<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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
------------------------
SIGNATURE BRANDS USA, INC.
(NAME OF SUBJECT COMPANY)
JAVA ACQUISITION CORP.
SUNBEAM CORPORATION
(BIDDERS)
------------------------
COMMON STOCK, PAR VALUE $.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
------------------------
82667N 10 1
(CUSIP NUMBER OF CLASS OF SECURITIES)
------------------------
DAVID C. FANNIN, ESQ.
SUNBEAM CORPORATION
1615 SOUTH CONGRESS AVENUE
SUITE 200
DELRAY BEACH, FLORIDA 33445
TELEPHONE: (561) 243-2100
FACSIMILE: (561) 243-2100
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
Copy to:
BLAINE V. FOGG, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE, SUITE 46-80
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 735-3000
FACSIMILE: (212) 735-2000
CALCULATION OF FILING FEE
TRANSACTION VALUATION* $93,932,966
AMOUNT OF FILING FEE $18,787
- ------------------
* Estimated for purposes of calculating the amount of the filing fee only. This
amount assumes the purchase of 11,385,814 shares of common stock, $.01 par
value (the 'Shares'), of Signature Brands USA, Inc., at price of $8.25 per
Share in cash. Such number of Shares represents the 9,186,761 Shares
outstanding as of March 5, 1998 and assumes the issuance prior to the
consummation of the Offer of 2,199,053 Shares upon the exercise of outstanding
options and warrants. The amount of the filing fee calculated in accordance
with Regulation 240.0-11 of the Securities Exchange Act of 1934, as amended,
equals 1/50th of one percent of the value of the transaction.
/ / Check box if any part of the fee is offset as provided by Rule 0-11 (a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: Not applicable.
Form or Registration No.: Not applicable.
Filing Party: Not applicable.
Date Filed: Not applicable.
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<PAGE>
14D-1
CUSIP NO. 82667N 10 1
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS Java Acquisition Corp.
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
- ------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / / (b) / /
- ------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- ------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(e) or 2(f) / /
- ------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
- ------------------------------------------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON*
4,406,822
- ------------------------------------------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
- ------------------------------------------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)*
48%
- ------------------------------------------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON
CO
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
- ------------------
* On February 28, 1998, Sunbeam Corporation, a Delaware corporation ('Parent'),
and Java Acquisition Corp., a Delaware corporation and a wholly owned indirect
subsidiary of Parent ('Purchaser'), entered into a Stock Purchase Agreement
(the 'Stock Purchase Agreement') with Thomas H. Lee Equity Partners L.P.,
ML-Lee Acquisition Fund, L.P. and the 1989 Thomas H. Lee Nominee Trust (the
'Major Sellers'), which have voting and dispositive power with respect to
4,406,822 of the common stock, par value $.01 per share (the 'Shares'), which
represents approximately 48% of the outstanding Shares of Signature Brands
USA, Inc. (the 'Company'). Pursuant to, and subject to the terms of the Stock
Purchase Agreement, each Major Seller has agreed, among other things, to (i)
sell, transfer and deliver all Shares owned by such Seller of the Company at
the Closing (as defined in the Stock Purchase Agreement), (ii) vote in favor
of the Merger (as defined in the Offer to Purchase) or any other transaction
contemplated by the Merger Agreement (as defined in the Offer to Purchase),
(iii) vote against any action or agreement that would result in a breach in
any material respect of any covenant, representation or warranty or any other
obligation of the Company under the Merger Agreement and (iv) vote against any
action or agreement that would impede, interfere with or discourage the Offer
or the Merger. Furthermore, each Major Seller in the Stock Purchase Agreement
has granted the Purchaser an irrevocable proxy and irrevocably appoints the
Purchaser or its designees, with full power of substitution, its attorney and
proxy to vote all such Major Seller's Shares in respect of any of the matters
set forth in clauses (i) through (iv) above and in the manner specified in
such clauses, provided, however, that certain conditions are met. The Stock
Purchase Agreement is described more fully in 'Section 11--Background of the
Offer, Purpose of the Offer and the Merger, The Merger Agreement and Certain
Other Agreements' of the Offer to Purchase dated March 6, 1998 (the 'Offer to
Purchase').
2
<PAGE>
14D-1
CUSIP NO. 82667N 10 1
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS Sunbeam Corporation
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
- ------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / / (b) / /
- ------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
BK/OO
- ------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(e) or 2(f) / /
- ------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON*
4,406,822
- ------------------------------------------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES / /
- ------------------------------------------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)*
48%
- ------------------------------------------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON
CO
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
- ------------------
* See footnote to previous table.
3
<PAGE>
TENDER OFFER
This Tender Offer Statement on Schedule 14D-1 (this 'Statement') relates to
the offer by Java Acquisition Corp., a Delaware corporation ('Purchaser') and a
wholly owned indirect subsidiary of Sunbeam Corporation, a Delaware corporation
('Parent'), to purchase all of the outstanding shares of common stock, par value
$.01 per share (the 'Shares'), of Signature Brands USA, Inc., a Delaware
corporation (the 'Company'), at $8.25 per Share, net to the seller in cash,
without interest, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated March 6, 1998 (the 'Offer to Purchase'), a copy of which
is attached hereto as Exhibit (a)(1), and in the related Letter of Transmittal,
a copy of which is attached hereto as Exhibit (a)(2) (which together constitute
the 'Offer').
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Signature Brands USA, Inc. and the
address of its principal executive offices is 7005 Cochran Road, Glenwillow,
Ohio 44139.
(b) The information set forth in the 'INTRODUCTION' of the Offer to
Purchase is incorporated herein by reference.
(c) The information set forth in 'Section 6--Price Range of the Shares;
Dividends on the Shares' of the Offer to Purchase is incorporated herein by
reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d), (g) This Statement is being filed by Purchaser and Parent. The
information set forth in the 'INTRODUCTION' and 'Section 9--Certain Information
Concerning Parent and Purchaser' of the Offer to Purchase is incorporated herein
by reference. The name, business address, present principal occupation or
employment, the material occupations, positions, offices or employments for the
past five years and citizenship of each director and executive officer of Parent
and Purchaser and the name, principal business and address of any corporation or
other organization in which such occupations, positions, offices and employments
are or were carried on are set forth in Schedule I of the Offer to Purchase and
incorporated herein by reference.
(e)-(f) During the last five years neither Purchaser nor Parent nor, to the
best knowledge of Purchaser and Parent, any of the persons listed in Schedule I
of the Offer to Purchase have been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or was a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction as a result of
which any such person was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting activities subject to, federal or
state securities laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)(1) Other than the transactions described in Item 3(b) below, neither
Purchaser nor Parent nor, to the best knowledge of Purchaser and Parent, any of
the persons listed in Schedule I of the Offer to Purchase have entered into any
transaction with the Company, or any of the Company's affiliates which are
corporations, since the commencement of the Company's third full fiscal year
preceding the date of this Statement, the aggregate amount of which was equal to
or greater than one percent of the consolidated revenues of the Company for (i)
the fiscal year in which such transaction occurred or (ii) the portion of the
current fiscal year which has occurred if the transaction occurred in such year.
(a)(2) Other than the transactions described in Item 3(b) below, neither
Purchaser nor Parent nor, to the best knowledge of Purchaser and Parent, any of
the persons listed in Schedule I of the Offer to Purchase have entered into any
transaction since the commencement of the Company's third full fiscal year
preceding the date of this Statement, with the executive officers, directors or
affiliates of the Company which are not corporations, in which the aggregate
amount involved in such transaction or in a series of similar transactions,
including all periodic installments in the case of any lease or other agreement
providing for periodic payments or installments, exceeded $40,000.
4
<PAGE>
(b) The information set forth in the 'INTRODUCTION,' 'Section 9--Certain
Information Concerning Parent and Purchaser,' 'Section 11--Background of the
Offer; Purpose of the Offer and the Merger; The Merger Agreement and Certain
Other Agreements' and 'Section 12--Plans for the Company; Other Matters' of the
Offer to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in 'Section 10--Source and Amount of
Funds' of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in the 'INTRODUCTION,' 'Section
11--Background of the Offer; Purpose of the Offer and the Merger; The Merger
Agreement and Certain Other Agreements' and 'Section 12--Plans for the Company;
Other Matters' of the Offer to Purchase is incorporated herein by reference.
(f)-(g) The information set forth in 'Section 7--Effect of the Offer on the
Market for the Shares; Stock Listing; Exchange Act Registration; Margin
Regulations' of the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth in 'Section 9--Certain Information
Concerning Parent and Purchaser' and 'Section 11--Background of the Offer;
Purpose of the Offer and the Merger; The Merger Agreement and Certain Other
Agreements' of the Offer to Purchase is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the 'INTRODUCTION,' 'Section 10--Source and
Amount of Funds,' 'Section 11--Background of the Offer; Purpose of the Offer and
the Merger; The Merger Agreement and Certain Other Agreements,' 'Section
12--Plans for the Company; Other Matters' and 'Section 16--Fees and Expenses' of
the Offer to Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in 'Section 16--Fees and Expenses' of the Offer
to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in 'Section 9--Certain Information Concerning
Parent and Purchaser' of the Offer to Purchase is incorporated herein by
reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) Except as disclosed in Items 3 and 7 above, there are no present or
proposed material contracts, arrangements, understandings or relationships
between Purchaser or Parent, or to the best knowledge of Purchaser and Parent,
any of the persons listed in Schedule I of the Offer to Purchase, and the
Company, or any of its executive officers, directors, controlling persons or
subsidiaries.
(b)-(c) The information set forth in the 'INTRODUCTION,' 'Section
14--Conditions to the Offer' and 'Section 15--Certain Legal Matters' of the
Offer to Purchase is incorporated herein by reference.
(d) The information set forth in 'Section 7--Effect of the Offer on the
Market for the Shares; Stock Listing; Exchange Act Registration; Margin
Regulations' and 'Section 15--Certain Legal Matters' of the Offer to Purchase is
incorporated herein by reference.
5
<PAGE>
(e) None.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2),
respectively, to the extent not otherwise incorporated herein by reference, is
incorporated herein by reference.
ITEM 11. MATERIALS TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase dated March 6, 1998.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Press Release of Parent dated March 2, 1998.
(a)(8) Press Release of Parent dated March 9, 1998.
(b) None.
(c)(1) Agreement and Plan of Merger, dated as of February 28, 1998, by and
among Parent, Purchaser and the Company.
(c)(2) Stock Purchase Agreement, dated as of February 28, 1998, by and
among Parent, Purchaser and the Major Sellers.
(c)(3) Confidentiality Agreement, dated as of February 17, by and between
Parent and the Company.
(d) None.
(e) Not applicable.
(f) None.
6
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: March 6, 1998
JAVA ACQUISITION CORP.
By: /s/ DAVID C. FANNIN
----------------------------------
David C. Fannin
Executive Vice President and General
Counsel
SUNBEAM CORPORATION
By: /s/ DAVID C. FANNIN
----------------------------------
David C. Fannin
Executive Vice President and General
Counsel
7
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ------- --------------------------------------------------------------------------------------------------------
<S> <C>
(a)(1) Offer to Purchase dated March 6, 1998.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
(a)(7) Press Release of Parent dated March 2, 1998.
(a)(8) Press Release of Parent dated March 9, 1998.
(c)(1) Agreement and Plan of Merger, dated as of February 28, 1998, by and among Parent, Purchaser and the
Company.
(c)(2) Stock Purchase Agreement, dated as of February 28, 1998, by and among Parent, Purchaser and the Major
Sellers.
(c)(3) Confidentiality Agreement, dated as of February 17, 1998, by and between Parent and the Company.
</TABLE>
8
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SIGNATURE BRANDS USA, INC.
AT
$8.25 NET PER SHARE
BY
JAVA ACQUISITION CORP.,
A WHOLLY OWNED, INDIRECT SUBSIDIARY OF
SUNBEAM CORPORATION
------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, APRIL 2, 1998, UNLESS THE OFFER IS EXTENDED.
------------------------
THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER, DATED AS OF
FEBRUARY 28, 1998 (THE 'MERGER AGREEMENT'), BY AND AMONG SUNBEAM CORPORATION
('PARENT'), JAVA ACQUISITION CORP. AND SIGNATURE BRANDS USA, INC. (THE
'COMPANY'). THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE
MERGER AGREEMENT, THE OFFER AND THE MERGER (EACH AS DEFINED
HEREIN 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 AND TENDER THEIR
SHARES PURSUANT TO THE OFFER.
------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES WHICH, WHEN ADDED TO SHARES BENEFICIALLY OWNED BY PARENT AND PURCHASER
(IF ANY), REPRESENTS AT LEAST 51% OF THE SHARES OUTSTANDING (ASSUMING EXERCISE
OF ALL OUTSTANDING OPTIONS AND WARRANTS) ON THE DATE SHARES ARE ACCEPTED FOR
PAYMENT. THE OFFER IS ALSO SUBJECT TO THE OTHER CONDITIONS SET FORTH IN THIS
OFFER TO PURCHASE. SEE SECTION 14.
------------------------
IMPORTANT
Any stockholder who desires to tender all or any portion of such
stockholder's Shares (as defined herein) should either (i) complete and sign the
Letter of Transmittal (or 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, mail or
deliver the Letter of Transmittal (or a facsimile thereof) and any other
required documents to the Depositary and either deliver the certificates for
such Shares to the Depositary or tender such Shares pursuant to the procedures
for book-entry transfer set forth in Section 3 or (ii) request such
stockholder's broker, dealer, commercial bank, trust company or other nominee to
effect the transaction for such stockholder. Any stockholder whose Shares are
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee must contact such broker, dealer, commercial bank, trust company
or other nominee to tender such Shares.
A stockholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available, or who cannot comply
with the procedures for book-entry transfer on a timely basis, or who cannot
deliver all required documents to the Depositary prior to the expiration of the
Offer, may tender such Shares by following the procedures for guaranteed
delivery set forth in Section 3.
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery
and other related materials may be directed to the Information Agent or to the
Dealer Manager at their respective addresses and telephone numbers set forth on
the back cover of this Offer to Purchase. A stockholder also may contact
brokers, dealers, commercial banks or trust companies for assistance concerning
the Offer.
------------------------
THE DEALER MANAGER FOR THE OFFER IS:
MORGAN STANLEY & CO.
INCORPORATED
March 6, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTRODUCTION................................................................................................. 1
THE OFFER.................................................................................................... 3
1. Terms of the Offer..................................................................................... 3
2. Acceptance for Payment and Payment..................................................................... 4
3. Procedure for Tendering Shares......................................................................... 5
4. Withdrawal Rights...................................................................................... 7
5. Certain Federal Income Tax Consequences................................................................ 8
6. Price Range of the Shares; Dividends on the Shares..................................................... 9
7. Effect of the Offer on the Market for the Shares; Stock Listing; Exchange Act Registration; Margin
Regulations............................................................................................ 9
8. Certain Information Concerning the Company............................................................. 10
9. Certain Information Concerning Parent and Purchaser.................................................... 12
10. Source and Amount of Funds............................................................................. 14
11. Background of the Offer; Purpose of the Offer and the Merger; The Merger Agreement and
Certain Other Agreements............................................................................... 14
12. Plans for the Company; Other Matters................................................................... 24
13. Dividends and Distributions............................................................................ 26
14. Conditions to the Offer................................................................................ 26
15. Certain Legal Matters.................................................................................. 27
16. Fees and Expenses...................................................................................... 29
17. Miscellaneous.......................................................................................... 30
SCHEDULE I
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND PURCHASER........................ I-1
</TABLE>
<PAGE>
To the Holders of Common Stock of
SIGNATURE BRANDS USA, INC.:
INTRODUCTION
Java Acquisition Corp., a Delaware corporation ('Purchaser') and a wholly
owned indirect subsidiary of Sunbeam Corporation, a Delaware corporation
('Parent'), hereby offers to purchase all outstanding shares of common stock,
par value $.01 per share (the 'Shares'), of Signature Brands USA, Inc., a
Delaware corporation (the 'Company'), at a price of $8.25 per Share (the 'Offer
Price'), net to the seller in cash, without interest, upon the terms and subject
to the conditions set forth in this Offer to Purchase and in the related Letter
of Transmittal (which, together with any amendments or supplements hereto or
thereto, collectively constitute the 'Offer').
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 sale of Shares pursuant to the Offer.
Purchaser will pay all fees and expenses of Morgan Stanley & Co. Incorporated
('Morgan Stanley'), which is acting as the Dealer Manager (the 'Dealer
Manager'), The Bank of New York, which is acting as the Depositary (the
'Depositary') and Hill & Knowlton, as Information Agent (the 'Information
Agent'), incurred in connection with the Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY (THE 'COMPANY BOARD'), WITH ONE
MEMBER ABSENT, HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, AND HAS
DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE
BEST INTERESTS OF, THE HOLDERS OF SHARES AND, WITH ONE MEMBER ABSENT,
UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND
TENDER THEIR SHARES PURSUANT THERETO.
Donaldson Lufkin & Jenrette Securities Corporation ('DLJ') has delivered to
the Company Board its opinion, dated as of February 28, 1998 (the 'DLJ
Opinion'), to the effect that, as of such date and based upon and subject to
certain matters stated therein, the consideration to be received by the holders
of Shares pursuant to the Merger Agreement, other than Shares held by affiliates
of the Company, is fair from a financial point of view to such holders. The full
text of the DLJ Opinion is attached as an exhibit to the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 (the 'Schedule 14D-9'),
which has been filed by the Company with the Securities and Exchange Commission
(the 'Commission') in connection with the Offer and which is being mailed to
holders of Shares herewith. Holders of Shares are urged to, and should, read the
DLJ Opinion carefully in its entirety.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES (THE 'MINIMUM SHARES') WHICH, WHEN ADDED TO THE NUMBER OF SHARES (IF ANY)
BENEFICIALLY OWNED BY PARENT AND PURCHASER, REPRESENTS AT LEAST 51% OF THE
SHARES OUTSTANDING (ASSUMING EXERCISE OF ALL OUTSTANDING OPTIONS AND WARRANTS)
ON THE DATE SHARES ARE ACCEPTED FOR PAYMENT (THE 'MINIMUM CONDITION'). See
Section 14. The Company has informed Purchaser that, as of March 4, 1998, there
were (i) 9,186,761
Shares issued and outstanding and (ii) 2,199,053 Shares issuable pursuant to the
exercise of options and warrants. The Merger Agreement provides, among other
things, that the Company will not, without the prior written consent of Parent,
issue any additional Shares (except upon the exercise of outstanding options and
warrants). Based on the foregoing, assuming the issuance of 2,199,053 Shares
upon the exercise of outstanding options and warrants, Purchaser believes that
the Minimum Condition will be satisfied if 5,806,766 Shares are validly tendered
and not withdrawn prior to the expiration of the Offer.
The purpose of the Offer is to enable Parent, through Purchaser, to acquire
control of, and the entire equity interest in, the Company. The Offer is being
made pursuant to an Agreement and Plan of Merger, dated as of February 28, 1998
(the 'Merger Agreement'), by and among Parent, Purchaser and the Company.
Pursuant to the Merger Agreement and the Delaware General Corporation Law (the
'DGCL'), as soon as practicable after
1
<PAGE>
the completion of the Offer and satisfaction or waiver, if permissible, of all
conditions, Purchaser or a wholly owned subsidiary of Purchaser will be merged
with and into the Company (the 'Merger'), and the Company will be the surviving
corporation in the Merger (the 'Surviving Corporation'). At the effective time
of the Merger (the 'Effective Time'), each Share then outstanding (other than
Shares held by (i) Parent or any subsidiary of Parent including the Purchaser,
(ii) the Company or any subsidiary of the Company and (iii) stockholders who
properly perfect their dissenters' rights under the DGCL) will be converted into
the right to receive $8.25 in cash or any higher price per Share paid in the
Offer (the 'Merger Consideration'), without interest. The Merger Agreement is
more fully described in Section 11.
Concurrently with the execution and delivery of the Merger Agreement,
Thomas H. Lee Equity Partners L.P., ML-Lee Acquisition Fund, L.P. and the 1989
Thomas H. Lee Nominee Trust (the 'Major Sellers'), which have voting and
dispositive power with respect to 4,406,822 Shares, representing approximately
48% of the Shares outstanding on the date hereof, and certain other affiliates
thereof, entered into a Stock Purchase Agreement, dated as of February 28, 1998
(the 'Stock Purchase Agreement'), with Purchaser. Pursuant to the Stock Purchase
Agreement, each Major Seller has agreed, among other things, to sell to
Purchaser, following expiration of the Offer, all Shares owned by such Major
Seller at a price of $8.25 per share unless such Shares have been tendered and
purchased pursuant to the Offer or the Merger Agreement has been terminated in
accordance with its terms. The Major Sellers also agreed to certain other
matters with respect to the voting of their Shares and any profits upon the sale
of their Shares after the termination of the Offer. The Stock Purchase Agreement
is more fully described in Section 11.
Consummation of the Merger is conditioned upon, among other things, the
approval and adoption by the requisite vote of stockholders of the Company of
the Merger Agreement, if required by applicable law and the Company's Amended
and Restated Certificate of Incorporation, as amended (the 'Certificate of
Incorporation'). See Section 14. Under the DGCL and pursuant to the Certificate
of Incorporation, the affirmative vote of the holders of a majority of the
outstanding Shares is the only vote of any class or series of the Company's
capital stock that may be necessary to approve the Merger Agreement and the
Merger.
Under Section 253 of the DGCL, if a corporation owns at least 90% of the
outstanding shares of each class of a subsidiary corporation, the corporation
holding such stock may merge such subsidiary into itself, or itself into such
subsidiary, without any action or vote on the part of the board of directors or
the stockholders of such other corporation (a 'short-form merger'). In the event
that Purchaser acquires in the aggregate at least 90% of the outstanding Shares
pursuant to the Offer or otherwise, then, at the election of Parent, a
short-form merger could be effected without any further approval of the Company
Board or the stockholders of the Company. Even if Purchaser does not own 90% of
the outstanding Shares following consummation of the Offer, Parent or Purchaser
could seek to purchase additional Shares in the open market or otherwise in
order to reach the 90% threshold and employ a short-form merger. The per share
consideration paid for any Shares so acquired may be greater or less than the
Offer Price. Parent presently intends to effect a short-form merger, if
permitted to do so under the DGCL, pursuant to which Purchaser will be merged
with and into the Company. See Section 12.
Pursuant to the Merger Agreement, following the purchase of Shares in the
Offer, Parent has the right to designate directors on the Company Board and
Parent intends to fully exercise that right. See Section 11.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
2
<PAGE>
THE OFFER
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer, Purchaser will
accept for payment and pay for all Shares validly tendered, and not withdrawn,
prior to the Expiration Date. The term 'Expiration Date' shall mean 12:00
Midnight, New York City time, on Thursday, April 2, 1998 (the 'Initial
Expiration Date'), unless and until Purchaser, in accordance with the terms of
the Merger Agreement, shall have extended the period of time for which the Offer
is open, in which event the term 'Expiration Date' shall mean the latest time
and date at which the Offer, as so extended by Purchaser, shall expire.
The Offer is conditioned upon the satisfaction of the Minimum Condition,
the expiration or termination of all waiting periods imposed by the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the 'HSR Act')
and the other conditions set forth in Section 14. In the Merger Agreement,
Parent and Purchaser have agreed that, if all conditions to the Offer are not
satisfied on the Initial Expiration Date and if Parent determines in its
reasonable discretion that all such conditions are reasonably capable of being
satisfied, Parent shall extend the Offer from time to time until such conditions
are satisfied or waived; provided that Parent shall not be required to extend
the Offer beyond April 30, 1998, unless any necessary approvals under the HSR
Act shall not have been received by such date, in which case Parent shall extend
the Offer until the earlier of (i) ten days following receipt of such approvals
and (ii) June 30, 1998.
If all conditions to the Offer are not satisfied prior to the Expiration
Date, Purchaser reserves the right, subject to the terms of the Merger Agreement
and subject to complying with applicable rules and regulations of the
Commission, to (i) decline to purchase any Shares tendered in the Offer and
terminate the Offer and return all tendered Shares to the tendering
stockholders, (ii) waive any or all conditions to the Offer and, to the extent
permitted by applicable law, purchase all Shares validly tendered, (iii) extend
the Offer and, subject to the right of stockholders to withdraw Shares until the
Expiration Date, retain all Shares which have been tendered during the period or
periods for which the Offer is extended or (iv) subject to the following
sentence, amend the Offer. The Merger Agreement provides that Purchaser will
not, without the prior written consent of the Company, decrease the Offer Price,
change the form of consideration payable in the Offer, decrease the number of
Shares sought in the Offer or change the conditions to the Offer.
The Merger Agreement requires Purchaser to accept for payment and pay for
all Shares validly tendered and not withdrawn pursuant to the Offer if all
conditions to the Offer are satisfied on the Expiration Date.
Any extension, amendment or termination of the Offer will be followed as
promptly as practicable by public announcement thereof, the announcement in the
case of an extension to be issued no later than 9:00 a.m., New York City time,
on the next business day after the previously scheduled Expiration Date in
accordance with the public announcement requirements of Rule 14d-4(c) under the
Securities Exchange Act of 1934, as amended (the 'Exchange Act'). Without
limiting the obligation of Purchaser under such Rule or the manner in which
Purchaser may choose to make any public announcement, Purchaser currently
intends to make announcements by issuing a press release to the Dow Jones News
Service.
If Purchaser extends the Offer, or if Purchaser (whether before or after
its acceptance for payment of Shares) is delayed in its purchase of, or payment
for, Shares or is unable to pay for Shares pursuant to the Offer for any reason,
then, without prejudice to Purchaser's rights under the Offer, the Depositary
may retain tendered Shares on behalf of 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 Purchaser to delay the
payment for Shares which 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 the Offer.
If 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,
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 the Offer must remain open
following material changes in the terms of the Offer or information concerning
the Offer, other than a change in price or a change in percentage of securities
sought, will
3
<PAGE>
depend upon the facts and circumstances then existing, including the relative
materiality of the changed terms or information. In a public release, the
Commission has stated that in its view an offer must remain open for a minimum
period of time following a material change in the terms of the Offer and that
waiver of a material condition, such as the Minimum Condition, is a material
change in the terms of the Offer. The release states that an offer should remain
open for a minimum of five business days from the date a material change is
first published, or sent or given to security holders and that, if material
changes are made with respect to information not materially less significant
than the offer price and the number of shares being sought, a minimum of ten
business days may be required to allow adequate dissemination and investor
response. The requirement to extend the Offer will not apply to the extent that
the number of business days remaining between the occurrence of the change and
the then-scheduled Expiration Date equals or exceeds the minimum extension
period that would be required because of such amendment. If, prior to the
Expiration Date, the Purchaser increases the consideration offered to holders of
Shares pursuant to the Offer, such increased consideration will be paid to all
holders whose Shares are purchased in the Offer whether or not such Shares were
tendered pursuant to such increase. As used in this Offer to Purchase, 'business
day' has the meaning set forth in Rule 14d-1 under the Exchange Act.
The Company has provided Purchaser with the Company's stockholder lists and
security position listings for the purpose of disseminating the Offer to holders
of Shares. This Offer to Purchase and the related Letter of Transmittal will be
mailed by Purchaser to record holders of Shares and will be furnished by
Purchaser to brokers, dealers, banks and similar persons whose names, or the
names of whose nominees, appear on the stockholder lists or, if applicable, who
are listed as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT
Upon the terms and subject to the conditions to the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will accept for payment and will pay for, promptly
after the Expiration Date, all Shares validly tendered prior to the Expiration
Date and not properly withdrawn in accordance with Section 4. All determinations
concerning the satisfaction of such terms and conditions will be within
Purchaser's sole discretion, which determinations will be final and binding. See
Sections 1 and 14. Subject to the Merger Agreement, Purchaser expressly reserves
the right, in its sole discretion, to delay acceptance for payment of, or
payment for, Shares in order to comply in whole or in part with any applicable
law, including, without limitation, the HSR Act. Any such delays will be
effected in compliance with Rule 14e-1(c) under the Exchange Act (relating to a
bidder's obligation to 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).
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates for
such Shares (or a timely Book-Entry Confirmation (as defined below) with respect
thereto), (ii) 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 (as defined below), and (iii)
any other documents required by the Letter of Transmittal. The per share
consideration paid to any holder of Shares pursuant to the Offer will be the
highest per share consideration paid to any other holder of such Shares pursuant
to the Offer.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares properly tendered to Purchaser and not
withdrawn, if and when Purchaser gives oral or written notice to the Depositary
of Purchaser's acceptance for payment of such Shares. 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 payment from Purchaser and
transmitting payment to tendering stockholders. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE TO BE PAID BY PURCHASER FOR THE SHARES,
REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
If Purchaser is delayed in its acceptance for payment of, or payment for,
Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to Purchaser's rights under the
Offer (including such rights as are set forth in Sections 1 and 14) (but subject
to compliance with Rule 14e-1(c) under the Exchange Act), the Depositary may,
nevertheless, on behalf of Purchaser, retain tendered
4
<PAGE>
Shares, and such Shares may not be withdrawn except to the extent tendering
stockholders are entitled to exercise, and duly exercise, withdrawal rights as
described in Section 4.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if certificates are submitted representing more Shares than are
tendered, certificates representing Shares not tendered or not accepted for
purchase will be returned to the tendering stockholder, or such other person as
the tendering stockholder shall specify in the Letter of Transmittal, as
promptly as practicable following the expiration, termination or withdrawal of
the Offer. In the case of Shares delivered by book-entry transfer into the
Depositary's account at a Book-Entry Transfer Facility pursuant to the
procedures set forth in Section 3, such Shares will be credited to such account
maintained at a Book-Entry Transfer Facility as the tendering stockholder shall
specify in the Letter of Transmittal, as promptly as practicable following the
expiration, termination or withdrawal of the Offer. If no such instructions are
given with respect to Shares delivered by book-entry transfer, any such Shares
not tendered or not purchased will be returned by crediting the account at the
Book-Entry Transfer Facility designated in the Letter of Transmittal as the
account from which such Shares were delivered.
Purchaser reserves the right to transfer or assign, in whole or in part, to
Parent or to any direct or indirect wholly owned subsidiary of Parent, the right
to purchase Shares tendered pursuant to the Offer, but any such transfer or
assignment will not relieve Purchaser of its obligations under the Offer and
will in no way prejudice the rights of tendering stockholders to receive payment
for Shares validly tendered and accepted for payment pursuant to the Offer.
3. PROCEDURE FOR TENDERING SHARES
Valid Tender. For Shares to be validly tendered pursuant to the Offer,
either (i) a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), together with any required signature guarantees, or in the
case of a book-entry transfer, an Agent's Message (as defined below), and any
other required documents, must be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date and either certificates for tendered Shares must be received by
the Depositary at one of such addresses or such Shares must be delivered
pursuant to the procedures for book-entry transfer set forth below (and a
Book-Entry Confirmation (as defined below) received by the Depositary), in each
case prior to the Expiration Date, or (ii) the tendering stockholder must comply
with the guaranteed delivery procedures set forth below.
The Depositary will establish accounts with respect to the Shares at [The
Depository Trust Company and the Philadelphia Depository Trust Company](each, a
'Book-Entry Transfer Facility' and, collectively, the 'Book-Entry Transfer
Facilities') for purposes of the Offer within two (2) business days after the
date of this Offer to Purchase. Any financial institution that is a participant
in the Book-Entry Transfer Facility's systems may make book-entry delivery of
Shares by causing the Book-Entry Transfer Facility to transfer such Shares into
the Depositary's account in accordance with the Book-Entry Transfer Facility's
procedure for such transfer. However, although delivery of Shares may be
effected through book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message, and any other required documents must, in any case, be
transmitted to, and received by, the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase prior to the Expiration Date,
or the tendering stockholder must comply with the guaranteed delivery procedures
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.' DELIVERY OF DOCUMENTS TO THE
BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER
FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
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 such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that Purchaser
may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH A BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING
5
<PAGE>
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.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (i) if the Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Section, includes any participant in
any of the Book Entry Transfer Facilities' systems whose name appears on a
security position listing as the owner of the Shares) of Shares tendered
therewith and such registered holder has not completed either the box entitled
'Special Delivery Instructions' or the box entitled 'Special Payment
Instructions' on the Letter of Transmittal or (ii) if such Shares are tendered
for the account of a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in the
Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each, an 'Eligible Institution' and, collectively, 'Eligible Institutions'). In
all other cases, all signatures on Letters of Transmittal must be guaranteed by
an Eligible Institution. See Instructions 1 and 5 to the Letter of Transmittal.
If the certificates for Shares 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
certificates for Shares not tendered or not accepted for payment are to be
returned, to a person other than the registered holder of the certificates
surrendered, then the tendered certificates for such Shares must be endorsed or
accompanied by appropriate stock powers, in either case, signed exactly as the
name or names of the registered holders or owners appear on the certificates,
with the signatures on the certificates or stock powers guaranteed as aforesaid.
See Instruction 5 to the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or the procedures for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such stockholder's tender may be
effected if all the following conditions are met:
(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 provided by Purchaser, is received by
the Depositary, as provided below, prior to the Expiration Date; and
(iii) the certificates for (or a Book-Entry Confirmation with respect
to) such Shares, together with a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), 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
(the 'Nasdaq National Market'), operated by the National Association of
Securities Dealers, Inc. (the 'NASD'), is open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by telegram, 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.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for (or a timely Book-Entry
Confirmation with respect to) such Shares, (ii) 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 (iii) 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. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE TO BE PAID BY PURCHASER FOR THE SHARES,
REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
The valid tender of Shares pursuant to one of the procedures described
above will constitute a binding agreement between the tendering stockholder and
Purchaser upon the terms and subject to the conditions of the Offer.
6
<PAGE>
Appointment. By executing the Letter of Transmittal as set forth above
(including delivery through an Agent's Message) the tendering stockholder will
irrevocably appoint designees of Parent as such stockholder's attorneys-in-fact
and proxies, in the manner set forth in the Letter of Transmittal, 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
Purchaser, and with respect to any and all non-cash dividends, distributions,
rights, other Shares or other securities issued or issuable in respect of such
Shares on or after February 28, 1998 (collectively, 'Distributions'). All such
proxies will be considered coupled with an interest in the tendered Shares. Such
appointment will be effective if and when, and only to the extent that,
Purchaser accepts for payment Shares tendered by such stockholder as provided
herein. All such powers of attorney and proxies will be irrevocable and will be
deemed granted in consideration of the acceptance for payment of Shares tendered
in accordance with the terms of the Offer. Upon such appointment, all prior
powers of attorney, proxies and consents given by such stockholder with respect
to such Shares (and any and all Distributions) will, without further action, be
revoked and no subsequent powers of attorney, proxies, consents or revocations
may be given by such stockholder (and, if given, will not be deemed effective).
The designees of Parent will thereby be empowered to exercise all voting and
other rights with respect to such Shares (and any and all Distributions),
including, without limitation, in respect of any annual or special meeting of
the Company's stockholders (and any adjournment or postponement thereof),
actions by written consent in lieu of any such meeting or otherwise, as each
such attorney-in-fact and proxy or his substitute shall in his sole discretion
deem proper. Purchaser reserves the right to require that, in order for Shares
to be deemed validly tendered, immediately upon Purchaser's acceptance for
payment of such Shares, Purchaser must be able to exercise full voting, consent
and other rights with respect to such Shares (and any and all Distributions),
including voting at any meeting of stockholders.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by Purchaser, in its sole discretion, which determination
will be final and binding. Purchaser reserves the absolute right to reject any
or all tenders of any Shares determined by it not to be in proper form or the
acceptance for payment of which, or payment for which, may, in the opinion of
Purchaser's counsel, be unlawful. Purchaser also reserves the absolute right, in
its sole discretion, subject to the provisions of the Merger Agreement, to waive
any of the conditions of the Offer or any defect or irregularity in the tender
of any 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 or irregularities
relating thereto have been cured or waived. None of Purchaser, Parent, the
Dealer Manager, the Depositary, the Information Agent or any other person will
be under any duty to give notification of any defects or irregularities in
tenders or incur any liability for failure to give any such notification.
Subject to the terms of the Merger Agreement, Purchaser's interpretation of the
terms and conditions of the Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding.
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 and paid for by Purchaser pursuant to
the Offer, may also be withdrawn at any time after May 4, 1998.
For a withdrawal to be effective, a written, telegraphic 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 and
must specify the name of the person having tendered the Shares to be withdrawn,
the number of Shares to be withdrawn and the name of the registered holder of
the Shares to be withdrawn, if different from the name of the person who
tendered the Shares. If certificates for Shares have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
certificates, the serial numbers shown on such certificates must be submitted to
the Depositary and, unless such Shares have been tendered by an Eligible
Institution, the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution. If Shares have been delivered pursuant to the procedures
for book-entry transfer as set forth in Section 3, any notice of withdrawal must
also specify the name and number of the account at the appropriate Book-Entry
Transfer Facility to be credited with the withdrawn Shares and otherwise comply
with such Book-Entry Transfer Facility's procedures. Withdrawals of tenders of
Shares may not be rescinded, and any Shares properly withdrawn will thereafter
be
7
<PAGE>
deemed not validly tendered for purposes of the Offer. However, withdrawn Shares
may be retendered by again following one of the procedures described in Section
3 any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser, in its sole discretion,
which determination will be final and binding. None of Purchaser, Parent, the
Dealer Manager, the Depositary, the Information Agent or any other person will
be under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain United States federal income tax
consequences of the Offer and the Merger relevant to beneficial holders of
Shares whose Shares are tendered and accepted for payment pursuant to the Offer
or whose Shares are converted to cash in the Merger. The discussion is for
general information only and does not purport to consider all aspects of federal
income taxation that might be relevant to beneficial holders of Shares. The
discussion is based on current provisions of the Internal Revenue Code of 1986,
as amended (the 'Code'), existing, proposed and temporary regulations
promulgated thereunder, rulings, administrative pronouncements and judicial
decisions, changes to which could materially affect the tax consequences
described herein and could be made on a retroactive basis. The discussion
applies only to beneficial holders of Shares in whose hands Shares are capital
assets within the meaning of Section 1221 of the Code and may not apply to
beneficial holders (i) who acquired their Shares pursuant to the exercise of
employee stock options or other compensation arrangements with the Company, (ii)
who perfect their appraisal rights under the DGCL, and (iii) who are subject to
special tax treatment under the Code (such as dealers in securities, insurance
companies, other financial institutions, regulated investment companies and
tax-exempt entities). In addition, this discussion does not discuss the federal
income tax consequences to a beneficial holder of Shares who, for United States
federal income tax purposes, is a non-resident alien individual, a foreign
corporation, a foreign partnership or a foreign estate or trust, nor does it
consider the effect of any foreign, state or local tax laws.
The receipt of cash for Shares pursuant to the Offer or the Merger will be
a taxable transaction for United States federal income tax purposes and may also
be a taxable transaction under applicable state, local and foreign income and
other tax laws. In general, a beneficial holder who sells Shares pursuant to the
Offer or receives cash in exchange for Shares pursuant to the Merger will
recognize gain or loss for federal income tax purposes equal to the difference,
if any, between the amount of cash received and the beneficial holder's adjusted
tax basis in the Shares sold pursuant to the Offer or surrendered for cash
pursuant to the Merger. Gain or loss will be determined separately for each
block of Shares (i.e., Shares acquired at the same cost in a single transaction)
tendered pursuant to the Offer or surrendered for cash pursuant to the Merger.
Such gain or loss will be long-term capital gain or loss provided that a
beneficial holder's holding period for such Shares is more than 12 months at the
time of consummation of the Offer or Merger, as the case may be.
BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH BENEFICIAL HOLDER OF
SHARES IS URGED TO CONSULT SUCH BENEFICIAL HOLDER'S OWN TAX ADVISOR AS TO THE
PARTICULAR TAX CONSEQUENCES TO SUCH BENEFICIAL HOLDER OF THE OFFER AND THE
MERGER, INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL AND OTHER TAX LAWS.
8
<PAGE>
6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES
The Shares are traded through the Nasdaq National Market under the symbol
'SIGB'. The following table sets forth, for each of the fiscal quarters
indicated, the high and low reported sales price per Share on the Nasdaq
National Market.
<TABLE>
<CAPTION>
COMMON STOCK
-------------
HIGH LOW
---- ---
<S> <C> <C>
Fiscal Year Ending September 30, 1998
First
Quarter.............................................................................. $6 1/2 $3 13/16
Second Quarter (through March 5, 1998)............................................. 8 3/32 3 1/2
Fiscal Year Ended September 28, 1997
First Quarter...................................................................... $6 3/8 $3 3/8
Second Quarter..................................................................... 5 3/4 3 5/8
Third Quarter...................................................................... 4 3/8 4 3/4
Fourth Quarter..................................................................... 4 5/8 5
Fiscal Year Ended September 29, 1996
First Quarter...................................................................... $5 1/8 $3 3/8
Second Quarter..................................................................... 5 3/8 3 5/8
Third Quarter...................................................................... 6 7/8 4 3/4
Fourth Quarter..................................................................... 6 3/8 5
</TABLE>
On February 27, 1998, the last full trading day prior to the public
announcement of the execution of the Merger Agreement by the Company, Parent and
Purchaser, the last reported sales price of the Shares on the Nasdaq National
Market was $5 1/4 per Share. On March 5, 1998, the last full trading day prior
to the commencement of the Offer, the last reported sales price of the Shares on
the Nasdaq National Market was $8 1/16 per Share. STOCKHOLDERS ARE URGED TO
OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
The Company did not declare or pay any cash dividends during any of the
periods indicated in the above table. The agreements governing the Company's
indebtedness contain provisions which currently restrict the Company from
declaring or paying dividends with respect to the Shares. In addition, under the
terms of the Merger Agreement, the Company is not permitted to declare or pay
dividends with respect to the Shares without the prior written consent of
Parent.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK LISTING; EXCHANGE ACT
REGISTRATION; MARGIN REGULATIONS
Market for the Shares. The purchase of Shares by Purchaser pursuant to the
Offer will reduce the number of Shares that might otherwise trade publicly and
will reduce the number of holders of Shares, which, depending upon the number of
Shares so purchased, could adversely affect the liquidity and market value of
the remaining Shares held by the public. Purchaser cannot predict whether the
reduction in the number of Shares that might otherwise trade publicly would have
an adverse or beneficial effect on the market price for, or marketability of,
the Shares or whether it would cause future market prices to be greater or less
than the Offer Price.
Nasdaq Quotation. The Common Stock is traded through the Nasdaq National
Market. Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the requirements of the National Association of
Securities Dealers, Inc. (the 'NASD') for continued inclusion on the Nasdaq
National Market, which requires that an issuer either (i) have at least 750,000
publicly held shares, held by at least 400 shareholders, with a market value of
at least $5,000,000, capital and surplus (total shareholders' equity) of at
least $4 million and have a minimum bid price of $1 or (ii) have at least
1,000,000 publicly held shares, held by at least 400 shareholders, with a market
value of at least $15,000,000, have a minimum bid price of $5 and have either
(A) a market capitalization of at least $50,000,000 or (B) total assets and
revenues each of at least $50,000,000. If the Nasdaq National Market and the
Nasdaq Smallcap Market were to cease to publish quotations for the Shares, it is
possible that the Shares would continue to trade in the over-the-counter market
and that price or other quotations would be reported by other sources. The
extent of the public market for such Shares and the availability of such
quotations would depend, however, upon such factors as the number of
shareholders and/or the aggregate market value of such securities remaining at
such time, the interest in maintaining a market in the
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<PAGE>
Shares on the part of securities firms, the possible termination of registration
under the Exchange Act as described below, and other factors. The Purchaser
cannot predict whether the reduction in the number of Shares that might
otherwise trade publicly would have an adverse or beneficial effect on the
market place for, or marketability of, the Shares or whether it would cause
future market prices to be greater or lesser than the Offer Price.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Registration of the Shares under the Exchange Act may be
terminated upon application of the Company to the Commission if the Shares are
neither listed on a national securities exchange nor held by 300 or more holders
of record. Termination of registration of the Shares under the Exchange Act
would substantially reduce the information required to be furnished by the
Company to its stockholders and to the Commission and would make certain
provisions of the Exchange Act, such as the short-swing profit recovery
provisions of Section 16(b), the requirement of furnishing a proxy statement
pursuant to Section 14(a) in connection with stockholders' meetings and the
related requirement of furnishing an annual report to stockholders and the
requirements of Rule 13e-3 under the Exchange Act with respect to 'going
private' transactions, no longer applicable to the Company. Furthermore, the
ability of 'affiliates' of the Company and persons holding 'restricted
securities' of the Company to dispose of such securities pursuant to Rule 144 or
Rule 144A promulgated under the Securities Act of 1933, as amended (the
'Securities Act'), may be impaired or eliminated.
Margin Regulations. The Shares presently are 'margin securities' under the
regulations of the Board of Governors of the Federal Reserve System (the
'Federal Reserve Board'), which status has the effect, among other things, of
allowing brokers to extend credit on the collateral of such securities.
Depending upon factors similar to those described above regarding stock exchange
listing and market quotations, it is possible that, following the Offer, the
Shares would no longer constitute 'margin securities' for the purposes of the
margin regulations of the Federal Reserve Board and therefore could no longer be
used as collateral for loans made by brokers. In addition, if registration of
the Shares under the Exchange Act were terminated, the Shares would no longer
constitute 'margin securities.'
Purchaser intends to seek delisting of the Shares from the Nasdaq National
Market and the termination of the registration of the Shares under the Exchange
Act as soon after the completion of the Offer as the requirements for such
delisting and termination are met. If the Nasdaq National Market listing and the
Exchange Act registration of the Shares are not terminated prior to the Merger,
then the Shares will be delisted from the Nasdaq National Market and the
registration of the Shares under the Exchange Act will be terminated following
the consummation of the Merger.
8. CERTAIN INFORMATION CONCERNING THE COMPANY
General. The information concerning the Company contained in this Offer to
Purchase, including that set forth below under the caption 'Selected Financial
Information,' has been furnished by the Company or has been taken from or based
upon publicly available documents and records on file with the Commission and
other public sources. Neither Parent, Purchaser nor the Dealer Manager assumes
responsibility for the accuracy or completeness of the information concerning
the Company contained in such documents and records or for any failure by the
Company to disclose events which may have occurred or may affect the
significance or accuracy of any such information but which are unknown to
Parent, Purchaser or the Dealer Manager.
The Company, through its subsidiaries, designs, manufactures, markets and
distributes a comprehensive line of consumer and professional products. The
Company's consumer products, marketed under the Mr. Coffee(Registered) and
Health o meter(Registered) brand names, include automatic drip coffeemakers,
iced and hot teamakers, coffee filters, water filtration products, accessories
and other kitchen countertop appliances, as well as bath, kitchen and gourmet
scales and therapeutic devices. Professional products include the
Pelouze(Registered) and Health o meter(Registered) brands of office, foodservice
and medical scales. The Company attributes its leading market position to its
strong brand name recognition, distribution in major domestic high volume retail
outlets, marketing and sales promotion efforts, electronic data interchange
(EDI) capabilities, merchandise flow systems and established relationships with
its retail customers. The Company offers consumer products through a combination
of direct sales and independent manufacturers' representatives to distributors
and major retail outlets, including mass merchants, national hardware chains,
drugstore chains,
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catalogue showrooms, warehouse clubs, retail grocery chains, specialty stores,
department stores and various mail order companies. Consumer products are
promoted primarily through network and cable television advertising, consumer
magazines, network radio, cooperative advertising with retailers and consumer
promotions. The Company is a Delaware corporation with its principal executive
offices at 7005 Cochran Road, Glenwillow, Ohio 44139. The telephone number of
the Company at such location is (440) 542-4000.
Selected Financial Information. In September 1994, the Company Board
determined to change its fiscal year from one ending on December 31 in each year
to a 52-53 week fiscal year ending on the Sunday closest to the last day of the
month of September in each year. Set forth below is certain selected
consolidated financial information with respect to the Company, excerpted or
derived from the Company's Annual Report on Form 10-K for the fiscal year ended
September 28, 1997 and its Quarterly Report on Form 10-Q for the quarter ended
December 28, 1997, both filed with the Commission pursuant to the Exchange Act.
More comprehensive financial information is included in such reports and in
other documents filed by the Company with the Commission. The following summary
is qualified in its entirety by reference to such reports and other documents
and all of the financial information (including any related notes) contained
therein. Such reports and other documents may be inspected and copies may be
obtained from the Commission in the manner set forth below.
11
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SIGNATURE BRANDS USA, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED FISCAL YEARS ENDED
---------------------------- ------------------------------------------------
DECEMBER 28, DECEMBER 29, SEPTEMBER 28, SEPTEMBER 29, OCTOBER 1,
1997 1996 1997 1996 1995
------------ ------------ ------------- ------------- --------------
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales............................. $ 90,365 $ 87,136 $ 275,708 $ 282,977 $267,887
Operating income...................... 7,786 6,020 16,760 26,225 22,830
Net income (loss)..................... 1,225 491 (2,212) 2,721 984
Net income (loss) per share........... 0.13 0.05 (0.24) 0.30 0.11
<CAPTION>
AT DECEMBER AT SEPTEMBER AT SEPTEMBER
28, 1997 28, 1997 29, 1996
------------- ------------- --------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets.......................... $ 275,078 $ 259,710 $273,127
Total liabilities..................... 227,093 213,113 224,483
Stockholders' equity.................. 47,985 46,597 48,644
</TABLE>
Available Information. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports, proxy statements and other information with the Commission
relating to its business, financial condition and other matters. Information as
of particular dates concerning the Company's directors and officers, their
remuneration, options granted to them, the principal holders of the Company's
securities and any material interests of such persons in transactions with the
Company is required to be disclosed in proxy statements distributed to the
Company's stockholders and filed with the Commission. Such reports, proxy
statements and other information should be available for inspection at the
public reference facilities of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the Commission located at
Seven World Trade Center, Suite 1300, New York, NY 10048 and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, IL 60661. Copies of such
information should be obtainable by mail, upon payment of the Commission's
customary charges, by writing to the Commission's principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549. The Commission also maintains a website at
http://www.sec.gov that contains reports, proxy statements and other information
relating to the Company which have been filed via the EDGAR System.
9. CERTAIN INFORMATION CONCERNING PARENT AND PURCHASER.
Parent and Purchaser. Parent is a Delaware corporation and (with its
subsidiaries) is a leading consumer products company that designs, manufactures
and markets, nationally and internationally, a diverse portfolio of brand name
products. Parent's Sunbeam(Registered) and Oster(Registered) brands have been
household names for generations, both domestically and abroad, and Parent is a
market leader in many of its product categories. Parent's primary business is
the manufacture, marketing and distribution of durable household goods through
mass marketers and other distributors in the United States and internationally.
Parent also sells its products to commercial end users such as hotels and other
institutions.
Purchaser is a newly incorporated Delaware corporation organized in
connection with the Offer and the Merger and has not carried on any activities
other than in connection with the Offer and the Merger. All of the outstanding
capital stock of Purchaser is indirectly owned by Parent. Until immediately
prior to the time Purchaser purchases Shares pursuant to the Offer, it is not
anticipated that Purchaser will have any significant assets or liabilities or
engage in activities other than those incident to its formation and
capitalization and the transactions contemplated by the Offer and the Merger.
On March 2, 1998, Parent announced that it had entered into three separate
agreements to acquire the Company, The Coleman Company, Inc. and First Alert,
Inc. The three transactions are subject to customary conditions, including the
receipt of required regulatory approvals, and are expected to be financed as set
forth in Section 10.
The Coleman Company, Inc., with 1997 revenues of approximately $1.1
billion, is the world's leading manufacturer and marketer of outdoor
recreational products. It manufactures and distributes widely diversified
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<PAGE>
product lines for camping, leisure time and hardware markets, under the
Coleman(Registered), Powermate(Registered), Camping Gaz(Registered) and
Eastpak(Registered) brand names. The Coleman transaction is valued at
approximately $2 billion, including the assumption of debt.
First Alert, with revenues of approximately $187 million, is the worldwide
leader in residential safety equipment, including smoke and carbon monoxide
detectors. The First Alert transaction is valued at approximately $175 million,
including the assumption of debt.
The principal offices of Purchaser and Parent are located at 1615 South
Congress Avenue, Suite 200, Delray Beach, FL 33445. The telephone number of
Parent and Purchaser at such location is (561) 243-2100.
For certain information concerning the executive officers and directors of
Parent and Purchaser, see Schedule I.
Except as set forth in this Offer to Purchase, neither Purchaser nor
Parent, nor, to the best knowledge of Purchaser or Parent, any of the persons
listed on Schedule I, nor any associate or majority-owned subsidiary of any of
the foregoing, beneficially owns or has a right to acquire any Shares, and
neither Purchaser nor Parent nor, to the best of knowledge of Purchaser or
Parent, any of the persons or entities referred to above, nor any of the
respective executive officers, directors or subsidiaries of any of the
foregoing, has effected any transaction in the Shares during the past 60 days.
Except as set forth in this Offer to Purchase, neither Purchaser nor Parent
has any contract, arrangement, understanding or relationship 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 securities of the Company, joint ventures, loan or
option arrangements, puts or calls, guarantees of loans, guarantees against loss
or the giving or withholding of proxies.
Except as set forth in this Offer to Purchase, none of Purchaser, Parent,
any of their respective affiliates, nor, to the best knowledge of Purchaser or
Parent, any of the persons listed on Schedule I, has had, since December 31,
1994, any business relationships or transactions with the Company or any of its
executive officers, directors or affiliates that would require to be reported
under the rules of the Commission. Except as set forth in this Offer to
Purchase, since December 31, 1994 there have been no contacts, negotiations or
transactions between Purchaser, Parent, any of their respective affiliates or,
to the best knowledge of Purchaser, Parent, any of the persons listed on
Schedule I, and the Company or its affiliates concerning a merger, consolidation
or acquisition, tender offer or other acquisition of securities, election of
directors or a sale or other transfer of a material amount of assets.
Available Information. Parent is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports, proxy statements and other information with the Commission
relating to its business, financial condition and other matters. Information as
of particular dates concerning Parent's directors and officers, their
remuneration, options granted to them, the principal holders of Parent's
securities and any material interests of such persons in transactions with
Parent is required to be disclosed in proxy statements distributed to Parent's
stockholders and filed with the Commission. Such reports, proxy statements and
other information should be available for inspection at the public reference
facilities of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the regional offices of the Commission located at Seven World Trade
Center, Suite 1300, New York, NY 10048 and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, IL 60661. Copies of such information should be
obtainable by mail, upon payment of the Commission's customary charges, by
writing to the Commission's principal office at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Commission also maintains a website at
http://www.sec.gov that contains reports, proxy statements and other information
relating to Parent which have been filed via the EDGAR System. Such materials
should also be available at the offices of the New York Stock Exchange ('NYSE'),
20 Broad Street, New York, NY 10005.
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<PAGE>
10. SOURCE AND AMOUNT OF FUNDS
The Offer is not conditioned upon financing. The total amount of funds
required by Purchaser to consummate the Offer and the Merger, including the
possible refinancing of approximately $156 million of debt presently owed by the
Company and payment of the fees and expenses of the Offer and the Merger, is
estimated to be approximately $245 million. Purchaser will obtain all such funds
from Parent in the form of capital contributions and/or loans. Parent presently
intends to obtain such funds from the syndicated loan market and securities sold
in the debt market. Parent is discussing the proposed terms of these financings
with its financial advisor, Morgan Stanley. Morgan Stanley has advised Parent
that it remains highly confident under current market and economic conditions, a
$2.2 billion credit facility for Parent can be successfully syndicated to
financial institutions. When the amounts and terms of these financings have been
determined, Purchaser will disclose the principal financial terms thereof in a
supplement to this Offer to Purchase. It is anticipated that these financings
will be repaid from funds generated internally by Parent and its subsidiaries
(including the Company after the Merger), although Parent may in the future
refinance these financings. THE SECURITIES SOLD IN THE DEBT MARKET WILL BE SOLD
IN A TRANSACTION NOT REGISTERED UNDER THE SECURITIES ACT WHICH ANTICIPATES
RESALES PURSUANT TO RULE 144A TO QUALIFIED INSTITUTIONAL BUYERS. SUCH SECURITIES
MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN
APPLICABLE EXEMPTION FROM REGISTRATION. THE FOREGOING DOES NOT CONSTITUTE AN
OFFER TO PURCHASE OR A SOLICITATION OF AN OFFER TO BUY ANY SUCH SECURITIES.
11. BACKGROUND OF THE OFFER; PURPOSE OF THE OFFER AND THE MERGER; THE MERGER
AGREEMENT AND CERTAIN OTHER AGREEMENTS.
Background of the Offer. On February 9, 1998, representatives of Morgan
Stanley & Co. and a representative of the Thomas H. Lee Co., whose affiliates
own approximately 48% of the outstanding Shares of the Company, had preliminary
discussions regarding the possibility of Parent acquiring the Company. On
February 11, 1998, representatives of Morgan Stanley & Co., representatives of
Parent and representatives of the Thomas H. Lee Co. continued preliminary
discussions in Boston regarding the possibility of the Parent acquiring the
Company.
On February 17, 1998, representatives of Morgan Stanley & Co. and a
director of the Company affiliated with Thomas H. Lee Co. discussed via
telephone the scope of the information that the Company would make available to
Parent for the purposes of its due diligence review of the Company, and Parent
and the Company entered into a Confidentiality Agreement pursuant to which
Parent agreed, among other things, to treat as confidential certain information
provided to it by or on behalf of the Company.
On February 20, 1998, representatives of Morgan Stanley & Co., Parent and
the Chief Executive Officer of the Company and representatives of DLJ, met in
the New York offices of DLJ to perform a business due diligence review of the
Company. Later that day, representatives of Morgan Stanley & Co. expressed
Parent's serious interest in a possible acquisition of the Company.
From February 23, 1998 through February 26, 1998, the parties held a number
of discussions by telephone related to the Merger Agreement, the proposed
acquisition price for the Company and the information concerning the Company
that had been delivered to Parent.
On February 25, 1998, representatives of Arthur Anderson LLP, accountants
for the Parent, and representatives of KPMG Peat Marwick L.L.P., accountants for
the Company, conducted due diligence review on financial information, work
papers and books and records in Cleveland and representatives of the Parent
conducted business, legal and tax due diligence on the Company in Cleveland with
the Company and its internal and outside counsel.
During the period of February 25 through February 27, the Company and its
representatives negotiated various terms of the proposed Merger Agreement
previously provided to them. On February 26, 1998, a representative of the
Company and the Chief Executive Officer of the Company met in Glenwillow, Ohio
for a business due diligence review and representatives of Coopers & Lybrand
L.L.P., consultants to the Parent, toured the Glenwillow production facilities
of the Company. The following day, representatives for Coopers & Lybrand L.L.P.,
toured the production facilities of the Company in Bridgeview, Illinois.
On February 27, 1998, Parent convened a meeting of its Board of Directors
at which meeting the Parent's Board unanimously approved a negotiating range for
the price to be paid for the Company's Shares and authorized certain officers of
Parent to proceed on behalf of the Parent with negotiations related to the
proposed
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<PAGE>
acquisition and, if terms satisfactory to such officers could be reached, to
enter into a definitive agreement or agreements on behalf of Parent in respect
of such acquisition.
On the night of February 27, 1998, representatives of Morgan Stanley and
representatives of DLJ continued negotiations with respect to price and the
Merger Agreement.
On the morning of February 28, 1998, representatives of Morgan Stanley
presented an offer to representatives of DLJ with a price of $8.25 per Share in
cash, and later that day, following approval of the Merger Agreement by the
Company Board, the Parent, Purchaser and Company executed the Merger Agreement.
On March 2, 1998 each of the Company and Parent publicly announced the
execution of the Merger Agreement. A copy of the press release issued by Parent
has been filed with the Commission as an exhibit to the Schedule 14D-1 of Parent
and Purchaser.
Purpose of the Offer and the Merger. The purpose of the Offer and the
Merger is to enable Parent to acquire control of, and the entire equity interest
in, the Company. The Offer is being made pursuant to the Merger Agreement and is
intended to increase the likelihood that the Merger will be effected. The
purpose of the Merger is to acquire all of the outstanding Shares not purchased
pursuant to the Offer.
Stockholders of the Company who sell their Shares in the Offer will cease
to have any equity interest in the Company and any right to participate in its
earnings and any future growth. If the Merger is consummated, non-tendering
stockholders will no longer have an equity interest in the Company and instead
will have only the right to receive cash consideration pursuant to the Merger
Agreement or to exercise statutory appraisal rights under the DGCL. See Section
12. Similarly, after selling their Shares in the Offer or the subsequent Merger,
stockholders of the Company will not bear the risk of any decrease in the value
of the Company.
The primary benefits of the Offer and the Merger to the stockholders of the
Company are that such stockholders are being afforded an opportunity to sell all
of their Shares for cash at a price which represents a premium of approximately
57% over the closing market price of the Shares on February 27, 1998, the last
full trading day prior to the initial public announcement that the Company,
Purchaser and Parent executed the Merger Agreement.
MERGER AGREEMENT
The following is a summary of certain provisions of the Merger Agreement
not discussed elsewhere in this Offer to Purchase. The summary does not purport
to be complete and is qualified in its entirety by reference to the complete
text of the Merger Agreement, a copy of which is filed with the Commission as
Exhibit (c)(1) to the Schedule 14D-1 and is incorporated herein by reference.
Capitalized terms not otherwise defined below shall have the meanings set forth
in the Merger Agreement. The Merger Agreement may be examined and copies may be
obtained at the places and in the manner set forth in Section 9 of this Offer to
Purchase.
Representations and Warranties. In the Merger Agreement, the Company has
made customary representations and warranties to Parent and Purchaser with
respect to, among other things, corporate organization, capital stock, options
or other rights to acquire Shares, authority to enter into the Merger Agreement,
required consents, no conflicts between the Merger Agreement and the Certificate
of Incorporation and Bylaws of the Company or applicable laws or agreements to
which the Company or its assets may be subject, financial statements, public
filings, conduct of business, employee benefit plans, ERISA, intellectual
property, labor and employment matters, compliance with laws, tax matters,
litigation, environmental matters, material contracts, brokers' and finders'
fees, title to properties, absence of liens, votes required to approve the
Merger Agreement, undisclosed liabilities, product liability, disclosures in
proxy statement and tender offer documents and the absence of material adverse
changes.
In the Merger Agreement, each of Parent and Purchaser has made customary
representations and warranties to the Company with respect to, among other
things, corporate organization, authority to enter into the Merger Agreement,
required consents, no conflicts between the Merger Agreement and the Certificate
of Incorporation and Bylaws of Parent or Purchaser or laws applicable to Parent
and Purchaser or agreements to which Parent or Purchaser are subject, brokers'
fees and disclosures in proxy statement and tender offer documents.
Conditions to the Merger. The respective obligations of Parent and
Purchaser, on the one hand, and the Company, on the other hand, to effect the
Merger are subject to the satisfaction or waiver of each of the following
conditions: (i) the Company Stockholder Approval shall have been obtained if
required by applicable law; (ii) the waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or shall
have expired; (iii) no temporary restraining order, preliminary or permanent
injunction or
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<PAGE>
other order issued by any Governmental Entity or other legal restraint or
prohibition shall be in effect preventing or prohibiting the acceptance for
payment of, or payment for, Shares pursuant to the Offer, or the consummation of
the Merger, provided, however, that the parties shall use their best efforts to
have any such injunction, order, restraint or prohibition vacated; and (iv) no
statute, rule, order, decree or regulation shall have been enacted or
promulgated by any Governmental Entity of competent jurisdiction which prohibits
the consummation of the Merger. The obligation of Parent and Purchaser to effect
the Merger also is subject to Parent or Purchaser having purchased Shares in the
Offer.
The Company Board. The Merger Agreement provides that effective upon the
acceptance for payment by Purchaser of Shares pursuant to the Offer such that
Parent or Purchaser shall own at least a majority of the Fully Diluted Shares,
Purchaser shall be entitled to designate the number of Directors, rounded up to
the next whole number, on the Company Board that equals the product of (i) the
total number of directors on the Company Board (giving effect to the election of
any additional directors pursuant to the Merger Agreement) and (ii) the
percentage that the number of Shares owned by Purchaser (including Shares
accepted for payment) bears to the total number of Shares outstanding, and the
Company shall take all action necessary to cause Purchaser's designees to be
elected or appointed to the Company Board, including, without limitation,
increasing the number of directors, and seeking and accepting resignations of
incumbent directors. At such times, the Company will use its best efforts to
cause individuals designated by Purchaser to constitute the same percentage as
such individuals represent on the Company Board of (x) each committee of the
Company Board (other than any committee established to take action under the
Merger Agreement), (y) each board of directors of each Subsidiary of the Company
and (z) each committee of each such board.
In the event that Purchaser's designees are elected to the Company Board,
until the Effective Time, of the Merger, the Company Board shall have at least
two directors who were directors of the Company on the date of the Merger
Agreement and who are not officers of the Company or any of its subsidiaries
(the 'Independent Directors'). In such event, if the number of Independent
Directors shall be reduced below two for any reason whatsoever, the remaining
Independent Director shall designate a person to fill such vacancy who shall be
deemed to be an Independent Director for purposes of the Merger Agreement or, if
no Independent Directors then remain, the other directors of the Company on the
date of the Merger Agreement shall designate two persons to fill such vacancies
who shall not be officers or affiliates of the Company or any of its
Subsidiaries, or officers or affiliates of Parent or any of its subsidiaries,
and such persons shall be deemed to be Independent Directors for purposes of the
Merger Agreement.
Notwithstanding anything in the Merger Agreement to the contrary, the
affirmative vote of the majority of the Independent Directors shall be required
to (i) amend or otherwise modify the Certificate of Incorporation of the
Company, (ii) approve any amendment, modification or waiver by the Company of
any provisions of the Merger Agreement or (iii) approve any other action by the
Company that materially adversely affects the interests of the stockholders of
the Company (other than Parent or Purchaser) with respect to the transactions
contemplated by the Merger Agreement, including without limitation, any actions
which would constitute a breach by the Company of its representations,
warranties or covenants contained in the Merger Agreement. The forgoing
provisions of the Merger Agreement shall not limit any rights which Parent,
Purchaser or their affiliates may have as holders or beneficial owners of Shares
with respect to the election of directors or otherwise.
The Company's obligations to appoint designees of Purchaser to the Company
Board shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder. Subject to applicable law, the Company shall promptly
take all action requested by Purchaser necessary to effect any such election,
including mailing to its stockholders the information statement containing the
information required by Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder, and the Company agrees to make such mailing with the
mailing of the Schedule 14D-9 (provided that Purchaser shall have provided to
the Company on a timely basis all information required to be included in the
Information Statement with respect to Purchaser's designees). In connection with
the foregoing, the Company will promptly, at the option of Purchaser, either
increase the size of the Company Board and/or obtain the resignation of such
number of its current directors as is necessary to enable Purchaser's designees
to be elected or appointed to, and to constitute a majority of, the Company
Board as provided above. Purchaser will supply to the Company in writing and be
solely responsible for any information with respect to itself and its nominees,
officers, directors and affiliates required by Section 14(f) and Rule 14f-1.
Stockholders' Meeting; Proxy Statement. If required by applicable law in
order to consummate the Merger, the Company will, as promptly as practicable
following the expiration of the Offer and in consultation
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with Purchaser, duly call, give notice of, convene and hold a meeting of its
stockholders (the 'Stockholders Meeting') for the purpose of approving the
Merger Agreement and the transactions contemplated thereby. The Company will,
through its Board of Directors, recommend to its stockholders approval of the
foregoing matters and seek to obtain all votes and approvals thereof by the
stockholders, subject to provisions set forth below under 'No Solicitation'.
Subject to the foregoing, such recommendation, together with a copy of the DLJ
Opinion shall be included in the Proxy Statement.
Notwithstanding the foregoing, if Purchaser shall acquire at least 90% of
the outstanding Company Common Stock pursuant to the Offer, Purchaser may cause
the Company to be merged into Purchaser, or Purchaser into the Company, in
either case without a Stockholders Meeting and in accordance with the Delaware
law; provided, however, that in such event, the rights of stockholders of the
Company under the Merger Agreement (including, without limitation, the right to
receive the Merger Consideration) shall not be adversely affected thereby (other
than the right to receive the Proxy Statement, attend the Stockholders Meeting
and vote on the Merger, which shall no longer be applicable).
Employee Benefits. The Merger Agreement provides that, for a period of
twelve months following the Effective Time, Parent shall maintain employee
benefits plans and arrangements (directly or in conjunction with Purchaser)
which, in the aggregate, will provide a level of benefits to continuing
employees of the Company substantially comparable in the aggregate to those
provided under Parent's benefit plans as in effect immediately prior to the
Effective Time (other than discretionary benefits) provided that Parent may make
modifications to such benefit plans and arrangements to the extent necessary to
comply with applicable law or to reflect widespread adjustments in benefits (or
costs thereof) provided to employees under compensation and benefit plans of
Parent and its subsidiaries, and no specific compensation and benefit plans need
be provided. For purposes of determining eligibility and vesting under certain
benefit plans, Parent shall use the employee's hire date with the Company or
such other date as has been previously determined by the Company for credit for
prior employment with any ERISA Affiliate of the Company. Plans providing
medical, dental or life insurance benefits after the Effective Time to an active
or former employee of the Company or its Subsidiaries (or a dependent) shall
waive waiting periods, pre-existing conditions, and certain exclusions to the
extent so waived under present policy and shall take into account expenses
incurred by such individuals on or before the Effective Time for purposes of
satisfying deductible, coinsurance and maximum out-of-pocket provisions to the
extent taken into account under present policy.
The Merger Agreement does not prohibit the Company or Purchaser from
terminating the employment of any employee at any time with or without cause
(subject to, and in accordance with the terms of, any existing employment
agreements), or shall be construed or applied to restrict the ability of
Purchaser or Parent to establish such types and levels of compensation and
benefits as they determine to be appropriate. Parent agrees to cause the
employer to honor the existing employment agreements that are set forth on the
appropriate schedule of the Merger Agreement.
Options and Warrants. The Merger Agreement provides that, as soon as
practicable following the date of the Merger Agreement, the Company Board shall:
(i) adjust the terms of the Company's Stock Option Plans to provide that, at the
Effective Time of the Merger, each Company Stock Option outstanding immediately
prior to the Effective Time of the Merger shall vest as a consequence of the
Merger and shall be canceled in exchange for a payment from the Company after
the Merger (subject to any applicable withholding taxes) equal to the product of
(1) the total number of Shares subject to such Company Stock Option and (2) the
excess of the Merger Consideration over the exercise price per Share subject to
such Company Stock Option and applicable withholding taxes, payable in cash
immediately following the Effective Time of the Merger, except as otherwise set
forth on the appropriate exhibit in the Merger Agreement; and (ii) except as
provided in Merger Agreement, the Company's Stock Option Plans and any other
plan, program or arrangement providing for the issuance or grant of any other
interest in respect of the capital stock of the Company or any subsidiary shall
terminate as of the Effective Time of the Merger, and the Company shall ensure
that, following the Effective Time of the Merger, no holder of a Company Stock
Option nor any participant in any Stock Option Plan shall have any right
thereunder to acquire equity securities of the Company following the Merger.
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Each outstanding Warrant (each a 'Warrant') governed by the Warrant
Agreement, dated as of August 17, 1994, by and between the Company and American
Bank National Association, as Warrant Agent (the 'Warrant Agreement') shall at
the Effective Time automatically (without any further action of the Company or
the holders thereof) be converted into the right to receive an amount in cash
equal to the difference between the Merger Consideration and the Exercise Price
(as defined in the Warrant Agreement) in accordance with the terms of the
Warrant Agreement.
Interim Operations; Covenants. Pursuant to the Merger Agreement, during
the period from February 28, 1998 to the Effective Time of the Merger, the
Company has agreed that, except as expressly contemplated by the Merger
Agreement, the Company shall, and shall cause its Subsidiaries to, act and carry
on their respective businesses in the usual, regular and ordinary course of
business consistent with past practice and use its and their respective
reasonable best efforts to preserve intact their current business organizations,
keep available the services of their current officers and employees and preserve
their relationships with customers, suppliers, licensors, licensees,
advertisers, distributors and others having business dealings with them and to
preserve goodwill. Without limiting the generality of the foregoing, during such
period, the Company shall not, and shall not permit any of its Subsidiaries to:
(a) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock, other than dividends
and distributions by a direct or indirect wholly owned subsidiary of the
Company to its parent in accordance with applicable law;
(b) split, combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities in respect of, in lieu of or
in substitution for shares of its capital stock;
(c) purchase, redeem or otherwise acquire any shares of capital stock
of the Company or any of its Subsidiaries or any other securities thereof
or any rights, warrants or options to acquire any such shares or other
securities, except for the cash-out of Company Stock Options; in full or
partial payment of the exercise price payable by such holder upon exercise
of Company Stock Options outstanding on the date of the Merger Agreement;
(d) authorize for issuance, issue, deliver, sell, pledge or otherwise
encumber any shares of its capital stock or the capital stock of any of its
Subsidiaries, any other voting securities or any securities convertible
into, or any rights, warrants or options to acquire, any such shares,
voting securities or convertible securities or any other securities or
equity equivalents (including without limitation stock appreciation rights)
(other than the issuance of Company Common Stock upon the exercise of
Company Stock Options outstanding on the date of the Merger Agreement and
in accordance with their present terms;
(e) in the case of the Company or any subsidiary, amend its
certificates or articles of incorporation, by-laws or other comparable
charter or organizational documents;
(f) acquire or agree to acquire by merging or consolidating with, or
by purchasing a substantial portion of the stock or assets of, or by any
other manner, any business or any corporation, partnership, joint venture,
association or other business organization;
(g) other than as specifically permitted by the Merger Agreement,
sell, lease, license, mortgage or otherwise encumber or subject to any Lien
or otherwise dispose of any of its properties or assets other than any such
properties or assets the value of which do not exceed two million
individually and ten million in the aggregate, except sales of inventory in
the ordinary course of business consistent with past practice;
(h) incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or
warrants or other rights to acquire any debt securities of the Company or
any of its Subsidiaries, guarantee any debt securities of another person,
enter into any 'keep well' or other agreement to maintain any financial
statement condition of another person or enter into any arrangement having
the economic effect of any of the foregoing, except for short-term
borrowings and for lease obligations, in each case incurred in the ordinary
course of business consistent with past practice;
(i) make any loans, advances or capital contributions to, or
investments in, any other person, other than to the Company or any direct
or indirect wholly owned subsidiary of the Company and other than loans to
employees in the ordinary course of business not to exceed $25,000 in any
one case or $500,000 in the aggregate;
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(j) pay, discharge or satisfy any claims (including claims of
stockholders), liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), except for the payment, discharge or
satisfaction, (a) of liabilities or obligations in the ordinary course of
business consistent with past practice or in accordance with their terms as
in effect on the date hereof or (b) claims settled or compromised to the
extent permitted by the Merger Agreement, or waive, release, grant, or
transfer any rights of material value or modify or change in any material
respect any existing license, lease, Permit, contract or other document,
other than in the ordinary course of business consistent with past
practice;
(k) adopt a plan of merger, consolidation, restructuring,
recapitalization or reorganization or complete a partial liquidation or
resolutions providing for or authorizing such a liquidation or a
dissolution,
(l) enter into any new collective bargaining agreement;
(m) change any material accounting principle used by it;
(n) settle or compromise any litigation (whether or not commenced
prior to the date of the Merger Agreement) other than settlements or
compromises of litigation where the amount paid (after giving effect to
insurance proceeds actually received) in settlement or compromise is not
material to the Company;
(o) make any new capital expenditure or expenditures, other than
capital expenditures not to exceed, in the aggregate, the amounts provided
for capital expenditures in the capital budget of the company provided to
Parent;
(p) except in the ordinary course of business or otherwise permitted
by the Merger Agreement, modify, amend or terminate any contract or
agreement set forth in the Commission Documents filed and publicly
available prior to the date of the Merger Agreement to which the Company or
any Subsidiary is a party or waive, release or assign any material rights
or claims;
(q) enter into any employment agreement with any officer, director or
key employee of the Company or any of its subsidiaries; or hire or agree to
hire any new or additional key employees or officers.
(r) make any Tax election or settle or compromise any material Tax
liability;
(s) voluntarily take, or voluntarily agree to commit to take, any
action that would make any representation or warranty of the Company
contained in Merger Agreement inaccurate in any respect at, or as of any
time prior to, the Effective Time;
(t) authorize any of, or commit or agree to take any of, the foregoing
actions;
(u) except as set forth in the Merger Agreement, adopt or amend
(except as may be required by law) any bonus, profit sharing, compensation,
stock option, pension, retirement, deferred compensation, employment or
other employee benefit plan, agreement, trust, fund or other arrangement
(including any Company Plan) for the benefit or welfare of any employee,
director or former director or employee, or increase the compensation or
fringe benefits of any director, employee or former director or employee or
pay any benefit not required by any existing plan, arrangement or agreement
(other than increases for employees other than officers and directors) in
the ordinary course of business consistent with past practice;
(v) grant any new or modified severance or termination arrangement or
increase or accelerate any benefits payable under its severance or
termination pay policies in effect on the date hereof; or
(w) effectuate a 'plant closing' or 'mass layoff', as those terms are
defined in the Worker Adjustment and Retraining Notification Act of 1988 or
similar state law ('WARN') affecting in whole or in part any site of
employment, facility, operating unit or employee of the Company or any
subsidiary, without the prior written consent of Purchaser or its
affiliates in advance and without complying with the notice requirements
and other provisions of WARN.
Access; Confidentiality. Pursuant to the Merger Agreement, during the
period from February 28, 1998 to the Effective Time of the Merger, the Company
and its subsidiaries shall afford to Parent reasonable access during normal
business hours to its properties, books, contracts, commitments, personnel and
records (including, without limitation, to the extent available, the work papers
of the Company's independent public accountants) and, during such period, the
Company and its subsidiaries shall furnish promptly to Parent (i) a copy of each
report, schedule, registration statement and other document filed by it during
the period from February 28, 1998 to the Effective Time of the Merger pursuant
to the requirements of Federal or state securities laws and (ii) all
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other information concerning its business, properties, financial condition,
operations and personnel as Parent may from time to time reasonably request.
Except as required by law, each of the Company and Parent will hold any
nonpublic information in confidence to the extent required by that certain
Confidentiality Agreement, dated February 17, 1998 by the Company and Parent.
Additional Undertakings; Notification. Pursuant to the Merger Agreement,
Parent, Purchaser and the Company agree to use their reasonable best efforts and
cooperate with one another in promptly (i) determining whether any filings are
required to be made or consents, approvals or authorizations are required to be
obtained under any applicable law or regulation or from any governmental
entities in connection with the Offer or the Merger and (ii) making any such
filings, furnishing information required in connection therewith and timely
seeking to obtain any such consents, approvals, permits or authorizations.
Notwithstanding the foregoing, or any other covenant contained in the Merger
Agreement, in connection with the receipt of any necessary approvals under the
HSR Act, neither the Company nor any of its Subsidiaries shall be entitled to
divest or hold separate or otherwise take or commit to take any action that
limits its freedom of action with respect to, or its ability to retain, the
Company or any of its Subsidiaries or any material portions thereof or any of
the businesses, product lines, properties or assets of the Company or any of its
Subsidiaries, without Parent's prior written consent. The Merger Agreement
provides that the Company and Parent shall make, subject to the condition that
the transactions contemplated in Merger Agreement actually occur, any
undertakings (including undertakings to make divestitures, provided, in any
case, that such divestitures need not themselves be effective or made until
after the transactions contemplated in the Merger Agreement actually occur)
required in order to comply with the antitrust requirements or laws of any
governmental entity, including the HSR Act, in connection with the transactions
contemplated by the Merger Agreement.
The Company on the one hand, and Parent or Purchaser on the other hand,
shall each give prompt notice to the other in the event of: (i) the occurrence
or non-occurrence of any event, the occurrence or non-occurrence of which does
or would be likely to cause (A) any representation or warranty contained in the
Merger Agreement to be untrue or inaccurate in any material respect, or (B) any
covenant, condition or agreement contained in the Merger Agreement not to be
complied with or satisfied; and (ii) any failure of the Company or Parent and
Purchaser to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder.
No Solicitation. Until the termination of the Merger Agreement, neither
the Company nor any of its Subsidiaries, nor any of their respective officers,
directors, employees, representatives, agents or affiliates (including, without
limitation, any investment banker, attorney, or accountant retained by the
Company or any of its subsidiaries) will directly or indirectly initiate,
solicit or knowingly encourage (including by way of furnishing non-public
information or assistance), or take any other action to facilitate knowingly,
any inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to any Transaction Proposal (as defined below), or enter
into or maintain or continue discussions or negotiate with any person or entity
in furtherance of such inquiries or to obtain a Transaction Proposal or agree to
or endorse any Transaction Proposal or authorize or permit any of its officers,
directors or employees or any of its Subsidiaries or any investment banker,
financial advisor, attorney, accountant or other representative retained by it
or any of its Subsidiaries to take any such action.
Notwithstanding the foregoing, if prior to the acceptance for payment of
Shares pursuant to the Offer and after consultation with their financial
advisors and after receipt of advice from independent outside legal counsel, the
Company Board or any Special Committee thereof determines in good faith that
such action is necessary to comply with its fiduciary duties to stockholders
under applicable law, the Company Board or any Special Committee thereof shall
not be prohibited from: (i) furnishing information to or entering into
discussions or negotiations with, any person or entity that makes an unsolicited
written, bona fide Transaction Proposal and in respect of which such person or
entity has all of the necessary funds or commitments therefor if, and only to
the extent that prior to taking such action the Company receives from such
person or entity an executed confidentiality agreement containing terms and
provisions substantially similar to those contained in the Confidentiality
Agreement, (ii) failing to make or withdrawing or modifying its recommendation
referred to in the Merger Agreement if there exists a Transaction Proposal, or
(iii) making to the Company's stockholders any recommendation and related filing
with the Commission as required by Rule 14e-2 and 14d-9 under the Exchange Act,
with respect to any tender offer, or taking any other legally required action
with respect to such
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tender offer (including, without limitation, the making of public disclosures as
may be necessary or reasonably advisable under applicable securities laws).
'Transaction Proposal' shall mean any of the following (other than the
transactions between the Company and Purchaser contemplated by the Offer and the
Merger Agreement) involving the Company or any of its Subsidiaries: (i) any
merger, consolidation, share exchange, recapitalization, business combination,
or other similar transaction; (ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition of 20% or more of the assets of the Company and
its Subsidiaries, taken as a whole, in a single transaction or series of
transactions; (iii) any tender offer or exchange offer for, or the acquisition
(or right to acquire) of 'beneficial ownership' by any person, 'group' or entity
(as such terms are defined under Section 13 (d) of the Exchange Act), of 20% or
more of the outstanding shares of capital stock of the Company or the filing of
a registration statement under the Securities Act in connection therewith; (iv)
any public announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing or
recapitalization, liquidation, dissolution or similar transaction involving the
Company or any of its subsidiaries; or (v) any other transaction the
consummation of which would 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 Buyer of the transactions
contemplated by the Merger Agreement.
Prior to the Company Board withdrawing or modifying its approval or
recommendation of the Offer, the Merger Agreement or the Merger, approving or
recommending a Transaction Proposal, or entering into an agreement with respect
to a Transaction Proposal, the Company Board shall provide Purchaser with a
written notice (a 'Notice of Takeover Proposal') advising Purchaser that the
Company Board has received a Takeover Proposal, specifying the material terms
and conditions of such Transaction Proposal and identifying the person making
such Transaction Proposal (unless prohibited from doing so by the terms
thereof), and neither the Company nor any subsidiary shall enter into an
agreement with respect to a Transaction Proposal until midnight three business
days after the day on which the Notice of Takeover Proposal was given to
Purchaser. In addition, if the Company proposes to enter into an agreement with
respect to any Transaction Proposal, it shall concurrently with entering into
such agreement pay, or cause to be paid, to Purchaser the expenses and fees
referred to under 'Termination Fee' below.
Indemnification. The Merger Agreement provides that, for six years after
the Effective Time of the Merger, the Company and the Parent shall indemnify all
present and former directors or officers of the Company and its Subsidiaries
('Indemnified Parties') against any costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages or liabilities
(collectively, 'Costs') incurred in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of or pertaining to matters existing or occurring at
or prior to the Effective Time of the Merger, whether asserted or claimed prior
to, at or after the Effective Time of the Merger, to the fullest extent as would
have been permitted in their respective articles of organization or by-laws
consistent with applicable law, to the extent such Costs have not been paid for
by insurance and shall, in connection with defending against any action for
which indemnification is available hereunder, reimburse such Indemnified Parties
from time to time upon receipt of sufficient supporting documentation, for any
reasonable costs and expenses reasonably incurred by such Indemnified Parties;
provided that such reimbursement shall be conditioned upon such Indemnified
Parties' agreement promptly to return such amounts to the Company if a court of
competent jurisdiction shall ultimately determine that indemnification of such
Indemnified Parties is prohibited by applicable law. The Company will maintain
for a period of not less than six years from the Effective Time of the Merger
the Company's current directors' and officers, insurance and indemnification
policy (or a policy providing substantially similar coverage) to the extent that
it provides coverage for events occurring prior to the Effective Time of the
Merger for all persons who are directors and officers of the Company on the date
of the Merger Agreement; provided that the Company shall not be required to
spend as an annual premium for such Insurance an amount in excess of 200% of the
annual premium paid for such insurance in effect prior to the date of the Merger
Agreement; and provided further that the Company shall nevertheless be obligated
to provide such coverage as may be obtained for such amount. These provisions of
the Merger Agreement are intended for the benefit of, and shall be enforceable
by, each Indemnified Party and his or her heirs and representatives.
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Termination. The Merger Agreement may be terminated and the transactions
contemplated therein abandoned at any time prior to the Effective Time of the
Merger, whether before or after approval of the matters presented in
connection with the Merger by the stockholders of the Company:
(a) by mutual written consent of Parent and the Company; or
(b) by either Parent or the Company, if any Governmental Entity shall
have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting or if there
shall be in effect any other legal restraint or prohibition preventing or
prohibiting the acceptance for payment of, or payment for, Shares pursuant
to the Offer or the consummation of the Merger and such order, decree,
ruling or other action shall have become final and nonappealable (other
than due to the failure of the party seeking to terminate the Merger
Agreement to perform its obligations under the Merger Agreement required to
be performed at or prior to the Effective Time of the Merger); or
(c) by the Company, if Purchaser shall not have (i) commenced the
Offer within five business days after the initial public announcement of
Purchaser's intention to commence the Offer, or (ii) accepted for payment
any Shares pursuant to the Offer (other than due to the failure of the
Company to perform its obligations under the Merger Agreement) on or prior
to April 30, 1998, or, if any necessary approvals required under the HSR
Act shall not have been obtained by April 30, 1998, on or prior to the
earlier of (A) ten days after receipt of all necessary approvals under the
HSR Act or (B) July 15, 1998; or
(d) by the Company, upon its execution, prior to Parent's or
Purchaser's purchase of Shares pursuant to the Offer, of a binding
agreement with a third party with respect to a Transaction Proposal,
provided that it has complied with all provisions of the Merger Agreement,
including the notice provisions in Merger Agreement, and that it pays the
Termination Fee pursuant to the provisions of the Merger Agreement
described under 'Termination Fee' below; or
(e) by Parent in the event of a material breach or failure to perform
in any material respect by the Company of any representation, warranty,
covenant or other agreement contained in the Merger Agreement which cannot
be or has not been cured within ten days after the giving of written notice
to the Company; or
(f) by the Company, in the event of a material breach or failure to
perform in any material respect by Parent or Purchaser of any
representation, warranty, covenant or other agreement contained in the
Merger Agreement which cannot be or has not been cured within ten days
after the giving of written notice to Parent or Purchaser; or
(g) by Parent, if Purchaser terminates the Offer in accordance with
Section 14 below.
Termination Fee. In addition to any other amounts which may be payable or
become payable pursuant to any other paragraph of the Merger Agreement, the
Company shall, simultaneously with the termination of the Merger Agreement in
any of the circumstances described below, reimburse Purchaser for all
out-of-pocket expenses and fees, in an aggregate amount not to exceed $1,500,000
(including, without limitation, fees payable to all banks, investment banking
firms and other financial institutions, and their respective agents and counsel,
and all fees of counsel, accountants, financial printers, experts and
consultants to Purchaser and its affiliates), whether incurred prior to, on or
after the date hereof, in connection with the Merger and the consummation of all
transactions contemplated by the Merger Agreement, and the financing thereof:
If any person (other than Purchaser or any of its affiliates) shall have
made, proposed, communicated or disclosed a Transaction Proposal in a manner
which is or otherwise becomes public and the Merger Agreement is terminated
pursuant to any of the following provisions:
(i) by the Company pursuant to clause (d) under 'Termination' above;
(ii) by Parent, pursuant to clause (e) under 'Termination' above
other than as a result of a Material Adverse Change with respect to the
Company and other than as a result of facts or circumstances occurring
after the date of the Merger Agreement and not as a result of any action or
inaction by the Company or any of its Subsidiaries in violation of the
Merger Agreement;
(iii) by Parent pursuant to clause (g) under 'Termination' above, if
Purchaser has terminated the Offer as a result of the events set forth in
subparagraghs (c) of Section 14 (other than as a result of a Material
Adverse Effect with respect to the Company and other than as a result of
facts or circumstances occurring
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after the date of the Merger Agreement and not as a result of any action or
inaction by the Company in violation of the Merger Agreement) or in
subparagraphs (d) or (e) of Section 14;
then the Company shall, simultaneously with such termination of the Merger
Agreement, pay Purchaser a fee of $5,000,000 in cash, which amount shall be
payable in same day funds (the 'Termination Fee') .
In addition, (i) if any Person (other than Parent or any of its affiliates)
shall have made, proposed, communicated or disclosed a Transaction Proposal and
the Minimum Condition is not met in the Offer, or (ii) if, prior to any
termination of the Merger Agreement, any person or 'group' (as defined in
Section 13(d)(3) of the Exchange Act) (other than Parent or any of its
affiliates) purchases or otherwise acquires, directly or indirectly, beneficial
ownership of 10% or more of the outstanding voting securities of the Company,
and, if at any time prior to twelve months following the termination of the
Merger Agreement any such person or 'group' consummates a transaction that would
otherwise constitute a Transaction Proposal, there shall be paid to Purchaser
immediately prior to the consummation of such transaction the Termination Fee.
In no event shall the Company be required to pay more than one Termination
Fee pursuant to the Merger Agreement.
STOCK PURCHASE AGREEMENT
The following is a summary of certain provisions of the Stock Purchase
Agreement. This summary does not purport to be complete and is qualified in its
entirety by reference to the complete text of the Stock Purchase Agreement, a
copy of which is filed with the Commission as an Exhibit to the Schedule 14D-1
and is incorporated herein by reference. The Stock Purchase Agreement may be
examined and copies may be obtained at the places and in the manner set forth in
Section 9 of this Offer to Purchase.
Pursuant to the Stock Purchase Agreement, the Major Sellers have agreed to
sell, transfer and deliver to Purchaser upon the expiration of the Offer all
Shares owned by them at a price per share equal to $8.25 or such higher per
Share price as Purchaser may have paid pursuant to the Offer. The Major Sellers
have also agreed in the Stock Purchase Agreement that, at any meeting of the
stockholders of the Company, each Seller shall (a) vote in favor of the Merger
or any other transaction contemplated by the Merger Agreement, (b) vote against
any action or agreement that would result in a breach in any material respect of
any covenant, representation or warranty or any other obligation of the Company
under the Merger Agreement and (c) vote against any action or agreement that
would impede, interfere with or discourage the Offer or the Merger. Each Major
Seller in the Stock Purchase Agreement has granted the Purchaser an irrevocable
proxy and irrevocably appoints the Purchaser or its designees, with full power
of substitution, its attorney and proxy to vote all such Seller's Shares in
respect of any of the matters set forth in clauses (a) through (c) above and in
the manner specified in such clauses, provided, however, that certain conditions
are met. Pursuant to the Stock Purchase Agreement, the Major Sellers have agreed
not to, (i) sell, transfer, pledge, assign or otherwise dispose of their Shares;
(ii) grant any proxies, deposit their Shares into a voting trust or enter into a
voting agreement with respect to any of their Shares; or (iii) solicit,
encourage, participate in or initiate discussions or negotiations with, or
provide information to, any person, other than Parent or any affiliate of
Parent, concerning any merger, sale of assets, sale of shares of capital stock
or similar transactions involving the Company.
The Stock Purchase Agreement, and all rights and obligations of the parties
thereunder, terminate upon the earliest of (i) the purchase of Shares pursuant
to the Offer, (ii) the termination of the Merger Agreement in accordance with
its terms and (iii) twelve months from the date of the Stock Purchase Agreement;
provided that the obligations of the Major Sellers set forth in the next
paragraph survive any such termination
Pursuant to the Stock Purchase Agreement, each Major Seller has agreed that
if, within twelve months following the date of the termination of the Offer, if
such Major Seller sells, transfers or otherwise commits to dispose of any or all
of the Shares owned by such Major Seller to any party other than the Parent or
an affiliate of the Parent (a 'Sale') and realize a Profit (as defined below)
from such Sale, then such Major Seller shall pay to the Parent an amount equal
to the Profit. Such amount shall be paid to the Parent promptly following the
receipt of proceeds by the Seller or its affiliates from such Sale. The term
'Profit' shall mean the excess, if any, of (a) the aggregate consideration
received by the Major Seller or its affiliates in connection with the Sale over
(b) the number of Shares sold, transferred or disposed of in connection with the
Sale multiplied by $8.25 or such higher price paid for Shares in the Offer.
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CONFIDENTIALITY AGREEMENT
The following is a summary of certain provisions of the Confidentiality
Agreement. This summary does not purport to be complete and is qualified in its
entirety by reference to the complete text of the Confidentiality Agreement, a
copy of which is filed with the Commission as Exhibit (c)(3) to the Schedule
14D-1 and is incorporated herein by reference. Capitalized terms not otherwise
defined below shall have the meanings set forth in the Confidentiality
Agreement. The Confidentiality Agreement may be examined and copies may be
obtained at the places and in the manner set forth in Section 9 of this Offer to
Purchase.
The Confidentiality Agreement contains customary provisions pursuant to
which, among other matters, Parent has agreed, subject to certain exceptions, to
keep confidential all nonpublic, confidential or proprietary information
concerning the Company which is furnished to Parent by or on behalf of the
Company (the 'Confidential Information'), and to use the Confidential
Information solely for the purpose of evaluating a possible transaction
involving the Company and Parent and will not be used in any way detrimental to
the Company.
Parent has further agreed that, for a period of two years from the date of
the Confidentiality Agreement, unless Parent receives the prior written consent
of the Company, Parent will not, directly or indirectly, solicit any management
employee of the Company for employment.
In the event that the Parent or its Representatives are requested or
required (by oral questions, interrogatories, requests for information or
documents, subpoena, investigative demand or similar process) to disclose any
Confidential Information, Parent has agreed to give the Company prompt written
notice of such request or requirement so that the Company may seek an
appropriate protective order or other remedy and waive Parent's compliance with
the Confidentiality Agreement. If such protective order is not obtained or the
Company does not waive compliance with the Confidentiality Agreement, Parent
may, upon the advice of legal counsel, disclose Confidential Information to a
tribunal provided, however, that Parent gives the Company notice of the
information to be disclosed as far in advance as practicable and Parent uses
reasonable efforts (at the Company's expense) to obtain reliable assurance that
the information disclosed will be accorded confidential treatment by the
tribunal.
12. PLANS FOR THE COMPANY; OTHER MATTERS
PLANS FOR THE COMPANY
Parent is conducting a detailed review of the Company and its business and
operations with a view towards determining how to optimally realize any
potential synergies which exist between the operations of the Company and those
of Parent. Such review is not expected to be completed until after the
consummation of the Merger, and, following such review, Parent will consider,
what, if any, changes would be desirable in light of the circumstances then
existing.
Assuming the Minimum Condition is satisfied and Purchaser purchases Shares
pursuant to the Offer, Parent intends to promptly exercise its rights under the
Merger Agreement to obtain majority representation on, and control of, the
Company Board. Parent will exercise such rights by causing the Company to elect
to the Company Board one or more of Messrs. Dunlap, Kersh, Fannin, Elson and
Langerman, directors of Parent. Further information with respect to such
directors is contained in Schedule I hereto and in the Schedule14D-9. The Merger
Agreement provides that, promptly after the purchase by Purchaser of the Minimum
Shares pursuant to the Offer, Parent has the right to designate such number of
directors, rounded up to the next whole number, on the Company Board as is equal
to the product of the total number of directors on the Company Board (giving
effect to the directors designated by Parent) multiplied by the ratio of (a) the
number of Shares beneficially owned by Purchaser or any affiliate of Purchaser
(including such Shares which are accepted for payment pursuant to the Offer) to
(b) the total number of Shares then outstanding. See Section 11. The Merger
Agreement provides that the directors of Purchaser and the officers of the
Company at the Effective Time of the Merger will, from and after the Effective
Time, be the initial directors and officers, respectively, of the Surviving
Corporation.
Purchaser or an affiliate of Purchaser may, following the consummation or
termination of the Offer, seek to acquire additional Shares through open market
purchases, privately negotiated transactions, a tender offer or exchange offer
or otherwise, upon such terms and at such prices as it shall determine, which
may be more or less
24
<PAGE>
than the price to be paid pursuant to the Offer. Purchaser and its affiliates
also reserve the right to dispose of any or all Shares acquired by them, subject
to the terms of the Merger Agreement.
Except as disclosed in this Offer to Purchase, and except as may be
effected in connection with the integration of operations referred to above,
neither Parent nor Purchaser has any present plans or proposals that would
result in an extraordinary corporate transaction, such as a merger,
reorganization, liquidation, relocation of operations, or sale or transfer of
assets, involving the Company or its Subsidiaries, or any material changes in
the Company's corporate structure, business or composition of its management or
personnel.
OTHER MATTERS
Stockholder Approval. Under the DGCL, the approval of the Company Board
and the affirmative vote of the holders of a majority of the outstanding Shares
are required to adopt and approve the Merger Agreement and the transactions
contemplated thereby. The Company has represented in the Merger Agreement that
the execution and delivery of the Merger Agreement by the Company and the
consummation by the Company of the transactions contemplated by the Merger
Agreement have been duly authorized by all necessary corporate action on the
part of the Company, subject to the approval of the Merger by the Company's
stockholders in accordance with the DGCL. Therefore, unless the Merger is
consummated pursuant to the short-form merger provisions under the DGCL
described below (in which case no further corporate action by the stockholders
of the Company will be required to complete the Merger), the only remaining
required corporate action of the Company will be the approval of the Merger
Agreement and the transactions contemplated thereby by the affirmative vote of
the holders of a majority of the Shares. In the event that Parent, Purchaser and
Parent's other subsidiaries acquire in the aggregate at least a majority of the
Shares entitled to vote on the approval of the Merger and the Merger Agreement,
they would have the ability to effect the Merger without the affirmative votes
of any other stockholders.
Short-Form Merger. Section 253 of the DGCL provides that, if a corporation
owns at least 90% of the outstanding shares of each class of another
corporation, the corporation holding such stock may merge itself into such
corporation without any action or vote on the part of the board of directors or
the stockholders of such other corporation (a 'short-form merger'). In the event
that Parent, Purchaser and any other subsidiaries of Parent acquire in the
aggregate at least 90% of the outstanding Shares, pursuant to the Offer or
otherwise, then, at the election of Parent, a short-form merger could be
effected without any approval of the Company Board or the stockholders of the
Company, subject to compliance with the provisions of Section 253 of the DGCL.
Even if Parent and Purchaser do not own 90% of the outstanding Shares following
consummation of the Offer, Parent and Purchaser could seek to purchase
additional shares in the open market or otherwise in order to reach the 90%
threshold and employ a short-form merger. The per share consideration paid for
any Shares so acquired may be greater or less than that paid in the Offer.
Parent presently intends to effect a short-form merger if permitted to do so
under the DGCL.
Appraisal Rights. Holders of the Shares do not have appraisal rights in
connection with the Offer. However, if the Merger is consummated, holders of the
Shares at the Effective Time will have certain rights pursuant to the provisions
of Section 262 of the DGCL to dissent and demand appraisal of, and to receive
payment in cash of the fair value of, their Shares. Dissenting stockholders of
the Company 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
Merger) and to receive payment of such fair value in cash, together with a fair
rate of interest thereon, if any. Any such judicial determination of the fair
value of the 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 THE RIGHTS OF DISSENTING STOCKHOLDERS UNDER THE DGCL
DOES NOT PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
STOCKHOLDERS DESIRING TO EXERCISE ANY DISSENTERS' RIGHTS AVAILABLE UNDER THE
DGCL.
THE PRESERVATION AND EXERCISE OF DISSENTERS' RIGHTS REQUIRE STRICT ADHERENCE TO
THE APPLICABLE PROVISIONS OF THE DGCL.
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<PAGE>
Rule 13e-3. The Commission has adopted Rule 13e-3 under the Exchange Act
which is applicable to certain 'going private' transactions and which may under
certain circumstances be applicable to the Merger or another business
combination following the purchase of Shares pursuant to the Offer in which
Purchaser seeks to acquire the remaining Shares not held by it. Purchaser
believes, however, that Rule 13e-3 will not be applicable to the Merger because
it is anticipated that the Merger would be effected within one year following
consummation of the Offer and in the Merger, stockholders will receive the same
price per share paid in the Offer. If Rule 13e-3 were applicable to the Merger,
it would require, among other things, that certain financial information
concerning the Company, and certain information relating to the fairness of the
proposed transaction and the consideration offered to minority stockholders in
such a transaction, be filed with the Commission and disclosed to minority
stockholders prior to consummation of the transaction.
13. DIVIDENDS AND DISTRIBUTIONS
As described above, the Merger Agreement provides that from February 28,
1998 until the Effective Time, without the prior written consent of Parent, the
Company will not (i) declare, set aside or pay any dividends on, or make any
other distributions in respect of, any of its capital stock; (ii) split, combine
or reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock; (iii) purchase, redeem or otherwise acquire any shares of its
capital stock or any other securities or any rights, warrants or options to
acquire any such shares or other securities, except for the cash-out of Company
Stock Options (as provided in the Merger Agreement) in full or partial payment
of the exercise price payable by such holder upon exercise of Company Stock
Options outstanding on the date of the Merger Agreement; or (iv) authorize for
issuance, issue, deliver, sell, pledge or otherwise encumber any shares of its
capital stock, any other voting securities or any securities convertible into,
or any rights, warrants or options to acquire, any such shares, voting
securities or convertible securities or any other securities or equity
equivalents (including without limitation stock appreciation rights) (other than
the issuance of Company Common Stock upon the exercise of Company Stock Options
outstanding on the date of the Merger Agreement and in accordance with their
present terms).
14. CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, and subject to the terms
of the Merger Agreement and any applicable rules and regulations of the
Commission, including Rule 14e-1(c) relating to Purchaser's obligation to pay
for or return tendered shares after termination of the Offer, Parent and
Purchaser shall not be required to accept for payment or pay for any Shares
tendered pursuant to the Offer and may delay acceptance for payment or payment
or may terminate the Offer, if the Minimum Condition is not satisfied by the
Expiration Date, or if any applicable waiting period under the HSR Act has not
expired or terminated by the Expiration Date, or if, at any time after the date
of the Merger Agreement and before the Expiration Date, any of the following
events shall occur and be continuing:
(a) there shall be instituted or pending by any Governmental Entity
any suit, action or proceeding (i) challenging the acquisition by Parent or
Purchaser of any Shares under the Offer, or seeking to restrain or prohibit
the making or consummation of the Offer or the Merger, (ii) seeking to
prohibit or materially limit the ownership or operation by the Company,
Parent or any of Parent's subsidiaries of a material portion of the
business or assets of the Company or Parent and its subsidiaries, taken as
a whole, or to compel the Company or Parent to dispose of or hold separate
any material portion of the business or assets of the Company or Parent and
its subsidiaries, taken as a whole, in each case as a result of the Offer
or the Merger or (iii) seeking to impose material limitations on the
ability of Parent or Purchaser to acquire or hold, or exercise full rights
of ownership of, any Shares to be accepted for payment pursuant to the
Offer including, without limitation, the right to vote such Shares on all
matters properly presented to the stockholders of the Company or (iv)
seeking to prohibit Parent or any of its subsidiaries from effectively
controlling in any material respect any material portion of the business or
operations of the Company;
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable to
the Offer or the Merger, by any Governmental Entity (as defined in the
Merger Agreement) or court, other than the application to the Offer or the
Merger of applicable waiting
26
<PAGE>
periods under the HSR Act, that would result in any of the consequences
referred to in clauses (i) through (iv) of paragraph (a) above;
(c) any of the representations and warranties of the Company contained
in the Merger Agreement shall not be true and correct at and as of the date
of consummation of the Offer (except to the extent such representations and
warranties speak to an earlier date), as if made at and as of the date of
consummation of the Offer, in each case except as contemplated or permitted
by the Merger Agreement and except, in the case of any such breach when
such breach would not have, individually or in the aggregate, a Material
Adverse Effect (as defined in the Merger Agreement) with respect to the
Company or materially affect the ability of the Company to consummate the
Merger or the Purchaser to accept for payment or pay for Shares pursuant to
the Offer;
(d) the Company shall have failed to perform the obligations required
to be performed by it under the Merger Agreement at or prior to the
Expiration Date, including but not limited to its obligations pursuant to
Non-Solicitation section of the Merger Agreement, except for such failures
to perform as have not had or would not individually or in the aggregate,
have a Material Adverse Effect (as defined in the Merger Agreement) with
respect to the Company or materially adversely affect the ability of the
Company to consummate the Merger or the Purchaser to accept for payment or
pay for Shares pursuant to the Offer;
(e) the Company Board or any committee thereof shall have (i)
withdrawn, modified or amended in any respect adverse to Parent or
Purchaser its approval or recommendation of the Offer or the Merger, (ii)
recommended or approved any Transaction Proposal (as defined in the Merger
Agreement) from a person other than Parent, Purchaser or any of their
respective affiliates, (iii) failed to publicly announce, within ten
business days after the occurrence of a Transaction Proposal, its
opposition to such Transaction Proposal, or amended, modified or withdrawn
its opposition to any Transaction Proposal in any manner adverse to Parent
or Purchaser or failed to properly reaffirm its recommendation of the Offer
or the Merger at the Parent's request, or (iv) resolved to do any of the
foregoing;
(f) the Merger Agreement shall have been terminated in accordance with
its terms; or
(g) (i) it shall have been publicly disclosed that any person, entity
or 'group' (as defined in Section 13(d)(3) of the Exchange Act), shall have
acquired beneficial ownership (determined pursuant to Rule 13d-3
promulgated under the Exchange Act) of more than 15% of any class or series
of capital stock of the Company (including the Shares), through the
acquisition of stock, the formation of a group or otherwise, other than
Parent or an affiliate or any person or group existing which on the date of
the Merger Agreement beneficially owned more than 15% of any class or
series of capital stock of the Company or (ii) the Company shall have
entered into a definitive agreement or agreement in principle with any
person with respect to a Transaction Proposal or similar business
combination with the Company or any subsidiary, which in the reasonable
judgment of Parent or Purchaser in any such case, and regardless of the
circumstances giving rise to such condition, makes it inadvisable to
proceed with the Offer and/or with such acceptance for payment;
which in the reasonable judgment of Parent or Purchaser, in any such case, and
regardless of the circumstances giving rise to such condition makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment of
or payments for Shares.
The foregoing conditions are for the sole benefit of the Parent and
Purchaser and may be waived by Parent or Purchaser, in whole or in part at any
time and from time to time, in the reasonable discretion, of Parent or
Purchaser.
15. CERTAIN LEGAL MATTERS
General. Except as described in this Section 15, based on information
provided by the Company, none of the Company, Purchaser or Parent is aware of
any license or regulatory permit that appears to be material to the business of
the Company that might be adversely affected by Purchaser's acquisition of
Shares as contemplated herein or of any approval or other action by a domestic
or foreign governmental, administrative or regulatory agency or authority that
would be required for the acquisition and ownership of the Shares by Purchaser
as contemplated herein. Should any such approval or other action be required,
Purchaser and Parent presently contemplate that such approval or other action
will be sought, except as described below under 'State
27
<PAGE>
Antitakeover Statutes.' While, except as otherwise described in this Offer to
Purchase, Purchaser does not presently intend to delay the acceptance for
payment of, or payment for, Shares tendered pursuant to the Offer pending the
outcome of any such matter, there can be no assurance that any such approval or
other action, if needed, would be obtained or would be obtained without
substantial conditions or that failure to obtain any such approval or other
action might not result in consequences adverse to the Company's business or
that certain parts of the Company's business might not have to be disposed of,
or other substantial conditions complied with, in the event that such approvals
were not obtained or such other actions were not taken or in order to obtain any
such approval or other action. If certain types of adverse action are taken with
respect to the matters discussed below, Purchaser could decline to accept for
payment, or pay for, any Shares tendered. See Section 14 for certain conditions
to the Offer, including conditions with respect to governmental actions.
State Antitakeover Statutes. Section 203 of the DGCL, in general,
prohibits a Delaware corporation such as the Company, from engaging in a
'Business Combination' (defined as a variety of transactions, including mergers)
with an 'Interested Stockholder' (defined generally as a person that is the
beneficial owner of 15% or more of a corporation's outstanding voting stock) for
a period of three years following the date that such person became an Interested
Stockholder unless prior to the date such person became an Interested
Stockholder, the board of directors of the corporation approved either the
Business Combination or the transaction that resulted in the stockholder
becoming an Interested Stockholder. The provisions of Section 203 of the DGCL
are not applicable to any of the transactions contemplated by the Merger
Agreement, since the Company's Certificate of Incorporation provides that
Section 203 is not applicable to the Company. In addition, the Merger Agreement
and the transactions contemplated thereby were approved by the Company Board
prior to the execution thereof.
A number of states have adopted laws and regulations that purport to apply
to attempts to acquire corporations that are incorporated in such states, or
whose business operations have substantial economic effects in such states, or
which have substantial assets, security holders, employees, principal executive
offices or principal places of business in such states. In Edgar v. MITE Corp.,
the Supreme Court of the United States (the 'Supreme Court') invalidated on
constitutional grounds the Illinois Business Takeover statute, which, as a
matter of state securities law, made certain corporate acquisitions more
difficult. However, in 1987, in CTS Corp. v. Dynamics Corp. of America, the
Supreme Court held that the State of Indiana may, as a matter of corporate law
and, in particular, with respect to those aspects of corporate law concerning
corporate governance, constitutionally disqualify a potential acquiror from
voting on the affairs of a target corporation without the prior approval of the
remaining presenting stockholders. The state law before the Supreme Court was by
its terms applicable only to corporations that had a substantial number of
stockholders in the state and were incorporated there.
Parent and Purchaser do not believe that the antitakeover laws and
regulations of any state other than Delaware will by their terms apply to the
Offer, and, except as set forth above with respect to Section 203 of the DGCL,
neither Parent nor Purchaser has currently complied with any state antitakeover
statute or regulation. Purchaser reserves the right to challenge the
applicability or validity of any state law purportedly applicable to the Offer
and nothing in this Offer to Purchase or any action taken in connection with the
Offer is intended as a waiver of such right. If it is asserted that any state
antitakeover statute is applicable to the Offer and an appropriate court does
not determine that it is inapplicable or invalid as applied to the Offer,
Purchaser might be required to file certain information with, or to receive
approvals from, the relevant state authorities, and Purchaser might be unable to
accept for payment or pay for Shares tendered pursuant to the Offer or may be
delayed in consummating the Offer. In such case, Purchaser may not be obligated
to accept for payment, or pay for, any Shares tendered pursuant to the Offer.
See Section 14.
Antitrust. The Offer and the Merger are subject to the HSR Act, which
provides that certain acquisition transactions may not be consummated unless
certain information has been furnished to the Antitrust Division of the
Department of Justice (the 'DOJ') and the Federal Trade Commission (the 'FTC')
and certain waiting period requirements have been satisfied.
Parent and the Company expect to file soon their Notification and Report
Forms with respect to the Offer under the HSR Act. The waiting period under the
HSR Act with respect to the Offer will expire at 11:59 p.m., New York City time,
on the fifteenth day after the date Parent's form is filed, unless early
termination of the waiting period is granted. However, the DOJ or the FTC may
extend the waiting period by requesting additional information or documentary
material from Parent or the Company. If such a request is made, such waiting
period
28
<PAGE>
will expire at 11:59 p.m., New York City time, on the tenth day after
substantial compliance by Parent with such request. Only one extension of the
waiting period pursuant to a request for additional information is authorized by
the HSR Act. Thereafter, such waiting period may be extended only by court order
or with the consent of Parent. In practice, complying with a request for
additional information or material can take a significant amount of time. In
addition, if the DOJ or the FTC raises substantive issues in connection with a
proposed transaction, the parties frequently engage in negotiations with the
relevant governmental agency concerning possible means of addressing those
issues and may agree to delay consummation of the transaction while such
negotiations continue. The Purchaser will not accept for payment Shares tendered
pursuant to the Offer unless and until the waiting period requirements imposed
by the HSR Act with respect to the Offer have been satisfied. See Section 14.
The Merger may not be consummated until 30 calendar days after receipt by
the DOJ and the FTC of the Notification and Report Forms of both Parent and the
Company unless Purchaser acquires 50% or more of the outstanding Shares pursuant
to the Offer (which would be the case if the Minimum Condition were satisfied)
or the 30-day period is earlier terminated by the DOJ and the FTC. Within such
30-day period, the DOJ or the FTC may request additional information or
documentary materials from Parent and/or the Company. The Merger may not be
consummated until 20 days after such requests are substantially complied with by
both Parent and the Company. Thereafter, the waiting periods may be extended
only by court order or with the consent of Parent and the Company.
The FTC and the DOJ frequently scrutinize the legality under the Antitrust
Laws of transactions such as Purchaser's acquisition of Shares pursuant to the
Offer and the Merger. At any time before or after Purchaser's acquisition of
Shares, the DOJ 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 acquisition of Shares pursuant to the Offer or otherwise seeking divestiture
of Shares acquired by Purchaser or divestiture of substantial assets of Parent
or its subsidiaries. Private parties, as well as state governments, may also
bring legal action under the Antitrust Laws under certain circumstances. Based
upon an examination of information provided by the Company relating to the
businesses in which Parent and the Company are engaged, Parent and Purchaser
believe that the acquisition of Shares by Purchaser will not violate the
Antitrust Laws. Nevertheless, there can be no assurance that a challenge to the
Offer or other acquisition of Shares by Purchaser on antitrust grounds will not
be made or, if such a challenge is made, of the result.
As used in this Offer to Purchase, 'Antitrust Laws' shall mean and include
the Sherman Act, as amended, the Clayton Act, as amended, the HSR Act, the
Federal Trade Commission Act, as amended, and all other Federal and state
statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines, and other laws that are designed or intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint of
trade.
Federal Reserve Board Regulations. Regulations G, U and X (the 'Margin
Regulations') of the Federal Reserve Board restrict the extension or maintenance
of credit for the purpose of buying or carrying margin stock, including the
Shares, if the credit is secured directly or indirectly by margin stock. Such
secured credit may not be extended or maintained in an amount that exceeds the
maximum loan value of all the direct and indirect collateral securing the
credit, including margin stock and other collateral. As described in Section 10
of this Offer to Purchase, the financing of the Offer will not be directly or
indirectly secured by the Shares or other securities which constitute margin
stock. Accordingly, all financing for the Offer will be in full compliance with
the Margin Regulations.
16. FEES AND EXPENSES
Morgan Stanley is acting as Dealer Manager in connection with the Offer and
is providing certain financial advisory services to Purchaser and Parent in
connection with the Offer. Parent has agreed to pay Morgan Stanley a fee of
approximately $3,000,000 for such services, 25% of which was payable upon the
execution of the Merger Agreement and the remainder of which is payable upon
consummation of the Merger. Parent has also agreed to reimburse Morgan Stanley
for its out-of-pocket expenses, including the reasonable fees and expenses of
its counsel and any other advisor retained by Morgan Stanley in connection with
its engagement and to indemnify Morgan Stanley and certain related persons
against certain liabilities and expenses, including certain liabilities and
expenses under the federal securities laws.
29
<PAGE>
In the ordinary course of its business, Morgan Stanley engages in
securities trading, market-making and brokerage activities and may, at any time,
hold long or short positions and may trade or otherwise effect transactions in
securities of the Company. As of March 3, 1998, Morgan Stanley had neither a
long nor a short position in Shares held for its own accounts.
The Purchaser and Parent have retained Hill and Knowlton to act as the
Information Agent and The Bank of New York to act as the Depositary in
connection with the Offer. The Information Agent may contact holders of Shares
by personal interview, mail, telephone, telex, telegraph and other methods of
electronic communication and may request brokers, dealers, commercial banks,
trust companies and other nominees to forward the Offer materials to beneficial
holders. The Information Agent and the Depositary will each receive reasonable
and customary compensation for their services. Purchaser has also agreed to
reimburse each such firm for certain reasonable out-of-pocket expenses and to
indemnify each such firm against certain liabilities in connection with their
services, including certain liabilities under federal securities laws.
Except as set forth above, neither Parent nor Purchaser will pay any fees
or commissions to any broker or dealer or other person for making solicitations
or recommendations in connection with the Offer. Brokers, dealers, banks and
trust companies will be reimbursed by Purchaser for customary mailing and
handling expenses incurred by them in forwarding the Offer materials to their
customers.
17. MISCELLANEOUS
The Offer is being made to all holders of Shares other than the Company.
Purchaser is not aware of any jurisdiction in which the making of the Offer or
the tender of Shares in connection therewith would not be in compliance with the
laws of such jurisdiction. In any jurisdiction where the securities, blue sky or
other laws require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on behalf of Purchaser by the Dealer Manager or
one or more registered brokers or dealers licensed under the laws of such
jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PARENT OR PURCHASER NOT CONTAINED HEREIN OR IN THE
LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Purchaser and Parent have filed with the Commission the Schedule 14D-1
pursuant to Rule 14d-3 under the Exchange Act furnishing certain additional
information with respect to the Offer. The Schedule 14D-1 and any amendments
thereto, including exhibits, may be examined and copies may be obtained at the
same places and in the same manner set forth in Section 9 of this Offer to
Purchase (except that they will not be available at the regional offices of the
Commission).
JAVA ACQUISITION CORP.
March 6, 1998
30
<PAGE>
SCHEDULE I
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE
OFFICERS OF PARENT AND PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The following table sets
forth the name and present principal occupation or employment, and material
occupations, positions, offices or employments for the past five years, of each
director and executive officer of Parent. Each such person is a citizen of the
United States of America and the business address of each such person is c/o
Sunbeam Corporation, 1615 South Congress Avenue, Suite 200, Delray Beach, FL
33445. Unless otherwise indicated, each occupation set forth opposite an
individual's name refers to employment with Parent. Unless otherwise indicated,
each such person has held his or her present occupation as set forth below, or
has been an executive officer at Parent, or the organization indicated, for the
past five years.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
Albert J. Dunlap.......................... Director of Parent. Chairman of the Board of Directors and Chief
Executive Officer since July 18, 1996. Chairman and Chief Executive
Officer of Scott Paper Company from April 1994 to December 1995.
Managing Director and Chief Executive Officer of Consolidated Press
Holdings Limited (an Australian media, chemicals and agricultural
operation) from 1991 to 1993.
Russell A. Kersh.......................... Director of Parent. Vice Chairman and Chief Financial Officer since
February 1, 1998. Prior to that date, he served as Executive Vice
President, Finance and Administration since July 22, 1996. Executive
Vice President, Finance and Administration of Scott Paper Company
from June 1994 to December 1995. Served as the Chief Operating
Officer of Addidas America from January 1993 to May 1994.
David C. Fannin........................... Executive Vice President, General Counsel and Secretary since January
1994. Partner in the law firm of Wyatt, Tarrant and Combs from 1979
until 1993.
Donald R. Uzzi............................ Executive Vice President, Consumer Products Worldwide since January,
1997. Senior Vice President, Global Marketing from November 1996 to
January 1997. Mr. Uzzi joined Parent in September 1996 as Vice
President, Marketing and Product Development. Mr. Uzzi served as
President of the Beverage Division of Quaker Oats from January 1993
to July 1996.
Charles M. Elson.......................... Director of Parent. Professor of Law at Stetson University College of
Law since 1990 and serves as Of Counsel to the law firm of Holland &
Knight (since May 1995). Member of the American Law Institute and the
Advisory Council and Commissions on Director Compensation and
Director Professionalism of the National Association of Corporate
Directors. Mr. Elson is Trustee of Talledega College and a Salvatori
Fellow of the Heritage Foundation. Mr. Elson is a director of Circon
Corporation (a medical product manufacturer).
Howard G. Kristol......................... Director of Parent. Partner in the law firm of Reboul, MacMurray,
Hewitt, Maynard & Kristol since 1976.
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
Peter A. Langerman........................ Director of Parent. Chairman of the Board from May 22, 1996 until
July 18, 1996. Senior Vice President of Franklin Mutual Advisers,
Inc., a registered investment advisor and a wholly owned subsidiary
of Franklin Resources, Inc., a diversified financial services
organization, since November 1996. Senior Vice President of Heine
Securities Corporation, an investment advisory service company, from
1986 to November 1996. Mr. Langerman has been a director of Franklin
Mutual Series Fund Inc. (previously Mutual Series Fund Inc.) since
1988 and a director of Metallurg Inc. (a metal and related materials
manufacturer) since 1977.
William T. Rutter......................... Director of Parent. Senior Vice President/Managing Director, Private
Banking, First Union National Bank of Florida, since 1986.
Faith Whittlesey.......................... Director of Parent. Mrs. Whittlesey has served as the Chief Executive
Officer of the American Swiss Foundation, a charitable and
educational foundation, since 1991. She is a member of the Board of
Directors of Valassis Communications, Inc.
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER. The following table sets
forth the name and present principal occupation or employment, and material
occupations, positions, offices or employments for the past five years, of each
director and executive officer of Purchaser. Each such person is a citizen of
the United States of America and the business address of each such person is c/o
Sunbeam Corporation, 1615 South Congress Avenue, Suite 200, Delray Beach, FL
33445. Unless otherwise indicated, each such person has held his or her present
occupation as set forth below, or has been an executive officer at Parent, or
the organization indicated, for the past five years.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
Albert J. Dunlap.......................... Director, Chairman of the Board of Directors, Chief Executive Officer
and President of Purchaser. See Part 1 of this Schedule I.
Russell A. Kersh.......................... Director, Chief Financial Officer and Treasurer of Purchaser. See
Part 1 of this Schedule I.
David C. Fannin........................... Director, Executive Vice President, General Counsel and Secretary of
Purchaser. See Part 1 of this Schedule I.
</TABLE>
I-2
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each stockholder
of the Company or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary, at one of the addresses set forth below:
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT COURIER:
(for Eligible Institutions Only)
(212) 815-6213
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
FOR CONFIRMATION TELEPHONE:
(800) 507-9357
</TABLE>
Any questions or requests for assistance or additional copies of this Offer
to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and
the Guidelines for Certification of Taxpayer Identification on Substitute Form
W-9 may be directed to the Information Agent or the Dealer Manager at the
address and telephone numbers set forth below. Stockholders may also contact
their broker, dealer, commercial bank or trust company for assistance concerning
the Offer.
The Information Agent for the Offer is:
HILL & KNOWLTON
466 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(800) 755-3002
The Dealer Manager for the Offer is:
MORGAN STANLEY & CO.
INCORPORATED
1585 BROADWAY
NEW YORK, NY 10036
(212) 761-6094 (CALL COLLECT)
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
SIGNATURE BRANDS USA, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED MARCH 6, 1998
OF
JAVA ACQUISITION CORP.,
A WHOLLY OWNED INDIRECT SUBSIDIARY OF
SUNBEAM CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON THURSDAY, APRIL 2, 1998, UNLESS THE OFFER IS EXTENDED.
SHARES WHICH ARE TENDERED PURSUANT TO THE OFFER MAY BE WITHDRAWN AT ANY
TIME PRIOR TO THE EXPIRATION DATE.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: Facsimile Transmission: By Hand or Overnight Courier:
Tender & Exchange Department (for eligible institutions only) Tender & Exchange Department
P.O. Box 11248 (212) 815-6213 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
For Confirmation Telephone:
(800) 507-9357
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA FACSIMILE TO A NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
THE INSTRUCTIONS CONTAINED WITHIN THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used by stockholders of Signature Brands
USA, Inc. if certificates for Shares (as such term is defined below) are to be
forwarded herewith or, unless an Agent's message (as defined in Instruction 2
below) is utilized, if delivery of Shares is to be made by book-entry transfer
to an account maintained by the Depositary at a Book-Entry Transfer Facility (as
defined in and pursuant to the procedures set forth in Section 3 of the Offer to
Purchase). Stockholders who deliver Shares by book-entry transfer are referred
to herein as 'Book-Entry Stockholders' and other stockholders who deliver shares
are referred to herein as 'Certificate Stockholders.'
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver either the certificates for, or a Book-Entry Confirmation (as
defined in Section 3 of the Offer to Purchase) with respect to, their Shares and
all other documents required hereby to the Depositary prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase) must tender their Shares
pursuant to the guaranteed delivery procedures set forth in Section 3 of the
Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY
TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<PAGE>
DESCRIPTION OF SHARES TENDERED
<TABLE>
<CAPTION>
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARES TENDERED
APPEAR(S) ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
TOTAL NUMBER OF
SHARES
SHARE REPRESENTED BY NUMBER OF
CERTIFICATE SHARE SHARES
NUMBER(S)(1) CERTIFICATE(S) TENDERED(2)
<S> <C> <C> <C>
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
TOTAL SHARES
-------------------------------------------------
</TABLE>
(1) Need not be completed by Book-Entry Stockholders.
(2) Unless otherwise indicated, it will be assumed that all Shares represented
by Share Certificates delivered to the Depositary are being tendered
hereby. See Instruction 4.
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN A BOOK-ENTRY TRANSFER FACILITY
MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution:
---------------------------------------------
Check Box of Applicable Book-Entry Transfer Facility:
/ / The Depository Trust Company
/ / Philadelphia Depository Trust Company
Account Number:
-------------------------------------------------------------
Transaction Code Number:
----------------------------------------------------
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Owner(s):
------------------------------------------------
Window Ticket Number (if any):
-------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
----------------------------
Name of Institution which Guaranteed Delivery:
---------------------------------
If delivered by Book-Entry Transfer, check box of Applicable Book-Entry Transfer
Facility:
/ / The Depository Trust Company
/ / Philadelphia Depository Trust Company
Account Number:
----------------------------------------------------------------
Transaction Code Number:
-------------------------------------------------------
2
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Java Acquisition Corp., a Delaware
corporation ('Purchaser') and a wholly owned indirect subsidiary of Sunbeam
Corporation, a Delaware corporation ('Parent'), the above-described shares of
common stock, par value $.01 per share (the 'Shares'), of Signature Brands USA,
Inc., a Delaware corporation (the 'Company'), pursuant to Purchaser's offer to
purchase all of the outstanding Shares at a price of $8.25 per Share, net to the
seller in cash, without interest thereon (the 'Offer Price') upon the terms and
subject to the conditions set forth in the Offer to Purchase dated March 6,
1998, and in this Letter of Transmittal (which, together with any amendments or
supplements thereto or hereto, collectively constitute the 'Offer'). The
undersigned understands that Purchaser reserves the right to transfer or assign,
in whole at any time, or in part from time to time, to one or more of its
affiliates, the right to purchase all or any portion of the Shares tendered
pursuant to the Offer, but any such transfer or assignment will not relieve
Purchaser of its obligations under the Offer and will in no way prejudice the
rights of tendering stockholders to receive payment for Shares validly tendered
and accepted for payment pursuant to the Offer. Receipt of the Offer is hereby
acknowledged.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of February 28, 1998 (the 'Merger Agreement'), by and among Parent, Purchaser
and the Company.
Upon the terms and subject to the conditions of the Offer (and if the Offer
is extended or amended, the terms of any such extension or amendment), subject
to, and effective upon, acceptance for payment of, and payment for, the Shares
tendered herewith in accordance with the terms of the Offer, the undersigned
hereby sells, assigns and transfers to, or upon the order of, Purchaser all
right, title and interest in and to all the Shares that are being tendered
hereby (and any and all non-cash dividends, distributions, rights, other Shares
or other securities issued or issuable in respect thereof on or after February
28, 1998 (collectively, 'Distributions')) and irrevocably constitutes and
appoints the Depositary the true and lawful Agent and attorney-in-fact of the
undersigned with respect to such Shares (and all Distributions), with full power
of substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (i) deliver certificates for such Shares (and any
and all Distributions), or transfer ownership of such Shares (and any and all
Distributions) on the account books maintained by any of the Book-Entry Transfer
Facilities, together, in any such case, with all accompanying evidences of
transfer and authenticity, to or upon the order of Purchaser, (ii) present such
Shares (and any and all Distributions) for transfer on the books of the Company,
and (iii) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Shares (and any and all Distributions), all in accordance with
the terms of the Offer.
By executing this Letter of Transmittal, the undersigned hereby irrevocably
appoints Albert J. Dunlap, Russell A. Kersh and David C. Fannin, in their
respective capacities as officers of Purchaser, and any individual who shall
thereafter succeed to any such office of Purchaser, and each of them, the
attorneys-in-fact and proxies of the undersigned, each with full power of
substitution, to vote at any annual or special meeting of the Company's
stockholders or any adjournment or postponement thereof or otherwise in such
manner as each such attorney-in-fact and proxy or his substitute shall in his
sole discretion deem proper with respect to, to execute any written consent
concerning any matter as each such attorney-in-fact and proxy or his substitute
shall in his sole discretion deem proper with respect to, and to otherwise act
as each such attorney-in-fact and proxy or his substitute shall in his sole
discretion deem proper with respect to, all of the Shares (and any and all
Distributions) tendered hereby and accepted for payment by Purchaser. This
appointment will be effective if and when, and only to the extent that,
Purchaser accepts such Shares for payment pursuant to the Offer. This power of
attorney and proxy are irrevocable and are granted in consideration of the
acceptance for payment of such Shares in accordance with the terms of the Offer.
Such acceptance for payment shall, without further action, revoke any prior
powers of attorney and proxies granted by the undersigned at any time with
respect to such Shares (and any and all Distributions), and no subsequent powers
of attorney, proxies, consents or revocations may be given by the undersigned
with respect thereto (and, if given, will not be deemed effective). Purchaser
reserves the right to require that, in order for Shares or other securities to
be deemed validly tendered, immediately upon Purchaser's acceptance for payment
of such Shares, Purchaser must be able to exercise full voting, consent and
other rights with respect to such Shares (and any and all Distributions),
including voting at any meeting of the Company's stockholders.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and all Distributions, that the undersigned owns the Shares tendered
hereby within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended (the 'Exchange Act'), that the tender of the
tendered Shares complies with Rule 14e-4 under the Exchange Act, and that when
the same are accepted for payment by Purchaser, Purchaser will acquire good,
marketable and unencumbered title thereto and to all Distributions, free and
clear of all liens, restrictions, charges and encumbrances and the same will not
be subject to any adverse claims. The undersigned will, upon request, execute
and deliver any additional documents deemed by the Depositary or Purchaser to be
necessary or desirable to complete the sale, assignment and transfer of the
Shares tendered hereby and all Distributions. In addition, the undersigned shall
remit and transfer promptly to the Depositary for the account of Purchaser all
Distributions in respect of the Shares tendered hereby, accompanied by
appropriate documentation of transfer, and, pending such remittance and transfer
or appropriate assurance thereof, Purchaser shall be entitled to all rights and
privileges as owner of each such Distribution and may withhold the entire
purchase price of the Shares tendered hereby or deduct from such purchase price
the amount or value of such Distribution as determined by Purchaser in its sole
discretion.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, executors, administrators, personal
representatives, trustees in bankruptcy, successors and assigns of the
undersigned. Except as stated in the Offer, this tender is irrevocable.
The undersigned understands that the valid tender of Shares pursuant to any
one of the procedures described in Section 3 of the Offer to Purchase and in the
Instructions hereto will constitute a binding agreement between the undersigned
and Purchaser upon the terms and subject to the conditions of the Offer (and if
the Offer is extended or amended, the terms or conditions of any such extension
or amendment). Without limiting the foregoing, if the price to be paid in the
Offer is amended in accordance with the Merger Agreement, the price to be paid
to the undersigned will be the amended price notwithstanding the fact that a
different price is stated in this Letter of Transmittal. The undersigned
recognizes that under certain circumstances set forth in the Offer to Purchase,
Purchaser may not be required to accept for payment any of the Shares tendered
hereby.
Unless otherwise indicated under 'Special Payment Instructions,' please
issue the check for the purchase price of all Shares purchased and/or return any
certificates for Shares not tendered or accepted for payment in the name(s) of
the registered holder(s) appearing above under 'Description of Shares Tendered.'
Similarly, unless otherwise indicated under 'Special Delivery Instructions,'
please mail the check for the purchase price of all Shares purchased and/or
return any certificates for Shares not tendered or not accepted for payment (and
any accompanying
3
<PAGE>
documents, as appropriate) to the address(es) of the registered holder(s)
appearing above under 'Description of Shares Tendered.' In the event that the
boxes entitled 'Special Payment Instructions' and 'Special Delivery
Instructions' are both completed, please issue the check for the purchase price
of all Shares purchased and/or return any certificates evidencing Shares not
tendered or not accepted for payment (and any accompanying documents, as
appropriate) in the name(s) of, and deliver such check and/or return any such
certificates (and any accompanying documents, as appropriate) to, the person(s)
so indicated. Unless otherwise indicated herein in the box entitled 'Special
Payment Instructions,' please credit any Shares tendered herewith by book-entry
transfer that are not accepted for payment by crediting the account at the
Book-Entry Transfer Facility designated above. The undersigned recognizes that
Purchaser has no obligation, pursuant to the 'Special Payment Instructions,' to
transfer any Shares from the name of the registered holder thereof if Purchaser
does not accept for payment any of the Shares so tendered.
4
<PAGE>
/ / CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE
BEEN LOST, DESTROYED OR STOLEN AND SEE INSTRUCTION 11.
NUMBER OF SHARES REPRESENTED BY LOST, DESTROYED OR STOLEN CERTIFICATES:
- --------------------------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares accepted for
payment is to be issued in the name of someone other than the undersigned, if
certificates for Shares not tendered or not accepted for payment are to be
issued in the name of someone other than the undersigned or if Shares tendered
hereby and delivered by book- entry transfer that are not accepted for payment
are to be returned by credit to an account maintained at a Book-Entry Transfer
Facility other than the account indicated above.
Issue check and/or Share certificate(s) to:
Name
---------------------------------------------------------------------------
(PLEASE PRINT)
Address
---------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
- --------------------------------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9)
Credit Shares delivered by book-entry transfer and not purchased to the
Book-Entry Transfer Facility account set forth below:
Check appropriate box:
/ / The Depository Trust Company
/ / Philadelphia Depository Trust Company
- --------------------------------------------------------------------------------
(ACCOUNT NUMBER)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates for Shares not tendered or not accepted for
payment and/or the check for the purchase price of Shares accepted for payment
is to be sent to someone other than the undersigned or to the undersigned at an
address other than that shown under 'Description of Shares Tendered.'
Mail check and/or Share certificates to:
Name
---------------------------------------------------------------------------
(PLEASE PRINT)
Address
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
- --------------------------------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9)
5
<PAGE>
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF STOCKHOLDER(S))
Dated: 1998
------------------------------,
(Must be signed by registered holder(s) exactly as name(s) appear(s) on the
Share 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 trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please provide the following information
and see Instruction 5.)
Name(s)
-------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Name of Firm
-------------------------------------------------------------------
Capacity (full title)
----------------------------------------------------------
Address
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number
-------------------------------------------------
Tax Identification or Social Security Number
-----------------------------------
(SEE SUBSTITUTE W-9 ON PAGE 9)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature
-----------------------------------------------------------
Name(s)
------------------------------------------------------------------------
(PLEASE PRINT)
Title
--------------------------------------------------------------------------
Name of Firm
-------------------------------------------------------------------
Address
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number
-------------------------------------------------
6
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS
OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this Section, includes any
participant in any of the Book-Entry Transfer Facilities' systems whose name
appears on a security position listing as the owner of the Shares) of Shares
tendered herewith, unless such registered holder(s) has completed either the box
entitled 'Special Payment Instructions' or the box entitled 'Special Delivery
Instructions' on the Letter of Transmittal or (b) if such Shares are tendered
for the account of a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in the
Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each, 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 SHARES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed by stockholders of the
Company either if Share certificates are to be forwarded herewith or, unless an
Agent's Message is utilized, if delivery of Shares is to be made by book-entry
transfer pursuant to the procedures set forth herein and in Section 3 of the
Offer to Purchase. For a stockholder validly to tender Shares pursuant to the
Offer, either (a) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), together with any required signature guarantees or an
Agent's Message (in connection with book-entry transfer) and any other required
documents, must be received by the Depositary at one of its addresses set forth
herein prior to the Expiration Date and either (i) certificates for tendered
Shares must be received by the Depositary at one of such addresses prior to the
Expiration Date or (ii) Shares must be delivered pursuant to the procedures for
book-entry transfer set forth herein and in Section 3 of the Offer to Purchase
and a Book-Entry Confirmation must be received by the Depositary prior to the
Expiration Date or (b) the tendering stockholder must comply with the guaranteed
delivery procedures set forth herein and in Section 3 of the Offer to Purchase.
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver their certificates and all other required documents to the
Depositary prior to the Expiration Date or who cannot comply with the book-entry
transfer procedures on a timely basis may tender their Shares by properly
completing and duly executing the Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedure set forth herein and in Section 3 of the Offer to
Purchase.
Pursuant to such guaranteed delivery procedures, (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 provided by
Purchaser, must be received by the Depositary prior to the Expiration Date and
(iii) the certificates for all tendered Shares, in proper form for transfer (or
a Book-Entry Confirmation with respect to all tendered Shares), together with a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof), with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message, and any other required documents must
be received by the Depositary 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 is open for business.
The term 'Agent's Message' means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that Purchaser
may enforce such agreement against the participant.
The signatures on this Letter of Transmittal cover the Shares tendered
hereby.
THE METHOD OF DELIVERY OF THE SHARES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. THE 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.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. All tendering stockholders, by executing
this Letter of Transmittal (or facsimile thereof), waive any right to receive
any notice of acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein under 'Description of
Shares Tendered' is inadequate, the number of Shares tendered and the Share
certificate numbers with respect to such Shares should be listed on a separate
signed schedule attached hereto.
4. PARTIAL TENDERS. (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER.) If fewer than all the Shares evidenced by any Share
certificate delivered to the Depositary herewith are to be tendered hereby, fill
in the number of Shares that are to be tendered in the box entitled 'Number of
Shares Tendered.' In any such case, new certificate(s) for the remainder of the
Shares that were evidenced by the old certificates will be sent to the
registered holder, unless otherwise provided in the appropriate box on this
Letter of Transmittal, as soon as practicable after the Expiration Date or the
termination of the Offer. All Shares represented by certificates delivered to
the Depositary will be deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificate(s) without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are held 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 Share certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Purchaser of the authority of such person so to act must be
submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of Share certificates or
separate stock powers are required unless payment or certificates for Shares not
tendered or not accepted for payment are to be issued in the name of a person
other than the registered holder(s). Signatures on any such Share certificates
or stock powers must be guaranteed by an Eligible Institution.
7
<PAGE>
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares evidenced by certificates listed and
transmitted hereby, the Share certificates must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on the Share certificates. Signature(s) on any
such Share certificates or stock powers must be guaranteed by an Eligible
Institution.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, Purchaser will pay all stock transfer taxes with respect to the transfer and
sale of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or if
certificates for Shares not tendered or not accepted for payment are to be
registered in the name of, any person other than the registered holder(s), 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 any stock transfer
taxes (whether imposed on the registered holder(s) or such other person) payable
on account of the transfer to such other person will be deducted from the
purchase price of such Shares purchased unless evidence satisfactory to
Purchaser of the payment of such taxes, or exemption therefrom, is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE CERTIFICATES EVIDENCING THE
SHARES TENDERED HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS; WIRE TRANSFERS. If a check
for the purchase price of any Shares accepted for payment is to be issued in the
name of, and/or Share certificates for Shares not accepted for payment or not
tendered are to be issued in the name of and/or returned to, a person other than
the signer of this Letter of Transmittal or if a check is to be sent, and/or
such certificates are to be returned, to a person other than the signer of this
Letter of Transmittal, or to an address other than that shown above, the
appropriate boxes on this Letter of Transmittal should be completed. Any
stockholder(s) delivering Shares by book-entry transfer may request that Shares
not purchased be credited to such account maintained at a Book-Entry Transfer
Facility as such stockholder(s) may designate in the box entitled 'Special
Payment Instructions.' If no such instructions are given, any such Shares not
purchased will be returned by crediting the account at the Book-Entry Transfer
Facility designated above as the account from which such Shares were delivered.
Purchaser has agreed to arrange to make payments of Shares accepted for payment
by wire transfer for holders of blocks of 45,000 shares or more. Stockholders
holding 45,000 shares or more should contact the Depositary at (800) 507-9357 in
order to complete such arrangements.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance or additional copies of the Offer to Purchase, this Letter of
Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
directed to the Information Agent or the Dealer Manager at their respective
addresses and phone numbers set forth below, or from brokers, dealers,
commercial banks or trust companies.
9. WAIVER OF CONDITIONS. Subject to the Merger Agreement, Purchaser
reserves the absolute right in its sole discretion to waive, at any time or from
time to time, any of the specified conditions of the Offer, in whole or in part,
in the case of any Shares tendered.
10. BACKUP WITHHOLDING. In order to avoid 'backup withholding' of federal
income tax on payments of cash pursuant to the Offer, a stockholder surrendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such stockholder's correct taxpayer identification number ('TIN') on
Substitute Form W-9 in this Letter of Transmittal and certify, under penalties
of perjury, that such TIN is correct and that such stockholder is not subject to
backup withholding.
Backup withholding is not an additional income tax. Rather, the amount of
the backup withholding can be credited against the federal income tax liability
of the person subject to the backup withholding, provided that the required
information is given to the IRS. If backup withholding results in an overpayment
of tax, a refund can be obtained by the stockholder upon filing an income tax
return.
The stockholder is required to give the Depositary the TIN (i.e., social
security number or employer identification number) of the record owner of the
Shares. If the Shares are held in more than one name or are not in the name of
the actual owner, consult the enclosed 'Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9' for additional guidance on which
number to report.
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
stockholder has not been issued a TIN and has applied for a TIN or intends to
apply for a TIN in the near future. If the box in Part 3 is checked, the
stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% on all payments made prior to the time a properly certified TIN is
provided to the Depositary. However, such amounts will be refunded to such
stockholder if a TIN is provided to the Depositary within 60 days.
Certain stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign stockholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See the
enclosed 'Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9' for more instructions.
11. LOST, DESTROYED OR STOLEN SHARE CERTIFICATES. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary by checking the box immediately preceding the
special payment/special delivery instructions and indicating the number of
Shares lost. The stockholder will then be instructed as to the steps that must
be taken in order to replace the Share certificate(s). This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost, destroyed or stolen Share certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF) TOGETHER WITH
ANY REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN
AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE AND EITHER CERTIFICATES FOR TENDERED
SHARES MUST BE RECEIVED BY THE DEPOSITARY OR SHARES MUST BE DELIVERED PURSUANT
TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH CASE PRIOR TO THE EXPIRATION
DATE, OR THE TENDERING STOCKHOLDER MUST COMPLY WITH THE PROCEDURES FOR
GUARANTEED DELIVERY.
IMPORTANT TAX INFORMATION
Under Federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payer) with such
stockholder's correct taxpayer identification number on Substitute Form W-9
below. If such stockholder is an individual, the taxpayer identification number
is his social security number. If a tendering stockholder is subject to backup
withholding, such stockholder must cross out item (2) of the Certification box
on the Substitute Form W-9. If the Depositary is not provided with the correct
taxpayer identification
8
<PAGE>
number, the stockholder may be subject to a $50 penalty imposed by the Internal
Revenue Service. In addition, payments that are made to such stockholder with
respect to Shares purchased pursuant to the Offer may be subject to backup
withholding.
Certain stockholders (including, among others, all corporations, and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that stockholder must submit a statement, signed under penalties of
perjury, attesting to that individual's exempt status. Such statements can be
obtained from the Depositary. Exempt stockholders, other than foreign
individuals, should furnish their TIN, write 'Exempt' on the face of the
Substitute Form W-9 below, and sign, date and return the Substitute Form W-9 to
the Depositary. See the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the stockholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of such stockholder's correct taxpayer
identification number by completing the form contained herein certifying that
the taxpayer identification number provided on Substitute Form W-9 is correct
(or that such stockholder is awaiting a taxpayer identification number).
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares. If
the Shares are in more than one name or are not in the name of the actual owner,
consult the enclosed Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 for additional guidance on which number to report.
If the tendering stockholder has not been issued a TIN and has applied for a
number or intends to apply for a number in the near future, such stockholder
should write 'Applied For' in the space provided for in the TIN in Part 1, and
sign and date the Substitute Form W-9. If 'Applied For' is written in Part I and
the Depositary is not provided with a TIN within 60 days, the Depositary will
withhold 31% on all payments of the purchase price until a TIN is provided to
the Depositary.
9
<PAGE>
PAYOR'S NAME: THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN THE
FORM W-9 THE RIGHT AND CERTIFY BY SIGNING AND --------------------------------------
DEPARTMENT OF THE TREASURY DATING BELOW. Social Security Number
INTERNAL REVENUE SERVICE (If awaiting TIN write 'Applied For')
OR
PAYOR'S REQUEST FOR TAXPAYER
IDENTIFICATION
NUMBER ('TIN')
--------------------------------------
Employer Identification Number
(If awaiting TIN write
'Applied For')
</TABLE>
PART 2--Certificate--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 for 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
(the 'IRS') that I am subject to backup withholding as a result of a failure
to report all interest or dividends, or (c) the IRS has notified me that I
am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have been
notified by the IRS that you are currently subject to backup withholding because
of under-reporting interest or dividends on your tax returns. However, if after
being notified by the IRS that you are subject to backup withholding, you
receive another notification from the IRS that you are no longer subject to
backup withholding, do not cross out such item (2). (Also see instructions in
the enclosed Guidelines).
SIGNATURE DATE , 1998
----------------------------------- ------------------
PART 3--Awaiting TIN / /
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY CASH PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification Number has
not been issued to me, and either (1) I have mailed or delivered an application
to receive a Taxpayer Identification Number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (2) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a Taxpayer Identification Number to the Depositary by the time of
payment, 31% of all reportable payments made to me thereafter will be withheld,
but that such amounts will be refunded to me if I provide a certified Taxpayer
Identification Number to the Depositary within sixty (60) days.
Signature: Date: , 1998
----------------------------------- -----------------
10
<PAGE>
Questions and requests for assistance or additional copies of the Offer to
Purchase, this Letter of Transmittal and other tender offer materials may be
directed to the Information Agent or the Dealer Manager at their respective
addresses and telephone numbers set forth below:
The Information Agent for the Offer is:
HILL & KNOWLTON
466 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(800) 755-3002
The Dealer Manager for the Offer is:
MORGAN STANLEY & CO.
INCORPORATED
1585 BROADWAY
NEW YORK, NY 10036
11
<PAGE>
EXHIBIT (A)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
SIGNATURE BRANDS USA, INC.
TO
JAVA ACQUISITION CORP.
A WHOLLY OWNED INDIRECT SUBSIDIARY OF
SUNBEAM CORPORATION
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or a form substantially equivalent
hereto, must be used to accept the Offer (as defined below) if certificates
representing shares of Common Stock, par value $.01 per share (the 'Shares'), of
Signature Brands USA, Inc., a Delaware corporation, are not immediately
available, if the procedure for book-entry transfer cannot be completed prior to
the Expiration Date (as defined in Section 1 of the Offer to Purchase), or if
time will not permit all required documents to reach the Depositary prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase). Such form
may be delivered by hand, transmitted by facsimile transmission or mailed to the
Depositary. See Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: Facsimile Transmission: By Hand or Overnight Courier:
Tender & Exchange Department (for eligible Tender & Exchange Department
P.O. Box 11248 institutions only) 101 Barclay Street
Church Street Station (212) 815-6213 Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
For Confirmation Telephone:
</TABLE> (800) 507-9357
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION
UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Java Acquisition Corp., a Delaware
corporation ('Purchaser') and a wholly owned indirect subsidiary of Sunbeam
Corporation, a Delaware corporation, upon the terms and subject to the
conditions set forth in Purchaser's Offer to Purchase dated March 6, 1998 and
the related Letter of Transmittal (which, together with any amendments or
supplements thereto, constitute the 'Offer'), receipt of which is hereby
acknowledged, the number of shares set forth below of common stock, par value
$.01 per share (the 'Shares'), of Signature Brands USA, Inc., a Delaware
corporation, pursuant to the guaranteed delivery procedures set forth in Section
3 of the Offer to Purchase.
Number of Shares:
--------------------------------------------------------------
Certificate Nos. (if available):
-----------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Check one box if Shares will be tendered by book-entry transfer:
/ / The Depository Trust Company
/ / Philadelphia Depository Trust Company
Account Number:
----------------------------------------------------------------
Dated: , 1998
-------------------------------------------------------------------
Name(s) of Record Holder(s):
---------------------------------------------------
-------------------------------------------------------------------------------
Please Print
Address(es):
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Zip Code
Area Code and Tel. No.:
--------------------------------------------------------
- --------------------------------------------------------------------------------
Signature(s):
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program, guarantees to deliver to the Depositary
either certificates representing the Shares tendered hereby, in proper form for
transfer, or confirmation of book-entry transfer of such Shares into the
Depositary's accounts at The Depository Trust Company or the Philadelphia
Depository Trust Company, in each case with delivery of a properly completed and
duly executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or an Agent's Message, and any other documents required by
the Letter of Transmittal, within three trading days (as defined in the Offer to
Purchase) after the date hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
Name of Firm:
------------------------------------------------------------------
Address:
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
Zip Code
Area Code and
Tel. No.:
----------------------------------------------------------------------
- --------------------------------------------------------------------------------
Authorized Signature
Name:
--------------------------------------------------------------------------
Please Print
Title:
--------------------------------------------------------------------------
Date: , 1998
--------------------------------------------------------------------
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES SHOULD
BE SENT ONLY WITH YOUR LETTER OF TRANSMITTAL.
2
<PAGE>
Exhibit 99.(a)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SIGNATURE BRANDS USA, INC.
AT
$8.25 NET PER SHARE
BY
JAVA ACQUISITION CORP.,
A WHOLLY OWNED INDIRECT SUBSIDIARY OF
SUNBEAM CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME,
ON THURSDAY, APRIL 2, 1998, UNLESS THE OFFER IS EXTENDED. SHARES WHICH ARE
TENDERED PURSUANT TO THE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR
TO THE EXPIRATION DATE.
March 6, 1998
To Brokers, Dealers, Commercial Banks,
Trust Companies And Other Nominees:
We have been appointed by Java Acquisition Corp., a Delaware corporation
('Purchaser') and a wholly owned indirect subsidiary of Sunbeam Corporation, a
Delaware corporation ('Parent'), to act as Dealer Manager in connection with
Purchaser's offer to purchase all outstanding shares of common stock, par value
$.01 per share (the 'Shares'), of Signature Brands USA, Inc., a Delaware
corporation (the'Company'), at $8.25 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 6, 1998 (the 'Offer to Purchase') and in the related Letter of Transmittal
(which, together with any amendments or supplements thereto, constitute the
'Offer') enclosed herewith. Please furnish copies of the enclosed materials to
those of your clients for whose accounts you hold Shares registered in your name
or in the name of your nominee.
The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the Expiration Date (as defined in the Offer
to Purchase) that number of Shares which constitutes at least 51% of the Shares
outstanding. The Offer is also subject to the other terms and conditions
contained in the Offer to Purchase.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
1. Offer to Purchase dated March 6, 1998;
2. Letter of Transmittal for your use in accepting the Offer and
tendering Shares and for the information of your clients;
3. Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Shares and all other required documents cannot be
delivered to the Depositary, or if the procedures for book-entry transfer
cannot be completed, by the Expiration Date (as defined in the Offer to
Purchase);
4. A letter which may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominee, with
space provided for obtaining such clients' instructions with regard to the
Offer;
5. A letter to stockholders of the Company from Meeta Vyas, Vice
Chairman and Chief Executive Officer of the Company, together with a
Solicitation/Recommendation Statement on Schedule 14D-9 dated March 6,
1998, which has been filed by the Company with the Securities and Exchange
Commission;
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. A return envelope addressed to the Depositary.
<PAGE>
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will accept for payment and pay for Shares which are
validly tendered prior to the Expiration Date and not theretofore properly
withdrawn when, as and if Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance of such Shares for payment pursuant to the
Offer. Payment for Shares purchased pursuant to the Offer will in all cases be
made only after timely receipt by the Depositary of (i) certificates for such
Shares, or timely confirmation of a book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company or the Philadelphia
Depository Trust Company, pursuant to the procedures described in Section 3 of
the Offer to Purchase, (ii) a properly completed and duly executed Letter of
Transmittal (or a properly completed and manually signed facsimile thereof) or
an Agent's Message in connection with a book-entry transfer and (iii) all other
documents required by the Letter of Transmittal.
Purchaser will not pay any fees or commissions to any broker or dealer or
other person (other than the Dealer Manager, the Depositary and the Information
Agent as described in the Offer to Purchase) for soliciting tenders of Shares
pursuant to the Offer. Purchaser will, however, upon request, reimburse brokers,
dealers, commercial banks and trust companies for customary mailing and handling
costs incurred by them in forwarding the enclosed materials to their customers.
Purchaser will pay or cause to be paid all stock transfer taxes applicable
to its purchase of Shares pursuant to the Offer, subject to Instruction 6 of the
Letter of Transmittal.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, APRIL 2, 1998, UNLESS THE OFFER IS EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or an Agent's Message (as defined in the Offer to
Purchase) in connection with a book-entry transfer of Shares, and any other
required documents, should be sent to the Depositary, and certificates
representing the tendered Shares should be delivered or such Shares should be
tendered by book-entry transfer, all in accordance with the Instructions set
forth in the Letter of Transmittal and in 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 or to complete the
procedures for delivery by book-entry transfer prior to the expiration of the
Offer, 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, and additional copies of the enclosed materials may be obtained from, the
Information Agent or the Dealer Manager at their respective addresses and
telephone numbers set forth on the back cover of the Offer to Purchase.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
THE AGENT OF PARENT, PURCHASER, THE COMPANY, THE INFORMATION AGENT, THE
DEPOSITARY, THE DEALER MANAGER OR ANY AFFILIATE OF ANY OF THE FOREGOING, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS
ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
2
<PAGE>
Exhibit 99.(a)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SIGNATURE BRANDS USA, INC.
AT
$8.25 NET PER SHARE IN CASH
BY
JAVA ACQUISITION CORP.,
A WHOLLY OWNED INDIRECT SUBSIDIARY OF
SUNBEAM CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, APRIL 2, 1998, UNLESS THE OFFER IS EXTENDED. SHARES WHICH
ARE TENDERED PURSUANT TO THE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE
EXPIRATION DATE.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated March 6,
1998 and the related Letter of Transmittal (which, together with any amendments
or supplements thereto, collectively constitute the 'Offer') in connection with
the offer by Java Acquisition Corp., a Delaware corporation ('Purchaser'), and a
wholly owned indirect subsidiary of Sunbeam Corporation, a Delaware corporation
('Parent'), to purchase for cash all outstanding shares of common stock, par
value $.01 per share (the 'Shares'), of Signature Brands USA, Inc., a Delaware
corporation (the 'Company'). We are the holder of record of Shares held for your
account. A tender of such Shares can be made only by us as the holder of record
and pursuant to your instructions. The enclosed Letter of Transmittal is
furnished to you for your information only and cannot be used by you to tender
Shares held by us for your account.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer.
Your attention is invited to the following:
1. The offer price is $8.25 per Share, net to you in cash without
interest.
2. The Offer is being made for all outstanding Shares.
3. The Board of Directors of the Company has unanimously approved the
Offer, with one director absent, and determined that the Offer is fair to,
and in the best interest of, the stockholders of the Company and recommends
that stockholders accept the Offer and tender their Shares pursuant to the
Offer.
4. The Offer and withdrawal rights expire at 12:00 Midnight, New York
City time, on Thursday, April 2, 1998, unless the Offer is extended.
5. The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the Expiration of the Offer (as
defined in the Offer to Purchase) that number of Shares which, when added
to Shares beneficially owned by Parent and Purchaser (if any), represents
at least 51% of the Shares outstanding (assuming exercise of all
outstanding options and warrants) on the date Shares are accepted for
payment. The offer is also subject to the other conditions set forth in the
Offer to Purchase.
6. Any stock transfer taxes applicable to the sale of Shares to
Purchaser pursuant to the Offer will be paid by Purchaser, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
Except as disclosed in the Offer to Purchase, Purchaser is not aware of any
state in which the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. In any jurisdiction in
which the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer will be deemed to be made on behalf of
Purchaser by one or more registered brokers or dealers licensed under the laws
of such jurisdiction.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form set forth
on the reverse side of this letter. An envelope to return your instructions to
us is enclosed. If you authorize the tender of your Shares, all such Shares will
be tendered unless otherwise specified on the reverse side of this letter. Your
instructions should be forwarded to us in ample time to permit us to submit a
tender on your behalf prior to the expiration of the Offer.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SIGNATURE BRANDS USA, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated March 6, 1998 and the related Letter of Transmittal in
connection with the Offer by Java Acquisition Corp., a Delaware corporation and
a wholly owned indirect subsidiary of Sunbeam Corporation, a Delaware
corporation, to purchase all outstanding shares of common stock, par value $.01
per share (the 'Shares'), of Signature Brands USA, Inc., a Delaware corporation
(the 'Company').
This will instruct you to tender the number of Shares indicated below (or
if no number is indicated below, all Shares) held by you for the account of the
undersigned, upon the terms and subject to the conditions set forth in the
Offer.
Number of Shares to be Tendered:*
Shares
- ----------------------
Dated: , 1988
------------------ ---------------------------------
---------------------------------
Signature(s)
---------------------------------
---------------------------------
Print Name(s)
---------------------------------
---------------------------------
Address(es)
---------------------------------
Area Code and Telephone Number
---------------------------------
Tax ID or Social Security Number
- ------------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
2
<PAGE>
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.
- ----------------------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ----------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals The actual owner of the account or,
(joint account) if combined funds, any one of the
individuals(2)
3. Husband and wife The actual owner of the account or,
(joint account) if joint funds, either person(2)
4. Custodian account of a minor (Uniform The minor(3)
Gift to Minors Act)
5. Adult and minor The adult or, if the minor is the
(joint account) only contributor, the minor(1)
6. Account in the name of guardian or The ward, minor, or incompetent
committee for a designated ward, person(4)
minor, or incompetent person
7. a. The usual revocable savings trust The grantor-trustee(1)
account (grantor is also trustee)
b. So-called trust account that is The actual owner(1)
not a legal or valid trust under
State law
8. Sole proprietorship account The owner(5)
- ----------------------------------------------------------------
- ----------------------------------------------------------------
GIVE THE EMPLOYER IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ----------------------------------------------------------------
9. A valid trust, estate, or pension The legal entity (Do not furnish the
trust identifying number of the personal
representative or trustee unless the
legal entity itself is not
designated in the account title.)(1)
10. Corporate account The corporation
11. Religious, charitable, or educational The organization
organization account
12. Partnership account held in the name The partnership
of the business
13. Association, club, or other The organization
tax-exempt organization
14. A broker or registered nominee The broker or nominee
15. Account with the Department of The public entity
Agriculture in the name of a public
entity (such as a State or local
government, school district, or
prison) that receives agricultural
program payments
- ----------------------------------------------------------------
(1) List first and circle the name of the legal trust, estate, or pension trust.
(2) List first and circle the name of the person whose number you furnish.
(3) Circle the minor's name and furnish the minor's social security number.
(4) Circle the ward, minor's or incompetent person's name and furnish such
person's social security number.
(5) Show the name of the owner.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
OBTAINING A NUMBER
If you don't have a TIN or you don't know your number, obtain Internal Revenue
Service Form SS-5, Application for Social Security Number Card or Form SS-4,
Application for Employer Identification Number at your local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
o A corporation.
o A financial institution.
o An organization exempt from tax under section 501(a), or an individual
retirement plan.
o The United States or any agency or instrumentality thereof.
o A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
o A foreign government, a political subdivision of a foreign government, or any
agency or instrumentality thereof.
o An international organization or any agency, or instrumentality thereof.
o A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
o A real estate investment trust.
o A common trust fund operated by a bank under section 584(a).
o An exempt charitable remainder trust, or a nonexempt trust described in
section 4947(a)(1).
o An entity registered at all times under the Investment Company Act of 1940.
o A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
o Payments to nonresident aliens subject to withholding under section 1441.
o Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
o Payments of patronage dividends where the amount received is not paid in
money.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
o Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid in
the course of the payer's trade or business and you have not provided your
correct taxpayer identification number to the payer.
o Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
o Payments described in section 6049(b)(5) to non-resident aliens.
o Payments on tax-free covenant bonds under section 1451.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE 'EXEMPT' ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish a
taxpayer identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
properly include any portion of an includible payment for interest, dividends,
or patronage dividends in gross income, such failure will be treated as being
due to negligence and will be subject to a penalty of 5% on any portion of an
under-payment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.-- Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
SUNBEAM ACQUIRES THREE PUBLICLY TRADED CONSUMER
PRODUCTS COMPANIES:
COLEMAN, SIGNATURE BRANDS AND FIRST ALERT
*****Al Dunlap Signs New Three Year Contract*****
Delray Beach, FL, March 2, 1998 -- Sunbeam Corporation (NYSE: SOC) initiated an
aggressive expansion strategy today with the announcement of the acquisitions of
three separate market leading durable consumer product companies. These
transactions will enhance shareholder value by nearly tripling the Company's
annual revenues, expanding its geographic presence, complementing its existing
product lines and leveraging operational synergies. The three transactions will
total approximately $2.5 billion and will be meaningfully accretive to Sunbeam's
earnings within twelve months. The transactions are subject to regulatory
approvals and other customary conditions and are expected to close within the
next two months.
The Coleman Company, Inc. (NYSE: CLN), with 1997 revenues of $1.1 billion is the
global leader in outdoor recreation and hardware products with powerful brands
such as Coleman(R), Powermate(R), Camping Gaz(R) and Eastpak(R). The Company,
based in Wichita, KS, operates 17 manufacturing facilities and employs
approximately 6,000 people around the world. The transaction is valued at
approximately $2.0 billion, consisting of approximately $815 million in Sunbeam
stock and the balance in debt financing. Shareholders of The Coleman Company,
Inc. will receive $6.44 in cash and 0.5677 shares of Sunbeam stock for each
share of Coleman stock.
Signature Brands USA, Inc. (NASDAQ: SIGB), with 1997 revenues of $279 million,
is the North American leader in coffee makers marketed under the Mr. Coffee(R)
brand name and is a leader in consumer health products marketed under the Health
o meter(R) brand. The Company, based in Glenwillow, OH, operates two
manufacturing facilities and employs approximately 1,000 people. The transaction
is valued at approximately $250 million consisting of a cash tender offer of
$8.25 per SIGB share and the assumption of existing debt.
First Alert, Inc. (NASDAQ: ALRT) with 1997 revenues of $187 million, is the
worldwide leader in residential safety equipment, including smoke and carbon
monoxide detectors. The Company, which is based in Aurora, IL, operates two
manufacturing facilities and employs approximately 2,100 people. The transaction
is valued at approximately $175 million consisting of a cash tender offer of
$5.25 per ALRT share and the assumption of existing debt.
Albert J. Dunlap, Sunbeam's chairman and chief executive officer stated, "The
successful turnaround of Sunbeam, including the dramatic improvement of the
underlying business, has provided us with a solid platform for profitable
growth. These three separate transactions represent the next phase of our plan
to create value for Sunbeam's shareholders. We looked at various alternatives to
increase shareholder value. Ultimately we decided there is phenomenal value to
be created in assuming the
<PAGE>
Sunbeam
March 2, 1998
Page 2 of 3
leadership role in consolidating the industries in which we compete. These
acquisitions enable us to accelerate our growth rate by expanding our geographic
presence, entering new product lines and leveraging the strength of dominant
brand names such as Coleman(R), Camping Gaz(R), Eastpak(R), First Alert(R), Mr.
Coffee(R), and Health o meter(R), along with Sunbeam(R), Oster(R) and
Grillmaster(R)."
Mr. Dunlap added, "Our strategy is to become the global leader in the durable
consumer products industry through continued internal growth augmented by
further strategic acquisitions of high quality consumer brands. Our proven track
record coupled with our financial strength will enable us to successfully
execute this strategy."
The Company anticipates initial synergies of approximately $150 million which
will result in a substantial EPS accretion in 1999. A one time charge is
expected in 1998 in order to restructure and consolidate these three companies
into Sunbeam.
Additionally, the Company announced that Chairman and Chief Executive Officer
Albert J. Dunlap, along with Executive Vice Presidents Russell A. Kersh and
David C. Fannin have all renewed their commitment to the Company by signing new
three year employment contracts. Mr. Kersh was named to the new position of vice
chairman of Sunbeam. Mr. Dunlap stated, "I am eager to continue to create
tremendous value for our shareholders by building the leading durable consumer
products company in the world. This new employment agreement will put to rest
any rumors that I would leave the Company."
"This is a fantastic situation for all Sunbeam shareholders giving them the
opportunity to participate in the wealth that Al Dunlap and his team are
building," said Ronald O. Perelman, who will become Sunbeam's second largest
shareholder after the transaction. "Coleman will thrive as part of Sunbeam's
unbeatable family of brands," added Mr. Perelman.
Michael Price, president and chief executive officer of Franklin Mutual Series
Fund, Sunbeam's largest shareholder, praised the transactions and new contracts.
"With the simultaneous acquisitions of these three publicly traded companies,
Sunbeam is launching into a bold new phase as the consolidator in its
industries," Mr. Price said. "Utilizing Al's unique ability to restructure and
reposition companies, the opportunities for operating synergies and incremental
sales growth is substantial. Al's renewed commitment indicates to me that the
best is yet to come for Sunbeam and its shareholders," Mr. Price added.
Morgan Stanley & Co. Incorporated acted as financial advisor to Sunbeam in all
three of the aforementioned transactions.
2
<PAGE>
Sunbeam
March 2, 1998
Page 3 of 3
Sunbeam Corporation is a leading consumer products company that designs,
manufactures and markets, nationally and internationally, a diverse portfolio of
brand name products. The Company's Sunbeam(R) and Oster(R) brands have been
household names for generations, both domestically and abroad, and the Company
is a market leader in many of its product categories.
Cautionary Statements -- Statements contained in this press release, including
statements relating to the Company's expectations regarding anticipated
performance in the future are "forward looking statements," as such term is
defined in the Private Securities Litigation Reform Act of 1995. Actual results
could differ materially from the Company's statements in this release regarding
its expectations, goals, or projected results, due to various factors, including
those set forth in the Company's Cautionary Statements contained in its Form
10-K, filed with the Securities and Exchange Commission on March 31. 1997.
********************
The Company will conduct a conference call on
Monday, March 2, 1998 at 2:00 p.m. EST.
The call in number is (312) 470-0142.
Password: Sunbeam
***************
Please contact:
Media: Investors:
Mari Hope Rich Goudis
Hill & Knowlton Sunbeam Corporation
212-885-0306 561-243-2142
3
<PAGE>
Exhibit (a)(8)
FOR IMMEDIATE RELEASE
- ---------------------
Sunbeam Launches Tender Offers for
Signature Brands USA and First Alert
Del Ray beach, FL, March 9, 1998 -- Sunbeam Corporation (NYSE:SOC) today
announced that it had commenced on Friday, March 6, 1998 cash tender offers for
Signature Brands USA, Inc. (NASDAQ:SIGB) and First Alert, Inc. (NASDAQ:ALRT)
pursuant to merger agreements previously entered into with each company.
The tender offers are being made at a price of $8.25 per share in cash for
Signature Brands and $5.25 per share in cash for First Alert. The offers and
withdrawal rights are scheduled to expire at 12 midnight, New York City time on
Thursday, April 2, 1998, unless the offers are extended by Sunbeam.
Shareholders wishing to accept the offers should tender their shares through The
Bank of New York. Sunbeam has retained Morgan Stanley & Co. Incorporated as its
financial advisor.
The offers are subject to the making of certain anti-trust filings and certain
conditions, including the tender of a majority of the outstanding First Alert
and Signature Brands shares.
This press release is neither an offer to purchase nor a solicitation of an
offer to sell securities. The tender offers are made only through the Offers to
Purchase and related Letters of Transmittal. For information regarding the
pricing, tender and delivery procedure and conditions of the tender offers,
reference is made to the Offers to Purchase and related Letters of Transmittal
and other related documents. Documents can be obtained by contacting Hill and
Knowlton, Inc. the information agent for the tender offers at (800) 755-3002.
For further information please call:
Rich Goudis, Vice President, Investor Relations, Sunbeam Corporation
(561) 243-2143
Donald Quatrella, Hill and Knowlton, Inc.
(212) 885-0447
Investor Services, The Bank of New York
(800) 507-9357
Alexandre J. Fuchs, Morgan Stanley & Co. Incorporated
(212) 761-6094
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
BETWEEN
SUNBEAM CORPORATION
JAVA ACQUISITION CORP.
AND
SIGNATURE BRANDS USA, INC.
DATED AS OF FEBRUARY 28, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I--THE OFFER
1.1 The Offer........................................................................................ 1
1.1.1 General.................................................................................. 1
1.1.2 Securities Law Compliance................................................................ 2
1.1.3 Termination of the Offer................................................................. 2
1.2 Action by The Company............................................................................ 2
1.2.1 Approval and Recommendation of the Board................................................. 2
1.2.2 Securities Law Compliance................................................................ 3
1.2.3 Stockholder Lists........................................................................ 3
1.2.4 Directors................................................................................ 3
ARTICLE II--THE MERGER....................................................................................... 4
2.1 The Merger....................................................................................... 4
2.2 Closing.......................................................................................... 4
2.3 Effective Time of the Merger..................................................................... 5
2.4 Effects of the Merger............................................................................ 5
2.5 Certificate of Incorporation; By--Laws........................................................... 5
2.6 Directors........................................................................................ 5
2.7 Officers......................................................................................... 5
ARTICLE III--EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS................................................................................... 5
3.1 Effect on Capital Stock.......................................................................... 5
3.2 Stock Plans...................................................................................... 6
3.3 Exchange of Certificates......................................................................... 7
ARTICLE IV--REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................................................... 8
4.1 Organization, Standing and Corporate Power....................................................... 8
4.2 Subsidiaries..................................................................................... 8
4.3 Capital Structure................................................................................ 8
4.4 Authority; Noncontravention...................................................................... 9
4.5 SEC Documents; Undisclosed Liabilities........................................................... 10
4.6 Information Supplied............................................................................. 10
4.7 Absence of Certain Changes or Events............................................................. 11
4.8 Litigation; Labor Matters; Compliance with Laws.................................................. 11
4.9 Employee Benefit Plans........................................................................... 12
4.10 Taxes............................................................................................ 13
4.11 Environmental Matters............................................................................ 14
4.12 Material Contracts............................................................................... 15
4.13 Brokers.......................................................................................... 15
4.14 Opinion of Financial Advisor..................................................................... 15
4.15 Board Recommendation............................................................................. 15
4.16 Required Company Vote............................................................................ 15
4.17 State Takeover Statutes.......................................................................... 15
4.18 Intellectual Property............................................................................ 16
4.19 Title to Properties.............................................................................. 16
4.20 Products Liability............................................................................... 16
4.21 Sole Representations............................................................................. 16
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
ARTICLE V--REPRESENTATIONS AND WARRANTIES OF BUYER AND MERGER CO............................................. 17
5.1 Organization, Standing and Corporate Power....................................................... 17
5.2 Authority; Noncontravention...................................................................... 17
5.3 Brokers.......................................................................................... 17
5.4 Offer Documents and Schedule 14D--9.............................................................. 17
5.5 Information Supplied............................................................................. 17
5.6 Sole Representations............................................................................. 18
ARTICLE VI--COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR TO
MERGER..................................................................................................... 18
6.1 Conduct of Business of the Company............................................................... 18
6.2 Changes in Employment Arrangements............................................................... 19
6.3 Severance........................................................................................ 20
6.4 WARN............................................................................................. 20
ARTICLE VII--ADDITIONAL AGREEMENTS........................................................................... 20
7.1 Preparation of Proxy Statement: Stockholder Meeting.............................................. 20
7.2 Access to Information, Confidentiality........................................................... 21
7.3 Additional Undertakings.......................................................................... 21
7.4 Indemnification.................................................................................. 21
7.5 Public Announcements............................................................................. 22
7.6 No Solicitation.................................................................................. 22
7.7 Resignation of Directors......................................................................... 23
7.8 Employee Benefits................................................................................ 23
7.9 Notification of Certain Matters.................................................................. 24
7.10 State Takeover Laws.............................................................................. 24
ARTICLE VIII--CONDITIONS PRECEDENT........................................................................... 24
8.1 Conditions to Each Party's Obligation............................................................ 24
8.2 Condition to Buyer's and Merger Co.'s Obligation................................................. 24
ARTICLE IX--TERMINATION, AMENDMENT AND WAIVER................................................................ 25
9.1 Termination...................................................................................... 25
9.2 Effect of Termination............................................................................ 25
9.3 Amendment........................................................................................ 25
9.4 Extension; Waiver................................................................................ 25
9.5 Procedure for Termination, Amendment, Extension or Waiver........................................ 26
ARTICLE X--PROVISIONS........................................................................................ 26
10.1 Nonsurvival of Representations and Warranties.................................................... 26
10.2 Fees and Expenses................................................................................ 26
10.3 Notices.......................................................................................... 27
10.4 Definitions...................................................................................... 27
10.5 Interpretation................................................................................... 28
10.6 Counterparts..................................................................................... 28
10.7 Entire Agreement; No Third--Party Beneficiaries.................................................. 28
10.8 GOVERNING LAW.................................................................................... 28
10.9 Assignment....................................................................................... 28
10.10 Enforcement...................................................................................... 28
Annex I................................................................................................. I-1
</TABLE>
iii
<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is entered into as of this 28th day of
February, 1998 by and between Sunbeam Corporation, a Delaware corporation (the
'Buyer'), Java Acquisition Corp., a Delaware corporation and wholly-owned
subsidiary of Buyer or other wholly owned subsidiary of Buyer as contemplated
hereby ('MergerCo'), and Signature Brands USA, Inc., a Delaware corporation (the
'Company').
WHEREAS, the respective Boards of Directors of the Company, the Buyer and
MergerCo have determined that the merger of MergerCo with and into the Company
(the 'Merger'), upon the terms and subject to the conditions set forth in this
Agreement, would be advisable and in the best interests of their respective
companies and stockholders, and such Boards of Directors have approved such
Merger, pursuant to which each share of common stock, par value $.01 per share,
of the Company ('Company Common Stock') issued and outstanding immediately prior
to the Effective Time of the Merger (as defined in Section 1.3) will be
converted into the right to receive cash, other than (a) shares of Company
Common Stock owned, directly or indirectly, by the Company or any subsidiary (as
defined in Section 10.4) of the Company, the Buyer or MergerCo and (b)
Dissenting Shares (as defined in Section 3.l(d));
WHEREAS, subject to the terms and conditions of this Agreement and in
furtherance of the Merger, the Buyer will make, or will cause MergerCo to make,
a tender offer (the 'Offer') to acquire any and all shares of Company Common
Stock;
WHEREAS, concurrently with the execution and delivery of this Agreement,
certain stockholders of the Company have entered into a Stock Purchase Agreement
(the 'Stock Purchase Agreement') with Buyer pursuant to which, subject to the
terms and conditions specified therein, Buyer is willing to purchase and such
stockholders are willing to sell certain Shares owned by such stockholders;
WHEREAS, approval of this Agreement requires the vote of a majority in
number of the issued and outstanding shares of Company Common Stock for the
approval thereof (the 'Company Stockholder Approval'); and
WHEREAS, Buyer, MergerCo and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe various terms of and conditions to
the Offer and the Merger;
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
ARTICLE I
THE OFFER
1.1 The Offer.
1.1.1 General. Provided that this Agreement shall not have been terminated
in accordance with Article IX, the Buyer shall commence, or shall cause MergerCo
to commence, the Offer to acquire any and all shares of Company Common Stock for
a cash price per share equal to the Merger Consideration (as defined in Section
3.1(c), (the 'Offer Price')), as promptly as reasonably practicable after the
date hereof, but in no event later than five (5) business days after the initial
public announcement of Offeror's intention to commence the Offer. For purposes
of this Article I, the party which makes the Offer, whether the Buyer or
MergerCo, shall be referred to as the 'Offeror.' Offeror may not accept any
shares of Company Common Stock tendered for purchase in response to the Offer
unless it accepts all such shares that are properly tendered in accordance with
the terms thereof. Acceptance by Offeror of shares of Company Common Stock for
payment pursuant to the Offer shall be irrevocable. The Offer shall be subject:
(i) to the condition that there shall be validly tendered in accordance with the
terms of the Offer prior to the expiration date of the Offer and not withdrawn a
number of shares of Company Common Stock which, together with the shares of
Company Common Stock then owned by the Buyer and MergerCo, represents at least
51% of the total number of outstanding shares of the Company Common Stock,
assuming the exercise of all outstanding options, rights and convertible
securities (if any) and the issuance of all shares of Company Common Stock that
the Company is then obligated to issue (such total
1
<PAGE>
number of outstanding or issuable shares of Company Common Stock being
hereinafter referred to as the 'Fully Diluted Shares') (the 'Minimum Condition')
and (ii) to the other conditions set forth in Annex I attached hereto
(collectively, the 'Offer Conditions'). The Buyer and MergerCo expressly reserve
the right to waive any of the conditions to the Offer, including but not limited
to, the satisfaction of the Minimum Condition. The initial expiration date of
the Offer shall be twenty (20) business days after commencement. Buyer and
MergerCo agree that if all of the Offer Conditions are not satisfied on such
initial expiration date of the Offer then, provided that the Offeror determines,
in its reasonable discretion that all such Conditions are reasonably capable of
being satisfied and subject to SEC rules with respect to extension of time
periods, Offeror shall extend the Offer, without consent of the Company, from
time to time until such Conditions are satisfied or waived; provided, that
Offeror shall not be required to extend the Offer beyond April 30, 1998, unless
any necessary approvals under the HSR Act (as defined herein) shall not have
been received by such date, in which case Offeror shall not be required to
extend the Offer beyond the earlier of (i) ten (10) days following receipt of
such approvals and (ii) June 30, 1998. Buyer and MergerCo agree that upon the
expiration date of the Offer, as the same may be extended in accordance with the
immediately preceding sentence, if the Offer Conditions have been satisfied,
Offeror shall accept the shares of Company Common Stock properly tendered for
purchase. Without the prior written consent of the Company, no change may be
made by Offeror which reduces the maximum number of shares of Company Common
Stock to be purchased in the Offer or which reduces the Offer Price or changes
the form of consideration or changes the Offer Conditions. The Offer Price
shall, subject to reduction for applicable withholding of taxes, be net to the
seller in cash, payable upon the terms and subject to the conditions of the
Offer. Subject to the terms and conditions of the Offer, Offeror shall pay, as
promptly as practicable after expiration of the Offer, for all shares of Company
Common Stock validly tendered and not withdrawn. At or prior to the expiration
of the Offer, Offeror will take all steps necessary to provide its paying agent
any funds necessary to make the payments contemplated by the Offer. Upon the
execution of this Agreement, the Merger Consideration shall be the amount set
forth in Section 3.1(c) payable without interest thereon, and such initial
Merger Consideration shall be adjusted only in accordance with the following
provisions. The Merger Consideration payable in connection with the Offer shall
automatically be adjusted appropriately for any stock dividend, split or any
conversion or reclassification in respect of the Company Common Stock occurring
after the date hereof and prior to the date of consummation of the Offer, which
shall occur only in accordance with the terms of this Agreement. Buyer and
MergerCo shall have the right to increase the Merger Consideration in effect
hereunder at any time, in which case the consideration payable with respect to
the Offer shall also be so increased.
1.1.2 Securities Law Compliance. On the date of commencement of the Offer,
Offeror shall 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 shall contain or shall incorporate
by reference an offer to purchase (the 'Offer to Purchase') and forms of the
related letter of transmittal and any related summary advertisement (the
Schedule 14D-1, the Offer to Purchase and such other documents, together with
all supplements and amendments thereto, being referred to herein collectively as
the 'Offer Documents'). Offeror and the Company agree to promptly correct any
information provided by either of them for use in the Offer Documents which
shall have become false or misleading, and Offeror further agrees to take all
steps necessary to cause the Schedule 14D-1 as so corrected to be filed with the
SEC and the other Offer Documents as so corrected to be disseminated to holders
of shares of the Company Common Stock, in each case as and to the extent
required by applicable federal securities laws. Offeror agrees to provide the
Company with a written copy of any comments it or its counsel may receive from
time to time from the SEC or its staff with respect to the Schedule 14D-1
promptly after receipt of such comments.
1.1.3 Termination of the Offer. Offeror shall not, without the prior
written consent of the Company, (i) terminate the Offer, except in accordance
with the terms of Annex I attached hereto, or (ii) extend the Expiration Date,
except as specifically provided herein, and in no event to a date later than
April 30, 1998 or, if any necessary approvals under the HSR Act shall not have
been received by such date, in no event to a date later than the earlier of (i)
ten (10) days following receipt of such approvals and (ii) June 30, 1998.
1.2 Action by The Company.
1.2.1 Approval and Recommendation of the Board. The Company hereby
approves of and consents to the making of the Offer and represents that (a) the
Board of Directors of the Company, at a meeting duly called and
2
<PAGE>
held on February 28, 1998 has (i) determined that the Merger and the Offer,
taken together, are fair to, and in the best interests of, the Company and the
holders of the Company Common Stock, (ii) advised, authorized and approved this
Agreement and approved the Merger and the other transactions contemplated hereby
(including but not limited to the Offer), (iii) recommended that the
stockholders of the Company accept the Offer and authorize and approve this
Agreement and the transactions contemplated hereby, and (iv) agreed to recommend
that holders of Company Common Stock tender their shares of Company Common Stock
pursuant to the Offer, and (b) Donaldson, Lufkin & Jenrette Securities
Corporation has delivered to the Board an oral opinion on February 28, 1998
which will be confirmed promptly in writing, to the effect that, as of such
date, the consideration to be received by the holders of shares of Company
Common Stock pursuant to the Offer and the Merger, taken together, is fair to
the holders of shares of Company Common Stock from a financial point of view.
Subject to the provisions of Section 7.6 hereof and the other provisions of this
Agreement, the Company hereby consents to the inclusion in the Offer Documents
prepared in connection with the Offer of the recommendation of the Board of
Directors of the Company described in the immediately preceding sentence.
1.2.2 Securities Law Compliance. On the date of commencement of the Offer,
the Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with all amendments and supplements thereto, the
'Schedule 14D-9') containing, subject to the provisions of Section 6.6 hereof
and the other provisions of this Agreement, the recommendation of the Board of
Directors of the Company described in Section 1.2.1 and shall mail the Schedule
14D-9 to the stockholders of the Company. The Schedule 14D-9 will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Company and Offeror agree to correct promptly any information
provided by any of them for use in the Schedule 14D-9 which shall have become
false or misleading, and the Company further agrees to take all steps necessary
to cause the Schedule 14D-9 as so corrected to be filed with the SEC and
disseminated to holders of shares of the Company Common Stock, in each case as
and to the extent required by applicable federal securities laws. Buyer and its
counsel shall be given a reasonable opportunity to review and comment upon the
Schedule 14D-9 and all amendments and supplements thereto prior to their filing
with the SEC or dissemination to stockholders of the Company. The Company agrees
to provide Offeror with a written copy of any comments it or its counsel may
receive from time to time from the SEC or its staff with respect to the Schedule
14D-9, promptly after receipt of such comments.
1.2.3 Stockholder Lists. In connection with the Offer and the Merger, the
Company shall furnish Offeror with mailing labels containing the names and
addresses of all record holders of shares of Company Common Stock and with
security position listings of shares of Company Common Stock held in stock
depositories, each as of a recent date, and of those persons becoming record
holders subsequent to such date. The Company shall furnish Offeror with all such
additional information (including, but not limited to, updated lists of holders
of shares of Company Common Stock and their addresses, mailing labels and lists
of security positions) and such other assistance as Offeror or its agents may
reasonably request in communicating the Offer to the record and beneficial
owners of shares of the Company Common Stock. 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 Offer or the
Merger, Offeror shall hold in confidence the information contained in such
labels, listings and files, shall use such information only in connection with
the Offer and the Merger, and, if this Agreement shall be terminated in
accordance with Section 9.1, shall deliver to the Company all copies of such
information then in its or any of its affiliate's possession.
1.2.4 Directors.
(a) Effective upon the acceptance for payment by Offeror of shares pursuant
to the Offer such that Buyer or MergerCo shall own at least a majority of the
Fully Diluted Shares, the Offeror shall be entitled to designate the number of
Directors, rounded up to the next whole number, on the Company's Board of
Directors that equals the product of (i) the total number of directors on the
Company's Board of Directors (giving effect to the election of any additional
directors pursuant to this Section) and (ii) the percentage that the number of
shares of Company Common Stock owned by Offeror (including shares of Company
Common Stock accepted for payment) bears to the total number of Shares of
Company Common Stock outstanding, and the Company shall take all action
necessary to cause Offeror's designees to be elected or appointed to the
Company's Board of Directors, including, without limitation, increasing the
number of directors, and seeking and accepting resignations of
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incumbent directors. At such times, the Company will use its best efforts to
cause individuals designated by Offeror to constitute the same percentage as
such individuals represent on the Company's Board of Directors of (x) each
committee of the Board (other than any committee of the Board established to
take action under this Agreement), (y) each board of directors of each
Subsidiary of the Company and (z) each committee of each such board. provided;
however, that in the event that Offeror's designees are elected to the Board of
Directors of the Company, until the Effective Time, such Board of Directors
shall have at least two directors who are directors of the Company on the date
of this Agreement and who are not officers of the Company or any of its
subsidiaries (the 'Independent Directors') and; provided further that, in such
event, if the number of Independent Directors shall be reduced below two for any
reason whatsoever, the remaining Independent Director shall designate a person
to fill such vacancy who shall be deemed to be an Independent Director for
purposes of this Agreement or, if no Independent Directors then remain, the
other directors of the Company on the date hereof shall designate two persons to
fill such vacancies who shall not be officers or affiliates of the Company or
any of its Subsidiaries, or officers or affiliates of Buyer or any of its
subsidiaries, and such persons shall be deemed to be Independent Directors for
purposes of this Agreement. Notwithstanding anything in this Agreement to the
contrary, the affirmative vote of the majority of the Independent Directors
shall be required to (i) amend or otherwise modify the Certificate of
Incorporation of the Company, (ii) approve any amendment, modification or waiver
by the Company of any provisions of this Agreement or (iii) approve any other
action by the Company that materially adversely affects the interests of the
stockholders of the Company (other than Buyer or MergerCo) with respect to the
transactions contemplated hereby, including without limitation, any actions
which would constitute a breach by the Company of its representations,
warranties or covenants contained herein. The provisions of this Section
1.2.4(a) are in addition to and shall not limit any rights which the Buyer,
MergerCo or any of their affiliates may have as a holder or beneficial owner of
shares as a matter of law with respect to the election of directors or
otherwise.
(b) The Company's obligations to appoint designees to the Board of
Directors shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder. Subject to applicable law, the Company shall promptly
take all action requested by Offeror necessary to effect any such election,
including mailing to its stockholders the information statement containing the
information required by Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder, and the Company agrees to make such mailing with the
mailing of the Schedule 14D-9 (provided that Offeror shall have provided to the
Company on a timely basis all information required to be included in the
Information Statement with respect to Offeror's designees). In connection with
the foregoing, the Company will promptly, at the option of Offeror, either
increase the size of the Company's Board of Directors and/or obtain the
resignation of such number of its current directors as is necessary to enable
Offeror's designees to be elected or appointed to, and to constitute a majority
of the Company's Board of Directors as provided above. Offeror will supply to
the Company in writing and be solely responsible for any information with
respect to itself and its nominees, officers, directors and affiliates required
by Section 14(f) and Rule 14f-1.
ARTICLE II
THE MERGER
2.1. The Merger. Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with the relevant state statute, MergerCo or
such wholly owned subsidiary of MergerCo shall be merged with and into the
Company at the Effective Time of the Merger (as hereafter defined). Upon the
Effective Time of the Merger, the separate existence of MergerCo or such wholly
owned subsidiary of MergerCo shall cease, and the Company shall continue as the
surviving corporation (the 'Surviving Corporation') and shall continue under the
name Signature Brands USA, Inc. In the event that a wholly owned Subsidiary of
MergerCo rather than MergerCo is merged with and into the Company, references
herein to MergerCo with respect to the Merger shall be deemed to be references
to such wholly owned Subsidiary of MergerCo.
2.2. Closing. Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant to Section
9.1 and subject to the satisfaction or waiver of the conditions set forth in
Article VIII, the closing of the Merger (the 'Closing') will take place at 10:00
a.m. on the second business day after satisfaction or waiver of the conditions
set forth in Article VIII (the 'Closing Date'), at the
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offices of Hutchins, Wheeler & Dittmar, A Professional Corporation, unless
another date, time or place is agreed to in writing by the parties hereto.
2.3. Effective Time of the Merger. On the Closing Date, the Surviving
Corporation shall file a certificate of merger or, if applicable, MergerCo shall
file a certificate of ownership and merger (the 'Certificate of Merger')
executed in accordance with the Delaware General Corporation Law ('DGCL') with
the Delaware Secretary of State and the Merger shall become effective at such
time as the Certificate of Merger is duly filed with the Secretary of State of
the State of Delaware or at such other time as is specified in the Certificate
of Merger as MergerCo and the Company shall agree should be specified in the
Certificate of Merger (the time the Merger becomes effective being the
'Effective Time of the Merger').
2.4. Effects of the Merger. The Merger shall have the effects set forth in
the DGCL.
2.5. Certificate of Incorporation; By-Laws. (a) The Certificate of
Incorporation of MergerCo, as in effect immediately prior to the Effective Time
of the Merger, shall become the Certificate of Incorporation of the Surviving
Corporation except that it shall be amended to change the name of the Surviving
Corporation to Signature Brands USA, Inc. and, as so amended, until thereafter
further amended as provided therein and under the DGCL, it shall be the
Certificate of Incorporation of the Surviving Corporation following the Merger.
(b) The By-laws of MergerCo as in effect at the Effective Time of the
Merger shall be the By-laws of the Company following the Merger until thereafter
changed or amended as provided therein or by applicable law.
2.6. Directors. The directors of MergerCo at the Effective Time of the
Merger shall be the directors of the Company following the Merger, until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.
2.7. Officers. The officers of the Company at the Effective Time of the
Merger shall be the officers of the Company following the Merger, until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS
3.1. Effect on Capital Stock. As of the Effective Time of the Merger, by
virtue of the Merger and without any action on the part of the holder of any
shares of Company Common Stock or any shares of capital stock of MergerCo:
(a) Common Stock of MergerCo. Each share of common stock of MergerCo
issued and outstanding immediately prior to the Effective Time of the Merger
shall be converted into one share of the common stock, par value $.01 per share,
of the Company.
(b) Cancellation of Treasury Stock. Each share of Company Common Stock
that is owned by the Company or by any wholly owned subsidiary of the Company
shall automatically be canceled and retired and shall cease to exist, and no
cash or other consideration shall be delivered or deliverable in exchange
therefor.
(c) Conversion of Company Common Stock. Except as otherwise provided
herein and subject to Section 3.3, each issued and outstanding share of Company
Common Stock, other than shares owned by Buyer, MergerCo or any other direct or
indirect subsidiary of Buyer, the Company or any wholly owned Subsidiary of the
Company (collectively, the 'Excluded Shares'), and other than Dissenting Shares
and treasury stock, shall be converted into the right to receive in cash from
the Company following the Merger an amount equal to $8.25 (the 'Merger
Consideration'), without interest, upon surrender of the certificates formerly
representing such shares pursuant to Section 3.3. The term 'Merger
Consideration' shall mean the per share amount in reference to the consideration
designated on a per share basis, and otherwise shall refer to the aggregate
consideration represented by the per share amount multiplied by the total number
of shares of Company Common Stock then outstanding.
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(d) Dissenting Shares. Shares of Company Common Stock issued and
outstanding immediately prior to the Effective Time of the Merger held by a
holder who has the right to demand payment for and an appraisal of such shares
in accordance with the DGCL (or any successor provision) ('Dissenting Shares')
shall not be converted into the right to receive Merger Consideration unless
such holder fails to perfect or otherwise withdraws, forfeits or loses such
holder's right to such payment or appraisal, if any. If, after the Effective
Time of the Merger, such holder fails to perfect or withdraws, forfeits or loses
any such right to appraisal, each share of such holder shall be treated as a
share that had been converted as of the Effective Time of the Merger into the
right to receive Merger Consideration in accordance with this Section 3.1. The
Company shall give prompt notice to MergerCo of any demands received by the
Company for appraisal of shares of Company Common Stock, and MergerCo shall have
the right to participate in and, at MergerCo's reasonable discretion, to direct
all communications, negotiations and proceedings with respect to such demands.
The Company shall not, except with the prior written consent of MergerCo, make
any payment with respect to, or settle or offer to settle, any such demands.
(e) Cancellation and Retirement of Excluded Shares. Each Excluded Share
issued and outstanding immediately prior to the Effective Time shall, by virtue
of the Merger and without any action on the part of the holder thereof, cease to
be outstanding, shall be canceled and retired without payment of any
consideration therefor and shall cease to exist.
(f) Cancellation and Retirement of Company Common Stock. As of the
Effective Time of the Merger, all shares of Company Common Stock (other than
shares referred to in Section 3.1(b)) issued and outstanding immediately prior
to the Effective Time of the Merger, shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and each holder
of a certificate representing any such shares of Company Common Stock shall, to
the extent such certificate represents such shares, cease to have any rights
with respect thereto, except the right to receive the Merger Consideration
applicable thereto, without interest, upon surrender of such certificate in
accordance with Section 3.3 or the right, if any, to receive payment from the
Surviving Corporation for the 'fair value' of such shares as determined in
accordance with the provisions of Section 262 of the DGCL.
3.2. Stock Plans and Warrants.
(a) As soon as practicable following the date of this Agreement, the Board
of Directors of the Company (or, if appropriate, any committee administering the
Stock Plans (as defined below)) shall adopt such resolutions or take such other
actions as may be required to effect the following:
(i) adjust the terms of all outstanding employee stock options to
purchase shares of Company Common Stock ('Company Stock Options') granted
under the Company's Chief Executive Officer Stock Option Plan, 1997 Stock
Option and Incentive Plans, 1995 Stock Option and Incentive Plan and Second
Amended and Restated 1992 Stock Option Plan (the 'Stock Option Plans') to
provide that, at the Effective Time of the Merger each Company Stock Option
outstanding immediately prior to the Effective Time of the Merger shall
vest as a consequence of the Merger and shall be canceled in exchange for a
payment from the Company after the Merger (subject to any applicable
withholding taxes) equal to the product of (1) the total number of shares
of Company Common Stock subject to such Company Stock Option and (2) the
excess of the Merger Consideration over the exercise price per share of
Company Common Stock subject to such Company Stock Option and applicable
withholding taxes, payable in cash immediately following the Effective Time
of the Merger, except as otherwise set forth on Exhibit 3.2(a)(i); and
(ii) except as provided herein or as otherwise agreed to by the
parties, the Stock Option Plan and any other plan, program or arrangement
providing for the issuance or grant of any other interest in respect of the
capital stock of the Company or any subsidiary shall terminate as of the
Effective Time of the Merger, and the Company shall ensure that, following
the Effective Time of the Merger, no holder of a Company Stock Option nor
any participant in any Stock Option Plan shall have any right thereunder to
acquire equity securities of the Company following the Merger.
(b) Each outstanding Warrant (each a 'Warrant') governed by that
certain Warrant Agreement, dated as of August 17, 1994, by and between the
Company and American Bank National Association, as Warrant Agent (the
'Warrant Agreement'), shall at the Effective Time automatically without any
further action of
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the Company or the holders thereof be converted into the right to receive
an amount equal to the difference between the Merger Consideration and the
Exercise Price (as defined in the Warrant Agreement) in accordance with the
terms of the Warrant Agreement.
(c) The Company hereby represents and warrants that upon taking of the
actions specified above, immediately following the Effective Time of the
Merger, and after giving effect to the payments described in this Section
3.2, no holder of a Company Stock Option nor any participant in any Stock
Option Plan nor the holder of any warrant to purchase Company Common Stock
shall have the right thereunder to acquire equity securities of the
Company, or any other benefit, after the Merger.
3.3. Exchange of Certificates.
(a) Exchange Agent. Prior to the Effective Time of the Merger, Buyer shall
designate a bank or trust company to act as agent for the holders of Company
Common Stock in connection with the Merger (the 'Exchange Agent') (who shall be
reasonably acceptable to the Company) to receive the funds to which holders of
the shares of Company Common Stock are entitled to pursuant to this Article III.
Buyer shall, from time to time, make available to the Exchange Agent funds in
amounts and at times necessary for the payment of the Merger Consideration as
provided herein. Promptly after the Effective Time, the Exchange Agent shall
mail to each record holder, as of the Effective Time, of an outstanding
certificate or certificates which immediately prior to the Effective Time
represented shares of Company Common Stock (the 'Certificates'), a letter of
transmittal and instructions for use in effecting the surrender of the
Certificates for payment therefor (or such other documents as may reasonably be
required in connection with such surrender) in customary form to be agreed by
MergerCo and the Company prior thereto.
(b) Exchange Procedures. (i) After the Effective Time of the Merger, each
holder of an outstanding Certificate or Certificates shall, upon surrender to
the Exchange Agent of such Certificate or Certificates and acceptance thereof by
the Exchange Agent, be entitled to receive the amount of cash into which such
Certificate or Certificates surrendered shall have been converted pursuant to
this Agreement.
(i) After the Effective Time of the Merger, there shall be no further
transfer on the records of the Company or its transfer agent of Certificates,
and if Certificates are presented to the Company for transfer, they shall be
canceled against delivery of cash. If Merger Consideration is to be remitted to
a name other than that in which the Certificate surrendered for exchange is
registered, it shall be a condition of such exchange that the Certificate so
surrendered shall be properly endorsed, with signature guaranteed, or otherwise
in proper form for transfer and that the person requesting such exchange shall
pay to the Company or its transfer agent any transfer or other taxes required or
establish to the satisfaction of the Company or its transfer agent that such tax
has been paid or is not applicable. Until surrendered as contemplated by this
Section 3.3(b), each Certificate shall be deemed at any time after the Effective
Time of the Merger to represent only the right to receive upon such surrender
the Merger Consideration applicable thereto as contemplated by Section 3.1. From
and after the Effective Time, the holders of Certificates evidencing ownership
of the shares outstanding immediately prior to the Effective Time shall cease to
have any rights with respect to such shares, except as otherwise provided for
herein or by applicable law. No interest will be paid or will accrue on any cash
payable as Merger Consideration or in lieu of any fractional shares of Company
Common Stock. The right of any stockholder to receive the Merger Consideration
shall be subject to reduction to reflect any applicable withholding obligation
for Taxes.
(ii) In the event that any Certificate shall have 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 and, if required by Buyer, the
posting by such person of a bond in such amount as Buyer may direct as indemnity
against any claim that may be made against it with respect to such Certificate,
or the provision of other reasonable assurances requested by Buyer, the Exchange
Agent will issue in exchange for such lost, stolen or destroyed Certificate the
Merger Consideration deliverable in respect thereof pursuant to this Agreement.
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(c) No Further Ownership Rights in Company Common Stock Exchanged For
Cash. The Merger Consideration paid upon the surrender for exchange of
Certificates in accordance with the terms of this Article II shall be deemed to
have been issued and paid in full satisfaction of all rights pertaining to such
shares.
(d) Termination of Exchange Fund. Any portion of the Merger Consideration
deposited with the Exchange Agent pursuant to this Section 3.3 (the 'Exchange
Fund') which remains undistributed to the holders of the Certificates for six
months after the Effective Time of the Merger shall be delivered to the Company,
upon demand, and any holders of shares of Company Common Stock prior to the
Merger who have not theretofore complied with this Article II shall thereafter
look only to the Company and only as general creditors thereof for payment of
their claim for cash, if any, to which such holders may be entitled.
(e) No Liability. None of Buyer, MergerCo, the Company or the Exchange
Agent shall be liable to any person in respect of any Merger Consideration from
the Exchange Fund delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
(f) Investment of Exchange Fund. The Exchange Agent shall invest any cash
included in the Exchange Fund, as directed by the Buyer, on a daily basis. Any
interest and other income resulting from such investments shall be paid to the
Buyer.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Buyer and MergerCo as
follows:
4.1 Organization, Standing and Corporate Power. Each of the Company and
each of its Subsidiaries (as defined in Section 4.2) is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated and has the requisite corporate power and authority to carry on its
business as now being conducted. Each of the Company and each of its
Subsidiaries is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so qualified
or licensed (individually or in the aggregate) would not have a Material Adverse
Effect (as defined in Section 10.4) with respect to the Company. Attached as
Section 4.1 of the schedule (the 'Disclosure Schedule') delivered to MergerCo by
the Company at the time of execution of this Agreement are complete and correct
copies of the Amended and Restated Certificate of Incorporation, as amended, and
bylaws, as amended, of the Company. The Company has delivered to MergerCo
complete and correct copies of the articles or certificates of incorporation and
by-laws (or other comparable organizational documents) of each of its
Subsidiaries, in each case as amended to the date of this Agreement.
4.2 Subsidiaries. The only direct or indirect subsidiaries of the Company
are those listed in Section 4.2 of the Disclosure Schedule (the 'Subsidiaries').
All the outstanding shares of capital stock of each such Subsidiary have been
validly issued and are fully paid and nonassessable and are owned (of record and
beneficially) by the Company, by another wholly owned Subsidiary of the Company
or by the Company and another such wholly owned Subsidiary, free and clear of
all pledges, claims, liens, charges, encumbrances and security interests of any
kind or nature whatsoever (collectively, 'Liens'). Except for the ownership
interests set forth in Section 4.2 of the Disclosure Schedule, the Company does
not own, directly or indirectly, any capital stock or other ownership interest
in any corporation, partnership, business association, joint venture or other
entity.
4.3 Capital Structure. The authorized capital stock of the Company
consists of 20,000,000 shares of Company Common Stock, par value $.01 per share.
Subject to any Permitted Changes (as defined in Section 6.1(d)) there were, as
of the close of business on January 16, 1998: (i) 9,174,261 shares of Company
Common Stock issued and outstanding; (ii) no shares of Company Common Stock are
held in the treasury of the Company; (iii) 1,634,853 shares of Company Common
Stock are reserved for issuance upon exercise of outstanding Company Stock
Options (of which options 190,500 shares will be cancelled prior to the
consummation of the Offer); and (iv) 767,200 shares of Company Common Stock
issuable upon exercise of outstanding Warrants (the 'Warrants'). Section 4.3 of
the Disclosure Schedule sets forth the exercise price for the outstanding
Company Stock Options and the Warrants. Except as set forth above or in Section
3.3 of the Disclosure Schedule, no shares of capital stock or other equity
securities of the Company are issued, reserved for
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issuance or outstanding. All outstanding shares of capital stock of the Company
are, and all shares which may be issued pursuant to the Stock Option Plan
including any increases pursuant to existing contractual obligations will be,
when issued, duly authorized, validly issued, fully paid and nonassessable and
not subject to preemptive rights. Except as set forth on Section 4.3 of the
Disclosure Schedule, there are no outstanding bonds, debentures, notes or other
indebtedness or other securities of the Company having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote) on
any matters on which stockholders of the Company may vote. Except as set forth
above, there are no outstanding securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to which the
Company or any of its Subsidiaries is a party or by which any of them is bound
obligating the Company or any of its Subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock or
other equity or voting securities of the Company or of any of its Subsidiaries
or obligating the Company or any of its Subsidiaries to issue, grant, extend or
enter into any such security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking. Other than as disclosed in the most
recent balance sheet of the Company included in the SEC Documents (as defined
below) or as set forth in Section 4.3 of the Disclosure Schedule, no
indebtedness for borrowed money of the Company or its Subsidiaries contains any
restriction upon the incurrence of indebtedness for borrowed money by the
Company or any of its Subsidiaries or restricts the ability of the Company or
any of its Subsidiaries to grant any Liens on its properties or assets. Other
than the Company Stock Options and other than as disclosed in Section 4.3 of the
Disclosure Schedule, (i) there are no outstanding contractual obligations,
commitments, understandings or arrangements of the Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire or make any payment in
respect of any shares of capital stock of the Company or any of its Subsidiaries
and (ii) to the knowledge of the Company, there are no irrevocable proxies with
respect to shares of capital stock of the Company or any subsidiary of the
Company. Section 4.3 of the Disclosure Schedule sets forth the record and, to
the knowledge of the Company, beneficial ownership of, and voting power in
respect of, the capital stock of the Company held by the Company's directors,
officers and stockholders owning five percent (5%) or more of the Company's
outstanding common stock. Except as set forth on Section 4.3 of the Disclosure
Schedule, there are no agreements or arrangements pursuant to which the Company
is or could be required to register shares of Company Common Stock or other
securities under the Securities Act of 1933, as amended (the 'Securities Act')
or other agreements or arrangements with or among any security holders of the
Company with respect to securities of the Company.
4.4 Authority; Noncontravention. The Company has the requisite corporate
and other power and authority to enter into this Agreement and, subject to the
Company Stockholder Approval with respect to the consummation of the Merger, to
consummate the transactions contemplated hereby. The Offer, the execution and
delivery of this Agreement by the Company and the consummation by the Company of
the transactions contemplated hereby and thereby have been duly authorized by
the Company's Board of Directors, which constitutes all necessary corporate
action on the part of the Company, subject, in the case of the Merger, to the
Company Stockholder Approval. This Agreement has been duly executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms. Except
for the Company's credit facility and except as disclosed in Section 4.4 of the
Disclosure Schedule, the execution and delivery of this Agreement does not, and
the consummation of the transactions contemplated by the Offer and this
Agreement and compliance with the provisions hereof will not, conflict with, or
result in (a) any breach or violation of, or default (with or without notice or
lapse of time, or both) under, or right of termination, cancellation,
acceleration or 'put', with respect to any obligation or (b) the loss of a
benefit or other right or (c) the creation of any Lien upon any of the
properties or assets of the Company or any of its Subsidiaries under, (i) the
Certificate of Incorporation, as amended, or By-laws, as amended, of the Company
or the comparable organizational documents of any of its Subsidiaries, (ii) any
loan or credit agreement, note, note purchase agreement, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise
or license applicable to the Company or any of its Subsidiaries or their
respective properties or assets or (iii) subject to the governmental filings and
other matters referred to in the following sentence, any judgment, order,
decree, statute, law, ordinance, rule, regulation or arbitration award
applicable to the Company or any of its Subsidiaries or their respective
properties or assets, other than, in the case of clauses (ii) and (iii), any
such conflicts, breaches, violations, defaults, rights, losses or Liens that
individually or in the aggregate would not have a Material Adverse Effect with
respect to the Company or would not prevent, hinder or materially delay the
ability of the Company and/or MergerCo to consummate the transactions
contemplated by this Agreement if not
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cured or waived by the Closing Date. No consent, approval, order or
authorization of, or registration, declaration or filing with, or notice to, any
Federal, state or local government or any court, administrative agency or
commission or other governmental authority or agency, domestic or foreign (a
'Governmental Entity'), or any other person under any material agreement,
indenture or other instrument to which the Company or any Subsidiary is a party
or to which any of its properties is subject, is required by or with respect to
the Company or any of its Subsidiaries in connection with the execution and
delivery of this Agreement by the Company or the consummation by the Company of
the transactions contemplated hereby, except for (i) the filing of a pre-merger
notification and report form by the Company under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the 'HSR Act'), (ii) the filing
with the SEC of (x) a proxy statement relating to the Company Stockholder
Approval (such proxy statement as amended or supplemented from time to time, the
'Proxy Statement'), and (y) such reports under the Exchange Act as may be
required in connection with the Offer and this Agreement and the transactions
contemplated by this Agreement, (iii) the filing of the Certificate of Merger
with the Secretary of the State of Delaware and appropriate documents with the
relevant authorities of other states in which the Company is qualified to do
business and (iv) such other consents, approvals, orders, authorizations,
registrations, declarations, filings or notices as are set forth in Section 4.4
of the Disclosure Schedule.
4.5 SEC Documents; Undisclosed Liabilities. Except as disclosed on
Schedule 4.5 of the Disclosure Schedule, the Company has timely filed all
required reports, schedules, forms, statements and other documents with the
Securities and Exchange Commission ('SEC') since January 1, 1996 (collectively,
and in each case including all exhibits and schedules thereto and documents
incorporated by reference therein, as amended, the 'SEC Documents'). As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Securities Act, or the Exchange Act, as the case may be, and
the rules and regulations of the SEC promulgated thereunder applicable to such
SEC Documents, and none of the SEC Documents (including any and all financial
statements included therein) as of such dates contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The consolidated
financial statements of the Company included in all SEC Documents (the 'SEC
Financial Statements') comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles (except, in the case of unaudited consolidated
quarterly statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present the consolidated financial position of the
Company and its consolidated Subsidiaries as of the dates thereof and the
consolidated results of their operations, stockholders' equity, and cash flows
for the periods then ended (subject, in the case of unaudited quarterly
statements, to normal year-end audit adjustments, none of which, individually or
in the aggregate is material). Except as set forth in Schedule 4.5 of the
Disclosure Schedule and except as set forth in the SEC Documents filed and
publicly available prior to the date of this Agreement, and except for
liabilities and obligations incurred in the ordinary course of business
consistent with past practice since the date of the most recent consolidated
balance sheet included in the SEC Documents filed and publicly available prior
to the date of this Agreement (the 'Balance Sheet'), neither the Company nor any
of its subsidiaries has any liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) required by generally accepted
accounting principles to be set forth on a consolidated balance sheet of the
Company and its consolidated subsidiaries or in the notes thereto.
4.6 Information Supplied. None of the information supplied or to be
supplied by the Company for inclusion or incorporation by reference in the Proxy
Statement will, at the date it is first mailed to the Company'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 the light of the
circumstances under which they are made, not misleading, except that no
representation or warranty is made by the Company with respect to the
information supplied by MergerCo or any affiliate of MergerCo in writing
specifically for inclusion in the Proxy Statement. The Proxy Statement will
comply as to form in all material respects with the requirements of the Exchange
Act and the rules and regulations promulgated thereunder. Neither the Schedule
14D-9 nor any information supplied by the Company for inclusion in the Offer
Documents will, at the respective times the Schedule 14D-9, the Offer Documents
or any amendments or supplements thereto are filed with the SEC or are first
published, sent or given to stockholders of the Company,
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contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements contained
therein, in the light of the circumstances under which they were made, not
misleading (except to the extent information contained therein is based upon
information supplied solely by the Buyer or MergerCo). The Schedule 14D-9 shall
comply in all material respects with the requirements of the Exchange Act and
the rules and regulations promulgated thereunder.
4.7 Absence of Certain Changes or Events. Except as disclosed in the SEC
Documents or on Section 4.7 of the Disclosure Schedule, since the date of the
Balance Sheet, the Company has conducted its business only in the ordinary
course consistent with past practice, and there is not and has not been: (i) any
Material Adverse Change with respect to the Company; (ii) any event which, if it
had taken place following the execution of this Agreement, would not have been
permitted by Section 6.1 without the prior consent of MergerCo; or (iii) any
condition, event or occurrence which would reasonably be expected to prevent,
hinder or materially delay the ability of the Company to consummate the
transactions contemplated by this Agreement.
4.8 Litigation; Labor Matters; Compliance with Laws. (a) Except as
disclosed in the SEC Documents filed and publicly available prior to the date of
this Agreement, there is (i) no suit, action or proceeding or investigation
pending and, (ii) to the knowledge of the Company, no suit, action or proceeding
or investigation threatened against or affecting the Company or any of its
Subsidiaries that, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect with respect to the Company or (iii)
prevent, hinder or materially delay the ability of the Company to consummate the
transactions contemplated by this Agreement nor is there any judgment, decree,
injunction, rule or order of any Governmental Entity or arbitrator outstanding
against the Company or any of its Subsidiaries having, or which in the future
could have, any such effect.
(b) Except as disclosed in Section 4.8 of the Disclosure Schedule, (i)
neither the Company nor any of its Subsidiaries is a party to, or bound by, any
collective bargaining agreement, contract or other agreement or understanding
with a labor union or labor organization; (ii) neither the Company nor any of
its Subsidiaries is the subject of any proceeding asserting that it or any
subsidiary has committed an unfair labor practice or seeking to compel it to
bargain with any labor organization as to wages or conditions of employment;
(iii) there is no strike, work stoppage or other labor dispute involving it or
any of its Subsidiaries pending or, to its knowledge, threatened, nor has there
been in the three year period prior to the date of this Agreement and, to the
knowledge of the Company, there are no current union organizing activities among
the Employees of the Company or any of its Subsidiaries which are reasonably
likely to result in a Material Adverse Effect; (iv) there is no grievance
arising out of any collective bargaining agreement or other grievance procedure
against the Company or any of its subsidiaries, except such grievances that have
not and will not prevent the Company from carrying on its business substantially
as now conducted or might reasonably be expected to result in a Material Adverse
Effect; (v) no charges with respect to or relating to the Company or any of its
subsidiaries are pending before the Equal Employment Opportunity Commission or
any other agency responsible for the prevention of unlawful employment
practices, except such charges that have not and will not prevent the Company
from carrying on its business substantially as now conducted or might reasonably
be expected to result in a Material Adverse Effect; (vi) neither of the Company
or any of its subsidiaries has received notice of the intent of any Federal,
state, local or foreign agency responsible for the enforcement of labor or
employment laws to conduct an investigation which is reasonably likely to result
in a Material Adverse Effect; and (vii) the Company is not liable for any
severance pay or other payments to any employee or former employee, or any other
person, arising from the termination of employment, or other change in the legal
relationship with such person, under any benefit or severance policy, practice,
agreement, plan, or program of the Company, nor will the Company have any
liability which exists or arises, or may be deemed to exist or arise, under any
applicable law or otherwise, as a result of or in connection with the
transactions contemplated hereunder or as a result of the termination by the
Company of any persons employed by the Company or any of its Subsidiaries on or
prior to the Effective Time of the Merger.
(c) The ownership of the assets of and the conduct of the business of the
Company and each of its Subsidiaries have not been in violation of, and comply
with all statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees or arbitration awards applicable thereto, except for violations or
failures so to comply, if any, that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect with respect to the
Company.
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(d) Each of the Company and its Subsidiaries has in effect all material
Federal, state, local and foreign governmental approvals, authorizations,
certificates, filings, franchise, licenses, notices, permits and rights,
including all authorizations under Environmental Laws ('Permits'), necessary for
it to own, lease or operate its properties and assets and to carry on its
business substantially as now conducted, and there is no actions pending to
revoke any such Permit and there has occurred no default or violation under any
such Permit which is reasonably likely to have a Material Adverse Effect.
4.9 Employee Benefit Plans. With respect to the employee benefit plans (as
that phrase is defined in section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ('ERISA')) and any other benefit or
compensation plan, program, or arrangement (including, but not limited to, each
deferred compensation and each bonus or other incentive compensation, stock
purchase, stock option and other equity compensation plan, program, agreement or
arrangement; each severance or termination pay, and each employment, termination
or severance agreement) maintained for the benefit of any current or former
employee, officer, or director of the Company or any ERISA Affiliate (as defined
below) ('Benefit Plans'), except as set forth in Section 4.9 of the Disclosure
Schedule:
(i) none of the Benefit Plans is a 'multiemployer plan' within the
meaning of ERISA nor has the Company ever maintained or contributed to such
a Plan;
(ii) No Benefit Plan provides medical, surgical, hospitalization,
death or similar benefits (whether or not insured) for employees or former
employees of the Company or any other Subsidiary for periods extending
beyond their retirement or other termination of service, other than (i)
coverage mandated by applicable law, (ii) death benefits under any 'pension
plan,' or (iii) benefits the full cost of which is borne by the current or
former employee (or his beneficiary).
(iii) none of the Benefit Plans or any other agreement with any
employee of the Company or its Subsidiaries provides for payment of a
benefit, the increase of a benefit amount, the payment of a contingent
benefit, or the acceleration of the payment or vesting of a benefit by
reason of the execution of this Agreement or the consummation of the
transactions contemplated by this Agreement;
(iv) each Benefit Plan intended to be qualified under section 401 (a)
of the Internal Revenue Code of 1986, as amended ('Code' has received a
favorable determination letter from the Internal Revenue Service that it is
so qualified and nothing has occurred since the date of such letter that
could reasonably be expected to result in the revocation of such
determination letter;
(v) each Benefit Plan has been operated in all material respects in
accordance with its terms and the requirements of all applicable law.
(vi) No liability under Title IV or section 302 of ERISA has been
incurred by the Company or any ERISA Affiliate that has not been satisfied
in full, and no condition exists that presents a material risk to the
Company or any ERISA Affiliate of incurring any such liability, other than
liability for premiums due the Pension Benefit Guaranty Corporation
('PBGC') (which premiums have been paid when due). Insofar as the
representation made in this section 4.9(v) applies to Sections 4064, 4069
or 4204 of Title IV of ERISA, it is made with respect to any employee
benefit plan, program, agreement or arrangement subject to Title IV of
ERISA to which the Company or any ERISA Affiliate made, or was required to
make, contributions during the five (5)-year period ending on the last day
of the most recent plan year ended prior to the Effective Plan.
(vii) the Company has provided to Buyer or MergerCo (x) true and
complete copies of all Benefit Plans, (y) the most recent annual actuarial
valuation, if any, prepared for each Benefit Plan, and (z) the most recent
annual report (Form 5500), if any, required under ERISA with respect to
each Benefit Plan;
(viii) no payment that is owed or may become due to any director,
officer, employee, or agent of the Company will be non-deductible to the
Company or subject to tax under I.R.C. Section280G or Section4999,
respectively, nor will the Company be required to 'gross up'or otherwise
compensate any such person because of the imposition of any excise tax on a
payment to such person;
(ix) as of the date hereof, subject to the requirements of Section 412
of the Code or Section 302 of ERISA, no Pension Plan has incurred an
accumulated funding deficiency (as defined in Section 302 of
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ERISA and Section 412 of the Code) nor has any sponsor of such a Pension
Plan obtained a funding waiver (as such terms are defined in such
applicable sections and any regulations thereunder) with respect thereto;
(x) neither the Company nor any ERISA Affiliates has engaged in, and
neither the Company nor any Affiliate knows of any other person who or
which has engaged in, any 'prohibited transaction' (within the meaning of
Section 406 of ERISA or Section 4975 of the Code, excluding any
transactions which are exempt under Section 408 of ERISA or Section 4975 of
the Code) with respect to any Benefit Plan, which could reasonably be
expected to subject the Company or any Subsidiary or Buyer or MergerCo to
any material liability;
(xi) no reportable event (as defined in ERISA and the regulations
thereunder, but excluding any such event for which the thirty (30) day
notice requirement has been waived) has occurred or is continuing with
respect to any Benefit Plan;
(xii) there are no actions, suits or claims pending (other than
routine claims for benefits) or, to the knowledge of the Company, any
actions, suits or claims (other than routine claims for benefits) which can
reasonably be expected to be asserted, against the Company with respect to
any Benefit Plan or other plan or arrangement, or against any such Benefit
Plan or other plan or the assets thereof;
(xiii) the Company and each ERISA Affiliate is, and at all relevant
times, has been in material compliance with the provisions of COBRA (as
defined below); and
(xiv) except as specifically set forth herein, the Company has not
taken any action or made any statement, promise or representation to, or
agreement with, any of its employees, officers or directors that after the
Closing, Buyer will continue or establish any Benefit Plan or other plan or
arrangement or provide any particular benefits or compensation to
employees. To the knowledge of the Company, the PBGC has not instituted
proceedings to terminate any Benefit Plan subject to Section 302 or Title
IV of ERISA or Section 412 of the Code (each, a 'Title IV Plan') and no
condition exists that presents a material risk that such proceedings will
be instituted.
For purposes of this Agreement, 'ERISA Affiliate' shall mean any
corporation, trade or business which controls, is controlled by, or is under
common control with, the Company within the meaning of Sections 414(b), 414(c),
414(m) or 414(o) of the Code or Section 4001(a)(14) of ERISA and 'COBRA' shall
mean Part 6 of Subtitle B of Title I of ERISA and Section 4980B(f) of the Code.
Schedule 4.9 of the Disclosure Schedule sets forth a complete and accurate
list of all Benefit Plans currently in effect.
4.10 Taxes. Except as disclosed in Section 4.10 of the Disclosure
Schedule, the Company and each of its Subsidiaries, and any consolidated,
combined, unitary or aggregate group for Tax purposes of which the Company or
any of its Subsidiaries is or has been a member (a 'Consolidated Group') has
timely filed (or has had timely filed on its behalf) all Tax Returns required to
be filed by it (except for certain Tax Returns, each of which is immaterial in
amount and scope, involving aggregate liability for Taxes of no more than
$100,000, which may not have been timely filed) and all such Tax Returns are
true, correct and complete in all material respects, has paid (or has had paid
on its behalf) all Taxes shown thereon to be due and has provided adequate
reserves in its financial statements, in accordance with generally accepted
accounting principles, for any Taxes that have not been paid, whether or not
shown as being due on any Tax Returns. Except as disclosed in Section 4.10 of
the Disclosure Schedule, (i) no claim for unpaid Taxes has become a lien against
the assets of the Company or any of its Subsidiaries or is being asserted
against the Company or any of its Subsidiaries; (ii) no audit of any Tax Return
that includes the Company or any of its Subsidiaries is being conducted by a Tax
authority; (iii) no extension or waiver of the statute of limitations on the
assessment of any Taxes or with respect to any Tax Return has been granted by
the Company or any of its Subsidiaries and is currently in effect and (iv) there
is no arrangement with respect to sharing or allocating Taxes that will require
any payment by the Company or any of its Subsidiaries after the date of this
Agreement. As used in this Agreement, 'Taxes' shall mean (a) all taxes of any
kind, including, without limitation, those on or measured by or referred to as
income, gross receipts, sales, use, ad valorem, franchise, profits, license,
withholding, back-up withholding, payroll, employment, excise, severance, stamp,
occupation, premium, value added, property or windfall profits taxes, customs,
duties or similar fees, assessments or charges of any kind whatsoever, together
with any interest and any
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penalties, additions to tax or additional amounts imposed by any Governmental
Entity, domestic or foreign (b) any liability for the payment of any amount of
the type described in (a) as a result of being a member of an affiliated,
consolidated, combined or unitary group, and (c) any liability for the payment
of any amounts as a result of being a party to any tax sharing agreement or as a
result of an express or implied obligation to indemnify another person with
respect to the payment of any amounts of the type described in clause (a) or
(b). As used in this Agreement, 'Tax Return' shall mean any return, report or
statement required to be filed with any Governmental Entity with respect to
Taxes. Except as set forth on Schedule 4.10, there are no written or, to its
knowledge, oral proposed assessments of Taxes against the Company or any of its
Subsidiaries or written or, to its knowledge, oral proposed adjustments to any
Tax Return filed, pending against the Company or any of its Subsidiaries, or
written or, to its knowledge, oral proposed adjustments to the manner in which
any Tax of the Company or any of its Subsidiaries is determined.
4.11 Environmental Matters. Except as disclosed in Section 4.11 of the
Disclosure Schedule, and except for items of non-compliance which could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect with respect to the Company:
(a) The Company and its Subsidiaries hold and formerly held, and are,
and have been, in material compliance with, all Environmental Permits, and
the Company and its Subsidiaries are, and have been, in material compliance
with all applicable Environmental Laws;
(b) None of the Company or its Subsidiaries has received any
Environmental Claim, and none of the Company or its Subsidiaries is aware,
after diligent inquiry, of any threatened Environmental Claim or of any
circumstances, conditions or events that could reasonably be expected to
give rise to a material Environmental Claim, against the Company or any of
its Subsidiaries and, to the knowledge of the Company, as of the date of
this Agreement, there are no circumstances or conditions that may prevent
or interfere with compliance by the Company or its subsidiaries in the
future with Environmental Laws (or Environmental Permits issued thereunder)
in effect as of the date of this Agreement, except such circumstances or
conditions that have not and are not reasonably likely to result in a
Material Adverse Effect;
(c) There are no Hazardous Materials present at any facility currently
owned, leased or operated by the Company or any of its Subsidiaries that
could reasonably be expected to give rise to liability of the Company or
any of its Subsidiaries under any Environmental Laws which liability could
reasonably be expected to have a Material Adverse Effect on the Company;
(d) No modification, revocation, reissuance, alteration, transfer, or
amendment of the Environmental Permits, or any review by, or approval of,
any third party of the Environmental Permits is required in connection with
the execution or delivery of this Agreement or the consummation of the
transactions contemplated hereby or the continuation of the business of the
Company or its Subsidiaries following such consummation;
(e) Hazardous Materials have not been generated, transported, treated,
stored, disposed of, released or threatened to be released at, on, from or
under any of the properties or facilities currently or previously owned or
leased by the Company or any of its Subsidiaries, in violation of or in a
manner or to a location that could give rise to liability under any
Environmental Laws which liability could reasonably be expected to have
Material Adverse Effect on the Company;
(f) The Company and its Subsidiaries have not assumed, contractually
or by operation of law, any liabilities or obligations under any
Environmental Laws except, in the case of those assumed by operation of
law, those assumed which in and of themselves (and irrespective of any
contribution or indemnification rights) could not reasonably be expected to
have a Material Adverse Effect on the Company.
(g) For purposes of this Agreement, the following terms shall have the
following meanings:
'Environmental Claim' means any written or oral notice, claim, demand,
action, complaint, proceeding, request for information or other communication by
any person alleging liability or potential liability (including without
limitation liability or potential liability for investigatory costs, cleanup
costs, governmental response costs, natural resource damages, property damage,
personal injury, fines or penalties) arising out of, relating to, based on or
resulting from (i) the presence, discharge, emission, release or threatened
release of any Hazardous
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Materials at any location, whether or not owned, leased or operated by the
Company or any of its Subsidiaries or (ii) circumstances forming the basis of
any violation or alleged violation of any Environmental Law or Environmental
Permit or (iii) otherwise relating to obligations or liabilities under any
Environmental Laws.
'Environmental Permits' means all permits, licenses, registrations and
other governmental authorizations required for the Company and its Subsidiaries
and the operations of the Company's and its Subsidiaries', facilities and
otherwise to conduct its business under Environmental Laws.
'Environmental Laws' means all applicable domestic and foreign federal,
state and local statutes, rules, regulations, ordinances, orders, decrees and
common law relating in any manner to contamination, pollution or protection of
human health or the environment, including without limitation the Comprehensive
Environmental Response, Compensation and Liability Act, the Solid Waste Disposal
Act, the Clean Air Act, the Clean Water Act, the Toxic Substances Control Act,
the Occupational Safety and Health Act, the Emergency Planning and
Community-Right-to-Know Act, the Safe Drinking Water Act, all as amended, and
similar state and local laws.
'Hazardous Materials' means all hazardous or toxic substances, wastes,
materials or chemicals, petroleum (including crude oil or any fraction thereof)
and petroleum products, asbestos and asbestos-containing materials, pollutants,
contaminants and all other materials, substances and forces, including but not
limited to electromagnetic fields, regulated pursuant to, or that could form the
basis of liability under, any Environmental Law.
4.12 Material Contracts. The Company has provided or made available to
MergerCo true and complete copies of all written contracts, agreements
(including, but not limited to, distribution agreements and licensing
agreements), commitments, arrangements, leases (including with respect to
personal property), policies and other instruments to which it or any of its
Subsidiaries is a party or by which it or any such Subsidiary is bound which is
or was required to be filed as an exhibit to the SEC Documents ('Material
Contracts'). Except as set forth in Section 4.12 of the Disclosure Schedule,
neither the Company nor any of its Subsidiaries is, or has received any notice
or has any knowledge that any other party is, in breach or default in any
material respect under any such Material Contract; and there has not occurred
any event that with the lapse of time or the giving of notice or both would
constitute a material breach or default. Except as set forth on Section 4.12 of
the Disclosure Schedule, all Material Contracts are valid and subsisting and in
full force and effect in accordance with their terms, and the Company has duly
performed its obligations thereunder in all material respects to the extent such
obligations have occurred.
4.13 Brokers. No broker, investment banker, financial advisor or other
person, other than Donaldson, Lufkin & Jenrette Securities Corporation, the fees
and expenses of which will be paid by the Company (pursuant to a fee agreement,
a copy of which has been provided to MergerCo), 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 the Company.
4.14 Opinion of Financial Advisor. The Company has received the opinion of
Donaldson, Lufkin & Jenrette Securities Corporation dated the date hereof, to
the effect that the consideration to be received in the Offer and the Merger by
the Company's stockholders (other than any consideration paid with respect to
Dissenting Shares is fair to the holders of Company Common Stock from a
financial point of view, a signed copy of which opinion has been delivered to
MergerCo.
4.15 Board Recommendation. The Board of Directors of the Company, at a
meeting duly called and held, has (a) determined that the Offer, this Agreement
and the transactions contemplated hereby, taken together, are advisable and in
the best interests of the Company and the stockholders of the Company, and (b)
resolved to recommend that the holders of the shares of Company Common Stock
tender their shares of Company Common Stock in the Offer, approve the Offer,
this Agreement and the transactions contemplated herein, including the Merger.
4.16 Required Company Vote. The Company Stockholder Approval, being the
affirmative vote of a majority in number of the shares of the Company Common
Stock, is the only vote of the holders of any class or series of the Company's
securities necessary to approve this Agreement, the Merger and the other
transactions contemplated hereby.
4.17 State Takeover Statutes. No state takeover statute or similar statute
or regulation of the State of Delaware (and, to the knowledge of the Company
after due inquiry, of any other state or jurisdiction) applies or
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purports to apply to the Company or any of its Subsidiaries, or to this
Agreement, the Offer, the Merger, or any of the other transactions contemplated
hereby, except any such statutes or regulations which are no longer applicable
in any respect upon the execution of this Agreement. Neither the Company nor any
of its Subsidiaries has any rights plan, preferred stock or similar arrangement
which have any of the aforementioned consequences in respect of the transactions
contemplated hereby.
4.18. Intellectual Property. Section 4.18 of the Disclosure Schedule sets
forth a true and complete list of all patents, trademarks (registered or
unregistered), trade names, service marks and copyrights and applications
therefor owned, used or filed by or licensed to the Company and its Subsidiaries
and which are material to the Company and its Subsidiaries taken as a whole
(collectively, 'Intellectual Property Rights'). The Intellectual Property Rights
are sufficient to allow each of the Company and each of its Subsidiaries to
conduct, and continue to conduct, its business as currently conducted in all
material respects. To the knowledge of the Company, each of the Company and each
of its Subsidiaries owns or has sufficient unrestricted right to use the
Intellectual Property Rights in order to allow it to conduct its business as
currently conducted in all material respects, and the consummation of the
transactions contemplated hereby will not alter or impair such ability in any
respect. Each copyright registration, patent and registered trademark and
application therefor listed on Section 4.18 of the Disclosure Schedule is in
proper form, not disclaimed in whole and has been duly maintained including the
submission of all necessary filings in accordance with the legal and
administrative requirements of the appropriate jurisdictions except with respect
to use requirements as to trademarks and except for any such failure to be in
proper form, any such disclaimer or such failure to be duly maintained which is
not reasonably likely to result in a Material Adverse Effect. To the knowledge
of the Company, there are no pending oppositions, cancellations, invalidity
proceedings, interferences or re-examination proceedings with respect to the
Intellectual Property Rights which are reasonably likely to result in a Material
Adverse Effect. To the knowledge of the Company, neither the Company nor any of
its Subsidiaries has received any written notice from any other Person
pertaining to or challenging the right of the company or any of its Subsidiaries
to use any of the Intellectual Property Rights which is reasonably likely to
result in a Material Adverse Effect. Except as identified in Section 4.18 of the
Disclosure Schedules, no claims are pending by any Person with respect to the
ownership, validity, enforceability or use of any such Intellectual Property
Rights challenging or questioning the validity or effectiveness of any of the
foregoing which are reasonably likely to result in a Material Adverse Effect.
Neither the Company nor any of its Subsidiaries has made any claim of a
violation or infringement by others of its rights to or in connection with the
Intellectual Property Rights.
4.19. Title to Properties. Each of the Company and each of its
Subsidiaries has sufficiently good and valid title to, or an adequate leasehold
interest in, its material tangible properties and assets (including real
property) in order to allow it to conduct, and continue to conduct, its business
as currently conducted in all material respects. Except as set forth in Section
4.19 of the Disclosure Schedule, such material tangible properties and assets
(including real property) are free of Liens which would impair such ability in
any material respect and, to the knowledge of the Company, the consummation of
the transactions contemplated by this Agreement will not alter or impair such
ability in any material respect.
4.20. Products Liability. Except as set forth in Section 4.20 of the
Disclosure Schedule, there is no pending or, to the knowledge of the Company,
threatened claim, action, suit, inquiry, proceeding or investigation by any
individual or Governmental Entity in which a Product is alleged to have a Defect
and which is reasonably likely to result in a Material Adverse Effect; nor, to
the knowledge of the Company, is there any valid basis for any such claim,
cation, suit, inquiry, proceeding, or investigation. As used in this Section
4.20, the term 'Product' shall mean any product designed, manufactured, shipped,
sold, marketed, distributed and/or otherwise introduced into the stream of
commerce by or on behalf of the Company or any of its Subsidiaries, including,
without limitation, any product sold in the United States by the Company or any
of its Subsidiaries as the distributor, agent, or pursuant to any other
contractual relationship with a non-U.S. manufacturer; and the term 'Defect'
shall mean a defect or impurity of any kind, whether in design, manufacture,
processing, or otherwise, including, without limitation, any dangerous
propensity associated with any reasonably foreseeable use of a Product, or the
failure to warn of the existence of any defect, impurity, or dangerous
propensity.
4.21 Sole Representations. The representations and warranties contained in
this Agreement are the sole representations and warranties which the Company is
making in connection with the transactions contemplated herein.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER AND MERGERCO
Each of Buyer and MergerCo hereby, jointly and severally, represents and
warrants to the Company as follows:
5.1 Organization, Standing and Corporate Power. Each of Buyer and MergerCo
are corporations duly organized, validly incorporated and in good standing in
the State of Delaware, and each has the requisite corporate power and authority
to carry on its business as now being conducted. Each of Buyer and MergerCo has
delivered to the Company complete and correct copies of its certificate of
incorporation (or other organizational documents) and by-laws.
5.2 Authority; Noncontravention. Each of Buyer and MergerCo has all
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement by each of Buyer and MergerCo and the consummation by
each of Buyer and MergerCo of the transactions contemplated by this Agreement
have been duly authorized by all necessary corporate action on the part of each
of Buyer and MergerCo. This Agreement has been duly executed and delivered by
and constitutes a valid and binding obligation of each of Buyer and MergerCo.
Except as disclosed on Section 5.2 of the Disclosure Schedule, the execution and
delivery of this Agreement does not, and the consummation of the transactions
contemplated by this Agreement and compliance with the provisions of this
Agreement will not, conflict with, or result in (a) any breach or violation of,
or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration or 'put' with
respect to any obligation or (b) the loss of a benefit, or other right or the
creation of any Lien upon any of the properties or assets of either Buyer or
MergerCo under, (i) the certificate of incorporation or by-laws of either Buyer
or MergerCo, (ii) any loan or credit agreement, note, bond, mortgage, indenture,
lease or other agreement, instrument, permit, concession, franchise or license
applicable to either Buyer or MergerCo or its properties or assets or (iii)
subject to the governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law, ordinance, rule,
regulation or arbitration award applicable to either Buyer or MergerCo or its
properties or assets, other than, in the case of clauses (ii) and (iii), any
such conflicts, breaches, violations, defaults, rights, losses or Liens that
individually or in the aggregate would not have a Material Adverse Effect with
respect to either Buyer or either Buyer or MergerCo or could not prevent, hinder
or materially delay the ability of MergerCo to consummate the transactions
contemplated by this Agreement. No consent, approval, order or authorization of,
or registration, declaration or filing with, or notice to, any Governmental
Entity or any other person under any agreement, indenture or other instrument to
which Buyer or MergerCo is a party or to which any of its properties is subject,
is required by or with respect to either Buyer or MergerCo in connection with
the execution and delivery of this Agreement by either Buyer or MergerCo or the
consummation by Buyer and MergerCo of any of the transactions contemplated by
this Agreement, except for (i) the filing of a pre-merger notification and
report form under the HSR Act, and (ii) the filing with the SEC of (y) the Offer
Documents and (z) such reports under the Exchange Act as may be required in
connection with this Agreement and the transactions contemplated hereby.
5.3 Brokers. No broker, investment banker, financial advisor or other
person, other than Morgan Stanley & Co. Incorporated, the fees and expenses of
which will be paid by Buyer or MergerCo, 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
an behalf of MergerCo to its affiliates.
5.4 Offer Documents and Schedule 14D-9. The Offer Documents will not, at
the time the Offer Documents or any amendments or supplements thereto are filed
with the SEC or are first published, sent or given to stockholders of the
Company, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
contained therein, in the light of the circumstances under which they were made,
not misleading (except to the extent information contained therein is based upon
information supplied solely by the Company). The Offer Documents shall comply in
all material respects with the requirements of the Exchange Act and the rules
and regulations promulgated thereunder.
5.5 Information Supplied. None of the information supplied or to be
supplied by Buyer or MergerCo or its affiliates in writing specifically for
inclusion or incorporation by reference in the Proxy Statement will, at the
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time the Proxy Statement is first mailed to the Company'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 to make the statements therein not misleading.
5.6 Sole Representations. The representations and warranties contained in
this Agreement are the sole representations and warranties which Buyer or
MergerCo are making in connection with the transactions contemplated herein.
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR TO MERGER
6.1 Conduct of Business of the Company. During the period from the date of
this Agreement to the Effective Time of the Merger (except as otherwise
specifically required by the terms of this Agreement), the Company shall, and
shall cause its Subsidiaries to, act and carry on their respective businesses in
the usual, regular and ordinary course of business consistent with past practice
and use its and their respective reasonable best efforts to preserve intact
their current business organizations, keep available the services of their
current officers and employees and preserve their relationships with customers,
suppliers, licensors, licensees, advertisers, distributors and others having
business dealings with them and to preserve goodwill. Without limiting the
generality of the foregoing, during the period from the date of this Agreement
to the Effective Time of the Merger, the Company shall not, and shall not permit
any of its Subsidiaries to, without the prior written consent of MergerCo:
(a) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock, other than dividends
and distributions by a direct or indirect wholly owned subsidiary of the
Company to its parent in accordance with applicable law;
(b) split, combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities in respect of, in lieu of or
in substitution for shares of its capital stock;
(c) purchase, redeem or otherwise acquire any shares of capital stock
of the Company or any of its Subsidiaries or any other securities thereof
or any rights, warrants or options to acquire any such shares or other
securities, except for the cash-out of Company Stock Options (as provided
in Section 3.2.3); in full or partial payment of the exercise price payable
by such holder upon exercise of Company Stock Options outstanding on the
date of this Agreement;
(d) authorize for issuance, issue, deliver, sell, pledge or otherwise
encumber any shares of its capital stock or the capital stock of any of its
Subsidiaries, any other voting securities or any securities convertible
into, or any rights, warrants or options to acquire, any such shares,
voting securities or convertible securities or any other securities or
equity equivalents (including without limitation stock appreciation rights)
(other than the issuance of Company Common Stock upon the exercise of
Company Stock Options outstanding on the date of this Agreement and in
accordance with their present terms (such issuances, together with the
acquisitions of shares of Company Common Stock permitted under clause (c)
above, being referred to herein as 'Permitted Changes'));
(e) in the case of the Company or any subsidiary, amend its
certificates or articles of incorporation, by-laws or other comparable
charter or organizational documents;
(f) acquire or agree to acquire by merging or consolidating with, or
by purchasing a substantial portion of the stock or assets of, or by any
other manner, any business or any corporation, partnership, joint venture,
association or other business organization;
(g) other than as specifically permitted by Section 6.1 of the
Disclosure Schedule, sell, lease, license, mortgage or otherwise encumber
or subject to any Lien or otherwise dispose of any of its properties or
assets other than any such properties or assets the value of which do not
exceed two million individually and ten million in the aggregate, except
sales of inventory in the ordinary course of business consistent with past
practice;
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(h) incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or
warrants or other rights to acquire any debt securities of the Company or
any of its Subsidiaries, guarantee any debt securities of another person,
enter into any 'keep well' or other agreement to maintain any financial
statement condition of another person or enter into any arrangement having
the economic effect of any of the foregoing, except for short-term
borrowings and for lease obligations, in each case incurred in the ordinary
course of business consistent with past practice;
(i) make any loans, advances or capital contributions to, or
investments in, any other person, other than to the Company or any direct
or indirect wholly owned subsidiary of the Company and other than loans to
employees in the ordinary course of business not to exceed $25,000 in any
one case or $500,000 in the aggregate;
(j) pay, discharge or satisfy any claims (including claims of
stockholders), liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), except for the payment, discharge or
satisfaction, (a) of liabilities or obligations in the ordinary course of
business consistent with past practice or in accordance with their terms as
in effect on the date hereof or (b) claims settled or compromised to the
extent permitted by Section 6.1(n), or waive, release, grant, or transfer
any rights of material value or modify or change in any material respect
any existing license, lease, Permit, contract or other document, other than
in the ordinary course of business consistent with past practice;
(k) adopt a plan of merger, consolidation, restructuring,
recapitalization or reorganization or complete a partial liquidation or
resolutions providing for or authorizing such a liquidation or a
dissolution,
(1) enter into any new collective bargaining agreement;
(m) change any material accounting principle used by it;
(n) settle or compromise any litigation (whether or not commenced
prior to the date of this Agreement) other than settlements or compromises
of litigation where the amount paid (after giving effect to insurance
proceeds actually received) in settlement or compromise is not material to
the Company;
(o) neither the Company nor any of its subsidiaries shall make any new
capital expenditure or expenditures, other than capital expenditures not to
exceed, in the aggregate, the amounts provided for capital expenditures in
the capital budget of the company provided to Buyer;
(p) neither the Company nor any of its subsidiaries shall, except in
the ordinary course of business and except as otherwise permitted by this
Agreement, modify, amend or terminate any contract or agreement set forth
in the SEC Documents filed and publicly available prior to the date of this
Agreement to which the company or any Subsidiary is a party or waive,
release or assign any material rights or claims;
(q) neither the Company nor any of its subsidiaries shall: (i) enter
into any employment agreement with any officer, director or key employee of
the Company or any of its subsidiaries; or (ii) hire or agree to hire any
new or additional key employees or officers.
(r) neither the Company nor any of its subsidiaries shall make any Tax
election or settle or compromise any material Tax liability;
(s) neither the Company nor any of its subsidiaries will voluntarily
take, or voluntarily agree to commit to take, any action that would make
any representation or warranty of the Company contained herein inaccurate
in any respect at, or as of any time prior to, the Effective Time; or
(t) authorize any of, or commit or agree to take any of, the foregoing
actions.
6.2 Changes in Employment Arrangements. Except as set forth in Section 6.2
of the Disclosure Schedule, neither the Company nor any of its Subsidiaries
shall adopt or amend (except as may be required by law) any bonus, profit
sharing, compensation, stock option, pension, retirement, deferred compensation,
employment or other employee benefit plan, agreement, trust, fund or other
arrangement (including any Company Plan) for the benefit or welfare of any
employee, director or former director or employee, or increase the compensation
or fringe benefits of any director, employee or former director or employee or
pay any benefit not required by any
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existing plan, arrangement or agreement (other than increases for employees
other than officers and directors) in the ordinary course of business consistent
with past practice .
6.3 Severance. Neither the Company nor any of its Subsidiaries shall grant
any new or modified severance or termination arrangement or increase or
accelerate any benefits payable under its severance or termination pay policies
in effect on the date hereof.
6.4 WARN. Neither the Company nor any of its Subsidiaries shall effectuate
a 'plant closing' or 'mass layoff', as those terms are defined in the Worker
Adjustment and Retraining Notification Act of 1988 or similar state law ('WARN')
affecting in whole or in part any site of employment, facility, operating unit
or employee of the Company or any subsidiary, without the prior written consent
of MergerCo or its affiliates in advance and without complying with the notice
requirements and other provisions of WARN.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1. Preparation of Proxy Statement: Stockholder Meeting.
(a) As promptly as practicable after Buyer or MergerCo first purchases
Shares pursuant to the Offer, and if required by applicable law, the Company
shall prepare and file with the SEC a preliminary proxy or information statement
in accordance with the Exchange Act relating to the Merger and this Agreement
and use its best efforts (x) to obtain and furnish the information required to
be included by the Exchange Act and the SEC in the Proxy Statement and, after
consultation with Buyer, to respond promptly to any comments made by the SEC
with respect to the preliminary proxy or information statement and cause a
definitive proxy or information statement, including any amendment or supplement
thereto to be mailed to its stockholders, provided that no amendment or
supplement to the Proxy Statement or information statement will be made by the
Company without consultation with Buyer and its counsel. If, at any time prior
to the Stockholders Meeting, any event, with respect to the Company, its
Subsidiaries, directors, officers, and/or the Merger or the other transactions
contemplated hereby, shall occur, which is required to be described in the Proxy
Statement, the Company shall so describe such event and, to the extent required
by applicable law, shall cause it to be disseminated to the Company's
stockholders.
(b) The Company will immediately notify MergerCo and its affiliates of (i)
the receipt of any comments from the SEC regarding the Proxy Statement and (ii)
the approval of the Proxy Statement by the SEC. MergerCo shall be given a
reasonable opportunity to review and comment on all filings with the SEC and all
mailings to the Company's stockholders in connection with the Merger prior to
the filing or mailing thereof, and the Company shall use its best efforts to
reflect all such reasonable comments.
(c) The Company will, as promptly as practicable following the expiration
of the Offer and in consultation with MergerCo, duly call, give notice of,
convene and hold a meeting of its stockholders (the 'Stockholders Meeting') for
the purpose of approving this Agreement and the transactions contemplated by
this Agreement. The Company will, through its Board of Directors, recommend to
its stockholders approval of the foregoing matters and seek to obtain all votes
and approvals thereof by the stockholders, as set forth in Section 4.15;
provided, however; that the obligations contained herein shall be subject to the
provisions of Section 7.6 of this Agreement. Subject to the foregoing, such
recommendation, together with a copy of the opinion referred to in Section 4.14
shall be included in the Proxy Statement. The Company will use its best efforts
to hold such meetings as soon as practicable after the date hereof.
Notwithstanding the foregoing, if MergerCo shall acquire at least 90% of the
outstanding Company Common Stock pursuant to the Offer, MergerCo may, in its
sole discretion, and in lieu of completing the Merger in accordance with this
Agreement, cause the Company to be merged into Merger Co, or MergerCo into the
Company, in either case without a Stockholders Meeting and in accordance with
the Delaware law; provided, however, that in such event, the rights of
stockholders of the Company under this Agreement (including, without limitation,
the right to receive the Merger Consideration) shall not be adversely affected
thereby (other than the right to receive the Proxy Statement, attend the
Stockholders Meeting and vote on the Merger, which shall no longer be
applicable).
(d) The Company will cause its transfer agent to make stock transfer
records relating to the Company available to the extent reasonably necessary to
effectuate the intent of this Agreement.
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7.2. Access to Information, Confidentiality.
(a) The Company shall, and shall cause its Subsidiaries, officers,
employees, counsel, financial advisors and other representatives to, afford to
MergerCo and its representatives reasonable access during normal business hours,
in a manner initially coordinated with the chief executive officer or chief
financial officer of the Company, and thereafter coordinated with those persons
designated by the chief executive officer, during the period prior to the
Effective Time of the Merger to its properties, books, contracts, commitments,
personnel and records (including, without limitation, to the extent available,
the work papers of the Company's independent public accountants) and, during
such period, the Company shall, and shall cause its Subsidiaries, officers,
employees and representatives to, furnish promptly to MergerCo (i) a copy of
each report, schedule, registration statement and other document filed by it
during such period pursuant to the requirements of Federal or state securities
laws and (ii) all other information concerning its business, properties,
financial condition, operations and personnel as MergerCo may from time to time
reasonably request. Except as required by law, each of the Company and MergerCo
will hold, and will cause its respective directors, officers, employees,
accountants, counsel, financial advisors and other representatives and
affiliates to hold, any nonpublic information in confidence to the extent
required by and in accordance with that certain Confidentiality Agreement, dated
February 17, 1998 by or on behalf of the Company and Buyer, the other terms of
which Confidentiality Agreement are hereby terminated.
7.3. Additional Undertakings.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use its reasonable best efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate and make effective, in the most expeditious
manner practicable, the Offer, the Merger and the other transactions
contemplated by this Agreement. The Buyer, MergerCo and the Company will use
their reasonable best efforts and cooperate with one another (i) in promptly
determining whether any filings are required to be made or consents, approvals,
waivers, licenses, Permits or authorizations are required to be obtained (or,
which if not obtained, would result in a breach or violation, or an event of
default, termination or acceleration of any agreement or any put right under any
agreement) under any applicable law or regulation or from any governmental
authorities or third parties, including parties to loan agreements or other debt
instruments, in connection with the transactions contemplated by this Agreement,
including the Offer, the Merger and (ii) in promptly making any such filings, in
furnishing information required in connection therewith and in timely seeking to
obtain any such consents, approvals, permits or authorizations. Notwithstanding
the foregoing, or any other covenant herein contained, in connection with the
receipt of any necessary approvals under the HSR Act, neither the Company nor
any of its Subsidiaries shall be entitled to divest or hold separate or
otherwise take or commit to take any action that limits its freedom of action
with respect to, or its ability to retain, the Company or any of its
Subsidiaries or any material portions thereof or any of the businesses, product
lines, properties or assets of the Company or any of its Subsidiaries, without
Buyer's prior written consent.
(b) The Company and Buyer shall make, subject to the condition that the
transactions contemplated herein actually occur, any undertakings (including
undertakings to make divestitures, provided, in any case, that such divestitures
need not themselves be effective or made until after the transactions
contemplated hereby actually occur) required in order to comply with the
antitrust requirements or laws of any governmental entity, including the HSR
Act, in connection with the transactions contemplated by this Agreement.
7.4 Indemnification. For six years after the Effective Time of the Merger,
the Company and the Buyer shall indemnify all present and former directors or
officers of the Company and its Subsidiaries ('Indemnified Parties') against any
costs or expenses (including reasonable attorneys' fees), judgments, fines,
losses, claims, damages or liabilities (collectively, 'Costs') incurred in
connection with any claim, action, suit, proceeding or investigation, whether
civil, criminal, administrative or investigative, arising out of or pertaining
to matters existing or occurring at or prior to the Effective Time of the
Merger, whether asserted or claimed prior to, at or after the Effective Time of
the Merger, to the fullest extent as would have been permitted in their
respective articles of organization or by-laws consistent with applicable law,
to the extent such Costs have not been paid for by insurance and shall, in
connection with defending against any action for which indemnification is
available hereunder, reimburse such Indemnified Parties from time to time upon
receipt of sufficient supporting documentation, for any reasonable costs and
expenses reasonably incurred by such Indemnified Parties; provided
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that such reimbursement shall be conditioned upon such Indemnified Parties'
agreement promptly to return such amounts to the Company if a court of competent
jurisdiction shall ultimately determine that indemnification of such Indemnified
Parties is prohibited by applicable law. The Company will maintain for a period
of not less than six years from the Effective Time of the Merger, the Company's
current directors' and officers, insurance and indemnification policy (or a
policy providing substantially similar coverage) to the extent that it provides
coverage for events occurring prior to the Effective Time of the Merger (the
'D&O Insurance') for all persons who are directors and officers of the Company
on the date of this Agreement; provided that the Company shall not be required
to spend as an annual premium for such D&O Insurance an amount in excess of 200%
of the annual premium paid for directors' and officers' insurance in effect
prior to the date of this Agreement; and provided further that the Company shall
nevertheless be obligated to provide such coverage as may be obtained for such
amount. The provisions of this Section are intended for the benefit of, and
shall be enforceable by, each Indemnified Party and his or her heirs and
representatives.
7.5 Public Announcements. Neither MergerCo or the Buyer, on the one hand,
nor the Company, on the other hand, will issue any press release or public
statement with respect to the transactions contemplated by this Agreement,
including the Offer and the Merger, without the other party's prior consent,
except as may be required by applicable law, court process or by obligations
pursuant to any listing agreement with NASDAQ, and in any event MergerCo and the
Company will consult with each other before issuing, and provide each other the
opportunity to review and comment upon, any such press release or other public
statements with respect to such transactions. The parties agree that the initial
press release or releases to be issued with respect to the transactions
contemplated by this Agreement shall be mutually agreed upon prior to the
issuance thereof.
7.6 No Solicitation.
(a) From and after the date hereof until the termination of this Agreement,
neither the Company or any of its Subsidiaries, nor any of their respective
officers, directors, employees, representatives, agents or affiliates
(including, without limitation, any investment banker, attorney or accountant
retained by the Company or any of its Subsidiaries) will directly or indirectly
initiate, solicit or knowingly encourage (including by way of furnishing
non-public information or assistance), or take any other action to facilitate
knowingly, any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to any Transaction Proposal (as defined below),
or enter into or maintain or continue discussions or negotiate with any person
or entity in furtherance of such inquiries or to obtain a Transaction Proposal
or agree to or endorse any Transaction Proposal or authorize or permit any of
its officers, directors or employees or any of its Subsidiaries or any
investment banker, financial advisor, attorney, accountant or other
representative retained by it or any of its Subsidiaries to take any such
action, provided, however, that nothing contained in this Agreement shall
prohibit the Board of Directors of the Company which, for purposes of this
Section 7.6, shall include any Special Committee thereof from, prior to the
acceptance for payment of Company Common Stock pursuant to the Offer (i)
furnishing information to or entering into discussions or negotiations with, any
person or entity that makes an unsolicited written, bona fide Transaction
Proposal and in respect of which such person or entity has all of the necessary
funds or commitments therefor if, and only to the extent that: (A) the Board of
Directors of the Company, after consultation with their financial advisors and
after receipt of advice from independent outside legal counsel (who may be the
Company's regularly engaged independent outside legal counsel) determines in
good faith that such action is necessary for the Board of Directors of the
Company to comply with its fiduciary duties to stockholders under applicable
law, (B) prior to taking such action the Company receives from such person or
entity an executed confidentiality agreement containing terms and provisions
substantially similar to those contained in the Confidentiality Agreement
described in Section 7.2, (ii) failing to make or withdrawing or modifying its
recommendation referred to in Section 4.15 if there exists a Transaction
Proposal and the Board of Directors of the Company, after consultation with its
financial advisors and after receipt of advice from independent outside legal
counsel (who may be the Company's regularly engaged outside independent
counsel), determines in good faith that such action is necessary for the Board
of Directors of the Company to comply with its fiduciary duties to stockholders
under applicable law in connection with such Transaction Proposal or (iii)
making to the Company's stockholders any recommendation and related filing with
the SEC as required by Rule 14e-2 and 14d-9 under the Exchange Act, with respect
to any tender offer, or taking any other legally required action with respect to
such tender offer (including, without limitation, the making of public
disclosures as may be necessary or reasonably advisable under applicable
securities laws) if the Board of Directors of the Company, after
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consultation with their financial advisors and receipt of advice from
independent outside legal counsel (who may be the Company's regularly engaged
independent counsel), determines in good faith that such action is necessary for
the Board of Directors of the Company to comply with its fiduciary duties to
stockholders under applicable law; and Section 7.6(b) and 7.6(c) are fully
complied with by the Board of Directors of the Company. In the event of an
exercise of the Company's or it's Board of Director's rights under clauses (i),
(ii) or (iii) above and subject to compliance with this Section 7.6,
notwithstanding anything contained in this Agreement to the contrary, such
exercise of rights shall not constitute a breach of this Agreement by the
Company. For purposes of this Agreement, 'Transaction Proposal' shall mean any
of the following (other than the transactions between the Company and MergerCo
contemplated by the Offer and this Agreement) involving the Company or any of
its Subsidiaries: (i) any merger, consolidation, share exchange,
recapitalization, business combination, or other similar transaction; (ii) any
sale, lease, exchange, mortgage, pledge, transfer or other disposition of 20% or
more of the assets of the Company and its Subsidiaries, taken as a whole, in a
single transaction or series of transactions; (iii) any tender offer or exchange
offer for, or the acquisition (or right to acquire) of 'beneficial ownership' by
any person, 'group' or entity (as such terms are defined under Section 13 (d) of
the Exchange Act), of 20% or more of the outstanding shares of capital stock of
the Company or the filing of a registration statement under the Securities Act
in connection therewith; (iv) any public announcement of a proposal, plan or
intention to do any of the foregoing or any agreement to engage in any of the
foregoing or recapitalization, liquidation, dissolution or similar transaction
involving the Company or any of its subsidiaries or (vi) any other transaction
the consummation of which would 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 Buyer of the
transactions contemplated hereby.
(b) Prior to the Board of Directors withdrawing or modifying its approval
or recommendation of the Offer, this Agreement or the Merger, approving or
recommending a Transaction Proposal, or entering into an agreement with respect
to a Transaction Proposal, the Board of Directors shall provide Buyer with a
written notice (a 'Notice of Takeover Proposal') advising Buyer that the Board
of Directors has received a Takeover Proposal, specifying the material terms and
conditions of such Transaction Proposal (unless prohibited from doing so by the
terms thereof) and identifying the person making such transaction Proposal
(unless prohibited from doing so by the terms thereof), and neither the Company
nor any subsidiary shall enter into an agreement with respect to a Transaction
Proposal until midnight three business days after the day on which the Notice of
Takeover Proposal was given to Buyer. In addition, if the Company proposes to
enter into an agreement with respect to any Transaction Proposal, it shall
concurrently with entering into such agreement pay, or cause to be paid, to
Buyer the expenses and fees and the Termination Fee (as provided in and defined
in Section 10.2)
7.7 Resignation of Directors. Prior to the Effective Time of the Merger,
the Company shall deliver to MergerCo evidence satisfactory to MergerCo of the
resignation of all directors of the Company, effective at the Effective Time of
the Merger.
7.8 Employee Benefits. Buyer agrees that, for a period of twelve (12)
months following the Effective Time, the Surviving Corporation shall maintain
employee benefits plans and arrangements (directly or in conjunction with Buyer)
which, in the aggregate, will provide a level of benefits to continuing
employees of the Company and its Subsidiaries substantially comparable in the
aggregate to those provided under the Buyer's benefit plans as in effect
immediately prior to the Effective Time (other than discretionary benefits);
provided, however, that Buyer may cause modifications to be made to such benefit
plans and arrangements to the extent necessary to comply with applicable Law or
to reflect widespread adjustments in benefits (or costs thereof) provided to
employees under compensation and benefit plans of Buyer and its subsidiaries,
and no specific compensation and benefit plans need be provided. For purposes of
determining eligibility and vesting with respect to all Benefit Plans set forth
on Schedule 4.9 of the Disclosure Schedule (except with respect to any defined
benefit plans), Buyer shall use the employee's hire date with the Company or
such other date as has been previously determined by the Company for credit for
prior employment with any ERISA Affiliate of the Company. Benefit plans which
provide medical, dental, or life insurance benefits after the Effective Time to
any individual who is an active or former employee of the Company or any of its
Subsidiaries as of the Effective Time or a dependent of such an employee shall,
with respect to such individuals, waive any waiting periods, any pre-existing
conditions, and any actively-at-work exclusions to the extent so waived under
present policy and shall provide that any expenses incurred on or before the
Effective Time by such individuals shall be taken into
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account under such plans for purposes of satisfying applicable deductible,
coinsurance, and maximum out-of-pocket provisions to the extent taken into
account under present policy. Nothing in this Section 7.8 shall prohibit the
Company or the Surviving Corporation from terminating the employment of any
employee at any time with or without cause (subject to, and in accordance with
the terms of any existing employment agreements), or shall be construed or
applied to restrict the ability of the Buyer or Surviving Corporation and its
Subsidiaries to establish such types and levels of compensation and benefits as
they determine to be appropriate. Buyer agrees to cause the Surviving
Corporation (or the applicable Subsidiary employer) to honor the existing
employment agreements that are set forth on Schedule 7.8 of the Disclosure
Schedule.
7.9 Notification of Certain Matters. The Company shall give prompt notice
to Buyer and MergerCo and Buyer and MergerCo shall give prompt notice to the
Company of: (i) the occurrence or non-occurrence of any event, the occurrence or
non-occurrence of which does or would be likely to cause (A) any representation
or warranty contained in this Agreement to be untrue or inaccurate in any
material respect, or (B) any covenant, condition or agreement contained in this
Agreement not to be complied with or satisfied; and (ii) any failure of the
Company on the one hand, or Buyer or MergerCo on the other hand, to comply with
or satisfy any covenant, condition or agreement to be complied with or satisfied
by it hereunder; provided, however, that the delivery of any notice pursuant to
this Section 7.9 shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
7.10 State Takeover Laws. If any 'fair price' or 'control share
acquisition' statute or other similar statute or regulation shall become
applicable to the transactions contemplated by the Stock Purchase Agreement or
this Agreement, including the Offer or the Merger, the Company and Buyer, and
their respective Boards of Directors shall use their reasonable best efforts to
grant such approvals and to take such other actions as are necessary so that the
transactions contemplated hereby may be consummated as promptly as practicable
on the terms contemplated hereby and shall otherwise use their reasonable best
efforts to eliminate the effects of any such statute or regulation on the
transactions contemplated hereby.
ARTICLE VIII
CONDITIONS PRECEDENT
8.1 Conditions to Each Party's Obligation. The respective obligation of
each party to effect the Merger is subject to the satisfaction or waiver on or
prior to the Closing Date of the following conditions:
(a) Company Stockholder Approval. The Company Stockholder Approval shall
have been obtained if required by applicable law.
(b) HSR Act. The waiting period (and any extension thereof) applicable to
the Merger under the HSR Act shall have been terminated or shall have expired.
(c) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any Governmental
Entity or other legal restraint or prohibition shall be in effect preventing or
prohibiting the acceptance for payment of, or payment for, shares of Common
Stock pursuant to the Offer, or the consummation of the Merger; provided,
however, that the parties hereto shall, subject to the last sentence of Section
7.3 (a) hereof, use their best efforts to have any such injunction, order,
restraint or prohibition vacated.
(d) Statutes; Consents. No statute, rule, order, decree or regulation
shall have been enacted or promulgated by any Governmental Entity of competent
jurisdiction which prohibits the consummation of the Merger.
8.2 Condition to Buyer's and Merger Co.'s Obligation. The obligation of
Buyer and Merger Co. to effect the Merger is subject to Buyer or Merger Co.
having purchased shares of Company Common Stock in the Offer.
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ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1 Termination. This Agreement may be terminated and abandoned at any
time prior to the Effective Time of the Merger, whether before or after approval
of matters presented in connection with the Merger by the stockholders of the
Company:
(a) by mutual written consent of Buyer and the Company; or
(b) by either Buyer or the Company, if any Governmental Entity shall have
issued an order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting or if there shall be in effect
any other legal restraint or prohibition preventing or prohibiting the
acceptance for payment of, or payment for, shares of Company Common Stock
pursuant to the Offer or the consummation of the Merger and such order, decree,
ruling or other action shall have become final and nonappealable (other than due
to the failure of the party seeking to terminate this Agreement to perform its
obligations under this Agreement required to be performed at or prior to the
Effective Time of the Merger); or
(c) by the Company, if Offeror shall not have (i) commenced the Offer
within five (5) business days after the initial public announcement of Buyer's
intention to commence the Offer, or (ii) accepted for payment any shares of
Company Common Stock pursuant to the Offer (other than due to the failure of the
Company to perform its obligations under this Agreement) on or prior to April
30, 1998, or, if any necessary approvals required under the HSR Act shall not
have been obtained by April 30, 1998, on or prior to the earlier of (A) ten (10)
days after receipt of all necessary approvals under the HSR Act or (B) July 15,
1998; or
(d) by the Company, upon its execution, prior to Buyer's or MergerCo's
purchase of shares of Company Common Stock pursuant to the Offer, of a binding
agreement with a third party with respect to a Transaction Proposal, provided
that it has complied with all provisions of this Agreement, including the notice
provisions herein, and that it pays the Termination Fee as provided by and
defined in Section 10.2;
(e) by Buyer in the event of a material breach or failure to perform in any
material respect by the Company of any representation, warranty, covenant or
other agreement contained in this Agreement which cannot be or has not been
cured within 10 days after the giving of written notice to the Company; or
(f) by the Company, in the event of a material breach or failure to perform
in any material respect by MergerCo or Buyer of any representation, warranty,
covenant or other agreement contained in this Agreement which cannot be or has
not been cured within 10 days after the giving of written notice to MergerCo or
Buyer.
(g) by Buyer, if Offeror terminates the Offer in accordance with the terms
of Annex I.
9.2 Effect of Termination. In the event of termination of this Agreement
by either the Company or MergerCo as provided in Section 9.1, this Agreement
shall forthwith become void and have no effect, without any liability or
obligation on the part of MergerCo or the Company, other than the provisions of
Section 4.13, Section 5.5, the last sentence of Section 7.2, this Section 9.2,
Section 10.2 and Section 10.7. Nothing contained in this Section shall relieve
any party for any breach of the representations, warranties, covenants or
agreements set forth in this Agreement.
9.3 Amendment. This Agreement may be amended by the parties at any time
before or after any required approval of matters presented in connection with
the Merger by the stockholders of the Company; provided, however, that after any
such approval, there shall be made no amendment that by law requires further
approval by such stockholders without the further approval of such stockholders.
This Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties.
9.4 Extension; Waiver. At any time prior to the Effective Time of the
Merger, the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties contained in this Agreement or in any
document delivered pursuant to this Agreement or (c) subject to the proviso of
Section 9.3, waive compliance with any of the agreements or conditions contained
in this Agreement. Any agreement on the part of a party to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. The
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failure of any party to this Agreement to assert any of its rights under this
Agreement or otherwise shall not constitute a waiver of such rights.
9.5 Procedure for Termination, Amendment, Extension or Waiver. A
termination of this Agreement pursuant to Section 9.1, an amendment of this
Agreement pursuant to Section 9.3 or an extension or waiver pursuant to Section
9.4 shall, in order to be effective, require in the case of MergerCo or the
Company, action by its Board of Directors or the duly authorized designee of its
Board of Directors.
ARTICLE X
GENERAL PROVISIONS
10.1 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time of the Merger and
all such representations and warranties will be extinguished on consummation of
the Merger and none of the Company, Buyer and MergerCo, nor any officer,
director or employee or shareholder thereof shall be under any liability
whatsoever with respect to any such representation or warranty after such time.
This Section 10.1 shall not limit any covenant or agreement of the parties which
by its terms contemplates performance after the Effective Time of the Merger.
10.2 Fees and Expenses.
(a) In addition to any other amounts which may be payable or become payable
pursuant to any other paragraph of this Section 10.2, the Company shall,
simultaneously with the termination of this Agreement in any of the
circumstances described in Section 10.2(b), reimburse MergerCo for all
out-of-pocket expenses and fees, in an aggregate amount not to exceed $1,500,000
(including, without limitation, fees payable to all banks, investment banking
firms and other financial institutions, and their respective agents and counsel,
and all fees of counsel, accountants, financial printers, experts and
consultants to MergerCo and its affiliates), whether incurred prior to, on or
after the date hereof, in connection with the Merger and the consummation of all
transactions contemplated by this Agreement, and the financing thereof.
(b) If any person (other than MergerCo or any of its affiliates) shall have
made, proposed, communicated or disclosed a Transaction Proposal in a manner
which is or otherwise becomes public and this Agreement is terminated pursuant
to any of the following provisions:
(i) by the Company pursuant to Section 9.1 (d);
(ii) by Buyer pursuant to Section 9.1 (e), other than as a result of a
breach of the representation in clause (i) of Section 4.7 and other than as
a result of facts or circumstances occurring after the date of this
Agreement and not as a result of any action or inaction by the Company or
any of its Subsidiaries in violation of this Agreement;
(iii) by Buyer pursuant to Section 9.1(g), if Offeror has terminated
the Offer as a result of the occurrence of any of the events set forth in
subparagraph (c) of Annex I, other than a breach of the representation in
clause (i) of Section 4.7 and other than as a result of facts or
circumstances occurring after the date of this Agreement and not as a
result of any action or inaction by the Company or any of its Subsidiaries
in violation of this Agreement or subparagraphs (d) or (e) of Annex I;
then the Company shall, simultaneously with such termination of this
Agreement, pay MergerCo a fee of $5,000,000 in cash, which amount shall be
payable in same day funds (the 'Termination Fee').
In addition, (i) if any Person (other than Merger Co. or any of its
affiliates) shall have made, proposed, communicated or disclosed a Transaction
Proposal and the Minimum Condition is not met in the Offer; or (ii) if prior to
any termination of this Agreement, any person or 'group' (as defined in Section
13(d)(3) of the Exchange Act) (other than Buyer or any of its affiliates)
purchases or otherwise acquires, directly or indirectly, beneficial ownership of
10% or more of the outstanding voting securities of the Company, and, if at any
time prior to 12 months following the termination of this Agreement any such
person or 'group' consummates a transaction that would otherwise constitute a
Transaction Proposal, there shall be paid to Buyer immediately prior
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to the consummation of such transaction the Termination Fee. In no event shall
the Company be required to pay more than one Termination Fee pursuant to this
Section 10.2(b).
(c) Except as provided otherwise in paragraph (a) above, all costs and
expenses incurred in connection with this Agreement, and the transactions
contemplated hereby shall be paid by the party incurring such expenses,, except
that the Company shall pay all costs and expenses (i) in connection with
printing and mailing the Proxy Statement, as well as all SEC filing fees
relating to the transactions contemplated herein and (ii) of obtaining any
consents of any third party.
10.3 Notices. 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) to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice):
(a) if to MergerCo or Buyer, to
Sunbeam Corporation
1615 South Congress Avenue
Suite 200
Delray Beach, FL 33445
Telecopier: (561) 243-2218
Attn: General Counsel
with a copy to:
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, NY 10022-3897
Telecopier: (212) 735-2000
Attn: Blaine V. Fogg, Esq.
(b) if to the Company, to
Signature Brands, Inc.
7005 Cochran Road
Glenwillow, OH 44139-4312
Telecopier: (440) 542-4059
Attn: Chief Executive Officer
with copies to:
Hutchins, Wheeler & Dittmar
101 Federal Street
Boston, MA 02110
Telecopier: (617) 951-1295
Attn: James Westra, Esq.
10.4 Definitions. For purposes of this Agreement:
(a) an 'affiliate' of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person;
(b) a 'business day' means any day, other than Saturday, Sunday or a
federal holiday, and shall consist of the time period from 12:01 a.m. through
12:00 midnight Eastern time. In computing any time period under Section 14(d)(5)
or Section 14(d)(6) of the Exchange Act or under Regulation 14D or Regulation
14E, the date of the event which begins the running of such time period shall be
included except that if such event occurs on other than a business day such
period shall begin to run on and shall include the first business day
thereafter;
(c) 'knowledge', with respect to the Company means the actual knowledge of
any one or more of the following officers and employees of the Company and its
Subsidiaries: Meeta Vyas and Steven M. Billick.
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(d) 'Material Adverse Change' or 'Material Adverse Effect' means, when
used in connection with the Company, any change or effect that either
individually or in the aggregate with all other such changes or effects is
materially adverse to the business, financial condition, or results of
operations of the Company and its Subsidiaries taken as a whole and the terms
'material' and 'materially' shall have correlative meanings; provided, however,
that no Material Adverse Change or Material Adverse Effect shall be deemed to
have occurred as a result solely of general economic conditions affecting
generally the industry in which the Company competes and general market
conditions in the United States.
(e) 'person' means an individual, corporation, partnership, joint venture,
association, trust, unincorporated organization or other entity; and
(f) a 'subsidiary' of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board of Directors (or
other governing body) or, if there are no such voting interests, 50% or more of
the equity interests of which is owned directly or indirectly by such first
person or any entity, in which the Company or any of its Subsidiaries is a
general partner.
10.5 Interpretation. When a reference is made in this Agreement to a
Section, Exhibit or Schedule, such reference shall be to a section of, or an
Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words 'include', 'includes' or 'including' are used in
this Agreement, they shall be deemed to be followed by the words -without
limitation'.
10.6 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
10.7 Entire Agreement; No Third-Party Beneficiaries. This Agreement and
the other agreements referred to herein constitute the entire agreement, and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter of this Agreement. This
Agreement, other than Section 7.4, is not intended to confer upon any Person
other than the parties any rights or remedies.
10.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, REGARDLESS OF THE LAWS THAT
MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS.
10.9 Assignment. Neither this Agreement nor any of the rights, interests
or obligations under this Agreement shall be assigned, in whole or in part, by
operation of law or otherwise by any of the parties without the prior written
consent of the other parties; provided, however, that Buyer or MergerCo may,
without the Company's prior written consent, assign its rights under this
Agreement to any financial institution that requires such assignment in
connection with such financial institution's agreement to provide financing to
either Buyer or MergerCo Subject to the preceding sentence, this Agreement will
be binding upon, inure to the benefit of, and be enforceable by, the parties and
their respective successors and assigns.
10.10 Enforcement. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, Buyer, MergerCo and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
SUNBEAM CORPORATION
By: /s/ DAVID C. FANNIN
-------------------
Name: David C. Fannin
Title: Executive Vice President and
General Counsel
SIGNATURE BRANDS USA, INC.
By: /s/ MEETA VYAS
-------------------
Name: Meeta Vyas
Title: Vice Chairman and
Chief Executive Officer
JAVA ACQUISITION CORP.
By: /s/ DAVID C. FANNIN
-------------------
Name: David C. Fannin
Title: Executive Vice President and
General Counsel
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ANNEX I
CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer or this Agreement, and
subject to any applicable rules and regulations of the SEC, including Rule
14e-1(c) relating to MergerCo's obligation to pay for or return tendered shares
after termination of the Offer, Buyer and MergerCo shall not be required to
accept for payment or pay for any shares of Company Common Stock tendered
pursuant to the Offer and may delay acceptance for payment or payment or may
terminate the Offer, if (i) less than 51% of the Fully Diluted Shares of Company
Common Stock has been tendered pursuant to the Offer by the expiration of the
Offer and not withdrawn (the 'Minimum Condition'); (ii) any applicable waiting
period under the HSR Act has not expired or terminated; or (iii) at any time
after the date of this Agreement, and before acceptance for payment of any
shares of Company Common Stock, any of the following events shall occur and be
continuing:
(a) there shall be instituted or pending by any Governmental Entity
any suit, action or proceeding (i) challenging the acquisition by Buyer or
MergerCo of any shares of Company Common Stock under the Offer, or seeking
to restrain or prohibit the making or consummation of the Offer or the
Merger, (ii) seeking to prohibit or materially limit the ownership or
operation by the Company, Buyer or any of Buyer's subsidiaries of a
material portion of the business or assets of the Company or Buyer and its
subsidiaries, taken as a whole, or to compel the Company or Buyer to
dispose of or hold separate any material portion of the business or assets
of the Company or Buyer and its subsidiaries, taken as a whole, in each
case as a result of the Offer or the Merger or (iii) seeking to impose
material limitations on the ability of Buyer or MergerCo to acquire or
hold, or exercise full rights of ownership of, any shares of Company Common
Stock to be accepted for payment pursuant to the Offer including, without
limitation, the right to vote such shares of Company Common Stock on all
matters properly presented to the stockholders of the Company or (iv)
seeking to prohibit Buyer or any of its subsidiaries from effectively
controlling in any material respect any material portion of the business or
operations of the Company;
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable to
the Offer or the Merger, by any Governmental Entity or court, other than
the application to the Offer or the Merger of applicable waiting periods
under the HSR Act, that would result in any of the consequences referred to
in clauses (i) through (iv) of paragraph (a) above;
(c) any of the representations and warranties of the Company contained
in the Agreement shall not be true and correct at and as of the date of
consummation of the Offer (except to the extent such representations and
warranties speak to an earlier date), as if made at and as of the date of
consummation of the Offer, in each case except as contemplated or permitted
by this Agreement and except, in the case of any such breach when such
breach would not have, individually or in the aggregate, a Material Adverse
Effect with respect to the Company or materially affect the ability of the
Company to consummate the Merger or the Offeror to accept for payment or
pay for shares of Company Common Stock pursuant to the Offer;
(d) the Company shall have failed to perform the obligations required
to be performed by it under the Agreement at or prior to the date of
expiration of the Offer, including but not limited to its obligations
pursuant to Section 7.6 hereof, except for such failures to perform as have
not had or would not individually or in the aggregate, have a Material
Adverse Effect with respect to the Company or materially adversely affect
the ability of the Company to consummate the Merger or the Offeror to
accept for payment or pay for shares of Company Common Stock pursuant to
the Offer;
(e) the Board of Directors of the Company or any committee thereof
shall have (i) withdrawn, modified or amended in any respect adverse to
Buyer or MergerCo its approval or recommendation of the Offer or the
Merger, (ii) recommended or approved any Transaction Proposal from a person
other than Buyer, MergerCo or any of their respective affiliates, (iii)
failed to publicly announce, within ten (10) business days after the
occurrence of a Transaction Proposal, its opposition to such Transaction
Proposal, or amended, modified or withdrawn its opposition to any
Transaction Proposal in any manner adverse to Buyer or MergerCo or failed
to promptly reaffirm its recommendation of the Offer or the Merger at the
Buyer's request, or (iv) resolved to do any of the foregoing;
(f) the Agreement shall have been terminated in accordance with its
terms; or
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(g) (i) it shall have been publicly disclosed that any person, entity
or 'group' (as defined in Section 13(d)(3) of the Exchange Act), shall have
acquired beneficial ownership (determined pursuant to Rule 13d-3
promulgated under the Exchange Act) of more than 15% of any class or series
of capital stock of the Company (including the Shares), through the
acquisition of stock, the formation of a group or otherwise, other than
Buyer or an affiliate or any person or group existing which on the date of
the Agreement beneficially owned more than 15% of any class or series of
capital stock of the Company or (ii) the Company shall have entered into a
definitive agreement or agreement in principle with any person with respect
to a Transaction Proposal or similar business combination with the Company
or any subsidiary, which in the reasonable judgment of Buyer or MergerCo in
any such case, and regardless of the circumstances giving rise to such
condition, makes it inadvisable to proceed with the Offer and/or with such
acceptance for payment.
The foregoing conditions are for the sole benefit of the Buyer and MergerCo
and may be waived by Buyer or MergerCo, in whole or in part at any time and from
time to time in the reasonable discretion of Buyer or MergerCo.
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of February 28, 1998 (the
"Agreement"), among JAVA ACQUISITION CORP., a Delaware corporation (the
"Purchaser"), and each person or entity named in Schedule A to this Agreement
(the "Sellers").
WHEREAS, the Purchaser, Sunbeam Corporation, a Delaware
corporation of which the Purchaser is a wholly owned subsidiary ("Parent"), and
Signature Brands USA, Inc., a Delaware corporation (the "Company"), are entering
into an Agreement and Plan of Merger (the "Merger Agreement") simultaneously
with the entry into this Agreement, which provides, among other things, that the
Purchaser, upon the terms and subject to the conditions thereof, make a cash
tender offer (the "Offer") for all issued and outstanding shares of common
stock, par value $.01 per share, of the Company (the "Shares") at a price of
$8.25 per share, and following consummation of the Offer the Purchaser will
merge with and into the Company with the Company as the surviving corporation
(the "Merger") and each then outstanding Share (other than Shares held by (i)
the Parent or any of its wholly owned subsidiaries, (ii) the Company or any of
its wholly owned subsidiaries or (iii) any holder who perfects dissenters'
rights under Delaware law) would be converted
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into the right to receive $8.25 in cash, or any higher price paid per Share in
the Offer; and
WHEREAS, each of the Sellers wishes to sell to the Purchaser,
and the Purchaser wishes to purchase from each of the Sellers, upon the terms
and subject to the conditions hereinafter set forth, the number of Shares (the
"Seller's Shares") set forth in Schedule A hereto opposite the name of each of
the Sellers.
NOW, THEREFORE, the parties hereto agree as follows:
1. Sellers' Representations. Each of the Sellers severally
represents and warrants to the Purchaser (a) that such Seller has the power and
authority (or the capacity if an individual) to execute and deliver this
Agreement, (b) that, if a corporation, partnership or other entity, this
Agreement has been duly authorized by all requisite action on the part of the
Seller, (c) that the Seller has duly executed and delivered this Agreement and
this Agreement is a valid and binding agreement, enforceable against such Seller
in accordance with its terms, (d) that neither the execution of this Agreement
nor the consummation by such Seller of the transactions contemplated hereby will
constitute a violation of, or conflict with, or default under, any contract,
commitment, agreement, understanding, arrangement or restriction of any kind to
which such Seller is a party or by which such Seller is bound and, if the Seller
is a corporation, partnership or other entity, the organizational documents
thereof, (e) that on the date hereof such Seller has, and at any
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Closing (as defined below) hereunder such Seller will have (without exception),
good and valid title to such Seller's Shares, free and clear of all claims,
liens, charges, encumbrances and security interests, restricting such Seller's
ability to enter into this Agreement or perform its obligations hereunder, (f)
that there are no options or rights to purchase or acquire, or agreements
relating to any such rights with respect to, any of such Seller's Shares except
pursuant to this Agreement, (g) that the transfer of such Seller's Shares to the
Purchaser hereunder will vest in the Purchaser good and valid title to such
Shares, free and clear of all claims, liens, charges, encumbrances, security
interests or restrictions on voting and (h) that the number of Shares set forth
in Schedule A hereto opposite the name of such Seller constitutes all of the
Shares owned beneficially or of record by such Seller (other than, in the case
of the Sellers listed on Schedule A other than ML-Lee Acquisition Fund, L.P.,
Thomas H. Lee Equity Partners, L.P. and State Street Bank and Trust Company, not
individually but as trustee of the 1989 Thomas H. Lee Nominee Trust
(collectively, the "Major Sellers"), for differences therefrom which are not
material).
2. Purchaser's Representations. The Purchaser represents and
warrants to each of the Sellers that (a) the Purchaser has duly authorized,
executed and delivered this Agreement and this Agreement is a valid and binding
agreement, enforceable against the Purchaser in accordance with its terms and
(b) the Purchaser will acquire the Shares for its own account and not with a
view to or for sale in
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connection with any distribution thereof, and the Purchaser will not sell or
otherwise dispose of the Shares except in compliance with, or pursuant to an
exemption from registration under, the Securities Act of 1933, as amended, and
the rules and regulations thereunder.
3. Agreement to Sell. At the Closing provided for in Section 4
of this Agreement and subject to the conditions in Section 5 of this Agreement,
each of the Sellers will sell, transfer and deliver such Seller's Shares to the
Purchaser (duly endorsed for transfer in blank or accompanied by stock transfer
powers duly executed in blank, with all necessary stock transfer tax stamps
affixed and cancelled) and the Purchaser will purchase such Seller's Shares and
deliver to such Seller a certified or official bank check or checks payable to
or upon the order of such Seller in immediately available funds, at a price per
Share equal to $8.25 such higher per Share price as the Purchaser may have paid
pursuant to the Offer. Each Seller will, upon request of the Purchaser, promptly
execute and deliver all additional documents reasonably deemed by the Purchaser
to be necessary, appropriate or desirable to effect, complete and evidence the
sale, assignment and transfer of such Seller's Shares pursuant to this
Agreement.
4. Closing. The closing (the "Closing") of the purchase and
sale hereunder shall take place at the office of Skadden, Arps, Slate, Meagher &
Flom LLP, 919 Third Avenue, New York, New York 10022, or such other place as the
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parties may mutually agree, on the earlier to occur of (i) the first business
day after the purchase of Shares by the Purchaser pursuant to the Offer or (ii)
if the Offer has otherwise terminated or expired, such date (which shall be at
least one business day following the date of notice) as the Purchaser may
specify in writing to the Sellers. Payment for the Shares shall be in
immediately available funds. Any Seller may tender such Seller's Shares pursuant
to the Offer, provided, however, that until such time as such Shares are
accepted for payment pursuant to the Offer, such Shares shall continue to be
governed by this Agreement. If a Seller's Shares are tendered and accepted for
payment pursuant to the Offer, the payment for such Seller's Shares pursuant to
the Offer shall constitute the Closing of the purchase and sale of such Shares
hereunder.
5. Conditions to Closing. (a) The obligations of the
Purchaser and each of the Sellers under this Agreement shall be subject to the
satisfaction at the Closing of each of the following conditions:
(i) Neither the Purchaser nor such Seller
shall be subject to any order, decree or injunction of a court of
competent jurisdiction which prevents or delays the consummation of the
transactions contemplated by this Agreement and such Closing shall not
be prohibited by any rule, regulation, ruling or law.
5
<PAGE>
(ii) The applicable waiting period with
respect to such Closing under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), shall have
expired or been terminated.
(iii) The representations and warranties of
such Seller (in the case of the Purchaser) or the Purchaser (in the
case of each Seller) shall be true and correct in all material respects
and such Seller (in the case of the Purchaser) or the Purchaser (in the
case of each Seller) shall have complied in all material respects with
its covenants hereunder.
6. Changes in Shares. In the event of any change in the number
of Shares outstanding by recapitalization, declaration of a stock split or
combination or payment of a stock dividend or the like, the number of Shares to
be transferred to the Purchaser and the per Share payments to be made to the
Sellers shall be appropriately adjusted. Each Seller's Shares shall include all
Shares acquired after the date hereof by such Seller and all dividends or
distributions in respect of the Seller's Shares.
7. Seller's Covenants. Except as provided for herein, each
Seller agrees not to:
6
<PAGE>
(a) sell, transfer, pledge, assign or otherwise
dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, assignment or other
disposition of such Seller's Shares;
(b) grant any proxies, deposit of such Seller's
Shares into a voting trust or enter into a voting agreement with respect to any
of such Shares;
(c) solicit, encourage, participate in or initiate
discussions or negotiations with, or provide information to, any person, other
than Parent or any affiliate of Parent, concerning any merger, sale of assets,
sale of shares of capital stock or similar transactions involving the Company
or any subsidiary or division of the Company; provided nothing herein shall be
deemed to limit or restrict in any respect the ability of Directors of the
Company who are Sellers or may be affiliated with Sellers from exercising the
fiduciary duties in accordance with Section 7.6 of the Merger Agreement; or
(d) take any action which would make any
representation or warranty of such Seller herein untrue or incorrect.
8. Seller's Actions. Each Major Seller hereby agrees that at
any meeting of the stockholders of the Company however called, it shall (a) vote
such Seller's Shares in favor of the Merger or any other transaction
contemplated by the Merger Agreement, (b) vote such Seller's Shares against any
action or agreement that would result in a breach in any material respect of any
covenant, representation or
7
<PAGE>
warranty or any other obligation of the Company under the Merger Agreement and
(c) vote such Seller's Shares against any action or agreement that would impede,
interfere with or discourage the Offer or the Merger, including, but not limited
to: (i) any extraordinary corporate transaction, such as a merger,
reorganization or liquidation involving the Company or any of its subsidiaries,
(ii) a sale or transfer of a material amount of assets of the Company or any of
its subsidiaries, (iii) any change in the management or Board of Directors of
the Company (other than as contemplated by the Merger Agreement), (iv) any
change in the present capitalization or dividend policy of the Company or (v)
any other material change in the Company's corporate structure or business. Each
Major Seller hereby grants the Purchaser as irrevocable proxy and irrevocably
appoints the Purchaser or its designees, with full power of substitution, its
attorney and proxy to vote all such Seller's Shares in respect of any of the
matters set forth in clauses (a) through (c) of this Section and in the manner
specified in such clauses, provided, however, that such proxy shall not apply to
the matters set forth in clause (c)(iii) of this Section until any waiting
period applicable thereto under the HSR Act shall have expired or been
terminated. Such Seller acknowledges and agrees that this proxy is coupled with
an interest, constitutes, among other things, an inducement for Parent and the
Purchaser to enter into the Merger Agreement, is irrevocable and shall not be
terminated by operation of law or otherwise upon the occurrence of any event
(other than the termination of this
8
<PAGE>
Agreement) and that no subsequent proxies will be given (and if given will not
be effective). Any such proxy shall terminate upon the termination of this
Agreement.
9. Legend. As soon as practicable after the execution of this
Agreement, each Seller shall surrender the certificates representing such
Seller's Shares to the Purchaser so that the following legend may be placed on
such certificates:
"The shares of capital stock represented by this certificate
are subject to a Stock Purchase Agreement, dated as of February 28,
1998, between [the Purchaser] and [the Seller]."
10. Specific Enforcement. The parties hereto acknowledge that
damages would be an inadequate remedy for a breach of this Agreement and that
the obligations of the parties hereto shall be specifically enforceable, in
addition to any other remedy which may be available at law or in equity.
11. Brokerage Fees. Each Seller and the Purchaser, in
connection with the transaction contemplated herein, severally and not jointly
agrees to indem nify and hold the other harmless from and against any and all
claims, liabilities or obligations with respect to any brokerage fees,
commissions or finders' fees asserted by any person on the basis of any act or
statement alleged to have been made by such party or its affiliate (other than,
in the case of the Sellers, an affiliate which is also a Seller).
9
<PAGE>
12. Expenses. Each party hereto shall pay its own expenses
incurred in connection with this Agreement.
13. Survival. Notwithstanding anything contained in Section
14(g) hereof to the contrary, none of the representations, warranties and
agreements made by each of the Sellers and by the Purchaser in this Agreement
shall survive the Closing hereunder and any investigation at any time made by or
on behalf of any party hereto.
14. Miscellaneous.
(a) Amendment, Etc. This Agreement may not be
modified, altered or supplemented except upon the execution and delivery of a
written agreement executed by the parties hereto.
(b) Assignment. No party to this Agreement may assign
any of its rights or obligations under this Agreement without the prior consent
of the other parties except that the rights and obligations of the Purchaser may
be assigned by the Purchaser to Parent or any of its other wholly owned
subsidiaries but no such transfer shall relieve the Purchaser of its obligations
hereunder if such transferee does not perform such obligations.
(c) Binding Effect. This Agreement will be binding
upon, inure to the benefit of and be enforceable by each Seller and such
Seller's respective heirs, beneficiaries, executors, representatives and
permitted assigns.
10
<PAGE>
(d) Notices. All notices, claims, requests, demands
and other communications hereunder will be in writing and will be deemed to have
been duly given upon receipt as follows:
(a) If to the Purchaser, to:
c/o Sunbeam Corporation
1615 South Congress Avenue
Delray Beach, Florida 33445
Attention: General Counsel
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attention: Blaine V. Fogg, Esq.
(b) If to the Seller, to such Seller at the address set
forth under his name in Schedule A;
with a copy to:
Hutchins, Wheeler & Dittmar
101 Federal Street
Boston, Massachusetts 02110
Attention: James Westra, Esq.
or to such other address as the person to whom notice is to be given may have
previously furnished to the others in writing in the manner set forth above.
11
<PAGE>
(e) Counterparts. This Agreement may be executed in
two or more counterparts, each of which will be deemed to be an original but
all of which together will constitute one and the same instrument.
(f) Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable Delaware
principles of conflicts of law.
(g) Termination. Except for Sections 9, 11, 13 and 15
hereof, this Agreement shall terminate on the earliest of (i) the purchase of
Shares pursuant to the Offer, (ii) the termination of the Merger Agreement in
accordance with its terms and (iii) 12 months from the date hereof.
15. Sale of Shares. In the event that within 12 months
following the expiration of the Offer, a Seller shall sell, transfer or
otherwise commit to dispose any or all of such Shares to any party other than
the Parent or an affiliate of the Parent (a "Sale") and realize a Profit (as
defined below) from such Sale, then such Seller shall pay to the Parent an
amount equal to the Profit. Such amount shall be paid to the Parent promptly
following the receipt of proceeds by such Seller from such Sale. The term
"Profit" shall mean the excess, if any, of (a) the aggregate consideration
received by such Seller in connection with the Sale over (b) the
12
<PAGE>
number of Shares sold, transferred or disposed of by such Seller in connection
with the Sale multiplied by the Offer Price.
13
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by each Seller and a duly authorized officer of the Purchaser on the
day and year first written above.
JAVA ACQUISITION CORP.
By /s/ David C. Fannin
------------------------
Executive Vice President
and General Counsel
THOMAS H. LEE EQUITY PARTNERS, L.P.
By: THL Equity Advisors
Limited Partnership
By: THL Equity Trust
Its General Partner
By /s/ Scott Schoen
---------------------
Name: Scott Schoen
Title: Vice President
ML-LEE ACQUISITION FUND, L.P.
By: Mezzanine Investments, L.P.
Its Managing General Partner
By: ML Mezzanine Inc.
Its General Partner
By /s/ James V. Caruso
-------------------------------
Name: James V. Caruso
Title: Executive Vice President
STATE STREET BANK AND TRUST COMPANY,
not individually but as Trustee of the
1989 THOMAS H. LEE NOMINEE TRUST
By /s/ Gerald R. Webber
------------------------
Vice President
<PAGE>
/s/ John W. Childs
--------------------------
JOHN W. CHILDS
/s/ David V. Harkins
--------------------------
DAVID V. HARKINS
/s/ Thomas R. Shepherd
--------------------------
THOMAS R. SHEPHERD
/s/ Thomas R. Shepherd
---------------------
THOMAS R. SHEPHERD MONEY PURCH.
/s/ Glenn H. Hutchins
--------------------------
GLENN H. HUTCHINS
/s/ Scott A. Schoen
--------------------------
SCOTT A. SCHOEN
/s/ C. Hunter Boll
--------------------------
C. HUNTER BOLL
/s/ Steven G. Segal
--------------------------
STEVEN G. SEGAL
/s/ Anthony J. Dinovi
--------------------------
ANTHONY J. DINOVI
/s/ Thomas M. Hagerty
--------------------------
THOMAS M. HAGERTY
/s/ Joseph I. Incandela
--------------------------
JOSEPH I. INCANDELA
/s/ Warren C. Smith, Jr.
--------------------------
WARREN C. SMITH, JR.
/s/ Tina B. Smith
--------------------------
TINA B. SMITH
<PAGE>
/s/ Glenn A. Hopkins
--------------------------
GLENN A. HOPKINS
/s/ Adam L. Suttin
--------------------------
ADAM L. SUTTIN
/s/ Seth W. Lawry
--------------------------
SETH W. LAWRY
/s/ Wendy L. Masler
--------------------------
WENDY L. MASLER
/s/ Todd M. Abbrecht
--------------------------
TODD M. ABBRECHT
/s/ Charles A. Brizlus
--------------------------
CHARLES A. BRIZLUS
<PAGE>
SCHEDULE A
Number of Shares
Name and Address of Common Stock
of Seller(1) of the Company
---------------- ----------------
Thomas H. Lee Equity Partners, L.P. 1,818,203
ML-Lee Acquisition Fund, L.P. 1,563,053
State Street Bank and Trust Company
Not Individually but as Trustee of the
1989 Thomas H. Lee Nominee Trust 1,025,566
John W. Childs 191,577
David V. Harkins 44,481
Thomas R. Shepherd 44,607
Thomas R. Shepherd Money Purch. 19,611
Glenn H. Hutchins 31,750
Scott A. Schoen 19,136
C. Hunter Boll 19,136
Steven G. Segal 5,783
Anthony J. Dinovi 6,298
Thomas M. Hagerty 6,798
- --------
1 Address for all Sellers, until notice of change is given, is:
c/o Thomas H. Lee Company
75 State Street
Boston, Massachusetts 02109
A-1
<PAGE>
Joseph I. Incandela 1,398
Warren C. Smith, Jr. 5,814
Tina B. Smith 3,876
Glenn A. Hopkins 3,876
Adam L. Suttin 2,438
Seth W. Lawry 4,476
Wendy L. Masler 500
Todd M. Abbrecht 231
Charles A. Brizius 311
A-2
<PAGE>
Exhibit 99(c)(3)
SIGNATURE BRANDS USA, INC.
February 17, 1998
David Fannin, Esq.
Sunbeam Corporation
1615 South Congress Avenue, Suite 200
Delray Beach, Florida 33445
Dear Sir:
In connection with your meetings and discussions with employees of
Signature Brands USA, Inc. (the 'Company') regarding a possible business
transaction (a 'Transaction'), you have requested certain oral and written
information concerning the Company. As a condition of such meetings and
discussions and being furnished with such information (referred to herein and
defined below as the 'Evaluation Material'), you agree to the following:
1. The Evaluation Material will be used solely for the purpose of
evaluating a possible Transaction involving the Company. Such
information will be kept confidential by you and your representatives,
advisors, directors, officers, employees, affiliates agents and clients
(collectively your 'Representatives'), except that you may disclose the
Evaluation Material or portions thereof to those of your
Representatives who need to know such information for the purpose of
evaluating the merits of a possible Transaction with the Company. You
agree that you will inform your Representatives in advance of the
confidential nature of the Evaluation Material, and that you will be
responsible for any breach of this agreement by your Representatives.
You agree to undertake all reasonable efforts to safeguard the
Evaluation Material you receive from the Company from disclosure or use
other than as permitted hereby.
2. The term 'Evaluation Material' shall mean all oral, written or
electronic information, whether or not labeled, furnished or otherwise
acquired by you from the Company in any manner, whether before, on or
after the date of this agreement, relating to the Company or the
possible Transaction, including but not limited to information
regarding finances, markets, properties, methods of doing business,
personnel, legal affairs, plans, sales, products, processes and
customers. The term 'Evaluation Material' does not include information
which (i) is or becomes generally available to the public other than as
a result of a disclosure by your or any of your Representatives in
violation of this agreement, (ii) was available to you on a
non-confidential basis from a third party prior to its disclosure
pursuant to this agreement, provided that to your knowledge after
inquiry the third party was not bound by a contractual, legal or
fiduciary obligation of confidentiality to the Company and did not
receive the information from another third party source which was so
bound or (iii) becomes available to you on a non-confidential basis
from a third party, provided that to your knowledge after inquiry the
third party is not bound by a contractual, legal or fiduciary
obligation of confidentiality to the Company and did not receive the
information from another third party source who is so bound.
3. Without the prior written consent of the Company, for a period of two
years, you will not, and will direct your Representatives not to,
directly or indirectly, solicit for employment any management employee,
as of the date of this agreement, of the Company. Nothing herein will
preclude you from entering into independent arrangements with persons
who are not currently management employees with the Company.
4. Without the prior written consent of the Company, you will not, and
will direct your Representatives not to, and without your prior written
consent the Company will not, disclose to any person (i) that this
agreement has been entered into; (ii) that any investigators,
discussions or negotiations are taking place concerning a possible
Transaction involving the Company; or (iii) that you have requested or
received Evaluation Material from the Company, or any of the terms,
conditions or other facts with respect to any such possible
Transaction, including the status thereof.
1
<PAGE>
5. As quickly as practicable following a request by the Company, you will
(i) return to the Company all written material containing any of the
Evaluation Material (whether prepared by the Company or otherwise) and
all copies, extracts or other reproductions in whole or in part of such
written material, in your possession or in the possession of your
Representatives, (ii) destroy all copies of any analyses, compilations,
studies or other documents prepared by you or your Representatives for
your use containing, utilizing or reflecting any Evaluation Material
and (iii) provide the Company with a written certification of such
return and destruction. You acknowledge and agree that such return or
destruction shall not relieve you of your obligations of
confidentiality and your other obligations hereunder.
6. In the event that you or your Representatives are requested or required
(by oral questions, interrogatories, requests for information or
documents, subpoena, investigative demand or similar process) to
disclose any Evaluation Material or any of the information referred to
in paragraph 4 of this letter, you will give the Company prompt written
notice of such request or requirement as promptly as reasonably
practicable under the circumstances and the information which is the
subject thereof so that the Company may seek an appropriate protective
order or other remedy and waive your compliance with the provisions of
this agreement. You will use your best efforts to cooperate with the
Company (at the Company's expense) to obtain such protective order or
other remedy. In the event that such protective order or other remedy
is not obtained or the Company does not waive compliance with the
relevant provisions of this agreement, if you are nonetheless upon
advice of your legal counsel, required to disclose information to a
tribunal (or stand liable for contempt or suffer other censure or
penalty) you may disclose such information to such tribunal; provided,
however, that you shall give the Company notice of the information to
be disclosed as far in advance as reasonably practicable under the
circumstances and shall use your reasonable efforts (at the Company's
expense) to obtain an order or other reliable assurance that
confidential treatment will be accorded to any portion of such
information as the Company designates.
7. You understand and acknowledge that the Company is not making any
representation or warranty, express or implied, as to the accuracy or
completeness of the Evaluation Material and neither the Company nor any
of its stockholders, owners, or Representatives, will have any
liability to you or any other person resulting from your use of or
reliance upon the Evaluation Material.
8. You also understand and agree that unless and until a definitive
Transaction agreement has been executed and delivered, no contract or
agreement providing for a Transaction with the Company shall be deemed
to exist between you and the Company, and neither the Company nor you
will be under any legal obligation of any kind whatsoever with respect
to such Transaction by virtue of this or any written or oral expression
thereof, except, in the case of this agreement, for the matters
specifically agreed to herein. For purposes of this paragraph, the term
'definitive Transaction agreement' does not include an executed letter
of intent or any other preliminary written agreement, nor does it
include any written or oral acceptance of an offer, bid proposal or
expression of interest on your part.
9. Nothing contained in this agreement shall (a) limit the right of the
Company to terminate your access to the Evaluation Material at any
time, to reject any or all proposals and terminate discussions and
negotiations with you or your Representatives at any time, or to enter
into negotiations relating to, or consummate a transaction with, any
other party or parties or (b) limit your right to terminate discussions
with the Company at any time.
10. You agree and acknowledge that irreparable injury may result to the
Company in the event of a breach by you or your Representatives of your
obligations hereunder as to the Company, and in the event of such
breach or threat thereof, the Company shall be entitled to, in addition
to all other remedies and damages available at law or in equity, seek
specific performance, temporary and permanent injunctive relief or
other equitable relief to restrain such breach by you without the
necessity of proving actual damage or the likelihood of irreparable
harm. No failure or delay by the Company in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or future
exercise of any right, power or privilege.
2
<PAGE>
11. This agreement is for the benefit of you and the Company, and shall be
governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts. This agreement is not assignable by you
without the prior written consent of the Company.
12. This agreement and the obligations of the parties hereto shall cease
and be of no further force and effect from and after the third
anniversary of the date hereof except for paragraph 3 of this
agreement.
Please sign both copies of this letter and return one executed copy to me,
which will then constitute our mutual agreement with respect to the subject
matter of this letter.
Very truly yours
SIGNATURE BRANDS USA, INC.
By: /s/ MEETA VYAS
-----------------------------------
Meeta Vyas, CEO
ACCEPTED AND AGREED:
as of February 17, 1998.
SUNBEAM CORPORATION
By: /s/ DAVID C. FANNIN
------------------------------------
Name: David C. Fannin
Title: Executive Vice President and
General Counsel
3
