intends to make all required filings under the
Exchange Act. The Company's obligation under the Offer to accept Shares for
payment is subject to certain conditions. See SECTION 5.
13. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL. The following is a discussion of the material United States
federal income tax consequences to stockholders with respect to a sale of Shares
pursuant to the Offer. The discussion is based upon the provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations,
Internal Revenue Service (the "IRS") rulings and judicial decisions, all in
effect as of the date hereof and all of which are subject to change (possibly
with retroactive effect) by subsequent legislative, judicial or administrative
action. The discussion does not address all aspects of United States federal
income taxation that may be relevant to a particular stockholder in light of
such stockholder's particular circumstances or to certain types of holders
subject to special treatment under the United States federal income tax laws
(such as certain financial institutions, tax-exempt organizations, life
insurance companies, dealers in securities or currencies, or stockholders
holding the Shares as part of a conversion transaction, as part of a hedge or
hedging transaction, or as a position in a straddle for tax purposes). In
addition, the discussion below does not consider the effect of any foreign,
state, local or other tax laws that may be applicable to particular
stockholders. The discussion assumes that the Shares are held as "capital
assets" within the meaning of Section 1221 of the Code.
EACH STOCKHOLDER SHOULD CONSULT SUCH STOCKHOLDER'S OWN TAX ADVISOR AS TO THE
PARTICULAR UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO THAT STOCKHOLDER
TENDERING SHARES PURSUANT TO THE OFFER AND THE APPLICABILITY AND EFFECT OF ANY
STATE, LOCAL OR FOREIGN TAX LAWS AND RECENT CHANGES IN APPLICABLE TAX LAWS.
CHARACTERIZATION OF THE SURRENDER OF SHARES PURSUANT TO THE OFFER. The
surrender of Shares by a stockholder to the Company pursuant to the Offer will
be a taxable transaction for United States federal income tax purposes and may
also be a taxable transaction under applicable state, local and foreign tax
laws. The United States federal income tax consequences to a stockholder may
vary depending upon the stockholder's particular facts and circumstances. Under
Section 302 of the Code, the surrender of Shares by a stockholder to the Company
pursuant to the Offer will be treated as a "sale or exchange" of such Shares for
United States federal income tax purposes (rather than as a distribution by the
Company with respect to the Shares held by the tendering stockholder) if the
receipt of cash upon such surrender (i) is "substantially disproportionate" with
respect to the stockholder, (ii) results in a "complete redemption" of the
Shares owned by the stockholder, or (iii) is "not essentially equivalent to a
dividend" with respect to the stockholder (each as described below).
If any of the above three tests is satisfied, and the surrender of the
Shares is therefore treated as a "sale or exchange" of such Shares for United
States federal income tax purposes, the tendering stockholder will recognize
gain or loss equal to the difference between the amount of cash received by the
stockholder and the stockholder's tax basis in the Shares surrendered pursuant
to the Offer. Any such gain or loss will be capital gain or loss, and will be
long term capital gain or loss if the Shares have been held for more than one
year.
If none of the above three tests is satisfied, the tendering stockholder
will be treated as having received a distribution by the Company with respect to
such stockholder's Shares in an amount equal to the cash received by the
stockholder pursuant to the Offer. The distribution will be treated as a
dividend taxable as ordinary income to the extent of the Company's current or
accumulated earnings and profits for tax purposes. The amount of the
distribution in excess of such current or accumulated earnings and profits will
be treated as a return of the stockholder's tax basis in the Shares, and then as
gain from the sale or exchange of such Shares. The Company believes that it has
sufficient current and
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accumulated earnings and profits, such that stockholders who do not qualify for
sale or exchange treatment will be treated as having received a dividend taxable
as ordinary income in the full amount of the cash received pursuant to the
Offer. The tendering stockholder's basis in the Shares surrendered pursuant to
the Offer generally will be added to such stockholder's basis in his or her
remaining Shares, if any.
CONSTRUCTIVE OWNERSHIP. In determining whether any of the three tests under
Section 302 of the Code is satisfied, stockholders must take into account not
only the Shares which are actually owned by the stockholder, but also Shares
which are constructively owned by the stockholder within the meaning of Section
318 of the Code. Under Section 318 of the Code, a stockholder may be deemed to
own Shares actually owned, and in some cases constructively owned, by certain
related individuals or entities and Shares which the stockholder has the right
to acquire by exercise of an option or by conversion.
PRORATION. Contemporaneous dispositions or acquisitions of Shares by a
stockholder or related individuals or entities may be deemed to be part of a
single integrated transaction which will be taken into account in determining
whether any of the three tests under Section 302 of the Code has been satisfied.
Each stockholder should be aware that because proration may occur in the Offer,
even if all the Shares actually and constructively owned by a stockholder are
tendered pursuant to the Offer, fewer than all of such Shares may be purchased
by the Company. Thus, proration may affect whether the surrender by a
stockholder pursuant to the Offer will meet any of the three tests under Section
302 of the Code. See SECTION 2 for information regarding each stockholder's
option to make a conditional tender of a minimum number of Shares. Therefore, a
stockholder should consult his or her own tax advisor regarding whether to make
contemporaneous dispositions or acquisitions of Shares, and whether to make a
conditional tender of a minimum number of Shares, and the appropriate
calculation thereof.
SECTION 302 TESTS. The receipt of cash by a stockholder will be
"substantially disproportionate" if the percentage of the outstanding Shares
actually and constructively owned by the stockholder immediately following the
surrender of Shares pursuant to the Offer is less than 80% of the percentage of
the outstanding Shares actually and constructively owned by such stockholder
immediately before the sale of Shares pursuant to the Offer. Stockholders should
consult their tax advisors with respect to the application of the "substantially
disproportionate" test to their particular situation.
The receipt of cash by a stockholder will be a "complete redemption" of all
the Shares owned by the stockholder if either (i) all of the Shares actually and
constructively owned by the stockholder are surrendered pursuant to the Offer,
or (ii) all of the Shares actually owned by the stockholder are surrendered
pursuant to the Offer and, with respect to Shares constructively owned by the
stockholder which are not surrendered pursuant to the Offer, the stockholder is
eligible to waive (and effectively waives) constructive ownership of all such
Shares under procedures described in Section 302(c) of the Code.
Even if the receipt of cash by a stockholder fails to satisfy the
"substantially disproportionate" test or the "complete redemption" test, a
stockholder may nevertheless satisfy the "not essentially equivalent to a
dividend" test, if the stockholder's surrender of Shares pursuant to the Offer
results in a "meaningful reduction" in the stockholder's interest in the
Company. Whether the receipt of cash by a stockholder will be "not essentially
equivalent to a dividend" will depend upon the individual stockholder's facts
and circumstances. The IRS has indicated in published rulings that even a small
reduction in the proportionate interest of a small minority stockholder in a
publicly held corporation who exercises no control over corporate affairs may
constitute such a "meaningful reduction." Stockholders expecting to rely upon
the "not essentially equivalent to a dividend" test should consult their own tax
advisors as to its application in their particular situation.
CORPORATE STOCKHOLDER DIVIDEND TREATMENT. If a sale of Shares by a
corporate stockholder is treated as a dividend, the corporate stockholder may be
entitled to claim a deduction equal to 70% of the dividend under Section 243 of
the Code, subject to applicable limitations. Corporate stockholders
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should, however, consider the effect of Section 246(c) of the Code, which
disallows the 70% dividends-received deduction with respect to stock that is
held for 45 days or less. For this purpose, the length of time a taxpayer is
deemed to have held stock may be reduced by periods during which the taxpayer's
risk of loss with respect to the stock is diminished by reason of the existence
of certain options or other transactions. Moreover, under Section 246A of the
Code, if a corporate stockholder has incurred indebtedness directly attributable
to an investment in Shares, the 70% dividends-received deduction may be reduced.
In addition, amounts received by a corporate stockholder pursuant to the
Offer that are treated as a dividend may constitute an "extraordinary dividend"
under Section 1059 of the Code. Generally, Section 1059 will only apply to
"extraordinary dividends" paid with respect to Shares held by a corporation for
less than two years prior to the announcement date of the Offer. An
"extraordinary dividend" is a dividend that (i) equals or exceeds 10% of the
stockholder's basis in the Shares (treating all dividends having ex-dividend
sales within an 85-day period as a single dividend) or (ii) exceeds 20% of the
stockholder's adjusted basis in the Shares (treating all dividends having
ex-dividend sales within a 365-day period as a single dividend). Accordingly, if
applicable, a corporate stockholder would be required under Section 1059(a) of
the Code to reduce its basis (but not below zero) in its Shares by the non-taxed
portion of the dividend (i.e., the portion of the dividend for which a deduction
is allowed), and if such portion exceeds the stockholder's tax basis for its
Shares, to treat the excess as gain from the sale of such Shares in the year in
which a sale or disposition of such Shares occurs (which, in certain
circumstances, may be the year in which Shares are sold pursuant to the Offer).
Corporate stockholders also should be aware that legislation is pending in
Congress which, if enacted in its current form, would generally require
immediate gain recognition whenever the basis of stock with respect to which any
extraordinary dividend was received is reduced below zero. Legislation also has
been proposed to reduce the amount a corporate shareholder may deduct under
Section 243 of the Code from 70% to 50% of the amount of the dividend received
and disallow the dividends received deduction if the 46 day holding period under
Section 246(c) of the Code is not satisfied with respect to such stock over a
period immediately before and immediately after the stockholder becomes entitled
to receive the dividend. It is impossible to predict whether this or similar
legislation will be enacted.
ADDITIONAL TAX CONSIDERATIONS. The distinction between long-term capital
gains and ordinary income is relevant because, in general, individuals currently
are subject to taxation at a reduced rate on their "net capital gain" (i.e., the
excess of net long-term capital gains over net short-term capital losses) for
the year. Legislation is pending in Congress which, if enacted in its current
form, would substantially reduce the tax rate applicable to net capital gains of
individuals and corporations. It is impossible to predict whether this or
similar legislation will be enacted.
Stockholders are urged to consult their own tax advisors regarding any
possible impact on their obligation to make estimated tax payments as a result
of the recognition of any capital gain (or the receipt of any ordinary income)
caused by the surrender of any Shares to the Company pursuant to the Offer.
FOREIGN STOCKHOLDERS. The Company will withhold United States federal
income tax at a rate of 30% from gross proceeds paid pursuant to the Offer to a
foreign stockholder or his or her agent, unless the Company determines that a
reduced rate of withholding is applicable pursuant to a tax treaty or that an
exemption from withholding is applicable because such gross proceeds are
effectively connected with the conduct of a trade or business by the foreign
stockholder within the United States. For this purpose, a foreign stockholder is
any stockholder that is not (i) a citizen or resident of the United States, (ii)
a corporation, partnership or other entity created or organized in or under the
laws of the United States, or (iii) any estate or trust the income of which is
subject to United States federal income taxation regardless of its source.
Without definite knowledge to the contrary, the Company will determine whether a
stockholder is a foreign stockholder by reference to the stockholder's address.
A foreign stockholder may be eligible to file for a refund of such tax or a
portion of such tax if such
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stockholder (i) meets the "complete redemption," "substantially
disproportionate" or "not essentially equivalent to a dividend" tests described
above, (ii) is entitled to a reduced rate of withholding pursuant to a treaty
and the Company withheld at a higher rate, or (iii) is otherwise able to
establish that no tax or a reduced amount of tax was due. In order to claim an
exemption from withholding on the ground that gross proceeds paid pursuant to
the Offer are effectively connected with the conduct of a trade or business by a
foreign stockholder within the United States or that the foreign stockholder is
entitled to the benefits of a tax treaty, the foreign stockholder must deliver
to the Depositary (or other person who is otherwise required to withhold United
States tax) a properly executed statement claiming such exemption or benefits.
Such statements may be obtained from the Depositary. Foreign stockholders are
urged to consult their own tax advisors regarding the application of United
States federal income tax withholding, including eligibility for a withholding
tax reduction or exemption and the refund procedures.
BACKUP WITHHOLDING. See SECTION 2 with respect to the application of the
United States federal income tax backup withholding.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY
AND MAY NOT APPLY TO SHARES ACQUIRED IN CONNECTION WITH THE EXERCISE OF STOCK
OPTIONS OR PURSUANT TO OTHER COMPENSATION ARRANGEMENTS WITH THE COMPANY. THE TAX
CONSEQUENCES OF A SALE PURSUANT TO THE OFFER MAY VARY DEPENDING UPON, AMONG
OTHER THINGS, THE PARTICULAR CIRCUMSTANCES OF THE TENDERING STOCKHOLDER. NO
INFORMATION IS PROVIDED HEREIN AS TO THE STATE, LOCAL OR FOREIGN TAX
CONSEQUENCES OF THE TRANSACTION CONTEMPLATED BY THE OFFER. STOCKHOLDERS ARE
URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR FEDERAL,
STATE, LOCAL AND FOREIGN TAX CONSEQUENCES TO THEM OF TENDERING SHARES PURSUANT
TO THE OFFER AND THE EFFECT OF THE CONSTRUCTIVE OWNERSHIP RULES DESCRIBED ABOVE.
14. FEES AND EXPENSES
PaineWebber Incorporated will act as Dealer Manager for the Company in
connection with the Offer. The Company has agreed to pay the Dealer Manager $.06
per Share purchased by the Company pursuant to the Offer. The Dealer Manager
will also be reimbursed by the Company for its reasonable out-of-pocket
expenses, including attorneys' fees, and will be indemnified against certain
liabilities, including liabilities under the federal securities laws, in
connection with the Offer. The Dealer Manager has rendered, is currently
rendering and is expected to continue to render various investment banking and
other advisory services to the Company. The Dealer Manager has received, and
will continue to receive, customary compensation from the Company for such
services.
The Company has retained The First National Bank of Boston to act as
Depositary and D.F. King & Co., Inc. to act as Information Agent in connection
with the Offer. The Information Agent may contact stockholders by mail,
telephone, telex, telegraph and personal interviews, and may request brokers,
dealers and other nominee stockholders to forward materials relating to the
Offer to beneficial owners. The Depositary and the Information Agent will
receive reasonable and customary compensation for their services and will also
be reimbursed for certain out-of-pocket expenses. The Company has agreed to
indemnify the Depositary and the Information Agent against certain liabilities,
including certain liabilities under the federal securities laws, in connection
with the Offer. Neither the Information Agent nor the Depositary has been
retained to make solicitations or recommendations in connection with the Offer.
The Company will not pay any fees or commissions to any broker, dealer or
other person for soliciting tenders of Shares pursuant to the Offer (other than
the fee of the Dealer Manager). The Company will, upon request, reimburse
brokers, dealers, commercial banks and trust companies for reasonable and
customary handling and mailing expenses incurred by them in forwarding materials
relating to the Offer to their customers.
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15. MISCELLANEOUS
The Offer is being made to all holders of Shares. The Company is not aware
of any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to a valid state statute. If the Company becomes aware
of any valid state statute prohibiting the making of the Offer, the Company will
make a good faith effort to comply with such statute. If, after such good faith
effort, the Company cannot comply with such statute, the Offer will not be made
to, nor will tenders be accepted from or on behalf of, holders of Shares in such
state. In those jurisdictions whose securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer shall be deemed
to be made on behalf of the Company by the Dealer Manager or one or more
registered brokers or dealers licensed under the laws of such jurisdictions.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE COMPANY IN CONNECTION WITH THE OFFER OTHER THAN
THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED LETTER OF
TRANSMITTAL. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
FLEETWOOD ENTERPRISES, INC.
May 31, 1996
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Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and other required
documents should be sent or delivered by stockholders of the Company or their
broker, dealer, commercial bank or trust company to the Depositary at one of its
addresses set forth below.
THE DEPOSITARY FOR THE OFFER IS:
THE FIRST NATIONAL BANK OF BOSTON
BY MAIL: BY FACSIMILE TRANSMISSION:
The First National Bank of Boston (For Eligible Institutions Only)
Shareholder Services Division (617) 575-2233
Post Office Box 1889 Confirm by Telephone:
Mail Stop 45-02-53 (617) 575-3400
Boston, Massachusetts 02105
BY OVERNIGHT DELIVERY: BY HAND DELIVERY:
The First National Bank of Boston Bank of Boston Trust
Corporate Agency & Reorganization 55 Broadway, 3rd Floor
150 Royall Street New York, New York 10006
Mail Stop 45-02-53
Canton, Massachusetts 02021
Any questions concerning tender procedures may be directed to the Depositary
at (617) 575-3400.
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
77 Water Street, New York, New York 10005
Telephone: (212) 269-5550 (call collect)
Telephone: (800) 769-5414 (toll-free)
Any questions concerning tender procedures or requests for additional copies
of this Offer to Purchase, the Letter of Transmittal or other tender offer
materials may be directed to the Information Agent. Stockholders may also
contact their local broker, dealer, commercial bank or trust company for
assistance concerning the Offer.
THE DEALER MANAGER FOR THE OFFER IS:
PAINEWEBBER INCORPORATED
1285 Avenue of the Americas, New York, New York 10019
Telephone: (212) 713-1425 (call collect)
Telephone: (888) 255-9059 (toll-free)
Any questions concerning the terms of the Offer may be directed to the
Dealer Manager.
<PAGE>
FLEETWOOD ENTERPRISES, INC.
LETTER OF TRANSMITTAL
TO ACCOMPANY SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED SERIES A JUNIOR PARTICIPATING PREFERRED STOCK PURCHASE
RIGHTS)
OF
FLEETWOOD ENTERPRISES, INC.
TENDERED PURSUANT TO THE OFFER TO PURCHASE
DATED MAY 31, 1996
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 12:00 MIDNIGHT, NEW YORK TIME, ON THURSDAY, JUNE 27, 1996,
UNLESS THE OFFER IS EXTENDED
THE DEPOSITARY FOR THE OFFER IS:
THE FIRST NATIONAL BANK OF BOSTON
<TABLE>
<S> <C>
BY MAIL: BY FACSIMILE TRANSMISSION:
The First National Bank of Boston (For Eligible Institutions Only)
Shareholder Services Division (617) 575-2233
Post Office Box 1889
Mail Stop 45-02-53 Confirm by Telephone:
Boston, Massachusetts 02105 (617) 575-3400
BY OVERNIGHT DELIVERY: BY HAND DELIVERY:
The First National Bank of Boston Bank of Boston Trust
Corporate Agency & Reorganization 55 Broadway, 3rd Floor
150 Royall Street New York, New York 10006
Mail Stop 45-02-53
Canton, Massachusetts 02021
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN THOSE SHOWN ABOVE OR
TRANSMISSION OF INSTRUCTIONS TO A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE PROVIDED
THEREFOR AND
COMPLETE THE SUBSTITUTE W-9 SET FORTH BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY
BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
<TABLE>
<S> <C> <C> <C>
DESCRIPTION OF SHARES TENDERED
(SEE INSTRUCTIONS 3 AND 4)
<CAPTION>
PRINT NAME(S) AND ADDRESS(ES) OF
REGISTERED HOLDERS(S)
(PLEASE FILL IN EXACTLY AS NAME(S) SHARES TENDERED
APPEAR(S) ON CERTIFICATE(S)) (ATTACH SIGNED ADDITIONAL LIST, IF NECESSARY)
<S> <C> <C> <C>
TOTAL NUMBER OF
SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
TOTAL SHARES:
</TABLE>
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented by
any Certificates delivered to the Depositary are being tendered. See
Instruction 4.
<PAGE>
This Letter of Transmittal is to be used only if (i) certificates are to be
forwarded herewith or (ii) unless an Agent's Message (as defined in the
Company's Offer to Purchase dated May 31, 1996 (the "Offer to Purchase")) is
used, delivery of Shares (as defined below) is to be made by book-entry transfer
to the Depositary's account at The Depository Trust Company ("DTC") or
Philadelphia Depository Trust Company ("PDTC") (hereinafter collectively
referred to as the "Book-Entry Transfer Facilities") pursuant to the procedures
set forth in Section 2 of the Offer to Purchase.
Stockholders who cannot deliver their Shares and all other documents
required hereby to the Depositary by the Expiration Date (as defined in the
Offer to Purchase) (or who cannot follow the procedure for book-entry transfer
on a timely basis) must tender their Shares pursuant to the guaranteed delivery
procedure set forth in Section 2 of the Offer to Purchase. See Instruction 2.
Delivery of documents to the Company or to a Book-Entry Transfer Facility does
not constitute a valid delivery.
A Stockholder owning beneficially as of the close of business on May 30,
1996 and who continues to own beneficially until the Expiration Date an
aggregate of fewer than 100 Shares, and who satisfies the other requirements set
forth in Instruction 9, may have all such Shares purchased before proration, if
any, of the purchase of other Shares pursuant to the Offer.
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
/ / CHECK HERE IF TENDERED 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 APPLICABLE BOX FOR BOOK-ENTRY
TRANSFER FACILITY: / / DTC / / PDTC
ACCOUNT NO.: ______________________________________________________________
TRANSACTION CODE NO.: _____________________________________________________
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Stockholder(s): _____________________________________
Date of Execution of Notice of Guaranteed Delivery: _______________________
Name of Institution that Guaranteed Delivery: _____________________________
If delivery is by book-entry transfer, check
applicable box for Book-Entry Transfer
Facility: / / DTC / / PDTC
Account No.: ______________________________________________________________
Transaction Code No.: _____________________________________________________
Window Ticket No. (if any): _______________________________________________
2
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Fleetwood Enterprises, Inc., a Delaware
corporation (the "Company") the above-described shares of Common Stock of the
Company, par value $1.00 per share (the "Shares") (including the associated
Series A Junior Participating Preferred Stock Purchase Rights (the "Rights")
issued pursuant to the Rights Agreement dated as of November 10, 1988, between
the Company and The First National Bank of Boston, as Rights Agent), at a price
per Share hereinafter set forth, pursuant to the Company's offer to purchase up
to 11,400,000 Shares, upon the terms and subject to the conditions set forth in
the Offer to Purchase dated May 31, 1996 (the "Offer to Purchase"), receipt of
which is hereby acknowledged, and in this Letter of Transmittal (which together
constitute the "Offer"). Unless the Rights are redeemed by the Company, a tender
of Shares will also constitute a tender of the associated Rights. Unless the
context requires otherwise, all references herein to the Shares shall include
the associated Rights.
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with 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 undersigned hereby
sells, assigns and transfers to, or upon the order of, the Company all right,
title and interest in and to all the Shares that are being tendered hereby (and
any and all other Shares or other securities issued or issuable in respect
thereof on or after May 31, 1996 (collectively, "Distributions")) or orders the
registration of such Shares tendered by book-entry transfer that are purchased
pursuant to the Offer or upon the order of the Company and irrevocably
constitutes and 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
certificates for such Shares and all Distributions, or transfer ownership of
such Shares and all Distributions on the account books maintained by any of the
Book-Entry Transfer Facilities, together, in any such case, with all
accompanying evidences of transfer and authenticity, to or upon the order of the
Company, as the undersigned's agent, of the Purchase Price (as defined below)
with respect to such Shares, (ii) present certificates for such Shares and all
Distributions for cancellation and 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.
The undersigned hereby represents and warrants that (i) the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and all Distributions, (ii) when and to the extent the same are
accepted for payment by the Company, the Company will acquire good, marketable
and unencumbered title thereto, free and clear of all liens, restrictions,
charges, encumbrances, conditional sales agreements or other obligations
relating to the sale or transfer thereof, and the same will not be subject to
any adverse claims and (iii) the undersigned has read and agrees to all of the
terms of the Offer. The undersigned will, upon request, execute and deliver any
additional documents deemed by the Depositary or the Company to be necessary or
desirable to complete the sale, assignment and transfer of the Shares tendered
hereby and all Distributions.
All authority herein conferred or agreed to be conferred shall not be
affected by, and shall survive the death or incapacity of the undersigned, and
any obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned.
Except as otherwise provided in the Offer to Purchase, tenders of Shares
made pursuant to the Offer are irrevocable. Shares tendered pursuant to the
Offer may be withdrawn at any time prior to the Expiration Date and, unless
theretofore accepted for payment by the Company pursuant to the Offer, may also
be withdrawn at any time after July 26, 1996. See Section 3 of the Offer to
Purchase.
3
<PAGE>
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, including the undersigned's representation and
warranty that (i) the undersigned has a net long position in the Shares being
tendered within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended, and (ii) the tender of such Shares complies
with Rule 14e-4. The Company's acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the
undersigned and the Company upon the terms and subject to the conditions of the
Offer.
The undersigned understands that, upon the terms and subject to the
conditions of the Offer, the Company will determine a single per Share price
(not greater than $31.00 nor less than $27.00 per Share) net to the seller in
cash, without interest thereon, (the "Purchase Price") that it will pay for
Shares validly tendered and not withdrawn pursuant to the Offer taking into
account the number of Shares so tendered and the prices specified by tendering
stockholders. The undersigned understands that the Company will select the
lowest Purchase Price that will enable it to purchase 11,400,000 Shares (or such
lesser number of Shares as are validly tendered and not withdrawn (at prices not
greater than $31.00 nor less than $27.00 per Share) pursuant to the Offer. The
undersigned understands that all Shares properly tendered and not withdrawn at
prices at or below the Purchase Price will be purchased at the Purchase Price,
net to the seller in cash, without interest thereon, upon the terms and subject
to the conditions of the Offer, including its proration and conditional tender
provisions, and that the Company will return all other Shares, including Shares
tendered and not withdrawn at prices greater than the Purchase Price, Shares not
purchased because of proration and Shares that were conditionally tendered and
not accepted. The undersigned understands that no separate consideration will be
paid for the Rights, and 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 a binding agreement between the undersigned
and the Company upon the terms and subject to the conditions of the Offer.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, the Company may terminate or amend the Offer or may
postpone the acceptance for payment of, or the payment for, Shares tendered or
may not be required to purchase any of the Shares tendered hereby or may accept
for payment fewer than all of the Shares tendered hereby. The undersigned
understands that the Offer is not conditioned upon any minimum number of shares
being tendered. The Offer is, however, subject to certain conditions set forth
in Section 5 of the Offer to Purchase.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the Purchase Price of any Shares purchased, and/or return
any Shares not tendered or not purchased, in the name(s) of the undersigned
(and, in the case of Shares tendered by book-entry transfer, by credit to the
account at the Book-Entry Transfer Facility designated above). Similarly, unless
otherwise indicated under "Special Delivery Instructions," please mail the check
for the Purchase Price of any Shares purchased and/or any certificates for
Shares not tendered or not purchased (and accompanying documents, as
appropriate) to the undersigned at the address shown below the undersigned's
signature(s). In the event that both "Special Payment Instructions" and "Special
Delivery Instructions" are completed, please issue the check for the Purchase
Price of any Shares purchased and/or return any Shares not tendered or not
purchased in the name(s) of, and mail said check and/or any certificates to, the
person(s) so indicated. The undersigned recognizes that the Company has no
obligation, pursuant to the "Special Payment Instructions," to transfer any
Shares from the name of the registered holder(s) thereof, or to order the
registration or transfer of such Shares tendered by book-entry transfer, if the
Company does not accept for payment any of the Shares so tendered.
<TABLE>
<S> <C> <C> <C> <C>
PRICE (IN DOLLARS) PER SHARE
AT WHICH SHARES ARE BEING TENDERED
(SEE INSTRUCTION 5)
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF
NO BOX IS CHECKED (EXCEPT AS PROVIDED IN THE ODD LOTS BOX
AND INSTRUCTIONS BELOW), THERE IS NO VALID TENDER OF SHARES.
/ / $27.00 / / $28.00 / / $29.00 / / $30.00 / / $31.00
/ / $27.50 / / $28.50 / / $29.50 / / $30.50
</TABLE>
4
<PAGE>
ODD LOTS
(SEE INSTRUCTION 9)
This section is to be completed ONLY if Shares are being tendered
by or on behalf of a person owning beneficially, as of the close of
business on May 30, 1996, and who continues to own beneficially as of
the Expiration Date, an aggregate of fewer than 100 Shares.
The undersigned either (check one box):
/ / was the beneficial owner as of the close of business on May
30, 1996, and will continue to be the beneficial owner as of
the Expiration Date, of an aggregate of fewer than 100
Shares, all of which are being tendered, or
/ / is an Eligible Institution (as defined in Instruction 1) that
(i) is tendering, for the beneficial owners thereof, Shares
with respect to which it is the record owner, and (ii)
believes, based upon representations made to it by each such
beneficial owner, that such beneficial owner owned
beneficially as of the close of business on May 30, 1996, and
will continue to own beneficially as of the Expiration Date,
an aggregate of fewer than 100 Shares, and is tendering all
of such Shares.
If you do not wish to specify a purchase price, check the
following box, in which case you will be deemed to have tendered at
the Purchase Price determined by the Company in accordance with the
terms of the Offer (persons checking this box need not indicate the
price per Share in the box entitled "Price (In Dollars) Per Share At
Which Shares Are Being Tendered" in this Letter of Transmittal). / /
5
<PAGE>
<TABLE>
<S> <C>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 6, 7 AND (SEE INSTRUCTIONS 6, 7 AND 8)
8) To be completed ONLY if certificate(s) for
To be completed ONLY if the certificate(s) Shares not tendered or not accepted for
for Shares not tendered or not accepted for payment and/or the check for the purchase
payment and/or check for the Purchase Price price of Shares accepted for payment are to
of Shares accepted for payment are to be be mailed to someone other than the
issued in the name of someone other than the undersigned or to the undersigned at an
undersigned or if Shares tendered by address other than that shown above.
book-entry transfer which are not accepted Mail: / / check / / certificate(s)
for payment are to be returned by credit to to:
any account maintained at a Book-Entry Name
Transfer Facility other than the account
indicated above.
Issue: / / check / / certificate(s) (Please Print)
to: Address
Name
(Include Zip Code)
(Please (Taxpayer Identification or Social Security
Print) No.)
Address
(Include Zip
Code)
(Taxpayer Identification or Social
Security No.)
Credit Shares tendered by book-entry
transfer that are not accepted for payment
to (Check one):
/ / DTC / / PDTC
(Account
No.)
</TABLE>
CONDITIONAL TENDER
A tendering stockholder may condition such stockholder's tender of Shares
upon the purchase by the Company of a specified minimum number of the Shares
tendered hereby, all as described in the Offer to Purchase, particularly in
Section 2 thereof. Unless at least such minimum number of Shares is purchased by
the Company pursuant to the terms of the Offer, none of the Shares tendered
hereby will be purchased. It is the tendering stockholder's responsibility to
calculate such minimum number of Shares, and each stockholder is urged to
consult such stockholder's own tax advisor. Unless this box has been completed
and a minimum specified, the tender will be deemed unconditional.
Minimum number of Shares that must be purchased, if any are purchased:
____________ Shares
6
<PAGE>
SIGN HERE
(SEE INSTRUCTION 6)
(COMPLETE SUBSTITUTE FORM W-9 INCLUDED IN THIS LETTER OF TRANSMITTAL)
________________________________________________________________________________
Signature(s) of Owner(s)
________________________________________________________________________________
Dated: ______________________, 1996
Name(s) ________________________________________________________________________
________________________________________________________________________________
(Please Print)
Capacity (full title) __________________________________________________________
Address ________________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
Area Code and Telephone No. ____________________________________________________
Tax Identification or Social Security No(s). ___________________________________
(SEE INSTRUCTION 13 AND COMPLETE SUBSTITUTE FORM W-9 ON THE REVERSE SIDE)
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
certificate(s) or on a security position listing or by 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 set forth full title and see Instruction 6.)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 6)
Name of Firm: __________________________________________________________________
(Please Print)
Authorized Signature: __________________________________________________________
Printed Name of Authorized Signatory: __________________________________________
Address: _______________________________________________________________________
_______________________________________________________________________
Area Code and Telephone Number: ________________________________________________
Dated: ______________________, 1996
7
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm that is a
member of a registered national securities exchange or the National Association
of Securities Dealers, Inc., or by a commercial bank or trust company having an
office or correspondent in the United States which is a participant in an
approved Signature Guarantee Medallion Program (an "Eligible Institution").
Signatures on this Letter of Transmittal need not be guaranteed (i) if 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 one of the
Book-Entry Transfer Facilities whose name appears on a security position listing
as the owner of Shares) tendered herewith and such holder(s) have not completed
the box entitled "Special Payment Instructions" or the box entitled "Special
Delivery Instructions" on this Letter of Transmittal, or (ii) if such Shares are
tendered for the account of an Eligible Institution. See Instruction 6.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed by stockholders
either (i) if certificates for Shares are to be forwarded herewith or, (ii)
unless an Agent's Message is utilized, if tenders of Shares are to be made by
book-entry transfer pursuant to the procedures set forth in Section 2 of the
Offer to Purchase. In order for Shares to be validly tendered pursuant to the
Offer, this Letter of Transmittal (or a facsimile hereof), properly completed
and duly executed, together with any required signature guarantees, or an
Agent's Message in connection with a book-entry delivery of Shares, 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 back cover of the Offer to
Purchase on or prior to the Expiration Date and either (i) Share certificates
representing tendered Shares must be received by the Depositary at such address
or such Shares must be tendered by book-entry transfer and a timely confirmation
of such book-entry transfer (a "Book-Entry Confirmation") must be received by
the Depositary, in each case on or prior to the Expiration Date, or (ii) the
guaranteed delivery procedures described in the following sentence must be
complied with. Stockholders whose certificates for Shares are not immediately
available or who cannot deliver their Share certificates and all other required
documents to the Depositary on or 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 by properly completing and duly executing a Notice of
Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth 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 the Company, must be received by the Depositary on or prior to the
Expiration Date; and (iii) the Share certificates (or a Book-Entry Confirmation)
representing all tendered Shares, in proper form for transfer, in each case
together with this Letter of Transmittal (or a facsimile hereof), properly
completed and duly executed, with any required signature guarantees (or, in the
case of a book-entry delivery, an Agent's Message) and any other documents
required by this Letter of Transmittal, must be received by the Depositary
within three New York Stock Exchange trading days after the date of execution of
such Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY
FACILITY, IS AT THE OPTION AND SOLE RISK OF THE TENDERING STOCKHOLDER, AND
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF
CERTIFICATES FOR SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
8
<PAGE>
Except as specifically permitted by Section 2 of the Offer to Purchase, no
alternative, conditional or contingent tenders will be accepted. Fractional
Shares will be purchased, unless proration of tendered Shares is required (in
which event no fractional Shares will be purchased). See Section 1 of the Offer
to Purchase. By executing this Letter of Transmittal (or facsimile thereof), the
tendering stockholder waives any right to receive any notice of the acceptance
for payment of the Shares.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
signed schedule attached hereto and referenced in the box entitled "Description
of Shares Tendered."
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares represented by any certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
that are to be tendered in the box entitled "Number of Shares Tendered." In such
case, a new certificate for the remainder of the Shares represented by the old
certificate will be sent to the person(s) signing this Letter of Transmittal,
unless otherwise provided in the "Special Payment Instructions" or "Special
Delivery Instructions" boxes on this Letter of Transmittal, as promptly as
practicable following the expiration or termination of the Offer. All Shares
represented by certificates delivered to the Depositary will be deemed to have
been tendered unless otherwise indicated.
5. INDICATION OF PRICE AT WHICH SHARES ARE BEING TENDERED. For Shares to
be validly tendered, the stockholder must check the box indicating the price per
Share at which the stockholder is tendering Shares under "Price (In Dollars) Per
Share at Which Shares Are Being Tendered" in this Letter of Transmittal, except
that any stockholder who owned beneficially as of the close of business on May
30, 1996, and continues to own beneficially as of the Expiration Date, an
aggregate of fewer than 100 Shares, may check the box above in the section
entitled "Odd Lots" indicating that such stockholder is tendering all Shares at
the Purchase Price determined by the Company. Only one box may be checked. If
more than one box is checked or if no box is checked (except as provided in the
Odd Lots box and this Instruction 5), there is no valid tender of Shares. A
stockholder wishing to tender portions of such stockholder's Share holdings at
different prices must complete a separate Letter of Transmittal for each price
at which such stockholder wishes to tender each such portion of such
stockholder's Shares. The same Shares cannot be tendered (unless previously
validly withdrawn as provided in Section 3 of the Offer to Purchase) at more
than one price.
6. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS.
(a) If this Letter of Transmittal is signed by the registered holder(s) of
the Shares hereby, the signature(s) must correspond exactly with the name(s) as
written on the face of the certificates without alteration, enlargement or any
change whatsoever.
(b) If any of the Shares tendered hereby are held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
(c) If any of the Shares tendered hereby are registered in different names
on different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.
(d) If this Letter of Transmittal is signed by the registered holder(s) of
the Shares tendered hereby, no endorsements of certificates or separate stock
powers are required unless payment of the Purchase Price is to be made to, or
Shares not tendered or not purchased are to be registered in the name of, any
person other than the registered holder(s). Signatures on any such certificates
or stock powers must be guaranteed by an Eligible Institution. See Instruction
1.
(e) If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates 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 the certificates for such Shares. Signature(s) on any
such certificates or stock powers must be guaranteed by an Eligible Institution.
See Instruction 1.
9
<PAGE>
(f) If this Letter of Transmittal or any certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to the Company of the authority of such person so to act must be
submitted.
7. STOCK TRANSFER TAXES. Except as provided in this Instruction, the
Company will pay or cause to be paid any 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 is to be made to, or Shares not
tendered or not purchased are to be registered in the name of, any person other
than the registered holder(s), or if tendered Shares are registered in the name
of any person other than the person(s) signing this Letter of Transmittal, 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
person will be deducted from the Purchase Price unless satisfactory evidence of
the payment of such taxes, or exemption therefrom, is submitted. See Section 4
of the Offer to Purchase. EXCEPT AS PROVIDED IN THIS INSTRUCTION 7, IT WILL NOT
BE NECESSARY TO AFFIX TRANSFER TAX STAMPS TO THE CERTIFICATES REPRESENTING
SHARES TENDERED HEREBY.
8. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
Purchase Price of any Shares purchased is to be issued in the name of, and/or
any Shares not tendered or not purchased are to be returned to, a person other
than the person(s) signing this Letter of Transmittal or if the check and/or any
certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to an
address other than that shown above in the box captioned "Description of Shares
Tendered," then the boxes captioned "Special Payment Instructions" and/or
"Special Delivery Instructions" on this Letter of Transmittal must be completed.
Stockholders tendering by book-entry transfer may request that Shares not
accepted for payment be credited to such account maintained at a Book-Entry
Transfer Facility as such Book-Entry Shareholder may designate under "Special
Payment Instructions." If no such instructions are given, such Shares not
accepted for payment will be returned by crediting the account at the Book-Entry
Transfer Facility designated above.
9. ODD LOTS. As described in the Offer to Purchase, if fewer than all
Shares validly tendered at or below the Purchase Price and not withdrawn on or
prior to the Expiration Date are to be purchased, the Shares purchased first
will consist of all Shares tendered by any stockholder who owned beneficially as
of the close of business on May 30, 1996, and continues to own beneficially as
of the Expiration Date, an aggregate of fewer than 100 Shares and who validly
and unconditionally tendered all such Shares at or below the Purchase Price
(including by not designating a purchase price as described above). Partial or
conditional tenders of Shares will not qualify for this preference. This
preference will not be available unless the box captioned "Odd Lots" in this
Letter of Transmittal and the Notice of Guaranteed Delivery, if any, is
completed.
10. WAIVER OF CONDITIONS; IRREGULARITIES. All questions as to the Purchase
Price, the form of documents, the number of Shares to be accepted and the
validity, eligibility (including time of receipt) and acceptance for payment of
any tender of Shares will be determined by the Company, in its sole discretion,
which determination shall be final and binding on all parties. The Company
reserves the absolute right to reject any or all tenders of Shares that it
determines are not in proper form or the acceptance for payment of or payment
for Shares that may, in the opinion of the Company's counsel, be unlawful. The
Company also reserves the absolute right to waive any defect or irregularity in
any tender of any particular Shares, and the Company's interpretation of the
terms of the Offer (including these Instructions) will be final and binding on
all parties. None of the Company, the Dealer Manager, the Depositary, the
Information Agent or any other person is or will be under any duty to give
notice of any defect or irregularity in tenders, nor shall any of them incur any
liability for failure to give any such notice.
10
<PAGE>
11. QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions
and requests for assistance may be directed to the Dealer Manager or Information
Agent at their respective addresses and telephone numbers set forth below.
Additional copies of the Offer to Purchase, this Letter of Transmittal, the
Notice of Guaranteed Delivery or the Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 may be obtained at the Company's
expense from the Information Agent at its address and telephone number set forth
below. Stockholders may also contact their local broker, dealer, commercial bank
or trust company for assistance concerning the Offer.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s) for
Shares has been lost, destroyed or stolen, the stockholder should promptly
notify the Depositary. The stockholder will then be instructed as to the steps
that must be taken in order to replace the certificate(s). This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost or destroyed Share certificates have been followed.
13. SUBSTITUTE FORM W-9. The tendering stockholder (or other payee) is
required to provide the Depositary with a correct Taxpayer Identification Number
("TIN"), generally the stockholder's social security or federal employer
identification number, and with certain other information on Substitute Form W-9
which is provided under "Important Tax Information" below, and to certify
whether the stockholder (or other payee) is subject to backup withholding of
federal income tax. If a tendering stockholder is subject to backup withholding,
the stockholder must cross out Item (2) in Part 3 of the Substitute Form W-9.
Failure to provide the information on the Substitute Form W-9 may subject the
tendering stockholder to 31% Federal income tax withholding on the payment of
the Purchase Price and to a $50 penalty imposed by the Internal Revenue Service
("IRS").
If the Shares are held in more than one name or are not in the name of the
actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report. The box in Part 3 of the Substitute Form W-9 may be checked if
the tendering stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding. If
the box in Part 3 is checked and the Certificate of Awaiting Taxpayer
Identification Number is completed, but the Depositary is not provided with the
TIN number within 60 days, the Depositary will withhold 31% of the payments made
thereafter until such time as a properly certified TIN is provided to the
Depositary.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE
HEREOF), TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER
AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY, MUST BE
RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE.
11
<PAGE>
IMPORTANT TAX INFORMATION
GENERAL. Under federal income tax law, a stockholder whose tendered Shares
are accepted for payment is required to provide the Depositary with such
stockholder's correct TIN on Substitute Form W-9 below. If such stockholder is
an individual, the TIN is the stockholder's social security number. If a
tendering stockholder is subject to backup withholding, the stockholder must
cross out item (2) in Part 3 of the Substitute Form W-9. If the Depositary is
not provided with the correct TIN, the stockholder may be subject to a $50
penalty imposed by the IRS. In addition, payments that are made to such
stockholder with respect to Shares purchased pursuant to the Offer may be
subject to backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to these backup withholding
and reporting requirements. In order for a noncorporate foreign stockholder to
qualify as an exempt recipient, that stockholder must complete and sign the main
signature form and a Form W-8, Certificate of Foreign Status, attesting to that
stockholder's exempt status. Such forms may be obtained from the Depositary.
Exempt stockholders, other than noncorporate foreign stockholders, should
furnish their TIN, write "Exempt" on the face of the Substitute Form W-9 below
and sign, date and return the Substitute Form W-9 to 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 stockholder or other payee. Backup withholding is not
an additional income tax. Rather, the federal income 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 upon
filing an income tax return.
PURPOSE OF SUBSTITUTE FORM W-9. To prevent backup withholding on payments
that are made to a stockholder or other payee with respect to Shares purchased
pursuant to the Offer, the stockholder is required to notify the Depositary of
the stockholder's correct TIN (or the TIN of any other payee) by completing the
form below certifying that the TIN provided on the Substitute Form W-9 is
correct (or that such stockholder is awaiting a TIN).
WHAT NUMBER TO GIVE THE DEPOSITARY. The stockholder is required to give the
Depositary the social security number or employer identification number of the
record owner of the Shares. If the Shares are registered in more than one name
or are not in the name of the actual owner, consult the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional guidelines on which number to report. If the tendering stockholder
has not been issued a TIN and has applied for a number or intends to apply for a
number in the near future, the stockholder should check the box in Part 3 of the
Substitute Form W-9 and complete the Certificate of Awaiting Taxpayer
Identification Number. If the Depositary is not provided with the TIN within 60
days, the Depositary will withhold 31% of all payments made thereafter until
such time as a properly certified TIN is provided to the Depositary.
12
<PAGE>
PAYER: THE FIRST NATIONAL BANK OF BOSTON, AS DEPOSITARY
<TABLE>
<C> <S> <C>
PART 1--PLEASE PROVIDE
SUBSTITUTE YOUR TIN IN THE BOX AT RIGHT TIN
FORM W-9 AND CERTIFY BY SIGNING AND Social Security Number
DATING BELOW or
Employer Identification
Number
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE NAME (Please Print) PART 2 For Payees exempt from
PAYER'S REQUEST FOR backup withholding, see the
TAXPAYER ADDRESS Important Tax Information above
IDENTIFICATION NUMBER (TIN) and Guidelines for
AND CERTIFICATION CITY STATE ZIP CODE Certification of Taxpayer
Identification Number on
Substitute Form W-9 enclosed
herewith and completed as
instructed herein.
Awaiting TIN / /
PART 3 -- CERTIFICATION--UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT (1) The number shown
on this form is my correct taxpayer identification number (or a TIN has not been issued to me
but I have mailed or delivered an application to receive a TIN or intend to do so in the near
future), (2) I am not subject to backup withholding either because I have not been notified
by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a
result of a failure to report all interest or dividends or the IRS has notified me that I am
no longer subject to backup withholding, and (3) all other information provided on this form
is true, correct and complete.
SIGNATURE DATE
You must cross out item (2) above if you have been notified by the IRS that you are currently
subject to backup withholding because of underreporting interest or dividends on your tax
return.
</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.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 2 OF THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me and either (1) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service center or Social security Administration Office or (2) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number by the time of payment, 31% of all
payments of the purchase price made to me thereafter will be withheld until I
provide a number.
SIGNATURE ____________________________ DATE ___________________________, 1996
13
<PAGE>
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
77 WATER STREET
NEW YORK, NEW YORK 10005
TELEPHONE: (212) 269-5550 (CALL COLLECT)
TELEPHONE: (800) 769-5414 (TOLL-FREE)
THE DEALER MANAGER FOR THE OFFER IS:
PAINEWEBBER INCORPORATED
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
TELEPHONE: (212) 713-1425 (CALL COLLECT)
TELEPHONE: (888) 255-9059 (TOLL-FREE)
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED SERIES A JUNIOR PARTICIPATING PREFERRED STOCK PURCHASE
RIGHTS)
OF
FLEETWOOD ENTERPRISES, INC.
PURSUANT TO ITS OFFER TO PURCHASE
DATED MAY 31, 1996
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, JUNE 27, 1996,
UNLESS THE OFFER IS EXTENDED.
This form, or a form substantially equivalent to this form, must be used to
accept the Offer (as defined below) if certificates for the shares of Common
Stock of Fleetwood Enterprises, Inc. (the "Company") are not immediately
available, if the procedure for book-entry transfer cannot be completed on a
timely basis, or if time will not permit all other documents required by the
Letter of Transmittal to be delivered to the Depositary on or prior to the
Expiration Date (as defined in the Offer to Purchase defined below). Such form
may be delivered by hand or transmitted by mail, or (for Eligible Institutions
only) by facsimile transmission, to the Depositary. See Section 2 of the Offer
to Purchase. THE ELIGIBLE INSTITUTION, WHICH COMPLETES THIS FORM, MUST
COMMUNICATE THE GUARANTEE TO THE DEPOSITARY AND MUST DELIVER THE LETTER OF
TRANSMITTAL AND CERTIFICATES FOR SHARES TO THE DEPOSITARY WITHIN THE TIME SHOWN
HEREIN. FAILURE TO DO SO COULD RESULT IN A FINANCIAL LOSS TO SUCH ELIGIBLE
INSTITUTION.
THE DEPOSITARY FOR THE OFFER IS:
THE FIRST NATIONAL BANK OF BOSTON
<TABLE>
<S> <C>
BY MAIL: BY FACSIMILE TRANSMISSION:
The First National Bank of Boston (For Eligible Institutions Only)
Shareholder Services Division (617) 575-2233
Post Office Box 1889
Mail Stop 45-02-53 Confirm by Telephone:
Boston, Massachusetts 02105 (617) 575-3400
BY OVERNIGHT DELIVERY: BY HAND DELIVERY:
The First National Bank of Boston Bank of Boston Trust
Corporate Agency & Reorganization 55 Broadway, 3rd Floor
150 Royall Street New York, New York 10006
Mail Stop 45-02-53
Canton, Massachusetts 02021
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN ONE LISTED ABOVE
WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION
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 Fleetwood Enterprises, Inc., a Delaware
corporation (the "Company"), at the price per share indicated below, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated May 31, 1996 (the "Offer to Purchase"), and the related
Letter of Transmittal (which together constitute the "Offer"), receipt of which
is hereby acknowledged, the number of shares of Common Stock, par value $1.00
per share (the "Shares") (including the associated Series A Junior Participating
Preferred Stock Purchase Rights (the "Rights") issued pursuant to the Rights
Agreement dated as of November 10, 1988, between the Company and The First
National Bank of Boston, as Rights Agent) of the Company listed below, pursuant
to the guaranteed delivery procedure set forth in Section 2 of the Offer to
Purchase. Unless the Rights are redeemed by the Company, a tender of Shares will
also constitute a tender of the associated Rights. Unless the context requires
otherwise, all references herein to the Shares shall include the associated
Rights.
<TABLE>
<S> <C>
Signature(s) Number of Shares
Name(s) of Record Holder(s) (Please Print) Certificate No(s) (if available)
If Shares will be tendered by book-entry
transfer
Address
Area Code and Telephone Number Name of Tendering Institution
Dated: , 1996
Account No. at (check one):
/ / The Depository Trust Company
/ / Philadelphia Depository Trust Company
</TABLE>
<PAGE>
<TABLE>
<S> <C>
PRICE (IN DOLLARS) PER SHARE
AT WHICH SHARES ARE BEING TENDERED
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF
NO BOX IS CHECKED (EXCEPT AS PROVIDED IN THE ODD LOTS
BOX BELOW), THERE IS NO VALID TENDER OF SHARES
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
/ / $27.00 / / $28.00 / / $29.00 / / $30.00 / / $31.00
/ / $27.50 / / $28.50 / / $29.50 / / $30.50
</TABLE>
<TABLE>
<S> <C>
CONDITIONAL TENDER ODD LOTS
UNLESS THIS BOX HAS BEEN COMPLETED AND A This section is to be completed ONLY if
MINIMUM SPECIFIED, THE TENDER WILL BE DEEMED Shares are being tendered by or on behalf of
UNCONDITIONAL (see Sections 2 and 13 of the persons owning beneficially, as of the close
Offer to Purchase). of business on May 30, 1996, and who continue
to own beneficially as of the Expiration
Date, an aggregate of fewer than 100 Shares.
Minimum number of Shares that must be The undersigned either (check one):
purchased, if any are purchased:
Shares / / was the beneficial owner as of the close
of business on May 30, 1996, and will
continue to be the beneficial owner as of
the Expiration Date, of an aggregate of
fewer than 100 Shares, all of which are
being tendered, or
/ / is an Eligible Institution (as defined in
Instruction 1 to the Letter of
Transmittal) that (i) is tendering, for
the beneficial owners thereof, Shares
with respect to which it is the record
owner, and (ii) believes, based upon
representations made to it by each such
beneficial owner, that such beneficial
owner owned beneficially as of the close
of business on May 30, 1996, and will
continue to own as of the Expiration
Date, an aggregate of fewer than 100
Shares, and is tendering all of such
Shares.
If you do not wish to specify a Purchase
Price, check the following box, in which case
you will be deemed to have tendered at the
Purchase Price determined by the Company in
accordance with the terms of the Offer
(persons checking this box need not indicate
the price per Share in the box entitled
"Price (In Dollars) Per Share at which Shares
Are Being Tendered" above.) / /
</TABLE>
<PAGE>
<TABLE>
<S> <C>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a member of a registered national securities exchange or
the National Association of Securities Dealers, Inc. or a commercial bank or trust company
having an office or correspondent in the United States which is a participant in an
approved Signature Guarantee Medallion Program, guarantees (a) that the above-named
person(s) has a net long position in the Shares being tendered within the meaning of Rule
14e-4 promulgated under the Securities Exchange Act of 1934, as amended, (b) that such
tender of Shares complies with Rule 14e-4 and (c) to deliver to the Depositary at one of
its addresses set forth above certificate(s) for the Shares tendered hereby, in proper
form for transfer, or a confirmation of the book-entry transfer of the Shares tendered
hereby into the Depositary's account at The Depository Trust Company or Philadelphia
Depository Trust Company, in each case together with a properly completed and duly
executed Letter(s) of Transmittal (or facsimile(s) thereof), with any required signature
guarantee(s) or an Agent's Message (as defined in the Offer to Purchase) in the case of a
book-entry transfer, and any other required documents, all within three New York Stock
Exchange trading days after the date hereof.
Name of Firm Authorized Signature
Address Name (Please Print)
City, State, Zip Code Title
Area Code and Telephone Number
Dated: , 1996
DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES MUST BE SEND WITH
THE LETTER OF TRANSMITTAL.
</TABLE>
<PAGE>
PAINEWEBBER INCORPORATED
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
OFFER TO PURCHASE FOR CASH
BY
FLEETWOOD ENTERPRISES, INC.
UP TO
11,400,000 SHARES OF ITS COMMON STOCK
(INCLUDING THE ASSOCIATED SERIES A JUNIOR PARTICIPATING PREFERRED STOCK PURCHASE
RIGHTS)
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, JUNE 27, 1996,
UNLESS THE OFFER IS EXTENDED.
May 31, 1996
To Brokers, Dealers, Commercial
Banks, Trust Companies and
Other Nominees:
In our capacity as Dealer Manager, we are enclosing the material listed
below relating to the offer of Fleetwood Enterprises, Inc., a Delaware
corporation (the "Company"), to purchase up to 11,400,000 shares of the Common
Stock of the Company, par value $1.00 per share (the "Shares") (including the
associated Series A Junior Participating Preferred Stock Purchase Rights (the
"Rights") issued pursuant to the Rights Agreement dated as of November 10, 1988,
between the Company and The First National Bank of Boston, as Rights Agent), at
a price, net to the sellers in cash, without interest thereon, not greater than
$31.00 nor less than $27.00 per Share, specified (in multiples of $.50) by
tendering stockholders, upon the terms and subject to the conditions set forth
in the Offer to Purchase, dated May 31, 1996 (the "Offer to Purchase"), and in
the related Letter of Transmittal (which together constitute the "Offer"). The
Company will determine a single per share price (not greater than $31.00 nor
less than $27.00 per Share) that it will pay for Shares validly tendered
pursuant to the Offer and not withdrawn (the "Purchase Price"), taking into
consideration the number of Shares so tendered and the prices specified by
tendering stockholders. The Company will select the lowest Purchase Price that
will enable it to purchase 11,400,000 Shares (or such lesser number of Shares as
are validly tendered and not withdrawn at prices not greater than $31.00 nor
less than $27.00 per Share) pursuant to the Offer. The Company will purchase all
Shares validly tendered at prices at or below the Purchase Price and not
withdrawn on or prior to the Expiration Date (as defined in Section 1 of the
Offer to Purchase), upon the terms and subject to the conditions of the Offer,
including the provisions relating to proration and conditional tenders described
in the Offer to Purchase. Unless the Rights are redeemed by the Company, a
tender of Shares will also constitute a tender of the associated Rights. Unless
the context requires otherwise, all references herein to the Shares shall
include the associated Rights.
The Purchase Price will be paid in cash, net to the seller, without interest
thereon, with respect to all Shares purchased. No separate consideration will be
paid for the Rights. Shares tendered at prices in excess of the Purchase Price,
Shares not purchased because of proration and Shares that were conditionally
tendered and not accepted will be returned.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. The Offer is, however, subject to other conditions. See Section 5 of
the Offer to Purchase.
We are asking you to contact 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. Please bring the Offer
<PAGE>
to their attention as promptly as possible. The Company will, upon request,
reimburse you for reasonable and customary handling and mailing expenses
incurred by you in forwarding any of the enclosed materials to your clients.
For your information and for forwarding to your clients, we are enclosing
the following documents:
1. The Offer to Purchase.
2. The Letter of Transmittal for your use and for the information of
your clients.
3. A letter to stockholders of the Company from John C. Crean, Chairman
of the Board and Chief Executive Officer of the Company.
4. The Notice of Guaranteed Delivery to be used to accept the Offer if
the Shares and all other required documents cannot be delivered to
the Depositary by the Expiration Date or if the procedures for book-entry
transfer cannot be completed on a timely basis.
5. 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 nominee,
with space for obtaining such clients' instructions with regard to the
Offer.
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9 providing
information relating to backup federal income tax withholding.
7. A return envelope addressed to The First National Bank of Boston, the
Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON THURSDAY, JUNE 27, 1996, UNLESS THE OFFER IS EXTENDED.
The Company will not pay any fees or commissions to any broker, dealer or
other person for soliciting tenders of Shares pursuant to the Offer (other than
the Dealer Manager, as described in the Offer to Purchase). The Company will pay
all stock transfer taxes applicable to its purchase of Shares pursuant to the
Offer, subject to Instruction 7 of the Letter of Transmittal.
In order for Shares to be validly tendered pursuant to the Offer, (i) a duly
executed and properly completed Letter of Transmittal (or a facsimile thereof)
together with any required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase) in connection with a book-entry delivery of
Shares, and any other documents required by the Letter of Transmittal, must be
received by the Depositary on or prior to the Expiration Date, and (ii) either
Share certificates representing tendered Shares must be received by the
Depositary or such Shares must be tendered by book-entry transfer into the
Depositary's account maintained at one of the Book-Entry Transfer Facilities (as
described in the Offer to Purchase), and confirmation of the book-entry transfer
must be received by the Depositary, all in accordance with the instructions set
forth in the Letter of Transmittal and Offer to Purchase.
If a stockholder desires to tender Shares pursuant to the Offer and such
stockholder's Share certificates are not immediately available or such
stockholder cannot deliver the Share certificates and all other required
documents to the Depositary on or prior to the Expiration Date, or such
stockholder cannot complete the procedure for delivery by book-entry transfer on
a timely basis, such Shares may nevertheless be tendered by following the
guaranteed delivery procedure specified in Section 2 of the Offer to Purchase.
As described in the Offer to Purchase, if more than 11,400,000 Shares have
been validly tendered at or below the Purchase Price and not withdrawn on or
prior to the Expiration Date, the Company will purchase Shares in the following
order of priority: (i) first, all Shares validly tendered at or below
2
<PAGE>
the Purchase Price and not withdrawn on or prior to the Expiration Date by any
stockholder who owned beneficially, as of the close of business on May 30, 1996,
and continues to own beneficially as of the Expiration Date, an aggregate of
fewer than 100 Shares and who validly tenders all of such Shares (partial and
conditional tenders will not qualify for this preference) and completes the box
captioned "Odd Lots" on the Letter of Transmittal and, if applicable, the Notice
of Guaranteed Delivery; and (ii) then, after purchase of all the foregoing
Shares, subject to the conditional tender provisions described in Section 2 of
the Offer to Purchase, all other Shares validly tendered at or below the
Purchase Price and not withdrawn on or prior to the Expiration Date on a pro
rata basis, if necessary (with appropriate adjustments to avoid purchases of
fractional Shares).
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE MAKING OF THE OFFER.
HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
TO ANY STOCKHOLDER AS TO WHETHER TO TENDER ALL, OR ANY, SHARES. EACH STOCKHOLDER
MUST MAKE SUCH STOCKHOLDER'S OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF
SO, HOW MANY SHARES TO TENDER AND AT WHAT PRICE. THE COMPANY HAS BEEN ADVISED
THAT CERTAIN DIRECTORS AND OFFICERS OF THE COMPANY INTEND TO TENDER SHARES
PURSUANT TO THE OFFER, WHICH SHARES IN THE AGGREGATE CONSTITUTE APPROXIMATELY
350,000 SHARES OR APPROXIMATELY .77% OF THE SHARES OUTSTANDING AS OF MAY 30,
1996.
Any questions or requests for assistance or additional copies of the
enclosed materials may be directed to the Information Agent or the Dealer
Manager at their respective addresses and telephone numbers set forth on the
back cover of the enclosed Offer to Purchase.
Very truly yours,
PaineWebber Incorporated
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
THE AGENT OF THE COMPANY, THE DEALER MANAGER, THE INFORMATION AGENT OR THE
DEPOSITARY, 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 HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE>
OFFER TO PURCHASE FOR CASH
BY
FLEETWOOD ENTERPRISES, INC.
UP TO
11,400,000 SHARES OF ITS COMMON STOCK
(INCLUDING THE ASSOCIATED SERIES A JUNIOR PARTICIPATING PREFERRED STOCK PURCHASE
RIGHTS)
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, JUNE 27, 1996,
UNLESS THE OFFER IS EXTENDED
May 31, 1996
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated May 31,
1996 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") setting forth an offer by Fleetwood
Enterprises, Inc., a Delaware corporation (the "Company") to purchase up to
11,400,000 shares of the Common Stock of the Company, par value $1.00 per share
(the "Shares") (including the associated Series A Junior Participating Preferred
Stock Purchase Rights (the "Rights") issued pursuant to the Rights Agreement
dated as of November 10, 1988, between the Company and The First National Bank
of Boston, as Rights Agent), at a price, net to the sellers in cash, without
interest thereon, not greater than $31.00 nor less than $27.00 per Share,
specified (in multiples of $.50) by tendering stockholders, upon the terms and
subject to the conditions of the Offer. The Company will determine a single per
Share price (not greater than $31.00 nor less than $27.00 per Share) that it
will pay for the Shares validly tendered pursuant to the Offer and not withdrawn
(the "Purchase Price"), taking into consideration the number of Shares so
tendered and the prices specified by tendering stockholders. The Company will
select the lowest Purchase Price that will enable it to purchase 11,400,000
Shares (or such lesser number of Shares as are validly tendered and not
withdrawn at prices not greater than $31.00 nor less than $27.00 per Share)
pursuant to the Offer. The Company will purchase all Shares validly tendered at
prices at or below the Purchase Price and not withdrawn on or prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase), upon the
terms and subject to the conditions of the Offer, including the provisions
thereof relating to proration and conditional tenders described in the Offer to
Purchase. Unless the Rights are redeemed by the Company, a tender of Shares will
also constitute a tender of the associated Rights. Unless the context requires
otherwise, all references herein to the Shares shall include the associated
Rights.
WE ARE THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT. A TENDER OF
SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR
INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION
ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT.
WE REQUEST INSTRUCTIONS AS TO WHETHER YOU WISH US TO TENDER 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.
Your attention is directed to the following:
1. You may tender Shares at prices (in multiples of $.50), net to you
in cash, without interest thereon, not greater than $31.00 nor less than
$27.00 per Share, as indicated in the attached instruction form.
2. The Offer is for up to 11,400,000 Shares, constituting approximately
25.0% of the total Shares outstanding as of May 30, 1996, or approximately
23.6% of the Shares on a fully diluted basis (assuming the exercise of all
outstanding stock options) outstanding as of May 30, 1996. Although it has
no present intention of so doing, the Company reserves the right to purchase
more than 11,400,000 Shares pursuant to the Offer. The Offer is not
conditioned upon any minimum number of Shares being tendered. The Offer is,
however, subject to certain other conditions set forth in the Offer. See
Section 5 of the Offer to Purchase.
<PAGE>
3. The Offer, proration period and withdrawal rights will expire at
12:00 Midnight, New York City time, on Thursday, June 27, 1996, unless the
Offer is extended. Your instructions to us should be forwarded to us in
ample time to permit us to submit a tender on your behalf. If you would like
to withdraw your Shares that we have tendered, you can withdraw them so long
as the Offer remains open or any time after the expiration of forty business
days from the commencement of the Offer if your shares have not been
accepted for payment.
4. As described in the Offer to Purchase, if more than 11,400,000
Shares have been validly tendered at or below the Purchase Price and not
withdrawn on or prior to the Expiration Date, the Company will purchase
Shares in the following order of priority:
(i) first, all Shares validly tendered at or below the Purchase Price
and not withdrawn on or prior to the Expiration Date by any stockholder
who owned beneficially as of the close of business on May 30, 1996, and
continues to own beneficially as of the Expiration Date, an aggregate of
fewer than 100 Shares and who validly tenders all of such Shares (partial
and conditional tenders will not qualify for this preference) and
completes the box captioned "Odd Lots" on the Letter of Transmittal and,
if applicable, the Notice of Guaranteed Delivery; and
(ii) then, after purchase of all the foregoing Shares, subject to the
conditional tender provisions described in Section 2 of the Offer to
Purchase, all other Shares validly tendered at or below the Purchase
Price and not withdrawn on or prior to the Expiration Date on a pro rata
basis, if necessary (with appropriate adjustments to avoid purchases of
fractional Shares). See Section 1 of the Offer to Purchase for a
discussion of proration.
5. Tendering stockholders will not be obligated to pay any brokerage
commissions or solicitation fees on the Company's purchase of Shares in the
Offer. Any stock transfer taxes applicable to the sales of Shares to the
Company pursuant to the Offer will be paid by the Company, except as
otherwise provided in Instruction 7 of the Letter of Transmittal.
6. If you wish to tender portions of your Shares at different prices
you must complete a separate Instruction Form for each price at which you
wish to tender each portion of your Shares. We must submit separate Letters
of Transmittal on your behalf for each price you will accept. The same
Shares may not be tendered at more than one price.
7. If you owned beneficially as of the close of business on May 30,
1996, and continue to own beneficially as of the Expiration Date, an
aggregate of fewer than 100 Shares, and you instruct us to tender at or
below the Purchase Price on your behalf all such Shares on or prior to the
Expiration Date and check the box captioned "Odd Lots" in the instruction
form, all such Shares will be accepted for purchase before proration, if
any, of the purchase of other tendered Shares.
If you wish to have us tender any or all of your Shares held by us for your
account upon the terms and subject to the conditions set forth in the Offer,
please so instruct us by completing, executing, detaching and returning to us
the instruction form on the detachable part hereof. An envelope to return your
instructions to us is enclosed. If you authorize tender of your Shares, all such
Shares will be tendered unless otherwise specified on the detachable part
hereof. Your instructions should be forwarded to us in ample time to permit us
to submit a tender on your behalf by the expiration of the Offer.
A tendering stockholder may condition the tender of Shares upon the purchase
by the Company of a specified minimum number of Shares tendered, all as
described in Section 2 of the Offer to Purchase. Unless such specified minimum
is purchased by the Company pursuant to the terms of the Offer to Purchase and
the related Letter of Transmittal, none of the Shares tendered by the
stockholder will be purchased. If you wish us to condition your tender upon the
purchase of a specified minimum number of Shares, please complete the box
entitled "Conditional Tender" on the instruction form. It is the tendering
stockholder's responsibility to calculate such minimum number of Shares, and you
are urged to consult your own tax advisor.
2
<PAGE>
The Offer is being made to all holders of Shares. The Company is not aware
of any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to a valid state statute. If the Company becomes aware
of any valid state statute prohibiting the making of the Offer, the Company will
make a good faith effort to comply with such statute. If, after such good faith
effort, the Company cannot comply with such statute, the Offer will not be made
to, nor will tenders be accepted from or on behalf of, holders of Shares in such
state. In those jurisdictions whose securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer shall be deemed
to be made on behalf of the Company by the Dealer Manager or one or more
registered brokers or dealers licensed under the laws of such jurisdictions.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE MAKING OF THE OFFER.
HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
TO ANY STOCKHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. EACH STOCKHOLDER
MUST MAKE SUCH STOCKHOLDER'S OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF
SO, HOW MANY SHARES TO TENDER AND AT WHAT PRICE. THE COMPANY HAS BEEN ADVISED
THAT CERTAIN DIRECTORS AND OFFICERS OF THE COMPANY INTEND TO TENDER SHARES
PURSUANT TO THE OFFER, WHICH SHARES IN THE AGGREGATE CONSTITUTE APPROXIMATELY
350,000 SHARES OR APPROXIMATELY .77% OF THE SHARES OUTSTANDING AS OF MAY 30,
1996.
3
<PAGE>
INSTRUCTIONS
WITH RESPECT TO OFFER TO PURCHASE FOR CASH
BY
FLEETWOOD ENTERPRISES, INC.
UP TO 11,400,000 SHARES OF ITS COMMON STOCK
(INCLUDING THE ASSOCIATED SERIES A JUNIOR PARTICIPATING PREFERRED STOCK PURCHASE
RIGHTS)
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase, dated May 31, 1996, and the related Letter of Transmittal (which
together constitute the "Offer") in connection with the Offer by Fleetwood
Enterprises, Inc. (the "Company") to purchase up to 11,400,000 shares of the
Common Stock of the Company, par value $1.00 per share (the "Shares") (including
the associated Series A Junior Participating Preferred Stock Purchase Rights
(the "Rights") issued pursuant to the Rights Agreement dated as of November 10,
1988, between the Company and The First National Bank of Boston, as Rights
Agent), at a price, net to the undersigned in cash, without interest thereon,
not greater than $31.00 nor less than $27.00 per Share, specified by the
undersigned, upon the terms and subject to the conditions of the Offer. Unless
the Rights are redeemed by the Company, a tender of Shares will also constitute
a tender of the associated Rights. Unless the context requires otherwise, all
references herein to the Shares shall include the associated Rights.
This will instruct you to tender to the Company the number of Shares
indicated below (or, if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, at the price per Share indicated
below, upon the terms and subject to the conditions of the Offer.
CONDITIONAL TENDER
By completing this box, the undersigned conditions the tender authorized
hereby on the following minimum number of Shares being purchased if any are
purchased:
______________ SHARES
Unless this box is completed, the tender authorized hereby will be made
unconditionally.
PRICE (IN DOLLARS) PER SHARE
AT WHICH SHARES ARE BEING TENDERED
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR
IF NO BOX IS CHECKED (EXCEPT AS PROVIDED UNDER "ODD LOTS" BELOW),
THERE IS NO VALID TENDER OF SHARES.
<TABLE>
<S> <C> <C> <C> <C>
/ / $27.00 / / $28.00 / / $29.00 / / $30.00 / / $31.00
/ / $27.50 / / $28.50 / / $29.50 / / $30.50
</TABLE>
4
<PAGE>
ODD LOTS
/ / By checking this box, the undersigned represents that the undersigned owned
beneficially as of the close of business on May 30, 1996, and continues to
own beneficially as of the Expiration Date, an aggregate of fewer than 100
Shares, and is tendering all of such Shares.
If you do not wish to specify a purchase price, check the following box in
which case you will be deemed to have tendered at the Purchase Price
determined by the Company in accordance with the terms of the Offer (persons
checking this box need not indicate the price per Share in the box entitled
"Price (In Dollars) Per Share At Which Shares Are Being Tendered" above.) / /
Number of Shares to be Tendered:
Shares: ________*
Dated: _________ __, 1996
SIGN HERE
--------------------------------------
Signature(s)
--------------------------------------
Printed Name
--------------------------------------
--------------------------------------
Address
--------------------------------------
Area Code and Telephone Number
--------------------------------------
Social Security or Taxpayer ID No.
- ------------------------
* Unless otherwise indicated, it will
be assumed that all Shares held by
us for your account are to be
tendered.
5
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
SECTION REFERENCES ARE TO THE INTERNAL REVENUE CODE.
PURPOSE OF FORM. -- A person who is required to file an information return with
the IRS must obtain your correct TIN to report income paid to you, real estate
transactions, mortgage interest you paid, the acquisition or abandonment of
secured property, or contributions you made to an IRA. Use Form W-9 to furnish
your correct TIN to the requester (the person asking you to furnish your TIN)
and, when applicable, (l) to certify that the TIN you are furnishing is correct
(or that you are waiting for a number to be issued), (2) to certify that you are
not subject to backup withholding, and (3) to claim exemption from backup
withholding if you are an exempt payee. Furnishing your correct TIN and making
the appropriate certifications will prevent certain payments from being subject
to backup withholding.
Note: IF A REQUESTER GIVES YOU A FORM OTHER THAN A W-9 TO REQUEST YOUR TIN, YOU
MUST USE THE REQUESTER'S FORM.
HOW TO OBTAIN A TIN. -- If you do not have a TIN, apply for one immediately. To
apply, get Form SS-5, Application for a Social Security Card (for individuals),
from your local office of the Social Security Administration, or Form SS-4,
Application for Employer Identification Number (for businesses and all other
entities), from your local IRS office.
To complete Form W-9 if you do not have a TIN, write "Applied for" in the
space for the TIN in Part I (or check box 2 of Substitute Form W-9), sign and
date the form, and give it to the requester. Generally, you must obtain a TIN
and furnish it to the requester by the time of payment. If the requester does
not receive your TIN by the time of payment, backup withholding, if applicable,
will begin and continue until you furnish your TIN to the requester.
Note: WRITING "APPLIED FOR" (OR CHECKING BOX 2 OF THE SUBSTITUTE FORM W-9) ON
THE FORM MEANS THAT YOU HAVE ALREADY APPLIED FOR A TIN OR THAT YOU INTEND TO
APPLY FOR ONE IN THE NEAR FUTURE.
As soon as you receive your TIN, complete another Form W-9, include your
TIN, sign and date the form, and give it to the requester.
WHAT IS BACKUP WITHHOLDING? -- Persons making certain payments to you after 1992
are required to withhold and pay to the IRS 31% of such payments under certain
conditions. This is called "backup withholding." Payments that could be subject
to backup withholding include interest, dividends, broker and barter exchange
transactions, rents, royalties, nonemployee compensation, and certain payments
from fishing boat operators, but do not include real estate transactions.
If you give the requester your correct TIN, make the appropriate
certifications, and report all your taxable interest and dividends on your tax
return, your payments will not be subject to backup withholding. Payments you
receive will be subject to backup withholding if:
(1) You do not furnish your TIN to the requester, or
(2) The IRS notifies the requester that you furnished an incorrect TIN,
or
(3) You are notified by the IRS that you are subject to backup
withholding because you failed to report all your interest and dividends on your
tax return (for reportable interest and dividends only), or
(4) You do not certify to the requester that you are not subject to
backup withholding under 3 above (for reportable interest and dividend accounts
opened after 1983 only), or
(5) You do not certify your TIN. This applies only to reportable interest,
dividend, broker, or barter exchange accounts opened after 1983, or broker
accounts considered inactive in 1983.
Except as explained in 5 above, other reportable payments are subject to
backup withholding only if 1 or 2 above applies. Certain payees and payments are
exempt from backup withholding and information reporting. See Payees and
Payments Exempt From Backup Withholding, below, and Exempt Payees and Payments
under Specific Instructions, below, if you are an exempt payee.
PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING. -- The following is a list
of payees exempt from backup withholding and for which no information reporting
is required. For interest and dividends, all listed payees are exempt except
item (9). For broker transactions, payees listed in (1) through (13) and a
person registered under the Investment Advisers Act of 1940 who regularly acts
as a broker are exempt. Payments subject to reporting under sections 6041 and
6041A are generally exempt from backup withholding only if made to payees
described in items (l) through (7), except a corporation that provides medical
and health care services or bills and collects payments for such services is not
exempt from backup withholding or information reporting. Only payees described
in items (2) through (6) are exempt from backup withholding for barter exchange
transactions, patronage dividends, and payments by certain fishing boat
operators.
(l) A corporation.
(2) An organization exempt from tax under section 501(a), or an IRA,
or a custodial account under section 403(b)(7).
(3) The United States or any of its agencies or instrumentalities.
(4) A state, the District of Columbia, a possession of the United States,
or any of their political subdivisions or instrumentalities.
(5) A foreign government or any of its political subdivisions, agencies,
or instrumentalities.
(6) An international organization or any of its agencies or
instrumentalities.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the
United States or a possession of the United States.
(9) A futures commission merchant registered with the Commodity
Futures Trading Commission.
(10)A real estate investment trust.
(11)An entity registered at all times during the tax year under the
Investment Company Act of 1940.
(12)A common trust fund operated by a bank under section 584(a).
(13)A financial institution.
(14)A middleman known in the investment community as a nominee or
listed in the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List.
(15)A trust exempt from tax under section 664 or described in
section 4947.
Payments of dividends and patronage dividends generally not subject to
backup withholding include the following:
- - Payments to nonresident aliens subject to withholding under section 1441.
- - Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident partner.
- - Payments of patronage dividends not paid in money.
- - Payments made by certain foreign organizations.
Payments of interest generally not subject to backup withholding include the
following:
- - Payments of interest on obligations issued by individuals.
Note: YOU MAY BE SUBJECT TO BACKUP WITHHOLDING IF THIS INTEREST IS $600 OR MORE
AND IS PAID IN THE COURSE OF THE PAYER'S TRADE OR BUSINESS AND YOU HAVE NOT
PROVIDED YOUR CORRECT TIN TO THE PAYER.
- - Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- - Payments described in section 6049(b) (5) to nonresident aliens.
- - Payments on tax-free covenant bonds under section 1451.
- - Payments made by certain foreign organizations.
- - Mortgage interest paid by you.
Payments that are not subject to information reporting are also not subject
to backup withholding. For details, see sections 6041, 6041A(a), 6042, 6044,
6045, 6049, 6050A, and 6050N, and their regulations.
PENALTIES
FAILURE TO FURNISH TIN. -- If you fail to furnish your correct TIN to a
requester, you are subject to a penalty of $50 for each such failure unless your
failure is due to reasonable cause and not to willful neglect.
CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you make
a false statement with no reasonable basis that results in no backup
withholding, you are subject to a $500 penalty.
CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
MISUSE OF TINS. -- If the requester discloses or uses TINs in violation of
Federal law, the requester may be subject to civil and criminal penalties.
<PAGE>
SPECIFIC INSTRUCTIONS
NAME. -- If you are an individual, you must generally provide the name shown on
your social security card. However, if you have changed your last name, for
instance, due to marriage, without informing the Social Security Administration
of the name change, please enter your first name, the last name shown on your
social security card, and your new last name.
If you are a sole proprietor, you must furnish your individual name and
either your SSN or EIN. You may also enter your business name or "doing business
as" name on the business name line. Enter your name(s) as shown on your social
security card and/or as it was used to apply for your EIN on Form SS-4.
SIGNING THE CERTIFICATION.
(1) INTEREST, DIVIDEND, AND BARTER EXCHANGE ACCOUNTS OPENED BEFORE 1984 AND
BROKER ACCOUNTS CONSIDERED ACTIVE DURING 1983. -- You are required to furnish
your correct TIN, but you are not required to sign the certification.
(2) INTEREST, DIVIDEND, BROKER, AND BARTER EXCHANGE ACCOUNTS OPENED AFTER 1983
AND BROKER ACCOUNTS CONSIDERED INACTIVE DURING 1983. -- You must sign the
certification or backup withholding will apply. If you are subject to backup
withholding and you are merely providing your correct TIN to the requester, you
must cross out item 2 in the certification before signing the form.
(3) REAL ESTATE TRANSACTIONS. -- You must sign the certification. You may cross
out item 2 of the certification.
(4) OTHER PAYMENTS. -- You are required to furnish your correct TIN, but you
are not required to sign the certification unless you have been notified of an
incorrect TIN. Other payments include payments made in the course of the
requester's trade or business for rents, royalties, goods (other than bills for
merchandise), medical and health care services, payments to a nonemployee for
services (including attorney and accounting fees), and payments to certain
fishing boat crew members.
(5) MORTGAGE INTEREST PAID BY YOU, ACQUISITION OR ABANDONMENT OF SECURED
PROPERTY, OR IRA CONTRIBUTIONS. -- You are required to furnish your correct TIN,
but you are not required to sign the certification.
(6) EXEMPT PAYEES AND PAYMENTS. -- If you are exempt from backup withholding,
you should complete this form to avoid possible erroneous backup withholding.
Enter your correct TIN in Part I, write "EXEMPT" in the block in Part II, and
sign and date the form. If you are a nonresident alien or foreign entity not
subject to backup withholding, give the requester a complete Form W-8,
Certificate of Foreign Status.
(7) TIN "APPLIED FOR." -- Follow the instructions under How To Obtain a TIN, on
page 1, and sign and date this form.
SIGNATURE. -- For a joint account, only the person whose TIN is shown in Part I
should sign.
PRIVACY ACT NOTICE. -- Section 6109 requires you to furnish your correct TIN to
persons who must file information returns with the IRS to report interest,
dividends, and certain other income paid to you, mortgage interest you paid, the
acquisition or abandonment of secured property, or contributions you made to an
IRA. The IRS uses the numbers for identification purposes and to help verify the
accuracy of your tax return. You must provide your TIN whether or not you are
required to file a tax return. Payers must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish a
TIN to a payer. Certain penalties may also apply.
WHAT NAME AND NUMBER TO GIVE THE REQUESTER
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------
FOR THIS TYPE OF ACCOUNT GIVE NAME AND
SOCIAL SECURITY
NUMBER OF:
- -------------------------------------------------------------------------
1. Individual The individual
2. Two or more individuals (joint The actual owner of the
account) account, or, if combined
funds, the first individual on
the account(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. a. The usual revocable savings The grantor-trustee(1)
trust (grantor is also
trustee)
b. The so-called trust account The actual owner(1)
that is not a legal or
valid trust under state law
5. Sole proprietorship The owner(3)
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
GIVE NAME AND
FOR THIS TYPE OF ACCOUNT EMPLOYER
IDENTIFICATION
NUMBER OF:
- -------------------------------------------------------------------------
6. A valid trust, estate, or Legal entity(4)
pension trust
7. Corporate The organization
8. Association, club, religious, The organization
charitable, educational, or
other tax-exempt organization
9. Partnership The partnership
10. A broker or registered nominee The broker or nominee
11. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a state
or local government, school
district or prison) that
receives agriculture program
payments
- -------------------------------------------------------------------------
</TABLE>
(1)List first and circle the name of the person whose number you furnish.
(2)Circle the minor's name and furnish the minor's Social Security Number.
(3)Show your individual name. You may also enter your business name. You may use
your Social Security Number or Employer Identification Number.
(4)List first and circle the name of the legal trust, estate or pension trust.
(Do not furnish the TIN of the personal representative or trustee unless the
legal entity itself is not designated in the account title.)
Note: IF NO NAME IS CIRCLED WHEN THERE IS MORE THAN ONE NAME, THE NUMBER WILL BE
CONSIDERED TO BE THAT OF THE FIRST NAME LISTED.
2
<PAGE>
[COMPANY LETTERHEAD]
May 31, 1996
DEAR STOCKHOLDERS:
Fleetwood Enterprises, Inc. (the "Company") is offering to purchase up to
11,400,000 shares of its Common Stock (including the associated Series A Junior
Participating Preferred Stock Purchase Rights (the "Rights"); which constituted
approximately 25.0% of the shares outstanding as of May 30, 1996), at a price,
net to the sellers in cash, without interest thereon, not greater than $31.00
nor less than $27.00 (the "Offer"), through a procedure known as a "Dutch
Auction." This procedure allows you to select the price within the stated price
range at which you are willing to sell your shares to the Company. Based upon
the number of shares tendered and the prices specified by the tendering
stockholders, the Company will determine the single per share price within that
price range that will allow it to purchase 11,400,000 shares (or such lesser
number of shares that are properly tendered). All of the shares that are
properly tendered at prices at or below that purchase price (and are not
withdrawn) will, subject to possible proration, conditional tenders and
provisions relating to the tender of "odd lots," be purchased for cash, at that
purchase price, net to the selling stockholder, without interest thereon. All
other shares that have been tendered and not purchased will be returned to the
stockholder. Enclosed for your consideration are an Offer to Purchase, a related
Letter of Transmittal and other important documents containing detailed
information concerning this Offer. WE URGE YOU TO READ ALL OF THE ENCLOSED
INFORMATION CAREFULLY BEFORE DECIDING WHETHER YOU WISH TO TENDER SHARES OR
REFRAIN FROM TENDERING SHARES.
In reviewing the enclosed material, please bear in mind the following:
- The Offer expires at 12:00 midnight, New York City time, on Thursday, June
27, 1996, unless extended.
- The Offer is not conditioned upon any minimum number of shares being
tendered to the Company. The Offer is, however, subject to certain other
conditions, which are specified in the enclosed material.
- The procedures for effecting a valid tender are described in the enclosed
material. Strict compliance with those procedures is essential.
- Requests for assistance may be directed to the Information Agent or the
Dealer Manager, whose respective addresses and telephone numbers are set
forth on the back of the enclosed Letter of Transmittal and the enclosed
Offer to Purchase. Requests for additional copies of the enclosed material
may be directed to the Information Agent. You may also contact your local
broker, dealer, commercial bank or trust company for assistance in
connection with the Offer.
- Tenders of shares constitute a tender of the associated Rights; no
separate consideration will be paid for the Rights.
The Board of Directors of the Company has approved the making of the Offer.
However, neither the Company nor its Board of Directors makes any recommendation
to any stockholder as to whether to tender all, or any, shares. You should make
your own decision as to whether to tender shares and, if so, how many shares to
tender and at what price. The Company has been advised that certain directors
and officers of the Company intend to tender shares pursuant to the Offer, which
shares in the aggregate constitute approximately 350,000 shares, or
approximately .77% of the shares outstanding as of May 30, 1996.
We encourage you to give the enclosed material your careful and prompt
consideration.
Very truly yours,
John C. Crean
Chairman of the Board
and Chief Executive Officer
<PAGE>
FOR IMMEDIATE RELEASE
FLEETWOOD ENTERPRISES, INC. ANNOUNCES TENDER OFFER
FOR SHARES OF ITS COMMON STOCK
RIVERSIDE, CALIFORNIA, May 30, 1996 -- Fleetwood Enterprises, Inc., the
nations's leading producer of manufactured housing and recreational vehicles,
announced today that it will commence a Dutch Auction tender offer to purchase
for cash up to 11,400,000 shares, or approximately 25% of its issued and
outstanding Common Stock. The tender offer begins tomorrow, Friday, May 31, and
will expire, unless extended, at 12:00 midnight (Eastern time) on Thursday, June
27, 1996.
Terms of the Dutch Auction tender offer, which are described more fully in
the Offer to Purchase and Letter of Transmittal pursuant to which the tender
offer is being made, include a purchase price not greater than $31.00 nor less
than $27.00 per share, net to the seller in cash, without interest thereon. The
Company has retained PaineWebber Incorporated to act as its financial advisor
and dealer manager for the tender offer.
In a Dutch Auction, the Company sets a price range, and holders have an
opportunity to specify prices within that range at which they are willing to
sell shares. After the expiration of the tender offer, the Company will
determine a single per share price to be paid for each share purchased, taking
into consideration the number of shares tendered and the prices specified by
tendering stockholders. If the tender offer is oversubscribed, only shares
validly tendered at or below the purchase price determined by the Company will
be eligible for proration. The Company reserves the right to purchase more than
11,400,000 shares pursuant to the tender offer, but does not currently plan to
do so. The tender offer is not conditioned on any minimum number of shares being
tendered.
On May 29, 1996, the last full New York Stock Exchange trading day prior to
the announcement of the tender offer, the closing price the Common Stock was
$27.625 per share. As of May 29, 1996, the Company had issued and outstanding
45,640,442 shares of Common Stock. The Offer to Purchase, Letter of Transmittal
and related documents will be mailed to stockholders of record of its Common
Stock and will also be made available for distribution to beneficial owners of
Common Stock.
Chairman of the Board John C. Crean commented on the Offer saying, "We
believe this is a good investment of the Company's excess cash that will enhance
shareholder value. With proceeds from the sale of Fleetwood Credit Corp. and
other available cash, the Company has liquid resources well beyond what is
needed to operate its businesses. With no significant acquisitions on the
horizon, we feel the share repurchase is the best investment available to the
Company at this time. It is our belief that the purchase of undervalued shares
should result in improved returns on capital and higher earnings per share over
the long term," Mr. Crean concluded.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FLEETWOOD ENTERPRISES, INC.
$80,000,000
SENIOR FIXED AND FLOATING RATE NOTES
NOTE AGREEMENT
Dated as of April 22, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
(Not Part of Agreement)
PAGE
----
1. AUTHORIZATION OF ISSUE OF NOTES . . . . . . . . . . . . . . 1
2. PURCHASE AND SALE OF NOTES . . . . . . . . . . . . . . . . . 2
3. CONDITIONS OF CLOSING . . . . . . . . . . . . . . . . . . . 3
4. PREPAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . 4
5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . 6
6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . 10
7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . 14
8. REPRESENTATIONS, COVENANTS
AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . 17
9. REPRESENTATIONS OF THE PURCHASERS . . . . . . . . . . . . . 21
10. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 21
11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 30
INFORMATION SCHEDULE
EXHIBIT A -- FORM OF FIXED RATE NOTE
EXHIBIT B -- FORM OF SERIES A FLOATING RATE NOTE
EXHIBIT C -- FORM OF SERIES B FLOATING RATE NOTE
EXHIBIT D -- FORM OF OPINION OF COMPANY'S COUNSEL
EXHIBIT E -- LIST OF AGREEMENTS RESTRICTING INDEBTEDNESS
EXHIBIT F -- LIST OF SUBSIDIARIES
EXHIBIT G -- FORM OF OFFICER'S CERTIFICATE, SECRETARY'S
CERTIFICATE AND INCUMBENCY CERTIFICATE TO
BE DELIVERED ON DATE OF CLOSING
EXHIBIT H -- FORM OF SUBORDINATION PROVISIONS
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FLEETWOOD ENTERPRISES, INC.
3125 MYERS STREET, P.O. BOX 7638
RIVERSIDE, CALIFORNIA 92523
As of April 22, 1996
The Prudential Insurance Company of America
c/o The Prudential Capital Group
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102-4069
Ladies and Gentlemen:
The undersigned, Fleetwood Enterprises, Inc., a Delaware corporation
(the "COMPANY"), hereby agrees with you ("YOU" or the "PURCHASERS") under this
Note Agreement dated as of April 22, 1996 (this "AGREEMENT") as follows:
1. AUTHORIZATION OF ISSUE OF NOTES. The Company will authorize the
issue of its senior unsecured promissory notes in the aggregate principal amount
of $80,000,000, as follows:
(a) the Company will issue its 8.65% Senior Fixed Rate Notes Due
August 14, 1996 in the aggregate principal amount of $25,000,000, to bear
interest on the unpaid balance thereof from the date thereof until the
principal thereof shall become due and payable at the rate set forth
therein, and substantially in the Form of EXHIBIT A attached hereto (the
"FIXED RATE NOTES");
(b) the Company will issue its Series A Senior Floating Rate Notes
Due November 30, 2001 in the aggregate principal amount of $30,000,000, to
bear interest on the unpaid balance thereof from the date thereof until the
principal thereof shall become due and payable at the rates set forth
therein, and substantially in the form of EXHIBIT B attached hereto (the
"SERIES A FLOATING RATE NOTES"); and
(c) the Company will issue its Series B Senior Floating Rate Notes
Due June 1, 2005 in the aggregate principal amount of $25,000,000, to bear
interest on the unpaid balance thereof from the date thereof until the
principal thereof shall become due and payable at the rates set forth
therein, and substantially in the form of EXHIBIT C attached hereto (the
"SERIES B FLOATING RATE NOTES").
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The term "NOTE" or "NOTES" as used herein shall include each Note delivered
pursuant to this Agreement and each Note delivered in substitution or exchange
for any such Note pursuant hereto. Such Notes shall be issued in three Series,
Fixed Rate, Series A Floating Rate and Series B Floating Rate (each a "SERIES"),
each Fixed Rate Note and all Notes delivered in substitution or exchange
therefor being Fixed Rate Notes, each Series A Floating Rate Note and all Notes
delivered in substitution or exchange therefor being Series A Floating Rate
Notes, each Series B Floating Rate Note and all Notes delivered in substitution
or exchange therefor being Series B Floating Rate Notes.
2. PURCHASE AND SALE OF NOTES. The Company hereby agrees to sell to
you, and subject to the terms and conditions herein, you agree to purchase from
the Company, Notes in the aggregate principal amount of $80,000,000 at 100% of
such aggregate principal amount. The Company will deliver to you at the offices
of O'Melveny & Myers, 400 S. Hope Street, Los Angeles, California 90071-2899 one
or more Notes registered in your name, for the aggregate principal amount of
Notes to be purchased by you and in the denomination or denominations shown in
the Information Schedule attached. You will pay the purchase price for the
Notes on the date of closing as follows:
(a) for the Fixed Rate Notes, by transfer, without recourse,
representation or warranty, to the Company of those certain 8.65% Senior
Notes due August 14, 1996 (the "1996 NOTES"), in the principal amount of
$25,000,000, issued by Fleetwood Credit Corp., a California corporation and
the wholly-owned Subsidiary of the Company ("FLEETWOOD CREDIT"), pursuant
to that certain Master Shelf Agreement dated as of March 27, 1991, as
amended (the "1991 SHELF AGREEMENT"), between Fleetwood Credit and you;
(b) for the Series A Floating Rate Notes, by transfer, without
recourse, representation or warranty, to the Company of those certain
Senior Floating Rate Notes due November 30, 2001 (the "2001 NOTES"), in the
principal amount of $30,000,000, issued by Fleetwood Credit pursuant to
that Master Shelf Agreement dated as of October 29, 1993, as amended (the
"1993 SHELF AGREEMENT"), between Fleetwood Credit and you; and
(c) for the Series B Floating Rate Notes, by transfer, without
recourse, representation or warranty, to the Company of those certain
Senior Floating Rate Notes due June 1, 2005 (the "2005 NOTES"; together
with the 1996 Notes and the 2001 Notes, the "FLEETWOOD CREDIT NOTES"), in
the principal amount of $25,000,000, issued by Fleetwood Credit pursuant to
the 1993 Shelf Agreement.
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It is hereby agreed and understood that the transfer of the Fleetwood Credit
Notes pursuant to the preceding clauses (a), (b) and (c) (i) shall represent
full payment for the Notes, regardless of Fleetwood Credit's performance or non-
performance of its obligations in respect of the Fleetwood Credit Notes, (ii)
shall not give rise to any liability on the part of any Purchaser as an indorser
of any Fleetwood Credit Note and (iii) shall not give rise to any liability of
the Company or Fleetwood Credit with respect to any prepayment premium or yield
maintenance premium under the 1991 Shelf Agreement or the 1993 Shelf Agreement.
The date of closing shall be April 22, 1996 or any other date upon which the
Company and you may mutually agree (hereinafter, the "CLOSING" or the "DATE OF
CLOSING"). Capitalized terms used herein, unless defined in the paragraphs in
which they first appear, are defined in paragraph 10 hereof.
3. CONDITIONS OF CLOSING. The obligations of any Purchaser to
purchase and pay for, or to cause the purchase and payment for, the Notes, are
subject to the satisfaction, on or before the date of closing, of each of the
following conditions:
3A. OPINION OF COMPANY'S COUNSEL. The Purchasers shall have received
from the General Counsel of the Company a favorable opinion dated as
of the date of closing satisfactory to the Purchasers and
substantially in the form of EXHIBIT D attached hereto. The Company
agrees to cause such counsel to deliver such opinion and understands
and agrees that the Purchasers will and are hereby authorized to rely
on such opinion.
3B. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The representations
and warranties contained in paragraph 8 shall be true on and as of the
date of closing; there shall exist on the date of closing no Event of
Default or Default; and the Company shall have delivered to the
Purchasers (i) an Officer's Certificate to such effect and (ii) a
Secretary's certificate certifying copies of the Company's articles of
incorporation, the Company's bylaws, resolutions of the Board of
Directors of the Company authorizing the execution and delivery of
this Agreement and the issuance of the Notes and the incumbency and
signatures of its officers executing this Agreement and the Notes,
each dated as of the date of closing and substantially in the form of
Exhibit G attached hereto and otherwise in form and substance
satisfactory to the Purchasers.
3C. PURCHASE PERMITTED BY APPLICABLE LAWS. The purchase of and
payment for the Notes to be purchased by the Purchasers on the terms
and conditions herein
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provided shall not violate any applicable law or governmental
regulation (including, without limitation, Section 5 of the Securities
Act or Regulation G, T or X of the Board of Governors of the Federal
Reserve System) and shall not subject any Purchaser to any tax,
penalty, liability or other onerous condition under or pursuant to any
applicable law or governmental regulation.
3D. LEGAL MATTERS. Counsel for the Purchasers, including any special
counsel for the Purchasers retained in connection with this Agreement,
shall be satisfied as to all legal matters relating to this Agreement
and the transactions contemplated hereby, and the Purchasers shall
have received from such counsel favorable opinions dated as of the
date of this Agreement as to such legal matters as they may request.
3E. STRUCTURING FEE. The Company will have paid to Prudential
Capital Group in immediately available funds a fee of $100,000 prior
to or at the time of the execution and delivery of this Agreement by
the Company and the Purchasers.
3F. PREPAYMENT OF ACCRUED INTEREST UNDER FLEETWOOD CREDIT NOTES.
Fleetwood Credit shall have prepaid all unpaid interest accruing under
the Fleetwood Credit Notes prior to the date of closing.
3G. PROCEEDINGS. All corporate and other proceedings taken or to be
taken on or before the date of this Agreement in connection with the
execution and delivery of this Agreement and the transactions
contemplated hereby and all documents incident hereto and thereto
shall be satisfactory in substance and form to the Purchasers and the
Purchasers shall have received all such counterpart originals or
certified or other copies of such documents as they may reasonably
request on or before the date of this Agreement.
4. PREPAYMENTS. The Notes shall be subject to prepayment only under
the circumstances set forth in paragraphs 4A and 4B.
4A. REQUIRED PREPAYMENTS. The Notes of each Series shall be subject
to required prepayments, if any, set forth in the Notes of such Series.
4B. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT. The Notes of
each Series shall be subject to prepayment, in whole at any time or from time to
time in part (in multiples of
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$5,000,000, at the option of the Company, on any interest payment date for such
Note, at 100% of the principal amount so prepaid plus interest thereon to the
prepayment date and the Yield-Maintenance Amount, if any, with respect to each
such Note. If the Company and the holder of any Note shall prior to the
prepayment date designate in writing a different premium, the premium so
designated shall be payable on the prepayment date in lieu of the Yield-
Maintenance Amount with respect to such Note.
4C. NOTICE OF OPTIONAL PREPAYMENT. The Company shall give the holder
of each Note to be prepaid pursuant to paragraph 4B irrevocable written notice
of such prepayment not less than 10 Business Days prior to the prepayment date,
specifying such prepayment date, specifying the aggregate principal amount of
the Notes of the same Series as such Note to be prepaid on such date,
identifying each Note held by such holder, and the principal amount of each such
Note, to be prepaid on such date and stating that such prepayment is to be made
pursuant to paragraph 4B. Notice of prepayment having been given as aforesaid,
the principal amount of the Notes specified in such notice, together with
interest thereon to the prepayment date and together with the premium, if any,
herein provided, shall become due and payable on such prepayment date.
4D. APPLICATION OF PREPAYMENTS. In the case of each prepayment of
less than the entire unpaid principal amount of all outstanding Notes of any
Series, the principal amount to be prepaid shall be applied pro rata to all
outstanding Notes of such Series according to the respective unpaid principal
amounts thereof. The principal amounts so prepaid on each outstanding Note of
such Series so prepaid shall be credited against the last maturing installment
or installments of principal then remaining unpaid on such Note. For the
purpose of this paragraph 4D only, "outstanding" Notes shall include any Notes
of such Series that have been prepaid or otherwise retired or purchased or
otherwise acquired by the Company or any of its Subsidiaries or Affiliates,
other than by prepayment pursuant to paragraph 4B or by mandatory prepayment
pursuant to the terms of such Note.
4E. RETIREMENT OF NOTES. The Company shall not, and shall not permit
any of its Subsidiaries or Affiliates to, prepay or otherwise retire in whole or
in part prior to their stated installment or final maturities (other than by
prepayment pursuant to paragraphs 4A or 4B or upon acceleration of such final
maturity pursuant to paragraph 7A), or purchase or otherwise acquire, directly
or indirectly, Notes held by any holder unless the Company or such Subsidiary or
Affiliate shall have offered to prepay or otherwise retire or purchase or
otherwise acquire, as the case may be, the same proportion of the aggregate
principal amount of Notes held by each other holder of Notes at the time
outstanding upon the same terms and conditions.
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Any Notes so prepaid or otherwise retired or purchased or otherwise acquired by
the Company or any of its Subsidiaries or Affiliates shall not be deemed to be
outstanding for any purpose under this Agreement, except as provided in
paragraph 4D.
5. AFFIRMATIVE COVENANTS.
5A. FINANCIAL STATEMENTS. The Company covenants that it will deliver
to each Significant Holder:
(i) as soon as practicable and in any event within 60 days after the
end of each quarterly period (other than the last quarterly period) in
each fiscal year of the Company, consolidated and consolidating
balance sheets and related statements of income and statements of cash
flows of the Company showing the financial condition of the Company
and its Subsidiaries as of the close of such fiscal quarter and the
results of its operations and the operations of such Subsidiaries
during such fiscal quarter and the then elapsed portion of the fiscal
year, setting forth in each case in comparative form figures for the
corresponding period in the preceding fiscal year (or in lieu of such
financial statements, the Company's Quarterly Report on Form 10-Q for
such quarterly period, as filed with the Securities and Exchange
Commission), all in reasonable detail and certified by an Authorized
Officer of the Company as fairly presenting the financial condition
and results of operations of the Company and its Subsidiaries, on a
consolidated or consolidating basis, as the case may be, in accordance
with GAAP consistently applied, subject to normal year-end audit
adjustments;
(ii) as soon as practicable and in any event within 120 days after the
end of each fiscal year of the Company, consolidated and consolidating
balance sheets and related statements of income and statements of cash
flows of the Company showing the financial condition of the Company
and its Subsidiaries as of the close of such fiscal year and the
results of its operations and the operations of such Subsidiaries
during such year, setting forth in each case in comparative form
corresponding figures from the preceding annual audit, all in
reasonable detail and satisfactory in scope to the Required Holders
and, as to the consolidated statements (or in lieu of such financial
statements, the Company's Annual Report on Form 10-K for such fiscal
year, as filed with the Securities and Exchange Commission), certified
to the Company by independent public accountants of recognized
standing selected by the Company whose certificate shall be
unqualified and,
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as to the consolidating statements, certified by an Authorized Officer
of the Company as fairly presenting the financial condition and
results of the Company and its Subsidiaries in accordance with GAAP
consistently applied;
(iii) promptly upon transmission thereof, copies of all such financial
statements, proxy statements, notices and reports as the Company shall
send to its public stockholders and copies of all registration
statements (without exhibits) and all reports which it files with the
Securities and Exchange Commission (or any governmental body or agency
succeeding to the functions of the Securities and Exchange Commission)
excluding, however, any such statements or reports relating to the
Company's incentive compensation plans; and
(iv) with reasonable promptness, such other financial data as such
holder may reasonably request.
Together with each delivery of the Company's financial statements required by
clauses (i) and (ii) above, the Company will deliver to each Significant Holder
an Officer's Certificate demonstrating (with computations in reasonable detail)
compliance by the Company and its Subsidiaries with the provisions of paragraphs
6A(i), 6A(ii), 6B(vi), 6B(vii), 6C(ii) and 6E and stating that there exists no
Event of Default or Default, or, if any Event of Default or Default exists,
specifying the nature and period of existence thereof and what action the
Company proposes to take with respect thereto. Together with each delivery of
the Company's consolidated financial statements required by clause (ii) above,
the Company will deliver to each Significant Holder a certificate of such
accountants stating that, in making the audit necessary to the certification of
such consolidated financial statements, they have obtained no knowledge of any
Event of Default or Default, or, if they have obtained knowledge of any Event of
Default or Default, specifying the nature and period of existence thereof. Such
accountants, however, shall not be liable to anyone by reason of their failure
to obtain knowledge of any Event of Default or Default which would not be
disclosed in the course of an audit conducted in accordance with generally
accepted auditing standards.
The Company also covenants that forthwith upon the President,
principal financial officer, principal accounting officer or any Authorized
Officer of the Company obtaining knowledge of an Event of Default or Default, it
will deliver to each holder of any Notes an Officer's Certificate specifying the
nature and period of existence thereof and what action the Company proposes to
take with respect thereto.
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5B. INSPECTION OF PROPERTY. The Company covenants that it will, and
will cause its Subsidiaries to, permit any Person designated by any Significant
Holder, with reasonable prior notice and at such Significant Holder's expense,
to visit and inspect any of the properties of the Company and its Subsidiaries,
to examine the corporate books and financial records of the Company and its
Subsidiaries and make copies thereof or extracts therefrom and to discuss the
affairs, finances and accounts of any of such corporations with the principal
officers of the Company and its independent public accountants. Such
examinations and discussions shall be conducted during normal business hours and
shall not unreasonably disrupt the business of the Company. Providing copies of
material, non-public information about the Company pursuant to this paragraph 5B
may be conditioned upon the recipient's execution and delivery of a
confidentiality agreement substantially in the form of Prudential's then-
standard confidentiality agreement.
5C. COVENANT TO SECURE NOTES EQUALLY. The Company covenants that, if
it or any Subsidiary shall create or assume any Lien upon any of its property or
assets, whether now owned or hereafter acquired, other than Liens permitted by
the provisions of paragraph 6B (unless prior written consent to the creation or
assumption thereof shall have been obtained pursuant to paragraph 11C), it will
make or cause to be made effective provision whereby the Notes will be secured
by such Lien equally and ratably with any and all other Indebtedness thereby
secured so long as any such other Indebtedness shall be so secured.
Notwithstanding the foregoing, the provisions of this paragraph 5C shall not be
construed to permit the creation or existence of any Lien that is prohibited
under paragraph 6B.
5D. EXISTENCE; BUSINESSES AND PROPERTIES; COMPLIANCE. The Company
covenants that it will, and will cause each Subsidiary to, (i) do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence, except as otherwise expressly permitted under paragraph 6D;
and to continue to be qualified to transact business in every jurisdiction where
such qualification is required except where the failure so to qualify would not
result in a Material Adverse Effect; (ii) maintain compliance with each of its
loans, contracts, leases and other obligations except such as are being
contested in good faith and by appropriate proceedings and except for such
noncompliance as will not, in any case or in the aggregate, have a Material
Adverse Effect; and (iii) comply with all applicable laws, rules, regulations
and orders of all Governmental Authorities, noncompliance with which could
reasonably be expected to result in a Material Adverse Effect.
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5E. INSURANCE. The Company covenants that it will, and will cause
each Subsidiary to, keep its insurable properties adequately insured at all
times by financially sound and reputable insurers; maintain such other
insurance, to such extent and against such risks, including fire and other risks
insured against by extended coverage, as is customary with companies in the same
or similar businesses, including public liability insurance against claims for
personal injury or death or property damage occurring upon, in, about or in
connection with the use of any properties owned, occupied or controlled by it;
and maintain such other insurance as may be required by law.
5F. OBLIGATIONS AND TAXES. The Company covenants that it will, and
will cause each Subsidiary to, pay its indebtedness and other obligations
promptly and in accordance with their terms and pay and discharge promptly all
taxes, assessments and governmental charges or levies imposed upon the Company
or any of its Subsidiaries or upon their respective income or profits or in
respect of their respective property, before the same shall become delinquent or
in default, as well as all lawful claims for labor, materials and supplies or
otherwise which, if unpaid, might give rise to a Lien upon such properties or
any part thereof; PROVIDED, HOWEVER, that such payment and discharge shall not
be required with respect to any such tax, assessment, charge, levy or claim so
long as the validity or amount thereof shall be contested in good faith by
appropriate proceedings and the Company or its Subsidiaries shall set aside on
their respective books adequate reserves with respect thereto.
5G. INFORMATION TO BE PROVIDED BY THE COMPANY FOR RULE 144A TRANSFER.
In connection with any transfer of the Notes pursuant to the exemption from the
provisions of Section 5 of the Securities Act afforded by Rule 144A promulgated
thereunder, the Company hereby agrees to provide (i) at the request of any
holder of any Note, including any Transferee or Person who has been granted
participation in any Note, to such holder and to any prospective transferee
designated to the Company in writing by such holder, and (ii) at such
prospective transferee's request to such holder or the Company, the information
required by paragraph (d) (4) (i) (or any successor provision) of Rule 144A
under the Securities Act.
5H. TERMINATION OF EXISTING SHELF AGREEMENTS. The Company hereby
agrees promptly following the closing to take such actions as are necessary (i)
to cause all obligations of Fleetwood Credit outstanding under the Fleetwood
Credit Notes to be satisfied in full and (ii) to terminate the 1991 Shelf
Agreement and the 1993 Shelf Agreement.
5I. TERMINATION OF SUPPORT AGREEMENT. The Company shall, in
connection with any Transfer of the capital stock (or
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all or substantially all of the assets) of Fleetwood Credit to any Person that
is not a wholly-owned Subsidiary of the Company, take all actions necessary to
terminate the Support Agreement dated April 18, 1989, between Fleetwood Credit
and the Company, and in connection with the termination of such Support
Agreement, the Company shall obtain a release from Fleetwood Credit releasing
the Company from any and all obligations that may be outstanding under, or
survive the termination of, such Support Agreement.
6. NEGATIVE COVENANTS.
6A. INDEBTEDNESS.
(i) The Company will not, and will not permit any Subsidiary to,
create, incur, assume or permit to exist at any time any Funded Debt in an
amount that causes the ratio of the outstanding principal amount of all Funded
Debt of the Company and its Subsidiaries (including the Notes) to Consolidated
Net Tangible Capitalization to exceed 50%.
(ii) The Company will not permit its Subsidiaries to create, incur,
assume or permit to exist at any time Indebtedness (other than Indebtedness owed
to the Company or any wholly-owned Subsidiary of the Company) in an aggregate
outstanding principal amount for all Subsidiaries exceeding, when added (without
duplication) to the then outstanding principal amount of Indebtedness secured by
Liens described in paragraph 6B(vi), 20% of Consolidated Tangible Net Worth.
(iii) Notwithstanding the provisions of the preceding subparagraphs (i)
and (ii), the Company will not create, incur, assume or permit to exist at any
time Indebtedness owed to any Subsidiary unless such Indebtedness is
subordinated to the obligations of the Company under this Agreement and the
Notes upon substantially the terms and conditions set forth in Exhibit H
attached hereto.
6B. LIENS. The Company covenants that it will not, and will not
permit any Subsidiary to, at any time create, incur, assume or permit to exist
any Lien on any property or assets (including stock or other securities of any
Person, including any Subsidiary) now owned or hereafter acquired by it or on
any income or rights in respect of any thereof, except:
(i) Liens for taxes not yet due or which are being contested in
compliance with paragraph 5F;
(ii) carriers', warehousemen's, mechanic's, materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business and securing
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obligations (other than Indebtedness) which are not due or which are
being contested in compliance with paragraph 5F;
(iii) pledges and deposits made in the ordinary course of business
in compliance with workmen's compensation, unemployment insurance and
other social security laws or regulations;
(iv) deposits to secure the performance of bids, trade contracts
(other than for Indebtedness), leases (other than Capitalized Lease
Obligations), statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(v) zoning restrictions, easements, rights-of-way, restrictions
on use of real property and other similar encumbrances incurred in the
ordinary course of business which, in the aggregate, are not
substantial in amount and do not materially detract from the value of
the property subject thereto or interfere with the ordinary conduct of
the business of the Company or any of its Subsidiaries;
(vi) Liens securing Indebtedness (other than Indebtedness
described in the following clause (vii)) provided that the aggregate
outstanding principal amount of all such Indebtedness for the Company
and its Subsidiaries at no time exceeds, when added (without
duplication) to the then outstanding principal amount of Indebtedness
described in paragraph 6A(ii), 20% of Consolidated Tangible Net Worth;
and
(vii) Liens existing prior to the time of acquisition upon any
property acquired by the Company through purchase, merger or
consolidation or otherwise, whether or not expressly assumed by the
Company, or placed on property at the time of acquisition, or within
90 days thereafter, by the Company to secure all or a portion of (or
to secure Indebtedness incurred to pay all or a portion of) the
purchase price thereof, provided that the aggregate outstanding
principal amount of all Indebtedness of the Company secured by such
Liens shall at no time exceed 20% of Consolidated Tangible Net Worth.
6C. MERGER AND SALE OF ASSETS. The Company covenants that it will
not, and will not permit any Subsidiary to, at any time enter into any
transaction of merger, consolidation, pool, joint venture, syndicate or other
combination with any other
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Person or sell, lease or transfer or otherwise dispose of (hereinafter
"TRANSFER") all or a substantial part of its assets to any Person, except that
if, at the time thereof and immediately after giving effect thereto no Event of
Default or Default shall have occurred and be continuing, (i) a corporation
(including a Subsidiary) may merge into a wholly-owned Subsidiary of the Company
or, in the case of a transaction in which the Company is merging with any other
Person, into the Company provided that, after giving effect to such merger, the
Company and its Subsidiaries could incur an additional $1 of Funded Debt under
paragraph 6A(i) and (ii) the Company and its Subsidiaries may Transfer assets so
long as after giving effect to the proposed Transfer, (a) the assets which are
the subject of the proposed Transfer, together with all other such Transfers of
the Company and its Subsidiaries during the immediately preceding four fiscal
quarters of the Company, would not have an aggregate Asset Percentage Value (as
defined below) that exceeds 20% and (b) the sum of the Asset Percentage Values
for all assets Transferred on or after the date of closing shall not exceed 45%.
For the purposes of this paragraph 6C, (x) the "Asset Percentage Value" for any
asset sold shall equal the percentage determined by dividing the Asset Value of
such asset as at the end of the fiscal quarter of the Company most recently
ended prior to such sale by the Consolidated Net Tangible Assets of the Company
and its Subsidiaries at such fiscal quarter-end and (y) the assets of Fleetwood
Credit (to the extent otherwise included in Consolidated Net Tangible Assets or
in the determination of Asset Values of Transferred assets), including any stock
of Fleetwood Credit and its Subsidiaries held directly or indirectly by the
Company, shall be excluded from the determination of Consolidated Net Tangible
Assets and from the calculation of Asset Values for Transferred assets.
6D. CONSOLIDATED TANGIBLE NET WORTH. The Company covenants that it
will not permit its Consolidated Tangible Net Worth at any time to be less than
$325,000,000.
6E. SALE OF STOCK AND DEBT OF SUBSIDIARIES. The Company covenants
that it will not, and will not permit its Subsidiaries to, sell or otherwise
dispose of, or part with control of, any shares of stock (except directors'
qualifying shares) or Indebtedness of any Subsidiary, except that all shares of
stock and Indebtedness of any Subsidiary at the time owned by or owed to the
Company and all Subsidiaries may be sold as an entirety to any Person for a
consideration which represents fair value (as determined in good faith by the
Board of Directors of the Company) at the time of sale of the shares of stock
and Indebtedness so sold provided that such sale or other disposition is
permitted by paragraph 6C, and further provided that, at the time of such sale,
such Subsidiary shall not own, directly or indirectly, any shares of stock or
Indebtedness of any other
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Subsidiary or of the Company (unless all of the shares of stock and Indebtedness
of such other Subsidiary owned, directly or indirectly, by the Company and all
Subsidiaries are simultaneously being sold as permitted by this paragraph 6F).
Notwithstanding the foregoing, the Company shall not sell or otherwise dispose
of the stock of Fleetwood Credit unless (i) all amounts outstanding under the
Fleetwood Credit Notes are satisfied and all such notes are cancelled and (ii)
the provisions of paragraph 5I are satisfied.
6F. ERISA. The Company covenants that it will not, and will not
permit any Subsidiary or other ERISA Affiliate to: (i) terminate or withdraw
from any Plan so as to result in any material liability to the PBGC; (ii) engage
in or permit any Person to engage in any Prohibited Transaction involving any
Plan which would subject the Company or any Subsidiary to any material tax,
penalty or other liability; (iii) incur or suffer to exist any material
accumulated funding deficiency (as defined in Section 302 of ERISA and Section
412 of the Code), whether or not waived, involving any Plan; or (iv) allow or
suffer to exist any event or condition which presents a material risk of
incurring a material liability to the PBGC. For the purpose of this paragraph
6F only, "material" shall mean a tax, penalty or other liability which could
reasonably be expected to exceed, individually or in the aggregate, $20,000,000
or more.
6G. RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS. Except as provided
herein, the Company will not, and will not permit any of its Subsidiaries to,
create or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any such Subsidiary to
(i) pay dividends or make any other distributions on any of such Subsidiary's
capital stock owned by the Company or any other Subsidiary, (ii) repay or prepay
any Indebtedness owed by such Subsidiary to the Company or any other Subsidiary,
(iii) make loans or advances to the Company or any other Subsidiary, or
(iv) transfer any of its property or assets to the Company or any other
Subsidiary, except for such restrictions or encumbrances existing by reason of
(a) any restrictions existing under this Agreement or any other agreements or
contracts in effect on the date of closing, (b) any restrictions with respect to
a Subsidiary that is not a Subsidiary on the date of closing under any agreement
in existence at the time such Subsidiary becomes a Subsidiary of the Company,
(c) any restrictions with respect to a Subsidiary imposed pursuant to an
agreement which has been entered into for the sale or disposition of all or
substantially all of the capital stock or assets of such Subsidiary, (d) any
restrictions with respect to any Subsidiary all or substantially all of whose
assets consist of property encumbered by Liens permitted under paragraph 6B(vi),
(e) restrictions imposed by applicable laws, (f) restrictions under leases of,
or mortgages
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and other agreements relating to Liens on, specified property or assets limiting
or prohibiting transfers of such property or assets (including, without
limitation, non-assignment clauses, due-on-sale clauses and clauses prohibiting
junior Liens), and (g) any restrictions existing under any agreement that
amends, refinances or replaces any agreement containing restrictions permitted
under the preceding clauses (a) through (f) PROVIDED that the terms and
conditions of any such agreement are no less favorable to Company and its
Subsidiaries than those under the agreement so amended, refinanced or replaced.
7. EVENTS OF DEFAULT.
7A. ACCELERATION. If any of the following events shall occur for any
reason whatsoever (and whether such occurrence shall be voluntary or involuntary
or come about or be effected by operation of law or otherwise):
(i) the Company defaults in the payment of any principal or of
premium on any Note when the same shall become due, either by the terms
thereof or otherwise as herein provided; or
(ii) the Company defaults in the payment of any interest on any Note
for more than ten days after the date due; or
(iii) the Company or any Subsidiary defaults in any payment of
principal of or interest on any other Indebtedness beyond any period of
grace provided with respect thereto, or the Company or any Subsidiary fails
to perform or observe any other agreement, term or condition contained in
any agreement under which any such Indebtedness is created (or if any other
event thereunder or under any such agreement shall occur and be continuing)
and the effect of such failure or other event is to cause, or to permit the
holder or holders of such Indebtedness (or a trustee on behalf of such
holder or holders) to cause, such Indebtedness to become due prior to any
stated maturity, provided that the aggregate amount of all Indebtedness as
to which such a payment default shall occur and be continuing or such a
failure or other event causing or permitting acceleration shall occur and
be continuing exceeds $20,000,000; or
(iv) any representation or warranty made by the Company herein or in
any writing furnished in connection with or pursuant to this Agreement
shall be false in any material respect on the date as of which made; or
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(v) the Company fails to perform or observe any agreement contained
in paragraphs 5C, 5D(i), the last paragraph of paragraph 5A, or paragraph
6; or
(vi) the Company fails to perform or observe any other agreement, term
or condition contained herein and such failure shall not be remedied within
30 days after any officer of the Company obtains actual knowledge thereof;
or
(vii) the Company or any Subsidiary makes an assignment for the benefit
of creditors or is generally not paying its debts as such debts become due;
or
(viii) any decree or order for relief in respect of the Company or any
Material Subsidiary is entered under any bankruptcy, reorganization,
compromise, arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar law, whether now or hereafter in effect (herein
called the "BANKRUPTCY LAW"), of any jurisdiction; or
(ix) the Company or any of its Material Subsidiaries (a) petitions or
applies to any tribunal for, or consents to, the appointment of, or taking
possession by, a trustee, receiver, custodian, liquidator or similar
official of the Company or any of its Material Subsidiaries, or of any
substantial part of the assets of the Company or any of its Material
Subsidiaries, or (b) commences a voluntary case under the Bankruptcy Law of
the United States or any proceedings (other than proceedings for the
voluntary liquidation and dissolution of a Subsidiary) relating to the
Company or any Material Subsidiary under the Bankruptcy Law of any other
jurisdiction; or
(x) any such petition or application is filed, or any such
proceedings are commenced, against the Company or any Material Subsidiary
and the Company or such Material Subsidiary by any act indicates its
approval thereof, consent thereto or acquiescence therein, or an order,
judgment or decree is entered appointing any such trustee, receiver,
custodian, liquidator or similar official, or approving the petition in any
such proceedings, and such order, judgment or decree remains unstayed and
in effect for more than 30 days; or
(xi) any order, judgment or decree is entered in any proceedings
against the Company decreeing the dissolution of the Company and such
order, judgment or decree remains unstayed and in effect for more than 60
days; or
(xii) any order, judgment or decree is entered in any proceedings
against the Company or any Material Subsidiary
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decreeing a split-up of the Company or such Material Subsidiary which
requires the divestiture of assets representing a substantial part, or the
divestiture of the stock of a Subsidiary whose assets represent a
substantial part, of the consolidated assets of the Company and its
Subsidiaries (in each case determined in accordance with GAAP) or which
requires the divestiture of assets, or stock of a Subsidiary, which shall
have contributed a substantial part of the consolidated net income of the
Company and its Subsidiaries (in each case determined in accordance with
GAAP) for any of the three fiscal years then most recently ended, and such
order, judgment or decree remains unstayed and in effect for more than 60
days; or
(xiii) a final judgment in an amount in excess of $20,000,000 is
rendered against the Company or any Material Subsidiary and, within 30 days
after entry thereof, such judgment is not discharged or execution thereof
stayed pending appeal, or within 30 days after the expiration of any such
stay, such judgment is not discharged and such judgment is not covered in
full (other than any applicable deductible) by any insurance policy or bond
then in effect;
then (A) if such event is an Event of Default specified in clause (viii), (ix)
or (x) of this paragraph 7A with respect to the Company, all of the Notes at the
time outstanding shall automatically become immediately due and payable at par
together with interest accrued thereon, without presentment, demand, protest or
notice of any kind, all of which are hereby waived by the Company, (B) if such
event is an Event of Default specified in clause (i) or (ii) of this paragraph
7A, any holder of any Note may at its option during the continuance of such
Event of Default, by notice in writing to the Company, declare all of the Notes
held by such holder to be, and all of the Notes held by such holder shall
thereupon be and become, immediately due and payable together with interest
accrued thereon and together with the Yield-Maintenance Amount, if any, with
respect to each such Note, without presentment, demand, protest or notice of any
kind, all of which are hereby waived by the Company, (C) if such event is any
other Event of Default, the Required Holders of the Notes of any Series may at
its or their option during the continuance of such Event of Default, by notice
in writing to the Company, declare all of the Notes of such Series to be, and
all of the Notes of such Series shall thereupon be and become, immediately due
and payable together with interest accrued thereon and together with the Yield-
Maintenance Amount, if any, with respect to each Note of such Series, without
presentment, demand, protest or notice of any kind, all of which are hereby
waived by the Company, and (D) if any Note shall have been declared to be due
and payable pursuant to clause (B) or (C) above, any holder of any other Note
may at any time thereafter, regardless of whether
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any Event of Default shall at such time be continuing, by notice in writing to
the Company, declare all of the Notes held by such holder to be, and all of the
Notes held by such holder shall thereupon be and become, immediately due and
payable together with interest accrued thereon and together with the Yield-
Maintenance Amount, if any, with respect to each such Note, without presentment,
demand, protest or notice of any kind, all of which are hereby waived by the
Company, provided that the Yield-Maintenance Amount, if any, with respect to
each Note shall be due and payable upon any declaration pursuant to this
paragraph 7A only if (Y) the event whose occurrence permits such declaration is
an Event of Default specified in any of clauses (i) to (vi), inclusive, of this
paragraph 7A, and (Z) one or more of such Events of Default shall be continuing
at the time of such declaration, and provided, further, that if a Yield-
Maintenance Amount shall have become due and payable with respect to any Note
declared to be due and payable pursuant to clause (B) or (C) above, a Yield-
Maintenance Amount shall be due and payable with respect to any other Note
declared to be due and payable thereafter.
7B. OTHER REMEDIES. If any Event of Default or Default shall occur
and be continuing, the holder of any Note may proceed to protect and enforce its
rights under this Agreement and such Note by exercising such remedies as are
available to such holder in respect thereof under applicable law, either by suit
in equity or by action at law, or both, whether for specific performance of any
covenant or other agreement contained in this Agreement or in aid of the
exercise of any power granted in this Agreement. No remedy conferred in this
Agreement upon the holder of any Note is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or now or hereafter existing at
law or in equity or by statute or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company
represents, covenants and warrants:
8A. ORGANIZATION; DUE AUTHORIZATION. The Company is a corporation
duly organized and existing in good standing under the laws of the State of
Delaware, each Subsidiary is duly organized and existing in good standing under
the laws of the jurisdiction in which it is incorporated, and the Company has
and each Subsidiary has the corporate power to own its respective property and
to carry on its respective business as now being conducted. Each of the Company
and its Subsidiaries is qualified to transact business in every jurisdiction
where such qualification is required except where the failure so to qualify
would not result in a Material Adverse Effect. The Company has no Subsidiaries
other than as set forth in EXHIBIT F. This
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Agreement has been, and the Notes, when issued in accordance with the terms and
provisions of this Agreement will be, duly authorized by all the requisite
corporate action and this Agreement has been duly executed and delivered by
Authorized Officers of the Company.
8B. FINANCIAL STATEMENTS. The Company has furnished each Purchaser
with the following financial statements, identified by an Authorized Officer of
the Company: (I) its Annual Report on Form 10-K including a consolidated
balance sheet of the Company and its Subsidiaries as at April 30, 1995 and the
consolidated statement of income and statement of cash flows of the Company and
its Subsidiaries for such year of the Company, all of which consolidated annual
financial statements have been certified by Arthur Andersen & Co.; and (II) its
Quarterly Report on Form 10-Q for its fiscal quarter ended January 28, 1996
including a consolidated balance sheet of the Company and its Subsidiaries as at
such date and the consolidated statement of income and statement of cash flows
of the Company and its Subsidiaries for the nine-month period then ended
prepared by the Company. Such financial statements (including any related
schedules and/or notes) are true and correct in all material respects (subject,
as to interim statements, to changes resulting from audits and year-end
adjustments), have been prepared in accordance with GAAP consistently followed
throughout the periods involved and show all liabilities, direct and contingent,
of the Company and its Subsidiaries required to be shown in accordance with
GAAP. The balance sheets fairly present the condition of the Company and its
Subsidiaries as at the date thereof, and the statements of income and statements
of cash flows fairly present the results of the operations of the Company and
its Subsidiaries for the period indicated. There has been no change in the
business, assets, prospects, condition or operations (financial or otherwise) of
the Company and its Subsidiaries taken as a whole since the end of the most
recent fiscal year for which such audited financial statements have been
furnished which could reasonably be expected to have a Material Adverse Effect.
8C. ACTIONS PENDING. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened against the
Company or any of its Subsidiaries, or any properties or rights of the Company
or any of its Subsidiaries, by or before any court, arbitrator or administrative
or governmental body which might result in a Material Adverse Effect.
8D. OUTSTANDING INDEBTEDNESS. None of the Subsidiaries have
outstanding any Indebtedness except as permitted by paragraph 6A. There exists
no default or event of default under the provisions of any instrument evidencing
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Subsidiary Indebtedness or any Indebtedness of the Company or of any
agreement relating thereto.
8E. TITLE TO PROPERTIES. The Company has, and each of its
Subsidiaries has, good and indefeasible title to its real properties (other than
properties which it leases) and good title to all of its other properties and
assets, including the properties and assets reflected in the most recent audited
balance sheet referred to in paragraph 8B (other than properties and assets
disposed of in the ordinary course of business), subject to no Lien of any kind
except Liens permitted by paragraph 6B. All leases necessary in any material
respect for the conduct of the respective businesses of the Company and its
Subsidiaries are valid and subsisting and are in full force and effect.
8F. TAXES. The Company has and each of its Subsidiaries has filed
all Federal, State and other income tax returns which, to the best knowledge of
the officers of the Company and its Subsidiaries, are required to be filed, and
each has paid all taxes as shown on such returns and on all assessments received
by it to the extent that such taxes have become due, except such taxes as are
being contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP.
8G. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the Company
nor any of its Subsidiaries is a party to any contract or agreement or subject
to any charter or other corporate restriction which materially and adversely
affects its business, property or assets, or financial condition. Neither the
execution nor delivery of this Agreement or the Notes, nor the offering,
issuance and sale of the Notes, nor fulfillment of nor compliance with the terms
and provisions hereof and of the Notes will conflict with, or result in a breach
of the terms, conditions or provisions of, or constitute a default under, or
result in any violation of, or result in the creation of any Lien upon any of
the properties or assets of the Company or any of its Subsidiaries pursuant to,
the charter or by-laws of the Company or any of its Subsidiaries, any award of
any arbitrator or any agreement (including any agreement with stockholders),
instrument, order, judgment, decree, statute, law, rule or regulation to which
the Company or any of its Subsidiaries is subject. Neither the Company nor any
of its Subsidiaries is a party to, or otherwise subject to any provision
contained in, any instrument evidencing indebtedness of the Company or such
Subsidiary, any agreement relating thereto or any other contract or agreement
(including its charter) which limits the amount of, or otherwise imposes
restrictions on the incurring of, Indebtedness of the Company of the type to be
evidenced by the
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Notes except as set forth in the agreements listed in EXHIBIT E attached hereto.
8H. OFFERING OF NOTES. Neither the Company nor any agent acting on
its behalf has, directly or indirectly, offered the Notes or any similar
security of the Company for sale to, or solicited any offers to buy the Notes or
any similar security of the Company from, or otherwise approached or negotiated
with respect thereto with, any Person other than institutional investors, and
neither the Company nor any agent acting on its behalf has taken or will take
any action which would subject the issuance or sale of the Notes to the
provisions of Section 5 of the Securities Act or to the provisions of any
securities or Blue Sky law of any applicable jurisdiction.
8I. REGULATION G, ETC. None of the proceeds of the sale of any Notes
will be used, directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of purchasing or carrying any "margin stock" as defined
in Regulation G (12 CFR Part 207) of the Board of Governors of the Federal
Reserve System (herein called "MARGIN STOCK") or for the purpose of maintaining,
reducing or retiring any indebtedness which was originally incurred to purchase
or carry any stock that is then currently a margin stock or for any other
purpose which might constitute the purchase of such Notes a "purpose credit"
within the meaning of such Regulation G. Neither the Company nor any agent
acting on its behalf has taken or will take any action which might cause this
Agreement or the Notes to violate Regulation G, Regulation T or any other
regulation of the Board of Governors of the Federal Reserve System or to violate
the Exchange Act, in each case as in effect now or as the same may hereafter be
in effect.
8J. ERISA. No accumulated funding deficiency (as defined in section
302 of ERISA and section 412 of the Code), whether or not waived, exists with
respect to any Plan (other than a Multiemployer Plan). No liability to the PBGC
has been or is expected by the Company to be incurred with respect to any Plan
(other than a Multiemployer Plan) by the Company or any of its Subsidiaries
which is or would be materially adverse to the Company and its Subsidiaries
taken as a whole. Neither the Company nor any of its Subsidiaries has incurred
or presently expects to incur any withdrawal liability under Title IV of ERISA
with respect to any Multiemployer Plan which is or would be materially adverse
to the Company and its Subsidiaries taken as a whole. The execution and
delivery of this Agreement and the issuance and sale of the Notes will not
involve any transaction which is subject to the prohibitions of section 406 of
ERISA or in connection with which a tax could be imposed pursuant to section
4975 of the Code. The representation by the Company in the next preceding
sentence is made in reliance upon and subject
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to the accuracy of the representation of each Purchaser in paragraph 9B.
8K. GOVERNMENTAL CONSENT. Neither the nature of the Company or of
any Subsidiary, nor any of their respective businesses or properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor any
circumstance in connection with the offering, issuance, sale or delivery of the
Notes is such as to require any authorization, consent, approval, exemption or
any action by or notice to or filing with any Governmental Authority (other than
routine filings with the Securities and Exchange Commission and/or state Blue
Sky authorities) in connection with the execution and delivery of this
Agreement, the offering, issuance, sale or delivery of the Notes or fulfillment
of or compliance with the terms and provisions hereof or of the Notes.
8L. DISCLOSURE. Neither this Agreement nor any other document,
certificate or statement furnished to any Purchaser by or on behalf of the
Company in connection herewith contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained herein and therein not misleading. There is no fact peculiar to the
Company or any of its Subsidiaries which has a Material Adverse Effect or which
could reasonably be expected to result in a Material Adverse Effect and which
has not been set forth in this Agreement or otherwise disclosed in writing to
each Purchaser by or on behalf of the Company prior to the date of closing.
9. REPRESENTATIONS OF THE PURCHASERS. Each Purchaser represents that
(i) it is purchasing the Notes purchased by it for its own account or one or
more separate accounts maintained by it, in either case for investment and not
with a view to the distribution thereof within the meaning of the Securities Act
or with any present intention of distributing or selling any of the Notes,
PROVIDED that the disposition of its property shall at all times be within its
control and (ii) no part of the funds being used by it to pay the purchase price
of the Notes being purchased by it hereunder constitutes assets allocated to any
separate account maintained by it in which any employee benefit plan, other than
employee benefit plans identified on a list which has been furnished by it to
the Company, participates to the extent of 10% or more. For the purpose of this
paragraph 9, the terms "SEPARATE ACCOUNT" and "EMPLOYEE BENEFIT PLAN" shall have
the respective meanings specified in section 3 of ERISA.
10. DEFINITIONS. For the purpose of this Agreement the following
terms shall have the meanings specified with respect thereto below:
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10A. YIELD-MAINTENANCE TERMS.
"CALLED PRINCIPAL" shall mean, with respect to any fixed rate Note,
the principal of such fixed rate Note that is to be prepaid pursuant to
paragraph 4B or is declared to be immediately due and payable pursuant to
paragraph 7A, as the context requires.
"DISCOUNTED VALUE" shall mean, with respect to (i) the Called
Principal of any fixed rate Note, the amount obtained by discounting all
Remaining Scheduled Payments with respect to such Called Principal from their
respective scheduled due dates to the Settlement Date with respect to such
Called Principal, and (ii) any floating rate Note, the amount obtained by
discounting each Spread Amount from its scheduled due date to the Settlement
Date, in each case in accordance with accepted financial practice and at a
discount rate (applied on either a quarterly or a semiannual basis depending on
whether Interest on such Note is paid quarterly or semiannually) equal to (A),
in the case of a fixed rate Note, the Reinvestment Yield with respect to such
Called Principal, and (B) in the case of a floating rate Note, the Relevant
Rate.
"REINVESTMENT YIELD" shall mean, with respect to the Called Principal
of any Note, the yield to maturity implied by (a) the yields reported, as of
10:00 A.M. (New York City local time) on the Business Day next preceding the
Settlement Date with respect to such Called Principal, on the display designated
as "Page 678" on the Telerate Service (or such other display as may replace page
678 on the Telerate Service) for actively traded U.S. Treasury securities having
a maturity equal to the Remaining Average Life of such Called Principal as of
such Settlement Date, or if such yields shall not be reported as of such time or
the yields reported as of such time shall not be ascertainable, (b) the Treasury
Constant Maturity Series yields reported for the latest day for which such
yields shall have been so reported as of the Business Day next preceding the
Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15(519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date.
Such implied yield shall be determined, if necessary, by (x) converting U.S.
Treasury bill quotations to bond-equivalent yields in accordance with accepted
financial practice and (y) interpolating linearly between reported yields.
"RELEVANT RATE" shall mean, with respect to each Spread Amount, the
yield, as determined by the Calculation Agent, of U.S. Treasury securities
having an average life equal, or most
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nearly equal, to the period from the Settlement Date to the scheduled due date
of the relevant Spread Amount.
"REMAINING AVERAGE LIFE" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest one-
twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) each Remaining Scheduled Payment of
such Called Principal (but not of interest thereon) by (b) the number of years
(calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" shall mean, with respect to (i) the
Called Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
scheduled due date and (ii) any floating rate Note, all payments of interest
thereon that would be due on and after the Settlement Date with respect to such
floating rate Note if no prepayment of such Note were made prior to its
scheduled due date.
"SETTLEMENT DATE" shall mean, with respect to the Called Principal of
any fixed rate Note or any floating rate Note, the date on which such Called
Principal or floating rate Note is to be prepaid pursuant to paragraph 4B or is
declared to be immediately due and payable pursuant to paragraph 7A, as the
context requires.
"SPREAD" shall mean, with respect to any Remaining Scheduled Payment
on a floating rate Note being prepaid, the percentage specified opposite the
phrase "SPREAD (+)" in the information set forth at the beginning of such Note.
"SPREAD AMOUNT" shall mean, with respect to any Remaining Scheduled
Payment on a floating rate Note being prepaid, the part of such Remaining
Scheduled Payment equal to the product of (A) the outstanding principal amount
of such floating rate Note on the scheduled due date of such payment multiplied
by (B) the Spread multiplied by (C) the quotient of (1) the actual number of
days elapsed in the relevant Interest Period (as specified in such Note) divided
by (2) 360 days.
"YIELD-MAINTENANCE AMOUNT" shall mean, with respect to (i) any fixed
rate Note, a premium equal to the excess, if any, of the Discounted Value of the
Called Principal of such Note over the sum of (A) such Called Principal plus (B)
interest accrued hereon as of (including interest due on) the Settlement Date
with respect to such Called Principal and (ii) any floating rate Note,
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an amount equal to the aggregate Discounted Value of the Spread Amounts in
respect of such floating rate Note. The Yield-Maintenance Amount shall in no
event be less than zero.
10B. OTHER TERMS.
"AFFILIATE" shall mean any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, the Company,
except a Subsidiary. A Person shall be deemed to control a corporation if such
Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such corporation, whether through
the ownership of voting securities, by contract or otherwise.
"ASSET VALUE" shall mean, with respect to any asset of any Person, the
greater of such asset's fair market value or the net book value of such asset as
shown on the books of such Person in accordance with GAAP.
"AUTHORIZED OFFICER" shall mean in the case of the Company, its
President, its principal financial officer, principal accounting officer, any
vice president of the Company designated as an "Authorized Officer" of the
Company in the Information Schedule attached hereto or any vice president of the
Company designated as an "Authorized Officer" of the Company for the purpose of
this Agreement in an Officer's Certificate executed by the Company's President,
principal financial officer, or general counsel and delivered to Prudential.
Any action taken under this Agreement on behalf of the Company by any individual
who on or after the date of this Agreement shall have been an Authorized Officer
of the Company and whom the holder of any Note in good faith believes to be an
Authorized Officer of the Company at the time of such action shall be binding on
the Company even though such individual shall have ceased to be an Authorized
Officer of the Company.
"BANKRUPTCY LAW" shall have the meaning specified in clause (viii) of
paragraph 7A.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a
day on which commercial banks in New York City, New York, Los Angeles,
California, or London, England are required or authorized to be closed. A "DAY"
shall mean a calendar day.
"CALCULATION AGENT" shall mean Prudential Global Funding, Inc., and
its successors and assigns.
"CAPITALIZED LEASE OBLIGATION" shall mean any rental obligation which,
under GAAP, is or will be required to be
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capitalized on the books of the Company or any Subsidiary, taken at the amount
thereof accounted for as indebtedness (net of interest expenses) in accordance
with such principles.
"CLOSING" or "DATE OF CLOSING" shall have the meaning specified in
paragraph 2.
"CODE" shall mean the Internal Revenue Code of 1986, as the same may
be amended from time to time.
"CONSOLIDATED NET TANGIBLE ASSETS" shall mean, on a consolidated basis
for the Company and its Subsidiaries, the net book value of all assets of the
Company and its Subsidiaries as shown on the consolidated books of the Company
less Intangibles.
"CONSOLIDATED NET TANGIBLE CAPITALIZATION" shall mean, on a
consolidated basis for the Company and its Subsidiaries, Consolidated Tangible
Net Worth plus the outstanding principal amount of all Funded Debt, all
determined in accordance with GAAP.
"CONSOLIDATED TANGIBLE NET WORTH" shall mean total consolidated
stockholders' equity of the Company less (i) the par or stated value and all
other amounts for preferred stock of the Company that has mandatory sinking fund
or redemption provisions that occur prior to the maturity of the Notes, (ii) the
amount shown on the consolidated statement of financial position of the Company
and its Subsidiaries for Intangibles, and (iii) treasury stock of the Company,
all as determined in accordance with GAAP.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA AFFILIATE" shall mean any corporation which is a member of the
same controlled group of corporations as the Company within the meaning of
section 414(b) of the Code, or any trade or business which is under common
control with the Company within the meaning of section 414(c) of the Code.
"EVENT OF DEFAULT" shall mean any of the events specified in paragraph
7A, provided that there has been satisfied any requirement in connection with
such event for the giving of notice, or the lapse of time, or the happening of
any further condition, event or act, and "DEFAULT" shall mean any of such
events, whether or not any such requirement has been satisfied.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"FIXED RATE NOTES" shall have the meaning specified in paragraph 1(a).
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<PAGE>
"FLEETWOOD CREDIT" shall have the meaning specified in paragraph 2(a).
"FLEETWOOD CREDIT NOTES" shall have the meaning specified in paragraph
2(c).
"FUNDED DEBT" shall mean (i) Indebtedness the final maturity of which
is more than one year from the date of creation, including (A) current
maturities of such Indebtedness under GAAP and (B) Indebtedness that is
extendable or renewable, at the option of the obligor thereunder, for more than
one year from the date of creation of such Indebtedness, and (iii) Guarantees of
Funded Debt of others.
"GAAP" shall mean generally accepted accounting principles.
"GOVERNMENTAL AUTHORITY" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.
"GUARANTEE" of or by any Person shall mean any obligation, contingent
or otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person (the "PRIMARY OBLIGOR") in any
manner, whether directly or indirectly, and including any obligation of such
Person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase property, securities or services for the purpose
of assuring the owner of such Indebtedness of the payment of such Indebtedness
or (c) to maintain working capital, equity capital or other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness; PROVIDED, HOWEVER, that the term Guarantee
shall not include endorsements for collection or deposits in either case in the
ordinary course of business.
"INDEBTEDNESS" of any Person shall mean, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds
(excluding performance bonds), debentures, notes or similar instruments, (c) all
other obligations of such Person that would be classified and accounted for as
debt on a balance sheet of such Person under GAAP, (d) all Guarantees by such
Person of Indebtedness of others, (e) all Capitalized Lease Obligations of such
Person and (f) all indebtedness secured by any Lien on any property or asset
owned or held by such Person regardless of whether the indebtedness secured
thereby shall have been assumed by such Person or is non-
26
<PAGE>
recourse to such Person. The Indebtedness of any Person shall include the
Indebtedness of any partnership, joint venture or other similar entities in
which such Person is a general partner, a joint venturer or a participant.
"INSTITUTIONAL INVESTOR" shall mean (x) a "qualified institutional
buyer" as defined in Rule 144A under the Securities Act or (y) an "accredited
investor" as defined in Rule 501(a)(1), (2), (3), (7) or (8) under the
Securities Act, so long as the trust beneficiaries (in the case of Rule
501(a)(7)) or equity owners (in the case of Rule 501(a)(8)) are not "accredited
investors" by virtue of Rule 501(a)(4), (5) or (6).
"INTANGIBLES" shall mean any patents, trademarks, copyrights, trade
names, unamortized debt discount and expense, goodwill, deferred charges (other
than unamortized deferred charges incurred in connection with the issuance of
asset-backed securities by the Company or a trust of which the Company or any
Subsidiary is the sponsor) and other intangible assets and any write-up of the
value of any assets after December 31, 1990.
"LIEN" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement, any
lease in the nature thereof, and the filing of or agreement to give any
financing statement under the Uniform Commercial Code of any jurisdiction).
"MATERIAL ADVERSE EFFECT" shall mean (a) a materially adverse effect
on the business, assets, operations, prospects, or condition, financial or
otherwise, of the Company and the Subsidiaries taken as a whole, (b) material
impairment of the ability of the Company to perform any of its obligations under
this Agreement or any of the Notes to which it is or will be a party or (c)
material impairment of enforceability of, or the rights of or benefits available
to any holders of any of the Notes under, this Agreement or any of the Notes.
"MATERIAL SUBSIDIARY" shall mean any Subsidiary of the Company
(i) whose total assets (determined in accordance with GAAP) constitute at any
date of determination more that 20% of the consolidated total assets (determined
in accordance with GAAP) of the Company or (ii) the sum of whose net income
(determined in accordance with GAAP) for the three fiscal years immediately
preceding the date of determination constitutes more than 20% of the sum of the
consolidated net income (determined in accordance with GAAP) of the Company for
such fiscal years.
"MULTIEMPLOYER PLAN" shall mean any Plan which is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).
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<PAGE>
"1991 SHELF AGREEMENT" shall have the meaning specified in paragraph
2(a).
"1996 NOTES" shall have the meaning specified in paragraph 2(a).
"1993 SHELF AGREEMENT" shall have the meaning specified in paragraph
2(b).
"NOTES" shall have the meaning specified in paragraph 1.
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of
the Company by an Authorized Officer of the Company.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"PERSON" or "PERSON" shall mean and include an individual, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.
"PLAN" shall mean any "employee pension benefit plan" (as such term is
defined in section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by the Company or any ERISA
Affiliate.
"PROHIBITED TRANSACTION" shall mean any transaction described in
section 406 of ERISA which is not exempt by reason of section 408 of ERISA or
the transitional rules set forth in section 414(c) of ERISA and any transaction
described in section 4975(c) of the Code which is not exempt by reason of
section 4975(c)(2) or section 4975(d) of the Code, or the transitional rules of
section 2003(c) of ERISA.
"PRUDENTIAL" shall mean The Prudential Insurance Company of America.
"PRUDENTIAL AFFILIATE" shall mean any corporation or other entity all
of the Voting Stock (or equivalent voting securities or interests) of which is
owned by Prudential either directly or through Prudential Affiliates.
"PURCHASERS" shall have the meaning specified in the address of this
Agreement.
"REQUIRED HOLDER(S)" shall mean, at any time, the holder or holders of
at least 66 2/3% of the aggregate principal amount of all Notes of all Series
outstanding at such time, and
28
<PAGE>
shall mean, with respect to a particular Series, the holder or holders of at
least 66 2/3% of the aggregate principal amount of the Notes of such Series
outstanding at such time.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SERIES" shall have the meaning specified in paragraph 1.
"SERIES A FLOATING RATE NOTES" shall have the meaning specified in
paragraph 1(b).
"SERIES B FLOATING RATE NOTES" shall have the meaning specified in
paragraph 1(c).
"SIGNIFICANT HOLDER" shall mean (i) Prudential, so long as it or any
Prudential Affiliate shall hold any Note, and (ii) any other holder of at least
$7,500,000 aggregate principal amount of any Notes from time to time
outstanding.
"SUBSIDIARY" shall mean, with respect to any Person (herein referred
to as the "PARENT"), any corporation, partnership, association or other business
entity of which securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power or more than 50%
of the general partnership interests are, at the time any determination is being
made, owned, controlled or held by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent. Unless
otherwise indicated herein, "SUBSIDIARY" shall mean a Subsidiary of the Company.
"TRANSFEREE" shall mean any direct or indirect transferee of all or
any part of any Note purchased by any Purchaser under this Agreement.
"2001 NOTES" shall have the meaning specified in paragraph 2(b).
"2005 NOTES" shall have the meaning specified in paragraph 2(c).
"VOTING STOCK" shall mean, with respect to any corporation, any shares
of stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency).
29
<PAGE>
11. MISCELLANEOUS.
11A. NOTE PAYMENTS. The Company agrees that, so long as any
Purchaser shall hold any Note, it will make payments of principal thereof and
premium, if any, and interest thereon, which comply with the terms of this
Agreement, by wire transfer of immediately available funds for credit to the
account or accounts of such Purchaser, if any, as are specified in the
Information Schedule attached hereto, or, in the case of any Purchaser not named
in the Information Schedule or any Purchaser wishing to change the account
specified for it in the Information Schedule such account or accounts in the
United States as such Purchaser may from time to time designate in writing,
notwithstanding any contrary provision herein or in any Note with respect to the
place of payment. Each Purchaser agrees that, before disposing of any Note, it
will make a notation thereon (or on a schedule attached thereto) of all
principal payments previously made thereon and of the date to which interest
thereon has been paid. The Company agrees to afford the benefits of this
paragraph 11A to any Transferee which shall have made the same agreement as the
Purchasers have made in this paragraph 11A.
11B. EXPENSES. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save each Purchaser and
any Transferee harmless against liability for the payment of, all out-of-pocket
expenses arising in connection with such transactions, including (i) all
document production and duplication charges and the fees and expenses of any
special counsel engaged by the Purchasers or any Transferee in connection with
this Agreement and any subsequent proposed modification of, or proposed consent
under, this Agreement, whether or not such proposed modification shall be
effected or proposed consent granted, (ii) the costs and expenses, including
attorneys' fees, incurred by any Purchaser or any Transferee in enforcing any
rights under this Agreement or the Notes or in responding to any subpoena or
other legal process issued in connection with this Agreement or the transactions
contemplated hereby or by reason of any Purchaser's or any Transferee's having
acquired any Note, including without limitation costs and expenses incurred in
any bankruptcy case of the Company or any Affiliate and (iii) with the Company's
prior consent, any other costs and expenses in connection with the transactions
contemplated hereby not otherwise specified by this Agreement, including this
paragraph 11B. The obligations of the Company under this paragraph 11B shall
survive termination of this Agreement, the transfer of any Note or portion
thereof or interest therein by any Purchaser or any Transferee and the payment
of any Note.
11C. CONSENT TO AMENDMENTS. This Agreement may be amended, and the
Company may take any action herein prohibited,
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<PAGE>
or omit to perform any act herein required to be performed by it, if the Company
shall obtain the written consent to such amendment, action or omission to act,
of the Required Holder(s) of the Notes of each Series except that, (i) with the
written consent of the holders of all Notes of a particular Series, and if an
Event of Default shall have occurred and be continuing, of the holders of all
Notes of all Series, at the time outstanding (and not without such written
consents), the Notes of such Series may be amended or the provisions thereof
waived to change the maturity thereof, to change or affect the principal
thereof, or to change or affect the rate or time of payment of interest or
premium payable with respect to the Notes of such Series and (ii) without the
written consent of the holder or holders of all Notes at the time outstanding,
no amendment to or waiver of the provisions of this Agreement shall change or
affect the provisions of paragraph 7A or this paragraph 11C insofar as such
provisions relate to proportions of the principal amount of the Notes of any
Series, or the rights of any individual holder of Notes, required with respect
to any declaration of Notes to be due and payable or with respect to any
consent. Each holder of any Note at the time or thereafter outstanding shall be
bound by any consent authorized by this paragraph 11C, whether or not such Note
shall have been marked to indicate such consent, but any Notes issued thereafter
may bear a notation referring to any such consent. No course of dealing between
the Company and the holder of any Note nor any delay in exercising any rights
hereunder or under any Note shall operate as a waiver of any rights of any
holder of such Note. As used herein and in the Notes, the term "THIS AGREEMENT"
and references thereto shall mean this Agreement as it may from time to time be
amended or supplemented.
11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES.
The Notes are issuable as registered notes without coupons in denominations of
at least $5,000,000, except as may be necessary to reflect any principal amount
not evenly divisible by $1,000,000. The Company shall keep at its principal
office a register in which the Company shall provide for the registration of
Notes and of transfers of Notes. Upon surrender for registration of transfer of
any Note at the principal office of the Company, the Company shall, at its
expense, execute and deliver one or more new Notes of like tenor and of a like
aggregate principal amount, registered in the name of such transferee or
transferees. At the option of the holder of any Note, such Note may be
exchanged for other Notes of like tenor and of any authorized denominations, of
a like aggregate principal amount, upon surrender of the Note to be exchanged at
the principal office of the Company. Whenever any Notes are so surrendered for
exchange, the Company shall, at its expense, execute and deliver the Notes which
the holder making the exchange is entitled to receive. Each installment of
principal payable on each installment date upon each new Note issued upon
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<PAGE>
any such transfer or exchange shall be in the same proportion to the unpaid
principal amount of such new Note as the installment of principal payable on
such date on the Note surrendered for registration of transfer or exchange bore
to the unpaid principal amount of such Note. No reference need be made in any
such new Note to any installment or installments of principal previously due and
paid upon the Note surrendered for registration of transfer or exchange. Every
Note surrendered for registration of transfer or exchange shall be duly
endorsed, or be accompanied by a written instrument of transfer duly executed,
by the holder of such Note or such holder's attorney duly authorized in writing.
Any Note or Notes issued in exchange for any Note or upon transfer thereof shall
carry the rights to unpaid interest and interest to accrue which were carried by
the Note so exchanged or transferred, so that neither gain nor loss of interest
shall result from any such transfer or exchange. Upon receipt of written notice
from the holder of any Note of the loss, theft, destruction or mutilation of
such Note and, in the case of any such loss, theft or destruction, upon receipt
of such holder's unsecured indemnity agreement, or in the case of any such
mutilation upon surrender and cancellation of such Note, the Company will make
and deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed or
mutilated Note. Each holder of Notes agrees to transfer its Notes only to
Institutional Investors and otherwise in accordance with applicable securities
laws. Upon the request of the Company, each Person to whom a holder of a Note
proposes to sell its Note shall provide the Company with a written certificate
containing such Person's taxpayer identification number and a representation
that such Person is an "Institutional Investor" within the meaning of this
Agreement.
11E. PERSONS DEEMED OWNERS; PARTICIPATIONS. Prior to due presentment
for registration of transfer, the Company may treat the Person in whose name any
Note is registered as the owner and holder of such Note for the purpose of
receiving payment of principal of and premium, if any, and interest on such Note
and for all other purposes whatsoever, whether or not such Note shall be
overdue, and the Company shall not be affected by notice to the contrary.
Subject to the preceding sentence, the holder of any Note may from time to time
grant participations in all or any part of such Note to any Person on such terms
and conditions as may be determined by such holder in its sole and absolute
discretion.
11F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement and the Notes, the transfer by any Purchaser of any
Note or portion thereof or interest therein and the payment
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<PAGE>
of any Note, and may be relied upon by any Transferee, regardless of any
investigation made at any time by or on behalf of any Purchaser or any
Transferee. Subject to the preceding sentence, this Agreement and the Notes
embody the entire agreement and understanding between the parties hereto with
respect to the subject matter hereof and supersede all prior agreements and
understandings relating to such subject matter.
11G. SUCCESSORS AND ASSIGNS. All covenants and other agreements in
this Agreement contained by or on behalf of any of the parties hereto shall bind
and inure to the benefit of the respective successors and assigns of the parties
hereto (including, without limitation, any Transferee) whether so expressed or
not.
11H. DISCLOSURE TO OTHER PERSONS. (1) The Company acknowledges that
each Purchaser and each holder of any Note may deliver copies of any financial
statements and other documents delivered to it, and disclose any other
information disclosed to it, by or on behalf of the Company or any Subsidiary in
connection with or pursuant to this Agreement to (i) its directors, officers,
employees, agents and professional consultants, (ii) any Purchaser or holder of
any Note, (iii) any Person to which it offers to sell any Note or any part
thereof, (iv) any Person to which it sells or offers to sell a participation in
all or any part of any Note, (v) any federal or state regulatory authority
having jurisdiction over it, (vi) the National Association of Insurance
Commissioners or any similar organization or (vii) any other Person to which
such delivery or disclosure may be necessary or appropriate (a) in compliance
with any law, rule, regulation or order applicable to it, (b) in response to any
subpoena or other legal process, (c) in connection with any litigation to which
it is a party or (d) in order to protect the investment of any holder in any
Note.
(2) The Company agrees that, at any time that it is not subject to
Section 13 or 15(d) of the Exchange Act, it will furnish to any Purchaser or
holder of any Note or to a prospective purchaser of any Note designated by such
Purchaser or holder, upon the request of such Purchaser, holder or such
prospective purchaser, on or prior to the date such Note is to be sold to such
prospective purchaser, the following information (which shall be reasonably
current in relation to the date of such sale under this paragraph): a very
brief statement of the nature of the business of the Company and the products
and services it offers, and the Company's most recent audited balance sheet, if
available, and profit and loss and retained earnings statements, and, if
available, similar audited financial statements for the two preceding fiscal
years. In addition, the Company agrees to provide to such Purchaser or holder
or such prospective purchaser any other information which may be required
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<PAGE>
so that a Transferee may be entitled to the benefits of Rule 144A under the
Securities Act.
11I. NOTICES. All written communications provided for hereunder
shall be sent by first class mail or nationwide overnight delivery service (with
charges prepaid) and (i) if to any Person listed in the Information Schedule
attached hereto, addressed to it at the address specified for such
communications in such Information Schedule, or at such other address as it
shall have specified in writing to the Person sending such communication, and
(ii) if to any Purchaser or holder of any Note which is not a Person listed in
such Information Schedule, addressed to it at such address as it shall have
specified in writing to the Person sending such communication or, if any such
holder shall not have so specified an address, then addressed to such holder in
care of the last holder of such Note which shall have so specified an address to
the Person sending such communication, provided, however, that any such
communication to the Company may also, at the option of the Person sending such
communication, be delivered by any other means either to the Company at its
address specified in the Information Schedule or to any Authorized Officer of
the Company.
11J. DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
11K. SATISFACTION REQUIREMENT. If any agreement, certificate or
other writing, or any action taken or to be taken, is by the terms of this
Agreement required to be satisfactory to any Purchaser, to any holder of Notes
or to the Required Holder(s), the determination of such satisfaction shall be
made by such Purchaser, such holder or the Required Holder(s), as the case may
be, in the sole and exclusive judgment (exercised in good faith) of the Person
or Persons making such determination.
11L. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW
OF THE STATE OF NEW YORK.
11M. EFFECT ON EXISTING SHELF AGREEMENTS. Fleetwood Credit, by its
execution of the acknowledgement attached hereto, and you agree that the
transfers of the Fleetwood Credit Notes in accordance with the provisions of
paragraph 2 shall be permitted notwithstanding any provisions of the 1991 Shelf
Agreement or the 1993 Shelf Agreement to the contrary, and any such contrary
provisions are hereby waived to the extent necessary to permit such transfers.
Fleetwood Credit, by its execution of the acknowledgement attached hereto,
further agrees that upon giving effect to such transfers, the Purchasers shall
be relieved from any continuing obligations under the 1991 Shelf Agreement and
the
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<PAGE>
1993 Shelf Agreement, all such obligations being hereby assigned to, and assumed
by, the Company.
11N. COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, and it
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart.
11O. BINDING AGREEMENT. When this Agreement is executed and
delivered by the Company and each Purchaser, it shall become a binding agreement
between the Company and the Purchasers.
Very truly yours,
FLEETWOOD ENTERPRISES, INC.
By
-----------------------------
Paul M. Bingham
Financial Vice President
The foregoing Agreement is
hereby accepted as of the
date first above written.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By
---------------------------
Title: Second Vice President
35
<PAGE>
The undersigned hereby acknowledges
and agrees to the provisions of
paragraph 11M above as of the date
first above written.
FLEETWOOD CREDIT CORP.
By
-----------------------------
Marvin T. Runyon III
Vice President - Treasurer
36
<PAGE>
EXHIBIT A
[FORM OF FIXED RATE NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
MAY NOT BE OFFERED OR SOLD IN VIOLATION OF SUCH ACT.
FLEETWOOD ENTERPRISES, INC.
SENIOR NOTE
No. R-
ORIGINAL PRINCIPAL AMOUNT:
ORIGINAL ISSUE DATE:
INTEREST RATE: 8.65%
INTEREST PAYMENT DATES: June 15 and December 15
FINAL MATURITY DATE: August 14, 1996
FOR VALUE RECEIVED, the undersigned, FLEETWOOD ENTERPRISES, INC.
(herein called the "Company"), a corporation organized and existing under the
laws of the State of Delaware, hereby promises to pay to ,
or registered assigns, the principal sum of
DOLLARS on the Final Maturity Date with interest (computed on the basis of a
360-day year--30-day month) (a) on the unpaid balance thereof at the Interest
Rate per annum specified above, payable on each Interest Payment Date specified
above and on the Final Maturity Date specified above, commencing with the
Interest Payment Date next succeeding the date hereof, until the principal
hereof shall have become due and payable, and (b) on any overdue payment
(including any overdue prepayment) of principal, any overdue payment of premium
and any overdue payment of interest, payable on each Interest Payment Date as
aforesaid (or, at the option of the registered holder hereof, on demand), at a
rate per annum from time to time equal to the greater of (i) 1% plus the
Interest Rate specified above or (ii) the rate of interest publicly announced by
Morgan Guaranty Trust Company of New York from time to time in New York City as
its Prime Rate. Interest payable on an Interest Payment Date that is not a
Business Day (as defined in the Agreement described below) shall be payable on
the next succeeding day that is a Business Day.
Payments of principal, premium if any, and interest are to be made at
the main office of Morgan Guaranty Trust Company of New York in New York City or
at such other place as the holder
A-1
<PAGE>
hereof shall designate to the Company in writing, in lawful money of the United
States of America.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to a Note Agreement, dated as of April 22, 1996 (herein
called the "Agreement"), between the Company and The Prudential Insurance
Company of America and is entitled to the benefits thereof. As provided in the
Agreement, this Note is subject to prepayment, in whole or from time to time in
part, with a premium as specified in the Agreement.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for a like principal amount will be issued to, and registered in the name of,
the transferee. Prior to due presentment for registration of transfer, the
Company may treat the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other purposes, and the
Company shall not be affected by any notice to the contrary.
In case an Event of Default, as defined in the Agreement, shall occur
and be continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner and with the effect provided in the
Agreement.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF SUCH STATE.
FLEETWOOD ENTERPRISES, INC.
By
-----------------------------
Paul M. Bingham
Financial Vice President
A-2
<PAGE>
EXHIBIT D
[FORM OF OPINION OF COMPANY'S COUNSEL]
[Letterhead of ]
[Date of Closing]
The Prudential Insurance
Company of America
c/o The Prudential Capital Group
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102-4069
Dear Sirs:
As General Counsel of Fleetwood Enterprises, Inc. (the "Company"), I
am familiar with the Note Agreement, dated as of April 22, 1996, between the
Company and The Prudential Insurance Company of America (the "Agreement"),
pursuant to which the Company has issued to you today Senior Notes of the
Company in the aggregate principal amount of $80,000,000 (the "Notes"). All
terms used herein that are defined in the Agreement have the respective meanings
specified in the Agreement.
In this connection, I have examined such certificates of public
officials, certificates of officers of the Company and copies certified to my
satisfaction of corporate documents and records of the Company and of other
papers, and have made such other investigations, as I have deemed relevant and
necessary as a basis for my opinion hereinafter set forth. I have relied upon
such certificates of public officials and of officers of the Company with
respect to the accuracy of material factual matters contained therein which were
not independently established. With respect to the opinion expressed in
paragraph 3 (and to the extent it covers the same matters, paragraph 4) below, I
have also relied, without independent investigation, upon the accuracy of the
representations made by each of you in paragraph 9 of the Agreement. The
Company has requested that I deliver this opinion pursuant to paragraph 3A of
the Agreement, and we understand and agree that you may rely on the opinions
expressed herein.
Based on the foregoing, it is my opinion that:
1. The Company is a corporation duly organized and validly existing
in good standing under the laws of the State of
D-1
<PAGE>
Delaware. Each Subsidiary is a corporation duly organized and validly existing
in good standing under the laws of its jurisdiction of incorporation. The
Company and its Subsidiaries have the corporate power to carry on their
respective businesses as now being conducted. Each of the Company and its
Subsidiaries is qualified to transact business in every jurisdiction where such
qualification is required except where the failure so to qualify would not
result in a Material Adverse Effect. The Company has no Subsidiaries other than
as set forth in Schedule I attached hereto.
2. The Agreement and the Notes have been duly authorized by all
requisite corporate action and duly executed and delivered by authorized
officers of the Company, and are valid obligations of the Company, legally
binding upon and enforceable against the Company in accordance with their
respective terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and (b) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law), and the Notes are entitled to the benefits of the Agreement.
3. It is not necessary in connection with the offering, issuance,
sale and delivery of the Notes under the circumstances contemplated by the
Agreement to register the Notes under the Securities Act or to qualify an
indenture in respect of the Notes under the Trust Indenture Act of 1939, as
amended.
4. The execution and delivery of the Agreement and the Notes, the
offering, issuance and sale of the Notes and fulfillment of and compliance with
the respective provisions of the Agreement and the Notes do not conflict with,
or result in a breach of the terms, conditions or provisions of, or constitute a
default under, or result in any violation of, or result in the creation of any
Lien upon any of the properties or assets of the Company or any of its
Subsidiaries pursuant to, or require any authorization, consent, approval,
exemption, or other action by or notice to or filing with any court,
administrative or governmental body or other Person (other than routine filings
after the date hereof with the Securities and Exchange Commission and/or state
Blue Sky authorities) pursuant to, the charter or by-laws of the Company or any
of its Subsidiaries, any applicable law (including any securities or Blue Sky
law), statute, rule or regulation or (insofar as is known to me after having
made due inquiry with respect thereto) any agreement (including, without
limitation, any agreement listed in Exhibit E to the Agreement), instrument,
order, judgment or decree to which the Company or any of its Subsidiaries is a
party or otherwise subject.
D-2
<PAGE>
Very truly yours,
D-3
<PAGE>
EXHIBIT E
LIST OF AGREEMENTS RESTRICTING INDEBTEDNESS
None.
E-1
<PAGE>
EXHIBIT F
LIST OF SUBSIDIARIES
[TO COME]
F-1
<PAGE>
EXHIBIT G
G-1
<PAGE>
EXHIBIT H
SUBORDINATION PROVISIONS TO BE MADE APPLICABLE TO
SUBORDINATED INDEBTEDNESS OF THE COMPANY
For any indebtedness incurred by a Company to qualify as Subordinated
Debt such indebtedness must be evidenced by an instrument or instruments each
containing, or referring to an agreement governing the provisions of such
instrument or instruments containing subordination provisions substantially
similar to those set forth below.
SUBORDINATION
1. SUBORDINATION. Payment of principal, premium, if any, and
interest in respect of the indebtedness outstanding under [issued pursuant to]
this [Note][Agreement] shall be junior and subordinate and subject in right of
payment to all Senior Debt (as defined in the following section 11) of the
Company as provided in the following sections 2 to 11, inclusive. The Company
will mark its books of account to show that the Subordinated Debt is
subordinated to Senior Debt in the manner and to the extent set forth in the
following sections 2 to 11, inclusive, and will cause its financial statements
prepared for delivery to any person to make specific reference to the provisions
of such sections.
2. PAYMENTS ON ACCOUNT OF SUBORDINATED INDEBTEDNESS. Unless and
until all Senior Debt shall have been paid in full, the Company will not make,
and no holder of Subordinated Debt will demand, accept, or receive any direct or
indirect payment (in cash, property, by setoff or otherwise) of or on account of
any Subordinated Debt and no such payment shall be due, PROVIDED that if and so
long as no Default or Event of Default (as defined in any instrument evidencing
Senior Debt or under which Senior Debt is created) shall exist or would exist
after giving effect to such payment, nothing contained in this section 2 shall
prevent the Company from making, or the holders of the Subordinated Debt from
accepting and receiving, any payment on account of principal of Subordinated
Debt on the originally scheduled maturity date for such payment, or on account
of interest on Subordinated Debt on the date originally scheduled for payment of
such interest. Unless and until all Senior Debt shall have been paid in full,
no holder of Subordinated Debt will commence any proceeding against the Company,
or join with any creditor in any such proceeding, under any bankruptcy,
reorganization, readjustment of debt, arrangement of debt, receivership,
liquidation or insolvency law or statute of the
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Federal or any state government, unless the holders of Senior Debt shall also
join in bringing such proceeding.
3. INSOLVENCY, ETC. In the event of (i) any insolvency or
bankruptcy proceeding, or any receivership, liquidation, reorganization or other
similar proceeding in connection therewith, relative to the Company or its
creditors or its property, or (ii) any proceeding for voluntary liquidation,
dissolution or other winding-up of the Company, and whether or not involving
insolvency or bankruptcy, or (iii) any assignment for the benefit of creditors,
or (iv) any distribution, division, marshalling or application of any of the
properties or assets (including, without limitation, properties or assets
securing Subordinated Debt) of the Company or the proceeds thereof, to
creditors, voluntary or involuntary, and whether or not involving legal
proceedings, then and in any such event:
(a) all Senior Debt (including any interest thereon and any other
obligation with respect to such Senior Debt accruing after the commencement
of such proceedings) shall first be paid in full before any payment or
distribution of any character, whether in cash, securities or other
property, shall be made by the Company in respect of any Subordinated Debt;
and
(b) all principal of and premium, if any, and interest on the
Subordinated Debt shall forthwith (notwithstanding the terms of Section 2)
become due and payable, and any payment or distribution of any character,
whether in cash, securities, or other property, which would otherwise (but
for the terms hereof) be payable or deliverable by the Company in respect
of any Subordinated Debt (including any payment or distribution in respect
of any Subordinated Debt by reason of any other indebtedness of the Company
being subordinated to the Subordinated Debt or by reason of any properties
or assets of the Company securing Subordinated Debt), shall be paid or
delivered directly to the holders of Senior Debt at the time outstanding
(or their respective representatives), ratably according to the respective
aggregate amounts remaining unpaid thereon, until all Senior Debt shall
have been paid in full (but subject to the power of a court of competent
jurisdiction to make other equitable provisions reflecting the rights of
the Senior Debt and the holders thereof with respect to the Subordinated
Debt by a lawful plan of reorganization under applicable bankruptcy law),
and the holders of the Subordinated Debt at the time outstanding
irrevocably authorize, empower and direct all receiver, trustees,
liquidators, conservators and others having authority in the premises to
effect all such payments and deliveries.
H-2
<PAGE>
4. PAYMENTS AND DISTRIBUTIONS RECEIVED. If any payment or
distribution of any character (whether in cash, securities, or other property)
or any security shall be received by any holder of any of the Subordinated Debt
in contravention of any of the terms hereof and before all Senior Debt shall
have been paid in full, such payment or distribution or security shall be held
in trust for the benefit of, and shall be paid over or delivered and transferred
to, the holders of the Senior Debt at the time outstanding (or their respective
representatives) for application to the payment of all Senior Debt remaining
unpaid, ratably according to the respective aggregate amounts remaining unpaid
thereon, to the extent necessary to pay all such Senior Debt in full. In the
event of the failure of any holder of any of the Subordinated Debt to endorse or
assign any such payment, distribution or security, each holder of Senior Debt
and each such holder's representative is hereby irrevocably authorized to
endorse or assign the same.
5. EXCESS SENIOR INDEBTEDNESS PAYMENT, SUBROGATION, ETC. Upon the
payment in full of all Senior Debt, the holders of the Subordinated Debt (i)
shall be entitled to receive from the holders of the Senior Debt at the time
outstanding any payments or distributions received by such Senior Debt holders
in excess of the amount sufficient to pay all Senior Debt in full, and (ii)
shall be subrogated to any rights of the holders of Senior Debt to receive all
further payments or distributions applicable to the Senior Debt, until all
principal of and premium, if any, and interest on the Subordinated Debt shall
have been paid in full. No such payments or distributions received by the
holders of the Subordinated Debt, by reason of such subrogation, of cash,
securities, or other property, which otherwise would be paid or distributed to
the holders of Senior Debt, shall, as between the Company and its creditors
(other than the holders of the Senior Debt), on the one hand, and the holders of
the Subordinated Debt, on the other hand, be deemed to be a payment by the
Company on account of the Subordinated Debt.
6. NO SECURITY. So long as any of the Senior Debt shall not have
been paid in full, the Company shall not, and shall not permit any of its
Subsidiaries to, give and the holders of the Subordinated Debt shall not demand,
accept or receive any security, direct or indirect, for any Subordinated
Indebtedness.
7. OBLIGATIONS NOT IMPAIRED. Except to the extent these sections 1
to 11, inclusive, provide that (i) Subordinated Debt may not become due and
payable or be paid, and (ii) a holder of Subordinated Debt may not commence or
join in any proceeding under any bankruptcy, reorganization, readjustment of
debt, arrangement of debt, receivership, liquidation or insolvency law or
statute of the Federal or any State government unless the holders of Senior Debt
shall also join in bringing such
H-3
<PAGE>
proceeding, nothing contained in these sections 1 to 11, inclusive, shall
impair, as between the Company and the holder of any Subordinated Indebtedness,
the obligation of the Company, which is absolute and unconditional, to pay to
the holder thereof the principal thereof and the premium, if any, and interest
thereon as and when the same shall become due and payable in accordance with the
terms thereof, or shall prevent the holder of any Subordinated Debt, upon
default with respect to the Subordinated Debt, from exercising all rights,
powers and remedies otherwise provided therein or by applicable law, all subject
to the rights, if any, of the holders of Senior Debt under these sections 1 to
11, inclusive, to receive cash, securities or other property otherwise payable
or deliverable to the holder of the Subordinated Debt.
8. SUBORDINATION NOT AFFECTED, ETC. The terms of these sections 1
to 11, inclusive, the subordination effected thereby, and the rights of the
holders of the Senior Debt, shall not be affected by (i) any amendment of or
addition or supplement to any Senior Debt or any instrument or agreement
relating thereto; (ii) any exercise or nonexercise of any right, power or remedy
under or in respect of any Senior Debt or any instrument or agreement relating
thereto; (iii) any sale, exchange, release or other transaction affecting all or
any part of any property at any time pledged or mortgaged to secure, or however
securing, Senior Debt; or (iv) any waiver, consent, release, indulgence,
extension, renewal, modification, delay or other action, inaction or omission,
in respect of any Senior Debt or any instrument or agreement relating thereto;
whether or not any holder of any Subordinated Debt shall have had notice or
knowledge of any of the foregoing.
9. CHANGES, WAIVER, ETC. Neither these sections 1 to 11, inclusive,
nor any term thereof may be changed or waived except with the prior written
consent of the holders of all the Senior Debt at the time outstanding. No
Subordinated Debt or any term thereof may be changed, waived or cancelled in any
manner which would have any adverse effect upon the rights of the holders of the
Senior Debt at the time outstanding.
10. SUBORDINATION A CONDITION TO CONSENT OF HOLDERS OF SENIOR DEBT TO
ADDITIONAL DEBT. Each holder of the indebtedness issued pursuant to this
Agreement, by his acceptance thereof, agrees that the consent of the holders of
the Senior Debt referred to in section 11 to the incurrence by the Company of
such indebtedness has been given in reliance upon the subordination of such
indebtedness to the Senior Debt.
11. DEFINITIONS, ETC. As used in these sections 1 to 11, inclusive,
the following terms shall have the following respective meanings:
H-4
<PAGE>
"Senior Debt" shall mean all principal, premium, if any, interest and
all other amounts payable under (i) the 8.65% Senior Notes due August 14,
1996, the Series A Floating Rate Notes due November 30, 2001, and the
Series B Floating Rate Notes due June 1, 1995, in each case issued by the
Company pursuant to the Note Agreement dated as of April 22, 1996, as
amended (the "Note Agreement"), between the Company and The Prudential
Insurance Company of America; (ii) the Note Agreement, (iii) any Guarantee
of any amount described in the preceding clauses (i) and (ii), and (iv) any
refundings, renewals, or other modifications thereof.
"Subordinated Debt" shall mean all principal and premium, if any, and
interest on any indebtedness of the Company evidenced by an instrument or
instruments each containing, or referring to an agreement governing the
provisions or instruments containing, subordination provisions
substantially similar to those set forth in these sections 1 to 11,
inclusive.
For all purposes of these sections 1 to 11, inclusive, Senior Debt shall not be
deemed to have been paid in full unless (i) the holders thereof (or their duly
authorized representatives) shall have received cash or readily marketable
securities, taken at their then market value, equal to the amount of Senior Debt
at the time outstanding, or (ii) other equitable provisions have been effected
by action of a court of competent jurisdiction or agreement among the holders of
Senior Debt.
H-5
