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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [_]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X]Preliminary Proxy Statement [_] Confidential,]for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ADT LIMITED
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
WESTERN RESOURCES, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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<PAGE>
PRELIMINARY COPY--SUBJECT TO COMPLETION
[LOGO] WESTERN RESOURCES/(R)/
December , 1996
Dear Fellow ADT Shareowner:
We are pleased to enclose for your consideration Western Resources' proxy
statement and GREEN proxy card relating to the special general meeting of ADT
Limited shareholders.
In the past, ADT has advised Western Resources that it is not interested in
discussing a business arrangement between ADT and Western Resources that could
maximize ADT's potential both in its existing security business and in the
emerging market of deregulated retail energy distribution. After careful study
and consideration, we have determined that the potential benefits to ADT,
Western Resources and ADT's other shareowners can be best realized through a
combination of Western Resources and ADT. Therefore, Western Resources is
taking its proposal to combine with ADT directly to the true owners of ADT--
the ADT shareowners.
Western Resources is offering to exchange each ADT common share for $7.50 in
cash and $15.00 in Western Resources Common Stock (provided that in no event
will ADT issue more than 0.50420 shares of Western Resources Common Stock per
ADT common share) (the "Offer"). Following completion of the Offer, Western
Resources plans to acquire the remaining equity interest of ADT by effecting
an amalgamation of a Bermuda subsidiary of Western Resources with and into ADT
(the "Amalgamation").
The ADT board has established certain impediments to consummation of the
Offer, including ADT's recently adopted "poison pill" shareholder rights plan
pursuant to which the associated preference share purchase rights were issued.
Western Resources believes that the ADT board of directors may be unwilling to
amend or redeem the "poison pill" and otherwise permit the Offer to be
consummated. Accordingly, Western Resources is soliciting your proxy as a
shareowner of ADT to remove the present members of the ADT board and to
replace them with nominees of Western Resources who presently intend to take
all actions necessary to expedite consummation of the Offer and the
Amalgamation, including amending or redeeming ADT's "poison pill."
Based upon the closing price of ADT common shares on December 17, 1996, the
Offer represents a 12% premium over ADT's market price. In addition, the Offer
provides ADT shareowners with the opportunity to invest in a combined company
with the potential to become a market leader in the converging energy
marketing and security industries.
TO RECEIVE THE BENEFITS OF THE OFFER, IT IS IMPORTANT THAT YOU VOTE THE
GREEN PROXY CARD IN FAVOR OF WESTERN RESOURCES' NOMINEES AND PROPOSALS. ONLY
YOUR LATEST-DATED PROXY WILL COUNT AT THE ADT SPECIAL MEETING.
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If you have any questions concerning this Proxy Statement or the Offer or
need assistance in voting your shares, please contact our Information Agent, [
] at 1-800- .
YOUR VOTE IS ESSENTIAL
IF YOU WANT THE OFFER TO SUCCEED, VOTE FOR THE WESTERN RESOURCES PROPOSALS BY
SIGNING, DATING AND RETURNING THE ENCLOSED GREEN PROXY CARD TODAY.
Thank you for your attention and support.
Sincerely,
/s/ Illegible
Chairman of the Board
and Chief Executive Officer
IMPORTANT VOTING INFORMATION
If your shares are held in your own name, please sign, date and return
the enclosed GREEN proxy card in the postage-paid envelope provided with
this letter. If your shares are held in the name of a brokerage firm, bank
or other institution, please sign, date and return the GREEN proxy card to
such brokerage firm, bank or other institution in the envelope provided by
that firm.
If you have any questions or require any assistance in voting your
shares, please call toll free:
[INFORMATION AGENT]
[ADDRESS]
[PHONE]
Western Resources has filed exchange offer materials with the Securities and
Exchange Commission and intends to make its offer directly to shareholders of
ADT Limited as soon as its registration statement has been declared effective
by the Securities and Exchange Commission.
A registration statement relating to the Western Resources securities
referred to in this letter and in the accompanying proxy statement has been
filed with the Securities and Exchange Commission but has not yet become
effective. Such securities may not be sold nor may offers to buy be accepted
prior to the time the registration statement becomes effective. This letter
and the accompanying proxy statement shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such state.
2
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PRELIMINARY COPY--SUBJECT TO COMPLETION--DATED DECEMBER 18, 1996
SPECIAL GENERAL MEETING OF SHAREHOLDERS
OF
ADT LIMITED
----------------
RELATING TO THE REMOVAL OF THE EXISTING BOARD OF DIRECTORS OF ADT LIMITED,
THE REDUCTION OF THE SIZE OF SUCH BOARD TO TWO DIRECTORS
AND THE ELECTION OF THE NOMINEES OF WESTERN RESOURCES, INC.
----------------
PROXY STATEMENT
OF
WESTERN RESOURCES, INC.
This Preliminary Proxy Statement and the accompanying GREEN proxy card are
furnished by Western Resources, Inc., a Kansas corporation ("Western
Resources"), in connection with its solicitation of proxies to be voted at the
special general meeting of shareholders of ADT Limited, a company incorporated
under the laws of Bermuda ("ADT"), and at any adjournments, postponements,
continuations or reschedulings thereof (the "ADT Special Meeting"). This Proxy
Statement is first being mailed to ADT shareholders on or about , 1997.
Westar Capital, Inc., a Kansas corporation and a wholly owned subsidiary of
Western Resources ("Westar Capital"), has requested, in accordance with the
Bye-Laws of ADT (the "ADT Bye-Laws") and Bermuda law, that the ADT Special
Meeting be convened on February 18, 1997; however, as of the date of this
Preliminary Proxy Statement, the date, time and place for the ADT Special
Meeting have not been determined. Enclosed is a copy of the Western Resources
Preliminary Prospectus filed with the Securities and Exchange Commission on
December 18, 1996 (the "Preliminary Prospectus") which sets forth the terms
and conditions of the Offer (as hereinafter defined).
At the ADT Special Meeting, ADT shareholders will be asked to vote upon the
following proposals:
(1) The removal of all eight of the present members of the board of
directors of ADT (the "ADT Board") and any person or persons elected or
designated by any of such directors to fill any vacancy or newly
created directorships;
(2) The reduction of the number of seats on the ADT Board to two; and
(3) The election of Steven L. Kitchen and Steven A. Millstein (the "Western
Resources Nominees") as the directors of ADT (or, if either Western
Resources Nominee is unable to serve as a director of ADT due to death,
disability or otherwise, any other person designated as a Western
Resources Nominee by Western Resources).
Each of the foregoing actions (collectively, the "Western Resources
Proposals") is designed to expedite consummation of Western Resources' offer
to acquire ADT for $7.50 net in cash and $15.00 in Western Resources Common
Stock (as defined below). Shareholders of ADT are being asked to vote FOR each
of the Western Resources Proposals on the accompanying GREEN proxy card.
WESTERN RESOURCES RECOMMENDS THAT YOU VOTE FOR EACH OF THE WESTERN
RESOURCES PROPOSALS.
Western Resources has filed exchange offer materials with the Securities and
Exchange Commission (the "Commission"). As soon as Western Resources'
registration statement has been declared effective by the Commission, Western
Resources and Westar Capital intend to commence an offer to exchange shares of
common stock, par value $5.00 per share, of Western Resources ("Western
Resources Common Stock"), and cash, for each outstanding common share, par
value $ 0.10 per share (each a "Share" and collectively, the "Shares"), of
ADT, including the associated preference share purchase rights (each, a
"Right" and collectively, the "Rights") issued pursuant to the Rights
Agreement, dated as of November 6, 1996, between ADT and Citibank, N.A., New
York branch, as Rights Agent (the "Rights Agreement"), upon the terms and
subject to the conditions set
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forth in the Preliminary Prospectus and in the related Letter of Transmittal
(which, together with the final Prospectus, as it may be amended or
supplemented, shall constitute the "Offer"). The term "Expiration Date" means
5:00 p.m., Eastern time, on , 1997, unless and until Western
Resources, in its sole discretion, shall have extended the period of time
during which the Offer is open, in which event the term "Expiration Date"
shall mean the latest time and date at which the Offer, as so extended by
Western Resources, will expire.
In the Offer, each Share will be entitled to receive $7.50 net in cash (the
"Cash Consideration") and that number of shares of Western Resources Common
Stock equal to the Exchange Ratio (as defined below) (the "Stock
Consideration" and, together with the Cash Consideration, the "Offer
Consideration"). The term "Exchange Ratio" means the quotient (rounded to the
nearest 1/100,000) determined by dividing $15.00 by the average of the high
and low sales prices of Western Resources Common Stock (as reported on the New
York Stock Exchange, Inc. (the "NYSE") Composite Transactions reporting system
as published in The Wall Street Journal or, if not published therein, in
another authoritative source) (the "Western Resources Average Price") on each
of the twenty consecutive trading days ending with the third trading day
immediately preceding the Expiration Date; provided, that the Exchange Ratio
shall not be greater than 0.50420. Pursuant to the Exchange Ratio, each Share
will be exchanged for $7.50 net in cash and $15.00 of Western Resources Common
Stock as long as the Western Resources Average Price is $29.75 or higher. If
the Western Resources Average Price is less than $29.75, each Share will be
exchanged for $7.50 net in cash and less than $15.00 of Western Resources
Common Stock. Western Resources Common Stock is listed for trading under the
symbol "WR" on the NYSE. On December 17, 1996, the closing price of Western
Resources Common Stock on the NYSE was $31.25. Based on such closing price,
the Exchange Ratio would be 0.48000 and each Share would be converted into
$7.50 net in cash and $15.00 of Western Resources Common Stock. The Exchange
Ratio will change as the market price of the Western Resources Common Stock
changes. Holders of Shares ("ADT Shareholders") may call (800) any time
on or after the date hereof through the Expiration Date for the current
Exchange Ratio calculated based on the then-current Western Resources Average
Price for the twenty consecutive trading days ending with the third trading
day immediately preceding the date the call is placed. The actual Western
Resources Average Price and Exchange Ratio will be calculated as of the third
trading day immediately prior to the Expiration Date, as described above, and
a press release will be issued announcing the actual Exchange Ratio prior to
the opening of the second trading day prior to the Expiration Date (as it may
be extended from time to time).
Complete information regarding the Offer is contained in the Preliminary
Prospectus, which is available upon request from the Information Agent for the
Offer, [ ] ("[ ]"), and in the Tender Offer Statement on Schedule 14D-
1, which will be filed with the Commission prior to the commencement of the
Offer. The Tender Offer Statement on Schedule 14D-1 and any amendments
thereto, including exhibits, should be available for inspection and copies
should be obtainable in the manner set forth under the caption "Certain
Information Concerning Western Resources and ADT" (except that such material
will not be available at the regional offices of the Commission or at the
offices of the NYSE).
The purpose of the Offer is to enable Western Resources to acquire control
of ADT. Western Resources presently intends, following consummation of the
Offer, to propose and seek to have ADT effect an amalgamation of a wholly
owned subsidiary of Western Resources, incorporated under the laws of Bermuda
("Bermuda Sub"), with and into ADT, pursuant to the provisions of Sections 104
through 109 of the Companies Act 1981 of Bermuda, as amended (the "Companies
Act"), with the amalgamated company operating under the name of ADT (the
"Amalgamation"). In the Amalgamation, each then outstanding Share (other than
Shares owned by Western Resources or any of its affiliates, Shares held in the
treasury of ADT (if ADT is so authorized) or by any subsidiary of ADT and
Shares owned by ADT Shareholders who perfect appraisal rights under Bermuda
law) would be cancelled in exchange for the right to receive the Offer
Consideration.
THE ACCEPTANCE OF AND PAYMENT FOR SHARES BY WESTERN RESOURCES PURSUANT TO
THE OFFER IS CONDITIONED UPON ADOPTION OF THE WESTERN RESOURCES PROPOSALS.
ACCORDINGLY, APPROVAL OF THE WESTERN RESOURCES PROPOSALS AT THE ADT SPECIAL
MEETING WILL FACILITATE THE PROMPT CONSUMMATION OF THE OFFER.
2
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WESTERN RESOURCES URGES ADT SHAREHOLDERS TO PRESERVE THEIR OPPORTUNITY TO
ACCEPT THE SIGNIFICANT BENEFITS OF THE OFFER BY PROMPTLY SIGNING, DATING AND
RETURNING THE ENCLOSED GREEN PROXY CARD. YOU MUST SEPARATELY TENDER YOUR
SHARES PURSUANT TO THE OFFER IF YOU WISH TO PARTICIPATE IN THE OFFER. VOTING
FOR THE WESTERN RESOURCES PROPOSALS DOES NOT OBLIGATE YOU TO TENDER YOUR
SHARES PURSUANT TO THE OFFER, AND YOUR FAILURE TO VOTE FOR THE WESTERN
RESOURCES PROPOSALS DOES NOT PREVENT YOU FROM TENDERING YOUR SHARES PURSUANT
TO THE OFFER.
If your Shares are held in your own name, please sign, date and return the
enclosed GREEN proxy card in the postage-paid envelope provided with this
Proxy Statement. If your Shares are held in the name of a brokerage firm, bank
or other institution, please sign, date and return the GREEN proxy card to
such brokerage firm, bank or other institution in the envelope provided by
that firm.
If you have any questions or require assistance in voting your Shares,
please call toll free:
[INFORMATION AGENT]
[ADDRESS]
[PHONE]
THIS PRELIMINARY PROXY STATEMENT IS NEITHER A REQUEST FOR THE TENDER OF
SHARES NOR AN OFFER WITH RESPECT THERETO. THE OFFER WILL BE MADE ONLY BY MEANS
OF THE FINAL PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL WHICH WILL BE
SEPARATELY MAILED TO ADT SHAREHOLDERS.
3
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THE WESTERN RESOURCES PROPOSALS
THE REQUISITION
On December 18, 1996, Westar Capital deposited a requisition (the
"Requisition") with ADT, pursuant to Section 74 of the Companies Act and Bye-
Law 42 of the ADT Bye-Laws, requiring the ADT Board to convene the ADT Special
Meeting so that ADT Shareholders will have the opportunity to vote on the
Western Resources Proposals. Under the Companies Act and the ADT Bye-Laws, the
ADT Board is required to convene the ADT Special Meeting. In the event that
the ADT Board does not within twenty-one days from the date of the deposit of
the Requisition convene the ADT Special Meeting, Westar Capital may itself
convene the ADT Special Meeting. Westar Capital has requested that the date of
the ADT Special Meeting be February 18, 1997; however, as of the date of this
Preliminary Proxy Statement, the date, time and place for the ADT Special
Meeting have not been determined and there can be no assurances that the ADT
Special Meeting will be convened on such date.
DESCRIPTION OF THE WESTERN RESOURCES PROPOSALS
Western Resources is soliciting proxies in connection with the ADT Special
Meeting for the approval of the Western Resources Proposals, which are
described below. At the ADT Special Meeting, ADT Shareholders will be asked to
adopt the resolutions attached as Annex 1 hereto in order to implement the
Western Resources Proposals.
(1) Removal of Directors. The Western Resources Proposals include the
removal of all eight of the present members of the ADT Board and any other
person who may be a director of ADT at the time of the ADT Special Meeting.
Pursuant to Section 93 of the Companies Act and Bye-Law 71 of the ADT Bye-
Laws, any director of ADT may be removed from office as a director by a
resolution of ADT Shareholders to that effect.
(2) Reduction of the Number of Seats on the ADT Board. The Western Resources
Proposals include a proposal to reduce the number of seats on the ADT Board to
two. Section 91(1) of the Companies Act provides that the affairs of a company
shall be managed by not less than two directors. Bye-Law 52 of the ADT Bye-
Laws provides that the number of directors shall be such number, not less than
two, as the shareholders in general meeting may from time to time determine.
The ADT Board is currently comprised of eight directors.
(3) Election of the Western Resources Nominees. The Western Resources
Proposals include the election as directors of ADT of the two Western
Resources Nominees named in the table below, each of whom has consented to
serve as a director, if elected, until the next annual general meeting of
shareholders of ADT and until his successor has been elected and qualified.
Westar Capital plans to nominate each of the Western Resources Nominees in
accordance with the ADT Bye-Laws which require that written notice be given of
Westar Capital's intention to propose the Western Resources Nominees for
election to the ADT Board, together with notice in writing signed by the
Western Resources Nominees of their willingness to be elected, to the
Corporate Secretary of ADT not less than 6 and not more than 28 days prior to
the day appointed for the shareholder meeting at which directors are to be
elected. In order to comply with the requirement of Bye-Law 53 of the ADT Bye-
Laws that a director of ADT own one Share, each of the Western Resources
Nominees will own at least one Share at the time of the ADT Special Meeting.
Western Resources' primary purpose in seeking to elect the Western Resources
Nominees to the ADT Board is to take all actions necessary to expedite
consummation of the Offer and the Amalgamation. The Western Resources Nominees
would also be responsible for managing the business and affairs of ADT and
intend to discharge fully their obligations under Bermuda law. Although
Western Resources has no reason to believe that any of the Western Resources
Nominees will be unable to serve as a director of ADT, if either of the
Western Resources Nominees is not available for election, the persons named as
proxies on the GREEN proxy card will vote for the election of such other
nominee or nominees as may be proposed by Western Resources.
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<TABLE>
<CAPTION>
EMPLOYMENT HISTORY OR PRESENT
NAME, AGE AND PRINCIPAL OCCUPATION AND
BUSINESS ADDRESS FIVE-YEAR EMPLOYMENT HISTORY
---------------- -----------------------------
<S> <C>
Steven L. Kitchen (51).. Mr. Kitchen has been Executive Vice President and Chief Financial
Western Resources, Inc. Officer of Western Resources during the past five years.
818 S. Kansas Avenue
Topeka, Kansas 66612
Steven A. Millstein
(43)................... Mr. Millstein has been President of Westar Security, Inc. since 1995.
Westar Security, Inc. From 1992 through 1995, Mr. Millstein held the position of Vice President
818 S. Kansas Avenue of Marketing and Sales with Acoustics Development Corporation. Prior to
Topeka, Kansas 66612 such time, Mr. Millstein served as Division Manager for Production Manage-
ment at Southwestern Bell Telephone Company.
</TABLE>
Schedule B sets forth certain information relating to Shares owned by the
Western Resources Nominees and certain transactions between any of them and
ADT.
The Western Resources Nominees will receive no compensation for agreeing to
stand for election as directors of ADT. In addition, it is anticipated that
each Western Resources Nominee, upon election, will receive no director's fees
for services as a director of ADT. Western Resources has agreed to indemnify
each Western Resources Nominee, to the fullest extent permitted by applicable
law, from and against any and all expenses, liabilities or losses of any kind
arising out of any threatened or filed claim, action, suit or proceeding,
whether civil, criminal, administrative or investigative, asserted against or
incurred by the Western Resources Nominee in his or her capacity as a nominee
for election as a director of ADT, and, if elected, as a director of ADT, or
arising out of his or her status in either such capacity. Western Resources
has also agreed to reimburse each Western Resources Nominee for his or her
reasonable out-of-pocket expenses, including reasonable fees and expenses of
counsel.
THE PURPOSE OF THE WESTERN RESOURCES PROPOSALS IS TO FACILITATE CONSUMMATION
OF THE OFFER WHICH WOULD ENABLE ADT SHAREHOLDERS TO RECEIVE $7.50 NET IN CASH
AND $15.00 OF WESTERN RESOURCES COMMON STOCK (SUBJECT TO ADJUSTMENT) FOR EACH
SHARE.
WESTERN RESOURCES BELIEVES THAT IT IS IN THE BEST INTERESTS OF ADT
SHAREHOLDERS TO APPROVE THE WESTERN RESOURCES PROPOSALS, INCLUDING THE
ELECTION OF THE WESTERN RESOURCES NOMINEES, AT THE ADT SPECIAL MEETING. THE
WESTERN RESOURCES NOMINEES PRESENTLY INTEND, SUBJECT TO THE FULFILLMENT OF THE
FIDUCIARY DUTIES THEY WOULD HAVE AS DIRECTORS OF ADT, TO TAKE ALL ACTIONS
NECESSARY AND DESIRABLE TO FACILITATE THE CONSUMMATION OF THE OFFER.
WESTERN RESOURCES RECOMMENDS THAT YOU VOTE FOR EACH OF THE WESTERN RESOURCES
PROPOSALS.
The effect of the Western Resources Proposals will be to replace the current
directors of ADT, Michael A. Ashcroft, John E. Dannenberg, Alan B. Henderson,
James S. Pasman, Jr., Stephen J. Ruzika, W. Peter Slusser, William W. Stinson
and Raymond S. Troubh, with the Western Resources Nominees. The Western
Resources Nominees have stated their intention to take, subject to the
fulfillment of the fiduciary duties they would have as directors of ADT, all
actions necessary and desirable to facilitate consummation of the Offer and
the Amalgamation including, among other things, (i) either redeeming the
Rights or amending the Rights Agreement to make the Rights inapplicable to the
Offer, if necessary, in order to satisfy the Rights Plan Condition, (ii) not
invoking the provisions of Bye-Law 104 or 46 of the ADT Bye-Laws (as described
below) in connection with the acquisition of Shares by Western Resources
pursuant to the Offer or otherwise, (iii) adopting and approving an agreement
and plan of amalgamation among ADT, Bermuda Sub and Western Resources pursuant
to which Bermuda Sub will amalgamate with and into ADT, with the amalgamated
company operating under the name of
5
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ADT, and ADT Shareholders (other than Western Resources and ADT and their
respective affiliates, and ADT Shareholders who perfect appraisal rights under
Bermuda law) will receive the Offer Consideration in exchange for the
cancellation of each Share (the "Amalgamation Agreement") and (iv) proposing
an amendment to the ADT Bye-Laws providing that an amalgamation may be
approved by the affirmative vote of a simple majority of the votes cast at a
general meeting of ADT (the "Bye-Law Amendment").
VOTING AT THE ADT SPECIAL MEETING
Adoption of each of the resolutions to be presented at the ADT Special
Meeting requires the affirmative vote of a simple majority of votes, assuming
the presence of a quorum of two holders of Shares present either in person or
by proxy. Such vote may be decided on a show of hands, with each ADT
Shareholder present in person or by proxy entitled to one vote, provided, that
if a poll is demanded, the required vote shall be determined by reference to
the number of Shares voted. A poll may be demanded at the ADT Special Meeting,
before or on the declaration of the result of a show of hands, by (a) the
chairman of the meeting, (b) at least three ADT Shareholders present in person
or represented by proxy, (c) any ADT Shareholder(s) present in person or
represented by proxy holding between them not less than one-tenth of the total
voting rights of the ADT Shareholders entitled to vote at the ADT Special
Meeting; (d) any Sentry Shareholder(s) present in person or represented by
proxy holding Shares on which an aggregate sum has been paid up equal to not
less than one-tenth of the total sum paid up on all Shares entitled to vote at
such meeting. Western Resources and Westar Capital intend to vote Westar
Capital's Shares and those Shares for which Western Resources or its
representatives hold valid proxies at the ADT Special Meeting in favor of each
of the Western Resources Proposals.
The accompanying GREEN proxy card will be voted in accordance with your
instructions on such card at the ADT Special Meeting. You may vote FOR the
Western Resources Proposals or vote against, or abstain from voting on, the
Western Resources Proposals by marking the proper box on the GREEN proxy card
for the ADT Special Meeting. If no marking is made, you will be deemed to have
given a direction to vote the Shares represented by the GREEN proxy card FOR
the Western Resources Proposals, provided that you have signed the proxy card.
WESTERN RESOURCES RECOMMENDS A VOTE FOR THE WESTERN RESOURCES PROPOSALS.
It is not expected that any matter other than those referred to herein will
be brought before the ADT Special Meeting.
6
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REASONS FOR THE SOLICITATION
The purpose of this solicitation (the "Proxy Solicitation") is to remove all
of the present members of the ADT Board, to reduce the number of seats on the
ADT Board to two and to elect the Western Resources Nominees to the ADT Board
in order to expedite consummation of the Offer and the Amalgamation, which
Western Resources believes will be beneficial to both ADT and Western
Resources shareholders.
ENHANCED BUSINESS OPPORTUNITIES
The Western Resources Board believes the combination of ADT and Western
Resources will provide significant benefits to the shareholders of both
companies. The combination of ADT's leading national presence and unmatched
brand equity in the security business and Western Resources' strong core
utility business and customer service expertise should provide the combined
entity with opportunities not available to either company on its own.
Following the Amalgamation, Western Resources intends to capitalize on these
opportunities to become one of the leading providers of energy and energy-
related products and services, including security, to homes and businesses.
As deregulation continues for electric and natural gas utilities, individual
homes and businesses will have the opportunity to choose their energy
providers. As this process unfolds, companies with nationally recognized brand
names will have a significant advantage in marketing energy and energy-related
products and services. Consummation of the Offer and the Amalgamation will
position ADT to take advantage of this emerging market, as Western Resources
intends to leverage ADT's strong brand name by marketing energy and energy
related products and services to existing ADT customers and to new customers
who know and trust the ADT brand name. Western Resources believes this package
of services will add another vital dimension to the security products and
services that ADT is currently marketing.
GROWTH OPPORTUNITIES IN THE SECURITY INDUSTRY
The U.S. security business is a growth industry with annual revenue of $13
billion estimated to be growing at about 10% per year. Many opportunities for
further growth exist, particularly in the residential segment.
Currently, the security industry serves approximately 17.4 million
residential customers in the U.S. The number of households purchasing security
alarm services each year has grown at a 13% rate in recent years with growth
expected at an annual rate of 10% through the year 2000. This sustained growth
will be driven by a combination of increased demand for security alarm
services and the low current penetration rate. Today, only 22% of single
family households and 18% of total U.S. households have the protection
provided by an electronic security alarm system. With the advent of more
reliable, less costly, equipment, which is easier to install, the price of the
average alarm system has decreased dramatically, permitting a significantly
larger segment of the population to afford this service. The average price of
a residential alarm system was $1,500 in 1990, compared with only $1,200
today. This decrease has coincided with an increased awareness and concern
over the incidence of crime, and a stronger general desire on the part of
consumers to protect their families and property. Industry estimates project
the penetration rate of the residential market segment at least double its
current level to over 40% by the year 2005, which would result in the creation
of 17.6 million new residential customers.
The commercial market penetration rate is currently estimated to be 50-60%,
with a continued opportunity for growth driven by the same demand factors
affecting the residential market. In addition, a large segment of the existing
commercial customer base requires upgrading of older systems with newer
technology, and the
7
<PAGE>
integration of security enhancements such as access control and closed circuit
television equipment. The cost of these technologies has decreased
dramatically and now offers an economical and reliable alternative to security
guards and outdated methods of controlling and documenting activities within
the workplace.
In order to maximize these growth opportunities, successful industry
participants would ideally utilize sophisticated mass marketing techniques to
reach consumers, develop and leverage strong brand names, and fully achieve
the available economies of scale. This maximization is unlikely within the
current industry structure due to its high fragmentation of providers. There
are presently approximately 9,000-11,000 alarm companies in the U.S. Although
over 90% of such companies have less than $500,000 in annual revenue, these
same companies currently have a 75% share of the market. Only 13% of the U.S.
market is controlled by larger companies with ADT having the largest share at
7%, which is more than three times the size of Canada, the next largest
provider.
Western Resources believes that the security industry's characteristics of
rapid growth and provider fragmentation offers a unique opportunity for the
emergence of a dynamic, growth-oriented market leader. Western Resources
believes it is one of the first, and most successful, energy companies to
pursue the opportunities presented by the security business. Western
Resources' wholly owned security subsidiary, Westar Security, has grown
through acquisitions and internal growth. Westar Security currently monitors
110,000 customer accounts in eleven states, making it the tenth largest
monitoring security company, by customer count, in the nation. With the
addition of the customers of Westinghouse Security, Inc. ("Westinghouse
Security"), Westar Security will have over 400,000 accounts in 44 states,
making it the third largest security service provider in the country. See
"Recent Developments." Western Resources believes that a combination of ADT's
1,100,000 residential and 600,000 commercial customers in the U.S., Canada and
Europe with Western Resources' financial strength and energy businesses will
expand and strengthen ADT's current industry leadership in the security
business.
EXPANSION OF BRANDED ENERGY MARKETING
The electric and natural gas utility industry in the United States is
rapidly evolving from a historically regulated monopolistic market to a
dynamic and competitive integrated marketplace. The successful providers of
energy in a deregulated market will not only provide electric or natural gas
service but also a variety of other services, including security. Several
factors are primarily responsible for the current trend toward deregulation in
the energy industry. Three of the most significant factors are: customer
demand, technology and economics. Western Resources believes that customer
demand is a key element as more sophisticated consumers continue to demand new
and innovative options and insist on the development of more efficient
products and services to meet their energy needs. Western Resources believes
that its strong core utility business provides it with the platform to offer
the more efficient products and energy services that customers will desire.
Furthermore, Western Resources believes it is necessary to continuously seek
new ways to add value to its customers' lives and businesses. Recognizing that
its current customer base must expand beyond its existing service area,
Western Resources views every person, whether in the United States or abroad,
as a potential customer. Western Resources also recognizes that its potential
to emerge as a leading national energy and energy-related services provider is
enhanced by having a strong brand name. Western Resources has been
establishing its brand identity through the Westar Security name. The
combination of Western Resources and ADT would immediately provide an ideal
brand name to capitalize on the emerging security and energy marketplaces.
The U.S. electric industry had retail revenues of approximately $200
billion, serving approximately 117 million homes and businesses, and the U.S.
natural gas retail industry had revenues of approximately $100 billion,
serving approximately 58 million homes and businesses in 1995. In Western
Resources' view, the deregulation of the energy business will result in a
model similar to that used by the long-distance telecommunications industry,
with low-cost providers serving customers throughout the country. However,
unlike the long-distance telecommunications market which is dominated by large
companies with powerful brands, today's energy market is highly fragmented. In
1995, no utility company had a market share in the U.S. greater than 4%. It is
Western Resources' view that this market fragmentation presents a superior
opportunity for national industry leaders to emerge. Western Resources
believes that a combination with ADT will give it the brand name recognition
and complementary services to excel in the emerging deregulated electric and
natural gas markets.
8
<PAGE>
In Western Resources' view, there are several product and service streams
into any home or business, two being energy and security. The combination of
Western Resources and ADT will allow the combined company to integrate energy,
energy-related products and services, and security into a packaged group of
products and services to homes and businesses under the internationally
recognized ADT brand name. Western Resources believes that energy and security
are naturally compatible services with many similar operating requirements such
as installation, maintenance, billing and monitoring.
To date, ADT's management has not recognized the opportunities presented by
the deregulation of the energy industry. Western Resources believes that a
combination of the strong core utility business and customer service skills of
Western Resources and the brand name, customer base and support infrastructure
of ADT will provide both Western Resources and ADT shareholders with an
invaluable opportunity to succeed in the security and energy markets. As the
retail electric and natural gas markets become fully open to competition,
substantial opportunities exist to increase market share and to sell a menu of
integrated services which enhance the comfort and security of energy customers.
COST SAVINGS FROM OPERATIONAL SYNERGIES
Western Resources believes that the combination of Western Resources' and
ADT's businesses following consummation of the Offer and the Amalgamation would
lead to cost savings due to various operating synergies. Western Resources
estimates that operational savings would be achieved by adopting the best
practices of each of Western Resources and ADT, consolidating facilities and
redundant operations, and integrating various corporate and administrative
functions, including, but not limited to, finance, accounting, and purchasing.
9
<PAGE>
THE OFFER
Western Resources has filed exchange offer materials with the Commission. As
soon as Western Resources' registration statement is declared effective by the
Commission, Western Resources and Westar Capital intend to commence the Offer
in order to exchange the Offer Consideration for each outstanding Share, and
associated Right, upon the terms and subject to the conditions set forth in
the final Prospectus and in the related Letter of Transmittal.
The purpose of the Offer is to enable Western Resources to acquire control
of ADT. Western Resources presently intends, following consummation of the
Offer, to propose and to effect the Amalgamation. In the Amalgamation, each
then outstanding Share (other than Shares owned by Western Resources or any of
its affiliates, Shares held in the treasury of ADT (if ADT is so authorized)
or by any subsidiary of ADT and Shares owned by ADT Shareholders who perfect
appraisal rights under Bermuda law) would be cancelled in exchange for the
right to receive the Offer Consideration.
OFFER PREMIUM AND DIVIDEND IMPACT
Western Resources believes that the Offer is in the best interests of ADT
Shareholders because, among other things, the Offer Consideration represents a
substantial premium to the price per Share prior to (i) the public
announcement of Westar Capital's initial investment in ADT, and (ii) the
public announcement of the Offer. The following table shows the premium of the
Offer Consideration over the closing per Share price on the NYSE on the last
trading day immediately prior to such events.
<TABLE>
<CAPTION>
ADT PERCENT
OFFER PRICE* SHARE PRICE DIFFERENTIAL**
------------ ----------- --------------
<S> <C> <C> <C>
December 21, 1995, the last trading
day before the public announcement
of Westar Capital's initial
investment in ADT................. $22.50 $13.50 66.7%
December 17, 1996, the last trading
day before the public announcement
of the Offer...................... $22.50 $20.13 11.8%
</TABLE>
- --------
* Assumes the Offer Consideration is $7.50 net in cash and $15.00 of Western
Resources Common Stock per Share.
**Based on the closing prices of Western Resources Common Stock and Shares on
the indicated dates.
In addition to these substantial per Share price premiums, the Offer also
provides ADT Shareholders the opportunity to receive an ongoing cash return on
their ADT investment in the form of dividends on Western Resources Common
Stock. Western Resources has paid dividends every year since its formation in
1924 and dividends have been increased every year since 1958 (except for 1975,
in which the dividend remained unchanged). It has been Western Resources' past
practice to return a substantial portion of its earnings to shareholders in
the form of dividends, Western Resources does not anticipate any significant
change with respect to such dividend practice as a result of the Offer or the
Amalgamation. However, the declaration of future dividends will depend upon
future earnings, the financial condition of Western Resources and other
factors.
10
<PAGE>
THE EXCHANGE RATIO
The per Share price premium which ADT Shareholders will receive in the
Offer, and the dividend which ADT Shareholders will receive as holders of
Western Resources Common Stock, will depend on the Exchange Ratio at the time
of consummation of the Offer. Such Exchange Ratio will be determined based on
the Western Resources Average Price; provided, that the Exchange Ratio will
not be more than 0.50420 shares of Western Resources Common Stock per Share.
The amount of cash provided in the Offer will be $7.50 net per Share,
regardless of the level of the Exchange Ratio. Pursuant to the Offer, each
Share will be exchanged for $7.50 net in cash and $15.00 of Western Resources
Common Stock as long as the Western Resources Average Price is $29.75 or
higher. If the Western Resources Average Price is less than $29.75, then each
Share will be exchanged for $7.50 net in cash and less than $15.00 of Western
Resources Common Stock.
The following chart sets forth a range of possible Western Resources Average
Prices and the corresponding (i) Exchange Ratio, (ii) the dollar value of the
Stock Consideration to be received per Share, (iii) the dollar value of the
Cash Consideration to be received per Share, (iv) the total dollar value of
the Offer Consideration to be received per Share, (v) Share price premium over
the closing Share price on the last trading day prior to the public
announcement of the Offer, (vi) Share price premium over the closing Share
price on the last trading day prior to the public announcement of Westar
Capital's initial investment in ADT, and (vii) equivalent 1996 dividend per
Share. The Western Resources Average Prices set forth below are for
illustrative purposes only and are not intended to be an exhaustive list of
Western Resources Average Prices. There can be no assurance that the actual
Western Resources Average Price will be in the range set forth below.
<TABLE>
<CAPTION>
PREMIUM
PREMIUM TO ADT 1996
WESTERN TO ADT SHAREHOLDERS EQUIVALENT
RESOURCES VALUE OF VALUE OF SHAREHOLDERS (DECEMBER DIVIDEND
AVERAGE EXCHANGE STOCK VALUE OF CASH OFFER (DECEMBER 17, 1996 21, 1995 PER ADT
PRICE RATIO CONSIDERATION CONSIDERATION CONSIDERATION CLOSING PRICE) CLOSING PRICE) SHARE
--------- -------- ------------- ------------- ------------- ------------------ -------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$27.50 0.50420 $13.87 $7.50 $21.37 6.2% 58.3% $1.04
28.00 0.50420 14.12 7.50 21.62 7.4% 60.1% 1.04
28.50 0.50420 14.37 7.50 21.87 8.7% 62.0% 1.04
29.00 0.50420 14.62 7.50 22.12 9.9% 63.9% 1.04
Collar 29.50 0.50420 14.87 7.50 22.37 11.2% 65.7% 1.04
---------------------------------------------------------------------------------------------------------------
29.75 0.50420 15.00 7.50 22.50 11.8% 66.7% 1.04
30.00 0.50000 15.00 7.50 22.50 11.8% 66.7% 1.03
30.50 0.49180 15.00 7.50 22.50 11.8% 66.7% 1.01
31.00 0.48387 15.00 7.50 22.50 11.8% 66.7% 1.00
31.50 0.47619 15.00 7.50 22.50 11.8% 66.7% 0.98
32.00 0.46875 15.00 7.50 22.50 11.8% 66.7% 0.97
32.50 0.46154 15.00 7.50 22.50 11.8% 66.7% 0.95
33.00 0.45455 15.00 7.50 22.50 11.8% 66.7% 0.94
33.50 0.44776 15.00 7.50 22.50 11.8% 66.7% 0.92
34.00 0.44118 15.00 7.50 22.50 11.8% 66.7% 0.91
34.50 0.43478 15.00 7.50 22.50 11.8% 66.7% 0.90
35.00 0.42857 15.00 7.50 22.50 11.8% 66.7% 0.88
</TABLE>
CERTAIN CONDITIONS OF THE OFFER
Western Resources' obligation to exchange the Offer Consideration for Shares
pursuant to the Offer will be conditioned upon, among other things, the
satisfaction or, where applicable, waiver of the following conditions: (i)
there being validly tendered and not withdrawn prior to the Expiration Date a
number of Shares which, together with Shares owned by Western Resources and
its affiliates, will constitute at least a majority of the total number of
outstanding Shares on a fully diluted basis (as though all options or other
securities convertible into or exercisable or exchangeable for Shares had been
so converted, exercised or exchanged) as of the date the Shares are accepted
for exchange by Western Resources pursuant to the Offer (the "Minimum Tender
Condition"), (ii) approval of the issuance of shares of Western Resources
Common Stock in connection with the Offer and the Amalgamation and approval of
an amendment to the Amended and Restated Articles of Incorporation of Western
Resources to increase the number of shares of Western Resources Common Stock
authorized for issuance, by the holders on the applicable record date (voting
as a single class) of a majority of
11
<PAGE>
the shares of Western Resources Common Stock and Western Resources preferred
stock outstanding (the "Western Resources Shareholder Approval Condition"),
(iii) the approval by a majority of those Shares voting at the ADT Special
Meeting of the Western Resources Proposals (the "ADT Shareholder Approval
Condition"), (iv) the ADT Board having redeemed the Rights or amended the
Rights Agreement so that the Rights are inapplicable to the acquisition of
Shares pursuant to the Offer, or Western Resources being otherwise satisfied
in its sole discretion that the Rights are invalid or are not applicable to
the acquisition of Shares pursuant to the Offer (the "Rights Plan Condition"),
(v) Western Resources and Westar Capital being satisfied, in their sole
discretion, that the provisions of Bye-Law 104 and Bye-Law 46 of the ADT Bye-
Laws do not and will not apply to Western Resources, Westar Capital or the
acquisition of Shares pursuant to the Offer so as (A) to require Western
Resources or Westar Capital to comply with the provisions of Bye-Law 104 of
the ADT Bye-Laws or (B) to prevent Western Resources, Westar Capital or any of
their affiliates from voting Shares owned by any of them at any time (the "ADT
Bye-Law Condition"), (vi) the receipt by Westar Capital of a final judgment
from a court of competent jurisdiction declaring the Republic Warrant invalid
or the expiration of the Republic Warrant prior to the Expiration Date without
having been exercised (the "Republic Warrant Condition"), and (vii) all
regulatory approvals required to consummate the Offer having been obtained and
remaining in full force and effect, all statutory waiting periods in respect
thereof having expired and no such approval containing any conditions or
restrictions which the Western Resources Board of Directors (the "Western
Resources Board") determines will or could be expected to materially impair
the strategic and financial benefits expected to result from the Offer (the
"Regulatory Approval Condition"). For a complete discussion of the conditions
of the Offer, see "The Offer--Conditions of the Offer" in the Preliminary
Prospectus.
TIMING OF THE OFFER
The Offer is currently scheduled to expire on , 1997; however, it is
Western Resources' current intention to extend the Offer from time to time as
necessary until all conditions to the Offer have been satisfied or waived.
Western Resources expects that the Western Resources Shareholder Approval
Condition will be satisfied at a special meeting of Western Resources
shareholders to be held on February 11, 1997 (the "Western Resources Special
Meeting"). Western Resources currently anticipates that all of the other
conditions to the Offer will be satisfied by the time that each of the ADT
Shareholder Approval Condition and the Rights Plan Condition is satisfied.
THE RIGHTS AGREEMENT
The Rights Plan Condition may be satisfied in a number of ways, including
the following: (i) the current ADT Board may redeem the Rights or amend the
Rights Agreement so that the Rights would not be triggered by the Offer and
the Amalgamation, (ii) following the satisfaction of the ADT Shareholder
Approval Condition, the newly elected ADT Board may, subject to its fiduciary
obligations, take such actions as may be necessary with respect to the Rights
so that they would not be triggered by the Offer and the Amalgamation, or
(iii) Western Resources may be successful in its litigation seeking, among
other things, the invalidation of the Rights or an injunction requiring the
ADT Board to redeem the Rights. See "Prospectus Summary--Litigation" and
"Litigation."
Set forth below is certain additional information concerning the Rights.
On November 4, 1996, the ADT Board declared a dividend of one Series A First
Preference Share Purchase Right for each Share in issue at the close of
business on November 15, 1996 and the issuance of one Right with respect to
each Share issued after such date but prior to the Distribution Date (as
defined below).
The terms of the Rights are set forth in the Rights Agreement. The following
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement which is further described
and filed as an exhibit to the ADT Form 8-A.
After the Distribution Date, each Right entitles the holder thereof to
purchase from ADT one hundredth of a Series A First Preference Share at a
price of $90 (the "Purchase Price"), subject to adjustment for dilution. The
Rights are not exercisable and will not separate from the Shares until the
distribution date (the "Distribution Date") which occurs on the earlier to
occur of (i) the close of business on the tenth day (or such later date as
12
<PAGE>
may be designated by a majority of the Continuing Directors (as defined below))
following the date of the first public announcement that a person (other than
certain persons described below) has become the beneficial owner of 15% or more
of the Shares then issued and outstanding (an "Acquiring Person") (such date of
public announcement being a "Share Acquisition Date") or (ii) the close of
business on the tenth business day (or such later date as may be designated by
a majority of the Continuing Directors) following the commencement of a tender
or exchange offer which would result in the person making the tender or
exchange offer becoming an Acquiring Person. None of ADT, a subsidiary of ADT,
an employee benefit plan of ADT or of any of its subsidiaries or any person
organized, appointed or established by ADT or any of its subsidiaries for or
pursuant to such a plan may be considered an Acquiring Person. In addition, a
person (together with its affiliates and associates) (a "Grandfathered Person")
owning 15% or more of the issued and outstanding Shares (such person's share
percentage being a "Grandfathered Percentage") is not an Acquiring Person if
such person acquired its Shares prior to 5:00 p.m., Eastern time, on November
4, 1996, provided that such Grandfathered Person will become an Acquiring
Person if its Grandfathered Percentage increases. Under this formulation, each
of Western Resources and Westar Capital is a "Grandfathered Person."
A "Continuing Director" is defined under the Rights Agreement to be any
member of the ADT Board who, while such person is a member of the ADT Board, is
not an Acquiring Person (or an affiliate or associate thereof) or a
representative or nominee of an Acquiring Person or of any such affiliate or
associate and either (i) was a member of the ADT Board immediately prior to the
time any person becomes an Acquiring Person or (ii) subsequently becomes a
member of the ADT Board, if such person's nomination for election or election
to the ADT Board is recommended or approved by a majority of the Continuing
Directors.
After any person becomes an Acquiring Person, each Right (other than Rights
beneficially owned by an Acquiring Person and its affiliates and associates, or
transferees thereof) will entitle the holder thereof to purchase, for the
Purchase Price, Shares having a market value equal to twice the Purchase Price.
In the event that, after a Share Acquisition Date, (i) ADT consolidates,
amalgamates, or otherwise combines with any other person and ADT is either not
the continuing or surviving corporation or the Shares are changed or exchanged
or (ii) ADT or one of its subsidiaries sell, or otherwise transfer, assets or
earning power aggregating more than 50% of the assets or earning power of ADT
and its subsidiaries taken as a whole, each Right will entitle the holder
thereof to purchase, for the Purchase Price, a number of shares of common stock
of the other party to such business combination or sale having a market value
equal to twice the Purchase Price.
The Rights may be redeemed at a redemption price of $.01 per Right at any
time prior to the earlier of (i) the close of business on the tenth day
following the Share Acquisition Date (or such later date as a majority of the
Continuing Directors may designate prior to such time as the Rights are no
longer redeemable) and (ii) November 14, 2005. If the Rights are to be redeemed
on or after the Share Acquisition Date after there has been a change in the
majority of the directors on the ADT Board as a result of a proxy or consent
solicitation and a participant in such solicitation has stated that such person
intends to take, or may consider taking, any action which would result in such
person becoming an Acquiring Person or would result in the occurrence of any of
the events specified in the immediately preceding paragraph, a majority of the
Continuing Directors will be required to authorize such redemption.
The Rights Agreement may be amended in any respect prior to the Distribution
Date. After the Distribution Date, the Rights Agreement may be amended in
certain respects, if such amendments would not adversely affect the interest of
the holders of Rights (other than the Acquiring Person and any of its
affiliates or associates). After an Acquiring Person has become such, to be
effective, any amendment must be approved by a majority of the Continuing
Directors.
Unless previously redeemed in accordance with terms of its Agreement, the
Rights will expire on November 14, 2005.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group of persons that attempts to acquire
ADT in a manner which causes the Rights to become exercisable.
13
<PAGE>
ADT BYE-LAWS AND THE UNITED KINGDOM CITY CODE PROVISIONS
Following their election, the Western Resources Nominees do not currently
intend to serve notice pursuant to Bye-Law 104 or 46 of the ADT Bye-Laws
("Bye-Law 104" and "Bye-Law 46," respectively) upon Western Resources or any
affiliate of Western Resources that, following consummation of the Offer, owns
30% or more of the Shares. Thus, in the event the Western Resources Nominees
are elected at the ADT Special Meeting, Western Resources believes that Bye-
Law 104 and Bye-Law 46 of the ADT Bye-Laws should not apply to Western
Resources or its affiliates and that the ADT Bye-Law Condition should,
therefore, be satisfied.
ADT Bye-Law 104
Pursuant to Bye-Law 104(1)(A) of the ADT Bye-Laws, where any person is or
becomes interested in Shares, whether as a result of one transaction or a
series of transactions, in circumstances in which such person would be
obligated to make an offer to shareholders of ADT or to the holders of every
class of securities convertible into, or of rights to subscribe for, share
capital of ADT under the Rules of the City Code on Take-overs and Mergers of
the United Kingdom of Great Britain and Northern Ireland, as amended (the
"City Code"), the ADT Board may require such person to make an offer under the
City Code as if the City Code applied to ADT, provided that references in the
City Code to the "Panel" will be construed as if they were references to the
ADT Board. Rule 9 of the City Code, as it is applied by the ADT Bye-Laws,
provides that, except with the consent of the ADT Board, when any person (and
persons acting "in concert" with such person) acquires shares which carry 30%
or more of the voting rights of a company, such person must make an offer for
all shares of that class (whether voting or non-voting). The offer must be for
cash or offer a cash alternative, in each case at not less than the highest
price paid (in cash or otherwise) for shares of the same class by the offeror,
or anyone acting in concert with the offeror, during the offer period and
within the 12 months prior to commencement of the offer.
Pursuant to Bye-Law 104(3) of the ADT Bye-Laws, where any person is
interested, whether as a result of a series of transactions over a period of
time or not, in 30% or more of the outstanding Shares, the ADT Board may
demand that a cash offer for all of the outstanding voting or nonvoting
securities of ADT be made if the ADT Board determines that an offer pursuant
to Bye-Law 104(1)(A) of the ADT Bye-Laws is not expedient or if a person
required to make such an offer fails to do so. Pursuant to Bye-Law 104(4) of
the ADT Bye-Laws, if the ADT Board serves a notice under Bye-Law 104(3) of the
ADT Bye-Laws, the ADT Board may also require that the offeror offer to
purchase securities of ADT convertible into voting or non-voting shares of ADT
on terms considered "fair and reasonable" by the ADT Board in its sole
discretion. Such offer must be made within 30 days of the demand. Unless the
ADT Board otherwise agrees, an offer for each class of ADT capital stock under
Bye-Laws 104(3) and 104(4) of the ADT Bye-Laws must be for cash or must offer
a cash alternative at not less than the highest price paid by the offeror or
any person acting in concert with it for shares of such class within the
preceding 12 months. Such offer must remain open for at least 14 days after
the date on which it becomes unconditional as to acceptances and, in the case
of an offer under Bye-Law 104(3) of the ADT Bye-Laws, must provide that all
shares will be purchased within 21 days of the offer becoming unconditional in
all respects.
ADT Bye-Law 46
Subject to any rights or restrictions attached to any class of capital stock
of ADT, at any meeting of ADT, a shareholder present in person or by proxy is
entitled, on a poll, to one vote for each share held by such shareholder.
Pursuant to Bye-Law 46 of the ADT Bye-Laws, a ADT Shareholder is not entitled
(except as a proxy for another shareholder) to be present or to vote at any
meeting if such ADT Shareholder received a notice under Bye-Law 104 of the ADT
Bye-Laws stating that upon failure to make an offer pursuant to Bye-Law 104 of
the ADT Bye-Laws before a period of not less than 28 days from the date of
service of such notice the ADT Shareholder would not be entitled to vote and
the shareholder upon whom such notice was served (i) fails to make such an
offer within the period so specified, or (ii) having made such an offer or
acquired shares of ADT in contravention of a notice served under Bye-Law 104
of the ADT Bye-Laws, fails to remedy such noncompliance.
14
<PAGE>
If elected, the Western Resources Nominees intend to take all actions
necessary and desirable to facilitate consummation of the Offer and the
Amalgamation, including, among other things, not invoking the provisions of
Bye-Law 104 or Bye-Law 46 of the ADT Bye-Laws in connection with the
acquisition of Shares by Western Resources pursuant to the Offer or otherwise.
The foregoing does not purport to be a complete description of Bye-Law 104
or Bye-Law 46 of the ADT Bye-Laws. ADT Shareholders are urged to, and should,
read Bye-Law 104 and Bye-Law 46 of the ADT Bye-Laws, copies of which are
included herein as Schedules E and F, respectively.
If the Offer is consummated, Western Resources and its affiliates will own a
majority of the outstanding Shares. Accordingly, Western Resources and its
affiliates will at such time have sufficient voting power in ADT to approve
the Bye-Law Amendment and the Amalgamation Agreement independently of the vote
of any other ADT Shareholders. Western Resources presently intends to vote any
and all Shares then owned by Western Resources and its affiliates to approve
such proposals.
The Amalgamation will be subject to certain conditions, including the
consent of the Minister of Finance of Bermuda (the "Minister of Finance"). As
soon as practicable following the acceptance of Shares by Western Resources
pursuant to the Offer, the newly elected ADT Board presently intends to cause
all necessary actions to be taken to seek the consent of the Minister of
Finance to the Amalgamation. Western Resources has no reason to believe that
the Minister of Finance will not grant approval for the Amalgamation; however,
there can be no assurance that the Minister of Finance would grant his consent
for the Amalgamation. An adverse decision by the Minister of Finance may not
be subject to appeal or review in any court. Western Resources also presently
intends to condition the Amalgamation upon holders of not more than 5% of the
outstanding Shares at the effective time of the Amalgamation perfecting
appraisal rights with respect to the Amalgamation pursuant to Section 106(6)
of the Companies Act. See "Absence of Appraisal Rights."
15
<PAGE>
VOTING SECURITIES OF ADT AND PRINCIPAL HOLDERS THEREOF
Each Share is entitled to one vote upon each matter presented at the ADT
Special Meeting. ADT stated in its Quarterly Report on Form 10-Q for the
period ended September 30, 1996, that, as of November 4, 1996, there were
141,119,159 Shares outstanding, including 3,182,787 which are owned by a
subsidiary of ADT.
The following table and notes thereto, which, other than information
regarding Westar Capital, are reproduced from ADT's Proxy Statement for the
1996 Annual General Meeting of ADT shareholders, set forth certain information
with respect to beneficial ownership of Shares (i) as of December 31, 1995 by
any person known by ADT to own beneficially more than five percent of the
outstanding Shares, other than Westar Capital, and (ii) as of February 29,
1996 by (a) all directors and certain former directors of ADT, (b) the named
directors and officers of ADT, including one executive officer of a subsidiary
of ADT and (c) all directors and executive officers of ADT as a group. The
following table also sets forth certain information with respect to beneficial
ownership of Shares by Westar Capital as of December 17, 1996, the last
trading day prior to the date of this Preliminary Proxy Statement.
<TABLE>
<CAPTION>
SHARES
------------------------------
NUMBER OF
NAME OF BENEFICIAL OWNER SHARES BENEFICIALLY PERCENT OF
OR IDENTITY OF GROUP OWNED (1)(2) CLASS (3)
------------------------ ------------------- ----------
<S> <C> <C>
The Capital Group Companies, Inc. (4).......... 9,444,800 7.3%
333 South Hope Street
Los Angeles, California 90071
FMR Corp. (5).................................. 19,871,135 15.2%
82 Devonshire Street
Boston, Massachusetts 02109
Trimark Financial Corporation Inc. (6)......... 6,925,600 5.4%
One First Canadian Place
Suite 5600, P.O. Box 487
Toronto, Ontario M5X 1E5
Westar Capital, Inc. (7)....................... 38,287,111 27.1%
818 S. Kansas Avenue
Topeka, Kansas 66612
M.A. Ashcroft (8).............................. 4,292,383 3.2%
U.J. Brualdi, Jr. (9).......................... 617,344 *
J.E. Danneberg................................. 102 *
D.B. Hammond (10).............................. 153,250 *
A.B. Henderson................................. 621 *
J.S. Pasman, Jr................................ 2,000 *
M.J. Richardson................................ 252,835 *
S.J. Ruzika (11)............................... 674,072 *
W.P. Slusser................................... 2,500 *
W.W. Stinson................................... 10 *
R.S. Troubh.................................... 2,500 *
P.N.T. Widdrington............................. 10 *
All directors and executive officers as a
group, 12 persons ((7), (8), (9) and (10)).... 5,997,458 4.5%
</TABLE>
(1) Includes Shares which could be acquired upon exercise of the following
number of options to purchase Shares from ADT exercisable on or within 60
days of February 29, 1996 held by the following persons: M.A. Ashcroft,
3,741,665; U.J. Brualdi, Jr., 583,330; D.B. Hammond, 131,665; M.J.
Richardson, 239,998 and S.J. Ruzika, 670,330.
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(2) For purposes of this table, a person or group of persons is deemed to
have "beneficial ownership" of any Shares which such person has the right
to acquire on or within 60 days after February 29, 1996 (December 31,
1995 with respect to CGI, FMR and TFC (each as defined below)). For
purposes of computing the percentage of outstanding Shares held by each
person or group of persons named above, any security which such person or
persons has or have the right to acquire on or within 60 days after
February 29, 1996 (December 31, 1995 with respect to CGI, FMR and TFC) is
deemed to be outstanding, but is not deemed to be outstanding for the
purpose of computing the percentage ownership of any other person.
(3) Based upon Shares outstanding on February 29, 1996, but excluding
3,182,787 Shares owned by a subsidiary of ADT.
(4) ADT received an Amendment No. 4 to Schedule 13G, dated February 9, 1996,
filed with the Commission by Capital Research and Management Company and
The Capital Group Companies, Inc. ("CGI") in respect of ownership of
9,444,800 Shares at December 31, 1995 by accounts under the discretionary
investment management of subsidiaries of CGI which act as investment
managers or advisers. As of December 31, 1995, CGI exercised sole voting
power with respect to 1,783,500 Shares and exercised sole dispositive
power with respect to 9,444,800 Shares. As of the date of ADT's Proxy
Statement for the 1996 Annual Meeting of ADT shareholders, ADT had not
attempted to independently verify any of the information contained in
such Schedule 13G.
(5) ADT received an Amendment No. 2 to Schedule 13G, dated February 12, 1996,
filed with the Commission by FMR Corp. ("FMR") in respect of ownership of
19,871,135 Shares at December 31, 1995 by accounts under the
discretionary investment management of its wholly owned subsidiaries,
Fidelity Management Research Company and Fidelity Management Trust
Company. As of December 31, 1995, FMR exercised sole voting power with
respect to 158,609 Shares and sole dispositive power with respect to
19,871,135 Shares. As of the date of ADT's Proxy Statement for the 1996
Annual Meeting of ADT shareholders, ADT had not attempted to
independently verify any of the information contained in such Schedule
13G.
(6) ADT received a Schedule 13G, dated February 12, 1996, filed with the
Commission by Trimark Financial Corporation Inc. ("TFC") in respect of
ownership of 6,926,600 Shares at December 31, 1995 by accounts under the
discretionary investment management of subsidiaries of TFC which act as
investment managers or advisers. As of December 31, 1995, TFC exercised
sole voting power with respect to 6,925,600 Shares and exercised sole
dispositive power with respect to 6,925,600 Shares. As of the date of
ADT's Proxy Statement for the 1996 Annual Meeting of ADT shareholders,
ADT had not attempted to independently verify any of the information
contained in such Schedule 13G.
(7) Includes 500 Liquid Yield Option Notes ("LYONS") of ADT, each of which is
exchangeable for 28.23 Shares.
(8) The number of Shares beneficially owned by Mr. Ashcroft includes 718
Shares owned by Mr. Ashcroft's wife.
(9) The number of Shares includes 1,000 Shares owned by one of Mr. Brualdi's
children. Mr. Brualdi disclaims beneficial ownership of such Shares. The
number of Shares also includes 23,031 Shares held in a profit-sharing
plan which are voted by the trustee of such plan. Mr. Brualdi has the
power to direct the disposition of such Shares.
(10) The number of Shares includes 13,830 Shares owned by a company owned by
Mr. Hammond and his family. The number of Shares also includes 186 Shares
owned by one of Mr. Hammond's children.
(11) The number of Shares beneficially owned by Mr. Ruzika includes 2,500
Shares owned by Mr. Ruzika's wife.
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CERTAIN INFORMATION REGARDING WESTERN RESOURCES AND ADT
WESTERN RESOURCES
Western Resources and its divisions and wholly owned subsidiaries include
KPL, a rate-regulated electric and gas division of Western Resources ("KPL"),
Kansas Gas and Electric Company ("KGE"), a rate-regulated utility and wholly
owned subsidiary of Western Resources, Westar Capital, Inc., Westar Security,
Inc., Westar Energy, Inc., The Wing Group, Inc., non-utility subsidiaries, and
Mid-Continent Market Center, Inc., a regulated gas transmission service
provider ("MCMC"). KGE owns 47% of Wolf Creek Nuclear Operating Corporation
("WCNOC"), the operating company for the Wolf Creek Generating Station ("Wolf
Creek"). Western Resources' non-utility subsidiaries market natural gas
primarily to large commercial and industrial customers, provide electronic
security services, engage in international large power project development and
provide other energy-related products and services.
Western Resources is engaged principally in the production, purchase,
transmission, distribution and sale of electricity and the delivery and sale
of natural gas. Western Resources serves approximately 601,000 electrical
customers in eastern and central Kansas and approximately 648,000 natural gas
customers in Kansas and northeastern Oklahoma. On December 12, 1996, Western
Resources and ONEOK, Inc. ("ONEOK") announced a strategic alliance pursuant to
which Western Resources will contribute its regulated local natural gas
distribution operations, and MCMC and Westar Gas Marketing, Inc. ("Westar Gas
Marketing"), and will become the largest shareholder of ONEOK. See "Recent
Developments."
Westar Capital is a private investment company, wholly owned by Western
Resources, with investments in energy-related and technology-oriented
businesses. Westar Capital owns 38,287,111 Shares, or approximately 27% of the
outstanding Shares, including 14,115 Shares issuable upon exchange of 500
LYONS, which are exchangeable for Shares at a rate of 28.23 Shares per LYON.
Westar Security is a rapidly growing electronic security services business
with 110,000 customer accounts. Westar Security is currently the tenth largest
security company in the United States, by customer count, with operations in
eleven states. On December 16, 1996, Western Resources announced an agreement
pursuant to which Western Resources will acquire all of the assets of
Westinghouse Security a subsidiary of Westinghouse Electric Corporation
("Westinghouse"). Westinghouse Security is a national security system
monitoring company. See "Recent Developments."
Western Resources was incorporated under the laws of the State of Kansas in
1924. Western Resources' corporate headquarters is located at 818 S. Kansas
Avenue, Topeka, Kansas 66612 and its telephone number is (913) 575-6300.
Westar Capital's corporate headquarters is located at 818 S. Kansas Avenue,
Topeka, Kansas 66612 and its telephone number is (913) 575-6300.
ADT
The following information concerning ADT is derived from ADT's Annual Report
on Form 10-K for the period ended December 31, 1995:
ADT was incorporated in Bermuda on September 28, 1984 under the name Hawley
Group Limited and is an exempted company limited by shares with its registered
office at Cedar House, 41 Cedar Avenue, Hamilton HM12 Bermuda. The executive
office of the subsidiary which supervises ADT's North American activities is
located in the United States at One Boca Place, 2255 Glades Road, Suite 421A,
Boca Raton, Florida 33431, and its telephone number is (407) 997-8406.
ADT is currently engaged in two service businesses: electronic security
services in North America and Europe and vehicle auction and related services
in the United States. ADT is the largest provider of electronic security
services in North America and the largest provider in the United Kingdom,
providing continuous monitoring of commercial and residential security systems
for 1.6 million customers. ADT is also the second
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<PAGE>
largest provider of vehicle remarketing services in the United States,
operating a network of 28 vehicle auction centers.
ADT's principal activities in the electronic security services businesses
are the electronic monitoring of its installed base of security systems and
the installation of new, monitored security systems to add to its installed
base. Monitored systems may be sold or, as is most often the case, ADT may
retain ownership of installed systems. ADT receives contractual recurring fees
for monitoring security systems through its electronic monitoring centers and
for maintenance of security systems installed at customer premises and other
related services. ADT sells, installs and maintains monitored security
systems, integrated electronic security systems and other electronic security
products for additional fees. In 1995, approximately 60% of ADT's total
electronic security services revenues in North America and Europe were derived
from contractually recurring fees for electronic monitoring and maintenance of
security systems installed at customer premises and other related services.
The remainder of ADT's security revenues were derived from the outright sale
and installation of security systems, the installation of security systems in
accordance with a monitoring service agreement and the maintenance of security
systems on a non-contractual basis.
In September 1996, ADT acquired the entire equity interest in Automated
Security (Holdings) PLC, a United Kingdom company ("ASH"). ASH is engaged in
the provision of electronic security services in North America and Europe.
In a press release issued by ADT on November 6, 1996, ADT announced its
intention to sell its United States vehicle auction business. ADT's vehicle
auction business operates a network of large modern auction centers which
provide an organized wholesale marketplace for the sale and purchase of used
vehicles. Principal sellers, or consignors, include new and used vehicle
dealers, vehicle manufacturers, fleet operators, leasing companies, financial
institutions and government agencies. Principal purchasers include franchise
and non-franchise vehicle dealers and distributors who acquire vehicles to
sell in the retail market.
Western Resources and ADT are subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith file reports, proxy statements and other information with
the Commission. Reports, proxy statements and other information filed by
Western Resources and ADT with the Commission may be inspected and copied at
the public reference facilities maintained by the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at the
public reference facilities in the Commission's Regional Offices at Seven
World Trade Center, 13th Floor, New York, New York 10048 and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
information may be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The Western Resources Common Stock and the Shares are listed and traded
on the NYSE. The Shares are also listed and traded on the London Stock
Exchange, the Frankfurt Stock Exchange and the Bermuda Stock Exchange.
Reports, proxy statements and other information filed by Western Resources and
ADT with the Commission may be inspected at the offices of the NYSE, 20 Broad
Street, New York, New York 10005.
Pursuant to Rule 409 promulgated under the Securities Act of 1933, as
amended, and Rule 12b-21 promulgated under the Exchange Act, Western Resources
plans to request that ADT and its independent public accountants, Coopers &
Lybrand, L.L.P., provide to Western Resources the information required for
complete disclosure concerning the business, operations, financial condition
and management of ADT. Neither ADT nor Coopers & Lybrand, L.L.P. has yet
provided any information in response to such request. Western Resources will
provide any and all information which it receives from ADT or Coopers &
Lybrand, L.L.P. prior to the ADT Special Meeting and which Western Resources
deems material, reliable and appropriate in a subsequently prepared supplement
hereto.
BACKGROUND OF THE SOLICITATION
In the past, ADT has advised Western Resources that it is not interested in
discussing a business arrangement between ADT and Western Resources that could
maximize ADT's potential both in its existing security business and in the
emerging market of deregulated retail energy distribution. After careful study
19
<PAGE>
and consideration, Western Resources determined that potential benefits to
ADT, Western Resources and the companies' respective shareholders can be best
realized through a combination of Western Resources and ADT, and has,
therefore, decided to proceed with the Offer.
In December 1995, Western Resources entered into a stock purchase agreement
with Laidlaw Transportation, Inc. ("Laidlaw"), and Laidlaw, Inc., pursuant to
which Westar Capital subsequently purchased a total of 30,800,000 Shares, on
or prior to March 18, 1996, at an average price of $14.40 per Share. Since
March 18, 1996, from time to time Westar Capital has purchased Shares in the
open market at prevailing market prices. Westar Capital owns 38,287,111
Shares, or approximately 27% of the outstanding Shares, including 14,115
Shares issuable upon exchange of 500 LYONS, which are exchangeable for Shares
at a rate of 28.23 Shares per LYON.
On July 1, 1996, ADT entered into an Agreement and Plan of Amalgamation (the
"Republic Agreement") with Republic Industries, Inc. ("Republic") and Republic
Sub Ltd., a newly created wholly owned subsidiary of Republic ("Republic
Sub"). Pursuant to the terms of the Republic Agreement, Republic Sub was to be
amalgamated with and into ADT with the amalgamated company operating under the
name of ADT. Pursuant to the terms of the Republic Agreement, ADT granted to
Republic a warrant to subscribe for 15 million Shares at a purchase price of
$20 per share, subject to adjustment (the "Republic Warrant"). The Republic
Warrant was to become exercisable for a period of six months following the
termination of the Republic Agreement. On September 30, 1996, ADT and Republic
jointly announced the termination of the Republic Agreement citing uncertainty
attributable to market conditions, and amended the Republic Warrant to include
certain restrictions on the issuance of Shares pursuant thereto and the
transfer of such Shares by Republic to persons with interests in 10% or more
of ADT. As described below, Western Resources has commenced litigation
challenging the validity of the Republic Warrant. See "Litigation."
On November 4, 1996, ADT declared a distribution of one Right for each
outstanding Share, payable to holders of record as of the close of business on
November 15, 1996, pursuant to the Rights Agreement. The Rights Agreement
provides, among other things, that after certain persons acquire 15% or more
(or, in certain limited situations, a greater percentage) of the issued and
outstanding Shares, holders of Shares (other than such persons) will be
entitled to purchase Shares at half of the current market value and that if,
after such an acquisition, ADT is involved in an amalgamation, other business
combination or certain sale transactions, holders of Shares (other than such
persons) will be entitled to purchase either Shares, or common stock of the
other party to such transaction, at half of the current market value of such
securities. See "The Offer--Conditions of the Offer--Rights Agreement" and "--
ADT Rights" in the Preliminary Prospectus.
On November 6, 1996, ADT announced its intention to sell its United States
vehicle auction business.
On December 17, 1996, the Western Resources Board met and determined to
proceed with the Offer. On December 18, 1996, in the letter set forth below to
Mr. Michael A. Ashcroft, Chairman of the Board, President and Chief Executive
Officer of ADT, Mr. John E. Hayes, Jr., Chairman of the Board and Chief
Executive Officer of Western Resources, informed Mr. Ashcroft and the ADT
Board of Western Resources' intention to pursue the Offer and the Amalgamation
and encouraged Mr. Ashcroft and the ADT Board to meet with Western Resources
to discuss the possibility of a mutually beneficial negotiated transaction.
December 18, 1996
Mr. Michael A. Ashcroft
ADT Limited
Cedar House
41 Cedar Avenue
Hamilton HM12
Bermuda
Dear Michael:
We have demonstrated our belief in ADT's future by investing $589
million to purchase 27% of ADT's outstanding common shares, making us
ADT's largest shareowner. In the past you and your board
20
<PAGE>
have advised us that you are not interested in discussing a business
arrangement between our companies that could maximize ADT's potential,
both in its existing security business and in the emerging market of
deregulated retail energy distribution.
Now, after careful study and consideration, we have determined that the
potential benefits to ADT, Western Resources and ADT's other shareowners
from a combination of Western Resources and ADT are simply too compelling
to ignore. We firmly believe that this combination will provide
significant benefits to our respective shareowners, customers and
employees not available to either company on its own.
We believe ADT's full potential can only be realized in a strategic
business combination. In our proposed transaction, ADT shareowners will
become a part of one of the most innovative and dynamic companies in the
business of making people's lives safer and more comfortable. Our
subsidiary, Westar Security, is one of the fastest growing security
companies in the nation. Combined with ADT, the leading brand name in the
security industry, Western Resources will serve the energy and security
needs of customers across the country and around the world.
Western Resources, therefore, will file with the Securities and Exchange
Commission a preliminary prospectus for an offer by Western Resources to
ADT shareowners. Under our proposed offer, ADT shareowners (other than
Western Resources and its affiliates) will receive $7.50 net in cash and
$15.00 of Western Resources common stock in exchange for each ADT common
share, up to a maximum of 0.50420 shares of Western Resources common
stock. Based upon the closing price of ADT common shares on December 17,
1996, our proposal represents a 12% premium above ADT's market price.
In order to ensure ADT's other shareowners receive the chance to
consider our proposal for themselves, we will also demand a special
general meeting of ADT shareowners for the purposes of (i) removing the
present members of the ADT board, (ii) reducing the number of seats on the
ADT board from eight to two, and (iii) electing Western Resources'
nominees to the ADT board. We will also file preliminary proxy materials
relating to such special meeting. Once the Western Resources nominees are
elected to the ADT board, Western Resources intends to consummate the
exchange offer and a subsequent amalgamation pursuant to which Western
Resources will acquire 100% of ADT's equity.
We trust that you and the other members of ADT's board will consider the
best interests of ADT's shareowners, customers and employees and agree to
meet with us to achieve a mutually beneficial transaction, that ensures
that ADT executives and employees will enjoy exciting opportunities for
career growth with the combined company. We are, however, committed to
achieving the strategic benefits of a business combination of ADT and
Western Resources and prepared to take all necessary steps to ensure that
we and ADT's other shareowners have the opportunity to decide the future
of our investment in ADT.
I look forward to hearing from you soon.
Sincerely,
/s/ John
On December 18, 1996, Western Resources also publicly announced its
intention to commence the Offer and filed this Preliminary Proxy Statement
with the Commission for use in soliciting proxies from ADT Shareholders to
approve the Western Resources Proposals at the ADT Special Meeting. On
December 18, 1996, Westar Capital deposited the Requisition with ADT,
requiring the ADT Board to convene the ADT Special Meeting.
21
<PAGE>
LITIGATION
On December 18, 1996, Western Resources announced that Westar Capital had
commenced litigation in the United States District Court for the Southern
District of Florida charging ADT and the ADT Board with breaches of their
fiduciary duties to ADT and the ADT Shareholders. Specifically, the complaint
alleges, among other things, that the ADT Board breached its fiduciary duty to
ADT and the ADT Shareholders in connection with the grant of the Republic
Warrant and use of the ADT Rights Agreement. Republic is also joined in the
lawsuit.
The lawsuit seeks injunctive relief and unspecified damages.
WESTERN RESOURCES' OFFER FOR KCPL
Kansas City Power & Light Company, a Missouri corporation ("KCPL"), is a
public utility engaged in the generation, transmission, distribution and sale
of electricity to approximately 430,000 customers in western Missouri and
eastern Kansas.
On July 8, 1996, Western Resources commenced an offer (the "KCPL Offer") to
exchange shares of Western Resources Common Stock for each outstanding share
of common stock, without par value, of KCPL ("KCPL Common Stock"). The purpose
of the KCPL Offer is to obtain control of, and ultimately the entire equity
interest in, KCPL.
Western Resources intends, as soon as practicable after consummation of the
KCPL Offer, to seek to merge KCPL with and into itself (the "KCPL Merger").
Pursuant to the exchange ratio in the KCPL Offer, KCPL shareholders would
receive $31.00 of Western Resources Common Stock in exchange for each share of
KCPL Common Stock, subject to a maximum of 1.100 and a minimum of 0.933 shares
of Western Resources Common Stock for each share of KCPL Common Stock.
According to KCPL's Quarterly Report on Form 10-Q for the period ended
September 30, 1996, as of November 5, 1996, there were 61,904,744 shares of
KCPL Common Stock outstanding. Based on the number of shares of KCPL Common
Stock outstanding on November 5, 1996, if the KCPL Offer and KCPL Merger were
consummated, KCPL shareholders would receive approximately 61,409,506 shares
of Western Resources Common Stock, representing approximately 31.5% of the
total Western Resources Common Stock (assuming that the Offer and the
Amalgamation had previously been completed). Western Resources reserves the
right, in its sole discretion, at any time or from time to time to amend or
terminate the KCPL Offer in accordance with its terms.
On November 15, 1996, representatives of Western Resources' and KCPL's
respective boards and managements met and had a cordial discussion regarding
the proposed KCPL Merger. On November 25, 1996, representatives of Western
Resources' and KCPL's respective boards and managements met again and
continued their discussions.
As of December 13, 1996, the most recently scheduled expiration date for the
KCPL Offer, approximately 29.6 million shares of KCPL Common Stock, or 48% of
the outstanding shares of KCPL Common Stock, had been tendered to Western
Resources pursuant to the KCPL Offer. Western Resources believes that this
level of tenders demonstrates the support of KCPL shareholders for a merger of
Western Resources and KCPL. On December 13, 1996, Western Resources issued a
press release which stated that Western Resources and KCPL have agreed to
proceed with substantive merger negotiations between now and January 15, 1997,
the newly scheduled expiration date for the KCPL Offer. Although there can be
no assurance that any agreement will result from such negotiations, if a
definitive merger agreement is reached prior to January 15, 1997, it is
Western Resources' present intention to terminate the KCPL Offer at such time
and proceed with the KCPL Merger.
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<PAGE>
If an agreement with KCPL is not reached, Western Resources expects that it
will extend the KCPL Offer from time to time in its sole discretion until all
conditions thereto are satisfied, which Western Resources currently expects to
occur prior to the end of 1997. Western Resources' obligation to exchange
shares of Western Resources Common Stock for shares of KCPL Common Stock
pursuant to the KCPL Offer is subject to various terms and conditions set
forth in the KCPL Prospectus.
RECENT DEVELOPMENTS
On December 12, 1996, Western Resources and ONEOK announced that they had
entered into a strategic alliance in which Western Resources will contribute
its regulated local natural gas distribution operations and MCMC and Westar
Gas Marketing, and will become the largest shareholder of ONEOK. A division of
ONEOK, the Oklahoma Natural Gas Company, provides local natural gas service to
75 percent of the state of Oklahoma. ONEOK also has interests in natural gas
marketing, processing and production.
In the transaction, which is expected to close in mid-1997, Western
Resources will receive 2,996,702 shares of ONEOK common stock ("ONEOK Common
Stock") and 19,317,584 shares of a new series of convertible preferred stock
of ONEOK ("ONEOK Preferred Stock"), representing 45% of the total equity of
ONEOK. The ONEOK Preferred Stock will pay an annual dividend of up to 1.5
times the ONEOK Common Stock dividend, with a minimum dividend of $1.80 per
share. The transaction is expected to be accretive to Western Resources in the
first full year.
As a result of its alliance with Western Resources, ONEOK will become the
ninth largest gas distribution company in the United States, serving 1.4
million customers. The strategic alliance will also include a marketing
agreement under which Western Resources will provide electric energy products,
security products and other unregulated services to ONEOK's 735,000 customers.
The transaction requires the approval of ONEOK's shareholders, the Oklahoma
Corporation Commission (the "OCC"), the KCC and the Commission. Pursuant to
the HSR Act, the transaction may not be consummated unless certain information
has been furnished to the Antitrust Division and the FTC and certain waiting
period requirements have been satisfied. Western Resources shareholders will
not vote on the transaction.
On December 16, 1996, Western Resources agreed to purchase for approximately
$368 million, subject to certain adjustments, all of the assets used in,
related to or necessary for the operation of the security installation,
monitoring and service business currently operated by Westinghouse Security, a
subsidiary of Westinghouse Electric Corporation. Westinghouse Security serves
approximately 300,000 customer accounts. The asset purchase is expected to be
completed prior to the end of 1996.
VOTING AND PROXY PROCEDURES
GENERAL
Only persons entered in the register of members of ADT as holders of Shares
at the time of the ADT Special Meeting will be entitled to vote at such
meeting unless the ADT Board sets a record date for the ADT Special Meeting.
In the event the ADT Board sets a record date for the ADT Special Meeting,
only holders of Shares at the close of business on such record date will be
entitled to vote at the ADT Special Meeting. Each Share is entitled to one
vote upon each matter presented at the ADT Special Meeting. Holders of ADT
preferred stock, if any, are not entitled to vote on any of the Western
Resources Proposals. Pursuant to Bye-Law 43 of the ADT Bye-Laws, at any
general meeting of ADT not less than two holders of Shares present either in
person or by proxy constitutes a quorum for the transaction of business. Each
of the Western Resources Proposals may be approved by the affirmative vote of
a majority of those Shares voted at the ADT Special Meeting. ADT Shareholders
do not have cumulative voting for directors.
Pursuant to Bermuda law, only votes cast for a matter constitute affirmative
votes. Votes withheld or abstaining from voting are counted for quorum
purposes only.
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Any ADT Shareholder owning Shares held in the name of a brokerage firm, bank
or other institution should sign, date and return the GREEN proxy card to such
brokerage firm, bank or other institution in the envelope provided by that
firm. The accompanying GREEN proxy card will be voted in accordance with the
ADT Shareholder's instructions on such GREEN proxy card. In order to comply
with Bye-Law 48(1) of the ADT Bye-Laws, which requires that any person acting
as a proxy must be a shareholder of ADT, each of the representatives of
Western Resources named as a proxy on the accompanying proxy card will own at
least one Share at the time of the ADT Special Meeting.
OTHER PROPOSALS
EXCEPT FOR THE WESTERN RESOURCES PROPOSALS AS SET FORTH ABOVE, WESTERN
RESOURCES IS NOT AWARE OF ANY PROPOSALS TO BE BROUGHT BEFORE THE ADT SPECIAL
MEETING. SHOULD OTHER PROPOSALS BE BROUGHT BEFORE THE ADT SPECIAL MEETING, THE
PERSONS NAMED ON THE GREEN PROXY CARD WILL ABSTAIN FROM VOTING ON SUCH
PROPOSALS UNLESS SUCH PROPOSALS ADVERSELY AFFECT THE INTERESTS OF WESTERN
RESOURCES AS DETERMINED BY WESTERN RESOURCES IN ITS SOLE DISCRETION, IN WHICH
EVENT SUCH PERSONS WILL VOTE ON SUCH PROPOSALS AT THEIR DISCRETION.
REVOCATION OF PROXIES
An executed proxy may be revoked at any time prior to its exercise by
submitting another proxy with a later date, by voting in person at the ADT
Special Meeting or by sending a written, signed, dated revocation which
clearly identifies the proxy being revoked to the Chairman of the ADT Special
Meeting prior to the ADT Special Meeting or to the Secretary of ADT at the
registered office of ADT at Cedar House, 41 Cedar Avenue, Hamilton HM12,
Bermuda, so as to arrive before the ADT Special Meeting. A revocation may be
in any written form validly signed by the registered holder as long as it
clearly states that the proxy previously given is no longer effective.
PROXY SOLICITATION
Proxies for the ADT Special Meeting will be solicited by mail, telephone,
telegraph, telex, telecopier, facsimile and advertisement and in person.
Certain information about the directors and executive officers of Western
Resources and certain employees and other representatives of Western Resources
who may also assist [ ] in soliciting proxies is set forth in the attached
Schedule A. Schedule B sets forth certain information relating to Shares owned
by Western Resources and its affiliates and Western Resources' directors,
executive officers, employees and other representatives and certain
transactions between any of them and ADT.
The entire expense of the Proxy Solicitation is being borne by Western
Resources. Western Resources may seek reimbursement for such expenses from
ADT, but does not expect that the question of such reimbursement will be
submitted to a vote of ADT Shareholders. Costs related to the Proxy
Solicitation include expenditures for attorneys, accountants, financial
advisors, proxy solicitors, public relations advisors, printing, advertising,
postage, litigation and related expenses and filing fees and are expected to
aggregate approximately $ million. Election of the Western Resources
Nominees and consummation of the Offer may, among other things, (i) result in
acceleration of credit facilities currently available to ADT Operations, Inc.,
a subsidiary of ADT ("ADT Operations"), (ii) enable the holders of certain
debt instruments of ADT Operations to require the repurchase of their
securities, and (iii) accelerate the date on which certain options outstanding
under ADT's stock option plans become exercisable. Although Western Resources
and Westar Capital do not believe that these events would materially and
adversely impact the financial condition of ADT, the actual impact of such
events cannot be presently ascertained and will depend, among other things, on
interest rates and the future conditions in the credit markets.
Western Resources has retained [ ] to act as Information Agent in
connection with the Proxy Solicitation. The Information Agent may contact
holders of Shares by mail, telephone, telex, telegraph, facsimile
24
<PAGE>
and personal interviews and may request brokers, dealers and other nominee
shareholders to forward Proxy Solicitation materials to beneficial owners of
Shares. The Information Agent will be paid a customary fee of [$ ] for such
services, plus reimbursement of out-of-pocket expenses, and Western Resources
will indemnify the Information Agent against certain liabilities and expenses
in connection with the Proxy Solicitation, including liabilities under federal
securities laws.
Salomon Brothers Inc ("Salomon"), Bear, Stearns & Co. Inc. ("Bear Stearns")
and Chase Securities Inc. ("Chase") are acting as Dealer Managers (the "Dealer
Managers") in connection with the Offer.
Salomon is acting as financial advisor to Western Resources in connection
with its effort to acquire ADT, for which services, and for assistance
rendered by Salomon in connection with prior purchases of Shares by Westar
Capital, Western Resources has agreed to pay Salomon aggregate fees up to a
maximum of $5 million (a substantial portion of which is contingent upon the
consummation of an acquisition of 50% or more of the Shares of ADT or upon
consummation of the Amalgamation).
Bear Stearns is acting as financial advisor to Western Resources in
connection with is effort to acquire ADT, for which services, and for
assistance rendered by Bear Stearns in connection with prior purchases of
Shares by Westar Capital, Western Resources has agreed to pay Bear Stearns
aggregate fees up to a maximum of $4.3 million (a substantial portion of which
is contingent upon the consummation of an acquisition of 50% or more of the
Shares of ADT or upon consummation of the Amalgamation).
Chase is acting as financial advisor to Western Resources in connection with
its effort to acquire ADT, for which services Western Resources has agreed to
pay Chase aggregate fees up to a maximum of $1.5 million (a substantial
portion of which is contingent upon the consummation of an acquisition of 50%
or more of the Shares of ADT or upon consummation of the Amalgamation).
In addition to the compensation set forth above, Western Resources has
agreed to reimburse the Dealer Managers for their reasonable travel and other
out-of-pocket expenses. Western Resources has also agreed to reimburse each of
the Financial Advisors for necessary and reasonable attorney's fees incurred
in connection with their engagement, and has agreed to indemnify each of the
Dealer Managers and certain related persons and entities against certain
liabilities and expenses in connection with the Dealer Managers' engagement,
including certain liabilities under the federal securities laws. In connection
with each of Salomon's, Bear Stearns' and Chase's engagement as Dealer
Manager, Western Resources anticipates that certain employees of Salomon, Bear
Stearns and Chase may communicate in person, by telephone or otherwise with a
limited number of institutions, brokers or other persons who are ADT
Shareholders for the purpose of assisting in the Proxy Solicitation. Neither
Salomon, Bear Stearns nor Chase will receive any fee for or in connection with
such solicitation activities by its employees apart from the fees it is
otherwise entitled to receive as described above.
In addition to the fees to be received by each of Salomon, Bear Stearns and
Chase in connection with their engagement as Dealer Managers for the Offer,
Salomon, Bear Stearns and Chase have in the past rendered various investment
banking and financial advisory services for Western Resources for which they
have received customary compensation. In particular, pursuant to a letter
agreement dated September 5, 1995, as amended (the "Salomon KCPL Letter
Agreement"), Salomon is providing certain financial advisory services to
Western Resources in connection with the KCPL Offer. Under the terms of the
Salomon KCPL Letter Agreement, Western Resources has agreed to pay Salomon for
its financial advisory services (including services as Dealer Manager) in
connection with the KCPL Offer, a financial advisory fee of (i) $400,000 upon
execution of the
25
<PAGE>
Salomon KCPL Letter Agreement, (ii) $500,000 upon public announcement of the
KCPL Offer, and (iii) up to an additional $6,000,000 (less amounts paid or
payable described in (i) and (ii) above) upon Western Resources' acquisition
of more than 20% of the outstanding KCPL Shares or upon the consummation of
the KCPL Merger.
Western Resources will not pay any fees or commissions to any broker or
dealer or other person (other than the Information Agent and the Dealer
Managers) for soliciting proxies for the ADT Special Meeting. Brokers,
dealers, commercial banks and trust companies will be reimbursed by Western
Resources for customary mailing and handling expenses incurred by them in
forwarding material to their customers.
ABSENCE OF APPRAISAL RIGHTS
ADT Shareholders do not have appraisal rights with respect to the Offer.
However, pursuant to Section 106(6) of the Companies Act, a registered
holder of Shares who does not vote in favor of the Amalgamation, if it is
proposed and submitted to a vote of ADT Shareholders, and who is not satisfied
that he or she has been offered fair value for his or her Shares, may, within
one month of the giving of the notice of the general meeting of ADT
Shareholders, apply to the Supreme Court of Bermuda (the "Court") to have the
fair value of such Shares appraised by the Court.
Western Resources presently intends to condition the Amalgamation upon,
among other things, holders of not more than 5% of the outstanding Shares
having perfected appraisal rights with respect to the Amalgamation.
SHAREHOLDER PROPOSALS
Proposals of ADT Shareholders intended to be presented at the 1997 Annual
Meeting of ADT Shareholders must have been received at ADT's Corporate
Secretary's Office on or before November 13, 1996 for consideration for
inclusion in the proxy statement and form of proxy relating to such meeting.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
THIS PRELIMINARY PROXY STATEMENT INCORPORATES BY REFERENCE DOCUMENTS NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (NOT INCLUDING
EXHIBITS TO SUCH DOCUMENTS THAT ARE NOT SPECIFICALLY INCORPORATED BY REFERENCE
INTO SUCH DOCUMENTS) ARE AVAILABLE WITHOUT CHARGE UPON REQUEST TO CORPORATE
SECRETARY, WESTERN RESOURCES, INC., 818 S. KANSAS AVENUE, TOPEKA, KANSAS
66612. TELEPHONE REQUESTS MAY BE DIRECTED TO THE CORPORATE SECRETARY'S
DEPARTMENT AT (913) 575-1950. IN ORDER TO ENSURE TIMELY DELIVERY OF SUCH
DOCUMENTS, ANY REQUEST FOR DOCUMENTS SHOULD BE SUBMITTED NOT LATER THAN FIVE
BUSINESS DAYS PRIOR TO THE DATE OF THE ADT SPECIAL MEETING.
The following documents filed with the Commission by Western Resources (File
No. 1-3523) are incorporated herein by reference: (a) Western Resources'
Annual Report on Form 10-K for the year ended December 31, 1995 (the "Western
Resources 1995 Form 10-K"); (b) the portions of Western Resources' Proxy
Statement for the 1996 Annual Meeting of Shareholders, dated March 27, 1996,
that have been incorporated by reference in the Western Resources 1995 Form
10-K; (c) Western Resources' Quarterly Reports on Form 10-Q for the periods
ended March 31, 1996, June 30, 1996 and September 30, 1996; (d) Western
Resources' Registration Statement on Form S-4, dated December 18, 1996
(Registration No. 333- ) and Western Resources' Preliminary Prospectus,
dated December 18, 1996, included therein relating to the Offer; (e) Western
Resources' Registration Statement on Form S-4, dated July 3, 1996
(Registration No. 333-02711), and Western Resources' Prospectus, dated July 3,
1996, included therein relating to the KCPL Offer; (f) Western Resources'
Preliminary Proxy Statement on Schedule 14A, dated December 18, 1996, to
shareholders of Western Resources; (g) Western Resources' Current Reports on
Form 8-K, dated October 24, 1996 and December 18, 1996; and (h)
26
<PAGE>
soliciting materials of Western Resources filed pursuant to Rule 14a-12 and
Rule 14a-6 of the Exchange Act from December 18, 1996 through the date hereof.
The following documents filed with the Commission by ADT (File No. 0-16979)
are incorporated herein by reference: (a) ADT's Annual Report on Form 10-K for
the year ended December 31, 1995 (the "ADT 1995 Form 10-K"); (b) ADT's Proxy
Statement for the 1996 Annual Meeting of ADT Shareholders, dated March 12,
1996; (c) ADT's Quarterly Reports on Form 10-Q for the periods ended March 31,
1996, June 30, 1996 and September 30, 1996; (d) ADT's Current Reports on Form
8-K, dated October 1, 1996, October 23, 1996 and November 12, 1996; (e) ADT's
Registration Statement on Form 8-A, dated November 12, 1996; and (f)
soliciting materials of ADT filed pursuant to Rule 14a-12 and Rule 14a-6 of
the Exchange Act from December 18, 1996 through the date hereof.
The following documents filed with the Commission by KCPL (File No. 1-707)
are incorporated herein by reference: (a) KCPL's Annual Report on Form 10-K
for the year ended December 31, 1995 (the "KCPL 1995 Form 10-K"); and (b)
KCPL's Quarterly Reports on Form 10-Q for the periods ending March 31, 1996,
June 30, 1996 and September 30, 1996.
All documents filed by either Western Resources or ADT pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof
and prior to the date of the ADT Special Meeting shall be deemed to be
incorporated herein by reference and to be a part hereof from the date of such
filing. Any statement contained herein or in a document incorporated or deemed
to be incorporated herein by reference shall be deemed to be modified or
superseded for purposes hereof to the extent that a statement contained herein
or in any other subsequently filed document which also is, or is deemed to be,
incorporated herein by reference modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed to constitute a
part hereof, except as so modified or superseded.
ADT AND KCPL INFORMATION
While Western Resources has included information concerning ADT and KCPL
insofar as it is known or reasonably available to Western Resources, neither
ADT nor KCPL is affiliated with Western Resources and neither ADT nor KCPL has
to date permitted access by Western Resources to ADT's or KCPL's books and
records. Therefore, information concerning ADT and KCPL which has not been
made public is not available to Western Resources. Although Western Resources
has no knowledge that would indicate that statements relating to ADT or KCPL
contained or incorporated by reference in this Proxy Statement in reliance
upon publicly available information are inaccurate or incomplete, Western
Resources was not involved in the preparation of such information and
statements and, for the foregoing reasons, is not in a position to verify any
such information or statements.
WESTERN RESOURCES, INC.
December 18, 1996
[INFORMATION AGENT]
[ADDRESS]
[PHONE]
27
<PAGE>
ANNEX 1
RESOLUTIONS TO BE CONSIDERED AT THE ADT SPECIAL MEETING
1. RESOLVED, that subject to Resolutions 2 and 3 below being passed, all
of the present members of the Board of Directors of ADT Limited (the
"ADT Board") and any other person who may be a director of ADT
Limited at the time of the ADT Special Meeting, be and are hereby
removed from the office of director;
2. RESOLVED, FURTHER, that the number of seats on the ADT Board from and
after the date of this resolution shall be two (2); and
3. RESOLVED, FINALLY, that the directors of ADT Limited from and after
the date of this resolution until the next annual general meeting of
ADT Limited or until their successors have been duly elected shall be
Steven L. Kitchen and Steven A. Millstein or, if either is unable to
serve as a director of ADT Limited due to death, disability or
otherwise, any other person designated by Western Resources.
A-1
<PAGE>
SCHEDULE A
INFORMATION CONCERNING THE DIRECTORS, EXECUTIVE
OFFICERS AND CERTAIN REPRESENTATIVES OF WESTERN RESOURCES, INCLUDING THE
WESTERN RESOURCES NOMINEES, WHO MAY SOLICIT PROXIES
The following table sets forth the name, business address and the present
principal occupation or employment, and the name, principal business and
address of any corporation or other organization in which such employment is
carried on, of the directors and executive officers of Western Resources, the
Western Resources Nominees and other representatives of Western Resources who
may solicit proxies from ADT Shareholders.
DIRECTORS AND EXECUTIVE OFFICERS OF WESTERN RESOURCES AND WESTERN RESOURCES
NOMINEES
<TABLE>
<CAPTION>
PRESENT POSITION WITH WESTERN RESOURCES
NAME AND BUSINESS ADDRESS OR OTHER PRINCIPAL OCCUPATION OR EMPLOYMENT
------------------------- -------------------------------------------
<C> <S>
John E. Hayes, Jr. ................. Director, Chairman of the Board and Chief Executive
Western Resources, Inc. Officer, Western Resources.
818 S. Kansas Avenue
Topeka, KS 66612
David C. Wittig..................... Director and President, Western Resources.
Western Resources, Inc.
818 S. Kansas Avenue
Topeka, KS 66612
Norm Jackson........................ Executive Vice President, Western Resources.
Western Resources, Inc.
818 S. Kansas Avenue
Topeka, KS 66612
Steven L. Kitchen................... Executive Vice President and Chief Financial
Western Resources, Inc. Officer, Western Resources.
818 S. Kansas Avenue
Topeka, KS 66612
Carl M. Koupal, Jr. ................ Executive Vice President and Chief Administrative
Western Resources, Inc. Officer, Western Resources.
818 S. Kansas Avenue
Topeka, KS 66612
Steven A. Millstein................. President, Westar Security, Inc.
Westar Security, Inc.
818 S. Kansas Avenue
Topeka, KS 66612
John K. Rosenberg................... Executive Vice President and General Counsel,
Western Resources, Inc. Western Resources.
818 S. Kansas Avenue
Topeka, KS 66612
Jerry D. Courington................. Controller, Western Resources.
Western Resources, Inc.
818 S. Kansas Avenue
Topeka, KS 66612
</TABLE>
A-1
<PAGE>
OTHER REPRESENTATIVES OF WESTERN RESOURCES WHO MAY SOLICIT PROXIES
<TABLE>
<CAPTION>
NAME AND BUSINESS ADDRESS
(UNLESS OTHERWISE INDICATED, THE BUSINESS
ADDRESS IS WESTERN PRESENT POSITION WITH WESTERN
RESOURCES, INC., 818 S. KANSAS AVENUE, RESOURCES OR OTHER
TOPEKA, KS 66612) PRINCIPAL OCCUPATION OR EMPLOYMENT
- ----------------------------------------- ----------------------------------
<S> <C>
Bruce A. Akin..................... Director, Corporate Development
Bruce R. Burns.................... Manager, Shareholder Services.
Lori A. Finney.................... Executive Director, Corporate Strategy.
James A. Martin................... Vice President, Finance.
Michel' J. Philipp................ Director, Corporate Communications.
Carolyn A. Starkey................ Financial Analyst.
Richard D. Terrill................ Corporate Secretary.
Craig A. Weingartner.............. Corporate Development, Associate.
<CAPTION>
Salomon Brothers Inc
<S> <C>
Gregg S. Polle.................... Managing Director, Salomon Brothers Inc
Salomon Brothers Inc
7 World Trade Center
New York, NY 10048
Arthur H. Tildesley, Jr........... Director, Salomon Brothers Inc
Salomon Brothers Inc
7 World Trade Center
New York, NY 10048
William A. Murphy................. Vice President, Salomon Brothers Inc
Salomon Brothers Inc
7 World Trade Center
New York, NY 10048
Chad Rucker....................... Associate, Salomon Brothers Inc
Salomon Brothers Inc
7 World Trade Center
New York, NY 10048
<CAPTION>
Bear, Stearns & Co. Inc.
<S> <C>
Douglas T. Lake................... Senior Managing Director, Bear, Stearns &
Co. Inc.
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Richard M. Osler.................. Managing Director, Bear, Stearns & Co. Inc.
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
David F. Huff..................... Vice President, Bear, Stearns & Co. Inc.
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
</TABLE>
A-2
<PAGE>
<TABLE>
<CAPTION>
NAME AND BUSINESS ADDRESS
(UNLESS OTHERWISE INDICATED, THE BUSINESS
ADDRESS IS WESTERN PRESENT POSITION WITH WESTERN
RESOURCES, INC., 818 S. KANSAS AVENUE, RESOURCES OR OTHER
TOPEKA, KS 66612) PRINCIPAL OCCUPATION OR EMPLOYMENT
- ----------------------------------------- ----------------------------------
Chase Securities Inc.
<S> <C>
Mark Davis........................... Managing Director, Chase Securities Inc.
Chase Securities Inc.
270 Park Avenue
New York, New York 10017
John Bass............................ Vice President, Chase Securities Inc.
Chase Securities Inc.
270 Park Avenue
New York, New York 10017
Craig Decker......................... Associate, Chase Securities, Inc.
Chase Securities Inc.
270 Park Avenue
New York, New York 10017
Andrew Quigley....................... Associate, Chase Securities Inc.
Chase Securities Inc.
270 Park Avenue
New York, New York 10017
</TABLE>
A-3
<PAGE>
SCHEDULE B
SHARES HELD BY WESTAR CAPITAL
Westar Capital is the beneficial and record holder of Shares purchased (i)
from Laidlaw on or prior to March 18, 1996, as described in this Preliminary
Proxy Statement and (ii) as purchased in open market transactions in the
amount and on the dates set forth below:
- --------
* Issuable upon exchange of 500 LYONS of ADT beneficially owned by Westar
Capital.
<TABLE>
<CAPTION>
NUMBER OF
SHARES
DATE OF TRANSACTION PURCHASED
------------------- ----------
<S> <C>
1/26/96.............................................................. 15,400,000
3/18/96.............................................................. 15,400,000
7/15/96.............................................................. 100,000
7/15/96.............................................................. 50,000
7/15/96.............................................................. 60,000
7/15/96.............................................................. 161,800
7/15/96.............................................................. 116,700
7/15/96.............................................................. 41,500
7/15/96.............................................................. 26,000
7/16/96.............................................................. 20,000
7/16/96.............................................................. 20,000
7/16/96.............................................................. 21,000
7/16/96.............................................................. 28,500
7/16/96.............................................................. 80,000
7/16/96.............................................................. 25,000
7/16/96.............................................................. 59,000
7/16/96.............................................................. 10,000
7/16/96.............................................................. 65,000
7/16/96.............................................................. 44,000
7/16/96.............................................................. 22,500
7/16/96.............................................................. 25,000
7/16/96.............................................................. 30,000
7/16/96.............................................................. 20,000
7/16/96.............................................................. 25,000
7/16/96.............................................................. 20,000
7/16/96.............................................................. 10,000
7/16/96.............................................................. 100,000
7/17/96.............................................................. 10,000
7/17/96.............................................................. 49,000
7/17/96.............................................................. 25,000
7/17/96.............................................................. 10,000
7/17/96.............................................................. 25,000
8/22/96.............................................................. 40,000
8/22/96.............................................................. 80,000
8/22/96.............................................................. 95,000
8/22/96.............................................................. 135,000
9/5/96............................................................... 29,600
9/5/96............................................................... 165,000
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES
DATE OF TRANSACTION PURCHASED
------------------- ---------
<S> <C>
9/5/96............................................................... 16,696
9/6/96............................................................... 10,000
9/30/96.............................................................. 128,500
9/30/96.............................................................. 152,000
9/30/96.............................................................. 170,000
9/30/96.............................................................. 749,500
9/30/96.............................................................. 2,000
9/30/96.............................................................. 98,000
10/8/96.............................................................. 14,115*
10/16/96............................................................. 160,000
10/16/96............................................................. 50,000
10/17/96............................................................. 2,900
10/18/96............................................................. 50,000
10/18/96............................................................. 50,000
10/18/96............................................................. 2,500
10/21/96............................................................. 247,700
10/21/96............................................................. 58,300
10/22/96............................................................. 50,000
10/22/96............................................................. 120,000
10/23/96............................................................. 155,000
10/23/96............................................................. 116,700
10/23/96............................................................. 18,400
10/24/96............................................................. 25,000
10/24/96............................................................. 25,000
10/24/96............................................................. 44,700
10/25/96............................................................. 15,000
10/25/96............................................................. 125,000
10/28/96............................................................. 66,700
10/28/96............................................................. 75,500
10/28/96............................................................. 202,800
10/28/96............................................................. 27,500
10/28/96............................................................. 204,700
10/28/96............................................................. 15,000
10/28/96............................................................. 129,000
10/28/96............................................................. 2,034,800
10/28/96............................................................. 20,000
10/29/96............................................................. 144,500
10/29/96............................................................. 65,000
</TABLE>
B-1
<PAGE>
SHARES HELD BY DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN REPRESENTATIVES OF
WESTERN RESOURCES, INCLUDING THE WESTERN RESOURCES NOMINEES, AND CERTAIN
TRANSACTIONS BETWEEN ANY OF THEM AND ADT
John K. Rosenberg, Richard D. Terrill and Neil T. Anderson have agreed to
serve as the proxies on Western Resources' GREEN proxy card for the ADT
Special Meeting. In order to comply with Bye-Law 48(1) of the ADT Bye-Laws,
which requires that any person acting as a proxy must be a shareholder of ADT,
each of the representatives of Western Resources named as a proxy on the
accompanying proxy card will own at least one Share at the time of the ADT
Special Meeting.
Except as disclosed in this Schedule or in the Preliminary Proxy Statement,
none of Western Resources, or any of its directors, executive officers or the
employees named in Schedule A, including the Western Resources Nominees, owns
any securities of ADT or any subsidiary of ADT, beneficially or of record, or
has purchased or sold any of such securities within the past two years. Except
as disclosed in this Schedule or in the Preliminary Proxy Statement, to the
best knowledge of Western Resources, none of its directors, executive officers
or the employees of Western Resources named in Schedule A, including the
Western Resources Nominees, or their associates, beneficially owns, directly
or indirectly, any securities of ADT.
Other than as disclosed in this Schedule and in the Preliminary Proxy
Statement, to the knowledge of Western Resources, none of Western Resources,
or any of its directors, executive officers or the employees of Western
Resources named in Schedule A, including the Western Resources Nominees, has
any substantial interest, direct or indirect, by security holdings or
otherwise, in any matter to be acted upon at the ADT Special Meeting.
Other than as disclosed in this Schedule and in the Preliminary Proxy
Statement, to the knowledge of Western Resources, none of Western Resources,
or any of its directors, executive officers or the employees of Western
Resources named in Schedule A, including the Western Resources Nominees, is,
or has been within the past year, a party to any contract, arrangement or
understanding with any person with respect to any securities of ADT,
including, but not limited to, joint ventures, loan or option arrangements,
puts or calls, guarantees against loss or guarantees of profit, division of
losses or profits, or the giving or withholding of proxies.
Other than as set forth in this Schedule or in the Preliminary Proxy
Statement, to the knowledge of Western Resources, none of Western Resources,
or any of its directors, executive officers or the employees of Western
Resources named in Schedule A, including the Western Resources Nominees, or
any of their associates, has had or will have a direct or indirect material
interest in any transaction or series of similar transactions since the
beginning of ADT's last fiscal year or any currently proposed transactions, or
series of similar transactions, to which ADT or any of its subsidiaries was or
is to be a party in which the amount involved exceeds $60,000.
Other than as set forth in this Schedule and in the Preliminary Proxy
Statement, to the knowledge of Western Resources, none of Western Resources,
or any of its directors, executive officers or the employees of Western
Resources named in Schedule A, including the Western Resources Nominees, or
any of their associates, has any arrangements or understandings with any
person with respect to any future employment by ADT or its affiliates or with
respect to any future transactions to which ADT or any of its affiliates will
or may be a party.
B-2
<PAGE>
SCHEDULE C
INFORMATION CONCERNING SALOMON, BEAR STEARNS AND CHASE
INFORMATION CONCERNING SALOMON
Western Resources has retained Salomon to act as its financial advisor in
connection with the transactions described in the Preliminary Proxy Statement.
Salomon from time to time also executes routine brokerage transactions for the
account of Western Resources' Profit Sharing and Retirement Trust.
Salomon is an internationally recognized investment banking firm that
provides financial services in connection with a wide range of business
transactions. Salomon does not admit that it or any of its directors, officers
or employees is a "participant," as defined in Schedule 14A promulgated under
the Exchange Act by the Commission ("Schedule 14A"), in the solicitation to
which the Preliminary Proxy Statement relates or that such Schedule 14A
requires the disclosure in the Preliminary Proxy Statement or this Schedule of
certain information concerning Salomon.
The following employees (the "Salomon Individuals") of Salomon may engage in
solicitation activities in connection with the solicitation to which the
Preliminary Proxy Statement relates (and to the extent that any such Salomon
Individual does, in fact, engage in such solicitation activities, any such
Salomon Individual would thereby become a "participant," as defined in
Schedule 14A):
<TABLE>
<CAPTION>
NAME POSITION
---- --------
<S> <C>
Gregg S. Polle.......................... Managing Director, Salomon Brothers Inc
Arthur H. Tildesley, Jr................. Director, Salomon Brothers Inc
William A. Murphy....................... Vice President, Salomon Brothers Inc
Chad Rucker............................. Associate, Salomon Brothers Inc
</TABLE>
Each of the Salomon Individuals is engaged in the investment banking business
at Salomon Brothers Inc at Seven World Trade Center, New York, New York 10048,
and is employed by Salomon in the capacity listed beside his or her name.
As of December 13, 1996, Salomon beneficially held a net "short" position of
10,800 Shares, and beneficially owned LYONS of an affiliate of ADT
exchangeable for 14,595 Shares. As of December 13, 1996, Salomon did not own
of record any Shares for customer accounts. In the normal course of its
business, Salomon regularly buys and sells securities, including Shares, for
its own account and for the accounts of its customers, which transactions may
result from time to time in Salomon having a net "long" or net "short"
position in ADT's securities or option contracts in ADT's securities. A list
of all securities of ADT bought and sold by Salomon for its own account over
the last two years is set forth on Schedule D. It is impracticable, however,
owing to the volume of such transactions, to list each transaction for the
accounts of customers involving ADT's securities for the past two years for
the purpose of the Preliminary Proxy Statement.
None of the Salomon Individuals or their associates owned of record or
beneficially any of ADT's securities as of December 17, 1996. None of the
Salomon Individuals or their associates purchased or sold for their own
account securities of any class of ADT within the past two years.
None of the Salomon Individuals or their associates own of record any
securities of ADT which are not also beneficially owned by them nor do they or
their associates beneficially own, directly or indirectly, any securities of
any parent or subsidiary of ADT.
C-1
<PAGE>
In the normal course of its business, Salomon finances the securities
positions of Salomon by bank and other borrowings and repurchase and
securities borrowing transactions. None of such borrowings were intended
specifically for the purpose of purchasing securities of ADT.
Except as set forth below or as disclosed elsewhere in this Schedule or the
Preliminary Proxy Statement, and except for customary arrangements with
respect to securities of ADT held by Salomon for the accounts of its
customers, none of the Salomon Individuals, Salomon or any associate of such
persons is or has been, within the past year, a party to any contract,
arrangement or understanding with any person with respect to any securities of
ADT, including, but not limited to, joint ventures, loan or option
arrangements, puts or calls, guarantees against loss or guarantees of profit,
division of losses or profits, or the giving or withholding of proxies. Except
as set forth below or as disclosed elsewhere in this Schedule or the
Preliminary Proxy Statement, none of the Salomon Individuals, Salomon or any
associate of such persons has any arrangement or understanding with any person
with respect to any future employment by ADT or its affiliates or any future
transactions to which ADT or any of its affiliates will or may be a party, nor
any material interest, direct or indirect, in any transaction which has
occurred since December 17, 1994 or any currently proposed transaction, or
series of similar transactions, to which ADT or any of its affiliates was or
is to be a party and in which the amount involved exceeds $60,000.
INFORMATION CONCERNING BEAR STEARNS
Western Resources has retained Bear Stearns to act as its financial advisor
in connection with the transactions described in the Preliminary Proxy
Statement. Bear Stearns from time to time also executes routine brokerage
transactions for the account of Western Resources' Profit Sharing and
Retirement Trust.
Bear Stearns is an internationally recognized investment banking firm that
provides financial services in connection with a wide range of business
transactions. Bear Stearns does not admit that it or any of its directors,
officers or employees is a "participant," as defined in Schedule 14A in the
solicitation to which the Preliminary Proxy Statement relates or that such
Schedule 14A requires the disclosure in the Preliminary Proxy Statement or
this Schedule of certain information concerning Bear Stearns.
The following employees (the "Bear Stearns Individuals") of Bear Stearns may
engage in solicitation activities in connection with the solicitation to which
the Preliminary Proxy Statement relates (and to the extent that any such Bear
Stearns Individual does, in fact, engage in such solicitation activities, any
such Bear Stearns Individual would thereby become a "participant," as defined
in Schedule 14A):
<TABLE>
<CAPTION>
NAME POSITION
---- --------
<C> <S>
Senior Managing Director, Bear,
Douglas T. Lake........................ Stearns & Co. Inc.
Managing Director, Bear, Stearns &
Richard M. Osler....................... Co. Inc.
Vice President, Bear, Stearns & Co.
David F. Huff.......................... Inc.
</TABLE>
Each of the Bear Stearns Individuals is engaged in the investment banking
business at Bear Stearns at 245 Park Avenue, New York, New York 10167, and is
employed by Bear Stearns in the capacity listed beside his name.
As of December 17, 1996, Bear Stearns did not beneficially own any Shares
and did not own of record any Shares for customer accounts. In the normal
course of its business, Bear Stearns regularly buys and sells securities,
including Shares, for its own account and for the accounts of its customers,
which transactions may result from time to time in Bear Stearns having a net
"long" or net "short" position in ADT's securities or option contracts in
ADT's securities. A list of all securities of ADT bought and sold by Bear
Stearns for its own account over the last two years is set forth on Schedule
D. It is impracticable, however, owing to the volume of such transactions, to
list each transaction for the accounts of customers involving ADT's securities
for the past two years for the purpose of the Preliminary Proxy Statement.
C-2
<PAGE>
None of the Bear Stearns Individuals or their associates owned of record or
beneficially any of ADT's securities as of December 17, 1996. None of the Bear
Stearns Individuals or their associates purchased or sold for their own
account securities of any class of ADT within the past two years.
None of the Bear Stearns Individuals or their associates own of record any
securities of ADT which are not also beneficially owned by them nor do they
beneficially own, directly or indirectly, any securities of any parent or
subsidiary of ADT.
In the normal course of its business, Bear Stearns finances the securities
positions of Bear Stearns by bank and other borrowings and repurchase and
securities borrowing transactions. None of such borrowings were intended
specifically for the purpose of purchasing securities of ADT.
Except as set forth below or as disclosed elsewhere in this Schedule or the
Preliminary Proxy Statement, and except for customary arrangements with
respect to securities of ADT held by Bear Stearns for the accounts of its
customers, none of the Bear Stearns Individuals, Bear Stearns or any associate
of such persons is or has been, within the past year, a party to any contract,
arrangement or understanding with any person with respect to any securities of
ADT, including, but not limited to, joint ventures, loan or option
arrangements, puts or calls, guarantees against loss or guarantees of profit,
division of losses or profits, or the giving or withholding of proxies.
Except as set forth below or as disclosed elsewhere in this Schedule or the
Preliminary Proxy Statement, none of the Bear Stearns Individuals, Bear
Stearns or any associate of such persons has any arrangement or understanding
with any person with respect to any future employment by ADT or its affiliates
or any future transactions to which ADT or any of its affiliates will or may
be a party, nor any material interest, direct or indirect, in any transaction
which has occurred since December 17, 1994 or any currently proposed
transaction, or series of similar transactions, to which ADT or any of its
affiliates was or is to be a party and in which the amount involved exceeds
$60,000.
INFORMATION CONCERNING CHASE
Western Resources has retained Chase to act as its financial advisor in
connection with the transactions described in the Preliminary Proxy Statement.
Chase may from time to time also execute routine brokerage transactions for
the account of Western Resources' Profit Sharing and Retirement Trust.
Chase is an internationally recognized investment banking firm that provides
financial services in connection with a wide range of business transactions.
Chase does not admit that it or any of its directors, officers or employees is
a "participant," as defined in Schedule 14A, in the solicitation to which the
Preliminary Proxy Statement relates or that such Schedule 14A requires the
disclosure in the Preliminary Proxy Statement or this Schedule of certain
information concerning Chase.
The following employees (the "Chase Individuals") of Chase may engage in
solicitation activities in connection with the solicitation to which the
Preliminary Proxy Statement relates (and to the extent that any such Chase
Individual does, in fact, engage in such solicitation activities, any such
Chase Individual would thereby become a "participant," as defined in Schedule
14A):
<TABLE>
<CAPTION>
NAME POSITION
---- --------
<S> <C>
Mark Davis............................. Managing Director, Chase Securities Inc.
John Bass.............................. Vice President, Chase Securities Inc.
Craig Decker........................... Associate, Chase Securities Inc.
Andrew Quigley......................... Associate, Chase Securities Inc.
</TABLE>
Each of the Chase Individuals is engaged in the investment banking business at
Chase Securities Inc., 270 Park Avenue, New York, New York 10017, and is
employed by Chase in the capacity listed beside his name.
C-3
<PAGE>
As of December 17, 1996, Chase did not beneficially own any Shares and did
not own of record any Shares for customer accounts. In the normal course of
its business, Chase regularly buys and sells securities, including Shares, for
its own account and for the accounts of its customers, which transactions may
result from time to time in Chase having a net "long" or net "short" position
in ADT's securities or option contracts in ADT's securities. A list of all
securities of ADT bought and sold by Chase for its own account over the last
two years is set forth on Schedule D. It is impracticable, however, owing to
the volume of such transactions, to list each transaction for the accounts of
customers involving ADT's securities for the past two years for the purpose of
the Preliminary Proxy Statement.
None of the Chase Individuals or their associates owned of record or
beneficially any of ADT's securities as of December 17, 1996. None of the
Chase Individuals or their associates purchased or sold for their own account
securities of any class of ADT within the past two years.
None of the Chase Individuals or their associates own of record any
securities of ADT which are not also beneficially owned by them nor do they or
their associates beneficially own, directly or indirectly, any securities of
any parent or subsidiary of ADT.
In the normal course of its business, Chase finances the securities
positions of Chase by bank and other borrowings and repurchase and securities
borrowing transactions. None of such borrowings were intended specifically for
the purpose of purchasing securities of ADT.
Except as set forth below or as disclosed elsewhere in this Schedule or the
Preliminary Proxy Statement, and except for customary arrangements with
respect to securities of ADT held by Chase for the accounts of its customers,
none of the Chase Individuals, Chase or any associate of such persons is or
has been, within the past year, a party to any contract, arrangement or
understanding with any person with respect to any securities of ADT,
including, but not limited to, joint ventures, loan or option arrangements,
puts or calls, guarantees against loss or guarantees of profit, division of
losses or profits, or the giving or withholding of proxies. Except as set
forth below or as disclosed elsewhere in this Schedule or the Preliminary
Proxy Statement, none of the Chase Individuals, Chase or any associate of such
persons has any arrangement or understanding with any person with respect to
any future employment by ADT or its affiliates or any future transactions to
which ADT or any of its affiliates will or may be a party, nor any material
interest, direct or indirect, in any transaction which has occurred since
December 17, 1994 or any currently proposed transaction, or series of similar
transactions, to which ADT or any of its affiliates was or is to be a party
and in which the amount involved exceeds $60,000.
The Chase Manhattan Bank ("CMB"), an affiliate of Chase, acts as Agent on a
$300,000,000 credit facility for ADT Operations, Inc., a subsidiary of ADT.
CMB's commitment under the facility is $25,000,000, of which $10,121,696.04 is
presently outstanding.
C-4
<PAGE>
SCHEDULE D
TRADING HISTORY OF SALOMON, BEAR STEARNS AND
CHASE (FOR THEIR OWN ACCOUNTS)
TRADING HISTORY OF SALOMON
ADT ORDINARY SHARES
Shares Purchased (Trade Date)
1996: None
1995: None
1994: None
Shares Sold (Trade Date)
1996: 714,747(9/19)
1995: None
1994: None
ADT COMMON SHARES
Shares Purchased (Trade Date)
1996: 3,320(1/3); 1,300(1/9); 4(1/9); 400(1/26); 62(1/26); 400(1/26);
35,800(3/6); 5,000(3/8); 3,500(3/12); 8,400(3/18); 4,100(4/3); 9,000(5/10);
5,000(5/10); 2,000(5/10); 14,000(5/10); 1,900(5/21); 2,200(5/21); 24,500(7/2);
5,000(7/2); 71,500(7/2); 40,300(7/2); 5,600(7/2); 5,500(7/2); 7,000(7/2);
21,400(7/2); 76,200(7/2); 76,300(7/2); 27,500(7/2); 3,400(7/2); 19,500(7/2);
3,300(7/2); 13,000(7/2); 49,400(7/11); 31,000(7/11); 1,000(7/11); 14(7/18);
300(7/18); 5,000(8/6); 4,500(8/23); 20,000(8/27); 20,000(8/27); 20,000(8/27);
20,000(8/27); 11,000(9/3); 1,600(9/3); 2,000(9/3); 13,000(9/3); 11,000(9/3);
10,000(9/3); 8,100(9/13); 2,500(9/16); 35,900(9/20); 62(9/30); 100(9/30)
1995: 600(1/4); 1,600(3/15); 63(3/15); 20,600(4/6); 36(4/11); 1,700(4/11);
100,000(5/31); 50,000(5/31); 27,500(5/31); 27,500(5/31); 200(6/12);
20,600(6/12); 2,100(6/12); 2,100(6/12); 13,500(6/20); 60(6/20); 20,500(6/23);
14,800)6/23); 200(6/23); 24,500(6/23); 15,500(6/26); 31,000(6/26);
25,000(6/30); 10,000(7/11); 54,100(8/9); 39,500(8/15); 3,000(8/16);
5,000(8/16); 2,100(8/16); 43(8/16); 1,600(8/28); 10,000(8/30); 20,000(9/15);
7,600(9/15); 26,300(9/15); 1,618(9/19);
1994: 250,000(12/21)
Shares Sold (Trade Date)
1996: 3,300(1/4); 20(1/4); 1,304(1/9); 862(1/26); 57,600(3/15); 2,000)4/3);
400(4/3); 1,700(4/3); 10,00(5/10); 20,000(5/10); 4,100(5/21); 9,600(7/2);
2,200(7/2); 400(7/2); 1,600(7/2); 1,200(7/2); 258,100(7/2); 4,100(7/2);
2,300(7/2); 4,200(7/2); 8,200(7/2); 27,600(7/2); 23,600(7/2); 58,900(7/2);
81,400(7/11); 314(7/18); 49,500(8/8); 500(8/27); 6,000(8/27); 7,500(8/27);
23,500(8/27); 14,500(8/27); 11,500(8/27); 13,500(8/27); 3,000(8/27);
1,600(9/3); 45,600(9/3); 1,400(9/3); 85(9/20); 4,500(9/24); 162(9/30);
1995: 600(1/5); 544(3/15); 1,119(3/15); 8,400(4/6); 12,200(4/6); 1,736(4/11);
27,500(5/31); 50,000(5/31); 50,000(5/31); 77,500(5/31); 24,600(6/12);
400(6/12); 1,260(6/20); 2,000(6/23); 15,000(6/23); 14,800(6/23); 13,200(6/23);
15,000(6/23); 16,500(6/26); 20,000(6/26); 10,000(6/26); 25,000(7/7);
10,000(7/10); 20,000(7/17); 10,000(7/17); 10,000(7/17); 10,000(7/19);
15,000(7/19); 25,000(7/19); 10,000(7/31); 5,000(8/4); 5,000(8/7); 15,000(8/9);
10,000(8/9); 500(8/9); 15,000(8/9); 100(8/9); 2,600(8/10); 17,000(8/14);
2,000(8/14); 15,000(8/14); 5,000(8/15); 12,700(8/15); 7,700(8/15)l 2,143(8/16);
1,600(8/28); 18(9/19); 1,600(9/19); 4,900(9/22); 5,000(9/25)
1994: 40,000(12/21); 210,000(12/21)
D-1
<PAGE>
OPTIONS
Options Purchased (Trade Date)
1996: None
1995: None
1994: None
Options Sold (Trade Date)
1996: None
1995: None
1994: None
ADT 8.25% GUARANTEED SENIOR NOTES
Notes Purchased (Trade Date)
1996: None
1995: 500,000(3/2); 10,000(3/7); 400,000(3/8); 100,000(5/25); 100,000(6/6);
50,000(6/20)
1994: 500,000(11/9)
Notes Sold (Trade Date)
1996: None
1995: 350,000(2/15); 150,000(3/2); 125,000(3/2); 500,000(3/2); 100,000(3/2);
125,000(3/2); 250,000(5/3)
1994: 100,000(11/14); 50,000(12/7)
ADT 9.25% GUARANTEED SENIOR SUBORDINATED NOTES
Notes Purchased (Trade Date)
1996: 1,000,000(5/2)
1995: 4,000,000(1/10)
1994: None
Notes Sold (Trade Date)
1996: 1,000,000(5/2)
1995: 2,000,000(1/10); 1,000,000(1/10); 1,000,000(1/10)
1994: None
LYONS
LYONS Purchased (Trade Date)
1996: 100,000(3/6); 500,000(3/6); 3,000,000(3/15); 500,000(3/15)
1995: 1,500,000(6/30); 7,000,000(7/6); 3,000,000(7/7); 500,000(7/14);
400,000(7/14); 200,000(7/14); 1,100,000(7/14); 950,000(8/9); 105,000(8/9);
525,000(8/9); 105,000(8/9); 420,000(8/9); 420,000(8/9); 475,000(8/9);
25,000(8/14); 25,000(8/14)
1994: None
LYONS Sold (Trade Date)
1996: 300,000(3/6); 250,000(3/6); 1,902,000(3/6); 1,200,000(3/12)
1995: 2,500,000(6/30); 2,000,000(6/30); 1,015,000(6/30); 888,000(7/6);
950,000(7/6); 1,000,000(7/11); 1,150,000(8/9); 1,150,000(8/9); 1,500,000(8/9);
1,500,000(8/9); 62,000(8/14); 2,000,000(8/15); 2,000,000(9/15)
1994: None
9 1/2% AUTOMATED SECURITY CAPITAL FINANCE (JERSEY) CONVERTIBLE CAPITAL BONDS
Convertibles Purchased (Trade Date)
1996: 2,000,000(3/7); 2,000,000(3/7); 5,259,000(3/8); 5,259,000(3/8)
1995: 510,000(9/21); 510,000(10/24)
1994: None
Convertibles Sold (Trade Date)
1996: 2,000,000(3/7); 5,259,000(3/8); 395,500(4/25)
1995: 360,000(9/28); 150,000(9/28)
1994: None
D-2
<PAGE>
TRADING HISTORY OF BEAR STEARNS
ADT ORDINARY SHARES
Shares Purchased (Trade Date)
1996: None
1995: None
1994: None
Shares Sold (Trade Date)
1996: None
1995: None
1994: None
ADT COMMON SHARES
Shares Purchased (Trade Date)
1996: 6,000(3/12); 5,800(5/17); 1,100(5/20); 7,900(6/6); 100(7/1); 10,000(7/1);
10,000(7/1); 10,100(7/1); 21,800(7/1); 50,800(7/1); 18,000(7/2); 5,000(7/2);
3,000(7/5); 1,800(7/8); 6,300(7/10); 4,000(7/17); 10,000(7/17); 2,000(7/30);
23,500(8/21); 25,000(8/22); 1,000(8/27); 22,600(9/10); 5,000(9/10); 8,000(9/18);
300(11/12); 130(11/13);
1995: 1,000(5/8)
1994: None
Shares Sold (Trade Date)
1996: 6,000(3/6); 900(5/10); 6,000(5/13); 7,900(6/7); 4,800(7/1); 6,300(7/1);
18,100(7/1); 24,000(7/1); 24,000(7/1); 44,600(7/1); 100(7/2); 18,000(7/2);
5,000(7/2); 14,000(7/17); 2,000(7/30); 23,500(8/21); 5,000(8/22); 20,000(8/22);
1,000(8/27); 22,600(9/10); 5,000(9/10); 8,000(9/19); 300(10/23); 130(11/14)
1995: 1,000(5/5)
1994: None
ADT OPTIONS
Options Purchased (Trade Date)
1996: None
1995: None
1994: None
Options Sold (Trade Date)
1996: None
1995: None
1994: None
ADT 8.25% GUARANTEED SENIOR NOTES
Notes Purchased (Trade Date)
1996: 50,000(2/2); 350,000(12/13)
1995: 150,000(1/3); 20,000(2/14); 2,000,000(3/23); 50,000(7/27); 152,000(9/15);
3,000,000(11/16); 2,000,000(11/29); 2,500,000(12/1)
1994: 30,000(3/16); 25,000(6/10); 120,000(10/31); 30,000(12/16)
D-3
<PAGE>
Notes Sold (Trade Date)
1996: 50,000 (2/5)
1995: 30,000 (1/26); 20,000 (2/14); 2,000,000 (3/23); 50,000 (7/31); 135,000
(9/15); 17,000 (9/19); 3,000,000 (11/16); 2,000,000 (11/29); 2,500,000
(12/1)
1994: 30,000 (3/16); 25,000 (6/10); 120,000 (10/31); 30,000 (12/16)
ADT 9.25% GUARANTEED SENIOR SUBORDINATED NOTES
Notes Purchased (Trade Date)
LYONS Purchased (Trade Date)
1996: None
1995: None
1994: None
Notes Sold (Trade Date)
1996: None
1995: None
1994: None
LYONS
1996: 150,000(2/13); 50,000(2/15); 30,000(2/12); 232,000(2/21); 200,000(6/6);
154,000(7/1); 240,000(7/1); 2,000,000(7/1); 2,000,000(7/1); 38,000(8/22);
14,000(8/23); 1,000,000(9/10); 20,000(9/12); 428,000(9/12); 55,000(9/26);
31,000(10/7); 500,000(10/75); 45,000(11/11); 455,000(11/11); 145,000 (11/15)
1995: 100,000(6/300; 200,000(6/30); 300,000(6/30); 450,000(6/30);
575,000(6/30); 650,000(6/30); 690,000(6/30); 750,000(6/30); 900,000(6/30);
900,000(6/30); 1,250,000(6/30); 1,500,000(6/30); 2,300,000(6/30);
5,100,000(6/30); 7,000,000(6/30); 175,000(7/5); 325,000(7/5); 400,000(7/5);
425,000(7/5); 425,000(7/5); 680,000(7/5); 400,000(7/6); 2,000,000(7/6);
3,050,000(7/10); 2,404,000(7/11); 50,000(7/26); 2,065,000(8/15); 50,000(8/22);
40,000(9/19); 250,000(9/25); 100,000(11/27); 282,000(11/30); 7,000(12/8);
79,000(12/12)
1994: None
LYONS Sold (Trade Date)
1996: 150,000(2/13); 50,000(2/15); 23,000(2/21); 239,000(2/23);
1,866,000(6/28); 728,000(7/1); 2,000,000(7/1); 1,000,000(9/10); 500,000(9/12);
500,000(10/7); 86,000(10/25); 500,000(11/11); 145,000 (11/15)
1995: 500,000(6/30); 950,000(6/30); 1,000,000(6/30); 1,000,000(6/30);
1,500,000(6/30); 2,000,000(6/30); 2,000,000(6/30); 2,500,000(6/30);
5,000,000(6/30); 1,200,000(7/3); 30,000(7/5); 5,200(7/5); 85,000(7/5);
6,895,000(7/5); 2,683,000(7/6); 5,042,000(7/10); 160,000(7/11); 252,000(7/11);
100,000(7/19); 190,000(7/25); 850,000(7/25); 200,000(8/2); 35,000(8/9);
50,000(8/9); 110,000(8/9); 110,000(8/9); 570,000(8/9); 50,000(8/21);
40,000(9/20); 250,000(9/25); 100,000(11/27); 282,000(11/30); 86,000(12/8)
1994: None
9 1/2% AUTOMATED SECURITY CAPITAL FINANCE (JERSEY) CONVERTIBLE CAPITAL BONDS
Convertibles Purchased (Trade Date)
1996: None
1995: None
1994: None
Convertibles Sold (Trade Date)
1996: None
1995: None
1994: None
D-4
<PAGE>
TRADING HISTORY OF CHASE
ADT ORDINARY SHARES
Shares Purchased (Trade Date)
1996: None
1995: None
1994: None
Shares Sold (Trade Date)
1996: None
1995: None
1994: None
ADT COMMON SHARES
Shares Purchased (Trade Date)
1996: None
1995: None
1994: None
Shares Sold (Trade Date)
1996: None
1995: None
1994: None
ADT OPTIONS
Options Purchased (Trade Date)
1996: None
1995: None
1994: None
Options Sold (Trade Date)
1996: None
1995: None
1994: None
ADT 8.25% GUARANTEED SENIOR NOTES
Notes Purchased (Trade Date)--Par Amount
1996: None
1995: None
1994: 1,150,000(4/20); 2,500,000(4/21); 1,500,000(6/8)
D-5
<PAGE>
Notes Sold (Trade Date)
1996: None
1995: None
1994: 2,000,000(3/29); 1,000,000(4/7); 1,000,000(4/8); 1,150,000(4/13)
ADT 9.25% GUARANTEED SENIOR SUBORDINATED NOTES
Notes Purchased (Trade Date)--Par Amount
1996: None
1995: None
1994: 2,000,000(4/13); 463,000(5/19); 92,000(5/19); 125,000(5/19);
265,000(5/19); 567,000(5/19); 93,000(5/19); 395,000(5/19); 650,000(6/21)
Notes Sold (Trade Date)
1996: None
1995: None
1994: 1,000,000(4/13); 150,000(4/14); 500,000(5/16); 1,000,000(5/16);
2,000,000(5/19)
LYONS
LYONS Purchased (Trade Date)
1996: None
1995: None
1994: None
LYONS Sold (Trade Date)
1996: None
1995: None
1994: None
9 1/2% AUTOMATED SECURITY CAPITAL FINANCE (JERSEY) CONVERTIBLE CAPITAL BONDS
Convertibles Purchased (Trade Date)
1996: None
1995: None
1994: None
Convertibles Sold (Trade Date)
1996: None
1995: None
1994: None
D-6
<PAGE>
SCHEDULE E
ADT BYE-LAWS
BYE-LAW 104. TAKE-OVER OFFERS FOR THE COMPANY.
(1) (A) Where any person is or becomes interested, whether as a result of
transactions over a period of time or not, in shares in the capital
of the Company in circumstances in which he would be obliged to make
or extend an offer or offers to shareholders or holders of other
securities or rights referred to in paragraph (4) below of the
Company under the Rules for the time being of the City Code on Take-
overs and Mergers of the United Kingdom of Great Britain and
Northern Ireland (the "City Code", which expression shall include
any revision or modification thereof) issued by the Panel on Take-
overs and Mergers ("the Panel", which expression shall include any
body which succeeds to the functions of the said Panel) if the
Company was a company incorporated in the United Kingdom of Great
Britain and Northern Ireland to which the City Code applied, the
Directors may serve upon that person a notice requiring him to make
or extend an offer or offers in writing in accordance with the
requirements of the City Code in all respects as if the City Code
did apply to the Company but so that references in the City Code to
the Panel shall be construed, for the purposes of this Bye-Law, as
if they were references to the Board of Directors of the Company.
(B) Where any person has acquired, is in the process of acquiring, or
appears to the Directors likely to acquire an interest in shares in
the capital of the Company in circumstances in which he would be
subject to the Rules Governing Substantial Acquisitions of Shares
(the "SARs", which expression shall include any revision or
modification thereof issued by the Panel, if the Company was a
company incorporated in the United Kingdom of Great Britain and
Northern Ireland to which the SARs applied, the Directors may serve
upon that person a notice requiring him to comply with the provisions
of the SARs in relation to any acquisition made (after the date of
adoption of this paragraph (1)(B)) or proposed to be made by him and
if that person has made (after the date of adoption of this paragraph
(1)(B)) or subsequently makes any acquisition in contravention of the
provisions of the SARs such a notice or a further notice issued by
the Directors may require that person to dispose or to procure the
disposal by any person with whom he has acted in concert of any
interest in shares so acquired within twenty-eight days of the date
of such notice.
(C) If a notice served under paragraph (1)(B) requiring a disposal of
shares is not complied with in accordance with its terms and has not
been withdrawn, the Directors may, so far as they are able, dispose
of the shares to which such notice relates at the best price
reasonably obtainable in all the circumstances in which case they
shall give written notice of such disposal to the person or persons
on whom such notice was served. Except as hereinafter provided such a
disposal shall be completed as soon as reasonably practicable after
the giving of a notice under this paragraph (1)(C) as may in the
opinion of the Directors be consistent with obtaining the best price
reasonably obtainable and in any event within thirty days of expiry
of such notice provided that a disposal under this paragraph (1)(C)
shall be suspended during the period when dealings by the Directors
in the Company's shares are not permitted either by law or by the
regulations of any stock exchange upon which those shares of the
Company which are to be disposed of are listed, but any disposal
under this paragraph which is suspended as aforesaid shall be
completed within thirty days after expiry of the period of such
suspension and provided further that neither the Company nor the
Directors shall be liable to any holder or any person having an
interest in any share or other person for failing to obtain the best
price so long as the Directors act in good faith within the period
specified above.
(D) For the purpose of effecting any disposal under paragraph (1)(C)
above, the Directors may authorise in writing any officer or employee
of the Company to execute any necessary transfer on behalf of any
holder and may issue a new certificate to the purchaser. The net
proceeds of such disposal shall be received by the Company, whose
receipt shall be a good discharge for the purchase money, and shall
be paid (without any interest being payable thereon) to the former
holder upon surrender by him of the certificate in respect of the
shares sold and formerly held by him.
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(E) The provisions of these Bye-Laws relating to the protection of
purchasers of shares sold under a lien or upon forfeiture shall apply
mutatis mutandis to disposals under this Bye-Law.
(2) Any notice served under paragraph (1) above may also require the person
on whom it is served to execute an undertaking under seal in favour of
the Directors (as trustees for all the holders of shares in the capital
of the Company) and in a form satisfactory to the Directors to observe
and perform the rules and requirements of the City Code or the SARs as
the case may be as if the same were applicable to the Company and in the
manner prescribed in paragraph (1) above.
(3) Where any person is interested, whether as a result of a series of
transactions over a period of time or not, in Common Shares which (taken
together with shares held or acquired by persons acting in concert with
him) represent 30 per cent. or more of all the Common Shares for the
time being in issue and the Directors determine that it is not expedient
to serve a notice under paragraph (1)(A) above or if any person upon
whom such a notice is served fails within thirty days to comply with the
same, the Directors may serve upon that person a notice requiring him to
make an offer in writing (the "Offer"), within 30 days of the date of
such notice on the basis set out in the following paragraphs, to the
holders of every class of share capital of the Company (whether voting
or non-voting) to purchase all such shares for cash on terms that
payment in full therefor will be made within 21 days of the Offer
becoming or being declared unconditional in all respects.
(4) Where the Directors serve a notice upon any person in accordance with
paragraph (3) above, they may also include in that notice a requirement
that such person shall make an appropriate offer or proposal in writing
to the holders of every class of securities convertible into, or of
rights to subscribe for, share capital of the Company (whether such share
capital is voting or non-voting). Such appropriate offer or proposal is
referred to in this Bye-Law as a "Convertible Offer". The Convertible
Offer shall be made at the same time as the Offer. The terms of the
Convertible Offer shall be such terms as the Directors, in their absolute
discretion, consider to be fair and reasonable having regard to the terms
of the Offer and the Directors shall notify such terms to the person
specified in paragraph (3) above (the "Offeror"). The Convertible Offer
shall be conditional only upon the Offer becoming or being declared
unconditional in all respects.
(5) In addition to the Offeror, the Directors may require, in their
absolute discretion, each of the principal members of a group of persons
acting in concert with him and who appear to be interested in any shares
in, or convertible securities of, the Company to make the Offer and/or
the Convertible Offer. For the purposes of this Bye-Law, persons shall be
deemed to be acting in concert if, pursuant to an agreement or
understanding (whether formal or informal) they actively co-operate in
acquiring or seeking to acquire shares in, or convertible securities of,
the Company.
(6) Unless the Directors otherwise agree, an offer made under paragraphs
(3), (4) or (5) of this Bye-Law must, in respect of each class of share
capital or convertible securities involved, be in cash or be accompanied
by a cash alternative offer at not less than the highest price paid by
the Offeror or any person acting in concert with it for shares or
convertible securities of that class within the preceding 12 months. If
such price cannot be ascertained by the Directors or if such shares or
convertible securities have been acquired other than for cash pursuant to
a bargain made on any recognised stock exchange or if the Directors
consider that such highest price is, for any reason, inappropriate,
unfair or unreasonable having regard to the size and timing of the
relevant purchases, the relationship (if any) between the seller and
purchaser of such shares or convertible securities or the number of
shares or convertible securities purchased in the preceding 12 months,
the Directors may, in any such case, fix the price at which the Offer,
the Convertible Offer or the cash alternative offer is to be made. The
cash Offer, the cash Convertible Offer or the cash alternative offer
must, in each case, remain open for not less than 14 days after the date
on which the Offer or the Convertible Offer, as the case may be, has
become or is declared to be unconditional as to acceptances.
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(7) Any person who makes or is about to make or who is or can be required
to make an offer under this Bye-Law or who has made such an offer which
has lapsed, shall observe and shall procure that any persons acting in
concert with him shall observe the rules and requirements of the City
Code both in letter and in spirit prior to, during the pursuit of and, if
applicable, after the failure of such an offer.
(8) For the purposes of this Bye-Law, any questions or disputes arising out
of the grant of consent by the Directors, the comparability of offers,
the terms of offers, any question as to whether any person shall be
regarded as acting in concert with another, any question regarding the
interpretation or application of the City Code and the meaning of any
terms or phrases used in this Bye-Law or the City Code shall be
determined by the Directors in their absolute discretion.
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<PAGE>
SCHEDULE F
ADT BYE-LAWS
BYE-LAW 46. VOTING RIGHTS.
(1) Subject to any rights or restrictions attached to any class of shares,
at any meeting of the Company, each Member present in person shall be
entitled to one vote on any question to be decided on a show of hands
and each Member present in person or by proxy shall be entitled on a
poll to one vote for each share held by him.
PROVIDED THAT no Member shall be entitled (save as proxy for another
Member) to be present or vote at any meeting, either personally or by
proxy, or to exercise any privilege in relation to meetings of the
Company conferred by membership, or be reckoned in a quorum:--
(A) in respect of any share held by him (whether alone or jointly with
any other person) on which there shall not have been paid all calls
for the time being due and payable, together with interest and
expenses (if any); or
(B) in respect of any shares held by him in relation to which he or any
person appearing to be interested in such shares has been duly served
with a notice under paragraph (2) of this Bye-Law which:
(i) requires him or such other person to give information to the
Company in accordance with such paragraph; and
(ii) contains a statement to the effect that upon failure to supply
such information before the expiry of a period specified in
such notice (being such reasonable period as the Directors
shall determine from the date of service of such notice) the
registered holder of such shares shall not be entitled to vote
or otherwise exercise the rights referred to in this Bye-Law
and the person on whom such notice was served fails to supply
such information within the period so specified.
Provided that:--
(a) the Company shall be entitled to serve a notice under paragraph
(2) of this Bye-Law which fulfills sub-sub-paragraphs (i) and
(ii) above on a person who is not the registered holder of
shares in the Company only if the registered holder of the
shares in question has previously been, or is simultaneously
with the service of such a notice, served by the Company with a
notice under paragraph (2) of this Bye-Law; and
(b) the disqualification provisions of this sub-paragraph (B) shall
take effect only upon the service on the registered holder of
the shares in question of a notice to the effect that he has
thereby become subject to the said disqualification for so long
as the information requested pursuant to this sub-paragraph (B)
has not been supplied to the Company and for a period of ninety
days thereafter; and
(c) for the purpose of this sub-paragraph (B) a person shall be
treated as appearing to be interested in any shares if (after
taking into account any information supplied in response to any
notice under paragraph (2) of this Bye-Law and any other
information) the Company knows or has reasonable cause to
believe that the person in question is or may be interested in
the shares.
(C) in respect of any shares held by him in relation to which he or any
person appearing to be interested in such shares has been duly served
with a notice under Bye-Law 104 which:--
(i) requires him or such other person to make an offer in
accordance with, or otherwise comply with the terms of, such
Bye-Law; and
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<PAGE>
(ii) contains a statement to the effect that upon failure to make
such an offer before the expiry of a period specified in such
notice (being not less than twenty-eight days from the date of
service of such notice) or, having made such an offer or
acquired such shares in contravention of a notice served under
that Bye-Law, otherwise fails to comply with the provisions of
Bye-Law 104 the registered holder of such shares shall not be
entitled to vote or otherwise exercise the rights referred to
in this Bye-Law and the person on whom such notice was served
fails to make such an offer within the period so specified or
fails to remedy such non-compliance.
Provided that:--
(a) the Company shall be entitled to serve a notice under paragraph
(2) of this Bye-Law which fulfils sub-sub-paragraphs (i) and
(ii) above on a person who is not the registered holder of
shares in the Company only if the registered holder of the
shares in question has previously been, or is, simultaneously
with the service of such a notice, served by the Company with a
notice under Bye-Law 104; and
(b) the disqualification provisions of this sub-paragraph (C) shall
take effect only upon the service on the registered holder of
the shares in question of a notice to the effect that he has
thereby become subject to the said disqualification and shall
subsist until an offer is made in accordance with Bye-Law 104
and such offer becomes or is declared unconditional in all
respects in accordance with its terms.
(D) in respect of any shares in relation to which he and any person
specified in paragraph (3) of this Bye-Law has been duly served with
a notice under paragraph (3) which remains in effect.
(2) (A) The Company may by notice in writing require any person whom the
Company knows or has reasonable cause to believe to be interested in
shares in the Company to indicate whether or not it is the case and,
where that person holds any interest in any such shares, to give such
further information as may be required in accordance with sub-
paragraph (B) below.
(B) Any such notice may require the person to whom it is addressed to
give particulars of his own present interests in shares in the
Company.
(C)
The particulars referred to above include particulars of the identity
of persons interested in the shares in question and of whether
persons interested in the same shares are parties to any agreement or
arrangement relating to the exercise of any of the rights conferred
by the holding of the shares.
(D)
A notice under this Bye-Law shall require any information given in
response to the notice to be given in writing within such reasonable
time as the Directors may determine and is specified in the notice.
(E)
For the purposes of this Bye-Law, a person who is interested in a
right to subscribe for or convert into shares in the Company shall be
deemed to be interested in shares in the Company and references to
interests in shares shall include any interest whatsoever in such
shares including, without limitation, a right to control directly or
indirectly the exercise of any right conferred by the holding of
shares alone or in conjunction with a person deemed to be acting in
concert for the purposes of Bye-Law 104 and the interest of any
person shall be deemed to include the interest of any other person
deemed to be acting in concert as aforesaid.
(F)
A notice which has taken effect under this Bye-Law shall remain in
effect in accordance with its terms following a transfer of the
shares to which it relates unless and until the Directors determine
otherwise and notify the registered holder accordingly.
(G)
The right to receive payments of income or capital which become due
or payable in respect of any share during a period of
disqualification applicable to such share under this Bye-Law shall be
suspended during such period of disqualification without any
liability of the Company to the
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<PAGE>
Member for late payment or non-payment and the Company may retain
such sums for its own use and benefit during such period of
suspension and the holders of such shares may, in the discretion of
the Directors, be excluded from participation in any further issue of
shares by reference to an existing holding of shares at a point in
time during such period of suspension. No trust shall be created in
respect of any such debt, no interest shall be payable in respect of
the same and the Company shall not be required to account for any
money earned on such amount, which may be employed in the business of
the Company or invested in such investments as the Directors may from
time to time think fit.
(3) (A) Where any person whether alone or in circumstances where for the
purposes of Bye-Law 104 he is acting in concert with other persons
acquires or has acquired interests in shares which (including the
interests of persons with whom he is acting in concert as aforesaid)
amount to three per cent. or more of the issued share capital of any
class of the Company he shall within two days following the date on
which he became aware (or ought reasonably to have become aware) of
the acquisition of such an interest notify the Company of the
existence of such interest and shall in making such notification to
the Company also supply the particulars referred to in sub-paragraphs
(2)(B) and (2)(C) above and so long as his interest as aforesaid
amounts to three per cent. or more of the issued share capital of any
class of the Company he shall notify the Company of any change in his
interests (including the interests of persons with whom he is acting
in concert as aforesaid) amounting to one per cent. or more of the
issued share capital of any class of the Company within two days
following the date on which he became aware (or ought reasonably to
have become aware) of such change.
(B)
If any person has failed to make a notification in accordance with
sub-paragraph (3)(A) above (notwithstanding that such notification
has been made after the said period of two days) the Directors may
serve a notice on such person stating that the registered holder of
the shares in which that person is interested shall not be entitled
to vote or otherwise exercise the rights referred to in this Bye-Law
in respect of any shares or a number of shares specified in the
notice held by that registered holder during the one hundred and
eighty days following the service of such notice provided that the
registered holder of such shares has previously been, or is
simultaneously with the service of such a notice, served with a
notice under this sub-paragraph.
(C)
If the Directors resolve that they have reasonable cause to believe
that a person is or may be interested in shares of the Company or
that any such shares are or may be shares in which any person is
interested and that they have made reasonable enquiries to establish
whether a person is so interested, or whether they are such shares,
as the case may be, such person shall for the purposes of this Bye-
Law be deemed to be interested in shares or, as the case may be, such
shares shall be deemed to be shares in which such person is
interested, from the date of such resolution until any such time as
the Directors resolve otherwise.
(D)
Any belief, resolution or decision of the Directors which is held or
made in pursuance or purported pursuance of any of the provisions of
this Bye-Law shall be conclusive, final and binding on all persons
concerned, and the validity of any act or thing which is done or
caused to be done by the Directors in pursuance or purported
pursuance of any of such provisions shall not be capable of being
impeached by anyone on the ground that there was not any basis or
reasonable basis on which the Directors could have arrived at any
such belief or made any such resolution or decision, or on the ground
that any conclusion of fact on which the Directors relied or might
have relied for the purposes of arriving at any such belief or making
any such resolution or decision was incorrect, or on any other ground
whatsoever.
(E)
In calculating the number of days allowed for any notification to be
made under this Bye-Law 46(3), any day which is a Saturday or Sunday
shall be disregarded.
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<PAGE>
(FRONT OF PROXY CARD)
PROXY SOLICITED BY WESTERN RESOURCES, INC.
FOR THE SPECIAL MEETING OF SHAREHOLDERS OF
ADT LIMITED
The undersigned, a holder of record of common shares, par value $0.10 per
share (the "Shares"),of ADT Limited, a company incorporated under the laws of
Bermuda ("ADT"), hereby appoints John K. Rosenberg, Richard D. Terrill and Neil
T. Anderson, or any of them, the proxy or proxies of the undersigned, each with
full power of substitution, to attend the Special Meeting of ADT shareholders
(and any adjournments, postponements, continuations or reschedulings thereof),
at which holders of Shares will be voting on, among other things, approval and
adoption of the Western Resources Proposals to: (i) remove all of the present
members of the Board of Directors of ADT (the "ADT Board") and any person or
persons elected or designated by any of such directors to fill any vacancy or
newly created directorship, (ii) reduce the number of seats on the ADT Board to
two, and (iii) elect Steven L. Kitchen and Steven A. Millstein (the "Western
Resources Nominees") as the directors of ADT (or, if either Western Resources
Nominee is unable to serve as a director of ADT due to death, disability or
otherwise, any other person designated as a Western Resources Nominee by
Western Resources), and to vote as specified in this proxy all the Shares which
the undersigned would otherwise be entitled to vote if personally present. The
undersigned hereby revokes any previous proxies with respect to the matters
covered in this Proxy.
THE BOARD OF DIRECTORS OF WESTERN RESOURCES, INC. RECOMMENDS A VOTE FOR
---
EACH OF THE WESTERN RESOURCES PROPOSALS. IF RETURNED CARDS ARE SIGNED BUT NOT
MARKED, THE UNDERSIGNED WILL BE DEEMED TO HAVE VOTED FOR EACH OF THE WESTERN
---
RESOURCES PROPOSALS AND TO HAVE ABSTAINED ON ALL OTHER MATTERS.
<PAGE>
[Reverse of Proxy Card]
THE BOARD OF DIRECTORS OF WESTERN RESOURCES, INC. RECOMMENDS A VOTE FOR EACH OF
THE WESTERN RESOURCES PROPOSALS.
1. APPROVAL OF PROPOSAL TO REMOVE PRESENT
MEMBERS OF ADT BOARD. / / FOR / / AGAINST / / ABSTAIN
2. APPROVAL OF PROPOSAL TO REDUCE NUMBER
OF SEATS ON ADT BOARD TO TWO. / / FOR / / AGAINST / / ABSTAIN
3. ELECTION OF DIRECTORS: Steven L. Kitchen
and Steven A. Millstein. / / FOR / / AGAINST / / ABSTAIN
/ / FOR all Western Resources / / WITHHOLD / / ABSTAIN
Nominees (except as marked AUTHORITY to vote
to the contrary below) for all nominees
WITHHELD for the following nominees(s) only: write name(s):_____________________
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS,
POSTPONEMENTS, CONTINUATIONS OR RESCHEDULINGS HEREOF:
Date:________________________________________, 1996
___________________________________________________
Signature (Title, if any)
___________________________________________________
Signature if held jointly
Please sign your name below exactly as it appears
hereon. When Shares are held of record by joint
tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please sign
in full corporate name by president or authorized
officer. If a partnership, please sign in partnership
name by authorized person.
IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE, PLEASE CONTACT [ ] AT
1-800-[ ].
