<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
----------------
FOODBRANDS AMERICA, INC.
(NAME OF SUBJECT COMPANY)
IBP SUB, INC.
A WHOLLY OWNED SUBSIDIARY OF
IBP FOODSERVICE, L.L.C.
A WHOLLY OWNED SUBSIDIARY OF
IBP, INC.
(BIDDERS)
COMMON STOCK, $.01 PAR VALUE PER SHARE
(TITLE OF CLASS OF SECURITIES)
344822 10 1
(CUSIP NUMBER OF CLASS OF SECURITIES)
LONNIE O. GRIGSBY, ESQ. COPIES TO:
EXECUTIVE VICE PRESIDENT AND GENERAL JOSEPH H. NESLER, ESQ.
COUNSEL SIDLEY & AUSTIN
IBP, INC. ONE FIRST NATIONAL PLAZA
IBP AVENUE CHICAGO, ILLINOIS 60603
POST OFFICE BOX 515 (312) 853-7000
DAKOTA CITY, NEBRASKA 68731
(402) 494-2061
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
MARCH 25, 1997
(DATE OF EVENT WHICH REQUIRES FILING STATEMENT ON SCHEDULE 13D)
CALCULATION OF FILING FEE
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<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE
- ---------------------------------------------------------
<S> <C>
$321,283,381 $64,257
- ---------------------------------------------------------
- ---------------------------------------------------------
</TABLE>
* For the purpose of calculating the fee only, this amount assumes the
purchase of 13,730,059 shares of Common Stock of Foodbrands America, Inc. at
$23.40 per share. Such number of shares includes all outstanding shares as
of March 25, 1997 (exclusive of shares owned by the Bidders as of that
date), and assumes the exercise of all outstanding stock options and
warrants issued by Foodbrands America, Inc. to purchase shares of its Common
Stock.
[_Check]box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
AMOUNT PREVIOUSLY PAID: FILING PARTY:
FORM OR REGISTRATION NO.: DATE FILED:
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<PAGE>
CUSIP NO. 344822 10 1 14D-1 and 13D Page 2 of 8 Pages
- --------------------------------------------------------------------------------
1.
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
IBP, INC. 42-0838666
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2.
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(SEE INSTRUCTIONS)
(A) [X]
(B) [_]
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3.
SEC USE ONLY
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4.
SOURCES OF FUNDS (SEE INSTRUCTIONS) WC, BK
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5.
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(E) OR 2(F).
[_]
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6.
CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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7.
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
6,220,089*
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8.
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 7 EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS)
[_]
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9.
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 7
APPROXIMATELY 49.9% OF THE SHARES ISSUED AND OUTSTANDING AS OF MARCH 25,
1997*
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10.
TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
GM, CO
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*SEE FOOTNOTE ON FOLLOWING PAGE.
2
<PAGE>
CUSIP NO. 344822 10 1 14D-1 and 13D Page 3 of 8 Pages
- --------------------------------------------------------------------------------
1.
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
IBP FOODSERVICE, L.L.C. [APPLIED FOR]
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2.
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(SEE INSTRUCTIONS)
(A) [X]
(B) [_]
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3.
SEC USE ONLY
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4.
SOURCES OF FUNDS (SEE INSTRUCTIONS) WC, BK
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5.
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(E) OR 2(F).
[_]
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6.
CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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7.
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
6,220,089*
- --------------------------------------------------------------------------------
8.
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 7 EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS)
[_]
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9.
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 7
APPROXIMATELY 49.9% OF THE SHARES ISSUED AND OUTSTANDING AS OF MARCH 25,
1997*
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10.
TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
GM, OTHER (LIMITED LIABILITY COMPANY)
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*SEE FOOTNOTE ON FOLLOWING PAGE.
3
<PAGE>
CUSIP NO. 344822 10 1 14D-1 and 13D Page 4 of 8 Pages
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NAME OF REPORTING PERSON
1.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
IBP SUB, INC. 91-1788691
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(SEE INSTRUCTIONS)
2.
(A) [X]
(B) [_]
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SEC USE ONLY
3.
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SOURCES OF FUNDS (SEE INSTRUCTIONS) WC, BK
4.
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(E) OR 2(F).
5.
[_]
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CITIZENSHIP OR PLACE OF ORGANIZATION
6.
DELAWARE
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
7.
6,220,089*
- -------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 7 EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS)
8.
[_]
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 7
9.
APPROXIMATELY 49.9% OF THE SHARES ISSUED AND OUTSTANDING AS OF MARCH 25,
1997.*
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TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
10.
GM, CO
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* As of March 25, 1997, IBP, inc. (the "Parent") beneficially owned 497,800
shares of Common Stock, par value $.01 per share (the "Shares"), of
Foodbrands America, Inc., a Delaware corporation (the "Company"). The Parent
has sole voting and dispositive power with respect to such 497,800 shares.
Concurrently with the execution and delivery of the Merger Agreement (as
defined herein), on March 25, 1997, Joseph Littlejohn & Levy, L.P., a
Delaware limited partnership, and Joseph Littlejohn & Levy Fund II, L.P., a
Delaware limited partnership (together, "JLL"), entered into a Tender
Agreement dated as of March 25, 1997 (the "JLL Tender Agreement") among JLL,
the Parent and IBP Sub, Inc., a Delaware corporation and a wholly owned
subsidiary of the Parent (the "Offeror"), whereby JLL has agreed to tender
all of their Shares to the Offeror in the Offer (as defined herein).
Concurrently with the execution and delivery of the Merger Agreement, The
Airlie Group, L.P., a Delaware limited partnership ("Airlie"), entered into a
Tender Agreement dated as of March 25, 1997 (the "Airlie Tender Agreement")
among Airlie, the Parent and the Offeror whereby Airlie has agreed to tender
to the Offeror in the Offer a number of Shares which, when taken together
with the number of Shares (i) beneficially owned by the Parent or its
subsidiaries and (ii) which the Parent or its affiliates have the right to
acquire from JLL pursuant to the JLL Tender Agreement, would cause the Parent
or its affiliates to beneficially own 49.9% of the aggregate voting power
represented by the issued and outstanding capital stock of the Company.
Pursuant to each Tender Agreement, each of JLL and Airlie (each, a "Tendering
Stockholder") has further irrevocably granted to the Offeror an option (the
"Option"), exercisable upon certain events and subject to the conditions set
forth in each Tender Agreement, to purchase a like number of Shares at a
price of $23.40 per Share. The Offeror's option to purchase the Shares
subject to each Tender Agreement and the Shares subject to the Option are
reflected in Rows 7 and 9 of each of the tables above. Each Tender Agreement
further provides that each Tendering Stockholder revokes any and all previous
proxies granted with respect to the Shares owned by such Tendering
Stockholder and further provides that each Tendering Stockholder consents to
the Merger Agreement and the transactions contemplated thereby, including the
Merger (as defined herein). In addition, the Tendering Stockholders agreed
pursuant to Tender Agreements (i) to vote a number of Shares which, when
combined with the Shares held by the Parent or the Offeror, equals 49.9% of
the issued and outstanding shares of capital stock of the Company, in favor
of the Merger Agreement, the Merger and the transactions contemplated thereby
and (ii) to oppose any Acquisition Proposal (as defined herein) and to vote
all such Shares now or in the future owned by such Tendering Stockholder
against any Acquisition Proposal. Each Tender Agreement is described more
fully in Section 13 ("The Merger Agreement and the Tender Agreements") of the
Offer to Purchase. Because the obligations of the Tendering Stockholders to
tender their Shares to the Offeror in the Offer and to sell their Shares to
the Offeror pursuant to the exercise of the Option are contingent upon the
satisfaction of certain terms and conditions, the filing of this Schedule 13D
by the Bidders should not be construed as an admission that the Bidders are,
for the purposes of Section 13(d) of the Securities Exchange Act of 1934, as
amended, the beneficial owners of the Shares that are subject to the Tender
Agreements.
4
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Page 5 of 8 Pages
This Statement relates to a tender offer by the Offeror to purchase all
outstanding Shares, at a purchase price of $23.40 per Share, net to the seller
in cash, without interest, upon the terms and subject to the conditions set
forth in the Offer to Purchase and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute
the "Offer"), copies of which are filed as Exhibits (a)(1) and (a)(2) hereof,
respectively, and which are incorporated herein by reference. This Tender
Offer Statement on Schedule 14D-1 also constitutes a statement on Schedule 13D
to the extent the Offeror and the Parent are deemed to have acquired
beneficial ownership of the Shares subject to the Tender Agreements. The item
numbers and responses thereto below are in accordance with the requirements of
Schedule 14D-1.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Foodbrands America, Inc. The address
of the principal executive offices of the Company is set forth in Section 8
("Certain Information Concerning the Company") of the Offer to Purchase and is
incorporated herein by reference.
(b) The exact title of the class of equity securities being sought in the
Offer is the Common Stock, par value $.01 per share, of the Company. The
information set forth in the Introduction to the Offer to Purchase is
incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of Shares;
Dividends") of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a) through (d), (g): The information set forth in the Introduction and
Section 9 ("Certain Information Concerning the Parent and the Offeror") of the
Offer to Purchase, and in Annex I thereto, is incorporated herein by
reference.
(e) and (f): During the last five years, neither the Offeror nor the Parent
nor, to the best of their knowledge, any of the persons listed in Annex I of
the Offer to Purchase, has (i) been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any
violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) and (b) The information set forth in the Introduction and Section 11
("Background of the Offer; Past Contacts, Transactions or Negotiations with
the Company") of the Offer to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) and (b): The information set forth in Section 10 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
(c): Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a) through (e): The information set forth in the Introduction, Section 11
("Background of the Offer; Past Contacts, Transactions or Negotiations with
the Company"), Section 12 ("Purpose of the Offer and the Merger;
5
<PAGE>
Page 6 of 8 Pages
Plans for the Company") and Section 13 ("The Merger Agreement and the Tender
Agreements") of the Offer to Purchase is incorporated herein by reference.
(f) and (g): The information set forth in Section 7 ("Effect of the Offer on
the Market for Shares, Stock Quotation and Registration under the Exchange
Act") of the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) and (b): The information set forth in the Introduction, Section 9
("Certain Information Concerning the Parent and the Offeror") and Section 13
("The Merger Agreement and the Tender Agreements") of the Offer to Purchase is
incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, Section 11 ("Background of
the Offer; Past Contacts, Transactions or Negotiations with the Company"),
Section 13 ("The Merger Agreement and the Tender Agreements") and Section 15
("Certain Conditions to the Offeror's Obligations") of the Offer to Purchase
is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and in Section 17 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9 ("Certain Information Concerning the
Parent and the Offeror") of the Offer to Purchase is incorporated herein by
reference.
The incorporation by reference herein of the above-mentioned financial
information does not constitute an admission that such information is material
to a decision by a security holder of the Company whether to sell, tender or
hold Shares being sought in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) and (c): The information set forth in Section 16 ("Certain Legal
Matters") of the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 7 ("Effect of the Offer on the
Market for Shares, Stock Quotation and Registration under the Exchange Act")
of the Offer to Purchase is incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal is incorporated herein by reference in its entirety.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated April 1, 1997.
(a)(2) Letter of Transmittal.
(a)(3) Letter from Donaldson, Lufkin & Jenrette Securities Corporation, as
Dealer Manager, to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
6
<PAGE>
Page 7 of 8 Pages
(a)(4) Letter from Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees to Clients.
(a)(5) Notice of Guaranteed Delivery.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Summary Announcement, dated April 1, 1997.
(a)(8) Press Release issued by the Parent and the Company on March 26,
1997.*
(b) Amended and Restated Multi-Year Credit Agreement among IBP, inc., Bank
of America National Trust and Savings Association, as Co-Agent, and First Bank
National Association, as Administrative Agent, dated December 21, 1995.**
(c)(1) Agreement and Plan of Merger, dated as of March 25, 1997, among the
Parent, the Offeror and the Company.*
(c)(2) Tender Agreements, dated as of March 25, 1997, among the Parent, the
Offeror and certain stockholders of the Company.*
(c)(3) Confidentiality Agreement, dated January 25, 1997, between the Parent
and the Company.***
(d) None.
(e) Not applicable.
(f) Oral solicitation materials.
- --------
* Exhibits (a)(8) and (c)(1) hereto are incorporated by reference to
Exhibits 99.1 and 2.1, respectively, to the Annual Report on Form 10-K of
IBP, inc. for the fiscal year ended December 28, 1996, File No. 1-6085
(the "1996 10-K"). Exhibit (c)(2) hereto is incorporated by reference to
Exhibits 2.2 and 2.3 of the 1996 10-K.
**Exhibit (b) hereto is incorporated by reference to Exhibit No. 10.21 to
the Annual Report on Form 10-K of IBP, inc. for the fiscal year ended
December 30, 1995, File No. 1-6085.
***Exhibit (c)(3) hereto is incorporated by reference to Exhibit 8 to the
Solicitation/Recommendation Statement on Schedule 14D-9 of the Company
dated April 1, 1997.
7
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Page 8 of 8 Pages
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Dated: April 1, 1997
IBP, inc.
/s/ Lonnie O. Grigsby
By: _________________________________
Name: Lonnie O. Grigsby
Title: Executive Vice President
& General Counsel
IBP Foodservice, L.L.C.
/s/ Larry Shipley
By: _________________________________
Name: Larry Shipley
Title: President
IBP SUB, INC.
/s/ Larry Shipley
By: _________________________________
Name: Larry Shipley
Title: President
8
<PAGE>
Exhibit 99(a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
FOODBRANDS AMERICA, INC.
AT
$23.40 NET PER SHARE
BY
IBP SUB, INC.
A WHOLLY OWNED SUBSIDIARY OF
IBP, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, APRIL 28, 1997, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (i) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED HEREIN)
THAT NUMBER OF SHARES OF COMMON STOCK OF FOODBRANDS AMERICA, INC. (THE
"COMPANY") REPRESENTING AT LEAST A MAJORITY OF ALL OUTSTANDING SHARES ON A
FULLY DILUTED BASIS, (ii) ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, APPLICABLE TO THE PURCHASE OF
SHARES PURSUANT TO THE OFFER HAVING EXPIRED OR HAVING BEEN TERMINATED PRIOR TO
THE EXPIRATION OF THE OFFER, (iii) THE CERTIFICATE OF AMENDMENT (AS DEFINED
HEREIN) HAVING BEEN FILED WITH THE SECRETARY OF STATE OF THE STATE OF DELAWARE
AND THE CHARTER AMENDMENT (AS DEFINED HEREIN) BEING IN FULL FORCE AND EFFECT
AND (iv) THE SATISFACTION OF CERTAIN OTHER TERMS AND CONDITIONS. SEE SECTION
15.
THE OFFER IS BEING MADE IN CONNECTION WITH THE AGREEMENT AND PLAN OF MERGER
DATED AS OF MARCH 25, 1997, AMONG IBP SUB, INC., IBP, INC. AND THE COMPANY.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER, THE MERGER, THE
MERGER AGREEMENT AND THE TENDER AGREEMENTS (ALL AS DEFINED HEREIN), HAS
DETERMINED THAT THE MERGER IS ADVISABLE AND THAT THE TERMS OF THE OFFER AND
THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY'S
STOCKHOLDERS, AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER
AND TENDER THEIR SHARES IN THE OFFER.
IMPORTANT
Any stockholder desiring to tender Shares (as defined herein) should either
(i) complete and sign the Letter of Transmittal or a facsimile thereof in
accordance with the instructions in the Letter of Transmittal and deliver the
Letter of Transmittal with the Shares and all other required documents to the
Depositary, or follow the procedure for book-entry transfer set forth in
Section 3 or (ii) request such stockholder's broker, dealer, commercial bank,
trust company or other nominee to effect the transaction for the stockholder.
A stockholder having Shares registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact such person if
such stockholder desires to tender his or her Shares.
Any stockholder who desires to tender Shares and whose certificates for such
Shares are not immediately available or who cannot comply in a timely manner
with the procedures for book entry transfer, or who cannot deliver all
required documents to the Depositary, in each case on or prior to the
expiration of the Offer, must tender such Shares pursuant to the guaranteed
delivery procedure set forth in Section 3.
Questions and requests for assistance or additional copies of this Offer to
Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to the Information Agent or the Dealer Manager at their respective
addresses and telephone numbers set forth on the back cover of this Offer to
Purchase.
---------------
The Dealer Manager for the Offer is:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
April 1, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Introduction
1. Terms of the Offer................................................... 3
2. Acceptance for Payment and Payment for Shares........................ 4
3. Procedure for Tendering Shares....................................... 5
4. Withdrawal Rights.................................................... 7
5. Certain Federal Income Tax Consequences.............................. 8
6. Price Range of Shares; Dividends..................................... 9
7. Effect of the Offer on the Market for Shares, Stock Quotation and
Registration Under the Exchange Act.................................. 10
8. Certain Information Concerning the Company........................... 11
9. Certain Information Concerning the Parent and the Offeror............ 13
10. Source and Amount of Funds........................................... 14
11. Background of the Offer; Past Contacts, Transactions or Negotiations
with the Company..................................................... 15
12. Purpose of the Offer and the Merger; Plans for the Company........... 16
13. The Merger Agreement and the Tender Agreements....................... 18
14. Dividends and Distributions.......................................... 27
15. Certain Conditions to the Offeror's Obligations...................... 27
16. Certain Legal Matters................................................ 29
17. Fees and Expenses.................................................... 30
18. Miscellaneous........................................................ 30
Annex I. Certain Information Concerning the Directors and Executive
Officers of the Parent and the Offeror.......................... A-1
</TABLE>
<PAGE>
TO THE HOLDERS OF COMMON STOCK OF FOODBRANDS AMERICA, INC.:
INTRODUCTION
IBP Sub, Inc., a Delaware corporation (the "Offeror") and a wholly owned
subsidiary of IBP Foodservice, L.L.C., a Delaware limited liability company
whose sole members are IBP, inc., a Delaware corporation (the "Parent"), and
Prepared Foods, Inc., a Texas corporation and a wholly-owned subsidiary of
Parent, hereby offers to purchase all outstanding shares of Common Stock, par
value $.01 per share (the "Shares"), of Foodbrands America, Inc., a Delaware
corporation (the "Company"), at a purchase price of $23.40 per Share, net to
the seller in cash, without interest, upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which, together with any amendments or supplements hereto or
thereto, collectively constitute the "Offer"). Tendering holders of Shares
will not be obligated to pay brokerage fees or commissions or, except as set
forth in the Letter of Transmittal, transfer taxes on the purchase of Shares
by the Offeror pursuant to the Offer. The Offeror will pay all charges and
expenses of Donaldson, Lufkin & Jenrette Securities Corporation (the "Dealer
Manager"), The Bank of New York (the "Depositary") and Corporate Investor
Communications, Inc. (the "Information Agent") in connection with the Offer.
See Section 17.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER, THE MERGER (AS
DEFINED BELOW), THE MERGER AGREEMENT (AS DEFINED BELOW) AND THE TENDER
AGREEMENTS (AS DEFINED BELOW), HAS DETERMINED THAT THE MERGER IS ADVISABLE AND
THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST
INTERESTS OF, THE COMPANY'S STOCKHOLDERS, AND RECOMMENDS THAT THE COMPANY'S
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES IN THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES REPRESENTING AT LEAST A MAJORITY OF THE SHARES OUTSTANDING ON A FULLY
DILUTED BASIS (THE "MINIMUM CONDITION"), (II) ANY WAITING PERIOD UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, APPLICABLE
TO THE PURCHASE OF SHARES PURSUANT TO THE OFFER HAVING EXPIRED OR HAVING BEEN
TERMINATED PRIOR TO THE EXPIRATION OF THE OFFER (THE "HSR ACT CONDITION"),
(III) THE CERTIFICATE OF AMENDMENT (AS DEFINED HEREIN) HAVING BEEN FILED WITH
THE SECRETARY OF STATE OF THE STATE OF DELAWARE AND THE CHARTER AMENDMENT (AS
DEFINED HEREIN) BEING IN FULL FORCE AND EFFECT (THE "CHARTER AMENDMENT
CONDITION") AND (IV) THE SATISFACTION OF CERTAIN OTHER TERMS AND CONDITIONS.
SEE SECTION 15.
Morgan Stanley & Co. Incorporated ("Morgan Stanley"), the Company's
financial advisor, has delivered to the Company's Board of Directors its
written opinion that the consideration to be received by the stockholders of
the Company pursuant to the Merger Agreement is fair from a financial point of
view to such holders (other than the Parent and its affiliates). A copy of
such opinion is contained in the Company's Solicitation/Recommendation
Statement on Schedule 14D-9 which is being distributed to the Company's
stockholders.
The Offer is being made pursuant to an Agreement and Plan of Merger dated as
of March 25, 1997 (the "Merger Agreement"), among the Parent, the Offeror and
the Company. The Merger Agreement provides, among other things, that, unless
the parties otherwise agree, no later than the second business day after the
purchase of Shares pursuant to the Offer and the satisfaction of the other
conditions set forth in the Merger Agreement, the Offeror will be merged with
and into the Company (the "Merger") in accordance with the relevant provisions
of the General Corporation Law of the State of Delaware, as amended (the
"DGCL"). See Sections 12 and 13. Following the consummation of the Merger, the
Company will continue as the surviving corporation (the "Surviving
Corporation") and will be a wholly owned subsidiary of the 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 by
the Company as treasury stock, Shares owned by any wholly owned subsidiary
<PAGE>
of the Company, Shares owned by the Parent or the Offeror or any other
subsidiaries of the Parent, and Shares with respect to which appraisal rights
are properly exercised under the DGCL) will be cancelled and converted into
and become the right to receive $23.40 (or any higher price that may be paid
for each Share pursuant to the Offer) in cash, without interest thereon (the
"Offer Price"). See Section 5 for a description of certain tax consequences of
the Offer and the Merger.
The Merger Agreement provides that, promptly upon the purchase of and
payment for Shares pursuant to the Offer, the Parent will be entitled to
designate for election to the Board of Directors of the Company such number of
directors (rounded up to the next whole number) as is equal to the product of
(i) the total number of directors on such Board (giving effect to the
directors designated by the Parent pursuant to this sentence) and (ii) the
percentage that the number of Shares so accepted for payment bears to the
total number of Shares then outstanding. The Company has agreed, upon request
by the Offeror, to use its best efforts promptly either to increase the size
of the Board of Directors of the Company or secure the resignations of such
number of directors, or both, as is necessary to enable the Parent's designees
to be so elected to the Company's Board, and to take all actions available to
the Company to cause the Parent's designees to be so elected.
On March 25, 1997, the Parent and the Offeror entered into the Tender
Agreements with certain stockholders of the Company, pursuant to which such
stockholders agreed, among other things, (1) to tender to the Offeror pursuant
to the Offer, at $23.40 per Share, such number of Shares which, when taken
together with the Shares currently owned by the Parent and the Offeror, would
cause the Parent and its affiliates to beneficially own 49.9% of the aggregate
voting power represented by the issued and outstanding capital stock of the
Company; (2) to grant to the Offeror options to purchase the same number of
Shares held by such stockholders in certain circumstances; and (3) to vote the
same number of Shares held by such stockholders in favor of the Merger
Agreement and against all other acquisition proposals. See Section 13. As of
the date hereof, such stockholders would be required to tender to the Offeror
pursuant to the Offer an aggregate of 5,722,289 Shares.
The Company has advised the Offeror that as of March 25, 1997, there were
(a) 12,465,107 Shares issued and outstanding, and (b) outstanding stock
options and warrants to purchase an aggregate of 1,762,752 Shares. As of the
date hereof, the Parent and the Offeror beneficially own 497,800 Shares. If
the Offeror acquires at least 6,616,130 Shares in the Offer, the Parent and
the Offeror will control a majority of the outstanding Shares on a fully
diluted basis. Accordingly, the Offeror would have sufficient voting power to
approve the Merger without the affirmative vote of any other stockholder. If
the Offeror acquires 90% or more of the outstanding Shares through the Offer,
the Offeror would be able to effect the Merger pursuant to the short form
merger provisions of the DGCL, without prior notice to, or any action by, any
other stockholder of the Company.
In connection with the Merger Agreement and the Tender Agreements, the Board
of Directors of the Company has approved, and stockholders representing a
majority of the Shares have approved by written consent in lieu of a meeting
of stockholders, amendments (the "Charter Amendment") to the Amended and
Restated Certificate of Incorporation of the Company (the "Charter") that
exclude the Merger Agreement, the Tender Agreements and the transactions
contemplated therein from the restrictions of Article Fifth of the Charter
(relating to certain stock transfer restrictions intended to preserve the tax
benefits from the Company's previous net operating losses). The Company has
filed with the Securities and Exchange Commission (the "Commission") an
information statement (the "Information Statement") relating to the Charter
Amendment and has agreed to distribute definitive copies of the Information
Statement to the Company's stockholders as soon as practicable. The Company
has agreed to file with the Secretary of State of the State of Delaware a
certificate of amendment (the "Certificate of Amendment") relating to the
Charter Amendment the next business day following the expiration of any
required period of distribution of the Information Statement.
The Information Statement may not be distributed to the stockholders until
it has been cleared by the Commission. Since under the rules of the Commission
the Information Statement must be distributed for at least 20 calendar days,
there can be no assurance that the Certificate of Amendment will be filed on
or prior to April 28, 1997. Shares tendered pursuant to the Offer cannot be
accepted for payment by the Offeror until the Certificate of Amendment has
been so filed. The Offeror currently intends to extend the Expiration Date
until the Charter Amendment Condition has been satisfied if all of the other
conditions to the Offer have been satisfied.
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THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
1. TERMS OF THE OFFER.
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 extension or
amendment), the Offeror will accept for payment and pay for all Shares validly
tendered on or prior to the Expiration Date (as defined below) and not
theretofore withdrawn in accordance with Section 4 as soon as practicable
after the later to occur of (a) the Expiration Date or (b) the satisfaction or
waiver of the conditions set forth in Section 15.
If the Offeror shall decide, in its sole discretion, to increase the
consideration offered in the Offer to holders of Shares and if, at the time
that notice of such increase is first published, sent or given to holders of
Shares, the Offer is scheduled to expire at any time earlier than the
expiration of a period ending on the tenth business day from, and including,
the date that such notice is first so published, sent or given, then the Offer
will be extended until the expiration of such period of ten business days. For
purposes of the Offer, a "business day" means any day other than a Saturday,
Sunday or a federal holiday, and consists of the time period from 12:01 a.m.
through 12:00 Midnight, New York City time.
THE OFFER IS CONDITIONED UPON SATISFACTION OF THE MINIMUM CONDITION, THE HSR
ACT CONDITION, THE CHARTER AMENDMENT CONDITION AND CERTAIN OTHER TERMS AND
CONDITIONS, AND THE OFFEROR MAY TERMINATE THE OFFER AT ANY TIME IN CERTAIN
EVENTS. SEE SECTION 15. IN ADDITION, THE MERGER AGREEMENT MAY BE TERMINATED BY
THE PARENT OR THE COMPANY IN CERTAIN EVENTS. SEE SECTIONS 13 AND 15. The
Offeror expressly reserves the right to increase the price per Share payable
in the Offer and make any other changes to the terms or conditions of the
Offer (or waive in whole or in part, at the sole discretion of the Offeror,
any of such conditions); provided, however, that the Offeror will not, without
the prior written consent of the Company (such consent to be authorized by the
Board of Directors of the Company), (i) waive the Minimum Condition, (ii)
subject to clause (z) of the proviso in the immediately following sentence,
extend the Offer if all of the Offer conditions are satisfied or waived, (iii)
decrease the Offer Price, change the form of consideration payable in the
Offer or decrease the number of Shares sought, (iv) impose additional
conditions to the Offer, (v) waive the Charter Amendment Condition or (vi)
amend the conditions of the Offer or any other term of the Offer in any manner
adverse to the holders of Shares (other than insignificant changes or
amendments or other than to waive any condition, other than as described
above). The initial expiration date of the Offer shall be 20 business days
following commencement of the Offer (such date and time, as may be extended in
accordance with the terms hereof, is referred to as the "Expiration Date");
provided, however, that the Offeror may, from time to time, in its sole
discretion extend the Expiration Date, but not beyond September 24, 1997,
without the consent of the Company (x) if any of the conditions to the Offer
have not been satisfied, for the minimum period of time necessary to satisfy
such condition; (y) for any period required by any order, decree or ruling of,
or any rule, regulation, interpretation or position of, any governmental
entity applicable to the Offer; or (z) for a period of not more than five
business days beyond the latest expiration date that would otherwise be
permitted under clause (x) or (y) of this sentence solely for the purpose of
obtaining valid tenders (which are not withdrawn) of 90% of the Shares.
Notwithstanding any other provision of the Merger Agreement or the Offer,
the Offeror shall not be required to accept for payment or pay for, or may
delay the acceptance for payment of or payment for, any tendered Shares, or
may, in its sole discretion, at any time, terminate or amend the Offer as to
any Shares not then paid for upon the occurrence of any of the conditions set
forth in Section 15. The Offeror's right to delay payment for any Shares or
not to pay for any Shares theretofore accepted for payment is subject to the
applicable rules and regulations of the Commission, including Rule 14e-1(c)
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
relating to the Offeror's obligation to pay for or return tendered Shares
promptly after the termination or withdrawal of the Offer.
Any extension of the period during which the Offer is open, delay in
acceptance for payment or payment, or termination or amendment of the Offer,
will be followed, as promptly as practicable, by public announcement thereof,
such announcement in the case of an extension to be issued not later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled Expiration Date in accordance with the public
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announcement requirements of Rules 14d-4(c) and 14e-1(d) under the Exchange
Act. Without limiting the obligation of the Offeror under such rule or the
manner in which the Offeror may choose to make any public announcement, the
Offeror currently intends to make announcements by issuing a press release to
the Dow Jones News Service and making any appropriate filing with the
Commission.
If the Offeror 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 (including a waiver, with the consent of the Company, of the Minimum
Condition), the Offeror will disseminate additional tender offer materials and
extend the Offer if and to the extent required by Rules 14d-4(c), 14d-6(d) and
14e-1 under the Exchange Act or otherwise. The minimum period during which a
tender offer must remain open following material changes in the terms of the
offer or the information concerning the offer, other than a change in price or
a change in percentage of securities sought, depends upon the facts and
circumstances, including the relative materiality of the terms or information
changes. With respect to a change in price or a change in percentage of
securities sought, a minimum ten business day period is generally required to
allow for adequate dissemination to stockholders and investor response.
The Company has provided the Offeror with the Company's list of stockholders
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the Letter of Transmittal will
be mailed to record holders of Shares and will be furnished to brokers,
dealers, commercial banks, trust companies and similar persons whose names, or
the names of whose nominees, appear on the list of stockholders or, if
applicable, who are listed as participants in a clearing agency's security
position listing, for subsequent transmittal to beneficial owners of Shares.
The Offeror is not offering to purchase any stock options or warrants, and
neither the Offeror nor the Company is establishing any special arrangements
to facilitate exercises in connection with the Offer. Holders of stock options
or warrants who wish to tender Shares in the Offer must first exercise such
stock options or warrants, in each case in accordance with the terms and
provisions thereof, and then tender the Shares received upon such exercise
pursuant to the Offer. Holders of stock options or warrants who exercise such
stock options or warrants will not have the right to revoke an effective
exercise and contingent exercises will not be valid. Holders of stock options
and warrants who wish to tender Shares issuable pursuant to such securities
are responsible for exercising such securities in sufficient time so that such
Shares can be delivered to the Depositary in a timely manner as required by
the Offer. The parties to the Merger Agreement have agreed upon certain
additional rights and benefits to be provided to holders of stock options
immediately prior to the Effective Time. See Section 13. NEITHER THE PARENT,
THE OFFEROR NOR THE COMPANY MAKES ANY RECOMMENDATION TO ANY HOLDER OF STOCK
OPTIONS OR WARRANTS AS TO WHETHER TO EXERCISE ANY OR ALL SUCH STOCK OPTIONS OR
WARRANTS, AS THE CASE MAY BE.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Offeror will accept for payment and pay for all Shares
validly tendered on or prior to the Expiration Date and not theretofore
withdrawn in accordance with Section 4 as soon as practicable after the later
to occur of (a) the Expiration Date or (b) the satisfaction or waiver of the
conditions set forth in Section 15. Subject to compliance with Rule 14e-1(c)
under the Exchange Act, the Offeror expressly reserves the right to delay
payment for Shares in order to comply in whole or in part with any applicable
law. See Sections 1 and 16. In all cases, payment for Shares accepted for
payment pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) certificates for such Shares or timely confirmation (a
"Book-Entry Confirmation") of a book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company or the Philadelphia
Depository Trust Company (collectively, the "Book-Entry Transfer Facilities"),
pursuant to the procedures set forth in Section 3, (ii) a properly completed
and duly executed Letter of Transmittal (or a manually signed facsimile
thereof), with any required signature guarantees, or, in the case of a book-
entry transfer, an Agent's Message (as defined below) and (iii) any other
documents required by the Letter of Transmittal.
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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
Offeror may enforce such agreement against the participant.
For purposes of the Offer, the Offeror will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as,
if and when the Offeror gives oral or written notice to the Depositary of the
Offeror's acceptance of such Shares for payment. In all cases, payment for
Shares purchased pursuant to the Offer will be made by deposit of the purchase
price with the Depositary, which will act as agent for tendering stockholders
for the purpose of receiving payment from the Offeror and transmitting such
payment to tendering stockholders. If, for any reason whatsoever, acceptance
for payment of any Shares tendered pursuant to the Offer is delayed, or the
Offeror is unable to accept for payment Shares tendered pursuant to the Offer,
then, without prejudice to the Offeror's rights under Section 1, the
Depositary may, nevertheless, on behalf of the Offeror, retain tendered
Shares, and such Shares may not be withdrawn, except to the extent that the
tendering stockholders are entitled to withdrawal rights as described in
Section 4 below and as otherwise required by Rule 14e-1(c) under the Exchange
Act. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID BY THE OFFEROR BECAUSE OF
ANY DELAY IN MAKING ANY PAYMENT.
If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason, or if certificates are submitted
for more Shares than are tendered, certificates for such unpurchased or
untendered Shares will be returned, without expense to the tendering
stockholder (or, in the case of Shares delivered by book-entry transfer to a
Book-Entry Transfer Facility, such Shares will be credited to an account
maintained within such Book-Entry Transfer Facility), as promptly as
practicable after the expiration, termination or withdrawal of the Offer.
If, prior to the Expiration Date, the Offeror increases the price being paid
for Shares accepted for payment pursuant to the Offer, such increased
consideration will be paid to all stockholders whose Shares are purchased
pursuant to the Offer, whether or not such Shares were tendered prior to such
increase in consideration.
3. PROCEDURE FOR TENDERING SHARES.
Valid Tenders. For Shares to be validly tendered pursuant to the Offer, (i)
a properly completed and duly executed Letter of Transmittal (or a manually
signed facsimile thereof), with any required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message, and any other required
documents, must be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase and certificates
representing such Shares must be received by the Depositary at such address or
such Shares must be tendered pursuant to the procedure for book-entry transfer
set forth below, and a Book-Entry Confirmation must be received by the
Depositary, in each case on or prior to the Expiration Date, or (ii) the
tendering stockholder must comply with the guaranteed delivery procedures set
forth below. No alternative, conditional or contingent tenders will be
accepted. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN
ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
Book-Entry Transfer. The Depositary will make a request to establish an
account with respect to the Shares at each Book-Entry Transfer Facility for
purposes of the Offer within two business days after the date of this Offer to
Purchase. Any financial institution that is a participant in a Book-Entry
Transfer Facility's system may make book-entry delivery of Shares by causing a
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at a Book-Entry Transfer Facility in accordance with such Book-Entry
Transfer Facility's procedures for transfer. Although delivery of Shares may
be effected through book-entry at a Book-Entry Transfer Facility on or prior
to the Expiration Date, (i) the Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message in connection with a book-entry
transfer, and any other required documents, must, in any case, be transmitted
to and received by the Depositary at one of its addresses set forth on the
back cover of this Offer to Purchase on or prior to the Expiration Date or
(ii) the guaranteed delivery procedures described below must be complied with.
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Signature Guarantee. Signatures on the Letter of Transmittal must be
guaranteed by a member in good standing of the Securities Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Guarantee
Program, the Stock Exchange Medallion Program, or by any other bank, broker,
dealer, credit union, savings association or other entity which is an
"eligible guarantor institution," as such term is defined in Rule 17Ad-15
under the Exchange Act (each of the foregoing constituting an "Eligible
Institution"), unless the Shares tendered thereby are tendered (i) by a
registered holder of Shares who has not completed either the box labeled
"Special Delivery Instructions" or the box labeled "Special Payment
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution. If the certificates evidencing Shares are registered in
the name of a person or persons other than the signer of the Letter of
Transmittal, or if payment is to be made or delivered to, or certificates
evidencing unpurchased Shares are to be issued or returned to, a person other
than the registered owner or owners, then the tendered certificates must be
endorsed or accompanied by duly executed stock powers, in either case signed
exactly as the name or names of the registered owner or owners appear on the
certificates or stock powers, with the signatures on the certificates or stock
powers guaranteed by an Eligible Institution as provided in the Letter of
Transmittal. See Instructions 1 and 5 to the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or if the procedure for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary on or prior to the Expiration Date, such Shares may nevertheless be
tendered if all of the following guaranteed delivery procedures are duly
complied with:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form made available by the Offeror, is received by the
Depositary, as provided below, prior to the Expiration Date; and
(iii) the certificates for all tendered Shares, in proper form for transfer
(or a Book-Entry Confirmation), together with a properly completed and duly
executed Letter of Transmittal (or a manually signed facsimile thereof), and
any required signature guarantees, or, in the case of a book-entry transfer,
an Agent's Message, and any other documents required by the Letter of
Transmittal are received by the Depositary within three New York Stock
Exchange trading days after the date of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or overnight
courier or transmitted by facsimile transmission or mail to the Depositary and
must include a guarantee by an Eligible Institution in the form set forth in
the Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH A BOOK-ENTRY TRANSFER FACILITY,
IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE
CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for such Shares or a Book-Entry
Confirmation, (ii) a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof), with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message, and (iii) any other documents required by the Letter of Transmittal.
Accordingly, tendering stockholders may be paid at different times depending
upon when certificates for Shares or Book-Entry Confirmations with respect to
Shares are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE
OFFEROR, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING ANY
PAYMENT.
BACKUP FEDERAL INCOME TAX WITHHOLDING. TO PREVENT "BACKUP" FEDERAL INCOME
TAX WITHHOLDING WITH RESPECT TO PAYMENT OF THE PURCHASE PRICE FOR SHARES
PURCHASED PURSUANT TO THE OFFER, EACH STOCKHOLDER
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MUST PROVIDE THE DEPOSITARY WITH SUCH STOCKHOLDER'S CORRECT TAXPAYER
IDENTIFICATION NUMBER ("TIN") AND CERTIFY THAT SUCH STOCKHOLDER IS NOT SUBJECT
TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9
INCLUDED IN THE LETTER OF TRANSMITTAL. FOREIGN HOLDERS MUST SUBMIT A COMPLETED
FORM W-8 TO AVOID 31% BACKUP WITHHOLDING. THIS FORM MAY BE OBTAINED FROM THE
DEPOSITARY. SEE INSTRUCTIONS 8 AND 9 SET FORTH IN THE LETTER OF TRANSMITTAL.
Determination of Validity. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance for payment
of any tender of Shares will be determined by the Offeror, in its sole
discretion, and its determination will be final and binding on all parties.
The Offeror reserves the absolute right to reject any or all tenders of any
Shares that are determined by it not to be in proper form or the acceptance of
or payment for which may, in the opinion of the Offeror, be unlawful. The
Offeror also reserves the absolute right to waive any of the conditions of the
Offer, subject to the limitations set forth in the Merger Agreement, or any
defect or irregularity in the tender of any Shares. The Offeror's
interpretation of the terms and conditions of the Offer (including the Letter
of Transmittal and the Instructions to the Letter of Transmittal) will be
final and binding on all parties. No tender of Shares will be deemed to have
been validly made until all defects and irregularities have been cured or
waived. None of the Offeror, the Parent, the Dealer Manager, the Depositary,
the Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification.
Other Requirements. By executing the Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of the Offeror
as such stockholder's attorneys-in-fact and 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 right with respect to the Shares tendered by
such stockholder and accepted for payment by the Offeror (and any and all
other Shares or other securities or rights issued or issuable in respect of
such Shares on or after March 25, 1997). All such proxies shall be considered
coupled with an interest in the tendered Shares. This appointment is effective
when, and only to the extent that, the Offeror accepts for payment the Shares
deposited with the Depositary. Upon acceptance for payment, all prior proxies
given by the stockholder with respect to such Shares or other securities or
rights will, without further action, be revoked and no subsequent proxies may
be given or written consent executed (and, if given or executed, will not be
deemed effective). The designees of the Offeror will, with respect to the
Shares and other securities or rights, be empowered to exercise all voting and
other rights of such stockholder as they in their sole judgment deem proper in
respect of any annual or special meeting of the Company's stockholders, or any
adjournment or postponement thereof, any actions by written consent in lieu of
any such meeting or otherwise. The Offeror reserves the right to require that,
in order for Shares to be deemed validly tendered, immediately upon the
Offeror's payment for such Shares, the Offeror must be able to exercise full
voting and other rights with respect to such Shares and the other securities
or rights issued or issuable in respect of such Shares, including voting at
any meeting of stockholders (whether annual or special or whether or not
adjourned) in respect of such Shares.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares made
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer
may be withdrawn at any time prior to the Expiration Date and, unless
theretofore accepted for payment pursuant to the Offer, may also be withdrawn
at any time after May 30, 1997. If payment for Shares is delayed for any
reason or if the Offeror is unable to pay for Shares for any reason, then,
without prejudice to the Offeror's rights under the Offer, tendered Shares may
be retained by the Depositary on behalf of the Offeror and may not be
withdrawn except to the extent that tendering stockholders are entitled to
withdrawal rights as set forth in this Section 4, subject to Rule 14e-1(c)
under the Exchange Act, which provides that no person who makes a tender offer
shall fail to pay the consideration offered or return the securities deposited
by or on behalf of security holders promptly after the termination or
withdrawal of the Offer.
For a withdrawal of Shares tendered pursuant to the Offer 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
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forth on the back cover 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 in which the
certificates representing such Shares are registered, if different from that
of the person who tendered the Shares. If certificates for Shares to be
withdrawn have been delivered or otherwise identified to the Depositary, then,
prior to the physical release of such certificates, the serial numbers shown
on such certificates must be submitted to the Depositary and, unless such
Shares have been tendered by an Eligible Institution, the signatures on the
notice of withdrawal must be guaranteed by an Eligible Institution. If Shares
have been delivered pursuant to the procedure for book-entry transfer as set
forth in Section 3, any notice of withdrawal must also specify the name and
number of the account at the appropriate Book-Entry Transfer Facility to be
credited with the withdrawn Shares and otherwise comply with such Book-Entry
Transfer Facility's procedures. All questions as to the form and validity
(including time of receipt) of notices of withdrawal will be determined by the
Offeror, in its sole discretion, and its determination will be final and
binding on all parties. None of the Offeror, the Parent, the Dealer Manager,
the Depositary, the Information Agent or any other person will be under any
duty to give notification of any defects or irregularities in any notice of
withdrawal or incur any liability for failure to give any such notification.
Any Shares properly withdrawn will be deemed not validly tendered for
purposes of the Offer, but may be retendered at any subsequent time prior to
the Expiration Date by following any of the procedures described in Section 3.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following is a summary of certain United States federal income tax
consequences of the Offer and the Merger to holders whose Shares are purchased
pursuant to the Offer or whose Shares are converted into the right to receive
cash in the Merger (or pursuant to the exercise of appraisal rights). The
discussion applies only to holders of Shares in whose hands Shares are capital
assets within the meaning of Section 1221 of the Internal Revenue Code of
1986, as amended, and may not apply to Shares received pursuant to the
exercise of employee stock options or otherwise as compensation, or to holders
of Shares who are in special tax situations (such as insurance companies, tax-
exempt organizations or dealers in securities). This discussion does not
discuss the federal income tax consequences to a holder of Shares who, for
United States federal income tax purposes, is a non-resident alien individual,
a foreign corporation, a foreign partnership or a foreign estate or trust, nor
does it consider the effect of any foreign, state or local tax laws.
THE DISCUSSION OF FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW IS
INCLUDED FOR GENERAL INFORMATIONAL PURPOSES ONLY AND DOES NOT PURPORT TO
CONSIDER ALL ASPECTS OF FEDERAL INCOME TAXATION THAT MAY BE RELEVANT TO
HOLDERS OF SHARES. THE DISCUSSION IS BASED UPON CURRENT LAW, WHICH IS SUBJECT
TO CHANGE. BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH HOLDER OF SHARES
SHOULD CONSULT SUCH HOLDER'S OWN TAX ADVISOR TO DETERMINE THE APPLICABILITY OF
THE RULES DISCUSSED BELOW TO SUCH STOCKHOLDER AND THE PARTICULAR TAX EFFECTS
TO SUCH STOCKHOLDER OF THE OFFER AND THE MERGER, INCLUDING THE APPLICATION AND
EFFECT OF STATE, LOCAL AND OTHER INCOME TAX LAWS.
The receipt of cash for Shares pursuant to the Offer or the Merger will be a
taxable transaction for federal income tax purposes (and also may be a taxable
transaction under applicable state, local and other income tax laws). In
general, for federal income tax purposes, a holder of Shares will recognize
gain or loss equal to the difference between his or her adjusted tax basis in
the Shares sold pursuant to the Offer or converted to a right to receive cash
in the Merger and the amount of cash received therefor. Gain or loss must be
determined separately for each block of Shares (i.e., Shares acquired at the
same cost in a single transaction) sold pursuant to the Offer or converted
into the right to receive cash in the Merger. Such gain or loss will be
capital gain or loss and will be long-term gain or loss if the Shares were
held for more than one year, on the date of sale (in the case of the Offer) or
the Effective Time of the Merger (in the case of the Merger). The receipt of
cash for Shares pursuant to the exercise of appraisal rights will generally be
taxed in the same manner as described above. Long-term capital gain of
individuals currently is taxed at a maximum rate of 28%. Legislative proposals
are being considered that would significantly decrease the tax rate applicable
to an individuals's long-term capital gains. It
8
<PAGE>
is not known whether any such proposal will be passed, and, if passed, what
the new rate will be (if it is changed) and when any new rate will become
effective.
Payments in connection with the Offer or the Merger may be subject to
"backup withholding" at a rate of 31%, unless a stockholder (a) is a
corporation or comes within certain exempt categories and, when required,
demonstrates this fact or (b) provides a correct TIN, certifies as to no loss
of exemption from backup withholding and otherwise complies with applicable
requirements of the backup withholding rules. A stockholder who does not
provide a correct TIN may be subject to penalties imposed by the IRS. Any
amount paid as backup withholding does not constitute an additional tax and
will be creditable against the stockholder's federal income tax liability.
Each stockholder should consult with his or her own tax advisor as to his or
her qualification for exemption from backup withholding and the procedure for
obtaining such exemption. Stockholders tendering their Shares in the Offer may
prevent backup withholding by completing the Substitute Form W-9 included in
the Letter of Transmittal. See Section 3. Similarly, stockholders who convert
their Shares into the right to receive cash in the Merger may prevent backup
withholding by completing a Substitute Form W-9 and submitting it to the
paying agent for the Merger.
The Parent and the Offeror shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to the Merger Agreement to any holder
of Shares such amounts as the Parent or the Offeror is required to deduct and
withhold with respect to the making of such payment. To the extent that
amounts are so withheld by the Parent or the Offeror, such withheld amounts
shall be treated for all purposes of the Merger Agreement as having been paid
to the holder of the Shares in respect of which such deduction and withholding
was made by the Parent or the Offeror.
6. PRICE RANGE OF SHARES; DIVIDENDS.
According to the Company's Annual Report on Form 10-K for the fiscal year
ended December 28, 1996, (the "1996 10-K"), the Shares are traded on the New
York Stock Exchange ("NYSE") under the symbol "FDB". (According to the 1996
10-K, the Shares commenced trading on the NYSE on February 13, 1996; prior to
that date, the Shares traded in the Nasdaq National Market ("NNM") under the
symbol "FBAI".) The following table sets forth for the periods indicated the
high and low closing sales prices per Share on the NYSE (bid prices in the
case of the NNM, as described above) with respect to the fiscal years of the
Company ended December 30, 1995 and December 28, 1996 and the first fiscal
quarter of fiscal year 1997.
<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
FISCAL 1995:
First Quarter.............................................. $ 8 1/2 $ 7 1/4
Second Quarter............................................. 13 1/4 7 5/8
Third Quarter.............................................. 15 5/8 12 1/2
Fourth Quarter............................................. 14 3/8 10 5/8
FISCAL 1996:
First Quarter (NNM)........................................ 14 1/2 11 1/2
First Quarter (NYSE)....................................... 17 7/8 14 1/2
Second Quarter............................................. 17 3/8 12 1/8
Third Quarter.............................................. 13 1/2 11
Fourth Quarter............................................. 15 12
FISCAL 1997:
First Quarter.............................................. 23 1/8 13 3/4
</TABLE>
On March 25, 1997, the last full day of trading prior to the public
announcement of the execution of the Merger Agreement, the last reported sales
price of the Shares on the NYSE was $15 3/4 per Share. On March 31, 1997, the
last full day of trading prior to the commencement of the Offer, the last
reported sales price of the Shares on the NYSE was $23 1/8 per Share.
Stockholders are urged to obtain current market quotations for the Shares.
9
<PAGE>
According to the 1996 10-K, the Company has not paid any cash dividends on
Shares since the Company's reorganization in 1991, does not expect to pay any
dividends in the foreseeable future and intends to continue to retain earnings
for the Company's operations. Additionally, payment of such dividends is
restricted under the terms of certain loans agreements to which the Company is
a party. Under the terms of the Merger Agreement, the Company is prohibited
from paying any dividends. See Sections 13 and 14.
7. EFFECT OF THE OFFER ON THE MARKET FOR SHARES, STOCK QUOTATION AND
REGISTRATION UNDER THE EXCHANGE ACT.
The purchase of the Shares by the Offeror pursuant to the Offer will reduce
the number of holders of Shares and the number of Shares that might otherwise
trade publicly and 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.
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 were to fall below 1200, the number of publicly held
Shares (exclusive of management or other concentrated holdings) were to fall
below 600,000 or the aggregate market value of publicly held Shares were to
not exceed $5 million. The Company has advised the Offeror that, as of March
25, 1997, there were approximately 3,420 stockholders of record and
approximately 4,000 beneficial owners of the Shares. If, as a result of the
purchase of the Shares pursuant to the Offer or otherwise, the Shares no
longer meet the requirements of the NYSE for continued listing and the Shares
are no longer listed, 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 other securities exchanges or in the over-the-counter
market and that price quotations would be reported by such exchanges or
through the Nasdaq Stock Market or other sources. The extent of the public
market for the Shares and the availability of such quotations would, however,
depend upon the number of holders of Shares remaining at such time, the
interest in maintaining a market in Shares on the part of securities firms,
the possible termination of the registration of the Shares under the Exchange
Act, as described below, and other factors.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application by the Company to the
Commission if there are fewer than 300 record holders of Shares. It is the
intention of the Offeror to seek to cause an application for such termination
to be made as soon after consummation of the Offer as the requirements for
termination of registration of the Shares are met. If such registration were
terminated, the Company would no longer legally be required to disclose
publicly in proxy materials and annual reports distributed to stockholders the
information which it now must provide under the Exchange Act or to make public
disclosure of financial and other information in annual, quarterly and other
reports required to be filed with the Commission under the Exchange Act; the
Company would no longer be subject to Rule 13e-3 under the Exchange Act
relating to "going private" transactions; and the officers, directors and 10%
stockholders of the Company would no longer be subject to the "short-swing"
insider trading reporting and profit recovery provisions of the Exchange Act.
Furthermore, if such registration were terminated, persons holding "restricted
securities" of the Company may be deprived of their ability to dispose of such
securities under Rule 144 or Rule 144A promulgated under the Securities Act of
1933, as amended (the "Securities Act").
If registration of the Shares is not terminated prior to the Merger, then
the Shares will be delisted from all stock exchanges and the registration of
the Shares under the Exchange Act will be terminated following the
consummation of the Merger.
The Shares are currently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve
Board"), which has the effect, among other things, of allowing brokers to
extend credit on the collateral of the Shares. Depending upon factors similar
to those described above regarding listing and market quotations, it is
possible that, following the Offer, the Shares would no longer
10
<PAGE>
constitute "margin securities" for the purposes of the margin regulations of
the Federal Reserve Board and therefore could no longer be used as collateral
for loans made by brokers.
8. 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. Although neither the Offeror nor the Parent has any knowledge that
would indicate that statements contained herein based upon such documents are
untrue, neither the Offeror, the Parent nor the Dealer Manager 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 the Offeror or the Parent.
The Company is a Delaware corporation with its principal executive offices
located at 1601 Northwest Expressway, Suite 1700, Oklahoma City, Oklahoma
73118. The Company produces, markets and distributes frozen and refrigerated
processed products to the food service industry (which encompasses all aspects
of away-from-home food preparation). The Company believes it is one of the
nation's leading foodservice suppliers of meat-based pizza toppings, partially
baked and self-rising pizza crusts, burritos, frozen stuffed pastas, breaded
appetizers, soups, sauces and side dishes, and processed meat products. The
Company's customers include wholesale foodservice distributors, multi-unit
restaurant chains, food processors, grocery store delicatessens and warehouse
clubs, many of which are market leaders within their industry sectors.
Set forth below is certain summary consolidated financial data with respect
to the Company excerpted or derived from financial information contained in
the 1996 10-K. More comprehensive financial information is included in reports
and other documents filed by the Company with the Commission, as described
more fully below, and the following summary is qualified in its entirety by
reference to such reports and such other documents and all the financial
information (including any related notes) contained therein. Such reports and
other documents should be available for inspection and copies thereof should
be obtainable in the manner set forth below.
<TABLE>
<CAPTION>
FISCAL YEAR FISCAL YEAR FISCAL YEAR
ENDED ENDED ENDED
DECEMBER 28, DECEMBER 30, DECEMBER 31,
1996 1995 1994
------------ ------------ ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales........................ $835,175 $634,700 $512,352
======== ======== ========
Gross profit..................... $161,726 $134,715 $102,234
Total operating expenses......... 113,230(2) 99,612 91,025 (6)
-------- -------- --------
Operating income................. $ 48,496 $ 35,103 $ 11,209
======== ======== ========
Income (loss) from continuing
operations...................... $ 15,918(3) $ 9,601 $ (5,195)
======== ======== ========
Net income (loss)(1)............. $ 10,867(4) $(34,095)(5) $(16,198)(7)
======== ======== ========
Earnings (loss) per share:
Income (loss) from continuing
operations.................... $ 1.28 $ 0.77 $ (0.59)
======== ======== ========
Net income (loss).............. $ 0.87 $ (2.73) $ (1.85)
======== ======== ========
BALANCE SHEET DATA:
Total assets..................... $548,526 $532,572 $453,734
Long-term debt................... $310,307 $305,407 $224,260
Shareholders' equity............. $ 55,618 $ 43,229 $ 78,487
</TABLE>
- --------
(1) Includes income (loss), net of applicable income taxes, from operations of
the discontinued Retail Meat Division of $(4.1) million and $(8.5)
million, in the fiscal years ended December 30, 1995 and December 31,
1994, respectively.
11
<PAGE>
(2) Includes a net provision of $0.2 million for restructuring and
integration. (See Note 4 to the financial statements included in the 1996
10-K)
(3) Includes a tax benefit of $6.7 million from the elimination of the
deferred tax asset valuation allowance. (See Note 10 to the financial
statements included in the 1996 10-K)
(4) Includes an extraordinary loss, net of applicable income tax benefit, of
$5.1 million associated with the early extinguishment of debt. (See Note 8
to the financial statements included in the 1996 10-K).
(5) Includes the loss on disposal of the Retail Meat Division of $38.5 million
and extraordinary loss on early extinguishment of debt of $1.0 million.
(6) Includes a $10.6 million provision for restructuring and integration. (See
Note 4 to the financial statements included in the 1996 10-K)
(7) Includes an extraordinary loss of $2.5 million associated with the early
extinguishment of debt.
The Company is subject to the informational requirements of the Exchange Act
and in accordance therewith files periodic reports, proxy statements and other
information with the Commission relating to its business, financial condition
and other matters. The Company is required to disclose in such proxy
statements certain information, as of particular dates, concerning the
Company's directors and officers, their remuneration, stock options granted to
them, the principal holders of the Company's securities and any material
interests of such persons in transactions with the Company. Such reports,
proxy statements and other information may be inspected at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the regional offices of the
Commission 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. The Commission maintains a Web site (http://www.sec.gov) that
contains reports, proxy and information statements and other information
regarding companies which file electronically with the Commission. In
addition, reports, proxy and information statements and other information
concerning the Company may also be inspected at the offices of the NYSE, 20
Broad Street, New York, New York 10005.
Certain Company Projections.
To the knowledge of the Parent and the Offeror, the Company does not as a
matter of course make public forecasts as to its future financial performance.
However, in connection with the preliminary discussions concerning the
feasibility of the Offer and the Merger, the Company prepared and furnished
the Parent with certain financial projections.
The projections presented in the tables below (the "Projections") are
derived or excerpted from information provided by the Company and are based on
numerous assumptions concerning future events. The Projections have not been
adjusted to reflect the effects of the Offer or the Merger or the incurrence
of indebtedness in connection therewith. The Projections should be read
together with the other information contained in this Section 8.
FOODBRANDS AMERICA, INC.
SELECTED PROJECTIONS OF FUTURE ANNUAL OPERATING RESULTS (1)
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
1997 1998 1999 2000 2001
------ ------ -------- -------- --------
<S> <C> <C> <C> <C> <C>
Sales.................................. $903.2 $964.0 $1,021.1 $1,069.5 $1,110.2
Net Income............................. 12.5 18.3 25.4 32.9 39.2
====== ====== ======== ======== ========
</TABLE>
- --------
(1) Assumes that plant fixed expenses other than depreciation grow at 3%, the
assumed rate of inflation, and selling, general and administrative
expenses are targeted to grow at 4%. Depreciation is calculated based on
capital operating levels, and capital spending beyond 1997 is assumed to
be equal to depreciation.
12
<PAGE>
THE PROJECTIONS WERE NOT PREPARED WITH A VIEW TO PUBLIC DISCLOSURE OR
COMPLIANCE WITH PUBLISHED GUIDELINES OF THE COMMISSION OR THE GUIDELINES
ESTABLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
REGARDING PROJECTIONS OR FORECASTS AND ARE INCLUDED HEREIN ONLY BECAUSE SUCH
INFORMATION WAS PROVIDED TO THE PARENT. THESE FORWARD-LOOKING STATEMENTS ARE
SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THE PROJECTIONS. THE PROJECTIONS REFLECT NUMEROUS
ASSUMPTIONS, ALL MADE BY MANAGEMENT OF THE COMPANY, WITH RESPECT TO INDUSTRY
PERFORMANCE, GENERAL BUSINESS, ECONOMIC, MARKET AND FINANCIAL CONDITIONS AND
OTHER MATTERS INCLUDING ASSUMED INTEREST EXPENSE AND EFFECTIVE TAX RATES
CONSISTENT WITH HISTORICAL LEVELS FOR THE COMPANY, ALL OF WHICH ARE DIFFICULT
TO PREDICT, MANY OF WHICH ARE BEYOND THE COMPANY'S CONTROL AND NONE OF WHICH
WERE SUBJECT TO APPROVAL BY THE PARENT OR THE OFFEROR. ACCORDINGLY, THERE CAN
BE NO ASSURANCE THAT THE ASSUMPTIONS MADE IN PREPARING THE PROJECTIONS WILL
PROVE ACCURATE, AND ACTUAL RESULTS MAY BE MATERIALLY DIFFERENT FROM THOSE
CONTAINED IN THE PROJECTIONS. THE INCLUSION OF THE PROJECTIONS HEREIN SHOULD
NOT BE REGARDED AS AN INDICATION THAT ANY OF THE PARENT, THE OFFEROR, THE
COMPANY OR THEIR RESPECTIVE FINANCIAL ADVISORS CONSIDERED OR CONSIDER THE
PROJECTIONS TO BE A RELIABLE PREDICTION OF FUTURE EVENTS, AND THE PROJECTIONS
SHOULD NOT BE RELIED UPON AS SUCH. NONE OF THE PARENT, THE OFFEROR, THE
COMPANY AND THEIR RESPECTIVE FINANCIAL ADVISORS ASSUMES ANY RESPONSIBILITY FOR
THE VALIDITY, REASONABLENESS, ACCURACY OR COMPLETENESS OF THE PROJECTIONS.
NONE OF THE PARENT, THE OFFEROR, THE COMPANY AND ANY OF THEIR FINANCIAL
ADVISORS HAS MADE, OR MAKES, ANY REPRESENTATION TO ANY PERSON REGARDING THE
INFORMATION CONTAINED IN THE PROJECTIONS AND NONE OF THEM INTENDS TO UPDATE OR
OTHERWISE REVISE THE PROJECTIONS TO REFLECT CIRCUMSTANCES EXISTING AFTER THE
DATE WHEN MADE OR TO REFLECT THE OCCURRENCE OF FUTURE EVENTS EVEN IN THE EVENT
THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING THE PROJECTIONS ARE SHOWN TO BE
IN ERROR.
9. CERTAIN INFORMATION CONCERNING THE PARENT AND THE OFFEROR.
The Offeror is a newly incorporated Delaware corporation, and IBP
Foodservice, L.L.C. ("IBP Foodservice") is a newly formed Delaware limited
liability company. To date, neither the Offeror nor IBP Foodservice has
conducted any business other than that incident to its formation, the
execution and delivery of the Merger Agreement and the Tender Agreements (in
the case of the Offeror) and the commencement of the Offer. Accordingly, no
meaningful financial information with respect to the Offeror or IBP
Foodservice is available. The Offeror is a direct wholly owned subsidiary of
IBP Foodservice, and IBP Foodservice's sole members are the Parent and
Prepared Foods, Inc., a Texas corporation and a wholly owned subsidiary of the
Parent. The principal executive office of each of the Offeror and IBP
Foodservice is located at IBP Avenue, P.O. Box 515, Dakota City, Nebraska
68731.
The Parent, a Delaware corporation, has its principal executive office at
IBP Avenue, P.O. Box 515, Dakota City, Nebraska 68731. The Parent principally
produces fresh beef and fresh pork products. The Parent's primary products
include boxed beef and pork which are marketed mainly in the United States to
grocery chains, meat distributors, wholesalers, retailers, restaurant and
hotel chains, and processors who produce cured and smoked products, such as
bacon, ham, luncheon meats and sausage items. The Parent also produces
inedible allied products, such as hides and other items used to manufacture
products such as leather, animal feed and pharmaceuticals, and edible allied
products, which include variety meat items.
The Parent is subject to the informational requirements of the Exchange Act
and in accordance therewith files periodic reports and other information with
the Commission relating to its business, financial condition and other
matters. Such reports and other information are available for inspection and
copying at the offices of the Commission in the same manner as set forth with
respect to the Company in Section 8. Set forth below is certain summary
consolidated financial data with respect to the Parent excerpted or derived
from financial information contained in the Parent's Annual Report on Form 10-
K for the fiscal year ended December 28, 1996 (the "Parent 10-K"). More
comprehensive financial information is included in such reports and other
documents filed by the Parent with the Commission (including the Parent's
audited financial statements included in the Parent 10-K, which are
incorporated herein by reference), and the following summary is qualified in
its entirety by reference to such reports and such other documents and all the
financial information (including such audited financial statements and related
notes) contained therein.
13
<PAGE>
IBP, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
--------------------------
1996 1995 1994
------- ------- -------
(IN MILLIONS, EXCEPT
PER SHARE DATA)
<S> <C> <C> <C>
CONSOLIDATED STATEMENTS OF EARNINGS DATA:
Net sales......................................... $12,539 $12,668 $12,075
Costs and expenses................................ 12,340 12,410 11,893
Net earnings...................................... 199 258(1) 182
Net earnings per share............................ $ 2.06 $ 2.67 $ 1.90
CONSOLIDATED BALANCE SHEET DATA:
Total current assets.............................. $ 1,111 $ 1,069 $ 974
Total assets...................................... 2,174 2,028 1,865
Total current liabilities......................... 604 642 615
Total liabilities................................. 971 1,005 1,085
Total stockholders' equity........................ 1,204 1,023 780
</TABLE>
- --------
(1) Includes an extraordinary loss, net of applicable income taxes of $22.2
million for early extinguishment of debt.
The name, citizenship, business address, present principal occupation, and
material positions held during the past five years of each of the directors
and executive officers of the Parent and the Offeror are set forth in Annex I
to this Offer to Purchase.
Except as described in this Offer to Purchase, none of the Offeror, the
Parent, or to the best knowledge of the Offeror or the Parent, any of the
persons listed in Annex I to this Offer to Purchase, owns or has any right to
acquire any Shares, and none of them has effected any transaction in the
Shares during the past 60 days.
Except as set forth in this Offer to Purchase, none of the Offeror, the
Parent or, to the best knowledge of the Offeror or the Parent, any of the
persons listed in Annex I hereto, has any contract, arrangement, understanding
or relationship with any other person with respect to any securities of the
Company, including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or the voting of any
such securities, joint ventures, loan or option arrangements, puts or calls,
guaranties of loans, guaranties against loss or the giving or withholding of
proxies. Except as set forth in this Offer to Purchase, there have been no
contacts, negotiations or transactions between the Offeror or the Parent, or,
to the best of their knowledge, any of the persons listed in Annex I hereto,
on the one hand, and the Company or its affiliates, on the other hand,
concerning a merger, consolidation or acquisition, a tender offer or other
acquisition of securities, an election of directors, or a sale or other
transfer of a material amount of assets. Except as described in this Offer to
Purchase, none of the Offeror, the Parent or, to the best knowledge of the
Parent or the Offeror, any of the persons listed in Annex I hereto, has had
any transaction with the Company or any of its executive officers, directors
or affiliates that would require disclosure under the rules and regulations of
the Commission applicable to the Offer.
10. SOURCE AND AMOUNT OF FUNDS.
This Offer is not conditioned upon any financing arrangements. The total
amount of funds required by the Offeror to consummate the Offer and the Merger
and to pay related fees and expenses is expected to be approximately $310
million, excluding the Company's debt obligations. The source of the funds
will include available cash and borrowing from a syndicate of banks pursuant
to the Amended and Restated Multi-Year Credit Agreement (the "Credit
Facility") dated December 21, 1995 among the Parent, Bank of America National
Trust and Savings Association, as Co-Agent, and First Bank National
Association, as Administrative Agent, which provides for borrowings up to an
aggregate principal amount of $500 million. The Credit Facility is a revolving
facility with a maturity date of December 20, 2000, which may be extended for
one year increments annually during the revolving period with the consent of
the banks involved. As of December 28, 1996, there were total outstanding
borrowings of approximately $50 million with an applicable rate of interest of
5.5%.
14
<PAGE>
11. BACKGROUND OF THE OFFER; PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH
THE COMPANY.
The Parent in the ordinary course of its business has supplied the Company
(including its predecessors) with various raw materials for use in the
production of the Company's products. In addition, until May 1995, the Parent
produced and packaged certain ham products under the Company's labels pursuant
to a supply agreement with the Company (the "Co-packing Agreement"). IBP sold
products to the Company during the 1994 and 1995 fiscal years in approximate
amounts of $18 million and $12 million, respectively, under the Co-packing
Agreement.
In 1995, an executive officer of the Parent contacted a representative of
the Joseph Littlejohn & Levy Fund, L.P. and Joseph Littlejohn & Levy Fund II,
L.P. (collectively, "JLL") to discuss JLL's intention with respect to JLL's
investment in the Company. These discussions were preliminary and did not
result in any negotiations with respect to a possible transaction.
In the summer of 1996, the Parent determined that the Company's Common
Stock, which was then trading at approximately $11.00 per share, may have
become undervalued relative to stocks of other companies in the industry, and
the Parent commenced purchases of shares of such Common Stock from time to
time in open market transactions. During the period from July 11, 1996 through
January 24, 1997, the Parent purchased an aggregate of 497,800 shares of
Common Stock at various prices, with an average purchase price of $13.42 per
Share.
On December 20, 1996, R. Randolph Devening, Chairman of the Board, President
and Chief Executive Officer of the Company, met with Robert L. Peterson,
Chairman of the Board and Chief Executive Officer of the Parent, and Larry
Shipley, Executive Vice President-Corporate Development of the Parent, to
discuss the Company's business relationship with the Parent. In the course of
such discussions, Mr. Devening informed Messrs. Peterson and Shipley that JLL
was evaluating alternatives with respect to JLL's investment in the Company.
Mr. Devening acknowledged the Parent's past discussions with JLL and inquired
whether the Parent continued to have an interest in the Company. Messrs.
Peterson and Shipley indicated that the Parent would have an interest in
learning more about the Company's business, particularly information with
respect to recent acquisitions by the Company.
On January 13, 1997, the Company's financial advisor delivered to the Parent
a draft confidentiality and standstill agreement relating to the Company. The
Parent executed the confidentiality and standstill agreement with the Company
on January 25, 1997 and thereafter the Company made certain due diligence
materials available to the Parent.
On January 30, 1997, representatives of the Parent attended a presentation
made by the Company's management in Oklahoma City regarding the Company's
business. Following the presentation, the Parent was requested to submit a
preliminary indication of interest concerning a possible acquisition of the
Company.
On February 14, 1997, the Board of Directors of the Parent reviewed the
status of the Parent's evaluation of the Company and authorized the Parent's
management to submit a preliminary indication of interest with respect to a
possible acquisition by the Parent of the capital stock of the Company. This
preliminary indication of interest, which was submitted on February 18, 1997,
indicated that, subject to further due diligence review, the Parent was
interested in discussing an acquisition of the Company at a price between
$18.00 and $20.00 per share.
On March 3, 1997, the Parent's financial advisor conducted an on-site due
diligence review of information provided by the Company. From March 11, 1997
through March 13, 1997, representatives of the Parent visited certain major
manufacturing facilities of the Company. The Company also furnished the Parent
with a draft of a proposed merger agreement. On March 13 and 14, 1997,
management personnel of the Parent, along with its
15
<PAGE>
outside legal counsel, conducted due diligence investigations of the Company
and conducted various interviews with members of the Company's management. On
March 18, representatives of the Parent's and the Company's respective
financial advisors met to discuss the valuation of the Company and the
potential transaction.
On March 19, 1997, the Parent provided the Company with comments to the
draft merger agreement which had been previously provided by the Company. The
comments included a draft tender agreement which the Parent indicated it would
require JLL and The Airlie Group, L.P. ("Airlie") to enter into in connection
with the Merger Agreement. On March 20, 1997, the Company, the Parent and
their respective legal counsel met to begin negotiations on the Merger
Agreement and the Tender Agreements. These negotiations continued from March
20, 1997 through March 25, 1997. The initial negotiations centered on a
possible acquisition price of $23.50 per share. The Parent indicated that its
willingness to proceed at such price was, however, conditioned upon the
satisfactory completion of due diligence, the resolution to its satisfaction
of certain "earn-out" payment obligations of the Company to third parties and
the resolution of certain issues under the Merger Agreement and the Tender
Agreements. As these negotiations evolved, it became apparent to the Parent
that the arrangements relating to settling such payment obligations would
involve higher than anticipated costs. In light of these costs, the Parent
revised its offer to $23.40 per share.
In the afternoon of March 25, 1997 the Board of Directors of the Parent met
to review and approve the Offer, the Merger, the Merger Agreement and the
Tender Agreements. Following such meeting, the Parent, the Offeror and the
Company executed and delivered the Merger Agreement, and the Parent, the
Offeror, JLL and Airlie executed and delivered the Tender Agreements.
On March 26, 1997, the Parent and the Company issued a joint press release
announcing the signing of the definitive Merger Agreement and Tender
Agreements. On April 1, 1997, pursuant to the terms of the Merger Agreement,
the Offeror commenced the Offer.
12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY.
The purpose of the Offer, the Merger, the Merger Agreement and the Tender
Agreements is to enable the Parent to acquire control of, and the entire
equity interest in, the Company. The Parent believes that the acquisition of
the Company will represent a significant advancement in its strategy to
diversify beyond the core fresh meat processing business and extend its
product base with value-added, branded products.
Under the DGCL, the approval of the Board of Directors of the Company and
the affirmative vote of the holders of a majority of the outstanding Shares
are required to approve and adopt the Merger Agreement and the transactions
contemplated thereby, including the Merger. The Board of Directors of the
Company has approved the Offer, the Merger, the Merger Agreement and the
Tender Agreements and the transactions contemplated thereby (including the
Charter Amendment), and, unless the Merger is consummated pursuant to the
short form merger provisions under the DGCL described below, the only
remaining corporate actions of the Company required to consummate the Offer
and the Merger are (i) the approval and adoption of the Merger Agreement and
the transactions contemplated thereby by the affirmative vote of the holders
of a majority of the Shares and (ii) the filing of the Certificate of
Amendment. If the Minimum Condition is satisfied and Shares are purchased
pursuant to the Offer, the Offeror will have sufficient voting power to cause
the approval and adoption of the Merger Agreement and the transactions
contemplated thereby without the affirmative vote of any other stockholder.
In the Merger Agreement, the Company has agreed to take all action necessary
to convene a meeting of its stockholders as promptly as practicable after the
expiration of the Offer for the purpose of considering and taking action on
the Merger Agreement and the Merger, if such action is required by the DGCL.
The Parent has agreed that all Shares owned by the Parent, the Offeror or any
of their affiliates will be voted in favor of the Merger Agreement and the
Merger.
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Short Form Merger. Under the DGCL, if the Offeror has acquired at least 90%
of the outstanding Shares, the Offeror will be able to approve the Merger
without a vote of the Company's stockholders. In such event, the Offeror
anticipates that it will take all necessary and appropriate action to cause
the Merger to become effective as soon as practicable after such acquisition
without a meeting of the Company's stockholders. If the conditions to the
Offeror's obligation to purchase Shares in the Offer are satisfied prior to
the tender of 90% of the outstanding Shares being tendered into the Offer, the
Offeror may, subject to certain limitations set forth in the Merger Agreement,
delay its purchase of the Shares tendered to it in the Offer. See Section 1.
If the Offeror does not acquire at least 90% of the outstanding Shares
pursuant to the Offer or otherwise, a significantly longer period of time may
be required to effect the Merger, because a vote of the Company's stockholders
would be required under the DGCL.
Appraisal Rights. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders of the Company will
have certain rights under the DGCL to dissent and demand appraisal of, and to
receive payment in cash for 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 (excluding any element
of value arising from the accomplishment or expectation of the Merger)
required to be paid in cash to such dissenting holders for their Shares. In
addition, such dissenting stockholders would be entitled to receive payment of
a fair rate of interest from the date of consummation of the Merger on the
amount determined to be the fair value of their Shares. In determining the
fair value of the Shares, a Delaware court would be required to take into
account all relevant factors. Accordingly, such determination could be based
upon considerations other than, or in addition to, the market value of the
Shares, including, among other things, asset values and earning capacity. In
Weinberger v. UOP, Inc., the Delaware Supreme Court stated, among other
things, that "proof of value by any techniques or methods which are generally
considered acceptable in the financial community and otherwise admissible in
court" should be considered in an appraisal proceeding. Therefore, the value
so determined in any appraisal proceeding could be different from the price
being paid in the Offer.
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 although
the remedy ordinarily available to minority stockholders in a cash-out merger
is the right to appraisal described above, a damages remedy or injunctive
relief may be available if a merger is found to be the product of procedural
unfairness, including fraud, misrepresentation or other misconduct.
Rule 13e-3. The Commission has adopted Rule 13e-3 under the Exchange Act
which is applicable to certain "going private" transactions and which may
under certain circumstances be applicable to the Merger or another business
combination following the purchase of Shares pursuant to the Offer or
otherwise in which the Offeror seeks to acquire the remaining Shares not held
by it. The Offeror believes, however, that Rule 13e-3 will not be applicable
to the Merger if the Merger is consummated within one year after the
termination of the Offer at the same per Share price as paid in the Offer. If
applicable, 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. Except as otherwise set forth in this Offer to
Purchase, it is expected that, initially following the Merger, the business
and operations of the Company will be continued by the Surviving Corporation
substantially as they are currently being conducted.
The Parent will continue to evaluate the business and operations of the
Company during the pendency of the Offer and after the consummation of the
Offer and the Merger, and will take such actions as it deems appropriate under
the circumstances then existing. The Parent intends to seek additional
information about the
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Company during this period. Thereafter, the Parent intends to review such
information as part of a comprehensive review of the Company's business,
operations, capitalization and management with a view to optimizing the
Company's potential contribution to the Parent's business.
Except as indicated in this Offer to Purchase, the 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 of its subsidiaries, a sale or transfer of a
material amount of assets of the Company or any of its subsidiaries 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 Company's management.
13. THE MERGER AGREEMENT AND THE TENDER AGREEMENTS.
The following summary of certain provisions of the Merger Agreement and the
Tender Agreements, copies of which are filed as exhibits to the Schedule 14D-
1, is qualified in its entirety by reference to the text of the Merger
Agreement and the Tender Agreements.
The Merger Agreement
The Offer. The Offeror commenced the Offer in accordance with the terms of
the Merger Agreement. Upon the terms and subject to the conditions of the
Merger Agreement, the Parent, the Offeror and the Company are required to use
their reasonable best efforts to take all action necessary to consummate the
transactions contemplated by the Merger Agreement.
Company Actions. Pursuant to the Merger Agreement, the Company has agreed
that, concurrently with the commencement of the Offer, it will file with the
Commission a Solicitation/Recommendation Statement on Schedule 14D-9
containing the recommendation of the Company's Board of Directors that the
Company's stockholders accept the Offer and approve the Merger. The Company
also has agreed to disseminate the Schedule 14D-9 to stockholders of the
Company as and to the extent required by applicable federal securities laws.
The Merger. The Merger Agreement provides that, upon the terms and subject
to the conditions of the Merger Agreement, and in accordance with the DGCL,
the Offeror shall be merged with and into the Company at the Effective Time
with the Company being the Surviving Corporation. Upon the effectiveness of
the Merger, the separate corporate existence of the Offeror shall cease and
the Company shall continue as the Surviving Corporation and succeed to and
assume all the rights and obligations of the Offeror in accordance with the
DGCL. From and after the effective date of the Merger (the "Effective Date"),
the Certificate of Incorporation and Bylaws of the Offeror shall be the
Certificate of Incorporation and Bylaws of the Surviving Corporation until
changed or amended in accordance with the provisions of applicable law. The
directors of the Offeror immediately prior to the Effective Time will be the
initial directors of the Surviving Corporation, and the officers of the
Company immediately prior to the Effective Time will be the initial officers
of the Surviving Corporation, in each case until the earlier of their
resignation or removal or until their successors are elected or appointed and
qualified.
Conversion of Securities. At the Effective Time, each Share issued and
outstanding immediately prior thereto (other than Shares held by the Company
as treasury stock, Shares owned by any wholly owned subsidiary of the Company,
Shares owned by the Parent or the Offeror or any other subsidiary thereof, and
Dissenters' Shares (as defined below)) shall be cancelled and converted into
and become the right to receive, upon surrender of the certificate(s)
representing such Shares, the Offer Price. Each share of common stock of the
Offeror issued and outstanding immediately prior to the Effective Time shall,
at the Effective Time, be converted into one fully paid and nonassessable
share of common stock, par value $.01 per share, of the Surviving Corporation.
Dissenting Shares. Shares which are held by holders who have properly
exercised and perfected appraisal rights with respect thereto under Section
262 of the DGCL ("Dissenters' Shares") will not be cancelled and converted
into the right to receive the Offer Price pursuant to the Merger, but shall be
entitled to receive payment
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of the appraised value of such Shares in accordance with the provisions of
Section 262 (except that Shares held by a stockholder who fails to perfect or
withdraws his or her demand for appraisal of such Shares or loses his or her
right to such payment shall be cancelled and converted, as of the Effective
Time, into the right to receive the Offer Price).
Merger Without a Meeting of Stockholders. In the event that the Offeror
shall acquire at least 90% of the outstanding Shares, the parties shall take
all necessary and appropriate action to cause the Merger to become effective
without a meeting of the stockholders of the Company, in accordance with
Section 253 of the DGCL.
Representations and Warranties. In the Merger Agreement, the Company has
made customary representations and warranties to the Parent and the Offeror,
including, but not limited to, representations and warranties relating to the
Company's organization and qualification; authority to enter into the Merger
Agreement and carry out related actions; capitalization; subsidiaries;
undisclosed liabilities; absence of certain material changes or events; title
to assets; condition of assets; material contracts and commitments; required
consents and approvals; compliance with applicable laws; intellectual
property, employee benefit plans, tax and environmental matters; and filings
made by the Company with the Commission under the Securities Act or the
Exchange Act (including financial statements included in the documents filed
by the Company under those Acts).
The Parent and the Offeror also have made customary representations and
warranties to the Company, including, but not limited to, representations and
warranties relating to the Offeror's and the Parent's organization, authority
to enter into the Merger Agreement and carry out related actions, and required
consents and approvals. The Parent and the Offeror have also represented that
they have on the date of the Merger Agreement and will have upon acceptance of
any Shares pursuant to the Offer sufficient available funds (through existing
credit arrangements or otherwise) to pay the Offer Price.
Covenants Relating to the Conduct of Business. The Company has agreed that
it will, and will cause its subsidiaries to, carry on their respective
businesses in the ordinary course of business consistent with past practice,
use their commercially reasonable efforts to preserve the goodwill of those
having business relationships with them, use their reasonable best efforts to
preserve intact their current business organizations, keep available the
services of their current officers and key employees, and preserve their
relationships with customers, suppliers and others having business dealings
with them.
The Company has agreed that, except as contemplated by the Merger Agreement,
each of the Company and its subsidiaries shall not, without the prior written
consent of the Parent (which consent may not be unreasonably withheld or
delayed):
(a) incur any additional indebtedness for borrowed money, assume,
guarantee, endorse or otherwise become responsible for the obligations of
any other individual, partnership, firm or corporation or make any loans or
advances to any individual, partnership, firm or corporation in an amount
in excess of $30,000,000; provided, however, that total indebtedness for
borrowed money under the Company's Credit Agreement with Chase Manhattan
Bank, as of the Effective Date, shall not exceed $251,000,000;
(b) subject to certain exceptions, enter into any capital or operating
leases of equipment;
(c) except for the Charter Amendment, amend its charter or bylaws; issue,
deliver, sell, pledge, dispose of or otherwise encumber any shares of its
capital stock, any other voting securities or equity equivalent or any
securities convertible or exchangeable into, or any rights, warrants or
options to acquire, any such shares, voting securities or convertible
securities or equity equivalent, except for the issuance of up to 1,762,752
shares of the Company's common stock pursuant to the exercise of certain
enumerated options and warrants to purchase such shares which are
outstanding on the date of the Merger Agreement;
(d) mortgage, pledge or otherwise encumber any of its material properties
or assets or sell, transfer (except pursuant to intercompany transfers) or
otherwise dispose of any of its material properties or material assets or
cancel, release or assign any indebtedness owed to it or any claims held by
it, except in the ordinary course of business and consistent with past
practice;
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(e) acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial portion of the assets of or equity in, or by any
other manner, any business or any corporation, partnership, limited
liability company, association or other business organization or division
thereof or otherwise acquire or agree to acquire any assets, in each case
that are material, individually or in the aggregate, to the Company and its
subsidiaries, taken as a whole;
(f) subject to certain exceptions, enter into, terminate or permit any
renewal or extension options to expire with respect to any material
contract or agreement, or make any material change in any of its leases and
contracts, other than in the ordinary course of business and consistent
with past practice;
(g) declare, set aside or pay any dividend or distribution with respect
to its capital stock or directly or indirectly redeem, purchase or
otherwise acquire any of its capital stock or effect a split or
reclassification of any of its capital stock or a recapitalization, except
for intercompany transactions in the ordinary course of business consistent
with past practice;
(h) alter through merger, liquidation, reorganization, restructuring or
in any other fashion its corporate structure or ownership;
(i) enter into or adopt or amend any existing severance plan, agreement
or arrangement, any benefit plan or arrangement, or any employment or
consulting agreement, except as required by law;
(j) increase the compensation payable or to become payable to its
officers or employees, except for increases in the ordinary course of
business in accordance with past practices, or grant any severance or
termination pay to, or enter into any employment or severance agreement
with, any of its directors or officers, or establish, adopt, enter into or,
except as may be required to comply with applicable law, amend in any
material respect or take action to enhance in any material respect or
accelerate any rights or benefits under 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 of its directors, officers or employees;
(k) subject to certain exceptions, settle or compromise any suit,
proceeding or claim or threatened suit, proceeding or claim for an amount
that is more than $50,000 in the case of any individual suit, provided that
such settlement or compromise shall be made in the ordinary course of
business in accordance with past practice;
(l) knowingly violate or fail to perform any material obligation or duty
imposed upon it by any applicable foreign, federal, state or local law,
rule, regulation, guideline, ordinance, order, judgment or decree;
(m) make any tax election or change any method of accounting for tax
purposes, in each case except to the extent required by law, or settle or
compromise any tax liability;
(n) change any of the accounting principles or practices used by it
except as required by the Commission or the Financial Accounting Standards
Board;
(o) subject to certain exceptions, grant any license relating to its
intellectual property, except as required by existing agreements of the
Company;
(p) enter into an agreement to enter into a new line of business, or
expend over $10,000 to produce or provide a product in a new line of
business; or
(q) authorize or enter into an agreement, contract, commitment or
arrangement to do any of the foregoing.
The Company also has agreed that, until the Effective Date, it will not
terminate, amend, modify or waive any provision of any confidentiality or
"standstill" agreement to which the Company or any of its subsidiaries is a
party.
Prior to the Effective Date, the Offeror will not transact any business or
engage in any activities other than in connection with the transactions
contemplated by the Merger Agreement.
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No Solicitation. The Company has agreed in the Merger Agreement that, from
the date of the Merger Agreement until the earlier of the Effective Date or
the consummation of the Offer, (a) neither the Company nor its subsidiaries
shall, and the Company shall not authorize or permit its officers, directors,
employees, agents or representatives (including, without limitation, any
investment banker, attorney or accountant retained by it or any of its
subsidiaries) to, initiate, solicit or knowingly encourage, directly or
indirectly, any inquiries or the making or implementation of any proposal or
offer (including, without limitation, any proposal or offer to its
stockholders) with respect to a merger, acquisition, consolidation, tender
offer, exchange offer or similar transaction involving, or any purchase of all
or any significant portion of the assets or any significant portion of the
equity securities (excluding any issuable pursuant to agreements existing on
the date of the Merger Agreement) of, the Company or its subsidiaries (an
"Acquisition Proposal"), or engage in any negotiations concerning, or provide
any confidential information or data to, or have any substantive discussions
with, any person relating to an Acquisition Proposal, or otherwise knowingly
facilitate any effort or attempt to make or implement an Acquisition Proposal;
(b) the Company will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing; and (c) the Company will notify the
Parent immediately if any such Acquisition Proposals are received by, any such
information is requested from, or any such negotiations or discussions are
sought to be initiated or continued with, the Company. Notwithstanding the
foregoing, nothing contained in this paragraph shall prohibit the Board of
Directors of the Company from (i) furnishing information to or entering into
discussions or negotiations with any person or entity that indicates an
interest in making a Superior Proposal (as defined below), if, and only to the
extent that, (A) the Board of Directors of the Company reasonably determines
in good faith after consultation with outside counsel that such action is
required for the Board of Directors to comply with its fiduciary duties to
stockholders under applicable law and (B) the Company keeps the Parent
informed of the status and terms of any such discussions or negotiations; and
(ii) to the extent applicable, complying with Rules 14d-9 and 14e-2
promulgated under the Exchange Act with regard to an Acquisition Proposal. For
purposes of the Merger Agreement, "Superior Proposal" means an unsolicited
bona fide Acquisition Proposal by a third party in writing that the Board of
Directors of the Company determines in its good faith reasonable judgment
(based on the advice of a nationally recognized investment banking firm)
provides greater aggregate value to the Company's stockholders than the
transactions contemplated by the Merger Agreement and for which any required
financing is committed or which, in the good faith reasonable judgment of the
Board of Directors of the Company (based on the advice of a nationally
recognized investment banking firm), is reasonably capable of being financed
by such third party. Nothing in this paragraph shall (i) permit the Company to
terminate the Merger Agreement, (ii) permit the Company to enter into any
agreement with respect to an Acquisition Proposal during the term of the
Merger Agreement or (iii) affect any other obligation of any party to the
Merger Agreement.
Options. Pursuant to the Merger Agreement, immediately prior to the
Effective Time, subject to obtaining any consent which may be necessary from
the holder of the outstanding options, the Company shall cancel and settle, by
cash payment to the holders thereof, all outstanding options (whether or not
currently exercisable or vested) to purchase shares of the Company's common
stock granted by the Company prior to the date of the Merger Agreement under
the Company's stock option plans and agreements. Except as otherwise provided
pursuant to the terms of such stock option plans and agreements, such cash
payment with respect to each canceled option shall be in an amount equal to
the excess, if any, of the Offer Price over the per share exercise price of
such canceled option, multiplied by the number of shares of common stock into
which such canceled option would be exercisable, less any applicable taxes.
Charter Amendment. In connection with the Merger Agreement and the Tender
Agreements, the Board of Directors of the Company has approved, and
stockholders representing a majority of the Shares have approved by written
consent in lieu of a meeting of stockholders, the Charter Amendment, which
excludes the Merger Agreement, the Tender Agreements and the transactions
contemplated therein from the restrictions of Article Fifth of the Charter
(relating to certain stock transfer restrictions intended to preserve the tax
benefits from the Company's previous net operating losses). The Company has
filed with the Commission the Information Statement relating to the Charter
Amendment and has agreed to distribute definitive copies of the Information
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Statement to the Company's stockholders as soon as practicable. The Company
has agreed to file with the Secretary of State of the State of Delaware the
Certificate of Amendment relating to the Charter Amendment the next business
day following the expiration of any required period of distribution of the
Information Statement.
Indemnification; Insurance. In the Merger Agreement, the Company undertakes
to indemnify and hold harmless, and, after the Effective Date, the Surviving
Corporation and the Parent undertake to indemnify and hold harmless, each
present and former director and officer of the Company (the "Indemnified
Parties") against any expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such
Indemnified Party in connection with any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, to which such Indemnified Party was made, or threatened to be
made, a party by reason of the fact that such Indemnified Party was or is a
director, officer, employee or agent of the Company, or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise and which
arises out of or pertains to any action or omission occurring prior to the
Effective Date (including, without limitation, any which arise out of or
relate to the transactions contemplated by the Merger Agreement) to the full
extent permitted under the DGCL (and the Company or the Surviving Corporation
and the Parent, as the case may be, will advance expenses to each such person
to the full extent so permitted); provided, that any determination required to
be made with respect to whether an Indemnified Party's conduct complied with
the standards set forth in the DGCL shall be made by independent counsel
selected by such Indemnified Party and reasonably satisfactory to the Company
or the Surviving Corporation, as the case may be (which shall pay such
counsel's fees and expenses). For five years after the Effective Date, the
Surviving Corporation and the Parent shall use their respective reasonable
best efforts to provide officers' and directors' liability insurance for
events occurring prior to the Effective Time covering the Indemnified Parties
who are currently covered by the Company's officers' and directors' liability
insurance policy on terms no less favorable than those of such policy in terms
of coverage and amount or, if substantially similar coverage is unavailable,
the best available coverage; provided, however, that the Surviving Corporation
shall not be required to pay a per annum amount of premiums for such insurance
in excess of approximately $560,000.
Employee Benefits. The Surviving Corporation and its subsidiaries will
honor, and the Parent agrees to cause the Surviving Corporation and its
subsidiaries to honor, all of the Company's employment, transition employment,
non-compete, consulting, benefit, compensation or severance agreements in
accordance with their terms and, for a period of not less than twelve months
immediately following the Effective Date, all of the Company's written
employee severance plans (or policies), in existence on the date of the Merger
Agreement, including, without limitation, the separation pay plan for
corporate officers. If any salaried employee of the Company becomes a
participant in any employee benefit plan, practice or policy of the Parent,
the Offeror, any of their affiliates or the Surviving Corporation, such
employee shall be given credit under such plan, practice or policy for all
service prior to the Effective Time with the Company, or any predecessor
employer (to the extent such credit was given by the Company), and all service
after the Effective Time and prior to the time such employee becomes such a
participant, for purposes of eligibility and vesting and for all other
purposes for which such service is either taken into account or recognized;
provided, however, such service need not be credited to the extent it would
result in a duplication of benefits, including, without limitation, benefit
accrual service under defined benefit plans. For at least twelve months
following the Effective Date, the Parent shall cause the Surviving Corporation
to maintain employee benefits for management and hourly employees of the
Company and its subsidiaries that are no less than the employee benefits, in
the aggregate, available to similarly situated management and hourly employees
of the Parent and its subsidiaries. Nothing contained in this paragraph,
however, shall be construed to obligate the Parent or any of its subsidiaries
to employ, or cause the Company or its subsidiaries from and after the
Effective Date to continue to employ, any management or hourly employee of the
Company or its subsidiaries.
Transition Agreements. The Parent and the Offeror agree in the Merger
Agreement that the Surviving Corporation shall maintain and shall comply with
certain transition employment agreements, and stay bonus agreements between
the Company and several officers of the Company, and the employment agreement
with
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R. Randolph Devening (collectively referred to herein as the "Transition
Agreements"). The Company agrees not to amend the Transition Agreements after
the date of the Merger Agreement without first obtaining the Parent's consent.
Restructuring of Transaction. Notwithstanding any provision contained in the
Merger Agreement to the contrary, in the event that any claim, suit,
proceeding or action is brought against any of the Parent, the Offeror or the
Company seeking to limit, void or enjoin any of the transactions contemplated
by the Merger Agreement or the Tender Agreements or any taken by the Board of
Directors of the Company to facilitate any transaction contemplated by the
Merger Agreement or the Tender Agreements on the basis of the transfer
restriction contained in Article Fifth of the Company's Charter or the rules
of the NYSE, either the Parent or the Company may, at its option, upon written
notice to the other parties, elect to amend the Merger Agreement to provide
for a cash merger of the Offeror with and into the Company in lieu of the
Offer upon terms and conditions which are substantially consistent with those
contained in the Merger Agreement, and all parties shall as promptly as
practicable following receipt of such notice amend the Merger Agreement.
Board Representation. The Merger Agreement provides that promptly upon the
purchase of and payment for any Shares which represent at least a majority of
the outstanding Shares (on a fully diluted basis), the Parent shall be
entitled to designate such number of directors, rounded up to the next whole
number, on the Board of Directors of the Company as is equal to the product of
(i) the total number of directors on such Board (giving effect to the
directors designated by the Parent pursuant to this sentence) and (ii) the
percentage that the number of Shares so accepted for payment bears to the
total number of Shares then outstanding. The Company has agreed, upon the
request of the Offeror, to use its best efforts promptly either to increase
the size of the Board of Directors of the Company or secure the resignations
of such number of its incumbent directors, or both, as is necessary to enable
the Parent's designees to be so elected to the Company's Board of Directors,
and to take all actions available to the Company to cause the Parent's
designees to be so elected. The Company also shall cause the Parent's
designees to constitute at least the same percentage (rounded up to the next
whole number) as is on the Company's Board of Directors of (i) each committee
of the Company's Board of Directors, (ii) each board of directors of each
subsidiary, and (iii) each committee of each such board. The Company has
agreed to take all actions required pursuant to Section 14(f) of the Exchange
Act and Rule 14f-1 promulgated thereunder to effect any such election,
including mailing to stockholders the information required to be disclosed
pursuant thereto. The Parent or the Offeror will supply the Company any
information with respect to either of them and their nominees, officers,
directors and affiliates required by Section 14(f) and Rule 14f-1. From and
after the time, if any, that the Parent's designees constitute a majority of
the Company's Board of Directors and prior to the Effective Date, any
amendment of the Merger Agreement by the Company, any termination of the
Merger Agreement by the Company, any extension of time for performance of any
of the obligations of the Parent or the Offeror under the Merger Agreement,
any waiver of any condition to the Company's obligations under the Merger
Agreement or any of the Company's rights under the Merger Agreement or action
to amend or otherwise modify the Charter or by-laws may be effected only by
the action of a majority of the directors of the Company then in office who
were not officers of the Parent or designees, stockholders or affiliates of
the Parent, which action shall be deemed to constitute the action of any
committee specifically designated by the Board of Directors of the Company to
approve the actions and transactions contemplated hereby and the full Board of
Directors; provided, that if there shall be no such directors, such actions
may be effected by majority vote of the entire Board of Directors of the
Company.
Access to Information. Upon reasonable advance notice, the Company shall
allow the Parent and the Offeror, at their own expense, during regular
business hours through the Parent's and the Offeror's employees, agents and
representatives, to make such investigation of the businesses, properties,
books and records of the Company and its subsidiaries, and to conduct such
examination of the condition of the Company and its subsidiaries, as the
Parent and the Offeror deem necessary or advisable to familiarize themselves
further with such businesses, properties, books, records, condition and other
matters, and to verify the representations and warranties of the Company in
the Merger Agreement.
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Consents and Reasonable Best Efforts. The Parent, the Offeror and the
Company shall use their reasonable best efforts to make all filings required
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR Act"), as soon as practicable. The Parent, the Offeror and the
Company shall, as soon as practicable, use their reasonable best efforts
required (i) to obtain all waivers, consents, approvals and agreements of, and
to give all notices and make all other filings with, any persons, including
governmental entities, necessary or appropriate to authorize, approve or
permit the Merger, and (ii) to defend and cooperate with each other in
defending any lawsuits or other legal proceedings, including appeals, whether
individual or administrative and whether brought derivatively or on behalf of
third parties (including governmental entities or officials) challenging the
Merger Agreement or the consummation of the transactions contemplated thereby.
The Parent and the Offeror will furnish to the Company, and the Company will
furnish to the Parent and the Offeror, such necessary information and
reasonable assistance as the Company, or the Parent and the Offeror, as the
case may be, may request in connection with its or their preparation of all
necessary filings with any third parties, including governmental entities.
Prior to the Effective Date, the Company and the Parent shall each use its
respective commercially reasonable efforts to obtain the consent or approval
of each person whose consent or approval shall be required in order to permit
the Company, the Parent or the Offeror, as the case may be, to consummate the
Offer and the Merger. Upon the terms and subject to the conditions of the
Merger Agreement, each of the parties thereto covenants and agrees to use its
reasonable best efforts to take, or cause to be taken, all action or 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 thereby.
Notification of Certain Matters. The Company shall give prompt notice to the
Parent and the Offeror, and the Parent and the Offeror shall give prompt
notice to the Company, of (a) the occurrence, or failure to occur, of any
event the occurrence or failure of which would be likely to cause any
representation or warranty contained in the Merger Agreement to be untrue or
inaccurate in any material respect any time from the date of the Merger
Agreement to the Effective Date and (b) any material failure of the Company,
the Parent or the Offeror, as the case may be, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it under
the Merger Agreement.
Conditions Precedent. The respective obligations of each party to effect the
Merger shall be subject to the satisfaction or waiver, where permissible,
prior to the Effective Time, of the following conditions: (a) if required by
applicable law, the Merger Agreement and the Merger shall have been approved
by the requisite vote of the holders of the Shares; and (b) no injunction or
any other order, decree or ruling shall have been issued by a court of
competent jurisdiction or by a governmental entity, nor shall any statute,
rule, regulation or executive order have been promulgated or enacted by any
governmental entity, in each case that prevents the consummation of the
Merger; provided, however, that each of the parties shall have used reasonable
efforts to prevent the entry of any such injunction or other order, decree or
ruling and to appeal promptly the same after issuance thereof. The obligations
of the Parent and the Offeror to effect the Merger shall also be subject to
the satisfaction or waiver prior to the Effective Time of the condition that
the Offeror shall have accepted for payment and paid for Shares tendered
pursuant to the Offer (provided that this condition shall be deemed satisfied
if the Offeror's failure to accept for payment and pay for such Shares
breaches the Merger Agreement or violates the terms and conditions of the
Offer).
Termination. The Merger Agreement provides that it may be terminated, and
the Merger abandoned, at any time prior to the Effective Time, whether before
or after approval by the stockholders of the Company: (a) by the mutual
written consent of the Board of Directors of each of the Parent and the
Company, (b) by either the Company or the Parent, if the Merger has not been
consummated by the close of business on September 24, 1997, or such other
date, if any, as the Company and the Parent shall agree upon; provided,
however, that the right to terminate the Merger Agreement pursuant to this
clause (b) shall not be available to any party whose failure to fulfill any of
its obligations contained in the Merger Agreement has been the cause of, or
resulted in, the failure of the Merger to have occurred prior to the aforesaid
date; (c) by either the Company or the Parent, if the acquisition of the
Company has been restructured to be a cash merger pursuant to the provision
described under "Restructuring of Transaction" above and the stockholders of
the Company fail to approve and adopt the Merger Agreement and the Merger; (d)
by either the Company or the Parent, if any governmental entity shall
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have issued any judgment, injunction, order or decree enjoining the Parent or
the Company from consummating the Offer or the Merger and such judgment,
injunction, order or decree shall become final and nonappealable; (e) by the
Company or the Parent if the Offer terminates or expires on account of the
failure of any condition described below in Section 15 without the Parent
having purchased any Shares thereunder; provided, however, that the right to
terminate the Merger Agreement pursuant to this clause (e) shall not be
available to any party whose failure to fulfill any of its obligations
contained in the Merger Agreement has been the cause of, or resulted in, the
failure of any such condition; (f) by the Parent prior to the consummation of
the Offer if (i) the Board of Directors of the Company shall not have
recommended, or shall have resolved not to recommend, or shall have modified
or withdrawn its recommendation of the Offer or the Merger or determination
that the Offer or the Merger is fair to and in the best interest of the
Company and its stockholders, or shall have resolved to do so, or (ii) the
Board of Directors of the Company fails to recommend against acceptance of an
Acquisition Proposal within five business days after a request by the Parent
or the Offeror to do so. If the Merger Agreement is terminated pursuant to the
foregoing, it shall become void and of no effect with no liability on the part
of any party thereto; provided, that certain agreements with respect to fees
and expenses, covenants with respect to employee benefits and insurance and
indemnification of officers and directors, covenants relating to the
Transition Agreements, and confidentiality obligations, will continue, and
provided, further, that the termination of the Merger Agreement shall not
relieve any party for liability for any willful and knowing breach of the
Merger Agreement.
Fees and Expenses. Except as otherwise provided in the Merger Agreement,
whether or not the Merger is consummated, all costs and expenses incurred in
connection with the Merger Agreement and the transactions contemplated thereby
shall be paid by the party incurring such costs and expenses. The Company,
however, has agreed in the Merger Agreement to pay or cause to be paid to the
Parent (x) the Expenses (as defined below) in an amount up to but not to
exceed $3,000,000 and (y) $9,900,000 (the "Termination Fee") under the
circumstances and at the times set forth as follows:
(a) if the Company or the Parent terminates the Merger Agreement under
clause (b) set forth above under "Termination" and after the date of the
Merger Agreement a Takeover Proposal (as defined below) shall have been
made and concurrently with or within twelve months after such termination,
the Company shall enter into an agreement providing for a Takeover Proposal
or a Takeover Proposal shall have been consummated, the Company shall pay
the Expenses and the Termination Fee concurrently with the earlier of the
entering into of such agreement or the consummation of such Takeover
Proposal; and
(b) if the Company or the Parent terminates the Merger Agreement under
clause (c) set forth above under "Termination" and after the date of the
Merger Agreement (but on or prior to the date of termination) a Takeover
Proposal shall have been made, the Company shall pay the Expenses and the
Termination Fee concurrently with such termination; and
(c) if the Company or the Parent terminates the Merger Agreement under
clause (e) set forth above under "Termination" as a result of the
occurrence of paragraphs (b) or (h) of the conditions set forth below under
Section 15, the Company shall pay the Expenses; and
(d) if the Company or the Parent terminates the Merger Agreement under
clause (e) set forth above under "Termination" as a result of clause (x) or
paragraph (b) of the conditions set forth below under Section 15 or the
failure to attain the Minimum Condition and, after the date of the Merger
Agreement (but on or prior to the date of termination) a Takeover Proposal
shall have been made, the Company shall pay the Expenses and the
Termination Fee concurrently with such termination; and
(e) if the Parent terminates the Merger Agreement under clause (f) set
forth above under "Termination", the Company shall pay the Expenses and the
Termination Fee concurrently with such termination.
As used herein, (i) "Expenses" shall mean all out-of-pocket fees and
expenses incurred or paid by or on behalf of the Parent or any affiliate of
the Parent in connection with the Merger Agreement and the transactions
contemplated therein, including all fees and expenses of counsel, investment
banking firms, accountants and
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consultants which are evidenced by written invoice or other supporting
documentation provided by the Parent; and (ii) "Takeover Proposal" shall mean
any proposal or offer to the Company or its stockholders by a third party with
respect to (x) a tender offer or exchange offer for 30% or more of the
outstanding shares of capital stock of the Company, (y) a merger,
consolidation or sale of all or substantially all of the assets of the
Company, or similar transaction or (z) any liquidation or recapitalization
having the foregoing effect.
The Tender Agreements
Concurrently with the execution and delivery of the Merger Agreement, Joseph
Littlejohn & Levy, L.P., a Delaware limited partnership, and Joseph Littlejohn
& Levy Fund II, L.P., a Delaware limited partnership (together, "JLL"),
entered into a Tender Agreement dated as of March 25, 1997 (the "JLL Tender
Agreement") among JLL, the Parent and the Offeror whereby JLL has agreed to
tender all of their Shares in the Tender Offer. Concurrently with the
execution and delivery of the Merger Agreement, The Airlie Group, L.P., a
Delaware limited partnership ("Airlie"), entered into a Tender Agreement dated
as of March 25, 1997 (the "Airlie Tender Agreement") among Airlie, the Parent
and the Offeror whereby Airlie has agreed to tender a number of Shares which,
when taken together with the number of Shares (i) beneficially owned by the
Parent or its subsidiaries and (ii) which the Parent or its affiliates have
the right to acquire from JLL pursuant to the JLL Tender Agreement, would
cause the Parent or its affiliates to beneficially own 49.9% of the aggregate
voting power represented by the issued and outstanding capital stock of the
Company.
Each Tender Agreement provides that, within five business days of the
commencement of the Offer, JLL and Airlie (each a "Tendering Stockholder")
shall tender to the Depositary all of the Shares required to be tendered
pursuant to the applicable Tender Agreement. Subject to applicable law, a
Tendering Stockholder may not withdraw any Shares so tendered by it; provided,
however, that a Tendering Stockholder may decline to tender its Shares, or may
withdraw Shares tendered by it, if the Offeror amends the Offer to (a) reduce
the Offer Price to less than $23.40 per Share in cash; (b) reduce the number
of Shares subject to the Offer; (c) change the form of consideration payable
for Shares pursuant to the Offer; or (d) amend or modify any term or condition
of the Offer in a manner adverse to the stockholders of the Company.
Under the Tender Agreements, each Tendering Stockholder grants to the
Offeror an option to purchase the number of Shares subject to the agreement to
tender at a purchase price per Share of $23.40 or such higher price as may be
offered in the Offer. Provided all waiting periods under the HSR Act and the
rules and regulations thereunder applicable to the purchase of Shares pursuant
an option shall have expired or been terminated and there shall otherwise be
no legal restriction on the exercise of an option, an option may be exercised
by the Offeror in whole or in part at any time prior to the date 60 days after
the Expiration Date if (a) the Tendering Stockholder who granted such option
fails to comply with any of its obligations under its Tender Agreement or
withdraws a tender of its Shares in violation of the provisions of its Tender
Agreement or (b) the Offer is not consummated because of the failure to
satisfy any of the conditions to the Offer described in Section 15 (other than
as a result of any action or inaction on the part of the Parent or the Offeror
which constitutes a breach of the Merger Agreement).
Under the Tender Agreements the Offeror may allow the Offer to expire
without accepting for payment or paying for any Shares, on the terms set forth
in the Offer to Purchase, and may allow the option to expire without
exercising the option and purchasing all or any Shares pursuant to such
exercise. If all Shares validly tendered and not withdrawn are not accepted
for payment and paid for in accordance with the terms of the Offer to Purchase
or pursuant to the exercise of the option, they shall be returned to the
applicable Tendering Stockholders whereupon they shall continue to be held by
such Tendering Stockholder subject to the terms of the applicable Tender
Agreement.
The Tendering Stockholders have agreed in the Tender Agreements to revoke
any and all previous proxies granted by them with respect to the Shares owned
by them and, for so long as the Merger Agreement remains in effect, (a) to
vote the number of Shares which, when combined with the Shares held by the
Parent or the Offeror, equals 49.9% of the issued and outstanding shares of
capital stock of the Company, in favor of the Merger and
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(b) to oppose and vote such number of Shares against any Acquisition Proposal.
The Tendering Stockholders have further agreed not to solicit, initiate or
knowingly encourage any Acquisition Proposal.
Each Tender Agreement shall expire and be of no further force or effect if
(a) the conditions to the Offeror's obligations to accept for payment and pay
for Shares pursuant to the Offer shall have been satisfied and the Offeror
fails to promptly accept for payment and promptly pay for all Shares validly
tendered and not withdrawn pursuant to the Offer or (b) the Offeror amends the
Offer to (i) reduce the Offer Price to less than $23.40 per Share in cash;
(ii) reduce the number of Shares subject to the Offer; (iii) change the form
of consideration payable for Shares pursuant to the Offer; or (iv) amend or
modify any term or condition of the Offer in a manner adverse to the
stockholders of the Company. Each Tender Agreement will also terminate upon
the earlier of (i) the close of business on September 24, 1997 or (ii) the
Effective Time.
14. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that neither the Company nor any of its
subsidiaries will, among other things, prior to the Effective Time (a)
declare, set aside or pay any dividend or distribution with respect to its
capital stock or directly or indirectly redeem, purchase or otherwise acquire
any of its capital stock or effect a split or reclassification of any of its
capital stock or a recapitalization, except for intercompany transactions in
the ordinary course of business consistent with past practice; or (b) issue,
deliver, sell, pledge, dispose of or otherwise encumber any shares of its
capital stock, any other voting securities or equity equivalent or any
securities convertible or exchangeable into, or any rights, warrants or
options to acquire, any such shares, voting securities or convertible
securities or equity equivalent, except for the issuance of up to 1,762,752
shares of the Company's common stock pursuant to the exercise of certain
enumerated options and warrants to purchase such shares which are outstanding
on the date of the Merger Agreement.
15. CERTAIN CONDITIONS TO THE OFFEROR'S OBLIGATIONS.
Notwithstanding any other provision of the Merger Agreement or the Offer,
the Offeror shall not be required to accept for payment or pay for, or may
delay the acceptance for payment of or payment for, any tendered Shares, or
may, in its sole discretion, at any time, terminate or amend the Offer as to
any Shares not then paid for if (v) a majority of the Shares outstanding on a
fully diluted basis shall not have been validly tendered pursuant to the Offer
and not withdrawn prior to the expiration of the Offer (the "Minimum
Condition"); (w) any waiting period under the HSR Act applicable to the
purchase of Shares pursuant to the Offer shall not have expired or shall not
have been terminated prior to the expiration of the Offer; (x) the Certificate
of Amendment shall not have been filed with the Secretary of State of the
State of Delaware and the Charter Amendment shall not be in full force and
effect prior to the close of business on September 24, 1997; (y) the Merger
Agreement shall have been terminated in accordance with its terms; or (z) on
or after the date of the Merger Agreement, and at or before the time of
payment for any such Shares, any of the following events shall occur:
(a) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on the NYSE or on NASDAQ,
(ii) a declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States, (iii) a commencement of a war, armed
hostilities or other international or national calamity directly involving
the armed forces of the United States, (iv) any general limitation (whether
or not mandatory) by any governmental authority on the extension of credit
by banks or other lending institutions, (v) in the case of any of the
foregoing existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof, (vi) a decline of at least thirty
percent (30%) in the Dow Jones Industrial Average or the Standard and
Poor's 500 Index from the date of the Merger Agreement to the expiration or
termination of the Offer or (vii) a change in general financial, bank or
capital market conditions which materially and adversely affects the
ability of financial institutions in the United States to extend credit or
syndicate loans;
(b) any of the representations and warranties of the Company set forth in
the Merger Agreement that are qualified as to materiality shall not be true
and correct or any such representations and warranties that are not so
qualified shall not be true and correct in any material respect, in each
case, on the date when made and at the Expiration Date, or in the case of
any representations and warranties that are made as of a different date, as
of that date;
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(c) the Company shall have breached or failed to comply in any material
respect with any of its obligations under the Merger Agreement and such
failure continues for two (2) days after receipt by the Company of notice
from the Parent specifying such failure;
(d) there shall have been instituted or pending any litigation by a
governmental entity (i) which prohibits the consummation of the
transactions contemplated by the Offer or the Merger; (ii) which prohibits
the Parent's or the Offeror's ownership or operation of all or any material
portion of their or the Company's business or assets, or which compels the
Parent or the Offeror to dispose of or hold separate all or any material
portion of the Parent's or the Offeror's or the Company's business or
assets as a result of the transactions contemplated by the Offer or the
Merger, (iii) which makes the acceptance for payment, purchase of, or
payment for, some or all of the Shares illegal; (iv) which imposes material
limitations on the ability of the Parent or the Offeror to acquire or hold
or to exercise effectively all rights of ownership of Shares including,
without limitation, the right to vote any Shares purchased by the Offeror
or the Parent on all matters properly presented to the stockholders of the
Company, or (v) which imposes any limitations on the ability of the Parent
or the Offeror, or any of their respective subsidiaries, effectively to
control in any material respect the business or operations of the Company;
(e) any statute, rule, regulation, order or injunction shall be enacted,
promulgated, entered, enforced or deemed applicable to the Offer or the
Merger or any other action shall have been taken by any United States
governmental authority or court (i) which prohibits the consummation of the
transactions contemplated by the Offer or the Merger; (ii) which prohibits
the Parent's or the Offeror's ownership or operation of all or any material
portion of their or the Company's business or assets, or which compels the
Parent or the Offeror to dispose of or hold separate all or any material
portion of the Parent's or the Offeror's or the Company's business or
assets as a result of the transactions contemplated by the Offer or the
Merger, (iii) which makes the acceptance for payment, purchase of, or
payment for, some or all of the Shares illegal; (iv) which imposes material
limitations on the ability of the Parent or the Offeror to acquire or hold
or to exercise effectively all rights of ownership of Shares including,
without limitation, the right to vote any Shares purchased by the Offeror
or the Parent on all matters properly presented to the stockholders of the
Company, or (v) which imposes any limitations on the ability of the Parent
or the Offeror, or any of their respective subsidiaries, effectively to
control in any material respect the business or operations of the Company;
(f) the Parent or the Offeror shall have reached an agreement or
understanding in writing with the Company providing for termination of the
Offer or the Merger Agreement;
(g) any filing required to be made by the Company with, or any consent,
approval or authorization required to be obtained prior to the Effective
Time by the Company from, any governmental entity in connection with the
execution and delivery of the Merger Agreement by the Company or the
consummation of the Offer or the transactions contemplated by the Merger
Agreement, shall not have been made or obtained; or
(h) a material adverse change in the Company has occurred;
which, in the sole judgment of the Offeror, regardless of the circumstances
giving rise to any such conditions, makes it inadvisable to proceed with the
Offer and/or with such acceptance for payment of or payment for Shares.
The foregoing conditions are for the sole benefit of the Parent and the
Offeror and may be asserted by the Parent or the Offeror regardless of the
circumstances or may be waived by the Parent or Offeror in whole or in part at
any time and from time to time in its sole discretion.
SHOULD THE OFFER BE TERMINATED PURSUANT TO THE FOREGOING PROVISIONS, ALL
TENDERED SHARES NOT THERETOFORE ACCEPTED FOR PAYMENT SHALL FORTHWITH BE
RETURNED BY THE DEPOSITARY TO THE TENDERING STOCKHOLDERS.
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16. CERTAIN LEGAL MATTERS.
Except as set forth in this Offer to Purchase, the Offeror is not aware of
any approval or other action by any governmental or administrative agency
which would be required for the acquisition or ownership of Shares by the
Offeror as contemplated herein. Should any such approval or other action be
required, it will be sought, but the Offeror has no current intention to delay
the purchase of Shares tendered pursuant to the Offer pending the outcome of
any such matter, subject, however, to the Offeror's right to decline to
purchase Shares if any of the conditions specified in Section 15 shall have
occurred. There can be no assurance that any such approval or other action, if
needed, would be obtained or would be obtained without substantial conditions,
or that adverse consequences might not result to the Company's business or
that certain parts of the Company's business might not have to be disposed of
if any such approvals were not obtained or other action taken.
Antitrust. Under the provisions of the HSR Act applicable to the Offer, the
acquisition of Shares under the Offer may be consummated following the
expiration of a 15-day waiting period following the filing by the Parent of a
Notification and Report Form with respect to the Offer, unless the Parent
receives a request for additional information or documentary material from the
Department of Justice, Antitrust Division (the "Antitrust Division") or the
Federal Trade Commission ("FTC") or unless early termination of the waiting
period is granted. The Parent is expected to make such a filing on or about
April 2, 1997. If, within the initial 15-day waiting period, either the
Antitrust Division or the FTC request additional information or material from
the Parent concerning the Offer, the waiting period will be extended to the
tenth calendar day after the date of substantial compliance by the Parent with
such request. Complying with a request for additional information or material
can take a significant amount of time.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the Offeror's proposed acquisition
of the Company. At any time before or after the Offeror's acquisition of
Shares pursuant to the Offer, the Antitrust Division or the FTC could take
such action under the antitrust laws as either deems necessary or desirable in
the public interest, including seeking to enjoin the purchase of Shares
pursuant to the Offer or the consummation of the Merger or seeking the
divestiture of Shares acquired by the Offeror or the divestiture of
substantial assets of the Company or its subsidiaries or the Parent or its
subsidiaries. Private parties may also bring legal action under the antitrust
laws under certain circumstances. 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, of the result thereof.
If any applicable waiting period under the HSR Act has not expired or been
terminated prior to the Expiration Date, the Offeror will not be obligated to
proceed with the Offer or the purchase of any Shares not theretofore purchased
pursuant to the Offer. See Section 15.
State Takeover Laws. The Company is incorporated under the laws of the State
of Delaware. In general, Section 203 of the DGCL ("Section 203") prevents an
"interested stockholder" (including a person who owns or has the right to
acquire 15% or more of a corporation's outstanding voting stock) from engaging
in a "business combination" (defined to include mergers and certain other
actions) with a Delaware corporation for a period of three years following the
date such person became an interested stockholder unless, among other things,
the "business combination" is approved by the Board of Directors of such
corporation prior to such date. The Company's Board of Directors has approved
the Offer, the Merger and the Tender Agreements. Accordingly, Section 203 is
inapplicable to the Offer, the Merger and the Tender Agreements.
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., in 1982, the Supreme
Court of the United States (the "U.S. Supreme Court") 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 U.S. Supreme Court held that the State of Indiana may, as a
matter of
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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 U.S. Supreme
Court was by its terms applicable only to corporations that had a substantial
number of stockholders in the state and were incorporated there.
The Company, directly or through subsidiaries, conducts business in a number
of states throughout the United States, some of which have enacted takeover
laws. The Offeror does not know whether any of these laws will, by their
terms, apply to the Offer or the Merger and has not complied with any such
laws. Should any person seek to apply any state takeover law, the Offeror 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, the
Offeror might be required to file certain information with, or receive
approvals from, the relevant state authorities. In addition, if enjoined, the
Offeror 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, the Offeror may not be obligated to accept for payment
any Shares tendered. See Section 15.
17. FEES AND EXPENSES.
Neither the Offeror nor the Parent, nor any officer, director, stockholder,
agent or other representative of the Offeror or the Parent, will pay any fees
or commissions to any broker, dealer or other person (other than the Dealer
Manager, the Information Agent and the Depositary) for soliciting tenders of
Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust
companies and other nominees will, upon request, be reimbursed by the Offeror
for customary mailing and handling expenses incurred by them in forwarding
materials to their customers.
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") is acting as
Dealer Manager in connection with the Offer and has provided certain financial
advisory services to the Parent and the Offeror in connection with the
proposed acquisition of the Shares. Pursuant to its engagement letter with the
Parent, the Parent has agreed to pay DLJ a fee of up to $2.8 million in
connection with the Offer and the Merger. In addition, the Offeror has agreed
to reimburse DLJ for certain reasonable out-of-pocket expenses incurred by DLJ
in connection with the Offer, including the reasonable fees and disbursements
of its counsel, and to indemnify DLJ against certain liabilities and expenses.
The Offeror has retained Corporate Investor Communications, Inc., as
Information Agent, and The Bank of New York, as Depositary, in connection with
the Offer. The Information Agent and the Depositary will receive reasonable
and customary compensation for their services hereunder and reimbursement for
their reasonable out-of-pocket expenses. The Information Agent and the
Depositary will also be indemnified by the Offeror against certain liabilities
in connection with the Offer. The Information Agent may contact holders of
Shares by mail, telex, telegraph and personal interviews and may request
brokers, dealers and other nominee stockholders to forward materials relating
to the Offer to beneficial owners of Shares.
18. MISCELLANEOUS.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares residing in any jurisdiction in which the making
or acceptance thereof would not be in compliance with the securities, blue sky
or other laws of such jurisdiction. In any jurisdiction where the securities,
blue sky or other laws require the Offer to be made by a licensed broker or
dealer, the Offer shall be deemed to be made on behalf of the Offeror by the
Dealer Manager or one or more registered brokers or dealers licensed under the
laws of such jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of the Offeror other than as contained in this Offer
to Purchase or in the Letter of Transmittal and, if any such information or
representation is given or made, it should not be relied upon as having been
authorized by the Offeror.
30
<PAGE>
The Offeror and the Parent have filed with the Commission the Schedule 14D-1
(which Schedule 14D-1 also constitutes a statement on Schedule 13D to the
extent the Offeror, IBP Foodservice, L.L.C. and the Parent are deemed to have
acquired beneficial ownership of the Shares subject to the Tender Agreements),
pursuant to Section 14(d)(1) of the Exchange Act and Rule 14d-1 promulgated
thereunder, furnishing certain information with respect to the Offer. Such
Schedule 14D-1 and any amendments thereto, including exhibits, may be examined
and copies may be obtained at the same places and in the same manner as set
forth with respect to the Company in Section 8 (except that they will not be
available at the regional offices of the Commission).
IBP SUB, INC.
April 1, 1997
31
<PAGE>
ANNEX I
CERTAIN INFORMATION CONCERNING THE DIRECTORS
AND EXECUTIVE OFFICERS OF THE PARENT AND THE OFFEROR
1. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARENT. Set forth below are the
name, age, current business address, citizenship, present principal occupation
or employment and five-year employment history of each director and executive
officer of the Parent. Unless otherwise indicated, each such person's business
address is IBP, inc., IBP Avenue, P.O. Box 515, Dakota City, Nebraska 68731.
All persons listed below are citizens of the United States.
<TABLE>
<CAPTION>
NAME, AGE AND BUSINESS PRESENT PRINCIPAL OCCUPATION OR
ADDRESS EMPLOYMENT; MATERIAL POSITIONS HELD
- ---------------------- -----------------------------------
<S> <C>
Richard L. Bond (49)...... Mr. Bond has served as the President, Fresh Meats of
IBP, inc. ("IBP") since March 1, 1995. Prior to that
he was the Executive Vice President, Beef Division
since 1994 and the Group Vice President, Beef Sales
and Marketing since 1989. Director of IBP since
1995.
John S. Chalsty (63)...... Mr. Chalsty was elected President and Chief
277 Park Ave., 17th Fl. Executive Officer of Donaldson, Lufkin & Jenrette
New York, NY 10172 Securities Corporation ("DLJ") on September 4, 1986,
after having served as Chairman of DLJ's Capital
Markets Group for more than two years. Currently Mr.
Chalsty is also a member of the Board of Directors
of Anchor Glass Container. Director of IBP since
1987.
Dr. Wendy L. Gramm (52)... Dr. Gramm chaired the Commodity Futures Trading
P.O. Box 39134 Commission from 1988 to 1993. She has served as
Washington, D.C. 20016 Administrator for Information and Regulatory Affairs
at the White House Office of Management and Budget
(OMB) and was the Executive Director of the
Presidential Task Force on Regulatory Relief. Dr.
Gramm also directed the Federal Trade Commission's
Bureau of Economics. Dr. Gramm currently is a
Professor of Economics and Administration at the
University of Texas A&M in Arlington and is a self-
employed consultant. She is also a director of Enron
Corporation, State Farm Insurance Companies, the
Chicago Mercantile Exchange and Kinetic Concepts,
Inc. Director of IBP since 1993.
David C. Layhee (52)...... Mr. Layhee has served as the President, Consumer
Products of IBP since March 1, 1995. Prior to that
he was the Group Vice President, Design Products
since 1989. Director of IBP since 1995.
Eugene D. Leman (54)...... Mr. Leman has served as the President, Allied Group
of IBP since March 1, 1995. Prior to that he was the
Executive Vice President, Pork Division since 1986.
Mr. Leman also serves as a Director on the Norwest
Bank Community Banking Board since 1992. Director of
IBP since 1989.
Dr. Martin A. Massengale Dr. Massengale has been the Director, Center for
(63)..................... Grassland Studies, Foundation Distinguished
220 Keim Hall Professor and President Emeritus at the University
Univ. of Nebraska of Nebraska since 1994. From 1976 to the present he
Lincoln, NE 68583-0953 has been with the University of Nebraska where he
has served as vice chancellor, chancellor interim
president and
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE AND BUSINESS PRESENT PRINCIPAL OCCUPATION OR
ADDRESS EMPLOYMENT; MATERIAL POSITIONS HELD
- ---------------------- -----------------------------------
<S> <C>
president of the University, a position he held from
1991 to 1994. Dr. Massengale has been named to the
Board of Directors of Woodmen Accident & Life
Insurance Company and the Board of Managers of
America First, L.L.C. Director of IBP since 1996.
Robert L. Peterson (64).. Mr. Peterson has served as Chairman of the Board and
Chief Executive Officer of IBP since August 12,
1981. Mr. Peterson is a Director of MidAmerican
Energy Company and the Omaha Branch of the Federal
Reserve Bank of Kansas City. Director of IBP since
1976.
Joann R. Smith (57)...... Ms. Smith served as Assistant Secretary for
16115 NW Hwy. 320 Marketing and Inspection Services for the United
Micanopy, FL 32667 States Department of Agriculture (USDA) from 1989 to
1993 and has served in numerous capacities in the
livestock industry. She is on the Board of Directors
for Purina Mills, Inc. Ms. Smith acts as Secretary
and Treasurer for Smith Brothers, a farming and
ranching operation, is the Secretary and Treasurer
for Smith Construction and is President of Smith
Associates, an agricultural marketing business.
Director of IBP since 1993.
Dale C. Tinstman (77).... Mr. Tinstman, a business consultant, is a Director
40 Bishop Square of Smith Hayes Trust, Inc. He served as a financial
Lincoln, NE 68502 consultant for IBP before being elected President
and Chief Operating Officer in 1976, a position he
held until 1977. From 1977 to January 1981 he served
as Vice Chairman of the Board of IBP and in January
1981 became Co-Chairman of the Board, a position he
held until 1982. Director of IBP since 1962.
Kenneth W. Browning, Jr. Mr. Browning holds or has held the following
(48).................... positions at IBP: Executive Vice President since
1996; 1989-1996 Senior Vice President--Hide
Division; 1982-1989 Vice President--Hides.
Lonnie O. Grigsby (57)... Mr. Grigsby holds or has held the following
positions at IBP: Executive Vice President and
General Counsel since 1995; Secretary since 1985;
1988-1995 Executive Vice President--Finance &
Administration; General Counsel 1985-1990 and since
1993; 1987-1988 Senior Vice President; 1985-1987
Vice President.
James V. Lochner (44).... Mr. Lochner holds or has held the following
positions at IBP: Executive Vice President--
Technical Services/Engineering since 1995; 1993-1995
Senior Vice President--Technical Services; 1989-1993
Vice President--Technical Services; 1986-1989
Assistant Vice President Quality Control--Beef;
1984-1986 Director--Quality Control.
Charles F. Mostek (49)... Mr. Mostek holds or has held the following positions
at IBP: Executive Vice President--Fresh Meat Sales
and Marketing since 1995; 1989-1995 Vice President--
Beef Sales; 1985-1989 Vice President--Slaughter
Division Sales; 1981-1985 Assistant Vice President--
Carcass Grading and Administration.
</TABLE>
A-2
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE AND BUSINESS PRESENT PRINCIPAL OCCUPATION OR
ADDRESS EMPLOYMENT; MATERIAL POSITIONS HELD
- ---------------------- -----------------------------------
<S> <C>
Kenneth L. Rose (53)..... Mr. Rose holds or has held the following positions
at IBP: Executive Vice President--Operations
Services since 1995; 1989-1995 Senior Vice
President--Logistics Services; 1982-1989 Vice
President--Transportation.
Jerry S. Scott (51)...... Mr. Scott holds or has held the following positions
at IBP: Executive Vice President--Fresh Meat
Operations since 1995; 1986-1995 Vice President Pork
Operations.
Larry Shipley (41)....... Mr. Shipley holds or has held the following
positions at IBP: Executive Vice President--
Corporate Development since 1995; 1995 Senior Vice
President--Corporate Development; 1994- 1995
Assistant to the Chairman; 1989-1994 Assistant to
the President.
Craig T. Hart (41)....... Mr. Hart holds or has held the following positions
at IBP: Vice President--Controller since 1995; 1993-
1995 Assistant Vice President, Controller; 1990-1993
Controller.
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF THE OFFEROR. Unless otherwise
indicated, for each person identified below all information concerning the
current business address, present principal occupation or employment and five-
year employment history for such person is the same as the information given
above. Each person was elected in March 1997. All persons listed below are
citizens of the United States.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
NAME AND AGE EMPLOYMENT; MATERIAL POSITIONS HELD
- ------------ -----------------------------------
<S> <C>
Larry Shipley (41)........... Director and President of Offeror since 1997.
Nathan A. Hodne (30)......... Secretary of Offeror since 1997. Also, Mr. Hodne
currently holds the position of Corporate Attorney
for IBP, since 1993.
</TABLE>
3. DIRECTORS AND EXECUTIVE OFFICERS OF IBP FOODSERVICE, L.L.C. Unless
otherwise indicated, for each person identified below all information
concerning the name, age, current business address, present principal
occupation of employment and five-year employment history for such person is
the same as the information given above. All persons listed below are citizens
of the United States.
<TABLE>
<CAPTION>
NAME AND AGE
- -------------
<S> <C>
Larry Shipley (41)............. President of IBP Foodservice, L.L.C. since 1997.
</TABLE>
A-3
<PAGE>
Facsimile copies of the Letter of Transmittal will be accepted. The Letter
of Transmittal and certificates for Shares and any other required documents
should be sent or delivered by each stockholder of the Company or his or her
broker, dealer, commercial bank, trust company or other nominee to the
Depositary at one of the addresses set forth below:
The Depositary for the Offer is:
THE BANK OF NEW YORK
By Mail: Facsimile Transmission: By Hand or Overnight
(for Eligible Institutions Only) Courier:
(212) 815-6213
Tender & Exchange Tender & Exchange
Department Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver
New York, New York Window
10286-1248 New York, New York 10286
For Confirmation Telephone:
(800) 507-9357
Any questions or requests for assistance or additional copies of the Offer
to Purchase and the Letter of Transmittal and Notice of Guaranteed Delivery
may be directed to the Information Agent or the Dealer Manager at their
respective telephone numbers and locations listed below. Stockholders may also
contact their broker, dealer, commercial bank, trust company or other nominee
for assistance concerning the Offer.
The Information Agent for the Offer is:
CORPORATE INVESTOR COMMUNICATIONS, INC.
111 Commerce Road
Carlstadt, New Jersey 07072-2586
BANKS AND BROKERS CALL COLLECT: (201) 896-1900
ALL OTHERS CALL TOLL-FREE: (888) 805-6307
The Dealer Manager for the Offer is:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
277 PARK AVENUE
NEW YORK, NEW YORK 10172
(212) 892-7700 (CALL COLLECT)
<PAGE>
Exhibit 99(a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
FOODBRANDS AMERICA, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED APRIL 1, 1997
BY
IBP SUB, INC.
A WHOLLY OWNED SUBSIDIARY OF
IBP, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, APRIL 28, 1997, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
THE BANK OF NEW YORK
By Mail: Facsimile Transmission: By Hand or Overnight
(for Eligible Courier:
Institutions Only)
(212) 815-6213
Tender & Exchange Tender & Exchange
Department Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver
New York, New York 10286- Window
1248 New York, New York 10286
For Confirmation Telephone:
(800) 507-9357
----------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUMENTS VIA A FACSIMILE TO A NUMBER OTHER THAN AS
SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE THEREFOR
PROVIDED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders of Foodbrands
America, Inc. (the "Company") if certificates are to be forwarded herewith or,
unless an Agent's Message (as defined in the Offer to Purchase) is utilized,
if delivery of Shares (as defined below) is to be made by book-entry transfer
to the Depositary's account at The Depository Trust Company or the
Philadelphia Depository Trust Company (hereinafter collectively referred to as
the "Book-Entry Transfer Facilities") pursuant to the procedures set forth in
Section 3 of the Offer to Purchase (as defined below).
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver their Shares and all other documents required hereby to the
Depositary prior to the Expiration Date (as defined in the Offer to Purchase),
or who cannot comply with the book-entry transfer procedures on a timely
basis, may nevertheless tender their Shares pursuant to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase. See
Instruction 2.
<PAGE>
DESCRIPTION OF SHARES TENDERED
<TABLE>
- --------------------------------------------------------------------------------------------
<CAPTION>
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARES TENDERED
(PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL LIST IF NECESSARY)
- --------------------------------------------------------------------------------------------
NUMBER OF
SHARE SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Total Shares
- --------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares
represented by any certificates delivered to the Depositary are being
tendered. See Instruction 4.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
[_CHECK]HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution _________________________________________________
Account No. ________________________________________________________________ at
[_] The Depository Trust Company
[_] Philadelphia Depository Trust Company
Transaction Code No. __________________________________________________________
[_CHECK]HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Tendering Stockholder(s) ___________________________________________
Date of Execution of Notice of Guaranteed Delivery ____________________________
Window Ticket Number (if any) _________________________________________________
Name of Institution which Guaranteed Delivery _________________________________
If delivery is by book-entry transfer _________________________________________
Name of Tendering Institution _______________________________________________
Account No. ______________________________________________________________ at
[_] The Depository Trust Company
[_] Philadelphia Depository Trust Company
Transaction Code No. __________________________________________________________
2
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to IBP Sub, Inc. (the "Offeror"), a Delaware
corporation and a wholly owned subsidiary of IBP Foodservice, L.L.C., a
Delaware limited liability company whose sole members are IBP, inc., a
Delaware corporation (the "Parent") and Prepared Foods, Inc., a Texas
corporation and a wholly owned subsidiary of the Parent, the above-described
shares of common stock, $.01 par value per share (the "Shares"), of Foodbrands
America, Inc., a Delaware corporation (the "Company"), pursuant to the
Offeror's offer to purchase all of the outstanding Shares at a purchase price
of $23.40 per Share, net to the seller in cash, without interest, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
April 1, 1997 (the "Offer to Purchase"), receipt of which is hereby
acknowledged, and in this Letter of Transmittal (which, together with the
Offer to Purchase, and any amendments or supplements hereto or thereto,
collectively constitute the "Offer"). The Offer is being made in connection
with the Agreement and Plan of Merger, dated as of March 25, 1997 (the "Merger
Agreement"), among the Parent, the Offeror and the Company.
Subject to and effective upon acceptance for payment of and payment for the
Shares tendered herewith, the undersigned hereby sells, assigns and transfers
to or upon the order of the Offeror all right, title and interest in and to
all the Shares that are being tendered hereby (and any and all other Shares or
other securities issued or issuable in respect thereof on or after March 25,
1997) and appoints the Depositary the true and lawful agent and attorney-in-
fact of the undersigned with respect to such Shares (and all such other Shares
or securities), with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (a) deliver
certificates for such Shares (and all such other Shares or securities), or
transfer ownership of such Shares (and all such other Shares or securities) on
the account books maintained by any of the Book-Entry Transfer Facilities,
together, in any such case, with all accompanying evidences of transfer and
authenticity, to or upon the order of the Offeror, (b) present such Shares
(and all such other Shares or securities) for transfer on the books of the
Company and (c) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares (and all such other Shares or securities),
all in accordance with the terms of the Offer.
The undersigned hereby irrevocably appoints Lonnie O. Grigsby and Larry
Shipley, and each of them, the attorneys-in-fact and proxies of the
undersigned, each with full power of substitution, to exercise all voting and
other rights of the undersigned in such manner as each such attorney and proxy
or his substitute shall in his sole judgment deem proper, with respect to all
of the Shares tendered hereby which have been accepted for payment by the
Offeror prior to the time of any vote or other action (and any and all other
Shares or other securities or rights issued or issuable in respect of such
Shares on or after March 25, 1997) at any meeting of stockholders of the
Company (whether annual or special and whether or not an adjourned meeting),
any actions by written consent in lieu of any such meeting or otherwise. This
proxy is irrevocable and is granted in consideration of, and is effective
upon, the acceptance for payment of such Shares by the Offeror in accordance
with the terms of the Offer. Such acceptance for payment shall revoke any
other proxy or written consent granted by the undersigned at any time with
respect to such Shares (and all such other Shares or other securities or
rights), and no subsequent proxies will be given or written consents will be
executed by the undersigned (and if given or executed, will not be deemed
effective).
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby (and any and all other Shares or other securities or rights issued or
issuable in respect of such Shares on or after March 25, 1997) and that when
the same are accepted for payment by the Offeror, the Offeror will acquire
good and unencumbered title thereto, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claims.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Depositary or the Offeror to be necessary or desirable
to complete the sale, assignment and transfer of the Shares tendered hereby
(and all such other Shares or other securities or rights).
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned. Except as stated in the Offer, this
tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute an agreement between the undersigned and
the Offeror upon the terms and subject to the conditions of the Offer.
3
<PAGE>
Unless otherwise indicated under "Special Payment Instructions" or unless
otherwise provided in the Merger Agreement, please issue the check for the
purchase price of any Shares purchased, and return any Shares not tendered or
not purchased, in the name(s) of the undersigned. Similarly, unless otherwise
indicated under "Special Delivery Instructions," please mail the check for the
purchase price of any Shares purchased and return any certificates for Shares
not tendered or not purchased (and accompanying documents, as appropriate) to
the undersigned at the address shown below the undersigned's signature(s). In
the event that both "Special Payment Instructions" and "Special Delivery
Instructions" are completed, please issue the check for the purchase price of
any Shares purchased and return any Shares not tendered or not purchased in
the name(s) of, and mail said check and any certificates to, the person(s) so
indicated. The undersigned recognizes that the Offeror has no obligation,
pursuant to the "Special Payment Instructions," to transfer any Shares from
the name of the registered holder(s) thereof if the Offeror does not accept
for payment any of the Shares so tendered.
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7) (SEE INSTRUCTIONS 5 AND 7)
To be completed ONLY if the To be completed ONLY if the
check for the purchase price of check for the purchase price of
Shares purchased or certificates Shares purchased or certificates
for Shares not tendered or not for Shares not tendered or not
purchased are to be issued in the purchased are to be mailed to
name of someone other than the someone other than the undersigned
undersigned. or to the undersigned at an
address other than that shown
below the undersigned's
signature(s).
Issue check and/or certificates
to:
Name ______________________________ Mail check and/or certificates to:
(Please Print)
Name ______________________________
Address ___________________________
(Zip Code) Address ___________________________
___________________________________ ___________________________________
(Taxpayer Identification No.) (Zip Code)
(See Substitute Form W-9)
4
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, signatures
on all Letters of Transmittal must be guaranteed by a firm that is a bank,
broker, dealer, credit union, savings association or other entity which is a
member in good standing of the Securities Transfer Agents Medallion Program,
the New York Stock Exchange Medallion Signature Guarantee Program, the Stock
Exchange Medallion Program, or by any other bank, broker, dealer, credit
union, savings association or other entity which is an "eligible guarantor
institution," as such term is defined in Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended (each of the foregoing constituting an
"Eligible Institution"), unless the Shares tendered thereby are tendered (i)
by a registered holder of Shares who has not completed either the box labeled
"Special Payment Instructions" or the box labeled "Special Delivery
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution. See Instruction 5. If the certificates are registered in
the name of a person or persons other than the signer of this Letter of
Transmittal, or if payment is to be made or delivered to, or certificates
evidencing unpurchased Shares are to be issued or returned to, a person other
than the registered owner or owners, then the tendered certificates must be
endorsed or accompanied by duly executed stock powers, in either case signed
exactly as the name or names of the registered owner or owners appear on the
certificates or stock powers, with the signatures on the certificates or stock
powers guaranteed by an Eligible Institution as provided herein. See
Instruction 5.
2. Delivery of Letter of Transmittal and Shares. This Letter of Transmittal
is to be used either if certificates are to be forwarded herewith or, unless
an Agent's Message (as defined in the Offer to Purchase) is utilized, if the
delivery of Shares is to be made by book-entry transfer pursuant to the
procedures set forth in Section 3 of the Offer to Purchase. Certificates for
all physically delivered Shares, or a confirmation of a book-entry transfer
into the Depositary's account at one of the Book-Entry Transfer Facilities of
all Shares delivered electronically, as well as a properly completed and duly
executed Letter of Transmittal (or a manually signed facsimile thereof) and
any other documents required by this Letter of Transmittal, or an Agent's
Message in the case of a book-entry delivery, must be received by the
Depositary at one of its addresses set forth on the front page of this Letter
of Transmittal on or prior to the Expiration Date. Stockholders who cannot
deliver their Shares and all other required documents to the Depositary on or
prior to the Expiration Date must tender their Shares pursuant to the
guaranteed delivery procedures set forth in Section 3 of the Offer to
Purchase. Pursuant to such procedures: (a) such tender must be made by or
through an Eligible Institution; (b) a properly completed and duly executed
Notice of Guaranteed Delivery, substantially in the form provided by the
Offeror, must be received by the Depositary prior to the Expiration Date; and
(c) the certificates for all tendered Shares, in proper form for transfer, or
a confirmation of a book-entry transfer into the Depositary's account at one
of the Book-Entry Transfer Facilities of all Shares delivered electronically,
together with a properly completed and duly executed Letter of Transmittal (or
a manually signed facsimile thereof), and any required signature guarantees,
or, in the case of a book-entry transfer, an Agent's Message, and any other
documents required by this Letter of Transmittal must be received by the
Depositary within three New York Stock Exchange trading days after the date of
execution of such Notice of Guaranteed Delivery, all as provided in Section 3
of the Offer to Purchase.
The method of delivery of Shares, the Letter of Transmittal and all other
required documents, including delivery through a Book-Entry Transfer Facility,
is at the option and risk of the tendering stockholder. Shares will be deemed
delivered only when actually received by the Depositary (including, in the
case of a book-entry transfer, by a confirmation of a book-entry transfer). If
delivery is by mail, registered mail with return receipt requested, properly
insured, is recommended. In all cases, sufficient time should be allowed to
ensure timely delivery.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. By executing this Letter of Transmittal
(or a manually signed facsimile thereof), the tendering stockholder waives any
right to receive any notice of the acceptance for payment of the Shares.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. Partial Tenders (not applicable to stockholders who tender by book-entry
transfer). If fewer than all the Shares represented by any certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
which are to be tendered in the box entitled "Number of Shares Tendered." In
such case, a new certificate
5
<PAGE>
for the remainder of the Shares represented by the old certificate will be
sent to the person(s) signing this Letter of Transmittal unless otherwise
provided in the appropriate box on this Letter of Transmittal, as promptly as
practicable following the expiration or termination of the Offer. All Shares
represented by certificates delivered to the Depositary will be deemed to have
been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written
on the face of the certificates without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock
powers are required unless payment of the purchase price is to be made, or
Shares not tendered or not purchased are to be returned, in the name of any
person other than the registered holder(s). Signatures on any such
certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the 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(s) on the
certificates for such Shares. Signature(s) on any such certificates or stock
powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal or any certificate or stock power is signed by
a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory
to the Offeror of the authority of such person so to act must be submitted.
6. Stock Transfer Taxes. The Offeror will pay any stock transfer taxes with
respect to the sale and transfer of any Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price is to be made to, or
Shares not tendered or not purchased are to be returned in the name of, any
person other than the registered holder(s), then the amount of any stock
transfer taxes (whether imposed on the registered holder(s), such other person
or otherwise) payable on account of the transfer to such person will be
deducted from the purchase price unless satisfactory evidence of the payment
of such taxes, or exemption therefrom, is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificates listed in this Letter of
Transmittal.
7. Special Payment and Delivery Instruction. If the check for the purchase
price of any Shares purchased is to be issued, or any Shares not tendered or
not purchased are to be returned, in the name of a person other than the
person(s) signing this Letter of Transmittal or if the check or any
certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to the
person(s) signing this Letter of Transmittal at an address other than that
shown above, the appropriate boxes on this Letter of Transmittal should be
completed. Stockholders tendering Shares by book-entry transfer may request
that Shares not purchased be credited to such account at any of the Book-Entry
Transfer Facilities as such stockholder may designate under "Special Payment
Instructions." If no such instructions are given, any such Shares not
purchased will be returned by crediting the account at the Book-Entry Transfer
Facilities designated above.
6
<PAGE>
8. Substitute Form W-9. The tendering stockholder is required to provide the
Depositary with such stockholder's correct TIN on Substitute Form W-9, which
is provided below, unless an exemption applies. Failure to provide the
information on the Substitute Form W-9 may subject the tendering stockholder
to a $50 penalty and to 31% federal income tax backup withholding on the
payment of the purchase price for the Shares.
9. Foreign Holders. Foreign holders must submit a completed IRS Form W-8 to
avoid 31% backup withholding. IRS Form W-8 may be obtained by contacting the
Depositary at one of the addresses on the face of this Letter of Transmittal.
10. Requests for Assistance or Additional Copies. Requests for assistance or
additional copies of the Offer to Purchase and this Letter of Transmittal may
be obtained from the Information Agent or the Dealer Manager at their
respective addresses or telephone numbers set forth below.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE COPY
HEREOF (TOGETHER WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND
ALL OTHER REQUIRED DOCUMENTS) OR A NOTICE OF GUARANTEED DELIVERY MUST BE
RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE (AS DEFINED IN
THE OFFER TO PURCHASE).
IMPORTANT TAX INFORMATION
Under federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary with such
stockholder's correct TIN on the Substitute Form W-9. If such stockholder is
an individual, the TIN is such stockholder's social security number. If the
Depositary is not provided with the correct TIN, the stockholder may be
subject to a $50 penalty imposed by the Internal Revenue Service. In addition,
payments that are made to such stockholder with respect to Shares purchased
pursuant to the Offer may be subject to backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that stockholder must submit a statement, signed under penalties of
perjury, attesting to that individual's exempt status. Such statements may be
obtained from the Depositary. All exempt recipients (including foreign persons
wishing to qualify as exempt recipients) should see the enclosed Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the stockholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will
be reduced by the amount of tax withheld. If backup withholding results in an
overpayment of taxes, a refund may be obtained.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding on payments that are made
to a stockholder with respect to Shares purchased pursuant to the Offer, the
stockholder is required to notify the Depositary of such stockholder's correct
TIN by completing the form certifying that the TIN provided on the Substitute
Form W-9 is correct.
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares. If
the Shares are in more than one name or are not in the name of the actual
owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidelines on
which number to report.
7
<PAGE>
SIGN HERE
(Complete Substitute Form W-9 below)
_____________________________________________________________________________
_____________________________________________________________________________
Signature(s) of Owner(s)
_____________________________________________________________________________
Name(s) _____________________________________________________________________
Capacity (full title) _______________________________________________________
Address _____________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(Include Zip Code)
_____________________________________________________________________________
Area Code and Telephone Number ______________________________________________
Taxpayer Identification Number ______________________________________________
Dated: _______________________________________________________________ , 199
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
stock certificate(s) or on a security position listing or by the person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, agent, officer of a corporation or other person
acting in a fiduciary or representative capacity, please set forth full
title and see Instruction 5).
GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY, PLACE MEDALLION GUARANTEE IN SPACE
BELOW.
Authorized signature(s) _____________________________________________________
Name ________________________________________________________________________
Name of Firm ________________________________________________________________
Address _____________________________________________________________________
_____________________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number ______________________________________________
Dated: _______________________________________________________________ , 199
8
<PAGE>
PAYOR'S NAME: THE BANK OF NEW YORK
- -------------------------------------------------------------------------------
PART I--PLEASE PROVIDE YOUR TIN: ______________
TIN IN THE BOX AT THE RIGHT Social Security
AND CERTIFY BY SIGNING AND
DATING BELOW.
SUBSTITUTE Number or Employer
FORM W-9 Identification
DEPARTMENT OF THE Number
TREASURY, -----------------------------------------------------
INTERNAL REVENUE SERVICE PART II--For Payees exempt from backup
withholding, see the enclosed Guidelines for
Certification of Taxpayer Identification Number on
Substitute Form W-9 and complete as instructed
therein.
PAYOR'S REQUEST FOR (1) The number shown on this form is my correct
TAXPAYER IDENTIFICATION TIN (or I am waiting for a number to be issued
NUMBER ("TIN") AND to me); and
CERTIFICATION -----------------------------------------------------
Certification--Under penalties of perjury, I
certify that:
(2) I am not subject to backup withholding because
(a) I am exempt from backup withholding or (b)
I have not been notified by the Internal
Revenue Service ("IRS") that I am subject to
backup withholding as a result of a failure to
report all interest or dividends, or (c) the
IRS has notified me that I am no longer
subject to backup withholding.
-----------------------------------------------------
SIGNATURE: _____________________DATE: ____________
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have been
notified by the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return. However, if after
being notified by the IRS that you were subject to backup withholding, you
received another notification from the IRS that you were no longer subject to
backup withholding, do not cross out item (2). (Also see the instructions in
the enclosed Guidelines.)
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING YOUR
TIN.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a TIN has not been issued to me,
and either (1) I have mailed or delivered an application to receive a TIN to
the appropriate IRS Center or Social Security Administration Officer or (2)
I intend to mail or deliver an application in the near future. I understand
that if I do not provide a TIN by the time of payment, 31% of all payments
pursuant to the Offer made to me thereafter will be withheld until I provide
a number.
Signature: ____________________________________________ Date: _______________
9
<PAGE>
The Information Agent for the Offer is:
CORPORATE INVESTOR COMMUNICATIONS, INC.
111 Commerce Road
Carlstadt, New Jersey 07072-2586
Banks and Brokers Call Collect: (201) 896-1900
All Others Call Toll-Free: (888) 805-6307
The Dealer Manager for the Offer is:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
277 Park Avenue
New York, New York 10172
(212) 892-7700 (call collect)
10
<PAGE>
Exhibit 99(a)(3)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
FOODBRANDS AMERICA, INC.
AT
$23.40 NET PER SHARE
BY
IBP SUB, INC.
A WHOLLY OWNED SUBSIDIARY OF
IBP, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, APRIL 28, 1997, UNLESS THE OFFER IS EXTENDED.
April 1, 1997
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by IBP Sub, Inc., a Delaware corporation (the
"Offeror") and a wholly owned subsidiary of IBP Foodservice, L.L.C., a
Delaware limited liability company whose sole members are IBP, inc., a
Delaware corporation ("Parent"), and Prepared Foods, Inc., a Texas corporation
and a wholly owned subsidiary of the Parent, to act as Dealer Manager in
connection with the Offeror's offer to purchase all outstanding shares of
common stock, $.01 par value per share (the "Shares"), of Foodbrands America
Inc., a Delaware corporation (the "Company"), at a purchase price of $23.40
per Share, net to the seller in cash, without interest, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated April 1,
1997 (the "Offer to Purchase"), and in the related Letter of Transmittal
(which, together with any amendments or supplements thereto, collectively
constitute the "Offer") enclosed herewith. The Offer is being made in
connection with the Agreement and Plan of Merger, dated as of March 25, 1997,
among the Parent, the Offeror and the Company (the "Merger Agreement").
Stockholders who desire to tender Shares and whose certificates for such
Shares (the "Certificates") are not immediately available or who cannot comply
in a timely manner with the procedures for book-entry transfer, or who cannot
deliver all required documents to the Depositary, in each case on or prior to
the Expiration Date (as defined in Section 1 of the Offer to Purchase), must
tender their Shares pursuant to the guaranteed delivery procedures set forth
in Section 3 of the Offer to Purchase.
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Shares in your name or in the name of your nominee.
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase, dated April 1, 1997.
2. The Letter of Transmittal to tender Shares for your use and for the
information of your clients. Facsimile copies of the Letter of Transmittal
(with manual signatures) may be used to tender Shares.
3. A letter to stockholders of the Company from R. Randolph Devening, the
Chairman, President and Chief Executive Officer of the Company, together
with a Solicitation/Recommendation Statement on Schedule 14D-9 filed with
the Securities and Exchange Commission by the Company and mailed to the
stockholders of the Company.
<PAGE>
4. The Notice of Guaranteed Delivery for Shares to be used to accept the
Offer if neither of the two procedures for tendering Shares set forth in
the Offer to Purchase can be completed on a timely basis.
5. A printed form of letter which may be sent to your clients for whose
accounts you hold Shares registered in your name, with space provided for
obtaining such clients' instructions with regard to the Offer.
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
7. A return envelope addressed to the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, APRIL 28, 1997,
UNLESS THE OFFER IS EXTENDED.
Please note the following:
1. The tender price is $23.40 per Share, net to the seller in cash
without interest.
2. The Offer is being made for all of the outstanding Shares.
3. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Monday, April 28, 1997, unless the Offer is extended.
4. The Offer is conditioned upon, among other things, (i) there being
validly tendered and not withdrawn prior to the expiration of the Offer
that number of Shares representing at least a majority of all outstanding
Shares on a fully diluted basis, (ii) any waiting period under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as amended, applicable to
the purchase of Shares pursuant to the Offer having expired or having been
terminated prior to the expiration of the Offer, (iii) the Certificate of
Amendment (as defined in the Offer to Purchase) having been filed with the
Secretary of State of the State of Delaware and the Charter Amendment (as
defined in the Offer to Purchase) being in full force and effect and (iv)
the satisfaction of certain other terms and conditions contained in the
Offer to Purchase.
5. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the transfer of Shares pursuant to the
Offer.
In order to take advantage of the Offer, (i) a properly completed and duly
executed Letter of Transmittal (or a manually signed facsimile thereof), with
any required signature guarantees, or, in the case of a book-entry transfer,
an Agent's Message (as defined in the Offer to Purchase), and any other
required documents, should be sent to the Depositary and (ii) certificates
representing the tendered Shares or a timely Book-Entry Confirmation (as
defined in the Offer to Purchase) should be delivered to the Depositary, in
each case in accordance with the instructions set forth in the Offer.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Certificates or other required documents or complete the
procedures for book-entry transfer prior to the Expiration Date, a tender must
be effected by following the guaranteed delivery procedures specified in
Section 3 of the Offer to Purchase.
Neither the Offeror, the Parent nor any officer, director, stockholder,
agent or other representative of the Offeror will pay any fees or commissions
to any broker, dealer or other person (other than the Dealer Manager, the
Depositary and the Information Agent as described in the Offer to Purchase)
for soliciting tenders of Shares pursuant to the Offer. The Offeror will,
however, upon request, reimburse you for customary mailing and handling
expenses incurred by you in forwarding any of the enclosed materials to your
clients. The Offeror will pay or cause to be paid any transfer taxes payable
on the transfer of Shares to it, except as otherwise provided in Instruction 6
of the Letter of Transmittal.
2
<PAGE>
Any inquiries you may have with respect to the Offer should be addressed to
Corporate Investor Communications, Inc., the Information Agent for the Offer,
at 111 Commerce Road, Carlstadt, New Jersey 07072-2586, (201) 896-1900 (call
collect), or Donaldson, Lufkin & Jenrette Securities Corporation, the Dealer
Manager for the Offer, at 277 Park Avenue, New York, New York 10172, (212)
892-7700 (call collect).
Requests for copies of the enclosed materials may be directed to the
Information Agent at the above address and telephone number.
Very truly yours,
Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE PARENT, THE OFFEROR, THE DEPOSITARY, THE
INFORMATION AGENT, THE DEALER MANAGER OR ANY AFFILIATE OF ANY OF THEM, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED
DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE>
Exhibit 99(a)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
FOODBRANDS AMERICA, INC.
AT
$23.40 NET PER SHARE
BY
IBP SUB, INC.
A WHOLLY OWNED SUBSIDIARY OF
IBP, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, APRIL 28, 1997, UNLESS THE OFFER IS EXTENDED.
April 1, 1997
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated April 1,
1997 (the "Offer to Purchase"), and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute
the "Offer"), relating to an offer by IBP Sub, Inc., a Delaware corporation
(the "Offeror") and a wholly owned subsidiary of IBP Foodservice, L.L.C., a
Delaware limited liability company whose sole members are IBP, inc., a
Delaware corporation (the "Parent"), and Prepared Foods, Inc., a Texas
corporation and a wholly owned subsidiary of the Parent, to purchase all
outstanding shares of common stock, par value $.01 per share (the "Shares"),
of Foodbrands America, Inc., a Delaware corporation (the "Company"), at a
purchase price of $23.40 per Share, net to the seller in cash, without
interest, upon the terms and subject to the conditions set forth in the Offer.
The Offer is being made in connection with the Agreement and Plan of Merger,
dated as of March 25, 1997, among the Parent, the Offeror and the Company (the
"Merger Agreement"). This material is being forwarded to you as the beneficial
owner of Shares carried by us in your account but not registered in your name.
A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND
PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU
FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY
US FOR YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish to tender any or
all of the Shares held by us for your account, upon the terms and conditions
set forth in the Offer.
Please note the following:
1. The tender price is $23.40 per Share, net to you in cash without
interest.
2. The Offer is being made for all of the outstanding Shares.
3. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Monday, April 28, 1997, unless the Offer is extended.
4. The Offer is conditioned upon, among other things, (i) there being
validly tendered and not withdrawn prior to the expiration of the Offer
that number of Shares representing at least a majority of all outstanding
Shares on a fully diluted basis, (ii) any waiting period under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as amended, applicable to
the purchase of Shares pursuant to the Offer having expired or having been
terminated prior to the expiration of the Offer, (iii) the Certificate of
Amendment (as defined in the Offer to Purchase) having been filed with the
Secretary of State of the State of Delaware and the Charter Amendment (as
defined in the Offer to Purchase) being in full force and effect and (iv)
the satisfaction of certain other terms and conditions contained in the
Offer to Purchase.
<PAGE>
5. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the transfer of Shares pursuant to the
Offer.
If you wish to have us tender any or all of the Shares, please so instruct
us by completing, executing, detaching and returning to us the instruction
form contained in this letter. An envelope to return your instruction to us is
enclosed. If you authorize tender of your Shares, all such Shares will be
tendered unless otherwise indicated in such instruction form. PLEASE FORWARD
YOUR INSTRUCTIONS TO US AS SOON AS POSSIBLE TO ALLOW US AMPLE TIME TO TENDER
YOUR SHARES ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and any supplements or amendments thereto. The Offer is not being
made to, nor will tenders be accepted from or on behalf of, holders of Shares
residing in any jurisdiction in which the making of the Offer or acceptance
thereof would not be in compliance with the securities laws of such
jurisdiction. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer will be
deemed to be made on behalf of the Offeror by Donaldson, Lufkin & Jenrette
Securities Corporation or by one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO
THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
FOODBRANDS AMERICA, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase dated April 1, 1997 (the "Offer to Purchase"), and the related
Letter of Transmittal (which, together with any amendments or supplements
thereto, collectively constitute the "Offer"), in connection with the offer by
IBP Sub, Inc., a Delaware corporation (the "Offeror") and a wholly owned
subsidiary of IBP Foodservice, L.L.C., a Delaware limited liability company
whose sole members are IBP, inc., a Delaware corporation ("Parent"), and
Prepared Foods, Inc., a Texas corporation and a wholly owned subsidiary of
Parent, to purchase all outstanding shares of common stock, par value $.01 per
share ("Shares"), of Foodbrands America, Inc., a Delaware corporation.
This will instruct you to tender to the Offeror the number of Shares
indicated below (or if no number is indicated below, all Shares) which are
held by you for the account of the undersigned, upon the terms and subject to
the conditions set forth in the Offer.
Number of Shares to be Tendered:*__
SIGN HERE
_____________________________________
_____________________________________
Signature(s)
Account Number:
_____________________________________
Date:
_____________________________________
(Print Name(s))
_____________________________________
_____________________________________
(Print Address(es))
_____________________________________
(Area Code and Telephone Number(s))
_____________________________________
(Taxpayer Identification or Social
Security Number(s))
- --------
* Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
3
<PAGE>
Exhibit 99(a)(5)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
FOODBRANDS AMERICA, INC.
This form, or one substantially equivalent hereto, must be used to accept
the Offer (as defined below) if certificates for shares of common stock, $.01
par value per share (the "Shares"), of Foodbrands America, Inc., a Delaware
corporation (the "Company"), are not immediately available or if the procedure
for book-entry transfer cannot be completed on a timely basis or time will not
permit all required documents to reach the Depositary on or prior to the
Expiration Date (as defined in the Offer to Purchase). Such form may be
delivered by hand or overnight courier, facsimile transmission, or mail to the
Depositary. See Section 3 of the Offer to Purchase, dated April 1, 1997 (the
"Offer to Purchase").
The Depositary for the Offer is:
THE BANK OF NEW YORK
By Mail: Facsimile Transmission: By Hand or Overnight
(for Eligible Courier:
Institutions Only)
(212) 815-6213
Tender & Exchange Tender & Exchange
Department Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver
New York, New York 10286- Window
1248 New York, New York 10286
For Confirmation Telephone:
(800) 507-9357
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUMENTS VIA A FACSIMILE TO A NUMBER
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE
DEPOSITARY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal or an
Agent's Message and certificates for Shares to the Depositary within the time
period shown herein. Failure to do so could result in a financial loss to such
Eligible Institution.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to IBP Sub, Inc., a Delaware corporation,
upon the terms and subject to the conditions set forth in the Offer to
Purchase, and the related Letter of Transmittal (which, together with any
amendments or supplements thereto, collectively constitute the "Offer"),
receipt of which are hereby acknowledged, Shares of the Company, pursuant to
the guaranteed delivery procedure set forth in Section 3 of the Offer to
Purchase.
Number of Shares: ___________________ SIGN HERE
Name(s):
Certificate No(s) (if available): _____________________________________
_____________________________________ _____________________________________
_____________________________________ (Please Print)
Address: ____________________________
If Securities will be tendered by _____________________________________
book-entry transfer: ________________ (Zip Code)
Area Code and Telephone No:
Name of Tendering Institution: _____________________________________
_____________________________________ Signature(s): _______________________
_____________________________________
Account No.: _____________________ at
GUARANTEE
[_] The Depository Trust Company
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
[_] Philadelphia Depository Trust
Company
The undersigned, a bank, broker, dealer, credit union, savings association
or other entity which is a member in good standing of the Securities Transfer
Agents Medallion Program, the New York Stock Exchange Medallion Signature
Guarantee Program, the Stock Exchange Medallion Program or a bank, broker,
dealer, credit union, savings association or other entity which is an
"eligible guarantor institution," as such term is defined in Rule 17Ad-15
under the Securities Exchange Act of 1934, as amended, guarantees the delivery
to the Depositary of the Shares tendered hereby, together with a properly
completed and duly executed Letter of Transmittal (or manually signed
facsimile(s) thereof), and 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, all within three New York Stock Exchange trading
days after the date hereof.
Name of Firm: _______________________ Title: ______________________________
_____________________________________ Name: _______________________________
(Authorized Signature) (Please Print or Type)
Address: ____________________________ Area Code and Telephone No.: ________
DO NOT SEND CERTIFICATES FOR SHARES WITH THIS FORM--CERTIFICATES SHOULD BE
SENT WITH THE LETTER OF TRANSMITTAL
Date: ________________________ , 1997
2
<PAGE>
Exhibit 99(a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYOR--Social Security numbers have nine digits separated by two hyphens:
i.e., 000-00-0000. Employer identification numbers have nine digits separated
by only one hyphen: i.e., 00-0000000. The table below will help determine the
number to give the Payor.
- ------------------------------------- -------------------------------------
<TABLE>
<CAPTION>
FOR THIS TYPE OF GIVE THE
ACCOUNT: SOCIAL SECURITY
NUMBER OF--
- -------------------------------------------
<C> <S> <C>
1. An individual's The individual
account
2. Two or more The actual owner
individuals of the account or,
(joint account) if combined funds,
the first
individual on the
account(1)
3. Custodian The minor(2)
account of a
minor (Uniform
Gift to Minors
Act)
4. a. The usual The grantor-
revocable trustee(1)
savings trust
account
(grantor is
also trustee)
b. So-called The actual owner(1)
trust account
that is not a
legal or
valid trust
under State
law
5. Sole The owner(3)
proprietorship
account
</TABLE>
<TABLE>
<CAPTION>
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--
--------------------------------------------------------------
<C> <S> <C>
6. Sole proprietorship account The owner(3)
7. A valid trust, estate, or Legal entity (Do
pension trust not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity
itself is not
designated in the
account title.)(4)
8. Corporate account The corporation
9. Religious, charitable, or educational organization account The organization
10. Partnership account held in the name of the business The partnership
11. Association, club or other tax-exempt organization The organization
12. A broker or registered nominee The broker or
nominee
13. Account with the Department of Agriculture in the name of a public entity (such as a State or local The public entity
governmental school district or prison) that receives agricultural program payments
</TABLE>
- ------------------------------------- -------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Show the name of the owner.
(4) List first and circle the name of the legal trust, estate or pension
trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or
Form SS-4, Application for Employer Identification Number (for businesses and
all other entities), or Form W-7 for Individual Taxpayer Identification Number
(for alien individuals required to file US tax returns), at the local office of
the Social Security Administration or the Internal Revenue Service and apply
for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on interest, dividends,
and broker transactions payments include the following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a), or an individual
retirement plan, or a custodial account under Section 403(b)(7).
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or
any political subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization or any agency, or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a).
. An entity registered at all times under the Investment Company Act of
1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals.
NOTE: You may be subject to backup withholding if this interest is $600 or
more and is paid in the course of the payor's trade or business and you have
not provided your correct taxpayer identification number to the payor.
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in section 6049(b)(5) to nonresident aliens.
. Payments on tax-free covenants bonds under section 1451.
. Payments made by certain foreign organizations.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYOR, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYOR. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS,
ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payor, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
SPECIFIC INSTRUCTIONS
NAME.--If you are an individual, you must generally enter the name shown on
your social security card. However, if you have changed your last name, for
instance, due to marriage, without informing the Social Security
Administration of the name change, please enter your first name, the last name
shown on your social security card and your new last name.
SOLE PROPRIETOR.--You must enter your individual name. (Enter either your SSN
or EIN in Part 1). You may also enter your business name or "doing business
as" name on the business name line. Enter your name as shown on your social
security card and business name as it was used to apply for your EIN on Form
SS-4.
PART I--TAXPAYER IDENTIFICATION NUMBER (TIN)
You must enter your TIN in the appropriate box. If you are a sole proprietor,
you may enter your SSN or EIN. Also see the chart on page 20 for further
clarification of name and TIN combinations. If you do not have a TIN, follow
the instructions under HOW TO GET A TIN on page 2.
PART II--FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING
Individuals (including sole proprietors) are not exempt from backup
withholding. Corporations are exempt from backup withholding for certain
payments, such as interest and dividends.
If you are exempt from backup withholding, you should still complete this
form to avoid possible erroneous backup withholding. Enter your correct TIN in
Part I, write "Exempt" in Part II, and sign and date the form. If you are a
nonresident alien or a foreign entity not subject to backup withholding, give
the requester a completed Form W-8, Certificate of Foreign Status.
PART III--CERTIFICATION
For a joint account, only the person whose TIN is shown in Part I should sign.
1. Interest, Dividend, and Barter Exchange Accounts Opened Before 1984 and
Broker Accounts Considered Active During 1983. You must give your correct TIN,
but you do not have to sign the certification.
2. Interest, Dividend, Broker, and Barter Exchange Accounts Opened After
1983 and Broker Accounts Considered Inactive During 1983. You must sign the
certification or backup withholding will apply. If you are subject to backup
withholding and you are merely providing your correct TIN to the requester,
you must cross out Item 2 in the certification before signing the form.
3. Real Estate Transactions. You must sign the certification. You may cross
out Item 2 of the certification.
4. Other Payments. You must give your correct TIN, but you do not have to
sign the certification unless you have been notified of an incorrect TIN.
"Other payments" include payments made in the course of the requester's trade
or business for rents, royalties, goods (other than bills for merchandise),
medical and health care services, payments to a nonemployee for services
(including attorney and accounting fees), and payments to certain fishing boat
crew members.
5. Mortgage Interest Paid by You, Acquisitions or Abandonment of Secured
Property, Cancellation of Debt, or IRA Contributions. You must give your
correct TIN, but you do not have to sign the certification.
PRIVACY ACT NOTICE
Section 6109 requires you to give your correct TIN to persons who must file
information returns with the IRS to report interest, dividends, and certain
other income paid to you, mortgage interest you paid, the acquisition or
abandonment of secured property, cancellation of debt, or contributions you
made to an IRA. The IRS uses the numbers for identification purposes and to
help verify the accuracy of your tax return. You must provide your TIN whether
or not you are required to file a tax return. Payors must generally withhold
31% of taxable interest, dividend, and certain other payments to a payee who
does not give a TIN to a payor. Certain penalties may also apply.
<PAGE>
Exhibit 99(a)(7)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell these securities. The Offer is made only by the Offer to
Purchase and the related Letter of Transmittal and is not being made to (nor
will tenders be accepted from) holders of Shares in any jurisdiction in which
the Offer or the acceptance thereof would not be in compliance with the
securities laws of such jurisdiction. In those jurisdictions where securities
laws require the Offer to be made by a licensed broker or dealer, the Offer
shall be deemed to be made on behalf of the Offeror by Donaldson, Lufkin &
Jenrette Securities Corporation or one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
FOODBRANDS AMERICA, INC.
AT
$23.40 PER SHARE
BY
IBP SUB, INC.
A WHOLLY OWNED SUBSIDIARY OF
IBP, INC.
IBP Sub, Inc., a Delaware corporation (the "Offeror") and a wholly owned
subsidiary of IBP Foodservice L.L.C., a Delaware limited liability company
whose sole members are IBP, inc., a Delaware corporation (the "Parent") and
Prepared Foods, Inc., a Texas corporation and a wholly owned subsidiary of the
Parent, hereby offers to purchase all outstanding shares of Common Stock, par
value $.01 per share (the "Shares"), of Foodbrands America, Inc., a Delaware
corporation (the "Company"), at a purchase price of $23.40 per Share, net to
the seller in cash, without interest, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated April 1, 1997 (the "Offer
to Purchase"), and in the related Letter of Transmittal (which, together with
any amendments or supplements thereto, collectively constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, APRIL 28, 1997, UNLESS THE OFFER IS EXTENDED.
The Offer is being made pursuant to an Agreement and Plan of Merger dated as
of March 25, 1997 (the "Merger Agreement"), among the Parent, the Offeror and
the Company. The Merger Agreement provides, among other things, that, unless
the parties otherwise agree, no later than the second business day after the
purchase of Shares pursuant to the Offer and the satisfaction of the other
conditions set forth in the Merger Agreement, the Offeror will be merged with
and into the Company (the "Merger") in accordance with the relevant provisions
of Delaware law. 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 by the Company as treasury stock, Shares owned by any
wholly owned subsidiary of the Company, Shares owned by the Parent or the
Offeror or any subsidiary thereof, and Shares held by stockholders, if any,
who properly exercise their appraisal rights under Delaware law) will be
cancelled and converted into and become the right to receive $23.40 in cash,
or any higher price that is paid in the Offer, without interest. On March 25,
1997, the Parent and the Offeror entered into Tender Agreements (the "Tender
Agreements") with certain stockholders of the Company, pursuant to which such
stockholders agreed, among other things, (1) to tender to the Offeror pursuant
to the Offer, at $23.40 per share, such number of Shares which, when taken
together with the Shares currently owned by the Parent and the Offeror, would
cause the Parent and its affiliates to beneficially own 49.9% of the aggregate
voting power represented by the issued and outstanding capital stock of the
Company; (2) to grant to the Offeror options to purchase the same number of
Shares held by such stockholders in certain circumstances; and (3) to vote the
same number of Shares held by such stockholders in favor of the Merger
Agreement and against all other acquisition proposals.
<PAGE>
In connection with the Merger Agreement and the Tender Agreements, the Board
of Directors of the Company has approved, and stockholders representing a
majority of the Shares have approved by written consent in lieu of a meeting
of stockholders, amendments (the "Charter Amendment") to the Amended and
Restated Certificate of Incorporation of the Company (the "Charter") that
exclude the Merger Agreement, the Tender Agreements and the transactions
contemplated therein from the restrictions of Article Fifth of the Charter
(relating to certain stock transfer restrictions intended to preserve the tax
benefits from the Company's previous net operating losses). The Company has
filed with the Securities and Exchange Commission an information statement
(the "Information Statement") relating to the Charter Amendment and has agreed
to distribute definitive copies of the Information Statement to the Company's
stockholders as soon as practicable. The Company has agreed to file with the
Secretary of State of the State of Delaware a certificate of amendment (the
"Certificate of Amendment") relating to the Charter Amendment on the next
business day following the expiration of any required period of distribution
of the Information Statement. There can be no assurance that the Certificate
of Amendment will be so filed with Secretary of State of the State of Delaware
on or prior to April 28, 1997.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (i) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES REPRESENTING AT LEAST A MAJORITY OF ALL OUTSTANDING SHARES ON A FULLY
DILUTED BASIS, (ii) ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST
IMPROVEMENTS ACT OF 1976, AS AMENDED, APPLICABLE TO THE PURCHASE OF SHARES
PURSUANT TO THE OFFER HAVING EXPIRED OR HAVING BEEN TERMINATED PRIOR TO THE
EXPIRATION OF THE OFFER, (iii) THE CERTIFICATE OF AMENDMENT HAVING BEEN FILED
WITH THE SECRETARY OF STATE OF THE STATE OF DELAWARE AND THE CHARTER AMENDMENT
BEING IN FULL FORCE AND EFFECT, AND (iv) THE SATISFACTION OF CERTAIN OTHER
TERMS AND CONDITIONS.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER, THE MERGER,
THE MERGER AGREEMENT AND THE TENDER AGREEMENTS, HAS DETERMINED THAT THE MERGER
IS ADVISABLE AND THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND
IN THE BEST INTERESTS OF, THE COMPANY'S STOCKHOLDERS, AND RECOMMENDS THAT THE
COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES IN THE OFFER.
For purposes of the Offer, the Offeror will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as,
if and when the Offeror gives oral or written notice to The Bank of New York
(the "Depositary") of the Offeror's acceptance of such Shares for payment. In
all cases, payment for Shares purchased pursuant to the Offer will be made by
deposit of the purchase price with the Depositary, which shall act as agent
for tendering stockholders for the purpose of receiving payment from the
Offeror and transmitting payment to the tendering stockholders. Payment for
Shares accepted for payment pursuant to the Offer will be made only after
timely receipt by the Depositary of (i) certificates for such Shares or timely
confirmation of a book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facilities (as defined in the Offer to
Purchase), pursuant to the procedures set forth in the Offer to Purchase, (ii)
a properly completed and duly executed Letter of Transmittal (or manually
signed facsimile thereof), with any required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message (as defined in the Offer to
Purchase) and (iii) any other documents required by the Letter of Transmittal.
If any of the conditions set forth in the Offer to Purchase that relate to
the Offeror's obligations to purchase the Shares are not satisfied by 12:00
Midnight, New York City time, on Monday, April 28, 1997 (or any other time
then set as the Expiration Date), the Offeror may, subject to the terms of the
Merger Agreement, (i) extend the Offer and, subject to applicable withdrawal
rights, retain all tendered Shares until the expiration of the Offer, as
extended, (ii) subject to complying with applicable rules and regulations of
the Securities and Exchange Commission, accept for payment all Shares so
tendered and not extend the Offer, or (iii) terminate the Offer and not accept
for payment any Shares and return all tendered Shares to tendering
stockholders. The term
2
<PAGE>
"Expiration Date" shall mean 12:00 Midnight, New York City time, on Monday,
April 28, 1997, unless the Offeror shall have extended the period of time for
which the Offer is open, in which event the term "Expiration Date" shall mean
the latest time and date at which the Offer, as so extended by the Offeror,
shall expire. The Offeror expressly reserves the right, in its sole
discretion, at any time or from time to time, subject to applicable law and to
the terms of the Merger Agreement, to extend the period during which the Offer
is open by giving oral or written notice of such extension to the Depositary
followed by, as promptly as practicable, a public announcement thereof no
later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date.
Except as otherwise provided in Section 4 of the Offer to Purchase, tenders
of Shares made pursuant to the Offer are irrevocable, except that Shares
tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date and, unless theretofore accepted for payment, may also be
withdrawn at any time after May 30, 1997. For a withdrawal to be effective, a
written, telegraphic, telex or facsimile transmission notice of withdrawal
must be timely received by the Depositary at one of its addresses set forth on
the back cover of the Offer to Purchase. Any 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 in which the certificates
representing such Shares are registered, if different from that of the person
who tendered the Shares. If certificates for Shares to be withdrawn have been
delivered or otherwise identified to the Depositary, then, prior to the
physical release of such certificates, the serial numbers shown on such
certificates must be submitted to the Depositary and, unless such Shares have
been tendered by an Eligible Institution (as defined in the Offer to
Purchase), the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution. If Shares have been delivered pursuant to the procedure
for book-entry transfer as set forth in the Offer to Purchase, any notice of
withdrawal must also specify the name and number of the account at the
appropriate Book-Entry Transfer Facility to be credited with the withdrawn
Shares and otherwise comply with such Book-Entry Facility's procedures. All
questions as to the form and validity (including time of receipt) of a notice
of withdrawal will be determined by the Offeror, in its sole discretion, and
its determination shall be final and binding on all parties.
The information required to be disclosed by Paragraph (e)(1)(vii) of Rule
14d-6 of the General Rules and Regulations under the Securities Exchange Act
of 1934, as amended, is contained in the Offer to Purchase and is incorporated
herein by reference.
The Company has provided the Offeror with the Company's list of stockholders
and security position listings for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase, the related Letter of Transmittal
and other related materials are being mailed to record holders of Shares and
will be furnished to brokers, dealers, commercial banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on the
list of stockholders or, if applicable, who are listed as participants in a
clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION THAT SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
Requests for copies of the Offer to Purchase and the related Letter of
Transmittal and other tender offer materials may be directed to the
Information Agent or the Dealer Manager as set forth below, and copies will be
furnished promptly at the Offeror's expense. No fees or commissions will be
payable to brokers, dealers or other persons other than the Information Agent,
the Dealer Manager and the Depositary for soliciting tenders of Shares
pursuant to the Offer.
The Information Agent for the Offer is:
CORPORATE INVESTOR COMMUNICATIONS, INC.
111 Commerce Road
Carlstadt, New Jersey 07072-2586
Banks and Brokers call collect (201) 896-1900
All others call Toll Free: (888) 805-6307
3
<PAGE>
The Dealer Manager for the Offer is:
DONALDSON, LUFKIN & JENRETTE
Securities Corporation
277 Park Avenue
New York, New York 10172
(212) 892-7700 (Call collect)
April 1, 1997
4
<PAGE>
Exhibit 99(f)
Foodbrands America, Inc.
------------------------
Outbound Telephone Script Regarding the Tender Offer by IBP, inc.
LIVE PERSON
- -----------
. Hello, may I speak with ______________________________.
. My name is ____________________________. I am calling on behalf of IBP, inc.
regarding the tender offer for your shares of Foodbrands America, Inc.
. Have you received the material we mailed to you regarding the offer?
* IF "YES"
----------
Are you planning to take advantage of the offer?
IF "YES"
--------
We appreciate your support. As a reminder, your response must be
received prior to expiration of the offer at 12:00 midnight, New
York City time on April 28, 1997.
- (For NOBO's only, also say) Please make sure that you give
your broker sufficient time to process your instructions to
tender your shares prior to the expiration date.
IF "NO"
-------
Do you have any questions or concerns regarding the offer that I
can address?
* IF "NO"
---------
I will send you another set of material. May I get your current address?
(take address).
. If you have any questions or need help please feel free to call us toll-free
at 888-805-6307. Thank you for your time. Have a nice day.
ANSWERING MACHINE
- -----------------
. Hello, may I speak with _____________________________________.
. My name is ________________________. I am calling on behalf of IBP, inc.
regarding the tender offer for your shares of Foodbrands America, Inc.
. This is a courtesy call to ensure that you received the materials mailed to
you regarding the offer and to remind you that the offer expires at 12:00
midnight, New York City time on April 28, 1997. If you have any questions or
need any assistance, please feel free to call us toll free at 888-805-6307
Corporate Investor Communications, Inc.
