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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
ELCO INDUSTRIES, INC.
(NAME OF SUBJECT COMPANY)
E.I. TEXTRON INC.
A WHOLLY OWNED SUBSIDIARY OF
TEXTRON INC.
(BIDDERS)
COMMON STOCK, $5.00 PAR VALUE
(INCLUDING THE ASSOCIATED RIGHTS)
(TITLE OF CLASS OF SECURITIES)
00028442010
(CUSIP NUMBER OF COMMON STOCK)
WAYNE W. JUCHATZ
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
TEXTRON INC.
40 WESTMINSTER STREET
PROVIDENCE, RI 02903-2596
(401) 421-2800
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
Copies to:
CHARLES M. NATHAN, ESQ.
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
ONE NEW YORK PLAZA
NEW YORK, NEW YORK 10004-1980
(212) 859-8000
------------------------
CALCULATION OF FILING FEE
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<TABLE>
<S> <C>
TRANSACTION VALUATION* AMOUNT OF FILING FEE
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$184,922,784.00 $36,984.56
</TABLE>
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* For the purpose of calculating the fee only, this amount assumes the purchase
of 5,136,744 shares of Common Stock of Elco Industries, Inc. at $36.00 per
share. Such number of shares includes all outstanding shares as of September
8, 1995, and assumes the exercise of all stock options to purchase shares of
Common Stock outstanding as of such date.
/ / 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.
<TABLE>
<S> <C>
AMOUNT PREVIOUSLY PAID: FILING PARTY:
FORM OR REGISTRATION NO.: DATE FILED:
</TABLE>
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<PAGE> 2
This Statement relates to a tender offer by E.I. Textron Inc., a Delaware
corporation (the "Offeror") and a wholly owned subsidiary of Textron Inc., a
Delaware corporation (the "Parent"), to purchase all outstanding shares of
Common Stock, par value $5.00 per share (the "Shares"), of Elco Industries,
Inc., a Delaware corporation (the "Company"), including the associated Rights
(as defined below), at a purchase price of $36.00 per Share, net to the seller
in cash, without interest, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated September 19, 1995 (the "Offer to
Purchase"), and in the related Letter of Transmittal (which together constitute
the "Offer"), copies of which are filed as Exhibits (a)(1) and (a)(2) hereto,
respectively, and which are incorporated herein by reference.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Elco Industries, Inc. The address of
the principal executive offices of the Company is set forth in Section 8
("Certain Information Concerning the Company") of the Offer to Purchase and is
incorporated herein by reference.
(b) The exact title of the class of equity securities being sought in the
Offer is the Common Stock, par value $5.00 per share, of the Company, including
the associated Rights as defined in the Rights Agreement between the Company and
The First National Bank of Chicago, as Rights Agent, dated as of January 20,
1988, as amended June 24, 1988 and September 12, 1995 (the "Rights Agreement").
The information set forth in the Introduction to the Offer to Purchase is
incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of Shares;
Dividends") of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a) through (d), (g): The information set forth in the Introduction and
Section 9 ("Certain Information Concerning the Parent and the Offeror") of the
Offer to Purchase, and in Annex I thereto, is incorporated herein by reference.
(e) and (f): None of the Offeror or the Parent, nor, to the best of their
knowledge, any of the persons listed in Annex I of the Offer to Purchase, has
during the last five years (i) been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting activities subject
to, federal or state securities laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) None.
(b) The information set forth in the Introduction and Section 11
("Background of the Offer; Past Contacts, Transactions or Negotiations with the
Company") and Section 8 ("Certain Information Concerning the Company") of the
Offer to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a), (b) and (c): The information set forth in Section 10 ("Source and
Amount of Funds") of the Offer to Purchase is incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a) through (e): The information set forth in the Introduction, Section 7
("Effect of the Offer on the Market for Shares, Stock Quotation, and
Registration Under the Exchange Act") and Section 12 ("Purpose of the Offer and
the Merger; Appraisal Rights; Exemption from the Rights Agreement; Plans for the
Company") of the Offer to Purchase is incorporated herein by reference. Except
as set forth in the Introduction and Section 12 of the Offer to Purchase,
neither the Parent nor the Offeror have any present
1
<PAGE> 3
plans or proposals that would result in an extraordinary corporate transaction,
such as a merger, reorganization, liquidation or sale or transfer of a material
amount of assets involving the Company, or any other material changes in the
Company's capitalization, dividend policy, corporate structure or business or
composition of its board of directors or management.
(f) and (g): The information set forth in Section 7 ("Effect of the Offer
on the Market for Shares, Stock Quotation, and Registration under the Exchange
Act") of the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) Neither the Parent nor the Offeror (or their respective subsidiaries)
beneficially owns any Shares and, to the best knowledge of the Parent, none of
the directors or executive officers of the Parent or the Offeror beneficially
owns any Shares.
(b) No transactions in the Shares have been effected during the past sixty
days by the Parent or the Offeror (or their respective subsidiaries) or, to the
best knowledge of the Parent, any of the directors or executive officers of the
Parent or the Offeror.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT
COMPANY'S SECURITIES.
The information set forth in the Introduction and Sections 9 ("Certain
Information Concerning the Parent and the Offeror"), 12 ("Purpose of the Offer
and the Merger; Appraisal Rights; Exemption from Rights Agreement; Plans for the
Company"); and 13 ("The Merger Agreement") of the Offer to Purchase is
incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and in Section 17 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9 ("Certain Information Concerning the
Parent and the Offeror") of the Offer to Purchase is incorporated herein by
reference.
The incorporation by reference herein of the above-mentioned financial
information does not constitute an admission that such information is material
to a decision by a security holder of the Company as whether to sell, tender or
hold Shares being sought in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Section 12 ("Purpose of the Offer and the
Merger; Appraisal Rights; Exemption from Rights Agreement; Plans for the
Company") and Section 13 ("The Merger Agreement") of the Offer to Purchase is
incorporated herein by reference.
(b) and (c) The information set forth in Sections 10 ("Source and Amount of
Funds") and 16 ("Certain Regulatory and Legal Matters") of the Offer to Purchase
is incorporated herein by reference.
(d) The information set forth in Section 7 ("Effect of the Offer on the
Market for Shares, Stock Quotation, and Registration under the Exchange Act") of
the Offer to Purchase is incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal is incorporated herein by reference in its entirety.
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<PAGE> 4
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated September 19, 1995.
(a)(2) Letter of Transmittal.
(a)(3) Letter from Dillon, Read & Co. Inc., as Dealer Manager, to Brokers,
Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(4) Letter from Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees to Clients.
(a)(5) Letter from the Employee Stock Ownership Plan of Elco Industries,
Inc. to Participants.
(a)(6) Letter from Harris Trust and Savings Bank to Participants in the
Elco Shareholder Investment Service.
(a)(7) Notice of Guaranteed Delivery.
(a)(8) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(9) Summary Announcement, dated September 19, 1995.
(a)(10) Joint Press Release issued by the Parent and the Company on
September 13, 1995 (filed as Exhibit 1 to Form 8-K filed by Elco Industries,
Inc. with the Securities and Exchange Commission on September 15, 1995,
reporting an event on September 13, 1995, and incorporated herein by reference).
(a)(11) Agreement and Plan of Merger, dated as of September 12, 1995, among
the Parent, the Offeror and the Company.
(b)(1) Credit Agreement dated as of November 1, 1993 among the Parent, the
Lenders listed therein and Bankers Trust Company as Administrative Agent (the
"Credit Agreement") (filed as Exhibit 10.30A to the Parent's Annual Report on
Form 10-K for the fiscal year ended January 1, 1994 and incorporated herein by
reference).
(b)(2) First Amendment dated as of October 30, 1994 to the Credit Agreement
(filed as Exhibit 10.22B to the Parent's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 and incorporated herein by reference).
(b)(3) Second Amendment dated as of July 1, 1995 to the Credit Agreement.
(c) -- same as (a)(11) above.
(d) None.
(e) Not applicable.
(f) None.
3
<PAGE> 5
SIGNATURE
After due inquiry and to the best of its knowledge and belief, each of the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: September 19, 1995
E.I. TEXTRON INC.
By: /s/ ARNOLD M. FRIEDMAN
------------------------------------
Name: Arnold M. Friedman
Title: Vice President
TEXTRON INC.
By: /s/ ARNOLD M. FRIEDMAN
------------------------------------
Name: Arnold M. Friedman
Title: Vice President &
Deputy General Counsel
4
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE
EXHIBIT DESCRIPTION NO.
------- ---------------------------------------------------------------------- ----
<S> <C> <C> <C>
(a)(1) -- Offer to Purchase, dated September 19, 1995.
(a)(2) -- Letter of Transmittal.
(a)(3) -- Letter from Dillon, Read & Co. Inc., as Dealer Manager, to Brokers,
Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(4) -- Letter from Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees to Clients.
(a)(5) -- Letter from the Employee Stock Ownership Plan of Elco Industries, Inc.
to Participants.
(a)(6) -- Letter from Harris Trust and Savings Bank to Participants in the Elco
Shareholder Investment Service.
(a)(7) -- Notice of Guaranteed Delivery.
(a)(8) -- Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(9) -- Summary Announcement, dated September 19, 1995.
(a)(10) -- Joint Press Release issued by the Parent and the Company on September
13, 1995 (filed as Exhibit 1 to Form 8-K filed by Elco Industries,
Inc. with the Securities and Exchange Commission on September 15,
1995, reporting an event on September 13, 1995, and incorporated
herein by reference).
(a)(11) -- Agreement and Plan of Merger, dated as of September 12, 1995, among
the Parent, the Offeror and the Company.
(b)(1) -- Credit Agreement dated as of November 1, 1993 among the Parent, the
Lenders listed therein and Bankers Trust Company as Administrative
Agent (the "Credit Agreement") (filed as Exhibit 10.30A to the
Parent's Annual Report on Form 10-K for the fiscal year ended January
1, 1994 and incorporated herein by reference).
(b)(2) -- First Amendment dated as of October 30, 1994 to the Credit Agreement
(filed as Exhibit 10.22B to the Parent's Annual Report on Form 10-K
for the fiscal year ended December 31, 1994 and incorporated herein by
reference).
(b)(3) -- Second Amendment dated as of July 1, 1995 to the Credit Agreement.
(c) -- -- same as (a)(11) above.
(d) -- None.
(e) -- Not applicable.
(f) -- None.
</TABLE>
5
<PAGE> 1
Exhibit (a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
ELCO INDUSTRIES, INC.
AT
$36.00 NET PER SHARE
BY
E.I. TEXTRON INC.
A WHOLLY OWNED SUBSIDIARY OF
TEXTRON INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON TUESDAY, OCTOBER 17, 1995, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (i) THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT
NUMBER OF SHARES OF COMMON STOCK OF ELCO INDUSTRIES, INC. REPRESENTING AT LEAST
66 2/3% OF ALL OUTSTANDING SHARES OF COMMON STOCK ON A FULLY DILUTED BASIS ON
THE DATE OF PURCHASE AND (ii) SATISFACTION OF CERTAIN OTHER TERMS AND
CONDITIONS. SEE SECTION 15.
THE OFFER IS BEING MADE IN CONNECTION WITH THE AGREEMENT AND PLAN OF
MERGER, DATED AS OF SEPTEMBER 12, 1995, AMONG TEXTRON INC., E.I. TEXTRON INC.,
AND ELCO INDUSTRIES, INC. THE BOARD OF DIRECTORS OF ELCO INDUSTRIES, INC. HAS
APPROVED THE MERGER AGREEMENT, THE OFFER AND THE MERGER, HAS DETERMINED THAT THE
TERMS OF THE OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE
COMPANY'S STOCKHOLDERS, AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT
THE OFFER AND TENDER THEIR SHARES IN THE OFFER.
IMPORTANT
Any stockholder desiring to tender Shares of common stock and the
associated Rights (as hereinafter defined) should either (i) complete and sign
the Letter of Transmittal or a facsimile thereof in accordance with the
instructions in the Letter of Transmittal and deliver the Letter of Transmittal
with the Shares and all other required documents to the Depositary or follow the
procedure for book-entry transfer set forth in Section 3 or (ii) request his
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for him. A stockholder having Shares registered in the name of a
broker, dealer, commercial bank, trust company or other nominee must contact
such person if he desires to tender his Shares.
Any stockholder who desires to tender Shares and cannot deliver such Shares
and all other required documents to the Depositary by the expiration of the
Offer must tender such Shares pursuant to the guaranteed delivery procedure set
forth in Section 3.
Questions and requests for assistance or additional copies of this Offer to
Purchase, the Letter of Transmittal and 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. Stockholders may also contact their broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Offer.
---------------
The Dealer Manager for the Offer is:
DILLON, READ & CO. INC.
September 19, 1995
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
Introduction............................................................................. 1
1. Terms Of The Offer................................................................. 2
2. Acceptance For Payment And Payment For Shares...................................... 4
3. Procedure For Tendering Shares..................................................... 4
4. Withdrawal Rights.................................................................. 7
5. Certain Federal Income Tax Consequences............................................ 7
6. Price Range Of Shares; Dividends................................................... 8
7. Effect Of The Offer On The Market For Shares, Stock Quotation, And Registration
Under The Exchange Act............................................................. 9
8. Certain Information Concerning The Company......................................... 10
9. Certain Information Concerning The Parent And The Offeror.......................... 12
10. Source And Amount Of Funds......................................................... 13
11. Background Of The Offer; Past Contacts, Transactions Or Negotiations With
The Company........................................................................ 14
12. Purpose Of The Offer And The Merger; Appraisal Rights; Exemption From Rights
Agreement;
Plans For The Company.............................................................. 15
13. The Merger Agreement............................................................... 17
14. Dividends And Distributions........................................................ 23
15. Certain Conditions To The Offeror's Obligations.................................... 23
16. Certain Regulatory And Legal Matters............................................... 24
17. Fees And Expenses.................................................................. 26
18. Miscellaneous...................................................................... 26
Annex I. Certain Information Concerning The Directors And Executive Officers Of The
Parent
And The Offeror............................................................... A-1
</TABLE>
i
<PAGE> 3
TO THE HOLDERS OF COMMON STOCK OF
ELCO INDUSTRIES, INC.
INTRODUCTION
E.I. Textron Inc., a Delaware corporation (the "Offeror") and a wholly
owned subsidiary of Textron Inc., a Delaware corporation (the "Parent"), hereby
offers to purchase all outstanding shares of Common Stock, par value $5.00 per
share (the "Shares"), of Elco Industries, Inc., a Delaware corporation (the
"Company"), including the associated Rights (as hereinafter defined), at a
purchase price of $36.00 per Share, net to the seller in cash, without interest,
upon the terms and subject to the conditions set forth in this Offer to Purchase
and in the related Letter of Transmittal (which together constitute the
"Offer"). Unless the context otherwise requires, all references herein to Shares
shall include the associated Rights as defined in the Rights Agreement between
the Company and The First National Bank of Chicago, as Rights Agent, dated as of
January 20, 1988, as amended June 24, 1988 and September 12, 1995 (the "Rights
Agreement"), and all references herein to Rights shall include all benefits that
may inure to holders of Rights pursuant to the Rights Agreement. Tendering
holders of Shares will not be obligated to pay brokerage fees or commissions or,
except as set forth in the Letter of Transmittal, transfer taxes on the purchase
of Shares by the Offeror pursuant to the Offer. The Offeror will pay all charges
and expenses of Dillon, Read & Co. Inc. (the "Dealer Manager"), Harris Trust
Company of New York (the "Depositary") and D.F. King & Co., Inc. (the
"Information Agent"), incurred in connection with the Offer.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE MERGER AGREEMENT (AS
HEREINAFTER DEFINED), THE OFFER AND THE MERGER (AS HEREINAFTER DEFINED), HAS
DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO AND IN THE
BEST INTERESTS OF THE COMPANY'S STOCKHOLDERS, AND RECOMMENDS THAT THE COMPANY'S
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES IN THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT
NUMBER OF SHARES REPRESENTING AT LEAST 66 2/3% OF ALL OUTSTANDING SHARES ON A
FULLY DILUTED BASIS ON THE DATE OF PURCHASE (THE "MINIMUM CONDITION"). THE OFFER
IS ALSO SUBJECT TO CERTAIN OTHER TERMS AND CONDITIONS. SEE SECTION 15.
The Chicago Dearborn Company ("Chicago Dearborn"), the Company's financial
advisor, has delivered to the Company's Board of Directors its written opinion
that the consideration to be received by the stockholders of the Company
pursuant to the Offer and the Merger is fair to such stockholders from a
financial point of view. A copy of such opinion is contained in the Company's
Statement on Schedule 14D-9 which is being distributed to the Company's
stockholders.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of September 12, 1995 (the "Merger Agreement"), among the Parent, the Offeror
and the Company. The Merger Agreement provides, among other things, that as soon
as practicable after the purchase of Shares pursuant to the Offer and the
satisfaction of the other conditions set forth in the Merger Agreement and in
accordance with the relevant provisions of the General Corporation Law of the
State of Delaware (the "DGCL"), the Offeror will be merged with and into the
Company (the "Merger"). See Section 12. Following consummation of the Merger,
the Company will continue as the surviving corporation (the "Surviving
Corporation") and will be a wholly owned subsidiary of the Parent. At the
effective time of the Merger (the "Effective Time"), each issued and outstanding
Share (other than Shares owned by the Company as treasury stock, Shares owned by
any wholly owned subsidiary of the Company, Shares owned by the Parent or any
wholly owned subsidiary of the Parent, or Shares with respect to which appraisal
rights are properly exercised under the DGCL ("Dissenting Shares")), will be
converted into and represent the right to receive $36.00 (or any higher price
that may be paid for each Share pursuant to the Offer) in cash (the "Merger
Consideration"), without interest thereon. See Section 5 for a description of
certain federal income tax consequences of the Offer and the Merger.
The Merger Agreement provides that, promptly upon the purchase of Shares
pursuant to the Offer, the Parent will be entitled to designate for election to
the Board of Directors of the Company such number of
1
<PAGE> 4
directors (rounded up to the next whole number) as will give the Parent, subject
to compliance with Section 14(f) of the Exchange Act of 1934, as amended (the
"Exchange Act"), representation on such Board of Directors equal to the product
of (i) the total number of directors on such Board of Directors and (ii) the
percentage that the aggregate number of Shares purchased by the Offeror bears to
the total number of outstanding Shares. See Section 12 "-- Board
Representation."
The Company has advised the Offeror that, as of September 8, 1995, there
were (a) 4,982,869 Shares issued and outstanding, and (b) employee and director
stock options outstanding to purchase an aggregate of 153,875 Shares. As of the
date hereof, neither the Offeror nor the Parent beneficially owns any Shares.
Based upon such information, if at least 3,424,496 Shares are validly tendered
and not withdrawn prior to the expiration of the Offer, the Minimum Condition
would be satisfied. Following the purchase of such number of Shares, under the
Company's Certificate of Incorporation and the DGCL, the Offeror would have
sufficient voting power to approve the Merger without the affirmative vote of
any other stockholder. In the event the Offeror acquires 90% or more of the
outstanding Shares in the Offer or otherwise, the Offeror and the Parent would
be able to effect the Merger pursuant to the short-form merger provisions of the
DGCL, without prior notice to, or any action by, any other stockholder of the
Company.
Tendering Shares pursuant to the Offer will not affect the right of
stockholders to receive dividends declared by the Company, if any, with a record
date prior to the date on which the Offeror purchases the Shares pursuant to the
Offer. See Sections 6 and 14.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension or
amendment), the Offeror will accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 4. The term "Expiration Date" means 12:00 Midnight, New
York City time, on Tuesday, October 17, 1995, unless the Offeror shall have
extended the period of time for which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as so
extended by the Offeror, shall expire.
If the Offeror shall decide, in its sole discretion, to increase the
consideration offered in the Offer to holders of Shares and if, at the time that
notice of such increase is first published, sent or given to holders of Shares
in the manner specified below, the Offer is scheduled to expire at any time
earlier than the expiration of a period ending on the tenth business day from,
and including, the date that such notice is first so published, sent or given,
then the Offer will be extended until the expiration of such period of ten
business days. For purposes of the Offer, a "business day" means any day other
than a Saturday, Sunday or a federal holiday, and consists of the time period
from 12:01 a.m. through 12:00 Midnight, New York City time.
THE OFFER IS CONDITIONED UPON SATISFACTION OF THE MINIMUM CONDITION. THE
OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS. SEE SECTION 15. The Offeror
reserves the right (but shall not be obligated), in accordance with applicable
rules and regulations of the Securities and Exchange Commission (the
"Commission"), to reduce the Minimum Condition (but not below 50.01% of the
outstanding Shares on a fully diluted basis) or to waive any other condition to
the Offer. If the Minimum Condition or any of the other conditions set forth in
Section 15 have not been satisfied by 12:00 Midnight, New York City time, on
Tuesday, October 17, 1995 (or any other time then set as the Expiration Date),
the Offeror may, subject to the terms of the Merger Agreement as described
below, elect to (1) extend the Offer and, subject to applicable withdrawal
rights, retain all tendered Shares until the expiration of the Offer, as
extended, (2) subject to complying with applicable rules and regulations of the
Commission, accept for payment all Shares so tendered and not extend the Offer,
or (3) terminate the Offer and not accept for payment any Shares and return all
tendered Shares to tendering stockholders. Under the terms of the Merger
Agreement, the Offeror may not (except as described in the next sentence),
without the consent of the Company, impose conditions to the Offer other than
those set
2
<PAGE> 5
forth in the Merger Agreement, modify or amend the conditions to the Offer in a
manner adverse to holders of Shares, waive or amend (below 50.01% of the
outstanding Shares on a fully diluted basis) the Minimum Condition, reduce the
number of Shares subject to the Offer, reduce the price per Share to be paid
pursuant to the Offer, extend the Offer if all of the Offer conditions are
satisfied or waived or change the form of consideration payable in the Offer.
Notwithstanding the foregoing, the Offeror may, without the consent of the
Company, extend the Offer (i) if, at the then scheduled expiration date of the
Offer, any of the conditions to the Offer shall not have been satisfied or
waived, until such time as such conditions are satisfied or waived; (ii) for any
period required by any rule, regulation, interpretation or position of the
Commission or its staff applicable to the Offer; or (iii) if all conditions to
the Offer are satisfied or waived but the number of Shares tendered is less than
90% of the then outstanding number of Shares, for an aggregate period of not
more than 10 business days (for all such extensions) beyond the latest
expiration date that would be permitted under clause (i) or (ii) of this
sentence. Subject to the terms of the Merger Agreement described above, the
Offeror reserves the right (but will not be obligated), at any time or from time
to time in its sole discretion, to extend the period during which the Offer is
open by giving oral or written notice of such extension to the Depositary and by
making a public announcement of such extension. During any such extension, all
Shares previously tendered and not withdrawn will remain subject to the Offer,
subject to the rights of a tendering stockholder to withdraw its Shares. There
can be no assurance that the Offeror will exercise its right to extend the
Offer; provided, however, that the Merger Agreement requires that so long as the
Merger Agreement is in effect and the conditions to the Offer have not been
satisfied or waived, the Offeror will cause the Offer not to expire.
Subject to the applicable rules and regulations of the Commission and
subject to the terms of the Merger Agreement described above, the Offeror also
expressly reserves the right, in its sole discretion at any time and from time
to time, (i) to delay payment for any Shares regardless of whether such Shares
were theretofore accepted for payment, or to terminate the Offer and not to
accept for payment or pay for any Shares not theretofore accepted for payment or
paid for, upon the occurrence of any of the conditions set forth in Section 15,
and (ii) at any time or from time to time, to amend the Offer in any respect, by
giving oral or written notice of such delay, termination or amendment to the
Depositary and by making a public announcement thereof. The Offeror's right to
delay payment for any Shares or not to pay for any Shares theretofore accepted
for payment is subject to the applicable rules and regulations of the
Commission, including Rule 14e-1(c) under the Exchange Act, relating to the
Offeror's obligation to pay for or return tendered Shares promptly after the
termination or withdrawal of the Offer.
Any extension of the period during which the Offer is open, delay in
acceptance for payment or payment, termination or amendment of the Offer will be
followed, as promptly as practicable, by public announcement thereof, such
announcement in the case of an extension to be issued not later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date in accordance with the public announcement requirements of Rules
14d-4(c) and 14e-1(d) under the Exchange Act. Without limiting the obligation of
the Offeror under such rule or the manner in which the Offeror may choose to
make any public announcement, the Offeror currently intends to make
announcements by issuing a press release to the Dow Jones News Service and
making any appropriate filing with the Commission.
If the Offeror makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer (other than a waiver of the Minimum Condition) or reduces the Minimum
Condition, the Offeror will disseminate additional tender offer materials and
extend the Offer if and to the extent required by Rules 14d-4(c), 14d-6(d) and
14e-1 under the Exchange Act or otherwise. The minimum period during which a
tender offer must remain open following material changes in the terms of the
offer or the information concerning the offer, other than a change in price or a
change in percentage of securities sought, will depend upon the facts and
circumstances, including the relative materiality of the changes to such terms
or information. With respect to a change in price or a change in percentage of
securities sought, a minimum ten business day period is generally required to
allow for adequate dissemination to stockholders and investor response.
The Company has provided the Offeror with the Company's list of
stockholders and security position listings for the purpose of disseminating the
Offer to holders of Shares. This Offer to Purchase and the Letter of Transmittal
will be mailed to record holders of the Shares and will be furnished to brokers,
dealers,
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<PAGE> 6
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the list of stockholders or, if applicable, who are
listed as participants in a clearing agency's security position listing for
subsequent transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Offeror will accept for payment and will pay for all Shares
validly tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 4 promptly after the later to occur of (a) the
Expiration Date and (b) subject to compliance with Rule 14e-1(c) under the
Exchange Act, the satisfaction or waiver of the conditions set forth in Section
15. Subject to compliance with Rule 14e-1(c) under the Exchange Act, the Offeror
expressly reserves the right to delay payment for Shares in order to comply in
whole or in part with any applicable law. See Sections 1 and 16. In all cases,
payment for Shares accepted for payment pursuant to the Offer will be made only
after timely receipt by the Depositary of (i) certificates for such Shares or
timely confirmation (a "Book-Entry Confirmation") of a book-entry transfer of
such Shares into the Depositary's account at The Depository Trust Company, the
Midwest Securities Trust Company or the Philadelphia Depository Trust Company
(collectively, the "Book-Entry Transfer Facilities"), pursuant to the procedures
set forth in Section 3, (ii) a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof) with all required signature
guarantees or, in the case of a book-entry transfer, an Agent's Message (as
defined below) and (iii) any other documents required by the Letter of
Transmittal.
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
Offeror may enforce such agreement against the participant.
For purposes of the Offer, the Offeror will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as, if
and when the Offeror gives oral or written notice to the Depositary of the
Offeror's acceptance of such Shares for payment. In all cases, payment for
Shares purchased pursuant to the Offer will be made by deposit of the purchase
price with the Depositary, which will act as agent for tendering stockholders
for the purpose of receiving payment from the Offeror and transmitting such
payment to tendering stockholders. If, for any reason whatsoever, acceptance for
payment of any Shares tendered pursuant to the Offer is delayed, or the Offeror
is unable to accept for payment Shares tendered pursuant to the Offer, then,
without prejudice to the Offeror's rights under Section 1, the Depositary may,
nevertheless, on behalf of the Offeror, retain tendered Shares, and such Shares
may not be withdrawn, except to the extent that the tendering stockholders are
entitled to withdrawal rights as described in Section 4 below and as otherwise
required by Rule 14e-1(c) under the Exchange Act. Under no circumstances will
interest be paid by the Offeror because of any delay in making such payment.
If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason, or if certificates are submitted for
more Shares than are tendered, certificates for such unpurchased or untendered
Shares will be returned, without expense to the tendering stockholder (or, in
the case of Shares delivered by book-entry transfer to a Book-Entry Transfer
Facility, such Shares will be credited to an account maintained within such
Book-Entry Transfer Facility), as promptly as practicable after the expiration,
termination or withdrawal of the Offer.
If, prior to the Expiration Date, the Offeror increases the price being
paid for Shares accepted for payment pursuant to the Offer, such increased
consideration will be paid to all stockholders whose Shares are purchased
pursuant to the Offer.
3. PROCEDURE FOR TENDERING SHARES.
Valid Tenders. For Shares to be validly tendered pursuant to the Offer, a
properly completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof), with any required signature
4
<PAGE> 7
guarantees, or, in the case of a book-entry transfer, an Agent's Message, and
any other required documents, must be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date, and either (i) certificates representing such Shares must be
received by the Depositary or such Shares must be tendered pursuant to the
procedure for book-entry transfer set forth below, and a Book-Entry Confirmation
must be received by the Depositary, in each case prior to the Expiration Date,
or (ii) the guaranteed delivery procedure set forth below must be complied with.
No alternative, conditional or contingent tenders will be accepted. DELIVERY OF
DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY
TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Book-Entry Transfer. The Depositary will make a request to establish an
account with respect to the Shares at each Book-Entry Transfer Facility for
purposes of the Offer within two business days after the date of this Offer to
Purchase. Any financial institution that is a participant in a Book-Entry
Transfer Facility's system may make book-entry delivery of Shares by causing a
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at a Book-Entry Transfer Facility in accordance with such Book-Entry
Transfer Facility's procedures for transfer. Although delivery of Shares may be
effected through book-entry at a Book-Entry Transfer Facility prior to the
Expiration Date, (i) the Letter of Transmittal (or a manually signed facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or an Agent's Message 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 or (ii) the guaranteed delivery procedures described below
must be complied with.
Signature Guarantee. Signatures on the Letter of Transmittal must be
guaranteed by a member in good standing of the Securities Transfer Agents
Medallion Program, or by any other bank, broker, dealer, credit union, savings
association or other entity which is an "eligible guarantor institution," as
such term is defined in Rule 17Ad-15 under the Exchange Act (each of the
foregoing being referred to as an "Eligible Institution" and, collectively, as
"Eligible Institutions"), unless the Shares tendered thereby are tendered (i) by
a registered holder of Shares who has not completed either the box labeled
"Special Delivery Instructions" or the box labeled "Special Payment
Instructions" on the Letter of Transmittal or (ii) for the account of any
Eligible Institution. If the certificates evidencing Shares are registered in
the name of a person or persons other than the signer of the Letter of
Transmittal, or if payment is to be made, or delivered to, or certificates for
unpurchased Shares are to be issued or returned to, a person other than the
registered owner or owners, then the tendered certificates must be endorsed or
accompanied by duly executed stock powers, in either case signed exactly as the
name or names of the registered owner or owners appear on the certificates, with
the signatures on the certificates or stock powers guaranteed by an Eligible
Institution as provided in the Letter of Transmittal. See Instructions 1 and 5
to the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or time will not permit all required documents to reach the Depositary
prior to the Expiration Date or the procedure for book-entry transfer cannot be
completed on a timely basis, such Shares may nevertheless be tendered if all of
the following guaranteed delivery procedures are duly complied with:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Offeror herewith, is
received by the Depositary, as provided below, prior to the Expiration
Date; and
(iii) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation), together with a properly completed
and duly executed Letter of Transmittal (or a manually signed facsimile
thereof), and any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message, and any other documents required
by the Letter of Transmittal are received by the Depositary within three
trading days after the date of such Notice of Guaranteed Delivery. A
"trading day" is any day on which The National Association of Securities
Dealers Automated Quotation ("Nasdaq") National Market is open for
business.
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<PAGE> 8
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, telex, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in the
Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY,
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 ENSURE TIMELY DELIVERY.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for such Shares or a Book-Entry
Confirmation, (ii) a properly completed and duly executed Letter of Transmittal
(or a manually signed facsimile thereof), with all required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message, and
(iii) any other documents required by the Letter of Transmittal.
BACKUP FEDERAL INCOME TAX WITHHOLDING. TO PREVENT BACKUP FEDERAL INCOME
TAX WITHHOLDING WITH RESPECT TO PAYMENT OF THE PURCHASE PRICE OF SHARES
PURCHASED PURSUANT TO THE OFFER, EACH STOCKHOLDER MUST PROVIDE THE DEPOSITARY
WITH HIS CORRECT TAXPAYER IDENTIFICATION NUMBER ("TIN") AND CERTIFY THAT HE IS
NOT SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY COMPLETING THE
SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL. SEE INSTRUCTION 8 SET
FORTH IN THE LETTER OF TRANSMITTAL.
Determination of Validity. All questions as to the form of documents and
the validity, eligibility (including time of receipt) and acceptance for payment
of any tender of Shares will be determined by the Offeror, in its sole
discretion, and its determination will be final and binding on all parties. The
Offeror reserves the absolute right to reject any or all tenders of any Shares
that are determined by it not to be in proper form or the acceptance of or
payment for which may, in the opinion of the Offeror, be unlawful. The Offeror
also reserves the absolute right to waive any of the conditions of the Offer,
subject to the limitations set forth in the Merger Agreement, or any defect or
irregularity in the tender of any Shares. The Offeror's interpretation of the
terms and conditions of the Offer (including the Letter of Transmittal and the
Instructions to the Letter of Transmittal) will be final and binding on all
parties. No tender of Shares will be deemed to have been validly made until all
defects and irregularities have been cured or waived. None of the Offeror, the
Parent, the Dealer Manager, the Depositary, the Information Agent or any other
person will be under any duty to give notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification.
Other Requirements. By executing the Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of the Offeror as
such stockholder's proxies, each with full power of substitution, in the manner
set forth in the Letter of Transmittal, to the full extent of such stockholder's
rights with respect to the Shares and the associated Rights tendered by such
stockholder and accepted for payment by the Offeror (and any and all other
Shares or Rights or other securities or rights issued or issuable in respect of
such Shares or Rights). All such proxies shall be considered coupled with an
interest in the tendered Shares and Rights. This appointment is effective when,
and only to the extent that, the Offeror accepts for payment the Shares
deposited with the Depositary. Upon acceptance for payment, all prior proxies
given by the stockholder with respect to the Shares, Rights or other securities
or rights will, without further action, be revoked and no subsequent proxies may
be given or written consent executed (and, if given or executed, will not be
deemed effective). The designees of the Offeror will, with respect to the
Shares, Rights and other securities or rights, be empowered to exercise all
voting and other rights of such stockholder as they in their sole judgment deem
proper in respect of any annual or special meeting of the Company's
stockholders, or any adjournment or postponement thereof. The Offeror reserves
the right to require that, in order for Shares and the associated Rights to be
deemed validly tendered, immediately upon the Offeror's payment for such Shares
and Rights, the Offeror must be able to exercise full voting and other rights
with respect to such Shares and Rights and the other securities or rights issued
or issuable in respect of such Shares or Rights, including voting at any meeting
of stockholders (whether annual or special or whether or not adjourned).
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<PAGE> 9
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, 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 pursuant to the Offer, may also be withdrawn at any time
after Friday, November 17, 1995. If purchase of or payment for Shares is delayed
for any reason or if the Offeror is unable to purchase or pay for Shares for any
reason, then, without prejudice to the Offeror's rights under the Offer,
tendered Shares may be retained by the Depositary on behalf of the Offeror and
may not be withdrawn except to the extent that tendering stockholders are
entitled to withdrawal rights as set forth in this Section 4, subject to Rule
14e-1(c) under the Exchange Act, which provides that no person who makes a
tender offer shall fail to pay the consideration offered or return the
securities deposited by or on behalf of security holders promptly after the
termination or withdrawal of the Offer.
For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase. Any notice of withdrawal must specify the name of the person who
tendered the Shares to be withdrawn, the number of Shares to be withdrawn and
the name in which the certificates representing such Shares are registered, if
different from that of the person who tendered the Shares. If certificates for
Shares to be withdrawn have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of such certificates, the serial
numbers shown on such certificates must be submitted to the Depositary and,
unless such Shares have been tendered by an Eligible Institution, the signatures
on the notice of withdrawal must be guaranteed by an Eligible Institution. If
Shares have been tendered pursuant to the procedure for book-entry transfer set
forth in Section 3, any notice of withdrawal must also specify the name and
number of the account at the applicable Book-Entry Transfer Facility to be
credited with the withdrawn Shares. All questions as to the form and validity
(including time of receipt) of notices of withdrawal will be determined by the
Offeror, in its sole discretion, and its determination will be final and binding
on all parties. None of the Offeror, the Parent, the Dealer Manager, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in any notice of withdrawal
or incur any liability for failure to give any such notification.
Any Shares properly withdrawn will be deemed not validly tendered for
purposes of the Offer, but may be retendered at any subsequent time prior to the
Expiration Date by following any of the procedures described in Section 3.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following is a summary of the principal federal income tax consequences
of the Offer and the Merger to holders whose Shares are purchased pursuant to
the Offer or whose Shares are converted to cash in the Merger (including
Dissenting Shares). The discussion applies only to holders of Shares in whose
hands Shares are capital assets, and may not apply to Shares received pursuant
to the exercise of employee stock options, pursuant to the Company's Employee
Stock Ownership Plan or otherwise as compensation, or to holders of Shares who
are subject to special provisions of the tax law (such as insurance companies,
tax-exempt organizations and non-U.S. persons).
THE FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW ARE INCLUDED FOR
GENERAL INFORMATIONAL PURPOSES ONLY AND ARE BASED UPON CURRENT LAW. BECAUSE
INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH HOLDER OF SHARES SHOULD CONSULT SUCH
HOLDER'S OWN TAX ADVISOR TO DETERMINE THE APPLICABILITY OF THE RULES DISCUSSED
BELOW TO SUCH STOCKHOLDER AND THE PARTICULAR TAX EFFECTS OF THE OFFER AND THE
MERGER TO SUCH STOCKHOLDER, INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL
AND OTHER INCOME TAX LAWS.
The receipt of cash for Shares pursuant to the Offer or the Merger
(including Dissenting Shares) will be a taxable transaction for federal income
tax purposes. In general, for federal income tax purposes, a holder of Shares
will recognize gain or loss equal to the difference between (a) his adjusted tax
basis for the Shares sold pursuant to the Offer or converted to cash in the
Merger, and (b) the amount of cash received therefor. Gain or loss must be
determined separately for each block of Shares (i.e., Shares acquired at the
same cost in a single transaction) sold pursuant to the Offer or converted to
cash in the Merger. Such gain or loss will be
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<PAGE> 10
capital gain or loss (other than any amounts received with respect to Dissenting
Shares which are deemed to be interest for federal income tax purposes, which
amounts will be taxed as ordinary income) and will be long-term capital gain or
loss if, on the date of sale (or, if applicable, the date of the Merger), the
Shares were held for more than one year. In the case of an individual holder,
net long-term capital gain may be subject to a reduced rate of tax, and net
capital losses may be subject to limits on deductibility.
Payments in connection with the Offer or the Merger may be subject to
"backup withholding" at a rate of 31%. Backup withholding generally applies if
the stockholder (a) fails to furnish his social security number or TIN, (b)
furnishes an incorrect TIN, or (c) under certain circumstances, fails to provide
a certified statement, signed under penalties of perjury, that the TIN provided
is his correct number and that he is not subject to backup withholding. Backup
withholding is not an additional tax but merely an advance payment, which may be
refunded to the extent it results in an overpayment of tax. Certain persons
generally are entitled to exemption from backup withholding, including
corporations and financial institutions. Certain penalties apply for failure to
furnish correct information and for failure to include reportable payments in
income. Each stockholder should consult with his own tax advisor as to his
qualification for exemption from backup withholding and the procedure for
obtaining such exemption. Tendering stockholders may be able to prevent backup
withholding by completing the Substitute Form W-9 included in the Letter of
Transmittal. See Section 3.
6. PRICE RANGE OF SHARES; DIVIDENDS.
The Shares are principally traded on the over-the-counter market and prices
are quoted on The Nasdaq National Market System under the symbol "ELCN." The
following table sets forth for the periods indicated the high and low bid prices
per Share as reported in the Company's 1995 Annual Report and, in the case of
Fiscal 1996, sales prices as reported on The Nasdaq National Market based on
published financial sources.
<TABLE>
<CAPTION>
HIGH LOW
---- ----
<S> <C> <C>
FISCAL 1994:
Quarter ended September 30, 1993..................................... $ 16 $ 14
Quarter ended December 31, 1993...................................... 20 3/4 15 1/8
Quarter ended March 31, 1994......................................... 21 1/4 17
Quarter ended June 30, 1994.......................................... 20 17
FISCAL 1995:
Quarter ended September 30, 1994..................................... 18 15 1/2
Quarter ended December 31, 1994...................................... 17 1/2 16
Quarter ended March 31, 1995......................................... 17 14 1/2
Quarter ended June 30, 1995.......................................... 19 3/4 14 3/4
FISCAL 1996:
Through September 18, 1995........................................... 36 1/2 18
</TABLE>
On August 9, 1995, the last full day of trading prior to the date of the
public announcement that Illinois Tool Works, Inc. had submitted to the Company
a proposal to acquire all outstanding Shares for $27.00 cash per Share (see
Section 11 -- "Background of the Offer; Past Contacts, Transactions or
Negotiations with the Company"), the closing price per Share as reported on The
Nasdaq National Market was $18.625.
On September 12, 1995, the last full day of trading prior to the public
announcement of the execution of the Merger Agreement, the closing price per
Share as reported on The Nasdaq National Market was $29.50. On September 18,
1995, the last full day of trading prior to the commencement of the Offer, the
closing price per Share as reported on The Nasdaq National Market was $35.594.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
The Company has declared and paid regular quarterly dividends during the
periods shown in the table above of (i) $0.13 per Share since the dividend with
the September 1, 1993 record date through the dividend with the record date of
June 1, 1994 and (ii) $0.15 per Share since the dividend with the September 1,
1994
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<PAGE> 11
record date through the dividend with the record date of September 1, 1995.
Tendering Shares pursuant to the Offer will not affect the right of stockholders
to receive any dividends with respect to Shares declared by the Company, if any,
with a record date prior to the date on which the Offeror purchases the Shares
pursuant to the Offer. The next regular quarterly record date for dividends on
the Shares after the date of this Offer to Purchase would be December 1, 1995.
The Offer will expire at 12:00 Midnight, New York City time, on Tuesday, October
17, 1995, unless extended as described elsewhere in this Offer to Purchase.
No consideration will be paid in the Offer or the Merger for the Rights
separate from the consideration to be paid for Shares.
7. EFFECT OF THE OFFER ON THE MARKET FOR SHARES, STOCK QUOTATION, AND
REGISTRATION UNDER THE EXCHANGE ACT.
The purchase of the Shares by the Offeror pursuant to the Offer will reduce
the number of Shares that might otherwise trade publicly and will reduce the
number of holders of Shares, which will adversely affect the liquidity and
market value of the remaining Shares held by the public.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the requirements of The National Association of
Securities Dealers, Inc. ("NASD") for continued inclusion in the Nasdaq National
Market (the top tier market of The Nasdaq Stock Market), which require, among
other things, that an issuer have at least 200,000 publicly held shares, held by
at least 400 shareholders or 300 shareholders of round lots, with a market value
of $1,000,000, and have net tangible assets of at least either $1,000,000,
$2,000,000 or $4,000,000, depending on profitability levels during the issuer's
four most recent fiscal years. If these standards are not met, the Shares might
nevertheless continue to be included in The Nasdaq Stock Market with quotations
published in The Nasdaq "additional list" or in one of the "local lists", but if
the number of holders of Shares were to fall below 300, or if the number of
publicly held Shares were to fall below 100,000 or there were not at least two
registered and active market makers for the Shares, the NASD's rules provide
that the Shares would no longer be "qualified" for reporting by The Nasdaq Stock
Market and The Nasdaq Stock Market would cease to provide any quotations. Shares
held directly or indirectly by directors, officers or beneficial owners of more
than 10% of the Shares are not considered as being publicly held for this
purpose. According to information provided by the Company, as of September 5,
1995, Okabe Company Limited ("Okabe") owned 853,000 Shares (representing
approximately 17.1% of the outstanding Shares), the Elco Industries, Inc.
Employee Stock Ownership Plan owned 508,952 Shares (representing approximately
10.2% of the outstanding Shares) and all directors and officers as a group
beneficially owned 260,715 Shares (representing approximately 5.2% of the
outstanding Shares). According to the Company, as of September 17, 1995, there
were approximately 665 holders of record of Shares. If, as a result of the
purchase of Shares pursuant to the Offer or otherwise, the Shares no longer meet
the requirements of the NASD for continued inclusion in the Nasdaq National
Market or in any other tier of The Nasdaq Stock Market, and the Shares are no
longer included in the Nasdaq National Market or in any other tier of The Nasdaq
Stock Market, the market for Shares could be adversely affected.
In the event that the Shares no longer meet the requirements of the NASD
for continued inclusion in any tier of the Nasdaq Stock Market, it is possible
that Shares would continue to trade in the over-the-counter market and that
price quotations would be reported by other sources. The extent of the public
market for the Shares and the availability of such quotations would, however,
depend upon the number of holders of Shares remaining at such time, the interest
in maintaining a market in Shares on the part of securities firms, the possible
termination of registration of the Shares under the Exchange Act, as described
below, and other factors.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application by the Company to the Commission
if there are fewer than 300 record holders of Shares. It is the intention of the
Offeror to seek to cause an application for such termination to be made as soon
after consummation of the Offer as the requirements for termination of
registration of the Shares are met. Termination of registration of the Shares
under the Exchange Act would substantially reduce the information required to be
furnished by the Company to its stockholders and to the Commission and would
make certain
9
<PAGE> 12
provisions of the Exchange Act no longer applicable to the Company, such as the
short-swing profit recovery provisions of Section 16(b) of the Exchange Act, the
requirement of furnishing a proxy statement pursuant to Section 14(a) of the
Exchange Act in connection with stockholders' meetings and the related
requirement of furnishing an annual report to stockholders and the requirements
of Rule 13e-3 under the Exchange Act with respect to "going private"
transactions. Furthermore, the ability of "affiliates" of the Company and
persons holding "restricted securities" of the Company to dispose of such
securities pursuant to Rule 144 or 144A promulgated under the Securities Act of
1933, as amended (the "Securities Act"), may be impaired or eliminated.
The Shares are currently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board"),
which has the effect, among other things, of allowing brokers to extend credit
on the collateral of the Shares. Depending upon factors similar to those
described above regarding listing and market quotations, it is possible that,
following the Offer, the Shares would no longer constitute "margin securities"
for the purposes of the margin regulations of the Federal Reserve Board and
therefore could no longer be used as collateral for loans made by brokers. If
registration of Shares under the Exchange Act were terminated, the Shares would
no longer be "margin securities".
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
The Company is a Delaware corporation with its principal executive offices
located at 1111 Samuelson Road, P.O. Box 7009, Rockford, Illinois 61125. Except
as otherwise set forth herein, the information concerning the Company contained
in this Offer to Purchase, including financial information, has been furnished
by the Company or has been taken from or based upon publicly available documents
and records on file with the Commission and other public sources. Although
neither the Offeror nor the Parent has any knowledge that would indicate that
statements contained herein based upon such documents are untrue, neither the
Offeror, the Parent nor the Dealer Manager assumes any responsibility for the
accuracy or completeness of the information concerning the Company, furnished by
the Company, or contained in such documents and records or for any failure by
the Company to disclose events which may have occurred or may affect the
significance or accuracy of any such information but which are unknown to the
Offeror and the Parent.
According to the Company's filings with the Commission, the Company
designs, manufactures and supplies specialty metal fasteners and
custom-engineered metal and plastic components and products to automotive and
commercial original equipment manufacturers, and also offers a wide variety of
packaged fasteners, fastening-related products and other hardware accessories to
the do-it-yourself market.
Set forth below is certain selected historical consolidated financial
information with respect to the Company excerpted or derived from financial
information contained in the audited financial statements that were provided by
the Company to the Parent. More comprehensive financial information is included
in (i) the Company's Annual Report on Form 10-K for the fiscal year ended June
30, 1995, and (ii) other reports and documents filed by the Company with the
Commission, and the following summary is qualified in its entirety by reference
to such reports and such other documents and all the financial information
(including any related notes) contained therein. The reports and other documents
filed with the Commission should be available for inspection and copies thereof
should be obtainable in the manner set forth below.
10
<PAGE> 13
ELCO INDUSTRIES, INC.
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
AS OF AND FOR THE
FISCAL YEAR ENDED
JUNE 30
------------------------
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
INCOME STATEMENT DATA
Net sales............................................................ $249.3 $226.0 $199.2
Income from operations............................................... 19.1 16.6 12.4
Net income........................................................... 10.3 8.2 4.9
Net income per share................................................. $ 2.08 $ 1.65 $ 0.98
BALANCE SHEET DATA
Working Capital...................................................... $ 34.0 $ 33.4 $ 32.5
Total assets......................................................... 157.0 151.5 147.2
Long term debt....................................................... 37.3 41.9 46.3
Total shareholders' equity........................................... 73.7 65.0 61.2
</TABLE>
Certain Company Projections. During the course of discussions between the
Parent and the Company that led to the execution of the Merger Agreement (see
Section 11), the Company provided the Parent with certain non-public business
and financial information about the Company, including base case and upside
projections of future results of operations, cash flows and balance sheets for
the fiscal years ending June 30, 1996, 1997, 1998, 1999 and 2000. In the base
case, projections for such fiscal years were: net sales (dollars in millions) of
$273.2, $291.9, $312.9, $339.5 and $373.4, respectively; operating income
(dollars in millions) of $25.8, $27.1, $31.6, $33.9 and $37.3, respectively; and
net income (dollars in millions) of $13.9, $14.9, $17.9, $19.8 and $22.4,
respectively. In the upside case, projections for such fiscal years were: net
sales (dollars in millions) of $279.2, $312.7, $350.2, $392.2 and $439.3,
respectively; operating income (dollars in millions) of $26.5, $29.6, $33.3,
$37.3 and $41.8, respectively; and net income (dollars in millions) of $14.3,
$16.4, $19.0, $21.8 and $25.0, respectively. These projections did not give
effect to the Offer, the Merger or the financing thereof or the potential
combined operations of the Parent and the Company after consummation of such
transactions.
The Company has advised the Parent that it does not as a matter of course
make public any projections as to future performance or earnings, and the
projections set forth above are included in this Offer to Purchase only because
the information was provided to the Parent. The projections were not prepared
with a view to public disclosure or compliance with the published guidelines of
the Commission or the guidelines established by the American Institute of
Certified Public Accountants regarding projections or forecasts. The Company's
internal operating projections (upon which the projections provided to the
Parent were based in part) are, in general, prepared solely for internal use and
capital budgeting and other management decisions and are subjective in many
respects and thus susceptible to various interpretations and periodic revisions
based on actual experience and business developments. The projections were based
on a number of assumptions (not all of which were stated in the projections and
not all of which were provided to the Parent) that are beyond the control of the
Company, the Offeror or the Parent or their respective financial advisors. Many
of the assumptions upon which the projections were based are dependent upon
economic forecasting (both general and specific to the Company's business),
which is inherently uncertain and subjective. Accordingly, there can be no
assurance that the projected results would be realized or that actual results
would not be significantly higher or lower than those projected. None of the
Company, the Offeror or the Parent or their respective financial advisors
assumes any responsibility for the accuracy of any of the projections.
Prior to execution of the Merger Agreement, the Company also provided the
Parent with a draft of the Company's Annual Report on Form 10-K for the fiscal
year ended June 30, 1995 (which was subsequently filed by the Company with the
Commission in substantially the same form), the Company's audited financial
statements for the year ended June 30, 1995 (which are included in such Form
10-K) and a preliminary draft
11
<PAGE> 14
of the Company's Proxy Statement for its annual meeting of stockholders, as to
which the Company's Schedule 14D-9 with respect to this Offer (filed by the
Company with the Commission and sent to stockholders) together with the
Information Statement pursuant to Section 14(f) of the Exchange Act and Rule
14f-1 thereunder attached to the Company's Schedule 14D-9 contains substantially
similar information.
The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files periodic reports, proxy statements and
other information with the Commission relating to its business, financial
condition and other matters. The Company is required to disclose in such proxy
statements certain information, as of particular dates, concerning the Company's
directors and officers, their remuneration, stock options granted to them, the
principal holders of the Company's securities and any material interests of such
persons in transactions with the Company. Such reports, proxy statements and
other information may be inspected at the public reference facilities maintained
by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549,
and may be inspected and copied at prescribed rates at the regional offices of
the Commission located at Seven World Trade Center, 13th Floor, New York, New
York 10048 and Citicorp Center, 500 West Madison Street (Suite 1400), Chicago,
Illinois 60661. Copies of this material may also be obtained by mail, upon
payment of the Commission's customary fees, from the Commission's principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549
9. CERTAIN INFORMATION CONCERNING THE PARENT AND THE OFFEROR.
The Offeror is a newly incorporated Delaware corporation and a wholly owned
subsidiary of the Parent, which is also a Delaware corporation. To date, the
Offeror has not conducted any business other than that incident to its
formation, the execution and delivery of the Merger Agreement and the
commencement of the Offer. Accordingly, no meaningful financial information with
respect to the Offeror is available.
The principal executive offices of the Offeror and the Parent are located
at 40 Westminster Street, Providence, RI 02903-2596.
The Parent is an international multi-industry company with operations in
six business segments: Aircraft, Automotive, Industrial, Systems and Components,
Finance and Paul Revere Insurance.
Set forth below is certain selected historical consolidated financial
information with respect to the Parent excerpted or derived from financial
information contained in the Parent's Annual Report on Form 10-K for the year
ended December 31, 1994, and the Parent's Report on Form 10-Q for the quarter
ended July 1, 1995 (which reports are hereby incorporated by reference herein).
More comprehensive financial information is included in such reports and other
documents filed by the Parent with the Commission, and the following summary is
qualified in its entirety by reference to such reports and such other documents
and all the financial information (including any related notes) contained
therein. Such reports and other documents should be available for inspection and
copies thereof should be obtainable in the manner set forth in Section 8.
TEXTRON INC.
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS ENDED FOR THE YEAR ENDED
----------------- -------------------------
JULY 1, JULY 2, DECEMBER 31, JANUARY 1,
1995 1994 1994 1994
------- ------- ------------ ----------
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA
Revenues.............................................. $ 4,889 $ 4,925 $ 9,683 $ 9,078
Net Income............................................ 230 210 433 379
</TABLE>
12
<PAGE> 15
<TABLE>
<CAPTION>
AS OF AS OF AS OF
JULY 1, DECEMBER 31, JANUARY 1,
1995 1994 1994
------- ------------ ----------
<S> <C> <C> <C>
BALANCE SHEET DATA
Total assets................................................... $22,330 $ 20,925 $ 19,658
Debt........................................................... 10,249 9,364 8,872
Total shareholders' equity..................................... 3,096 2,882 2,780
</TABLE>
None of the Offeror, the Parent, nor, to the best knowledge of the Offeror
and the Parent, any of the persons listed in Annex I to this Offer to Purchase
owns or has any right to acquire any Shares and none of them has effected any
transaction in the Shares during the past 60 days.
Except as set forth in this Offer to Purchase, none of the Offeror or the
Parent, nor, to the best knowledge of the Offeror or the Parent, any of the
persons listed in Annex I to this Offer to Purchase has any contract,
arrangement, understanding or relationship with any other person with respect to
any securities of the Company, including, without limitation, any contract,
arrangement, understanding or relationship concerning the transfer or the voting
of any securities of the Company, joint ventures, loan or option arrangements,
puts or calls, guaranties of loans, guaranties against loss or the giving or
withholding of proxies. None of the Offeror or the Parent, nor, to the best
knowledge of the Offeror or the Parent, any of the persons listed in Annex I to
this Offer to Purchase has had any transactions with the Company, or any of its
executive officers, directors or affiliates that would require reporting under
the rules of the Commission.
Except as set forth in this Offer to Purchase, there have been no contacts,
negotiations or transactions between the Offeror or the Parent, or their
respective subsidiaries, or, to the best knowledge of the Offeror or the Parent,
any of the persons listed in Annex I to this Offer to Purchase, on the one hand,
and the Company or its executive officers, directors or affiliates, on the other
hand, concerning a merger, consolidation or acquisition, tender offer or other
acquisition of securities, election of directors, or a sale or other transfer of
a material amount of assets that would require reporting under the rules of the
Commission.
10. SOURCE AND AMOUNT OF FUNDS.
The total amount of funds required by the Offeror to purchase Shares
(including Shares issuable upon exercise of employee stock options) validly
tendered pursuant to the Offer, consummate the Merger and pay all related fees
and expenses is estimated to be approximately $190 million. The Offeror will
obtain all such funds from the Parent, which will obtain such funds from bank
borrowings under the Credit Agreement described below.
The Parent is a party to a Credit Agreement among the Parent, certain
lenders named therein and Bankers Trust Company, as Administrative Agent, dated
as of November 1, 1993 as amended October 30, 1994 and July 1, 1995 (the "Credit
Agreement"). The $1.5 billion borrowing facility established by the Credit
Agreement has a final maturity date of July 1, 2000 and borrowings under this
facility are unsecured. The interest rates for borrowings generally are
established by auction among several participating banks at the time of each
borrowing. Pursuant to the Credit Agreement, such interest rates may not exceed
the London Interbank Offered Rate plus 0.22% per annum. The interest rate for
borrowings to consummate the Offer and the Merger will be established in this
manner. The Credit Agreement contains customary representations and warranties,
conditions to borrowings, covenants and events of default. The portion of the
facility under the Credit Agreement not used or reserved as support for
commercial paper or bank borrowings at July 1, 1995, was $685 million. The
lenders under the Credit Agreement include: ABN-Amro Bank, N.V.; Bankers Trust
Company; Bank of America N.T. & S.A.; Bank of Montreal/Harris Trust and Savings
Bank; The Bank of New York; The Bank of Nova Scotia; The Bank of Tokyo Trust
Company; Banque Nationale de Paris; The Chase Manhattan Bank, N.A.; Chemical
Bank; CIBC Inc.; Citibank, N.A.; Comerica Bank; CoreStates Bank, N.A.; Credit
Lyonnais; Credit Suisse; Deutsche Bank AG; First American National; The First
National Bank of Boston; The First National Bank of Chicago; The Fuji Bank,
Limited; The Industrial Bank of Japan Trust Company; Mellon Bank, N.A.; National
Westminster Bank PLC; NBD Bank; Royal Bank of Canada; The Sanwa Bank, Limited;
Shawmut Bank; Suntrust Bank; Swiss Bank Corporation; and The Toronto-Dominion
Bank.
13
<PAGE> 16
It is anticipated that borrowings under the Credit Agreement will be repaid
with general corporate funds of the Parent and its subsidiaries (including the
Company) or through permanent financing.
The foregoing summary of the Credit Agreement is qualified in its entirety
by reference to the text of the Credit Agreement filed as an exhibit to the
Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1") of the Offeror
and the Parent filed with the Commission in connection with the Offer and is
incorporated herein by reference.
The Offer is not subject to a financing condition.
11. BACKGROUND OF THE OFFER; PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH
THE COMPANY.
In a press release issued on August 10, 1995, Illinois Tool Works, Inc.
("ITW") publicly announced that it had submitted a proposal to the Company to
acquire all outstanding Shares at a price of $27 per Share in cash.
According to a press release issued by the Company on August 17, 1995, the
Board of Directors of the Company rejected ITW's offer, after having found ITW's
proposal " 'inadequate',. . . taking into account other potential strategic
alternatives available to [the Company], as well as [the Company's] prospects as
an independent company."
In a press release dated August 21, 1995, ITW announced that it owned over
1,000 Shares and that it intended to submit a slate of three nominees for
election to the Company's Board of Directors and a written demand for a list of
the Company's stockholders in order to communicate with them directly. ITW also
stated that, on August 15, 1995, it had filed a Notification and Report under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, with the
Federal Trade Commission and the Department of Justice regarding its proposed
acquisition of the Company and that it intended to file proxy materials with
respect to its solicitation with the Commission.
On August 11, 1995, in response to ITW's offer to acquire the Company,
Herbert Henkel, President of the Parent's Industrial Products Group, contacted
certain members of the Company's senior management regarding ITW's offer and,
over the next several days, expressed to such persons and other representatives
of the Company the Parent's potential interest in acquiring the Company. Shortly
after the Company rejected the ITW offer, representatives of the Company
informed Mr. Henkel that, in response to the Parent's potential interest in
acquiring the Company, the Company was prepared to provide certain non-public
information concerning the Company to the Parent, if the Parent entered into a
confidentiality agreement. During the course of negotiating the confidentiality
agreement, Mr. Henkel conveyed to representatives of the Company a preliminary,
nonbinding indication of interest to acquire the Company in a transaction valued
at approximately $35 per Share.
On September 1, 1995, the Parent and the Company entered into a
confidentiality agreement (the "Confidentiality Agreement") pursuant to which
the Parent agreed to (a) keep confidential certain information concerning the
Company to be provided to the Parent in connection with its evaluation of a
possible transaction involving the Company, and (b) customary "standstill"
provisions limiting the Parent's freedom of action with respect to proposals to
acquire the Company and certain other actions that would affect control of the
Company. As a result of the Company entering into the Merger Agreement with
Parent, such standstill provisions terminated.
Following execution of the Confidentiality Agreement, the Company provided
the Parent with certain non-public business and financial information, including
certain financial projections. See Section 8 -- "Certain Information Concerning
the Company."
From September 5 through September 12, 1995, representatives of the Parent
and the Company had numerous telephone meetings in which the terms of the Merger
Agreement were negotiated. During this period, the Parent also conducted
additional due diligence with respect to the Company.
In the evening of September 12, 1995, the respective Boards of Directors of
the Company, the Parent and the Offeror approved a draft form of the Merger
Agreement, and the Merger Agreement was executed by each party later that
evening. On the following morning, September 13, 1995, the Parent and the
Company issued a
14
<PAGE> 17
joint press release announcing execution of the Merger Agreement. On September
19, 1995, the Offeror commenced the Offer.
12. PURPOSE OF THE OFFER AND THE MERGER; APPRAISAL RIGHTS; EXEMPTION FROM
RIGHTS AGREEMENT; PLANS FOR THE COMPANY.
The purpose of the Offer, the Merger and the Merger Agreement is to enable
the Parent to acquire control of, and the entire equity interest in, the
Company. Upon consummation of the Merger, the Company will become a wholly owned
subsidiary of the Parent. The Offer is being made pursuant to the Merger
Agreement.
Under the DGCL and the Company's Certificate of Incorporation, the approval
of the Board of Directors of the Company and the affirmative vote of the holders
of 66-2/3% of the outstanding Shares are required to approve and adopt the
Merger Agreement and the Merger. The Board of Directors of the Company has
approved the Offer, the Merger and the Merger Agreement and the transactions
contemplated thereby, and, unless the Merger is consummated pursuant to the
short-form merger provisions under the DGCL described below, the only remaining
required corporate action of the Company is the approval and adoption of the
Merger Agreement and the Merger by the affirmative vote of the holders of
66-2/3% of the Shares. If the Minimum Condition is satisfied, the Offeror will
have sufficient voting power to cause the approval and adoption of the Merger
Agreement and the Merger without the affirmative vote of any other stockholder.
The Merger Agreement provides that, if approval or action in respect of the
Merger by the stockholders of the Company is required by applicable law, the
Company will, (i) if appropriate, call a meeting of its stockholders (the
"Stockholder Meeting") for the purpose of voting upon the Merger and will use
its reasonable best efforts to obtain stockholder approval of the Merger, (ii)
hold the Stockholder Meeting as soon as practicable following the purchase of
Shares pursuant to the Offer, and (iii) recommend to its stockholders the
approval of the Merger through its Board of Directors, but subject in each case
to the fiduciary duties of its Board of Directors under applicable law as
determined by the Board of Directors in good faith after consultation with its
counsel. The record date for the Stockholder Meeting will be a date subsequent
to the date the Parent or the Offeror becomes a record holder of Shares
purchased pursuant to the Offer.
Okabe. The Merger Agreement provides that the Company will use its
reasonable efforts to encourage Okabe to tender its Shares to the Offeror in the
Offer. According to information provided by the Company, as of September 5,
1995, Okabe owned 853,000 Shares, which represented 17.1% of the outstanding
Shares.
Short Form Merger. Under the DGCL, if the Offeror acquires at least 90% of
the outstanding Shares, the Offeror will be able to approve the Merger without a
vote of the Company's other stockholders. The Merger Agreement provides that if
the Offeror, or any other direct or indirect subsidiary of the Parent, acquires
at least 90% of the outstanding Shares, the Parent, the Offeror and the Company
will take all necessary and appropriate action to cause the Merger to become
effective as soon as practicable after the expiration of the Offer without a
meeting of stockholders of the Company, in accordance with Section 253 of the
DGCL. If the other conditions to the Offeror's obligation to purchase Shares in
the Offer are satisfied prior to the time the Offeror acquires at least 90% of
the outstanding Shares, the Offeror may, subject to the limitations set forth in
the Merger Agreement, delay its purchase of the Shares tendered to it in the
Offer. See Section 1. If the Offeror does not acquire at least 90% of the
outstanding Shares, a significantly longer period of time may be required to
effect the Merger, because a vote of the Company's stockholders would be
required under the DGCL.
Appraisal Rights. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders of the Company will
have certain rights under the DGCL to dissent and demand appraisal of, and to
receive payment in cash of the fair value of, their Shares. Such rights to
dissent, if the statutory procedures are complied with, could lead to a judicial
determination of the fair value of the Shares (excluding any element of value
arising from the accomplishment or expectation of the Merger), to be required to
be paid in cash to such dissenting holders for their Shares. In addition, such
dissenting stockholders would be entitled to receive payment of a fair rate of
interest from the date of consummation of
15
<PAGE> 18
the Merger on the amount determined to be the fair value of their Shares. In
determining the fair value of the Shares, a Delaware court would be required to
take into account all relevant factors. Accordingly, such determination could be
based upon considerations other than, or in addition to, the market value of the
Shares, including, among other things, asset values and earning capacity. In
Weinberger v. UOP, Inc., the Delaware Supreme Court stated, among other things,
that "proof of value by any techniques or methods which are generally considered
acceptable in the financial community and otherwise admissible in court" should
be considered in an appraisal proceeding. Therefore, the value so determined in
any appraisal proceeding could be different from the price being paid in the
Offer.
In addition, several decisions by Delaware courts have held that, in
certain circumstances, a controlling stockholder of a company involved in a
merger has a fiduciary duty to other stockholders which requires that the merger
be fair to such other stockholders. In determining whether a merger is fair to
minority stockholders, Delaware courts have considered, among other things, the
type and amount of consideration to be received by the stockholders and whether
there was fair dealing among the parties. The Delaware Supreme Court stated in
Weinberger and Rabkin v. Philip A. Hunt Chemical Corp. that although the remedy
ordinarily available to minority stockholders in a cash-out merger is the right
to appraisal described above, a damages remedy or injunctive relief may be
available if a merger is found to be the product of procedural unfairness,
including fraud, misrepresentation or other misconduct.
Rule 13e-3. The Commission has adopted Rule 13e-3 under the Exchange Act
which is applicable to certain "going private" transactions and which may under
certain circumstances be applicable to the Merger or another business
combination following the purchase of Shares pursuant to the Offer or otherwise
in which the Offeror seeks to acquire the remaining Shares not held by it. The
Offeror believes, however, that Rule 13e-3 will not be applicable to the Merger
if the Merger is consummated within one year after the termination of the Offer
at the same per Share price as paid in the Offer. If applicable, Rule 13e-3
requires, among other things, that certain financial information concerning the
Company and certain information relating to the fairness of the proposed
transaction and the consideration offered to minority stockholders in such
transaction, be filed with the Commission and disclosed to stockholders prior to
consummation of the transaction.
Purchases of Shares. Whether or not the Offeror purchases Shares pursuant
to the Offer, the Offeror expressly reserves the right to acquire, following
consummation or termination of the Offer, additional Shares through open market
purchases, privately negotiated transactions, another tender offer or otherwise.
Any such purchases of additional Shares might be on terms which are the same as,
or more or less favorable than, those of this Offer. In any event, the Offeror
is under no obligation to effect any such purchases. The Offeror also reserves
the right, subject to the terms of the Merger Agreement, to dispose of any or
all Shares that it may acquire.
Exemption of Offer and Merger from Effect of the Rights Agreement. The
Company has represented in the Merger Agreement that it has taken all necessary
actions to ensure that, for the purposes of the Rights Agreement, neither the
Parent nor the Offeror will become an "Acquiring Person" (as defined therein),
the execution of the Merger Agreement does not, and the commencement or
consummation of the Offer, the Merger and the other transactions contemplated
thereunder (including a tender offer by the Parent or the Offeror at a higher
cash price per share for all outstanding Shares and the associated Rights
pursuant to the Merger Agreement), will not result in the grant of any rights to
any person under the Rights Agreement or enable or require any outstanding
Rights to be exercised, distributed or triggered, and that the Rights will
expire without any further force or effect as of the Effective Time. The Company
has also represented that the Merger Agreement, the Offer and the Merger have
been duly approved by the "Continuing Directors" (as defined in the Rights
Agreement) and that other than the Parent or the Offeror (and their affiliates),
the Company (or its Board of Directors) has not exempted (or taken any other
action tantamount to exempting) any person or entity from the potential
application of the Rights Agreement, except that Okabe and its affiliates are
permitted to beneficially own up to 21% of the outstanding Shares without
triggering the potential application of the Rights Agreement.
Board Representation. The Merger Agreement provides that, promptly upon
the purchase of Shares pursuant to the Offer, the Parent will be entitled to
designate such number of directors, rounded up to the next
16
<PAGE> 19
whole number, on the Board of Directors of the Company as will give the Parent,
subject to compliance with Section 14(f) of the Exchange Act, representation on
the Board of Directors equal to the product of (a) the total number of directors
on the Board of Directors and (b) the percentage that the number of Shares
purchased by the Parent bears to the number of Shares outstanding. The Company
has agreed that, upon request by the Parent, it will promptly increase the size
of the Board of Directors and/or exercise its reasonable best efforts to secure
the resignations of such number of directors as is necessary to enable the
Parent's designees to be elected to the Board of Directors and will cause the
Parent's designees to be so elected. The Company has agreed to take, at its
expense, all actions required by Section 14(f) of the Exchange Act and Rule
14f-1 promulgated thereunder to effect any such election, including the mailing
to its stockholders of the information required to be disclosed pursuant
thereto. The Parent will supply to the Company in writing and be solely
responsible for any information with respect to itself and its nominees,
officers, directors and affiliates required by Section 14(f) and Rule 14f-1.
Pursuant to the Merger Agreement, following the election of designees of
the Offeror, prior to the Effective Time, any amendment of the Merger Agreement
or the Certificate of Incorporation or By-Laws of the Company, any termination
of the Merger Agreement by the Company, any extension by the Company of the time
for the performance of any of the obligations or other acts of the Parent or the
Offeror or waiver of any of the Company's rights under the Merger Agreement will
require the concurrence of a majority of the directors of the Company then in
office who are directors as of the date of the Merger Agreement or persons
designated by such directors and neither were designated by the Offeror nor are
employees of the Company ("Continuing Directors"). In addition, prior to the
Effective Time, the Company and the Offeror will use all reasonable efforts to
ensure that the Company's Board of Directors at all times includes at least
three Continuing Directors.
Plans for the Company. Except as otherwise set forth in this Offer to
Purchase, it is expected that, initially following the Merger, the business and
operations of the Company will be continued by the Surviving Corporation
substantially as they are currently being conducted. The Parent intends to
operate the Company as a division of the Parent. The directors of the Offeror
will be the initial directors of the Surviving Corporation and the then officers
of the Company and such other persons as are designated by the Parent shall be
the initial officers of the Surviving Corporation. After the purchase of Shares
pursuant to the Offer and prior to the Effective Time, it is anticipated that
the Company will not declare any dividends on the Shares.
The Parent will evaluate the business, operations, capitalization and
management of the Company during the pendency of the Offer and after the
consummation of the Offer, and will take such actions as it deems appropriate
under the circumstances then existing with a view to optimizing the Company's
potential in conjunction with the Parent's business.
Except as indicated in this Offer to Purchase, the Parent does not have any
present plans or proposals which relate to or would result in an extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
involving the Company or any of its subsidiaries, a sale or transfer of a
material amount of assets of the Company or any of its subsidiaries or any
material change in the Company's capitalization or dividend policy or any other
material changes in the Company's corporate structure or business, or the
composition of the Company's Board of Directors or management.
13. THE MERGER AGREEMENT.
The following summary of certain provisions of the Merger Agreement, a copy
of which is filed as an exhibit to the Schedule 14D-1, is qualified in its
entirety by reference to the text of the Merger Agreement.
The Offer. The Offeror commenced the Offer in accordance with the terms of
the Merger Agreement.
The Merger. The Merger Agreement provides that, upon the terms and subject
to the conditions of the Merger Agreement, and in accordance with the DGCL, the
Offeror shall be merged with and into the Company. Following the Effective Time,
the separate corporate existence of the Offeror will cease and the Company will
continue as the Surviving Corporation and will succeed to and assume all the
rights and obligations of the Offeror in accordance with the DGCL. The
Certificate of Incorporation of the Offeror, as in
17
<PAGE> 20
effect immediately prior to the Effective Time, will be amended to change the
name of the Offeror to "Elco Industries, Inc." and, as so amended, the
Certificate of Incorporation and the Bylaws of the Offeror shall become the
Certificate of Incorporation and Bylaws of the Surviving Corporation.
Conversion of Shares. At the Effective Time, each Share issued and
outstanding immediately prior thereto will be canceled and extinguished and each
Share (other than Shares held by the Company as treasury Shares, Shares owned by
any wholly owned subsidiary of the Company, Shares owned by the Parent, the
Offeror or any wholly owned subsidiary of the Parent and Dissenting Shares) will
be converted into the right to receive the Merger Consideration upon the
surrender of the certificate formerly representing such Share.
Dissenting Shares. The Merger Agreement provides that, if required by the
DGCL, Dissenting Shares will not be exchangeable for the right to receive the
Merger Consideration, and holders of such Dissenting Shares will be entitled to
receive payment of the appraised value of such Dissenting Shares in accordance
with the provisions of Section 262 of the DGCL unless and until such holders
fail to perfect or effectively withdraw or lose their rights to appraisal and
payment under the DGCL. If, after the Effective Time, any holder fails to
perfect or effectively withdraws or loses such right, such Dissenting Shares
will thereupon be treated as if they had been converted into and have become
exchangeable for, at the Effective Time, the right to receive the Merger
Consideration. See Section 12 "-- Appraisal Rights."
Representations and Warranties. Pursuant to the Merger Agreement, the
Company has made customary representations and warranties to the Parent and the
Offeror, including, but not limited to, representations and warranties relating
to the Company's organization and qualification, capitalization, its authority
to enter into the Merger Agreement and carry out the transactions contemplated
thereby, filings made by the Company with the Commission under the Securities
Act and the Exchange Act (including financial statements included in the
documents filed by the Company under these acts), the Company's financial
statements and draft Form 10-K for the fiscal year ended June 30, 1995, required
consents and approvals, compliance with applicable laws, employee relations and
benefits, litigation, environmental matters, absence of limitations on future
business conduct, intellectual property, material liabilities of the Company and
its subsidiaries, the payment of taxes and the absence of certain material
adverse changes or events.
The Parent and the Offeror have also made customary representations and
warranties to the Company, including, but not limited to, representations and
warranties relating to the Parent's and the Offeror's organization, authority to
enter into the Merger Agreement, required consents and approvals, and the
availability of sufficient funds to consummate the Offer and the Merger.
Covenants Relating to the Conduct of Business. Pursuant to the Merger
Agreement, the Company has agreed that it will, and will cause its subsidiaries
to (and will use all reasonable efforts to cause its 50% owned joint venture
with Nagoya Screw Manufacturing Co. Ltd. (the "Joint Venture") to), in all
material respects, carry on their respective businesses in, and not enter into
any material transaction other than in accordance with, the regular and ordinary
course and, to the extent consistent therewith, use their reasonable best
efforts to preserve intact their current business organizations, keep available
the services of their current officers and employees and preserve their
relationships with customers, suppliers and others having business dealings with
them.
The Company has agreed that except as contemplated by the Merger Agreement
or as disclosed by the Company to the Parent prior to the execution of the
Merger Agreement, it will not, and will not permit any of its subsidiaries to
(and will use all reasonable best efforts to cause the Joint Venture not to),
without the prior written consent of the Parent: (a) issue, deliver, sell,
pledge, dispose of or otherwise encumber any shares of its capital stock, any
other voting securities or equity equivalent or any securities convertible into,
or any rights, warrants or options to acquire, any such shares, securities or
equity equivalent (other than, in the case of the Company, the issuance of
Shares during the period from the date of the Merger Agreement through the
Effective Time upon the exercise of options to purchase Shares outstanding on
the date of the Merger Agreement in accordance with their current terms); (b)
amend or change its charter or bylaws or amend, change or waive (or exempt any
person or entity from the effect of) the Rights Agreement, except in connection
with the exercise of fiduciary duties by the Board of Directors of the Company;
(c) acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial portion of the assets of or
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<PAGE> 21
equity in, or by any other manner, any business or division thereof or otherwise
acquire or agree to acquire any assets, in each case that are material,
individually or in the aggregate, to the Company and its subsidiaries taken as a
whole, except for purchases of inventory in the ordinary course of business
consistent with past practice; (d) sell, lease or otherwise dispose of, or agree
to sell, lease or otherwise dispose of, any of its assets that are material,
individually or in the aggregate, to the Company and its subsidiaries taken as a
whole, except sales of inventory in the ordinary course of business consistent
with past practice; (e) make any commitment or enter into any contract or
agreement except (x) in the ordinary course of business consistent with past
practice or (y) for capital expenditures to be made in fiscal 1996 as identified
in the Company's Capital Expenditure Budget delivered to the Parent in
connection with the Merger Agreement; (f) incur any indebtedness for borrowed
money or guarantee any such indebtedness or issue or sell any debt securities or
guarantee any debt securities of others, except in the ordinary course of
business consistent with past practice, or make any loans, advances or capital
contributions to, or investments in, any other person, other than to the Company
or any wholly owned subsidiary of the Company and other than in the ordinary
course of business consistent with past practice; (g) alter through merger,
liquidation, reorganization, restructuring or in any other fashion the corporate
structure or ownership of any subsidiary of the Company; (h) except as may be
required as a result of a change in law or in generally accepted accounting
principles, change any of the accounting principles or practices used by the
Company; (i) revalue any assets, including, without limitation, writing down the
value of inventory or writing off notes or accounts receivable, other than in
the ordinary course of business; (j) make any tax election or settle or
compromise any material income tax liability; (k) settle or compromise any
pending or threatened suit, action or claim relating to the transactions
contemplated by the Merger Agreement; (l) pay, discharge or satisfy any
liabilities, other than in the ordinary course of business of liabilities
reflected or reserved against in, or contemplated by, the financial statements
(or the notes thereto) of the Company or incurred in the ordinary course of
business consistent with past practice; (m) increase in any manner the
compensation or fringe benefits of any directors, officers and other key
employees of the Company or pay any pension or retirement allowance not required
by any existing plan or agreement to any such employees, or become a party to,
amend or commit itself to any pension, retirement, profit-sharing or welfare
benefit plan or agreement or employment agreement with or for the benefit of any
employee, other than increases in the compensation of employees who are not
officers or directors of the Company made in the ordinary course of business
consistent with past practice, or (except pursuant to the terms of preexisting
plans or agreements) accelerate the vesting of any compensation or benefit; (n)
except in connection with the exercise of its fiduciary duties by the Board of
Directors of the Company, waive, amend or allow to lapse any term or condition
of any confidentiality or "standstill" agreement to which the Company or any
subsidiary is a party; or (o) take, or agree in writing or otherwise to take,
any of the foregoing actions or any action which would make any of the
representations or warranties of the Company contained in the Merger Agreement
untrue or incorrect as of the date when made.
Acquisition Proposals. The Company has agreed in the Merger Agreement
that, from the date of the Merger Agreement and prior to the Effective Time, (a)
that neither the Company nor its subsidiaries will, and the Company will direct
and use its reasonable best efforts to cause its officers, directors, employees
and authorized agents and representatives (including, without limitation, any
investment banker, attorney or accountant retained by it or any of its
subsidiaries) not to, initiate, solicit or encourage, directly or indirectly,
any inquiries or the making or implementation of any proposal or offer
(including, without limitation, any proposal or offer to its stockholders) with
respect to a merger, acquisition, consolidation or similar transaction
involving, or any purchase of, any equity securities or all or any significant
portion of the assets of, the Company or its subsidiaries (any such proposal or
offer an "Acquisition Proposal") or engage in any negotiations concerning, or
provide any confidential information or data to, or have any discussions with,
any person or entity relating to an Acquisition Proposal, or otherwise
facilitate any effort or attempt to make or implement an Acquisition Proposal;
(b) that it will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any person or entity conducted
previously with respect to any of the foregoing and will take the necessary
steps to inform the person or entity referred to above of the obligations
undertaken pursuant to this provision; and (c) that it will notify the Parent
immediately if any such inquiries or proposals are received by, any such
information is requested from, or any such negotiations or discussions are
sought to be initiated or continued with, the Company, but need not disclose the
identity of the other party
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<PAGE> 22
or the terms of its proposals; provided, however, that the foregoing provisions
will not prohibit the Board of Directors of the Company from (i) furnishing
information to, or entering into discussions or negotiations with, any person or
entity that makes an unsolicited bona fide proposal in writing to engage in an
Acquisition Proposal transaction which the Board of Directors of the Company in
good faith determines represents a financially superior transaction for the
stockholders of the Company as compared to the Offer and the Merger if, and only
to the extent that, (A) the Board of Directors determines, after consultation
with Skadden, Arps, Slate, Meagher & Flom, that failure to take such action
would be inconsistent with the compliance by the Board of Directors with its
fiduciary duties to stockholders imposed by law, (B) prior to or concurrently
with furnishing such information to, or entering into discussions or
negotiations with, such a person or entity, the Company provides written notice
to the Parent to the effect that it is furnishing information to, or entering
into discussions or negotiations with, such a person or entity, and (C) the
Company keeps the Parent informed of the status (including the identity of such
person or entity and terms of any proposal) of any such discussions or
negotiations; and (ii) to the extent applicable, complying with Rule 14e-2
promulgated under the Exchange Act with regard to an Acquisition Proposal.
Nothing contained in the foregoing provisions will (x) permit the Company to
terminate the Merger Agreement, (y) permit the Company to enter into any
agreement with respect to an Acquisition Proposal during the term of the Merger
Agreement, or (z) affect any other obligation of any party under the Merger
Agreement.
Annual Meeting. The Company agreed pursuant to the Merger Agreement that
it will defer and/or postpone the holding of its Annual Meeting of Stockholders
indefinitely pending the consummation of the Merger unless the Company is
required to hold such meeting by an order from a court of competent
jurisdiction.
Company Stock Options. Pursuant to the Merger Agreement, at the Effective
Time, all outstanding stock options to purchase Shares (the "Company Stock
Options") granted under the Company's 1991 Stock Option Plan and the 1992 Stock
Option Plan for Non-employee Directors (the "Stock Plans"), whether or not
exercisable, and whether or not vested, (i) will become fully exercisable and
vested and (ii) will be, upon their surrender to the Company by the holders,
canceled by the Company. In consideration of such cancellation, the Surviving
Corporation will deliver on or promptly after the Effective Time to each holder
thereof cash in an amount per Share subject to such canceled Company Stock
Option equal to the excess of the Merger Consideration over the exercise price
per Share of such Company Stock Option. The Company has agreed pursuant to the
Merger Agreement to use its best efforts to cause each holder of a Company Stock
Option to execute an agreement with the Company, prior to the Effective Time,
consenting to the payment described in the preceding sentence as consideration
for the cancellation of any Company Stock Options held by such holder. No
payment will be made by the Surviving Corporation with respect to any Company
Stock Option having an exercise price equal or greater than the Merger
Consideration. The Company has agreed that the committee that administers each
of the Stock Plans will determine and take all necessary action so that the
right to receive the foregoing cash consideration will be the only right of each
holder of a Company Stock Option on and after the Effective Time. Pursuant to
the Merger Agreement, the Company has agreed to terminate the Stock Plans
immediately prior to the Effective Time and to grant no additional Company Stock
Options after the date of the Merger Agreement.
Performance Share Plan. The Company has agreed pursuant to the Merger
Agreement to terminate the Company's 1988 Performance Share Plan (the
"Performance Share Plan") immediately prior to the Effective Time and not to
grant additional Performance Shares (as defined in the Performance Share Plan)
from and after the date of the Merger Agreement. At the Effective Time, all
outstanding Performance Shares will be canceled and all Performance Awards (as
defined in the Performance Share Plan) will be deemed 100 percent earned for the
relevant Performance Period (as defined in the Performance Share Plan) and will
be paid in cash by the Surviving Corporation as soon as practicable after the
Effective Time.
Indemnification. The Merger Agreement provides that, from and after the
Effective Time, the Parent will, and will cause the Surviving Corporation to,
indemnify and hold harmless all past and present officers, directors, employees
and agents (the "Indemnified Parties") of the Company and of its subsidiaries to
the full extent such persons may be indemnified by the Company pursuant to the
Company's Certificate of Incorporation and Bylaws as in effect as of the date of
the Merger Agreement for acts and omissions occurring
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<PAGE> 23
at or prior to the Effective Time and has agreed to advance reasonable
litigation expenses incurred by such persons in connection with defending any
action arising out of such acts or omissions, provided that such persons provide
the requisite affirmation and undertaking, as set forth in the Company's Bylaws
prior to the Effective Time. The Parent has agreed to provide, or cause the
Surviving Corporation to provide, for a period of not less than six years after
the Effective Time, the Company's current directors and officers an insurance
and indemnification policy that provides coverage for events occurring at or
prior to the Effective Time (the "D&O Insurance") that is no less favorable than
the existing policy or, if substantially equivalent insurance coverage is
unavailable, the best available coverage; provided, however, that the Parent and
the Surviving Corporation will not be required to pay an annual premium for the
D&O Insurance in excess of $105,000, but in such case will purchase as much
coverage as possible for such amount.
Employee Benefits. Pursuant to the Merger Agreement, to the extent
permitted by law, for a period of one year following the Effective Time, the
Parent has agreed to cause the Surviving Corporation to provide the current and
former non-union employees of the Company and its subsidiaries with employee
benefits no less favorable, in aggregate value, than those provided by the
Company on the date of the Merger Agreement to those employees; provided,
however, that (i) neither the Parent nor the Surviving Corporation will be
obligated to provide an employee stock ownership plan to such employees or to
continue any one or more of such benefits, (ii) such "employee benefits" include
benefits provided under any "employee benefit plan" (as defined under section
3(3) of ERISA) of the Company and its subsidiaries and (iii) neither the Parent
nor the Surviving Corporation will be obligated to provide any benefits which
are payable pursuant to a "change in control", except as otherwise provided in
the Merger Agreement. The Parent and the Surviving Corporation have agreed to
honor (without modification) and assume certain employment agreements, severance
agreements and individual benefit arrangements which were disclosed to the
Parent prior to the execution of the Merger Agreement, all as in effect at the
Effective Time. Pursuant to the Merger Agreement, the Surviving Corporation will
pay for customary out-placement services to any executive officer of the Company
whose employment is terminated by the Surviving Corporation and who is entitled
to payments under an existing severance agreement, on the same basis as
out-placement services are provided to executive officers of the Parent or its
subsidiaries of a comparable level.
Reasonable Best Efforts. Upon the terms and subject to the conditions set
forth in the Merger Agreement, each of the parties thereto agrees to use its
reasonable best efforts to take, or cause to be taken, all actions (including
entering into transactions) and to assist and cooperate with the other parties
in doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Merger, and the other
transactions contemplated by the Merger Agreement, including, without
limitation, obtaining certain consents, approvals and waivers from Governmental
Entities (as defined in the Merger Agreement) and third parties and defending
any lawsuit or other legal proceedings, whether judicial or administrative,
challenging the Merger Agreement or the consummation of the transactions
contemplated thereby, including seeking to have any stay or temporary
restraining order vacated or reversed. Neither the Parent, the Offeror nor the
Company, however, will be required to take any action described above that would
in any event have a Material Adverse Effect (as defined in the Merger Agreement)
on either the Parent or the Company. In addition, neither the Parent, the
Offeror nor any of their affiliates will be required to enter into any
transaction or take any other action that would require a waiver of, or that is
inconsistent with satisfaction of, the conditions of the Offer set forth in
clauses (a)(iii), (iv) or (v) thereto. See Section 15 -- "Certain Conditions to
the Offeror's Obligations."
Conditions Precedent to Merger. The respective obligations of the Parent,
the Offeror and the Company to effect the Merger are subject to the fulfillment
at or prior to the Effective Time of the following conditions: (a) if required
by applicable law, the Merger Agreement shall have been approved by the
requisite vote of the stockholders of the Company; and (b) no Governmental
Entity or court of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any law, rule, regulation, executive order,
decree or injunction which prohibits or has the effect of prohibiting the
consummation of the Merger; provided, however, the Company, the Parent and the
Offeror have agreed that, prior to invoking this provision, they shall use their
reasonable best efforts (subject to the other terms and conditions of the Merger
Agreement) to have any such order, decree or injunction vacated.
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<PAGE> 24
Termination. The Merger Agreement may be terminated at any time prior to
the Effective Time, whether prior to or after approval by the stockholders of
the Company: (a) by mutual written consent of the Parent and the Company; (b) by
the Company if: (i) the Offer has not been timely commenced (except as a result
of actions or omissions by the Company); or (ii) there is an Acquisition
Proposal which the Board of Directors of the Company in good faith determines
represents a financially superior transaction for the stockholders of the
Company as compared to the Offer and the Merger and the Board of Directors of
the Company determines, after consultation with Skadden, Arps, Slate, Meagher &
Flom, that failure to terminate the Merger Agreement would be inconsistent with
the compliance by the Board of Directors with its fiduciary duties to
stockholders imposed by law; provided, however, that such right to terminate the
Merger Agreement shall not be available (1) if the Company has breached in any
material respect its obligations concerning Acquisition Proposals or (2) if,
prior to or concurrently with any purported termination pursuant to this clause,
the Company shall not have paid the Termination Fee (as defined below, see
"-- Fees and Expenses") and, in each case, unless the Company has provided the
Parent and the Offeror with one business day's prior written notice of its
intent to so terminate the Merger Agreement together with a summary of the
material terms and conditions of such offer; or (iii) there has been a breach by
the Parent or the Offeror of any representation or warranty that would have a
material adverse effect on the Parent's or the Offeror's ability to perform its
obligations under the Merger Agreement and which breach has not been cured
within twenty business days following receipt by the Parent or the Offeror of
notice of the breach; or (iv) the Parent or the Offeror fails to comply in any
material respect with any of its material obligations or covenants contained in
the Merger Agreement, including, without limitation, the obligation of the
Offeror to purchase Shares pursuant to the Offer, unless such failure results
from a breach of the Company of any obligation, representation, or warranty
under the Merger Agreement, which has not been cured within twenty business days
following Company's receipt of notice of the breach; (c) by the Parent if the
Board of Directors of the Company shall have failed to recommend, or shall have
withdrawn, modified or amended in any material respect its approval or
recommendations of the Offer or the Merger or shall have resolved to do any of
the foregoing; or (d) by either the Parent or the Company if: (i) the Merger has
not been effected on or prior to the close of business on March 31, 1996;
provided, however, that the right to terminate the Merger Agreement pursuant to
this clause (d) will not be available (y) to the Parent if the Offeror or any
affiliate of the Offeror acquires Shares pursuant to the Offer, or (z) to any
party whose failure to fulfill any obligation of the Merger Agreement has been
the cause of, or resulted in, the failure of the Merger to have occurred on or
prior to the aforesaid date; or (ii) any court of competent jurisdiction or any
governmental, administrative or regulatory authority, agency or body shall have
issued an order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the transactions contemplated by
the Merger Agreement and such order, decree, ruling or other action shall have
become final and nonappealable; or (iii) upon a vote at a duly held meeting or
upon any adjournment thereof, the stockholders of the Company shall have failed
to give any approval required by applicable law; or (iv) as the result of the
failure of any of the conditions described in Section 15, the Offer shall have
terminated or expired in accordance with its terms without the Offeror having
purchased any shares of Common Stock pursuant to the Offer; provided, however,
that the right to terminate the Merger Agreement pursuant this clause (iv) will
not be available to any party whose failure to fulfill any of its obligations
under the Merger Agreement results in the failure of any such condition.
Fees and Expenses. Except as described in the next sentence, whether or
not the Merger is consummated, all costs and expenses incurred in connection
with the Merger Agreement and the transactions contemplated thereby shall be
paid by the party incurring such costs and expenses. The Company has agreed in
the Merger Agreement that, if the Merger Agreement is terminated pursuant to:
(i) clause (d)(i) or (iv) set forth above under "Termination" and at the time of
such termination (x) the Minimum Condition has not been satisfied and (y) an
Acquisition Proposal existed; (ii) clause (b)(ii) set forth above under
"Termination"; (iii) clause (c) set forth above under "Termination" and at the
time of such termination an Acquisition Proposal existed; or (iv) clause (a) or
clause (d)(i) set forth above under "Termination" and at the time of such
termination any person, entity or group (as defined in Section 13(d)(3) of the
Exchange Act) (other than the Parent or any of its affiliates) shall have become
the beneficial owner of more than 20% of the outstanding Shares and such person,
entity or group (or any affiliate of such person, entity or group) thereafter
consummates an Acquisition Proposal at any time on or prior to the date which is
six months after
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such termination of the Merger Agreement with a value per Share of at least
$36.00 (with appropriate adjustments for reclassifications of capital stock,
stock dividends, stock splits, reverse stock splits and similar events), the
Company will pay to the Parent (the "Termination Fee") the sum of (a) $5
million, plus (b) the amount of all documented costs and expenses (not to exceed
$2.5 million) incurred by the Parent, the Offeror or their affiliates in
connection with the Merger Agreement or the transactions contemplated thereby.
Such payment will be made as promptly as practicable but in no event later than
two business days following termination of the Merger Agreement pursuant to the
immediately preceding sentence, or, in the case of clause (iv) of the
immediately preceding sentence, upon consummation of such Acquisition Proposal.
If the Company fails to pay such amount when due in accordance with the
immediately preceding sentence, the Parent will be entitled to the payment from
the Company, in addition to such amount, of any legal fees and expenses incurred
in collecting such amount and interest thereon at the rate of 10% per annum.
14. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that neither the Company nor any of its
subsidiaries will, among other things, prior to the earlier of the time that the
Parent designates a majority of the members of the Board of Directors of the
Company (see Section 12 -- " -- Board Representation") after the purchase of
Shares pursuant to the Offer or the Effective Time (x) declare, set aside or pay
any dividends on, or make any other actual, constructive or deemed distributions
in respect of, any of its capital stock, or otherwise make any payments to
stockholders of the Company in their capacity as such, other than (1) quarterly
dividends of $.15 per share declared and payable consistent with past practices
and (2) dividends payable to the Company declared by any of the Company's
subsidiaries, (y) split, combine or reclassify any of its capital stock or issue
or authorize the issuance of any other securities in respect of, in lieu of or
in substitution for shares of its capital stock, or (z) purchase, redeem or
otherwise acquire any shares of capital stock of the Company or any of its
subsidiaries or any other securities thereof or any rights, warrants or options
to acquire any such shares or other securities. See Section 6.
15. CERTAIN CONDITIONS TO THE OFFEROR'S OBLIGATIONS.
Notwithstanding any other term of the Offer or the Merger Agreement, the
Offeror will not be required to accept for payment or pay for, subject to any
applicable rules and regulations of the Commission, including Rule 14e-1(c) of
the Exchange Act, any Shares not theretofore accepted for payment or paid for
and may terminate or amend the Offer as to such Shares unless (i) the Minimum
Condition is satisfied and (ii) any waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), applicable to
the purchase of Shares pursuant to the Offer has expired or been terminated.
Furthermore, notwithstanding any other term of the Offer or the Merger
Agreement, the Offeror will not be required to accept for payment or, subject as
aforesaid, to pay for any Shares not theretofore accepted for payment or paid
for, and may terminate or amend the Offer if at any time on or after the date of
the Merger Agreement and before the acceptance of such Shares for payment or the
payment therefor, any of the following conditions exist or shall occur and
remain in effect:
(a) there shall have been instituted, pending or threatened any action
or proceeding by any domestic (federal and state), foreign or supranational
court, commission, governmental body, regulatory or administrative agency,
authority or tribunal (a "Governmental Entity") which (i) seeks to
challenge the acquisition by the Parent or the Offeror (or any of its
affiliates) of Shares pursuant to the Offer, restrain, prohibit or delay
the making or consummation of the Offer or the Merger, or obtain damages in
connection therewith in an amount which would have a Material Adverse
Effect (as defined in the Merger Agreement) on the Company, (ii) seeks to
make the purchase of or payment for some or all of the Shares pursuant to
the Offer or the Merger illegal, (iii) seeks to impose limitations on the
ability of the Parent (or any of its affiliates) effectively to acquire or
hold, or to require the Parent or the Company or any of their respective
affiliates or subsidiaries to dispose of or hold separate, any portion of
the assets or the business of the Parent and its affiliates or any material
portion of the assets or the business of the Company and its Subsidiaries
(as defined in the Merger Agreement) taken as a whole, (iv) seeks to impose
material limitations on the ability of the Parent (or its affiliates) to
exercise full rights of
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<PAGE> 26
ownership of the Shares purchased by it, including, without limitation, the
right to vote the Shares purchased by it on all matters properly presented
to the stockholders of the Company, or (v) seeks to restrict any future
business activity by the Parent (or any of its affiliates), including,
without limitation, requiring the prior consent of any person or entity
(including any Governmental Entity) to future transactions by the Parent
(or any of its affiliates); or
(b) there shall have been promulgated, enacted, entered, enforced or
deemed applicable to the Offer or the Merger, by any state, federal or
foreign Governmental Entity or by any court, domestic or foreign, any
statute, rule, regulation, judgment, decree, order or injunction, that is
reasonably likely to directly or indirectly result in any of the
consequences referred to in clauses (i) through (v) of subsection (a)
above; or
(c) the Merger Agreement shall have been terminated in accordance with
its terms; or
(d) any of the representations and warranties made by the Company in
the Merger Agreement shall not have been true and correct in all material
respects when made, or shall thereafter have ceased to be true and correct
in all material respects as if made as of such later date (other than
representations and warranties made as of a specified date), or the Company
shall not in all material respects have performed each obligation and
agreement and complied with each covenant to be performed and complied with
by it under the Merger Agreement; or
(e) the Company's Board of Directors shall have modified or amended
its recommendation of the Offer in any manner adverse to the Parent or
shall have withdrawn its recommendation of the Offer, or shall have
recommended acceptance of any Acquisition Proposal or shall have resolved
to do any of the foregoing; or
(f) (i) any corporation, entity or "group" (as defined in Section
13(d)(3) of the Exchange Act) ("person"), other than the Parent, shall have
acquired beneficial ownership of more than 20% (or, in the case of Okabe
and its affiliates, 21%) of the outstanding Shares, or shall have been
granted any options or rights, conditional or otherwise, to acquire a total
of more than 20% of the outstanding Shares; (ii) any new group shall have
been formed which beneficially owns more than 20% (or, in the case of Okabe
and its affiliates, 21%) of the outstanding Shares; or (iii) any person
(other than the Parent or one or more of its affiliates) shall have entered
into an agreement in principle or definitive agreement with the Company
with respect to a tender or exchange offer for any Shares or a merger,
consolidation or other business combination with or involving the Company.
The foregoing conditions are for the sole benefit of the Parent and the
Offeror and may be asserted by the Parent or the Offeror regardless of the
circumstances giving rise to any such condition and may be waived by the Parent
or the Offeror, in whole or in part, at any time and from time to time, in the
sole discretion of the Parent. The failure by the Parent or the Offeror at any
time to exercise any of the foregoing rights will not be deemed a waiver of any
right, the waiver of such right with respect to any particular facts or
circumstances shall not be deemed a waiver with respect to any other facts or
circumstances, and each right will be deemed an ongoing right which may be
asserted at any time and from time to time.
If the Offer is terminated pursuant to the foregoing provisions, all
tendered Shares not theretofore accepted for payment shall forthwith be returned
by the Depositary to the tendering stockholders.
16. CERTAIN REGULATORY AND LEGAL MATTERS.
Except as set forth in this Section 16, the Offeror is not aware of any
approval or other action by any governmental or administrative agency which
would be required for the acquisition or ownership of Shares by the Offeror as
contemplated herein. Should any such approval or other action be required, it
will be sought, but the Offeror has no current intention to delay the purchase
of Shares tendered pursuant to the Offer pending the outcome of any such matter,
subject, however, to the Offeror's right to decline to purchase Shares if any of
the conditions specified in Section 15 shall have occurred. There can be no
assurance that any such approval or other action, if needed, would be obtained
or would be obtained without conditions that the Parent is not required to
accept.
24
<PAGE> 27
Antitrust. Under the provisions of the HSR Act applicable to the Offer,
the acquisition of Shares under the Offer may be consummated following the
expiration of a 15 calendar-day waiting period following the filing by the
Parent of a Notification and Report Form with respect to the Offer, unless the
Parent receives a request for additional information or documentary material
from the Department of Justice, Antitrust Division (the "Antitrust Division") or
the Federal Trade Commission ("FTC") or unless early termination of the waiting
period is granted. The Offeror made such a filing on September 13, 1995. If,
within the initial 15-day waiting period, either the Antitrust Division or the
FTC request additional information or material from the Parent concerning the
Offer, the waiting period will be extended to the tenth calendar day after the
date of substantial compliance by the Parent with such request. Complying with a
request for additional information or material can take a significant amount of
time.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the Offeror's proposed acquisition of
the Company. At any time before or after the Offeror's acquisition of Shares
pursuant to the Offer, the Antitrust Division or the FTC could take such action
under the antitrust laws as either deems necessary or desirable in the public
interest, including seeking to enjoin the purchase of Shares pursuant to the
Offer or the consummation of the Merger or seeking the divestiture of Shares
acquired by the Offeror or the divestiture of substantial assets of the Company
or its subsidiaries or the Parent or its subsidiaries. Private parties may also
bring legal action under the antitrust laws under certain circumstances. There
can be no assurance that a challenge to the Offer on antitrust grounds will not
be made, or, if such a challenge is made, of the result thereof.
If any applicable waiting period under the HSR Act has not expired or been
terminated prior to the Expiration Date, the Offeror will not be obligated to
proceed with the Offer or the purchase of any Shares not theretofore purchased
pursuant to the Offer. See Section 15.
State Takeover Laws. The Company is incorporated under the laws of the
State of Delaware. In general, Section 203 of the DGCL ("Section 203") prevents
an "interested stockholder" (including a person who owns or has the right to
acquire 15% or more of a corporation's outstanding voting stock) from engaging
in a "business combination" (defined to include mergers and certain other
actions) with a Delaware corporation for a period of three years following the
date such person became an interested stockholder. The Board of Directors of the
Company has taken all appropriate action so that neither the Parent nor the
Offeror is an "interested stockholder" pursuant to Section 203.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects in such states. In Edgar v. MITE Corp., the Supreme Court of
the United States invalidated on constitutional grounds the Illinois Business
Takeover statute, which, as a matter of state securities law, made takeovers of
corporations meeting certain requirements more difficult. However in 1987, in
CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of
Delaware may, as a matter of corporate law and, in particular, with respect to
those aspects of corporate law concerning corporate governance, constitutionally
disqualify a potential acquirer from voting on the affairs of a target
corporation without the prior approval of the remaining stockholders. The state
law before the Supreme Court was by its terms applicable only to corporations
that had a substantial number of stockholders in the state and were incorporated
there.
The Company, directly or through subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws. The Offeror does not know whether any of these laws will, by
their terms, apply to the Offer or the Merger and may not have complied with any
such laws. Should any person seek to apply any state takeover law, the Offeror
will take such action as then appears desirable, which may include challenging
the validity or applicability of any such statute in appropriate court
proceedings. In the event it is asserted that one or more state takeover laws is
applicable to the Offer or the Merger, and an appropriate court does not
determine that it is inapplicable or invalid as applied to the Offer, the
Offeror might be required to file certain information with, or receive approvals
from, the relevant state authorities. In addition, if enjoined, the Offeror
might be unable to accept for payment any Shares tendered
25
<PAGE> 28
pursuant to the Offer, or be delayed in continuing or consummating the Offer and
the Merger. In such case, the Offeror may not be obligated to accept for payment
any Shares tendered. See Section 15.
17. FEES AND EXPENSES.
Dillon, Read & Co. Inc. (the "Dealer Manager") is acting as the Dealer
Manager in connection with the Offer and has provided certain financial advisory
services to the Parent and the Offeror in connection with the proposed
acquisition of the Shares. The Parent has agreed to pay the Dealer Manager
$300,000 upon commencement of the Offer. The Parent has also agreed to pay the
Dealer Manager a fee of $1,200,000, payable as follows: (i) $1,200,000 times a
fraction the numerator of which is the number of Shares purchased in the Offer
and the denominator of which is the total number of outstanding Shares, upon the
purchase of Shares pursuant to the Offer, and (ii) the balance upon closing of
the Merger. The Parent has also agreed that, if the Merger Agreement is
terminated and the Company pays the Parent a Termination Fee (see Section
13 -- "-- Fees and Expenses"), then the Parent will pay the Dealer Manager a fee
of $700,000. In addition, the Offeror has agreed to reimburse the Dealer Manager
for certain reasonable out-of-pocket expenses incurred by the Dealer Manager in
connection with the Offer, including the reasonable fees of its counsel (subject
to certain limitations), and to indemnify the Dealer Manager against certain
liabilities and expenses, including certain liabilities under the federal
securities laws.
The Offeror has retained D.F. King & Co., Inc., as Information Agent, and
Harris Trust Company of New York, as Depositary, in connection with the Offer.
The Information Agent and the Depositary will receive reasonable and customary
compensation for their services hereunder and reimbursement for their reasonable
out-of-pocket expenses. The Information Agent may contact holders of Shares by
mail, telephone, facsimile, telegraph and personal interviews and may request
brokers, dealers and other nominee stockholders to forward materials relating to
the Offer to beneficial owners of Shares. The Information Agent and the
Depositary will also be indemnified by the Offeror against certain liabilities
in connection with the Offer, including certain liabilities under the federal
securities laws.
Except as described herein, neither the Offeror nor the Parent, nor any
officer, director, stockholder, agent or other representative of the Offeror or
the Parent, will pay any fees or commissions to any broker, dealer or other
person for soliciting tenders of Shares pursuant to the Offer. Brokers, dealers,
commercial banks, trust companies and other nominees will, upon request, be
reimbursed by the Offeror for customary mailing and handling expenses incurred
by them in forwarding materials to their customers.
18. MISCELLANEOUS.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares residing in any jurisdiction in which the making or
acceptance thereof would not be in compliance with the securities, blue sky or
other laws of such jurisdiction. In any jurisdiction where the 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 Offeror by the Dealer
Manager or one or more registered brokers or dealers licensed under the laws of
such jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of the Offeror other than as contained in this Offer to
Purchase or in the Letter of Transmittal, and, if any such information or
representation is given or made, it should not be relied upon as having been
authorized by the Offeror.
The Offeror and the Parent have filed with the Commission a Statement on
Schedule 14D-1, pursuant to Section 14(d)(1) of the Exchange Act and Rule 14d-1
promulgated thereunder, furnishing certain information with respect to the
Offer. Such Schedule 14D-1 and any amendments thereto, including exhibits, may
be examined and copies may be obtained at the same places and in the same manner
as set forth with
26
<PAGE> 29
respect to the Company in Section 8 (except that they will not be available at
the regional offices of the Commission).
E.I. TEXTRON INC.
September 19, 1995
27
<PAGE> 30
ANNEX I
CERTAIN INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS
OF THE PARENT AND THE OFFEROR
1. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARENT. Set forth below are the
name, age, present principal occupation or employment, five-year employment
history and business or residence address of each director and executive officer
of the Parent. Unless otherwise indicated, each person identified below has been
employed by the Parent for the last five years, and each such person's business
address is 40 Westminster Street, Providence, RI 02903-2596. All persons listed
below are citizens of the United States.
<TABLE>
<CAPTION>
NAME AND ADDRESS AGE DIRECTORS
------------------------------- --- ---------------------------------------------
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------
James F. Hardymon 60 Director Mr. Hardymon is Chairman and Chief Executive
Since Officer of the Parent. He joined the Parent
1989 in December 1989 as President and Chief
Operating Officer, became Chief Executive
Officer in January 1992, assumed the
additional title of Chairman in January 1993
and relinquished the title of President to
Mr. Campbell in January 1994. Mr. Hardymon is
a Director of Avco Financial Services, Inc.,
The Paul Revere Corporation and Fleet
Financial Group, Inc.
------------------------------------------------------------------------------------------------
Lewis B. Campbell 49 Director Mr. Campbell is President and Chief Operating
Since Officer of the Parent. He joined the Parent
1994 in September 1992 as Executive Vice President
and Chief Operating Officer and assumed his
present position in January 1994. Mr.
Campbell served as a Vice President of
General Motors and General Manager of its
Flint Automotive Division Buick-Oldsmobile-
Cadillac Group from 1988 to 1991 and became
General Manager of its GMC Truck Division in
1991. Mr. Campbell is a Director of Avco
Financial Services, Inc., The Paul Revere
Corporation and Citizens Financial Group,
Inc.
------------------------------------------------------------------------------------------------
H. Jesse Arnelle 61 Director Mr. Arnelle is senior partner in the law firm
400 Urbano Drive Since of Arnelle, Hastie, McGee, Willis & Greene,
San Francisco, CA 94127 1993 San Francisco. He co-founded the firm in
1985. He is a Director of FPL Group, Inc.,
Wells Fargo & Company and Wells Fargo Bank,
N.A., WMX Technologies, Inc., Armstrong
Worldwide Industries, Inc. and Eastman
Chemical Corporation.
------------------------------------------------------------------------------------------------
R. Stuart Dickson 66 Director Mr. Dickson was Chairman of the Board of
Ruddick Corporation Since Ruddick Corporation from 1968 until February
2000 Two First Union Center 1984 1994. Mr. Dickson currently serves as
Charlotte, NC 28282 Chairman of the Ruddick Executive Committee.
Mr. Dickson is a Director of First Union
Corporation, PCA International and United
Dominion Industries.
</TABLE>
A-1
<PAGE> 31
<TABLE>
<CAPTION>
NAME AND ADDRESS AGE DIRECTORS
------------------------------- --- ---------------------------------------------
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------
B.F. Dolan 67 Director Mr. Dolan is retired Chairman of the Parent.
Two First Union Center Since He served as President from 1980 until 1989
Suite 1990 1980 and as Chief Executive Officer from 1985
Charlotte, NC 28282 until January 1992. He assumed the additional
title of Chairman in 1986 and served in that
capacity until his retirement at the end of
1992. He is a Director of First Union
Corporation, FPL Group, Inc., Ruddick
Corporation and Polaris Industries, Inc.
------------------------------------------------------------------------------------------------
John D. Macomber 67 Director Mr. Macomber is Principal of JDM Investment
JDM Investment Group Since Group, a private investment firm. He joined
2806 N Street, N.W. 1993 the firm as Principal in 1992. He served as
Washington, DC 20007 Chairman and President of the Export-Import
Bank of the United States from 1989 to 1992.
He is a Director of Bristol Myers Squibb Co.,
The Brown Group, Inc., Lehman Brothers
Holdings, Inc., Pilkington Ltd. and Xerox
Corporation.
------------------------------------------------------------------------------------------------
Barbara Scott Preiskel 71 Director Mrs. Preiskel is a Director of the American
60 East 42nd Street Since Stores Company, General Electric Company,
Suite 3125 1975 Massachusetts Mutual Life Insurance Company
New York, NY 10165-3125 and The Washington Post Company. Mrs.
Preiskel is a former Senior Vice President
and General Counsel of the Motion Picture
Association of America, Inc.
------------------------------------------------------------------------------------------------
Sam F. Segnar 68 Director Mr. Segnar retired as the Chairman and Chief
10077 Grogan's Mill Road Since Executive Officer of Enron Corporation in
Suite 530 1982 1985 and as Chairman of the Board of Vista
The Woodlands, TX 77380 Chemical Co. in 1988. Mr. Segnar is a
Director of Hartmarx Corporation, Seagull
Energy Corporation, ProBank, N.A. and Mapco
Inc.
------------------------------------------------------------------------------------------------
Jean Head Sisco 70 Director Mrs. Sisco is a Partner of Sisco Associates.
Sisco Associates Since She is a Director of The Neiman Marcus Group,
2517 Massachusetts Avenue, N.W. 1975 Inc., Santa Fe Pacific Corporation, Santa Fe
Washington, DC 20008-2823 Pacific Gold Corporation, Chiquita Brands
International, Inc., Washington Mutual
Investors Fund, Inc., and K-Tron
International, Inc.
------------------------------------------------------------------------------------------------
John W. Snow 56 Director Mr. Snow is Chairman, President, Chief
CSX Corporation Since Executive Officer and a Director of CSX
One James Center 1991 Corporation. Mr. Snow became President and a
Richmond, VA 23219 Director of CSX Corporation in 1988, Chief
Executive Officer in 1989 and Chairman in
1991. Mr. Snow is a Director of USX
Corporation, Dominion Resources, Inc., Na-
tionsBank Corporation and Bassett Furniture
Industries, Inc.
</TABLE>
A-2
<PAGE> 32
<TABLE>
<CAPTION>
NAME AND ADDRESS AGE DIRECTORS
------------------------------- --- ---------------------------------------------
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------
Martin D. Walker 63 Director Mr. Walker is Chairman, Chief Executive
M.A. Hanna Co. Since Officer and a Director of M. A. Hanna
200 Public Square, Suite 1986 Company, an international specialty chemicals
36-5000 company. He joined and assumed his current
Cleveland, OH 44144-2304 position at the company in 1986. Mr. Walker
is a Director of Comerica, Inc., The Reynolds
and Reynolds Company and the Timken Company.
------------------------------------------------------------------------------------------------
Thomas B. Wheeler 59 Director Mr. Wheeler has been President, Chief
Massachusetts Mutual Life Ins. Since Executive Officer and a Director of
Co. 1993 Massachusetts Mutual Life Insurance Company
1295 State Street since 1988. He is a Director of the Bank of
Springfield, MA 01111 Boston Corporation.
</TABLE>
A-3
<PAGE> 33
<TABLE>
<CAPTION>
NAME AGE EXECUTIVE OFFICERS
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------
James F. Hardymon 60 Chairman and Chief Executive Officer. See
"Directors" above.
------------------------------------------------------------------------------------------------
Lewis B. Campbell 49 President and Chief Operating Officer. See
"Directors" above.
------------------------------------------------------------------------------------------------
Harold K. McCard 63 Senior Vice President Operations since August
1995; formerly President, Textron Defense
Systems, 1985 to August 1995.
------------------------------------------------------------------------------------------------
Richard A. Watson 50 Senior Vice President Financial Services
since August 1995; formerly Group Vice
President, 1990 to August 1995; Vice
President of the Parent and President,
Textron Investment Management Company Inc.,
1986 to 1990.
------------------------------------------------------------------------------------------------
Herbert L. Henkel 47 President Textron Industrial Products, since
August 1995; formerly Group Vice President,
1993-August 1995; President of the Greenlee
Textron Division, 1987 to 1993.
------------------------------------------------------------------------------------------------
Fred L. Hubacker 50 President Textron Automotive Company since
May 1994; formerly Group Vice President and
President Textron Acustar Plastics Inc., 1993
to May 1994; Group Controller, Procurement
and Supply Operations (1991 to 1993) and Vice
President Finance, Acustar Inc. unit (1989 to
1991) of Chrysler Corporation.
------------------------------------------------------------------------------------------------
Derek Plummer 62 Chairman Textron Automotive Company since May
1994; formerly Group Vice President, 1986 to
May 1994.
------------------------------------------------------------------------------------------------
Terry D. Stinson 53 President, Textron Aerospace Systems and
Components since August 1995; formerly Group
Vice President, 1991 to August 1995;
President of the Hamilton Standard Division
of United Technologies Corporation, 1986 to
1991.
------------------------------------------------------------------------------------------------
Mary L. Howell 43 Executive Vice President -- Government and
International since August 1995; formerly
Senior Vice President Government and
International, 1993 to August 1995; Vice
President -- Government Affairs, 1985 to
1993.
------------------------------------------------------------------------------------------------
Wayne W. Juchatz 49 Executive Vice President and General Counsel
since March 1995; formerly Executive Vice
President, General Counsel and Secretary of
R.J. Reynolds Tobacco Company, a subsidiary
of RJR Nabisco, Inc., 1985 to March 1995. Mr.
Juchatz is a director of Avco Financial
Services Inc. and The Paul Revere
Corporation.
</TABLE>
A-4
<PAGE> 34
<TABLE>
<CAPTION>
NAME AGE EXECUTIVE OFFICERS
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------
Stephen L. Key 52 Executive Vice President and Chief Financial
Officer since March 1995; formerly Executive
Vice President and Chief Financial Officer of
ConAgra, Inc., 1992 to March 1995; Managing
Partner of the New York office of Ernst &
Young from 1988 to 1992. Mr. Key is a
director of Avco Financial Services, Inc. and
The Paul Revere Corporation.
------------------------------------------------------------------------------------------------
Richard A. McWhirter 61 Executive Vice President and Corporate
Secretary since April 1995; formerly
Executive Vice President and Chief Financial
Officer, 1993 to April 1995; Senior Vice
President and Secretary, 1991 to 1993; Senior
Vice President -- Insurance and Environ-
mental Affairs, 1988 to 1991.
------------------------------------------------------------------------------------------------
William F. Wayland 60 Executive Vice President Administration and
Chief Human Resources Officer since 1993;
formerly Executive Vice President -- Human
Resources, 1989 to 1993.
------------------------------------------------------------------------------------------------
Edward C. Arditte 40 Vice President -- Communications and Risk
Management since May 1994; formerly Vice
President -- Investor Relations and Risk
Management, 1993 to May 1994; Vice
President -- Investor Relations, 1991 to
1993; Director -- Investor Relations, 1990 to
1991; Assistant Treasurer, 1986 to 1990.
------------------------------------------------------------------------------------------------
Brian T. Downing 47 Vice President and Treasurer since 1986.
------------------------------------------------------------------------------------------------
Peter B.S. Ellis 41 Vice President -- Strategic Planning since
March 1995; formerly Managing Director,
Telecommunications Practice of Arthur D.
Little, Inc., 1991 to March 1995; Vice
President, Business Development of Contel
Corporation, 1988 to 1991.
------------------------------------------------------------------------------------------------
Douglas A. Fahlbeck 49 Vice President -- Acquisitions and
Dispositions since July 1995; formerly
Executive Vice President and Chief Financial
Officer, 1994 to July 1995, and Senior Vice
President and Chief Financial Officer, 1985
to 1994, of Textron Financial Corporation.
------------------------------------------------------------------------------------------------
Arnold M. Friedman 52 Vice President and Deputy General Counsel
since 1984.
------------------------------------------------------------------------------------------------
William Gauld 42 Vice President -- Corporate Information
Management and Chief Information Officer
since July 1995; formerly Staff Vice
President Corporate Information Management
and Chief Information Officer, September 1994
to July 1995; General Manager Information,
Electrical Distribution and Control Group,
General Electric Company, 1992 to 1994;
Manager, Manufacturing, GE Appliances,
General Electric Company, 1989 to 1991.
</TABLE>
A-5
<PAGE> 35
<TABLE>
<CAPTION>
NAME AGE EXECUTIVE OFFICERS
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------
Frank Gulden 59 Senior Vice President -- Human Resources
since 1993; formerly Group Vice President,
1990 to 1993; Vice President North and South
America, Fastening Systems Group of Emhart
Corporation, 1989 to 1990.
------------------------------------------------------------------------------------------------
Gregory E. Hudson 48 Vice President -- Taxes since 1987.
------------------------------------------------------------------------------------------------
William P. Janovitz 52 Vice President and Controller since 1983.
------------------------------------------------------------------------------------------------
Mary Lovejoy 40 Vice President -- Investor Relations since
August 1995; formerly Director, Investor
Relations, 1993 to August 1995; Vice
President and Senior Corporate Banker, First
National Bank of Chicago, 1984 to 1993.
------------------------------------------------------------------------------------------------
Frank McNally 56 Vice President -- Employee Relations and
Benefits since July 1995; formerly Staff Vice
President, 1992 to July 1995; Director
Employee Relations, 1991 to 1992.
------------------------------------------------------------------------------------------------
Daniel L. Schaffer 59 Vice President -- Audit and Business Ethics
since November 1994; formerly President of
the Aircraft Engine Components Division of
the Parent, 1992 to November 1994; Vice
President Finance of the Textron Defense
Systems Division (formerly Avco Systems),
1984 to 1992.
------------------------------------------------------------------------------------------------
Richard F. Smith 56 Vice President -- Government Affairs since
July 1995; formerly Staff Vice
President -- Government Affairs, March 1995
to July 1995, Director, Government Relations,
1985 to March 1995.
------------------------------------------------------------------------------------------------
John Zugschwert 62 Vice President -- Government Marketing from
July 1995; formerly Staff Vice
President -- Government Marketing, January
1992 to July 1995; Vice President Government
Operations, Bell Helicopter Textron Inc.,
1991 to 1992; Executive Director, American
Helicopter Society, 1981 to 1991.
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF THE OFFEROR. Set forth below are
the name, age, present principal occupation or employment, five-year employment
history and business or residence address of each director and executive officer
of the Offeror. Unless otherwise indicated, each person identified below has
been employed by the Parent for the last five years, and each such person's
business address is 40 Westminster Street, Providence, RI 02903-2596. Each
director and officer of the Offeror was elected to such position in 1995. All
persons listed below are citizens of the United States.
<TABLE>
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------
Herbert L. Henkel 47 See Directors and Executive Officers of the
Parent. Mr. Henkel is President of the
Offeror.
------------------------------------------------------------------------------------------------
Richard A. McWhirter 61 See Directors and Executive Officers of the
Parent. Mr. McWhirter is Senior Vice
President and Corporate Secretary of the
Offeror.
</TABLE>
A-6
<PAGE> 36
<TABLE>
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------
Michael D. Cahn 49 Mr. Cahn has been Assistant General Counsel
and Assistant Secretary of the Parent since
1983. Mr. Cahn is Director, Vice President
and Assistant Secretary of the Offeror.
------------------------------------------------------------------------------------------------
Brian T. Downing 47 See Directors and Executive Officers of the
Parent. Mr. Downing is Vice President and
Treasurer of the Offeror.
------------------------------------------------------------------------------------------------
Arnold M. Friedman 52 See Directors and Executive Officers of the
Parent. Mr. Friedman is Director and Vice
President of the Offeror.
------------------------------------------------------------------------------------------------
Gregory E. Hudson 48 See Directors and Executive Officers of the
Parent. Mr. Hudson is Vice President -- Taxes
of the Offeror.
------------------------------------------------------------------------------------------------
Bhikhaji M. Maneckji 46 Mr. Maneckji has been Assistant General
Counsel and Assistant Secretary of the Parent
since 1986. Mr. Maneckji is Director, Vice
President and Assistant Secretary of the
Offeror. Mr. Maneckji is a director of
Bridgeport Machines, Inc.
</TABLE>
A-7
<PAGE> 37
Facsimile copies of the Letter of Transmittal will be accepted. The Letter
of Transmittal and certificates for Shares and any other required documents
should be sent or delivered by each stockholder of the Company or his broker,
dealer, commercial bank, trust company or other nominee to the Depositary at one
of the addresses set forth below:
The Depositary for the Offer is:
HARRIS TRUST COMPANY OF NEW YORK
------------------------
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
Wall Street Station 77 Water Street, 4th Floor Receive Window
P.O. Box 1010 New York, NY 10005 77 Water Street, 5th Floor
New York, NY 10268-1010 New York, NY 10005
by Facsimile Transmission:
(for Eligible Institutions
Only)
(212) 701-7636
Confirm by Telephone:
(212) 701-7663
</TABLE>
------------------------
Any questions or requests for assistance or additional copies of the Offer
to Purchase, the Letter of Transmittal and other tender offer materials may be
directed to the Information Agent or the Dealer Manager at their respective
telephone numbers and locations listed below. Stockholders may also contact
their broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll-Free: (800) 207-2014
The Dealer Manager for the Offer is:
DILLON, READ & CO. INC.
535 Madison Avenue
New York, New York 10022
(212) 906-7527 (Call Collect)
<PAGE> 1
Exhibit (a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
ELCO INDUSTRIES, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED SEPTEMBER 19, 1995
BY
E.I. TEXTRON INC.
A WHOLLY OWNED SUBSIDIARY OF
TEXTRON INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON TUESDAY, OCTOBER 17, 1995, UNLESS THE OFFER IS EXTENDED.
THE DEPOSITARY:
HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
Wall Street Station 77 Water Street, 4th Floor Receive Window
P.O. Box 1010 New York, NY 10005 77 Water Street, 5th Floor
New York, NY 10268-1010 New York, NY 10005
</TABLE>
By Facsimile Transmission:
(for Eligible Institutions Only)
(212) 701-7636
Confirm by Telephone:
(212) 701-7663
---------------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE, OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE
A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE
SPACE THEREFOR PROVIDED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH
BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders of Elco
Industries, Inc. if certificates are to be forwarded herewith or, unless an
Agent's Message (as defined in the Offer to Purchase) is utilized, if delivery
of Shares (as defined below) is to be made by book-entry transfer to the
Depositary's account at The Depository Trust Company, the Midwest Securities
Trust Company or the Philadelphia Depository Trust
<PAGE> 2
Company (hereinafter collectively referred to as the "Book-Entry Transfer
Facilities") pursuant to the procedures set forth in Section 3 of the Offer to
Purchase (as defined below).
Stockholders whose certificates for Shares are not immediately available or
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 comply with the book-entry transfer procedures on a timely basis, may
nevertheless tender their Shares pursuant to the guaranteed delivery procedure
set forth in Section 3 of the Offer to Purchase. See Instruction 2.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
-------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARES TENDERED
(PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL LIST IF NECESSARY)
-------------------------------------------------------------------------------------------------
TOTAL NUMBER
SHARE OF SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
<S> <C> <C> <C>
------------------------------------------------
------------------------------------------------
------------------------------------------------
------------------------------------------------
------------------------------------------------
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.
-------------------------------------------------------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
/ / 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
-----------------------------------------------
Account No. at
-----------------------------------------------------------------
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
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 Tendering Stockholder(s)
------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
---------------------------
Window Ticket Number (if any)
------------------------------------------------
Name of Institution which Guaranteed Delivery
--------------------------------
<PAGE> 3
If delivery is by book-entry transfer
--------------------------------------
Name of Tendering Institution
-----------------------------------------
Account No. at
-----------------------------------------------------------
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Transaction Code No.
--------------------------------------------------
<PAGE> 4
Ladies and Gentlemen:
The undersigned hereby tenders to E.I. Textron Inc. (the "Offeror"), a
Delaware corporation and a wholly owned subsidiary of Textron Inc., a Delaware
corporation (the "Parent"), the above-described shares of Common Stock, $5.00
par value per share (the "Shares"), of Elco Industries, Inc., a Delaware
corporation (the "Company"), including the associated Rights (as defined in the
Rights Agreement between the Company and The First National Bank of Chicago, as
Rights Agent, dated as of January 20, 1988, as amended June 24, 1988 and
September 12, 1995), pursuant to the Offeror's offer to purchase all of the
outstanding Shares at a purchase price of $36.00 per Share, net to the seller in
cash, without interest, upon the terms and subject to the conditions set forth
in the Offer to Purchase, dated September 19, 1995 (the "Offer to Purchase"),
receipt of which is hereby acknowledged, and in this Letter of Transmittal
(which together with the Offer to Purchase constitute the "Offer"). Unless the
context otherwise requires, all references to Shares herein shall include the
associated Rights. The Offer is being made in connection with the Agreement and
Plan of Merger, dated as of September 12, 1995, among the Parent, the Offeror
and the Company (the "Merger Agreement").
Subject to and effective upon acceptance for payment of and payment for the
Shares tendered herewith, the undersigned hereby sells, assigns and transfers to
or upon the order of the Offeror all right, title and interest in and to all the
Shares and the associated Rights that are being tendered hereby (and any and all
other Shares or other securities issued or issuable in respect thereof on or
after September 8, 1995) and appoints Harris Trust Company of New York (the
"Depositary") the true and lawful agent and attorney-in-fact of the undersigned
with respect to such Shares and the associated Rights (and all such other Shares
or securities), with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (a) deliver
certificates for such Shares (and all such other Shares or securities), or
transfer ownership of such Shares (and all such other Shares or securities) 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 Offeror, (b) present such Shares (and
all such other Shares or securities) for transfer on the books of the Company
and (c) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Shares (and all such other Shares or securities), all in
accordance with the terms of the Offer.
The undersigned hereby irrevocably appoints Arnold M. Friedman, Michael D.
Cahn and Bhikhaji M. Maneckji and each of them, the attorneys and proxies of the
undersigned, each with full power of substitution, to exercise all voting and
other rights of the undersigned in such manner as each such attorney and proxy
or his substitute shall in his sole judgment deem proper, with respect to all of
the Shares tendered hereby which have been accepted for payment by the Offeror
prior to the time of any vote or other action (and any and all other Shares or
other securities or rights issued or issuable in respect of such Shares or the
associated Rights on or after September 8, 1995), at any meeting of stockholders
of the Company (whether annual or special and whether or not an adjourned
meeting) or otherwise. This proxy is irrevocable and is granted in consideration
of, and is effective upon, the acceptance for payment of such Shares by the
Offeror in accordance with the terms of the Offer. Such acceptance for payment
shall revoke any other proxy or written consent granted by the undersigned at
any time with respect to such Shares or the associated Rights (and all such
other Shares or other securities or rights), and no subsequent proxies will be
given or written consents will be executed by the undersigned (and if given or
executed, will not be deemed effective).
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby (and any and all other Shares or other securities or rights
issued or issuable in respect of such Shares on or after September 8, 1995) and
that when the same are accepted for payment by the Offeror, the Offeror will
acquire good and unencumbered title thereto, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claims.
The undersigned will, upon request, execute and deliver any additional documents
deemed by the Depositary or the Offeror to be necessary or desirable to complete
the sale, assignment and transfer of the Shares tendered hereby (and all such
other Shares or other securities or rights).
<PAGE> 5
All authority herein conferred or agreed to be conferred 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 stated in the Offer, this tender is
irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute an agreement between the undersigned and the
Offeror upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the purchase price of any Shares purchased, and 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 return 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 return any Shares not tendered or not purchased in the
name(s) of, and mail said check and any certificates to, the person(s) so
indicated. The undersigned recognizes that the Offeror has no obligation,
pursuant to the "Special Payment Instructions," to transfer any Shares from the
name of the registered holder(s) thereof if the Offeror does not accept for
payment any of the Shares so tendered.
<PAGE> 6
SPECIAL PAYMENT
INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased or certificates for Shares not tendered or not purchased are to be
issued in the name of someone other than the undersigned, or if Shares tendered
by book-entry transfer that are not purchased are to be returned by credit to an
account at one of the Book-Entry Transfer Facilities other than that designated
above.
Issue check and/or certificates to:
Name
--------------------------------------------------------------------------
(Please Print)
Address
-----------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(Zip Code)
-------------------------------------------------------------------------------
(Taxpayer Identification No.)
(See Substitute Form W-9)
/ / Credit unpurchased Shares tendered by book-entry transfer to the account set
forth below:
Name of Account Party
---------------------------------------------------------
Account No. at
-----------------------------------------------------------------
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
SPECIAL DELIVERY
INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased or certificates for Shares not tendered or not purchased are to be
mailed to someone other than the undersigned or to the undersigned at an address
other than that shown below the undersigned's signature(s).
Mail check and/or certificates to:
Name
-------------------------------------------------------------------------
Address
----------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Zip Code)
------------------------------------------------------------------------------
(Taxpayer Identification No.)
<PAGE> 7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, signatures
on all Letters of Transmittal must be guaranteed by a member in good standing of
the Securities Transfer Agents Medallion Program or by any other bank, broker,
dealer, credit union, savings association or other entity which is an "eligible
guarantor institution," as such term is defined in Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended (each of the foregoing being
referred to as an "Eligible Institution" and, collectively, as "Eligible
Institutions"), unless the Shares tendered thereby are tendered (i) by a
registered holder of Shares who has not completed either the box labeled
"Special Payment Instructions" or the box labeled "Special Delivery
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution. See Instruction 5. If the certificates are registered in
the name of a person or persons other than the signer of this Letter of
Transmittal, or if payment is to be made or delivered to, or certificates
evidencing unpurchased Shares are to be issued or returned to, a person other
than the registered owner or owners, then the tendered certificates must be
endorsed or accompanied by duly executed stock powers, in either case signed
exactly as the name or names of the registered owner or owners appear on the
certificates or stock powers, with the signatures on the certificates or stock
powers guaranteed by an Eligible Institution as provided herein. See Instruction
5.
2. Delivery of Letter of Transmittal and Shares. This Letter of Transmittal
is to be used either if certificates are to be forwarded herewith or, unless an
Agent's Message (as defined in the Offer to Purchase) is utilized, if the
delivery of Shares is to be made by book-entry transfer pursuant to the
procedures set forth in Section 3 of the Offer to Purchase. Certificates for all
physically delivered Shares, or a confirmation of a book-entry transfer into the
Depositary's account at one of the Book-Entry Transfer Facilities of all Shares
delivered electronically, as well as a properly completed and duly executed
Letter of Transmittal (or a manually signed facsimile thereof) and any other
documents required by this Letter of Transmittal, or an Agent's Message in the
case of a book entry delivery, must be received by the Depositary at one of its
addresses set forth on the front page of this Letter of Transmittal by 12:00
Midnight, New York City time, on Tuesday, October 17, 1995, unless the Offeror
shall have extended the period of time for which the Offer is open pursuant to
the terms of the Offer to Purchase and the Merger Agreement. Stockholders who
cannot deliver their Shares and all other required documents to the Depositary
by the Expiration Date must tender their Shares pursuant to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase. Pursuant to
such procedures: (a) such tender must be made by or through an Eligible
Institution; (b) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Offeror, must be received by
the Depositary prior to the Expiration Date; and (c) the certificates for all
tendered Shares, in proper form for tender, or a confirmation of a book-entry
transfer into the Depositary's account at one of the Book-Entry Transfer
Facilities of all Shares delivered electronically, as well as a properly
completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof), and any other documents required by this Letter of
Transmittal, must be received by the Depositary within three trading days after
the date of execution of such Notice of Guaranteed Delivery, all as provided in
Section 3 of the Offer to Purchase. A "trading day" is any day on which the
National Association of Securities Dealers Automated Quotation National Market
is open for business.
The method of delivery of Shares, the Letter of Transmittal and all other
required documents, including delivery through a Book-Entry Transfer Facility,
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.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. By executing this Letter of Transmittal (or
a manually signed 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
schedule attached hereto.
<PAGE> 8
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 which 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 appropriate box 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. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificates without alteration, enlargement or any change
whatsoever.
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.
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.
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, or Shares not
tendered or not purchased are to be returned, 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.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the certificate 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.
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 Offeror of the authority of such person so to act must be submitted.
6. Stock Transfer Taxes. The Offeror will pay 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 returned in the name of, any
person other than the registered holder(s), then 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.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificates listed in this Letter of
Transmittal.
7. Special Payment and Delivery Instruction. If the check for the purchase
price of any Shares purchased is to be issued, or any Shares not tendered or not
purchased are to be returned, in the name of a person other than the person(s)
signing this Letter of Transmittal or if the check 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 the person(s) signing this
Letter of Transmittal at an address other than that shown above, the appropriate
boxes on this Letter of Transmittal should be completed. Stockholders tendering
Shares by book-entry transfer may request that Shares not purchased be credited
to such account at any of the Book-Entry Transfer Facilities as such stockholder
may designate under "Special Payment Instructions." If no such instructions are
given, any such Shares not purchased will be returned by crediting the account
at the Book-Entry Transfer Facilities designated above.
<PAGE> 9
8. Substitute Form W-9. The tendering stockholder is required to provide
the Depositary with such stockholder's correct TIN on Substitute Form W-9, which
is provided above, unless an exemption applies. Failure to provide the
information on the Substitute Form W-9 may subject the tendering stockholder to
a $50 penalty and to 31% federal income tax backup withholding on the payment of
the purchase price for the Shares.
9. Requests for Assistance or Additional Copies. Requests for assistance or
additional copies of the Offer to Purchase and this Letter of Transmittal may be
obtained from the Information Agent or the Dealer Manager at their respective
addresses or telephone numbers set forth below.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE COPY
HEREOF (TOGETHER WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND
ALL OTHER REQUIRED DOCUMENTS) OR NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED
BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO
PURCHASE).
IMPORTANT TAX INFORMATION
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 the Substitute Form W-9. If such stockholder is an
individual, the TIN is such stockholder's social security number. If the
Depositary is not provided with the correct TIN, the stockholder may be subject
to a $50 penalty imposed by the Internal Revenue Service. 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) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that stockholder must submit a statement, signed under penalties of
perjury, attesting to that individual's exempt status. Such statements may be
obtained from the Depositary. All exempt recipients (including foreign persons
wishing to qualify as exempt recipients) should 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. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If backup withholding results in an
overpayment of taxes, a refund may be obtained.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding on payments that are made
to a stockholder with respect to Shares purchased pursuant to the Offer, the
stockholder is required to notify the Depositary of his or her correct TIN by
completing the form certifying that the TIN provided on the Substitute Form W-9
is correct.
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 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.
<PAGE> 10
SIGN HERE
(Complete Substitute Form W-9 below)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Signature(s) of Owner(s)
--------------------------------------------------------------------------------
Name(s)
--------------------------------------------------------------------------------
Capacity (full title)
----------------------------------------------------------
Address
------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Include Zip Code)
--------------------------------------------------------------------------------
Area Code and Telephone Number
-------------------------------------------------
Taxpayer Identification Number
-------------------------------------------------
Dated: , 1995
-------------------------------------------------------------------
(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 the 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, agent, officer of a corporation or other person
acting in a fiduciary or representative capacity, please set forth full title
and see Instruction 5).
GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION
GUARANTEE IN SPACE BELOW.
Authorized Signature(s)
--------------------------------------------------------
Name
---------------------------------------------------------------------------
Name of Firm
-------------------------------------------------------------------
Address
------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number
-------------------------------------------------
Dated: ,1995
--------------------------------------------------------------------
<PAGE> 11
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
PAYOR'S NAME: HARRIS TRUST COMPANY OF NEW YORK
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PART 1--PLEASE PROVIDE YOUR TIN IN THE PART III--Social Security Number or
SUBSTITUTE BOX AT THE RIGHT AND CERTIFY BY SIGNING Employer Identification Number)
FORM W-9 AND DATING BELOW. ------------------------------------
(If awaiting TIN write "Applied For")
---------------------------------------------------------------------------------
PART II--For Payees exempt from backup withholding, see the enclosed Guidelines
for Certification of Taxpayer Identification Number on Payor's Request for
DEPARTMENT OF THE TREASURY Substitute Form W-9 and complete as instructed therein.
INTERNAL REVENUE SERVICE
Certification--Under penalties of perjury, I certify that:
PAYOR'S REQUEST FOR
TAXPAYER IDENTIFICATION (1) The number shown on this form is my correct TIN (or I am waiting for a
NUMBER (TIN) number to be issued to me); and
(2) I am not subject to backup withholding either because I have not been
notified by the Internal Revenue Service (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.
CERTIFICATION INSTRUCTIONS--You must cross out Item (2) above if you have been
notified by the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return. However, if after
being notified by the IRS that you were subject to backup withholding, you
received another notification from the IRS that you were no longer subject to
backup withholding, do not cross out item (2). (Also see instructions in the
enclosed Guidelines).
------------------------------------------------------------------------------
Signature: Date:
------------------------------------------ ----------------
------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING YOUR TIN.
-------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a TIN has not been issued to me,
and either (1) I have mailed or delivered an application to receive a TIN to the
appropriate IRS 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 TIN by the time of payment, 31% of all payments pursuant to the
Offer made to me thereafter will be withheld until I provide a number.
Signature: Date:
------------------------------------- -------------------------
--------------------------------------------------------------------------------
<PAGE> 12
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll-Free: (800) 207-2014
The Dealer Manager for the Offer is:
DILLON, READ & CO. INC.
535 Madison Avenue
New York, New York 10022
(212) 906-7527 (Call Collect)
September 19, 1995
<PAGE> 1
Exhibit (a)(3)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
ELCO INDUSTRIES, INC.
AT
$36.00 NET PER SHARE
BY
E.I. TEXTRON INC.
A WHOLLY OWNED SUBSIDIARY OF
TEXTRON INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON TUESDAY, OCTOBER 17, 1995, UNLESS THE OFFER IS EXTENDED.
To Brokers, Dealers, Commercial Banks, September 19, 1995
Trust Companies and Other Nominees:
We have been appointed by E.I. Textron Inc., a Delaware corporation (the
"Offeror") and a wholly owned subsidiary of Textron Inc., a Delaware corporation
(the "Parent"), to act as Dealer Manager in connection with the Offeror's offer
to purchase all outstanding shares of common stock, $5.00 par value per share
(the "Shares"), of Elco Industries, Inc., a Delaware corporation (the
"Company"), including the associated Rights (as defined in the Rights Agreement
between the Company and The First National Bank of Chicago, as Rights Agent,
dated as of January 20, 1988, as amended June 24, 1988 and September 12, 1995),
at a purchase price of $36.00 per Share, net to the seller in cash, without
interest, upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated September 19, 1995 (the "Offer to Purchase"), and in the related
Letter of Transmittal (which together constitute the "Offer") enclosed herewith.
Unless the context otherwise requires, all references to Shares herein shall
include the associated Rights. The Offer is being made in connection with the
Agreement and Plan of Merger, dated as of September 12, 1995, among the Parent,
the Offeror and the Company (the "Merger Agreement"). Holders of Shares whose
certificates for such Shares (the "Certificates") are not immediately available
or who cannot deliver their Certificates and all other required documents to the
Depositary or complete the procedures for book-entry transfer prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase) must tender
their Shares according to the guaranteed delivery procedures set forth in
Section 3 of the Offer to Purchase.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares in your name or in the name of your nominee.
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase, dated September 19, 1995.
1
<PAGE> 2
2. The Letter of Transmittal to tender Shares for your use and for the
information of your clients. Facsimile copies of the Letter of Transmittal
(with manual signatures) may be used to tender Shares.
3. A letter to stockholders of the Company from John C. Lutz, the
President and Chief Executive Officer of the Company, together with a
Solicitation/Recommendation Statement on Schedule 14D-9 filed with the
Securities and Exchange Commission by the Company and mailed to the
stockholders of the Company.
4. The Notice of Guaranteed Delivery for Shares to be used to accept
the Offer if neither of the two procedures for tendering Shares set forth
in the Offer to Purchase can be completed on a timely basis.
5. A printed form of letter which may be sent to your clients for
whose accounts you hold Shares registered in your name, with space provided
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.
7. A return envelope addressed to the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, OCTOBER 17, 1995,
UNLESS THE OFFER IS EXTENDED.
Please note the following:
1. The tender price is $36.00 per Share, net to the seller in cash
without interest.
2. The Offer is being made for all of the outstanding Shares.
3. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Tuesday, October 17, 1995, unless the Offer is extended.
4. The Offer is conditioned upon, among other things, there having
been validly tendered and not withdrawn prior to the expiration of the
Offer that number of Shares representing at least 66 2/3% of all
outstanding Shares on a fully diluted basis on the date of purchase (the
"Minimum Condition"). The Offer is also subject to the other terms and
conditions contained in the Offer. The Offeror reserves the right (but
shall not be obligated), in accordance with applicable rules and
regulations of the Securities and Exchange Commission, to reduce the
Minimum Condition (but not below 50.01% of the outstanding Shares on a
fully diluted basis) or to waive any other conditions to the Offer.
5. Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the transfer of Shares pursuant to the
Offer.
In order to take advantage of the Offer, (i) a duly executed and properly
completed Letter of Transmittal (or a manually signed facsimile thereof) and any
required signature guarantees or, in the case of a book-entry transfer, an
Agent's Message (as defined in the Offer to Purchase) or other required
documents should be sent to the Depositary and (ii) Certificates representing
the tendered Shares or a timely Book-Entry Confirmation (as defined in the Offer
to Purchase) should be delivered to the Depositary in accordance with the
instructions set forth in the Offer.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Certificates or other required documents or complete the
procedures for book-entry transfer prior to the Expiration Date, a tender may be
effected by following the guaranteed delivery procedures specified in Section 3
of the Offer to Purchase.
Neither the Offeror, the Parent nor any officer, director, stockholder,
agent or other representative of the Offeror will pay any fees or commissions to
any broker, dealer or other person (other than the Dealer
2
<PAGE> 3
Manager, the Depositary and the Information Agent as described in the Offer to
Purchase) for soliciting tenders of Shares pursuant to the Offer. The Offeror
will, however, upon request, reimburse you for customary mailing and handling
expenses incurred by you in forwarding any of the enclosed materials to your
clients. The Offeror will pay or cause to be paid any transfer taxes payable on
the transfer of Shares to it, except as otherwise provided in Instruction 6 of
the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to
D.F. King & Co., Inc., the Information Agent for the Offer, 77 Water Street, New
York, New York 10005, (800) 207-2014 or Dillon, Read & Co. Inc., the Dealer
Manager for the Offer, at 535 Madison Avenue, New York, New York 10022, (212)
960-7527.
Requests for copies of the enclosed materials may be directed to the
Information Agent at the above address and telephone number.
Very truly yours,
DILLON, READ & CO. INC.
535 Madison Avenue
New York, NY 10022
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE PARENT, THE OFFEROR, THE DEPOSITARY, THE
INFORMATION AGENT, THE DEALER MANAGER OR ANY AFFILIATE OF ANY OF THEM, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED
DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE> 1
Exhibit (a)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
ELCO INDUSTRIES, INC.
AT
$36.00 NET PER SHARE
BY
E.I. TEXTRON INC.
A WHOLLY OWNED SUBSIDIARY OF
TEXTRON INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON TUESDAY, OCTOBER 17, 1995, UNLESS THE OFFER IS EXTENDED.
To Our Clients: September 19, 1995
Enclosed for your consideration are the Offer to Purchase, dated September
19, 1995 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") relating to an offer by E.I. Textron Inc., a
Delaware corporation (the "Offeror") and a wholly-owned subsidiary of Textron
Inc., a Delaware corporation (the "Parent"), to purchase all outstanding shares
of common stock, par value $5.00 per share (the "Shares") of Elco Industries,
Inc., a Delaware corporation (the "Company"), including the associated Rights
(as defined in the Rights Agreement between the Company and The First National
Bank of Chicago, as Rights Agent, dated as of January 20, 1988, as amended June
24, 1988 and September 12, 1995), at a purchase price of $36.00 per Share, net
to the seller in cash, without interest, upon the terms and subject to the
conditions set forth in the Offer. Unless the context otherwise requires, all
references to Shares herein shall include the associated Rights. The Offer is
being made in connection with the Agreement and Plan of Merger, dated as of
September 12, 1995, among the Parent, the Offeror and the Company (the "Merger
Agreement"). This material is being forwarded to you as the beneficial owner of
Shares carried by us in your account but not registered in your name.
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.
Accordingly, we request instructions as to whether you wish to tender any
or all of the Shares held by us for your account, upon the terms and conditions
set forth in the Offer.
Please note the following:
1. The tender price is $36.00 per Share, net to you in cash without
interest.
2. The Offer is being made for all of the outstanding Shares.
3. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Tuesday, October 17, 1995, unless the Offer is extended.
1
<PAGE> 2
4. The Offer is conditioned upon, among other things, there having
been validly tendered and not withdrawn prior to the expiration of the
Offer that number of Shares representing 66 2/3% of all outstanding Shares
on a fully diluted basis on the date of purchase (the "Minimum Condition").
The Offer is also subject to the other terms and conditions contained in
the Offer. The Offeror reserves the right (but shall not be obligated), in
accordance with applicable rules and regulations of the Securities and
Exchange Commission, to reduce the Minimum Condition (but not below 50.01%
of the outstanding Shares on a fully diluted basis) or to waive any other
conditions to the Offer.
5. Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the transfer of Shares pursuant to the
Offer.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing, detaching and returning to us the instruction form
contained in this letter. An envelope to return your instruction to us is
enclosed. If you authorize tender of your Shares, all such Shares will be
tendered unless otherwise indicated in such instruction form. PLEASE FORWARD
YOUR INSTRUCTIONS TO US AS SOON AS POSSIBLE TO ALLOW US AMPLE TIME TO TENDER
YOUR SHARES ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and any supplements or amendments thereto. The Offer is not being
made to, nor will tenders be accepted from or on behalf of, holders of Shares
residing in any jurisdiction in which the making of the Offer or acceptance
thereof would not be in compliance with the securities laws of such
jurisdiction. In any jurisdiction where the securities, blue sky, or other laws
require the Offer to be made by a licensed broker or dealer, the Offer will be
deemed to be made on behalf of the Offeror by Dillon, Read & Co. Inc. or one or
more registered brokers or dealers licensed under the laws of such jurisdiction.
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO
THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
ELCO INDUSTRIES, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated September 19, 1995 (the "Offer to Purchase"), and the
related Letter of Transmittal (which together constitute the "Offer") in
connection with the offer by E.I. Textron Inc., a Delaware corporation (the
"Offeror") and a wholly owned subsidiary of Textron Inc., a Delaware
corporation, to purchase all outstanding shares of common stock, par value $5.00
per share (the "Shares"), of Elco Industries, Inc., a Delaware corporation,
including the associated Rights (as defined in the Rights Agreement between the
Company and The First National Bank of Chicago, as Rights Agent, dated as of
January 20, 1988, as amended June 24, 1988 and September 12, 1995). Unless the
context otherwise requires, all references to Shares herein shall include the
associated Rights.
This will instruct you to tender to the Offeror 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, upon the terms and subject to the
conditions set forth in the Offer.
<TABLE>
<S> <C>
Number of Shares to be Tendered:*______, SIGN HERE
---------------------------------------------
---------------------------------------------
Signature(s)
---------------------------------------------
---------------------------------------------
(Print Name(s))
---------------------------------------------
(Area Code and Telephone Number(s))
---------------------------------------------
(Taxpayer Identification or
Social Security Number(s))
</TABLE>
---------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
3
<PAGE> 1
Exhibit (a)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
ELCO INDUSTRIES, INC.
AT
$36.00 NET PER SHARE
BY
E.I. TEXTRON INC.
A WHOLLY OWNED SUBSIDIARY OF
TEXTRON INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON TUESDAY, OCTOBER 17, 1995, UNLESS THE OFFER IS EXTENDED.
September 19, 1995
To Participants in the Employee Stock
Ownership Plan of Elco Industries, Inc.:
Enclosed for your consideration are the Offer to Purchase, dated September
19, 1995 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer"), relating to an offer by E.I. Textron Inc., a
Delaware corporation (the "Offeror") and a wholly owned subsidiary of Textron
Inc., a Delaware corporation (the "Parent"), to purchase all outstanding shares
of common stock, par value $5.00 per share (the "Shares") of Elco Industries,
Inc., a Delaware corporation (the "Company"), including the associated Rights
(as defined in the Rights Agreement between the Company and The First National
Bank of Chicago, as Rights Agent, dated as of January 20, 1988, as amended June
24, 1988 and September 12, 1995), at a purchase price of $36.00 per Share, net
to the seller in cash, without interest, upon the terms and subject to the
conditions set forth in the Offer. The Offer is being made in connection with
the Agreement and Plan of Merger, dated as of September 12, 1995, among the
Parent, the Offeror and the Company (the "Merger Agreement"). Unless the context
otherwise requires, all references to Shares herein shall include the associated
Rights.
WE ARE THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT AS A
PARTICIPANT IN THE COMPANY'S EMPLOYEE STOCK OWNERSHIP PLAN (THE "PLAN"). A
TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD IN
ACCORDANCE WITH THE TERMS OF THE PLAN, TO THE EXTENT CONSISTENT WITH APPLICABLE
LAWS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY
AND CANNOT BE USED BY YOU TO TENDER SHARES HELD IN YOUR PLAN ACCOUNT.
Accordingly, we request information as to whether you wish to have us
tender any or all of the Shares held in your Plan account, upon the terms and
conditions set forth in the Offer.
1
<PAGE> 2
Please note the following:
1. The tender price is $36.00 per Share, net to the seller in cash
without interest.
2. The Offer is being made for all of the outstanding Shares.
3. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Tuesday, October 17, 1995, unless the Offer is extended.
4. The Offer is conditioned upon, among other things, there having
been validly tendered and not withdrawn prior to the expiration of the
Offer that number of Shares representing at least a 66 2/3% of all
outstanding Shares on a fully diluted basis on the date of purchase (the
"Minimum Condition"). The Offer is also subject to the other terms and
conditions contained in the Offer. The Offeror reserves the right (but
shall not be obligated), in accordance with applicable rules and
regulations of the Securities and Exchange Commission, to reduce the
Minimum Condition (but not below 50.01% of the outstanding Shares on a
fully diluted basis) or to waive any other conditions to the Offer.
5. Shares in Plan accounts as to which we have not received
instructions from Participants and Shares which are not allocated to
Participants' accounts will be tendered or will not be tendered in the
Offer in accordance with the terms of the Plan, to the extent consistent
with applicable laws.
If you wish to have us tender any or all of the Shares held in your Plan
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form contained in this letter. An envelope to return your
instruction to us is enclosed. If you authorize tender of your Shares, all such
Shares will be tendered unless otherwise indicated in such instruction form.
PLEASE FORWARD YOUR INSTRUCTIONS TO US SO THAT THEY ARE RECEIVED BY US NO LATER
THAN 5:00 P.M., NEW YORK TIME, ON OCTOBER 13, 1995, TO ALLOW US AMPLE TIME TO
TENDER YOUR SHARES ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and any supplements or amendments thereto. The Offer is not being
made to, nor will tenders be accepted from or on behalf of, holders of Shares
residing in any jurisdiction in which the making of the Offer or acceptance
thereof would not be in compliance with the securities laws of such
jurisdiction. In any jurisdiction where the securities, blue sky, or other laws
require the Offer to be made by a licensed broker or dealer, the Offer will be
deemed to be made on behalf of the Offeror by Dillon, Read & Co. Inc. or one or
more registered brokers or dealers licensed under the laws of such jurisdiction.
Very truly yours,
AMCORE Trust Company,
as Trustee
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO
THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
ELCO INDUSTRIES, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated September 19, 1995 (the "Offer to Purchase"), and the
related Letter of Transmittal (which together constitute the "Offer") in
connection with the offer by E.I. Textron Inc., a Delaware corporation (the
"Offeror") and a wholly owned subsidiary of Textron Inc., a Delaware
corporation, to purchase all outstanding shares of common stock, par value $5.00
per share (the "Shares"), of Elco Industries, Inc., a Delaware corporation,
including the associated Rights (as defined in the Rights Agreement between the
Company and The First National Bank of Chicago, as Rights Agent, dated as of
January 20, 1988, as amended June 24, 1988 and September 12, 1995). Unless the
context otherwise requires, all references to Shares herein shall include the
associated Rights.
This will instruct you to tender to the Offeror 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, upon the terms and subject to the
conditions set forth in the Offer.
NOTE: SHARES IN PLAN ACCOUNTS AS TO WHICH WE HAVE NOT RECEIVED INSTRUCTIONS FROM
PARTICIPANTS AND SHARES WHICH ARE NOT ALLOCATED TO PARTICIPANTS' ACCOUNTS WILL
BE TENDERED OR WILL NOT BE TENDERED IN THE OFFER IN ACCORDANCE WITH THE TERMS OF
THE PLAN, TO THE EXTENT CONSISTENT WITH APPLICABLE LAWS.
<TABLE>
<C> <S>
Number of Shares to be Tendered:* SIGN HERE
---------------------------------------------
---------------------------------------------
Signature(s)
---------------------------------------------
---------------------------------------------
(Print Name(s))
---------------------------------------------
(Area Code and Telephone Number(s))
---------------------------------------------
(Taxpayer Identification or
Social Security Number(s))
</TABLE>
---------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
3
<PAGE> 1
Exhibit (a)(6)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
ELCO INDUSTRIES, INC.
AT
$36.00 NET PER SHARE
BY
E.I. TEXTRON INC.
A WHOLLY OWNED SUBSIDIARY OF
TEXTRON INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON TUESDAY, OCTOBER 17, 1995, UNLESS THE OFFER IS EXTENDED.
September 19, 1995
To Participants in the Elco Shareholder Investment Service:
Enclosed for your consideration are the Offer to Purchase, dated September
19, 1995 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer"), relating to an offer by E.I. Textron Inc., a
Delaware corporation (the "Offeror") and a wholly owned subsidiary of Textron
Inc., a Delaware corporation (the "Parent"), to purchase all outstanding shares
of common stock, par value $5.00 per share (the "Shares") of Elco Industries,
Inc., a Delaware corporation (the "Company"), including the associated Rights
(as defined in the Rights Agreement between the Company and The First National
Bank of Chicago, as Rights Agent, dated as of January 20, 1988, as amended June
24, 1988 and September 12, 1995), at a purchase price of $36.00 per Share, net
to the seller in cash, without interest, upon the terms and subject to the
conditions set forth in the Offer. The Offer is being made in connection with
the Agreement and Plan of Merger, dated as of September 12, 1995, among the
Parent, the Offeror and the Company (the "Merger Agreement"). Unless the context
otherwise requires, all references to Shares herein shall include the associated
Rights.
OUR NOMINEE IS THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT AS A
PARTICIPANT IN THE COMPANY'S SHAREHOLDER INVESTMENT SERVICE (THE "PLAN"). A
TENDER OF SUCH SHARES CAN BE MADE ONLY BY US THROUGH OUR NOMINEE 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 IN YOUR PLAN ACCOUNT.
Accordingly, we request information as to whether you wish to have us
instruct our nominee to tender any or all of the Shares held in your Plan
account, upon the terms and conditions set forth in the Offer.
Please note the following:
1. The tender price is $36.00 per Share, net to the seller in cash
without interest.
1
<PAGE> 2
2. The Offer is being made for all of the outstanding Shares.
3. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Tuesday, October 17, 1995, unless the Offer is extended.
4. The Offer is conditioned upon, among other things, there have been
validly tendered and not withdrawn prior to the expiration of the Offer
that a number of Shares representing at least 66 2/3% of all outstanding
Shares on a fully diluted basis on the date of purchase (the "Minimum
Condition"). The Offer is also subject to the other terms and conditions
contained in the Offer. The Offeror reserves the right (but shall not be
obligated), in accordance with applicable rules and regulations of the
Securities and Exchange Commission, to reduce the Minimum Condition (but
not below 50.01% of the outstanding Shares on a fully diluted basis) or to
waive any other conditions to the Offer.
If you wish to have us tender any or all of the Shares held in your Plan
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form contained in this letter. An envelope to return your
instruction to us is enclosed. If you authorize tender of your Shares, all such
Shares will be tendered unless otherwise indicated in such instruction form.
PLEASE FORWARD YOUR INSTRUCTIONS TO US NO LATER THAN 5:00 P.M., NEW YORK CITY
TIME, ON OCTOBER 13, 1995, TO ALLOW US AMPLE TIME TO TENDER YOUR SHARES ON YOUR
BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and any supplements or amendments thereto. The Offer is not being
made to, nor will tenders be accepted from or on behalf of, holders of Shares
residing in any jurisdiction in which the making of the Offer or acceptance
thereof would not be in compliance with the securities laws of such
jurisdiction. In any jurisdiction where the securities, blue sky, or other laws
require the Offer to be made by a licensed broker or dealer, the Offer will be
deemed to be made on behalf of the Offeror by Dillon, Read & Co. Inc. or one or
more registered brokers or dealers licensed under the laws of such jurisdiction.
Very truly yours,
Harris Trust and Savings Bank, as
Dividend Reinvestment Agent
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO
THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
ELCO INDUSTRIES, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated September 19, 1995 (the "Offer to Purchase"), and the
related Letter of Transmittal (which together constitute the "Offer") in
connection with the offer by E.I. Textron Inc., a Delaware corporation (the
"Offeror") and a wholly owned subsidiary of Textron Inc., a Delaware
corporation, to purchase all outstanding shares of common stock, par value $5.00
per share (the "Shares"), of Elco Industries, Inc., a Delaware corporation,
including the associated Rights (as defined in the Rights Agreement between the
Company and The First National Bank of Chicago, as Rights Agent, dated as of
January 20, 1988, as amended June 24, 1988 and September 12, 1995). Unless the
context otherwise requires, all references to Shares herein shall include the
associated Rights.
This will instruct you to tender to the Offeror 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, upon the terms and subject to the
conditions set forth in the Offer.
<TABLE>
<S> <C>
Number of Shares to be Tendered:*______, SIGN HERE
---------------------------------------------
---------------------------------------------
Signature(s)
---------------------------------------------
---------------------------------------------
(Print Name(s))
---------------------------------------------
(Area Code and Telephone Number(s))
---------------------------------------------
(Taxpayer Identification or
Social Security Number(s))
</TABLE>
---------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
3
<PAGE> 1
Exhibit (a)(7)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
ELCO INDUSTRIES, INC.
This form, or one substantially equivalent hereto, must be used to accept
the Offer (as defined below) if certificates for shares of Common Stock, $5.00
par value per share (the "Shares"), of Elco Industries, Inc., a Delaware
corporation (the "Company"), including the associated Rights (as defined in the
Rights Agreement between the Company and The First National Bank of Chicago, as
Rights Agent, dated as of January 20, 1988, as amended June 24, 1988 and
September 12, 1995), are not immediately available or if the procedure for
book-entry transfer cannot be completed on a timely basis or time will not
permit all required documents to reach the Depositary on or prior to the
Expiration Date (as defined in the Offer to Purchase). Such form may be
delivered by hand or facsimile transmission, or mail, to the Depositary. See
Section 3 of the Offer to Purchase, dated September 19, 1995 (the "Offer to
Purchase"). Unless the context otherwise requires, all references to Shares
herein shall include the associated Rights.
THE DEPOSITARY FOR THE OFFER IS:
HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
77 Water Street, 4th Floor
Wall Street Station New York, NY 10005 Receive Window
P.O. Box 1010 77 Water Street, 5th Floor
New York, NY 10268-1010 New York, NY 10005
</TABLE>
By Facsimile Transmission:
(for Eligible Institutions Only)
(212) 701-7636
Confirm by Telephone:
(212) 701-7663
---------------------
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR
TRANSMISSION OF INSTRUMENTS VIA A FACSIMILE, OTHER THAN AS SET FORTH ABOVE, DOES
NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal or an
Agent's Message (as defined in the Offer to Purchase) and certificates for
Shares to the Depositary within the time period shown herein. Failure to do so
could result in a financial loss to such Eligible Institution.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
1
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to E.I. Textron Inc., a Delaware
corporation, upon the terms and subject to the conditions set forth in the Offer
to Purchase, and the related Letter of Transmittal, receipt of which is hereby
acknowledged, Shares of the Company, pursuant to the guaranteed delivery
procedure set forth in Section 3 of the Offer to Purchase.
Number of Shares: -------------------------------------------------------------
Certificate No(s). (if available): --------------------------------------------
If Securities will be tendered
by book-entry transfer: -------------------------------------------------------
Name of Tendering Institutions
-------------------------------------------------------------------------------
Account No.: ----------------------------------------------------------------at
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
SIGN HERE
Name(s): ---------------------------------------------------------------------
------------------------------------------------------------------------------
(Please Print)
Address: ---------------------------------------------------------------------
------------------------------------------------------------------------------
(Zip Code)
Area Code and Telephone No.:
------------------------------------------------------------------------------
Signature(s): ----------------------------------------------------------------
------------------------------------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member in good standing of the Securities Transfer
Agents Medallion Program or a bank, broker, dealer, credit union, savings
association or other entity which is an "eligible guarantor institution," as
such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934,
as amended, guarantees the delivery to the Depositary of the Shares tendered
hereby, together with a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile(s) thereof) and any other required
documents, or an Agent's Message (as defined in the Offer to Purchase) in the
case of a book-entry delivery of Shares, all within three trading days of the
date hereof. A "trading day" is any day on which the National Association of
Securities Dealers Automated Quotation National Market is open for business.
Name of Firm: ----------------------------------------------------------------
------------------------------------------------------------------------------
(Authorized Signature)
Address: ---------------------------------------------------------------------
Title: -----------------------------------------------------------------------
Name: ------------------------------------------------------------------------
(Please Print or Type)
Area Code and Telephone No.: -------------------------------------------------
DO NOT SEND CERTIFICATES FOR SHARES AND/OR RIGHTS WITH THIS FORM -- CERTIFICATES
SHOULD BE SENT WITH THE LETTER OF TRANSMITTAL
Dated: , 1995
2
<PAGE> 1
Exhibit (a)(8)
--------------------------------------------------------------------------------
GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER
ON SUBSTITUTE FORM W-9
IRS INSTRUCTIONS
(SECTION REFERENCES ARE TO THE INTERNAL REVENUE CODE.)
Purpose of Form. - A person who is required to file an information return with
the Internal Revenue Service (the IRS) must obtain your correct taxpayer
identification number (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 individual retirement account
(IRA). Use Form W-9 to furnish your correct TIN to the requester (the person
asking you to furnish your TIN), and, when applicable, (1) 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 (SSN) (for
individuals), from your local office of the Social Security Administration, or
FORM SS-4, Application for Employer Identification Number (EIN) (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 1, sign and date the form, and give it to the
requester. Generally, you will then have 60 days to obtain a TIN and furnish it
to the requester. If the requester does not receive your TIN within 60 days,
backup withholding, if applicable, will begin and continue until you furnish
your TIN to the requester. For reportable interest or dividend payments, the
payer must exercise one of the following options concerning backup withholding
during this 60-day period. Under option (1), a payer must backup withhold on any
withdrawals you make from your account after 7 business days after the requester
receives this form back from you. Under option (2), the payer must backup
withhold on any reportable interest or dividend payments made to your account,
regardless of whether you make any withdrawals. The backup withholding under
option (2) must begin no later than 7 business days after the requester receives
this form back. Under option (2), the payer is required to refund the amounts
withheld if your certified TIN is received within the 60-day period and you were
not subject to backup withholding during the period.
Note: WRITING "APPLIED FOR" 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 this 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 compensaton, 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 fail to 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 fail to 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, on page 2, 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 (1) through (7), except that a corporaton 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.
(1) 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 U.S. or
a possession of the U.S.
(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 Corporation 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 also include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in trade or business in the U.S. 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, 6041(a), 6042, 6044, 6045,
6049, 6050A, and 6050N, and their regulations.
Page 1
<PAGE> 2
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 requestor discloses or uses TINs in violation of
federal law, the requestor may be subject to civil and criminal penalties.
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, sign and
date the form. If you are a nonresident alien or foreign entity not subject to
backup withholding, give the requester a completed FORM W-8. Certificate of
Foreign Status.
(7) TIN "Applied For". - Follow the instructions under HOW TO OBTAIN A TIN, on
page 1, check the box in Part II of the Substitute Form W-9 and sign and date
the form.
Signature. - For a joint account, only the person whose TIN is shown in Part I
should sign the form.
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, dividends, 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>
<CAPTION>
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GIVE THE NAME AND
FOR THIS TYPE OF SOCIAL SECURITY
ACCOUNT: NUMBER OF:
------------------------------------------------------------------
<S> <C>
1. Individual The individaul
2. Two or more individuals The actual owner of the account
(joint 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 The grantor-trustee(1)
savings trust (grantor is
also trustee)
b. 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)
------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
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GIVE THE NAME AND
FOR THIS TYPE OF EMPLOYER IDENTIFICATION
ACCOUNT: NUMBER OF:
------------------------------------------------------------------
<S> <C>
6. Sole proprietorship The owner(3)
7. A valid trust, estate or Legal entity(4)
pension trust
8. Corporate The corporation
9. a. Association, club, The organization
religious, charitable,
educational, or other
tax-exempt organization
10. Partnership The partnership
11. A broker or registered The broker or nominee
nominee
12. Account with the Department The public entity
of Agriculture in the name
of a public entity (such as
a state or local government,
school district, or prison)
that receives agricultural
program payments
------------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Show the individual's name. You may also enter your business name. You may
use your SSN or EIN.
(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.
Page 2
<PAGE> 1
Exhibit (a)(9)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell these securities. The Offer is made only by the Offer to Purchase and
the related Letter of Transmittal and is not being made to (nor will
tenders be accepted from) holders of Shares in any jurisdiction in which
the Offer or the acceptance thereof would not be in compliance with the
securities laws of such jurisdiction. In those jurisdictions where
securities 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
Offeror by Dillon, Read & Co. Inc. or one or more registered
brokers or dealers licensed under the laws of such
jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
ELCO INDUSTRIES, INC.
AT
$36.00 NET PER SHARE
BY
E.I. TEXTRON INC.
A WHOLLY OWNED SUBSIDIARY OF
TEXTRON INC.
E.I. Textron Inc., a Delaware corporation (the "Offeror") and a wholly
owned subsidiary of Textron Inc., a Delaware corporation (the "Parent"), hereby
offers to purchase all of the shares of common stock, par value $5.00 per share
(the "Shares"), of Elco Industries, Inc., a Delaware corporation (the
"Company"), including the associated Rights as defined in the Rights Agreement
between the Company and The First National Bank of Chicago, as Rights Agent,
dated as of January 20, 1988, as amended June 24, 1988 and September 12, 1995,
for $36.00 per Share, net to the seller in cash, without interest, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
September 19, 1995 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which together constitute the "Offer"). Unless the context
otherwise requires, all references to Shares herein include the associated
Rights.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON TUESDAY, OCTOBER 17, 1995, UNLESS THE OFFER IS EXTENDED.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of September 12, 1995 (the "Merger Agreement"), among the Parent, the Offeror
and the Company. The Merger Agreement provides that, among other things, as soon
as practicable after the purchase of Shares pursuant to the Offer and the
satisfaction of the other conditions set forth in the Merger Agreement and in
accordance with the relevant provisions of Delaware law, the Offeror will be
merged with and into the Company (the "Merger"). At the effective time of the
Merger (the "Effective Time"), each Share issued and outstanding immediately
prior to the Effective Time (other than Shares held in the treasury of the
Company, Shares held by the Parent, the Offeror or any other wholly owned
subsidiary of the Parent or the Company, or Shares which are held by
stockholders, if any, who properly exercise their appraisal rights under
Delaware law) will be converted into the right to receive $36.00 in cash without
interest.
The Offer is conditioned upon, among other things, (i) there having been
validly tendered and not withdrawn prior to the expiration of the Offer that
number of Shares representing at least 66 2/3% of all
outstanding Shares on a fully diluted basis on the date of purchase (the
"Minimum Condition"), and
<PAGE> 2
(ii) satisfaction of certain other terms and conditions. The Offeror reserves
the right (but shall not be obligated), in accordance with applicable rules and
regulations of the Securities and Exchange Commission, to reduce the Minimum
Condition (but not below 50.01% of the outstanding Shares on a fully diluted
basis) or to waive any other condition to the Offer.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE MERGER AGREEMENT,
THE OFFER AND THE MERGER, HAS DETERMINED THAT THE TERMS OF THE OFFER AND MERGER
ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY'S STOCKHOLDERS, AND
RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR
SHARES.
For purposes of the Offer, the Offeror will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as, if
and when the Offeror gives oral or written notice to Harris Trust Company of New
York (the "Depositary") of the Offeror's acceptance of such Shares for payment.
In all cases, payment for Shares purchased pursuant to the Offer will be made by
deposit of the purchase price with the Depositary, which shall act as agent for
tendering stockholders for the purpose of receiving payment from the Offeror and
transmitting payment to tendering stockholders. Payment for Shares accepted for
payment pursuant to the Offer will be made only after timely receipt by the
Depositary of certificates for such Shares or timely confirmation of a
book-entry transfer of such Shares into the Depositary's account at the
Book-Entry Transfer Facilities (as defined in the Offer to Purchase) pursuant to
the procedures set forth in the Offer to Purchase and timely receipt by the
Depositary of a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof), with any required signature guarantees, or,
in the case of a book-entry transfer, an Agent's Message (as defined in the
Offer to Purchase) and any other documents required by the Letter of
Transmittal.
If any of the conditions set forth in the Offer to Purchase that relate to
the Offeror's obligations to purchase the Shares are not satisfied by 12:00
Midnight, New York City time, on Tuesday, October 17, 1995 (or any other time
then set as the Expiration Date), the Offeror may, subject to the terms of the
Merger Agreement, (i) extend the Offer and, subject to applicable withdrawal
rights, retain all tendered Shares until the expiration of the Offer as
extended, (ii) subject to complying with applicable rules and regulations of the
Securities and Exchange Commission, accept for payment all Shares so tendered
and not extend the Offer, or (iii) terminate the Offer and not accept for
payment any Shares and return all tendered Shares to tendering stockholders. The
term "Expiration Date" shall mean 12:00 Midnight, New York City time, on
Tuesday, October 17, 1995, unless the Offeror shall have extended the period of
time for which the Offer is open, in which event the term "Expiration Date"
shall mean the latest time and date at which the Offer, as so extended by the
Offeror, shall expire. The Offeror expressly reserves the right, in its sole
discretion, at any time or from time to time, subject to applicable law and to
the terms of the Merger Agreement, to extend the period during which the Offer
is open by giving oral or written notice of such extension to the Depositary
followed by, as promptly as practicable, a public announcement thereof no later
than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date.
Except as otherwise provided in Section 4 of 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 pursuant to the Offer, may also be
withdrawn at any time after Friday, November 17, 1995. For a withdrawal to be
effective, a written, telegraphic, telex or facsimile transmission notice of
withdrawal must be timely received by the Depositary at one of its addresses set
forth on the back cover of the Offer to Purchase. Any such notice of withdrawal
must specify the name of the person who tendered the Shares to be withdrawn, the
number of Shares to be withdrawn and the name of the registered holder if
different from the name of the person who tendered the Shares. If certificates
for Shares to be withdrawn have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of such certificates, the serial
numbers shown on such certificates must be submitted to the Depositary and,
unless such Shares have been tendered for the account of an Eligible Institution
(as defined in the Offer to Purchase), the signatures on the notice of
withdrawal must be guaranteed by an Eligible Institution. If Shares have been
tendered pursuant to the procedures for book-entry transfer set forth in Section
3 of the Offer to Purchase, any notice of withdrawal must also specify the name
and number of the account at the applicable Book-Entry Transfer Facility (as
defined in the Offer to Purchase) to be credited with the withdrawn Shares. All
questions as to the form and validity (including time of receipt) of a notice of
<PAGE> 3
withdrawal will be determined by the Offeror, in its sole discretion, and its
determination shall be final and binding on all parties.
The information required to be disclosed by paragraph (e)(1)(vii) of Rule
14d-6 of the General Rules and Regulations under the Securities Exchange Act of
1934, as amended, is contained in the Offer to Purchase and is incorporated
herein by reference.
The Company has provided to the Offeror its lists of stockholders and
security position listings for the purpose of disseminating the Offer to holders
of Shares. The Offer to Purchase, the related Letter of Transmittal and other
related materials are being mailed to record holders of Shares and will be
mailed to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the stockholder
lists or, if applicable, who are listed as participants in a clearing agency's
security position listing, for subsequent transmittal to beneficial owners of
Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION THAT SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
Requests for copies of the Offer to Purchase, the related Letter of
Transmittal and other tender offer material may be directed to the Information
Agent or the Dealer Manager as set forth below, and copies will be furnished
promptly at the Offeror's expense. No fees or commissions will be payable to
brokers, dealers or other persons other than the Information Agent, the Dealer
Manager and the Depositary for soliciting tenders of Shares pursuant to the
Offer.
<PAGE> 4
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll-Free: (800) 207-2014
The Dealer Manager for the Offer is:
DILLON, READ & CO. INC.
535 Madison Avenue
New York, New York 10022
(212) 906-7527 (Call Collect)
September 19, 1995
<PAGE> 1
Exhibit (a)(11)
CONFORMED COPY
------------------------
AGREEMENT AND PLAN OF MERGER
AMONG
TEXTRON INC.,
E.I. TEXTRON INC.,
AND
ELCO INDUSTRIES, INC.
DATED AS OF SEPTEMBER 12, 1995
------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I THE OFFER.................................................................... 1
Section 1.1 The Offer............................................................ 1
Section 1.2 Company Actions...................................................... 2
ARTICLE II THE MERGER.................................................................. 3
Section 2.1 The Merger........................................................... 3
Section 2.2 Effective Time....................................................... 3
Section 2.3 Effects of the Merger................................................ 3
Section 2.4 Certificate of Incorporation and Bylaws; Directors and Officers...... 3
Section 2.5 Conversion of Securities............................................. 4
Section 2.6 Exchange of Certificates............................................. 4
Section 2.7 Dissenting Company Common Shares..................................... 5
Section 2.8 Merger Without Meeting of Stockholders............................... 5
Section 2.9 No Further Ownership Rights in Common Stock.......................... 5
Section 2.10 Closing of Company Transfer Books.................................... 5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT................................... 5
Section 3.1 Organization, Standing and Power..................................... 5
Section 3.2 Authority; Non-Contravention......................................... 5
Section 3.3 Schedule 14D-9, Information and Proxy Statements..................... 6
Section 3.4 Financing............................................................ 7
Section 3.5 Brokers and Finders.................................................. 7
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................... 7
Section 4.1 Organization, Standing and Power..................................... 7
Section 4.2 Capital Structure.................................................... 7
Section 4.3 Subsidiaries......................................................... 7
Section 4.4 Other Interests...................................................... 8
Section 4.5 Authority; Non-Contravention......................................... 8
Section 4.6 SEC Documents........................................................ 9
Section 4.7 Offer Documents and Proxy Statement.................................. 10
Section 4.8 Absence of Certain Events............................................ 10
Section 4.9 Litigation........................................................... 10
Section 4.10 Compliance with Applicable Law....................................... 10
Section 4.11 Employee Plans....................................................... 11
Section 4.12 Employment Relations and Agreement................................... 12
Section 4.13 Limitation on Business Conduct....................................... 12
Section 4.14 Environmental Laws and Regulations................................... 12
Section 4.15 Patents, Trademarks, Copyrights...................................... 13
Section 4.16 Takeover Statutes.................................................... 13
Section 4.17 Acquiring Person..................................................... 13
Section 4.18 Taxes................................................................ 13
Section 4.19 Brokers.............................................................. 14
ARTICLE V REPRESENTATIONS AND WARRANTIES REGARDING SUB................................. 14
Section 5.1 Organization and Standing............................................ 14
Section 5.2 Capital Structure.................................................... 14
Section 5.3 Authority; Non-Contravention......................................... 14
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE VI COVENANTS RELATING TO CONDUCT OF BUSINESS................................... 14
Section 6.1 Conduct of Business by the Company Pending the Merger................ 14
Section 6.2 Acquisition Proposals................................................ 16
Section 6.3 Annual Meeting of Stockholders....................................... 17
Section 6.4 Conduct of Business of Sub Pending the Merger........................ 17
ARTICLE VII ADDITIONAL AGREEMENTS...................................................... 17
Section 7.1 Company Stockholder Approval; Proxy Statement........................ 17
Section 7.2 Access to Information; Confidentiality............................... 18
Section 7.3 Fees and Expenses.................................................... 18
Section 7.4 Company Stock Options................................................ 18
Section 7.5 Performance Shares................................................... 19
Section 7.6 Reasonable Best Efforts.............................................. 19
Section 7.7 Public Announcements................................................. 19
Section 7.8 Indemnification; Directors and Officers Insurance.................... 19
Section 7.9 Employees............................................................ 20
Section 7.10 Board Representation................................................. 21
Section 7.11 Notification of Certain Matters...................................... 21
Section 7.12 Okabe................................................................ 21
Section 7.13 Nagoya Notification.................................................. 21
ARTICLE VIII CONDITIONS PRECEDENT...................................................... 21
Section 8.1 Conditions to Each Party's Obligation to Effect the Merger........... 21
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER........................................... 22
Section 9.1 Termination.......................................................... 22
Section 9.2 Effect of Termination................................................ 23
Section 9.3 Amendment............................................................ 23
Section 9.4 Waiver............................................................... 23
Section 9.5 Procedure for Termination, Amendment or Waiver....................... 23
ARTICLE X GENERAL PROVISIONS........................................................... 23
Section 10.1 Non-Survival of Representations and Warranties....................... 23
Section 10.2 Notices.............................................................. 23
Section 10.3 Interpretation....................................................... 24
Section 10.4 Counterparts......................................................... 24
Section 10.5 Entire Agreement; No Third-Party Beneficiaries....................... 24
Section 10.6 Governing Law........................................................ 24
Section 10.7 Assignment........................................................... 25
Section 10.8 Severability......................................................... 25
Section 10.9 Enforcement of this Agreement........................................ 25
Section Incorporation of Exhibits............................................
10.10 25
EXHIBIT A CONDITIONS OF THE OFFER...................................................... 27
</TABLE>
ii
<PAGE> 4
CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of September 12, 1995 (this
"Agreement"), among Textron Inc., a Delaware corporation ("Parent"), E. I.
Textron Inc., a Delaware corporation ("Sub") and a wholly owned subsidiary of
Parent, and Elco Industries, Inc., a Delaware corporation (the "Company") (Sub
and the Company being hereinafter collectively referred to as the "Constituent
Corporations").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Parent, Sub and the Company
have approved the acquisition of the Company by Parent pursuant to a tender
offer (the "Offer") by Sub for all of the outstanding shares of Common Stock,
par value $5.00 per share ("Common Stock"), of the Company together with the
associated Rights (as hereafter defined) at a price of $36.00 per share, net to
the seller in cash, without interest, followed by a merger (the "Merger") of Sub
with and into the Company all upon the terms and subject to the conditions set
forth herein;
WHEREAS, the Board of Directors of the Company has adopted resolutions
approving the Offer and the Merger and recommending that the Company's
stockholders accept the Offer; and
WHEREAS, pursuant to the Merger, each issued and outstanding share of
Common Stock not owned directly or indirectly by Parent or the Company, except
shares of Common Stock held by holders who comply with the provisions of
Delaware law regarding the right of stockholders to dissent from the Merger and
require appraisal of their shares of Common Stock, will be converted into the
right to receive the per share consideration paid pursuant to the Offer.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements herein contained, Parent, Sub and the
Company hereby agree as follows:
ARTICLE I
THE OFFER
Section 1.1 The Offer. (a) Subject to the provisions of this Agreement,
within five business days after the first public announcement of this Agreement,
Sub shall, and Parent shall cause Sub to, commence, within the meaning of Rule
14d-2 under the Exchange Act (as hereinafter defined), the Offer. The obligation
of Sub to, and of Parent to cause Sub to, commence the Offer and accept for
payment, and pay for, any shares of Common Stock (and the associated Rights)
tendered pursuant to the Offer shall be subject to the conditions set forth in
Exhibit A. The Offer shall initially expire 20 business days after the date of
its commencement, unless this Agreement is terminated in accordance with Article
IX, in which case the Offer (whether or not previously extended in accordance
with the terms hereof) shall expire on such date of termination. Without the
prior written consent of the Company, Sub shall not (i) impose conditions to the
Offer in addition to those set forth in Exhibit A, (ii) modify or amend the
conditions set forth in Exhibit A or any other term of the Offer in a manner
adverse to the holders of shares of Common Stock, (iii) waive or amend (below
50.01% of the outstanding shares of Common Stock on a fully diluted basis) the
Minimum Condition (as defined in Exhibit A), (iv) reduce the number of shares of
Common Stock subject to the Offer, (v) reduce the price per share of Common
Stock to be paid pursuant to the Offer, (vi) except as provided in the following
sentence, extend the Offer, if all of the Offer conditions are satisfied or
waived, or (vii) change the form of consideration payable in the Offer.
Notwithstanding the foregoing, Sub may, without the consent of the Company,
extend the Offer at any time, and from time to time, (i) if at the then
scheduled expiration date of the Offer any of the conditions to Sub's obligation
to accept for payment and pay for shares of Common Stock shall not have been
satisfied or waived, until the such time as such conditions are satisfied or
waived; (ii) for any period required by any rule, regulation, interpretation or
position of the SEC (as hereinafter defined) or its staff applicable to the
Offer; or (iii) if all Offer conditions are satisfied or waived but the number
of shares of
<PAGE> 5
Common Stock tendered is less than 90% of the then outstanding number of shares
of Common Stock, for an aggregate period of not more than 10 business days (for
all such extensions) beyond the latest expiration date that would be permitted
under clause (i) or (ii) of this sentence. So long as this Agreement is in
effect and the Offer conditions have not been satisfied or waived, Sub shall,
and Parent shall cause Sub to, cause the Offer not to expire. Subject to the
terms and conditions of the Offer (but subject to the right of termination in
accordance with Article IX), Sub shall, and Parent shall cause Sub to, pay for
all shares of Common Stock validly tendered and not withdrawn pursuant to the
Offer as soon as practicable after the expiration of the Offer.
(b) On the date of commencement of the Offer, Parent and Sub shall file
with the Securities and Exchange Commission (the "SEC") a Tender Offer Statement
on Schedule 14D-1 with respect to the Offer, which shall contain an offer to
purchase and a related letter of transmittal (such Schedule 14D-1 and the
documents therein pursuant to which the Offer will be made, together with any
supplements or amendments thereto, the "Offer Documents"). The Company and its
counsel shall be given an opportunity to review and comment upon the Offer
Documents prior to the filing thereof with the SEC. The Offer Documents shall
comply as to form in all material respects with the requirements of the
Securities Exchange Act of 1934, as amended (including the rules and regulations
promulgated thereunder, the "Exchange Act"), and on the date filed with the SEC
and on the date first published, sent or given to the Company's stockholders,
the Offer Documents shall not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, except that no representation is made by Parent
or Sub with respect to information supplied by the Company for inclusion in the
Offer Documents. Each of Parent, Sub and the Company agrees promptly to correct
any information provided by it for use in the Offer Documents if and to the
extent that such information shall have become false or misleading in any
material respect, and each of Parent and Sub further agrees to take all steps
necessary to cause the Offer Documents as so corrected to be filed with the SEC
and to be disseminated to holders of shares of Common Stock, in each case as and
to the extent required by applicable federal securities laws. Parent and Sub
agree to provide the Company and its counsel in writing with any comments
Parent, Sub or their counsel may receive from the SEC or its staff with respect
to the Offer Documents promptly upon receipt of such comments.
Section 1.2 Company Actions. (a) The Company hereby approves of and
consents to the Offer and represents that the Board of Directors of the Company
at a meeting duly called and held has duly adopted resolutions (i) approving
this Agreement, the Offer and the Merger, (ii) determining that the terms of the
Offer and Merger are fair to, and in the best interests of, the Company and its
stockholders, and (iii) recommending that the Company's stockholders accept the
Offer and tender their shares of Common Stock and approve the Merger and this
Agreement. The Company hereby consents to the inclusion in the Offer Documents
of such recommendation of the Board of Directors of the Company. The Company
represents that its Board of Directors has received the written opinion (the
"Fairness Opinion") of The Chicago Dearborn Company (the "Financial Advisor")
that the proposed consideration to be received by the holders of shares of
Common Stock pursuant to the Offer and the Merger is fair to such holders from a
financial point of view. The Company has been authorized by the Financial
Advisor to permit, subject to the prior review and consent by the Financial
Advisor (such consent not to be unreasonably withheld), the inclusion of the
Fairness Opinion (or a reference thereto) in the Offer Documents, the Schedule
14D-9 (as hereinafter defined) and the Proxy Statement (as hereinafter defined).
(b) On the date the Offer Documents are filed with the SEC, the Company
shall file with the SEC a Solicitation/Recommendation Statement on Schedule
14D-9 with respect to the Offer (such Schedule 14D-9, as amended from time to
time, the "Schedule 14D-9") containing the recommendations described in
paragraph (a) above and shall mail the Schedule 14D-9 to the stockholders of the
Company as required by Rule 14D-9 promulgated under the Exchange Act. To the
extent practicable, the Company shall cooperate with Parent in mailing or
otherwise disseminating the Schedule 14D-9 with the appropriate Offer Documents
to the Company's stockholders. Parent and its counsel shall be given an
opportunity to review and comment upon the Schedule 14D-9 prior to the filing
thereof with the SEC. The Schedule 14D-9 shall comply as to form in all material
respects with the requirements of the Exchange Act and, on the date filed with
the SEC
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and on the date first published, sent or given to the Company's stockholders,
shall not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that no representation is made by the Company with
respect to information supplied by Parent or Sub for inclusion in the Schedule
14D-9. Each of the Company, Parent and Sub agrees promptly to correct any
information provided by it for use in the Schedule 14D-9 if and to the extent
that such information shall have become false or misleading in any material
respect, and the Company further agrees to take all steps necessary to cause the
Schedule 14D-9 as so corrected to be filed with the SEC and disseminated to the
holders of shares of Common Stock, in each case as and to the extent required by
applicable federal securities laws. The Company agrees to provide Parent and Sub
and their counsel in writing with any comments the Company or its counsel may
receive from the SEC or its staff with respect to the Schedule 14D-9 promptly
after the receipt of such comments.
(c) In connection with the Offer, the Company shall cause its transfer
agent to promptly furnish Sub with a list of the holders of Common Stock and
mailing labels containing the names and addresses of the record holders of
Common Stock as of a recent date and of those persons becoming record holders
subsequent to such date, together with copies of all lists of stockholders,
security position listings (including shares of Common Stock held by
depositories) and computer files and all other information in the Company's
possession or control regarding the beneficial owners of Common Stock, and shall
furnish to Sub such information and assistance (including updated lists of
stockholders, security position listings and computer files) as Sub may
reasonably request in communicating the Offer to the Company's stockholders.
Parent and Sub shall treat the foregoing information provided by the Company
pursuant to this Section 1.2(c) as "Information" under (and as defined in) that
certain letter agreement, dated September 1, 1995 (as amended, modified or
supplemented, the "Confidentiality Agreement") between the Company and Parent.
ARTICLE II
THE MERGER
Section 2.1 The Merger. Upon the terms and subject to the conditions
hereof, and in accordance with the General Corporation Law of the State of
Delaware, as amended (the "DGCL"), Sub shall be merged with and into the Company
at the Effective Time (as hereinafter defined). Following the Merger, the
separate corporate existence of Sub shall cease and the Company shall continue
as the surviving corporation (the "Surviving Corporation") and shall succeed to
and assume all the rights and obligations of Sub in accordance with the DGCL.
Section 2.2 Effective Time. The Merger shall become effective when the
Certificate of Merger or, if applicable, the Certificate of Ownership and Merger
(each, the "Certificate of Merger"), executed in accordance with the relevant
provisions of the DGCL, are accepted for record by the Secretary of State of the
State of Delaware. When used in this Agreement, the term "Effective Time" shall
mean the later of the date and time at which the Certificate of Merger is
accepted for record or such later time established by the Certificate of Merger.
The filing of the Certificate of Merger shall be made as soon as reasonably
practicable (but not later than the third business day) after the satisfaction
or waiver of the conditions to the Merger set forth herein.
Section 2.3 Effects of the Merger. The Merger shall have the effects set
forth in the DGCL.
Section 2.4 Certificate of Incorporation and Bylaws; Directors and
Officers. (a) The Certificate of Incorporation of Sub, as in effect immediately
prior to the Effective Time, shall be amended to change the name of Sub to "Elco
Industries, Inc." and, as so amended, the Certificate of Incorporation and the
Bylaws of Sub shall be the Certificate of Incorporation and the Bylaws of the
Surviving Corporation until thereafter changed or amended as provided therein or
by applicable law.
(b) The directors of Sub at the Effective Time shall, from and after the
Effective Time, be the initial directors of the Surviving Corporation until
their successors have been duly elected or appointed and qualified
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or until their earlier death, resignation or removal, in accordance with the
Surviving Corporation's Certificate of Incorporation and Bylaws.
(c) The officers of the Company at the Effective Time and such other
persons as designated by Parent shall, from and after the Effective Time, be the
initial officers of the Surviving Corporation until their successors have been
duly elected or appointed and qualified or until their earlier death,
resignation or removal, in accordance with the Surviving Corporation's
Certificate of Incorporation and Bylaws.
Section 2.5 Conversion of Securities. As of the Effective Time, by virtue
of the Merger and without any action on the part of any stockholder of the
Company:
(a) All shares of Common Stock that are held in the treasury of the
Company or by any wholly owned Subsidiary (as hereinafter defined) of the
Company and any shares of Common Stock owned by Parent, Sub or any other
wholly owned Subsidiary of Parent shall be canceled and no consideration
shall be delivered in exchange therefor.
(b) Each share of Common Stock (together with the associated Rights)
issued and outstanding immediately prior to the Effective Time (other than
shares to be canceled in accordance with Section 2.5(a) and other than
Dissenting Company Common Shares (as defined in Section 2.7)) shall be
converted into the right to receive from the Surviving Corporation in cash,
without interest, the per share consideration in the Offer (the "Merger
Consideration"). All such shares of Common Stock, when so converted, shall
no longer be outstanding and shall automatically be canceled and retired
and each holder of a certificate or certificates (the "Certificates")
representing any such shares shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration.
(c) Each issued and outstanding share of the capital stock of Sub
shall be converted into and become one fully paid and nonassessable share
of Common Stock, par value $.01 per share, of the Surviving Corporation.
Section 2.6 Exchange of Certificates. (a) Paying Agent. Prior to the
Effective Time, Parent shall appoint a commercial bank or trust company to act
as paying agent hereunder (the "Paying Agent") for the payment of the Merger
Consideration upon surrender of Certificates. All of the fees and expenses of
the Paying Agent shall be borne by Parent.
(b) Surviving Corporation to Provide Funds. Parent shall take all steps
necessary to enable and cause the Surviving Corporation to provide the Paying
Agent with cash in amounts necessary to pay for all of the shares of Common
Stock pursuant to Section 2.5 (determined as though there are no Dissenting
Company Common Shares), when and as such amounts are needed by the Paying Agent.
(c) Exchange Procedures. As soon as practicable after the Effective Time,
the Paying Agent shall mail to each holder of record of a Certificate, other
than Parent, the Company and any wholly owned Subsidiary of Parent or the
Company, (i) a letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only upon
actual delivery of the Certificates to the Paying Agent and shall be in a form
and have such other provisions as Parent may reasonably specify) and (ii)
instructions for the use thereof in effecting the surrender of the Certificates
in exchange for the Merger Consideration. Upon surrender of a Certificate for
cancellation to the Paying Agent or to such other agent or agents as may be
appointed by the Surviving Corporation, together with such letter of
transmittal, duly executed, and such other documents as may reasonably be
required by the Paying Agent, the holder of such Certificate shall be entitled
to receive in exchange therefor the amount of cash into which the shares of
Common Stock theretofore represented by such Certificate shall have been
converted pursuant to Section 2.5, and the Certificates so surrendered shall
forthwith be canceled. No interest will be paid or will accrue on the cash
payable upon the surrender of any Certificate. If payment is to be made to a
person other than the person in whose name the Certificate so surrendered is
registered, it shall be a condition of payment that such Certificate shall be
properly endorsed or otherwise in proper form for transfer and that the person
requesting such payment shall pay any transfer or other taxes required by reason
of the transfer of such Certificate or establish to the satisfaction of the
Surviving Corporation that such tax has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.6, each Certificate (other than
Certificates representing
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Dissenting Company Common Shares and Certificates representing any shares of
Common Stock owned by Parent or any wholly owned Subsidiary of Parent or held in
the treasury of the Company or by any wholly owned Subsidiary of the Company)
shall be deemed at any time after the Effective Time to represent only the right
to receive upon such surrender the amount of cash, without interest, into which
the shares of Common Stock theretofore represented by such Certificate shall
have been converted pursuant to Section 2.5. Notwithstanding the foregoing, none
of the Paying Agent, the Surviving Corporation or any party hereto shall be
liable to a former stockholder of the Company for any cash or interest delivered
to a public official pursuant to applicable abandoned property, escheat or
similar laws.
Section 2.7 Dissenting Company Common Shares. Notwithstanding any
provision of this Agreement to the contrary, if required by the DGCL but only to
the extent required thereby, shares of Common Stock which are issued and
outstanding immediately prior to the Effective Time and which are held by
holders of such shares of Common Stock who have properly exercised appraisal
rights with respect thereto in accordance with Section 262 of the DGCL (the
"Dissenting Company Common Shares") will not be exchangeable for the right to
receive the Merger Consideration, and holders of such shares of Common Stock
will be entitled to receive payment of the appraised value of such shares of
Common Stock in accordance with the provisions of such Section 262 unless and
until such holders fail to perfect or effectively withdraw or lose their rights
to appraisal and payment under the DGCL. If, after the Effective Time, any such
holder fails to perfect or effectively withdraws or loses such right, such
shares of Common Stock will thereupon be treated as if they had been converted
into and have become exchangeable for, at the Effective Time, the right to
receive the Merger Consideration, without any interest thereon. The Company will
give Parent prompt notice of any demands received by the Company for appraisals
of shares of Common Stock. The Company shall not, except with the prior written
consent of Parent, make any payment with respect to any demands for appraisal or
offer to settle or settle any such demands.
Section 2.8 Merger Without Meeting of Stockholders. Notwithstanding the
foregoing in this Article II, in the event that Sub, or any other direct or
indirect subsidiary of Parent, shall acquire at least 90 percent of the
outstanding shares of Common Stock, the parties hereto agree to take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after the expiration of the Offer without a meeting of
stockholders of the Company, in accordance with Section 253 of the DGCL.
Section 2.9 No Further Ownership Rights in Common Stock. From and after
the Effective Time, the holders of shares of Common Stock which were outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such shares of Common Stock except as otherwise provided in this
Agreement or by applicable law. All cash paid upon the surrender of Certificates
in accordance with the terms hereof shall be deemed to have been issued in full
satisfaction of all rights pertaining to the shares of Common Stock.
Section 2.10 Closing of Company Transfer Books. At the Effective Time,
the stock transfer books of the Company shall be closed and no transfer of
shares of Common Stock shall thereafter be made. If, after the Effective Time,
Certificates are presented to the Surviving Corporation, they shall be canceled
and exchanged as provided in this Article II.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company as follows:
Section 3.1 Organization, Standing and Power. Parent is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has the requisite corporate power and authority to carry
on its business as now being conducted.
Section 3.2 Authority; Non-Contravention. Parent has all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Parent and the consummation by Parent of the transactions contemplated
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<PAGE> 9
hereby have been duly authorized by all necessary corporate action on the part
of Parent. This Agreement has been duly executed and delivered by Parent and
(assuming the valid authorization, execution and delivery of this Agreement by
the Company) constitutes a valid and binding obligation of Parent enforceable
against Parent in accordance with its terms. The execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated hereby
and compliance with the provisions hereof will not, conflict with, or result in
any violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or to the loss of a material benefit under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
properties or assets of Parent or any of its Subsidiaries under, any provision
of (i) the Certificate of Incorporation or Bylaws of Parent (true and complete
copies of which have been delivered to the Company) or the comparable charter or
organization documents of any of its Subsidiaries, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to Parent or any
of its Subsidiaries or (iii) subject to the government filings and other matters
referred to in the following sentence, any judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to Parent or any of its
Subsidiaries or any of their respective properties or assets, other than, in the
case of clauses (ii) or (iii), any such conflicts, violations, defaults, rights,
losses, liens, security interests, charges or encumbrances that, individually or
in the aggregate, would not have a Material Adverse Effect (as defined below) on
Parent, materially impair the ability of Parent or Sub to perform their
respective obligations hereunder or prevent the consummation of any of the
transactions contemplated hereby. No filing or registration with, or
authorization, consent or approval of, any domestic (federal and state), foreign
or supranational court, commission, governmental body, regulatory or
administrative agency, authority or tribunal (a "Governmental Entity") is
required by or with respect to Parent or any of its Subsidiaries in connection
with the execution and delivery of this Agreement by Parent or Sub or is
necessary for the consummation of the Offer, the Merger and the other
transactions contemplated by this Agreement, except for (i) in connection or in
compliance with the Exchange Act, (ii) the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware and appropriate documents
with the relevant authorities of other states in which the Company is qualified
to do business, (iii) such filings and consents, if any, as may be required
under any environmental, health or safety law or regulation pertaining to any
notification, disclosure or required approval triggered by the Offer, the Merger
or the transactions contemplated by this Agreement, (iv) such filings and
approvals as may be required under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "Improvements Act"), (v) such filings and approvals
as may be required by any applicable state securities or "blue sky" laws or
state takeover laws, (vi) such filings, consents, approvals, orders,
registrations, declarations and filings as may be required under the laws of any
foreign country in which Parent or any of its Subsidiaries conducts any business
or owns any assets, and (vii) such other consents, orders, authorizations,
approvals, registrations, declarations and filings the failure of which to be
obtained or made would not, individually or in the aggregate, have a Material
Adverse Effect on Parent, materially impair the ability of Parent or Sub to
perform their respective obligations hereunder or prevent the consummation of
any of the transactions contemplated hereby. For purposes of this Agreement, (a)
"Material Adverse Change" or "Material Adverse Effect" means, when used with
respect to Parent, Sub or the Company, as the case may be, any change or effect,
either individually or in the aggregate, that is materially adverse to the
business, assets, financial condition or results of operations of Parent and its
Subsidiaries taken as a whole, Sub, or the Company and its Subsidiaries taken as
a whole, as the case may be, and (b) "Subsidiary" means any corporation,
partnership, joint venture or other legal entity of which Parent or the Company,
as the case may be (either alone or through or together with any other
Subsidiary), owns, directly or indirectly, 50% or more of the stock or other
equity interests the holders of which are generally entitled to vote for the
election of the board of directors or other governing body of such corporation
or other legal entity.
Section 3.3 Schedule 14D-9, Information and Proxy Statements. None of the
information to be supplied by Parent or Sub for inclusion or incorporation by
reference in the Offer Documents, the Schedule 14D-9, the information statement,
if any, filed by the Company in connection with the Offer pursuant to Rule 14F-1
promulgated under the Exchange Act (the "Information Statement"), or the proxy
statement (together with any amendments or supplements thereto, the "Proxy
Statement") relating to the Stockholder Meeting (as defined in Section 7.1) will
(i) in the case of the Offer Documents, the Schedule 14D-9 and the
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Information Statement, at the respective times such documents are filed with the
SEC and are first published, sent or given to the Company's stockholders, or
(ii) in the case of the Proxy Statement, at the time of the mailing of the Proxy
Statement, at the time of the Stockholder Meeting and at the Effective Time,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
Section 3.4 Financing. Parent or Sub has sufficient funds available to
enable it to purchase all outstanding shares on a fully diluted basis of Common
Stock pursuant to the Offer and the Merger and to pay all fees and expenses
related to the transactions contemplated by this Agreement.
Section 3.5 Brokers and Finders. Except for the fees and expenses payable
to Dillon, Read & Co. Inc. by Parent, neither Parent nor Sub has employed any
investment banker, broker, finder, consultant or intermediary in connection with
the transactions contemplated by this Agreement which would be entitled to any
investment banking, brokerage, finder's or similar fee or commission in
connection with this Agreement or the transactions contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub as follows:
Section 4.1 Organization, Standing and Power. The Company and each of its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated and has
the requisite corporate power and authority to carry on its business as now
being conducted. The Company and each of its Subsidiaries is duly qualified to
do business, and is in good standing, in each jurisdiction where the character
of its properties owned or held under lease or the nature of its activities
makes such qualification necessary, except where the failure to be so qualified
and in good standing would not, individually or in the aggregate, have a
Material Adverse Effect on the Company.
Section 4.2 Capital Structure. The authorized capital stock of the Company
consists of 20,000,000 shares of Common Stock and 250,000 shares of Preferred
Stock, par value $1.00 per share ("Preferred Stock"). At the close of business
on September 8, 1995, (i) 4,982,869 shares of Common Stock were issued and
outstanding, (ii) 225,000 shares of Common Stock were reserved for issuance upon
the exercise of outstanding Company Stock Options (as defined in Section 7.4)
and (iii) 4,766 shares of Common Stock were held by the Company in its treasury.
As of the date hereof there are no shares of Preferred Stock outstanding. All
outstanding shares of capital stock of the Company are validly issued, fully
paid and nonassessable and not subject to preemptive rights. As of September 8,
1995, there were 153,875 Company Stock Options outstanding, in the aggregate,
under the Company's 1991 Stock Option Plan and the 1992 Stock Option Plan for
Non-employee Directors (the "Stock Plans") to acquire 153,875 shares of Common
Stock. Except for such Company Stock Options and rights issued pursuant to the
Company Rights Agreement (as defined in Section 4.17) and as set forth in the
Company Disclosure Letter (as defined below), there are no options, warrants,
rights, commitments, agreements, arrangements or undertakings of any kind to
which the Company or any of its Subsidiaries is a party or by which any of them
is bound obligating the Company or any of its Subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of capital
stock or other voting securities of the Company or of any of its Subsidiaries.
The Company Disclosure Letter sets forth the aggregate exercise price for all
outstanding Company Stock Options as of September 8, 1995. Since September 8,
1995, no shares of the Company's capital stock have been issued other than
pursuant to the exercise of Company Stock Options already in existence on such
date and the Company has not granted any stock options for any capital stock of
the Company.
Section 4.3 Subsidiaries. Except as set forth in the letter from the
Company to Parent dated the date hereof, which letter relates to this Agreement
and is designated therein as the Company Disclosure Letter (the "Company
Disclosure Letter"), all of the outstanding capital stock of, or ownership
interests in, each Subsidiary of the Company is owned by the Company, directly
or indirectly, free and clear of any security
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interests, liens, claims, pledges, options, rights of first refusal, agreements,
charges or other encumbrances of any nature ("Liens") or any other limitation or
restriction (including any restriction on the right to vote or sell the same,
except as may be provided as a matter of law). Except as set forth in the
Company Disclosure Letter, there are no (i) securities of the Company or any of
its Subsidiaries convertible into or exchangeable for, (ii) options or other
rights to acquire from the Company or any of its Subsidiaries, or (iii) other
contracts, understandings, arrangements or obligations (whether or not
contingent) providing for the issuance or sale, directly or indirectly, in each
case, with respect to any capital stock or other ownership interests in, or any
other securities of, any Subsidiary of the Company. There are no outstanding
contractual obligations of the Company or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any outstanding shares of capital stock or other
ownership interest in any Subsidiary of the Company nor are there any
irrevocable proxies with respect to any shares of the capital stock of any of
the Company's Subsidiaries. All of the shares of capital stock of each
Subsidiary of the Company are validly existing, fully paid and nonassessable.
Except for statutory and regulatory restrictions or as disclosed in the Company
Disclosure Letter, there are no restrictions which prevent or limit the payment
of dividends by any of the Company's Subsidiaries.
Section 4.4 Other Interests. Except for the Company's interest in its
Subsidiaries or as set forth in the Company Disclosure Letter, neither the
Company nor its Subsidiaries owns directly or indirectly any equity interest or
equity investment in, nor is the Company or any of its Subsidiaries subject to
any obligation or requirement to provide for or to make any equity investment
in, any corporation, limited liability company, partnership, joint venture,
business, trust or entity.
Section 4.5 Authority; Non-Contravention. The Board of Directors of the
Company has approved this Agreement and determined that the Offer and the Merger
are fair and in the best interests of the Company and its stockholders and the
Company has all requisite corporate power and authority to enter into this
Agreement and, subject to approval of the Merger by the stockholders of the
Company (if required), to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by the Company and the consummation by
the Company of the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of the Company, subject to such
approval of the Merger by the stockholders of the Company (if required). This
Agreement has been duly executed and delivered by the Company and (assuming the
valid authorization, execution and delivery of this Agreement by Parent and Sub)
constitutes a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms. Except as set forth in the Company
Disclosure Letter, the execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated hereby and compliance with the
provisions hereof will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation,
contractually require any offer to purchase or any prepayment of any debt,
contractually require the payment of (or result in the vesting of) any
severance, golden parachute, change of control or similar type of payment, or
give rise to the loss of a material benefit under, or result in the creation of
any lien, security interest, charge or encumbrance upon any of the properties or
assets of the Company or any of its Subsidiaries under, any provision of (i) the
Certificate of Incorporation or Bylaws of the Company (true and complete copies
of which as of the date hereof have been delivered to Parent) or the comparable
charter or organization documents of any of its Subsidiaries, (ii) any loan or
credit agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to the Company
or any of its Subsidiaries or (iii) subject to the governmental filings and
other matters referred to in the following sentence and approval of this
Agreement by the Company's stockholders (if required), any judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to the Company or
any of its Subsidiaries or any of their respective properties or assets, other
than, in the case of clauses (ii) or (iii), any such conflicts, violations,
defaults, rights, offers, prepayments, payments, losses, liens, security
interests, charges or encumbrances that, individually or in the aggregate, would
not have a Material Adverse Effect on the Company, materially impair the ability
of the Company to perform its obligations hereunder or prevent the consummation
of any of the transactions contemplated hereby. Copies of all contracts,
agreements, instruments or other documents referred to in the Company Disclosure
Letter pursuant to this Section 4.5 will be promptly furnished to Parent after
the date of this Agreement. The Company Disclosure Letter lists the amounts
payable or that will or may become payable to directors, officers or employees
or former directors, officers or
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employees of the Company and its Subsidiaries under each such contract,
agreement, instrument or other document referred to in the Company Disclosure
Letter pursuant to this Section 4.5, except as noted in such Company Disclosure
Letter. No filing or registration with, or authorization, consent or approval
of, any Governmental Entity is required by or with respect to the Company or any
of its Subsidiaries in connection with the execution and delivery of this
Agreement by the Company or the consummation by the Company of the transactions
contemplated hereby, except for (i) in connection or in compliance with the
provisions of the Exchange Act, (ii) the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware and appropriate documents
with the relevant authorities of other states in which the Company is qualified
to do business, (iii) such filings and consents, if any, as may be required
under any environmental, health or safety law or regulation pertaining to any
notification, disclosure or required approval triggered by the Offer, the Merger
or the transactions contemplated by this Agreement, (iv) such filings and
approvals as may be required under the Improvements Act, (v) such filings in
connection with any state or local tax which is attributable to the beneficial
ownership of the Company's or its Subsidiaries' real property, if any
(collectively, the "Gains Taxes"), (vi) such filings and approvals as may be
required by any applicable state securities or "blue sky" laws or state takeover
laws, (vii) such filings, consents, approvals, orders, registrations and
declarations as may be required under the laws of any foreign country in which
the Company or any of its subsidiaries conducts any business or owns any assets,
and (viii) such other consents, orders, authorizations, registrations,
approvals, declarations and filings the failure of which to be obtained or made
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company, materially impair the ability of Company to perform its obligations
hereunder or prevent the consummation of any of the transactions contemplated
hereby.
Section 4.6 SEC Documents. (a) Since July 1, 1993, the Company has filed
all documents with the SEC required to be filed under the Securities Act of
1933, as amended (including the rules and regulations promulgated thereunder the
"Securities Act"), or the Exchange Act (such documents filed with the SEC on or
before September 8, 1995 being the "Company SEC Documents"). As of their
respective dates, (i) the Company SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, and (ii) none of the Company SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The Company has
delivered to Parent its draft Annual Report on Form 10-K for the fiscal year
ended June 30, 1995 (the "1995 Draft 10-K") including audited consolidated
balance sheets and statements of income, changes in stockholders' equity, and
cash flow and notes thereto as of and for the fiscal year ended June 30, 1995
(the "1995 Financial Statements"). The financial statements of the Company
included in the Company SEC Documents and the 1995 Financial Statements comply
as to form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles (except, in
the case of unaudited statements, as permitted by Form 10-Q of the SEC) applied
on a consistent basis during the periods involved (except as may be indicated
therein or in the notes thereto) and fairly present the consolidated financial
position of the Company and its consolidated Subsidiaries as at the dates
thereof and the consolidated results of their operations and changes in
financial position for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments and to any other adjustments
described therein). The Form 10-K of the Company as of and for the fiscal year
ended June 30, 1995 to be filed by the Company with the SEC will not differ in
any material respect from the 1995 Draft 10-K.
(b) Except as set forth in the Company SEC Documents, the 1995 Draft 10-K,
the 1995 Financial Statements or the Company Disclosure Letter, neither the
Company nor any of its Subsidiaries has any liability or obligation of any
nature (whether accrued, absolute, contingent or otherwise) which would be
required to be reflected on a balance sheet, or in the notes thereto, prepared
in accordance with generally accepted accounting principles, except for
liabilities and obligations incurred in the ordinary course of business
consistent with past practice since July 1, 1995 which would not, individually
or in the aggregate, have a Material Adverse Effect on the Company.
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(c) The Company has heretofore made available or promptly will make
available to Parent a complete and correct copy of any amendments or
modifications which have not yet been filed with the SEC to agreements,
documents or other instruments which previously have been filed with the SEC
pursuant to the Exchange Act.
Section 4.7 Offer Documents and Proxy Statement. None of the information
supplied or to be supplied by the Company for inclusion or incorporation by
reference in the Offer Documents or the Schedule 14D-9, the Information
Statement, if any, the Proxy Statement, if any, or any amendment or supplement
thereto, will (i) in the case of the Offer Documents, the Schedule 14D-9 and the
Information Statement, at the respective times such documents are filed with the
SEC or first published, sent or given to the Company's stockholders, or (ii) in
the case of the Proxy Statement, at the time of the mailing of the Proxy
Statement and at the time of the Stockholder Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading. If at any
time prior to the Effective Time any event with respect to the Company, its
officers and directors or any of its Subsidiaries should occur which is required
to be described in an amendment of, or a supplement to, the Proxy Statement or
the Offer Documents, such event shall be so described, and such amendment or
supplement shall be promptly filed with the SEC and, as required by law,
disseminated to the stockholders of the Company. The Proxy Statement will comply
as to form in all material respects with the requirements of the Exchange Act.
Section 4.8 Absence of Certain Events. Since July 1, 1995, the Company
and its Subsidiaries have operated their respective businesses only in the
ordinary course consistent with past practice and, except as contemplated by
this Agreement or disclosed in the Company SEC Documents, the 1995 Draft 10-K,
the 1995 Financial Statements or the Company Disclosure Letter, there has not
occurred (i) any Material Adverse Change in the Company; (ii) any change by the
Company or any of its Subsidiaries in its accounting methods, principles or
practices; (iii) any amendments or changes in the Certificate of Incorporation
or Bylaws of the Company; (iv) any revaluation by the Company or any of its
Subsidiaries of any of their respective assets, including, without limitation,
write-offs of accounts receivable, other than in the ordinary course of the
Company's and its Subsidiaries' businesses consistent with past practices; (v)
any damage, destruction or loss with respect to the property or assets of the
Company or its Subsidiaries which resulted in, or is reasonably likely to result
in, a Material Adverse Effect on the Company; (vi) except for regular quarterly
dividends of $.15 per share declared and paid in accordance with past practice,
any declaration, setting aside or payment of any dividend or other distribution
with respect to any shares of capital stock of the Company, or any repurchase,
redemption or other acquisition by the Company or any of its Subsidiaries of any
outstanding shares of capital stock or other securities of, or other ownership
interests in, the Company; (vii) any grant of any severance or termination pay
to any director, executive officer or key employee of the Company or any of its
Subsidiaries, except as required under the severance agreements disclosed in the
Company Disclosure Letter pursuant to Section 4.12; (viii) any entry into any
employment, deferred compensation or other similar agreement (or any amendment
to any such existing agreement) with any director, executive officer or key
employee of the Company or any of its Subsidiaries; (ix) any increase in
benefits payable under any existing severance or termination pay policies or
employment agreements with any director, executive officer or key employee of
the Company or any of its Subsidiaries except in the ordinary course of business
consistent with past practice; or (x) any increase in compensation, bonus or
other benefits payable to directors, executive officers or key employees of the
Company or any of its Subsidiaries except in the ordinary course of business
consistent with past practice.
Section 4.9 Litigation. Except as set forth in the Company SEC Documents,
the 1995 Draft 10-K or the Company Disclosure Letter, there are no actions,
suits, proceedings, investigations or reviews pending against the Company or its
Subsidiaries or, to the knowledge of the Company, threatened against the Company
or its Subsidiaries, at law or in equity, or before or by any federal or state
commission, board, bureau, agency, regulatory or administrative instrumentality
or other Governmental Entity or any arbitrator or arbitration tribunal, that are
reasonably likely to have a Material Adverse Effect on the Company.
Section 4.10 Compliance with Applicable Law. The Company and its
Subsidiaries hold all permits, licenses, variances, exceptions, orders and
approvals of all Governmental Entities necessary for the lawful
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conduct of their respective businesses (the "Company Permits"), except for
failures to hold such permits, licenses, variances, exemptions, orders and
approvals which do not, individually or in the aggregate, have, and are not
reasonably likely to have, a Material Adverse Effect on the Company. The Company
and its Subsidiaries are conducting their businesses in compliance with the
terms of the Company Permits, except where the failure so to comply does not
have a Material Adverse Effect on the Company. Except for those matters referred
to in Section 4.14, the businesses of the Company and its Subsidiaries are not
being, and have not been, conducted in violation of any law, Company Permit,
ordinance or regulation of any Governmental Entity except for violations which,
individually or in the aggregate, do not and are not reasonably likely to have a
Material Adverse Effect on the Company.
Section 4.11 Employee Plans. (a) The Company and each Subsidiary has
complied with and performed all contractual obligations and all obligations
under applicable federal, state and local laws, rules and regulations required
to be performed by it under or with respect to any of the Company Benefit Plans
(as defined below) or any related trust agreement or insurance contract, other
than where the failure to so comply or perform does not have, nor is reasonably
likely to have, a Material Adverse Effect on the Company. All contributions and
other payments required to be made by the Company and its Subsidiaries to any
Company Benefit Plan prior to the date hereof have been made, other than where
the failure to so contribute or make payments will not have a Material Adverse
Effect on the Company, and all accruals required to be made under any Company
Benefit Plan have been made. There is no claim, dispute, grievance, charge,
complaint, restraining or injunctive order, litigation or proceeding pending,
or, to the best knowledge of the Company and its Subsidiaries, threatened or
anticipated (other than routine claims for benefits) against or relating to any
Company Benefit Plan or against the assets of any Company Benefit Plan, which is
reasonably likely to have a Material Adverse Effect on the Company. Neither the
Company nor any of its Subsidiaries has communicated generally to employees or
specifically to any employee regarding any future increase of benefit levels (or
future creations of new benefits) with respect to any Company Benefit Plan
beyond those reflected in the Company Benefit Plans, which benefit increases or
creations, either individually or in the aggregate, will have or are reasonably
likely to have, a Material Adverse Effect on the Company. Neither the Company
nor any of its Subsidiaries presently sponsors, maintains, contributes to, nor
is the Company or its Subsidiaries required to contribute to, nor has the
Company or any of its Subsidiaries ever sponsored, maintained, contributed to,
or been required to contribute to, any employee pension benefit plan within the
meaning of section 3(2) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), other than those plans described in note 7 to the
financial statements included in the 1995 Draft 10-K.
(b) With respect to each Company Benefit Plan subject to Title IV of ERISA,
(i) no termination of any Company Benefit Plan has occurred pursuant to which
all liabilities have not been satisfied in full, and no event has occurred and
no condition exists that could reasonably be expected to result in the Company
or Subsidiary incurring a liability under Title IV of ERISA or could constitute
grounds for terminating any Pension Plan; (ii) each such Company Benefit Plan
which is subject to Part 3 of Subtitle B of Title I of ERISA or Section 412 of
the Code, has been maintained in compliance with the minimum funding standards
of ERISA and the Code and no such Company Benefit Plan has incurred any
"accumulated funding deficiency," as defined in Section 412 of the Code and
Section 302 of ERISA, whether or not waived; (iii) neither the Company or any
Subsidiary has sought or received a waiver of its funding requirements with
respect to any Company Benefit Plan and all contributions payable with respect
to each Pension Plan have been timely made; (iv) no reportable event, within the
meaning of Section 4043 of ERISA, and no event described in Section 4062 or 4063
of ERISA, has occurred with respect to any Company Benefit Plan; and (v) the
aggregate accumulated benefit obligations of each Company Benefit Plan subject
to Title IV of ERISA (as of the date of the most recent actuarial valuation
prepared for such Company Benefit Plan) do not exceed the fair market value of
the assets of such Company Benefit Plan (as of the date of such valuation).
(c) Neither the Company nor any of its Subsidiaries has incurred, nor has
any event occurred which has imposed or is reasonably likely to impose upon the
Company or any of its Subsidiaries, any withdrawal liability (complete or
partial within the meanings of sections 4203 or 4205 of ERISA, respectively) in
respect of any multiemployer plan (within the meaning of section 3(37) or
4001(a)(3) of ERISA) (a "Multiemployer
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Plan"), which withdrawal liability has not been satisfied or discharged in full
or which, either individually or in the aggregate, will cause, or is reasonably
likely to cause, a Material Adverse Effect on the Company.
(d) The execution, delivery and performance of this Agreement and
consummation of the transactions contemplated hereby will not result in the
imposition of any federal excise tax under section 4975 of the Code with respect
to any Company Benefit Plan by virtue of such Company Benefit Plan's
relationship with The Paul Revere Corporation or any of its subsidiaries (which
include the words "Paul Revere" in their name).
(e) Except as set forth in the Company Disclosure Letter, neither the
Company nor any Subsidiary maintains or contributes (or has maintained or
contributed to) any Company Benefit Plan which provides, or has a liability to
provide, life insurance, medical, severance, or other employee welfare benefit
to any employee upon his retirement or termination of employment, except as may
be required by Section 4980B of the Code.
(f)(i) "Plan" means any bonus, incentive compensation, deferred
compensation, pension, profit sharing, retirement, stock purchase, stock option,
stock ownership, stock appreciation rights, phantom stock, leave of absence,
layoff, vacation, day or dependent care, legal services, cafeteria, life,
health, accident, disability, workers' compensation or other insurance,
severance, separation or other employee benefit plan, practice, policy or
arrangement of any kind, including, but not limited to, any "employee benefit
plan" within the meaning of section 3(3) of ERISA and (ii) "Company Benefit
Plan" means any employee pension benefit plan and any Plan, other than a
Multiemployer Plan, established by the Company or any of its Subsidiaries or to
which the Company or any of its Subsidiaries contributes or has contributed
(including any such Plans not now maintained by the Company or any of its
Subsidiaries or to which the Company or any of its Subsidiaries does not now
contribute, but with respect to which the Company or any of its Subsidiaries has
or may have any liability). Copies of all Plans (and, if applicable, related
trust agreements) and all amendments thereto and written interpretations thereof
and the most recent Forms 5500 required to be filed with respect thereto will be
promptly furnished to Parent after the date of this Agreement. The Company
Disclosure Letter sets forth each Plan with respect to which benefits will be
accelerated, vested, increased or paid as a result of the transactions
contemplated by this Agreement.
Section 4.12 Employment Relations and Agreement. (a) Except as would not
constitute a Material Adverse Effect on the Company, (i) each of the Company and
its Subsidiaries is in compliance in all material respects with all federal,
state or other applicable laws respecting employment and employment practices,
terms and conditions of employment and wages and hours; (ii) as of the date of
this Agreement, there is no labor strike, dispute, slowdown or stoppage actually
pending or, to the best knowledge of the Company or its Subsidiaries, threatened
against or involving the Company or any of its Subsidiaries; (iii) no collective
bargaining agreement is being negotiated as of the date of this Agreement by the
Company or any of its Subsidiaries; and (iv) the Company and its Subsidiaries
taken as a whole have not experienced any material labor difficulty during the
last three years.
(b) Except as set forth in the Company Disclosure Letter, neither the
Company nor any of its Subsidiaries has any written, or to the knowledge of the
Company, any binding oral, employment, severance, "change of control",
collective bargaining or similar agreements ("Employment Agreements"). Copies of
all Employment Agreements and all amendments thereto have been previously
furnished to Parent.
Section 4.13 Limitation on Business Conduct. Except as set forth in the
Company Disclosure Letter, neither the Company nor its Subsidiaries is a party
to, or has any obligation under, any contract or agreement, written or oral,
which contains any covenants currently or prospectively limiting in any material
respect the freedom of the Company or any of its Subsidiaries to engage in any
line of business or to compete with any entity.
Section 4.14 Environmental Laws and Regulations. (a) The Company and its
Subsidiaries are in compliance with all applicable Environmental Laws, except as
otherwise disclosed in the Company SEC Documents, the 1995 Draft 10-K or the
Company Disclosure Letter and except for non-compliance which individually or in
the aggregate would not have a Material Adverse Effect on the Company. The term
"Environmental Laws" means any federal, state, local or foreign statute,
ordinance, rule, regulation, policy, permit, consent, approval, license,
judgment, order, decree, injunction or other authorization, relating
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to: (A) pollution or protection of human health or safety, health or safety of
employees, sanitation, or the environment (including, without limitation,
ambient air, surface water, ground water, land surface or subsurface strata),
(B) Releases (as defined in 42 U.S.C. sec. 9601(22)) or threatened Releases of
Hazardous Material (as hereinafter defined) into the environment or (C) the
generation, treatment, storage, disposal, use, handling, manufacturing,
transportation or shipment of Hazardous Material.
(b) During the period of ownership or operation by the Company and its
Subsidiaries of any of their respective current or previously owned or leased
properties, there have been no Releases of Hazardous Material in, on, under or
affecting such properties or any surrounding site, and none of the Company or
its Subsidiaries has disposed of any Hazardous Material or any other substance
in a manner that has led, or could reasonably be anticipated to lead, to a
Release, except as otherwise disclosed in the Company SEC Documents, the 1995
Draft 10-K or the Company Disclosure Letter and except in each case for those
which individually or in the aggregate are not reasonably likely to have a
Material Adverse Effect on the Company. Except as disclosed in the Company SEC
Documents, the 1995 Draft 10-K, the 1995 Financial Statements or the Company
Disclosure Letter, neither the Company nor its Subsidiaries has received any
notice that it is a "potentially responsible person" under any Environmental
Laws. The term "Hazardous Material" means any pollutants, contaminants,
hazardous substances, hazardous chemicals, toxic substances, hazardous wastes,
infectious and medical wastes, radioactive materials, petroleum (including crude
oil or any fraction thereof), natural gas, synthetic gas and mixtures thereof,
PCBs, or materials containing PCBs in excess of 50 ppm, asbestos and/or
asbestos-containing materials or solid wastes, including but not limited to
those defined in any Environmental Law and all regulations promulgated under
each and all amendments thereto, or any other federal, state or local
environmental law, ordinance, regulations, rule or order.
Section 4.15 Patents, Trademarks, Copyrights. Except as set forth in the
Company Disclosure Letter, the Company or its Subsidiaries own or possess
adequate licenses or other valid rights to use all material patents, patent
rights, trademarks, trademark rights, trade names, trade name rights,
copyrights, know-how and other proprietary information used or held for use in
connection with the business of the Company or any of its Subsidiaries as
currently being conducted and, to the knowledge of the Company, there are no
assertions or claims challenging the validity of any of the foregoing, except
where the failure to own or possess, or where such assertions or claims, would
not have a Material Adverse Effect on the Company.
Section 4.16 Takeover Statutes. The Board of Directors of the Company has
taken all appropriate action so that neither Parent nor Sub will be an
"interested stockholder" within the meaning of Section 203 of the DGCL or
Article Tenth of the Company's Certificate of Incorporation by virtue of
Parent's or Sub's entry into this Agreement and the consummation of the
transactions contemplated hereunder.
Section 4.17 Acquiring Person. The Company has taken all necessary
actions to ensure that, for the purposes of the Rights Agreement of the Company
dated as of January 20, 1988, as amended June 24, 1988 and September 12, 1995
(the "Company Rights Agreement"), neither Parent nor Sub will become an
"Acquiring Person", the execution of this Agreement does not, and the
commencement or consummation of the Offer, the Merger and the other transactions
contemplated hereunder (including a tender offer by Parent or Sub at a higher
cash price per share for all outstanding shares of Common Stock and associated
Rights pursuant to this Agreement), will not result in the grant of any rights
to any person under the Company Rights Agreement or enable or require any
outstanding rights to be exercised, distributed or triggered, and that the
Rights (as defined in the Company Rights Agreement) will expire without any
further force or effect as of the Effective Time. This Agreement, the Offer and
the Merger have been duly approved by the "Continuing Directors" (as defined in
the Company Rights Agreement) in resolutions specifically referring to, inter
alia, Subsection 1(a) of the Company Rights Agreement. Other than Parent or Sub
(and their affiliates), the Company (or its Board of Directors) has not exempted
(or taken any other action tantamount to exempting) any person or entity from
the potential application of the Company Rights Agreement, except that Okabe
Company Ltd. ("Okabe") and its affiliates are permitted to beneficially own up
to 21% of the outstanding shares of Common Stock without triggering the
potential application of the Company Rights Agreement.
Section 4.18 Taxes. Except as set forth in the Company Disclosure Letter,
(i) the Company and each Subsidiary have filed all material Tax Returns required
to have been filed on or before the date hereof, which
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returns are true and complete in all material respects and all Taxes shown due
thereon have been paid; (ii) no issues that have been raised in writing by the
relevant taxing authority in connection with the examination of the Tax Returns
referred to in clause (i) are currently pending; and (iii) all deficiencies
asserted or assessments made as a result of any examination of the Tax Returns
referred to in clause (i) by a taxing authority have been paid in full or are
being contested in good faith by the Company or such Subsidiary. For purposes of
this Agreement (a) "Tax" (and, with correlative meaning, "Taxes" and "Taxable")
means any federal, state, local or foreign income, gross receipts, property,
sales, use, license, excise, franchise, employment, payroll, premium,
withholding, alternative or added minimum, ad valorem, transfer or excise tax,
or any other tax, custom, duty, governmental fee or other like assessment or
charge of any kind whatsoever, together with any interest or penalty, imposed by
any governmental authority, and (b) "Tax Return" means any return, report or
similar statement required to be filed with respect to any Tax (including any
attached schedules), including, without limitation, any information return,
claim for refund, amended return or declaration of estimated Tax.
Section 4.19 Brokers. No broker, investment banker or other person, other
than The Chicago Dearborn Company, the fees and expenses of which will be paid
by the Company, is entitled to any broker's, finder's or other similar fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company. A copy of the
engagement letter between The Chicago Dearborn Company and the Company setting
forth the fees and expenses to be paid by the Company in connection with the
transactions contemplated by this Agreement has been provided to Parent, and
does not bind Parent and its Subsidiaries (including, after consummation of the
Offer, the Company and its Subsidiaries) other than with respect to
indemnification and contribution and the payment of such fees and expenses.
ARTICLE V
REPRESENTATIONS AND WARRANTIES REGARDING SUB
Parent and Sub jointly and severally represent and warrant to the Company
as follows:
Section 5.1 Organization and Standing. Sub is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Sub was organized solely for the purpose of acquiring the Company and
engaging in the transactions contemplated by this Agreement and has not engaged
in any business since it was incorporated which is not in connection with the
acquisition of the Company and this Agreement.
Section 5.2 Capital Structure. The authorized capital stock of Sub
consists of 1,000 shares of common stock, par value $1.00 per share, all of
which are validly issued and outstanding, fully paid and nonassessable and are
owned by Parent free and clear of all Liens.
Section 5.3 Authority; Non-Contravention. Sub has the requisite power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement, the
performance by Sub of its obligations hereunder and the consummation of the
transactions contemplated hereby have been duly authorized by its Board of
Directors and Parent as its sole stockholder, and, except for the corporate
filings required by state law, no other corporate proceedings on the part of Sub
are necessary to authorize this Agreement and the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by Sub
and (assuming the due authorization, execution and delivery hereof by the
Company) constitutes a valid and binding obligation of Sub enforceable against
Sub in accordance with its terms.
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 6.1 Conduct of Business by the Company Pending the Merger. Except
as otherwise expressly contemplated by this Agreement or as set forth in the
Company Disclosure Letter, during the period from the
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date of this Agreement through the earlier of the time that the change in
composition of the Board of Directors of the Company contemplated by Section
7.10 has occurred and the Effective Time, the Company shall, and shall cause its
Subsidiaries (except with respect to the Company's 50% joint venture with Nagoya
Screw Manufacturing Co. Ltd. (the "Joint Venture"), in which case the Company
shall use all reasonable efforts to cause the Joint Venture) to, in all material
respects carry on their respective businesses in, and not enter into any
material transaction other than in accordance with, the regular and ordinary
course and, to the extent consistent therewith, use its reasonable best efforts
to preserve intact their current business organizations, keep available the
services of their current officers and employees and preserve their
relationships with customers, suppliers and others having business dealings with
them. Without limiting the generality of the foregoing, and except as otherwise
expressly contemplated by this Agreement (including the time period specified
above) or as set forth in the Company Disclosure Letter, the Company shall not,
and shall not permit any of its Subsidiaries (except with respect to the Joint
Venture, in which case the Company shall use all reasonable efforts to cause the
Joint Venture not) to, without the prior written consent of Parent:
(a) (x) declare, set aside or pay any dividends on, or make any other
actual, constructive or deemed distributions in respect of, any of its
capital stock, or otherwise make any payments to stockholders of the
Company in their capacity as such, other than (1) quarterly dividends of
$.15 per share declared and payable consistent with past practices and (2)
dividends payable to the Company declared by any of the Company's
Subsidiaries, (y) split, combine or reclassify any of its capital stock or
issue or authorize the issuance of any other securities in respect of, in
lieu of or in substitution for shares of its capital stock or (z) purchase,
redeem or otherwise acquire any shares of capital stock of the Company or
any of its Subsidiaries or any other securities thereof or any rights,
warrants or options to acquire any such shares or other securities;
(b) issue, deliver, sell, pledge, dispose of or otherwise encumber any
shares of its capital stock, any other voting securities or equity
equivalent or any securities convertible into, or any rights, warrants or
options to acquire, any such shares, voting securities or convertible
securities or equity equivalent (other than, in the case of the Company,
the issuance of Common Stock during the period from the date of this
Agreement through the Effective Time upon the exercise of Company Stock
Options outstanding (as set forth in Section 4.2) on the date of this
Agreement in accordance with their current terms);
(c) amend or change its charter or bylaws or amend, change or waive
(or exempt any person or entity from the effect of) the Company Rights
Agreement, except in connection with the exercise of its fiduciary duties
by the Board of Directors of the Company as set forth in Section 6.2 of
this Agreement;
(d) acquire or agree to acquire by merging or consolidating with, or
by purchasing a substantial portion of the assets of or equity in, or by
any other manner, any business or any corporation, partnership, association
or other business organization or division thereof or otherwise acquire or
agree to acquire any assets, in each case that are material, individually
or in the aggregate, to the Company and its Subsidiaries taken as a whole,
except for purchases of inventory in the ordinary course of business
consistent with past practice;
(e) sell, lease or otherwise dispose of, or agree to sell, lease or
otherwise dispose of, any of its assets that are material, individually or
in the aggregate, to the Company and its Subsidiaries taken as a whole,
except sales of inventory in the ordinary course of business consistent
with past practice;
(f) make any commitment or enter into any contract or agreement except
(x) in the ordinary course of business consistent with past practice or (y)
for capital expenditures to be made in fiscal 1996 as identified in the
Company's Capital Expenditure Budget previously delivered to Parent;
(g) incur any indebtedness for borrowed money or guarantee any such
indebtedness or issue or sell any debt securities or guarantee any debt
securities of others, except for borrowings or guarantees incurred in the
ordinary course of business consistent with past practice, or make any
loans, advances or capital contributions to, or investments in, any other
person, other than to the Company or any wholly owned Subsidiary of the
Company and other than in the ordinary course of business consistent with
past practice;
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(h) alter through merger, liquidation, reorganization, restructuring
or in any other fashion the corporate structure or ownership of any
Subsidiary of the Company;
(i) except as may be required as a result of a change in law or in
generally accepted accounting principles, change any of the accounting
principles or practices used by it;
(j) revalue any of its assets, including, without limitation, writing
down the value of its inventory or writing off notes or accounts
receivable, other than in the ordinary course of business;
(k) make any tax election or settle or compromise any material income
tax liability;
(l) settle or compromise any pending or threatened suit, action or
claim relating to the transactions contemplated hereby;
(m) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction in the ordinary course of
business of liabilities reflected or reserved against in, or contemplated
by, the financial statements (or the notes thereto) of the Company or
incurred in the ordinary course of business consistent with past practice;
(n) increase in any manner the compensation or fringe benefits of any
of its directors, officers and other key employees or pay any pension or
retirement allowance not required by any existing plan or agreement to any
such employees, or become a party to, amend or commit itself to any
pension, retirement, profit-sharing or welfare benefit plan or agreement or
employment agreement with or for the benefit of any employee, other than
increases in the compensation of employees who are not officers or
directors of the Company made in the ordinary course of business consistent
with past practice, or (except pursuant to the terms of preexisting plans
or agreements) accelerate the vesting of any compensation or benefit;
(o) except in connection with the exercise of its fiduciary duties by
the Board of Directors of the Company as set forth in Section 6.2, waive,
amend or allow to lapse any term or condition of any confidentiality or
"standstill" agreement to which the Company or any Subsidiary is a party;
or
(p) take, or agree in writing or otherwise to take, any of the
foregoing actions or any action which would make any of the representations
or warranties of the Company contained in this Agreement untrue or
incorrect as of the date when made.
Section 6.2 Acquisition Proposals. From and after the date of this
Agreement and prior to the Effective Time, except as provided below, the Company
agrees (a) that neither the Company nor its Subsidiaries shall, and the Company
shall direct and use its reasonable best efforts to cause its officers,
directors, employees and authorized agents and representatives (including,
without limitation, any investment banker, attorney or accountant retained by it
or any of its Subsidiaries) not to, initiate, solicit or encourage, directly or
indirectly, any inquiries or the making or implementation of any proposal or
offer (including, without limitation, any proposal or offer to its stockholders)
with respect to a merger, acquisition, consolidation or similar transaction
involving, or any purchase of, any equity securities or all or any significant
portion of the assets of, the Company or its Subsidiaries (any such proposal or
offer being hereinafter referred to as an "Acquisition Proposal") or engage in
any negotiations concerning, or provide any confidential information or data to,
or have any discussions with, any person or entity relating to an Acquisition
Proposal, or otherwise facilitate any effort or attempt to make or implement an
Acquisition Proposal; (b) that it will immediately cease and cause to be
terminated any existing activities, discussions or negotiations with any person
or entity conducted heretofore with respect to any of the foregoing and will
take the necessary steps to inform the person or entity referred to above of the
obligations undertaken in this Section 6.2; and (c) that it will notify Parent
immediately if any such inquiries or proposals are received by, any such
information is requested from, or any such negotiations or discussions are
sought to be initiated or continued with, it, but need not disclose the identity
of the other party or the terms of its proposals; provided, however, that
nothing contained in this Section 6.2 shall prohibit the Board of Directors of
the Company from (i) furnishing information to, or entering into discussions or
negotiations with, any person or entity that makes an unsolicited
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bona fide proposal in writing to engage in an Acquisition Proposal transaction
which the Board of Directors of the Company in good faith determines represents
a financially superior transaction for the stockholders of the Company as
compared to the Offer and the Merger if, and only to the extent that, (A) the
Board of Directors determines, after consultation with Skadden, Arps, Slate,
Meagher & Flom, that failure to take such action would be inconsistent with the
compliance by the Board of Directors with its fiduciary duties to stockholders
imposed by law, (B) prior to or concurrently with furnishing such information
to, or entering into discussions or negotiations with, such a person or entity,
the Company provides written notice to Parent to the effect that it is
furnishing information to, or entering into discussions or negotiations with,
such a person or entity, and (C) the Company keeps Parent informed of the status
(including the identity of such person or entity and terms of any proposal) of
any such discussions or negotiations; and (ii) to the extent applicable,
complying with Rule 14e-2 promulgated under the Exchange Act with regard to an
Acquisition Proposal. Nothing in this Section 6.02 shall (x) permit the Company
to terminate this Agreement, (y) permit the Company to enter into any agreement
with respect to an Acquisition Proposal during the term of this Agreement, or
(z) affect any other obligation of any party under this Agreement.
Section 6.3 Annual Meeting of Stockholders. The Company shall defer
and/or postpone the holding of its Annual Meeting of Stockholders (the "Company
Annual Meeting") indefinitely pending consummation of the Merger unless the
Company is otherwise required to hold the Company Annual Meeting by an order
from a court of competent jurisdiction.
Section 6.4 Conduct of Business of Sub Pending the Merger. During the
period from the date of this Agreement through the Effective Time, Sub shall not
engage in any activities of any nature except as provided in or contemplated by
this Agreement.
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1 Company Stockholder Approval; Proxy Statement. (a) If
approval or action in respect of the Merger by the stockholders of the Company
is required by applicable law, the Company shall (i) if appropriate, call a
meeting of its stockholders (the "Stockholder Meeting") for the purpose of
voting upon the Merger and shall use its reasonable best efforts to obtain
stockholder approval of the Merger, (ii) hold the Stockholder Meeting as soon as
practicable following the purchase of shares of Common Stock pursuant to the
Offer, and (iii) recommend to its stockholders the approval of the Merger
through its Board of Directors, but subject in each case to the fiduciary duties
of its Board of Directors under applicable law as determined by the Board of
Directors in good faith after consultation with Skadden, Arps, Slate, Meagher &
Flom. The record date for the Stockholder Meeting shall be a date subsequent to
the date Parent or Sub becomes a record holder of Common Stock purchased
pursuant to the Offer.
(b) If required by applicable law, the Company will, as soon as practicable
following the expiration of the Offer, prepare and file a preliminary Proxy
Statement or, if applicable, an Information Statement with the SEC with respect
to the Stockholder Meeting and will use its reasonable best efforts to respond
to any comments of the SEC or its staff and to cause the Proxy Statement to be
cleared by the SEC. The Company will notify Parent of the receipt of any
comments from the SEC or its staff and of any request by the SEC or its staff
for amendments or supplements to the Proxy Statement or for additional
information and will supply Parent with copies of all correspondence between the
Company or any of its representatives, on the one hand, and the SEC or its
staff, on the other hand, with respect to the Proxy Statement or the Merger. The
Company shall give Parent and its counsel the opportunity to review the Proxy
Statement prior to its being filed with the SEC and shall give Parent and its
counsel the opportunity to review all amendments and supplements to the Proxy
Statement and all responses to requests for additional information and replies
to comments prior to their being filed with, or sent to, the SEC. Each of the
Company and Parent agrees to use its reasonable best efforts, after consultation
with the other parties hereto, to respond promptly to all such comments of and
requests by the SEC. As promptly as practicable after the Proxy Statement has
been cleared by the SEC, the Company shall mail the Proxy Statement to the
stockholders of the Company. If at any time prior to the approval of this
Agreement by the Company's stockholders there shall occur any event that should
be set forth in an
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amendment or supplement to the Proxy Statement, the Company will prepare and
mail to its stockholders such an amendment or supplement.
(c) The Company shall use its reasonable best efforts to obtain the
necessary approvals by its stockholders of the Merger, this Agreement and the
transactions contemplated hereby.
(d) Parent agrees, subject to applicable law, to cause all shares of Common
Stock purchased pursuant to the Offer and all other shares of Common Stock owned
by Sub or any other Subsidiary or affiliate of Parent to be voted in favor of
the approval of the Merger.
Section 7.2 Access to Information; Confidentiality. The Company shall,
and shall cause each of its Subsidiaries to, afford to Parent, and to Parent's
accountants, counsel, financial advisers and other representatives, reasonable
access and permit them to make such inspections as they may reasonably require
during normal business hours during the period from the date of this Agreement
through the Effective Time to all their respective properties, books, contracts,
commitments and records and, during such period, the Company shall, and shall
cause each of its Subsidiaries to, furnish promptly to Parent (i) a copy of each
report, schedule, registration statement and other document filed by it during
such period pursuant to the requirements of federal or state laws and (ii) all
other information concerning its business, properties and personnel as Parent
may reasonably request. Except as required by Section 6.2, the Company shall not
be required to supply to Parent, or to Parent's accountants, counsel, financial
advisors or other representatives, any information relating to indications of
interest from, or discussions with, any other potential acquirors of the Company
which were received or conducted prior to the date hereof, except to the extent
necessary for use in the Offer Documents, the Schedule 14D-9 and the Proxy
Statement. The Confidentiality Agreement shall remain in effect, except as
modified as contemplated by this Agreement.
Section 7.3 Fees and Expenses. (a) Whether or not the Merger is
consummated, all costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such costs and expenses.
(b) The Company agrees that if this Agreement is terminated pursuant to (i)
Section 9.1(d)(i) or (iv) and at the time of such termination (x) the Minimum
Condition has not been satisfied and (y) an Acquisition Proposal existed; (ii)
Section 9.1(b)(ii); (iii) Section 9.1(c) and at the time of such termination an
Acquisition Proposal existed; or (iv) Section 9.1(a) or Section 9.1(d)(i) and at
the time of such termination any person, entity or group (as defined in Section
13(d)(3) of the Exchange Act) (other than Parent or any of its affiliates) shall
have become the beneficial owner of more than 20% of the outstanding shares of
Common Stock and such person, entity or group (or any affiliate of such person,
entity or group) thereafter shall consummate an Acquisition Proposal at any time
on or prior to the date which is six months after such termination of this
Agreement with a value per share of Common Stock of at least $36.00 (with
appropriate adjustments for reclassifications of capital stock, stock dividends,
stock splits, reverse stock splits and similar events), then the Company shall
pay to Parent the sum of (a) $5 million, plus (b) the amount of all documented
costs and expenses (not to exceed $2.5 million) incurred by Parent, Sub or their
affiliates in connection with this Agreement or the transactions contemplated
hereby. Such payment shall be made as promptly as practicable but in no event
later than two business days following termination of this Agreement pursuant to
the immediately preceding sentence, or, in the case of clause (iv) of the
immediately preceding sentence, upon consummation of such Acquisition Proposal,
and shall be made by wire transfer of immediately available funds to an account
designated by Parent. If the Company fails to pay such amount when due in
accordance with the immediately preceding sentence, Parent shall be entitled to
the payment from the Company, in addition to such amount, of any legal fees and
expenses incurred in collecting such amount and interest thereon at the rate of
10% per annum.
Section 7.4 Company Stock Options. (a) The Company shall (i) terminate
the Stock Plans immediately prior to the Effective Time without prejudice to the
holders of Company Stock Options (as hereinafter defined) and (ii) grant no
additional Company Stock Options after the date hereof.
(b) At the Effective Time (i) each outstanding option to purchase shares of
Common Stock (including options granted to directors of the Company, each, a
"Company Stock Option") granted under the Stock
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Plans, whether or not exercisable, and whether or not vested, shall become fully
exercisable and vested and (ii) each Company Stock Option which is then
outstanding shall be canceled. In consideration of such cancellation, the
Surviving Corporation shall deliver on or promptly after the Effective Time to
each holder thereof cash in an amount per share subject to such canceled Company
Stock Option equal to the excess of the Merger Consideration over the exercise
price per share of such Company Stock Option. The Company shall use its best
efforts to cause each holder of a Company Stock Option to execute an agreement
with the Company, prior to the Effective Time, consenting to the payment
described in the preceding sentence as consideration for the cancellation of any
Company Stock Options held by such holder. No payment shall be made by the
Surviving Corporation with respect to any Company Stock Option having an
exercise price equal or greater than the Merger Consideration. The committee
that administers each of the Stock Plans shall determine and take all necessary
action so that the right to receive the cash consideration referred to in this
Section 7.4(b) shall be the only right of each holder of a Company Stock Option
on and after the Effective Time.
Section 7.5. Performance Shares. (a) The Company shall (i) terminate the
Company's 1988 Performance Share Plan (the "Performance Share Plan") immediately
prior to the Effective Time and without prejudice to the holders of Performance
Shares (as defined in the Performance Share Plan) and (ii) grant no additional
Performance Shares from and after the date hereof.
(b) At the Effective Time, all outstanding Performance Shares shall be
cancelled and all Performance Awards (as defined in the Performance Share Plan)
shall be deemed 100 percent earned for the relevant Performance Period and shall
be paid in cash by the Surviving Corporation as soon as practicable after the
Effective Time.
Section 7.6 Reasonable Best Efforts. Upon the terms and subject to the
conditions set forth in this Agreement, each of the parties agrees to use its
reasonable best efforts to take, or cause to be taken, all actions (including
entering into transactions), and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger, and the other transactions contemplated by this
Agreement, including (a) the prompt making of their respective filings and
thereafter the making of any other required submission under the Improvements
Act with respect to the Offer and the Merger, (b) the obtaining of all
additional necessary actions or non-actions, waivers, consents and approvals
from Governmental Entities and the making of all necessary registrations and
filings (including filings with Governmental Entities) and the taking of all
reasonable steps as may be necessary to obtain an approval or waiver from any
Governmental Entity, (c) the obtaining of all necessary consents, approvals or
waivers from third parties, (d) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement or
the consummation of the transactions contemplated hereby, including seeking to
have any stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed, and (e) the execution and delivery of
any additional instruments necessary to consummate the transactions contemplated
by this Agreement; provided, however, that neither Parent, Sub nor the Company
shall be required to take any action pursuant to clauses (b), (c), (d) or (e)
above that would in any event have a Material Adverse Effect on either Parent or
the Company; and provided, further, however, that neither Parent, Sub nor any of
their affiliates shall be required to enter into any transaction or take any
other action that would require a waiver of, or that is inconsistent with
satisfaction of, the conditions of the Offer set forth in clauses (a)(iii), (iv)
or (v) in Exhibit A hereto.
Section 7.7 Public Announcements. Parent and Sub, on the one hand, and
the Company, on the other hand, will consult with each other before issuing any
press release or otherwise making any public statements with respect to the
transactions contemplated by this Agreement, and shall not issue any such press
release or make any such public statement prior to such consultation, except as
may be required by applicable law or by obligations pursuant to any listing
agreement with any national securities exchange.
Section 7.8 Indemnification; Directors and Officers Insurance. (a) From
and after the Effective Time, Parent agrees to, and to cause the Surviving
Corporation to, indemnify and hold harmless all past and present officers,
directors, employees and agents (the "Indemnified Parties") of the Company and
of its Subsidiaries
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to the full extent such persons may be indemnified by the Company pursuant to
the Company's Certificate of Incorporation and Bylaws as in effect as of the
date hereof for acts and omissions occurring at or prior to the Effective Time
and shall advance reasonable litigation expenses incurred by such persons in
connection with defending any action arising out of such acts or omissions,
provided that such persons provide the requisite affirmations and undertaking,
as set forth in the Company's Bylaws as in effect prior to the Effective Time.
(b) Any Indemnified Party will promptly notify Parent and the Surviving
Corporation of any claim, action, suit, proceeding or investigation for which
such party may seek indemnification under this Section; provided, however, that
the failure to furnish any such notice shall not relieve Parent or the Surviving
Corporation from any indemnification obligation under this Section except to the
extent Parent or the Surviving Corporation is prejudiced thereby. In the event
of any such claim, action, suit, proceeding, or investigation, (x) the Surviving
Corporation will have the right to assume the defense thereof, and the Surviving
Corporation will not be liable to such Indemnified Parties for any legal
expenses of other counsel or any other expenses subsequently incurred thereafter
by such Indemnified Parties in connection with the defense thereof, except that
all Indemnified Parties (as a group) will have the right to retain one separate
counsel, reasonably acceptable to such Indemnified Party and Parent, at the
expense of the indemnifying party if the named parties to any such proceeding
include both the Indemnified Party and the Surviving Corporation and the
representation of such parties by the same counsel would be inappropriate due to
a conflict of interest between them, (y) the Indemnified Parties will cooperate
in the defense of any such matter, and (z) the Surviving Corporation will not be
liable for any settlement effected without its prior written consent. In
addition, Parent will provide, or cause the Surviving Corporation to provide,
for a period of not less than six years after the Effective Time, the Company's
current directors and officers an insurance and indemnification policy that
provides coverage for events occurring at or prior to the Effective Time (the
"D&O Insurance") that is no less favorable than the existing policy or, if
substantially equivalent insurance coverage is unavailable, the best available
coverage; provided, however, that Parent and the Surviving Corporation shall not
be required to pay an annual premium for the D&O Insurance in excess of
$105,000, but in such case shall purchase as much such coverage as possible for
such amount.
(c) This Section 7.8 is intended to benefit the Indemnified Parties and
shall be binding on all successors and assigns of Parent, Sub, the Company and
the Surviving Corporation. Parent hereby guarantees the performance by the
Surviving Corporation of the indemnified obligations pursuant to this Section
7.8.
Section 7.9 Employees. (a) To the extent permitted by law, for a period
of one year following the Effective Time, Parent shall cause the Surviving
Corporation to provide the current and former non-union employees of the Company
and its Subsidiaries employee benefits no less favorable, in aggregate value,
than those provided by the Company on the date hereof to those employees, it
being understood that (i) neither Parent nor the Surviving Corporation will be
obligated to provide an employee stock ownership plan to such employees or to
continue any one or more of such benefits, (ii) that for purposes of this
Section 7.9 "employee benefits" include benefits provided under any "employee
benefit plan" (as defined under section 3(3) of ERISA) of the Company and its
Subsidiaries but do not include benefits or compensation provided under the
Individual Agreements referenced in Section 7.9(b) herein, and (iii) neither
Parent nor the Surviving Corporation will be obligated to provide any benefits
which are payable pursuant to a "change in control", except as otherwise
provided in this Agreement.
(b) Parent and the Surviving Corporation hereby agree to honor (without
modification) and assume the employment agreements, severance agreements and
individual benefit arrangements listed on the Company Disclosure Letter, all as
in effect at the Effective Time (the "Individual Agreements"), but neither
Offeror nor Surviving Corporation shall have any obligation to enter into any
new or replacement employment agreements, severance agreements, or individual
benefit agreements with any employee, officer or director. The Surviving
Corporation shall pay for customary out placement services to any executive
officer of the Company whose employment is terminated by the Surviving
Corporation and who is entitled to payments under an existing severance
agreement, on the same basis as out placement services are provided to executive
officers of the Parent or its Subsidiaries of a comparable level.
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Section 7.10 Board Representation. (a) Promptly upon the purchase of
shares of Common Stock pursuant to the Offer, Parent shall be entitled to
designate such number of directors, rounded up to the next whole number, on the
Board of Directors of the Company as will give Parent, subject to compliance
with Section 14(f) of the Exchange Act, representation on the Board of Directors
equal to the product of (a) the total number of directors on the Board of
Directors and (b) the percentage that the number of shares of Common Stock
purchased by Parent bears to the number of shares of Common Stock outstanding,
and the Company shall, upon request by Parent, promptly increase the size of the
Board of Directors and/or exercise its reasonable best efforts to secure the
resignations of such number of directors as is necessary to enable Parent's
designees to be elected to the Board of Directors and shall cause Parent's
designees to be so elected. The Company shall take, at its expense, all action
required pursuant to Section 14(f) and Rule 14f-1 in order to fulfill its
obligations under this Section 7.10 and shall include in the Schedule 14D-9 or
otherwise timely mail to its stockholders such information with respect to the
Company and its officers and directors as is required by Section 14(f) and Rule
14f-1 in order to fulfill its obligations under this Section 7.10. Parent will
supply to the Company in writing and be solely responsible for any information
with respect to itself and its nominees, officers, directors and affiliates
required by Section 14(f) and Rule 14f-1.
(b) Following the election of designees of Sub pursuant to this Section
7.10, prior to the Effective Time, any amendment of this Agreement or the
Certificate of Incorporation or By-Laws of the Company, any termination of this
Agreement by the Company, any extension by the Company of the time for the
performance of any of the obligations or other acts of Parent or Sub or waiver
of any of the Company's rights hereunder shall require the concurrence of a
majority of the directors of the Company then in office who are directors as of
the date hereof or persons designated by such directors and neither were
designated by Sub nor are employees of the Company ("Continuing Directors").
Prior to the Effective Time, the Company and Sub shall use all reasonable
efforts to ensure that the Company's Board of Directors at all times includes at
least three Continuing Directors.
Section 7.11 Notification of Certain Matters. The Company shall give
prompt notice to Parent and Sub, and Parent and Sub shall give prompt notice to
the Company, of (i) the occurrence or nonoccurrence of any event the occurrence
or nonoccurrence of which would be likely to cause any representation or
warranty contained in this Agreement to be untrue or inaccurate in any material
respect at or prior to the Effective Time and (ii) any material failure of the
Company, Parent or Sub, as the case may be, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, that the delivery of any notice pursuant to this Section
7.10 shall not cure such breach or non-compliance or limit or otherwise affect
the remedies available hereunder to the party receiving such notice.
Section 7.12 Okabe. The Company shall use its reasonable efforts to
encourage Okabe Company Limited to tender its shares of Common Stock to Sub in
the Offer.
Section 7.13 Nagoya Notification. Promptly following the date hereof, the
Company shall notify Nagoya Screw Manufacturing Co. Ltd. ("Nagoya") of the
transactions contemplated by this Agreement in accordance with Section 6.2 of
the Joint Venture Agreement dated as of June 14, 1989 between the Company and
Nagoya.
ARTICLE VIII
CONDITIONS PRECEDENT
Section 8.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) Stockholder Approval. If approval of the Merger by the holders of
the Common Stock is required by applicable law, the Merger shall have been
approved by the requisite vote of such holders.
(b) No Order. No Governmental Entity or court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered
any law, rule, regulation, executive order, decree or injunction
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which prohibits or has the effect of prohibiting the consummation of the
Merger; provided, however, that, prior to invoking this provision, the
Company, Parent and Sub shall use their reasonable best efforts (subject to
the other terms and conditions of this Agreement) to have any such order,
decree or injunction vacated.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
Section 9.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after any approval by the
stockholders of the Company:
(a) by mutual written consent of Parent and the Company;
(b) by the Company if:
(i) the Offer has not been timely commenced (except as a result of
actions or omissions by the Company) in accordance with Section 1.1(a);
or
(ii) there is an Acquisition Proposal which the Board of Directors
of the Company in good faith determines represents a financially
superior transaction for the stockholders of the Company as compared to
the Offer and the Merger and the Board of Directors of the Company
determines, after consultation with Skadden, Arps, Slate, Meagher &
Flom, that failure to terminate this Agreement would be inconsistent
with the compliance by the Board of Directors with its fiduciary duties
to stockholders imposed by law; provided, however, that the right to
terminate this Agreement pursuant to this clause shall not be available
(i) if the Company has breached in any material respect its obligations
under Section 6.2, or (ii) if, prior to or concurrently with any
purported termination pursuant to this clause, the Company shall not
have paid the fee contemplated by Section 7.3(b); and, in each case,
unless the Company has provided Parent and Sub with one business day's
prior written notice of its intent to so terminate this Agreement
together with a summary of the material terms and conditions of such
offer; or
(iii) there has been a breach by Parent or Sub of any
representation or warranty that would have a material adverse effect on
Parent's or Sub's ability to perform its obligations under this
Agreement and which breach has not been cured within twenty business
days following receipt by Parent or Sub of notice of the breach; or
(iv) Parent or Sub fails to comply in any material respect with any
of its material obligations or covenants contained herein, including,
without limitation, the obligation of Sub to purchase shares of Common
Stock pursuant to the Offer, unless such failure results from a breach
of the Company of any obligation, representation, or warranty hereunder,
which has not been cured within twenty business days following Company's
receipt of notice of the breach;
(c) by Parent if the Board of Directors of the Company shall have
failed to recommend, or shall have withdrawn, modified or amended in any
material respect its approval or recommendations of the Offer or the Merger
or shall have resolved to do any of the foregoing; or
(d) by either Parent or the Company if:
(i) the Merger has not been effected on or prior to the close of
business on March 31, 1996; provided, however, that the right to
terminate this Agreement pursuant to this clause shall not be available
(y) to Parent if Sub or any affiliate of Sub acquires shares of Common
Stock pursuant to the Offer, or (z) to any party whose failure to
fulfill any obligation of this Agreement has been the cause of, or
resulted in, the failure of the Merger to have occurred on or prior to
the aforesaid date; or
(ii) any court of competent jurisdiction or any governmental,
administrative or regulatory authority, agency or body shall have issued
an order, decree or ruling or taken any other action
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permanently enjoining, restraining or otherwise prohibiting the
transactions contemplated by this Agreement and such order, decree,
ruling or other action shall have become final and nonappealable; or
(iii) upon a vote at a duly held meeting or upon any adjournment
thereof, the stockholders of the Company shall have failed to give any
approval required by applicable law; or
(iv) as the result of the failure of any of the conditions set
forth in Exhibit A hereto, the Offer shall have terminated or expired in
accordance with its terms without Sub having purchased any shares of
Common Stock pursuant to the Offer; provided, however, that the right to
terminate this Agreement pursuant to this Section 9.1(d)(iv) shall not
be available to any party whose failure to fulfill any of its
obligations under this Agreement results in the failure of any such
condition.
Section 9.2 Effect of Termination. In the event of termination of this
Agreement by either Parent or the Company, as provided in Section 9.1, this
Agreement shall forthwith become void and there shall be no liability hereunder
on the part of the Company, Parent or Sub or their respective officers or
directors (except as set forth in the last sentence of Section 7.2 and except
for Section 7.3, which shall survive the termination); provided, however, that
nothing contained in this Section 9.2 shall relieve any party hereto from any
liability for any breach of this Agreement.
Section 9.3 Amendment. This Agreement may be amended by the parties
hereto, by or pursuant to action taken by their respective Boards of Directors,
at any time before or after any approval of the Merger by the stockholders of
the Company but, after the purchase of shares of Common Stock pursuant to the
Offer, no amendment shall be made which decreases the Merger Consideration or
which in any way materially adversely affects the rights of such stockholders,
without the further approval of such stockholders. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
Section 9.4 Waiver. At any time prior to the Effective Time, the parties
hereto may (i) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any of the agreements or
conditions contained herein which may legally be waived. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party.
Section 9.5 Procedure for Termination, Amendment or Waiver. A termination
of this Agreement pursuant to Section 9.1, an amendment of this Agreement
pursuant to Section 9.3 or a waiver pursuant to Section 9.4 shall, in order to
be effective, require (a) in the case of Parent or Sub, action by its Board of
Directors or the duly authorized designee of its Board of Directors and (b) in
the case of the Company, action by its Board of Directors.
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Non-Survival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the termination of this Agreement in
accordance with Article IX or the Effective Time; provided, however, that
termination of this Agreement shall not relieve any party hereto from any
liability for any knowing or willful breach by such party of its representations
or warranties.
Section 10.2 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally, sent by
overnight courier or telecopied (with a confirmatory copy sent by
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overnight courier) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Parent or Sub, to:
Textron Inc.
40 Westminster Street
Providence, RI 02903
Attn: Executive Vice President
and General Counsel
Fax: 401-457-3666
with a copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attn: Charles M. Nathan, Esq.
Fax: 212-859-4000
(b) if to the Company, to:
Elco Industries, Inc.
1111 Samuelson Road
P.O. Box 7009
Rockford, Illinois 61125
Attn: John Lutz, Chief Executive Officer
Fax: 815-395-8270
with a copy to:
Skadden, Arps, Slate, Meagher & Flom
333 W. Wacker Drive
Chicago, Illinois 60606
Attn: William R. Kunkel, Esq.
Fax: 312-407-0411
Section 10.3 Interpretation. When a reference is made in this Agreement
to a Section, such reference shall be to a Section of this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." As used in this Agreement, "business
day" shall have the meaning ascribed thereto in Rule 14d-1(c)(6) under the
Exchange Act.
Section 10.4 Counterparts. This Agreement may be executed in
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
Section 10.5 Entire Agreement; No Third-Party Beneficiaries. This
Agreement, including the documents and instruments referred to herein, (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and (b) except for the provisions of Section 7.8, is not
intended to confer upon any person other than the parties any rights or remedies
hereunder.
Section 10.6 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
24
<PAGE> 28
Section 10.7 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, except that Sub may
assign, in its sole discretion, any of or all its rights, interests and
obligations under this Agreement to Parent or to any direct or indirect wholly
owned subsidiary of Parent, but no such assignment shall relieve Sub of any of
its obligations hereunder. Subject to the preceding sentence, this Agreement
shall be binding upon, inure to the benefit of, and be enforceable by, the
parties and their respective successors and assigns.
Section 10.8 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby are not affected in any manner
materially adverse to any party.
Section 10.9 Enforcement of this Agreement. The parties agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
Section 10.10 Incorporation of Exhibits. The Company Disclosure Letter
and all Exhibits and annexes attached hereto and referred to herein are hereby
incorporated herein and made a part hereof for all purposes as if fully set
forth herein.
25
<PAGE> 29
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement
to be signed by their respective officers thereunto duly authorized all as of
the date first written above.
TEXTRON INC.
By: /s/ HERBERT L. HENKEL
------------------------------------
Name: Herbert L. Henkel
Title: Group Vice President
E.I. TEXTRON INC.
By: /s/ ARNOLD M. FRIEDMAN
------------------------------------
Name: Arnold M. Friedman
Title: Vice President
ELCO INDUSTRIES, INC.
By: /s/ JOHN C. LUTZ
------------------------------------
Name: John C. Lutz
Title: President
26
<PAGE> 30
EXHIBIT A
CONDITIONS OF THE OFFER
Notwithstanding any other term of the Offer or this Agreement, Sub shall
not be required to accept for payment or pay for, subject to any applicable
rules and regulations of the SEC, including Rule 14e-1(c) of the Exchange Act,
any shares of Common Stock not theretofore accepted for payment or paid for and
may terminate or amend the Offer as to such shares of Common Stock unless (i)
there shall have been validly tendered and not withdrawn prior to the expiration
of the Offer that number of shares of Common Stock which would represent at
least 66 2/3% of the outstanding shares of Common Stock on a fully diluted basis
(the "Minimum Condition"), and (ii) any waiting period under the Improvements
Act applicable to the purchase of shares of Common Stock pursuant to the Offer
shall have expired or been terminated. Furthermore, notwithstanding any other
term of the Offer or this Agreement, Sub shall not be required to accept for
payment or, subject as aforesaid, to pay for any shares of Common Stock not
theretofore accepted for payment or paid for, and may terminate or amend the
Offer if at any time on or after the date of this Agreement and before the
acceptance of such shares of Common Stock for payment or the payment therefor,
any of the following conditions exist or shall occur and remain in effect:
(a) there shall have been instituted, pending or threatened any action
or proceeding by any court or other Governmental Entity, which (i) seeks to
challenge the acquisition by Parent or Sub (or any of its affiliates) of
shares of Common Stock pursuant to the Offer, restrain, prohibit or delay
the making or consummation of the Offer or the Merger, or obtain damages in
connection therewith in an amount which would have a Material Adverse
Effect on the Company, (ii) seeks to make the purchase of or payment for
some or all of the shares of Common Stock pursuant to the Offer or the
Merger illegal, (iii) seeks to impose limitations on the ability of Parent
(or any of its affiliates) effectively to acquire or hold, or to require
Parent or the Company or any of their respective affiliates or subsidiaries
to dispose of or hold separate, any portion of the assets or the business
of Parent and its affiliates or any material portion of the assets or the
business of the Company and its Subsidiaries taken as a whole, (iv) seeks
to impose material limitations on the ability of Parent (or its affiliates)
to exercise full rights of ownership of the shares of Common Stock
purchased by it, including, without limitation, the right to vote the
shares purchased by it on all matters properly presented to the
stockholders of the Company, or (v) seeks to restrict any future business
activity by Parent (or any of its affiliates), including, without
limitation, requiring the prior consent of any person or entity (including
any Governmental Entity) to future transactions by Parent (or any of its
affiliates); or
(b) there shall have been promulgated, enacted, entered, enforced or
deemed applicable to the Offer or the Merger, by any state, federal or
foreign Governmental Entity or by any court, domestic or foreign, any
statute, rule, regulation, judgment, decree, order or injunction, that is
reasonably likely to directly or indirectly result in any of the
consequences referred to in clauses (i) through (v) of subsection (a)
above; or
(c) the Merger Agreement shall have been terminated in accordance with
its terms; or
(d) any of the representations and warranties made by the Company in
the Merger Agreement shall not have been true and correct in all material
respects when made, or shall thereafter have ceased to be true and correct
in all material respects as if made as of such later date (other than
representations and warranties made as of a specified date), or the Company
shall not in all material respects have performed each obligation and
agreement and complied with each covenant to be performed and complied with
by it under the Merger Agreement; or
(e) the Company's Board of Directors shall have modified or amended
its recommendation of the Offer in any manner adverse to Parent or shall
have withdrawn its recommendation of the Offer, or shall have recommended
acceptance of any Acquisition Proposal or shall have resolved to do any of
the foregoing; or
(f) (i) any corporation, entity or "group" (as defined in Section
13(d)(3) of the Exchange Act) ("person"), other than Parent, shall have
acquired beneficial ownership of more than 20% (or, in the case
27
<PAGE> 31
of Okabe and its affiliates, 21%) of the outstanding shares of Common
Stock, or shall have been granted any options or rights, conditional or
otherwise, to acquire a total of more than 20% of the outstanding shares of
Common Stock; (ii) any new group shall have been formed which beneficially
owns more than 20% (or, in the case of Okabe and its affiliates, 21%) of
the outstanding shares of Common Stock; or (iii) any person (other than
Parent or one or more of its affiliates) shall have entered into an
agreement in principle or definitive agreement with the Company with
respect to a tender or exchange offer for any shares of Common Stock or a
merger, consolidation or other business combination with or involving the
Company.
The foregoing conditions are for the sole benefit of Parent and Sub and may
be asserted by Parent or Sub regardless of the circumstances giving rise to any
such condition and may be waived by Parent or Sub, in whole or in part, at any
time and from time to time, in the sole discretion of Parent. The failure by
Parent or Sub at any time to exercise any of the foregoing rights will not be
deemed a waiver of any right, the waiver of such right with respect to any
particular facts or circumstances shall not be deemed a waiver with respect to
any other facts or circumstances, and each right will be deemed an ongoing right
which may be asserted at any time and from time to time.
Should the Offer be terminated pursuant to the foregoing provisions, all
tendered shares of Common Stock not theretofore accepted for payment shall
forthwith be returned by the Paying Agent to the tendering stockholders.
28
<PAGE> 1
Exhibit (b)(3)
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS AMENDMENT is dated as of the 1st day of July, 1995 (the "Second
Amendment") among TEXTRON INC., a Delaware corporation (including its successors
and assigns as permitted by the Credit Agreement as defined below, "Company"),
THE LENDERS LISTED ON THE SIGNATURE PAGES HEREOF (individually referred to
herein as a "Lender" and collectively as "Lenders"), and BANKERS TRUST COMPANY
("Bankers"), as Administrative Agent for Lenders ("Agent").
RECITALS
WHEREAS, Company, the lenders listed therein and Agent entered into a
credit agreement dated as of November 1, 1993, as amended on October 30, 1994
("Credit Agreement"); and
WHEREAS, Company, Lenders and Agent desire to further amend the Credit
Agreement;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Lenders and Agent agree as
follows:
1. Section 1.1 of the Credit Agreement is hereby amended by the
deletion of the final sentence of the definition "Total Commitment" and by the
substitution of the following therefor:
"The amount of the Total Commitment is $1,500,000,000."
2. Section 1.1 of the Credit Agreement is hereby further amended by the
deletion of the definition "Line of Credit" in its entirety.
3. Section 2.6 of the Credit Agreement is hereby amended by the
deletion of the words "364 days" in each of line 6, line 5 of subsection (i),
and line 7 of subsection (ii) thereof, and by the substitution of "one year"
therefor.
<PAGE> 2
4. Subsection 2.7A(i)(a) of the Credit Agreement is hereby deleted in
its entirety and the following substituted therefor:
"(a) Each Eurodollar Rate Loan shall bear interest on the
unpaid principal amount thereof for the applicable Interest Period at
an interest rate per annum equal to the sum of the Applicable Margin
plus the applicable Adjusted Eurodollar Rate. The "Applicable Margin"
for any Interest Period means the applicable percentage amount set
forth in the table below based upon the rating issued by Standard &
Poor's Corporation and Moody's Investors Service, Inc. for the
Company's long-term unsecured indebtedness at the Interest Rate
Determination Date for such Interest Period:
<TABLE>
<CAPTION>
Rating Category* Applicable Margin
---------------- -----------------
<S> <C>
A/A2 or higher .1800%
A-/A3 .2200%
BBB+/Baa1 .2325%
BBB/Baa2 .2750%
BBB-/Baa3 or lower .3500%
or no rating
</TABLE>
---------------
* In the case of "split" ratings (i.e., if the ratings of each such
rating agency differ by one or more categories, including numerical
modifiers and (+) and (-) as categories), the Applicable Margin will be
based upon the higher of the two ratings."
5. Subsection 2.8A(i) of the Credit Agreement is hereby deleted in its
entirety and the following substituted therefor:
"(A) Facility Fees. (i) The Company shall pay to the Agent for the
account of the Banks a facility fee as set forth in the table
below, accrued from and including the Effective Date to and
including the Final Maturity Date, on the daily average
aggregate amount of the Commitments (whether used or unused)
based upon the rating issued by Standard & Poor's Corporation
and Moody's Investors Service, Inc. for the Company's long-term
-2-
<PAGE> 3
unsecured indebtedness at the beginning of each fiscal quarter
of the Company:
<TABLE>
<CAPTION>
Rating Category* Facility Fee
------------------ ------------
<S> <C>
A/A2 or higher .0900%
A-/A3 .1100%
BBB+/Baa1 .1500%
BBB/Baa2 .1750%
BBB-/Baa3 or lower .2000%
or no rating
</TABLE>
---------------
* In the case of "split" ratings (i.e., if the ratings of each such
rating agency differ by one or more categories, including numerical
modifiers and (+) and (-) as categories), the facility fee will be
based upon the higher of the two ratings."
6. The Final Maturity Date is hereby extended to July 1, 2000 and the
Facility Extension Date is hereby extended to July 1, 1996.
7. The references to "$1,250,000,000" in Exhibit A-2 (Form of
Competitive Bid Note) to the Credit Agreement are hereby amended to read
"$1,500,000,000."
8. The execution and delivery of this Second Amendment by the Company
is deemed a certification by the Company that (i) the representations and
warranties set forth in Section 4 of the Credit Agreement, as amended by this
Second Amendment, are true and correct on and as of the date hereof as if made
on and as of the date hereof, (ii) there exists no Event of Default or Potential
Event of Default on and as of the date hereof, (iii) between October 30, 1994
and July 1, 1995 there have been no changes in generally accepted accounting
principles which have had a material effect on the Company's financial
condition, and (iv) the Company has full power, authority and legal right to
execute, and deliver, and perform its obligations under, this Second Amendment.
9. This Second Amendment shall not constitute a consent or waiver to or
modification of any other provision, term or condition of the Credit Agreement.
All terms, provisions, covenants, representations, warranties, agreements and
conditions contained in the Credit Agreement, as amended hereby, shall remain in
full force and effect.
-3-
<PAGE> 4
10. As permitted by Section 10.16 of the Credit Agreement, this Second
Amendment may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed an original, but all such counterparts together shall constitute
but one and the same instrument. This Second Amendment shall be deemed effective
as of July 1, 1995, subject to:
(a) the prior execution of a counterpart of this Second
Amendment by each of the parties hereto and delivery of copies hereof
to Company and Agent,
(b) the prior execution and delivery by the Company to each
Bank of a new Revolving Note, substantially in the form of Exhibit A
annexed hereto and, in accordance with Section 2.4A of the Credit
Agreement, drawn to the order of such Bank and with appropriate
insertions, and
(c) the execution and delivery to the Agent of the favorable
written opinion of Wayne W. Juchatz, Esq., Executive Vice President and
General Counsel of the Company, dated as of July 1, 1995, substantially
in the form of Exhibit B annexed hereto; the Company, by its execution
of this Second Amendment expressly instructs such counsel to prepare
such opinion and deliver it to the Agent for the benefit of the Banks
and such opinion shall contain a statement to that effect.
11. All interest, fees and other amounts accruing under the Credit
Agreement on or prior to, or determined in respect of any day accruing on or
prior to July 1, 1995 shall be computed and determined as provided in this
Agreement before giving effect to this Second Amendment.
12. THIS SECOND AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS.
WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first above written.
-4-
<PAGE> 5
Borrower
TEXTRON INC.
By: /s/ B.T. DOWNING
-----------------
Title: Vice President
and Treasurer
-5-
<PAGE> 6
THE FIRST NATIONAL BANK OF BOSTON
BY: /s/ CAROL A. LOVELL
------------------
NAME: CAROL A. LOVELL
TITLE: DIRECTOR
COMMITMENT: $61,842,110
PRO RATA SHARE: 4.1228%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 7
CHEMICAL BANK
BY: /S/ JAMES B. TREGER
--------------------
NAME: JAMES B. TREGER
TITLE: VICE PRESIDENT
COMMITMENT: $84,210,550
PRO RATA SHARE: 5.6140%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 8
NATIONSBANK
BY: /S/ GEORGE F. VAN
-----------------------
NAME: GEORGE F. VAN
TITLE: SENIOR VICE PRESIDENT
COMMITMENT: $82,894,710
PRO RATA SHARE: 5.5263%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 9
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION
BY: /S/MICHAEL J. ROWAN
-------------------
NAME: MICHAEL J. ROWAN
TITLE: VICE PRESIDENT
COMMITMENT: $78,947,400
PRO RATA SHARE: 5.2632%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 10
FIRST NATIONAL BANK OF CHICAGO
BY: /S/ THOMAS M. HARKLESS
----------------------
NAME: THOMAS M. HARKLESS
TITLE: VICE PRESIDENT
COMMITMENT: $78,947,400
PRO RATA SHARE: 5.2632%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 11
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
BY: /S/ADAM J. SILVER
------------------
NAME: ADAM J. SILVER
TITLE: ASSOCIATE
COMMITMENT: $78,947,400
PRO RATA SHARE: 5.2632%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 12
THE BANK OF NEW YORK
BY: /S/DAVID C. JUDGE
------------------
NAME: DAVID C. JUDGE
TITLE: VICE PRESIDENT
COMMITMENT: $59,210,550
PRO RATA SHARE: 3.9474%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 13
THE CHASE MANHATTAN BANK, N.A.
BY: /S/ROBERT DUNBAR, JR.
---------------------
NAME: ROBERT DUNBAR, JR.
TITLE: VICE PRESIDENT
COMMITMENT: $59,210,550
PRO RATA SHARE: 3.9474%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 14
CIBC INC.
BY: /S/W. BARRIE ANDERSON
---------------------
NAME: W. BARRIE ANDERSON
TITLE: VICE PRESIDENT
COMMITMENT: $59,210,550
PRO RATA SHARE: 3.9474%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 15
CITIBANK, N.A.
BY: /S/W. MARTENS
--------------------
NAME: W. MARTENS
TITLE: MANAGING DIRECTOR
COMMITMENT: $59,210,550
PRO RATA SHARE: 3.9474%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 16
DEUTSCHE BANK AG, NEW YORK BRANCH
BY: /S/JAMES FOX
---------------------------
NAME: JAMES FOX
TITLE: ASSISTANT VICE PRESIDENT
BY: /S/GREGORY M. HILL
------------------
NAME: GREGROY M. HILL
TITLE: VICE PRESIDENT
COMMITMENT: $59,210,550
PRO RATA SHARE: 3.9474%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 17
ROYAL BANK OF CANADA
BY: /S/MICHAEL CORINE
------------------
NAME: MICHAEL CORINE
TITLE: SENIOR MANAGER
COMMITMENT: $59,210,550
PRO RATA SHARE: 3.9474%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 18
SWISS BANK CORPORATION
BY: /S/SUSAN N. ISQUITH
-------------------------
NAME: SUSAN N. ISQUITH
TITLE: DIRECTOR
CREDIT RISK MANAGEMENT
BY: /S/EDWARD J. MCDONNELL III
---------------------------------
NAME: EDWARD J. MCDONNELL III
TITLE: ASSOCIATE DIRECTOR
INTERNATIONAL FINANCE DIVISION
COMMITMENT: $59,210,550
PRO RATA SHARE: 3.9474%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 19
ABN-AMRO BANK, N.V.
BY: /S/JAMES E. DAVIS
-------------------
NAME: JAMES E. DAVIS
TITLE: VICE PRESIDENT
BY: /S/CHARLES J. WAHLE
-----------------------------
NAME: CHARLES J. WAHLE
TITLE: ASSISTANT VICE PRESIDENT
COMMITMENT: $55, 263,166
PRO RATA SHARE: 3.6842%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 20
BANKERS TRUST COMPANY
BY: /S/EDWARD G. BENEDICT
---------------------
NAME: EDWARD G. BENEDICT
TITLE: VICE PRESIDENT
COMMITMENT: $69,736,850
PRO RATA SHARE: 4.6491%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 21
FLEET NATIONAL BANK
BY: /S/TIMOTHY J. MCCORMICK
-----------------------
NAME: TIMOTHY J. MCCORMICK
TITLE: VICE PRESIDENT
COMMITMENT: $48,684,160
PRO RATA SHARE: 3.2456%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 22
BANQUE PARIBAS
BY: /S/STANLEY P. BERKMAN
------------------------
NAME: STANLEY P. BERKMAN
TITLE: SENIOR VICE PRESIDENT
BY: /S/JOHN J. MCCORMICK, III
---------------------------
NAME: JOHN J. MCCORMICK, III
TITLE: ASSISTANT VICE PRESIDENT
COMMITMENT: $39,210,550
PRO RATA SHARE: 2.6140%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 23
FIRST INTERSTATE BANK OF CALIFORNIA
BY: /S/PETER G. OLSON
------------------------
NAME: PETER G. OLSON
TITLE: SENIOR VICE PRESIDENT
BY: /S/WENDY V.C. PURCELL
---------------------------
NAME: WENDY V.C. PURCELL
TITLE: ASSISTANT VICE PRESIDENT
COMMITMENT: $35,526,315
PRO RATA SHARE: 2.3684%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 24
MELLON BANK, N.A.
BY: /S/JOSEPH T. MCDONALD, JR.
--------------------------
NAME: JOSEPH T. MCDONALD, JR.
TITLE: VICE PRESIDENT
COMMITMENT: $34,210,550
PRO RATA SHARE: 2.2807%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 25
CREDIT SUISSE
BY: /S/JUERG JOHNER
---------------
NAME: JUERG JOHNER
TITLE: ASSOCIATE
BY: /S/MICHAEL C. MAST
--------------------------------
NAME: MICHAEL C. MAST
TITLE: MEMBER OF SENIOR MANAGEMENT
COMMITMENT: $25,000,000
PRO RATA SHARE: 1.6667%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 26
SHAWMUT BANK
BY: /S/ROBERT J. LORD
-----------------
NAME: ROBERT J. LORD
TITLE: DIRECTOR
COMMITMENT: $25,000,000
PRO RATA SHARE: 1.6667%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 27
COMERICA BANK
BY: /S/JON A. BIRD
-------------------
NAME: JON A. BIRD
TITLE: VICE PRESIDENT
COMMITMENT: $23,684,160
PRO RATA SHARE: 1.5789%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 28
THE BANK OF TOKYO TRUST COMPANY
BY: /S/ G. STEWART
-----------------------------------
NAME: G. STEWART
TITLE: VICE PRESIDENT & DEPUTY MANAGER
COMMITMENT: $22,368,400
PRO RATA SHARE: 1.4912%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 29
THE FUJI BANK, LTD., NEW YORK BRANCH
BY: /S/GINA M. KEARNS
-----------------------------
NAME: GINA KEARNS
TITLE: VICE PRESIDENT & MANAGER
COMMITMENT: $22,368,400
PRO RATA SHARE: 1.4912%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 30
THE INDUSTRIAL BANK OF JAPAN TRUST COMPANY
BY: /S/MR. JOHN VELTRI
--------------------------
NAME: MR. JOHN VELTRI
TITLE: SENIOR VICE PRESIDENT
COMMITMENT: $22,368,400
PRO RATA SHARE: 1.4912%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 31
THE TORONTO-DOMINION BANK
BY: /S/ DIANE BAILEY
---------------------
NAME: DIANE BAILEY
TITLE: MANAGER CR ADMIN
COMMITMENT: $21,052,599
PRO RATA SHARE: 1.4035%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 32
THE BANK OF NOVA SCOTIA
BY: /S/M.R. BRADLEY
-----------------------
NAME: M.R. BRADLEY
TITLE: AUTHORIZED SIGNATORY
COMMITMENT: $20,000,000
PRO RATA SHARE: 1.3333%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 33
BANK OF MONTREAL/HARRIS TRUST AND SAVINGS BANK
BY: /S/MARC R. HEYDEN
-----------------
NAME: MARC R. HEYDEN
TITLE: DIRECTOR
COMMITMENT: $19,736,850
PRO RATA SHARE: 1.3158%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 34
THE SANWA BANK, LIMITED
BY: /S/YUTAKA HIGASHINO
--------------------------
NAME: YUTAKA HIGASHINO
TITLE: SENIOR VICE PRESIDENT
COMMITMENT: $19,736,850
PRO RATA SHARE: 1.3158%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 35
NBD BANK
BY: /S/JON P. DADY FOR CAROLYN J. PARKS
-----------------------------------
NAME: CAROLYN J. PARKS
TITLE: VICE PRESIDENT
COMMITMENT: $44,736,850
PRO RATA SHARE: 2.9825%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 36
BANQUE NATIONALE DE PARIS
BY: /S/RICHARD L. STED
--------------------------
NAME: RICHARD L. STED
TITLE: SENIOR VICE PRESIDENT
BY: /S/RICHARD PACE
-----------------------------
NAME: RICHARD PACE
TITLE: ASSISTANT VICE PRESIDENT
COMMITMENT: $15,789,450
PRO RATA SHARE: 1.0526%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 37
CREDIT LYONNAIS, NEW YORK BRANCH
BY: /S/MARK A. CAMPELLONE
---------------------
NAME: MARK A. CAMPELLONE
TITLE: VICE PRESIDENT
CREDIT LYONNAIS, CAYMAN ISLAND BRANCH
BY: /S/MARK A. CAMPELLONE
-------------------------
NAME: MARK A. CAMPELLONE
TITLE: AUTHORIZED SIGNATURE
COMMITMENT: $15,789,450
PRO RATA SHARE: 1.0526%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 38
NATIONAL WESTMINSTER BANK PLC.
BY: /S/MARIA AMARAL-LEBLANC
-----------------------
NAME: MARIA AMARAL-LEBLANC
TITLE: VICE PRESIDENT
COMMITMENT: $15,789,450
PRO RATA SHARE: 1.0526%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 39
FIRST AMERICAN NATIONAL
BY: /S/SCOTT M. BANE
------------------------
NAME: SCOTT M. BANE
TITLE: SENIOR VICE PRESIDENT
COMMITMENT: $7,894,710
PRO RATA SHARE: .5263%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 40
CORESTATES BANK, N.A.
BY: /S/DONNA J. EMHART
-----------------------------
NAME: DONNA J. EMHART
TITLE: ASSISTANT VICE PRESIDENT
COMMITMENT: $7,894,710
PRO RATA SHARE: .5263%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
<PAGE> 41
SUNTRUST BANK
BY: /S/SMITH W. BROOKHART, IV
-------------------------
NAME: SMITH W. BROOKHART, IV
TITLE: GROUP VICE PRESIDENT
COMMITMENT: $7,894,710
PRO RATA SHARE: .5263%
SIGNATURE PAGE TO THE SECOND AMENDMENT DATED AS OF
JULY 1, 1995 TO THE TEXTRON INC. CREDIT AGREEMENT
