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UNITED STATES
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
ENVIRONMENT ONE CORPORATION
(Name of Subject Company)
EOC ACQUISITION CORPORATION
PRECISION CASTPARTS CORP.
(Bidders)
COMMON STOCK, $.10 PAR VALUE
(Title of Class of Securities)
294 056 106
(CUSIP Number of Common Stock)
WILLIAM D. LARSSON
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
PRECISION CASTPARTS CORP.
4650 SW MACADAM AVENUE, SUITE 440
PORTLAND, OREGON 97201
(503) 417-4800
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidder)
COPY TO:
RUTH A. BEYER
STOEL RIVES LLP
900 SW FIFTH AVENUE, SUITE 2300
PORTLAND, OREGON 97204-1268
(503) 294-9332
CALCULATION OF FILING FEE
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Transaction Valuation* Amount of Filing Fee*
$72,014,297 $14,403
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* The transaction valuation assumes the purchase of 4,722,249 shares of Common
Stock of Environment One Corporation at $15.25 per share in cash, which is
based on the number of shares of Common Stock represented by the Company to
be outstanding (4,295,827) as of February 24, 1998 and the number of shares
of Common Stock issuable under outstanding stock options and warrants
(426,422) as of February 24, 1998. The amount of the filing fee, calculated
in accordance with Rule 0-11(d) under the Securities Exchange Act of 1934,
equals 1/50 of one percent of the cash offered by the Bidder.
/ / 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.
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Amount Previously Paid:...............................................................................
Form or Registration No.:.............................................................................
Filing Party:.........................................................................................
Date Filed:...........................................................................................
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14D-1
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- -------------------------------------------------------------------------------------------
1. Name of reporting person
EOC Acquisition Corporation (EIN Applied For)
- -------------------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group (a) / /
(b) / /
- -------------------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------------------
4. Sources of Funds
AF
- -------------------------------------------------------------------------------------------
Check box if disclosure of legal proceedings is required pursuant to Items 2(e)
5. OR 2(f)
- -------------------------------------------------------------------------------------------
6. Citizenship or place of organization
New York
- -------------------------------------------------------------------------------------------
7. Aggregate amount beneficially owned by each reporting person
None (0)
- -------------------------------------------------------------------------------------------
8. Check box if the aggregate amount in row (7) excludes certain shares.
- -------------------------------------------------------------------------------------------
9. Percent of class represented by amount in row (7)
None (0)
- -------------------------------------------------------------------------------------------
10. Type of reporting person
CO
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14D-1
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- -------------------------------------------------------------------------------------------
1. Name of reporting person
Precision Castparts Corp. (EIN 93-046-0598)
- -------------------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group (a)
(b)
- -------------------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------------------
4. Sources of Funds
BK, WC
- -------------------------------------------------------------------------------------------
Check box if disclosure of legal proceedings is required pursuant to Items 2(e)
5. OR 2(f)
- -------------------------------------------------------------------------------------------
6. Citizenship or place of organization
Oregon
- -------------------------------------------------------------------------------------------
7. Aggregate amount beneficially owned by each reporting person
None (0)
- -------------------------------------------------------------------------------------------
8. Check box if the aggregate amount in row (7) excludes certain shares.
- -------------------------------------------------------------------------------------------
9. Percent of class represented by amount in row (7)
None (0)
- -------------------------------------------------------------------------------------------
10. Type of reporting person
CO
- -------------------------------------------------------------------------------------------
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ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Environment One Corporation, a New
York corporation (the "Company"), and the address of its principal executive
offices is 2773 Balltown Road, Niskayuna, NY 12309-1090.
(b) The class of securities to which this statement relates is the Common
Stock, $.10 par value per share (the "Shares"), of the Company. The information
set forth in the Introductory Section and Section 1 of the Offer to Purchase
(the "Offer to Purchase") annexed hereto as Exhibit 99(a)1 is incorporated
herein by reference.
(c) The information concerning the principal market in which the Shares are
traded and the high and low sales prices for the Shares in such principal market
is set forth in Section 6 ("Price Range of Shares; Cash Distributions") of the
Offer to Purchase which is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a) - (d) and (g) The name, principal business and address of the principal
office of EOC Acquisition Corporation, a New York corporation (the "Purchaser"),
and Precision Castparts Corp., an Oregon corporation ("PCC"), is set forth in
Section 8 ("Certain Information Concerning the Purchaser and PCC") of the Offer
to Purchase which is incorporated herein by reference. The name, citizenship,
business address, present principal occupation or employment of each director
and executive officer of Purchaser and PCC and the name, principal business and
address of any corporation or other organization in which such occupation or
employment is conducted, material occupations, positions, offices or employments
during the last five years and the name, principal business and address of any
business corporation or other organization in which such occupation, position,
office or employment was carried on, is set forth in Schedule I of the Offer to
Purchase and is incorporated herein by reference.
(e) and (f) During the last five years none of the Purchaser or PCC or, to
the best knowledge of the Purchaser and PCC, any of the persons listed in
Schedule I to the Offer to Purchase, has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors). During the last five
years, none of the Purchaser or PCC or, to the best knowledge of the Purchaser
and PCC, any of the persons listed in Schedule I to the Offer to Purchase, was 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, 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) To the best of Purchaser's and PCC's knowledge, there have been no
transactions with the Company required to be set forth in this Item.
(b) The information set forth in Section 10 ("Background of the Offer;
Contacts with the Company") of the Offer to Purchase is incorporated herein by
reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) - (c) The information set forth in Section 9 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
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ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a) - (e) The information set forth in the Introduction and Section 11 ("The
Purpose of the Offer; Merger Agreement; Plans for the Company") of the Offer to
Purchase is incorporated herein by reference.
(f) and (g) The information set forth in Section 12 ("Effect of the Offer on
the Market for the Shares, NASDAQ Exchange Listing and Exchange Act
Registration") of the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) None.
(b) None.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, Section 10 ("Background of
the Offer; Contacts with the Company"), Section 11 ("The Purpose of the Offer;
Merger Agreement; Plans for the Company"), Section 14 ("Certain Legal Matters")
and Section 15 ("Fees and Expenses") of the Offer to Purchase is incorporated
herein by reference. Except as set forth in the Introduction and Sections 10,
11, 14 and 15 of the Offer to Purchase, none of the Purchaser or PCC or, to the
best knowledge of the Purchaser and PCC, any of the persons listed in Schedule I
to the Offer to Purchase, has any contract, arrangement, understanding or
relationship (whether or not legally enforceable) with any other person with
respect to any securities of the Company (including, but not limited to, any
contract, arrangement, understanding or relationship concerning the transfer or
the voting of any such securities, joint ventures, loan or option arrangements,
puts or calls, guaranties of loans, guaranties against loss, or the giving or
withholding of proxies).
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in Section 15 ("Fees and Expenses") of the Offer
to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The Purchaser was created to effect the Offer and the Merger and has no
business, assets or financial statements. The consolidated financial statements
of PCC are set forth in PCC's Annual Report on Form 10-K for the fiscal year
ended March 30, 1997, as amended by Form 10-K/A filed July 9, 1997 (the "PCC
1996 10-K") and PCC's Quarterly Reports on Form 10-Q for the quarters ended June
29, 1997, September 25, 1997 and December 29, 1997 (the "PCC 1997 10-Q's"),
which reports have been filed by PCC with the Securities and Exchange Commission
("SEC") and are incorporated herein by reference. Such reports and other
information can be inspected and copied at the public reference facilities
maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the following regional offices of the SEC: New York Regional Office, 7 World
Trade Center, New York, New York 10048; and Chicago Regional Office, 1400
Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of
such material can be obtained from the Public Reference Section of the SEC, 450
Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, the
aforementioned material can also be inspected at the offices of the New York
Stock Exchange, Inc., 20 Broad Street, New York, New York 10005. Such material
may also be accessed through an Internet Web site maintained by the SEC at
http://www.sec.gov.
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ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Section 11 ("The Purpose of the Offer;
Merger; Plans for the Company--Stockholder Agreement") of the Offer to Purchase
is incorporated herein by reference.
(b) - (d) The information set forth in the Introduction and Section 14
("Certain Legal Matters") 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, to the extent not otherwise incorporated herein by reference, is
incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
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99(a) (1) Offer to Purchase, dated March 3, 1998.
(2) Letter of Transmittal.
(3) IRS Guidelines for Certification of Taxpayer Identification Number on Substitute Form
W-9.
(4) Form of Summary Advertisement, dated March 3, 1998.
(5) Form of Notice of Guaranteed Delivery.
(6) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees.
(7) Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust
Companies and other Nominees.
(8) Press Release, dated February 25, 1998.
(b) Bank of America Credit Agreement, as amended and restated July 31, 1996, among PCC,
certain of its subsidiaries, Bank of America National Trust and Savings Association, as
Agent and Letter of Credit Issuing Bank, and the other financial institutions party
thereto. Incorporated by Reference to Exhibit 10(H) in PCC's Quarterly Report on Form
10-Q dated October 25, 1996 (File No. 1-10348)
(c) (1) Agreement and Plan of Merger, dated February 24, 1998, among the Purchaser, PCC and the
Company.
(2) Stockholder Agreement, dated February 24, 1998, among the Purchaser and PCC and Stephen
V. Ardia, David M. Doin, George A. Earle, III, George A. Vorsheim, Mark E. Alexander,
Brian Buchinski, Kathleen A. Parry, Philip W. Welsh, Walter W. Aker, Lars G. Grenback,
Rolf E. Soderstrom, John L. Allen, Angelo Dounoucos, and Robert G. James.
(3) Agreement with Depositary.
(4) Agreement with Information Agent.
(5) Confidentiality Agreement dated as of November 25, 1997 between PCC and the Company.
(d) Not applicable.
(e) Not applicable.
(f) The Offer to Purchase and the Letter of Transmittal are incorporated herein by
reference.
</TABLE>
6
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this Statement is true, complete and correct.
Date: March 3, 1998
EOC ACQUISITION CORPORATION
By /s/ William D. Larsson
_____________________________________
Name: William D. Larsson
_____________________________________
Title: Vice President
_____________________________________
PRECISION CASTPARTS CORP.
By /s/ William D. Larsson
_____________________________________
Name: William D. Larsson
_____________________________________
Title: Vice President and Chief
Financial Officer
_____________________________________
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
ENVIRONMENT ONE CORPORATION
AT
$15.25 NET PER SHARE
BY
EOC ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
PRECISION CASTPARTS CORP.
THE OFFER AND WITHDRAWAL RIGHTS
WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON MONDAY,
MARCH 30, 1998
UNLESS THE OFFER IS EXTENDED
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED IN SECTION
1) THAT NUMBER OF SHARES THAT WOULD REPRESENT 66 2/3 PERCENT OF ALL OUTSTANDING
SHARES (DETERMINED ON A FULLY DILUTED BASIS) ON THE DATE OF PURCHASE. SEE
INTRODUCTION AND SECTION 13.
THE BOARD OF DIRECTORS OF ENVIRONMENT ONE CORPORATION HAS APPROVED THE
MERGER AGREEMENT AND THE MAKING OF THE OFFER BY THE PURCHASER, AND 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 STOCKHOLDERS
ACCEPT THE OFFER.
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should (A) complete and sign the Letter of Transmittal (or a facsimile
thereof) in accordance with the instructions in the Letter of Transmittal, have
such stockholder's signature thereon guaranteed if required by Instruction 1 to
the Letter of Transmittal, and mail or deliver the Letter of Transmittal (or
such facsimile) and any other required documents to the Depositary, and either
deliver, together with the Letter of Transmittal, the certificates representing
the tendered Shares and any other required documents to the Depositary, or
tender such Shares pursuant to the procedure for book-entry transfer set forth
in Section 3 or (B) request such stockholder's broker, dealer, bank, trust
company or other nominee to effect the transaction for such stockholder.
Stockholders having Shares registered in the name of a broker, dealer, bank,
trust company or other nominee must contact such broker, dealer, bank, trust
company or other nominee if they desire to tender Shares so registered.
If a stockholder desires to tender Shares and such stockholder's
certificates for such Shares are not immediately available, or the procedures
for book-entry transfer cannot be completed on a timely basis, or time will not
permit all documents to reach the Depositary prior to the Expiration Date, such
stockholder may tender such Shares by following the procedures for guaranteed
delivery set forth in Section 3.
Questions and requests for assistance may be directed to Morrow & Co., Inc.
at the address and telephone numbers set forth on the back cover of this Offer
to Purchase. Additional copies of this Offer to Purchase, the Letter of
Transmittal and the Notice of Guaranteed Delivery may be obtained from Morrow &
Co., Inc. or from brokers, dealers, commercial banks or trust companies.
------------------------
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
MARCH 3, 1998
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TABLE OF CONTENTS
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PAGE
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INTRODUCTION................................................................ 3
1. TERMS OF THE OFFER; EXPIRATION DATE................................... 4
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES......................... 5
3. PROCEDURE FOR TENDERING SHARES........................................ 6
4. WITHDRAWAL RIGHTS..................................................... 9
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES............................... 10
6. PRICE RANGE OF SHARES; CASH DISTRIBUTIONS............................. 11
7. CERTAIN INFORMATION CONCERNING THE COMPANY............................ 11
8. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PCC.................. 12
9. SOURCE AND AMOUNT OF FUNDS............................................ 14
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.................... 14
11. THE PURPOSE OF THE OFFER; MERGER AGREEMENT;
PLANS FOR THE COMPANY................................................. 15
12. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES, NASDAQ EXCHANGE
LISTING AND EXCHANGE ACT REGISTRATION................................. 22
13. CERTAIN CONDITIONS OF THE OFFER....................................... 23
14. CERTAIN LEGAL MATTERS................................................. 24
15. FEES AND EXPENSES..................................................... 25
16. MISCELLANEOUS......................................................... 25
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER AND PCC............... S-1
</TABLE>
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To the Holders of Common Stock
of Environment One Corporation:
INTRODUCTION
EOC Acquisition Corporation, a New York corporation (the "Purchaser"), which
is a wholly owned subsidiary of Precision Castparts Corp., an Oregon corporation
("PCC"), hereby offers to purchase all outstanding shares of Common Stock, $.10
par value per share (collectively, the "Shares"), of Environment One
Corporation, a New York corporation (the "Company"), at a purchase price of
$15.25 per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which, together with any amendments or supplements hereto or
thereto, collectively constitute the "Offer").
The purpose of the Offer is to enable PCC to acquire the entire equity
interest in the Company. The Offer is being made pursuant to an Agreement and
Plan of Merger dated as of February 24, 1998 by and among the Purchaser, PCC and
the Company (the "Merger Agreement"). The Merger Agreement provides for, among
other things, the Purchaser to commence a cash tender offer to purchase all of
the Shares of the Company for $15.25 per Share. As soon as practicable following
the consummation of the Offer, it is intended that the Purchaser will merge into
the Company (the "Merger") pursuant to the applicable provisions of the New York
Business Corporation Law ("NYBCL"). The purpose of the Merger is to facilitate
the acquisition of the Shares not tendered and purchased pursuant to the Offer.
Under the terms of the Merger Agreement, upon consummation of the Merger each
then outstanding Share (other than Shares owned by the Purchaser or PCC, if any)
would be converted into the right to receive an amount in cash equal to the
price per Share paid pursuant to the Offer (the "Offer Price").
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares pursuant to the Offer. The
Purchaser will pay all fees and expenses of The Bank of New York, which is
acting as the depositary (the "Depositary"), and Morrow & Co., Inc., which is
acting as Information Agent (the "Information Agent") incurred in connection
with the Offer. See Section 15.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT AND THE MAKING OF THE OFFER BY THE PURCHASER, AND 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 STOCKHOLDERS ACCEPT THE OFFER.
FOURTEEN OF THE COMPANY'S DIRECTORS AND EXECUTIVE OFFICERS HAVE ENTERED INTO AN
AGREEMENT TO TENDER THEIR SHARES PURSUANT TO THE OFFER. SEE SECTION 11.
Miller, Johnson & Kuehn, Inc. has delivered to the Board of Directors of the
Company its opinion that the consideration to be received by the holders of
Shares in the Offer and the Merger is fair to such holders from a financial
point of view. A copy of the opinion of Miller, Johnson & Kuehn, Inc. is
contained in the Company's Solicitation/Recommendation Statement on Schedule
14D-9 (the "Schedule 14D-9"), which is being mailed to stockholders herewith.
THE OFFER IS CONDITIONED UPON THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN
PRIOR TO THE EXPIRATION DATE (AS DEFINED IN SECTION 1) THAT NUMBER OF SHARES
(THE "MINIMUM NUMBER OF SHARES") THAT WOULD REPRESENT 66 2/3 PERCENT OF ALL
OUTSTANDING SHARES OF THE COMPANY (ON A FULLY DILUTED BASIS) ON THE DATE OF
PURCHASE (THE "MINIMUM CONDITION"). SUBJECT TO OBTAINING THE CONSENT OF THE
COMPANY, THE PURCHASER RESERVES THE RIGHT (SUBJECT TO THE APPLICABLE RULES AND
REGULATIONS OF THE SECURITIES AND
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EXCHANGE COMMISSION ("SEC")), WHICH IT CURRENTLY HAS NO INTENTION OF EXERCISING,
TO WAIVE OR REDUCE THE MINIMUM CONDITION AND TO ELECT TO PURCHASE, PURSUANT TO
THE OFFER, FEWER THAN THE MINIMUM NUMBER OF SHARES. SEE SECTIONS 1 AND 13.
Certain other conditions to the Offer are described in Section 13. Subject
to the limitations of the Merger Agreement, the Purchaser reserves the right to
waive any one or more of the conditions to the Offer. See Sections 2 and 13.
According to the Company, as of February 24, 1998, there were 4,295,827
Shares issued and outstanding. According to the Company, there were 426,422
Shares subject to outstanding options and warrants as of February 24, 1998. The
Company has agreed in the Merger Agreement to use its best efforts to enter into
agreements with holders of outstanding options and warrants providing that,
immediately after the date on which the Purchaser shall have accepted for
payment all Shares tendered in the Offer, each option shall be canceled in
exchange for a payment to the option holder equal to the Offer Price less the
exercise price of such option or warrant multiplied by the number of shares
previously subject to such option or warrant (less any applicable withholding).
Based on the foregoing, and assuming that no changes occur prior to the date of
purchase pursuant to the Offer, there would currently be 4,722,249 Shares
outstanding on a fully diluted basis and the Minimum Number of Shares would be
3,148,167. However, the actual Minimum Number of Shares will depend upon the
facts as they exist on the date of purchase.
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; EXPIRATION DATE.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of such extension or
amendment), the Purchaser will accept for payment and pay for all Shares that
are validly tendered prior to the Expiration Date and not withdrawn as permitted
by Section 4. The term "Expiration Date" means 12:00 Midnight, Eastern time, on
March 30, 1998, unless and until the period during which the Offer is open shall
have been extended in accordance with the terms of the Merger Agreement, in
which event the term "Expiration Date" shall mean the latest time and date at
which the Offer, as so extended, will expire.
THE OFFER IS CONDITIONED UPON SATISFACTION OF THE MINIMUM CONDITION, THE
EXPIRATION OR EARLY TERMINATION OF THE APPLICABLE WAITING PERIOD UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE
REGULATIONS THEREUNDER (THE "HSR ACT") AND THE SATISFACTION OF THE OTHER
CONDITIONS SET FORTH IN SECTION 13.
If by 12:00 Midnight, Eastern time, on Monday, March 30, 1998 (or any date
and time then set as the Expiration Date), any or all of the conditions to the
Offer have not been satisfied or waived, the Purchaser reserves the right (but
shall not be obligated), subject to the applicable rules and regulations of the
SEC and subject to limitations in the Merger Agreement, to (a) terminate the
Offer and not accept for payment or pay for any Shares and return all tendered
Shares to tendering stockholders, (b) waive all the unsatisfied conditions and
accept for payment and pay for all Shares validly tendered prior to the
Expiration Date and not theretofore withdrawn, (c) extend the Offer and, subject
to the right of stockholders to withdraw Shares until the Expiration Date,
retain the Shares that have been tendered during the period or periods for which
the Offer is extended or (d) amend the Offer. See Section 11. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID ON THE OFFER PRICE FOR TENDERED SHARES,
WHETHER OR NOT THE PURCHASER EXERCISES ITS RIGHT TO EXTEND THE OFFER.
There can be no assurance that the Purchaser will exercise its right to
extend the Offer. Any extension, amendment or termination will be followed as
promptly as practicable by public announcement. In the
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case of an extension, Rule 14e-1(d) under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), requires that the announcement be issued no
later than 9:00 a.m., Eastern time, on the next business day after the
previously scheduled Expiration Date in accordance with the public announcement
requirements of Rule 14d-4(c) under the Exchange Act. Subject to applicable law
(including Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require
that any material change in the information published, sent or given to
stockholders in connection with the Offer be promptly disseminated to
stockholders in a manner reasonably designed to inform stockholders of such
change), and without limiting the manner in which the Purchaser may choose to
make any public announcement, the Purchaser will not have any obligation to
publish, advertise or otherwise communicate any such public announcement other
than by making a release to the Dow Jones News Service. As used in this Offer to
Purchase, "business day" has the meaning set forth in Rule 14d-1 under the
Exchange Act.
If the Purchaser extends the Offer or if the Purchaser is delayed in its
acceptance for payment of or payment (whether before or after its acceptance for
payment of Shares) for Shares or it is unable to pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer, the Depositary may retain tendered Shares on behalf of the Purchaser,
and such Shares may not be withdrawn except to the extent tendering stockholders
are entitled to withdrawal rights as described in Section 4. However, the
ability of the Purchaser to delay the payment for Shares that the Purchaser has
accepted for payment is limited by Rule 14e-1(c) under the Exchange Act, which
requires that a bidder pay the consideration offered or return the securities
deposited by or on behalf of holders of securities promptly after the
termination or withdrawal of such bidder's offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or waives a material condition of the Offer,
the Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the
Exchange Act. The minimum period during which an offer must remain open
following material changes in the terms of an offer or information concerning an
offer, other than a change in the percentage of securities sought or a change in
price, will depend upon the facts and circumstances, including the relative
materiality of the changes or information.
If, prior to the Expiration Date and subject to the limitations in the
Merger Agreement, the Purchaser should increase or decrease the percentage of
Shares being sought, or increase or decrease the consideration offered pursuant
to the Offer to holders of Shares, such increase or decrease would be applicable
to all holders whose Shares are accepted for payment pursuant to the Offer and
if, at the time notice of any increase or decrease is first published, sent or
given to holders of Shares, the Offer is scheduled to expire at any time earlier
than the tenth business day from and including the date that such notice is
first so published, sent or given, the Offer would be extended at least until
the expiration of such ten business-day period. With respect to a change in
price or a change in the percentage of securities sought, a minimum period of
ten business days is generally required to allow for adequate dissemination to
stockholders and investor response.
This Offer to Purchase and the related Letter of Transmittal is being mailed
to the record holders of Shares and will be furnished to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the Company's stockholder list or, if applicable,
who are listed as participants in a clearing agency's security position listing
for subsequent transmittal to beneficial owners of Shares.
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 extension or
amendment), the Purchaser will accept for payment, and will pay for all Shares
validly tendered prior to the Expiration Date (and not properly withdrawn in
accordance with Section 4) promptly after the Expiration Date. See Sections 1
and 13. If any condition to the Offer specified in the Merger Agreement or in
Section 13 of the Offer to Purchase is not
5
<PAGE>
satisfied at the Expiration Date, the Purchaser must either (a) waive the
unsatisfied condition and accept for payment and pay for any tendered Shares,
(b) terminate the Offer and return all tendered Shares to the tendering
stockholders, or (c) further extend the Offer resulting in an extension of the
right of stockholders to withdraw tendered Shares until the new Expiration Date;
provided, however, that the Purchaser may accept tendered Shares for payment
subject to the expiration or termination of the applicable waiting period under
the HSR Act.
PCC filed a Notification and Report Form with respect to the Offer under the
HSR Act on March 3, 1998. The waiting period under the HSR Act with respect to
the Offer will expire at 11:59 p.m., Eastern time, on March 18, 1998 unless
early termination of the waiting period is granted. However, the Antitrust
Division of the Department of Justice (the "Antitrust Division") or the Federal
Trade Commission (the "FTC") may extend the waiting period by requesting
additional information or documentary material from PCC or the Company. If such
a request is made, such waiting period will expire at 11:59 p.m., Eastern time,
on the 10th day after substantial compliance by PCC or the Company with such
request. See Section 14 hereof for additional information concerning the HSR Act
and the applicability of the antitrust laws to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as, if
and when the Purchaser gives oral or written notice to the Depositary of the
Purchaser's acceptance for payment of such Shares pursuant to the Offer. Upon
the terms and subject to the conditions of the Offer, payment for Shares
accepted for payment pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payments from the Purchaser
and transmitting such payments to stockholders whose Shares have been accepted
for payment. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE OFFER PRICE FOR
TENDERED SHARES BE PAID, REGARDLESS OF ANY DELAY IN MAKING THE PAYMENT AFTER THE
EXPIRATION DATE.
In all cases, payment for Shares tendered and 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 "Book-Entry Transfer Facility")
pursuant to the procedure set forth in Section 3, (ii) the Letter of Transmittal
(or a facsimile thereof), properly completed and duly executed, with any
required signature guarantees, and (iii) any other documents required by the
Letter of Transmittal.
If any tendered Shares are not accepted for payment for any reason,
certificates evidencing unpurchased Shares will be returned, without expense, to
the tendering stockholder (or, in the case of Shares tendered by book-entry
transfer into the Depositary's account at the Book-Entry Transfer Facility
pursuant to the procedures set forth in Section 3, such Shares will be credited
to an account maintained at the Book-Entry Transfer Facility), as promptly as
practicable following the expiration or termination of the Offer.
3. PROCEDURE FOR TENDERING SHARES.
In order for a holder of Shares validly to tender Shares pursuant to the
Offer, (i) the Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, together with any required signature guarantees and
any other documents required by the Letter of Transmittal, must be received by
the Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase and either the certificates evidencing tendered Shares ("Share
Certificates") must be received by the Depositary at such address or such Shares
must be tendered pursuant to the procedure for book-entry transfer described
below and a Book-Entry Confirmation (as defined below) must be received by the
Depositary, in each case prior to the Expiration Date, or (ii) the tendering
stockholder must comply with the guaranteed delivery procedure described below.
6
<PAGE>
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE
OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
BOOK-ENTRY TRANSFER. The Depositary will establish an account with respect
to the Shares at the 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 the system of the Book-Entry Transfer
Facility may make book-entry delivery of Shares by causing such Book-Entry
Transfer Facility to transfer such Shares into the Depositary's account at such
Book-Entry Transfer Facility in accordance with such Book-Entry Transfer
Facility's procedures for such transfer. However, although delivery of Shares
may be effected through book-entry transfer at the Book-Entry Transfer Facility,
the Letter of Transmittal (or a facsimile thereof), properly completed and duly
executed, together with any required signature guarantees, or an Agent's
Message, and any other required documents must, in any case, 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, or the tendering stockholder must comply
with the guaranteed delivery procedure described below. The confirmation of a
book-entry transfer of Shares into the Depositary's account at the Book-Entry
Transfer Facility as described above is referred to herein as a "Book-Entry
Confirmation."
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
SIGNATURE GUARANTEES. Signatures on Letters of Transmittal must be
guaranteed by a firm which is a member of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., or by a
bank or trust company having an office or correspondent in the United States
(each of the foregoing being referred to as an "Eligible Institution"), except
no signature guarantee is required where Shares are tendered (i) by a registered
holder of Shares who has not completed either the box entitled "Special Payment
Instructions" or the box entitled "Special Delivery Instructions" on the Letter
of Transmittal or (ii) for the account of an Eligible Institution. See
Instruction 1 of the Letter of Transmittal. If the Share Certificates are
registered in the name of a person other than the signer of the Letter of
Transmittal, or if payment is to be made, or Share Certificates not accepted for
payment or not tendered are to be returned, to a person other than the
registered holder(s), the Share Certificates, as the case may be, must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear on such certificates,
with the signature(s) on such certificates or stock powers guaranteed as
aforesaid. See Instructions 1 and 5 of the Letter of Transmittal.
A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL (OR A FACSIMILE
THEREOF) MUST ACCOMPANY EACH DELIVERY OF SHARE CERTIFICATES TO THE DEPOSITARY.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates are not immediately
available or such stockholder cannot deliver the Share Certificates and all
other required documents to the Depositary prior to the Expiration Date, or such
7
<PAGE>
stockholder cannot complete the procedure for delivery by book-entry transfer on
a timely basis, such Shares may nevertheless be tendered, provided that all of
the following conditions are satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by the Purchaser, is
received by the Depositary, as provided below, on or prior to the Expiration
Date; and
(iii) the Share Certificates (or a Book-Entry Confirmation) representing
all tendered Shares, in proper form for transfer, in each case together with
the Letter of Transmittal (or a facsimile thereof), properly completed and
duly executed, with any required signature guarantees or in the case of a
book-entry transfer, an Agent's Message, and any other required documents
are received by the Depositary within three trading days after the date of
execution of such Notice of Guaranteed Delivery. A "trading day" is any day
on which the Nasdaq National Market ("NNM") is open for business.
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 such
Notice of Guaranteed Delivery.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (a) certificates for
(or a timely Book-Entry Confirmation with respect to) such Shares, (b) a Letter
of Transmittal (or facsimile thereof), properly completed and duly executed,
with any required signature guarantees, or, in the case of a book-entry
transfer, an Agent's Message, and (c) any other documents required by the Letter
of Transmittal. Accordingly, tendering stockholders may be paid at different
times depending upon when certificates for Shares or Book-Entry Confirmations
with respect to Shares, are actually received by the Depositary.
DETERMINATION OF VALIDITY. In order for any tender of Shares to be valid,
it must be in proper form. All questions as to the validity, form, eligibility
(including time of receipt) and acceptance for payment of any tender of Shares
will be determined by the Purchaser, in its sole discretion, which determination
shall be final and binding on all parties. The Purchaser reserves the absolute
right to reject any and all tenders determined by it not to be in proper form or
the acceptance for payment of which may, in the opinion of its counsel, be
unlawful. The Purchaser also reserves the absolute right to waive any defect or
irregularity in any tender of Shares of any particular stockholder whether or
not similar defects or irregularities are waived in the case of other
stockholders. 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 Purchaser,
PCC, 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. The Purchaser's
determinations with regard to compliance with the terms and conditions of the
Offer (including the Letter of Transmittal and the instructions thereto) will be
final and binding.
OTHER REQUIREMENTS. By executing a Letter of Transmittal as set forth
above, the tendering stockholder irrevocably appoints designees of the Purchaser
as such stockholder's proxies, each with full power of substitution, to the full
extent of such stockholder's rights with respect to the Shares tendered by such
stockholder and accepted for payment by the Purchaser and with respect to any
and all other Shares or other securities issued or issuable in respect of such
Shares on or after February 24, 1998. Such appointment is effective when, and
only to the extent that, the Purchaser deposits the payment for such Shares with
the Depositary. Upon the effectiveness of such appointment, all prior proxies,
consents and powers of attorney given by such stockholder will be revoked, and
no subsequent proxies, consents and powers of attorney may be given (and, if
given, will not be deemed effective). The designees of the Purchaser will, with
respect to the Shares and other securities for which appointment is effective,
be empowered to exercise all voting and other rights of such stockholder in
respect of any annual, special or
8
<PAGE>
adjourned meeting of the stockholders of the Company, actions by written consent
in lieu of any such meeting or otherwise as they, in their sole discretion, deem
proper. The Purchaser reserves the right to require that, in order for Shares to
be deemed validly tendered, immediately upon the Purchaser's payment for such
Shares, the Purchaser must be able to exercise full voting rights with respect
to such Shares and other securities.
A valid tender of Shares pursuant to one of the procedures described above
will constitute the tendering stockholder's acceptance of the terms and
conditions of the Offer. The Purchaser's acceptance for payment of Shares
tendered pursuant to the Offer will constitute a binding agreement between the
tendering stockholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
TO AVOID BACKUP WITHHOLDING OF FEDERAL INCOME TAX WITH RESPECT TO PAYMENT TO
CERTAIN STOCKHOLDERS OF THE OFFER PRICE FOR THE SHARES PURCHASED PURSUANT TO THE
OFFER, EACH SUCH STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH SUCH STOCKHOLDER'S
CORRECT TAXPAYER IDENTIFICATION NUMBER AND CERTIFY THAT SUCH STOCKHOLDER IS NOT
SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY COMPLETING THE SUBSTITUTE
FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL. SEE INSTRUCTION 10 OF THE LETTER
OF TRANSMITTAL.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares are
irrevocable. Shares tendered pursuant to the Offer may be withdrawn pursuant to
the procedures set forth below at any time prior to the Expiration Date and,
unless theretofore accepted for payment by the Purchaser pursuant to the Offer,
may also be withdrawn at any time after May 1, 1998.
If the Purchaser extends the Offer, is delayed in the acceptance for payment
of Shares or is unable to purchase Shares validly tendered pursuant to the Offer
for any reason, then, without prejudice to the Purchaser's rights under the
Offer, the Depositary may nevertheless, on behalf of the Purchaser, retain
tendered Shares, and such Shares may not be withdrawn except to the extent that
tendering stockholders are entitled to withdrawal rights as described in this
Section 4. Any such delay will be by an extension of the Offer to the extent
required by law.
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 of the
registered holder, if different from that of the person who tendered such
Shares. If Share Certificates to be withdrawn have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
certificates, the serial number shown on such certificates must be submitted to
the Depositary and the signature(s) on the notice of withdrawal must be
guaranteed by an Eligible Institution unless such Shares have been tendered for
the account of any Eligible Institution. If Shares have been tendered pursuant
to the procedure for book-entry transfer as set forth in Section 3, any notice
of withdrawal must specify the name and number of the account at the Book-Entry
Transfer Facility to be credited with the withdrawn Shares and otherwise comply
with such Book-Entry Transfer Facility's procedures.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding. None of the
Purchaser, PCC, 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 thereafter be deemed not to have been
validly tendered for purposes of the Offer. However, withdrawn Shares may be
re-tendered at any time prior to the Expiration Date by following one of the
procedures described in Section 3.
9
<PAGE>
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following discussion summarizes the principal federal income tax
consequences under the Internal Revenue Code of 1986, as amended (the "Code"),
associated with the Offer, assuming that the Offer is consummated as
contemplated herein. This summary does not purport to be comprehensive, does not
describe all potentially relevant tax considerations and does not discuss state,
local or foreign tax laws.
The receipt of cash for Shares pursuant to the Offer or the Merger will be a
taxable transaction for federal income tax purposes under the Code (and may also
be a taxable transaction under applicable state, local, foreign and other tax
laws). Generally, for federal income tax purposes, a tendering stockholder will
recognize gain or loss for federal income tax purposes equal to the difference
between the amount of cash received pursuant to the Offer or the Merger and the
holder's adjusted tax basis for the Shares sold pursuant to the Offer or
converted in the Merger. Such gain or loss will be capital gain or loss,
assuming the Shares are held as capital assets. If the Shares were held longer
than one year, the capital gain will be long term.
The rate at which any such gain will be taxed to noncorporate shareholders
(including individuals, estates and trusts) will, as a general matter, depend
upon each shareholder's holding period in the Shares. If a noncorporate
shareholder has net capital gain (the excess of net long-term capital gain over
net short-term capital loss) for his or her taxable year in which the gain is
recognized and such shareholder's holding period for the Shares is more than 18
months, either a 20 percent or a 10 percent capital gains rate generally will
apply to such gain, depending on the amount of taxable income of such
shareholder for such year. If the noncorporate shareholder's holding period for
the Shares is more than one year, but not more than 18 months, a 28 percent tax
rate generally will apply to such gain. If the shareholder's holding period for
the Shares is one year or less, such gain will be taxed at the same rates as
ordinary income, currently at a maximum of 39.6 percent. Capital loss generally
is deductible only to the extent of capital gain plus $3,000. Net capital loss
in excess of $3,000 may be carried forward to subsequent taxable years.
For corporations, capital losses are allowed only to the extent of capital
gains, and net capital gain is taxed at the same rate as ordinary income.
Corporations generally may carry capital losses back up to three years and
forward up to five years.
THE FOREGOING DISCUSSION MAY NOT BE APPLICABLE WITH RESPECT TO SHARES
RECEIVED PURSUANT TO THE EXERCISE OF STOCK OPTIONS OR OTHERWISE AS COMPENSATION
OR WITH RESPECT TO HOLDERS OF SHARES WHO ARE SUBJECT TO SPECIAL TAX TREATMENT
UNDER THE CODE, SUCH AS NON-U.S. PERSONS, INSURANCE COMPANIES, TAX-EXEMPT
ORGANIZATIONS AND FINANCIAL INSTITUTIONS, AND SECURITIES DEALERS, AND MAY NOT
APPLY TO A HOLDER OF SHARES IN LIGHT OF INDIVIDUAL CIRCUMSTANCES. HOLDERS ARE
URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR TAX
CONSEQUENCES TO THEM (INCLUDING THE APPLICATION AND EFFECT OF ANY STATE, LOCAL
OR FOREIGN INCOME AND OTHER TAX LAWS) OF THE OFFER AND THE MERGER.
10
<PAGE>
6. PRICE RANGE OF SHARES; CASH DISTRIBUTIONS.
The Company's Common Stock is listed and traded principally on the NNM under
the trading symbol "EONE." The following table sets forth, for the quarters
indicated, the high and low sales prices as reported on the NNM for the Shares
based on the Company's Annual Report on Form 10-KSB for the year ended December
31, 1996 (the "Company's 1996 Form 10-KSB") and other publicly available
sources.
<TABLE>
<CAPTION>
HIGH LOW
--------- ---------
<S> <C> <C>
Year Ended December 31, 1995:
First Quarter............................................................ $ 3 1/4 $ 2 1/4
Second Quarter........................................................... 4 1/4 2 3/8
Third Quarter............................................................ 4 7/8 3 7/8
Fourth Quarter........................................................... 5 1/2 4 5/8
Year Ended December 31, 1996:
First Quarter............................................................ $ 5 1/2 $ 4 3/4
Second Quarter........................................................... 6 4 1/2
Third Quarter............................................................ 5 3/4 4 3/4
Fourth Quarter........................................................... 6 5 3/8
Year Ending December 31, 1997:
First Quarter............................................................ $ 7 3/4 $ 5 5/8
Second Quarter........................................................... 9 3/4 6 3/8
Third Quarter............................................................ 10 1/4 8 3/4
Fourth Quarter........................................................... 11 7/8 9 3/4
</TABLE>
On February 24, 1998, the last full trading day prior to the announcement of
the Offer, the closing sale price per Share of the Company's Common Stock
reported on the NNM was $13.00.
According to the Company's 1996 Form 10-KSB, the Company has not paid
dividends on the Company's Common Stock. According to the Company's 1996 Form
10-KSB, the Company's policy with regard to payment of dividends is evaluated
annually with consideration given to future growth and operating fund
requirements, and current Company policy is not to pay dividends.
STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
7. CERTAIN INFORMATION CONCERNING THE COMPANY.
The information concerning the Company contained in this Offer to Purchase,
including financial information, has been furnished by the Company or taken
from, or based upon, publicly available documents and records on file with the
SEC and other public sources. The summary information concerning the Company in
this Section 7 and elsewhere in this Offer to Purchase is derived from the
Company's 1996 Form 10-KSB. The summary information set forth below is qualified
in its entirety by reference to such documents (which may be obtained and
inspected as described below) and should be considered in conjunction with the
more comprehensive financial and other information in such documents and other
publicly available reports and documents filed by the Company with the SEC. The
Purchaser assumes no responsibility for the accuracy or completeness of the
information contained in such documents and records, or for any failure by the
Company to disclose events that may have occurred and may affect the
significance or accuracy of any such information but which are not known to the
Purchaser.
GENERAL. The Company is a New York corporation. According to the Company's
1996 Form 10-KSB, the Company is an environment-oriented product and service
company engaged in the development of low pressure sewer systems for real estate
developments. The Company also develops detection systems designed to forestall
shutdown of electric power generators operated by electric utility companies.
The Company reports that it has entered into foreign markets and license
agreements with respect to certain products.
11
<PAGE>
CERTAIN FINANCIAL INFORMATION. Set forth below is certain selected
consolidated financial data with respect to the Company and its subsidiary,
which was excerpted from the Company's 1996 Form 10-KSB. More comprehensive
financial information is included in such report (including management's
discussion and analysis of financial condition and results of operations) and
other documents filed by the Company with the SEC, and the following financial
information is qualified in its entirety by reference to such report and other
documents and all of the financial information and notes contained therein. Such
report and other documents may be examined and copies thereof may be obtained in
the manner set forth below.
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
-------------------- --------------------
1997 1996 1996 1995
--------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Sales of product and contract revenue............................... $ 17,228 $ 15,307 $ 21,536 $ 17,340
Cost of sales and contract services................................. 10,819 10,446 14,258 11,565
Selling, marketing, general and administrative expenses............. 4,257 3,217 5,071 4,161
Net income.......................................................... 1,319 928 1,255 821
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, --------------------
1997 1996 1995
------------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Working capital............................................................. $ 5,368 $ 3,986 $ 2,431
Total assets................................................................ 13,088 11,255 8,722
Total debt.................................................................. 1,585 1,914 2,727
Stockholders' equity........................................................ 7,207 5,713 4,348
</TABLE>
AVAILABLE INFORMATION. The Company is subject to the information filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file with the SEC periodic reports, proxy statements and other information
relating to its business, financial condition and other matters. Information as
of particular dates concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal holders of the
Company's securities and any material interest of such persons in transactions
with the Company is required to be disclosed in reports filed with the SEC or in
proxy statements distributed to the Company's stockholders and filed with the
SEC. Such reports, proxy statements and other information may be inspected at
the SEC's office at 450 Fifth Street, NW, Washington, D.C., 20549, and also
should be available for inspection at the regional offices of the SEC located in
the Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois, and 7 World Trade Center, 13th Floor, New York, New York. Copies of
such materials should be obtainable, upon payment of the SEC's customary
charges, by writing to the SEC's principal office at 450 Fifth Street, NW,
Washington, D.C., 20549. The information also should be available at the offices
of the NNM, 1735 K Street, N.W., Washington, D.C. 20006-1500. Such material may
also be accessed through an Internet Web site maintained by the SEC at
http://www.sec.gov.
8. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PCC.
GENERAL. The Purchaser, a New York corporation and a wholly owned
subsidiary of PCC, was recently organized to acquire the Company and has not
conducted any unrelated activities since its organization. The principal office
of the Purchaser is located at the principal office of PCC. All outstanding
shares of capital stock of the Purchaser are owned by PCC.
12
<PAGE>
PCC, an Oregon corporation, is a worldwide manufacturer of complex metal
components and products. PCC is the market leader in manufacturing large,
complex structural investment castings and is the leading manufacturer of
airfoil castings used in jet engine aircrafts. In addition, PCC has expanded
into the industrial gas turbine, fluid management, industrial metalworking tools
and machines, powdered metal and other metal products markets. The principal
executive offices of PCC are located at 4650 SW
Macadam Avenue, Suite 440, Portland, Oregon 97201; the telephone number is (503)
417-4800.
CERTAIN FINANCIAL INFORMATION. Set forth below is certain selected
consolidated financial information with respect to PCC and its subsidiaries
excerpted from the consolidated financial statements incorporated by reference
in PCC's Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1"), copies
of which are available for inspection at the Commission's office at 450 Fifth
Street, NW, Washington, D.C., 20549, and also should be available for inspection
at the regional offices of the SEC located in the Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois, and 7 World Trade
Center, 13th Floor, New York, New York. Copies of such materials should be
obtainable, upon payment of the SEC's customary charges, by writing to the SEC's
principal office at 450 Fifth Street, NW, Washington, D.C., 20549. Such material
may also be accessed through an Internet Web site maintained by the SEC at
http://www.sec.gov.
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED FISCAL YEAR ENDED
---------------------- ----------------------
DEC. 28, DEC. 29, MARCH 30, MARCH 31,
1997 1996 1997 1996
---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF INCOME DATA:
Net sales...................................................... $ 961,500 $ 685,500 $ 972,800 $ 556,800
Costs of goods sold............................................ 752,300 542,600 765,500 446,100
Selling and administrative expenses............................ 91,300 62,800 91,500 46,900
Net income..................................................... 61,800 39,900 56,500 41,100
</TABLE>
<TABLE>
<CAPTION>
DEC. 28, MARCH 30, MARCH 31,
1997 1997 1996
------------ ------------ ----------
<S> <C> <C> <C>
(UNAUDITED)
CONSOLIDATED BALANCE SHEET DATA:
Working capital......................................................... $ 266,100 $ 205,200 $ 125,800
Total assets............................................................ 1,233,700 1,070,100 450,500
Total debt.............................................................. 388,300 300,500 13,900
Shareholders' investment................................................ 568,800 504,400 303,100
</TABLE>
Neither the Purchaser nor, to the best knowledge of the Purchaser, any of
the persons listed on Schedule I hereto or any associate of the Purchaser,
including PCC, or any of the persons so listed, beneficially owns or has a right
to acquire directly or indirectly any securities of the Company, and neither the
Purchaser nor, to the best knowledge of the Purchaser, any of the persons or
entities referred to above, including PCC, or any of the respective executive
officers, directors or subsidiaries of any of the foregoing, has effected any
transactions in the securities of the Company during the past 60 days.
Except as set forth in this Offer to Purchase, none of the Purchaser, PCC
or, to the best knowledge of the Purchaser, any of the persons listed on
Schedule I hereto has any contract, arrangement, understanding or relationship
with any other person with respect to any securities of the Company, including,
but not limited to, contracts, arrangements, understandings or relationships
concerning the transfer or voting of such securities, joint ventures, loan or
option arrangements, puts or calls, guaranties of loans, guaranties against loss
or the giving or withholding of proxies. Except as set forth in this Offer to
Purchase, none of
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the Purchaser, PCC or, to the best knowledge of the Purchaser, any of the
persons listed on Schedule I hereto, has had since January 1, 1995 any business
relationships or transactions with the Company or any of its executive officers,
directors or affiliates that are required to be reported under the rules and
regulations of the SEC applicable to the Offer. Except as set forth in this
Offer to Purchase, since January 1, 1995, there have been no contacts,
negotiations or transactions between the Purchaser, PCC or, to the best
knowledge of the Purchaser, any of the persons listed in Schedule I hereto, on
the one hand, and the Company or its affiliates, on the other hand, concerning a
merger, consolidation or acquisition, a tender offer or other acquisition of
securities, an election of directors, or a sale or other transfer of a material
amount of assets.
9. SOURCE AND AMOUNT OF FUNDS.
The Purchaser estimates that the total amount of funds required to purchase
pursuant to the Offer the number of Shares that are outstanding on a fully
diluted basis and to pay fees and expenses related to the Offer will be
approximately $72,000,000. The Purchaser plans to obtain all funds needed for
the Offer from PCC. PCC will make an unsecured advance to the Purchaser prior to
the consummation of the Offer. PCC expects to obtain the funds needed for the
Offer from its general corporate funds and from borrowings under its existing
credit facility.
PCC's existing facility is a credit agreement with a syndicate of 12 banks,
for which Bank of America, N.A. is the agent. The credit agreement contains
various standard financial covenants, including maintenance of minimum net
worth, fixed charge coverage ratio and leverage ratio. The credit agreement
includes a $250 million revolving facility, pursuant to which outstanding
amounts bear interest at interest rates of (a) an offshore rate equal to the
effective LIBOR, plus an applicable margin of 0.30 percent to 0.875 percent
based on the consolidated leverage ratio, (b) an overnight base rate equal to
the higher of the federal funds rate or the prime rate of the agent bank plus
0.50 percent, or (c) a rate negotiable between each bank and PCC. PCC intends to
repay amounts due under the revolving credit facility out of funds generated
from operations or by refinancing the facility at maturity. The revolving credit
line matures in July 2001. The foregoing description of the credit facility is
qualified in its entirety by reference to the text of the credit agreement,
which has been filed by PCC as an exhibit to the Schedule 14D-1 filed with the
SEC in connection with the Offer.
THE OFFER IS NOT CONDITIONED UPON THE PURCHASER OBTAINING FINANCING TO
PURCHASE SHARES PURSUANT TO THE OFFER. SEE INTRODUCTION AND SECTION 13.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.
On September 22, 1997, the Company engaged The Nassau Group, Inc. to assist
in exploring a possible sale of the Company. In November 1997, representatives
of The Nassau Group contacted an officer of PCC to inquire whether PCC would be
interested in receiving descriptive information concerning the Company as a
possible acquisition candidate. On November 25, 1997, PCC signed a
Confidentiality Agreement, and subsequently received descriptive information
concerning the Company and a request for submission of a preliminary indication
of interest. On December 10, 1997, PCC submitted a preliminary indication of
interest. PCC was invited to attend a management presentation on December 22,
1997, which it did. PCC subsequently submitted a draft letter of intent to
acquire the Company, which included a proposal that the purchase price be paid
in a combination of $12.50 per share cash at closing and a contingent payment
right up to an additional $3.00 per share in 1999 if the Company achieved
certain revenue and earnings objectives in 1998.
The Company's Board of Directors met in January 1998, and approved the offer
on a preliminary basis, subject to certain clarifications. The Company's legal
and financial advisors contacted PCC to clarify and negotiate certain details of
the contingent payment and other terms and conditions contained in the letter of
intent. The letter of intent was executed by the Company and PCC on January 21,
1998.
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After the execution and delivery of the letter of intent, PCC entered a
formal due diligence period during which it received access to the Company's
records and documents and received additional management presentations. During
the due diligence period, The Nassau Group contacted PCC to state that the
Company preferred an all-cash transaction, without the contingent payment right
element. Over the course of the following week, PCC completed its due diligence
efforts and analyzed the benefit of a fixed-price transaction in terms of time
to closing and other factors. On February 16, 1998, the PCC Board of Directors
approved a revised purchase price of $15.25 per share. On February 24, 1998, the
Board of Directors of the Company approved the Merger Agreement and the offer
and resolved to recommend the Offer to the Company's stockholders. Immediately
thereafter, PCC, the Purchaser and the Company executed the Merger Agreement,
pursuant to which the Purchaser agreed to make the Offer. In addition, a
Stockholder Agreement by and among PCC, the Purchaser, and each of the executive
officers and directors of the Company was executed, pursuant to which those
fourteen individuals agreed to tender their Shares in the Offer and to sell such
Shares to the Purchaser, at the price paid in the Offer, subject to certain
conditions. The parties publicly announced the transaction on February 25, 1998.
11. THE PURPOSE OF THE OFFER; MERGER AGREEMENT; PLANS FOR THE COMPANY.
PURPOSE
The purpose of the Offer and the Merger is to enable PCC to acquire control
of, and acquire the entire equity interest in, the Company.
MERGER AGREEMENT
Set forth below is a summary of the material provisions of the Merger
Agreement, a copy of which is filed as Exhibit (a)(1) to the Schedule 14D-1.
Such Exhibit should be available for inspection and copies should be obtained,
in the manner set forth in Section 8 (except that it will not be available at
the regional offices of the SEC). The following summary is qualified in its
entirety by reference to the Merger Agreement.
THE OFFER. The Merger Agreement provides that PCC will cause the Purchaser
to commence and the Purchaser will commence the Offer to purchase all of the
Shares for $15.25 per Share. The Merger Agreement specifies certain conditions
for the Offer, including, among other things the Minimum Condition. Pursuant to
the Merger Agreement, the Purchaser expressly reserves the right to change or
waive any such condition, to increase the Offer Price, and to make any other
changes in the terms and conditions of the Offer; provided however, that without
the prior written consent of the Company, the Purchaser will not (i) decrease
the Offer Price, (ii) change or waive the Minimum Condition, (iii) decrease the
number of Shares sought pursuant to the Offer, (iv) impose conditions in
addition to the Offer Conditions or (v) otherwise amend the Offer in any manner
adverse to the Company's stockholders. Notwithstanding the foregoing, the
Purchaser may, without the Company's consent (x) extend the Offer, if at such
original Expiration Date the Minimum Condition or any of the Offer Conditions
have not been satisfied or waived; (y) extend the Offer for any period required
by any rule, regulation, interpretation or position of the SEC; or (z) extend
the Offer for no more than ten (10) business days beyond the original Expiration
Date in the event that the Offer Conditions have been satisfied but less than
ninety percent (90%) of the Shares have been tendered pursuant to the Offer.
THE MERGER. The Merger Agreement provides that, on the terms and subject to
the conditions set forth in the Merger Agreement and in accordance with the
relevant provisions of the NYBCL, as soon as practicable following the
satisfaction or waiver, if permissible, of the conditions described below under
"Conditions to the Merger," the Purchaser will be merged with and into the
Company with the Company as the surviving corporation in the Merger (the
"Surviving Corporation"). The Merger will become effective at the time of filing
of a certificate of merger, as required by the NYBCL (the "Effective Time"). At
the Effective Time, each Share issued and outstanding immediately prior to the
Effective Time (other than Shares owned by PCC, by the Purchaser or by any other
direct or indirect subsidiary of PCC or of the
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Company, or held in the treasury of the Company, all of which will be canceled
without any conversion thereof and no payment or distribution will be made with
respect thereto) will be canceled and converted automatically into the right to
receive an amount equal to the Offer Price in cash (the "Merger Consideration")
net to the holder, without any interest thereon.
STOCKHOLDERS MEETING. The Merger Agreement provides that the Company will,
if required by applicable law, call and hold a special meeting of its
stockholders as soon as practicable following the consummation of the Offer for
the purpose of approving the Merger transaction contemplated thereby and prepare
and file with the SEC under the Exchange Act a proxy statement with respect to
the meeting of stockholders described above (the "Proxy Statement"). The Company
has agreed in the Merger Agreement to use its best efforts to respond to any
comments of the SEC or its staff and to cause the Proxy Statement to be mailed
to the Company's shareholders as promptly as practicable after responding to all
such comments to the satisfaction of the staff, and to keep PCC informed of all
its correspondence with the SEC with respect to the Proxy Statement. Pursuant to
the Merger Agreement, the Company, through its Board of Directors, will
recommend to its stockholders that the Merger Agreement be approved.
Notwithstanding any other provision in this Agreement, if PCC, the
Purchaser, or any affiliate of either of them beneficially owns at least 90% of
the outstanding Shares, the parties agree to take all necessary and appropriate
action to cause the Merger to become effective as soon as practicable after the
Expiration Date, but in no event later than ten business days thereafter,
without a meeting of the stockholders of the Company in accordance with Section
905 of the NYBCL.
STOCK OPTIONS AND WARRANTS. The Merger Agreement provides that (a) the
Company will use its best efforts to enter into an agreement with each holder of
an employee or director stock option or warrant to purchase Shares (in each
case, an "Option" or "Warrant") that provides that, immediately after the date
on which the Purchaser will have accepted for payment all Shares validly
tendered and not withdrawn prior to the expiration date with respect to the
Offer (the "Tender Offer Acceptance Date"), each Option or Warrant that is then
outstanding, whether or not then exercisable or vested, will be canceled by the
Company, and each holder of a canceled Option or Warrant will be entitled to
receive from the Purchaser at the same time as payment for Shares is made by the
Purchaser in connection with the Offer, in consideration for the cancellation of
such Option or Warrant, an amount in cash equal to the product of (i) the number
of Shares previously subject to such Option or Warrant, whether or not then
exercisable or vested, and (ii) the excess, if any, of the Offer Price over the
exercise price per Share previously subject to such Option or Warrant, reduced
by any applicable withholding. Alternatively, the Company may advance funds to
one or more Option holders to permit such holders to exercise their Options
(whether or not then exercisable or vested) and tender the Shares so acquired in
the Offer.
REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains
representations and warranties by the Company, relating to, among other things,
(i) the organization of the Company and other corporate matters, (ii) the
capital structure of the Company, (iii) the authorization, execution, delivery
and consummation of the transactions contemplated by the Merger Agreement, (iv)
consents and approvals, (v) documents filed by the Company with the SEC and the
accuracy of the information contained therein, (vi) the accuracy of the
information contained in documents filed with the SEC in connection with the
Offer and the Merger, (vii) litigation, (viii) environmental matters, (ix)
absence of material changes, and (x) taxes. In addition, the Company represented
to the Purchaser and PCC that the Company had entered into new employment
agreements with each of its officers on terms approved by PCC. The employment
agreements are effective at the closing of the Offer and, except in the case of
Mr. Stephen V. Ardia, supercede the change of control agreements previously
entered into between the Company and each of its officers.
In addition, the Merger Agreement contains representations and warranties by
PCC, relating to, among other things, the organization and ownership of PCC and
the Purchaser, their authority to enter into the Merger Agreement and their
financial capability to purchase the Shares pursuant to the Offer.
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CONDUCT OF BUSINESS PENDING THE MERGER. In the Merger Agreement, the
Company has agreed that, prior to the Effective Time, except as otherwise
provided in the Merger Agreement or with the prior written consent of PCC, the
Company (a) will use its best efforts to (i) keep the business and organization
of the Company intact, and (ii) carry on the business of the Company in its
usual manner; (b) will not declare, pay, or set aside for payment any dividend
or other distribution of money or property in respect of its capital stock, (c)
will not issue any shares of its capital stock, or issue or sell any securities
convertible into, or exchangeable for, or options, warrants to purchase, or
rights to subscribe to, any shares of its capital stock or subdivide or in any
way reclassify any shares of its capital stock, or repurchase, reacquire,
cancel, or redeem any such shares; (d) will use best efforts to ensure that (A)
it preserves and maintains in the ordinary course of business its assets,
property and rights and that it will not encumber any of its material assets
other than in connection with certain existing credit arrangements, (B) it will
pay all debts when due in the usual course of business, (C) it will comply in
all material respects with all applicable laws, and (D) it will maintain its
insurance; (e) it will not incur additional debt, incur or increase any
obligation or liability, except in the ordinary and usual course of its
business; and (f) it will not make any payment to discharge or satisfy any lien
or encumbrance or pay any obligation or liability (fixed or contingent) other
than current liabilities or payments under its revolving credit facility made in
the ordinary course of business and consistent with past practices.
The Company has further agreed that, until the Effective Time of the Merger,
it will not, without prior consent of PCC: (a) acquire any assets other than
assets acquired in the ordinary and usual course of its business and consistent
with past practices; (b) purchase or otherwise acquire, or agree to purchase or
otherwise acquire, any debt or equity securities of any person other than equity
securities issued by a money market fund registered as an investment company
under the Investment Company Act of 1940; (c) enter into any transaction or
contract or make any commitment to do the same, except in the ordinary and usual
course of business and not requiring the payment in any case of an amount in
excess of $50,000 annually; (d) increase the wages, salaries, compensation,
pension, or other benefits payable, or to become payable by it, to any of its
officers, employees, or agents, including without limitation any bonus payments
or severance or termination pay, other than increases in wages and salaries
required by employment arrangements existing on the execution date of the Merger
Agreement or except as expressly contemplated by or otherwise in the ordinary
and usual course of its business; (e) implement or agree to any implementation
of or amendment or supplement to any employee profit sharing, stock option,
stock purchase, pension, bonus, commission, incentive, retirement, medical
reimbursement, life insurance, deferred compensation, severance pay, or any
other employee benefit plan or arrangement; or (f) change its accounting
methods, policies or practices. In addition, the Company (a) will, when the
consent of any third party to the transactions contemplated by the Merger
Agreement is required under the terms of any contract to which it is a party or
by which it is bound, use its best efforts to obtain such consent; (b) will
maintain its books and records in accordance with past practices and in
accordance with generally accepted accounting principles; (c) will pay and
discharge all taxes, assessments, governmental charges, and levies imposed upon
it, its income or profits, or upon any property belonging to it, and in all
cases before the date on which penalties attach thereto; (d) will not amend its
Certificate of Incorporation or Bylaws; and (e) will not transfer any shares of
treasury stock or authorized and unissued stock to its Deferred Compensation
Plan Trust on account of bonus amounts deferred under its Deferred Compensation
Plan relating to calendar year 1998.
PROHIBITION ON SOLICITATION. Pursuant to the Merger Agreement, the Company
has agreed that the Company and its officers, directors, employees,
representatives and agents will cease any discussions or negotiations with any
parties with respect to any Takeover Proposal (as defined below); and, unless
the Merger Agreement has been terminated in accordance with its terms and so
long as neither PCC nor the Purchaser is in material violation of the Merger
Agreement, the Company will not authorize or permit any officer, director or
employee of, or any investment banker, financial advisor, attorney, accountant
or other representative retained by the Company or any of its subsidiaries to
(a) solicit, initiate, encourage or take any other action to facilitate any
inquiries or the making of any proposal that constitutes, or may
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reasonably be expected to lead to, any Takeover Proposal or (b) participate in
any discussions or negotiations regarding any Takeover Proposal.
The Merger Agreement provides that, notwithstanding the foregoing, if at any
time prior to the Effective Time, the Board of Directors of the Company
determines in good faith, after consultation with counsel, that it is necessary
to do so in order to comply with its fiduciary duties to the Company's
stockholders under applicable law, the Company may, in response to an
unsolicited Takeover Proposal, (a) furnish information with respect to the
Company to any person pursuant to a confidentiality agreement in substantially
the same form as that entered into between the Company and PCC and (b)
participate in negotiations regarding such Takeover Proposal.
The Merger Agreement provides further that, unless the Merger Agreement has
been terminated in accordance with its terms and so long as neither PCC nor the
Purchaser is in material violation of the Merger Agreement, neither the Board of
Directors of the Company nor any committee thereof will (a) withdraw or modify,
or propose to withdraw or modify, in a manner adverse to PCC, the approval or
recommendation by such Board of Directors or such committee of the Offer, the
Merger Agreement or the Merger, (b) approve or recommend, or propose to approve
or recommend, any Takeover Proposal or (c) cause the Company to enter into any
agreement with respect to any Takeover Proposal.
Notwithstanding the foregoing, in the event that prior to the Effective
Time, the Board of Directors of the Company determines in good faith, after
consultation with counsel, that it is necessary to do so in order to comply with
its fiduciary duties to the Company's stockholders under applicable law, the
Merger Agreement provides that the Board of Directors of the Company may
withdraw or modify its approval or recommendation of the Offer, the Merger
Agreement and the Merger, approve or recommend a Superior Proposal (as defined
below), or cause the Company to enter into an agreement with respect to a
Superior Proposal, but in each case only at a time that is after the second
business day following PCC's receipt of written notice advising PCC that the
Board of Directors of the Company has received a Superior Proposal, specifying
the material terms and conditions of such Superior Proposal and identifying the
person making such Superior Proposal and that the Company has elected to
terminate the Agreement pursuant to the termination provisions described below.
Pursuant to the Merger Agreement, and in addition to the obligations of the
Company described above, the Company has agreed that (a) it will within 48 hours
advise PCC orally and in writing of any request for information or of any
Takeover Proposal, or any inquiry with respect to or which could lead to any
Takeover Proposal, the material terms and conditions of such request, Takeover
Proposal or inquiry and the identity of the person making such request, Takeover
Proposal or inquiry, and (b) it will keep PCC fully informed of the status and
details (including amendments or proposed amendments) of any such request,
Takeover Proposal or inquiry.
The Merger Agreement does not prohibit the Company from making any
disclosure to the Company's stockholders if, in the opinion of the Board of
Directors of the Company, after consultation with counsel, failure to disclose
would be inconsistent with its fiduciary duties to the Company's stockholders
under applicable law, except that neither the Company nor its Board of Directors
nor any committee thereof may (other than as described above) withdraw or
modify, or propose to withdraw or modify, its position with respect to the Offer
or the Merger or approve or recommend, or propose to approve or recommend, a
Takeover Proposal.
The term "Takeover Proposal" means any inquiry, proposal or offer from any
person relating to any direct or indirect acquisition or purchase of a
substantial amount of assets of the Company or of over 20 percent of any class
of equity securities of the Company, or any tender offer or exchange offer that
if consummated would result in any person beneficially owning 20 percent or more
of any class of equity securities of the Company, any merger, consolidation,
business combination, sale of substantially all the assets, recapitalization,
liquidation or dissolution (other than the transactions contemplated by the
Merger
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Agreement), or any other transactions the consummation of which could reasonably
be expected to impede, interfere with, prevent or materially delay the Offer or
the Merger or which would reasonably be expected to dilute materially the
benefits to PCC of the transactions contemplated by the Merger Agreement, and
the term "Superior Proposal" means any bona fide Takeover Proposal to acquire,
directly or indirectly, for consideration consisting of cash and/or securities,
more than 50% of the shares of common stock of the Company then outstanding or
all or substantially all the assets of the Company and otherwise on terms which
the Board of Directors of the Company determines in its good faith judgment
(after consultation with the Nassau Group, Inc. or another financial advisor of
nationally recognized reputation) to be more favorable to the Company's
stockholders than the Offer and the Merger.
ACCESS. Pursuant to the Merger Agreement, from the date of the Merger
Agreement to the closing date of the Merger, the Company will provide, and cause
each subsidiary to provide, to PCC and its authorized agents, access to their
respective physical assets, facilities, financial information, production
records, contracts and other corporate records and documents during normal
working hours and PCC will be allowed to meet with their respective management
personnel, employees, and any outside consultants, including auditors and
accountants, investment and other bankers, tax and financial advisors, and
environmental consultants.
DIRECTORS. The Merger Agreement provides that, upon the Purchaser's
acceptance for payment and payment for Shares pursuant to the Offer, the
Purchaser will be entitled to designate a number of directors (rounded up to the
nearest whole number) on the Company's Board of Directors that is equal to the
product of the total number of directors on the Company's Board multiplied by
the percentage that the aggregate number of Shares beneficially owned by
Purchaser and its affiliates bears to the number of Shares outstanding. The
Company will promptly, at the request of PCC, either increase the size of the
Company's Board of Directors and/or obtain the resignations of such number of
its current directors as is necessary to enable the Purchaser's designees to be
elected to the Company's Board of Directors as provided above.
CONDITIONS TO MERGER. The respective obligations of each party to the
Merger Agreement to effect the Merger shall be subject to the satisfaction,
prior to the closing of the transactions contemplated by the Merger Agreement,
of the following conditions: (a) all required authorizations, consents, and
approvals of all governmental agencies and authorities shall have been obtained
and the waiting period under the HSR Act will have expired or been terminated
early; (b) if necessary under applicable law, the Merger shall have been
approved by at least 66 2/3 percent of the Shares of the Company; (c) no law,
statute, rule, regulation, decree, order, injunction or ruling by any
governmental entity remains in effect and prohibits, restrains, enjoins or
restricts the consummation of the Merger; (d) no action, suit or other
proceeding or is pending against any party to prohibit, restrain, enjoin,
restrict or otherwise prevent the consummation of the Offer of the Merger; and
(e) the Purchaser shall have previously accepted for payment and paid for all
Shares validly tendered and not withdrawn pursuant to the Offer.
TERMINATION. The Merger Agreement may be terminated at any time prior to
the closing date of the Merger (a) by mutual consent of PCC, Purchaser and the
Company; (b) by either PCC or the Company if (A) any governmental entity has
promulgated or issued a law, statute, rule, regulation, decree, order,
injunction, or ruling or taken any other action prohibiting, restraining,
enjoining, restricting or otherwise prohibiting the Offer or the Merger that has
become final and nonappealable or if clearance under the HSR Act is not received
within 60 days after the filing of the premerger notification and report form,
or (B) the Offer is terminated or expires in accordance with its terms as the
result of failure of any of the conditions set forth in Section 13 without
Purchaser having purchased any Shares pursuant to the Offer except that this
right to terminate is not available to any party whose failure to perform any of
its covenants or agreements under the Merger Agreement results in the failure of
any condition; (c) by PCC, if not then in default, upon written notice to the
Company if (A) the Company breaches any of its representations or warranties or
defaults in the observance or performance of any of its covenants or agreements
except for
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breaches or defaults which, individually or in the aggregate, would not have a
Combined Material Adverse Effect (as defined in the Merger Agreement) or
materially impair the ability of the parties to consummate the transactions
contemplated by the Merger Agreement, or (B) the Board of Directors of the
Company or any committee thereof has withdrawn or modified in a manner adverse
to PCC or Purchaser its approval or recommendation of the Merger or the Merger
Agreement or approved or recommended any Takeover Proposal, or (C) the Company
has entered into a definite agreement with respect to any Superior Proposal; or
(d) by the Company, if not then in default, upon written notice to PCC if (A)
PCC breaches any of its representations or warranties or defaults in the
observance or performance of any of its covenants or agreements, except for
breaches or defaults which, individually or in the aggregate, would not have a
Combined Material Adverse Effect or materially impair the ability of the parties
to consummate the transactions contemplated by the Merger Agreement or (B) if
the Company determines after consultation with its counsel that it is necessary
to terminate the Merger or the Merger Agreement in order for its directors to
comply with their fiduciary duties under applicable law, provided it has
complied with the notice and payment provisions of the Merger Agreement.
In the event of the termination of the Merger Agreement, the Merger
Agreement shall forthwith become void and there shall be no liability on the
part of any party thereto except as described under "Fees and Expenses" below;
provided, however, that nothing in the Merger Agreement will relieve any party
from liability for any breach thereof before termination.
FEES AND EXPENSES. The Merger Agreement provides that, except as provided
in the following paragraph, all fees and expenses incurred in connection with
the Offer, the Merger, the Merger Agreement and the transactions contemplated
thereby will be paid by the party incurring such fees or expenses, whether or
not the Offer or the Merger is consummated.
Under the Merger Agreement the Company will pay, or cause to be paid, to PCC
the sum of $2,000,000 upon demand if the Offer is not consummated due to the
Company's termination of the Merger Agreement in breach of the Merger Agreement.
Alternatively, if the Company determines in good faith, after consultation with
counsel, that it is necessary to terminate the Agreement in order for its
directors to comply with their fiduciary duties to the Company's stockholders
under applicable law, the Company will pay, or cause to be paid, to PCC the sum
of $3,000,000 (the "Termination Fee") upon demand if the Company (i) agrees to a
Superior Proposal within one year of the date of termination of the Agreement,
or (ii) within 270 days after termination of the Merger Agreement the Company
agrees to a Takeover Proposal. In addition, the Merger Agreement provides that
PCC will pay, or cause to be paid, to the Company the sum of $2,000,000 upon
demand if the Offer is not consummated due to PCC's termination of the Merger
Agreement in breach of the Merger Agreement.
STANDSTILL. The Merger Agreement provides that in the event that PCC does
not purchase Shares pursuant to the Offer, other than in circumstances involving
breach by the Company of the Merger Agreement, PCC and its affiliates shall not
directly or indirectly, for a period of 18 months from the date of the Merger
Agreement, unless the Company's Board of Directors approves such action, (i)
acquire or offer to acquire, seek, propose or agree to acquire, by means of a
purchase, agreement, business combination or in any other manner, beneficial
ownership of any securities or assets of the Company, including rights or
options to acquire such ownership, (ii) seek or propose to influence, change or
control the management or Board of Directors of the Company, or (iii) make any
public disclosure or announcement or submit a proposal for a transaction not in
the ordinary course of business, or take any action which could require the
other party to make any public disclosure, with respect to the matters set forth
in the Merger Agreement or in any way participate directly or indirectly in any
solicitation of proxies to vote, or influence any person or entity with respect
to the voting of, any voting securities of the Company. However, the foregoing
restrictions will not apply in the event that the Company receives a Takeover
Proposal from a party that is not affiliated with PCC.
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AMENDMENT. The Merger Agreement may not be amended except by written
agreement of the parties thereto.
STOCKHOLDER AGREEMENT.
The officers and directors of the Company, Stephen V. Ardia, David M. Doin,
George A. Earle, III, George A. Vorsheim, Jr., Mark E. Alexander, Brian
Buchinski, Philip W. Welsh, Kathleen A. Parry, Walter W. Aker, Lars G. Grenback,
Rolf E. Soderstrom, John L. Allen, Angelo Dounoucos and Robert G. James
(collectively, the "Selling Stockholders") are each parties to a Stockholder
Agreement dated February 24, 1998 with PCC and the Purchaser. The Stockholder
Agreement provides that each of the Selling Stockholders will tender their
Shares into the Offer so long as the per Share amount is not less than $15.25 in
cash (net to the seller). Additionally, each Selling Stockholder has agreed to
sell, and the Purchaser has agreed to purchase, his or her Shares at a price per
share equal to $15.25, or such higher price per share as may be offered by the
Purchaser in the Offer, provided that such obligations to purchase and sell are
both subject to (i) the Purchaser having accepted Shares for payment under the
Offer and the Minimum Condition having been satisfied, and (ii) the expiration
or termination of any applicable waiting period under the HSR Act. Each of the
Selling Stockholders has also agreed not to transfer or agree to transfer their
Shares, grant a proxy for their Shares or enter in a voting agreement respecting
them, or take any other action that would in any way restrict, limit or
interfere with the performance of their obligations under the Stockholder
Agreement or the transactions contemplated thereby. The Stockholder Agreement
terminates upon the earlier of (i) the Merger Agreement being terminated by the
Company, PCC or the Purchaser, (ii) the purchase and sale of the Shares of the
Selling Stockholders as described above, or (iii) May 30, 1998. The foregoing
summary of the Stockholder Agreement is qualified in its entirety by the text of
the Stockholder Agreement, a copy of which is filed as Exhibit (c)(2) to the
Schedule 14D-1 and is incorporated herein be reference.
CONFIDENTIALITY AGREEMENT.
On November 25, 1997, PCC entered into a Confidentiality Agreement with the
Company, pursuant to which PCC agreed to treat all information supplied by the
Company or its representatives as confidential and to use such information
solely in connection with the evaluation of a possible transaction with the
Company. PCC further agreed that, in the event that the transactions
contemplated by the Merger Agreement are not consummated, it will (i) return to
the Company all information furnished by the Company or its representatives, and
(ii) refrain, for a period of two years from the date of the Confidentiality
Agreement, from soliciting or hiring any employees of the Company while they are
still employed by the Company.
OPERATIONS FOLLOWING CONSUMMATION OF THE OFFER.
Following consummation of the Offer, the Company will report into PCC Flow
Technologies, Inc., a wholly owned subsidiary of PCC, but otherwise has no
definitive plans to make any material changes in the business or operations of
the Company. Based on its review of the operations of the Company following
consummation of the Offer, PCC may make changes to the Company's assets,
capitalization, organizational structure and management.
APPRAISAL RIGHTS.
Holders of Shares do not have appraisal rights as a result of the Offer.
However, if the Merger is consummated, holders of Shares at the record date for
determining shareholders entitled to vote on the Merger may have, depending on
whether the Shares are still listed on NNM at the Effective Time, certain rights
pursuant to the provisions of Sections 623 and 910 of the NYBCL ("Sections 623
and 910") to dissent and demand appraisal of their Shares provided the merger is
accomplished with the vote of the Company's stockholders (see the heading
"Merger" under this section) and the merger adversely affects
21
<PAGE>
their voting, preferential, and preemptive rights. For a Merger accomplished
without a vote of the Company's stockholders (see the heading "Merger" under
this section), the minority shareholders will have certain rights to dissent and
demand appraisal of their Shares. Under Sections 623 and 910, stockholders who
have the right to dissent in either of the two situations described above, and
who comply with the applicable statutory procedures, will be entitled to receive
a judicial determination of the fair value of their Shares (exclusive of any
element of value arising from the accomplishment or expectation of the proposed
Merger) and to receive payment of such fair value in cash, together with a fair
rate of interest, if any. Any such judicial determination of the fair value of
Shares could be based upon factors other than, or in addition to, the price per
Share to be paid in the Merger or the market value of the Shares. The value so
determined could be more or less than the price per Share to be paid in the
Merger. The foregoing summary of Sections 623 and 910 does not purport to be
complete and is qualified in its entirety by reference to Sections 623 and 910.
GOING PRIVATE TRANSACTIONS.
The SEC 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. However, Rule 13e-3 would be inapplicable if (a)
the Shares are deregistered under the Exchange Act prior to the Merger or (b)
the Merger is consummated within one year after the purchase of the Shares
pursuant to the Offer and the Merger provided for stockholders to receive cash
for their Shares in an amount at least equal to the Offer Price. If applicable,
Rule 13e-3 requires, among other things, that certain financial information
concerning the fairness of the proposed transaction and the consideration
offered to minority stockholders in such transaction to be filed with the SEC
and disclosed to stockholders prior to the consummation of the Merger.
12. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES, NASDAQ EXCHANGE
LISTING AND EXCHANGE ACT REGISTRATION.
The purchase of Shares pursuant to the Offer will reduce the number of
Shares that might otherwise trade publicly and the number of stockholders, which
could adversely affect the liquidity and market value of the remaining Shares
held by the public.
Depending upon the number of Shares acquired pursuant to the Offer and the
Shares accumulated by other parties, it is possible that the Company's Common
Stock will no longer be eligible for listing on the NNM. In that event, the
market for the Shares could be adversely affected.
The Company's Common Stock is registered under the Exchange Act.
Registration of the Company's Common Stock may be terminated upon application of
the Company to the SEC if the Company's Common Stock is not listed on a national
securities exchange and there are fewer than 300 holders of record of the
Company's Common Stock. The Company has informed the Purchaser that there were
approximately 2200 beneficial owners of the Company's Common Stock as of
February 24, 1998. The termination of the registration of the Company's Common
Stock under the Exchange Act would render inapplicable certain provisions of the
Exchange Act, including requirements that the Company furnish stockholders with
proxy materials regarding meetings of stockholders of the Company, the reporting
and short-swing profit liability provisions under Section 16 of the Exchange Act
and the requirements of Rule 13e-3 under the Exchange Act regarding "going
private" transactions.
The Shares are currently "margin securities" under the rules of the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board"). Among
other things, this status has the effect of allowing lenders to extend credit to
stockholders who wish to use the Shares as collateral. Depending upon factors
similar to those relevant to NNM eligibility, following the Offer the Shares
might no longer constitute "margin securities" for purposes of the Federal
Reserve Board's margin regulations, in which event Shares could no longer be
used as collateral for margin loans made by brokers.
22
<PAGE>
The Purchaser currently intends to cause the Company to make an application
for termination of registration of the Shares under the Exchange Act after
consummation of the Merger, and may cause such an application to be filed prior
to the consummation of the Merger if a sufficient number of Shares are purchased
pursuant to the Offer. If registration of the Shares under the Exchange Act were
terminated, the Shares would no longer be "margin securities" or eligible for
listing on the NNM.
13. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, the Purchaser shall not be
required to accept for payment or pay for any Shares tendered pursuant to the
Offer unless (i) the Minimum Condition shall have been satisfied and (ii) any
applicable waiting period under the HSR Act shall have expired or been
terminated. Furthermore, the Purchaser may terminate or amend the Offer and may
postpone the acceptance for payment of and payment for Shares tendered, if at
any time on or after the date of the Merger Agreement, and prior to the
acceptance for payment of Shares, any of the following conditions shall exist:
(a) there shall have been issued and shall remain in effect any
injunction, order or decree by any court or governmental, administrative or
regulatory authority or agency, domestic or foreign, which (i) restrains or
prohibits the making of the Offer or the consummation of the Merger, (ii)
prohibits or limits ownership or operation by the Company, PCC or Purchaser
of all or any material portion of the business or assets of the Company, or
PCC and its subsidiaries, taken as a whole, or compels the Company, PCC or
any of its subsidiaries to dispose of or hold separate all or any material
portion of the business or assets of the Company or PCC and its
subsidiaries, taken as a whole, in each case as a result of the Offer or the
Merger; (iii) imposes material limitations on the ability of PCC or
Purchaser to exercise effectively full rights of ownership of any Shares,
including, without limitation, the right to vote any Shares acquired by
Purchaser pursuant to the Offer, or otherwise on all matters properly
presented to the Company's stockholders, including, without limitation, the
approval and adoption of the Merger Agreement and the Offer and the Merger;
or (iv) requires divestiture by PCC or Purchaser of any material portion of
the Shares;
(b) there shall have been any action taken, or any statute, rule,
regulation order or injunction enacted, entered, enforced, promulgated,
amended, issued or deemed applicable to (i) PCC, the Company or any
subsidiary or affiliate of PCC or (ii) any action, by any legislative body,
court, government or governmental, administrative or regulatory authority or
agency, domestic or foreign (other than, in the case of both (i) and (ii),
the application of the waiting period provisions of the HSR Act to the Offer
or the Merger), which results in any of the consequences referred to in
clauses (i) through (iv) of paragraph (a) above;
(c) there shall have occurred and be continuing (i) a 25 percent or
greater decline in the Dow Jones Average of Industrial Stocks and the
Standard and Poor's 500 Index, measured from the date of the Merger
Agreement, (ii) any general suspension of trading in, or limitation on
prices for, securities on the New York Stock Exchange or in the
over-the-counter market, (iii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States, (iv) any
limitation (whether or not mandatory) by any governmental authority on the
general extension of credit by banks or other financial institutions, or (v)
in the case of any of the foregoing existing at the time of the commencement
of the Offer, in the reasonable judgment of PCC, a material worsening
thereof;
(d) the Company's Board of Directors or any committee thereof shall have
withdrawn or modified in a manner adverse to PCC or Purchaser its approval
or recommendation of the Offer, the Merger or the Merger Agreement or shall
have approved or recommended another merger, consolidation, business
combination with, or acquisition of the Company or all or substantially all
its assets or another tender offer or exchange offer for Shares, or shall
have resolved to do any of the foregoing;
(e) the Company shall have failed to perform any of its covenants in the
Merger Agreement, which failure either individually or in the aggregate
would have a Combined Material Adverse Effect;
23
<PAGE>
(f) the representations and warranties of the Company shall fail to be
true and correct in all material respects on and as of the date made or,
except as otherwise expressly contemplated, on and as of any subsequent date
as if made at and as of such subsequent date, which failure either
individually or in the aggregate would have a Combined Material Adverse
Effect;
(g) the Merger Agreement shall have been terminated in accordance with
its terms;
(h) Purchaser and the Company shall have agreed that Purchaser shall
terminate the Offer or postpone the acceptance for payment of or payment for
Shares thereunder; or
(i) since December 31, 1997, except as (i) expressly contemplated by the
Merger Agreement, (ii) disclosed in any Company SEC Report filed since such
date and prior to the date of the Merger Agreement or (iii) set forth in the
Disclosure Schedule to the Merger Agreement, there shall have occurred any
event having, individually or in the aggregate, a change or effect that is
materially adverse to the business, operations, properties, financial
condition, assets or liabilities (including, without limitation, contingent
liabilities) of the Company.
The foregoing conditions are for the sole benefit of the Purchaser and PCC
and may be asserted by the Purchaser or PCC regardless of the circumstances
giving rise to any such condition or may be waived by the Purchaser and PCC in
whole or in part at any time and from time to time in its sole discretion. The
failure by the Purchaser or PCC at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right; the waiver of any such
right with respect to particular facts and other circumstances shall not be
deemed a waiver with respect to any other facts and circumstances; and each such
right shall be deemed an ongoing right that may be asserted at any time and from
time to time.
14. CERTAIN LEGAL MATTERS.
Except as described below, the Purchaser is not aware of any approval or
other action by any federal, state or foreign governmental or administrative
agency that would be required for the acquisition of the Shares by the Purchaser
pursuant to this Offer. Should any approval or other action be required, it is
presently contemplated that such approval or action would be sought. However,
while there is no present intent to delay the purchase of the Shares tendered
pursuant to this Offer pending the outcome of any such matter, there can be no
assurance that any such approval or other action, if needed, could be obtained
without substantial delay or conditions, or at all. The Purchaser's obligation
under the Offer to accept for payment and pay for Shares is subject to certain
conditions, including conditions relating to the legal matters discussed in this
Section 14. See Section 13.
STATE TAKEOVER LAWS. Section 912 of the NYBCL prohibits a New York
corporation such as the Company from engaging in a "Business Combination"
(defined as a variety of transactions, including mergers) with an "Interested
Shareholder" (defined generally as a person that is the beneficial owner of 20%
or more of a corporation's outstanding voting stock) for a period of five years
following the date that such person became an Interested Shareholder unless (a)
prior to the date such person became an Interested Shareholder, the board of
directors of the corporation approved either the Business Combination or the
transaction that resulted in the person becoming an Interested Shareholder, (b)
subsequent to the date such person became an Interested Stockholder, the
Business Combination is approved by the board of directors of the corporation
and authorized at a meeting of stockholders, and not by written consent, by the
affirmative vote of a majority of the holders of the outstanding voting stock of
the corporation not owned by the Interested Stockholder, or (c) the shareholders
of the corporation as a result of the Business Combination receive fair and
adequate consideration as determined under the statute. Because the Company's
Board of Directors has approved the Offer, the prohibition of section 912 will
not apply to the Merger. The foregoing summary of Section 912 does not purport
to be complete and is qualified in its entirety by reference to Section 912.
The Purchaser and PCC do not believe any of the statutes adopted by states
in which the Company conducts business by their terms apply to the Offer, and
except as described in this Offer to Purchase, the
24
<PAGE>
Purchaser has not complied with any state takeover law. Pursuant to the Merger
Agreement, if any state's takeover law should become applicable to the Offer of
the Merger, the Purchaser, PCC and the Company have agreed to use their best
efforts to take such actions as are necessary so that the transactions
contemplated by the Merger Agreement may be consummated as promptly as
practicable on the terms contemplated thereby and otherwise to minimize the
effects of any such statute on such transactions. Should any government official
or third party seek to apply any state takeover law to the Offer other than
those described in this Offer to Purchase, the Purchaser will take such action
as then appears desirable and currently anticipate that it will contest the
validity or applicability of such statute in appropriate court proceedings.
If it is asserted that one or more state takeover laws other than those
described in this Offer to Purchase apply to the Offer and it is not determined
by all appropriate courts that such act or acts do not apply or are invalid as
applied to the Offer, the Purchaser might be required to file certain
information with, or receive approvals from, the relevant state authorities. In
addition, if enjoined, the Purchaser might be unable to accept for payment any
Shares tendered pursuant to the Offer, or be delayed in consummating the Offer.
In such case, the Purchaser may not be obligated to accept for payment any
Shares tendered. See Section 13.
ANTITRUST LAWS. The Antitrust Division and the FTC frequently scrutinize
the legality under the antitrust laws of transactions such as the proposed
acquisition of the Company by the Purchaser. At any time before or after the
Purchaser's acquisition of Shares pursuant to the Offer, the Antitrust Division
or the FTC could take such action under the antitrust laws as it deems necessary
or desirable in the public interest, including seeking to enjoin the purchase of
Shares pursuant to the Offer or the consummation of the proposed Merger or
seeking the divestiture of Shares acquired by the Purchaser or the divestiture
of substantial assets of the Company or its subsidiaries or PCC 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.
15. FEES AND EXPENSES.
The Purchaser has retained The Bank of New York to act as Depositary and
Morrow & Co., Inc. to serve as Information Agent in connection with the Offer.
The Purchaser will pay each of the Depositary and the Information Agent
reasonable and customary compensation for their services in connection with the
Offer, plus reimbursement for out-of-pocket expenses, and will indemnify each of
them against certain liabilities and expenses in connection therewith, including
certain liabilities under the federal securities laws.
Neither the Purchaser nor PCC will pay any fees or commissions to any broker
or dealer or other person (other than the Information Agent) in connection with
the solicitation of tenders of Shares pursuant to the Offer. Brokers, dealers,
commercial banks and trust companies will be reimbursed by the Purchaser for
customary mailing and handling expenses incurred by them in forwarding material
to their customers.
16. MISCELLANEOUS.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. However, the Purchaser may, in its sole discretion, take such
action as it may deem necessary to make the Offer in any such jurisdiction and
extend the Offer to holders of Shares in such jurisdiction.
Neither the Purchaser nor PCC is aware of any jurisdiction in which the
making of the Offer or the acceptance of Shares in connection therewith would
not be in compliance with the laws of such jurisdiction. Consequently, the Offer
is currently being made to all holders of Shares. To the extent the Purchaser
25
<PAGE>
or PCC becomes aware of any law that would limit the class of offers in the
Offer, the Purchaser will amend the Offer and, depending on the timing of such
amendment, if any, will extend the Offer to provide adequate dissemination of
such information to holders of Shares prior to the expiration of the Offer.
The Purchaser has filed with the SEC a Statement on Schedule 14D-1
(including exhibits) pursuant to Rule 14d-3 under the Exchange Act, furnishing
certain additional information with respect to the Offer, and may file
amendments thereto. Such Schedule 14D-1 and any amendments thereto, including
exhibits, may be examined and copies may be obtained from the principal office
of the SEC in Washington, D.C. and the NNM in the manner set forth in Section 8.
No person has been authorized to give any information or make any
representation on behalf of the Purchaser not contained in this Offer to
Purchase or in the Letter of Transmittal and, if given or made, such information
or representation must not be relied upon as having been authorized.
March 3, 1998
EOC ACQUISITION CORPORATION
26
<PAGE>
SCHEDULE I
DIRECTORS AND CORPORATE OFFICERS
OF THE PURCHASER AND PCC
(Note: footnote (+) appears at end of this Schedule I)
Set forth in the table below are the names and present principal occupations
or employments, and the material occupations, positions, offices, and
employments during the past five years, for the directors and corporate officers
of EOC Acquisition Corporation and Precision Castparts Corp., and the name,
principal business and address for any corporation or other organization in
which such employment is carried on. Each person listed below is of United
States citizenship, and, unless otherwise indicated, positions have been held
for the past five years. Directors are identified by an asterisk (*) and the
year in which such person became a director is indicated in parentheses.
PRECISION CASTPARTS CORP.
<TABLE>
<CAPTION>
NAME AND RESIDENCE PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT (AND PRINCIPAL BUSINESS);
OR BUSINESS ADDRESS MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
- ------------------------------------- ---------------------------------------------------------------------------
<S> <C>
William C. McCormick* (1986) Chairman of PCC since October 1994; Chief Executive Officer of PCC since
Precision Castparts Corp. August 1991; from 1985-97, President of PCC
4650 SW Macadam, Suite 440
Portland, OR 97201
Vernon E. Oechsle* (1996) President and Chief Executive Officer of Quanex Corporation, a manufacturer
Precision Castparts Corp.+ of steel bars, aluminum shapes and steel tubes and pipes, since 1995;
formerly Chief Operating Officer of Quanex Corporation
Steven C. Riedel* (1997) President and Chief Operating Officer of PCC since May 1997; formerly Vice
Precision Castparts Corp.+ President and General Manager of the Latin America operations of GE
Appliances, a division of General Electric Company
Peter R. Bridenbaugh* (1995) Retired; through December 1997, Executive Vice President-- Automotive,
Precision Castparts Corp.+ Aluminum Co. of America, an integrated producer of aluminum and other
products for the packaging, aerospace, automotive, building and
construction, and commercial and industrial markets; from 1994-1996,
Executive Vice President and Chief Technical Officer, Aluminum Co. of
America; from 1991-1994, Executive Vice President--Science and
Technology, Engineering, Environment, Safety & Health, Aluminum Co. of
America
Steven G. Rothmeier* (1994) Chairman and Chief Executive Officer of Great Northern Capital, a private
Precision Castparts Corp.+ investment and merchant banking firm, since March 1993; formerly
President of IAI Capital Group; Director of Honeywell, Inc., E.W. Blanch
Holdings, Inc., Department 56, Inc., and Waste Management, Inc.
Dean T. DuCray* (1996) Vice President and Chief Financial Officer of York International
Precision Castparts Corp.+ Corporation, a manufacturer of heating, air conditioning, ventilation and
refrigeration equipment, since 1987
</TABLE>
S-1
<PAGE>
<TABLE>
<CAPTION>
NAME AND RESIDENCE PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT (AND PRINCIPAL BUSINESS);
OR BUSINESS ADDRESS MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
- ------------------------------------- ---------------------------------------------------------------------------
<S> <C>
Don R. Graber* (1995) President and Chief Operating Officer of Huffy Corporation, a manufacturer
Precision Castparts Corp.+ of outdoor leisure products and services, since July 1996; from 1994 to
1996, President of Worldwide Household Products Group, The Black & Decker
Corporation; from 1992 to 1994, President of Black & Decker International
Group
Roy M. Marvin* (1967) Retired; Through May 1996, Vice President--Administration and Secretary of
Precision Castparts Corp.+ PCC
William D. Larsson Vice President and Chief Financial Officer of PCC
Precision Castparts Corp.+
Peter G. Waite Executive Vice President of PCC and President of PCC Airfoils, Inc.
Precision Castparts Corp.+
Mark Donegan Executive Vice President of PCC and President of PCC Structurals, Inc.
Precision Castparts Corp.+
David W. Norris Executive Vice President of PCC and President of PCC Flow Technologies,
Precision Castparts Corp.+ Inc. since 1996; President of Keystone Controls (North America) Division
of Keystone International, Inc., from 1991-1996
Gregory M. Delaney Executive Vice President of PCC and President of PCC Specialty Products,
Precision Castparts Corp.+ Inc. since 1998; President of Wygand Industrial Division of Emerson
Electric Company, 1997-1998; Executive Vice President of Sales, Marketing
and Engineering, Wygand Industrial Division of Emerson Electric Company,
1996-1997; Vice President of Marketing, Refrigerator Division of Copeland
Corporation, a subsidiary of Emerson Electric Company, 1995-1996; General
Manager, Condensing Unit Division of Copeland Corporation, 1993-1995.
James A. Johnson Treasurer of PCC
Precision Castparts Corp.+
Shawn R. Hagel Corporate Controller of PCC since 1997; Manager of Financial Reporting of
Precision Castparts Corp.+ PCC, 1995-1997; Manager, Deloitte & Touche LLP, 1993-1995
Donna C. Ragan Director of Taxes of PCC since 1997; Tax Manager of PCC, 1994-1997; Tax
Precision Castparts Corp.+ Manager of NAACO Materials Handling, Inc., 1993-1994
</TABLE>
S-2
<PAGE>
EOC ACQUISITION CORPORATION
<TABLE>
<CAPTION>
NAME AND RESIDENCE PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT (AND PRINCIPAL BUSINESS);
OR BUSINESS ADDRESS MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
- -------------------------------------- --------------------------------------------------------------------------
<S> <C>
William C. McCormick* Chairman of PCC since October 1994; Chief Executive Officer of PCC since
EOC Acquisition Corporation August 1991; from 1985-97, President of PCC
4650 SW Macadam, Suite 440
Portland, OR 97201
William D. Larsson* Vice President and Chief Financial Officer of PCC; Vice President of the
EOC Acquisition Corporation+ Purchaser
Steven C. Riedel* President and Chief Operating Officer of PCC since May 1997; formerly Vice
EOC Acquisition Corporation+ President and General Manger of the Latin America operations of GE
Appliances, a division of General Electric Company
David W. Norris* President of PCC Flow Technologies, Inc.; Chief Executive Officer of the
EOC Acquisition Corporation+ Purchaser
</TABLE>
- ------------------------
+ The principal business and address of the corporation or other organization
for which the listed individual's principal occupation is conducted is set
forth at the first place at which the name of such corporation or other
organization appears in this SCHEDULE I.
S-3
<PAGE>
THE DEPOSITARY FOR THE OFFER IS:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT
(FOR ELIGIBLE INSTITUTIONS COURIER:
ONLY)
THE BANK OF NEW YORK (212) 815-6213 TENDER & EXCHANGE DEPARTMENT
PO BOX 11248 101 BARCLAY STREET
CHURCH STREET STATION RECEIVE AND DELIVER WINDOW
NEW YORK, NEW YORK 10286-1248 NEW YORK, NEW YORK 10286
</TABLE>
FOR INFORMATION TELEPHONE:
(800) 507-9357
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TO A NUMBER OTHER THAN AS
SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
Questions or requests for assistance may be directed to the Information
Agent at the address and telephone number set forth below. Additional copies of
this Offer to Purchase, the Letter of Transmittal and other tender offer
materials may be obtained from the Information Agent as set forth below, and
will be furnished promptly at the Purchaser's expense. Stockholders may also
contact their brokers, dealers, banks or trust companies or other nominees for
assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
909 Third Avenue
20th Floor
New York, New York 10022
(212) 754-8000
BANKS AND BROKERAGE FIRMS PLEASE CALL:
(800) 662-5200
Toll Free: (800) 566-9061
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
ENVIRONMENT ONE CORPORATION
PURSUANT TO THE OFFER TO PURCHASE DATED MARCH 3, 1998
BY
EOC ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
PRECISION CASTPARTS CORP.
----------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, EASTERN TIME, ON MONDAY, MARCH 30, 1998
UNLESS THE OFFER IS EXTENDED
- --------------------------------------------------------------------------------
THE DEPOSITARY FOR THE OFFER IS:
The Bank of New York
<TABLE>
<S> <C> <C>
BY MAIL: FACSIMILE: BY HAND OR OVERNIGHT
Tender & Exchange (For Eligible Institutions Only) COURIER:
Department (212) 815-6213 Tender & Exchange
PO Box 11248 For Information Telephone Department
Church Street Station (800) 507-9357 101 Barclay Street
New York, New York Receive and Deliver
10286-1248 Window
New York, New York
10286
</TABLE>
Your bank or broker can assist you in completing this Letter of Transmittal.
The instructions enclosed with this Letter of Transmittal must be followed and
should be read carefully. Questions and requests for additional copies of the
Offer to Purchase (as defined below) and this Letter of Transmittal may be
directed to the Information Agent as indicated in Instruction 8.
Delivery of this Letter of Transmittal to an address other than as set forth
above, or transmission of instructions via facsimile transmission or telex
number other than as set forth above, will not constitute valid delivery.
This Letter of Transmittal is to be completed by stockholders if
certificates for Shares (as defined below) are to be forwarded herewith or if
tenders of Shares are to be made by book-entry transfer into the account of The
Bank of New York as Depositary (the "Depositary") at The Depository Trust
Company ("DTC") (the "Book-Entry Transfer Facility") pursuant to the procedures
set forth in Section 3 of the Offer to Purchase. Stockholders who tender Shares
by book-entry transfer are referred to herein as
<PAGE>
"Book-Entry Stockholders." Holders of Shares whose certificates for such Shares
(the "Share Certificates") are not immediately available or who cannot deliver
their Share Certificates and all other required documents to the Depositary
prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase),
or who cannot complete the procedure for book-entry transfer on a timely basis,
must tender their Shares according to the guaranteed delivery procedure set
forth in Section 3 of the Offer to Purchase. See Instruction 2. DELIVERY OF
DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
-------------------------------------------------------------------------------------------
NAME(S) & ADDRESS(ES) OF REGISTERED HOLDER(S) SHARE CERTIFICATE(S) AND SHARE(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS TENDERED (ATTACH ADDITIONAL
NAME(S) APPEAR(S) ON CERTIFICATE(S)) SIGNED LIST IF NECESSARY)
- ---------------------------------------------------------------------------------------------
TOTAL NUMBER
SHARE OF SHARES NUMBER
CERTIFICATE(S) REPRESENTED BY OF SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
<S> <C> <C> <C>
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
TOTAL SHARES
- ---------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by Book-Entry Stockholders.
** Unless otherwise indicated, all Shares represented by certificates delivered
to the Depositary will be deemed to have been tendered. See Instruction 4.
/ / CHECK HERE IF SHARES ARE BEING TENDERED BY BOOK-ENTRY TRANSFER MADE TO THE
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution ______________________________________________
Check Box of Book-Entry Transfer Facility:
/ / DTC
Account Number _____________________________________________________________
Transaction Code Number ____________________________________________________
/ / CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s) ____________________________________________
Window Ticket Number (if any) ______________________________________________
Date of Execution of Notice of Guaranteed Delivery _________________________
Name of Institution which Guaranteed Delivery ______________________________
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to EOC Acquisition Corporation, a New York
corporation, (the "Purchaser"), the above-described shares of common stock, $.10
par value (the "Shares"), of Environment One Corporation, a New York corporation
(the "Company"), at a purchase price of $15.25 per Share, net to the seller in
cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase dated March 3, 1998 and any amendments or supplements thereto (the
"Offer to Purchase"), and in this Letter of Transmittal (which together
constitute the "Offer"), receipt of which is hereby acknowledged. The
undersigned understands that the Purchaser reserves the right, with the written
consent of the Company, to transfer or assign, in whole or from time to time in
part, the right to purchase all or any portion of the Shares tendered pursuant
to the Offer.
Subject to, and effective upon, acceptance for payment for the Shares
tendered herewith in accordance with the terms and conditions of the Offer, the
undersigned hereby sells, assigns and transfers to, or upon the order of, the
Purchaser all right, title and interest in and to all of the Shares that are
being tendered hereby and any and all noncash dividends, distributions
(including additional Shares) or rights declared, paid or issued with respect to
the tendered Shares on or after February 24, 1998 and payable or distributable
to the undersigned on a date prior to the transfer to the name of the Purchaser
or a nominee or transferee of the Purchaser on the Company's stock transfer
records of the Shares tendered herewith (a "Distribution"). The undersigned
hereby appoints the Depositary the true and lawful agent and attorney-in-fact of
the undersigned with respect to such Shares (and any Distribution) with full
power of substitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest) to (a) deliver such Share Certificates (as
defined herein) (and any Distribution) or transfer ownership of such Shares (and
any Distribution) on the account books maintained by the Book-Entry Transfer
Facility, together in either case with appropriate evidence of transfer and
authenticity, to the Depositary for the account of the Purchaser, and (b)
present such Shares (and any Distribution) for transfer on the books of the
Company, and receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares (and any Distribution), all in accordance
with the terms and subject to the conditions of the Offer.
The undersigned irrevocably appoints designees of the Purchaser as such
stockholder's proxy, each with full power of substitution to the full extent of
such stockholder's rights with respect to the Shares tendered by such
stockholder and accepted for payment by the Purchaser and with respect to any
Distribution. Such appointment will be effective when, and only to the extent
that, the Purchaser accepts such Shares for payment. Upon such acceptance for
payment, all prior proxies given by such stockholder with respect to such Shares
(and, if applicable, such other shares and securities) will be revoked without
further action, and no subsequent proxies may be given nor any subsequent
written consents executed (and if given or executed, will not be deemed
effective). The designees of the Purchaser will be empowered to exercise all
voting and other rights of such stockholder as they in their sole discretion may
deem proper at any annual or special meeting of the Company's stockholders or
any adjournment or postponement thereof, by written consent in lieu of any such
meeting or otherwise. The Purchaser reserves the right to require that, in order
for Shares to be deemed validly tendered, immediately upon the Purchaser's
payment for such Shares, the Purchaser must be able to exercise full voting
rights with respect to such Shares.
The undersigned hereby represents and warrants that (a) the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby (and any Distribution) and (b) when the Shares are accepted for
payment by the Purchaser, the Purchaser will acquire good, marketable and
unencumbered title to such Shares (and any Distribution), free and clear of all
liens, restrictions, charges and encumbrances, and the same will not be subject
to any adverse claim. The undersigned, upon request, will execute and deliver
any additional documents deemed by the Depositary or the Purchaser to be
necessary or desirable to complete the sale, assignment and transfer of the
Shares tendered hereby (and any Distribution). In addition, the undersigned
shall promptly remit and transfer to the Depositary for the account of the
Purchaser any and all Distributions in respect of the Shares tendered hereby,
accompanied
<PAGE>
by appropriate documentation of transfer, and pending such remittance or
appropriate assurance thereof, the Purchaser will be, subject to applicable law,
entitled to all rights and privileges as owner of such Distribution and may
withhold the entire purchase price or deduct from the purchase price the amount
or value thereof, as determined by the Purchaser in its sole discretion.
All authority herein conferred or agreed to be conferred shall not be
affected by and shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, executors, administrators, successors and assigns of
the undersigned.
Tenders of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date and, unless theretofore accepted for payment by the Purchaser
pursuant to the Offer, may also be withdrawn at any time after May 1, 1998. See
Section 4 of the Offer to Purchase.
The undersigned understands that tenders of Shares pursuant to any of the
procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions set forth in the
Offer, including the undersigned's representations that the undersigned owns the
Shares being tendered.
Unless otherwise indicated herein under "Special Payment Instructions,"
please mail the check for the purchase price and/or issue or return any
certificate(s) for Shares not tendered or not accepted for payment (and
accompanying documents, as appropriate) to the address(es) of the registered
holder(s) appearing under "Description of Shares Tendered." In the event that
both the Special Delivery Instructions and Special Payment Instructions are
completed, please issue the check for the purchase price and/or issue or return
any certificate(s) for Shares not tendered or accepted for payment in the name
of, and deliver such check and/or such certificate to, the person or persons so
indicated.
The undersigned recognizes that the Purchaser has no obligation, pursuant to
the Special Payment Instructions, to transfer any Shares from the name(s) of the
registered holder(s) thereof if the Purchaser does not accept for payment any of
the Shares so tendered.
<PAGE>
- -------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment are to be issued in the name of someone other than the
undersigned.
Issue / / check / / certificate(s) to:
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
__________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9 INCLUDED HEREIN)
- ------------------------------------------------------
- ------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment are to be mailed to someone other than the undersigned,
or to the undersigned at an address other than that shown above.
Mail / / check / / certificate(s) to:
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
__________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9 INCLUDED HEREIN)
- ------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
SIGN HERE
AND COMPLETE SUBSTITUTE FORM W-9 INCLUDED HEREIN
____________________________________________________________________________
____________________________________________________________________________
SIGNATURE(S) OF HOLDER(S)
Dated: __________________, 1998
(Must be signed by the registered holder(s) exactly as name(s) appear(s)
on certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or another acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 5.)
Name(s) ____________________________________________________________________
____________________________________________________________________________
(PLEASE TYPE OR PRINT)
Capacity (full title) ______________________________________________________
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number______________________________________________
Tax Identification or Social Security No. __________________________________
COMPLETE SUBSTITUTE FORM W-9 INCLUDED HEREIN
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature _______________________________________________________
Name _______________________________________________________________________
(PLEASE TYPE OR PRINT)
Title ______________________________________________________________________
Name of Firm _______________________________________________________________
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
Dated: __________________, 1998
- --------------------------------------------------------------------------------
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required (i) if this Letter of Transmittal is signed by the
registered holder(s) of Shares (which term, for purposes of this document, shall
include any participant in the Book-Entry Transfer Facility whose name appears
on a security position listing as the owner of Share(s)), unless such holder has
completed either the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" included herein or (ii) if such Shares
are tendered for the account of a firm which is a member of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc. or by a commercial bank or trust company having an office or
correspondent in the United States (each of the foregoing being referred to as
an "Eligible Institution"). In all other cases, all signatures on this Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of
Transmittal is to be completed either if certificates are to be forwarded
herewith or if tenders are to be made pursuant to the procedure for tender by
book-entry transfer set forth in Section 3 of the Offer to Purchase. Share
Certificates, or timely confirmation (a "Book-Entry Confirmation") of a
book-entry transfer of such Shares into the Depositary's account at the
Book-Entry Transfer Facility, as well as this Letter of Transmittal (or a
facsimile hereof), properly completed and duly executed, with any required
signature guarantees and any other documents required by this Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth herein prior to the Expiration Date. Stockholders whose Share Certificates
are not immediately available, or who cannot deliver their Share Certificates
and all other required documents to the Depositary prior to the Expiration Date,
or who cannot complete the procedure for delivery by book-entry transfer on a
timely basis, may tender their Shares by properly completing and duly executing
a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedure
set forth in Section 3 of the Offer to Purchase. Pursuant to such procedure: (i)
such tender must be made by or through an Eligible Institution; (ii) a properly
completed and duly executed Notice of Guaranteed Delivery, substantially in the
form made available by the Purchaser (with any required signature guarantees)
must be received by the Depositary prior to the Expiration Date; and (iii) the
Share Certificates (or a Book-Entry Confirmation) representing all tendered
Shares, in proper form for transfer, in each case together with the Letter of
Transmittal (or a facsimile hereof), properly completed and duly executed, with
any required signature guarantees and any other documents required by this
Letter of Transmittal, must be received by the Depositary within three Nasdaq
National Market trading days after the date of execution of such Notice of
Guaranteed Delivery.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH THE 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.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or a facsimile thereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space herein is inadequate, the certificate
numbers and/or the number of Shares should be listed on a separate signed
schedule attached hereto.
4. PARTIAL TENDERS. (NOT APPLICABLE TO BOOK-ENTRY-STOCKHOLDERS.) If fewer
than all the Shares evidenced by any Share Certificate submitted 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 cases, new Share Certificates for
the Shares that were evidenced by your old Share Certificates, but were not
tendered by you, will be sent to you, unless otherwise provided in the
appropriate box on this Letter of Transmittal, as soon as practicable after the
purchase of Shares pursuant to the Offer. All Shares represented by Share
Certificates delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificate without alteration, enlargement or any change
whatsoever.
<PAGE>
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificate or stock power is signed by
a trustee, executor, administrator, attorney-in-fact, officer of a corporation
or another acting in a fiduciary or representative capacity, such person should
so indicate when signing, and proper evidence satisfactory to the Purchaser of
such person's authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment of the purchase price for
Shares is to be made to or certificates for Shares not tendered or purchased are
to be issued in the name of a person other than the registered holder(s).
Signatures on such certificates or stock powers must then be guaranteed by an
Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificate(s) listed, the certificate(s) must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear on the certificate(s).
Signatures on such certificates or stock powers must be guaranteed by an
Eligible Institution.
6. STOCK TRANSFER TAXES. Except as provided in this Instruction 6, the
Purchaser will pay any stock transfer taxes with respect to the transfer and
sale of the purchased Shares pursuant to the Offer. If, however, payment of the
purchase price is to be made to, or (in the circumstances permitted hereby and
if applicable) if certificates for Shares not tendered or purchased are to be
registered in the name of, any person other than the registered holder, or if
tendered certificates are registered in the name of any person other than the
person(s) signing this Letter of Transmittal, the amount of stock transfer taxes
(whether imposed on the registered holder or such person) payable on account of
the transfer to such person will be deducted from the purchase price if
satisfactory evidence of the payment of such taxes, or exemption therefrom, is
not submitted. Except as provided in this Instruction 6, it will not be
necessary for transfer tax stamps to be affixed to the certificate(s) listed in
this Letter of Transmittal.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued
in the name of, and/or certificates for Shares not tendered or not accepted for
payment are to be issued or returned to, a person other than the signer of this
Letter of Transmittal, or if a check and/or such certificates are to be mailed
to a person other than the signer of this Letter of Transmittal or to an address
other than that shown in this Letter of Transmittal, the appropriate boxes on
this Letter of Transmittal should be completed.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions or requests for
assistance may be directed to the Information Agent at the address and telephone
numbers set forth below. Additional copies of the Offer to Purchase, this Letter
of Transmittal and the Notice of Guaranteed Delivery may also be obtained from
the Information Agent or brokers, dealers, commercial banks or trust companies.
9. WAIVER OF CONDITIONS. The conditions of the Offer may be waived by the
Purchaser in whole or in part at any time and from time to time in its sole
discretion. See Section 13 of the Offer to Purchase.
10. SUBSTITUTE FORM W-9. The tendering stockholder generally is required
to provide the Depositary with a correct Taxpayer Identification Number ("TIN"),
generally the stockholder's social security or federal employer identification
number, on Substitute Form W-9 contained herein. Failure to provide the
information on the form may subject the tendering stockholder to 31% federal
income tax withholding on the payment of the purchase price for Shares. The box
in Part I of the Substitute Form W-9 may be checked if the stockholder has not
been issued a TIN and has applied for a number or intends to apply for a number
in the near future. If the box in Part I is checked and the Depositary is not
provided with a TIN within 60 days, the Depositary will thereafter withhold 31%
of any purchase price payment made for Shares before a TIN is provided to the
Depositary.
<PAGE>
IMPORTANT TAX INFORMATION
Under federal income tax law, a tendering stockholder whose tendered shares
are accepted for purchase generally is required by law to provide the Depositary
(as payer) with such stockholder's correct TIN on Substitute Form W-9 contained
herein. 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 any stockholder with respect to
Shares pursuant to the Offer may be subject to backup withholding.
Certain stockholders (including, among others, 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 can be
obtained from the Depositary. See the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional
instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the 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 withholding results in an overpayment
of taxes, a refund may be obtained.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments of the purchase price for Shares,
each tendering stockholder generally is required to notify the Depositary of his
or her correct TIN by completing the Substitute Form W-9 contained herein,
certifying that the TIN provided on Substitute Form W-9 is correct (or that such
stockholder is awaiting a TIN), and that (1) such stockholder has not been
notified by the Internal Revenue Service that such stockholder is subject to
backup withholding as a result of a failure to report all interest or dividends,
or (2) the Internal Revenue Service has notified such stockholder that such
stockholder is no longer subject to backup withholding (see Part II of
Substitute Form W-9).
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 holder 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 guidance on which number to report.
IMPORTANT: IF A SHAREHOLDER DESIRES TO ACCEPT THE OFFER, THIS LETTER OF
TRANSMITTAL (OR A FACSIMILE HEREOF), TOGETHER WITH CERTIFICATES OR CONFIRMATION
OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS, OR THE NOTICE OF
GUARANTEED DELIVERY, MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION
DATE.
FOR ADDITIONAL INFORMATION, PLEASE CONTACT:
[LOGO]
909 Third Avenue
20th Floor
New York, New York 10022
(212) 754-8000
BANKS AND BROKERAGE FIRMS PLEASE CALL:
(800) 662-5200
Toll Free: (800) 566-9061
<PAGE>
PAYER'S NAME: THE BANK OF NEW YORK, AS DEPOSITARY AGENT
<TABLE>
<C> <S>
- ----------------------------------------------------------------------------------------
SUBSTITUTE PART I -- Taxpayer Identification Number (TIN)
FORM W-9 Please enter your correct number in the appropriate box
Department of the Treasury, below. NOTE: If the account is more than one name, see
Internal Revenue Service the chart on the enclosed form, Guidelines for
Certification of Taxpayer Identification Number on
Substitute Form W-9, for guidance on which number to
enter.
Social Security Number OR Employer Identification
Payer's Request for Number
Taxpayer Identification
Number and Certification
------------------------ ------------------------
If you do not have a TIN, see the instructions "How to
Get a TIN" and check the box below.
TIN Applied For / /
---------------------------------------------------------
PART II -- For Payees Exempt from Backup Withholding (see
Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9)
- ----------------------------------------------------------------------------------------
PART III CERTIFICATION -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am
waiting for a number to be issued to me), and
(2) I am not subject to backup withholding because: (a) I am exempt from backup
withholding, or (b) 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 and dividends, or (c) 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 IRS that you are currently subject to backup withholding because you have failed to
report all interest and dividends on your tax return.
Signature(s) ------------------------------------------------ Date -------------------
- ----------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF
ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
<PAGE>
Exhibit (a)(3)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
NAME. If you are an individual, you must generally enter 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.
<TABLE>
<CAPTION>
- ------------------------------------------------------------
GIVE THE NAME AND
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ------------------------------------------------------------
<C> <S> <C>
1. Individual The individual
2. Two or more individuals The actual owner of the
(joint account) account or, if combined
funds, the first
individual on the
account(1)
3. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
4. a The usual revocable The grantor-trustee(1)
savings trust account
(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)
account
6. Sole Proprietorship The owner (3)
- ------------------------------------------------------------
- ------------------------------------------------------------
GIVE THE NAME AND
EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
<CAPTION>
- ------------------------------------------------------------
<C> <S> <C>
7. A valid trust, estate, or Legal entity (4)
pension trust
8. Corporate The corporation
9. 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 The public entity
Department of Agriculture
in the name of a public
entity (such as a state or
local government, school
district, or prison) that
receives agricultural
program payments
- ------------------------------------------------------------
</TABLE>
(1) List above the signature line first and circle the name of the person whose
number you furnish.
(2) List first and circle minor's name and furnish the minor's social security
number.
(3) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use your social security number or
employer identification number.
(4) List first and circle the name of the legal trust, estate, or pension trust.
(Do not furnish the TIN of the personal representative or trustee unless the
legal entity itself is not designated in the account title).
NOTE: If no name above the signature line is listed when more than one name
appears in the registration, the number will be considered to be that of
the first name appearing in the registration.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
Section references are to the Internal Revenue Code.
PURPOSE OF FORM.--A person who is required to file an information return with
the IRS must get your correct TIN to report, for example, income paid to you,
real estate transactions, mortgage interest you paid, the acquisition or
abandonment of secured property, cancellation of debt, or contributions you made
to an IRA. Use Form W-9 to give your correct TIN to the requester (the person
requesting your TIN) and, when applicable, (1) to certify the TIN you are giving
is correct (or you are waiting for a number to be issued), (2) to certify you
are not subject to backup withholding, or (3) to claim exemption from backup
withholding if you are an exempt payee.
NOTE: If a requester gives you a form other than a W-9 to request your TIN, you
must use the requester's form if it is substantially similar to Form W-9.
WHAT IS BACKUP WITHHOLDING?--Persons making certain payments to you must
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 pay, and certain payments from
fishing boat operators. Real estate transactions are not subject to backup
withholding.
If you give the requester your correct TIN, make the proper certifications,
and report all your taxable interest and dividends on your tax return, payments
you receive 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 tells the requester that you furnished an incorrect TIN, or
3. The IRS tells you that you are subject to backup withholding because you
did not report all your interest and dividends on your tax return (for
reportable interest and dividends only), or
4. You do not certify to the requester that you are not subject to backup
withholding under 3 above (for reportable interest and dividend accounts opened
after 1983 only), or
5. You do not certify your TIN.
Certain payees and payments are exempt from backup withholding and
information reporting. See below.
HOW TO GET A TIN: If you do not have a TIN, apply for one immediately. To apply
for an SSN, get Form SS-5 from your local Social Security Administration office.
Get Form W-7 to apply for an Individual TIN or Form SS-4 to apply for an EIN.
You can get Forms W-7 and SS-4 from the IRS by calling 1-800-TAX-FORM
(1-800-829-3676).
If you do not have a TIN, check the box titled "Applied For" in the space
for the TIN, sign and date the form, and give it to the requester. Generally,
you will then have 60 days to get a TIN and give 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.
NOTE: CHECKING THE BOX TITLED "APPLIED FOR" ON THE FORM MEANS THAT YOU HAVE
ALREADY APPLIED FOR A TIN OR THAT YOU INTEND TO APPLY FOR ONE SOON.
As soon as you receive your TIN, complete another Form W-9, include your
TIN, sign and date the form, and give it to the requester.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Individuals (including sole proprietors) are NOT exempt from backup withholding.
Corporations are exempt from backup withholding for certain payments, such as
interest and dividends.
If you are exempt from backup withholding, you should still complete Form
W-9 to avoid possible erroneous backup withholding. Enter your correct TIN in
Part I, write "Exempt" in Part II, and sign and date the form. If you are a
nonresident alien or a foreign entity not subject to backup withholding, give
the requester a completed FORM W-8, Certificate of Foreign Status.
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 a corporation that
provides medical and health care services or bills and collects payments for
such services is not exempt from backup withholding or information reporting.
Only payees described in items (2) through (6) are exempt from backup
withholding for barter exchange transactions and patronage dividends.
(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) if the account
satisfies the requirements of section 401(f)(2). (3) The United States or any of
its agencies or instrumentalities. (4) A state, the District of Columbia, a
possession of the United States, or any of their political subdivisions or
instrumentalities. (5) A foreign government or any of its political
subdivisions, agencies, or instrumentalities. (6) An international organization
or any of its agencies or instrumentalities. (7) A foreign central bank of
issue. (8) A dealer in securities or commodities required to register in the
United States or a possession of the United States. (9) A futures commission
merchant registered with the Commodity Futures Trading Commission. (10) A real
estate investment trust. (11) An entity registered at all times during the tax
year under the Investment Company Act of 1940. (12) A common trust fund operated
by a bank under section 584(a). (13) A financial institution. (14) A middleman
known in the investment community as a nominee or listed in the most recent
publication of the American Society of Corporate Secretaries, Inc., Nominee
List. (15) A trust exempt from tax under section 664 or described in section
4947.
Payments of dividends and patronage dividends that are generally exempt from
backup withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident partner.
- Payments of patronage dividends not paid in money.
- Payments made by certain foreign organizations.
- Section 404(k) payments made by an ESOP.
Payments of interest that generally are exempt from 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 to you.
Payments that are not subject to information reporting are also not subject to
backup withholding. For details, see sections 6041, 6041A, 6042, 6044, 6045,
6049, 6050A, and 6050N, and their regulations.
PRIVACY ACT NOTICE.--Section 6109 requires you to give 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, cancellation of debt, 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. The IRS may also
provide this information to the Department of Justice for civil and criminal
litigation and to cities, states, and the District of Columbia to carry out
their tax laws.
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 give a TIN to a payer. Certain
penalties may also apply.
PENALTIES
(1) FAILURE TO FURNISH TIN.--If you fail to furnish your 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.
(2) 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 penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
(4) MISUSE OF TINS.--If the requester discloses or uses TINs in violation of
federal law, the requester may be subject to civil and criminal penalties.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE
<PAGE>
EXHIBIT 99(a)(4)
THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER
TO SELL SHARES. THE OFFER IS BEING MADE SOLELY BY THE OFFER TO PURCHASE DATED
MARCH 3, 1998 AND THE RELATED LETTER OF TRANSMITTAL, AND ANY AMENDMENTS AND
SUPPLEMENTS THERETO, AND IS NOT BEING MADE TO, NOR WILL TENDERS BE ACCEPTED FROM
OR ON BEHALF OF, HOLDERS OF SHARES TENDERING IN ANY JURISDICTION IN WHICH THE
MAKING OF THE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH
THE SECURITIES, BLUE SKY OR OTHER LAWS OF SUCH JURISDICTIONS.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
ENVIRONMENT ONE CORPORATION
AT
$15.25 NET PER SHARE
BY
EOC ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
PRECISION CASTPARTS CORP.
THE OFFER AND WITHDRAWAL RIGHTS
WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME,
ON MONDAY, MARCH 30, 1998 UNLESS THE OFFER IS EXTENDED.
EOC Acquisition Corporation, a New York corporation (the "Purchaser"),
which is a wholly owned subsidiary of Precision Castparts Corp., an Oregon
corporation ("PCC"), is offering to purchase all of the outstanding shares of
Common Stock, $.10 par value (the "Shares"), of Environment One Corporation, a
New York corporation (the "Company"), at a
<PAGE>
purchase price of $15.25 per Share, net to the seller in cash, upon the terms
and subject to the conditions set forth in the Offer to Purchase dated March
3, 1998 (the "Offer to Purchase") and in the related Letter of Transmittal
(which, together with any amendments or supplements thereto, collectively
constitute the "Offer").
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED BELOW), THAT
NUMBER OF SHARES THAT WOULD REPRESENT 66 2/3 PERCENT OF ALL OUTSTANDING SHARES
DETERMINED ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE. CERTAIN OTHER
CONDITIONS TO THE OFFER ARE DESCRIBED IN SECTION 13 OF THE OFFER TO PURCHASE.
The Offer is being made pursuant to an Agreement and Plan of Merger dated
February 24, 1998 (the "Merger Agreement") by and among PCC, the Purchaser and
the Company pursuant to which, after the expiration of the Offer and the
satisfaction of the conditions contained in the Merger Agreement, the Purchaser
will be merged into the Company (the "Merger") and each outstanding Share, other
than Shares held by the Purchaser, PCC or any other subsidiary of PCC and Shares
held by stockholders who perfect any available appraisal rights under New York
law, would be converted into the right to receive an amount in cash equal to the
price per Share paid pursuant to the Offer.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT AND THE MAKING OF THE OFFER BY THE PURCHASER, AND 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 STOCKHOLDERS ACCEPT THE OFFER.
The term "Expiration Date" means 12:00 Midnight, Eastern time, on Monday,
March 30, 1998 unless and until the period during which the Offer is open shall
have been extended in accordance with the terms of the Merger Agreement, in
which event the term "Expiration Date" shall mean the latest time and date at
which the Offer, as so extended, shall expire.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered and not withdrawn
as, if and when the Purchaser gives oral or written notice to The Bank of New
York, which is acting as the depositary (the "Depositary"), of the Purchaser's
acceptance for payment of such Shares pursuant to the Offer. Upon the terms and
subject to the conditions of the Offer, payment for Shares accepted for payment
pursuant to the Offer will be made by deposit of the purchase price therefore
with the Depositary, which will act as agent for tendering stockholders for the
purpose of receiving payments from the Purchaser and transmitting such payments
to stockholders whose Shares have been accepted for payment. Under no
circumstances will interest on the purchase price
<PAGE>
for tendered Shares be paid, regardless of any delay in making the payment
after the Expiration Date.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i)
certificates representing such Shares (the "Share Certificates"), 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
"Book-Entry Transfer Facility") pursuant to the procedures set forth in Section
3 of the Offer to Purchase, (ii) the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, and (iii) any other documents required by the Letter of Transmittal.
If by 12:00 Midnight Eastern time, on March 30, 1998 (or any date and time
then set as the Expiration Date), any or all of the conditions to the Offer have
not been satisfied or waived, the Purchaser reserves the right (but shall not be
obligated), subject to the applicable rules and regulations of the Securities
and Exchange Commission ("Commission") and subject to the limitations in the
Merger Agreement, to (a) terminate the Offer and not accept for payment or pay
for any Shares and return all tendered Shares to tendering stockholders, (b)
waive all the unsatisfied conditions and accept for payment and pay for all
Shares validly tendered prior to the Expiration Date and not theretofore
withdrawn, (c) extend the Offer and, subject to the right of stockholders to
withdraw Shares until the Expiration Date, retain the Shares that have been
tendered during the period or periods for which the Offer is extended or (d)
subject to the limitations in the Merger Agreement, amend the Offer. See
Section 11 of the Offer to Purchase. Under no circumstances will interest be
paid on the purchase price for tendered Shares, whether or not the Purchaser
exercises its right to extend the Offer. Any extension, amendment, or
termination will be followed as promptly as practicable by public announcement
thereof, such announcement to be no later than 9:00 a.m., Eastern time, on the
next business day after the previously scheduled Expiration Date of the Offer.
Except as described below and 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 by the Purchaser pursuant to the
Offer, may also be withdrawn at any time after May 1, 1998. For 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 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 that of the person who tendered such Shares. If Share
Certificates to be withdrawn have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of such Certificates, the serial
number shown on such Certificates must be submitted to the Depositary and the
signature(s) on the notice of withdrawal must be guaranteed by an Eligible
Institution (as defined in Section 3 of the Offer to Purchase) unless such
Shares have been tendered for
<PAGE>
the account of any Eligible Institution. If Shares have been tendered
pursuant to the procedure for Book-Entry Transfer as set forth in Section 3
of the Offer to Purchase, any notice of withdrawal must specify the name and
number of the account of the Book-Entry Transfer Facility to be credited with
the withdrawn Shares and otherwise comply with the Book-Entry Transfer
Facility's procedures. All questions as to the form and validity (including
the time of receipt) of any notice of withdrawal will be determined by the
Purchaser, in its sole discretion, whose determination will be final and
binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) 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 the Purchaser with the Company's stockholder list
and security position listings for the purpose of disseminating the Offer to
holders of the Shares. The Offer to Purchase and the related Letter of
Transmittal are being mailed to the record holders of Shares whose names appear
on the Company's stockholder list and will be furnished to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the stockholder list or, if applicable, who are
listed as participants in a clearing agency's security position listing for
subsequent transmittal to beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH HOLDERS OF SHARES SHOULD READ BEFORE MAKING ANY
DECISION WITH RESPECT TO THE OFFER.
Questions and requests for copies of the Offer to Purchase and the related
Letter of Transmittal and all other tender offer materials may be directed to
the Information Agent as set forth below, and copies will be furnished promptly
at the Purchaser's expense. The Purchaser will not pay any fees or commissions
to any broker or dealer or any other person (other than the Information Agent)
for soliciting tenders of Shares pursuant to the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
MORROW & CO., INC.
909 Third Avenue
20th Floor
New York New York 10022]
(212) 754-8000
Bankers and Brokerage Firms please call:
(800) 662-5200
Toll Free: (800) 566-9061
<PAGE>
March 3, 1998
<PAGE>
NOTICE OF GUARANTEED DELIVERY
TO
TENDER SHARES OF COMMON STOCK
OF
ENVIRONMENT ONE CORPORATION
AS SET FORTH IN SECTION 3 OF THE OFFER TO PURCHASE (AS DEFINED BELOW), THIS
INSTRUMENT OR ONE SUBSTANTIALLY EQUIVALENT HERETO MUST BE USED TO ACCEPT THE
OFFER (AS DEFINED BELOW) IF CERTIFICATES FOR SHARES (AS DEFINED BELOW) ARE NOT
IMMEDIATELY AVAILABLE OR THE CERTIFICATES FOR SHARES AND ALL OTHER REQUIRED
DOCUMENTS CANNOT BE DELIVERED TO THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS
DEFINED IN SECTION 1 OF THE OFFER TO PURCHASE) OR IF THE PROCEDURE FOR DELIVERY
BY BOOK-ENTRY TRANSFER CANNOT BE COMPLETED ON A TIMELY BASIS. THIS INSTRUMENT
MAY BE DELIVERED BY HAND OR TRANSMITTED BY TELEGRAM, TELEX, FACSIMILE
TRANSMISSION OR MAIL TO THE DEPOSITARY.
THE DEPOSITARY FOR THE OFFER IS:
THE BANK OF NEW YORK
<TABLE>
<CAPTION>
<S> <C> <C>
BY MAIL: FACSIMILE: BY HAND OR OVERNIGHT COURIER:
TENDER & EXCHANGE DEPARTMENT (FOR ELIGIBLE INSTITUTIONS ONLY) TENDER & EXCHANGE DEPARTMENT
PO BOX 11248 (212) 815-6213 101 BARCLAY STREET
CHURCH STREET STATION FOR INFORMATION TELEPHONE RECEIVER AND DELIVER WINDOW
NEW YORK, NEW YORK 10286-1248 (800) 507-9357 NEW YORK, NEW YORK 10286
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OR TELEX NUMBER OTHER
THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE VALID DELIVERY.
Ladies and Gentlemen:
The undersigned hereby tenders to EOC Acquisition Corporation, a New York
corporation (the "Purchaser"), upon the terms and subject to the conditions set
forth in the Offer to Purchase dated March 3, 1998 (the "Offer to Purchase") and
in the related Letter of Transmittal (which together constitute the "Offer"),
receipt of which is hereby acknowledged, the number of shares of Common Stock,
$.10 par value (the "Shares"), indicated below of Environment One Corporation, a
New York corporation, pursuant to the guaranteed delivery procedure set forth in
Section 3 of the Offer to Purchase.
<TABLE>
<CAPTION>
<S> <C>
Signature(s) -------------------------------- Address(escrows) ----------------------------
Name(s) ----------------------------------- -------------------------------------------
Zip Code
- ------------------------------------------- Area Code and Tel. No(s). -------------------
Please Type or Print
Number of Shares --------------------------- (Check box if Shares will be tendered by book-entry
transfer)
Certificate Nos. (If Available)
- ------------------------------------------- / / The Depository Trust Company
- -------------------------------------------
Dated -------------------------------------
</TABLE>
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a member of a registered national securities
exchange or of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office or correspondent in the United
States, guarantees delivery to the Depositary of either the certificates
evidencing all tendered Shares, in proper form for transfer, or delivery of
Shares pursuant to the procedure for book-entry transfer into the Depositary's
account at The Depository Trust Company (the "Book-Entry Transfer Facility"), in
either case together with the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees and
any other required documents, all within three (3) Nasdaq National Market
trading days after the date hereof.
<TABLE>
<CAPTION>
<S> <C>
- ------------------------------------------- -------------------------------------------
Name of Firm Authorized Signature
- ------------------------------------------- Name --------------------------------------
Address Please Type or Print
- ------------------------------------------- Title ---------------------------------------
Zip Code
Area Code and Tel. No. ---------------------- Dated -------------------------------------
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS FORM--CERTIFICATES ARE TO BE
DELIVERED WITH YOUR LETTER OF TRANSMITTAL.
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OF THE OUTSTANDING SHARES OF
COMMON STOCK
OF
ENVIRONMENT ONE CORPORATION
AT
$15.25 NET PER SHARE
BY
EOC ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
PRECISION CASTPARTS CORP.
THE OFFER AND WITHDRAWAL RIGHTS
WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME,
ON MONDAY, MARCH 30, 1998 UNLESS THE OFFER IS EXTENDED.
To: Brokers, Dealers, Commercial Banks,
Trust, Companies and Other Nominees:
We are asking you to contact your clients for whom you hold shares of Common
Stock, $.10 par value (the "Shares"), of Environment One Corporation, a New York
corporation (the "Company"). Please bring to their attention as promptly as
possible the offer being made by EOC Acquisition Corporation, a New York
corporation (the "Purchaser"), and a wholly owned subsidiary of Precision
Castparts Corp., an Oregon corporation ("PCC"), to purchase all of the
outstanding Shares, at a purchase price of $15.25 per Share net to the seller in
cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase dated March 3, 1998 (the "Offer to Purchase") and in the related Letter
of Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer").
Enclosed for your information and for forwarding to your clients, for whose
account you hold Shares registered in your name or in the name of your nominee,
or hold Shares registered in their own names, are copies of the following
documents:
1. The Offer to Purchase dated March 3, 1998;
2. The Letter of Transmittal to be used in accepting the Offer.
Facsimile copies of the Letter of Transmittal may be used to accept the
Offer;
3. A printed form of letter which may be sent to your clients for whose
account you hold Shares in your name or in the name of your nominee, with
space provided for obtaining such client's instructions with regard to the
Offer;
4. A Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Shares are not immediately available or if the procedure
for book-entry transfer cannot be completed on a timely basis;
5. Letter from Environment One Corporation with attached Schedule 14D-9
(without exhibits);
<PAGE>
6. Guidelines of the Internal Revenue Service for certification of
Taxpayer Identification Number on Substitute Form W-9; and
7. Return envelope addressed to The Bank of New York.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT (AS DESCRIBED IN THE OFFER TO PURCHASE) AND THE MAKING OF THE OFFER BY
THE PURCHASER, AND HAS DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE
FAIR TO, AND IN THE BEST INTEREST OF, THE COMPANY'S STOCKHOLDERS AND RECOMMENDS
THAT THE STOCKHOLDERS ACCEPT THE OFFER.
We are asking you to contact your clients for whom you hold Shares
registered in your name (or in the name of your nominee) or who hold Shares
registered in their own names. Please bring the Offer to their attention as
promptly as possible. The Purchaser will not pay any fees or commissions to any
broker or dealer or any other person (other than the Information Agent) for
soliciting tenders of Shares pursuant to the Offer. You will be reimbursed by
the Purchaser for customary mailing expenses incurred by you in forwarding any
of the enclosed materials to your clients. The Purchaser will pay or cause to be
paid any stock transfer taxes payable on the sale and transfer of Shares to it
or its order, except as otherwise provided in Instruction 6 of the Letter of
Transmittal.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON MONDAY, MARCH 30, 1998 UNLESS THE
OFFER IS EXTENDED.
In order to take advantage of the Offer, (1) a duly executed and properly
completed Letter of Transmittal, and, if necessary, any other required documents
should be sent to the Depositary and (2) either certificates representing the
tendered Shares should be delivered to the Depositary, or such Shares should be
tendered by book-entry transfer into the Depositary's account at the Book-Entry
Transfer Facility (as defined in the Offer to Purchase), all in accordance with
the instructions set forth in the Letter of Transmittal and the Offer to
Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their certificates or other required documents to the Depositary prior
to the expiration of the Offer or to comply with the book-entry transfer
procedures on a timely basis, a tender may be effected by following the
guaranteed delivery procedures specified in Section 3 of the Offer to Purchase.
Any inquiries you may have with respect to the Offer should be addressed to
the Information Agent at the address and telephone number as set forth on the
back cover page of the Offer to Purchase.
Additional copies of the above documents may be obtained from the
Information Agent, at the address and telephone number set forth on the back
cover of the Offer to Purchase.
Very truly yours,
EOC ACQUISITION CORPORATION
Nothing contained herein or in the enclosed documents shall constitute you
or any person as the agent of the Purchaser, PCC, the Company or the Depositary,
or as agent of any affiliate of any of them, or authorize you or any other
person to make any statements on behalf of any of them with respect to, or use
any document in connection with, the offer, except for statements expressly made
in the Offer to Purchase or the Letter of Transmittal and the documents included
herewith.
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OF THE OUTSTANDING SHARES OF
COMMON STOCK
OF
ENVIRONMENT ONE CORPORATION
AT
$15.25 NET PER SHARE
BY
EOC ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
PRECISION CASTPARTS CORP.
THE OFFER AND WITHDRAWAL RIGHTS
WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME,
ON MONDAY, MARCH 30, 1998 UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated March 3, 1998
(the "Offer to Purchase") and the related Letter of Transmittal relating to an
offer by EOC Acquisition Corporation, a New York corporation ("Purchaser"), and
a wholly owned subsidiary of Precision Castparts Corp., an Oregon corporation
("PCC"), to purchase all of the outstanding shares of Common Stock, $.10 par
value (the "Shares"), of Environment One Corporation, a New York corporation
(the "Company"), at a purchase price of $15.25 per Share, net to the seller in
cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase and in the related Letter of Transmittal (which, together with any
amendments or supplements thereto, collectively constitute the "Offer"). We are
the holder of record of Shares held by us for your account. A tender of such
Shares can be made only by us as the holder of record and pursuant to your
instructions. The Letter of Transmittal is furnished to you for your information
only and cannot be used by you to tender Shares held by us for your account.
We request instructions as to whether you wish to have us tender on your
behalf any or all of such Shares held by us for your account, pursuant to the
terms and conditions set forth in the Offer to Purchase.
Your attention is invited to the following:
1. The tender price is $15.25 per Share, net to you in cash.
2. The Offer is being made for all of the outstanding Shares.
3. The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the expiration of the Offer at least
66 2/3 percent of the outstanding Shares (on a fully diluted basis).
4. The Offer and withdrawal rights will expire at 12:00 Midnight, Eastern time,
on Monday, March 30, 1998 unless the Offer is extended.
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 purchase of Shares pursuant to the
Offer.
<PAGE>
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 laws of such
jurisdiction.
If you wish to have us tender any or all of the Shares held by us for your
account, please instruct us by completing, executing and returning to us the
instruction form contained in this letter. If you authorize us to tender your
Shares, all such Shares will be tendered unless otherwise specified in such
instruction form. Your instruction should be forwarded to us in ample time to
permit us to submit a tender on your behalf prior to the expiration of the
Offer.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
ALL OF THE OUTSTANDING SHARES OF
COMMON STOCK
OF
ENVIRONMENT ONE CORPORATION
The undersigned acknowledge(s) receipt of your letter enclosing the Offer to
Purchase dated March 3, 1998 (the "Offer to Purchase") and the related Letter of
Transmittal pursuant to an offer by EOC Acquisition Corporation, a New York
corporation, to purchase all of the outstanding shares of Common Stock, $.10 par
value (the "Shares"), of Environment One Corporation, a New York corporation.
This will instruct you to tender 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 to Purchase and in the related Letter of Transmittal
furnished to the undersigned.
<TABLE>
<CAPTION>
Number of Shares SIGN HERE
to be Tendered:
- ------------ shares
<S> <C>
------------------------------------------------------------
Signature(s)
------------------------------------------------------------
------------------------------------------------------------
Please print name(s)
------------------------------------------------------------
------------------------------------------------------------
Address
------------------------------------------------------------
Area Code & Telephone Number
------------------------------------------------------------
Tax Identification or Social Security Number(s)
</TABLE>
<PAGE>
PR NEWSWIRE INVESTORFAX
Precision Castparts Corp. to Acquire Environment/One Corporation
In $72 Million Transaction
PORTLAND, Ore, Feb. 25 /PRNewswire/ -- Precision Castparts Corp. NYSE: PCP)
has entered into an agreement to acquire Environment/One Corporation (Nasdaq:
EONE), a manufacturer of highly engineered equipment for low-pressure sewer
systems and other applications based in Niskayuna, New York.
Through a wholly owned subsidiary, Precision Castparts Corp. ("PCC")
will commence a cash tender on March 3, 1998, to purchase all outstanding
shares of Environment/One Corporation ("E/One") common stock for $15.25 per
share. Following completion of the tender offer, E/One will become a wholly
owned subsidiary of PCC through a cash merger at the same price. The total
purchase price of the shares will be approximately $72 million.
Environment/One operates two primary businesses: the sewer systems
business, which accounts for approximately 90 percent of sales, and the
detection systems business. The former operation manufactures and services
grinder pumps that make low-pressure sewer systems feasible. E/One, which
pioneered these pumps as a spin-off business from GE, currently has a
significant market share in a rapidly growing market. The detection systems
business manufactures instruments for the detection of sub-microscopic
particles and gas in the electric power generation industry. E/One sales for
calendar year 1997 were $24.3 million.
E/One will report into PCC Flow Technologies, Inc., a leading
manufacturer of high-quality fluid-handling pumps, valves, and measurement
instruments, headquartered in Houston, Texas. This division of Precision
Castparts Corp. has a strong group of pump companies that can provide
significant sourcing expertise, product development, aftermarket service,
capability, and opportunities for expansion of E/One's domestic markets.
E/One's products will also benefit from PCC Flow Technologies' current
international distribution, as well as the division's aggressive global
expansion of those channels.
"Once again, we have successfully met the criteria of our acquisition
strategy by adding a niche, synergistic business with a leading position in
its served markets, high margins, and a great capacity for growth," said
William C. McCormick. PCC's chairman and chief executive officer. "The
combination of E/One's strengths with our existing fluid management
businesses will result in an even stronger competitor in markets such as
municipal sewer systems, residential building, land development, and
single-family dwellings."
"E/One is excited to be able to combine its business with PCC Flow
Technologies, Inc.," said Stephen Ardia, chairman and chief executive officer
of E/One. "The acquisition recognizes the progress E/One has made in the
marketplace, and it represents a full and fair valuation to our shareholders.
Together, we will be well-positioned to build an enhanced growth platform to
serve our customers, distributors, and associates, while, at the same time,
preserving the unique value system and growth culture at E/One."
The tender offer will be conditioned upon the tender of at least
two-thirds of the outstanding shares of E/One on a fully diluted basis. The
tender offer and the merger are also subject to other conditions, including
compliance with the requirements of the Hart Scott Rodino Antitrust Act.
(more)
<PAGE>
Precision Castparts Corp. is a worldwide manufacturer of complex metal
components and products. PCC is the market leader in manufacturing both large,
complex structural investment castings and airfoil castings used in jet aircraft
engines. In addition, PCC has expanded into the industrial gas pipe, fluid
management, industrial metalworking tools and machines, pulp paper, powder
metal, tungsten carbide, and other metal products markets.
Information in this press release relating to projected growth and future
results and events constitutes forward-looking statements. Actual results in
future periods may differ materially from the forward-looking statements because
of a number of risks and uncertainties, including but not limited to
fluctuations in the aerospace cycle; the relative success of the Company's entry
into new markets, including the rapid ramp-up for industrial gas turbine
component production; competitive pricing; the availability and cost of
materials and supplies; relations with the Company's employees; the Company's
ability to manage its operating costs and to integrate acquired businesses in an
effective manner; governmental regulations and environmental matters, and risks
associated with international operations. Any forward-looking statements should
be considered in light of these factors.
Precision Castparts' press releases are available at no charge through
Newswire's Company On-Call fax service. For a menu of PCC's press releases or
to retrieve a specific release, call (800) 758-5804, extension 714025.
Information is also available on the Internet on the PRN Web site --
http://www.prnewswire.com.
SOURCE Pacific Castparts Corporation
-0- 2/25/98
/CONTACT: Dwight Weber of Pacific Castparts Corporation,
503-417-4855/(PCP EONE)
-30-
<PAGE>
AGREEMENT AND PLAN OF MERGER
AMONG
PRECISION CASTPARTS CORP.,
ENVIRONMENT ONE CORPORATION,
AND
EOC ACQUISITION CORPORATION
February 24, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1
THE OFFER............................................................... 2
1.1 THE OFFER......................................................... 2
1.2 ACTIONS BY E/ONE.................................................. 3
1.3 DESIGNATION OF DIRECTORS OF E/ONE FOLLOWING COMPLETION OF OFFER... 4
ARTICLE 2
THE MERGER.............................................................. 5
2.1 THE MERGER........................................................ 5
2.2 STOCKHOLDERS' MEETING; PROXY STATEMENT............................ 5
2.3 MERGER WITHOUT STOCKHOLDERS' MEETING.............................. 6
2.4 EFFECTIVE TIME.................................................... 6
2.5 EFFECT OF MERGER.................................................. 6
2.6 ARTICLES OF INCORPORATION AND BYLAWS.............................. 6
2.7 DIRECTORS AND OFFICERS............................................ 7
2.8 CLOSING........................................................... 7
ARTICLE 3
MERGER CONSIDERATION.................................................... 7
3.1 EFFECT OF MERGER ON CAPITAL STOCK OF CONSTITUENT CORPORATIONS..... 7
3.1.1 CONVERSION OF E/ONE SHARES.................................. 7
3.1.2 CANCELLATION OF TREASURY STOCK AND SHARES OWNED BY
PCC PARTIES................................................. 7
3.1.3 CAPITAL STOCK OF SUB........................................ 7
3.1.4 WITHHOLDING TAX............................................. 7
3.1.5 SHARES OF DISSENTING STOCKHOLDERS........................... 8
3.2 EXCHANGE OF CERTIFICATES.......................................... 8
3.2.1 PAYING AGENT................................................ 8
3.2.2 EXCHANGE PROCEDURE.......................................... 8
3.2.3 NO FURTHER OWNERSHIP RIGHTS IN E/ONE COMMON STOCK........... 9
3.2.4 NO LIABILITY................................................ 9
3.2.5 LOST, STOLEN, OR DESTROYED CERTIFICATES..................... 9
3.3 E/ONE STOCK OPTIONS AND WARRANT................................... 9
</TABLE>
II
<PAGE>
<TABLE>
<S> <C>
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF E/ONE.............................. 10
4.1 CORPORATE EXISTENCE AND AUTHORITY.............................. 10
4.2 NO ADVERSE CONSEQUENCES........................................ 11
4.3 CAPITALIZATION................................................. 11
4.4 SUBSIDIARIES AND JOINT VENTURES................................ 12
4.5 SEC REPORTS AND FINANCIAL STATEMENTS........................... 12
4.6 INFORMATION SUPPLIED........................................... 12
4.7 LEGAL PROCEEDINGS.............................................. 13
4.8 CONTRACTS AND ARRANGEMENTS..................................... 13
4.9 REAL PROPERTY; MATERIAL ASSETS................................. 13
4.10 LEASES......................................................... 14
4.11 STATUS OF CONTRACTS AND LEASES................................. 14
4.12 COMPLIANCE WITH LAWS........................................... 15
4.13 ENVIRONMENTAL MATTERS.......................................... 15
4.13.1 DEFINITIONS............................................ 15
4.13.2 COMPLIANCE............................................. 15
4.13.3 HAZARDOUS SUBSTANCES................................... 15
4.13.4 UNDERGROUND STORAGE TANKS.............................. 16
4.13.5 ENVIRONMENTAL RECORDS.................................. 16
4.14 TAX MATTERS.................................................... 16
4.14.1 RETURNS................................................ 16
4.14.2 TAXES PAID OR RESERVED................................. 17
4.14.3 LOSS CARRYFORWARDS; INVESTMENT TAX CREDIT CARRYFORWARDS 17
4.14.4 DEFINITION............................................. 17
4.14.5 MISCELLANEOUS.......................................... 17
4.14.6 TAX SHARING AGREEMENTS................................. 17
4.15 EMPLOYEES AND LABOR RELATIONS MATTERS.......................... 17
4.16 EMPLOYEE BENEFITS.............................................. 19
4.17 ABSENCE OF CERTAIN CHANGES OR EVENTS........................... 20
4.18 UNDISCLOSED LIABILITIES........................................ 21
4.19 INSURANCE...................................................... 21
4.20 INTELLECTUAL PROPERTY.......................................... 21
4.21 GUARANTIES; POWERS OF ATTORNEY................................. 22
4.22 BROKERS........................................................ 22
4.23 DEFERRED COMPENSATION OBLIGATIONS.............................. 22
4.24 PRODUCT WARRANTIES............................................. 22
4.25 DISTRIBUTORS AND SUPPLIERS..................................... 23
4.26 DISTRIBUTORS................................................... 23
4.27 RECORDS........................................................ 23
4.28 AGREEMENTS WITH SERVICE PROVIDERS.............................. 23
4.29 EMPLOYMENT AGREEMENTS.......................................... 23
</TABLE>
III
<PAGE>
<TABLE>
<S> <C>
4.30 DISCLOSURE..................................................... 23
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PCC................................ 23
5.1 CORPORATE EXISTENCE AND AUTHORITY.............................. 23
5.2 CORPORATE EXISTENCE AND AUTHORITY OF SUB....................... 24
5.3 NO ADVERSE CONSEQUENCES........................................ 24
5.4 LEGAL PROCEEDINGS.............................................. 25
5.5 OFFER DOCUMENTS; PROXY STATEMENT............................... 25
5.6 FINANCING...................................................... 25
ARTICLE 6
COVENANTS............................................................ 25
6.1 CONTINUATION OF BUSINESS....................................... 25
6.2 NO SOLICITATION................................................ 28
6.3 ACCESS......................................................... 30
6.4 HART SCOTT RODINO.............................................. 30
6.5 OTHER GOVERNMENT CONSENTS...................................... 30
6.6 BEST EFFORTS; NO INCONSISTENT ACTION........................... 30
6.7 CHANGED CIRCUMSTANCES.......................................... 31
6.8 FEES AND EXPENSES.............................................. 31
6.9 PRESS RELEASES................................................. 31
ARTICLE 7
CONDITIONS TO THE PARTIES' OBLIGATIONS
TO CONSUMMATE THE MERGER............................................. 31
7.1 GOVERNMENTAL AUTHORIZATIONS.................................... 31
7.2 E/ONE STOCKHOLDER APPROVAL..................................... 31
7.3 NO PROHIBITIONS................................................ 32
7.4 NO SUITS....................................................... 32
7.5 OFFER.......................................................... 32
ARTICLE 8
TERMINATION.......................................................... 32
8.1 TERMINATION BY PCC AND/OR E/ONE................................ 32
8.1.1 MUTUAL CONSENT........................................... 32
8.1.2 INJUNCTION OR RESTRAINT.................................. 32
8.1.3 FAILURE OF OFFER......................................... 32
8.2 TERMINATION BY PCC............................................. 32
</TABLE>
IV
<PAGE>
<TABLE>
<S> <C>
8.2.1 BREACH BY E/ONE.......................................... 32
8.2.2 WITHDRAWAL OF E/ONE BOARD APPROVAL....................... 33
8.3 TERMINATION BY E/ONE........................................... 33
8.3.1 BREACH BY PCC OR SUB..................................... 33
8.3.2 LEGAL REQUIREMENTS OF DIRECTORS.......................... 33
8.4 PROCEDURE; EFFECT OF TERMINATION............................... 33
8.5 BREAK-UP FEES.................................................. 33
8.5.1 WRONGFUL TERMINATION BY PCC.............................. 33
8.5.2 WRONGFUL TERMINATION BY E/ONE............................ 34
8.5.3 TAKEOVER PROPOSAL........................................ 34
8.5.4 FAILURE OF CONDITION..................................... 34
8.5.5 FEE DUE; EXCLUSIVE REMEDY................................ 34
ARTICLE 9
GENERAL PROVISIONS................................................... 34
9.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS......... 34
9.2 FURTHER ACTION................................................. 34
9.3 ENTIRE AGREEMENT............................................... 34
9.4 ASSIGNMENT..................................................... 34
9.5 BINDING EFFECT; NO THIRD PARTY BENEFIT......................... 35
9.6 WAIVER......................................................... 35
9.7 GOVERNING LAW.................................................. 35
9.8 SEVERABILITY................................................... 35
9.9 TIME OF ESSENCE................................................ 35
9.10 COUNTERPARTS................................................... 35
9.11 AMENDMENTS..................................................... 35
9.12 AUTHORITY...................................................... 36
9.13 STANDSTILL..................................................... 36
9.14 NOTICES........................................................ 36
ARTICLE 10
DEFINITIONS...........................................................38
</TABLE>
v
<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER made as of February 24, 1998 (the
Agreement) is among Precision Castparts Corp., an Oregon corporation (PCC),
Environment One Corporation, a New York corporation (E/One), and EOC
Acquisition Corporation, a New York corporation and a direct or indirect
subsidiary of PCC (Sub).
RECITALS
A. The Boards of Directors of PCC, Sub, and E/One have determined
that it is advisable and in the best interests of their respective
corporations and stockholders for PCC to acquire E/One on the terms and
conditions set forth in this Agreement.
B. In furtherance of such the acquisition is proposed that (i) Sub
conduct a cash tender offer pursuant to the terms and conditions of this
Agreement for all of the outstanding shares of Common Stock, $.10 par value
per share, of E/One (each, a Share, and collectively, the Shares) (such cash
tender offer, as described in more detail in Article 1 below, the Offer) for
$15.25 per Share net to the seller in cash, without interest thereon, and
(ii) that upon consummation of the Offer, Sub merge with and into E/One
pursuant to the applicable provisions of the New York Business Corporation
Law (the NYBCL) and the terms and conditions of this Agreement (such merger,
as described in more detail in Article 2 below, the Merger), pursuant to
which E/One would be the surviving corporation and a wholly-owned subsidiary
of PCC.
C. The boards of directors of PCC and Sub have each approved the
making of the Offer and the transactions relating thereto.
D. The board of directors of E/One (the E/One Board) has approved
the making of the Offer and resolved, subject to the terms and conditions
contained herein, to recommend that holders of Shares tender their Shares
pursuant to the Offer.
E. The boards of directors of PCC, Sub and E/One have each approved
the merger (the Merger) of Sub with and into E/One in accordance with
applicable New York law following the consummation of the Offer and upon the
terms and subject to the conditions set forth herein.
F. Walter W. Aker, John L. Allen, Stephen V. Ardia, Angello
Dounoucos, Lars G. Grenback, Robert G. James, Rolf E. Soderstrom, Mark E.
Alexander, David M. Doin, Brian Buchinski, George A. Earle III, Kathleen A.
Parry, George A. Vorsheim Jr. and Philip W. Welsh, stockholders of E/One,
have agreed to tender all of their E/One Common Stock pursuant to the Offer.
<PAGE>
AGREEMENT
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants, agreements and conditions contained in this Agreement,
the parties agree as follows:
ARTICLE 1
THE OFFER
1.1 THE OFFER.
1.1.1 Provided that this Agreement has not been terminated in
accordance with Article 8 and provided that none of the conditions and events
set forth in ANNEX A to this Agreement (the Offer Conditions) have occurred
(unless such event shall have been waived by Sub), as promptly as practicable
but in no event later than five (5) business days after the public
announcement of Sub's intention to commence the Offer, PCC shall cause Sub to
commence (within the meaning of Rule 14d-2(a) under the Securities Exchange
Act of 1934, as amended (the Exchange Act)) a cash tender offer to purchase
all of the Shares for $15.25 per Share, net to the seller in cash (the Offer
Price). The terms of the Offer will provide that, subject to Sub's right to
extend the Offer pursuant to Section 1.1.2 below, the Offer will expire on
the date that is twenty (20) business days from the date the Offer is
commenced (such date, or the date through which the Offer may be extended
pursuant to Section 1.1.2 below, the Expiration Date).
1.1.2 Sub reserves the right in its sole discretion to change or
waive any condition, to increase the Offer Price, and to make any other
changes in the terms and conditions of the Offer; PROVIDED, HOWEVER, that Sub
may not without the prior written consent of E/One, (i) decrease the Offer
Price, (ii) change or waive the Minimum Condition, (iii) decrease the number
of Shares sought pursuant to the Offer, (iv) impose conditions in addition to
the Offer Conditions or (v) otherwise amend the Offer in any manner adverse
to E/One's stockholders. Notwithstanding the foregoing, Sub may, without
E/One's consent (x) extend the Offer, if at such original Expiration Date the
Minimum Condition (as defined below) or any of the Offer Conditions have not
been satisfied or waived; (y) extend the Offer for any period required by any
rule, regulation, interpretation or position of the Securities and Exchange
Commission (the SEC); or (z) extend the Offer for no more than ten (10)
business days beyond the original Expiration Date contemplated by
Section 1.1.1 in the event that the Offer Conditions have been satisfied but
less than ninety percent (90%) of the Shares have been tendered pursuant to
the Offer.
1.1.3 On the date the Offer is commenced, Sub will file with the
SEC a Tender Offer Statement on Schedule 14D-1 (together with all amendments
and supplements thereto, the Schedule 14D-1) with respect to the Offer.
The Schedule 14D-1 will contain as an exhibit or incorporate by reference the
Offer to Purchase (or portions thereof) and form of the related letter
2
<PAGE>
of transmittal and summary advertisement to be used in connection with the
Offer (the Schedule 14D-1 and such other documents, together with any
supplements thereto or amendments thereof, being referred to herein
collectively as the Offer Documents). E/One will provide to Sub in writing
all information regarding E/One necessary for the preparation of the Offer
Documents, and E/One and its counsel will be given a reasonable opportunity
to review and comment on the Offer Documents before they are filed with the
SEC and distributed to E/One's stockholders. Sub will provide to E/One and
its counsel any comments that Sub receives (directly or through its counsel)
from the SEC or its staff with respect to the Offer Documents promptly after
receiving such comments. Sub and E/One will each promptly correct any
information provided by it for use in the Offer Documents if and to the
extent that it has become false or misleading in any material respect, and
Sub will promptly amend and supplement the Offer Documents if and to the
extent that they have become false or misleading in any material respect and
will promptly cause the Offer Documents as so amended and supplemented to be
filed with the SEC and to be disseminated to E/One's stockholders, in each
case as and to the extent required by applicable federal securities laws.
1.1.4 The obligation of Sub to accept for payment and pay for
Shares tendered pursuant to the Offer shall be subject only to (i) the
condition (the Minimum Condition) that at least the number of Shares that
constitute two-thirds of the then outstanding Shares on a fully diluted basis
(including, without limitation, all Shares issuable upon the conversion of
any convertible securities or upon the exercise of any options, warrants or
rights, whether or not vested or exercisable) shall have been validly
tendered and not withdrawn prior to the expiration of the Offer and (ii) the
satisfaction or waiver of the other conditions set forth in Annex A (the
Offer Conditions). Subject only to the Minimum Condition and the Offer
Conditions, in accordance with the terms of the Offer, Sub will, and PCC will
cause Sub to, accept for payment all Shares validly tendered and not
withdrawn (the Tendered Shares) as soon as legally permissible after
commencement of the Offer, and pay for all Tendered Shares as promptly as
practicable thereafter. PCC shall provide or cause to be provided to Sub on
a timely basis the funds necessary to accept for payment, and pay for, any
Shares that Sub becomes obligated to accept for payment, and pay for,
pursuant to the Offer.
1.2 ACTIONS BY E/ONE.
1.2.1 E/One hereby approves of and consents to the Offer and
represents and warrants that the E/One Board, at a meeting duly called and
held on February 24, 1998 unanimously has (i) determined that this Agreement
and the transactions contemplated hereby, including the Offer, are fair to
and in the best interests of E/One's stockholders, (ii) approved this
Agreement and the transactions contemplated hereby, including the Offer, and
(iii) resolved to recommend that the stockholders of E/One accept the Offer,
tender their Shares to Sub and, if required by applicable law, approve the
transactions contemplated hereby. E/One has been advised by each of its
directors that each such person intends to tender all Shares, if any, that he
or she owns pursuant to the Offer. E/One further represents and warrants
that Miller, Johnson & Kuehn, Inc. has delivered to the E/One Board its
written opinion dated February 24, 1998 to
3
<PAGE>
the effect that, as of the date of such opinion, the amount of the Offer
Price and the Merger Consideration (as defined in Section 3.1.1 below) are
fair to E/One's stockholders from a financial point of view. Miller, Johnson
& Kuehn, Inc. has agreed to permit the inclusion of its fairness opinion or
references thereto in the Offer Documents and the Schedule 14D-9 referred to
below and the Proxy Statement referred to in Section 2.2.1 (subject to its
review and approval of the description of the fairness opinion), and E/One
consents to the inclusion in the Offer Documents of the recommendations of
the E/One Board described in this Section 1.2.
1.2.2 As soon as practicable following commencement of the Offer,
E/One will file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 pertaining to the Offer (together with any amendments or
supplements thereto, the Schedule 14D-9) containing the E/One Board's
recommendation described in Section 1.2.1 and will promptly disseminate the
Schedule 14D-9 to E/One's stockholders to the extent required by Rule 14d-9
promulgated under the Securities Exchange Act of 1934, as amended (the
Exchange Act) and any other applicable federal securities law. Sub and its
counsel will be given a reasonable opportunity to review and comment on the
Schedule 14D-9 before it is filed with the SEC and disseminated to E/One's
stockholders. E/One will provide to PCC and Sub and their counsel any
comments that E/One receives (directly or through its counsel) from the SEC
or its staff with respect to the Schedule 14D-9 promptly after receiving such
comments. E/One, PCC and Sub agree to correct promptly any information
provided by any of them for use in the Schedule 14D-9 that shall have become
false or misleading, and E/One 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 holders of Shares. In each case, PCC and Sub and their
counsel shall be given an opportunity to review and comment on the Schedule
14D-9 and any amendments thereto prior to the filing thereof with the SEC.
1.2.3 E/One will promptly furnish Sub with mailing labels,
security position listings and any available listing or computer files
containing the names and addresses of the record holders of the Shares as of
a recent date and furnish Sub with such additional information and assistance
(including, without limitation, updated lists of stockholders, mailing labels
and lists of securities positions) as Sub or its agents may reasonably
request for the purpose of communicating the Offer to the record and
beneficial holders of Shares. Subject to the requirements of applicable law,
and except for such steps as are necessary to disseminate the Offer Documents
and any other documents necessary to consummate the Merger, PCC and Sub and
their agents will hold in confidence the information contained in any such
labels, listings, and files, will use such information only in connection
with the Offer and the Merger, and if this Agreement is terminated, will upon
E/One's request deliver and will use their best efforts to cause their agents
to deliver to E/One all copies of and any extracts or summaries from such
information then in their possession and control.
1.3 DESIGNATION OF DIRECTORS OF E/ONE FOLLOWING COMPLETION OF OFFER.
1.3.1 Promptly upon Sub's consummation of the Offer, Sub will be
entitled, subject to compliance with Section 14(f) of the Exchange Act, to
designate that number (rounded
4
<PAGE>
up to the next greatest whole number) of directors on the E/One Board that is
equal to the product of the total number of directors on the E/One Board
multiplied by the percentage that the aggregate number of Shares beneficially
owned by Sub or any affiliate of Sub bears to the number of Shares
outstanding. E/One will cause (i) each committee of the E/One Board,
(ii) the board of directors of each subsidiary of E/One, and (iii) each
committee of such board to include persons designated by Sub constituting the
same percentage of each such committee or board as Sub's designees are of the
E/One Board. E/One will, upon request by Sub, promptly increase the size of
the E/One Board or exercise its best efforts to secure the resignations of
such number of directors as is necessary to enable Sub designees to be
elected to the E/One Board and to cause Sub's designees to be so elected.
1.3.2 Subject to applicable law, E/One will promptly take all
action necessary pursuant to Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder in order to fulfill its obligations under this
Section 1.3 and will include in the Schedule 14D-9 disseminated to
stockholders promptly after the commencement of the Offer (or an amendment
thereof or an information statement pursuant to Rule 14f-1 if Sub has not
theretofore designated directors) such information with respect to E/One and
its officers and directors as is required under Section 14(f) and Rule 14f-1
in order to fulfill its obligations under this Section 1.3. PCC and Sub will
supply to E/One 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.
ARTICLE 2
THE MERGER
2.1 THE MERGER. Pursuant to the NYBCL, and subject to and in
accordance with the terms and conditions of this Agreement, Sub will be
merged with and into E/One at the Effective Time, as defined in Section 2.4.
2.2 STOCKHOLDERS' MEETING; PROXY STATEMENT.
2.2.1 If required by applicable law in order to consummate the
Merger, E/One will, in accordance with New York law and E/One's Articles of
Incorporation and Bylaws, call and hold a special meeting of its stockholders
(the Stockholders' Meeting) as soon as practicable following the date on
which the Offer is consummated for the purpose of approving the Merger.
Subject to Section 6.2.2, the E/One Board will recommend to its stockholders
that the Merger be approved, and E/One will use its best efforts to solicit
from its stockholders proxies in favor of the approval of the Merger
(Stockholder Approval), and will take all other action necessary or
advisable to secure the vote or consent of stockholders required by New York
law to obtain such consents.
2.2.2 E/One will, as soon as practicable following the
consummation of the Offer, prepare and file a preliminary Proxy Statement to
solicit Stockholder Approval (the Proxy
5
<PAGE>
Statement) with the SEC and will use its best efforts to respond to any
comments of the SEC or its staff and to cause the Proxy Statement, as
finalized, to be mailed to E/One's stockholders as promptly as practicable
after responding to all such comments to the satisfaction of the staff. Sub
and PCC will provide to E/One in writing all information regarding Sub and
PCC necessary for the preparation of the Proxy Statement. E/One will notify
PCC promptly 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 PCC with copies
of all correspondence between E/One 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. If at any time before the Stockholders' Meeting
there occurs any event that should be set forth in an amendment or supplement
to the Proxy Statement, E/One will promptly prepare and mail to its
stockholders such an amendment or supplement. E/One will not mail any Proxy
Statement, or any amendment or supplement thereto, to which PCC reasonably
objects. The Proxy Statement will include the E/One Board's recommendation
that E/One's stockholders grant proxies to approve the Merger; provided,
however, that such recommendation may be withdrawn, modified, or amended if
and to the extent the E/One Board determines, in good faith after
consultation with outside legal counsel, that a failure to do so would be
contrary to its fiduciary obligations.
2.3 MERGER WITHOUT STOCKHOLDERS' MEETING. Notwithstanding any other
provision in this Agreement, if PCC, Sub, or any affiliate of either of them
beneficially owns at least 90% of the outstanding Shares, the parties agree
to take all necessary and appropriate action to cause the Merger to become
effective as soon as practicable after the Expiration Date, but in no event
later than ten business days thereafter, without a meeting of stockholders of
E/One in accordance with Section 905 of the NYBCL.
2.4 EFFECTIVE TIME. As soon as practicable after satisfaction or
waiver of all of the conditions to the Merger set forth in Article 7 of this
Agreement, a Certificate of Merger or Consolidation prepared in accordance
with Section 901 and 904 of the NYBCL and any other applicable provisions of
the NYBCL (the Certificate of Merger) will be executed and filed with the
Secretary of State of the State of New York. The Merger will be effective on
the date and at the time (the Effective Time) when the Certificate of
Merger has been accepted for filing by the Secretary of State of the State of
New York. The day during which the Effective Time occurs is referred to
herein as the Effective Date.
2.5 EFFECT OF MERGER. At the Effective Time, Sub will be merged with
and into E/One in the manner and with the effect provided by the NYBCL, the
separate corporate existence of Sub will cease and thereupon Sub and E/One
will be a single corporation (the Surviving Corporation) and will continue
to be governed by the laws of the State of New York.
2.6 ARTICLES OF INCORPORATION AND BYLAWS. The Articles of
Incorporation and Bylaws of E/One as in effect at the Effective Time will be
the Articles of Incorporation and Bylaws of the Surviving Corporation, until
each has been duly amended in accordance with the terms thereof and of the
NYBCL.
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2.7 DIRECTORS AND OFFICERS. The directors of Sub at the Effective
Time will be the directors of the Surviving Corporation, until their
respective successors have been duly elected or appointed and qualified. The
officers of Sub at the Effective Time will be the officers of the Surviving
Corporation and will hold office from the Effective Time in accordance with
the Bylaws of the Surviving Corporation.
2.8 CLOSING. Unless this Agreement has been terminated and the
transactions contemplated by it have been abandoned pursuant to Article 8,
the closing of the Merger (the Closing) will take place at the offices of
Stoel Rives LLP, 900 SW Fifth Avenue, Suite 2300, Portland, Oregon 97204, at
10:00 a.m. on the date when the last of the conditions set forth in Article 7
hereof (other than conditions that by their terms are to occur at Closing)
will have been fulfilled or waived or on such other date as PCC and E/One may
agree (the Closing Date).
ARTICLE 3
MERGER CONSIDERATION
3.1 EFFECT OF MERGER ON CAPITAL STOCK OF CONSTITUENT CORPORATIONS.
As of the Effective Time, by virtue of the Merger and without any action on
the part of the holder of any Shares or any shares of capital stock of Sub:
3.1.1 CONVERSION OF E/ONE SHARES. Subject to Section 3.1.5, each
Share issued and outstanding immediately prior to the Effective Time (other
than Shares to be canceled in accordance with Section 3.1.2) will be
converted into the right to receive from the surviving corporation a cash
payment in the amount of $15.25 (the Merger Consideration). As of the
Effective Time, all the Shares will no longer be outstanding and will
automatically be canceled and retired and will cease to exist, and each
holder of a certificate representing any such Shares will cease to have any
rights with respect thereto, except the right to receive the Merger
Consideration, without interest.
3.1.2 CANCELLATION OF TREASURY STOCK AND SHARES OWNED BY PCC
PARTIES. Each Share that is held in the treasury of E/One and any Shares
owned by PCC or Sub immediately before the conversion pursuant to
Section 3.1.1 will automatically be canceled and retired and will cease to
exist, and no consideration will be delivered in exchange therefor.
3.1.3 CAPITAL STOCK OF SUB. Each issued and outstanding share of
capital stock of Sub will be converted into and become one fully paid and
nonassessable share of E/One Common Stock.
3.1.4 WITHHOLDING TAX. The right of any stockholder to receive
the Merger Consideration will be subject to and reduced by the amount of any
required tax withholding obligation.
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3.1.5 SHARES OF DISSENTING STOCKHOLDERS. Notwithstanding anything
in this Agreement to the contrary, if any shareholder of E/One who has not
voted such Shares in favor of or consented to the Merger and who is entitled
to dissent from the Merger and require appraisal for his or her Shares under
the NYBCL (a Dissenting Stockholder) and complies with all the provisions
of Section 910 of the NYBCL concerning the right of holders of Shares to
dissent from the Merger and require appraisal of their Shares (Dissenting
Shares) will not be converted as described in Section 3.1.1 but will become
the right to receive such consideration as may be determined to be due to
such Dissenting Stockholder pursuant to the laws of the State of New York.
If, after the Effective Time, such Dissenting Stockholder (if any) withdraws
his or her demand for appraisal or fails to perfect or otherwise loses his or
her right of appraisal, in any case pursuant to NYBCL, his or her Shares will
be deemed to be converted as of the Effective Time into the right to receive
the Merger Consideration. E/One will give PCC and Sub (i) prompt notice of
any demands for appraisal of Shares received by E/One and (ii) the
opportunity to participate in and direct all negotiations and proceedings
with respect to any such demands. E/One will not, without the prior written
consent of PCC, make any payment with respect to, or settle, offer to settle,
or otherwise negotiate, any such demands.
3.2 EXCHANGE OF CERTIFICATES.
3.2.1 PAYING AGENT. Before the Effective Time, PCC and E/One
will designate a mutually acceptable bank or trust company to act as paying
agent in the Merger (the Paying Agent). From time to time on, before or
after the Effective Time, PCC will make available, or cause the Surviving
Corporation to make available, to the Paying Agent funds in amounts and at
the times necessary for the payment of the Merger Consideration upon
surrender of certificates representing Shares outstanding immediately prior
to the Effective Time (other than Shares owned by Sub) as part of the Merger
pursuant to Section 3.1.1, it being understood that any and all interest
earned on funds made available to the Paying Agent pursuant to this Agreement
will be turned over to PCC.
3.2.2 EXCHANGE PROCEDURE. As soon as reasonably practicable
after the Effective Time, the Paying Agent will mail to each holder of record
of a certificate or certificates that immediately before the Effective Time
represented Shares (the Certificates), (i) a notice (advising the holders
that the Merger has become effective) and a letter of transmittal in
customary and appropriate form (which will specify that delivery will be
effected, and risk of loss and title to the Certificates will pass, only upon
proper delivery of the Certificates to the Paying Agent) and (ii)
instructions for use 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 PCC or Sub, together with such letter of transmittal, properly
completed and duly executed, and such other customary documents as may
reasonably be required by the Paying Agent, the holder of such Certificate
will be entitled to receive in exchange therefor the amount of cash into
which the Shares theretofore represented by such Certificate have been
converted pursuant to Section 3.1, and the Certificate so surrendered will be
canceled. In the event of a transfer of ownership of Shares that is not
registered in the transfer
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records of E/One, payment may be made to a Person (as defined in Section 3.2.4
below) other than the Person in whose name the Certificate so
surrendered is registered, if such Certificate is properly endorsed or
otherwise is in proper form for transfer and the Person requesting such
payment pays any transfer or other taxes required by reason of the payment to
a Person other than the registered holder of such Certificate or establishes
to the satisfaction of the Surviving Corporation that such tax has been paid
or is not applicable. Until surrendered as contemplated by this
Section 3.2.2, each Certificate will be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender the
Merger Consideration, without interest, into which the Shares theretofore
represented by such Certificate will have been converted pursuant to
Section 3.1.1. No interest will be paid or will accrue on the cash payable
upon the surrender of any Certificate.
3.2.3 NO FURTHER OWNERSHIP RIGHTS IN E/ONE COMMON STOCK. All
cash paid upon the surrender of Certificates in accordance with the terms of
Sections 3.1 will be deemed to have been paid in full satisfaction of all
rights pertaining to the Shares theretofore represented by such Certificates.
At the Effective Time, the stock transfer books of E/One will be closed, and
there will be no further registration of transfers on the stock transfer
books of the Surviving Corporation of the Shares that were outstanding
immediately before the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation or the Paying Agent
for any reason, they will be canceled and exchanged as provided in
Section 3.1.
3.2.4 NO LIABILITY. None of PCC, Sub, E/One, or the Paying Agent
will be liable to any Person in respect of any cash or security delivered to
a public official pursuant to any applicable abandoned property, escheat, or
similar law. As used in this Agreement, the term Person means any
individual, corporation, general partnership, limited partnership, limited
liability company, joint venture, trust, cooperative or other association,
Governmental Entity (as defined in Section 4.2(b) below), or any other
organization.
3.2.5 LOST, STOLEN, OR DESTROYED CERTIFICATES. In the event that
any Certificate has been lost, stolen, or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Certificate to be lost,
stolen, or destroyed, E/One will issue in exchange for such lost, stolen, or
destroyed Certificate, the Merger Consideration deliverable in respect
thereof as determined in accordance with this Agreement; PROVIDED, HOWEVER,
that E/One may, in its sole discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen, or destroyed
Certificate to give E/One a bond in such sum as it may reasonably direct as
indemnity against any claim that may be made against E/One with respect to
the certificate alleged to have been lost, stolen, or destroyed.
3.3 E/ONE STOCK OPTIONS AND WARRANT. E/One shall use its best
efforts to enter into an agreement with each holder of stock options, vested
and unvested, outstanding under E/One's 1996 Incentive Compensation Plan,
1996 Incentive Compensation Plan for Non-Employee Directors, and 1972 Stock
Option Plan (the Plans) and the outstanding warrants to purchase E/One
common stock, which agreement provides that, immediately after the date on
which Sub
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shall have accepted for payment all Shares validly tendered and not withdrawn
prior to the expiration date with respect to the Offer (the Tender Offer
Acceptance Date), each option or warrant that is then outstanding, whether or
not then exercisable or vested, shall be canceled by E/One, and each holder
of a canceled option or warrant shall be entitled to receive from Sub at the
same time as payment for Shares is made by Sub in connection with the Offer,
in consideration for the cancellation of such option or warrant, an amount in
cash equal to the product of (i) the number of Shares previously subject to
such option or warrant, and (ii) the excess, if any, of the Offer Price over
the exercise price per Share previously subject to such option or warrant,
reduced by any applicable withholding. Any options or warrants outstanding
at the Effective Time shall be canceled.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF E/ONE
In this Agreement, the term Material Adverse Effect used in
connection with a party means any event, change or effect that is materially
adverse to the condition (financial or otherwise), properties, assets,
liabilities, businesses, operations or results of operations of such party in
excess of $50,000. Combined Material Adverse Effect means any individual
or combination of events, changes or effects that are materially adverse to
the condition (financial or otherwise), properties, assets, liabilities,
businesses, operations or results of operations of such party in excess of
$500,000. Material Adverse Change means any change that has resulted, will
result or is likely to result in a Material Adverse Effect. The term
Disclosure Schedule means the document delivered by E/One to PCC on the
date hereof that sets forth certain exceptions to the representations and
warranties contained in this Agreement under captions referencing each and
every Section to which such exceptions apply, provided that information
appropriately and expressly disclosed or qualified with respect to one
representation or warranty in the Disclosure Schedule shall be deemed to have
been disclosed or qualified with respect to any other applicable
representation or warranty to the extent that the disclosure contains a clear
statement of the relevant fact or facts so as to provide reasonable notice of
the applicability of the disclosure to the unreferenced representation or
warranty.
E/One hereby represents and warrants to PCC and Sub as follows, except
as set forth in the Disclosure Schedule:
4.1 CORPORATE EXISTENCE AND AUTHORITY. E/One is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of New York. E/One has the full corporate power and authority to enter into
this Agreement and carry out its terms, subject to the conditions set forth
in the Agreement. The Board of Directors of E/One has, by resolutions duly
adopted, authorized and approved the Merger, which resolutions have not been
rescinded or otherwise modified and remain in full force and effect. Except
for the approval of its stockholders, E/One has taken all corporate action
necessary to authorize the execution, delivery, and performance of this
Agreement. This Agreement has been duly and validly executed and delivered
by E/One and is binding upon and enforceable against E/One in accordance with
its terms, and the Articles of Merger, when executed and
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delivered by E/One, will constitute the valid and binding obligation of E/One.
4.2 NO ADVERSE CONSEQUENCES. Neither the execution and delivery of
this Agreement by E/One nor the consummation of the transactions contemplated
by this Agreement will:
(a) violate or conflict with any provision of the charter or
bylaws of E/One;
(b) violate any law, judgment, order, injunction, decree,
rule, regulation, or ruling of any court, legislature, administrative
agency or commission or other governmental or other regulatory authority
or agency (a Governmental Entity) applicable to E/One, except as such
would not have a Material Adverse Effect, individually or in the
aggregate;
(c) either alone, or with the giving of notice or the
passage of time or both, conflict with, constitute grounds for termination
or acceleration of, result in the breach of the terms, conditions, or
provisions of, result in the loss of any benefit to E/One under, or
constitute a default under any agreement, instrument, license, or permit
to which E/One is a party or by which E/One is bound, or result in the
creation or imposition of any lien, charge or encumbrance on any of the
assets of E/One except as such would not have a Material Adverse Effect,
individually or in the aggregate; or
(d) require any notices to or consent of any third party,
including without limitation any Governmental Entity, other than under the
HSR Act (as hereinafter defined).
4.3 CAPITALIZATION. E/One has authorized capital stock consisting of
6,000,000 shares of E/One Common Stock, of which 4,295,827 shares were
outstanding on February 24, 1998 and 20,386 shares are in treasury. Options
to purchase 416,422 shares were outstanding on February 24, 1998 under grants
made pursuant to the 1996 Incentive Compensation Plan, 1996 Incentive
Compensation Plan for Nonemployee Directors, and 1972 Stock Option Plan.
Warrants to purchase 10,000 shares were outstanding on February 24, 1998.
All of the outstanding shares of capital stock of E/One have been duly
authorized and are validly issued, fully paid, and nonassessable, and no
shares were issued in violation of preemptive or similar rights of any
stockholder or in violation of any applicable securities laws. Except as set
forth above, there are no shares of capital stock of E/One authorized,
issued, or outstanding, and, except as set forth above, there are no
preemptive rights or any outstanding subscriptions, options, warrants,
rights, convertible securities, or other agreements or commitments of E/One
of any character relating to the issued or unissued capital stock or other
securities of E/One. There are no outstanding obligations of E/One to
repurchase, redeem, or otherwise acquire any of the Shares.
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4.4 SUBSIDIARIES AND JOINT VENTURES. Except as disclosed on the
Disclosure Schedule, E/One has no subsidiaries and owns no stock or other
interest in any other corporation or in any partnership or limited liability
company, or other venture or entity. Each subsidiary of E/One is duly
organized, validly existing, and in good standing under the laws of its
jurisdiction of incorporation or formation.
4.5 SEC REPORTS AND FINANCIAL STATEMENTS. E/One has filed with the
SEC, and has made available to PCC true and complete copies of, all forms,
reports, schedules, statements, and other documents required to be filed by
it since December 31, 1994 under the Securities Exchange Act of 1934, as
amended (the Exchange Act) or the Securities Act of 1933, as amended (the
Securities Act) (each of such forms, reports, schedules, statements, and
other documents, to the extent filed and publicly available before the date
of this Agreement, other than preliminary filings, is referred to as an
E/One SEC Document). Each E/One SEC Document, at the time filed, (a) did
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading and (b) complied in all material respects with the applicable
requirements of the Exchange Act and the Securities Act, as the case may be,
and the applicable rules and regulations of the SEC thereunder. The
financial statements of all E/One Entities included in the E/One SEC
Documents comply as to form in all material respects with applicable
accounting requirements and with the published rules and regulations of the
SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto or, in the
case of the unaudited statements, as permitted by Form 10-Q of the SEC) and
fairly present (subject, in the case of the unaudited statements, to normal,
recurring audit adjustments) the consolidated financial position of E/One and
its consolidated subsidiaries as of and at the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended.
4.6 INFORMATION SUPPLIED. None of the information supplied or to be
supplied by E/One specifically for inclusion or incorporation by reference in
(i) the Offer Documents; (ii) the Schedule 14D-9; (iii) the information to be
filed by E/One in connection with the Offer pursuant to Rule 14f-1
promulgated under the Exchange Act (the Information Statement); or (iv) the
Proxy Statement will, in the case of the Offer Documents, the Schedule 14D-9,
and the Information Statement, at the respective times the Offer Documents,
the Schedule 14D-9, and the Information Statement are filed with the SEC or
first published, sent, or given to E/One's stockholders, or, in the case of
the Proxy Statement, at the time the Proxy Statement is first mailed to
E/One's stockholders or at the time of the Stockholders' 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 light of the circumstances under which they are made, not
misleading, except that no representation or warranty is made by E/One with
respect to statements made or incorporated by reference therein based on
information supplied by PCC or Sub in writing specifically for inclusion or
incorporation by reference therein. The Schedule 14D-9, the Information
Statement, and the Proxy Statement will comply as to form in
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all material respects with the requirements of the Exchange Act and the rules
and regulations thereunder.
4.7 LEGAL PROCEEDINGS. Except as disclosed in an E/One SEC Document
or in the Disclosure Schedule, there is neither pending nor, to the best
knowledge of E/One, threatened by or against E/One any legal action, claim,
arbitration, investigation, or administrative proceeding before any
Governmental Entity that could (i) have a Material Adverse Effect on the
parties following the Closing; or (ii) enjoin or restrict the right or
ability of E/One to perform its obligations under this Agreement and, to the
best knowledge of E/One, there is no basis for any such claim, litigation,
proceeding, or investigation.
4.8 CONTRACTS AND ARRANGEMENTS. The Disclosure Schedule contains a
complete and accurate list of all agreements of the following types,
organized by type of agreement, to which E/One is a party or by which it is
bound and which are material to E/One (the Contracts):
(a) any mortgage, note, or other instrument or agreement
relating to the borrowing of money or the incurrence of indebtedness by
E/One or any guaranty of any obligation for the borrowing of money;
(b) contracts, agreements, purchase orders, or
acknowledgment forms for the purchase, sale, lease or other disposition of
E/One's equipment, products, materials, or capital assets, or for the
performance of services which exceed $100,000 individually or on an annual
commitment basis;
(c) contracts or agreements for the joint performance of
work or services and all other joint venture agreements;
(d) contracts or agreements with agents, brokers,
consignees, sales representatives, or distributors relating to the sale of
E/One's products or services;
(e) contracts or agreements relating to the employment or
compensation of E/One's officers, directors, or employees, including
without limitation any collective bargaining agreements, other than
disclosed in the Disclosure Schedule in response to Section 4.16 ;
(f) any other contract, instrument, agreement, or obligation
not described in any other section of this Agreement to which E/One is a
party or by which it is bound and which contains material unfulfilled
obligations of E/One.
4.9 REAL PROPERTY; MATERIAL ASSETS. The Disclosure Schedule contains
a list of (i) all real property owned by E/One and (ii) all other assets
owned by E/One having an original cost of more than $100,000 (together, the
Material Properties and Assets). Except as set forth in the Disclosure
Schedule, E/One has good and marketable title to all of its respective
Material
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Properties and Assets subject to no encumbrance, lien, charge, or other
restriction (including, without limitation, any restriction on transfer) of
any kind or character and there is no condition, restriction, or reservation
affecting the title to or utility of any of the Material Properties and
Assets, other than (i) such imperfections or irregularities of title,
encumbrances, claims, liens, charges or other conditions, restrictions or
reservations as do not materially affect the use of the properties or assets
subject thereto or affected thereby or otherwise materially impair business
operations at such properties, (ii) statutory liens securing payments
(including taxes) not yet due and (iii) such imperfections or irregularities
of title, encumbrances, claims, liens, charges or other conditions,
restrictions or reservations as do not have a Material Adverse Effect on
E/One.
4.10 LEASES. The Disclosure Schedule contains a list of all material
leases with terms in excess of one year to which E/One is a party (the
Leases). Except as does not have a Material Adverse Effect, E/One enjoys
undisturbed possession to each leasehold interest it holds under the Leases.
4.11 STATUS OF CONTRACTS AND LEASES.
(a) Each of the Contracts and Leases is valid, binding, and
enforceable by E/One in accordance with its terms and is in full force and
effect, except as enforceability may be limited or affected by applicable
bankruptcy, insolvency, reorganization or other laws of general
application relating to or affecting the rights of creditors and except as
enforceability may be limited by principles of equity governing specific
performance, injunctive relief or other equitable remedies. There is no
existing default or violation by E/One under any Contract or Lease and no
event has occurred which (whether with or without notice, lapse of time,
or both) would constitute a default of E/One under any Contract or Lease,
except for such defaults as would not have a Material Adverse Effect.
(b) E/One is not aware of any default by any other party to
any Contract or Lease or of any event which (whether with or without
notice, lapse of time, or both) would constitute a default by any other
party with respect to obligations of that party under any Contract or
Lease, except for such defaults as would not have a Material Adverse
Effect.
(c) Except as set forth in the Disclosure Schedule, E/One is
not a party to, nor is it bound by, any Contract (other than the
Distributor Agreements referred to in Section 4.26) that:
(i) to E/One's knowledge will result in any material
loss to it upon the performance thereof, including any material
liability for penalties or damages, whether liquidated, direct,
indirect, incidental or consequential, or
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(ii) is not terminable by E/One with 90 days or fewer
notice and which termination will not cause a Material Adverse Effect
(other than the Distributor Agreements referred to in Section 4.26).
4.12 COMPLIANCE WITH LAWS. Except for those whose absence, either
individually or in the aggregate, would not have a Material Adverse Effect,
and, with the passage of time will not have a Material Adverse Effect, E/One
possesses all governmental and other licenses, certificates, consents,
permits, and other authorizations of Governmental Entities (collectively,
Licenses) legally required to carry on its business as now conducted. No
material violation exists in respect of, and no proceeding is pending or to
E/One's knowledge threatened to revoke or limit, any such License. Except as
disclosed in the E/One SEC Documents, the businesses of E/One are not being
conducted in violation of any laws, rules, regulations, ordinances, codes,
judgments, orders, writs, or decrees applicable to its business where such
violation would have a Material Adverse Effect. Except as set forth on the
Disclosure Schedule or disclosed in the E/One SEC Documents, there have been
no violations of such laws, rules, regulations, ordinances, codes, judgments,
orders, writs, and decrees since December 31, 1992 where such violation,
either individually or in the aggregate, would have a Material Adverse Effect.
4.13 ENVIRONMENTAL MATTERS.
4.13.1 DEFINITIONS. As used in this Agreement, Environmental
Law means any federal, state, or local statute, regulation, or ordinance
pertaining to the protection of human health or the environment and any
applicable orders, judgments, decrees, permits, licenses, or other
authorizations or mandates under such laws. Hazardous Substance means any
hazardous, toxic, radioactive, or infectious substance, material, or waste as
defined, listed, or regulated under any Environmental Law, and includes
without limitation petroleum oil and its fractions. Contamination means
the existence (actual or reasonably suspected) in the environment of a
Hazardous Substance, if the existence or suspected existence of such
Hazardous Substance requires any investigatory, remedial, removal, or other
response action under any Environmental Law, if such response action legally
could be required by any Governmental Entity under prevailing Environmental
Laws.
4.13.2 COMPLIANCE. Except as disclosed in the Disclosure
Schedule, the businesses and the assets of E/One are in material compliance
with all Environmental Laws and those entities have all permits required
under Environmental Laws in connection with the construction, ownership or
operation of those assets and the businesses. E/One is not aware of and has
not received notice of any past, present or anticipated future events,
conditions, activities, investigation, studies, plans or proposals that
(a) would interfere with or prevent compliance by E/One with any
Environmental Law, or (b) may give rise to any common law or other liability,
or otherwise form the basis of a claim, action, suit, proceeding, hearing or
investigation, involving E/One and related in any way to Hazardous Substances
or Environmental Laws.
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4.13.3 HAZARDOUS SUBSTANCES. Except as disclosed in the
Disclosure Schedule, on Hazardous Substance has been disposed of, spilled,
leaked or otherwise released on, in, under or from, or otherwise come to be
located in the soil or water (including surface and ground water) on or
under, any real property owned, leased or occupied by E/One now or in the
past. Except as disclosed on the Disclosure Schedule, none of the assets of
E/One have incorporated into them any asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls (in electrical equipment or otherwise),
lead-based paint or any other Hazardous Substance which is prohibited,
restricted or regulated when present in buildings, structures, fixtures or
equipment. Except as disclosed on the Disclosure Schedule, all wastes
generated in connection with the businesses of E/One are and have been
transported to and disposed of at an authorized waste disposal facility in
compliance with all Environmental Laws. Except as disclosed on the
Disclosure Schedule, E/One is not liable under any Environmental Law for
investigation, remedial, removal or other response costs, natural resources
damages or other damages or for any other claims (including administrative
orders) arising out of the release or threatened release of, or exposure to,
any Hazardous Substance and no basis exists for any such liability. E/One
has not entered any contract pursuant to which it has assumed the liability
of any other person or entity, or agreed to indemnify any other person or
entity for any liability, under any Environmental Law or arising out of the
release or threatened release of, or exposure to, any Hazardous Substance.
4.13.4 UNDERGROUND STORAGE TANKS. Except as disclosed on the
Disclosure Schedule, to the knowledge of E/One there are no underground
storage tanks on any real property owned, leased or occupied by E/One now or
in the past (whether or not regulated and whether or not out of service,
closed or decommissioned).
4.13.5 ENVIRONMENTAL RECORDS. Except as disclosed in the
Disclosure Schedule, E/One has disclosed and made available to PCC true,
complete and correct copies of any reports, studies, analysis, tests,
monitoring, correspondence with governmental agencies or other documents in
the possession of or initiated by E/One or otherwise known to E/One and
pertaining to Hazardous Substances, the existence of Contamination, to
compliance with Environmental Laws, or to any other environmental concern
relating to the assets or the business of E/One.
4.14 TAX MATTERS.
4.14.1 RETURNS. E/One has filed on a timely basis all federal,
state, foreign, and other returns, reports, forms, declarations, and
information returns required to be filed by it with respect to Taxes (as
defined below) that relate to the business, results of operations, financial
condition, properties, or assets of E/One (collectively, the E/One Returns),
all E/One Returns filed are complete and accurate, and E/One has paid on a
timely basis all Taxes. Except as detailed on the Disclosure Schedule, E/One
is not part of, nor has been part of, an affiliated group of corporations
that files or has the privilege of filing consolidated tax returns pursuant
to Section 1501 of the Internal Revenue Code of 1986, as amended (the Code)
or any similar provisions of state, local, or foreign law, and E/One is not a
party to, nor has been a party to, any tax-sharing or tax-allocation
agreement. Except as set forth on the Disclosure Schedule, E/One
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has not received any notice of audit and neither E/One nor any director,
officer or employee responsible for tax matters of E/One has knowledge of any
intention of any authority to assess additional Taxes against E/One or of any
dispute with any authority with respect to such Taxes. There are no
outstanding agreements or waivers extending the applicable statutory periods
of limitation for such Taxes for any period. E/One has provided PCC with
complete and accurate copies of E/One Returns for each of E/One's fiscal
years 1994 through 1996 and the Forms 1139 related to any loss or credit
carryback claim for those years.
4.14.2 TAXES PAID OR RESERVED. The reserves for taxes reflected
in the current balance sheet most recently filed as part of an E/One SEC
Document are adequate for payment of Taxes in respect of periods ending on
the date thereof. All reserves for Taxes have been determined in accordance
with generally accepted accounting principles consistently applied throughout
the periods involved and with prior periods. All Taxes that E/One has been
required to collect or withhold have been collected or withheld and, to the
extent required, have been paid to the proper taxing authority. E/One has
not elected to be treated as a consenting corporation pursuant to Section
341(f) of the Code.
4.14.3 LOSS CARRYFORWARDS; INVESTMENT TAX CREDIT CARRYFORWARDS.
The Disclosure Schedule contains a complete and accurate list of net
operating loss (NOL) carryforwards and investment tax credit carryforwards
available to E/One or one or more other E/One Entities for federal income tax
purposes that originated in taxable years 1990 through 1997.
4.14.4 DEFINITION. As used in this Agreement, the term Taxes
means all federal, state, local, or foreign taxes, charges, fees, levies, or
other assessments, including without limitation all net income, gross income,
gross receipts, premium, sales, use, ad valorem, transfer, franchise,
profits, license, withholding, payroll, employment, excise, estimated
severance, stamp, occupation, property, or other taxes, fees, assessments, or
charges of any kind whatsoever, together with any interest and any penalties
(including penalties for failure to file in accordance with applicable
information reporting requirements), and additions to tax.
4.14.5 MISCELLANEOUS. E/One has not filed a consent under IRC
Section 341(f) concerning collapsible corporations. E/One has not made any
payments, is not obligated to make any payments, nor is a party to any
agreement that in certain circumstances could obligate it to make any
payments that will not be deductible under IRC Section 280G. E/One has not
been a United States real property holding corporation within the meaning of
IRC Section 897(c)(2) during the applicable period specified in IRC Section
897(c)(1)(A)(ii). E/One has disclosed on its federal income tax returns all
positions taken therein that could give rise to a substantial understatement
of federal income tax within the meaning of IRC Section 6662. E/One shall
deliver to PCC all necessary certificates and documents confirming that no
withholding under IRC Section 1445 is required in connection with payment of
the purchase price.
4.14.6 TAX SHARING AGREEMENTS. E/One is not a party to a Tax
allocation or sharing agreement.
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4.15 EMPLOYEES AND LABOR RELATIONS MATTERS. Except as set forth on
the Disclosure Schedule or as provided in this Agreement:
(a) No E/One key employee or executive has communicated to
E/One any plans to terminate employment with E/One.
(b) E/One has complied in all material respects with all
labor and employment laws, including provisions thereof relating to wages,
hours, equal opportunity, collective bargaining, and the payment of social
security and other taxes, except where the failure to comply would not
have a Material Adverse Effect;
(c) There is no unfair labor practice charge, complaint,
representation petition, or other action against E/One pending or to
E/One's best knowledge threatened before the National Labor Relations
Board or any other Governmental Entity and E/One is not subject to any
order to bargain by the National Labor Relations Board;
(d) There is no labor strike, request for representation,
slowdown, or work stoppage actually occurring, pending, or to E/One's
best knowledge threatened against E/One;
(e) To E/One's knowledge no questions concerning
representation have been raised or are threatened with respect to
employees of E/One;
(f) No grievance that might have a Material Adverse Effect
on E/One and no arbitration proceeding arising out of or under any
collective bargaining agreement is pending and to E/One's best knowledge
no basis exists for any such grievance or arbitration proceeding; and
(g) To E/One's knowledge no employee of E/One is subject to
any Noncompetition, nondisclosure, confidentiality, employment,
consulting, or similar agreements with Persons other than E/One relating
to the present business activities of E/One.
(h) All employees of E/One are at will employees, and
E/One is not a party or otherwise subject to any collective bargaining or
other agreement governing the wages, hours or terms of employment of its
employees. E/One has no written severance pay plan, policy, practice or
agreement with any of its employees, except for the Change of Control
Agreements identified in the Disclosure Schedule.
(i) E/One has not experienced any primary work stoppage or
other organized work stoppage involving its employees in the past two
years.
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(j) There are no pending claims, and to E/One's best
knowledge, no threatened claims by or on behalf of any of the employees of
E/One under any federal, state or local labor or employment laws or
regulations.
4.16 EMPLOYEE BENEFITS. The Disclosure Schedule lists all pension,
retirement, profit sharing, deferred compensation, bonus, commission,
incentive, life insurance, health and disability insurance, hospitalization,
and all other employee benefit plans or arrangements (including, without
limitation, any contracts or agreements with trustees, insurance companies or
others relating to any such employee benefit plans or arrangements)
established, maintained, or contributed to by E/One that are currently in
effect or that have been terminated within the past twelve months, and
complete and accurate copies of all those plans or arrangements have been
provided to PCC. The employee pension and employee welfare benefit plans
(within the meaning of Sections 3(1) and 3(2) of the Employee Retirement
Income Security Act of 1974, as amended (ERISA)) established and maintained
by E/One that are subject to ERISA are listed separately as ERISA Plans on
the Disclosure Schedule (the ERISA Plans). The ERISA Plans comply in all
material respects with the applicable requirements of ERISA and any other
applicable laws and regulations. With respect to ERISA Plans intended to
qualify under Section 401(a) of the Code, E/One has received from the
Internal Revenue Service (IRS) a favorable determination for each of the
ERISA Plans that each of the ERISA Plans is qualified. There has been no
event subsequent to that determination of which E/One has received notice
from IRS or has otherwise become aware that has adversely affected the tax
qualified status of the ERISA Plans or the exemption of the related trusts.
As to any such ERISA Plan that has been terminated, any legally-required
notices to employees and to the Pension Benefit Guaranty Corporation (if
applicable) have been provided as required, all other legally-required
actions have been taken to accomplish the termination, and a favorable IRS
determination letter has been requested with respect to such termination. In
response to any such request for a determination letter on plan termination,
a favorable letter has been received from the IRS or, if the requested
favorable letter has not yet been received, there has been no event or
absence of a necessary action that would prevent the issuance of a favorable
determination letter on the termination in due course. No accumulated
funding deficiency as defined in Section 302(a)(2) of ERISA or Section
412(a) of the Code exists, with respect to any of the ERISA Plans. Neither
E/One nor a controlled group of corporations of which E/One is a member have
any actual or potential withdrawal liability, as defined in Section 4201
and related provisions of ERISA. To the knowledge of E/One, none of the
ERISA Plans, its related trusts or any trustee, investment manager or
administrator thereof has engaged in a nonexempt prohibited transaction, as
such term is defined in Section 406 of ERISA and Section 4975 of the Code.
There are not and have not been any excess deferrals or excess
contributions as defined in Code Sections 401(k)(8)(B) and 402(g)(2)(a)
under any ERISA Plan that have not been corrected. Each ERISA Plan is, and to
the knowledge of E/One has been, operated and administered in all material
respects in conformance with the requirements of all applicable laws and
regulations, whether or not the ERISA Plan documents have been amended to
reflect such requirements. Except as set forth in the Disclosure Schedule,
E/One has no obligation of any kind (whether under the terms of the ERISA
Plans or under any understanding with employees) to make payments under, or
to pay contributions to, any plan, agreement, or
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other arrangement for deferred compensation of employees, whether or not tax
qualified, including, without limitation, a single employer tax qualified
plan, a tax qualified plan of a controlled group of corporations, a
multi-employer pension plan, a nonqualified deferred compensation plan or an
individual employment or compensation agreement, or any commitment to provide
medical benefits to retirees.
4.17 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the
Disclosure Schedule, since December 31, 1997, there has not been:
(a) Any event, occurrence, development, or state of
circumstances or facts which could reasonably be expected to result in a
Material Adverse Effect on the business, results of operations, financial
position, assets, or properties of E/One;
(b) Any damage, destruction, or casualty loss, whether
insured against or not, to the assets or properties of E/One that would
result in a Material Adverse Effect;
(c) Except as permitted by Section 6.1(k), any increase in
the rate or terms of compensation payable or to become payable by E/One to
its directors, officers, or key employees; any increase in the rate or
terms of any bonus, insurance, pension, or other employee benefit plan,
payment, or arrangement made to, for or with any such directors, officers,
or key employees; any special bonus or remuneration paid; or any written
employment or change of control contract executed or amended;
(d) Any amendment to E/One's Articles of Incorporation or
Bylaws or any entry into any material agreement, commitment, or
transaction (including, without limitation, any borrowing, capital
expenditure or capital financing or any amendment, modification, or
termination of any existing agreement, commitment, or transaction) by
E/One, except agreements, commitments, or transactions in the ordinary
course of business and consistent with past practices or as expressly
contemplated in this Agreement;
(e) Any direct or indirect declaration, setting aside, or
payment of any dividend or other distribution (whether in cash, stock,
property, or any combination thereof) in respect of the common stock of
E/One, or any direct or indirect repurchase, redemption, or other
acquisition by E/One of any shares of its stock;
(f) Any issuance or sale of any stock of E/One (other than
issuances pursuant to the exercise of options or warrants outstanding on
February 24, 1998) or any issuance or granting of any option, warrant, or
right to purchase any stock of E/One (other than options and warrants
granted on or before December 31, 1997) or any commitment to do any of
the foregoing;
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(g) Any conduct of business that is outside the ordinary
course of business or not substantially in the manner that E/One has
previously conducted its business;
(h) Any material purchase or other acquisition of property
by E/One, any sale, lease, or other disposition of property by E/One, or
any expenditure by E/One, except in the ordinary course of business;
(i) Any incurrence of any noncontract liability which,
either singly or in the aggregate is material to the business, results of
operations, financial condition, or prospects of E/One; or
(j) Any encumbrance or consent to encumbrance of any
material property or assets of E/One except in the ordinary course of
business and except for the types of encumbrances listed in Section 4.9.
4.18 UNDISCLOSED LIABILITIES. Except for liabilities or obligations
described in the E/One SEC Documents or the Disclosure Schedule, or
liabilities or obligations that would not in the aggregate have a Combined
Material Adverse Effect, neither E/One nor any of the property of E/One is
subject to any material liability or obligation, whether absolute,
contingent, known, or unknown, that was not included or adequately reserved
against in the financial statements contained in the E/One SEC Documents.
4.19 INSURANCE. E/One is now maintaining with financially responsible
insurance companies, the policies of insurance (Policies) on its products,
tangible assets and its business as are listed in the Disclosure Schedule,
and all such Policies are currently in full force and effect. To E/One's
knowledge, there are no disputes with insurers under the Policies, and all
premiums due and payable thereto have been paid. To E/One's knowledge, (i)
there are no pending or threatened cancellations or nonrenewals with respect
to any of the Policies, and E/One is in compliance with all material
conditions contained in its Policies, and (ii) there are no pending or
threatened claims against the Company related to product liability.
4.20 INTELLECTUAL PROPERTY.
(a) The term Intellectual Property Assets means
collectively:
(i) all registered and unregistered trademarks,
service marks, and applications (collectively, Marks);
(ii) all patents and patent applications (collectively,
Patents);
(iii) all copyrights in both published works and
unpublished works that are material to E/One's businesses
(collectively, Copyrights);
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(iv) all trade secrets; and
(v) all trade names, technology, know-how, processes
and related applications used in the conduct of the businesses of
E/One. The Disclosure Schedule contains a list and summary
description of all Marks, Patents and Copyrights.
(b) E/One owns, has the right to use, sell, license, dispose
of, and to bring actions for the misappropriation of all of Intellectual
Property Assets, material to the conduct of its business without any
conflict with or infringement of the rights of others, free and clear of
all liens, charges, encumbrances, or other restrictions of any kind.
(c) The Disclosure Schedule contains a list of all material
agreements, licenses, permits and other instruments relating to the
Intellectual Property Assets material to the conduct of its business to
which E/One is a party, together with a brief description of the
Intellectual Property Asset.
(d) To E/One's knowledge, no Intellectual Property Asset
material to the conduct of business of E/One is infringed or has been
challenged.
(e) There is no action, suit, proceeding, judgment, order,
or writ pending or to E/One's knowledge, threatened against E/One
contesting the validity, ownership, or right to use, sell, license,
dispose of, or to bring actions for the misappropriation of the
Intellectual Property Assets material to the conduct of its business.
4.21 GUARANTIES; POWERS OF ATTORNEY. Except as set forth in the
Disclosure Schedule, E/One is not a guarantor or otherwise liable for any
liability or material obligation (including without limitation any
indebtedness) of any other Person. To E/One's knowledge, there are no
outstanding powers of attorney executed on behalf of E/One other than with
respect to SEC filings or to KPMG Peat Marwick with respect to tax filings.
4.22 BROKERS. No broker, investment banker, financial advisor, or
other Person, other than The Nassau Group, Inc. and Miller, Johnson & Kuehn,
Inc., the fees and expenses of which will be paid by E/One, is entitled to
any broker's, finder's, financial advisor'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 E/One. E/One has provided
PCC true and correct copies of all agreements between E/One and The Nassau
Group, Inc.
4.23 DEFERRED COMPENSATION OBLIGATIONS. E/One has deposited in a
rabbi trust a number of Shares of its Common Stock that equals or exceeds the
number of Shares credited to participants' accounts under Section 3.4 of
E/One's Deferred Compensation Plan for certain executive employees (Deferred
Compensation Plan).
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4.24 PRODUCT WARRANTIES. The reserves for warranty claims on the
Company's financial statements for the period ended September 30, 1997 filed
in an E/One SEC Document are consistent with E/One's prior practices and such
reserve is adequate to cover all warranty claims made or to be made against
any products of E/One sold prior to the date thereof based on past warranty
claim experience.
4.25 Distributors and Suppliers. The Disclosure Schedule lists the 10
largest distributors and the 10 largest suppliers of E/One for the year ended
December 31, 1997, and sets forth opposite the name of each such distributor
or supplier the approximate amount of gross sales or purchases by E/One
attributable to such distributor or supplier for such period. No distributor
or supplier listed in the Disclosure Schedule has informed E/One that it will
stop its business with E/One.
4.26 DISTRIBUTORS. The Disclosure Schedule lists (a) all former
distributors of E/One having a written contract that have been terminated
since January 1, 1996; and (b) all pending litigation and pending material
disputes between E/One and any of its past or present distributors, including
any claims initiated by any distributor against E/One. Each distributor of
E/One may be terminated without penalty or other liability other than the
repurchase of inventory upon at 60 days' prior written notice (subject to the
initial term requirement), except as otherwise provided by distributor
protection laws in some states or countries.
4.27 RECORDS. The books of account of E/One are complete and accurate
in all material respects, and there have been no transactions involving the
business of E/One which properly should have been set forth therein and which
have not been accurately so set forth. Complete and accurate copies of such
books and records have been made available to PCC.
4.28 AGREEMENTS WITH SERVICE PROVIDERS. E/One has received and
delivered to PCC true and current copies of binding agreements with The
Nassau Group, Inc. and Miller, Johnson & Kuehn, Inc. relating to all services
rendered by such firms to E/One in connection with the transaction
contemplated by this Merger Agreement.
4.29 EMPLOYMENT AGREEMENTS. The Company has entered into Employment
Agreements with Stephen V. Ardia, Mark E. Alexander, David M. Doin,
Brian Buchinski, George A. Earle III, Kathleen A. Parry, George A. Vorsheim
Jr., and Philip W. Welsh on terms approved by PCC.
4.30 DISCLOSURE. None of representations and warranties made by E/One
in this Agreement contains any untrue statement of a material fact or omits a
material fact necessary to make each statement contained therein not
misleading. To E/One's best knowledge, neither E/One nor any responsible
officer or director of E/One has intentionally concealed any fact known by
such Person to have a Material Adverse Effect.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PCC
PCC represents and warrants to E/One as follows:
5.1 CORPORATE EXISTENCE AND AUTHORITY. PCC is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Oregon. PCC has the full corporate power and authority to enter into this
Agreement and carry out its terms. PCC has taken all corporate action
necessary to authorize the execution, delivery, and performance of this
Agreement. This Agreement has been duly and validly executed and delivered
by PCC and is binding upon and enforceable against PCC in accordance with its
terms.
5.2 CORPORATE EXISTENCE AND AUTHORITY OF SUB. Sub is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of New York. Sub has the full corporate power and authority to enter
into this Agreement and carry out its terms. Sub has taken all corporate
action necessary to authorize the execution, delivery, and performance of
this Agreement (other than with respect to the Merger, the filing and
recordation of appropriate merger documents as required by New York law).
This Agreement has been duly and validly executed and delivered by Sub and is
binding upon and enforceable against Sub in accordance with its terms. All
of the issued and outstanding voting capital stock of Sub is owned by PCC.
5.3 NO ADVERSE CONSEQUENCES. Neither the execution and delivery of
this Agreement by PCC or Sub nor the consummation of the Transactions will:
(a) violate or conflict with any provision of the charter or
bylaws of PCC or Sub;
(b) violate any law, judgment, order, injunction, decree,
rule, regulation, or ruling of any court, legislature, administrative
agency or commission or other governmental or other regulatory authority
or agency (a Governmental Entity) applicable to PCC or Sub, except as
such would not individually or in the aggregate prevent PCC or Sub from
performing their respective obligations under this Agreement and
consummating the Transactions;
(c) either alone or with the giving of notice or the passage
of time or both, conflict with, constitute grounds for termination or
acceleration of, result in the breach of the terms, conditions, or
provisions of, result in the loss of any benefit to PCC or Sub under,
or constitute a default under any agreement, instrument, license, or
permit to which PCC or Sub is a party or by which PCC or Sub is bound,
or result in the creation or imposition of any lien, charge or encumbrance
on any of the assets of PCC or Sub except as such would not have a
Material Adverse Effect, individually or in the aggregate; or
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(d) require any notices to or consent of any third party,
including without limitation any Governmental Entity other than under the
HSR Act, except where the failure to obtain such consents, approvals or
authorizations would not prevent or delay consummation of the Offer or the
Merger or otherwise prevent PCC or Sub from performing its obligations
under this Agreement.
5.4 LEGAL PROCEEDINGS. There is neither pending nor, to the best
knowledge of PCC or Sub, threatened by or against PCC or Sub any legal
action, claim, arbitration, investigation, or administrative proceeding
before any Governmental Entity that could enjoin or restrict the right or
ability of PCC or Sub to perform its obligations under this Agreement and, to
the best knowledge of PCC or Sub, there is no basis for any such claim,
litigation, proceeding, or investigation.
5.5 OFFER DOCUMENTS; PROXY STATEMENT. The Offer Documents will not
at the time the Offer Documents are filed with the SEC or are first
published, sent or given to stockholders of E/One, as the case may be,
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 made therein, in light of the circumstances under which they are
made, not misleading. The information supplied by PCC for inclusion in the
proxy statement to be sent to the stockholders of E/One in connection with
the Stockholders Meeting (as defined below) such proxy statement, as amended
and supplemented, being referred to herein as the Proxy Statement and
Schedule 14D-9 will not, on the date the Proxy Statement or Schedule 14D-9
(or any amendment or supplement thereto) is first mailed to stockholders of
E/One, at the time of the Stockholders Meeting, contain any statement which,
at such time and in light of the circumstances under which it is made, is
false or misleading with respect to any material fact, or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not false or misleading or necessary to correct any
statement in any earlier communication with respect to the solicitation of
proxies for the Stockholders Meeting which shall have become false or
misleading; PROVIDED, HOWEVER, ,that PCC and Sub makes no representation or
warranty with respect to information supplied by E/One for inclusion in any
of the foregoing documents or the Offer Documents. The Offer Documents shall
comply in all material respects as to form with the requirements of the
Exchange Act and the rules and regulations thereunder.
5.6 FINANCING. PCC has under existing financing arrangements, and
will make available to Sub, sufficient funds to permit Sub to acquire all of
the outstanding Shares in the Offer and the Merger.
ARTICLE 6
COVENANTS
6.1 CONTINUATION OF BUSINESS. From and after the execution date of
this Agreement until Closing, E/One covenants and agrees to use its best
efforts to: (i) keep the business and
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organization of E/One intact until the Closing; and (ii) carry on the
business of E/One in its usual and ordinary course of business and in a
manner consistent with past practice until Closing. Without limiting the
generality of the foregoing, except as expressly provided to the contrary in
this Agreement or with the prior written consent of PCC, until the Closing,
E/One agrees that:
(a) E/One will not declare, pay, or set aside for payment
any dividend or other distribution of money or property in respect of its
capital stock;
(b) E/One will not issue any shares of its capital stock
(except upon the valid exercise of currently outstanding Options under the
1996 Incentive Compensation Plan, 1996 Incentive Compensation Plan for
Nonemployee Directors, or 1972 Stock Option Plan, or currently outstanding
warrants), or issue or sell any securities convertible into, or
exchangeable for, or options, warrants to purchase, or rights to subscribe
to, any shares of its capital stock or subdivide or in any way reclassify
any shares of its capital stock, or repurchase, reacquire, cancel, or
redeem any such shares;
(c) E/One will use its best efforts to ensure that (i) the
assets, property and rights now owned by E/One will be used, preserved,
and maintained, as far as practicable, in the ordinary course of business,
to the same extent and in the same condition as said assets, property, and
rights are on the date of this Agreement, and no unusual or novel methods
of manufacture, purchase, sale, management, or operation of said
properties or business or accumulation, disposition, or valuation of
inventory will be made or instituted; (ii) E/One will not encumber any of
its material assets other than in connection with E/One's existing credit
arrangements with Fleet Bank of New York or make any material commitments
relating to such assets, property, or business, except in the ordinary
course of its business. E/One will use its commercially reasonable best
efforts to ensure that E/One will pay all debts when due in the usual
course of business;
(d) E/One will use its best efforts to ensure that it will
comply in all material respects with all statutes, laws, ordinances,
rules, and regulations applicable to it in the ordinary course of
business;
(e) E/One will use its best efforts to ensure that it will
keep or cause to be kept the Policies (or substantial equivalents) in such
amounts duly in force until the Closing Date and will give PCC notice of
any material change in the Policies;
(f) E/One will not incur additional debt (including without
limitation obligations under leases for real or personal property whether
or not required to be capitalized under generally accepted accounting
principles), incur or increase any obligation or liability (fixed,
contingent, or other, including without limitation liabilities as a
guarantor or otherwise with respect to obligations of others) except in
the ordinary and usual course of its business and consistent with past
practices, forgive or release any
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material debt or claim, give any waiver of any right of material value,
or voluntarily suffer any extraordinary loss;
(g) E/One will not make any payment to discharge or satisfy
any lien or encumbrance or pay any obligation or liability (fixed or
contingent) other than (i) current liabilities (including the current
portion of any long-term liabilities) included in the financial statements
contained in the E/One SEC Documents and (ii) current liabilities incurred
or maturing in the ordinary course of business since the date of the
current balance sheet most recently filed as part of a E/One SEC Document
or (iii) payments under its revolving credit facility with Fleet Bank of
New York made in the ordinary course of business and consistent with past
practices;
(h) E/One will not acquire any assets other than assets
acquired in the ordinary and usual course of its business and consistent
with past practices;
(i) E/One will not purchase or otherwise acquire, or agree
to purchase or otherwise acquire, any debt or equity securities of any
Person other than equity securities issued by a money market fund
registered as an investment company under the Investment Company Act of
1940;
(j) E/One will not enter into any transaction or contract or
make any commitment to do the same, except in the ordinary and usual
course of business and not requiring the payment in any case of an amount
in excess of $50,000 annually;
(k) E/One will not increase the wages, salaries,
compensation, pension, or other benefits payable, or to become payable by
it, to any of its officers, employees, or agents, including without
limitation any bonus payments or severance or termination pay, other than
increases in wages and salaries required by employment arrangements
existing on the execution date of this Agreement or otherwise in the
ordinary and usual course of its business, including changes consistent
with E/One's normal performance review process for salary increases in
April 1998;
(l) E/One will not implement or agree to any implementation
of, or amendment or supplement to, any employee profit sharing, stock
option, stock purchase, pension, bonus, commission, incentive, retirement,
medical reimbursement, life insurance, deferred compensation, severance
pay, or any other employee benefit plan or arrangement (except for an
amendment to the Deferred Compensation Plan approved by PCC);
(m) E/One will not change its accounting methods, policies
or practices and will maintain its books and records in accordance with
GAAP;
(n) When the consent of any third party to the transactions
contemplated by this Agreement is required under the terms of any Contract
to which E/One is a party
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or by which it is bound, E/One will use its best efforts to obtain such
consent on terms and conditions not materially less favorable than those
in effect on the execution date of this Agreement;
(o) E/One will not transfer any shares of treasury stock or
authorized and unissued stock to E/One's Deferred Compensation Plan trust
on account of bonus amounts deferred under the Deferred Compensation Plan
relating to calendar year 1997.
(p) E/One will pay and discharge all taxes, assessments,
governmental charges, and levies imposed upon it, its income or
profits, or upon any property belonging to it, in all cases before the
date on which penalties attach thereto; and
(q) E/One will not amend its Articles of Incorporation or
Bylaws.
6.2 NO SOLICITATION.
6.2.1 E/One and its officers, directors, employees,
representatives, and agents will immediately cease any discussions or
negotiations with any parties that may be ongoing with respect to a Takeover
Proposal (as defined below). Unless this Agreement has been terminated in
accordance with its terms, and provided that neither PCC nor Sub is in
material violation of this Agreement, E/One will not authorize or permit any
of its officers, directors, or employees or any investment banker, financial
advisor, attorney, accountant, or other representative retained by it to
(i) solicit, initiate, or encourage (including by way of furnishing
non-public information about E/One), or take any other action to facilitate,
any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Takeover Proposal or (ii) participate
in any discussions or negotiations regarding any Takeover Proposal; PROVIDED,
HOWEVER, that, if at any time before the Effective Time, the Board of
Directors of E/One determines in good faith, after consultation with counsel,
that it is necessary to do so in order to comply with its fiduciary duties to
E/One's stockholders under applicable law, E/One may, in response to an
unsolicited Takeover Proposal, and subject to compliance with Section 6.2.3,
(x) furnish information with respect to E/One to any Person pursuant to a
confidentiality agreement in substantially the same form entered into between
E/One and PCC and (y) participate in discussions and negotiations regarding
such Takeover Proposal. Without limiting the foregoing, it is understood
that any violation of the restrictions set forth in the preceding sentence by
any director or executive officer of E/One or any investment banker,
financial advisor, attorney, accountant, or other representative of E/One
will be deemed to be a breach of this Section 6.2.1 by E/One. For purposes
of this Agreement, Takeover Proposal means any inquiry, proposal, or offer
from any Person relating to any direct or indirect acquisition or purchase of
a substantial amount of assets of E/One or of over 20 percent of any class of
equity securities of E/One, any tender offer or exchange offer that if
consummated would result in any Person beneficially owning 20 percent or more
of any class of equity securities of E/One, any merger, consolidation,
business combination, sale of substantially all the assets, recapitalization,
liquidation, dissolution or similar transaction involving E/One, other than
the transactions
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contemplated by this Agreement, or any other transaction the consummation of
which could reasonably be expected to impede, interfere with, prevent, or
materially delay the Offer or the Merger or that could reasonably be expected
to dilute materially the benefits to PCC of the transactions contemplated by
this Agreement.
6.2.2 Except as set forth in this Section 6.2.2, and unless this
Agreement has been terminated in accordance with its terms, and provided that
neither PCC nor Sub is in material violation of this Agreement, neither the
Board of Directors of E/One nor any committee thereof will (i) withdraw or
modify, or propose to withdraw or modify, in a manner adverse to PCC, the
approval or recommendation by such Board of Directors or such committee of
this Agreement, the Offer or the Merger; (ii) approve or recommend, or
propose to approve or recommend, any Takeover Proposal; or (iii) cause E/One
to enter into any agreement with respect to any Takeover Proposal.
Notwithstanding the foregoing, in the event that before the Effective Time
the Board of Directors of E/One determines in good faith, after consultation
with counsel, that it is necessary to do so in order to comply with its
fiduciary duties to E/One's stockholders under applicable law, the Board of
Directors of E/One may withdraw or modify its approval or recommendation of
this Agreement, the Offer or the Merger, approve or recommend a Superior
Proposal (as defined below), or cause E/One to enter into an agreement with
respect to a Superior Proposal, but in each case only at a time that is after
the second business day following PCC's receipt of written notice (a Notice
of Superior Proposal) advising PCC that the Board of Directors of E/One has
received a Superior Proposal, specifying the material terms and conditions of
such Superior Proposal and identifying the Person making such Superior
Proposal and that E/One has elected to terminate this Agreement pursuant to
Section 6.2.2 of this Agreement. In addition, if E/One therefter proposes to
enter into an agreement with respect to any Takeover Proposal, it will within
10 days after agreeing to the Takeover Proposal, pay, or cause to be paid, to
PCC the Termination Fee (as such terms are defined in this Agreement)
pursuant to and to the extent required in Section 8.5.3 of this Agreement.
For purposes of this Agreement, a Superior Proposal means any bona fide
Takeover Proposal to acquire, directly or indirectly, for consideration
consisting of cash and/or securities, more than 50 percent of the shares of
E/One Common Stock then outstanding or all or substantially all the assets of
E/One and otherwise on terms which the Board of Directors of E/One determines
in its good faith judgment (after consultation with The Nassau Group, Inc. or
another financial advisor of nationally recognized reputation) to be more
favorable to E/One's stockholders than the Offer and the Merger.
6.2.3 In addition to the obligations of E/One set forth in
Sections 6.2.1 and 6.2.2, E/One will within 48 hours but before responding to
the request for information or Takeover Proposal, advise PCC orally and in
writing of any request for information or of any Takeover Proposal, or any
inquiry with respect to or that could lead to any Takeover Proposal, the
material terms and conditions of such request, Takeover Proposal, or inquiry
and the identity of the Person making such request, Takeover Proposal, or
inquiry. E/One will keep PCC fully informed of the status and details
(including amendments or proposed amendments) of any such request, Takeover
Proposal or inquiry, subject to any requirements necessary to comply with its
fiduciary duties to E/One Stockholders under applicable law.
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6.2.4 Nothing contained in Section 6.2 will prohibit E/One from
making any disclosure to E/One's stockholders if, in the opinion of the Board
of Directors of E/One, after consultation with counsel, failure so to
disclose would be inconsistent with its fiduciary duties to E/One's
stockholders under applicable law; PROVIDED, HOWEVER, neither E/One nor its
Board of Directors nor any committee thereof will (except as permitted by
Section 6.2.2), withdraw or modify, or propose to withdraw or modify, its
position with respect to the Offer or the Merger or approve or recommend, or
propose to approve or recommend, a Takeover Proposal.
6.3 ACCESS. For the period up to and including the Closing Date,
E/One will provide, and cause each E/One Entity other than E/One to provide,
to PCC and its authorized agents reasonable access to all of each E/One
Entity's physical assets, facilities, financial information, production
records, contracts and other corporate records and documents as PCC deems
reasonably necessary, provided that such activities do not unreasonably
interfere with or hinder the business or operation of E/One. PCC will have
reasonable access during normal working hours to all E/One Entity's premises,
properties, and facilities and will be allowed to meet with each E/One
Entity's management personnel, employees, and any outside consultants of the
E/One Entities, including without limitation auditors and accountants,
investment and other bankers, tax and financial advisors, and environmental
consultants. In addition, E/One will exercise its best efforts to make
available to PCC any items and materials reasonably requested by PCC.
However, no investigation by PCC or any of its authorized representatives
before or after the date of this Agreement will effect any representation,
warranty, or closing condition of any party to this Agreement.
6.4 HART SCOTT RODINO. Each of E/One and PCC will within five days
after executing this Agreement prepare and file with the Federal Trade
Commission (the FTC) and the Department of Justice (the DOJ) the
premerger notification form required under the Hart Scott Rodino Antitrust
Improvements Act (the HSR Act) and a request for early termination of the
waiting period. The parties will further (i) discuss with each other any
comments the reviewing party may have; (ii) cooperate with each other in
connection with such filings, which cooperation will include, but not be
limited to, furnishing the other with such information or documents as may be
reasonably required in connection with such filings; (iii) promptly file
after any request by the FTC or the DOJ any appropriate information or
documents so requested by the FTC or the DOJ; and (iv) notify each other of
any other communications with the FTC or the DOJ that relate to the
transactions contemplated by this Agreement and, to the extent appropriate,
permit the other to participate in any conferences with the FTC or the DOJ.
The parties will use best efforts to accelerate and obtain HSR Act clearance.
Each of E/One and PCC will pay its own expenses in connection with the
preparation of the premerger notification form.
6.5 OTHER GOVERNMENT CONSENTS. Promptly following the execution of
this Agreement, the parties will proceed to prepare and file with the
appropriate Governmental Entities any requests for approval or waiver (in
addition to those specifically described above), if any, that are required
from Governmental Entities in connection with the transactions contemplated
by this Agreement, and the parties will diligently and expeditiously
prosecute and cooperate fully in the
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prosecution of such requests for approval or waiver and all proceedings
necessary to secure such approvals and waivers.
6.6 BEST EFFORTS; NO INCONSISTENT ACTION. Subject to the terms and
conditions hereof, and to the fiduciary duties of the E/One Board under
applicable law as advised by counsel, each party will use its best efforts to
effect the transactions contemplated by this Agreement and to fulfill the
conditions to the obligations of the opposing parties set forth in Article 7
of this Agreement. No party will take any action inconsistent with its
obligations under this Agreement or that could hinder or delay the
consummation of the transactions contemplated by this Agreement without legal
authority or basis, except that nothing in this Section 6.6 will limit the
rights of the parties under Article 7 of this Agreement.
6.7 CHANGED CIRCUMSTANCES. Each of E/One and PCC will notify the
other party promptly of any fact or occurrence between the date of this
Agreement and the Closing Date of which it becomes aware which makes any of
its representations contained in this Agreement untrue or causes any breach
of its obligations under this Agreement.
6.8 FEES AND EXPENSES.
All fees and expenses incurred in connection with the Offer and
Merger, this Agreement, and the transactions contemplated by this Agreement
will be paid by the party incurring such fees or expenses, whether or not the
Offer or the Merger is consummated.
6.9 PRESS RELEASES. No press releases or other public announcements
or disclosure of information to any third party concerning the transactions
contemplated by this Agreement may be made by any of the parties without the
prior written consent of each of the other parties, which consent will not be
unreasonably withheld; PROVIDED, HOWEVER, that nothing in this provision will
prevent a party from making such releases or announcements as are necessary
for a party to satisfy its legal obligations or the requirements of the New
York Stock Exchange or NASDAQ NMS, but in any such case the affected party
will promptly notify the other parties.
ARTICLE 7
CONDITIONS TO THE PARTIES' OBLIGATIONS
TO CONSUMMATE THE MERGER
The obligations of each party to consummate the Merger are subject to
the following conditions, any of which may be waived by PCC, Sub and E/One:
7.1 GOVERNMENTAL AUTHORIZATIONS. Each of the parties will have
obtained all authorizations, consents, and approvals of all governmental
agencies and authorities required to be obtained in order to permit
consummation of the transactions contemplated by this Agreement,
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in a form satisfactory to each of E/One, Sub, and PCC in its reasonable
discretion, and the waiting period under the HSR Act will have expired or
been terminated early.
7.2 E/ONE STOCKHOLDER APPROVAL. If necessary to approve the Merger
under applicable law, the Agreement and the Merger shall have been duly
adopted and approved, at a duly called and held Stockholders' Meeting, acting
in accordance with applicable provisions of NYBCL including but not limited
to Section 903 and the Articles of Incorporation and Bylaws of E/One, by a
vote of the holders of at least 66 2/3 percent of the issued and outstanding
Shares of E/One Common Stock (Stockholder Approval).
7.3 NO PROHIBITIONS. There has not been promulgated or issued a law,
statute, rule, regulation, decree, order, injunction or ruling by any
Governmental Entity that remains in effect and prohibits, restrains, enjoins
or restricts the consummation of the Merger.
7.4 NO SUITS. No action, suit or other proceeding is pending against
any party to this Agreement to prohibit, restrain, enjoin, restrict or
otherwise prevent the consummation of the transactions contemplated by this
Agreement.
7.5 OFFER. Sub or its permitted assignee shall have purchased all
Shares validly tendered and not withdrawn pursuant to the Offer; PROVIDED,
HOWEVER, that neither PCC nor Sub shall be entitled to assert the failure of
this condition if, in breach of this Agreement or the terms of the Offer, Sub
fails to purchase any Shares validly tendered and not withdrawn pursuant to
the Offer.
ARTICLE 8
TERMINATION
8.1 TERMINATION BY PCC AND/OR E/ONE. This Agreement may be
terminated without further liability at any time before the Closing Date:
8.1.1 MUTUAL CONSENT. By mutual consent of PCC, Sub, and E/One; or
8.1.2 INJUNCTION OR RESTRAINT. By either PCC or E/One, if any
Governmental Entity has promulgated or issued a law, statute, rule,
regulation, decree, order, injunction, or ruling or taken any other action
prohibiting, restraining, enjoining, restricting or otherwise prohibiting the
Offer or the Merger, that has become final and nonappealable, or if clearance
under the HSR Act is not received within sixty (60) days after the filing of
the premerger notification and report form.
8.1.3 FAILURE OF OFFER. By PCC or E/One if the Offer is
terminated or expires in accordance with its terms as the result of the
failure of any of the Offer Conditions without Sub having purchased any
Shares pursuant to the Offer; PROVIDED, HOWEVER, that the right to terminate
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under this Section 8.1.3 is not available to any party whose failure to
perform any of its covenants or agreements under this Agreement results in
the failure of any condition.
8.2 TERMINATION BY PCC. PCC, if not then in default, may terminate
this Agreement at any time before the Closing Date upon written notice to
E/One of the occurrence of any of the following:
8.2.1 BREACH BY E/ONE. A breach by E/One of one or more of its
representations or warranties or a default in the observance or performance
of one or more of its covenants or agreements under this Agreement, which
breach or default is not cured within ten (10) days after E/One has notice
thereof, except for breaches and defaults which, individually or in the
aggregate, would not have a Combined Material Adverse Effect or materially
impair the ability of the parties to consummate the transactions contemplated
by the Agreement.
8.2.2 WITHDRAWAL OF E/ONE BOARD APPROVAL. If (i) the Board of
Directors of E/One or any committee thereof has withdrawn or modified in a
manner adverse to PCC or Sub its approval or recommendation of the Offer or
this Agreement, or approved or recommended any Takeover Proposal, or (ii)
E/One has entered into a definitive agreement with respect to any Superior
Proposal in accordance with Section 6.2.2 of this Agreement.
8.3 TERMINATION BY E/ONE. E/One, if not then in default, may
terminate this Agreement at any time before the Closing Date upon written
notice to PCC of the occurrence of any of the following:
8.3.1 BREACH BY PCC OR SUB. A breach by PCC or Sub of one or
more of its representations or warranties or a default in the observance or
performance of one or more of its covenants or agreements under this
Agreement, which breach or default is not cured within ten (10) days after
PCC and Sub have notice thereof, except for breaches and defaults which,
individually or in the aggregate, would not have a Combined Material Adverse
Effect or materially impair the ability of the parties to consummate the
transactions contemplated by the Agreement.
8.3.2 LEGAL REQUIREMENTS OF DIRECTORS. If E/One determines in
accordance with Section 6.2.2 after consultation with legal counsel that it
is necessary to terminate the Merger or the Agreement in order for its
directors to comply with their fiduciary duties under applicable law PROVIDED
it has complied with the notice provisions and other requirements set forth
in Section 6.22 of this Agreement, including the notice provisions and
payment provisions thereof.
8.4 PROCEDURE; EFFECT OF TERMINATION. If either PCC or E/One elects
to terminate this Agreement pursuant to this Article 8, the terminating party
will promptly give written notice thereof to the other party. In the event
of termination pursuant to this Article 8, the parties will be released from
all liabilities and obligations under this Agreement, other than the
obligations under Section 6.8 and Section 8.5 and except that nothing herein
shall relieve any party from
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liability for damages to the extent arising from a breach of this Agreement
before termination. The Confidentiality Agreement dated November 25, 1997
between E/One and PCC (the Confidentiality Agreement) is and will remain
until the Effective Time in full force and effect and will survive any
termination of this Agreement.
8.5 BREAK-UP FEES.
8.5.1 WRONGFUL TERMINATION BY PCC. In the event that the Offer
is not consummated due to PCC's termination of this Agreement in breach of
this Agreement, then PCC shall pay, or cause to be paid, to E/One an amount
equal to Two Million Dollars ($2.0 million) in cash.
8.5.2 WRONGFUL TERMINATION BY E/ONE. In the event that the Offer
is not consummated due to E/One's termination of this Agreement in breach of
this Agreement, then E/One shall pay, or cause to be paid, to PCC an amount
equal to Two Million Dollars ($2.0 million) in cash.
8.5.3 TAKEOVER PROPOSAL. In the event that E/One determines
after consultation with legal counsel that it is necessary to terminate the
Agreement in order for its directors to comply with their fiduciary duties
under applicable Legal Requirements (such Legal Requirements shall be
defined as any applicable state law in effect) pursuant to Section 6.2.2 and
8.3.2 of this Agreement and E/One agrees to a Takeover Proposal within 270
days of the date of termination of this Agreement, or agrees to a Superior
Proposal within one year of the date of termination of this Agreement, then
E/One shall pay or cause to be paid to PCC an amount equal to Three Million
Dollars ($3.0 million) in cash (the Termination Fee).
8.5.4 FAILURE OF CONDITION. Neither PCC nor E/One shall be
treated as terminating this Agreement in breach of this Agreement if the
terminating party determines in good faith that a condition of its
obligations under this Agreement has not been met, and such failed condition
is not within the terminating party's control.
8.5.5 FEE DUE; EXCLUSIVE REMEDY. Any break-up fee pursuant to this
Section 8.5 is due and payable within 10 days of the date of termination.
Receipt of the break-up fee is the exclusive remedy of the recipient.
ARTICLE 9
GENERAL PROVISIONS
9.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The
Agreements in Article 2 and Article 9 shall survive the Effective Time. The
remainder of the representations, warranties, and agreement in this Agreement
or in any instrument delivered pursuant to this Agreement will not survive
the Effective Time, and shall terminate at the Effective Time or upon
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termination of this Agreement pursuant to Section 8.1. This Section 9.1 will
not limit any covenant or agreement of the parties that by its terms provides
for performance after the Effective Time of the Merger.
9.2 FURTHER ACTION. E/One, Sub, and PCC will execute any documents
and take any additional action reasonably required to fully implement this
Agreement.
9.3 ENTIRE AGREEMENT. This Agreement and the Confidentiality
Agreement contain the entire agreement and understanding among E/One, Sub,
and PCC regarding the subject matter hereof and thereof and supersede and
replace all prior or contemporaneous negotiations, representations, or
agreements, written or oral.
9.4 ASSIGNMENT. This Agreement may not be assigned by any party by
operation of law or otherwise without the prior written consent of each of
E/One and PCC, except that PCC and Sub may assign all or any of their rights
and obligations to any wholly-owned subsidiary of PCC; PROVIDED, HOWEVER,
that no such assignment shall relieve the assigning party of its obligations
hereunder if the assignee does not perform the obligations.
9.5 BINDING EFFECT; NO THIRD PARTY BENEFIT. This Agreement will
inure to the benefit of and be binding upon each of the parties and their
respective successors and assigns, subject to the restrictions on assignment
contained in Section 9.4. Nothing express or implied in this Agreement is
intended or will be construed to confer upon or give to any Person other than
the parties to this Agreement any rights or remedies under or by reason of
this Agreement or any transaction contemplated by it.
9.6 WAIVER. Failure of any party at any time to require performance
of any provision of this Agreement will not limit such party's right to
enforce such provision, nor will any waiver of any breach of any provision of
this Agreement constitute a waiver of any succeeding breach of such provision
or a waiver of such provision itself. Any waiver of any provision of this
Agreement will be effective only if set forth in writing and signed by the
party to be bound.
9.7 GOVERNING LAW. This Agreement will be governed and construed in
accordance with the laws of the State of New York.
9.8 SEVERABILITY. If any term or provision of this Agreement or the
application thereof to any Person or circumstance is to any extent held to be
invalid or unenforceable, the remainder of this Agreement and the application
of such term or provision to Persons or circumstances other than those as to
which it is held invalid or unenforceable will not be affected thereby, and
each term or provision of this Agreement will be valid and enforceable to the
fullest extent permitted by law.
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9.9 TIME OF ESSENCE. E/One, Sub, and PCC hereby acknowledge and
agree that time is strictly of the essence with respect to each and every
term, condition, obligation, and provision of this Agreement.
9.10 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which will be deemed an original, but all of which taken together
will constitute one and the same instrument, binding on the parties. If this
Agreement is executed in counterparts, each party will transmit by facsimile
a copy of the signed counterpart upon execution and will cause an executed
original counterpart to be transmitted by courier service to the other
parties.
9.11 AMENDMENTS. This Agreement may not be modified or amended except
by the written agreement of E/One, Sub, and PCC. This Agreement may not be
terminated other than pursuant to Article 8 except by the written agreement
of E/One, Sub, and PCC. A party may waive one or more of its rights under
this Agreement only in a written instrument signed by the party.
9.12 AUTHORITY. The person executing this Agreement on behalf of each
party warrants that she/he has the authority to execute this Agreement and to
so bind that party as provided in this Agreement.
9.13 STANDSTILL. In the event that PCC does not make the Offer
pursuant to this Agreement or if the Offer is not successful other than in
circumstances involving breach by E/One of this Agreement, PCC and its
affiliates shall not directly or indirectly, for a period of eighteen (18)
months from the date of this Agreement, unless the E/One's Board of Directors
approves such action in writing in advance, (i) acquire or offer to acquire,
seek, propose or agree to acquire, by means of a purchase, agreement,
business combination or in any other matter, beneficial ownership of any
securities or assets of E/One, including rights or options to acquire such
ownership, (ii) seek or propose to influence, change or control the
management or Board of Directors of E/One, or (iii) make any public
disclosure or announcement or submit a proposal for a transaction not in the
ordinary course of business, or take any action which could require the other
party to make any public disclosure, with respect to the matters set forth in
this Letter or in any way participate directly or indirectly in any
solicitation of proxies (as such term is defined in Rule 14a-1 under the
Exchange Act) to vote, or influence any person or entity with respect to the
voting of, any voting securities of E/One, provided that this Section shall
not apply in the event that E/One receives a Takeover Proposal from a party
that is not affiliated with PCC.
9.14 NOTICES. All notices or other communications required or
permitted under this Agreement must be in writing and must be personally
delivered, sent by registered or certified mail, postage prepaid, return
receipt requested, or sent by facsimile. Any notice, if mailed, will be
deemed given when received; any notice, if transmitted by facsimile, will be
deemed given when transmitted and electronically confirmed. Notices will be
given to the following Persons:
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To PCC: Precision Castparts Corp.
4650 SW Macadam Avenue, Suite 440
Portland, OR 97201-4254
Attention: William D. Larsson
Telephone: (503) 417-4810
Facsimile No.: (503) 417-4817
With a copy to: Stoel Rives LLP
900 SW Fifth Avenue, Suite 2300
Portland, OR 97204
Attention: Ruth A. Beyer
Telephone: (503) 294-9332
Facsimile No.: (503) 220-2480
To E/One: Environment One Corporation
2773 Balltown Road
Niskayuna, NY 12309-1090
Attention: Stephen V. Ardia
Telephone: (518) 346-6188
Facsimile No.: (518) 346-6815
With a copy to: Bond, Shoeneck & King
One Lincoln Center
Syracuse, NY 13202
Attention: George J. Getman
Telephone: (315) 422-0121
Facsimile No.: (315) 422-3598
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ARTICLE 10
DEFINITIONS
The following terms are defined in this Agreement in the sections
identified below:
<TABLE>
<CAPTION>
Term Definition Section
---- ------------------
<S> <C> <C>
Agreement Preamble
Certificate of Merger 2.4
Certificates 3.2.2
Closing and Closing Date 2.8
Code 4.14.1
Confidentiality Agreement 8.4
Contamination 4.13.1
Contracts 4.8
Copyrights 4.20
Deferred Compensation Plan 4.23
Disclosure Schedule Introduction to Article 4
Dissenting Shareholders 3.1.5
DOJ 6.4
E/One Preamble
E/One Board Recitals
E/One Returns 4.14.1
E/One SEC Document 4.5
E/One Stock Plans 4.3
Effective Time 2.4
Environmental Law 4.13.1
ERISA 4.16
ERISA Plans 4.16
Exchange Act 1.1.1, 1.2.2, 4.5
Expiration Date 1.1.1
FTC 6.4
Governmental Entity 4.2, 5.3
Hazardous Substance 4.13.1
HSR Act 6.4
Information Statement 4.6
Intellectual Property Assets 4.20
IRS 4.16
Leases 4.10
Legal Requirements 8.5.3
Licenses 4.12
Marks 4.20
38
<PAGE>
<CAPTION>
Term Definition Section
---- ------------------
<S> <C> <C>
Material Adverse Change Introduction to Article 4
Material Adverse Effect Introduction to Article 4
Material Properties and Assets 4.9
Merger Recitals
Merger Consideration 3.1.1
Minimum Condition 1.1.4
NOL 4.14.3
NYBCL Recitals
Notice of Superior Proposal 6.2.2
Offer Recitals
Offer Conditions 1.1.1, 1.1.4
Offer Documents 1.1.3
Offer Price 1.1.1
Patents 4.20
Paying Agent 3.2.1
Person 3.2.4
Plans 3.3
Policies 4.19
PCC Preamble
PCC Parties Preamble
Proxy Statement 2.2.2
Schedule 14D-1 1.1.3
Schedule 14D-9 1.2.2
SEC 4.5
Securities Act 4.5
Share, Shares Recitals
Stockholder Approval 2.2.1, 7.2
Stockholders' Meeting 2.2.1
Sub Preamble
Superior Proposal 6.2.2
Surviving Corporation 2.5
Taxes 4.14.4
Takeover Proposal 6.2.1
Tender Offer Acceptance Date 3.3
Tendered Shares 1.1.4
Termination Fee 8.5.3
</TABLE>
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IN WITNESS WHEREOF, the parties have executed this Agreement, effective
the day and year first written above.
PRECISION CASTPARTS CORP. ENVIRONMENT ONE CORPORATION
By: By:
------------------------------ ---------------------------------
(Signature) (Signature)
Name: Name:
Title: Title:
EOC ACQUISITION CORPORATION
By:
------------------------------
(Signature)
Name:
Title:
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ANNEX A
OFFER CONDITIONS
1. DEFINED TERMS. Unless otherwise defined in this Annex A,
capitalized terms that appear in this Annex A to the Agreement and Plan of
Merger among Precision Castparts Corp., Environment One Corporation and EOC
Acquisition Corporation have the meanings assigned in the Agreement.
2. OFFER CONDITIONS. Notwithstanding any other provision of the
Offer, Sub shall not be required to accept for payment or pay for any Shares
tendered pursuant to the Offer unless (i) the Minimum Condition shall have
been satisfied and (ii) any applicable waiting period under the HSR Act shall
have expired or been terminated. Furthermore, Sub may terminate or amend the
Offer and may postpone the acceptance for payment of and payment for Shares
tendered, if at any time on or after the date of this Agreement, and prior to
the acceptance for payment of Shares, any of the following conditions shall
exist:
(a) there shall have been issued and shall remain in effect any
injunction, order or decree by any court or governmental, administrative or
regulatory authority or agency, domestic or foreign, which (i) restrains or
prohibits the making of the Offer or the consummation of the Merger, (ii)
prohibits or limits ownership or operation by E/One, PCC or Sub of all or any
material portion of the business or assets of E/One, or PCC and its
subsidiaries, taken as a whole, or compels E/One, PCC or any of its
subsidiaries to dispose of or hold separate all or any material portion of
the business or assets of E/One or PCC and its subsidiaries, taken as a
whole, in each case as a result of the Offer or the Merger; (iii) imposes
material limitations on the ability of PCC or Sub to exercise effectively
full rights of ownership of any Shares, including, without limitation, the
right to vote any Shares acquired by Sub pursuant to the Offer, or otherwise
on all matters properly presented to E/One's stockholders, including, without
limitation, the approval and adoption of this Agreement and the Offer and the
Merger; or (iv) requires divestiture by PCC or Sub of any material portion of
the Shares;
(b) there shall have been any action taken, or any statute,
rule, regulation order or injunction enacted, entered, enforced, promulgated,
amended, issued or deemed applicable to (i) PCC, E/One or any subsidiary or
affiliate of PCC or (ii) any action, by any legislative body, court,
government or governmental, administrative or regulatory authority or agency,
domestic or foreign (other than, in the case of both (i) and (ii), the
application of the waiting period provisions of the HSR Act to the Offer or
the Merger), which results in any of the consequences referred to in clauses
(i) through (iv) of paragraph (a) above;
(c) there shall have occurred and be continuing (i) a 25
percent or greater decline in the Dow Jones Average of Industrial Stocks and
the Standard and Poor's 500 Index, measured from the date of the Agreement,
(ii) any general suspension of trading in, or limitation on prices for,
securities on the New York Stock Exchange or in the over-the-counter market,
(iii)
ANNEX A - Page 1
<PAGE>
a declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States, (iv) any limitation (whether or not
mandatory) by any governmental authority on the general extension of credit
by banks or other financial institutions, or (v) in the case of any of the
foregoing existing at the time of the commencement of the Offer, in the
reasonable judgment of PCC, a material worsening thereof;
(d) the E/One Board of Directors or any committee thereof shall
have withdrawn or modified in a manner adverse to PCC or Sub its approval or
recommendation of the Offer, the Merger or the Agreement or shall have
approved or recommended another merger, consolidation, business combination
with, or acquisition of E/One or all or substantially all its assets or
another tender offer or exchange offer for Shares, or shall have resolved to
do any of the foregoing;
(e) E/One shall have failed to perform any of its covenants in
this Agreement, which failure either individually or in the aggregate would
have a Combined Material Adverse Effect;
(f) the representations and warranties of E/One shall fail to
be true and correct in all material respects on and as of the date made or,
except as otherwise expressly contemplated hereby, on and as of any
subsequent date as if made at and as of such subsequent date, which failure
either individually or in the aggregate would have a Combined Material
Adverse Effect;
(g) this Agreement shall have been terminated in accordance with
its terms;
(h) Sub and E/One shall have agreed that Sub shall terminate
the Offer or postpone the acceptance for payment of or payment for Shares
thereunder; or
(i) since December 31, 1997, except as (i) expressly
contemplated by the Agreement, (ii) disclosed any E/One SEC Report filed
since such date and prior to the date of the Agreement or (iii) set forth in
the Disclosure Schedule to the Agreement, there shall have occurred any event
having, individually or in the aggregate, a change or effect that is
materially adverse to the business, operations, properties, financial
condition, assets or liabilities (including, without limitation, contingent
liabilities) of E/One.
The foregoing conditions are for the sole benefit of Sub and PCC and
may be asserted by Sub or PCC regardless of the circumstances giving rise to
any such condition or may be waived by Sub or PCC in whole or in part at any
time and from time to time in its sole discretion. The failure by PCC or Sub
at any time to exercise any of the foregoing rights shall not be deemed a
waiver of any such right; the waiver of any such right with respect to
particular facts and other circumstances shall not be deemed a waiver with
respect to any other facts and circumstances; and each such right shall be
deemed an ongoing right that may be asserted at any time and from time to
time.
ANNEX A - Page 2
<PAGE>
STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT dated as of February 24, 1998 among PRECISION
CASTPARTS CORP., an Oregon corporation ("PCC"), EOC ACQUISITION CORPORATION, a
New York corporation and a direct or indirect wholly owned subsidiary of PCC
("Sub"), and the other parties identified on SCHEDULE A hereto (each, a
"Stockholder").
WHEREAS, each Stockholder desires that Environment One Corporation, a New
York corporation (the "Company"), PCC and Sub enter into an Agreement and Plan
of Merger dated as of the date hereof (as the same may be amended or
supplemented, the "Merger Agreement") with respect to the merger of Sub with and
into the Company (the "Merger"); and
WHEREAS, each Stockholder is executing this Agreement as an inducement to
PCC and Sub to enter into and execute the Merger Agreement.
NOW, THEREFORE, in consideration of the execution and delivery by PCC and
Sub of the Merger Agreement and the mutual covenants, conditions and agreements
contained herein and therein, the parties agree as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES. Each Stockholder severally,
and not jointly, represents and warrants to PCC and Sub as follows:
(a) Such Stockholder is the record or beneficial owner of, or has the
power to dispose, the number of shares of Common Stock of the Company (the
"Company Common Stock"), and holds options for shares of Company Common Stock,
each as set forth opposite such Stockholder's name in SCHEDULE A hereto (as may
be adjusted from time to time pursuant to Section 4, such Stockholder's
"Shares"). Except for such Stockholder's Shares, such Stockholder is not the
record or beneficial owner of any shares of Company Common Stock. Any of such
Shares which are described on SCHEDULE A as option shares shall be deemed
"Option Shares" for the purposes of this Agreement. All other shares shall be
deemed "Owned Shares." Any Option Shares which are exercised prior to the
termination of this Agreement shall be deemed to be "Owned Shares."
(b) This Agreement has been executed and delivered by such Stockholder and
constitutes the legal, valid and binding obligation of such Stockholder,
enforceable against such Stockholder in accordance with its terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors' rights
generally, and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies. To the best of
Stockholder's knowledge, neither the execution and delivery of this Agreement
nor the consummation by such Stockholder of the transactions contemplated hereby
will result in a
<PAGE>
violation of, or a default under, or conflict with, any contract, trust,
commitment, agreement, understanding, arrangement or restriction of any kind to
which such Stockholder is a party or bound or to which such Stockholder's Shares
are subject.
(c) Such Stockholder's Owned Shares and the certificates representing such
Owned Shares are now and at all times during the term hereof will be held by
such Stockholder, or by a nominee or custodian for the benefit of such
Stockholder, free and clear of all liens, claims, security interests, proxies,
voting trusts or agreements, understandings or arrangements or any other
encumbrances whatsoever, except for any such encumbrances arising hereunder.
(d) Such Stockholder understands and acknowledges that PCC is entering
into, and causing Sub to enter into, the Merger Agreement in reliance upon such
Stockholder's execution and delivery of this Agreement.
SECTION 2. PURCHASE AND SALE OF SHARES. So long as the Offer Price in the
Offer for all Shares is not less than $15.25 in cash (net to the seller), each
Stockholder hereby severally agrees that he will tender or cause to be tendered
his Shares into the Offer prior to the expiration of the Offer and that he will
not withdraw any Shares so tendered (it being understood that the obligation
contained in this sentence is unconditional). In addition, each Stockholder
hereby severally agrees to sell to Sub, and Sub hereby agrees to purchase, all
such Stockholder's Owned Shares at a price per Share equal to the Offer Price,
provided that such obligations to purchase and sell are both subject to (i) Sub
having accepted Shares for payment under the Offer and the Minimum Condition (as
defined in the Merger Agreement) having been satisfied, and (ii) the expiration
or termination of any applicable waiting period under the HSR Act.
SECTION 3. COVENANTS. Each Stockholder severally, and not jointly, agrees
with, and covenants to, PCC and Sub as follows: such Stockholder shall not,
except as contemplated by the terms of this Agreement, during the term of this
Agreement, (i) transfer (which term shall include, without limitation, for the
purposes of this Agreement, any sale, gift, pledge or other disposition), or
consent to any transfer of, any or all of such Stockholder's Shares or any
interest therein, (ii) enter into any contract, option or other agreement or
understanding with respect to any transfer of any or all of such Shares or any
interest therein, (iii) grant any proxy, power-of-attorney or other
authorization or consent in or with respect to such Shares other than in
connection with a meeting to approve the Merger or the annual meeting of
Stockholders of the Company, (iv) deposit such Shares into a voting trust or
enter into a voting agreement or arrangement with respect to such Shares, or (v)
take any other action that would in any way restrict, limit or interfere with
the performance of its obligations hereunder or the transactions contemplated
hereby; provided that each Stockholder shall be entitled to transfer all or any
portion of such Shareholder's Shares to any person or entity which agrees in
writing to be bound by the provisions of this Agreement.
2
<PAGE>
SECTION 4. CERTAIN EVENTS. Each Stockholder agrees that this Agreement
and the obligations hereunder shall attach to such Stockholder's Shares and
shall be binding upon any person or entity to which legal or beneficial
ownership of such Shares shall pass, whether by operation of law or otherwise,
including without limitation such Stockholder's heirs, guardians, administrators
or successors. In the event of any stock split, stock dividend, merger,
reorganization, recapitalization or other change in the capital structure of the
Company affecting the Company Common Stock, or the acquisition of additional
shares of Company Common Stock or other securities or rights of the Company by
any Stockholder, the number of Owned Shares and Option Shares listed on SCHEDULE
A beside the name of such Stockholder shall be adjusted appropriately and this
Agreement and the obligations hereunder shall attach to any additional shares of
Company Common Stock or other securities or rights of the Company issued to or
acquired by such Stockholder.
SECTION 5. TRANSFER. Each Stockholder agrees with and covenants to PCC
that such Stockholder shall not request that the Company register the transfer
(booked as entry or otherwise) of any certificated or uncertificated interest
representing any of the securities of the Company, unless such transfer is made
in compliance with this Agreement.
SECTION 6. VOIDABILITY. If prior to the execution hereof, the Board of
Directors of the Company shall not have duly and validly authorized and approved
by all necessary corporate action the acquisition of Company Common Stock by PCC
and Sub and other transactions contemplated by this Agreement and the Merger
Agreement, so that by the execution and delivery hereof PCC or Sub would become,
or could reasonably be expected to become, an "interested stockholder" with whom
the Company would be prevented for any period pursuant to Section 912 of the
NYBCL from engaging in any "business combination" (as such terms are defined in
Section 912 of the NYBCL), then this Agreement shall be void and unenforceable
until such time as such authorization and approval shall have been duly and
validly obtained.
SECTION 7. STOCKHOLDER CAPACITY. No person executing this Agreement who
is a director or officer of the Company makes any agreement or understanding
herein in his capacity as such director or officer. Each Stockholder signs
solely in his capacity as the record holder and beneficial owner of such
Stockholder's Shares and nothing herein shall limit or affect any actions taken
by a Stockholder in his capacity as an officer or director for the Company to
the extent specifically permitted by the Merger Agreement, including the
fiduciary duties of officers and directors in accordance with New York law.
SECTION 8. FURTHER ASSURANCES. Each Stockholder shall, upon request of
PCC or Sub, execute and deliver any additional documents and take such further
actions as may reasonably be deemed by PCC or Sub to be necessary or desirable
to carry out the provisions hereof.
SECTION 9. TERMINATION. This Agreement, and all rights and obligations of
the parties hereunder, shall terminate upon the earlier of (a) the date upon
which the Merger
3
<PAGE>
Agreement is terminated by the Company, PCC or Sub for any reason in accordance
with its terms, (b) the date that PCC or Sub shall have purchased and paid for
the Shares of each Stockholder pursuant to Section 2, or (c) May 30, 1998.
SECTION 10. MISCELLANEOUS.
(a) Capitalized terms used and not otherwise defined in this Agreement
shall have the respective meanings assigned to such terms in the Merger
Agreement.
(b) All notices, requests, claims, demands and other communications under
this Agreement shall be in writing and shall be deemed given if delivered
personally or sent by overnight courier (providing proof of delivery) to the
parties at the following addresses (or such other address for a party as shall
be specified by like notice): (i) if to PCC or Sub, to the address set forth in
Section 9.13 of the Merger Agreement, and (ii) if to a Stockholder, to the
address set forth on SCHEDULE A hereto, or such other address as may be
specified in writing by such Stockholder.
(c) The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
(d) This Agreement may be executed in two or more counterparts, all of
which shall be considered one and the same agreement, and shall become effective
(even without the signature of any other Stockholder) as to any Stockholder when
one or more counterparts have been signed by each of PCC, Sub and such
Stockholder and delivered to PCC, Sub and such Stockholder.
(e) This Agreement (including the documents and instruments referred to
herein) 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.
(f) This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York, regardless of the laws that might otherwise
govern under applicable principles of conflicts or laws thereof.
(g) Neither this Agreement nor any of the rights, interests or obligations
under this Agreement shall be assigned, in whole or in party, by operation of
law or otherwise, by any of the parties without the prior written consent of the
other parties, except by laws of descent. Any assignment in violation of the
foregoing shall be void.
(h) If any term, provision, covenant or restriction herein, or the
application thereof to any circumstance, shall, to any event, be held by a court
of competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions herein and the application
thereof to any other circumstances, shall remain in full
4
<PAGE>
force and effect, shall not in any way be affected, impaired or invalidated, and
shall be enforced to the fullest extent permitted by law.
(i) Each Stockholder agrees that irreparable damage would occur and that
PCC and Sub would not have any adequate remedy at law 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 PCC
and Sub shall be entitled to an injunction or injunctions to prevent breaches by
any Stockholder of this Agreement and to enforce specifically the terms and
provisions of this Agreement.
(j) No amendment, modification or waiver in respect of this Agreement
shall be effective against any party unless it shall be in writing and signed by
such party.
IN WITNESS WHEREOF, PCC, Sub and the Stockholders have caused this
Agreement to be duly executed and delivered as of the date first written above.
PRECISION CASTPARTS CORP.
By: /S/ WILLIAM E. LARSSON
-------------------------------------
Name: William E. Larsson
Title: Vice President & Chief Financial
Officer
EOC ACQUISITION CORPORATION
By: /S/ WILLIAM E. LARSSON
-------------------------------------
Name: William E. Larsson
Title: Vice President
5
<PAGE>
STOCKHOLDERS
/S/ WALTER W. AKER /S/ JOHN L. ALLEN
- ----------------------------------- -----------------------------------
Walter W. Aker John L. Allen
/S/ STEPHEN V. ARDIA /S/ ANGELLO DOUNOUCOS
- ----------------------------------- -----------------------------------
Stephen V. Ardia Angello Dounoucos
/S/ LARS G. GRENBACK /S/ ROBERT G. JAMES
- ----------------------------------- -----------------------------------
Lars G. Grenback Robert G. James
/S/ ROLF E. SODERSTROM /S/ MARK E. ALEXANDER
- ----------------------------------- -----------------------------------
Rolf E. Soderstrom Mark E. Alexander
/S/ DAVID M. DOIN /S/ BRIAN BUCHINSKI
- ----------------------------------- -----------------------------------
David M. Doin Brian Buchinski
/S/ GEORGE A. EARLE III /S/ KATHLEEN A. PARRY
- ----------------------------------- -----------------------------------
George A. Earle III Kathleen A. Parry
/S/ GEORGE A. VORSHEIM JR. /S/ PHILIP W. WELSH
- ----------------------------------- -----------------------------------
George A. Vorsheim Jr. Philip W. Welsh
6
<PAGE>
DEPOSITARY AGENT AGREEMENT
The Bank of New York
Reorganization Administration
101 Barclay Street - 12W
New York, NY 10296
Gentlemen:
EOC Acquisition Corporation, a New York corporation (the "Offeror"), a
wholly owned subsidiary of Precision Castparts Corp., an Oregon corporation
("PCC"), is offering to purchase all outstanding shares of common stock, par
value $0.10 per share (the "Shares") of Environment One Corporation, a New York
corporation (the "Company"), at $15.25 per Share, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Offer to Purchase
dated March 3, 1998 and the related Letter of Transmittal, copies of which are
attached hereto as Exhibits A and B, respectively, and which together, as they
may be supplemented or amended from time to time, constitute the "Offer."
The Offeror hereby appoints The Bank of New York to act as Depositary in
connection with the Offer. References hereinafter to "you" shall refer to The
Bank of New York.
The Offer was commenced by the Offeror on March 3, 1998. The Letter of
Transmittal that accompanies the Offer to Purchase is to be used by the
shareholders of the Company to accept the Offer, and contains instructions with
respect to the delivery of certificates for Shares tendered.
The Offer shall expire at 12:00 Midnight, New York City time, on March 30,
1998 (the "Initial Expiration Date"), or on such subsequent date or time to
which the Offeror may extend the Offer. Subject to the terms of the Merger
Agreement (as defined in the Offer to Purchase), the Offeror expressly reserves
the right to extend the Offer from time to time and may extend the Offer by
giving notice to you before 9:00 a.m., New York City time, on the business day
following the scheduled Expiration Date. The later of the Initial Expiration
Date or the latest time and date to which the Offer may be so extended is
hereinafter referred to as the "Expiration Date."
In carrying out your duties as Depositary, you are to act in accordance
with the following instructions:
1. You will establish and maintain a book-entry account in respect of the
Shares at the Depository Trust Company ("DTC"), in connection with the Offer, in
accordance with Rule 17AD-14 under the Securities Exchange Act of 1934, as
amended. Any financial institution that is a participant in the DTC system may
make book-entry delivery of the Shares by causing DTC
<PAGE>
to transfer such Shares into the account maintained by you, pursuant to this
paragraph, in accordance with DTC's procedure for such transfer, and you may
effect a withdrawal of Shares through such account by book-entry movement.
However, although delivery of Shares may be effected through book-entry
transfer at DTC, the Letter of Transmittal (or facsimile thereof) with any
required signature guarantees and any other documents must, in any case, be
received by you in order for Shares to be properly tendered. The account
shall be maintained until all Shares tendered pursuant to the Offer shall
have been either accepted for payment or returned.
2. You are to examine each of the Letters of Transmittal and certificates
for Shares and any other documents delivered or mailed to you by or for
shareholders of the Company to ascertain whether; (i) the Letters of Transmittal
and any such other documents are duly executed and properly completed in
accordance with instructions set forth therein and (ii) the Shares have
otherwise been properly tendered. In each case where the Letter of Transmittal
or any other document has been improperly completed or executed or any of the
certificates for Shares are not in proper form for transfer or some other
irregularity in connection with the acceptance of the Offer exists, you will
endeavor to inform the presenters of the need for fulfillment of all
requirements and to take any other action as may be necessary or advisable to
cause such irregularity to be corrected.
3. With the approval of an authorized officer of the Offeror, William D.
Larsson, or of Stoel Rives LLP, counsel to the Offeror (such approval, if given
orally, to be confirmed in writing), or any other party designated by such
officer, you are authorized to waive, any irregularities in connection with any
tender pursuant to the Offer.
4. Tenders of Shares may be made only as set forth in Section 3 of the
Offer to Purchase, and Shares shall be considered properly tendered to you only
when:
(a) certificates for Shares (whether physically delivered or
delivered pursuant to the procedure for book-entry transfer set forth in Section
3 of the Offer to Purchase, in which latter case confirmation of receipt of such
tendered Shares must be received by you) are covered by a properly completed and
duly executed Letter of Transmittal received by you (together with any other
required documents prior to the Expiration Date, or by an appropriate Notice of
Guaranteed Delivery from an Eligible Institution received by you in accordance
with Section 3 of the Offer to Purchase prior to the Expiration Date). For the
purposes of these instructions: an "Eligible Institution" shall be a financial
institution that is a member of the Securities Transfer Agents Medallion Program
("STAMP") the Stock Exchange Medallion Program ("SEMP") or the New York Stock
Exchange, Inc. Medallion Signature Program ("MSP") (each, an "Eligible
Institution"); and "an appropriate Notice of Guaranteed Delivery" shall be a
Notice of Guaranteed Delivery substantially in the form attached hereto as
Exhibit C, which is either delivered to you by hand or transmitted to you by
facsimile transmission and mail or otherwise;
(b) certificates for Shares (together with any other required
documents) are received by you, or you have received confirmation of receipt of
such Shares pursuant to the
<PAGE>
book-entry transfer procedures set forth in the Offer to Purchase, prior to
the Expiration Date or, in the case of an appropriate Notice of Guaranteed
Delivery, along with a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof) and any other documents
required by the Letter of Transmittal, within three Nasdaq National Market
trading days after the date of such Notice of Guaranteed Delivery; and
(c) the adequacy of the items relating to certificates for Shares and
the related Letter of Transmittal has been favorably passed upon as above
provided.
Notwithstanding the provisions of this paragraph 4, Shares which the
Offeror or Stoel Rives LLP shall approve as having been properly tendered shall
be considered to be properly tendered.
A tender made on the basis of an appropriate Notice of Guaranteed Delivery
will not be considered to have been properly made unless stock certificates for
all of the Shares covered thereby be been deposited (either physically or
pursuant to book-entry transfer) within the time periods provided in this
paragraph 4 and Section 3 of the Offer to Purchase, and when all such stock
certificates have been so delivered and all other requirements in this paragraph
4 and the Offer to Purchase have been complied with, the tender will be deemed
effected at the time of receipt by you of the Letter of Transmittal or
appropriate Notice of Guaranteed Delivery, as the case may be, provided for in
such Section 3 and this paragraph 4.
5. You shall advise the Offeror with respect to any Shares received
subsequent to the Expiration Date and accept its instructions with respect to
disposition of such Shares.
6. You shall accept tenders:
(a) in cases where the Shares are registered in two or more names
only if signed by all named holders.
(b) in cases where the signed person (as indicated on the Letter of
Transmittal) is acting in a fiduciary or a representative capacity only when
proper evidence of his authority so to act is submitted.
(c) from persons other than the registered stockholder provided that
normal transfer requirements, including any applicable transfer taxes, are
fulfilled.
You shall accept partial tenders of Shares where so indicated in the Letter
of Transmittal and deliver certificates for Shares to the transfer agent for
split-up and return and untendered Shares to the holder as promptly as
practicable.
7. The Offeror will purchase Shares duly tendered on the terms and
subject to the conditions set forth in the Offer to Purchase and the Letter of
Transmittal. Payment for Shares
<PAGE>
duly tendered and purchased pursuant to the Offer will be made by check on
behalf of the Offeror by you at the rate of $15.25 per Share (or such higher
price as is offered by the Offeror pursuant to the Offer) as soon as
practicable after notice (such notice, if given orally, to be confirmed in
writing) of acceptance of said Shares by the Offeror and the funds referred
to below are received by you; PROVIDED, HOWEVER, that in all cases, payment
for Shares tendered and purchased pursuant to the Offer will be made only
after timely receipt by you of certificates for such Shares (or timely
confirmation of a book-entry transfer of such Shares into your account at
DTC), a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) and any other required documents.
Immediately available funds will be deposited with you on the day checks
are mailed or delivered by you. After such payment, you shall promptly present
certificates for said Shares, and any applicable transfer taxes (to be furnished
by the Offeror), together with your letter of indemnity and any other documents
reasonably requested by the Offeror including a certificate by you indicating
the number of Shares validly tendered, for transfer on the books of the Company,
all in accordance with written instructions from the Offeror and thereafter
deliver the newly-issued certificates for said shares to the Offeror.
8. Shares tendered pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may he withdrawn at any time prior to the
Expiration Date, and unless theretofore purchased by the Offeror, may also be
withdrawn at any time on or after May 1, 1998, if not accepted for purchase.
See the Offer to Purchase for further details.
9. The Offeror shall not be required to purchase any Shares tendered if
any of the conditions set forth in the Offer are not met. Notice of any
decision by the Offeror not to purchase or pay for any Shares tendered shall be
given (and confirmed in writing) by the Offeror to you.
10. If, pursuant to the Offer, the Offeror does not accept and pay for all
or part of the Shares tendered, you shall as soon as practicable return those
certificates for unpurchased Shares (or effect appropriate book-entry transfer),
together with any related required documents, and the Letters of Transmittal
relating thereto that are in your possession, to the persons who deposited them.
11. All certificates for unpurchased Shares and all checks or drafts for
purchased Shares shall be forwarded by (a) first-class mail under a blanket
surety bond protecting you and the Offeror from loss or liability arising out of
the non-receipt or non-delivery of such checks, drafts and certificates or
(b) by registered mail insured separately for the replacement value of each of
such checks, drafts and certificates.
12. You are not authorized to offer to pay any concessions, commissions or
solicitation fees to any broker, dealer, bank or other persons or to engage or
utilize any person to solicit tenders.
<PAGE>
13. As Depositary hereunder you:
(a) Shall have no duties or obligations other than those specifically
set forth herein or as may be subsequently agreed to between you
and the Offeror;
(b) will be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value or
genuineness of any of the certificates or the Shares represented
thereby deposited with you pursuant to the Offer, and will not be
required to and will make no representation as to the validity,
value or genuineness of the Offer;
(c) shall not be obligated to take any legal action hereunder which
might in your judgment involve any expense or liability, unless
you shall have been furnished with reasonable indemnity;
(d) may reasonably rely on and shall be protected in acting in
reliance upon any certificates, instrument, opinion, notice,
letter, telegram, or other document or security delivered to you
and reasonably believed by you to be genuine and to have been
signed by the proper party or parties;
(e) may act upon any tender, statement, request, comment, agreement
or other instrument whatsoever not only as to its due execution
and validity and effectiveness of its provisions, but also as to
the truth and accuracy of any information contained therein,
which you shall in good faith believe to be genuine or to have
been signed or represented by a proper person or persons;
(f) may rely on and shall be protected in acting upon written or oral
instructions from any Officer of the Offeror or any executive
officer of Precision Castparts Corp. set forth on Schedule 1 to
the Offer to Purchase.
(g) may consult with Stoel Rives LLP respect to any questions
relating to your duties and responsibilities and the opinion of
such counsel shall be full and complete authorization and
protection in respect to any action taken, suffered or omitted by
you hereunder in good faith and in accordance with the opinion of
such counsel; and
(h) shall not advise any person tendering Shares pursuant to the
Offer as to the wisdom of making such tender or as to the market
value or decline or appreciation in market value of any Share,
14. You shall take such action as may from time to time be requested by
the Offeror or Stoel Rives LLP (and such other action as you may deem
appropriate) to furnish copies of the
<PAGE>
Offer to Purchase, Letter of Transmittal and Notice of Guaranteed Delivery in
the forms attached hereto, or in such other forms as may be approved from
time to time by the Offeror or Stoel Rives LLP to all persons requesting such
documents and to accept and comply with telephone requests for information
relating to the Offer. The Offeror will furnish you with copies of such
documents on your request.
15. You are authorized to cooperate with and to furnish information to any
organization (and its representatives) designated from time to time by the
Offeror or Stoel Rives LLP in any manner reasonably requested by it in
connection with the Offer and any tenders thereunder.
16. You shall advise by cable, telex, facsimile transmission or telephone,
and promptly thereafter confirm in writing to William D. Larsson, Chief
Financial Officer of the Offeror, Ruth A. Beyer and Todd A. Bauman of Stoel
Rives LLP (each at the address and telephone or other number set forth on
Schedule 1 hereto) and such other persons as any of them may request, daily (or
more frequently if requested) up to and including the Expiration Date, as to the
number of shares which have been tendered pursuant to the Offer and the items
received by you pursuant to this Agreement, separately reporting and giving
cumulative totals as to items properly received, items improperly received and
items covered by Notice of Guaranteed Delivery referred to in paragraph (b) of
paragraph 4 hereof. In addition, you will also inform, and cooperate in making
available to, the aforementioned persons upon oral request made from time to
time prior to the Expiration Date of such other information as they may
reasonably request. Such cooperation shall include, without limitation, the
granting by you to the Offeror, the persons listed in the preceding sentence,
and such person as Ruth A. Beyer or Todd A. Bauman of Stoel Rives LLP or the
Offeror may request, of access to those persons on your staff who are
responsible for receiving tenders, in order to ensure that immediately prior to
the Initial Expiration Date and each other Expiration Date, if any, the Offeror
shall have received information in sufficient detail to enable it to decide
whether to extend the Offer. You shall prepare a final list of all Persons
whose tenders were accepted the number of shares tendered, the amount accepted
and deliver said list to William D. Larsson, Chief Financial Officer of the
Offeror, Ruth A. Beyer and Todd A. Bauman of Stoel Rives LLP.
17. Letters of Transmittal and Notices of Guaranteed Delivery submitted in
lieu thereof pursuant to Section 3 of the Offer to Purchase shall be stamped by
you as to the date, and, after the expiration of the Offer, the time, of receipt
thereof and shall be preserved by you for a period of time at least equal to the
period of time you preserve other records pertaining to the transfer of
securities. You shall dispose of unused Letters of Transmittal and other
surplus materials by returning them to William D. Larsson, of the Offeror.
18. You hereby expressly waive any lien, encumbrance or right of set-off
whatsoever that you may have with respect to funds deposited with you for the
purchase of Shares and the payment of stock transfer taxes by reason of amounts,
if any, borrowed by the Offeror, EOC Acquisition Corporation, or any of its
subsidiaries or affiliates pursuant to any loan or credit
<PAGE>
agreement with you.
19. For services rendered as Depositary hereunder, you shall be entitled
to such compensation as set forth on Schedule 1 attached hereto.
20. You hereby acknowledge receipt of the Offer to Purchase and the Letter
of Transmittal and further acknowledge that you have examined each of them. Any
inconsistency between this Agreement, on the one hand, and the Offer to Purchase
and the Letter of Transmittal (as they may be amended from time to time), on the
other hand, shall be resolved in favor of the latter two documents, except with
respect of the duties, liabilities and indemnification of you as Depositary.
21. The Offeror covenants and agrees to indemnify and hold you harmless
against any loss, liability, cost or expense, including attorneys' fees,
(incurred without negligence, misconduct or bad faith on your part) arising out
of or in connection with any act, omission, delay or refusal made by you in
reasonable reliance upon any signature, endorsement, assignment, certificate,
order, request, notice, instruction or other instrument or document believed by
you to be valid, genuine and sufficient and in accepting any tender or effecting
any transfer of Shares believed by you in good faith to be authorized, and in
delaying or refusing in good faith to accept any tenders or effect any transfer
of Shares. In no case shall the Offeror be liable under this indemnity with
respect to any claim against you unless the Offeror shall be notified by you, by
letter or cable or by telex confirmed by letter, of the written assertion of a
claim against you or of any other action commenced against you, promptly after
you shall have received any such written assertion or shall have been served
with a summons in connection therewith. The Offeror shall be entitled to
participate at its own expense in the defense of any such claim or other action
and, if the Offeror so elects, the Offeror shall assume the defense of any suit
brought to enforce any such claim. In the event that the Offeror shall assume
the defense of any such suit, the Offeror shall not be liable for the fees and
expenses of any additional counsel thereafter retained by you, so long as the
Offeror shall retain counsel reasonably satisfactory to you to defend such suit.
22. You shall arrange to comply with all requirements under the tax laws
of the United States, including those relating to missing Tax Identification
Numbers, and shall file any appropriate reports with the Internal Revenue
Service (e.g., 1099, 1099B, etc.). The Offeror understands that you are required
to deduct 31% on payments to holders who have not supplied their correct
Taxpayer Identification Number or required certification. Such funds will be
turned over to the Internal Revenue Service.
23. You shall deliver or cause to be delivered in a timely manner to each
governmental authority to which any stock transfer taxes are payable in respect
of the transfer of purchased Shares to the Company your check in the amount of
all stock transfer taxes so payable, and the Company shall reimburse you for the
amount of any and all stock transfer taxes payable in respect of the transfer of
purchased Shares to the Company; PROVIDED, that you shall
<PAGE>
reimburse the Company for amounts refunded to you in respect of your payment
of any such stock transfer taxes, at such time as such refund is received by
you.
24. This Agreement and your appointment as depository hereunder shall be
construed and enforced in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely within such state,
and shall inure to the benefit of, and the obligations created hereby shall be
binding upon, the successors and assigns of each of the parties hereto. This
Agreement may not be modified orally.
25. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original but which together shall constitute one
and the same agreement.
Please acknowledge receipt of this Agreement and confirm the arrangements
herein provided by signing and returning the enclosed copy.
EOC ACQUISITION CORPORATION
By: /S/ WILLIAM D. LARSSON
---------------------------------------------
Name: William D. Larsson
Title: Vice President and Chief Financial Officer
Accepted as of the date first above written.
THE BANK OF NEW YORK
By: /S/ PATRICK FALCIGLIA
-----------------------------------
Name: Patrick Falciglia
Title: Vice President
<PAGE>
February 26, 1998
Precision Castparts Corp.
4650 SW Macadam, Suite 440
Portland, OR 97201
This letter will serve as the agreement under which you will retain us
to act as information Agent in connection with your Tender Offer to
shareholders of Environment One Corporation.
The services we will perform on your behalf will include the
consultation and preparation in connection with your Offer, the delivery of
material to brokers, banks, nominees and institutions, and holders of record,
acting as Information Agent in connection with your Offer, receiving calls
from shareholders, and telephoning holders of record and non-objecting
beneficial owners (NOBOs).
For the above services our fee will be $7,500.00. Our fee assumes that
there is no counteroffer. One-half of the fee ($3,750.00) is earned and due
upon the signing of this agreement. In addition, an advance against
disbursements of $2,500.00 is due as well. The balance of our fee will be
payable upon the initial expiration of the Offer. Additional disbursements
incurred by us on your behalf will be payable monthly or upon the expiration
of the Offer. Included in our disbursements will be charges for receiving
calls from shareholders and making calls to shareholders of record and
non-objecting beneficial owners (NOBO's). Our charge for this service will
be $5.00 per call; such charge will include labor, directory assistance and
all related telephone expenses.
This agreement covers the period from March 3, 1998 through April 10,
1998. Thereafter, this agreement may be extended for a monthly fee of
$1,500.00.
You shall retain Morrow & Co. for the production and placement of all
advertising copy approved by you or your legal counsel for use relating to
the tender offer. The rates charged by Morrow & Co. will be the regular
open-line rates charged by the selected newspaper for the section in which
the advertisement runs. You recognize that the material to be published is
your sole property and is not the opinion of Morrow & Co. All advertising
shall be at your sole authorization and instruction.
<PAGE>
Precision Castparts Corp.
March 2, 1998
Page 2
You agree to indemnify and hold us harmless against any loss, damage,
expense (including reasonable legal fees and expenses), liability or claim
relating to or arising out of our performance of this agreement except where
we, or our employees, fail to comply with this agreement; provided, however,
that you shall not be obligated to indemnify us or hold us harmless against
any such loss, damage, expense, liability, or claim which results from gross
negligence, bad faith or willful misconduct on our part or of any of our
employees.
At your election, you may assume the defense of any such action. We
shall advise you in writing of any such liability or claim promptly after
receipt of any notice of any action or claim for which we may be entitled to
indemnification hereunder.
This agreement shall be construed and enforced in accordance with the
laws of the State of New York and shall inure to the benefit of, and the
obligations created hereby shall be binding upon, the successors and assigned
of the parties hereto.
If any provisions of this agreement shall be held illegal, invalid or
unenforceable by any court, this agreement shall be construed and enforced as
if that provision had not been contained herein and shall be deemed an
agreement among us to the full extent permitted by applicable law.
For a service charge of $5.00 per check, we will process and prepare
checks for Broker/Nominee invoices submitted for their mailing of your
materials. A statement listing each of the Broker/Nominee invoices will be
furnished by us for your review and payment.
Please acknowledge receipt of this agreement and confirm the
arrangements herein provided by signing and returning the enclosed copy to
the undersigned, whereupon this agreement and your acceptance of the terms
and conditions herein provided shall constitute a binding agreement among us.
Accepted: Very truly yours,
PRECISION CASTPARTS CORP. MORROW & CO., INC.
By: WILLIAM D. LARSSON By:
------------------------
Title: Vice President and Chief Title:
Financial Officer ---------------------
------------------------
Date: February 26, 1998
------------------------
<PAGE>
November 25, 1997
Mr. William C. McCormick
Chairman & CEO
Precision Castparts Corporation
4650 SW Macadam Avenue
Suite 440
Portland, Oregon 97201-4254
Re: Confidentiality Agreement
-------------------------
Dear Bill:
You have expressed interest in a possible transaction (the
"Transaction") involving Environment One Corporation (the "Company") and have
requested certain information concerning the Company. As a condition of
furnishing you with such information, including, without limitation, certain
non-public confidential information and proprietary business practices and
concepts concerning the Company's business, properties, finances, affairs and
technology, whether or not such information is in writing or given orally,
the Company is requiring that you agree, as set forth below, to treat
confidentially such information, any other information that the Company, The
Nassau Group, Inc. or the Company's affiliates, advisors, representatives,
employees or agents (together with The Nassau Group, Inc. the "Company
Parties") furnish to you and any notes, analyses, compilations, studies,
interpretations, or other documents prepared by you or your representatives
(as defined below) that contain or are based upon such information
(collectively, the "Evaluation Material")
For purposes of this letter agreement, any Evaluation Material
furnished to you by an officer or employee, or an agent or advisor to the
Company, regardless of the date furnished and regardless of the capacity in
which such officer, employee, agent or advisor purports to be acting, shall
be deemed Evaluation Material furnished by or on behalf of the Company. You
agree, on your behalf and on behalf of your Representatives, (i) that the
Evaluation Material will be used only in connection with, and to assist in
your evaluation of, the Transaction, (ii) that all Evaluation Material will
be kept strictly confidential by you and your Representatives, and (iii) that
all information furnished by the Company or the Company Parties pursuant to
this Agreement will remain the exclusive property of the Company and that you
and your Representatives will hold all of such information in confidence for
the exclusive benefit of the Company (except that such information may be
used by you for the purposes contemplated herein). You specifically agree
that Evaluation Material shall not be used, directly or indirectly to compete
with or emulate the Company's business. You agree to transmit the Evaluation
Material only to those of your directors, officers, employees, affiliates,
agents, attorneys, accountants, advisors, financing sources or partners, and
others ("Representatives") who need to know such information for the purpose
of assisting you in your evaluation of the Transaction and who shall (i) be
advised by you of this Agreement and (ii) agree to be bound by the provisions
of this Agreement. You and your Representatives shall not, except as
described in the previous sentence or as hereinafter provided, disclose
Evaluation Material or any of the terms, conditions, or other facts with
respect to the possible Transaction to others without the prior written
consent of the Company. Without limiting the foregoing, you and your
Representatives agree to keep even existence of discussions between you and
the Company strictly confidential. You shall be responsible for any such
breach of this Agreement by you and/or any of your Representatives.
- 1 -
<PAGE>
Mr. William C. McCormick
Precision Castparts Corporation
November 25, 1997
If you conduct any portion of your investigation on premises made
available by the Company, you shall not remove Evaluation Material made
available by the Company from those premises without the Company's consent. If
you determine that you do not wish to proceed with a Transaction, you will so
notify the Company immediately.
You further agree that any and all requests for Evaluation Material,
other communications regarding the possible Transaction, and requests for
additional information shall be made only to individuals designated to you in
writing by the Company and that, without the Company's prior written consent,
you will not initiate any contacts of any kind with the staff or employees of
the Company. Upon the Company's request, you will promptly identify in writing
each person or other entity to whom any part of the Evaluation Material is
disclosed.
The Company and the Company Parties make no representation or
warranty, expressed or implied, as to the accuracy or completeness of any or all
of the Evaluation Material. The Company shall have no obligation to update any
Evaluation Material. The Company and Company Parties will have no liability for
actions taken by you or your Representatives in reliance on any information
provided by the Company or the Company Parties with respect to a possible
Transaction. Unless and until a definitive Transaction agreement between the
Company and you is executed and delivered, the Company will not have any legal
obligation of any kind by virtue of this Agreement or any other written or oral
expression with respect to the possible transaction.
It is agreed that we may elect at any time to terminate further
access to, and your review of, the Evaluation Material and that as soon as
practicable after such termination, you will, upon the Company's request,
return all Evaluation Material, but that such termination will not affect or
eliminate your obligations and those of your Representatives by reason of
this Agreement. It is further agreed that we shall not be obligated pursuant
to this Agreement to disclose any particular confidential information or
Evaluation Material.
In the event that you or any of your Representatives are required
(by oral questions, interrogatories, requests for information or document
subpoena, or similar legal process) to disclose any of the Evaluation
Material, you will provide the Company with prompt notice of such request(s)
so that the Company may seek an appropriate protective order or other
appropriate remedy and/or waive your compliance with the provisions of this
Agreement. If in the absence of a protective order or other remedy or the
receipt of a waiver by the Company, you or your Representatives are
nonetheless, in the written opinion of counsel, legally compelled to disclose
Evaluation Material to any tribunal or else stand liable for contempt or
suffer other censure or penalty, you or your Representatives may, without
liability hereunder, disclose to such tribunal only that portion of the
Evaluation Material which such counsel advises you is legally required to be
disclosed, provided that you exercise your best efforts to preserve the
confidentiality of the Evaluation Material, including, without limitation, by
cooperating with the Company to attain an appropriate protective order or
other reliable assurance that confidential treatment will be accorded the
Evaluation Material by such tribunal; provided, however, that after any such
disclosure such disclosed information shall remain confidential and subject
to the terms of the Agreement.
In the event that the Transaction is not effected after you have
been furnished with Evaluation Material, you will promptly upon the request
of the Company (i) deliver to the Company all documents and other tangible
media that contain or reflect information furnished by the Company or the
- 2 -
<PAGE>
Mr. William C. McCormick
Precision Castparts Corporation
November 25, 1997
Company Parties (including all copies, reproductions, digests, abstracts,
analyses and notes) and that are in your or your Representatives' possession or
control and (ii) destroy all documents and other tangible media that contain or
reflect the Evaluation Material (including all copies, reproductions, digests,
abstracts, analyses and notes) in your possession or control, or your
Representatives' possessions or control, in each instance without retaining a
copy of any Evaluation Material (whether returned or destroyed pursuant to
clauses (i) or (ii) above), and will destroy any and all related computer
entries of any such Evaluation Material, without retaining a copy thereof.
You further agree for a period of two years from the date hereof, that
you or your affiliates shall not solicit or hire any of the employees of the
Company who are employees of the Company during the period of your investigation
of the Company while they are still employed by the Company. Nothing in this
Agreement shall be construed as a grant by the Company of any right, title or
interest in the Evaluation Material except the right to use such Evaluation
Material for the purpose and to the extent set forth in this Agreement.
The term Evaluation Material shall not include information that you
demonstrate by clear and convincing evidence has (i) become or has been
generally available to the public other than as a result of disclosure by
you, your Representatives, or other improper means, (ii) was known by you, or
was acquired by you without any known breach of a confidentiality obligation
prior to its disclosure to you by the Company or its representatives, as
evidenced by documentation or other physical evidence predating the date of
this Agreement or (iii) has become available to you on a non-confidential
basis from a source other than the Company or its representatives, provided,
however, that such source was otherwise legally entitled to make such
disclosure to you and you notify the Company of such acquisition within ten
(10) days after the acquisition or, if the acquisition precedes disclosure by
the Company, promptly upon such disclosure.
You understand that a breach by you of this Agreement would cause
substantial and irreparable damage to the Company and that money would be an
inadequate remedy therefor. Accordingly, you acknowledge and agree that the
Company shall be entitled to any other available remedies to an injunction,
specific performance and/or equitable relief as a remedy for such breach.
Each party represents and warrants to the other that (a) it has
duly authorized, executed and delivered this Agreement, and (b) it has not
entered and will not enter into any agreement inconsistent herewith. This
Agreement (a) shall be governed by and construed in accordance with the laws
of New York State, (b) shall be binding upon such parties, successors,
assigns, legal representatives and (c) may not be amended, supplemented,
terminated, or any provision herein waived except by written agreement of
both parties hereto. The parties hereto agree that any dispute thereunder
shall be submitted exclusively to the federal or appropriate New York State
court having jurisdiction located in Schenectady County, New York, and the
parties consent to the venue and jurisdiction of such courts. This Agreement
represents the entire understanding between the parties with respect to the
subject matter hereof. No contemporaneous or prior written or oral agreement
shall be construed to alter, repeal or modify this Agreement and no consent
to or waiver of any breach of or default under any provision of this
Agreement shall be construed as a consent to or waiver of any other such
breach or default. This Agreement may be executed in two or more
counterparts, all of which together shall constitute a single instrument. In
making proof of this Agreement, it shall not be necessary to produce or
account for more than one fully executed counterpart.
- 3 -
<PAGE>
Mr. William C. McCormick
Precision Castparts Corporation
November 25, 1997
If you agree to the terms and conditions set forth in this letter
Agreement, please execute the duplicate copy of this letter in the space
provided below and return it to my attention.
Very truly yours,
THE NASSAU GROUP, INC.
/s/ J. Francis Lavelle
----------------------
Mr. J. Francis Lavelle
Managing Director
The undersigned agrees to be bound by the terms and conditions of this
letter.
Confirmed and agreed to as of this date:
PRECISION CASTPARTS CORPORATION
By: /s/ William C. McCormick
-------------------------
Mr. William C. McCormick, 11/25/97
Chairman & CEO
Confirmed and accepted:
THE COMPANY
By: /s/ Stephen V. Ardia
-------------------------
Chairman, President and
Chief Executive Officer
- 4 -
