<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
GROW GROUP, INC.
(Name of Subject Issuer)
GGI ACQUISITION, INC.
THE SHERWIN-WILLIAMS COMPANY
(Bidders)
SHARES OF COMMON STOCK
(Title of Class of Securities)
39382-010
(Cusip Number of Class of Securities)
------------------------
LOUIS E. STELLATO, ESQ.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
THE SHERWIN-WILLIAMS COMPANY
101 PROSPECT AVENUE, N.W.
CLEVELAND, OHIO 44115-1075
(216) 566-2000
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidders)
------------------------
Copy to:
JOHN A. HEALY, ESQ.
ROGERS & WELLS
200 PARK AVENUE
NEW YORK, NEW YORK 10166
(212) 878-8000
------------------------
CALCULATION OF FILING FEE
- --------------------------------------------------------------------------------
Transaction Valuation*: $320,198,015 Amount of Filing Fee: $64,040
- --------------------------------------------------------------------------------
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* For purposes of calculating the fee only. This amount assumes the purchase of all of the
16,420,411 outstanding shares (on a fully diluted basis) of Common Stock ("Shares") (and the
associated Common Stock Purchase Rights ("Rights")) of the subject company for $19.50 cash
per Share (and Right), based on the number of Shares reported as outstanding at April 29,
1995 by the subject company in its Statement on Schedule 14D-9 filed with the Commission on
May 4, 1995. The amount of the filing fee, calculated in accordance with Rule 0-11(d) under
the Securities Exchange Act of 1934, as amended, equals 1/50th of one percent of the
aggregate of the cash offered by the bidders.
/ / 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 Filing Party: Not Applicable
Form or Registration No.: Not Applicable Date Filed: Not Applicable
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CUSIP No. None 14D-1 Page 2
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- ---------------------------------------------------------------------------------------------
1. Name of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
GGI ACQUISITION, INC.
- ---------------------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group
(a) / /
(b) / /
- ---------------------------------------------------------------------------------------------
3. SEC Use Only
- ---------------------------------------------------------------------------------------------
4. Sources of Funds
WC, AF
- ---------------------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e) or 2(f)
/ /
- ---------------------------------------------------------------------------------------------
6. Citizenship or Place of Organization
NEW YORK
- ---------------------------------------------------------------------------------------------
7. Aggregate Amount Beneficially Owned by Each Reporting Person
700,000
- ---------------------------------------------------------------------------------------------
8. Check if the Aggregate Amount in Row 7 Excludes Certain Shares
/ /
- ---------------------------------------------------------------------------------------------
9. Percent of Class Represented by Amount in Row 7
4.4%
- ---------------------------------------------------------------------------------------------
10. Type of Reporting Person
CO
- ---------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 3
<TABLE>
CUSIP No. None 14D-1 Page 3
<S> <C>
--------------------------------------------------------------------------------------------
1. Name of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
THE SHERWIN-WILLIAMS COMPANY
--------------------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group
(a) / /
(b) / /
--------------------------------------------------------------------------------------------
3. SEC Use Only
--------------------------------------------------------------------------------------------
4. Sources of Funds
WC, BK
--------------------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e) or
2(f)
/ /
--------------------------------------------------------------------------------------------
6. Citizenship or Place of Organization
OHIO
--------------------------------------------------------------------------------------------
7. Aggregate Amount Beneficially Owned by Each Reporting Person
700,000
--------------------------------------------------------------------------------------------
8. Check if the Aggregate Amount in Row 7 Excludes Certain Shares
/ /
--------------------------------------------------------------------------------------------
9. Percent of Class Represented by Amount in Row 7
4.4%
--------------------------------------------------------------------------------------------
10. Type of Reporting Person
CO
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</TABLE>
3
<PAGE> 4
This Tender Offer Statement on Schedule 14D-1 relates to the offer by GGI
Acquisition, Inc. (the "Purchaser"), a New York corporation and a wholly-owned
subsidiary of The Sherwin-Williams Company, an Ohio corporation (the "Parent"),
to purchase all of the outstanding shares of Common Stock, par value $0.10 per
share (the "Shares"), of Grow Group, Inc., a New York corporation (the
"Company"), and, unless and until the Purchaser declares that the Rights
Condition (as defined in the Offer to Purchase) is satisfied, the associated
Common Stock Purchase Rights (the "Rights") issued pursuant to the Rights
Agreement, dated as of February 11, 1988, as amended and restated as of August
7, 1992, and as further amended on April 30, 1995, between the Company and The
Bank of New York, as Rights Agent, at a purchase price of $19.50 per Share (and
associated Right), 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 8, 1995 (the "Offer to Purchase") and in the related Letter of Transmittal
(which, together with any supplements or amendments, collectively constitute the
"Offer").
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Grow Group, Inc., a New
York corporation (the "Company"). The address of the Company's principal
executive offices is 200 Park Avenue, New York, New York 10166.
(b) The classes of equity securities being sought in the Offer are
the Shares and the Rights, upon the terms and subject to the conditions set
forth in the Offer to Purchase and the related Letter of Transmittal, copies of
which are filed as Exhibits (a)(1) and (a)(2) hereto, respectively. The
information set forth in the Offer to Purchase under "INTRODUCTION" is
incorporated herein by reference.
(c) The information set forth in the Offer to Purchase under
"INTRODUCTION" and in Section 10, "Background of the Offer; Contacts with the
Company," is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d), (g) This Statement is being filed by the Purchaser and the Parent.
The information set forth in the Offer to Purchase under "INTRODUCTION," in
Section 8, "Certain Information Concerning the Purchaser and the Parent," and in
Schedule I to the Offer to Purchase is incorporated herein by reference.
(e)-(f) During the last five years, neither the Purchaser, the Parent
nor, to the best of their knowledge, any of the persons listed in Schedule I to
the Offer to Purchase (i) has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or (ii) was a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is subject to a judgment, decree or final
order enjoining further violations of or prohibiting activities subject to
federal or state securities laws or finding any violation with respect to such
laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Offer to Purchase under
"INTRODUCTION" and in Section 10, "Background of the Offer; Contacts with the
Company," is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in the Offer to Purchase in Section
9, "Source and Amount of Funds," is incorporated herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSAL OF THE BIDDER.
(a)-(b) The information set forth in the Offer to Purchase under
"INTRODUCTION" and in Section 11, "Purpose of the Offer; The Merger; Plans for
the Company," and in Section 10, "Background of the Offer; Contacts with the
Company," is incorporated herein by reference.
(c) The information set forth in the Offer to Purchase under
"INTRODUCTION" and in Section 11, "Purpose of the Offer; The Merger; Plans for
the Company," is incorporated herein by reference.
4
<PAGE> 5
(d) The information set forth in the Offer to Purchase in Section
11, "Purpose of the Offer; The Merger; Plans for the Company," is incorporated
herein by reference.
(e)-(g) The information set forth in the Offer to Purchase in Section
11, "Purposes of the Offer; The Merger; Plans for the Company," and in Section
13, "Effect of the Offer on the Market for the Shares, Stock Exchange Listing
and Exchange Act Registration," is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) The information set forth in the Offer to Purchase under
"INTRODUCTION" and in Section 8, "Certain Information Concerning the Purchaser
and the Parent," is incorporated herein by reference.
(b) The information set forth in Schedule II to 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 Offer to Purchase in Section 9, "Source
and Amount of Funds," and in Section 10, "Background of the Offer; Contacts with
the Company," is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Offer to Purchase under "INTRODUCTION" and
in Section 16, "Fees and Expenses," is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in the Offer to Purchase in Section 8, "Certain
Information Concerning the Purchaser and the Parent," is incorporated herein by
reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) Not applicable.
(b)-(e) The information set forth in the Offer to Purchase under
"INTRODUCTION" and in Section 15, "Certain Legal Matters and Regulatory
Approvals," is incorporated herein by reference.
(f) The information set forth in the Offer to Purchase and the
related Letter of Transmittal, copies of which are filed as Exhibits (a)(1) and
(a)(2) hereto, respectively, is incorporated herein by reference in its
entirety.
5
<PAGE> 6
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
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(a)(1) Offer to Purchase, dated May 8, 1995.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter from the Dealer Manager to Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees.
(a)(5) Letter to clients for use by Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees.
(a)(6) Notice of Withdrawal of Shares tendered pursuant to the tender offer of GDEN
Corporation.
(a)(7) Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9.
(a)(8) Form of summary advertisement, dated May 8, 1995.
(a)(9) Text of press release issued by the Parent on May 8, 1995.
(b)(1) Commitment Letter, dated May 5, 1995, to Parent from Texas Commerce Bank
National Association.
(b)(2) Revolving Credit Agreement, by and among the Parent and several banking
institutions, as amended and restated, effective as of December 15, 1993
(previously filed with the Commission as Exhibit 4(f) to the Parent's
Registration Statement on Form S-8 No. 33-52227 dated February 10, 1994, and
incorporated herein by reference).
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
</TABLE>
6
<PAGE> 7
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.
Dated: May 8, 1995
GGI ACQUISITION, INC.
By: /s/ L.E. Stellato
-------------------------------
L.E. Stellato
Secretary
THE SHERWIN-WILLIAMS COMPANY
By: /s/ L.E. Stellato
-------------------------------
L.E. Stellato
Vice President, General Counsel
and Secretary
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard A. Legenza, John A. Healy, Jeffrey P.
Cohen and Kathleen L. Werner, or any of them, his true and lawful
attorney-in-fact and agent, with full power of substitution and re-substitution,
to sign in any and all capacities any and all amendments to this Tender Offer
Statement on Schedule 14D-1 and to file the same with all exhibits thereto and
other documents in connection therewith with the Securities and Exchange
Commission, granting to such attorneys-in-fact and agents, and each of them,
full power and authority to do all such other acts and execute all such other
documents as they, or any of them, may deem necessary or desirable in connection
with the foregoing, as fully as the undersigned might or could do in person,
hereby ratifying and confirming all that such attorneys-in-fact and agents, or
any of them, may lawfully do or cause to be done by virtue hereof.
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/s/ L.E. Stellato /s/ L.E. Stellato
- ----------------------------------- ---------------------------------------------
L.E. Stellato L.E. Stellato
Secretary Vice President, General Counsel and Secretary
GGI Acquisition, Inc. The Sherwin-Williams Company
Dated: May 8, 1995 Dated: May 8, 1995
</TABLE>
7
<PAGE> 8
EXHIBIT INDEX
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EXHIBIT NO. DESCRIPTION
- ------------ --------------------------------------------------------------------------------
<S> <C>
(a)(1) Offer to Purchase, dated May 8, 1995.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter from the Dealer Manager to Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees.
(a)(5) Letter to clients for use by Dealer Manager to Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees.
(a)(6) Notice of Withdrawal of Shares tendered pursuant to the tender offer of GDEN
Corporation.
(a)(7) Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9.
(a)(8) Form of summary advertisement dated May 8, 1995.
(a)(9) Text of press release issued by the Parent on May 8, 1995.
(b)(1) Form of Commitment Letter, dated May 5, 1995, to Parent from Texas Commerce Bank
National Association.
(b)(2) Revolving Credit Agreement, by and among the Parent and several banking
institutions, as amended and restated, effective as of December 15, 1993
(previously filed with the Commission as Exhibit 4(f) to the Parent's
Registration Statement on Form S-8 No. 33-52227 dated February 10, 1994, and
incorporated herein by reference).
</TABLE>
8
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
GROW GROUP, INC.
AT
$19.50 NET PER SHARE
BY
GGI ACQUISITION, INC.
A WHOLLY-OWNED SUBSIDIARY OF
THE SHERWIN-WILLIAMS COMPANY
***************************************************************************
* *
* THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW *
* YORK TIME, ON MONDAY, JUNE 5, 1995, UNLESS THE OFFER IS EXTENDED. *
* *
***************************************************************************
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS: (1) THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A
NUMBER OF SHARES (THE "SHARES") OF THE COMMON STOCK OF GROW GROUP, INC. (THE
"COMPANY") WHICH CONSTITUTES AT LEAST 66 2/3% OF THE VOTING POWER (DETERMINED ON
A FULLY DILUTED BASIS) ON THE DATE OF PURCHASE OF ALL STOCK OF THE COMPANY
ENTITLED TO VOTE IN A MERGER; (2) GGI ACQUISITION, INC. (THE "PURCHASER") BEING
SATISFIED, IN ITS SOLE DISCRETION, THAT THE "LOCKUP FEE" GRANTED TO IMPERIAL
CHEMICAL INDUSTRIES PLC ("ICI") UNDER THE PREVIOUSLY ANNOUNCED MERGER AGREEMENT
BETWEEN THE COMPANY AND ICI HAS BEEN IRREVOCABLY WAIVED BY ICI OR DECLARED
INVALID OR UNENFORCEABLE BY A COURT OF COMPETENT JURISDICTION; (3) THE PURCHASER
BEING SATISFIED, IN ITS SOLE DISCRETION, THAT IMMEDIATELY FOLLOWING THE
CONSUMMATION OF THE OFFER, THE PURCHASER WILL HAVE THE ABILITY TO EFFECTUATE A
SECOND-STAGE MERGER (THE "MERGER") IN WHICH EACH SHARE NOT PURCHASED IN THE
OFFER WILL BE CONVERTED INTO THE RIGHT TO RECEIVE IN CASH THE SAME PRICE PER
SHARE PAID BY THE PURCHASER PURSUANT TO THE OFFER AS DESCRIBED IN THIS OFFER TO
PURCHASE; AND (4) THE COMPANY'S COMMON STOCK PURCHASE RIGHTS (THE "RIGHTS")
HAVING BEEN REDEEMED BY THE COMPANY'S BOARD OF DIRECTORS OR THE PURCHASER BEING
SATISFIED, IN ITS SOLE DISCRETION, THAT SUCH RIGHTS HAVE BEEN INVALIDATED OR ARE
OTHERWISE INAPPLICABLE TO, OR THAT THE DILUTIVE PROVISIONS THEREOF WOULD NOT BE
TRIGGERED BY, THE OFFER OR THE MERGER. THE OFFER IS ALSO SUBJECT TO OTHER TERMS
AND CONDITIONS. SEE THE INTRODUCTION AND SECTIONS 1 AND 14.
THE OFFER IS NOT CONDITIONED UPON THE PURCHASER OBTAINING FINANCING.
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares and Rights should either (1) complete and sign the Letter of Transmittal
(or a facsimile thereof) in accordance with the instructions in the Letter of
Transmittal, mail or deliver the Letter of Transmittal (or such facsimile) and
any other required documents to the Depositary (as defined herein), and either
deliver the certificates representing the tendered Shares and, if separate, the
certificates representing the associated Rights, and any other required
documents to the Depositary or tender such Shares (and Rights, if applicable)
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. Stockholders
having Shares (and Rights, if applicable) 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 they desire
to tender Shares (and Rights, if applicable) so registered. Unless and until the
Purchaser declares that the Rights Condition (as defined below) is satisfied,
holders of Shares will be required to tender one Right for each Share tendered
in order to effect a valid tender of such Share.
A stockholder who desires to tender Shares and Rights and whose certificates
representing such Shares (and Rights, if applicable) are not immediately
available, or who cannot comply with the procedure for book-entry transfer on a
timely basis, may tender such Shares (and Rights, if applicable) by following
the procedures for guaranteed delivery set forth in Section 3.
Questions and requests for assistance may be directed to Lazard Freres & Co.
LLC or to Georgeson & Company Inc. (the "Information Agent") 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.
The Dealer Manager for the Offer is:
LAZARD FRERES & CO. LLC
May 8, 1995
<PAGE> 2
TABLE OF CONTENTS
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PAGE
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INTRODUCTION........................................................................ 1
THE OFFER........................................................................... 5
Section 1. Terms of the Offer; Expiration Date................................ 5
Section 2. Acceptance for Payment and Payment for Shares...................... 6
Section 3. Procedure for Tendering Shares and Rights.......................... 8
Section 4. Withdrawal Rights.................................................. 11
Section 5. Certain Federal Income Tax Matters................................. 12
Section 6. Price Range of Shares; Dividends................................... 13
Section 7. Certain Information Concerning the Company......................... 14
Section 8. Certain Information Concerning the Purchaser and the Parent........ 16
Section 9. Source and Amount of Funds......................................... 18
Section 10. Background of the Offer; Contacts with the Company................. 19
Section 11. Purpose of the Offer; The Merger; Plans for the Company............ 22
Section 12. Dividends and Distributions........................................ 29
Section 13. Effect of the Offer on the Market for the Shares, Stock Exchange
Listing and Exchange Act Registration............................. 30
Section 14. Certain Conditions of the Offer.................................... 31
Section 15. Certain Legal Matters and Regulatory Approvals..................... 34
Section 16. Fees and Expenses.................................................. 37
Section 17. Miscellaneous...................................................... 37
SCHEDULE I -- Information Regarding the Directors and Executive Officers
of the Parent and the Purchaser............................... S-1
SCHEDULE II -- Parent Purchases of Shares.......................................... S-5
SCHEDULE III -- Certain Information Required to be Given to Stockholders
Pursuant to New York Law...................................... S-6
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i
<PAGE> 3
TO: THE STOCKHOLDERS
OF GROW GROUP, INC.
INTRODUCTION
THE OFFER
GGI Acquisition, Inc., a New York corporation (the "Purchaser") and a
wholly-owned subsidiary of The Sherwin-Williams Company, an Ohio corporation
(the "Parent"), hereby offers to purchase all of the outstanding shares of
Common Stock, par value $0.10 per share (the "Shares"), of Grow Group, Inc., a
New York corporation (the "Company"), and, unless and until the Purchaser
declares that the Rights Condition (as defined below) is satisfied, the
associated Common Stock Purchase Rights (the "Rights") issued pursuant to the
Rights Agreement, dated as of February 11, 1988, as amended and restated as of
August 7, 1992, and as further amended on April 30, 1995 (as so amended and
restated, the "Rights Agreement"), between the Company and The Bank of New York,
as Rights Agent (the "Rights Agent"), at a purchase price of $19.50 per Share
(and associated Right), net to the seller in cash, without interest thereon,
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 supplements
or amendments, collectively constitute the "Offer"). Unless the context requires
otherwise, all references in this Offer to Purchase to "Shares" shall be deemed
to refer also to the associated Rights, and all references to "Rights" shall be
deemed to include all benefits that may inure to the stockholders of the Company
or to holders of the Rights pursuant to the Rights Agreement. Based on publicly
available information, the Purchaser believes that one Right is currently
associated with each Share.
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, subject to Instruction 6 of the Letter of Transmittal, stock
transfer taxes on the transfer and sale of Shares and Rights pursuant to the
Offer. The Purchaser will pay all fees and expenses of Lazard Freres & Co. LLC,
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
Georgeson & Company Inc. (the "Information Agent") incurred in connection with
the Offer. See Section 16.
The purpose of the Offer is to acquire control of, and the entire equity
interest in, the Company. The Purchaser intends to propose, and to seek to have
the Company consummate as soon as practicable after consummation of the Offer, a
merger or similar business combination (the "Merger") with the Purchaser or
another direct or indirect subsidiary of the Parent, pursuant to which each then
outstanding Share (other than Shares held by the Parent, the Purchaser or any
other wholly-owned subsidiary of the Parent, Shares held in the treasury of the
Company and Shares held by stockholders who properly exercise appraisal rights
under New York law) would be converted into the right to receive in cash the
price per Share paid by the Purchaser pursuant to the Offer and the Company
would become a wholly-owned subsidiary of the Parent.
Although the Purchaser will seek to have the Company consummate the Merger
as soon as practicable after consummation of the Offer, if the Board of
Directors of the Company opposes the Offer and the Merger, certain terms of the
Rights and certain provisions of the New York Business Corporation Law (the
"NYBCL"), the Company's Certificate of Incorporation, as amended (the
"Charter"), and the Company's By-Laws (the "By-Laws") may affect the ability of
the Purchaser to obtain control of the Company and to effect the Merger.
Accordingly, the timing and details of the Merger will depend on a variety of
factors and legal requirements, the actions of the Board of Directors of the
Company, the number of Shares acquired by the Purchaser pursuant to the Offer,
and whether the Minimum Condition, the Lockup Fee Condition, the Merger
Condition and the Rights Condition (each as defined below) are satisfied or
waived.
Upon consummation of the Offer, assuming the Minimum Condition, the Lockup
Fee Condition, the Merger Condition, the Rights Condition and the other
conditions to the Offer set forth in Section 14 are satisfied, the Purchaser
will own sufficient Shares to approve the Merger without the vote of any other
stockholder. For a discussion of certain appraisal rights that will be available
to stockholders upon consummation of the Merger, see Section 11.
1
<PAGE> 4
THE OFFER IS CONDITIONED, AMONG OTHER THINGS, UPON SATISFACTION, IN THE
PURCHASER'S SOLE DISCRETION, OF THE FOLLOWING CONDITIONS: (1) THE MINIMUM
CONDITION, (2) THE LOCKUP FEE CONDITION, (3) THE MERGER CONDITION AND (4) THE
RIGHTS CONDITION, EACH OF WHICH IS DESCRIBED BELOW. CERTAIN OTHER CONDITIONS TO
THE OFFER ARE DESCRIBED IN SECTION 14.
THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY,
JUNE 5, 1995, UNLESS EXTENDED.
SUMMARY BACKGROUND OF THE OFFER; THE ICI TENDER OFFER
In January 1995, the Company announced it had retained Wertheim Schroder &
Co. Incorporated ("Wertheim Schroder") to advise it on strategic alternatives.
Following that announcement, the Parent's senior management contacted the
Company to express an interest in acquiring the Company. In accordance with the
bidding process conducted by Wertheim Schroder, the Parent requested access to
non-public information and submitted an executed confidentiality agreement. The
Company did not execute the confidentiality agreement and did not furnish the
requested information. The Parent subsequently was advised by the Company that
the Parent would be excluded from the bidding process. The Parent revoked its
offer to enter into a confidentiality agreement, but through its representatives
continued to express a strong interest in pursuing a transaction with the
Company.
On April 28, 1995, the Company announced that it had entered into
negotiations with a third party concerning an acquisition of the Company for
$18.10 per Share. On the same day, the Parent wrote to the Company and its
directors and legal and financial advisors urging that the Company not enter
into any agreement that would adversely affect the ability of the Company's
stockholders to receive the maximum value for their shares without first giving
the Parent access to information and an opportunity to present a proposal to the
Company. The Parent pointed out in its letter that it had been attempting for
some time to obtain information, and had continued to communicate through its
financial advisors its interest in pursuing a transaction with the Company, but
had been rebuffed. The Parent received no response to its letter. On May 1,
1995, the Company announced that it had entered into an Agreement and Plan of
Merger, dated as of April 30, 1995 (the "ICI Merger Agreement"), among the
Company, Imperial Chemical Industries PLC ("ICI") and GDEN Corporation, a
subsidiary of ICI ("GDEN"). The ICI Merger Agreement provides, among other
things, that GDEN will make a tender offer for all Shares at $18.10 per Share in
cash (the "ICI Tender Offer"). The ICI Merger Agreement also provides for the
payment by the Company to ICI of $8 million under certain circumstances, which
would include consummation of the Purchaser's Offer. In connection with the ICI
Merger Agreement, the Company approved an Option Agreement, dated as of April
30, 1995 (the "Option Agreement") among ICI, GDEN, Corimon Corporation
("Corimon") and Corimon, S.A.C.A., the parent of Corimon. In the Option
Agreement, Corimon granted ICI an option to acquire the 4,025,841 Shares owned
by Corimon (representing 25% of the outstanding Shares) at a $.60 per Share
discount to the price offered in the ICI Tender Offer (i.e., currently, $17.50
per Share). The Purchaser believes that because of the Option Agreement, the
merger provided for in the ICI Merger Agreement may violate the Supermajority
Charter Provision and the New York Takeover Statute described below. The
Purchaser and the Parent intend, if necessary, to seek a declaration by a court
to that effect.
The ICI Tender Offer was commenced on May 4, 1995 and presently is
scheduled to expire on June 1, 1995. Consummation of the ICI Tender Offer is
subject to a number of conditions.
The Purchaser's Offer represents a 7.7% premium over the ICI Tender Offer
price of $18.10 per Share. A more detailed description of the background of the
Offer is contained in Section 10.
CERTAIN CONDITIONS TO THE OFFER
The Offer is subject to the fulfillment of certain conditions described in
Section 14, including the following conditions:
The Minimum Condition. The Offer is subject to the condition (the "Minimum
Condition") that there shall have been validly tendered and not properly
withdrawn on or prior to the Expiration Date (as defined below) a number of
Shares which, together with the Shares owned by the Parent, constitutes at least
66 2/3% of
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the voting power (determined on a fully diluted basis) on the date of purchase
of all stock of the Company entitled to vote in a merger.
According to representations made by the Company in the ICI Merger
Agreement, at April 29, 1995: (i) 16,101,712 Shares were outstanding; (ii)
options to purchase an additional 318,699 Shares were outstanding under the
Company's various stock option plans; and (iii) no other voting stock was
outstanding. The Parent currently beneficially owns an aggregate of 700,000
Shares, representing approximately 4.35% of the Shares outstanding based on the
information referred to above. See Section 8. Based on this information, the
Purchaser believes that the Minimum Condition will be satisfied if 10,250,000
Shares are validly tendered pursuant to the Offer and not properly withdrawn.
If, upon consummation of the Offer, the Purchaser and the Parent together
own at least 66 2/3% of the outstanding Shares (determined on a fully diluted
basis), then the Purchaser and the Parent will own a sufficient number of Shares
to enable them to effect stockholder approval of the Merger (subject to the
requirements of the Supermajority Charter Provision and the New York Takeover
Statute). The Merger also will require the approval of the Company's Board of
Directors.
The Lockup Fee Condition. The Offer is subject to the condition (the
"Lockup Fee Condition") that the Lockup Provision (as defined below) contained
in the ICI Merger Agreement will have been irrevocably waived by ICI or declared
invalid or unenforceable by a court of competent jurisdiction. The ICI Merger
Agreement provides that in certain circumstances, which would include
consummation of the Offer, the Company will pay ICI $8 million (the "Lockup
Provision"). The Purchaser and the Parent believe the Lockup Provision is
invalid because it was approved by the Company's Board of Directors in violation
of the Directors' fiduciary duties to the Company and its stockholders, and they
presently intend to challenge the validity of the Lockup Provision in court.
The Merger Condition. The Offer is subject to the condition (the "Merger
Condition") that the Purchaser shall be satisfied, in its sole discretion, that
immediately following consummation of the Offer, the Purchaser will have the
ability to effectuate the Merger. The Purchaser presently anticipates this
requirement will be satisfied if the Company and its Board of Directors take
substantially the same actions with respect to the Offer and the Merger as they
have agreed in the ICI Merger Agreement to take in respect of the ICI Tender
Offer and ICI's proposed merger. These actions include: (i) approval by the
Company's Board of Directors of a memorandum of understanding with respect to
the Merger, pursuant to Section 11 of the Company's Certificate of Incorporation
(the "Supermajority Charter Provision"); (ii) approval by the Company's Board of
Directors of either the purchase of Shares pursuant to the Offer or the Merger,
pursuant to Section 912 of the NYBCL (the "New York Takeover Statute"); and
(iii) an agreement (the "Board Composition Agreement") by the Company and its
Board of Directors that upon consummation of the Offer, the Company's Board of
Directors will be reconstituted such that the percentage of the Board
represented by the Purchaser's designees will be as nearly as practicable the
same as the percentage of outstanding Shares owned by the Purchaser and the
Parent, and in any event at least a majority of the Board. Unless the Company's
Board of Directors takes the actions described in clauses (i), (ii) and (iii)
above, the Merger Condition will not be satisfied.
The Purchaser is hereby requesting that the Company's Board of Directors
take the actions referred to above. The Purchaser believes that under the
circumstances of the Offer and under applicable law, and in light of the
Company's undertakings in the ICI Merger Agreement to take similar actions in
favor of ICI, the Board of Directors of the Company is obligated by its
fiduciary responsibilities to take these actions in order to permit the Offer
and the Merger to be consummated. However, there can be no assurance that the
Board will do so. The Purchaser and the Parent presently intend, if necessary,
to seek court orders requiring the Company's Board of Directors to take these
actions.
The Rights Condition. The Offer is subject to the condition (the "Rights
Condition") that the Rights shall have been redeemed by the Company's Board of
Directors or that the Purchaser shall be satisfied, in its sole discretion, that
such Rights have been invalidated or are otherwise inapplicable to, or the
dilutive provisions thereof will not be triggered by, the Offer and the Merger.
The following discussion is based on
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<PAGE> 6
information contained in the Rights Agreement. A more detailed description of
the Rights is contained in Section 11.
In the event that at any time following a Distribution Date (as defined in
Section 11) a person becomes the beneficial owner of 30% or more of the then
outstanding Shares (the "Ownership Flip-In"), each holder of a Right will
thereafter have the right to purchase, upon exercise thereof at a price subject
to adjustment of $30.00 per Right (the "Purchase Price"), a number of Shares
which have a market value of two times the Purchase Price. In the event that at
any time following the date (the "Stock Acquisition Date") of a public
announcement that a person, entity or group of affiliated or associated persons
(an "Acquiring Person") has acquired beneficial ownership of 30% or more of the
outstanding Shares, the Company is involved in a merger or other business
combination transaction in which it is not the continuing or surviving
corporation, or in which any or all of the Shares are changed into or exchanged
for securities of another party or cash or other property or 50% or more of the
Company's assets or earning power is sold (the "Flip-Over"), each holder of a
Right will thereafter have the right to purchase, upon the exercise thereof at
the Purchase Price, common stock of the acquiring entity or parent thereof which
has a market value of two times the Purchase Price. Following an Ownership
Flip-In or Flip-Over, any Rights beneficially owned by an Acquiring Person or
affiliates or associates of any Acquiring Person will immediately become null
and void. The Purchaser believes that the consummation of the Offer likely would
trigger the Ownership Flip-In and as a result cause significant dilution to the
Purchaser's interest in the Company and render the Offer and the Merger
economically unattractive for the Purchaser.
At any time prior to the Distribution Date, the Company may redeem the
Rights in whole, but not in part, at a price of $.01 per Right, subject to
adjustment. Until the Distribution Date, the Rights will be transferred with and
only with the Shares. Until the Distribution Date, the surrender for transfer of
any of the certificates representing Shares (the "Share Certificates") will also
constitute the surrender for transfer of the Rights associated with the Shares
represented by such Share Certificates. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of Shares as of the close of
business on the Distribution Date. After the Distribution Date, the separate
Rights Certificates alone will evidence the Rights.
The Purchaser believes that currently the Rights are not exercisable,
Rights Certificates have not been issued and the Rights are evidenced by the
Share Certificates. The Purchaser believes that under the Rights Agreement, as a
result of the commencement of the Offer, the Distribution Date will be as early
as May 19, 1995, unless prior to that date the Company's Board of Directors
redeems the Rights or takes action to delay the Distribution Date.
Unless and until the Purchaser declares that the Rights Condition is
satisfied, holders of Shares will also be required to tender one Right for each
Share tendered in order to effect a valid tender of such Share. If the
Distribution Date has not occurred prior to the Expiration Date, a tender of
Shares will also constitute a tender of associated Rights. If the Distribution
Date has occurred prior to the Expiration Date, the procedures set forth in
Section 3 with respect to separate delivery of Rights Certificates must be
followed.
The Company has announced that, pursuant to its undertakings in the ICI
Merger Agreement, the Company amended the Rights Agreement on April 30, 1995 to
permit the commencement and closing of the ICI Tender Offer and the consummation
of the merger proposed by ICI without causing a Distribution Date. That
amendment will not apply to this Offer. The ICI Merger Agreement also provides
that, upon the request of ICI, the Company will redeem all of the outstanding
Rights.
The Purchaser is hereby requesting that the Company's Board of Directors
redeem the Rights or take the other action described below. The Purchaser
believes that under the circumstances of the Offer and under applicable law, and
in light of the Company's undertakings in the ICI Merger Agreement to take
similar actions in favor of ICI, the Board of Directors of the Company is
obligated by its fiduciary responsibilities to redeem the Rights or take such
other action to invalidate the Rights or otherwise render the Rights
inapplicable to, or prevent the dilutive provisions thereof from being triggered
by, the Offer and the Merger, in each case in order to permit the Offer and the
Merger to be consummated. However, there can be no
4
<PAGE> 7
assurance that the Board will do so. The Purchaser and the Parent presently
intend, if necessary, to seek court orders requiring the Company's Board of
Directors to take these actions.
THE PURCHASER IS WILLING TO ENTER INTO A MERGER AGREEMENT WITH THE COMPANY
ON SUBSTANTIALLY THE SAME TERMS AND CONDITIONS AS THE ICI MERGER AGREEMENT. IF
THE COMPANY WERE TO ENTER INTO SUCH AN AGREEMENT WITH THE PURCHASER, THE TERMS
OF AND CONDITIONS TO THE OFFER WOULD BE MODIFIED ACCORDINGLY.
* * *
The Purchaser expressly reserves the right to waive any one or more of the
conditions to the Offer. See Sections 11, 14 and 15.
In the event the Offer is not consummated, the Purchaser intends to explore
all options that may be available to it at such time, which may include without
limitation the acquisition of Shares through open market purchases, privately
negotiated transactions, another tender offer or exchange offer or otherwise,
upon such terms and at such prices as it shall determine, which may be more or
less than the price to be paid pursuant to the Offer. The Purchaser also
reserves the right to dispose of Shares.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
THE OFFER
SECTION 1. TERMS OF THE OFFER; EXPIRATION DATE. Upon the terms and
subject to the conditions of the Offer (including, if the Offer is extended or
amended, the terms and conditions of such extension or amendment), the Purchaser
will accept for payment and pay for all Shares validly tendered on or prior to
the Expiration Date and not properly withdrawn as permitted by Section 4. For
purposes of the Offer, the term "Expiration Date" means 12:00 Midnight, New York
City time, on Monday, June 5, 1995, unless and until the Purchaser, in its sole
discretion, 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 the Purchaser, shall expire.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, SATISFACTION OF EACH OF
THE CONDITIONS SET FORTH ABOVE IN THE INTRODUCTION AND IN SECTION 14. THE
PURCHASER RESERVES THE RIGHT (BUT SHALL NOT BE OBLIGATED) TO WAIVE ANY OR ALL OF
THOSE CONDITIONS.
If by the Expiration Date any or all of such conditions have not been
satisfied or waived, the Purchaser reserves the right (but shall not be
obligated) (i) to decline to purchase any of the Shares tendered and terminate
the Offer, (ii) to waive all of the unsatisfied conditions and, subject to
complying with applicable rules and regulations of the Securities and Exchange
Commission (the "Commission"), to purchase all Shares validly tendered or (iii)
to extend the Offer and, subject to the right of stockholders to withdraw Shares
until the Expiration Date, retain the Shares which have been tendered during the
period or periods for which the Offer is extended. In the event that the
Purchaser waives any of the conditions set forth in Section 14, the Commission
may, if the waiver is deemed to constitute a material change to the information
previously provided to the stockholders, require that the Offer remain open for
an additional period of time and/or that the Purchaser disseminate information
concerning such waiver.
The Purchaser expressly reserves the right, in its sole discretion, at any
time and from time to time, to extend the period during which the Offer is open
for any reason, including the occurrence of any of the conditions specified in
Section 14, by giving written notice of such extension to the Depositary. During
any such extension, all Shares previously tendered and not properly withdrawn
will remain subject to the Offer, subject to the rights of a tendering
stockholder to withdraw such stockholder's Shares. See Section 4.
Subject to the applicable regulations of the Commission, the Purchaser also
reserves the right, in its sole discretion, at any time or 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 approvals specified in Section 15, (ii) to terminate the Offer
(whether or not any Shares have theretofore been
5
<PAGE> 8
accepted for payment) if any of the conditions referred to in Section 14 has not
been satisfied or upon the occurrence of any of the events specified in Section
14, and (iii) to waive any condition or otherwise amend the Offer in any
respect, in each case by giving written notice of such delay, termination,
waiver or amendment to the Depositary and by making a public announcement
thereof. The Purchaser acknowledges that (i) Rule 14e-1(c) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") requires the Purchaser to
pay the consideration offered or return the Shares tendered promptly after the
termination or withdrawal of the Offer and (ii) the Purchaser may not delay
acceptance for payment of, or payment for (except as provided in clause (i) of
the preceding sentence), 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, and such
announcement in the case of an extension will be made no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date. Without limiting the manner in which the Purchaser may choose
to make any public announcement, except as provided by applicable law (including
Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require that material
changes be promptly disseminated to holders of Shares), the Purchaser shall have
no obligation to publish, advertise or otherwise communicate any such public
announcement other than by issuing a release to the Dow Jones News Service.
If the Purchaser makes a material change in the terms of the Offer or if it
waives a material condition of the Offer, the Purchaser will extend the Offer to
the extent required by Rules 14d-4(c) and 14d-6(d) under the Exchange Act. The
minimum period during which an offer must remain open following material changes
in the terms of the offer, other than a change in price or a change in the
percentage of securities sought, will depend upon the facts and circumstances,
including the materiality, of the changes. With respect to a change in price or,
subject to certain limitations, a change in the percentage of securities sought,
a minimum ten business day period from the day of such change is generally
required to allow for adequate dissemination to stockholders. Accordingly, if
prior to the Expiration Date the Purchaser decreases the number of Shares being
sought or increases or decreases the consideration offered pursuant to the
Offer, and if the Offer is scheduled to expire at any time earlier than the
period ending on the tenth business day from the date that notice of such
increase or decrease is first published, sent or given to stockholders, then the
Offer will be extended at least until the expiration of such ten business days
period. For purposes of the Offer, a "business day" means any day other than a
Saturday, Sunday or a federal holiday and consists of the time period from 12:01
a.m. through 12:00 Midnight, New York City time.
A demand under New York law has been made to the Company for its list of
stockholders and security position listings for the purpose of, among other
things, disseminating the Offer to holders of Shares. Upon compliance by the
Company with such request, this Offer to Purchase and the related Letter of
Transmittal and, if required, other relevant materials will be mailed to record
holders of Shares whose names appear on the Company's list of stockholders and
will be furnished to brokers, dealers, commercial banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on the list
of stockholders or who are listed as participants in a clearing agency's
security position listing for subsequent transmittal to beneficial owners of
Shares. On May 8, 1995, a request also was made to the Company pursuant to Rule
14d-5 under the Exchange Act for use of the Company's stockholder list and
security position listings.
SECTION 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms
and subject to the conditions of the Offer (including, if the Offer is extended
or amended, the terms and conditions of any such extension or amendment), the
Purchaser will accept for payment and will pay for all Shares validly tendered
and not properly withdrawn on or prior to the Expiration Date as soon as
practicable after the later to occur of (i) the Expiration Date and (ii) the
satisfaction or waiver of the conditions of the Offer set forth in Section 14,
including without limitation the expiration or termination of the waiting period
applicable to the acquisition of Shares pursuant to the Offer under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"). In addition, subject to applicable rules of the Commission, the Purchaser
expressly reserves the right to delay acceptance for payment of or payment for
Shares pending receipt of any other regulatory approvals specified in Section
15.
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<PAGE> 9
The Parent intends to file on the date hereof 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, the waiting period under the HSR
Act applicable to the Offer will expire at 11:59 p.m., New York City time, on
Tuesday, May 23, 1995, unless prior to the expiration or termination of the
waiting period the FTC or the Antitrust Division extends the waiting period by
requesting additional information or documentary material from the Parent. If
such a request is made, the waiting period applicable to the Offer will expire
on the tenth calendar day after the date of substantial compliance by the Parent
with such request. Thereafter, the waiting period may be extended by court order
or by consent of the Parent. The waiting period under the HSR Act may be
terminated by the FTC and the Antitrust Division prior to its expiration. For
information with respect to approvals required to be obtained prior to the
consummation of the Offer, including under the HSR Act, see Section 15.
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)
Share Certificates for such Shares and, if applicable, Rights Certificates, or
timely confirmation (a "Book-Entry Confirmation") of a book-entry transfer of
such Shares and, if applicable, Rights into the Depositary's account at The
Depository Trust Company, the Midwest Securities Trust Company or the
Philadelphia Depository Trust Company (each a "Book-Entry Transfer Facility"
and, collectively, the "Book-Entry Transfer Facilities") 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 an Agent's Message (as defined below) in connection
with a book-entry transfer, and (iii) any other documents required by the Letter
of Transmittal.
The term "Agent's Message" means a message from a Book-Entry Transfer
Facility transmitted to and received by the Depositary and forming a part of a
Book-Entry Confirmation, which states that (i) the Book-Entry Transfer Facility
has received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares and, if applicable, Rights that are the
subject of the Book-Entry Confirmation, (ii) the participant has received and
agrees to be bound by the terms of the Letter of Transmittal and (iii) the
Purchaser may enforce such agreement against the participant.
Unless and until the Purchaser declares that the Rights Condition is
satisfied, if Rights Certificates have been distributed to holders of Shares,
then holders are required to tender, or make book-entry transfer of, Rights
Certificates representing a number of Rights equal to the number of Shares being
tendered in order to effect a valid tender of such Shares.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when the Purchaser gives verbal or written notice to the
Depositary of the Purchaser's acceptance for payment of such Shares pursuant to
the Offer. Upon the terms and subject to the conditions of the Offer, payment
for Shares accepted for payment pursuant to the Offer will be made by deposit of
the purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payments from the Purchaser
and transmitting those payments to 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 ANY DELAY IN MAKING
SUCH PAYMENT. If for any reason whatsoever acceptance for payment of or payment
for any Shares tendered pursuant to the Offer is delayed or the Purchaser is
unable to accept for payment or pay for Shares tendered pursuant to the Offer,
then, without prejudice to the Purchaser's rights set forth herein, the
Depositary may, nevertheless, on behalf of the Purchaser retain tendered Shares,
and those Shares may not be withdrawn except to the extent that the tendering
stockholder is entitled to exercise and duly exercises withdrawal rights as
described in Section 4; subject, however, to the Purchaser's obligation under
Rule 14e-1(c) under the Exchange Act to pay for Shares tendered or return those
Shares promptly after termination or withdrawal of the Offer.
If any tendered Shares are not accepted for payment for any reason or if
Share Certificates are submitted for more Shares than are tendered, Share
Certificates evidencing unpurchased or untendered 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 a Book-Entry Transfer
Facility pursuant to the procedures set forth in
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<PAGE> 10
Section 3, those Shares will be credited to an account maintained at the
Book-Entry Transfer Facility), in each case with the related Rights
Certificates, if any, as promptly as practicable following the expiration,
termination or withdrawal of the Offer. In the event separate Rights
Certificates are issued, similar action will be taken with respect to
unpurchased and untendered Rights.
IF PRIOR TO THE EXPIRATION DATE THE PURCHASER INCREASES THE CONSIDERATION
OFFERED TO STOCKHOLDERS PURSUANT TO THE OFFER, SUCH INCREASED CONSIDERATION WILL
BE PAID TO ALL STOCKHOLDERS WHOSE SHARES ARE PURCHASED PURSUANT TO THE OFFER,
REGARDLESS OF WHETHER THOSE SHARES WERE TENDERED OR ACCEPTED FOR PAYMENT PRIOR
TO THE INCREASE IN CONSIDERATION.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to one or more of the Purchaser's affiliates, the right to
purchase all or any portion of the Shares and, if applicable, Rights tendered
pursuant to the Offer, but any such transfer or assignment will not relieve the
Purchaser of its obligations under the Offer or prejudice the rights of
tendering stockholders to receive payment for Shares validly tendered and
accepted for payment pursuant to the Offer.
SECTION 3. PROCEDURE FOR TENDERING SHARES AND RIGHTS.
Valid Tender. Except as set forth below, in order for Shares and, prior to
the Distribution Date, Rights to be validly tendered pursuant to the Offer, (i)
the Letter of Transmittal (or a facsimile thereof), properly completed and duly
executed, together with any required signature guarantees, or an Agent's Message
in connection with a book-entry delivery of Shares and Rights, 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 on or prior to the Expiration Date and (ii) either (a) Share
Certificates and, if applicable, Rights Certificates evidencing tendered Shares
and Rights must be received by the Depositary at such address, or the Shares and
Rights must be tendered pursuant to the procedure for book-entry transfer
described below and a Book-Entry Confirmation must be received by the
Depositary, in each case on or prior to the Expiration Date, or (b) the
guaranteed delivery procedures described below must be complied with.
If the Purchaser declares that the Rights Condition is satisfied, the
Purchaser will not require delivery of Rights Certificates. Unless and until the
Purchaser declares that the Rights Condition is satisfied, holders of Shares
will be required to tender one Right for each Share tendered in order to effect
a valid tender of such Share. ACCORDINGLY, STOCKHOLDERS WHO SELL THEIR RIGHTS
SEPARATELY FROM THEIR SHARES AND DO NOT OTHERWISE ACQUIRE RIGHTS MAY NOT BE ABLE
TO SATISFY THE REQUIREMENTS OF THE OFFER FOR A VALID TENDER OF SHARES.
To be assured of participation in this Offer, stockholders who have
tendered Shares pursuant to the ICI Tender Offer must withdraw their Shares from
that offer and tender them to the Purchaser. Included in the materials
accompanying this Offer to Purchase is a PINK Notice of Withdrawal which may be
used to withdraw Shares tendered pursuant to the ICI Tender Offer. STOCKHOLDERS
WHO DESIRE ASSISTANCE IN WITHDRAWING SHARES TENDERED PURSUANT TO THE ICI TENDER
OFFER MAY CONTACT THE INFORMATION AGENT AT THE ADDRESS AND TELEPHONE NUMBER SET
FORTH ON THE BACK COVER OF THIS OFFER TO PURCHASE.
Rights Certificates. If the Distribution Date has occurred and Rights
Certificates have been distributed prior to the date of tender pursuant to the
Offer, Rights Certificates representing a number of Rights equal to the number
of Shares being tendered must be delivered to the Depositary or, if available, a
Book-Entry Confirmation must be received by the Depositary with respect thereto,
in order for the Shares to be validly tendered. If the Distribution Date has
occurred and Rights Certificates have not been distributed prior to the time
Shares are tendered pursuant to the Offer, Rights may be tendered prior to a
stockholder receiving Rights Certificates by use of the guaranteed delivery
procedures described below. A tender of Shares without Rights Certificates
constitutes an agreement by the tendering stockholder to deliver Rights
Certificates representing a number of Rights equal to the number of Shares
tendered pursuant to the Offer to the Depositary within five business days after
the date such Rights Certificates are distributed. If the Rights Condition is
not satisfied and the Distribution Date occurs prior to the Expiration Date, the
Purchaser reserves the right to require that the Depositary receive the Rights
Certificates or a Book-Entry Confirmation with respect to the Rights prior to
accepting Shares for payment. In that event, payment for Shares tendered and
accepted for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of, or Book-Entry Confirmation
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<PAGE> 11
with respect to, among other things, Rights Certificates, if Rights Certificates
have been distributed to holders of Shares. See Section 1.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES OR RIGHTS CERTIFICATES (IF
APPLICABLE) AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY
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.
Book-Entry Transfer. The Depositary will make a request to establish
accounts with respect to the Shares at the Book-Entry Transfer Facilities 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 any
Book-Entry Transfer Facility may make 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 such Book-Entry
Transfer Facility's transfer procedures. However, although delivery of Shares
may be effected through book-entry transfer at a Book-Entry Transfer Facility,
the Letter of Transmittal (or a facsimile thereof), properly completed and duly
executed, together with any required signature guarantees, or an Agent's Message
in connection with a book-entry transfer, and any other documents required by
the Letter of Transmittal, 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 on or
prior to the Expiration Date, or the guaranteed delivery procedures described
below must be complied with.
If the Distribution Date occurs, to the extent that the Rights become
eligible for book-entry transfer under procedures established by a particular
Book-Entry Transfer Facility, the Depositary will make a request to establish an
account with respect to the Rights at such Book-Entry Transfer Facility as soon
as practicable. If book-entry delivery of Rights is available, the foregoing
book-entry transfer procedure will also apply to Rights. However, no assurance
can be given that book-entry delivery of Rights will be available. If book-entry
delivery is not available and if separate Rights Certificates have been issued,
a tendering stockholder is not relieved of delivery requirements hereunder and
thus will be required to tender Rights by means of actual physical delivery of
Rights Certificates to the Depositary (in which event references in this Offer
to Purchase to Book-Entry Confirmations with respect to Rights will be
inapplicable) or pursuant to the guaranteed delivery procedures set forth below.
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH
THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
Signature Guarantees. Signatures on Letters of Transmittal must be
guaranteed by a firm which is a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the Securities
Transfer Agents Medallion Program (each of the foregoing being referred to as an
"Eligible Institution"), except in cases where Shares and/or Rights are tendered
(i) by a registered holder of Shares and/or Rights who has not completed either
the box labeled "Special Payment Instructions" or the box labeled "Special
Delivery Instructions" on the Letter of Transmittal or (ii) for the account of
an Eligible Institution. See Instruction 1 of the Letter of Transmittal.
If the Share Certificates or Rights Certificates are registered in the name
of a person other than the person who signs the Letter of Transmittal, or if
payment is to be made, or Share Certificates or Rights Certificates not accepted
for payment or not tendered are to be returned, to a person other than the
registered holder, the Share Certificates or Rights Certificates, as the case
may be, must be endorsed or accompanied by appropriate stock powers, in either
case, signed exactly as the name of the registered holder appears on such
certificates, with the signatures on such certificates or stock powers
guaranteed as provided above. See Instructions 1 and 5 of the Letter of
Transmittal.
If Share Certificates and Rights Certificates are forwarded separately to
the Depositary, a properly completed and duly executed Letter of Transmittal (or
a facsimile thereof) must accompany each delivery.
Guaranteed Delivery. If a stockholder desires to tender Shares and Rights
pursuant to the Offer and the stockholder's Share Certificates or Rights
Certificates are not immediately available (including because
9
<PAGE> 12
Rights Certificates have not yet been distributed by the Company), or the
stockholder cannot deliver the Share Certificates or Rights Certificates and all
other required documents to reach the Depositary on or prior to the Expiration
Date, or the stockholder cannot complete the procedure for delivery by
book-entry transfer on a timely basis, then the stockholder's Shares and Rights
may nevertheless be tendered, provided that all of the following conditions are
satisfied:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by the Purchaser, is
received by the Depositary as provided below on or prior to the Expiration
Date; and
(iii) the Share Certificates or Rights Certificates, as the case may
be (or a Book-Entry Confirmation), representing all tendered Shares or
Rights, 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 (a) in
the case of Shares, five New York Stock Exchange, Inc. ("NYSE") trading
days after the date of execution of the Notice of Guaranteed Delivery or
(b) in the case of Rights, a period ending on the later of (1) five NYSE
trading days after the date of execution of the Notice of Guaranteed
Delivery or (2) five business days after the date the Rights Certificates
are distributed to stockholders of the Company.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, telex, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution and a representation that the
stockholder owns the Shares and, if applicable, Rights tendered within the
meaning of, and that the tender of the Shares and, if applicable, Rights
effected thereby complies with, Rule 14e-4 under the Exchange Act, each in the
form set forth in such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) Share Certificates for, or of Book-Entry
Confirmation with respect to, tendered Shares, and if the Distribution Date has
occurred, Rights Certificates for, or a Book-Entry Confirmation if available
with respect to, the associated Rights (unless the Purchaser elects, in its sole
discretion, to make payment for the Shares pending receipt of the Rights
Certificates for, or a Book-Entry Confirmation with respect to, the Rights),
(ii) a properly completed and duly executed Letter of Transmittal (or a
facsimile thereof), together with any required signature guarantees (or, in the
case of a book-entry transfer, an Agent's Message), and (iii) any other
documents required by the Letter of Transmittal. Accordingly, payment might not
be made to all tendering stockholders at the same time and will depend upon when
Share Certificates (or Rights Certificates, if applicable) are received by the
Depositary or Book-Entry Confirmations of tendered Shares (or Rights, if
available) are received into the Depositary's account at a Book-Entry Transfer
Facility.
If the Rights Condition is satisfied, the guaranteed delivery procedure
with respect to Rights Certificates and the requirement for the tender of Rights
will no longer apply.
Appointment as Proxy. By executing the Letter of Transmittal, a tendering
stockholder irrevocably appoints the Purchaser, its officers and its designees,
and each of them, as the stockholder's attorneys-in-fact and proxies, with full
power of substitution, in the manner set forth in the Letter of Transmittal, to
the full extent of the stockholder's rights with respect to the Shares and
Rights tendered by the stockholder and accepted for payment by the Purchaser
(and with respect to any and all other Shares or Rights or other securities
issued or issuable in respect of the Shares or the Rights on or after the date
hereof). All such powers of attorney and proxies shall be considered irrevocable
and coupled with an interest in the tendered Shares and Rights. Such appointment
will be effective when, and only to the extent that, the Purchaser accepts such
Shares and Rights for payment. Upon such acceptance for payment, all prior
powers of attorney and proxies given by the stockholder with respect to the
Shares and Rights (and such other shares and securities) will, without further
action, be revoked, and no subsequent powers of attorney, proxies or written
consents may be given or executed (and, if given or executed will not be deemed
effective). The Purchaser, its officers and its
10
<PAGE> 13
designees will, with respect to the Shares and Rights (and such other shares and
securities) for which such appointment is effective, be empowered to exercise
all voting and other rights of the stockholder as they in their sole discretion
may deem proper at any annual or special meeting of the Company's stockholders
or any adjournment or postponement thereof, by written consent in lieu of any
such meeting or otherwise. The Purchaser reserves the right to require that, in
order for Shares and Rights to be deemed validly tendered, immediately upon the
Purchaser's payment for such Shares and Rights, the Purchaser must be able to
exercise full voting rights with respect to the Shares, Rights and other
securities, including voting at any meeting of stockholders.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares and Rights will be determined by the Purchaser in its sole discretion,
which determination shall be final and binding on all parties. The Purchaser
reserves the absolute right to reject any and all tenders determined by it not
to be in proper form or the acceptance for payment of which may in the opinion
of its counsel be unlawful. The Purchaser also reserves the absolute right to
waive any of the conditions of the Offer or any defect or irregularity in any
tender of Shares and Rights of any particular stockholder whether or not similar
defects or irregularities are waived in the case of other stockholders. No
tender of Shares will be deemed to have been validly made until all defects and
irregularities have been cured or waived. None of the Purchaser, the Parent, any
of their affiliates or assigns, 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. The 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.
BACKUP FEDERAL INCOME TAX WITHHOLDING AND SUBSTITUTE FORM W-9. UNDER THE
"BACKUP WITHHOLDING" PROVISIONS OF FEDERAL INCOME TAX LAW, THE DEPOSITARY MAY BE
REQUIRED TO WITHHOLD 31% OF THE AMOUNT OF ANY PAYMENTS OF CASH PURSUANT TO THE
OFFER. IN ORDER TO AVOID BACKUP WITHHOLDING, EACH STOCKHOLDER SURRENDERING
SHARES IN THE OFFER MUST PROVIDE THE PAYOR OF SUCH CASH WITH THE STOCKHOLDER'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 THE
STOCKHOLDER IS NOT SUBJECT TO BACKUP WITHHOLDING. CERTAIN STOCKHOLDERS
(INCLUDING AMONG OTHERS ALL CORPORATIONS AND CERTAIN FOREIGN INDIVIDUALS AND
ENTITIES) ARE NOT SUBJECT TO BACKUP WITHHOLDING. IF A STOCKHOLDER DOES NOT
PROVIDE ITS CORRECT TIN OR FAILS TO PROVIDE THE CERTIFICATIONS DESCRIBED ABOVE,
THE INTERNAL REVENUE SERVICE ("IRS") MAY IMPOSE A PENALTY ON THE STOCKHOLDER AND
PAYMENT OF CASH TO THE STOCKHOLDER PURSUANT TO THE OFFER MAY BE SUBJECT TO
BACKUP WITHHOLDING. ALL STOCKHOLDERS SURRENDERING SHARES PURSUANT TO THE OFFER
SHOULD COMPLETE AND SIGN THE SUBSTITUTE FORM W-9 INCLUDED IN 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 DEPOSITARY). NONCORPORATE FOREIGN STOCKHOLDERS 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 OF THE LETTER OF TRANSMITTAL.
Other Requirements. The Purchaser's acceptance for payment of Shares and,
if applicable, Rights tendered pursuant to any of the procedures described above
will constitute a binding agreement between the tendering stockholder and the
Purchaser upon the terms and subject to the conditions of the Offer, including
the tendering stockholder's representation and warranty that the stockholder is
the holder of the Shares within the meaning of, and that the tender of the
Shares and Rights complies with, Rule 14e-4 under the Exchange Act.
SECTION 4. WITHDRAWAL RIGHTS. Tenders of Shares and Rights made pursuant
to the Offer are irrevocable, except that Shares and Rights tendered pursuant to
the Offer may be withdrawn at any time on or prior to the Expiration Date and,
unless already accepted for payment by the Purchaser pursuant to the Offer, may
also be withdrawn at any time after July 6, 1995 (or such later date as may
apply in case the Offer is extended). If the Purchaser extends the Offer, is
delayed in its acceptance for payment of Shares and Rights or is unable to
purchase Shares and Rights validly tendered pursuant to the Offer for any
reason, then, without prejudice to the Purchaser's rights under the Offer,
tendered Shares may be returned by the Depositary on behalf of the Purchaser,
and may not be withdrawn except to the extent that tendering stockholders are
11
<PAGE> 14
entitled to withdrawal rights as set forth in this Section 4; subject, however,
to the Purchaser's obligation, pursuant to Rule 14e-1(c) under the Exchange Act,
to pay for the tendered Shares or return those Shares promptly after termination
or withdrawal of the Offer. Any such delay will be accompanied by an extension
of the Offer to the extent required by law.
For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase. Any notice of withdrawal must specify the name of the person who
tendered the Shares or Rights to be withdrawn, the number of Shares or Rights to
be withdrawn and the name of the registered holder, if different from that of
the person who tendered the Shares or Rights. If Share Certificates or Rights
Certificates to be withdrawn have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of such certificates, the serial
numbers shown on the certificates must be submitted to the Depositary and the
signatures on the notice of withdrawal must be guaranteed by an Eligible
Institution, unless such Shares or Rights have been tendered for the account of
any Eligible Institution. If Shares or Rights have been tendered pursuant to the
procedure for book-entry transfer as set forth in Section 3, any notice of
withdrawal must specify the name and number of the account at the Book-Entry
Transfer Facility to be credited with the withdrawn Shares or Rights, in which
case a notice of withdrawal will be effective if delivered to the Depositary by
any method of delivery described in the first sentence of this paragraph. A
withdrawal of Shares or Rights shall also constitute a withdrawal of the
associated Rights or Shares, as applicable.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding. None of the
Purchaser, the Parent, any of their affiliates or assigns, 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 Shares and Rights may not be rescinded. Any Shares or Rights
properly withdrawn will thereafter be deemed not to have been validly tendered
for purposes of the Offer. However, withdrawn Shares or Rights may be
re-tendered at any time prior to the Expiration Date by following one of the
procedures described in Section 3.
SECTION 5. CERTAIN FEDERAL INCOME TAX MATTERS. The summary of tax
consequences set forth below is for general information only and is based on the
law as currently in effect. The tax treatment of each stockholder will depend in
part upon such stockholder's particular situation. Special tax consequences not
described herein may be applicable to particular classes of taxpayers, such as
financial institutions, broker-dealers, persons who are not citizens or
residents of the United States, stockholders who acquired their Shares through
the exercise of an employee stock option or otherwise as compensation and
persons who received payments in respect of options to acquire Shares. ALL
STOCKHOLDERS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX
CONSEQUENCES OF THE OFFER AND THE MERGER TO THEM, INCLUDING THE APPLICABILITY
AND EFFECT OF THE ALTERNATIVE MINIMUM TAX AND ANY STATE, LOCAL OR FOREIGN INCOME
AND OTHER TAX LAWS AND CHANGES IN SUCH TAX LAWS.
The receipt of cash pursuant to the Offer or the Merger will be a taxable
transaction for Federal income tax purposes under the Internal Revenue Code of
1986, as amended, and may also be a taxable transaction under applicable state,
local, foreign income or other tax laws. Generally, a tendering stockholder will
recognize gain or loss in an amount equal to the difference between the cash
received by the stockholder pursuant to the Offer or the Merger and the
stockholder's adjusted tax basis in the Shares and the Rights tendered by the
stockholder and purchased pursuant to the Offer or the Merger. For federal
income tax purposes, such gain or loss will be a capital gain or loss if the
Shares are a capital asset in the hands of the stockholder, and a long-term
capital gain or loss if the stockholder's holding period is more than one year
as of the date the Purchaser accepts such Shares for payment pursuant to the
Offer or the effective date of the Merger, as the case may be. There are
limitations on the deductibility of capital losses.
Proposals have recently been introduced in the House of Representatives and
the Senate to reduce the effective tax rates applicable to net long-term capital
gains. Additionally, the proposals would further limit the
12
<PAGE> 15
deduction for long-term capital losses. These proposals would apply generally to
transactions effected after December 31, 1994. Therefore, if these proposals
were enacted into law, gains from sales of Shares pursuant to the Offer which
constituted long-term capital gains would generally be taxed at reduced
effective tax rates. However, there can be no assurance that these proposals
will be enacted and, if they are enacted, the effective dates of the proposals
or the particular type of transactions or assets to which the proposals apply or
other aspects of the proposals could be modified. If the proposals were enacted
with an effective date subsequent to the Expiration Date of the Offer, sales of
Shares pursuant to the Offer which constituted long-term capital gains would be
taxed at the higher rates currently in effect. Shareholders should consult their
tax advisors about the impact of this proposed legislation.
SECTION 6. PRICE RANGE OF SHARES; DIVIDENDS. According to the Company's
Annual Report on Form 10-K for the year ended June 30, 1994 (the "1994 Annual
Report"), the Shares are listed and traded principally on the NYSE. The
following table sets forth, for the quarters indicated, (i) the high and low
sales prices per Share on the NYSE as reported in the 1994 Annual Report with
respect to periods occurring in the Company's fiscal years ended June 30, 1993
and 1994 and as reported by the Dow Jones News Service for subsequent periods,
and (ii) the amounts of cash dividends paid per Share for each quarter, based on
publicly available sources.
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
---- ---- ---------
<S> <C> <C> <C>
Fiscal Year Ended June 30, 1993:
First Quarter................................................... $ 14 $11 3/4 $ .06
Second Quarter.................................................. 14 1/2 11 3/8 .06
Third Quarter................................................... 14 3/4 11 3/4 .06
Fourth Quarter.................................................. 17 7/8 13 1/4 .06
Fiscal Year Ended June 30, 1994:
First Quarter................................................... 17 3/8 13 1/2 .07
Second Quarter.................................................. 16 3/4 13 3/4 .07
Third Quarter................................................... 18 7/8 15 .07
Fourth Quarter.................................................. 19 3/4 14 7/8 .07
Fiscal Year Ending June 30, 1995:
First Quarter................................................... 17 5/8 14 .07
Second Quarter.................................................. 17 5/8 12 5/8 .07
Third Quarter................................................... 16 1/4 13 .07
Fourth Quarter (through May 5, 1995)............................ 19 5/8 15 1/2
</TABLE>
On January 26, 1995, the last full day of trading prior to the announcement
by the Company that it had engaged Wertheim Schroder to assist the Company in
considering and reviewing alternatives to enhance shareholder value, the
reported closing sales price per Share on the NYSE was $15 7/8. On April 27,
1995, the last full day of trading prior to the announcement by the Company that
it had entered into negotiations with a third party which had proposed to
acquire 100% of the Shares and indicated a willingness to pay the Company's
public shareholders $18.10 per Share in cash, the reported closing sales price
per Share on the NYSE was $16 7/8. On May 3, 1995, the last full day of trading
prior to the commencement of the ICI Tender Offer, the reported closing sale
price per Share on the NYSE was $17 7/8. On May 5, 1995, the last full day of
trading prior to commencement of the Offer, the reported closing sales price per
share on the NYSE was $19 1/2. The Offer represents a 22.83% premium over the
closing sale price of $15 7/8 on January 26, 1995, a 15.56% premium over the
closing sale price of $16 7/8 on April 27, 1995, and a 7.7% premium over the ICI
Tender Offer price of $18.10 per Share. STOCKHOLDERS ARE URGED TO OBTAIN A
CURRENT MARKET QUOTATION FOR THE SHARES.
The Purchaser believes, based on publicly available information, that the
Rights are currently attached to the outstanding Shares and may not be traded
separately. As a result of the commencement of the Offer, the Distribution Date
may be as early as May 19, 1995, after which the Rights could begin trading
separately from the Shares. See Section 11. IN SUCH EVENT, STOCKHOLDERS ARE
URGED TO OBTAIN A CURRENT MARKET QUOTATION, IF
13
<PAGE> 16
AVAILABLE, FOR THE RIGHTS. Unless and until the Purchaser declares that the
Rights Condition is satisfied, holders of Shares will be required to tender one
Right for each Share tendered in order to effect a valid tender of such Share.
Accordingly, stockholders who sell their Rights separately from their Shares and
do not otherwise acquire Rights may not be able to satisfy the requirements of
the Offer for a valid tender of Shares.
SECTION 7. CERTAIN INFORMATION CONCERNING THE COMPANY. The information
concerning the Company contained in this Offer to Purchase, including financial
information, has been taken from or based upon publicly available documents and
records on file with the Commission and other public sources. The summary
information concerning the Company in this Section 7 and elsewhere in this Offer
to Purchase is derived from the 1994 Annual Report, other filings subsequently
made by the Company with the Commission and other publicly available
information. The summary information set forth below is qualified in its
entirety by reference to those filings (which may be obtained and inspected as
described below) and should be considered in conjunction with the more
comprehensive financial and other information in those filings made by the
Company with the Commission and other publicly available information. Although
the Purchaser and the Parent do not have any knowledge that would indicate that
any statements contained herein based upon those reports are untrue, neither the
Purchaser nor the Parent assumes any responsibility for the accuracy or
completeness of the information contained therein, or for any failure by the
Company to disclose events that may have occurred and may affect the
significance or accuracy of any such information but which are unknown to the
Purchaser and the Parent.
General. The Company is a New York corporation and is the successor to
certain corporations, the first of which was organized in 1950. The Company's
principal executive offices are located at 200 Park Avenue, New York, New York
10166, and its telephone number is (212) 599-4400.
According to the 1994 Annual Report, the Company is principally engaged in
manufacturing architectural and special purpose paints and coatings. The Company
is also engaged in manufacturing certain household products.
Financial Information. Set forth below are certain selected consolidated
financial data for the Company's last three fiscal years which were derived from
the 1994 Annual Report, the Company's Quarterly Report on Form 10-Q for the
period ended December 31, 1994 filed with the Commission and other sources. More
comprehensive financial information is included in the reports (including
management's discussion and analysis of financial condition and results of
operations) and other documents filed by the Company with the Commission, and
the following financial data is qualified in its entirety by reference to such
reports and other documents including the financial information and related
notes contained therein. Such reports and other documents may be examined and
copies thereof may be obtained from the offices of the Commission and the NYSE
in the manner set forth below.
14
<PAGE> 17
GROW GROUP, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
FISCAL YEAR ENDED JUNE 30, DECEMBER 31,
---------------------------------- ---------------------
1994 1993 1992 1994 1993
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues From Continuing
Operations........................ $401,818 $365,464 $374,202 $246,239 $197,386
Costs and Expenses.................. 377,583 347,394 359,951 236,900 187,016
Income From Continuing Operations
Before Income Taxes............... 24,235 18,070 14,251 9,339 10,370
Net Income.......................... 14,056 12,472 9,132 5,417 6,015
Net Income Per Common and Common
Equivalent Share.................. 0.87 0.90 0.78 0.34 0.37
Average Shares...................... 16,116 13,850 11,705 16,148 16,085
</TABLE>
<TABLE>
<CAPTION>
AT JUNE 30, AT DECEMBER 31,
---------------------------------- ---------------------
1994 1993 1992 1994 1993
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Current Assets...................... $187,393 $187,774 $174,410 $170,257 $163,476
Total Assets........................ 247,921 233,869 233,491 277,767 224,736
Current Liabilities................. 80,146 76,844 96,196 78,971 74,930
Working Capital..................... 107,247 110,930 78,214 91,286 88,546
Long-Term Debt...................... 914 2,135 72,066 28,861 2,132
Shareholder's Equity................ 138,683 128,569 54,955 141,994 133,036
</TABLE>
In addition, on May 1, 1995, the Company issued a press release containing
the following information concerning the interim results for the quarter ending
March 31, 1995:
GROW GROUP, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED MARCH THREE MONTHS ENDED
31, MARCH 31,
----------------------- -----------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues.................................. $364,063(a) $288,566 $117,824(a) $ 91,180
Net Income................................ 4,548(a) 7,292 (868)(a) 1,278
Income Per Share.......................... 0.28 0.45 (0.05) 0.08
Average Shares (primary).................. 16,150 16,100 16,144 16,155
- ---------------
<FN>
(a) Includes the results of operations of Sinclair Paint Company acquired August
1, 1994.
</TABLE>
The Shares are registered under the Exchange Act. Accordingly, the Company
is subject to the informational filing requirements of the Exchange Act and in
accordance therewith is obligated to file periodic reports, proxy statements and
other information with the Commission relating to its business, financial
condition and other matters. Information as of particular dates concerning the
Company's directors and officers, their remuneration, options granted to them,
the principal holders of the Company's securities and any material interest of
such persons in transactions with the Company is required to be disclosed in
such proxy statements and distributed to the Company's stockholders and filed
with the Commission. Such reports,
15
<PAGE> 18
proxy statements and other information should be available for inspection at the
public reference facilities of the Commission located in Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and should also be available for
inspection and copying at prescribed rates at the regional offices of the
Commission located at Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and Seven World Trade Center, Suite 1300, New York, New
York 10048. Copies of this material may also be obtained by mail, upon payment
of the Commission's customary fees, from the Commission's principal office at
450 Fifth Street, N.W., Washington, D.C. 20549. In addition, such material
should also be available for inspection at the library of the NYSE, 20 Broad
Street, New York, New York 10005. Except as otherwise noted in this Offer to
Purchase, all of the information with respect to the Company set forth in this
Offer to Purchase has been derived from publicly available information.
SECTION 8. CERTAIN INFORMATION CONCERNING THE PURCHASER AND THE
PARENT. The Purchaser, a New York corporation and a wholly-owned subsidiary of
the Parent, was organized in connection with the Offer and has not carried on
any activities to date other than those incident to its formation and the
commencement of the Offer. The principal executive offices of the Purchaser and
the Parent are located at 101 Prospect Avenue, N.W., Cleveland, Ohio 44115, and
the telephone number is (216) 566-2000.
The Parent, which was first incorporated under the laws of the State of
Ohio eighteen years after its founding in 1866, is engaged in the manufacture,
distribution and sale of coatings and related products, including paint, motor
vehicle finish and refinish products, aerosols and paint applicators, to
professional, industrial, commercial and retail customers throughout North
America. The Parent's business is divided into three segments: the Paint Stores
Segment, which exclusively distributes Sherwin-Williams(R) branded products and
related items, the Coatings Segment, which participates in the manufacture,
distribution and/or sale of coatings and related products, and the Other
Segment, which is responsible for the acquisition, development, leasing and
management of properties for use by the Company and others. Trademarks and trade
names used by the Parent's Paint Stores and Coatings Segments include
Sherwin-Williams(R), Dutch Boy(R), Kem-Tone(R), Martin-Senour(R), Cuprinol(R),
Old Quaker(R), Acme(R), Standox(R), Krylon(R) and Dupli-Color(R).
The name, citizenship, business address, principal occupation or employment
and five year employment history of each of the directors and executive officers
of the Purchaser and the Parent and certain other information are set forth in
Schedule I to this Offer to Purchase.
Set forth below are certain selected consolidated financial data relating
to the Parent and its subsidiaries for the Parent's last three fiscal years
which have been derived from the financial statements contained in the Parent's
Annual Report on Form 10-K for the fiscal year ended December 31, 1994 and its
Quarterly Report on Form 10-Q for the period ended March 31, 1995 filed by the
Parent with the Commission. More comprehensive financial information is included
in the reports (including management's discussion and analysis of financial
condition and results of operations) and other documents filed by the Parent
with the Commission, and the following financial data is qualified in its
entirety by reference to such reports and other documents, including the
financial information and related notes contained therein. Such reports and
other documents may be examined and copies thereof may be obtained from the
offices of the Commission and the NYSE in the same manner as set forth with
respect to information about the Company in Section 7.
16
<PAGE> 19
THE SHERWIN-WILLIAMS COMPANY
SELECTED CONSOLIDATED FINANCIAL DATA
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
---------------------------------- ---------------------
1994 1993 1992 1995 1994
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net Sales..................... $3,100.1 $2,949.3 $2,747.8 $ 716.8 $ 639.2
Income Before Income Taxes and
the Cumulative Effects of
Changes in Accounting
Methods(1).................. 298.5 264.4 226.0 29.7 25.2
Income Before the Cumulative
Effects of Changes in
Accounting Methods(1)....... 186.6 165.2 144.6 18.7 15.5
Net Income.................... 186.6 165.2 62.9 18.7 15.5
Income Per Share Before the
Cumulative Effects of
Changes in Accounting
Methods(1).................. 2.15 1.85 1.63 .22 .17
Net Income Per Share.......... 2.15 1.85 .71 .22 .17
</TABLE>
<TABLE>
<CAPTION>
AT DECEMBER 31, AT MARCH 31,
---------------------------------- ---------------------
1994 1993 1992 1995 1994
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash & Short-Term
Investments(2).............. $ 251.4 $ 269.8 $ 167.7 $ 138.0 $ 133.9
Total Current Assets.......... 1,188.6 1,151.1 988.2 1,208.7 1,122.9
Total Non-Current Assets...... 773.4 763.6 741.7 794.3 773.4
Total Assets.................. 1,962.0 1,914.7 1,729.9 2,003.0 1,896.3
Total Current Liabilities..... 597.0 553.6 490.1 651.4 569.2
Long-Term Debt................ 20.5 37.9 60.1 20.8 36.7
Other Long-Term Liabilities... 291.2 290.0 273.8 269.2 274.8
Total Liabilities............. 908.7 881.5 824.0 941.4 880.7
Shareholders' Equity.......... 1,053.3 1,033.2 905.9 1,061.6 1,015.6
- ---------------
<FN>
(1) The cumulative effects of changes in accounting methods resulted from the
adoption of new accounting standards for Postretirement Benefits and Income
Taxes effective January 1, 1992.
(2) Cash and short-term investments are typically lower at March 31 than
December 31 due to the seasonality of inventories and paint sales.
</TABLE>
The Parent currently beneficially owns an aggregate of 700,000 Shares,
representing approximately 4.35% of the 16,101,712 Shares represented by the
Company in the ICI Merger Agreement to be outstanding at April 29, 1995, all of
which Shares were acquired by the Parent in the transactions described in
Schedule II to this Offer to Purchase.
Except as described in this Offer to Purchase and in Schedules I and II,
none of the Purchaser, the Parent nor, to the best knowledge of the Purchaser
and the Parent, any of the persons listed on Schedule I or any associate or
majority-owned subsidiary of the Purchaser, the Parent or any of the persons so
listed, beneficially owns or has a right to acquire directly or indirectly any
Shares, and none of the Purchaser, the Parent nor, to the best knowledge of the
Purchaser and the Parent, any of the persons or entities referred to above, or
any of the respective executive officers, directors or subsidiaries of any of
the foregoing, has effected any transactions in the Shares during the past 60
days.
17
<PAGE> 20
Various divisions, subsidiaries and affiliates of the Parent purchase
products from or sell products to various divisions and subsidiaries of the
Company, in all cases in amounts which are not material. Except as set forth in
this Offer to Purchase, neither the Purchaser nor the Parent or, to the best
knowledge of the Purchaser and the Parent, any of the persons listed on Schedule
I, has any contract, arrangement, understanding or relationship with any other
person with respect to any securities of the Company, including but not limited
to contracts, arrangements, understandings or relationships concerning the
transfer or voting of such securities, joint ventures, loan or option
arrangements, puts or calls, guarantees of loans, guarantees against loss or the
giving or withholding of proxies. Except as set forth in this Offer to Purchase,
neither the Purchaser nor the Parent or, to the best knowledge of the Purchaser
and the Parent, any of the persons listed on Schedule I, has had since July 1,
1991 any business relationships or transactions with the Company or any of its
executive officers, directors or affiliates that are required to be reported
under the rules and regulations of the Commission applicable to the Offer.
Except as set forth in this Offer to Purchase, since July 1, 1991 there have
been no contacts, negotiations or transactions between any of the Parent, the
Purchaser or, to the best knowledge of the Purchaser and the Parent, any of the
persons listed in Schedule I, on the one hand, and the Company or its
affiliates, on the other hand, concerning a merger, consolidation or
acquisition, a tender offer or other acquisition of securities, an election of
directors, or a sale or other transfer of a material amount of assets.
SECTION 9. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required
by the Purchaser to purchase all of the outstanding Shares and pay related fees
and expenses is expected to be approximately $330 million. The Purchaser will
obtain those funds through capital contributions by the Parent. The indebtedness
under the Company's principal existing credit facility may be accelerated upon a
change of control transaction such as would occur on consummation of the Offer.
If the lenders under that facility elect to so accelerate the Company's
indebtedness, the Purchaser and the Parent will require additional funds to
repay that debt. The Company reported that at December 31, 1994, its total
long-term debt (including the current portion of long-term debt) was
$32,076,000.
The Parent has sufficient funds available to it, from cash on hand and
under its existing revolving credit facility and other sources, to fully fund
all of its requirements and the Purchaser's requirements in connection with the
Offer and the Merger. The Parent anticipates, however, that it will fund those
requirements principally with drawings under a new credit facility to be entered
into as described below. Texas Commerce Bank National Association ("Texas
Commerce") has delivered to the Parent a commitment to provide a 364-day
unsecured revolving credit facility (the "New Facility") under which the Parent
will be able to borrow up to $350 million to finance the acquisition of the
Company. Although Texas Commerce has committed to provide the entire amount of
the New Facility, it has advised the Parent that Chemical Securities, Inc.
("CSI") may endeavor to arrange a syndicate of financial institutions, for which
Texas Commerce would act as agent, to commit to a portion of the New Facility.
The Parent has agreed to pay advisory, arrangement and syndication fees to
Texas Commerce and CSI and to pay certain of their expenses. The Parent also has
agreed to indemnify Texas Commerce, CSI and certain other persons against
certain losses arising out of the commitment or the New Facility.
Set forth below is a summary description of the commitment and the proposed
New Facility. The summary description does not purport to be complete. There is
no assurance that the terms described below will be contained as described in
the definitive documentation for the New Facility, and additional terms may be
included.
The New Facility will be fully available on a revolving basis through, and
maturing on, (i) the date that is 364 days from acceptance of the commitment or
(ii) the date of an earlier refinancing.
Loans under the New Facility will bear interest, at the Parent's option,
(i) at a rate equal to the rate announced from time to time by Texas Commerce as
its Prime Rate or (ii) at rates based on the London interbank offered rate
("LIBOR"), as adjusted for certain reserve and other requirements applicable to
lenders, for one-, two-, three- or six-month periods plus an interest margin
based on the Parent's senior unsecured non-credit enhanced long-term debt
ratings ("Long-Term Ratings") at the time of the advance, ranging from 15 to 26
basis points.
18
<PAGE> 21
Facility fees will be payable to each participant in the syndicate, if any,
based on the total amount of its commitment to make loans. The facility fees
will be based on the Parent's Long-Term Ratings. Based on the Parent's present
debt ratings, the facility fees initially will be 6 basis points of committed
amounts.
The documentation governing the New Facility will include conditions
precedent to the lenders' funding obligations, representations and warranties,
conditions precedent, covenants, events of default and other provisions
customarily found in similar transactions.
If for any reason the New Facility is not finalized or otherwise is not
used, the Parent expects to obtain the funds required to purchase the Shares
from cash on hand and drawings under its existing revolving credit facility (the
"Facility"). Set forth below is a summary description of the Facility provided
for the benefit of the Parent pursuant to the Amended and Restated Credit
Agreement, effective as of December 15, 1993 (the "Credit Agreement"), among the
Parent, as Borrower, and a syndicate of financial institutions for which Society
National Bank acts as administrative agent (collectively, the "Banks"), under
which the Banks have established and made available to the Parent credits in the
aggregate principal amount of $280 million. This summary description does not
purport to be complete.
At the Parent's election, advances under the Facility can be made as
revolving credit loans or two-year term loans. The Parent also may request
"money market rate loans" based on bids by members of the loan syndicate. If the
Parent elects to borrow term loans, it is not permitted subsequently to borrow
revolving credit or money market rate loans.
Revolving credit loans bear interest, at the Parent's election, (i) at a
rate equal to the rate announced from time to time by National City Bank,
Cleveland, Ohio as its base lending rate (the "Base Lending Rate"); (ii) at
rates based on the London interbank offered rate ("LIBOR"), as adjusted for
certain reserve and other requirements applicable to lenders, for one-, two-,
three-, six-, nine- or twelve-month periods plus an interest margin of 0.38%; or
(iii) at a rate (the "Domestic Base Rate") computed based on bids by New York
certificate of deposit dealers to purchase certificates of deposit of a
designated bank having maturities of 30, 60, 90, 180, 270 or 360 days at their
face value, plus an interest margin of 0.38%.
Term loans bear interest at the Parent's election (i) at a rate equal to
the Base Lending Rate plus an interest margin of 0.25%; (ii) at rates based on
LIBOR, as adjusted for certain reserve and other requirements applicable to
lenders, for one-, two-, three-, six-, nine- or twelve-month periods plus an
interest margin of 0.50%; or (iii) at the Domestic Base Rate plus an interest
margin of 0.50%.
Facility fees are payable under the Facility to each participant in the
syndicate based on the total amount of its commitment to make loans, at the rate
of 0.13% per annum on the daily unused portion of the commitment amount.
The documentation governing the Facility includes conditions precedent to
the lenders' funding obligations, representations and warranties, conditions
precedent, covenants, events of default and other provisions customarily found
in similar transactions. The Credit Agreement includes covenants, among others,
requiring a continuing net worth of the Parent of at least $340 million plus 25%
of its Consolidated Net Income for periods commencing on and after July 1, 1997.
At May 5, 1995, there were no outstanding borrowings under the Facility.
THE OFFER IS NOT CONDITIONED UPON THE PURCHASER OBTAINING FINANCING.
SECTION 10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.
In 1992, the Parent's senior management communicated with the Company's
senior management on several occasions regarding the Parent's potential interest
in a purchase of all or a portion of the Company. In mid-1992, Mr. J.G. Breen,
the Chairman and Chief Executive Officer of the Parent, initiated the first of a
series of contacts with Mr. Russell Banks, the President and Chief Executive
Officer of the Company. Mr. Breen telephoned Mr. Banks to inquire whether the
Company was for sale. In that initial conversation, Mr. Banks said that the
Company was not then for sale; however, Mr. Banks indicated that he would begin
evaluating the Company's future after June 30, 1992.
19
<PAGE> 22
By a letter dated June 25, 1992, Mr. Breen indicated that the Parent might
have an interest in acquiring the Company's coatings business and also expressed
a willingness to acquire other lines of business if necessary to complete the
purchase. Mr. Banks sent Mr. Breen a letter dated August 25, 1992, responding to
Mr. Breen's earlier letter and assuring Mr. Breen of Mr. Banks' interest in
pursuing opportunities to enhance shareholder and employee values and expressing
an interest in any thoughts Mr. Breen had on those subjects.
There were no further discussions between the respective managements of the
Parent and the Company concerning a merger, tender offer or other acquisition
until February 3, 1995. On that date, Mr. Breen and Mr. C.G. Ivy, Vice
President -- Corporate Planning and Development of the Parent, placed a
telephone call to Mr. Banks in response to the Company's January 26, 1995 press
release announcing that the Company had retained Wertheim Schroder to assist the
Company in reviewing its strategic alternatives. Mr. Breen and Mr. Ivy were
informed that Mr. Banks was out of the office, and they left a message that they
would call again the following week.
Mr. Breen telephoned Mr. Banks the following week to express the Parent's
interest in acquiring the Company if the Company determined that a sale was
strategically attractive. Mr. Banks informed Mr. Breen that any decisions about
the Company's future would be made by the Company's Board of Directors with the
assistance of Wertheim Schroder. Mr. Banks stated that he would ask Ilan
Kaufthal of Wertheim Schroder to call Mr. Ivy. Mr. Ivy received no follow-up
call from Mr. Kaufthal or any other representative of the Company.
On March 15, 1995, Mr. Breen telephoned Mr. Banks and informed Mr. Banks
that no one from Wertheim Schroder had contacted the Parent as had been
promised. Mr. Banks responded that no one from Wertheim Schroder called the
Parent because Mr. Banks understood that the Parent was interested only in
acquiring the Company's coatings business, whereas the Company wanted to sell
itself as a whole. Mr. Breen informed Mr. Banks that the Parent was interested
in acquiring the Company as a whole and indicated a willingness to possibly
divest any lines of business that did not fit with the strategic requirements of
a merged entity. Mr. Banks stated that Mr. Breen should call Mr. Kaufthal at
Wertheim Schroder.
Also on March 15, 1995, Mr. Ivy telephoned Mr. Kaufthal and informed him
that the Parent was interested in discussing an acquisition of the Company. Mr.
Kaufthal explained the process that the Parent and any other bidders would
undergo and said that he would promptly send a confidentiality agreement to Mr.
Ivy.
Shortly thereafter, Mr. Ivy received a confidentiality agreement from Mr.
Lloyd Frank, General Counsel and a Director of the Company. Mr. Robert McDonald,
an in-house attorney at the Parent, telephoned Mr. Frank on March 17, 1995 to
discuss the confidentiality agreement. During that call, Mr. Frank and Mr.
McDonald reached a tentative agreement, subject to further review of a revised
draft of the confidentiality agreement by the Company. Mr. McDonald then sent a
marked-up version of the confidentiality agreement to Mr. Frank. Mr. Frank
agreed to call Mr. Ivy, in Mr. McDonald's absence, on Monday, March 20, 1995 if
Mr. Frank had any questions about the proposed revisions; otherwise he would
send execution copies at that time.
Mr. Frank did not call the Parent or send the Parent a revised
confidentiality agreement. Subsequent telephone calls from Mr. Ivy to Mr. Frank
on March 21, 1995 and March 22, 1995 went unreturned. On March 23, 1995, Mr. Ivy
telephoned Mr. Kaufthal to inquire why the Company was not responding to the
Parent's telephone calls. He was unable to reach Mr. Kaufthal. During the late
morning of March 23, 1995, Peter Bacon of Wertheim Schroder telephoned Mr. Ivy,
but Mr. Ivy was out of town. During the morning of March 24, 1995, Mr. Ivy
called Mr. Bacon several times. Mr. Bacon and Mr. Ivy spoke during the late
afternoon of March 24, 1995, at which time Mr. Bacon informed Mr. Ivy that Mr.
Frank would look at the confidentiality agreement over the weekend and contact
Mr. Ivy on the following Monday, March 27, 1995. Because Mr. Frank did not call
on March 27 or 28, 1995, Messrs. Ivy and McDonald telephoned Mr. Frank on March
29, 1995 and asked about the status of the confidentiality agreement. Mr. Frank
indicated that he was unable to talk at that moment, and suggested that the
parties choose a convenient time on March 30, 1995 for a conference call. The
parties decided that 7:15 a.m. would be a convenient time for Mr. Frank to call
Mr. McDonald.
20
<PAGE> 23
Mr. Frank failed to call Mr. McDonald at the agreed-upon time. At
approximately 8:00 a.m. on March 30, 1995, Mr. McDonald called Mr. Frank and
left a message for Mr. Frank to return the call. Later in the day, an attorney
with Skadden, Arps, Slate, Meagher & Flom ("Skadden, Arps"), counsel to the
Company, telephoned Mr. McDonald to discuss the confidentiality agreement. After
this discussion, the Skadden, Arps attorney indicated that he would send final
copies of the agreement for execution.
Mr. Ivy received the revised confidentiality agreement on March 31, 1995,
which had not been signed by the Company. Mr. Ivy executed the agreement and
returned copies to Mr. Frank for delivery on April 3, 1995.
On April 3, 1995, Mr. Ivy received a message from Mr. Frank that Mr. Ivy
would receive counterpart signature pages to the confidentiality agreement on
April 5, 1995, and not on April 4, 1995 as previously anticipated. The Parent
did not receive a signed confidentiality agreement on April 5, 1995 or
subsequently. On April 6, 1995, Mr. Ivy telephoned Mr. Frank. During that call
Mr. Frank said that he could not discuss the confidentiality agreement and that
Mr. Ivy should contact Mr. Kaufthal. Mr. Ivy thereafter placed three phone calls
to Mr. Kaufthal, all of which went unanswered.
On April 17, 1995, Mr. Breen telephoned Mr. Banks. Mr. Banks informed Mr.
Breen that the Company was not interested in having discussions with the Parent
and that the Parent was to be excluded from the bidding process. The Parent then
revoked its offer to enter into a confidentiality agreement by a letter dated
April 17, 1995 from Mr. Ivy to Mr. Frank.
On April 28, 1995, the NYSE temporarily halted trading in the Company's
stock and the Company issued the following press release:
NEW YORK, NEW YORK, April 28, 1995 -- Grow Group, Inc.
(NYSE:GRO), which previously announced that it had authorized Wertheim
Schroder & Co. Incorporated to assist the Company in considering and
reviewing alternatives to enhance shareholder value, said today that
it has entered into negotiations with a third party concerning an
acquisition of Grow. The third party, which has substantially
completed its due diligence review, has proposed to acquire 100% of
Grow's common stock and has indicated a willingness to pay Grow's
public stockholders $18.10 per share in cash. Any such transaction
would be subject to negotiation and execution of a definitive
agreement and approval of Grow's Board of Directors. There can be no
assurance that any such agreement will be reach[sic], or if an
agreement is reached that any transaction will be consummated.
Grow Group is a leading producer of specialty chemical coatings
and paints and household products. Grow operations include
manufacturing facilities, sales offices and licensees throughout the
world.
After reviewing the press release the Company sent the following letter,
copies of which were delivered to the members of the Company's Board of
Directors and to Wertheim Schroder and Skadden, Arps:
April 28, 1995
BY FACSIMILE, OVERNIGHT
AND HAND DELIVERY
Mr. Russell Banks
President and Chief Executive Officer
Grow Group, Inc.
200 Park Avenue
New York, New York 10166
Dear Mr. Banks:
We at The Sherwin-Williams Company were troubled to learn from
the press release you issued today that you are in the process of
negotiating a sale of your company to another party. Our concern
arises from the fact that, despite Sherwin-Williams' repeated
indications of serious interest in a
21
<PAGE> 24
transaction with Grow Group, you apparently have decided to negotiate
a definitive agreement with another bidder without giving us access to
the information that would allow us to present our best possible
proposal.
On March 17, 1995 we offered to enter into a confidentiality
agreement with Grow Group. After repeated delays on Grow Group's part
to finalize such agreement, we forwarded an executed copy of that
agreement to Lloyd Franks on March 31, 1995. However, that agreement
was never executed by Grow Group. On April 17, 1995, you informed us
that Sherwin-Williams was to be excluded from the bidding process.
Consequently, by letter dated April 17, 1995, we had no alternative
but to revoke our offer to enter into the confidentiality agreement
with Grow Group. Since that time and despite your actions, our
financial advisors have been in contact with Wertheim Schroder and
have expressed our continued interest in pursuing a transaction with
Grow Group.
Given our financial strength, financing will not represent an
impediment to the consummation of a transaction on an all-cash basis.
In addition, based upon our preliminary analysis, we are extremely
confident that the antitrust laws would not impede our ability to
consummate a transaction with Grow Group. This matter has been
discussed at length with the members of our senior management and with
our Board of Directors. We have also retained Lazard Freres & Co. and
Rogers & Wells to provide financial and legal counsel regarding this
matter.
We urge you not to enter into or to agree to any merger or other
significant transaction or agreement, or to take any additional
defensive measures (including "no shop", break-up fee or similar
arrangements) or other actions, that would adversely affect the
ability of your stockholders to receive the maximum value for their
shares.
We wish to obtain immediate access to the information which you
have refused to furnish to us. We are also prepared to enter into
immediate discussions with you and your directors, management and
advisors about a transaction with Sherwin-Williams. In Mr. Breen's
absence, you may contact me over the weekend either at my home at
(216) 247-4936 or at my office (216) 566-2102. If you are unable to
contact me, you can contact Larry J. Pitorak, Senior Vice
President -- Finance, Treasurer and Chief Financial Officer, at (216)
729-3840 or (216) 566-2573.
We hope that you and your Board of Directors will give this
matter prompt and serious consideration.
Sincerely,
/s/Conway G. Ivy
In addition to the contacts set forth above, from March 24, 1995 through
May 1, 1995, the Parent's financial advisors, Lazard Freres & Co. LLC
("Lazard"), had numerous contacts with the Company's financial advisors and
Corimon, S.A.C.A. (which has three representatives on the Company's Board of
Directors) regarding a potential acquisition of the Company by the Parent.
On May 8, 1995, the Purchaser commenced the Offer.
Except as described above, there have been no contacts, negotiations or
transactions between the Purchaser, the Parent or their subsidiaries or, to the
best knowledge of the Purchaser and the Parent, any of the persons listed on
Schedule I, and the Company or its affiliates concerning a merger, consolidation
or acquisition, tender offer or other acquisition of securities, election of
directors or a sale or other transfer of a material amount of assets.
SECTION 11. PURPOSE OF THE OFFER; THE MERGER; PLANS FOR THE COMPANY. The
purpose of the Offer is to acquire control of, and the entire equity interest
in, the Company.
The Merger. The Purchaser intends to propose, and to seek to have the
Company consummate, the Merger as soon as practicable after consummation of the
Offer. However, certain terms of the Rights and
22
<PAGE> 25
certain provisions of the NYBCL, the Charter and the By-Laws may affect the
ability of the Purchaser to obtain control of the Company and to consummate the
Merger. Accordingly, the timing and details of the Merger will depend on a
variety of factors and legal requirements, the actions of the Board of Directors
of the Company, the number of Shares acquired by the Purchaser pursuant to the
Offer and whether the Minimum Condition, the Lockup Fee Condition, the Merger
Condition and the Rights Condition have been satisfied.
The descriptions in this Section of certain provisions of the Charter and
the By-Laws are qualified in their entirety by reference to the text of the
Charter and By-Laws, copies of which have been filed by the Company as exhibits
to documents filed with the Commission and may be obtained in the manner
described in Section 7. Similarly, the descriptions in this Section of certain
provisions of the NYBCL are qualified in their entirety by reference to the
NYBCL.
STOCKHOLDER APPROVAL. The NYBCL requires that the Merger be approved by
the affirmative vote of the holders of at least two-thirds of the outstanding
Shares. The Minimum Condition requires that there shall have been validly
tendered and not properly withdrawn on or prior to the Expiration Date a number
of Shares which, together with the Shares owned by the Parent, constitutes at
least 66 2/3% of the voting power (determined on a fully diluted basis) on the
date of purchase of all stock entitled to vote in a merger. Upon consummation of
the Offer and assuming the Minimum Condition is satisfied, the Purchaser will
own sufficient Shares to enable it to effect stockholder approval of the Merger
(subject to the requirements of the Supermajority Charter Provision and the New
York Takeover Statute) with the affirmative vote of the Shares owned by it.
The Minimum Condition is intended to provide assurance to the Purchaser
that the stockholder approval requirements described above can be achieved. THE
OFFER IS CONDITIONED UPON THE MINIMUM CONDITION BEING SATISFIED.
BOARD ACTION. Under the NYBCL and the provisions of the Company's Charter
and By-Laws, consummation of the Offer and the Merger will require the Company's
Board of Directors to take affirmative action in several respects. The Purchaser
presently expects that these requirements will be satisfied if the Company and
its Board of Directors take substantially the same actions with respect to the
Offer and the Merger as they have agreed to take in respect of the ICI Tender
Offer and ICI's proposed merger. These actions include: (i) approval by the
Company's Board of Directors of a memorandum of understanding or a letter of
intent with respect to the Merger, pursuant to the Supermajority Charter
Provision; (ii) approval by the Company's Board of Directors of either the
Merger or the purchase of Shares pursuant to the Offer, pursuant to the New York
Takeover Statute; and (iii) agreement by the Company and its Board of Directors
that upon consummation of the Offer, the Company's Board of Directors will be
reconstituted such that the percentage of the Board represented by the
Purchaser's designees is as nearly as practicable the same as the percentage of
outstanding Shares owned by the Purchaser and the Parent, and in any event at
least a majority of the Board. Unless the Company's Board of Directors takes the
action described in clauses (i), (ii) and (iii) above, the Merger Condition will
not be satisfied.
The Purchaser is requesting that the Company's Board of Directors take the
actions described in the three categories referred to above. The Purchaser
believes that under the circumstances of the Offer and under applicable law, and
in light of the Company's undertaking in the ICI Merger Agreement, the Board of
Directors of the Company is obligated by its fiduciary responsibilities to take
these actions in order to permit the Offer and the Merger to be consummated.
However, there can be no assurance that the Board will do so. The Purchaser and
the Parent intend, if necessary, to seek court orders requiring the Company's
Board of Directors to take these actions. The three categories of required
actions are further discussed below.
SUPERMAJORITY CHARTER PROVISION. The Charter provides that, in addition to
any affirmative vote required by applicable law, the affirmative vote of the
holders of at least 80% of the outstanding shares of the capital stock of the
Company entitled to vote in the election of directors is required to approve
certain types of business combinations (which would include the Merger) between
the Company and any person (an "Interested Stockholder") who is the "beneficial
owner" of 10% or more of the outstanding shares of capital stock of the Company
entitled to vote in the election of directors, unless prior to such person
becoming an Interested Stockholder the Company's Board of Directors shall by
resolution have approved a memorandum
23
<PAGE> 26
of understanding with respect to such business combination. If the Minimum
Condition is satisfied, the Purchaser will be an Interested Stockholder when it
acquires Shares pursuant to the Offer. Accordingly, unless the Company's Board
of Directors approves a memorandum of understanding with respect to the Merger,
consummation of the Merger will require the affirmative vote of at least 80% of
the outstanding Shares. If the Board does not provide that approval but upon
consummation of the Offer the Purchaser and the Parent together own at least 80%
of the outstanding Shares, then the Purchaser and the Parent nonetheless will
own sufficient Shares to enable them to satisfy the Supermajority Charter
Provision and effect stockholder approval of the Merger without the Board
approval otherwise required by the Supermajority Charter Provision (subject to
the other requirements of the NYBCL, including the New York Takeover Statute).
NEW YORK TAKEOVER STATUTE. In general, the New York Takeover Statute
prohibits any person who is the "beneficial owner" of 20% or more of the
outstanding voting stock of a corporation and therefore is an "interested
shareholder" (a "Statutory Interested Stockholder") from engaging in certain
business combinations (including the Merger) with such corporation for a period
of five years following the date on which such person first became a Statutory
Interested Stockholder, unless the transaction by which such person became a
Statutory Interested Stockholder or the business combination is approved by the
board of directors of the corporation prior to the date on which such person
became a Statutory Interested Stockholder. Because of the New York Takeover
Statute, if the Purchaser were to acquire Shares pursuant to the Offer after
satisfaction of the Minimum Condition but before the Company's Board of
Directors had given the requisite approval, the Purchaser would be unable to
consummate the Merger for five years.
BOARD COMPOSITION AGREEMENT. The NYBCL requires that any merger of a
corporation requires the approval of the corporation's board of directors,
unless the corporation is being merged with the owner of 90% or more of the
outstanding shares of each class of the corporation's stock. Accordingly, unless
following the expiration of the Offer the Purchaser owns 90% or more of the
Shares, the approval of the Company's Board of Directors will be required in
order to consummate the Merger. Under the NYBCL and the Company's Charter and
By-Laws, (i) the Company has a "staggered" board consisting of three classes of
directors, with each class serving three-year terms and one of the three classes
being subject to re-election each year, and (ii) directors are subject to
removal only for cause. Accordingly, if the Purchaser were to acquire Shares
after satisfaction of the Minimum Condition but without an agreement from the
Company's Board of Directors as to a reconstituting of the Board similar to the
undertaking given in the ICI Merger Agreement, then, notwithstanding its voting
power, the Purchaser might not be in a position to appoint a majority of the
members of the Board for a considerable period of time. This in turn would mean
that, unless the Purchaser owned 90% or more of the Shares, it might not be able
to consummate the Merger.
The Merger Condition is intended to provide assurance to the Purchaser that
the various requirements referred to above can be satisfied. THE OFFER IS
CONDITIONED ON THE MERGER CONDITION BEING SATISFIED.
THE RIGHTS. The following discussion is based on information contained in
filings made by the Company with the Commission. Although the Purchaser and the
Parent do not have any knowledge (except as otherwise described herein) that
would indicate that any statements contained in this Offer to Purchase based on
those filings by the Company are untrue, neither the Purchaser nor the Parent
assumes any responsibility for the accuracy or completeness of the information
contained in those filings, or for any failure by the Company to disclose events
that may have occurred and may affect the significance or accuracy of any such
information but which are unknown to the Purchaser and the Parent.
On August 7, 1992, the Company entered into an Amended and Restated Rights
Agreement with The Bank of New York as Rights Agent, which amended and restated
a rights agreement dated as of February 11, 1988 between the Company and the
Rights Agent. According to information filed by the Company with the Commission,
on April 30, 1995, the Company and the Rights Agent again amended the Rights
Agreement to permit the announcement and consummation of the transactions
contemplated by the ICI Merger Agreement and the Option Agreement without
resulting in a distribution of the Rights. Set forth below is a summary of
certain provisions of the Rights Agreement.
On February 11, 1988, the Board of Directors of the Company authorized and
declared a dividend distribution of one Right for each share of Common Stock
outstanding on February 26, 1988, and further
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authorized the issuance of one Right for each share of Common Stock issued
between February 26, 1988 and the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date (as such terms are hereinafter
defined). Each Right issued pursuant to the Rights Agreement entitles the
registered holder to purchase from the Company one share of Common Stock at a
price of $30.00, subject to certain adjustments (the "Purchase Price").
Until the earliest of (i) the tenth business day after the Stock
Acquisition Date (as defined below), (ii) the tenth business day (or such other
date as the Board of Directors shall determine) after the date of the
commencement of, or first public announcement of the intention of any Person (as
defined below) (other than the Company, any subsidiary of the Company, or any
employee benefit plan of the Company or any of its subsidiaries or any Person
holding shares of Common Stock organized, appointed or established pursuant to
the terms of any such plan) to commence (which intention to commence remains in
effect for five business days after such announcement) a tender or exchange
offer the consummation of which would result in any Person becoming the
beneficial owner of 30% or more of the voting power of all securities of the
Company outstanding entitled to vote for the election of members of the Board of
Directors or (iii) the tenth business day after a determination of the Board of
Directors pursuant to the Rights Agreement that a person is an Adverse Person
(as defined below) (including in each such case any such date which is after the
date of the Rights Agreement and prior to the issuance of the Rights) (the
earliest of (i), (ii) and (iii) being the "Distribution Date"), the Rights are
evidenced by the certificates evidencing the Common Stock and the Rights are
transferable only in connection with the transfer of the underlying shares of
Common Stock. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
holders of record of shares of Common Stock as of the close of business on the
Distribution Date, and the separate Rights Certificates alone will evidence the
Rights.
For purposes of the Rights Agreement, (i) "Stock Acquisition Date" means
the first date of public announcement by the Company or an Acquiring Person (as
hereinafter defined) that an Acquiring Person has become such; (ii) "Person"
means an individual, firm, corporation, partnership or other entity, and
includes any successor (by merger or otherwise) of such entity; (iii) "Acquiring
Person" means any Person who or which, together with all affiliates and
associates of such Person, shall be the beneficial owner at any time after the
date of the Rights Agreement, whether or not such Person continues to be the
beneficial owner of securities representing 30% or more of the voting power of
all securities of the Company outstanding entitled to vote for the election of
members of the Board of Directors, but shall not include (a) the Company, (b)
any subsidiary of the Company, (c) any employee benefit plan of the Company or
any of its subsidiaries or (d) any Person holding securities of the Company
organized, appointed or established by the Company or any of its subsidiaries
for or pursuant to the terms of any such plan; and (iv) "Adverse Person" means
any person declared to be an Adverse Person by the Board of Directors upon a
determination by the Board of Directors that certain criteria set forth in the
Rights Agreement apply to such Person.
The registered holder of any Rights Certificate may exercise the Rights
evidenced thereby, in whole or in part at any time after the Distribution Date,
at or prior to the earliest of (i) February 26, 1998 (the "Final Expiration
Date") or (ii) the time at which the Rights are redeemed ("Redemption Date")
pursuant to the provisions of the Rights Agreement described below.
Notwithstanding anything in the Rights Agreement to the contrary, if an
Acquiring Person, an Adverse Person or an associate or affiliate of an Acquiring
Person or an Adverse Person engages in or there occurs one or more of certain
categories of transactions set forth in the Rights Agreement (which would
include the Offer and the Merger) on or after the time the Acquiring Person or
Adverse Person became such, then any Rights beneficially owned by an Acquiring
Person, Adverse Person or any associate or affiliate of any such Person or by
any of the other Persons holding such Rights Certificates shall, without any
further action, become null and void with respect to the rights provided under
the Rights Agreement, and any holder of such Rights shall thereafter have no
right to exercise such Rights under the Rights Agreement.
Until a Right is exercised, the holder thereof, as such, has no rights as a
shareholder of the Company, including, without limitation, the right to vote or
to receive dividends.
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In the event that, following a Stock Acquisition Date, directly or
indirectly, (x) the Company consolidates with, or merges with and into, any
other Person and the Company is not the continuing or surviving corporation of
such consolidation or merger, (y) any Person consolidates with the Company, or
merges with and into the Company and the Company is the continuing or surviving
corporation of such merger and, in connection therewith, all or part of the
Company's shares of Common Stock are changed into or exchanged for stock or
other securities of any other Person or cash or any other property (other than,
in the case of the transactions described in clauses (x) or (y) above, a merger
or consolidation with a subsidiary of the Company which complies with the Rights
Agreement) or (z) the Company sells, mortgages or otherwise transfers (or one or
more of its subsidiaries sells, mortgages or otherwise transfers), in one or
more transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its subsidiaries (taken as a whole)
to any other Person (other than the Company or any subsidiary of the Company in
one or more transactions each of which complies with the Rights Agreement),
then, and in each such case, proper provision is required to be made so that (i)
each holder of a Right, except as otherwise provided in the Rights Agreement,
will have the right to receive, upon the exercise thereof at the then current
Purchase Price in accordance with the terms of the Rights Agreement, such number
of shares of freely tradeable Common Stock of the Principal Party (as defined in
the Rights Agreement), free and clear of liens, rights of call or first refusal,
encumbrances or other adverse claims, as shall be equal to the result obtained
by (x) multiplying the then current Purchase Price by the number of shares of
Common Stock for which a Right is then exercisable (without taking into account
any adjustments previously made pursuant to the Rights Agreement) and dividing
that product by (y) 50% of the current market price per share of the Common
Stock of such Principal Party (as defined in the Rights Agreement) on the date
of consummation of such consolidation, merger, sale or transfer; (ii) such
Principal Party thereafter will be liable for, and will assume, by virtue of
such consolidation, merger, sale or transfer, all the obligations and duties of
the Company pursuant to the Rights Agreement; (iii) the term "Company" will
thereafter be deemed to refer to such Principal Party; and (iv) such Principal
Party will take such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock in accordance with the Rights
Agreement) in connection with such consummation as may be necessary to assure
that the provisions of the Rights Agreement shall thereafter be applicable, as
nearly as reasonably may be, in relation to the Principal Party's shares of
Common Stock delivered upon the exercise of the Rights.
In the event (i) any Person, alone or together with its affiliates and
associates (irrespective of whether such Person, alone or together with its
affiliates and associates, is, or may be deemed to be, an affiliate of the
Company, shall become the beneficial owner of securities representing 30% or
more of the voting power of all securities of the Company then outstanding
generally entitled to vote for the election of Board of Directors; provided,
however, that this provision shall not apply to the Company, any subsidiary of
the Company, any employee benefit plan maintained by the Company or any of its
subsidiaries or any person organized, appointed or established pursuant to the
terms of such plan; or (ii) the Board of Directors shall declare any Person to
be an Adverse Person, upon (x) a determination that such Person, alone or
together with its affiliates and associates, has become the beneficial owner of
20% or more of the outstanding shares of Common Stock and (y) a determination by
the Board of Directors, after reasonable inquiry and investigation, including
such consultation, if any, with such Persons as the Board of Directors shall
deem appropriate that (a) such beneficial ownership by such Person is intended
to cause the Company to repurchase the Common Stock beneficially owned by such
Person or to cause pressure on the Company to take action or enter into a
transaction or series of transactions intended to provide such person with
short-term financial gain under circumstances when the best interests of the
Company and its shareholders would not be served by taking such action or
entering into such transactions or series of transactions at that time or (b)
such beneficial ownership is causing or is reasonably likely to cause a material
adverse impact (including, but not limited to, impairment of relationships with
customers or impairment of the Company's ability to maintain its competitive
position) on the business or prospects of the Company to the detriment of the
Company's shareholders, then, and in each such case, proper provision is
required to be made so that each holder of a Right will, for a period of 60 days
after the later of the occurrence of any such event and the effective date of an
appropriate registration statement pursuant to the Rights Agreement, have a
right to receive, upon exercise of the Right at the then current Purchase Price
in accordance with the terms of the Rights Agreement, such number of shares of
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<PAGE> 29
Common Stock as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the then number of shares of Common Stock for which a
Right was exercisable immediately prior to the first occurrence of any one of
the events listed above and (y) dividing that product by 50% of the then current
market price per share of the shares of Common Stock on the date of the first
occurrence of any one of the events listed above; provided, however, that if the
transaction that would otherwise give rise to the foregoing adjustment is also
subject to the provisions described in the preceding paragraph then only the
provisions described in the preceding paragraph will apply and no adjustment
will be made under the provisions described in this paragraph.
The Board of Directors of the Company may, at its option, at any time prior
to the earliest of (i) the tenth day following a Stock Acquisition Date, (ii)
the Final Expiration Date, or (iii) the tenth business day after a determination
by the Board of Directors that any Person is an Adverse Person, redeem all but
not less than all of the then outstanding Rights at a redemption price of $.01
per Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after August 7, 1992 (the "Redemption Price").
Immediately upon the action of the Board of Directors of the Company ordering
the redemption of the Rights, evidence of which is required to have been filed
with the Rights Agent, and without any further action and without any notice,
the right to exercise the Rights will terminate and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price. The Company is
required to give the Rights Agent prompt written notice of any redemption of the
rights. Within ten business days after the redemption of the Rights, the Company
is required to give notice of such redemption to the holders of the then
outstanding Rights by mailing such notice to all such holders at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Stock of the Company. Any notice which is mailed in the manner provided
in the Rights Agreement will be deemed given, whether or not the holder receives
the notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. The Company may, at its option,
discharge all of its obligations with respect to the Rights by (i) issuing a
press release announcing the manner of redemption of the Rights, (ii) depositing
with a bank or trust company in the Borough of Manhattan, City of New York,
State of New York, having a capital and surplus of at least $25,000,000, funds
necessary for such redemption, in trust, to be applied to the redemption of the
Rights so called for redemption, and (iii) arranging for the mailing of the
Redemption Price to the registered holders of the Rights; then, and upon such
action, all outstanding Rights Certificates will be null and void without any
further action by the Company.
Prior to a Distribution Date, the Company and the Rights Agent shall, if
the Company so directs, supplement or amend any provision of the Rights
Agreement without the approval of any holders of Rights Certificates (or prior
to a Distribution Date, holders of Share Certificates).
Under the Rights Agreement, as a result of the commencement of the Offer,
the Distribution Date will be as early as May 19, 1995, unless prior to that
date the Company's Board of Directors redeems the Rights or takes action to
delay the Distribution Date.
The Company has announced that, pursuant to its undertakings in the ICI
Merger Agreement, the Company amended the Rights Agreement on April 30, 1995 to
permit the commencement and closing of the ICI Tender Offer and the consummation
of the merger proposed by ICI without causing a Distribution Date. That
amendment will not apply to this Offer. The ICI Merger Agreement also provides
that, upon the request of ICI, the Company will redeem all of the outstanding
Rights.
The Rights Condition requires that the Rights shall have been redeemed by
the Company's Board of Directors or that the Purchaser shall be satisfied, in
its sole discretion, that the Rights have been invalidated or are otherwise
inapplicable to, or the dilutive provisions thereof will not be triggered by,
the Offer and the Merger. The Purchaser believes that under the circumstances of
the Offer and under applicable law, and in light of the fact that the Company
has already amended the Rights Agreement to permit the announcement and
consummation of the transaction contemplated by the ICI Merger Agreement and the
Option Agreement, the Board of Directors of the Company is obligated by its
fiduciary responsibilities to redeem the Rights or take such other action to
invalidate the Rights or otherwise render the Rights inapplicable to, or
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prevent the dilutive provisions thereof from being triggered by, the Offer and
the Merger, in each case in order to permit the Offer and the Merger to be
consummated. However, there can be no assurance that the Board will take any
such action. The Purchaser and the Parent presently intend, if necessary, to
seek court orders requiring the Company's Board of Directors to take these
actions.
UNLESS THE RIGHTS ARE REDEEMED, HOLDERS OF SHARES WILL ALSO BE REQUIRED TO
TENDER ONE RIGHT FOR EACH SHARE TENDERED IN ORDER TO EFFECT A VALID TENDER OF
SUCH SHARE. If separate certificates for the Rights are not issued, a tender of
Shares will also constitute a tender of associated Rights.
The Rights Condition is intended to provide assurance to the Purchaser that
neither the consummation of the Offer nor the consummation of the Merger will
have the adverse consequences otherwise applicable under the Rights Agreement.
THE OFFER IS CONDITIONED UPON THE RIGHTS CONDITION BEING SATISFIED.
APPRAISAL RIGHTS IN CONNECTION WITH THE OFFER. Stockholders do not have
statutory appraisal rights as a result of the Offer. However, if the Merger is
consummated, stockholders of the Company at the time of the Merger will have
certain rights to dissent and demand appraisal of their Shares under the NYBCL.
Dissenting stockholders who comply with the requisite statutory procedures in
accordance with Section 623 of the NYBCL will be entitled to a judicial
determination and payment of the "fair value" of their Shares as of the close of
business on the day prior to the date of stockholder authorization of the
Merger, together with interest thereon, at such rate as the court finds
equitable, from the date the Merger is consummated until the day of payment.
Under the NYBCL, in fixing the fair value of the Shares, a court would consider
the nature of the transaction giving rise to the stockholders' right to receive
payment for Shares and its effects on the Company and its stockholders, the
concepts and methods then customary in the relevant securities and financial
markets for determining fair value of shares of a corporation engaging in a
similar transaction under comparable circumstances, and all other relevant
factors. The value so determined could be more or less than the purchase price
offered pursuant to the Offer or the Merger.
THE FOREGOING SUMMARY OF THE RIGHTS OF OBJECTING STOCKHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
STOCKHOLDERS DESIRING TO EXERCISE ANY AVAILABLE APPRAISAL RIGHTS. THE
PRESERVATION AND EXERCISE OF APPRAISAL RIGHTS REQUIRE STRICT ADHERENCE TO THE
APPLICABLE PROVISIONS OF NEW YORK LAW.
RULE 13E-3. The Commission has adopted Rule 13e-3 under the Exchange Act,
which is applicable to certain "going private" transactions and which may under
certain circumstances be applicable to the Merger following the purchase of
Shares pursuant to the Offer in which the Purchaser seeks to acquire any
remaining Shares. Rule 13e-3 should not be applicable to the Merger if the
Merger is consummated within one year after the expiration or termination of the
Offer and the price paid in the Merger is not less than the per Share price paid
pursuant to the Offer. However, in the event that the Purchaser is deemed to
have acquired control of the Company pursuant to the Offer and if the Merger is
consummated more than one year after completion of the Offer or an alternative
acquisition transaction is effected whereby stockholders of the Company receive
consideration less than that paid pursuant to the Offer, in either case at a
time when the Shares are still registered under the Exchange Act, the Purchaser
may be required to comply with Rule 13e-3 under the Exchange Act. If applicable,
Rule 13e-3 would require, among other things, that certain financial information
concerning the Company and certain information relating to the fairness of the
Merger or such alternative transaction and the consideration offered to the
stockholders other than the Purchaser, the Parent and their affiliates in the
Merger or such alternative transaction, be filed with the Commission and
disclosed to stockholders prior to consummation of the Merger or such
alternative transaction. The purchase of a substantial number of Shares pursuant
to the Offer may result in the Company being able to terminate its Exchange Act
registration. See Section 13. If such registration were terminated, Rule 13e-3
would be inapplicable to any such future Merger or alternative transaction.
Other. The timing and details of the Merger will depend on a variety of
factors and legal requirements, the action of the Company's Board of Directors
and the number of Shares acquired by the Purchaser pursuant to the Offer and
whether the Minimum Condition, the Lockup Fee Condition, the Merger Condition,
the Rights Condition are satisfied or waived. Although the Purchaser seeks to
have the Company consummate the Merger as soon as practicable after consummation
of the Offer, the Purchaser can give no assurance that the
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<PAGE> 31
Merger will be consummated or as to the timing of the Merger if it is
consummated. Although the Purchaser intends to seek to consummate the Merger on
the terms described above, it is possible that as a result of substantial delays
in the Purchaser's ability to effect the Merger, information obtained by the
Purchaser after the date of this Offer to Purchase, changes in general economic
or market conditions or in the business, operations or financial condition or
prospects of the Company, any of the Minimum Condition, the Lockup Fee
Condition, the Merger Condition or the Rights Condition not being satisfied or
any other currently unforeseen factors, the Merger may not be so consummated,
may be delayed or abandoned or may be proposed on different terms. The Purchaser
is willing to enter into a merger agreement with the Company on substantially
the same terms and conditions as the ICI Merger Agreement. Although it has no
current intention to do so, the Purchaser expressly reserves the right to
propose a merger on terms other than those described above and the right to
withdraw any merger proposal.
The Purchaser reserves the right to purchase, following consummation or
termination of the Offer, additional Shares or Rights in the open market, in
privately negotiated transactions, in another tender offer or exchange offer or
otherwise. In addition, in the event that the Purchaser decides not to propose
the Merger, to propose a merger on terms other than those described above, or to
withdraw any merger previously proposed, the Purchaser will evaluate its other
alternatives. These alternatives could include purchasing additional Shares or
Rights in the open market, in privately negotiated transactions, in another
tender offer or exchange offer or otherwise, or taking no further action to
acquire additional Shares or Rights. Any additional purchases of Shares or
Rights could be at a price greater or less than the price to be paid for Shares
and Rights in the Offer and could be for cash or other consideration.
Alternatively, the Purchaser and the Parent may sell or otherwise dispose of any
or all Shares or Rights acquired pursuant to the Offer or otherwise. Such
transactions may be effected on terms and at prices then determined by the
Purchaser and the Parent, which may vary from the price paid for Shares and
Rights in the Offer.
Plans for the Company. The Parent intends, upon acquiring control of the
Company, to conduct a review of the Company and its subsidiaries and their
respective assets, businesses, corporate structure, capitalization, operations,
properties, policies, management and personnel. The Parent currently does not
plan to divest any of the Company's business units. The Parent will seek to
integrate the Company's various business units with the Parent's existing
operations, with a view to achieving efficiencies and cost savings while
maintaining and enhancing customer service and support. One possible means of
achieving these objectives may be the closing and consolidation of some of the
Company's existing facilities after reviewing the facilities' mission, personnel
and profitability. After such review of the Company's business and facilities,
it is possible that the Parent might modify its current plans. See Schedule III.
SECTION 12. DIVIDENDS AND DISTRIBUTIONS. If the Company should, during
the pendency of the Offer, split, combine or otherwise change the Shares or its
capitalization, or disclose that it has taken any such action, then without
prejudice to the Purchaser's rights under Section 14, the Purchaser may make
such adjustments to the purchase price and other terms of the Offer as it deems
appropriate to reflect such split, combination or other change.
If on or after April 30, 1995 (except to the extent publicly disclosed by
the Company with specificity in documents filed with the Commission prior to
April 30, 1995), the Company should declare or pay any cash or stock dividend or
other distribution on, or issue any rights 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 the Purchaser or the nominee or transferee of the
Purchaser on the Company's stock transfer records of such Shares that are
purchased pursuant to the Offer (except that if the Rights are redeemed by the
Board of Directors in accordance with the terms of the Rights Agreement,
tendering stockholders who are holders of record as of the applicable record
date will be entitled to receive and retain the redemption price of $.01 per
Right in accordance with the Rights Agreement), then without prejudice to the
Purchaser's rights under Section 14, (i) the purchase price payable per Share by
the 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 (including additional Shares) or right received and held by a
tendering stockholder shall be required to be promptly remitted and transferred
by the tendering stockholder to the Depositary for the account of the Purchaser,
accompanied by appropriate documentation of transfer. Pending such remittance or
appropriate assurance
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thereof, the Purchaser will, subject to applicable law, be entitled to all
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 the Purchaser in its sole
discretion.
SECTION 13. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES, STOCK
EXCHANGE LISTING AND EXCHANGE ACT REGISTRATION. The purchase of Shares pursuant
to the Offer will reduce the number of Shares that might otherwise trade
publicly and will reduce the number of holders of Shares. This 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 for continued listing on the NYSE and
may therefore be delisted from the NYSE. According to the NYSE's published
guidelines, the NYSE would consider delisting the Shares if, among other things:
(i) the number of record holders of 100 or more Shares should fall below 1,200;
(ii) the number of publicly held Shares (exclusive of holdings of the Parent and
the Purchaser and any other subsidiaries or affiliates of the Parent and of
officers or directors of the Company or their immediate families or other
concentrated holdings of 10% or more ("Excluded Holdings")) should fall below
600,000; or (iii) the aggregate market value of such publicly held Shares
(exclusive of Excluded Holdings) should fall below $5,000,000.
According to the 1994 Annual Report, as of June 30, 1994 there were
approximately 4,000 holders of record of Shares. If as a result of the purchase
of Shares pursuant to the Offer or otherwise, the Shares no longer meet the
requirements of the NYSE for continued listing and the listing of the Shares is
discontinued, the market and prices 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 other securities exchanges or in the over-the-counter
market and that price quotations would be reported by such exchanges or through
the National Association of Securities Dealers Automated Quotation System
("NASDAQ") or other sources. However, the extent of the public market for the
Shares and the availability of such quotations would depend upon such factors as
the number of stockholders and/or the aggregate market value of the Shares
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. The Purchaser cannot predict
whether the reduction in the number of Shares that might otherwise trade
publicly would have an adverse or beneficial effect on the market price for or
marketability of the Shares.
The Shares are currently "margin securities" 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 the Shares for the purpose of buying, carrying, or trading in
securities ("purpose loans"). Depending upon factors similar to those described
above with respect to stock exchange listing and market quotations, the Shares
might no longer constitute "margin securities" for the purposes of the Federal
Reserve Board's margin regulations and, therefore, could no longer be used as
collateral for purpose loans made by brokers.
The Shares, along with certain of the Company's other securities, are
currently registered under the Exchange Act. The purchase of Shares pursuant to
the Offer may result in the Shares becoming eligible for deregistration under
the Exchange Act. Registration of the Shares may be terminated upon application
of 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 the
Shares 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. Furthermore,
"affiliates" of the Company and persons holding "restricted securities" of the
Company could be deprived of the ability to dispose of the securities pursuant
to Rule 144 under the Securities Act of 1933. If registration of the Shares
under the Exchange Act were terminated, the Shares would no longer be "margin
securities" or eligible for NASDAQ reporting. The Purchaser intends to seek to
cause the Company to terminate the registration of the Shares as soon after the
consummation of the Offer or Merger as the requirements for termination of
registration are met.
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SECTION 14. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other
provision of the Offer, the Purchaser shall not be required to accept for
payment or, subject to any applicable rules and regulations of the Commission,
including Rule 14e-l(c) under the Exchange Act (relating to the Purchaser's
obligation to pay for or return tendered Shares promptly after termination or
withdrawal of the Offer), pay for any Shares or Rights tendered pursuant to the
Offer, and may postpone the acceptance for payment or, subject to the
restriction referred to above, payment for any Shares or Rights tendered
pursuant to the Offer, and may amend or terminate the Offer (whether or not any
Shares have already been purchased or paid for) if, in the sole judgment of the
Purchaser, (i) the Minimum Condition, the Lockup Fee Condition, the Merger
Condition or the Rights Condition shall not have been satisfied or (ii) at any
time on or after May 5, 1995 and before acceptance for payment of, or payment
for, such Shares, any of the following events shall occur or shall be determined
by the Purchaser to have occurred:
(a) there shall have been threatened, instituted or pending any
action, proceeding, claim or application by any government or governmental
regulatory or administrative authority or agency, domestic, foreign or
supranational, or by any other person, domestic or foreign, before any
court or governmental, regulatory or administrative agency, authority or
tribunal, domestic, foreign or supranational, that (i) challenges or seeks
to make illegal, to delay or otherwise directly or indirectly to restrain
or prohibit, or which is likely to impose, in the sole judgment of the
Purchaser, voting, procedural, price or other requirements in addition to
those required by the provisions of the NYBCL described in Section 11 and
federal securities law in connection with the acquisition of Shares by the
Purchaser or any of its affiliates, the making of the Offer, the acceptance
for payment of or payment for Shares by the Purchaser or any of its
affiliates or the consummation of the Merger or any other business
combination involving the Company or the performance of any of the
contracts or other arrangements entered into by the Purchaser or any of its
affiliates in connection with the acquisition of the Company, seeking to
obtain any material damages as a result thereof or otherwise directly or
indirectly relating to the Offer or the Merger or such other business
combination, (ii) seeks to restrain, prohibit or limit the exercise of full
rights of ownership or operation by the Purchaser or any of its affiliates
of all or any portion of the business or assets of the Company or any of
its subsidiaries or the Purchaser or any of its affiliates or to compel the
Purchaser or any of its affiliates to dispose of or to hold separately all
or any portion of the business or assets of the Company or any of its
subsidiaries or the Purchaser or any of its affiliates, (iii) seeks to
impose or confirm limitations on the ability of the Purchaser or any of its
affiliates effectively to acquire or hold or to exercise full rights of
ownership of Shares, including without limitation the right to vote the
Shares acquired or owned by the Parent or the Purchaser or any of its
affiliates on all matters properly presented to the stockholders of the
Company, or the right to vote any shares of capital stock of any subsidiary
directly or indirectly owned by the Company, (iv) seeks to require
divestiture by the Parent or the Purchaser or any of its affiliates of any
Shares, (v) might result, in the sole judgment of the Purchaser, in a
diminution of the benefits expected to be derived by the Purchaser or any
of its affiliates as a result of the Offer or the Merger or any other
business combination involving the Company, or in a diminution of the value
of the Shares or the Company or any of its subsidiaries to the Purchaser or
any of its affiliates, or (vi) challenges or adversely affects the
financing of the Offer or the Merger or any other business combination
involving the Company; or
(b) other than the application of the waiting periods under the HSR
Act and the necessity for the approvals and other actions by any domestic
(federal and state) or foreign or supranational governmental,
administrative or regulatory agency described in Section 15, there shall
have been proposed, sought, promulgated, enacted, entered, enforced or
deemed applicable to the Offer, the Merger or any other business
combination involving the Company, by any government or governmental,
regulatory or administrative agency or authority or by any court or
tribunal, in each case whether domestic, foreign or supranational, any
statute, rule, regulation, judgment, decree, decision, order or injunction
that, in the sole judgment of the Purchaser, might, directly or indirectly,
result in any of the consequences referred to in clauses (i) through (vi)
of paragraph (a) above; or
(c) any change (or any condition, event or development involving a
prospective change) shall have occurred or been threatened in the business,
properties, assets, liabilities, stockholders' equity, financial
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condition, capitalization, licenses, franchises, permits, operations,
results of operations or prospects of the Company or any of its
subsidiaries or affiliates (or the Purchaser shall have become aware
thereof) or in general economic or financial market conditions in the
United States or abroad that, in the sole judgment of the Purchaser, is or
may be materially adverse to the Company or any of its subsidiaries or
affiliates, or the Purchaser shall have become aware of any facts that, in
the sole judgment of the Purchaser, have or may have material adverse
significance with respect to either the value of the Company or any of its
subsidiaries or affiliates or the value of the Shares to the Parent or the
Purchaser or any of its affiliates; or
(d) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities
exchange or in the United States over-the-counter market, (ii) the
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States, (iii) any material adverse change
(or any existing or threatened condition, event or development involving a
prospective material adverse change) in United States or any other currency
exchange rates or a suspension of, or a limitation on, the markets
therefor, (iv) any other material adverse change in the market price of the
Shares or in the United States securities or financial markets generally,
including without limitation a decline of at least 15% in either the Dow
Jones Average of Industrial Stocks or the Standard & Poor's 500 index from
May 8, 1995 through the date of termination or expiration of the Offer, (v)
the commencement of a war, armed hostilities or other international or
national calamity directly or indirectly involving the United States, (vi)
any limitation (whether or not mandatory) by any governmental authority or
any other event that, in the sole judgment of the Purchaser, may have
material adverse significance with respect to the extension of credit by
banks or other lending institutions or the financing of the Offer or the
Merger or any other business combination involving the Company or (vii) in
the case of any of the situations described in clauses (i) through (vi)
above existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof; or
(e) a tender or exchange offer for some or all of the Shares shall
have been publicly proposed to be made or shall have been made by another
person (including the Company or any of its subsidiaries or affiliates), or
it shall have been publicly disclosed or the Purchaser shall have otherwise
deemed that (i) any person, entity (including the Company or any of its
subsidiaries or affiliates) or "group" (within the meaning of Section
13(d)(3) of the Exchange Act) shall have acquired or proposed to acquire
beneficial ownership of more than 10% of any class or series of capital
stock of the Company (including the Shares) through the acquisition of
stock, the formation of a group or otherwise, or shall have been granted
any option, right or warrant, conditional or otherwise, to acquire
beneficial ownership of more than 10% of any class or series of capital
stock of the Company (including the Shares), other than acquisitions for
bona fide arbitrage purposes only and other than as disclosed in a Schedule
13D or 13G on file with the Commission prior to April 30, 1995, (ii) any
such person, entity or group which, prior to such date, had filed such a
Schedule with the Commission, shall have acquired or proposed to acquire,
through the acquisition of stock, the formation of a group or otherwise,
beneficial ownership of additional shares of any class or series of capital
stock of the Company (including the Shares) constituting 2% or more of any
such class or series, or shall have been granted any option, right or
warrant, conditional or otherwise, to acquire beneficial ownership of
shares of any class or series of capital stock of the Company (including
the Shares) constituting 2% or more of any such class or series, (iii) any
person, entity or group shall have entered into a definitive agreement or
an agreement in principle or made a proposal with respect to a tender or
exchange offer for some or all the Shares or a merger, consolidation or
other business combination with or involving the Company or any of its
subsidiaries or affiliates or (iv) any person, entity or group shall have
filed a Notification and Report Form under the HSR Act or made a public
announcement reflecting an intent to acquire the Company or any of its
subsidiaries or any assets or securities of the Company or any of its
subsidiaries; or
(f) the Company or any of its subsidiaries shall have, directly or
indirectly, (i) split, combined or otherwise changed, or authorized or
proposed the split, combination or other change of, the Shares or its
capitalization, (ii) acquired or otherwise caused a reduction in the number
of, or authorized or proposed the acquisition or other reduction in the
number of, any outstanding Shares (other than a redemption of the Rights in
accordance with the terms of the Rights Agreement as publicly disclosed to
be in effect on
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May 4, 1995) or other securities of the Company or any subsidiary thereof,
(iii) issued, distributed or sold, or authorized, proposed or announced the
issuance, distribution or sale of, (A) any additional Shares, shares of any
other class or series of capital stock, other voting securities, or any
securities convertible into or exchangeable or exercisable for any of the
foregoing, or options, rights or warrants, conditional or otherwise, to
acquire any of the foregoing, except for the issuance of up to 318,699
Shares reported by the Company to be reserved for issuance as of April 29,
1995 pursuant to the exercise of currently outstanding employee stock
options, in accordance with their terms or (B) any other securities or
rights in respect of, in lieu of or in substitution or exchange for any
shares of its capital stock, (iv) permitted the issuance or sale of any
shares of any class of capital stock or other debt or equity securities of
any subsidiary of the Company or any securities convertible into or
exchangeable or exercisable for any of the foregoing, (v) declared, paid or
proposed to declare or pay any dividend or other distribution, whether
payable in cash, securities or other property, on, or in respect of, any
Shares (other than a distribution of the Rights Certificates or a
redemption of the Rights in accordance with the Rights Agreement as
publicly disclosed to be in effect on May 4, 1995), (vi) altered or
proposed to alter any material term of any outstanding security of the
Company or any of its subsidiaries (including the Rights), (vii) issued,
distributed or sold, or authorized or proposed the issuance, distribution
or sale of, any debt securities or securities convertible into or
exchangeable or exercisable for debt securities or any rights, warrants or
options entitling the holder thereof to purchase or otherwise acquire any
debt securities, or otherwise incurred, authorized or proposed the
incurrence of, any debt other than in the ordinary course of business and
consistent with past practice or any debt containing burdensome covenants,
(viii) authorized, recommended, proposed, effected or announced its
intention to engage in any merger (other than the Merger), consolidation,
liquidation, dissolution, business combination, acquisition (including by
way of exchange) of assets or securities, disposition (including by way of
exchange) of assets or securities, joint venture, any release or
relinquishment of any material contract or other rights of the Company or
any of its affiliates or any comparable event not in the ordinary course of
business, (ix) authorized, recommended, proposed or announced its intent to
enter into, or entered into any agreement or arrangement with any person,
entity or group that in the sole judgment of the Purchaser, has or may have
material adverse significance with respect to the value of the Company or
any of its affiliates, or the value of the Shares to the Purchaser or any
of its affiliates, (x) amended or proposed, adopted or authorized any
amendment (other than any amendment which provides that the Rights are
inapplicable to the Offer and the Merger) to the Charter or the By-Laws or
similar organizational documents of the Company or any of its subsidiaries
or the Rights Agreement or the Purchaser shall have learned that the
Company or any of its subsidiaries shall have proposed or adopted any such
amendment which shall not have been previously disclosed, (xi) entered into
or amended any employment, severance or similar agreement, arrangement or
plan with or for the benefit of any employee of the Company or any of its
subsidiaries (other than in the ordinary course of business) or so as to
provide for increased or accelerated benefits to employees as a result of
or in connection with the making of the Offer, the acceptance for payment
of or payment for Shares by the Purchaser or the consummation by the
Purchaser or any of its affiliates of the Merger or any other business
combination involving the Company, (xii) except as may be required by law,
taken any action to terminate or amend any employee benefit plan (as
defined in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended) of the Company or any of its affiliates, or the Purchaser
shall have become aware of any such action which shall not have been
previously disclosed, or (xiii) agreed in writing or otherwise to take any
of the foregoing actions; or
(g) the Purchaser shall become aware (i) that any material contractual
right of the Company or any of its subsidiaries shall be impaired or
otherwise adversely affected or that any material amount of indebtedness of
the Company or any of its subsidiaries shall become accelerated or
otherwise become due or become subject to acceleration prior to its stated
due date, in each case with or without notice or the lapse of time or both,
as a result of or in connection with the Offer or the consummation by the
Purchaser or any of its affiliates of the Merger or any other business
combination involving the Company, (ii) of any covenant, term or condition
in any of the instruments or agreements of the Company or any of its
subsidiaries that, in the sole judgment of the Purchaser, is or may be
(whether considered alone or in the
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aggregate with other such covenants, terms or conditions) materially
adverse to either the value of the Company or any of its subsidiaries
(including without limitation any event of default that may occur as a
result of or in connection with the Offer, the consummation by the
Purchaser or any of its affiliates of the Merger or any other business
combination involving the Company) or the value of the Shares to the
Purchaser or any of its affiliates or the consummation by the Purchaser or
any of its affiliates of the Merger or any other business combination
involving the Company, or (iii) that any report, document, instrument,
financial statement or schedule of the Company filed with the Commission
contained, when filed, an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order
to make the statements made therein, in light of the circumstances under
which they were made, not misleading; or
(h) any waiting periods under the HSR Act applicable to the purchase
of Shares pursuant to the Offer shall not have expired or been terminated,
or any approval, permit, authorization or consent of any domestic or
foreign or supranational governmental, administrative or regulatory agency
(federal, state, local, provincial or otherwise) (including those described
or referred to in Section 15) which is required or believed to be
appropriate shall not have been obtained on terms satisfactory to the
Parent in its sole discretion; or
(i) (i) the Purchaser or any of its affiliates shall have entered into
a definitive agreement or announced an agreement in principle with respect
to the Merger or any other business combination with the Company or any of
its affiliates or the purchase of any material portion of the securities or
assets of the Company or any of its subsidiaries or (ii) the Purchaser or
any of its affiliates and the Company shall have agreed that the Purchaser
shall amend or terminate the Offer or postpone the payment for the Shares
pursuant thereto.
The foregoing conditions are for the sole benefit of the Purchaser and may
be waived by the Purchaser in whole or in part at any time and from time to time
in its sole discretion. Any determination by the Purchaser concerning the events
described above shall be final and binding upon all parties including tendering
stockholders. The failure by the Purchaser at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right which may be asserted at any time and
from time to time.
A public announcement will be made of a material change in, or waiver of,
such conditions, to the extent required by Rules 14d-4(c) and 14d-6(d) under the
Exchange Act, and the Offer will be extended in connection with any such change
or waiver to the extent required by such rules.
THE PURCHASER IS WILLING TO ENTER INTO A MERGER AGREEMENT WITH THE COMPANY
ON SUBSTANTIALLY THE SAME TERMS AND CONDITIONS AS THE ICI MERGER AGREEMENT. IF
THE COMPANY WERE TO ENTER INTO SUCH AN AGREEMENT WITH THE PURCHASER, THE TERMS
OF AND CONDITIONS TO THE OFFER WOULD BE MODIFIED ACCORDINGLY.
SECTION 15. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS.
General. Except as set forth below, based upon an examination of publicly
available filings made by the Company with the Commission and other publicly
available information concerning the Company, neither the Purchaser nor the
Parent is aware of any licenses or other regulatory permits that appear to be
material to the business of the Company and its subsidiaries, taken as a whole,
that might be adversely affected by the Purchaser's acquisition of Shares (and
the indirect acquisition of the stock of the Company's subsidiaries) as
contemplated herein, or of any filings, approvals or other actions by or with
any domestic (federal or state), foreign or supranational governmental authority
or administrative or regulatory agency that would be required prior to the
acquisition of Shares (or the indirect acquisition of the stock of the Company's
subsidiaries) by the Purchaser pursuant to the Offer as contemplated herein.
Should any such approval or other action be required, it is the Purchaser's
present intention to seek such approval or action. However, the Purchaser does
not presently intend to delay the purchase of Shares tendered pursuant to the
Offer pending the receipt of any such approval or the taking of any such action
(subject to the Purchaser's right to delay or 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, the Parent or the Purchaser or that certain
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parts of the businesses of the Company, the Parent or the Purchaser 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, any of which could
cause the Purchaser to elect to terminate the Offer without the purchase of the
Shares thereunder. The Purchaser's obligation under the Offer to accept for
payment and pay for Shares is subject to certain conditions, including
conditions relating to the legal matters discussed in this Section 15. See
Section 14.
State Takeover Laws. The Company is incorporated under the laws of the
State of New York. The New York Takeover Statute prohibits certain "business
combinations" (including mergers) involving a New York corporation and an
"interested shareholder". The Purchaser is requesting the Company's Board of
Directors to take certain actions in order to facilitate compliance with the New
York Takeover Statute. See Section 11. A number of other states have also
adopted takeover laws and regulations which purport to varying degrees to be
applicable to attempts to acquire securities of corporations which are
incorporated in such states or which have or whose business operations have
substantial economic effects in such states, or which have substantial assets,
security holders, principal executive offices or principal places of business
therein. To the extent that certain provisions of certain of these state
takeover statutes purport to apply to the Offer, the Purchaser believes that
such laws conflict with federal law and constitute an unconstitutional burden on
interstate commerce. In 1982, the Supreme Court of the United States, in Edgar
v. Mite Corp., invalidated on constitutional grounds the Illinois Business
Takeovers Act, which as a matter of state securities law made takeovers of
corporations meeting certain requirements more difficult, and the reasoning in
such decision is likely to apply to certain other state takeover statutes.
However, in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court
of the United States held that the State of Indiana could, as a matter of
corporate law and in particular 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, provided that such laws were applicable only under
certain conditions. Subsequently, in TLX Acquisition Corp. v. Telex Corp., a
federal district court in Oklahoma ruled that the Oklahoma statutes were
unconstitutional insofar as they applied to corporations incorporated outside
Oklahoma in that they would subject such corporations to inconsistent
regulations. Similarly, in Tyson Foods, Inc. v. McReynolds, a federal district
court in Tennessee ruled that four Tennessee takeover statutes were
unconstitutional as applied to corporations incorporated outside Tennessee. This
decision was affirmed by the United States Court of Appeals for the Sixth
Circuit. In December 1988, a federal district court in Florida held in Grand
Metropolitan PLC v. Butterworth that the provisions of the Florida Affiliated
Transactions Act and the Florida Control Share Acquisition Act were
unconstitutional as applied to corporations incorporated outside of Florida.
Except as described in this Offer to Purchase, the Purchaser has not
attempted to comply with any state takeover statutes in connection with the
Offer. The Purchaser reserves the right to challenge the validity or
applicability of any state law allegedly applicable to the Offer and nothing in
this Offer to Purchase nor any action taken in connection herewith is intended
as a waiver of that right. In the event that any state takeover statute is found
applicable to the Offer, the Purchaser might be unable to accept for payment or
purchase Shares tendered pursuant to the Offer or be delayed in continuing or
consummating the Offer. In such case, the Purchaser may not be obligated to
accept for purchase, or pay for, any Shares tendered. See Section 14.
New York Security Takeover Disclosure Act. The New York Security Takeover
Disclosure Act (the "Disclosure Act") prohibits an offeror from making a
"takeover bid" unless certain registration, disclosure and other requirements
are met. The Disclosure Act defines a "takeover bid" as the acquisition or offer
to acquire by an offeror from an offeree, pursuant to a tender offer or request
or invitation for tenders, any equity security of a target company, if after
acquisition of the target company the offeror would, directly or indirectly, be
a beneficial owner of more than five percent of any class of the issued and
outstanding equity securities of the target company; and defines the term
"target company" as a corporation organized under the laws of the State of New
York and having its principal executive offices or significant business
operations located within the State. Pursuant to the Disclosure Act, the
Purchaser has filed a registration statement with the New York State Attorney
General and has disclosed certain additional information in Schedule III to this
Offer to Purchase.
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Antitrust. Under the HSR Act and the rules that have been promulgated
thereunder, 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 pursuant to the Offer is subject to such requirements. See Section 2.
The Parent intends to file on the date hereof with the FTC and the
Antitrust Division a Premerger Notification and Report Form in connection with
the purchase of Shares pursuant to the Offer. 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 the Parent and notification to the Company of such
filing. Accordingly, it is expected that the waiting period under the HSR Act
applicable to the Offer will expire at 11:59 p.m., New York City time, on
Tuesday, May 23, 1995, unless, prior to the expiration or termination of the
waiting period, the FTC or the Antitrust Division extends the waiting period by
requesting additional information or documentary material from the Parent. If
either the FTC or the Antitrust Division were to request additional information
or documentary material from the Parent, the waiting period would expire at
11:59 p.m., New York City time, on the tenth calendar day after the date of
substantial compliance by the Parent with such request. Thereafter, the waiting
period could be extended by court order or by consent of the Parent. The waiting
period under the HSR Act may be terminated by the FTC and the Antitrust Division
prior to its expiration. If the acquisition of Shares is delayed 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 purchase of and payment for Shares will be
deferred until ten days after the request is substantially complied with, unless
the waiting period is sooner terminated by the FTC and the Antitrust Division.
See Section 2. 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 or by consent of the Parent. 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. Although the
Company is required to file certain information and documentary material with
the Antitrust Division and the FTC in connection with the Offer, neither the
Company's failure to make such filings nor a request from the Antitrust Division
or the FTC for additional information or documentary material made to the
Company will extend the waiting period.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
the Purchaser pursuant to the Offer. At any time before or after the purchase by
the Purchaser of Shares pursuant to the Offer, either of 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 the Purchaser or the divestiture of substantial assets of the
Parent, its subsidiaries or the Company. 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 publicly available information relating to the
businesses in which the Company and its subsidiaries are engaged, the Purchaser
has determined that the Company and the Parent both produce and distribute
similar product lines in certain geographic areas. In particular, both the
Company and the Parent manufacture, distribute and/or sell architectural,
industrial and special purpose paints and coatings, and related products.
Although the Purchaser believes that the acquisition of Shares pursuant to the
Offer would not violate the antitrust laws, there can be no assurance that a
challenge to the Offer on antitrust grounds will not be made or, if such
challenge is made, what the outcome will be.
Environmental Matters. The Company owns facilities in the State of New
Jersey. The New Jersey Industrial Site Recovery Act ("ISRA") requires, as a
precondition to the "transfer" of an "industrial establishment" in New Jersey,
that the New Jersey Department of Environmental Protection ("DEP") approve the
transfer. Detailed information about environmental conditions at the industrial
establishment must be submitted to the DEP and additional investigation and
development and implementation of a DEP-approved workplan may be necessary. In
certain cases, preparation of the workplan can be deferred until after the
transfer.
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The acquisition of a controlling stock interest in a company which is the
owner or operator of an industrial establishment may constitute a "transfer"
subject to ISRA. If the Purchaser determines the transactions constitute a
"transfer" and that any of the Company's properties are "industrial
establishments" subject to ISRA, it presently intends to seek to comply with
ISRA's requirements.
Foreign Approvals. Based on publicly available information, it appears
that the Company also owns property or conducts business in foreign countries
and jurisdictions. In connection with the acquisition of the Shares pursuant to
the Offer, the laws of certain of those foreign countries and jurisdictions may
require the filing of information with, or the obtaining of the approval of,
governmental authorities in such countries and jurisdictions. The governments in
such countries and jurisdictions might attempt to impose additional conditions
on the Company's operations conducted in such countries and jurisdictions as a
result of the acquisition of the Shares pursuant to the Offer. There can be no
assurance that the Purchaser will be able to cause the Company or its
subsidiaries to satisfy or comply with such laws or that compliance or non-
compliance will not have adverse consequences for the Company or any subsidiary
after purchase of the Shares pursuant to the Offer.
Margin Regulations. Federal Reserve Board Regulations G, T, U and X (the
"Margin Regulations") restrict the extension or maintenance of credit for the
purpose of buying or carrying margin stock, including the Shares, if the credit
is secured directly or indirectly by the margin stock. Such secured credit may
not be extended or maintained in an amount that exceeds the maximum loan value
of the margin stock. Under the Margin Regulations, the Shares are presently
margin stock and their maximum loan value generally is 50% of their current
market value. The definition of "indirectly secured" contained in the Margin
Regulations provides that the term does not include an arrangement with a
customer if the lender in good faith has not relied upon margin stock as
collateral in extending or maintaining the particular credit.
SECTION 16. FEES AND EXPENSES. Lazard is acting as Dealer Manager in
connection with the Offer and serving as financial advisor to the Parent and the
Purchaser in connection with the proposed acquisition of the Company. The Parent
paid Lazard (i) an initial fee of $100,000 upon signing an engagement letter,
and has agreed to pay Lazard (ii) an additional fee of $250,000, payable upon
the public announcement of a possible acquisition by the Parent (by merger or
otherwise) of all or a substantial portion of the Company, and (iii) an
additional fee payable upon the earlier of acquisition by the Parent of a
majority of the voting stock of the Company or consummation of a transaction
described in clause (ii), in each case equal to 0.75% of the aggregate
consideration paid in the transaction, against which payments of any fees
previously paid as described in clauses (i) and (ii) above will be credited. The
Parent and the Purchaser also have agreed to reimburse Lazard for out-of-pocket
expenses, including reasonable attorneys' fees, and to indemnify Lazard against
certain liabilities and expenses in connection with the Offer, including certain
liabilities under the federal securities laws. Prior to Lazard's engagement,
Lazard provided financial advice to the Parent on a variety of financial matters
unrelated to the Company.
The Purchaser has retained Georgeson & Company Inc. to act as the
Information Agent and First Chicago Trust Company of New York to act as the
Depositary in connection with the Offer. The Information Agent may contact
holders of Shares by mail, telephone, telex, telegraph and personal interview
and may request brokers, dealers and other nominee stockholders to forward the
Offer materials to beneficial owners. The Information Agent and the Depositary
will receive reasonable and customary compensation for services relating to the
Offer and will be reimbursed for certain out-of-pocket expenses. The Purchaser
and the Parent have also agreed to indemnify the Information Agent and the
Depositary against certain liabilities and expenses in connection with the
Offer, including certain liabilities under the federal securities laws.
The Purchaser will not pay any fees or commissions to any broker or dealer
or any other person for soliciting tenders of Shares pursuant to the Offer
(other than to the Dealer Manager and the Information Agent). Brokers, dealers,
commercial banks and trust companies will, upon request, be reimbursed by the
Purchaser for customary mailing and handling expenses incurred by them in
forwarding offering materials to their customers.
SECTION 17. MISCELLANEOUS. The Offer is being made solely by this Offer
to Purchase and the related Letter of Transmittal and is being made to all
holders of Shares. The Purchaser is not aware of any state where
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the making of the Offer is prohibited by administrative or judicial action
pursuant to any valid state statute. If the Purchaser becomes aware of any valid
state statute prohibiting the making of the Offer or the acceptance of Shares
pursuant thereto, the Purchaser will make a good faith effort to comply with any
such state statute or seek to have such statute declared inapplicable to the
Offer. If after such good faith effort, the 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 the
Purchaser by the Dealer Manager or one or more registered brokers or dealers
that are licensed under the laws of such jurisdiction.
The Purchaser and the Parent have filed with the Commission a Schedule
14D-1 (including exhibits) pursuant to Rule 14d-3 under the Exchange Act,
furnishing certain additional information with respect to the Offer. Such
statement and any amendments thereto, including exhibits, may be inspected and
copies may be obtained from the offices of the Commission (except that they will
not be available at the regional offices of the Commission) in the manner set
forth in Section 7 of this Offer to Purchase.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR THE PARENT NOT CONTAINED HEREIN OR
IN THE LETTER OF TRANSMITTAL AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
GGI ACQUISITION, INC.
May 8, 1995
38
<PAGE> 41
SCHEDULE I
----------
INFORMATION REGARDING THE DIRECTORS AND EXECUTIVE OFFICERS OF
THE PARENT AND THE PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARENT. Set forth in the table
below are the name and the present principal occupations or employment and the
name, principal business and address of any corporation or other organization in
which such occupation or employment is conducted, and the five-year employment
history of each of the directors and executive officers of the Parent. The
Parent directly owns 100% of the equity interest in the Purchaser. Unless
otherwise indicated, each person identified below is employed by the Parent. The
principal business address of the Parent and, unless otherwise indicated, the
business address of each person identified below, is 101 Prospect Avenue, N.W.,
Cleveland, Ohio 44115-1075. Directors are identified by an asterisk. All persons
identified below are United States citizens.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- ---------------------------------------- ---------------------------------------------------
<S> <C>
John G. Breen* Mr. Breen has served as Chairman and Chief
Executive Officer since June 1986 and has served as
a Director since April 1979.
Thomas A. Commes* Mr. Commes has served as President and Chief
Operating Officer since June 1986 and has served as
a Director since April 1980.
James M. Biggar* Mr. Biggar has served as a Director of the Parent
Glencairn Corporation since July 1987. He has served as Chairman and
Lakepoint Office Park Chief Executive Officer of Glencairn Corporation
3201 Enterprise Parkway (real estate development) since July 1991, prior to
Beachwood, OH 44122 which he served as Chairman of Nestle USA, Inc.
(food products, restaurants, hotels) commencing
January 1991. From January 1984 to January 1991,
Mr. Biggar served as Chairman and Chief Executive
Officer of Nestle Enterprises, Inc.
Leigh Carter* Mr. Carter has served as a Director of the Parent
Renaissance on Playhouse Square since October 1985. Prior to his retirement in
Suite 1060 September 1990, he served as President and Chief
1350 Euclid Avenue Operating Officer of B.F. Goodrich Company
Cleveland, OH 44115 (diversified manufacturing) since April 1986.
Daniel E. Evans* Mr. Evans has served as a Director of the Parent
Bob Evans Farms, Inc. since April 1990. He has served as Chairman, Chief
3776 South High Street Executive Officer and Secretary of Bob Evans Farms,
Columbus, OH 43207 Inc. (food products and restaurants) since 1971.
Robert W. Mahoney* Mr. Mahoney has served as a Director of the Parent
Diebold, Incorporated since January 1995. He has served as Chairman,
5995 Mayfair Road Chief Executive Officer and President of Diebold,
North Canton, OH 44720 Incorporated (manufacturer of financial
self-service transaction systems and security
products) since July 1993 prior to which he served
as Chairman and Chief Executive Officer of Diebold,
Incorporated commencing April 1988.
</TABLE>
S-1
<PAGE> 42
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- ---------------------------------------- ---------------------------------------------------
<S> <C>
William G. Mitchell* Mr. Mitchell has served as a Director of the Parent
1566 Gamon Road since April 1979. Prior to his retirement in May
Wheaton, IL 60187 1987, he served as Vice Chairman of Centel
Corporation (independent telephone and electric
properties) since May 1986.
A. Malachi Mixon, III* Mr. Mixon has served as a Director of the Parent
Invacare Corporation since April 1993. He has served as Chairman, Chief
899 Cleveland Street Executive Officer and President of Invacare
Elyria, OH 44035 Corporation (manufacturer and distributor of home
health care products) since September 1983.
Helen O. Petrauskas* Ms. Petrauskas has served as a Director of the
Ford Motor Company Parent since July 1993. She has served as Vice
The American Road President -- Environmental and Safety Engineering
12th Floor of Ford Motor Company (automobile manufacturing)
World Headquarters since March 1983.
Dearborn, MI 48121
Richard K. Smucker* Mr. Smucker has served as a Director of the Parent
The J.M. Smucker Company since September 1991. He has served as President of
Strawberry Lane The J.M. Smucker Company (makers of food products)
Orville, OH 44667 since January 1987.
John L. Ault Mr. Ault has served as Vice President -- Corporate
Controller since January 1987.
Frank E. Butler Mr. Butler has served as President & General
Manager, Coatings Division since February 1992,
prior to which he served as President & General
Manager, Consumer Division commencing May 1984.
Christopher M. Connor Mr. Connor has served as President & General
Manager, Specialty Division since April 1994, prior
to which he served as Senior Vice
President -- Marketing, Paint Stores Group
commencing September 1992. From June 1986 to
September 1992, Mr. Connor served as President &
General Manager, Western Division, Paint Stores
Group.
Conway G. Ivy Mr. Ivy has served as Vice President -- Corporate
Planning and Development since April 1992, prior to
which he served as Vice President and Treasurer
commencing January 1989.
T. Scott King Mr. King has served as President & General Manager,
Consumer Brands Division since February 1992, prior
to which he served as Vice President, Director of
Sales and Marketing, Consumer Division commencing
June 1987.
Thomas Kroeger Mr. Kroeger has served as Vice President -- Human
Resources since October 1987.
</TABLE>
S-2
<PAGE> 43
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- ---------------------------------------- ---------------------------------------------------
<S> <C>
John C. Macatee Mr. Macatee has served as President, Paint Stores
Group since September 1992, prior to which he
served as President & General Manager, South
Central Division, Paint Stores Group commencing
June 1986.
Larry J. Pitorak Mr. Pitorak has served as Senior Vice
President -- Finance, Treasurer and Chief Financial
Officer since April 1992, prior to which he served
as Senior Vice President -- Finance and Chief
Financial Officer commencing July 1991. From
February 1988 to July 1991, Mr. Pitorak served as
Vice President, General Counsel and Secretary.
Joseph M. Scaminace Mr. Scaminace has served as President & General
Manager, Automotive Division since April 1994,
prior to which he served as President & General
Manager, Specialty Division commencing September
1985.
Louis E. Stellato Mr. Stellato has served as Vice President, General
Counsel and Secretary since July 1991, prior to
which he served as Assistant Secretary and
Corporate Director of Taxes commencing December
1989.
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. Set forth in the
table below are the name and the present principal occupations or employment and
the name, principal business and address of any corporation or other
organization in which such occupation or employment is conducted, and the
five-year employment history of each of the directors and executive officers of
the Purchaser. Each person identified below is employed by the Parent. The
principal business address of the Purchaser and each person identified below, is
101 Prospect Avenue, N.W., Cleveland, Ohio 44115-1075. Directors are identified
by an asterisk. All persons identified below are United States citizens.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- ---------------------------------------- ---------------------------------------------------
<S> <C>
John G. Breen* Mr. Breen has served as President and Director of
the Purchaser since its inception in May 1995. He
has also served as Chairman and Chief Executive
Officer of the Parent since June 1986 and has
served as a Director of the Parent since April
1979.
Thomas A. Commes* Mr. Commes has served as Vice President and
Director of the Purchaser since its inception in
May 1995. He has also served as President and Chief
Operating Officer of the Parent since June 1986 and
has served as a Director of the Parent since April
1980.
</TABLE>
S-3
<PAGE> 44
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- ---------------------------------------- ---------------------------------------------------
<S> <C>
Larry J. Pitorak* Mr. Pitorak has served as Treasurer and Director of
the Purchaser since its inception in May 1995. He
has also served as Senior Vice
President -- Finance, Treasurer and Chief Financial
Officer of the Parent since April 1992, prior to
which he served as Senior Vice President -- Finance
and Chief Financial Officer of the Parent
commencing July 1991. From February 1988 to July
1991, Mr. Pitorak served as Vice President, General
Counsel and Secretary of the Parent.
Conway G. Ivy Mr. Ivy has served as Vice President of the
Purchaser since its inception in May 1995. He has
also served as Vice President -- Corporate Planning
and Development of the Parent since April 1992,
prior to which he served as Vice President and
Treasurer of the Parent commencing January 1989.
Louis E. Stellato Mr. Stellato has served as Secretary of the
Purchaser since its inception in May 1995. He has
also served as Vice President, General Counsel and
Secretary of the Parent since July 1991, prior to
which he served as Assistant Secretary and
Corporate Director of Taxes of the Parent
commencing December 1989.
</TABLE>
S-4
<PAGE> 45
SCHEDULE II
-----------
PARENT PURCHASES OF SHARES
(ALL PURCHASES WERE MADE ON THE OPEN MARKET)
<TABLE>
<CAPTION>
AVERAGE
NUMBER OF PRICE PER
DATE SHARES SHARE
---------------------------------------------------------------- --------- ---------
<S> <C> <C>
4/24/95......................................................... 10,200 $16 1/8
27,600 16
4/25/95......................................................... 10,000 16 1/4
1,400 16 1/4
100 16
4/26/95......................................................... 15,000 16 1/2
5,100 16 5/8
53,200 16 3/4
4/27/95......................................................... 77,400 17
5/02/95......................................................... 200,000 17 7/8
5/03/95......................................................... 300,000 17 7/8
---------
TOTAL........................................................... 700,000
========
</TABLE>
S-5
<PAGE> 46
SCHEDULE III
------------
CERTAIN INFORMATION REQUIRED
TO BE GIVEN TO STOCKHOLDERS PURSUANT
TO NEW YORK LAW
The Purchaser was incorporated on May 5, 1995 and has not engaged in any
business since its incorporation other than that incident to its incorporation
and in connection with the Offer. Accordingly, the Purchaser has not engaged in
any significant community activities nor has the Purchaser made any significant
charitable, cultural, educational and civic contributions.
Except for the directors and executive officers of the Purchaser set forth
in Schedule I, the Purchaser has no employees. Accordingly, the Purchaser has no
existing pension plans, profit-sharing plans, savings plans, has not provided
any educational opportunities or relocation adjustments to its employees, and
has had no labor or employment related claims or disputes.
The Purchaser intends to review the status of the Company's corporate
headquarters in New York, New York and may determine to assign some or all of
the functions carried out at that office to other locations, which may be
outside of the State of New York. Approximately 25 persons are currently
employed at the Company's corporate headquarters. Except as described in this
Offer to Purchase, the Purchaser has no present plans or proposals relating to
material changes in the Company's business, corporate structure, management,
personnel or activities, which would have a substantial impact on residents of
the State of New York. The Purchaser intends to review the Company's policies
with respect to community activities, charitable, cultural, educational and
civic contributions and employment practices.
The Parent was organized under the laws of the State of Ohio eighteen years
after its founding in 1866.
PENSIONS AND BENEFITS
Substantially all employees of the Parent participate in defined benefit
plans (which are noncontributory) or a defined contribution pension plan (which
may be contributory or noncontributory). The defined benefit plan covering
salaried employees provides benefits that are based primarily on years of
service and employees' compensation. The defined benefit plan covering hourly
employees generally provides benefits of stated amounts for each year of
service. Plan assets consist primarily of cash, equity and fixed-income
securities. The Company's funding policy for its defined benefit pension plans
is to fund at least the minimum annual contribution required by applicable
regulations. To the extent certain groups of employees participate in multi-
employer plans, such plans are primarily defined benefit plans which provide
benefits of stated amounts for certain groups of union employees.
Under the Parent's Employee Stock Purchase and Savings Plan, employees may
participate through regular payroll deductions. These payroll deductions may be
made on a pre-tax and/or an after-tax basis. Additionally, the Parent may make
matching contributions on behalf of participating employees. As of December 31,
1994, 10,918 employees participated in the plan.
The Parent's Salaried Employees Revised Pension Investment Plan is a
defined contribution money purchase plan. The Parent may make an annual
contribution to each participant's account, which contribution is subject to
vesting conditions.
In addition to providing pension benefits, the Parent provides certain
health care and life insurance benefits under company-sponsored plans for active
and certain salaried retired employees hired prior to January 1, 1993 who
receive a pension from the Parent and have a minimum of ten years of service.
The health care plans are contributory and contain cost-sharing features such as
deductibles and coinsurance.
The Parent's 1994 Stock Plan permits the granting of stock options, stock
appreciation rights and restricted stock to eligible employees. Non-qualified
and incentive stock options may be granted to certain officers and key employees
under the plan at prices not less than fair market value of the shares, as
defined by
S-6
<PAGE> 47
the plan, at the date of grant. The options generally become exercisable to the
extent of one-third of the options for each full year of employment following
the date of grant and generally expire ten years after the date of grant.
Restricted stock grants may be awarded to certain officers and key
employees which generally require four years of continuous employment from the
date of grant before receiving the shares without the restriction. The number of
shares to be received without restriction is based on the performance of the
Parent relative to a peer group of companies.
LABOR AND EMPLOYEE RELATIONS
The Parent believes that its labor and employment relations with its
employees are generally good.
EDUCATION OPPORTUNITIES
The Parent provides educational assistance to eligible employees who pursue
programs of study that are consistent with the employee's field of work and the
Parent's business.
RELOCATION ADJUSTMENTS
The Parent, in accordance with the terms of its corporate policy, may
reimburse certain job applicants, new employees and current employees for
certain travel and relocation expenses.
CHARITABLE AND CIVIC ACTIVITIES
Consistent with the Parent's commitment to responsible community
involvement, the Parent supports a variety of charitable foundations,
particularly in communities in which the Parent operates facilities or has
offices. Additionally, the Parent supports higher education by making
contributions and matching gifts to certain accredited institutions of higher
education, college associations and other educational organizations.
* * *
Except as set forth in this Schedule III, all information regarding the
Parent, the Purchaser and the Offer required to be disclosed pursuant to the
Disclosure Act is set forth in this Offer to Purchase and is incorporated by
reference in the Registration Statement filed pursuant to the Disclosure Act.
S-7
<PAGE> 48
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal and any other required documents should be
sent or delivered by each Stockholder or such Stockholder's broker, dealer,
bank, trust company or other nominee to the Depositary as set forth below.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Mail:
Tenders & Exchanges
Suite 4660-GRO
P.O. Box 2559
Jersey City, NJ 07303-2559
By Facsimile Transmission:
(for Eligible Institutions only)
(201) 222-4720 or 4721
Confirmation of Facsimile
Transmissions Only:
(201) 222-4707
By Hand or Overnight Delivery:
Tenders & Exchanges
Suite 4680-GRO
14 Wall Street
8th Floor
New York, New York 10005
Questions and requests for assistance or for additional copies of this
Offer to Purchase and the Letter of Transmittal may be directed to the
Information Agent at its telephone number and address listed below. You may also
contact your broker, dealer, bank, trust company or other nominee for assistance
concerning the Offer.
The Information Agent for the Offer is:
[LOGO OF GEORGESON & COMPANY INC.]
Wall Street Plaza
New York, New York 10005
(800) 223-9800
(Toll Free)
(212) 509-6240
(Call Collect)
Banks and Brokers Call Collect
(212) 440-9800
The Dealer Manager for the Offer is:
LAZARD FRERES & CO. LLC
One Rockefeller Plaza
New York, New York 10020
(212) 632-6000
(Call Collect)
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
GROW GROUP, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED MAY 8, 1995
BY
GGI ACQUISITION, INC.
A WHOLLY-OWNED SUBSIDIARY OF
THE SHERWIN-WILLIAMS COMPANY
***************************************************************************
* *
* THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW *
* YORK CITY TIME, ON MONDAY, JUNE 5, 1995, UNLESS THE OFFER IS EXTENDED. *
* *
***************************************************************************
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Mail:
Tenders & Exchanges
Suite 4660-GRO
P.O. Box 2559
Jersey City, NJ 07303-2559
By Facsimile Transmission:
(for Eligible Institutions only)
(201) 222-4720 or 4721
Confirmation of Facsimile
Transmissions Only:
(201) 222-4707
By Hand or Overnight Delivery:
Tenders & Exchanges
Suite 4680-GRO
14 Wall Street
8th Floor
New York, New York 10005
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE, OR TRANSMISSIONS 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.
This Letter of Transmittal is to be completed by stockholders either if
certificates for Shares or Rights (as such terms are defined below) are to be
forwarded herewith or, unless an Agent's Message (as defined in Section 2 of the
Offer to Purchase) is utilized, if tenders of Shares or Rights are to be made by
book-entry transfer into the account of First Chicago Trust Company of New York,
as Depositary (the "Depositary"), at The Depository Trust Company ("DTC"), the
Midwest Securities Trust Company ("MSTC") or the Philadelphia Depository Trust
Company ("PDTC") (each a "Book-Entry Transfer Facility" and collectively the
"Book-Entry Transfer Facilities") pursuant to the procedures set forth in
Section 3 of the Offer to Purchase (as defined below). Stockholders who tender
Shares or Rights by book-entry transfer are referred to herein as "Book-Entry
Stockholders."
Unless and until GGI Acquisition, Inc., a New York corporation (the
"Purchaser"), declares that the Rights Condition (as defined in the Offer to
Purchase) is satisfied, holders of Shares will be required to tender one Right
for each Share tendered in order to effect a valid tender of such Share. If the
Distribution Date (as defined in the Offer to Purchase) has not occurred prior
to the time Shares are tendered pursuant to the Offer, a tender of Shares will
also constitute a tender of the associated Rights. See Section 3 of the Offer to
Purchase. If the Distribution Date has occurred, and certificates representing
Rights (the "Rights Certificates") have been distributed to holders of Shares,
such holders of Shares will be required to tender Rights Certificates
representing a number of Rights equal to the number of Shares being tendered in
order to effect a valid tender of such Shares. Holders of Shares and Rights
whose certificates for such Shares (the "Share Certificates") and, if
applicable, Rights Certificates are not immediately available or who cannot
deliver their Share Certificates or, if applicable, Rights Certificates and all
other required documents to the Depositary prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase), or who cannot complete the
procedure for book-entry transfer on a timely basis, must tender their Shares
and Rights according to the guaranteed delivery procedure set forth in Section 3
of the Offer to Purchase. See Instruction 2. Delivery of documents to a
Book-Entry Transfer Facility does not constitute delivery to the Depositary.
<PAGE> 2
<TABLE>
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- -------------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF
REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK,
EXACTLY AS NAME(S) APPEAR(S) ON SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
-----------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER OF
SHARES
SHARES CERTIFICATE REPRESENTED BY NUMBER OF SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
------------------------------------------------------------
---------------------
---------------------
---------------------
---------------------
TOTAL SHARES ....................
===============================================================================================================================
<FN>
* Need not be completed by Book-Entry Stockholders.
** Unless otherwise indicated, all Shares represented by certificates delivered to the Depositary will be deemed to have
been tendered. See Instruction 4.
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF RIGHTS TENDERED*
- -------------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF
REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK,
EXACTLY AS NAME(S) APPEAR(S) ON RIGHTS CERTIFICATE(S) AND RIGHT(S) TENDERED
CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
-----------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER OF
RIGHTS REPRESENTED
RIGHTS CERTIFICATE BY RIGHTS NUMBER OF RIGHTS
NUMBER(S)* CERTIFICATE(S)** TENDERED***
------------------------------------------------------------
---------------------
---------------------
---------------------
---------------------
TOTAL RIGHTS ....................
===============================================================================================================================
<FN>
* Need not be completed if the Distribution Date (as defined below) has not occurred.
** Need not be completed by Book-Entry Stockholders.
*** Unless otherwise indicated, all Rights represented by certificates delivered to the Depositary will be deemed to have
been tendered. See Instruction 4.
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/ / CHECK HERE IF SHARES ARE BEING TENDERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER FACILITY AND
COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN A BOOK-ENTRY TRANSFER FACILITY
MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution _____________________________________________
Check box of Book-Entry Transfer Facility (check one):
/ / The Depository Trust Company Trust Company / / Midwest Securities
/ / Philadelphia Depository Trust Company
Account Number ___________________ Transaction Code Number ________________
<PAGE> 3
/ / 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 Owner(s):___________________________________________
Window Ticket Number (if any):____________________________________________
Date of Execution of Notice of Guaranteed Delivery:_______________________
Name of Institution that Guaranteed Delivery:_____________________________
If delivered by Book-Entry Transfer, check box of Book-Entry Transfer
Facility (check one):
/ / The Depository Trust Company / / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number ____________________ Transaction Code Number_______________
/ / CHECK HERE IF RIGHTS ARE BEING TENDERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN A BOOK-ENTRY TRANSFER
FACILITY MAY DELIVER RIGHTS BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution_____________________________________________
Check box of Book-Entry Transfer Facility (check one):
/ / The Depository Trust Company / / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number____________________ Transaction Code Number_________________
/ / CHECK HERE IF RIGHTS ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s):___________________________________________
Window Ticket Number (if any):____________________________________________
Date of Execution of Notice of Guaranteed Delivery:_______________________
Name of Institution that Guaranteed Delivery:_____________________________
If delivered by Book-Entry Transfer, check box of Book-Entry Transfer
Facility (check one):
/ / The Depository Trust Company / / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number____________________ Transaction Code Number________________
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to GGI Acquisition, Inc. (the "Purchaser") ,
a New York corporation and a wholly-owned subsidiary of The Sherwin-Williams
Company, an Ohio corporation ("Parent"), the above-described shares of Common
Stock, par value $0.10 per share (the "Shares"), of Grow Group, Inc., a New York
corporation (the "Company"), and, unless and until the Purchaser declares that
the Rights Condition (as defined in the Offer to Purchase described below) is
satisfied, the associated Common Stock Purchase Rights (the "Rights") issued
pursuant to the Rights Agreement, dated as of February 11, 1988, as amended and
restated as of August 7, 1992, and as further amended on April 30, 1995, between
the Company and The Bank of New York, as Rights Agent, at a purchase price of
$19.50 per Share (and associated Right), 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 8, 1995 (the "Offer to Purchase") and in this Letter
of Transmittal (which, together with any supplements and amendments,
collectively constitute the "Offer"), receipt of which is hereby acknowledged.
Unless the context requires otherwise, all references to Shares shall be deemed
to refer also to the associated Rights, and all references to Rights shall be
deemed to include all benefits that may inure to the stockholders of the Company
or to holders of the Rights pursuant to the Rights Agreement. The undersigned
understands that the 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 and Rights tendered pursuant to the
Offer.
<PAGE> 4
The undersigned understands that if the Distribution Date (as defined in
the Offer to Purchase) has occurred and certificates representing Rights (the
"Rights Certificates") have been distributed to holders of Shares prior to the
date of tender of the Shares and Rights tendered herewith, Rights Certificates
representing a number of Rights equal to the number of Shares being tendered
herewith must be delivered to the Depositary (as defined below) or, if
available, a Book-Entry Confirmation (as defined herein) received with respect
thereto, in order for the Shares tendered herewith to be validly tendered. If
the Distribution Date has occurred and Rights Certificates have not been
distributed prior to the time Shares and Rights are tendered herewith, the
undersigned agrees to deliver Rights Certificates representing a number of
Rights equal to the number of Shares tendered herewith to First Chicago Trust
Company of New York (the "Depositary") within five business days after the date
such Rights Certificates are distributed. A tender of shares without Rights
Certificates constitutes an agreement by the tendering stockholder to deliver
Rights Certificates representing a number of Rights equal to the number of
Shares tendered pursuant to the Offer to the Depositary within five business
days after the date such Rights Certificates are distributed. The undersigned
understands that if the Rights Condition is not satisfied and the Distribution
Date has occurred, the Purchaser reserves the right to require that the
Depositary receive such Rights Certificates prior to accepting Shares for
payment. In that event, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of, among other things, Rights Certificates, if Rights Certificates have been
distributed to holders of Shares.
Subject to, and effective upon, acceptance for payment for the Shares and
Rights tendered herewith in accordance with the terms of the Offer, the
undersigned hereby sells, assigns and transfers to, or upon the order of, the
Purchaser all right, title and interest in and to all of the Shares that are
being tendered hereby and any and all dividends, distributions (including
additional Shares) or rights declared, paid or issued with respect to the
tendered Shares on or after May 8, 1995 and payable or distributable to the
undersigned on a date prior to the transfer to the name of the Purchaser or
nominee or transferee of the Purchaser on the Company's stock transfer records
of the Shares tendered herewith (except that if the Rights are redeemed by the
Company's Board of Directors in accordance with the terms of the Rights
Agreement, tendering stockholders who are holders of record as of the applicable
record date will be entitled to receive and retain the redemption price of $.01
per Right in accordance with the Rights Agreement) (collectively, a
"Distribution"), and appoints the Depositary the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares (and any
Distribution) with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest) to (a) deliver such
Share Certificates (as defined herein) (and any Distribution) or transfer
ownership of such Shares and Rights (and any Distribution) on the account books
maintained by a Book-Entry Transfer Facility, together in either case with
appropriate evidences of transfer, to the Depositary for the account of the
Purchaser, (b) present such Shares and Rights (and any Distributions) for
transfer on the books of the Company and (c) receive all benefits and otherwise
exercise all rights of beneficial ownership of such Shares and Rights (and any
Distribution), all in accordance with the terms and subject to the conditions of
the Offer.
The undersigned irrevocably appoints the Purchaser, its officers and its
designees, and each of them, as such stockholder's proxy, with full power of
substitution, to the full extent of such stockholder's rights with respect to
the Shares and Rights tendered by such stockholder and accepted for payment by
the Purchaser and with respect to any and all other Shares and Rights or other
securities issued or issuable in respect of such Shares and Rights on or after
May 8, 1995. Such appointment will be effective when, and only to the extent
that, the Purchaser accepts such Shares for payment. Upon such acceptance for
payment, all prior proxies given by such stockholder with respect to such Shares
and Rights (and such other shares and securities) will be revoked without
further action, and no subsequent proxies may be given nor any subsequent
written consents executed (and, if given or executed, will not be deemed
effective). The Purchaser, its officers and its designees will, with respect to
the Shares and Rights (and such other securities) tendered, be empowered to
exercise all voting and other rights of such stockholder as they in their sole
discretion may deem proper at any annual or special meeting of the Company's
stockholders or any adjournment or postponement thereof, by written consent in
lieu of any such meeting or otherwise. The Purchaser reserves the right to
require that, in order for Shares and Rights to be deemed validly tendered,
immediately upon the Purchaser's payment for
<PAGE> 5
such Shares the Purchaser must be able to exercise full voting rights with
respect to such Shares, Rights and other securities, including voting at any
meeting of stockholders.
The undersigned hereby represents and warrants that (a) the undersigned has
full power and authority to tender, sell, assign and transfer the Shares and
Rights tendered hereby (and any Distribution) and (b) when the Shares and Rights
are accepted for payment by the Purchaser, the Purchaser will acquire good,
marketable and unencumbered title to the Shares and Rights (and any
Distribution), free and clear of all liens, restrictions, charges and
encumbrances, and the same will not be subject to any adverse claim. The
undersigned, upon request, will execute and deliver any additional documents
deemed by the Depositary or the Purchaser to be necessary or desirable to
complete the sale, assignment and transfer of the Shares and Rights tendered
hereby (and any Distribution). In addition, the undersigned shall promptly remit
and transfer to the Depositary for the account of the Purchaser any and all
Distributions in respect of the Shares and Rights tendered hereby, accompanied
by appropriate documentation of transfer; and pending such remittance or
appropriate assurance thereof, the Purchaser will be, subject to applicable law,
entitled to all rights and privileges as owner of any such Distribution and may
withhold the entire purchase price or deduct from the purchase price the amount
or value thereof, as determined by the Purchaser in its sole discretion.
All authority herein conferred or agreed to be conferred shall not be
affected by and shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned.
Tenders of Shares and Rights made pursuant to the Offer are irrevocable,
except that Shares and Rights tendered pursuant to the Offer may be withdrawn at
any time prior to the Expiration Date (as defined in the Offer to Purchase) and,
unless theretofore accepted for payment by the Purchaser pursuant to the Offer,
may also be withdrawn at any time after July 6, 1995. See Section 4 of the Offer
to Purchase.
The undersigned understands that tenders of Shares and Rights pursuant to
any of the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions set forth in the
Offer, including the undersigned's representation that the undersigned owns the
Shares and Rights being tendered.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or issue or return any
certificate(s) for Shares not tendered or not accepted for payment in the
name(s) of the registered holder(s) appearing under "Description of Shares
Tendered" and "Description of Rights Tendered," respectively. Similarly, unless
otherwise indicated herein under "Special Delivery Instructions," please mail
the check for the purchase price and/or any certificate(s) for Shares not
tendered or not accepted for payment (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing under
"Description of Shares Tendered" and "Description of Rights Tendered,"
respectively. In the event that both the Special Delivery Instructions and the
Special Payment Instructions are completed, please issue the check for the
purchase price and/or any certificate(s) for Shares and Rights not tendered or
accepted for payment in the name of, and deliver such check and/or such
certificates to, the person or persons so indicated. The undersigned recognizes
that the Purchaser has no obligation, pursuant to the Special Payment
Instructions, to transfer any Shares and Rights from the name(s) of the
registered holder(s) thereof if the Purchaser does not accept for payment any of
the Shares and Rights so tendered.
<PAGE> 6
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares and Rights not tendered or not
accepted for payment and/or the check for the purchase price of Shares and
Rights accepted for payment are to be issued in the name of someone other than
the undersigned.
Issue: / / check / / certificates to:
Name: ..........................................................................
(Please Print)
Address: .......................................................................
................................................................................
(Include Zip Code)
...............................................................................
(Tax Id. or Social Security No.)
(See Substitute Form W-9.)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares and Rights not tendered or not
accepted for payment and/or the check for the purchase price of Shares and
Rights accepted for payment are to be sent to someone other than the undersigned
or to the undersigned at an address other than that shown above.
Mail: / / check / / certificates to:
Name: ..........................................................................
(Please Print)
Address: .......................................................................
................................................................................
(Include Zip Code)
...............................................................................
(Tax Id. or Social Security No.)
(See Substitute Form W-9.)
SIGN SIGN
HERE HERE
SIGN HERE
AND COMPLETE SUBSTITUTE FORM W-9 ON REVERSE
................................................................................
................................................................................
(Signature of Holder(s))
Dated: .................................................................. , 1995
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on
Share Certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and document
transmitted herewith. If signature is by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others 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)
Area Code and Telephone Number .................................................
Tax Identification or
Social Security No. ............................................................
COMPLETE SUBSTITUTE FORM W-9 ON REVERSE
Guarantee of Signature(s)
(See Instructions 1 and 5)
Authorized Signature ...........................................................
Name ...........................................................................
Name of Firm ...................................................................
(Please Print)
Address ........................................................................
(Include Zip Code)
Area Code and Telephone Number .................................................
Dated: ..................................................................., 1995
<PAGE> 7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this document, shall include
any participant in a Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of Shares and/or Rights) of Shares and/or
Rights tendered herewith, unless such holder(s) has completed either the box
entitled "Special Payment Instructions" or the box entitled "Special Delivery
Instructions" above, or (b) if such Shares are tendered for the account of a
firm which is a bank, broker, dealer, credit union, savings association or other
entity which is a member in good standing of the Securities Transfer Agents
Medallion Program (each of the foregoing being referred to as an "Eligible
Institution"). In all other cases, all signatures on this Letter of Transmittal
must be guaranteed by an Eligible Institution. See Instruction 5 of this Letter
of Transmittal.
2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed
by stockholders either if certificates are to be forwarded herewith or, unless
an Agent's Message is utilized, if tenders are to be made pursuant to the
procedure for tender by book-entry transfer set forth in Section 3 of the Offer
to Purchase. Share Certificates, or timely confirmation (a "Book-Entry
Confirmation") of a book-entry transfer of such Shares into the Depositary's
account at a Book-Entry Transfer Facility, as well as this Letter of Transmittal
(or a facsimile hereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message in connection with a book-entry
transfer, and any other documents required by this Letter of Transmittal, must
be received by the Depositary at one of its addresses set forth herein prior to
the Expiration Date (as defined in Section 1 of the Offer to Purchase); and,
unless and until the Purchaser declares that the Rights Condition (as defined in
the Offer to Purchase) is satisfied, Rights Certificates or timely confirmation
of a book-entry transfer of Rights into the Depositary's account at a Book-Entry
Transfer Facility, if available (together with, if Rights are forwarded
separately from Shares, a properly completed and duly executed Letter of
Transmittal (or a facsimile hereof) with any required signature guarantees, or
an Agent's Message in the case of a book-entry delivery, and any other documents
required by this Letter of Transmittal), must be received by the Depositary at
one of its addresses set forth herein prior to the Expiration Date or, if later,
within five business days after the date such Rights Certificates are
distributed. Stockholders whose Share Certificates or Rights Certificates are
not immediately available (including Rights Certificates that have not yet been
distributed by the Company) or who cannot deliver their Share Certificates or
Rights 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 and Rights by
properly completing and duly executing a Notice of Guaranteed Delivery pursuant
to the guaranteed delivery procedure set forth in Section 3 of the Offer to
Purchase. Pursuant to such procedure: (i) such tender must be made by or through
an Eligible Institution; (ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form made available by the Purchaser,
must be received by the Depositary prior to the Expiration Date; (iii) the Share
Certificates (or a Book-Entry Confirmation) representing all tendered Shares, in
proper form for transfer, in each case together with the Letter of Transmittal
(or a facsimile thereof), properly completed and duly executed, with any
required signature guarantees (or, in the case of a book-entry delivery, an
Agent's Message) and any other documents required by this Letter of Transmittal,
must be received by the Depositary within five New York Stock Exchange, Inc.
("NYSE") trading days after the date of execution of such Notice of Guaranteed
Delivery; and (iv) unless and until the Purchaser declares that the Rights
Condition is satisfied, the Rights Certificates, if issued, representing the
appropriate number of Rights or a Book Entry Confirmation, if available, in each
case together with a properly completed and duly executed Letter of Transmittal
(or a facsimile thereof), with any required signature guarantees (or, in the
case of a book-entry delivery, an Agent's Message) and any other documents
required by this Letter of Transmittal, must be received by the Depositary
within five NYSE trading days after the date of execution of such Notice of
Guaranteed Delivery or, if later, five NYSE trading days after Rights
Certificates are distributed to stockholders, all as provided in Section 3 of
the Offer to Purchase. If Share Certificates and Rights Certificates are
forwarded separately to the Depositary, a properly completed and duly executed
Letter of Transmittal must accompany each such delivery.
<PAGE> 8
THE METHOD OF DELIVERY OF SHARE CERTIFICATES OR OF RIGHTS CERTIFICATES AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS
BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares and Rights will be purchased (unless you are tendering all of
the Shares and Rights you own). All tendering stockholders, by execution of this
Letter of Transmittal (or a facsimile hereof), waive any right to receive any
notice of the acceptance of their Shares and Rights for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares and Rights and any other
required information should be listed on a separate signed schedule attached
hereto.
4. PARTIAL TENDERS. (Not Applicable to Book-Entry Stockholders) If fewer
than all of the Shares evidenced by any Share Certificate submitted are to be
tendered, fill in the number of Shares which are to be tendered in the box
entitled "Number of Shares Tendered." If fewer than all the Rights evidenced by
any Rights Certificates submitted are to be tendered, fill in the number of
Rights which are to be tendered in the box entitled "Number of Rights Tendered."
In such cases, new Share Certificates or Rights Certificates, as the case may
be, for the Shares or Rights that were evidenced by your old Share Certificates
or Rights Certificates, but were not tendered by you, will be sent to you
(unless otherwise provided in the appropriate box on this Letter of Transmittal)
as soon as practicable after the Expiration Date. All Shares represented by
Share Certificates and all Rights represented by Rights Certificates delivered
to the Depositary will be deemed to have been tendered unless otherwise
indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
and Rights tendered hereby, the signature(s) must correspond with the name(s) as
written on the face of the certificate(s) without alteration, enlargement or any
change whatsoever.
If any of the Shares and Rights tendered hereby are owned of record by two
or more joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares and Rights are registered in different names
on several certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Purchaser of their authority so to act must be submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares and Rights listed and transmitted hereby, no endorsements of certificates
or separate stock powers are required unless payment is to be made to or
certificates for Shares and Rights not tendered or not purchased are to be
issued in the name of a person other than the registered holder(s). Signatures
on such certificates or stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificate(s) listed, the certificate(s) must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear on the certificate(s).
Signatures on such certificates or stock powers must be guaranteed by an
Eligible Institution.
Unless and until the Purchaser declares the Rights Condition to be
satisfied, if Rights Certificates have been distributed to holders of Shares and
Rights, such holders are required to tender Rights Certificate(s) representing a
number of Rights equal to the number of Shares tendered in order to effect a
valid tender of
<PAGE> 9
such Shares. It is necessary that stockholders follow all signature requirements
of this Instruction 5 with respect to the Rights in order to tender such Rights.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, the Purchaser will pay any stock transfer taxes with respect to the transfer
and sale of Shares and Rights to it or its order pursuant to the Offer. If,
however, payment of the purchase price is to be made to, or if certificate(s)
for Shares and Rights not tendered or accepted for payment are to be registered
in the name of, any person other than the registered holder(s), or if tendered
certificate(s) are registered in the name of any person other than the person(s)
signing this Letter of Transmittal, the amount of any stock transfer taxes
(whether imposed on the registered holder(s) or such person) payable on account
of the transfer to such person will be deducted from the purchase price unless
satisfactory evidence of the payment of such taxes or an exemption therefrom, is
submitted.
Except as otherwise provided in this Instruction 6, it will not be
necessary for transfer tax stamps to be affixed to the certificate(s) listed in
this Letter of Transmittal.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued
in the name of, and/or certificates for Shares and Rights not tendered or not
accepted for payment are to be issued or returned to, a person other than the
signer of this Letter of Transmittal or if a check and/or such certificates are
to be returned to a person other than the person(s) signing this Letter of
Transmittal or to an address other than that shown in this Letter of
Transmittal, the appropriate boxes on this Letter of Transmittal must be
completed.
8. WAIVER OF CONDITIONS. The conditions of the Offer may be waived by the
Purchaser in whole or in part at any time and from time to time in its sole
discretion.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a stockholder whose tendered Shares or Rights are accepted for payment
is required to provide the Depositary with such stockholder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 below. If the Depositary is
not provided with the correct TIN, the Internal Revenue Service may subject the
stockholder or other payee to a $50 penalty. In addition, payments that are made
to such stockholder or other payee with respect to Shares or Rights purchased
pursuant to the Offer may be subject to 31% backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, the stockholder must submit a Form W-8, signed under penalties of
perjury, attesting to that individual's exempt status. A Form W-8 can be
obtained from the Depositary. See the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for more instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any such payments made to the stockholder or other payee. 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.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Depositary.
The stockholder is required to give the Depositary the TIN (i.e., social
security number or employer identification number) of the record owner of the
Shares and Rights or of the last transferee appearing on the transfers attached
to, or endorsed on, the Shares and Rights. If the Shares or Rights are in more
than one
<PAGE> 10
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.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions or requests
for assistance may be directed to the Dealer Manager or the Information Agent at
their respective addresses and telephone numbers set forth below. Additional
copies of the Offer to Purchase, this Letter of Transmittal and the Notice of
Guaranteed Delivery may also be obtained from the Information Agent or from
brokers, dealers, commercial banks or trust companies.
11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate
representing Shares or Rights has been lost, destroyed or stolen, the
stockholder should promptly notify the Depositary. The stockholder will then be
instructed as to the steps that must be taken in order to replace the
certificate. This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost or destroyed certificates have
been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), TOGETHER
WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER OR THE NOTICE OF
GUARANTEED DELIVERY, AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE.
<PAGE> 11
PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
PART 1--PLEASE PROVIDE YOUR TIN IN
SUBSTITUTE THE BOX AT THE RIGHT AND CERTIFY BY SIGNING ___________________________________
AND DATE BELOW Social Security Number
FORM W-9
or ________________________________
Employer Identification Number
</TABLE>
<TABLE>
<S> <C>
Department of the Treasury, PART 2--Certification--Under penalties of
Internal Revenue Service perjury, I certify that:
(1) The number shown on this form is my
PAYER'S REQUEST FOR correct Taxpayer Identification Number (or
TAXPAYER IDENTIFICATION I am waiting for a number to be issued
NUMBER (TIN) to me) and
(2) I am not subject to backup withholding
because: (a) I am exempt from backup
withholding, or (b) I have not been
notified by the Internal Revenue
Service (the "IRS") that I am subject
to backup withholding as a result of a
failure to report all interest or
dividends, or (c) the IRS has notified
me that I am no longer subject to
backup withholding.
Certification Instructions--You must cross
out item (2) above if you have been
notified by the IRS that you are currently
subject to backup withholding because of
under-reporting interest or dividends on
your tax 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 such Item (2).
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
PART 3 --
SIGN HERE
- -----> Signature_________________________________ Awaiting TIN / /
Date _______________________________, 1995
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACK-UP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER.
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (1) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office, or (2) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number by the time of payment, 31% of all
reportable payments made to me will be withheld.
Signature________________________________ Date__________________________, 1995
<PAGE> 12
The Information Agent for the Offer is:
(LOGO OF GEORGESON & COMPANY INC.)
Wall Street Plaza
New York, New York 10005
(800) 223-9800
(Toll Free)
(212) 509-6240
(Call Collect)
Banks and Brokers Call Collect
(212) 440-9800
The Dealer Manager for the Offer is:
LAZARD FRERES & CO. LLC
One Rockefeller Plaza
New York, New York 10020
(212) 632-6000
(Call Collect)
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
TO
TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
GROW GROUP, INC.
As set forth in Section 3 of the Offer to Purchase described below, this
instrument or one substantially equivalent hereto must be used to accept the
Offer (as defined below) if certificates for Shares (as defined below) or the
associated Common Stock Purchase Rights (the "Rights") are not immediately
available or the certificates for Shares or Rights and all other required
documents cannot be delivered to the Depositary prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase) or if the procedure for delivery
by book-entry transfer cannot be completed on a timely basis. This instrument
may be transmitted by facsimile transmission or delivered by hand or mail to the
Depositary.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Mail:
Tenders & Exchanges
Suite 4660-GRO
P.O. Box 2559
Jersey City, NJ 07303-2559
By Facsimile Transmission:
(for Eligible Institutions only)
(201) 222-4720 or 4721
Confirmation of Facsimile
Transmissions Only:
(201) 222-4707
By Hand or Overnight Delivery:
Tenders & Exchanges
Suite 4680-GRO
14 Wall Street
8th Floor
New York, New York 10005
DELIVERY OF THIS INSTRUMENT 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, the signature guarantee must appear in the
applicable space provided in the signature box in the Letter of Transmittal.
Ladies and Gentlemen:
The undersigned hereby tender(s) to GGI Acquisition, Inc., a New York
corporation and a wholly-owned subsidiary of The Sherwin-Williams Company, an
Ohio corporation, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated May 8, 1995 (the "Offer to Purchase"), and in the
related Letter of Transmittal (which, together with any supplements and
amendments, collectively constitute the "Offer"), receipt of which is hereby
acknowledged, the number of shares of Common Stock, par value $0.10 per share
(the "Shares"), and the number of Rights, indicated below of Grow Group, Inc., a
New York corporation, pursuant to the guaranteed delivery procedures set forth
in Section 3 of the Offer to Purchase.
<PAGE> 2
Signature(s)........................ Address(es).........................
.................................... ....................................
ZIP CODE
Name(s) of Record Holders...........
Area Code and Tel. No.(s)...........
...................................
PLEASE TYPE OR PRINT
................................... Check one box if Shares and Rights
will be tendered by book-entry
transfer
...................................
/ / The Depository Trust
Company
Number of Shares and Rights.........
Certificate No.(s) (If Available)
/ / Midwest Securities Trust
Company
....................................
/ / Philadelphia Depository
Trust Company
....................................
Dated........................., 1995 Account Number......................
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a bank, broker, dealer, credit union,
savings association or other entity which is a member in good standing of the
Securities Transfer Agents Medallion Program, (a) represents that the above
named person(s) "own(s)" the Shares and/or Rights tendered hereby within the
meaning of Rule 14e-4 under the Securities Exchange Act of 1934, as amended
("Rule 14e-4"), (b) represents that the tender of those Shares complies with
Rule 14e-4, (c) guarantees to deliver to the Depositary either the certificates
evidencing all tendered Shares, in proper form for transfer, or to deliver
Shares pursuant to the procedure for book-entry transfer into the Depositary's
account at The Depository Trust Company, the Midwest Securities Trust Company or
the Philadelphia Depository Trust Company (each a "Book-Entry Transfer
Facility"), in either case together with the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees or an Agent's Message (as defined in the Offer to Purchase)
in the case of a book-entry delivery, and any other required documents, all
within five New York Stock Exchange, Inc. ("NYSE") trading days after the date
hereof, and (d) guarantees, if applicable, to deliver certificates representing
the Rights ("Rights Certificates") in proper form for transfer, or to deliver
such Rights pursuant to the procedure for book-entry transfer into the
Depositary's account at a Book-Entry Transfer Facility together with, if Rights
are forwarded separately, the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed with any required signature guarantees or
an Agent's Message (as defined in the Offer to Purchase) in the case of a
book-entry delivery, and any other required documents, all within five NYSE
trading days after the date hereof or, if later, five business days after Rights
Certificates are distributed to holders of Shares.
.................................... ....................................
NAME OF FIRM AUTHORIZED SIGNATURE
.................................... Name................................
ADDRESS PLEASE TYPE OR PRINT
.................................... Title...............................
ZIP CODE
Area Code and Tel. No............... Date.........................., 1995
NOTE: DO NOT SEND CERTIFICATES FOR SHARES OR RIGHTS WITH THIS NOTICE.
CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE> 1
LAZARD FRERES & CO. LLC
ONE ROCKEFELLER PLAZA
NEW YORK, N.Y. 10020
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
GROW GROUP, INC.
AT
$19.50 NET PER SHARE
BY
GGI ACQUISITION, INC.
A WHOLLY-OWNED SUBSIDIARY OF
THE SHERWIN-WILLIAMS COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, JUNE 5, 1995, UNLESS THE OFFER IS EXTENDED.
May 8, 1995
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been engaged by GGI Acquisition, Inc., a New York corporation (the
"Purchaser") and a wholly-owned subsidiary of The Sherwin-Williams Company, an
Ohio corporation (the "Parent"), to act as Dealer Manager in connection with the
Purchaser's offer to purchase for cash all of the outstanding shares of Common
Stock, par value $0.10 per share (the "Shares"), of Grow Group, Inc., a New York
corporation (the "Company"), and, unless and until the Purchaser declares that
the Rights Condition (as defined in the Offer to Purchase described below) is
satisfied, the associated Common Stock Purchase Rights (the "Rights") issued
pursuant to the Rights Agreement, dated as of February 11, 1988, as amended and
restated as of August 7, 1992, and as further amended on April 30, 1995, between
the Company and The Bank of New York, as Rights Agent, at a purchase price of
$19.50 per Share (and associated Right), 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 8, 1995 (the "Offer to Purchase"), and in the
related Letter of Transmittal (which, together with any supplements or
amendments, collectively constitute the "Offer") enclosed herewith. Unless and
until the Purchaser declares that the Rights Condition is satisfied, holders of
Shares will be required to tender one Right for each Share tendered in order to
effect a valid tender of such Share. If the Distribution Date (as defined in the
Offer to Purchase) has not occurred prior to the time Shares are tendered
pursuant to the Offer, a tender of Shares will constitute a tender of the
associated Rights. If the Distribution Date has occurred and certificates
representing Rights ("Rights Certificates") have been distributed by the Company
to holders of Shares, then holders of Shares shall be required to tender Rights
Certificates representing a number of Rights equal to the number of Shares being
tendered in order to effect valid tender of such Shares. Holders of Shares and
Rights whose certificates for such Shares (the "Shares Certificates") and, if
applicable, Rights Certificates, are not immediately available or who cannot
deliver their Share Certificates or, as applicable, their Rights Certificates,
and all other required documents to the Depositary (as defined below) prior to
the Expiration Date (as defined in the Offer to Purchase), or who cannot
complete the procedures for book-entry transfer on a timely basis, must tender
their Shares and Rights according to the guaranteed delivery
<PAGE> 2
procedures set forth in Section 3 of the Offer to Purchase. Unless the context
otherwise requires, all references to the Rights shall include all benefits that
may inure to holders of Rights pursuant to the Rights Agreement.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares registered in your name or in the name of
your nominee.
The Offer is conditioned upon, among other things: (1) there being validly
tendered and not properly withdrawn prior to the expiration of the Offer a
number of Shares which, together with the Shares owned by the Parent,
constitutes at least 66 2/3% of the voting power (determined on a fully diluted
basis) on the date of purchase of all securities of the Company entitled to vote
generally in the election of directors or in a merger; (2) the Purchaser being
satisfied, in its sole discretion, that the "lockup fee" granted to Imperial
Chemical Industries PLC ("ICI") under the previously announced merger agreement
between the Company and ICI has been irrevocably waived by ICI or declared
invalid or unenforceable by a court of competent jurisdiction; (3) the Purchaser
being satisfied, in its sole discretion, that immediately following the
consummation of the Offer, the Purchaser will have the ability to effectuate a
second-stage merger (the "Merger") in which each share of common stock not
purchased in the Offer will be converted into the right to receive in cash the
same price per Share paid by the Purchaser pursuant to the Offer; and (4) the
Company's Common Stock Purchase Rights having been redeemed by the Company's
Board of Directors or the Purchaser being satisfied, in its sole discretion,
that such Preferred Stock Purchase Rights have been invalidated or are otherwise
inapplicable to, or that the dilutive provisions thereof would not be triggered
by, the Offer and the proposed Merger (the "Rights Condition"). The Offer is
also subject to other terms and conditions. See the Introduction and Sections 1
and 14 of the Offer to Purchase.
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase, dated May 8, 1995.
2. The YELLOW Letter of Transmittal to tender Shares and Rights for
your use and for the information of your clients. Facsimile copies of the
Letter of Transmittal may be used to tender Shares.
3. The GREEN Notice of Guaranteed Delivery for Shares and Rights to be
used to accept the Offer if Share Certificates or Rights Certificates are
not immediately available or if such certificates and all other required
documents cannot be delivered to First Chicago Trust Company of New York
(the "Depositary") by the Expiration Date or if the procedure for
book-entry transfer cannot be completed by the Expiration Date.
4. A BLUE printed form of 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 your clients' instructions
with regard to the Offer.
5. A PINK Notice of Withdrawal of Shares tendered pursuant to the
offer of GDEN Corporation (an indirect wholly-owned subsidiary of ICI).
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
7. A return envelope addressed to First Chicago Trust Company of New
York, the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON JUNE 5, 1995 UNLESS THE OFFER IS
EXTENDED.
In order to take advantage of the Offer, (i) a duly executed and properly
completed Letter of Transmittal and any required signature guarantees, or an
Agent's Message (as defined in the Offer to Purchase) in connection with a
book-entry delivery of Shares or Rights, and any other required documents should
be sent to the Depositary, and (ii) Share Certificates (and, if applicable,
Rights Certificates) representing the tendered Shares (and, if applicable,
tendered Rights) should be delivered to the Depositary, or such Shares (and, if
applicable, tendered Rights) should be tendered by book-entry transfer into the
Depositary's account maintained at one of the Book-Entry Transfer Facilities (as
described in the Offer to Purchase), all in accordance with the instructions set
forth in the Letter of Transmittal and the Offer to Purchase.
<PAGE> 3
If holders of Shares wish to tender, but it is impracticable for them to
forward their Share Certificates or, if applicable, Rights Certificates or other
required documents on or prior to the Expiration Date or to comply with the
book-entry transfer procedures on a timely basis, a tender may be effected by
following the guaranteed delivery procedures specified in Section 3 of the Offer
to Purchase.
The Purchaser will not pay any commissions or fees to any broker, dealer or
other person (other than the Dealer Manager, the Depositary and Georgeson &
Company Inc. (the "Information Agent") (as described in the Offer to Purchase))
for soliciting tenders of Shares pursuant to the Offer. The Purchaser will,
however, upon request, reimburse you for customary clerical and mailing expenses
incurred by you in forwarding any of the enclosed materials to your clients. The
Purchaser will pay or cause to be paid any stock transfer taxes payable on the
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
Lazard Freres & Co. LLC, the Dealer Manager, or the Information Agent, at their
respective addresses and telephone numbers set forth on the back cover of the
Offer to Purchase. Additional copies of the enclosed materials may be obtained
from the Information Agent.
Very truly yours,
LAZARD FRERES & CO. LLC
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, THE PARENT, THE DEALER MANAGER,
THE COMPANY, THE DEPOSITARY OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF
THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY
DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
GROW GROUP, INC.
AT
$19.50 NET PER SHARE
BY
GGI ACQUISITION, INC.
A WHOLLY-OWNED SUBSIDIARY OF
THE SHERWIN-WILLIAMS COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, JUNE 5, 1995, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated May 8, 1995
(the "Offer to Purchase"), and the related Letter of Transmittal relating to an
offer by GGI Acquisition, Inc., a New York corporation (the "Purchaser") and a
wholly-owned subsidiary of The Sherwin-Williams Company, an Ohio corporation
(the "Parent"), to purchase all of the outstanding shares of Common Stock, par
value $0.10 per share (the "Shares"), of Grow Group, Inc., a New York
corporation (the "Company"), and, unless and until the Purchaser declares that
the Rights Condition (as defined in the Offer to Purchase described below) is
satisfied, the associated Common Stock Purchase Rights (the "Rights") issued
pursuant to the Rights Agreement, dated as of February 11, 1988, as amended and
restated as of August 7, 1992, and as further amended on April 30, 1995, between
the Company and The Bank of New York, as Rights Agent, at a purchase price of
$19.50 per Share (and associated Right) net to the seller in cash without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer to Purchase and in the related Letter of Transmittal (which together
constitute the "Offer"). We are the holder of record of Shares held by us for
your account. A tender of such Shares can be made only by us as the holder of
record and pursuant to your instructions. The Letter of Transmittal is furnished
to you for your information only and cannot be used by you to tender Shares held
by us for your account.
Unless and until the Purchaser declares that the Rights Condition (as
defined below) is satisfied, if certificates representing Rights (the "Rights
Certificates") have been distributed to holders of Shares, such holders are
required to tender Rights Certificate(s) representing a number of Rights equal
to the number of Shares being tendered in order to effect valid tender of such
Shares. Based on the Company's filings with the Securities and Exchange
Commission (the "Commission"), until the Distribution Date (as defined in the
Offer to Purchase), the surrender for transfer of any of the certificates
representing Shares (the "Share Certificates") will also constitute the
surrender for transfer of the Rights associated with the Shares represented by
such Share Certificates. Based on the Company's filings with the Commission, as
soon as practicable following the Distribution Date, the Rights Certificates
will be mailed to holders of record of Shares as of the close of business on the
Distribution Date; after the Distribution Date, such separate Rights
Certificates alone will evidence the Rights. See Section 3 of the Offer to
Purchase.
We request instructions as to whether you wish to have us tender on your
behalf any or all of such Shares held by us for your account, pursuant to the
terms and subject to the conditions set forth in the Offer to Purchase. Your
instructions to tender Shares held by us for your account will also constitute a
direction to us to tender a number of Rights held by us for your account equal
to the number of Shares tendered.
<PAGE> 2
Your attention is directed to the following:
1. The tender price is $19.50 per Share, net to the seller in cash
without interest thereon.
2. The Offer is made for all of the outstanding Shares.
3. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Monday, June 5, 1995, unless the Offer is extended.
4. The Offer is conditioned upon, among other things: (1) there being
validly tendered and not properly withdrawn prior to the expiration of the
Offer a number of Shares which, together with the Shares owned by the
Parent, constitutes at least 66 2/3% of the voting power (determined on a
fully diluted basis) on the date of purchase of all securities of the
Company entitled to vote generally in the election of directors or in a
merger; (2) the Purchaser being satisfied, in its sole discretion, that the
"lockup fee" granted to Imperial Chemical Industries PLC ("ICI") under the
previously announced merger agreement between Grow Group and ICI has been
irrevocably waived by ICI or declared invalid or unenforceable by a court
of competent jurisdiction; (3) the Purchaser being satisfied, in its sole
discretion, that immediately following the consummation of the Offer, the
Purchaser will have the ability to effectuate a second-stage merger (the
"Merger") in which each share of common stock not purchased in the Offer
will be converted into the right to receive in cash the same price per
Share paid by the Purchaser pursuant to the Offer; and (4) the Company's
Common Stock Purchase Rights having been redeemed by the Company's Board of
Directors or the Purchaser being satisfied, in its sole discretion, that
such Common Stock Purchase Rights have been invalidated or are otherwise
inapplicable to, or that the dilutive provisions thereof would not be
triggered by, the Offer and the proposed Merger (the "Rights Condition").
The Offer is also subject to other terms and conditions. See the
Introduction and Sections 1 and 14 of the Offer to Purchase.
5. Tendering shareholders will not be obligated to pay brokerage fees
or commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares pursuant to the
Offer.
The Offer is being made solely by the Offer to Purchase and the related
Letter of Transmittal and is being made to all holders of Shares. The 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 the
Purchaser becomes aware of any valid state statute prohibiting the making of the
Offer or the acceptance of Shares pursuant thereto, the Purchaser will make a
good faith effort to comply with any such state statute. If, after such good
faith effort, the 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 the Purchaser by the Dealer
Manager or one or more registered brokers or dealers that are licensed under the
laws of such jurisdiction.
If you wish to have us tender any or all of the Shares held by us for your
account, please instruct us by completing, executing and returning to us the
instruction form contained in this letter. If you authorize a tender of your
Shares, all such Shares will be tendered unless otherwise specified in such
instruction form. Your instructions should be forwarded to us in ample time to
permit us to submit a tender on your behalf prior to the expiration of the
Offer.
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
GROW GROUP, INC.
The undersigned acknowledge(s) receipt of your letter enclosing the Offer
to Purchase dated May 8, 1995 (the "Offer to Purchase") and the related Letter
of Transmittal pursuant to an offer by GGI Acquisition, Inc., a New York
corporation and a wholly-owned subsidiary of The Sherwin-Williams Company, an
Ohio corporation, to purchase all outstanding shares of Common Stock, par value
$0.10 per share (the "Shares"), of Grow Group, Inc., a New York corporation,
and, unless and until the Purchaser declares that the Rights Condition (as
defined in the Offer to Purchase) is satisfied, the associated Common Stock
Purchase Rights (the "Rights").
This will instruct you to tender the number of Shares and Rights indicated
below (or, if no number is indicated below, all Shares and Rights) which are
held by you for the account of the undersigned, upon the terms and subject to
the conditions set forth in the Offer to Purchase and in the related Letter of
Transmittal furnished to the undersigned.
Number of Shares (and Rights) to be Tendered:
Shares (and Rights)*
Dated , 1995
SIGN HERE
Signature(s)
Please type or print name(s)
Address
Area Code and Telephone Number
Tax Identification or Social Security Number
- ---------------
*Unless otherwise indicated, it will be assumed that all of your Shares (and
Rights) held by us for your account are to be tendered.
<PAGE> 1
WITHDRAWAL OF
SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
GROW GROUP, INC.
TENDERED PURSUANT TO THE OFFER BY
GDEN CORPORATION
A WHOLLY-OWNED SUBSIDIARY
OF
IMPERIAL CHEMICAL INDUSTRIES PLC
To The Stockholders of
Grow Group, Inc.
Who Have Tendered Shares Pursuant
to the Offer of GDEN Corporation:
Shares of Common Stock of Grow Group, Inc., par value $0.10 per share (the
"Shares"), that have been tendered pursuant to the offer by GDEN Corporation,
for all outstanding Shares and the associated stock purchase rights (the
"Rights"), if any, may be withdrawn until 12:00 Midnight, New York City time, on
Thursday, June 1, 1995, if the applicable procedures set forth in Section 4 of
the Offer to Purchase dated May 4, 1995 (the "ICI Offer to Purchase") and
related Letter of Transmittal (which together constitute the "ICI Offer") are
followed.
STOCKHOLDERS WHO DESIRE ASSISTANCE IN WITHDRAWING SHARES TENDERED PURSUANT
TO THE ICI OFFER MAY CALL GEORGESON & COMPANY INC., TOLL FREE, AT
1-800-223-2064.
With respect to withdrawal of Shares (and Rights, if any), Section 4 of the
ICI Offer to Purchase provides in relevant part:
To be effective, a written, telegraphic, telex or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of [the ICI] Offer to Purchase and
must specify the name of the person who tendered the Shares to be withdrawn
and the number of Shares to be withdrawn and the name of the registered
holder of Shares, if different from that of the person who tendered such
Shares. If the Shares to be withdrawn have been delivered to the Depositary,
a signed notice of withdrawal with (except in the case of Shares tendered by
an Eligible Institution) signatures guaranteed by an Eligible Institution
must be submitted prior to the release of such Shares. In addition, such
notice must specify, in the case of Shares tendered by delivery of
certificates, the name of the registered holder (if different from that of
the tendering shareholder) and the serial numbers shown on the particular
certificates evidencing the Shares to be withdrawn or, in the case of Shares
tendered by book-entry transfer, the name and number of the account at one
of the Book-Entry Transfer Facilities to be credited with the withdrawn
Shares. Withdrawals may not be rescinded, and Shares withdrawn will
thereafter be deemed not validly tendered for purposes of the [ICI] Offer.
However, withdrawn Shares may be rendered again by following one of the
procedures described in Section 3 [of the ICI Offer to Purchase] at any time
prior to the Expiration Date.
A withdrawal of Shares will also constitute a withdrawal of the associated
Rights, if any. Rights may not be withdrawn unless the associated Shares are
also withdrawn.
In connection with the offer to purchase Shares by GGI Acquisition, Inc.
("Purchaser"), described in the Offer to Purchase dated May 8, 1995 (the "Offer
to Purchase") and the related Letter of Transmittal (which, together with any
supplements and amendments, collectively constitute the "Offer"), the Purchaser,
for the convenience of the holders of Shares, has enclosed a Form of "Notice of
Withdrawal," which, if properly completed and timely delivered to Morgan
Guaranty Trust Company of New York ("Morgan Guaranty"), depositary for the ICI
Offer, will enable a stockholder to withdraw Shares tendered pursuant to the ICI
Offer. This form, a facsimile thereof, or any other proper notice of withdrawal
may be delivered by hand or sent by telegram, facsimile transmission or letter
to Morgan Guaranty.
Shares held by Morgan Guaranty under the ICI Offer must first be withdrawn
before they can be tendered into the Offer.
Copies of the Offer to Purchase and related Letter of Transmittal are
available from GEORGESON & COMPANY INC. at the phone number listed above or at
the phone numbers and addresses listed on the back cover of the Offer to
Purchase. Upon proper withdrawal of Shares from the ICI Offer, Shares may be
tendered into the Offer, which will expire at 12:00 Midnight, New York City
time, on Monday, June 5, 1995, unless further extended. For information
concerning the circumstances in which the Offer and the ICI Offer may be
extended, stockholders are referred to the Offer to Purchase and the ICI Offer
to Purchase.
<PAGE> 2
NOTICE OF WITHDRAWAL
OF
SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
GROW GROUP, INC.
PREVIOUSLY TENDERED TO
GDEN CORPORATION
THE WITHDRAWAL DEADLINE IS 12:00 MIDNIGHT, NEW YORK CITY TIME,
ON THURSDAY, JUNE 1, 1995, UNLESS EXTENDED
TO: MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By Mail:
Attn: Corporate Reorganization
P.O. Box 8216
Boston, MA 02266-8216
By Overnight Courier:
Attn: Corporate Reorganization
2 Heritage Drive
N. Quincy, MA 02171
By Facsimile:
(617) 774-4519
By Hand:
State Street Bank
& Trust Company
61 Broadway - Concourse Level
New York, New York 10006
Gentlemen:
The following shares (the "Shares") of Common Stock, par value $0.10 per
share, of Grow Group, Inc., and the associated stock purchase rights (the
"Rights"), if any, previously tendered to GDEN Corporation are hereby withdrawn.
Please return the certificates representing the Shares and Rights, if any,
promptly to the undersigned.
DESCRIPTION OF SHARES AND RIGHTS, IF ANY, WITHDRAWN
Name(s) of tendering stockholders(s) ...........................................
Name(s) of registered holders(s) (if different) ................................
Number of Shares (and Rights, if any), withdrawn ...............................
FURTHER DESCRIPTION OF WITHDRAWN SHARES AND RIGHTS, IF ANY
(TO BE COMPLETED ONLY IF CERTIFICATES HAVE BEEN DELIVERED OR OTHERWISE
IDENTIFIED TO MORGAN GUARANTY TRUST COMPANY OF NEW YORK OR TENDERED BY
BOOK-ENTRY TRANSFER)
Share Certificate Number(s) ....................................................
If applicable, Rights Certificate Number(s) ....................................
If applicable, DTC, MST or PHDTC account number ................................
Name of DTC, MSTC or PHDTC account .............................................
(Must be signed on other side)
<PAGE> 3
STOCKHOLDER SIGN HERE
Must be signed by the registered holder(s) as name(s) appear(s) on stock
certificate(s) or by person(s) authorized to become registered holder(s) by
certificates and documents transmitted. If signature is by trustee, executor,
administrator, guardian, officer or other person acting in a fiduciary or
representative capacity, please set forth full title.
...............................................................................
...............................................................................
Signature(s) of Owner(s)
Dated: .................................................................. , 1995
Name(s) ........................................................................
...............................................................................
(Please Print)
Capacity .......................................................................
Address ........................................................................
GUARANTEE OF SIGNATURE(S)
(REQUIRED IF CERTIFICATES HAVE BEEN DELIVERED OR OTHERWISE
IDENTIFIED TO MORGAN GUARANTY TRUST COMPANY OF NEW YORK)
FOR USE BY FINANCIAL INSTITUTIONS ONLY:
PLACE MEDALLION GUARANTEE IN SPACE BELOW.
INSTRUCTIONS
1. GUARANTEES OF SIGNATURES. The terms of the ICI Offer to Purchase require
that if Share Certificates and Rights Certificates, if any, have been delivered
or otherwise identified to Morgan Guaranty Trust Company of New York, then the
signature on the notice of withdrawal must be guaranteed by a firm that is a
bank, broker, dealer, credit union, savings association or other entity which is
a member in good standing of the Securities Transfer Agents Medallion Program
(an "Eligible Institution"), except in the case of Shares and Rights tendered
for the account of an Eligible Institution.
2. DELIVERY OF NOTICE OF WITHDRAWAL. The Notice of Withdrawal should be
mailed or delivered to Morgan Guaranty Trust Company of New York at the
addresses set forth above and must be received by Morgan Guaranty Trust Company
of New York prior to 12:00 Midnight, New York City time, on Thursday, June 1,
1995. It is recommended that stockholders contact their broker to arrange
sending the notice by telegram or facsimile transmission, or, if time permits,
to send the notice by certified mail with return receipt requested.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate serial numbers and the number of Shares and Rights, if any, should
be listed on a separate schedule attached hereto.
IMPORTANT: THIS NOTICE OF WITHDRAWAL MUST BE RECEIVED BY MORGAN
GUARANTY TRUST COMPANY OF NEW YORK PRIOR TO 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON THURSDAY, JUNE 1, 1995.
<PAGE> 1
<TABLE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYOR--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., 000-000000. The table below will help determine the number to
give the Payor.
<S> <C> <C> <C>
- ----------------------------------------------------------- -----------------------------------------------------------
GIVE THE GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF-- NUMBER OF--
- ----------------------------------------------------------- -----------------------------------------------------------
1. An individual's account The individual 8. Sole proprietorship account The owner(4)
2. Two or more individuals The actual owner 9. A valid trust, estate, Legal entity (Do not
(joint account) of the account or, or pension trust furnish the
if combined funds, identifying number
any one of the of the personal
individual's(1) representative or
3. Husband and wife The actual owner trustee unless the
(joint account) of the account or, legal entity itself
if joint funds, is not designated in
either person(1) the account
4. Custodian account of a minor The minor(2) title.)(5)
(Uniform Gift to Minors Act) 10. Corporate account The Corporation
5. Adult and minor The adult or, 11. Religious, charitable, or The organization
(joint account) if the minor is the educational organization account
only contributor, 12. Partnership account held in the The partnership
the minor(1) name of the business
6. Account in the name of The ward, minor, 13. Association, club or other The organization
guardian or committee for or incompetent tax-exempt organization
a designated ward, minor, person(3) 14. A broker or registered nominee The broker or
or incompetent person nominee
7. a. The usual revocable savings The grantor- 15. Account with the Department The public entity
trust account (grantor is trustee(1) of Agriculture in the name of a
also trustee) public entity (such as a State or
b. So-called trust account that The actual owner(1) local governmental school district
is not a legal or valid trust or prison) that receives
under State law agricultural program payments
- ----------------------------------------------------------- -----------------------------------------------------------
<FN>
(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.
(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.
</TABLE>
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
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 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 to 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 nonresident aliens.
- Payments on tax-free covenants bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER, IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1993, payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) 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.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
<PAGE> 1
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares. The Offer is made solely by the Offer to Purchase dated
May 8, 1995 and the related Letter of Transmittal and is being made to all
holders of Shares. The 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 the Purchaser becomes aware of any valid state statute
prohibiting the making of the Offer or the acceptance of Shares pursuant
thereto, the Purchaser will make a good faith effort to comply with any such
statute or seek to have such statute declared inapplicable to the Offer. If,
after such good faith effort, the Purchaser cannot comply with such state
statute, the Offer will not be made to, nor will tenders be accepted from or on
behalf of, holders of Shares in such state. In those jurisdictions where the
securities, blue sky or other laws require the Offer to be made by a licensed
broker or dealer, the Offer shall be deemed to be made on behalf of the
Purchaser by Lazard Freres & Co. LLC or one or more registered brokers or
dealers that are licensed under the laws of such jurisdictions.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(including the Associated Common Stock Purchase Rights)
of
Grow Group, Inc.
at
$19.50 Net Per Share
by
GGI Acquisition, Inc.
a wholly-owned subsidiary of
The Sherwin-Williams Company
GGI Acquisition, Inc., a New York corporation (the "Purchaser") and a
wholly-owned subsidiary of The Sherwin-Williams Company, an Ohio corporation
(the "Parent"), hereby offers to purchase all of the outstanding shares of
common stock, par value $0.10 per share (the "Shares"), of Grow Group, Inc., a
New York corporation (the "Company"), and, unless and until the Purchaser
declares that the Rights Condition (as defined below) is satisfied, the
associated Common Stock Purchase Rights (the "Rights") issued pursuant to the
Rights Agreement, dated as of February 11, 1988, as amended and restated as of
August 7, 1992, and as further amended on April 30, 1995 (as so amended and
restated, the "Rights Agreement") between the Company and The Bank of New York,
as Rights Agent, at a purchase price of $19.50 per Share (and associated
Right), 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 8, 1995
(the "Offer to Purchase") and in the related Letter of Transmittal
(which, together with any supplements and amendments, collectively constitute
the "Offer"). Unless the context requires otherwise, all references to Shares
shall be deemed to refer also to the associated Rights, and all references to
Rights shall be deemed to include all benefits that may inure to the
stockholders of the Company or to holders of Rights pursuant to the Rights
Agreement.
The Offer is conditioned upon, among other things, (1) there being validly
tendered and not properly withdrawn prior to the expiration of the Offer a
number of Shares which constitutes at least 66 2/3% of the voting power
(determined on a fully diluted basis) on the date of purchase of all stock of
the Company entitled to vote in a merger; (2) the Purchaser being satisfied, in
its sole discretion, that the "lockup fee" granted to Imperial Chemical
Industries PLC ("ICI") under the previously announced merger agreement between
the Company and ICI has been irrevocably waived by ICI or declared invalid or
unenforceable by a court of competent jurisdiction; (3) the Purchaser being
satisfied, in its sole discretion, that immediately following the consummation
of the Offer, the Purchaser will have the ability to effectuate a second-stage
merger in which each Share not purchased in the Offer will be converted into
the right to receive in cash the same price per Share paid by the
<PAGE> 2
Purchaser pursuant to the Offer; and (4) the Rights having been redeemed by
the Company's Board of Directors or the Purchaser being satisfied, in its sole
discretion, that the Rights have been invalidated or are otherwise inapplicable
to, or that the dilutive provisions thereof would not be triggered by, the
Offer or the Merger referred to below (the "Rights Condition"). The Offer is
also subject to other terms and conditions set forth in the Offer to Purchase.
See Sections 1 and 14 of the Offer to Purchase.
The purpose of the Offer is to acquire control of, and the entire equity
interest in, the Company. The Purchaser intends to propose, and to seek to have
the Company consummate as soon as practicable after consummation of the Offer,
a merger or similar business combination (the "Merger") with the Purchaser or
another direct or indirect subsidiary of the Parent, pursuant to which each
then outstanding Share (other than Shares held by the Parent, the Purchaser or
any other wholly-owned subsidiary of the Parent, Shares held in the treasury of
the Company and Shares held by stockholders who properly exercise appraisal
rights under New York law) would be converted into the right to receive in cash
the price per Share paid by the Purchaser pursuant to the Offer. The
consummation of the Merger would be subject to a number of factors (including
satisfaction of various conditions) discussed in the Introduction and in
Sections 11 and 14 of the Offer to Purchase. Section 11 of the Offer to
Purchase also discusses certain appraisal rights available to stockholders upon
consummation of the Merger.
Unless and until the Purchaser declares that the Rights Condition is satisfied,
if certificates representing Rights ("Rights Certificates") have been
distributed to holders of Shares, such holders will be required to tender
Rights Certificates representing a number of Rights equal to the number of
Shares being tendered in order to effect a valid tender of such Shares. For
purposes of the Offer the Purchaser will be deemed to have accepted for payment
(and thereby purchased) Shares validly tendered and not properly withdrawn as,
if and when the Purchaser gives verbal or written notice to the Depositary (as
defined in the Offer to Purchase) of the Purchaser s acceptance for payment of
such Shares pursuant to the Offer. Upon the terms and subject to the conditions
of the Offer, payment for Shares accepted for payment pursuant to the Offer
will be made by deposit of the purchase price therefor with the Depositary,
which will act as agent for tendering stockholders for the purpose of receiving
payments from the Purchaser and transmitting those payments to stockholders
whose Shares have been accepted for payment. Under no circumstance will
interest on the purchase price for Shares be paid, regardless of any extension
of the Offer or any delay in making such 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) certificates representing
shares ("Share Certificates") and, if applicable, Rights Certificates, or
timely confirmation of a book-entry transfer of such Shares and, if applicable,
Rights into the Depositary s account at The Depository Trust Company, the
Midwest Securities Trust Company or the Philadelphia Depository Trust Company
(each a "Book-Entry Transfer Facility") pursuant to the procedures set forth
in Section 3 of the Offer to Purchase; (ii) the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message (as defined in Section 2 of the
Offer to Purchase) in connection with a book-entry transfer, and (iii) any
other documents required by the Letter of Transmittal.
The Purchaser expressly reserves the right, in its sole discretion, at any time
and from time to time, to extend the period during which the Offer is open for
any reason, including the occurrence of any of the conditions specified in
Section 14 of the Offer to Purchase, by giving written notice of such extension
to the Depositary. Any such extension will be followed as promptly as
practicable by public announcement thereof no later than 9:00 A.M., New York
City time, on the next business day after the previously scheduled Expiration
Date.
The term "Expiration Date" means 12:00 Midnight, New York City time, on Monday,
June 5, 1995, unless and until the Purchaser, in its sole discretion, shall
have extended the period during which the Offer is open, in which event the
term "Expiration Date" shall
<PAGE> 3
mean the latest time and date at which the Offer, as so extended by the
Purchaser, shall expire.
Tenders of Shares and Rights made pursuant to the Offer are irrevocable, except
that Shares and Rights tendered pursuant to the Offer may be withdrawn at any
time on or prior to the Expiration Date and, unless already accepted for
payment by the Purchaser pursuant to the Offer, may also be withdrawn at any
time after July 6, 1995 (or such later date as may apply in case the Offer is
extended). For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of the Offer to
Purchase. Any notice of withdrawal must specify the name of the person who
tendered the Shares or Rights to be withdrawn, the number of Shares or Rights
to be withdrawn and the name of the registered holder, if different from that
of the person who tendered the Shares or Rights. If Share Certificates or
Rights Certificates to be withdrawn have been delivered or otherwise identified
to the Depositary, then, prior to the physical release of such certificates,
the serial numbers shown on the certificates must be submitted to the
Depositary and the signatures 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 or Rights have been tendered for the account of any Eligible
Institution. If Shares or Rights 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 or
Rights, in which case a notice of withdrawal will be effective if delivered to
the Depositary by any method of delivery described in the second sentence of
this paragraph. A withdrawal of Shares or Rights shall also constitute a
withdrawal of the associated Rights or Shares, as applicable. All questions as
to the form and validity (including time of receipt) of any notice of
withdrawal will be determined by the Purchaser, in its sole discretion, whose
determination will be final and binding.
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.
A demand under New York law has been made to the Company for its list of
stockholders and security position listings for the purpose of, among other
things, disseminating the Offer to holders of Shares. Upon compliance by the
Company with such request, the Offer to Purchase and the related Letter of
Transmittal and, if required, other relevant materials will be mailed to record
holders of Shares whose names appear on the Company's list of stockholders and
will be furnished to brokers, dealers, commercial banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on the list
of stockholders, or who are listed as participants in a clearing agency's
security position listing for subsequent transmittal to beneficial owners of
Shares. A request pursuant to Rule 14d-5 under the Exchange Act for use of the
Company's stockholder list and security position listings offer also has been
made to the Company.
The 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.
Questions and requests for assistance may be directed to the Dealer Manager or
the Information Agent as set forth below. Requests for copies of the Offer to
Purchase and the related Letter of Transmittal and all other tender offer
materials may be directed to the Information Agent, and copies will be
furnished promptly at the Purchaser's expense. The Purchaser will not pay any
fees or commissions to any broker or dealer or any other person (other than the
Dealer Manager and the Information Agent) for soliciting tenders of Shares and
Rights pursuant to the Offer.
<PAGE> 4
The Information Agent for the Offer is:
GEORGESON & COMPANY INC.
Wall Street Plaza
New York, New York 10005
(212) 509-6240 (collect)
Banks and Brokers call collect (212) 440-9800
Call Toll Free: 1-800-223-2064
The Dealer Manager for the Offer is:
LAZARD FRERES & CO. LLC
One Rockefeller Plaza
New York, New York 10020
(212) 632-6000
(call collect)
May 8, 1995
<PAGE> 1
THE SHERWIN-WILLIAMS COMPANY
Contact:
Conway G. Ivy
Vice President -- Corporate Planning and Development
(216) 566-2140
For Immediate Release
May 8, 1995
THE SHERWIN-WILLIAMS COMPANY ANNOUNCES
TENDER OFFER TO ACQUIRE GROW GROUP, INC. FOR $19.50 PER SHARE
Cleveland, Ohio, May 8, 1995 -- The Sherwin-Williams Company (NYSE:SHW)
today announced it has commenced a tender offer to acquire 100% of the common
stock of Grow Group, Inc. for $19.50 per share, valuing Grow Group's stock at
$320 million. Sherwin-Williams stated it had repeatedly advised Grow Group of
its strong interest in pursuing an acquisition of Grow Group but had been
rebuffed. Sherwin-Williams had not been allowed to participate in the bidding
process which led to a negotiated merger agreement between Grow Group and
Imperial Chemical Industries PLC ("ICI") on April 30, 1995. On May 4, 1995, ICI
commenced a tender offer at $18.10 per share pursuant to the merger agreement.
John G. Breen, Chairman and Chief Executive Officer of The
Sherwin-Williams Company, commented: "Because Grow Group's management and board
of directors decided to sell their Company and to exclude Sherwin-Williams from
the bidding process, we have commenced this tender offer so our superior
proposal can be communicated directly to all Grow Group's shareholders. At the
price we are offering we think the combination of the two companies will be
beneficial to the shareholders of both companies."
Mr. Breen further stated: "The acquisition of Grow Group would be a good
strategic fit with our existing businesses. Grow Group has many good people in
their organization who should receive expanded opportunities with The
Sherwin-Williams Company. A significant part of Grow Group's sales are good
brands sold through their company-owned paint stores and its independent
dealers; distribution channels we like and will support. Grow Group's marine
coatings business would provide the initial entry into this market segment for
Sherwin-Williams. Grow Group's Consumer and Professional Products business
provides an opportunity to diversify and build on the complementary strengths
of Sherwin-Williams' Specialty Division."
In connection with Sherwin-Williams' tender offer, lawsuits have been
filed by Sherwin-Williams in New York and Ohio against Grow Group, ICI and Grow
Group's directors. In these lawsuits, Sherwin-Williams is alleging Grow Group's
directors breached their fiduciary duties in approving the ICI merger, that
Grow Group's and ICI's SEC filings are defective, and that the proposed merger
of Grow Group and ICI is illegal. Sherwin-Williams' offer is conditioned upon
Grow Group's board of directors removing certain impediments which in this
particular case interfere with Grow Group's shareholders receiving the best
possible valuation for their shares. Among these impediments are a "poison
pill" rights plan and an $8.0 million "lockup fee" granted by the Grow Group's
board to ICI. The Offer is also subject to the Hart-Scott-Rodino Act and other
customary terms and conditions. The Offer is not conditioned on
<PAGE> 2
financing.
Sherwin-Williams has indicated in its tender offer documents that it is
willing to enter into a merger agreement with Grow Group on substantially the
same terms and conditions as the ICI merger agreement with Grow Group.
The dealer manager for Sherwin-Williams' tender offer is Lazard Freres &
Co. LLC, and the information agent is Georgeson & Company Inc.
<PAGE> 1
(LOGO)
<TABLE>
<S> <C>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION WILLIAM B. PYLE
712 Main Street Managing Director
Houston, TX 77002-8059 Franchise & Trademark
713/216-5759 Finance
Fax 713/216-5880
</TABLE>
May 5, 1995
Mr. Larry J. Pitorak
Senior Vice President - Finance,
Treasurer and Chief Financial Officer
The Sherwin-Williams Company
101 Prospect Avenue, N.W.
Cleveland, OH 44115
Dear Mr. Pitorak:
This letter shall serve as the commitment of Texas Commerce Bank National
Association ("TCB") to loan to The Sherwin-Williams Company (the "Company")
$350 Million (the "Commitment") toward a $350 Million senior unsecured
revolving line of credit (the "Facility").
Upon your acceptance of this Commitment, TCB will enter into a definitive
bank loan agreement with the Company on terms and conditions to be agreed to by
TCB and the Company. Such agreement shall contain such terms as well as
representations, warranties and covenants to be made by the Company, which are
customarily found in financial transactions of the type contemplated under the
Facility; including, but not limited to, those set forth in the Term Sheet and
the Fee and Procedural Letter dated May 5, 1995 by and between TCB and the
Company.
Whether or not the Facility is consummated, the Company hereby agrees to
indemnify and hold harmless TCB and its respective directors, officers,
employees, agents and affiliates (each an "Indemnified Person") from and
against any and all losses, claims, damages, liabilities (or actions or other
proceedings commenced or threatened in respect thereof) and expenses that arise
out of, result from or in any way relate to this Commitment letter, and to
reimburse each Indemnified Person, upon demand, for any legal or other expenses
incurred in connection with investigating, defending or participating in any
such loss, claim, damage, liability, action or proceeding (whether or not such
Indemnified Person is a party to any action or proceeding out of which any such
<PAGE> 2
expenses arise), other than any of the foregoing claimed by an Indemnified
Person to the extent incurred by reason of the gross negligence or willful
misconduct of such person. THE INDEMNITY CONTAINED HEREIN EXTENDS TO AND IS
INTENDED TO COVER LOSSES ARISING OUT OF THE ORDINARY, SOLE OR CONTRIBUTORY
NEGLIGENCE OF AN INDEMNITEE. Neither TCB nor any of its affiliates, shall be
responsible or liable to the Company or any other person for any consequential
damages which may be alleged. The obligation contained in this paragraph shall
survive the closing of the Facility.
In addition, the Company hereby agrees to reimburse TCB upon demand for its
reasonable out-of-pocket costs and expenses incurred by TCB in connection with
the Facility, regardless or whether a credit agreement is executed or the
Facility closes.
We hereby consent to your disclosure of a copy of this letter as an
attachment to any filings you may be required to make with the Securities and
Exchange Commission, or any other governmental agency, as such relates to your
proposed acquisition of all of the outstanding shares of common stock, par
value $.10 per share, of Grow Group, Inc. No such consent shall create any
third-party beneficiary as to our Commitment.
The Commitment may be satisfied by the execution and delivery of final loan
documentation by TCB.
This Commitment will expire on October 31, 1995 if definitive loan
documentation has not been executed, unless the parties hereto agree to an
extension. If the foregoing is satisfactory to you, please indicate your
agreement and acceptance below and return a copy of this letter to us.
This agreement may be executed in multiple counterparts each of which
shall be deemed an original.
Yours very truly,
Texas Commerce Bank National Association
By: /s/ William B. Pyle
------------------------------------
Title: Senior Vice President
AGREED TO:
The Sherwin-Williams Company
By: /s/ L. J. Pitorak
-------------------------
Date: 5/5/95
----------------------
