______________________________________________________________________________
Securities and Exchange Commission
Washington, D.C. 20549
-----------
Schedule 13D
Pursuant to Section 13(d)
of the Securities Exchange Act of 1934
-----------
Amdura Corporation
(Name of Issuer)
-----------
Common Stock, $.01 Par Value
(Title of Class of Securities)
-----------
23426-70-3
(CUSIP Number of Class of Securities)
-----------
Robert M. Miller, Esq.
ADU Acquisition Inc.
c/o FKI Industries Inc.
425 Post Road, Fairfield, CT 06430-0970
(203) 255-7100
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
-----------
Copy to:
James H. Bell, Esq.
Parson & Brown
230 Park Avenue, New York, NY 10169
Telephone: (212) 551-9800
-----------
March 15, 1995
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a Statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3)
or (4), check the following box [].
Check the following box if a fee is being paid with the statement [X].
______________________________________________________________________________
<PAGE>
- -------------------------------------------------------------------------------
CUSIP No. 23426-70-3 13D
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
S.S OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
FKI plc
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OR ORGANIZATION
Organized in England.
- ------------------------------------------------------------------------------
NUMBER OF | 7 | SOLE VOTING POWER
SHARES | | 24,665,160
BENEFICIALLY | |
OWNED BY | 8 | SHARED VOTING POWER
EACH | | None.
REPORTING | 9 | SOLE DISPOSITIVE POWER
PERSON WITH | | 24,665,160
| 10 | SHARED DISPOSITIVE POWER
| | None.
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
24,665,160
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
100%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
- ------------------------------------------------------------------------------
CUSIP No. 23426-70-3 13D
- ------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
S.S OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
ADU Acquisition Inc.
- ------------------------------------------------------------------------------
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 PROCEEDING IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OR ORGANIZATION
Incorporated in Delaware
- ------------------------------------------------------------------------------
NUMBER OF | 7 | SOLE VOTING POWER
SHARES | | 24,665,160
BENEFICIALLY | |
OWNED BY | 8 | SHARED VOTING POWER
EACH | | None.
REPORTING | 9 | SOLE DISPOSITIVE POWER
PERSON WITH | | 24,665,160
| 10 | SHARED DISPOSITIVE POWER
| | None.
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
24,665,160
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
100%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Schedule 13D
This Statement on Schedule 13D (this "Statement") relates to:
(a) the Agreement and Plan of Merger, dated as of March 15, 1995 (the
"Merger Agreement"), among FKI plc, a company organized under the laws of
England ("Parent"), ADU Acquisition Inc., a Delaware corporation and an indirect
wholly owned subsidiary of Parent ("Purchaser"), and Amdura Corporation, a
Delaware Corporation (the "Company"), which provides, among other things, for
the offer by Purchaser to purchase all of the outstanding shares of Common
Stock, par value $.01 per share (the "Shares"), of the Company at a price of
$2.30 per Share, net to the seller in cash, upon the terms and conditions set
forth in Purchaser's Offer to Purchase, dated March 22, 1995 (the "Offer to
Purchase") and in the related Letter of Transmittal (which together with the
Offer to Purchase constitutes the "Offer") and for the merger of Purchaser into
the Company as soon as practicable after the purchase of Shares pursuant to the
Offer (the "Merger");
(b) the Stockholders Agreement, dated as of March 15, 1995 (the
"Stockholders Agreement"), among Purchaser, Internationale Nederlanden (U.S.)
Capital Corporation, Investors Trading AB, The Network Company II Limited and
Orcas Limited Partnership (each a "Stockholder," and collectively, the
"Stockholders"), pursuant to which, upon the terms set forth therein, each
Stockholder has agreed to tender and sell, in accordance with the terms of the
Offer, all Shares owned (beneficially or of record) by such Stockholder; and
(c) the Supplemental Stockholders Agreement, dated as of March 15, 1995
(the "Supplemental Stockholders Agreement"), among Purchaser and the
Stockholders other than Investors Trading AB, pursuant to which such
Stockholders have agreed that if the Offer is terminated because of the failure
of any condition thereof and the Company effects a business combination
transaction with any person other than Parent or any of its subsidiaries within
180 days thereafter, then each such Stockholder will pay to Purchaser 50% of the
excess, if any, of the amount per Share received by the Stockholder as a result
of such transaction over $2.30 per Share.
By virtue of the Merger Agreement, the Stockholders Agreement and the
Supplemental Stockholders Agreement, Parent and Purchaser may be deemed to have
acquired beneficial ownership of all 24,665,160 Shares outstanding.
ITEM 1. SECURITY AND ISSUER.
(a) The name of the issuer is Amdura Corporation, a Delaware corporation,
which has its principal executive offices at 900 Main Street, South, Suite 2A,
Building B, PO Box 870, Southbury, CT 06488-0870.
(b) The class of equity securities to which this Statement relates is the
Common Stock, par value $.01 per share, of the Company.
<PAGE>
ITEM 2. IDENTITY AND BACKGROUND.
(a) - (c) and (f) This Statement is filed by Purchaser and Parent. The
information concerning the name, state or other place of organization, principal
business and address of the principal office of each of Purchaser and Parent,
and the information concerning the name, business address, present principal
occupation or employment and the name, principal business and address of any
corporation or other organization in which such employment or occupation is
conducted, material occupations, positions, offices or employments during the
last five years and citizenship of each of the executive officers and directors
of Purchaser and Parent are set forth in the Introduction, Section 8 ("Certain
Information Concerning Purchaser and Parent") and Schedule I of the Offer to
Purchase and are incorporated herein by reference.
(d) and (e) During the last five years, none of Purchaser or Parent, and,
to the best knowledge of Purchaser and Parent, none of the persons listed in
Schedule I of the Offer to Purchase has been (i) convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting activities
subject to, federal or state securities laws or finding any violation of such
laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The information set forth in Section 9 ("Financing of the Offer and the
Merger") of the Offer to Purchase is incorporated herein by reference.
ITEM 4. PURPOSE OF THE TRANSACTION.
(a) - (g) The information set forth in the Introduction, Section 10
("Background of the Offer; Contacts with the Company; the Merger Agreement and
the Stockholders Agreement") and Section 11 ("Purpose of the Offer; Plans for
the Company After the Offer and the Merger") of the Offer to Purchase is
incorporated herein by reference.
(h) and (i) The information set forth in Section 13 ("Effect of the Offer
on the Market for Shares, Exchange Listing and Exchange Act Registration") of
the Offer to Purchase is incorporated herein by reference.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) and (b) The information set forth in Section 8 ("Certain Information
Concerning Purchaser and Parent") of the Offer to Purchase is incorporated
herein by reference.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIP WITH
RESPECT TO SECURITIES OF THE ISSUER.
The information set forth in the Introduction, Section 8 ("Certain
Information Concerning Purchaser and Parent"), Section 10 ("Background of the
Offer; Contacts with the Company; the Merger Agreement and the Stockholders
<PAGE>
Agreement") and Section 11 ("Purpose of the Offer; Plans for the Company After
the Offer and the Merger") of the Offer to Purchase is incorporated herein by
reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
(a) Form of Offer to Purchase dated March 22, 1995.
(b) Agreement and Plan of Merger, dated as of March 15, 1995, among
Parent, Purchaser and the Company.
(c) Stockholders Agreement, dated as of March 15, 1995, among Purchaser
and Internationale Nederlanden (U.S.) Capital Corporation, Orcas
Limited Partnership, The Network Company II Limited and Investors
Trading AB.
(d) Supplemental Stockholders Agreement, dated as of March 15, 1995,
among Purchaser and Internationale Nederlanden (U.S.) Capital
Corporation, Orcas Limited Partnership and The Network
Company II Limited.
<PAGE>
SIGNATURES
After reasonable 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.
FKI plc
By: /s/ Steven D. Jones
-----------------------------
Name: Steven D. Jones
Title: Director of Corporate
Planning
ADU ACQUISITION INC.
By: /s/ Robert M. Miller
-----------------------------
Name: Robert M. Miller
Title: Vice President
March 22, 1995
<PAGE>
EXHIBIT INDEX
PAGE IN
SEQUENTIAL
EXHIBIT NUMBERING
NO. SYSTEM
- --------- ------------
(a) Form of Offer to Purchase dated March 22, 1995
(b) Agreement and Plan of Merger, dated as of March 15, 1995, among Parent,
Purchaser and the Company
(c) Stockholders Agreement, dated as of March 15, 1995, among Purchaser and
Internationale Nederlanden (U.S.) Finance Corporation, Orcas Limited
Partnership, The Network Company II Limited and Investor Trading AB
(d) Supplemental Stockholders Agreement, dated as of March 15, 1995, among
Purchaser and Internationale Nederlanden (U.S.) Finance Corporation, Orcas
Limited Partnership and The Network Company II Limited
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
AMDURA CORPORATION
AT
$2.30 NET PER SHARE
BY
ADU ACQUISITION INC.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
FKI PLC
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON WEDNESDAY, APRIL 19, 1995, UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
THE OFFER IS CONDITIONED UPON THERE BEING VALIDLY TENDERED AND NOT
WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST A MAJORITY OF THE
THEN OUTSTANDING SHARES ON A FULLY DILUTED BASIS. THE OFFER IS ALSO
CONDITIONED UPON, AMONG OTHER THINGS, THE EXPIRATION OR TERMINATION OF ANY
APPLICABLE ANTITRUST WAITING PERIODS.
------
THE BOARD OF DIRECTORS OF AMDURA CORPORATION (THE "COMPANY") UNANIMOUSLY
HAS DETERMINED THAT EACH OF THE OFFER AND THE MERGER IS FAIR TO, AND IN THE
BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY AND RECOMMENDS THAT
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
------
IMPORTANT
Any stockholder desiring to tender all or any portion of such
stockholder's shares of Common Stock, par value $.01 per share (the
"Shares"), of the Company should either (1) complete and sign the Letter of
Transmittal (or a facsimile thereof) in accordance with the instructions in
the Letter of Transmittal and mail or deliver it together with the
certificate(s) evidencing tendered Shares, and any other required documents,
to the Depositary or tender such Shares pursuant to the procedure for
book-entry transfer set forth in Section 3 or (2) request such stockholder's
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for such stockholder. Any stockholder whose Shares are registered
in the name of a broker, dealer, commercial bank, trust company or other
nominee must contact such broker, dealer, commercial bank, trust company or
other nominee if such stockholder desires to tender such Shares.
A stockholder who desires to tender Shares and whose certificates
evidencing such Shares are not immediately available, or who cannot comply
with the procedure for book-entry transfer on a timely basis, may tender such
Shares by following the procedure for guaranteed delivery set forth in
Section 3.
Questions or requests for assistance may be directed to the Information
Agent at its address and telephone numbers set forth on the back cover of
this Offer to Purchase. Additional copies of this Offer to Purchase, the
Letter of Transmittal and the Notice of Guaranteed Delivery may also be
obtained from the Information Agent or from brokers, dealers, commercial
banks or trust companies.
------
March 22, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
-----
<S> <C>
INTRODUCTION ...................................................................................... 1
1. Terms of the Offer; Expiration Date ........................................................ 3
2. Acceptance for Payment and Payment for Shares .............................................. 4
3. Procedures for Tendering Shares ............................................................ 5
4. Withdrawal Rights .......................................................................... 7
5. Certain Federal Income Tax Consequences .................................................... 8
6. Price Range of Shares; Dividends ........................................................... 9
7. Certain Information Concerning the Company ................................................. 9
8. Certain Information Concerning Purchaser and Parent ........................................ 11
9. Financing of the Offer and the Merger ...................................................... 16
10. Background of the Offer; Contacts with the Company; the Merger Agreement and
Stockholders Agreements .................................................................... 16
11. Purpose of the Offer; Plans for the Company after the Offer and the Merger ................. 24
12. Dividends and Distributions ................................................................ 26
13. Effect of the Offer on the Market for Shares, Exchange Listing and Exchange Act Registration 26
14. Certain Conditions of the Offer ............................................................ 27
15. Certain Legal Matters and Regulatory Approvals ............................................. 29
16. Fees and Expenses .......................................................................... 31
17. Miscellaneous .............................................................................. 31
SCHEDULE I.......................................................................................... S-1
</TABLE>
<PAGE>
To the Holders of Common Stock of
AMDURA CORPORATION:
INTRODUCTION
ADU Acquisition Inc., a Delaware corporation ("Purchaser") and an indirect
wholly owned subsidiary of FKI plc, a company organized under the laws of
England ("Parent"), hereby offers to purchase all outstanding shares of
Common Stock, par value $.01 per share (the "Shares"), of Amdura Corporation,
a Delaware corporation (the "Company"), at a price of $2.30 per Share, net to
the seller in cash, upon the terms and subject to the conditions set forth in
this Offer to Purchase and in the related Letter of Transmittal (which
together constitute the "Offer").
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter
of Transmittal, stock transfer taxes with respect to the purchase of Shares
by Purchaser pursuant to the Offer. Purchaser will pay all charges and
expenses of First Fidelity Bank, N.A. (the "Depositary") and Georgeson &
Company Inc. (the "Information Agent") incurred in connection with the Offer.
See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") UNANIMOUSLY HAS
DETERMINED THAT EACH OF THE OFFER AND THE MERGER (AS DEFINED BELOW) IS FAIR
TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY AND
RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES
PURSUANT TO THE OFFER.
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), the Company's
financial advisor, has delivered to the Board its written opinion that the
consideration to be received by the stockholders of the Company pursuant to
the Merger Agreement (as defined below) is fair to such stockholders from a
financial point of view. A copy of the opinion of DLJ is contained in the
Company's Solicitation/Recommendation Statement on Schedule 14D-9 (the
"Schedule 14D-9"), copies of which are being mailed to stockholders herewith.
THE OFFER IS CONDITIONED UPON THERE BEING VALIDLY TENDERED AND NOT
WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST A MAJORITY OF THE
SHARES THEN OUTSTANDING ON A FULLY DILUTED BASIS (THE "MINIMUM CONDITION").
THE OFFER IS ALSO CONDITIONED UPON, AMONG OTHER THINGS, THE EXPIRATION OR
TERMINATION OF ANY APPLICABLE ANTITRUST WAITING PERIODS. SEE SECTION 14,
WHICH SETS FORTH IN FULL THE CONDITIONS TO THE OFFER.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of March 15, 1995 (the "Merger Agreement"), among Parent, Purchaser and
the Company. The Merger Agreement provides that, among other things, as soon
as practicable after the purchase of Shares pursuant to the Offer and the
satisfaction of the other conditions set forth in the Merger Agreement and in
accordance with the relevant provisions of the General Corporation Law of the
State of Delaware ("Delaware Law"), Purchaser will be merged with and into
the Company (the "Merger"). Following consummation of the Merger, the Company
will continue as the surviving corporation (the "Surviving Corporation") and
will become an indirect wholly owned subsidiary of Parent. At the effective
time of the Merger (the "Effective Time"), each Share issued and outstanding
immediately prior to the Effective Time (other than Shares held in the
treasury of the Company, Shares owned by Purchaser, Parent or any direct or
indirect wholly owned subsidiary of Parent or of the Company, and Shares held
by stockholders who shall have demanded and perfected appraisal rights under
Delaware Law) will be cancelled and converted automatically into the right to
receive $2.30 in cash, or any higher price that may be paid per Share in the
Offer, without interest (the "Merger Consideration"). The Merger Agreement is
more fully described in Section 10.
Simultaneously with entering into the Merger Agreement, Purchaser and
Internationale Nederlanden (U.S.) Capital Corporation, Investors Trading AB,
The Network Company II Limited and Orcas Limited Partnership (the
"Stockholders") entered into a Stockholders Agreement, dated as of March 15,
1995 (the "Stockholders Agreement"), pursuant to which, upon the terms set
forth therein, each Stockholder has agreed to tender and sell, in accordance
with the terms of the Offer, all Shares owned (beneficially or of record) by
such Stockholder. As of March 15, 1995, the Stockholders owned (either
<PAGE>
beneficially or of record) Shares constituting approximately 66.5% of the
outstanding Shares (54.2% on a fully diluted basis). Each Stockholder has agreed
not to withdraw his Shares unless (a) the Board shall have withdrawn or modified
in a manner adverse to Purchaser or Parent its approval or recommendation of the
Offer, the Merger, the Merger Agreement or any other transaction contemplated by
the Merger Agreement in order to approve any Third Party Transaction which the
Board determines in the exercise of its good faith judgment and after
consultation with independent legal counsel and the Company's financial advisors
to be more favorable to the Company's stockholders than the Offer and the Merger
taken together, (b) the Merger Agreement is terminated, (c) the Merger Agreement
is amended in any way which adversely affects such Stockholder, or (d) such
Stockholder's Shares have not been accepted for payment and paid for by June 13,
1995. "Third Party Transaction" is defined in the Merger Agreement to mean any
of the following: (i) the acquisition of the Company by merger, consolidation or
other business combination transaction by any person other than Parent,
Purchaser or any affiliate thereof (a "Third Party"); (ii) the acquisition by
any Third Party of 50% or more of the outstanding stock or all or a substantial
part (other than in the ordinary course of business) of the assets of a material
subsidiary of the Company; (iii) the acquisition by a Third Party of 50% or more
of the outstanding Shares, whether by tender offer, exchange offer or otherwise;
(iv) the adoption by the Company of a plan of liquidation or the declaration or
payment of an extraordinary dividend; or (v) the repurchase by the Company or
any of its subsidiaries of 50% or more of the outstanding Shares.
In addition, simultaneously with entering into the Merger Agreement,
Purchaser and the Stockholders other than Investors Trading AB also entered
into a Supplemental Stockholders Agreement, dated as of March 15, 1995 (the
"Supplemental Stockholders Agreement"), in which such Stockholders have
agreed that if the Offer is terminated because of the failure of any
condition thereof and the Company effects a Third Party Transaction within
180 days thereafter, then each such Stockholder will pay to Purchaser 50% of
the excess, if any, of the amount per Share received by such Stockholder as a
result of such transaction over $2.30 per Share. As of March 15, 1995, the
Stockholders who are parties to the Supplemental Stockholders Agreement owned
(either beneficially or of record) approximately 46.6% of the outstanding
Shares (38.0% on a fully diluted basis).
The Merger Agreement provides that, promptly upon the purchase by
Purchaser of Shares pursuant to the Offer which constitute a majority of the
outstanding Shares on a fully diluted basis, Purchaser shall be entitled to
designate such number of directors as shall constitute a majority of the
total number of directors on the Board. In the Merger Agreement, the Company
has agreed to take all actions necessary to cause Purchaser's designees to be
elected as directors of the Company, including increasing the size of the
Board or securing the resignations of incumbent directors or both. Purchaser
expects that such representation would permit Purchaser to exert control over
the Company's conduct of its business and operations.
The consummation of the Merger is subject to the satisfaction or waiver of
certain conditions, including the approval and adoption of the Merger
Agreement by the requisite vote of the stockholders of the Company. See
Section 11. Under the Company's Certificate of Incorporation and Delaware
Law, the affirmative vote of the holders of a majority of the outstanding
Shares will be required to approve and adopt the Merger Agreement and the
Merger. If the Minimum Condition is satisfied, Purchaser will have sufficient
voting power to cause the approval and adoption of the Merger Agreement and
the transactions contemplated thereby without the affirmative vote of any
other stockholder.
The Company has advised Purchaser that as of March 15, 1995, 24,665,160
Shares were issued and outstanding, no Shares were held in the treasury of
the Company or held by the subsidiaries of the Company, 2,151,000 Shares were
issuable upon conversion of outstanding convertible preferred stock,
2,936,324 Shares were issuable upon the exercise of outstanding options and
533,052 Shares were issuable pursuant to the Stipulation of Settlement dated
August 31, 1994 providing for the settlement of certain class actions against
the Company and others (the "Class Action Settlement"). As a result, as of
the date of this Offer to Purchase, the Minimum Condition would be satisfied
if Purchaser acquired pursuant to the Offer 15,142,769 Shares.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS
MADE WITH RESPECT TO THE OFFER.
2
<PAGE>
1. Terms of the Offer; Expiration Date.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of such extension
or amendment), Purchaser will accept for payment and pay for all Shares
validly tendered prior to the Expiration Date (as hereinafter defined) and
not withdrawn as permitted by Section 4. The term "Expiration Date" means
12:00 midnight, New York City time, on Wednesday, April 19, 1995, unless and
until Purchaser (subject to the terms and conditions of the Merger Agreement)
shall have extended the period during which the Offer is open, in which event
the term "Expiration Date" shall mean the latest time and date at which the
Offer, as so extended by Purchaser, shall expire.
Purchaser expressly reserves the right, subject to the terms and
conditions of the Merger Agreement, at any time and 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 the Depositary and by making a public
announcement thereof. The Merger Agreement provides that the Offer may be
extended for such period as Parent and Purchaser may determine (a) is
required because of the failure to satisfy any of the conditions set forth in
Section 14 or (b) could result in not less than 90% of the Shares on a fully
diluted basis being tendered and not withdrawn (except that there shall be
only one extension of the Offer pursuant to this clause (b) and it shall not
exceed 10 business days from April 19, 1995), or as may be agreed to by the
Company and Parent. During any such extension, all Shares previously tendered
and not withdrawn will remain subject to the Offer, subject to the rights of
a tendering stockholder to withdraw his or her Shares. See Section 4.
Subject to the applicable regulations of the Securities and Exchange
Commission (the "Commission"), Purchaser also expressly reserves the right,
in its sole discretion (but subject to the terms and conditions of the Merger
Agreement), at any time and from time to time, (i) to delay acceptance for
payment of, or, regardless of whether such Shares were theretofore accepted
for payment, payment for, any Shares pending receipt of any regulatory
approval specified in Section 15, (ii) to terminate the Offer and not accept
for payment any Shares upon the occurrence of any of the conditions specified
in Section 14 and (iii) to waive any condition (other than the Minimum
Condition) or otherwise amend the Offer in any respect, by giving oral or
written notice of such delay, termination, waiver or amendment to the
Depositary and by making a public announcement thereof. The Merger Agreement
provides that, without the consent of the Company, Purchaser will not (i)
decrease the price per Share payable pursuant to the Offer, (ii) change the
form of consideration payable in the Offer, (iii) reduce the number of Shares
sought to be purchased in the Offer, (iv) impose conditions to the Offer in
addition to those set forth in Section 14, (v) amend or change the terms and
conditions of the Offer in any manner adverse to the holders of Shares or
(vi) change or waive the Minimum Condition. Purchaser acknowledges that (i)
Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires Purchaser to pay the consideration offered or
return the Shares tendered promptly after the termination or withdrawal of
the Offer and (ii) Purchaser may not delay acceptance for payment of, or
payment for (except as provided in clause (i) of the first sentence of this
paragraph), any Shares upon the occurrence of any of the conditions specified
in Section 14 without extending the period of time during which the Offer is
open.
Any such extension, delay, termination, waiver or amendment will be
followed as promptly as practicable by public announcement thereof, such
announcement, in the case of an extension, to be made no later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled Expiration Date. Subject to applicable law (including Rules
14d-4(c) and 14d-6(d) under the Exchange Act, which require that material
changes be promptly disseminated to stockholders in a manner reasonably
designed to inform them of such changes) and without limiting the manner in
which Purchaser may choose to make any public announcement, Purchaser shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by issuing a press release to the Dow Jones
News Service.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, Purchaser will extend the Offer to the extent required by Rules
14d-4(c) and 14d-6(d) under the Exchange Act.
Subject to the terms of the Merger Agreement, if, prior to the Expiration
Date, Purchaser should decide to increase the consideration being offered in
the Offer, such increase in the consideration being offered will be
applicable to all stockholders whose Shares are accepted for payment pursuant
3
<PAGE>
to the Offer and, if, at the timenotice of any such increase in the
consideration being offered is first published, sent or given to holders of such
Shares, the Offer is scheduled to expire at any time earlier than the period
ending on the tenth business day from and including the date that such notice is
first so published, sent or given, the Offer will be extended at least until the
expiration of such ten-business-day period. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or federal holiday
and consists of the time period from 12:01 a.m. through 12:00 midnight, New York
City time.
The Company has provided Purchaser with the Company's stockholder list and
security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of
Transmittal will be mailed to record holders of Shares whose names appear on
the Company's stockholder list and will be furnished, for subsequent
transmittal to beneficial owners of Shares, to brokers, dealers, commercial
banks, trust companies and similar persons whose names, or the names of whose
nominees, appear on the stockholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing.
2. Acceptance for Payment and Payment for Shares.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such
extension or amendment), Purchaser will accept for payment, and will pay for,
all Shares validly tendered prior to the Expiration Date and not withdrawn
promptly after the later to occur of (i) the Expiration Date, (ii) the
expiration or termination of any applicable waiting periods under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"),
and (iii) the satisfaction or waiver of the conditions to the Offer set forth
in Section 14, including those conditions relating to the Exon- Florio Act
(as hereinafter defined). Subject to applicable rules of the Commission,
Purchaser expressly reserves the right to delay acceptance for payment of, or
payment for, Shares, pending receipt of any regulatory approvals specified in
Section 15 or in order to comply in whole or in part with any other
applicable law.
In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) the certificates evidencing such Shares (the "Share
Certificates") or timely confirmation (a "Book-Entry Confirmation") of a
book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company, the Midwest Securities Trust Company or the
Philadelphia Depository Trust Company (each, a "Book-Entry Transfer Facility"
and, collectively, the "Book-Entry Transfer Facilities") pursuant to the
procedures set forth in Section 3, (ii) the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message (as defined below) in connection
with a book-entry transfer and (iii) any other documents required under the
Letter of Transmittal.
The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility
has received an express acknowledgment from the participant in such
Book-Entry Transfer Facility tendering the Shares, that such participant has
received and agrees to be bound by the terms of the Letter of Transmittal and
that the Purchaser may enforce such agreement against such participant.
On the date of this Offer to Purchase, Parent anticipates filing with the
Federal Trade Commission (the "FTC") and the Antitrust Division of the
Department of Justice (the "Antitrust Division") a Premerger Notification and
Report Form under the HSR Act in connection with the purchase of Shares
pursuant to the Offer. Accordingly, it is anticipated that the waiting period
under the HSR Act applicable to the Offer will expire at 11:59 p.m., New York
City time, on Wednesday, April 5, 1995. Prior to the expiration or
termination of such waiting period, the FTC or the Antitrust Division may
extend such waiting period by requesting additional information or
documentary material from Parent. If such a request is made with respect to
the purchase of Shares in the Offer, the waiting period will expire at 11:59
p.m., New York City time, on the tenth calendar day after substantial
compliance by Parent with such a request. Thereafter, the waiting period may
only be extended by court order. The waiting period under the HSR Act may be
terminated prior to its expiration by the FTC and the Antitrust Division.
Parent will request early termination of the waiting period, although there
can be no assurance that this request will be granted. Pursuant to the Merger
Agreement, Purchaser may, but need not, extend the Offer until the applicable
waiting period under the HSR Act shall have expired or been terminated. See
Section 15 for additional information regarding the HSR Act.
4
<PAGE>
On the date of this Offer to Purchase, since the Company currently has
contracts from the U.S. Department of Defense, Purchaser and the Company
anticipate filing with the Committee on Foreign Investment in the United
States of the Department of the Treasury ("CFIUS") a joint notice of the
transactions contemplated by the Merger Agreement, pursuant to the
regulations promulgated under Section 721 of the Defense Production Act of
1950, as amended, popularly known as the Exon-Florio Amendment (the
"Exon-Florio Act"). Under the Exon-Florio Act, the President of the United
States is authorized to prohibit or suspend acquisitions, mergers or
takeovers by foreign persons of persons engaged in interstate commerce in the
United States if the President determines, after investigation, that such
foreign persons in exercising control of such acquired persons might take
action that threatens to impair the national security of the United States
and that other provisions of existing law do not provide adequate authority
to protect national security. A determination that an investigation is called
for must be made within thirty days after notification of a proposed
acquisition, merger or takeover is first filed with CFIUS. Any such
investigation must be completed within forty-five days of such determination.
Any decision by the President to take action must be announced within fifteen
days of the completion of the investigation. See Section 15 for additional
information regarding the Exon-Florio Act.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not withdrawn as,
if and when Purchaser gives oral or written notice to the Depositary of
Purchaser's acceptance for payment of such Shares pursuant to the Offer. Upon
the terms and subject to the conditions of the Offer, payment for Shares
accepted for payment pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payments from Purchaser
and transmitting such payments to tendering stockholders whose Shares have
been accepted for payment. Under no circumstances will interest on the
purchase price for Shares be paid, regardless of any delay in making such
payment.
If any tendered Shares are not accepted for payment for any reason
pursuant to the terms and conditions of the Offer, or if Share Certificates
are submitted evidencing more Shares than are tendered, Share Certificates
evidencing unpurchased Shares will be returned, without expense to the
tendering stockholder (or, in the case of Shares tendered by book-entry
transfer into the Depositary's account at a Book-Entry Transfer Facility
pursuant to the procedure set forth in Section 3, such Shares will be
credited to an account maintained at such Book-Entry Transfer Facility), as
promptly as practicable following the expiration or termination of the Offer.
Purchaser reserves the right to transfer or assign, in whole at any time
or in part from time to time, to one or more of its affiliates, the right to
purchase all or any portion of the Shares tendered pursuant to the Offer, but
any such transfer or assignment will not relieve Purchaser of its obligations
under the Offer and will in no way prejudice the rights of tendering
stockholders to receive payment for Shares validly tendered and accepted for
payment pursuant to the Offer.
3. Procedures for Tendering Shares.
In order for a holder of Shares validly to tender Shares pursuant to the
Offer, the Letter of Transmittal (or a facsimile thereof), properly completed
and duly executed, together with any required signature guarantees, or an
Agent's Message in connection with a book-entry delivery of Shares, and any
other documents required by the Letter of Transmittal, must be received by
the Depositary at one of its addresses set forth on the back cover of this
Offer to Purchase and either (i) the Share Certificates evidencing tendered
Shares must be received by the Depositary at such address or such Shares must
be tendered pursuant to the procedure for book-entry transfer described below
and a Book-Entry Confirmation must be received by the Depositary, in each
case prior to the Expiration Date, or (ii) the tendering stockholder must
comply with the guaranteed delivery procedures described below.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT
THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Book-Entry Transfer. The Depositary will establish accounts with respect
to the Shares at the Book-Entry Transfer Facilities for purposes of the Offer
5
<PAGE>
within two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in the system of any Book-Entry Transfer
Facility may make a book-entry delivery of Shares by causing such Book-Entry
Transfer Facility to transfer such Shares into the Depositary's account at such
Book-Entry Transfer Facility in accordance with such Book-Entry Transfer
Facility's procedures for such transfer. However, although delivery of Shares
may be effected through book-entry transfer at a Book-Entry Transfer Facility,
the Letter of Transmittal (or a facsimile thereof), properly completed and duly
executed, together with any required signature guarantees, or an Agent's Message
in connection with a book-entry transfer, and any other required documents,
must, in any case, be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase prior to the Expiration Date,
or the tendering stockholder must comply with the guaranteed delivery procedure
described below. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES
NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Signature Guarantees. Signatures on all Letters of Transmittal must be
guaranteed by a firm which is a member of the Medallion Signature Guarantee
Program, or by any other "eligible guarantor institution," as such term is
defined in Rule 17Ad-15 under the Exchange Act (each of the foregoing being
referred to as an "Eligible Institution"), except in cases where Shares are
tendered (i) by a registered holder of Shares who has not completed either
the box entitled "Special Payment Instructions" or the box entitled "Special
Delivery Instructions" on the Letter of Transmittal or (ii) for the account
of an Eligible Institution. If a Share Certificate is registered in the name
of a person other than the person who or which signs the Letter of
Transmittal, or if payment is to be made, or a Share Certificate not accepted
for payment or not tendered is to be returned, to a person other than the
registered holder(s), then the Share Certificate must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear on the Share Certificate, with the
signature(s) on such Share Certificate or stock powers guaranteed by an
Eligible Institution. See Instructions 1 and 5 of the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates evidencing such Shares
are not immediately available or such stockholder cannot deliver the Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date, or such stockholder cannot complete the procedure for
delivery by book-entry transfer on a timely basis, such Shares may
nevertheless be tendered, provided that all the following conditions are
satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by Purchaser, is
received prior to the Expiration Date by the Depositary as provided below;
and
(iii) the Share Certificates (or a Book-Entry Confirmation) evidencing
all tendered Shares, in proper form for transfer, in each case together
with the Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, with any required signature guarantees (or,
in the case of a book-entry transfer, an Agent's Message), and any other
documents required by the Letter of Transmittal are received by the
Depositary within five New York Stock Exchange, Inc. ("NYSE") trading days
after the date of execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by telegram, telex or facsimile transmission to the Depositary
and must include a guarantee by an Eligible Institution in the form set forth
in the form of Notice of Guaranteed Delivery made available by Purchaser.
In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the
Depositary of the Share Certificates evidencing such Shares, or a Book-Entry
Confirmation of the delivery of such Shares, and the Letter of Transmittal
(or a facsimile thereof), properly completed and duly executed, with any
required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message), and any other documents required by the Letter of
Transmittal.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tender of Shares will be determined by Purchaser in its sole discretion,
which determination shall be final and binding on all parties. Purchaser
6
<PAGE>
reserves the absolute right to reject any and alltenders determined by it not to
be in proper form or the acceptance for payment of which may, in the opinion of
its counsel, be unlawful. Purchaser also reserves the absolute right to waive
any condition of the Offer (other than the Minimum Condition) or any defect or
irregularity in the tender of any Shares of any particular stockholder, whether
or not similar defects or irregularities are waived in the case of other
stockholders. No tender of Shares will be deemed to have been validly made until
all defects and irregularities have been cured or waived. None of Purchaser,
Parent, the Depositary, the Information Agent or any other person will be under
any duty to give notification of any defects or irregularities in tenders or
incur any liability for failure to give any such notification. Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and the instructions thereto) will be final and binding.
Other Requirements. By executing the Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of Purchaser as
such stockholder's proxies, each with full power of substitution, in the
manner set forth in the Letter of Transmittal, to the full extent of such
stockholder's rights with respect to the Shares tendered by such stockholder
and accepted for payment by Purchaser. All such proxies shall be considered
coupled with an interest in the tendered Shares. Such appointment will be
effective when, and only to the extent that, Purchaser accepts such Shares
for payment. Upon such acceptance for payment, all prior proxies given by
such stockholder with respect to such Shares will be revoked without further
action, and no subsequent proxies may be given nor any subsequent written
consent executed by such stockholder (and, if given or executed, will not be
deemed to be effective) with respect thereto. The designees of Purchaser
will, with respect to the Shares for which the appointment is effective, be
empowered to exercise all voting and other rights of such stockholder as they
in their sole discretion may deem proper at any annual or special meeting of
the Company's stockholders or any adjournment or postponement thereof, by
written consent in lieu of any such meeting or otherwise. Purchaser reserves
the right to require that, in order for Shares to be deemed validly tendered,
immediately upon Purchaser's payment for such Shares, Purchaser must be able
to exercise full voting rights with respect to such Shares.
The acceptance for payment by Purchaser of Shares pursuant to any of the
procedures described above will constitute a binding agreement between the
tendering stockholder and Purchaser upon the terms and subject to the
conditions of the Offer.
UNDER THE FEDERAL INCOME TAX LAWS, THE DEPOSITARY WILL BE REQUIRED TO
WITHHOLD 31 PERCENT OF THE AMOUNT OF ANY PAYMENTS MADE TO CERTAIN
STOCKHOLDERS PURSUANT TO THE OFFER. TO PREVENT SUCH BACKUP FEDERAL INCOME TAX
WITHHOLDING WITH RESPECT TO PAYMENT TO CERTAIN STOCKHOLDERS OF THE PURCHASE
PRICE OF SHARES PURCHASED PURSUANT TO THE OFFER, EACH SUCH STOCKHOLDER MUST
PROVIDE THE DEPOSITARY WITH SUCH STOCKHOLDER'S CORRECT TAXPAYER
IDENTIFICATION NUMBER AND CERTIFY THAT SUCH STOCKHOLDER IS NOT SUBJECT TO
BACKUP FEDERAL INCOME TAX WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9
IN THE LETTER OF TRANSMITTAL. SEE INSTRUCTION 10 OF THE LETTER OF
TRANSMITTAL.
4. Withdrawal Rights.
Tenders of Shares made pursuant to the Offer are irrevocable except that
Shares may be withdrawn by a tendering stockholder at any time prior to the
Expiration Date and, unless theretofore accepted for payment by Purchaser
pursuant to the Offer, may also be withdrawn by such stockholder at any time
after June 20, 1995. If Purchaser extends the Offer, is delayed in its
acceptance for payment of Shares or is unable to accept Shares for payment
pursuant to the Offer for any reason, then, without prejudice to Purchaser's
rights under the Offer, the Depositary may, nevertheless, on behalf of
Purchaser, retain tendered Shares, and such Shares may not be withdrawn
except to the extent that tendering stockholders are entitled to withdrawal
rights as described in this Section 4. Any such delay will be by an extension
of the Offer to the extent required by law.
For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover page of this
Offer to Purchase. Any such notice of withdrawal must specify the name of the
person who tendered the Shares to be withdrawn, the number of Shares to be
withdrawn and the name of the registered holder of such Shares, if different
from that of the person who tendered such Shares. If Share Certificates
7
<PAGE>
evidencing Shares to be withdrawn have been delivered or otherwise identified to
the Depositary, then, prior to the physical release of such Share Certificates,
the serial numbers shown on such Share Certificates must be submitted to the
Depositary and the signature(s) on the notice of withdrawal must be guaranteed
by an Eligible Institution, unless such Shares have been tendered for the
account of an Eligible Institution. If Shares have been tendered pursuant to the
procedure for book-entry transfer as set forth in Section 3, any notice of
withdrawal will be effective if delivered to the Depositary by any method of
delivery described in the first sentence of this paragraph.
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, whose determination will be final and binding. None of Purchaser,
Parent, the Depositary, the Information Agent or any other person will be
under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification.
Any Shares properly withdrawn will thereafter be deemed not to have been
validly tendered for purposes of the Offer. However, withdrawn Shares may be
re-tendered at any time prior to the Expiration Date by following one of the
procedures described in Section 3.
5. Certain Federal Income Tax Consequences.
The receipt of cash for Shares pursuant to the Offer or in the Merger will
be a taxable transaction for federal income tax purposes and may also be a
taxable transaction under applicable state, local or foreign tax laws. In
general, a stockholder will recognize gain or loss for federal income tax
purposes equal to the difference between the amount of cash received in
exchange for the Shares sold and such stockholder's adjusted tax basis in
such Shares. For federal income tax purposes, such gain or loss will be
capital gain or loss if the Shares are capital assets in the hands of such
stockholder, and will be long-term capital gain or loss if such Shares have
been held for more than one year. A stockholder's ability to deduct capital
losses may be limited.
THE FOREGOING DISCUSSION MAY NOT BE APPLICABLE TO CERTAIN TYPES OF
STOCKHOLDERS, INCLUDING FINANCIAL INSTITUTIONS, BROKER-DEALERS, STOCKHOLDERS
WHO ACQUIRED SHARES PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR
OTHERWISE AS COMPENSATION, INDIVIDUALS WHO ARE NOT CITIZENS OR RESIDENTS OF
THE UNITED STATES AND FOREIGN CORPORATIONS.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND IS BASED UPON PRESENT LAW. STOCKHOLDERS ARE URGED TO
CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF
THE OFFER AND THE MERGER TO THEM, INCLUDING THE APPLICABILITY AND EFFECT OF
ANY STATE, LOCAL AND FOREIGN TAX LAWS.
8
<PAGE>
6. Price Range of Shares; Dividends.
The Shares are listed and principally traded on the NYSE. The following
table sets forth, for the quarters indicated, the high and low sales prices
per Share on the NYSE as reported by the Dow Jones News Service.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
1993:
First Quarter .................. $3-3/4 $2
Second Quarter ................. 3-3/8 2-3/8
Third Quarter .................. 3 1-7/8
Fourth Quarter ................. 2-1/2 1-7/8
1994:
First Quarter .................. 2-5/8 2
Second Quarter ................. 2-3/8 1-7/8
Third Quarter .................. 2-1/8 1-1/2
Fourth Quarter ................. 2 1-1/2
1995:
First Quarter (through 3/21/95) 2-1/4 1-5/8
</TABLE>
The Company has not paid any cash dividends on the Shares since it emerged
from bankruptcy in 1991 (see Section 7 below).
On March 15, 1995, the last full trading day prior to the announcement of
the execution of the Merger Agreement and of Purchaser's intention to
commence the Offer, the closing price per Share as reported on the NYSE was
$1-7/8. On March 21, 1995, the last full trading day prior to the
commencement of the Offer, the closing price per Share as reported on the
NYSE was $2-1/4.
STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE
SHARES.
7. Certain Information Concerning the Company.
Except as otherwise set forth herein, the information concerning the
Company contained in this Offer to Purchase, including financial information,
has been furnished by the Company or has been taken from or based upon
publicly available documents and records on file with the Commission and
other public sources. Neither Purchaser nor Parent assumes any responsibility
for the accuracy or completeness of the information concerning the Company
furnished by the Company or contained in such documents and records or for
any failure by the Company to disclose events which may have occurred or may
affect the significance or accuracy of any such information but which are
unknown to Purchaser or Parent.
General. The Company is a Delaware corporation with its principal
executive offices located at 900 Main Street South, Suite 2A, Building B,
Southbury, Connecticut 06488-0870. The Company, through its subsidiaries, The
Crosby Group, Inc., a Delaware corporation ("Crosby"), and The Harris Waste
Management Group, Inc., a Delaware corporation ("Harris"), is a specialty
manufacturer of products for the overhead lifting and waste recycling and
disposal markets. The Company emerged from bankruptcy under Chapter 11 of the
United States Bankruptcy Code and its plan of reorganization, as amended
and/or modified (the "Plan") and confirmed by the United States Bankruptcy
Court for the District of Colorado, became effective after the close of
business on October 23, 1991. Pursuant to the Plan, the Company was
reorganized around Crosby and Harris, which were not included in the
Company's Chapter 11 filing and were not in bankruptcy.
Crosby, headquartered in Tulsa, Oklahoma, designs and manufactures lifting
equipment, hardware and accessories, including blocks, sheaves, hooks,
shackles, turnbuckles, load binders and other fittings, for use with wire
rope and chain. Crosby's lifting equipment hardware is used in energy,
construction, manufacturing, marine and transportation applications.
Harris, headquartered in Peachtree City, Georgia, is primarily engaged in
the manufacture and marketing of recycling and waste management equipment
used in the plastic, waste paper, ferrous and non-ferrous scrap metal
9
<PAGE>
recycling industries and for solid waste disposal applications. Harris's
major products include large capacity, high-reduction balers used for
materials recovery and solid waste disposal facilities, metal shears and
balers used for processing scrap steel, and balers used for baling waste
materials.
Financial Information. Set forth below is certain selected consolidated
financial information relating to the Company and its subsidiaries which has
been excerpted or derived from the audited financial statements contained in
the Company's annual report on Form 10-K for the fiscal year ended December
31, 1994 (the "1994 Form 10-K"). More comprehensive financial information is
included in the 1994 Form 10-K and other documents filed by the Company with
the Commission. The financial information that follows is qualified in its
entirety by reference to such reports and other documents, including the
financial statements and related notes 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.
AMDURA CORPORATION AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Year Year Year
Ended Ended Ended
December 31, December 31, December 31,
1994 1993 1992
-------------- -------------- --------------
<S> <C> <C> <C>
Income Statement Data:
Operating revenues $145,159 $129,769 $127,250
Income (loss) before change in accounting
principle $ 1,617 $ 2,805 $(18,052)
Net income (loss) before change in accounting
principle, per common and common equivalent
share $ 0.06 $ 0.11 $ (1.45)
Balance Sheet Data (at period end):
Cash and cash equivalents $ 3,765 $ 4,377 $ 6,909
Working capital $ 33,556 $ 26,529 $ 23,300
Total assets $127,766 $112,501 $118,533
Long-term liabilities $ 33,367 $ 34,855 $ 36,692
Stockholders' capital $ 54,562 $ 46,420 $ 46,102
</TABLE>
10
<PAGE>
The Shares are registered under the Exchange Act. Accordingly, the Company
is subject to the informational filing requirements of the Exchange Act and,
in accordance therewith, is required to file periodic reports, proxy
statements and other information with the Commission relating to its
business, financial condition and other matters. Information as to particular
dates concerning the Company's directors and officers, their remuneration,
stock options granted to them, the principal holders of the Company's
securities and any material interest of such persons in transactions with the
Company is required to be disclosed in proxy statements distributed to the
Company's stockholders and filed with the Commission. Such reports, proxy
statements and other information should be available for inspection at the
public reference facilities maintained by the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549, and also should be available for
inspection at the Commission's regional offices located at Seven World Trade
Center, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials
may also be obtained by mail, upon payment of the Commission's customary
fees, by writing to its principal office at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The information should also be available for
inspection at the New York Stock Exchange, 20 Broad Street, New York, New
York 10005.
8. Certain Information Concerning Purchaser and Parent. Purchaser is a
newly incorporated Delaware corporation organized in connection with the
Offer and the Merger and has not carried on any activities other than in
connection with the Offer and the Merger. The principal offices of Purchaser
are located c/o FKI Industries Inc., 425 Post Road, Fairfield, Connecticut
06430-0970. Purchaser is an indirect wholly owned subsidiary of Parent.
Until immediately prior to the time that Purchaser will purchase Shares
pursuant to the Offer, it is not anticipated that Purchaser will have any
significant assets or liabilities or engage in activities other than those
incident to its formation and capitalization and the transactions
contemplated by the Offer and the Merger. Because Purchaser is newly formed
and has minimal assets and capitalization, no meaningful financial
information regarding Purchaser is available.
Purchaser is a wholly owned subsidiary of FKI Industries Inc., a New York
corporation ("Industries"). Industries has its principal office at 425 Post
Road, Fairfield, Connecticut 06430-0970. Industries' principal business is
diversified manufacturing, primarily in engineered metal products. Industries
operates through four business groups primarily in North America and Europe.
Industries' Material Handling Group, designs and manufactures material
handling systems and equipment, chain and lifting products and forgings for a
wide range of industrial, automotive and mining sectors from its principal
facilities in York, Pennsylvania; Warren, Michigan; Danville, Kentucky; and
Welland, Ontario, Canada.
Industries' Hardware Group headquartered in Grand Rapids, Michigan,
manufactures and supplies decorative furniture and cabinet hardware, window
and door hardware, casters, counterbalance mechanisms for office furniture
and equipment, wheels and security products from its facilities in Grand
Rapids, Michigan; Evansville, Indiana; Owatonna, Minnesota and Jamestown, New
York.
Industries' Automotive Group manufactures and supplies cable controls,
lighting systems and trim components for the international automotive
industry and niche industrial markets from key facilities in Blythville,
Arkansas; Milan, Tennessee; Stratford, Ontario Canada and Le Mans, France.
Industries' Engineering Group designs and manufactures process control
equipment and systems for the gas water and waste water industries from its
facilities in Watertown, Connecticut.
Industries is a wholly owned subsidiary of FKI Holdings Inc., a Delaware
corporation ("Holdings"). Holdings is a holding company with its registered
office c/o FKI Industries Inc., 425 Post Road, Fairfield, CT 06430-0970.
Holdings is a wholly owned subsidiary of FKI USA Holdings Limited, a company
organized under the laws of England ("USA Holdings"). USA Holdings is a
wholly owned subsidiary of Parent and a holding company with its registered
office c/o FKI plc, West House, King Cross Road, Halifax, West Yorkshire HX1
1EB, England.
Parent is a company organized under the laws of England. Its principal
offices are located at West House, King Cross Road, Halifax, West Yorkshire
HX1 1EB, England.
11
<PAGE>
Parent, together with its subsidiaries, comprises an international group
of autonomous manufacturing companies with four operating groups serving the
material handling, hardware, automotive and engineering markets. The
principal activities of Parent's groups are as follows:
Material Handling
Designs and manufactures material handling systems and equipment, chain and
lifting products and forgings for a wide range of industrial, automotive and
mining sectors worldwide.
Hardware
Manufactures and supplies decorative furniture and cabinet hardware, window
and door hardware, casters, counter balance mechanisms for office furniture
and equipment, wheels and security products.
Automotive
Manufactures and supplies cable controls, lighting systems and trim
components for the international automotive industry and niche industrial
markets.
Engineering
Manufactures process control equipment, power conversion equipment, high
integrity electrical drives, propulsion systems, electrical switchgear,
transformers, distribution equipment and dynamometers for engine and vehicle
test systems.
Parent is the holding company of the group, with direct and indirect share
interest in subsidiaries and associated companies.
Parent was incorporated in England on March 6, 1920 under the name Woodend
Securities Limited under the Companies Acts 1908 to 1917 and re-registered on
June 3, 1982 as a public limited company under the Companies Acts 1948 to
1981. Parent currently operates under the provisions of the Companies Act
1985 as a company limited by shares. Parent's four groups resulted from a
number of acquisitions and divestitures in the 1980's and 1990's and in
particular the merger with Babcock International plc in 1987 and the
subsequent demerger of Babcock International Group PLC in 1989.
The name, citizenship, business address, principal occupation or
employment, and five-year employment history for each of the directors and
executive officers of Purchaser and Parent and certain other information are
set forth in Schedule I hereto.
The principal listing of the FKI plc Ordinary Shares of 10p each is on The
International Stock Exchange of the United Kingdom and the Republic of
Ireland Limited (the "London Stock Exchange") in London.
Set forth below are certain selected consolidated financial data relating
to Parent and its subsidiaries at March 31, 1994, March 31, 1993 and March
31, 1992, which have been excerpted or derived from the audited financial
statements of Parent for the fiscal years then ended. The unaudited financial
information for the six- month periods ended September 30, 1994 and September
30, 1993 was included in an interim report for the half year ended September
30, 1994 issued by Parent on November 17, 1994. The following summary is
qualified in its entirety by reference to these reports and all the financial
statements and the related notes therein.
The following financial statements of Parent have been prepared in
accordance with generally accepted accounting principles applicable in the
United Kingdom ("UK GAAP"), which practices are described in the notes to
such statements. UK GAAP differs in certain significant respects from
generally accepted accounting principles applicable in the United States ("US
GAAP"). A summary of the principal differences between US GAAP and UK GAAP
and the necessary adjustments to reconcile UK GAAP net income and
shareholders' equity to US GAAP net income and shareholders' equity is set
forth below.
12
<PAGE>
FKI PLC AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
(IN MILLIONS EXCEPT PER SHARE DATA)
Income Statement Data:
<TABLE>
<CAPTION>
Fiscal Year Ended Half Year Ended
----------------------------------------------- ----------------------------------------------
31 March 31 March 31 March 31 March 30 September 30 September 30 September
1994 1994 1993 1992 1994 1994 1993
US US
Dollars (1) Pounds Sterling Dollars (1) Pounds Sterling
------------ --------------------------------- ------------- ------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Sales .................. 1,182.2 794.5 756.1 739.1 642.9 407.7 394.1
Operating income ........... 89.9 60.4 45.1 35.2 57.7 36.6 25.8
Income before taxes and
minority interests ........ 77.8 52.3 38.0 20.7 29.5 18.7 22.1
Net income for Ordinary
Shareholders .............. 54.3 36.5 27.4 11.7 14.4 9.1 15.6
Weighted average number of
Ordinary Shares ...........
Primary ................. 443.4 443.4 441.6 441.5 446.6 446.6 442.4
Fully diluted ........... 455.5 455.5 454.5 454.2 459.7 459.7 455.2
Earnings per Ordinary Shares
Primary:
Net income ............ 0.12 8.22p 6.20p 2.65p 0.03 2.03p 3.52p
Fully diluted:
Net income ............ 0.12 8.15p 6.15p 2.73p 0.03 2.04p 3.49p
Balance Sheet Data:
31 March 31 March 31 March 30 September 30 September 30 September
1994 1994 1993 1994 1994 1993
US US
Dollars(1) Pounds Sterling Dollars(1) Pounds Sterling
---------- ------------------- ------------ ----------------------------
Current assets ............. 687.0 461.7 448.8 737.6 467.7 463.4
Total assets ............... 1,018.7 684.6 650.3 1,093.2 693.2 676.1
Current liabilities ........ 483.2 324.7 262.0 515.5 326.9 284.7
Working capital ............ 203.7 136.9 186.8 222.0 140.8 178.7
Net indebtedness ........... 151.3 101.7 58.6 129.8 82.3 51.6
Shareholders' equity ....... 298.3 200.5 232.4 338.1 214.4 238.5
</TABLE>
- ------
1) Pounds Sterling ("BP") is translated into US Dollars solely for the
convenience of the reader at the noon buying rate in New York City on the
date specified for cable transfers in Pounds Sterling as certified for
customs purposes by the Federal Reserve Bank of New York ("the Noon Buying
Rate"). The Noon Buying Rate in effect on 30 September 1994 was BP 1.00 =
$1.5770 and the Noon Buying Rate in effect on 31 March 1994 was BP 1.00 =
$1.4880.
13
<PAGE>
PRINCIPAL DIFFERENCES BETWEEN UNITED KINGDOM
AND UNITED STATES GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES
The financial information provided above was prepared in accordance with
UK GAAP, which differs in certain significant respects from US GAAP. These
differences that are relevant to Parent relate principally to the following
items and the necessary adjustments, where quantifiable, are shown in the
tables set out below.
Goodwill. Under UK GAAP, Parent writes off acquisition goodwill against
retained earnings in its consolidated balance sheet in the year of
acquisition. Through March 31, 1994, goodwill included costs of
reorganization and restructuring both the acquired entity's business and the
acquiror's business. Beginning in fiscal year 1995, due to a change in UK
financial reporting requirements, goodwill may not include such costs as they
must be expensed as incurred.
Under US GAAP, goodwill is recognized on the balance sheet and amortized
by charges against income over its estimated useful life, not to exceed 40
years. Goodwill includes costs of restructuring the acquired entity's
business.
Deferred Taxation. Under UK GAAP, no provision is made for deferred
taxation if there is reasonable evidence that such deferred taxation will not
be payable in the foreseeable future. Under US GAAP, deferred taxation is
provided in full on the liability method in accordance with the provisions of
Statement of Financial Accounting Standards No. 109.
Revaluation of Properties. Under UK GAAP, properties may be restated on
the basis of appraised values in financial statements prepared in all other
respects in accordance with the historical cost convention. Such restatements
are not generally permitted under US GAAP, except in connection with purchase
accounting, and accordingly, adjustments to net income and shareholders'
equity are required to eliminate the above restatements.
Capitalized Research and Development. Under UK GAAP, Parent capitalizes
development expenditures on clearly defined projects whose income can be
assessed with reasonable certainty. Amortization of such expenditure is
commenced in the year the expenditure is incurred by reference to the lesser
of the life of the project or three years. No such capitalization is
allowable under US GAAP.
Change in Accounting Policy. Under UK GAAP, the cumulative effect of
changes in accounting policy are treated as a prior year adjustment to
retained earnings. Under US GAAP, such items are treated as a charge to the
income statement in the year of introduction of the new accounting policy.
Consequently, the introduction of Statement of Financial Accounting Standards
No. 106 requires restating for US accounting purposes.
14
<PAGE>
FKI PLC AND SUBSIDIARIES
APPROXIMATE IDENTIFIABLE EFFECTS
ON NET INCOME OF DIFFERENCES BETWEEN UNITED KINGDOM
AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(IN MILLIONS)
<TABLE>
<CAPTION>
Fiscal Year Ended
------------------------------------------------------
31 March 31 March 31 March 31 March
1994 1994 1993 1992
US Dollars (1) Pounds Sterling
-------------- -------------------------------------
<S> <C> <C> <C> <C>
Net income per UK GAAP ............ 54.3 36.5 27.4 11.7
US GAAP Adjustments (net of tax): .
Amortisation of goodwill (2) ...... (4.0) (2.7) (0.9) (1.3)
Deferred Taxation ................. (1.5) (1.0) (3.1) 3.1
Research & Development ............ 0.3 0.2 (0.1) (0.6)
Effect of FAS 106 ................. -- -- (25.7) --
------ ------ ------ -----
Net income as adjusted for US GAAP 49.1 33.0 (2.4) 12.9
------ ------ ------ -----
</TABLE>
CUMULATIVE APPROXIMATE IDENTIFIABLE EFFECTS ON
SHAREHOLDERS EQUITY OF DIFFERENCES BETWEEN UNITED KINGDOM
AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(IN MILLIONS)
<TABLE>
<CAPTION>
31 March 31 March 31 March
1994 1994 1993
US Dollars (1) Pounds Sterling
-------------- ------------------------
<S> <C> <C> <C>
Shareholders' equity per UK GAAP ............ 298.3 200.5 232.4
US GAAP Adjustments: ........................
Goodwill (2) ................................ 149.4 100.4 51.7
Deferred Taxation ........................... (15.0) (10.1) (8.9)
Property revaluations ....................... (0.7) (0.5) (0.5)
Research & Development ...................... (4.3) (2.9) (3.4)
------ ------ ------
Shareholders' equity as adjusted for US GAAP 427.7 287.4 271.3
------ ------ ------
</TABLE>
- ------
1) Pounds Sterling ("BP") is translated into US Dollars solely for the
convenience of the reader at the noon buying rate in New York City on the
date specified for cable transfers in Pounds Sterling as certified for
customs purposes by the Federal Reserve Bank of New York ("the Noon Buying
Rate"). The Noon Buying Rate in effect on 31 March 1994 was BP 1.00 -
$1.4880.
2) A calculation has been made for the effects of the differences arising on the
accounting for goodwill where it is practical to so do. For the remaining
businesses of Babcock International plc acquired in 1987 it is no longer
practical to make a reasonable estimate of the goodwill figure relating to
these businesses due to the subsequent restructuring of the enlarged group
post acquisition. Consequently, no asset value and no annual amortisation has
been allocated in respect of goodwill to such remaining businesses in the
above tables.
Except as described in this Offer to Purchase, (i) none of Purchaser,
Parent nor, to the best knowledge of Purchaser and Parent, any of the persons
listed in Schedule I to this Offer to Purchase or any associate or
majority-owned subsidiary of Purchaser, Parent or any of the persons so
listed beneficially owns or has any right to acquire, directly or indirectly,
any Shares and (ii) neither Purchaser nor Parent nor, to the best knowledge
of Purchaser and Parent, any of the persons or entities referred to above nor
any director, executive officer or subsidiary of any of the foregoing has
effected any transaction in the Shares during the past 60 days.
Except as provided in the Merger Agreement, the Stockholders Agreement and
the Supplemental Stockholders Agreement and as otherwise described in this
Offer to Purchase, none of Purchaser, Parent nor, to the best knowledge of
Purchaser and Parent, any of the persons listed in Schedule I to this Offer
15
<PAGE>
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 against loss, 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 January 1, 1992, neither Purchaser nor Parent nor, to the best
knowledge of Purchaser and Parent, any of the persons listed on Schedule I
hereto, has had any business relationship or transaction with the Company or any
of its executive officers, directors or affiliates that is required to be
reported under the rules and regulations of the Commission applicable to the
Offer. Except as set forth in this Offer to Purchase, since January 1, 1992,
there have been no contacts, negotiations or transactions between any of
Purchaser, Parent, or any of their respective subsidiaries or, to the best
knowledge of Purchaser and Parent, any of the persons listed in Schedule I to
this Offer to Purchase, on the one hand, and the Company or its affiliates, on
the other hand, concerning a merger, consolidation or acquisition, tender offer
or other acquisition of securities, an election of directors or a sale or other
transfer of a material amount of assets.
9. FINANCING OF THE OFFER AND THE MERGER.
The total amount of funds required by Purchaser to consummate the Offer
and the Merger and to pay related fees and expenses is estimated to be
approximately $65 million. Purchaser will obtain all of such funds from
Parent or its affiliates.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY; THE MERGER AGREEMENT
AND STOCKHOLDERS AGREEMENTS.
BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY
During November 1994, Parent became aware that the Board of the Company
was looking at the future of its Harris subsidiary and Parent determined that
it would be interested in looking at the possibility of acquiring the
Company's other subsidiary, Crosby. Parent was aware of Crosby as an
operation which would fit in well with its existing material handling
operations.
Parent, through Steven D. Jones, its Director of Corporate Planning, made
contact with the Company's financial advisors, DLJ, and after signing a
confidentiality agreement dated November 21, 1994, obtained a brief
memorandum on the Crosby business. On January 5, 1995, Mr. Jones, Robert G.
Beeston, Chief Executive of Parent, and Robert Sook, President of Parent's
Material Handling Group, met with representatives of the Company, including
Frederick W. Whitridge, Jr., Chairman, and James A. Bach, President and Chief
Executive Officer of the Company. The possibility of Parent's purchasing
Crosby was discussed but no agreement was reached. The possibility of Parent
acquiring the total business of the Company was also discussed.
On January 23, 1995, Mr. Sook visited the major manufacturing sites of
Harris. Following his review, Parent determined it might have an interest in
acquiring the entire business of the Company.
On February 2, 1995, Jeffrey Whalley, Chairman of Parent, and Mr. Jones
met with representatives of the Company, including Messrs. Whitridge and
Bach, to discuss Parent's preliminary interest in acquiring the entire
business of the Company. Following this meeting it was agreed that the
Company would enter into an agreement with Parent under which the Company
would not solicit third party interest in its operations while Parent
conducted a due diligence investigation of the Company's operations. The
parties signed that agreement on February 15, 1995.
On Wednesday, March 1, 1995, Mr. Jones met with Messrs. Whitridge and Bach
and discussed various approaches to a potential acquisition of the Company by
Parent. No agreement was reached at this meeting.
On March 8, 1995, a meeting of the Board of Directors of Parent was
convened and the possible acquisition of the Company was considered. It was
agreed that Parent should attempt to negotiate an agreement with the Company
and certain of its major stockholders which would lead to the acquisition of
16
<PAGE>
all of the outstanding capital stock of the Company. A special committee of the
Board of Parent consisting of Messrs. Whalley and Beeston and Eric J. Bowers,
Parent's Finance Director, was formed to negotiate with the Company. Subject to
limits on the principal terms and conditions, the Board of Parent approved the
acquisition of the Company.
Between March 10, 1995 and March 15, 1995 various meetings took place
among Messrs. Whalley, Beeston and Jones of Parent, Messrs. Whitridge and
Bach and representatives of certain of the major stockholders of the Company
to discuss the terms of a cash tender offer by Parent in the context of a
merger agreement and stockholders agreement.
On March 14, 1995 and March 15, 1995, the Board met to consider the
proposed transaction. On March 15, 1995 meeting, DLJ delivered its
opinion addressed to the Board to the effect that the consideration to be
received by the holders of Shares pursuant to the Merger Agreement is fair,
from a financial point of view, to such holders and the Board, among other
things, (i) determined by unanimous vote that the Offer and the Merger are fair
to and in the best interests of the stockholders of the Company, (ii)
authorized and approved the Merger Agreement by unanimous vote and (iii)
recommended by unanimous vote that the stockholders of the Company accept the
Offer and tender their Shares pursuant to the Offer.
Following such meetings, on March 15, 1995, Parent, Purchaser and the
Company entered into the Merger Agreement, Purchaser and the Stockholders
entered into the Stockholders Agreement, and Purchaser and certain
Stockholders entered into the Supplemental Stockholders Agreement.
THE MERGER AGREEMENT
The following is a summary of the Merger Agreement, a copy of which has
been filed as an Exhibit to the Tender Offer Statement on Schedule 14D-1 (the
"Schedule 14D-1") filed by Purchaser and Parent with the Commission in
connection with the Offer. Such summary is qualified in its entirety by
reference to the Merger Agreement.
The Offer. The Merger Agreement provides for the commencement of the Offer
as promptly as reasonably practicable, but in no event later than five
business days after the initial public announcement of Purchaser's intention
to commence the Offer. The obligation of Purchaser to accept for payment
shares tendered pursuant to the Offer is subject to the satisfaction of the
Minimum Condition and certain other conditions that are described in Section
14 hereof. Purchaser and Parent have agreed that no change in the Offer may
be made which decreases the price per share payable in the Offer, which
reduces the number of Shares sought to be purchased in the Offer, which
imposes conditions to the Offer in addition to those set forth in Section 14
hereof, which amends or changes the terms and conditions of the Offer in any
manner adverse to the holders of Shares or changes or waives the Minimum
Condition.
The Merger. The Merger Agreement provides that, upon the terms and subject
to the conditions thereof, and in accordance with Delaware Law, at the
Effective Time, Purchaser shall be merged with and into the Company. As a
result of the Merger, the separate corporate existence of Purchaser will
cease and the Company will continue as the Surviving Corporation and will
become an indirect, wholly owned subsidiary of Parent. The Merger Agreement
provides that, notwithstanding anything to the contrary contained in this
paragraph, Parent may elect instead, at any time prior to the fifth business
day immediately preceding the date on which the Proxy Statement (as
hereinafter defined) is mailed initially to the Company's stockholders, to
merge the Company into Purchaser or another direct or indirect wholly owned
subsidiary of Parent. Upon consummation of the Merger, each issued and then
outstanding Share (other that any Shares held in the treasury of the Company,
Shares owned by Purchaser, Parent or any direct or indirect wholly owned
subsidiary of Parent or of the Company, and Shares held by stockholders who
have not voted in favor of the Merger or consented thereto in writing and who
shall have demanded properly in writing appraisal for such Shares in
accordance with Delaware Law) shall be cancelled and converted automatically
into the right to receive the Merger Consideration.
Pursuant to the Merger Agreement, each share of Common Stock, par value
$.01 per share, of Purchaser issued and outstanding immediately prior to the
Effective Time shall be converted into and exchanged for one share of Common
Stock, par value $.01 per share, of the Surviving Corporation.
17
<PAGE>
The Merger Agreement provides that the directors of Purchaser immediately
prior to the Effective Time will be the initial directors of the Surviving
Corporation and that the officers of the Company immediately prior to the
Effective Time will be the initial officers of the Surviving Corporation. The
Merger Agreement provides that, at the Effective Time, unless otherwise
determined by Parent prior to the Effective Time, and subject to the
requirements of sections of the Merger Agreement that provide for
indemnification of directors and officers (as described herein), the
Certificate of Incorporation and By-laws of the Company as in effect
immediately prior to the Effective Time shall be the Certificate of
Incorporation and By-laws of the Surviving Corporation.
Agreements of Parent, Purchaser and the Company. Pursuant to the Merger
Agreement, the Company, acting through the Board, shall, subject to the
fiduciary duties of the Board, if required in order to consummate the Merger,
duly call, give notice of, convene and hold an annual or special meeting of
its stockholders as soon as practicable following consummation of the Offer
for the purpose of considering and taking action on the Merger Agreement and
the Merger (the "Stockholders' Meeting").
Proxy Statement. The Merger Agreement provides that the Company shall, as
soon as practicable following consummation of the Offer, file with the
Commission under the Exchange Act, and use its reasonable best efforts to
have cleared by the Commission, a proxy statement and related proxy materials
(the "Proxy Statement") with respect to the Stockholders' Meeting and shall
cause the Proxy Statement to be mailed to Stockholders of the Company at the
earliest practicable time. The Company has also agreed, subject to its
fiduciary duties under applicable law as advised in writing by counsel, to
include in the Proxy Statement the unanimous recommendation of the Board that
the stockholders of the Company approve and adopt the Merger Agreement and
the Merger and to use its reasonable best efforts to obtain such approval and
adoption. To the extent permitted by law, Parent and Purchaser have each
agreed to vote all shares beneficially owned by them in favor of the Merger.
Conduct of Business. Pursuant to the Merger Agreement, the Company has
covenanted and agreed that, between the date of the Merger Agreement and the
election or appointment of Purchaser's designees to the Board (as described
in the next following paragraph) upon the purchase by Purchaser of any Shares
pursuant to the Offer (the "Purchaser's Election Date"), unless Parent shall
otherwise agree in writing, the businesses of the Company and its
subsidiaries (the "Subsidiaries" and, individually, a "Subsidiary") shall be
conducted only in, and the Company and the Subsidiaries shall not take any
action except in, the ordinary course of business and in a manner consistent
with past practice; and the Company shall use its reasonable best efforts to
preserve substantially intact the business organization of the Company and
the Subsidiaries, to keep available the services of the current officers,
employees and consultants of the Company and the Subsidiaries and to preserve
the current relationships of the Company and the Subsidiaries with customers,
suppliers and other persons with which the Company or any Subsidiary has
significant business relations. The Merger Agreement provides that by way of
amplification and not limitation, and except as contemplated therein, neither
the Company nor the Subsidiaries shall, between the date of the Merger
Agreement and Purchaser's Election Date, directly or indirectly do, or
propose to do, any of the following, without the prior written consent of
Parent: (a) amend or otherwise change its Certificate of Incorporation or
By-laws or equivalent organizational document; (b) issue, sell, pledge,
dispose of, grant, encumber, or authorize the issuance, sale, pledge,
disposition, grant or encumbrance of (i) any shares of capital stock of any
class of the Company or any Subsidiary or any options, warrants, convertible
securities or other rights of any kind to acquire any shares of such capital
stock, or any other ownership interest (including, without limitation, any
phantom interest), of the Company or any Subsidiary (except for the issuance
of Shares issuable pursuant to Options (as hereinafter defined) outstanding
on the date of the Merger Agreement or upon conversion of Preferred Shares
(as hereinafter defined) or upon consummation of the Class Action Settlement)
or (ii) any assets of the Company or any Subsidiary, except for sales of
products in the ordinary course of business and in a manner consistent with
past practice: (c) declare, set aside, make or pay any dividend or other
distribution payable in cash, stock, property or otherwise, with respect to
any of its capital stock (except for required dividends on the Preferred
Shares and except for such declarations, set asides, dividends, and other
distributions made from any Subsidiary to its corporate parent); (d)
reclassify, combine, split, subdivide or redeem, purchase or otherwise
acquire, directly or indirectly, any of its capital stock; (e) (i) acquire
(including, without limitation, by merger, consolidation, or acquisition of
stock or assets) any corporation, partnership, other business organization or
any division thereof or any material amount of assets other than in the
ordinary course of business, or (ii) except pursuant to existing credit
18
<PAGE>
facilities, incur any indebtedness for borrowed money or issue any debt
securities or assume the obligations of any person, or make any loans or
advances, except in the ordinary course of business and consistent with past
practice; (f) increase the compensation payable or to become payable to its
officers or employees, except for increases in accordance with past practices in
salaries or wages of employees of the Company or any Subsidiary who are not
officers of the Company, or grant any severance or termination pay to, or enter
into any employment or severance agreement with any director, officer or other
employee of the Company or any Subsidiary, or establish, adopt, enter into or
amend any collective restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any director, officer or
employee or circulate to any employee any details of any such plan proposed to
be adopted; (g) make any tax election or settle or compromise any material
federal, state, local or foreign income tax liability; (h) pay, discharge or
satisfy any claim, liability or obligation (absolute, secured, asserted or
unasserted, contingent or otherwise), other than the payment, discharge or
satisfaction, in the ordinary course of business and consistent with past
practice, of liabilities reflected or reserved against in the consolidated
balance sheet of the Company and the Subsidiaries as at December 31, 1994
included in the 1994 Form 10-K or subsequently incurred in the ordinary course
of business and consistent with past practice; (i) settle or compromise any
pending or threatened suit, action or claim which is material or which relates
to the Offer, the Merger, or any of the transactions contemplated by the Merger
Agreement; or (j) take or offer or propose to take, or agree to take in writing,
or otherwise, any of the actions described above or any action that would result
in any of the conditions to the Offer not being satisfied (other than as
contemplated by the Merger Agreement).
Designation of Directors. The Merger Agreement provides that, promptly
upon the purchase by Purchaser of Shares pursuant to the Offer which
constitute a majority of the outstanding shares on a fully diluted basis,
Purchaser shall be entitled to designate such number of directors as shall
constitute a majority of the total number of directors on the Board (giving
effect to the directors elected pursuant to this sentence), and the Company
shall, at such time, promptly take all actions necessary to cause Purchaser's
designees to be elected as directors of the Company, including increasing the
size of the Board or securing the resignations of incumbent directors, or
both. The Merger Agreement also provides that, at such time, the Company
shall use its best efforts to cause persons designated by Purchaser to
constitute a majority of (i) each committee of the Board (some of the members
of which may be required to be independent as required by applicable law),
(ii) each board of directors of each domestic Subsidiary and (iii) each
committee of each such board, in each case only to the extent permitted by
applicable law.
Amendments. The Merger Agreement provides that following the election or
appointment of Purchaser's designees in accordance with the immediately
preceding paragraph and prior to the Effective Time, any amendment of the
Merger Agreement or the Certificate of Incorporation or By-laws of the
Company, any termination of the Merger Agreement by the Company, and
extension by the Company of the time for the performance of any of the
obligations or other acts of Parent or Purchaser or waiver of any of the
Company's rights thereunder, will require the concurrence of a majority of
those directors of the Company then in office who were not designated by
Purchaser or, if no such directors are then in office, no such amendment,
termination, extension or waiver shall be affected which is materially
adverse to the holders of Shares (other than Parent and its subsidiaries).
Access to Information; Confidentiality. Pursuant to the Merger Agreement,
from the date of the Merger Agreement until the consummation of the Offer,
the Company shall, and shall cause the Subsidiaries and the officers,
directors, employees, auditors and agents of the Company and the Subsidiaries
to, afford the officers, employees and agents of Parent and Purchaser
complete access at all reasonable times to the officers, employees, agents,
properties, offices, plants and other facilities, books and records of the
Company and each Subsidiary, and shall furnish Parent and Purchaser with all
financial, operating and other data and information as Parent or Purchaser,
through its officers, employees or agents, may reasonably request. Parent and
Purchaser have agreed to keep such information confidential in accordance
with the Confidentiality Agreement, dated as of November 21, 1994, between
Parent and the Company (the "Confidentiality Agreement").
The Company has agreed that, to the extent permitted by applicable law, in
order to facilitate the continuing operation of the Company by Parent and
19
<PAGE>
Purchaser from and after the completion of the Offer without disruption and to
assist in an achievement of an orderly transition in the ownership and
management of the Company, from the date of the Merger Agreement and until
completion of the Offer, the Company, Parent and Purchaser shall cooperate
reasonably with each other to effect an orderly transition.
No Solicitation of Transactions. The Company has agreed that, until the
Merger Agreement shall have been terminated according to its terms (as
described below), neither it nor any Subsidiary shall, directly or
indirectly, through any officer, director, agent or otherwise, solicit,
initiate or encourage the submission of, any proposal or offer from any
person relating to, participate in any negotiations regarding, or furnish to
any other person any information with respect to, or otherwise cooperate in
any way with, or assist or participate in, facilitate or encourage, any Third
Party Transaction (as defined on page 2 hereof); provided, however, that
nothing contained in the Merger Agreement shall prohibit the Board from
furnishing information to, or entering into discussions or negotiations with,
any person in connection with an unsolicited proposal by such person with
respect to a Third Party Transaction if, and only to the extent that, (i)
such person is, in the good faith judgment of the Board (or a duly designated
committee thereof) after consultation with its advisors, capable of effecting
a Third Party Transaction which would be more favorable to the stockholders
than the Offer and the Merger taken together, and (ii) prior to furnishing
confidential information to such person the Company obtains from such person
an executed confidentiality agreement on terms no less favorable to the
Company than those contained in the Confidentiality Agreement. The Company
has also agreed to notify Parent promptly if any such proposal or offer, or
any inquiry or contact with any person with respect thereto, is made. The
Company has also agreed not to release any third party from any
confidentiality or, subject to the fiduciary duties of the Board, standstill
agreement to which the Company is or may become a party.
Treatment of Stock Options. At the Effective Time, each outstanding option
to purchase Shares (in each case, an "Option") granted under the Company's
1992 Stock Option Plan, as amended (the "Stock Option Plan"), whether or not
then exercisable, shall be cancelled by the Company, and each holder of a
cancelled Option shall be entitled to receive from Purchaser, at the time as
payment for Shares is made by Purchaser in connection with the Offer, in
consideration for the cancellation of such Option, an amount in cash equal to
the product of (i) the number of shares previously subject to such option and
(ii) the excess, if any, of the Merger Consideration over the exercise price
per Share previously subject to such Option.
Treatment of Preferred Shares. The Merger Agreement provides that at the
Effective Time, each share of Series B Cumulative Convertible Preferred
Stock, par value $.01 per share, of the Company issued and outstanding
immediately prior to the Effective Time (each a "Preferred Share") shall be
cancelled and shall be converted automatically into the right to receive in
cash an amount equal to $2,500.00 plus all accrued but unpaid dividends on
such Preferred Share which shall be payable, without interest, to the holder
of such Preferred Share upon surrender of the certificate that formerly
evidenced such Preferred Share.
Indemnification and Insurance. The Merger Agreement provides that if the
Offer is consummated, Parent, Purchaser and the Company shall, and from and
after the Effective Time, Parent and the Surviving Corporation shall,
maintain the rights to indemnification of officers and directors provided for
in the By-laws of the Company as in effect on the date of the Merger
Agreement with respect to indemnification for acts and omissions occurring
prior to the Effective Time, including, without limitation, the transactions
contemplated by the Merger Agreement.
The Merger Agreement provides that the Company shall, from and after the
date of the Merger Agreement and to and including the Effective Time, and the
Surviving Corporation shall, for six years from the Effective Time, maintain
in effect the current directors' and officers' liability insurance policies
maintained by the Company (provided that the Surviving Corporation may
substitute therefor policies of at least the same coverage and amounts
containing terms and conditions which are no less advantageous to such
officers and directors so long as substitution does not result in gaps or
lapses in coverage) with respect to matters occurring prior to the Effective
Time; provided, however, that in no event shall the Surviving Corporation be
required to expend more than an amount per year equal to 110 percent of the
current annual premiums paid by the Company for such insurance (which
premiums the Company has represented to Parent and Purchaser to be
approximately $185,000 in the aggregate) and, in the event the cost of such
coverage shall exceed that amount, the Surviving Corporation will purchase as
much coverage as possible for that amount.
Parent, Purchaser and the Company have also agreed that in the event the
Company or the Surviving Corporation or any of their respective successors or
20
<PAGE>
assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any person, then and in each such case, proper provision shall be made so
that the successors and assigns of the Company, the Surviving Corporation or
Parent, as the case may be, or at Parent's option, Parent, shall assume the
foregoing indemnity obligations.
The Merger Agreement provides that the obligations of the Company or the
Surviving Corporation with respect to the above-described provisions
regarding indemnification and insurance shall not be terminated or modified
in such a manner as to adversely affect any director, officer, employee,
fiduciary and agent to whom the indemnification and insurance provisions
therein apply without the consent of each affected director, officer,
employee, fiduciary and agent.
The Merger Agreement provides that in the event that the Company or the
Surviving Corporation should fail, at any time from and after the Purchaser's
Election Date, to comply with any of the foregoing indemnification and
insurance obligations for any reason, Parent shall be responsible therefor.
Parent has agreed to perform such obligations unconditionally without regard
to any defense or other basis for nonperformance which the Company or the
Surviving Corporation may have or claim (except any claim that performance is
prohibited by applicable Delaware Law). The Merger Agreement provides that
Parent, Purchaser, and the Company intend that the officers, directors,
employees, fiduciaries and agents of the Company and its Subsidiaries shall
be fully indemnified and that the foregoing indemnification provisions shall
be a primary obligation of Parent and not merely a guarantee by Parent of the
obligations of the Company or Purchaser.
Employee Benefits. Pursuant to the Merger Agreement, Parent has agreed
that for a period of one year following the Effective Time, Parent shall
cause the Surviving Corporation to provide employees of the Subsidiaries
(excluding employees covered by collective bargaining agreements) with
pension, insurance and other similar benefits following the Effective Time
which are, in the aggregate, at least as favorable to the employees as the
benefits provided for such employees by the Company as of the date of the
Merger Agreement.
Further Action. The Merger Agreement provides that, subject to its terms
and conditions, each of the parties thereto shall (i) make promptly its
respective filings, and thereafter make any other required submissions, under
the HSR Act and the Exon-Florio Act with respect to the transactions
contemplated by the Merger Agreement, (ii) subject to the fiduciary duties of
the Board, use its reasonable best efforts to take, or cause to be taken, all
appropriate action and to do or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate and
make effective the transactions contemplated by the Merger Agreement,
including, without limitation, using its reasonable best efforts to obtain
all licenses, permits (including, without limitation, environmental permits),
consents, approvals, authorizations, qualifications and orders of
governmental authorities and parties to contracts with the Company and the
Subsidiaries as are necessary for the consummation of the transactions
contemplated by the Merger Agreement and to fulfill the conditions to the
Offer and the Merger, and (iii) except as contemplated by the Merger
Agreement, use its reasonable best efforts not to take any action, or enter
into any transaction, which would cause any of its representations or
warranties contained in the Merger Agreement to be untrue or result in a
breach of any covenant made by it in the Merger Agreement.
Under the Merger Agreement, Parent has agreed to take all action necessary
to cause Purchaser to perform all of Purchaser's, and the Surviving
Corporation to perform all of the Surviving Corporation's, agreements,
covenants and obligations under the Merger Agreement and to consummate the
Offer and the Merger on the terms and conditions set forth in the Merger
Agreement. The Merger Agreement provides that Parent shall be liable for any
breach of any representation, warranty, covenant or agreement of Purchaser
and for any breach of the foregoing covenant.
In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of the Merger Agreement, the
proper officers and directors of each party to the Merger Agreement then in
office are required to use their reasonable best efforts to take all such
action.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto including
representations by the Company as to financial statements and filings with
the Commission, the absence of certain changes or events concerning the
Company's business, compliance with law, litigation, properties and assets,
leases, environmental matters and brokers.
21
<PAGE>
Conditions to the Merger. Under the Merger Agreement, the respective
obligations of each party to effect the Merger are subject to the
satisfaction at or prior to the Effective Time of the following conditions
and only the following conditions: (a) the Merger Agreement and the Merger
shall have been approved and adopted by the stockholders of the Company to
the extent required by Delaware law and the Company's Certificate of
Incorporation; (b) any waiting period (and any extension thereof) applicable
to the consummation of the Merger under the HSR Act shall have expired or
been terminated; (c) no investigation shall be threatened or pending under
the Exon-Florio Act with respect to any of the transactions contemplated by
the Merger Agreement; (d) no foreign, United States or state governmental
authority or other agency or commission or foreign, United States or state
court of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any law, rule, regulation, executive order, decree,
injunction or other order (whether temporary, preliminary or permanent) which
is then in effect and has the effect of making the Merger illegal or
otherwise preventing or prohibiting consummation of the Merger; and (e)
Purchaser or its permitted assignee shall have purchased all Shares validly
tendered and not withdrawn pursuant to the Offer; provided, however, neither
Parent nor Purchaser shall be entitled to assert the failure of this
condition if, in breach of the Merger Agreement or the terms of the Offer,
Purchaser fails to purchase any Shares validly tendered and not withdrawn
pursuant to the Offer.
Termination; Fees and Expenses. The Merger Agreement provides that it may
be terminated and the Merger and the other transactions contemplated by the
Merger Agreement may be abandoned at any time prior to the Effective Time,
notwithstanding any requisite approval and adoption of the Merger Agreement
and the transactions contemplated by the Merger Agreement by the stockholders
of the Company: (a) by mutual written consent duly authorized by the Boards
of Directors of Parent and the Company prior to Purchaser's Election Date;
(b) by Parent, Purchaser or the Company if (i) the Effective Time shall not
have occurred on or before September 30, 1995; provided, however, that the
right to terminate the Merger Agreement under this clause (b) 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 of the
Effective Time to occur on or before such date, or (ii) any court or other
governmental authority of competent jurisdiction shall have issued an order,
decree or ruling or taken any other action restraining, enjoining or
otherwise prohibiting the Merger and such order, decree, ruling or other
action shall have become final and nonappealable; (c) by Parent if (i) due to
an occurrence or circumstance that results in a failure to satisfy any
condition set forth in Section 14 hereof, Purchaser shall have (A) failed to
commence the Offer within 10 days following the date of the Merger Agreement,
(B) terminated the Offer without having accepted any Shares for payment
thereunder, or (C) failed to pay for Shares pursuant to the Offer within 90
days following the commencement of the Offer, unless any such failure listed
above shall have been caused by or resulted from the failure of Parent or
Purchaser to perform in any material respect any material covenant or
agreement of either of them contained in the Merger Agreement or the material
breach by Parent or Purchaser of any material representation or warranty of
either of them contained in the Merger Agreement, or (ii) prior to the
purchase of Shares pursuant to the Offer, the Board shall have withdrawn or
modified in a manner adverse to Purchaser or Parent its approval or
recommendation of the Offer, the Merger Agreement, the Merger or any other
transaction contemplated by the Merger Agreement or shall have approved or
recommended approval of any Third Party Transaction, or shall have resolved
to do any of the foregoing; or (d) by the Company, upon approval of the
Board, if (i) Purchaser shall have (A) failed to commence the Offer within 10
days following the date of the Merger Agreement, (B) terminated the Offer
without having accepted any Shares for payment thereunder or (C) failed to
pay for Shares pursuant to the Offer within 90 days following the
commencement of the Offer, unless any such failure shall have been caused by
or resulted from the failure of the Company to satisfy the conditions set
forth in paragraph (f) or (g) of Section 14 hereof, or (ii) prior to the
purchase of Shares pursuant to the Offer, the Board shall have withdrawn or
modified in a manner adverse to Purchaser or Parent its approval or
recommendation of the Offer, the Merger Agreement, the Merger or any other
transaction contemplated by the Merger Agreement in order to approve any
Third Party Transaction which the Board determines in the exercise of its
good faith judgment and after consultation with independent legal counsel and
the Company's financial advisors to be more favorable to the Company's
stockholders than the Offer and the Merger taken together; provided, however,
that such termination under this cause (ii) shall not be effective until the
Company has made payment to Purchaser of the Fee (as hereinafter defined) and
has deposited with a mutually acceptable escrow agent $500,000 for
reimbursement to Parent and Purchaser of Expenses (as hereinafter defined).
22
<PAGE>
In the event of the termination of the Merger Agreement, the Merger
Agreement provides that it shall forthwith become void and there shall be no
liability thereunder on the part of any party thereto except under the
provisions of the Merger Agreement related to fees and expenses described
below and under certain other provisions of the Merger Agreement which
survive termination.
The Merger Agreement provides that in the event that the Merger Agreement
is terminated pursuant to the provisions described in clause (c)(ii) or
clause (d)(ii) of the second preceding paragraph, then the Company shall pay
Parent promptly (but in no event later than one business day after the first
of such events shall have occurred) a fee of $2,500,000 (the "Fee"), which
amount shall be payable in immediately available funds, plus all Expenses (as
defined below).
Under the Merger Agreement, the term "Expenses" means all out-of-pocket
expenses and fees up to $500,000 in the aggregate (including, without
limitation, fees and expenses payable to all investment banking firms, other
financial institutions, counsel, accountants, experts and consultants to
Parent and Purchaser, and all printing and advertising expenses) actually
incurred or accrued by Parent or Purchaser or on their behalf in connection
with the transactions contemplated by the Merger Agreement, and actually
incurred or accrued by banks, investment banking firms, other financial
institutions and other persons and assumed by Parent and Purchaser in
connection with the negotiation, preparation, execution and performance of
the Merger Agreement, the structuring of the transactions contemplated by the
Merger Agreement and any agreements relating thereto.
Except as set forth in the preceding four paragraphs, all costs and
expenses incurred in connection with the Merger Agreement, the Stockholders
Agreement, the Supplemental Stockholders Agreement and the transactions
contemplated by the Merger Agreement shall be paid by the party incurring
such expenses, whether or not any such transaction is consummated.
THE STOCKHOLDERS AGREEMENT
Purchaser and the Stockholders have entered into the Stockholders
Agreement, pursuant to which, upon the terms set forth therein, each
Stockholder has agreed to tender and sell, in accordance with the terms of
the Offer, all Shares owned by such Stockholder. Further, each Stockholder
has agreed not to withdraw his Shares unless (a) the Board shall have
withdrawn or modified in any manner adverse to Purchaser or Parent its
approval or recommendation of the Offer, the Merger, the Merger Agreement or
any other transaction contemplated by the Merger Agreement in order to
approve any Third Party Transaction which the Board determines in the
exercise of its good faith judgment and after consultation with independent
legal counsel and the Company's financial advisors to be more favorable to
the Company's stockholders than the Offer and the Merger taken together, (b)
the Merger Agreement is terminated, (c) the Merger Agreement is amended in
any way which adversely affects such Stockholder, or (d) such Stockholder's
Shares have not been accepted for payment and paid for by June 13, 1995. As
of March 15, 1995, the Stockholders owned (either beneficially or of record)
Shares constituting approximately 66.5% of the outstanding Shares (54.2% on a
fully diluted basis).
The Stockholders Agreement provides that each Stockholder 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
such Stockholder's voting rights, charge or other encumbrance of any nature
whatsoever with respect to the Stockholder's Shares owned as of the date of
the Stockholders Agreement or that may thereafter be acquired by such
Stockholder at any time prior to the termination of the Stockholders
Agreement as to such Stockholder.
The Stockholders Agreement provides that subject to the fiduciary duties
as a director of the Company of any representative or agent of any
Stockholder who is such a director as contemplated in the Merger Agreement,
each Stockholder shall not, directly or indirectly, through any agent or
representative or otherwise, solicit, initiate or encourage the submission of
any proposal or offer from any person relating to, participate in any
negotiations regarding, or furnish to any other person any information with
respect to, or otherwise cooperate in any way with, or assist or participate
in or facilitate or encourage, any Third Party Transaction at any time prior
to the termination of the Stockholders Agreement as to such Stockholder.
The Stockholders Agreement provides that, from and after the date of the
Stockholders Agreement, Parent and Purchaser (the "Indemnifying Parties")
jointly and severally shall indemnify and hold harmless each of the
23
<PAGE>
Stockholders (collectively the "Indemnified Parties" and individually an
"Indemnified Party") against any loss, damage or expense (including
reasonable attorney's fees and disbursements) actually incurred by any such
Indemnified Party to the extent arising from any Company stockholder or third
party claim, suit or demand in connection with the Stockholders Agreement or
the transactions contemplated by the Merger Agreement (a "Third Party
Claim"). For purposes of the Stockholders Agreement, a Third Party Claim
shall expressly exclude any claim, suit or demand brought or instituted by
any partner, investor, stockholder or affiliate of any Indemnified Party. The
Stockholders Agreement provides that the Indemnified Parties shall give the
Indemnifying Parties prompt written notice of any Third Party Claim which
they believe will give rise to indemnification; provided, however, that the
failure to give such notice, shall not affect the liability of the
Indemnifying Parties thereunder unless and to the extent the failure to give
such notice adversely affects the ability of the Indemnifying Parties to
defend themselves or to mitigate the damages sought in such Third Party
Claim. The Stockholders Agreement provides that the Indemnifying Parties
shall have the right to defend and to direct the defense against any such
Third Party Claim in its name or in the name of any Indemnified Party at the
Indemnifying Parties' expense and with counsel selected by agreement of the
Indemnified Parties, and reasonably acceptable to Parent, which shall be the
only counsel for the Indemnified Parties, and only the Indemnifying Parties
will have the right to settle or compromise any such Third Party Claim;
provided, however, that (i) the Indemnifying Parties shall only be
responsible for the first $50,000 in fees and disbursements of such counsel
in defending the Indemnified Parties in any such Third Party Claim and the
Indemnified Parties shall be responsible for such legal fees and
disbursements in excess of $50,000, and (ii) the Indemnifying Parties will
not, without the Indemnified Parties' written consent, settle or compromise
any claim or consent to any entry of judgment which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
Indemnified Parties a release from all liability in respect of such Third
Party Claim. The Stockholders Agreement provides that the Indemnified Parties
shall cooperate in the defense of any such Third Party Claim and that, if the
Indemnifying Parties, within a reasonable time after notice of a Third Party
Claim, fail to defend the Indemnified Parties, the Indemnified Parties shall
be entitled to undertake the defense, compromise or settlement of such Third
Party Claim at the expense of (subject to the limitations set forth above)
and for the account and risk of the Indemnifying Parties subject to the
rights of the Indemnifying Parties to assume the defense of such Third Party
Claim at any time prior to the settlement, compromise or final determination
thereof. The Stockholders Agreement provides that, notwithstanding the
foregoing provisions, any Indemnified Party may engage counsel of its own
choice; provided, however, that all of the fees and disbursements of such
counsel shall be the sole responsibility of such Indemnified Party.
THE SUPPLEMENTAL STOCKHOLDERS AGREEMENT
The Stockholders other than Investors Trading AB, which owned (either
beneficially or of record) approximately 46.6% of the outstanding Shares
(38.0% on a fully diluted basis) as of March 15, 1995, also entered into a
Supplemental Stockholders Agreement, dated as of March 15, 1995, with
Purchaser in which such Stockholders have agreed that if the Offer is
terminated because of the failure of any condition thereof and the Company
effects a Third Party Transaction within 180 days thereafter, then each such
Stockholder will pay to Purchaser 50% of the excess, if any, of the amount
per Share received by the Stockholder as a result of such transaction over
$2.30 per Share.
11. Purpose of the Offer; Plans for the Company after the Offer and the
Merger.
Purpose of the Offer. The purpose of the Offer and the Merger is for
Parent to acquire control of, and the entire equity interest in, the Company.
The purpose of the Merger is for Parent to acquire all Shares not purchased
pursuant to the Offer. Upon consummation of the Merger, the Company will
become an indirect wholly owned subsidiary of Parent. The Offer is being made
pursuant to the Merger Agreement.
In the Merger Agreement, the Company has agreed to take all action
necessary to convene a meeting of its stockholders as soon as practicable
after the consummation of the Offer for the purpose of considering and taking
action on the Merger Agreement and the transactions contemplated thereby.
Parent and Purchaser have agreed that all Shares owned by them and their
subsidiaries will be voted in favor of the Merger Agreement and the
transactions contemplated thereby.
24
<PAGE>
If Purchaser purchases Shares pursuant to the Offer, the Merger Agreement
provides that Purchaser will be entitled to designate representatives to
constitute a majority of the directors on the Board following such purchase.
See Section 10. Purchaser expects that such representation would permit
Purchaser to exercise control over the Company's conduct of its business and
operations.
Appraisal Rights. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders will have certain
rights under Delaware law to dissent and demand appraisal of, and to receive
payment in cash of the fair value of, their Shares. Such rights to dissent,
if the statutory procedures are complied with, could lead to a judicial
determination of the fair value of the Shares, as of the Effective Time
(excluding any element of value arising from the accomplishment or
expectation of the Merger), required to be paid in cash to such dissenting
holders for their Shares. In addition, such dissenting stockholders could be
entitled to receive payment of a fair rate of interest from the date of
consummation of the Merger on the amount determined to be the fair value of
their Shares. In determining the fair value of the Shares, the court is
required to take into account all relevant factors. Accordingly, such
determination could be based upon consideration other than, or in addition
to, the market value of the Shares, including, among other things, asset
values and earning capacity. In Weinberger v. UOP, Inc., the Delaware Supreme
Court stated, among other things, that "proof of value by any techniques or
methods which are generally considered acceptable in the financial community
and otherwise admissible in court" should be considered in an appraisal
proceeding. Therefore, the value so determined in any appraisal proceeding
could be the same, more or less than the purchase price per Share in the
Offer or the Merger Consideration.
In addition, several decisions by Delaware courts have held that, in
certain circumstances, a controlling stockholder of a company involved in a
merger has a fiduciary duty to other stockholders which requires that the
merger be fair to such other stockholders. In determining whether a merger is
fair to minority stockholders, Delaware courts have considered, among other
things, the type and amount of consideration to be received by the
stockholders and whether there was fair dealing among the parties. The
Delaware Supreme Court stated in Weinberger and Rabkin v. Philip A. Hunt
Chemical Corp. that the remedy ordinarily available to minority stockholders
in a cash-out merger is the right to appraisal described above. However, a
damages remedy or injunctive relief may be available if a merger is found to
be the product of unfairness, including fraud, misrepresentation or other
misconduct.
The Commission has adopted Rule 13e-3 under the Exchange Act, which is
applicable to certain "going private" transactions and which may under
certain circumstances be applicable to the Merger or another business
combination following the purchase of Shares pursuant to the Offer in which
Purchaser seeks to acquire the remaining Shares not held by it. Purchaser
believes, however, that if the Merger is consummated within one year of the
purchase of Shares pursuant to the Offer, Rule 13e-3 will not be applicable
to the Merger. Rule 13e-3 requires, among other things, that certain
financial information concerning the Company and certain information relating
to the fairness of the proposed transaction and the consideration offered to
minority stockholders in such transaction be filed with the Commission and
disclosed to stockholders prior to consummation of the transaction.
Plans for the Company. It is currently expected that, following
consummation of the Offer, the business and operations of the Company's
Subsidiaries, Crosby and Harris, will be continued substantially as they are
currently being conducted. Parent will continue to evaluate the business and
operations of Crosby and Harris and, following the consummation of the Offer,
will take such actions as it deems appropriate under the circumstances then
existing. Parent intends to seek additional information about the Company's
Subsidiaries during the Offer period. Thereafter, Parent intends to review
such information as part of a comprehensive review of their business
operations, capitalization and management with a view to maximizing their
potential in conjunction with Parent's businesses. It is expected that the
business and operations of Crosby and Harris would form an important part of
Parent's future business plans.
Except as indicated in this Offer to Purchase, until the consummation of
the Merger, Parent does not have any present plans or proposals which relate
to or would result in an extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving the Company or any
Subsidiary or any material change in the Company's capitalization or dividend
policy or any other material changes in the Company's corporate structure or
business, or the composition of the Board or the Company's management.
25
<PAGE>
12. Dividends and Distributions.
The Merger Agreement provides that the Company shall not, between the date
of the Merger Agreement and the appointment of Purchaser's designees to the
Board, without the prior written consent of Parent, (a) issue, sell, pledge,
dispose of, grant, encumber, or authorize the issuance, sale, pledge,
disposition, grant or encumbrance of any shares of capital stock of any class
of the Company or any Subsidiary or any options, warrants, convertible
securities or other rights of any kind to acquire any shares of such capital
stock, or any other ownership interest (including, without limitation, any
phantom interest), of the Company or any Subsidiary (except for the issuance
of Shares issuable pursuant to Options outstanding on the date of the Merger
Agreement or upon conversion of Preferred Shares or upon consummation of the
Class Action Settlement); (b) declare, set aside, make or pay any dividend or
other distribution, payable in cash, stock, property or otherwise with
respect to any of its capital stock (except for required dividends on the
Preferred Shares and except for such declarations, set- asides, dividends and
other distributions made from any Subsidiary to the Company or (c)
reclassify, combine, split, subdivide or redeem, purchase or otherwise
acquire, directly or indirectly or indirectly, any of its capital stock. See
Section 10.
13. Effect of the Offer on the Market for the Shares, Exchange Listing and
Exchange Act Registration.
The purchase of Shares by Purchaser pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly and will reduce the
number of holders of Shares, which could adversely affect the liquidity and
market value of the remaining Shares held by the public.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the requirements of the NYSE for continued listing
and may be delisted from the NYSE and deregistered under Section 12(b) of the
Exchange Act. Parent intends to cause the delisting by the NYSE and
deregistration of the Shares following consummation of the Offer.
According to the NYSE's published guidelines, the NYSE would consider
delisting the Shares if, among other things, the number of record holders of
at least 100 shares should fall below 1,200, the number of publicly held
Shares (exclusive of holdings of officers, directors and their families and
other concentrated holdings of 10 percent or more ("NYSE Excluded Holdings")
should fall below 600,000 or the aggregate market value of publicly held
Shares (exclusive of NYSE Excluded Holdings) should fall below $5,000,000.
The Company has advised Purchaser that, as of March 15, 1995, there were
24,665,160 Shares outstanding, held by approximately 2,200 holders of record.
If, as a result of the purchase of Shares pursuant to the Offer or otherwise,
the Shares no longer meet the requirements of the NYSE for continued listing
and the listing of the Shares is discontinued, the market for the Shares
could be adversely affected.
If the NYSE were to delist the Shares, it is possible that the Shares
would continue to trade on another securities exchange or in the
over-the-counter market and that price quotations would be reported by such
exchange or through the NASDAQ Stock Market ("NASDAQ") or other sources. The
extent of the public market therefor and the availability of such quotations
would depend, however, upon such factors as the number of stockholders and/or
the aggregate market value of such securities remaining at such time, the
interest in maintaining a market in the Shares on the part of securities
firms, the possible termination of registration under the Exchange Act as
described below, and other factors. Purchaser cannot predict whether the
reduction in the number of Shares that might otherwise trade publicly would
have an adverse or beneficial effect on the market price for or marketability
of the Shares or whether it would cause future market prices to be greater or
less than the Merger Consideration.
The Shares are currently "margin securities," as such term is defined
under the rules of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of
allowing banks to extend credit on the collateral of such securities.
Depending upon factors similar to those described above regarding listing and
market quotations, following the Offer it is possible that the Shares might
no longer constitute "margin securities" for purposes of the margin
regulations of the Federal Reserve Board, in which event such Shares could no
longer be used as collateral for loans made by banks.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application by the Company to the
Commission if the Shares are not listed on a national securities exchange and
26
<PAGE>
there are fewer than 300 record holders. The termination of the registration
of the Shares under the Exchange Act would substantially reduce the
information required to be furnished by the Company to holders of Shares and
to the Commission and would make certain provisions of the Exchange Act, such
as the short-swing profit recovery provisions of Section 16(b), the
requirement of furnishing a proxy statement in connection with stockholders'
meetings and the requirements of Rule 13e-3 under the Exchange Act with
respect to "going private" transactions, no longer applicable to the Shares.
In addition, "affiliates" of the Company and persons holding "restricted
securities" of the Company may be deprived of the ability to dispose of such
securities pursuant to Rule 144 promulgated under the Securities Act of 1933,
as amended. If registration of the Shares under the Exchange Act were
terminated, the Shares would no longer be "margin securities" or be eligible
for NASDAQ reporting. Purchaser currently intends to seek to cause the
Company to terminate the registration of the Shares under the Exchange Act as
soon after consummation of the Offer as the requirements for termination of
registration are met.
14. Certain Conditions of the Offer.
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment or pay for any Shares tendered pursuant to the
Offer, and may terminate or amend the Offer and may postpone the acceptance
for payment of and payment for Shares tendered, if (i) the Minimum Condition
shall not have been satisfied, (ii) any applicable waiting period under the
HSR Act shall not have expired or been terminated prior to the expiration of
the Offer and the Offer shall have remained outstanding for at least 30 days
from the commencement of the Offer, (iii) (x) the review period under the
Exon-Florio Act during which the President of the United States or his
designee may commence an investigation of the Offer, the Merger or the other
transactions contemplated by the Merger Agreement shall not have expired or
otherwise been terminated without such investigation having been commenced or
(y) such investigation shall have been commenced and (I) the period under the
Exon-Florio Act during which such investigation must be completed shall not
have expired or otherwise been terminated or Purchaser shall not have
received notice that such investigation has been completed and (II) (A) the
period under the Exon-Florio Act during which the President may announce his
decision to take action to suspend, prohibit or place any limitations on the
Offer, the Merger or the other transactions contemplated by the Merger
Agreement shall not have expired or otherwise been terminated without any
such action being threatened, announced or taken or (B) the President shall
not have announced a decision to take any such action, in each case, prior to
the expiration to the Offer and the Offer shall have remained outstanding for
at least 30 days from the commencement of the Offer, or (iv) at any time on
or after the date of the Merger Agreement, and prior to the acceptance for
payment of Shares, any of the following conditions shall exist:
(a) there shall have been instituted or be pending any action or
proceeding brought by any governmental, administrative or regulatory
authority or agency, domestic or foreign, before any court or
governmental, administrative or regulatory authority or agency, domestic
or foreign, (i) challenging or seeking to make illegal or to restrain or
prohibit or make materially more costly the making of the Offer, the
acceptance for payment of, or payment for, any Shares by Parent, Purchaser
or any other affiliate of Parent pursuant to the Offer, or the
consummation of any other transaction contemplated by the Merger
Agreement, or seeking to obtain material damages in connection with any
transaction contemplated by the Merger Agreement; (ii) seeking to prohibit
or limit materially the ownership or operation by the Company, Parent or
any of their subsidiaries of all or any material portion of the business
or assets of the Company, Parent or any of their subsidiaries, or to
compel the Company, Parent or any of their subsidiaries to dispose of or
hold separate all or any material portion of the business or assets of the
Company, Parent or any of their subsidiaries, in each case as a result of
the transactions contemplated by the Merger Agreement; (iii) seeking to
impose material limitations on the ability of Parent, Purchaser or any
other affiliate of Parent to exercise effectively full rights of ownership
of any Shares, including, without limitation, the right to vote any Shares
acquired by Purchaser pursuant to the Offer or otherwise on all matters
properly presented to the Company's stockholders, including, without
limitation, the approval and adoption of the Merger Agreement and the
Merger; or (iv) seeking to require divestiture by Parent, Purchaser or any
other affiliate of Parent of any Shares;
(b) there shall have been issued any injunction, order or decree by any
court or governmental, administrative or regulatory authority or agency,
domestic or foreign, resulting from any action or proceeding brought by
any person other than a governmental, administrative or regulatory
27
<PAGE>
authority or agency, domes tic or foreign, which (i) restrains or prohibits
the making of the Offer or the consummation of any other transaction
contemplated by the Merger Agreement, (ii) prohibits or limits materially the
ownership or operation by the Company, Parent or Purchaser of all or any
material portion of the business or assets of the Company, Parent or any of
their subsidiaries, or compels the Company, Parent or any of their
subsidiaries to dispose of or hold separate all or any material portion of
the business or assets of the Company, Parent or any of their subsidiaries,
in each case as a result of the transactions contemplated by the Merger
Agreement; (iii) imposes material limitations on the ability of Parent or
Purchaser to exercise effectively full rights of ownership of any Shares,
including, without limitation, the right to vote any Shares acquired by
Purchaser pursuant to the Offer or otherwise on all matters properly
presented to the Company's stockholders, including, without limitation, the
approval and adoption of the Merger Agreement and the Merger; or (iv)
requires divestiture by Parent or Purchaser of any Shares;
(c) there shall have been any action taken, or any statute, rule,
regulation , order or injunction enacted, entered, enforced, promulgated,
amended, issued or deemed applicable to (i) Parent, the Company or any
subsidiary or affiliate of Parent or the Company or (ii) any transaction
contemplated by the Merger Agreement, by any legislative body, court,
government or governmental, administrative or regulatory authority or
agency, domestic or foreign, in the case of both (i) and (ii) other than
the routine application of the waiting- period provisions of the HSR Act
to the Offer, the Stockholders Agreement or the Merger, in each case which
results in any of the consequences referred to in clauses (i) through (iv)
of paragraph (b) above;
(d) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on The New York Stock
Exchange or on the London Stock Exchange, (ii) any decline, measured from
the date of the Merger Agreement, in the Standard & Poor's 500 Index or
FTSE 100 Index by an amount in excess of 20 percent from the date of the
Merger Agreement, (iii) a currency moratorium on the exchange markets in
London or New York City, (iv) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States or the
United Kingdom, (v) any limitation (whether or not mandatory) by any
government or governmental, administrative or regulatory authority or
agency, domestic or foreign, on the extension of credit by banks or other
lending institutions in the United States or the United Kingdom, (vi) a
commencement of a war or armed hostilities or other national or
international calamity involving the United States or the United Kingdom or
(vii) in the case of any of the foregoing existing on the date of the Merger
Agreement, a material acceleration or worsening thereof;
(e) (i) it shall have been publicly disclosed or Purchaser shall have
otherwise learned that beneficial ownership (determined for the purposes
of this paragraph as set forth in Rule 13d-3 promulgated under the
Exchange Act) of 15 percent or more of the then outstanding Shares has
been acquired by any person, other than Parent or any of its affiliates or
(ii) (A) the Board shall have withdrawn or modified in a manner adverse to
Parent or Purchaser the approval or recommendation of the Offer, the
Merger or the Merger Agreement or approved or recommended any takeover
proposal or any other acquisition of Shares other than the Offer and the
Merger or (B) the Board shall have resolved to do any of the foregoing;
(f) any material representation and warranty of the Company in the
Merger Agreement shall prove to be untrue or incorrect in any material
respect as of the date of the Merger Agreement;
(g) the Company shall have failed to perform in any material respect
any material obligation or to comply in any material respect with any
material agreement or covenant of the Company to be performed or complied
with by it under the Merger Agreement;
(h) the Merger Agreement shall have been terminated in accordance with
its terms; or
(i) Purchaser and the Company shall have agreed that Purchaser shall
terminate the Offer or postpone the acceptance for payment of or payment
for Shares thereunder;
which in the judgment of Parent makes it inadvisable to proceed with the
Offer or with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Purchaser and Parent
and may be asserted by Purchaser or Parent regardless of the circumstances
giving rise to any such condition or may be waived by Purchaser or Parent in
whole or in part at any time and from time to time in their sole discretion.
28
<PAGE>
The failure by Parent or Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right; the waiver of any such
right with respect to particular facts and other circumstances shall not be
deemed a waiver with respect to any other facts and circumstances; and each such
right shall be deemed an ongoing right that may be asserted at any time and from
time to time.
15. Certain Legal Matters and Regulatory Approvals.
General. Based upon its examination of publicly available information with
respect to the Company and the review of certain information furnished by the
Company to Parent and discussions of representatives of Parent with
representatives of the Company during Parent's investigation of the Company
(see Section 10), neither Purchaser nor Parent is aware of any license or
other regulatory permit that appears to be material to the business of the
Company and the Subsidiaries, taken as a whole, which might be adversely
affected by the acquisition of Shares by Purchaser pursuant to the Offer or,
except as set forth below, of any approval or other action by any domestic
(federal or state) or foreign governmental, administrative or regulatory
authority or agency which would be required prior to the acquisition of
Shares by Purchaser pursuant to the Offer. Should any such approval or other
action be required, it is Purchaser's present intention to seek such approval
or action. Purchaser does not currently intend, however, to delay the
purchase of Shares tendered pursuant to the Offer pending the outcome of any
such action or the receipt of any such approval (subject to Purchaser's right
to decline to purchase Shares if any of the conditions in Section 14 shall
have occurred). There can be no assurance that any such approval or other
action, if needed, would be obtained without substantial conditions or that
adverse consequences might not result to the business of the Company,
Purchaser or Parent or that certain parts of the businesses of the Company,
Purchaser or Parent might not have to be disposed of or held separate or
other substantial conditions complied with in order to obtain such approval
or other action or in the event that such approval was not obtained or such
other action was not taken. Purchaser's obligation under the Offer to accept
for payment and pay for Shares is subject to certain conditions, including
conditions relating to the legal matters discussed in this Section 15. See
Section 14.
State Takeover Laws. Under Delaware Law and the Company's Certificate of
Incorporation, the adoption of the Merger Agreement by the Company requires
the approval of the Board and the affirmative vote of the holders of a
majority of the outstanding Shares. Accordingly, if the Minimum Condition is
satisfied, Purchaser will have sufficient voting power to cause the approval
and adoption of the Merger Agreement and the transactions contemplated
thereby without the affirmative vote of any other stockholder.
Section 203 of the Delaware Law provides generally (with exceptions not
applicable in this case) that any person who engages in a transaction which
results in such person being the owner of 15% or more but less than 85% of
the voting stock of a public corporation incorporated in Delaware is
prohibited for three years thereafter from engaging in a "business
combination" with the corporation (such as a merger or a tender offer),
unless (i) prior to the transaction the board of directors of the corporation
approves either the transaction or the ensuing business combination or (ii)
at the time of or after the transaction the business combination is approved
by the board of directors and by the vote of at least two-thirds of the
corporation's voting stock which is not owned by such person. The Board has,
in this case, unanimously approved the Merger Agreement, the Stockholders
Agreement and the transactions contemplated thereby for all purposes,
including the purpose of Section 203.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or
have substantial assets, stockholders, principal executive offices or
principal places of business, or whose business operations otherwise have
substantial economic effects, in such states. In Edgar v. MITE Corp., the
Supreme Court of the United States invalidated on constitutional grounds the
Illinois Business Takeover Statute, which, as a matter of state securities
law, made takeovers of corporations meeting certain requirements more
difficult. However, in 1987 in CTS Corp. v. Dynamics Corp. of America, the
Supreme Court held that the State of Indiana could, as a matter of corporate
law and, in particular, with respect to those aspects of corporate law
concerning corporate governance, constitutionally disqualify a potential
acquiror from voting on the affairs of a target corporation without the prior
approval of the remaining stockholders. The state law before the Supreme
Court was by its terms applicable only to corporations that had a substantial
number of stockholders in the state and were incorporated there.
Subsequently, in TLX Acquisition Corp. v. Telex Corp., a federal district
court in Oklahoma ruled that certain Oklahoma corporate governance statutes
were unconstitutional insofar as they applied to corporations incorporated
29
<PAGE>
outside Oklahoma because they could 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.
The Company, directly or through Subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws such as those described above. Purchaser does not know whether
any of these laws will, by their terms, apply to the Offer or the Merger and
has not necessarily complied with any such laws. Should any person seek to
apply any state takeover law, Purchaser will take such action as then appears
desirable, which may include challenging the validity or applicability of any
such statute in appropriate court proceedings. In the event it is asserted
that one or more state takeover laws is applicable to the Offer or the
Merger, and an appropriate court does not determine that it is inapplicable
or invalid as applied to the Offer, Purchaser might be required to file
certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, Purchaser might be unable to accept
for payment any Shares tendered pursuant to the Offer, or be delayed in
continuing or consummating the Offer and the Merger. In such case, Purchaser
may not be obligated to accept for payment any Shares tendered. See Section
14.
Antitrust. Under the HSR Act and the rules that have been promulgated
thereunder by the FTC, certain acquisition transactions may not be
consummated unless certain information has been furnished to the Antitrust
Division and the FTC and certain waiting-period requirements have been
satisfied. The acquisition of Shares by Purchaser pursuant to the Offer is
subject to such requirements. See Section 2.
Pursuant to the HSR Act, on the date of the Offer to Purchase, Parent
anticipates filing a Pre-Merger Notification and Report Form in connection
with the purchase of Shares pursuant to the Offer with the Antitrust Division
and the FTC. Under the provisions of the HSR Act applicable to the Offer, the
purchase of Shares pursuant to the Offer may not be consummated until the
expiration of a 15-calendar-day waiting period following the filing by
Parent. Accordingly, it is anticipated that the waiting period under the HSR
Act applicable to the purchase of Shares pursuant to the Offer will expire at
11:59 p.m. New York City time, on April 5, 1995, unless such waiting period
is earlier terminated by the FTC and the Antitrust Division or extended by a
request from the FTC or the Antitrust Division for additional information or
documentary material prior to the expiration of the waiting period. Pursuant
to the HSR Act, Parent will request early termination of the waiting period
applicable to the Offer. There can be no assurance, however, that the HSR Act
15-day waiting period will be terminated early. If either the FTC or the
Antitrust Division were to request additional information or documentary
material from Parent with respect to the Offer, the waiting period with
respect to the Offer would expire at 11:59 p.m., New York City time, on the
tenth calendar day after the date of substantial compliance by Parent with
such request. Thereafter, the waiting period could be extended only by court
order. If the acquisition of Shares is delayed pursuant to a request by the
FTC or the Antitrust Division for additional information or documentary
material pursuant to the HSR Act, the Offer may, but need not, be extended
and, in any event, the purchase of and payment for Shares will be deferred
until 10 days after the request is substantially complied with, unless the
extended period expires on or before the date when the initial 15-day period
would otherwise have expired, or unless the waiting period is sooner
terminated by the FTC and the Antitrust Division. Only one extension of such
waiting period pursuant to a request for additional information is authorized
by the HSR Act and the rules promulgated thereunder, except by court order.
Any such extension of the waiting period will not give rise to any withdrawal
rights not otherwise provided for by applicable law. See Section 4. It is a
condition to the Offer that the waiting period applicable under the HSR Act
to the Offer expire or be terminated. See Section 2 and Section 14.
The FTC and the Antitrust Division frequently scrutinize the legality
under the antitrust laws of transactions such as the proposed acquisition of
Shares by Purchaser pursuant to the Offer. At any time before or after the
purchase of Shares pursuant to the Offer by Purchaser, the FTC or the
Antitrust Division could take such action under the antitrust laws as its
deems necessary or desirable in the public interest, including seeking to
enjoin the purchase of Shares pursuant to the Offer or seeking the
divestiture of Shares purchased by Purchaser or the divestiture of
substantial assets of Parent, the Company or their respective Subsidiaries.
30
<PAGE>
Private parties and state attorneys general may also bring legal action under
federal or state antitrust laws under certain circumstances. Based upon an
examination of information available to Parent relating to the businesses in
which Parent, the Company and their respective subsidiaries are engaged, Parent
and Purchaser believe that the Offer will not violate the antitrust laws.
Nevertheless, there can be no assurance that a challenge to the Offer on
antitrust grounds will not be made or, if such a challenge is made, what the
results would be. See Section 14 for certain conditions to the Offer, including
conditions with respect to litigation.
Exon-Florio Act. Under the Exon-Florio Act, the President of the United
States is authorized to prohibit or suspend acquisitions, mergers or
takeovers by foreign persons of persons engaged in interstate commerce in the
United States if the President determines, after investigation, that such
foreign persons in exercising control of such acquired persons might take
action that threatens to impair the national security of the United States
and that other provisions of existing law do not provide adequate authority
to protect national security. Pursuant to the Exon-Florio Act, notice of an
acquisition by a foreign person may be made to CFIUS ("Committee on Foreign
Investment in the United States") either voluntarily by the parties to such
proposed acquisition, merger or takeover or by any member of CFIUS. CFIUS is
comprised of representatives of the Departments of the Treasury, State,
Commerce, Defense and Justice, the Office of Management and Budget, the
Office of Science and Technology Policy, the United States Trade
Representative's Office and the Council of Economic Advisors, as well as the
Assistant to the President for National Security Affairs and the Assistant to
the President for Economic Policy. A determination that an investigation is
called for must be made within thirty days after notification of a proposed
acquisition, merger or takeover is first filed with CFIUS. Any such
investigation must be completed within forty-five days of such determination.
Any decision by the President to take action must be announced within fifteen
days of the completion of the investigation.
Although the Exon-Florio Act does not require the filing of a
notification, nor does it prohibit the consummation of an acquisition, merger
or takeover if the notification is not made, such an acquisition, merger or
takeover thereafter remains indefinitely subject to divestment should the
President subsequently determine that the national security of the United
States has been threatened or impaired. The Company currently has contracts
from the U.S. Department of Defense and accordingly, Purchaser and the
Company anticipate filing with CFIUS a joint notice of the transactions
contemplated by the Merger Agreement on the date of this Offer to Purchase.
Although Purchaser believes that the transactions contemplated by the Merger
Agreement should not raise any national security concerns, there can be no
assurance that CFIUS will not determine to conduct an investigation of the
proposed transactions and, if an investigation is commenced, there can be no
assurance regarding the outcome of such investigation. See Section 14 for
certain conditions to the Offer.
16. Fees and Expenses.
Except as set forth below, Purchaser will not pay any fees or commissions
to any broker, dealer or other person for soliciting tenders of Shares
pursuant to the Offer.
Purchaser and Parent have retained Georgeson & Company Inc. as the
Information Agent, and First Fidelity Bank, N.A. as the Depositary, in
connection with the Offer. The Information Agent may contact holders of
Shares by mail, telephone, telex, telecopy, telegraph and personal interview
and may request banks, brokers, dealers and other nominee stockholders to
forward materials relating to the Offer to beneficial owners.
As compensation for acting as Information Agent in connection with the
Offer, Georgeson & Company Inc. will be paid a fee of $10,000 and also will
be reimbursed for certain out-of-pocket expenses and may be indemnified
against certain liabilities and expenses in connection with the Offer,
including certain liabilities under the federal securities laws. Purchaser
will pay the Depositary reasonable and customary compensation for its
services in connection with the Offer, plus reimbursement for out-of-pocket
expenses, and will indemnify the Depositary against certain liabilities and
expenses in connection therewith, including under federal securities laws.
Brokers, dealers, commercial banks and trust companies will be reimbursed by
Purchaser for customary handling and mailing expenses incurred by them in
forwarding material to their customers.
17. Miscellaneous.
The Offer is being made solely by this Offer to Purchase and the related
Letter of Transmittal and is being made to all holders of Shares. Purchaser
31
<PAGE>
is not aware of any jurisdiction where the making of the Offer is prohibited by
any administrative or judicial action pursuant to any valid state statute. If
Purchaser becomes aware of any valid state statute prohibiting the making of the
Offer or the acceptance of Shares pursuant thereto, Purchaser will make a
good-faith effort to comply with any such state statute. If, after such
good-faith effort, Purchaser cannot comply with any such state statute, the
Offer will not be made to (nor will tenders be accepted from or on behalf of)
the holders of Shares in such state.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER, PARENT OR THE COMPANY NOT CONTAINED IN
THIS OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
Pursuant to Rule 14d-3 of the General Rules and Regulations under the
Exchange Act, Parent and Purchaser have filed with the Commission the
Schedule 14D-1, together with exhibits, furnishing certain additional
information with respect to the Offer. The Schedule 14D-1 and any amendments
thereto, including exhibits, may be inspected at, and copies may be obtained
from, the same places and in the same manner as set forth in Section 7
(except that they will not be available at the regional offices of the
Commission).
ADU ACQUISITION INC.
March 22, 1995
32
<PAGE>
Facsimiles of the Letter of Transmittal will be accepted. The Letter of
Transmittal and certificates evidencing Shares and any other required
documents should be sent or delivered by each stockholder or his broker,
dealer, commercial bank, trust company or other nominee to the Depositary at
one of its addresses set forth below.
The Depositary for the Offer is:
First Fidelity Bank, N.A.
By Mail: By Facsimile: By Hand/Overnight Courier:
First Fidelity Bank, N.A. (201) 430-4797 First Fidelity Bank, N.A.
P.O. Box 1380 Corporate Trust/Special Operations
Newark, New Jersey 07101 To Confirm: 10 Bank Street - 3rd Floor
(201) 430-4762 Newark, New Jersey 07102
For Information Call:
(800) 458-0924
(Toll-Free)
Questions or requests for assistance may be directed to the Information
Agent at the address and telephone numbers listed below. Additional copies of
this Offer to Purchase, the Letter of Transmittal and the Notice of
Guaranteed Delivery may be obtained from the Information Agent. A stockholder
may also contact brokers, dealers, commercial banks or trust companies for
assistance concerning the Offer.
The Information Agent for the Offer is:
GEORGESON
& COMPANY
---------
Wall Street Plaza
New York, New York 10005
(212) 509-6240 (Collect)
Banks and Brokers Call Collect: (212) 440-9800
CALL TOLL-FREE: 1-800-223-2064
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND PURCHASER
1. Directors and Executive Officers of Parent. The following table sets
forth the name and current business address, citizenship and present
principal occupation or employment, and material occupations, positions,
offices or employments and business addresses thereof for the past five years
of each director and executive officer of Parent. Unless otherwise indicated,
the current business address of each person is c/o FKI plc, West House, King
Cross Road, Halifax, West Yorkshire HX1 1EB, England. Unless otherwise
indicated, all other addresses are within England. Unless otherwise
indicated, each such person is a citizen of the United Kingdom and has held
his or her present position as set forth below for the past five years.
Unless otherwise indicated, each occupation set forth opposite an
individual's name refers to employment with Parent.
<TABLE>
<CAPTION>
Present Principal Occupation or
Employment; Material Positions
Held During the Past Five Years
Name and Business Addresses Thereof
- ----------------------- -------------------------------------------------------------
<S> <C>
Jeffrey Whalley Executive Director and Chairman since April 1991; Deputy
Chairman of Babcock International Group PLC since May 1989,
The Lodge, Church Street, Badminton Court, Amersham,
Buckinghamshire HP7 0DD.
Robert G. Beeston Executive Director and Group Chief Executive since January
1992; Executive Director of BTR International, August 1991 to
December 1991; Managing Director of BTR Valve Group, February
1987 to July 1991, Silvertown House, Vincent Square, London
SW1.
Eric J. Bowers Executive Director and Finance Director since October 1989.
Robert S. Murray Non-executive Director since April 1991; Executive Director
and Chairman of Omega plc since May 1992, Foxbridge Way,
Normanton, Wakefield, West Yorkshire; Executive Director of
The Sovereign Capital Corporation since July 1990, Foxbridge
Way, Normanton, Wakefield, West Yorkshire; Executive Director
of Sterling Capitol plc since May 1992, Foxbridge Way,
Normanton, Wakefield, West Yorkshire.
John S. Rodewig* Non-executive Director since April 1993; Director of Eaton
Corporation, Eaton Center, Cleveland, Ohio 44114 since
January 1992; President & Chief Operating Officer-Vehicle
Components of Eaton Corporation since September 1993;
President and Chief Operating Officer of Eaton Corporation,
January 1992 to August 1993; President Elect and Chief
Operating Officer of Eaton Corporation, September 1991 to
December 1991; President of the Truck Components Group of
Eaton Corporation, January 1990 to August 1991.
Arthur S. Walsh Non-executive Director since May 1991; Deputy Chairman since
May 1993; Non-executive Director and Chairman of National
Transcommunications Limited since October 1991; Crawley
Court, Winchester, Hampshire SQ21 2QA; Non-executive Director and
Chairman of Telemetrix plc since December 1991, Knaves Beech
Estate, Loudwater, High Wycombe, Buckinghamshire HP10 9QZ.
Michael J.R. Porter Company Secretary since October 1989.
</TABLE>
- ------
* Citizen of the United States of America.
S-1
<PAGE>
2. Directors and Executive Officers of Purchaser. The following table sets
forth the name, current business address, citizenship, position with
Purchaser and present principal occupation or employment, and material
occupations, positions, offices or employments and business addresses thereof
for the past five years of each director and executive officer of Purchaser.
Unless otherwise indicated, the current business address of each person is
c/o FKI Industries Inc., 425 Post Road, Fairfield, Connecticut 06430-0970.
Each such person is a citizen of the United States of America unless
otherwise indicated, and, unless otherwise indicated, each occupation set
forth opposite an individual's name refers to employment with Parent.
<TABLE>
<CAPTION>
Present Principal Occupation or
Employment; Material Positions
Held During the Past Five Years
Name and Business Addresses Thereof
- ---------------------- --------------------------------------------------------------
<S> <C>
Robert Sook President and Director of Purchaser; President -- FKI Material
Handling Group since June 1992, 4601 Six Forks Road, Raleigh,
North Carolina 27609; President -- BTR Valve Group, January
1992 to May 1992, 4601 Six Forks Road, Raleigh, North Carolina
27609; President -- Edwards Valve Inc., November 1989 to
December 1991, 1800 South Saunders Street, Raleigh, North
Carolina 27603.
Steven D. Jones** Vice President and Director of Purchaser; Director of
Corporate Planning of Parent since April 1992, West House,
King Cross Road, Halifax, West Yorkshire HX1 1EB, England;
Managing Director of FKI Engineering Products Group, January
1990 to March 1992, West House, King Cross Road, Halifax, West
Yorkshire HX1 1EB, England.
Robert M. Miller Vice President, Secretary and Director of Purchaser; Vice
President, Legal and Secretary and Director of Industries since
January 1990, 425 Post Road, Fairfield, Connecticut 06430.
Neil Bamford** Director of Purchaser; Group Chief Accountant of Parent since
October 1989, West House, King Cross Road, Halifax, West
Yorkshire HX1 1EB, England.
Diana M. Dampsy*** Treasurer of Purchaser; Vice President -- Finance of
Industries since November 1994, 425 Post Road, Fairfield,
Connecticut 06430; Secretary and Treasurer of FKI Industries
Canada Limited, April 1989 to October 1994, 234 Attwell Drive,
Rexdale, Toronto, Ontario M9W 5B3, Canada.
</TABLE>
- ------
** Citizen of the United Kingdom.
*** Citizen of Canada.
S-2
<PAGE>
Exhibit (c)(1)
AGREEMENT AND PLAN OF MERGER
Among
FKI PLC,
ADU ACQUISITION INC.
and
AMDURA CORPORATION
Dated as of March 15, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
ARTICLE I
THE OFFER
<S> <C> <C>
SECTION 1.01. The Offer................................................................................2
SECTION 1.02. Company Action...........................................................................3
ARTICLE II
THE MERGER
SECTION 2.01. The Merger...............................................................................5
SECTION 2.02. Effective Time; Closing..................................................................5
SECTION 2.03. Effect of the Merger.....................................................................5
SECTION 2.04. Certificate of Incorporation; By-laws....................................................5
SECTION 2.05. Directors and Officers...................................................................6
SECTION 2.06. Conversion of Securities.................................................................6
SECTION 2.07. Employee Stock Options...................................................................6
SECTION 2.08. Dissenting Shares........................................................................7
SECTION 2.09. Surrender of Shares and Preferred Shares; Stock Transfer Books...........................7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01. Organization and Qualification; Subsidiaries.............................................9
SECTION 3.02. Certificate of Incorporation and By-laws.................................................9
SECTION 3.03. Capitalization..........................................................................10
SECTION 3.04. Authority Relative to this Agreement....................................................10
SECTION 3.05. No Conflict; Required Filings and Consents..............................................11
SECTION 3.06. Compliance..............................................................................11
SECTION 3.07. SEC Filings; Financial Statements.......................................................12
SECTION 3.08. Absence of Certain Changes or Events....................................................12
SECTION 3.09. Absence of Litigation...................................................................13
SECTION 3.10. Offer Documents; Schedule 14D-9.........................................................13
SECTION 3.11. Properties and Assets; Leases...........................................................13
SECTION 3.12. Environmental Matters...................................................................14
SECTION 3.13. Brokers.................................................................................14
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
<S> <C> <C>
SECTION 4.01. Corporate Organization..................................................................15
SECTION 4.02. Authority Relative to this Agreement....................................................15
SECTION 4.03. No Conflict; Required Filings and Consents; Absence of Litigation.......................15
SECTION 4.04. Offer Documents; Proxy Statement........................................................16
SECTION 4.05. Brokers.................................................................................16
SECTION 4.06. Financing...............................................................................17
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01. Conduct of Business by the Company Pending the Purchaser's
Election Date...........................................................................17
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Stockholders Meeting....................................................................19
SECTION 6.02. Proxy Statement.........................................................................19
SECTION 6.03. Company Board Representation; Section 14(f).............................................19
SECTION 6.04. Access to Information; Confidentiality..................................................20
SECTION 6.05. No Solicitation of Transactions.........................................................20
SECTION 6.06. Directors, and Officers, Indemnification and Insurance..................................21
SECTION 6.07. Notification of Certain Matters.........................................................22
SECTION 6.08. Further Action; Reasonable Best Efforts.................................................22
SECTION 6.09. Benefit Plans...........................................................................23
SECTION 6.10. Class Action Settlement.................................................................23
SECTION 6.11. Public Announcements....................................................................23
SECTION 6.12. Parent Guarantee........................................................................23
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. Conditions to the Merger................................................................23
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
<S> <C> <C>
SECTION 8.01. Termination.............................................................................24
SECTION 8.02. Effect of Termination...................................................................25
SECTION 8.03. Fees and Expenses.......................................................................25
SECTION 8.04. Amendment...............................................................................26
SECTION 8.05. Waiver..................................................................................26
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations, Warranties and Agreements..............................27
SECTION 9.02. Notices.................................................................................27
SECTION 9.03. Certain Definitions.....................................................................28
SECTION 9.04. Severability............................................................................29
SECTION 9.05. Entire Agreement; Assignment............................................................29
SECTION 9.06. Parties in Interest.....................................................................29
SECTION 9.07. Specific Performance....................................................................30
SECTION 9.08. Governing Law...........................................................................30
SECTION 9.09. Headings................................................................................30
SECTION 9.10. Counterparts............................................................................30
ANNEX A Conditions to the Offer
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
Glossary of Defined Terms
Location of
Defined Term Definition
------------- ------------
<S> <C>
affiliate...................................................... Sec. 9.03 (a)
Agreement...................................................... Preamble
beneficial owner............................................... Sec. 9.03 (b)
Blue Sky Laws.................................................. Sec. 3.05 (b)
Board.......................................................... Recitals
business day................................................... Sec. 9.03 (c)
Certificate of Merger.......................................... Sec. 2.02
Certificates................................................... Sec. 2.09 (b)
CFIUS.......................................................... Sec. 7.01 (c)
Class Action Settlement........................................ Sec. 6.10
Company........................................................ Preamble
Company Common Stock........................................... Recitals
Company Preferred Stock........................................ Sec. 2.06 (b)
Confidentiality Agreement...................................... Sec. 6.04 (c)
control........................................................ Sec. 9.03 (d)
controlled by.................................................. Sec. 9.03 (d)
Delaware Law................................................... Recitals
Disclosure Schedule............................................ Sec. 3.01
Dissenting Shares.............................................. Sec. 2.08 (a)
DLJ............................................................ Sec. 1.02 (a)
Effective Time................................................. Sec. 2.02
Environmental Laws............................................. Sec. 3.12 (a)
Exchange Act................................................... Sec. 1.01 (a)
Exon-Florio Act................................................ Sec. 3.05 (b)
Expenses....................................................... Sec. 8.03 (b)
Fee............................................................ Sec. 8.03 (a)
GAAP........................................................... Sec. 3.07 (b)
Hazardous Substances........................................... Sec. 3.12 (a)
HSR Act........................................................ Sec. 3.05 (b)
Liens.......................................................... Sec. 3.11
March 15 Meeting............................................... Sec. 1.02 (a)
Material Adverse Effect........................................ Sec. 3.01
Merger......................................................... Recitals
Merger Consideration........................................... Sec. 2.09 (b)
Minimum Condition.............................................. Sec. 1.01 (a)
1994 Balance Sheet............................................. Sec. 3.07 (c)
Offer.......................................................... Recitals
Offer Documents................................................ Sec. 1.01 (b)
Offer to Purchase.............................................. Sec. 1.01 (b)
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Option......................................................... Sec. 2.07
Parent......................................................... Preamble
Paying Agent................................................... Sec. 2.09 (a)
Per Share Amount............................................... Recitals
Permitted Liens................................................ Sec. 3.13
person......................................................... Sec. 9.03 (e)
Preferred Share................................................ Sec. 2.06 (b)
Preferred Per Share Amount..................................... Sec. 2.06 (b)
Proxy Statement................................................ Sec. 4.04
Purchaser...................................................... Preamble
Purchaser's Election Date...................................... Sec. 5.01
Schedule 14D-1................................................. Sec. 1.01 (b)
Schedule 14D-9................................................. Sec. 1.02 (b)
SEC............................................................ Sec. 1.01 (b)
SEC Reports.................................................... Sec. 3.07 (a)
Securities Act................................................. Sec. 3.07 (a)
Shares......................................................... Recitals
Stockholders................................................... Recitals
Stockholders Agreement......................................... Recitals
Stockholders Meeting........................................... Sec. 6.01
Stock Option Plan.............................................. Sec. 2.07
Subsidiary..................................................... Sec. 3.01
subsidiary..................................................... Sec. 9.03 (f)
Surviving Corporation.......................................... Sec. 2.01
Third Party.................................................... Sec. 8.03 (e)
Third Party Transaction........................................ Sec. 8.03 (e)
Transactions................................................... Sec. 1.02 (a)
under common control with...................................... Sec. 9.03 (d)
</TABLE>
v
<PAGE>
AGREEMENT AND PLAN OF MERGER, dated as of March 15,
1995 (this "Agreement"), among FKI plc, a company organized
under the laws of England ("Parent"), ADU Acquisition Inc., a
Delaware corporation and an indirect wholly-owned subsidiary
of Parent ("Purchaser"), and Amdura Corporation, a Delaware
corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of Parent, Purchaser
and the Company have each determined that it is in the best
interests of their respective stockholders for Parent, through
Purchaser, to acquire the Company upon the terms and subject
to the conditions set forth herein; and
WHEREAS, in furtherance of such acquisition, it is
proposed that Purchaser shall make a cash tender offer (the
"Offer") to acquire all the issued and outstanding shares of
Common Stock, par value $.01 per share, of the Company
("Company Common Stock", shares of Company Common Stock being
hereinafter collectively referred to as the "Shares") for
$2.30 per Share net to the seller in cash, without interest
thereon, (such amount, or any greater amount per Share paid
pursuant to the Offer, being hereinafter referred to as the
"Per Share Amount") upon the terms and subject to the
conditions of this Agreement and the Offer; and
WHEREAS, the Boards of Directors of Parent and
Purchaser have unanimously approved the making of the Offer
and the transactions related thereto; and
WHEREAS, the Board of Directors of the Company (the
"Board") has unanimously approved the making of the Offer and
resolved and agreed, subject to the terms and conditions
contained herein, to recommend that holders of Shares tender
their Shares pursuant to the Offer; and
WHEREAS, the Boards of Directors of Parent, Purchaser
and the Company have each approved the merger (the "Merger")
of Purchaser with and into the Company in accordance with the
General Corporation Law of the State of Delaware ("Delaware
Law") following the consummation of the Offer and upon the
terms and subject to the conditions set forth herein; and
WHEREAS, Purchaser and certain stockholders of the
Company (the "Stockholders") have entered into a Stockholders
Agreement, and certain of those Stockholders have also entered
into a Supplemental Stockholders Agreement, each dated as of
the date hereof (collectively, the "Stockholders Agreement"),
providing for the agreement of the Stockholders to tender
pursuant to the Offer all Shares owned by such Stockholders
subject to the terms and conditions of the Stockholders
Agreement;
NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants and agreements herein contained, and
intending to be legally bound hereby, Parent, Purchaser and
the Company hereby agree as follows:
- 1 -
<PAGE>
ARTICLE I
THE OFFER
SECTION 1.01. The Offer. (a) Provided that this Agreement shall not have
been terminated in accordance with Section 8.01 and none of the events set forth
in Annex A hereto shall have occurred and remain in effect (unless such event
shall have been waived by Purchaser), Parent shall cause Purchaser to commence
(within the meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and Purchaser shall commence, the Offer at the Per
Share Amount as promptly as reasonably practicable, but in no event later than
five business days after the public announcement of this Agreement and shall
keep the Offer open for 20 business days or, subject to applicable law, such
longer period as Parent and Purchaser may determine (x) is required because of a
failure to satisfy one or more of the conditions set forth in Annex A hereto or
(y) could result in not less than 90% of the Shares on a fully diluted basis
being tendered and not withdrawn (except that there shall be only one extension
of the Offer pursuant to this clause (y) and it shall not exceed 10 business
days from the original expiration date of the Offer), or as may be agreed to by
the Company and Parent. The obligation of Purchaser to accept for payment and
pay for Shares tendered pursuant to the Offer shall be subject only to (i) the
condition (the "Minimum Condition") that at least the number of Shares that
constitute a majority of the then outstanding Shares on a fully diluted basis,
including, without limitation, all Shares issuable upon the conversion of any
convertible securities or upon the exercise of any options, warrants or rights
or upon consummation of the Class Action Settlement, shall have been validly
tendered and not withdrawn at or prior to the expiration of the Offer and (ii)
the satisfaction or waiver of the other conditions set forth in Annex A hereto.
Purchaser expressly reserves the right to waive any such condition (other than
the Minimum Condition), to increase the price per Share payable in the Offer,
and to make any other changes in the terms and conditions of the Offer;
provided, however, that (notwithstanding Section 8.04) no such change may be
made without the prior written consent of the Company which (A) decreases the
price per Share payable in the Offer, (B) changes the form of consideration
payable in the offer, (C) reduces the number of Shares sought to be purchased in
the Offer, (D) imposes conditions to the Offer in addition to those set forth in
Annex A hereto, (E) amends or changes the terms and conditions of the Offer in
any manner adverse to the holders of Shares or (F) changes or waives the Minimum
Condition. The Per Share Amount shall, subject to applicable withholding of
taxes, be net to the seller in cash, without interest thereon, upon the terms
and subject to the conditions of the Offer. Subject to the terms and conditions
of the Offer (including, without limitation, the Minimum Condition), Purchaser
shall accept for payment and pay, as promptly as practicable after expiration of
the Offer, for all Shares validly tendered and not withdrawn.
(b) As soon as reasonably practicable on the date of commencement of the
Offer, Parent and Purchaser shall file with the Securities and Exchange
Commission (the "SEC") and disseminate to holders of Shares to the extent
required by law a Tender Offer Statement on Schedule 14D-1 (together with all
amendments and supplements thereto, the "Schedule 14D-1") with respect to the
Offer and the other Transactions (as hereinafter defined). The Schedule 14D-1
- 2 -
<PAGE>
shall contain or shall incorporate by reference an offer to purchase relating to
the Offer (the "Offer to Purchase") and forms of the related letter of
transmittal and any related summary advertisement (the Schedule 14D-1, the Offer
to Purchase and such other documents, together with all supplements and
amendments thereto, being referred to herein collectively as the "Offer
Documents"). The information provided and to be provided by Parent, Purchaser
and the Company for use in the Schedule 14D-1 and the other Offer Documents
shall not, on the date the Schedule 14D-1 is filed with the SEC, and on the date
the Offer Documents are first published, sent or given to stockholders, as the
case may be, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, and Parent, Purchaser and the Company agree promptly to
correct any such information provided by any of them for use in the Schedule
14D-1 or the other Offer Documents that shall have become false or misleading
and to take all steps necessary to cause the Schedule 14D-1 as so corrected to
be filed with the SEC and such Offer Documents as so corrected to be
disseminated to holders of Shares, in each case as and to the extent required by
applicable law. The Schedule 14D-1 shall comply as to form in all material
respects with the requirements of the Exchange Act and the rules and regulations
thereunder. The Company and its counsel shall be given an opportunity to review
and comment on the Offer Documents and any amendments thereto prior to the
filing thereof with the SEC. Parent and Purchaser will provide the Company and
its counsel with a copy of any written comments or telephonic notification of
any verbal comments Parent or Purchaser may receive from the SEC or its staff
with respect to the Offer Documents promptly after the receipt thereof and will
provide the Company and its counsel with a copy of any written responses and
telephonic notification of any verbal response of Parent, Purchaser or their
counsel. In the event that the Offer is terminated or withdrawn by Purchaser,
Parent and Purchaser shall cause all tendered Shares to be returned to the
registered holders of the Shares represented by the certificate or certificates
surrendered to the Paying Agent.
SECTION 1.02. Company Action. (a) The Company hereby represents that (i)
the Board, at a meeting duly called and held on March 15, 1995 (the "March 15
Meeting"), has unanimously (A) determined that this Agreement and the
transactions contemplated hereby, including, without limitation, each of the
Offer and the Merger (the "Transactions"), are fair to and in the best interests
of the holders of Shares, (B) approved this Agreement, the Stockholders
Agreement and the Transactions and the acquisition of Shares pursuant to the
Stockholders Agreement as provided in Section 203(a) of the General Corporation
Law of the State of Delaware (the "Delaware Law"), (C) authorized the execution
and delivery of this Agreement, and (D) after considering its fiduciary duties
under applicable law, resolved to recommend, subject to the conditions set forth
herein, that the stockholders of the Company accept the Offer and approve and
adopt this Agreement and the Transactions, and (ii) Donaldson, Lufkin & Jenrette
Securities Corporation ("DLJ") has delivered to the Board a written opinion that
the consideration to be received by the holders of Shares pursuant to each of
the Offer and the Merger is fair to such holders from a financial point of view.
The Company has been authorized by DLJ, subject to prior review by such
financial advisor, to include such fairness opinion (or references thereto) in
the Offer Documents and in the Schedule 14D-9 and the Proxy Statement. Subject
to the fiduciary duties of the Board under applicable law, the Company hereby
consents to the inclusion in the Offer Documents of the recommendation of the
Board described above.
- 3 -
<PAGE>
(b) As soon as reasonably practicable on or after the date of commencement
of the Offer, the Company shall file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 (together with all amendments and supplements
thereto, the "Schedule 14D-9") containing, subject to the fiduciary duties of
the Board under applicable law, the recommendation of the Board described in
Section 1.02(a) and shall disseminate the Schedule 14D-9 to the extent required
by Rule 14d-9 promulgated under the Exchange Act and any other applicable
federal securities laws. The Company, Parent and Purchaser agree to correct
promptly any information provided by any of them for use in the Schedule 14D-9
which shall have become false or misleading, and the Company further agrees to
take all steps necessary to cause the Schedule 14D-9 as so corrected to be filed
with the SEC and disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws. Parent, Purchaser and
their counsel shall be given an opportunity to review and comment on the
Schedule 14D-9 and any amendments thereto prior to the filing thereof with the
SEC. The Company will provide Parent and Purchaser and their counsel with a copy
of any written comments or telephonic notification of any verbal comments the
Company may receive from the SEC or its staff with respect to the Schedule 14D-9
promptly after the receipt thereof and will provide Parent and Purchaser and
their counsel with a copy of any written responses and telephonic notification
of any verbal response of the Company or its counsel.
(c) The Company shall promptly cause its transfer agent to furnish
Purchaser with mailing labels containing the names and addresses of all record
holders of Shares and with security position listings of Shares held in stock
depositories, each as of the most recent date reasonably practicable, together
with all other available listings and computer files containing names, addresses
and security position listings of record holders and non-objecting beneficial
owners of Shares as of the most recent date reasonably practicable. The Company
shall furnish Purchaser with such additional information, including, without
limitation, updated listings and computer files of stockholders, mailing labels
and security position listings, and such other assistance as Parent, Purchaser
or their agents may reasonably request in connection with the Offer. Subject to
the requirements of applicable law, and except for such steps as are necessary
to disseminate the Offer Documents and any other documents necessary to
consummate the Offer or the Merger, Parent and Purchaser shall hold in
confidence the information contained in such labels, listings and files, shall
use such information only in connection with the Offer and the Merger, and, if
this Agreement shall be terminated in accordance with Section 8.01, shall
deliver promptly to the Company all copies of such information then in their
possession and shall certify in writing to the Company their compliance with
this Section 1.02(c).
- 4 -
<PAGE>
ARTICLE II
THE MERGER
SECTION 2.01. The Merger. Upon the terms and subject to the conditions
hereof, and in accordance with Delaware Law, as soon as practicable after
satisfaction or, if permissible, waiver of the conditions set forth in Article
VII, Purchaser shall be merged with and into the Company. As a result of the
Merger, the separate corporate existence of Purchaser shall cease and the
Company shall continue as the surviving corporation of the Merger (the
"Surviving Corporation"). Notwithstanding anything to the contrary contained in
this Section 2.01, Parent may elect instead, at any time prior to the fifth
business day immediately preceding the date on which the Proxy Statement (as
defined in Section 4.04) is mailed initially to the Company's stockholders, to
merge the Company into Purchaser or another direct or indirect wholly-owned
subsidiary of Parent; provided, however, that the Company shall not be deemed to
have breached any of its representations, warranties or covenants herein by
reason of the effects of such election. In such event, the parties agree to
execute an appropriate amendment to this Agreement in order to reflect the
foregoing and to provide, as the case may be, that Purchaser or such other
wholly-owned subsidiary of Parent shall be the Surviving Corporation.
SECTION 2.02. Effective Time; Closing. As promptly as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in Article
VII, the parties hereto shall cause the Merger to be consummated by filing a
certificate of merger (the "Certificate of Merger") and such other documents as
are required by Delaware Law to be filed with the Secretary of State of the
State of Delaware, in such form as is required by, and executed in accordance
with the relevant provisions of, Delaware Law (the date and time of such filing
being the "Effective Time").
SECTION 2.03. Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in the applicable provisions of Delaware Law.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, all the property, rights, privileges, powers and franchises of
the Company and Purchaser shall vest in the Surviving Corporation, and all
debts, liabilities, obligations, restrictions, disabilities and duties of the
Company and Purchaser (including, without limitation, all indemnification
contracts of the Company) shall become the debts, liabilities, obligations,
restrictions, disabilities and duties of the Surviving Corporation.
SECTION 2.04. Certificate of Incorporation; By-laws. Subject to Section
6.06, and unless Parent elects to merge the Company into Purchaser or another
direct or indirect subsidiary of Parent pursuant to the third sentence of
Section 2.01 (in which case the Certificate of Incorporation and By-laws of
Purchaser or such other subsidiary, as in effect immediately prior to the
Effective Time, shall be the Certificate of Incorporation and By-laws of the
Surviving Corporation), at the Effective Time, the Certificate of Incorporation
of the Company, as in effect immediately prior to the Effective Time, shall be
the Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided by law and such Certificate of Incorporation, and the
By-laws of the Company, as in effect immediately prior to the Effective Time,
shall be the
- 5 -
<PAGE>
By-laws of the Surviving Corporation until thereafter amended as provided by
law, the Certificate of Incorporation of the Surviving Corporation and such
By-laws.
SECTION 2.05. Directors and Officers. The directors of Purchaser
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-laws of the Surviving Corporation, and the officers of the
Company immediately prior to the Effective Time shall be the initial officers of
the Surviving Corporation, in each case until their respective successors are
duly elected or appointed and qualified.
SECTION 2.06. Conversion of Securities. At the Effective Time, by virtue of
the Merger and without any action on the part of Purchaser, the Company or the
holders of any of the Shares:
(a) Each Share issued and outstanding immediately prior to the Effective
Time (other than any Dissenting Shares (as hereinafter defined) and any Shares
held by Purchaser or Parent) shall be cancelled and shall be converted
automatically into the right to receive in cash an amount equal to the Per Share
Amount payable, without interest, to the holder of such Share upon surrender, in
the manner provided in Section 2.09, of the certificate that formerly evidenced
such Share;
(b) Each share of Series B Cumulative Convertible Preferred Stock, par
value $.01 per share, of the Company (the "Company Preferred Stock") issued and
outstanding immediately prior to the Effective Time (each a "Preferred Share")
shall be cancelled and shall be converted automatically into the right to
receive in cash an amount equal to $2,500.00 plus all accrued but unpaid
dividends on such Preferred Share (the "Preferred Per Share Amount") payable,
without interest, to the holder of such Preferred Share upon surrender, in the
manner provided in Section 2.09, of the certificate that formerly evidenced such
Preferred Share;
(c) Each share of capital stock of the Company held in the treasury of the
Company shall be cancelled without any conversion thereof and no payment or
distribution shall be made with respect thereto; and
(d) Each share of Common Stock, par value $.0l per share, of Purchaser
issued and outstanding immediately prior to the Effective Time shall be
converted into and exchanged for one validly issued, fully paid and
nonassessable share of Common Stock, par value $.0l per share, of the Surviving
Corporation.
SECTION 2.07. Employee Stock Options. At the Effective Time, each
outstanding option to purchase Shares (in each case, an "Option") granted under
the Company's 1992 Stock Option Plan, as amended (the "Stock Option Plan"),
whether or not then exercisable, shall be cancelled by the Company, and each
holder of a cancelled option shall be entitled to receive from Purchaser at the
same time as payment for Shares is made by Purchaser in connection with the
Offer, in consideration for the cancellation of such option, an amount in cash
equal to the product of (i) the number of Shares previously subject to such
option and (ii) the excess, if any, of the Per Share Amount over the exercise
price per Share previously subject to such Option.
- 6 -
<PAGE>
SECTION 2.08. Dissenting Shares. (a) Notwithstanding any provision of this
Agreement to the contrary, Shares that are outstanding immediately prior to the
Effective Time and which are held by stockholders who shall have not voted in
favor of the Merger or consented thereto in writing and who shall have demanded
properly in writing appraisal for such Shares in accordance with Section 262 of
Delaware Law (collectively, the "Dissenting Shares") shall not be converted into
or represent the right to receive the Merger Consideration (as hereinafter
defined). Such stockholders shall be entitled to receive payment of the
appraised value of such Shares held by them in accordance with the provisions of
such Section 262, except that all Dissenting Shares held by stockholders who
shall have failed to perfect or who effectively shall have withdrawn or lost
their rights to appraisal of such Shares under such Section 262 shall thereupon
be deemed to have been converted into and to have become exchangeable for, as of
the Effective Time, the right to receive the Merger Consideration, without any
interest thereon, upon surrender, in the manner provided in Section 2.09, of the
certificate or certificates that formerly evidenced such Shares.
(b) The Company shall give Parent (i) prompt notice of any demands for
appraisal received by the Company, withdrawals of such demands, and any other
instruments served pursuant to Delaware Law in respect of Dissenting Shares and
received by the Company and (ii) the opportunity to direct all negotiations and
proceedings with respect to demands for appraisal under Delaware Law. The
Company shall not, except with the prior written consent of Parent, make any
payment with respect to any demands for appraisal or offer to settle or settle
any such demands.
SECTION 2.09. Surrender of Shares and Preferred Shares; Stock Transfer
Books. (a) Prior to the Effective Time, Purchaser shall designate a bank or
trust company reasonably satisfactory to the Company to act as agent (the
"Paying Agent") for the holders of Shares and Preferred Shares in connection
with the Merger to receive the funds to which holders of Shares and Preferred
Shares shall become entitled pursuant to Sections 2.06(a) and (b), respectively.
Immediately prior to the Effective Time, Parent shall cause Surviving
Corporation to have sufficient funds to deposit, and shall cause Surviving
Corporation to deposit in trust with the Paying Agent, cash in the aggregate
amount equal to (i) the product of (x) the number of Shares outstanding
immediately prior to the Effective Time (other than Shares owned by Parent or
Purchaser and Shares as to which dissenters' rights have been exercised as of
the Effective Time) and (y) the Per Share Amount, plus (ii) the product of (x)
the number of Preferred Shares outstanding immediately prior to the Effective
Time and (y) the Preferred Per Share Amount. Such funds shall be invested by the
Paying Agent as directed by the Surviving Corporation, provided that such
investments shall be in obligations of or guaranteed by the United States of
America or of any agency thereof and backed by the full faith and credit of the
United States of America, in commercial paper obligations rated A-1 or P-1 or
better by Moody's Investors Services, Inc. or Standard & Poor's Corporation,
respectively, or in deposit accounts, certificates of deposit or banker's
acceptances of, repurchase or reverse repurchase agreements with, or Eurodollar
time deposits purchased from, commercial banks with capital, surplus and
undivided profits aggregating in excess of $100 million (based on the most
recent financial statements of such bank which are then publicly available at
the SEC or otherwise); provided, however, that no loss on any investment made
pursuant to this Section 2.09 shall relieve Parent or the Surviving
- 7 -
<PAGE>
Corporation of its obligation to pay the Per Share Amount for each Share and the
Preferred Per Share Amount for each Preferred Share outstanding immediately
prior to the Effective Time.
(b) As soon as practicable after the Effective Time, the Surviving
Corporation shall cause the Paying Agent to mail or cause to be mailed to each
person who was, at the Effective Time, a holder of record of a Share entitled to
receive the Per Share Price pursuant to Section 2.06(a) or a Preferred Share
entitled to receive the Preferred Per Share Price pursuant to Section 2.06(b)
(the "Merger Consideration") a form of letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
certificates evidencing such Shares or Preferred Shares (the "Certificates")
shall pass, only upon proper delivery of the Certificates to the Paying Agent)
and instructions for use in effecting the surrender of the Certificates pursuant
to such letter of transmittal. Upon surrender to the Paying Agent of a
Certificate, together with such letter of transmittal, duly completed and
validly executed in accordance with the instructions thereto, and such other
documents as may be required pursuant to such instructions, the holder of such
Certificate shall be entitled to receive in exchange therefor the Merger
Consideration for each Share or Preferred Share formerly evidenced by such
Certificate, and such Certificate shall then be cancelled. No interest shall
accrue or be paid on the Merger Consideration payable upon the surrender of any
Certificate for the benefit of the holder of such Certificate. If payment of the
Merger Consideration is to be made to a person other than the person in whose
name the surrendered Certificate is registered on the stock transfer books of
the Company, it shall be a condition of payment that the Certificate so
surrendered shall be endorsed properly or otherwise be in proper form for
transfer and that the person requesting such payment shall have paid all
transfer and other taxes required by reason of the payment of the Merger
Consideration to a person other than the registered holder of the Certificate
surrendered or shall have established to the satisfaction of the Surviving
Corporation that such taxes either have been paid or are not applicable. The
Surviving Corporation shall pay all charges and expenses, including those of the
Paying Agent, in connection with the distribution of the Merger Consideration.
(c) At any time following the sixth month after the Effective Time, the
Surviving Corporation shall be entitled to require the Paying Agent to deliver
to it any funds which had been made available to the Paying Agent and not
disbursed to holders of Shares or Preferred Shares (including, without
limitation, all interest and other income received by the Paying Agent in
respect of all funds made available to it) and, thereafter, such holders shall
be entitled to look to the Surviving Corporation (subject to abandoned property,
escheat and other similar laws) only as general creditors thereof with respect
to any Merger Consideration that may be payable upon due surrender of the
Certificates held by them. Notwithstanding the foregoing, neither the Surviving
Corporation nor the Paying Agent shall be liable to any holder of Shares or
Preferred Shares for any Merger Consideration delivered in respect of such
Shares or Preferred Shares to a public official pursuant to any abandoned
property, escheat or other similar law.
(d) At the close of business on the day of the Effective Time, the stock
transfer books of the Company shall be closed and, thereafter, there shall be no
further registration of transfers of Shares or Preferred Shares on the records
of the Company. From and after the Effective Time, the holders of Shares and
Preferred Shares outstanding immediately prior to the Effective Time
- 8 -
<PAGE>
shall cease to have any rights with respect to such Shares or Preferred Shares
except as otherwise provided herein or by applicable law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Purchaser that:
SECTION 3.01. Organization and Qualification; Subsidiaries. Each of the
Company and each subsidiary of the Company (a "Subsidiary") is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite power and authority and
all necessary governmental approvals to own, lease and operate its properties
and to carry on its business as it is now being conducted, except where the
failure to be so organized, existing or in good standing or to have such power,
authority and governmental approvals would not, individually or in the
aggregate, have a Material Adverse Effect (as defined below). The Company and
each Subsidiary is duly qualified or licensed as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
the properties owned, leased or operated by it or the nature of its business
makes such qualification or licensing necessary, except for such failures to be
so qualified or licensed and in good standing that would not, individually or in
the aggregate, have a Material Adverse Effect. When used in connection with the
Company or any Subsidiary, the term "Material Adverse Effect" means any change
or effect that is or is reasonably likely to be materially adverse to the
business, operations, properties or condition (financial or otherwise) of the
Company and the Subsidiaries taken as a whole. A true and complete list of all
the Subsidiaries, together with the jurisdiction of incorporation of each
Subsidiary and the percentage of the outstanding capital stock of each
Subsidiary owned by the Company and each other Subsidiary, is set forth in
Section 3.01 of the Disclosure Schedule delivered concurrently with the
execution and delivery of this Agreement by the Company to Parent (the
"Disclosure Schedule"). Except as disclosed in such Section 3.01, the Company
does not directly or indirectly own any equity or similar interest in, or any
interest convertible into or exchangeable or exercisable for, any equity or
similar interest in, any corporation, partnership, joint venture or other
business association or entity, other than indirect equity and similar interests
held for investment which are not, in the aggregate, material to the Company.
SECTION 3.02. Certificate of Incorporation and By-laws. The Company has
heretofore furnished to Parent a complete and correct copy of the Certificate of
Incorporation and the By- laws or equivalent organizational documents, each as
amended to date, of the Company and each Subsidiary. Such Certificates of
Incorporation, By-laws and equivalent organizational documents are in full force
and effect. Neither the Company nor any Subsidiary is in violation of any
provision of its Certificate of Incorporation, By-laws or equivalent
organizational documents. The provisions of Article VII of the Company's
Certificate of Incorporation, as amended, have been validly and effectively
waived as to all of the Transactions.
- 9 -
<PAGE>
SECTION 3.03. Capitalization. The authorized capital stock of the Company
consists of 75,000,000 Shares and 2,500,000 shares of preferred stock, par value
$.0l per share. As of the date of this Agreement, (i) 24,665,160 Shares are
issued and outstanding, all of which are validly issued, fully paid and
nonassessable, (ii) no Shares are held in the treasury of the Company, (iii)
2,151,000 Shares are issuable upon conversion of the outstanding Preferred
Shares, (iv) 2,936,324 Shares are issuable upon exercise of outstanding stock
options granted pursuant to the Stock Option Plan, and (v) 564,302 Shares are
issuable pursuant to the Class Action Settlement. Of the authorized shares of
preferred stock, par value $.01 per share, as of the date of this Agreement,
there are 2,151 Preferred Shares issued and outstanding, all of which are
validly issued, fully paid and nonassessable, and no shares are held in the
treasury of the Company. Except as set forth in this Section 3.03 or Section
3.03 of the Disclosure Schedule, or pursuant to the Class Action Settlement,
there are no options, warrants or other rights, agreements, arrangements or
commitments of any character obligating the Company or any Subsidiary to issue
or sell any shares of capital stock of, or other equity interests in, the
Company or any Subsidiary. Section 3.03 of the Disclosure Schedule sets forth,
as to each outstanding option, the exercise price and the number of Shares
covered thereby. All Shares subject to issuance as aforesaid, upon issuance on
the terms and conditions specified in the instruments pursuant to which they are
issuable, would be duly authorized, validly issued, fully paid and
nonassessable. There are no outstanding contractual obligations of the Company
or any Subsidiary to repurchase, redeem or otherwise acquire any Shares or any
capital stock of any Subsidiary or to provide funds to, or make any investment
(in the form of a loan, capital contribution or otherwise) in, any Subsidiary or
any other person. Each outstanding share of capital stock of each Subsidiary is
duly authorized, validly issued, fully paid and nonassessable and, except as set
forth on Section 3.03 of the Disclosure Schedule, each such share owned by the
Company or another Subsidiary is free and clear of all security interests,
liens, claims, pledges, options, rights of first refusal, agreements,
limitations on the Company's or such other Subsidiary's voting rights, charges
and other encumbrances of any nature whatsoever.
SECTION 3.04. Authority Relative to this Agreement. The Company has all
necessary power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the Transactions to which it is a
party, subject, with respect to the Merger, to any required approval of the
stockholders of the Company. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the Transactions have been duly
and validly authorized by all necessary corporate action and no other corporate
proceedings on the part of the Company are necessary for it to authorize this
Agreement or to consummate the Transactions (other than, with respect to the
Merger, the approval and adoption of this Agreement by the affirmative vote of
the holders of a majority of the outstanding Shares and the filing of the
Certificate of Merger as required by Delaware Law). The Board has taken all
action necessary under Delaware Law to ensure that the restrictions on business
combinations set forth in Section 203 of Delaware Law do not, and will not,
apply with respect to or as a result of the Transactions or the execution and
delivery of the Stockholders Agreement. This Agreement has been duly and validly
executed and delivered by the Company and, assuming due authorization, execution
and delivery by Parent and Purchaser, constitutes a legal, valid and binding
obligation of the Company, except to the extent such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting generally the enforcement of creditors, rights and
- 10 -
<PAGE>
by the availability of equitable remedies. No further action is required and no
further conditions need be satisfied in connection with the consummation of the
Merger under the provisions of Section 203(a)(i) of the Delaware Law.
SECTION 3.05. No Conflict; Required Filings and Consents. (a) The execution
and delivery of this Agreement by the Company does not, and the performance of
this Agreement by the Company will not: (i) conflict with or violate the
Certificate of Incorporation or By-laws of the Company or any Subsidiary, (ii)
assuming that required filings under the HSR Act (as hereinafter defined), the
Exon-Florio Act (as hereinafter defined) and Delaware Law are made by the
appropriate parties, conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to the Company or any Subsidiary or by which any
property or asset of the Company or any Subsidiary is bound or affected;
provided, however, that the Company makes no representation or warranty with
respect to any federal, state or foreign laws relating to antitrust or
competition, or (iii) except as set forth in Section 3.05 of the Disclosure
Schedule, result in any breach of or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any right of termination, amendment, acceleration or cancellation of, or
result in the creation of a lien or other encumbrance on any property or asset
of the Company or any Subsidiary pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or any Subsidiary is a party or by
which the Company or any Subsidiary or any property or asset of the Company or
any Subsidiary is bound or affected, except, in the cases of (ii) and (iii), for
any such conflicts, violations, breaches, defaults or other occurrences which do
not, individually or in the aggregate, have a Material Adverse Effect.
(b) The execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement by the Company will not, require any
consent, approval, authorization or permit of, or filing with, or notification
to, any governmental or regulatory authority to be obtained or made by the
Company, domestic or foreign, except (i) for applicable requirements, if any, of
the Exchange Act, state securities or "blue sky" laws ("Blue Sky Laws") and
state takeover laws, the pre-merger notification requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules
and regulations thereunder (the "HSR Act"), and the notification requirements
under Section 721 of the Defense Production Act of 1950, as amended, popularly
known as the Exon-Florio Amendment (the "Exon-Florio Act"), and filing and
recordation of appropriate merger documents as required by Delaware Law or (ii)
where failure to obtain such consents, approvals, authorizations or permits, or
to make such filings or notifications, would not prevent or delay consummation
of the Offer or the Merger, or otherwise prevent the Company from performing its
obligations under this Agreement, and does not, individually or in the
aggregate, have a Material Adverse Effect.
SECTION 3.06. Compliance. Neither the Company nor any Subsidiary is in
default or violation of (i) any law, rule, regulation, order, judgment or decree
applicable to the Company or any Subsidiary or by which any property or asset of
the Company or any Subsidiary is bound or affected, or (ii) except as set forth
in Section 3.06 of the Disclosure Schedule, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company or any Subsidiary is a party or by which the
Company or any Subsidiary or any property or asset of the Company or any
- 11 -
<PAGE>
Subsidiary is bound or affected, except for any such defaults or violations that
do not, individually or in the aggregate, have a Material Adverse Effect.
SECTION 3.07. SEC Filings; Financial Statements. (a) The Company has filed
all forms, reports and documents required to be filed by it with the SEC since
December 31, 1992, including its annual report on Form 10-K for the year ended
December 31, 1994 (collectively, the "SEC Reports"). The SEC Reports (i) were
prepared in all material respects in accordance with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and the Exchange Act,
as the case may be, and the rules and regulations thereunder and (ii) except for
preliminary material, did not, at the time they were filed (or at the effective
date thereof in the case of registration statements), contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. No
Subsidiary is currently required to file any form, report or other document with
the SEC under Section 12 of the Exchange Act.
(b) Each of the consolidated financial statements (including, in each case,
any notes thereto) contained in the SEC Reports was prepared in accordance with
United States generally accepted accounting principles applied on a consistent
basis ("GAAP") throughout the periods indicated (except as may be indicated in
the notes thereto) and each fairly presented the consolidated financial
position, results of operations and changes in stockholders' equity and cash
flows of the Company and its consolidated subsidiaries as at the respective
dates thereof and for the respective periods indicated therein (subject, in the
case of unaudited statements, to normal and recurring year-end adjustments).
(c) Except as (i) and to the extent set forth on the consolidated balance
sheet of the Company and its consolidated subsidiaries as at December 31, 1994,
including the notes thereto (the "1994 Balance Sheet"), (ii) set forth in
Section 3.07(c) of the Disclosure Schedule or (iii) disclosed in any SEC Report
filed by the Company after December 31, 1994, neither the Company nor any
Subsidiary has any liability or obligation of any nature (whether accrued,
absolute, contingent or otherwise) which would be required to be reflected on a
balance sheet, or in the notes thereto, prepared in accordance with GAAP, except
for liabilities and obligations incurred in the ordinary course of business
consistent with past practice since December 31, 1994 and those liabilities and
obligations which would not, individually or in the aggregate, be material in
amount.
SECTION 3.08. Absence of Certain Changes or Events. Since December 31,
1994, the Company and the Subsidiaries have conducted their businesses only in
the ordinary course and in a manner consistent with past practice and, since
December 31, 1994, except as contemplated by this Agreement or disclosed in any
SEC Report filed since December 31, 1994 and prior to the date of this Agreement
or as set forth in Section 3.08 of the Disclosure Schedule, there has not been
(i) any event having, individually or in the aggregate, a Material Adverse
Effect, (ii) any declaration, setting aside or payment of any dividend or
distribution in respect of any capital stock of the Company or any redemption,
purchase or other acquisition of any of its securities, or (iii) any increase in
- 12 -
<PAGE>
or establishment of any bonus, insurance, severance, deferred compensation,
pension, retirement, profit sharing, stock option (including, without
limitation, the granting of stock options, stock appreciation rights,
performance awards or restricted stock awards), stock purchase or other employee
benefit plan, or any other increase in the compensation payable or to become
payable to any officers or key employees of the Company or any Subsidiary,
except in the ordinary course of business consistent with past practice.
SECTION 3.09. Absence of Litigation. Except as disclosed in the most recent
SEC Report or on the 1994 Balance Sheet or in Section 3.09 of the Disclosure
Schedule, there is no claim, action, proceeding or investigation pending or, to
the best knowledge of the Company, threatened against the Company or any
Subsidiary, or any property or asset of the Company or any Subsidiary, before
any court, arbitrator or administrative, governmental or regulatory authority or
body, domestic or foreign, which (i) individually or in the aggregate, is
reasonably likely to have a Material Adverse Effect (other than any claim,
action, proceeding or investigation seeking to delay or prevent the consummation
of any Transaction) or (ii) as of the date hereof, seeks to delay or prevent the
consummation of any Transaction. As of the date hereof, neither the Company nor
any Subsidiary nor any property or asset of the Company or any Subsidiary is
subject to any order, writ, judgment, injunction, decree, determination or award
having, individually or in the aggregate, a Material Adverse Effect.
SECTION 3.10. Offer Documents; Schedule 14D-9. Neither the Schedule 14D-9
nor any information supplied by the Company for inclusion in the Offer Documents
shall, at the respective times the Schedule 14D-9, the Offer Documents, or any
amendments or supplements thereto are filed with the SEC or are first published,
sent or given to stockholders of the Company, as the case may be, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements made therein,
in the light of the circumstances under which they are made, not misleading,
except that no representation or warranty is made by the Company with respect to
information supplied by Purchaser or Parent for inclusion in the Schedule 14D-9.
The Schedule 14D-9 shall comply in all material respects as to form with the
requirements of the Exchange Act and the rules and regulations thereunder.
SECTION 3.11. Properties and Assets; Leases. Except for Permitted Liens (as
hereinafter defined) the Company and its Subsidiaries have defensible title to
all their properties and assets, whether tangible or intangible, real, personal
or mixed, reflected in the 1994 Balance Sheet as being owned by the Company and
its Subsidiaries as of the date thereof or purported to be owned on the date
hereof. All buildings, and all fixtures, equipment and other property and assets
which are material to its business on a consolidated basis, held under leases by
any of the Company or its Subsidiaries are held under valid instruments
enforceable by the Company or its Subsidiaries in accordance with their
respective terms.
For purposes of this Agreement, "Permitted Liens" means, collectively, (A)
any liens, pledges or other encumbrances ("Liens") for current taxes and
assessments not yet past due, (B) any Liens arising from or permitted under the
Company's bank credit facility existing on the date of this Agreement, (C)
inchoate mechanics' and materialmen's Liens for construction in progress,
- 13 -
<PAGE>
(D) workmen's, repairmen's, warehousemen's and carriers' Liens arising in the
ordinary course of business of the Company or the Subsidiaries and (E) all Liens
and other imperfections of title and encumbrances which, individually or in the
aggregate, would not have a Material Adverse Effect.
SECTION 3.12. Environmental Matters. (a) For purposes of this Agreement,
the following terms shall have the following meanings: (i) "Hazardous
Substances" means (A) those substances defined as hazardous in or regulated as
hazardous under the following federal statutes and their state counterparts, as
each may be amended from time to time, and all regulations thereunder: the
Hazardous Materials Transportation Act, the Resource Conservation and Recovery
Act, the Comprehensive Environmental Response, Compensation, and Liability Act,
the Clean Water Act, the Safe Drinking Water Act, the Atomic Energy Act, the
Federal Insecticide, Fungicide, and Rodenticide Act and the Clean Air Act; (B)
petroleum and petroleum products, including crude oil and any fractions thereof;
(C) natural gas, synthetic gas, and any mixtures thereof; (D) radon; (E) any
other contaminant; and (F) any substance with respect to which a federal, state
or local agency requires environmental investigation, monitoring, reporting or
remediation; and (ii) "Environmental Laws" means any federal, state or local law
relating to (A) releases or threatened releases of Hazardous Substances or
materials containing Hazardous Substances into the environment; (B) the
manufacture, handling, transport, use, treatment, storage or disposal of
Hazardous Substances or materials containing Hazardous Substances; or (C)
otherwise relating to pollution of the environment or the protection of human
health.
(b) Except as described in Section 3.12 of the Disclosure Schedule or the
most recent SEC Report: (i) the Company and each Subsidiary is in compliance
with all applicable Environmental Laws, except for noncompliance that
individually or in the aggregate do not have a Material Adverse Effect; (ii) the
Company and each Subsidiary have obtained all permits, licenses and other
material governmental authorizations required under applicable Environmental
Laws, and are in compliance with the terms and conditions thereof, except for
failures to obtain or noncompliance that individually or in the aggregate do not
have a Material Adverse Effect; (iii) neither the Company nor any of its
Subsidiaries has received written notice of, or, to the best knowledge of the
Company, is the subject of, any action, cause of action, claim, investigation,
demand or notice by any person or entity alleging liability under or
noncompliance with any Environmental Law that individually or in the aggregate
would have a Material Adverse Effect; and (iv) to the best knowledge of the
Company, there is no environmental condition on any of the properties currently
or formerly owned or leased by the Company or any Subsidiary that individually
or in the aggregate has a Material Adverse Effect.
SECTION 3.13. Brokers. No broker, finder or investment banker (other than
DLJ) is entitled to any brokerage, finder's or other fee or commission in
connection with the Transactions based upon arrangements made by or on behalf of
the Company. The Company has heretofore furnished to Parent a complete and
correct copy of all agreements between the Company and DLJ pursuant to which
such firm would be entitled to any payment relating to the Transactions.
- 14 -
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser hereby, jointly and severally, represent and warrant
to the Company that:
SECTION 4.01. Corporate Organization. Each of Parent and Purchaser is a
corporation duly organized, validly existing and, in the case of Purchaser, in
good standing or, in the case of Parent, not in liquidation or the subject of
any petition or proposed resolution or other proceeding for its liquidation,
under the laws of the jurisdiction of its incorporation and has the requisite
power and authority and all necessary governmental approvals to own, lease and
operate its properties and to carry on its business as it is now being
conducted, except where the failure to have such power, authority and
governmental approvals would not, individually or in the aggregate, have a
material adverse effect on the ability of Parent and Purchaser to perform their
obligations hereunder and to consummate the Transactions.
SECTION 4.02. Authority Relative to this Agreement. Each of Parent and
Purchaser has all necessary corporate power and authority to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate the
Transactions. The execution and delivery of this Agreement by Parent and
Purchaser and the consummation by Parent and Purchaser of the Transactions have
been duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of Parent or Purchaser are necessary to
authorize this Agreement or to consummate the Transactions (other than, with
respect to the Merger, the filing and recordation of appropriate merger
documents as required by Delaware Law). This Agreement has been duly and validly
executed and delivered by Parent and Purchaser and, assuming the due
authorization, execution and delivery by the Company, constitutes a legal, valid
and binding obligation of each of Parent and Purchaser enforceable against each
of Parent and Purchaser in accordance with its terms.
SECTION 4.03. No Conflict; Required Filings and Consents; Absence of
Litigation. (a) The execution and delivery of this Agreement by Parent and
Purchaser do not, and the performance of this Agreement by Parent and Purchaser
will not, (i) conflict with or violate the Articles of Association, Certificate
of Incorporation or By-laws of either Parent or Purchaser, (ii) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to
Parent or Purchaser or by which any property or asset of either of them is bound
or affected, or (iii) result in any breach of or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other encumbrance on any
property or asset of Parent or Purchaser pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Parent or Purchaser is a party or by which
Parent or Purchaser or any property or asset of either of them is bound or
affected, except for any such conflicts, violations, breaches, defaults or other
occurrences which would not, individually or in the aggregate, prevent Parent
- 15 -
<PAGE>
and Purchaser from performing their respective obligations under this Agreement
and consummating the Transactions.
(b) The execution and delivery of this Agreement by Parent and Purchaser do
not, and the performance of this Agreement by Parent and Purchaser will not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority, domestic or foreign,
except (i) for applicable requirements, if any, of the Exchange Act, the London
Stock Exchange, Blue Sky Laws and state takeover laws, the HSR Act, the
Exon-Florio Act and filing and recordation of appropriate merger documents as
required by Delaware Law and (ii) where failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not prevent or delay consummation of the Transactions, or otherwise
prevent Parent or Purchaser from performing their respective obligations under
this Agreement.
(c) There is no claim, action, proceeding or investigation pending or, to
the best knowledge of Parent or Purchaser, threatened against Parent or
Purchaser before any court, arbitrator or administrative, governmental or
regulatory authority or body, domestic or foreign, which seeks to delay or
prevent the consummation of any Transaction.
SECTION 4.04. Offer Documents; Proxy Statement. The Offer Documents will
not, at the time the Offer Documents are filed with the SEC or are first
published, sent or given to stockholders of the Company, 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 are made, not misleading provided
that no representation is made with respect to information supplied by the
Company expressly for inclusion in the Offer Documents. The information supplied
by Parent for inclusion in the proxy statement to be sent to the stockholders of
the Company in connection with the Stockholders Meeting (as hereinafter defined)
(such proxy statement, as amended and supplemented, being referred to herein as
the "Proxy Statement") and Schedule 14D-9 will not, on the date the Proxy
Statement or Schedule 14D-9 (or any amendment or supplement thereto) is first
mailed to stockholders of the Company, at the time of the Stockholders Meeting
and at the Effective Time, 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 are made, not misleading or necessary to correct any statement
in any earlier communication with respect to the solicitation of proxies for the
Stockholders Meeting which shall have become false or misleading.
Notwithstanding the foregoing, Parent and Purchaser make no representation or
warranty with respect to any information supplied by the Company or any of its
representatives which is contained in any of the foregoing documents or the
Offer Documents. The Offer Documents shall comply in all material respects as to
form with the requirements of the Exchange Act and the rules and regulations
thereunder.
SECTION 4.05. Brokers. No broker, finder or investment banker (other than
Wertheim Schroder & Co. Incorporated) is entitled to any brokerage, finder's or
other fee or commission in connection with the Transactions based upon
arrangements made by or on behalf of Parent or Purchaser.
- 16 -
<PAGE>
SECTION 4.06. Financing. Parent has and will have available to it at the
time Purchaser is required to pay for Shares under the terms of the Offer, and
will make available to Purchaser, sufficient funds to permit Purchaser to
acquire all the outstanding Shares in the Offer and the Merger.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01. Conduct of Business by the Company Pending the Purchaser's
Election Date. The Company covenants and agrees that, between the date of this
Agreement and the election or appointment of Purchaser's designees to the Board
pursuant to Section 6.03 (the "Purchaser's Election Date"), unless otherwise
contemplated by this Agreement or unless Parent shall otherwise agree in
writing, the businesses of the Company and the Subsidiaries shall be conducted
only in, and the Company and the Subsidiaries shall not take any action except
in the ordinary course of business and in a manner consistent with past
practice; and the Company shall use its reasonable best efforts to preserve
substantially intact the business organization of the Company and the
Subsidiaries, to keep available the services of the current officers, employees
and consultants of the Company and the Subsidiaries and to preserve the current
relationships of the Company and the Subsidiaries with customers, suppliers and
other persons with which the Company or any Subsidiary has significant business
relations. By way of amplification and not limitation, except as contemplated by
this Agreement, neither the Company nor any Material Subsidiary shall, between
the date of this Agreement and the Purchaser's Election Date, directly or
indirectly do, or propose to do, any of the following without the prior written
consent of Parent:
(a) amend or otherwise change its Certificate of Incorporation or By-laws
or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, encumber, or authorize the
issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of
capital stock of any class of the Company or any Subsidiary, or any options,
warrants, convertible securities or other rights of any kind to acquire any
shares of such capital stock, or any other ownership interest (including,
without limitation, any phantom interest), of the Company or any Subsidiary
(except for the issuance of Shares issuable pursuant to Options outstanding on
the date hereof or upon conversion of Preferred Shares or upon consummation of
the Class Action Settlement) or (ii) any assets of the Company or any
Subsidiary, except for sales of products in the ordinary course of business and
in a manner consistent with past practice;
(c) declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to any of its
capital stock (except for required dividends on the Preferred Shares and except
for such declarations, set asides, dividends and other distributions made from
any Subsidiary to its corporate parent);
- 17 -
<PAGE>
(d) reclassify, combine, split, subdivide or redeem, purchase or otherwise
acquire, directly or indirectly, any of its capital stock;
(e) acquire (including, without limitation, by merger, consolidation, or
acquisition of stock or assets) any corporation, partnership, other business
organization or any division thereof or any material amount of assets other than
in the ordinary course of business;
(f) except pursuant to existing credit facilities, incur any indebtedness
for borrowed money or issue any debt securities or assume, guarantee or endorse,
or otherwise as an accommodation become responsible for, the obligations of any
person, or make any loans or advances, except in the ordinary course of business
and consistent with past practice;
(g) except as set forth in Section 5.01 of the Disclosure Schedule,
increase the compensation payable or to become payable to its officers or
employees, except for increases in accordance with past practices in the
ordinary course of business in salaries or wages of employees of the Company or
any Subsidiary who are not officers of the Company or any Subsidiary, or grant
any severance or termination pay to, or enter into any employment or severance
agreement with, any director, officer or other employee of the Company or any
Subsidiary, or establish, adopt, enter into or amend any collective bargaining,
bonus, profit sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, deferred compensation, employment, termination, severance
or other plan, agreement, trust, fund, policy or arrangement for the benefit of
any director, officer or employee or circulate to any employee any details of
any such plan proposed to be adopted;
(h) make any tax election or settle or compromise any material federal,
state, local or foreign income tax liability;
(i) pay, discharge or satisfy any claim, liability or obligation (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction, in the ordinary course of business and
consistent with past practice, of liabilities reflected or reserved against in
the 1994 Balance Sheet or subsequently incurred in the ordinary course of
business and consistent with past practice;
(j) settle or comprise any pending or threatened suit, action or claim
which is material or which relates to any of the Transactions; or
(k) take or offer or propose to take, or agree to take in writing, or
otherwise, any of the actions described in paragraphs (a) through (j) of this
Section 5.01 or any action which would result in any of the conditions to the
Offer not being satisfied (other than as contemplated by this Agreement).
- 18 -
<PAGE>
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Stockholders Meeting. Subject to the fiduciary duties of the
Board, the Company, acting through the Board, shall, in accordance with
applicable law and the Company's Certificate of Incorporation and By-laws, (i)
if required by law, duly call, give notice of, convene and hold an annual or
special meeting of its stockholders as soon as practicable following
consummation of the Offer for the purpose of considering and taking action on
this Agreement and the transactions contemplated hereby (the "Stockholders
Meeting") and (ii) include in the Proxy Statement the unanimous recommendation
of the Board that the stockholders of the Company approve and adopt this
Agreement and the Merger and use its reasonable best efforts to obtain such
approval and adoption. To the extent permitted by law, Parent and Purchaser each
agree to vote all Shares beneficially owned by them in favor of the Merger.
SECTION 6.02. Proxy Statement. As soon as practicable following the
purchase of all Shares validly tendered and not withdrawn pursuant to the Offer,
the Company shall file the Proxy Statement with the SEC under the Exchange Act
and shall use its reasonable best efforts to have the Proxy Statement cleared by
the SEC. Parent, Purchaser and the Company shall cooperate with each other in
the preparation of the Proxy Statement, and the Company shall notify Parent of
the receipt of any comments of the SEC with respect to the Proxy Statement and
of any requests by the SEC for any amendment or supplement thereto or for
additional information and shall provide to Parent promptly copies of all
correspondence between the Company or any representative of the Company and the
SEC. The Company shall give Parent and its counsel the opportunity to review the
Proxy Statement prior to its being filed with the SEC and shall give Parent and
its counsel the opportunity to review all amendments and supplements to the
Proxy Statement and all responses to requests for additional information and
replies to comments prior to their being filed with, or sent to, the SEC. Each
of the Company, Parent and Purchaser agrees to use its reasonable best efforts,
after consultation with the other parties hereto, to respond promptly to all
such comments of and requests by the SEC and to cause the Proxy Statement and
all required amendments and supplements thereto to be mailed to the holders of
Shares entitled to vote at the Stockholders Meeting at the earliest practicable
time.
SECTION 6.03. Company Board Representation; Section 14(f). (a) Promptly
upon the purchase by Purchaser of Shares pursuant to the Offer which constitute
a majority of the outstanding Shares on a fully diluted basis, Purchaser shall
be entitled to designate such number of directors as shall constitute a majority
of the total number of directors on the Board (giving effect to the directors
elected pursuant to this sentence), and the Company shall, at such time,
promptly take all actions necessary to cause Purchaser's designees to be elected
as directors of the Company, including increasing the size of the Board or
securing the resignations of incumbent directors or both. At such time, the
Company shall use its best efforts to cause persons designated by Purchaser to
constitute a majority of (i) each committee of the Board (some of whom may be
required to be independent as required by applicable law), (ii) each board of
- 19 -
<PAGE>
directors of each domestic Subsidiary and (iii) each committee of each such
board, in each case to the extent permitted by applicable law.
(b) The Company shall promptly take all actions required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order
to fulfill its obligations under this Section 6.03 and shall include in the
Schedule 14D-9 or in a separate information statement such information with
respect to the Company and its officers and directors as is required under such
Section 14(f) and Rule 14f-1 to fulfill such obligations. Parent or Purchaser
shall supply to the Company and be solely responsible for any information with
respect to either of them and their nominees, officers, directors and affiliates
required by such Section 14(f) and Rule 14f-1.
(c) Following the election or appointment of designees of Purchaser
pursuant to this Section 6.03, prior to the Effective Time, any amendment of
this Agreement or the Certificate of Incorporation or By-laws of the Company,
any termination of this Agreement by the Company, any extension by the Company
of the time for the performance of any of the obligations or other acts of
Parent or Purchaser or waiver of any of the Company's rights hereunder shall
require the concurrence of a majority of the directors of the Company then in
office who were not designated by Purchaser or if no such directors are then in
office, no such amendment, termination, extension or waiver shall be effected
which is materially adverse to the holders of Shares (other than Parent and its
subsidiaries).
SECTION 6.04. Access to Information; Confidentiality. (a) From the date
hereof to the consummation of the Offer, the Company shall, and shall cause the
Subsidiaries and the officers, directors, employees, auditors and agents of the
Company and the Subsidiaries to, afford the officers, employees and agents of
Parent and Purchaser complete access at all reasonable times to the officers,
employees, agents, properties, offices, plants and other facilities, books and
records of the Company and each Subsidiary, and shall furnish Parent and
Purchaser with all financial, operating and other data and information as Parent
or Purchaser, through its officers, employees or agents, may reasonably request.
(b) To the extent permitted by applicable law, in order to facilitate the
continuing operation of the Company by Parent and Purchaser from and after the
completion of the Offer without disruption and to assist in an achievement of an
orderly transition in the ownership and management of the Company, from the date
of this Agreement and until completion of the Offer, the Company, Parent and
Purchaser shall cooperate reasonably with each other to effect an orderly
transition including, without limitation, with respect to communications with
employees.
(c) All information obtained by Parent or Purchaser pursuant to this
Section 6.04 shall be kept confidential in accordance with the confidentiality
agreement, dated November 21, 1994 (the "Confidentiality Agreement"), between
Parent and the Company.
SECTION 6.05. No Solicitation of Transactions. Until this Agreement shall
have been terminated pursuant to Section 8.01, neither the Company nor any
Subsidiary shall, directly or indirectly, through any officer, director, agent
or otherwise, solicit, initiate or encourage the submission of any proposal or
offer from any person relating to, participate in any negotiations
- 20 -
<PAGE>
regarding, or furnish to any other person any information with respect to, or
otherwise cooperate in any way with, or assist or participate in, facilitate or
encourage, any Third Party Transaction; provided, however, that nothing
contained in this Agreement shall prohibit the Board from furnishing information
to, or entering into discussions or negotiations with, any person in connection
with an unsolicited proposal by such person with respect to a Third Party
Transaction if, and only to the extent that, (i) such person is, in the good
faith judgment of the Board (or a duly designated committee thereof) after
consultation with its advisors, capable of effecting a Third Party Transaction
which would be more favorable to the stockholders than the Offer and the Merger
taken together, and (ii) prior to furnishing confidential information to such
person the Company obtains from such person an executed confidentiality
agreement on terms no less favorable to the Company than those contained in the
Confidentiality Agreement. The Company shall notify Parent promptly if any such
proposal or offer, or any inquiry or contact with any person with respect
thereto, is made. The Company agrees not to release any third party from, or
waive any provision of, any confidentiality or, subject to the fiduciary duties
of the Board, standstill agreement to which the Company is or may become a
party.
SECTION 6.06. Directors, and Officers, Indemnification and Insurance.
(a) If the Offer is consummated, Parent, Purchaser and the Company shall,
and from and after the Effective Time, Parent and the Surviving Corporation
shall, maintain the rights to indemnification of officers and directors provided
for in the By-laws of the Company as in effect on the date hereof, with respect
to indemnification for acts and omissions occurring prior to the Effective Time,
including, without limitation, the transactions contemplated by this Agreement.
(b) The Company shall, from and after the date of this Agreement and to and
including the Effective Time, and the Surviving Corporation shall, for six (6)
years from the Effective Time, maintain in effect the current directors' and
officers' liability insurance policies maintained by the Company for the persons
presently covered by such policies (provided that the Surviving Corporation may
substitute therefor policies of at least the same coverage and amounts
containing terms and conditions which are no less advantageous to such persons
so long as substitution does not result in gaps or lapses in coverage) with
respect to matters occurring prior to or at the Effective Time; provided,
however, that in no event shall the Surviving Corporation be required to expend
pursuant to this Section 6.06(b) more than an amount per year equal to 110% of
the current annual premiums paid by the Company for such insurance (which
premiums the Company represents and warrants to be approximately $185,000 in the
aggregate) and, in the event the cost of such coverage shall exceed that amount,
the Surviving Corporation shall purchase as much coverage as possible for such
amount.
(c) In the event the Company, the Surviving Corporation or Parent or any of
their respective successors or assigns (i) consolidates with or merges into any
other person and shall not be the continuing or surviving corporation or entity
of such consolidation or merger or (ii) transfers all or substantially all of
its properties and assets to any person, then, and in each such case, proper
provision shall be made so that the successors and assigns of the Company, the
Surviving Corporation or Parent, as the case may be, or at Parent's option,
Parent, shall assume the obligations set forth in this Section 6.06.
- 21 -
<PAGE>
(d) The obligations of the Company or the Surviving Corporation under this
Section 6.06 shall not be terminated or modified in such a manner as to
adversely affect any director, officer, employee, fiduciary and agent to whom
this Section 6.06 applies without the consent of each affected director,
officer, employee, fiduciary and agent (it being expressly agreed that the
directors, officers, employees, fiduciaries and agents to whom this Section 6.06
applies shall be third-party beneficiaries of this Section 6.06).
(e) In the event that the Company or the Surviving Corporation should fail,
at any time from and after the Purchaser's Election Date, to comply with any of
the foregoing obligations set forth in this Section 6.06, for any reason, Parent
shall be responsible therefor and hereby agrees to perform such obligations
unconditionally without regard to any defense or other basis for nonperformance
which the Company or the Surviving Corporation may have or claim (except any
claim that performance is prohibited by applicable Delaware Law), it being the
intention of this Section 6.06 that the officers, directors, employees,
fiduciaries and agents of the Company and its Subsidiaries shall be fully
indemnified and that the provisions of this Section 6.06 be a primary obligation
of Parent and not merely a guarantee by Parent of the obligations of the Company
or the Surviving Corporation.
SECTION 6.07. Notification of Certain Matters. The Company shall give
prompt notice to Parent, and Parent shall give prompt notice to the Company, of
(i) the occurrence, or non-occurrence, of any event the occurrence, or
non-occurrence, of which would be likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate and (ii) any failure of
the Company, Parent or Purchaser, as the case may be, to comply with or satisfy
any covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 6.07 shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
SECTION 6.08. Further Action; Reasonable Best Efforts. Upon the terms and
subject to the conditions hereof, each of the parties hereto shall (i) make
promptly its respective filings, and thereafter make any other required
submissions, under the HSR Act and the Exon-Florio Act with respect to the
Transactions, (ii) subject to the fiduciary duties of the Board, use its
reasonable best efforts to take, or cause to be taken, all appropriate action,
and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
Transactions, including, without limitation, using its reasonable best efforts
to obtain all licenses, permits (including, without limitation, environmental
permits), consents, approvals, authorizations, qualifications and orders of
governmental authorities and parties to contracts with the Company and the
Subsidiaries as are necessary for the consummation of the Transactions and to
fulfill the conditions to the Offer and the Merger and (iii) except as
contemplated by this Agreement, use its reasonable best efforts not to take any
action, or enter into any transaction, which would cause any of its
representations or warranties contained in this Agreement to be untrue or result
in a breach of any covenant made by it in this Agreement. In case at any time
after the Effective Time any further action is necessary or desirable to carry
out the purposes of this Agreement, the proper officers and directors of each
party to this Agreement then in office shall use their reasonable best efforts
to take all such action.
- 22 -
<PAGE>
SECTION 6.09. Benefit Plans. For a period of one year following the
Effective Time, Parent shall cause the Surviving Corporation to provide
employees of the Subsidiaries (excluding for purposes of this Section 6.09
employees covered by collective bargaining agreements) with pension, insurance
and other similar benefits following the Effective Time which are, in the
aggregate, at least as favorable to the employees as the benefits provided for
such employees by the Company as of the date hereof.
SECTION 6.10. Class Action Settlement. The Company shall, as promptly as
practicable, consummate the Stipulation of Settlement dated August 31, 1994
providing for the settlement of certain class actions against the Company and
others (the "Class Action Settlement") by, among other things, the issuance of
564,302 Shares to the claimants therein. If the Company has not issued such
Shares to the claimants entitled thereto within 30 days after the date of this
Agreement, the Company shall promptly seek the leave of all necessary parties to
issue such Shares in escrow pending the distribution of such Shares to the
proper parties.
SECTION 6.11. Public Announcements. Parent and the Company shall consult
with each other before issuing any press release or otherwise making any public
statements with respect to this Agreement or the Transactions and shall not
issue any such press release or make any such public statement prior to such
consultation, except as may be required by law or any listing agreement with a
national securities exchange to which Parent or the Company is a party.
SECTION 6.12. Parent Guarantee. Parent agrees to take all action necessary
to cause Purchaser to perform all of Purchaser's, and the Surviving Corporation
to perform all of the Surviving Corporation's, agreements, covenants and
obligations under this Agreement and to consummate the Offer and the Merger on
the terms and conditions set forth in this Agreement. Parent shall be liable for
any breach of any representation, warranty, covenant or agreement of Purchaser
and for any breach of this covenant.
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. Conditions to the Merger. The respective obligations of each
party to effect the Merger shall be subject to the satisfaction at or prior to
the Effective Time of the following conditions and only the following
conditions:
(a) Stockholder Approval. This Agreement and the Merger shall have been
approved and adopted by the stockholders of the Company to the extent required
by Delaware Law and the Certificate of Incorporation of the Company;
(b) HSR Act. Any waiting period (and any extension thereof) applicable to
the consummation of the Merger under the HSR Act shall have expired or been
terminated;
- 23 -
<PAGE>
(c) Exon-Florio Act. No investigation shall be threatened or pending by the
Committee on Foreign Investment in the United States ("CFIUS") under the
Exon-Florio Act with respect to any of the Transactions;
(d) No Order. No foreign, United States or state governmental authority or
other agency or commission or foreign, United States or state court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
law, rule, regulation, executive order, decree, injunction or other order
(whether temporary, preliminary or permanent) which is then in effect and has
the effect of making the Merger illegal or otherwise preventing or prohibiting
consummation of the Merger; and
(e) Offer. Purchaser or its permitted assignee shall have purchased all
Shares validly tendered and not withdrawn pursuant to the Offer; provided,
however, that neither Parent nor Purchaser shall be entitled to assert the
failure of this condition if, in breach of this Agreement or the terms of the
Offer, Purchaser fails to purchase any Shares validly tendered and not withdrawn
pursuant to the Offer.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination. This Agreement may be terminated and the Merger
and the other Transactions may be abandoned at any time prior to the Effective
Time, notwithstanding any requisite approval and adoption of this Agreement and
the transactions contemplated hereby by the stockholders of the Company:
(a) By mutual written consent duly authorized by the Boards of Directors of
Parent and the Company prior to Purchaser's Election Date; or
(b) By Parent, Purchaser or the Company if (i) the Effective Time shall not
have occurred on or before September 30, 1995, provided, however, that the right
to terminate this Agreement under this Section 8.01(b) 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 of the Effective Time to occur on or
before such date, or (ii) any court or other governmental authority of competent
jurisdiction shall have issued an order, decree, ruling or taken any other
action restraining, enjoining or otherwise prohibiting the Merger and such
order, decree, ruling or other action shall have become final and nonappealable;
or
(c) By Parent if (i) due to an occurrence or circumstance that results in a
failure to satisfy any condition set forth in Annex A hereto, Purchaser shall
have (A) failed to commence the Offer within 10 days following the date of this
Agreement, (B) terminated the Offer without having accepted any Shares for
payment thereunder or (C) failed to pay for Shares pursuant to the Offer within
90 days following the commencement of the Offer, unless any such failure listed
above shall have been caused by or resulted from the failure of Parent or
Purchaser to perform in any material respect any material covenant or
- 24 -
<PAGE>
agreement of either of them contained in this Agreement or the material breach
by Parent or Purchaser of any material representation or warranty of either of
them contained in this Agreement or (ii) prior to the purchase of Shares
pursuant to the Offer, the Board or any committee thereof shall have withdrawn
or modified in a manner adverse to Purchaser or Parent its approval or
recommendation of the Offer, this Agreement, the Merger or any other Transaction
or shall have approved or recommended approval of any Third Party Transaction,
or shall have resolved to do any of the foregoing; or
(d) By the Company, upon approval of the Board, if (i) Purchaser shall have
(A) failed to commence the Offer within 10 days following the date of this
Agreement, (B) terminated the Offer without having accepted any Shares for
payment thereunder or (C) failed to pay for Shares pursuant to the Offer within
90 days following the commencement of the Offer, unless such failure to pay for
Shares shall have been caused by or resulted from the failure of the Company to
satisfy the conditions set forth in paragraphs (f) or (g) of Annex A or (ii)
prior to the purchase of Shares pursuant to the Offer, the Board shall have
withdrawn or modified in a manner adverse to Purchaser or Parent its approval or
recommendation of the Offer, this Agreement, the Merger or any other Transaction
in order to approve any Third Party Transaction which the Board determines in
the exercise of its good faith judgment and after consultation with independent
legal counsel and the Company's financial advisors to be more favorable to the
Company's stockholders than the Offer and the Merger taken together provided,
however, that such termination under this clause (ii) shall not be effective
until the Company has made payment to Parent of the Fee (as hereinafter defined)
required to be paid pursuant to Section 8.03(a) and has deposited with a
mutually acceptable escrow agent $500,000 for reimbursement to Parent and
Purchaser of Expenses (as hereinafter defined).
SECTION 8.02. Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 8.01, this Agreement shall forthwith become
void, and there shall be no liability on the part of any party hereto, except as
set forth in Sections 8.03 and 9.01, and nothing herein shall relieve any party
from liability for any breach hereof.
SECTION 8.03. Fees and Expenses. (a) In the event that this Agreement is
terminated pursuant to Section 8.01(c)(ii) or 8.01(d) (ii); then, in such event,
the Company shall pay Parent promptly (but in no event later than one business
day after the first of such events shall have occurred) a fee of $2,500,000 (the
"Fee"), which amount shall be payable in immediately available funds, plus all
Expenses (as hereinafter defined).
(b) "Expenses" means all out-of-pocket expenses, up to $500,000 in the
aggregate (including, without limitation, fees and expenses payable to all
investment banking firms, other financial institutions, counsel, accountants,
experts and consultants to Parent and Purchaser, and all printing and
advertising expenses), actually incurred or accrued by Parent or Purchaser or on
their behalf in connection with the Transactions, and actually incurred or
accrued by investment banking firms, other financial institutions and other
persons and assumed by Parent and Purchaser in connection with the
- 25 -
<PAGE>
negotiation, preparation, execution and performance of this Agreement, the
structuring of the Transactions and any agreements relating thereto.
(c) Except as set forth in this Section 8.03, all costs and expenses
incurred in connection with this Agreement and the Transactions shall be paid by
the party incurring such expenses, whether or not any Transaction is
consummated.
(d) In the event that the Company shall fail to pay the Fee or any Expenses
when due, the term "Expenses" shall be deemed to include the costs and expenses
actually incurred or accrued by Parent and Purchaser (including, without
limitation, fees and expenses of counsel) in connection with the collection
thereof and enforcement of this Section 8.03, together with interest on such
unpaid Fee and Expenses, commencing on the date that the Fee or such Expenses
became due, at a rate per annum equal to the rate of interest publicly announced
by Citibank, N.A., from time to time, in the City of New York, as such bank's
Prime Rate plus 3.00%.
(e) "Third Party Transaction" means any of the following: (i) the
acquisition of the Company by merger, consolidation or other business
combination transaction by any person other than Parent, Purchaser or any
affiliate thereof (a "Third Party"); (ii) the acquisition by any Third Party of
50% or more of the outstanding stock or all or a substantial part (other than in
the ordinary course of business) of the assets of a Material Subsidiary; (iii)
the acquisition by a Third Party of 50% or more of the outstanding Shares,
whether by tender offer, exchange offer or otherwise; (iv) the adoption by the
Company of a plan of liquidation or the declaration or payment of an
extraordinary dividend; or (v) the repurchase by the Company or any of its
Subsidiaries of 50% or more of the outstanding Shares.
SECTION 8.04. Amendment. Subject to the limitations set forth in Section
6.03(c), this Agreement may be amended by the parties hereto by action taken by
or on behalf of their respective Boards of Directors at any time prior to the
Effective Time; provided, however, that no amendment may be made which (i)
reduces the amount or changes the type of consideration into which each Share
and each Preferred Share shall be converted upon consummation of the Merger,
(ii) imposes conditions to the Merger in addition to those set forth in Section
7.01 or (iii) would otherwise amend or change the terms and conditions of the
Merger in any manner materially adverse to the holders of Shares. This Agreement
may not be amended except by an instrument in writing signed by the parties
hereto.
SECTION 8.05. Waiver. Subject to the limitations set forth in Section
6.03(c), at any time prior to the Effective Time, any party hereto may (i)
extend the time for the performance of any obligation or other act of any other
party hereto, (ii) waive any inaccuracy in the representations and warranties
contained herein or in any document delivered pursuant hereto and (iii) waive
compliance with any agreement or condition contained herein. Any such extension
or waiver shall be valid if set forth in an instrument in writing signed by the
party or parties to be bound thereby.
- 26 -
<PAGE>
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations, Warranties and Agreements.
The representations, warranties and agreements in this Agreement shall terminate
at the Effective Time or upon the termination of this Agreement pursuant to
Section 8.01, as the case may be, except that (i) the representations and
warranties of the Company set forth in Article III shall terminate upon the
purchase by Purchaser of Shares pursuant to the Offer, (ii) the agreements set
forth in Articles II and IX and Sections 6.06 and 6.09 shall survive the
Effective Time indefinitely and (iii) the agreements set forth in Sections
6.04(c) and 8.03 and Article IX shall survive termination indefinitely.
SECTION 9.02. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by cable,
telecopy, facsimile, telegram or telex or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 9.02):
if to Parent or Purchaser:
FKI plc
West House
King Cross Road
Halifax, West Yorkshire HX1 1EB
England
Facsimile No. (011) 44-422-330-407
Attention: Company Secretary
ADU Acquisition Inc.
c/o FKI Industries Inc.
425 Post Road
Fairfield, CT 06430-0970
Facsimile No. (203) 255-7101
Attention: General Counsel
- 27 -
<PAGE>
with a copy to:
Parson & Brown
230 Park Avenue
New York, NY 10169
Facsimile No. (212) 682-9112
Attention: James H. Bell, Esq.
if to the Company:
Amdura Corporation
900 Main Street, South
Suite 2A, Building B
PO Box 870
Southbury, CT 06488-0870
Facsimile No. (203) 262-1270
Attention: President
with a copy to:
Kirkpatrick & Lockhart
1500 Oliver Building
Pittsburgh, PA 15222
Facsimile No.: (412) 355-6501
Attention: Ronald D. West, Esq.
SECTION 9.03. Certain Definitions. For purposes of this Agreement, the
term:
(a) "affiliate" of a specified person means a person who directly or
indirectly through one or more intermediaries controls, is
controlled by, or is under common control with, such specified person;
(b) "beneficial owner" with respect to any Shares means a person who shall
be deemed to be the beneficial owner of such Shares (i) which such person or any
of its affiliates or associates (as such term is defined in Rule 12b-2
promulgated under the Exchange Act) beneficially owns, directly or indirectly,
(ii) which such person or any of its affiliates or associates has, directly or
indirectly, (A) the right to acquire (whether such right is exercisable
immediately or subject only to the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of consideration rights,
exchange rights, warrants or options, or otherwise, or (B) the right to vote
pursuant to any agreement, arrangement or understanding or (iii) which are
beneficially owned, directly or indirectly, by any other persons with whom such
person or any of its affiliates or associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of any
Shares;
- 28 -
<PAGE>
(c) "business day" means any day on which the principal offices of the SEC
in Washington, D.C. are open to accept filings, or, in the case of determining a
date when any payment is due, any day on which banks are not required or
authorized to close in the City of New York;
(d) "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting securities, as
trustee or executor, by contract or credit arrangement or otherwise;
(e) "person" means an individual, corporation, partnership, limited
partnership, syndicate, person (including, without limitation, a "person" as
defined in Section 13(d)(3) of the Exchange Act), trust, association or entity
or government, political subdivision, agency or instrumentality of a government;
and
(f) "subsidiary" or "subsidiaries" of the Company, the Surviving
Corporation, Parent or any other person means an affiliate controlled by such
person, directly or indirectly, through one or more intermediaries.
SECTION 9.04. 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 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,
subject to Section 1.02(d), 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 Transactions be consummated as
originally contemplated to the fullest extent possible.
SECTION 9.05. Entire Agreement; Assignment. This Agreement constitutes the
entire agreement among the parties with respect to the subject matter hereof and
supersedes, except as set forth in Section 6.04(c), all prior agreements and
undertakings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof. This Agreement shall not be assigned by
operation of law or otherwise, except that Parent and Purchaser may assign all
or any of Purchaser's rights and obligations hereunder to any wholly-owned
subsidiary of Parent provided that no such assignment shall relieve the
assigning party of its obligations hereunder if such assignee does not perform
such obligations.
SECTION 9.06. Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and 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, other than Section 6.06 (which is intended to be for the benefit of
the persons covered thereby and may be enforced by such persons).
- 29 -
<PAGE>
SECTION 9.07. 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 equity.
SECTION 9.08. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed in that State.
SECTION 9.09. 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 9.10. Counterparts. This Agreement may be executed in one or 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, Parent, Purchaser and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
FKI PLC
By /s/ Steven D. Jones
-------------------------
Name:
Title:
ADU ACQUISITION INC.
Attest:
/s/ Albert A. Byer By /s/ Steven D. Jones
---------------------------------------- --------------------------
Name:
Title:
AMDURA CORPORATION
Attest:
/s/ Frederick Whitridge, Jr. By /s/ James Bach
--------------------------------------- ------------------------
Name:
Title:
- 30 -
<PAGE>
ANNEX A
Conditions to the Offer
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment or pay for any Shares tendered pursuant to the
Offer, and may terminate or amend the Offer and may postpone the acceptance for
payment of and payment for Shares tendered, if (i) the Minimum Condition shall
not have been satisfied, (ii) any applicable waiting period under the HSR Act
shall not have expired or been terminated prior to the expiration of the Offer
and the Offer shall have remained outstanding for at least 30 days from the
commencement of the Offer, (iii) (x) the review period under the Exon-Florio Act
during which the President of the United States or his designee may commence an
investigation of the Offer, the Merger or the other transactions contemplated by
the Agreement shall not have expired or otherwise been terminated without such
investigation having been commenced or (y) such investigation shall have been
commenced and (I) the period under the Exon-Florio Act during which such
investigation must be completed shall not have expired or otherwise been
terminated or Purchaser shall not have received notice that such investigation
has been completed and (II) (A) the period under the Exon-Florio Act during
which the President may announce his decision to take action to suspend,
prohibit or place any limitations on the Offer, the Merger or the other
transactions contemplated by the Agreement shall not have expired or otherwise
been terminated without any such action being threatened, announced or taken or
(B) the President shall not have announced a decision to take any such action,
in each case, prior to the expiration to the Offer and the Offer shall have
remained outstanding for at least 30 days from the commencement of the Offer, or
(iv) at any time on or after the date of this Agreement, and prior to the
acceptance for payment of Shares, any of the following conditions shall exist:
(a) there shall have been instituted or be pending any action or proceeding
brought by any governmental, administrative or regulatory authority or agency,
domestic or foreign, before any court or governmental, administrative or
regulatory authority or agency, domestic or foreign, (i) challenging or seeking
to make illegal, or to restrain or prohibit or make materially more costly the
making of the Offer, the acceptance for payment of, or payment for, any Shares
by Parent, Purchaser or any other affiliate of Parent pursuant to the Offer, or
the consummation of any other Transaction, or seeking to obtain material damages
in connection with any Transaction; (ii) seeking to prohibit or limit materially
the ownership or operation by the Company, Parent or any of their subsidiaries
of all or any material portion of the business or assets of the Company, Parent
or any of their subsidiaries, or to compel the Company, Parent or any of their
subsidiaries to dispose of or hold separate all or any material portion of the
business or assets of the Company, Parent or any of their subsidiaries, in each
case as a result of the Transactions; (iii) seeking to impose material
limitations on the ability of Parent, Purchaser or any other affiliate of Parent
to exercise effectively full rights of ownership of any Shares, including,
without limitation, the right to vote any Shares acquired by Purchaser pursuant
to the Offer or otherwise on all matters properly presented to the Company's
stockholders, including, without limitation, the approval and adoption of this
Agreement and the Merger; or (iv) seeking to require divestiture by Parent,
Purchaser or any other affiliate of Parent of any Shares;
<PAGE>
A-2
(b) there shall have been issued any injunction, order or decree by any
court or governmental, administrative or regulatory authority or agency,
domestic or foreign, resulting from any action or proceeding brought by any
person other than any governmental, administrative or regulatory authority or
agency, domestic or foreign, which (i) restrains or prohibits the making of the
Offer or the consummation of any other Transaction; (ii) prohibits or limits
materially the ownership or operation by the Company, Parent or Purchaser of all
or any material portion of the business or assets of the Company, Parent or any
of their subsidiaries, or compels the Company, Parent or any of their
subsidiaries to dispose of or hold separate all or any material portion of the
business or assets of the Company, Parent or any of their subsidiaries, in each
case as a result of the Transactions; (iii) imposes material limitations on the
ability of Parent or Purchaser to exercise effectively full rights of ownership
of any Shares, including, without limitation, the right to vote any Shares
acquired by Purchaser pursuant to the Offer, or otherwise on all matters
properly presented to the Company's stockholders, including, without limitation,
the approval and adoption of this Agreement and the Merger; or (iv) requires
divestiture by Parent or Purchaser of any Shares;
(c) there shall have been any action taken, or any statute, rule,
regulation, order or injunction enacted, entered, enforced, promulgated,
amended, issued or deemed applicable to (i) Parent, the Company or any
subsidiary or affiliate of Parent or the Company or (ii) any Transaction, by any
legislative body, court, government or governmental, administrative or
regulatory authority or agency, domestic or foreign, in the case of both (i) and
(ii) other than the routine application of the waiting period provisions of the
HSR Act to the Offer, the Stockholders Agreement or the Merger, in each case
which results in any of the consequences referred to in clauses (i) through (iv)
of paragraph (b) above;
(d) there shall have occurred (i) any general suspension of, or limitation
on prices for, trading in securities on the New York Stock Exchange or on the
London Stock Exchange, (ii) any decline, measured from the date hereof, in the
Standard & Poor's 500 Index or FTSE 100 Index by an amount in excess of 20% from
the date hereof, (iii) a currency moratorium on the exchange markets in London
or New York City, (iv) a declaration of a banking moratorium or any suspension
of payments in respect of banks in the United States or the United Kingdom, (v)
any limitation (whether or not mandatory) by any government or governmental,
administrative or regulatory authority or agency, domestic or foreign, on the
extension of credit by banks or other lending institutions in the United States
or the United Kingdom, (vi) a commencement of a war or armed hostilities or
other national or international calamity involving the United States or the
United Kingdom or (vii) in the case of any of the foregoing existing on the date
hereof, a material acceleration or worsening thereof;
(e) (i) it shall have been publicly disclosed or Purchaser shall have
otherwise learned that beneficial ownership (determined for the purposes of this
paragraph as set forth in Rule 13d-3 promulgated under the Exchange Act) of 15%
<PAGE>
A-3
or more of the then outstanding Shares has been acquired by any person, other
than Parent or any of its affiliates, or (ii) (A) the Board shall have withdrawn
or modified in a manner adverse to Parent or Purchaser the approval or
recommendation of the Offer, the Merger or this Agreement or approved or
recommended any takeover proposal or any other acquisition of Shares other than
the Offer and the Merger or (B) the Board shall have resolved to do any of the
foregoing;
(f) any material representation and warranty of the Company in this
Agreement shall prove to be untrue or incorrect in any material respect as of
the date of this Agreement;
(g) the Company shall have failed to perform in any material respect any
material obligation or to comply in any material respect with any material
agreement or covenant of the Company to be performed or complied with by it
under this Agreement;
(h) this Agreement shall have been terminated in accordance with its terms;
or
(i) Purchaser and the Company shall have agreed that Purchaser shall
terminate the Offer or postpone the acceptance for payment of or payment for
Shares thereunder;
which in the judgment of Parent makes it inadvisable to proceed with the Offer
or with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Purchaser and Parent
and may be asserted by Purchaser or Parent regardless of the circumstances
giving rise to any such condition or may be waived by Purchaser or Parent in
whole or in part at any time and from time to time in their sole discretion. The
failure by Parent or Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right; the waiver of any such
right with respect to particular facts and other circumstances shall not be
deemed a waiver with respect to any other facts and circumstances; and each such
right shall be deemed an ongoing right that may be asserted at any time and from
time to time.
<PAGE>
<TABLE>
<CAPTION>
Schedule 3.01
SUBSIDIARIES
Jurisdiction of Percent
Name of Subsidiary Incorporation Owner Owned
------------------ ---------------- --------- ---------
<S> <C> <C> <C>
The Crosby Group, Inc. Delaware Amdura Corporation 100%
Crosby Europe, N.V. Belgium The Crosby Group, Inc. 100%
Crosby Canada, Ltd. Canada The Crosby Group, Inc. 100%
Crosby France SARL France The Crosby Group, Inc. 25%
Crosby Europe N.V. 75%
Crosby Europe (UK) Ltd. United Kingdom Crosby Canada Ltd. 100%
The Harris Waste Management
Group, Inc. Delaware Amdura Corporation 100%
</TABLE>
Equity Interests in Joint Ventures. The Crosby Group, Inc. has a 50 percent
interest in Crosby Yutaka Engineering Company, Ltd (Japan), which is inactive.
<PAGE>
Schedule 3.03
COMMITMENTS AND ENCUMBRANCES
A. Commitments to issue securities or make investments:
Options Exercisable
-------------------------------------------
Strike Number
Price of Shares
---------- -----------
$ 1.625 755,000
1.875 135,000
1.970 1,113,824
2.250 757,500
3.000 175,000
Total 2,936,324
B. Encumbrances affecting shares of Subsidiaries:
Please refer to Sanwa loan, pledge and security agreements.
<PAGE>
Schedule 3.05
BREACHES OR DEFAULTS
A. According to paragraph 7 (h) of the Parent Guaranty related to the Loan
Agreements among The Crosby Group, Inc., The Harris Waste Management
Group, Inc., as Borrowers, the Lenders named therein and Sanwa Business
Credit Corporation, as Agent, "Except with the consent of the Required
Lenders, which consent shall not be unreasonably withheld, the
Guarantor shall not merge or consolidate with, purchase, lease or
otherwise acquire all or substantially all of the assets or properties
of, or acquire any capital stock, equity interests, debt or other
securities of, any other Person (whether through an Acquisition or
otherwise) except that any Subsidiary may merge or consolidate with or
into the Guarantor; provide that the Guarantor is the Surviving Person.
The Guarantor shall not dissolve, liquidate, enter into any joint
venture or become a partner in any partnership."
B. According to the Loan Agreement among The Crosby Group, Inc., as
Borrower, the Lenders named therein and Sanwa Business Credit
Corporation, as Agent, Event of Default(s) is defined as "the
occurrence of any 'Default' or 'Event of Default' as defined in the
Harris Loan Agreement or any default of breach under the Parent
Guaranty.
C. According to the Loan Agreement among The Harris Waste Management
Group, Inc., as Borrower, the Lenders named therein and Sanwa Business
Credit Corporation, as Agent, Event of Default(s) is defined as "the
occurrence of any 'Default' or 'Event of Default' as defined in the
Crosby Loan Agreement or any default of breach under the Parent
Guaranty.
<PAGE>
Schedule 3.06
COMPLIANCE
NOT APPLICABLE
<PAGE>
Schedule 3.07
UNDISCLOSED LIABILITIES
NONE
<PAGE>
Schedule 3.08
ABSENCE OF CERTAIN CHANGES OR EVENTS
A. Subsequent to December 31, 1994, options related to 755,000 SHARES were
granted pursuant to the 1992 Stock Option Plan.
B. See Schedule 5.01.
<PAGE>
Schedule 3.09
ABSENCE OF LITIGATION
A. Reference is made to the attached letters to Arthur Andersen LLP, Amdura's
independent public accountants, from Amdura's attorneys, Kirkpatrick &
Lockhart (letter dated February 10, 1995), Thompson & Knight (letter dated
February 17, 1995) and Robins, Kaplan, Miller & Ciresi (letter dated
February 15, 1995).
B. The following two matters, which Amdura believes will not have a material
adverse affect on its financial condition or results of operations, have
arisen since December 31, 1994:
1. On January 26, 1995, Castillo v. The Crosby Group, a product liability
complaint, was filed. Crosby is currently investigating the
circumstances surrounding the complaint.
2. In a letter dated March 1, 1995, Modern Supply Co., owner of certain
real estate in Tulsa, Oklahoma adjoining property owned by Crosby,
alleges that Crosby is responsible for chlorides detected in ground
water. The letter requests a response concerning alleged impairment to
the value of the property. Crosby is currently investigating the
matter.
<PAGE>
Schedule 3.12
ENVIRONMENTAL MATTERS
NONE
<PAGE>
Schedule 5.01
The terms and conditions of payment under the Supplemental Severance Plan
("Plan") have been amended by the Compensation Committee and the Board of Amdura
Corporation as follows:
(i) "Base Salary" is defined as the annual salary at the time of a defined
Change in Control.
(ii) Subsequent to a defined Change of Control, after 90 days of continuous
employment, a lump sum payment of the Base Salary is immediately due and
payable, net of applicable taxes, to J. Bach and D. Bushley. If the
employee quits prior to the 90th day, no lump sum payment is due.
(iii) If the employee is terminated without Cause prior to the 90th day, a
payment of 1/2 times Base Salary is immediately due to J. Bach, and 2
times base salary to D. Bushley. Employee benefit continuance for 18 and
24 months, respectively, will be provided by Purchaser.
(iv) If the employee is terminated without Cause after the 90th day and until
the end of the second year after Closing, a lump sum payment is
immediately due and payable to J. Bach of 6 months of the then current
salary and to D. Bushley of 12 months of the then current salary.
Employee benefit continuance by Purchaser for the respective 6 and 12
month period will be provided. At the end of the two year period a new
severance and/or employee agreement will be negotiated on terms no less
favorable than similarly situated executives.
(v) "Termination" is defined as any substantial change in the current
duties, responsibilities, reporting relationships,* place of employment,
or salary and benefits.
_____________
* Reporting to the applicable Group President shall not constitute a
substantial change in reporting relationship.
<PAGE>
Exhibit (c)(2)
STOCKHOLDERS AGREEMENT, dated as of March 15, 1995 (this
"Agreement"), between ADU ACQUISITION INC., a Delaware corporation ("Purchaser")
and an indirect wholly-owned subsidiary of FKI plc, a company organized under
the laws of England ("Parent"), and the persons listed on Schedule A hereto
(each, individually, a "Stockholder" and, collectively, the "Stockholders").
WHEREAS, Parent and Purchaser have entered into an Agreement
and Plan of Merger, dated as of the date hereof (the "Merger Agreement";
capitalized terms not defined in this Agreement have the meanings ascribed to
them in the Merger Agreement), with Amdura Corporation, a Delaware corporation
(the "Company"), which provides, among other things, upon the terms and subject
to the conditions thereof, for the acquisition by Purchaser of all the
outstanding shares of Common Stock, par value $.01 per share, of the Company
("Company Common Stock") through (a) a tender offer (the "Offer") for all shares
of Company Common stock for the Per Share Amount (as defined in the Merger
Agreement) and (b) a second-step merger pursuant to which Purchaser will merge
with and into the Company (the "Merger") and all outstanding shares of Company
Common Stock (other than shares of Company Common Stock held by Purchaser or
Parent or any direct or indirect wholly-owned subsidiary of Parent or the
Company and shares of Company Common Stock held in the treasury of the Company)
will be converted into the right to receive the Per Share Amount in cash; and
WHEREAS, as of the date hereof, each Stockholder owns
(beneficially or of record) the number of shares of Company Common Stock set
forth opposite such Stockholder's name on Schedule A hereto; and
WHEREAS, as a condition to the willingness of Parent and
Purchaser to enter into the Merger Agreement, Parent and Purchaser have required
that the Stockholders agree, and in order to induce Parent and Purchaser to
enter into the Merger Agreement, the Stockholders have agreed, severally and not
jointly, to tender pursuant to the Offer, in accordance with the terms of this
Agreement, all the shares of the Company Common Stock now owned (beneficially or
of record) and which may hereafter be acquired by each Stockholder (the
"Shares").
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 hereby agree as follows:
ARTICLE I
REPRESENTATIONS AND COVENANTS OF THE STOCKHOLDERS
SECTION 1.01. Authority Relative to this Agreement. Each
Stockholder represents and warrants to Purchaser, severally and not jointly,
that such Stockholder has all necessary power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby; that the execution and delivery of
<PAGE>
this Agreement by such Stockholder and the consummation by such Stockholder of
the transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action; that this Agreement has been duly and validly
executed and delivered by such Stockholder and, assuming the due authorization,
execution and delivery by Purchaser, constitutes a legal, valid and binding
obligation of such Stockholder, except to the extent such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting generally the enforcement of creditors' rights and
by the availability of equitable remedies; that the execution and delivery of
this Agreement by such Stockholder does not, and the performance of this
Agreement by such Stockholder will not conflict with or violate the Certificate
of Incorporation or By-laws of such Stockholder or conflict with or violate any
law, rule, regulation, order, judgment or decree applicable to such Stockholder
or by which any property or asset of such Stockholder is bound or affected or
require any consent, approval, authorization or permit of, or filing with, or
notification to, any governmental or regulatory authority, domestic or foreign,
to be obtained or made by such Stockholder except for applicable requirements,
if any, of the Exchange Act.
SECTION 1.02. Title to Shares. Each Stockholder hereby
represents and warrants, severally and not jointly, that it is the beneficial
owner of the number of Shares set forth opposite such Stockholder's name on
Schedule A, that such Shares are owned by it free and clear of all liens,
encumbrances and restrictions whatsoever and that such Stockholder has not
granted any proxy with respect to such Shares which is currently in effect.
SECTION 1.03. No Disposition or Encumbrance of Shares. Except
as contemplated by Section 1.04 hereof, each Stockholder hereby covenants and
agrees, severally and not jointly, that such Stockholder 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 such
Stockholder's voting rights, charge or other encumbrance of any nature
whatsoever with respect to the Shares now owned or that may hereafter be
acquired by such Stockholder at any time prior to the termination of this
Agreement as to such Stockholder.
SECTION 1.04. No Solicitation of Transactions. Subject to the
fiduciary duties as a director of the Company of any representative or agent of
any Stockholder who is such a director as contemplated in Section 6.05 of the
Merger Agreement, each Stockholder shall not, directly or indirectly, through
any agent or representative or otherwise, solicit, initiate or encourage the
submission of any proposal or offer from any person relating to, participate in
any negotiations regarding, or furnish to any other person any information with
respect to, or otherwise cooperate in any way with, or assist or participate in,
facilitate or encourage, any Third Party Transaction at any time prior to the
termination of this Agreement as to such Stockholder.
SECTION 1.05. Agreement to Tender the Shares Pursuant to the
Offer. Each Stockholder agrees to validly tender and not withdraw pursuant to
the Offer all the Shares now owned (beneficially or of record) or that may
hereafter be acquired by such Stockholder. Notwithstanding the foregoing, such
Stockholder may withdraw such Shares from the Offer in the event that the Board
shall have withdrawn or modified in a manner adverse to Purchaser or Parent
-2-
<PAGE>
its approval or recommendation of the Offer, the Merger, the Merger Agreement or
any other Transaction in order to approve any Third Party Transaction which the
Board determines in the exercise of its good faith judgment and after
consultation with independent legal counsel and the Company's financial advisors
to be more favorable to the Company's stockholders than the Offer and the Merger
taken together.
SECTION 1.06. Filings and Announcements. Purchaser agrees to
provide to each Stockholder an advance copy of and an opportunity to comment on
those portions of each public announcement by Purchaser or Parent and each
document filed with the SEC or distributed to Stockholders pursuant to the
Exchange Act by Purchaser or Parent in connection with the Offer or the Merger
which refer to such Stockholder or this Agreement.
ARTICLE II
MISCELLANEOUS
SECTION 2.01. Indemnification. From and after the date hereof,
Parent and Purchaser (the "Indemnifying Parties") jointly and severally shall
indemnify and hold harmless each of the Stockholders (collectively the
"Indemnified Parties" and individually an "Indemnified Party") against any loss,
damage or expense (including reasonable attorney's fees and disbursements)
actually incurred by any such Indemnified Party to the extent arising from any
Company stockholders or third party claim, suit or demand in connection with
this Agreement or the Transactions (a "Third Party Claim"). For purposes of this
Section 2.01, a Third Party Claim shall expressly exclude any claim, suit or
demand brought or instituted by any partner, investor, stockholder or affiliate
of any Indemnified Party.
The Indemnified Parties shall give the Indemnifying Parties
prompt written notice of any Third Party Claim which they believe will give rise
to indemnification under this Section 2.01; provided, however, that the failure
to give such notice, shall not affect the liability of the Indemnifying Parties
hereunder unless and to the extent the failure to give such notice adversely
affects the ability of the Indemnifying Parties to defend themselves or to
mitigate the damages sought in such Third Party Claim. Except as hereinafter
provided, the Indemnifying Parties shall have the right to defend and to direct
the defense against any such Third Party Claim in its name or in the name of any
Indemnified Party at the Indemnifying Parties' expense and with counsel selected
by agreement of the Indemnified Parties, and reasonably acceptable to Parent,
which shall be the only counsel for the Indemnified Parties, and only the
Indemnifying Parties will have the right to settle or compromise any such Third
Party Claim; provided, however, that (i) the Indemnifying Parties shall only be
responsible for the first $50,000 in fees and disbursements of such counsel in
defending the Indemnified Parties in any such Third Party Claim and the
Indemnified Parties shall be responsible for such legal fees and disbursements
in excess of $50,000, and (ii) the Indemnifying Parties will not, without the
Indemnified Parties' written consent, settle or compromise any claim or consent
to any entry of judgment which does not include as an unconditional term thereof
the giving by the claimant or the plaintiff to the Indemnified Parties a release
from all liability in respect of such Third Party Claim. The Indemnified
-3-
<PAGE>
Parties shall cooperate in the defense of any such Third Party Claim. If the
Indemnifying Parties, within a reasonable time after notice of a Third Party
Claim, fail to defend the Indemnified Parties, the Indemnified Parties shall be
entitled to undertake the defense, compromise or settlement of such Third Party
Claim at the expense of (subject to the limitations set forth herein) and for
the account and risk of the Indemnifying Parties subject to the rights of the
Indemnifying Parties to assume the defense of such Third Party Claim at any time
prior to the settlement, compromise or final determination thereof.
Notwithstanding anything contained in this Section 2.01, any
Indemnified Party may engage counsel of its own choice; provided, however, that
all of the fees and disbursements of such counsel shall be the sole
responsibility of such Indemnified Party.
SECTION 2.02. Expenses. Except as otherwise provided herein,
all costs and expenses incurred in connection with the transactions contemplated
by this Agreement shall be paid by the party incurring such expenses.
SECTION 2.03. Further Assurances. Each Stockholder and
Purchaser will execute and deliver all such further documents and instruments
and take all such further action as may be necessary in order to consummate the
transactions contemplated hereby.
SECTION 2.04. 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 2.05. Entire Agreement. This Agreement constitutes the
entire agreement between Purchaser and the Stockholders with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
both written and oral, between Purchaser and each Stockholder with respect to
the subject matter hereof.
SECTION 2.06. Assignment. This Agreement shall not be assigned
by operation of law or otherwise (other than by will or the laws of descent and
distribution), except the Purchaser may assign all or any of its rights and
obligations hereunder to any wholly-owned subsidiary of Parent, provided that no
such assignment shall relieve Purchaser of its obligations hereunder if such
assignee does not perform such obligations.
SECTION 2.07. Parties in Interest. This Agreement shall be
binding upon, inure solely to the benefit of, and be enforceable by, the parties
hereto and their 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 2.08. Amendment; Waiver. This Agreement may not be
amended except by an instrument in writing signed by the parties hereto. Any
party hereto may (i) extend the time for the performance of any obligation or
other act of any other party hereto, (ii) waive any inaccuracy in the
-4-
<PAGE>
representations and warranties contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any agreement or condition
contained herein. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the party or parties to be bound thereby.
SECTION 2.09. 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 2.10. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person, by
cable, telecopy, telegram or telex or by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties at the following
addresses (or at such other address for a party as shall be specified in a
notice given in accordance with this Section 2.10):
if to Purchaser:
ADU Acquisition Inc.
c/o FKI Industries Inc.
425 Post Road
Fairfield, CT 06430-0970
Facsimile No. (203) 255-7101
Attention: General Counsel
with copies to:
FKI plc
West House
King Cross Road
Halifax, West Yorkshire HX1 1EB
England
Facsimile No. (011) 44-422-330-407
Attention: Company Secretary
and
-5-
<PAGE>
Parson & Brown
230 Park Avenue
New York, NY 10169
Facsimile No. (212) 682-9112/9113
Attention: James H. Bell, Esq.
if to a Stockholder:
to its address set forth on Schedule A hereto.
SECTION 2.11. Termination. This Agreement shall terminate upon
the termination of the Merger Agreement. Any Stockholder may terminate this
Agreement as to itself if (a) the Merger Agreement shall have been amended in
any way which adversely affects such Stockholder, (b) the Offer shall not have
been commenced within 10 Business Days after the date of this Agreement or (c)
such Stockholder's Shares shall not have been accepted for payment and paid for
within 90 days after the date of this Agreement.
SECTION 2.12. Fees and Expenses of Counsel. Purchaser agrees
to pay the reasonable fees and expenses of legal counsel retained by any
Stockholder in any action brought to enforce its rights hereunder to the extent
that such action is successful on the merits.
SECTION 2.13. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware
applicable to contracts executed in and to be performed in that State.
SECTION 2.14. 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 2.15. Counterparts. This Agreement may be executed in
one or 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.
-6-
<PAGE>
IN WITNESS WHEREOF, Purchaser has caused this Agreement to be
executed by its officer thereunto duly authorized and each Stockholder has duly
executed this Agreement, each as of the date first written above.
ADU ACQUISITION INC.
By: /s/ Steven D. Jones
----------------------------------------
Name:
Title:
THE STOCKHOLDERS: THE INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION
By: /s/ Tracey L. Rudd
----------------------------------------
Name:
Title:
ORCAS LIMITED PARTNERSHIP
By: Archipelago Corp., Its General Partner
By: /s/ Frederick W. Whitridge, Jr.
----------------------------------------
Name:
Title:
THE NETWORK COMPANY II LIMITED
By: /s/ John W. Gildea
-----------------------------------------
Name:
Title:
INVESTORS TRADING AB
By: /s/ Anders Rydin
-----------------------------------------
Name:
Title:
-7-
<PAGE>
SCHEDULE A
Name and Address Shares
- ------------------ ------------
Internationale Nederlanden (U.S.)
Capital Corporation 4,641,535
135 East 57th Street
New York, New York 10021
Attention: Tracey L. Rudd
Orcas Limited Partnership 5,149,582
270 Greenwich Avenue
Greenwich, Connecticut 06830
Attention: Frederick W. Whitridge, Jr.
The Network Company II Limited 1,710,083
c/o Gildea Carlson Investment Management
675 Third Avenue, 22nd Floor
New York, New York 10017
Attention: John W. Gildea
Investors Trading AB 4,909,451
Arsenalsgatan 8C
S-103 32
Stockholm, Sweden
Attention: Anders Rydin
-8-
<PAGE>
Exhibit (c)(3)
SUPPLEMENTAL STOCKHOLDERS AGREEMENT, dated as of March 15,
1995 (this "Agreement"), between ADU ACQUISITION INC., a Delaware corporation
("Purchaser") and an indirect wholly-owned subsidiary of FKI plc, a company
organized under the laws of England ("Parent"), and the persons listed on
Schedule A hereto (each, individually, a "Stockholder" and, collectively, the
"Stockholders").
WHEREAS, Parent and Purchaser have entered into an Agreement
and Plan of Merger, dated as of the date hereof (the "Merger Agreement";
capitalized terms not defined in this Agreement have the meanings ascribed to
them in the Merger Agreement), with Amdura Corporation, a Delaware corporation
(the "Company"), which provides, among other things, upon the terms and subject
to the conditions thereof, for the acquisition by Purchaser of all the
outstanding shares of Common Stock, par value $.01 per share, of the Company
("Company Common Stock") through (a) a tender offer (the "Offer") for all shares
of Company Common Stock for the "Per Share Amount" (as defined in the Merger
Agreement) and (b) a second-step merger pursuant to which Purchaser will merge
with and into the Company (the "Merger") and all outstanding shares of Company
Common Stock (other than shares of Company Common Stock held by Purchaser or
Parent or any direct or indirect wholly-owned subsidiary of Parent or the
Company and shares of Company Common Stock held in the treasury of the Company)
will be converted into the right to receive the Per Share Amount in cash; and
WHEREAS, as of the date hereof, each Stockholder owns
(beneficially or of record) the number of shares of Company Common Stock set
forth opposite such Stockholder's name on Schedule A hereto; and
WHEREAS, Purchaser and each Stockholder have entered into a
Stockholders Agreement, dated the date hereof (the "Stockholders Agreement");
and
WHEREAS, as a condition to the willingness of Parent and
Purchaser to enter into the Merger Agreement, Parent and Purchaser have required
that the Stockholders agree, and in order to induce Parent and Purchaser to
enter into the Merger Agreement, each Stockholder has agreed, severally and not
jointly, to compensate Purchaser in the event that such Stockholder does not
tender pursuant to the Offer, in accordance with the terms of the Stockholders
Agreement, all the shares of the Company Common Stock now owned (beneficially
or of record) and which may hereafter be acquired by each Stockholder (the
"Shares").
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 hereby agree as follows:
<PAGE>
ARTICLE
REPRESENTATIONS AND COVENANTS OF THE STOCKHOLDERS
SECTION 1.01. Authority Relative to this Agreement. Each
Stockholder represents and warrants to Purchaser, severally and not jointly,
that such Stockholder has all necessary power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby; that the execution and delivery of this
Agreement by such Stockholder and the consummation by such Stockholder of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action; that this Agreement has been duly and validly
executed and delivered by such Stockholder and, assuming the due authorization,
execution and delivery by Purchaser, constitutes a legal, valid and binding
obligation of such Stockholder, except to the extent such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting generally the enforcement of creditors' rights and
by the availability of equitable remedies; that the execution and delivery of
this Agreement by such Stockholder does not, and the performance of this
Agreement by such Stockholder will not conflict with or violate the Certificate
of Incorporation or By-laws of such Stockholder or conflict with or violate any
law, rule, regulation, order, judgment or decree applicable to such Stockholder
or by which any property or asset of such Stockholder is bound or affected or
require any consent, approval, authorization or permit of, or filing with, or
notification to, any governmental or regulatory authority, domestic or foreign,
to be obtained or made by such Stockholder except for applicable requirements,
if any, of the Exchange Act.
SECTION 1.02. Fee. If the Offer is terminated because of the
failure of any condition thereof and a Third Party Transaction is consummated
within 180 days thereafter, then each Stockholder shall pay Purchaser a fee
equal to: (a) if any Shares of such Stockholder were sold, exchanged, disposed
of or cancelled in the Third Party Transaction, 50% of the excess, if any, of
(i) the consideration per Share received by such Stockholder for the Shares so
sold, exchanged, disposed of or cancelled over (ii) the Per Share Amount,
multiplied by the number of Shares so sold, exchanged, disposed of or cancelled,
and (b) if no Shares of such Stockholder were sold, exchanged, disposed of or
cancelled in the Third Party Transaction but such Stockholder received a
distribution in respect of its Shares as a result of the Third Party
Transaction, 50% of the excess, if any, of (i) the amount per Share distributed
to such Stockholder divided by the percentage of the consolidated total assets
of the Company disposed of in the Third Party Transaction over (ii) the Per
Share Amount, multiplied by the percentage of the consolidated total assets of
the Company disposed of in the Third Party Transaction and then by the number of
Shares then owned by such Stockholder. Such fee shall be paid to Purchaser
promptly (but in no event later than one business day) after such Stockholder's
receipt of the consideration or distribution.
-2-
<PAGE>
ARTICLE
MISCELLANEOUS
SECTION 2.01. Expenses. Except as otherwise provided herein,
all costs and expenses incurred in connection with the transactions contemplated
by this Agreement shall be paid by the party incurring such expenses.
SECTION 2.02. Further Assurances. Each Stockholder and
Purchaser will execute and deliver all such further documents and instruments
and take all such further action as may be necessary in order to consummate the
transactions contemplated hereby.
SECTION 2.03. 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 2.04. Entire Agreement. This Agreement constitutes the
entire agreement between Purchaser and the Stockholders with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
both written and oral, between Purchaser and each Stockholder with respect to
the subject matter hereof.
SECTION 2.05. Assignment. This Agreement shall not be assigned
by operation of law or otherwise (other than by will or the laws of descent and
distribution), except the Purchaser may assign all or any of its rights and
obligations hereunder to any wholly-owned subsidiary of Parent, provided that no
such assignment shall relieve Purchaser of its obligations hereunder if such
assignee does not perform such obligations.
SECTION 2.06. Parties in Interest. This Agreement shall be
binding upon, inure solely to the benefit of, and be enforceable by, the parties
hereto and their successors and permitted assigns. Nothing in this Agreement,
express or implied, in 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 2.07. Amendment; Waiver. This Agreement may not be
amended except by an instrument in writing signed by the parties hereto. Any
party hereto may (i) extend the time for the performance of any obligation or
other act of any other party hereto, (ii) waive any inaccuracy in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any agreement or condition
contained herein other than the condition set forth in Section 1.04 with respect
to satisfaction of the Minimum Condition. Any such extension or waiver shall be
valid if set forth in an instrument in writing signed by the party or parties to
be bound thereby.
SECTION 2.08. 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
-3-
<PAGE>
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 2.09. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person, by
cable, telecopy, telegram or telex or by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties at the following
addresses (or at such other address for a party as shall be specified in a
notice given in accordance with this Section 2.09):
if to Purchaser:
ADU Acquisition Inc.
c/o FKI Industries Inc.
425 Post Road
Fairfield, CT 06430-0970
Facsimile No. (203) 255-7101
Attention: General Counsel
with copies to:
FKI plc
West House
King Cross Road
Halifax, West Yorkshire HX1 1EB
England
Facsimile No. (011) 44-422-330-407
Attention: Company Secretary
and
Parson & Brown
230 Park Avenue
New York, NY 10169
Facsimile No. (212) 682-9112/9113
Attention: James H. Bell, Esq.
-4-
<PAGE>
if to a Stockholder:
to its address set forth on Schedule A hereto.
SECTION 2.10. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware
applicable to contracts executed in and to be performed in that State.
SECTION 2.11. 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 2.12. Counterparts. This Agreement may be executed in
one or 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.
-5-
<PAGE>
IN WITNESS WHEREOF, Purchaser has caused this Agreement to be
executed by its officer thereunto duly authorized and each Stockholder has duly
executed this Agreement, each as of the date first written above.
ADU ACQUISITION INC.
By: /s/ Steven D. Jones
-------------------------------------
Name:
Title:
THE STOCKHOLDERS: THE INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION
By: /s/ Tracey L. Rudd
--------------------------------------
Name:
Title:
ORCAS LIMITED PARTNERSHIP
By: Archipelago Corp., Its General Partner
By: /s/ Frederick W. Whitridge, Jr.
---------------------------------------
Name:
Title:
THE NETWORK COMPANY II LIMITED
By: /s/ John W. Gildea
--------------------------------------
Name:
Title:
-6-
<PAGE>
SCHEDULE A
Name and Address Shares
- ------------------ ------------
Internationale Nederlanden (U.S.)
Capital Corporation 4,641,535
135 East 57th Street
New York, New York 10021
Attention: Tracey L. Rudd
Orcas Limited Partnership 5,149,582
270 Greenwich Avenue
Greenwich, Connecticut 06830
Attention: Frederick W. Whitridge, Jr.
The Network Company II Limited 1,710,083
c/o Gildea Carlson Investment Management
675 Third Avenue, 22nd Floor
New York, New York 10017
Attention: John W. Gildea
-7-
