SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
SCHEDULE 13D
Statement Under Section 13(d) of the
Securities Exchange Act of 1934
and
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 Company)
GDEN Corporation
(Bidder)
an indirect wholly owned subsidiary of
Imperial Chemical Industries PLC
Common Stock, $.10 Par Value
(Title of Class of Securities)
39382-010
(CUSIP Number of Class of Securities)
Copies to:
Stanley A. Lockitski Paul R. Kingsley
The Glidden Company Davis Polk & Wardwell
925 Euclid Avenue 450 Lexington Avenue
Cleveland, Ohio 44115 New York, New York 10017
Telephone: (212) 450-4000
(Name, Address and Telephone Number
of Person Authorized to Receive Notices
and Communications on Behalf of Bidder)
CALCULATION OF FILING FEE
Transaction valuation(1) Amount of filing fee(2)
$291,440,988 $58,389
(1) Based upon $18.10 cash per share for 16,101,712 shares.
(2) Includes $100.00 in respect of the Schedule 13D filing fee.
[ ] 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.
SCHEDULES 13D AND 14D-1
______________________________ ________________________________
| | | |
|CUSIP No. 39382-010 | | Page 2 |
|____________________________| |______________________________|
___________________________________________________________________________
| 1 | NAME OF REPORTING PERSON |
| | S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON |
| | Imperial Chemical Industries PLC |
| | |
|____|____________________________________________________________________|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* |
| | _ |
| | (a) |_| |
| | _ |
| | (b) |X| |
| | |
|____|____________________________________________________________________|
| 3 | SEC USE ONLY |
| | |
|____|____________________________________________________________________|
| 4 | SOURCE OF FUNDS* |
| | AF |
|____|____________________________________________________________________|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED _ |
| | PURSUANT TO ITEMS 2(d) or 2(E) |_| |
| | |
|____|____________________________________________________________________|
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | England |
|____|____________________________________________________________________|
| | 7 | SOLE VOTING POWER |
| | | -0- (see Item 6) |
| NUMBER OF |____|_______________________________________________|
| SHARES | 8 | SHARED VOTING POWER |
| BENEFICIALLY | | -0- (see Item 6) |
| OWNED BY |____|_______________________________________________|
| EACH | 9 | SOLE DISPOSITIVE POWER |
| REPORTING | | -0- (see Item 6) |
| PERSON |____|_______________________________________________|
| WITH | 10 | SHARED DISPOSITIVE POWER |
| | | -0- (see Item 6) |
|____________________|____|_______________________________________________|
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
| | -0- (see Item 6) |
|____|____________________________________________________________________|
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES _ |
| | CERTAIN SHARES* |_| |
|____|____________________________________________________________________|
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
| | 0% |
|____|____________________________________________________________________|
| 14 | TYPE OF REPORTING PERSON* |
| | HC, CO |
|____|____________________________________________________________________|
*SEE INSTRUCTIONS BEFORE FILLING OUT!
SCHEDULES 13D and 14D-1
______________________________ ________________________________
| | | |
|CUSIP No. 39382-010 | | Page 3 |
|____________________________| |______________________________|
___________________________________________________________________________
| 1 | NAME OF REPORTING PERSON |
| | S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON |
| | |
| | GDEN Corporation |
|____|____________________________________________________________________|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* |
| | _ |
| | (a) |_| |
| | _ |
| | (b) |X| |
| | |
|____|____________________________________________________________________|
| 3 | SEC USE ONLY |
| | |
|____|____________________________________________________________________|
| 4 | SOURCE OF FUNDS* |
| | AF |
|____|____________________________________________________________________|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED _ |
| | PURSUANT TO ITEMS 2(d) or 2(E) |_| |
| | |
|____|____________________________________________________________________|
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | New York |
|____|____________________________________________________________________|
| | 7 | SOLE VOTING POWER |
| | | -0- (see Item 6) |
| NUMBER OF |____|_______________________________________________|
| SHARES | 8 | SHARED VOTING POWER |
| BENEFICIALLY | | -0- (see Item 6) |
| OWNED BY |____|_______________________________________________|
| EACH | 9 | SOLE DISPOSITIVE POWER |
| REPORTING | | -0- (see Item 6) |
| PERSON |____|_______________________________________________|
| WITH | 10 | SHARED DISPOSITIVE POWER |
| | | -0- (see Item 6) |
|____________________|____|_______________________________________________|
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
| | -0- (see Item 6) |
|____|____________________________________________________________________|
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES _ |
| | CERTAIN SHARES* |_| |
|____|____________________________________________________________________|
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
| | 0% |
|____|____________________________________________________________________|
| 14 | TYPE OF REPORTING PERSON* |
| | CO |
|____|____________________________________________________________________|
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Item l. Security and Subject Company.
(a) The name of the subject company is Grow Group, Inc., a New York
corporation (the "Company"), and the address of its principal executive
offices is 200 Park Avenue, New York, New York 10166.
(b) This Statement relates to the offer by GDEN Corporation, a New
York corporation ("Bidder") and an indirect wholly owned subsidiary of
Imperial Chemical Industries PLC, a company organized under the laws of
England ("Parent"), to purchase all outstanding shares of Common Stock, $.10
par value (the "Shares"), of the Company at $18.10 per Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase (the "Offer to Purchase") and in the related Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(l) and (a)(2)
(which are herein collectively referred to as the "Offer"). The information
set forth in the introduction to the Offer to Purchase (the "Introduction") is
incorporated herein by reference.
(c) The information set forth in Section 6 "Price Range of Shares;
Dividends" of the Offer to Purchase is incorporated herein by reference.
Item 2. Identity and Background.
(a)-(d),(g) This Statement is filed by Bidder. The information set
forth in the Introduction, Section 8 "Certain Information Concerning Purchaser
and Parent" and Schedule I of the Offer to Purchase is incorporated herein by
reference.
(e)-(f) Neither Bidder, nor, to the best knowledge of Bidder, any of
the persons listed in Schedule I of the Offer to Purchase, has during the last
five years (i) been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting activities subject to, federal
or state securities laws or finding any violation of such laws.
Item 3. Past Contacts, Transactions or Negotiations with the
Subject Company.
(a)-(b) The information set forth in the Introduction and Section 10
"Background of the Offer; Past Contacts, Transactions or Negotiations with the
Company; Merger Agreement; Certain Agreements" of the Offer to Purchase is
incorporated herein by reference.
Item 4. Source and Amount of Funds or Other Consideration.
(a) The information set forth in Section 9 "Source and Amount of
Funds" of the Offer to Purchase is incorporated herein by reference.
(b)-(c) Not applicable.
Item 5. Purpose of the Tender Offer and Plans or Proposals of
the Bidder.
(a)-(e) The information set forth in the Introduction and Section 11
"Purpose of the Offer; Plans for the Company after the Offer and the Merger"
of the Offer to Purchase is incorporated herein by reference.
(f)-(g) The information set forth in Section 12 "Effect of the Offer
on the Market for the Shares; Stock Exchange Listing; Registration Under the
Exchange Act" of the Offer to Purchase is incorporated herein by reference.
Item 6. Interest in Securities of the Subject Company.
(a)-(b) The information set forth in the Introduction, Section 8
"Certain Information Concerning Purchaser and Parent", Section 10 "Background
of the Offer; Past Contacts, Transactions or Negotiations with the Company;
Merger Agreement; Certain Agreements" and Schedule I of the Offer to Purchase
is incorporated herein by reference.
Item 7. Contracts, Arrangements, Understandings or
Relationships with Respect to the Subject Company's
Securities.
The information set forth in the Introduction, Section 8 "Certain
Information Concerning Purchaser and Parent", Section 9 "Source and Amount of
Funds", Section 10 "Background of the Offer; Past Contacts, Transactions or
Negotiations with the Company; Merger Agreement; Certain Agreements" and
Schedule I of the Offer to Purchase is incorporated herein by reference.
Item 8. Persons Retained, Employed or to be Compensated.
The information set forth in Section 17 "Fees and Expenses" of the
Offer to Purchase is incorporated herein by reference.
Item 9. Financial Statements of Certain Bidders.
The information set forth in Section 8 "Certain Information
Concerning Purchaser and Parent" of the Offer to Purchase is incorporated
herein by reference.
Item 10. Additional Information.
(a) None.
(b)-(c) The information set forth in Section 16 "Certain Legal
Matters; Regulatory Approvals" of the Offer to Purchase is incorporated herein
by reference.
(d) The information set forth in Section 12 "Effect of the Offer on
the Market for the Shares; Stock Exchange Listing; Registration under the
Exchange Act" of the Offer to Purchase is incorporated herein by reference.
(e) The information set forth in Section 10 "Background of the
Offer; Past Contacts, Transactions or Negotiations with the Company; Merger
Agreement; Certain Agreements" of the Offer to Purchase is incorporated herein
by reference.
(f) The information set forth in the Offer to Purchase and the
Letter of Transmittal is incorporated herein by reference in its entirety.
Item 11. Material to be Filed as Exhibits.
(a)(l) Offer to Purchase dated May 4, 1995.
(a)(2) Letter of Transmittal (including Guidelines for
Certification of Taxpayer Identification Number on
Substitute Form W-9).
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other
Nominees.
(a)(6) Text of press release issued by Parent dated May 1,
1995.
(a)(7) Form of summary advertisement dated May 4, 1995.
(b) None.
(c)(1) Agreement and Plan of Merger dated as of April 30,
1995 between Bidder, Parent and Subject Company.
(c)(2) Option Agreement dated as of April 30, 1995 among
Bidder, Parent, Coriman Corporation and Corimon,
S.A.C.A.
(c)(3) Assignment and Assumption Agreement dated April 30,
1995 between Bidder and Parent.
(c)(4) Non-Disclosure Agreement dated December 1, 1994
between Parent and Subject Company.
(d) None.
(e) Not applicable.
(f) None.
(g)(1) Evidence of Authority of Parent's Representative
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 4, 1995
GDEN CORPORATION
By /s/ John Thompson
------------------------
Name: John Thompson
Title: President
IMPERIAL CHEMICAL INDUSTRIES PLC
By /s/ John Thompson
------------------------
Name: John Thompson
Title: Attorney in Fact
EXHIBIT INDEX
Exhibit No. Title
- ------------------------- --------------------------------------
(a)(1) Offer to Purchase dated May 4, 1995.
(a)(2) Letter of Transmittal (including
Guidelines for Certification of
Taxpayer Identification Number on
Substitute Form W-9).
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers,
Commercial Banks, Trust Companies
and Other Nominees.
(a)(5) Letter to Clients for use by
Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(6) Text of press release issued by
Parent dated May 1, 1995.
(a)(7) Form of summary advertisement dated
May 4, 1995.
(c)(1) Agreement and Plan of Merger dated
as of April 30, 1995 between Bidder,
Parent and Subject Company.
(c)(2) Option Agreement dated April 30,
1995 among Bidder, Parent, Corimon
Corporation and Corimon S.A.C.A.
(c)(3) Assignment and Assumption Agreement
dated as of April 30, 1995 between
Bidder and Parent.
(c)(4) Non-Disclosure Agreement dated
December 1, 1994 between Parent and
Subject Company.
(g)(1) Evidence of Authority of Parent's
Representative
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Rights)
of
Grow Group, Inc.
at
$18.10 Net Per Share
by
GDEN Corporation
an indirect wholly owned subsidiary of
Imperial Chemical Industries PLC
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME,
ON THURSDAY, JUNE 1, 1995, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES OF COMMON STOCK, PAR VALUE $.10 PER SHARE (INCLUDING THE ASSOCIATED
RIGHTS; COLLECTIVELY, THE "SHARES") OF GROW GROUP, INC. (THE "COMPANY")
REPRESENTING (TOGETHER WITH THE CORIMON SHARES (AS DEFINED BELOW) AND ANY
OTHER SHARES OWNED BY PURCHASER) AT LEAST TWO-THIRDS OF THE TOTAL NUMBER OF
SHARES OUTSTANDING ON A FULLY DILUTED BASIS.
---------------------------
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT THE
OFFER AND THE MERGER DESCRIBED HEREIN ARE FAIR TO, AND IN THE BEST INTEREST
OF, THE COMPANY'S SHAREHOLDERS, HAS APPROVED THE OFFER AND THE MERGER, HAS
ADOPTED A RESOLUTION PERMITTING CORIMON AND CORIMON PARENT TO ENTER INTO
AND PERFORM THEIR OBLIGATIONS UNDER THE OPTION AGREEMENT (AS SUCH TERMS ARE
DEFINED BELOW) AND RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS ACCEPT THE
OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
---------------------------
IMPORTANT
Any shareholder desiring to tender Shares should either (1) complete and sign
the Letter of Transmittal (or facsimile thereof) in accordance with the
instructions in the Letter of Transmittal and deliver it with the
certificate(s) representing tendered Shares and all other required documents
to the Depositary or tender such Shares pursuant to the procedures for
book-entry transfer set forth in Section 3 or (2) request such shareholder's
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for her or him. A shareholder having Shares registered in the
name of a broker, dealer, commercial bank, trust company or other nominee must
contact such person if such shareholder desires to tender such Shares.
Any shareholder who desires to tender Shares and cannot deliver such Shares
and all other required documents to the Depositary by the expiration of the
Offer or who cannot comply with the procedures for book-entry transfer on a
timely basis must tender such Shares pursuant to the guaranteed delivery
procedure set forth in Section 3.
Questions and requests for assistance may be directed to the Information Agent
or the Dealer Managers 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, the Dealer Managers,
brokers, dealers, commercial banks or trust companies.
---------------------------
The Dealer Managers for the Offer are:
Goldman, Sachs & Co.
---------------------------
May 4, 1995
TABLE OF CONTENTS
Section Page
INTRODUCTION......................................................... 1
1. Terms of the Offer; Expiration Date....................................3
2. Acceptance for Payment and Payment.....................................3
3. Procedure for Tendering Shares.........................................4
4. Withdrawal Rights......................................................7
5. Certain Tax Considerations.............................................7
6. Price Range of Shares; Dividends.......................................8
7. Certain Information Concerning the Company.............................9
8. Certain Information Concerning Purchaser and Parent.................. 12
9. Source and Amount of Funds........................................... 15
10. Background of the Offer; Past Contacts, Transactions or Negotiations
with the Company; Merger Agreement; Certain Agreements............... 15
11. Purpose of the Offer; Plans for the Company after the Offer and the
Merger............................................................... 30
12. Effect of the Offer on the Market for the Shares; Stock Exchange
Listing; Registration under the Exchange Act......................... 31
13. Dividends and Distributions.......................................... 32
14. Extension of Tender Period; Termination; Amendment................... 32
15. Certain Conditions of the Offer...................................... 33
16. Certain Legal Matters; Regulatory Approvals.......................... 35
17. Fees and Expenses.................................................... 39
18. Miscellaneous........................................................ 39
Schedule I Directors and Executive Officers of Parent and Purchaser
Schedule II Certain Information Required to be Given to Shareholders Pursuant
to New York Law
INTRODUCTION
To the Holders of Common Stock of
Grow Group, Inc.:
GDEN Corporation, a New York corporation (the "Purchaser") and an
indirect wholly owned subsidiary of Imperial Chemical Industries PLC, a
company organized under the laws of England ("Parent"), hereby offers to
purchase all outstanding shares of Common Stock, $.10 par value (the "Common
Stock"), of Grow Group, Inc., a New York corporation (the "Company"), and the
associated stock purchase rights (the "Rights", and together with the Common
Stock, the "Shares") issued pursuant to the Amended and Restated Rights
Agreement dated as of August 7, 1992, as amended on April 30, 1995, between
the Company and The Bank of New York, as Rights Agent (the "Rights Agreement")
(until the Distribution Date (as such term is defined in the Rights Agreement
as hereinafter described) the Rights will be evidenced by and trade with
certificates evidencing the Common Stock), at $18.10 per Share, net to the
seller in cash, subject to any amounts required to be withheld under
applicable federal, state, local or foreign income tax regulations, upon the
terms and subject to the conditions set forth in this Offer to Purchase and in
the related Letter of Transmittal (which together constitute the "Offer").
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, transfer taxes on the purchase of Shares pursuant to the Offer.
Purchaser will pay all charges and expenses of Goldman, Sachs & Co. ("Goldman
Sachs"), which is acting as Dealer Managers of the Offer (in such capacity,
the "Dealer Managers"), Morgan Guaranty Trust Company of New York (the
"Depositary") and MacKenzie Partners, Inc. (the "Information Agent") incurred
in connection with the Offer. See Section 17.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED BY THE EXPIRATION DATE (AS HEREINAFTER DEFINED) AND NOT WITHDRAWN
PRIOR TO THE EXPIRATION DATE A NUMBER OF SHARES REPRESENTING, TOGETHER WITH
THE CORIMON SHARES (AS DEFINED BELOW) AND ANY OTHER SHARES OWNED BY PURCHASER,
AT LEAST TWO-THIRDS OF THE TOTAL NUMBER OF OUTSTANDING SHARES ON A FULLY
DILUTED BASIS (THE "MINIMUM CONDITION"). SEE SECTION 15.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD OF DIRECTORS" OR THE
"BOARD") HAS UNANIMOUSLY DETERMINED THAT THE OFFER AND THE MERGER DESCRIBED
HEREIN ARE FAIR TO, AND IN THE BEST INTEREST OF, THE COMPANY'S SHAREHOLDERS,
HAS APPROVED THE OFFER AND THE MERGER, HAS ADOPTED A RESOLUTION PERMITTING
CORIMON AND CORIMON PARENT TO ENTER INTO AND PERFORM THEIR OBLIGATIONS UNDER
THE OPTION AGREEMENT (AS SUCH TERMS ARE DEFINED BELOW) AND RECOMMENDS THAT THE
COMPANY'S SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO
THE OFFER.
WERTHEIM SCHRODER & CO. INCORPORATED ("WERTHEIM SCHRODER"), FINANCIAL
ADVISOR TO THE COMPANY, HAS DELIVERED TO THE BOARD OF DIRECTORS ITS WRITTEN
OPINION TO THE EFFECT THAT, AS OF THE DATE OF THE MERGER AGREEMENT, THE $18.10
IN CASH TO BE RECEIVED BY THE HOLDERS (OTHER THAN CORIMON AND CORIMON PARENT)
OF SHARES IN THE OFFER AND THE MERGER IS FAIR TO SUCH HOLDERS FROM A FINANCIAL
POINT OF VIEW. THE FULL TEXT OF THE WRITTEN OPINION OF WERTHEIM SCHRODER
CONTAINING THE ASSUMPTIONS MADE, THE MATTERS CONSIDERED AND THE SCOPE OF THE
REVIEW UNDERTAKEN IN RENDERING SUCH OPINION AS WELL AS THE LIMITATIONS OF SUCH
OPINION IS INCLUDED WITH THE COMPANY'S SOLICITATION/RECOMMENDATION STATEMENT
ON SCHEDULE 14D-9 (THE "SCHEDULE 14D-9"), WHICH IS BEING MAILED TO
SHAREHOLDERS CONCURRENTLY HEREWITH. SHAREHOLDERS ARE URGED TO READ THE FULL
TEXT OF SUCH OPINION IN CONJUNCTION WITH THIS OFFER.
The Offer is being made pursuant to an Agreement and Plan of Merger,
dated as of April 30, 1995 (the "Merger Agreement"), among the Company, Parent
and Purchaser. The Merger Agreement provides, among other things, that as soon
as practicable after the consummation of the Offer and satisfaction of, or to
the extent permitted under the Merger Agreement, waiver of all conditions to
the Merger, Purchaser will be merged with and into the Company (the "Merger"),
with the Company as the surviving corporation. Thereupon, each outstanding
Share (other than Shares held by Parent, Purchaser or any other subsidiary of
Parent and Shares held by shareholders exercising appraisal rights) will be
converted into and represent the right to receive $18.10 in cash, or any
higher price that may be paid per Share in the Offer, without interest. See
Section 10.
The Merger Agreement provides that effective upon acceptance for payment
by Purchaser of any Shares, Purchaser shall be entitled to designate a number
of directors to the Company's Board of Directors that is proportionate to the
percentage of Shares owned by Purchaser (including, for such purposes, Shares
accepted for payment and, assuming the Shares so owned or accepted for payment
constitute at least a majority of the outstanding Shares on a fully diluted
basis, the Corimon Shares).
Simultaneously with entering into the Merger Agreement, Parent,
Purchaser, Corimon, S.A.C.A., a Venezuelan corporation ("Corimon Parent") and
Corimon Corporation, a Delaware corporation ("Corimon") and a wholly owned
subsidiary of Corimon Parent, entered into an Option Agreement dated as of
April 30, 1995 (the "Option Agreement") pursuant to which, upon the terms and
subject to the conditions set forth therein, Corimon granted to Parent an
option (the "Option") to purchase 4,025,841 Shares beneficially owned by
Corimon (the "Corimon Shares") at a purchase price of $17.50 per Share. The
Option Agreement provides that Purchaser is not entitled to exercise the
Option unless the Corimon Minimum Condition is satisfied and Corimon cannot
waive this condition without the consent of the Company. For purposes of the
Option Agreement, the Corimon Minimum Condition shall have been satisfied only
if (i) Purchaser has paid for or accepted for payment all Shares properly
tendered and not withdrawn pursuant to the Offer and (ii) such Shares plus the
Corimon Shares constitute not less than a majority of the outstanding Shares
on a fully diluted basis. Purchaser is required to exercise the Option within
two business days of the date that the Corimon Minimum Condition is satisfied.
Corimon has agreed not to tender the Corimon Shares pursuant to the Offer
unless directed to do so by Purchaser. The Option Agreement terminates upon
the termination of the Merger Agreement. See Section 10.
In addition, immediately after entering into the Merger Agreement and
the Option Agreement, Parent and Purchaser entered into an Assignment and
Assumption Agreement dated as of April 30, 1995 ("the Assignment Agreement")
pursuant to which, upon the terms set forth therein, Purchaser agreed to make
the Offer and Parent assigned and transferred to Purchaser (i) its right to
purchase Shares pursuant to the Offer and (ii) its rights and obligations
under the Option Agreement. Such assignments do not relieve Parent of its
obligations in respect thereof. See Section 10.
According to the Company, as of April 29, 1995, there were outstanding
(i) 16,101,712 Shares and (ii) employee stock options to purchase 318,699
Shares. Based upon the foregoing, there were approximately 16,420,411 Shares
outstanding on a fully diluted basis. Accordingly, Purchaser believes that
the Minimum Condition would be satisfied if at least 6,921,100 Shares are
validly tendered pursuant to the Offer and not withdrawn, as such Shares
together with the Corimon Shares would constitute two-thirds of the
outstanding Shares on a fully diluted basis. As of the date hereof, neither
Purchaser nor Parent nor any of their affiliates own any Shares.
The purpose of the Offer is to acquire for cash as many outstanding
Shares as possible as a first step in acquiring the entire equity interest in
the Company.
If pursuant to the Offer and the Option Agreement, Purchaser acquires
more than two-thirds of the outstanding Shares, Purchaser will have sufficient
voting power to approve the Merger without the affirmative vote of any other
shareholder. If required by law, a proxy statement or information statement
relating to the Merger will be mailed to all shareholders of the Company. If
Purchaser acquires 90% or more of the Shares, such Merger could be
accomplished under the New York Business Corporation Law ("New York Law")
without a shareholders' meeting.
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.
1. Terms of the Offer; Expiration Date. Upon the terms and subject to
the conditions set forth in the Offer, Purchaser will accept for payment and
pay for all Shares that are validly tendered by the Expiration Date and not
withdrawn as provided in Section 4. The term "Expiration Date" shall mean
12:00 Midnight, New York City time, on Thursday, June 1, 1995, unless
Purchaser shall have extended the period of time for which the Offer is open,
in which event the term "Expiration Date" shall mean the latest time and date
at which the Offer, as so extended by Purchaser, shall expire.
The Offer is subject to certain conditions set forth in Section 15,
including satisfaction of the Minimum Tender Condition and expiration or
termination of the waiting period applicable to Purchaser's acquisition of
Shares pursuant to the Offer under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act") and under Section 721 of
the Defense Production Act of 1950, as amended (the "Exon-Florio Provision").
If any such condition is not satisfied, Purchaser may (i) terminate the Offer
and return all tendered Shares to tendering shareholders, (ii) extend the
Offer and, subject to withdrawal rights as set forth in Section 4, retain all
such Shares until the expiration of the Offer as so extended, (iii) waive such
condition and, subject to any requirement to extend the period of time during
which the Offer is open, purchase all Shares validly tendered by the
Expiration Date and not withdrawn (provided that Parent may not accept Shares
for payment pursuant to the Offer unless the Shares so accepted for payment,
together with the Corimon Shares and any other Shares then owned by Parent,
represent at least a majority of the outstanding Shares on a fully diluted
basis) or (iv) delay acceptance for payment or payment for Shares, subject to
applicable law, until satisfaction or waiver of the conditions to the Offer;
provided, however, that no change may be made which changes the form of
consideration to be paid or decreases the price per Share or the number of
Shares sought in the Offer or which imposes conditions to the Offer in
addition to those set forth in Section 15 or which amends any condition to the
Offer in any manner adverse to the holders of the Shares. For a description
of Purchaser's right to extend the period of time during which the Offer is
open and to amend, delay or terminate the Offer, see Sections 14 and 15.
The Company has provided Purchaser with the Company's shareholder list
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of
Transmittal will be mailed to record holders of Shares and will be furnished
to brokers, banks and similar persons whose names, or the names of whose
nominees, appear on the shareholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
Any extension, delay, termination, waiver or amendment of the Offer will
be followed as promptly as practicable by public announcement thereof, with
such announcement in the case of an extension to be made no later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled Expiration Date. Subject to applicable law (including Rules
14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act, which require that
material changes be promptly disseminated to shareholders in a manner
reasonably designed to inform them of such changes) and without limiting the
manner in which Purchaser may choose to make any public announcement,
Purchaser shall have no obligation to publish, advertise or otherwise
communicate any such public announcement other than by issuing a press release
to the Dow Jones News Service.
2. Acceptance for Payment and Payment. Upon the terms and subject to the
conditions of the Offer, Purchaser will accept for payment and pay for all
Shares validly tendered by the Expiration Date and not withdrawn as soon as
practicable after the later of (i) the Expiration Date and (ii) the
satisfaction or waiver of the conditions set forth in Section 15. In
addition, Purchaser reserves the right, in its sole discretion and subject to
applicable law, to delay the acceptance for payment or payment for Shares in
order to comply in whole or in part with any applicable law. For a description
of Purchaser's right to terminate the Offer and not accept for payment or pay
for Shares or to delay acceptance for payment or payment for Shares, see
Section 14.
For purposes of the Offer, Purchaser shall be deemed to have accepted
for payment tendered Shares when, as and if Purchaser gives oral or written
notice to the Depositary of its acceptance of the tenders of such Shares.
Payment for Shares accepted for payment pursuant to the Offer will be made by
deposit of the purchase price with the Depositary, which will act as agent for
the tendering shareholders for the purpose of receiving payments from
Purchaser and transmitting such payments to tendering shareholders. In all
cases, payment for Shares accepted for payment pursuant to the Offer will be
made only after timely receipt by the Depositary of certificates for such
Shares (or of a confirmation of a book-entry transfer of such Shares into the
Depositary's account at one of the Book-Entry Transfer Facilities (as defined
in Section 3)), a properly completed and duly executed Letter of Transmittal
(or facsimile thereof or an Agent's Message (as defined below)) and any other
required documents. For a description of the procedure for tendering Shares
pursuant to the Offer, see Section 3. Accordingly, payment may be made to
tendering shareholders at different times if delivery of the Shares and other
required documents occur at different times. Under no circumstances will
interest be paid by Purchaser on the consideration paid for Shares pursuant to
the Offer, regardless of any delay in making such payment.
If Purchaser increases the consideration to be paid for Shares pursuant
to the Offer, Purchaser will pay such increased consideration for all Shares
purchased pursuant to the Offer.
Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to one or more of its direct or indirect wholly owned
subsidiaries, the right to purchase Shares tendered pursuant to the Offer, but
any such transfer or assignment will not relieve Parent of its obligations
under the Offer or prejudice the rights of tendering shareholders to receive
payment for Shares validly tendered and accepted for payment.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if certificates are submitted for more Shares than are tendered,
certificates for such unpurchased or untendered Shares will be returned (or,
in the case of Shares tendered by book-entry transfer, such Shares will be
credited to an account maintained at one of the Book-Entry Transfer
Facilities), without expense to the tendering shareholder, as promptly as
practicable following the expiration or termination of the Offer.
Purchaser acknowledges that (i) Rule 14e-1(c) under the Exchange Act
requires Purchaser to pay the consideration offered or return the Shares
tendered promptly after the termination or withdrawal of the Offer, and (ii)
unless otherwise permitted by law, Purchaser may not delay acceptance for
payment of, or payment for, any Shares upon the occurrence of any of the
conditions specified in Section 15 without extending the period of time during
which the Offer is open.
3. Procedure for Tendering Shares. To tender Shares pursuant to the
Offer, either (a) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof) and any other documents required by the Letter of
Transmittal must be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase and either (i) certificates
for the Shares to be tendered must be received by the Depositary at one of
such addresses or (ii) such Shares must be delivered pursuant to the
procedures for book-entry transfer described below (and a confirmation of such
delivery must be received by the Depositary including an Agent's Message if
the tendering shareholder has not delivered a Letter of Transmittal), in each
case by the Expiration Date, or (b) the guaranteed delivery procedure
described below must be complied with. The term "Agent's Message" means a
message, transmitted by a Book-Entry Transfer Facility (as hereinafter
defined) to and received by the Depositary and forming a part of a book-entry
confirmation which states that such Book-Entry Transfer Facility has received
an express acknowledgement from the participant in such Book-Entry Transfer
Facility tendering the Shares which are the subject of such book-entry
confirmation that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that the Company may enforce such
agreement against such participant.
Book Entry Delivery. The Depositary will establish an account with
respect to the Shares at The Depository Trust Company, Midwest Securities
Trust Company and Philadelphia Depository Trust Company (collectively referred
to as the "Book-Entry Transfer Facilities") for purposes of the Offer within
two business days after the date of this Offer to Purchase, and any financial
institution that is a participant in the system of any Book-Entry Transfer
Facility may make delivery of Shares by causing such Book-Entry Transfer
Facility to transfer such Shares into the Depositary's account in accordance
with the procedures of such Book-Entry Transfer Facility. However, although
delivery of Shares may be effected through book-entry transfer, the Letter of
Transmittal (or facsimile thereof) properly completed and duly executed
together with any required signature guarantees or an Agent's Message and any
other required documents must, in any case, be received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase by
the Expiration Date, or the guaranteed delivery procedure described below must
be complied with. Delivery of the Letter of Transmittal and any other
required documents to a Book-Entry Transfer Facility does not constitute
delivery to the Depositary.
Signature Guarantees. Except as otherwise provided below, all
signatures on a Letter of Transmittal must be guaranteed by a financial
institution (including most banks, savings and loan associations and brokerage
houses) which is a member of a recognized Medallion Program approved by The
Securities Transfer Association Inc., including the Securities Transfer Agents
Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the
New York Stock Exchange, Inc. Medallion Signature Program (MSP) (an "Eligible
Institution"). Signatures on a Letter of Transmittal need not be guaranteed
(a) if the Letter of Transmittal is signed by the registered holder of the
Shares tendered therewith and such holder has not completed the box entitled
"Special Payment Instructions" on the Letter of Transmittal or (b) if such
Shares are tendered for the account of an Eligible Institution. See
Instructions 1 and 5 of the Letter of Transmittal.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant
to the Offer and cannot deliver such Shares and all other required documents
to the Depositary by the Expiration Date, or such shareholder cannot complete
the procedure for delivery by book-entry transfer on a timely basis, such
Shares may nevertheless be tendered if all of the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by Purchaser is received by the
Depositary (as provided below) by the Expiration Date; and
(iii) the certificates for such Shares (or a confirmation of a
book-entry transfer of such Shares into the Depositary's account at one of the
Book-Entry Transfer Facilities), together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) with any required
signature guarantee or an Agent's Message and any other documents required by
the Letter of Transmittal, are received by the Depositary within five New York
Stock Exchange, Inc. ("NYSE") trading days after the date of execution of the
Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or
transmitted by telegram, telex, facsimile transmission or mail to the
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such Notice.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS,
INCLUDING THROUGH BOOK-ENTRY TRANSFER FACILITIES, IS AT THE OPTION AND RISK OF
THE TENDERING SHAREHOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN
ACTUALLY RECEIVED BY THE DEPOSITARY. IF CERTIFICATES FOR SHARES ARE SENT BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED.
Under the federal income tax laws, the Depositary will be required to
withhold 31% of the amount of any payments made to certain shareholders
pursuant to the Offer. In order to avoid such backup withholding, each
tendering shareholder must provide the Depositary with such shareholder's
correct taxpayer identification number and certify that such shareholder is
not subject to such backup withholding by completing the Substitute Form W-9
included in the Letter of Transmittal. If a shareholder is a non-resident
alien or foreign entity not subject to back-up withholding, the shareholder
must give the Depositary a completed Form W-8 Certificate of Foreign Status
prior to receipt of any payment.
By executing a Letter of Transmittal, a tendering shareholder
irrevocably appoints designees of Purchaser as such shareholder's proxies in
the manner set forth in the Letter of Transmittal to the full extent of such
shareholder's rights with respect to the Shares tendered by such shareholder
and accepted for payment by Purchaser (and any and all other Shares or other
securities issued or issuable in respect of such Shares on or after April 30,
1995). All such proxies shall be irrevocable and coupled with an interest in
the tendered Shares. Such appointment is effective only upon the acceptance
for payment of such Shares by Purchaser. Upon such acceptance for payment,
all prior proxies and consents granted by such shareholder with respect to
such Shares and other securities will, without further action, be revoked, and
no subsequent proxies may be given nor subsequent written consents executed by
such shareholder (and, if given or executed, will not be deemed to be
effective). Such designees of Purchaser will be empowered to exercise all
voting and other rights of such shareholder as they, in their sole discretion,
may deem proper at any annual, special or adjourned meeting of the Company's
shareholders, by written consent or otherwise. Purchaser reserves the right
to require that, in order for Shares to be validly tendered, immediately upon
Purchaser's acceptance for payment of such Shares, Purchaser is able to
exercise full voting rights with respect to such Shares and other securities
(including voting at any meeting of shareholders then scheduled or acting by
written consent without a meeting).
The tender of Shares pursuant to any one of the procedures described
above will constitute the tendering shareholder's acceptance of the Offer, as
well as the tendering shareholder's representation and warranty that (a) such
shareholder owns the Shares being tendered within the meaning of Rule 14e-4
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), (b) the tender of such Shares complies with Rule 14e-4, and
(c) such shareholder has the full power and authority to tender and assign the
Shares tendered, as specified in the Letter of Transmittal. Purchaser's
acceptance for payment of Shares tendered pursuant to the Offer will
constitute a binding agreement between the tendering shareholder and Purchaser
upon the terms and subject to the conditions of the Offer.
All questions as to the form of documents and the validity, eligibility
(including time of receipt) and acceptance for payment of any tender of Shares
will be determined by Purchaser, in its sole discretion, which determination
shall be final and binding. Purchaser reserves the absolute right to reject
any or all tenders of Shares determined by it not to be in proper form or the
acceptance for payment of or payment for which may, in the opinion of
Purchaser's counsel, be unlawful. Purchaser also reserves the absolute right
to waive any defect or irregularity in any tender of Shares. None of
Purchaser, the Dealer Managers, the Depositary, the Information Agent or any
other person will be under any duty to give notification of any defect or
irregularity in tenders or incur any liability for failure to give any such
notification.
4. Withdrawal Rights. Tenders of Shares made pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date. Thereafter, such
tenders are irrevocable, except that they may be withdrawn after July 2, 1995
unless theretofore accepted for payment as provided in this Offer to Purchase.
If Purchaser extends the period of time during which the Offer is open, is
delayed in accepting for payment or paying for Shares or is unable to accept
for payment or pay for Shares pursuant to the Offer for any reason, then,
without prejudice to Purchaser's rights under the Offer, subject to the
applicable laws under the Exchange Act, the Depositary may, on behalf of
Purchaser, retain all Shares tendered, and such Shares may not be withdrawn
except as otherwise provided in this Section 4.
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 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 Offer. However, withdrawn Shares may be retendered again
by following one of the procedures described in Section 3 at any time prior to
the Expiration Date.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by Purchaser, in its sole
discretion, which determination shall be final and binding. None of the
Purchaser, the Dealer Managers, the Depositary, the Information Agent or any
other person will be under any duty to give notification of any defect or
irregularity in any notice of withdrawal or incur any liability for failure to
give any such notification.
5. Certain Tax Considerations. Sales of Shares by shareholders of the
Company pursuant to the Offer will be taxable transactions for federal income
tax purposes and may also be taxable transactions under applicable state and
local and other tax laws.
In general, a shareholder will recognize gain or loss equal to the
difference between the tax basis of his or her Shares and the amount of cash
received in exchange therefor. Such gain or loss will be a capital gain or
loss if the Shares are capital assets in the hands of the shareholder and will
be a long-term gain or loss if the holding period for the Shares is more than
one year as of the date of the sale of such Shares.
The foregoing discussion may not apply to shareholders who acquired
their Shares pursuant to the exercise of stock options or other compensation
arrangements with the Company or who are not citizens or residents of the
United States or who are otherwise subject to special tax treatment under the
Internal Revenue Code of 1986, as amended (the "Code").
To the extent that the Company or any of its subsidiaries own or lease
real property in New York State, New York City or other jurisdictions that
impose real property transfer or gains taxes, the New York State Real Property
Transfer Gains Tax, the New York State Real Estate Transfer Tax, the New York
City Real Property Transfer Tax or other real property transfer or gains taxes
may apply to the sale or exchange of Shares by a shareholder pursuant to the
Offer and/or the Merger. Although Purchaser has agreed to pay any such taxes
on behalf of the shareholders, such payment may be treated as additional
consideration paid to each shareholder in proportion to the number of Shares
sold by such shareholder. In such case, the amount of such additional
consideration generally would be offset by treatment of the tax as additional
selling expenses incurred by the shareholder. Accordingly, the payment of
such taxes by Purchaser should have no effect on the amount of gain or loss
recognized by a shareholder.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION
ONLY AND IS BASED UPON PRESENT LAW. DUE TO THE INDIVIDUAL NATURE OF TAX
CONSEQUENCES, SHAREHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS AS TO THE
SPECIFIC TAX CONSEQUENCES TO THEM OF THE OFFER, INCLUDING THE EFFECTS OF
APPLICABLE STATE, LOCAL OR OTHER TAX LAWS.
6. Price Range of Shares; Dividends. The Shares are listed and
principally traded on the NYSE. The following table sets forth for the
periods indicated the high and low sales prices per Share on the NYSE
Composite Tape and the cash dividends paid per Share, as reported in the
Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1994
(the "Company 10-K") with respect to the period from January 1, 1993 to June
30, 1994 and thereafter as reported in published financial sources:
High Low Dividends
1993: First Quarter....................... $ 14-3/4 $ 11-3/4 $ .06
Second Quarter...................... 17-7/8 13-1/4 .06
Third Quarter....................... 17-3/8 13-1/2 .07
Fourth Quarter...................... 16-3/4 13-3/4 .07
1994: First Quarter....................... 18-7/8 15 .07
Second Quarter...................... 19-3/4 14-7/8 .07
Third Quarter....................... 17-5/8 14 .07
Fourth Quarter...................... 15-5/8 12-5/8 .07
1995: First Quarter....................... 16-1/4 13 .07
Second Quarter (through May 3, 1995) 18 15-1/2
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 Composite Tape
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 approximately $18.10 per
Share in cash, the reported closing sales price per Share on the NYSE
Composite Tape was $16-7/8. On May 3, 1995, the last full day of trading
prior to the commencement of the Offer, the reported closing sales price per
Share on the NYSE Composite Tape was $17-7/8.
SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE
SHARES.
7. Certain Information Concerning the Company. The Company is a New
York corporation with its principal executive offices located at 200 Park
Avenue, New York, New York 10166.
According to the Company 10-K, the Company is principally engaged in
manufacturing architectural and special purpose paints and coatings. The
Company is also engaged in manufacturing certain household products.
The following selected consolidated financial data relating to the
Company and its subsidiaries has been taken or derived from the audited
financial statements contained in the Company 10-K and the unaudited
financial statements contained in the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended December 31, 1994 (the "Company 10-Q").
More comprehensive financial information is included in such 10-K and 10-Q
and the other documents filed by the Company with the Securities and
Exchange Commission (the "Commission"), and the financial data set forth
below is qualified in its entirety by reference to such reports and other
documents including the financial statements contained therein. Such
reports and other documents may be examined and copies may be obtained from
the offices of the Commission in the manner set forth below.
GROW GROUP, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(In thousands, except per share amounts)
6 Months Ended
Fiscal Year ended June 30, December 31,
-------------------------------- -----------------
1992 1993 1994 1993 1994
------- ------- ------- ------- -------
Income Statement Data: (unaudited)
Revenues from
continuing
operations....... $374,202 $365,464 $401,818 $197,386 $246,239
Costs and
expenses......... 359,951 347,394 377,583 187,016 236,900
Income from
continuing
operations
before income
taxes............ 14,251 18,070 24,235 10,370 9,339
Net income........ 9,132 12,472 14,056 6,015 5,417
Net income per
common and
common equivalent
share............ $0.78 $0.90 $0.87 $0.37 $0.34
Average shares.... 11,705,000 13,850,000 16,116,000 16,085,000 16,148,000
At June 30, At December 31,
------------------------------- -----------------
1992 1993 1994 1993 1994
------- ------- ------- ------- -------
Balance Sheet Data: (unaudited)
Current assets..... $174,410 $187,774 $187,393 $163,476 $170,257
Total assets....... 233,491 233,869 247,921 224,736 277,767
Current
liabilities....... 96,196 76,844 80,146 74,930 78,971
Working capital.... 78,214 110,930 107,247 88,546 91,286
Long-term debt..... 72,066 2,135 914 2,132 28,861
Shareholder's
equity............. 54,955 128,569 138,683 133,036 141,994
In addition, on May 1, 1995, the Company issued a press release
containing the following information concerning its interim results for the
quarter ending March 31, 1995:
GROW GROUP, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(In thousands, except per share amounts)
For the Nine Months ended For the Quarter ended
March 31, March 31,
------------------------- ------------------------
1995 1994 1995 1994
--------- -------- --------- --------
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).......... 16,150,000 16,100,000 16,144,000 16,155,000
________________
(a) Includes the results of operations of Sinclair Paint Company acquired
August 1, 1994.
The information concerning the Company contained herein has been taken
from or is based upon reports and other documents on file with the
Commission or otherwise publicly available. Although Purchaser does not
have any knowledge that would indicate that any statements contained herein
based upon such reports and documents are untrue, Purchaser does not take
any responsibility for the accuracy or completeness of the information
contained in such reports and other documents 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 that are unknown to
Purchaser.
The Company is subject to the informational requirements of the
Exchange Act and in accordance therewith files periodic reports, proxy
statements and other information with the Commission relating to its
business, financial condition and other matters. The Company is required
to disclose in such proxy statements certain information, as of particular
dates, concerning the Company's directors and officers, their remuneration,
stock options granted to them, the principal holders of the Company's
securities and any material interest of such persons in transactions with
the Company. Such reports, proxy statements and other information may be
inspected at the public reference facilities maintained by the Commission
at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and should
also be available for inspection and copying at the regional offices of the
Commission in New York (Seven World Trade Center, New York, New York 10048)
and Chicago (500 West Madison Street, Suite 1400, Chicago, Illinois 60611).
Copies of such material can also be obtained from the Public Reference
Section of the Commission in Washington, D.C. 20549, at prescribed rates.
Such material should also be available for inspection at the library of the
NYSE, 20 Broad Street, New York, New York 10005.
In the course of the discussions between representatives of Parent and
the Company (see Section 10) certain projections of future operating
performance dated February 2, 1995 were furnished to Parent's
representatives. Set forth below is a summary of such projections. The
projections should be read together with the financial statements of the
Company referred to herein.
GROW GROUP, INC.
PROJECTED FINANCIAL INFORMATION
(In thousands, except per share amounts)
Fiscal Year ending June 30,
----------------------------------
1995 1996 1997
-------- -------- --------
Revenues.............................. $ 532,912 $ 574,210 $ 609,603
Costs and expenses.................... 507,420 542,865 571,239
Income from operations before
income taxes.......................... 25,492 31,345 38,364
Net income............................ 14,785 18,180 22,251
Net income per common and common
equivalent share1..................... $ 0.92 $ 1.13 $ 1.38
________________
1 The earnings per share figures assume approximately 16,100,000 shares.
The foregoing projections were not prepared with a view to public
disclosure or compliance with published guidelines of the Commission or the
guidelines established by the American Institute of Certified Public
Accountants regarding projections, and are included in this Offer to
Purchase only because they were provided to Parent. Neither Parent,
Purchaser nor the Company, nor either of their financial advisors nor the
Dealer Managers assumes any responsibility for the accuracy of these
projections. While presented with numerical specificity, these projections
are based upon a variety of assumptions relating to the businesses of the
Company which may not be realized and are subject to significant
uncertainties and contingencies, many of which are beyond the control of
the Company. There can be no assurance that the projections will be
realized, and actual results may vary materially from those shown.
According to the Company, the primary assumptions used to prepare the
foregoing projections were as follows. For the fiscal year ended June 30,
1995, the projections were based on the actual results for the six months
ended December 31, 1994 plus forecasts for the 6 months ended June 30,
1995. These forecasts assumed a $1.4 million shortfall from budgeted
income from operations before income taxes in the second half year,
principally in the Devoe Coatings unit and the Household and Professional
Division. An effective tax rate of 42% was assumed for the year.
For the fiscal years ended June 30, 1996 and 1997, the projections
assumed revenue growth of 8% in 1996 (which included a full year's
contribution from Sinclair Paint Company, a subsidiary of the Company) and
6% in 1997. Gross margin was forecast to increase slightly and expenses
were generally assumed to vary with sales, other than selling and
administrative costs which were generally forecast to grow at 5% per annum.
A corporate contingency of approximately $5 million was included in each
year and an effective tax rate of 42% was assumed.
In discussions with representatives of Parent in April 1995,
subsequent to the delivery of the foregoing projections, representatives of
the Company indicated that, in light of the declining performance of the
Company in the quarter ended March 31, 1995, the Company had revised
downward its estimated results for the fiscal year ending June 30, 1995.
In particular, the Company indicated that the Company's income from
continuing operations before income taxes for fiscal 1995, previously
projected to total approximately $25.5 million, was forecast to be
approximately $21.8 million. The Company provided the Parent with certain
revised projections on May 3, 1995. Such revised projections are set forth
in the Schedule 14D-9 filed by the Company.
8. Certain Information Concerning Purchaser and Parent. Purchaser is
a New York corporation incorporated on April 28, 1995 and to date has
engaged in no activities other than those incident to its formation, the
execution and delivery of the Merger Agreement, the Option Agreement and
the Assignment Agreement and the commencement of the Offer. Purchaser is
an indirect wholly owned subsidiary of Parent. Purchaser is wholly owned
by ICI American Holdings Inc., a Delaware company ("ICI American"), which
is wholly owned by Mortar Investments International Limited, a company
organized under the laws of England, which is wholly owned by Mortar
Investments UK Limited, a company organized under the laws of England,
which in turn is wholly owned by Parent. The principal executive offices
of Purchaser are located at c/o ICI American Holdings Inc., 3411 Silverside
Road, P.O. Box 15391, Wilmington, DE 19850.
Parent is a company organized under the laws of England. Parent and
its subsidiaries form one of the major chemical companies in the world
comprising five international groups of businesses -- paints, materials,
explosives, industrial chemicals and regional businesses. The principal
executive offices of Parent are located at Imperial Chemical House,
Millbank, London SW1P 3JF, England. The Ordinary Shares of Pound Sterling
1 each of Parent are traded on The International Stock Exchange of the
United Kingdom and Republic of Ireland Limited (the "London Stock
Exchange"). American Depositary Shares, each representing four Ordinary
Shares of Parent, are listed on the NYSE. The name, business address,
principal occupation or employment, five year employment history and
citizenship of each director and executive officer of Parent and Purchaser
and certain other information are set forth on Schedule I hereto. Schedule
II hereto contains certain additional information about Parent and
Purchaser required by New York State law.
Except as described in this Offer to Purchase, (i) neither Parent nor
Purchaser nor, to the best knowledge of Purchaser, any of the persons
listed in Schedule I to this Offer to Purchase or any associate or majority
owned subsidiary of Parent or any of the persons so listed beneficially
owns, or has any right to acquire, directly or indirectly, any Shares and
(ii) neither Parent nor Purchaser nor, to the best knowledge of Purchaser,
any of the persons or entities referred to above nor any director,
executive officer or subsidiary of any of the foregoing has effected any
transaction in the Shares during the past 60 days.
Except as provided in the Merger Agreement, Option Agreement,
Assignment Agreement or the Non-Disclosure Agreement (as defined below) or
as otherwise described in this Offer to Purchase, neither Parent nor
Purchaser nor, to the best knowledge of Purchaser, any of the persons
listed in Schedule I to this Offer to Purchase, has any contract,
arrangement, understanding or relationship with any other person with
respect to any securities of the Company, including, but not limited to,
any contract, arrangement, understanding or relationship concerning the
transfer or voting of such securities, finder's fees, joint ventures, loan
or option arrangements, puts or calls, guarantees of loans, guarantees of
profits, division of profits or loss or the giving or withholding of
proxies. Except as set forth in this Offer to Purchase, since July 1,
1991, neither Parent, Purchaser nor, to the best knowledge of Purchaser,
any of the persons listed in Schedule I hereto, has had any business
relationship or transaction with the Company or any of its executive
officers, directors, or affiliates that is required to be reported under
the rules and regulations of the Commission applicable to the Offer.
Except as set forth in this Offer to Purchase, since July 1, 1991, there
have been no contracts, negotiations or transactions between Parent, or any
of its subsidiaries or, to the best knowledge of Parent and Purchaser, any
of the persons listed in Schedule I to this Offer to Purchase, on the one
hand, and the Company or its affiliates, on the other hand, concerning a
merger, consolidation or acquisition, tender offer or other acquisition of
securities, an election of directors or a sale or other transfer of a
material amount of assets.
The following selected consolidated financial data relating to Parent
and its subsidiaries has been taken or derived from the audited financial
statements contained in Parent's Annual Report on Form 20-F for the year
ended December 31, 1994. More comprehensive financial information is
included in such Annual Report and the other documents filed by Parent with
the Commission, and the financial data set forth below is qualified in its
entirety by reference to such reports and other documents including the
financial statements contained therein. Such reports and other documents
may be examined and copies may be obtained from the offices of the
Commission in the same manner as set forth with respect to the Company in
Section 7.
IMPERIAL CHEMICAL INDUSTRIES PLC
SELECTED CONSOLIDATED FINANCIAL DATA
(In millions, except per share amounts)
Year ended December 31,
----------------------------------------
Income Statement Data: 1992 1993 1994
-------- ------- -------
Continuing operations Pound Pound Pound
Sales................. Sterling 7,557 Sterling 8,430 Sterling 9,189
Net income (loss)
from continuing
operations........... (621) 25 188
Discontinued operations
Net income from
discontinued
operations.......... 51 104
Pound Pound Pound
Net income (loss)...... Sterling (570) Sterling 129 Sterling 188
Average Ordinary Shares
in issue.............. 713 719 723
Net earnings per
Ordinary Share
outstanding........... (79.9)p 17.9p 26.0p
At December 31,
----------------------------------------------
Balance Sheet Data: 1992 1993 1994
-------- -------- ---------
Pound Pound Pound
Current assets...... Sterling 6,033 Sterling 4,747 Sterling 4,972
Total assets........ 12,122 9,229 9,004
Current liabilities. 4,377 2,452 2,608
Working capital..... 1,656 2,295 2,364
Long-term debt...... 1,984 1,717 1,522
Shareholders' equity 4,286 3,888 3,736
The data contained in the selected consolidated financial data
presented above was prepared in accordance with United Kingdom Generally
Accepted Accounting Principles ("UK GAAP"). The main differences between
UK GAAP and United States Generally Accepted Accounting Principles ("US
GAAP") which affect Parent's net income and shareholders' equity are
described below.
Accounting for pension costs. There are four main differences between
UK GAAP and US GAAP in accounting for pension costs:
i) US GAAP requires that plan assets be valued by reference to their
fair or market related values, whereas UK GAAP permits an alternative
measurement of assets, which, in the case of the main UK retirement plans,
is on the basis of the discounted present value of expected future income.
ii) US GAAP requires measurements of plan assets and obligations to
be made as at the date of the financial statements or a date not more than
three months prior to that date. Under UK GAAP, calculations may be based
on the results of the latest actuarial valuation.
iii) US GAAP mandates a particular actuarial method, the projected
unit credit method, and requires that each significant assumption necessary
to determine annual pension cost reflects best estimates solely with regard
to that individual assumption. UK GAAP does not mandate a particular
method, but requires that the method and assumptions, taken as a whole,
should be compatible and lead to the actuary's best estimate of the cost of
providing the benefits promised.
iv) Under US GAAP, a negative pension cost may arise where a
significant unrecognized net asset or gain exists at the time of
implementation. This is required to be amortized on a straight-line basis
over the average remaining service period of employees. Under UK GAAP,
Parent's policy is not to recognize pension credits in its financial
statement unless a refund of, or reduction in, contributions is likely.
Purchase accounting adjustments. In Parent's financial statements,
goodwill arising on acquisitions accounted for under the purchase method
has been eliminated against retained earnings. Values are not placed on
intangible assets. Additionally, UK GAAP requires that on subsequent
disposal or closure of a previously acquired asset, any goodwill previously
taken directly to shareholders' equity is then charged in the income
statement against the profit or loss on disposal or closure. Under US GAAP
goodwill would be capitalized in the balance sheet and amortized through
the income statement over its estimated life not exceeding 40 years. Also,
under US GAAP, it is normal practice to ascribe fair values to identifiable
intangibles. For the purpose of the adjustments to US GAAP, included
below, identifiable intangible assets are amortized to income over the
lower of their estimated lives or 40 years. Provision is made where there
is a permanent impairment to the carrying value of capitalized goodwill and
intangible assets.
Capitalization of interest. There is no accounting standard in the
United Kingdom regarding the capitalization of interest and Parent does not
capitalize interest in its financial statements. US GAAP requires interest
incurred as part of the cost of constructing fixed assets to be capitalized
and amortized over the life of the asset.
Restructuring costs. US GAAP requires a number of specific criteria
to be met before restructuring costs can be recognized as an expense.
Among these criteria is the requirement that all the significant actions
arising from the restructuring plan and their completion dates must be
identified by the balance sheet date. Under UK GAAP, when a decision has
been taken to restructure, the necessary provisions are made for impairment
of asset values together with severance and other costs.
Foreign exchange. Under UK GAAP, foreign currency differences arising
on relevant foreign currency loans are taken to reserves and offset against
differences arising on net investments. US GAAP is more restrictive in
that currency loans may only hedge net investments in the same currency.
If currency loans exceed net investment in any particular currency then the
exchange differences arising are included in the income statement.
Deferred taxation. Deferred taxation is provided on a full provision
basis under US GAAP; under UK GAAP no provision is made for taxation
deferred by reliefs unless there is reasonable evidence that such deferred
taxation will be payable in the foreseeable future.
The following is a summary of the material adjustments to net income
and shareholders' equity which would have been required if US GAAP had been
applied instead of UK GAAP.
IMPERIAL CHEMICAL INDUSTRIES PLC
SELECTED CONSOLIDATED FINANCIAL DATA
(In millions, except per share amounts)
At December 31,
-------------------------------------------------
1992 1993 1994
----------- ----------- -----------
Total net income Pound Pound Pound
(loss) -- UK GAAP.... Sterling (570) Sterling 129 Sterling 188
Total US GAAP
adjustments.......... 101 (40) (132)
Total net income Pound Pound Pound
(loss) -- US GAAP.... Sterling (469) Sterling 89 Sterling 56
Net earnings per
Ordinary Share --
US GAAP.............. (65.8)p 12.4p 7.8p
At December 31,
-------------------------------------------------
1992 1993 1994
----------- ----------- -----------
Shareholders'
equity -- UK Pound Pound Pound
GAAP........ Sterling 4,286 Sterling 3,888 Sterling 3,736
Total US GAAP
adjustments.... 1,061 432 389
Shareholders'
equity -- Pound Pound Pound
US GAAP........ Sterling 5,347 Sterling 4,320 Sterling 4,125
9. Source and Amount of Funds. The total amount of funds required by
Purchaser to purchase Shares pursuant to the Offer and the Option Agreement
and to pay related fees and expenses is estimated to be approximately $295
million. Purchaser will obtain such funds through a capital contribution
from ICI American, its parent company. ICI American will obtain such funds
from its general corporate funds.
10. Background of the Offer; Past Contacts, Transactions or
Negotiations with the Company; Merger Agreement; Certain Agreements.
On November 4, 1994, Mr. Russell Banks, the Chief Executive Officer and
President of the Company, met with Mr. John Dewhurst, the General Manager
of Planning and Acquisitions of Parent, in London to discuss whether Parent
had an interest in considering an acquisition of the Company. On November
22, 1994, Mr. John Thompson, the Chief Planner of the paints division of
Parent, met with Mr. Banks in New York to discuss in greater detail
Parent's potential interest in acquiring some or all of the businesses of
the Company.
On December 1, 1994, Parent and the Company entered into a
Non-Disclosure Agreement (the "Non-Disclosure Agreement") and the Company
provided Parent with the Confidential Information Memorandum prepared by
the Company. In December 1994, Mr. Thompson met twice with
representatives of the Company to discuss a possible spin-off of the
Company's consumer and professional products division, which had been under
examination by the Company for some time, and its impact on the timing of a
possible acquisition by Parent of the Company's remaining businesses.
On January 16, 1995, Parent advised the Company that its preliminary
valuation of the coatings and chemicals group of the Company was in the
range of $250-275 million. On January 19, 1995, Mr. Thompson and Mr.
Herman Scopes, the Chief Executive Officer of the paints division of Parent
met with Mr. Banks to discuss various possibilities of structuring an
acquisition of the Company in whole or in part.
During the period between February 7 and February 10, 1995,
representatives of Parent conducted an initial business and legal due
diligence investigation of the Company at the offices of Wertheim Schroder
in New York. Subsequently, Parent concluded that a partial acquisition of
the Company was not a practical alternative and decided to proceed with its
consideration of a possible acquisition of the entire Company.
By letter dated February 22, 1995 to Mr. Banks, Parent indicated that
its non-binding valuation for the acquisition of the Company through a cash
offer for all the outstanding shares of Common Stock of the Company was
$17.50 per share. In response, Mr. Banks orally advised Parent that he
believed Parent's valuation was inadequate.
On March 6, 1995, Mr. Thompson met with Mr. Arthur Broslat, Executive
Vice President of Corimon Parent and a member of the Board of Directors of
the Company, in Miami, to establish whether Corimon Parent would be willing
to sell the Corimon Shares to Parent in the event of a bid from Parent to
acquire the Company. Mr. Broslat confirmed such willingness, subject to a
satisfactory offer.
On March 8 and March 21, 1995, Mr. Scopes met with Mr. Banks in New
York. On April 3, 1995, Mr. Banks met with Mr. Scopes and Sir Ronald
Hampel, then-Deputy Chairman, Chief Executive and Chairman of the
Board-designate of Parent, in London. During these discussions, Mr. Banks
agreed that Parent could continue its due diligence investigation of the
Company, including visits to the Company's manufacturing facilities, to
further its analysis of the Company's value. During the period between
April 10 and April 19, 1995, representatives of Parent conducted additional
business and legal due diligence investigation of the Company.
On April 13, 1995, during the due diligence investigation, Mr. Thompson
and Mr. John Danzeisen, President of The Glidden Company, a subsidiary of
Parent, met with Mr. Banks in New York. Mr. Banks described the
Company's preliminary estimate of results for the third fiscal quarter
ending March 31, 1995, and revised estimates for the full fiscal year. It
was apparent that there had been a decline in the Company's operating
results. On April 21, 1995, Mr. Thompson and Mr. Danzeisen met with Mr.
Banks, discussed the results of Parent's additional due diligence and
expressed concern regarding the Company's declining performance in the
third fiscal quarter.
On April 24, 1995, counsel for Parent provided the Company and its
counsel with a draft merger agreement. On April 26, 1995, the Board of
Directors of Parent met to discuss the terms of Parent's proposed
acquisition of the Company. The Board approved the acquisition and
authorized further negotiation of the terms of the transaction. Subsequent
to Parent's Board meeting, Messrs. Scopes, Thompson and Danzeisen met in
New York with Mr. Broslat and Mr. Philippe Erard, President of Corimon
Parent and a member of the Company's Board of Directors, to discuss a
proposal by which Corimon Parent would agree to sell the Corimon Shares to
Parent at a price of $17.50 per Share, such sale to be consummated
immediately following the consummation of a tender offer for all the other
Shares, provided that the Board of Directors of the Company waive certain
provisions of a certain standstill agreement between the Company and
Corimon Parent in order to permit such sale.
On April 27, 1995, prior to the regular meeting of the Board of
Directors of the Company, Mr. Thompson informed Mr. Banks that Parent was
prepared to offer $18.10 per Share for all outstanding Shares other than
the Corimon Shares. Subsequent to the meeting of the Company's Board of
Directors, Mr. Banks informed Mr. Thompson that the Company was willing
to enter into negotiations regarding a definitive merger agreement on the
terms proposed. During the period between April 28 and April 30, 1995,
representatives of and legal and financial advisors to the Company, Parent
and Corimon Parent, respectively, met at the offices of counsel to Parent,
to negotiate the terms of the Merger Agreement and the Option Agreement.
On the afternoon of April 28, 1995, the Company, in response to increased
volume of trading of the Shares, issued a press release announcing that it
had entered into negotiations with an undisclosed third party concerning a
possible acquisition of the Company at a purchase price of $18.10 per
Share, subject to approval of the Board of Directors of the Company and
negotiation and execution of definitive agreements.
On April 29, 1995, the Company advised Parent that the Board of
Directors of the Company had received a letter from Sherwin-Williams Co.
expressing an interest in acquiring the Company. Representatives of the
Company inquired of Mr. Thompson whether Parent intended to increase its
offer price. Mr. Thompson responded in the negative and stated that it
was Parent's expectation that its negotiations with the Company would be
completed prior to the opening of business on Monday, May 1, 1995.
On April 30, 1995, the Company advised Parent that the Company's
Board of Directors had unanimously approved the Offer, the Merger Agreement
and the Option Agreement. Shortly thereafter, the Merger Agreement and the
Option Agreement were executed by the parties thereto. The transaction was
publicly announced before the opening of NYSE trading on May 1, 1995.
Merger Agreement
The following is a summary of certain provisions of the Merger
Agreement, a copy of which is filed with the Commission as an Exhibit to
Purchaser's Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1")
and is incorporated herein by reference. Such summary is qualified in its
entirety by reference to the Merger Agreement.
The Offer. The Merger Agreement provides for the making of the Offer
by Parent. Pursuant to the Assignment Agreement, Purchaser has agreed to
make the Offer rather than Parent and references in this description of the
Merger Agreement have been revised accordingly. The obligation of
Purchaser to accept for payment and pay for Shares tendered pursuant to the
Offer is subject to the satisfaction of the Minimum Condition and certain
other conditions that are described in Section 15 hereof. Purchaser has
agreed that, without the written consent of the Company, no change in the
Offer may be made which changes the form of consideration to be paid or
decreases the price per Share or the number of Shares sought in the Offer
or which imposes conditions to the Offer in addition to the Minimum
Condition and those conditions described in Section 15. Purchaser has
agreed to extend the Offer at any time up to the Outside Termination Date
(as defined below) for one or more periods of not more than 10 business
days, if at the initial expiration date of the Offer, or any extension
thereof, the condition to the Offer requiring the expiration or termination
of any applicable waiting periods under the HSR Act and the Exon-Florio
Provision is not satisfied.
Recommendation. The Merger Agreement states that the Board of
Directors of the Company has (i) unanimously determined that the Merger
Agreement and the transactions contemplated thereby, including the Offer
and the Merger, are fair to and in the best interest of the Company's
shareholders, (ii) unanimously approved the Merger Agreement and the
transactions contemplated thereby, including the Offer and the Merger and
(iii) unanimously resolved to recommend acceptance of the Offer and
approval and adoption of the Merger Agreement and the Merger by the
Company's shareholders; provided that such recommendation may be withdrawn,
modified or amended if, in the opinion of the Board of Directors, after
consultation with independent legal counsel, such recommendation would be
inconsistent with its fiduciary duties to the Company's shareholders under
applicable law.
The Merger. The Merger Agreement provides that, following the
purchase of Shares pursuant to the Offer, if required by New York Law, the
approval of the Merger Agreement by the shareholders of the Company, and
the satisfaction or, to the extent permitted under the Merger Agreement,
waiver of the other conditions to the Merger, Purchaser will be merged with
and into the Company whereupon the separate existence of Purchaser shall
cease and the Company shall be the surviving corporation (the "Surviving
Corporation"). The Merger shall become effective at such time as a
certificate of merger is filed with the Department of State of the State of
New York, or at such later time as is specified in such certificate of
merger (the "Effective Time"). From and after the Effective Time, the
Surviving Corporation shall possess all the rights, privileges, powers and
franchises and be subject to all of the restrictions, disabilities,
liabilities and duties of the Company and Purchaser, all as provided under
New York Law.
At the Effective Time, (i) each Share held by the Company as treasury
stock or owned by Parent, Purchaser or any other subsidiary of Parent
immediately prior to the Effective Time shall be canceled, and no payment
shall be made with respect thereto; (ii) each share of common stock of
Purchaser outstanding immediately prior to the Effective Time shall be
converted into and become one share of common stock of the Surviving
Corporation with the same rights, powers and privileges as the shares so
converted and shall constitute the only outstanding shares of capital stock
of the Surviving Corporation; and (iii) each Share outstanding immediately
prior to the Effective Time shall, except for Shares held by any holder who
has not voted in favor of the Merger or consented thereto in writing and
who has demanded appraisal for such Shares in accordance with New York Law,
be converted into the right to receive $18.10 in cash or any higher price
paid for each Share pursuant to the Offer, without interest.
The Merger Agreement provides that the certificate of incorporation
and bylaws of Purchaser at the Effective Time will be the certificate of
incorporation and bylaws, respectively, of the Surviving Corporation until
amended in accordance with applicable law, except that the name of the
Surviving Corporation shall be Grow Group, Inc. The Merger Agreement also
provides that the directors of Purchaser at the Effective Time will be the
initial directors of the Surviving Corporation and the officers of
Purchaser at the Effective Time will be the initial officers of the
Surviving Corporation, in each case until their respective successors are
duly elected and appointed or qualified.
Immediately prior to the Effective Time of the Merger, each
outstanding employee stock option (an "Employee Option") to purchase Shares
granted under any employee stock option or compensation plan or arrangement
of the Company shall be canceled, and each holder of any such Employee
Option, whether or not then vested or exercisable, shall be paid by the
Company at the Effective Time for each such Employee Option an amount
determined by multiplying (i) the excess, if any, of $18.10 per Share over
the applicable exercise price of such Option by (ii) the number of Shares
such holder could have purchased (assuming full vesting of all Employee
Options) had such holder exercised such Employee Option in full immediately
prior to the Effective Time. Prior to the Effective Time, the Company
shall (i) use its best efforts to obtain any consents from holders of
Employee Options and (ii) make any amendments to the terms of such stock
option or compensation plans or arrangements, to the extent such consents
or amendments are necessary to give effect to the transactions described in
this paragraph. Notwithstanding any other provision described in this
paragraph, payment may be withheld in respect of any Employee Option until
necessary consents are obtained.
Agreements of Parent, Purchaser and the Company. The Merger
Agreement provides that effective upon the acceptance for payment by Parent
of any Shares, Parent will be entitled to designate the number of
directors, rounded up to the next whole number, on the Company's Board of
Directors that equals the product of (i) the total number of directors on
the Board of Directors (giving effect to the election of any additional
directors pursuant to this paragraph) and (ii) the percentage that the
number of shares owned by Parent (including Shares accepted for payment
and, assuming the number of Shares owned by Parent or accepted for payment
constitute at least a majority of the outstanding Shares on a fully diluted
basis, the Corimon Shares) bears to the total number of Shares outstanding,
and the Company will take all action necessary to cause Parent's designees
to be elected or appointed to the Board of Directors, including, without
limitation, increasing the number of directors, and seeking and accepting
resignations of its incumbent directors. At such times, the Company will
use its best efforts to cause individuals designated by Parent to
constitute the same percentage as such individuals represent on the
Company's Board of Directors of (x) each committee of the Board (other than
any committee of the Board established to take action under the Merger
Agreement), (y) each board of directors of each Subsidiary (as defined in
the Merger Agreement) and (z) each committee of each such board.
Notwithstanding the foregoing, until the Effective Time the Company shall
retain as members of its Board of Directors at least two directors who are
directors of the Company on the date of the Merger Agreement.
From and after the time, if any, that Parent's designees constitute a
majority of the Company's Board of Directors, any amendment of the Merger
Agreement, any termination of the Merger Agreement by the Company, any
extension of time for performance of any of the obligations of Parent or
Purchaser under the Merger Agreement, any waiver of any condition to the
obligations of the Company or any of the Company's rights under the Merger
Agreement or other action by the Company under the Merger Agreement may be
effected only by the action of a majority of the directors of the Company
then in office who were directors of the Company on the date of the Merger
Agreement, which action shall be deemed to constitute the action of the
full Board of Directors; provided that if there shall be no such directors,
such actions may be effected by majority vote of the entire Board of
Directors of the Company.
If Parent exercises its right to designate directors, Parent
currently intends to designate one or more of the following persons to
serve as directors of the Company: John K. Thompson, John R. Danzeisen,
Stanley A. Lockitski, Norman Schueftan, William J. Thornton and Thomas C.
Osborne (the "ICI Designees"). For certain information regarding the ICI
Designees, see Schedule I. The foregoing information and certain other
information contained in this Offer to Purchase and Schedule I hereto and
in the Schedule 14D-9 being mailed to shareholders herewith are being
provided in accordance with the requirements of Section 14(f) of the
Exchange Act and Rule 14f-1 thereunder.
The Company has agreed to cause a meeting of its shareholders (the
"Company Shareholder Meeting") to be duly called and held as soon as
reasonably practicable for the purposes of voting on the approval and
adoption of the Merger Agreement and the Merger unless a vote of
shareholders of the Company is not required by New York Law. The Merger
Agreement provides that in connection with such meeting, the Company will
promptly, after the consummation of the Offer, prepare and file with the
Commission under the Exchange Act a proxy statement relating to the Company
Shareholder Meeting. The Company has agreed to use its best efforts to
obtain the necessary approvals by its shareholders of the Merger Agreement
and the transactions contemplated thereby. Parent has agreed to vote all
Shares beneficially owned by it or by its subsidiaries in favor of adoption
of the Merger Agreement at the Company Shareholder Meeting.
Pursuant to the Merger Agreement, the Company has agreed that, during
the period from the date of the Merger Agreement to the Effective Time, the
Company and its Subsidiaries shall conduct their business in the ordinary
course consistent with past practice and shall use their best efforts to
preserve intact their business organizations and relationships with third
parties and to keep available the services of their present officers and
employees. Pursuant to the Merger Agreement, without limiting the
generality of the foregoing, from the date of the Merger Agreement until
the Effective Time: (a) the Company will not adopt or propose any change
in its certificate of incorporation or bylaws; (b) except for the Merger,
the Company will not, and will not permit any Subsidiary to, merge or
consolidate with any other Person (as defined below) or acquire a material
amount of assets of any other Person; (c) the Company will not, and will
not permit any Subsidiary to, sell, lease, license or otherwise dispose of
any material assets or property except (i) pursuant to existing contracts
or commitments and (ii) inventory in the ordinary course consistent with
past practice; (d) the Company will not, and will not permit any
Subsidiary to, agree or commit to do any of the foregoing; and (e) the
Company will not, and will not permit any Subsidiary to, willfully and
knowingly (i) take or agree or commit to take any action that would make
any representation and warranty of the Company under the Merger Agreement
inaccurate in any respect at, or as of any time prior to, the Effective
Time or (ii) omit, or agree or commit to omit, to take any action necessary
to prevent any such representation or warranty from being inaccurate in any
material respect at any such time.
For the purposes of the Merger Agreement, "Person" means an
individual, a corporation, limited liability company, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or any agency or instrumentality
thereof.
The Company has agreed that from the date of the Merger Agreement
until the termination of the Merger Agreement, the Company, its
Subsidiaries and their respective officers, directors, employees, or other
agents will not, directly or indirectly, (i) take any action to solicit,
initiate or encourage any Acquisition Proposal (as defined below) or (ii)
subject to the fiduciary duties of the Board of Directors under applicable
law as advised by counsel, engage in negotiations with, or disclose any
nonpublic information relating to the Company or any Subsidiary or afford
access to the properties, books or records of the Company or any Subsidiary
to, any Person that may be considering making, or has made, an Acquisition
Proposal. The Company will promptly notify Parent after receipt of any
Acquisition Proposal or any indication that any Person is considering
making an Acquisition Proposal or any request for nonpublic information
relating to the Company or any Subsidiary or for access to the properties,
books, or records of the Company or any Subsidiary by any Person that may
be considering making, or has made, an Acquisition Proposal and will keep
Parent fully informed of the status and details of any such Acquisition
Proposal, indication or request. For purposes of the Merger Agreement,
"Acquisition Proposal" means any offer or proposal for, or any indication
of interest in, a merger or other business combination involving the
Company or any Subsidiary or the acquisition of any equity interest in, or
a substantial portion of the assets of, the Company or any Subsidiary,
other than the transactions contemplated by the Merger Agreement.
For six years after the Effective Time, Parent will, and will cause
the Surviving Corporation to, (i) indemnify and hold harmless the present
and former officers, directors, employees and agents of the Company in
respect of acts or omissions occurring prior to the Effective Time
(including, without limitation, in respect of acts or omissions in
connection with the Merger Agreement and the transactions contemplated
thereby) and (ii) advance to such Person's expenses incurred in defending
any action or suit with respect to such matters, in each case to the extent
such Persons are entitled to indemnification or advancement of expenses
under the Company's or any Subsidiary's certificate of incorporation and
bylaws in effect on the date of the Merger Agreement and subject to the
terms of such certificates of incorporation and bylaws. In the event any
claim or claims are asserted or made within such six year period, all
rights to indemnification in respect of any such claim or claims shall
continue until disposition of any and all such claims. Parent and the
Company agreed that all rights to indemnification and all limitations on
liability existing in favor of any such officer, director, employee or
agent as provided in the Company's certificate of incorporation and by-laws
as in effect as of the date of the Merger Agreement and subject to the
terms of such certificates of incorporation and bylaws shall survive the
Merger and shall continue in full force and effect. Any determination
required to be made with respect to whether any of the foregoing Persons is
entitled to indemnification as set forth above shall be made by independent
legal counsel selected mutually by such Person and Parent. For six years
after the Effective Time, Parent will cause the Surviving Corporation to
use its best efforts to provide officers' and directors' liability
insurance in respect of acts or omissions occurring prior to the Effective
Time covering each such Person currently covered by the Company's officers'
and directors' liability insurance policy on terms with respect to coverage
and amount no less favorable than those of such policy in effect on the
date of the Merger Agreement; provided that in satisfying its obligation
described in this paragraph, Parent shall not be obligated to cause the
Surviving Corporation to pay premiums in excess of $400,000 per annum;
provided further that if the premiums would exceed $400,000 in a given
year, the Surviving Corporation shall use its best efforts to purchase
coverage that in the opinion of the Surviving Corporation is the best
available for $400,000 per year. Parent will cause the Surviving
Corporation to continue to indemnify in accordance with the Company's past
practices certain of the Company's employees in respect of certain
litigation to which such employees are a party.
Between the date of the Merger Agreement and the Effective Time, the
Company will give Parent, its counsel, financial advisors, auditors and
other authorized representatives reasonable access during normal business
hours to the offices, properties, books and records of the Company and its
Subsidiaries, and will furnish to Parent, its counsel, financial advisors,
auditors and other authorized representatives such financial and operating
data and other information as such Persons may reasonably request and will
instruct the Company's employees, counsel and financial advisors to
cooperate with Parent in its investigation of the business of the Company
and its Subsidiaries; provided that no such investigation will affect any
representation or warranty given by the Company to Parent under the Merger
Agreement and any information received by Parent or its representatives
shall remain subject to the Non-Disclosure Agreement.
Subject to the terms and conditions of the Merger Agreement, each of
Parent, Purchaser and the Company will use its best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by the Agreement; provided that
Parent and its affiliates shall not be required to agree to any consent
decree or order in connection with any objections of the Department of
Justice or Federal Trade Commission (each an "HSR Authority") to the
transactions contemplated by the Merger Agreement or in connection with any
objections of any governmental authority in respect of the Exon-Florio
Provision to the transactions contemplated by the Merger Agreement.
Pursuant to the Merger Agreement, Parent will take all action
necessary to cause Purchaser to perform its obligations under the Merger
Agreement and to consummate the Merger on the terms and conditions set
forth therein.
Representations and Warranties. The Merger Agreement contains
various customary representations and warranties of the parties, including
representations by the Company with respect to its corporate existence and
power, corporate authorizations, governmental authorizations, non-
contravention, capitalization, Subsidiaries, investments, Commission
filings, financial statements, disclosure documents, absence of certain
changes, absence of undisclosed liabilities, litigation, taxes, employee
matters, labor matters, compliance with laws, finders' fees, environmental
matters, property, trademarks and contracts.
Conditions to the Merger. The obligations of the Company, Parent and
Purchaser to consummate the Merger are subject to the satisfaction of
certain conditions, including: (i) if required by New York Law, the Merger
Agreement shall have been adopted by the shareholders of the Company in
accordance with such Law; (ii) any applicable waiting period under the HSR
Act relating to the Merger shall have expired; (iii) no provision of any
applicable law or regulation and no judgment, injunction, order or decree
shall prohibit the consummation of the Merger; (iv) Parent shall have
purchased Shares pursuant to the Offer; (v) any applicable waiting period
under the Exon-Florio Provision relating to the Merger shall have expired;
and (vi) Parent shall have received or be reasonably satisfied that it
will receive all consents and approvals contemplated under the Merger
Agreement or other material consents necessary in connection with the
consummation of the Merger or to enable the Surviving Corporation to
continue to carry on the business of the Company and the Subsidiaries as
presently conducted in all material respects.
Amendment of Rights Agreement. Under the Merger Agreement, the
Company has agreed that promptly after the date of the Merger Agreement,
and in any event within five days of the Merger Agreement, it will amend,
to the extent necessary, the Rights Agreement, to permit the commencement
and closing of the Offer and the consummation of the Merger without any
such event or the passage of time resulting in the occurrence of the
Distribution Date (as defined in the Rights Agreement as hereinafter
described), and upon the written request of Parent, will redeem, in
accordance with the terms of the Rights Agreement, all outstanding Rights
at a redemption price of $.01 per Right. Except as set forth in the Merger
Agreement, the Company shall not redeem the Rights other than in connection
with a merger, consolidation, business combination, acquisition of Shares
or sale of assets or similar transaction that a majority of the Board of
Directors of the Company (excluding directors who are designees of the
Parent or who are employees of the Company) determines in the exercise of
its fiduciary responsibilities is more favorable to the Company's
shareholders than the transactions contemplated by the Merger Agreement.
Termination. The Merger Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time (notwithstanding
any approval of the Merger Agreement by the shareholders of the Company):
(a) by mutual written consent of the Company and Parent; (b) by either the
Company or Parent if the Offer has not been consummated by August 31, 1995
(as such date may be extended pursuant to the proviso to this sentence, the
"Outside Termination Date"); provided that if an HSR Authority shall have
requested additional information from any of the parties hereto or any of
their affiliates pursuant to the U.S. antitrust laws on or prior to August
31, 1995, Parent may elect to change the Outside Termination Date to a date
not later than October 31, 1995 if the Merger Agreement has not been
terminated by the Company pursuant to the terms thereof prior to the date
of such election; provided, however, that the right to terminate the Merger
Agreement as described in this paragraph shall not be available to any
party whose failure to fulfill any obligation under the Merger Agreement
has been the cause of, or resulted in, the failure to meet the date
requirements described hereunder; (c) by either the Company or Parent, if
there shall be any law or regulation that makes consummation of the Merger
illegal or if any judgment, injunction, order or decree enjoining Parent or
the Company from consummating the Merger is entered and such judgment,
injunction, order or decree shall become final and nonappealable; (d) by
Parent, upon the occurrence of any of the following events: (i) the
Company shall have entered into or shall have publicly announced its
intention to enter into, an agreement or an agreement in principle with
respect to any Acquisition Proposal other than the transactions
contemplated by the Merger Agreement; (ii) the Board of Directors shall
have withdrawn or materially modified its approval or recommendation of the
Offer or the Merger Agreement other than as a result of Parent's breach of
the Merger Agreement; or (iii) any person or group (as defined in Section
13(d)(3) of the Exchange Act) (other than Parent or any of its affiliates)
shall have become the beneficial owner (as defined in Rule 13d-3
promulgated under the Exchange Act) of at least 25% of any class or series
of capital stock of the Company (including the Shares), or shall have
acquired, directly or indirectly, at least 25% of the assets of the Company
other than acquisitions of securities for bona fide arbitrage purposes only
and other than Corimon Parent or its affiliates; or Corimon Parent and its
affiliates shall beneficially own more than 28% of the Shares; (e) by the
Company, upon the occurrence of the event described in clause (d)(i) or
(ii) above; (f) by the Company if Parent or Purchaser breaches or fails in
any material respect to perform or comply with any of its material
covenants and agreements contained in the Merger Agreement or breaches its
representations and warranties in any material respect; or (g) by Parent,
if Parent has received any communication from any HSR Authority (which
communication shall be confirmed to the other parties by the HSR Authority)
that causes such party to reasonably believe that any HSR Authority has
authorized the institution of litigation challenging the transactions
contemplated by the Merger Agreement under the U.S. antitrust laws, which
litigation will include a motion seeking an order or injunction prohibiting
the consummation of any of the transactions contemplated by the Merger
Agreement.
Pursuant to the Merger Agreement, in the event of the termination of
the Merger Agreement, the Merger Agreement will become void and of no
effect with no liability on the part of any party thereto, except certain
provisions of the Merger Agreement relating to the termination fee,
expenses of the parties and the Non-Disclosure Agreement shall survive the
termination of the Merger Agreement.
Fees and Expenses. Pursuant to the Merger Agreement, in the event
that the Merger Agreement is terminated as a result of the occurrence of
any of the events described in clause (d) under "Termination" above, the
Company shall pay to Parent in respect of its expenses an amount in
immediately available funds equal to $8,000,000 promptly, but in no event
later than two business days, after the occurrence of such event.
Except as described in the preceding paragraph, the Merger Agreement
provides that all costs and expenses incurred in connection with the
transactions contemplated thereby shall be paid by the party incurring such
costs and expenses.
Amendment and Waivers. Any provision of the Merger Agreement may be
amended or waived prior to the Effective Time if, and only if, such
amendment or waiver is in writing and signed, in the case of an amendment,
by the Company, Parent and Purchaser or in the case of a waiver, by the
party against whom the waiver is to be effective; provided that after the
adoption of the Merger Agreement by the shareholders of the Company, no
such amendment or waiver shall, without the further approval of such
shareholders, alter or change (i) the amount or kind of consideration to be
received in exchange for any shares of capital stock of the Company or (ii)
any of the terms or conditions of the Merger Agreement if such alteration
or change could adversely affect the holders of any shares of capital stock
of the Company.
Successors and Assigns; Third Party Beneficiaries. The Merger
Agreement provides that the provisions of the Merger Agreement shall be
binding upon and inure to the benefit of the parties thereto and their
respective successors and assigns, provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under the
Merger Agreement without the consent of the other parties thereto except
that Parent may transfer or assign, in whole or from time to time in part,
to one or more of its direct or indirect wholly owned subsidiaries, the
right to purchase Shares pursuant to the Offer, but any such transfer or
assignment will not relieve Parent of its obligations under the Offer or
prejudice the rights of tendering shareholders to receive payment for
Shares validly tendered and accepted for payment pursuant to the Offer.
Pursuant to such provision, Parent has assigned to Purchaser its right to
purchase Shares pursuant to the Offer. Except for the provisions relating
to indemnification of officers, directors, employees and agents and certain
provisions relating to employee benefits, no provision of the Merger
Agreement is intended to confer upon any person other than the parties
thereto any right, benefit or remedy of any nature whatsoever under or by
reason of the Merger Agreement.
Option Agreement
The following is a summary of certain provisions of the Option
Agreement, a copy of which is filed with the Commission as an Exhibit to
the Schedule 14D-1 and is incorporated herein by reference. Such summary
is qualified in its entirety by reference to the Option Agreement.
Under the Option Agreement, upon the terms set forth therein, Corimon
granted to Parent the Option to purchase the Corimon Shares at a purchase
price of $17.50 per Share (the "Purchase Price"). The Corimon Shares
represent approximately 25.0% of the total number of outstanding Shares on
a fully diluted basis.
Exercise of Option. Subject to the satisfaction of the conditions
set forth in the Option Agreement (described below), the Option may be
exercised by Parent in whole but not in part at any time prior to the
earlier of (i) November 5, 1995 and (ii) five business days after the
Outside Termination Date (as defined in the Merger Agreement); provided
that Parent may exercise the Option only if the Corimon Minimum Condition
has been satisfied. Upon exercise of the Option, Parent shall send a
written notice (the "Exercise Notice") to Corimon specifying the places,
the dates (which (a) in the case of 2,173,362 Corimon Shares, shall be two
business days after the date of the Exercise Notice; (b) in the case of
1,336,360 Corimon Shares, shall be a business day not less than 10 calendar
days, nor more than 15 calendar days after the date of the Exercise Notice;
and (c) in the case of 516,129 Corimon Shares, shall be a business day not
less than 15 calendar days nor more than 20 calendar days after the date of
the Exercise Notice), and the times for the closings of such purchases.
The closings of the purchases of the Shares (the "Closings") shall take
place in New York, New York at the places, on the dates and at the times
designated by Parent in its Exercise Notice, provided that if, at the date
of any Closing so provided for, the conditions set forth in the Option
Agreement shall not have been satisfied or waived by Corimon, Parent may
postpone such Closing until a date within two business days after such
conditions are satisfied. For purposes of the Option Agreement, the
"Corimon Minimum Condition" shall have been satisfied only if (i) Parent
has paid for or accepted for payment all Shares properly tendered and not
withdrawn pursuant to the Offer (the "Tendered Shares") in accordance with
the terms of the Offer and the Merger Agreement and (ii) the Tendered
Shares plus the Corimon Shares constitute not less than a majority of the
outstanding Shares on a fully diluted basis.
Parent shall not be under any obligation to deliver any Exercise
Notice and may allow the Option to expire without purchasing the Corimon
Shares under the Option Agreement; provided however that once Parent has
delivered to Corimon an Exercise Notice, subject to the terms and
conditions of the Option Agreement, Parent shall be bound to effect the
purchase as described in such Exercise Notice; and provided further that if
the Corimon Minimum Condition is satisfied, Parent shall thereafter be
bound to exercise the Option within two business days following the date of
such satisfaction. The Option Agreement shall terminate upon termination
of the Merger Agreement, provided that parties to the Option Agreement will
not be relieved from liability for any breach of the Option Agreement.
The Option Agreement provides that Corimon shall not, and shall not
agree to, sell, assign, transfer, tender or otherwise dispose of any Shares
to any Person or group that has commenced a tender offer for, or proposed
to acquire, at least 50% of the outstanding Shares except pursuant to, and
at the price per share payable in, such offer or proposal.
Conditions to Corimon's Obligations. Under the Option Agreement, the
obligation of Corimon to sell the Corimon Shares is subject to the
following conditions: (i) all waiting periods under HSR Act applicable to
the exercise of the Option shall have expired or been terminated and (ii)
there shall be no preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission having
authority with respect thereto, nor any statute, rule, regulation or order
promulgated or enacted by any such governmental authority, prohibiting or
otherwise restraining the exercise of the Option or the sale of the Corimon
Shares pursuant thereto.
No Disposition or Encumbrance of Corimon Shares. Except as
contemplated by the Option Agreement, and except for any Lien (as defined
below) existing as of the date of the Option Agreement, Corimon agreed,
that, except as contemplated by the Option Agreement, it shall not, and
shall not offer or agree to, sell, transfer, tender, assign, hypothecate or
otherwise dispose of, or create or permit to exist any security interest,
lien, claim, pledge, option, right of first refusal, agreement, limitation
on Corimon's voting or dispositive rights, charge or other encumbrance of
any nature whatsoever (collectively, "Liens") with respect to the Corimon
Shares. Corimon further agreed that it will not tender the Shares into the
Offer unless directed to do so by Parent; provided that if it is so
directed by Parent, Corimon will, to the extent permitted by the Permitted
Liens (as defined in the Option Agreement), properly tender or cause to be
tendered the Corimon Shares into the Offer and, so long as the Option is
outstanding, not withdraw such Corimon Shares; and provided further that if
the Corimon Shares are purchased pursuant to the Offer, Corimon will pay,
subject to applicable law, to Parent a fee in cash equal to $.60 multiplied
by the number of Corimon Shares (such fee to be paid by Corimon upon
payment by Parent of the consideration for the Shares).
No Solicitation of Transactions. Each of Corimon and Corimon Parent
agreed that it shall not, and shall not permit any affiliate to, directly
or indirectly, through any agent or representative or otherwise, (i) take
any action to solicit, initiate or encourage any Acquisition Proposal (as
defined below); (ii) except as may be required by Arthur Broslat, Philippe
Erard and Harold Bittle (the "Corimon Directors") in the exercise of their
fiduciary duties in their capacity as members of the Board of Directors,
engage in negotiations with, or disclose any nonpublic information relating
to the Company or any subsidiary of the Company or afford access to the
properties, books or records of the Company or any subsidiary of the
Company to, any Person (as defined below) that may be considering making,
or has made, an Acquisition Proposal; or (iii) except as may be required by
the Corimon Directors in the exercise of their fiduciary duties in their
capacity as members of the Board of Directors of the Company, otherwise
cooperate in any way with, or assist or participate in or facilitate or
encourage, any effort or attempt by any Person to do or seek any of the
foregoing. Except as may be required by the Corimon Directors in the
exercise of their fiduciary duties in their capacity as members of the
Board of Directors, each of Corimon and Corimon Parent agreed that it shall
cease and cause to be terminated all existing discussions or negotiations
in which it or any of its agents or other representatives is or has been
engaged with any Person with respect to any of the foregoing. Corimon and
Corimon Parent shall notify Parent and the Company promptly after receipt
of any Acquisition Proposal or any indication that any Person is
considering making an Acquisition Proposal or any request for nonpublic
information relating to the Company or any subsidiary of the Company or for
access to the properties, books or records of the Company or any subsidiary
of the Company by any Person that may be considering making, or has made,
an Acquisition Proposal and will keep Parent fully informed of the status
and details of any such Acquisition Proposal, indication or request.
For the purposes of the Option Agreement, (i) "Person" means an
individual, a corporation, limited liability company, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or any agency or instrumentality
thereof other than Parent or any of its affiliates and (ii) "Acquisition
Proposal" means any offer or proposal for, or any indication of interest
in, a merger or other business combination involving the Company or any
subsidiary of the Company or the acquisition of any equity interest in, or
a substantial portion of the assets of, the Company or any subsidiary of
the Company, other than the transactions contemplated by the Merger
Agreement.
If there shall be a conflict between the terms of the Option
Agreement and the terms of the Merger Agreement with respect to the actions
that may or shall be taken by any person pursuant to such person's
fiduciary duties, the terms of the Merger Agreement shall supersede the
terms of the Option Agreement.
Voting Agreement. Pursuant to the Option Agreement, Corimon agreed
that prior to the time, if any, that the Merger Agreement is terminated, at
any meeting of the shareholders of the Company, however called, and in any
action by consent of the shareholders of the Company, Corimon shall vote
the Corimon Shares: (a) in favor of the Merger, the Merger Agreement (as
amended from time to time) or any of the transactions contemplated by the
Merger Agreement; and (b) against any proposal for any recapitalization,
merger, sale of assets or other business combination between the Company
and any Person (other than the Merger) or any other action or agreement
that would result in a breach of any covenant, representation or warranty
or any other obligation or agreement of the Company under the Merger
Agreement or which could result in any of the conditions to any party's
obligations under the Merger Agreement not being fulfilled.
Further Assurances; Guaranty. Corimon agreed to use its best
efforts to take all necessary actions, and to obtain all necessary consents
and amendments, with respect to the Liens to which the Corimon Shares are
subject (i) to permit each of the Closings to take place as promptly as
possible after the satisfaction of the Corimon Minimum Condition and (ii)
if requested by Parent, to permit Corimon to tender the Corimon Shares into
the Offer in accordance with the provisions of the Option Agreement
described above; Parent agreed to cooperate and assist Corimon Parent and
Corimon with respect to the foregoing. Corimon Parent has agreed to
guaranty the obligations of Corimon under the Option Agreement.
Assignment Agreement
The following is a summary of the Assignment Agreement, a copy of
which is filed with the Commission as an Exhibit to the Schedule 14D-1 and
is incorporated herein by reference. Such summary is qualified in its
entirety by reference to the Assignment Agreement.
Pursuant to the Assignment Agreement, upon the terms set forth
therein, Purchaser agreed to make the Offer and Parent assigned to
Purchaser (i) its right under the Merger Agreement to purchase Shares
pursuant to the Offer and (ii) its rights and obligations under the Option
Agreement. Pursuant to the Assignment Agreement, Purchaser undertook to
the Company to be bound by the applicable terms of both the Merger
Agreement and the Option Agreement and Parent acknowledged that it
continues to have certain obligations under both the Merger Agreement and
the Option Agreement.
Non-Disclosure Agreement
Under the Non-Disclosure Agreement, Parent agreed that, for a period
of two years from the date of the Non-Disclosure Agreement, neither Parent
nor any of its affiliates will purchase, offer or agree to purchase any
securities or assets of the Company, enter, or agree to enter into any
acquisition or other business combination, relating to the Company, or
make, or induce any other entity to make or negotiate or otherwise deal
with others for a tender or exchange offer of the Shares, solicit proxies,
votes or consents other than for nominees selected by the Board of
Directors of the Company, and proposals recommended by the Board, or
otherwise seek to acquire control of the Company unless such purchase,
transaction, offer, agreement or proposal shall have previously been
approved by the Board; provided that Parent will at all times be entitled
to maintain for investment purposes only shares of any common stock of the
Company listed on the NYSE so long as such interest, at any time, is not
greater than 15% of all the issued securities of the Company.
Rights Agreement
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. On April 30, 1995, the Company and the
Rights Agent amended such Rights Agreement (as so amended, the "Rights
Agreement") to permit the announcement and consummation of the transactions
contemplated by the 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 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").
Distribution Date and Issuance of Rights Certificates. Until the
earliest of (i) the tenth business day after the Stock Acquisition Date (as
hereinafter defined) (ii) the tenth business day (or such later 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
hereinafter defined) (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 by the Board of
Directors pursuant to the Rights Agreement that a person is an Adverse
Person (as hereinafter defined) (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 will be evidenced by the certificates
evidencing the Common Stock and the Rights will be 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 such separate Rights Certificates alone will evidence
the Rights. Notwithstanding anything to the contrary contained in the
Rights Agreement, neither the announcement nor the consummation of any of
the ICI Transactions (as hereinafter defined) shall constitute or result in
the occurrence of a Distribution Date.
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;
provided, however that the public announcement of any of the ICI
Transactions shall not constitute a Stock Acquisition Date; (ii) "Person"
means any 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 (w) the Company, (x) any subsidiary of the Company, (y) any
employee benefit plan of the Company or any of its subsidiaries, or (z) 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; provided that none of Parent, Purchaser and
their affiliates (the "ICI Persons") shall be deemed to be an Acquiring
Person by virtue of (x) the execution of the Merger Agreement, or (y) the
consummation of any of the transactions contemplated thereby or by the
Option Agreement, including, without limitation, the publication or other
announcement of the Offer, the consummation of the Offer and the Merger or
the entering into, or the consummation of, the transactions contemplated by
the Option Agreement; (the items set forth in (x) and (y) are referred to
in the Rights Agreement as the "ICI Transactions"); 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; provided
that none of the ICI Persons shall be declared an Adverse Person as a
result of the announcement or consummation of the ICI Transactions.
Exercise of Rights. 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 as provided in the Rights Agreement as hereinafter
described ("Redemption Date").
Notwithstanding anything in the Rights Agreement to the contrary, if
an Acquiring Person, 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 of the transactions set forth in the Rights Agreement
(including the transactions described under "Consolidation, Merger or Sale
of the Company" and "Adjustment of Purchase Price" below) 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, will have no
rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends.
THE TRANSACTIONS DESCRIBED IN THIS OFFER TO PURCHASE WILL NOT RESULT
IN ANY RIGHTS CERTIFICATES BEING DISTRIBUTED TO SHAREHOLDERS OF THE COMPANY
OR IN THE RIGHTS BECOMING EXERCISABLE.
Consolidation, Merger or Sale of the Company. In the event that,
following the 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 (x) or
(y), 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 will be made so that (i) each holder of a Right, except as
otherwise provided in the Rights Agreement, shall 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 shall
thereafter be liable for, and shall 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"
shall thereafter be deemed to refer to such Principal Party; and (iv) such
Principal Party shall 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 hereof shall thereafter
be applicable, as nearly as reasonably may be, in relation to its shares of
Common Stock hereafter delivered upon the exercise of the Rights.
Notwithstanding any other provision of the Rights Agreement, nothing
contained in the Rights Agreement shall preclude the consummation of the
ICI Transactions, and upon consummation of the Merger pursuant to, and in
accordance with, the terms of the Merger Agreement, all Rights shall expire
and be of no further force or effect.
Redemption. The Board of Directors may, at its option, at any time
prior to the earliest of (i) the tenth day following the 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 shall 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 will 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 will 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.
Certain Adjustment to Purchase Price. 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 reasonable 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 shall be made so that each holder of a Right, shall, 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 thereof at the
then current Purchase Price in accordance with the terms of the Rights
Agreement, such number of shares of 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 "Consolidation, Merger, or Sale
of the Company" above, then only such provisions shall apply and no
adjustment shall be made pursuant to this provision.
Amendments. Prior to the 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 the Distribution Date, holders of Company
Stock certificates).
Section 11 of the Company's Certificate of Incorporation.
Section 11(a) of the Company's Certificate of Incorporation provides
that the affirmative vote of the holders of at least 80% of the outstanding
shares of capital stock of the Company shall be required to authorize: (1)
any merger or consolidation of the Company or any of its subsidiaries with
or into any other corporation; or (ii) any sale, lease, exchange or other
disposition by the Company or any of its subsidiaries of assets
constituting all or substantially all of the assets of the Company and its
subsidiaries taken as a whole to or with any other corporation, person or
other entity; if, in the case of (i) or (ii) above, as of the record date
for the determination of shareholders entitled to notice thereof and to
vote thereon, such other corporation, person or entity is the "beneficial
owner" (as defined), directly or indirectly, of 10% or more of the
outstanding shares of capital stock of the Company entitled to vote in the
election of directors.
Section 11(c) of the Company's Certificate of Incorporation provides
that the foregoing 80% approval requirement does not apply to a transaction
referred to in Section 11(a) if the Board of Directors of the Company shall
by resolution have approved a memorandum of understanding with such other
corporation, person or other entity with respect to, and substantially
consistent with, such transaction prior to the time such other corporation,
person or entity becomes the owner of 10% or more of the outstanding shares
of capital stock of the Company entitled to vote in the election of
directors. On April 30, 1995, prior to the execution of the Merger
Agreement and the Option Agreement, the Board of Directors of the Company
approved such agreements and the transactions contemplated thereby. The
Company, Parent and Purchaser have agreed that the Merger Agreement
constitutes the memorandum of understanding contemplated by Section 11
setting forth the principal terms of the Merger and related transactions.
As a result of the approval by the Board of Directors, the 80% approval
requirement set forth in Section 11(a) will not apply to the Merger.
11. Purpose of the Offer; Plans for the Company after the Offer and
the Merger. The purpose of the Offer is to acquire for cash as many
outstanding Shares as possible as a first step in acquiring the entire
equity interest in the Company.
The Board of Directors has unanimously recommended that all holders
of Shares tender such Shares pursuant to the Offer. The Board of Directors
has unanimously approved the Merger Agreement and the transactions
contemplated thereby, including the Offer and the Merger, which approval
Purchaser believes satisfies the relevant requirements of New York Law.
Under New York Law, the Board of Directors is required to submit the Merger
Agreement to the Company's shareholders for approval at a shareholder's
meeting convened for that purpose. The Merger Agreement must be approved
by two-thirds of all votes entitled to be cast at such meeting. The Board
of Directors has unanimously recommended acceptance of the Offer and
approval and adoption of the Merger Agreement and the Merger by the
Company's shareholders. In addition, the Company has been advised that all
of its directors and executive officers intend either to tender their
Shares pursuant to the Offer or to vote in favor of the Merger.
If pursuant to the Offer, Purchaser acquires more than two-thirds of
the outstanding Shares, Purchaser will have sufficient voting power to
approve the Merger at a meeting of Company shareholders without the
affirmative vote of any other shareholder. If required by law, a proxy
statement or information statement relating to the shareholders, meeting at
which approval of such Merger would be sought will be mailed to all
shareholders of the Company. If Purchaser acquires 90% or more of the
shares, such Merger could be accomplished under New York Law without a
shareholders' meeting.
In the course of Parent's due diligence investigation prior to
commencement of the Offer, Parent preliminarily identified a number of
areas where it believes the performance of the Company may be improved,
including manufacturing, purchasing and administrative services, in order
to enhance customer service, reduce costs and increase operating
efficiencies. After completion of the Offer, Parent intends to continue to
evaluate and review the various business strategies of the Company and its
assets, corporate structure, operations, management and personnel, and to
consider what changes, if any, may be desirable. In connection with such
further evaluation and review, Parent may consider dispositions of certain
businesses or assets unrelated to Parent's core paints businesses.
12. Effect of the Offer on the Market for the Shares; Stock
Exchange Listing; Registration under the Exchange Act. The purchase of
Shares pursuant to the Offer will reduce the number of Shares that might
otherwise trade publicly and may reduce the number of holders of Shares,
which could adversely affect the liquidity and market value of the
remaining Shares held by shareholders other than Purchaser. Purchaser
cannot predict whether the reduction in the number of Shares that might
otherwise trade publicly would have an adverse or beneficial effect on the
market price for, or marketability of, the Shares or whether such reduction
would cause future market prices to be greater or less than the Offer
price.
Depending upon the number of Shares purchased pursuant to the Offer,
the Shares may no longer meet the requirements of the NYSE for continued
listing and may, therefore, be delisted from such exchange. According to
the NYSE's published guidelines, the NYSE would consider delisting the
Shares if, among other things, the number of publicly-held Shares
(excluding Shares held by officers, directors, their immediate families and
other concentrated holdings of 10% or more) were less than 600,000, there
were less than 1,200 holders of at least 100 shares or the aggregate market
value of the publicly-held Shares were less than $5 million. As of April
29, 1995, there were approximately 16,101,712 Shares outstanding and
approximately 3,650 holders of record of such Shares. If, as a result of
the purchase of Shares pursuant to the Offer, the Shares no longer meet the
requirements of the NYSE for continued listing and the listing of Shares is
discontinued, the market for the Shares could be adversely affected.
If the NYSE were to delist the Shares (which Purchaser intends to
cause the Company to seek if it acquires control of the Company and the
Shares no longer meet the NYSE listing requirements), it is possible that
the Shares would trade on another securities exchange or in the over-the-
counter market and that price quotations for the Shares would be reported
by such exchange or through the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") or other sources. The extent of the
public market for the Shares and availability of such quotations would,
however, depend upon such factors as the number of holders and/or the
aggregate market value of the publicly-held Shares at such time, the
interest in maintaining a market in the Shares on the part of securities
firms, the possible termination of registration of the Shares under the
Exchange Act and other factors.
The Shares are currently "margin securities" under the regulations of
the Board of Governors of the Federal Reserve System (the "Federal Reserve
Board"), which has the effect, among other things, of allowing brokers to
extend credit on the collateral of such Shares. Depending upon factors
similar to those described above regarding 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 loans made by brokers.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application of the Company to the
Commission if the Shares are neither listed on a national securities
exchange nor held by 300 or more holders of record. Termination of the
registration of the Shares under the Exchange Act would substantially
reduce the information required to be furnished by the Company to holders
of Shares and to the Commission and would make certain of the provisions of
the Exchange Act, such as the short-swing profit recovery provisions of
Section 16(b), the requirement of furnishing a proxy statement pursuant to
Section 14(a) in connection with a shareholder's meeting and the related
requirement of an annual report to shareholders 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 may be deprived of the ability to dispose of such securities
pursuant to Rule 144 promulgated under the Securities Act of 1933 (the
"Securities Act"). If registration of the Shares under the Exchange Act
were terminated, the Shares would no longer be "margin securities" or
eligible for listing or NASDAQ reporting. Purchaser intends to seek to
cause the Company to terminate registration of the Shares under the
Exchange Act as soon after consummation of the Offer as the requirements
for termination of registration of the Shares are met.
13. Dividends and Distributions. If on or after April 30, 1995 the
Company should (i) split, combine or otherwise change the Shares or its
capitalization, (ii) acquire or otherwise cause a reduction in the number
of outstanding Shares or (iii) issue or sell any additional Shares (other
than Shares issued pursuant to and in accordance with the terms in effect
on April 30, 1995 of employee stock options outstanding prior to such
date), shares of any other class or series of capital stock, other voting
securities or any securities convertible into, or options, rights, or
warrants, conditional or otherwise, to acquire, any of the foregoing, then,
without prejudice to Purchaser's rights under Section 15, Purchaser may, in
its sole discretion, make such adjustments in the purchase price and other
terms of the Offer as it deems appropriate including the number or type of
securities to be purchased.
If, on or after April 30, 1995, the Company should declare or pay any
dividend on the Shares (other than regular quarterly cash dividends not in
excess of $.07 per Share having customary and usual record and payment
dates) or any distribution with respect to the Shares (including the
issuance of additional Shares or other securities or rights to purchase of
any securities) that is payable or distributable to shareholders of record
on a date prior to the transfer to the name of Purchaser or its nominee or
transferee on the Company's stock transfer records of the Shares purchased
pursuant to the Offer, then, without prejudice to Purchaser's rights under
Section 15, (i) the purchase price per Share payable by Purchaser pursuant
to the Offer will be reduced to the extent of any such cash dividend or
distribution and (ii) the whole of any such non-cash dividend or
distribution to be received by the tendering shareholders will (a) be
received and held by the tendering shareholders for the account of
Purchaser and will be required to be promptly remitted and transferred by
each tendering shareholder to the Depositary for the account of Purchaser,
accompanied by appropriate documentation of transfer, or (b) at the
direction of Purchaser, be exercised for the benefit of Purchaser, in which
case the proceeds of such exercise will promptly be remitted to Purchaser.
Pending such remittance and subject to applicable law, Purchaser will be
entitled to all rights and privileges as owner of any such non-cash
dividend or distribution or proceeds thereof and may withhold the entire
purchase price or deduct from the purchase price the amount or value
thereof, as determined by Purchaser in its sole discretion.
14. Extension of Tender Period; Termination; Amendment. Subject
to the terms of the Merger Agreement, Purchaser reserves the right, at any
time or from time to time, in its sole discretion and regardless of whether
or not any of the conditions specified in Section 15 shall have been
satisfied, (i) to extend the period of time during which the Offer is open
by giving oral or written notice of such extension to the Depositary and by
making a public announcement of such extension or (ii) to amend the Offer
in any respect by making a public announcement of such amendment. There
can be no assurance that Purchaser will exercise its right to extend or
amend the Offer.
If Purchaser decreases the percentage of Shares being sought or
increases or decreases the consideration to be paid for Shares pursuant to
the Offer and the Offer is scheduled to expire at any time before the
expiration of a period of 10 business days from, and including, the date
that notice of such increase or decrease is first published, sent or given
in the manner specified below, the Offer will be extended until the
expiration of such period of 10 business days. If Purchaser makes a
material change in the terms of the Offer (other than a change in price or
percentage of securities sought) or in the information concerning the
Offer, or waives a material condition of the Offer, Purchaser will extend
the Offer, if required by applicable law, for a period sufficient to allow
shareholders to consider the amended terms of the Offer. In a published
release, the Commission has stated that in its view an offer must remain
open for a minimum period of time following a material change in the terms
of such offer and that the waiver of a condition such as the Minimum
Condition is a material change in the terms of an offer. The release
states that an offer should remain open for a minimum of five business days
from the date the material change is first published, sent or given to
securityholders, and that if material changes are made with respect to
information that approaches the significance of price and share levels, a
minimum of 10 business days may be required to allow adequate dissemination
and investor response. The term "business day" shall mean any day other
than Saturday, Sunday or a federal holiday and shall consist of the time
period from 12:01 A.M. through 12:00 Midnight, New York City time.
Purchaser also reserves the right, in its sole discretion, in the
event any of the conditions specified in Section 15 shall not have been
satisfied and so long as Shares have not theretofore been accepted for
payment, to delay (except as otherwise required by applicable law)
acceptance for payment of or payment for Shares or to terminate the Offer
and not accept for payment or pay for Shares.
If Purchaser extends the period of time during which the Offer is
open, is delayed in accepting for payment or paying for Shares or is unable
to accept for payment or pay for Shares pursuant to the Offer for any
reason, then, without prejudice to Purchaser's rights under the Offer, the
Depositary may, on behalf of Purchaser, retain all Shares tendered, and
such Shares may not be withdrawn except as otherwise provided in Section 4.
The reservation by Purchaser of the right to delay acceptance for payment
of or payment for Shares is subject to applicable law, which requires that
Purchaser pay the consideration offered or return the Shares deposited by
or on behalf of shareholders promptly after the termination or withdrawal
of the Offer.
Any extension, termination or amendment of the Offer will be followed
as promptly as practicable by a public announcement thereof. Without
limiting the manner in which Purchaser may choose to make any public
announcement, Purchaser will have no obligation (except as otherwise
required by applicable law) to publish, advertise or otherwise communicate
any such public announcement other than by making a release to the Dow
Jones News Service. In the case of an extension of the Offer, Purchaser
will make a public announcement of such extension no later than 9:00 A.M.,
New York City time, on the next business day after the previously scheduled
Expiration Date.
15. Certain Conditions of the Offer. Notwithstanding any other
provisions of the Offer, and in addition to (and not in limitation of)
Purchaser's rights to extend and amend the Offer at any time in its sole
discretion (subject to the provisions of the Merger Agreement), Purchaser
shall not be required to accept for payment or, subject to any applicable
rules and regulations of the Commission, including Rule 14e-1(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, and may delay the acceptance for payment of or, subject to the
restriction referred to above, the payment for, any tendered Shares, and
may terminate the Offer if (i) any applicable waiting period under the HSR
Act or the Exon-Florio Provision has not expired or terminated prior to the
expiration of the Offer, (ii) the Minimum Condition has not been satisfied,
(iii) the Rights under the Rights Agreement shall have become exercisable,
or (iv) at any time on or after April 30, 1995 and before the time of
acceptance of Shares for payment pursuant to the Offer, any of the
following conditions shall exist:
(a) there shall be instituted and pending by any domestic or foreign
federal or state governmental regulatory or administrative agency or
authority or court or legislative body or commission ("Governmental
Entity") (or the staff of any HSR Authority shall have recommended the
commencement of) any action or proceeding which (1) seeks to prohibit, or
impose any material limitations on, Parent's or Purchaser's ownership or
operation of all or a material portion of the businesses or assets of the
Company and its Subsidiaries, taken as a whole, or to compel Parent or any
of its subsidiaries or affiliates to dispose of or hold separate all or any
material portion of the business or assets of the Company and its
Subsidiaries, taken as a whole, or of Parent or its subsidiaries, (2) seeks
to prohibit, or make illegal, the acceptance for payment, payment for or
purchase of Shares or the consummation of the Offer or the Merger, (3)
challenges or seeks to make illegal, to delay materially or to restrain or
prohibit, the making of the Offer, or seeks to restrain or limit the
ability of Purchaser, or renders Purchaser unable, to accept for payment,
pay for or purchase some or all of the Shares, or to consummate the Merger,
or seeks material damages relating to the transactions contemplated by the
Offer or the Merger or (4) imposes material limitations on the ability of
Purchaser or Parent effectively to exercise full rights of ownership of the
Shares, including without limitation, the right to vote the Shares
purchased by it on all matters properly presented to the Company's
shareholders;
(b) there shall have been any action taken, or any statute, rule,
regulation, judgment, order or injunction promulgated, entered, enforced,
enacted, issued or applicable to the Offer or the Merger by any
Governmental Entity that results in any of the consequences referred to in
clauses (1) through (4) of paragraph (a) above;
(c) unless the Shares properly tendered constitute not less than two-
thirds of the outstanding Shares on a fully diluted basis, any event or
action shall have occurred that shall materially impair, restrain or
prohibit or materially delay the acquisition by Parent of the Corimon
Shares in accordance with the terms of the Corimon Option Agreement;
(d) the representations and warranties of the Company set forth in
the Merger Agreement (without giving effect to any qualification as to
materiality or Material Adverse Effect contained therein) shall not be true
and correct as of the date of consummation of the Offer as though made on
or as of such date or the Company shall have breached or failed to perform
or comply with any obligation, agreement or covenant required by the Merger
Agreement to be performed or complied with by it except, in each case, (i)
for changes specifically permitted by the Merger Agreement and (ii) (A)
those representations and warranties that address matters only as of a
particular date which are true and correct as of such date or (B) where the
failure of such representations and warranties to be true and correct, or
the performance or compliance with such obligations, agreements or
covenants, individually or in the aggregate, do not have, and could not
reasonably be expected to have, a Material Adverse Effect or a material
adverse effect on the ability of Parent to consummate the Offer or the
Merger. Under the Merger Agreement, the term "Material Adverse Effect"
means a material adverse effect on the condition (financial or otherwise),
business, assets or results of operations of the Company and its
Subsidiaries taken as a whole, that is not a result of general changes in
the economy or the industries in which the Company and its Subsidiaries
operate;
(e) the Merger Agreement shall have been terminated in accordance
with its terms;
(f) any person, entity or "group" (as defined in Section 13(d)(3) of
the Exchange Act), shall have acquired beneficial ownership (determined
pursuant to Rule 13d-3 promulgated under the Exchange Act) of more than 25%
of any class or series of capital stock of the Company (including the
Shares), through the acquisition of stock, the formation of a group or
otherwise, other than Corimon or its affiliates; or Corimon and its
affiliates shall have acquired beneficial ownership of more than 28% of the
outstanding Shares or (ii) the Company shall have entered into a definitive
agreement or agreement in principle with any person with respect to an
Acquisition Proposal or similar business combination with the Company;
(g) the Company's Board of Directors shall have withdrawn, or
modified or changed in a manner adverse to Parent or Purchaser (including
by amendment of the Schedule 14D-9) its recommendation of the Offer, the
Merger Agreement, or the Merger, or recommended another proposal or offer,
or shall have resolved to do any of the foregoing; or
(h) Parent shall not have received and shall not be satisfied that
it will receive the consents and approvals required under ISRA (as defined
below) or the Company's credit agreement in connection with the
consummation of the Offer or the Merger;
which in the sole judgment of Parent or Purchaser, in any such case, and
regardless of the circumstances giving rise to such condition, makes it
inadvisable to proceed with the Offer and/or with such acceptance for
payment or payments.
The foregoing conditions are for the sole benefit of Purchaser and
Parent and may be waived by Parent or Purchaser, in whole or in part at any
time and from time to time in the sole discretion of Parent or Purchaser.
The failure by Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right; the waiver of any
such right with respect to particular facts and other circumstances shall
not be deemed a waiver with respect to any other facts and circumstances;
and each such right shall be deemed an ongoing right that may be asserted
at any time and from time to time.
16. Certain Legal Matters; Regulatory Approvals.
General. Based on its examination of publicly available information
filed by the Company with the Commission and other publicly available
information concerning the Company and the review of certain information
provided by the Company to Parent, Purchaser is not aware of any
governmental license or regulatory permit that appears to be material to
the Company's business that might be adversely affected by Purchaser's
acquisition of Shares as contemplated herein or, except as set forth below,
of any approval or other action by any government or governmental
administrative or regulatory authority or agency, domestic or foreign, that
would be required for the acquisition or ownership of Shares by Purchaser
as contemplated herein. Should any such approval or other action be
required, Purchaser currently contemplates that, except as described below
under "State Takeover Statutes", such approval or other action will be
sought. Except as described under "Antitrust" there is, however, no
current intent to delay the purchase of Shares tendered pursuant to the
Offer pending the outcome of any such matter. Purchaser is unable to
predict whether it may determine that it is required to delay the
acceptance for payment of or payment for Shares tendered pursuant to the
Offer pending the outcome of any such matter. There can be no assurance
that any such approval or other action, if needed, would be obtained or
would be obtained without substantial conditions or that if such approvals
were not obtained or such other actions were not taken adverse consequences
might not result to the Company's business or certain parts of the
Company's business might not have to be disposed of, any of which could
cause Purchaser to elect to terminate the Offer without the purchase of
Shares thereunder. Purchaser's obligation under the Offer to accept for
payment and pay for Shares is subject to certain conditions. See Section
15.
State Takeover Statutes. The Company is incorporated under the laws
of the State of New York. Section 912 of New York Law prohibits certain
"business combinations" (defined to include mergers and consolidations)
involving a New York corporation and an "interested shareholder" (defined
generally as a person who is the beneficial owner of 20% or more of the
outstanding voting stock of such New York corporation) for a period of five
years following the date on which such shareholder first became an
interested shareholder (such date, a "stock acquisition date") unless such
business combination or the purchase of stock made by such interested
shareholder is approved by the board of directors of such New York
corporation prior to such interested shareholder's stock acquisition date
or certain other statutory conditions have been met. At a meeting on April
30, 1995, the Board of Directors approved the Merger Agreement, the Merger,
the Offer and Purchaser's purchase of Shares pursuant to the Offer.
Accordingly, the provisions of Section 912 of New York Law have been
satisfied with respect to the Offer and the Merger and such provisions will
not delay the consummation of the Merger. Article 16 of New York Law also
requires a bidder for shares of a New York corporation to file a
registration statement with the attorney general and to satisfy certain
disclosure requirements. Parent and Purchaser have filed such a
registration statement and this Offer to Purchase sets forth the
information required to be disclosed pursuant to Article 16.
A number of other states have adopted "takeover" statutes that
purport to apply to attempts to acquire corporations that are incorporated
in such states, or whose business operations have substantial economic
effects in such states, or which have substantial assets, security holders,
employees, principal executive offices or places of business in such
states.
In 1982, in Edgar v. MITE Corp., the Supreme Court of the United
States invalidated on constitutional grounds the Illinois Business Takeover
Statute which, as a matter of state securities law, made takeovers of
corporations meeting certain requirements more difficult. However, in 1987
in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the
State of Indiana could, as a matter of corporate law, constitutionally
disqualify a potential acquiror from voting shares of a target corporation
without the prior approval of the remaining shareholders where, among other
things, the corporation is incorporated in, and has a substantial number of
shareholders in, the state. Subsequently, in TLX Acquisition Corp. v.
Telex Corp., a Federal District Court in Oklahoma ruled that the Oklahoma
statutes were unconstitutional insofar as they apply 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.
If any government official or third party should seek to apply any
state takeover law to the Offer or any merger or other business combination
between Purchaser or any of its affiliates and the Company, Purchaser will
take such action as then appears desirable, which action may include
challenging the applicability or validity of such statute in appropriate
court proceedings. In the event it is asserted that one or more state
takeover statutes is applicable to the Offer or any such merger or other
business combination and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer or any such merger or other
business combination, Purchaser might be required to file certain
information with, or to receive approvals from, the relevant state
authorities or holders of Shares, and Purchaser might be unable to accept
for payment or pay for Shares tendered pursuant to the Offer, or be delayed
in continuing or consummating the Offer or any such merger or other
business combination. In such case, Purchaser may not be obligated to
accept for payment or pay for any tendered Shares. See Section 15.
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 of 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 thereof 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 such 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, Purchaser has filed a registration
statement with the New York State Attorney General and has disclosed
certain additional information in Schedule II hereto.
Antitrust. Under the HSR Act and the rules that have been
promulgated thereunder by the Federal Trade Commission (the "FTC"), certain
acquisition transactions may not be consummated unless certain information
has been furnished to the Antitrust Division of the Department of Justice
(the "Antitrust Division") and the FTC and certain waiting period
requirements have been satisfied. The purchase of Shares pursuant to the
Offer is subject to such requirements.
Pursuant to the requirements of the HSR Act, Purchaser filed a
Notification and Report Form with respect to the Offer with the Antitrust
Division and the FTC on May 2, 1995. As a result, the waiting period
applicable to the purchase of Shares pursuant to the Offer is expected to
expire at 11:59 P.M., New York City time, on Wednesday, May 17, 1995.
However, prior to such time, the Antitrust Division or the FTC may extend
the waiting period by requesting additional information or documentary
material relevant to the Offer from Parent, the Company or their respective
affiliates and subsidiaries. If such a request is made, the waiting period
will be extended until 11:59 P.M., New York City time, on the tenth day
following substantial compliance with such request by Parent, its
affiliates or subsidiaries. Thereafter, such waiting period can be
extended only by court order.
A request is being made pursuant to the HSR Act for early termination
of the waiting period applicable to the Offer. There can be no assurance,
however, that the 15-day HSR Act waiting period will be terminated early.
Shares will not be accepted for payment or paid for pursuant to the Offer
until the expiration or earlier termination of the applicable waiting
period under the HSR Act. See Section 15. Subject to Section 4, any
extension of the waiting period will not give rise to any withdrawal rights
not otherwise provided for by applicable law. If purchaser's acquisition
of Shares is delayed pursuant to a request by the Antitrust Division or the
FTC for additional information or documentary material pursuant to the HSR
Act, the Offer may, but need not, be extended.
The Antitrust Division and the FTC frequently scrutinize the legality
under the antitrust laws of transactions such as the acquisition of Shares
by Purchaser pursuant to the Offer. At any time before or after the
consummation of any such transactions, the Antitrust Division or the FTC
could take such action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin the purchase
of Shares pursuant to the Offer or seeking divestiture of the Shares so
acquired or divestiture of substantial assets of Purchaser or the Company.
Private parties (including individual states) may also bring legal actions
under the antitrust laws. Purchaser does not believe that the consummation
of the Offer will result in a violation of any applicable antitrust laws.
However, there can be no assurance that a challenge to the Offer on
antitrust grounds will not be made, or if such a challenge is made, what
the result will be. See Section 15 for certain conditions to the Offer,
including conditions with respect to litigation and certain governmental
actions and Section 10 for certain termination rights in connection with
antitrust suits.
Exon-Florio Provision. The Exon-Florio Provision applies to all
acquisitions proposed or pending on or after August 23, 1988, by or with
foreign persons which could result in foreign control of persons engaged in
interstate commerce in the United States. The Exon-Florio Provision
empowers the President of the United States to prohibit or suspend mergers,
acquisitions or takeovers by or with foreign persons if the President
finds, after investigations, credible evidence that the foreign person
might take action that threatens to impair the national security of the
United States and that other provisions of existing law do not provided
adequate and appropriate authority to protect the national security. The
President has designated The Committee on Foreign Investment in the United
States ("CFIUS") as the agency authorized under the Exon-Florio Provision
to receive notices and other information, to determine whether
investigations should be undertaken and to make investigations. CFIUS is
comprised of representatives of the Departments of Treasury, State,
Commerce, Defense and Justice, the Office of Management and Budget, the
United States Trade Representative's Office and the Council of Economic
Advisors. Any determination by CFIUS that an investigation is called for
must be made within 30 days after its acceptance of written notification
concerning a proposed transaction. In the event that CFIUS determines to
undertake an investigations, such investigation must be completed within 45
days after such determination. Upon completion or termination of any such
investigation, the Committee must report to the President and present its
recommendation. The President then has 15 days in which to suspend or
prohibit the proposed transaction or to seek other appropriate relief.
Based upon information made available to Parent by the Company as of the
date of this Offer to Purchase, Parent believes that the purchase of the
Shares does not raise any national security issues and, as a result, Parent
does not currently intend to deliver any notification to CFIUS. However,
Parent reserves the right to deliver such notification in the event that it
should subsequently discover additional information concerning the Company
relating to matters potentially involving national security.
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 such 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.
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. After the tender of the Shares, the Purchaser
will determine whether the transaction constitutes a "transfer" and whether
any of the Company's properties are "industrial establishments" subject to
ISRA.
Short-Form Merger. Section 905 of New York Law would permit the
Merger to occur without a vote of the Company's shareholders (a "short-form
merger") if Purchaser were to acquire at least 90% of the outstanding
Shares.
Appraisal Rights. If the Proposed Merger is consummated,
shareholders of the Company would have certain rights to dissent and demand
appraisal of their Shares under New York Law. Dissenting shareholders who
comply with the requisite statutory procedures under New York Law would 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
shareholder 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 date of payment. Under New York Law, in fixing the
fair value of the Shares, a court would consider the nature of the
transaction giving rise to the shareholders' right to receive payment for
Shares and its effects on the Company and its shareholders, 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.
Foreign Countries. The Company and its subsidiaries own property and
conduct business in a number of foreign countries. In connection with the
acquisition of Shares pursuant to the Offer, the laws of certain of these
foreign countries may require the filing of information with, or the
obtaining of the approval of, governmental authorities therein. After
commencement of the Offer, Purchaser will seek further information
regarding the applicability of any such laws and currently intends to take
such action as they may require, but no assurance can be given that such
approvals will be obtained. If any action is taken prior to completion of
the Offer by any such government or governmental authority, Purchaser may
not be obligated to accept for payment or pay for any tendered Shares. See
Section 15.
Certain Litigation. On May 1, 1995, the Company was served with a
complaint naming the Company and its directors as defendants in a class
action for breach of fiduciary duty. The complaint was filed with the
Supreme Court of the State of New York, County of New York. The plaintiff
in such action is General Color Company Pension Plan, on behalf of itself
and all others similarly situated. The complaint alleges that the proposed
acquisition of the Company by Parent is unfair to the Company's public
shareholders and alleges breaches of the defendants' fiduciary duties. The
complaint seeks, among other things, injunctive relief and unspecified
damages.
17. Fees and Expenses. Goldman Sachs is acting as financial
advisor to Parent and ICI American and is acting as Dealer Managers in
connection with the Offer. ICI American has agreed to pay Goldman Sachs as
compensation for its services as Dealer Managers in connection with the
Offer and as financial advisor (i) an initial fee of $150,000 (paid upon
signing of the engagement letter), (ii) an additional fee of $1,500,000
upon the consummation of a transaction whereby at least 50% of the
outstanding Shares or at least 50% of the assets of the Company are
acquired and (iii) an additional fee of at least $1,000,000 if certain
additional advisory services are rendered after the Merger. Purchaser has
also agreed to reimburse Goldman Sachs for its reasonable out-of-pocket
expenses incurred (including the reasonable fees and disbursements of its
counsel) and to indemnify Goldman Sachs against certain liabilities,
including certain liabilities under the federal securities laws.
Purchaser has retained MacKenzie Partners, Inc. to act as the
Information Agent and Morgan Guaranty 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
interviews and may request brokers, dealers and other nominee shareholders
to forward materials relating to the Offer to beneficial owners. The
Information Agent and the Depositary each will receive reasonable and
customary compensation for their respective services, will be reimbursed
for certain reasonable out-of-pocket expenses and will be indemnified
against certain liabilities in connection therewith, including certain
liabilities under the federal securities laws.
Purchaser will not pay any fees or commissions to any broker or
dealer or any other person (other than the Dealer Managers, the Information
Agent and the Depository) for soliciting tenders of Shares pursuant to the
Offer. Brokers, dealers, commercial banks and trust companies will, upon
request, be reimbursed by Purchaser for reasonable and necessary costs and
expenses incurred by them in forwarding materials to their customers.
18. Miscellaneous. The Offer is not being made to, nor will tenders
be accepted from or on behalf of, holders of Shares in any jurisdiction in
which the making of the Offer or acceptance thereof would not be in
compliance with the laws of such jurisdiction. However, Purchaser may, in
its discretion, take such action as it may deem necessary to make the Offer
in any such jurisdiction and extend the Offer to holders of Shares in such
jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER NOT CONTAINED IN THIS OFFER TO
PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
Purchaser has filed with the Commission a Tender Offer Statement on
Schedule 14D-1, together with exhibits, pursuant to Rule 14d-3 of the
General Rules and Regulations under the Exchange Act, furnishing certain
additional information with respect to the Offer. The Schedule 14D-1 and
any amendments thereto, including exhibits, may be examined and copies may
be obtained from the offices of the Commission in the manner set forth in
Section 7 of this Offer to Purchase (except that such information will not
be available at the regional offices of the Commission).
GDEN Corporation
May 4, 1995
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
1. Directors and Executive Officers of Parent. The name,
business address, present principal occupation or employment and five-year
employment history of each director and executive officer of Parent are set
forth below. Unless otherwise indicated below, the address of each
director and officer is c/o Imperial Chemical House, Millbank, London SW1P
3JF. Unless otherwise indicated, each occupation set forth opposite an
individual's name refers to employment with Parent. All directors and
officers listed below are citizens of the United Kingdom, except for Ms.
Schneider-Lenne who is a citizen of Germany. Directors are identified by
an asterisk.
Present Principal Occupation or
Employment and Five-Year
Name Employment History
---- --------------------------------
Sir Ronald Hampel* Chairman since April 1995, Deputy
Chairman and Chief Executive from June
1993 to April 1995, Chief Operating Officer
from October 1991 to May 1993, Director
from July 1985 to September 1991.
C. Miller Smith* Chief Executive since April 1995, Executive
Director from October 1994 to March 1995;
Executive of Unilever Foods from 1993 to
September 1994; Financial Director of
Unilever PLC from 1989 to 1993.
Michael E. Brogden* Executive Director since May 1995; Chief
Executive Officer of ICI Chemicals &
Polymers Ltd., a subsidiary of Parent, from
May 1993 to April 1995, Director from
March 1989 to May 1993.
Robert J. Margetts* Executive Director since September 1992;
Chairman and Chief Executive Officer of
Tioxide Group Limited, a subsidiary of
Parent, from January 1991 to August 31,
1992; General Manager of Personnel of
Parent from March 1989 to December 1990.
Alan G. Spall* Finance Director since January 1994,
General Manager of Finance from March
1992 to December 1993; Director of ICI
Specialties, a business unit of Parent, from
January 1991 to February 1992; Director of
ICI Colours & Fine Chemicals, a business
unit of Parent, from August 1984 to
December 1990.
Victor O. White Company Secretary and Solicitor since
January 1992; Company Solicitor from 1980
to December 1991.
Francis R. Hurn* Non-Executive Director since October 1993;
Chairman and Chief Executive of Smiths
Industries plc since November 1991, Chief
Executive from August 1981 to October
1991.
Sir Antony Pilkington* Non-Executive Director since March 1991;
Chairman of the Board of Pilkington plc since
1980.
Ellen R. Schneider-Lenne* Non-Executive Director since March 1991;
Managing Director of Deutsche Bank AG
since 1990.
George Simpson* Non-Executive Director since January 1995;
Chief Executive of Lucas Industries plc since
April 1994; Deputy Chief Executive of British
Aerospace from 1992 to March 1994;
Chairman and Chief Executive of Rover
Group, a subsidiary of British Aerospace,
from 1991 to 1992; Managing Director of
Rover Group from 1988 to 1990.
2. Directors and Executive Officers of Purchaser. The name,
age as of the date hereof, business address, present principal occupation
or employment and five-year employment history of each director and
executive officer of Purchaser and certain other information are set forth
below. The address of each director and officer is c/o ICI American
Holdings Inc., 3411 Silverside Road, P.O. Box 15391, Wilmington, DE 19850.
All directors and officers listed below are citizens of the United States,
except for Mr. Thompson who is a citizen of the United Kingdom. Directors
are identified by an asterisk.
Present Principal Occupation or Employment
Name and Five-Year Employment History
---- ------------------------------------------
John K. Thompson*,54 Chairman of the Board and President; Chief
Planner of ICI Paints, a division of Parent,
since February 1987.
Stanley A. Lockitski*, 47 Vice President and Secretary; Director of
The Glidden Company (and its predecessor
company), a subsidiary of Parent ("Glidden"),
since November 1986, Vice President, General
Counsel and Secretary since July 1986.
Norman Schueftan*, 42 Vice President, Finance and Treasurer;
Treasurer and Tax Director of ICI Americas
Inc., a subsidiary of Parent ("ICI Americas"),
since December 1992, Assistant Taxation
Controller (of predecessor company) from
February 1990 to November 1992.
3. ICI Designees. In addition to Mr. Thompson, Mr.
Lockitski and Mr. Schueftan, the Parent may designate the following
individuals to the Board of Directors of the Company. See Section 10.
Such individual's name, age as of the date hereof, business address,
present principal occupation or employment and five-year employment history
are set forth below. The address of each of the following ICI Designees is
The Glidden Company, 925 Euclid Avenue, Cleveland, OH 44115. All of the
ICI Designees listed below are citizens of the United States.
Present Principal Occupation or Employment
Name and Five-Year Employment History
---- -------------------------------------------
John R. Danzeisen, 47 President of Glidden since April 1991;
Finance Director of ICI Paints from
January 1987 to March 1991;
Chairman of the Board of
Directors of ICI Americas.
William J. Thornton, 55 Director of Glidden since November 1986,
Vice President - Finance since
July 1986.
Thomas C. Osborne, 44 Executive Vice President of Glidden since
January 1994, Vice President - Branch
Operations from April 1992 to January 1994,
Vice President - Planning and Acquisitions
from August 1989 to April 1992.
SCHEDULE II
CERTAIN INFORMATION REQUIRED
TO BE GIVEN TO SHAREHOLDERS
PURSUANT TO NEW YORK LAW
Purchaser was incorporated on April 28, 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, Purchaser has
not engaged in any significant community activities nor has 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, Purchaser has no employees. Accordingly, 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.
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 herein, 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. Purchaser intends to review the
Company's policies with respect to community activities, charitable,
cultural, educational and civic contributions and employment practices.
Parent has agreed that for a period of not less than six months following
the Merger, the Surviving Corporation will provide benefits to employees of
the Company and its subsidiaries that are no less favorable in the
aggregate than certain employee benefits currently provided by the Company.
Parent was organized in 1926. While Parent does not do business in
the United States, the majority of the employees of Parent's U.S.
subsidiaries are eligible to participate in a defined benefit pension plan
and an Internal Revenue Code Section 401(k) defined contribution plan
maintained by the employing subsidiary. Benefits under said plans vary by
subsidiary and location. Some but not all business units of Parent's U.S.
subsidiaries share profits through bonus plans and other arrangements.
Parent believes that its and its subsidiaries' labor relations are
generally good. Parent and its subsidiaries are subject to a variety of
labor-related regulations. Parent and its subsidiaries maintain compliance
policies and programs with respect to these regulations. The current U.S.
subsidiaries of Parent maintain labor records, to the extent required by
law, and have not in the last five years been found by a court of competent
jurisdiction to be in violation of the criminal provisions of the National
Labor Relations Act, the Occupational Safety and Health Act of 1970, the
Fair Labor Standards Act, or the Employee Retirement Income Security Act of
1974, as amended.
A majority of the business units of Parent's subsidiaries either
provide educational assistance programs within the meaning of section 127
of the Internal Revenue Code or reimburse employees for job related
courses. Each business unit of Parent's subsidiaries maintains its own
relocation policy which may vary from the policies of the other business
units. Parent and its subsidiaries support a variety of charitable causes,
particularly in the communities in which they operate.
Except as set forth in this Schedule II, all information regarding
Parent, 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.
Facsimile copies of the Letter of Transmittal will be accepted. The
Letter of Transmittal and certificates for Shares and any other required
documents should be sent to the Depositary at one of the addresses set
forth below:
The Depositary for the Offer is:
Morgan Guaranty Trust Company of New York
(For Information Call Collect 617-774-4237)
By Mail: By Overnight Courier: By Hand:
Attn: Corporate Attn: Corporate State Street Bank &
Reorganization Reorganization Trust Company
P.O. Box 8216 2 Heritage Drive 61 Broadway - Concourse Level
Boston, MA 02266-8216 N. Quincy, MA 02171 New York, NY 10006
By Facsimile:
(617) 774-4519
Questions or requests for assistance or additional copies of this
Offer to Purchase and the Letter of Transmittal may be directed to the
Information Agent or the Dealer Managers at their respective addresses and
telephone numbers set forth below. Shareholders may also contact their
broker, dealer, commercial bank or trust company for assistance concerning
the Offer.
The Information Agent for the Offer is:
MacKenzie Partners, Inc.
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
(800) 322-2885 (toll free)
The Dealer Managers for the Offer are:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
(212) 902-1000 (call collect)
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
of
Grow Group, Inc.
Pursuant to the Offer to Purchase
dated May 4, 1995
of
GDEN Corporation
an indirect wholly owned subsidiary of
Imperial Chemical Industries PLC
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME,
ON THURSDAY, JUNE 1, 1995, UNLESS THE OFFER IS EXTENDED.
To: MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Depositary
By Mail: By Overnight Courier: By Hand:
Attn: Corporate Attn: Corporate State Street Bank
Reorganization Reorganization & Trust Company
P.O. Box 8216 2 Heritage Drive 61 Broadway - Concourse Level
Boston, MA 02266-8216 N. Quincy, MA 02171 New York, NY 10006
By Facsimile:
(617) 774-4519
Delivery of this instrument to an address other than as set forth above or
transmission of instructions to a facsimile number other than the ones listed
above will not constitute a valid delivery.
This Letter of Transmittal is to be used if certificates are to be
forwarded herewith or, unless an Agent's Message (as defined in the Offer to
Purchase) is utilized, if delivery of Shares (as defined below) is to be made
by book-entry transfer to the Depositary's account at The Depository Trust
Company, Midwest Securities Trust Company or Philadelphia Depository Trust
Company (hereinafter collectively referred to as the "Book-Entry Transfer
Facilities") pursuant to the procedures set forth in Section 3 of the Offer to
Purchase.
Shareholders who cannot deliver their Shares and all other documents
required hereby to the Depositary by the Expiration Date (as defined in the
Offer to Purchase) must tender their Shares pursuant to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. See
Instruction 2.
DESCRIPTION OF SHARES TENDERED
===============================================================================
Name(s) and Address(es) Shares Tendered
of Registered Holder(s) (Attach additional
(Please fill in, if blank) list if necessary)
- -------------------------------------------------------------------------------
Total Number*
of Shares Number of
Certificate Represented by Shares
Number(s)** Certificate(s)** Tendered***
----------------------------------------------------
Total Shares
- -------------------------------------------------------------------------------
* Include number of Shares (including fractional Shares) held in dividend
reinvestment plan to be tendered.
** Need not be completed by shareholders tendering by book-entry transfer.
*** Unless otherwise indicated, it will be assumed that all Shares
represented by any certificates delivered to the Depositary are being
tendered. See Instruction 4.
===============================================================================
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
TO THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution.............................................
Account No..............................................................at
[ ] The Depository Trust Company
[ ] Midwest Securities Trust Company
[ ] Philadelphia Depository Trust Company
Transaction Code No.......................................................
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Tendering Shareholder(s).......................................
Date of Execution of Notice of Guaranteed Delivery........................
Name of Institution which Guaranteed Delivery.............................
If delivery is by book-entry transfer:....................................
Name of Tendering Institution............................................
Account No..............................................................at
[ ] The Depository Trust Company
[ ] Midwest Securities Trust Company
[ ] Philadelphia Depository Trust Company
Transaction Code No........................................................
____________________________
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to GDEN Corporation, a New York
corporation (the "Purchaser") and an indirect wholly owned subsidiary of
Imperial Chemical Industries PLC, a company organized under the laws of
England ("Parent"), the above-described shares of Common Stock, $.10 par
value (the "Common Stock"), of Grow Group, Inc., a New York corporation
(the "Company"), and the associated stock purchase rights (the "Rights",
and together with the Common Stock, the "Shares") issued pursuant to the
Amended and Restated Rights Agreement dated as of August 7, 1992, as
amended on April 30, 1995, between the Company and the Bank of New York, as
Rights Agent, pursuant to Purchaser's offer to purchase all outstanding
Shares at a price of $18.10 per Share, net to the seller in cash, subject
to any amounts required to be withheld under applicable federal, state,
local or foreign income tax regulations, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated May 4, 1995, receipt of
which is hereby acknowledged, and in this Letter of Transmittal (which
together constitute the "Offer"). Purchaser reserves the right to transfer
or assign, in whole or from time to time in part, to one or more of its
direct or indirect wholly owned subsidiaries, the right to purchase Shares
tendered pursuant to the Offer.
Upon the terms and subject to the terms and conditions of the
Offer and effective upon acceptance for payment of and payment for the
Shares tendered herewith, the undersigned hereby sells, assigns and
transfers to or upon the order of Purchaser all right, title and interest
in and to all the Shares that are being tendered hereby (and any and all
other Shares or other securities issued or issuable in respect thereof on
or after April 30, 1995) and appoints the Depositary the true and lawful
agent and attorney-in-fact of the undersigned with respect to such Shares
(and all such other Shares or securities), with full power of substitution
(such power of attorney being deemed to be an irrevocable power coupled
with an interest), to (a) deliver certificates for such Shares (and all
such other Shares or securities), or transfer ownership of such Shares (and
all such other Shares or securities) on the account books maintained by any
of the Book-Entry Transfer Facilities, together, in any such case, with all
accompanying evidences of transfer and authenticity, to or upon the order
of Purchaser, (b) present such Shares (and all such other Shares or
securities) for transfer on the books of the Company and (c) receive all
benefits and otherwise exercise all rights of beneficial ownership of such
Shares (and all such other Shares or securities), all in accordance with
the terms of the Offer.
The undersigned hereby irrevocably appoints John K. Thompson,
Stanley A. Lockitski and Norman Schueftan and each of them, the attorneys
and proxies of the undersigned, each with full power of substitution, to
exercise all voting and other rights of the undersigned in such manner as
each such attorney and proxy or his substitute shall in his sole discretion
deem proper, with respect to all of the Shares tendered hereby which have
been accepted for payment by Purchaser prior to the time of any vote or
other action (and any and all other Shares or other securities issued or
issuable in respect thereof on or after April 30, 1995), at any meeting of
shareholders of the Company (whether annual or special and whether or not
an adjourned meeting), by written consent or otherwise. This proxy is
irrevocable and is granted in consideration of, and is effective upon, the
acceptance for payment of such Shares by Purchaser in accordance with the
terms of the Offer. Such acceptance for payment shall revoke any other
proxy or written consent granted by the undersigned at any time with respect
to such Shares (and all such other Shares or securities), and no subsequent
proxies will be given or written consents will be executed by the
undersigned (and if given or executed, will not be deemed to be effective).
The undersigned hereby represents and warrants that the
undersigned has full power and authority to tender, sell, assign and
transfer the Shares tendered hereby (and any and all other Shares or other
securities issued or issuable in respect thereof on or after April 30,
1995) and that when the same are accepted for payment by Purchaser,
Purchaser will acquire good and unencumbered title thereto, free and clear
of all liens, restrictions, charges and encumbrances and not subject to any
adverse claims. The undersigned will, upon request, execute and deliver
any additional documents deemed by the Depositary or Purchaser to be
necessary or desirable to complete the sale, assignment and transfer of the
Shares tendered hereby (and all such other Shares or securities).
All authority herein conferred or agreed to be conferred shall
survive the death or incapacity of the undersigned, and any obligation of
the undersigned hereunder shall be binding upon the heirs, personal
representatives, successors and assigns of the undersigned. Except as
stated in the Offer, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to
any one of the procedures described in Section 3 of the Offer to Purchase
and in the instructions hereto will constitute an agreement between the
undersigned and Purchaser upon the terms and subject to the conditions of
the Offer.
Unless otherwise indicated under "Special Payment Instructions",
please issue the check for the purchase price of any Shares purchased, and
return any Shares not tendered or not purchased, in the name(s) of the
undersigned (and, in the case of Shares tendered by book-entry transfer, by
credit to the account at the Book-Entry Transfer Facility designated
above). Similarly, unless otherwise indicated under "Special Delivery
Instructions", please mail the check for the purchase price of any Shares
purchased and any certificates for Shares not tendered or not purchased
(and accompanying documents, as appropriate) to the undersigned at the
address shown below the undersigned's signature(s). In the event that both
"Special Payment Instructions" and "Special Delivery Instructions" are
completed, please issue the check for the purchase price of any Shares
purchased and return any Shares not tendered or not purchased in the
name(s) of, and mail said check and any certificates to, the person(s) so
indicated. The undersigned recognizes that Purchaser has no obligation,
pursuant to the "Special Payment Instructions", to transfer any Shares from
the name of the registered holder(s) thereof if Purchaser does not accept
for payment any of the Shares so tendered.
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 5, 6 and 7) (See Instructions 5 and 7)
To be completed ONLY if the check To be completed ONLY if the check for
for the purchase price of Shares the purchase price of Shares purchased
purchased (less the amount of any (less the amount of any federal income
federal income and backup withholding and backup withholding tax required to
tax required to be withheld) or be withheld) or certificates for Shares
certificates for Shares not tendered not tendered or not purchased are to be
or not purchased are to be issued in mailed to someone other than the
the name of someone other than the undersigned or to the undersigned at
undersigned. an address other than that shown below
the undersigned's signature(s)
Mail [ ] check
[ ] certificate(s) to:
Mail [ ] check
Name............................... [ ] certificate(s) to:
(Please Print)
Address............................ Name...................................
(Please Print)
..................................
(Zip Code) Address................................
.................................. .......................................
(Taxpayer Identification No.) (Zip Code)
SIGN HERE
(Please complete Substitute Form W-9 below)
..................................................
..................................................
Signature(s) of Owner(s)
Dated......................................., 1995
Name(s)...........................................
(Please Print)
..................................................
Capacity (full title).............................
Address...........................................
..................................................
(Include Zip Code)
Area Code and
Telephone Number..................................
(Must be signed by registered holder(s)
exactly as name(s) appear(s) on stock
certificate(s) or on a security position listing
or by person(s) authorized to become
registered holder(s) by certificates and
documents transmitted herewith. If signature
is by a trustee, executor, administrator,
guardian, attorney-in-fact, agent, officer of a
corporation or other person acting in a
fiduciary or representative capacity, please
set forth full title and see Instruction 5.)
Guarantee of Signature(s)
(If required; see Instructions 1 and 5)
Name of Firm......................................
Authorized Signature..............................
Dated.................... , 1995
- ------------------------------------------------------------------------------
SUBSTITUTE Part I Taxpayer Part II For
FORM W-9 Identification No. -- Payees
For All Accounts Exempt from
Backup
Department of Enter your taxpayer Withholding
the Treasury identification number (see
Internal Revenue in the appropriate enclosed
Service box. For most Guidelines)
individuals -----------------
Payer's Request and sole proprietors, Social Security
for Taxpayer this is your social Number
Identification No. number. For other -----------------
entities, it is your OR
Employer Identification
Number. If you do not
have a number. see How
to Obtain a TIN in the
enclosed Guidelines.
Note: If the account is ---------------
in more than one name, Employer
see chart on page 2 of Identification
the enclosed Guidelines Number
to determine what ---------------
number to enter.
- ------------------------------------------------------------------------------
Certification. -- Under penalties of perjury, I certify that:
- ------------------------------------------------------------------------------
(1) The number shown on this form is my correct Taxpayer Identification
Number (or I am waiting for a number to be issued to me), and either
(a) 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 (b) I intend to
mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number within sixty
(60) days, 31% of all reportable payments made to me thereafter will
be withheld until I provide a number;
(2) I am not subject to backup withholding either because (a) I am exempt
from backup withholding, or (b) I have not been notified by the
Internal Revenue Service ("IRS") that I am subject to backup
withholding as a result of a failure to report all interest or
dividends, or (c) the IRS has notified me that I am no longer subject
to backup withholding; and
(3) Any other information provided on this form is true, correct and
complete. 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 underreporting interest or dividends on your
tax return and you have not received a notice from the IRS advising
you that backup withholding has terminated.
- ------------------------------------------------------------------------------
SIGNATURE...........................DATE............................... ,1995
- ------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm which is
a member of a recognized Medallion Program approved by The Securities Transfer
Associations, Inc. (an "Eligible Institution"). Signatures on this Letter of
Transmittal need not be guaranteed (a) if this Letter of Transmittal is signed
by the registered holder(s) of the Shares (which term, for purposes of this
document, shall include any participant in one of the Book-Entry Transfer
Facilities whose name appears on a security position listing as the owner of
Shares) tendered herewith and such holder(s) have not completed the
instruction entitled "Special Payment Instructions" on this Letter of
Transmittal or (b) if such Shares are tendered for the account of an Eligible
Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Shares. This Letter of
Transmittal is to be used either if certificates are to be forwarded herewith
or, unless an Agent's Message is utilized, if delivery of Shares is to be made
by book-entry transfer pursuant to the procedures set forth in Section 3 of
the Offer to Purchase. Certificates for all physically delivered Shares, or a
confirmation of a book-entry transfer into the Depositary's account at one of
the Book-Entry Transfer Facilities of all Shares delivered electronically, as
well as a properly completed and duly executed Letter of Transmittal (or
facsimile thereof or, in the case of a book-entry transfer, an Agent's
Message) and any other documents required by this Letter of Transmittal, must
be received by the Depositary at one of its addresses set forth on the front
page of this Letter of Transmittal by the Expiration Date. Shareholders who
cannot deliver their Shares and all other required documents to the Depositary
by the Expiration Date must tender their Shares pursuant to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant
to such procedure: (a) such tender must be made by or through an Eligible
Institution, (b) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by Purchaser must be received by
the Depositary by the Expiration Date and (c) the certificates for all
physically delivered Shares, or a confirmation of a book-entry transfer into
the Depositary's account at one of the Book-Entry Transfer Facilities of all
Shares delivered electronically, as well as a properly completed and duly
executed Letter of Transmittal (or facsimile thereof 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. trading days after the date of execution of such
Notice of Guaranteed Delivery, all as provided in Section 3 of the Offer to
Purchase.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
OPTION AND RISK OF THE TENDERING SHAREHOLDER. IF CERTIFICATES FOR SHARES ARE
SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED,
IS RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. By executing this Letter of Transmittal
(or facsimile thereof), the tendering shareholder waives any right to receive
any notice of the acceptance for payment of the Shares.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. Partial Tenders (not applicable to shareholders who tender by
book-entry transfer). If fewer than all the Shares represented by any
certificate delivered to the Depositary are to be tendered, fill in the number
of Shares which are to be tendered in the box entitled "Number of Shares
Tendered". In such case, a new certificate for the remainder of the Shares
represented by the old certificate will be sent to the person(s) signing this
Letter of Transmittal, unless otherwise provided in the appropriate box on
this Letter of Transmittal, as promptly as practicable following the
expiration or termination of the Offer. All Shares represented by
certificates delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written
on the face of the certificates without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby is held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock
powers are required unless payment of the purchase price is to be made, or
Shares not tendered or not purchased are to be returned, in the name of any
person other than the registered holder(s). Signatures on any such
certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the
certificates for such Shares. Signature(s) on any such certificates or stock
powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal or any certificate or stock power is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of
a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Purchaser of the authority of such person so to act must be
submitted.
6. Stock Transfer Taxes. Purchaser will pay any stock transfer taxes with
respect to the sale and transfer of any Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price is to be made to, or
Shares not tendered or not purchased are to be returned in the name of, any
person other than the registered holder(s), or if a transfer tax is imposed
for any reason other than the sale or transfer of Shares to Purchaser pursuant
to the Offer, then the amount of any stock transfer taxes (whether imposed on
the registered holder(s), such other person or otherwise) will be deducted
from the purchase price unless satisfactory evidence of the payment of such
taxes, or exemption therefrom, is submitted herewith.
7. Special Payment and Delivery Instructions. If the check for the
purchase price of any Shares purchased is to be issued, or any Shares not
tendered or not purchased are to be returned, in the name of a person other
than the person(s) signing this Letter of Transmittal or if the check or any
certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to the
person(s) signing this Letter of Transmittal at an address other than that
shown above, the appropriate boxes on this Letter of Transmittal should be
completed. Shareholders tendering Shares by book-entry transfer may request
that Shares not purchased be credited to such account at any of the Book-Entry
Transfer Facilities as such shareholder may designate under "Special Payment
Instructions". If no such instructions are given, any such Shares not
purchased will be returned by crediting the account at the Book-Entry Transfer
Facilities designated above.
8. Substitute Form W-9. Under the federal income tax laws, the Depositary
will be required to withhold 31% of the amount of any payments made to certain
shareholders pursuant to the Offer. In order to avoid such backup
withholding, each tendering shareholder, and, if applicable, each other payee,
must provide the Depositary with such shareholder's or payee's correct
taxpayer identification number and certify that such shareholder or payee is
not subject to such backup withholding by completing the Substitute Form W-9
set forth above. In general, if a shareholder or payee is an individual, the
taxpayer identification number is the Social Security number of such
individual. If the Depositary is not provided with the correct taxpayer
identification number, the shareholder or payee may be subject to a $50
penalty imposed by the Internal Revenue Service. Certain shareholders or
payees (including, among others, all corporations and certain foreign
individuals) are not subject to these backup withholding and reporting
requirements. In order to satisfy the Depositary that a foreign individual
qualifies as an exempt recipient, such shareholder or payee must submit a
statement, signed under penalties of perjury, attesting to that individual's
exempt status. Such statements can be obtained from the Depositary. For
further information concerning backup withholding and instructions for
completing the Substitute Form W-9 (including how to obtain a taxpayer
identification number if you do not have one and how to complete the
Substitute Form W-9 if Shares are held in more than one name), consult the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
Failure to complete the Substitute Form W-9 will not, by itself, cause
Shares to be deemed invalidly tendered, but may require the Depositary to
withhold 31% of the amount of any payments made pursuant to the Offer. Backup
withholding is not an additional federal income tax. Rather, the federal
income tax liability of a person 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 provided that the required information is
furnished to the Internal Revenue Service. NOTE: FAILURE TO COMPLETE AND
RETURN THE SUBSTITUTE FORM W-9 MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY
PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE
FORM W-9 FOR ADDITIONAL DETAILS.
9. Requests for Assistance or Additional Copies. Requests for assistance
or additional copies of the Offer to Purchase and this Letter of Transmittal
may be obtained from the Information Agent or the Dealer Managers at their
respective addresses or telephone numbers set forth below.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
(DO NOT WRITE IN SPACES BELOW)
Date Received______________ Accepted By_____________ Checked By______________
- ---------------------------------------------------------------------------------------------------------------------------
Shares Shares Shares Check Amount Shares Certificate Block
Surrendered Tendered Accepted No. of Check Returned No. No.
- ---------------------- ---------- ---------- ---------- ---------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Gr______
Net_____
Delivery Prepared By_________
Checked By_________
Date________________
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
The Information Agent is:
Mackenzie Partners, Inc.
156 Fifth Avenue
New York, New York 10010
(212) 929-5300 (call collect)
(800) 322-2885 (toll free)
The Dealer Managers are:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
(212) 902-1000 (Call collect)
GUIDELINES FOR CERTIFICATE OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give to the
Depositary. Social Security numbers have nine digits separated by two
hyphens: i.e. 000-00-0000. Employer identification numbers have nine digits
separated by only one hyphen: i.e. 00-0000000. The table below will help
determine the number to give the Depositary.
==============================================================================
Give the name and
SOCIAL SECURITY
For this type of account: number of:
==============================================================================
1. Individual The individual
2. Two or more individuals The actual owner of the account or,
(joint account) if combined funds, the first
individual on the account(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. a. The usual revocable The grantor-trustee(1)
savings trust (grantor
is also trustee)
b. The so-called trust The actual owner(1)
account that is not a
legal or valid trust
under State law
5. Sole proprietorship The owner(4)
6. Account in the name of The ward, minor or incompetent
guardian or committee for person(5)
a designated ward, minor or
incompetent person
Give the name and
EMPLOYER IDENTIFICATION
For this type of account: number of:
7. A valid trust, estate or Legal entity (do not furnish the
pension trust identification number of the personal
representative or trustee unless the
legal entity itself is not designated
in the account title)(3)
8. Corporation The corporation
9. Association, club, religious, The organization
charitable, educational or
other tax-exempt organization
10. Partnership The partnership
11. A broker or registered nominee The broker or nominee
12. Account with the Department The public entity
of Agriculture in the name of a
public entity (such as a State
or local government, school
district, or prison) that
receives agricultural
program payments
==============================================================================
(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) List first and circle the name of the legal trust, estate or pension
trust.
(4) Show the name of the owner.
(5) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
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.
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.
Shareholders Exempt from Backup Withholding
Shareholders specifically exempted from backup withholding on ALL payments
include the following:
bullet A corporation.
bullet A financial institution.
bullet An organization exempt from tax under section 501(a), or an individual
retirement plan, or a custodial account under section 403(b)(7).
bullet The United States or any agency or instrumentality thereof.
bullet A State, the District of Columbia, a possession of the United States,
or any subdivision or instrumentality thereof.
bullet A foreign government, a political subdivision of a foreign government,
or any agency or instrumentality thereof.
bullet An international organization or any agency or instrumentality thereof.
bullet A dealer in securities or commodities registered in the United States
or a possession of the United States.
bullet A real estate investment trust.
bullet A common trust fund operated by a bank under section 584(a).
bullet An exempt charitable remainder trust, or a non-exempt trust described
in section 4947(a)(1).
bullet An entity registered at all times under the Investment Company Act of
1940.
bullet A foreign central bank of issue.
Payment of dividends and patronage dividends not generally subject to
backup withholding include the following:
bullet Payments to nonresident aliens subject to withholding under section 1441.
bullet Payments to partnerships not engaged in a trade or business in the
United States and which have at least one nonresident partner.
bullet Payments of patronage dividends where the amount received is not paid
in money.
bullet Payments made by certain foreign organizations.
bullet Payments made to a nominee.
Exempt shareholders described above should file Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE DEPOSITARY, FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM,
SIGN AND DATE THE FORM AND RETURN IT TO THE DEPOSITARY.
Payments that are not subject to information reporting are also not subject to
backup withholding. For details, see the regulations under sections 6041,
6041(A)(a), 6042, 6044, 6045, 6049, 6050(A) and 6050(N).
Privacy Act Notice
Section 6109 requires most recipients of dividends, interest, or other
payments to give taxpayer identification numbers to the Depositary who must
report the payments to IRS. The IRS uses the numbers for identification
purposes and to help verify the accuracy of your tax return. The Depositary
must be given the numbers whether or not shareholders are required to file tax
returns. The Depositary must generally withhold 31% of taxable interest,
dividends, and certain other payments to a shareholder who does not furnish a
taxpayer identification number to the Depositary. 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 the Depositary, 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.
NOTICE OF GUARANTEED DELIVERY
This form, or a form substantially equivalent to this form, must be used
to accept the Offer (as defined below) if the shares of Common Stock of Grow
Group, Inc. and all other documents required by the Letter of Transmittal
cannot be delivered to the Depositary by the expiration of the Offer. Such
form may be delivered by hand or facsimile transmission, telex or mail to the
Depositary. See Section 3 of the Offer to Purchase.
To: Morgan Guaranty Trust Company of New York, as Depositary
By Hand: By Overnight Courier: By Mail:
State Street Bank Attn: Corporate Attn: Corporate
& Trust Company Reorganization Reorganization
61 Broadway - Heritage Drive P.O. Box 8216
Concourse Level 2 N. Quincy, MA 02171 Boston, MA 02266-8216
New York, NY 10006
By Facsimile:
(617) 774-4519
Ladies and Gentlemen:
The undersigned hereby tenders to GDEN Corporation, a New York
corporation (the "Purchaser") and an indirect wholly owned subsidiary of
Imperial Chemical Industries PLC, upon the terms and subject to the conditions
set forth in the Offer to Purchase dated May 4, 1995 and the related Letter
of Transmittal (which together constitute the "Offer"), receipt of which is
hereby acknowledged, ____________ shares of Common Stock, $.10 par value per
share (the "Shares"), of Grow Group, Inc., a New York corporation, pursuant to
the guaranteed delivery procedure set forth in Section 3 of the Offer to
Purchase.
Certificate Nos. (if available): SIGN HERE
(Signature(s))
(Name(s)) (Please Print)
If shares will be tendered by book-entry
transfer:
Name of Tendering (Address)
Institution
Account No. at (Zip Code)
[ ]The Depository Trust Company
[ ]Midwest Securities Trust Company (Area Code and Telephone No.)
[ ]Philadelphia Depository Trust Company
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm which is a member of a registered national
securities exchange or the National Association of Securities Dealers, Inc.,
or a commercial bank or trust company having an office or correspondent in the
United States, guarantees (a) that the above named person(s) "own(s)" the
Shares tendered hereby within the meaning of Rule 10b-4 under the Securities
Exchange Act of 1934, (b) that such tender of Shares complies with Rule 10b-4
and (c) to deliver to the Depositary the Shares tendered hereby, together with
a properly completed and duly executed Letter(s) of Transmittal (or
facsimile(s) thereof) 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. trading days of the
date hereof.
____________________________________________
(Name of Firm)
____________________________________________
(Authorized Signature)
____________________________________________
(Name)
____________________________________________
(Address)
____________________________________________
(Zip Code)
____________________________________________
(Area Code and Telephone No.)
Dated: __________________, 1995
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Grow Group, Inc.
at
$18.10 Net Per Share
by
GDEN Corporation
an indirect wholly owned subsidiary of
Imperial Chemical Industries PLC
May 4, 1995
To Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees:
We have been appointed by GDEN Corporation, a New York corporation
(the "Purchaser") and an indirect wholly owned subsidiary of Imperial Chemical
Industries PLC, to act as Dealer Managers in connection with its offer to
purchase all outstanding shares of Common Stock, $.10 par value (the
"Shares"), of Grow Group, Inc., a New York corporation (the "Company"), at
$18.10 per Share, net to the seller in cash, subject to any amounts required
to be withheld under applicable federal, state, local or foreign income tax
regulations, upon the terms and subject to the conditions set forth in
Purchaser's Offer to Purchase dated May 4, 1995 and the related Letter of
Transmittal (which together constitute the "Offer").
For your information and for forwarding to your clients for whom you
hold Shares registered in your name or in the name of your nominee, we are
enclosing the following documents:
1. Offer to Purchase dated May 4, 1995;
2. Letter of Transmittal for your use and for the information of
your clients, together with Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 providing
information relating to backup federal income tax withholding;
3. Notice of Guaranteed Delivery to be used to accept the Offer if
the Shares and all other required documents cannot be delivered
to the Depositary by the Expiration Date (as defined in the
Offer to Purchase);
4. A 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 such
clients' instructions with regard to the Offer; and
5. Return envelope addressed to Morgan Guaranty Trust Company of
New York, Attn: Corporate Reorganization, P.O. Box 8216,
Boston, MA 02266-8216, the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON THURSDAY, JUNE 1, 1995, UNLESS THE OFFER IS EXTENDED.
Purchaser will not pay any fees or commissions to any broker or
dealer or other person (other than the Dealer Managers, the Information Agent
or the Depositary as described in the Offer to Purchase) for soliciting
tenders of Shares pursuant to the Offer. Purchaser will, however, upon
request, reimburse brokers, dealers, commercial banks and trust companies for
reasonable and necessary costs and expenses incurred by them in forwarding
materials to their customers. Purchaser will pay all stock transfer taxes
applicable to its purchase of Shares pursuant to the Offer, subject to
Instruction 6 of the Letter of Transmittal.
In order to accept the Offer 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, and any other required documents, should be sent to the
Depositary by 12:00 midnight, New York City time, on Thursday, June 1, 1995.
Any inquiries you may have with respect to the Offer should be
addressed to, and additional copies of the enclosed materials may be obtained
from, the Information Agent or the undersigned at the addresses and telephone
numbers set forth on the back cover of the Offer to Purchase.
Very truly yours,
GOLDMAN, SACHS & CO.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL
CONSTITUTE YOU THE AGENT OF GDEN CORPORATION, IMPERIAL CHEMICAL INDUSTRIES
PLC, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE DEPOSITARY, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS
ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Grow Group, Inc.
at
$18.10 Net Per Share
by
GDEN Corporation
an indirect wholly owned subsidiary of
Imperial Chemical Industries PLC
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated May
4, 1995 and the related Letter of Transmittal (which together constitute the
"Offer") in connection with the offer by GDEN Corporation, a New York
corporation (the "Purchaser") and an indirect wholly owned subsidiary of
Imperial Chemical Industries PLC, to purchase for cash all outstanding shares
of Common Stock, $.10 par value (the "Shares"), of Grow Group, Inc., a New
York corporation (the "Company"). We are the holder of record of Shares held
for your account. A tender of such Shares can be made only by us as the holder
of record and pursuant to your instructions. The Letter of Transmittal is
furnished to you for your information only and cannot be used by you to tender
Shares held by us for your account.
We request instructions as to whether you wish us to tender any or
all of the Shares held by us for your account, upon the terms and subject to
the conditions set forth in the Offer to Purchase and the Letter of
Transmittal.
Your attention is invited to the following:
1. The tender price is $18.10 per Share, net to you in cash, subject
to any amounts required to be withheld under applicable federal, state, local
or foreign income tax regulations.
2. The Offer and withdrawal rights expire at 12:00 Midnight, New
York City time, on Thursday, June 1, 1995, unless the Offer is extended.
3. The Offer is conditioned upon, among other things, there being
validly tendered by the Expiration Date (as defined in the Offer) and not
withdrawn a number of Shares which, together with the Corimon Shares (as
defined in the Offer) and any other Shares owned by Purchaser, represents at
least two-thirds of the total number of outstanding Shares on a fully diluted
basis.
4. Any stock transfer taxes applicable to the sale of Shares to
Purchaser pursuant to the Offer will be paid by Purchaser, except as otherwise
provided in Instruction 6 of the Letter of Transmittal.
If you wish to have us tender any or all of your Shares, please so
instruct us by completing, executing, detaching and returning to us the
instruction form on the detachable part hereof. An envelope to return your
instructions to us is enclosed. If you authorize tender of your Shares, all
such Shares will be tendered unless otherwise specified on the detachable part
hereof. Your instructions should be forwarded to us in ample time to permit
us to submit a tender on your behalf by the expiration of the Offer.
The Offer is not being made to, nor will tenders be accepted from or
on behalf of, holders of Shares in any jurisdiction in which the making of the
Offer or acceptance thereof would not be in compliance with the laws of such
jurisdiction.
Payment for Shares purchased pursuant to the Offer will in all cases
be made only after timely receipt by Morgan Guaranty Trust Company of New York
(the "Depositary") of (a) Share Certificates or timely confirmation of the
book-entry transfer of such Shares into the account maintained by the
Depositary at The Depository Trust Company, the Midwest Securities Trust
Company or the Philadelphia Depository Trust Company (collectively, the
"Book-Entry Transfer Facilities"), pursuant to the procedures set forth in
Section 3 of the Offer to Purchase, (b) 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 connection with a book-entry delivery, and (c) any other
documents required by the Letter of Transmittal. Accordingly, payment may not
be made to all tendering shareholders at the same time depending upon when
certificates for or confirmations of book-entry transfer of such Shares into
the Depositary's account at a Book-Entry Transfer Facility are actually
received by the Depositary.
Instructions with Respect to
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Grow Group, Inc.
The undersigned acknowledge(s) receipt of your letter and the
enclosed Offer to Purchase dated May 4, 1995, and the related Letter of
Transmittal, in connection with the offer by GDEN Corporation to purchase all
outstanding shares of Common Stock, $.10 par value per share (the "Shares"),
of Grow Group, Inc.
This will instruct you to tender the number of Shares indicated below
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 the related Letter of
Transmittal.
Number of Shares to be Tendered: SIGN HERE
Shares(1)
Signature(s)
Dated: , 1995
Please print name(s) and
address(es) here
- ----------
(1) Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
ICI AGREES US PAINTS SHARE PURCHASE
Imperial Chemical Industries PLC (ICI) and Grow Group, Inc. (GROW),
headquartered in New York City, have signed a merger agreement for the
purchase of the shares of Grow by ICI.
Grow's Board of Directors unanimously approved the tender offer at $18.10 per
share, and consented to the sale by Corimon, a Venezuelan corporation, of its
25% stake in Grow to ICI for $17.50 per share, valuing the total transaction
at approximately $290 million.
Grow's prime business is the manufacture and sale of architectural paints and
coatings in the United States, representing approximately 80% of Grow's
revenues. Grow's sales for its current fiscal year ending 30 June 1995 are
expected to reach approximately $500 million.
"ICI views the merger as an extremely good fit with its paints business in
North America," says John R. Danzeisen, President of The Glidden Company and
Chief Executive of ICI Paints in North America. "We believe Grow's valued
paint brands and distribution network will complement ours and enhance
customer service to our professional-painter and do-it-yourself customers."
ICI distributes paints through more than 10,000 retail outlets and
approximately 450 company-owned stores in North America.
-END-
May, 1, 1995
This announcement is not an offer to purchase or a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase dated
May 4, 1995 and the related Letter of Transmittal and the Offer is not
being made to, nor will tenders be accepted from or on behalf of,
holders of Shares in any jurisdiction in which the making of the
Offer or acceptance thereof would not be in compliance with
the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Rights)
of
Grow Group, Inc.
at
$18.10 Net per Share
by
GDEN Corporation
an indirect wholly owned subsidiary of
Imperial Chemical Industries PLC
GDEN Corporation, a New York corporation (the "Purchaser") and an indirect
wholly owned subsidiary of Imperial Chemical Industries PLC, a company
organized under the laws of England (the "Parent"), is offering to purchase
all outstanding shares of Common Stock, $.10 par value (the "Common
Stock"), of Grow Group, Inc., a New York corporation (the "Company"), and
the associated stock purchase rights (together with the Common Stock, the
"Shares"), at $18.10 per Share, net to the seller in cash, subject to any
amounts required to be withheld under applicable federal, state, local or
foreign income tax regulations, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated May 4, 1995 (the "Offer
to Purchase") and in the related Letter of Transmittal (which together
constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, JUNE 1, 1995, UNLESS THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the Expiration Date (as defined in the
Offer to Purchase) a number of Shares representing (together with the
Corimon Shares (as defined below) and any other Shares then owned by
Purchaser) at least two-thirds of the total number of Shares outstanding on
a fully diluted basis (the "Minimum Tender Condition"). The purpose of the
Offer is to acquire control of, and the entire equity interest in, the
Company. The Offer is being made pursuant to an Agreement and Plan of
Merger, dated as of April 30, 1995 (the "Merger Agreement"), among the
Company, Parent and Purchaser. The Merger Agreement provides, among other
things, that as soon as practicable after the consummation of the Offer and
satisfaction of, or to the extent permitted under the Merger Agreement,
waiver of all conditions to the Merger, Purchaser will be merged with and
into the Company (the "Merger"), with the Company as the surviving
corporation, whereupon the Company will become an indirect wholly owned
subsidiary of Parent. Thereupon, each outstanding Share (other than Shares
held by Parent, Purchaser or any other subsidiary of Parent and Shares held
by shareholders exercising appraisal rights) will be converted into and
represent the right to receive $18.10 in cash, or any higher price that may
be paid per Share in the Offer, without interest. Simultaneously with
entering into the Merger Agreement, Parent, Purchaser, Corimon, S.A.C.A., a
Venezuelan corporation ("Corimon Parent"), and Corimon Corporation, a
Delaware corporation ("Corimon") and a wholly owned subsidiary of Corimon
Parent, entered into an Option Agreement, dated as of April 30, 1995 (the
"Option Agreement"), pursuant to which, upon the terms and subject to the
conditions set forth therein, Corimon granted to Parent an option (the
"Option") to purchase 4,025,841 Shares beneficially owned by Corimon (the
"Corimon Shares") at a purchase price of $17.50 per Share. The Corimon
Shares represent approximately 25% of the outstanding Shares. The Option
Agreement provides that Purchaser is not entitled to exercise the Option
unless the Corimon Minimum Condition is satisfied, and Corimon cannot waive
this condition without the consent of the Company. The Corimon Minimum
Condition shall have been satisfied only if (i) Purchaser has paid for or
accepted for payment all Shares properly tendered and not withdrawn
pursuant to the Offer and (ii) such Shares plus the Corimon Shares
constitute not less than a majority of the outstanding Shares on a fully
diluted basis. Parent is required to exercise the Option within two
business days of the date that the Corimon Minimum Condition is satisfied.
Corimon has agreed not to tender the Corimon Shares pursuant to the Offer
unless directed to do so by Parent. The Board of Directors of the Company
has unanimously determined that the Offer and the Merger are fair to, and
in the best interest of, the Company's shareholders, has approved the Offer
and the Merger and recommends that the Company's shareholders accept the
Offer and tender their Shares pursuant to the Offer. The Offer is subject
to certain conditions set forth in the Offer to Purchase. If any such
condition is not satisfied, the Purchaser may, subject to certain
limitations set forth in the Merger Agreement and described in the Offer to
Purchase, (i) terminate the Offer and return all tendered Shares to
tendering shareholders, (ii) extend the Offer and, subject to withdrawal
rights as set forth below, retain all such Shares until the expiration of
the Offer as so extended, (iii) waive such condition and, subject to any
requirement to extend the period of time during which the Offer is open,
purchase all Shares validly tendered prior to the Expiration Date and not
withdrawn (provided that Purchaser may not accept Shares for payment
pursuant to the Offer unless the Shares so accepted for payment, together
with the Corimon Shares and any other Shares then owned by Purchaser,
represent at least a majority of the outstanding Shares on a fully diluted
basis) or (iv) delay acceptance for payment or payment for Shares, subject
to applicable law, until satisfaction or waiver of the conditions to the
Offer; provided, however, that no change may be made which changes the form
of consideration to be paid or decreases the price per Share or the number
of Shares sought in the Offer or which imposes conditions to the Offer in
addition to those set forth in the Offer to Purchase. The Purchaser
reserves the right, at any time or from time to time, to extend the period
of time during which the Offer is open by giving oral or written notice of
such extension to Morgan Guaranty Trust Company of New York, the
Depositary. Any such extension will be followed as promptly as practicable
by public announcement thereof. During any such extension, all Shares
previously tendered and not withdrawn will remain subject to the Offer,
subject to applicable withdrawal rights. For purposes of the Offer, the
Purchaser shall be deemed to have accepted for payment tendered Shares
when, as and if the Purchaser gives oral or written notice to the
Depositary of its acceptance of the tenders of such Shares. Payment for
Shares accepted for payment pursuant to the Offer will be made only after
timely receipt by the Depositary of certificates for such Shares (or a
confirmation of a book-entry transfer of such Shares into the Depositary's
account at one of the Book-Entry Transfer Facilities (as defined in the
Offer to Purchase)), a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) and any other required documents.
Tenders of Shares made pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date. Thereafter, such tenders are irrevocable,
except that they may be withdrawn after July 2, 1995 unless theretofore
accepted for payment as provided in the Offer to Purchase. 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 in the 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. 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 (as defined in the Offer to
Purchase)) 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. The
information required to be disclosed by paragraph (e)(1)(vii) of Rule 14d-6
of the General Rules and Regulations under the Securities Exchange Act of
1934 is contained in the Offer to Purchase and is incorporated herein by
reference. The Company is providing its shareholder list and security
position listings for the purpose of disseminating the Offer to holders of
Shares. The Offer to Purchase and the related Letter of Transmittal will
be mailed to record holders of Shares and will be furnished to brokers,
banks and similar persons whose names, or the names of whose nominees,
appear on the shareholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing for
subsequent transmittal to beneficial owners of Shares. The Offer to
Purchase and Letter of Transmittal contain important information which
should be read before any decision is made with respect to the Offer.
Requests for copies of the Offer to Purchase and the related Letter of
Transmittal and other tender offer materials may be directed to the
Information Agent or the Dealer Managers as set forth below, and copies
will be furnished promptly at the Purchaser's expense. No fees or
commissions will be paid to brokers, dealers or other persons (other than
the Information Agent and the Dealer Managers) for soliciting tenders of
Shares pursuant to the Offer.
The Information Agent for the Offer is:
MACKENZIE
PARTNERS, INC.
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
or
Call Toll-Free (800) 322-2885
The Dealer Managers for the Offer are:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
May 4,1995
CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
DATED AS OF
APRIL 30, 1995
AMONG
GROW GROUP, INC.,
IMPERIAL CHEMICAL INDUSTRIES PLC
AND
GDEN CORPORATION
TABLE OF CONTENTS(1)
ARTICLE I
THE OFFER
SECTION 1.01. The Offer................................................ 2
SECTION 1.02. Company Action........................................... 3
SECTION 1.03. Directors................................................ 5
ARTICLE II
THE MERGER
SECTION 2.01. The Merger............................................... 6
SECTION 2.02. Conversion of Shares..................................... 7
SECTION 2.03. Surrender and Payment.................................... 7
SECTION 2.04. Dissenting Shares........................................ 9
SECTION 2.05. Stock Options............................................ 9
SECTION 2.06. Merger Without Meeting of Shareholders................... 10
ARTICLE III
THE SURVIVING CORPORATION
SECTION 3.01. Certificate of Incorporation............................. 10
SECTION 3.02. Bylaws................................................... 10
SECTION 3.03. Directors and Officers................................... 10
(1) The Table of Contents is not a part of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
SECTION 4.01. Corporate Existence and Power............................ 11
SECTION 4.02. Corporate Authorization.................................. 11
SECTION 4.03. Governmental Authorization............................... 11
SECTION 4.04. Non-Contravention........................................ 12
SECTION 4.05. Capitalization........................................... 12
SECTION 4.06. Subsidiaries............................................. 13
SECTION 4.07. Investments.............................................. 14
SECTION 4.08. SEC Filings.............................................. 14
SECTION 4.09. Financial Statements..................................... 15
SECTION 4.10. Disclosure Documents..................................... 15
SECTION 4.11. Absence of Certain Changes............................... 16
SECTION 4.12. No Undisclosed Material Liabilities...................... 17
SECTION 4.13. Litigation............................................... 18
SECTION 4.14. Taxes.................................................... 18
SECTION 4.15. Employee Matters......................................... 20
SECTION 4.16. Labor Matters............................................ 24
SECTION 4.17. Compliance with Laws..................................... 24
SECTION 4.18. Finders' Fees............................................ 24
SECTION 4.19. Environmental Matters.................................... 24
SECTION 4.20. Property................................................. 26
SECTION 4.21. Trademarks............................................... 26
SECTION 4.22. Material Contracts....................................... 27
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF BUYER AND MERGER SUBSIDIARY
SECTION 5.01. Corporate Existence and Power............................ 27
SECTION 5.02. Corporate Authorization.................................. 27
SECTION 5.03. Governmental Authorization............................... 28
SECTION 5.04. Non-Contravention........................................ 28
SECTION 5.05. Disclosure Documents..................................... 28
SECTION 5.06. Finders' Fees............................................ 29
SECTION 5.07. Financing................................................ 29
SECTION 5.08. Share Ownership.......................................... 29
SECTION 5.09. Merger Subsidiary's Operations........................... 29
ARTICLE VI
COVENANTS OF THE COMPANY
SECTION 6.01. Conduct of the Company................................... 30
SECTION 6.02. Stockholder Meeting; Proxy Material...................... 30
SECTION 6.03. Access to Information.................................... 31
SECTION 6.04. Other Offers............................................. 31
SECTION 6.05. Notices of Certain Events................................ 32
SECTION 6.06. Amendment of Rights Agreement............................ 33
SECTION 6.07. Conveyance Taxes......................................... 33
ARTICLE VII
COVENANTS OF BUYER
SECTION 7.01. Obligations of Merger Subsidiary......................... 33
SECTION 7.02. Voting of Shares......................................... 33
SECTION 7.03. Director and Officer Liability........................... 34
ARTICLE VIII
COVENANTS OF BUYER
AND THE COMPANY
SECTION 8.01. Best Efforts............................................. 35
SECTION 8.02. Certain Filings.......................................... 35
SECTION 8.03. Public Announcements..................................... 35
SECTION 8.04. Conveyance Taxes......................................... 35
SECTION 8.05. Further Assurances....................................... 36
SECTION 8.06. Employee Matters......................................... 36
ARTICLE IX
CONDITIONS TO THE MERGER
SECTION 9.01. Conditions to the Obligations of Each Party.............. 38
ARTICLE X
TERMINATION
SECTION 10.01. Termination............................................. 39
SECTION 10.02. Effect of Termination................................... 40
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Notices................................................. 40
SECTION 11.02. Survival of Representations and Warranties.............. 42
SECTION 11.03. Amendments; No Waivers.................................. 42
SECTION 11.04. Expenses................................................ 42
SECTION 11.05. Successors and Assigns.................................. 43
SECTION 11.06. Governing Law........................................... 43
SECTION 11.07. Severability............................................ 43
SECTION 11.08. Third Party Beneficiaries............................... 44
SECTION 11.09. Entire Agreement........................................ 44
SECTION 11.10. Counterparts; Effectiveness............................. 44
SECTION 11.11. Jurisdiction............................................ 44
ANNEX I
Schedule 4.01: Licenses
Schedule 4.03: Governmental Authorization
Schedule 4.04: Non-Contravention
Schedule 4.05: Stock Options
Schedule 4.06: Subsidiaries
Schedule 4.07: Investments
Schedule 4.11: Absence of Certain Changes
Schedule 4.12: Material Liabilities
Schedule 4.13: Litigation
Schedule 4.15: Employee Matters
Schedule 4.16: Labor Matters
Schedule 4.17: Compliance with Laws
Schedule 4.19: Environmental Matters
Schedule 4.21: Trademarks
Schedule 4.22: Material Contracts
Schedule 7.03: Director and Officer Liability
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of April 30, 1995 (this
"Agreement") among Grow Group, Inc., a New York corporation (the "Company"),
Imperial Chemical Industries PLC, a corporation organized under the laws of
England ("Buyer"), and GDEN Corporation, a New York corporation and an
indirect wholly owned subsidiary of Buyer ("Merger Subsidiary").
WHEREAS, the Boards of Directors of Buyer, Merger Subsidiary
and the Company have each determined that it is in the best interests of their
respective shareholders for Buyer to acquire all of the outstanding capital
stock of the Company upon the terms and subject to the conditions set forth
herein; and
WHEREAS, in furtherance of such acquisition, it is proposed
that Buyer shall make a cash tender offer (the "Offer") to acquire all the
issued and outstanding shares of Common Stock, par value $.10 per share, of
the Company (the "Shares") for $18.10 per Share net to the seller in cash,
upon the terms and subject to the conditions of this Agreement and the Offer;
and
WHEREAS, the Board of Directors of the Company has unanimously
approved the making of the Offer and resolved and agreed to recommend that
holders of Shares tender their Shares pursuant to the Offer; and
WHEREAS, also in furtherance of such acquisition, the Boards of
Directors of Buyer, Merger Subsidiary and the Company have each approved the
merger of Merger Subsidiary with and into the Company in accordance with the
Business Corporation Law of the State of New York ("New York Law") following
the consummation of the Offer and upon the terms and subject to the conditions
set forth herein;
WHEREAS, in consideration of the willingness of Buyer and
Merger Subsidiary to enter into this Agreement, Corimon Corporation, a
Delaware corporation ("Corimon Corp.") and Corimon, S.A.C.A., a corporation
organized under the laws of Venezuela ("Corimon"), have entered into a
Stockholders Agreement, dated as of the date hereof, with Buyer and Merger
Subsidiary (the "Corimon Option Agreement"), pursuant to which Corimon Corp.
has granted Buyer an option to purchase 4,025,841 Shares (the "Corimon
Shares"), all upon the terms and subject to the conditions set forth in the
Corimon Option Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, Buyer, Merger Subsidiary and the Company hereby agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01. The Offer. (a) Provided that nothing shall have
occurred that would result in a failure to satisfy any of the conditions set
forth in Annex I hereto, Buyer shall, as promptly as practicable after the
date hereof, but in no event later than five business days following the
public announcement of the terms of this Agreement, commence the Offer to
purchase all of the outstanding Shares at a price of $18.10 per Share (the
"Offer Price"), net to the sellers in cash, subject to any amounts required to
be withheld under applicable federal, state, local or foreign income tax
regulations. The Offer shall be subject to the condition that there shall be
validly tendered in accordance with the terms of the Offer prior to the
expiration date of the Offer and not withdrawn a number of Shares which,
together with the Corimon Shares and any other Shares then owned by Buyer,
represents at least two-thirds of the Shares outstanding on a fully diluted
basis (the "Minimum Condition") and to the other conditions set forth in Annex
I hereto. Buyer expressly reserves the right to waive the Minimum Condition
(provided that in no event shall Buyer be permitted to accept Shares for
payment pursuant to the Offer unless the Shares so accepted for payment,
together with the Corimon Shares and any other Shares then owned by Buyer,
represent at least a majority of the outstanding Shares on a fully diluted
basis) or any of the other conditions to the Offer and to make any change in
the terms or conditions of the Offer; provided that no change may be made
which changes the form of consideration to be paid or decreases the price per
Share or the number of Shares sought in the Offer or which imposes conditions
to the Offer in addition to those set forth in Annex I or which amends any
condition to the Offer in any manner adverse to the holders of the Shares.
Notwithstanding the foregoing, Buyer shall extend the Offer at any time up to
the Outside Termination Date (as defined in Section 10.01) for one or more
periods of not more than 10 business days, if at the initial expiration date
of the Offer, or any extension thereof, the condition to the Offer requiring
the expiration or termination of any applicable waiting periods under the HSR
Act and the Exon-Florio Provision (as such terms are defined in Section 4.03)
is not satisfied or required. In addition, the Offer Price may be increased
and the Offer may be extended to the extent required by law in connection with
such increase in each case without the consent of the Company. Subject to the
terms and conditions of the Offer, Buyer shall pay, as promptly as practicable
after expiration of the Offer, for all Shares validly tendered and not
withdrawn.
(b) As soon as practicable on the date of commencement of the
Offer, Buyer shall file (i) with the Securities and Exchange Commission (the
"SEC"), a Tender Offer Statement on Schedule 14D-1 with respect to the Offer
which will contain the offer to purchase and form of the related letter of
transmittal (together with any supplements or amendments thereto,
collectively, the "SEC Offer Documents") and (ii) with the Attorney General of
the State of New York, a Registration Statement (together with any supplements
or amendments thereto, collectively, the "New York Disclosure Documents") in
accordance with Article 16 (the "Security Takeover Disclosure Act") of New
York Law. (The SEC Offer Documents and the New York Disclosure Documents are
collectively referred to herein as the "Offer Documents".) Buyer and the
Company each agrees promptly to correct any information provided by it for use
in the Offer Documents if and to the extent that it shall have become false or
misleading in any material respect. Buyer agrees to take all steps necessary
to cause the Offer Documents as so corrected to be filed with the SEC and to
be disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. The Company and its counsel
shall be given a reasonable opportunity to review and comment on the Offer
Documents prior to their being filed with the applicable authorities.
SECTION 1.02. Company Action. (a) The Company hereby consents
to the Offer and represents that its Board of Directors, at a meeting duly
called and held on April 30, 1995, has (i) unanimously determined that this
Agreement and the transactions contemplated hereby, including the Offer and
the Merger (as defined in Section 2.01), are fair to and in the best interest
of the Company's stockholders, (ii) unanimously approved this Agreement and
the transactions contemplated hereby, including the Offer and the Merger,
which approval satisfies in full the requirements of New York Law and Section
11(c)(ii) of the Certificate of Incorporation of the Company and (iii)
unanimously resolved to recommend acceptance of the Offer and approval and
adoption of this Agreement and the Merger by its stockholders; provided that
such recommendation may be withdrawn, modified or amended if, in the opinion
of the Board of Directors, after consultation with independent legal counsel,
such recommendation would be inconsistent with its fiduciary duties to the
Company's shareholders under applicable law. The parties agree that this
Agreement shall constitute the memorandum of understanding contemplated by
Section 11 of the Company's Certificate of Incorporation setting forth the
principal terms of the Merger and related transactions.
The Company represents that all members of the Board of
Directors of the Company who are not designees of Corimon have, in accordance
with the Standstill Agreement between the Company, Corimon and Corimon Corp.,
dated July 21, 1992, as amended (the "Standstill Agreement"), adopted a
resolution providing for a waiver of the restrictions in Sections 3.1 and 4.1
of the Standstill Agreement to permit Corimon and Corimon Corp. to enter into
and perform its obligations under the Corimon Option Agreement. The Company
further represents that Wertheim Schroder & Co. Inc., as financial advisors to
the Company, has delivered to the Company's Board of Directors its written
opinion that the consideration to be paid in the Offer and the Merger is fair
to the holders of Shares (other than Corimon and Corimon Corp.) from a
financial point of view. The Company has been advised that all of its
directors and executive officers intend to tender their Shares (other than the
Corimon Shares) pursuant to the Offer. The Company will promptly furnish
Buyer with a list of its stockholders, mailing labels and any available
listing or computer file containing the names and addresses of all holders of
record of Shares and lists of securities positions of Shares held in stock
depositories, in each case true and correct as of the most recent practicable
date, and will provide to Buyer such additional information (including,
without limitation, updated lists of stockholders, mailing labels and lists of
securities positions) and such other assistance as Buyer or Merger Subsidiary
may reasonably request in connection with the Offer.
(b) As soon as practicable on the day that the Offer is
commenced the Company will file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9") which shall reflect the
recommendations of the Company's Board of Directors referred to above, but
subject to the proviso to the sentence referring to such recommendations
above. The Company, Buyer and Merger Subsidiary each agree to correct
promptly any information provided by it for use in the Schedule 14D-9 if and
to the extent that it shall have become false or misleading in any material
respect. The Company agrees to take all steps necessary to cause the Schedule
14D-9 as so corrected to be filed with the SEC and to be disseminated to
holders of Shares, in each case as and to the extent required by applicable
federal securities laws. Buyer and its counsel shall be given a reasonable
opportunity to review and comment on the Schedule 14D-9 prior to its being
filed with the SEC.
(c) References herein to the "fiduciary duties" of the members
of the Board of Directors of the Company mean the fiduciary duties of such
members to the holders of Shares other than Corimon Corp.
SECTION 1.03. Directors. (a) Effective upon the acceptance
for payment by Buyer of any Shares, Buyer shall be entitled to designate the
number of directors, rounded up to the next whole number, on the Company's
Board of Directors that equals the product of (i) the total number of
directors on the Company's Board of Directors (giving effect to the election
of any additional directors pursuant to this Section) and (ii) the percentage
that the number of Shares owned by Buyer (including Shares accepted for
payment and, assuming the number of Shares owned by Buyer or accepted for
payment constitute at least a majority of the outstanding Shares on a fully
diluted basis, the Corimon Shares) bears to the total number of Shares
outstanding, and the Company shall take all action necessary to cause Buyer's
designees to be elected or appointed to the Company's Board of Directors,
including, without limitation, increasing the number of directors and seeking
and accepting resignations of incumbent directors. At such times, the Company
will use its best efforts to cause individuals designated by Buyer to
constitute the same percentage as such individuals represent on the Company's
Board of Directors of (x) each committee of the Board (other than any
committee of the Board established to take action under this Agreement), (y)
each board of directors of each Subsidiary (as defined in Section 4.06) and
(z) each committee of each such board. Notwithstanding the foregoing, until
the Effective Time (as defined in Section 2.01), the Company shall retain as
members of its Board of Directors at least two directors who are directors of
the Company on the date hereof (the "Company Designees").
(b) The Company's obligations to appoint designees to the
Board of Directors shall be subject to Section 14(f) of the Exchange Act (as
defined in Section 4.03) and Rule 14f-1 promulgated thereunder. The Company
shall promptly take all actions required pursuant to Section 14(f) and Rule
14f-1 in order to fulfill its obligations under this Section and shall include
in the Schedule 14D-9 such information with respect to the Company and its
officers and directors as is required under Section 14(f) and Rule 14f-1 to
fulfill its obligations under this Section 1.03. Buyer will supply to the
Company in writing and be solely responsible for any information with respect
to itself and its nominees, officers, directors and affiliates required by
Section 14(f) and Rule 14f-1.
(c) From and after the time, if any, that Buyer's designees
constitute a majority of the Company's Board of Directors, any amendment of
this Agreement, any termination of this Agreement by the Company, any
extension of time for performance of any of the obligations of Buyer or Merger
Subsidiary hereunder, any waiver of any condition to the obligations of the
Company or any of the Company's rights hereunder or other action by the
Company hereunder may be effected only by the action of a majority of the
directors of the Company then in office who were directors of the Company on
the date hereof, which action shall be deemed to constitute the action of the
full Board of Directors; provided that if there shall be no such directors,
such actions may be effected by majority vote of the entire Board of Directors
of the Company.
ARTICLE II
THE MERGER
SECTION 2.01. The Merger. (a) At the Effective Time (as
defined in Section 2.01(b)), Merger Subsidiary shall be merged (the "Merger")
with and into the Company in accordance with the New York Law, whereupon the
separate existence of Merger Subsidiary shall cease, and the Company shall be
the surviving corporation (the "Surviving Corporation").
(b) As soon as practicable after satisfaction or, to the
extent permitted hereunder, waiver of all conditions to the Merger, the
Company and Merger Subsidiary will file a certificate of merger with the
Department of State of the State of New York and make all other filings or
recordings required by New York Law in connection with the Merger. The Merger
shall become effective on such date as the certificate of merger is duly filed
with the Department of State of the State of New York or at such later date as
is specified in the certificate of merger (the "Effective Time").
(c) From and after the Effective Time, the Surviving
Corporation shall possess all the rights, privileges, powers and franchises
and be subject to all of the restrictions, disabilities, liabilities and
duties of the Company and Merger Subsidiary, all as provided under New York
Law.
SECTION 2.02. Conversion of Shares. At the Effective Time:
(a) each Share held by the Company as treasury stock or owned
by Buyer, Merger Subsidiary or any other subsidiary of Buyer
immediately prior to the Effective Time shall be canceled, and no
payment shall be made with respect thereto;
(b) each share of common stock of Merger Subsidiary
outstanding immediately prior to the Effective Time shall be
converted into and become one share of common stock of the Surviving
Corporation with the same rights, powers and privileges as the shares
so converted and shall constitute the only outstanding shares of
capital stock of the Surviving Corporation; and
(c) each Share outstanding immediately prior to the Effective
Time shall, except as otherwise provided in Section 2.02(a) or as
provided in Section 2.04 with respect to Shares as to which appraisal
rights have been exercised, be converted into the right to receive
$18.10 in cash or any higher price paid for each Share in the Offer,
without interest (the "Merger Consideration").
SECTION 2.03. Surrender and Payment. (a) Prior to the
Effective Time, Buyer shall appoint a depositary (the "Depositary") for the
purpose of exchanging certificates representing Shares for the Merger
Consideration. The Depositary shall at all times be a commercial bank having a
combined capital and surplus of at least $100,000,000. Buyer will pay to the
Depositary immediately prior to the Effective Time, the Merger Consideration
to be paid in respect of the Shares. For purposes of determining the Merger
Consideration to be so paid, Buyer shall assume that no holder of Shares will
perfect his right to appraisal of his Shares. Promptly after the Effective
Time, Buyer will send, or will cause the Depositary to send, but in no event
later than three business days after the Effective Time, to each holder of
Shares at the Effective Time a letter of transmittal for use in such exchange
(which shall specify that the delivery shall be effected, and risk of loss and
title shall pass, only upon proper delivery of the certificates representing
Shares to the Depositary).
(b) Each holder of Shares that have been converted into a
right to receive the Merger Consideration, upon surrender to the Depositary of
a certificate or certificates properly representing such Shares, together with
a properly completed letter of transmittal covering such Shares, will be
entitled to receive the Merger Consideration payable in respect of such
Shares. Until so surrendered, each such certificate shall, after the
Effective Time, represent for all purposes, only the right to receive such
Merger Consideration.
(c) If any portion of the Merger Consideration is to be paid
to a Person other than the registered holder of the Shares represented by the
certificate or certificates surrendered in exchange therefor, it shall be a
condition to such payment that the certificate or certificates so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and
that the Person requesting such payment shall pay to the Depositary any
transfer or other taxes required as a result of such payment to a Person other
than the registered holder of such Shares or establish to the satisfaction of
the Depositary that such tax has been paid or is not payable. For purposes of
this Agreement, "Person" means an individual, a corporation, limited liability
company, a partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or any agency or
instrumentality thereof.
(d) After the Effective Time, there shall be no further
registration of transfers of Shares. If, after the Effective Time,
certificates representing Shares are presented to the Surviving Corporation,
they shall be canceled and exchanged for the consideration provided for, and
in accordance with the procedures set forth, in this Article II.
(e) Any portion of the Merger Consideration paid to the
Depositary pursuant to Section 2.03(a) that remains unclaimed by the holders
of Shares one year after the Effective Time shall be returned to Surviving
Corporation, upon demand, and any such holder who has not exchanged his Shares
for the Merger Consideration in accordance with this Section prior to that
time shall thereafter look only to Surviving Corporation for payment of the
Merger Consideration in respect of his Shares. Notwithstanding the foregoing,
Buyer, Merger Subsidiary and the Surviving Corporation shall not be liable to
any holder of Shares for any amount paid to a public official pursuant to
applicable abandoned property laws. Any amounts remaining unclaimed by
holders of Shares on the day immediately prior to such time as such amounts
would otherwise escheat to or become property of any governmental entity
shall, to the extent permitted by applicable law, become the property of Buyer
free and clear of any claims or interest of any Person previously entitled
thereto.
(f) Any portion of the Merger Consideration paid to the
Depositary pursuant to Section 2.03(a) to pay for Shares for which appraisal
rights have been perfected shall be returned to Surviving Corporation upon
demand.
SECTION 2.04. Dissenting Shares. Notwithstanding Section
2.02, Shares outstanding immediately prior to the Effective Time and held by a
holder who has not voted in favor of the Merger or consented thereto in
writing and who has demanded appraisal for such Shares in accordance with New
York Law shall not be converted into a right to receive the Merger
Consideration, unless such holder fails to perfect or withdraws or otherwise
loses his right to appraisal. If after the Effective Time such holder fails to
perfect or withdraws or loses his right to appraisal, such Shares shall be
treated as if they had been converted as of the Effective Time into a right to
receive the Merger Consideration. The Company shall give Buyer prompt notice
of any demands received by the Company for appraisal of Shares, and Buyer
shall have the right to participate in all negotiations and proceedings with
respect to such demands. The Company shall not, except with the prior written
consent of Buyer, make any payment with respect to, or settle or offer to
settle, any such demands.
SECTION 2.05. Stock Options. (a) Immediately prior to the
Effective Time, each outstanding employee stock option (an "Option") to
purchase Shares granted under any employee stock option or compensation plan
or arrangement of the Company shall be canceled, and each holder of any such
Option, whether or not then vested or exercisable, shall be paid by the
Company at the Effective Time for each such Option an amount determined by
multiplying (i) the excess, if any, of $18.10 per Share over the applicable
exercise price of such Option by (ii) the number of Shares such holder could
have purchased (assuming full vesting of all Options) had such holder
exercised such Option in full immediately prior to the Effective Time.
(b) Prior to the Effective Time, the Company shall (i) use its
best efforts to obtain any consents from holders of Options and (ii) make any
amendments to the terms of such stock option or compensation plans or
arrangements, to the extent such consents or amendments are necessary to give
effect to the transactions contemplated by Section 2.05(a). Notwithstanding
any other provision of this Section, payment may be withheld in respect of any
Option until necessary consents are obtained.
SECTION 2.06. Merger Without Meeting of Shareholders.
Notwithstanding Section 6.02 hereof, in the event that Buyer, Merger
Subsidiary or any other subsidiary of Buyer shall acquire at least 90% of the
outstanding shares of each class of capital stock of the Company, pursuant to
the Offer or otherwise, the parties hereto agree to take all necessary and
appropriate action to cause the Merger to become effective as soon as
practicable after such acquisition, without a meeting of shareholders of the
Company, in accordance with Section 905 of the New York Law.
ARTICLE III
THE SURVIVING CORPORATION
SECTION 3.01. Certificate of Incorporation. The certificate
of incorporation of Merger Subsidiary in effect at the Effective Time shall be
the certificate of incorporation of the Surviving Corporation until amended in
accordance with applicable law, except that the name of the Surviving
Corporation shall be "Grow Group, Inc.".
SECTION 3.02. Bylaws. The bylaws of Merger Subsidiary in
effect at the Effective Time shall be the bylaws of the Surviving Corporation
until amended in accordance with applicable law.
SECTION 3.03. Directors and Officers. From and after the
Effective Time, until successors are duly elected or appointed and qualified
in accordance with applicable law, the directors of Merger Subsidiary at the
Effective Time shall be the initial directors of the Surviving Corporation and
the officers of Merger Subsidiary at the Effective Time shall be the initial
officers of the Surviving Corporation, in each case until their respective
successors are duly elected and appointed or qualified.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to Buyer and Merger
Subsidiary that:
SECTION 4.01. Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of New York, and except as set forth on Schedule 4.01, has
all corporate powers and all governmental licenses, authorizations, consents
and approvals (collectively, "Licenses") required to carry on its business as
now conducted except where the failure to have any such License would not,
individually or in the aggregate, have a Material Adverse Effect (as defined
below). The Company is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction where the character of the
property owned or leased by it or the nature of its activities makes such
qualification necessary, except for those jurisdictions where the failure to
be so qualified would not, individually or in the aggregate, have a Material
Adverse Effect. As used herein, the term "Material Adverse Effect" means a
material adverse effect on the condition (financial or otherwise), business,
assets or results of operations of the Company and its Subsidiaries (as defined
in Section 4.06) taken as a whole, that is not a result of general changes in
the economy or the industries in which the Company and its Subsidiaries
operate. The Company has heretofore delivered to Buyer true and complete
copies of the Company's certificate of incorporation and bylaws as currently
in effect.
SECTION 4.02. Corporate Authorization. The execution,
delivery and performance by the Company of this Agreement and the consummation
by the Company of the transactions contemplated hereby are within the Company's
corporate powers and, except for any required approval by the Company's
stockholders in connection with the consummation of the Merger, have been duly
authorized by all necessary corporate action. This Agreement, assuming due
and valid authorization, execution and delivery by the parties hereto,
constitutes a valid and binding agreement of the Company except that (i)
enforcement may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
affecting creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
SECTION 4.03. Governmental Authorization. Except as set forth
in Schedule 4.03, the execution, delivery and performance by the Company of
this Agreement and the consummation by the Company of the transactions
contemplated hereby require no action by or in respect of, or filing with, any
governmental body, agency, official or authority (each, a "Governmental
Entity") other than: (i) the filing of a certificate of merger in accordance
with New York Law; (ii) compliance with any applicable requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act"); (iii)
compliance with any applicable requirements of the Securities Exchange Act of
1934 and the rules and regulations promulgated thereunder (the "Exchange
Act"); (iv) compliance with any applicable requirements of the New Jersey
Industrial Site Recovery Act ("ISRA"); (v) compliance with any applicable
requirements of the Security Takeover Disclosure Act; and (vi) compliance with
any applicable requirements of Section 721 of the Defense Production Act of
1950, as amended (the "Exon-Florio Provision").
SECTION 4.04. Non-Contravention. The execution, delivery and
performance by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby do not and will not (i)
contravene or conflict with the Certificate of Incorporation or Bylaws of the
Company, (ii) except as set forth in Schedule 4.04 and assuming compliance
with the matters referred to in Section 4.03, contravene or conflict with or
constitute a violation of any provision of any law, regulation, judgment,
injunction, order or decree binding upon or applicable to the Company or any
Subsidiary, (iii) except as set forth in Schedule 4.04, with or without the
giving of notice or passage of time or both, constitute a default under or give
rise to a right of termination, cancellation or acceleration of any right or
obligation of the Company or any Subsidiary or to a loss of any benefit to
which the Company or any Subsidiary is entitled under any provision of any
agreement, contract or other instrument binding upon the Company or any
Subsidiary or any license, franchise, permit or other similar authorization
held by the Company or any Subsidiary, or (iv) result in the creation or
imposition of any Lien on any asset of the Company or any Subsidiary excluding
from the foregoing clauses (ii), (iii) or (iv) such violations, breaches,
defaults or Liens which would not, individually or in the aggregate, have a
Material Adverse Effect on the Company and its Subsidiaries taken as a whole,
and which will not materially impair the ability of the Company to consummate
the transactions contemplated hereby. For purposes of this Agreement, "Lien"
means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such asset.
SECTION 4.05. Capitalization. The authorized capital stock of
the Company consists of 50,000,000 shares of common stock, par value $0.10 per
Share and 1,000,000 shares of preferred stock. As of April 29, 1995, there
were outstanding (1) 16,101,712 Shares and (2) employee stock options to
purchase an aggregate of 318,699 Shares (the "Options") with a weighted
average exercise price of $12.74 and a maximum exercise price of $18.13.
Schedule 4.05 accurately sets forth information regarding the exercise prices
of the Options. All outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and nonassessable.
Except as set forth in this Section, except as provided in the Standstill
Agreement, except for the Rights (as defined below), and except for changes
since April 29, 1995 resulting from the exercise of employee stock options
outstanding on such date, there are outstanding (i) no shares of capital stock
or other voting securities of the Company, (ii) no securities of the Company
or of any Subsidiary convertible into or exchangeable for shares of capital
stock or voting securities of the Company, and (iii) no options or other
rights to acquire from the Company, and no obligation of the Company to issue,
any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of the Company (the items
in clauses (i), (ii) and (iii) being referred to collectively as the "Company
Securities"). There are no outstanding obligations of the Company or any
Subsidiary to repurchase, redeem or otherwise acquire any Company Securities.
SECTION 4.06. Subsidiaries. (a) Each Subsidiary that is
actively engaged in any business or owns any material assets (an "Active
Subsidiary") (i) is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation, (ii) except
as set forth in Schedule 4.06, has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted and (iii) is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where the character of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except in each case to the
extent the failure of this representation and warranty to be true would not
have a Material Adverse Effect. For purposes of this Agreement, "Subsidiary"
means any corporation or other entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are directly or
indirectly owned by the Company. All Active Subsidiaries and their respective
jurisdictions of incorporation are either identified in the Company's annual
report on Form 10-K for the fiscal year ended June 30, 1994 (the "Company
10-K") or in Schedule 4.06.
(b) Except to the extent the failure of the representations
and warranties set forth in this subsection (b) would not have a Material
Adverse Effect, and except that the stock of the Active Subsidiaries is
pledged under the Loan Agreement set forth on Schedule 4.04 (the "Loan
Agreement"), which Loan Agreement restricts the sale of such stock, all of the
outstanding capital stock of, or other ownership interests in, each Active
Subsidiary, is owned by the Company, directly or indirectly, free and clear of
any Lien and free of any other limitation or restriction (including any
restriction on the right to vote, sell or otherwise dispose of such capital
stock or other ownership interests); there are no outstanding (i) securities
of the Company or any Subsidiary convertible into or exchangeable for shares
of capital stock or other voting securities or ownership interests in any
Subsidiary, or (ii) options or other rights to acquire from the Company or any
Subsidiary, and no other obligation of the Company or any Subsidiary to issue,
any capital stock, voting securities or other ownership interests in, or any
securities convertible into or exchangeable for any capital stock, voting
securities or ownership interests in, any Subsidiary (the items in clauses (i)
and (ii) being referred to collectively as the "Subsidiary Securities"); and,
there are no outstanding obligations of the Company or any Subsidiary to
repurchase, redeem or otherwise acquire any outstanding Subsidiary Securities.
SECTION 4.07. Investments. Except as disclosed in Schedule
4.07 and except to the extent the failure of this representation and warranty
to be true would not have a Material Adverse Effect, neither the Company nor
any of its Subsidiaries, directly or indirectly, owns any shares or has any
ownership interest in any other Person or is a partner with any other Person.
SECTION 4.08. SEC Filings. (a) The Company has delivered to
Buyer (i) the annual reports on Form 10-K for its fiscal years ended June 30,
1992, 1993 and 1994, (ii) its quarterly reports on Form 10-Q for its fiscal
quarters ended September 30, 1994 and December 31, 1994 (such reports are
hereinafter referred to as the "Company 10-Qs"), (iii) its proxy or
information statements relating to meetings of, or actions taken without a
meeting by, the stockholders of the Company held since October 25, 1994, and
(iv) all of its other reports, statements, schedules and registration
statements filed by the Company with the SEC since June 30, 1994. As used
herein, the term "Company SEC Documents" means, the annual report of the
Company on Form 10-K for its fiscal year ended June 30, 1994, the Company
10-Qs, the proxy statement of the Company for the annual meeting of
shareholders on October 26, 1994 and the current reports of the Company on
Form 8-K dated February 25, 1995 and August 17, 1994 (as amended by the Form
8K/A dated October 12, 1994).
(b) As of its filing date, each such report or statement filed
pursuant to the Exchange Act did not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading.
(c) Each such registration statement, as amended or
supplemented, if applicable, filed pursuant to the Securities Act of 1933 as
of the date such statement or amendment became effective did not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading.
SECTION 4.09. Financial Statements. The audited consolidated
financial statements and unaudited consolidated interim financial statements
of the Company included in its annual reports on Form 10-K and the Company
Form 10-Qs fairly present, in conformity with generally accepted accounting
principles applied on a consistent basis (except as may be indicated in the
notes thereto and, in the case of the interim financial statements included in
the Company Form 10-Qs, except for the absence of certain footnotes that would
be required under GAAP), the consolidated financial position of the Company
and its consolidated subsidiaries as of the dates thereof and their
consolidated results of operations and cash flows for the periods then ended
(subject to normal year-end adjustments in the case of any unaudited interim
financial statements). For purposes of this Agreement, "Balance Sheet" means
the consolidated balance sheet of the Company as of December 31, 1994 set
forth in the Company 10-Q and "Balance Sheet Date" means December 31, 1994.
SECTION 4.10. Disclosure Documents. (a) Each document
required to be filed by the Company with the SEC in connection with the
transactions contemplated by this Agreement (the "Company Disclosure
Documents"), including, without limitation, the Schedule 14D-9 will, when
filed, comply as to form in all material respects with the applicable
requirements of all applicable law, including without limitation, the Exchange
Act.
(b) The information with respect to the Company or any
Subsidiary that the Company furnishes to Buyer in writing specifically for use
in the Offer Documents will not, at the time of the filing thereof, at the
time of any distribution thereof and at the time of the consummation of the
Offer, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading.
SECTION 4.11. Absence of Certain Changes. Since the Balance
Sheet Date, and except as set forth in Schedule 4.11 or as contemplated by
this Agreement, the Company and Subsidiaries have conducted their business in
the ordinary course consistent with past practice and there has not been:
(a) any event, occurrence or facts which has had or reasonably
could be expected to have a Material Adverse Effect;
(b) any declaration, setting aside or payment of any dividend
(other than regular quarterly dividends not to exceed $.07 per Share
per quarter) or other distribution with respect to any shares of
capital stock of the Company, or any repurchase, redemption or other
acquisition by the Company or any Subsidiary of any outstanding
shares of capital stock or other securities of, or other ownership
interests in, the Company or any Subsidiary;
(c) any amendment of any material term of any outstanding
security of the Company or any Subsidiary;
(d) any incurrence, assumption or guarantee by the Company or
any Subsidiary of any indebtedness for borrowed money other than in
the ordinary course of business and in amounts and on terms
consistent with past practices;
(e) any creation or assumption by the Company or any
Subsidiary of any Lien on any asset other than in the ordinary course
of business consistent with past practices and other than Liens
which, individually or in the aggregate, do not have and could not
reasonably be expected to have a Material Adverse Effect;
(f) any making of any loan, advance or capital contributions
to or investment in any Person other than advances to employees in
the ordinary course of business consistent with past practice and
loans, advances or capital contributions to or investments in wholly
owned Subsidiaries made in the ordinary course of business consistent
with past practices;
(g) any damage, destruction or other casualty loss (whether or
not covered by insurance) affecting the business or assets of the
Company or any Subsidiary which, individually or in the aggregate,
has had or could reasonably be expected to have a Material Adverse
Effect;
(h) any transaction or commitment made, or any contract or
agreement entered into, by the Company or any Subsidiary relating to
its assets or business (including the acquisition or disposition of
any assets) or any relinquishment by the Company or any Subsidiary of
any contract or other right, in either case, that, individually or in
the aggregate, have had or could reasonably be expected to have a
Material Adverse Effect, other than transactions and commitments in
the ordinary course of business consistent with past practice and
those contemplated by this Agreement;
(i) any material change in any method of accounting or
accounting practice by the Company or any Subsidiary, except for any
such change required by reason of a concurrent change in generally
accepted accounting principles; or
(j) any (i) grant of any severance or termination pay to any
director, officer or employee of the Company or any Subsidiary, (ii)
entering into of any employment, deferred compensation or other
similar agreement (or any amendment to any such existing agreement)
with any director, officer or employee of the Company or any
Subsidiary, (iii) increase in benefits payable under any existing
severance or termination pay policies or employment agreements or
(iv) increase in compensation, bonus or other benefits payable to
directors, officers or employees of the Company or any Subsidiary, in
each case, other than in the ordinary course of business consistent
with past practice.
SECTION 4.12. No Undisclosed Material Liabilities. Except as
set forth in Schedule 4.12, there are no liabilities of the Company or any
Subsidiary of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, and there is no existing condition or
fact which could reasonably be expected to result in such a liability, other
than:
(a) liabilities disclosed or provided for in the Balance Sheet;
(b) other liabilities the presence of which, individually or
in the aggregate, do not have and could not reasonably be expected to have a
Material Adverse Effect;
(c) liabilities incurred in the ordinary course of business
consistent with past practice since the Balance Sheet Date; and
(d) liabilities under this Agreement or in connection with
this Agreement or disclosed hereunder.
SECTION 4.13. Litigation. Except as set forth in the Company
10-K or in Schedule 4.13, there is no action, suit, investigation or
proceeding pending against, or to the knowledge of the Company threatened
against, the Company or any Subsidiary or any of their respective properties
before any court or arbitrator or any governmental body, agency or official
which, if determined or resolved adversely to the Company or any Subsidiary in
accordance with the plaintiff's demands, could reasonably be expected to have
a Material Adverse Effect.
SECTION 4.14. Taxes. (a) (i) all income and other material
Tax returns, statements, reports and forms (including estimated Tax returns
and reports and information returns and reports) required to be filed with any
taxing authority with respect to any Pre-Closing Tax Period by or on behalf of
the Company or any subsidiary of the Company (collectively, the "Returns")
were filed when due (including any applicable extension periods) in accordance
with all applicable laws; (ii) as of the time of filing, such Returns
correctly reflected in all material respects the facts regarding the income,
business, assets, operations, activities and status of the Company, its
Subsidiaries and any other information required to be shown therein; (iii) the
Company and its Subsidiaries have timely paid, or withheld and remitted to the
appropriate taxing authority, all Taxes shown as due and payable on the
Returns that have been filed; (iv) the charges, accruals and reserves for
taxes with respect to the Company and any Subsidiary for any Pre-Closing Tax
Period (including any Pre-Closing Tax Period for which no Return has yet been
filed) reflected on the books of the Company and its Subsidiaries (excluding
any provision for deferred income taxes) are adequate (in accordance with
GAAP) to cover such Taxes; (v) neither the Company nor any Subsidiary of the
Company has been a member of an affiliated group (as defined in Section 1504
of the Internal Revenue Code of 1986, as amended (the "Code")) other than one
of which the Company was the common parent, or filed or been included in a
combined, consolidated or unitary Return other than one filed by the Company;
(vi) the Company is not and has not been within five years of the date hereof
a "United States real property holding corporation" as defined in Section 897
of the Code; (vii) neither the Company nor any Subsidiary owns (excluding any
leasehold interest) any interest in real property in the State of New York;
and (viii) there is no claim, action, suit or proceeding now pending or
threatened in writing against or in respect of any Tax or "tax asset" of the
Company or any Subsidiary the resolution of which would as proposed, or audit
or investigation now pending or threatened in writing against or in respect of
any Tax or "tax asset" of the Company or any Subsidiary the resolution of
which the Company believes would (taking into account any changes, accruals
and reserves referred to in clause (iv) above), individually or in the
aggregate, have a material adverse effect on the financial position of the
Company and its Subsidiaries taken as a whole. (The term "tax asset" means
any net operating loss, net capital loss, investment tax credit, foreign tax
credit, charitable deduction or any other credit or tax attribute which could
reduce Taxes).
(b) As used in this Section 4.14, "Taxes" mean (i) all
Federal, state, local and foreign income, franchise, alternative or add-on
minimum tax, gross receipts, transfer, withholding on amounts paid to or by
the Company or any of its Subsidiaries, payroll, employment, license, property,
sales, use, excise and other taxes, tariffs or governmental charges of any
nature whatsoever, together with any interest, penalty or additional tax
attributable to such taxes; (ii) liability of the Company or any Subsidiary for
the payment of any amounts of the type described in clause (i) of this
paragraph as a result of being a member of an affiliated, consolidated,
combined or unitary group, or being a party to any agreement or arrangement
whereby liability of the Company or any Subsidiary for payments of such
amounts was determined or taken into account with reference to the liability
of any other person; and (iii) liability of the Company or any Subsidiary for
the payment of any amounts as a result of being party to any tax sharing
agreement or with respect to the payment of any amounts of the type described
in clauses (i) or (ii) of this paragraph as a result of any express or implied
obligation to indemnify any other person.
"Pre-Closing Tax Period" means any Tax period (or portion
thereof) ending on or before the close of business on the Closing Date.
SECTION 4.15. Employee Matters. (a) For purposes of this
Section, the following terms shall have the meanings set forth below:
(A) "Benefit Arrangement" means any contract (other than the
Employee Agreements), arrangement or policy, or any plan or
arrangement (whether or not written) providing for severance
benefits, insurance coverage (including any self-insured
arrangements), workers' compensation, disability benefits,
supplemental unemployment benefits, vacation benefits, retirement
benefits, deferred compensation, profit-sharing, bonuses, stock
options, stock appreciation rights or other forms of incentive
compensation or post-retirement insurance, compensation or benefits
that (i) is not an Employee Plan, (ii) is entered into or maintained,
as the case may be, by the Company or any of its affiliates and (iii)
covers any employee or former employee of the Company or any of its
Subsidiaries.
(B) "Employee Agreement" means all written employment
agreements and severance agreements with employees of the Company or
any of its Subsidiaries
(C) "Employee Plan" means any "employee benefit plan", as
defined in Section 3(3) of ERISA, that (i) is subject to any
provision of ERISA, (ii) is maintained, administered or contributed
to by the Company, any Subsidiary or any of their ERISA Affiliates for
employees or former employees of the Company or any of its
Subsidiaries and (iii) covers any employee or former employee of the
Company or any of its Subsidiaries.
(D) "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended, and any successor statute thereto, and the rules
and regulations promulgated thereunder.
(E) "ERISA Affiliate" of any entity means any other entity
which, together with such entity, would be treated as a single
employer under Section 4001(b)(1) of ERISA.
(F) "Multiemployer Plan" means each Employee Plan that is a
multiemployer plan, as defined in Section 3(37) of ERISA.
(G) "Title IV Plan" means an Employee Plan, other than any
Multiemployer Plan, subject to Title IV of ERISA.
(b) Schedule 4.15 identifies each Employee Plan. The Company
has furnished or made available to Buyer copies of the Employee Plans (and, if
applicable, related trust agreements) and all amendments thereto and written
interpretations thereof together with (i) the three most recent annual reports
prepared in connection with any material Employee Plan (Form 5500 including,
if applicable, Schedule B thereto) and (ii) the most recent actuarial
valuation report prepared in connection with any Employee Plan. No Employee
Plan is (i) except as set forth in Schedule 4.15, a Multiemployer Plan, (ii) a
Title IV Plan or (iii) maintained in connection with any trust described in
Section 501(c)(9) of the Code. Except for the Supplemental Retirement and
Death Benefit Agreements with the employees or former employees of the Company
or its Subsidiaries who are identified on Schedule 4.15, no Employee Plan is a
plan described in Section 401(a)(1) of ERISA.
(c) With respect to each Employee Plan, except as disclosed in
Section 4.15: (i) no "prohibited transaction", as defined in Section 406 of
ERISA or Section 4975 of the Code, has, to the knowledge of the officers of
the Company, occurred with respect to any Employee Plan, excluding
transactions effected pursuant to a statutory or administrative exemption;
(ii) neither (A) disputes in the ordinary course of the operation of an
Employee Plan that might reasonably be expected to have a Material Adverse
Effect nor (B) disputes outside the ordinary course of the operation of an
Employee Plan, are pending, or to the knowledge of the Company, threatened;
and (iii) all contributions required to be made to each Employee Plan as of
the date hereof (taking into account any extensions permitted by the Code or
the IRS) have been made in full.
(d) No liability under Title IV of ERISA has been incurred by
the Company or any ERISA Affiliate that has not been satisfied in full and
except as disclosed in Schedule 4.15, to the knowledge of officers of the
Company, no condition exists that presents a material risk to the Company or
its ERISA Affiliates of incurring any liability to the PBGC, Department of
Labor, or the plan participants. No Employee Plan has incurred an accumulated
funding deficiency, as defined in Section 302 of ERISA or Section 312 of the
Code, whether or not waived.
(e) If a "complete withdrawal" by the Company, all its
Subsidiaries and all of their ERISA Affiliates were to occur as of the Closing
Date with respect to all Multiemployer Plans, to the knowledge of the officers
of the Company, based on information received by such officers as of the date
hereof, none of the Company, any of its Subsidiaries nor any of their ERISA
Affiliates would incur any material withdrawal liability under Title IV of
ERISA.
(f) Each Employee Plan that is intended to be qualified under
Section 401(a) of the Code has been determined by the Internal Revenue Service
to be so qualified and no event has occurred since the date of such
determination that, to the knowledge of the officers of the Company, would
adversely affect such qualification, and each trust created under any such
Employee Plan has been determined by the Internal Revenue Service to be exempt
from tax under Section 501(a) of the Code and no event has occurred since the
date of such determination that, to the knowledge of the officers of the
Company, would adversely affect such exemption. The Company has provided
Buyer with the most recent determination letter of the Internal Revenue
Service relating to each such Employee Plan. Each Employee Plan has been
maintained in substantial compliance (to include timely, complete and
substantially correct filing of Form 5500 and any attachments) with its terms
and with the requirements prescribed by any and all applicable statutes,
orders, rules and regulations, including but not limited to ERISA and the
Code. Except as disclosed on Schedule 4.15, no Employee Plan is or has been
audited or is or has been under investigation by the Department of Labor or the
Internal Revenue Service.
(g) Schedule 4.15 identifies each material Benefit
Arrangement. The Company has furnished or made available to Buyer copies or
descriptions of each material Benefit Arrangement. Each such Benefit
Arrangement has been maintained in substantial compliance with its terms and
with the requirements prescribed by any and all applicable statutes, orders,
rules and regulations.
(h) Schedule 4.15 identifies by name all Employee Agreements
in effect or committed to be put in effect as of the date hereof and provides
the following information with respect to each Employee Agreement:
(1) 1995 compensation rate used in determining change of
control severance payment;
(2) 1994, 1993, and 1992 bonuses, if any, used to calculate
change of control severance payment;
(3) Period used to calculate change of control severance
payment; and
(4) Good faith estimate of total severance payment due each
employee with an Employee Agreement; provided that in no
event will the estimate have more than a 5% margin of
error.
No changes have been made to any Employee Agreement on or after January 1,
1995 and no new Employee Agreements will be entered into by the Company after
May 1, 1995 and before the Effective Time, the effect of which is not
disclosed on Schedule 4.15.
(i) Except as disclosed on Schedule 4.15, neither the Company
nor any of its ERISA Affiliates has any current or projected liability in
respect of post-employment or post-retirement health or medical or life
insurance benefits for retired or former employees of the Company, except as
required to avoid excise tax under Section 4980B of the Code.
(j) Except as disclosed in Schedule 4.15, there has been no
amendment or announcement by the Company or any of its ERISA Affiliates
relating to, or change in benefits, employee participation or coverage under,
any Employee Plan or Benefit Arrangement, that would increase materially the
expense of maintaining such Employee Plan or Benefit Arrangement above the
level of the expense incurred in respect thereof for the fiscal year ended
prior to the date hereof.
(k) Except as set forth in Schedule 4.15, the Company is not
aware of any Employee Agreement or other contract, agreement, plan or
arrangement covering any employee or former employee of the Company that,
individually or collectively, could give rise to the payment of any amount
that would not be deductible pursuant to the terms of Section 280G of the Code.
(l) Except as disclosed in Schedule 4.15, no excise tax under
Section 4980B or other provision of the Code has been incurred by the Company
or an ERISA Affiliate in respect of any Employee Plan.
(m) Schedule 4.15 lists by policy number and issuer all
corporate owned life insurance policies owned by the Company or an ERISA
Affiliate and with respect to each such policy lists the (1) current cash
surrender value, net of any loan, (2) name of insured and (3) the face amount.
Each policy so identified is a life insurance contract within the meaning of
Code Section 7702.
(n) The Supplemental Retirement and Death Benefit Agreements
identified in Schedule 4.15 do not permit any employee or former employee of
the Company or an ERISA Affiliate who is over age 65 to receive an
undiscounted lump sum payment of any installment payments due under said
agreements.
SECTION 4.16. Labor Matters. Except as set forth in Schedule
4.16 and except to the extent the failure of this representation and warranty
to be true would not have a Material Adverse Effect, (i) there are no
controversies pending or, to the best knowledge of the Company, threatened
between the Company or any Subsidiary and any of their respective employees;
and (ii) neither the Company nor any Subsidiary is a party to any collective
bargaining agreement or other labor union contract applicable to persons
employed by the Company or any Subsidiary (any such agreement or contract a
"CBA"), nor, to the knowledge of the Company, are there any activities or
proceedings of any labor union to organize any such employees. The Company
has furnished or made available, to Buyer true and complete copies of all CBAs.
SECTION 4.17. Compliance with Laws. Except as set forth in
Schedule 4.17, neither the Company nor any Subsidiary is in violation of, or
has violated, any applicable provisions of any laws, statutes, ordinances or
regulations except where such violations would not have a Material Adverse
Effect or a material adverse effect on the reputation of the Company and any
of its Subsidiaries taken as a whole.
SECTION 4.18. Finders' Fees. Except for Wertheim Schroder &
Co. Inc., a true copy of whose engagement agreement has been provided to
Buyer, there is no investment banker, broker, finder or other intermediary
which has been retained by or is authorized to act on behalf, of the Company
or any Subsidiary who would be entitled to any fee or commission from the
Company, any Subsidiary, Buyer or any of its affiliates upon consummation of
the transactions contemplated by this Agreement.
SECTION 4.19. Environmental Matters. (a) Except as set forth
in the Company SEC Documents or in Schedule 4.19:
(i) since June 30, 1994, the Company has not received any
written communication from any person or entity (including any Governmental
Entity) stating that it or its Subsidiaries may be a potentially responsible
party under Environmental Law (as defined in (c) below) with respect to any
actual or alleged environmental contamination; neither the Company nor its
Subsidiaries nor, to the Company's knowledge, any Governmental Entity is
conducting or has conducted any environmental remediation or environmental
investigation which could reasonably be expected to result in liability for
the Company or its Subsidiaries under Environmental Law; and the Company and
its Subsidiaries have not received any request for information under
Environmental Law from any Governmental Entity with respect to any actual or
alleged environmental contamination, except, in each case, for communications,
environmental remediation and investigations and requests for information
which would not, individually or in the aggregate, have a Material Adverse
Effect;
(ii) since June 30, 1994, the Company and its Subsidiaries
have not received any written communication from any person or entity
(including any Governmental Entity) stating or alleging that the Company or its
Subsidiaries may have violated any Environmental Law, or that the Company or
its Subsidiaries has caused or contributed to any environmental contamination
that has caused any property damage or personal injury under Environmental
Law, except, in each case, for statements and allegations of violations and
statements and allegations of responsibility for property damage and personal
injury which would not, individually or in the aggregate, have a Material
Adverse Effect;
(iii) all underground storage tanks ("UST's") on property
currently owned or leased by the Company comply with applicable Environmental
Law, except for failures to comply which would not, individually or in the
aggregate, have a Material Adverse Effect.
(iv) with respect to UST's other than those covered by section
4.19(a)(iii), to the Company's knowledge, all obligations for which the
Company and its Subsidiaries have retained liability either contractually or
by operation of law would not have a Material Adverse Effect; and
(v) to the Company's knowledge, the Company and its
Subsidiaries have no liabilities under Environmental Law that, individually or
in the aggregate, have had or may reasonably be expected to result in a
Material Adverse Effect.
(b) (i) The Company has not knowingly withheld from Buyer any
material environmental investigation, study, audit, test, review and other
analysis in the possession of the Company or its Subsidiaries conducted in
relation to the business of the Company or any property or facility now or
previously owned, operated or leased by the Company or any Subsidiary; and
(ii) the Company has not knowingly withheld from Buyer any consent decree,
consent order or similar document in force and to which it is a party relating
to any property currently owned, leased or operated by the Company or its
Subsidiaries.
(c) For purposes of this Section 4.19, "Environmental Law"
means all applicable state, federal and local laws, regulations and rules,
including common law, judgments, decrees and orders relating to pollution, the
preservation of the environment, and the release of material into the
environment.
SECTION 4.20. Property. The Company and the Subsidiaries have
good and marketable title to, or in the case of leased property, have valid
leasehold interests in all properties and assets necessary to conduct the
business of the Company as currently conducted except to the extent the
failure of this representation and warranty to be true would not have a
Material Adverse Effect. There are no developments affecting any of such
properties or assets pending or, to the knowledge of Seller threatened, which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
SECTION 4.21. Trademarks. (a) The Company and the
Subsidiaries own or possess adequate licenses or other valid rights to use all
trademarks, trademark rights, trade names and trade name rights which are
material to the Company's business and operations (collectively, "Material
Trademarks") used or held for use in connection with the business of the
Company and the Subsidiaries as currently conducted in all material respects.
All Material Trademarks are validly registered or registrations have been
applied for.
(b) The Company, except as set forth in Schedule 4.21, is
unaware of any assertion or claim challenging the validity of any Material
Trademark. Except as set forth in Schedule 4.21, the conduct of the business
of the Company and the Subsidiaries as currently conducted does not conflict
with any trademark, trademark right, trade name or trade name right of any
third party in a manner that could reasonably be expected to have a Material
Adverse Effect. To the best knowledge of the Company, there are no material
infringements of any Material Trademarks.
SECTION 4.22. Material Contracts. (a) Except as set forth in
Schedule 4.22, the Company 10-K lists each material contract or agreement
(including, but not limited to, all material leases, licensing agreements,
manufacturing, production or distribution contracts and any material contracts
or agreements pursuant to which the Company or any Subsidiary has licensed
intellectual property to a third party) (collectively, the "Material
Contracts") to which the Company or any of its Subsidiaries is a party.
(b) To the knowledge of the Company, each Material Contract is
in full force and effect and is enforceable in all material respects against
the parties thereto (other than the Company and the Subsidiaries) in
accordance with its terms and no condition or state of facts exist that, with
notice or the passage or time, or both, would constitute a material default by
the Company or any Subsidiary or, to the best knowledge of the Company, any
third party under any Material Contract.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF BUYER AND MERGER SUBSIDIARY
Buyer and Merger Subsidiary represent and warrant to the
Company that:
SECTION 5.01. Corporate Existence and Power. Each of Buyer
and Merger Subsidiary is a corporation duly incorporated, validly existing and
in good standing under the laws of its jurisdiction of incorporation. Since
the date of its incorporation, Merger Subsidiary has not engaged in any
activities other than in connection with or as contemplated by this Agreement.
SECTION 5.02. Corporate Authorization. The execution,
delivery and performance by Buyer and Merger Subsidiary of this Agreement and
the consummation by Buyer and Merger Subsidiary of the transactions
contemplated hereby are within the corporate powers of Buyer and Merger
Subsidiary and have been duly authorized by all necessary corporate action.
This Agreement, assuming due and valid authorization, execution and delivery
by the other parties hereto, constitutes a valid and binding agreement of each
of Buyer and Merger Subsidiary except that (i) enforcement may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws, now or hereafter in effect, affecting creditors' rights generally, and
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
SECTION 5.03. Governmental Authorization. The execution,
delivery and performance by Buyer and Merger Subsidiary of this Agreement and
the consummation by Buyer and Merger Subsidiary of the transactions
contemplated by this Agreement require no action by or in respect of, or
filing with, any governmental body, agency, official or authority other than
(i) the filing of a certificate of merger in accordance with New York Law;
(ii) compliance with any applicable requirements of the HSR Act; (iii)
compliance with any applicable requirements of the Exchange Act; (iv)
compliance with any applicable requirements of ISRA; (v) compliance with any
applicable requirements of the Security Takeover Disclosure Act; and (vi)
compliance with any applicable requirements of the Exon-Florio Provision.
SECTION 5.04. Non-Contravention. The execution, delivery and
performance by Buyer and Merger Subsidiary of this Agreement and the
consummation by Buyer and Merger Subsidiary of the transactions contemplated
hereby do not and will not (i) contravene or conflict with the certificate of
incorporation or bylaws of Merger Subsidiary or the charter documents of
Buyer, (ii) assuming compliance with the matters referred to in Section 5.03,
contravene or conflict with any provision of law, regulation, judgment, order
or decree binding upon Buyer or Merger Subsidiary, or (iii) constitute a
default under or give rise to any right of termination, cancellation or
acceleration of any right or obligation of Buyer or Merger Subsidiary or to a
loss of any benefit to which Buyer or Merger Subsidiary is entitled under any
agreement, contract or other instrument binding upon Buyer or Merger
Subsidiary, except in the case of clauses (ii) and (iii) as would not
materially impair the consummation of the Offer or the Merger.
SECTION 5.05. Disclosure Documents. (a) The information with
respect to Buyer and its subsidiaries and Merger Subsidiary that Buyer and
Merger Subsidiary furnish to the Company in writing specifically for use in any
Company Disclosure Document will not contain, any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading (i) in the case of the Company Proxy Statement
at the time the Company Proxy Statement or any amendment or supplement thereto
is first mailed to stockholders of the Company, at the time the stockholders
vote on adoption of this Agreement and at the Effective Time, and (ii) in the
case of any Company Disclosure Document other than the Company Proxy
Statement, at the time of the filing thereof and at the time of any
distribution thereof.
(b) The SEC Offer Documents, when filed, will comply as to
form in all material respects with the applicable requirements of the Exchange
Act and the New York Disclosure Documents, when filed, will comply as to form
in all material respects with the applicable requirements of the New York
Disclosure Act. The Offer Documents will not at the time of the filing
thereof, at the time of any distribution thereof or at the time of
consummation of the Offer, contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements made therein,
in the light of the circumstances under which they were made, not misleading;
provided that this representation and warranty will not apply to statements or
omissions in the Offer Documents based upon information furnished to Buyer or
Merger Subsidiary in writing by the Company specifically for use therein.
SECTION 5.06. Finders' Fees. Except for Goldman, Sachs & Co.,
whose fees will be paid by Buyer, there is no investment banker, broker,
finder or other intermediary who might be entitled to any fee or commission
from the Company or any of its affiliates upon consummation of the
transactions contemplated by this Agreement.
SECTION 5.07. Financing. Buyer has or will have, prior to the
expiration of the Offer, sufficient funds available to purchase all of the
Shares outstanding on a fully diluted basis and to pay all related fees and
expenses pursuant to the Offer and this Agreement.
SECTION 5.08. Share Ownership. As of the date hereof, Buyer
and Merger Subsidiary do not beneficially own any Shares.
SECTION 5.09. Merger Subsidiary's Operations. Merger
Subsidiary was formed solely for the purpose of engaging in the transactions
contemplated hereby and has not engaged in any business activities or
conducted any operations other than in connection with the transactions
contemplated hereby.
ARTICLE VI
COVENANTS OF THE COMPANY
The Company agrees that:
SECTION 6.01. Conduct of the Company. From the date hereof
until the Effective Time, the Company and the Subsidiaries shall conduct their
business in the ordinary course consistent with past practice and shall use
their best efforts to preserve intact their business organizations and
relationships with third parties and to keep available the services of their
present officers and employees. Without limiting the generality of the
foregoing, from the date hereof until the Effective Time:
(a) the Company will not adopt or propose any change in its
certificate of incorporation or bylaws;
(b) except for the Merger, the Company will not, and will not
permit any Subsidiary to, merge or consolidate with any other Person
or acquire a material amount of assets of any other Person;
(c) the Company will not, and will not permit any Subsidiary
to, sell, lease, license or otherwise dispose of any material assets
or property except (i) pursuant to existing contracts or commitments
and (ii) inventory in the ordinary course consistent with past
practice;
(d) the Company will not, and will not permit any Subsidiary
to, agree or commit to do any of the foregoing; or
(e) the Company will not, and will not permit any Subsidiary
to, willfully and knowingly (i) take or agree or commit to take any
action that would make any representation and warranty of the Company
hereunder inaccurate in any material respect at, or as of any time
prior to, the Effective Time or (ii) omit, or agree or commit to
omit, to take any action necessary to prevent any such representation
or warranty from being inaccurate in any material respect at any such
time.
SECTION 6.02. Stockholder Meeting; Proxy Material. The
Company shall cause a meeting of its stockholders (the "Company Stockholder
Meeting") to be duly called and held as soon as reasonably practicable for the
purpose of voting on the approval and adoption of this Agreement and the
Merger unless a vote of stockholders of the Company is not required by New
York Law. The Directors of the Company shall, subject to their fiduciary
duties as advised by counsel, recommend approval and adoption of this
Agreement and the Merger by the Company's stockholders. In connection with
such meeting, the Company (i) will promptly, after the consummation of the
Offer, prepare and file with the SEC, will use its best efforts to have
cleared by the SEC and will thereafter mail to its stockholders as promptly
as practicable the Company Proxy Statement and all other proxy materials for
such meeting, (ii) will use its best efforts to obtain the necessary approvals
by its stockholders of this Agreement and the transactions contemplated hereby
and (iii) will otherwise comply with all legal requirements applicable to such
meeting.
SECTION 6.03. Access to Information. From the date hereof
until the Effective Time, the Company will give Buyer, its counsel, financial
advisors, auditors and other authorized representatives reasonable access
during normal business hours to the offices, properties, books and records of
the Company and the Subsidiaries, will furnish to Buyer, its counsel,
financial advisors, auditors and other authorized representatives such
financial and operating data and other information as such Persons may
reasonably request and will instruct the Company's employees, counsel and
financial advisors to cooperate with Buyer in its investigation of the
business of the Company and the Subsidiaries; provided that all requests for
information, to visit plants or facilities or to interview the Company's
employees or agents should be directed to and coordinated with an executive
officer of the Company or one of the five general managers of the Company's
operations; and provided further that no investigation pursuant to this
Section shall affect any representation or warranty given by the Company to
Buyer hereunder and any information received by Buyer or its representatives
shall remain subject to the Confidentiality Agreement dated December 1, 1994
between Buyer and the Company (the "Confidentiality Agreement").
SECTION 6.04. Other Offers. From the date hereof until the
termination hereof, the Company and the Subsidiaries and the officers,
directors, employees or other agents of the Company and the Subsidiaries will
not, directly or indirectly, (i) take any action to solicit, initiate or
encourage any Acquisition Proposal or (ii) subject to the fiduciary duties of
the Board of Directors under applicable law as advised by counsel, engage in
negotiations with, or disclose any nonpublic information relating to the
Company or any Subsidiary or afford access to the properties, books or records
of the Company or any Subsidiary to, any Person that may be considering
making, or has made, an Acquisition Proposal. The Company will promptly
notify Buyer after receipt of any Acquisition Proposal or any indication that
any Person is considering making an Acquisition Proposal or any request for
nonpublic information relating to the Company or any Subsidiary or for access
to the properties, books or records of the Company or any Subsidiary by any
Person that may be considering making, or has made, an Acquisition Proposal
and will keep Buyer fully informed of the status and details of any such
Acquisition Proposal, indication or request. For purposes of this Agreement,
"Acquisition Proposal" means any offer or proposal for, or any indication of
interest in, a merger or other business combination involving the Company or
any Subsidiary or the acquisition of any equity interest in, or a substantial
portion of the assets of, the Company or any Subsidiary, other than the
transactions contemplated by this Agreement. Furthermore, nothing contained
in this Section 6.04 shall prohibit the Company or its Board of Directors from
taking and disclosing to the Company's shareholders a position with respect to
a tender or exchange offer by a third party pursuant to Rules 14d-9 and
14e-2(a) promulgated under the Exchange Act or from making such disclosure to
the Company's shareholders or otherwise which, in the judgment of the Board of
Directors with the advice of independent legal counsel, may be required under
applicable law or rules of any stock exchange.
SECTION 6.05. Notices of Certain Events. The Company shall
promptly notify Buyer of:
(i) any notice or other communication from any Person alleging
that the consent of such Person is or may be required in connection
with the transactions contemplated by this Agreement;
(ii) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement; and
(iii) any actions, suits, claims, investigations or proceedings
commenced or, to the best of its knowledge threatened against,
relating to or involving or otherwise affecting the Company or any
Subsidiary which, if pending on the date of this Agreement, would
have been required to have been disclosed pursuant to Section 4.13 or
which relate to the consummation of the transactions contemplated by
this Agreement.
SECTION 6.06. Amendment of Rights Agreement. The Company
agrees that promptly after the date hereof, and in any event within five days
of the date hereof, it will amend, to the extent necessary, its Amended and
Restated Shareholder Rights Agreement, dated as of August 7, 1992, between the
Company and the Bank of New York, as Rights Agent (the "Rights Agreement"), to
permit the commencement and closing of the Offer and the consummation of the
Merger without any such event or the passage of time resulting in the
occurrence of the Distribution Date (as defined in the Rights Agreement), and
upon the written request of Buyer, will redeem, in accordance with the terms
of the Rights Agreement all outstanding rights issued pursuant to the Rights
Agreement (the "Rights") at a redemption price of $.01 per Right. Except as
set forth above, the Company shall not redeem the Rights other than in
connection with a merger, consolidation, business combination, acquisition of
Shares or sale of assets or similar transaction that a majority of the Board
of Directors of the Company (excluding directors who are designees of the
Buyer or who are employees of the Company) determines in the exercise of its
fiduciary responsibilities is more favorable to the Company's stockholders
than the transactions contemplated hereby.
SECTION 6.07. Conveyance Taxes. The Company shall timely
pay any real property transfer or gains, sales, use, transfer, value added,
stock transfer and stamp taxes, any transfer, recording, registration and
other fees, and any similar taxes which become payable prior to the Effective
Time in connection with the transactions contemplated hereunder that are
required to be paid in connection therewith.
ARTICLE VII
COVENANTS OF BUYER
Buyer agrees that:
SECTION 7.01. Obligations of Merger Subsidiary. Buyer will
take all action necessary to cause Merger Subsidiary to perform its
obligations under this Agreement and to consummate the Merger on the terms and
conditions set forth in this Agreement.
SECTION 7.02. Voting of Shares. Buyer agrees to vote all
Shares beneficially owned by it or by its Subsidiaries in favor of adoption of
this Agreement at the Company Stockholder Meeting.
SECTION 7.03. Director and Officer Liability. For six years
after the Effective Time, Buyer will, and will cause the Surviving Corporation
to, (i) indemnify and hold harmless the present and former officers, directors,
employees and agents of the Company in respect of acts or omissions occurring
prior to the Effective Time (including, without limitation, in respect of acts
or omissions in connection with this Agreement and the transactions
contemplated hereby) and (ii) advance to such Persons expenses incurred in
defending any action or suit with respect to such matters, in each case to the
extent such Persons are entitled to indemnification or advancement of expenses
under the Company's or any Subsidiary's certificate of incorporation and
bylaws in effect on the date hereof and subject to the terms of such
certificates of incorporation and bylaws. In the event any claim or claims
are asserted or made within such six year period, all rights to
indemnification in respect of any such claim or claims shall continue until
disposition of any and all such claims. Buyer and the Company agree that all
rights to indemnification and all limitations on liability existing in favor
of any such officer, director, employee or agent as provided in the Company's
Certificate of Incorporation and By-laws as in effect as of the date hereof
shall survive the Merger and shall continue in full force and effect. Any
determination required to be made with respect to whether any of the foregoing
Persons is entitled to indemnification as set forth above shall be made by
independent legal counsel selected mutually by such Person and Buyer. For six
years after the Effective Time, Buyer will cause the Surviving Corporation to
use its best efforts to provide officers' and directors' liability insurance
in respect of acts or omissions occurring prior to the Effective Time covering
each such Person currently covered by the Company's officers' and directors'
liability insurance policy on terms with respect to coverage and amount no
less favorable than those of such policy in effect on the date hereof; provided
that in satisfying its obligation under this Section, Buyer shall not be
obligated to cause the Surviving Corporation to pay premiums in excess of
$400,000 per annum; provided further that if the premiums would exceed
$400,000 in a given year, the Surviving Corporation shall use its best efforts
to purchase coverage that in the opinion of the Surviving Corporation is the
best available for $400,000 per year. Buyer shall cause the Surviving
Corporation to continue to indemnify in accordance with the Company's past
practices each of the employees listed on Schedule 7.03 in respect of the
lawsuit set forth opposite such employee's name on Schedule 7.03.
ARTICLE VIII
COVENANTS OF BUYER
AND THE COMPANY
The parties hereto agree that:
SECTION 8.01. Best Efforts. Subject to the terms and
conditions of this Agreement, each party will use its best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement; provided that
Buyer and its affiliates shall not be required to agree to any consent decree
or order in connection with any objections of the Department of Justice or
Federal Trade Commission (each an "HSR Authority") to the transactions
contemplated by this Agreement or in connection with any objections of any
governmental authority in respect of the Exon-Florio Provision to the
transactions contemplated by this Agreement.
SECTION 8.02. Certain Filings. The Company and Buyer shall
cooperate with one another (a) in connection with the preparation of the
Company Disclosure Documents and the Offer Documents, and (b) in determining
whether any action by or in respect of, or filing with, any governmental body,
agency or official, or authority is required, or any actions, consents,
approvals or waivers are required to be obtained from parties to any material
contracts, in connection with the consummation of the transactions
contemplated by this Agreement and (c) in seeking any such actions, consents,
approvals or waivers or making any such filings, furnishing information
required in connection therewith or with the Company Disclosure Documents or
the Offer Documents and seeking timely to obtain any such actions, consents,
approvals or waivers.
SECTION 8.03. Public Announcements. Buyer and the Company
will consult with each other before issuing any press release or making any
public statement with respect to this Agreement and the transactions
contemplated hereby and, except as may be required by applicable law or any
listing agreement with any national securities exchange or foreign securities
exchange, will not issue any such press release or make any such public
statement prior to such consultation.
SECTION 8.04. Conveyance Taxes. Buyer and the Company
shall cooperate in the preparation, execution and filing of all returns,
questionnaires, applications, or other documents regarding any real property
transfer or gains, sales, use, transfer, value added, stock transfer and stamp
taxes, any transfer, recording, registration and other fees, and any similar
taxes which become payable in connection with the transactions contemplated
hereunder that are required or permitted to be filed on or before the
Effective Time.
SECTION 8.05. Further Assurances. At and after the Effective
Time, the officers and directors of the Surviving Corporation will be
authorized to execute and deliver, in the name and on behalf of the Company or
Merger Subsidiary, any deeds, bills of sale, assignments or assurances and to
take and do, in the name and on behalf of the Company or Merger Subsidiary,
any other actions and things to vest, perfect or confirm of record or
otherwise in the Surviving Corporation any and all right, title and interest
in, to and under any of the rights, properties or assets of the Company
acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger.
SECTION 8.06. Employee Matters. (a) Except as provided in
(c), Buyer and Merger Subsidiary agree that, effective as of the Effective
Time and for a six month period following the Effective Time, the Surviving
Corporation and its Subsidiaries and successors shall continue for those
persons who, immediately prior to the Effective Time, were employees of the
Company or its Subsidiaries ("Retained Employees") the Employee Plans and
material Benefit Arrangements or provide benefits that are not less favorable
in the aggregate to such Employee Plans and Benefit Arrangements. With
respect to such benefits, service accrued by such Retained Employees during
employment with the Company and its Subsidiaries prior to the Effective Time
shall be recognized to the extent and for the purposes such service was
recognized prior to the Effective Time by the applicable Employee Plan or
Benefit Arrangements. Nothing contained in the foregoing is intended to
preclude the Surviving Corporation from terminating the employment of any
Retained Employee after the Effective Time. Further, none of Buyer, the
Merger Subsidiary or the Surviving Corporation shall be required to recognize
service with the Company or its Subsidiaries prior to the Effective Time after
the end of such six month period except as required by law; provided that with
respect to Retained Employees who are participants in a nonunion Employee
Plan, the Buyer and the Merger Subsidiary agree to cause its nonunion employee
benefit plans ("Benefit Plans") to recognize, for purposes of vesting and
eligibility to participate only, service which is recognized for such purposes
by the comparable Employee Plan with respect to Retained Employees who
otherwise become eligible to participate in a Benefit Plan.
(b) Buyer and Merger Subsidiary agree to honor, and cause the
Surviving Corporation to honor, without modification, the Employee Agreements
on the same terms as disclosed in Schedule 4.15 hereof (whether or not executed
as of the date hereof), and all Supplemental Retirement and Death Benefit
Agreements, as amended through December 31, 1994, between the Company and
certain officers (collectively, "Retirement Agreements") which Employee
Agreements and Retirement Agreements are listed on Schedule 4.15 hereto.
Buyer and Merger Subsidiary acknowledge that the consummation of the Offer
shall constitute a "change in control" for purposes of the Employee Agreements
and Retirement Agreements.
(c) For the fiscal year of the Company ending June 30, 1995,
the Company shall determine the bonus pools for the short term bonus
arrangements of the Company using the same objective criteria that were used
to determine such bonus pools for the fiscal year of the Company ended June
30, 1994. The Buyer shall, to the extent said bonus arrangements call for a
discretionary allocation of the bonus pool, allocate the entire bonus pool and
consult with Messrs. Banks, Frank, and Keane to ascertain their views with
respect to the appropriate allocation of said bonus pool.
(d) As of the Effective Time, all participants in the
Company's Employee Stock Ownership and Savings Plan ("ESOP") shall become
fully vested in their account balances under the ESOP. Buyer and Merger
Subsidiary acknowledge that, prior to the consummation of the Offer, the
Company may make such contribution to the ESOP as may be necessary to permit
the ESOP to repay any remaining debt of the ESOP and may allocate, as of the
Effective Time (as if the Effective Time were the last day of the ESOP's plan
year), the remainder of its Shares to the ESOP accounts of ESOP participants
in accordance with the provisions of the ESOP, Buyer and Merger Subsidiary
agree that the Company may cause the ESOP to be terminated as of the Effective
Time and may take such steps as may be necessary (including amending the ESOP
and its related trust) to cause the trustee of the ESOP to offer each ESOP
participant the opportunity to receive his or her account balance under the
ESOP in a lump sum distribution as soon as practicable after the date the
amounts described herein have been allocated or to have such account balance
transferred to an individual retirement account.
(e) Buyer and Merger Subsidiary agree to honor, and cause the
Surviving Corporation to honor, without modification, for such directors
and/or former directors and in such amounts as are set forth in Schedule 4.15,
the Company's Non-Employee Director Fee Continuation Plan and the individual
fee continuation agreement set forth on such Schedule 4.15, which provides
certain benefits to non-employee directors, and agrees and acknowledges that
consummation of the Offer shall constitute a "Change in Control" for purposes
of such Plan.
(f) In the event Buyer or Merger Subsidiary or the Surviving
Corporation or any of their successors or assigns (i) consolidates with or
merges into any other person and shall not be the continuing or surviving
corporation or entity of such consolidation or merger, or (ii) transfers or
conveys all substantially all of its properties and assets to any person,
then, and in each such case, to the extent necessary to effectuate the
purposes of this Section 8.05, proper provision shall be made so that the
successors and assigns of Buyer, Merger Subsidiary or the Surviving
Corporation, as the case may be, assume the obligations set forth in this
Section 8.05 and none of the actions described in clauses (i) and (ii) shall
be taken until such provision is made.
ARTICLE IX
CONDITIONS TO THE MERGER
SECTION 9.01. Conditions to the Obligations of Each Party.
The obligations of the Company, Buyer and Merger Subsidiary to consummate the
Merger are subject to the satisfaction of the following conditions:
(i) if required by New York Law, this Agreement shall have
been adopted by the stockholders of the Company in accordance with
such Law;
(ii) any applicable waiting period under the HSR Act relating to
the Merger shall have expired;
(iii) no provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation
of the Merger;
(iv) Buyer shall have purchased Shares pursuant to the Offer;
(v) any applicable waiting period under the Exon-Florio
Provision relating to the Merger shall have expired; and
(vi) Buyer shall have received or be reasonably satisfied that
it will receive all consents and approvals contemplated by Section
4.04 or other material consents necessary in connection with the
consummation of the Merger or to enable the Surviving Corporation to
continue to carry on the business of the Company and the Subsidiaries
as presently conducted in all material respects.
ARTICLE X
TERMINATION
SECTION 10.01. Termination. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time
(notwithstanding any approval of this Agreement by the stockholders of the
Company):
(i) by mutual written consent of the Company and Buyer;
(ii) by either the Company or Buyer if the Offer has not been
consummated by August 31, 1995 (as such date may be extended pursuant
to the proviso to this sentence, the "Outside Termination Date");
provided that if an HSR Authority shall have requested additional
information from any of the parties hereto or any of their affiliates
pursuant to 15 U.S.C. Section 18a(e)(1) or the rules and regulations
thereunder on or prior to August 31, 1995, Buyer may elect to change
the Outside Termination Date to a date not later than October 31,
1995 if this Agreement has not been terminated by the Company
pursuant to the terms of this Agreement prior to the date of such
election; provided, however, that the right to terminate this
Agreement under this paragraph shall not be available to any party
whose failure to fulfill any obligation under this Agreement has been
the cause of, or resulted in, the failure to meet the date
requirements of this paragraph;
(iii) by either the Company or Buyer, if there shall be any law
or regulation that makes consummation of the Merger illegal or if any
judgment, injunction, order or decree enjoining Buyer or the Company
from consummating the Merger is entered and such judgment,
injunction, order or decree shall become final and nonappealable;
(iv) by Buyer, upon the occurrence of any Trigger Event
described in Section 11.04(b);
(v) by the Company, upon the occurrence of the Trigger Event
described in clause (i) or (ii) of Section 11.04(b);
(vi) by the Company if Buyer or Merger Subsidiary breaches or
fails in any material respect to perform or comply with any of its
material covenants and agreements contained herein or breaches its
representations and warranties in any material respect; or
(vii) by Buyer, if Buyer shall have received any communication
from an HSR Authority (which communication shall be confirmed to the
other parties by the HSR Authority) that causes such party to
reasonably believe that any HSR Authority has authorized the
institution of litigation challenging the transactions contemplated
by this Agreement under the U.S. antitrust laws, which litigation
will include a motion seeking an order or injunction prohibiting the
consummation of any of the transactions contemplated by this
Agreement.
The party desiring to terminate this Agreement pursuant to clauses (ii),
(iii), (iv), (v), (vi) or (vii) shall give written notice of such termination
to the other party.
SECTION 10.02. Effect of Termination. If this Agreement is
terminated pursuant to Section 10.01, this Agreement shall become void and of
no effect with no liability on the part of any party hereto, except that the
agreements contained in Section 11.04 and the Confidentiality Agreement shall
survive the termination hereof.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including telecopy
or similar writing) and shall be given,
if to Buyer or Merger Subsidiary, to:
Imperial Chemical Industries PLC
9 Millbank
London SW1P 3JF
England
Telecopy: (071) 798-5878
Attention: Company Secretary
with a copy to:
Paul R. Kingsley, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telecopy: (212) 450-4800
if to the Company, to:
Grow Group, Inc.
Metropolitan Life Building
200 Park Avenue
New York, NY 10166
Telecopy: (212) 286-0940
Attention: Mr. Russell Banks, President and
Chief Executive Officer
with a copy to:
Parker Chapin Flattau & Klimpl
1211 Avenue of the Americas
New York, New York 10036
Telecopy: (212) 704-6288
Attention: Lloyd Frank, Esq.
and a copy to:
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
Telecopy: (212) 735-2000
Attention: Daniel E. Stoller, Esq.
or such other address or telecopy number as such party may hereafter specify
for the purpose by notice to the other parties hereto. Each such notice,
request or other communication shall be effective (i) if given by telecopy,
when such telecopy is transmitted to the telecopy number specified in this
Section and the appropriate telecopy confirmation is received or (ii) if given
by any other means, when delivered at the address specified in this Section.
SECTION 11.02. Survival of Representations and Warranties.
The representations and warranties contained herein and in any certificate or
other writing delivered pursuant hereto shall not survive the Effective Time
or the termination of this Agreement. All covenants and agreements contained
herein which by their terms are to be performed in whole or in part subsequent
to the Effective Time shall survive the Merger in accordance with their terms.
Nothing contained in this Section 11.02 shall relieve any party from liability
for any willful breach of this Agreement.
SECTION 11.03. Amendments; No Waivers. (a) Any provision of
this Agreement may be amended or waived prior to the Effective Time if, and
only if, such amendment or waiver is in writing and signed, in the case of an
amendment, by the Company, Buyer and Merger Subsidiary or in the case of a
waiver, by the party against whom the waiver is to be effective; provided that
after the adoption of this Agreement by the stockholders of the Company, no
such amendment or waiver shall, without the further approval of such
stockholders, alter or change (i) the amount or kind of consideration to be
received in exchange for any shares of capital stock of the Company or (ii)
any of the terms or conditions of this Agreement if such alteration or change
could adversely affect the holders of any shares of capital stock of the
Company.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights
and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 11.04. Expenses. (a) Except as otherwise provided in
this Section, all costs and expenses incurred in connection with this
Agreement shall be paid by the party incurring such cost or expense.
(b) The Company agrees to pay Buyer in respect of its expenses
an amount in immediately available funds equal to $8,000,000 promptly, but in
no event later than two business days, after the occurrence of any of the
events set forth below (a "Trigger Event"):
(i) the Company shall have entered into, or shall have
publicly announced its intention to enter into, an agreement or an
agreement in principle with respect to any Acquisition Proposal other
than the transactions contemplated by this Agreement;
(ii) the Board of Directors of the Company shall have withdrawn
or materially modified its approval or recommendation of the Offer or
this Agreement other than as a result of Buyer's breach of this
Agreement; or
(iii) any person or group (as defined in Section
13(d)(3) of the Exchange Act) (other than Buyer or any of its
affiliates) shall have become the beneficial owner (as defined in
Rule 13d-3 promulgated under the Exchange Act) of at least 25% of any
class or series of capital stock of the Company (including the
Shares), or shall have acquired, directly or indirectly, at least 25%
of the assets of the Company other than acquisitions of securities
for bona fide arbitrage purposes only and other than Corimon or its
affiliates; or Corimon and its affiliates shall beneficially own more
than 28% of the Shares.
SECTION 11.05. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other parties hereto except that Buyer
may transfer or assign, in whole or from time to time in part, to one or more
of its direct or indirect wholly owned subsidiaries, the right to purchase
Shares pursuant to the Offer, but any such transfer or assignment will not
relieve Buyer 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 11.06. Governing Law. This Agreement shall be
construed in accordance with and governed by the law of the State of New York
without regard to conflicts of laws.
SECTION 11.07. Severability. If any term or other provision
of this Agreement is invalid, illegal or incapable of being enforced by any
rule of law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated herein is not
affected in any manner materially adverse to any party hereto. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner.
SECTION 11.08. Third Party Beneficiaries. No provision of
this Agreement other than Sections 7.03 and 8.05 is intended to confer upon
any Person other than the parties hereto any rights or remedies hereunder.
SECTION 11.09. Entire Agreement. This Agreement, including
any exhibits or schedules hereto and the Confidentiality Agreement constitutes
the entire agreement among the parties hereto with respect to the subject
matter hereof and supersede all other prior agreements or undertaking with
respect thereto, both written and oral.
SECTION 11.10. Counterparts; Effectiveness. This Agreement
may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement shall become effective when each
party hereto shall have received counterparts hereof signed by all of the
other parties hereto.
SECTION 11.11. Jurisdiction. Any legal action or proceeding
with respect to this Agreement or any matters arising out of or in connection
with this Agreement, and any action for enforcement of any judgment in respect
thereof shall be brought exclusively in the courts of the State of New York or
of the United States of America for the Southern District of New York, and, by
execution and delivery of this Agreement, the Company, Buyer and Merger
Subsidiary each hereby accepts for itself and in respect of its property,
generally and unconditionally, the exclusive jurisdiction of the aforesaid
courts and appellate courts thereof. The Company, Buyer and Merger Subsidiary
irrevocably consent to service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, or by recognized international
express carrier or delivery service, to the Company, Buyer or Merger
Subsidiary at their respective addresses referred to in Section 11.01 hereof.
In addition, each of Buyer and Merger Subsidiary hereby designates ICI
American Holdings Inc. ("Agent"), Olympic Towers, 645 Fifth Avenue, 12th
Floor, New York, New York 10022 as its respective agent for service of
process, and service upon Buyer or Merger Subsidiary shall be deemed to be
effective upon service of Agent as aforesaid or of its successor designated in
accordance with the following sentence. If Agent changes its address, Buyer
will provide the Company with not less than 30 days advance notice of such
change. Buyer and Merger Subsidiary shall maintain an agent for service of
process in the Borough of Manhattan. Buyer or Merger subsidiary may designate
another corporate agent or law firm reasonably acceptable to the Company and
located in the Borough of Manhattan, in the City of New York, as successor
agent for service of process upon 30-days prior written notice to the Company.
The Company, Buyer and Merger Subsidiary each hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in connection with this
Agreement or otherwise brought in the courts referred to above and hereby
further irrevocably waives and agrees, to the extent permitted by applicable
law, not to plead or claim in any such court that any such action or
proceedings brought in any such court has been brought in an inconvenient
forum. Nothing herein shall affect the right of any party hereto to serve
process in any other manner permitted by law.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective authorized officers as
of the day and year first above written.
GROW GROUP, INC.
By: /s/ Russell Banks
Name: Russell Banks
Title: President
IMPERIAL CHEMICAL INDUSTRIES PLC
By: /s/ John Thompson
Name: John Thompson
Title Attorney-in-Fact
GDEN CORPORATION
By: /s/ John Danzeisen
Name: John Danzeisen
Title: Attorney-in Fact
ANNEX I
CONDITIONS TO THE OFFER
Notwithstanding any other provisions of the Offer, and in
addition to (and not in limitation of) Buyer's rights to extend and amend the
Offer at any time in its sole discretion (subject to the provisions of the
Merger Agreement), Buyer shall not be required to accept for payment or,
subject to any applicable rules and regulations of the SEC, including Rule
14e-1(c) under the Exchange Act (relating to the Buyer's obligation to pay for
or return tendered Shares promptly after termination or withdrawal of the
Offer), pay for, and may delay the acceptance for payment of or, subject to
the restriction referred to above, the payment for, any tendered Shares, and
may terminate the Offer if (i) any applicable waiting period under the HSR Act
or Exon-Florio Provision has not expired or terminated prior to the expiration
of the Offer, (ii) the Minimum Condition has not been satisfied, (iii) the
Rights under the Rights Agreement shall have become exercisable, or (iv) at
any time on or after April 30, 1995 and before the time of acceptance of
Shares for payment pursuant to the Offer, any of the following conditions
shall exist:
(a) there shall be instituted and pending by any
domestic or foreign federal or state governmental regulatory or administrative
agency or authority or court or legislative body or commission ("Governmental
Entity") (or the staff of any HSR Authority shall have recommended the
commencement of) any action or proceeding which (1) seeks to prohibit, or
impose any material limitations on, Buyer's or Merger Subsidiary's ownership
or operation of all or a material portion of the businesses or assets of the
Company and its Subsidiaries, taken as a whole, or to compel Buyer or any of
its subsidiaries or affiliates to dispose of or hold separate all or any
material portion of the business or assets of the Company and its
Subsidiaries, taken as a whole, or of Buyer or its subsidiaries, (2) seeks to
prohibit, or make illegal, the acceptance for payment, payment for or purchase
of Shares or the consummation of the Offer or the Merger, (3) challenges or
seeks to make illegal, to delay materially or to restrain or prohibit, the
making of the Offer, or seeks to restrain or limit the ability of Buyer, or
renders Buyer unable, to accept for payment, pay for or purchase some or all
of the Shares, or to consummate the Merger, or seeks material damages relating
to the transactions contemplated by the Offer or the Merger or (4) imposes
material limitations on the ability of Merger Subsidiary or Buyer effectively
to exercise full rights of ownership of the Shares, including without
limitation, the right to vote the Shares purchased by it on all matters
properly presented to the Company's shareholders;
(b) there shall have been any action taken, or any
statute, rule, regulation, judgment, order or injunction promulgated, entered,
enforced, enacted, issued or applicable to the Offer or the Merger by any
Governmental Entity that results in any of the consequences referred to in
clauses (1) through (4) of paragraph (a) above;
(c) unless the Shares properly tendered constitute not
less than two-thirds of the outstanding Shares on a fully diluted basis, any
event or action shall have occurred that shall materially impair, restrain or
prohibit or to materially delay the acquisition by Buyer of the Corimon Shares
in accordance with the terms of the Corimon Option Agreement;
(d) the representations and warranties of the Company
set forth in the Merger Agreement (without giving effect to any qualification
as to materiality or Material Adverse Effect contained therein) shall not be
true and correct as of the date of consummation of the Offer as though made on
or as of such date or the Company shall have breached or failed to perform or
comply with any obligation, agreement or covenant required by the Merger
Agreement to be performed or complied with by it except, in each case, (i) for
changes specifically permitted by the Merger Agreement and (ii) (A) those
representations and warranties that address matters only as of a particular
date which are true and correct as of such date or (B) where the failure of
such representations and warranties to be true and correct, or the performance
or compliance with such obligations, agreements or covenants, individually or
in the aggregate, do not have, and could not reasonably be expected to have, a
Material Adverse Effect or a material adverse effect on the ability of Buyer
to consummate the Offer or the Merger;
(e) the Merger Agreement shall have been terminated in
accordance with its terms;
(f) any person, entity or "group" (as defined in
Section 13(d)(3) of the Exchange Act), shall have acquired beneficial
ownership (determined pursuant to Rule 13d-3 promulgated under the Exchange
Act) of more than 25% of any class or series of capital stock of the Company
(including the Shares), through the acquisition of stock, the formation of a
group or otherwise, other than Corimon or its affiliates; or Corimon and its
affiliates shall have acquired beneficial ownership of more than 28% of the
outstanding Shares or (ii) the Company shall have entered into a definitive
agreement or agreement in principle with any person with respect to an
Acquisition Proposal or similar business combination with the Company;
(g) the Company's Board of Directors shall have
withdrawn, or modified or changed in a manner adverse to Buyer or Merger
Subsidiary (including by amendment of the Schedule 14D-9) its recommendation
of the Offer, the Merger Agreement, or the Merger, or recommended another
proposal or offer, or shall have resolved to do any of the foregoing; or
(h) Buyer shall not have received and shall not be
satisfied that it will receive the consents and approvals required under ISRA
or the Credit Agreement in connection with the consummation of the Offer or
the Merger;
which in the sole judgment of Buyer or Merger Subsidiary, in any such case,
and regardless of the circumstances giving rise to such condition, makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment
or payments.
The foregoing conditions are for the sole benefit of Merger
Subsidiary and Buyer and may be waived by Buyer or Merger Subsidiary, in whole
or in part at any time and from time to time in the sole discretion of Buyer
or Merger Subsidiary. The failure by Buyer at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right; the waiver of
any such right with respect to particular facts and other circumstances shall
not be deemed a waiver with respect to any other facts and circumstances; and
each such right shall be deemed an ongoing right that may be asserted at any
time and from time to time.
OPTION AGREEMENT
OPTION AGREEMENT, dated as of April 30, 1995 (this
"Agreement"), among Imperial Chemical Industries PLC, a corporation organized
under the laws of England ("Buyer"), GDEN Corporation, a New York corporation
and an indirect wholly owned subsidiary of Buyer ("Merger Subsidiary"),
Corimon Corporation, a Delaware corporation ("Stockholder" or "Corimon
Corp."), and Corimon, S.A.C.A., a Venezuelan corporation ("Corimon").
WHEREAS, Buyer and Merger Subsidiary have entered into an
Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"), with Grow Group, Inc., a New York corporation (the "Company"),
which provides, among other things, for the acquisition by Buyer or its
assignee of all the outstanding shares of Common Stock, par value $0.10 per
share, of the Company (the "Company Common Stock") through (a) a tender offer
(the "Offer") for all shares of the Company Common Stock for $18.10 per share,
net to the sellers thereof in cash (the "Per Share Amount"), subject to any
amounts required to be withheld under applicable federal, state, local or
foreign income tax regulations and (b) a second-step merger pursuant to which
Merger Subsidiary will merge with and into the Company (the "Merger") and all
outstanding shares of the Company Common Stock other than shares of the
Company Common Stock held by the Company as treasury stock or owned by Buyer,
Merger Subsidiary or any other subsidiary of Buyer will be converted into the
right to receive the Per Share Amount in cash, subject to any amounts required
to be withheld under applicable federal, state, local or foreign income tax
regulations; and
WHEREAS, as of the date hereof, Stockholder owns beneficially
4,025,841 shares of Company Common Stock (the "Shares");
WHEREAS, as a condition to the willingness of Buyer and Merger
Subsidiary to enter into the Merger Agreement, Buyer and Merger Subsidiary
have required that the Stockholder agree, and in order to induce Buyer and
Merger Subsidiary to enter into the Merger Agreement, the Stockholder has
agreed, to grant Buyer an option to purchase the Shares in accordance with the
terms of this Agreement; and
WHEREAS, members of the Board of Directors of the Company who
are not designees of Corimon, in accordance with the Standstill Agreement
between the Company, Corimon and Stockholder, dated July 21, 1992, as amended,
have adopted a resolution permitting Stockholder and Corimon to enter into and
perform their obligations under this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein, and intending to be legally
bound hereby, the parties hereto agree as follows:
ARTICLE I
OPTION
Section 1.1. Grant of Stock Option. Stockholder hereby irrevocably
grants to Buyer an option (the "Option") to purchase the Shares at a purchase
price of $17.50 per Share (the "Purchase Price").
Section 1.2. Exercise of Option. (a) Subject to the satisfaction
of the conditions set forth in Section 1.4 hereof, the Option may be exercised
by Buyer in whole but not in part at any time prior to the earlier of (i)
November 5, 1995 and (ii) five business days after the Outside Termination
Date (as defined in the Merger Agreement); provided that Buyer may exercise
the Option only if the Minimum Condition has been satisfied. Upon exercise of
the Option, Buyer shall send a written notice (the "Exercise Notice") to
Stockholder specifying the places, the dates (which (a) in the case of
2,173,362 Shares, shall be two business days after the date of the Exercise
Notice; (b) in the case of 1,336,360 Shares, shall be a business day not less
than 10 calendar days, nor more than 15 calendar days after the date of the
Exercise Notice; and (c) in the case of 516,129 Shares, shall be a business
day not less than 15 calendar days nor more than 20 calendar days after the
date of the Exercise Notice), and the times for the closings of such
purchases. The closings of the purchases of the Shares (the "Closings") shall
take place in New York, New York at the places, on the dates and at the times
designated by Buyer in its Exercise Notice, provided that if, at the date of
any Closing herein provided for, the conditions set forth in Section 1.4 shall
not have been satisfied or waived by Stockholder, Buyer may postpone such
Closing until a date within two business days after such conditions are
satisfied. For purposes of this Agreement, the "Minimum Condition" shall have
been satisfied only if (i) Buyer has paid for or accepted for payment all
shares of Company Common Stock properly tendered and not withdrawn pursuant to
the Offer (the "Tendered Shares") in accordance with the terms of the Offer
and the Merger Agreement and (ii) the Tendered Shares plus the Shares
constitute not less than a majority of the outstanding Shares of Company
Common Stock on a fully diluted basis.
(b) Buyer shall not be under any obligation to deliver any Exercise
Notice and may allow the Option to expire without purchasing the Shares
hereunder; provided however that once Buyer has delivered to the Stockholder an
Exercise Notice, subject to the terms and conditions of this Agreement, Buyer
shall be bound to effect the purchase as described in such Exercise Notice;
and provided further that if the Minimum Condition is satisfied, Buyer shall
thereafter be bound to exercise the Option within two business days following
the date of such satisfaction.
(c) Stockholder shall not, and shall not agree to, sell,
assign, transfer, tender or otherwise dispose of any Shares to any Person or
group that has commenced a tender offer for, or proposed to acquire, at least
50% of the outstanding Shares of Company Common Stock, except pursuant to, and
at the price per share payable in, such offer or proposal.
Section 1.3. Closing. At each Closing, (a) the Stockholder shall
deliver or cause to be delivered to Buyer a certificate or certificates (the
"Certificates") representing the number of Shares to be purchased at such
Closing duly endorsed, or accompanied by stock powers duly executed in blank,
with all required transfer tax stamps affixed thereto and (b) Buyer shall
deliver to the Stockholder or its designee(s) a certified or bank cashier's
check or checks payable to or upon the order of the Stockholder, or, at the
option of Stockholder, a wire transfer to an account in the United States
designated by Stockholder, in an amount equal to (i) the number of Shares to
be purchased at such Closing multiplied by (ii) the Purchase Price (the
"Purchase Amount").
Section 1.4. Conditions to the Stockholder's Obligations. The
obligation of the Stockholder to sell Shares at any Closing is subject to the
following conditions:
(i) All waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder (the "HSR Act") applicable to the exercise of
the Option shall have expired or been terminated.
(ii) There shall be no preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative
agency or commission having authority with respect thereto, nor any
statute, rule, regulation or order promulgated or enacted by any such
governmental authority, prohibiting or otherwise restraining the
exercise of the Option or the sale of the Shares pursuant thereto.
Section 1.5. Adjustment Upon Certain Changes. (a) In the event of
any change in the Company's capital stock by reason of stock dividends, stock
splits, mergers, consolidations, recapitalizations, combinations, conversions,
exchanges of shares, extraordinary or liquidating dividends, or other changes
in the corporate or capital structure of the Company, which would have the
effect of diluting or changing the Buyer's rights hereunder, the number and
kind of shares or securities subject to the Option and the purchase price per
Share shall be appropriately and equitably adjusted so that the Buyer shall
receive upon exercise of the Option the number and class of shares or other
securities or property that the Buyer would have received in respect of the
Shares purchasable upon exercise of the Option if the Option had been exercised
immediately prior to such event.
(b) In the event the consideration per Share paid by Buyer pursuant
to the Offer or the Merger Agreement is increased, the Purchase Price shall be
increased by an amount equal to the amount of such increase.
ARTICLE II
COVENANTS OF THE STOCKHOLDER
Section 2.1. No Disposition or Encumbrance of Shares. Except
as contemplated by Article I above, and except for any Lien (as defined below)
existing as of the date hereof, Stockholder hereby covenants and agrees, that,
except as contemplated by this Agreement, it shall not, and shall not offer or
agree to, sell, transfer, tender, assign, hypothecate or otherwise dispose of,
or create or permit to exist any security interest, lien, claim, pledge,
option, right of first refusal, agreement, limitation on Stockholder's voting
or dispositive rights, charge or other encumbrance of any nature whatsoever
(collectively, "Liens") with respect to the Shares. For the avoidance of
doubt, Stockholder hereby agrees that it will not tender the Shares into the
Offer unless directed to do so by Buyer; provided that if it is so directed by
Buyer, Stockholder will, to the extent permitted by the Permitted Liens (as
defined below), properly tender or cause to be tendered the Shares into the
Offer and, so long as the Option is outstanding, not withdraw such Shares; and
provided further that if the Shares are purchased pursuant to the Offer,
Stockholder will pay, subject to applicable law, to Buyer a fee in cash equal
to $.60 multiplied by the number of Shares (such fee to be paid by Stockholder
upon payment by Buyer of the consideration for the Shares).
Section 2.2. No Solicitation of Transactions. (a) Each of
Stockholder and Corimon agrees that it shall not, and shall not permit any
affiliate to, directly or indirectly, through any agent or representative or
otherwise, (i) take any action to solicit, initiate or encourage any
Acquisition Proposal (as defined below); (ii) except as may be required by
Arthur Broslat, Philippe Erard and Harold Bittle (the "Corimon Directors") in
the exercise of their fiduciary duties in their capacity as members of the
Board of Directors of the Company, engage in negotiations with, or disclose
any nonpublic information relating to the Company or any subsidiary of the
Company or afford access to the properties, books or records of the Company or
any subsidiary of the Company to, any Person (as defined below) that may be
considering making, or has made, an Acquisition Proposal; or (iii) except as
may be required by the Corimon Directors in the exercise of their fiduciary
duties in their capacity as members of the Board of Directors of the Company,
otherwise cooperate in any way with, or assist or participate in or facilitate
or encourage, any effort or attempt by any Person to do or seek any of the
foregoing. Except as may be required by the Corimon Directors in the exercise
of their fiduciary duties in their capacity as members of the Board of
Directors of the Company, each of Stockholder and Corimon agrees that it shall
cease and cause to be terminated all existing discussions or negotiations in
which it or any of its agents or other representatives is or has been engaged
with any Person with respect to any of the foregoing. Stockholder and Corimon
shall notify Buyer and the Company promptly after receipt of any Acquisition
Proposal or any indication that any Person is considering making an Acquisition
Proposal or any request for nonpublic information relating to the Company or
any subsidiary of the Company or for access to the properties, books or
records of the Company or any subsidiary of the Company by any Person that may
be considering making, or has made, an Acquisition Proposal and will keep
Buyer fully informed of the status and details of any such Acquisition
Proposal, indication or request.
For the purposes of this Agreement, (i) "Person" means an
individual, a corporation, limited liability company, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or any agency or instrumentality thereof
other than Buyer or any of its affiliates and (ii) "Acquisition Proposal"
means any offer or proposal for, or any indication of interest in, a merger or
other business combination involving the Company or any subsidiary of the
Company or the acquisition of any equity interest in, or a substantial portion
of the assets of, the Company or any subsidiary of the Company, other than the
transactions contemplated by the Merger Agreement.
(b) If there shall be a conflict between the terms of this
Agreement and the terms of the Merger Agreement with respect to the actions
that may or shall be taken by any person pursuant to such person's fiduciary
duties, the terms of the Merger Agreement shall supersede the terms of this
Agreement.
Section 2.3. Voting Agreement. Stockholder hereby agrees that
prior to the time, if any, that the Merger Agreement is terminated, at any
meeting of the stockholders of the Company, however called, and in any action
by consent of the stockholders of the Company, Stockholder shall vote the
Shares: (a) in favor of the Merger, the Merger Agreement (as amended from time
to time) or any of the transactions contemplated by the Merger Agreement; and
(b) against any proposal for any recapitalization, merger, sale of assets or
other business combination between the Company and any Person (other than the
Merger) or any other action or agreement that would result in a breach of any
covenant, representation or warranty or any other obligation or agreement of
the Company under the Merger Agreement or which could result in any of the
conditions to any party's obligations under the Merger Agreement not being
fulfilled. Stockholder acknowledges receipt of a copy of the Merger Agreement.
Section 2.4. Certain Claims. Each of Corimon and Stockholder
agrees that it will not assert that the Board of Directors of the Company has
breached its fiduciary duties to Corimon and Stockholder if, at any time prior
to the termination of the Merger Agreement, the Board of Directors of the
Company refuses to accept or recommend an offer by a third party to acquire
any or all of the outstanding shares of Company Common Stock for consideration
not in excess of $18.10 per share. Subject to the consummation of the Offer,
Corimon and Stockholder agree to waive any claims they may have against the
Company or any of its officers or directors with respect to the ownership
interest represented by the Shares to the extent such claims (i) arise under
any contract or agreement with the Company or (ii) relate to an alleged breach
of a fiduciary duty.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations and Warranties of Corimon and
Stockholder.
(a) Each of Stockholder and Corimon hereby jointly and severally
represents and warrants that:
(i) it is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of
incorporation, and it has all corporate power, authority,
capacity and right to enter into this Agreement and to
consummate the transactions contemplated hereby;
(ii) the execution and delivery of this Agreement and the
performance by it of its obligations hereunder are within its
corporate powers and have been duly authorized by all necessary
corporate action on its part; this Agreement has been duly
executed and delivered by it and constitutes a valid and
binding agreement enforceable by Buyer and Merger Subsidiary
against it in accordance with its terms, except as the
enforceability hereof may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally and except for limitations imposed
by general principles of equity;
(iii) assuming compliance with the matters set forth in subsection
(iv), no approval, authorization, consent or filing is required
in connection with the execution, delivery and performance of
this Agreement by it;
(iv) assuming the applicable waiting periods under the HSR Act have
expired or been terminated and assuming compliance with the
Exchange Act and the Permitted Liens, the execution, delivery
and performance of this Agreement by it does not and will not
contravene or conflict with or, with the passage of time, the
serving of notice or both, violate or constitute a default
under any agreement, contract or other instrument, or any law,
rule, regulation, order or decree, binding upon or applicable
to it;
(v) Stockholder is the sole beneficial owner of the Shares subject
to no Liens except as set forth on Schedule A hereto (the
"Permitted Liens"), and the Shares are the only shares of
Company Common Stock which Stockholder or Corimon owns, has any
rights to acquire or over which Stockholder or Corimon
exercises control or direction either alone or in concert with
third parties;
(vi) Shareholder has provided Buyer with a true and correct copy of
all agreements relating to the Permitted Liens;
(vii) Stockholder has the right to dispose of and vote its Shares as
provided in this Agreement subject to the Permitted Liens; and,
(viii) at each Closing, Stockholder will convey to Buyer good and
valid title to the Shares to be purchased at such Closing free
and clear of any Liens, including without limitation, the
Permitted Liens.
Section 3.2. Representations and Warranties of Buyer. Buyer
hereby represents and warrants that Buyer and Merger Subsidiary are each
corporations duly incorporated and validly existing under the laws of their
jurisdictions of incorporation, Buyer and Merger Subsidiary each has all
necessary corporate power, authority, capacity and right to enter into this
Agreement and to consummate the transactions contemplated hereby and this
Agreement has been duly executed and delivered by Buyer and Merger Subsidiary
and constitutes a valid and binding agreement enforceable by Stockholder and
Corimon against Buyer and Merger Subsidiary in accordance with its terms
except as the enforceability hereof may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting the enforcement of creditors'
rights generally and except for limitations imposed by general principles of
equity.
ARTICLE IV
MISCELLANEOUS
Section 4.1. Expenses. Except as otherwise provided herein or
in the Merger Agreement, all costs and expenses incurred in connection with
the transactions contemplated by this Agreement shall be paid by the party
incurring such expenses.
Section 4.2. Further Assurances. Subject to any applicable
limits on Buyer's and Merger Subsidiary's obligations under the Merger
Agreement, each of Stockholder, Corimon, Buyer and Merger Subsidiary will
execute and deliver all such further documents and instruments and take all
such further action as may be necessary in order to permit the consummation of
the transactions contemplated hereby and to coordinate a mutually convenient
closing. Stockholder and Corimon agree to use their best efforts to take all
necessary actions, and to obtain all necessary consents and amendments, with
respect to the Permitted Liens (i) to permit each of the Closings to take
place as promptly as possible after the satisfaction of the Minimum Condition
and (ii) if requested by Buyer, to permit Stockholder to tender the Shares
into the Offer in accordance with Section 2.1; Buyer agrees to cooperate with
and assist Stockholder and Corimon with respect to the foregoing.
Section 4.3. Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of this
Agreement was not performed in accordance with the terms hereof and that the
parties shall be entitled to specific performance of the terms hereof, in
addition to any other remedy at law or in equity.
Section 4.4. Entire Agreement. This Agreement constitutes the
entire agreement among Buyer, Merger Subsidiary, Stockholder and Corimon with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, both written and oral, among Buyer, Merger Subsidiary,
Stockholder and Corimon with respect to the subject matter hereof.
Section 4.5. Assignment. This Agreement shall not be
assigned, except that Buyer may assign all or any of its rights and
obligations hereunder to any affiliate of Buyer, provided that no such
assignment shall relieve Buyer of its obligations hereunder if such assignee
does not perform such obligations.
Section 4.6. Parties in Interest. This Agreement shall be
binding upon, inure solely to the benefit of, and be enforceable by, the
parties hereto and the Company and their respective successors and permitted
assigns. Nothing in this Agreement, express or implied, is intended to or
shall confer upon any other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
Section 4.7. Amendment; Waiver. This Agreement may not be
amended and no provision of this Agreement may be waived except by an
instrument in writing signed by the parties hereto and the Company.
Section 4.8. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule
of law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of this Agreement is not affected in any manner
materially adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible in a
mutually acceptable manner in order that the terms of this Agreement remain
as originally contemplated to the fullest extent possible.
Section 4.9. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including telecopy
or similar writing) and shall be given,
if to Buyer or to Merger Subsidiary, to:
Imperial Chemical Industries PLC
9 Millbank
London SW1P 3JF
England
Telecopy: 011-44-171-798-5878
Attention: The Secretary
with a copy to:
Paul R. Kingsley, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telecopy: (212) 450-4800
if to Stockholder or Corimon, to:
Corimon, S.A.C.A.
Calle Hans Neumann Edf. Corimon
Los Cortijos de Lourdes
Caracas, Venezuela 0171
Telecopy: 582-203-5707
Attention: Arthur Broslat
with a copy to:
David M. Kies, Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Telecopy: (212) 558-3588
In addition, copies of all notices hereunder shall be given to the Company in
accordance with Section 11.01 of the Merger Agreement.
Section 4.10. Termination; Survival. This Agreement shall
terminate upon termination of the Merger Agreement, provided that a party will
not be relieved from liability for any breach of this Agreement. All
representations and warranties contained in this Agreement shall survive
delivery of and payment for the Shares.
Section 4.11. Corimon Guaranty. Corimon hereby confirms the
representations and warranties of Stockholder contained herein and irrevocably
and unconditionally guarantees to Buyer and Merger Subsidiary the prompt and
full discharge by Stockholder of all of Stockholder's covenants, agreements,
obligations and liabilities under this Agreement (collectively, the
"Stockholder Obligations"), in accordance with the terms hereof, in each case
as if the Stockholder Obligations were direct and primary obligations of
Corimon. If Stockholder shall default in the due and punctual performance of
any Stockholder Obligations, Corimon will forthwith perform or cause to be
performed such Stockholder Obligation at its sole cost and expense. The
guaranty evidenced hereby is a guaranty of payment and performance and not a
guaranty of collection. Corimon agrees to pay the expenses and costs
(including, without limitation, reasonable attorneys' fees and expenses)
incurred by Buyer in connection with any action, suit or proceeding brought or
maintained against Corimon to enforce this guaranty. Corimon hereby agrees
that its obligations under this guaranty shall be unconditional, irrespective
of (a) any change in the time, manner or place of payment, time or manner of
performance or any other term of the Stockholder Obligations or (b) any other
circumstance that might otherwise constitute a legal or equitable discharge or
defense of a guarantor, other than payment or satisfaction of the Stockholder
Obligations in full.
Section 4.12. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York
applicable to contracts executed in and to be performed in that State.
Section 4.13. Jurisdiction. Any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or
in connection with, this Agreement or the transactions contemplated hereby
shall only be brought in the United States District Court for the Southern
District of New York or any other New York State court sitting in New York
City, and each of the parties hereby consents to the jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such suit,
action or proceeding and irrevocably waives, to the fullest extent permitted
by law, any objection which it may now or hereafter have to the laying of the
venue of any such suit, action or proceeding in any such court or that any
such suit, action or proceeding which is brought in any such court has been
brought in an inconvenient form. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court. Without limiting the foregoing,
each party agrees that service of process on such party as provided in Section
4.9 shall be deemed effective service of process on such party.
Section 4.14. Headings. The descriptive headings contained in
this Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
Section 4.15. Counterparts. This Agreement may be executed in
one of more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original
but all of which taken together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, Buyer, Merger Subsidiary, Corimon and
Corimon Corp. have caused this Agreement to be executed by their duly
authorized officers as of the date first written above.
Imperial Chemical Industries PLC
By: /s/ John Thompson
---------------------------
Name: John Thompson
Title: Attorney-in-Fact
GDEN Corporation
By: /s/ John Danzeisen
---------------------------
Name: John Danzeisen
Title: Attorney-in-Fact
Corimon, S.A.C.A.
By: /s/ Philippe Erard
---------------------------
Name: Philippe Erard
Title: President
By: /s/ Arthur Broslat
---------------------------
Name: Arthur Broslat
Title: Exec. Vice President
Corimon Corporation
By: /s/ Arthur Broslat
---------------------------
Name: Arthur Broslat
Title: President
By: ____________________________
Name:
Title:
Schedule A
Stock Purchase Agreement, dated July 21, 1992, among Corimon Corporation,
Corimon, S.A.C.A. and Grow Group, Inc.
Standstill Agreement, dated July 21, 1992, among Corimon Corporation, Corimon,
S.A.C.A. and Grow Group, Inc., as amended on February 14, 1995
Credit Agreement, dated as of August 10, 1994, between Corimon Corporation
and The Chase Manhattan Bank (National Association), as amended in February
1995 (the only material effect of such amendment is that it extended the
termination of the Credit Agreement to May 10, 1995)
Stock and Note Purchase Agreement, dated as of February 14, 1995, among
Corimon, S.A.C.A., Corimon Corporation and Fidelity Capital & Investment Fund
Certificate of Designations of Series A Preferred Stock of Corimon
Corporation, filed on February 13, 1995
Put Note due 2000 issued on February 14, 1995
Escrow Agreement, dated February 14, 1995, between Corimon Corporation and
United States Trust Company of New York
Pledge Agreement, dated as of February 14, 1995, between Corimon Corporation
and United States Trust Company of New York.
Collateral Agent Agreement, dated February 14, 1995, among Corimon
Corporation, Fidelity Capital & Income Fund and United States Trust Company of
New York
Security Agreement, dated as of August 10, 1994, between Corimon Corporation
and the Chase Manhattan Bank (National Association)
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS Assignment and Assumption Agreement (the "Agreement") dated as
of April 30, 1995, is entered into between Imperial Chemical Industries PLC, a
company organized under the laws of England ("ICI"), and GDEN Corporation, a
New York company and an indirect wholly owned subsidiary of ICI ("GDEN").
W I T N E S S E T H:
WHEREAS, Grow Group, Inc., a New York company ("Grow"), ICI and
GDEN have entered into an Agreement and Plan of Merger, dated as of the date
hereof (the "Merger Agreement"), which provides, among other things, upon the
terms and subject to the conditions set forth therein, for the acquisition by
ICI or its assignee of all the outstanding shares of Common Stock, par value
$.10 per share, of Grow (the "Shares") through (a) a tender offer (the
"Offer") for all Shares for $18.10 per Share, net to the sellers thereof in
cash, subject to any amounts required to be withheld under applicable federal,
state, local or foreign income tax regulations and (b) a second-step merger
pursuant to which GDEN will merge with and into Grow and all outstanding
Shares other than Shares held by Grow as treasury stock or owned by ICI, GDEN
or any other subsidiary of ICI will be converted into the right to receive
$18.10 per Share in cash, subject to any amounts required to be withheld under
applicable federal, state, local or foreign income tax regulations; and
WHEREAS, ICI, GDEN, Corimon Corporation, a Delaware company
("Corimon"), and Corimon, S.A.C.A., company organized under the laws of
Venezuela, have entered into an Option Agreement dated as of the date hereof
(the "Option Agreement"), under which, upon the terms and subject to the
conditions set forth therein, Corimon granted to ICI an option to purchase all
of the Shares beneficially owned by Corimon at a purchase price of $17.50 per
Share;
WHEREAS, ICI proposes to assign to GDEN its rights under the Merger
Agreement to purchase Shares pursuant to the Offer and all of its rights and
obligations under the Option Agreement and GDEN agrees to make the Offer under
the Merger Agreement and proposes to accept the assignment of ICI's rights
and assume the corresponding obligations under the Merger Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. Assignment. ICI hereby assigns and transfers to GDEN (i) its
right to purchase Shares pursuant to the Offer under the Merger Agreement and
(ii) all of its right, title and interest under the Option Agreement. GDEN
hereby accepts such assignment and agrees to make the Offer and to be bound by
(x) the applicable terms of the Merger Agreement to purchase Shares pursuant
to the Offer and (y) the terms of the Option Agreement.
2. Acknowledgment. ICI acknowledges that it continues to have
obligations as set forth in (a) the proviso to Section 11.5 of the Merger
Agreement and (b) the proviso to Section 4.5 of the Option Agreement.
3. Amendment. This Agreement may not be amended without the prior
written consent of parties hereto.
4. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
5. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers, as of the date first
above written.
IMPERIAL CHEMICAL INDUSTRIES PLC
By: /s/ John K. Thompson
--------------------------
Name: John K. Thompson
Title: Attorney-in-Fact
GDEN CORPORATION
By: /s/ John K. Thompson
--------------------------
Name: John K. Thompson
Title: President
December 1, 1994
NON-DISCLOSURE AGREEMENT
Dear Sirs:
In connection with your possible interest in the acquisition of
Grow Group, Inc. ("Grow"), we are furnishing you or your representatives with
certain information which may be either non-public, confidential or
proprietary in nature. The information furnished to you or your
representatives, together with analyses, compilations, forecasts, studies or
other documents prepared by you, your agents, representatives (including
attorneys, accountants and financial advisors) or employees which contain or
otherwise reflect such information or your review of, or interest in, Grow, is
hereinafter referred to as the "Information".
In consideration of our furnishing you with the Information,
you agree that:
1. The Information will be kept confidential and shall not,
without our prior written consent, be disclosed by you, or by your
agents, representatives or employees, in any manner whatsoever, in
whole or in part, and shall not be used by you, your agents,
representatives or employees, other than in connection with the
transaction described above. Moreover, you agree to reveal the
Information only to your agents, representatives and employees who
need to know the Information for the purpose of evaluating the
transaction described above, who are informed by you of the
confidential nature of the Information and who shall agree in writing
to act in accordance with the terms and conditions of this Agreement.
You shall be responsible for any breach of this Agreement by your
agents, representatives or employees.
2. Without our prior written consent, except as required by
law, you and your agents, representatives and employees will not
disclose to any person or entity the fact that the Information has
been made available, that discussions or negotiations are taking
place or have taken place concerning a possible transaction involving
Grow or any of the terms, conditions or other facts with respect to
any such possible transaction, including the status thereof.
3. You shall keep a record of the written Information
furnished to you and of the location of such Information. All copies
of the Information, along with your notes on, summaries and
compilations of, or excerpts from, the Information, except for that
portion of the Information which consists of analyses, compilations,
forecasts, studies or other documents prepared by you, your agents,
representatives or employees, will be returned to us immediately upon
our request. That portion of the Information which consists of
analyses, compilations, forecasts, studies or other documents
prepared by you, your agents, representatives or employees, will be
held by you and kept confidential and subject to the terms of this
Agreement, or destroyed upon our request, and any oral Information
will continue to be subject to the terms of this Agreement. Such
destruction will be confirmed in writing to us by you and the person
or persons who prepared such documents.
4. The term Information shall not include such portions of the
information which (i) are or become generally available to the public
other than as a result of a disclosure by you, your agents,
representatives or employees, or (ii) become available to you on a
non-confidential basis from a source (other than us or our agents)
which is not prohibited from disclosing such information to you by a
legal, contractual or fiduciary obligation to us or (iii) information
which you have developed independently through conducting your own
competitive business.
5. Without our prior written consent, you and your
representatives will not communicate with any person or entity that
is a party to any agreement with Grow or its subsidiaries or
affiliates concerning Grow or any possible transaction between you
and Grow.
6. Without our prior written consent, you and your
representatives will not for a period of two years from the date
hereof directly or indirectly solicit for employment any person who
is now employed by us or any of our subsidiaries who is identified by
you as a result of your investigation of Grow.
7. You acknowledge that we make no express or implied
representation or warranty as to the accuracy or completeness of the
Information, and we expressly disclaim any and all liability that may
be based on the Information, errors therein or omissions therefrom.
You agree that you are not entitled to rely on the accuracy or
completeness of the Information and that you shall be entitled to
rely only on the representations and warranties made to you by Grow in
any final written purchase agreement regarding an acquisition.
8. In the event that you or anyone to whom you transmit the
Information pursuant to this Agreement becomes legally compelled to
disclose any of the Information, you will provide us with prompt
written notice and oral notice so that we may seek a protective order
or other appropriate remedy and/or waive a compliance with the
provisions of this Agreement. In the event that such protective
order or other remedy is not obtained, or that Grow waives compliance
with the provisions of this Agreement, you will furnish only that
portion of the Information which you are advised by Grow or Grow's
attorney you are legally required to furnish and you will exercise
the efforts directed by Grow to obtain reliable assurance that
confidential treatment will be accorded the Information. All costs
for actions taken at the direction of Grow shall be subject to
indemnification and reimbursement by Grow.
9. Save that you will at all times be entitled to maintain for
investment purposes only any common stock of Grow as listed on the
New York Stock Exchange provided always that that interest is no
greater than 15% of all the issued securities of Grow, you agree
that, for a period of two years from the date of this letter, neither
you nor any of your affiliates, including any person or entity
directly or indirectly through one or more intermediaries,
controlling you or controlled by or under common control with you,
will purchase, offer or agree to purchase any securities or assets of
Grow, enter, or agree to enter into any acquisition or other business
combination, relating to Grow, or make, or induce any other entity to
make or negotiate or otherwise deal with others for a tender or
exchange offer of Common Stock of Grow, solicit proxies, votes or
consents other than for nominees selected by Grow's Board of
Directors, and proposals recommended by Grow's Board of Directors, or
otherwise seek to acquire control of Grow unless such purchase,
transaction, offer, agreement or proposal shall have previously been
approved by the Board of Directors of Grow.
10. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
11. You acknowledge that remedies at law may be inadequate to
protect against breach of this Agreement, and you hereby agree in
advance to the granting of injunctive relief in our favor without
proof of actual damages.
Very truly yours,
By: /s/ Russell Banks
-------------------------
Title: President
Date: December 1, 1994
Agreed to and Accepted by:
COMPANY
By: /s/ John K. Thompson
-----------------------
Title: Chief Planner, ICI Paints
Date: December 2, 1994
POWER OF ATTORNEY
1. We, IMPERIAL CHEMICAL INDUSTRIES PLC (hereinafter called "the
Company"), a company organized and existing under the Laws of England
and having our registered office situate at Imperial Chemical House,
Millbank, London SW1P 3JF HEREBY APPOINT Herman Marcus Scopes, John
Raymond Danzeisen, John Kynaston Thompson, David Stewart Paterson
Douglas, Andrew Ross Graham, Stanley Lockitski and J Kent Riegel
jointly and severally, as our Attorneys (who may act jointly or
singly) to execute under seal or under hand all such agreements deeds
and documents and to attend all other legal formalities that are
necessary or desirable in connection with the purchase or an
agreement by the Company or any subsidiary company of the Company to
purchase shares in Grow Group, Inc. along with all other related
transactions and acts and to do and perform all such other acts as
may be necessary or desirable or incidental to the above-mentioned
purchase or agreement to purchase.
2. This Power of Attorney shall be deemed to come into force on the date
hereof and shall remain in full force and effect thereafter for six
calendar months unless revoked by the Company prior thereto in
writing to the Attorneys.
3. This Power of Attorney is a Deed and has been executed by the Company
as a Deed.
IN WITNESS whereof we have caused our Common Seal to hereunto affixed
this 27th day of April 1995.
SEALED by Imperial Chemical Industries PLC in the presence of
/s/ Sir Ronald Hampel
---------------------
Sir Ronald Hampel
Director
/s/ Victor O. White
---------------------
Victor O. White
