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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
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UNISOURCE WORLDWIDE, INC.
(Name of Subject Company)
ATLANTA ACQUISITION CORP.
GEORGIA-PACIFIC CORPORATION
(Bidders)
Common Stock, Par Value $.001 Per Share
(Title of Class of Securities)
909208 10 0
(CUSIP Number of Class of Securities)
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James F. Kelley, Esq.
Senior Vice President Law and General Counsel
Georgia-Pacific Corporation
133 Peachtree, N.E.
Atlanta, GA 30303
(404) 652-4000
(Name, Address and Telephone Number of Persons Authorized to Receive Notices
and Communications on Behalf of Bidders)
With Copies to:
Creighton O'M. Condon, Esq.
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
(212) 848-4000
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CALCULATION OF FILING FEE
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Transaction Valuation* $904,726,584 Amount of Filing Fee $180,945.32
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* Calculated by multiplying $12.00, the per share tender offer price, by
75,393,882, the sum of the 70,217,397 currently outstanding shares of
Common Stock sought in the Offer and the 5,176,485 shares of Common Stock
subject to options outstanding as of May 25, 1999.
** Calculated as 1/50 of 1% of the transaction value.
[_] 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.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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1.
Name of Reporting Person S.S. or I.R.S. Identification
No. of Person Above
George-Pacific Corporation
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2.
Check the Appropriate Box if a Member of a Group
(a) [_]
(b) [_]
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3.
SEC Use Only
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4.
Sources of Funds BK
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5.
Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(e) or 2(f) [_]
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6.
Citizenship or Place of Incorporation
Georgia
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7.
Aggregate Amount Beneficially Owned by Each Reporting
Person 1,000 shares that may be deemed beneficially
owned are described herein in Section 8 ("Certain
Information Concerning Purchaser and Parent") of the
Offer to Purchase.
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8.
Check Box if the Aggregate Amount in Row (7) Excludes [_]
Certain Shares
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9.
Percent of Class Represented by Amount in Row (7)
--
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10.
Type of Reporting Person
CO
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2
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1.
Name of Reporting Person S.S. or I.R.S. Identification
No. of Person Above
Atlanta Acquisition Corp.
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2.
Check the Appropriate Box if a Member of a Group
(a) [_]
(b) [_]
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3.
SEC Use Only
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4.
Sources of Funds AF
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5.
Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(e) or 2(f) [_]
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6.
Citizenship or Place of Incorporation
Delaware
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7.
Aggregate Amount Beneficially Owned by Each Reporting
Person 1,000 shares that may be deemed beneficially
owned are described herein in Section 8 ("Certain
Information Concerning Purchaser and Parent") of the
Offer to Purchase.
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8.
Check Box if the Aggregate Amount in Row (7) Excludes [_]
Certain Shares
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9.
Percent of Class Represented by Amount in Row (7)
--
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10.
Type of Reporting Person
CO
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3
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This Tender Offer Statement on Schedule 14D-1 (the "Statement") relates to
the offer by Atlanta Acquisition Corp., a Delaware corporation ("Purchaser")
and a wholly owned subsidiary of Georgia-Pacific Corporation, a Georgia
corporation ("Parent"), to purchase all outstanding shares (the "Shares") of
common stock, par value $.001 per share, of Unisource Worldwide, Inc., a
Delaware corporation (the "Company"), at a price of $12.00 per Share, net to
the seller in cash, upon the terms and subject to the conditions set forth in
Purchaser's Offer to Purchase dated May 28, 1999 (the "Offer to Purchase") and
in the related Letter of Transmittal (which together with any amendments or
supplements thereto, collectively constitute the "Offer"), copies of which are
attached hereto as Exhibits (a)(1) and (a)(2), respectively.
Item 1. Security and Subject Company.
(a) The name of the subject company is Unisource Worldwide, Inc., a Delaware
corporation (the "Company"), which has its principal executive offices at 1100
Cassatt Road, Berwyn, Pennsylvania 19312.
(b) The exact title of the class of equity securities being sought is shares
of common stock, par value $.001 per share, of the Company. The information set
forth in the Introduction of the Offer to Purchase and Section 1 ("Terms of the
Offer; Expiration Date") of the Offer to Purchase is incorporated herein by
reference.
(c) The information concerning the principal market in which the Shares are
traded and certain high and low sales prices for the Shares in such principal
market set forth in Section 6 ("Price Range of Shares; Dividends") of the Offer
to Purchase is incorporated herein by reference.
Item 2. Identity and Background.
(a)-(d) and (g) This Statement is filed by Purchaser and Parent. The
information concerning the name, state or other place of organization,
principal business and address of the principal office of each of Purchaser and
Parent, and the information concerning the name, business address, present
principal occupation or employment and the name, principal business and address
of any corporation or other organization in which such employment or occupation
is conducted, material occupations, positions, offices or employments during
the last five years and citizenship of each of the executive officers and
directors of Purchaser and Parent are set forth in the Introduction, Section 8
("Certain Information Concerning Purchaser and Parent") and Schedule I of the
Offer to Purchase and are incorporated herein by reference.
(e) and (f) During the last five years, none of Purchaser or Parent, and, to
the best knowledge of Purchaser and Parent, none of the persons listed in
Schedule I of the Offer to Purchase has been (i) convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any
violation of such laws.
Item 3. Past Contacts, Transactions or Negotiations with the Subject Company.
(a) The information set forth in Section 8 ("Certain Information Concerning
Purchaser and Parent") and Section 10 ("Background of the Offer; Contacts with
the Company; the Merger Agreement") of the Offer to Purchase is incorporated
herein by reference.
(b) The information set forth in the Introduction, Section 7 ("Certain
Information Concerning the Company"), Section 8 ("Certain Information
Concerning Purchaser and Parent"), Section 10 ("Background of the Offer;
Contacts with the Company; the Merger Agreement") and Section 11 ("Purpose of
the Offer; Plans for the Company After the Offer and the Merger") of the Offer
to Purchase is incorporated herein by reference.
Item 4. Source and Amount of Funds or Other Consideration.
(a)-(c) The information set forth under Section 9 ("Financing of the Offer
and the Merger") of the Offer to Purchase is incorporated herein by reference.
4
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Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder.
(a)-(e) The information set forth in the Introduction, Section 10
("Background of the Offer; Contacts with the Company; the Merger Agreement")
and Section 11 ("Purpose of the Offer; Plans for the Company After the Offer
and the Merger") of the Offer to Purchase is incorporated herein by reference.
(f) and (g) The information set forth in Section 13 ("Effect of the Offer on
the Market for Shares, Exchange Listings and Exchange Act Registration") of the
Offer to Purchase is incorporated herein by reference.
Item 6. Interest in Securities of the Subject Company.
(a) and (b) The information set forth in Section 8 ("Certain Information
Concerning Purchaser and Parent") 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 8 ("Certain
Information Concerning Purchaser and Parent"), Section 10 ("Background of the
Offer; Contacts with the Company; the Merger Agreement") and Section 11
("Purpose of the Offer; Plans for the Company After the Offer and the Merger")
of the Offer to Purchase is incorporated herein by reference.
Item 8. Persons Retained, Employed or to Be Compensated.
The information set forth in the Introduction and 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 8 ("Certain Information Concerning
Purchaser and Parent") of the Offer to Purchase is incorporated herein by
reference.
Item 10. Additional Information.
(a) Not applicable.
(b) and (c) The information set forth under Section 15 ("Certain Legal
Matters and Regulatory Approvals") of the Offer to Purchase is incorporated
herein by reference.
(d) The information set forth under Section 13 ("Effect of the Offer and
Merger on the Market for the Shares, Exchange Listing and Exchange Act
Registration") of the Offer to Purchase is incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in the Offer to Purchase and Letter of
Transmittal and the Agreement and Plan of Merger, dated as of May 25, 1999,
among Parent, Purchaser and the Company, copies of which are attached hereto as
Exhibits (a)(1), (a)(2) and (c)(1), is incorporated herein by reference.
5
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Item 11. Material to be Filed as Exhibits.
(a)(1) Form of Offer to Purchase dated May 28, 1999.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter from Wasserstein Perella & Co., Inc. to Brokers,
Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees to Clients.
(a)(6) Form of Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Summary Advertisement as published in The Wall Street Journal on May
28, 1999.
(a)(8) Press Release issued by Parent on May 17, 1999.
(b)(1) Letter of Bank America National Trust and Savings Association to
Parent.
(c)(1) Agreement and Plan of Merger, dated as of May 25, 1999, among
Parent, Purchaser and the Company.
(c)(2) Confidentiality Agreement, dated as of May 13, 1999, between Parent
and the Company.
(c)(3) Confidentiality Agreement, dated as of May 13, 1999, between Parent
and the Company.
(d) None.
(e) Not applicable.
(f) None.
6
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
May 28, 1999
ATLANTA ACQUISITION CORP.
BY: /s/ James F. Kelley
----------------------------------
Name: James F. Kelley
Title: Senior Vice President and
General Counsel
7
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
May 28, 1999
GEORGIA-PACIFIC CORPORATION
BY: /s/ James F. Kelley
----------------------------------
Name: James F. Kelley
Title: Vice President and
Secretary
8
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
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<C> <S>
(a)(1) Form of Offer to Purchase dated May 28, 1999.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter from Wasserstein Perella & Co. to Brokers,
Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees to Clients.
(a)(6) Form of Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Summary Advertisement as published in The Wall Street Journal on
May 28, 1999.
(a)(8) Press Release issued by Parent dated May 17, 1999.
(b)(1) Letter of Bank of America National Trust and Savings Association
to Parent.
(c)(1) Agreement and Plan of Merger, dated as of May 25, 1999, among
Parent, Purchaser and the Company.
(c)(2) Confidentiality Agreement dated as of May 13, 1998 between
Parent and the Company.
(c)(3) Confidentiality Agreement dated as of May 13, 1999 between
Parent and the Company.
(d) None.
(e) Not applicable.
(f) None.
</TABLE>
9
<PAGE>
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
UNISOURCE WORLDWIDE, INC.
at
$12.00 NET PER SHARE
by
ATLANTA ACQUISITION CORP.,
a wholly owned subsidiary
of
GEORGIA-PACIFIC CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON JUNE 25, 1999 UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES WHICH, TOGETHER WITH ANY SHARES OWNED BY GEORGIA-PACIFIC CORPORATION OR
ATLANTA ACQUISITION CORP., CONSTITUTES AT LEAST A MAJORITY OF THE SHARES (AS
DEFINED BELOW) OUTSTANDING ON A FULLY DILUTED BASIS OF UNISOURCE WORLDWIDE,
INC. AND (2) ANY APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, HAVING EXPIRED OR BEEN
TERMINATED.
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THE BOARD OF DIRECTORS OF UNISOURCE WORLDWIDE, INC., BY THE UNANIMOUS VOTE
OF ALL DIRECTORS PRESENT AND VOTING, HAS DETERMINED THAT THE MERGER AGREEMENT
AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER,
ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF UNISOURCE
WORLDWIDE, INC., APPROVED THE MERGER AGREEMENT, THE OFFER AND THE MERGER,
DECLARED THE MERGER AGREEMENT TO BE ADVISABLE AND RESOLVED TO RECOMMEND THAT
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
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IMPORTANT
Any stockholder desiring to tender all or any portion of his shares of
Common Stock, par value $.001 per share (the "Shares"), of Unisource
Worldwide, Inc. should either (1) complete and sign the Letter of Transmittal
(or a facsimile thereof) in accordance with the instructions in the Letter of
Transmittal and mail or deliver it together with the certificate(s) evidencing
tendered Shares, and any other required documents, to the Depositary (as
defined herein) or, in the case of a book-entry transfer effected pursuant to
the procedures described in Section 3, deliver an Agent's Message (as defined
herein) and tender such Shares pursuant to the procedure for book-entry
transfer set forth in Section 3 or (2) 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 if such stockholder desires to tender such Shares.
A stockholder who desires to tender Shares and whose certificates evidencing
such Shares are not immediately available, or who cannot comply with the
procedure for book-entry transfer on a timely basis or who cannot deliver all
required documents to the Depository prior to expiration of the Offer, may
tender such Shares by following the procedure for guaranteed delivery set
forth in Section 3.
Questions or requests for assistance may be directed to the Information
Agent (as defined herein) or to the Dealer Manager (as defined herein) at
their respective addresses and telephone numbers set forth on the back cover
of this Offer to Purchase. Additional copies of this Offer to Purchase, the
Letter of Transmittal and the Notice of Guaranteed Delivery may also be
obtained from the Information Agent or from brokers, dealers, commercial banks
or trust companies.
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The Dealer Manager for the Offer is:
Wasserstein Perella & Co., Inc.
The date of this Offer to Purchase is May 28, 1999
<PAGE>
TABLE OF CONTENTS
Page
<TABLE>
<C> <S> <C>
INTRODUCTION............................................................. 1
THE OFFER................................................................ 4
1. Terms of the Offer; Expiration Date........................ 4
2. Acceptance for Payment and Payment for Shares.............. 5
3. Procedures for Accepting the Offer and Tendering Shares.... 5
4. Withdrawal Rights.......................................... 8
5. Certain Federal Income Tax Consequences.................... 8
6. Price Range of Shares; Dividends........................... 9
7. Certain Information Concerning the Company................. 10
8. Certain Information Concerning Purchaser and Parent........ 12
9. Financing of the Offer and the Merger...................... 15
Background of the Offer; Contacts with the Company; the
10. Merger Agreement........................................... 15
11. Purpose of the Offer and the Merger; Plans for the Company
After the Offer and the Merger............................. 23
12. Dividends and Distributions................................ 25
13. Effect of the Offer and Merger on the Market for the
Shares, Exchange Listing and Exchange Act Registration.... 25
14. Certain Conditions of the Offer............................ 26
15. Certain Legal Matters and Regulatory Approvals............. 28
16. Fees and Expenses.......................................... 30
17. Miscellaneous.............................................. 30
Schedule I. Directors and Executive Officers of Parent and Purchaser... I
Schedule II. Section 262 of Delaware Law................................ II
</TABLE>
<PAGE>
To the Holders of Common Stock of
Unisource Worldwide, Inc.
INTRODUCTION
Atlanta Acquisition Corp., a Delaware corporation ("Purchaser") and a wholly
owned subsidiary of Georgia-Pacific Corporation, a Georgia corporation
("Parent"), hereby offers to purchase all outstanding shares of Common Stock,
par value $.001 per share (the "Shares"), of Unisource Worldwide, Inc., a
Delaware corporation (the "Company"), at a price of $12.00 per Share, net to
the seller in cash, without interest, upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which together 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 otherwise provided in Instruction 6 of the Letter of
Transmittal, stock transfer taxes with respect to the purchase of Shares by
Purchaser pursuant to the Offer. Purchaser will pay all charges and expenses
of Wasserstein Perella & Co., Inc. ("Wasserstein Perella"), which is acting as
Dealer Manager for the Offer (in such capacity, the "Dealer Manager"), First
Chicago Trust Company of New York (the "Depositary") and D.F. King & Co., Inc.
(the "Information Agent") incurred in connection with the Offer. See Section
16.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD"), BY THE UNANIMOUS VOTE
OF ALL DIRECTORS PRESENT AND VOTING, HAS DETERMINED THAT THE MERGER AGREEMENT
AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER,
ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY,
APPROVED THE MERGER AGREEMENT, THE OFFER AND THE MERGER, DECLARED THE MERGER
AGREEMENT TO BE ADVISABLE AND RESOLVED TO RECOMMEND THAT STOCKHOLDERS ACCEPT
THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), the Company's
financial advisor, has delivered to the Board its written opinion that the
consideration to be received by the stockholders of the Company pursuant to
each of the Offer and the Merger is fair to such stockholders from a financial
point of view. A copy of the opinion of DLJ is contained in the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-
9"), which has been filed with the Securities and Exchange Commission (the
"Commission") in connection with the Offer and which is being mailed to
stockholders herewith. Holders of the Shares are encouraged to read such
opinion in its entirety.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of May 25, 1999 (the "Merger Agreement"), among Parent, Purchaser and the
Company. The Merger Agreement provides that, among other things, as soon as
reasonably practicable after the acquisition of Shares pursuant to the Offer
and the satisfaction or waiver of the other conditions set forth in the Merger
Agreement and in accordance with the relevant provisions of the General
Corporation Law of the State of Delaware ("Delaware Law"), Purchaser will be
merged with and into the Company (the "Merger"). Following consummation of the
Merger, the Company will continue as the surviving corporation (the "Surviving
Corporation") and will be a wholly owned subsidiary of Parent. At the
effective time of the Merger (the "Effective Time"), each Share issued and
outstanding immediately prior to the Effective Time (other than Shares held
(a) in the treasury of the Company, (b) by Parent or any of its subsidiaries,
and (c) by stockholders who shall have demanded and perfected appraisal
rights, if any, under Delaware Law), will be converted into and exchangeable
for the right to receive $12.00 in cash, without interest (the "Merger
Consideration"). The Merger Agreement is more fully described in Section 10.
The Merger Agreement provides that, promptly upon the purchase by Purchaser
of Shares pursuant to the Offer and from time to time thereafter, Purchaser
shall be entitled to designate up to such number of directors, rounded up to
the next whole number, on the Board as will give Purchaser representation on
the Board equal to the product of the total number of directors on the Board
multiplied by the percentage that the aggregate number of Shares then
beneficially owned by Purchaser following such purchase bears to the total
number of Shares then outstanding. In the Merger Agreement, the Company has
agreed to promptly take all actions necessary to cause Purchaser's designees
to be elected as directors of the Company, including increasing the size of
the Board or securing the resignations of incumbent directors or both.
<PAGE>
The consummation of the Merger is subject to the satisfaction or waiver of
certain conditions, including the closing of the Offer and, if necessary, the
approval and adoption of the Merger Agreement by the requisite vote of the
stockholders of the Company. See Section 11. Under the Company's Certificate
of Incorporation and Delaware Law, the affirmative vote of the holders of a
majority of the outstanding Shares is required to approve and adopt the Merger
Agreement and the Merger. Consequently, if Purchaser acquires (pursuant to the
Offer or otherwise) at least a majority of the outstanding Shares, Purchaser
will have sufficient voting power to approve and adopt the Merger Agreement
and the Merger without the vote of any other stockholder.
Under Delaware Law, if Purchaser acquires, pursuant to the Offer or
otherwise, at least 90% of the then outstanding Shares, Purchaser will be able
to approve and adopt the Merger Agreement and the transactions contemplated
thereby, including the Merger, without a vote of the Company's stockholders (a
"Short-Form Merger"). In such event, Parent, Purchaser and the Company have
agreed to take, at the request of Purchaser, all necessary and appropriate
action to cause the Merger to become effective in accordance with Delaware Law
as soon as reasonably practicable after such acquisition, without a meeting of
the Company's stockholders. If, however, Purchaser does not acquire at least
90% of the then outstanding Shares (pursuant to the Offer or otherwise) and a
vote of the Company's stockholders is required under Delaware Law, a
significantly longer period of time will be required to effect the Merger. See
Section 11.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
Certain Conditions to the Offer
The Offer is subject to the fulfillment of certain conditions, including the
conditions set forth below (see Section 14, which sets forth in full the
conditions to the Offer). Purchaser reserves the right (in its sole discretion
but subject to the terms and conditions of the Merger Agreement and the
applicable rules and regulations of the Commission) to waive each of the
conditions to the obligations of the Purchaser to consummate the Offer.
The Minimum Condition. The consummation of the Offer is conditioned upon
there being validly tendered and not withdrawn prior to the expiration of the
Offer that number of Shares that, together with the Shares owned or otherwise
acquired by Parent or Purchaser, constitute at least a majority of the Shares
then outstanding on a fully diluted basis (i.e., as though all options or
other securities convertible into or exercisable or exchangeable for Shares,
if any, had been so converted, exercised or exchanged) (the "Minimum
Condition").
The Company has advised Purchaser that, as of May 21, 1999, (a) 70,218,397
Shares were issued and outstanding, (b) 3,052 Shares were held in the
Company's treasury and (c) 5,176,485 Shares were issuable pursuant to awards
that have been granted under the Company's stock option and restricted stock
plans. As of May 21, 1999, Parent owned 1,000 Shares. As a result, as of May
21, 1999, the Minimum Condition would be satisfied if Purchaser acquired
37,696,442 Shares. Also, as of such date, Purchaser could effect a Short-Form
Merger if Purchaser acquired 63,195,557 Shares.
The HSR Condition. The consummation of the Offer is conditioned upon the
expiration or termination, prior to the Expiration Date (as defined below), of
the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), applicable to the acquisition of the Shares
pursuant to the Offer.
On May 26, 1999, Parent and the Company each filed with the Federal Trade
Commission (the "FTC") and the Antitrust Division of the Department of Justice
(the "Antitrust Division") a Premerger Notification and Report Form under the
HSR Act with respect to the Offer. Accordingly, it is anticipated that the
waiting period under the HSR Act applicable to the Offer will expire at 11:59
p.m., New York City time, on June 10, 1999. Prior to the expiration or
termination of such waiting period, the FTC or the Antitrust Division may
extend such waiting period by requesting additional information from Parent
with respect to the Offer. If such a request is
2
<PAGE>
made with respect to the purchase of Shares in the Offer, the waiting period
will expire at 11:59 p.m., New York City time, on the tenth calendar day after
substantial compliance by Parent with such a request. Thereafter, the waiting
period may only be extended by court order. The waiting period under the HSR
Act may be terminated prior to expiration by the FTC and the Antitrust
Division. Parent has requested early termination of the waiting period,
although there can be no assurance that this request will be granted. See
Section 15 for additional information regarding the HSR Act.
Appropriate filings will also be made under the Competition Act (Canada) and
Mexico's Pre-Merger Regulations. The Competition Act (Canada) provides that
transactions subject to it cannot close before the expiration of any
applicable waiting period (normally seven or twenty-one calendar days). In
certain circumstances, the waiting period can be extended, or the Canadian
competition authorities can obtain interim injunctions to delay closing for a
maximum of 60 days or as otherwise agreed by the parties. There is no waiting
period under Mexico's Pre-Merger Regulations. Purchaser intends to purchase
the Shares under the Offer unless the Canadian or Mexican authorities have
made application for an injunction or similar legal prohibition against such
purchase. See Section 14 for a description of certain conditions of the Offer.
The term "Expiration Date" means 12:00 midnight, New York City time, on June
25, 1999, unless and until Purchaser, in its sole discretion (but subject to
the terms and conditions of the Merger Agreement), shall have extended the
period during which the Offer is open, in which event the term "Expiration
Date" shall mean the latest time and date at which the Offer, as so extended
by Purchaser, shall expire.
3
<PAGE>
THE OFFER
1. Terms of the Offer; Expiration Date
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of such extension or
amendment), Purchaser will accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not withdrawn as permitted by
Section 4, at the earliest time that all conditions to the offer are satisfied
or waived by Purchaser.
Purchaser reserves the right, in its sole discretion but subject to the
terms and conditions of the Merger Agreement, from time to time, including
upon the occurrence of any of the conditions specified in Section 14, to
extend the period of time during which the Offer is open by giving oral or
written notice of such extension to the Depositary. During any such extension,
all Shares previously tendered and not withdrawn will remain subject to the
Offer, subject to the rights of a tendering stockholder to withdraw his
Shares. See Section 4.
Subject to the applicable regulations of the Commission, Purchaser also
reserves the right, in its sole discretion but subject to the terms and
conditions of the Merger Agreement, from time to time, (i) to delay acceptance
for payment of, or, regardless of whether such Shares were theretofore
accepted for payment, payment for, any Shares pending receipt of any
regulatory approval specified in Section 15, (ii) to terminate the Offer and
not accept for payment any Shares upon the occurrence of any of the conditions
specified in Section 14 and (iii) to waive any condition or otherwise amend
the Offer in any respect, by giving oral or written notice of such delay,
termination, waiver or amendment to the Depositary and by making a public
announcement thereof. Purchaser acknowledges that (i) Rule 14e-1(c) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires
Purchaser to pay the consideration offered or return the Shares tendered
promptly after the termination or withdrawal of the Offer and (ii) Purchaser
may not delay acceptance for payment of, or payment for (except as provided in
clause (i) of the first sentence of this paragraph), any Shares upon the
occurrence of any of the conditions specified in Section 14 without extending
the period of time during which the Offer is open.
Any such extension, delay, termination, waiver or amendment will be followed
as promptly as practicable by public announcement thereof, such announcement
in the case of an extension to be made no later than 9:00 a.m., New York City
time, on the next business day after the previously scheduled Expiration Date.
Subject to applicable law (including Rules 14d-4(c) and 14d-6(d) under the
Exchange Act, which require that material changes be promptly disseminated to
stockholders in a manner reasonably designed to inform them of such changes)
and without limiting the manner in which Purchaser may choose to make any
public announcement, Purchaser shall have no obligation to publish, advertise
or otherwise communicate any such public announcement other than by issuing a
press release to the Dow Jones News Service or the Public Relations Newswire.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, Purchaser will extend the Offer to the extent required by Rules l4d-
4(c) and l4d-6(d) under the Exchange Act.
Subject to the terms of the Merger Agreement, if, prior to the Expiration
Date, Purchaser should decide to increase the consideration being offered in
the Offer, such increase in the consideration being offered will be applicable
to all stockholders whose Shares are accepted for payment pursuant to the
Offer and, if at the time notice of any such increase in the consideration
being offered is first published, sent or given to holders of such Shares, the
Offer is scheduled to expire at any time earlier than the period ending on the
tenth business day from and including the date that such notice is first so
published, sent or given, the Offer will be extended at least until the
expiration of such ten business day period. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or federal holiday
and consists of the time period from 12:01 a.m. through 12:00 midnight, New
York City time.
The Company has provided Purchaser with the Company's stockholder list 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 to record holders of Shares whose names appear on
the Company's stockholder list and will be furnished, for subsequent
transmittal to beneficial owners of Shares, to brokers, dealers, commercial
4
<PAGE>
banks, trust companies and similar persons whose names, or the names of whose
nominees, appear on the stockholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing.
2. Acceptance for Payment and Payment for Shares
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will accept for payment, and will pay for, all Shares
validly tendered prior to the Expiration Date and not properly withdrawn
promptly after the later to occur of (i) the Expiration Date, (ii) the
expiration or termination of any applicable waiting period under the HSR Act,
and (iii) the satisfaction or waiver of the conditions to the Offer set forth
in Section 14. Subject to applicable rules of the Commission, Purchaser
expressly reserves the right to delay acceptance for payment of, or payment
for, Shares pending receipt of any regulatory approvals specified in Section
15 or in order to comply in whole or in part with any other applicable law.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i)
the certificates evidencing such Shares (the "Share Certificates") or timely
confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such
Shares into the Depositary's account at The Depository Trust Company (the
"Book-Entry Transfer Facility") pursuant to the procedures set forth in
Section 3, (ii) the Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or, in
the case of a book-entry transfer, an Agent's Message (as defined below), and
(iii) any other documents required under the Letter of Transmittal. The term
"Agents Message" means a message transmitted by the Book-Entry Transfer
Facility to, and received by, the Depositary and forming a part of a Book-
Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that
Purchaser may enforce such agreement against the participant.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance for payment of such Shares pursuant to
the Offer. Upon the terms and subject to the conditions of the Offer, payment
for Shares accepted for payment pursuant to the Offer will be made by deposit
of the purchase price therefor with the Depositary, which will act as agent
for tendering stockholders for the purpose of receiving payments from
Purchaser and transmitting such payments to tendering stockholders whose
Shares have been accepted for payment. Under no circumstances will interest on
the purchase price for Shares be paid, regardless of any extension of the
Offer or delay in making such payment.
If any tendered Shares are not accepted for payment for any reason pursuant
to the terms and conditions of the Offer, or if Share Certificates are
submitted evidencing more Shares than are tendered, Share Certificates
evidencing unpurchased Shares will be returned, without expense to the
tendering stockholder (or, in the case of Shares tendered by book-entry
transfer into the Depositary's account at the Book-Entry Transfer Facility
pursuant to the procedure set forth in Section 3, such Shares will be credited
to an account maintained at the Book-Entry Transfer Facility), as promptly as
practicable following the expiration or termination of the Offer.
Purchaser reserves the right to assign, in whole or from time to time in
part, to any direct wholly owned subsidiary its right to purchase all or any
portion of the Shares tendered pursuant to the Offer, but any such 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. Procedures for Accepting the Offer and Tendering Shares
In order for a holder of Shares validly to tender Shares pursuant to the
Offer, the Letter of Transmittal (or a facsimile thereof), properly completed
and duly executed, together with any required signature guarantees, or in
5
<PAGE>
the case of a book-entry transfer, an Agent's Message, and any other documents
required by the Letter of Transmittal, must be received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase and
either (i) the Share Certificates evidencing tendered Shares must be received
by the Depositary at such address or such Shares must be tendered pursuant to
the procedure for book-entry transfer described below and a Book-Entry
Confirmation must be received by the Depositary, including an Agent's Message
if the tendering stockholder has not delivered a Letter of Transmittal, in
each case prior to the Expiration Date, or (ii) the tendering stockholder must
comply with the guaranteed delivery procedures described below.
If Share Certificates are forwarded to the Depositary in multiple
deliveries, a properly completed and duly executed Letter of Transmittal (or a
facsimile thereof) must accompany each delivery. No alternative, conditional
or contingent tenders will be accepted and no fractional Shares will be
purchased.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT
THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE
CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Book-Entry Transfer. The Depositary will establish accounts with respect to
the Shares at the Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any
financial institution that is a participant in the system of the Book-Entry
Transfer Facility may make a book-entry delivery of Shares by causing the
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at the Book-Entry Transfer Facility in accordance with the Book-Entry
Transfer Facility's procedures for such transfer. However, although delivery
of Shares may be effected through book-entry transfer at the Book-Entry
Transfer Facility, the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, together with any required signature
guarantees, including an Agent's Message in lieu of the Letter of Transmittal,
and any other required documents, must, in any case, be received by the
Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase prior to the Expiration Date, or the tendering stockholder must
comply with the guaranteed delivery procedure described below. Delivery of
documents to the Book-Entry Transfer Facility does not constitute delivery to
the Depositary.
Signature Guarantees. Signatures on all Letters of Transmittal must be
guaranteed by a firm which is a member of the Securities Transfer Agents
Medallion Program (STAMP) (each of the foregoing being referred to as an
"Eligible Institution"), except in cases where Shares are tendered (i) by a
registered holder of Shares who has not completed either the box entitled
"Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution. If a Share Certificate is registered in the name of a
person other than the signer of the Letter of Transmittal, or if payment is to
be made, or a Share Certificate not accepted for payment or not tendered is to
be returned, to a person other than the registered holder(s), then the Share
Certificate must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name(s) of the registered holder(s) appear
on the Share Certificate, with the signature(s) on such Share Certificate or
stock powers guaranteed by an Eligible Institution. See Instructions 1 and 5
of the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates evidencing such Shares are
not immediately available or such stockholder cannot deliver the Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date, or such stockholder cannot complete the procedure for
delivery by book-entry transfer on a timely basis, such Shares may
nevertheless be tendered, provided that all the following conditions are
satisfied:
(i)such tender is made by or through an Eligible Institution;
6
<PAGE>
(ii)a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form made available by Purchaser, is received prior to
the Expiration Date by the Depositary as provided below; and
(iii) the Share Certificates (or a Book-Entry Confirmation) evidencing
all tendered Shares, in proper form for transfer, in each case together
with the Letter of Transmittal (or a facsimile thereof), properly completed
and duly executed, with any required signature guarantees or, in the case
of a book-entry transfer, an Agent's Message, and any other documents
required by the Letter of Transmittal are received by the Depositary within
three New York Stock Exchange, Inc. ("NYSE") trading days after the date of
execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by telegram or facsimile transmission to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in the
form of Notice of Guaranteed Delivery made available by Purchaser.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of the
Share Certificates evidencing such Shares, or a Book-Entry Confirmation of the
delivery of such Shares, and the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees or, in the case of a book-entry transfer, an Agent's Message, and
any other documents required by the Letter of Transmittal.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tender of Shares will be determined by Purchaser in its sole discretion, which
determination shall be final and binding on all parties. Purchaser reserves
the absolute right to reject any and all tenders determined by it not to be in
proper form or the acceptance for payment of which may, in the opinion of its
counsel, be unlawful. Purchaser also reserves the absolute right to waive any
condition 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 and
irregularities 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.
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.
Other Requirements. By executing the Letter of Transmittal as set forth
above (including delivery through an Agent's Message), a tendering stockholder
irrevocably appoints designees of Purchaser as such stockholder's proxies,
each with full power of substitution, in the manner set forth in the Letter of
Transmittal, to the full extent of such stockholder's rights with respect to
the Shares tendered by such stockholder and accepted for payment by Purchaser
(and with respect to any and all other Shares or other securities issued or
issuable in respect of such Shares on or after May 25, 1999). All such proxies
shall be considered coupled with an interest in the tendered Shares. Such
appointment will be effective when, and only to the extent that, Purchaser
accepts such Shares for payment. Upon such acceptance for payment, all prior
proxies given by such stockholder with respect to such Shares (and such other
Shares and securities) will be revoked without further action, and no
subsequent proxies may be given nor any subsequent written consent executed by
such stockholder (and, if given or executed, will not be deemed to be
effective) with respect thereto. The designees of Purchaser will, with respect
to the Shares for which the appointment is effective, be empowered to exercise
all voting and other rights of such stockholder as they in their sole
discretion may deem proper at any annual or special meeting of the Company's
stockholders or any adjournment or postponement thereof. Purchaser reserves
the right to require that, in order for Shares to be deemed validly tendered,
immediately upon Purchaser's payment for such Shares, Purchaser must be able
to exercise full voting rights with respect to such Shares.
The acceptance for payment by Purchaser of Shares pursuant to any 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.
7
<PAGE>
Backup Withholding. In order to avoid "backup withholding" of United States
("U.S.") federal income tax on payments of cash pursuant to the Offer, a
stockholder surrendering Shares in the Offer, or its assignee (in either case,
the "Payee") must, unless an exemption applies, provide the Depositary with
such Payee's correct taxpayer identification number ("TIN") on a Substitute
Form W-9 and certify under penalties of perjury that such TIN is correct and
that such Payee is not subject to backup withholding. If a Payee does not
provide such Payee's correct TIN or fails to provide the certifications
described above, the Internal Revenue Service (the "IRS") may impose a penalty
on such Payee and payment of cash to such Payee pursuant to the Offer may be
subject to backup withholding of 31%. All stockholders surrendering Shares
pursuant to the Offer and other Payees should complete and sign the Substitute
Form W-9 included as part of the Letter of Transmittal to provide the
information and certification necessary to avoid backup withholding (unless an
applicable exemption exists and is proved in a manner satisfactory to the
Purchaser and the Depositary). Certain Payees (including, among others, all
corporations and certain foreign individuals and entities) are not subject to
backup withholding. Noncorporate foreign shareholders should complete and sign
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 Instruction 9
to the Letter of Transmittal.
4. Withdrawal Rights
Tenders of Shares made pursuant to the Offer are irrevocable except that
such Shares may be withdrawn at any time prior to the Expiration Date and,
unless theretofore accepted for payment by Purchaser pursuant to the Offer,
may also be withdrawn at any time after July 26, 1999. If Purchaser extends
the Offer, is delayed in its acceptance for payment of Shares or is unable to
accept Shares for payment pursuant to the Offer for any reason, then, without
prejudice to Purchaser's rights under the Offer, the Depositary may,
nevertheless, on behalf of Purchaser, retain tendered Shares, and such Shares
may not be withdrawn except to the extent that tendering stockholders are
entitled to withdrawal rights as described in this Section 4. Any such delay
will be by an extension of the Offer to the extent required by law.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover page of this Offer to
Purchase. Any such notice of withdrawal must specify the name of the person
who tendered the Shares to be withdrawn, the number of Shares to be withdrawn
and the name of the registered holder of such Shares, if different from that
of the person who tendered such Shares. If Share Certificates evidencing
Shares to be withdrawn have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of such Share Certificates,
the serial numbers shown on such Share Certificates must be submitted to the
Depositary and the signature(s) on the notice of withdrawal must be guaranteed
by an Eligible Institution, unless such Shares have been tendered for the
account of an Eligible Institution. If Shares have been tendered pursuant to
the procedures for book-entry transfer as set forth in Section 3, any notice
of withdrawal must specify the name and number of the account at the Book-
Entry Transfer Facility to be credited with the withdrawn Shares and otherwise
comply with the Book-Entry Transfer Facility's procedures.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by 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.
Withdrawals of tendered Shares may not be rescinded and any Shares properly
withdrawn will thereafter be deemed not to have been validly tendered for
purposes of the Offer. However, withdrawn Shares may be re-tendered at any
time prior to the Expiration Date by following one of the procedures described
in Section 3.
5. Certain Federal Income Tax Consequences
The receipt of cash for Shares pursuant to the Offer or in the Merger will
be a taxable transaction for U.S. federal income tax purposes and may also be
a taxable transaction under applicable state, local or foreign tax
8
<PAGE>
laws. In general, a stockholder will recognize gain or loss for U.S. federal
income tax purposes equal to the difference between the amount of cash
received in exchange for the Shares sold and such U.S. holder's adjusted tax
basis in such Shares. Assuming the Shares constitute capital assets in the
hands of the U.S. holder, such gain or loss will be capital gain or loss and,
in the case of an individual stockholder, will be taxable at 20% when the
Shares tendered pursuant to the Offer or converted pursuant to the Merger were
held in excess of 12 months. Gain or loss will be calculated separately for
each block of Shares tendered pursuant to the Offer or converted pursuant to
the Merger. The deduction of capital losses is subject to certain limitations.
Prospective investors should consult their own tax advisors in this regard.
In general, in order to prevent backup federal income tax withholding at a
rate of 31% on the cash consideration to be received in the Offer or pursuant
to the Merger, each stockholder who is not otherwise exempt from such
requirements must provide such stockholder's correct taxpayer identification
number (and certain other information) by completing the Substitute Form W-9
in the Letter of Transmittal.
The foregoing discussion may not be applicable to certain types of
stockholders, including broker-dealers, stockholders who acquired Shares
pursuant to the exercise of employee stock options or otherwise as
compensation, individuals who are not citizens or residents of the United
States and foreign corporations.
The U.S. federal income tax discussion set forth above is included for
general information only and is based upon present law, which is subject to
change possibly with retroactive effect. Stockholders are urged to consult
their tax advisors with respect to the specific tax consequences of the Offer
and the Merger to them, including the application and effect of the
alternative minimum tax, and state, local and foreign tax laws.
6. Price Range of Shares; Dividends
The Shares are listed and principally traded on the NYSE under the symbol
"UWW". The shares also are listed and trade on the Philadelphia Stock Exchange
and the Chicago Stock Exchange. The following table sets forth, for each
period indicated, the high and low sales prices per Share on the NYSE as
reported by the Dow Jones News Service and the amount of cash dividends paid
or declared per Share according to published financial sources.
<TABLE>
<CAPTION>
High Low Dividends
------- ------- ---------
<S> <C> <C> <C>
Fiscal Year Ended September 30, 1997:
First Quarter.................................... $22 1/4 $18 1/4 $ --
Second Quarter................................... 23 1/8 13 1/4 0.20
Third Quarter.................................... 18 1/4 13 1/2 0.20
Fourth Quarter................................... 19 7/8 16 1/8 0.20
Fiscal Year Ended September 30, 1998:
First Quarter.................................... $20 1/4 $13 1/6 $0.20
Second Quarter................................... 16 11 3/4 0.20
Third Quarter.................................... 14 1/4 9 15/16 0.20
Fourth Quarter................................... 11 17/32 5 1/4 0.20
Fiscal Year Ending September 30, 1999:
First Quarter.................................... $10 1/4 $ 6 $0.05
Second Quarter................................... 12 3/4 6 5/16 0.05
Third Quarter (through May 27, 1999)*............ 11 7/8 7
</TABLE>
- --------
* On May 19, 1999, the Board declared a regular quarterly cash dividend of
$.05 payable on June 10, 1999 to holders of record on June 1, 1999.
Stockholders of record on June 1, 1999 will be entitled to receive the cash
dividend even if their Shares are purchased in the Offer.
9
<PAGE>
On May 7, 1999, the last full trading day prior to the public announcement
of Parent's proposal to acquire the Company, the closing price per Share as
reported on the NYSE was $8.75. On May 24, 1999, the last full trading day
prior to the public announcement of the execution of the Merger Agreement and
of Purchaser's intention to commence the Offer, the closing price per Share as
reported on the NYSE was $10.75. On May 27, 1999, the last full trading day
prior to the commencement of the Offer, the closing price per Share as
reported on the NYSE was $11.75.
Stockholders are urged to obtain a current market quotation for the Shares.
7. Certain Information Concerning the Company
Except as otherwise set forth herein, the information concerning the Company
contained in this Offer to Purchase 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 Purchaser nor Parent
assumes any responsibility for the accuracy or completeness of the information
concerning the Company furnished by the Company or contained in such documents
and records or for any failure by the Company to disclose events which may
have occurred or may affect the significance or accuracy of any such
information but which are unknown to Purchaser or Parent.
General. The Company is a Delaware corporation with its principal executive
offices located at 1100 Cassatt Road, Berwyn, Pennsylvania 19312. The Company
sells and distributes high quality printing, writing and copying papers to
printers, publishers, business forms manufacturers and direct mail firms, as
well as corporate and retail copy centers, in-plant print facilities,
government institutions and other paper-intensive businesses. The Company also
sells and distributes a broad range of packaging and maintenance supplies,
equipment and services, principally to manufacturers, food processors and
retail and other institutional customers. Products distributed include
disposable paper and plastic products; maintenance supplies and equipment such
as towels, tissues, can liners and sanitation chemicals; packaging supplies
and equipment such as carton erectors, baggers and fillers as well as films,
shrinkwrap and cushioning materials; shipping room supplies such as corrugated
boxes, cushioning materials, tapes and labeling; and food service supplies
such as films and food wraps, food containers and disposable apparel for food
service workers.
10
<PAGE>
Financial Information
Set forth below are certain selected consolidated financial data relating to
the Company and its subsidiaries for the last three fiscal years and the six
month periods ended March 31, 1999 and 1998, which have been excerpted or
derived from the audited financial statements contained in the Company's
Annual Report on Form 10-K for the fiscal year ended September 30, 1998 and
from the unaudited financial statements contained in the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended March 31, 1999, all filed by
the Company with the Commission. More comprehensive financial information is
included in such reports and other documents filed by the Company with the
Commission, and the following summary financial data is qualified in its
entirety by reference to such reports and other documents, including the
financial information and related notes contained therein.
UNISOURCE WORLDWIDE, INC.
Summary Selected Consolidated Financial Data
(in thousands, except per share data)
<TABLE>
<CAPTION>
Six Months Ended
Year ended September 30 March 31,
----------------------------------- ----------------------
1996 1997 1998 1998 1999
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Total Revenues.......... $7,022,808 $7,108,355 $7,417,276 $3,737,055 $3,287,686
Gross Profit............ 1,126,557 1,196,642 1,244,990 (c) 636,056 604,436
Income (Loss) from
Operations............. 134,469(e) 144,695 (257,466)(c) (107,082) 36,828(d)
Income (Loss) Before
Income Taxes........... 103,003(e) 103,058 (303,000)(c) (131,825) 14,776(d)
Net Income (Loss)....... $ 59,998(e) $ 58,686 $ (231,800)(c) $ (93,926) $ 8,422(d)
Basic Earnings (Loss)
Per Share.............. *(a) $ .88 $ (3.36)(c) $ (1.37) $ 0.12(d)
Diluted Earnings (Loss)
Per Share.............. *(a) $ .87 $ (3.36)(c) $ (1.37) $ 0.12(d)
Total Current Assets.... $1,330,484 $1,472,949 $1,131,419 $1,254,356 $1,034,588
Total Assets............ $2,191,714 $2,558,832 $1,966,651 $2,193,828 $1,856,628
Total Current
Liabilities............ $ 579,692 $ 805,532 $ 665,393 $ 617,523 $ 623,038
Long-term debt.......... $ 21,097(b) $ 661,350 $ 505,199 $ 656,682 $ 435,684
Total deferred taxes and
other liabilities...... $ 101,724 $ 107,565 $ 97,701 $ 62,714 $ 94,748
Working Capital......... $ 750,792 $ 667,417 $ 466,026 $ 636,833 $ 411,550
</TABLE>
(a) Omitted. The Company was a wholly-owned subsidiary of another company
during such period.
(b) Excludes $553,700 of notes and advances payable to Ikon Office Solutions,
Inc.
(c) The financial results for the Company for the year ended September 30,
1998 include the impact of the following special charges:
<TABLE>
<CAPTION>
Pre-Tax After-Tax Loss Per
Charge Charge Share
------- --------- --------
(Millions, except per share amounts)
<S> <C> <C> <C>
Charges related to streamlining the
Company's organizational structure:
Severance and facility closures.... $ 108,515 $ 69,700 $ (1.00)
Inventory write-downs (included in
cost of sales).................... 23,000 14,900 (0.22)
Valuation charge related to the
Company's Mexico operations......... 70,000 70,000 (1.01)
Write-off of the Company's
capitalized information technology
development and related costs....... 168,000 109,200 (1.60)
Tax charge associated with the sale
of a significant portion of the
Company's U.S.-based grocery supply
systems business.................... -- 5,700 (0.08)
------------ ------------ ----------
Total................................ $ 369,515 $ 269,500 $ (3.91)
============ ============ ==========
</TABLE>
(d) The financial results for the Company for the six months ended March 31,
1999 reflect restructuring implementation costs of $6,813 ($3,883 net of
tax).
(e) The financial results for the Company for the year ended September 30,
1996 include a $50,000 restructuring charge ($32,500 after tax).
11
<PAGE>
Certain Projections
During the course of Parent's business and legal due diligence of the
Company and its operations, Parent received and reviewed projections from the
Company with respect to the Company's budgeted financial performance for the
first six months of its current fiscal year and for the current fiscal year
ending September 30, 1999, and its financial plans for the fiscal years ending
September 30, 2000 and 2001. Such projections reflect the anticipated results
of the Company's restructuring plan which was announced in July of 1998. The
following table summarizes such projections for the six month period ending
March 31, 1999, and its financial plans for the fiscal years ending September
30, 1999, 2000, 2001. For comparative purposes, the Company's actual financial
results for the six months ended March 31, 1999, and for the fiscal year ended
September 30, 1998, are also included:
<TABLE>
<CAPTION>
Six Months Six Months Fiscal Year Fiscal Year Fiscal Year Fiscal Year
Ended 3/31/99 Ended 3/31/99 Ended 9/30/98 Ended 9/30/99 Ended 9/30/00 Ended 9/30/01
Budget Actual Actual Budget Plan Plan
($ in millions) ------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Total Revenues.......... $3,286.8 $3,287.7 $ 7,417 $6,546 $6,738 $7,008
Gross Profit............ $ 604.8 $ 604.4 $ 1,268 $1,213 $1,217 $1,318
Total Operating
Expenses............... $ 559.4 $ 560.8 $ 1,156 $1,098 $1,071 $1,101
Income from operations
(before special
charges)............... $ 45.4 $ 43.6 $ 112 $ 115 $ 200 $ 217
Net income before
special charges........ $ 12.3 $ 12.3 $ 38 $ 40 $ 88 $ 103
Note: the following special charges have been excluded from the respective
periods' results:
Special charges, net of
tax.................... $ (6.5) $ (3.9) $(269.5) $(16.0) $ (7.7) $ -0-
</TABLE>
The projections are included by Purchaser in this Offer to Purchase solely
because such information was furnished to Parent and Purchaser by the Company.
None of Parent, Purchaser, the Company, Wasserstein Perella, DLJ or any other
party to whom the projections were provided assumes any responsibility for the
validity, reasonableness, accuracy or completeness of the projections. The
projections were not prepared in accordance with generally accepted accounting
principles and were not audited or reviewed by any independent accounting
firm. The projections are based on a variety of assumptions relating to the
businesses of the Company, industry performance, general business and economic
conditions and other matters which are inherently subject to significant
uncertainties and contingencies, many of which are beyond the Company's
control. Actual future results may vary materially from those shown in the
projections. None of Parent, Purchaser, the Company, Wasserstein Perella, DLJ
or any other party is under any obligation to or has any intention to update
the projections at any future time.
8. Certain Information Concerning Purchaser and Parent
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. The principal offices
of Purchaser are located at 133 Peachtree Street, N.E., Atlanta, Georgia 30303
and the telephone number of the Purchaser at such address is (404) 652-4000.
Purchaser is a wholly owned subsidiary of Parent.
Until immediately prior to the time that Purchaser will purchase 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. Because Purchaser is newly formed and has minimal
assets and capitalization, no meaningful financial information regarding
Purchaser is available.
Parent is a Georgia corporation. Its principal offices are located at 133
Peachtree Street, N.E., Atlanta, Georgia 30303 and Parent's telephone number
at such address is (404) 652-4000. Georgia-Pacific is the leading manufacturer
and distributor of building products in the United States and one of the
world's leading
12
<PAGE>
manufacturers and distributors of pulp, paper and related chemicals for the
forest products industry. It consists of two distinct operating groups:
Georgia-Pacific Group, which includes the pulp, paper and building products
business, and The Timber Company, which manages 5 million acres of timberland
in North America. The company employs 45,000 people at more than 400 locations
in the United States and Canada. Revenues in 1998 were $13.2 billion.
The name, citizenship, business address, principal occupation or employment,
and five-year employment history for each of the directors and executive
officers of Purchaser and Parent and certain other information are set forth
in Schedule I hereto.
13
<PAGE>
Financial Information
Set forth below are certain selected consolidated financial data relating to
Parent and its subsidiaries for the last three fiscal years and the fiscal
quarters ended March 31, 1998 and 1997, which have been excerpted or derived
from the audited financial statements contained in Parent's Annual Report on
Form 10-K for the fiscal year ended December 31, 1998 and from the unaudited
financial statements contained in Parent's Quarterly Report on Form 10-Q for
the fiscal quarter ended March 31, 1999. More comprehensive financial
information is included in such reports and other documents filed by the
Parent with the Commission, and the following summary financial data is
qualified in its entirety by reference to such reports and other documents,
including the financial information and related notes contained therein.
GEORGIA-PACIFIC CORPORATION
Summary Selected Consolidated Financial Data
(in millions, except per share data)
<TABLE>
<CAPTION>
Three-Months Ended
(unaudited)
------------------
Year ended December 31,
------------------------- March 31, April 3,
1996 1997 1998 1998 1999
------- ------- ------- --------- --------
<S> <C> <C> <C> <C> <C>
Operations
Net sales....................... $13,024 $13,094 $13,336 $ 3,221 $ 3,405
Income before income taxes,
extraordinary items and
accounting change.............. 296 235 491 117 244
Income before extraordinary
items and accounting change.... 161 129 289 68 145
Extraordinary items and
accounting change, net of
taxes.......................... (5) (60) (15) (14) --
Net income ..................... $ 156 $ 69 $ 274 $ 54 $ 145
Other statistical data
Net income (loss) per common
share:
Basic:....................... $ 1.72
Diluted:..................... $ 1.71
Net income (loss) per Georgia-
Pacific Group common stock:
Basic:....................... $ (1.60) $ 1.09 $ 0.04 $ 1.15
Diluted:..................... $ (1.60) $ 1.08 $ 0.04 $ 1.13
Net income per Timber Company
common stock:
Basic:....................... $ 2.35 $ 1.95 $ 0.54 $ 0.53
Diluted:..................... $ 2.33 $ 1.94 $ 0.54 $ 0.53
Earnings to fixed charges*...... 1.7 1.5 2.1 2.0 3.1
Current assets.................. $ 2,615 $ 2,916 $ 2,645 $ 2,850 $ 2,800
Total assets.................... $12,818 $12,950 $12,700 $12,846 $12,805
Current liabilities............. $ 2,490 $ 3,020 $ 2,648 $ 3,126 $ 2,716
Long-term debt.................. $ 4,371 $ 3,713 $ 4,125 $ 3,519 $ 4,112
Total liabilities............... $ 9,307 $ 9,480 $ 9,576 $ 9,420 $ 9,660
Working capital................. $ 125 $ (104) $ (3) $ (276) $ 84
</TABLE>
- --------
* Earnings to Fixed Charges--Income before income taxes, extraordinary items
and accounting change plus total interest cost (interest expense plus
capitalized interest) and one-third of rent expense, divided by total
interest cost plus one-third of rent expense.
On the date hereof, Parent owns 1,000 Shares which were acquired in an open
market transaction on May 7, 1999 at a price of $8.5625 per Share. Such
acquisition represents the only purchase of Shares made by Parent during the
past 60 days.
Except as described in this Offer to Purchase, (i) none of Purchaser, Parent
nor, to the best knowledge of Purchaser and Parent, any of the persons listed
in Schedule I to this Offer to Purchase or any associate or majority-owned
subsidiary of Purchaser, Parent or any of the persons so listed beneficially
owns or has any right to acquire, directly or indirectly, any Shares and (ii)
none of Purchaser, Parent nor, to the best knowledge of Purchaser and Parent,
any of the persons or entities referred to above nor any director, executive
officer or subsidiary of any of the foregoing has effected any transaction in
the Shares during the past 60 days.
14
<PAGE>
Except as provided in the Merger Agreement and as otherwise described in
this Offer to Purchase, none of Purchaser, Parent nor, to the best knowledge
of Purchaser and Parent, any of the persons listed in Schedule I to this Offer
to Purchase, has any contract, arrangement, understanding or relationship with
any other person with respect to any securities of the Company, including, but
not limited to, any contract, arrangement, understanding or relationship
concerning the transfer or voting of such securities, joint ventures, loan or
option arrangements, puts or calls, guaranties of loans, guaranties against
loss or the giving or withholding of proxies. Except as set forth in this
Offer to Purchase, since October 1, 1995, neither Purchaser nor Parent nor, to
the best knowledge of Purchaser and Parent, any of the persons listed on
Schedule I hereto, has had any business relationship or transaction with the
Company or any of its executive officers, directors or affiliates that is
required to be reported under the rules and regulations of the Commission
applicable to the Offer. Except as set forth in this Offer to Purchase, since
October 1, 1995, there have been no contacts, negotiations or transactions
between any of Purchaser, Parent, or any of their respective subsidiaries or,
to the best knowledge of Purchaser and Parent, any of the persons listed in
Schedule I to this Offer to Purchase, on the one hand, and the Company or its
affiliates, on the other hand, concerning a merger, consolidation or
acquisition, tender offer or other acquisition of securities, an election of
directors or a sale or other transfer of a material amount of assets.
9. Financing of the Offer and the Merger
The Offer is not conditioned on any financing arrangements. Purchaser
estimates that the total amount of funds it will require to consummate the
Offer and the Merger, and to pay related fees and expenses, is approximately
$860 million. Purchaser will obtain all of such funds from Parent. Parent has
received a letter from Bank of America, N.T.S.A., confirming that Bank of
America and other financial institutions are prepared to establish a
syndicated credit facility for Parent totaling $3.0 billion on normal
commercial terms for a facility of this type. Parent will advance funds from
such credit facility to Purchaser to pay for shares tendered under the Offer
and other expenses (which may include the repayment or refinancing of
indebtedness of the Company) related to the Offer and the Merger.
It is anticipated that all indebtedness incurred by Parent in connection
with the Offer and the Merger will be repaid from funds generated internally
by Parent and its subsidiaries (including, after the Merger, if consummated,
funds generated by the Company and its subsidiaries), through other sources
which may include the proceeds of future bank refinancings or the public or
private sale of debt or equity securities from time to time, or a combination
of such sources. No final decisions have been made, however, concerning the
method Parent will employ to repay such indebtedness. Such decisions, when
made, will be based on Parent's review from time to time of the advisability
of particular actions, as well as on prevailing interest rates and financial
and other economic conditions.
10. Background of the Offer; Contacts with the Company; the Merger Agreement
The Company has been Parent's largest single customer for a number of years
and purchases a variety of the printing and imaging paper and tissue products
manufactured by Parent. The following table sets forth the dollar volume of
such purchases from October 1, 1995 through March 31, 1999.
<TABLE>
<CAPTION>
(in millions)
--------------------------------------------
Fiscal Fiscal Fiscal
Qtr Year Year Year Qtr
Ending Ending Ending Ending Ending
12/31/95 12/31/96 12/31/97 12/31/98 03/31/99
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Printing & Imaging
Papers................. $120.8 $403.2 $417.7 $393.9 $89.8
Tissue Products......... $ 4.8 $ 14.6 $ 17.7 $ 16.9 $ 4.7
------ ------ ------ ------ -----
TOTAL................... $125.6 $417.8 $435.4 $410.8 $94.5
</TABLE>
15
<PAGE>
In July of 1998, the Company announced a major restructuring of its
operations. Following such announcement, A. D. Correll, Chairman, Chief
Executive Officer and President of Parent ("Mr. Correll") called Ray B. Mundt,
Chairman and Chief Executive Officer of the Company ("Mr. Mundt") and arranged
a meeting in Philadelphia on August 18, 1998. During that meeting, Mr. Correll
and Mr. Mundt discussed various types of strategic transactions which the two
companies could pursue, and, in particular, discussed the possibility of
Parent making an equity investment in the Company and the two companies
forging a closer strategic alliance.
At a subsequent meeting in Atlanta, Mr. Correll and Mr. Mundt met with
senior members of their staff, and instructed them to begin discussions
looking toward such a strategic alliance. Subsequently, Mr. Correll and Mr.
Mundt had several telephone conversations with respect to the strategic
alliance and the possibility of an equity investment by Parent. Discussions
between the two companies continued through the end of 1998 and into 1999, but
no agreements were reached.
On February 28, 1999, the Company entered into an Agreement and Plan of
Merger (the "UGI Agreement") with UGI Corporation ("UGI") pursuant to which
the Company's stockholders were to receive .566 shares of UGI common stock for
each of their Shares.
In April, 1999, Parent undertook a review of the feasibility of, and
strategic benefits available through, a potential business combination with
the Company. In connection with such review, Parent retained Wasserstein
Perella as its financial adviser.
On May 4, 1999, at a meeting of the Parent's Board of Directors (the "Parent
Board"), Parent's management reviewed the business, operations and financial
condition of the Company and discussed the strategic advantages and potential
synergies of the Merger and the feasibility of the Merger. At such meeting,
the Parent Board authorized Parent to propose acquiring all of the Shares at a
price of $12.00 per Share.
On May 7, 1999, Mr. Mundt received a letter from Mr. Correll in which Mr.
Correll proposed that Parent acquire the Company at a price of $12.00 per
Share in cash pursuant to a merger transaction. Attached to Parent's proposal
letter was a draft of the Merger Agreement prepared by Parent and its counsel.
Later on May 7, 1999, as required by the terms of the UGI Agreement, the
Company notified UGI of its receipt of Parent's proposal.
On May 10, 1999, at a special meeting of the Board, after hearing
presentations from DLJ and its legal advisor, the Board authorized management
to begin discussions with Parent concerning its proposal. After the Board
meeting had concluded, as required by the terms of the UGI Agreement, the
Company notified UGI of the Board's decision to enter into discussions with
Parent concerning its proposal.
On the morning of May 13, 1999, the Company and Parent executed
confidentiality agreements. During the afternoon of May 13, 1999, Mr. Mundt
met with Mr. Correll to discuss Parent's proposal. At this meeting, Mr.
Correll reaffirmed Parent's proposal to acquire the Company for $12.00 per
Share in cash but refused Mr. Mundt's request for an increase in the offer.
Beginning on May 14, 1999 through May 23, 1999, Parent conducted extensive
business and legal due diligence of the Company and its operations. On May 19,
1999, at a regularly scheduled Board meeting, Mr. Mundt updated the directors
on the status of the discussions with Parent. After hearing presentations from
its financial and legal advisors, the Board authorized management to continue
discussions with Parent concerning its proposal.
From May 20, 1999 through May 24, 1999, representatives of Parent and the
Company negotiated the terms of the Merger Agreement, including a first-step
tender offer.
On May 24, 1999, the Parent Board, in a special meeting, approved the Merger
Agreement pursuant to which, subject to the conditions set forth therein, the
Offer would be commenced to purchase all Shares for
16
<PAGE>
$12.00 per Share and after the completion of the Offer, Purchaser would be
merged into the Company, with each Share being converted into the right to
receive $12.00 in cash.
Later on May 24, 1999, at a special meeting of the Board, Mr. Mundt updated
the directors on the status of the discussions with Parent. Representatives of
DLJ then delivered their oral opinion to the Board (subsequently confirmed in
writing) that, as of such date, the consideration proposed to be received by
the stockholders of the Company in the Offer and in the Merger was fair, from
a financial point of view, to such holders. After DLJ delivered its opinion,
the Board, by the unanimous vote of the directors present and voting, (i)
resolved to terminate the UGI Agreement in accordance with the terms of the
UGI Agreement, (ii) approved the Offer, the Merger and the Merger Agreement
and (iii) determined to recommend that the Company's stockholders accept the
Offer and tender their Shares and approve the Merger and the Merger Agreement.
The Board also approved the amendment of the Company stockholders' rights plan
in order to permit the Offer, the Merger and the purchase of Shares without
triggering the rights thereunder.
On May 25, 1999, after UGI declined to revise its offer to match Parent's
proposal, the Company terminated the UGI Agreement, and the Company, Parent
and Purchaser then executed the Merger Agreement. Prior to and as a condition
of the termination of the UGI Agreement, the Company paid to UGI the
$25,000,000 termination fee required by the UGI Agreement, and Parent then
reimbursed such funds to the Company.
On May 28, 1999, Parent commenced the Offer.
The Merger Agreement. The following is a summary of the Merger Agreement, a
copy of which is filed as an Exhibit to the Tender Offer Statement on Schedule
14D-1 (the "Schedule 14D-1") filed by Purchaser and Parent with the Commission
in connection with the Offer. Such summary is qualified in its entirety by
reference to the Merger Agreement.
The Offer
Terms of the Offer. The Merger Agreement provides that each of the
Company's stockholders who tenders Shares in the Offer will receive $12.00 for
each Share tendered (the "Per Share Amount"), net to the stockholder in cash,
subject to any applicable withholding of taxes. The Merger Agreement prohibits
Purchaser from amending the terms of the Offer, without the consent of the
Company, to (i) decrease the price to be paid for Shares in the Offer, (ii)
reduce the number of Shares sought in the Offer, (iii) add to the conditions
to the Offer (See Section 14), (iv) change the form of consideration to be
paid for Shares in the Offer or (v) make any other change in the terms of the
Offer that is adverse to holders of Shares.
Mandatory Extensions of the Offer. The Merger Agreement obligates Purchaser
to extend the Offer until all of the conditions to the Offer are satisfied or
waived if, at the scheduled or extended expiration date of the Offer, any of
the conditions to the Offer have not been satisfied or waived. The Merger
Agreement also requires that Purchaser extend the Offer for any period
required by any rule, regulation, interpretation or position of the Securities
and Exchange Commission or any other period required by applicable law.
Notwithstanding the foregoing, in connection with a termination of the Merger
Agreement, Purchaser may terminate the Offer 120 days after its commencement
if all of the conditions to the Offer are not satisfied or waived by Purchaser
at such time.
Optional Extensions of the Offer. The Merger Agreement provides that
Purchaser must accept for payment Shares that have been validly tendered and
not withdrawn pursuant to the Offer at the earliest time that all conditions
to the Offer have been satisfied or waived by Purchaser. However, even if all
conditions to the Offer have been satisfied or waived, the Merger Agreement
permits Purchaser to extend the Offer on one or more occasions for an
aggregate period of not more than 10 business days if, at such time, the
number of Shares tendered (and not withdrawn) pursuant to the Offer, together
with the Shares then owned by Parent and its subsidiaries, represents more
than 80% but less than 90% of the outstanding Shares on a fully-diluted basis.
Prompt Payment for Shares after the Closing of the Offer. The Merger
Agreement obligates Purchaser to pay, as promptly as practicable after
expiration of the Offer, for all Shares validly tendered and not withdrawn.
17
<PAGE>
The Merger
The Merger. The Merger Agreement provides that Purchaser will be merged
with and into the Company as soon as practicable following the satisfaction or
waiver of the conditions set forth in the Merger Agreement. Under the terms of
the Merger Agreement, at the closing of the Merger, each Share will be
converted into the right to receive from the Surviving Corporation $12.00 per
Share (the "Per Share Amount"). Notwithstanding the foregoing, the Per Share
Amount will not be payable in respect of (a) Shares held by the Company or by
Parent or any of its subsidiaries, which will be cancelled upon the closing of
the Merger, and (b) Shares as to which appraisal rights have been properly
exercised.
Covenants and Representations and Warranties
Reasonable Best Efforts. The Merger Agreement provides that each of Parent,
Purchaser and the Company will use its reasonable best efforts to consummate
the Offer and the Merger and the other transactions contemplated by the Merger
Agreement.
Conduct of Business Pending Merger. The Merger Agreement obligates the
Company, until the Effective Time, to conduct its operations in the ordinary
and usual course of business consistent with past practice. The Merger
Agreement expressly restricts the ability of the Company to engage in certain
material transactions, such as purchases and sales of assets or the sale or
redemption of outstanding securities of the Company without the prior written
consent of Parent, which consent shall not be unreasonably withheld or
delayed.
The Merger Agreement provides that, promptly upon the purchase by Purchaser
of Shares pursuant to the Offer, and from time to time thereafter, Purchaser
shall be entitled to designate up to such number of directors, rounded up to
the next whole number, on the Board as shall give Purchaser representation on
the Board equal to the product of the total number of directors on the Board
(giving effect to the directors so elected) multiplied by the percentage that
the aggregate number of Shares beneficially owned by Purchaser or any
affiliate of Purchaser following such purchase bears to the total number of
Shares then outstanding, and the Company shall, at such time, promptly take
all actions necessary to cause Purchaser's designees to be elected as
directors of the Company, including increasing the size of the Board or
securing the resignations of incumbent directors, or both. The Merger
Agreement also provides that, at such times, the Company shall use its best
efforts to cause persons designated by Purchaser to constitute the same
percentage as persons designated by Purchaser shall constitute of the Board of
(i) each committee of the Board, (ii) each board of directors of each domestic
Subsidiary and (iii) each committee of each such board, in each case only to
the extent permitted by applicable law. Until the earlier of (i) the time
Purchaser acquires a majority of the then outstanding Shares on a fully
diluted basis and (ii) the Effective Time, the Company has agreed to use its
best efforts to ensure that all the members of the Board and each committee of
the Board and such boards and committees of the domestic Subsidiaries as of
the date of the Merger Agreement who are not employees of the Company shall
remain members of the Board and of such boards and committees.
The Merger Agreement provides that following the election or appointment of
Purchaser's designees in accordance with the immediately preceding paragraph
and prior to the Effective Time, any amendment of the Merger Agreement or the
Certificate of Incorporation or By-laws of the Company, any termination of the
Merger Agreement by the Company, any extension by the Company of the time for
the performance of any of the obligations or other acts of Parent or Purchaser
or waiver of any of the Company's rights thereunder, will require the
concurrence of a majority of those directors of the Company then in office who
were neither designated by Purchaser nor are employees of the Company.
No Solicitation of Alternative Transactions. The Merger Agreement provides
that, except in the circumstances described below, the Company will not,
directly or indirectly, (i) solicit, initiate or knowingly encourage the
submission of any Acquisition Proposal (as defined below) or (ii) participate
in any discussions or negotiations regarding, or furnish to any person any
information with respect to, or take any other action to facilitate, any
Acquisition Proposal or any inquiries or the making of any proposal that
constitutes, or may
18
<PAGE>
reasonably be expected to lead to, any Acquisition Proposal. However, the
Merger Agreement does provide that the Board may furnish information to, or
enter into discussions or negotiations with, any person that makes an
unsolicited bona fide written Acquisition Proposal if, and only to the extent
that (A) the Offer shall not have closed, (B) the Board, after consultation
with and based upon the advice of independent legal counsel, determines in
good faith that such action is necessary for the Board to comply with its
fiduciary duties to its stockholders under applicable law, (C) the Board,
after consultation with its financial advisor, determines in good faith that
such Acquisition Proposal is reasonably likely to lead to an Acquisition
Proposal that, if accepted, is reasonably likely to be consummated, taking
into account all legal, financial and regulatory aspects of the proposal and
the person making the proposal and would, if consummated, result in a
transaction more favorable to its stockholders from a financial point of view
than the Offer and the Merger (any such more favorable Acquisition Proposal
being referred to in the Merger Agreement as a "Superior Proposal") and (D)
prior to taking such action, the Company (x) provides reasonable notice to
Parent to the effect that it is taking such action and (y) receives from such
person an executed confidentiality/standstill agreement in reasonably
customary form and in any event containing terms at least as stringent as
those contained in the confidentiality agreement between Parent and the
Company.
"Acquisition Proposal" means an inquiry, offer or proposal regarding any of
the following (other than the transactions contemplated by the Merger
Agreement) involving the Company or any of its subsidiaries: (a) any merger,
consolidation, share exchange, recapitalization, business combination or other
similar transaction; (b) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition of all or substantially all the assets of the Company and
its subsidiaries, taken as a whole, in a single transaction or series of
related transactions; (c)
any tender offer or exchange offer for 20 percent or more of the outstanding
Shares or the filing of a registration statement under the Securities Act of
1933, as amended, in connection therewith; or (d) 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.
Duty to Recommend the Offer and the Merger. The Merger Agreement prohibits
the Board from withdrawing or modifying, or proposing to withdraw or modify,
in a manner adverse to Parent, its approval or recommendation of the Merger
Agreement, the Offer or the Merger unless the Board determines in good faith,
taking into account all legal, financial and regulatory aspects, that the
failure to do so would constitute a breach by the Board of its fiduciary
duties under applicable law. Notwithstanding the foregoing, the Merger
Agreement provides that the Board may not approve or recommend (and in
connection therewith, withdraw or modify its approval or recommendation of the
Merger Agreement, the Offer or the Merger) an Acquisition Proposal unless such
an Acquisition Proposal is a Superior Proposal and unless the Board first
consults with outside counsel and determines that the refusal to do so would
constitute a breach by the Board of its fiduciary duties under applicable law.
Employee Benefits. Parent has agreed in the Merger Agreement to cause the
Surviving Corporation to honor the obligations of the Company and its
subsidiaries under the provisions of all collective bargaining, employment,
consulting, termination, severance, change in control and indemnification
agreements between and among the Company or any of its subsidiaries and any
current or former officer, director, consultant or employee of the Company or
any of its subsidiaries. Parent has also agreed in the Merger Agreement that,
for a period of six months following the Effective Time, subject to certain
exceptions, it will maintain for the benefit of the employees of the Company
and any of its subsidiaries compensation and benefit plans, programs,
arrangements and policies (other than equity-based compensation plans,
programs, arrangements and policies) as will provide compensation and benefits
which in the aggregate are not materially less favorable than those provided
to such employees as of the date of the Merger Agreement under the Company's
employee benefit plans (other than such equity-based compensation plans,
programs, arrangement and policies).
Unvested Employee Options and Vested Out-of-the-Money Employee Options. The
Merger Agreement provides that at the Effective Time each (A) unvested option
and (B) vested option whose exercise price immediately prior to the Effective
Time equals or exceeds $12.00, in each case to purchase Shares pursuant to the
Company's Stock Option Plan for Employees, as amended and restated as of
January 28, 1998 (the "Option
19
<PAGE>
Plan"), which is then outstanding, will be assumed by Parent and converted
into an option (an "Assumed Stock Option") to purchase the number of shares of
Georgia-Pacific Corporation-Georgia-Pacific Group common stock, par value $.80
per share ("Parent Common Stock") (rounded up to the nearest whole share)
equal to (x) the number of Shares subject to such option multiplied by (y) the
Merger Consideration divided by the closing price (as reported in the New York
City edition of the Wall Street Journal, or if not reported therein, another
nationally recognized source) for a share of Parent Common Stock on the date
of the Effective Time, at an exercise price per share of Parent Common Stock
(rounded down to the nearest penny) equal to (A) the former exercise price per
share of Common Stock under such option immediately prior to the Effective
Time divided by (B) the Merger Consideration divided by the closing price (as
reported in the New York City edition of the Wall Street Journal, or if not
reported therein, another nationally recognized source) for a share of Parent
Common Stock on the date of the Effective Time. The Merger Agreement also
provides that, except as provided above, each Assumed Stock Option will be
subject to the same terms and conditions as were applicable to the converted
Company Stock Option immediately prior to the Effective Time; provided,
however, that if the employment of any holder of an Assumed Stock Option is
terminated by the Company other than for cause after the Effective Time, all
Assumed Options held by such holder will be 100% vested and remain exercisable
until the earlier of (x) 90 days beginning on the date of such termination and
(y) the expiration of the term of the Assumed Option.
Vested In-the-Money Employee Options and Director Options. The Merger
Agreement provides that at the Effective Time, each vested option to purchase
Shares under the Option Plan whose exercise price immediately prior to the
Effective Time is less than $12.00 and each option to purchase Shares under
the Company's
Directors' Stock Option Plan, as amended and restated as of January 28, 1998,
whether vested or unvested, will be cancelled, and Parent shall pay each
holder thereof in cash at the Effective Time for each such option an amount
determined by multiplying (x) the excess, if any, of the Per Share Amount over
the applicable exercise price per Share of such option by (y) the number of
Shares to which such option relates.
Restricted Stock. The Merger Agreement provides that at the Effective Time,
any restricted Shares or share units awarded pursuant to any plan, arrangement
or transaction of the Company, including the Restricted Stock Plan for
Directors, as amended and restated on January 28, 1998, and the Company's
Incentive Compensation Plan, as amended and restated as of January 28, 1998,
outstanding immediately prior to the Effective Time will be cancelled, and
Parent will pay to each holder thereof in cash at the Effective Time for each
such restricted Share or share unit an amount determined by multiplying (x)
the Per Share Amount by (y) the number of such restricted Shares or share
units held by such holder.
Indemnification; Directors' and Officers' Insurance. In the Merger Agreement
Parent has agreed, from and after the Effective Time, to the fullest extent
permitted by applicable law, to indemnify, defend and hold harmless each
person who is now, or has been at any time prior to the date of the Merger
Agreement, or who becomes prior to the Effective Time, a director, officer or
employee of the Company or any of its subsidiaries against all losses,
expenses (including reasonable attorneys' fees and expenses), claims, damages,
liabilities or amounts paid in settlement, arising out of actions or omissions
occurring at or prior to the Effective Time and whether asserted or claimed
prior to, at or after the Effective Time that are in whole or in part (i)
based on or arising out of the fact that such person is or was a director,
officer or employee of the Company or any of its subsidiaries or (ii) based
on, arising out of or pertaining to the transactions contemplated by the
Merger Agreement.
Parent has also agreed in the Merger Agreement, for a period of 6 years
after the Effective Time, to maintain in effect the policies of directors' and
officers' liability insurance maintained by the Company for the benefit of
those persons who are covered by such policies at the Effective Time to the
extent that such liability insurance can be maintained or obtained annually at
a cost to Parent not greater than 200 percent of the premium now paid for such
directors' and officers' liability insurance; provided that if such insurance
cannot be so maintained or obtained at such cost, Parent has agreed in the
Merger Agreement to maintain or obtain as much of such insurance as can be so
maintained or obtained at a cost equal to 200 percent of the current annual
premiums of the Company for such insurance.
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Representations and Warranties. The Merger Agreement contains customary
representations and warranties of each party for a cash acquisition
transaction.
Conditions of the Merger
The respective obligations of Parent, Purchaser and the Company to effect
the Merger is subject to the satisfaction or waiver, where permissible, prior
to the Effective Time, of the following conditions:
(a) To the extent required by applicable law, the Merger Agreement shall
have been approved and adopted by the Company's stockholders;
(b) Any waiting period applicable to the Merger under the HSR Act shall have
expired or early termination thereof shall have been granted;
(c) There shall not be in effect any law restraining, enjoining or otherwise
preventing consummation of the transactions contemplated by the Merger
Agreement; and
(d) Purchaser shall have purchased all Shares validly tendered and not
withdrawn pursuant to the Offer.
Termination of the Merger Agreement
Termination by Mutual Agreement. The Merger Agreement may be terminated and
the Merger may be abandoned at any time prior to the closing of the Merger by
mutual written consent of the Company and Parent by action of their respective
Boards.
Termination by either Parent or the Company. The Merger Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time by action of either the Board of Directors of Parent (the "Parent Board")
or the Board if (i) the Merger shall not have been consummated by December 31,
1999; (ii) the Company's stockholders shall have rejected the Merger and the
Merger Agreement; or (iii) any law permanently restraining, enjoining or
otherwise prohibiting consummation of the Merger shall have become final and
non-appealable; provided that the right to terminate the Merger Agreement
pursuant to this paragraph shall not be available to any party that has
breached in any material respect its obligations under the Merger Agreement in
any manner that shall have proximately contributed to the occurrence of the
failure of the Merger to be consummated.
Termination by the Company. The Merger Agreement may be terminated and the
Merger may be abandoned at any time prior to the Expiration Date, by action of
the Board:
(a) If (i) the Company is not in breach of its obligations specified above
under "No Solicitation of Alternative Transactions" and "Duty to Recommend the
Offer and the Merger", (ii) the Expiration Date has not yet occurred, (iii)
the Board authorizes the Company, subject to complying with the terms of the
Merger Agreement, to enter into a binding written agreement concerning a
transaction that constitutes a Superior Proposal and the Company notifies
Parent in writing that it intends to enter into such an agreement, attaching
the most current version of such agreement to such notice, (iv) Parent does
not make, within five business days of receipt of the Company's written
notification of its intention to enter into a binding agreement for a Superior
Proposal, an offer that the Board determines, in good faith after consultation
with its financial advisors, is at least as favorable, from a financial point
of view, to the stockholders of the Company as the Superior Proposal and (v)
the Company prior to such termination pays to Parent in immediately available
funds the fees described below under "Termination Fees"; or
(b) If Purchaser shall not have accepted for payment any Shares pursuant to
the Offer within 120 days following commencement of the Offer.
Termination by Parent. The Merger Agreement may be terminated and the Merger
may be abandoned at any time prior to the Expiration Date, by action of the
Parent Board, if:
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(a) the Company enters into a binding agreement for a Superior Proposal or
prior to the Expiration Date the Board shall have withdrawn or adversely
modified its approval or recommendation of the Merger Agreement, the Offer or
the Merger; or
(b) if Purchaser shall not have accepted for payment any Shares pursuant to
the Offer within 120 days following commencement of the Offer.
Termination Fees
Termination Fees Payable by the Company to Parent. In the event that the
Merger Agreement is terminated by (A) the Company pursuant to paragraph (a)
under "--Termination by the Company", (B) Parent pursuant to paragraph (a)
under "--Termination by Parent" or (C) Parent pursuant to paragraph (b) under
"--Termination by Parent" (1) as a result of a willful failure or breach by
the Company, (2) at the time of such willful failure or breach there shall
have been an Acquisition Proposal involving the Company (which proposal shall
not have been withdrawn prior to the time of such termination) and (3) within
6 months of such termination, an Acquisition Proposal by a third party, or
within 9 months of such termination an Acquisition Proposal by the party that
made the Acquisition Proposal referred to in clause (C)(2) of this paragraph,
is entered into, agreed to or consummated by the Company, the Company is
obligated to pay Parent a termination fee of $25,000,000.
In the event that (A) the Merger Agreement is terminated by Parent or the
Company pursuant to clause (ii) under "--Termination by either Parent or the
Company" or by Parent pursuant to paragraph (b) under "--Termination by
Parent" as a result of the failure to satisfy the Minimum Condition, (B) at
the time of such termination there shall have been an Acquisition Proposal
involving the Company (which proposal shall not have been withdrawn prior to
the time of such termination) and (C) within 6 months of such termination, an
Acquisition Proposal by a third party, or within 9 months of such termination
any Acquisition Proposal by the party that made the Acquisition Proposal
referred to above in clause (B) of this paragraph, is entered into, agreed to
or consummated by the Company, the Company is obligated to pay Parent a
termination fee of $25,000,000.
Termination Fee Payable by Parent to the Company. In the event that (A) the
Merger Agreement is terminated pursuant to paragraph (b) under "--Termination
by the Company" as a result of a willful failure or breach by Parent or
Purchaser and (B) at the time of such willful failure or breach there shall
have been a Parent Acquisition Proposal (which Parent Acquisition Proposal
shall have been conditioned upon the Offer or the Merger failing to close) and
(C) within 6 months of such termination, a Parent Acquisition Proposal by a
third party, or within 9 months of such termination a Parent Acquisition
Proposal by the party that made the Parent Acquisition Proposal referred to in
clause (B) of this paragraph, is entered into, agreed to or consummated by
Parent, then Parent is obligated to pay the Company a termination fee of
$25,000,000.
Expense Reimbursement
If the Merger Agreement is terminated by Parent pursuant to paragraph (b)
under "--Termination by Parent" as the result of a failure of performance or
breach of the Company, then the Company will pay Parent an amount, not to
exceed $5,000,000, equal to the documented expenses incurred by Parent in
connection with the Merger Agreement.
If the Merger Agreement is terminated by the Company pursuant to paragraph
(b) under "--Termination by the Company" as the result of the failure of
performance or breach of Parent, then Parent will pay the Company an amount,
not to exceed $5,000,000, equal to the documented expenses incurred by the
Company in connection with the Merger Agreement.
Notwithstanding the foregoing, in no circumstances will the amount payable
to either Parent or the Company under "Termination Fees" or "Expense
Reimbursement" (exclusive of any payment by the Company to reimburse Parent
for payment of the Funded Break-up Fee (defined below)) exceed $25,000,000 in
the aggregate.
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UGI Termination Fee
Pursuant to a letter agreement dated May 25, 1999, Parent paid the Company,
immediately prior to the execution of the Merger Agreement, $25,000,000 (the
"Funded Break-up Fee") in order to reimburse the Company for the termination
fee paid by the Company to UGI in connection with the termination of the UGI
Agreement.
In the event that the Merger Agreement is terminated by either Parent or the
Company for any reason, other than a termination pursuant to (x) "--
Termination by Mutual Agreement", (y) "--Termination by either Parent or the
Company" where the termination did not result from a failure of performance or
breach by the Company or (z) paragraph (b) under "--Termination by the
Company" or "Termination by Parent" where such termination did not result from
a failure to satisfy the conditions specified under "Conditions of the Offer"
(unless, in the case of paragraphs (a) and (b) under "Conditions of the
Offer", such termination resulted from the actions of any antitrust regulatory
authority or, in the case of paragraph (d) under "Conditions of the Offer",
such termination resulted from the occurrence of an event specified in clause
(iv) thereof), the Company is obligated to reimburse Parent for the payment of
the $25,000,000 Funded Break-up Fee described in the preceding paragraph.
Fees and Expenses
The Merger Agreement provides that, whether or not the Offer or the Merger
is consummated, all expenses incurred in connection with the Merger Agreement
and the transactions contemplated by the Merger Agreement shall be paid by the
party incurring such expenses, except (a) expenses incurred in connection with
the filing, printing and mailing of the Schedule 14D-9 and, if necessary, the
proxy statement relating to the special meeting of stockholders called in
connection with the Merger, which shall be paid by Parent, and (b) if
applicable, as provided under "Expense Reimbursement", "Termination Fees" and
"UGI Termination Fee".
11. Purpose of the Offer and the Merger; Plans for the Company After the Offer
and the Merger.
Purpose of the Offer. The Offer is being made pursuant to the Merger
Agreement. The purpose of the Offer and the Merger is to enable Parent to
acquire control of, and the entire equity interest in, the Company. Upon
consummation of the Merger, the Company will become a wholly owned subsidiary
of Parent.
Under Delaware Law, the approval of the Board and the affirmative vote of
the holders of a majority of the outstanding Shares is required to approve and
adopt the Merger Agreement and the transactions contemplated thereby,
including the Merger. The Board, by the unanimous vote of all directors
present and voting, approved and adopted the Merger Agreement and the
transactions contemplated thereby, and, unless the Merger is consummated
pursuant to the "short-form" merger provisions under Delaware Law described
below under "Short-Form Merger", the only remaining required corporate action
of the Company is the approval and adoption of the Merger Agreement and the
transactions contemplated thereby by the affirmative vote of the holders of a
majority of the Shares. Accordingly, if the Minimum Condition is satisfied,
Purchaser will have sufficient voting power to cause the approval and adoption
of the Merger Agreement and the transactions contemplated thereby without the
affirmative vote of any other stockholder.
In the Merger Agreement, the Company has agreed to take all lawful action to
cause a special meeting of its stockholders to be duly called and held as soon
as practicable after the consummation of the Offer for the purpose of voting
on the approval and adoption of the Merger Agreement and the transactions
contemplated thereby, if such action is required by Delaware Law. Parent and
Purchaser have agreed that all Shares owned by them and their subsidiaries
will be voted in favor of the Merger Agreement and the transactions
contemplated thereby.
If Purchaser purchases Shares pursuant to the Offer, the Merger Agreement
provides that Purchaser will be entitled to designate representatives to serve
on the Board in proportion to Purchaser's ownership of Shares following such
purchase. See Section 10. Purchaser expects that such representation would
permit Purchaser to exert substantial influence over the Company's conduct of
its business and operations.
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Short-Form Merger. Under Delaware Law, if Purchaser acquires, pursuant to
the Offer or otherwise, at least 90% of the outstanding Shares, Purchaser will
be able to approve the Merger without a vote of the Company's stockholders. In
such event, Parent, Purchaser and the Company have agreed in the Merger
Agreement to take, at the request of Purchaser, all necessary and appropriate
action to cause the Merger to become effective as soon as reasonably
practicable after such acquisition, without a meeting of the Company's
stockholders. If, however, Purchaser does not acquire at least 90% of the
outstanding Shares pursuant to the Offer or otherwise and a vote of the
Company's stockholders is required under Delaware Law, a significantly longer
period of time would be required to effect the Merger.
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 will have certain rights under Delaware Law, the relevant portions
of which are attached to this Offer to Purchase as Schedule II, to dissent and
demand appraisal of, and to receive payment in cash of the fair value of,
their Shares. Such rights to dissent, if the statutory procedures are complied
with, could lead to a judicial determination of the fair value of the Shares,
as of the day prior to the date on which the stockholders' vote was taken
approving the Merger or similar business combination (excluding any element of
value arising from the accomplishment or expectation of the Merger), required
to be paid in cash to such dissenting holders for their Shares. In addition,
such dissenting stockholders would be entitled to receive payment of a fair
rate of interest from the date of consummation of the Merger on the amount
determined to be the fair value of their Shares. In determining the fair value
of the Shares, the court is required to take into account all relevant
factors. Accordingly, such determination could be based upon considerations
other than, or in addition to, the market value of the Shares, including,
among other things, asset values and earning capacity. In Weinberger v. UOP,
Inc., the Delaware Supreme Court stated, among other things, that "proof of
value by any techniques or methods which are generally considered acceptable
in the financial community and otherwise admissible in court" should be
considered in an appraisal proceeding. Therefore, the value so determined in
any appraisal proceeding could be the same, more or less than the purchase
price per Share in the Offer or the Merger Consideration.
In addition, several decisions by Delaware courts have held that, in certain
circumstances, a controlling stockholder of a company involved in a merger has
a fiduciary duty to other stockholders which requires that the merger be fair
to such other stockholders. In determining whether a merger is fair to
minority stockholders, Delaware courts have considered, among other things,
the type and amount of consideration to be received by the stockholders and
whether there was fair dealing among the parties. The Delaware Supreme Court
stated in Weinberger and Rabkin v. Philip A. Hunt Chemical Corp. that the
remedy ordinarily available to minority stockholders in a cash-out merger is
the right to appraisal described above. However, a damages remedy or
injunctive relief may be available if a merger is found to be the product of
procedural unfairness, including fraud, misrepresentation or other misconduct.
The foregoing summary of the rights of dissenting stockholders under
Delaware law does not purport to be a complete statement of the procedures to
be followed by stockholders desiring to exercise any dissenters' rights
available under Delaware law. The preservation and exercise of dissenters'
rights require strict adherence to the applicable provisions of Delaware law.
"Going Private" Transactions. 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 is not applicable to the Merger.
Rule 13e-3 requires, among other things, that certain financial information
concerning the Company and certain information relating to the fairness of the
proposed transaction and the consideration offered to minority stockholders in
such transaction, be filed with the Commission and disclosed to stockholders
prior to consummation of the transaction.
Plans for the Company. Following the Merger, Parent's current intention is
to maintain the Company's separate corporate identity and operate it under its
existing name as a wholly owned subsidiary of Parent. During
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the pendency of the Offer, and after the consummation of Offer and Merger,
Parent will evaluate the business and operations of the Company and make such
changes as it considers appropriate. Parent intends to continue to implement
the Company's restructuring plan, pursuant to which a significant number of
employees of the Company have been and will be terminated, and a significant
percentage of its existing warehousing operations have been and will be
closed. Parent also intends to appoint new officers of the Company, who will
include persons who are now employees of both Parent and the Company. Parent
intends to consolidate most of the staff operations of the Company with those
of Parent.
Except as indicated in this Offer to Purchase, Parent does not have any
present plans or proposals which relate to or would result in an extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
involving the Company or any Subsidiary, a sale or transfer of a material
amount of assets of the Company or any Subsidiary.
12. Dividends and Distributions
The Merger Agreement provides that the Company shall not, nor will any of
its subsidiaries between the date of the Merger Agreement and the Effective
Time, without the prior written consent of Parent, (a) authorize for issuance,
issue, sell, deliver or agree or commit to issue, sell or deliver (whether
through the issuance or granting of options, warrants, commitments,
subscriptions, rights to purchase or otherwise) any stock of any class or any
other securities convertible into or exchangeable for any stock or any equity
equivalents (including, without limitation, any stock options or stock
appreciation rights), except (i) for the issuance or sale of Shares pursuant
to outstanding stock options; or (ii) the issuance of other shares of Company
Common Stock upon the exercise of outstanding securities convertible into or
exchangeable for such shares; or (b) (i) split, combine or reclassify any
shares of its capital stock (ii) declare, set aside or pay any dividend or
other distribution (whether in cash, stock or property or any combination
thereof) in respect of its capital stock, except for the payment of regular
quarterly cash dividends with usual record and payment dates in accordance
with past dividend practice not to exceed $.05 per Share, (iii) make any other
actual, constructive or deemed distribution in respect of any shares of its
capital stock or otherwise make any payments to stockholders in their capacity
as such, or (iv) redeem, repurchase or otherwise acquire any of its securities
or any securities of any of its subsidiaries.
If, on or after May 25, 1999, the Company should declare, set aside or pay
any dividend on the Shares or make any other distribution (whether in cash,
stock or property or any combination thereof) with respect to the Shares that
is payable or distributable to stockholders of record on a date prior to the
transfer to the name of Purchaser or its nominee or transferee on the
Company's stock transfer records of the Shares purchased pursuant to the Offer
(other than regular quarterly cash dividends with usual record and payment
dates in accordance with past dividend practice and in an amount not in excess
of $.05 per Share) then, without prejudice to Purchaser's rights under Section
14, (i) the purchase price per Share payable by Purchaser pursuant to the
Offer will be reduced to the extent any such dividend or distribution is
payable in cash and (ii) any non-cash dividend, distribution or right shall be
received and held by the tendering stockholder for the account of Purchaser
and will be required to be promptly remitted and transferred by each tendering
stockholder to the Depositary for the account of Purchaser, accompanied by
appropriate documentation of transfer. Pending such remittance and subject to
applicable law, Purchaser will be entitled to all the rights and privileges as
owner of any such non-cash dividend, distribution or right and may withhold
the entire purchase price or deduct from the purchase price the amount or
value thereof, as determined by Purchaser in its sole discretion.
13. Effect of the Offer and Merger on the Market for the Shares, Exchange
Listing and Exchange Act Registration
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 could adversely affect the liquidity and
market value of the remaining Shares held by the public.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the requirements of the NYSE for continued listing
and may be delisted from the NYSE.
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According to the NYSE's published guidelines, the NYSE would consider
delisting the Shares if, among other things, the number of record holders of
at least 100 Shares should fall below 1,200, the number of publicly held
Shares (exclusive of holdings of officers, directors and their families and
other concentrated holdings of 10% or more ("NYSE Excluded Holdings")) should
fall below 600,000 or the aggregate market value of publicly held Shares
(exclusive of NYSE Excluded Holdings) should fall below $5,000,000. If, as a
result of the purchase of Shares pursuant to the Offer or otherwise, the
Shares no longer meet the requirements of the NYSE for continued listing and
the listing of the Shares is discontinued, the market for the Shares could be
adversely affected.
If the NYSE were to delist the Shares, it is possible that the Shares would
continue to trade on another securities exchange or in the over-the-counter
market and that price or other quotations would be reported by such exchange
or through the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") or other sources. The extent of the public market therefor
and the availability of such quotations would depend, however, upon such
factors as the number of stockholders and/or the aggregate market value of
such securities remaining at such time, the interest in maintaining a market
in the Shares on the part of securities firms, the possible termination of
registration under the Exchange Act as described below, and other factors.
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 Per Share Amount.
The Shares are currently "margin securities", as such term is defined under
the rules of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of
allowing brokers to extend credit on the collateral of such securities.
Depending upon factors similar to those described above regarding listing and
market quotations, following the Offer it is possible that the Shares might no
longer constitute "margin securities" for purposes of the margin regulations
of the Federal Reserve Board, in which event such Shares could no longer be
used as collateral for loans made by brokers.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application by the Company to the
Commission if the Shares are not listed on a national securities exchange and
there are fewer than 300 record holders. The termination of the registration
of the Shares under the Exchange Act would substantially reduce the
information required to be furnished by the Company to holders of Shares 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 in connection with stockholders'
meetings and the requirements of Rule 13e-3 under the Exchange Act with
respect to "going private" transactions, no longer applicable to the Shares.
In addition, "'affiliates" of the Company and persons holding "restricted
securities" of the Company may be deprived of the ability to dispose of such
securities pursuant to Rule 144 promulgated under the Securities Act of 1933,
as amended. If registration of the Shares under the Exchange Act were
terminated, the Shares would no longer be "margin securities" or be eligible
for NASDAQ reporting.
14. Certain Conditions of the Offer
Notwithstanding any other provision of the Offer but subject to compliance
with the other provisions of the Merger Agreement, the Merger Agreement
provides that Purchaser is not required to accept for payment or pay for any
Shares tendered pursuant to the Offer, and may terminate or amend the Offer in
accordance with the Merger Agreement and may extend the acceptance for payment
of and payment for Shares tendered, if (i) the Minimum Condition has not been
satisfied, (ii) any applicable waiting period under the HSR Act has not
expired or been terminated prior to the expiration of the Offer, or (iii) at
any time on or after the date of the Merger Agreement, and prior to the
acceptance for payment of Shares, any of the following conditions exist and
remain in effect:
(a) there shall have been instituted or be pending by any governmental
entity any action or proceeding before any court or governmental,
administrative or regulatory authority or agency, domestic or foreign, (i)
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challenging or seeking to make illegal, materially delay or otherwise directly
or indirectly restrain or prohibit the making of the Offer, the acceptance for
payment of, or payment for, any Shares by Parent, Purchaser or any other
affiliate of Parent, or the consummation of any other transaction contemplated
by the Merger Agreement; (ii) seeking to prohibit or limit materially the
ownership or operation by the Company, Parent or any of their subsidiaries of
all or any material portion of the business or assets of the Company, Parent
or any of their subsidiaries, or to compel the Company, Parent or any of their
subsidiaries to dispose of or hold separate all or any material portion of the
business or assets of the Company, Parent or any of their subsidiaries, as a
result of the transactions contemplated by the Merger Agreement; (iii) seeking
to impose or confirm limitations on the ability of Parent, Purchaser or any
other affiliate of Parent to exercise effectively full rights of ownership of
any Shares, including, without limitation, the right to vote any Shares
acquired by Purchaser pursuant to the Offer or otherwise on all matters
properly presented to the Company's stockholders, including, without
limitation, the approval and adoption of the Merger Agreement and the
transactions contemplated by the Merger Agreement; or (iv) seeking to require
divestiture by Parent, Purchaser or any other affiliate of Parent of any
Shares;
(b) there shall have been any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or injunction
enacted, entered, enforced, promulgated, amended, issued or deemed applicable
to (i) Parent, the Company or any subsidiary or affiliate of Parent or the
Company or (ii) any transaction contemplated by the Merger Agreement, by any
legislative body, court, government or governmental, administrative or
regulatory authority or agency, domestic or foreign, other than the routine
application of the waiting period provisions of the HSR Act to the Offer or
the Merger, which is reasonably likely to result, directly or indirectly, in
any of the consequences referred to in clauses (i) through (iv) of paragraph
(a) above;
(c) there shall have occurred any change, condition, event or development
that has a material adverse effect on (i) the business, results of operations
or financial condition of the Company and its subsidiaries, taken as a whole,
other than any effect arising out of or attributable to the economy, the
securities markets in general or the industries generally in which the Company
and its subsidiaries operate or (ii) the ability of the Company to consummate
the transactions contemplated by the Merger Agreement;
(d) there shall have occurred (i) any general suspension of, or limitation
on prices for, trading in securities on the New York Stock Exchange, (ii) a
declaration of a banking moratorium or any suspension of payments in respect
of banks in the United States, (iii) any material limitation (whether or not
mandatory) by any government or governmental, administrative or regulatory
authority or agency, domestic or foreign, on the extension of credit by banks
or other lending institutions in the United States, (iv) a commencement of a
war or armed hostilities or other national or international calamity directly
or indirectly involving the United States (other than any war or armed
hostilities or other calamity in the Balkan States) that is material to the
United States or (v) in the case of any of the foregoing (including any war or
armed hostilities or other calamity in the Balkan States) existing on the date
of the Merger Agreement, a material acceleration or worsening thereof;
(e) it shall have been publicly disclosed or Purchaser shall have otherwise
learned that beneficial ownership (determined for the purposes of this
paragraph as set forth in Rule 13d-3 promulgated under the Exchange Act) of
20% or more of the then outstanding Shares has been acquired by any person,
other than Parent or any of its affiliates;
(f) any representation or warranty of the Company in the Merger Agreement
which is qualified as to materiality or Material Adverse Effect shall not be
true and correct in all respects or any such representation or warranty that
is not so qualified shall not be true and correct in any respect that would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect; or
(g) the Company shall have failed to perform in any material respect any
obligation or to comply in any material respect with any agreement or covenant
of the Company to be performed or complied with by it under the Merger
Agreement, which, in the reasonable good faith judgment of Purchaser in any
such case, and regardless of the circumstances giving rise to any such
condition, makes it inadvisable to proceed with such acceptance for payment or
payment.
27
<PAGE>
The foregoing conditions are for the sole benefit of Purchaser and Parent
and may be asserted by Purchaser or Parent regardless of the circumstances
giving rise to any such condition or may be waived by Purchaser or Parent in
whole or in part at any time and from time to time in their sole discretion.
The failure by Parent or Purchaser at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right, the waiver of
any such right with respect to particular facts and other circumstances shall
not be deemed a waiver with respect to any other facts and circumstances, and
each such right shall be deemed an ongoing right that may be asserted at any
time and from time to time.
15. Certain Legal Matters and Regulatory Approvals
General. Based upon its examination of publicly available information with
respect to the Company and the review of certain information furnished by the
Company to Parent and discussions of representatives of Parent with
representatives of the Company (see Section 10), neither Purchaser nor Parent
is aware of any license or other regulatory permit that appears to be material
to the business of the Company and the Subsidiaries, taken as a whole, which
might be adversely affected by the acquisition of Shares by Purchaser pursuant
to the Offer or, except as set forth below, of any approval or other action by
any domestic (federal or state) or foreign governmental, administrative or
regulatory authority or agency which would be required prior to the
acquisition of Shares by Purchaser pursuant to the Offer. Should any such
approval or other action be required, it is Purchaser's present intention to
seek such approval or action. Purchaser does not currently intend, however, to
delay the purchase of Shares tendered pursuant to the Offer pending the
outcome of any such action or the receipt of any such approval (subject to
Purchaser's right to decline to purchase Shares if any of the conditions in
Section 14 shall have occurred). There can be no assurance that any such
approval or other action, if needed, would be obtained without substantial
conditions or that adverse consequences might not result to the business of
the Company, Purchaser or Parent or that certain parts of the businesses of
the Company, Purchaser or Parent might not have to be disposed of or held
separate or other substantial conditions complied with in order to obtain such
approval or other action or in the event that such approval was not obtained
or such other action was not taken. Purchaser's obligation under the Offer to
accept for payment and pay for Shares is subject to certain conditions,
including conditions relating to the legal matters discussed in this Section
15. See Section 14.
State Takeover Laws. In general, Section 203 of Delaware Law prevents an
"interested stockholder" (generally a person who owns or has the right to
acquire 15% or more of a corporation's outstanding voting stock, or an
affiliate or associate thereof) from engaging in a "business combination"
(defined to include mergers and certain other transactions) with a Delaware
corporation for a period of three years following the date such person became
an interested stockholder unless, among other things, prior to such date the
board of directors of the corporation approved either the business combination
or the transaction in which the interested stockholder became an interested
stockholder. On May 24, 1999, prior to the execution of the Merger Agreement,
the Board, by the unanimous vote of all directors present and voting at a
meeting held on such date, approved the Merger Agreement and determined that
each of the Offer and the Merger is fair to, and in the best interest of, the
stockholders of the Company. Accordingly, Section 203 is inapplicable to the
Offer and the Merger.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In Edgar v. MITE Corp., the Supreme Court of
the United States invalidated on constitutional grounds the Illinois Business
Takeover Statute, which, as a matter of state securities law, made takeovers
of corporations meeting certain requirements more difficult. However, in 1987
in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the
State of 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 stockholders.
The state law before the Supreme Court was by its terms applicable only to
corporations that had a substantial number of stockholders in the state and
were incorporated there.
The Company, directly or through subsidiaries, conducts business in a number
of states throughout the United States, some of which have enacted takeover
laws. Purchaser does not know whether any of these laws
28
<PAGE>
will, by their terms, apply to the Offer or the Merger and has not complied
with any such laws. Should any person seek to apply any state takeover law,
Purchaser will take such action as then appears desirable, which may include
challenging the validity or applicability of any such statute in appropriate
court proceedings. In the event it is asserted that one or more state takeover
laws is applicable to the Offer or the Merger, and an appropriate court does
not determine that it is inapplicable or invalid as applied to the Offer,
Purchaser might be required to file certain information with, or receive
approvals from, the relevant state authorities. In addition, if enjoined,
Purchaser might be unable to accept for payment any Shares tendered pursuant
to the Offer, or be delayed in continuing or consummating the Offer, and the
Merger. In such case, Purchaser may not be obligated to accept for payment any
Shares tendered. See Section 14.
Antitrust. Under the HSR Act and the rules that have been promulgated
thereunder by the FTC, certain acquisition transactions may not be consummated
unless certain information has been furnished to the Antitrust Division and
the FTC and certain waiting period requirements have been satisfied. The
acquisition of Shares by Purchaser pursuant to the Offer are subject to such
requirements. See Section 2.
Pursuant to the HSR Act, on May 26, 1999 Parent and Company each filed a
Premerger Notification and Report Form in connection with the purchase of
Shares pursuant to the Offer with the Antitrust Division and the FTC. Under
the provisions of the HSR Act applicable to the Offer, the purchase of Shares
pursuant to the Offer may not be consummated until the expiration of a 15-
calendar day waiting period following the filing by Parent. Accordingly, it is
anticipated that the waiting period under the HSR Act applicable to the
purchase of Shares pursuant to the Offer will expire at 11:59 p.m., New York
City time, on June 10, 1999, unless such waiting period is earlier terminated
by the FTC and the Antitrust Division or extended by a request from the FTC or
the Antitrust Division for additional information or documentary material
prior to the expiration of the waiting period. Pursuant to the HSR Act, Parent
has requested early termination of the waiting period applicable to the Offer.
There can be no assurance, however, that the 15-day HSR Act waiting period
will be terminated early. If either the FTC or the Antitrust Division were to
request additional information or documentary material from Parent with
respect to the Offer, the waiting period with respect to the Offer would
expire at 11:59 p.m., New York City time, on the tenth calendar day after the
date of substantial compliance by Parent with such request. Thereafter, the
waiting period could be extended only by court order. If the waiting period is
extended pursuant to a request by the FTC or the Antitrust Division for
additional information or documentary material pursuant to the HSR Act, the
Offer may, but need not, be extended and, in any event, the payment for Shares
will be deferred until expiration of the extended waiting period, unless the
waiting period is sooner terminated by the FTC and the Antitrust Division.
Only one extension of such waiting period pursuant to a request for additional
information is authorized by the HSR Act and the rules promulgated thereunder,
except by court order. Any such extension of the waiting period will not give
rise to any withdrawal rights not otherwise provided for by applicable law.
See Section 4. It is a condition to the Offer that the waiting period
applicable under the HSR Act to the Offer expire or be terminated. See Section
2 and Section 14.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares
by Purchaser pursuant to the Offer. At any time before or after the purchase
of Shares pursuant to the Offer by Purchaser, the FTC or the Antitrust
Division could take such action under the antitrust laws as it deems necessary
or desirable in the public interest, including seeking to enjoin the purchase
of Shares pursuant to the Offer or seeking the divestiture of Shares purchased
by Purchaser or the divestiture of substantial assets of Parent, the Company
or their respective subsidiaries. Private parties and state attorneys general
may also bring legal action under federal or state antitrust laws under
certain circumstances. Based upon an examination of information available to
Parent relating to the businesses in which Parent, the Company and their
respective subsidiaries are engaged, Parent and Purchaser believe that the
Offer will not violate the antitrust laws. Nevertheless, there can be no
assurance that a challenge to the Offer on antitrust grounds will not be made
or, if such a challenge is made, what the result would be. See Section 14 for
certain conditions to the Offer, including conditions with respect to
litigation.
Appropriate filings will also be made under the Competition Act (Canada) and
Mexico's Pre-Merger Regulations. The Competition Act (Canada) provides that
transactions subject to it cannot close before the
29
<PAGE>
expiration of any applicable waiting period (normally seven or twenty-one
calendar days). In certain circumstances, the waiting period can be extended,
or the Canadian competition authorities can obtain interim injunctions to
delay closing for a maximum of 60 days or as otherwise agreed by the parties.
There is no waiting period under Mexico's Pre-Merger Regulations. Purchaser
intends to purchase the Shares under the Offer unless the Canadian or Mexican
authorities have made application for an injunction or similar legal
prohibition against such purchase.
16. Fees and Expenses
Except as set forth below, Purchaser will not pay any fees or commissions to
any broker, dealer or other person for soliciting tenders of Shares pursuant
to the Offer.
Purchaser and Parent have engaged Wasserstein Perella to act as their
financial adviser and as the Dealer Manager. Pursuant to a letter agreement
dated April 12, 1999, Parent has paid Wasserstein Perella a financial advisory
fee of $250,000, and will pay such firm a fee of $7 million (against which the
$250,000 financial adviser fee will be credited), for all of its other
services in connection with the Offer and the Merger, including its services
as Dealer Manager, contingent upon completion of Merger. Parent has also
agreed to reimburse Wasserstein Perella for its reasonable out-of-pocket
expenses related to its engagement, including the reasonable fees and expenses
of its counsel, and to indemnify Wasserstein Perella against certain
liabilities and expenses in connection with its services, including certain
liabilities under Federal securities laws.
Purchaser and Parent have retained First Chicago Trust Company of New York,
as the Depositary, and D.F. King & Co., Inc., as the Information Agent, in
connection with the Offer. The Information Agent may contact holders of Shares
by mail, telephone, telex, telecopy, telegraph and personal interview and may
request banks, brokers, dealers and other nominee stockholders to forward
materials relating to the Offer to beneficial owners.
The Information Agent and the Depositary will receive reasonable and
customary compensation for their services, will be reimbursed for certain out-
of-pocket expenses and will be indemnified against certain liabilities and
expenses in connection with the Offer, including certain liabilities under the
federal securities laws.
17. Miscellaneous
Purchaser is not aware of any jurisdiction where the making of the Offer is
prohibited by any administrative or judicial action pursuant to any valid
state statute. If Purchaser becomes aware of any valid state statute
prohibiting the making of the Offer or the acceptance of Shares pursuant
thereto, Purchaser will make a good faith effort to comply with any such state
statute. If, after such good faith effort, Purchaser cannot comply with any
such state statute, the Offer will not be made to (nor will tenders be
accepted from or on behalf of) the holders of Shares in such state. 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 by one or more registered
brokers or dealers licensed under the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER OR THE COMPANY NOT CONTAINED IN THIS
OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
Pursuant to Rule 14d-3 of the General Rules and Regulations under the
Exchange Act, Parent and Purchaser have filed with the Commission the Schedule
14D-1, together with exhibits, furnishing certain additional information with
respect to the Offer. The Schedule 14D-1 and any amendments thereto, including
exhibits, may be inspected at, and copies may be obtained from, the same
places and in the same manner as set forth in Section 7 (except that they will
not be available at the regional offices of the Commission).
Atlanta Acquisition Corp.
May 28, 1999
30
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
PARENT AND PURCHASER
1. Directors and Executive Officers of Parent. The following table sets
forth the name, current business address, citizenship and present principal
occupation or employment, and material occupations, positions, offices or
employments and business addresses thereof for the past five years of each
director and executive officer of Parent. Unless otherwise indicated, the
current business address of each person is Georgia-Pacific Corporation, 133
Peachtree Street, N.E., Atlanta, GA 30303. Unless otherwise indicated, each
such person is a citizen of the United States of America and has held his or
her present position as set forth below for the past five years. Unless
otherwise indicated, each occupation set forth opposite an individual's name
refers to employment with Parent.
<TABLE>
<CAPTION>
Present Principal Occupation or Employment;
Name, Citizenship and Material Positions Held During the Past Five Years
Current Business Address and Business Addresses Thereto
------------------------ -------------------------------------------------------
<S> <C>
James S. Balloun............. Chairman, Chief Executive Office and President
of National Service Industries, Inc. (lighting
equipment, chemicals, textile rental and
envelopes), 1420 Peachtree Street N.E.,
Atlanta, Georgia since 1996, has been a
director of Georgia-Pacific since July 30,
1998. Mr. Balloun served as a Director of
McKinsey & Company, Inc. (management
consulting), from 1976 until assuming his
present position.
Mr. Balloun is also a director of National
Service Industries, Inc., Radiant Systems, Inc.
and Wachovia Corporation.
Robert Carswell.............. Of Counsel to the law firm of Shearman &
Sterling, 599 Lexington Avenue, New York, New
York since January 1994, has been a director of
Georgia-Pacific since 1987. Mr. Carswell was a
partner of Shearman & Sterling from 1981
through 1993. He also served as Chairman of the
Private Export Funding Corporation, New York,
New York (finance company affiliated with the
Export-Import Bank of the United States) from
1993 until December 1996.
Alston D. Correll............ Chief Executive Officer of Georgia-Pacific
since May 1993, Chairman of the Parent since
December 1993, and President since May 1996,
has been a director of Georgia-Pacific since
1992.
Mr. Correll is also a director of Sears,
Roebuck and Co., The Southern Company and
SunTrust Banks, Inc.
Jane Evans................... Chief Executive Office of SmartTV (interactive
television/smart cards), 3500 West Olive
Avenue, Suite 540, Burbank, California since
August 1995, has been a director of Georgia-
Pacific since 1994. From April 1991 until March
1995, she was Vice President and General
Manager of the Hotel and Personal Services
Market Unit of US West Communications, Inc.
(telecommunications company), Denver, Colorado.
Ms. Evans is also a director of Banc-One-
Arizona, Kaufman & Broad Home Corp. and Phillip
Morris Companies, Inc.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Present Principal Occupation or Employment;
Name, Citizenship and Material Positions Held During the Past Five Years
Current Business Address and Business Addresses Thereto
------------------------ -------------------------------------------------------
<S> <C>
Donald V. Fites.............. Retired effective February 1, 1999 as Chairman
and Chief Executive Officer of Caterpillar Inc.
(manufacture of construction, mining and
agricultural machinery and engines), 100 NE
Adams Street, Peoria, Illinois, a position he
had held since 1990. Mr. Fites has been a
director of the Parent since 1992.
Mr. Fites is also a director of Caterpillar
Inc., AT&T Corporation, Mobil Corporation and
Wolverine World Wide Inc.
Harvey C. Freuhauf, Jr....... President of HCF Enterprises, Inc. (private
investment management company), 100 Maple Park
Boulevard, Suite 106, St. Clair Shores,
Michigan since 1969, has been a director of
Georgia-Pacific since 1968.
Mr. Fruehauf is also a director of ISPNews-
HighWnd, Inc. and Sentinel Trust Company, LBA.
Richard V. Giordano.......... Chairman of BG plc (purchase, distribution and
sale of gas and gas supported services), Eagle
House, 108-110 Jermyn Street, London, England
since January 1994, has been a director of
Georgia-Pacific since 1984. Mr. Giordano served
as Chairman and Chief Executive Officer of The
BOC Group plc (manufacture of industrial gases
and other products) from 1985 to 1991 and as
Chairman from January 1994 until January 1996.
Mr. Giordano is also a director of Rio Tinto
plc.
David R. Goode............... Chairman, President and Chief Executive Officer
of Norfolk Southern Corporation (transportation
holding company), Three Commercial Place,
Norfolk, Virginia since September 1992, has
been a director of Georgia-Pacific since 1992.
Mr. Goode is also a director of Norfolk
Southern Corporation, Aeroquip-Vickers, Inc.,
Caterpillar Inc. and Delta Air Lines, Inc.
M. Douglas Ivester........... Chairman of the Board and Chief Executive
Officer of The Coca-Cola Company (manufacture,
marketing and distribution of soft drink syrups
and concentrates, and marketing and
distribution of juice and juice-drink
products), One Coca-Cola Plaza, Atlanta,
Georgia since October 23, 1997, has been a
director of Georgia-Pacific since 1993. Mr.
Ivester served as President and Chief Operating
Officer of The Coca-Cola Company America
Business Sector from September 1991 until
elected to the positions of Executive Vice
President and Principal Operating Officer/North
America effective April 1993.
Mr. Ivester is also a director of The Coca-Cola
Company and SunTrust Banks, Inc.
</TABLE>
A-2
<PAGE>
<TABLE>
<CAPTION>
Present Principal Occupation or Employment;
Name, Citizenship and Material Positions Held During the Past Five Years
Current Business Address and Business Addresses Thereto
------------------------ --------------------------------------------------
<S> <C>
Louis W. Sullivan, M.D. ..... President of Morehouse School of Medicine, 720
Westview Drive S. W., Atlanta, Georgia since
January 1993, has been a director of Georgia-
Pacific since 1993. Dr. Sullivan served as
Secretary of the United States Department of
Health and Human Services from March 1989 until
January 1993.
James B. Williams............ Chairman of the Executive Committee of SunTrust
Banks, Inc. (bank holding company), 25 Park
Place, NE, Suite 251, Atlanta, Georgia since
March 21, 1998, has been a director of Georgia-
Pacific since 1989. Mr. Williams held the
positions of Chairman and Chief Executive
Officer of SunTrust Banks, Inc. from April 1991
and April 1990, respectively, until March 1998.
Mr. Williams is also a director of SunTrust
Banks, Inc., The Coca-Cola Company, Genuine
Parts Company, Rollins, Inc., RPC, Inc., and
Sonat Inc.
Clint M. Kennedy............. Executive Vice President--Pulp and Paperboard
of Parent since January 1, 1997. Prior to that
time, he served as Senior Vice President--Pulp,
Bleached Board and Logistics from February 1995
until December 1996 and Group Vice President--
Pulp and Bleached Board from July 1992 through
January 1995.
John F. McGovern............. Executive Vice President--Finance of Parent
since September 1995, and Chief Financial
Officer since February 1994. He served as
Senior Vice President--Finance from January
1993 until September 1995.
Ronald L. Paul............... Executive Vice President--Wood Products and
Distribution of Parent since December 30, 1997.
Prior to that time, he served as Executive Vice
President--Wood Products from September 1997
until December 1997, Vice President--Structural
Panels and Building Products Engineering from
May 1996 until September 1997 and Vice
President--Engineering and Technology--Building
Products from May 1995 until May 1996. Prior to
joining Parent in 1995, Mr. Paul was Vice
President--Corporate Operations, General
Manager--Southern Division, Louisiana-Pacific
Corporation, 111 S.W. Fifth Avenue, Portland,
Oregon, 97204-3699, (a building products
manufacturing company) from 1994 through 1995
and President of Kirby Forest Industries, Inc.,
Route 2, Box 83 A28, Winnsboro, Texas (a
building products manufacturing company), from
1987 to 1994.
John F. Rasor................ Executive Vice President--Wood Procurement,
Gypsum and Industrial Wood Products of Parent
since December 16, 1997. Prior to that time, he
served as Executive Vice President--Forest
Resources from January 1997 to December 1997,
Senior Vice President--Forest Resources from
February 1995 until December 1996 and Group
Vice President--Forest Resources from May 1992
through January 1995.
</TABLE>
A-3
<PAGE>
<TABLE>
<S> <C>
Lee M. Thomas................ Executive Vice President--Paper and Chemicals
of Parent since December 16, 1997. Prior to
that time, he served as Executive Vice
President--Paper from January 1997 to December
1997, Senior Vice President--Paper from
February 1995 until December 1996, Senior Vice
President--Environmental, Government Affairs
and Communications from February 1994 through
January 1995, and Senior Vice President--
Environmental and Government Affairs from March
1993 through January 1994.
James E. Bostic, Jr.......... Senior Vice President--Environmental,
Government Affairs and Communications of Parent
since February 1995. Prior to that time, he
served as Group Vice President--Communication
Papers from April 1992 through January 1995.
James F. Kelley.............. Senior Vice President--Law and General Counsel
of Parent since December 1993.
Patricia A. Barnard.......... Senior Vice President, Human Resources, of the
Parent since 1999; Vice President, Compensation
and Benefits, 1998; Director of Human
Resources--Paper and Chemicals, 1997; Director
of Human Resources--Paper Division, 1996;
Director of Human Resources--Communications
Papers, 1994; Director of Special Projects,
1994.
</TABLE>
2. Directors and Executive Officers of Purchaser. The following table sets
forth the name, current business address, citizenship and present principal
occupation or employment, and material occupations, positions, offices or
employments and business addresses thereof for the past five years of each
director and executive officer of Purchaser. Unless otherwise indicated, the
current business address of each person is Georgia-Pacific Corporation, 133
Peachtree Street, N.E., Atlanta, GA 30303. Unless otherwise indicated, each
such person is a citizen of the United States of America, and each occupation
set forth opposite an individual's name, refers to employment with Purchaser.
<TABLE>
<CAPTION>
Present Principal Occupation or Employment;
Name, Citizenship and Material Positions Held During the Past Five Years
Current Business Address and Business Addresses Thereto
------------------------ --------------------------------------------------
<S> <C>
Altson D. Correll............ Director and Chairman since 1999. See
description above.
Charles C. Tufano............ Director and President since 1999. Vice
President, Western Region of the Parent since
1998. Prior to that time he served as
Director--Printing Papers, Communication Papers
Division of the Parent from 1995 until 1998. He
served as Director--Packaging of the Parent
from 1993 to 1995.
John F. McGovern............. Director and Vice President and Treasurer since
1999. See description above.
James F. Kelley.............. Director and Vice President and Secretary since
1999. See description above.
Lee M. Thomas................ Director since 1999. See description above.
</TABLE>
A-4
<PAGE>
SCHEDULE II
SECTION 262 OF DELAWARE LAW
262 Appraisal Rights. (a) Any stockholder of a corporation of this State who
holds shares of stock on the date of the making of a demand pursuant to
subsection (d) of this section with respect to such shares, who continuously
holds such shares through the effective date of the merger or consolidation,
who has otherwise complied with subsection (d) of this section and who has
neither voted in favor of the merger or consolidation nor consented thereto in
writing pursuant to (S)228 of this title shall be entitled to an appraisal by
the Court of Chancery of the fair value of such stockholder's shares of stock
under the circumstance described in subsections (b) and (c) of this section. As
used in this section, the word "stockholder" means a holder of record of stock
in a stock corporation and also a member of record of a nonstock corporation;
the words "stock" and "shall" mean and include what is ordinarily meant by
those words and also membership or membership interest of a member of a
nonstock corporation; and the words "depository receipt" mean a receipt or
other instrument issued by a depository representing an interest in one or more
shares, or fractions thereof, solely of stock of a corporation, which stock is
deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or series
of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to (S)251 (other than a merger effected pursuant to (S)251(g)
of this title), (S)252, (S)254, (S)257, (S)258, (S)263 or (S)264 of this title:
(1) Provided, however, that no appraisal rights under this section shall
be available for the shares of any class or series of stock, which stock,
or depository receipts in respect thereof, at the record date fixed to
determine the stockholders entitled to receive notice of and to vote at the
meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no
appraisal rights shall be available for any shares of stock of the
constituent corporation surviving a merger if the merger did not require
for its approval the vote of the stockholders of the surviving corporation
as provided in subsection (f) of (S)251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required
by the terms of an agreement of merger or consolidation pursuant to
(S)(S)1251, 252, 254, 257, 258, 263 and 264 of this title to accept for
such stock anything except:
a.Shares of stock of the corporation surviving or resulting from such
merger or consolidation;
b. Shares of stock of any other corporation, or depository receipts in
respect thereof, which shares of stock (or depository receipts in
respect thereof) or depository receipts at the effective date of the
merger or consolidation will be either listed on a national
securities exchange or designated as a national market system
security on an interdealer quotation system by the National
Association of Securities Dealers, Inc. or held of record by more
than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a. and b. of this
paragraph; or
d. Any combination of the shares of stock, depository receipts and cash
in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this
paragraph.
(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under (S)253 of this title is not owned by the
parent corporation immediately prior to the merger, appraisal rights shall
be available for the shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all
<PAGE>
or substantially all of the assets of the corporation. If the certificate of
incorporation contains such a provision, the procedures of this section,
including those set forth in subsections (d) and (e) of this section, shall
apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights are
provided under this section is to be submitted for approval at a meeting of
stockholders, the corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record date for
such meeting with respect to shares for which appraisal rights are
available pursuant to subsections (b) or (c) hereof that appraisal rights
are available for any or all of the shares of the constituent corporations,
and shall include in such notice a copy of this section. Each stockholder
electing to demand the appraisal of such stockholder's shares shall deliver
to the corporation, before the taking of the vote on the merger or
consolidation, a written demand for appraisal of such stockholder's shares.
Such demand will be sufficient if it reasonably informs the corporation of
the identity of the stockholder and that the stockholder intends thereby to
demand the appraisal of such stockholder's shares. A proxy or vote against
the merger or consolidation shall not constitute such a demand. A
stockholder electing to take such action must do so by a separate written
demand as herein provided. Within 10 days after the effective date of such
merger or consolidation, the surviving or resulting corporation shall
notify each stockholder of each constituent corporation who has complied
with this subsection and has not voted in favor of or consented to the
merger or consolidation of the date that the merger or consolidation has
become effective; or
(2) If the merger or consolidation was approved pursuant to (S)228 or 253
of this title, each constituent corporation, either before the effective
date of the merger or consolidation or within ten days thereafter, shall
notify each of the holders of any class or series of stock of such
constituent corporation who are entitled to appraisal rights of the
approval of the merger or consolidation and that appraisal rights are
available for any or all of the shares of such constituent corporation, and
shall include in such notice a copy of this section; provided that, if the
notice is given on or after the effective date of the merger or
consolidation, such notice shall be given by the surviving or resulting
corporation to all such holders of any class or series of stock of a
constituent corporation that are entitled to appraisal rights. Such notice
may, and, if given on or after the effective date of the merger or
consolidation, shall, also notify such stockholders of the effective date
of the merger or consolidation. Any stockholder entitled to appraisal
rights may, within 20 days after the date of mailing of such notice, demand
in writing from the surviving or resulting corporation the appraisal of
such holder's shares. Such demand will be sufficient if it reasonably
informs the corporation of the identity of the stockholder and that the
stockholder intends thereby to demand the appraisal of such holder's
shares. If such notice did not notify stockholders of the effective date of
the merger or consolidation, either (i) each such constituent corporation
shall send a second notice before the effective date of the merger or
consolidation notifying each of the holders of any class or series of stock
of such constituent corporation that are entitled to appraisal rights of
the effective date of the merger or consolidation or (ii) the surviving or
resulting corporation shall send such a second notice to all such holders
on or with 10 days after such effective date; provided, however, that if
such second notice is sent more than 20 days following the sending of the
first notice, such second notice need only be sent to each stockholder who
is entitled to appraisal rights and who has demanded appraisal of such
holder's shares in accordance with this subsection. An affidavit of the
secretary or assistant secretary or of the transfer agent of the
corporation that is required to give either notice that such notice has
been given shall, in the absence of fraud, be prima facie evidence of the
facts stated therein. For purposes of determining the stockholders entitled
to receive either notice, each constituent corporation may fix, in advance,
a record date that shall be not more than 10 days prior to the date the
notice is given, provided, that if the notice is given on or after the
effective date of the merger or consolidation, the record date shall be
such effective date. If no record date is fixed and the notice is given
prior to the effective date, the record date shall be the close of business
on the day next preceding the day on which the notice is given.
2
<PAGE>
(e) Within 120 days after the effective date of the merger or consolidation,
the surviving or resulting corporation or any stockholder who has complied
with subsections (a) and (d) hereof and who is otherwise entitled to appraisal
rights, may file a petition in the Court of Chancery demanding a determination
of the value of the stock of all such stockholders. Notwithstanding the
foregoing, at any time within 60 days after the effective date of the merger
or consolidation, any stockholder shall have the right to withdraw such
stockholder's demand for appraisal and to accept the terms offered upon the
merger or consolidation. Within 120 days after the effective date of the
merger or consolidation, any stockholder who has complied with the
requirements of subsections (a) and (d) hereof, upon written request, shall be
entitled to receive from the corporation surviving the merger or resulting
from the consolidation a statement setting forth the aggregate number of
shares not voted in favor of the merger or consolidation and with respect to
which demands for appraisal have been received and the aggregate number of
holders of such shares. Such written statement shall be mailed to the
stockholder within 10 days after such stockholder's written request for such a
statement is received by the surviving or resulting corporation or within 10
days after expiration of the period for delivery of demands for appraisal
under subsection (d) hereof, whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of a copy
thereof shall be made upon the surviving or resulting corporation, which shall
within 20 days after such service file in the office of the Register in
Chancery in which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded payment for their
shares and with whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the petition shall be
filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in Chancery, if so
ordered by the Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the surviving or
resulting corporation and to the stockholders shown on the list at the
addresses therein stated. Such notice shall also be given by 1 or more
publications at least 1 week before the day of the hearing, in a newspaper of
general circulation published in the City of Wilmington, Delaware or such
publication as the Court deems advisable. The forms of the notices by mail and
by publication shall be approved by the Court, and the costs thereof shall be
borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled
to appraisal rights. The Court may require the stockholders who have demanded
an appraisal for their shares and who hold stock represented by certificates
to submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as
to such stockholder.
(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any
element of value arising from the accomplishment or expectation of the merger
or consolidation, together with a fair rate of interest, if any, to be paid
upon the amount determined to be the fair value. In determining such fair
value, the Court shall take into account all relevant factors. In determining
the fair rate of interest, the Court may consider all relevant factors,
including the rate of interest which the surviving or resulting corporation
would have had to pay to borrow money during the pendency of the proceeding.
Upon application by the surviving or resulting corporation or by any
stockholder entitled to participate in the appraisal proceeding, the Court
may, in its discretion, permit discovery or other pretrial proceedings and may
proceed to trial upon the appraisal prior to the final determination of the
stockholder entitled to an appraisal. Any stockholder whose name appears on
the list filed by the surviving or resulting corporation pursuant to
subsection (f) of this section and who has submitted such stockholder's
certificates of stock to the Register in Chancery, if such is required, may
participate fully in all proceedings until it is finally determined that such
stockholder is not entitled to appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to
the stockholders entitled thereto. Interest may be simple or compound, as the
Court may direct. Payment shall be so made to each such stockholder, in the
case of holders of uncertificated stock forthwith, and the case of holders of
shares represented by certificates upon the surrender to the corporation
3
<PAGE>
of the certificates representing such stock. The Court's decree may be
enforced as other decrees in the Court of Chancery may be enforced, whether
such surviving or resulting corporation be a corporation of this State or of
any state.
(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded appraisal rights as provided in subsection (d) of
this section shall be entitled to vote such stock for any purpose or to
receive payment of dividends or other distribution on the stock (except
dividends or other distributions payable to stockholders of record at a date
which is prior to the effective date of the merger or consolidation);
provided, however, that if no petition for an appraisal shall be filed within
the time provided in subsection (e) of this section, or if such stockholder
shall deliver to the surviving or resulting corporation a written withdrawal
of such stockholder's demand for an appraisal and an acceptance of the merger
or consolidation, either within 60 days after the effective date of the merger
or consolidation as provided in subsection (e) of this section or thereafter
with the written approval of the corporation, then the right of such
stockholder to an appraisal shall cease. Notwithstanding the foregoing, no
appraisal proceeding in the Court of Chancery shall be dismissed as to any
stockholder without the approval of the Court, and such approval may be
conditioned upon such terms as the Court deems just.
(l) The shares of the surviving or resulting corporation to which the shares
of such objecting stockholders would have been converted had they assented to
the merger or consolidation shall have the status of authorized and unissued
shares of the surviving or resulting corporation.
4
<PAGE>
Facsimiles of the Letter of Transmittal will be accepted. The Letter of
Transmittal and certificates evidencing Shares and any other required
documents should be sent or delivered by each stockholder or his broker,
dealer, commercial bank, trust company or other nominee to the Depositary at
one of its addresses set forth below.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<CAPTION>
By Mail: By Overnight Courier: By Hand:
<S> <C> <C>
First Chicago Trust First Chicago Trust Company First Chicago Trust Company
Company of New York of New York
of New York Tenders & Exchanges Tenders & Exchanges
Tenders & Exchanges 14 Wall Street c/o Securities Transfer and
Suite 4660 8th Floor, Suite 4680 Reporting Services Inc.
P.O. Box 2565 New York, NY 10005 100 William Street, Galleria
Jersey City, NJ 07303- New York, NY 10038
2565
</TABLE>
OTHER INFORMATION:
Questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone
numbers listed below. Additional copies of this Offer to Purchase, the Letter
of Transmittal and the Notice of Guaranteed Delivery may be obtained from the
Information Agent. A stockholder may also contact brokers, dealers, commercial
banks or trust companies for assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. King & Co., Inc.
77 Water Street
New York, NY 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll Free: (800) 488-8095
The Dealer Manager for the Offer is:
Wasserstein Perella & Co., Inc.
31 West 52nd Street
New York, NY 10019
Call Collect: (212) 969-2700
<PAGE>
EXHIBIT (a)(2)
Letter of Transmittal
To Tender Shares of Common Stock
of
Unisource Worldwide, Inc.
Pursuant to the Offer to Purchase Dated May 28, 1999
of
Atlanta Acquisition Corp.,
a wholly owned subsidiary
of
Georgia-Pacific Corporation
- ------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, JUNE 25, 1999, UNLESS THE OFFER IS EXTENDED.
- ------------------------------------------------------------------------------
The Depositary for the Offer is:
First Chicago Trust Company
of New York
By Facsimile Transmission (for Eligible Institutions only):
(201) 222-4720 or (201) 222-4721
Confirm by Telephone: (201) 222-4707
By Overnight Courier: By Mail: By Hand:
First Chicago Trust First Chicago Trust Company First Chicago Trust
Company of New York Company
of New York Tenders & Exchanges of New York
Tenders & Exchanges Suite 4660 Tenders & Exchanges
Suite 4680 P.O. Box 2569 c/o Securities
14 Wall Street, 8th Jersey City, NJ 07303-2569 Transfer and
Floor Reporting Services,
New York, NY 10005 Inc.
100 William Street,
Galleria
New York, NY 10038
DESCRIPTION OF COMMON STOCK SHARES TENDERED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Name(s) and
Address(es) of
Registered
Holder(s)
(Please Fill
in, if Blank,
Exactly as
Name(s)
Appear(s)
on Share Share Certificate(s) and Share(s) Tendered
Certificate(s)) (Attach Additional List, if Necessary)
- ------------------------------------------------------------------
Total Number of
Shares Evidenced Number
Share Certificate by Share of Shares
Number(s)* Certificate(s)* Tendered**
<S> <C> <C> <C>
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
Total Shares
- ------------------------------------------------------------------
</TABLE>
* Need not be completed by stockholders delivering Shares by book-entry
transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced
by each Share Certificate delivered to the Depositary are being tendered
hereby. See Instruction 4.
<PAGE>
This Letter of Transmittal is to be completed by stockholders of Unisource
Worldwide, Inc. either if certificates evidencing Shares (as defined below)
are to be forwarded herewith or if delivery of Shares is to be made by book-
entry transfer to an account maintained by the Depositary at the Book-Entry
Transfer Facility (as defined in and pursuant to the procedures set forth in
Section 3 of the Offer to Purchase). Delivery of documents to the Book-Entry
Transfer Facility does not constitute delivery to the Depositary.
A stockholder who desires to tender shares and whose certificates evidencing
such Shares ("Share Certificates") are not immediately available, or who
cannot deliver his Share Certificates and all other documents required hereby
to the Depositary prior to the Expiration Date (as defined in the Offer to
Purchase) or who cannot comply with the procedure for delivery by book-entry
transfer on a timely basis, may tender such shares by following the procedure
for guaranteed delivery set forth in Section 3 of the Offer to Purchase. See
Instruction 2.
[_]CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s) ____________________________________________
Window Ticket No. (if any) _________________________________________________
Date of Execution of Notice of Guaranteed Delivery _________________________
Name of Institution which Guaranteed Delivery ______________________________
If delivery is by book-entry transfer, give the following:
Account Number _____________________________________________________________
Transaction Code Number ____________________________________________________
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE,
WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
2
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Atlanta Acquisition Corp., a Delaware
corporation ("Purchaser") and a wholly owned subsidiary of Georgia-Pacific
Corporation, a Georgia corporation, the above-described shares of Common
Stock, par value $ .001 per share, of Unisource Worldwide, Inc., a Delaware
corporation (the "Company") (all shares of such Common Stock from time to time
outstanding being, collectively, the "Shares") pursuant to Purchaser's offer
to purchase all of the outstanding Shares, at $12.00 per Share, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated May 28, 1999 (the "Offer
to Purchase"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which, together with any amendments or supplements hereto,
collectively constitute the "Offer"). The undersigned understands that
Purchaser reserves the right to transfer or assign, in whole or from time to
time in part, to one or more of its affiliates, the right to purchase all or
any portion of the Shares tendered pursuant to the Offer, but any such
transfer or assignment will not relieve Purchaser of its obligation 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.
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 or rights, issued or
issuable in respect thereof on or after May 25, 1999 (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 Share Certificates evidencing such Shares (and any
and all Distributions), or transfer ownership of such Shares (and any and all
Distributions) on the account books maintained by the Book-Entry Transfer
Facility, 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 A.D. Correll, James F. Kelley and Kenneth F. Khoury, and each of
them, the attorneys-in-fact and proxies of the undersigned, each with full
power of substitution, to vote in such manner as each such attorney-in-fact
and proxy or his substitute shall, in his sole discretion, deem proper and
otherwise act (by written consent or otherwise) with respect to all the Shares
tendered hereby which have been accepted for payment by Purchaser prior to the
time of such vote or other action and all Shares and other securities issued
in Distributions in respect of such Shares, which the undersigned is entitled
to vote at any meeting of stockholders of the Company (whether annual or
special and whether or not an adjourned or postponed meeting) or consent in
lieu of any such meeting or otherwise. This proxy and power of attorney is
coupled with an interest in the Shares tendered hereby, is irrevocable and is
granted in consideration of, and is effective upon, the acceptance for payment
of such Shares by Purchaser in accordance with other terms of the Offer. Such
acceptance for payment shall revoke all other proxies and powers of attorney
granted by the undersigned at any time with respect to such Shares (and any
and all Distributions), and no subsequent proxies, powers of attorney,
consents or revocations may be given by the undersigned with respect thereto
(and, if given, will not be deemed effective). The undersigned understands
that, in order for Shares or Distributions to be deemed validly tendered
immediately upon Purchaser's acceptance of such Shares for payment, Purchaser
must be able to exercise full voting, consent and other rights with respect to
such Shares (and any and all Distributions), including, without limitation,
voting at any meeting of the Company's stockholders then scheduled.
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 when such Shares are accepted for payment
by Purchaser, Purchaser will acquire good, marketable and unencumbered title
thereto and to all Distributions, free and clear of all liens, restriction,
charges and encumbrances, and that none of such Shares or Distributions will
be subject to any adverse claim. The undersigned, upon request, shall execute
and deliver all additional documents deemed by the Depositary or Purchaser to
be necessary or desirable to complete the sale, assignment and transfer of the
Shares tendered hereby and all Distributions. In addition, the undersigned
shall remit and transfer promptly to the Depositary for the account of
Purchaser all Distributions in respect of the Shares tendered hereby,
accompanied by appropriate documentation of transfer, and pending such
remittance and transfer or appropriate assurance thereof, Purchaser shall be
entitled to all rights and privileges as owner of each such Distribution and
may withhold the entire purchase price of the Shares tendered hereby, or
deduct from such purchase price, the amount or value of such Distribution as
determined by Purchaser in its sole discretion.
3
<PAGE>
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 to Purchase, 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 the undersigned's acceptance of the
terms and conditions of the Offer. Purchaser's acceptance of such Shares for
payment will constitute a binding agreement between the undersigned and
Purchaser upon the terms and subject to the conditions of the Offer (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 Offer, 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 herein in the box entitled "Special Payment
Instructions", please issue the check for the purchase price of all Shares
purchased and return all Share Certificates evidencing Shares not 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 in the box entitled "Special Delivery Instructions", please mail the
check for the purchase price of all Shares purchased and return all Share
Certificates evidencing Shares not tendered or not accepted for payment (and
accompanying documents, as appropriate) to the address(es) of the registered
holder(s) appearing above under "Description of Shares Tendered". In the event
that the boxes entitled "Special Payment Instructions" and "Special Delivery
Instructions" are both completed, please issue the check for the purchase
price of all Shares purchased and return all Share Certificates evidencing
Shares not tendered or not accepted for payment (and any accompanying
documents, as appropriate) in the name(s) of, and deliver such check and
return all such Share 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 hereby and delivered 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(s) thereof if Purchaser does not accept for
payment any of the Shares so tendered.
4
<PAGE>
- ----------------------------------- ---------------------------------
SPECIAL PAYMENT INSTRUCTIONS (See SPECIAL DELIVERY INSTRUCTIONS
Instructions 1, 5, 6 and 7) (See Instructions 1, 5, 6 and 7)
To be completed ONLY if the To be completed ONLY if the
check for the purchase price of check for the purchase price of
Shares and Share Certificates ev- Shares purchased and Share Cer-
idencing Shares not tendered or tificates evidencing Shares not
not purchased are to be issued in tendered or not purchased are to
the name of someone other than be mailed to someone other than
the undersigned. the undersigned, or the under-
signed at an address other than
Issue Check and Share Certifi- that shown under "Description of
cate(s) to: Shares Tendered".
Name: ____________________________ Mail Check and Share Certifi-
(Please Print) cate(s) to:
___________________________________ Name: ____________________________
(Please Print)
Address: _________________________ ___________________________________
___________________________________ Address: _________________________
___________________________________ ___________________________________
(Zip Code)
___________________________________ ___________________________________
(Tax Identification or Social (Zip Code)
Security Number) (See Substitute
___________________________________
(Tax Identification or Social
Security Number) (See Substitute
Form W-9 on reverse side)
Account Number: __________________
- ----------------------------------- -----------------------------------
5
<PAGE>
- -------------------------------------------------------------------------------
IMPORTANT STOCKHOLDERS: SIGN HERE
(Please Complete Substitute Form W-9 on Reverse)
..........................................................................
..........................................................................
Signature(s) of Holder(s)
Dated: ................., 199 . . .
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
Share Certificates or on a security position listing by a person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or
other person acting in a fiduciary or representative capacity, please
provide the following information and see Instruction 5).
Name(s):..................................................................
..................................................................
Please Print
Capacity (full title):....................................................
Address:..................................................................
..................................................................
Include Zip Code
Daytime Area Code and Telephone No.: .....................................
Taxpayer Identification or
Social Security No.: .....................................................
(Also Complete Substitute Form W-9 on reverse side)
GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY.
FINANCIAL INSTITUTIONS: PLACE MEDALLION
GUARANTEE IN SPACE BELOW
-------------------------------------------------------------------------------
6
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. All signatures on this Letter of Transmittal
must be guaranteed by a firm which is a member of the Security Transfer Agent
Medallion Signature Program (an "Eligible Institution") unless (i) this Letter
of Transmittal is signed by the registered holder(s) of the Shares (which
term, for purposes of this document, shall include any participant in the
Book-Entry Transfer Facility whose name appears on a security position listing
as the owner of Shares) tendered hereby and such holder(s) has (have)
completed the box entitled "Special Payment Instructions" on the reverse
hereof or (ii) such Shares are tendered for the account of an Eligible
Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Share Certificates. This Letter of
Transmittal is to be used either if Share Certificates are to be forwarded
herewith or if tenders are to be made pursuant to the procedures for tenders
by book-entry transfer pursuant to the procedure set forth in Section 3 of the
Offer to Purchase. Share Certificates evidencing all physically tendered
Shares, or a confirmation of a book-entry transfer into the Depositary's
account at the Book-Entry Transfer Facility of all Shares delivered by book-
entry transfer as well as a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) and any other documents required by this
Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth on the reverse hereof prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase). If Share Certificates are
forwarded to the Depositary in multiple deliveries, a properly completed and
duly executed Letter of Transmittal must accompany each such delivery.
Stockholders whose Share Certificates are not immediately available, who
cannot deliver their Share Certificates and all other required documents to
the Depositary prior to the Expiration Date or who cannot complete the
procedure for delivery by book-entry transfer on a timely basis may tender
their Shares pursuant to the guaranteed delivery procedure described in
Section 3 of the Offer to Purchase. Pursuant to such procedure: (i) such
tender must be made by or through an Eligible Institution; (ii) a properly
completed and duly executed Notice of Guaranteed Delivery, substantially in
the form made available by Purchaser, must be received by the Depositary prior
to the Expiration Date; and (iii) the Share Certificates evidencing all
physically delivered Shares in proper form for transfer by delivery, or a
confirmation of a book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility of all Shares delivered by book-entry transfer,
in each case together with a Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees
(or in the case of a book-entry transfer, an Agent's Message (as defined in
Section 3 of the Offer to Purchase and any other documents required by this
Letter of Transmittal, must be received by the Depositary within three New
York Stock Exchange, Inc. ("NYSE") trading days after the date of execution of
such Notice of Guaranteed Delivery, all as described in Section 3 of the Offer
to Purchase.
The method of delivery of this Letter of Transmittal, Share Certificates and
all other required documents, including delivery through the Book-Entry
Transfer Facility, is at the option and risk of the tendering stockholder, and
the delivery will be deemed made only when actually received by the
Depositary. If delivery is by mail, registered mail with return receipt
requested, properly insured, is recommended. In all cases, sufficient time
should be allowed to ensure timely delivery.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. By execution of this Letter of
Transmittal (or a facsimile hereof), all tendering stockholders waive any
right to receive any notice of the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided herein under "Description of
Shares Tendered" is inadequate, the Share Certificate numbers, the number of
Shares evidenced by such Share Certificates and the number of Shares tendered
should be listed on a separate signed schedule and 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 such cases, new Share Certificate(s) evidencing the remainder of
the Shares that were evidenced by the Share Certificates delivered to the
Depositary herewith will be sent to the person(s) signing this Letter of
Transmittal, unless otherwise provided in the box entitled "Special Delivery
Instructions" on the reverse hereof, as soon as practicable after the
Expiration Date or the termination of the Offer. All Shares evidenced by Share
Certificates delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.
7
<PAGE>
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written
on the face of the Share Certificates evidencing such Shares without
alteration, enlargement or any other change whatsoever.
If any Share tendered hereby is held of record by two or more persons, all
such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names, it
will be necessary to complete, sign and submit as many separate Letters of
Transmittal as there are different registrations of such Shares.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Share Certificates or separate
stock powers are required, unless payment is to be made to, or Share
Certificates evidencing Shares not tendered or not accepted for payment are to
be issued in the name of, a person other than the registered holder(s). If the
Letter of Transmittal is signed by a person other than the registered
holder(s) of the Share Certificate(s) evidencing the Shares tendered, the
Share Certificate(s) tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such Share Certificate(s). Signatures on
such Share Certificate(s) and stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Share Certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such Share Certificate(s). Signatures on
such Share Certificate(s) and stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to Purchaser of such person's authority so to act
must be submitted.
6. Stock Transfer Taxes. Except as otherwise provided in this Instruction 6,
Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or
Share Certificate(s) evidencing Shares not tendered or not accepted for
payment are to be issued 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 the Letter of Transmittal, the amount of any
stock transfer taxes (whether imposed on the registered holder(s), or such
other person, or otherwise) payable on account of the transfer to such other
person will be deducted from the purchase price of such Shares purchased,
unless evidence satisfactory to Purchaser of the payment of such taxes, or
exemption therefrom, is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Share Certificates evidencing the
Shares tendered hereby.
7. Special Payment and Delivery Instructions. If a check for the purchase
price of any Shares tendered hereby is to be issued in the name of, and/or
Share Certificate(s) evidencing Shares not tendered or not accepted for
payment are to be issued in the name of and/or returned to, a person other
than the person(s) signing this Letter of Transmittal or if such check or any
such Share Certificate is to be sent to a person other than the signor of this
Letter of Transmittal or to the person(s) signing this Letter of Transmittal
but at an address other than that shown in the box entitled "Description of
Shares Tendered" on the reverse hereof, the appropriate boxes on the reverse
of this Letter of Transmittal must be completed.
8. Questions and Requests for Assistance or Additional Copies. Questions and
requests for assistance may be directed to the Information Agent or the Dealer
Manager at their respective addresses or telephone numbers set forth below.
Additional copies of 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 obtained from the
Information Agent.
9. Substitute Form W-9. Each tendering stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below,
8
<PAGE>
and to certify, under penalty of perjury, that such number is correct and that
such stockholder is not subject to backup withholding of federal income tax.
If a tendering stockholder has been notified by the Internal Revenue Service
that such stockholder is subject to backup withholding, such stockholder must
cross out item (2) of the Certification box of the Substitute Form W-9, unless
such stockholder has since been notified by the Internal Revenue Service that
such stockholder is no longer subject to backup withholding. Failure to
provide the information on the Substitute Form W-9 may subject the tendering
stockholder to 31% federal income tax withholding on the payment of the
purchase price of all Shares purchased from such stockholder. If the tendering
stockholder has not been issued a TIN and has applied for one or intends to
apply for one in the near future, such stockholder should write "Applied For"
in the space provided for the TIN in Part I of the Substitute Form W-9, and
sign and date the Substitute Form W-9. If "Applied For" is written in Part 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 to such stockholder
until a TIN is provided to the Depositary.
Important: This Letter of Transmittal (or facsimile hereof), properly
completed and duly executed (together with any required signature guarantees
(or, in the case of a book-entry transfer, an Agent's Message) and Share
Certificates or confirmation of book-entry transfer and all other required
documents) or a properly completed and duly executed Notice of Guaranteed
Delivery must be received by the Depositary prior to the Expiration Date (as
defined in the Offer to Purchase).
IMPORTANT TAX INFORMATION
Under the federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required by law to provide the Depositary (as payer)
with such stockholder's correct TIN on Substitute Form W-9 below. If such
stockholder is an individual, the TIN is such stockholder's social security
number. If the Depositary is not provided with the correct TIN, the
stockholder may be subject to a $50 penalty imposed by the Internal Revenue
Service and payments that are made to such stockholder with respect to Shares
purchased pursuant to the Offer may be subject to backup withholding of 31%.
In addition, if a stockholder makes a false statement that results in no
imposition of backup withholding, and there was no reasonable basis for making
such statement, a $500 penalty may also be imposed by the Internal Revenue
Service.
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, such individual must submit a statement (Internal Revenue Service
Form W-8), signed under penalties of perjury, attesting to such individual's
exempt status. Forms of such statements can be obtained from the Depositary.
See the enclosed Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 for additional instructions. A stockholder
should consult his or her tax advisor as to such stockholder's qualification
for exemption from backup withholding and the procedure for obtaining such
exemption.
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 TIN by
completing the form below certifying that (a) the TIN provided on Substitute
Form W-9 is correct (or that such stockholder is awaiting a TIN), and (b)(i)
such stockholder has not been notified by the Internal Revenue Service that he
is subject to backup withholding as a result of a failure to report all
interest or dividends or (ii) the Internal Revenue Service has notified such
stockholder that such stockholder is no longer subject to backup withholding.
What Number to Give the Depositary
The stockholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If the Shares are in more than one name or are not in the
name of the actual owner, consult the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional guidance
on which number to report. If the tendering stockholder has not been issued a
TIN and has applied for a number or intends to apply for a number in the near
future, the stockholder should write "Applied For" in the space provided for
the TIN in Part I, and sign and dated the Substitute Form W-9. If "Applied
For" is written in Part I and the Depositary is not provided with a TIN within
60 days, the Depositary will withhold 31% of all payments of the purchase
price to such stockholder until a TIN is provided to the Depositary.
9
<PAGE>
PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
- --------------------------------------------------------------------------------
Part 1--Taxpayer --------------------
SUBSTITUTE Identification Number--For Social security number
all accounts, enter your
taxpayer identification
number in the box at right.
(For most individuals, this
is your social security
number. If you do not have
a number, see Obtaining a
Number in the enclosed
Guidelines.) Certify by
signing and dating below.
Note: If the account is in
more than one name, see the
chart in the enclosed
Guidelines to determine
which number to give the
payer.
or
Form W-9 --------------------
Department of Employer identification
the Treasury number
Internal
Revenue
Service
(If awaiting TIN write
"Applied For")
Payer's Request for Taxpayer Identification Number (TIN)
--------------------------------------------------------
Part II--For Payees Exempt from Backup Withholding,
see the enclosed Guidelines and complete as in-
structed therein.
- --------------------------------------------------------------------------------
Certification --Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification
Number (or I am waiting for a number to be issued to me), and
(2) I am not subject to backup withholding either because I have not been
notified by the Internal Revenue Service (the "IRS") that I am subject
to backup withholding as a result of failure to report all interest or
dividends, or the IRS has notified me that I am no longer subject to
backup withholding.
Certificate Instructions--You must cross out item (2) above if you have
been notified by the IRS that you are subject to backup withholding because
of underreporting interest or dividends on your tax return. However, if
after being notified by the IRS that you were subject to backup withholding
you received another notification from the IRS that you are no longer
subject to backup withholding, do not cross out item (2). (Also see
instructions in the enclosed Guidelines.)
- --------------------------------------------------------------------------------
SIGNATURE ____________________ DATE __ , 199
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THIS
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR
ADDITIONAL DETAILS.
10
<PAGE>
Facsimiles of the Letter of Transmittal, properly completed and duly signed,
will be accepted. The Letter of Transmittal and certificates evidencing Shares
and any other required documents should be sent or delivered by each
stockholder or such stockholder's broker, dealer, commercial bank, trust
company or other nominee to the Depositary at one of its addresses or to the
facsimile number set forth below.
The Depositary for the Offer is:
First Chicago Trust Company of New York
By Facsimile Transmission (for Eligible Institutions only):
(201) 222-4720 or (201) 222-4721
Confirm by Telephone: (201) 222-4707
By Overnight Courier: By Mail: By Hand:
First Chicago Trust First Chicago Trust First Chicago Trust
Company Company Company
of New York of New York of New York
Tenders & Exchanges Tenders & Exchanges Tenders & Exchanges
Suite 4680 Suite 4660 c/o Securities Transfer
14 Wall Street, 8th P.O. Box 2569 and
Floor Jersey City, NJ 07303- Reporting Services Inc.
New York, NY 10005 2569 100 William Street,
Galleria
New York, NY 10038
---------------
Questions or requests for assistance may be directed to the Information Agent
at its respective address and telephone
numbers listed below. Additional copies of this Offer to Purchase, the Letter
of Transmittal and the Notice of
Guaranteed Delivery may be obtained from the Information Agent. A stockholder
may also contact brokers,
dealers, commercial banks or trust companies for assistance concerning the
Offer.
The Information Agent for the Offer is:
D.F. King & Co., Inc.
77 Water Street
New York, NY 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll Free: (800) 488-8095
The Dealer Manager for the Offer is:
Wasserstein Perella & Co., Inc.
31 West 52nd Street
New York, NY 10019
Call Collect: (212) 969-2700
11
<PAGE>
EXHIBIT (a)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
UNISOURCE WORLDWIDE, INC.
(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) (i) if
certificates ("Share Certificates") evidencing shares of Common Stock, par
value $.001 per share (the "Shares"), of Unisource Worldwide, Inc., (the
"Company"), a Delaware corporation are not immediately available, (ii) if
Share Certificates and all other required documents cannot be delivered to
First Chicago Trust Company of New York, as Depositary (the "Depositary"),
prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase
(as defined below)) or (iii) if the procedure for delivery by book-entry
transfer cannot be completed on a timely basis. This Notice of Guaranteed
Delivery may be delivered by hand or mail or transmitted by telegram, or
facsimile transmission to the Depositary. See Section 3 of the Offer to
Purchase.
The Depositary for the Offer is:
First Chicago Trust Company
of New York
By Facsimile Transmission (for Eligible Institutions only):
(201) 222-4720 or (201) 222-4721
Confirm by Telephone: (201) 222-4707
By Overnight Courier: By Mail: By Hand:
First Chicago Trust First Chicago Trust First Chicago Trust
Company Company Company
of New York of New York of New York
Tenders & Exchanges Tenders & Exchanges Tenders & Exchanges
Suite 4680 Suite 4660 c/o Securities Transfer
14 Wall Street, 8th P.O. Box 2569 and
Floor Jersey City, NJ 07303- Reporting Services, Inc.
New York, NY 10005 2569 100 William Street,
Galleria
New York, NY 10038
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 Atlanta Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of Georgia-Pacific Corporation, a
Georgia corporation, upon the terms and subject to the conditions set forth in
the Purchaser's Offer to Purchase, dated May 28, 1999 (the "Offer to
Purchase"), and the related Letter of Transmittal (which, together with any
amendments or supplements thereto, collectively constitute the "Offer"),
receipt of each of which is hereby acknowledged, the number of Shares
specified below pursuant to the guaranteed delivery procedure set forth in
Section 3 of the Offer to Purchase.
- ----------------------------------- ----------------------------------
__________________________________
Number of Shares: ________________ __________________________________
Signature(s) of Holder(s)
Certificate Nos. (If Available):
Dated: , 199
__________________________________
Name(s) of Holders:
[_] Check this box if Shares will
be delivered by book-entry __________________________________
transfer: __________________________________
Please Type or Print
Book-Entry Transfer Facility __________________________________
Address
__________________________________
Account No. ______________________ Zip Code
__________________________________
Daytime Area Code and Telephone
No.
- ----------------------------------- ----------------------------------
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a participant in the Security Transfer Agents Medallion
Program or an "eligible guarantor institution," as such term is defined in
Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, 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 account at The Depositary 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 (as defined in the Offer to Purchase), and
any other documents required by the Letter of Transmittal, within three New
York Stock Exchange 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 Title
- ---------------------------------- ----------------------------------
Authorized Signature Address Zip Code
Name: ----------------------------------
---------------------------- Area Code and Telephone No.
Please Type or Print
DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE.
SHARE CERTIFICATES SHOULD BE SENT WITH YOUR
LETTER OF TRANSMITTAL.
Dated: , 199
<PAGE>
EXHIBIT (a)(4)
Wasserstein Perella & Co., Inc.
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Unisource Worldwide, Inc.
at
$12.00 Net Per Share in Cash
by
Atlanta Acquisition Corp.
a wholly owned subsidiary
of
Georgia-Pacific Corporation
- ----------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, JUNE 25, 1999, UNLESS THE OFFER IS EXTENDED.
- ----------------------------------------------------------------------
May 28, 1999
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Atlanta Acquisition Corp., a Delaware corporation
("Purchaser") and a wholly owned subsidiary of Georgia-Pacific Corporation, a
Georgia Corporation ("Parent"), to act as Dealer Manager in connection with
Purchaser's offer to purchase all outstanding shares of common stock, par
value $.001 per share (the "Shares"), of Unisource Worldwide, Inc., a Delaware
corporation (the "Company"), at a price of $12.00 per Share, net to the seller
in cash, without interest thereon, upon the terms and subject to the
conditions set forth in Purchaser's Offer to Purchase, dated May 28, 1999 (the
"Offer to Purchase"), and the related Letter of Transmittal (which, together
with any amendments or supplements thereto, collectively 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.
Holders of Shares whose certificates evidencing Shares are not immediately
available or who cannot deliver confirmation of the book-entry transfer of
their Shares into the Depositary's account at the Book-Entry Transfer Facility
(as defined in the Offer to Purchase) and all other documents required hereby
to the Depositary on or prior to the Expiration Date (as defined in Section 1
of the Offer to Purchase) must tender their Shares according to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase. See
Instruction 2 of the Letter of Transmittal. Delivery of documents to a Book-
Entry Transfer Facility does not constitute delivery to the Depositary.
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn prior to the expiration of the Offer a number of
Shares which, together with any Shares owned by Parent or Purchaser,
constitutes at least a majority of the Shares outstanding on a fully diluted
basis; and (ii) any applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, having expired or been
terminated.
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 May 28, 1999;
<PAGE>
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 the
Shares and all other required documents are not immediately available or
cannot be delivered to First Chicago Trust Company of New York (the
"Depositary") prior to the Expiration Date (as defined in the Offer to
Purchase) or if the procedure for book-entry transfer cannot be completed
prior to the Expiration Date;
4. A letter to stockholders of the Company from Ray B. Mundt, Chairman
and Chief Executive Officer of the Company, together with a
Solicitation/Recommendation Statement on Schedule 14D-9 filed with the
Securities and Exchange Commission by the Company;
5. A letter which may be sent to your clients for whose accounts you hold
Shares registered in your name or in the name of your nominee, with space
provided for obtaining such clients' instructions with regard to the Offer;
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. Return envelope addressed to the Depositary.
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 FRIDAY JUNE 25, 1999, UNLESS THE OFFER IS EXTENDED.
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
evidencing such Shares (or a confirmation of a book-entry transfer of such
Shares into the Depositary's account at the Book-Entry Transfer Facility (as
defined in the Offer to Purchase)), (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 in the Offer to Purchase) and (iii) any other required documents.
If holders of Shares wish to tender, but it is impracticable for them to
forward their certificates or other required documents prior to the expiration
of the Offer, a tender may be effected by following the guaranteed delivery
procedure described in Section 3 of the Offer to Purchase.
Purchaser will not pay any fees or commissions to any broker, dealer or
other person (other than the Dealer Manager, the Depositary and the
Information Agent as described in the Offer to Purchase) in connection with
the solicitation of tenders of Shares pursuant to the Offer. However,
Purchaser will reimburse you for customary mailing and handling expenses
incurred by you in forwarding any of the enclosed materials to your clients.
Purchaser will pay or cause to be paid any stock transfer taxes payable with
respect to the transfer of Shares to it, except as otherwise provided in
Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to
Wasserstein Perella & Co., Inc. or D.F. King & Co., Inc. (the "Information
Agent") at their respective addresses and telephone numbers set forth on the
back cover page of the Offer to Purchase.
Additional copies of the enclosed material may be obtained from the
Information Agent, at the address and telephone number set forth on the back
cover page of the Offer to Purchase.
Very truly yours,
WASSERSTEIN PERELLA & CO., INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF PARENT, PURCHASER, THE COMPANY, THE DEALER
MANAGER, THE INFORMATION AGENT OR THE DEPOSITARY, OR OF ANY AFFILIATE OF ANY
OF THE FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR
TO MAKE
2
<PAGE>
ANY STATEMENT ON BEHALF OF ANY OF THE FOREGOING IN CONNECTION WITH THE OFFER
OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED
THEREIN.
The Information Agent for the Offer is:
D.F. King & Co., Inc.
77 Water Street
New York, NY 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll Free: (800) 488-8095
The Dealer Manager for the Offer is:
Wasserstein Perella & Co., Inc.
31 West 52nd Street
New York, NY 10019
Call Collect: (212) 969-2700
3
<PAGE>
EXHIBIT (a)(5)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Unisource Worldwide, Inc.
at
$12.00 Net Per Share in Cash
by
Atlanta Acquisition Corp.
a wholly owned subsidiary
of
Georgia-Pacific Corporation
------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, JUNE 25, 1999, UNLESS THE OFFER IS EXTENDED.
- ------------------------------------------------------------------------------
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated May 28, 1999
(the "Offer to Purchase") and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute
the "Offer") in connection with the offer by Atlanta Acquisition Corp., a
Delaware corporation ("Purchaser") and a wholly owned subsidiary of Georgia-
Pacific Corporation, a Georgia corporation ("Parent"), to purchase all
outstanding shares of Common Stock, par value $.001 per share (the "Shares"),
of Unisource Worldwide, Inc., a Delaware corporation (the "Company"), at a
price of $12.00 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase and in the
related Letter of Transmittal. We are (or our nominee is) 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 endorsed
Letter of Transmittal is furnished to you for your information only and cannot
be used by you to tender Shares held by us for your account.
We request instructions as to whether you wish to have us tender on your
behalf any or all of 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 tender price is $12.00 per Share, net to you in cash.
2. The Offer is being made for all outstanding Shares.
3. The Board of Directors of the Company, by unanimous vote of all
directors present and voting, has determined that the Merger Agreement and
the transactions contemplated thereby, including the Offer and the Merger,
are fair to, and in the best interests of, the holders of the Shares,
approved the Merger Agreement, the Offer and the Merger, declared the
Merger Agreement to be advisable and resolved to recommend that
stockholders accept the Offer and tender their Shares pursuant to the
Offer.
4. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Friday, June 25, 1999, unless the Offer is extended.
5. The Offer is conditioned upon, among other things, (i) there being
validly tendered and not withdrawn prior to the expiration of the Offer a
number of Shares which, together with any Shares owned by Parent or
Purchaser, constitutes at least a majority of the Shares outstanding on a
fully diluted basis; and (ii) any applicable waiting period under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as amended, having expired
or been terminated.
6. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter
of Transmittal, stock transfer taxes with respect to the purchase of Shares
by Purchaser pursuant to the Offer.
<PAGE>
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form contained
in this letter. An envelope in which to return your instructions to us is
enclosed. If you authorize the tender of your Shares, all such Shares will be
tendered unless otherwise specified in your instructions. 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.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and is being made to all holders of Shares. Purchaser is not aware
of any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. If Purchaser becomes
aware of any valid state statute prohibiting the making of the Offer or the
acceptance of Shares pursuant thereto, Purchaser will make a good faith effort
to comply with such state statute. If, after such good faith effort, Purchaser
cannot comply with such state statute, the Offer will not be made to (nor will
tenders be accepted from or on behalf of) the holders of Shares in such state.
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 Wasserstein Perella & Co., Inc. or one or
more registered brokers or dealers licensed under the laws of such
jurisdiction.
Instructions With Respect to the Offer to Purchase for Cash
All Outstanding Shares of Common Stock of
Unisource Worldwide, Inc.
by
Atlanta Acquisition Corp.
a wholly owned subsidiary of
Georgia-Pacific Corporation
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase, dated May 28, 1999, and the related Letter of Transmittal in
connection with the offer by Atlanta Acquisition Corp., a Delaware corporation
and a wholly owned subsidiary of Georgia-Pacific Corporation, a Georgia
corporation, to purchase all outstanding shares of Common Stock, par value
$.001 per share (the "Shares"), of Unisource Worldwide, Inc., a Delaware
corporation.
This will instruct you to tender the number of Shares indicated below (or,
if no number is indicated below, all Shares) that are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer.
Dated: _________________________, 199
SIGN HERE
- ------------------------------------- --------------------------------------
______________________________________
Number of Shares
To Be Tendered: ______________________________________
Signature(s)
____________________ Shares*
-------------------------------------
______________________________________
______________________________________
Please type or print name(s)
______________________________________
______________________________________
______________________________________
Please type or print address
______________________________________
Area Code and Telephone Number
______________________________________
Taxpayer Identification 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>
EXHIBIT (a)(6)
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.
- --------------------------------------------
<TABLE>
<CAPTION>
Give the
SOCIAL SECURITY
For this type of account: number of--
- --------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner
(joint account) of the account
or, if combined
funds, the first
individual on
the account(1)
3. Husband and wife The actual owner
of the account
or, if joint
funds, either
person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if
account) the minor is the
only
contributor, the
minor(1)
6. Account in the name of The ward, minor
guardian or committee or incompetent
for a designated ward, person(3)
minor or incompetent
person
7. a. The usual revocable The grantor-
savings trust (grantor trustee(1)
is also trustee)
b. So-called trust The actual
account that is not a owner(1)
legal or valid trust
under State law
- --------------------------------------------
</TABLE>
- --------------------------------------------
<TABLE>
<CAPTION>
Give the EMPLOYER
IDENTIFICATION
For this type of account: number of--
- --------------------------------------------
<S> <C>
8. Sole proprietorship The owner(4)
account
9. A valid trust, estate The legal entity
or pension trust (Do not furnish
the identifying
number of the
personal
representative
or trustee
unless the legal
entity itself is
not designated
in the account
title)(5)
10. Corporate account The corporation
11. Religious, charitable, The organization
or educational
organization account
12. Partnership account The partnership
13. Association, club or The organization
other tax-exempt
organization
14. A broker or registered The broker or
nominee nominee
15. Account with the The public
Department of 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
- --------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner. If the owner does not have an employer
identification number, furnish the owner's social security number.
(5) List first and circle the name of the legal trust, estate or pension
trust.
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
Page 2
Obtaining a Number
If you do not have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number
(for businesses and all other entities), at the local office of the Social
Security Administration or the Internal Revenue Service (the "IRS") and apply
for a number.
Payees and Payments Exempt from Backup Withholding
The following is a list of payees exempt from backup withholding and for
which no information reporting is required. For interest and dividends, all
listed payees are exempt except item (9). For broker transactions, payees
listed in items (1) through (13) and a person registered under the Investment
Advisors Act of 1940 who regularly acts as a broker are exempt. Payments
subject to reporting under sections 6041 and 6041A are generally exempt from
backup withholding only if made to payees described in items (1) through (7),
except a corporation (other than certain hospitals described in Regulations
section 1.6041-3(c)) that provides medical and health care services or bills
and collects payments for such services is not exempt from backup withholding
or information reporting. Only payees described in items (1) through (5) are
exempt from backup withholding for barter exchange transactions and patronage
dividends.
(1) An organization exempt from tax under section 501(a), or an IRA, or a
custodial account under section 403(b)(7), if the account satisfies the
requirements of section 401 (f)(2).
(2) The United States or any of its agencies or instrumentalities.
(3) A state, the District of Columbia, a possession of the United States or
any of their political subdivisions or instrumentalities.
(4) A foreign government or any of its political subdivisions, agencies or
instrumentalities.
(5) An international organization or any of its agencies or instrumentalities.
(6) A corporation.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the United
States, the District of Columbia or a possession of the United States.
(9) A futures commission merchant registered with the Commodity Futures
Trading Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the
Investment Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in
the most recent publication of the American Society of Corporate Secretaries,
Inc., Nominee List.
(15) A trust exempt from tax under section 664 or described in section 4947.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident alien partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in section 6049(b)(5) to non-resident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Exempt payees described above should file substitute 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,
SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER. IF YOU ARE A NON-RESIDENT
ALIEN OR A FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER A
COMPLETED INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
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 sections 6041, 6041A, 6042, 6044, 6045, 6049 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 the IRS. The 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 aIso apply.
Penalties
(1) Penalty for Failure to Furnish Taxpayer Identification Number.--If you
fail to furnish your correct 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) 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.
(3) Criminal Penalty for Falsifying Information.--Willfully 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.
2
<PAGE>
EXHIBIT (a)(7)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares (as defined below). The Offer (as defined below) is made
solely by the Offer to Purchase (as defined below) dated May 28, 1999 and the
related Letter of Transmittal (and any amendments or supplements thereto), and
is being made to all holders of Shares. Purchaser (as defined below) is not
aware of any jurisdiction where the making of the Offer is prohibited by
administrative or judicial action pursuant to any valid state statute. If
Purchaser becomes aware of any valid state statute prohibiting the making of
the Offer or the acceptance of Shares pursuant thereto, Purchaser shall make a
good faith effort to comply with such state statute or to seek to have such
statute declared inapplicable to the Offer. If, after such good faith effort,
Purchaser cannot comply with such state statute, the Offer will not be made to
(nor will tenders be accepted from or on behalf of) the holders of Shares in
such state. 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 is
being made on behalf of Purchaser by Wasserstein Perella & Co., Inc. or one or
more registered brokers or dealers licensed under the laws of such
jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Unisource Worldwide, Inc.
at
$12.00 Net Per Share
by
Atlanta Acquisition Corp.
a wholly owned subsidiary of
Georgia-Pacific Corporation
Atlanta Acquisition Corp., a Delaware corporation ("Purchaser") and a wholly
owned subsidiary of Georgia-Pacific Corporation, a Georgia corporation
("Parent"), is offering to purchase all outstanding shares of Common Stock,
par value $.001 per share (the "Shares"), of Unisource Worldwide, Inc., a
Delaware corporation (the "Company"), at a price of $12.00 per Share, net to
the seller in cash, without interest, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated May 28, 1999 (the "Offer
to Purchase"), and in the related Letter of Transmittal (which, together with
any amendments or supplements thereto, collectively constitute the "Offer").
Following the Offer, Purchaser intends to effect the Merger described below.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON FRIDAY, JUNE 25, 1999, UNLESS THE OFFER IS
EXTENDED.
- --------------------------------------------------------------------------------
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn prior to the expiration of the Offer a number of
Shares which, together with any Shares owned by Parent or Purchaser,
constitutes at least a majority of the Shares outstanding on a fully diluted
basis; and (ii) any applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, having expired or been
terminated.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of May 25, 1999 (the "Merger Agreement"), among Parent, Purchaser and the
Company. The Merger Agreement provides that, among other things, as soon as
practicable after the purchase of Shares pursuant to the Offer and the
satisfaction or waiver of the other conditions set forth in the Merger
Agreement and in accordance with relevant provisions of the General
Corporation Law of the State of Delaware ("Delaware Law"), Purchaser will be
merged with and into the Company (the "Merger"). Following consummation of the
Merger, the Company will continue as the surviving corporation (the "Surviving
Corporation") and will become a wholly owned subsidiary of Parent. At the
effective time of the Merger (the "Effective Time"), each Share issued and
outstanding immediately prior to the Effective Time (other than Shares held in
the treasury of the Company, or owned by Purchaser, Parent or any direct or
indirect wholly owned subsidiary of Parent or of the Company and other than
Shares held by stockholders who shall have demanded and perfected appraisal
rights, if any, under Delaware Law) will be converted into and exchangeable
for the right to receive $12.00 in cash, without interest.
<PAGE>
The Board of Directors of the Company, by unanimous vote of all directors
present and voting, has determined that the Merger Agreement and the
transactions contemplated thereby, including the Offer and the Merger, are
fair to, and in the best interests of, the holders of the Shares, approved the
Merger Agreement, the Offer and the Merger, declared the Merger Agreement to
be advisable and resolved to recommend that stockholders accept the Offer and
tender their 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 and not withdrawn as,
if and when Purchaser gives oral or written notice to First Chicago Trust
Company of New York (the "Depositary") of Purchaser's acceptance for payment
of such Shares pursuant to the Offer. Upon the terms and subject to the
conditions of the Offer, payment for Shares accepted for payment pursuant to
the Offer will be made by deposit of the purchase price therefor with the
Depositary, which will act as agent for tendering stockholders for the purpose
of receiving payments from Purchaser and transmitting such payments to
tendering stockholders whose Shares have been accepted for payment. In all
cases, payment for Shares tendered and accepted for payment pursuant to the
Offer will be made only after timely receipt by the Depositary of (i) the
certificates evidencing such Shares (the "Share Certificates") or timely
confirmation of a book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility (as defined in the Offer to
Purchase) pursuant to the procedure set forth in Section 3 of the Offer to
Purchase, (ii) the Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, with any required signature guarantees or, in the
case of a book-entry transfer, an Agent's Message (as defined in the Offer to
Purchase) and (iii) any other documents required under the Letter of
Transmittal.
Under no circumstances will interest on the purchase price for Shares be
paid, regardless of any extension of the Offer or any delay in making such
payment.
Subject to the terms of the Merger Agreement and the applicable rules and
regulations of the Securities and Exchange Commission, Purchaser expressly
reserves the right, from time to time, to extend the period of time during
which the Offer is open, including the occurrence of any of the conditions
specified in Section 14 of the Offer to Purchase, by giving oral or written
notice of such extension to the Depositary. Any such extension will be
followed as promptly as practicable by public announcement thereof, such
announcement to be made no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Date (as defined
below) of the Offer. During any such extension, all Shares previously tendered
and not withdrawn will remain subject to the Offer, subject to the rights of
such tendering stockholder to withdraw Shares.
The term "Expiration Date" means 12:00 Midnight, New York City time, on
Friday, June 25, 1999, unless and until Purchaser (in accordance with the
terms and conditions of the Merger Agreement), shall have extended the period
of time during which the Offer is open, in which event the term "Expiration
Date" shall mean the latest time and date at which the Offer, as so extended
by Purchaser, will expire.
Tenders of Shares made pursuant to the Offer are irrevocable except that
such Shares may be withdrawn at any time prior to the Expiration Date and,
unless theretofore accepted for payment by Purchaser pursuant to the Offer,
may also be withdrawn at any time after July 26, 1999. For the withdrawal to
be effective, a written, telegraphic, telex or facsimile transmission notice
of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover page of the Offer to Purchase. If
Purchaser extends the Offer, is delayed in its acceptance for payment of
Shares or is unable to accept Shares for payment pursuant to the Offer for any
reason, then, without prejudice to Purchaser's rights under the Offer, the
Depositary may, nevertheless, on behalf of Purchaser, retain tendered Shares,
and such Shares may not be withdrawn except to the extent that tendering
stockholders are entitled to withdrawal rights as described in Section 4 of
the Offer to Purchase. Any such delay will be by an extension of the Offer to
the extent required by law. Any such notice of withdrawal must specify the
name of the person who tendered the Shares to be withdrawn, the number of
Shares to be withdrawn and the name of the registered holder of such Shares,
if different from that of the person who tendered such Shares. If Share
Certificates evidencing Shares to be withdrawn have been delivered or
otherwise identified to the Depositary, then, prior to the physical release of
such Share Certificates, the serial numbers shown on such Share Certificates
must be submitted to the Depositary and the signature(s) on the notice of
withdrawal must be guaranteed by an Eligible Institution (as defined in
Section 3 of the Offer to Purchase), unless such Shares have been tendered for
the account of an Eligible Institution. If Shares have been tendered pursuant
to the procedure for book-entry transfer as set forth in Section 3 of the
Offer to Purchase, any notice of withdrawal must specify the name and number
of the account at the Book-Entry Transfer Facility to be credited with the
withdrawn Shares. Any Shares properly withdrawn will thereafter be deemed not
to have been validly tendered for purposes of the Offer. However, withdrawn
Shares may be re-tendered at any time prior to the Expiration Date by
following one of the procedures described in Section 3 of the Offer to
Purchase. All questions as to the form and validity (including the time of
receipt) of any notice of withdrawal will be determined by Purchaser, in its
sole discretion, whose determination will be final and bidding.
2
<PAGE>
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
The Company has provided Purchaser with the Company's stockholder list and
security position listings for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase, the related Letter of Transmittal
and other relevant documents will be mailed to record holders of Shares whose
names appear on the Company's stockholder list and will be furnished for
subsequent transmittal to beneficial owners of Shares, to brokers, dealers,
trust companies and similar persons whose names, or the names of whose
nominees, appear on the stockholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing.
The Offer to Purchase and the related Letter of Transmittal contain
important information which should be read carefully before any decision is
made with respect to the Offer.
Questions and requests for assistance or additional copies of the Offer to
Purchase and the related 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 as set forth below, and
copies will be furnished promptly at Purchaser's expense. Neither Parent nor
Purchaser will pay any fees or commissions to any brokers, dealers or other
persons (other than the Information Agent and the Dealer Manager) for
soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
D.F. King & Co., Inc.
77 Water Street
New York, NY 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll Free: (800) 431-9633
The Dealer Manager for the Offer is:
Wasserstein Perella & Co., Inc.
31 West 52nd Street
New York, NY 10019
Call Collect: (212) 969-2700
May 28, 1999
3
<PAGE>
EXHIBIT (a)(8)
[GEORGIA-PACIFIC NEWS LETTERHEAD AND LOGO]
133 Peachtree Street Northeast
Atlanta, Georgia 30303
(404) 652-4000
News from Georgia-Pacific
Release No. C-1522
Contact: Ken Haldin
(404) 652-6098
Contact: Martha A.Buckley
Unisource Worldwide
(610) 722-3511
May 25, 1999
GEORGIA-PACIFIC AND UNISOURCE WORLDWIDE TO MERGE
-------------------------------------------------
ATLANTA, Ga. and BERWYN, Pa. -- Georgia-Pacific Corp. and Unisource Worldwide,
Inc. today jointly announced that each of their boards of directors has approved
a definitive merger agreement under which Georgia-Pacific will acquire all
outstanding shares of Unisource for $12 per share in cash. After the merger,
Unisource will conduct business under its existing name as a separate
distribution subsidiary of Georgia-Pacific Group (NYSE:GP), the pulp, paper and
building products business of Georgia-Pacific Corp.
The arrangement strategically unites Atlanta-based Georgia-Pacific, one of the
world's leading forest products companies, with Berwyn, Pa.-based Unisource
(NYSE:UWW), the largest independent marketer and distributor of printing and
imaging paper and supply systems in North America. Combined revenues of the two
companies exceeded $20 billion last year.
The value of the transaction is approximately $840 million plus assumption of
approximately $400 million in net debt.
Under the agreement signed by both companies, Georgia-Pacific (through a wholly
owned subsidiary) will begin a tender offer on May 28 to purchase all of the
outstanding common stock of Unisource at $12 per share, net to the seller in
cash (excluding any tax effect). Unisource's board of directors has agreed to
recommend that its stockholders accept the offer and tender their shares. The
tender offer is scheduled to close June 25 but may be extended by Georgia-
Pacific under certain conditions.
Georgia-Pacific will have no obligation to purchase any Unisource shares in the
tender offer unless, among other conditions, shares representing at least the
majority of all outstanding Unisource shares are properly tendered to Georgia-
Pacific. Once the tender offer is completed, the Georgia-Pacific subsidiary will
be merged into Unisource. A meeting of Unisource stockholders to approve the
merger will be held only if fewer than 90 percent of shares are tendered. The
transaction is subject to usual regulatory approvals.
It is anticipated that the merger will be accretive to Georgia-Pacific Group
earnings and cash flow in 1999 and 2000.
"The combination of Georgia-Pacific and Unisource is an outstanding strategic
and operational fit that will merge the underlying values of both businesses
into a fundamentally stronger whole," said A.D. "Pete" Correll, chairman and
chief executive officer of Georgia-Pacific Corp. "We expect to achieve immediate
operational synergies and to implement aggressive cost reductions so that this
merger will deliver value to Georgia-Pacific Group shareholders."
<PAGE>
Page 2
Correll added that a major due diligence process was conducted before the
arrangement was finalized. "Based on our intensive review of the Unisource
business, including its operations, management, employees and financial
condition, we believe we can achieve our goal of adding value and realizing both
short- and long-term synergies through this transaction," Correll said. "This
merger is consistent with Georgia-Pacific's fundamental financial strategy of
maintaining capital discipline and investing in businesses that will provide
returns above the cost of capital. We are confident that this is a positive
strategic combination for both organizations."
When notified of the Georgia-Pacific transaction, UGI Corp. informed Unisource
that UGI would not make any further offer, and the previously announced merger
agreement between Unisource and UGI has been terminated.
Ray B. Mundt, chairman and chief executive officer of Unisource Worldwide, said,
"Our board of directors carefully considered both Georgia-Pacific's proposal and
the pending merger with UGI and concluded that the transaction with Georgia-
Pacific is superior for Unisource stockholders. Georgia-Pacific has been an
outstanding supply partner to Unisource for many years, and we're delighted to
join forces with their company for the benefit of all of our stakeholders."
Wasserstein Perella & Co. Inc. is acting as the dealer manager for the tender
offer. D.F King & Co. Inc. will be the information agent.
NOTE: Georgia-Pacific will conduct a telephone conference call at 1 p.m. Eastern
- ----
today (Tuesday, May 25) for financial analysts and media to review this
morning's announcement of the Georgia-Pacific Corp.-Unisource Worldwide Inc.
merger agreement. The conference call will feature A.D. "Pete" Correll, chairman
and chief executive officer; John F. McGovern, executive vice president -
finance and chief financial officer; and Lee M. Thomas, executive vice president
- - paper and chemicals.
To participate in this call, dial (888) 467-8159 (domestic United States) or
(712) 271-0038 (international). Password to participate is "GAPAC." Replay of
the conference call will be available beginning at 2:30 p.m. by dialing (800)
308-7861 (domestic) or (402) 220-3846. (No password is required.) This replay
will remain available through Friday, May 28.
Georgia-Pacific (www.gp.com) is the leading manufacturer and distributor of
----------
building products in the United States and one of the world's leading
manufacturers and distributors of pulp, paper and related chemicals for the
forest products industry. It consists of two distinct operating groups: Georgia-
Pacific Group, which includes the pulp, paper and building products business,
and The Timber Company (NYSE: TGP), which manages 5 million acres of timberland
in North America. The company employs 45,000 people at more than 400 locations
in the United States and Canada. Revenues in 1998 were $13.2 billion.
Unisource Worldwide (http://www.unisourcelink.com) is the largest independent
----------------------------
distributor of printing and imaging products, packaging systems and sanitary
maintenance supplies in North America. Fiscal 1998 revenues were $7.4 billion.
================================================================================
Certain statements contained in this release, including, without limitation,
future earnings and cash flows of both Unisource and Georgia-Pacific, and the
existence and achievement of cost savings and synergies of the merged
businesses, are forward-looking statements (as such term is defined under the
Private Securities Litigation Reform Act of 1995) based on current expectations.
The accuracy of such statements is subject to a number of risks, uncertainties
and assumptions including, but not limited to, the effect of general global and
domestic economic conditions on the demand for pulp and paper and building
products; the likelihood of at least a majority of Unisource shares being
tendered in the tender offer; shareholder approval of the merger of a Georgia-
Pacific subsidiary into Unisource if necessary; realization of cost savings,
synergies and opportunities to integrate and rationalize the two businesses; the
effect of changes in the productive capacity of manufacturers of competitive
products, and other factors listed in Georgia-Pacific Corp.'s Securities and
Exchange Commission filings, including but not limited to, its Annual Report on
Form 10-K dated Dec. 31, 1998, on file and recorded March 18, 1999.
================================================================================
<PAGE>
EXHIBIT (B)(1)
[LETTERHEAD OF BANK OF AMERICA]
May 27, 1999
Mr. Danny W. Huff
Vice President and Treasurer
Georgia-Pacific Corp.
133 Peachtree Street NW
Atlanta, GA 30303
Dear Danny:
You have asked Bank of America National Trust and Savings Association and
certain of its affiliates (collectively, "Bank of America") to evaluate the
feasibility of arranging financing in an amount necessary to meet all costs and
expenses associated with the purchase by Georgia-Pacific Corp. ("Georgia-
Pacific") of all stock in Unisource Worldwide, Inc. with the assumption of debt
(the "Acquisition Transaction"). It is our understanding that the Acquisition
Transaction would require external financing of approximately $1.25 billion.
Pursuant to your request, and following our review and analysis of Georgia-
Pacific and the Acquisition Transaction using publicly available information,
Bank of America has proposed arranging a total of $3.0 billion in syndicated
credit facilities (the "Financing"). The Financing would replace the existing
$1.5 billion facility and fund the Acquisition Transaction. We have obtained
credit approval to commit $300 million to the Financing. Based on the current
state of the syndicated loan market we have concluded that a $3.0 billion
syndication having substantially similar terms and conditions can be achieved.
We have taken into account our assessment of general economic, market, and
financial conditions, as well as our experience in similar transactions and in
debt and equity capital raising activities in general.
In providing this letter, we have assumed no material change in general economic
conditions, capital market conditions, or in the operations, business prospects
(financial or other), and management of Georgia-Pacific. This letter does not
constitute an obligation of Bank of America to provide, underwrite, or arrange
the Financing.
This letter is confidential, and except for disclosure to Georgia-Pacific's
board of directors, officers and employees, and its professional advisors, or as
may be required by law, may not be disclosed to any other person or entity
without prior written permission.
Very truly yours,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
/s/ Michael J. Balok
Managing Director
<PAGE>
EXHIBIT 99(c)(1)
===============================================================================
AGREEMENT AND PLAN OF MERGER
dated as of May 25, 1999
among
UNISOURCE WORLDWIDE, INC.,
GEORGIA-PACIFIC CORPORATION
and
ATLANTA ACQUISITION CORP.
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TABLE OF CONTENTS
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ARTICLE 1
The Offer
Section 1.01. The Offer.................................................... 2
Section 1.02. Company Action............................................... 3
ARTICLE 2
The Merger
Section 2.01. The Merger................................................... 5
Section 2.02. Effective Time............................................... 5
Section 2.03. Closing of the Merger........................................ 5
Section 2.04. Effects of the Merger........................................ 5
Section 2.05. Certificate of Incorporation and Bylaws...................... 5
Section 2.06. Directors.................................................... 6
Section 2.07. Officers..................................................... 6
Section 2.08. Conversion of Shares......................................... 6
Section 2.09. Stock Options; Restricted Stock.............................. 6
Section 2.10. Payment Fund................................................. 8
Section 2.11. Payment Procedures........................................... 9
Section 2.12. No Further Ownership Rights in Company Common Stock.......... 9
Section 2.13. Dissenting Shares............................................ 9
Section 2.14. Termination of Payment Fund.................................. 10
Section 2.15. No Liability................................................. 10
Section 2.16. Investment of the Payment Fund............................... 10
Section 2.17. Lost Certificates............................................ 10
Section 2.18. Withholding Rights........................................... 11
Section 2.19. Stock Transfer Books......................................... 11
ARTICLE 3
Representations and Warranties of the Company
Section 3.01. Organization and Qualification; Subsidiaries................. 11
Section 3.02. Capitalization of the Company and its Subsidiaries........... 12
Section 3.03. Authority Relative to this Agreement......................... 13
Section 3.04. SEC Reports; Financial Statements............................ 14
Section 3.05. No Undisclosed Liabilities................................... 14
Section 3.06. Absence of Changes........................................... 15
Section 3.07. Information Supplied......................................... 17
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Section 3.08. Consents and Approvals; No Violations........................ 17
Section 3.09. No Default................................................... 18
Section 3.10. Litigation................................................... 18
Section 3.11. Compliance with Applicable Law............................... 19
Section 3.12. Employee Plans............................................... 19
Section 3.13. Labor Matters................................................ 20
Section 3.14. Environmental Matters........................................ 22
Section 3.15. Taxes........................................................ 24
Section 3.16. Material Contracts........................................... 26
Section 3.17. Insurance.................................................... 27
Section 3.18. Real Property................................................ 27
Section 3.19. Intellectual Property........................................ 27
Section 3.20. Year 2000.................................................... 28
Section 3.21. Opinion of Financial Advisor................................. 29
Section 3.22. Brokers...................................................... 29
Section 3.23. Takeover Statute............................................. 29
Section 3.24. Amendment to Rights Agreement................................ 29
Section 3.25. Break-up Fee................................................. 30
ARTICLE 4
Representations and Warranties of Parent and Purchaser
Section 4.01. Organization and Qualification; Subsidiaries................. 30
Section 4.02. Authority Relative to this Agreement......................... 31
Section 4.03. SEC Reports; Financial Statements............................ 31
Section 4.04. No Undisclosed Liabilities................................... 32
Section 4.05. Absence of Changes........................................... 32
Section 4.06. Information Supplied......................................... 32
Section 4.07. Consents and Approvals; No Violations........................ 33
Section 4.08. No Default................................................... 33
Section 4.09. Litigation................................................... 34
Section 4.10. Compliance With Applicable Law............................... 34
Section 4.11. Year 2000.................................................... 34
Section 4.12. No Prior Activities.......................................... 35
Section 4.13. Vote Required................................................ 35
Section 4.14. Sufficient Funds............................................. 35
Section 4.15. Funded Break-up Fee.......................................... 35
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ARTICLE 5
Covenants Related to Conduct of Business
Section 5.01. Conduct of Business of the Company......................... 36
Section 5.02. Access to Information...................................... 39
ARTICLE 6
Additional Agreements
Section 6.01. Preparation of the Proxy Statement......................... 39
Section 6.02. Meetings................................................... 40
Section 6.03. Reasonable Best Efforts.................................... 40
Section 6.04. Acquisition Proposals...................................... 42
Section 6.05. Public Announcements....................................... 43
Section 6.06. Indemnification; Directors' and Officers' Insurance........ 44
Section 6.07. Notification of Certain Matters............................ 45
Section 6.08. Employee Matters........................................... 46
Section 6.09. Post-Merger Board of Directors............................. 47
Section 6.10. Fees and Expenses.......................................... 48
Section 6.11. Obligations of Purchaser................................... 48
Section 6.12. Antitakeover Statutes...................................... 48
Section 6.13. The Unisource Foundation................................... 48
ARTICLE 7
Conditions to Consummation of the Merger
Section 7.01. Conditions to Each Party's Obligations to Effect
the Merger................................................. 49
ARTICLE 8
Termination; Amendment; Waiver
Section 8.01. Termination by Mutual Agreement............................. 49
Section 8.02. Termination by Either Parent or the Company................. 49
Section 8.03. Termination by the Company.................................. 50
Section 8.04. Termination by Parent....................................... 51
Section 8.05. Effect of Termination and Abandonment....................... 51
Section 8.06. Amendment................................................... 54
Section 8.07. Extension; Waiver........................................... 54
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ARTICLE 9
Miscellaneous
Section 9.01. Nonsurvival of Representations and Warranties............... 54
Section 9.02. Entire Agreement; Assignment................................ 55
Section 9.03. Notices..................................................... 55
Section 9.04. Governing Law; Waiver of Jury Trial......................... 56
Section 9.05. Descriptive Headings........................................ 56
Section 9.06. Parties in Interest......................................... 57
Section 9.07. Severability................................................ 57
Section 9.08. Specific Performance........................................ 57
Section 9.09. Brokers..................................................... 57
Section 9.10. Counterparts................................................ 58
Section 9.11. Interpretation.............................................. 58
Section 9.12. Definitions................................................. 58
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Glossary of Defined Terms
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Defined Terms Defined On Page
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Acquisition Proposal....................................................... 58
Antitrust Law.............................................................. 41
Assumed Stock Option....................................................... 7
beneficial ownership or beneficially own................................... 59
business day............................................................... 59
Cause...................................................................... 59
CERCLA..................................................................... 22
Certificate of Merger...................................................... 5
Certificates............................................................... 9
Closing.................................................................... 5
Closing Date............................................................... 5
Code....................................................................... 7
Company.................................................................... 1
Company Board.............................................................. 1
Company Common Stock....................................................... 1
Company Disclosure Schedule................................................ 11
Company Employee Benefit Plan.............................................. 19
Company Employee Benefit Plans............................................. 19
Company Permits........................................................... 19
Company Real Property Leases............................................... 27
Company Requisite Vote..................................................... 14
Company Rights............................................................. 29
Company SEC Reports........................................................ 14
Company Securities......................................................... 12
Company Stock Option....................................................... 7
Company Stockholder Meeting................................................ 40
Company Title IV Plans..................................................... 20
Computer Programs.......................................................... 28
Confidentiality Agreement.................................................. 39
Covered Transactions....................................................... 29
DGCL....................................................................... 1
Directors Restricted Stock Plan............................................ 8
Directors' Option Plan..................................................... 8
Dissenting Shares.......................................................... 9
DLJ........................................................................ 3
DOJ........................................................................ 41
Effective Time............................................................. 5
Environmental Costs and Liabilities........................................ 22
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Environmental Law.......................................................... 22
ERISA Affiliate............................................................ 20
Exchange Act............................................................... 4
Expenses................................................................... 48
FTC........................................................................ 41
Funded Break-up Fee........................................................ 35
GAAP....................................................................... 14
Good Reason................................................................ 59
Governmental Entity........................................................ 17
Hazardous Material......................................................... 22
HSR Act.................................................................... 17
ICP........................................................................ 8
Indemnified Parties........................................................ 44
Indemnified Party.......................................................... 44
Intellectual Property...................................................... 28
know or knowledge.......................................................... 60
Law........................................................................ 18
Lien....................................................................... 13
Material Adverse Effect.................................................... 60
Merger..................................................................... 1
Merger Consideration....................................................... 6
Minimum Condition.......................................................... 2
Multiemployer Plan......................................................... 19
Offer...................................................................... 1
Offer Documents............................................................ 3
Offer to Purchase.......................................................... 3
Option Plan................................................................ 6
OSHA....................................................................... 22
Parent..................................................................... 1
Parent Acquisition Proposal................................................ 60
Parent Common Stock........................................................ 7
Parent Disclosure Schedule................................................. 30
Parent Permits............................................................. 34
Parent SEC Reports......................................................... 31
Paying Agent............................................................... 8
Payment Fund............................................................... 8
Per Share Amount........................................................... 1
person..................................................................... 60
Proxy Statement............................................................ 17
Release.................................................................... 22
Remedial Action............................................................ 23
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Rights Agreement........................................................... 29
RSP........................................................................ 46
Schedule 14D-1............................................................. 3
Schedule 14D-9............................................................. 4
SEC........................................................................ 3
Shares..................................................................... 1
Significant Subsidiary..................................................... 12
subsidiary................................................................. 60
Superior Proposal.......................................................... 42
Surviving Corporation...................................................... 5
Takeover Statutes.......................................................... 29
Tax Returns................................................................ 26
Taxes...................................................................... 26
Termination Date........................................................... 50
UGI Merger Agreement....................................................... 30
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of May 25, 1999, is among
UNISOURCE WORLDWIDE, INC., a Delaware corporation (the "Company"), GEORGIA-
PACIFIC CORPORATION, a Georgia corporation ("Parent"), and ATLANTA ACQUISITION
CORP., a Delaware corporation and a wholly owned subsidiary of Parent
("Purchaser").
WHEREAS, the Boards of Directors of Parent, Purchaser and the Company have
each determined that it is in the best interests of their respective
stockholders for Parent to acquire the Company upon the terms and subject to the
conditions set forth herein; and
WHEREAS, in furtherance of such acquisition, it is proposed that Purchaser
will make a cash tender offer (the "Offer") to acquire all of the issued and
outstanding shares of Common Stock, par value $.001 per share, of the Company
("Company Common Stock") (shares of Company Common Stock being hereinafter
collectively referred to as the "Shares") for $12.00 per Share (such amount, or
any greater amount per Share paid pursuant to the Offer, being hereinafter
referred to as the "Per Share Amount"), net to the seller in cash, upon the
terms and subject to the conditions of this Agreement and the Offer; and
WHEREAS, the Board of Directors of the Company (the "Company Board") has by
the unanimous vote of all directors present and voting approved the making of
the Offer and resolved and agreed to recommend that holders of Shares tender
their Shares pursuant to the Offer; and
WHEREAS, also in furtherance of such acquisition, the Boards of Directors
of Purchaser and the Company have each approved the merger (the "Merger") of
Purchaser with and into the Company in accordance with the General Corporation
Law of the State of Delaware ("DGCL") following the consummation of the Offer
and upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements herein contained, and intending to be
legally bound hereby, the Company, Parent and Purchaser hereby agree as follows:
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ARTICLE 1
The Offer
Section 1.01. The Offer. (a) Provided that this Agreement shall not have
been terminated in accordance with Section 8.01, 8.02, 8.03 or 8.04 and none of
the events set forth in Annex A hereto shall have occurred or be existing,
Purchaser shall commence the Offer as promptly as reasonably practicable after
the date hereof, but in no event later than five business days after the initial
public announcement of Purchaser's intention to commence the Offer. The
obligation of Purchaser to accept for payment and pay for Shares tendered
pursuant to the Offer shall be subject to the satisfaction of (i) the condition
(the "Minimum Condition") that at least the number of Shares that when added to
the Shares already owned by Parent shall constitute a majority of the then
outstanding Shares on a fully diluted basis (including, without limitation, all
Shares issuable upon the conversion of any convertible securities or upon the
exercise of any options, warrants or rights) shall have been validly tendered
and not withdrawn prior to the expiration of the Offer and (ii) the other
conditions set forth in Annex A hereto. Purchaser expressly reserves the right
to waive any such condition, to increase the Per Share Amount and to make any
other changes in the terms and conditions of the Offer; provided, however, that,
the Purchaser will not (i) decrease the Per Share Amount, (ii) reduce the number
of Shares sought in the Offer, (iii) add to the conditions to the Offer set
forth in Annex A hereto, (iv) change the form of consideration to be paid in the
Offer or (v) make any other change in the terms of the Offer that is adverse to
holders of Shares. The Per Share Amount shall, subject to any applicable
withholding of taxes, be net to each seller in cash, upon the terms and subject
to the conditions of the Offer. Notwithstanding the foregoing, without the
consent of the Company, Purchaser shall have the right to extend the Offer (but
in no event later than the Termination Date) (i) from time to time if, at the
scheduled or extended expiration date of the Offer, any of the conditions to the
Offer shall not have been satisfied or waived, until such conditions are
satisfied or waived, (ii) for any period required by any rule, regulation,
interpretation or position of the SEC or the staff thereof applicable to the
Offer or any period required by applicable law and (iii) on one or more
occasions for an aggregate period of not more than 10 business days beyond the
latest expiration date that would otherwise be permitted under clause (i) or
(ii) of this sentence, if, on such expiration date, the number of Shares
tendered (and not withdrawn) pursuant to the Offer, together with the Shares
then owned by Parent, represents more than 80% but less than 90% of the
outstanding Shares on a fully-diluted basis. If all of the conditions to the
Offer are not satisfied or waived on any scheduled expiration date of the Offer,
subject to Section 8.04(b), Purchaser shall extend the Offer from time to time
until such conditions are satisfied or waived. Upon the terms and subject to
the conditions of the Offer, Purchaser shall accept for payment Shares that have
been validly tendered and not withdrawn pursuant to the
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Offer at the earliest time that all conditions to the Offer shall have been
satisfied or waived by Purchaser. Subject to the terms and conditions of the
Offer (including, without limitation, the Minimum Condition), Purchaser shall
pay, as promptly as practicable after expiration of the Offer, for all Shares
validly tendered and not withdrawn.
(b) As soon as reasonably practicable on the date of commencement of the
Offer, Purchaser shall file with the Securities and Exchange Commission (the
"SEC") a Tender Offer Statement on Schedule 14D-1, including all exhibits
thereto (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 the
related form of 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"). Parent, Purchaser and the Company shall correct
promptly any information provided by any of them for use in the Offer Documents
which shall become false or misleading, and Parent and Purchaser shall 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, in each case as and to the extent required by applicable Law.
The Company and its counsel shall be given an opportunity to review and comment
on the Offer Documents (and any amendments thereto) prior to their being filed
with the SEC or disseminated to the holders of Shares. Parent and Purchaser
shall provide the Company and its counsel with any comments or other
communications, whether written or oral, that Parent, Purchaser or their counsel
may receive from time to time from the SEC or its staff with respect to the
Offer Documents promptly after receipt of such comments or other communications.
Section 1.02. Company Action. (a) The Company hereby approves of and
consents to the Offer and represents that the Company Board, at a meeting duly
called and held on May 24, 1999, has, by the unanimous vote of all directors
present and voting, (A) determined that this Agreement and the transactions
contemplated thereby, including the Offer and the Merger, are fair to and in the
best interests of the holders of the Shares, (B) approved and declared advisable
this Agreement and the transactions contemplated hereby and (C) recommended that
the stockholders of the Company accept the Offer and tender their Shares
pursuant to the Offer and approve and adopt this Agreement and the transactions
contemplated hereby. Donaldson, Lufkin & Jenrette Securities Corporation
("DLJ") has delivered to the Company Board a written opinion that the Per Share
Amount to be received by the holders of Shares (other than Parent and its
subsidiaries) pursuant to the Offer and the Merger is fair to the holders of the
Shares from a financial point of view. The Company hereby consents to the
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inclusion in the Offer Documents of the recommendations of the Company Board
described in the first sentence of this Section 1.02(a).
(b) As soon as reasonably practicable on the date of commencement of the
Offer, the Company shall file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9, including all exhibits thereto (together with all
amendments and supplements thereto, the "Schedule 14D-9"), containing the
recommendation of the Company Board described in Section 102, and shall
disseminate the Schedule 14D-9 to the extent required by Rule 14d-9 under the
Exchange Act of 1934, as amended (the "Exchange Act") and any other applicable
Law. The Company, Parent and Purchaser shall correct promptly any information
provided by any of them for use in the Schedule 14D-9 which shall become false
or misleading, and the Company shall take all steps necessary to cause the
Schedule 14D-9, as so corrected, to be filed with the SEC and disseminated to
holders of Shares, in each case as and to the extent required by applicable Law.
Parent and its counsel shall be given an opportunity to review and comment on
the Schedule 14D-9 (and any amendments thereto) prior to its being filed with
the SEC. The Company shall provide Parent, Purchaser and their counsel with any
comments or other communications, whether written or oral, that the Company 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 or other
communications.
(c) The Company (i) shall promptly furnish Purchaser with mailing labels
containing the names and addresses of all record holders of Shares and with
security position listings of Shares held in stock depositories, each as of a
recent date, together with all other available listings and computer files
containing names, addresses and security position listings of record holders and
beneficial owners of Shares and (ii) shall furnish Purchaser with such
additional information, including, without limitation, updated listings and
computer files of stockholders, mailing labels and security position listings,
and such other assistance as Parent, Purchaser or their agents may reasonably
request in connection with the Offer.
ARTICLE 2
The Merger
Section 2.01. The Merger. At the Effective Time (as hereinafter defined)
and upon the terms and subject to the conditions of this Agreement and in
accordance with the DGCL, Purchaser shall be merged with and into the Company in
the Merger. Following the Merger, the Company shall continue as the surviving
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corporation (the "Surviving Corporation") and the separate corporate existence
of Purchaser shall cease.
Section 2.02. Effective Time. Subject to the provisions of this Agreement,
Parent, Purchaser and the Company shall cause the Merger to be consummated by
filing an appropriate Certificate of Merger or other appropriate documents (the
"Certificate of Merger") with the Secretary of State of the State of Delaware in
such form as required by, and executed in accordance with, the relevant
provisions of the DGCL, as soon as practicable on the Closing Date (as
hereinafter defined). The Merger shall become effective upon such filing or at
such time thereafter as is provided in the Certificate of Merger (the "Effective
Time").
Section 2.03. Closing of the Merger. The closing of the Merger (the
"Closing") will take place at a time and on a date to be specified by the
parties (the "Closing Date"), which shall be no later than the second business
day after satisfaction or waiver of the conditions set forth in Article 7 (other
than those conditions that by their nature are to be satisfied at the Closing,
but subject to the fulfillment or waiver of those conditions), at the offices of
Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022, or at such
other time, date or place as agreed to in writing by the parties hereto.
Section 2.04. Effects of the Merger. The Merger shall have the effects set
forth in the DGCL. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the properties, rights, privileges, powers
and franchises of the Company and Purchaser shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and Purchaser
shall become the debts, liabilities and duties of the Surviving Corporation.
Section 2.05. Certificate of Incorporation and Bylaws. The certificate of
incorporation of the Company in effect at the Effective Time shall be the
certificate of incorporation of the Surviving Corporation until amended in
accordance with applicable law. The bylaws of the Purchaser in effect at the
Effective Time shall be the bylaws of the Surviving Corporation until amended in
accordance with applicable law.
Section 2.06. Directors. The directors of Purchaser at the Effective Time
shall be the initial directors of the Surviving Corporation, to hold office in
accordance with the certificate of incorporation and bylaws of the Surviving
Corporation until their successors are duly elected or appointed and qualified
or until their earlier death, resignation or removal.
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Section 2.07. Officers. The officers of the Company at the Effective Time
shall be the initial officers of the Surviving Corporation, to hold office in
accordance with the certificate of incorporation and bylaws of the Surviving
Corporation until their successors are duly elected or appointed and qualified
or until their earlier death, resignation or removal.
Section 2.08. Conversion of Shares. (a) At the Effective Time, each
outstanding share of Common Stock, par value $.01 per share, of Purchaser shall,
by virtue of the Merger and without any action on the part of Purchaser, the
Company or the holder thereof, be converted into one fully paid and non-
assessable share of Common Stock, par value $.001 per share, of the Surviving
Corporation.
(b) At the Effective Time, each Share, including the corresponding Company
Rights (as hereinafter defined), issued and outstanding immediately prior to the
Effective Time (other than (i) Shares held by the Company, (ii) Shares held by
Parent or any of its subsidiaries (as hereinafter defined) and (iii) any
Dissenting Shares (as hereinafter defined)) shall, by virtue of the Merger and
without any action on the part of Purchaser, the Company or the holder thereof,
be converted into and exchangeable for the right to receive an amount equal to
the Per Share Amount in cash (the "Merger Consideration") payable, without
interest, to the holder of such Share, upon surrender, in the manner provided in
Section 211, of the Certificate (as hereinafter defined) that formerly
represented such Share.
(c) At the Effective Time, each Share held by Parent, each subsidiary of
Parent or the Company immediately prior to the Effective Time shall, by virtue
of the Merger and without any action on the part of Parent, any subsidiary of
Parent or the Company be canceled, retired and cease to exist and no payment
shall be made with respect thereto.
Section 2.09. Stock Options; Restricted Stock. (a) As soon as practicable
following the date of this Agreement, Parent and the Company (or, if
appropriate, any committee of the Company Board administering Company's Stock
Option Plan for Employees, as amended and restated as of January 28, 1998 (the
"Option Plan"), shall take such action as may be required to effect the
following provisions of this Section 2.09. At the Effective Time each (A)
unvested option and (B) vested option whose exercise price immediately prior to
the Effective Time equals or exceeds $12.00, in each case to purchase Shares
pursuant to the Option Plan (a "Company Stock Option"), which is then
outstanding shall be assumed by Parent and converted into an option (or a new
substitute option shall be granted) (an "Assumed Stock Option") to purchase the
number of shares of Georgia-Pacific Corporation-Georgia-Pacific Group common
stock, par value $.80 per share ("Parent Common Stock") (rounded up to the
nearest whole share) equal to (x)
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the number of Shares subject to such option multiplied by (y) the Merger
Consideration divided by the closing price (as reported in the New York City
edition of the Wall Street Journal, or if not reported therein, another
nationally recognized source) for a share of Parent Common Stock on the date of
the Effective Time, at an exercise price per share of Parent Common Stock
(rounded down to the nearest penny) equal to (A) the former exercise price per
share of Company Common Stock under such option immediately prior to the
Effective Time divided by (B) the Merger Consideration divided by the closing
price (as reported in the New York City edition of the Wall Street Journal, or
if not reported therein, another nationally recognized source) for a share of
Parent Common Stock on the date of the Effective Time; provided, however, that
in the case of any Company Stock Option which is intended to qualify as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"), the conversion formula shall be adjusted, if necessary,
to comply with Section 424(a) of the Code. Except as provided above each Assumed
Stock Option shall be subject to the same terms and conditions (including
expiration date, vesting and exercise provisions) as were applicable to the
converted Company Stock Option immediately prior to the Effective Time;
provided, however, that if the employment of any holder of an Assumed Stock
Option is terminated by the Company other than for cause after the Effective
Time, all Assumed Options held by such holder shall be 100% vested and remain
exercisable until the earlier of (x) 90 days beginning on the date of such
termination and (y) the expiration of the term of the Assumed Option.
(b) As soon as practicable after the Effective Time, Parent shall deliver
to the holders of Company Stock Options appropriate notices setting forth such
holders' rights pursuant to the Option Plan and the agreements evidencing the
grants of such Company Stock Options and indicating that such Company Stock
Options and agreements have been assumed by Parent and shall continue in effect
on the same terms and conditions (subject to the adjustments required by the
terms thereof or by this Section 2.09).
(c) Parent shall take such actions as are reasonably necessary for the
conversion of Company Stock Options into Assumed Stock Options pursuant to this
Section 2.09, including the reservation, issuance and listing of shares of
Parent Common Stock as is necessary to effectuate the transactions contemplated
by this Section 2.09. Parent shall use its reasonable best efforts to prepare
and file with the SEC as soon as practicable after the Effective Time a
registration statement on Form S-8 or other appropriate form with respect to
shares of Parent Common Stock subject to the Assumed Stock Options and to
maintain the effectiveness of such registration statement covering such Assumed
Stock Options (and to maintain the current status of the prospectus contained
therein) for so long as any of such Assumed Stock Options remain outstanding.
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(d) At the Effective Time, each vested option to purchase Shares under the
Option Plan whose exercise price immediately prior to the Effective Time is less
than $12.00 and each option to purchase Shares under the Company's Directors'
Stock Option Plan, as amended and restated as of January 28, 1998 (the
"Directors' Option Plan"), whether vested or unvested, shall be canceled, and
Parent shall pay each holder thereof in cash at the Effective Time for each such
option an amount determined by multiplying (A) the excess, if any, of the Merger
Consideration over the applicable exercise price per Share of such option by (B)
the number of Shares to which such option relates.
(e) At the Effective Time, any restricted Shares or share units awarded
pursuant to any plan, arrangement or transaction, including the Restricted Stock
Plan for Directors, as amended and restated on January 28, 1998 (the "Directors
Restricted Stock Plan"), and the Company's Incentive Compensation Plan, as
amended and restated as of January 28, 1998 (the "ICP"), outstanding immediately
prior to the Effective Time shall be cancelled, and Parent shall pay to each
holder thereof in cash at the Effective Time for each such restricted Share or
share unit an amount determined by multiplying (A) the Merger Consideration by
(B) the number of such restricted Shares or share units held by such holder.
(f) Prior to the Effective Time, the Company shall take all actions
(including, if appropriate, amending the terms of the Option Plan, the
Directors' Option Plan, the Directors' Restricted Stock Plan and the ICP) that
are necessary to give effect to the transactions contemplated by this Section
2.09.
Section 2.10. Payment Fund. Prior to the Effective Time, Parent shall
appoint a commercial bank or trust company reasonably acceptable to the Company
to act as paying agent hereunder for the purpose of exchanging the Merger
Consideration for Shares (the "Paying Agent"). Prior to the Effective Time,
Parent shall deposit with the Paying Agent, in trust for the benefit of holders
of Shares, cash sufficient to pay the Merger Consideration payable pursuant to
Section 2.08 in exchange for outstanding Shares. Such cash deposited with the
Paying Agent shall hereinafter be referred to as the "Payment Fund."
Section 2.11. Payment Procedures. As soon as reasonably practicable after
the Effective Time, Parent and the Surviving Corporation shall cause the Paying
Agent to mail to each holder of a certificate or certificates which immediately
prior to the Effective Time represented outstanding Shares ("Certificates") (i)
a letter of transmittal which shall specify that delivery shall be effected, and
risk of loss and title to Certificates shall pass, only upon delivery of
Certificates to the Paying Agent, and which letter shall be in customary form
and have such other provisions as Parent may reasonably specify and (ii)
instructions
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for effecting the surrender of such Certificates in exchange for the applicable
Merger Consideration. Upon surrender of a Certificate to the Paying Agent
together with such letter of transmittal, duly executed and completed in
accordance with the instructions thereto, and such other documents as may
reasonably be required by the Paying Agent, the holder of such Certificate shall
be entitled to receive in payment therefor a check in the amount equal to the
cash that such holder has the right to receive pursuant to the provisions of
this Article 2. No interest will be paid or will accrue on any cash payable
pursuant to Section 2.08. In the event of a transfer of ownership of Company
Common Stock which is not registered in the transfer records of the Company, a
check in the proper amount of the Merger Consideration payable pursuant to
Section 2.08 may be issued with respect to such Shares to such a transferee if a
Certificate or Certificates representing such Shares are presented to the Paying
Agent, accompanied by all documents required to evidence and effect such
transfer and to evidence that any applicable stock transfer taxes have been
paid.
Section 2.12. No Further Ownership Rights in Company Common Stock. All cash
paid upon conversion of the Shares in accordance with the terms of Article 1 and
this Article 2 shall be deemed to have been issued or paid in full satisfaction
of all rights pertaining to the Shares.
Section 2.13. Dissenting Shares. (a) Notwithstanding any other provisions
of this Agreement to the contrary, Shares that are outstanding immediately prior
to the Effective Time and that are held by stockholders who shall not have voted
in favor of the Merger or consented thereto in writing and who shall have
demanded properly in writing appraisal for such shares in accordance with
Section 262 of the DGCL (collectively, the "Dissenting Shares") shall not be
converted into or represent the right to receive the Merger Consideration. Such
stockholders shall be entitled to receive payment of the appraised value of such
shares of Company Common Stock held by them in accordance with the provisions of
such Section 262, except that all Dissenting Shares held by stockholders who
shall have failed to perfect or who effectively shall have withdrawn or lost
their rights to appraisal of such shares of Company Common Stock under such
Section 262 shall thereupon be deemed to have been converted into and to have
become exchangeable, as of the Effective Time, for the right to receive, without
any interest thereon, the Merger Consideration, upon surrender, in the manner
provided in Section 2.11, of the Certificate or Certificates that formerly
represented such shares of Company Common Stock.
(b) The Company shall give Parent (i) prompt notice of any demands for
appraisal received by the Company, withdrawals of such demands, and any other
instruments served pursuant to DGCL and received by the Company and (ii) the
opportunity to direct all negotiations and proceedings with respect to demands
for
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appraisal under DGCL. The Company shall not, except with the prior written
consent of Parent, make any payment with respect to any demands for appraisal or
offer to settle or settle any such demands.
Section 2.14. Termination of Payment Fund. Any portion of the Payment Fund
which remains undistributed to the holders of Certificates for six months after
the Effective Time shall be delivered to the Surviving Corporation or otherwise
on the instruction of the Surviving Corporation, and any holders of the
Certificates who have not theretofore complied with this Article 2 shall
thereafter look only to the Surviving Corporation and Parent for the Merger
Consideration with respect to the Shares formerly represented thereby to which
such holders are entitled pursuant to Section 2.08 and Section 2.11. Any such
portion of the Payment Fund remaining unclaimed by holders of Shares five years
after the Effective Time (or such earlier date immediately prior to such time as
such amounts would otherwise escheat to or become property of any Governmental
Entity (as hereinafter defined)) shall, to the extent permitted by law, become
the property of the Surviving Corporation free and clear of any claim or
interest of any person previously entitled thereto.
Section 2.15. No Liability. None of Parent, Purchaser, the Company, the
Surviving Corporation or the Paying Agent shall be liable to any person in
respect of any Merger Consideration from the Payment Fund delivered to a public
official pursuant to any applicable abandoned property, escheat or similar Law.
Section 2.16. Investment of the Payment Fund. The Paying Agent shall
invest the cash included in the Payment Fund as directed by Parent on a daily
basis. Any interest and other income resulting from such investments shall
promptly be paid to Parent.
Section 2.17. Lost Certificates. If 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
the Surviving Corporation, the posting by such person of a bond in such
reasonable amount as the Surviving Corporation may direct as indemnity against
any claim that may be made against it with respect to such Certificate, the
Paying Agent will deliver in payment for such lost, stolen or destroyed
Certificate the applicable Merger Consideration with respect to the Shares
formerly represented thereby.
Section 2.18. Withholding Rights. Each of the Surviving Corporation and
Parent shall be entitled to deduct and withhold from the Merger Consideration
otherwise payable pursuant to this Agreement to any holder of Shares such
amounts as it is required to deduct and withhold with respect to the making of
such payment under the Code and the rules and regulations promulgated
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thereunder, or any provision of a Law relating to Taxes. To the extent that
amounts are so withheld by the Surviving Corporation or Parent, as the case may
be, such withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the holder of the Shares in respect to which such deduction
and withholding was made by the Surviving Corporation or Parent, as the case may
be.
Section 2.19. Stock Transfer Books. The stock transfer books of the
Company shall be closed immediately upon the Effective Time and there shall be
no further registration of transfers of Shares thereafter on the records of the
Company. On or after the Effective Time, any Certificates presented to the
Paying Agent or Parent for any reason shall be converted into the Merger
Consideration with respect to the Shares formerly represented thereby.
ARTICLE 3
Representations and Warranties of the Company
Except as set forth in the disclosure schedule delivered by the Company to
Parent prior to the execution of this Agreement (the "Company Disclosure
Schedule") (each section of which qualifies the correspondingly-numbered
representation and warranty or covenant to the extent specified therein), the
Company hereby represents and warrants to each of Parent and Purchaser as
follows:
Section 3.01. Organization and Qualification; Subsidiaries. (a) The
Company and each of its subsidiaries (as hereinafter defined) is a corporation
or legal entity duly organized, validly existing and in good standing under the
Laws of the jurisdiction of its incorporation or formation and has all requisite
corporate, partnership or similar power and authority to own, lease and operate
its properties and to carry on its businesses as now conducted and proposed by
the Company to be conducted.
(b) Section 3.01 of the Company Disclosure Schedule identifies all
subsidiaries of the Company.
(c) Each of the Company and its subsidiaries is duly qualified or licensed
and in good standing to do business in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary, except where the failure to be
so duly qualified or licensed and in good standing does not and would not
reasonably
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be expected to have, individually or in the aggregate, a Material Adverse Effect
on the Company.
(d) The Company has heretofore made available to Parent accurate and
complete copies of the certificate of incorporation and bylaws or equivalent
constituent documents, as currently in effect, of each of the Company and each
of its subsidiaries which on the date of determination is a "significant
subsidiary" within the meaning of Rule 1-02(w) of Regulation S-X promulgated
under the Exchange Act ("Significant Subsidiary").
Section 3.02. Capitalization of the Company and its Subsidiaries. (a) The
authorized capital stock of the Company consists of: (i) 250,000,000 Shares, of
which 70,218,397 Shares were issued and outstanding and 3,052 shares of which
were held in the Company's treasury, in each case, as of the close of business
on May 21, 1999, and (ii) 10,000,000 shares of preferred stock, par value $.001
per share, no shares of which are outstanding. All of the issued and
outstanding Shares have been validly issued, and are duly authorized, fully
paid, non-assessable and free of preemptive rights. As of May 21, 1999,
5,176,485 Shares were issuable pursuant to awards that have been granted under
the Directors Restricted Stock Plan, the Option Plan and the Directors' Option
Plan. Except for the Company Rights and as set forth above, as of the date
hereof, there are outstanding (i) no shares of capital stock or other voting
securities of the Company, (ii) no securities of the Company or its subsidiaries
convertible into or exchangeable for shares of capital stock or voting
securities of the Company, (iii) no options or other rights to acquire from the
Company or its subsidiaries, and no obligations of the Company or its
subsidiaries to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of the
Company, and (iv) no equity equivalents, interests in the ownership or earnings
of the Company or its subsidiaries or other similar rights (including stock
appreciation rights) (collectively, "Company Securities"). There are no
outstanding obligations of the Company or its subsidiaries to repurchase, redeem
or otherwise acquire any Company Securities. There are no stockholder
agreements, voting trusts or other agreements or understandings to which the
Company is a party or to which it is bound relating to the voting of any shares
of capital stock of the Company.
(b) All of the outstanding capital stock of the Company's subsidiaries is
owned by the Company, directly or indirectly, free and clear of any Lien (as
hereinafter defined) or any other limitation or restriction (including any
restriction on the right to vote or sell the same, except as may be provided as
a matter of law). There are no securities of the Company or its subsidiaries
convertible into or exchangeable for, no options or other rights to acquire from
the Company or its subsidiaries, and no other contract, understanding,
arrangement or obligation
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(whether or not contingent) providing for the issuance or sale, directly or
indirectly, of, or granting a right of first refusal, first negotiation, last
look or similar right with respect to, any capital stock or other ownership
interests in, or any other securities of, any subsidiary of the Company. There
are no outstanding contractual obligations of the Company or its subsidiaries to
repurchase, redeem or otherwise acquire any outstanding shares of capital stock
or other ownership interests in any subsidiary of the Company. For purposes of
this Agreement, "Lien" means, with respect to any asset (including, without
limitation, any security) any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind in respect of such asset.
Section 3.03. Authority Relative to this Agreement. (a) The Company has
all necessary corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. No other
corporate proceedings on the part of the Company are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby (other than,
with respect to the Merger, the Company Requisite Vote (as hereinafter
defined)). This Agreement has been duly and validly executed and delivered by
the Company and constitutes a valid, legal and binding agreement of the Company,
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
(b) The Company Board has duly and validly authorized the execution and
delivery of this Agreement and approved the consummation of the transactions
contemplated hereby, and has taken all corporate actions required to be taken by
the Company Board for the consummation of the transactions, including the Offer
and the Merger, contemplated hereby and, subject to Section 6.04(b), has
resolved (i) to deem this Agreement and the transactions contemplated hereby,
including the Merger, taken together, advisable and fair to and in the best
interests of the Company and its stockholders, and (ii) to recommend that the
stockholders of the Company approve and adopt this Agreement. The Company Board
has directed that this Agreement be submitted to the stockholders of the Company
for their approval. The affirmative approval of the holders of Shares
representing a majority of the votes that may be cast by the holders of all
outstanding Shares (the "Company Requisite Vote") is the only vote of the
holders of any class or series of capital stock of the Company necessary to
adopt this Agreement and approve the transactions contemplated hereby, including
the Merger.
Section 3.04. SEC Reports; Financial Statements. The Company has filed all
required forms, reports and documents with the SEC since November 1,
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1996, each of which has complied in all material respects with all applicable
requirements of the Securities Act and the Exchange Act, each as in effect on
the dates such forms, reports and documents were filed. The Company has
heretofore made available to Parent, in the form filed with the SEC (including
any amendments thereto), (i) its Annual Reports on Form 10-K for each of the
fiscal years ended September 30, 1997 and 1998 and its Form 10 filed November
26, 1996, (ii) all definitive proxy statements relating to the Company's
meetings of stockholders (whether annual or special) held since January 1, 1997,
and (iii) all other reports or registration statements filed by the Company with
the SEC since November 1, 1996 (the "Company SEC Reports"). None of such forms,
reports or documents, including, without limitation, any financial statements or
schedules included or incorporated by reference therein, contained, when filed,
any untrue statement of a material fact or omitted to state a material fact
required to be stated or incorporated by reference therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading. The consolidated financial statements of the Company
included in the Company SEC Reports complied as to form in all material respects
with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto and fairly present, in conformity with generally
accepted accounting principles applied on a consistent basis ("GAAP") (except as
may be indicated in the notes thereto), the consolidated financial position of
the Company and its consolidated subsidiaries as of the dates thereof and their
consolidated results of operations and changes in financial position for the
periods then ended (subject, in the case of the unaudited interim financial
statements, to normal year-end adjustments).
Section 3.05. No Undisclosed Liabilities. Except as and to the extent
publicly disclosed by the Company in the Company SEC Reports, none of the
Company or its subsidiaries has any liabilities or obligations of any nature,
whether or not accrued, contingent or otherwise, and there is no existing
condition, situation or set of circumstances which would reasonably be expected
to result in such a liability or obligation, other than liabilities or
obligations provided for in the consolidated balance sheet of the Company
(including the notes thereto) as of September 30, 1998, liabilities or
obligations under this Agreement and liabilities or obligations which would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company.
Section 3.06. Absence of Changes. Except as and to the extent publicly
disclosed in the Company SEC Reports or as expressly permitted by Section 5.01,
since September 30, 1998, the Company and its subsidiaries have conducted their
business in the ordinary and usual course consistent with past practice and
there has not been:
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(a) any event, occurrence or development which does or would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company;
(b) any declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of capital stock of the Company (other
than payment of the Company's regular quarterly cash dividend on Company Common
Stock), or any repurchase, redemption or other acquisition by the Company or any
subsidiary of the Company of any Company Securities;
(c) any amendment of any term of any outstanding security of the Company
or any subsidiary of the Company that would materially increase the obligations
of the Company or such subsidiary under such security;
(d) (x) any incurrence or assumption by the Company or any subsidiary of
the Company of any indebtedness for borrowed money, other than borrowings under
existing credit facilities (or any renewals, replacements or extensions that do
not increase the aggregate commitments thereunder) that are incurred (A) in the
ordinary and usual course of business consistent with past practice (it being
understood that any indebtedness incurred prior to the date hereof in respect of
capital expenditures shall be considered to have been in the ordinary and usual
course of business consistent with past practice) or (B) in connection with (1)
any acquisition or capital expenditure permitted by Section 501 or (2) the
transactions contemplated hereby, or (y) any guarantee, endorsement or other
incurrence or assumption of liability (whether directly, contingently or
otherwise) by the Company or any subsidiary of the Company for the obligations
of any other person (other than the Company or any wholly owned subsidiary of
the Company), other than in the ordinary and usual course of business consistent
with past practice;
(e) any creation or assumption by the Company or any subsidiary of the
Company of any Lien on any material asset of the Company or any subsidiary of
the Company other than in the ordinary and usual course of business consistent
with past practice;
(f) any making of any loan, advance or capital contribution to or
investment in any person by the Company or any subsidiary of the Company other
than (i) loans, advances or capital contributions to or investments in wholly
owned subsidiaries of the Company or (ii) loans or advances to employees of the
Company or any subsidiary made in the ordinary and usual course of business
consistent with past practice;
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(g) (i) any contract or agreement entered into by the Company or any
subsidiary of the Company on or prior to the date hereof relating to any
material acquisition or disposition of any assets or business other than in the
ordinary course of business or (ii) any modification, amendment, assignment,
termination or relinquishment by the Company or any subsidiary of the Company of
any contract, license or other right (including any insurance policy naming it
as a beneficiary or a loss payable payee) that does or would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company;
(h) any material change in any method of accounting or accounting
principles or practice by the Company or any subsidiary of the Company, except
for any such change required by reason of a change in GAAP; or
(i) any (i) grant of any severance or termination pay to any director,
officer or employee of the Company or any of its subsidiaries, (ii) entering
into of any employment, deferred compensation, change in control or other
similar agreement (or any amendment to any such existing agreement) with any
director, officer or employee of the Company or any of its subsidiaries, (iii)
increase in benefits payable under any existing severance or termination pay
policies or employment agreements or (iv) increase in compensation, bonus or
other benefits payable to directors, officers or employees of the Company or any
of its subsidiaries other than, in the case of clause (i) with respect to non-
executive employees and clause (iv) only, in the ordinary course of business
consistent with past practice.
Section 3.07. Information Supplied. None of the information supplied or to
be supplied by the Company for inclusion or incorporation by reference in (i)
the Offer Documents or any amendments or supplements thereto to be filed with
the SEC by Parent in connection with the Offer will, at the time filed with the
SEC, at the time mailed to holders of Shares and at the time of the consummation
of the Offer, 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, and (ii)(x) the proxy statement (the "Proxy Statement") or
any amendments or supplements thereto relating to the Company Stockholder
Meeting will, at the date mailed to stockholders and at the time of the Company
Stockholder Meeting or (y) the Schedule 14D-9 or any amendments or supplements
thereto will, at the time filed with the SEC and at the time mailed to holders
of Shares, 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
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circumstances under which they were made, not misleading. If at any time prior
to the Effective Time any event with respect to the Company, its officers and
directors or any of its subsidiaries should occur which is required to be
described in an amendment of, or a supplement to, (i) the Schedule 14D-9 or the
Proxy Statement, such amendment or supplement (which Parent shall have a
reasonable opportunity to review) shall be promptly filed with the SEC and, as
required by Law, disseminated to the stockholders of the Company or (ii) the
Offer Documents, the Company shall promptly notify Parent and provide Parent
with such information as is necessary to allow Parent to prepare such amendment
and supplement. The Schedule 14D-9 and the Proxy Statement, and any amendment or
supplement thereto, when filed, distributed or disseminated, as applicable, will
comply as to form in all material respects with the provisions of the Exchange
Act and the rules and regulations thereunder.
Section 3.08. Consents and Approvals; No Violations. Except for filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Securities Act, the Exchange Act, state
securities or blue sky laws, the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), the filing and recordation of the Certificate
of Merger as required by the DGCL and as otherwise set forth in Section 3.08 to
the Company Disclosure Schedule, no filing with or notice to, and no permit,
authorization, consent or approval of, any court or tribunal or administrative,
governmental or regulatory body, agency or authority (a "Governmental Entity")
or other third party is necessary for the execution and delivery by the Company
of this Agreement or the consummation by the Company of the transactions
contemplated hereby, except where the failure to obtain such permits,
authorizations, consents or approvals or to make such filings or give such
notice does not and would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company.
Section 3.09. No Default. Neither the Company nor any of its subsidiaries
are in violation of any term of (i) its certificate of incorporation, bylaws or
other organizational documents, (ii) any agreement or instrument related to
indebtedness for borrowed money or any other agreement to which it is a party or
by which it is bound, or (iii) any foreign or domestic law, order, writ,
injunction, decree, ordinance, award, stipulation, statute, judicial or
administrative doctrine, rule or regulation enacted by a Governmental Entity
("Law") applicable to the Company, its subsidiaries or any of their respective
properties or assets, the consequence of which violation does or would
reasonably be expected to (A) have, in the case of (ii) or (iii), individually
or in the aggregate, a Material Adverse Effect on the Company or (B) prevent or
materially delay the performance of this Agreement by the Company. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby will not
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(i) violate the certificate of incorporation, bylaws or other organizational
documents of the Company or any of its subsidiaries, (ii) violate or conflict
with, constitute a default under, require any consent, waiver or notice under
any term of, or result in the reduction or loss of any benefit or the creation
or acceleration of any right or obligation under, any agreement, note, bond,
mortgage, indenture, contract, lease, Company Permit (as hereinafter defined) or
other obligation or right to which the Company or any of its subsidiaries is a
party or by which any of the assets or properties of the Company or any of its
subsidiaries is bound, (iii) violate any applicable Law, or (iv) result in the
creation or imposition of any Lien upon any of the properties or assets of the
Company or any of its subsidiaries, except, in the case of clauses (ii) through
(iv) only, where any of the foregoing do not or would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on the
Company.
Section 3.10. Litigation. Except as and to the extent publicly disclosed
by the Company in the Company SEC Reports, there is no suit, claim, action or
proceeding pending or, to the Company's knowledge, threatened, nor to the
knowledge of the Company, is there any investigation pending or threatened,
against the Company or any of its subsidiaries or any of their respective
properties or assets which (a) would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company or
(b) as of the date hereof, questions the validity of this Agreement or any
action to be taken by the Company in connection with the consummation of the
transactions contemplated hereby or is reasonably likely to otherwise prevent or
delay the consummation of the transactions contemplated by this Agreement.
Except as and to the extent publicly disclosed by the Company in the Company SEC
Reports, none of the Company or its subsidiaries is subject to any outstanding
order, writ, injunction or decree which does or would reasonably be expected to
have a Material Adverse Effect on the Company.
Section 3.11. Compliance with Applicable Law. The Company and its
subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities necessary for the lawful conduct of their
respective businesses (the "Company Permits"), except for failures to hold such
permits, licenses, variances, exemptions, orders and approvals which do not or
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company. The Company and its subsidiaries are in
compliance with the terms of the Company Permits, except where the failure to so
comply does not or would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company. The businesses of the
Company and its subsidiaries are not being conducted in violation of any Law
applicable to the Company or its subsidiaries, except for violations or possible
violations which do not and would not reasonably be expected to have,
individually
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or in the aggregate, a Material Adverse Effect on the Company. To the Company's
knowledge, no investigation or review by any Governmental Entity with respect to
the Company or its subsidiaries is pending or threatened, nor, to the Company's
knowledge, has any Governmental Entity indicated an intention to conduct the
same, other than, in each case, those which do not or would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company.
Section 3.12. Employee Plans. (a) Section 3.12(a) of the Company
Disclosure Schedule lists all material "employee benefit plans," as defined in
Section 3(3) of ERISA, including any "multiemployer plan," as defined in Section
3(37) of ERISA (a "Multiemployer Plan") and all other material employee benefit
plans or other benefit arrangements, including, without regard to materiality,
all executive compensation, directors' benefit, bonus or other incentive
compensation, change in control, severance and deferred compensation plans which
the Company or any of its subsidiaries maintains, contributes to or has any
obligation to or liability for (each a "Company Employee Benefit Plan" and
collectively, the "Company Employee Benefit Plans").
(b) True, correct and complete copies of each Company Employee Benefit
Plan (and, where applicable, the most recent summary plan description, actuarial
report, determination letter, most recent Form 5500 and trust agreement) have
been made available to Parent for review prior to the date hereof.
(c) As of the date hereof, (i) all payments required to be made by or
under any Company Employee Benefit Plan, any related trusts, or any collective
bargaining agreement have been made; (ii) the Company and its subsidiaries have
performed all material obligations required to be performed by them under any
Company Employee Benefit Plan; (ii) the Company Employee Benefit Plans have been
administered in material compliance with their terms and the requirements of
ERISA, the Code and other applicable Laws; (iv) there are no material actions,
suits, arbitrations or claims (other than routine claims for benefit) pending or
threatened with respect to any Company Employee Benefit Plan; and (v) the
Company and its subsidiaries have no material liability as a result of any
"prohibited transaction" (as defined in Section 406 of ERISA and Section 4975 of
the Code) for any excise tax or civil penalty.
(d) None of the Company Employee Benefit Plans is subject to Title IV of
ERISA (the "Company Title IV Plans") and, as of the most recent plan valuation
date, the "accumulated benefit obligations", and the "projected benefit
obligations" of each Company Title IV Plan that is currently sponsored by the
Company or any trades or businesses (whether or not incorporated) which are or
have ever been under common control, or which are or have ever been treated as a
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single employer, with the Company under Section 414(b), (c), (m) or (o) of the
Code (an "ERISA Affiliate") using the actuarial assumptions used by each such
plan's actuary for FAS 87 purposes, does not exceed the fair market value of the
assets of each such Plan.
(e) The Company and its subsidiaries have not incurred any material
withdrawal liability with respect to any Company Benefit Plan which is a
Multiemployer Plan.
(f) Each of the Company Benefit Plans which is intended to be "qualified"
within the meaning of Section 401(a) of the Code has been determined by the
Internal Revenue Service to be so "qualified" and the Company knows of no fact
which would adversely affect the qualified status of any such plan.
(g) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
material payment becoming due, or materially increase the amount of compensation
due, to any current or former employee of the Company or any of its
subsidiaries; (ii) materially increase any benefits otherwise payable under any
Company Employee Benefit Plan; or (iii) result in the acceleration of the time
of payment or vesting of any such material benefits.
Section 3.13. Labor Matters. (a) Section 3.13 of the Company Disclosure
Schedule sets forth a list of all material employment, labor or collective
bargaining agreements to which the Company or any subsidiary of the Company is
party and except as set forth therein, there are no material employment, labor
or collective bargaining agreements which pertain to employees of the Company or
any of its subsidiaries. The Company has heretofore made available to Parent
true and complete copies of the (A) employment agreements listed on Section 3.13
of the Company Disclosure Schedule and the (B) labor or collective bargaining
agreements listed on Section 3.13 of the Company Disclosure Schedule, together
with all amendments, modifications, supplements and side letters affecting the
duties, rights and obligations of any party thereunder.
(b) (i) No employees of the Company or any of its subsidiaries are
represented by any material labor organization; no material labor organization
or group of employees of the Company or any of its subsidiaries has made a
pending written demand for recognition or certification; and, to the Company's
knowledge, there are no material representation or certification proceedings or
petitions seeking a representation proceeding presently pending or threatened in
writing to be brought or filed with the National Labor Relations Board or any
other labor relations tribunal or authority. To the Company's knowledge, there
are no material organizing activities involving the Company or any of its
Subsidiaries
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presently being engaged in by any labor organization or group of employees of
the Company or any of its subsidiaries;
(ii) There are no strikes, work stoppages, unfair labor practice charges,
grievances or complaints pending or threatened in writing by or on behalf of any
employee or group of employees of the Company or any of its Subsidiaries other
than any such charges, grievances or complaints which do not and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company; and
(iii) There are no complaints, charges or claims against the Company or any
of its subsidiaries pending, or threatened in writing to be brought or filed,
with any Governmental Entity or arbitrator based on, arising out of, in
connection with, or otherwise relating to the employment or termination of
employment of any individual by the Company or any of its subsidiaries other
than any such complaints, charges or claims which do not and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company.
(c) The Company and each of its subsidiaries is in compliance with all
Laws relating to the employment of labor, including all such laws and orders
relating to wages, hours, collective bargaining, discrimination, civil rights,
safety and health, workers' compensation and the collection and payment of
withholding and/or Social Security taxes and similar taxes other than any such
non-compliance which does not or would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company.
Section 3.14. Environmental Matters. (a) For purposes of this Agreement:
(i) "Environmental Costs and Liabilities" means any and all losses,
liabilities, obligations, damages (including compensatory, punitive and
consequential damages), fines, penalties, judgments, actions, claims, costs and
expenses (including, without limitation, fees, disbursements and expenses of
legal counsel, experts, engineers and consultants and the costs of investigation
and feasibility studies and cost to clean up, remove, treat, or in any other way
address any Hazardous Materials (as hereinafter defined)) arising from, under or
pursuant to any Environmental Law (as hereinafter defined);
(ii) "Environmental Law" means any applicable federal, state, local or
foreign law (including common law), statute, rule, regulation, ordinance, decree
or other legal requirement relating to the protection of
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natural resources, the environment and public and employee health and safety or
pollution or the release or exposure to Hazardous Materials (as hereinafter
defined) and shall include, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act ("CERCLA") (42 U.S.C. (S) 9601 et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. (S) 1801 et seq.),
the Resource Conservation and Recovery Act (42 U.S.C. (S) 6901 et seq.), the
Clean Water Act (33 U.S.C. (S) 1251 et seq.), the Clean Air Act (33 U.S.C. (S)
7401 et seq.), the Toxic Substances Control Act (15 U.S.C. (S) 7401 et seq.),
the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. (S) 136 et
seq.), and the Occupational Safety and Health Act (29 U.S.C. (S) 651 et seq.)
("OSHA") and the regulations promulgated pursuant thereto, and any such
applicable state or local statutes, and the regulations promulgated pursuant
thereto as such laws have been and may be amended or supplemented through the
Closing Date;
(ii) "Hazardous Material" means any substance, material or waste which is
regulated, classified or otherwise characterized as hazardous, toxic, pollutant,
contaminant or words of similar meaning or regulatory effect by any Governmental
Entity or the United States, and includes, without limitation, petroleum,
petroleum by-products and wastes, asbestos and polychlorinated biphenyls;
(iv) "Release" means any release, spill, effluent, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching, or
migration into the indoor or outdoor environment, or into or out of any property
currently or formerly owned, operated or leased by the applicable party or its
subsidiaries; and
(v) "Remedial Action" means all actions, including, without limitation,
any capital expenditures, required by a Governmental Entity or required under or
taken pursuant to any Environmental Law, or voluntarily undertaken to (A) clean
up, remove, treat, or in any other way, ameliorate or address any Hazardous
Materials or other substance in the indoor or outdoor environment; (B) prevent
the Release or threat of Release, or minimize the further Release of any
Hazardous Material so it does not endanger or threaten to endanger the indoor or
outdoor environment; (C) perform pre-remedial studies and investigations or
post-remedial monitoring and care pertaining or relating to a Release; or (D)
bring the applicable party into compliance with any Environmental Law.
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(b) Except as disclosed in the Company SEC Reports or as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect:
(i) The operations of the Company and its subsidiaries have been and are
in compliance with all Environmental Laws, and the Company is not aware of any
facts, circumstances or conditions, which would prevent compliance in the
future;
(ii) The Company and its subsidiaries have obtained and are in compliance
with all permits, authorizations, licenses or similar approvals required under
applicable Environmental Laws for the operations of their respective businesses;
(iii) The Company and its subsidiaries are not subject to any outstanding
written orders or material contracts with any Governmental Entity or other
person respecting (A) Environmental Laws, (B) Remedial Action or (C) any Release
or threatened Release of a Hazardous Material;
(iv) Neither the Company nor any of its subsidiaries has any actual or
contingent liability , and there are no facts, conditions, situations or set of
circumstances that could reasonably be expected to result in or be the basis for
any such liability in connection with the Release of any Hazardous Material
(whether on-site or off-site) nor have such entities incurred or do such
entities reasonably expect to incur any Environmental Costs and Liabilities;
(v) The operations of the Company or its subsidiaries do not involve the
generation, transportation, treatment, storage or disposal of hazardous waste,
as defined and regulated under 40 C.F.R. Parts 260-270 (in effect as of the date
of this Agreement) or any state equivalent;
(vi) No judicial or administrative proceedings are pending or, to the
Company's knowledge, threatened against the Company or its subsidiaries alleging
the violation of or seeking to impose liability pursuant to any Environmental
Law and no claim, summons or order has been received, no complaint has been
filed, no penalty has been assessed, and no investigations, actions, suits or
proceedings are pending or, to the Company's knowledge, threatened against the
Company or any of its subsidiaries under Environmental Laws; and
(vii) The Company has made available to Parent copies of all
environmentally related assessments, audits, investigations, sampling or
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similar reports of which the Company has knowledge relating to the Company or
its subsidiaries or any real property currently or formerly owned, operated or
leased by or for the Company or its subsidiaries.
Section 3.15. Taxes. Except as disclosed on Section 3.15 of the Company
Disclosure Schedule or except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company:
(a) Each of the Company and each subsidiary has timely filed, or has
caused to be timely filed on its behalf (taking into account any extension of
time within which to file), all Tax Returns required to be filed by it, and all
such filed Tax Returns are true, complete and accurate in all material respects.
All Taxes shown to be due on such Tax Returns, or otherwise required to be paid
by the Company or a subsidiary, have been timely paid.
(b) The most recent financial statements contained in the Company SEC
Reports reflect an adequate reserve for all Taxes payable by the Company and its
subsidiaries for all Taxable periods and portions thereof through the date of
such financial statements. No deficiency with respect to Taxes has been
proposed, asserted or assessed against the Company or any subsidiary.
(c) The Federal income Tax Returns of the Company and each subsidiary have
been examined by and settled with the United States Internal Revenue Service (or
the applicable statue of limitations has expired) for all years through 1990.
All assessments for Taxes due with respect to such completed and settled
examinations or any concluded litigation have been fully paid.
(d) Neither the Company nor any subsidiary has any obligation under any
agreement (either with any person or any taxing authority) with respect to
Taxes.
(e) Neither the Company nor any subsidiary has constituted either a
"distributing corporation" or a "controlled corporation" (within the meaning of
Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying for tax-
free treatment under Section 355 of the Code since the effective date of Section
355(e) of the Code.
(f) Since December 31, 1984, neither the Company nor any subsidiary has
been a member of an affiliated group of corporations within the meaning of
Section 1504 of the Code, other than the affiliated group of which the Company
is the common parent.
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(g) No audit or other administrative or court proceedings are pending with
respect to Federal income or state income or franchise Taxes of the Company or
any subsidiary and no notice thereof has been received. No issue has been raised
by any taxing authority in any presently pending Federal income or state income
or franchise Tax audit that could be material and adverse to the Company or any
subsidiary for any period after the Effective Time.
(h) No claim has been made by a taxing authority in a jurisdiction where
neither the Company nor any subsidiary files state income or franchise Tax
Returns that the Company or any subsidiary is or may be subject to income or
franchise taxation in that jurisdiction.
(i) Neither the Company nor any subsidiary is a party to any contract,
agreement or other arrangement which provides for the payment of any amount
which would not be deductible by reason of Section 162(m) of the Code.
(j) The Company has made available to Parent true and complete copies of
(i) all Federal income Tax Returns of the Company and its subsidiaries for the
preceding three taxable years and (ii) any audit report issued within the last
three years (or otherwise with respect to any audit or proceeding in progress)
relating to Federal income Taxes of the Company or any subsidiary.
(k) Neither the Company nor any subsidiary (or any employee, officer or
director thereof) has taken or agreed to take any action that could reasonably
be expected to give rise to any liability of the Company under Section V of the
Tax Sharing and Indemnification Agreement dated as of November 20, 1996 between
Alco Standard Corporation and the Company.
(l) Other than with respect to Mexico, Canada or any country in which the
Company's international division operates, the Company does not currently have,
and since December 31, 1996 has not had, a permanent establishment in any
foreign country as defined in any applicable tax treaty or convention between
the United States and any such foreign country.
(m) Since December 31, 1996, The Unisource Foundation has filed all
appropriate Tax Returns and such Tax Returns, when filed, were true, complete
and correct in all material respects. Since December 31, 1996, neither The
Unisource Foundation nor any manager thereof has engaged in any acts of self-
dealing as defined in Section 4941 of the Code; provided, however, that it is
acknowledged that The Unisource Foundation has made contributions to
organizations the board of trustees, board of directors or officers of which
included members of the board of trustees, board of directors, contribution
committee members or officers of The Unisource Foundation and such
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contributions shall not, for the purposes of this Section 3.15(m), constitute
self-dealing.
(n) For purposes of this Agreement:
"Taxes" includes all forms of taxation, whenever created or imposed, and
whether of the United States or elsewhere, and whether imposed by a local,
municipal, governmental, state, foreign, Federal or other Governmental Entity,
or in connection with any agreement with respect to Taxes (including, without
limitation, the Tax Sharing and Indemnification Agreement dated as of November
20, 1996, between Alco Standard Corporation and the Company), including all
interest, penalties and additions imposed with respect to such amounts.
"Tax Returns" means all Federal, state, local, provincial and foreign Tax
returns, declarations, statements, reports, schedules, forms and information
returns and any amended Tax return relating to Taxes.
Section 3.16. Material Contracts. All of the material contracts of the
Company and its subsidiaries that are required to be described in the Company
SEC Reports or to be filed as exhibits thereto are described in the Company SEC
Reports or filed as exhibits thereto and are in full force and effect. Neither
the Company nor any of its subsidiaries nor any other party is in breach of or
in default under any such contract, except for such breaches and defaults as
have not had and would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company. No contract exists
which restricts or limits, or purports to restrict or limit, the ability of the
Company or any of its subsidiaries from (i) purchasing from or selling to any
person paper or tissue products or other supplies except for any such contract
that the Company may cancel with not more than 90 days' notice, or (ii)
competing in any line of business or with any person or in any geographic area
or during any period of time.
Section 3.17. Insurance. The insurance policies maintained by the Company
or any of its subsidiaries have been issued by insurers, which, to the Company's
knowledge, are reputable and financially sound, and provide coverage for the
operations conducted by the Company and its subsidiaries of a reasonably prudent
scope and coverage.
Section 3.18. Real Property.
(a) Section 3.18 of the Company Disclosure Schedule sets forth all of the
material real property owned in fee by the Company and its subsidiaries. Each of
the Company and its subsidiaries has good and marketable title to each parcel of
real property owned by it free and clear of all Liens, except (i) taxes and
general
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and special assessments not in default and payable without penalty and interest,
and (ii) other liens, mortgages, pledges, encumbrances and security interests
which do not materially interfere with the Company's or any of its subsidiaries'
use and enjoyment of such real property or materially detract from or diminish
the value thereof.
(b) Section 3.18 of the Company Disclosure Schedule sets forth all
material leases, subleases and other agreements (the "Company Real Property
Leases") under which the Company or any of its subsidiaries uses or occupies or
has the right to use or occupy, now or in the future, any real property. Each
Company Real Property Lease constitutes the valid and legally binding obligation
of the Company or its subsidiaries, enforceable in accordance with its terms
(except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar Laws of general
applicability relating to or affecting creditors' rights or by general equity
principles), and is in full force and effect. The consummation of the
transactions contemplated by this Agreement will not result in any termination
event or condition or default of a material nature on the part of the Company or
any such subsidiary under any Company Real Property Lease.
Section 3.19. Intellectual Property.
(a) The Company and its subsidiaries own or possess adequate licenses or
other valid rights to use all material Intellectual Property used or held for
use in connection with the business of the Company and its subsidiaries as
currently conducted or as contemplated to be conducted.
(b) No current or prior use of any Intellectual Property by the Company
and its subsidiaries infringes on or otherwise violates the rights of any person
and such use is and has been in accordance with all applicable licenses,
pursuant to which the Company or any of its subsidiaries acquired the right to
use such Intellectual Property other than as would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on the
Company.
(c) No Intellectual Property owned/or licensed by the Company or its
subsidiaries is being used or enforced in a manner that would result in the
abandonment, cancellation or unenforceability of such Intellectual Property
other than as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company. For purposes of this
Agreement, "Intellectual Property" means all trademarks, trademark rights, trade
names, trade name rights, trade dress and other indications of origin, brand
names, certification rights, service marks, applications for trademarks and for
service marks, know-how and other proprietary rights and information;
inventions,
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discoveries and ideas, whether patentable or not, in any jurisdiction; patents,
patent rights and trade secrets; writings and other works, whether copyrightable
or not, in any jurisdiction; and any similar intellectual property or
proprietary rights.
Section 3.20. Year 2000. (a) Except as disclosed in the Company SEC
Reports, the Computer Programs (as hereinafter defined), computer firmware,
computer hardware (whether general or special purpose) and other similar or
related items of automated, computerized and/or software system(s) that are used
by the Company or by any of its subsidiaries in the conduct of their respective
businesses will not malfunction, will not cease to function, will not generate
incorrect data, and will not provide incorrect results when processing,
providing, and/or receiving (i) date-related data into and between the twentieth
and twenty-first centuries and (ii) date-related data in connection with any
valid date in the twentieth and twenty-first centuries.
(b) Neither the Company nor any of its subsidiaries has made other
representations or warranties to third parties regarding the ability of any
product or service sold, licensed, rendered or otherwise provided by the Company
or by any of its subsidiaries in the conduct of their respective businesses to
operate without malfunction, to operate without ceasing to function, to generate
correct data and to produce correct results when processing, providing and/or
receiving (i) date-related data into and between the twentieth and twenty-first
centuries and (ii) date-related data in connection with any valid date in the
twentieth and twenty-first centuries. For the purposes of this Agreement,
"Computer Programs" means (i) any and all material computer software programs,
including all source and object code; (ii) material databases and compilations,
including any and all data and collections of data, whether machine readable or
otherwise; (iii) material billing, reporting, and other management information
systems; (iv) all material descriptions, flow-charts and other work product used
to design, plan, organize and develop any of the foregoing; (v) all material
content contained on any Internet site(s); and (vi) all material documentation,
including user manuals and training materials, relating to any of the foregoing.
Section 3.21. Opinion of Financial Advisor. DLJ has delivered to the
Company Board its opinion, dated the date of this Agreement, to the effect that,
as of such date, the Merger Consideration is fair to the holders of Shares from
a financial point of view, and such opinion has not been withdrawn or modified.
Section 3.22. Brokers. No broker, finder or investment banker (other
than DLJ, a true and correct copy of whose engagement agreement has been
provided to Parent) is entitled to any brokerage, finder's or other fee or
commission or expense reimbursement in connection with the transactions
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contemplated by this Agreement based upon arrangements made by and on behalf of
the Company or any of its affiliates.
Section 3.23. Takeover Statute. The Company has taken all action required
to be taken by it in order to exempt this Agreement and the transactions
contemplated hereby from, and this Agreement and the transactions contemplated
hereby (the "Covered Transactions") are exempt from, the requirements of any
"moratorium", "control share", "fair price", "affiliate transaction", "business
combination" or other antitakeover Laws and regulations of any state
(collectively, "Takeover Statutes"), including, without limitation, Section 203
of the DGCL, or any antitakeover provision in the Company's certificate of
incorporation or bylaws. The provisions of Section 203 of DGCL do not apply to
the Covered Transactions as they have been approved by the Company Board.
Section 3.24. Amendment to Rights Agreement. The Company Board has taken
all necessary action (including any amendment thereof) under the Rights
Agreement, dated as of December 30, 1996, between the Company and National City
Bank, as Rights Agent (the "Rights Agreement"), so that none of the execution or
delivery of this Agreement, the purchase of Shares pursuant to the Offer in
accordance with Article 1, the payment of the Merger Consideration in accordance
with Article 2 or any other transaction contemplated hereby will cause (i) the
rights (the "Company Rights") issued pursuant to the Rights Agreement to become
exercisable under the Rights Agreement, (ii) Parent or Purchaser to be deemed an
"Acquiring Person" (as defined in the Rights Agreement), or (iii) the "Stock
Acquisition Date" (as defined in the Rights Agreement) to occur upon any such
event. The Company Board has amended the Rights Agreement in order to provide
that the transactions contemplated by the Agreement and Plan of Merger dated as
of February 28, 1999 among the Company, UGI Corporation and Vulcan Acquisition
Corp. (the "UGI Merger Agreement") are no longer exempt from causing (x) the
Company Rights to become exercisable under the Rights Agreement, (y) UGI
Corporation or Vulcan Acquisition Corp. from being deemed an "Acquiring Person"
or (z) the "Stock Acquisition Date" to occur.
Section 3.25. Break-up Fee. The Company has paid to UGI Corporation an
amount equal to $25,000,000 in consideration of its obligation pursuant to
Section 8.5(b) of the UGI Merger Agreement. The Company has terminated the UGI
Merger Agreement.
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ARTICLE 4
Representations and Warranties of Parent and Purchaser
Except as set forth in the disclosure schedule delivered by Parent to the
Company prior to the execution of this Agreement (the "Parent Disclosure
Schedule") (each section of which qualifies the correspondingly-numbered
representation and warranty or covenant to the extent specified therein), Parent
and Purchaser hereby represent and warrant to the Company as follows:
Section 4.01. Organization and Qualification; Subsidiaries. (a) Parent
and each of its subsidiaries is a corporation or legal entity duly organized,
validly existing and in good standing under the Laws of the jurisdiction of its
incorporation and has all requisite corporate, partnership or similar power and
authority to own, lease and operate its properties and to carry on its
businesses as now conducted and proposed by Parent to be conducted.
(b) Section 4.01 of the Parent Disclosure Schedule identifies all
subsidiaries of Parent.
(c) Each of Parent and its subsidiaries is duly qualified or licensed and
in good standing to do business in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary, except where the failure to be
so duly qualified or licensed and in good standing does not and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Parent.
(d) Parent has heretofore made available to Company accurate and complete
copies of the certificate of incorporation and bylaws or equivalent constituent
documents, as currently in effect, of each of Parent and its subsidiaries which
on the date of determination is a Significant Subsidiary and of Purchaser.
Section 4.02. Authority Relative to this Agreement. Each of Parent and
Purchaser has all necessary corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
boards of directors of Parent and Purchaser and by Parent as the sole
stockholder of Purchaser, and no other corporate proceedings on the part of
Parent or Purchaser are necessary to authorize this Agreement or to consummate
the transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by each of Parent and Purchaser and constitutes a valid,
legal and binding agreement of each of Parent and Purchaser, enforceable against
each of Parent and Purchaser in accordance with its terms, subject to applicable
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bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
Section 4.03. SEC Reports; Financial Statements. (a) Parent has filed all
required forms, reports and documents with the SEC since January 1, 1996, each
of which has complied in all material respects with all applicable requirements
of the Securities Act and the Exchange Act, each as in effect on the dates such
forms, reports and documents were filed. Parent has heretofore made available
to the Company, in the form filed with the SEC (including any amendments
thereto), (i) its Annual Reports on Form 10-K for each of the fiscal years ended
December 31, 1996, 1997 and 1998, (ii) all definitive proxy statements relating
to Parent's meetings of stockholders (whether annual or special) held since
January 1, 1996, and (iii) all other reports or registration statements filed by
Parent with the SEC since January 1, 1996 (the "Parent SEC Reports"). None of
such forms, reports or documents, including, without limitation, any financial
statements or schedules included or incorporated by reference therein,
contained, when filed, any untrue statement of a material fact or omitted to
state a material fact required to be stated or incorporated by reference therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of Parent included in Parent SEC Reports complied as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto and fairly
present, in conformity with GAAP applied on a consistent basis (except as may be
indicated in the notes thereto), the consolidated financial position of Parent
and its consolidated subsidiaries as of the dates thereof and their consolidated
results of operations and changes in financial position for the periods then
ended (subject, in the case of the unaudited interim financial statements, to
normal year-end adjustments).
Section 4.04. No Undisclosed Liabilities. Except as and to the extent
publicly disclosed by Parent in the Parent SEC Reports or as disclosed in
Section 4.05 of the Parent Disclosure Schedule, none of Parent or its
subsidiaries had any liabilities or obligations of any nature, whether or not
accrued, contingent or otherwise, and there is no existing condition, situation
or set of circumstances which would reasonably be expected to result in such a
liability or obligation, other than liabilities or obligations provided for in
the consolidated balance sheet of Parent (including the notes thereto) as of
December 31, 1998, liabilities or obligations under this Agreement and
liabilities or obligations which would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on Parent.
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Section 4.05. Absence of Changes. Except as and to the extent publicly
disclosed in the Parent SEC Reports, since December 31, 1998, Parent and its
subsidiaries have conducted their business in the ordinary and usual course
consistent with past practice and there has not been any event, occurrence or
development which does or would reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect on Parent.
Section 4.06. Information Supplied. None of the information supplied or
to be supplied by Parent or Purchaser for inclusion or incorporation by
reference in (i) the Offer Documents or the Schedule 14D-9 or any amendments or
supplements thereto will, at the time filed with the SEC, at the time mailed to
holders of Shares and at the time of the consummation of the Offer, 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, in light of
the circumstances under which they were made, not misleading and (ii) the Proxy
Statement will, at the date mailed to stockholders and at the time of the
Company Stockholder Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. If at any time prior to the Effective Time any
event with respect to Parent, its officers and directors or any of its
subsidiaries should occur which is required to be described in an amendment of,
or a supplement to, (i) the Proxy Statement or the Schedule 14D-9, Parent shall
promptly so advise the Company and provide to the Company such information as
necessary to allow the Company to prepare such amendment or supplement or (ii)
the Offer Documents, such amendment or supplement (which the Company shall have
a reasonable opportunity to review) shall be promptly filed with the SEC and, as
required by Law, disseminated to the stockholders of the Company. The Offer
Documents and any amendments or supplements thereto, when filed, distributed or
disseminated, as applicable, will comply as to form in all material respects
with the provisions of the Exchange Act and the rules and regulations
thereunder.
Section 4.07. Consents and Approvals; No Violations. Except for filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Securities Act, the Exchange Act, state
securities or blue sky laws, the HSR Act, the filing and recordation of the
Certificate of Merger as required by the DGCL and as otherwise set forth in
Section 4.07 to the Parent Disclosure Schedule, no filing with or notice to, and
no permit, authorization, consent or approval of, any Governmental Entity or
other third party is necessary for the execution and delivery by Parent or
Purchaser of this Agreement or the consummation by Parent or Purchaser of the
transactions contemplated hereby, except where the failure to obtain such
permits, authorizations, consents or approvals or to make such filings or give
such notice
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does not and would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Parent.
Section 4.08. No Default. Neither Parent nor any of its subsidiaries are
in violation of any term of (i) its certificate of incorporation, bylaws or
other organizational documents, (ii) any agreement or instrument related to
indebtedness for borrowed money or any other agreement to which it is a party or
by which it is bound, or (iii) any Law applicable to Parent, its subsidiaries or
any of their respective properties or assets, the consequence of which violation
does or would reasonably be expected to (A) have, in the case of (ii) or (iii)
individually or in the aggregate, a Material Adverse Effect on Parent or (B)
prevent or materially delay the performance of this Agreement by Parent or
Purchaser. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not (i) violate the
certificate of incorporation, bylaws or other organizational documents of Parent
or any of its subsidiaries, (ii) violate or conflict with, constitute a default
under, require any consent, waiver or notice under any term of, or result in the
reduction or loss of any benefit or the creation or acceleration of any right or
obligation under, any agreement, note, bond, mortgage, indenture, contract,
lease, Parent Permit (as hereinafter defined) or other obligation or right to
which Parent or any of its subsidiaries is a party or by which any of the assets
or properties of Parent or any of its subsidiaries is bound, (iii) violate any
applicable Law, or (iv) result in the creation or imposition of any Lien upon
any of the properties or assets of Parent or any of its subsidiaries, except, in
the case of clauses (ii) through (iv) only, where any of the foregoing do not or
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on Parent.
Section 4.09. Litigation. Except as and to the extent publicly disclosed
by Parent in the Parent SEC Reports, there is no suit, claim, action or
proceeding pending or, to Parent's knowledge, threatened, nor to the knowledge
of Parent, is there any investigation pending or threatened, against Parent or
any of its subsidiaries or any of their respective properties or assets which
(a) would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on Parent or (b) as of the date hereof, questions the
validity of this Agreement or any action to be taken by Parent in connection
with the consummation of the transactions contemplated hereby or is reasonably
likely to otherwise prevent or delay the consummation of the transactions
contemplated by this Agreement. Except as and to the extent publicly disclosed
by Parent in the Parent SEC Reports, none of Parent or its subsidiaries is
subject to any outstanding order, writ, injunction or decree which does or would
reasonably be expected to have a Material Adverse Effect on Parent.
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Section 4.10. Compliance With Applicable Law. Parent and its subsidiaries
hold all permits, licenses, variances, exemptions, orders and approvals of all
Governmental Entities necessary for the lawful conduct of their respective
businesses (the "Parent Permits"), except for failures to hold such permits,
licenses, variances, exemptions, orders and approvals which do not or would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Parent. Parent and its subsidiaries are in compliance with the
terms of the Parent Permits, except where the failure so to comply does not or
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on Parent. The businesses of Parent and its
subsidiaries are not being conducted in violation of any Law applicable to
Parent or its subsidiaries except for violations or possible violations which do
not and would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Parent. To the knowledge of Parent, no
investigation or review by any Governmental Entity with respect to Parent or its
subsidiaries is pending or threatened, nor, to Parent's knowledge, has any
Governmental Entity indicated an intention to conduct the same, other than, in
each case, those which do not or would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on Parent.
Section 4.11. Year 2000. (a) Except as disclosed in the Parent SEC
Reports, the Computer Programs, computer firmware, computer hardware (whether
general or special purpose) and other similar or related items of automated,
computerized and/or software system(s) that are used by Parent or by any of its
subsidiaries in the conduct of their respective businesses will not malfunction,
will not cease to function, will not generate incorrect data, and will not
provide incorrect results when processing, providing, and/or receiving (i) date-
related data into and between the twentieth and twenty-first centuries and (ii)
date-related data in connection with any valid date in the twentieth and twenty-
first centuries.
(b) Neither Parent nor any of its subsidiaries has made other
representations or warranties to third parties regarding the ability of any
product or service sold, licensed, rendered or otherwise provided by Parent or
by any of its subsidiaries in the conduct of their respective businesses to
operate without malfunction, to operate without ceasing to function, to generate
correct data and to produce correct results when processing, providing and/or
receiving (i) date-related data into and between the twentieth and twenty-first
centuries and (ii) date-related data in connection with any valid date in the
twentieth and twenty-first centuries.
Section 4.12. No Prior Activities. Except for obligations incurred in
connection with its incorporation or organization or the negotiation and
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consummation of this Agreement and the transactions contemplated hereby,
Purchaser has neither incurred any obligation or liability nor engaged in any
business or activity of any type or kind whatsoever or entered into any
agreement or arrangement with any person.
Section 4.13. Vote Required. No vote of the holders of any class or series
of capital stock of Parent is necessary to approve any of the transactions
contemplated hereby.
Section 4.14. Sufficient Funds. As of the Closing Parent will have
sufficient available funds to pay in cash the Merger Consideration payable by it
pursuant to this Agreement. As of the closing of the Offer, Parent will have
sufficient available funds to pay in cash the amount required to purchase all
Shares validly tendered and not withdrawn.
Section 4.15. Funded Break-up Fee. Parent has paid to the Company,
immediately prior to the execution of this Agreement, an amount equal to
$25,000,000 (the "Funded Break-up Fee") in order to reimburse the Company for
the amount paid by the Company pursuant to Section 8.5(b) of the Agreement and
Plan of Merger dated as of February 28, 1999 among the Company, UGI Corporation
and Vulcan Acquisition Corp.
ARTICLE 5
Covenants Related to Conduct of Business
Section 5.01. Conduct of Business of the Company. Except as contemplated
by this Agreement, during the period from the date hereof to the Effective Time,
the Company covenants and agrees that it will, and will cause each of its
subsidiaries to, conduct its operations in the ordinary and usual course of
business consistent with past practice and, to the extent consistent therewith,
with no less diligence and effort than would be applied in the absence of this
Agreement, seek to preserve intact its current business organizations, seek to
keep available the service of its current officers and employees and seek to
preserve its relationships with customers, suppliers and others having business
dealings with it to the end that goodwill and ongoing businesses shall be
unimpaired at the Effective Time. Without limiting the generality of the
foregoing, and except as otherwise expressly provided in this Agreement or in
the Company Disclosure Schedule, prior to the Effective Time, the Company will
not, nor will any of its subsidiaries, without the prior written consent of
Parent, which consent shall not be unreasonably withheld or delayed:
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(a) amend its certificate of incorporation or bylaws (or other similar
governing instrument) or in the case of the Company amend, modify or terminate
the Rights Agreement;
(b) authorize for issuance, issue, sell, deliver or agree or commit to
issue, sell or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any stock
of any class or any other securities convertible into or exchangeable for any
stock or any equity equivalents (including, without limitation, any stock
options or stock appreciation rights), except (i) for the issuance or sale of
shares pursuant to outstanding stock options as set forth in Section 5.01(b) of
the Company Disclosure Schedule, or (ii) the issuance of other shares of Company
Common Stock upon the exercise of outstanding securities convertible into or
exchangeable for such shares;
(c) (i) split, combine or reclassify any shares of its capital stock, (ii)
declare, set aside or pay any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of its capital stock
except, for the payment of regular quarterly cash dividends with usual record
and payment dates in accordance with past dividend practice, in the case of the
Company not to exceed $.05 per share of Company Common Stock, (iii) make any
other actual, constructive or deemed distribution in respect of any shares of
its capital stock or otherwise make any payments to stockholders in their
capacity as such, or (iv) redeem, repurchase or otherwise acquire any of its
securities or any securities of any of its subsidiaries (including in the case
of the Company redeeming any Rights);
(d) adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization (other
than the Merger);
(e) alter through merger, liquidation, reorganization, restructuring or in
any other fashion the corporate structure or ownership of any subsidiary;
(f) (i) incur or assume any long-term or short-term debt or issue any debt
securities, except for borrowings under existing lines of credit in the ordinary
and usual course of business consistent with past practice; (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other person, except in
the ordinary and usual course of business consistent with past practice and
except for obligations of the wholly owned subsidiaries; (iii) make any loans,
advances or capital contributions to, or investments in, any other person (other
than to its wholly owned subsidiaries or customary loans or advances to
employees in the ordinary
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and usual course of business consistent with past practice and in amounts not
material to the maker of such loan or advance); (iv) pledge or otherwise
encumber shares of its capital stock or its subsidiaries; or (v) mortgage or
pledge any of its material assets, tangible or intangible, or create or suffer
to exist any material Lien thereupon;
(g) except as may be required by law or as contemplated by this Agreement,
enter into, adopt or amend or terminate any bonus, profit sharing, compensation,
severance, termination, stock option stock, appreciation right, performance
unit, stock equivalent, stock purchase agreement, pension, retirement, deferred
compensation, employment, severance or other employee benefit agreement, trust,
plan, fund, award or other arrangement for the benefit or welfare of any
director, officer or employee in any manner, or (except for normal increases in
the ordinary and usual course of business consistent with past practice that, in
the aggregate, do not result in a material increase in benefits or compensation
expense to it, and as required under existing agreements) increase in any manner
the compensation or fringe benefits of any director, officer or employee or pay
any benefit not required by any plan and arrangement as in effect as of the date
hereof (including, without limitation, the granting of stock appreciation rights
or performance units);
(h) acquire, sell, lease or dispose of any assets outside the ordinary and
usual course of business consistent with past practice or any assets which in
the aggregate are material to it and its subsidiaries taken as a whole, enter
into any commitment or transaction outside the ordinary and usual course of
business consistent with past practice or grant any exclusive distribution
rights;
(i) except as may be required as a result of a change in Law or in GAAP,
change any of the accounting principles or practices used by it;
(j) revalue in any material respect any of its assets, including, without
limitation, writing down the value of inventory or writing-off notes or accounts
receivable other than in the ordinary and usual course of business consistent
with past practice or as required by GAAP;
(k) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization or division
thereof or any equity interest therein; (ii) enter into any contract or
agreement, other than in the ordinary and usual course of business consistent
with past practice or amend in any material respect any of the Company Contracts
or the agreements referred to in Section 3.18; (iii) authorize new capital
expenditures not provided for in the Company's annual budget which, in the
aggregate, are in excess of $5,000,000; or (iv) enter into or amend any
contract, agreement,
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commitment or arrangement providing for the taking of any action that would be
prohibited hereunder;
(l) make or revoke any tax election or settle or compromise any tax
liability material to it and its subsidiaries taken as a whole or change (or
make a request to any taxing authority to change) any material aspect of its
method of accounting for tax purposes;
(m) pay, discharge or satisfy any material claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the ordinary
and usual course of business consistent with past practice of liabilities
incurred in the ordinary and usual course of business consistent with past
practice, or waive the benefits of, or agree to modify in any manner, any
confidentiality, standstill or similar agreement to which it or any of its
subsidiaries is a party;
(n) settle or compromise any material pending or threatened suit, action
or claim relating to the transactions contemplated hereby;
(o) enter into any agreement or arrangement that limits or otherwise
restricts it or any of its subsidiaries or any successor thereto or that is
reasonably likely to, after the Effective Time, limit or restrict the Surviving
Corporation and its affiliates (including Parent) or any successor thereto, from
engaging or competing in any line of business or in any geographic area; or
(p) take, propose to take, or agree in writing or otherwise to take, any
of the actions described in Sections 5.01(a) through 5.01(o) or any action which
would make any of its representations or warranties contained in this Agreement
(i) which are qualified as to materiality untrue or incorrect or (ii) which are
not so qualified untrue or incorrect in any material respect.
Section 5.02. Access to Information. (a) Between the date hereof and the
Effective Time, the Company shall give the Parent and Parent's authorized
representatives (including counsel, financial advisors and auditors) reasonable
access during normal business hours to all its and its subsidiaries' employees,
plants, offices, warehouses and other facilities and to all its and its
subsidiaries' books and records and will permit Parent to make such inspections
as Parent may reasonably require and will cause its officers and those of its
subsidiaries to furnish Parent with such financial and operating data and other
information with respect to its business, properties and personnel and its
subsidiaries as Parent may from time to time reasonably request, provided that
no investigation pursuant to this Section 5.02(a) shall affect or be deemed to
modify any of the representations or warranties contained herein.
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(b) Between the date hereof and the Effective Time, the Company shall
furnish to Parent at the earliest time they are available, such quarterly and
annual financial statements as are prepared for its Company SEC Reports which
shall be in accordance with such entity's books and records.
(c) Each of the Company and Parent will hold and will cause its authorized
representatives to hold in confidence all documents and information concerning
the other in connection with the transactions contemplated by this Agreement
pursuant to the terms of that certain Confidentiality Agreement entered into
between the Company and Parent dated May 13, 1999 (the "Confidentiality
Agreement").
ARTICLE 6
Additional Agreements
Section 6.01. Preparation of the Proxy Statement. (a) To the extent
required to effect the Merger, the Company will, as promptly as practicable,
prepare and file with the SEC the Proxy Statement in connection with the Company
Requisite Vote with respect to the Merger. The Company shall use its reasonable
efforts to cause the Proxy Statement to be "cleared" by the SEC for mailing to
the stockholders of the Company as promptly as practicable after the filing
thereof. Parent shall furnish all information concerning it and the holders of
its capital stock as the Company may reasonably request in connection with such
actions. Subject to Section 6.04, the Proxy Statement shall include the
recommendation of the Company Board in favor of approval and adoption of this
Agreement. Parent shall have the right to review the Proxy Statement and
comment thereon before it is filed with the SEC. The Company will use its
reasonable best efforts to cause the Proxy Statement to be mailed to its
stockholders at the earliest practicable date.
(b) Notwithstanding the foregoing, in the event that Purchaser shall
acquire at least 90 percent of the then outstanding Shares, the parties hereto
agree, at the request of Purchaser, subject to Article 7, to take all necessary
and appropriate action to cause the Merger to become effective, in accordance
with Section 253 of the DGCL, as soon as reasonably practicable after such
acquisition, without a meeting of the stockholders of the Company.
Section 6.02. Meetings. To the extent required to effect the Merger, the
Company shall take all lawful action to (i) cause a special meeting of its
stockholders (the "Company Stockholder Meeting") to be duly called and held as
soon as practicable after the closing of the Offer for the purpose of voting on
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the approval and adoption of this Agreement and (ii) solicit proxies from its
stockholders to obtain the Company Requisite Vote for the approval and adoption
of this Agreement. Subject to Section 6.04, the Company Board shall recommend
approval and adoption of this Agreement and the Merger by the Company's
stockholders and shall not withdraw, amend or modify in a manner adverse to
Parent such recommendation (or announce publicly its intention to do so). To
the extent permitted by applicable Law, Parent and Purchaser each agree to vote
all Shares beneficially owned by them in favor of the Merger.
Section 6.03. Reasonable Best Efforts. (a) Subject to the terms and
conditions of this Agreement, each party will use its reasonable best efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable Laws to consummate the
Offer and the Merger and the other transactions contemplated by this Agreement.
In furtherance and not in limitation of the foregoing, each party hereto agrees
to make an appropriate filing of a Notification and Report Form pursuant to the
HSR Act with respect to the transactions contemplated hereby as promptly as
practicable and to supply as promptly as practicable any additional information
and documentary material that may be requested pursuant to the HSR Act and to
take all other actions necessary to cause the expiration or termination of the
applicable waiting periods under the HSR Act as soon as practicable.
(b) Each of Parent and the Company shall, in connection with the efforts
referenced in Section 6.03(a) to obtain all requisite approvals and
authorizations for the transactions contemplated by this Agreement under the HSR
Act or any other Antitrust Law, use its reasonable best efforts to (i) cooperate
in all respects with each other in connection with any filing or submission and
in connection with any investigation or other inquiry, including any proceeding
initiated by a private party; (ii) keep the other party informed in all material
respects of any material communication received by such party from, or given by
such party to, the Federal Trade Commission (the "FTC"), the Antitrust Division
of the Department of Justice (the "DOJ") or any other Governmental Entity and of
any material communication received or given in connection with any proceeding
by a private party, in each case regarding any of the transactions contemplated
hereby; and (iii) permit the other party to review any material communication
given by it to, and consult with each other in advance of any meeting or
conference with, the FTC, the DOJ or any such other Governmental Entity or, in
connection with any proceeding by a private party, with any other person, and to
the extent permitted by the FTC, the DOJ or such other applicable Governmental
Entity or other person, give the other party the opportunity to attend and
participate in such meetings and conferences. For purposes of this Agreement,
"Antitrust Law" means the Sherman Act, as amended, the Clayton Act, as amended,
the HSR Act, the Federal Trade Commission Act, as amended, and all other Laws
that are
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designed or intended to prohibit, restrict or regulate actions having the
purpose or effect of monopolization or restraint of trade or lessening of
competition through merger or acquisition.
(c) In furtherance and not in limitation of the covenants of the parties
contained in Sections 6.03(a) and (b), each of Parent and the Company shall use
its reasonable best efforts to resolve such objections, if any, as may be
asserted with respect to the transactions contemplated hereby under any
Antitrust Law. In connection with the foregoing, if any administrative or
judicial action or proceeding, including any proceeding by a private party, is
instituted (or threatened to be instituted) challenging any transaction
contemplated by this Agreement as violative of any Antitrust Law, each of Parent
and the Company shall cooperate in all respects with each other and use its
respective reasonable best efforts to contest and resist any such action or
proceeding and to have vacated, lifted, reversed or overturned any decree,
judgment, injunction or other order, whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents or restricts
consummation of the transactions contemplated by this Agreement. Notwithstanding
the foregoing or any other provision of this Agreement, nothing in this Section
6.03 shall (i) limit a party's right to terminate this Agreement pursuant to
Section 8.02(i) so long as such party has up to then complied in all material
respects with its obligations under this Section 6.03 or (ii) require Parent or
the Company to dispose or hold separate any part of its business or operations
or agree not to compete in any geographic area or line of business.
Section 6.04. Acquisition Proposals. (a) From the date hereof until the
Effective Time and except as expressly permitted by the following provisions of
this Section 6.04, the Company will not, nor will it permit any of its
subsidiaries to, nor will it authorize or permit any of its officers, directors
or employees of or any investment banker, attorneys, accountants or other
advisors or representatives to, directly or indirectly, (i) solicit, initiate or
knowingly encourage the submission of any Acquisition Proposal (as hereinafter
defined) or (ii) participate in any discussions or negotiations regarding, or
furnish to any person any information with respect to, or take any other action
to facilitate, any Acquisition Proposal or any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal; provided, however, that nothing contained in this Section
6.04(a) shall prohibit the Company Board from furnishing information to, or
entering into discussions or negotiations with, any person that makes an
unsolicited bona fide written Acquisition Proposal if, and only to the extent
that (A) the Offer shall not have closed, (B) the Company Board, after
consultation with and based upon the advice of independent legal counsel,
determines in good faith that such action is necessary for the Company Board to
comply with its fiduciary duties to its stockholders under applicable Law, (C)
the Company Board, after consultation with its financial advisor, determines in
good
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faith that such Acquisition Proposal is reasonably likely to lead to an
Acquisition Proposal that, if accepted, is reasonably likely to be consummated,
taking into account all legal, financial and regulatory aspects of the proposal
and the person making the proposal and would, if consummated, result in a
transaction more favorable to its stockholders from a financial point of view
than the Offer and the Merger (any such more favorable Acquisition Proposal
being referred to herein as a "Superior Proposal") and (D) prior to taking such
action, the Company (x) provides reasonable notice to Parent to the effect that
it is taking such action and (y) receives from such person an executed
confidentiality/ standstill agreement in reasonably customary form and in any
event containing terms at least as stringent as those contained in the
Confidentiality Agreement. Prior to providing any information to or entering
into discussions or negotiations with any person in connection with an
Acquisition Proposal by such person, the Company shall notify Parent of any
Acquisition Proposal (including, without limitation, the material terms and
conditions thereof and the identity of the person making it) as promptly as
practicable (but in no case later than 24 hours) after its receipt thereof,
shall thereafter inform Parent on a prompt basis of the status of any
discussions or negotiations with such a third party and any material changes to
the terms and conditions of such Acquisition Proposal and shall promptly give
Parent a copy of any information delivered to such person which has not
previously been reviewed by Parent. Immediately after the execution and delivery
of this Agreement, the Company will, and will cause its subsidiaries,
affiliates, officers, directors, employees, investment bankers, attorneys,
accountants and other agents to, cease and terminate any existing activities,
discussions or negotiations with any third parties conducted heretofore with
respect to any possible Acquisition Proposal and shall notify each third party
that it, or any officer, director, investment advisor, financial advisor,
attorney or other representative retained by it, has had discussions with during
the 30 days prior to the date of this Agreement that the Company Board no longer
seeks the making of any Acquisition Proposal. The Company will take the
necessary steps to promptly inform the individuals or entities referred to in
the first sentence hereof of the obligations undertaken in this Section 6.04(a).
(b) The Company Board will not withdraw or modify, or propose to withdraw
or modify, in a manner adverse to Parent, its approval or recommendation of this
Agreement, the Offer or the Merger unless the Company Board determines in good
faith, taking into account all legal, financial and regulatory aspects, that the
failure to do so would constitute a breach by the Company Board of its fiduciary
duties under applicable Law; provided, however, the Company Board may not
approve or recommend (and in connection therewith, withdraw or modify its
approval or recommendation of this Agreement, the Offer or the Merger) an
Acquisition Proposal unless such an Acquisition Proposal is a Superior Proposal
(and the Company first shall have complied with its obligations
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set forth in Section 8.03(a), and the time period referred to in the last
sentence of Section 8.03(a) has expired) and unless it shall have first
consulted with outside counsel and have determined that the refusal to do so
would constitute a breach by the Company Board of its fiduciary duties under
applicable Law. Nothing contained in this Section 6.04(b) shall prohibit the
Company from taking and disclosing to its stockholders a position contemplated
by Rule 14e-2(a) promulgated under the Exchange Act or from making any
disclosure to its stockholders which, in the good faith reasonable judgment of
the Company Board, based on the advice of independent legal counsel, is required
under applicable Law. Notwithstanding anything contained in this Agreement to
the contrary, any action by the Company Board permitted by, and taken in
accordance with, this Section 6.04(b) shall not constitute a breach of this
Agreement by the Company. Nothing in this Section 6.04(b) shall (i) permit the
Company to terminate this Agreement (except as provided in Article 8 hereof) or
(ii) affect any other obligations of the Company under this Agreement.
Section 6.05. Public Announcements. Each of Parent, Purchaser and the
Company will consult with one another before issuing any press release or
otherwise making any public statements with respect to the transactions
contemplated by this Agreement, including the Offer and the Merger, and shall
not issue any such press release or make any such public statement prior to such
consultation, except as may be required by applicable Law or by obligations
pursuant to any listing agreement with any securities exchange, as determined by
Parent, Purchaser or the Company, as the case may be.
Section 6.06. Indemnification; Directors' and Officers' Insurance. (a)
From and after the Effective Time, to the fullest extent permitted by applicable
Law, the Surviving Corporation shall, and Parent shall cause the Surviving
Corporation to, indemnify, defend and hold harmless each person who is now, or
has been at any time prior to the date hereof, or who becomes prior to the
Effective Time, a director, officer or employee of the Company or any subsidiary
thereof (each an "Indemnified Party" and, collectively, the "Indemnified
Parties") against all losses, expenses (including reasonable attorneys' fees and
expenses), claims, damages, liabilities or, subject to the proviso of the next
succeeding sentence, amounts paid in settlement, arising out of actions or
omissions occurring at or prior to the Effective Time and whether asserted or
claimed prior to, at or after the Effective Time that are in whole or in part
(i) based on or arising out of the fact that such person is or was a director,
officer or employee of such party or a subsidiary of such party or (ii) based
on, arising out of or pertaining to the transactions contemplated by this
Agreement. In the event of any such loss, expense, claim, damage or liability
(whether or not arising before the Effective Time), (i) the Surviving
Corporation shall pay the reasonable fees and expenses of counsel selected by
the Indemnified Parties, which counsel shall be
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reasonably satisfactory to Parent, promptly after statements therefor are
received and otherwise advance to such Indemnified Party upon request
reimbursement of documented expenses reasonably incurred, in either case to the
extent not prohibited by the DGCL and upon receipt of any affirmation and
undertaking required by the DGCL, (ii) the Surviving Corporation will cooperate
in the defense of any such matter and (iii) any determination required to be
made with respect to whether an Indemnified Party's conduct complies with the
standards set forth under the DGCL and the Surviving Corporation's articles of
incorporation or bylaws shall be made by independent counsel mutually acceptable
to Parent and the Indemnified Party; provided, however, that the Surviving
Corporation shall not be liable for any settlement effected without its written
consent (which consent shall not be unreasonably withheld). The Indemnified
Parties as a group may retain only one law firm with respect to each related
matter except to the extent there is, in the opinion of counsel to an
Indemnified Party, under applicable standards of professional conduct, a
conflict on any significant issue between positions of any two or more
Indemnified Parties.
(b) For a period of 6 years after the Effective Time, Parent shall cause
to be maintained in effect the policies of directors' and officers' liability
insurance maintained by the Company for the benefit of those persons who are
covered by such policies at the Effective Time (or Parent may substitute
therefor policies of at least the same coverage with respect to matters
occurring prior to the Effective Time), to the extent that such liability
insurance can be maintained or obtained annually at a cost to Parent not greater
than 200 percent of the premium for the current Company directors' and officers'
liability insurance; provided that if such insurance cannot be so maintained or
obtained at such cost, Parent shall maintain or obtain as much of such insurance
as can be so maintained or obtained at a cost equal to 200 percent of the
current annual premiums of the Company for such insurance.
(c) In the event Parent or any of its successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfers all or substantially all of its properties and assets to any
person, then and in either such case, proper provision shall be made so that the
successors and assigns of Parent shall assume the obligations set for in this
Section 6.06.
(d) In addition to the indemnification provided pursuant to Section
6.06(a), to the fullest extent permitted by Law, from and after the Effective
Time, all rights to indemnification now existing in favor of the employees,
agents, directors or officers of the Company and its subsidiaries with respect
to their activities as such prior to the Effective Time, as provided in the
Company's certificate of incorporation or bylaws, in effect on the date hereof,
shall
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survive the Merger and shall continue in full force and effect for a period of
not less than six years from the Effective Time.
(e) The provisions of this Section 6.06 are intended to be for the benefit
of, and shall be enforceable by, each Indemnified Party, his or her heirs and
his or her representatives.
Section 6.07. Notification of Certain Matters. The Company shall give
prompt notice to Parent and Purchaser, and Parent and Purchaser shall give
prompt notice to the Company, of (i) the occurrence or nonoccurrence of any
event the occurrence or nonoccurrence of which would be likely to cause any
representation or warranty contained in this Agreement, which is qualified as to
materiality, to be untrue or inaccurate, or any representation or warranty not
so qualified, to be untrue or inaccurate in any material respect at or prior to
the closing of the Offer, (ii) any material failure of the Company, Parent or
Purchaser, as the case may be, to comply with or satisfy any covenant, condition
or agreement to be complied with or satisfied by it hereunder, (iii) any notice
of, or other communication relating to, a default or event which, with notice or
lapse of time or both, would become a default, received by it or any of its
subsidiaries subsequent to the date of this Agreement and prior to the Effective
Time under any contract or agreement to which it or any of its subsidiaries is a
party or is subject material to the financial condition, business or results of
operations of it and its subsidiaries, taken as a whole, (iv) any notice or
other communication from any third party alleging that the consent of such third
party is or may be required in connection with the transactions contemplated by
this Agreement, or (v) any Material Adverse Effect with respect to such party;
provided, however, that the delivery of any notice pursuant to this Section 6.07
shall not cure such breach or non-compliance or limit or otherwise affect the
remedies available hereunder to the party receiving such notice.
Section 6.08. Employee Matters. Parent shall cause the Surviving
Corporation to honor the obligations of the Company or any of its subsidiaries
under the provisions of all collective bargaining, employment, consulting,
termination, severance, change in control and indemnification agreements between
and among the Company or any of its subsidiaries and any current or former
officer, director, consultant or employee of the Company or any of its
subsidiaries as set forth in the appropriate Sections of the Company Disclosure
Schedule. For a period of six months following the Effective Time, Parent
agrees that it will maintain, or will cause the Surviving Corporation and its
subsidiaries to maintain, for the benefit of the employees of the Company and
any of its subsidiaries following the Effective Time compensation and benefit
plans, programs, arrangements and policies (other than equity based compensation
plans, programs, arrangements and policies) as will provide compensation and
benefits which in the
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aggregate are not materially less favorable than those provided to such
employees as of the date hereof under the Company Employee Benefit Plans (other
than such equity based compensation plans, programs, arrangement and policies)
in accordance with their written terms (except as set forth on Sections 3.12 and
5.01 of the Company Disclosure Schedule with respect to acceleration of options
on termination of employment by the Company) as made available to Parent and
without regard to formal or informal discretionary provisions; provided,
however, the equity match in the Company's Retirement Savings Plan (the "RSP")
shall be continued during such period substituting a cash contribution in lieu
of Company Common Stock unless, at the discretion of Parent, Parent elects to
substitute common stock of Parent. In the event that after the Effective Time
the employment of any participant in the RSP at the Effective Time is terminated
by the Company other than for Cause, such participant shall be 100% vested in
any RSP matching contributions made by the Company on behalf of such participant
or, at Parent's option, to the extent necessary to avoid adversely effecting the
qualified status of the RSP under the Code, will receive a cash payment in an
amount equal to any forfeited matching contributions under the RSP. Parent shall
pay to the individuals listed on Section 6.08 of the Company Disclosure Schedule
the amounts identified as targeted 1999 ICP bonus amounts opposite each such
name in accordance with the payment schedule under the ICP.
Section 6.09. Post-Merger Board of Directors. (a) Promptly upon the
purchase by Purchaser of Shares pursuant to the Offer, and from time to time
thereafter, Purchaser shall be entitled to designate up to such number of
directors, rounded up to the next whole number, on the Company Board as shall
give Purchaser representation on the Company Board equal to the product of the
total number of directors on the Company Board (giving effect to the directors
elected pursuant to this sentence) multiplied by the percentage that the
aggregate number of Shares beneficially owned by Purchaser following such
purchase bears to the total number of Shares then outstanding, and the Company
shall, at such time, promptly take all actions necessary to cause Purchaser's
designees to be elected as directors of the Company, including increasing the
size of the Company Board or securing the resignations of incumbent directors or
both. At such times, the Company shall use its best efforts to cause persons
designated by Purchaser to constitute the same percentage as persons designated
by Purchaser shall constitute of the Company Board of (i) each committee of the
Company Board, (ii) each board of directors of each domestic subsidiary and
(iii) each committee of each such board, in each case only to the extent
permitted by applicable law. Notwithstanding the foregoing, until the Effective
Time, the Company shall use its best efforts to ensure that (a) at least two
members of the Company Board and (b) at least one member of each committee of
the Company Board and the boards and committees of the Company's domestic
subsidiaries who, as of the date hereof,
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neither were designated by Purchaser nor are employees of the Company remain
members of the Company Board and of such boards and committees.
(b) The Company shall promptly take all actions required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order
to fulfill its obligations under this Section 609 and shall include in the
Schedule 14D-9 such information with respect to the Company and its officers and
directors as is required under Section 14(f) and Rule 14f-1 to fulfill such
obligations. Parent or Purchaser shall supply to the Company and be solely
responsible for any information with respect to either of them and their
nominees, officers, directors and affiliates required by such Section 14(f) and
Rule 14f-1.
(c) Following the designation of designees of Purchaser pursuant to this
Section 609 and notwithstanding any other provision of this Agreement, prior to
the Effective Time, any amendment of this Agreement or the Certificate of
Incorporation or Bylaws of the Company, any termination of this Agreement by the
Company, any extension by the Company of the time for the performance of any of
the obligations or other acts of Parent or Purchaser or waiver of any of the
Company's rights hereunder shall require the concurrence of a majority of the
directors of the Company then in office who neither were designated by Purchaser
nor are employees of the Company.
Section 6.10. Fees and Expenses. Whether or not the Offer or the Merger
is consummated, all Expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
Expenses, except (a) Expenses incurred in connection with the filing, printing
and mailing of the Schedule 14D-9 and the Proxy Statement, which shall be paid
by Parent and (b) if applicable, as provided in Section 8.05. As used in this
Agreement, "Expenses" includes all out-of-pocket expenses (including all fees
and expenses of counsel, accountants, investment bankers, experts and
consultants to a party hereto and its affiliates) incurred by a party or on its
behalf in connection with or related to the authorization, preparation,
negotiation, execution and performance of this Agreement and the transactions
contemplated hereby, including the preparation, printing, filing and mailing of
the Schedule 14D-9, the Offer Documents and the Proxy Statement and any
amendments or supplements thereto, as appropriate, and the solicitation of
stockholder approval and all other matters related to the transactions
contemplated hereby.
Section 6.11. Obligations of Purchaser. Parent will take all action
necessary to cause Purchaser to perform its obligations under this Agreement and
to consummate the Offer and the Merger on the terms and conditions set forth in
this Agreement.
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Section 6.12. Antitakeover Statutes. If any Takeover Statute is or may
become applicable to the Offer or the Merger, each of Parent and Company shall
take such actions as are necessary so that the transactions contemplated by this
Agreement may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise act to eliminate or minimize the effects of
any Takeover Statute on the Offer or the Merger.
Section 6.13. The Unisource Foundation. Parent agrees that it shall (a)
honor all commitments made by the Company to The Unisource Foundation as of the
date of this Agreement and (b) cause The Unisource Foundation to continue its
charitable programs existing on the date of this Agreement for a period of three
years following the Closing.
ARTICLE 7
Conditions to Consummation of the Merger
Section 7.01. Conditions to Each Party's Obligations to Effect the Merger.
The respective obligations of each party to consummate the transactions
contemplated by this Agreement are subject to the fulfillment at or prior to the
Effective Time of each of the following conditions, any or all of which may be
waived in whole or in part by the party being benefitted thereby, to the extent
permitted by applicable Law:
(a) To the extent required by applicable Law, this Agreement shall have
been approved and adopted by the Company Requisite Vote at the Company
Stockholder Meeting.
(b) Any waiting period applicable to the Merger under the HSR Act shall
have expired or early termination thereof shall have been granted.
(c) There shall not be in effect any Law of any Governmental Entity of
competent jurisdiction, restraining, enjoining or otherwise preventing
consummation of the transactions contemplated by this Agreement.
(d) Purchaser or its permitted assignee shall have purchased all Shares
validly tendered and not withdrawn pursuant to the Offer; provided, however,
that this condition shall not be applicable to the obligations of Parent or
Purchaser if, in breach of this Agreement or the terms of the Offer, Purchaser
fails to purchase any Shares validly tendered and not withdrawn pursuant to the
Offer.
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ARTICLE 8
Termination; Amendment; Waiver
Section 8.01. Termination by Mutual Agreement. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time, whether before or after the approval of this Agreement by the Company
Requisite Vote, if required, by mutual written consent of the Company and Parent
by action of their respective Boards of Directors.
Section 8.02. Termination by Either Parent or the Company. This Agreement
may be terminated and the Merger may be abandoned at any time prior to the
Effective Time by action of either the Parent Board or the Company Board if (i)
the Merger shall not have been consummated by December 31, 1999 (the
"Termination Date"), whether such date is before or after the date of approval
of this Agreement by the Company Requisite Vote, if required; (ii) the Company's
stockholders shall have rejected the Merger and the Merger Agreement at the
Company Stockholder Meeting, if required, or at any adjournment or postponement
thereof; or (iii) any Law permanently restraining, enjoining or otherwise
prohibiting consummation of the Merger shall become final and non-appealable
(whether before or after the approval by the Company Requisite Vote, if
required); provided that the right to terminate this Agreement pursuant to this
Section 802 shall not be available to any party that has breached in any
material respect its obligations under this Agreement in any manner that shall
have proximately contributed to the occurrence of the failure of the Merger to
be consummated.
Section 8.03. Termination by the Company. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the acceptance
of Shares for payment pursuant to the Offer (or, if the Offer has been
terminated and this Agreement remains in effect, prior to the approval of this
Agreement by the Company Requisite Vote), by action of the Company Board:
(a) If (i) the Company is not in breach of Section 604, (ii) the Shares
have not been accepted for payment pursuant to the Offer (or, if the Offer has
been terminated and this Agreement remains in effect, this Agreement has not
been approved by the Company Requisite Vote at the Company Stockholder Meeting),
(iii) the Company Board authorizes the Company, subject to complying with the
terms of this Agreement, to enter into a binding written agreement concerning a
transaction that constitutes a Superior Proposal and the Company notifies Parent
in writing that it intends to enter into such an agreement, attaching the most
current version of such agreement to such notice, (iv) Parent does not make,
within five business days of receipt of the Company's written notification of
its intention to enter into a binding agreement for a Superior Proposal, an
offer that
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the Company Board determines, in good faith after consultation with its
financial advisors, is at least as favorable, from a financial point of view, to
the stockholders of the Company as the Superior Proposal and (v) the Company
prior to such termination pays to Parent in immediately available funds the fees
required to be paid pursuant to Section 805. The Company agrees (x) that it will
not enter into a binding agreement referred to in clause (iii) above until at
least the sixth business day after it has provided the notice to Parent required
thereby and (y) to notify Parent promptly if its intention to enter into the
written agreement referred to in its notification shall change at any time after
giving such notification; or
(b) If (i) Purchaser shall not have accepted for payment any Shares
pursuant to the Offer within 120 days following commencement of the Offer or
(ii) Purchaser shall have failed to commence the Offer within 60 days following
the date of this Agreement, unless such failure to accept for payment or
commence shall have been caused by or resulted from the failure of the Company
to perform in any material respect any of its covenants or agreements contained
in this Agreement or the material breach by the Company of any of its
representations or warranties contained in this Agreement.
Section 8.04. Termination by Parent. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the acceptance of Shares
for payment pursuant to the Offer (or, if the Offer has been terminated and this
Agreement remains in effect, prior to approval of this Agreement by the Company
Requisite Vote), by action of the Parent Board if:
(a) the Company enters into a binding agreement for a Superior Proposal or
prior to the acceptance of Shares for payment pursuant to the Offer (or, if the
Offer is terminated and this Agreement remains in effect, prior to the approval
of this Agreement by the Company Requisite Vote) the Company Board shall have
withdrawn or adversely modified its approval or recommendation of this
Agreement, the Offer or the Merger; or
(b) If (i) Purchaser shall not have accepted for payment any Shares
pursuant to the Offer within 120 days following commencement of the Offer or
(ii) Purchaser shall have failed to commence the Offer within 60 days following
the date of this Agreement, unless such failure to accept for payment or
commence shall have been caused by or resulted from the failure of Parent or
Purchaser to perform in any material respect any of their covenants or
agreements contained in this Agreement or the material breach by Parent or
Purchaser of any of their representations or warranties contained in this
Agreement.
Section 8.05. Effect of Termination and Abandonment. (a) In the event of
termination of this Agreement pursuant to this Article 8, this Agreement (other
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than as set forth in this Section 8.05 or Sections 5.02(c), 6.10, 9.04, 9.08 and
9.09) shall become void and of no effect with no liability on the part of any
party hereto (or of any of its directors, officers, employees, agents, legal and
financial advisors or other representatives); provided, however, that no such
termination shall relieve any party hereto of any liability or damages resulting
from any willful breach of this Agreement.
(b) (i) In the event that this Agreement is terminated by Parent pursuant
to Section 8.04(b) as the result of a failure of performance or breach of the
Company, then the Company shall pay Parent an amount, not to exceed $5,000,000,
equal to the documented Expenses incurred by Parent in connection with this
Agreement.
(ii) In the event that this Agreement is terminated pursuant to the
provisions hereof by either Parent or the Company for any reason, other than
a termination pursuant to (x) Section 8.01, (y) Section 8.02 where the
termination did not result from a failure of performance or breach by the
Company or (z) Section 8.03(b) or 8.04(b) where the termination did not
result from a failure to satisfy the conditions specified in paragraphs (a)
through (g) of Annex A (unless, in the case of paragraphs (a) and (b) of
Annex A, such termination resulted from the actions of any antitrust
regulatory authority or, in the case of paragraph (d), such termination
resulted from the occurrence of an event specified in clause (iv) thereof),
the Company shall pay Parent, prior to such termination if termination is by
the Company and within two business days after such termination if
termination is by Parent, by wire transfer of immediately available funds,
an amount equal to $25,000,000 in order to reimburse Parent for the payment
of the Funded Break-up Fee.
(iii) In the event that this Agreement is terminated by (A) the Company
pursuant to Section 8.03(a), (B) Parent pursuant to Section 8.04(a) or
(C)(1) Parent pursuant to Section 8.04(b) as a result of a willful failure
or breach by the Company and (2) at the time of such willful failure or
breach there shall have been an Acquisition Proposal involving the Company
(which proposal shall not have been withdrawn prior to the time of such
termination) and (3) within 6 months of such termination, an Acquisition
Proposal by a third party, or within 9 months of such termination, an
Acquisition Proposal by the party that made the Acquisition Proposal
referred to in clause (C)(2) of this Section 8.05(b)(iii) is entered into,
agreed to or consummated by the Company, in addition to any amount to be
paid by the Company to Parent pursuant to Section 8.05(b)(ii), the Company
shall pay to Parent a termination fee of $25,000,000 by wire transfer of
immediately available funds; such
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termination fee to be paid to Parent (x) prior to termination of this
Agreement by the Company in the case of clause (A) of this Section
8.05(b)(iii), (y) within two business days after termination by Parent in
the case of clause (B) of this Section 8.05(b)(iii) or (z) on the earlier
of the date an agreement is entered into with respect to an Acquisition
Proposal or an Acquisition Proposal is agreed and consummated in the case
of clause (C) of this Section 8.05(b)(iii).
(iv) In the event that (A) this Agreement is terminated by Parent or the
Company pursuant to Section 8.02(ii) or by Parent pursuant to Section
8.04(b) as a result of the failure to satisfy the Minimum Condition, (B) at
the time of such termination there shall have been an Acquisition Proposal
involving the Company (which proposal shall not have been withdrawn prior
to the time of such termination) and (C) within 6 months of such
termination, an Acquisition Proposal by a third party, or within 9 months
of such termination, any Acquisition Proposal by the party that made the
Acquisition Proposal referred to above in clause (B) of this Section
8.05(b)(iv) is entered into, agreed to or consummated by the Company, in
addition to any amount to be paid by the Company to Parent pursuant to
Section 8.05(b)(ii), the Company shall pay to Parent a termination fee of
$25,000,000 by wire transfer of immediately available funds on the earlier
of the date an agreement is entered into with respect to an Acquisition
Proposal or an Acquisition Proposal is agreed and consummated.
(c) (i) In the event that this Agreement is terminated by the Company
pursuant to Section 8.03(b) as the result of the failure of performance or
breach of Parent, then Parent shall pay the Company an amount not to exceed
$5,000,000 equal to the documented Expenses incurred by the Company in
connection with this Agreement.
(ii) In the event that (A) this Agreement is terminated pursuant to
Section 8.03(b) as a result of a willful failure or breach by Parent or
Purchaser and (B) at the time of such willful failure or breach there shall
have been a Parent Acquisition Proposal (which Parent Acquisition Proposal
shall have been conditioned upon the Offer or the Merger failing to close)
and (C) within 6 months of such termination, a Parent Acquisition Proposal
by a third party, or within 9 months of such termination, a Parent
Acquisition Proposal by the party that made the Parent Acquisition Proposal
referred to in clause (B) of this Section 8.05(c)(ii) is entered into,
agreed to or consummated by Parent, then Parent shall pay the Company a
termination fee of $25,000,000, in immediately available funds on the
earlier of the date an agreement is entered into with respect to a Parent
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Acquisition Proposal or a Parent Acquisition Proposal is agreed to or
consummated.
(d) The Company and Parent each acknowledge that the agreements contained
in Sections 8.05(b) and 8.05(c) are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, the Company,
Parent and Purchaser would not have entered into this Agreement; accordingly, if
either the Company or Parent, as the case may be, fails to promptly pay any
amount due pursuant to Section 8.05(b) or 8.05(c), as the case may be, and, in
order to obtain such payment, the other party commences a suit which results in
a judgment against the defaulting party for any amount required to be paid
pursuant to this Section 805, the defaulting party shall pay the other party its
costs and expenses (including attorneys' fees) in connection with such suit,
together with interest from the date of termination of this Agreement on the
amount owed at the prime rate of Morgan Guaranty Trust Company of New York in
effect from time to time during such period plus two percent.
(e) Notwithstanding anything to the contrary set forth in this Section
805, in no event shall the Expenses or termination fees paid pursuant to this
Section 805 (exclusive of any payment owed pursuant to Section 8.05(b)(ii))
exceed $25,000,000 in the aggregate.
Section 8.06. Amendment. This Agreement may be amended by action taken by
the Company, Parent and Purchaser at any time before or after approval of the
Merger by the Company Requisite Vote but, after any such approval, no amendment
shall be made which requires the approval of such stockholders under applicable
Law without such approval. This Agreement may not be amended except by an
instrument in writing signed on behalf of the parties hereto.
Section 8.07. Extension; Waiver. At any time prior to the Effective Time,
each party hereto (for these purposes, Parent and Purchaser shall together be
deemed one party and the Company shall be deemed the other party) may (i) extend
the time for the performance of any of the obligations or other acts of the
other party, (ii) waive any inaccuracies in the representations and warranties
of the other party contained herein or in any document, certificate or writing
delivered pursuant hereto or (iii) waive compliance by the other party with any
of the agreements or conditions contained herein. Any agreement on the part of
either party hereto to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party. The failure
of either party hereto to assert any of its rights hereunder shall not
constitute a waiver of such rights.
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ARTICLE 9
Miscellaneous
Section 9.01. Nonsurvival of Representations and Warranties. None of the
representations, warranties, covenants and agreements in this Agreement or in
any exhibit, schedule or instrument delivered pursuant to this Agreement shall
survive beyond the Effective Time or, in the case of the Company, shall survive
the acceptance for payment of, and payment for, Shares by Purchaser pursuant to
the Offer. Notwithstanding the foregoing, this Section 9.01 shall not limit any
covenant or agreement of Parent or Purchaser which by its terms contemplates
performance after the Effective Time.
Section 9.02. Entire Agreement; Assignment. (a) This Agreement and the
Confidentiality Agreement constitute the entire agreement between the parties
hereto with respect to the subject matter hereof and supersede all other prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof.
(b) Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by operation of law (including, but not limited to,
by merger or consolidation) or otherwise; provided, however, that Purchaser may
assign, in its sole discretion, any or all of its rights, interests and
obligations under this Agreement to any direct wholly owned subsidiary of
Parent, but no such assignment shall relieve Parent or Purchaser of its
obligations hereunder if such assignee does not perform such obligations. Any
assignment in violation of the preceding sentence shall be void. 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.
Section 9.03. Notices. All notices, requests, instructions or other
documents to be given under this Agreement shall be in writing and shall be
deemed given, (i) five business days following sending by registered or
certified mail, postage prepaid, (ii) when sent, if sent by facsimile; provided
that the fax is promptly confirmed by telephone confirmation thereof, (iii) when
delivered, if delivered personally to the intended recipient and (iv) one
business day following sending by overnight delivery via a national courier
service, and in each case, addressed to a party at the following address for
such party:
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if to Parent or to Purchaser, to:
Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, GA 30303
Attention: Chairman and Chief Executive Officer
Facsimile: (404) 230-1674
with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, NY 10022
Attention: Creighton Condon, Esq.
Facsimile: (212) 848-7179
if to the Company, to:
Unisource Worldwide
1100 Cassat Road
Berwyn, PA 19312
Attention: President
Facsimile: (610) 296-4470
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Attention: Carole Schiffman, Esq.
Facsimile: (212) 450-4800
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above.
Section 9.04. Governing Law; Waiver of Jury Trial. (a) This Agreement
shall be governed by and construed in accordance with the Laws of the State of
New York, applicable to contracts executed in and to be fully performed in such
state, without giving effect to the choice of law principles thereof, and except
to the extent the provisions of this Agreement (including any documents or
instruments referred to herein) are expressly governed by the DGCL.
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(b) Each of the parties hereto hereby waives any right to trial by jury in
any action or proceeding in connection with this Agreement or any transaction
relating hereto.
Section 9.05. Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
Section 9.06. Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and its successors and
permitted assigns, and, except as provided in Section 6.06, nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any rights, benefits or remedies of any nature whatsoever under or by
reason of this Agreement.
Section 9.07. Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
Section 9.08. Specific Performance. 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 in any court of the
United States located in the State of New York or in New York state court, this
being in addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto (a) consents to submit itself to
the personal jurisdiction of any federal court located in the State of New York
or any New York state court in the event any dispute arises out of this
Agreement or any of the transactions contemplated hereby, (b) agrees that it
will not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court and (c) agrees that it will not bring any
action relating to this Agreement or any of the transactions contemplated hereby
in any court other than a federal or state court sitting in the State of New
York.
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Section 9.09. Brokers. Except as otherwise provided in Section 6.06, the
Company agrees to indemnify and hold harmless Parent and Purchaser, and Parent
and Purchaser agree to indemnify and hold harmless the Company, from and against
any and all liability to which Parent and Purchaser, on the one hand, or the
Company, on the other hand, may be subjected by reason of any brokers, finder's
or similar fees or expenses with respect to the transactions contemplated by
this Agreement to the extent such similar fees and expenses are attributable to
any action undertaken by or on behalf of the Company, or Parent or Purchaser, as
the case may be.
Section 9.10. 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.
Section 9.11. Interpretation. (a) The words "hereof," "herein" and
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement, and article, section, paragraph, exhibit and
schedule references are to the articles, sections, paragraphs, exhibits and
schedules of this Agreement unless otherwise specified. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation." The definitions
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such terms. Any agreement, instrument or statute defined or referred
to herein or in any agreement or instrument that is referred to herein means
such agreement, instrument or statute as from time to time amended, qualified or
supplemented, including (in the case of agreements and instruments) by waiver or
consent and (in the case of statutes) by succession of comparable successor
statutes and all attachments thereto and instruments incorporated therein.
References to a person are also to its permitted successors and assigns.
(b) The phrases "the date of this Agreement," "the date hereof" and terms
of similar import, unless the context otherwise requires, shall be deemed to
refer to May 25, 1999. The phrase "made available" in this Agreement shall mean
that the information referred to has been actually delivered to the party to
whom such information is to be made available.
(c) The parties have participated jointly in the negotiation and drafting
of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no
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presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
Section 9.12. Definitions. (a) "Acquisition Proposal" means an inquiry,
offer or proposal regarding any of the following (other than the transactions
contemplated by this Agreement) involving the Company or any of its
subsidiaries: (w) any merger, consolidation, share exchange, recapitalization,
business combination or other similar transaction; (x) any sale, lease,
exchange, mortgage, pledge, transfer or other disposition of all or
substantially all the assets of the Company and its subsidiaries, taken as a
whole, in a single transaction or series of related transactions; (y) any tender
offer or exchange offer for 20 percent or more of the outstanding Shares or the
filing of a registration statement under the Securities Act in connection
therewith; or (z) 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.
(b) "beneficial ownership" or "beneficially own" shall have the meaning
provided in Section 13(d) of the Exchange Act and the rules and regulations
thereunder.
(c) "business day" means any day on which the principal offices of the SEC
in Washington, D.C. are open to accept filings, or, in the case of determining a
date when any payment is due, any day on which banks are not required or
authorized by law or executive order to close in the City of New York.
(d) "Cause" means the willful and continued failure of an employee of the
Company to substantially perform his or her duties (other than as a result of
total or partial incapacity due to physical or mental illness or as a result of
a termination by the employee for Good Reason) after a written demand for
substantial performance is delivered to the employee by the Company Board, which
demand specifically identifies the manner in which the Company Board believes
that the employee has not substantially performed his or her duties, (B) the
employee's willful engaging in conduct which is demonstrably and materially
injurious to the Company, monetarily or otherwise or (C) the employee's
conviction of a felony under the laws of the United States or any state thereof.
For purposes of this definition, no act or failure to act on the employee's part
shall be deemed "willful" unless done or omitted to be done by the employee not
in good faith and without reasonable belief that his or her action or omission
was in the best interest of the Company. Notwithstanding the foregoing, the
employee shall not be deemed to have been terminated for Cause unless and until
there shall have been delivered to the employee a copy of a resolution duly
adopted by the affirmative vote (which cannot be delegated) of not less than
three-quarters of the entire membership of the Company Board at a meeting of the
Company Board
58
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called and held for such purpose (after reasonable notice to the employee and an
opportunity for the employee, together with his or her counsel, to be heard
before the Company Board), finding that in the good faith opinion of the Company
Board the employee was guilty of conduct set forth in subclauses (A), (B) or (C)
above, specifying the particulars thereof in detail.
(e) "Good Reason" means any of the following: (A) an employee is removed
from his position for any reason other than by reason of death, disability,
retirement or for Cause, (B) a material reduction of an employee's duties, a
material diminution in an employee's position or a material adverse change in
the employee's reporting relationship from those in effect prior to the date of
the closing of the Offer, or (C) a reduction in the employee's salary or bonus,
a reduction in the employee's benefits or a relocation of the employee's current
place of employment outside of a 35 mile radius from such place of employment.
(f) "know" or "knowledge" means, with respect to any party, the knowledge
of such party's executive officers.
(g) "Material Adverse Effect" means with respect to any party, a material
adverse effect on (i) the business, results of operations or financial condition
of such party and its subsidiaries, taken as a whole, other than any effect
arising out of or attributable to the economy, the securities markets in general
or the industries generally in which a party and its subsidiaries operate or
(ii) the ability of such party to consummate the transactions contemplated by
this Agreement.
(h) "Parent Acquisition Proposal" means an inquiry, offer or proposal
regarding any of the following involving Parent or any of its subsidiaries: (w)
any merger, consolidation, share exchange, recapitalization, business
combination or other similar transaction; (x) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of all or substantially all the
assets of Parent and its subsidiaries, taken as a whole, in a single transaction
or series of related transactions; (y) any tender offer or exchange offer for 20
percent or more of the outstanding shares of Parent common stock or the filing
of a registration statement under the Securities Act in connection therewith; or
(z) 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.
(i) "person" means an individual, corporation, limited liability company,
partnership, association, trust, unincorporated organization, other entity or
group (as defined in the Exchange Act).
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(j) "subsidiary" means, when used with reference to any entity, any
corporation or other organization, whether incorporated or unincorporated, (i)
of which such entity or any other subsidiary of such entity is a general or
managing partner or (ii) the outstanding voting securities or interests of,
which having by their terms ordinary voting power to elect a majority of the
board of directors or others performing similar functions with respect to such
corporation or other organization, is directly or indirectly owned or controlled
by such entity or by any one or more of its subsidiaries.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed on its behalf as of the day and year first above written.
GEORGIA-PACIFIC CORPORATION
By: /s/ A. D. CORRELL
-----------------------------------
Name: A. D. Correll
Title: Chairman, Chief Executive
Officer and President
ATLANTA ACQUISITION CORP.
By: /s/ A. D. CORRELL
-----------------------------------
Name: A. D. Correll
Title: Chairman, Chief Executive
Officer and President
UNISOURCE WORLDWIDE, INC.
By: /s/ RAY B. MUNDT
-----------------------------------
Name: Ray B. Mundt
Title: Chairman and Chief
Executive Officer
<PAGE>
ANNEX A
-------
Conditions to the Offer
-----------------------
Notwithstanding any other provision of the Offer but subject to compliance
with Section 1.01(a) of the Merger Agreement, Purchaser shall not be required to
accept for payment or pay for any Shares tendered pursuant to the Offer, and may
terminate or amend the Offer in accordance with the Merger Agreement and may
extend the acceptance for payment of and payment for Shares tendered, if (i) the
Minimum Condition shall not have been satisfied, (ii) any applicable waiting
period under the HSR Act shall not have expired or been terminated prior to the
expiration of the Offer, or (iii) at any time on or after the date of this
Agreement, and prior to the acceptance for payment of Shares, any of the
following conditions shall exist and remain in effect:
(a) there shall have been instituted or be pending by any Governmental
Entity any action or proceeding before any court or governmental, administrative
or regulatory authority or agency, domestic or foreign, (i) challenging or
seeking to make illegal, materially delay or otherwise directly or indirectly
restrain or prohibit the making of the Offer, the acceptance for payment of, or
payment for, any Shares by Parent, Purchaser or any other affiliate of Parent,
or the consummation of any other transaction contemplated thereby; (ii) seeking
to prohibit or limit materially the ownership or operation by the Company,
Parent or any of their subsidiaries of all or any material portion of the
business or assets of the Company, Parent or any of their subsidiaries, or to
compel the Company, Parent or any of their subsidiaries to dispose of or hold
separate all or any material portion of the business or assets of the Company,
Parent or any of their subsidiaries, as a result of the transactions
contemplated thereby; (iii) seeking to impose or confirm limitations on the
ability of Parent, Purchaser or any other affiliate of Parent to exercise
effectively full rights of ownership of any Shares, including, without
limitation, the right to vote any Shares acquired by Purchaser pursuant to the
Offer or otherwise on all matters properly presented to the Company's
stockholders, including, without limitation, the approval and adoption of this
Agreement and the transactions contemplated hereby; (iv) seeking to require
divestiture by Parent, Purchaser or any other affiliate of Parent of any Shares;
or (v) which otherwise has a Material Adverse Effect on the Company or Parent;
(b) there shall have been any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or injunction enacted,
entered, enforced, promulgated, amended, issued or deemed applicable to (i)
Parent, the Company or any subsidiary or affiliate of Parent or the Company or
(ii) any
<PAGE>
transaction contemplated by this Agreement, by any legislative body, court,
government or governmental, administrative or regulatory authority or agency,
domestic or foreign, other than the routine application of the waiting period
provisions of the HSR Act to the Offer or the Merger, which is reasonably likely
to result, directly or indirectly, in any of the consequences referred to in
clauses (i) through (v) of paragraph (a) above;
(c) there shall have occurred any change, condition, event or development
that has a Material Adverse Effect on the Company;
(d) there shall have occurred (i) any general suspension of, or limitation
on prices for, trading in securities on the New York Stock Exchange, (ii) a
declaration of a banking moratorium or any suspension of payments in respect of
banks in the United States, (iii) any material limitation (whether or not
mandatory) by any government or governmental, administrative or regulatory
authority or agency, domestic or foreign, on the extension of credit by banks or
other lending institutions in the United States, (iv) a commencement of a war or
armed hostilities or other national or international calamity directly or
indirectly involving the United States (other than any war or armed hostilities
or other calamity in the Balkan States) that is material to the United States or
(v) in the case of any of the foregoing existing on the date hereof, a material
acceleration or worsening thereof;
(e) it shall have been publicly disclosed or Purchaser shall have
otherwise learned that beneficial ownership (determined for the purposes of this
paragraph as set forth in Rule 13d-3 promulgated under the Exchange Act) of 20%
or more of the then outstanding Shares has been acquired by any person, other
than Parent or any of its affiliates;
(f) any representation or warranty of the Company in the Merger Agreement
which is qualified as to materiality or Material Adverse Effect shall not be
true and correct in all respects or any such representation or warranty that is
not so qualified shall not be true and correct in any respect that would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company; or
(g) the Company shall have failed to perform in any material respect any
obligation or to comply in any material respect with any agreement or covenant
of the Company to be performed or complied with by it under the Merger
Agreement,
which, in the reasonable, good faith judgment of Purchaser, in any such case,
and regardless of the circumstances giving rise to any such condition, makes it
inadvisable to proceed with such acceptance for payment or payment.
<PAGE>
The foregoing conditions are for the sole benefit of Purchaser and Parent
and may be asserted by Purchaser or Parent regardless of the circumstances
giving rise to any such condition or may be waived by Purchaser or Parent in
whole or in part at any time and from time to time in their sole discretion.
The failure by Parent or Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right; the waiver of any such
right with respect to particular facts and other circumstances shall not be
deemed a waiver with respect to any other facts and circumstances; and each such
right shall be deemed an ongoing right that may be asserted at any time and from
time to time.
<PAGE>
EXHIBIT (c)(2)
May 13, 1999
Unisource Worldwide, Inc.
1100 Cassatt Road
P.O. Box 3000-0935
Berwyn, PA 19312
Confidentiality Agreement
-------------------------
Ladies/Gentlemen:
In order to evaluate a possible transaction (the "Proposed Transaction")
between Unisource Worldwide Inc. (the "Disclosing Party") and Georgia-Pacific
Corporation (the "Receiving Party"), the Disclosing Party may disclose and
deliver to the Receiving Party, upon execution and delivery of this letter
agreement, certain information regarding its properties, employees, finances,
businesses, operations, assets and financial affairs. All such information
furnished by the Disclosing Party or its Representatives (as defined below),
whether furnished before or after the date hereof, whether oral or written, and
regardless of the manner in which it is furnished, is referred to in this letter
agreement as "Proprietary Information". The term Proprietary Information shall
include, without limitation, all data, reports, interpretations, forecasts and
records containing or otherwise reflecting information concerning the Disclosing
Party, its respective affiliates and subsidiaries, whether prepared by such
party or others, and any summaries or other documents created by either party or
others which refer to, relate to, discuss, constitute, or embody all or any
portion of the Proprietary Information. The term Proprietary Information shall
not include, however, information which (a) is or becomes generally available to
the public other than as a result of a disclosure by the Receiving Party or its
Representatives, (b) was available to the Receiving Party on a non-confidential
basis prior to its disclosure by the Disclosing Party or its Representatives,
(c) is independently developed by the Receiving Party without violation of this
letter agreement or (d) becomes available to the Receiving Party on a non-
confidential basis from a person other than the Disclosing Party or its
Representatives who is not, to the Receiving Party's knowledge based on
reasonable
<PAGE>
inquiry, otherwise bound by a confidentiality agreement with the Disclosing
Party or any of its Representatives, or is otherwise not, to the Receiving
Party's knowledge based on reasonable inquiry, under an obligation to the
Disclosing Party or any of its Representatives not to transmit the information
to the Receiving Party. As used in this letter agreement, the term
"Representatives" means with respect to any person: (a) the directors of such
person and those of its officers and employees (including officers and employees
of its subsidiaries) who need to know the Proprietary Information for the
purposes of evaluating or negotiating the Proposed Transaction and (b) those
attorneys, advisors, accountants, underwriters, lenders and consultants of such
person who are not officers or employees of such person who need to know the
Proprietary Information for purposes of evaluating or negotiating the Proposed
Transaction, and who agree to keep such information confidential in accordance
with the terms of this letter agreement. The Receiving Party agrees to be
responsible for any breach of this letter agreement by its Representatives.
Subject to the immediately-succeeding paragraph, unless otherwise agreed to
in writing by the Disclosing Party, the Receiving Party agrees:
(a) except as required by law, to keep all Proprietary Information
confidential and not to disclose or reveal any Proprietary Information
to any person other than its Representatives who are actively and
directly participating in the evaluation of the Proposed Transaction;
(b) not to use Proprietary Information for any purpose other than in
connection with its evaluation of the Proposed Transaction or the
consummation of the Proposed Transaction; and
(c) except as required by law or pursuant to the rules of, or a listing
agreement with, any national securities exchange, not to disclose to
any person (other than those of its Representatives who are actively
and directly participating in the evaluation of the Proposed
Transaction) any information about the Proposed Transaction, or the
terms or conditions or any other facts relating thereto, including,
without limitation, the fact that discussions are taking place with
respect thereto, the status thereof or the fact that Proprietary
Information has been made available to the Receiving Party or its
Representatives.
In the event that the Receiving Party is requested pursuant to, or required
by, applicable law, regulation or stock exchange rule, or by legal or regulatory
process, to disclose any Proprietary Information or any other information
concerning the Proposed Transaction, the Receiving Party agrees that it will
provide the Disclosing Party with prompt notice of such request or requirement
in
2
<PAGE>
order to enable the Disclosing Party to seek an appropriate protective order or
other remedy and to consult with the Receiving Party with respect to the
Disclosing Party taking steps to resist or narrow the scope of such request or
legal process or to waive compliance, in whole or in part, with the terms of
this letter agreement. In any such event, the Receiving Party will, upon the
request of the Disclosing Party, use its reasonable commercial best efforts to
ensure that all Proprietary Information and other information that is so
disclosed will be accorded confidential treatment and shall furnish only that
portion of the Proprietary Information which it is advised by counsel is legally
required.
The Receiving Party also agrees that for a period of twenty-four months
from the date of this letter agreement, neither it nor any of its controlled
affiliates will, without the prior written consent of the Disclosing Party:
(a) acquire, offer to acquire or agree to acquire, directly or indirectly,
by purchase or otherwise, any voting securities or direct or indirect
rights to acquire any voting securities of the Disclosing Party, or any
subsidiary thereof, or of any successor to, or person in control of,
the Disclosing Party, or any assets of the Disclosing Party, or any
subsidiary or division thereof, or of any such successor or controlling
person other than immaterial asset purchases in the ordinary course of
business and acquisitions of securities in the ordinary course for
investment purposes by pension funds;
(b) make, or in any way participate, directly or indirectly, in any
"solicitation" of "proxies" to vote (as such terms are used in the
rules of the Securities and Exchange Commission), or seek to advise or
influence any person or entity with respect to the voting of any voting
securities of the Disclosing Party;
(c) form, join or in any way participate in a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended, in
connection with any of the foregoing; or
(d) otherwise act, alone or in concert with others (including by providing
financing for another party), to seek or offer to control or influence,
in any manner, the management, Board of Directors or policies of the
Disclosing Party.
The Receiving Party covenants and agrees that, during such period, unless and
until such party shall have been specifically invited in writing by the
Disclosing Party, it will not, and will cause each of its affiliates not to,
directly or indirectly, (x) solicit, seek or offer to effect, negotiate with or
provide any information to any
3
<PAGE>
party with respect to, or (y) make any statement or proposal, whether written or
oral, either alone or in concert with others, to the Board of Directors of the
Disclosing Party, to any director or officer of the Disclosing Party or to any
shareholder of the Disclosing Party, or otherwise make any public announcement
or proposal or offer whatsoever with respect to (i) any form of business
combination or transaction involving the Disclosing Party or any affiliate
thereof, including, without limitation, a merger, exchange offer or liquidation
of the Disclosing Party's assets, (ii) any form of restructuring,
recapitalization or similar transaction with respect to the Disclosing Party or
any affiliate thereof, (iii) any request to waive or terminate the provisions of
this letter agreement or (iv) any proposal or other statement with respect to
the Disclosing Party inconsistent with the terms of this letter agreement, or
instigate or encourage any third party to do any of the foregoing.
The Receiving Party acknowledges that Proprietary Information provided by
the Disclosing Party is and at all times remains, the sole and exclusive
property of the Disclosing Party, and the Disclosing Party has the exclusive
right, title and interest to such Proprietary Information. No right or license,
by implication or otherwise, is granted by the Disclosing Party as a result of
disclosure of Proprietary Information under this letter agreement.
The Receiving Party acknowledges that neither the Disclosing Party nor any
of its Representatives make any express or implied representation or warranty as
to the accuracy or completeness of any Proprietary Information and that the
Receiving Party also agrees that it shall be entitled to rely solely on such
representations and warranties regarding Proprietary Information as may be made
to it in any final agreement relating to the Proposed Transaction subject to the
terms and conditions of such agreement. The Receiving Party agrees that neither
the Disclosing Party nor any of its directors, officers or Representatives shall
have any liability to the Receiving Party or any of its Representatives relating
to or arising from the use of any Proprietary Information by the Receiving Party
or its Representatives or for any errors therein or omissions therefrom except
to the extent liabilities may be created under any definitive agreement executed
by the parties.
This letter agreement binds the parties only with respect to the matters
expressly set forth herein and neither party is bound or committed to negotiate
or consummate the Proposed Transaction unless and until a definitive agreement
on such matters has been executed and delivered on behalf of both parties by
their duly-authorized officers.
If either party hereto determines that it does not wish to proceed with the
Proposed Transaction, it will promptly advise the other party of that decision.
In
4
<PAGE>
such case or if the Proposed Transaction is not consummated by the Disclosing
Party and the Receiving Party, the Receiving Party will promptly return to the
Disclosing Party all copies of Proprietary Information provided by the
Disclosing Party in its possession or in the possession of any of its
Representatives and will not retain any copies or other reproductions, in whole
or in part, of such material. All other documents, memoranda, notes, summaries,
analyses, extracts, compilations, studies or other material whatsoever prepared
by the Receiving Party or any of its Representatives based on the Proprietary
Information will be destroyed and such destruction will be certified in writing
to the Disclosing Party by an authorized officer supervising such destruction.
Each party is aware, and will advise its Representatives who are informed
of the matters that are the subject of this letter agreement, of the
restrictions imposed by the United States securities laws on the purchase or
sale of securities by any person who has received material, non-public
information from the issuer of such securities and on the communication of such
information to any other person when it is reasonably foreseeable that such
other person is likely to purchase or sell such securities in reliance upon such
information.
The Disclosing Party agrees that, if it delivers the notice referred to in
Section 8.3(a)(iii) of the Agreement and Plan of Merger dated as of February 28,
1999 (the "UGI Agreement") among the Disclosing Party, UGI Corporation ("UGI")
and Vulcan Acquisition Corp. with respect to a Superior Proposal (as defined in
the UGI Agreement) made by a party other than the Receiving Party, the
Disclosing Party will issue a press release regarding the delivery of such
notice. The Disclosing Party further agrees that it will not enter into a
binding written agreement with respect to the Superior Proposal made by such
other party until at least two business days after issuance of the press release
referred to above.
It is understood that the covenants of this letter agreement and the
Proprietary Information disclosed are special, unique and of extraordinary
character. The Disclosing Party may be irreparably harmed by a breach of this
letter agreement, and the use of the Proprietary Information for the business
purposes of any person other than the Disclosing Party may enable such person to
compete unfairly with the Disclosing Party. In the event that the Receiving
Party or its Representatives shall have knowledge of any breach of the
confidentiality of, or the misappropriation of, any of the Proprietary
Information, the Receiving Party shall promptly give notice thereof to the
Disclosing Party. Without prejudice to the rights and remedies otherwise
available to the Disclosing Party, the Disclosing Party shall be entitled to
equitable relief by way of injunction or otherwise if the Receiving Party or any
of its Representatives breach or threaten to breach any of the provisions of
this letter agreement.
5
<PAGE>
It is further understood and agreed that no failure or delay by the
Disclosing Party 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 further exercise of any right, power or privilege
hereunder.
This letter agreement shall be governed by, and construed in accordance
with, the laws of the State of New York applicable to contracts executed in, and
to be performed in, that state. This letter agreement shall not be assignable
except by operation of law to a successor by merger; provided, however, that
such successor shall be bound by all of the terms of this letter agreement.
The Disclosing Party (i) represents and warrants that this letter agreement
contains terms and conditions no more restrictive to the Receiving Party than
those contained in the Confidentiality Agreement, dated January 20, 1999,
between the Disclosing Party and UGI and (ii) agrees that if the Disclosing
Party enters into a confidentiality agreement with any party relating to a
possible Acquisition Proposal (as defined in the UGI Agreement) and containing
terms and conditions that are less restrictive to the receiving party thereunder
than those contained in this letter agreement, the Disclosing Party shall
promptly provide written notice to the Receiving Party specifying in detail the
content of those less restrictive terms and conditions, in which event this
letter agreement shall be deemed automatically amended to include such less
restrictive terms and conditions.
This letter agreement and the Confidentiality Agreement (the "Other Letter
Agreement") dated as of the date hereof between the Receiving Party and the
Disclosing Party pursuant to which the Receiving Party will provide information
to the Disclosing Party in order to permit the Disclosing Party to evaluate the
Proposed Transaction contain the entire agreement between the Disclosing Party
and the Receiving Party concerning the subject matter hereof and thereof, and no
modification of this letter agreement or the Other Letter Agreement or waiver of
the terms and conditions hereof or thereof shall be binding upon the Disclosing
Party or the Receiving Party, unless approved in writing by each of the parties
hereto.
6
<PAGE>
Please confirm your agreement with the foregoing by signing and returning
to the undersigned the duplicate copy of this letter enclosed herewith.
GEORGIA-PACIFIC CORPORATION
By: /s/ James F. Kelley
-----------------------------------------------------
Name: James F. Kelley
Title: Senior Vice President and General Counsel
ACCEPTED AND AGREED as of
the date first written above:
UNISOURCE WORLDWIDE, INC.
By: /s/ Thomas A. Decker
-----------------------------------------------------
Name: Thomas A. Decker
Title: Senior Vice President, General Counsel
and Secretary
7
<PAGE>
EXHIBIT (c)(3)
May 13, 1999
Georgia-Pacific Corporation
133 Peachtree Street, N.E.
Atlanta, Georgia 30303
Confidentiality Agreement
-------------------------
Ladies/Gentlemen:
In order to evaluate a possible transaction (the "Proposed Transaction")
between Georgia-Pacific Corporation (the "Disclosing Party") and Unisource
Worldwide, Inc. (the "Receiving Party"), the Disclosing Party may disclose and
deliver to the Receiving Party, upon execution and delivery of this letter
agreement, certain information regarding its properties, employees, finances,
businesses, operations, assets and financial affairs. All such information
furnished by the Disclosing Party or its Representatives (as defined below),
whether furnished before or after the date hereof, whether oral or written, and
regardless of the manner in which it is furnished, is referred to in this letter
agreement as "Proprietary Information". The term Proprietary Information shall
include, without limitation, all data, reports, interpretations, forecasts and
records containing or otherwise reflecting information concerning the Disclosing
Party, its respective affiliates and subsidiaries, whether prepared by such
party or others, and any summaries or other documents created by either party or
others which refer to, relate to, discuss, constitute, or embody all or any
portion of the Proprietary Information. The term Proprietary Information shall
not include, however, information which (a) is or becomes generally available to
the public other than as a result of a disclosure by the Receiving Party or its
Representatives, (b) was available to the Receiving Party on a non-confidential
basis prior to its disclosure by the Disclosing Party or its Representatives,
(c) is independently developed by the Receiving Party without violation of this
letter agreement or (d) becomes available to the Receiving Party on a non-
confidential basis from a person other than the Disclosing Party or its
Representatives who is not, to the Receiving Party's knowledge based on
reasonable inquiry, otherwise bound by a confidentiality agreement with the
Disclosing Party or any of its Representatives, or is otherwise not, to the
Receiving Party's knowledge based on reasonable inquiry, under an obligation to
the Disclosing Party or any of its Representatives
<PAGE>
not to transmit the information to the Receiving Party. As used in this letter
agreement, the term "Representatives" means with respect to any person: (a) the
directors of such person and those of its officers and employees (including
officers and employees of its subsidiaries) who need to know the Proprietary
Information for the purposes of evaluating or negotiating the Proposed
Transaction and (b) those attorneys, advisors, accountants, underwriters,
lenders and consultants of such person who are not officers or employees of such
person who need to know the Proprietary Information for purposes of evaluating
or negotiating the Proposed Transaction, and who agree to keep such information
confidential in accordance with the terms of this letter agreement. The
Receiving Party agrees to be responsible for any breach of this letter agreement
by its Representatives.
Subject to the immediately-succeeding paragraph, unless otherwise agreed to
in writing by the Disclosing Party, the Receiving Party agrees:
(a) except as required by law, to keep all Proprietary Information
confidential and not to disclose or reveal any Proprietary Information
to any person other than its Representatives who are actively and
directly participating in the evaluation of the Proposed Transaction;
(b) not to use Proprietary Information for any purpose other than in
connection with its evaluation of the Proposed Transaction or the
consummation of the Proposed Transaction; and
(c) except as required by law or to the extent required by the Agreement
and Plan of Merger dated as of February 28, 1999 among UGI Corporation,
the Receiving Party and Vulcan Acquisition Corp. or pursuant to the
rules of, or a listing agreement with, any national securities
exchange, not to disclose to any person (other than those of its
Representatives who are actively and directly participating in the
evaluation of the Proposed Transaction) any information about the
Proposed Transaction, or the terms or conditions or any other facts
relating thereto, including, without limitation, the fact that
discussions are taking place with respect thereto, the status thereof
or the fact that Proprietary Information has been made available to the
Receiving Party or its Representatives.
In the event that the Receiving Party is requested pursuant to, or required
by, applicable law, regulation or stock exchange rule, or by legal or regulatory
process, to disclose any Proprietary Information or any other information
2
<PAGE>
concerning the Proposed Transaction, the Receiving Party agrees that it will
provide the Disclosing Party with prompt notice of such request or requirement
in order to enable the Disclosing Party to seek an appropriate protective order
or other remedy and to consult with the Receiving Party with respect to the
Disclosing Party taking steps to resist or narrow the scope of such request or
legal process or to waive compliance, in whole or in part, with the terms of
this letter agreement. In any such event, the Receiving Party will, upon the
request of the Disclosing Party, use its reasonable commercial best efforts to
ensure that all Proprietary Information and other information that is so
disclosed will be accorded confidential treatment and shall furnish only that
portion of the Proprietary Information which it is advised by counsel is legally
required.
The Receiving Party also agrees that for a period of twenty-four months
from the date of this letter agreement, neither it nor any of its controlled
affiliates will, without the prior written consent of the Disclosing Party:
(a) acquire, offer to acquire or agree to acquire, directly or indirectly,
by purchase or otherwise, any voting securities or direct or indirect
rights to acquire any voting securities of the Disclosing Party, or any
subsidiary thereof, or of any successor to, or person in control of,
the Disclosing Party, or any assets of the Disclosing Party, or any
subsidiary or division thereof, or of any such successor or controlling
person other than immaterial asset purchases in the ordinary course of
business and acquisitions of securities in the ordinary course for
investment purposes by pension funds;
(b) make, or in any way participate, directly or indirectly, in any
"solicitation" of "proxies" to vote (as such terms are used in the
rules of the Securities and Exchange Commission), or seek to advise or
influence any person or entity with respect to the voting of any voting
securities of the Disclosing Party;
(c) form, join or in any way participate in a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended, in
connection with any of the foregoing; or
(d) otherwise act, alone or in concert with others (including by providing
financing for another party), to seek or offer to control or influence,
in any manner, the management, Board of Directors or policies of the
Disclosing Party.
The Receiving Party covenants and agrees that, during such period, unless and
until such party shall have been specifically invited in writing by the
Disclosing
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Party, it will not, and will cause each of its affiliates not to, directly or
indirectly, (x) solicit, seek or offer to effect, negotiate with or provide any
information to any party with respect to, or (y) make any statement or proposal,
whether written or oral, either alone or in concert with others, to the Board of
Directors of the Disclosing Party, to any director or officer of the Disclosing
Party or to any shareholder of the Disclosing Party, or otherwise make any
public announcement or proposal or offer whatsoever with respect to (i) any form
of business combination or transaction involving the Disclosing Party or any
affiliate thereof, including, without limitation, a merger, exchange offer or
liquidation of the Disclosing Party's assets, (ii) any form of restructuring,
recapitalization or similar transaction with respect to the Disclosing Party or
any affiliate thereof, (iii) any request to waive or terminate the provisions of
this letter agreement or (iv) any proposal or other statement with respect to
the Disclosing Party inconsistent with the terms of this letter agreement, or
instigate or encourage any third party to do any of the foregoing.
The Receiving Party acknowledges that Proprietary Information provided by
the Disclosing Party is and at all times remains, the sole and exclusive
property of the Disclosing Party, and the Disclosing Party has the exclusive
right, title and interest to such Proprietary Information. No right or license,
by implication or otherwise, is granted by the Disclosing Party as a result of
disclosure of Proprietary Information under this letter agreement.
The Receiving Party acknowledges that neither the Disclosing Party nor any
of its Representatives make any express or implied representation or warranty as
to the accuracy or completeness of any Proprietary Information and that the
Receiving Party also agrees that it shall be entitled to rely solely on such
representations and warranties regarding Proprietary Information as may be made
to it in any final agreement relating to the Proposed Transaction subject to the
terms and conditions of such agreement. The Receiving Party agrees that neither
the Disclosing Party nor any of its directors, officers or Representatives shall
have any liability to the Receiving Party or any of its Representatives relating
to or arising from the use of any Proprietary Information by the Receiving Party
or its Representatives or for any errors therein or omissions therefrom except
to the extent liabilities may be created under any definitive agreement executed
by the parties.
This letter agreement binds the parties only with respect to the matters
expressly set forth herein and neither party is bound or committed to negotiate
or consummate the Proposed Transaction unless and until a definitive agreement
on such matters has been executed and delivered on behalf of both parties by
their duly-authorized officers.
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If either party hereto determines that it does not wish to proceed with the
Proposed Transaction, it will promptly advise the other party of that decision.
In such case or if the Proposed Transaction is not consummated by the Disclosing
Party and the Receiving Party, the Receiving Party will promptly return to the
Disclosing Party all copies of Proprietary Information provided by the
Disclosing Party in its possession or in the possession of any of its
Representatives and will not retain any copies or other reproductions, in whole
or in part, of such material. All other documents, memoranda, notes, summaries,
analyses, extracts, compilations, studies or other material whatsoever prepared
by the Receiving Party or any of its Representatives based on the Proprietary
Information will be destroyed and such destruction will be certified in writing
to the Disclosing Party by an authorized officer supervising such destruction.
Each party is aware, and will advise its Representatives who are informed
of the matters that are the subject of this letter agreement, of the
restrictions imposed by the United States securities laws on the purchase or
sale of securities by any person who has received material, non-public
information from the issuer of such securities and on the communication of such
information to any other person when it is reasonably foreseeable that such
other person is likely to purchase or sell such securities in reliance upon such
information.
It is understood that the covenants of this letter agreement and the
Proprietary Information disclosed are special, unique and of extraordinary
character. The Disclosing Party may be irreparably harmed by a breach of this
letter agreement, and the use of the Proprietary Information for the business
purposes of any person other than the Disclosing Party may enable such person to
compete unfairly with the Disclosing Party. In the event that the Receiving
Party or its Representatives shall have knowledge of any breach of the
confidentiality of, or the misappropriation of, any of the Proprietary
Information, the Receiving Party shall promptly give notice thereof to the
Disclosing Party. Without prejudice to the rights and remedies otherwise
available to the Disclosing Party, the Disclosing Party shall be entitled to
equitable relief by way of injunction or otherwise if the Receiving Party or any
of its Representatives breach or threaten to breach any of the provisions of
this letter agreement.
It is further understood and agreed that no failure or delay by the
Disclosing Party 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 further exercise of any right, power or privilege
hereunder.
This letter agreement shall be governed by, and construed in accordance
with, the laws of the State of New York applicable to contracts executed in, and
to be performed in, that state. This letter agreement shall not be assignable
except
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by operation of law to a successor by merger; provided, however, that
such successor shall be bound by all of the terms of this letter agreement.
This letter agreement and the Confidentiality Agreement (the "Other Letter
Agreement") dated as of the date hereof between the Receiving Party and the
Disclosing Party pursuant to which the Receiving Party will provide information
to the Disclosing Party in order to permit the Disclosing Party to evaluate the
Proposed Transaction contain the entire agreement between the Disclosing Party
and the Receiving Party concerning the subject matter hereof and thereof, and no
modification of this letter agreement or the Other Letter Agreement or waiver of
the terms and conditions hereof or thereof shall be binding upon the Disclosing
Party or the Receiving Party, unless approved in writing by each of the parties
hereto.
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Please confirm your agreement with the foregoing by signing and returning
to the undersigned the duplicate copy of this letter enclosed herewith.
UNISOURCE WORLDWIDE, INC.
By: /s/ Thomas A. Decker
-----------------------------------------
Name: Thomas A. Decker
Title: Senior Vice President, General
Counsel and Secretary
ACCEPTED AND AGREED as of
the date first written above:
GEORGIA-PACIFIC CORPORATION
By: /s/ James F. Kelley
---------------------------
Name: James F. Kelley
Title: Senior Vice President and General Counsel
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