<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
LAWTER INTERNATIONAL, INC.
(NAME OF SUBJECT COMPANY)
LIPSTICK ACQUISITION CORP.
EASTMAN CHEMICAL COMPANY
(BIDDERS)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
(TITLE OF CLASS OF SECURITIES)
520786104
(CUSIP NUMBER OF CLASS OF SECURITIES)
HAROLD L. HENDERSON
100 NORTH EASTMAN ROAD
KINGSPORT, TENNESSEE 37662
TELEPHONE: (423) 229-2000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND
COMMUNICATIONS ON BEHALF OF BIDDER)
------------------------
WITH A COPY TO:
MICHAEL P. ROGAN, ESQ.
MARCIA R. NIRENSTEIN, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
1440 NEW YORK AVENUE, N.W.
WASHINGTON, D.C. 20005
TELEPHONE: (202) 371-7000
CALCULATION OF FILING FEE
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Transaction valuation* Amount of filing fee**
$432,358,128 $86,472
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* For purposes of calculating the filing fee only. This calculation assumes the
purchase of an aggregate of 35,294,541 shares of common stock, par value
$1.00 per share, of Lawter International, Inc. at $12.25 net per share in
cash. The amount reflects the purchase of 33,068,076 outstanding shares and
2,226,465 shares issuable pursuant to the exercise of options.
** The amount of the filing fee, calculated in accordance with Rule 0-11(d) of
the Securities Exchange Act of 1934, as amended, equals 1/50th of one percent
of the aggregate value of cash offered by Lipstick Acquisition Corp. for such
number of shares.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
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Amount previously paid: Not applicable. Filing Party: Not applicable.
Form or registration Date Filed: Not applicable.
no.: Not applicable.
</TABLE>
Page 1 of 8 pages
Exhibit Index is Located on Page 8
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<PAGE> 2
CUSIP NO. 520786104 14D-1 PAGE 2 OF 8
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1. NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Lipstick Acquisition Corp. (E.I.N. applied for)
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [
]
(b) [X]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS*
AF
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(e) or 2(f)
[ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
None
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8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES*
[ ]
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9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
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10. TYPE OF REPORTING PERSON*
CO
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</TABLE>
2
<PAGE> 3
CUSIP NO. 520786104 14D-1 PAGE 3 OF 8
<TABLE>
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1. NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Eastman Chemical Company (E.I.N. 62-1539359)
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [
]
(b) [X]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS*
WC
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(e) or 2(f)
[ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
None
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8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES*
[ ]
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9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
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10. TYPE OF REPORTING PERSON*
CO
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</TABLE>
3
<PAGE> 4
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Lawter International, Inc., a
Delaware corporation (the "Company"). The address of the Company's principal
executive offices is One Terra Way, 8601 95th Street, Pleasant Prairie,
Wisconsin 53142.
(b) This Statement on Schedule 14D-1 relates to the offer by Lipstick
Acquisition Corp. (the "Purchaser"), a Delaware corporation and a wholly owned
subsidiary of Eastman Chemical Company ("Parent"), a Delaware corporation, to
purchase all shares of common stock, par value $1.00 per share (the "Shares"),
of the Company upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated May 4, 1999, and in the related Letter of Transmittal
(which, together with any amendments or supplements thereto, constitute the
"Offer"), at a purchase price of $12.25 per share, net to the tendering
stockholder in cash, without interest thereon.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of April 27, 1999 (the "Merger Agreement"), by and among Parent, the
Purchaser and the Company. Pursuant to the Merger Agreement and the Delaware
General Corporation Law, as amended (the "DGCL"), as soon as practicable after
the completion of the Offer and satisfaction or waiver, if permissible, of all
conditions set forth in the Merger Agreement, including the purchase of Shares
pursuant to the Offer and the approval and adoption of the Merger Agreement by
the stockholders of the Company (if required by applicable law), the Purchaser
shall be merged with and into the Company (the "Merger") and each Share then
outstanding, other than Shares held by (i) the Company or any of its
subsidiaries, (ii) Parent or any of its subsidiaries, including the Purchaser
and (iii) stockholders who properly perfect their dissenters' rights under the
DGCL, will be converted into the right to receive $12.25 in cash or any higher
price per Share paid in the Offer (the "Merger Consideration"), without interest
thereon.
The Company has represented and warranted to Parent and the Purchaser in
the Merger Agreement that, as of April 27, 1999, 33,068,076 Shares were issued
and outstanding and 2,226,465 Shares were issuable pursuant to the exercise of
options. The Merger Agreement provides, among other things, that the Company
will not, without the prior written consent of Parent, issue any additional
Shares (except upon the exercise of options outstanding on the date thereof) or
other securities convertible into, or exercisable or exchangeable for, Shares.
The information set forth in the Introduction of the Offer to Purchase
annexed hereto as Exhibit (a)(1) is incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of the Shares;
Dividends") of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d); (g) This Statement is being filed by the Purchaser and Parent. The
information set forth in Section 9 ("Certain Information Concerning Parent and
the Purchaser") of the Offer to Purchase and Schedule I thereto is incorporated
herein by reference.
(e) and (f) The information set forth in Section 9 ("Certain Information
Concerning Parent and the Purchaser") of the Offer to Purchase is incorporated
herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introduction, Section 9 ("Certain
Information Concerning Parent and the Purchaser"), Section 11 ("Background of
the Offer; Purpose of the Offer and the Merger; the Merger Agreement and Certain
Other Agreements") and Section 12 ("Plans for the Company; Other Matters") of
the Offer to Purchase is incorporated herein by reference.
4
<PAGE> 5
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in Section 10 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in the Introduction, Section 11
("Background of the Offer; Purpose of the Offer and the Merger; the Merger
Agreement and Certain Other Agreements") and Section 12 ("Plans for the Company;
Other Matters") of the Offer to Purchase is incorporated herein by reference.
(f)-(g) The information set forth in Section 7 ("Effect of the Offer on the
Market for the Shares; NYSE Listing; Exchange Act Registration; Margin
Regulations") of the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) The information set forth in the Introduction and Section 9 ("Certain
Information Concerning Parent and the Purchaser") of the Offer to Purchase are
incorporated herein by reference.
(b) The information set forth in Section 9 ("Certain Information Concerning
Parent and the Purchaser") of the Offer to Purchase is incorporated herein by
reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction and Section 9 ("Certain
Information Concerning Parent and the Purchaser"), Section 11 ("Background of
the Offer; Purpose of the Offer and the Merger; the Merger Agreement and Certain
Other Agreements") and Section 12 ("Plans for the Company; Other Matters") of
the Offer to Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and Section 16 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Not applicable.
ITEM 10. ADDITIONAL INFORMATION.
(a) Not applicable.
(b)-(c) The information set forth in the Introduction and Section 15
("Certain Legal Matters") of the Offer to Purchase is incorporated herein by
reference.
(d) The information set forth in Section 7 ("Effect of the Offer on the
Market for the Shares; NYSE Listing; Exchange Act Registration; Margin
Regulations") and Section 15 ("Certain Legal Matters") of the Offer to Purchase
is incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2),
respectively, is incorporated herein by reference.
5
<PAGE> 6
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated May 4, 1999.
(2) Letter of Transmittal.
(3) Notice of Guaranteed Delivery.
(4) Letter from the Dealer Manager to Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(7) Summary Advertisement as published on May 4, 1999.
(8) Text of Press Release, dated April 28, 1999, issued by Parent
(incorporated by reference to Current Report on Form 8-K, filed by
Parent on May 3, 1999).
(9) Text of Press Release, dated May 4, 1999, issued by Parent.
(b) Not applicable.
(c)(1) Agreement and Plan of Merger, dated as of April 27, 1999 by and
among Parent, the Purchaser and the Company (incorporated by
reference to Current Report on Form 8-K, filed by Parent on May 3,
1999).
(2) Short Form Merger Option Agreement, dated as of April 27, 1999 by
and among Parent, the Purchaser and the Company (incorporated by
reference to Current Report on Form 8-K, filed by Parent on May 3,
1999).
(3) Confidentiality Agreement, dated as of October 30, 1998 by and among
Parent and the Company.
(4) Employment Agreement, dated as of April 27, 1999, between Parent,
the Company and John P. O'Mahoney.
(5) Letter Agreement, dated April 27, 1999, between Parent and John P.
O'Mahoney, granting stock options.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
6
<PAGE> 7
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: May 4, 1999
LIPSTICK ACQUISITION CORP.
By: /s/ ALLAN R. ROTHWELL
------------------------------------
Name: Allan R. Rothwell
Title: President
EASTMAN CHEMICAL COMPANY
By: /s/ ALLAN R. ROTHWELL
------------------------------------
Name: Allan R. Rothwell
Title: Senior Vice President and
Chief Financial Officer
7
<PAGE> 8
EXHIBIT INDEX
(a)(1) Offer to Purchase, dated May 4, 1999.
(2) Letter of Transmittal.
(3) Notice of Guaranteed Delivery.
(4) Letter from the Dealer Manager to Brokers, Dealers, Commercial
Banks, Trust Companies and other Nominees.
(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and other Nominees.
(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(7) Summary Advertisement as published on May 4, 1999.
(8) Text of Press Release, dated April 28, 1999, issued by Parent
(incorporated by reference to Current Report on Form 8-K, filed by
Parent on May 3, 1999).
(9) Text of Press Release, dated May 4, 1999, issued by Parent.
(b) Not applicable.
(c)(1) Agreement and Plan of Merger, dated as of April 27, 1999 by and
among Parent, the Purchaser and the Company (incorporated by
reference to Current Report on Form 8-K, filed by Parent on May 3,
1999).
(2) Short Form Merger Option Agreement, dated as of April 27, 1999 by
and among Parent, the Purchaser and the Company (incorporated by
reference to Current Report on Form 8-K, filed by Parent on May 3,
1999).
(3) Confidentiality Agreement, dated as of October 30, 1998 by and among
Parent and the Company.
(4) Employment Agreement, dated as of April 27, 1999, between Parent,
the Company and John P. O'Mahoney.
(5) Letter Agreement, dated April 27, 1999, between Parent and John P.
O'Mahoney, granting stock options.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
8
<PAGE> 1
Exhibit (a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
LAWTER INTERNATIONAL, INC.
AT
$12.25 NET PER SHARE IN CASH
BY
LIPSTICK ACQUISITION CORP.,
A WHOLLY OWNED SUBSIDIARY OF
EASTMAN CHEMICAL COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, JUNE 1, 1999, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER, DATED
AS OF APRIL 27, 1999, BY AND AMONG EASTMAN CHEMICAL COMPANY ("PARENT"), LIPSTICK
ACQUISITION CORP. (THE "PURCHASER") AND LAWTER INTERNATIONAL, INC. (THE
"COMPANY"). THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER
AND THE MERGER (EACH AS DEFINED HEREIN), AND HAS UNANIMOUSLY DETERMINED THAT THE
OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY'S
STOCKHOLDERS AND UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS ACCEPT THE OFFER
AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED HEREIN) THAT
NUMBER OF SHARES WHICH, WHEN ADDED TO THE SHARES BENEFICIALLY OWNED BY PARENT OR
THE PURCHASER (IF ANY), REPRESENTS AT LEAST A MAJORITY OF THE SHARES OUTSTANDING
ON A FULLY DILUTED BASIS ON THE DATE SHARES ARE ACCEPTED FOR PAYMENT. THE OFFER
IS ALSO SUBJECT TO THE OTHER CONDITIONS SET FORTH IN THIS OFFER TO PURCHASE. SEE
SECTION 14.
------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares (as defined herein) should either (i) complete and sign the enclosed
Letter of Transmittal (or a facsimile thereof) in accordance with the
Instructions in the Letter of Transmittal, have such stockholder's signature
thereon guaranteed (if required by Instruction 1 to the Letter of Transmittal),
mail or deliver the Letter of Transmittal (or a facsimile thereof) and any other
required documents to the Depositary (as defined herein) and either deliver the
certificates for such Shares to the Depositary or tender such Shares pursuant to
the procedure for book-entry transfer set forth in Section 3 of this Offer to
Purchase or (ii) request such stockholder's broker, dealer, commercial bank,
trust company or other nominee to effect the transaction for such stockholder.
Any stockholder whose Shares are registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact such broker,
dealer, commercial bank, trust company or other nominee to tender such Shares.
Any stockholder who desires to tender Shares and whose certificates
evidencing such Shares are not immediately available, or who cannot comply with
the procedures for book-entry transfer on a timely basis, or who cannot deliver
all required documents to the Depositary prior to the expiration of the Offer,
may tender such Shares by following the procedures for guaranteed delivery set
forth in Section 3 of this Offer to Purchase.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
set forth on the back cover of this Offer to Purchase. Requests for additional
copies of this Offer to Purchase, the Letter of Transmittal, the Notice of
Guaranteed Delivery and other tender offer materials may be directed to the
Information Agent or brokers, dealers, commercial banks or trust companies.
------------------------
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
May 4, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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INTRODUCTION....................................................... 1
THE OFFER.......................................................... 3
1. Terms of the Offer.......................................... 3
2. Acceptance for Payment and Payment for Shares............... 4
3. Procedures for Tendering Shares............................. 5
4. Withdrawal Rights........................................... 8
5. Certain United States Federal Income Tax Consequences....... 8
6. Price Range of the Shares; Dividends........................ 9
7. Effect of the Offer on the Market for the Shares; NYSE
Listing; Exchange Act Registration; Margin Regulations...... 9
8. Certain Information Concerning the Company.................. 10
9. Certain Information Concerning Parent and the Purchaser..... 12
10. Source and Amount of Funds.................................. 14
11. Background of the Offer; Purpose of the Offer and the
Merger; the Merger Agreement and Certain Other Agreements... 14
12. Plans for the Company; Other Matters........................ 25
13. Dividends and Distributions................................. 27
14. Conditions to the Offer..................................... 27
15. Certain Legal Matters....................................... 29
16. Fees and Expenses........................................... 32
17. Miscellaneous............................................... 32
SCHEDULE I
INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF
PARENT AND THE PURCHASER......................................... I-1
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<PAGE> 3
To the Holders of Common Stock of
Lawter International, Inc.:
INTRODUCTION
Lipstick Acquisition Corp., a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of Eastman Chemical Company, a Delaware corporation
("Parent"), hereby offers to purchase all outstanding shares of common stock,
par value $1.00 per share (the "Shares"), of Lawter International, Inc., a
Delaware corporation (the "Company"), at a price of $12.25 per Share, net to the
seller in cash, without interest (the "Offer Price"), upon the terms and subject
to the conditions set forth in this Offer to Purchase and in the related Letter
of Transmittal (which, as amended or supplemented from time to time,
collectively constitute the "Offer").
Tendering stockholders of record who tender Shares directly will not be
obligated to pay brokerage fees or commissions or, except as set forth in
Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase
of Shares by the Purchaser pursuant to the Offer. Stockholders who hold their
shares through a bank or broker should check with such institution as to whether
they charge any service fees. The Purchaser will not pay such service fees. The
Purchaser will pay all fees and expenses of Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), as Dealer Manager (in such capacity, the
"Dealer Manager"), ChaseMellon Shareholder Services, L.L.C., as Depositary (the
"Depositary"), and Kissel Blake, as Information Agent (the "Information Agent"),
incurred in connection with the Offer and in accordance with the terms of the
agreements entered into between the Purchaser and/or Parent and each such
person. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "COMPANY BOARD") HAS UNANIMOUSLY
APPROVED THE MERGER AGREEMENT (AS DEFINED BELOW) AND THE TRANSACTIONS
CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER (AS DEFINED BELOW), AND
HAS UNANIMOUSLY DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE
BEST INTERESTS OF, THE COMPANY'S STOCKHOLDERS AND UNANIMOUSLY RECOMMENDS THAT
THE STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
ABN AMRO Incorporated, financial advisor to the Company, has delivered to
the Company Board its opinion, dated as of April 27, 1999 (the "Financial
Advisor Opinion"), to the effect that, as of such date and based upon and
subject to certain assumptions and matters stated therein, the consideration to
be received by the holders of Shares (other than Parent and its affiliates) in
the Offer and the Merger is fair, from a financial point of view, to such
holders. A copy of the Financial Advisor Opinion is attached as an exhibit to
the Company's Solicitation/Recommendation Statement on Schedule 14D-9 (the
"Schedule 14D-9"), which has been filed by the Company with the Securities and
Exchange Commission (the "Commission") in connection with the Offer and which is
being mailed to holders of Shares herewith. Holders of Shares are urged to, and
should, read the Financial Advisor Opinion carefully.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED BELOW) THAT
NUMBER OF SHARES WHICH, WHEN ADDED TO THE SHARES BENEFICIALLY OWNED BY PARENT OR
THE PURCHASER (IF ANY), REPRESENTS AT LEAST A MAJORITY OF THE SHARES OUTSTANDING
ON A FULLY DILUTED BASIS ON THE DATE SHARES ARE ACCEPTED FOR PAYMENT (THE
"MINIMUM CONDITION"). THE OFFER IS ALSO SUBJECT TO THE OTHER CONDITIONS SET
FORTH IN THIS OFFER TO PURCHASE. SEE SECTION 14. As used in this Offer to
Purchase, "fully diluted basis" takes into account the exercise of all
outstanding options. The Company has represented and warranted to Parent and the
Purchaser that, as of April 27, 1999, there were (i) 33,068,076 Shares issued
and outstanding and (ii) 2,226,465 Shares issuable pursuant to the exercise of
options. The Merger Agreement provides, among other things, that the Company
will not, without the prior written consent of Parent, issue any additional
Shares (except upon the exercise of outstanding options) or other securities
convertible into, or exercisable or exchangeable for, Shares. See Section 11.
Based on the foregoing and assuming the issuance of 2,226,465 Shares issuable
upon the exercise of outstanding options, the Purchaser believes that the
Minimum Condition will be satisfied if 17,647,271 Shares are validly tendered
and not withdrawn prior to the Expiration Date.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of April 27, 1999 (the "Merger Agreement"), by and among Parent, the
Purchaser and the Company. Pursuant to the Merger Agreement and the Delaware
General Corporation Law, as amended (the "DGCL"), as soon as practicable
<PAGE> 4
after the completion of the Offer and satisfaction or waiver, if permissible, of
all conditions, including the purchase of Shares pursuant to the Offer
(sometimes referred to herein as the "consummation" of the Offer) and the
approval and adoption of the Merger Agreement by the stockholders of the Company
(if required by applicable law), the Purchaser will be merged with and into the
Company (the "Merger") and the Company will be the surviving corporation in the
Merger (the "Surviving Corporation"). At the effective time of the Merger (the
"Effective Time"), each Share then outstanding, other than Shares held by (i)
the Company or any of its subsidiaries, (ii) Parent or any of its subsidiaries,
including the Purchaser, and (iii) stockholders who properly perfect their
dissenters' rights under the DGCL, will be converted into the right to receive
$12.25 in cash or any higher price per Share paid in the Offer (the "Merger
Consideration"), without interest. The Merger Agreement is more fully described
in Section 11.
The Merger Agreement provides that, upon the purchase by the Purchaser of
at least a majority of the Shares pursuant to the Offer and from time to time
thereafter, Parent will be entitled to designate such number of directors,
rounded up to the next whole number, on the Company Board so that the percentage
of Parent's nominees on the Company Board equals the percentage of outstanding
Shares beneficially owned by the Purchaser, Parent and their affiliates. The
Company will, at such time, upon the request of Parent, promptly use its best
efforts to take all action necessary to cause such persons designated by Parent
to be appointed or elected to the Company Board, if necessary, by increasing the
size of the Company Board or securing resignations of incumbent directors or
both.
Consummation of the Merger is conditioned upon, among other things, the
approval and adoption by the requisite vote of stockholders of the Company of
the Merger Agreement, if required by applicable law and the Company's
Certificate of Incorporation (the "Certificate of Incorporation"). See Section
11. Under the DGCL and pursuant to the Certificate of Incorporation, the
affirmative vote of the holders of a majority of the outstanding Shares is the
only vote of any class or series of the Company's capital stock that would be
necessary to approve the Merger Agreement at a meeting of the Company's
stockholders. If the Purchaser purchases at least a majority of the outstanding
Shares in the Offer (which will be the case if the Minimum Condition is
satisfied and the other conditions to the Offer are satisfied or waived), the
Purchaser will be able to effect the Merger without the affirmative vote of any
other stockholder. Pursuant to the Merger Agreement, Parent and the Purchaser
have agreed to vote the Shares acquired by them pursuant to the Offer in favor
of the Merger. See Section 12.
Under Section 253 of the DGCL, if a corporation owns at least 90% of the
outstanding shares of each class of a subsidiary corporation, the corporation
holding such stock may merge such subsidiary into itself, or itself into such
subsidiary, without any action or vote on the part of the board of directors or
the stockholders of such other corporation (a "short-form merger"). In the event
that the Purchaser acquires in the aggregate at least 90% of the outstanding
Shares pursuant to the Offer or otherwise, then, at the election of Parent, a
short-form merger could be effected without any further approval of the Company
Board or the stockholders of the Company. Even if the Purchaser does not own 90%
of the outstanding Shares following consummation of the Offer, Parent or the
Purchaser could seek to purchase additional Shares in the open market or
otherwise in order to reach the 90% threshold and employ a short-form merger.
The per Share consideration paid for any Shares so acquired in open market
purchases may be greater or less than the Offer Price.
In connection with the Merger Agreement, Parent, the Purchaser and the
Company have entered into a Short Form Merger Option Agreement, dated as of
April 27, 1999 (the "Stock Option Agreement"), pursuant to which the Company
granted to the Purchaser an irrevocable option to purchase from the Company, at
the Offer Price, newly issued Shares in an amount equal to the number of Shares
(up to a maximum of 19.9% of the number of Shares outstanding) that, when added
to the number of Shares owned by the Purchaser and its affiliates immediately
following consummation of the Offer, constitutes 90% of the Shares then
outstanding on a fully diluted basis (giving effect to the issuance of such
Shares). The Stock Option Agreement is described more fully in Section 11.
Parent currently intends to effect a short-form merger, if permitted to do
so under the DGCL, pursuant to which the Purchaser will be merged with and into
the Company. See Section 12.
2
<PAGE> 5
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
THE OFFER
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension or
amendment), the Purchaser will accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not withdrawn in accordance with
Section 4. The term "Expiration Date" means 12:00 Midnight, New York City time,
on Tuesday, June 1, 1999, unless and until the Purchaser, in accordance with the
terms of the Merger Agreement, has extended the period of time during which the
Offer is open, in which event the term "Expiration Date" means the latest time
and date at which the Offer, as so extended by the Purchaser, expires. In the
Merger Agreement, Parent and the Purchaser have agreed that if all conditions to
the Purchaser's obligation to accept for payment and pay for Shares pursuant to
the Offer are not satisfied on the scheduled Expiration Date, the Purchaser may,
in its sole discretion, extend the Offer for additional periods; provided,
however, that the Purchaser may not extend the Offer beyond October 31, 1999,
without the consent of the Company.
The Offer is conditioned upon the satisfaction of the Minimum Condition,
the expiration or termination of all waiting periods imposed by the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and any foreign antitrust or competition laws or regulations, and the
other conditions set forth in Section 14. If such conditions are not satisfied
prior to the Expiration Date, the Purchaser reserves the right, subject to the
terms of the Merger Agreement and subject to complying with applicable rules and
regulations of the Commission, to (i) decline to purchase any Shares tendered in
the Offer and terminate the Offer and return all tendered Shares to the
tendering stockholders, (ii) waive any or all conditions to the Offer (except
the Minimum Condition) and, to the extent permitted by applicable law, purchase
all Shares validly tendered, (iii) extend the Offer and, subject to the right of
stockholders to withdraw Shares until the Expiration Date, retain all Shares
which have been tendered during the period or periods for which the Offer is
extended or (iv) subject to the next sentence, amend the Offer. The Merger
Agreement provides that Purchaser will not waive the Minimum Condition, decrease
the Offer Price, decrease the number of Shares sought or amend any other
condition to the Offer in any manner materially adverse to the holders of the
Shares without the written consent of the Company.
The Merger Agreement requires the Purchaser to accept for payment and pay
for all Shares validly tendered and not withdrawn pursuant to the Offer if all
conditions to the Offer are satisfied or waived on the Expiration Date. Any
extension, amendment or termination of the Offer will be followed as promptly as
practicable by public announcement thereof, the announcement in the case of an
extension to be issued no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date in accordance with
Rules 14d-4(c), 14d-6(d) and 14e-1(d) under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). As used in this Offer to Purchase, "business
day" has the meaning set forth in Rule 14d-1 under the Exchange Act. Without
limiting the obligation of the Purchaser under such Rules or the manner in which
the Purchaser may choose to make any public announcement, the Purchaser
currently intends to make announcements by issuing a press release to the Dow
Jones News Service.
If the Purchaser extends the Offer, or if the Purchaser (whether before or
after its acceptance for payment of Shares) is delayed in its purchase of, or
payment for, Shares or is unable to pay for Shares pursuant to the Offer for any
reason, then, without prejudice to the Purchaser's rights under the Offer, the
Depositary may retain tendered Shares on behalf of the Purchaser, and such
Shares may not be withdrawn except to the extent tendering stockholders are
entitled to withdrawal rights as described in Section 4. However, the ability of
the Purchaser to delay the payment for Shares which the Purchaser has accepted
for payment is limited by Rule 14e-1(c) under the Exchange Act, which requires
that a bidder pay the
3
<PAGE> 6
consideration offered or return the securities deposited by, or on behalf of,
holders of securities promptly after the termination or withdrawal of the Offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the
Exchange Act. The minimum period during which the Offer must remain open
following material changes in the terms of the Offer or information concerning
the Offer, other than a change in price or a change in the percentage of
securities sought, will depend upon the facts and circumstances then existing,
including the relative materiality of the changed terms or information. In a
public release, the Commission has stated its view that an offer must remain
open for a minimum period of time following a material change in the terms of
the Offer and that waiver of a material condition, such as the Minimum
Condition, is a material change in the terms of the Offer. The release states
that an offer should remain open for a minimum of five (5) business days from
the date a material change is first published, or sent or given to security
holders and that, if material changes are made with respect to information not
materially less significant than the offer price and the number of shares being
sought, a minimum of ten (10) business days may be required to allow adequate
dissemination and investor response. The requirement to extend the Offer will
not apply to the extent that the number of business days remaining between the
occurrence of the change and the then-scheduled Expiration Date equals or
exceeds the minimum extension period that would be required because of such
amendment. If, prior to the Expiration Date, the Purchaser increases the
consideration offered to holders of Shares pursuant to the Offer, such increased
consideration will be paid to all holders whose Shares are purchased in the
Offer whether or not such Shares were tendered prior to such increase.
The Company has provided the Purchaser with the Company's stockholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of Transmittal
will be mailed to record holders of Shares and will be furnished to brokers,
dealers, banks and similar persons whose names, or the names of whose nominees,
appear on the stockholder lists or, if applicable, who are listed as
participants in a clearing agency's security position listing, for subsequent
transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension or
amendment), the Purchaser will accept for payment and will pay for, as soon as
practicable after the Expiration Date, all Shares validly tendered prior to the
Expiration Date and not properly withdrawn in accordance with Section 4.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares properly tendered to the Purchaser
and not withdrawn, if, as and when the Purchaser gives oral or written notice to
the Depositary of the Purchaser's acceptance for payment of such Shares. Payment
for Shares accepted for payment pursuant to the Offer will be made by deposit of
the purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payment from the Purchaser
and transmitting payment to tendering stockholders. In all cases, payment for
Shares accepted for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of (i) certificates for such Shares (or a timely
Book-Entry Confirmation (as defined below) with respect thereto), (ii) a Letter
of Transmittal (or facsimile thereof), properly completed and duly executed,
with any required signature guarantees, or, in the case of a book-entry
transfer, an Agent's Message (as defined below) and (iii) any other documents
required by the Letter of Transmittal. The per Share consideration paid to any
holder of Shares pursuant to the Offer will be the highest per Share
consideration paid to any other holder of such Shares pursuant to the Offer.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE TO BE
PAID BY THE PURCHASER FOR THE SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER
OR ANY DELAY IN MAKING SUCH PAYMENT.
The Purchaser expressly reserves the right, in its sole discretion, to
delay acceptance for payment of, or payment for, Shares in order to comply in
whole or in part with any applicable law. If the Purchaser is delayed
4
<PAGE> 7
in its acceptance for payment of, or payment for, Shares or is unable to accept
for payment or pay for Shares pursuant to the Offer for any reason, then,
without prejudice to the Purchaser's rights under the Offer (including such
rights as are set forth in Sections 1 and 14) (but subject to compliance with
Rule 14e-1(c) under the Exchange Act), the Depositary may, nevertheless, on
behalf of the Purchaser, retain tendered Shares, and such Shares may not be
withdrawn except to the extent tendering stockholders are entitled to exercise,
and duly exercise, withdrawal rights as described in Section 4.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if certificates are submitted representing more Shares than are
tendered, certificates evidencing Shares not tendered or not accepted for
purchase will be returned to the tendering stockholder, or such other person as
the tendering stockholder shall specify in the Letter of Transmittal, as
promptly as practicable following the expiration, termination or withdrawal of
the Offer. In the case of Shares delivered by book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility (as defined below)
pursuant to the procedures set forth in Section 3, such Shares will be credited
to such account maintained at the Book-Entry Transfer Facility as the tendering
stockholder shall specify in the Letter of Transmittal, as promptly as
practicable following the expiration, termination or withdrawal of the Offer. If
no such instructions are given with respect to Shares delivered by book-entry
transfer, any such Shares not tendered or not purchased will be returned by
crediting the account at the Book-Entry Transfer Facility designated in the
Letter of Transmittal as the account from which such Shares were delivered.
The Purchaser reserves the right to transfer or assign, in whole or, from
time to time, in part, to one or more of its affiliates, the right to purchase
Shares tendered pursuant to the Offer, but any such transfer or assignment will
not relieve the Purchaser of its obligations under the Offer and will in no way
prejudice the rights of tendering stockholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Offer.
3. PROCEDURES FOR TENDERING SHARES.
Valid Tender. For Shares to be validly tendered pursuant to the Offer,
either (i) a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), together with any required signature guarantees, or in the
case of a book-entry transfer, an Agent's Message, and any other required
documents, must be received by the Depositary at one of its addresses set forth
on the back cover of this Offer to Purchase prior to the Expiration Date and
either certificates evidencing tendered Shares must be received by the
Depositary at one of such addresses or such Shares must be delivered to the
Depositary pursuant to the procedures for book-entry transfer set forth below
and a Book-Entry Confirmation must be received by the Depositary, in each case
prior to the Expiration Date, or (ii) the tendering stockholder must comply with
the guaranteed delivery procedures described below.
Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at The Depository Trust Company (the "Book-Entry Transfer
Facility") for purposes of the Offer within two (2) business days after the date
of this Offer to Purchase. Any financial institution that is a participant in
the Book-Entry Transfer Facility's system may make book-entry delivery of Shares
by causing the Book-Entry Transfer Facility to transfer such Shares into the
Depositary's account in accordance with such Book-Entry Transfer Facility's
procedures for such transfer. Even though delivery of Shares may be effected
through book-entry transfer into the Depositary's account at the Book-Entry
Transfer Facility, a Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or an
Agent's Message, and any other required documents must, in any case, be
transmitted to, and received by, the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase prior to the Expiration Date,
or the tendering stockholder must comply with the guaranteed delivery procedures
described below. The confirmation of a book-entry transfer of Shares into the
Depositary's account at the Book-Entry Transfer Facility as described above is
referred to herein as a "Book-Entry Confirmation." DELIVERY OF THE LETTER OF
TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY
WILL NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
5
<PAGE> 8
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against such participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE
OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (i) if the Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Section, includes any participant in
the Book-Entry Transfer Facility's system whose name appears on a security
position listing as the owner of the Shares) of Shares tendered therewith and
such registered holder has not completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" on the
Letter of Transmittal or (ii) if such Shares are tendered for the account of a
financial institution (including most commercial banks, savings and loan
associations and brokerage houses) that is a participant in the Security
Transfer Agent's Medallion Program, the New York Stock Exchange Medallion
Signature Guarantee Program or the Stock Exchange Medallion Program (each, an
"Eligible Institution" and, collectively, "Eligible Institutions"). In all other
cases, all signatures on Letters of Transmittal must be guaranteed by an
Eligible Institution. See Instructions 1 and 5 to the Letter of Transmittal. If
the certificates for Shares are registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made, or
certificates for Shares not tendered or not accepted for payment are to be
returned, to a person other than the registered holder of the certificates
surrendered, then the tendered certificates for such Shares must be endorsed or
accompanied by appropriate stock powers, in either case, signed exactly as the
name or names of the registered holders or owners appear on the certificates,
with the signatures on the certificates or stock powers guaranteed as aforesaid.
See Instructions 1 and 5 to the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or the procedures for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such stockholder's tender may be
effected if all the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser, is received
by the Depositary, as provided below, prior to the Expiration Date; and
(iii) the certificates for (or a Book-Entry Confirmation with respect
to) such Shares, together with a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message,
and any other required documents, are received by the Depositary within
three (3) trading days after the date of execution of such Notice of
Guaranteed Delivery. A "trading day" is any day on which the New York Stock
Exchange, Inc. (the "NYSE") is open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by telegram, facsimile transmission or mailed to the
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such Notice of Guaranteed Delivery.
Upon the acceptance of Shares for payment pursuant to the Offer, the valid
tender of Shares pursuant to one of the procedures described above will
constitute a binding agreement between the tendering stockholder and the
Purchaser upon the terms and subject to the conditions of the Offer.
6
<PAGE> 9
Appointment. By executing the Letter of Transmittal as set forth above
(including delivery through an Agent's Message), the tendering stockholder will
irrevocably appoint designees of Parent as such stockholder's attorneys-in-fact
and proxies in the manner set forth in the Letter of Transmittal, each with full
power of substitution, to the full extent of such stockholder's rights with
respect to the Shares tendered by such stockholder and accepted for payment by
the Purchaser and with respect to any and all non-cash dividends, distributions,
rights, other Shares or other securities issued or issuable in respect of such
Shares on or after April 27, 1999 (collectively, "Distributions"). All such
powers of attorney and proxies will be considered coupled with an interest in
the tendered Shares. Such appointment will be effective if, as and when, and
only to the extent that, the Purchaser accepts for payment Shares tendered by
such stockholder as provided herein. All such powers of attorney and proxies
will be irrevocable and will be deemed granted in consideration of the
acceptance for payment by the Purchaser of Shares tendered in accordance with
the terms of the Offer. Upon such appointment, all prior powers of attorney,
proxies and consents given by such stockholder with respect to such Shares (and
any and all Distributions) will, without further action, be revoked and no
subsequent powers of attorney, proxies, consents or revocations may be given by
such stockholder (and, if given, will not be deemed effective). The designees of
Parent will thereby be empowered to exercise all voting and other rights with
respect to such Shares (and any and all Distributions), including, without
limitation, in respect of any annual or special meeting of the Company's
stockholders (and any adjournment or postponement thereof), actions by written
consent in lieu of any such meeting or otherwise, as each such attorney-in-fact
and proxy or his substitute shall in his sole discretion deem proper. The
Purchaser reserves the right to require that, in order for Shares to be deemed
validly tendered, immediately upon the Purchaser's acceptance for payment of
such Shares, the Purchaser must be able to exercise full voting, consent and
other rights with respect to such Shares (and any and all Distributions),
including voting at any meeting of stockholders.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by the Purchaser, in its sole discretion, which
determination will be final and binding. The Purchaser reserves the absolute
right to reject any or all tenders of any Shares determined by it not to be in
proper form or the acceptance for payment of which, or payment for which, may,
in the opinion of the Purchaser's counsel, be unlawful. The Purchaser also
reserves the absolute right, in its sole discretion, subject to the provisions
of the Merger Agreement, to waive any defect or irregularity in any tender of
Shares of any particular stockholder, whether or not similar defects or
irregularities are waived in the case of other stockholders. No tender of Shares
will be deemed to have been validly made until all defects or irregularities
relating thereto have been cured or waived. None of the Purchaser, Parent, the
Dealer Manager, the Depositary, the Information Agent or any other person will
be under any duty to give notification of any defects or irregularities in
tenders or incur any liability for failure to give any such notification.
Subject to the terms of the Merger Agreement, the Purchaser's interpretation of
the terms and conditions of the Offer in this regard (including the Letter of
Transmittal and the instructions thereto) will be final and binding.
Backup Withholding. In order to avoid "backup withholding" of federal
income tax on payments of the Offer Price pursuant to the Offer, a stockholder
surrendering Shares in the Offer must, unless an exemption applies, provide the
Depositary with such stockholder's correct taxpayer identifying number ("TIN")
on a Substitute Form W-9 and certify under penalty of perjury that such TIN is
correct and that such stockholder is not subject to backup withholding. Certain
stockholders (including, among others, all corporations and certain foreign
individuals and entities) are not subject to backup withholding. If a
stockholder does not provide its correct TIN or fails to provide the
certifications described above, the Internal Revenue Service ("IRS") may impose
a penalty on such stockholder and payment of the Offer Price to such stockholder
pursuant to the Offer may be subject to backup withholding of 31% of the amount
payable to such stockholder. All stockholders surrendering Shares pursuant to
the Offer should complete and sign the main signature form and the Substitute
Form W-9 included as part of the Letter of Transmittal to provide the
information and certification necessary to avoid backup withholding (unless an
applicable exemption exists and is proven in a manner satisfactory to the
Purchaser and the Depositary). Noncorporate foreign stockholders should complete
and sign the main signature form and a Form W-8, Certificate of Foreign Status,
a copy of which may be obtained from the Depositary, in order to avoid backup
withholding. See Instruction 10 to the Letter of Transmittal.
7
<PAGE> 10
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4 or as provided by applicable
law, tenders of Shares are irrevocable. Shares tendered pursuant to the Offer
may be withdrawn pursuant to the procedures set forth below at any time prior to
the Expiration Date and, unless theretofore accepted for payment and paid for by
Purchaser pursuant to the Offer, may also be withdrawn at any time after July 2,
1999.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
such notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder of the Shares to be withdrawn, if different from the name of
the person who tendered the Shares. If certificates evidencing Shares to be
withdrawn have been delivered or otherwise identified to the Depositary, then,
prior to the physical release of such certificates, the serial numbers shown on
such certificates must be submitted to the Depositary and, unless such Shares
have been tendered by an Eligible Institution, the signatures on the notice of
withdrawal must be guaranteed by an Eligible Institution. If Shares have been
delivered pursuant to the procedures for book-entry transfer as set forth in
Section 3, any notice of withdrawal must also specify the name and number of the
account at the Book-Entry Transfer Facility to be credited with the withdrawn
Shares and otherwise comply with such Book-Entry Transfer Facility's procedures.
Withdrawals of tendered Shares may not be rescinded, and any Shares
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. However, withdrawn Shares may be re-tendered at any time prior to the
Expiration Date by again following one of the procedures described in Section 3.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination will be final and binding. None of the
Purchaser, Parent, the Dealer Manager, the Depositary, the Information Agent or
any other person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure to
give any such notification.
5. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.
The following discussion is a summary of certain material United States
federal income tax consequences of the Offer and the Merger to holders of Shares
who hold the Shares "as capital assets" within the meaning of Section 1221 of
the Internal Revenue Code of 1986, as amended (the "Code"), which generally
includes property held for investment. The discussion set forth below is for
general information only and may not apply to certain categories of holders of
Shares subject to special treatment under the Code, such as foreign holders and
holders who acquired such Shares pursuant to the exercise of employee stock
options or otherwise as compensation. This summary is based upon laws,
regulations, rulings and interpretations currently in effect, all of which are
subject to change, retroactively or prospectively.
The receipt of cash for Shares pursuant to the Offer or the Merger will be
a taxable transaction for United States federal income tax purposes. In general,
a holder who sells Shares pursuant to the Offer, or who receives cash in
exchange for Shares pursuant to the Merger, will recognize gain or loss for
federal income tax purposes equal to the difference, if any, between the amount
of cash received and the holder's adjusted tax basis in the Shares sold pursuant
to the Offer or surrendered for cash pursuant to the Merger.
The gain or loss recognized by a holder of Shares pursuant to the Offer or
the Merger will be capital gain or loss and if, as of the date of the tender
pursuant to the Offer or surrender for cash pursuant to the Merger, as the case
may be, the holder has held the Shares surrendered for more than one year, such
capital gain will be long-term. The amount of any gain or loss recognized and
its character as short-term or long-term will be calculated and determined
separately for each identifiable block of Shares tendered pursuant to the Offer
or surrendered for cash pursuant to the Merger.
Unless a stockholder complies with certain reporting and/or certification
procedures or is an exempt recipient under applicable provisions of the Code and
Treasury Regulations promulgated thereunder, such stockholder may be subject to
a withholding tax of 31% with respect to any cash payments received pursuant
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<PAGE> 11
to the Offer and the Merger. See the discussion regarding backup withholding in
Section 3. Foreign stockholders should consult with their own tax advisors
regarding withholding taxes in general.
THE ABOVE DISCUSSION MAY NOT APPLY TO CERTAIN CATEGORIES OF HOLDERS SUBJECT
TO SPECIAL TREATMENT UNDER THE CODE, SUCH AS FOREIGN STOCKHOLDERS AND
STOCKHOLDERS WHOSE SHARES WERE ACQUIRED PURSUANT TO THE EXERCISE OF ANY EMPLOYEE
STOCK OPTION OR OTHERWISE AS COMPENSATION. STOCKHOLDERS ARE URGED TO CONSULT
THEIR OWN TAX ADVISORS TO DETERMINE THE SPECIFIC TAX CONSEQUENCES OF THE OFFER
AND THE MERGER, INCLUDING ANY FEDERAL, STATE, LOCAL OR OTHER TAX CONSEQUENCES
(INCLUDING ANY TAX RETURN FILING OR OTHER TAX REPORTING REQUIREMENTS) OF THE
OFFER AND THE MERGER.
6. PRICE RANGE OF THE SHARES; DIVIDENDS.
The Shares are traded on the NYSE under the symbol "LAW". The following
table sets forth, for each of the fiscal quarters indicated, the high and low
sales prices per Share on the NYSE and the amount of cash dividends paid per
Share, all as reported in published financial sources.
LAWTER INTERNATIONAL, INC.
<TABLE>
<CAPTION>
COMMON STOCK
----------------------------
HIGH LOW DIVIDENDS
---- --- ---------
<S> <C> <C> <C>
Fiscal Year Ended December 31, 1997
First Quarter............................................. $12 3/4 $11 1/4 $0.10
Second Quarter............................................ 12 5/8 10 5/8 0.10
Third Quarter............................................. 14 1/8 12 1/8 0.10
Fourth Quarter............................................ 12 1/2 10 5/8 0.10
Fiscal Year Ended December 31, 1998
First Quarter............................................. $12 1/2 $10 3/8 $0.10
Second Quarter............................................ 11 7/16 9 3/16 0.10
Third Quarter............................................. 11 7 0.10
Fourth Quarter............................................ 11 5/8 6 1/8 0.10
Fiscal Year Ended December 31, 1999
First Quarter............................................. $11 5/8 $ 6 $0.10
Second Quarter (through May 3, 1999)...................... 12 1/16 6 11/16 --
</TABLE>
On April 27, 1999, the last full trading day prior to the public
announcement of the execution of the Merger Agreement by the Company, Parent and
the Purchaser, the last reported closing sales price of the Shares on the NYSE
was $8 15/16 per Share. On May 3, 1999, the last full trading day prior to the
commencement of the Offer, the last reported closing sales price of the Shares
on the NYSE was $12 per Share. STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET
QUOTATION FOR THE SHARES.
Under the terms of the Merger Agreement, the Company is not permitted to
declare or pay dividends with respect to the Shares without the prior written
consent of Parent and Parent does not intend to consent to any such declaration
or payment.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; NYSE LISTING;
EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS.
Market for the Shares. The purchase of Shares by the Purchaser pursuant to
the Offer will reduce the number of Shares that might otherwise trade publicly,
could reduce the number of holders of Shares and, depending upon the number of
Shares so purchased, could adversely affect the liquidity and market value of
the remaining Shares held by the public.
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<PAGE> 12
NYSE Listing. The Shares are listed on the NYSE. Depending upon the
aggregate market value and the per share price of any Shares not purchased
pursuant to the Offer, the Shares may no longer meet the requirements for
continued listing on the NYSE. According to the NYSE's published guidelines, the
NYSE would consider delisting the Shares if, among other things, the number of
record holders of at least 100 or more Shares should fall below 1,200, the
number of publicly held Shares (exclusive of holdings of officers and directors
of the Company and their immediate families and other concentrated holdings of
10% or more (the "NYSE Excluded Holdings")) should fall below 600,000, or the
aggregate market value of the publicly held Shares (exclusive of the NYSE
Excluded Holdings) should fall below $5,000,000.
If the NYSE were to delist the Shares, the market therefor could be
adversely affected. It is possible that such Shares would continue to trade on
other securities exchanges or in the over-the-counter market, and that price
quotations would be reported by such exchanges or through the Nasdaq or other
sources. The extent of the public market for the Shares and the availability of
such quotations would, however, depend upon the number of stockholders and/or
the aggregate market value of such Shares remaining at such time, the interest
in maintaining a market in such Shares on the part of securities firms, the
possible termination of registration of such Shares under the Exchange Act and
other factors. The Purchaser cannot predict whether the reduction in the number
of Shares that might otherwise trade publicly would have an adverse or
beneficial effect on the market price for, or marketability of, the Shares or
whether it would cause future market prices to be greater or less than the Offer
Price.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Registration of the Shares under the Exchange Act may be
terminated upon application of the Company to the Commission if the Shares are
neither listed on a national securities exchange nor held by 300 or more holders
of record. Termination of registration of the Shares under the Exchange Act
would substantially reduce the information required to be furnished by the
Company to its stockholders and to the Commission and would make certain
provisions of the Exchange Act no longer applicable to the Company, such as the
short-swing profit recovery provisions of Section 16(b), the requirement of
furnishing a proxy statement pursuant to Section 14(a) in connection with
stockholders' meetings and the related requirement of furnishing an annual
report to stockholders and the requirements of Rule 13e-3 under the Exchange Act
with respect to "going private" transactions. Furthermore, the ability of
"affiliates" of the Company and persons holding "restricted securities" of the
Company to dispose of such securities pursuant to Rule 144 or Rule 144A
promulgated under the Securities Act of 1933, as amended (the "Securities Act"),
may be impaired or eliminated.
Margin Regulations. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which status has the effect, among other things, of
allowing brokers to extend credit on the collateral of the Shares. Depending
upon factors similar to those described above regarding stock exchange listing
and market quotations, it is possible that, following the Offer, the Shares
would no longer constitute "margin securities" for the purposes of the margin
regulations of the Federal Reserve Board and therefore could no longer be used
as collateral for loans made by brokers. In addition, if registration of the
Shares under the Exchange Act were terminated, the Shares would no longer
constitute "margin securities."
The Purchaser currently intends to seek delisting of the Shares from the
NYSE and the termination of the registration of the Shares under the Exchange
Act as soon after the completion of the Offer as the requirements for such
delisting and termination are met. If the NYSE listing and the Exchange Act
registration of the Shares are not terminated prior to the Merger, then the
Shares will be delisted from the NYSE and the registration of the Shares under
the Exchange Act will be terminated following the consummation of the Merger.
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
The information concerning the Company contained in this Offer to Purchase,
including financial information, has been furnished by the Company or has been
taken from or based upon publicly available documents and records on file with
the Commission and other public sources. None of Parent, the Purchaser, the
Dealer Manager, the Depositary or the Information Agent assumes any
responsibility for the accuracy or
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<PAGE> 13
completeness of the information concerning the Company contained in such
documents and records or for any failure by the Company to disclose events which
may have occurred or may affect the significance or accuracy of any such
information but which are unknown to Parent, the Purchaser, the Dealer Manager,
the Depositary or the Information Agent.
The Company is a leading supplier of speciality polymers to the graphic
arts industry. The Company produces printing ink vehicles, resins and slip
additives, as well as additives for coatings and adhesives. Printing ink
vehicles, which are fluid and gelled compositions that allow lithographic and
letterpress printing inks to apply color and coatings to paper, plastic, metal
and other surfaces, influence critical production issues such as print quality,
gloss, drying speed, adhesion, rub resistance and press speed. The Company's
synthetic and hydrocarbon resins are used in the production of adhesives, liquid
printing inks and printing ink vehicles, rubber compounds and paints and
coatings to improve durability, chemical resistance, appearance, adhesion and
drying speed. The Company's products are sold worldwide to ink manufacturers and
other customers involved in developing specialty inks, paints, coatings and
adhesives. The Company has more than 600 employees in ten countries.
The Company is a Delaware corporation with its principal executive offices
at One Terra Way, 8601 95th Street, Pleasant Prairie, Wisconsin 53158. The
telephone number of the Company is (414) 947-7300.
Selected Financial Information. Set forth below is selected consolidated
financial information with respect to the Company, excerpted or derived from the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998
(the "Company 10-K"), as filed with the Commission pursuant to the Exchange Act.
Parent and the Purchaser make no representation as to the accuracy of such
financial information. More comprehensive financial information is included in
the Company 10-K and in other documents filed by the Company with the
Commission. The following summary is qualified in its entirety by reference to
the Company 10-K and such other documents, including the financial information
and related notes contained therein. The Company 10-K and such other documents
may be inspected and copies may be obtained from the Commission or the NYSE in
the manner set forth below.
LAWTER INTERNATIONAL, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
INCOME STATEMENT DATA:
Net Sales................................................. $212,843 $206,539 $193,814
Operating Income.......................................... 36,349 26,282 35,640
Net Earnings.............................................. 21,465 37,326 28,775
Net Earnings per Share.................................... .59 .82 .64
</TABLE>
<TABLE>
<CAPTION>
AT DECEMBER 31,
------------------------------
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Total Assets.............................................. $254,250 $276,184 $293,123
Net Working Capital....................................... 76,709 117,961 74,410
Long-term Obligations..................................... 129,050 29,050 29,050
Stockholders' Equity...................................... 33,524 161,357 145,615
</TABLE>
Available Information. The Company is subject to the information and
reporting requirements of the Exchange Act and, in accordance therewith, is
required to file reports and other information with the Commission relating to
its business, financial condition and other matters. Information, as of
particular dates, concerning the Company's directors and officers, their
remuneration, stock options granted to them, the
11
<PAGE> 14
principal holders of the Company's securities and any material interests of such
persons in transactions with the Company is required to be disclosed in proxy
statements distributed to the Company's stockholders and filed with the
Commission. These reports, proxy statements and other information should be
available for inspection at the public reference facilities of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of
the Commission located at Seven World Trade Center, Suite 1300, New York, NY
10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, IL
60661. Copies of these materials should be obtainable by mail, upon payment of
the Commission's customary fees, by writing to the Commission's principal office
at 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission also maintains
a website on the Internet at http://www.sec.gov that contains reports, proxy
statements and other information relating to the Company. Reports, proxy
statements and other information concerning the Company should also be available
for inspection at the offices of the NYSE, 20 Broad Street, New York, New York
10005.
9. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER.
Parent and the Purchaser. Parent, a Delaware corporation, is a global
chemical company with a broad portfolio of plastic, chemical, and fiber
products. Parent manufactures and sells polyester plastics such as polyethylene
terephthalate sold under the trademark EASTAPAK polymers, a plastic widely used
in beverage and food containers, and also manufactures and sells coatings and
paint raw materials, industrial and fine chemicals, and acetate tow. In 1998,
Parent had sales of $4.481 billion, operating earnings of $434 million and net
earnings of $249 million.
Parent began business in 1920 for the purpose of producing chemicals for
Eastman Kodak Company's photographic business. As of December 31, 1993, Parent
became an independent entity when Eastman Kodak Company spun off its chemical
business. Parent is one of the largest chemical producers in the United States
and a leader in the application of several manufacturing technologies. Parent
pioneered the application of coal gasification technology for the production of
chemicals (also referred to as "chemicals from coal technology") and currently
operates one of the largest coal gasification facilities in the United States,
thereby reducing Parent's dependence on petrochemicals in the manufacture of
acetate tow, certain plastics and other chemicals. Parent is also a leader in
the manufacture of oxo chemicals that are used in the production of numerous
coatings and resin intermediates, the manufacture of fine chemicals used in
photographic and other custom chemicals, and the application of advanced
environmental waste management practices for chemical manufacturing operations.
Parent is a world leader in production and recycling of a wide variety of
polyester plastics, including polyethylene terephthalate and other flexible
packaging materials.
The Purchaser is a newly incorporated Delaware corporation organized in
connection with the Offer and the Merger and has not carried on any significant
activities other than in connection with the Offer and the Merger. All of the
outstanding capital stock of the Purchaser is owned directly by Parent. Until
immediately prior to the time the Purchaser purchases Shares pursuant to the
Offer, it is not anticipated that the Purchaser will have any significant assets
or liabilities or engage in any significant activities other than those incident
to its formation and capitalization and the transactions contemplated by the
Offer and the Merger.
The principal offices of Parent and the Purchaser are located at 100 N.
Eastman Road, Kingsport, Tennessee 37660. The telephone number of Parent and the
Purchaser is (423) 229-2000.
The name, citizenship, business address, principal occupation or employment
and five-year employment history for each of the directors and the executive
officers of Parent and the Purchaser are set forth in Schedule I hereto.
Except as set forth in this Offer to Purchase, neither Parent, the
Purchaser nor any persons controlling Parent or the Purchaser, nor to the best
knowledge of Parent or the Purchaser, any of the persons listed on Schedule I
hereto or any associate or majority owned subsidiary of such persons,
beneficially owns any equity security of the Company, and none of Parent or the
Purchaser, or to the best of knowledge of Parent or the Purchaser, any of the
other persons or entities referred to above, or any of the respective directors,
executive officers or subsidiaries of any of the foregoing has effected any
transaction in any equity security of the Company during the past sixty (60)
days.
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<PAGE> 15
Except as set forth in this Offer to Purchase, neither Parent, the
Purchaser nor any persons controlling Parent or the Purchaser, nor to the best
knowledge of Parent or the Purchaser, any of the persons listed on Schedule I
hereto, has any contract, arrangement, understanding or relationship with any
other person with respect to any securities of the Company, including, but not
limited to, any contract, arrangement, understanding or relationship concerning
the transfer or the voting of any securities of the Company, joint ventures,
loan or option arrangements, puts or calls, guarantees of loans, guarantees
against loss or the giving or withholding of proxies.
Except as set forth below or as otherwise set forth in this Offer to
Purchase, neither Parent, the Purchaser nor any persons controlling Parent or
the Purchaser, nor to the best knowledge of Parent or the Purchaser, any of the
persons listed on Schedule I hereto, has had, since January 1, 1996, any
business relationships or transactions with the Company or any of its executive
officers, directors or affiliates that would be required to be reported under
the rules of the Commission. Except as set forth in this Offer to Purchase,
since January 1, 1996 there have been no contacts, negotiations or transactions
between Parent, the Purchaser, their respective subsidiaries, any persons
controlling Parent or the Purchaser or, to the best knowledge of Parent or the
Purchaser, any of the persons listed on Schedule I hereto, on the one hand, and
the Company or its executive officers, directors or affiliates, on the other
hand, concerning a merger, consolidation or acquisition, tender offer or other
acquisition of securities, election of directors or a sale or other transfer of
a material amount of assets. See Section 11 -- "Background of the Offer; Purpose
of the Offer and the Merger; the Merger Agreement and Certain Other Agreements."
In the ordinary course of business, Parent and the Company have entered
into transactions whereby Parent has sold certain of its products to the
Company, aggregating approximately $4.8 million since January 1996.
As previously reported in Parent's Form 10-Q for the quarterly period ended
September 30, 1998 and Form 10-K for the fiscal year ended December 31, 1998, on
September 30, 1998 Parent entered into a voluntary plea agreement with the
Department of Justice and agreed to pay an $11 million fine to resolve a charge
brought against it for violation of Section One of the Sherman Act. Under the
agreement, Parent entered a plea of guilty to one count of price-fixing for
sorbates, a class of food preservatives, from January 1995 through June 1997.
The plea agreement was approved by the United States District Court for the
Northern District of California in San Francisco on October 21, 1998. Parent
recognized the entire fine in third quarter 1998 and is paying the fine in
installments over a period of five years.
Except as set forth above, during the last five years, neither Parent, the
Purchaser nor any persons controlling Parent or the Purchaser, nor, to the best
knowledge of Parent or the Purchaser, any of the persons listed on Schedule I
hereto, (i) has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors), or (ii) was a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction as a result of
which any such person was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting activities subject to, federal or
state securities laws or finding any violation of such laws.
Available Information. Parent is subject to the information and reporting
requirements of the Exchange Act and, in accordance therewith, is required to
file reports and other information with the Commission relating to its business,
financial condition and other matters. Information, as of particular dates,
concerning Parent's directors and officers, their remuneration, stock options
granted to them, the principal holders of Parent's securities and any material
interests of such persons in transactions with Parent is required to be
disclosed in proxy statements distributed to Parent's stockholders and filed
with the Commission. These reports, proxy statements and other information
should be available for inspection at the public reference facilities of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
regional offices of the Commission located at Seven World Trade Center, Suite
1300, New York, NY 10048 and Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, IL 60661. Copies of these materials should be obtainable by mail,
upon payment of the Commission's customary fees, by writing to the Commission's
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission also maintains a website at http://www.sec.gov that contains reports,
proxy statements and other information relating to Parent.
13
<PAGE> 16
Reports, proxy statements and other information concerning Parent should also be
available at the offices of the NYSE, 20 Broad Street, New York, NY 10005.
10. SOURCE AND AMOUNT OF FUNDS.
The Offer is not conditioned upon any financing arrangements. The total
amount of funds required by the Purchaser to purchase the maximum number of
Shares pursuant to the Offer is approximately $433 million. The Purchaser will
obtain all such funds from Parent in the form of capital contributions and/or
loans. Parent will provide such funds through a combination of its cash on hand
and short-term borrowings.
11. BACKGROUND OF THE OFFER; PURPOSE OF THE OFFER AND THE MERGER;
THE MERGER AGREEMENT AND CERTAIN OTHER AGREEMENTS.
Contacts with the Company; Background of the Offer.
Parent continually evaluates and considers other businesses of varying
sizes as potential strategic partners and candidates for acquisition. In
November 1997 and again during the first quarter of 1998, Parent was contacted
by SBC Warburg Inc. with respect to the potential purchase of a block of Shares
from the Estate of Daniel J. Terra, one of the founders of the Company. Although
Parent conducted a preliminary analysis of the strategic benefits of a
significant but minority equity investment in the Company, it determined not to
proceed with such an investment at that time.
In the course of periodically reviewing potential acquisition candidates,
Parent continued to analyze the potential benefits of entering into a business
combination with the Company. In August 1998, Parent retained Merrill Lynch to
provide financial advice regarding a potential business combination with the
Company. On September 27, 1998, the Board of Directors of Parent (the "Parent
Board") formally authorized Parent to pursue negotiations with the Company to
enter into a possible transaction, subject to final review and approval of the
Parent Board.
In mid-October 1998, Earnest W. Deavenport, Jr., Chairman of the Board and
Chief Executive Officer of Parent, contacted John P. O'Mahoney, Chairman of the
Board and Chief Executive Officer of the Company, regarding the possibility of a
meeting to learn more about the Company. On October 19, 1998, Mr. Deavenport,
Allan R. Rothwell, Senior Vice President and Chief Financial Officer of Parent,
and Bruce E. Moore, Vice President and General Manager of Coatings, Inks &
Resins of Parent, met with Mr. O'Mahoney and the Company's representatives at
the Company executive offices in Pleasant Prairie, Wisconsin. At that meeting,
Parent expressed its interest in entering into a business combination
transaction with the Company.
As a result of this meeting, Parent and the Company agreed to enter into a
confidentiality agreement, with Parent executing the confidentiality agreement
on October 30, 1998 and the Company executing the confidentiality agreement on
November 3, 1998.
On November 3, 1998, at Parent's executive offices in Kingsport, Tennessee,
Messrs. Rothwell and Moore, together with other members of senior management of
Parent and Parent's financial advisor, met with Mr. O'Mahoney, Mark W. Joslin,
Chief Financial Officer and Treasurer of the Company, Jack Baarends, Vice
President of the Company, and other Company representatives. This meeting
continued to be exploratory in nature, with the parties discussing in general
terms the strategic benefits of Parent's proposed acquisition of the Company.
Members of management of Parent and the Company met again on November 20, 1998,
and held discussions throughout December 1998.
Members of management of Parent and the Company, together with their
respective advisors, met on January 7, 1999 and Messrs. Rothwell and O'Mahoney
met again on January 25, 1999. None of these contacts led to any agreements or
understandings regarding an acquisition of the Company by Parent and on February
4, 1999, Parent determined to terminate negotiations regarding Parent's
potential acquisition of the Company.
14
<PAGE> 17
In late March 1999, Mr. O'Mahoney informed Mr. Rothwell that other
companies had expressed interest in acquiring the Company and inquired as to
whether Parent would again be interested in entering into a business combination
with the Company. As a result of this conversation, on April 1, 1999, Messrs.
Rothwell, Moore and Prentice McKibben, Business Development Director for Parent,
met with Mr. O'Mahoney to renew negotiations regarding a business combination
transaction.
Throughout the next week, the parties engaged in a series of conversations.
On April 6, 1999, Mr. Deavenport sent a letter to Mr. O'Mahoney submitting a
non-binding proposal to acquire, subject to Parent's due diligence
investigation, all of the Company's issued and outstanding Shares at a price in
the range of $12.25 to $12.75 per Share. Following conversations between Messrs.
Rothwell and O'Mahoney, on April 7, 1999, Mr. Deavenport sent another letter to
Mr. O'Mahoney submitting a non-binding proposal to acquire, subject to Parent's
due diligence investigation, all of the Company's issued and outstanding Shares,
this time at a price in the range of $12.50 to $12.75 per Share.
On April 8, 1999, Parent, its financial advisor and independent auditors
met with the Company and its outside legal counsel and commenced Parent's due
diligence investigation. Parent expanded its due diligence activities to include
the world-wide operations of the Company, and engaged in due diligence until
execution of the Merger Agreement. From April 10 through April 12, Messrs.
Rothwell, Moore and O'Mahoney continued discussions regarding the terms of
Parent's proposed acquisition of the Company, with Parent's representatives
informing Mr. O'Mahoney that after due diligence conducted thus far Parent was
then considering a price in the range of $12.00 to $12.25 per Share.
On April 13, 1999, Messrs. Rothwell and O'Mahoney discussed a non-binding
proposal to acquire, still subject to completion of ongoing due diligence, all
of the Company's issued and outstanding Shares at a price in the range of $12.25
to $12.50 per Share.
On April 19, 1999, outside legal counsel to Parent and the Purchaser
provided initial drafts of the Merger Agreement and the Stock Option Agreement
to the Company and its outside legal counsel. During the period from April 19,
1999 through April 27, 1999, the parties conducted negotiations with respect to
the Merger Agreement and the Stock Option Agreement.
On April 24, 1999, following Parent's due diligence investigation, Messrs.
Rothwell, Moore and McKibben conducted discussions with Mr. O'Mahoney resulting
in a tentative agreement on a price of $12.25 per Share, subject to satisfactory
completion of negotiations with respect to the Merger Agreement and the Stock
Option Agreement.
At a meeting of the Parent Board, held on April 27, 1999, the Parent Board
approved and adopted the Merger Agreement and the transactions contemplated
thereby, including the Offer and the Merger, and the Stock Option Agreement.
At a meeting of the Company Board held on April 27, 1999, the Company Board
unanimously approved and adopted the Merger Agreement and the transactions
contemplated thereby, including the Offer and the Merger, and the Stock Option
Agreement, and determined that the terms of the Offer and the Merger are fair
to, and in the best interests of, the holders of the Shares, and unanimously
recommended that stockholders of the Company accept the Offer and tender their
Shares. At the Company Board meeting, ABN AMRO Incorporated delivered to the
Company Board its opinion to the effect that, as of such date and based upon and
subject to certain matters and assumptions stated therein, the consideration to
be received by the holders of Shares pursuant to the Offer and under the terms
of the Merger Agreement is fair to such holders from a financial point of view.
Following the approval of the Company Board, on April 27, 1999, Parent, the
Purchaser and the Company executed and delivered the Merger Agreement and on
April 28, 1999, they issued a press release announcing the execution of the
Merger Agreement and the transactions contemplated thereby.
On May 4, 1999, pursuant to the terms of the Merger Agreement, the
Purchaser and Parent commenced the Offer.
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<PAGE> 18
Purpose of the Offer and the Merger.
The purpose of the Offer and the Merger is to enable Parent to acquire
control of, and the entire equity interest in, the Company. Upon consummation of
the Merger, the Company will become a wholly owned subsidiary of Parent. The
Offer is being made pursuant to the Merger Agreement and is intended to increase
the likelihood that the Merger will be effected.
Stockholders of the Company who sell their Shares in the Offer will cease
to have any equity interest in the Company and any right to participate in its
earnings and future growth. If the Merger is consummated, non-tendering
stockholders will no longer have an equity interest in the Company and instead
will have only the right to receive cash consideration pursuant to the Merger
Agreement or to exercise statutory appraisal rights under Section 262 of the
DGCL. See Section 12. Similarly, after selling their Shares in the Offer or the
subsequent Merger, stockholders of the Company will not bear the risk of any
decrease in the value of the Company.
The primary benefits of the Offer and the Merger to the stockholders of the
Company are that such stockholders are being afforded an opportunity to sell all
of their Shares for cash at a price which represents a premium of approximately
37% over the closing sales price of the Shares on April 27, 1999, the last full
trading day prior to the initial public announcement that the Company, the
Purchaser and Parent had executed the Merger Agreement.
MERGER AGREEMENT
The following is a summary of certain provisions of the Merger Agreement.
This summary is not a complete description of the terms and conditions of the
Merger Agreement and is qualified in its entirety by reference to the full text
of the Merger Agreement, a copy of which is filed with the Commission as an
exhibit to the Tender Offer Statement on Schedule 14D-1 filed by Parent and the
Purchaser with the Commission (the "Schedule 14D-1"). Capitalized terms not
otherwise defined below shall have the meanings set forth in the Merger
Agreement. The Merger Agreement may be examined, and copies obtained, at the
places and in the manner as set forth in Section 9 of this Offer to Purchase.
The Offer. The Merger Agreement provides that the Purchaser will commence
the Offer and that, upon the terms and subject to the satisfaction or waiver of
the conditions of the Offer, the Purchaser will purchase all Shares validly
tendered pursuant to the Offer. The obligation of the Purchaser to accept for
payment and pay for any Shares validly tendered and not withdrawn prior to the
expiration of the Offer is conditioned upon satisfaction of the Minimum
Condition and the satisfaction or waiver of the conditions described in Annex A
to the Merger Agreement. The Merger Agreement provides that the Purchaser may
not amend or waive the Minimum Condition, or decrease the Offer Price or the
number of Shares sought, or amend any other condition of the Offer in any manner
adverse to the holders of Shares without the written consent of the Company.
Notwithstanding the foregoing provisions, if on the initial scheduled expiration
of the Offer (as it may be extended), all conditions to the Offer have not been
satisfied or waived, the Offer may be extended from time to time until October
31, 1999. In addition, the Offer Price may be increased and the Offer may be
extended to the extent required by law in connection with such increase, in each
case without the consent of the Company.
Designation of Directors. The Merger Agreement provides that, promptly
upon the purchase of and payment for Shares by Parent or any of its subsidiaries
which represent at least a majority of the outstanding Shares (on a fully
diluted basis), Parent will be entitled to designate such number of directors,
rounded up to the next whole number, on the Company Board so that the percentage
of Parent's nominees on the Company Board equals the percentage of outstanding
Shares beneficially owned by Parent, the Purchaser and their affiliates. The
Company will, upon request of Parent, use its best efforts promptly either to
increase the size of the Company Board or to secure the resignations of
incumbent directors, or both, and cause Parent's designees to be so elected or
appointed to the Company Board. Notwithstanding the foregoing, until the
effective time of the Merger (the "Effective Time"), the Company will use its
reasonable efforts to retain as members of the Company Board at least two
directors who were directors of the Company on the date the Merger Agreement was
executed; provided, that, subsequent to the purchase of and payment for Shares
pursuant to the Offer,
16
<PAGE> 19
Parent will always have its designees represent at least a majority of the
entire Company Board. The Company's obligation to elect or appoint Parent's
designees to the Company Board is subject to compliance with Section 14(f) of
the Exchange Act and Rule 14f-1 promulgated thereunder. Following the election
of Parent's designees to the Company Board, any amendment of the Merger
Agreement, any termination of the Merger Agreement by the Company, any extension
of time for performance of any of the obligations of Parent or the Purchaser, or
any waiver of any condition or any of the Company's rights thereunder may be
effected only by the action of a majority of the directors of the Company then
in office who were directors on the date of the Merger Agreement, which action
will be deemed to constitute the action of the full Company Board; provided,
that, if there are no such directors, such actions may be effected by the
majority vote of the entire Company Board, and provided, further, that if there
are no such directors, the Merger Agreement may not be amended to reduce the
Merger Consideration to be less than the Offer Price or otherwise amended in a
manner materially adverse to the holders of Shares other than Parent and the
Purchaser.
The Merger. The Merger Agreement provides that, subject to the terms and
conditions thereof, the Purchaser will be merged with and into the Company, with
the Company continuing as the Surviving Corporation and a wholly owned
Subsidiary of Parent. At Parent's election, the Merger may be restructured so
that the Company is merged with and into Parent or any other direct or indirect
Subsidiary of Parent or so that any direct or indirect Subsidiary of Parent
other than the Purchaser is merged with and into the Company. At the Effective
Time, each issued and outstanding Share (other than Shares owned by Parent, the
Purchaser or any other wholly owned Subsidiary of Parent, Shares owned by the
Company as treasury stock and Shares held by holders who perfect any available
dissenters rights under the DGCL) will be converted into the right to receive
the Offer Price, without interest thereon, and each issued and outstanding share
of common stock of the Purchaser will be converted into and become one fully
paid and nonassessable share of common stock of the Surviving Corporation.
Treatment of Options. The Merger Agreement provides that Parent and the
Company will take all actions necessary so that, as of the Effective Time, each
outstanding option to purchase Shares which has been granted under the Company's
stock option plans, whether or not then vested or exercisable, will be
cancelled. In consideration for such cancellation, Parent will, or will cause
the Surviving Corporation to, pay to the holder of each option to purchase
Shares, an amount equal to the product of (A) the excess, if any, of the Offer
Price over the per share exercise price thereof and (B) the number of Shares
subject to such option. The Merger Agreement provides that the Company will take
all actions necessary so that, as of the Effective Time, all plans, programs or
arrangements of the Company providing for the issuance or grant of options or
other interests in the capital stock of the Company will be terminated.
Conditions. The respective obligations of each party to effect the Merger
are subject to the satisfaction on or prior to the closing of the Merger, of
each of the following conditions: (a) the Merger Agreement and the Merger have
been approved and adopted by the requisite vote of the holders of Shares if
required by the DGCL in order to consummate the Merger; (b) no statute, rule,
order, decree or regulation has been enacted or promulgated by any Governmental
Entity of competent jurisdiction which prohibits the consummation of the Merger
and all foreign or domestic governmental consents, orders and approvals required
for the consummation of the Merger and the transactions contemplated by the
Merger Agreement have been obtained and are in effect at the Effective Time; (c)
there is no order or injunction of a foreign or United States federal or state
court or other governmental authority of competent jurisdiction in effect
precluding, restraining, enjoining or prohibiting consummation of the Merger;
and (d) Parent, the Purchaser or their affiliates have purchased Shares pursuant
to the Offer.
Stockholders' Meeting. Pursuant to the Merger Agreement, the Company will,
if required by applicable law in order to consummate the Merger, (i) duly call,
give notice of, convene and hold a special meeting of its stockholders as soon
as practicable following the acceptance for payment and purchase of Shares by
the Purchaser pursuant to the Offer for the purpose of considering and taking
action upon the Merger Agreement; (ii) prepare and file with the Commission a
preliminary proxy or information statement relating to the Merger and the Merger
Agreement and will use its best efforts to cause a definitive Proxy Statement to
be mailed to its stockholders; (iii) include in the Proxy Statement the
recommendation of the Company Board that stockholders of the Company vote in
favor of the approval of the Merger and the adoption of the Merger
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Agreement; and (iv) use its best efforts to solicit from holders of Shares
proxies in favor of the Merger and take all other action necessary to secure any
stockholder approval required by the DGCL to effect the Merger. In the event
that Parent, the Purchaser or any other Subsidiary of Parent acquires at least
90% of the outstanding Shares, pursuant to the Offer, exercise of the option
granted pursuant to the Stock Option Agreement or otherwise, the parties will
take all necessary and appropriate action to cause the Merger to become
effective as soon as practicable after such acquisition, without a meeting of
the Company's stockholders, in accordance with the DGCL.
Representations and Warranties. The Merger Agreement contains various
representations and warranties of the parties thereto, including representations
by the Company as to, among other things (i) organization, good standing and
Subsidiaries, (ii) capitalization, (iii) authorization, validity of the Merger
Agreement and the Stock Option Agreement and all required Company action taken
with respect to the Offer and the Merger, (iv) vote required to approve the
Merger, (v) required consents or approvals, (vi) no material misstatements in
filings made with the Commission or financial statements, (vii) absence of
material adverse changes, (viii) no undisclosed liabilities, (ix) no
misstatements or omissions of a material fact in the Schedule 14D-9, Proxy
Statement or other filings with the Commission with respect to the Offer and the
Merger, (x) employee benefit plans and ERISA, (xi) litigation, (xii) compliance
with environmental laws and regulations, (xiii) tax returns and tax liabilities,
(xiv) labor relations, (xv) compliance with laws, (xvi) insurance, (xvii)
material contracts, (xviii) accounts receivable, (xix) valid title to, or
leasehold interests in, property, (xx) valid title to, or leasehold interests
in, plant and equipment, (xxi) all necessary permits and licenses, (xxii)
intellectual property, (xxiii) Year 2000 issues, (xxiv) major customers, (xxv)
receipt of fairness opinion from financial advisor and (xxvi) full disclosure.
In addition, the Merger Agreement contains representations by Parent and the
Purchaser as to, among other things, (i) organization and good standing, (ii)
authorization, validity of the Merger Agreement and the Stock Option Agreement
and all required Parent and Purchaser action taken with respect to the Offer and
the Merger, (iii) required consents or approvals, (iv) no misstatements or
omissions of a material fact in the Schedule 14D-1 or other filings with the
Commission with respect to the Offer and the Merger, (v) financing the Offer and
the Merger and (vi) operations of the Purchaser.
Interim Operations. Pursuant to the Merger Agreement, the Company has
agreed that after the date of the Merger Agreement and prior to the Effective
Time, unless Parent otherwise agrees in writing or except as otherwise
contemplated by the Merger Agreement:
(a) the business of the Company and each of its Subsidiaries will be
conducted only in the ordinary and usual course and, to the extent
consistent therewith, each of the Company and its Subsidiaries will use its
reasonable best efforts to preserve its business organization intact and
maintain its existing relations with customers, suppliers, employees,
creditors and business partners;
(b) the Company will not, and will not permit its Subsidiaries to: (i)
amend its certificate of incorporation or by-laws or similar organizational
documents; (ii) declare, set aside or pay any dividend or other
distribution payable in cash, stock or property with respect to its capital
stock; (iii) issue, sell, transfer, pledge, dispose of or encumber any
shares of, or securities convertible into or exchangeable for, or options,
warrants, calls, commitments or rights of any kind to acquire, any shares
of capital stock of any class or bonds, debentures, notes or other
indebtedness having general voting rights (or convertible into securities
having such rights) ("Voting Debt") of the Company or any of its
Subsidiaries, other than Shares reserved for issuances pursuant to the
exercise of stock options outstanding on the date of the Merger Agreement;
(iv) split, combine or reclassify the outstanding Shares or any outstanding
capital stock of any of its Subsidiaries; or (v) redeem, purchase or
otherwise acquire directly or indirectly any shares of its capital stock or
any instrument or security which consists of or includes a right to acquire
such shares;
(c) the Company will not, and will not permit any of its Subsidiaries
to, transfer, lease, license, sell, mortgage, pledge, dispose of or
encumber any assets other than in the ordinary and usual course of business
and consistent with past practice, provided that such transactions, other
than sales of inventory, do not exceed $25,000 per transaction and $250,000
in the aggregate and other than sales of specified
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property, provided, however, that Parent's consent is required for any
indemnification provision or for the incurrence or obligation to incur any
environmental remediation costs related to any such sale of property;
(d) the Company will not, and will not permit any of its Subsidiaries
to, acquire or publicly propose to acquire or agree to acquire (i) by
merging or consolidating with, or by purchasing an equity interest in or a
substantial portion of the assets of, or by any other manner, any business
or any corporation, partnership, joint venture, association or other
business organization or division thereof or (ii) any assets except
purchases of assets in the ordinary course of business consistent with past
practice and which do not individually exceed $150,000 or in the aggregate
$1,500,000 and other than a purchase of specified property;
(e) the Company will not, and will not permit any of its Subsidiaries
to: (i) grant any increase in the compensation payable or to become payable
by the Company or any of its Subsidiaries to any of its executive officers
or employees or (A) enter into or adopt any new, or (B) amend or otherwise
increase, or accelerate the payment or vesting of any benefit or amount
payable or to become payable under any bonus, incentive compensation,
deferred compensation, severance, profit sharing, stock option, stock
purchase, insurance, pension, retirement or other employee benefit plan, or
other contract, agreement, commitment, arrangement, plan, trust fund or
policy maintained or contributed to or entered into by the Company or any
of its Subsidiaries; or (ii) enter into any employment (other than "at
will") or severance agreement with or, except in accordance with the
written policies of the Company existing on the date of the Merger
Agreement, grant any severance or termination pay to any officer, director
or employee of the Company or any of its Subsidiaries;
(f) the Company will not, and will not permit any of its Subsidiaries
to, (i) except in the ordinary course of business consistent with past
practice, enter into new contracts, modify, amend, terminate, renew or fail
to use reasonable business efforts to renew any contract or agreement to
which the Company or any of its Subsidiaries is a party, which is material
to the Company and its Subsidiaries taken as a whole and provided that the
term of any new contract or any contract modification, amendment or renewal
does not exceed twelve (12) months and, provided further, that no loans or
advances may be made or extended to any customers in connection with any
such contract, modification, amendment or renewal, or waive, release or
assign any material rights or claims therein, or (ii) enter into, modify,
amend or renew any contract or agreement outside the ordinary course of
business or on a basis not consistent with past practice if the dollar
value of such new contract or agreement, or existing contract or agreement
as so amended, modified or renewed, is or would be in excess of $150,000
(not to exceed $1,500,000 in the aggregate) or have an initial term (or a
renewal or extension term) greater than twelve (12) months;
(g) the Company will, and will cause each of its Subsidiaries to,
maintain with financially responsible insurance companies insurance in such
amounts and against such risks and losses as are customary for companies
engaged in the business of the Company and its Subsidiaries, consistent
with the Company's past practices;
(h) the Company will not, and will not permit any of its Subsidiaries
to: (i) incur or assume any long-term debt, or except in the ordinary
course of business, incur or assume any short-term indebtedness in amounts
not consistent with past practice; (ii) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other person; (iii) make any loans,
advances or capital contributions to, or investments in, any other person
(other than to wholly owned Subsidiaries of the Company consistent with
past practice); or (iv) make any new capital expenditure or expenditures
which exceed the amounts budgeted therefor in the 1999 capital expenditure
budget for the Company;
(i) the Company will not, and will not permit any of its Subsidiaries
to, change any of the accounting principles used by it except as required
by law, rule, regulation or United States generally accepted accounting
principles;
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(j) the Company will not, and will not permit any of its Subsidiaries
to, make any material Tax election other than in the ordinary course of
business and consistent with past practice, or settle or compromise any Tax
liability in excess of $100,000 arising from or in connection with any
single issue;
(k) the Company will not, and will not permit any of its Subsidiaries
to, pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction of any such claims, liabilities
or obligations, (i) in the ordinary course of business and consistent with
past practice, properly reflected or reserved against in the consolidated
financial statements (or the notes thereto) as of and for the fiscal year
ended December 31, 1998 of the Company and its consolidated Subsidiaries,
(ii) incurred since December 31, 1998 in the ordinary course of business
and consistent with past practice or (iii) which are immaterial in nature
and amount;
(l) the Company will not, and will not permit any of its Subsidiaries
to, adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization of
the Company or any of its Subsidiaries (other than the Merger);
(m) the Company will not, and will not permit any of its Subsidiaries
to, amend, renew, terminate or cause to be extended any lease, agreement or
arrangement relating to any of its leased real properties or enter into any
lease, agreement or arrangement with respect to any real property;
(n) the Company will, and will cause each of its Subsidiaries to, use
reasonable best efforts to maintain in effect all existing Permits that are
material to the operations of the Company or any of its Subsidiaries;
(o) subject to certain other restrictions set forth in the Merger
Agreement, the Company will not, and will not permit any of its
Subsidiaries to, enter into any agreement or arrangement with any of their
respective affiliates other than such agreements and arrangements as are
entered into in the usual, ordinary and regular course of business and
which have been negotiated on an arms-length basis and are no less
favorable to the Company or its Subsidiaries than the Company or such
Subsidiary would have obtained from an unaffiliated third party;
(p) the Company will not, and will not permit any of its Subsidiaries
to, take, or agree to commit to take, any action that (i) would make any
representation or warranty of the Company contained in the Merger Agreement
inaccurate in any respect at, or as of any time prior to, the Effective
Time, (ii) would result in any of the conditions to the Offer or any
conditions to the consummation of the Merger not being satisfied, or (iii)
would materially impair the ability of the Company, Parent or the Purchaser
to consummate the Offer or the Merger in accordance with the terms of the
Merger Agreement or materially delay such consummation; and
(q) the Company will not, and will not permit any of its Subsidiaries
to, enter into an agreement, contract, commitment or arrangement to do any
of the foregoing, or to authorize, recommend, propose or announce an
intention to do any of the foregoing.
No Solicitation. Pursuant to the Merger Agreement, the Company has agreed
that from the date of the Merger Agreement until the earlier of the termination
of the Merger Agreement in accordance with its terms or the expiration of the
Offer without Parent or the Purchaser or their affiliates, as the case may be,
having purchased any Shares pursuant thereto, neither the Company nor any of its
Subsidiaries or affiliates will (and the Company will use its reasonable best
efforts to cause its and each of its Subsidiaries' officers, directors,
employees, representatives and agents, including, but not limited to, investment
bankers, attorneys and accountants, not to), directly or indirectly, encourage,
solicit, participate in or initiate discussions or negotiations with, provide
any information to, or enter into any agreement with, any corporation,
partnership, person or other entity or group (other than Parent, any of its
affiliates or representatives) concerning any merger, business combination,
tender offer, exchange offer, sale of assets (other than as expressly permitted
by Section 5.1 of the Merger Agreement), sale of shares of capital stock or debt
securities or similar transactions involving the Company or any Subsidiary,
division or operating or principal business unit of the Company (an "Acquisition
Proposal"). The Company also agreed to immediately cease any existing
activities, discussions or
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negotiations with any other persons with respect to any of the foregoing.
Notwithstanding the foregoing, the Company may, directly or indirectly, provide
access and furnish information concerning its business, properties or assets to
any corporation, partnership, person or other entity or group pursuant to
appropriate confidentiality agreements, and may negotiate and participate in
discussions and negotiations with such entity or group if (w) such entity or
group has submitted an unsolicited bona fide written proposal to the Company
Board relating to any such transaction, (x) such proposal provides for the
acquisition for cash and/or publicly traded securities of all of the outstanding
Shares, (y) the Company Board determines in good faith, after consultation with
its independent financial advisor, that such proposal is financially superior to
the Offer and the Merger and fully financed or reasonably capable of being
financed, and (z) the Company Board determines in good faith, after consultation
with independent legal counsel, that the failure to provide such information or
access or to engage in such discussions or negotiations would violate their
fiduciary duties to the Company's stockholders under applicable law. A proposal
meeting all of the criteria in the preceding sentence is referred to in the
Merger Agreement as a "Superior Proposal." The Merger Agreement does not
prohibit the Company or the Company Board from taking and disclosing to the
Company's stockholders a position with respect to a tender offer by a third
party pursuant to Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act.
The Company has agreed to immediately notify Parent of any Acquisition Proposal,
or if an inquiry is made, to keep Parent fully apprised of all developments with
respect thereto, to immediately provide to Parent copies of any written
materials received by the Company in connection with any Acquisition Proposal or
inquiry, and to identify the party making any Acquisition Proposal or inquiry or
engaging in such discussion or negotiation. The Company has also agreed to
promptly provide to Parent any non-public information concerning the Company
provided to any other party which was not previously provided to Parent. The
Company has agreed not to release any third party from, or waive any provisions
of, any confidentiality or standstill agreement to which the Company is a party.
The Merger Agreement provides that, except in connection with the valid
termination of the Merger Agreement in connection with a Superior Proposal,
neither the Company Board nor any committee thereof shall (i) withdraw, or
modify or change in a manner adverse to Parent or the Purchaser the approval or
recommendation by the Company Board of the Offer, the Merger Agreement or the
Merger or propose to do so, (ii) approve or recommend any Acquisition Proposal
or propose to do so, or (iii) enter into any agreement (other than a
confidentiality agreement) with respect to any Acquisition Proposal.
Directors' and Officers' Indemnification and Insurance. The Merger
Agreement provides that for six years after the Effective Time, the Surviving
Corporation will indemnify, defend and hold harmless to the fullest extent
permitted under Delaware law the present and former officers, directors,
employees and agents of the Company and its Subsidiaries against all losses,
claims, damages, liabilities, fees and expenses (including reasonable fees and
disbursements of counsel and judgments, fines, losses, claims, liabilities and
amounts paid in settlement (provided that any such settlement is effected with
the written consent of Parent or the Surviving Corporation)) in connection with
any claim, suit, action, proceeding or investigation that is, in whole or in
part, based on or arising out of the fact that such person is or was a director,
officer, employee or agent of the Company or its Subsidiaries and arising out of
actions or omissions occurring at or prior to the Effective Time.
The Merger Agreement further provides that for six years after the
Effective Time, Parent will, or will cause the Surviving Corporation to,
maintain in effect, if available, directors' and officers' liability insurance
covering those persons currently covered by the Company's directors' and
officers' liability insurance policy, to the extent that it provides coverage
for events occurring on or prior to the Effective Time, on terms (including the
amounts of coverage and the amounts of deductibles, if any) that are no less
favorable than the terms of the Company's current policy. If the premium for
such coverage exceeds 150% of the annual premium currently paid by the Company
for such coverage, Parent or the Surviving Corporation are required only to
purchase a policy with the greatest coverage available for an annual premium up
to such amount.
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Termination. The Merger Agreement provides that it may be terminated or
abandoned at any time prior to the Effective Time, whether before or after
stockholder approval thereof:
(a) by the mutual consent of the Parent Board and the Company Board.
(b) by either of the Company Board or the Parent Board:
(i) if Shares have not been purchased pursuant to the Offer on or
prior to October 31, 1999; provided, that the right to terminate the
Merger Agreement pursuant to this paragraph is not available to any
party whose failure to fulfill any obligation under the Merger Agreement
has been the cause of, or resulted in, the failure of the Purchaser to
purchase Shares pursuant to the Offer on or prior to such date; or
(ii) if any Governmental Entity has issued an order, decree or
ruling or taken any other action (which order, decree, ruling or other
action the parties will use their reasonable efforts to lift), in each
case permanently restraining, enjoining, or otherwise prohibiting the
transactions contemplated by the Merger Agreement and such order,
decree, ruling or other action has become final and non-appealable.
(c) by the Company Board:
(i) if, prior to the purchase of Shares pursuant to the Offer, the
Company Board has withdrawn, or modified or changed in a manner adverse
to Parent or the Purchaser, its approval or recommendation of the Offer,
the Merger Agreement or the Merger in order to approve and permit the
Company to execute a definitive agreement providing for a Superior
Proposal; provided that (A) at least five business days prior to
terminating the Merger Agreement pursuant to this paragraph the Company
has provided Parent with written notice advising Parent that the Company
Board has received a Superior Proposal that it intends to accept,
specifying the material terms and conditions of such Superior Proposal
and identifying the person making such Superior Proposal, and (B) the
Company has caused its financial and legal advisors to negotiate in good
faith with Parent to make such adjustments in the terms and conditions
of the Merger Agreement as would enable the Company to proceed with the
transactions contemplated therein on such adjusted terms; and further
provided that the Company may not terminate the Merger Agreement
pursuant to this paragraph if the Company is in material breach of the
Merger Agreement; or
(ii) if, prior to the purchase of Shares pursuant to the Offer,
Parent or the Purchaser breaches in any material respect any of its
material covenants, agreements, representations or warranties contained
in the Merger Agreement, which breach is incapable of being cured within
30 days of notice from the Company to Parent; or
(iii) if Parent or the Purchaser has terminated the Offer, or the
Offer has expired, without Parent or the Purchaser, as the case may be,
purchasing any Shares pursuant thereto; provided that the Company may
not terminate the Merger Agreement pursuant to this paragraph if the
Company is in material breach of the Merger Agreement.
(d) by the Parent Board:
(i) if, due to an occurrence that if occurring after the
commencement of the Offer would result in a failure to satisfy any of
the conditions set forth in Section 14 below, Parent, the Purchaser, or
any of their affiliates has failed to commence the Offer on or prior to
five business days following the date of the initial public announcement
of the Offer, provided that Parent may not terminate the Merger
Agreement pursuant to this paragraph if Parent or the Purchaser is in
material breach of the Merger Agreement; or
(ii) if prior to the purchase of Shares pursuant to the Offer, the
Company Board has withdrawn, or modified or changed in a manner adverse
to Parent or the Purchaser, its approval or recommendation of the Offer,
the Merger Agreement or the Merger or has recommended an Acquisition
Proposal or offer, or has executed an agreement in principle or
definitive agreement
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providing for a tender offer or exchange offer for any shares of capital
stock of the Company, or a merger, consolidation or other business
combination with a person or entity other than Parent, the Purchaser or
their affiliates (or the Company Board resolves to do any of the
foregoing); provided that Parent may not terminate the Merger Agreement
pursuant to this paragraph if Parent or the Purchaser is in material
breach of the Merger Agreement; or
(iii) if Parent or the Purchaser has terminated the Offer, or the
Offer has expired without Parent or the Purchaser purchasing any Shares
thereunder, provided that Parent may not terminate the Merger Agreement
pursuant to this paragraph if it or the Purchaser has failed to purchase
Shares in the Offer in violation of the material terms thereof.
Effect of Termination; Termination Fee. The Merger Agreement provides that
in the event of termination, the Merger Agreement will forthwith become null and
void, and there will be no liability on the part of Parent, the Purchaser or the
Company except (A) for fraud or for willful material breach of the Merger
Agreement and (B) as described below with respect to the payment of certain fees
and expenses.
Set forth below are the circumstances under which a Termination Fee (as
defined below) is payable under the terms of the Merger Agreement. All
references to paragraph numbers refer to the section entitled "Termination"
above.
If (w) the Company Board terminates the Merger Agreement pursuant to
paragraph (c)(i), (x) the Parent Board terminates the Merger Agreement pursuant
to paragraph (d)(ii), (y) the Company Board terminates the Merger Agreement
pursuant to paragraph (b)(i) or paragraph (c)(iii) or the Parent Board
terminates the Merger Agreement pursuant to paragraph (b)(i) or (d)(iii) and
prior thereto there has been publicly announced another Acquisition Proposal or
(z) the Parent Board, due to a material breach of the Merger Agreement by the
Company, terminates the Merger Agreement pursuant to paragraph (d)(i) or
(d)(iii), (each such case of termination being referred to as a "Trigger
Event"), then the Company is obligated to pay to Parent $14 million. Such
payment is due not later than one business day after such termination of the
Merger Agreement except in the case of any termination by the Company pursuant
to paragraph (c)(i), in which case, payment is due simultaneously with the
termination.
The Merger Agreement further provides that upon the termination of the
Merger Agreement due to the occurrence of a Trigger Event, the Company will also
promptly reimburse Parent for the actual, documented and reasonable
out-of-pocket expenses of Parent, the Purchaser and their affiliates (including
the fees and expenses of legal counsel, accountants, financial advisors, other
consultants, financial printers and financing sources) ("Expenses") in
connection with the Offer and the Merger Agreement, in an amount not to exceed
$2.5 million.
The Merger Agreement also provides that if the Company terminates the
Merger Agreement pursuant to paragraph (c)(ii), and the Company is not in
material breach of the Merger Agreement at the time of such termination, Parent
will pay to the Company (not later than one business day after such termination)
$14 million plus an amount not to exceed $2.5 million as reimbursement to the
Company for its actual, documented and reasonable out-of-pocket Expenses.
Fees and Expenses. The Merger Agreement provides that, except as set forth
above, all costs and expenses incurred in connection with the Merger Agreement
and the transactions contemplated thereby will be paid by the party incurring
such expenses.
STOCK OPTION AGREEMENT
The following is a summary of certain provisions of the Stock Option
Agreement. This summary is not a complete description of the terms and
conditions of the Stock Option Agreement and is qualified in its entirety by
reference to the full text of the Stock Option Agreement, a copy of which is
filed with the Commission as an exhibit to the Schedule 14D-1. Capitalized terms
not otherwise defined below have the meanings set forth in the Stock Option
Agreement. The Stock Option Agreement may be examined, and copies obtained, at
the places and in the manner as set forth in Section 9 of this Offer to
Purchase.
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Grant and Exercise of Option. Under the Stock Option Agreement, the
Company has granted to the Purchaser an irrevocable option (the "Stock Option")
to purchase up to that number of newly issued Shares that, when added to the
number of Shares owned by the Purchaser and its affiliates immediately following
consummation of the Offer, will constitute 90% of the Shares then outstanding on
a fully diluted basis (giving effect to the issuance of the Shares under the
Stock Option) (up to a maximum of 19.9% of the Shares outstanding at the time of
the grant of the Stock Option) at a price of $12.25 per Share. The Stock Option
may be exercised by the Purchaser at any time after the acceptance for payment
by the Purchaser of Shares pursuant to the Offer. The Stock Option will
terminate upon the earlier of (i) the termination of the Merger Agreement in
accordance with its terms or (ii) the Effective Time.
Adjustment Upon Changes in Capitalization. The Stock Option Agreement
provides that, in the event of any change in the number of issued and
outstanding Shares by reason of any stock dividend, subdivision, merger,
recapitalization, combination, conversion or exchange of shares, or any other
change in the corporate or capital structure of the Company (including, without
limitation, the declaration or payment of any extraordinary dividend of cash or
securities) which would have the effect of diluting or otherwise adversely
affecting the Purchaser's rights and privileges under the Stock Option
Agreement, the number and kind of the shares and the consideration payable in
respect of the shares will be appropriately and equitably adjusted to restore to
the Purchaser its rights and privileges under the Stock Option Agreement.
CONFIDENTIALITY AGREEMENT
The following is a summary of certain provisions of the Confidentiality
Agreement. This summary is not a complete description of the terms and
conditions of the Confidentiality Agreement and is qualified in its entirety by
reference to the full text of the Confidentiality Agreement, a copy of which is
filed with the Commission as an exhibit to the Schedule 14D-1. Capitalized terms
not otherwise defined below shall have the meanings set forth in the
Confidentiality Agreement. The Confidentiality Agreement may be examined, and
copies obtained, at the places and in the manner as set forth in Section 9 of
this Offer to Purchase.
Pursuant to the terms of the Confidentiality Agreement that Parent and the
Company entered into on October 30, 1998, the Company and Parent agreed to
provide, among other things, for the confidential treatment of their discussions
regarding the Offer and the Merger and the exchange of certain confidential
information concerning each of them. The parties agreed that for a period of two
years from the date of the Confidentiality Agreement that they will not
knowingly, as a result of knowledge or information obtained from the exchange of
certain confidential information (i) divert or attempt to divert any business or
customer of the other party or any of its affiliates nor (ii) employ or attempt
to employ or divert any employee of the party. The parties further agreed that,
upon receipt of proprietary, non-public, confidential information, neither of
them would propose to the other or any other person any transaction between the
companies or their securityholders or involving any of their securities or
securityholders unless the other company has requested in writing that such a
proposal be made, and that neither company will acquire, or assist, advise or
encourage any other persons in acquiring, directly or indirectly, control of the
other company or any of the other company's securities, businesses or assets for
a period of two years from the date of the Confidentiality Agreement unless the
other company has consented in advance in writing to such acquisition.
EMPLOYMENT AGREEMENTS
The following is a summary of certain provisions of the Employment
Agreement (as defined herein) and a letter agreement related thereto. This
summary is not a complete description of the terms and conditions of the
Employment Agreement and the related letter agreement and is qualified in its
entirety by reference to the full text of the Employment Agreement and the
related letter agreement, copies of which are filed with the Commission as
exhibits to the Schedule 14D-1. Capitalized terms not otherwise defined below
shall have the meanings set forth in the Employment Agreement. The Employment
Agreement and the related letter agreement may be examined, and copies obtained,
at the places and in the manner as set forth in Section 9 of this Offer to
Purchase.
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Parent and the Company have agreed to new employment arrangements with Mr.
O'Mahoney that, effective upon the date that a majority of Shares are acquired
by Parent (the "Acquisition Date"), will replace Mr. O'Mahoney's current
employment agreement with the Company. The new agreement entered into among Mr.
O'Mahoney, Parent and the Company (the "Employment Agreement") provides that in
lieu of any payment under Mr. O'Mahoney's current agreement, Mr. O'Mahoney will
be employed by Parent for an initial period of two years after the Acquisition
Date at an initial annual base salary of $350,000, subject to increase at the
discretion of Parent, and will receive fringe benefits and perquisites at least
equal to those received by Mr. O'Mahoney immediately before the date of the
Employment Agreement. The Employment Agreement also provides that Mr. O'Mahoney
will receive, upon the Acquisition Date, a signing bonus of $100,000 in cash and
a grant of shares of restricted stock of Parent with a value of $300,000 and,
provided his employment with Parent continues on the day following the first
anniversary of the Acquisition Date, a grant of shares of restricted stock of
Parent with a value of $300,000 on such day.
Pursuant to the Employment Agreement, if Parent terminates Mr. O'Mahoney's
employment without cause, as defined in the Employment Agreement, then Parent
will pay Mr. O'Mahoney an amount equal to the amount of salary he would have
earned during the remaining initial two-year term of the Employment Agreement.
In addition, if Mr. O'Mahoney's employment is terminated without cause (i) on or
before the first anniversary of the Acquisition Date, then he will receive a
cash payment of $300,000 and all restrictions on his restricted stock will be
lifted, or (ii) after the day following the first anniversary of the Acquisition
Date but before the second anniversary of the Acquisition Date, then all
restrictions on his restricted stock will be lifted. If Mr. O'Mahoney terminates
his employment or if Parent terminates Mr. O'Mahoney's employment for cause,
then Mr. O'Mahoney will not receive any payments other than payments owed to him
up to the date of his termination. The Employment Agreement also provides that
for a period of eighteen months following Mr. O'Mahoney's termination of
employment with Parent, Mr. O'Mahoney may not, directly or indirectly, engage in
any business which competes with Parent or the Company.
The Employment Agreement places certain restrictions upon Mr. O'Mahoney's
ability to communicate confidential information concerning Parent or the Company
to third parties. The Employment Agreement also provides that Parent will pay
Mr. O'Mahoney such additional amounts as may be necessary to cover certain taxes
that Mr. O'Mahoney would have to pay on certain payments he is entitled to
receive.
In addition, pursuant to a letter agreement supplementing the Employment
Agreement, Parent has also agreed to grant to Mr. O'Mahoney, upon Parent
becoming the owner of a majority of the issued and outstanding Shares (provided
that such date is not later than October 31, 1999), an option to purchase 5,000
shares of common stock of Parent at an exercise price equal to the stock's
closing price on the NYSE on the last regular trading day immediately preceding
the grant date. The option will vest in two equal installments on each of the
first and second anniversaries of the grant date.
12. PLANS FOR THE COMPANY; OTHER MATTERS.
Plans for the Company. Parent is conducting a detailed review of the
Company and its assets, corporate structure, dividend policy, capitalization,
operations, properties, policies, management and personnel and will consider,
subject to the terms of the Merger Agreement, what, if any, changes would be
desirable in light of the circumstances existing upon completion of the Offer.
Such changes could include, among other things, changes in the Company's
business, corporate structure, capitalization, management or dividend policy.
Assuming the Minimum Condition is satisfied and the Purchaser purchases
Shares pursuant to the Offer, Parent intends to promptly exercise its rights
under the Merger Agreement to obtain majority representation on, and control of,
the Company Board. See "Merger Agreement--Designation of Directors" above.
Parent will exercise such rights by causing the Company to elect to the Company
Board Messrs. Allan R. Rothwell, Bruce E. Moore, Darryl K. Williams and David A.
Beanblossom. Information with respect to such directors is contained in the
Schedule 14D-9. The Merger Agreement provides that, upon the purchase of and
payment for any Shares by Parent or any of its Subsidiaries pursuant to the
Offer, Parent will be entitled to designate such number of directors, rounded up
to the next whole number, on the Company Board such that the percentage of its
designees on the Company Board equals the percentage of the outstanding Shares
beneficially owned by the Purchaser, Parent and any of their affiliates. See
Section 11. The Merger Agreement
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provides that the directors of the Purchaser and the officers of the Company, in
each case immediately prior to the Effective Time, will, from and after the
Effective Time, be the initial directors and officers, respectively, of the
Surviving Corporation.
Except as disclosed in this Offer to Purchase, and except as may be
effected in connection with the integration of operations referred to above,
neither Parent nor the Purchaser has any present plans or proposals that would
result in an extraordinary corporate transaction, such as a merger,
reorganization, liquidation, relocation of operations or sale or transfer of a
material amount of assets, involving the Company or its Subsidiaries, or any
material changes in the Company's capitalization, corporate structure, business
or composition of its management or the Company Board.
Stockholder Approval. Under the DGCL, the approval of the Company Board
and the affirmative vote of the holders of a majority of the outstanding Shares
are required to adopt and approve the Merger Agreement and transactions
contemplated thereby. The Company has represented in the Merger Agreement that
the execution and delivery of the Merger Agreement by the Company and the
consummation by the Company of the transactions contemplated by the Merger
Agreement have been duly authorized by all necessary corporate action on the
part of the Company, subject to the approval of the Merger by the Company's
stockholders in accordance with the DGCL. In addition, the Company has
represented that the affirmative vote of the holders of a majority of the
outstanding Shares is the only vote of the holders of any class or series of the
Company's capital stock which is necessary to approve the Merger Agreement and
the transactions contemplated thereby, including the Merger. Therefore, unless
the Merger is consummated pursuant to the short-form merger provisions under the
DGCL described below (in which case no further corporate action by the
stockholders of the Company will be required to complete the Merger), the only
remaining required corporate action of the Company will be the approval of the
Merger Agreement and the transactions contemplated thereby by the affirmative
vote of the holders of a majority of the Shares. The Merger Agreement provides
that Parent will vote, or cause to be voted, all of the Shares then owned by
Parent, the Purchaser or any of Parent's other Subsidiaries and affiliates in
favor of the approval of the Merger and the adoption of the Merger Agreement. In
the event that Parent, the Purchaser and Parent's other Subsidiaries and
affiliates acquire in the aggregate at least a majority of the Shares entitled
to vote on the approval of the Merger and the Merger Agreement (which would be
the case if the Minimum Condition is satisfied and the Purchaser were to accept
for payment Shares tendered in the Offer), they would have the ability to effect
the Merger without the affirmative votes of any other stockholders.
Short-Form Merger. Section 253 of the DGCL provides that, if a corporation
owns at least 90% of the outstanding shares of each class of another
corporation, the corporation holding such stock may merge itself into such
corporation without any action or vote on the part of the board of directors or
the stockholders of such other corporation (a "short-form merger"). In the event
that Parent, the Purchaser and any other Subsidiaries of Parent acquire in the
aggregate at least 90% of the outstanding Shares, pursuant to the Offer or
otherwise, then, at the election of Parent, a short-form merger could be
effected without any approval of the stockholders of the Company, subject to
compliance with the provisions of Section 253 of the DGCL. Even if Parent and
the Purchaser do not own 90% of the outstanding Shares following consummation of
the Offer, Parent and the Purchaser could seek to purchase additional Shares in
the open market or otherwise in order to reach the 90% threshold and employ a
short-form merger. The per Share consideration paid for any Shares so acquired
may be greater or less than that paid in the Offer. In addition, the Purchaser
intends to exercise the Stock Option pursuant to which it would reach the 90%
threshold. Parent and the Purchaser presently intend to effect a short-form
merger if permitted to do so under the DGCL.
Appraisal Rights. Holders of the Shares do not have appraisal rights in
connection with the Offer. However, if the Merger is consummated, holders of the
Shares at the Effective Time will have certain rights pursuant to the provisions
of Section 262 of the DGCL, including the right to dissent and demand appraisal
of, and to receive payment in cash of the fair value of, their Shares. Under
Section 262 of the DGCL, dissenting stockholders of the Company who comply with
the applicable statutory procedures will be entitled to receive a judicial
determination of the fair value of their Shares (exclusive of any element of
value arising from the accomplishment or expectation of the Merger) and to
receive payment of such fair value in cash, together with a fair rate of
interest thereon, if any. Any such judicial determination of the fair value of
the Shares could
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be based upon factors other than, or in addition to, the price per Share to be
paid in the Merger or the market value of the Shares. The value so determined
could be more or less than the price per Share to be paid in the Merger.
THE FOREGOING SUMMARY OF THE RIGHTS OF DISSENTING STOCKHOLDERS UNDER THE
DGCL DOES NOT PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE
FOLLOWED BY STOCKHOLDERS DESIRING TO EXERCISE ANY APPRAISAL RIGHTS AVAILABLE
UNDER THE DGCL. THE PRESERVATION AND EXERCISE OF APPRAISAL RIGHTS REQUIRE STRICT
ADHERENCE TO THE APPLICABLE PROVISIONS OF THE DGCL.
Rule 13e-3. The Commission has adopted Rule 13e-3 under the Exchange Act
which is applicable to certain "going private" transactions and which may under
certain circumstances be applicable to the Merger or another business
combination following the purchase of Shares pursuant to the Offer in which the
Purchaser seeks to acquire the remaining Shares not held by it. The Purchaser
believes, however, that Rule 13e-3 will not be applicable to the Merger because
it is anticipated that the Merger would be effected within one (1) year
following consummation of the Offer and in the Merger stockholders would receive
the same price per Share as paid in the Offer. If Rule 13e-3 were applicable to
the Merger, it would require, among other things, that certain financial
information concerning the Company, and certain information relating to the
fairness of the proposed transaction and the consideration offered to minority
stockholders in such a transaction, be filed with the Commission and disclosed
to minority stockholders prior to consummation of the transaction.
13. DIVIDENDS AND DISTRIBUTIONS.
As described above, the Merger Agreement provides that from April 27, 1999
until the Effective Time, without the prior written consent of Parent, neither
the Company nor any of its Subsidiaries will (i) declare, set aside or pay any
dividend or other distribution payable in cash, stock or property with respect
to its capital stock, except that a wholly-owned Subsidiary of the Company may
declare and pay a dividend or make advances to its parent or the Company; (ii)
issue, sell, transfer, pledge, dispose of or encumber any shares of, or
securities convertible into or exchangeable for, or options, warrants, calls,
commitments or rights of any kind to acquire any shares of, capital stock of any
class or Voting Debt of the Company or any of its Subsidiaries, other than
Shares reserved for issuances pursuant to the exercise of options outstanding on
such date; (iii) split, combine or reclassify the outstanding Shares or any
outstanding capital stock of any of the Subsidiaries of the Company; or (iv)
redeem, purchase or otherwise acquire directly or indirectly any of its capital
stock or any instrument or security which consists of or includes a right to
acquire such capital stock.
14. CONDITIONS TO THE OFFER.
Notwithstanding any other provisions of the Offer, and in addition to (and
not in limitation of) the Purchaser's rights to extend and amend the Offer at
any time in its sole discretion (subject to the provisions of the Merger
Agreement), the Purchaser is not required to accept for payment or, subject to
any applicable rules and regulations of the Commission, including Rule 14e-1(c)
under the Exchange Act (relating to the Purchaser's obligation to pay for or
return tendered Shares promptly after termination or withdrawal of the Offer),
pay for, and may delay the acceptance for payment of or, subject to the
restriction referred to above, the payment for, any tendered Shares, and may
terminate the Offer as to any Shares not then paid for, if (i) any applicable
waiting period under the HSR Act or any foreign antitrust or competition law or
regulation has not expired or terminated, (ii) the Minimum Condition has not
been satisfied, or (iii) at any time on or after the date of the Merger
Agreement and before the time of payment for any such Shares, any of the
following events shall occur or shall be determined by the Purchaser to have
occurred:
(a) there shall be threatened or pending any suit, action or
proceeding by any Governmental Entity (i) seeking to prohibit or impose any
material limitations on Parent's or the Purchaser's ownership or operation
(or that of any of their respective Subsidiaries or affiliates) of all or a
material portion of their or the Company's businesses or assets, or to
compel Parent or the Purchaser or their respective Subsidiaries and
affiliates to dispose of or hold separate any material portion of the
business or assets of the Company or Parent and their respective
Subsidiaries, in each case taken as a whole, (ii) challenging
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the acquisition by Parent or the Purchaser of any Shares under the Offer or
pursuant to the Stock Option Agreement, seeking to restrain or prohibit the
making or consummation of the Offer or the Merger or the performance of any
of the other transactions contemplated by this Agreement or the Stock
Option Agreement, or seeking to obtain from the Company, Parent or the
Purchaser any damages that are material in relation to the Company and its
Subsidiaries taken as a whole, (iii) seeking to impose material limitations
on the ability of the Purchaser, or rendering the Purchaser unable, to
accept for payment, pay for or purchase some or all of the Shares pursuant
to the Offer and the Merger, (iv) seeking to impose material limitations on
the ability of the Purchaser or Parent effectively to exercise full rights
of ownership of the Shares, including, without limitation, the right to
vote the Shares purchased by it on all matters property presented to the
Company's stockholders or (v) which otherwise is reasonably likely to have
a Company Material Adverse Effect (as defined in the Merger Agreement);
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable to
the Offer or the Merger, or any other action shall be taken by any
Governmental Entity, other than the application to the Offer or the Merger
of applicable waiting periods under the HSR Act or any foreign antitrust or
competition law or regulation, that is reasonably likely to result,
directly or indirectly, in any of the consequences referred to in clauses
(i) through (v) of paragraph (a) above;
(c) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on the NYSE for a period in
excess of three hours (excluding suspensions or limitations resulting
solely from physical damage or interference with such exchanges not related
to market conditions), (ii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States (whether or
not mandatory), (iii) a commencement of a war, armed hostilities or other
international or national calamity directly or indirectly involving the
United States, (iv) any limitation or proposed limitation (whether or not
mandatory) by any United States governmental authority or agency that has a
material adverse effect generally on the extension of credit by banks or
other financial institutions, (v) any change in general financial, bank or
capital market conditions which has a material adverse effect on the
ability of financial institutions in the United States to extend credit or
syndicate loans, (vi) any decline in either the Dow Jones Industrial
Average or the Standard & Poor's Index of 500 Industrial Companies by an
amount in excess of 20% measured from the close of business on the date of
the Merger Agreement or (vii) in the case of any of the foregoing existing
at the time of the commencement of the Offer, a material acceleration or
worsening thereof;
(d) any of the representations and warranties of the Company (without
giving effect to any limitation as to "knowledge" set forth in the Merger
Agreement) set forth in the Merger Agreement that are qualified as to
materiality shall not be true and correct and any such representations and
warranties that are not so qualified shall not be true and correct in any
material respect, in each case as of the date of the Merger Agreement and
as of the scheduled expiration of the Offer (except for those
representations and warranties that address matters only as of a particular
date or only with respect to a specific period of time, which need only be
true and correct as of such date or with respect to such period);
(e) the Company shall have breached or failed to perform any material
obligation or to comply with any material agreement or covenant of the
Company to be performed or complied with by it under the Merger Agreement;
(f) there shall have occurred any events or changes which have had or
which are reasonably likely to have or constitute, individually or in the
aggregate, a Company Material Adverse Effect;
(g) the Merger Agreement shall have been terminated in accordance with
its terms;
(h) (i) it shall have been publicly disclosed or Parent or the
Purchaser shall have otherwise learned that any person, entity or "group"
(as defined in Section 13(d)(3) of the Exchange Act), other than Parent or
its affiliates or any group of which any of them is a member, shall have
acquired beneficial ownership (determined pursuant to Rule 13d-3
promulgated under the Exchange Act) of more than 14.9% of any class or
series of capital stock of the Company (including the Shares), through the
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acquisition of stock, the formation of a group or otherwise, or shall have
been granted an option, right or warrant, conditional or otherwise, to
acquire beneficial ownership of more than 14.9% of any class or series of
capital stock of the Company (including the Shares), other than
acquisitions of stock in open market purchases by passive investors that
prior to the date of the Merger Agreement beneficially owned 10% or more of
any class or series of capital stock of the Company (including the Shares)
provided that such acquisitions do not result in such passive investor
beneficially owning more than 19.9% of such class or series of capital
stock of the Company (including the Shares); or (ii) any person or group
shall have entered into a definitive agreement or agreement in principle
with the Company with respect to a merger, consolidation or other business
combination with the Company;
(i) the Company Board or any committee thereof (i) shall have
withdrawn, or modified or changed in a manner adverse to Parent or the
Purchaser (including by amendment of the Schedule 14D-9), its
recommendation of the Offer, the Merger Agreement, or the Merger, (ii)
shall have recommended another proposal or offer, (iii) shall have resolved
to do any of the foregoing or (iv) shall have taken a neutral position or
made no recommendation with respect to another proposal or offer (other
than by Parent or the Purchaser) after a reasonable amount of time (and in
no event more than ten business days following receipt thereof) has elapsed
for the Company Board or any committee thereof to review and make a
recommendation with respect thereto; or
(j) the Company shall have breached the Stock Option Agreement, any of
its representations, warranties or agreements set forth in the Stock Option
Agreement or such Stock Option Agreement shall not be valid, binding and
enforceable, except for such breaches or failures or failures to be valid,
binding and enforceable that do not materially and adversely affect the
benefits expected to be received by Parent and the Purchaser under the
Merger Agreement or the Stock Option Agreement;
which in the sole judgment of Parent or the Purchaser, in any such case, and
regardless of the circumstances (including any action or inaction by Parent or
the Purchaser giving rise to such condition) makes it inadvisable to proceed
with the Offer or with such acceptance for payment or payments for Shares.
The foregoing conditions are for the sole benefit of Parent and the
Purchaser and may be waived by Parent or the Purchaser, in whole or in part, at
any time and from time to time in the sole discretion of Parent or the
Purchaser. The failure by Parent or the Purchaser at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right and each
such right shall be deemed an ongoing right which may be asserted at any time
and from time to time.
15. CERTAIN LEGAL MATTERS.
General. Except as described in this Offer to Purchase, based on
information provided by the Company, none of the Company, the Purchaser or
Parent is aware of (i) any license or regulatory permit that appears to be
material to the business of the Company and its Subsidiaries, taken as a whole,
that might be adversely affected by the acquisition of Shares by Parent or the
Purchaser pursuant to the Offer or the Merger or (ii) any approval or other
action by any governmental, administrative or regulatory agency or authority,
domestic or foreign, that would be required prior to the acquisition of Shares
by the Purchaser pursuant to the Offer or the Merger. Should any such approval
or other action be required, the Purchaser and Parent presently contemplate that
such approval or other action would be sought. While, except as otherwise
described in this Offer to Purchase, the Purchaser does not currently intend to
delay the acceptance for payment of, or payment for, Shares tendered pursuant to
the Offer pending the outcome of any such matter, there can be no assurance that
any such approval or other action, if needed, would be obtained or would be
obtained without substantial conditions or that failure to obtain any such
approval or other action might not result in consequences adverse to the
business of the Company or Parent or that certain parts of the businesses of the
Company or Parent might not have to be disposed of, or other substantial
conditions complied with, in the event that such approvals were not obtained or
such other actions were not taken or in order to obtain any such approval or
other action. If certain types of adverse actions are taken with respect to the
matters discussed below, the Purchaser could decline to accept for payment, or
pay for, any Shares tendered. See Section 14 for certain
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conditions to the Offer, including conditions with respect to governmental
actions. The Purchaser's obligation under the Offer to accept for payment and
pay for Shares is subject to certain conditions. See Section 14.
Antitrust. The Offer and the Merger are subject to the HSR Act and the
rules promulgated thereunder, which provide that certain acquisition
transactions may not be consummated unless certain information has been
furnished to the Antitrust Division of the Department of Justice (the "Antitrust
Division") and the Federal Trade Commission (the "FTC") and certain waiting
period requirements have been satisfied.
A Notification and Report Form with respect to the Offer is expected to be
filed under the HSR Act on or about May 4, 1999. Under the provisions of the HSR
Act applicable to the Offer, the purchase of Shares pursuant to the Offer may
not be consummated until the expiration of a 15-calendar day waiting period
following the filing by Parent, unless the Antitrust Division and the FTC
terminate the waiting period prior thereto. Accordingly, if Parent makes such
filing on May 4, 1999, the waiting period under the HSR Act applicable to the
Offer will expire at 11:59 p.m., New York City time, on May 19, 1999, unless,
prior to the expiration or termination of the waiting period, the FTC or the
Antitrust Division extends the waiting period by requesting additional
information or documentary material. If such a request is made, the waiting
period will be extended and would expire at 11:59 p.m., New York City time, on
the tenth calendar day after the date of substantial compliance by Parent with
such request. Only one extension of the waiting period pursuant to a request for
additional information is authorized by the HSR Act. Thereafter, such waiting
period may be extended only by court order or with the consent of Parent. The
Purchaser will not accept for payment Shares tendered pursuant to the Offer
unless and until the waiting period requirements imposed by the HSR Act with
respect to the Offer have been satisfied. See Section 14.
The Merger may not be consummated until 30 calendar days after receipt by
the Antitrust Division and the FTC of the Notification and Report Forms of both
Parent and the Company unless the Purchaser acquires 50% or more of the
outstanding Shares pursuant to the Offer or the 30-day period is earlier
terminated by the Antitrust Division and the FTC.
The FTC and the Antitrust Division frequently scrutinize the legality under
the Antitrust Laws (as defined below) of transactions such as Purchaser's
acquisition of Shares pursuant to the Offer and the Merger. At any time before
or after Purchaser's acquisition of Shares, the Antitrust Division or the FTC
could take such action under the Antitrust Laws as it deems necessary or
desirable in the public interest, including seeking to enjoin the acquisition of
Shares pursuant to the Offer or otherwise seeking divestiture of Shares acquired
by Purchaser or divestiture of substantial assets of Parent, the Company or
their respective affiliates. Private parties and state attorneys general may
also bring legal action under the Antitrust Laws under certain circumstances.
Based upon an examination of information provided by the Company relating
to the businesses in which Parent and the Company are engaged, Parent and the
Purchaser believe that the acquisition of Shares by the Purchaser pursuant to
the Offer or the Merger will not violate the Antitrust Laws. Nevertheless, there
can be no assurance that a challenge to the Offer or other acquisition of Shares
by the Purchaser on antitrust grounds will not be made or, if such a challenge
is made, what the result would be.
As used in this Offer to Purchase, "Antitrust Laws" shall mean and include
the Sherman Act, as amended, the Clayton Act, as amended, the HSR Act, the
Federal Trade Commission Act, as amended, and all other Federal and state
statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines, and other laws that are designed or intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint of
trade.
Foreign Laws. Parent, the Company and certain of their subsidiaries
conduct business in several foreign countries where regulatory filings or
approvals may be required or desirable in connection with the consummation of
the Offer. Certain of such filings or approvals, if required or desirable, may
not be made or obtained prior to the currently scheduled Expiration Date. The
Purchaser is seeking further information regarding the applicability of any such
laws and currently intends to take such action as may be required or desirable.
Pursuant to the Merger Agreement, if any such filings or approvals may not be
made or obtained prior to the currently scheduled Expiration Date, the Purchaser
has the right, in its sole discretion, to extend
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the Offer until such time as all required or desirable filings and approvals may
be made or obtained, provided that the Offer may not be extended beyond October
31, 1999.
State Antitakeover Statutes. Section 203 of the DGCL, in general,
prohibits a Delaware corporation that does not opt out of its provisions from
engaging in a "Business Combination" (defined as a variety of transactions,
including mergers) with an "Interested Stockholder" (defined generally as a
person that is the beneficial owner of 15% or more of the outstanding voting
stock of the subject corporation) for a period of three years following the date
that such person became an Interested Stockholder unless (i) prior to such time,
the board of directors of the corporation approved either the Business
Combination or the transaction that resulted in the stockholder becoming an
Interested Stockholder; (ii) upon consummation of the transaction which resulted
in the stockholder becoming an Interested Stockholder, the Interested
Stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, excluding for purposes of
determining the number of shares outstanding those shares owned (a) by persons
who are directors and officers and (b) employee stock plans in which employee
participants do not have the right to determine confidentially whether shares
held subject to the plan will be tendered in a tender offer or exchange offer;
or (iii) at or subsequent to such time, the Business Combination is approved by
the board of directors and authorized at an annual or special meeting of the
stockholders, and not by written consent, by the affirmative vote of at least
two-thirds ( 2/3) of the outstanding voting stock which is not owned by the
Interested Stockholder. The Company has opted in its By-laws not to be governed
by Section 203 of the DGCL, and as a result, the restrictions contained therein
do not apply to transactions between the Company and any of its Interested
Stockholders.
Although the Company is organized under the laws of the State of Delaware,
since the Company's executive offices and principal place of business are
located in the State of Wisconsin, the Offer could be subject to Chapter 552 of
the Wisconsin Statutes, the Wisconsin Corporate Take-Over Law ("Chapter 552").
Chapter 552 makes it unlawful, under certain circumstances, for any person to
make a "take-over offer" involving a "target company" in Wisconsin which meets
certain criteria, or to acquire any equity securities of such a target company
pursuant to the take-over offer, unless a registration statement has been filed
with the Division of Securities of the Wisconsin Department of Financial
Institutions (the "Division") at least ten days prior to the commencement of the
take-over offer and the Division does not delay the effectiveness of the
take-over offer by order or request for a hearing. The Company has represented
to Parent and the Purchaser in the Merger Agreement that it meets an exception
to the registration provisions of Chapter 552 and, consequently, such provisions
of Chapter 552 should be inapplicable to the Offer and the Merger. However,
Chapter 552 also imposes certain reporting and filing requirements on persons
making a take-over offer and makes unlawful certain fraudulent and deceptive
practices in connection with a take-over offer. Parent and the Purchaser intend
to comply with such requirements and prohibitions to the extent required by
Chapter 552.
The foregoing description of Chapter 552 is not necessarily complete and is
qualified by reference to the provisions of Chapter 552 and the rules and
regulations promulgated thereunder.
A number of states have adopted laws and regulations that purport to apply
to attempts to acquire securities of corporations that are incorporated in such
states, or whose business operations have substantial economic effects in such
states, or which have substantial assets, security holders, employees, principal
executive offices or principal places of business in such states. In Edgar v.
MITE Corp., the Supreme Court of the United States invalidated on constitutional
grounds the Illinois Business Takeover statute, which, as a matter of state
securities law, made certain corporate acquisitions more difficult. However, in
1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the
State of Indiana may, as a matter of corporate law and, in particular, with
respect to those aspects of corporate law concerning corporate governance,
constitutionally disqualify a potential acquiror from voting on the affairs of a
target corporation without the prior approval of the remaining stockholders. The
state law before the Supreme Court was by its terms applicable only to
corporations that had a substantial number of stockholders in the state and were
incorporated there.
Other than as set forth above, Parent and the Purchaser do not believe that
the antitakeover laws and regulations of any state will by their terms apply to
the Offer and the Merger, and neither Parent nor the
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Purchaser has attempted to comply with any state antitakeover statute or
regulation. The Purchaser reserves the right to challenge the applicability or
validity of any state law purportedly applicable to the Offer and nothing in
this Offer to Purchase or any action taken in connection with the Offer is
intended as a waiver of such right. If it is asserted that any state
antitakeover statute is applicable to the Offer and an appropriate court does
not determine that it is inapplicable or invalid as applied to the Offer, the
Purchaser might be required to file certain information with, or to receive
approvals from, the relevant state authorities, and the Purchaser might be
unable to accept for payment or pay for Shares tendered pursuant to the Offer or
may be delayed in consummating the Offer. In such case, the Purchaser may not be
obligated to accept for payment, or pay for, any Shares tendered pursuant to the
Offer. See Section 14.
Environmental. The Company will be required to comply with the New Jersey
Industrial Site Recovery Act ("ISRA") and the rules promulgated thereunder with
respect to the Company's South Kearney, Plainfield and Newark, New Jersey
facilities. To comply with ISRA, the Company will be required to apply for and
obtain New Jersey Department of Environmental Protection ("NJDEP") approval of a
remediation agreement with respect to the South Kearney and Plainfield
facilities prior to the Purchaser's acquisition of Shares pursuant to the Offer
or the Merger. With respect to the Newark facility, the Company intends to apply
for a waiver of the ISRA requirements on the basis that the previous owner of
the facility is in the process of an ISRA proceeding in connection with a
previous sale of assets to the Company. NJDEP approval of the waiver application
must be obtained prior to the Purchaser's acquisition of Shares pursuant to the
Offer or the Merger. NJDEP approval of ISRA remediation agreements and waiver
applications are typically issued within 14 business days after receipt of the
relevant application and associated documentation. The Company intends to file
the relevant applications and associated documentation with the NJDEP no later
than May 21, 1999.
16. FEES AND EXPENSES.
Merrill Lynch is acting as Dealer Manager in connection with the Offer and
is providing certain financial advisory services to the Purchaser and Parent in
connection with the Offer. Parent has agreed to pay Merrill Lynch a fee of
approximately $3.1 million for such services, approximately 25% of which was
payable upon the execution of the Merger Agreement and the remainder of which is
payable upon consummation of the Merger. Parent has also agreed to reimburse
Merrill Lynch for its out-of-pocket expenses, including the reasonable fees and
expenses of its counsel and any other advisor retained by Merrill Lynch in
connection with its engagement and to indemnify Merrill Lynch and certain
related persons against certain liabilities and expenses, including certain
liabilities and expenses under the federal securities laws.
The Purchaser and Parent have retained Kissel Blake to serve as the
Information Agent and ChaseMellon Shareholder Services, L.L.C. to serve as the
Depositary in connection with the Offer. The Information Agent may contact
holders of Shares by personal interview, mail, telephone, telex, telegraph and
other methods of electronic communication and may request brokers, dealers,
commercial banks, trust companies and other nominees to forward the Offer
materials to beneficial holders. The Information Agent and the Depositary will
each receive reasonable and customary compensation for their services, be
reimbursed for certain reasonable out-of-pocket expenses and be indemnified
against certain liabilities in connection with their services, including certain
liabilities and expenses under the federal securities laws.
Abernathy McGregor Frank will perform certain public relations consulting
services for Parent in connection with the Offer, for which it will receive
reasonable and customary compensation.
Except as set forth above, neither Parent nor the Purchaser will pay any
fees or commissions to any broker or dealer or other person or entity in
connection with the solicitation of tenders of Shares pursuant to the Offer.
Brokers, dealers, banks and trust companies will be reimbursed by the Purchaser
for customary mailing and handling expenses incurred by them in forwarding the
Offer materials to their customers.
17. MISCELLANEOUS.
The Purchaser is not aware of any state where the making of the Offer is
prohibited by administrative or judicial action pursuant to any valid state
statute. If the Purchaser becomes aware of any valid state statute
32
<PAGE> 35
prohibiting the making of the Offer or the acceptance of the Shares pursuant
thereto, the Purchaser will make a good faith effort to comply with such statute
or seek to have such statute declared inapplicable to the Offer. If, after such
good faith effort, the Purchaser cannot comply with such state statute, the
Offer will not be made to (nor will tenders be accepted from or on behalf of)
holders of Shares in such state. In any jurisdiction where the securities, blue
sky or other laws require the Offer to be made by a licensed broker or dealer,
the Offer shall be deemed to be made on behalf of the Purchaser by the Dealer
Manager or one or more registered brokers or dealers which are licensed under
the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PARENT OR THE PURCHASER NOT CONTAINED HEREIN OR IN
THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
The Purchaser and Parent have filed with the Commission the Schedule 14D-1
pursuant to Rule 14d-3 under the Exchange Act, together with exhibits,
furnishing certain additional information with respect to the Offer. In
addition, the Company has filed with the Commission the Schedule 14D-9 pursuant
to Rule 14d-9 under the Exchange Act, setting forth its recommendation with
respect to the Offer and the reasons for its recommendation and furnishing
certain additional related information. Such Schedules and any amendments
thereto, including exhibits, should be available for inspection, and copies
should be obtainable in the same manner set forth in Section 9 of this Offer to
Purchase (except that such material will not be available at the regional
offices of the Commission).
LIPSTICK ACQUISITION CORP.
May 4, 1999
33
<PAGE> 36
SCHEDULE I
INFORMATION CONCERNING THE DIRECTORS AND
EXECUTIVE OFFICERS OF PARENT AND THE PURCHASER
Directors and Executive Officers of Parent and the Purchaser. Set forth
below is the name and present principal occupation or employment, and material
occupations, positions, offices or employments for the past five years, of each
director and executive officer of Parent and the Purchaser. Each such person is
a citizen of the United States of America and, the business address of each such
person is c/o Parent, 100 N. Eastman Road, Kingsport, Tennessee 37660. Unless
otherwise indicated, each occupation set forth opposite an individual's name
refers to employment with Parent. Unless otherwise indicated, each such person
has held his or her present occupation as set forth below, or has been an
executive officer at Parent, or the organization indicated, for the past five
years. Directors (and, in the case of Mr. Griffin, director-elect) of Parent or
the Purchaser, as the case may be, are identified by an asterisk.
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
---- ------------------------------------------------------------
<S> <C>
H. Jesse Arnelle* Mr. Arnelle is of counsel to the Winston-Salem, North
Carolina-based law firm of Womble, Carlyle, Sandridge &
Rice. He was a partner of the San Francisco-based law firm
of Arnelle, Hastie, McGee, Willis & Greene or its
predecessor from 1985 until 1997. Mr. Arnelle is Immediate
Past Chairman of the Board of Trustees of Pennsylvania State
University, is a director of the National Football
Foundation and Collegiate Hall of Fame, and is a member of
the boards of directors of Waste Management, Inc., FPL
Group, Inc., Textron, Inc., Armstrong World Industries,
Inc., and Union Pacific Resources, Inc.
R. Wiley Bourne, Jr.* Mr. Bourne is Vice Chairman of the Board and Executive Vice
President of Parent, responsible for all business
organizations. He joined Parent in 1959 and was named
Executive Vice President in 1989. Mr. Bourne also served as
a Vice President of Eastman Kodak Company from 1986 through
1993. He is also a member of the board of directors of
Unifi, Inc. Mr. Bourne also serves as a member of the Board
of Trustees and Vice Chairman of the United States Council
for International Business, on the regional advisory Board
of First Tennessee Bank, as a director of the American
Industrial Health Council, East Tennessee State University
Foundation, and the Massachusetts Institute of Technology
Society of Sloan Fellows, and on the Board of Trustees of
Tennessee Wesleyan College, the Visiting Committee of the
James H. Quillen College of Medicine, and the Board of
Visitors of North Carolina A&T State University.
</TABLE>
I-1
<PAGE> 37
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
---- ------------------------------------------------------------
<S> <C>
Calvin A. Campbell, Mr. Campbell has been Chairman of the Board, President and
Jr.* Chief Executive Officer of Goodman Equipment Corporation
since 1971. Goodman Equipment designs, manufactures, and
markets worldwide underground mining locomotives and
personnel carriers and plastics blow molding machinery. He
was also President and Chief Executive Officer of Cyprus
Amax Minerals Company in 1992, Chairman of the Board in 1991
and 1992, and a director from 1985 through 1994. Mr.
Campbell is a member of the board of directors of Mine
Safety Appliances Company and of Bulley & Andrews Company.
He also serves as Chairman of the National Association of
Manufacturers, is a director of the National Mining
Association, is a director and former Chairman of the
Illinois Manufacturers Association, and serves as a trustee
of the Illinois Institute of Technology.
Earnest W. Deavenport, Mr. Deavenport is Chairman of the Board and Chief Executive
Jr.* Officer of Parent. He joined Parent in 1960. Mr. Deavenport
was named President of Parent in 1989. He also served as
Group Vice President of Eastman Kodak Company from 1989
through 1993. Mr. Deavenport is a member of the boards of
directors of First American Corporation and Milliken &
Company. He also serves as a director of the Chemical
Manufacturers Association, the American Plastics Council,
and the National Association of Manufacturers, on the Board
of Trustees of the Malcolm Baldridge National Quality Award
Foundation, and on the policy committee of the Business
Roundtable.
Jerry E. Dempsey* Mr. Dempsey served as Chairman of the Board and Chief
Executive Officer of PPG Industries, Inc. from 1993 until
his retirement in 1997. From 1991 until he joined PPG, he
was Senior Vice President of WMX Technologies, Inc., a waste
treatment and disposal company, and Chairman of its
publicly-traded, majority-owned subsidiary, Chemical Waste
Management, Inc., having served as President and Chief
Executive Officer of Chemical Waste Management, Inc. since
1985. Mr. Dempsey is also a member of the board of directors
of Navistar International Corporation.
John W. Donehower* Mr. Donehower is Senior Vice President and Chief Financial
Officer of Kimberly-Clark Corporation. He joined
Kimberly-Clark in 1974, and served in a series of management
positions prior to election to his current position in 1993.
Mr. Donehower is also a member of the board of directors of
Allendale Mutual Insurance Company and Kimberly-Clark De
Mexico S.A. de C.V.
Donald W. Griffin* Mr. Griffin is Chairman of the Board, President, and Chief
Executive Officer of Olin Corporation, a manufacturer of
chemicals, metals, and ammunition. He joined Olin in 1961,
and served in a series of marketing and management positions
prior to election to the position of President and Chief
Operating Officer in 1994 and to his current positions in
1996. Mr. Griffin is also a member of the boards of
directors of A.C. Nielsen Corporation and Rayonier, Inc. He
also serves as a director of the Chemical Manufacturers
Association, the National Shooting Sports Foundation, the
Wildlife Management Institute, and the Small Arms and
Ammunition Manufacturers Institute, and as a trustee of the
University of Evansville and the Buffalo Bill Historical
Center. Mr. Griffin is not currently a director of the
Company, but has been appointed to fill the vacancy to be
created by Gerald B. Mitchell's retirement at Parent's
Annual Meeting scheduled for May 6, 1999.
</TABLE>
I-2
<PAGE> 38
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
---- ------------------------------------------------------------
<S> <C>
Lee Liu* Mr. Liu is the Chairman of the Board of Interstate Energy
Corporation, and was Chairman of the Board and Chief
Executive Officer of IES Industries, Inc., predecessor of
Interstate Energy Corporation, and of IES Utilities, the
major subsidiary of IES Industries, from 1993 to 1998. Mr.
Liu has been with Iowa Electric Light and Power Company,
predecessor of IES Industries, since 1957. He is also a
member of the boards of directors of Principal Financial
Group and McLeod USA Incorporated.
Marilyn R. Marks* Miss Marks is Chairman of the Board and Chief Executive
Officer of Dorsey Trailers, Inc., positions she has held
since 1987. She was also President of Dorsey Trailers, Inc.
from 1987 to November 1997. Miss Marks is also a member of
the board of directors of Dana Corporation, and also serves
as a director of the American Trucking Associations
Foundation.
Gerald B. Mitchell* Mr. Mitchell retired from Dana Corporation, a vehicle parts
supply company, in 1990, following 44 years of service. From
1980 until his retirement, Mr. Mitchell was the Chairman of
the Board and Chief Executive Officer. Mr. Mitchell is a
member of the boards of directors of WestPoint Stevens Inc.,
Worthington Industries, Inc., and George Weston Ltd.
(Canada). Under Parent's Bylaw provision governing
retirement age, Mr. Mitchell will resign from Parent's Board
at Parent's Annual Meeting scheduled for May 6, 1999.
Dr. John A. White* Dr. White is Chancellor of the University of Arkansas. From
1991 to 1997, he was Dean of the College of Engineering at
the Georgia Institute of Technology. From July 1988 to
September 1991, he was Assistant Director of the National
Science Foundation in Washington, D.C., and served on the
faculty of the Georgia Institute of Technology from 1975 to
1997. Dr. White is also a member of the National Science
Board, a member of the National Academy of Engineering, and
a member of the boards of directors of Motorola, Inc.,
Russell Corporation, J.B. Hunt Transport Services, Inc., and
Logility, Inc.
Dr. James L. Chitwood Dr. Chitwood is Senior Vice President of Parent, responsible
for operations outside North America. Dr. Chitwood joined
Parent in 1968, was named Senior Vice President of Parent in
1989, and Group Vice President, Specialty Business Group, in
1991. Dr. Chitwood was appointed Senior Vice President with
responsibility for Parent business organizations in October
1994 and assumed his current responsibilities in 1996. He
also served as a Vice President of Kodak from 1984 through
1993.
Betty W. DeVinney Mrs. DeVinney is Vice President, Communications and Public
Affairs of Parent. Mrs. DeVinney joined Parent in 1973. In
1991, she became Manager, Employment, was named Manager,
Community Relations, in 1995 and was appointed Manager,
Corporate Relations, in 1997. She assumed her current
position in 1998.
Harold L. Henderson Mr. Henderson joined Parent in 1997 as Senior Vice President
and General Counsel. Mr. Henderson served previously as
chief legal officer of The Firestone Tire & Rubber Company
from 1980 to 1985 and of RJR Nabisco, Inc. from 1985 to
1989. He was a consultant, commercial real estate developer,
and private investor from 1989 through 1996.
</TABLE>
I-3
<PAGE> 39
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
---- ------------------------------------------------------------
<S> <C>
Patrick R. Kinsey Mr. Kinsey is Vice President and Comptroller of Parent. Mr.
Kinsey joined Parent in 1967, was named Director, Internal
Auditing, in 1993 and became Director, Corporate Financial
Reporting, in 1996. He assumed his current position in 1998.
Roger K. Mowen, Jr. Mr. Mowen is Vice President, Customer Demand Chain, of
Parent. Mr. Mowen joined Parent in 1971. He was named Vice
President and General Manager, Polymer Modifiers, in 1991,
was named Superintendent of the Polymers Division in 1994,
and was appointed President, Carolina Eastman Division, in
1996. Mr. Mowen assumed his current position in 1998.
B. Fielding Rolston Mr. Rolston is Vice President, Human Resources and Health,
Safety, Environment, and Security, of Parent. Mr. Rolston
joined Parent in 1964 and was appointed Vice President,
Customer Service and Materials Management, of Parent in
1987. He assumed his current position in 1998.
Allan R. Rothwell Mr. Rothwell is Senior Vice President and Chief Financial
Officer of Parent. Mr. Rothwell joined Parent in 1969 and
was appointed Business Director, Industrial Intermediates,
in 1993. In 1994, he became Vice President and General
Manager, Container Plastics, was appointed Vice President,
Corporate Development and Strategy, in 1997, and assumed his
current position in 1998.
Darryl K. Williams Mr. Williams is Senior Vice President, Technology and
Quality, of Parent. Mr. Williams joined Parent in 1965. He
was appointed President of Eastman Chemical Japan Ltd., in
1992, was named Vice President, Asia Pacific Regional
Support Services, in 1993, was appointed Vice President,
Asia Pacific Sales, in 1994, and was named Senior Vice
President, Technology, in 1996. He assumed his current
position in 1998.
Garland S. Williamson Mr. Williamson is Vice President, Worldwide Manufacturing of
Parent. Mr. Williamson joined Parent in 1967. He was named
Vice President, Asia Pacific Manufacturing, in 1992, and was
appointed President, Texas Eastman Division, in 1996. Mr.
Williamson assumed his current position in 1998.
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
---- ------------------------------------------------------------
<S> <C>
Bruce E. Moore* Mr. Moore is Vice President and General Manager of Coatings,
Inks & Resins of Parent. He joined Parent in 1962 as a sales
trainee in the Chemicals Division, was named Director of
Marketing in the International Division in 1984 and Director
of Field Marketing in the Chemicals Division in 1986. In
1990, Mr. Moore became the Chemicals Division Director of
Product Management, was named Vice President of Asia Pacific
and Latin America Sales in 1991 and appointed to Director of
Eastman Chemical Asia Pacific Pte. Ltd. He was appointed to
his present position in 1998.
Allan R. Rothwell* Mr. Rothwell is President of the Purchaser. Mr. Rothwell is
also Senior Vice President and Chief Financial Officer of
Parent. Mr. Rothwell joined Parent in 1969 and was appointed
Business Director, Industrial Intermediates, in 1993. In
1994, he became Vice President and General Manager,
Container Plastics, was appointed Vice President, Corporate
Development and Strategy, in 1997, and assumed his current
position in 1998.
</TABLE>
I-4
<PAGE> 40
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
---- ------------------------------------------------------------
<S> <C>
Prentice McKibben Mr. McKibben is Treasurer and Secretary of the Purchaser.
Mr. McKibben is also Director, Corporate and Business
Development, of Parent. He joined Parent in 1974 and was
appointed Business Ventures Director in 1996, and named
Business Development Executive in 1997. He assumed his
current position with Parent in 1998.
</TABLE>
I-5
<PAGE> 41
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each stockholder
of the Company or his or her broker, dealer, commercial bank, trust company or
other nominee to the Depositary, at one of the addresses set forth below:
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight:
Reorganization Department Reorganization Department Reorganization Department
P. O. Box 3301 120 Broadway 85 Challenger Road,
South Hackensack, NJ 07606 13th Floor Mail Drop-Reorg
New York, NY 10271 Ridgefield Park, NJ 07660
</TABLE>
By Facsimile Transmission:
(For Eligible Institutions Only)
(201) 296-4293
Confirm Facsimile Transmission
By Telephone Only:
(201) 296-4860
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their telephone numbers and addresses set forth
below. Additional copies of this Offer to Purchase, the Letter of Transmittal,
the Notice of Guaranteed Delivery and all other tender offer materials may be
obtained from the Information Agent. Stockholders may also contact their broker,
dealer, commercial bank or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
KISSEL BLAKE
A Division of Shareholder Communications Corporation
110 Wall Street
New York, New York 10005
Banks and Brokers, Please Call: (212) 344-6733
All Others Call Toll-Free: (800) 554-7733
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
World Financial Center
North Tower
New York, New York 10281-1314
(212) 449-8971 (Call Collect)
<PAGE> 1
Exhibit (a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
LAWTER INTERNATIONAL, INC.
PURSUANT TO THE OFFER TO PURCHASE DATED MAY 4, 1999
BY
LIPSTICK ACQUISITION CORP.,
A WHOLLY OWNED SUBSIDIARY OF
EASTMAN CHEMICAL COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, JUNE 1, 1999, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
By Overnight:
By Mail: By Hand:
Reorganization Department
Reorganization Department Reorganization Department
85 Challenger Road,
P.O. Box 3301 120 Broadway
Mail Drop-Reorg
South Hackensack, NJ 07606 13th Floor
Ridgefield Park, NJ 07660
New York, NY 10271
</TABLE>
By Facsimile Transmission:
(For Eligible Institutions Only)
(201) 296-4293
Confirm Facsimile Transmission
By Telephone Only:
(201) 296-4860
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TO A NUMBER OTHER THAN AS
SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
THE INSTRUCTIONS CONTAINED WITHIN THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
Description of Shares Tendered
- --------------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Holder(s)
(Please Fill in, if Blank, Exactly as Name(s) Share Certificate(s) Tendered
Appear(s) on Share Certificate(s)) (Attach Additional List if Necessary)
- --------------------------------------------------------------------------------------------------------------------
Total Number of
Shares
Certificate Represented by Number of Shares
Number(s)* Certificate(s) Tendered**
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
Total Shares
- --------------------------------------------------------------------------------------------------------------------
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented by Share certificates delivered to
the Depositary are being tendered. See Instruction 4.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 2
This Letter of Transmittal is to be used by stockholders of Lawter
International, Inc. either if certificates evidencing Shares (as defined below)
are to be forwarded herewith or, unless an Agent's Message (as defined in the
Offer to Purchase, dated May 4, 1999 (the "Offer to Purchase")) is utilized, if
delivery of Shares is to be made by book-entry transfer to the account
maintained by ChaseMellon Shareholder Services, L.L.C. (the "Depositary") at The
Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the
procedures described in Section 3 of the Offer to Purchase.
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver confirmation of the book-entry transfer of their Shares into
the Depositary's account at the Book-Entry Transfer Facility (a "Book-Entry
Confirmation") and all other documents required hereby to the Depositary on or
prior to the Expiration Date (as defined in the Offer to Purchase) must tender
their Shares pursuant to the guaranteed delivery procedures set forth in Section
3 of the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO THE
BOOK-ENTRY TRANSFER FACILITY WILL NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE
THE FOLLOWING (ONLY PARTICIPANTS IN A BOOK-ENTRY TRANSFER FACILITY MAY
DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution:
-------------------------------------------------
Account Number:
----------------------------------------------------------------
Transaction Code Number:
-------------------------------------------------------
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s):
-----------------------------------------------
Window Ticket Number (if any):
-------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
----------------------------
Name of Institution that Guaranteed Delivery:
----------------------------------
If Delivered by Book-Entry Transfer:
Account Number:
----------------------------------------------------------------
Transaction Code Number:
-------------------------------------------------------
The names and addresses of the registered holders should be printed, if not
already printed above, exactly as they appear on the certificates representing
Shares tendered hereby. The certificates and number of Shares that the
undersigned wishes to tender should be indicated in the appropriate boxes.
- 2 -
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Lipstick Acquisition Corp., a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Eastman Chemical
Company, a Delaware corporation ("Parent"), the above-described shares of common
stock, par value $1.00 per share (the "Shares"), of Lawter International, Inc.,
a Delaware corporation (the "Company"), pursuant to the Purchaser's offer to
purchase all outstanding Shares at a price of $12.25 per Share, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated May 4, 1999 (the "Offer to
Purchase"), receipt of which is hereby acknowledged, and in this related Letter
of Transmittal (which, each as amended or supplemented from time to time,
together constitute the "Offer").
The undersigned understands that the Purchaser reserves the right to
transfer or assign, in whole at any time, or in part from time to time, to one
or more of its affiliates, the right to purchase all or any portion of the
Shares tendered pursuant to the Offer, but any such transfer or assignment will
not relieve the Purchaser of its obligations under the Offer and will in no way
prejudice the rights of tendering stockholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith, in accordance with the terms and subject to the conditions of
the Offer (including, if the Offer is extended or amended, the terms and
conditions of any such extension or amendment), the undersigned hereby sells,
assigns and transfers to, or upon the order of, the Purchaser all right, title
and interest in and to all the Shares that are being tendered hereby (and any
and all non-cash dividends, distributions, rights, other Shares or other
securities issued or issuable in respect thereof or declared, paid or
distributed in respect of such Shares on or after April 27, 1999, (collectively,
"Distributions")), and irrevocably constitutes and appoints the Depositary the
true and lawful agent and attorney-in-fact of the undersigned with respect to
such Shares and all Distributions, with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest),
to (i) deliver certificates for such Shares (and any and all Distributions), or
transfer ownership of such Shares (and any and all Distributions) on the account
books maintained by the Book-Entry Transfer Facility, together, in any such
case, with all accompanying evidences of transfer and authenticity to, or upon
the order of, the Purchaser, (ii) present such Shares (and any and all
Distributions) for transfer on the books of the Company and (iii) receive all
benefits and otherwise exercise all rights of beneficial ownership of such
Shares (and any and all Distributions), all in accordance with the terms of the
Offer.
By executing this Letter of Transmittal, the undersigned hereby irrevocably
appoints Allan R. Rothwell, Bruce E. Moore and David A. Beanblossom and each of
them, the attorneys-in-fact and proxies of the undersigned, each with full power
of substitution, to the full extent of such stockholder's rights with respect to
the Shares tendered hereby and accepted for payment by the Purchaser (and any
and all Distributions), to vote in such manner as each such attorney and proxy
or his substitute shall in his sole discretion deem proper, and otherwise act
with respect to all the Shares tendered hereby which have been accepted for
payment by the Purchaser prior to the time of such vote which the undersigned is
entitled to vote at any meeting of stockholders (whether annual or special and
whether or not an adjourned meeting) of the Company, or otherwise. This power of
attorney and proxy is coupled with an interest in the Company and in the Shares
and is irrevocable and is granted in consideration of, and is effective when, if
and to the extent that the Purchaser accepts such Shares for payment pursuant to
the Offer. Such acceptance for payment shall revoke, without further action, all
prior powers of attorney and proxies granted by the undersigned at any time with
respect to such Shares (and all Distributions) and no subsequent powers of
attorney or proxies will be given (and if given will be deemed not to be
effective) with respect thereto by the undersigned. The undersigned acknowledges
that in order for Shares to be deemed validly tendered, immediately upon the
acceptance for payment of such Shares, the Purchaser or the Purchaser's designee
must be able to exercise full voting and all other rights which inure to a
record and beneficial holder with respect to such Shares.
- 3 -
<PAGE> 4
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby (and any and all Distributions), and that when the same are
accepted for payment by the Purchaser, the Purchaser will acquire good,
marketable and unencumbered title thereto and to all Distributions, free and
clear of all liens, restrictions, charges and encumbrances, and the same will
not be subject to any adverse claim. The undersigned, upon request, shall
execute and deliver any additional documents deemed by the Depositary or the
Purchaser to be necessary or desirable to complete or confirm the sale,
assignment and transfer of the Shares tendered hereby (and any and all
Distributions). In addition, the undersigned shall remit and transfer promptly
to the Depositary for the account of the Purchaser all Distributions in respect
of the Shares tendered hereby, accompanied by appropriate documentation of
transfer, and, pending such remittance and transfer or appropriate assurance
thereof, the Purchaser shall be entitled to all rights and privileges as owner
of each such Distribution and may withhold the entire purchase price of the
Shares tendered hereby or deduct from such purchase price the amount or value of
such Distribution as determined by the Purchaser in its sole discretion.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, executors, personal and legal
representatives, administrators, trustees in bankruptcy, successors and assigns
of the undersigned. Except as stated in the Offer to Purchase, this tender is
irrevocable, provided that Shares tendered pursuant to the Offer may be
withdrawn at any time prior to their acceptance for payment.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
Instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer. The
undersigned recognizes that under certain circumstances set forth in the Offer
to Purchase, the Purchaser may not be required to accept for payment any of the
Shares tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the purchase price and/or return any
certificates for Shares not tendered or accepted for payment in the name(s) of
the registered holder(s) appearing above under "Description of Shares Tendered."
Similarly, unless otherwise indicated in the box entitled "Special Delivery
Instructions," please mail the check for the purchase price and/or return any
certificates evidencing Shares not tendered or accepted for payment (and any
accompanying documents, as appropriate) to the address(es) of the registered
holder(s) appearing above under "Description of Shares Tendered." In the event
that the boxes entitled "Special Payment Instructions" and "Special Delivery
Instructions" are both completed, please issue the check for the purchase price
and/or return any certificates evidencing Shares not tendered or accepted for
payment in the name(s) of, and mail such check and/or return such certificates
to, the person(s) so indicated. Unless otherwise indicated herein in the box
entitled "Special Payment Instructions," please credit any Shares tendered
herewith by book-entry transfer that are not accepted for payment by crediting
the account at the Book-Entry Transfer Facility designated above. The
undersigned recognizes that the Purchaser has no obligation, pursuant to the
"Special Payment Instructions," to transfer any Shares from the name of the
registered holder thereof if the Purchaser does not accept for payment any of
the Shares so tendered.
- 4 -
<PAGE> 5
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7 OF THIS LETTER OF TRANSMITTAL)
To be completed ONLY if the check for the purchase price of Shares accepted
for payment or certificates evidencing Shares not tendered or not accepted for
payment are to be issued in the name of someone other than the undersigned or if
Shares tendered hereby and delivered by book-entry transfer that are not
accepted for payment are to be returned by credit to an account maintained at
the Book-Entry Transfer Facility other than the account indicated above.
Issue check and/or Share certificates to:
Name:
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
- --------------------------------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
CREDIT SHARES DELIVERED BY BOOK-ENTRY TRANSFER AND NOT
PURCHASED TO THE BOOK-ENTRY TRANSFER FACILITY ACCOUNT.
---------------------------
(ACCOUNT NUMBER)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7 OF THIS
LETTER OF TRANSMITTAL)
To be completed ONLY if the check for the purchase price of Shares accepted
for payment or certificates evidencing Shares not tendered or not accepted for
payment are to be sent to someone other than the undersigned, or to the
undersigned at an address other than that shown under "Description of Shares
Tendered."
Mail check and/or Share certificates to:
Name:
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
- --------------------------------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
- 5 -
<PAGE> 6
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF HOLDER(S))
Dated: ________________ ____, 1999
(Must be signed by registered holder(s) exactly as name(s) appear(s) on Share
certificate(s) or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, please provide the following information. See
Instruction 5 of this Letter of Transmittal.)
Name(s):
----------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Please Print)
Name of Firm:
-----------------------------------------------------------------
Capacity (full title):
--------------------------------------------------------
Address:
----------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number:
-----------------------------------------------
Tax Identification or Social Security Number:
----------------------------------
(Complete Substitute Form W-9 Below)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5 OF THIS LETTER OF TRANSMITTAL)
Authorized Signature:
---------------------------------------------------------
Name(s):
----------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Please Print)
Title:
------------------------------------------------------------------------
Name of Firm:
-----------------------------------------------------------------
Address:
----------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number:
-----------------------------------------------
Dated: ________________ ____, 1999
- 6 -
<PAGE> 7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this document, shall include
any participant in the Book-Entry Transfer Facility's system whose name appears
on a security position listing as the owner of Shares) of Shares tendered
herewith, unless such holder(s) has completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" in
this Letter of Transmittal or (b) if such Shares are tendered for the account of
a financial institution that is a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the Securities
Transfer Agent's Medallion Program, the New York Stock Exchange Medallion
Signature Guarantee Program or the Stock Exchange Medallion Program (each, an
"Eligible Institution"). In all other cases, all signatures on this Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Certificates; Guaranteed Delivery
Procedures. This Letter of Transmittal is to be completed by stockholders of
the Company either if certificates for Shares are to be forwarded herewith or,
unless an Agent's Message is utilized, if a tender of Shares is to be made
pursuant to the procedures for delivery by book-entry transfer set forth in
Section 3 of the Offer to Purchase. For Shares to be validly tendered pursuant
to the Offer, (a) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), with any required signature guarantees, or an Agent's
Message in the case of a book-entry delivery, and any other documents required
by this Letter of Transmittal, must be received by the Depositary at one of the
Depositary's addresses set forth herein and either certificates or a timely
Book-Entry Confirmation for tendered Shares must be received by the Depositary
at one of such addresses, in each case prior to the Expiration Date (as defined
in the Offer to Purchase), or (b) the tendering stockholder must comply with the
guaranteed delivery procedures set forth below. If certificates are forwarded to
the Depositary in multiple deliveries, a properly completed and duly executed
Letter of Transmittal must accompany each such delivery.
Stockholders whose certificates for Shares are not immediately available,
who cannot deliver their certificates and all other required documents to the
Depositary prior to the Expiration Date or who cannot complete the procedures
for delivery by book-entry transfer on a timely basis may tender their Shares by
properly completing and duly executing the Notice of Guaranteed Delivery
pursuant to the guaranteed delivery procedure described in Section 3 of the
Offer to Purchase. Pursuant to such procedure: (a) such tender must be made by
or through an Eligible Institution; (b) a properly completed and duly executed
Notice of Guaranteed Delivery, substantially in the form provided by the
Purchaser herewith (or a facsimile thereof), must be received by the Depositary
prior to the Expiration Date; and (c) the certificates for all physically
tendered Shares, in proper form for transfer, or a Book-Entry Confirmation with
respect to all tendered Shares, together with this properly completed and duly
executed Letter of Transmittal (or facsimile thereof) with any required
signature guarantees, and any other documents required by this Letter of
Transmittal, must be received by the Depositary within three New York Stock
Exchange trading days after the date of execution of the Notice of Guaranteed
Delivery, all as described in Section 3 of the Offer to Purchase. A "trading
day" is any day on which the New York Stock Exchange is open for business.
THE METHOD OF DELIVERY OF SHARES, THIS LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY,
IS AT THE SOLE ELECTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY
WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN
THE CASE OF BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or a manually signed facsimile hereof), waive any
right to receive any notice of the acceptance of their Shares for payment.
- 7 -
<PAGE> 8
3. Inadequate Space. If the space provided herein under "Description of
Shares Tendered" is inadequate, the certificate numbers and/or the number of
Shares tendered should be listed on a separate signed schedule and attached
hereto.
4. Partial Tenders. (Not applicable to stockholders who tender by
book-entry transfer.) If fewer than all the Shares evidenced by any Share
certificate delivered to the Depositary herewith are to be tendered hereby, fill
in the number of Shares which are to be tendered in the box entitled "Number of
Shares Tendered." In such cases, new certificate(s) for the remainder of the
Shares that were evidenced by the certificates delivered to the Depositary
herewith will be sent to the person(s) signing this Letter of Transmittal,
unless otherwise provided in the box entitled "Special Delivery Instructions,"
as soon as practicable after the Expiration Date. All Shares evidenced by
certificates delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond exactly to the name(s) as
written on the face of the certificate(s) evidencing such Shares without
alteration, enlargement or any other change whatsoever.
If any Shares tendered hereby are owned of record by two or more persons,
all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in the names of
different holders on several certificates, it will be necessary to complete,
sign and submit as many separate Letters of Transmittal as there are different
registrations of such certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsement of certificates or separate stock powers
is required, unless payment is to be made to, or certificates evidencing Shares
not tendered or not purchased are to be issued in the name of, a person other
than the registered holder(s), in which case, the certificate(s) evidencing the
Shares tendered hereby must be endorsed or accompanied by appropriate stock
powers, in either case signed exactly as the name(s) of the registered holder(s)
appear(s) on such certificate(s). Signatures on such certificate(s) and stock
powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Share certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such certificate(s). Signatures on such
certificate(s) and stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal or any certificate(s) or stock powers are
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to the Purchaser of such person's authority so to act must be
submitted.
6. Stock Transfer Taxes. Except as otherwise provided in this Instruction
6, the Purchaser will pay or cause to be paid all stock transfer taxes with
respect to the sale and transfer of any Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price of any Shares purchased is
to be made to, or certificate(s) evidencing Shares not tendered or not purchased
are to be registered in the name of, a person other than the registered
holder(s), or if tendered certificates are registered in the name of any person
other than the person(s) signing this Letter of Transmittal, the amount of any
stock transfer taxes (whether imposed on the registered holder(s), such other
person or otherwise) payable on account of the transfer to such other person
will be deducted from the purchase price of such Shares purchased, unless
evidence satisfactory to the Purchaser of the payment of such taxes, or
exemption therefrom, is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATE(S) EVIDENCING THE SHARES
TENDERED HEREBY.
- 8 -
<PAGE> 9
7. Special Payment and Delivery Instructions. If a check for the purchase
price of any Shares tendered hereby is to be issued, or certificate(s)
evidencing Shares not tendered or not purchased are to be issued, in the name of
a person other than the person(s) signing this Letter of Transmittal or if such
check or any such certificate is to be sent to someone other than the person(s)
signing this Letter of Transmittal or to the person(s) signing this Letter of
Transmittal but at an address other than that shown in the box entitled
"Description of Shares Tendered," the appropriate boxes on this Letter of
Transmittal must be completed. Any stockholder(s) delivering Shares by
book-entry transfer may request that Shares not purchased be credited to such
account maintained at the Book-Entry Transfer Facility as such stockholder(s)
may designate in the box entitled "Special Payment Instructions." If no such
instructions are given, any such Shares not purchased will be returned by
crediting the account at the Book Entry Transfer Facility designated above as
the account from which such Shares were delivered.
8. Requests for Assistance or Additional Copies. Questions and requests
for assistance may be directed to the Dealer Manager or the Information Agent at
the addresses and telephone numbers set forth on the back cover of this Letter
of Transmittal. Additional copies of the Offer to Purchase, this Letter of
Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
obtained from the Information Agent at the address set forth below or from
brokers, dealers, commercial banks or trust companies.
9. Waiver of Conditions. Except as otherwise provided in the Offer to
Purchase, the Purchaser reserves the absolute right in its sole discretion to
waive, at any time or from time to time, any of the specified conditions of the
Offer, in whole or in part, in the case of any Shares tendered.
10. Substitute Form W-9. Each tendering stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to certify, under penalties of perjury, that such number is correct and that
such stockholder is not subject to backup withholding of federal income tax. If
a tendering stockholder has been notified by the Internal Revenue Service that
such stockholder is subject to backup withholding, such stockholder must cross
out item (2) of the Certification box of the Substitute Form W-9, unless such
stockholder has since been notified by the Internal Revenue Service that such
stockholder is no longer subject to backup withholding. Failure to provide the
information on the Substitute Form W-9 may subject the tendering stockholder to
31% federal income tax withholding with respect to any payments received
pursuant to the Offer and the Merger (as defined in the Offer to Purchase). If
the tendering stockholder has not been issued a TIN and has applied for one or
intends to apply for one in the near future, such stockholder should write
"Applied For" in the space provided for the TIN in Part I of the Substitute Form
W-9, and sign and date the Substitute Form W-9. If "Applied For" is written in
Part I and the Depositary is not provided with a TIN within 60 days, the
Depositary will withhold 31% on all payments of the purchase price to such
stockholder until a TIN is provided to the Depositary.
11. Lost, Destroyed or Stolen Certificates. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Transfer Agent, Harris Trust and Savings Bank, at (312)
360-5273. The stockholder will then be instructed as to the steps that must be
taken in order to replace the certificate(s). This Letter of Transmittal and
related documents cannot be processed until the procedures for replacing lost or
destroyed certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED, WITH ANY REQUIRED SIGNATURE GUARANTEES, OR, IN THE
CASE OF A BOOK-ENTRY TRANSFER, AN AGENT'S MESSAGE, TOGETHER WITH SHARE
CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED
DOCUMENTS, OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED
DELIVERY, MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under the U.S. federal income tax law, a stockholder whose tendered Shares
are accepted for payment is required by law to provide the Depositary (as payer)
with such stockholder's correct TIN on Substitute
- 9 -
<PAGE> 10
Form W-9 below. If such stockholder is an individual, the TIN is such
stockholder's social security number. If the Depositary is not provided with the
correct TIN, the stockholder may be subject to a $50 penalty imposed by the
Internal Revenue Service. In addition, payments that are made to such
stockholder with respect to Shares purchased pursuant to the Offer may be
subject to backup withholding of 31%.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit a Form W-8, signed under penalties of
perjury, attesting to such individual's exempt status. A Form W-8 can be
obtained from the Depositary. See the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional
instructions.
If backup withholding applies with respect to a stockholder, the Depositary
is required to withhold 31% of any payments made to such stockholder. Backup
withholding is not an additional tax. Rather, the tax liability of persons
subject to backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained from
the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of such stockholder's correct TIN by
completing the form below certifying (a) that the TIN provided on Substitute
Form W-9 is correct (or that such stockholder is awaiting a TIN), and (b) that
such stockholder is not subject to backup withholding because (i) such
stockholder has not been notified by the Internal Revenue Service that such
stockholder is subject to backup withholding as a result of a failure to report
all interest or dividends or (ii) the Internal Revenue Service has notified such
stockholder that such stockholder is no longer subject to backup withholding. To
prevent possible erroneous backup withholding, exempt stockholders (other than
certain foreign individuals) should certify in accordance with the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 that such stockholder is exempt from backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If the Shares are in more than one name or are not in the name
of the actual owner, consult the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional guidance on
which number to report. If the tendering stockholder has not been issued a TIN
and has applied for a number or intends to apply for a number in the near
future, the stockholder should write "Applied For" in the space provided for the
TIN in Part I, and sign and date the Substitute Form W-9. If "Applied For" is
written in Part I and the Depositary is not provided with a TIN within 60 days,
the Depositary will withhold 31% of all payments of the purchase price to such
stockholder until a TIN is provided to the Depositary.
- 10 -
<PAGE> 11
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: CHASEMELLON SHAREHOLDER SERVICES, L.L.C., AS DEPOSITARY
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PART I--PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND ----------------------------
SUBSTITUTE CERTIFY BY SIGNING AND DATING BELOW. SOCIAL SECURITY NUMBER
FORM W-9
OR
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE ----------------------------
EMPLOYER IDENTIFICATION NUMBER
(IF AWAITING TIN WRITE
"APPLIED FOR")
------------------------------------------------------------------------------------------
PART II -- FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING, SEE THE ENCLOSED GUIDELINES AND
PAYER'S REQUEST FOR COMPLETE AS INSTRUCTED THEREIN.
TAXPAYER IDENTIFICATION
NUMBER (TIN) AND CERTIFICATION -- UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
CERTIFICATION FOR
PAYEE EXEMPT FROM (1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER (OR A
BACKUP WITHHOLDING TAXPAYER IDENTIFICATION NUMBER HAS NOT BEEN ISSUED TO ME AND EITHER (a) I HAVE MAILED OR
DELIVERED AN APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE
APPROPRIATE INTERNAL REVENUE SERVICE ("IRS") OR SOCIAL SECURITY ADMINISTRATION
OFFICE OR (b) I INTEND TO MAIL OR DELIVER AN APPLICATION IN THE NEAR FUTURE. I
UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER WITHIN SIXTY
(60) DAYS, 31% OF ALL REPORTABLE PAYMENTS MADE TO ME THEREAFTER WILL BE WITHHELD
UNTIL I PROVIDE A NUMBER), AND
(2) I AM NOT SUBJECT TO BACKUP WITHHOLDING BECAUSE (a) I AM EXEMPT FROM BACKUP
WITHHOLDING, OR (b) I HAVE NOT BEEN NOTIFIED BY THE IRS THAT I AM SUBJECT TO BACKUP
WITHHOLDING AS A RESULT OF FAILURE TO REPORT ALL INTEREST OR DIVIDENDS OR (c) THE
IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP WITHHOLDING.
------------------------------------------------------------------------------------------
CERTIFICATE INSTRUCTIONS -- YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED
BY THE IRS THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING INTEREST
OR DIVIDENDS ON YOUR TAX RETURN. HOWEVER, IF AFTER BEING NOTIFIED BY THE IRS THAT YOU
WERE SUBJECT TO BACKUP WITHHOLDING YOU RECEIVED ANOTHER NOTIFICATION FROM THE IRS
STATING THAT YOU ARE NO LONGER SUBJECT TO BACKUP WITHHOLDING, DO NOT CROSS OUT ITEM (2).
(ALSO SEE INSTRUCTIONS IN THE ENCLOSED GUIDELINES.)
------------------------------------------------------------------------------------------
SIGNATURE ____________________ DATE _____ , 1999
NAME ________________________
ADDRESS ______________________
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE "APPLIED FOR"
IN THE SPACE PROVIDED FOR THE TIN IN PART I OF SUBSTITUTE FORM W-9.
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER HAS NOT BEEN ISSUED TO ME, AND EITHER
(1) I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE
INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY ADMINISTRATION OFFICE, OR (2) I INTEND TO MAIL OR DELIVER AN
APPLICATION IN THE NEAR FUTURE. I UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER BY THE TIME
OF PAYMENT, 31% OF ALL REPORTABLE PAYMENTS MADE TO ME WILL BE WITHHELD, BUT THAT SUCH AMOUNTS WILL BE REFUNDED TO
ME IF I PROVIDE A CERTIFIED TAXPAYER IDENTIFICATION NUMBER TO THE DEPOSITARY WITHIN (60) DAYS.
- ---------------------------------------------------------- --------------------------- , 1999
SIGNATURE DATE
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
- 11 -
<PAGE> 12
Questions and requests for assistance may be directed to the Information Agent
or the Dealer Manager as set forth below. Requests for copies of the Offer to
Purchase, the Letter of Transmittal and other related materials may be directed
to the Information Agent or to brokers, dealers, commercial banks or trust
companies.
The Information Agent for the Offer is:
KISSEL BLAKE
A Division of Shareholder Communications Corporation
110 Wall Street
New York, New York 10005
Banks and Brokers, Please Call: (212) 344-6733
ALL OTHERS CALL TOLL-FREE (800) 554-7733
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
World Financial Center
North Tower
New York, New York 10281-1314
(212) 449-8971 (Call Collect)
<PAGE> 1
Exhibit (a)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
LAWTER INTERNATIONAL, INC.
TO
LIPSTICK ACQUISITION CORP.,
A WHOLLY OWNED SUBSIDIARY OF
EASTMAN CHEMICAL COMPANY
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, JUNE 1, 1999, UNLESS THE OFFER IS EXTENDED.
This Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to accept the Offer (as defined below) if (i) certificates
("Certificates") representing shares of common stock, par value $1.00 per share
(the "Shares"), of Lawter International, Inc., a Delaware corporation (the
"Company"), are not immediately available, (ii) time will not permit all
required documents to reach ChaseMellon Shareholder Services, L.L.C. (the
"Depositary") prior to the Expiration Date (as defined in the Offer to Purchase)
or (iii) the procedures for book-entry transfer cannot be completed on a timely
basis. This Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by telegram or facsimile to the Depositary. See Section 3 of the
Offer to Purchase.
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight:
Reorganization Department Reorganization Department Reorganization Department
P.O. Box 3301 120 Broadway 85 Challenger Road,
South Hackensack, NJ 07606 13th Floor Mail Drop-Reorg
New York, NY 10271 Ridgefield Park, NJ 07660
By Facsimile Transmission:
(For Eligible Institutions Only)
(201) 296-4293
Confirm Facsimile Transmission
By Telephone Only:
(201) 296-4860
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION"
UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE> 2
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Lipstick Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of Eastman Chemical Company, a
Delaware corporation, upon the terms and subject to the conditions set forth in
the Offer to Purchase, dated May 4, 1999 (the "Offer to Purchase"), and the
related Letter of Transmittal (which, each as amended or supplemented from time
to time, together constitute the "Offer"), receipt of each of which is hereby
acknowledged, the number of Shares specified below pursuant to the guaranteed
delivery procedures described in Section 3 of the Offer to Purchase.
Number of Shares Tendered:
-------------------------------------------------
Certificate Nos. (if available):
- ---------------------------------------------------------------------------
Check box if Shares will be tendered by book-entry transfer: [ ]
Account Number at the Depository Trust
Company:
-------------------------------------------------------------------
Dated: ____________________________ , 1999
Names(s) of Record Holder(s):
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
(Please Print)
Address(es):
---------------------------------------------------------------
- ---------------------------------------------------------------------------
(Zip Code)
Area Code and Telephone Number:
- ---------------------------------------------------------------------------
Signature(s):
--------------------------------------------------------------
- ---------------------------------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a bank, broker, dealer, credit union,
savings association or other entity which is a member in good standing of the
Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
hereby (a) represents that the tender of Shares effected hereby complies with
Rule 14e-4 under the Securities Exchange Act of 1934, as amended and (b)
guarantees delivery to the Depositary, at one of its addresses set forth above,
of certificates representing the Shares tendered hereby in proper form for
transfer, or confirmation of book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company, in each case with delivery
of a properly completed and duly executed Letter of Transmittal (or facsimile
thereof) with any required signature guarantees, or an Agent's Message (as
defined in Section 3 of the Offer to Purchase), and any other documents required
by the Letter of Transmittal, within three New York Stock Exchange trading days
after the date of execution of this Notice of Guaranteed Delivery.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
Name of Firm:
-----------------------------------------------------------------
(Authorized Signature)
Address:
----------------------------------------------------------------------
(Include Zip Code)
Area Code and
Telephone Number:
-------------------------------------------------------------
Name:
------------------------------------------------------------------------
(Please Type or Print)
Title:
------------------------------------------------------------------------
Dated: ________________ __ , 1999
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. SUCH
CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE> 1
Exhibit (a)(4)
[MERRILL LYNCH LOGO]
World Financial Center
North Tower
New York, New York 10281-1314
(212) 449-8971 (Call Collect)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
LAWTER INTERNATIONAL, INC.
AT
$12.25 NET PER SHARE IN CASH
BY
LIPSTICK ACQUISITION CORP.,
A WHOLLY OWNED SUBSIDIARY OF
EASTMAN CHEMICAL COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, JUNE 1, 1999, UNLESS THE OFFER IS EXTENDED.
May 4, 1999
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been engaged by Lipstick Acquisition Corp., a Delaware corporation
(the "Purchaser") and a wholly owned subsidiary of Eastman Chemical Company, a
Delaware corporation ("Parent"), to act as Dealer Manager in connection with the
Purchaser's offer to purchase all outstanding shares of common stock, par value
$1.00 per share (the "Shares"), of Lawter International, Inc., a Delaware
corporation (the "Company"), at a price of $12.25 per Share, net to the seller
in cash, without interest thereon, upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated May 4, 1999 (the "Offer to Purchase"),
and the related Letter of Transmittal (which, each as amended or supplemented
from time to time, together constitute the "Offer") enclosed herewith. The Offer
is being made in connection with the Agreement and Plan of Merger, dated as of
April 27, 1999 (the "Merger Agreement"), by and among Parent, the Purchaser and
the Company. All capitalized terms used and not otherwise defined herein shall
have the meanings ascribed to them in the Offer to Purchase.
Please furnish copies of the enclosed materials to those of your clients
for whom you hold Shares registered in your name or in the name of your nominee.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE THAT NUMBER OF SHARES
WHICH, WHEN ADDED TO THE SHARES BENEFICIALLY OWNED BY PARENT OR THE PURCHASER
(IF ANY), REPRESENTS AT LEAST A MAJORITY OF THE SHARES OUTSTANDING ON A FULLY
DILUTED BASIS ON THE DATE SHARES ARE ACCEPTED FOR PAYMENT. THE OFFER IS ALSO
SUBJECT TO OTHER CONDITIONS SET FORTH IN THE OFFER TO PURCHASE. SEE SECTION 14
OF THE OFFER TO PURCHASE.
<PAGE> 2
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, or who hold
Shares registered in their own names, we are enclosing the following documents:
1. Offer to Purchase, dated May 4, 1999;
2. Letter of Transmittal to tender Shares for your use and for the
information of your clients. Facsimile copies of the Letter of
Transmittal (with manual signatures) may be used to tender Shares;
3. Notice of Guaranteed Delivery to be used to accept the Offer if the
certificates for Shares are not immediately available or time will
not permit all required documents to reach the Depositary prior to
the Expiration Date or the procedures for book-entry transfer
cannot be completed on a timely basis;
4. A printed form letter that may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of
your nominee, with space provided for obtaining such clients'
instructions with regard to the Offer;
5. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9; and
6. Return envelope addressed to the Depositary.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE
MERGER, AND DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO,
AND IN THE BEST INTERESTS OF, THE COMPANY'S STOCKHOLDERS AND UNANIMOUSLY
RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR
SHARES.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment and pay for all Shares
which are validly tendered prior to the Expiration Date and not theretofore
properly withdrawn when, as and if the Purchaser gives oral or written notice to
the Depositary of the Purchaser's acceptance of such Shares for payment. In all
cases, payment for Shares purchased pursuant to the Offer will be made only
after timely receipt by the Depositary of (i) the certificates evidencing such
Shares or timely confirmation of a book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company pursuant to the procedures
set forth in Section 3 of the Offer to Purchase, (ii) the Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, or an Agent's
Message (as defined in the Offer to Purchase) in connection with a book-entry
transfer and (iii) all other documents required by the Letter of Transmittal.
Neither Parent nor the Purchaser will pay any fees or commissions to any
broker or dealer or any other person (other than the Dealer Manager and the
Information Agent as described in "Fees and Expenses" of the Offer to Purchase)
in connection with the solicitation of tenders of Shares pursuant to the Offer.
The Purchaser will, however, upon request, reimburse you for customary mailing
and handling expenses incurred by you in forwarding the enclosed materials to
your clients. The Purchaser will pay or cause to be paid any stock transfer
taxes incident to the transfer to it of validly tendered Shares, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, JUNE 1, 1999, UNLESS THE OFFER IS
EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees and any other required documents, should be sent to the
Depositary, and certificates representing the tendered Shares should be
delivered or such Shares should be tendered by book-entry transfer, all in
accordance with the Instructions set forth in the Letter of Transmittal and the
Offer to Purchase. If holders of Shares wish to tender, but it is impracticable
for them to
- 2 -
<PAGE> 3
forward their certificates or other required documents prior to the Expiration
Date, a tender may be effected by following the guaranteed delivery procedures
specified under Section 3 of the Offer to Purchase.
Any inquiries you may have with respect to the Offer should be addressed to
the Dealer Manager or the Information Agent at their respective addresses and
telephone numbers set forth on the back cover page of the Offer to Purchase.
Additional copies of the enclosed materials may be obtained by calling the
Information Agent, Kissel Blake, at (212) 344-6733 or toll free (800) 554-7733,
or from brokers, dealers, commercial banks or trust companies.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON AS AN AGENT OF THE PURCHASER, PARENT, THE DEPOSITARY, THE
INFORMATION AGENT OR THE DEALER MANAGER, OR ANY AFFILIATE OF ANY OF THE
FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
DOCUMENTS ENCLOSED AND THE STATEMENTS CONTAINED THEREIN.
- 3 -
<PAGE> 1
EXHIBIT (a)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
LAWTER INTERNATIONAL, INC.
AT
$12.25 NET PER SHARE IN CASH
BY
LIPSTICK ACQUISITION CORP.,
A WHOLLY OWNED SUBSIDIARY OF
EASTMAN CHEMICAL COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, JUNE 1, 1999, UNLESS THE OFFER IS EXTENDED.
May 4, 1999
To Our Clients:
Enclosed for your consideration is the Offer to Purchase, dated May 4, 1999
(the "Offer to Purchase"), and the related Letter of Transmittal (which, each as
amended or supplemented from time to time, together constitute the "Offer") in
connection with the offer by Lipstick Acquisition Corp., a Delaware corporation
(the "Purchaser") and a wholly owned subsidiary of Eastman Chemical Company, a
Delaware corporation ("Parent"), to purchase all outstanding shares of common
stock, par value $1.00 per share (the "Shares"), of Lawter International, Inc.,
a Delaware corporation (the "Company"), at a price of $12.25 per Share, net to
the seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer. The Offer is being made in connection with
the Agreement and Plan of Merger, dated as of April 27, 1999, by and among
Parent, the Purchaser and the Company (the "Merger Agreement"). Also enclosed is
a Letter to Stockholders of the Company from John P. O'Mahoney, Chairman and
Chief Executive Officer of the Company, together with a
Solicitation/Recommendation Statement on Schedule 14D-9.
If a stockholder desires to tender Shares pursuant to the Offer and such
stockholder's certificates for Shares are not immediately available or time will
not permit all required documents to reach the Depositary (as defined in the
Offer to Purchase) prior to the Expiration Date (as defined in the Offer to
Purchase) or the procedure for book-entry transfer cannot be completed on a
timely basis, such Shares may nevertheless be tendered according to the
guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase.
See Instruction 2 of the Letter of Transmittal. Delivery of documents to the
Book-Entry Transfer Facility (as defined in the Offer to Purchase) in accordance
with the Book-Entry Transfer Facility's procedures does not constitute delivery
to the Depositary.
THE MATERIAL IS BEING SENT TO YOU AS THE BENEFICIAL OWNER OF SHARES HELD BY
US FOR YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. WE ARE THE HOLDER OF RECORD
OF SHARES HELD FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US
AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE ENCLOSED LETTER
OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED
BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish to have us
tender on your behalf any or all of the Shares held by us for your account, upon
the terms and subject to the conditions set forth in the Offer.
Your attention is invited to the following:
1. The tender price is $12.25 per Share, net to the seller in cash,
without interest thereon.
<PAGE> 2
2. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Tuesday, June 1, 1999, unless the Offer is extended.
3. The Offer is being made for all outstanding Shares.
4. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE
OFFER AND THE MERGER (AS DEFINED IN THE OFFER TO PURCHASE), AND DETERMINED
THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST
INTERESTS OF, THE COMPANY'S STOCKHOLDERS, AND UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES.
5. The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the Expiration Date that number
of Shares which, when added to the Shares beneficially owned by Parent or
the Purchaser (if any), represents at least a majority of the Shares
outstanding on a fully diluted basis on the date Shares are accepted for
payment. The Offer is also subject to other conditions set forth in the
Offer to Purchase.
6. Tendering stockholders of record who tender Shares directly will
not be obligated to pay brokerage fees or commissions or, except as set
forth in Instruction 6 of the Letter of Transmittal, stock transfer taxes
on the purchase of Shares by the Purchaser pursuant to the Offer.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and any supplements or amendments thereto. The Purchaser is not
aware of any state where the making of the Offer is prohibited by administrative
or judicial action pursuant to any valid state statute. If the Purchaser becomes
aware of any valid state statute prohibiting the making of the Offer or the
acceptance of Shares pursuant thereto, the Purchaser will make a good faith
effort to comply with such state statute. If, after such good faith effort, the
Purchaser cannot comply with such state statute, the Offer will not be made to
(nor will tenders be accepted from or on behalf of) the holders of Shares in
such state. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of the Purchaser by the Dealer Manager (as defined
in the Offer to Purchase) or one or more registered brokers or dealers which are
licensed under the laws of such jurisdiction.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form contained
in this letter. An envelope to return your instructions to us is enclosed. If
you authorize the tender of your Shares, all such Shares will be tendered unless
otherwise specified on the instruction form set forth in this letter. YOUR
INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A
TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
- 2 -
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE OFFER
TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
LAWTER INTERNATIONAL, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated May 4, 1999, and the related Letter of Transmittal
(which, each as amended or supplemented from time to time, together constitute
the "Offer"), in connection with the offer by Lipstick Acquisition Corp., a
Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Eastman
Chemical Company, a Delaware corporation ("Parent"), to purchase all outstanding
shares of common stock, par value $1.00 per share (the "Shares"), of Lawter
International, Inc., a Delaware corporation (the "Company").
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or, if no number is indicated below, all Shares) held by you
for the account of the undersigned, upon the terms and subject to the conditions
set forth in the Offer.
NUMBER OF SHARES TO BE TENDERED:*
- -------------------------------------------
Shares
- ---------------------------------------------------
Account Number
Dated: ________ __, 1999
SIGN HERE
- ----------------------------------------------------
Signature(s)
- ----------------------------------------------------
Please Type or Print Name(s)
- ----------------------------------------------------
Please Type or Print Address(es) Here
- ----------------------------------------------------
Area Code and Telephone Number
- ----------------------------------------------------
Taxpayer Identification or Social Security Number(s)
- ------------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
- 3 -
<PAGE> 1
Exhibit (a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER. -- Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e. 00-0000000. The table below will help determine the number
to give the payer.
<TABLE>
<CAPTION>
- ---------------------------------------------------------
FOR THIS TYPE OF ACCOUNT GIVE THE
SOCIAL
SECURITY
NUMBER OF --
- ---------------------------------------------------------
<C> <S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner of
(joint account) the account or, if
combined funds, any
one of the
individuals(1)
3. Husband and wife (joint The actual owner of
account) the account or, if
joint funds, either
person(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint The adult or, if the
account) minor is the only
contributor, the
minor(1)
6. Account in the name of The ward, minor, or
guardian or committee for a incompetent person(3)
designated ward, minor, or
incompetent person
7. a. A revocable savings trust The grantor-
account (in which grantor trustee(1)
is also trustee)
b. Any "trust" account that The actual owner(1)
is not a legal or valid
trust under State Law
8. Sole proprietorship account The owner(4)
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE
EMPLOYER
IDENTIFICATION
NUMBER OF --
- ---------------------------------------------------------
<C> <S> <C>
9. A valid trust, estate, or The legal entity (Do
pension not furnish the
identifying number of
the personal
representative or
trustee unless the
legal entity itself is
not designated in the
account title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization
account
12. Partnership account held in The partnership
the name of the business
13. Association, club, or other The organization
tax-exempt organization
14. A broker or registered The broker or nominee
nominee
15. Account with the Department The public entity
of Agriculture in the name
of a public entity (such as
a State or local government,
school district, or prison)
that receives agricultural
program payments
</TABLE>
- ---------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE:If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you do not know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
resident individuals), Form SS-4, Application for Employer Identification Number
(for businesses and all other entities), or Form W-7 for International Taxpayer
Identification Number (for alien individuals required to file U.S. tax returns),
at an office of the Social Security Administration or the Internal Revenue
Service.
To complete the Substitute Form W-9, if you do not have a taxpayer
identification number, write "Applied For" in the space for the taxpayer
identification number in Part 1, sign and date the Form, and give it to the
requester. Generally, you will then have 60 days to obtain a taxpayer
identification number and furnish it to the requester. If the requester does not
receive your taxpayer identification number within 60 days, backup withholding,
if applicable, will begin and will continue until you furnish your taxpayer
identification number to the requester.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan, or a custodial account under section 403(b)(7).
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- A foreign government, or a political subdivision, agency or instrumentality
thereof.
- An international organization or any agency or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a nonexempt trust described in
section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals.
Note: You may be subject to backup withholding if this interest is $600 or
more and is paid in the course of the payer's trade or business and you have
not provided your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to non-resident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file a Substitute Form W-9 to avoid
possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND
RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE
DIVIDENDS, ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE. -- Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Payers must generally withhold 31%
of taxable interest, dividend, and certain other payments to a payee who does
not furnish a taxpayer identification number to a payer. Certain penalties may
also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you
fail to furnish your taxpayer identification number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS. -- If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
under-payment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE
<PAGE> 1
EXHIBIT (a)(7)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares (as defined below). The Offer is made solely by the Offer
to Purchase dated May 4, 1999 and the related Letter of Transmittal and is
being made to all holders of Shares. Lipstick Acquisition Corp. is not aware of
any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. If Lipstick Acquisition
Corp. becomes aware of any valid state statute prohibiting the making of the
Offer or the acceptance of the Shares pursuant thereto, Lipstick Acquisition
Corp. will make a good faith effort to comply with such statute or seek to
have such statute declared inapplicable to the Offer. If, after such good faith
effort, Lipstick Acquisition Corp. cannot comply with such state statute, the
Offer will not be made to (nor will tenders be accepted from or on behalf of)
holders of Shares in any such state. In any jurisdiction where securities, blue
sky or other laws require the Offer to be made by a licensed broker or dealer,
the Offer shall be deemed to be made on behalf of Lipstick Acquisition Corp. by
Merrill Lynch, Pierce, Fenner & Smith Incorporated or one or more registered
brokers or dealers licensed under the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
LAWTER INTERNATIONAL, INC.
AT
$12.25 NET PER SHARE IN CASH
BY
LIPSTICK ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
EASTMAN CHEMICAL COMPANY
Lipstick Acquisition Corp., a Delaware corporation (the "Purchaser")
and a wholly owned subsidiary of Eastman Chemical Company, a Delaware
corporation ("Parent"), is offering to purchase all outstanding shares of common
stock, par value $1.00 per share (the "Shares"), of Lawter International, Inc.,
a Delaware corporation (the "Company"), at a price of $12.25 per Share, net to
the seller in cash, without interest thereon (the "Offer Price"), upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
May 4, 1999 (the "Offer to Purchase"), and the related Letter of Transmittal
(which, together with any amendments or supplements thereto, collectively
constitute the "Offer").
<PAGE> 2
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| THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, |
| NEW YORK CITY TIME, ON TUESDAY, JUNE 1, 1999, |
| UNLESS THE OFFER IS EXTENDED. |
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The Offer is being made pursuant to an Agreement and Plan of Merger,
dated as of April 27, 1999 (the "Merger Agreement"), by and among Parent, the
Purchaser and the Company. Pursuant to the Merger Agreement and the Delaware
General Corporation Law, as amended (the "DGCL"), as soon as practicable after
the completion of the Offer and satisfaction or waiver, if permissible, of all
conditions set forth in the Merger Agreement, including the purchase of Shares
pursuant to the Offer and the approval and adoption of the Merger Agreement by
the stockholders of the Company (if required by applicable law), the Purchaser
will be merged with and into the Company (the "Merger") and each Share then
outstanding, other than Shares held by (i) the Company or any of its
subsidiaries, (ii) Parent or any of its subsidiaries, including the Purchaser
and (iii) stockholders who properly perfect their dissenters' rights under the
DGCL, will be converted into the right to receive $12.25 in cash or any higher
price per Share paid in the Offer (the "Merger Consideration"), without interest
thereon.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER
AND THE MERGER, AND DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE
FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY'S STOCKHOLDERS, AND
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR
SHARES.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER
TO PURCHASE) THAT NUMBER OF SHARES WHICH, WHEN ADDED TO THE SHARES BENEFICIALLY
OWNED BY PARENT OR THE PURCHASER (IF ANY), REPRESENTS AT LEAST A MAJORITY OF THE
SHARES OUTSTANDING ON A FULLY DILUTED BASIS ON THE DATE SHARES ARE ACCEPTED FOR
PAYMENT PURSUANT TO THE OFFER.
For purposes of the Offer, the Purchaser will be deemed to have
accepted for payment, and thereby purchased, tendered Shares if, as and when the
Purchaser gives oral or written notice to ChaseMellon Shareholder Services,
L.L.C. (the "Depositary") of the Purchaser's acceptance of such Shares for
payment. Upon the terms and subject to the conditions set forth in the Offer,
payment for Shares accepted pursuant to the Offer will be made by deposit of
the aggregate purchase price therefor with the Depositary, which will act as
agent for tendering stockholders for the purpose of receiving payment from the
Purchaser and transmitting payment to such tendering stockholders. UNDER NO
CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE PAID BY THE
PURCHASER BY REASON OF ANY DELAY IN MAKING SUCH PAYMENT. In all cases, payment
for Shares tendered and accepted for payment pursuant to the Offer will be made
only after timely receipt by the Depositary of (i)(A) certificates evidencing
such Shares ("Share Certificates") or (B) a timely book-entry confirmation of
the book-entry transfer of such Shares into the Depositary's account at the
Book-Entry Transfer Facility (as defined in the Offer to Purchase), pursuant to
Section 3 of the Offer to Purchase, (ii)(A) the Letter of Transmittal (or
facsimile thereof) properly completed and duly executed or (B) an Agent's
Message (as defined in the Offer to Purchase) in connection with a book-entry
transfer and (iii) any other documents required by the Letter of Transmittal.
<PAGE> 3
Except as otherwise provided in Section 4 of the Offer to Purchase,
tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered
pursuant to the Offer may be withdrawn at any time prior to the Expiration Date
and, unless theretofore accepted for payment by the Purchaser pursuant to the
Offer, may also be withdrawn at any time after July 2, 1999. For a withdrawal to
be effective, a written or facsimile transmission notice of withdrawal must be
timely received by the Depositary at one of its addresses set forth on the back
cover of the Offer to Purchase. Any such notice of withdrawal must specify the
name of the person who tendered the Shares to be withdrawn, the number of Shares
to be withdrawn and (if Share Certificates have been tendered) the name of the
registered holder, if different from that of the person who tendered such
Shares. If Share Certificates evidencing Shares to be withdrawn have been
delivered or otherwise identified to the Depositary, then prior to the release
of such Share Certificates, the serial numbers shown on the particular
certificates evidencing the Shares to be withdrawn must be submitted to the
Depositary, and the signature(s) on the notice of withdrawal must be guaranteed
by an Eligible Institution (as defined in the Offer to Purchase), unless such
Shares have been tendered for the account of an Eligible Institution. If Shares
have been tendered pursuant to the procedure for book-entry transfer as set
forth in Section 3 of the Offer to Purchase, any notice of withdrawal must also
specify the name and number of the account at the Book-Entry Transfer Facility
to be credited with the withdrawn Shares, in which case a notice of withdrawal
will be effective if delivered to the Depositary by any method of delivery
described in Section 4 of the Offer to Purchase. Withdrawals of Shares may not
be rescinded and any Shares properly withdrawn will thereafter be deemed not
validly tendered for purposes of the Offer. However, withdrawn Shares may be
retendered by again following one of the procedures described in Section 3 of
the Offer to Purchase at any time prior to the Expiration Date. All questions as
to the form and validity (including time of receipt) of notices of withdrawal
will be determined by the Purchaser in its sole discretion, which determination
will be final and binding.
The term "Expiration Date" shall mean 12:00 Midnight, New York City
time, on Tuesday, June 1, 1999, unless and until the Purchaser, in accordance
with the terms of the Merger Agreement, shall have extended the period of time
for which the Offer is open, in which event the term "Expiration Date" shall
mean the latest time and date at which the Offer, as so extended by the
Purchaser, shall expire. Any such extension will be followed as promptly as
practicable by a public announcement thereof not later than 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date of the Offer.
Subject to the terms of the Merger Agreement and the applicable
regulations of the Securities and Exchange Commission, the Purchaser expressly
reserves the right, in its sole discretion, at any time or from time to time, to
extend the period of time during which the Offer is open and thereby delay
acceptance for payment of, and the payment for, any Shares by giving oral or
written notice of such extension to the Depositary. During any such extension,
all Shares previously tendered and not withdrawn will remain subject to the
Offer, subject to the rights of a tendering stockholder to withdraw such Shares.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of
the General Rules and Regulations under the Exchange Act is contained in the
Offer to Purchase and is incorporated herein by reference.
The Company has provided the Purchaser with the Company's stockholder
lists and security position listings for the purpose of disseminating the Offer
to holders of Shares. The Offer to Purchase, the related Letter of Transmittal
and other relevant materials will be mailed to record holders of Shares and will
be furnished to brokers, dealers, banks, trust companies and similar persons
whose names, or the names of whose nominees, appear on the stockholder lists,
or, if applicable, who are listed as participants in a clearing agency's
security position listing, for subsequent transmittal to beneficial owners of
Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
<PAGE> 4
Questions and requests for assistance may be directed to the
Information Agent or the Dealer Manager at their respective addresses and
telephone numbers set forth below. Requests for copies of the Offer to Purchase,
the Letter of Transmittal and other related materials may be directed to the
Information Agent or to brokers, dealers, commercial banks or trust companies.
No fees or commissions will be payable by the Purchaser to any broker, dealer
or other person (other than the Information Agent and the Dealer Manager) for
soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
KISSEL BLAKE & CO.
A Division of Shareholder Communications Corporation
110 Wall Street
New York, New York 10005
Banks and Brokers, Please Call: (212) 344-6733
ALL OTHERS CALL TOLL-FREE (800) 554-7733
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
World Financial Center
North Tower
New York, New York 10281-1314
(212) 449-8971 (Call Collect)
May 4, 1999
<PAGE> 1
Exhibit (a)(9)
For Immediate Release
Tuesday, May 4, 1999
EASTMAN CHEMICAL COMPANY:
Rod Irvin, APR
Director, Corporate Communications
PHONE: (423) 229-4008
EMAIL: [email protected]
EASTMAN CHEMICAL COMMENCES $12.25 PER SHARE
TENDER OFFER FOR ALL OUTSTANDING SHARES OF
LAWTER INTERNATIONAL, INC.
KINGSPORT, Tenn. -- May 4, 1999 -- Eastman Chemical Company (NYSE: EMN)
announced today that its wholly-owned subsidiary, Lipstick Acquisition Corp.,
has commenced a cash tender offer for all the outstanding shares of Lawter
International, Inc. (NYSE: LAW) common stock at a price of $12.25 per Lawter
share. The tender offer is scheduled to expire at 12:00 midnight, New York City
time, on Tuesday, June 1, 1999, unless extended.
Following the completion of the tender offer, Eastman intends to consummate a
second step merger in which all remaining Lawter stockholders will also receive
the same cash price paid in the tender offer.
As previously announced, on April 27, 1999, Eastman, Lipstick and Lawter signed
a definitive merger agreement for the acquisition of Lawter for $12.25 per share
in cash. Lawter's Board of Directors has unanimously approved the tender offer
and the merger and determined that the tender offer and the merger are in the
best interests of Lawter's stockholders. The Lawter Board unanimously
recommended that Lawter stockholders accept the Eastman offer and tender their
shares. Lawter will mail its formal recommendation to stockholders at the same
time Eastman mails its tender offer materials.
The tender offer is conditioned upon, among other things, (1) there being
validly tendered and not withdrawn before the expiration date, a number of
shares, which when added to the number of shares beneficially owned by Eastman
and Lipstick, will represent a majority of the total number of outstanding
shares of Lawter on a fully diluted basis at the time the shares are accepted
for payment pursuant to the offer; and (2) expiration or termination of any
applicable waiting period under the
<PAGE> 2
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and any foreign antitrust
or competition laws or regulations. The complete terms and conditions of the
tender offer are set forth in the offering documents being filed today with the
Securities and Exchange Commission.
Merrill Lynch & Co. is acting as Dealer Manager for Eastman's offer and Kissel
Blake is acting as Information Agent. Copies of Eastman's tender offer materials
can be obtained from the Information Agent by calling (212) 344-6733.
Headquartered in Kingsport, Tenn., Eastman manufactures and markets plastics,
chemicals and fibers. The company employs 16,000 people in more than 30
countries and had 1998 sales of US$4.48 billion
# # #
2
<PAGE> 1
Exhibit (c)(3)
PERSONAL AND CONFIDENTIAL
LAWTER INTERNATIONAL, INC. CONFIDENTIALITY AGREEMENT
Dear Mr. Rothwell:
In connection with our consideration of a possible negotiated transaction
between Lawter International, Inc. ("Lawter") and Eastman Chemical Company, (a
"Transaction"), each of us, and our respective advisors and agents is prepared
to make available to the other certain information which is non-public,
confidential or proprietary in nature.
By execution of this letter agreement (the "Agreement"), we agree to treat
confidentially all such information whether written or oral (the "Evaluation
Material"), and to observe the terms and conditions set forth herein. We
further agree to be responsible for any breach of this Agreement by any of our
directors, officers, employees, partners, affiliates, agents, advisors or
representatives (hereinafter, "Representatives") having access to any of the
Evaluation Material.
For the purposes of this Agreement, Evaluation Material shall include, without
limitation, all information, data, reports, analyses, compilations, studies,
interpretations, projections, forecasts, records, and other materials (whether
prepared by Lawter or Eastman as the case may be, or otherwise and in whatever
form maintained, whether documentary, computerized or otherwise), regardless of
the form of communications, that contain or otherwise reflect information
concerning Lawter or Eastman as the case may be, that we or our Representatives
may be provided by or on behalf of Lawter or Eastman, as the case may be, in
the course of our evaluation of a possible Transaction. The term "Evaluation
Material" shall also include all information, data, reports, analyses,
computations, studies, interpretations, projections, forecasts, records, notes,
memoranda, summaries or other materials in whatever form maintained, whether
documentary, computerized or otherwise, whether prepared by us or our
Representatives or others, that contain or otherwise reflect or are based upon,
in whole or in part, any such Evaluation Material or that reflect our review
of, or interest in, all or any portion of Lawter or Eastman, as the case may
be, (the "Notes").
This Agreement shall be inoperative as to those particular portions of the
Evaluation Material that (i) have been generally available to the public, or
become generally available to the public other than as result of a disclosure
by you or any of your Representatives, (ii) were available to us on a
non-confidential basis prior to the disclosure of such Evaluation Material to
us pursuant to this Agreement, provided that
<PAGE> 2
the source of such information was not known by us or any of our
Representatives, after reasonable investigation, to be bound by a
confidentiality agreement with other contractual, legal or fiduciary obligation
of confidentiality to Lawter or Eastman, as the case may be, or any of its
affiliates with respect to such material or (iii) become available to us on a
non-confidential basis from a source other than Lawter or Eastman as the case
may be, or its agents, advisors or Representatives provided that the source of
such information was not known by us or any of our Representatives, after
reasonable investigation, to be bound by a confidentiality agreement with or
other contractual, legal or fiduciary obligation of confidentiality to Lawter
or Eastman as the case may be, or any of its affiliates with respect to such
material.
We agree that we will not use the Evaluation Material for any purpose other
than determining whether we wish to enter into a Transaction. We agree not to
disclose or allow disclosure to others of any Evaluation Material; provided
that, subject to the second paragraph of this agreement, we may disclose
Evaluation Material to our employees or Representatives to the extent necessary
to permit such employees or Representatives to assist us in making the
determination referred to in the prior sentence. We shall take all reasonable
measures (including but not limited to court proceedings), at each of our sole
expense, to restrain our Representatives from prohibited or unauthorized
disclosure or using the Evaluation Material in any way directly or indirectly
detrimental to the other party. In particular we agree that for a period of 24
months from the date of the signing of this Agreement we and our affiliates
will not knowingly, as a result of knowledge or information obtained from the
Evaluation Material in connection with a possible Transaction: (i) divert or
attempt to divert any business or customer of the other party or any of its
affiliates; nor (ii) employ or attempt to employ or divert an employee of the
other party. It is understood the preceding sentence is not intended to apply
to activities undertaken by either of us in the ordinary course of business
without relying on the Evaluation Material.
In addition, we agree that we will not make any disclosure (i) that we are
having or have had discussions, or that we have received Evaluation Material
from the other party concerning a Transaction, (ii) that we are considering a
possible Transaction or (iii) concerning any discussions related to a possible
Transaction, including the status thereof, any termination thereof, any
decision on our part to no longer consider any such Transaction or any of the
terms, conditions or other facts with respect thereto; provided that such
disclosure must be made by us in order that we not commit a violation of law
and, prior to such disclosure, each of us promptly advises and consults the
other party and its legal counsel concerning the information Lawter or Eastman,
as the case may be, proposes to disclose. The term "person" as used in this
letter shall be broadly interpreted to include, without limitation, the media
and any corporation, partnership, group, individual or other entity.
Although we have endeavored to include in the Evaluation Material information
known to us which we believe to be relevant for the purpose of this
investigation, we
2
<PAGE> 3
understand and agree that none of Lawter or Eastman as the case may be, or any
of our Representatives or affiliates, agents, advisors or representatives (i)
has made or makes any representation or warranty, expressed or implied, as to
the accuracy or completeness of the Evaluation Material or (ii) shall have any
liability whatsoever to the other party or its Representatives relating to or
resulting from the use of the Evaluation material or any errors therein or
omissions therefrom.
Without limiting the generality of the immediately preceding paragraph, the
Evaluation Material may include certain statements, estimates and projections
provided by a party with respect to the anticipated future performance of the
business. Such statements, estimates and projections reflect various
assumptions made by such party concerning anticipated results, which
assumptions may or may not prove to be correct. No representations are made as
to the accuracy of such assumptions, statements, estimates or projections,
including the budget. The only information that will have any legal effect will
be specifically represented in a definitive purchase or merger agreement, in no
event will such definitive agreement contain any representation as to the
projections.
In the event that either of us or anyone to whom we transmit any Evaluation
Material in accordance with this Agreement is requested or required (by
deposition, interrogatories, requests for information or documents in legal
proceedings, subpoenas, civil investigative demand or similar process), in
connection with any proceeding, to disclose any Evaluation Material, we will
give the other party prompt written notice of such request or requirement so
that the other party may seek an appropriate protective order or other remedy
and/or waive compliance with the provisions of this Agreement, and we will
cooperate with the other party to obtain such protective order. In the event
that such protective order or other remedy is not obtained or Lawter or as the
case may be, waives compliance with the relevant provisions of this Agreement,
we (or such other persons to whom such request is directed) will furnish only
that portion of the Evaluation Material which, in the opinion of our counsel,
is legally required to be disclosed. It is further agreed that, if in the
absence of a protective order we (or such other persons to whom such request is
directed) are nonetheless legally compelled to disclose such information, we
may make such disclosure without liability hereunder, provided that we give the
other party notice of the information to be disclosed as far in advance of its
disclosure as is practicable and, upon the other party's request, use our
reasonable efforts to obtain assurances that confidential treatment will be
accorded to such information and, provided further, that such disclosure was
not caused by and did not result from a previous disclosure by Lawter or
Eastman as the case may be, or any of its Representatives not permitted
hereunder.
If we decide that we do not wish to proceed with a Transaction, we will
promptly notify the other party of that decision. In that case, or if either of
us shall elect at any time to terminate further access by the other party to
the Evaluation Material for any reason, we will promptly redeliver to the other
party or destroy all copies of the Evaluation Material in the possession of us
or our affiliates or our Representatives and will destroy all Notes.
3
<PAGE> 4
Notwithstanding, the return or destruction of Evaluation Material and Notes, we
and our Representatives will continue to be bound by our obligations of
confidentiality and other obligations hereunder.
We understand that (i) each of us shall conduct this process for a possible
Transaction as each of us in our sole discretion shall determine (including,
without limitation, negotiating with any prospective third party and entering
into definitive agreements without prior notice to the other party or any other
person), (ii) any procedures relating to such Transaction may be changed at any
time without notice to the other party or any other person, (iii) each of us
shall have the right to reject or accept any potential buyer, proposal or
offer, for any reason whatsoever, in our sole discretion, and (iv) neither
Lawter nor Eastman as the case may be, nor any of its Representatives shall
have any claims whatsoever against the other party or its Representatives or
any of their respective directors, officers, stockholders, owners, affiliates
or agents arising out of our relating to the Transaction (other than under this
agreement and other than those against the parties to a definitive agreement
with Lawter or Eastman as the case may be, in accordance with the terms
thereof).
We agree that unless and until a definitive agreement between us with respect
to any Transaction has been executed and delivered, neither of us will be under
any legal obligation of any kind whatsoever with respect to such Transaction.
We agree that money damages would not be sufficient remedy for any breach of
this Agreement by either of us or our Representatives, that in addition to all
other remedies we shall be entitled to specific performance and injunctive or
other equitable relief as a remedy for any such breach, and we further agree to
waive, and to use our best efforts to cause our Representatives to waive, any
requirement for the securing or posting of any bond in connection with such
remedy. In the event of litigation relating to this letter agreement, if a
court of competent jurisdiction determines that Lawter or Eastman as the case
may be, or any of its Representatives has breached this letter agreement, such
party shall be liable and pay to the other party the reasonable legal fees
incurred by the other party in connection with such litigation, including any
appeal therefrom.
Each of us reserves the right to assign its rights, powers and privileges under
this letter agreement (including, without limitation, the right to enforce the
terms of this letter agreement) to any person who enters into a Transaction
with such party.
Each of us hereby acknowledges that we are aware and that we have advised such
of our employees or Representatives who are informed as to the matters which
are the subject of this agreement, that the United States securities laws
prohibit any person who has received from an issuer material, non-public
information from purchasing or selling securities of such issuer or from
communicating such information to any other person under circumstances in which
it is reasonably foreseeable that such person is likely to purchase or sell
such securities.
4
<PAGE> 5
In addition, each of us, upon the receipt of proprietary, non-public,
confidential information from the other party, hereby agrees that we will not
propose to the other company or any other person any transaction between us and
the other company and/or its security holders or involving any of its
securities or security holders unless the other company has requested in
writing that we make such a proposal, and that we will not acquire, or assist,
advise or encourage any other persons in acquiring, directly or indirectly,
control of the other company or any of the other company's securities,
businesses or assets for a period of two years from the date of this Agreement
unless the other company shall have consented in advance in writing to such
acquisition.
All modifications of, waivers of and amendments of this Agreement or any part
hereof must be in writing signed on behalf of each of us. We acknowledge that
the other party is intended to be benefited by this Agreement and that each of
us shall be entitled, either alone or together with our representatives or
advisors, to enforce this Agreement and to obtain for itself the benefit of any
remedies that may be available for the breach hereof.
It is further understood and agreed that no failure to delay by either of us in
exercising any right, power or privilege under this Agreement shall operate as
a waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise of any right, power or privilege hereunder.
We hereby irrevocably and unconditionally submit to the exclusive jurisdiction
of any State or Federal court sitting in New York over any suit, action or
proceeding arising out of or relating to this letter. We hereby agree that
service of any process, summons, notice or document by U.S. registered mail
addressed to us shall be effective service of process for any action, suit or
proceeding brought against us in any such court. We hereby irrevocably and
unconditionally waive any objection to the laying of venue of any such suit,
action or proceeding brought in any such court and any claim that any such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. We agree that a final judgment in any such suit, action or
proceeding brought in any such court shall be conclusive and binding upon us
and may be enforced in any other courts to whose jurisdiction we are or may be
subject, by suit upon such judgment.
In the event that any provision or portion of this letter is determined to be
invalid or unenforceable for any reason, in whole or in part, the remaining
provisions of this letter shall be unaffected thereby and shall remain in full
force and effect to the fullest extent permitted by applicable law.
This Agreement shall be governed by, and construed and enforced in accordance
with, the laws of New York. The obligation to hold the evaluation material
confidential shall expire two years from the date of this agreement.
5
<PAGE> 6
We have indicated our agreement with the foregoing by signing, dating, and
exchanging a copy of this Agreement, which constitutes our agreement with
respect to the matters set forth herein.
LAWTER INTERNATIONAL, INC. EASTMAN CHEMICAL COMPANY
/s/ JOHN P. O'MAHONEY /s/ BRUCE E. MOORE
- ------------------------------ ------------------------------------------
(signature) (signature)
Chairman and CFO V.P. and General Manager (Inks & Resins
Business)
November 3, 1998 October 30, 1998
- ---------------- ----------------
(Date) (Date)
6
<PAGE> 1
Exhibit (c)(4)
CONFORMED COPY
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of April 27, 1999, between Eastman Chemical
Company, a Delaware corporation ("Company"), Lawter International, Inc., a
Delaware corporation ("Lawter"), and John P. O'Mahoney (hereinafter referred to
as the "Employee"),
WITNESSETH:
WHEREAS, the Employee currently serves as the Chairman and Chief
Executive Officer of Lawter, and in such connection Lawter and the Employee
have executed an Employment Agreement between such parties dated October 24,
1996 (the "Prior Employment Agreement"); and
WHEREAS, the Company has commenced certain actions which may lead to
the acquisition of a majority of issued and outstanding common stock of Lawter
by the Company (with the date the majority of such issued and outstanding stock
is acquired by the Company being referred to herein as the "Acquisition Date",
provided that the Acquisition Date shall not be later than October 31, 1999);
and
WHEREAS, because of Employee's extensive experience and his
familiarity with the affairs of Lawter, and because of the significant
challenges in consumating the acquisition of Lawter and in integrating the
business of Lawter with the Company's business, the Company wishes to assure
that it will continue to have the Employee available to perform duties for the
Company; and
WHEREAS, the Employee is willing to commit to (i) the performance of
his services for the Company under the terms and conditions set forth herein,
and (ii) refraining from competition with the Company or disclosing
confidential information of the Company for 18 months following his termination
of employment with the Company;
NOW, THEREFORE, in consideration of the mutual promises herein
contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto as follows:
1. Employment.
The parties hereto agree that, as of the Acquisition Date (as defined
in the Recitals to this Agreement), and provided that the Employee is serving
as an employee of Lawter at that time, (a) the Company will employ the Employee
and the Employee hereby accepts such employment on the terms and conditions set
forth herein; and (b) the Employee as of such date releases and waives in their
entirety any and all rights he or any person or entity claiming through him may
have under the Prior Employment Agreement. It is understood that the Prior
Employment Agreement will remain in effect pursuant to its terms until the
Acquisition Date.
<PAGE> 2
2. Term of Employment.
(a) Subject to the provisions for termination set forth herein, the term
of the Employee's employment hereunder shall commence on the Acquisition Date
and shall extend until the second anniversary of the Acquisition Date. This
period shall be known as the "Employment Period".
(b) At the conclusion of the Employment Period and at on each
anniversary thereof, this Agreement shall automatically be extended for one
additional year unless the Company gives to the Employee (or vice versa) notice
of nonrenewal of the Agreement at least sixty (60) days prior to the date such
contract extension would begin.
3. Position and Duties
(a) The Employee's initial position shall be the highest ranking Employee
of Lawter, operating as a wholly owned direct or indirect subsidiary of the
Company.
(b) The Employee shall devote his best efforts to the business and
affairs of the Company, to carrying out the responsibilities assigned to him
from time to time under this Agreement, and shall diligently follow and
implement all management policies and decisions of the Company.
4. Compensation
The Employee shall receive a beginning salary at an annual rate of
$350,000 (the "Base Salary"). The Base Salary may be increased from time to
time at the discretion of the Company. In addition, the Employee shall be
eligible to participate in any long-term or short term cash incentive programs
which from time to time are made available to Lawter's officers and key
employees.
5. Working Facilities and Fringe Benefits; Expenses.
The Employee shall be finished with office space, secretarial
assistance and such other facilities and services as are appropriate to his
position and adequate for the performance of his duties. The Company also shall
provide or cause Lawter to provide to the Employee during the Employment Period
fringe benefits and perquisites at least equal to those provided to the
Employee immediately prior to the date thereof and neither the Company nor
Lawter shall discriminate against the Employee with respect to any vacation
or holiday plan, medical, hospital, life and disability insurance programs,
savings programs and other similar welfare benefit programs from time to time
made available to Lawter's officers and key employees. The Company or Lawter
shall pay or reimburse Employee for all reasonable expenses actually incurred
or paid by him in the performance of services rendered by him pursuant to this
Agreement. Such expenses shall be supported by the documentary evidence
required to substantiate them as income tax deductions.
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<PAGE> 3
6. Special Signing Bonus and Restricted Stock Grants.
(a) Signing Bonus. On the Acquisition Date, the Company shall pay the
Employee a signing bonus of $100,000 in cash.
(b) Initial Grant of Restricted Stock. On the Acquisition Date, the
Company shall grant to the Employee a special grant of Company common stock
under the Company's restricted stock program, the number of such restricted
shares to be determined by dividing $300,000 by the closing price of the
Company's common stock on the New York Stock Exchange on the last regular
trading day immediately prior to the Acquisition Date. All restrictions on such
stock shall lapse on the day following the first anniversary of the Acquisition
Date if the Employee is still then employed by the Company or as otherwise
provided under Section 3 of this Agreement
(c) Second Grant of Restricted Stock. If the Employee is still employed
by the Company on day following the first anniversary of the Acquisition Date,
then as of such date the Company shall grant to the Employee a second special
grant of Company common stock under the Company's restricted stock program, the
number of such restricted shares to be determined by dividing $300,000 by the
closing price of the Company's common stock on the New York Stock Exchange on
the last regular trading day immediately prior to the date of such second
grant. All restrictions on such second grant shall lapse on the day following
the second anniversary of the Acquisition Date if the Employee is still then
employed by the Company or as otherwise provided under Section 8 of this
Agreement.
(d) The payments and grants described in this Section 6 shall be in lieu
of any other long-term or short-term equity incentive programs during the
Employment Period, provided, however, that this shall not restrict the Employee
from participating in any long-term or short-term cash incentive programs which
from time to time are made available to Lawter's officers and key employees. .
Any grant of options of the Company's common stock, any additional grant of
Company restricted stock, or any declaration of eligibility to participate in
any other long-term or short-term cash or equity incentive program maintained
by the Company during the Employment Period for employees other than Lawter
employees shall be made in the sole and uncontrolled discretion of the
Compensation Committee of the Company's Board of Directors (the "Board").
7. Termination of Employment.
(a) Death. The Employee's employment shall terminate upon his death.
(b) Disability. The Company may terminate the employment of the Employee
if, in the reasonable judgment of the Board, he becomes unable to
satisfactorily perform his duties and responsibilities hereunder during the
term of his employment because of mental or physical disability.
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<PAGE> 4
(c) Cause. The Company may terminate the Employee's employment for
"Cause". For purposes of this Agreement, "Cause" is defined as (i) a material
breach by Employee of the terms of this Agreement, (ii) the conviction of
Employee of any criminal act that the Board shall in its sole and absolute
discretion, deem to be or have the potential of being a material risk in any
manner to the Company or its reputation, or (iii) conduct by Employee in his
office with the Company that is grossly inappropriate and demonstrably likely
to lead to material injury to the Company, as determined by the Board acting
reasonably and in good faith; provided, however, that in the case of (iii)
above, such conduct shall not constitute Cause unless the Board shall have
delivered to Employee notice setting forth with specificity (x) the conduct
deemed to qualify as Cause, (y) reasonable action that would remedy such
objection, and (z) a reasonable time (not less than thirty (30) days) within
which Employee may take such remedial action, and Employee shall not have taken
such specified remedial action within such specified reasonable time.
(d) Termination by the Company without Cause. Notwithstanding the
foregoing provisions, the Company may terminate the Employee's employment
without Cause at any time, subject to the provisions of subsection 8(d) hereof.
(e) Date of Termination. "Date of Termination" shall mean (i) if the
Employee's employment is terminated by death pursuant to subsection 7(a), the
date of the Employee's death; (ii) if the Employee's employment is terminated
by the Company as a result of the Employee's disability pursuant to subsection
7(b), the date of such termination, (iii) if the Employee's employment is
terminated by the Company for Cause pursuant to subsection 7(c), the date that
the Notice of Termination is communicated to the Employee, after the expiration
of the right to take remedial action in the case of paragraph 7(c)(iii), and
(iv) if the employment is terminated by the Company without Cause pursuant to
subsection 7(d), the date the Notice of Termination is communicated to the
Employee.
8. Compensation and Other Rights of Employee Upon Termination.
(a) If the Employee's employment shall be terminated due to death
pursuant to subsection 7(a), then (i) Company shall make, until the second
anniversary of the Acquisition Date, payments of Base Salary at a rate equal to
the Base Salary annual rate on the date of death, (ii) all of the Company's
common stock owned by the Employee subject to conditions, restrictions, or
limitations which lapse over time or upon a subsequent event shall immediately
be free of all such conditions, restrictions and limitations, but neither the
Employee's estate nor any other person or entity shall be entitled to any other
grant of restricted stock, and (iii) all other rights of the Employee and his
estate, guardian, legal representatives and heirs under the incentive, savings
and welfare plans described in Sections 4 and 5 shall be determined by the
terms and conditions of such plans as in effect on the date of Employee's death
and Lawter's applicable program and practices as in effect on the date of
Employee's death, as applicable.
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<PAGE> 5
(b) Disability. If the Employee's employment shall be terminated due to
disability pursuant to subsection 7(b), then (i) Company shall make, until the
second anniversary of the Acquisition Date, payments to Employee of his Base
Salary at a rate equal to the Base Salary annual rate on the date of
disability, (ii) all of the Company's common stock owned by the Employee
subject to conditions, restrictions, or limitations which lapse over time or
upon a subsequent event shall immediately be free of all such conditions,
restrictions and limitations, but Employee shall not be entitled to any further
grants of restricted stock, and (iii) all other rights of the Employee and his
estate, guardian, legal representatives and heirs under the incentive, savings
and welfare plans described in Sections 4 and 5 shall be determined by the
terms and conditions of such plans as in effect on the date of Employee's
disability and Lawter's applicable program and practices as in effect on the
date of Employee's disability.
(c) Termination by the Company for Cause or Termination by Employee for
any reason other than Death or Disability. If the Employee's employment shall
be terminated by (i) the Company for Cause pursuant to subsection 7(c), or (ii)
by the Employee for any reason other than death or disability, the Company
shall pay the Employee all Base Salary and payments owed to him up to the Date
of Termination. Any rights that Employee may have under the incentive,
savings, and welfare plans described in Sections 4 and 5 shall be determined by
the terms and conditions of such plans as in effect on the Date of Termination
and Lawter's applicable programs and practices as in effect on the Date of
Termination, and all other rights under this Agreement shall be terminated.
(d) Termination by the Company without Cause. If the Employee's
employment shall be terminated by the Company without Cause pursuant to
subsection 7(d), then the Company shall pay to the Employee all Base Salary and
payments owed to him up to the Date of Termination. In addition,
(i) within thirty (30) days following the Date of Termination, the
Company shall pay to Employee a lump sum cash payment equal to the aggregate
amount of Base Salary that would have been payable to the Employee between the
Date of Termination and the second anniversary of the Acquisition Date,
computed at the Employee's Base Salary date in effect on the Date of
Termination;
(ii) if the Date of Termination occurs on or before the first
anniversary of the Acquisition Date, then (A) as of the Date of Termination all
of the Company's common stock owned by the Employee subject to conditions,
restrictions, or limitations which lapse over time or upon a subsequent event
shall immediately be free of all such conditions, restrictions and limitations;
and (B) in lieu of the grant of restricted stock described in Section 6(c),
within thirty (30) days following the Date of Termination the Company shall pay
the Employee a lump sum cash payment of $300,000;
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<PAGE> 6
(iii) if the Date of Termination occurs after the day following the
first anniversary of the Acquisition Date but before the second anniversary of
the Acquisition Date, then all of the Company,'s common stock owned by the
Employee subject to conditions, restrictions, or limitations which lapse over
time, or upon a subsequent event shall immediately be free of all such
conditions, restrictions and limitations;
(iv) except as expressly provided in this Agreement, any rights
that Employee may have under the incentive, savings and welfare plans described
in Sections 4 and 5 shall be determined by the terms and conditions of such
plans as in effect on the Date of Termination and Lawter's applicable programs
and practices as in effect on the Date of Termination, and all other rights
under this Agreement shall be terminated; and
(v) through the second anniversary of the Acquisition Date, the
Company shall allow Employee and his Emily members to
participate in all Lawter welfare plans described in Section 5
on the same terms and conditions and at the same cost as to
which they were entitled to participate immediately prior to
the Date of Termination. If the Employee or his family members
shall be ineligible to participate in any of such welfare
plans as a result of Employee's ceasing to be an employee of
the Company or Lawter, then the Company shall arrange to
provide the Employee and his family members with substantially
equivalent benefits as if Employee remained employed by Lawter
throughout the Employment Period.
(e) Employee understands that during the term of this Agreement the
Company may determine, in its sole discretion, that it is in the best interest
of the Company to make changes in the operations, management structure,
corporate form or reporting relationship of Lawter, and acknowledges that any
change in Employee's position or responsibilities set forth in Section 3(a) or
change in geographic location of his employment resulting from any such change
will not constitute a breach of this Agreement by the Company.
9. Covenant Restricting Competition; Nondisclosure of Confidential
Information.
(a) The Employee acknowledges that his services are special and unique,
and of an unusual and extraordinary character which gives them peculiar value,
the loss of which cannot adequately be compensated in damages. Therefore, the
Employee agrees that he will not, except with the written consent of the
Company, for a continuous period of eighteen (18) months commencing immediately
following termination of the Employee's employment hereunder, directly or
indirectly engage or become interested in, as a partner, director, officer,
principal, agent or employee, any business which competes with products
produced, marketed or in development by the Company or Lawter at the time of
such termination.
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<PAGE> 7
(b) The Employee acknowledges that in his employment he is or will be
making use of, acquiring or adding to, confidential information of the Company
and Lawter, and is or will be familiar with the Company's and Lawter's
business, activities, employees, customers and suppliers. Therefore, in order
to protect the Company's and Lawter's confidential information and to protect
other employees who depend upon the Company for regular employment, Employee
agrees that, except in connection with his employment by the Company, or with
the, consent of the Company, he will not during or after the term of his
employment hereunder in any way utilize any of said confidential information
and he will not copy, reproduce, or take with him the original or any copies of
said confidential information and will not disclose any of said confidential
information to anyone.
In the event of a breach of the covenants contained in this Section
9, The Company shall be entitled to an injunction restraining such breach in
addition to any other remedies provided by law.
If any provision of this Section 9 is adjudged by a court to be
invalid or unenforceable, the same will in no way affect any other provision of
this Section 9 or any other part of this Agreement, the application of such
provision in any other circumstances or the validity or enforceability of this
Agreement. If any such provision, or any part thereof, is held to be
unenforceable because of the duration of such provision or the area covered
thereby, the parties agree that the court making such determination will have
the power to reduce the duration and/or area of such provision, and/or to
delete specific words or phrases, and in its reduced form such provision will
then be enforceable and will be enforced.
10. Reimbursement of Certain Taxes.
(a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that any payment
or distribution by the Company to or for the benefit of the Employee (whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional
payments required under this Section 10) (a "Payment") would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties are
incurred by the Employee with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Employee shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an amount such that
after payment by the Employee of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without limitation, any income
taxes (and any interest and penalties imposed with respect thereto) and Excise
Tax imposed upon the Gross-Up Payment, the Employee retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 10(c), all determinations
required to be made wider this Section 10, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in
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<PAGE> 8
arriving at such determination, shall be made by a certified public accounting
firm as may be designated by the Company (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Company and the Employee
within 15 business days of the receipt of notice from the Employee that there
has been a Payment, or such earlier time as is requested by the Company. All
fees and expenses of the Accounting Firm shall be borne solely by the Company.
Any Gross-Up Payment, as determined pursuant to this Section 10, shall be paid
by the Company to the Employee within five days of the receipt of the
Accounting Firm's determination. Any determination by the Accounting Firm shall
be binding upon the Company and the Employee. As a result of the uncertainty in
the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made
("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 10(c) and the Employee thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Employee.
(c) The Employee shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Employee is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Employee
shall not pay such claim prior to the expiration of the 30-day period following
the date on which it gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is
due). If the Company notifies the Employee in writing prior to the expiration
of such period that it desires to contest such claim, the Employee shall:
(i) give the Company any information reasonably requested
by the Company relating to such claim,
(ii) take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect to
such claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim; provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold the
Employee harmless, on an after-tax basis, for any Excise
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<PAGE> 9
Tax or income tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and expenses.
Without limitation of the foregoing provisions of this Section 10(c), the
Company shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct the Employee
to pay the tax claimed and sue for a refund or contest the claim in any
permissible manner, and the Employee agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Employee to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Employee, on an interest-free basis and shall indemnify and hold
the Employee harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such
advance; and further provided that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Employee with respect
to which such contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and the Employee shall be entitled to settle or contest, as the case
may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.
(d) If after the receipt by the Employee of an amount advanced by the
Company pursuant to Section 10(c), the Employee becomes entitled to receive any
refund with respect to such claim, the Employee shall (subject to the Company's
complying with the requirements of Section 10(c)) promptly pay to the Company
the amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Employee of an
amount advanced by the Company pursuant to Section 10(c), a determination is
made that the Employee shall not be entitled to any refund with respect to such
claim and the Company does not notify the Employee in writing of its intent to
contest such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.
11. Assignment.
This Agreement is binding upon and shall be for the benefit of the
successors and assigns of the Company, including any corporation or any other
form of business organization with which the Company may merge or consolidate,
or to which it may transfer substantially all of its assets. Employee shall not
assign his interest in this Agreement or any pan thereof
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<PAGE> 10
12. Consent of the Company.
Any act, request, approval, consent or opinion of the Company under
this Agreement must be in writing and may be authorized, given or expressed
only by resolution of the Board or by the Chief Executive Officer of the
Company.
13. Notice
For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Company:
Chief Executive Officer
Eastman Chemical Company
100 North Eastman Road
Kingsport, Tennessee 37660
If to the Employee:
John P. O'Mahoney
545 Somerset Lane
Northfield, Illinois 60093
or to such other address as either party may have furnished to the other in
writing.
14. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Tennessee applicable to contracts made and to be
performed therein.
15. Enforcement Expenses and Arbitration.
The Company agrees to reimburse the Employee for all costs and
expenses incurred by him (including the reasonable fees of his counsel) in
successfully enforcing any of his rights under this Agreement or any claim
arising out of the breach thereof. In addition, the parties acknowledge the
relative economic power of the Company versus the Employee, and the ability of
the Company to resist the conclusion of litigation should the Employee
institute legal proceedings enforce this Agreement or to recover damages for
the breach thereof. In recognition of this, any controversy or claim arising
out of or relating to this Agreement shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, at the sole election of the Employee; provided, however, that an
action by the Company to enforce
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its rights under Section 9 hereof shall be excluded from the arbitration
provisions of this Section.
Any such election by Employee shall be made by written notice given
to the Company any time after such controversy or claim arises, and in the
event Employee is served with process relating to any court proceeding
concerning any such claim or controversy commenced by the Company, such
election, to be effective, shall be made by written notice within 15 days of
the time Employee is served with such process. Commencement of court
proceedings by Employee shall be deemed an election not to arbitrate. In the
event the Company commences court proceedings (other than an action by the
Company solely to enforce its rights under Section 9 hereof) and is given
notice of the election to arbitrate by the Employee within the time period set
forth above, the Company agrees to promptly dismiss such court proceedings and
submit to arbitration. In the event of such arbitration, judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof.
16. Miscellaneous
Anything in this Agreement to the contrary notwithstanding, all
payments required to be made by the Company hereunder to the employee, his
estate or legal representatives shall be subject to the withholding of such
amounts relating to taxes as the Company may reasonably determine it should
withhold pursuant to any applicable law or regulation.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the. date and year first above written.
EASTMAN CHEMICAL COMPANY
By: /s/ HAROLD L. HENDERSON
-----------------------
Name: Harold L. Henderson
-------------------
Its: Senior Vice President, General Counsel
----------------------------------------
LAWTER INTERNATIONAL, INC.
By:/s/ MARK JOSLIN
----------------------------------------
Name: Mark Joslin
---------------------------------
Its: Chief Financial Officer & Treasurer
----------------------------------------
EMPLOYEE
/s/ JOHN P. O'MAHONEY
----------------------------------
John P. O'Mahoney
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EXHIBIT (c)(5)
[Eastman Chemical Company Letterhead]
April 27, 1999
John P. O'Mahoney
Lawter International, Inc.
Re: Grant of Stock Options
Dear John:
This will confirm our agreement that, effective upon the date Eastman Chemical
Company becomes the owner of a majority of the issued and outstanding stock of
Lawter International, Inc. (provided that such date is not later than October
31, 1999), Eastman Chemical Company shall grant to you an option to buy 5,000
shares of common stock of Eastman Chemical Company. In accordance with its
standard practices, such options shall (i) be non-qualified options (rather
than incentive stock options), (ii) be exercisable at a price equal to the
closing price of Eastman Chemical Company common stock on the New York Stock
Exchange on the last regular trading day immediately prior to the date such
options are granted; (iii) provide that one-half of such options shall vest and
become exercisable on the first anniversary of the date of grant, and the other
hald shall vest and become exercisable on the second anniversary of the of
grant; and (iv) contain such other terms as are customary for grants of options
to senior executives of Eastman Chemical Company. This grant of options is in
addition to and not in lieu of any compensation and benefits provided for
under the Employment Agreement of even date herewith between you, Lawter
International, Inc. and Eastman Chemical Company.
Very truly yours,
/s/ HAROLD L. HENDERSON
Harold L. Henderson
Senior Vice President
and General Counsel
