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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO
SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
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MAGMA COPPER COMPANY
(NAME OF SUBJECT COMPANY)
BHP SUB INC.
A WHOLLY OWNED SUBSIDIARY OF
BHP HOLDINGS (USA) INC.
AN INDIRECT WHOLLY OWNED SUBSIDIARY
OF
THE BROKEN HILL PROPRIETARY COMPANY LIMITED
(BIDDERS)
COMMON STOCK, $0.01 PAR VALUE PER SHARE
5 5/8% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES D,
$0.01 PAR VALUE PER SHARE
6% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES E,
$0.01 PAR VALUE PER SHARE
559177 20 9
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(CUSIP NUMBER OF COMMON STOCK)
559177 30 8
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(CUSIP NUMBER OF SERIES D PREFERRED STOCK)
559 177 40 7
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(CUSIP NUMBER OF SERIES E PREFERRED STOCK)
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T. ROGNALD DANKMEYER, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
BHP MINERALS
550 CALIFORNIA STREET
SAN FRANCISCO, CALIFORNIA 94104
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
copies to:
JOSEPH HANDROS, ESQ.
ARNOLD & PORTER
399 PARK AVENUE
NEW YORK, NEW YORK 10022
(212) 715-1125
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CALCULATION OF FILING FEE
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Transaction Valuation* $1,770,396,600 Amount of Filing Fee $354,079.32
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* For the purpose of calculating the fee only, this amount assumes the
purchase in cash of 49,143,450 shares of Common Stock of Magma Copper
Company (the "Company") at $28.00 per share, 2,000,000 shares of 5 5/8%
Cumulative Convertible Preferred Stock, Series D of the Company at $96.544
per share and 2,000,000 shares of 6% Cumulative Convertible Preferred Stock,
Series E of the Company at $100.646 per share. Such number of shares
includes all outstanding shares as of November 28, 1995, and assumes the
exercise of all warrants and presently exercisable stock options to purchase
shares of Common Stock outstanding as of such date and the issuance of
10,000 additional shares of Common Stock on January 2, 1996.
[_] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
AMOUNT PREVIOUSLY PAID: Not Applicable FILING PARTY: Not Applicable
FORM OR REGISTRATION NO.: Not Applicable DATE FILED: Not Applicable
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This Statement relates to a tender offer by BHP Sub Inc., a Delaware
corporation (the "Purchaser"), which is a wholly owned subsidiary of BHP
Holdings (USA) Inc., a Delaware corporation (the "Sub"), which in turn is an
indirect wholly owned subsidiary of The Broken Hill Proprietary Company
Limited, a Victoria, Australia corporation ("BHP"), to purchase (1) all
outstanding shares of Common Stock, par value $0.01 per share (the "Common
Shares"), (2) all outstanding shares of 5 5/8% Cumulative Convertible Preferred
Stock, Series D, par value $0.01 per share (the "Series D Preferred Shares")
and (3) all outstanding shares of 6% Cumulative Convertible Preferred Stock,
Series E, par value $0.01 per share (the "Series E Preferred Shares") of Magma
Copper Company, a Delaware corporation (the "Company"), upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated December 5,
1995 (the "Offer to Purchase"), and in the related Letter of Transmittal (which
together constitute the "Offer"), copies of which are filed as Exhibits (a)(1)
and (a)(2) hereto, respectively, and which are incorporated herein by
reference. The Common Shares, Series D Preferred Shares and Series E Preferred
Shares collectively are referred to as the "Shares."
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Magma Copper Company. The address of
the principal executive offices of the Company is set forth in Section 8
("Certain Information Concerning the Company") of the Offer to Purchase and is
incorporated herein by reference.
(b) The exact title of the classes of equity securities being sought in the
Offer is the Common Stock, par value $0.01 per share, the 5 5/8% Cumulative
Convertible Preferred Stock, Series D, par value $0.01 per share, and the 6%
Cumulative Convertible Preferred Stock, Series E, par value $0.01 per share of
the Company. The information set forth in the Introduction to the Offer to
Purchase is incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of Shares;
Dividends") of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a) through (d) and (g): The information set forth in the Introduction and
Section 9 ("Certain Information Concerning Purchaser, Sub and BHP") of the
Offer to Purchase, and in Annex I thereto, is incorporated herein by reference.
(e) and (f): None of Purchaser, Sub or BHP, or, to the best of their
knowledge, any of the persons listed in Annex I of the Offer to Purchase, has
during the last five years (i) been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors); or (ii) been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any
violation of such laws.
ITEM 3. PAST CONTRACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) None.
(b) The information set forth in the Introduction and Section 11 ("Background
of the Offer; Past Contacts, Transactions or Negotiations with the Company")
and Section 12 ("Purpose of the Offer and the Merger; Appraisal Rights; Plans
for the Company") of the Offer to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a), (b) and (c): The information set forth in Section 10 ("Source and Amount
of Funds") of the Offer to Purchase is incorporated herein by reference.
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ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a) through (e): The information set forth in the Introduction, Section 11
("Background of the Offer; Past Contacts, Transactions or Negotiations with the
Company"), Section 12 ("Purpose of the Offer and the Merger; Appraisal Rights;
Plans for the Company") and Section 13 ("The Merger Agreement") of the Offer to
Purchase is incorporated herein by reference. Except as set forth in the
Introduction and Section 12 of the Offer to Purchase, none of Purchaser, Sub or
BHP have any present plans or proposals that would result in an extraordinary
corporate transaction, such as a merger, reorganization, liquidation or sale or
transfer of a material amount of assets involving the Company, or any other
material changes in the Company's capitalization, dividend policy, corporate
structure or business or composition of its board of directors or management.
(f) and (g): The information set forth in Section 7 ("Effect of the Offer on
the Market for Shares, NYSE Listing, Stock Quotation, and Registration under
the Exchange Act") of the Offer to Purchase is incorporated herein by
reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) None of Purchaser, Sub or BHP (or any of their respective subsidiaries)
beneficially owns any Shares and, to the best knowledge of BHP, none of the
persons listed on Annex I to the Offer to Purchase beneficially owns any
Shares.
(b) No transactions in the Shares have been effected during the past sixty
days by the Purchaser, Sub or BHP (or their respective subsidiaries) or, to the
best knowledge of BHP, any of the persons listed on Annex I to the Offer to
Purchase.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, Section 9 ("Certain
Information Concerning Purchaser, Sub and BHP"), Section 11 ("Background of the
Offer; Past Contacts, Transactions or Negotiations with the Company"), Section
12 ("Purpose of the Offer and the Merger; Appraisal Rights; Plans for the
Company"); and Section 13 ("The Merger Agreement") of the Offer to Purchase is
incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and in Section 17 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9 ("Certain Information Concerning
Purchaser, Sub and BHP") of the Offer to Purchase is incorporated herein by
reference.
The incorporation by reference herein of the above-mentioned financial
information does not constitute an admission that such information is material
to a decision by a stockholder of the Company whether to sell, tender or hold
Shares being sought in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in the Introduction, Section 9 ("Certain
Information Concerning Purchaser, Sub and BHP"), Section 11 ("Background of the
Offer; Past Contacts, Transactions or Negotiations with the Company"), Section
12 ("Purpose of the Offer and the Merger; Appraisal Rights; Plans for the
Company") and Section 13 ("The Merger Agreement") of the Offer to Purchase is
incorporated herein by reference.
(b) and (c) The information set forth in Section 10 ("Source and Amount of
Funds"), Section 12 ("Purpose of the Offer and the Merger; Appraisal Rights;
Plans for the Company") and Section 16 ("Certain Regulatory and Legal Matters")
of the Offer to Purchase is incorporated herein by reference.
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(d) The information set forth in Section 7 ("Effect of the Offer on the
Market for Shares, NYSE Listing, Stock Quotation, and Registration under the
Exchange Act") of the Offer to Purchase is incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal is incorporated herein by reference in its entirety.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated December 5, 1995.
(a)(2) Letter of Transmittal.
(a)(3) Form of Letter from CS First Boston, as Dealer Manager, to Brokers,
Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(4) Form of Letter from Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees to Clients.
(a)(5) Notice of Guaranteed Delivery.
(a)(6) IRS Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Summary Newspaper Advertisement, dated December 5, 1995.
(a)(8) Joint Press Release issued by BHP and the Company on November 30,
1995.
(a)(9) BHP's Financial Statements, Financial Statement Schedules and
Exhibits, included as pages F-1 to F-61 of BHP's Form 20-F for the year ended
May 31, 1995 (filed by BHP with the Commission on September 1, 1995, and
incorporated herein by reference).
(b) Not applicable.
(c)(1) Agreement and Plan of Merger, dated as of November 30, 1995, among
Purchaser, Sub, BHP and the Company.
(c)(2) Confidentiality Agreement, dated as of October 30, 1995, between BHP
and the Company, as amended.
(c)(3) Tender Agreement, dated as of November 30, 1995, between BHP and
Warburg, Pincus Capital Company, L.P.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
3
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SIGNATURE
After due inquiry and to the best of its knowledge and belief, each of the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: December 5, 1995
BHP Sub Inc.
/s/ T. Rognald Dankmeyer
By: _________________________________
Name: T. Rognald Dankmeyer
Title: Vice President
BHP Holdings (USA) Inc.
/s/ T. Rognald Dankmeyer
By: _________________________________
Name: T. Rognald Dankmeyer
Title: Vice President
The Broken Hill Proprietary Company
Limited
/s/ T. Rognald Dankmeyer
By: _________________________________
Name: T. Rognald Dankmeyer
Attorney-in-Fact
4
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EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE
EXHIBIT DESCRIPTION NO.
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<C> <S> <C>
(a)(1) Offer to Purchase, dated December 5, 1995.
(a)(2) Letter of Transmittal.
(a)(3) Form of Letter from CS First Boston, as Dealer Manager, to
Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees.
(a)(4) Form of Letter from Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees to Clients.
(a)(5) Notice of Guaranteed Delivery.
(a)(6) Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
(a)(7) Summary Newspaper Advertisement, dated December 5, 1995.
(a)(8) Joint Press Release issued by BHP and the Company on November
30, 1995.
(a)(9) BHP's Financial Statements, Financial Statement Schedules and
Exhibits, included as pages F-1 to F-61 of BHP's Form 20-F for
the year ended May 31, 1995 (filed by BHP with the Commission
on September 1, 1995, and incorporated herein by reference).
(b) Not applicable.
(c)(1) Agreement and Plan of Merger, dated as of November 30, 1995,
among Purchaser, Sub, BHP and the Company.
(c)(2) Confidentiality Agreement, dated as of October 30, 1995,
between BHP and the Company, as amended.
(c)(3) Tender Agreement, dated as of November 30, 1995, between BHP
and Warburg, Pincus Capital Company, L.P.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
</TABLE>
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Exhibit 99.(a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
AT A PRICE OF $28.00 NET PER SHARE,
ALL OUTSTANDING SHARES OF
5 5/8% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES D
AT A PRICE OF $96.544 NET PER SHARE
AND
ALL OUTSTANDING SHARES OF
6% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES E
AT A PRICE OF $100.646 NET PER SHARE
OF
MAGMA COPPER COMPANY
BY
BHP SUB INC.
AN INDIRECT WHOLLY OWNED SUBSIDIARY
OF
THE BROKEN HILL PROPRIETARY COMPANY LIMITED
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON JANUARY 4, 1996, UNLESS THE OFFER IS EXTENDED.
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THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE HAVING BEEN VALIDLY
TENDERED PRIOR TO THE EXPIRATION DATE AND NOT WITHDRAWN THAT NUMBER OF COMMON
SHARES AND PREFERRED SHARES (AS HEREIN DEFINED) REPRESENTING AT LEAST A MAJORITY
OF ALL OUTSTANDING COMMON SHARES OF MAGMA COPPER COMPANY ON A FULLY DILUTED
BASIS ON THE DATE OF PURCHASE AND (II) SATISFACTION OF CERTAIN OTHER TERMS AND
CONDITIONS. SEE SECTION 15.
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THE OFFER IS BEING MADE PURSUANT TO THE AGREEMENT AND PLAN OF MERGER, DATED AS
OF NOVEMBER 30, 1995, BY AND AMONG BHP SUB INC., BHP HOLDINGS (USA) INC., THE
BROKEN HILL PROPRIETARY COMPANY LIMITED AND MAGMA COPPER COMPANY. THE BOARD OF
DIRECTORS OF MAGMA COPPER COMPANY HAS APPROVED THE MERGER AGREEMENT, THE OFFER
AND THE MERGER, HAS DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE
FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY'S STOCKHOLDERS, AND RECOMMENDS
THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER ALL OF THEIR SHARES.
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IMPORTANT
Any stockholder wishing to tender Shares in the Offer must either (i) complete
and sign the Letter of Transmittal or a facsimile thereof in accordance with the
instructions in the Letter of Transmittal and mail or deliver the Letter of
Transmittal and all other required documents to the Depositary together with
certificates representing the Shares tendered or follow the procedure for book-
entry transfer set forth in Section 3 or (ii) request such stockholder's broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction. A stockholder having Shares registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact such person
if such stockholder wishes to tender such Shares.
Any stockholder who wishes to tender Shares and cannot deliver such Shares and
all other required documents to the Depositary on or prior to the Expiration
Date or who cannot comply with the procedures for book-entry transfer on a
timely basis may tender such Shares pursuant to the guaranteed delivery
procedure set forth in Section 3.
Questions and requests for assistance may be directed to the Information Agent
or the Dealer Manager at their respective addresses and telephone numbers set
forth on the back cover of this Offer to Purchase. Additional copies of this
Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery
and other related materials may be obtained from the Information Agent.
Stockholders may also contact their broker, dealer, commercial bank, trust
company or other nominee for assistance concerning the Offer.
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The Dealer Manager for the Offer is:
CS FIRST BOSTON
December 5, 1995
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Introduction.............................................................. 1
1. Terms of the Offer.................................................... 3
2. Acceptance for Payment and Payment for Shares......................... 4
3. Procedure for Tendering Shares........................................ 5
4. Withdrawal Rights..................................................... 8
5. Certain Federal Income Tax Consequences............................... 8
6. Price Range of Shares; Dividends...................................... 9
7. Effect of the Offer on the Market for Shares, NYSE Listing, Stock
Quotation, and Registration Under the Exchange Act.................... 11
8. Certain Information Concerning the Company............................ 12
9. Certain Information Concerning Purchaser, Sub and BHP................. 13
10. Source and Amount of Funds............................................ 15
11. Background of the Offer; Past Contacts, Transactions or Negotiations 15
with the Company......................................................
12. Purpose of the Offer and the Merger; Appraisal Rights; Plans for the 18
Company...............................................................
13. The Merger Agreement.................................................. 21
14. Dividends and Distributions........................................... 24
15. Certain Conditions to Purchaser's Obligations......................... 25
16. Certain Regulatory and Legal Matters.................................. 26
17. Fees and Expenses..................................................... 28
18. Miscellaneous......................................................... 28
Annex I--Certain Information Concerning The Directors And Executive
Officers of Purchaser, Sub and BHP.................................... I-1
</TABLE>
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TO ALL HOLDERS OF COMMON STOCK,
5 5/8% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES D AND
6% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES E OF
MAGMA COPPER COMPANY
INTRODUCTION
BHP Sub Inc., a Delaware corporation ("Purchaser"), and a wholly owned
subsidiary of BHP Holdings (USA) Inc., a Delaware corporation ("Sub"), which
in turn is an indirect wholly owned subsidiary of The Broken Hill Proprietary
Company Limited, a Victoria, Australia corporation ("BHP"), hereby offers to
purchase (i) all outstanding shares of Common Stock, par value $0.01 per share
(the "Common Shares"), of Magma Copper Company, a Delaware corporation (the
"Company"), at a price of $28.00 per share net to the seller in cash, (ii) all
outstanding shares of 5 5/8% Cumulative Convertible Preferred Stock, Series D,
par value $0.01 per share (the "Series D Preferred Shares") of the Company at
a price of $96.544 per share net to the seller in cash and (iii) all
outstanding shares of 6% Cumulative Convertible Preferred Stock, Series E, par
value $0.01 per share (the "Series E Preferred Shares") of the Company at a
price of $100.646 per share net to the seller in cash, all upon the terms and
subject to the conditions set forth in this Offer to Purchase and in the
related Letter of Transmittal (which together constitute the "Offer"). The
Series D Preferred Shares, together with the Series E Preferred Shares
(together, the "Preferred Shares") and the Common Shares are referred to
herein as the "Shares." Tendering holders of Shares will not be obligated to
pay brokerage fees or commissions or, except as set forth in Instruction 6 to
the Letter of Transmittal, transfer taxes on the purchase of Shares by
Purchaser pursuant to the Offer. Purchaser will pay all charges and expenses
of CS First Boston Corporation ("CS First Boston"), which is acting as Dealer
Manager for the Offer, (in such capacity, the "Dealer Manager"), Citibank,
N.A. (the "Depositary") and D.F. King & Co., Inc. (the "Information Agent"),
incurred in connection with the Offer.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN VALIDLY
TENDERED PRIOR TO THE EXPIRATION DATE (AS HEREIN DEFINED) AND NOT WITHDRAWN THAT
NUMBER OF SHARES REPRESENTING AT LEAST A MAJORITY OF ALL OUTSTANDING COMMON
SHARES OF THE COMPANY ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE ASSUMING
CONVERSION OF ALL OUTSTANDING OPTIONS OR OTHER SECURITIES CONVERTIBLE INTO
COMMON SHARES (THE "MINIMUM CONDITION"). THE OFFER IS ALSO SUBJECT TO CERTAIN
OTHER TERMS AND CONDITIONS. SEE SECTION 15.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE MERGER AGREEMENT (AS
HEREIN DEFINED), THE OFFER AND THE MERGER (AS HEREIN DEFINED), HAS DETERMINED
THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTEREST
OF THE COMPANY'S STOCKHOLDERS, AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS
ACCEPT THE OFFER AND TENDER ALL THEIR SHARES.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of November 30, 1995 (the "Merger Agreement"), by and among Purchaser, Sub,
BHP and the Company. The Merger Agreement provides, among other things, that
as soon as practicable after the purchase of Shares pursuant to the Offer and
the satisfaction of the other conditions set forth in the Merger Agreement and
in accordance with the relevant provisions of the General Corporation Law of
the State of Delaware (the "DGCL"), Purchaser will be merged with and into the
Company (the "Merger"). See Section 12. Following consummation of the Merger,
the Company will continue as the surviving corporation (the "Surviving
Corporation") and will be an indirect wholly owned subsidiary of BHP. At the
effective time of the Merger (the "Effective Time"), each issued and
outstanding Common Share (other than Common Shares owned by the Company as
treasury stock, Common Shares owned by Purchaser, and Common Shares with
respect to which appraisal rights are properly exercised under the DGCL
("Dissenting Shares")), will be converted into and represent solely a right to
receive $28.00 in cash (adjusted for stock splits and other similar events),
without interest thereon. Also, at the Effective Time, each issued and
outstanding Preferred Share (other than Preferred Shares owned by the Company
as treasury stock, Preferred Shares owned by Purchaser, and Preferred Shares
with respect to which appraisal rights are
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properly exercised under the DGCL (also, "Dissenting Shares")), will be
converted into and represent solely a right to receive cash in an amount equal
to (x) the number of Common Shares into which such Preferred Share would have
been convertible immediately prior to the Effective Time multiplied by
(y) $28.00 (adjusted for stock splits and other similar events), without
interest thereon. See Section 5 for a description of certain federal income
tax consequences of the Offer and the Merger. All Shares held as treasury
shares and Shares held by the Purchaser or any of its affiliates will be
cancelled at the Effective Time. All shares of capital stock of Purchaser
issued and outstanding immediately prior to the Effective Time shall be
converted and changed into an equal number of shares of capital stock of the
Surviving Corporation. Each of the cash considerations described in the two
preceding sentences is referred to in this Offer to Purchase as the "Merger
Consideration."
The Merger Agreement provides that, promptly upon the purchase of Shares
pursuant to the Offer, Purchaser will be entitled to designate for election to
the Board of Directors of the Company such number of directors (rounded up to
the next whole number) as will give Purchaser, subject to compliance with
Section 14(f) of the Exchange Act of 1934, as amended (the "Exchange Act"),
representation on such Board of Directors equal to the product of (i) the
total number of directors on such Board of Directors (after giving effect to
the appointment of such directors) and (ii) the percentage that the number of
Common Shares purchased by Purchaser in the Offer bears to the number of
Common Shares outstanding, and requires the Company to take such action
(including increasing the size of its Board of Directors and/or securing the
resignations of existing directors of the Company), as may be necessary to
enable Purchaser's nominees to be so elected. See Section 12 "--Board
Representation."
The Company has represented to BHP that, as of November 28, 1995, there were
(a) 46,420,534 Common Shares issued and outstanding, (b) 2,000,000 Series D
Preferred Shares issued and outstanding, which are convertible into 6,896,000
Common Shares based on the applicable conversion rate, (c) 2,000,000 Series E
Preferred Shares issued and outstanding, which are convertible into 7,189,000
Common Shares based on the applicable conversion rate, (d) employee and
director stock options and awards outstanding to purchase an aggregate of
3,507,968 Common Shares and (e) outstanding warrants to acquire 1,263,794
Common Shares, all of which warrants expired November 30, 1995, unless
previously exercised. In addition, the Company will issue 10,000 Common
Shares, in the aggregate, to its non-employee directors on January 2, 1996. As
of the date hereof, none of Purchaser, Sub or BHP or any of their subsidiaries
beneficially owns any Shares. Based upon such information, and assuming
exercise of all outstanding stock options and all warrants, if Shares
representing at least 32,643,649 Common Shares in the aggregate are validly
tendered and not withdrawn prior to the expiration of the Offer, the Minimum
Condition would be satisfied. Following the purchase of such number of Shares,
under the Company's Restated Certificate of Incorporation and the DGCL,
Purchaser would have sufficient voting power to approve the Merger without the
affirmative vote of any other stockholder. If Purchaser acquires 90% or more
of the outstanding shares of each class of stock of the Company in the Offer
or otherwise, Purchaser would be able to effect the Merger pursuant to the
short-form merger provisions of Section 253 of DGCL, without prior notice to,
or any action by, any other stockholder of the Company.
In connection with the transactions contemplated by the Merger Agreement,
BHP has entered into a Tender Agreement, dated as of November 30, 1995 (the
"Tender Agreement"), with Warburg, Pincus Capital Company, L.P., a Delaware
limited partnership ("Warburg, Pincus"), pursuant to which, among other
things, Warburg, Pincus has agreed to validly tender in the Offer, and not
withdraw, all Common Shares which it now owns or subsequently may acquire (the
"Stockholder Shares") (which, based on information contained in the Schedule
13D, filed December 1, 1988, as amended, by Warburg, Pincus with respect to
its ownership of Common Shares, amounted to 16,899,616 Common Shares
beneficially owned as of November 30, 1995, and which constitute approximately
25.9% of the Common Shares on a fully diluted basis). In addition, Warburg,
Pincus agreed in the Tender Agreement that, at any meeting of the Company's
stockholders (however called), it would (i) vote the Stockholder Shares in
favor of the Merger, (ii) vote the Stockholder Shares against any action or
agreement that would result in a breach in any material respect of any
covenant, representation or warranty or any other obligation of the Company
under the Merger Agreement, and (iii) vote the Stockholder Shares against any
action or agreement that would impede, interfere with, delay, postpone or
attempt to discourage the Merger or the Offer.
2
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The Tender Agreement further provides that it shall terminate on the first to
occur of (a) the Effective Time, (b) the termination of the Merger Agreement
in accordance with its terms, (c) the Company's Board of Directors having
withdrawn its approval or recommendation of the Offer or the Merger, (d) the
Company's Board of Directors having modified its approval of the Offer or the
Merger in any manner adverse to BHP and (e) written notice of termination of
the Tender Agreement from BHP to Warburg, Pincus. See Section 11.
Tendering Shares pursuant to the Offer will not affect the right of
stockholders to receive dividends declared by the Company, if any, with a
record date prior to the date on which Purchaser purchases the Shares pursuant
to the Offer. See Sections 6 and 14.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any extension or
amendment), Purchaser will accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 4. The term "Expiration Date" means 12:00 midnight,
New York City time, on January 4, 1996, unless Purchaser shall have extended
the period of time for which the Offer is open as may be required by the terms
of the Merger Agreement, or applicable law, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as
so extended by Purchaser, shall expire. See Sections 13 and 15.
If Purchaser shall decide, in its sole discretion (exercised in accordance
with the terms of the Merger Agreement), to increase the consideration offered
in the Offer to holders of Shares and if, at the time that notice of such
increase is first published, sent or given to holders of Shares in the manner
specified below, the Offer is scheduled to expire at any time earlier than the
expiration of a period ending on the tenth business day from, and including,
the date that such notice is first so published, sent or given, then the Offer
will be extended until the expiration of such period of ten business days. For
purposes of the Offer, a "business day" means any day other than a Saturday,
Sunday or a federal holiday, and consists of the time period from 12:01 a.m.
through 12:00 midnight, New York City time.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, SATISFACTION OF THE
MINIMUM CONDITION. THE OFFER IS ALSO SUBJECT TO SATISFACTION OR WAIVER OF
OTHER TERMS AND CONDITIONS. SEE SECTION 15. Purchaser reserves the right (but
shall not be obligated), in accordance with applicable rules and regulations
of the Securities and Exchange Commission (the "Commission"), in its sole
discretion, to waive any of the conditions to the Offer other than the Minimum
Condition (which may be waived only with the consent of the Company's Board of
Directors). If the Minimum Condition or any of the other conditions set forth
in Section 15 have not been satisfied by 12:00 midnight, New York City time,
on January 4, 1996 (or any other time then set as the Expiration Date),
Purchaser may, subject to the terms of the Merger Agreement as described
below, elect to (1) extend the Offer and, subject to applicable withdrawal
rights, retain all tendered Shares until the Expiration Date, as extended, (2)
not extend the Offer and, subject to complying with applicable rules and
regulations of the Commission, accept for payment all Shares so tendered, or
(3) terminate the Offer and not accept for payment any Shares and return all
tendered Shares to tendering stockholders. Under the terms of the Merger
Agreement, Purchaser may not, without the consent of the Company's Board of
Directors, (i) decrease or change the form of consideration payable in the
Offer, (ii) reduce the number of Shares sought pursuant to the Offer, (iii)
amend the conditions or impose additional conditions to the Offer, (iv) amend
any term of the Offer or (v) waive the Minimum Condition. If all the
conditions to consummation of the Offer are satisfied, Sub and Purchaser shall
consummate the Offer as promptly as possible. Notwithstanding the foregoing
and subject to the immediately preceding sentence, Purchaser (i) may at any
time, in its sole discretion, extend the Offer and (ii) may not terminate the
Offer on the Initial Expiration Date (as defined in Section 15) and shall
extend the Offer upon the occurrence of the Events (as defined in Section 15)
to the extent contemplated by the provisions of the Merger Agreement. See
Section 15. Subject to the terms of the Merger Agreement described above,
Purchaser reserves the right (but will not be obligated), at
3
<PAGE>
any time and from time to time in its sole discretion, to extend the period
during which the Offer is open by giving oral or written notice of such
extension to the Depositary and by making a public announcement of such
extension promptly thereafter. 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 its Shares. There
can be no assurance that Purchaser will exercise its right to extend the
Offer.
Subject to the applicable rules and regulations of the Commission and
subject to the terms of the Merger Agreement described above, Purchaser also
expressly reserves the right, in its sole discretion at any time and from time
to time, upon the occurrence of any of the Events set forth in Section 15, to
delay payment for any Shares regardless of whether such Shares were
theretofore accepted for payment, or to terminate the Offer and not to accept
for payment or pay for any Shares not theretofore accepted for payment or paid
for, by giving oral or written notice of such delay, termination or amendment
to the Depositary and by making a public announcement thereof. Purchaser's
right to delay payment for any Shares or not to pay for any Shares theretofore
accepted for payment is subject to the applicable rules and regulations of the
Commission, including Rule 14e-1(c) under the Exchange Act, relating to
Purchaser's obligation to pay for or return tendered Shares promptly after the
termination or withdrawal of the Offer.
Any extension of the period during which the Offer is open, delay in
acceptance for payment or payment, termination or amendment of the Offer will
be followed, as promptly as practicable, by public announcement thereof, such
announcement in the case of an extension to be issued not later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled Expiration Date in accordance with the public announcement
requirements of Rules 14d-4(c) and 14e-1(d) under the Exchange Act. Without
limiting the obligation of Purchaser under such rule or the manner in which
Purchaser may choose to make any public announcement, Purchaser currently
intends to make announcements by issuing a press release to the Dow Jones News
Service and making any appropriate filing with the Commission.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, Purchaser will disseminate additional tender offer materials and extend
the Offer if and to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1
under the Exchange Act. The minimum period during which a tender offer must
remain open following material changes in the terms of the Offer or the
information concerning the Offer, other than a change in price or a change in
percentage of securities sought, will depend upon the relevant facts and
circumstances, including the relative materiality of the changes to such terms
or information. With respect to a change in price or a change in percentage of
securities sought, a minimum ten business day period is generally required to
allow for adequate dissemination to stockholders and investor response.
The Company has provided Purchaser with the Company's list of stockholders
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the Letter of Transmittal will
be mailed to record holders of the Shares and will be furnished to brokers,
dealers, commercial banks, trust companies and similar persons whose names, or
the names of whose nominees, appear on the list of stockholders or, if
applicable, who are listed as participants in a clearing agency's security
position listing for subsequent transmittal to beneficial owners of Shares.
BHP has guaranteed Purchaser's and Sub's obligations pursuant to the Offer
and the Merger Agreement. See Section 13 "--BHP Guarantee."
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will accept for payment and will pay for all Shares
validly tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 4 promptly after the later to occur of (a) the
Expiration Date and (b) subject to compliance with Rule 14e-1(c) under the
Exchange Act, the satisfaction or waiver of the conditions set forth in
Section 15. Subject to compliance with Rule 14e-1(c) under the Exchange Act,
Purchaser expressly reserves the right to delay payment for Shares in order to
comply in whole or in part with any applicable law. See Sections 1 and 16. In
all cases, payment for Shares accepted for payment pursuant to the Offer will
be made only after timely receipt by the Depositary of (i) certificates for
such Shares or timely confirmation (a "Book-Entry Confirmation") of a book-
4
<PAGE>
entry transfer of such Shares into the Depositary's account at The Depository
Trust Company, the Midwest Securities Trust Company, the Pacific Securities
Depository Trust Company or the Philadelphia Depository Trust Company
(collectively, the "Book-Entry Transfer Facilities"), pursuant to the
procedures set forth in Section 3, (ii) a properly completed and duly executed
Letter of Transmittal (or a manually signed facsimile thereof) with all
required signature guarantees or, in the case of a book-entry transfer, an
Agent's Message (as defined below) and (iii) all other documents required by
the Letter of Transmittal.
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility
has received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that
Purchaser may enforce such agreement against the participant.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered on or prior to the
Expiration Date and not properly withdrawn if, as and when Purchaser gives
oral or written notice to the Depositary of Purchaser's acceptance of such
Shares for payment. In all cases, payment for Shares purchased pursuant to the
Offer will be made by deposit of the purchase price with the Depositary, which
will act as agent for tendering stockholders for the purpose of receiving
payment from Purchaser and transmitting such payment to tendering
stockholders. If, for any reason whatsoever, acceptance for payment of any
Shares tendered pursuant to the Offer is delayed, or Purchaser is unable to
accept for payment Shares tendered pursuant to the Offer, then, without
prejudice to Purchaser's rights under Section 1, the Depositary may,
nevertheless, on behalf of Purchaser, retain tendered Shares and such Shares
may not be withdrawn, except to the extent that the tendering stockholders are
entitled to withdrawal rights as described in Section 4 and as otherwise
required by Rule 14e-1(c) under the Exchange Act. Under no circumstances will
interest be paid by Purchaser because of any delay in making such payment.
If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason, or if certificates are submitted
for more Shares than are tendered, certificates for such unpurchased or
untendered Shares will be returned, without expense to the tendering
stockholder (or, in the case of Shares delivered by book-entry transfer to a
Book-Entry Transfer Facility, such Shares will be credited to an account
maintained within such Book-Entry Transfer Facility), as promptly as
practicable after the expiration, termination or withdrawal of the Offer.
If, prior to the Expiration Date, Purchaser increases the price being paid
for Shares accepted for payment pursuant to the Offer, such increased
consideration will be paid to all stockholders whose Shares are purchased
pursuant to the Offer.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to one or more direct or indirect subsidiaries of BHP
the right to purchase all or any portion of the Shares tendered pursuant to
the Offer, but no such transfer or assignment shall relieve Purchaser of its
obligations under the Offer or prejudice any rights of tendering stockholders
to receive payment for Shares validly tendered and accepted for payment
pursuant to the Offer.
3. PROCEDURE FOR TENDERING SHARES.
VALID TENDERS. For Shares to be validly tendered pursuant to the Offer, a
properly completed and duly executed Letter of Transmittal (or a manually
signed facsimile thereof), with all required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message, and all 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 on or prior to the
Expiration Date, and either (i) certificates representing such Shares must be
received by the Depositary or such Shares must be tendered pursuant to the
procedure for book-entry transfer set forth below, and a Book-Entry
Confirmation must be received by the Depositary, in each case on or prior to
the Expiration Date, or (ii) the guaranteed delivery procedure set forth below
must be complied with. No alternative, conditional or contingent tenders will
be accepted. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN
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<PAGE>
ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
BOOK-ENTRY TRANSFER. The Depositary will make a request to establish an
account with respect to the Shares at each Book-Entry Transfer Facility for
purposes of the Offer within two business days after the date of this Offer to
Purchase. Any financial institution that is a participant in a Book-Entry
Transfer Facility's system may make book-entry delivery of Shares by causing a
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at such Book-Entry Transfer Facility in accordance with such Book-
Entry Transfer Facility's procedures for transfer. Although delivery of Shares
may be effected through book-entry at a Book-Entry Transfer Facility prior to
the Expiration Date, for Shares to be validly tendered (i) the Letter of
Transmittal (or a manually signed facsimile thereof), properly completed and
duly executed, with all required signature guarantees, or an Agent's Message
in connection with a book-entry transfer, and all other required documents,
must, in any case, be transmitted to and received by the Depositary at one of
its addresses set forth on the back cover of this Offer to Purchase on or
prior to the Expiration Date or (ii) the tendering stockholder (or his or her
nominee) must comply with the guaranteed delivery procedures described below.
SIGNATURE GUARANTEE. Signatures on the Letter of Transmittal must be
guaranteed by a member in good standing of the Securities Transfer Agents
Medallion Program, the Stock Exchange Medallion Program or the New York Stock
Exchange, Inc. Medallion Signature Program (each of the foregoing being
referred to as an "Eligible Institution" and, collectively, as "Eligible
Institutions"), unless the Shares tendered thereby are tendered (i) by a
registered holder of Shares who has not completed either the box labeled
"Special Delivery Instructions" or the box labeled "Special Payment
Instructions" on the Letter of Transmittal or (ii) for the account of any
Eligible Institution. If the certificates evidencing tendered Shares are
registered in the name of a person or persons other than the signer of the
Letter of Transmittal, or if payment is to be made, or delivered to, or
certificates for unpurchased Shares are to be issued or returned to, a person
other than the registered owner or owners, then the tendered certificates must
be endorsed or accompanied by duly executed stock powers, in either case
signed exactly as the name or names of the registered owner or owners appear
on the certificates, with the signatures on the certificates or stock powers
guaranteed by an Eligible Institution as provided in the Letter of
Transmittal. See Instructions 1 and 5 to the Letter of Transmittal.
GUARANTEED DELIVERY. If a stockholder wishes to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or time will not permit certificates and all required documents to
reach the Depositary on or prior to the Expiration Date or the procedure for
book-entry transfer cannot be completed on a timely basis, such Shares may
nevertheless be tendered validly upon compliance with all of the following
guaranteed delivery procedures:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by Purchaser herewith, is
received by the Depositary, as provided below, on or prior to the
Expiration Date; and
(iii) the certificates for all physically tendered Shares in proper form
for transfer (and/or a Book-Entry Confirmation for all such Shares),
together with a properly completed and duly executed Letter of Transmittal
(or a manually signed facsimile thereof), and all required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message,
and all other documents required by the Letter of Transmittal are received
by the Depositary within three New York Stock Exchange, Inc. trading days
after the date of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, mail or facsimile transmission to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery.
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<PAGE>
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND SOLE RISK OF THE TENDERING STOCKHOLDER. IF
DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for such Shares or a Book-Entry
Confirmation, (ii) a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof), with all required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message, and (iii) all other documents required by the Letter of Transmittal.
BACK-UP FEDERAL INCOME TAX WITHHOLDING. TO PREVENT BACK-UP FEDERAL INCOME
TAX WITHHOLDING WITH RESPECT TO PAYMENT OF THE PURCHASE PRICE OF SHARES
PURCHASED PURSUANT TO THE OFFER, EACH STOCKHOLDER MUST PROVIDE THE DEPOSITARY
WITH HIS OR HER CORRECT TAXPAYER IDENTIFICATION NUMBER ("TIN") AND CERTIFY
THAT HE OR SHE IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY
COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL. SEE
INSTRUCTION 9 SET FORTH IN THE LETTER OF TRANSMITTAL.
DETERMINATION OF VALIDITY. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance for payment
of any tender of Shares will be determined by Purchaser in its sole
discretion, and its determination will be final and binding on all parties.
Purchaser reserves the absolute right to reject any or all tenders of any
Shares that are determined by it not to be in proper form or the acceptance of
or payment for which may, in the opinion of Purchaser, be unlawful. Purchaser
also reserves the absolute right to waive any of the conditions of the Offer,
subject to the limitations set forth in the Merger Agreement, or any defect or
irregularity in the tender of any Shares. In all cases, Purchaser's
interpretation of the Instructions to the Letter of Transmittal will be final
and binding on all parties. No tender of Shares will be deemed to have been
validly made until all defects and irregularities have been cured or waived.
None of Purchaser, Sub, BHP, any of their affiliates, 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 to any tendering stockholder for failure to give any such
notification.
OTHER REQUIREMENTS. By executing the Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of Purchaser as
such stockholder's attorneys-in-fact and proxies, each with full power of
substitution, in the manner set forth in the Letter of Transmittal, to the
full extent of such stockholder's rights with respect to (i) the Shares
tendered by such stockholder and accepted for payment by Purchaser and (ii)
all dividends (other than regular quarterly dividends payable on Preferred
Shares prior to their purchase by Purchaser), distributions (including,
without limitation, distributions of additional Shares) and rights declared,
issued, paid or distributed in respect of any such Shares on or after December
5, 1995 and payable or distributable to such stockholder on a date prior to
the transfer to the name of Purchaser (or a nominee or transferee of
Purchaser) on the Company's stock transfer record of such Shares
(collectively, "Distributions"). All such powers of attorney and proxies are
irrevocable and shall be considered coupled with an interest in the tendered
Shares. This appointment is effective when, and only to the extent that,
Purchaser accepts for payment the Shares deposited with the Depositary. Upon
acceptance for payment, all prior powers of attorney and proxies given by the
stockholder with respect to the Shares and all Distributions will, without
further action, be revoked and no subsequent powers of attorney and proxies
may be given or written consent executed (and, if given or executed, will not
be deemed effective). The designees of Purchaser will, with respect to the
Shares and all Distributions, be empowered to exercise all voting and other
rights of such stockholder as they in their sole discretion deem proper in
respect of any annual or special meeting of the Company's stockholders, or any
adjournment or postponement thereof or in connection with any action that may
be taken by consent in lieu of any meeting or otherwise. Purchaser reserves
the right to require that, in order for Shares to be deemed validly tendered,
immediately upon Purchaser's payment for such Shares, Purchaser must be able
to exercise full voting and other rights of record or
7
<PAGE>
beneficial holder with respect to such Shares and all Distributions, including
voting at any meeting of stockholders (whether annual or special or whether or
not adjourned) or acting by written consent.
A tender of Shares pursuant to any one of the procedures described above
will constitute the tendering stockholder's acceptance of the terms and
conditions of the Offer. Purchaser's acceptance of payment of Shares tendered
pursuant to the Offer will constitute the tendering stockholder's acceptance
of the terms and conditions of the Offer.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares made
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer
may be withdrawn at any time prior to the Expiration Date (other than the
Stockholder Shares, which may only be withdrawn as provided in the Tender
Agreement) and, unless theretofore accepted for payment pursuant to the Offer,
may also be withdrawn at any time after February 2, 1996 (or such later date
as may apply if the Offer is extended). If purchase of or payment for Shares
is delayed for any reason or if Purchaser is unable to purchase or pay for
Shares for any reason, then, without prejudice to Purchaser's rights under the
Offer, tendered Shares may be retained by the Depositary on behalf of
Purchaser and may not be withdrawn except to the extent that tendering
stockholders are entitled to withdrawal rights as set forth in this Section 4,
subject to Rule 14e-1(c) under the Exchange Act, which provides that no person
who makes a tender offer shall fail to pay the consideration offered or return
the securities deposited by or on behalf of security holders promptly after
the termination or withdrawal of the tender offer.
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 notice of withdrawal must, to be valid, specify the name of the person who
tendered the Shares to be withdrawn, the class and number of Shares to be
withdrawn and the name in which the certificates representing such Shares are
registered, if different from that of the person who tendered the Shares. If
certificates for Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
certificates, the serial numbers shown on such certificates must be submitted
to the Depositary and, unless such Shares have been tendered by an Eligible
Institution, the signatures on the notice of withdrawal must be guaranteed by
an Eligible Institution. If Shares have been tendered pursuant to the
procedure for book-entry transfer set forth in Section 3, any notice of
withdrawal must, to be valid, also specify the name and number of the account
at the applicable Book-Entry Transfer Facility to be credited with the
withdrawn Shares. All questions as to the form and validity (including time of
receipt) of notices of withdrawal will be determined by Purchaser, in its sole
discretion, and its determination will be final and binding on all parties.
None of Purchaser, BHP, any of their affiliates or assigns, the Dealer
Manager, the Depositary, the Information Agent nor 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 to any tendering stockholder for
failure to give any such notification.
Any Shares properly withdrawn will be deemed not validly tendered for
purposes of the Offer, but may be retendered at any subsequent time prior to
the Expiration Date by following any of the procedures described in Section 3.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following is a summary of the principal federal income tax consequences
of the Offer and the Merger to holders whose Shares are purchased pursuant to
the Offer or whose Shares are converted to cash in the Merger (including
Dissenting Shares). The discussion applies only to holders of Shares in whose
hands Shares are capital assets, and may not apply to Shares received pursuant
to the exercise of employee stock-options or otherwise as compensation, or to
holders of Shares who are subject to special provisions of the tax law (such
as insurance companies, tax-exempt organizations and non-U.S. persons).
THE FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW ARE INCLUDED FOR GENERAL
INFORMATIONAL PURPOSES ONLY AND ARE BASED UPON CURRENT LAW. BECAUSE INDIVIDUAL
CIRCUMSTANCES MAY DIFFER, EACH HOLDER OF SHARES SHOULD CONSULT
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SUCH HOLDER'S OWN TAX ADVISOR TO DETERMINE THE APPLICABILITY OF THE RULES
DISCUSSED BELOW TO SUCH STOCKHOLDER AND THE PARTICULAR TAX EFFECTS OF THE
OFFER AND THE MERGER TO SUCH STOCKHOLDER, INCLUDING THE APPLICATION AND EFFECT
OF STATE, LOCAL AND OTHER INCOME TAX LAWS.
The receipt of cash for Shares pursuant to the Offer or the Merger
(including Dissenting Shares) will be a taxable transaction for federal income
tax purposes. In general, for federal income tax purposes, a holder of Shares
will recognize gain or loss equal to the difference between (a) such holder's
adjusted tax basis for the Shares sold pursuant to the Offer or converted to
cash in the Merger, and (b) the amount of cash received therefor. Gain or loss
must be determined separately for each block of Shares (i.e., Shares acquired
at the same cost in a single transaction) sold pursuant to the Offer or
converted to cash in the Merger. Such gain or loss will be capital gain or
loss (other than any amounts received with respect to Dissenting Shares which
are deemed to be interest for federal income tax purposes, which amounts will
be taxed as ordinary income) and will be long-term capital gain or loss if, on
the date of sale (or, if applicable, the date of the Merger), the Shares were
held for more than one year. In the case of an individual holder, net long-
term capital gain may be subject to a reduced rate of tax, and net capital
losses may be subject to limits on deductibility.
Payments in connection with the Offer or the Merger may be subject to "back-
up withholding" at a rate of 31%. Back-up withholding generally applies if the
stockholder (a) fails to furnish such stockholder's social security number or
TIN, (b) furnishes an incorrect TIN, or (c) under certain circumstances, fails
to provide a certified statement, signed under penalties or perjury, that the
TIN provided is such stockholder's correct number and that such stockholder is
not subject to back-up withholding. Back-up withholding is not an additional
tax but merely an advance payment, which may be refunded to the extent it
results in an overpayment of tax. Certain persons generally are entitled to
exemption from back-up withholding, including corporations and financial
institutions. Certain penalties apply for failure to furnish correct
information and for failure to include reportable payments in income. Each
stockholder should consult with such stockholder's own tax advisor as to such
stockholder's qualification for exemption from back-up withholding and the
procedure for obtaining such exemption. Tendering stockholders may be able to
prevent back-up withholding by completing the Substitute Form W-9 included in
the Letter of Transmittal. See Section 3.
6. PRICE RANGE OF SHARES; DIVIDENDS.
The Shares are listed and traded on the New York Stock Exchange ("NYSE")
under the trading symbols "MCU" (Common Shares), "MCU.PFD" (Series D Preferred
Shares) and "MCU.PFE" (Series E Preferred Shares). The following tables set
forth for the periods indicated the high and low bid prices per Common Share
and Preferred Share. Common Share prices are as reported in the Company's
Annual Report on Form 10-K for the year ended December 31, 1994 (the "Company
Form 10-K") and, in the case of 1995, as reported on the NYSE based on
published financial sources. Preferred Share prices are as reported on the
NYSE based on published financial sources.
<TABLE>
<CAPTION>
COMMON SHARES HIGH LOW
------------- ------- -------
<S> <C> <C>
1993 (calendar year)
First Quarter............................................ $18 5/8 $13 1/4
Second Quarter........................................... 15 1/4 10 5/8
Third Quarter............................................ 12 1/4 8 7/8
Fourth Quarter........................................... 13 3/4 9
1994 (calendar year)
First Quarter............................................ $17 1/4 $12 7/8
Second Quarter........................................... 17 1/8 13 3/8
Third Quarter............................................ 18 3/4 15 1/4
Fourth Quarter........................................... 18 1/2 15
</TABLE>
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<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
1995 (calendar year)
First Quarter........................................... $18 $15 1/8
Second Quarter.......................................... 18 5/8 13 7/8
Third Quarter........................................... 20 7/8 16 1/8
Fourth Quarter (through December 4, 1995)............... 27 7/8 16 1/8
SERIES D PREFERRED SHARES
1993 (calendar year)
Third Quarter........................................... $53 $45 3/4
Fourth Quarter.......................................... 56 1/4 46
1994 (calendar year)
First Quarter........................................... $66 $54 1/4
Second Quarter.......................................... 63 3/4 54 1/2
Third Quarter........................................... 69 7/8 59 7/8
Fourth Quarter.......................................... 68 1/4 57
1995 (calendar year)
First Quarter........................................... $64 1/2 $56
Second Quarter.......................................... 66 3/4 54 1/2
Third Quarter........................................... 72 3/8 58 3/8
Fourth Quarter (through December 4, 1995)............... 95 7/8 59 1/8
SERIES E PREFERRED SHARES
1993 (calendar year)
Fourth Quarter.......................................... $59 $49 7/8
1994 (calendar year)
First Quarter........................................... $70 $57 1/4
Second Quarter.......................................... 66 5/8 57
Third Quarter........................................... 72 5/8 63
Fourth Quarter.......................................... 72 1/2 61
1995 (calendar year)
First Quarter........................................... $67 7/8 $60 1/8
Second Quarter.......................................... 70 1/4 56 7/8
Third Quarter........................................... 76 62 1/8
Fourth Quarter (through December 4, 1995)............... 99 7/8 61 3/4
</TABLE>
On November 30, 1995, the last full day of trading prior to the date of the
public announcement of the execution of the Merger Agreement and the
announcement that BHP had submitted to the Company a proposal to acquire all
outstanding Common Shares for $28.00 cash per share, all outstanding Series D
Preferred Shares for $96.544 cash per share and all outstanding Series E
Preferred Shares for $100.646 cash per share (see Section 11), the closing
price per share for the Common Shares as reported on the NYSE was $21.375, the
closing price per share as reported on the NYSE for the Series D Preferred
Shares was $73.875 and the closing price per share as reported on the NYSE for
the Series E Preferred Shares was $78.25.
On December 4, 1995, the last full day of trading prior to the commencement
of the Offer, the closing price per share for the Common Shares as reported on
the NYSE was $27.75, the closing price per share as reported on the NYSE for
the Series D Preferred Shares was $95.75 and the closing price per share as
reported on the NYSE for the Series E Preferred Shares was $99.75.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
The Company has not declared or paid any dividends on the Common Shares
during its last 3 fiscal years.
10
<PAGE>
During fiscal year 1994, the Company paid regular quarterly cash dividends
on the Series D Preferred Shares and Series E Preferred Shares of $2.811 per
share and $3.00 per share, totaling $5,622,000 and $6,000,000, respectively.
Thus far during fiscal year 1995, the Company has paid regular quarterly cash
dividends on the Series D Preferred Shares and Series E Preferred Shares of
$2.10938 per share and $2.25 per share, totaling $4,218,750 and $4,500,000,
respectively.
Tendering Shares pursuant to the Offer will not affect the right of
stockholders to receive any dividends with respect to Shares declared by the
Company, if any, with a record date prior to the date on which Purchaser
purchases the Shares pursuant to the Offer. On November 17, 1995, the Company
declared regular quarterly dividends of $0.703125 per share on the Series D
Preferred Shares and $0.75 per share on the Series E Preferred Shares, in each
case payable on December 15, 1995 to stockholders of record at the close of
business on November 28, 1995 for the period from September 16, 1995 through
December 15, 1995. The Offer will expire at 12:00 midnight, New York City
time, on January 4, 1996 unless extended as described elsewhere in this Offer
to Purchase.
7. EFFECT OF THE OFFER ON THE MARKET FOR SHARES, NYSE LISTING, STOCK
QUOTATION, AND REGISTRATION UNDER THE EXCHANGE ACT.
The purchase of the Shares by Purchaser pursuant to the Offer will reduce
the number of Shares that might otherwise trade publicly and will reduce the
number of holders of Shares, which could adversely affect the liquidity and
market value of the remaining Shares held by the public. The purchase of
Shares pursuant to the Offer also can be expected to reduce the numbers of
holders thereof.
NYSE LISTING. Depending on the number of Shares acquired pursuant to the
Offer, the Common Shares and/or Preferred 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 Common Shares
and/or the Preferred Shares if, as a result of the Offer, the number of
holders of 100 shares or more of any such class were reduced to less than
1,200, the number of shares of any such class publicly held (excluding those
held by officers and directors of the Company, members of their immediate
families and persons owning 10% or more of the Common Shares or Preferred
Shares outstanding) were reduced to less than 600,000 or the aggregate market
value of the publicly-held shares of any such class of Shares were reduced to
less than $5 million. In addition, if registration of the Common Shares or
either class of Preferred Shares under the Exchange Act were terminated, such
terminated class of Shares would no longer be eligible for listing on the
NYSE. If, as a result of the purchase of Shares pursuant to the Offer, the
Common Shares or either or both classes of Preferred Shares no longer meet the
requirements of the NYSE for continued listing, the market for Common Shares
and/or Preferred Shares could be adversely affected.
REGISTRATION UNDER THE EXCHANGE ACT. The Common Shares and Preferred Shares
currently are registered under the Exchange Act. Such registrations may be
terminated upon application by the Company to the Commission if there are
fewer than 300 record holders of Common Shares or either or both classes of
Preferred Shares. It is the intention of Purchaser to seek to cause
applications for such terminations to be made as soon after consummation of
the Offer as the requirements for termination of registration of the Common
Shares and either or both classes of Preferred Shares are met. Termination of
registration of the Common Shares and Preferred Shares under the Exchange Act
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)
of the Exchange Act, the requirement of furnishing a proxy statement pursuant
to Section 14(a) of the Exchange Act 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 144A promulgated under the Securities Act
of 1933, as amended (the "Securities Act"), may be impaired or eliminated.
Notwithstanding the foregoing, the Company will remain subject to reporting
obligations under the Exchange Act so long as the Company's 12% Senior
Subordinated
11
<PAGE>
Notes due December 15, 2001, 11 1/2% Senior Subordinated Notes due January 15,
2002 and/or 8.70% Senior Subordinated Notes due May 15, 2005, all of which are
registered under the Exchange Act, continue to be so registered.
The Shares currently are "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve
Board"), which has the effect, among other things, of allowing brokers to
extend credit on the collateral of the Shares. Depending upon factors similar
to those described above regarding listing and market quotations, it is
possible that, following the Offer, the Shares would no longer 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. If registration of one or more classes of Shares under the
Exchange Act were terminated, the Shares of such class(es) would no longer be
"margin securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
The Company is a Delaware corporation with its principal executive offices
located at 7400 North Oracle Road, Suite 200, Tucson, Arizona 85704. Except as
otherwise set forth herein, the information concerning the Company contained
in this Offer to Purchase, including financial information, has been furnished
by the Company or has been taken from or based upon publicly available
documents and records on file with the Commission and other public sources.
Although none of Purchaser, Sub or BHP has any knowledge that would indicate
that statements contained herein based upon such documents are untrue, none of
Purchaser, Sub, BHP, any of their affiliates, or the Dealer Manager assumes
any responsibility for the accuracy or completeness of the information
concerning the Company, furnished by the Company, or contained in such
documents and records or for any failure by the Company to disclose events
which may have occurred or may affect the significance or accuracy of any such
information but which are unknown to Purchaser, Sub and BHP.
According to the Company's filings with the Commission, the Company is a
fully integrated producer of electrolytic copper and ranks among the largest
copper producers in the United States. The Company's principal products are
high quality copper cathode and copper rod. The Company's operations also
produce gold and silver-bearing residues, molybdenum disulfide and sulfuric
acid as by-products of its copper mining and smelting operations.
Set forth below is certain selected historical consolidated financial
information with respect to the Company excerpted or derived from financial
information contained in the audited financial statements that were provided
by the Company to BHP and Purchaser, and certain unaudited consolidated
summary information with respect to the nine months ended September 30, 1995
and September 30, 1994 which is excerpted or derived from the Company's Form
10-Q for the Quarter ended September 30, 1995 filed November 14, 1995. More
comprehensive financial information is included in (i) the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1994, and (ii)
other reports and documents filed by the Company with the Commission, and the
following summary is qualified in its entirety by reference to such reports
and such other documents and all the financial information (including any
related notes) contained therein. The reports and other documents filed with
the Commission should be available for inspection and copies thereof should be
obtainable in the manner set forth below.
12
<PAGE>
MAGMA COPPER COMPANY
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE NINE
MONTHS ENDED FOR THE YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
--------------- --------------------
1995 1994 1994 1993 1992
-------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Sales(1)................................. $1,051.7 $622.1 $889.6 $792.4 $819.5
Net income (loss) after taxes and before
Preferred Stock Dividends............... 158.1 50.5 87.4 21.9 55.3
Net earnings (loss) per Common Share
(fully diluted)(2)...................... 2.50 .80 1.38 .40 1.19
</TABLE>
- --------
(1) Certain freight costs have been reclassified as a deduction from revenue
rather than a selling expense. All years have been restated to reflect
this change.
(2) There were no cash dividends paid or declared on common stock during any
of these three periods.
<TABLE>
<CAPTION>
AS OF
AS OF DECEMBER 31,
SEPTEMBER 30, --------------------------
1995 1994 1993 1992(1)
------------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA
Cash and Marketable Securities........ $ 62.0 $ 88.2 $ 339.3 $ 242.2
Total Assets.......................... 1,934.5 1,576.6 1,350.8 1,156.5
Long-term Debt(2)..................... 582.1 386.8 392.3 395.0
Shareholders' Equity.................. 882.8 760.1 680.2 465.4
</TABLE>
- --------
(1) Reflects the non-cash accounting adjustments related to the Restructuring
and Quasi-Reorganization implemented in December 31, 1991.
(2) Net of current portion of long-term debt.
The Company is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith files periodic reports, proxy
statements and other information with the Commission relating to its business,
financial condition and other matters. The Company is required to disclose in
such proxy statements certain information, as of particular dates, concerning
the Company's directors and officers, their remuneration, stock options
granted to them, the principal holders of the Company's securities and any
material interests of such persons in transactions with the Company. Such
reports, proxy statements and other information may be inspected at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and may be inspected and copied at
prescribed rates at the regional offices of the Commission located at Seven
World Trade Center, 13th Floor, New York, New York 10048 and Citicorp Center,
500 West Madison Street (Suite 1400), Chicago, Illinois 60661. Copies of this
material may also be obtained by mail, upon payment of the Commission's
customary fees, from the Commission's principal office at 450 Fifth Street,
N.W., Washington, D.C. 20549. Such materials should also be available on-line
through EDGAR and for inspection at the library of the NYSE, 20 Broad Street,
New York, New York 10005.
9. CERTAIN INFORMATION CONCERNING PURCHASER, SUB AND BHP.
BHP, a Victoria, Australia corporation, was incorporated in 1885. Purchaser
is a newly formed Delaware corporation and a wholly owned subsidiary of Sub, a
Delaware corporation which was incorporated in 1984 and which is an indirect
subsidiary of BHP. The name, business address, citizenship and present
principal occupation or employment of each of the executive officers of
Purchaser, Sub and BHP are set forth on Annex I hereto.
The principal executive office of BHP is located at BHP Tower, Bourke Place,
600 Bourke Street, Melbourne, Victoria 3000 Australia. The principal executive
office of Purchaser is located at 550 California Street, San Francisco,
California 94104. The principal executive office of Sub is located at 900
Market Street, Suite 200, Wilmington, Delaware 19801.
13
<PAGE>
BHP is a major international resources company which has its headquarters in
Australia and operations in over 20 countries. BHP's three principal areas of
business are minerals exploration and production (principally coal, iron ore,
copper concentrate and manganese ore), hydrocarbon exploration, production and
refining and steel production. During fiscal year 1994-95, BHP had sales in
over 50 countries. At May 31, 1995, BHP employed approximately 49,000 people
world wide (including BHP's share of joint venture employees). In fiscal year
1994-95, BHP contributed approximately 1.4% of total Australian Gross Domestic
Product and approximately 8.0% of total Australian merchandise exports. The
total market capitalization of BHP at May 31, 1995 was Australian dollars
34.15 billion.
To date, Purchaser has not, and is not expected to, conduct any business
other than that incident to formation, the execution and delivery of the
Merger Agreement and the commencement of the Offer and Merger. Accordingly, no
meaningful financial information with respect to Purchaser is available. Sub
is a holding company and conducts no operations other than holding the
securities of other operating companies. The separate financial information of
Sub also is not meaningful to the Offer. BHP files periodic reports and other
information with the Commission relating to its business, financial statements
and other matters. Such reports and other information may be inspected, and
copies may be obtained, at the offices of the Commission and the library of
the NYSE in the same manner as set forth with respect to the Company in
Section 8. Set forth below is certain selected historical consolidated
financial information with respect to BHP excerpted or derived from financial
information contained at pages F-1 to F-61 of BHP's Annual Report on Form 20-F
for the year ended May 31, 1995 filed with the Commission on September 1, 1995
(which pages are hereby incorporated by reference herein). More comprehensive
financial information is included in such report and other documents filed by
BHP with the Commission, and the following summary is qualified in its
entirety by reference to such reports and such other documents and all the
financial information (including any related notes) contained therein. Such
reports and other documents should be available for inspection and copies
thereof should be obtainable from the Commission in the manner set forth in
Section 8.
THE BROKEN HILL PROPRIETARY COMPANY LIMITED SUMMARY HISTORICAL CONSOLIDATED
FINANCIAL DATA*
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
MAY 31, 1995 MAY 31, 1994
------------ ------------
(IN MILLIONS, EXCEPT
PER SHARE AMOUNTS)*
<S> <C> <C>
INCOME STATEMENT DATA
(stated in accordance with U.S. GAAP)
Operating Revenue................................... $12,754 $12,218
Estimated Operating Profit After Income Tax......... 971 918
Per A$1 Ordinary Share, attributable to members of
BHP................................................ 0.63 0.62
Per American Depositary Share (ADS), attributable to
members of BHP**................................... 2.51 2.49
<CAPTION>
YEAR ENDED YEAR ENDED
MAY 31, 1995 MAY 31, 1994
------------ ------------
<S> <C> <C>
BALANCE SHEET DATA
(stated in accordance with U.S. GAAP)
Total Assets........................................ $21,138 $19,731
Total Long Term Debt................................ 4,312 4,170
Shareholders' equity attributable to members of BHP
................................................... 8,128 6,925
</TABLE>
- --------
* The amounts shown are Australian dollar (A$) amounts translated into U.S.
dollar ($) equivalents based on the specified exchange rates of $.719 per
A$ and $.7385 per A$ as at May 31, 1995 and May 31, 1994, respectively,
based on the noon buying rate in New York City for cable transfers in
foreign currencies as certified for customs purposes by the Federal Reserve
Bank of New York.
** Each ADS is evidenced by American Depository Receipts, for which Morgan
Guaranty Trust Company of New York is the Depositary, and represents the
right to receive four A$1 Ordinary Shares.
14
<PAGE>
Except as set forth in this Offer to Purchase, none of Purchaser, Sub or
BHP, or, to the best knowledge of Purchaser, Sub and BHP, any of the persons
listed in Annex I to this Offer to Purchase, owns any Shares and none of them
has effected any transaction in the Shares during the past 60 days.
Except as set forth in this Offer to Purchase, none of Purchaser, Sub or
BHP, or, to the best knowledge of Purchaser, Sub or BHP, any of the persons
listed in Annex I to this Offer to Purchase, has any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of the Company, including, without limitation, 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, guaranties of loans, guaranties against loss or
the giving or withholding of proxies. None of Purchaser, Sub or BHP, or, to
the best knowledge of Purchaser, Sub or BHP, any of the persons listed in
Annex I to this Offer to Purchase has had any transactions with the Company,
or any of its executive officers, directors or affiliates that would require
reporting, under the rules of the Commission.
Except as set forth in this Offer to Purchase, there have been no contacts,
negotiations or transactions between Purchaser, Sub or BHP, nor their
respective subsidiaries, or, to the best knowledge of Purchaser, Sub or BHP,
any of the persons listed in Annex I to this Offer to Purchase, 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 that would require reporting
under the rules of the Commission.
10. SOURCE AND AMOUNT OF FUNDS.
If all outstanding Shares are tendered to and purchased by Purchaser, the
aggregate purchase price for such Shares and all estimated commissions, fees
and expenses relating to the Offer will be approximately U.S.$1.83 billion.
The Offer is not subject to a financing contingency.
Purchaser will obtain the funds to purchase the Shares through intercompany
funding arrangements. The cash needs of the BHP Group of Companies (the "BHP
Group") are generally financed through arrangements with BHP Finance Limited
("BFL"), a wholly owned subsidiary of BHP. BFL in turn may, from time to time,
borrow funds pursuant to its general corporate financing program.
BFL has access to a variety of sources of financing including a number of
credit agreements and standby facilities. BFL has access to additional
financing through a number of major banks with whom it has working
relationships. In order to meet the forecasted general corporate cash needs of
the BHP Group (including cash which may be used to purchase the Shares
pursuant to the Offer), BFL expects to enter into additional loan agreements
before January 1, 1996, in an aggregate amount of not less than A$2 billion,
with at least two banks out of a number of relationship banks which have
confirmed that they would be prepared to enter such agreements. The specific
banks from which such borrowings will be made have not yet been identified.
The maturities of BFL's borrowings generally vary from one to ten years and
the interest rates are generally linked to LIBOR or Australian Bank Bill
Rates, and generally are payable at periods of one, three or six months.
All current and anticipated borrowings of BFL are unsecured; however, the
payment obligations of BFL are guaranteed by BHP. It is expected that the cash
flow of the BHP Group, in the ordinary course of business, will be sufficient
to enable BFL to repay its borrowings.
11. BACKGROUND OF THE OFFER; PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH
THE COMPANY.
Starting in May, 1993, the Company and BHP prepared a joint bid to purchase
the 50% interest in the El Abra mining property located in Chile, which was
being privatized by the Chilean government. The parties' joint bid was
rejected by the Chilean government in October, 1993.
Thereafter, beginning in February, 1994, members of the senior management of
BHP and the Company explored the possibility of establishing a joint venture
with one or more third parties. These discussions contemplated a possible
combination in such joint venture of the Company's and such third parties'
respective
15
<PAGE>
copper operations, and a contribution of cash to the joint venture by BHP. The
discussions never evolved beyond the preliminary stages, however, and were
terminated in April, 1994.
Subsequently, officials of BHP began to believe that an acquisition of the
Company would make strategic sense for BHP. Thus, in June, 1995, Mr. J.K.
Ellis, Director and Executive General Manager of BHP Minerals, telephoned Mr.
J. Burgess Winter, President and Chief Executive Officer of the Company, to
seek his views as to a possible acquisition of the Company by BHP or one of
its subsidiaries. Messrs. Ellis and Winter did not have any substantive
discussions during such call, and only discussed the possibility of setting up
a meeting for a later date. Messrs. Ellis and Winter met briefly on July 12,
1995, and the parties subsequently held a larger meeting later that day, at
which Messrs. Ellis, Winter, Donald J. Donahue, Chairman of the Board of the
Company, and John L. Vogelstein, a director of the Company and Vice Chairman
of the Board and President of E.M. Warburg, Pincus & Co., Inc., the parent of
the Company's largest stockholder, were present. At such meetings, Mr. Ellis
again raised the possibility of an acquisition of the Company by BHP. Such
meetings did not result in any agreements between the parties. However, after
a follow-up telephone call from Mr. Ellis to Mr. Winter the following week,
the parties agreed that other senior members of their respective management
should get together to discuss matters further. No such subsequent meetings
were held, however, and such discussions were terminated at that point.
Thereafter, once in late August and again in early September, 1995,
representatives of CS First Boston contacted Mr. Vogelstein by telephone to
see if further meetings could be arranged between BHP and the Company. In a
subsequent meeting on September 29, 1995, representatives of CS First Boston
discussed with Messrs. Winter, Vogelstein and Christopher W. Brody, Managing
Director of E.M. Warburg, Pincus & Co., Inc. and a director of the Company,
possible structures and a range of prices at which BHP might be interested in
pursuing an acquisition of the Company. Subsequently, at a meeting held on
October 18, 1995 between Messrs. B.T. Loton, Chairman of BHP, J.B. Prescott,
Managing Director and Chief Executive Officer of BHP, and Messrs. Ellis,
Winter and Vogelstein, the parties again discussed possible structures and a
range of prices at which BHP might be interested in pursuing an acquisition of
the Company.
Subsequently, Messrs. Winter, Vogelstein and Bradford A. Mills, Executive
Vice President of the Company, flew to Australia where they met during the
period October 29-31, 1995 with Messrs. Loton, Prescott and Ellis and other
senior members of management of BHP to discuss further a range of prices and
possible structure for such an acquisition. As a result of such discussions,
the parties determined that BHP would commence promptly a "due diligence"
investigation of the Company, and that negotiations over definitive agreements
should also be commenced by the parties.
In connection with such arrangements, on October 30, 1995, BHP and the
Company entered into a confidentiality agreement (as amended, the
"Confidentiality Agreement") pursuant to which (a) the Company agreed to
provide BHP, and BHP agreed to keep confidential, certain information
concerning the Company to be provided to BHP in connection with its evaluation
of a possible transaction involving the Company, and (b) BHP and its
affiliates agreed that, until October 30, 1996 (the "Standstill Period"), they
would not (and would not assist or encourage others to), directly or
indirectly, without the prior consent of the Company's Board of Directors,
acquire or agree, offer, seek or propose to acquire, (or request permission to
do so) ownership of any of the Company's assets or businesses or any
securities issued by the Company, or any rights or options to acquire such
ownership (described as an "Acquisition Transaction"), or seek or propose to
influence or control the Company's management or the Company's policies (or
request permission to do so), or enter into any discussions, negotiations,
arrangements or understanding with any third party with respect to any of the
foregoing (or request permission to do so).
The Confidentiality Agreement further provides that, if prior to the
expiration or termination of the Standstill Period, (a) the Company enters
into a definitive agreement providing for an Acquisition Transaction with a
party other than BHP or its affiliates, or (b) a third party commences a
tender or exchange offer for more than 50% of the Common Shares and the
Company's Board of Directors recommends that the Company's stockholders tender
their Common Shares in such tender or exchange offer (any of the foregoing, an
"Alternative Transaction"), the restrictions applicable during the Standstill
Period shall not be applicable with respect to any Acquisition Transaction
proposed by BHP or its affiliates, provided that such proposed Acquisition
Transaction provides for
16
<PAGE>
(i) the purchase of, or offer to purchase, all outstanding Common Shares for
cash, and (ii) a purchase price per share in excess of the price proposed to
be paid and/or other value proposed to be received by the holders of the
Common Shares in the Alternative Transaction. If prior to the expiration or
termination of the Standstill Period the Merger Agreement shall have been
terminated without the Offer having been consummated, then the restrictions
applicable during the Standstill Period shall not be applicable with respect
to any Acquisition Transaction proposed by BHP or its affiliates, provided
that such proposed Acquisition Transaction is at least the equivalent of such
Alternative Transaction.
On November 3, 1995, BHP began conducting its "due diligence" review of the
Company's business and properties during which members of management and the
financial and legal advisors of BHP and Purchaser examined certain non-public
financial, operational and legal information provided by the Company and
interviewed senior management of the Company regarding such information and
the Company. Such due diligence investigation was completed on November 15,
1995.
Beginning the week of November 6, 1995, drafts of the Merger Agreement were
exchanged by the parties. On November 13, 1995, the legal advisors of the
companies commenced detailed discussions over the terms of the Offer and the
Merger Agreement.
On November 16, 1995 representatives of CS First Boston met with Messrs.
Brody and Vogelstein and informed them that, based on the results of BHP's due
diligence examination of the Company, BHP would be willing to proceed with an
acquisition of the Company at a price of $28 per Common Share (and its
equivalent for the Preferred Shares), subject to negotiation of definitive
terms of the relevant documents. On November 17, 1995, Messrs. Donahue and
Winter met with Mr. Ellis who confirmed the information conveyed by CS First
Boston. On November 19, 1995, Mr. Winter called Mr. Prescott and Mr. Prescott
confirmed that BHP would offer $28 per Common Share (and its equivalent for
the Preferred Shares) subject to negotiation of final documentation.
Thereafter, from November 24 through November 30, 1995, members of
management and the financial and legal advisors of the companies negotiated
the definitive terms of the Merger Agreement and the Offer.
On the evening of November 30, 1995, local New York City time, the
respective Boards of Directors of the Purchaser, Sub and BHP approved the
terms of the Offer substantially as described in this Offer to Purchase and
approved the transactions contemplated by the Merger Agreement. Thereafter,
the Company's Board of Directors met and approved the Offer, the Merger
Agreement and the transactions contemplated thereby. Later that evening, the
Merger Agreement was executed by the parties and BHP and the Company issued a
joint press release announcing execution of the Merger Agreement.
In connection with the November discussions regarding the Offer and Merger
Agreement, legal advisors of BHP and Purchaser also held discussions with
legal advisors of Warburg, Pincus. These discussions culminated in the
execution of the Tender Agreement by BHP and Warburg, Pincus on November 30,
1995. See Introduction.
As part of the Tender Agreement, Warburg, Pincus has agreed that it shall
not, directly or indirectly, solicit any proposal by any person or entity
(other than BHP or its affiliates) which constitutes, or may reasonably be
expected to lead to, an Acquisition Proposal (as defined in the Merger
Agreement). In addition, Warburg, Pincus agreed that, while the Tender
Agreement is in effect, it would not (i) sell, transfer, pledge, encumber,
assign or dispose of, or enter into any contract, option or other arrangement
or understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Stockholder Shares, (ii) grant
any proxies, deposit any of its Shares into a voting trust or enter into a
voting agreement with respect to any of the Stockholder Shares or (iii) take
any action that would make any of its representations or warranties untrue or
have the effect of preventing or disabling Warburg, Pincus from performing its
obligations under the Tender Agreement. The Tender Agreement further provides
that it shall terminate on the first to occur of (a) the Effective Time, (b)
the termination of the Merger Agreement in accordance with its terms, (c) the
Company's Board of Directors having withdrawn its approval or recommendation
of the Offer or the Merger, (d) the Company's
17
<PAGE>
Board of Directors having modified its approval of the Offer or the Merger in
any manner adverse to BHP and (e) written notice of termination of the Tender
Agreement from BHP to Warburg, Pincus.
In the November 30 press release, BHP announced publicly that it had made,
and the Company's Board of Directors had recommended to its stockholders, a
proposal by Purchaser to acquire all outstanding Common Shares, Series D
Preferred Shares and Series E Preferred Shares at prices of $28.00, $96.544
and $100.646, respectively, net per share in cash. The press release also
announced that Warburg, Pincus has agreed to tender its Shares in the Offer in
accordance with the recommendation of the Company's Board of Directors. On
December 5, 1995, Purchaser commenced the Offer.
Pursuant to the provisions of the Standstill Agreement, dated as of November
30, 1988, between the Company and Warburg, Pincus (the "Warburg Standstill
Agreement") (a copy of which was filed as Exhibit 2 to Warburg, Pincus'
Schedule 13D, filed December 5, 1988, as amended, in connection with its
ownership of Common Shares), Warburg, Pincus was granted the right to nominate
three persons (or fewer, depending upon Warburg, Pincus' equity ownership in
the Company) to the Company's Board of Directors. Two of the Directors of the
Company nominated by Warburg, Pincus, Mr. Vogelstein and Christopher W. Brody,
are President and a Managing Director, respectively of E.M. Warburg, Pincus &
Co., an affiliate of Warburg, Pincus. The third Director of the Company
nominated by Warburg, Pincus is Simon D. Strauss, a consultant to the mining
industry and retired Vice Chairman of ASARCO Incorporated, a primary copper
producer. In addition, the Chairman of the Board of Directors of the Company,
Mr. Donahue, is also a director of several Counselors Funds, whose investment
manager is an affiliate of E.M. Warburg, Pincus & Co.
12. PURPOSE OF THE OFFER AND THE MERGER; APPRAISAL RIGHTS; PLANS FOR THE
COMPANY.
The purpose of the Offer, the Merger and the Merger Agreement is to enable
BHP to acquire control of, and the entire equity interest in, the Company.
Upon consummation of the Merger, the Company will become an indirect wholly
owned subsidiary of BHP. The Offer is being made pursuant to the Merger
Agreement.
Under the DGCL and the Company's Restated Certificate of Incorporation, the
approval of the Board of Directors of the Company and the affirmative vote of
the holders of a majority of the outstanding voting stock of the Company on a
fully diluted basis are required to approve and adopt the Merger Agreement and
the Merger. The Company's Board of Directors unanimously has approved the
Offer, the Merger and the Merger Agreement and the transactions contemplated
thereby, and, unless the Merger is consummated pursuant to the short-form
merger provisions under Section 253 of the DGCL described below, the only
remaining required corporate action of the Company is the approval and
adoption of the Merger Agreement and the Merger by the affirmative vote of the
holders of a majority of the outstanding voting stock. If the Minimum
Condition is satisfied, Purchaser will have sufficient voting power to cause
the approval and adoption of the Merger Agreement and the Merger without the
affirmative vote of any other stockholder.
The Merger Agreement provides that, if approval or action in respect of the
Merger by the stockholders of the Company is required by the DGCL or its
Restated Certificate of Incorporation, the Company will, (i) take all action
necessary to convene a meeting of its stockholders (the "Stockholder Meeting")
promptly after the Expiration Date for the purpose of voting upon the Merger,
(ii) use all reasonable efforts to solicit from stockholders of the Company
proxies in favor of the adoption of the Merger Agreement and (iii) if the
Stockholder Meeting is to be called, and if requested by Purchaser, take all
other action reasonably necessary to secure the vote of stockholders in favor
of adoption of the Merger Agreement, subject to the fiduciary duties of its
Board of Directors.
SHORT FORM MERGER. Under the DGCL, if Purchaser acquires at least 90% of the
outstanding shares of each class of stock of the Company, Purchaser will be
able to approve the Merger without a vote of the Company's other stockholders.
The only classes of stock of the Company outstanding are the Common Shares,
the Series D Preferred Shares and the Series E Preferred Shares. The Merger
Agreement provides that if Purchaser acquires at least 90% of the outstanding
shares of each class of stock of the Company, Purchaser, Sub, BHP and the
Company will take all necessary and appropriate action to cause the Merger to
become effective as
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soon as practicable after the expiration of the Offer without a meeting of
stockholders of the Company in accordance with Section 253 of the DGCL. If
Purchaser does not acquire at least 90% of the outstanding shares of each
class of stock of the Company, a significantly longer period of time may be
required to effect the Merger than would be the case if the Purchaser were to
acquire at least 90% of the outstanding voting stock, because a vote of the
Company's stockholders would be required under the DGCL.
APPRAISAL RIGHTS. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders of the Company will
have certain rights under the DGCL to dissent and demand appraisal of, and to
receive payment in cash of the fair value of, their Shares in connection with
such consummation. Such rights to dissent, if the statutory procedures are
complied with by dissenting shareholders, could lead to a judicial
determination of the fair value of the Shares (excluding any element of value
arising from the accomplishment or expectation of the Merger), to be required
to be paid in cash to such dissenting holders for their Shares. In addition,
such dissenting stockholders would be entitled to receive payment of a fair
rate of interest from the date of consummation of the Merger on the amount
determined to be the fair value of their Shares. In determining the fair value
of the Shares, a Delaware court would be required to take into account all
relevant factors. Accordingly, such determination could be based upon
considerations other than, or in addition to, the market values of the Shares,
including, among other things, asset values and earning capacity. In
Weinberger v. UOP, Inc. ("Weinberger"), the Delaware Supreme Court states,
among other things, that "proof of value by any techniques or methods which
are generally considered acceptable in the financial community and otherwise
admissible in court" should be considered in an appraisal proceeding.
Therefore, the value so determined in any appraisal proceeding could be
different from the price being paid in the Offer or pursuant to the Merger.
In addition, several decisions by Delaware courts have held that, in certain
circumstances, a controlling stockholder of a company involved in a merger has
a fiduciary duty to other stockholders which requires that the Merger be fair
to such other stockholders. In determining whether a merger is fair to
minority stockholders, Delaware courts have considered, among other things,
the type and amount of consideration to be received by the stockholders and
whether there was fair dealing among the parties. The Delaware Supreme Court
states in Weinberger and Rabkin v. Philip A. Hunt Chemical Corp. that although
the remedy ordinarily available to minority stockholders in a cash-out merger
is the right to appraisal described above, a damages remedy or injunctive
relief may be available if a merger is found to be the product of procedural
unfairness, including fraud, misrepresentation or other misconduct.
THE FOREGOING SUMMARY OF THE RIGHTS OF OBJECTING STOCKHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
SHAREHOLDERS DESIRING TO EXERCISE ANY AVAILABLE DISSENTERS' RIGHTS. THE
PRESERVATION AND EXERCISE OF DISSENTERS' RIGHTS REQUIRES STRICT ADHERENCE TO
THE APPLICABLE PROVISIONS OF SECTION 262 OF THE DGCL, AND WILL ONLY BE
AVAILABLE IN CONNECTION WITH THE CONSUMMATION OF THE MERGER.
RULE 13E-3. The Commission has adopted Rule 13e-3 under the Exchange Act
which is applicable to certain "going private" transactions and which may
under certain circumstances be applicable to the Merger or another business
combination following the purchase of Shares pursuant to the Offer or
otherwise in which Purchaser seeks to acquire the remaining Shares not held by
it. Purchaser believes, however, that Rule 13e-3 will not be applicable to the
Merger if the Merger is consummated within one year after the termination of
the Offer at the same per share price as paid in the Offer. If applicable,
Rule 13e-3 requires, among other things, that certain financial information
concerning the Company and certain information relating to the fairness of the
proposed transaction and the consideration offered to minority stockholders in
such transaction, be filed with the Commission and disclosed to stockholders
prior to consummation of the transaction.
PURCHASES OF SHARES. Pursuant to the terms of the Confidentiality Agreement,
BHP has agreed that neither it nor its affiliates will effect any transactions
in the Company's securities during the Standstill Period, subject to certain
exceptions described in Section 11. Purchaser reserves the right, subject to
the terms of the Merger Agreement, to dispose of any or all Shares that it may
acquire.
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BOARD REPRESENTATION. The Merger Agreement provides that, promptly upon the
purchase of such number of Shares as satisfies the Minimum Condition and from
time to time thereafter, Purchaser will be entitled to designate such number
of directors, rounded up to the next whole number, on the Board of Directors
of the Company as will give Purchaser, subject to compliance with Section
14(f) of the Exchange Act, representation on the Board of Directors of the
Company equal to the product of (a) the number of directors on the Board of
Directors of the Company (after giving effect to the appointment of such
directors) and (b) the percentage that the number of Common Shares purchased
by Purchaser bears to the number of Common Shares outstanding. The Company has
agreed that, upon request of Purchaser, it will promptly (i) increase the size
of the Company's Board of Directors to the extent permitted by its Restated
Certificate of Incorporation and By-Laws (and amend the Restated Certificate
of Incorporation and By-Laws, if so required, to increase the size of the
Board of Directors to allow for such additional directors) and/or (ii) take
all steps necessary and appropriate to secure the resignations of such number
of directors as is necessary to enable Purchaser's designees to be elected to
the Board of Directors (and hold a meeting for such purpose) (provided,
however, that the Company shall not have fewer than three Continuing Directors
(as the term is defined in the Restated Certificate of Incorporation) of whom
at least two are Independent Directors (as the term is defined in the Warburg
Standstill Agreement)); and (iii) cause Purchaser's designees to be so
elected. At the request of Purchaser, the Company has agreed to promptly take,
at its expense, all action required by Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder and necessary to effect any such election,
including the mailing to its stockholders of the information required to be
disclosed pursuant thereto. Purchaser and Sub will supply to the Company in
writing and be solely responsible for any information with respect to
themselves and their nominees, officers, directors and affiliates required by
Section 14(f) and Rule 14f-1.
Pursuant to the Merger Agreement, following the election of designees of
Purchaser, and prior to the Effective Time, the affirmative vote of a majority
of the Continuing Directors of the Company then in office who are directors as
of the date of the Merger Agreement will be required to, in addition to any
other action requiring the approval of the directors by applicable law or the
Restated Certificate of Incorporation or By-Laws of the Company, (i) amend or
terminate the Merger Agreement by the Company, (ii) waive any of the Company's
rights or exercise any of its remedies under the Merger Agreement, (iii)
extend the time for performance of Purchaser's obligations under the Merger
Agreement or (iv) take any other action by the Company in connection with the
Merger Agreement required to be taken by the Board of Directors of the
Company, whether or not the Continuing Directors constitute a quorum.
PLANS FOR THE COMPANY. Except as otherwise set forth in this Offer to
Purchase, it is expected that, initially following the Merger, the business
and operations of the Company will be continued by the Surviving Corporation
substantially as they are currently being conducted. BHP intends to operate
the Company as a subsidiary of BHP. The directors of Purchaser will be the
initial directors of the Surviving Corporation and the then officers of the
Company, other than the Chairman of the Board, and such other persons as are
designated by BHP shall be the initial officers of the Surviving Corporation.
After the purchase of Shares pursuant to the Offer and prior to the Effective
Time, it is anticipated that the Company will not declare any dividends on the
Common Shares and may declare quarterly any dividends on the Preferred Shares.
See Section 14.
BHP will evaluate the business, operations, capitalization and management of
the Company during the pendency of, and after the consummation of, the Offer,
and will take such actions as it deems appropriate under the circumstances
then existing with a view to optimizing the Company's potential in conjunction
with BHP's business. It presently is anticipated that, following the Merger,
the Company's business will be combined with BHP's existing copper business
and a new BHP Copper Group will be established and will be led by Mr. Winter.
Except as indicated in this Offer to Purchase, BHP does not have any present
plans or proposals which relate to or would result in an extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
involving the Company or any of its subsidiaries, a sale or transfer of a
material amount of assets of the Company or any of its subsidiaries or any
material change in the Company's capitalization or dividend policy or any
other material changes in the Company's corporate structure or business, or
the composition of the Company's board of directors or management.
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13. THE MERGER AGREEMENT.
The following summary of certain provisions of the Merger Agreement, a copy
of which is filed as an exhibit to the Schedule 14D-1, is qualified in its
entirety by reference to the text of the Merger Agreement.
THE OFFER. Purchaser commenced the Offer in accordance with the terms of the
Merger Agreement.
THE MERGER. The Merger Agreement provides that, upon the terms and subject
to the conditions of the Merger Agreement, and in accordance with the DGCL,
Purchaser shall be merged with and into the Company. Following the Effective
Time, the separate corporate existence of Purchaser will cease and the Company
will continue as the Surviving Corporation and will succeed to and assume all
the rights and obligations of Purchaser in accordance with the DGCL. The
Restated Certificate of Incorporation of the Company shall become the
Certificate of Incorporation of the Surviving Corporation and the By-Laws of
Purchaser shall become the By-Laws of the Surviving Corporation.
CONVERSION OF SHARES. At the Effective Time, each Common Share issued and
outstanding immediately prior thereto will be canceled and extinguished and
each Common Share (other than Common Shares held by the Company as treasury
Shares, Common Shares owned by Purchaser and Dissenting Shares) will be
converted into and become solely the right to receive $28.00 net in cash
(adjusted for stock splits or other similar events) per share without interest
upon the surrender of the certificate formerly representing such Common Share.
Each Preferred Share issued and outstanding immediately prior to the Effective
Time (other than Preferred Shares held by the Company as treasury shares,
Preferred Shares owned by Purchaser and Dissenting Shares) shall automatically
be cancelled and extinguished and be convertible into and become solely a
right to receive cash in an amount equal to (x) the number of Common Shares
into which such Preferred Share would have been converted immediately prior to
the Effective Time multiplied by (y) $28.00 net in cash (adjusted for stock
splits or other similar events) per share without interest. All Shares held as
treasury shares and shares held by the Purchaser or any of its affiliates will
be cancelled at the Effective Time. All shares of capital stock of Purchaser
issued and outstanding immediately prior to the Effective Time shall be
converted and changed into an equal number of shares of capital stock of the
Surviving Corporation.
DISSENTING SHARES. The Merger Agreement provides that, if required by the
DGCL, Dissenting Shares will not be cancelled and converted into the right to
receive the appropriate Merger Consideration, and holders of such Dissenting
Shares will be entitled to receive payment of the appraised value of such
Dissenting Shares in accordance with the provisions of Section 262 of the
DGCL, unless and until such holders fail to perfect or effectively withdraw or
lose their rights to appraisal and payment under the DGCL. If, after the
Effective Time, any holder fails to perfect or effectively withdraws or loses
such right, such Dissenting Shares will thereupon be treated as if they had
been cancelled and converted into, at the Effective Time, the right to receive
the appropriate Merger Consideration, without interest. See Section 12 "--
Appraisal Rights."
COMPANY STOCK OPTIONS. Pursuant to the Merger Agreement, at the Effective
Time, each option to purchase Shares issued by the Company (the "Company Stock
Options") which is outstanding at the Effective Time shall be cancelled by
virtue of the Merger. Purchaser has agreed to pay to each holder thereof cash
in an amount per Share subject to such cancelled Company Stock Option equal to
the excess of $28.00 over the exercise price per Share of such Company Stock
Option.
REPRESENTATIONS AND WARRANTIES. Pursuant to the Merger Agreement, the
Company has made customary representations and warranties to Purchaser, Sub
and BHP, including, but not limited to, representations and warranties
relating to the Company's organization and qualification, its subsidiaries,
its capitalization, its authority to enter into the Merger Agreement and carry
out the transactions contemplated thereby, filings made by the Company with
the Commission under the Securities Act and the Exchange Act (including
financial statements included in the documents filed by the Company under
these acts for the fiscal year ended December 31, 1994), its litigation, its
employee relations and benefits, its taxes, its compliance with laws, its
mineral properties, water rights and title to properties, and certain
environmental matters.
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Purchaser, Sub and BHP have also made customary representations and
warranties to the Company, including, but not limited to, representations and
warranties relating to Purchaser, Sub and BHP's organization and authority to
enter into the Merger Agreement, that Purchaser will have sufficient funds
available to it to purchase the Shares and that none of Purchaser, Sub or BHP
owns (other than possibly through their employee benefit plans) any Shares.
COVENANTS RELATING TO THE CONDUCT OF BUSINESS. Pursuant to the Merger
Agreement, the Company has agreed that it will, and will cause its
subsidiaries to carry on, in all material respects, their respective
businesses in the ordinary course, not issue any capital stock, except as
specified in the Merger Agreement, or take any other action with respect to
its capital stock, not take any action to sell or encumber in any manner their
capital stock or material assets other than in the ordinary course of
business, not amend or propose to amend their certificates of incorporation or
By-laws or similar governing instruments, not enter into any material
transaction other than in the ordinary course of business, not incur any
indebtedness other than in the ordinary course of business, not enter into any
agreement to change any of their existing contracts, not enter into or change
any employment agreements, not amend or adopt any employee benefit plans and,
to the extent consistent therewith, use their reasonable best efforts to keep
intact their insurance policies, preserve intact their current business
organizations, keep available the services of their current officers and
employees and preserve their relationships with customers, suppliers and
others having business dealings with them.
ACQUISITION PROPOSALS. The Company has agreed in the Merger Agreement that
from the date of the Merger Agreement until the termination of the Merger
Agreement, (a) it and its subsidiaries will not directly or indirectly make,
solicit, initiate or encourage submission of proposals or offers from any
persons (including any of its officers or employees) with respect to an
Acquisition Proposal, and (b) subject to the fiduciary duties of the Company's
Board of Directors, it will immediately cease and cause to be terminated all
discussions or negotiations with third parties with respect to any Acquisition
Proposal and promptly notify Purchaser after receipt of any bona fide
Acquisition Proposal or any inquiry from any person relating thereto and
promptly provide Purchaser with a reasonable summary of the financial and
other material terms of such Acquisition Proposal. An "Acquisition Proposal"
is defined in the Merger Agreement as any proposal or offer involving
liquidation, dissolution, recapitalization, merger, consolidation or
acquisition or purchase of all or substantially all of the assets of, or
equity interest in, the Company or other similar transaction or business
combination involving the Company or its subsidiaries. The Merger Agreement
also provides that to the extent that the Company's Board of Directors, acting
in good faith, after receiving advice from outside legal counsel or its
financial advisors that the following action is necessary or appropriate in
order to act in a manner which is consistent with its fiduciary duties under
applicable law, may furnish or cause to be furnished information to third
parties concerning itself and its businesses, properties or assets, engage in
discussions or negotiations with a third party regarding an Acquisition
Proposal initiated by a third party, or following receipt of an Acquisition
Proposal, take or disclose to its stockholders a position contemplated by Rule
14e-2(a) under the Exchange Act or otherwise make disclosure to the Company's
stockholders or withdraw, modify or amend its recommendation of the
transactions contemplated by the Merger Agreement and/or enter into an
agreement providing for the consummation of such Acquisition Proposal.
INDEMNIFICATION. The Merger Agreement provides that, from and after the
Effective Time, Purchaser will indemnify, defend and hold harmless all
officers, directors and employees of the Company or any of its subsidiaries
against all losses, expenses, claims, damages or liabilities arising out of
claims brought or made by third parties including, without limitation,
derivative claims in connection with the transactions contemplated by the
Merger Agreement to the fullest extent permitted or required under applicable
law and shall advance expenses prior to the final disposition of these claims
and liabilities. Purchaser has also agreed to continue to keep in effect all
rights to indemnification now existing in favor of the directors, officers or
employees of the Company or any of its subsidiaries (including, without
limitation, any person who was or becomes a director, officer or employee
prior to the Effective Time (the "Indemnified Parties") under the DGCL or as
provided in the Company's Restated Certificate of Incorporation or By-Laws
with respect to matters occurring on or prior to the Effective Time and for a
period of not less than six years after the Effective Time (or, in the case of
claims or other matters occurring on or prior to the expiration of such six
year period, which have not been resolved
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prior to the expiration of such six year period, until such matters are
finally resolved) and Purchaser shall honor, and shall cause the Surviving
Corporation to honor, all such rights. Purchaser shall cause to be maintained
in effect for not less than six years from the Effective Time, an insurance
and indemnification policy for the Company's current directors, officers and
employees that covers events occurring at or prior to the Effective Time (the
"D&O Insurance") that is no less favorable than the existing policy of the
Company or, if substantially equivalent insurance coverage is unavailable, the
best available coverage. Purchaser and the Surviving Corporation will not be
required, however, to pay an annual premium for the D&O Insurance in excess of
150% of the amount that the Company spent for these purposes in the last
fiscal year. BHP may also substitute therefor policies of at least the same
coverage containing terms and conditions which are no less advantageous.
EMPLOYEE BENEFITS. The Purchaser has agreed in the Merger Agreement that the
employer-provided benefits for nonunion employees under the Company's employee
benefit plans which are in effect as of the Effective Time (other than any
feature of any such plan that relates to the Shares) will not be reduced after
the Effective Time (except to the extent consistent with the terms of the
Merger Agreement and except to the extent necessary to comply with applicable
law) at least until the second anniversary of the Effective Time. Purchaser
also affirmed in the Merger Agreement that it intends to provide during the
two-year period following the Effective Time overall compensation and benefits
for persons serving on the Company's executive committee at the time of the
execution of the Merger Agreement that are competitive with those provided by
the Company's competitors. Finally, the Merger Agreement provides that the
Company's cash-based Long-Term Incentive Plan will continue for one additional
three-year cycle beginning January 1, 1996, with performance measures
appropriate to the business plan of the Surviving Corporation.
BHP GUARANTEE. In the Merger Agreement, BHP unconditionally and irrevocably
guaranteed to the Company the due, prompt and faithful performance by
Purchaser and Sub of, and compliance with, all agreements and obligations of
Purchaser and Sub.
EMPLOYMENT AGREEMENTS. BHP and the Purchaser have agreed with Mr. Winter
that, following the Merger, Mr. Winter's current employment and severance
agreements with the Company will be terminated in accordance with their terms.
In addition, Mr. Winter will be named to lead BHP Copper Group, the group to
be formed to hold the combined copper businesses of BHP and the Company. While
no terms of such appointment have been agreed to by the parties, it is
anticipated that the terms of such appointment will be consistent with the
terms of employment for other BHP employees at similar levels of
responsibility.
ADDITIONAL EFFORTS. Upon the terms and subject to the conditions set forth
in the Merger Agreement, the Company, Purchaser, Sub and BHP agree to use all
reasonable efforts to take all actions and to do all things necessary, proper
or advisable to consummate and make effective, as promptly as practicable, the
transactions contemplated by the Offer and the Merger Agreement.
CONDITIONS PRECEDENT TO MERGER. The respective obligations of the Company,
Purchaser, Sub and BHP to effect the Merger are subject to the fulfillment at
or prior to the Effective Time of the following conditions: (a) the Offer
shall have been consummated in accordance with its terms; provided, however,
that this condition shall be considered satisfied if Purchaser fails to accept
for payment and pay for Shares pursuant to the Offer other than as a result of
a failure of the conditions to the Offer set forth in Section 15; (b) the
waiting period applicable to the consummation of the Merger under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act")
shall have expired or been terminated; (c) no law, statute, rule or
regulation, domestic or foreign, shall have been enacted or promulgated or is
in effect which has the effect of making the acquisition of Shares illegal or
otherwise prohibits consummation of the Merger; and (d) no preliminary or
final injunction or temporary restraining order or other order or decree has
been issued by any foreign or United States federal or state court or foreign
or United States federal or administrative agency enjoining, restraining or
otherwise prohibiting the Offer, the Merger or the acquisition by Purchaser of
Shares.
TERMINATION. The Merger Agreement may be terminated at any time prior to the
Effective Time, whether prior to or after approval by the stockholders of the
Company: (a) by mutual written consent of Purchaser and
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the Company; (b) by either Purchaser or the Company if: (i) the Offer shall
not have been consummated by May 31, 1996; or (ii) at any time after June 30,
1996, if any of the conditions set forth in the immediately preceding
paragraph "Conditions Precedent to Merger" have not been satisfied or waived;
(c) by Purchaser: (i) if the Board of Directors of the Company shall have
failed to recommend, or shall have withdrawn, its approval or recommendation
of the Offer or the Merger or shall have resolved to do any of the foregoing
or if the Company shall have entered into a definitive agreement to accept an
Acquisition Proposal (as the term is defined in Section 13 "--Acquisition
Proposals"); (ii) if the Company's Board of Directors modifies its approval of
the Offer or the Merger in a manner adverse to Purchaser and the Minimum
Condition shall not have been met on the Expiration Date; (iii) if as a result
of the failure of any conditions set forth in Section 15, the Offer shall have
terminated or expired without Purchaser or a subsidiary of BHP having
purchased any Shares in the Offer; or (d) by the Company, if the Company's
Board of Directors, acting in good faith, after receiving advice from outside
counsel or its financial advisors that the following action is necessary or
appropriate in order for it to act in a manner which is consistent with its
fiduciary duties under applicable law, (1) following receipt of an Acquisition
Proposal from a third party, withdraws, modifies or amends its recommendations
of the Offer or the Merger or (2) enters into an agreement providing for the
consummation of an Acquisition Proposal following receipt of an Acquisition
Proposal from a third party. Notwithstanding the foregoing, the Merger
Agreement provides that the right to terminate the Merger Agreement pursuant
to any of the events set forth above will not be available to any party if the
event which gave rise to such termination right is a result of or arose in
connection with any action or inaction of the party seeking to terminate taken
or not taken in breach of the terms of the Merger Agreement.
FEES AND EXPENSES. Except as described in the next sentence, pursuant to the
Merger Agreement, each of the Company and Purchaser agreed to pay its own
respective costs and expenses incurred in connection with the Merger Agreement
and the transactions contemplated thereby. The Company also agreed in the
Merger Agreement that, if the Merger Agreement is terminated pursuant to: (1)
clause (b)(ii) (set forth above in "Termination") and at the time of such
termination any person, entity or group (as defined in Section 13(d)(3) of the
Exchange Act) (other than Purchaser or Sub) shall have become the beneficial
owner of more than 20% of the outstanding Shares (with appropriate adjustments
for reclassifications of capital stock, stock dividends, stock splits, reverse
stock splits and similar events) and such person, entity or group (or any
subsidiary of such person, entity or group) thereafter enters into a
definitive agreement with the Company to accept an Acquisition Proposal at any
time on or prior to the date which is six months after the termination of the
Merger Agreement and such transaction is thereafter consummated; (2) clause
(c)(ii) (set forth above in "Termination") and at the time of termination of
the Merger Agreement, the Tender Agreement shall have expired in accordance
with Section 2 thereof and the Company shall enter into a definitive agreement
to accept an Acquisition Proposal at any time on or prior to the date which is
six months after the termination of the Merger Agreement; (3) clause (c)(iii)
(set forth above in "Termination") and such failure was the result of any
action taken by or on behalf of the Company giving rise to an Event specified
in clause (a), (b), (c), (d), (f), (g) or (i) of Section 15 and such action
was in breach of the Company's obligations under the Merger Agreement and,
with respect to an Event specified in clause (g), if such action was taken by
the Company for the purpose of causing Purchaser to terminate the Merger
Agreement; or (4) clause (d) or clause (c)(i) (each as set forth above under
"Termination"); then the Company shall pay to Purchaser the sum of $40 million
(the "Termination Fee"). The Merger Agreement provides that payment of the
Termination Fee will be made as promptly as practicable but in no event later
than (i) in the case of clauses (3) and (4) of this paragraph, two business
days following termination of the Merger Agreement; (ii) in the case of clause
(1) of this paragraph, upon consummation of such Acquisition Proposal; and
(iii) in the case of clause (2) of this paragraph, upon entering into a
definitive agreement to accept such Acquisition Proposal.
14. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that neither the Company nor any of its
subsidiaries will, among other things, prior to the Effective Time declare,
set aside or pay any dividends, or make other distributions payable in cash,
stock, property or otherwise with respect to the Common Shares except as
expressly permitted therein. The
24
<PAGE>
Merger Agreement also provides that the Company may declare regular quarterly
dividends on its Preferred Shares.
15. CERTAIN CONDITIONS TO PURCHASER'S OBLIGATIONS.
Purchaser will not be required to continue the Offer or to accept for
payment or pay for any Shares tendered, may postpone the acceptance for
payment, purchase of and/or payment for Shares, may amend or terminate the
Offer, and may extend the Offer beyond January 4, 1996 (the "Initial
Expiration Date," in which event the expiration date ("Expiration Date") shall
mean the latest time and date which the Offer as so extended by Purchaser
shall expire) whether or not any Shares have theretofore been purchased or
paid for, (i) unless the Minimum Condition is satisfied and (ii) if, at any
time on or after December 5, 1995 and prior to the time of payment for any
such Shares any of following events (each referred to as an "Event") have
occurred, (an Event shall be deemed to have occurred notwithstanding, where
applicable, the provision for a cure period) (each of paragraphs (a) through
(j) providing a separate and independent condition to Purchaser's obligations
pursuant to the Offer), provided that if the Purchaser does not accept for
payment, purchase or pay for any Shares tendered due to the occurrence of any
Event specified in paragraph (a), (b), (d), (e), (f) or (g), then Purchaser
shall be required to extend the Offer for the cure period specified in such
paragraph; provided, however, that Purchaser may terminate the Offer at any
time if any of the other conditions hereunder shall have occurred (including
during the period of any such extension) and may waive any Event at any time
(including during the period of any such extension):
(a) there shall be in effect any preliminary or final injunction or
temporary restraining order or other order or decree issued by any foreign
or United States federal or state court or foreign or United States federal
or administrative agency or authority, enjoining, restraining or otherwise
prohibiting the Offer, the Merger or the acquisition by Sub or Purchaser of
Shares, and such order or decree either shall be incapable of being cured
by, or shall not be cured by, May 31, 1996;
(b) an action or a proceeding shall have been commenced by any
governmental agency under federal or state antitrust laws or any other
applicable law before any court or any governmental or other administrative
or regulatory authority or agency, domestic or foreign, or there shall be
an imminent threat which, would reasonably be expected to result in the
foregoing, or any of the authorizations required to be obtained pursuant to
the provisions of the Merger Agreement shall have been conditioned in such
a manner, that would reasonably be expected to (i) materially restrict or
prohibit consummation of the Offer or the Merger or any other merger or
business combination between the Company, Sub and Purchaser, (ii) impose
material limitations on the ability of Sub or Purchaser effectively to
acquire or hold or to exercise full rights of ownership of the Shares
acquired by it, including, but not limited to, the right to vote the Shares
purchased by it on all matters properly presented to the stockholders of
the Company, or (iii) impose material limitations on the ability of either
Purchaser or the Company to continue effectively to conduct all or any
material portion of its respective business as heretofore conducted or to
continue to own or operate effectively all or any material portion of its
respective assets as heretofore owned or operated, and such action or
proceeding either shall be incapable of being cured by, or shall not be
cured by, May 31, 1996;
(c) there shall have been any law, statute, rule or regulation, domestic
or foreign, enacted, promulgated or proposed that, directly or indirectly,
would reasonably be expected to result in any of the consequences referred
to in paragraph (b) above;
(d) a material adverse change in the business, property, financial
condition or results of operations of the Company and its subsidiaries
taken as a whole shall have occurred, and such change shall either be
incapable of being cured or shall not be cured within ten days of the
Initial Expiration Date or, in the event such change is discovered during
any extension of the Offer, within ten days after the discovery of such
change;
(e) there shall have occurred (i) any general suspension of trading in
securities on the New York Stock Exchange, (ii) a declaration of a banking
moratorium or any suspension of payments by United States or Australian
authorities on the extension of credit by lending institutions, or (iii) a
commencement of a war, armed hostilities or other international or national
calamity directly or indirectly involving the United States,
25
<PAGE>
Australia or Peru which would reasonably be expected to have a material
adverse effect on the business, property, financial condition or results of
operations of the Company and its subsidiaries taken as a whole, and any
such event shall continue to have such material adverse effect on May 31,
1996;
(f) any representation or warranty of the Company in the Merger Agreement
shall at any time prove to have been incorrect in any material respect at
the time made, and shall either be incapable of being cured or shall not be
cured within ten days of the Initial Expiration Date or, in the event such
breach is discovered during any extension of the Offer, ten days after
discovery of such breach;
(g) the Company shall fail to perform or comply in any material respect
with any covenant or agreement to be performed or complied with by the
Company under the Merger Agreement and such failure is unremedied ten days
after the Initial Expiration Date or, in the event such failure is
discovered during any extension of the Offer, ten days after discovery of
such nonperformance or noncompliance;
(h) the Company and Purchaser shall have agreed to terminate the Offer or
the Merger Agreement;
(i) the Board of Directors of the Company or the Company, as the case may
be, shall have (i) publicly (including by amendment of the Schedule 14D-9)
withdrawn its recommendation to stockholders of acceptance of the Offer and
adoption of the Merger Agreement, or shall have resolved to do so; or (ii)
entered into an agreement with a third party providing for the acquisition
or purchase of all or substantially all of the assets of, or equity
interest in, the Company by such third party; and
(j) the Offer shall not have been consummated by May 31, 1996.
The foregoing conditions are for the sole benefit of Sub and Purchaser and
may be asserted by Sub and Purchaser regardless of the circumstances giving
rise to such condition or may be waived by Sub or Purchaser in whole at any
time or in part from time to time in its reasonable discretion. The failure by
Sub or 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 and may be asserted at any time and from time to time. If the
Offer is terminated pursuant to the foregoing provisions, all tendered Shares
not theretofore accepted for payment shall forthwith be returned by the
Depository to the tendered stockholders.
16. CERTAIN REGULATORY AND LEGAL MATTERS.
Except as set forth in this Section 16, Purchaser is not aware of any
approval or other action by any governmental or administrative agency which
would be required for the acquisition or ownership of Shares by Purchaser as
contemplated herein. Should any such approval or other action be required, it
will be sought, but Purchaser has no current intention to delay the purchase
of Shares tendered pursuant to the Offer pending the outcome of any such
matter, subject, however, to Purchaser's right to decline to purchase Shares
if the Minimum Condition has not been satisfied or if any of the Events
specified in Section 15 shall have occurred. There can be no assurance that
any such approval or other action, if needed, would be obtained or would be
obtained without conditions that Purchaser is not required to accept.
ANTITRUST. Under the provisions of the HSR Act applicable to the Offer, the
acquisition of Shares under the Offer may be consummated following the
expiration of a 15 calendar-day waiting period following the filing by BHP of
a Notification and Report Form with respect to the Offer, unless BHP receives
a request for additional information or documentary material from the
Department of Justice, Antitrust Division (the "Antitrust Division") or the
Federal Trade Commission ("FTC") or unless early termination of the waiting
period is granted. Purchaser made such a filing on December 4, 1995. If,
within the initial 15-day waiting period, either the Antitrust Division or the
FTC requests additional information or material from BHP concerning the Offer,
the waiting period will be extended to the tenth calendar day after the date
of substantial compliance by BHP with such request. Complying with a request
for additional information or material can take a significant amount of time.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as Purchaser's proposed acquisition of
the Company. At any time before or after Purchaser's acquisition of
26
<PAGE>
Shares pursuant to the Offer, the Antitrust Division or the FTC could take
such action under the antitrust laws as it either deems necessary or desirable
in the public interest, including seeking to enjoin the purchase of Shares
pursuant to the Offer or the consummation of the Merger or seeking the
divestiture of Shares acquired by Purchaser or the divestiture of substantial
assets of the Company or its subsidiaries or BHP or its subsidiaries. Private
parties may also bring legal action under the antitrust laws under certain
circumstances. There can be no assurance that a challenge to the Offer on
antitrust grounds will not be made, or, if such a challenge is made, of the
result thereof.
If any applicable waiting period under the HSR Act has not expired or been
terminated prior to the Expiration Date, Purchaser will not be obligated to
proceed with the Offer or the purchase of any Shares not theretofore purchased
pursuant to the Offer. See Section 15.
STATE TAKEOVER LAWS. The Company is incorporated under the laws of the State
of Delaware. In general, Section 203 of the DGCL ("Section 203") prevents an
"interested stockholder" (including a person who owns or has the right to
acquire 15% or more of a corporation's outstanding voting stock) from engaging
in a "business combination" (defined to include mergers such as the Merger and
certain other actions) with a Delaware corporation for a period of three years
following the date such person became an interested stockholder. The Board of
Directors of the Company has taken all appropriate action so that none of
Purchaser, Sub or BHP is an "interested stockholder" for purposes of the
restrictions contained in Section 203.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects in such states. Section 10-1221 of the Arizona Revised
Statutes ("Arizona Law") applies to, among other things, companies which have
substantial assets in Arizona. In accordance with the requirements of Arizona
Law, a Committee of "Disinterested Directors", as defined in Section 10-1221
of Arizona Law, has approved the Merger Agreement. Based on information
supplied by the Company, Purchaser does not believe that any other state
takeover statutes apply to the Offer or the Merger and, therefore, neither
Purchaser nor BHP currently has complied with any other such state takeover
statute or regulation. Purchaser reserves the right to challenge the
applicability or validity of any state law purportedly applicable to the Offer
or the Merger and nothing in this Offer to Purchase or any action taken in
connection with the Offer or the Merger is intended as a waiver of such right.
If it is asserted that any state takeover statute is applicable to the Offer
or the Merger and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer or the Merger, Purchaser might
be required to file certain information with, or to receive approvals from,
the relevant state authorities, and Purchaser might not be able to accept for
payment or pay for Shares tendered in the Offer, or be delayed in consummating
the Offer or the Merger. In such case, Purchaser may not be obligated to
accept for payment or pay for any Shares tendered pursuant to the Offer.
FOREIGN APPROVALS. Based on information supplied by the Company, Purchaser
does not believe that any foreign takeover statutes or similar regulatory
provisions apply to the Offer or the Merger and, therefore, neither Purchaser
nor BHP currently has complied with any such foreign takeover statute or
regulation. Purchaser reserves the right to challenge the applicability or
validity of any foreign law or regulation purportedly applicable to the Offer
or the Merger and nothing in this Offer to Purchase or any action taken in
connection with the Offer or the Merger is intended as a waiver of such right.
If it is asserted that any foreign takeover statute or regulation is
applicable to the Offer or the Merger and an appropriate court or other body
does not determine that it is inapplicable or invalid as applied to the Offer
or the Merger, Purchaser might be required to file certain information with,
or to receive approvals from, the relevant foreign authorities, and Purchaser
might not be able to accept for payment or pay for Shares tendered in the
Offer, or be delayed in consummating the Offer or the Merger. In such case,
Purchaser may not be obligated to accept for payment or pay for any Shares
tendered pursuant to the Offer.
27
<PAGE>
17. FEES AND EXPENSES.
CS First Boston is acting as the Dealer Manager in connection with the Offer
and is acting as exclusive financial advisor to BHP with respect to BHP's
proposed acquisition of the Company. BHP has agreed, pursuant to an engagement
letter dated June 14, 1995 (the "Engagement Letter"), to pay CS First Boston
for its services (i) a fee of $250,000 payable on the date of the Engagement
Letter (the "Initial Fee"), (ii) an additional fee of $750,000, payable upon
the commencement of the Offer (the "Additional Fee"), and (iii) a transaction
fee (the "Transaction Fee") of (a) $5,000,000, payable at the time BHP
acquires 100% of the capital stock of the Company or (b) if less than 100% of
the capital stock of the Company is acquired by BHP, $5,000,000 or a
proportion thereof under certain circumstances. The Initial Fee and the
Additional Fee will be credited against the Transaction Fee. In addition, BHP
has agreed to reimburse CS First Boston for certain of its out-of-pocket
expenses. BHP also has agreed to indemnify CS First Boston and certain related
persons against certain liabilities and expenses in connection with its
services, including certain liabilities under the federal securities laws.
Purchaser has retained D.F. King & Co., Inc. as Information Agent, and
Citibank, N.A. as Depositary, in connection with the Offer. The Information
Agent and the Depositary each will receive reasonable and customary
compensation for their services hereunder and reimbursement for their
reasonable out-of-pocket expenses. The Information Agent may contact holders
of Shares by mail, telephone, facsimile, telegraph and personal interviews and
may request brokers, dealers, commercial banks, trust companies and other
nominees to forward materials relating to the Offer to beneficial owners of
Shares. The Information Agent and the Depositary will also be indemnified by
Purchaser against certain liabilities in connection with the Offer, including
certain liabilities under the federal securities laws. Neither the Information
Agent nor the Depositary has been retained to make solicitations or
recommendations in connection with the Offer.
Except as described herein, none of Purchaser, Sub or BHP or any officer,
director, stockholder, agent or other representative of Purchaser, Sub or BHP
will pay any fees or commissions to any broker, dealer or other person for
soliciting tenders of Shares pursuant to the Offer. Brokers, dealers,
commercial banks, trust companies and other nominees will, upon request, be
reimbursed by Purchaser for customary mailing and handling expenses incurred
by them in forwarding offering materials to their customers.
18. MISCELLANEOUS.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares residing in any jurisdiction in which the making
or acceptance thereof would not be in compliance with the securities, blue sky
or other laws of such jurisdiction. Purchaser is not aware of any jurisdiction
in which the making of the Offer is not in compliance with applicable law. If
Purchaser becomes aware of any jurisdiction in which the making of the Offer
would not be in compliance with applicable law, Purchaser will make a good
faith effort to comply with such law. If, after such good faith effort,
Purchaser cannot comply with such law, the Offer will not be made to, nor will
tenders be accepted from or on behalf of, holders of Shares residing in any
such jurisdiction. In any jurisdiction where the securities, blue sky or other
laws require the Offer to be made by a licensed broker or dealer, the Offer
shall be deemed to be made on behalf of Purchaser by the Dealer Manager or one
or more registered brokers or dealers licensed under the laws of such
jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER, SUB OR BHP OTHER THAN AS CONTAINED IN
THIS OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF ANY SUCH
INFORMATION OR REPRESENTATION IS GIVEN OR MADE, IT SHOULD NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED.
28
<PAGE>
Purchaser, Sub and BHP have filed with the Commission a Statement on
Schedule 14D-1 pursuant to Section 14(d)(1) of the Exchange Act and Rule 14d-3
promulgated thereunder, furnishing certain additional information with respect
to the Offer, and may file amendments thereto. In addition, the Company has
filed with the Commission a Solicitation/Recommendation Statement on Schedule
14D-9 pursuant to Rule 14d-9 under the Exchange Act, setting forth the
recommendation of the Board with respect to the Offer and the reasons for such
recommendation and furnishing certain additional related information. The
Schedule 14D-9 is being mailed to stockholders of the Company herewith. The
Schedule 14D-1 and Schedule 14D-9 and any amendments thereto, including
exhibits, may be examined and copies may be obtained at the same places and in
the same manner as set forth with respect to the Company in Section 8 (except
that they will not be available at the regional offices of the Commission).
The Broken Hill Proprietary Company
Limited
BHP Holdings (USA) Inc.
BHP Sub Inc.
December 5, 1995
29
<PAGE>
ANNEX I
DIRECTORS AND EXECUTIVE OFFICERS OF BHP, SUB AND PURCHASER
A. DIRECTORS AND EXECUTIVE OFFICERS OF BHP
The following table sets forth the name, citizenship, present principal
occupation or employment, and material occupations, positions, offices or
employment for the past five years of each director and executive officer of
The Broken Hill Proprietary Company Limited ("BHP"). All of the Executive
Directors, with the exception of Mr. O'Connor, and the executive officers who
are not directors, have been employed by BHP for more than five years. The
business address of each such person, unless otherwise indicated, is BHP
Tower, 600 Bourke Street, Melbourne 3000, Victoria, Australia.
1. DIRECTORS
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND FIVE-YEAR
NAME EMPLOYMENT HISTORY
---- ----------------------------
<C> <S>
Brian T. Loton...................... Mr. Loton, an Australian citizen, has been a
director of BHP since 1976, and has been
Chairman of the Board since 1992. He served
as Deputy Chairman from 1989 to 1992 and was
Managing Director and Chief Executive Officer
from 1984 to 1991. He is also Vice Chairman
of National Australia Bank Ltd., a director
of Amcor Ltd., and a director of Australian
Foundation Investment Company Ltd.
John B. Prescott.................... Mr. Prescott, an Australian citizen, has been
a director of BHP since 1989. He has also
served as Managing Director and Chief Execu-
tive Officer of BHP since 1991.
John B. Reid........................ Mr. Reid, an Australian citizen, has served
as a director of BHP since 1972. He has
served for the past five years as Chairman of
James Hardie Industries Ltd., a manufacturing
company. He is also a director of Focus Pub-
lications Ltd. His business address is 65
York Street, Sydney 2000, New South Wales,
Australia.
John B. Gough....................... Mr. Gough, an Australian citizen, has been a
director of BHP since 1984. For the past five
years he has served as Chairman of Pacific
Dunlop Limited, a marketing and distribution
company. He is also Chairman of Australia &
New Zealand Banking Group Ltd. and a director
of CSR Ltd. His business address is 101 Col-
lins Street, Melbourne 3000, Victoria, Aus-
tralia.
David W. Rogers..................... Mr. Rogers, an Australian citizen, has been a
director of BHP since 1987. From 1984 to
1993, Mr. Rogers was a Senior Partner at Ar-
thur Robinson & Hedderwicks, Solicitors, and
since 1993 has been a Consultant to Arthur
Robinson & Hedderwicks. For the past five
years, Mr. Rogers has been a director of the
AMP Society, a life insurance company, and of
Amcor Paper Group, a division of Amcor Limit-
ed, a paper manufacturer. He is also the
Chairman of Woodside Petroleum Limited. His
business address is 550 Collins Street, Mel-
bourne 3000, Victoria, Australia.
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND FIVE-YEAR
NAME EMPLOYMENT HISTORY
---- ----------------------------
<C> <S>
Geoffrey E. Heeley.................. Mr. Heeley, an Australian citizen, has been
an Executive Director of BHP since 1988 and
Executive General Manager, Finance, of BHP
since 1984. He is also a director of Metal
Manufactures Ltd., a director of ICI Austra-
lia Ltd. and a director of Victorian Clinical
Genetics Services Ltd.
David J. Asimus..................... Mr. Asimus, an Australian citizen, has been a
director of BHP since 1988. He has been Chan-
cellor of Charles Sturt University, an educa-
tional institution, since 1990. For the past
five years he has been a director of Rural
Press Limited, a publishing company, and IBJ
Australia Bank, a banking institution. Mr.
Asimus has also been a director of Wesfarmers
Limited, an industrial company, since 1990.
His business address is Alabama, Tumbarumba
Road, Wagga Wagga 2650, New South Wales, Aus-
tralia.
Jeremy K. Ellis..................... Mr. Ellis, an Australian citizen, has served
as an Executive Director of BHP and Executive
General Manager of BHP Minerals since 1991.
He is also Chairman of Sandvik Australia Pty.
Ltd.
Ronald J. McNeilly.................. Mr. McNeilly, an Australian citizen, has been
an Executive Director of BHP and Executive
General Manager of BHP Steel since 1991. He
is also a director of BHP New Zealand Steel
Ltd. and of Tubemakers of Australia Ltd.
Margaret A. Jackson................. Ms. Jackson, an Australian citizen, has been
a director of BHP since 1994. Ms. Jackson has
served for the past five years as Chairman of
the Transport Accident Commission, a govern-
ment insurance body. She is also a director
of Australia & New Zealand Banking Group
Ltd., of Pacific Dunlop Ltd., of Qantas Air-
ways Ltd., and of the Playbox Theatre. Her
business address is 222 Exhibition Street,
Melbourne 3000, Victoria, Australia.
David A. Crawford................... Mr. Crawford, an Australian citizen, has been
a director of BHP since 1994. Mr. Crawford
has served during the past five years as a
Chartered Accountant at KPMG Peat Marwick, a
chartered accounting firm. His business ad-
dress is 161 Collins Street, Melbourne 3000,
Victoria, Australia.
John J. O'Connor.................... Mr. O'Connor, an Irish citizen, has been an
Executive Director of BHP and Executive Gen-
eral Manager of BHP Petroleum since 1994.
Prior to that time, he held various executive
positions with Mobil Oil Company. His busi-
ness address is 120 Collins Street, Melbourne
3000, Victoria, Australia.
John C. Conde....................... Mr. Conde, an Australian citizen, has been a
director of BHP since March 1995. From 1988
to 1995 he served as Chairman of Pacific Pow-
er, the Electricity Commission of New South
Wales. He is also Chairman and Managing Di-
rector of Broadcast Investments Pty. Ltd.,
Chairman of the Australia Technology Park
Sydney Ltd., Chairman of Radio 2UE Sydney
Pty. Ltd., and a director of Lumley General
Insurance Ltd. His business address is 176
Pacific Highway, Greenwich 2065, New South
Wales, Australia.
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND FIVE-YEAR
NAME EMPLOYMENT HISTORY
---- ----------------------------
<C> <S>
Michael A. Chaney................... Mr. Chaney, an Australian citizen, has been a
director of BHP since May 1995. He also cur-
rently serves as Managing Director of
Wesfarmers Ltd., which provides services and
merchandise to the rural community. Mr. Cha-
ney was a deputy Managing Director of
Wesfarmers Ltd. from 1990 to 1992. He is also
a director of Gresham Partners Holdings Ltd.
His business address is 40 The Esplanade,
Perth 6000, Western Australia, Australia.
</TABLE>
2. EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND FIVE-YEAR
NAME EMPLOYMENT HISTORY
---- ----------------------------
<C> <S>
Timothy J. Knott.................... Mr. Knott, an Australian citizen, has been
Corporate Treasurer of BHP since 1995. From
1991 to 1995 he was Corporate General Manager
and Company Secretary of BHP. Mr. Knott
served as Corporate General Manager, Taxa-
tion, of BHP from 1987 to 1991.
Richard A. St. John................. Mr. St. John, an Australian citizen, has been
General Counsel to BHP since 1988.
Michael W. Gillian.................. Mr. Gillian, a British citizen, has been Cor-
porate General Manager, Accounting, of BHP
since 1992. From 1983 to 1992, Mr. Gillian
served as Finance Director, coated products
division, of BHP Steel.
Graeme W. McGregor.................. Mr. McGregor, an Australian citizen, has been
Executive General Manager of BHP Service Com-
panies since September 1992. From September
1989 to September 1992, Mr. McGregor served
as Group General Manager, Finance, of BHP
Steel.
James E. Lewis...................... Mr. Lewis, an Australian citizen, has been
Executive General Manager, Corporate Planning
and Administration, of BHP, since December
1993. He is also a director of the Foster's
Brewing Group Ltd.
John R. McGregor.................... Mr. McGregor, an Australian citizen, has been
a Corporate General Manager, Investor Rela-
tions, and Company Secretary of BHP since
February 1995. From 1993 to 1995 he served as
Assistant Secretary and Corporate Manager,
Investor Relations, of BHP. Mr. McGregor
served as Group Manager of BHP Steel from
1987 to 1993.
Ian C. Edney........................ Mr. Edney, an Australian citizen, has served
since 1995 as Corporate General Manager, Tax-
ation, of BHP. He served from 1993 to 1995 as
General Manager, Taxation, and Corporate Tax-
ation Manager for BHP.
</TABLE>
I-3
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND FIVE-YEAR
NAME EMPLOYMENT HISTORY
---- ----------------------------
<C> <S>
Robert J. Flew...................... Mr. Flew, an Australian citizen, has been
Corporate General Manager, International, of
BHP since June 1995. Until June 1995, he was
Group General Manager, Australian Coal Divi-
sion, of BHP. Until October 1994, Mr. Flew
served as a director of Tubemakers of Austra-
lia, a steel pipe and merchandising company.
</TABLE>
B. DIRECTORS AND EXECUTIVE OFFICERS OF SUB
The following table sets forth the name, citizenship, business address,
present principal occupation, positions, offices or employment for the past
five years of each director and executive officer of BHP Holdings (USA) Inc.
("Sub"). The business address of each such person, unless otherwise indicated,
is 550 California Street, San Francisco, California 94104.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND FIVE-YEAR
EMPLOYMENT HISTORY, CITIZENSHIP
NAME AND BUSINESS ADDRESS
---- -------------------------------
<C> <S>
Daryl F. Collins.................... Mr. Collins, an Australian citizen, is a direc-
tor and the President of Sub. Since 1993 he has
been Group General Manager, Finance, for BHP
Minerals. He served as General Commercial Man-
ager of BHP Iron Ore from 1987 to 1993. He is
currently a director of Ok Tedi Mining Ltd., a
BHP subsidiary, and a director of various other
BHP subsidiaries.
T. Rognald Dankmeyer................ Mr. Dankmeyer, a U.S. citizen, is a Vice Presi-
dent of Sub. He has been Senior Vice President
and General Counsel of BHP Minerals for more
than five years.
Timothy J. Knott.................... Mr. Knott is the Treasurer of Sub. See above for
additional information.
D.W. Loughridge..................... Mr. Loughridge, a U.S. citizen, is a Vice Presi-
dent and a director of Sub and the President of
BHP Power. From 1991 to 1994 he was Group Gen-
eral Manager for BHP Petroleum (Americas). From
1990 to 1991 he served as Group General Manager
for Finance and Planning for BHP Petroleum.
E.W. Parker II...................... Mr. Parker, a U.S. citizen, is a Vice President
and a director of Sub. He is currently Vice
President, Legal and Administration,
of and prior to that was General Counsel to BHP
Petroleum (Americas).
Daniel H. Payne..................... Mr. Payne, a U.S. citizen, is a director of Sub
and several other BHP subsidiaries. He has been
the Vice President, Taxation, of BHP Minerals
for the last five years.
Barbara A. Steen.................... Ms. Steen, a U.S. citizen, is a director of Sub
and several other BHP subsidiaries. She is cur-
rently Assistant Vice President and Secretary of
Griffin Corporate Services, Inc. From 1994 to
1995 she was Assistant Vice President of Dela-
ware Trust Capital Management, Inc. From 1992 to
1994 she served as Relationship
Officer, Delaware Trust Capital Management,
Inc., prior to which she was Assistant Vice
President of the Bank of New York,
Delaware. Her business address is 900 Market
Street, Suite 200, Wilmington, Delaware 19801.
</TABLE>
I-4
<PAGE>
C. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER
The following table sets forth the name, present principal occupation,
position, offices or employment for the past five years of each director and
executive officer of BHP Sub Inc., ("Purchaser"). The business address of each
such person is 550 California Street, San Francisco, California 94104.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT, FIVE-YEAR
NAME EMPLOYMENT HISTORY AND CITIZENSHIP
---- ----------------------------------
<C> <S>
T. Rognald Dankmeyer................ Mr. Dankmeyer is a director and Vice President of
Purchaser. See above for more information.
Donald E. Egan...................... Mr. Egan, a U.S. citizen, is a director and Presi-
dent of Purchaser. He has been Manager of Planning
and Development of BHP Copper since January 1995.
From 1993 to 1995 he served as Manager of Strategic
Planning at BHP Minerals. From 1992 to 1993, Mr.
Egan served as Vice President, Finance, of Minera
Escondida Limitada ("Escondida"), a Chilean mining
company and subsidiary of BHP. From 1990 to 1992,
Mr. Egan was Vice President, Marketing, of
Escondida.
Stefano Giorgini.................... Mr. Giorgini, an Australian citizen, is a director
and Vice President of Purchaser. He has been Man-
ager of Finance, New Business Development, of BHP
Minerals since February 1995. From 1991 to 1995 he
served as Manager of Finance of Long Products, a
division of BHP Steel. From 1989 to 1991, he was a
Senior Financial Analyst of BHP Steel. Since 1991,
Mr. Giorgini has served as the director of several
BHP subsidiaries.
</TABLE>
I-5
<PAGE>
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 Magma Copper Company or such stockholder's broker, dealer,
commercial bank, trust company or other nominee to the Depositary as follows:
The Depositary for the Offer is:
CITIBANK, N.A.
By Mail: By Overnight Courier: By Hand:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
c/o Citicorp Data c/o Citicorp Data Corporate Trust Window
Distribution, Inc. Distribution, Inc. 111 Wall Street, 5th
P.O. Box 7072 404 Sette Drive Floor
Paramus, New Jersey Paramus, New Jersey 07652 New York, New York
07653
By Facsimile:
(For Eligible Institutions Only)
(201) 262-3240
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at the addresses and telephone numbers set forth
below. Additional copies of this Offer to Purchase, the Letter of Transmittal,
the Notice of Guaranteed Delivery and related materials may be obtained from
the Information Agent. A stockholder may also contact its broker, dealer,
commercial bank, trust company or other nominee for assistance concerning the
Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
United States Europe
77 Water Street Royex House, Aldermanbury Square
New York, New York 10005 London, England EC2V 7HR
Call Toll Free: (800) 628-8538 Call Collect: (44) 171-600-5005
Outside the United States & Europe
Call Collect: (212) 269-5550
The Dealer Manager for the Offer is:
CS FIRST BOSTON
PARK AVENUE PLAZA
55 EAST 52ND STREET
NEW YORK, NEW YORK 10055
CALL TOLL FREE (800) 665-4379
<PAGE>
Exhibit 99.(a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK,
5 5/8% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES D,
AND
6% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES E
OF
MAGMA COPPER COMPANY
PURSUANT TO THE OFFER TO PURCHASE
DATED DECEMBER 5, 1995
BY
BHP SUB INC.
AN INDIRECT WHOLLY OWNED SUBSIDIARY
OF
THE BROKEN HILL PROPRIETARY COMPANY LIMITED
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, JANUARY 4, 1996, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
The Depositary for the Offer is:
CITIBANK, N.A.
By Mail: By Overnight Courier: By Hand:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
c/o Citicorp Data c/o Citicorp Data Corporate Trust Window
Distribution, Inc. Distribution, Inc. 111 Wall Street, 5th
P.O. Box 7072 404 Sette Drive Floor
Paramus, New Jersey Paramus, New Jersey 07652 New York, New York
07653
By Facsimile:
(For Eligible Institutions Only)
(201) 262-3240
DELIVERY OF THIS LETTER OF TRANSMITTAL 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.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used by stockholders of Magma Copper
Company either if certificates for tendered Shares (as defined below) are to
be forwarded herewith or if delivery of Shares is to be made by book-entry
transfer to an account maintained by Citibank, N.A., (the "Depositary"), at
The Depository Trust Company ("DTC"), the Midwest Securities Trust Company
("MSTC"), the Pacific Securities Depository Trust
<PAGE>
Company ("PSDTC") or the Philadelphia Depository Trust Company ("PDTC," and
together with DTC, MSTC and PSDTC, collectively, the "Book-Entry Transfer
Facilities," and individually, a "Book-Entry Transfer Facility") pursuant to
the procedure set forth in Section 3 of the Offer to Purchase (as defined
below). DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
Stockholders who deliver Shares by book-entry transfer are referred to
herein as "Book-Entry Stockholders" and other stockholders are referred to
herein as "Certificate Stockholders." If a stockholder wishes to tender Shares
pursuant to the Offer (as defined below) and such stockholder's certificates
for Shares are not immediately available or time will not permit certificates
and all required documents to reach the Depositary on or prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase) or the
procedure for book-entry transfer cannot be completed on a timely basis, such
Shares may nevertheless be tendered by complying with the guaranteed delivery
procedure set forth in Section 3 of the Offer to Purchase. See Instruction 2.
[_] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A 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: ____________________________________________
Check Box of Book-Entry Transfer Facility:
(CHECK ONE)
[_] DTC
[_] MSTC
[_] PSDTC
[_] PDTC
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 (PLEASE INCLUDE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY)
Name(s) of Registered Holder(s): __________________________________________
Window Ticket Number (if any): ____________________________________________
Date of Execution of Notice of Guaranteed Delivery: _______________________
Name of Institution which Guaranteed Delivery: ____________________________
If Delivered by Book-Entry Transfer, Check Box of Book-Entry Transfer
Facility and Provide the Account Number and Transaction Code Number:
(CHECK ONE)
[_] DTC
[_] MSTC
[_] PSDTC
[_] PDTC
Account Number: _____________________ Transaction Code Number: __________
2
<PAGE>
- --------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- --------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES)
OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK,
EXACTLY AS NAME(S) APPEAR(S)
ON THE CERTIFICATE(S))
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHARE CERTIFICATE(S) AND SHARE(S) TENDERED (ATTACH ADDITIONAL LIST IF
NECESSARY)
- --------------------------------------------------------------------------------
CLASS AND SERIES TOTAL NUMBER
OF SHARES OF SHARES NUMBER OF
CERTIFICATE REPRESENTED BY REPRESENTED BY SHARES
NUMBER(S)* CERTIFICATE(S) CERTIFICATE(S)* TENDERED**
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL COMMON SHARES..............................
- --------------------------------------------------------------------------------
TOTAL SERIES D PREFERRED SHARES..................
- --------------------------------------------------------------------------------
TOTAL SERIES E PREFERRED SHARES..................
- --------------------------------------------------------------------------------
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares
represented by any certificates delivered to the Depositary are being
tendered. See Instruction 4.
- --------------------------------------------------------------------------------
3
<PAGE>
The names and addresses of the registered holders should be printed, if not
already printed above, exactly as they appear on the certificate(s)
representing Shares tendered hereby. The class and series of Shares tendered,
the certificates and the number of Shares that the undersigned wishes to
tender should be indicated in the appropriate boxes.
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to BHP Sub Inc., a Delaware corporation
("Purchaser") and an indirect wholly owned subsidiary of The Broken Hill
Proprietary Company Limited, a Victoria, Australia corporation ("BHP"), the
above-described outstanding shares of Magma Copper Company, a Delaware
corporation (the "Company"), pursuant to Purchaser's offer to purchase (i) all
outstanding shares of Common Stock, par value $0.01 per share (the "Common
Shares"), at a price of $28.00 per share net to the seller in cash, (ii) all
outstanding shares of 5 5/8% Cumulative Convertible Preferred Stock, Series D,
par value $0.01, per share (the "Series D Preferred Shares"), at a price of
$96.544 per share net to the seller in cash and (iii) all outstanding shares
of 6% Cumulative Convertible Preferred Stock, Series E, par value $0.01 per
share, at a price of $100.646 per share net to the seller in cash (the "Series
E Preferred Shares," and together with the Series D Preferred Shares, the
"Preferred Shares"), all upon the terms and subject to the conditions of the
Offer to Purchase dated December 5, 1995 (the "Offer to Purchase"), and this
Letter of Transmittal (which together constitute the "Offer"), receipt of
which is hereby acknowledged. The Common Shares, the Series D Preferred Shares
and the Series E Preferred Shares collectively are referred to herein as the
"Shares," and the consideration to be paid by Purchaser pursuant to the Offer
to a stockholder tendering the above-referenced Shares is hereinafter referred
to as the "Purchase Price." The undersigned understands that Purchaser
reserves the right to transfer or assign, in whole or from time to time in
part, to one or more direct or indirect subsidiaries of BHP, the right to
purchase all or any portion of the Shares tendered pursuant to the Offer, but
any such transfer or assignment will not relieve Purchaser of its obligations
under the Offer or prejudice the rights of tendering stockholders to receive
payment for Shares validly tendered and accepted for payment pursuant to 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 such extension or
amendment), and subject to, and effective upon, acceptance for payment of the
Shares tendered herewith by Purchaser, the undersigned hereby sells, assigns
and transfers to, or upon the order of, Purchaser all right, title and
interest in and to all the Shares that are being tendered hereby and all
dividends (other than regular quarterly dividends payable on the Preferred
Shares prior to their purchase by Purchaser), distributions (including,
without limitation, distributions of additional Shares) and rights declared,
issued, paid or distributed in respect of any such Shares on or after December
5, 1995 and payable or distributable to the undersigned on a date prior to the
transfer to the name of Purchaser (or nominee or transferee of Purchaser) on
the Company's stock transfer records of the Shares tendered herewith
(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 all
Distributions or transfer ownership of such Shares and all Distributions on
the account books maintained by a Book-Entry Transfer Facility, together, in
either such case, with all accompanying evidences of transfer and
authenticity, to or upon the order of Purchaser, upon receipt by the
Depositary, as the undersigned's agent, of the Purchase Price, (ii) present
such Shares and all Distributions for transfer on the Company's books and
(iii) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Shares and all Distributions, all in accordance with the
terms and subject to the conditions of the Offer.
The undersigned hereby irrevocably appoints the designees of Purchaser, and
each of them, as the undersigned's attorneys-in-fact and proxies, each with
full power of substitution, in the manner set forth herein, to the full extent
of the undersigned's rights with respect to the Shares tendered by the
undersigned and accepted
4
<PAGE>
by Purchaser and all Distributions. All such powers of attorney and proxies
are irrevocable and coupled with an interest in the Shares tendered herewith
and are granted in consideration of, and effective upon, Purchaser's oral or
written notice to the Depositary of its acceptance for payment of such Shares
in accordance with the terms of the Offer. Upon such acceptance for payment,
all prior powers of attorney and proxies given by the undersigned with respect
to such Shares (and all Distributions) will, without further action, be
revoked and no subsequent powers of attorney and proxies may be given or
written consent executed by the undersigned and if given or executed will not
be deemed effective. The designees of Purchaser will be empowered, among other
things, to exercise all voting and other rights with respect to such Shares
(and all Distributions) of the undersigned for which such appointment is
effective as they, in their sole discretion, may deem proper at any annual or
special meeting of the stockholders of the Company, or any adjournment or
postponement thereof, or by written consent in lieu of any such meeting, or
otherwise. The undersigned acknowledges and understands that in order for
Shares to be deemed validly tendered, immediately upon Purchaser's acceptance
for payment of such Shares, Purchaser must be able to exercise full voting
rights and other rights of a record and beneficial holder with respect to such
Shares (and all Distributions), including, without limitation, voting at any
meeting of stockholders then or thereafter scheduled or acting by written
consent (whether annual or special or whether or not adjourned).
The undersigned hereby represents and warrants that: (i) the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby (and all Distributions) and (ii) when the same are accepted
for payment by Purchaser, Purchaser will acquire good, marketable and
unencumbered title thereto, free and clear of all liens, restrictions,
charges, claims and encumbrances, and none of such Shares and Distributions
will be subject to any adverse claim. The undersigned shall, upon request,
execute and deliver all additional documents deemed by the Depositary or
Purchaser to be necessary or desirable to complete the sale, assignment and
transfer of the Shares tendered hereby (and all Distributions). In addition,
the undersigned shall promptly remit and transfer to the Depositary for the
account of Purchaser all Distributions in respect of Shares tendered hereby,
accompanied by appropriate documentation of transfer, and pending such
remittance and transfer or appropriate assurance thereof, Purchaser shall,
subject to applicable law, be entitled to all rights and privileges as owner
of such Distributions and may withhold the entire Purchase Price, or deduct
from the Purchase Price, the amount or value of such Distributions as
determined by Purchaser in its sole discretion.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall survive, and remain unaffected by, the death, dissolution,
insolvency, bankruptcy or incapacity of the undersigned, and all obligations
of the undersigned hereunder shall be binding upon the successors, assigns,
heirs, executors, administrators, receivers, trustees in bankruptcy and legal
and personal representatives of the undersigned. Except as stated in Section 4
of the Offer to Purchase, this tender is irrevocable.
The undersigned understands that the valid tender of Shares and acceptance
for payment of such Shares pursuant to any of the procedures described in
Section 2 of the Offer to Purchase and in the Instructions hereto will
constitute the undersigned's acceptance of the terms and conditions of the
Offer. The undersigned recognizes that under certain circumstances set forth
in the Offer to Purchase, Purchaser may not be required to accept for payment
any of the Shares tendered hereby.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the Purchase Price for all Shares purchased and/or
return any certificates for Shares not tendered or not accepted for payment in
the name(s) of the registered holder(s) appearing under "Description of Shares
Tendered." Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the Purchase Price for all Shares
purchased and/or return any certificates for Shares not tendered or not
accepted for payment (and accompanying documents, as appropriate) to the
address(es) of the registered holder(s) appearing under "Description of Shares
Tendered." If either or both of the boxes entitled "Special Payment
Instructions" and "Special Delivery Instructions" are completed, please issue
the check for the Purchase Price for all Shares purchased and/or return any
certificates for Shares not tendered or not accepted for payment in the
name(s) of, and deliver said check and/or return such certificates (and
accompanying documents, as appropriate) to, the person(s) and/or address(es)
so indicated. Unless otherwise indicated under "Special Payment Instructions,"
in the case of a book-entry delivery of Shares, please credit the account
maintained at the Book-Entry Facility
5
<PAGE>
indicated above with any Shares not purchased. The undersigned recognizes that
Purchaser has no obligation pursuant to the Special Payment Instructions to
transfer any Shares from the name(s) of the registered holder(s) thereof if
Purchaser does not accept for payment any of the Shares so tendered.
- ------------------------------------- -------------------------------------
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7) (SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if To be completed ONLY if
certificates for Shares not certificates for Shares not
tendered or not accepted for tendered or not accepted for
payment and/or the check for the payment and/or the check for the
Purchase Price of Shares Purchase Price of Shares
accepted for payment are to be accepted for payment are to be
issued in the name of someone sent to someone other than the
other than the undersigned, or undersigned or to the
if Shares tendered hereby and undersigned at an address other
delivered by book-entry transfer than that provided above under
that are not accepted for "Description of Shares
payment are to be returned by Tendered."
credit to an account maintained
at a Book-Entry Transfer
Facility other than the account
indicated above.
Issue [_] Check [_] Certificate(s) Mail [_] Check [_] Certificate(s)
to: to:
Name: ___________________________ Name: ___________________________
(PLEASE PRINT) (PLEASE PRINT)
Address: ________________________ Address: ________________________
_________________________________ _________________________________
_________________________________ _________________________________
(INCLUDE ZIP CODE) (INCLUDE ZIP CODE)
_________________________________
(TAX IDENTIFICATION OR SOCIAL
SECURITY NO.)
(SEE SUBSTITUTE FORM W-9 ON
REVERSE SIDE)
[_] Credit unpurchased Shares
delivered by book-entry transfer
to the Book-Entry Transfer
Facility account set forth
below:
(Check appropriate box)
[_] DTC
[_] MSTC
[_] PSDTC
[_] PDTC
Account Number: _________________
- ------------------------------------- -------------------------------------
6
<PAGE>
- --------------------------------------------------------------------------------
IMPORTANT
STOCKHOLDER SIGN HERE
(Also Complete Substitute Form W-9 on Reverse Side)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Signature(s) of Stockholder(s)
(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 trustee(s), executor(s), administrator(s), guardian(s),
attorney(s)-in-fact, officer(s) of a corporation or other(s) acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 5.)
Date: __________________________________________________________________________
Name(s): _______________________________________________________________________
________________________________________________________________________________
(Please Print)
Capacity (Full Title): _________________________________________________________
(See Instruction 5)
Address: _______________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
Area Codes and Tel. Nos.: ______________________________________________________
(Home)
________________________________________________________________________________
(Business)
Tax Identification or Social Security No.: _____________________________________
(See Substitute Form W-9 on Reverse Side)
GUARANTEE OF SIGNATURE(S)
(If Required--See Instructions 1 and 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY.
PLACE MEDALLION GUARANTEE IN SPACE BELOW.
Authorized Signature(s): _______________________________________________________
Name: __________________________________________________________________________
(Please Print)
Name of Firm: __________________________________________________________________
Address: _______________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
Area Code and Tel. No.: ________________________________________________________
Date: __________________________________________________________________________
- --------------------------------------------------------------------------------
7
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Signature Guarantees. Signatures on this Letter of Transmittal must be
guaranteed by an Eligible Institution (as defined below), unless the Shares
tendered hereby are tendered (i) by a registered holder (which term, for
purposes of this document, shall include any participant in a Book-Entry
Transfer Facility whose name appears on a security position listing as the
owner of Shares) of Shares who has not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" or (ii) for the account of an Eligible Institution. For purposes
of this Letter of Transmittal, "Eligible Institution" means 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. 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. This Letter of
Transmittal is to be used either if certificates for tendered Shares are to be
forwarded herewith or, unless an Agent's Message (as defined in Section 2 of
the Offer to Purchase) is utilized, if tender of Shares is to be made pursuant
to the procedure for tender by book-entry transfer set forth in Section 3 the
Offer to Purchase. Certificates for all physically delivered Shares, or timely
confirmation of any book-entry transfer (a "Book-Entry Confirmation") into the
Depositary's account at a Book-Entry Transfer Facility of Shares delivered by
book-entry transfer, as well as this Letter of Transmittal (or a manually
signed facsimile hereof), properly completed and duly executed, with all
required signature guarantees and all other documents required by this Letter
of Transmittal, must be received by the Depositary at one of its respective
addresses set forth herein on or prior to the Expiration Date (as defined in
Section 1 of the Offer to Purchase), or the tendering stockholder must comply
with the guaranteed delivery procedures set forth below. If certificates are
forwarded to the Depositary in multiple deliveries, a Letter of Transmittal (or
a manually signed facsimile hereof) properly completed and duly executed with
all required signature guarantees must accompany each such delivery.
Stockholders whose certificates for Shares are not immediately available or
who lack sufficient time to permit certificates and all required documents to
reach the Depositary on or prior to the Expiration Date or for whom the
procedure for book-entry transfer cannot be completed on a timely basis may
nevertheless tender their Shares pursuant to the guaranteed delivery procedure
set forth in Section 3 of the Offer to Purchase. Pursuant to such procedure,
(i) such tender must be 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 must be received by the
Depositary, either by hand delivery, or transmitted by telegram, mail or
facsimile transmission, on or prior to the Expiration Date and (iii) the
certificates for all physically tendered Shares in proper form for transfer
(and/or Book-Entry Confirmation for all tendered Shares), together with this
Letter of Transmittal (or a manually signed facsimile hereof), properly
completed and duly executed with all required signature guarantees or, in the
case of a book-entry transfer, an Agent's Message, and all other documents
required by this Letter of Transmittal, must be received by the Depositary
within three New York Stock Exchange, Inc. trading days after receipt by the
Depositary of such Notice of Guaranteed Delivery, all as provided in Section 3
of the Offer to Purchase.
THE METHOD OF DELIVERY OF CERTIFICATES FOR SHARES, THIS LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND SOLE RISK OF THE TENDERING STOCKHOLDER.
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. EXCEPT AS OTHERWISE PROVIDED IN THIS INSTRUCTION 2,
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY.
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.
3. Inadequate Space. If the space provided herein is inadequate, class(es)
and series of Shares, the certificate numbers and/or the number of Shares
evidenced by such certificates and the number of Shares tendered should be
listed on a separate schedule which should be signed and attached hereto.
8
<PAGE>
4. Partial Tender (Applicable to Certificate Stockholders only). If fewer
than all the Shares of any class or series evidenced by any certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
which are to be tendered in the box entitled "Number of Shares Tendered." In
such case, new certificate(s) for the untendered Shares that were evidenced by
the old certificate(s) will be sent to the person(s) signing this Letter of
Transmittal, unless otherwise provided in the box entitled "Special Delivery
Instructions" on this Letter of Transmittal, as soon as practicable after the
Expiration Date.
If the Merger (as defined in the Offer to Purchase) is to be consummated
promptly after the Expiration Date pursuant to the short form merger provisions
of applicable Delaware law (see Section 12 of the Offer to Purchase "--Short
Form Merger"), certificates representing Shares cancelled in the Merger will
not be returned. All Shares represented by certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
5. Signature on Letter of Transmittal, Certificates, 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 with the name(s) as written on the face of the certificate(s) without
alteration, enlargement or any other change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in names of different holders, it will
be necessary to complete, sign and submit as many separate Letters of
Transmittal (or facsimiles thereof) as there are different registrations of
certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity,
such persons should so indicate when signing, and proper evidence satisfactory
to the Purchaser of their authority to so act must be submitted.
When this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made or
certificate(s) for Shares not tendered or not accepted for payment are to be
issued to person(s) other than the registered holder(s). In such case, the
certificate(s) 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), and all such stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the registered
holder(s) of the Shares tendered hereby, the certificate(s) 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 the
certificate(s). Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution.
6. Stock Transfer Taxes. Except as otherwise specified herein, the Purchaser
will pay or cause to be paid all stock transfer taxes with respect to the
transfer and sale of Shares to it or its order pursuant to the Offer. If,
however, payment of the Purchase Price of any Shares is to be made to, or if
certificate(s) for Shares not tendered or not accepted for payment are to be
registered in the name(s) of, any person(s) other than the registered
holder(s), or if tendered certificate(s) are registered in the name of any
person(s) other than the person(s) signing this Letter of Transmittal, in each
case in the circumstances permitted hereby the amount of any stock transfer
taxes (whether imposed on the registered holder(s), or such other person(s) or
otherwise) payable on account of the transfer to such other person(s) will be
deducted from the Purchase Price of such Shares unless evidence satisfactory to
the Purchaser of the payment of such taxes or exemption therefrom is submitted.
7. Special Payment and Delivery Instructions. If certificate(s) for Shares
not tendered or not accepted for payment and/or the check for the Purchase
Price of Shares accepted for payment are to be issued or returned in the
name(s) of person(s) other than the signatory of this Letter of Transmittal or
if such certificate(s) and/or such check are to be sent to person(s) other than
the signatory of this Letter of Transmittal or to an address other than that
shown above, the appropriate box(es) on this Letter of Transmittal should be
completed. Stockholders tendering Shares by book-entry transfer may request
that Shares not purchased be credited to such account maintained at a Book-
Entry Facility as such stockholder may designate in the box entitled "Special
Payment Instructions" herein. Certificates representing Shares to be cancelled
in the Merger will not be returned. If no such instructions are given, all such
Shares not purchased will be returned by crediting the account at the Book-
Entry Transfer Facility designated above.
9
<PAGE>
8. Waiver of Conditions. Purchaser reserves the absolute right in its sole
discretion to waive any of the specific conditions of the Offer (other than
the Minimum Condition (as defined in the Offer), which may only be waived with
the
consent of the Board of Directors of the Company), in whole or in part, at any
time and from time to time in the case of any Shares tendered.
9. Federal Income Tax Withholding. Under Federal income tax backup
withholding rules, unless an exemption applies, the Depositary will be
required to withhold, and will withhold, 31% of the gross proceeds otherwise
payable to a tendering stockholder or other payee pursuant to the Offer unless
the tendering stockholder or other payee provides the Depositary with his
correct taxpayer identification number ("TIN") (employer identification number
or social security number) on Substitute Form W-9, provided below. See
"Important Tax Information" below.
10. Lost, Destroyed or Stolen Certificates. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary. 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.
11. Requests for Assistance or Additional Copies. Any questions or 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 additional copies of the Offer to Purchase, the Letter of Transmittal, the
Notice of Guaranteed Delivery and the Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 may be made to the Information
Agent. You may also contact your local broker, dealer, commercial bank, trust
company or other nominee for assistance concerning the Offer.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE COPY
HEREOF PROPERLY COMPLETED AND DULY EXECUTED (TOGETHER WITH ALL REQUIRED
SIGNATURE GUARANTEES AND CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER
AND ALL OTHER REQUIRED DOCUMENTS) OR THE NOTICE OF GUARANTEED DELIVERY
PROPERLY COMPLETED AND DULY EXECUTED MUST BE RECEIVED BY THE DEPOSITARY ON OR
PRIOR TO THE EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under Federal income tax backup withholding rules, unless an exemption
applies, the Depositary will be required to withhold, and will withhold, 31%
of the gross proceeds otherwise payable to a tendering stockholder or other
payee pursuant to the Offer unless the tendering stockholder or other payee
provides the Depositary with his correct TIN on Substitute Form W-9, provided
below. If the Depositary is not provided with the correct taxpayer
identification number, the tendering stockholder or other payee may be subject
to a $50 penalty imposed by the Internal Revenue Service.
The TIN that must be provided is that of the registered holder(s) of the
Shares or of the last transferee appearing on the transfers attached to or
endorsed on the Shares (or, if the check is made payable to another person(s)
as provided in Instruction 7, then of such person(s)). The TIN for an
individual is his social security number. For additional guidance, see the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9. If the tendering stockholder or other payee has not been
issued a TIN, but has applied for a TIN, or intends to apply for one in the
near future, such holder should check the box provided in Part IV of the
Substitute Form W-9, sign and date the Substitute Form W-9 and sign the
Certificate of Payee Awaiting Taxpayer Identification Number. If the box in
Part IV is checked the Depositary shall retain 31% of payments to be made to
the tendering stockholder or other payee during the sixty (60) day period
following the date of the Substitute Form W-9. If the tendering stockholder or
other payee furnishes the Depositary with his TIN within sixty (60) days of
the date of the Substitute Form W-9, the Depositary shall remit such amounts
retained during such period to such stockholder or other payee. If, however,
the tendering stockholder or other payee has not provided the Depositary with
his TIN within the sixty (60) day period, the Depositary shall remit such
previously retained amounts to the Internal Revenue Service as backup
withholding.
Certain stockholders (including, among others, domestic and foreign
corporations and certain foreign individuals) are not subject to backup
withholding and reporting requirements. Exempt recipients should indicate
their exempt status on Substitute Form W-9. In order to satisfy the Depositary
that a foreign individual qualifies as an exempt recipient, such holder must
submit a statement (generally, Internal Revenue Service Form W-8), signed
under penalties of perjury, attesting to that individual's exempt status. Such
statements can be obtained from the Depositary.
10
<PAGE>
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the tendering stockholder or other payee pursuant to the
Offer. 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.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a tendering
stockholder or other payee with respect to Shares purchased pursuant to the
Offer, the tendering stockholder or other payee should complete and sign the
Substitute Form W-9 provided below and either: (a) provide the correct TIN and
certify, under penalties of perjury, that (i) such tendering stockholder or
other payee has not been notified by the Internal Revenue Service that he is
subject to backup withholding as a result of failure to report all interest or
dividends or (ii) the Internal Revenue Service has notified such tendering
stockholder or other payee that he is no longer subject to backup withholding;
or (b) provide an adequate basis for exemption.
WHAT NUMBER TO GIVE THE DEPOSITARY
The TIN that must be provided is that of the registered holder(s) of the
Shares or of the last transferee appearing on the transfers attached to or
endorsed on the Shares (or, if the check is made payable to another person(s)
as provided in Instruction 7, then of such person(s)). The TIN for an
individual is his social security number. For additional guidance, see the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
11
<PAGE>
PAYER'S NAME: CITIBANK, N.A.
- --------------------------------------------------------------------------------
PART I: TAXPAYER
IDENTIFICATION NUMBER (TIN) ----------------------
Enter your TIN in the Social Security
SUBSTITUTE appropriate box. For Number
FORM W-9 individuals, this is your
social security number (SSN). OR
For other entities, it is
your employer identification ----------------------
number (EIN). If you do not Employer
have a number, see the Identification Number
attached instructions.
--------------------------------------------------------
PART II: FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING
REQUEST FOR TAXPAYER (SEE INSTRUCTIONS)_____________________________________
IDENTIFICATION NUMBER
AND CERTIFICATION PART III: CERTIFICATION
Under penalties of
perjury, I certify that:
l. The number shown on this form is my correct
taxpayer identification number (or I am waiting
for a number to be issued to me), and
2. I am not subject to backup withholding because:
(a) I am exempt from backup withholding, or (b) I
have not been notified by the Internal Revenue
Service that I am subject to backup withholding as
a result of a failure to report all interest or
dividends, or (c) the IRS has notified me that I
am no longer subject to backup withholding.
-------------------------------------------------------
CERTIFICATE INSTRUCTIONS--You must cross out item 2
above if you have been notified by the IRS that you
are currently subject to backup withholding because
of underreporting interest or dividends on your tax
return. For real estate transactions, item 2 does not
apply. For mortgage interest paid, the acquisition or
abandonment of secured property, cancellation of
debt, contributions to an individual retirement
account (IRA), and generally payments other than
interest and dividends, you are not required to sign
the Certification, but you must provide your correct
TIN.
-------------------------
PART IV: AWAITING TIN [_]
-------------------------
SIGN HERE
SIGNATURE: _______________________DATE: ______________
- --------------------------------------------------------------------------------
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 CHECKED THE BOX IN PART IV
OF THE SUBSTITUTE FORM W-9.
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, 31% of
all reportable payments made to me will be withheld, but that such amounts
will be refunded to me if I check the box in Part IV above and then provide
a taxpayer identification number within 60 days.
Signature _______________________________ Date ______________
- --------------------------------------------------------------------------------
12
<PAGE>
QUESTIONS AND REQUESTS FOR ASSISTANCE MAY BE DIRECTED TO THE INFORMATION AGENT
OR THE DEALER MANAGER. REQUESTS FOR ADDITIONAL COPIES OF THE OFFER TO
PURCHASE, THE LETTER OF TRANSMITTAL, THE NOTICE OF GUARANTEED DELIVERY AND
OTHER TENDER OFFER MATERIALS MAY BE DIRECTED TO THE INFORMATION AGENT.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
United States Europe
77 Water Street Royex House, Aldermanbury Square
New York, New York 10005 London, England EC2V 7HR
Call Toll Free: (800) 628-8538 Call Collect: (44) 171-600-5005
Outside the United States & Europe
Call Collect: (212) 269-5550
The Dealer Manager for the Offer is:
CS FIRST BOSTON CORPORATION
PARK AVENUE PLAZA
55 EAST 52ND STREET
NEW YORK, NEW YORK 10055
CALL TOLL FREE (800) 665-4379
December 5, 1995
13
<PAGE>
Exhibit 99.(a)(3)
[LOGO OF CS FIRST BOSTON APPEARS HERE] CS First Boston
Corporation
Park Avenue Plaza
New York, New York
10055
Call Toll-Free (800)
665-4379
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
AT A PRICE OF $28.00 NET PER SHARE,
ALL OUTSTANDING SHARES OF
5 5/8% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES D
AT A PRICE OF $96.544 NET PER SHARE
AND
ALL OUTSTANDING SHARES OF
6% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES E
AT A PRICE OF $100.646 NET PER SHARE
OF
MAGMA COPPER COMPANY
BY
BHP SUB INC.
AN INDIRECT WHOLLY OWNED SUBSIDIARY
OF
THE BROKEN HILL PROPRIETARY COMPANY LIMITED
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, JANUARY 4, 1996, UNLESS THE OFFER IS EXTENDED.
-------------------------------------------------------------------------------
December 5, 1995
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by BHP Sub Inc., a Delaware corporation ("Purchaser")
and an indirect wholly owned subsidiary of The Broken Hill Proprietary Company
Limited, a Victoria, Australia corporation ("BHP"), to act as Dealer Manager in
connection with Purchaser's offer to purchase (i) all outstanding shares of
Common Stock, par value $0.01 per share (the "Common Shares"), of Magma Copper
Company, a Delaware corporation (the "Company"), at a price of $28.00 per share
net to the seller in cash, (ii) all outstanding shares of 5 5/8% Cumulative
Convertible Preferred Stock, Series D, par value $0.01 per share, of the
Company (the "Series D Preferred Shares") at a price of $96.544 per share net
to the seller in cash, and (iii) all outstanding shares of 6% Cumulative
Convertible Preferred Stock, Series E, par value $0.01 per share, of the
Company at a price of $100.646 per share net to the seller in cash (the "Series
E Preferred Shares," and together with the Series D Preferred Shares and the
Common Shares, the "Shares"), upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated December 5, 1995 (the "Offer to
Purchase"), and in the related Letter of Transmittal (which together constitute
the "Offer"). The detailed terms and conditions of the Offer are set forth in
the enclosed Offer to Purchase and Letter of Transmittal. The Offer is being
made pursuant to the Agreement and Plan of Merger, dated as of November 30,
1995, by and among Purchaser, BHP Holdings (USA) Inc., a Delaware corporation,
BHP and the Company.
<PAGE>
The Offer is conditioned upon, among other things, (i) there having been
validly tendered prior to the Expiration Date (as defined in the Offer to
Purchase) and not withdrawn that number of Shares representing, on a fully
diluted basis, at least a majority of all outstanding Common Shares on the
date of purchase and (ii) satisfaction of certain other terms and conditions
as described in the Offer to Purchase.
For your information and 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) The Offer to Purchase;
(2) The blue Letter of Transmittal for Shares for your use and for the
information of your clients. Manually signed facsimile copies of the Letter
of Transmittal may be used to tender Shares;
(3) The gray Notice of Guaranteed Delivery to be used to accept the Offer
(i) if Share certificates are not available immediately or if time will not
permit such certificates and all other required documents to be delivered
to Citibank, N.A. (the "Depositary") on or prior to the Expiration Date or
(ii) if the procedure for book-entry transfer cannot be completed on a
timely basis;
(4) A letter from J. Burgess Winter, President and Chief Executive
Officer of the Company, and the Company's Solicitation/Recommendation
Statement on Schedule 14D-9 as filed with the Securities and Exchange
Commission;
(5) A printed form of letter which may be sent to your clients for whose
account you hold Shares registered in your name or the name of your
nominee, with space provided for obtaining such clients' instructions with
respect to the Offer;
(6) Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9; and
(7) A return envelope addressed to the Depositary.
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 THURSDAY, JANUARY 4, 1996, UNLESS THE OFFER
IS EXTENDED.
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 extensions
or amendments), Purchaser will be deemed to have accepted for payment (and
thereby purchased), all Shares validly tendered on or prior to the Expiration
Date and not properly withdrawn if, as and when Purchaser gives oral or
written notice to the Depositary of Purchaser's acceptance of such Shares for
payment pursuant to the Offer. Payment for Shares purchased pursuant to the
Offer will in all cases be made only after timely receipt by the Depositary of
(i) certificates for such Shares, or timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at The Depository Trust
Company, the Midwest Securities Trust Company, the Pacific Securities
Depositary Trust Company or the Philadelphia Depository Trust Company,
pursuant to the procedures described in Section 3 of the Offer to Purchase and
(ii) the Letter of Transmittal (or a manually signed facsimile thereof),
properly completed and duly executed with all required signature guarantees,
or an Agent's Message (as defined in the Offer to Purchase) in connection with
a book-entry transfer of Shares, together with all other documents required by
such Letter of Transmittal.
In order to take advantage of the Offer, the Letter of Transmittal (or a
manually signed facsimile thereof), duly executed and properly completed with
all required signature guarantees, or an Agent's Message in connection with a
book-entry transfer of Shares, and all other required documents, must be
received by the Depositary, and certificates (or Book-Entry Confirmation (as
defined in the Offer to Purchase)) representing the tendered Shares must be
delivered, all in accordance with the instructions set forth in the Letter of
Transmittal and the Offer to Purchase.
2
<PAGE>
If holders of Shares wish to tender their Shares, but it is impracticable
for them to tender their certificates on or prior to the Expiration Date or to
comply with the book-entry transfer procedures on a timely basis, a tender may
be effected by following the guaranteed delivery procedures set forth in
Section 3 of the Offer to Purchase.
Neither BHP nor Purchaser will pay any fees or commissions to any broker or
dealer or any other person (other than the Dealer Manager as described in the
Offer to Purchase) in connection with the solicitation of tenders of Shares
pursuant to the Offer. Purchaser will, however, upon request, reimburse
brokers, dealers, commercial banks and trust companies for their reasonable
costs and expenses incurred in forwarding the Offer to Purchase and the
related documents to the beneficial owners of Shares held by them as nominee
or in a fiduciary capacity. Purchaser will pay or cause to be paid any stock
transfer taxes applicable to a purchase of Shares pursuant to the Offer,
except as otherwise provided in Instruction 6 of the enclosed Letter of
Transmittal.
Any inquiries you have with respect to the Offer should be addressed to the
Dealer Manager or the Information Agent, at their addresses and telephone
numbers set forth on the back cover of the Offer to Purchase. Additional
copies of the enclosed materials may be obtained from the Information Agent.
Very truly yours,
CS FIRST BOSTON CORPORATION
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF PURCHASER, BHP, ANY AFFILIATE OF PURCHASER OR
BHP, THE DEALER MANAGER, THE DEPOSITARY OR THE INFORMATION AGENT, OR AUTHORIZE
YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF
OF ANY OF THEM WITH RESPECT TO THE OFFER OTHER THAN THE STATEMENTS EXPRESSLY
MADE IN THE OFFER TO PURCHASE OR THE LETTER OF TRANSMITTAL.
3
<PAGE>
Exhibit 99.(a)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
AT A PRICE OF $28.00 NET PER SHARE,
ALL OUTSTANDING SHARES OF
5 5/8% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES D
AT A PRICE OF $96.544 NET PER SHARE
AND
ALL OUTSTANDING SHARES OF
6% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES E
AT A PRICE OF $100.646 NET PER SHARE
OF
MAGMA COPPER COMPANY
BY
BHP SUB INC.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
THE BROKEN HILL PROPRIETARY COMPANY LIMITED
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, JANUARY 4, 1996, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
December 5, 1995
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated December 5,
1995 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer"), relating to the offer by BHP Sub Inc., a
Delaware corporation (the "Purchaser") and an indirect wholly owned subsidiary
of The Broken Hill Proprietary Company Limited, a Victoria, Australia
corporation ("BHP"), to purchase (i) all outstanding shares of Common Stock,
par value $0.01 per share (the "Common Shares"), of Magma Copper Company, a
Delaware corporation (the "Company"), at a price of $28.00 per share net to
the seller in cash, (ii) all outstanding shares of 5 5/8% Cumulative
Convertible Preferred Stock, Series D, par value $0.01 per share (the "Series
D Preferred Shares"), of the Company at a price of $96.544 per share net to
the seller in cash and (iii) all outstanding shares of 6% Cumulative
Convertible Preferred Stock, Series E, par value $0.01 per share (the "Series
E Preferred Shares"), of the Company at a price of $100.646 per share net to
the seller in cash, upon the terms and subject to the conditions set forth in
the Offer. The Series D Preferred Shares, the Series E Preferred Shares and
the Common Shares are referred to herein as the "Shares."
THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL ARE BEING FORWARDED TO YOU
AS THE BENEFICIAL OWNER OF SHARES HELD BY US IN YOUR ACCOUNT BUT NOT REGISTERED
IN YOUR NAME. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF
RECORD AND ONLY 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 Shares held by us for your account pursuant to the
terms and conditions set forth in the Offer.
<PAGE>
Your attention is called to the following:
(1) The offer price for each Common Share is $28.00 net to you in cash
upon the terms and subject to the conditions of the Offer.
(2) The offer price for each Series D Preferred Share is $96.544 net to
you in cash, upon the terms and subject to the conditions of the Offer,
which price is the equivalent of $28.00 per Common Share into which each
Series D Preferred Share presently is convertible in accordance with its
terms.
(3) The offer price for each Series E Preferred Share is $100.646 net to
you in cash, upon the terms and subject to the conditions of the Offer,
which price is the equivalent of $28.00 per Common Share into which each
Series E Preferred Share presently is convertible in accordance with its
terms.
(4) The Offer is being made pursuant to the Agreement and Plan of Merger,
dated as of November 30, 1995 (the "Merger Agreement"), by and among
Purchaser, BHP Holdings (USA) Inc., a Delaware corporation, BHP and the
Company.
(5) The Offer is being made for all outstanding Shares.
(6) The Offer is conditioned upon, among other things, (i) there having
been validly tendered prior to the Expiration Date (as defined in the Offer
to Purchase) and not withdrawn that number of Shares representing, on a
fully diluted basis, at least a majority of all outstanding Common Shares
of the Company on the date of purchase and (ii) satisfaction of certain
other terms and conditions as described in the Offer to Purchase.
(7) The Board of Directors of the Company has unanimously approved the
Merger Agreement, the Offer and the Merger (as defined in the Offer to
Purchase), has unanimously determined that the Merger is advisable and that
the terms of the Offer and the Merger are fair to, and in the best
interests of, the Company's stockholders and recommends that stockholders
accept the Offer and tender their Shares.
(8) Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by the
Purchaser pursuant to the Offer. However, federal income tax backup
withholding at a rate of 31% may be required, unless an exemption is
provided or unless the required taxpayer identification information is
provided (see Instruction 9 of the Letter of Transmittal).
(9) The Offer and withdrawal rights expire at 12:00 midnight, New York
City time, on Thursday, January 4, 1996, unless extended as provided in the
Offer to Purchase.
(10) Notwithstanding any other provision of the Offer, payment for Shares
accepted for payment pursuant to the Offer will in all cases be made only
after timely receipt by the Depositary of (i) certificates for Shares or
timely Book-Entry Confirmation (as defined in the Offer to Purchase) with
respect to such Shares pursuant to the procedures described in Section 3 of
the Offer to Purchase and (ii) the Letter of Transmittal (or a manually
signed facsimile thereof) properly completed and duly executed with all
required signature guarantees, or an Agent's Message (as defined in the
Offer to Purchase) in connection with a book-entry transfer of Shares,
together with all other documents required by the Letter of Transmittal.
Accordingly, payment may not be made to all tendering stockholders at the
same time depending upon when certificates representing Shares or
confirmations for book-entry transfer of such Shares into the Depositary's
account are actually received by the Depositary.
If you wish to have us tender any or all of your Shares, kindly so instruct
us by completing, executing and returning to us the instruction form set forth
on the reverse side hereof. An envelope to return your instructions to us is
enclosed. If you authorize tender of your Shares, all such Shares will be
tendered unless otherwise specified on the reverse side hereof. YOUR
INSTRUCTIONS TO US SHOULD BE FORWARDED IN AMPLE TIME TO PERMIT US TO SUBMIT A
TENDER ON YOUR BEHALF.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares residing in any jurisdiction in which the making
or acceptance thereof would not be in compliance with the securities, blue sky
or other laws of such jurisdiction. Purchaser is not aware of any jurisdiction
in which the making of the Offer is not in compliance with applicable law. If
Purchaser becomes aware of any jurisdiction in which the making of the Offer
would not be in compliance with applicable law, Purchaser will make a good
faith effort to comply with such law. If, after such good faith effort,
Purchaser cannot comply with such law, the Offer will not be made to, nor will
tenders be accepted from or on behalf of, holders of Shares residing in any
such jurisdiction. In any jurisdiction where the securities, blue sky or other
laws require the Offer to be made by a licensed broker or dealer, the Offer
shall be deemed to be made on behalf of Purchaser by the Dealer Manager or one
or more registered brokers or dealers licensed under the laws of such
jurisdiction.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL OUTSTANDING
COMMON SHARES AND PREFERRED SHARES OF MAGMA COPPER COMPANY
The undersigned acknowledge(s) receipt of your letter enclosing the Offer to
Purchase, dated December 5, 1995, and the related Letter of Transmittal (which
together constitute the "Offer") relating to the offer by BHP Sub Inc., a
Delaware corporation (the "Purchaser") and an indirect wholly owned subsidiary
of The Broken Hill Proprietary Company Limited, a Victoria, Australia
corporation, to purchase (i) all outstanding shares of Common Stock, par value
$0.01 per share (the "Common Shares"), of Magma Copper Company, a Delaware
corporation (the "Company"), at a price of $28.00 per share net to the seller
in cash, (ii) all outstanding shares of 5 5/8% Cumulative Convertible
Preferred Stock, Series D, par value $0.01 per share (the "Series D Preferred
Shares"), of the Company, at a price of $96.544 per share net to the seller in
cash and (iii) all outstanding shares of 6% Cumulative Convertible Preferred
Stock, Series E, par value $0.01 per share (the "Series E Preferred Shares"),
of the Company, at a price of $100.646 per share net to the seller in cash,
upon the terms and subject to the conditions of the Offer.
This will instruct you to tender to Purchaser the number of Shares indicated
below (or, if no number is indicated below, all Shares) which are held by you
for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated December 5, 1995 and in
the related Letter of Transmittal that you have furnished to the undersigned.
Dated: ______________, 199_
<TABLE>
<CAPTION>
NUMBER OF SHARES
CLASS TO BE TENDERED(1)
----- -----------------
<S> <C>
Common Shares Shares
Series D Preferred Shares Shares
Series E Preferred Shares Shares
</TABLE>
SIGN HERE
_____________________________________
_____________________________________
SIGNATURE(S)
_____________________________________
_____________________________________
_____________________________________
NAME(S) AND ADDRESS
_____________________________________
AREA CODE AND TELEPHONE NUMBER
_____________________________________
TAXPAYER IDENTIFICATION OR SOCIAL
SECURITY NUMBER
- --------
(1) Unless otherwise indicated, it will be assumed that all of your Shares
held by us for your account are to be tendered.
3
<PAGE>
Exhibit 99(a)(5)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
TENDER OF SHARES OF SERIES D PREFERRED STOCK
TENDER OF SHARES OF SERIES E PREFERRED STOCK
OF
MAGMA COPPER COMPANY
TO
BHP SUB INC.
AN INDIRECT WHOLLY OWNED SUBSIDIARY
OF
THE BROKEN HILL PROPRIETARY COMPANY LIMITED
This Notice of Guaranteed Delivery, or one substantially equivalent hereto,
must be used to accept the Offer (as defined below) if certificates
representing shares of (i) Common Stock, par value $0.01 per share (the
"Common Shares"), (ii) 5 5/8% Cumulative Convertible Preferred Stock, Series
D, par value $0.01 per share (the "Series D Preferred Shares"), and/or (iii)
6% Cumulative Convertible Preferred Stock, Series E, par value $0.01 per share
(the "Series E Preferred Shares," and together with the Series D Preferred
Shares and the Common Shares, the "Shares"), of Magma Copper Company, a
Delaware corporation (the "Company"), are not immediately available or time
will not permit certificates and all required documents to be delivered to
Citibank, N.A. (the "Depositary") on or prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase (as defined below)), or the
procedure for delivery by book-entry transfer cannot be completed on a timely
basis. This Notice of Guaranteed Delivery may be delivered by hand or
transmitted by telegram, facsimile transmission or mail to the Depositary. See
Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
CITIBANK, N.A.
By Mail: By Overnight Courier: By Hand:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
c/o Citicorp Data c/o Citicorp Data Corporate Trust Window
Distribution, Inc. Distribution, Inc. 111 Wall Street, 5th Floor
P.O. Box 7072 404 Sette Drive New York, New York
Paramus, New Jersey 07653 Paramus, New Jersey 07652
By Facsimile:
(For Eligible Institutions Only)
(201) 262-3240
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 NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES.
IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN
"ELIGIBLE INSTITUTION" (AS DEFINED BELOW), UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to BHP Sub Inc., a Delaware corporation
("Purchaser") and an indirect wholly owned subsidiary of The Broken Hill
Proprietary Company Limited, a Victoria, Australia corporation, upon the terms
and subject to the conditions set forth in the Offer to Purchase, dated
December 5, 1995 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which together constitute the "Offer"), receipt of each of which
is hereby acknowledged, the number of Common Shares, Series D Preferred Shares
and Series E Preferred Shares indicated below pursuant to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase.
(a) Number of Common Shares: Name(s) of Record Holder(s):
________________________________________ _____________________________________
Certificate No(s). (if available): _____________________________________
________________________________________ _____________________________________
(b) Number of Series D Preferred Shares: Address(es): ________________________
________________________________________ _____________________________________
Certificate No(s). (if available): _____________________________________
________________________________________ _____________________________________
(c) Number of Series E Preferred Shares: Area Code and
Telephone Number(s): ________________
________________________________________
_____________________________________
Certificate No(s). (if available):
Signature(s): _______________________
________________________________________
_____________________________________
_____________________________________
_____________________________________
Date: _______________________________
If Share(s) will be tendered by
book-entry transfer, check ONE box
and provide account number:
[_] The Depository Trust Company
[_] Midwest Securities Trust Company
[_] Pacific Securities Depository
Trust Company
[_] Philadelphia Depository Trust
Company
Account Number: _____________________
THE ATTACHED GUARANTEE MUST BE COMPLETED
2
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange, Inc. Medallion Signature Program or the
Stock Exchange Medallion Program (each, an "Eligible Institution") hereby
guarantees to deliver to the Depositary, at one of its addresses set forth
above, either the certificates representing all tendered Shares, in proper
form for transfer, or a Book-Entry Confirmation (as defined in Section 2 of
the Offer to Purchase), together with a properly completed and duly executed
Letter of Transmittal (or a manually signed facsimile thereof), with all
required signature guarantees, or an Agent's Message (as defined in the Offer
to Purchase) in connection with a book-entry transfer of Shares, and all other
documents required by the Letter of Transmittal within three New York Stock
Exchange, Inc. 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: ____________________________
Title: ______________________________
_____________________________________
ZIP CODE Name: _______________________________
_____________________________________
(PLEASE TYPE OR PRINT)
Area Code and
Telephone Number: ___________________ Date: _______________________________
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES FOR
SHARES SHOULD BE SENT ONLY WITH YOUR LETTER OF TRANSMITTAL.
3
<PAGE>
Exhibit 99(a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
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>
- --------------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- --------------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner
(joint account) of the account
or, if combined
funds, the first
individual on
the account(1)
3. Husband and wife The actual owner
(joint account) of the account
or, if joint
funds, either
person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if
account) the minor is the
only contributor,
the minor(1)
6. Account in the name of The ward, minor,
guardian or committee or incompetent
for a designated ward, person(3)
minor, or incompetent
person
7. a. The usual revocable The grantor-
savings trust account trustee(1)
(grantor is also
trustee)
b. So-called trust account The actual
that is not a legal or owner(1)
valid trust under State
law
8. Sole proprietorship account The owner(4)
- --------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- --------------------------------------------------------
<S> <C>
9. A valid trust, estate, The legal entity
or pension trust (Do 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, The organization
or educational
organization account
12. Partnership account The partnership
held in the name of the
business
13. Association, club, or The organization
other tax-exempt
organization
14. A broker or registered The broker or
nominee nominee
15. Account with the The public entity
Department 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 your individual name. You may also enter your business name. You may
use either your Social Security number or your Employer Identification
number.
(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>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number
(for businesses and all other entities), at the local office of the Social
Security Administration or the Internal Revenue Service (the "IRS") and apply
for a number.
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.
. 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, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization or any agency or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under Section 584(a).
. An exempt charitable remainder trust, or a non-exempt 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 nonresident 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,
SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER. IF YOU ARE A NON-RESIDENT
ALIEN OR A FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER A
COMPLETED INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
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 Sections 6041, 6041A(a), 6042, 6044, 6045, 6049,
6050A, and 6050N, and the regulations promulgated thereunder.
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 and to help verify the accuracy of tax returns. 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 correct 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) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully 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.
Unless otherwise noted herein, all references to section numbers or
regulations are reference to the Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder.
<PAGE>
Exhibit 99(a)(7)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase dated December
5, 1995 and the related Letter of Transmittal and is not being made to Magma
Copper Company stockholders in any jurisdiction where the making of the Offer is
not in compliance with the laws of such jurisdiction. In those jurisdictions
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
Purchaser by CS First Boston Cor-poration ("CS First Boston") 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
at
$28.00 Net Per Share
All Outstanding Shares of
5 5/8% Cumulative Convertible Preferred Stock, Series D
at
$96.544 Net Per Share
and
All Outstanding Shares of
6% Cumulative Convertible Preferred Stock, Series E
at
$100.646 Net Per Share
(which Preferred Stock prices are equivalent to $28.00 net per share of
Common Stock into which such Preferred Stock currently is convertible)
of
Magma Copper Company
by
BHP Sub Inc.
An Indirect Wholly Owned Subsidiary of
The Broken Hill Proprietary Company Limited
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON THURSDAY, JANUARY 4, 1996, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
BHP Sub Inc., a Delaware corporation ("Purchaser") and an indirect
wholly owned subsidiary of The Broken Hill Proprietary Company Limited, a
corporation organized under the laws of Victoria, Australia ("BHP"), is offering
to purchase (i) all outstanding shares of common stock, par value $0.01 per
share (the "Common Shares"), of Magma Copper Company, a Delaware corporation
(the "Company"), at a price of $28.00 per share net to the seller in cash, (ii)
all outstanding shares of 5 5/8% Cumulative Convertible Preferred Stock, Series
D, par value $0.01 per share, of the Company (the "Series D Preferred Shares"),
at a price of $96.544 per share net to the seller in cash and (iii) all
outstanding shares of 6% Cumulative Convertible Preferred Stock, Series E, par
value $0.01 per share, of the Company (the "Series E Preferred Shares"), at a
price of $100.646 per share net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated December 5,
1995 (the "Offer to Purchase"), and in the related Letter of Transmittal (which
together constitute the "Offer"). The Common Shares, Series D Preferred Shares
and the Series E Preferred Shares are together referred to herein as the
"Shares."
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE
MERGER AGREEMENT (AS DEFINED BELOW), THE OFFER AND THE MERGER (AS DEFINED
BELOW), HAS UNANIMOUSLY DETERMINED THAT THE MERGER IS ADVISABLE AND THAT THE
TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE
COMPANY'S STOCKHOLDERS AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE
OFFER AND TENDER ALL THEIR SHARES.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE) AND
NOT WITHDRAWN SUCH NUMBER OF SHARES AS REPRESENTS AT LEAST A MAJORITY OF ALL
OUTSTANDING COMMON SHARES ON A FULLY DILUTED BASIS ASSUMING CONVERSION OF ALL
OUTSTANDING OPTIONS AND SECURITIES CONVERTIBLE INTO COMMON SHARES.
The Offer is being made pursuant to the Agreement and Plan of Merger,
dated as of November 30, 1995 (the "Merger Agreement"), by and among Purchaser,
BHP Holdings (USA) Inc., a Delaware corporation, BHP and the Company. The Merger
Agreement provides that, among other things, as soon as practicable following
the expiration of the Offer and the satisfaction or waiver of certain
conditions, Purchaser will be merged with and into the Company (the "Merger").
At the effective time of the Merger, each Share issued and outstanding (other
than Shares held in the treasury of the Company or owned by Purchaser, or Shares
which are held by stockholders, if any, who properly exercise their appraisal
rights under Delaware law) will be converted into the right to receive (i) in
the case of Common Shares, $28.00 net in cash, without interest thereon; (ii) in
the case of Series D Preferred Shares, $96.544 net in cash, without interest
thereon; and (iii) in the case of Series E Preferred Shares, $100.646 net in
cash, without interest thereon, and the Company will become an indirect wholly
owned subsidiary of BHP.
<PAGE>
Warburg, Pincus Capital Company, L.P. ("Warburg, Pincus"), beneficially
owning 16,889,616 Common Shares, representing approximately 25.9% of the
outstanding Common Shares on a fully diluted basis on November 28, 1995 (the
"Warburg Shares"), has entered into the Tender Agreement, dated as of November
30, 1995 (the "Tender Agreement"), with BHP pursuant to which Warburg, Pincus
has agreed, among other things, (a) to tender in the Offer and not withdraw all
of the Warburg Shares and any additional Common Shares which may be acquired by
Warburg, Pincus prior to the expiration date of the Tender Agreement and (b)
that, at any meeting of the Company's stockholders (however called), it would
(i) vote its Shares in favor of the Merger, (ii) vote its Shares against any
action or agreement that would result in a breach in any material respect of any
convenant, representation or warranty or any other obligation of the Company
under the Merger Agreement, and (iii) vote its Shares against any action or
Agreement that would impede, interfere with, delay, postpone or attempt to
discourage the Merger or the Offer.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn if, as
and when Purchaser gives oral or written notice to the Depositary (as defined in
the Offer to Purchase) of Purchaser's acceptance of such Shares for payment
pursuant to the Offer. In all cases, payment for Shares purchased pursuant to
the Offer will be made by deposit of the purchase price therefor with the
Depositary, which shall act as agent for tendering stockholders for the purpose
of receiving payment from Purchaser and transmitting payment to tendering
stockholders. Under no circumstances will interest on the purchase price of the
Shares be paid by Purchaser by reason of any delay in making payment. Payment
for Shares purchased pursuant to the Offer will in all cases be made only after
timely receipt by the Depositary of (a) certificates for such Shares or timely
confirmation of a book-entry transfer of such Shares into the Depositary's
account at a Book-Entry Transfer Facility (as defined in the Offer to Purchase)
pursuant to the procedures set forth in the Offer to Purchase and (b) a properly
completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof), with all required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message (as defined in the Offer to Purchase),
together with all other documents required by the Letter of Transmittal.
Purchaser expressly reserves the right at any time or from time to time, subject
to the terms of the Merger Agreement and regardless of whether any of the events
set forth in Section 15 of the Offer to Purchase shall have occurred, 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. Any such extension will be followed as
promptly as practicable by public announcement thereof no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date.
Tenders of Shares made pursuant to the Offer are irrevocable, except
that Shares tendered pursuant to the Offer may be withdrawn (other than the
Warburg Shares as provided in the Tender Agreement) at any time prior to the
Expiration Date (or, if Purchaser shall have extended the period of time for
which the Offer is open, at the latest time and date by Purchaser, shall expire)
and, unless theretofore accepted for payment by Purchaser pursuant to the Offer,
may also be withdrawn at any time after February 2, 1996. 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 and must specify the name of the person who
tendered the Shares to be withdrawn, the number and class of Shares to be
withdrawn and the name of the registered holder, if different from the name of
the person who tendered the Shares. If certificates for Shares to be withdrawn
have been delivered or otherwise identified to the Depositary, then, prior to
the release of such certificates, the serial numbers shown on such certificates
must be submitted to the Depositary by the tendering stockholder and, unless
such Shares have been tendered for the account of an Eligible Institution (as
defined in the Offer to Purchase), the signatures on the notice of withdrawal
must be guaranteed by an Eligible Institution. If Shares have been tendered
pursuant to the procedures for book-entry transfer set forth in the Offer to
Purchase, the 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. All questions as to the form and validity (including timeliness and
receipt) of a notice of withdrawal will be determined by Purchaser, in its sole
discretion, whose determination shall be final and binding. None of Purchaser,
BHP, 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 to any
tendering shareholder for failure to give any such notification.
<PAGE>
The information required to be disclosed by paragraph (e)(1)(vii) of
Rule 14d-6 of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended, is contained in the Offer to Purchase and is
incorporated herein by reference.
The Company has provided Purchaser its lists of stockholders and
security position listings for the purpose of disseminating the Offer to holders
of Shares. The Offer to Purchase, the related Letter of Transmittal and other
related materials will be mailed to record holders of Shares and furnished to
brokers, dealers, commercial 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.
Requests for copies of the Offer to Purchase, the related Letter of
Transmittal and other tender offer materials may be directed to the Information
Agent as set forth below, and copies will be furnished promptly at Purchaser's
expense. No fees or commissions will be payable by Purchaser or BHP to brokers,
dealers or other persons other than the Dealer Manager for soliciting tenders of
Shares pursuant to the Offer.
The Information Agent for the Offer is:
D.F. King & Co., Inc.
United States Europe
------------- ------
77 Water Street Royex House, Aldermanbury Square
New York, New York 10005 London, England EC2V 7HR
Call Toll-Free: (800) 628-8538 Call Collect: (44) 171-600-5005
Outside the United States and Europe
------------------------------------
Call Collect: (212) 269-5550
The Dealer Manager for the Offer is:
CS First Boston
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
Call Toll-Free: (800) 665-4379
December 5, 1995
<PAGE>
EXHIBIT (a)(8)
<PAGE>
[LOGO OF BHP] [LOGO OF MAGMA]
News Release
BHP & MAGMA ANNOUNCE PLANS TO MERGE
-----------------------------------
Melbourne, Australia and Tucson, Arizona--November 30, 1995--The Broken Hill
Proprietary Company Limited (BHP) and the Magma Copper Company (Magma) announced
today that they have signed a definitive agreement for the acquisition by a BHP
subsidiary of all the outstanding stock of Magma.
Under the agreement, BHP will commence, on or before December 5, 1995, a US$28
per share cash tender offer for all the outstanding shares of Common Stock of
Magma. BHP will also tender for all outstanding shares of Series D and Series E
Convertible Preferred Stock of Magma at a per share price which, on an
as-converted-basis, equates to $28 per share of Common Stock. Following the
expiration of the tender offer, BHP will acquire, through a merger, all shares
not purchased in the tender offer at the same price. This would result in a
share purchase of US$1.8 billion (A$2.5 billion) and a total investment of about
US$2.4 billion (A$3.2 billion), including assumption of Magma's debt. CS First
Boston is acting as Dealer Manager in the tender offer.
The Board of Directors of Magma has unanimously approved the tender offer and
the merger as being fair to and in the best interests of Magma and its
shareholders and has recommended that all shareholders accept the offer. The
Board of Directors has received a written opinion from its financial advisors
Goldman, Sachs & Co. to the effect that the consideration proposed to be paid in
the transaction is fair to Magma's shareholders. The offer will be conditioned
upon, among other things, the tender of a number of shares which represents a
majority of the outstanding shares of Common Stock on a fully diluted basis. The
offer will not be subject to a financing contingency. Magma's major shareholder,
Warburg Pincus Capital Company, L.P., which holds 26% of Magma's shares on a
fully diluted basis has agreed to tender its
-1-
<PAGE>
shares to the offer in accordance with the recommendation of Magma's Board of
Directors.
Upon completion of the merger, Magma will be combined with BHP's existing copper
businesses and a new BHP Copper Group will be established and led by Magma's
President & CEO, Mr. J. Burgess Winter. The new Copper Group will produce about
900,000 tonnes in 1996.
The proposed acquisition is part of BHP's strategy for continuing its growth.
BHP currently has no copper production in the United States. Its existing copper
assets including Escondida in Chile and Ok Tedi in Papua New Guinea will be
complemented by Magma's Arizona and Nevada mines in the United States and the
Tintaya mine in Peru. The BHP Copper Group will be strengthened through Magma's
ownership of the largest copper smelter in the US, value added processing
operations, and access to Magma's management and technical skills.
BHP has interests in several undeveloped copper resources, including oxide
reserves at Escondida, a large sulfide deposit at nearby Zaldivar in Chile and a
high potential prospect known as Agua Rica in Argentina. The development of
these resources will be enhanced with the acquisition of Magma because of its
established smelting capacity and demonstrated technical capabilities in
smelting, leaching, refining and solvent extraction/electro winning (SX-EW) of
copper metal.
The merger will accelerate BHP's move into the processing of copper metal in
line with its earlier decision to develop a copper cathode plant at Coloso in
Northern Chile, using innovative technology to extract copper metal from
Escondida concentrates.
The Managing Director of BHP, Mr. John Prescott and the President & CEO of
Magma, Mr. J. Burgess Winter, in a joint statement, said: "The creation of the
new BHP Copper Group has the unanimous support of the BHP and Magma Boards and
is a very positive and exciting development for the industry and each company's
shareholders".
The CEO of BHP Minerals, Jerry Ellis added: "The merged business will be an
outstanding, international copper company. It has several new projects underway
that point to rapid growth in the near term, along with management and technical
skills and the financial and mineral resources to provide a springboard for
significant future expansion in a growing copper market."
-2-
<PAGE>
"The two organizations have complementary assets, including world class mining
and processing capabilities and high quality management skills.
"The joining together of these operations will strengthen the BHP Group and at
the same time enhance the company's position in the copper business".
Following the acquisition more than 5,000 Magma employees will join BHP's 48,000
employees world wide.
The Broken Hill Proprietary Company Limited is Australia's largest industrial
and natural resources company, with approximately 52,000 employees based in more
than 50 countries. BHP was incorporated in 1885 to mine the lead/zinc/silver
discovery at Broken Hill in New South Wales, Australia. Its headquarters are in
Melbourne, Australia, and its shares are traded on the stock exchanges of
Melbourne, Sydney, New York, London, Tokyo, Wellington, Frankfurt and
Switzerland. BHP is comprised of three main business groups: Minerals, Steel and
Petroleum. Its global assets are worth more than US$22 billion, with annual
sales exceeding US$13 billion.
Magma Copper Company, one of the largest primary copper producers in the United
States, produces high-quality copper cathode and rod for sale to customers
worldwide. Magma has operations in San Manuel, Miami, and Superior, Arizona;
Ely, Nevada and southern Peru. Magma Metals Company, a division of Magma Copper
Company, operates Magma's smelting and refining complex located in San Manuel,
and conducts the Company's commercial activities. Corporate headquarters are in
Tucson, Arizona.
For further information contact:
Media Inquiries: Tony Wells, Melbourne (613) 9609-2723 (bh)
015 333 087 (mobile)
Michael Spencer (613) 9609-3137 (bh)
0418 352 154 (mobile)
Jay Rhodes, BHP San Francisco (415) 774-2449 (bh)
(415) 567-3600 (ah)
Investor Inquiries: Ric Thiele, Melbourne (613) 9609-3885 (bh)
(613) 9574-9460 (ah)
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<PAGE>
Pierre Hirsch:
San Francisco (415) 774-2030 (bh)
(510) 284-7555 (ah)
New York (on 1st Dec 1995) (212) 373-0216
or (212) 373-0200
Magma Robbie Stephen (520) 575-5710 (bh)
Sandy Cole (520) 575-4758 (bh)
BHP London Gillespie Robertson (44) 171 334 0803
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<PAGE>
EXHIBIT (c)(1)
<PAGE>
AGREEMENT AND PLAN OF MERGER
AMONG
THE BROKEN HILL PROPRIETARY
COMPANY LIMITED,
BHP HOLDINGS (USA) INC.,
BHP SUB INC.
AND
MAGMA COPPER COMPANY
Dated as of
November 30, 1995
<PAGE>
TABLE OF CONTENTS
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<TABLE>
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Page
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<S> <C> <C>
I. ARTICLE I
The Offer
1.1 The Offer...................................... 1
1.2 Company Action................................. 3
1.3 Directors...................................... 4
II. ARTICLE II
The Merger
2.1 The Merger..................................... 5
2.2 Effect of the Merger........................... 5
2.3 Consummation of the Merger..................... 6
2.4 Certificate of Incorporation and By-Laws;
Directors and Officers......................... 6
2.5 Conversion of Securities....................... 6
2.6 Stock Options.................................. 7
2.7 Closing of Company Transfer Books.............. 8
2.8 Exchange of Certificates....................... 8
2.9 Funding of Paying Agent........................ 9
2.10 Taking of Necessary Action; Further Action..... 10
2.11 Dissenting Shares.............................. 10
2.12 Merger Without Meeting of Stockholders......... 11
2.13 No Further Ownership Rights in Common or
Preferred Stock................................ 11
III. ARTICLE III
Representations and Warranties of
BHP, Sub and Purchaser
3.1 Organization and Qualification................. 11
3.2 Authority Relative to this Agreement........... 12
3.3 Financing Arrangements......................... 13
3.4 Ownership of Shares and Preferred Shares....... 13
IV. ARTICLE IV
Representations and Warranties of the Company
4.1 Organization and Qualification................. 13
4.2 Subsidiaries................................... 13
4.3 Capitalization................................. 14
4.4 Authority Relative to this Agreement........... 15
4.5 Commission Filings............................. 16
4.6 Litigation..................................... 18
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
4.7 Employees and Labor............................ 18
4.8 Taxes and Tax Returns.......................... 19
4.9 ERISA.......................................... 19
4.10 Stockholder Vote Required...................... 20
4.11 Compliance with Laws........................... 20
4.12 Properties; Reserves; Water Rights............. 21
4.13 Environmental Matters.......................... 23
4.14 License Agreements............................. 24
4.15 Insurance...................................... 24
V. ARTICLE V
Conduct of Business Pending the Merger
5.1 Conduct of Business by the Company Pending
the Merger..................................... 25
VI. ARTICLE VI
Additional Agreements
6.1 Action of Stockholders......................... 27
6.2 Proxy Statement................................ 27
6.3 Expenses....................................... 28
6.4 Additional Agreements.......................... 28
6.5 Limitation on Negotiations..................... 29
6.6 Notification of Certain Matters................ 30
6.7 Access to Information.......................... 30
6.8 Stockholder Claims............................. 30
6.9 Treatment of Employee Compensation and
Benefits....................................... 31
6.10 Indemnification Rights......................... 31
6.11 BHP Guarantee.................................. 33
VII. ARTICLE VII
Conditions
7.1 Conditions to Obligations of Each Party to
Effect the Merger.............................. 33
VIII. ARTICLE VIII
Termination, Amendment and Waiver
8.1 Termination.................................... 34
8.2 Amendment...................................... 35
8.3 Fees Upon Termination.......................... 35
8.4 Effect of Termination.......................... 36
8.5 Waiver......................................... 36
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
IX. ARTICLE IX
General Provisions
9.1 Brokers........................................ 37
9.2 Public Statements.............................. 37
9.3 Notices........................................ 37
9.4 Interpretation................................. 38
9.5 Severability................................... 38
9.6 Miscellaneous.................................. 39
9.7 Counterparts................................... 39
9.8 Survival....................................... 39
9.9 Third Party Beneficiaries...................... 39
Annex I
</TABLE>
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<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of November 30, 1995 (the
"Agreement"), by and among The Broken Hill Proprietary Company Limited, a
Victoria, Australia corporation ("BHP"), BHP Holdings (USA) Inc., a Delaware
corporation and subsidiary of BHP ("Sub"), BHP Sub Inc., a Delaware corporation
and a subsidiary of Sub ("Purchaser"), and Magma Copper Company, a Delaware
corporation (the "Company").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the respective Boards of Directors of BHP, Sub, Purchaser and
the Company have approved the acquisition of the Company by Purchaser pursuant
to a tender offer (the "Offer") by Purchaser for (i) all of the outstanding
shares of Common Stock, par value $0.01, of the Company, at a price of $28.00 in
cash per Share (the "Shares"); (ii) all of the outstanding shares of 5 5/8%
Cumulative Convertible Preferred Stock, Series D, par value $0.01, of the
Company, at a price of $96.544 in cash per share (the "Series D Preferred
Shares"), and (iii) all of the outstanding shares of 6% Cumulative Convertible
Preferred Stock, Series E, par value $0.01, of the Company, at a price of
$100.646 in cash per Share (the "Series E Preferred Shares", and together with
the Series D Preferred Shares, the "Preferred Shares") followed by a merger (the
"Merger") of Purchaser with and into the Company, all upon the terms and subject
to the conditions set forth herein.
NOW THEREFORE, in consideration of the premises and the mutual
agreements, provisions and covenants herein contained, the parties hereby agree
as follows:
ARTICLE I
THE OFFER
1.1 The Offer.
---------
(a) Purchaser shall commence within the meaning of Rule 14d-2 under
the Securities Exchange Act of 1934, as amended, including the rules and
regulations promulgated thereunder (the "Exchange Act"), the Offer within five
business days (as such term is defined in Rule 14e-1 under the Exchange Act (a
"Business Day")) after the date of this Agreement. The Offer, for all of the
outstanding Shares and Preferred Shares, will be
<PAGE>
subject only to a number of Shares and Preferred Shares being validly tendered
prior to the expiration of the Offer and not withdrawn which would result in
Purchaser's ownership of such number of Shares and Preferred Shares as
represents at least a majority of the outstanding Shares of the Company on a
fully diluted basis assuming conversion of all outstanding options and
securities convertible into Shares including Preferred Shares and Warrants (as
defined in Section 4.3(a)), if any, of the Company (the "Minimum Condition") and
satisfaction or waiver of the further conditions set forth in Annex I, any of
which conditions may be waived in the sole discretion of Purchaser except that
the Minimum Condition may only be waived with the consent of the Board of
Directors of the Company. Assuming all of the conditions to consummation of the
Offer are satisfied, Sub and Purchaser shall consummate the Offer as promptly as
possible.
(b) Upon the terms and subject to the conditions of the Offer,
Purchaser shall purchase all Shares and Preferred Shares which are validly
tendered on or prior to the expiration of the Offer and not timely withdrawn.
Purchaser may, at any time, transfer or assign to one or more corporations,
which are direct or indirect subsidiaries of BHP, the right to purchase all or
any portion of the Shares and Preferred Shares tendered pursuant to the Offer,
but any such transfer or assignment shall not relieve Purchaser of its
obligations under the Offer or prejudice the rights of tendering stockholders to
receive payment for Shares or Preferred Shares properly tendered and accepted
for payment.
(c) The Offer shall remain open (except upon the occurrence of the
events specified in Section 8.1(c)(i), 8.1(a) and 8.1(d)) until January 4, 1996
(the "Expiration Date"), unless Purchaser shall have extended the period of time
for which the Offer is open as may be required by this Agreement, or applicable
law, in which event the term "Expiration Date" shall mean the latest time and
date at which the Offer, as so extended by Purchaser, shall expire). On or
prior to the date the Offer is commenced, Purchaser shall file with the
Securities and Exchange Commission (the "Commission") a Tender Offer Statement
on Schedule 14D-1 (together with all amendments and supplements thereto, the
"Schedule 14D-1") with respect to the Offer, that shall comply in all material
respects with the provisions of such Schedule and all applicable Federal
securities laws, and shall
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<PAGE>
contain (including as an exhibit) or incorporate by reference the Offer (or
portions thereof) and forms of the related letter of transmittal and summary
advertisement (the "Tender Offer Documents"). Purchaser shall not, without the
prior written consent of the Board of Directors of the Company, (i) decrease or
change the form of the consideration payable in the Offer, (ii) reduce the
number of Shares sought pursuant to the Offer, (iii) amend the conditions or
impose additional conditions to the Offer, (iv) amend any term of the Offer or
(v) waive the Minimum Condition. Subject to the last sentence of paragraph (a),
Purchaser (i) may at any time, in its sole discretion, extend the Offer and (ii)
shall extend the Offer upon the occurrence of the Events (as such term is
defined in Annex I) to the extent contemplated by the provisions of Annex I.
1.2 Company Action. The Company hereby consents to the Offer and
--------------
represents that its Board of Directors has determined by a unanimous vote that
the Offer and the Merger are fair to, and in the best interests of, the Company
and its stockholders, has approved the Offer and the Merger, has approved and
adopted this Agreement, and has resolved to recommend acceptance of the Offer
to, and adoption of this Agreement by, the Company's stockholders. The Company
further represents that Goldman, Sachs & Co. has opined to the Board of
Directors of the Company that, as of November 30, 1995, the consideration in
cash to be received by holders of Shares and Preferred Shares pursuant to the
Offer and the Merger is fair to such holders. In addition, the Independent
Directors of the Company, as such term is defined in the Standstill Agreement,
dated November 30, 1988, between Warburg Pincus Capital Company, L.P. ("WP") and
the Company (the "Standstill Agreement"), have approved the transactions
contemplated by the Tender Agreement, dated the date hereof, between WP and BHP
(the "Tender Agreement") in accordance with the terms of the Standstill
Agreement. As soon as practicable after the date hereof, the Company shall file
with the Commission but in no event prior to such date as the Purchaser has
filed the Tender Offer Documents with the Commission and mail to holders of
record and beneficial owners of Shares and Preferred Shares a
Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the
Offer (such Schedule 14D-9, as amended from time to time, the "Schedule 14D-9"),
which shall reflect such determination and recommendation. The Company shall
from time to time furnish Purchaser with such additional information, if any,
including updated or additional
- 3 -
<PAGE>
lists of stockholders, mailing labels and lists of securities positions, and
other assistance as the Purchaser may reasonably request in order to be able to
communicate the Offer to the stockholders of the Company .
1.3 Directors. Promptly upon the purchase by Purchaser of such number
---------
of Shares and Preferred Shares as represents at least a majority of the
outstanding Shares (on a fully diluted basis) and from time to time thereafter,
Purchaser shall be entitled to designate such number of directors, rounded up to
the next whole number, on the Board of Directors of the Company as will give
Purchaser, subject to compliance with Section 14(f) of the Exchange Act,
representation on the Board of Directors of the Company equal to the product of
(a) the number of directors on the Board of Directors of the Company (after
-
giving effect to the appointment of such directors) and (b) the percentage that
-
such number of Shares so purchased bears to the number of Shares outstanding,
and the Company shall, upon request by Purchaser, promptly (i) increase the size
of the Board of Directors of the Company to the extent permitted by its Restated
Certificate of Incorporation and By-Laws (and amend the Restated Certificate of
Incorporation and By-Laws, if so required, to increase the size of the Board of
Directors to allow for such additional directors); and/or (ii) take all steps
necessary and appropriate to secure the resignations of such number of directors
as is necessary to enable Purchaser's designees to be elected to the Board of
Directors of the Company (and shall hold a Board meeting for such purpose)
(provided, however, that the Company shall not have fewer than 3 Continuing
- --------- -------
Directors (as such term is defined in the Restated Certificate of Incorporation)
of whom at least two are Independent Directors (as such term is defined in the
Standstill Agreement)); and (iii) shall cause Purchaser's designees to be so
elected. At any time after the execution hereof, at the request of Purchaser,
the Company shall promptly take, at its expense, all action necessary to effect
any such election, including mailing to its stockholders the information
required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder in form and substance reasonably satisfactory to Purchaser and its
counsel. Sub and Purchaser shall supply the Company and be solely responsible
for any information included in the filings with the Commission with respect to
themselves and their nominees, officers, directors and affiliates required by
said Section 14(f) and Rule 14f-1. Notwithstanding anything in this Agreement
to the contrary, prior to the Effective Time, in addition to any other approval
of the
- 4 -
<PAGE>
directors required by applicable law or the Restated Certificate of
Incorporation or By-Laws of the Company, the affirmative vote of a majority of
the Continuing Directors shall be required (i) to amend or terminate this
Agreement by the Company, (ii) to waive any of the Company's rights or to
exercise any of its remedies hereunder, (iii) to extend the time for performance
of Purchaser's obligations hereunder or (iv) to take any other action by the
Company in connection with this Agreement required to be taken by the Board of
Directors of the Company, whether or not such Continuing Directors constitute a
quorum.
ARTICLE II
THE MERGER
2.1 The Merger. At the Effective Time (as defined in Section 2.3), in
----------
accordance with this Agreement and the General Corporation Law of the State of
Delaware, as amended (the "Delaware Law"), Purchaser shall be merged with and
into the Company, the separate existence of Purchaser (except as may be
continued by operation of law) shall cease, and the Company shall continue as
the surviving corporation. The Company, in its capacity as the corporation
surviving the Merger, sometimes is referred to herein as the "Surviving
Corporation."
2.2 Effect of the Merger. The Surviving Corporation shall possess all
--------------------
the rights, privileges, powers and franchises, of a public as well as a private
nature, and be subject to all the restrictions, disabilities and duties, of each
of Purchaser and the Company (collectively, the "Constituent Corporations"); the
Surviving Corporation shall be vested with the rights, privileges, powers and
franchises, all properties and assets and all debts due on whatever account, and
all other things in action or belonging to, and all and every other interest of,
each of the Constituent Corporations; and all debts, liabilities and duties of
each of the Constituent Corporations shall thenceforth attach to the Surviving
Corporation and may be enforced against it to the same extent as if such debts,
liabilities and duties had been incurred or contracted by it, all with the
effect set forth in Section 259 of the Delaware Law.
2.3 Consummation of the Merger. As soon as is practicable after the
--------------------------
satisfaction or waiver of the conditions set forth in Article VII, and in no
event later
- 5 -
<PAGE>
than five business days after such satisfaction or waiver, the parties to this
Agreement will cause a Certificate of Merger to be filed with the Secretary of
State of the State of Delaware, in such form as required by, and executed in
accordance with, the relevant provisions of the Delaware Law, including, if
applicable, the procedures permitted by Section 253 of the Delaware Law (in
which case references herein to the "Certificate of Merger" shall refer instead
to the "Certificate of Ownership and Merger"). The Merger shall be effective at
such time as the Certificate of Merger is duly filed with the Secretary of State
of the State of Delaware or at such later time as specified in the Certificate
of Merger (the "Effective Time").
2.4 Certificate of Incorporation and By-Laws; Directors and Officers.
----------------------------------------------------------------
The Restated Certificate of Incorporation of the Company shall be the
Certificate of Incorporation of the Surviving Corporation immediately after the
Effective Time. The By-Laws of Purchaser, as in effect immediately prior to the
Effective Time, shall be the By-Laws of the Surviving Corporation immediately
after the Effective Time and the directors of the Company shall submit their
resignations at the Effective Time. The directors of Purchaser holding office
immediately prior to the Effective Time shall be the directors of the Surviving
Corporation immediately after the Effective Time. The officers of the Company,
other than the Chairman of the Board, holding office immediately prior to the
Effective Time shall be the officers (holding the same offices as they held with
the Company) of the Surviving Corporation immediately after the Effective Time.
2.5 Conversion of Securities. At the Effective Time, by virtue of the
------------------------
Merger and without any action on the part of Purchaser, the Company or the
holder of any of the following securities:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than Shares to be cancelled pursuant to Section 2.5(c) and
other than Shares with respect to which the provisions of Section 2.11 are
applicable) shall automatically be cancelled and extinguished and be converted
into and become solely a right to receive $28.00 in cash (adjusted for stock
splits or other similar events) without interest (the "Common Stock
Consideration").
- 6 -
<PAGE>
(b) Each Preferred Share issued and outstanding immediately prior to
the Effective Time (other than Preferred Shares to be cancelled pursuant to
Section 2.5(c) and other than Preferred Shares as to which the provisions of
Section 2.11 are applicable) shall automatically be cancelled and extinguished
and be converted into and become solely a right to receive cash in an amount
equal to (x) the number of Shares into which such Preferred Share would have
been convertible immediately prior to the Effective Time multiplied by (y)
$28.00 in cash (adjusted for stock splits or other similar events) without
interest (the "Preferred Stock Consideration"). As used herein, the term
"Merger Consideration" shall mean either Common Stock Consideration or Preferred
Stock Consideration or both, as the context may require.
(c) Each Share and Preferred Share issued and outstanding immediately
prior to the Effective Time and held in the treasury of the Company or owned by
Purchaser shall automatically be cancelled and no payment shall be made with
respect thereto. For purposes of this Section 2.5(c), Shares held under the
Company's 1987 Stock Option Plan Trust Agreement shall not be deemed to be held
in the treasury of the Company.
(d) Each share of capital stock of Purchaser issued and outstanding
immediately prior to the Effective Time shall be converted and changed into one
validly issued, fully paid and nonassessable share of such capital stock of the
Surviving Corporation.
2.6 Stock Options. Each option (an "Option") to purchase Shares issued
-------------
by the Company which is outstanding at the Effective Time shall be cancelled by
virtue of the Merger, without consideration except as provided in this Section
2.6, and shall cease to exist. Each holder of an Option, whether or not
immediately exercisable, shall be entitled to receive, for each Share issuable
on exercise of such Option, an amount in cash equal to the excess of (x) the
Common Stock Consideration over (y) the per Share exercise price of the Option
as in effect immediately prior to the Effective Time. The consideration due
under this Section 2.6 shall be payable without interest after (a) verification
by the Paying Agent of the ownership and terms of the particular Option by
reference to the Company's records, and (b) delivery in the manner provided in
Section 2.8 of a written instrument duly executed by the owner of the applicable
Option, in a form provided by the Paying
- 7 -
<PAGE>
Agent and setting forth (i) the aggregate number of Options owned by that person
and their respective issue dates and exercise prices; (ii) a representation by
the person that he or she is the owner of all Options described pursuant to
clause (i), and that none of those Options has expired or ceased to be
exercisable; and (iii) a confirmation of and consent to the cancellation of all
of the Options described pursuant to clause (i). Each holder of an Option who is
a participant in the Company's Special Executive Deferred Compensation Plan may
elect before the Offer commences to surrender any Option that is not immediately
exercisable at the time of the holder's election and receive, for each Share
that would have been issuable on exercise of such Option, a credit in the
Special Executive Deferred Compensation Plan equal to the excess of (x) the
Common Stock Consideration over (y) the per Share exercise price of the Option
as in effect at the time of the election. Such credit shall be funded pursuant
to the change of control provisions of the Special Executive Deferred
Compensation Plan.
2.7 Closing of Company Transfer Books. At the Effective Time, the stock
---------------------------------
transfer books of the Company shall be closed with respect to Shares and
Preferred Shares issued and outstanding immediately prior to the Effective Time
and no further transfer of such Shares and Preferred Shares shall thereafter be
made on such stock transfer books. If, after the Effective Time, valid
certificates previously representing such Shares and Preferred Shares are
presented to the Surviving Corporation or the Paying Agent (as defined in
Section 2.8), they shall be exchanged as provided in Section 2.8.
2.8 Exchange of Certificates. Prior to the Effective Time, Purchaser
------------------------
shall designate a bank or trust company to act as agent (the "Paying Agent") for
the holders of Shares and Preferred Shares to receive the funds necessary to
effect the exchange for cash of certificates which, immediately prior to the
Effective Time, represented Shares or Preferred Shares entitled to payment
pursuant to Section 2.5(a) or 2.5(b). As soon as practicable after the
Effective Time, the Paying Agent shall mail a transmittal form (the "Letter of
Transmittal") to each holder of record of certificates theretofore representing
such Shares or Preferred Shares advising such holder of the procedure for
surrendering to the Paying Agent such certificates. If a check for the Merger
Consideration is to be issued in the name of
- 8 -
<PAGE>
a person other than the person in whose name the certificates for Shares or
Preferred Shares surrendered for exchange are registered on the books of the
Company, it shall be a condition of the exchange that the person requesting such
exchange shall pay to the Paying Agent all transfer or other taxes required by
reason of the issuance of such check in the name of a person other than the
registered owner of the certificates surrendered, or shall establish to the
satisfaction of the Paying Agent that such taxes have been paid or are not
applicable. Notwithstanding the foregoing, neither the Paying Agent nor any
party hereto shall be liable to a holder of certificates theretofore
representing Shares or Preferred Shares for any amount paid to a public official
pursuant to any applicable abandoned property, escheat or similar laws. Upon the
surrender and exchange of a certificate theretofore representing Shares or
Preferred Shares, the holder shall be paid by check, without interest thereon,
the Merger Consideration to which he or she is entitled hereunder, less only
such amount required to be withheld under applicable backup withholding federal
income tax regulations, and such certificate shall forthwith be cancelled. The
Company shall take all steps necessary and appropriate to promptly effect the
conversion of the Preferred Shares upon surrender by the holders thereof to the
Company for conversion. Until so surrendered and exchanged, each such
certificate shall represent solely the right to receive the Merger Consideration
into which the Shares or Preferred Shares it theretofore represented shall have
been converted pursuant to Sections 2.5(a) and (b), without interest, and the
Surviving Corporation shall not be required to pay the holder thereof the Merger
Consideration to which such holder otherwise would be entitled; provided that
--------
customary and appropriate certifications and indemnities allowing for
payment against lost or destroyed certificates shall be permitted. If any
certificates representing any Shares or Preferred Shares shall not have been
surrendered prior to five years after the Effective Time (or immediately prior
to such earlier date on which any payment in respect thereof would otherwise
escheat to or become the property of any governmental unit or agency), the
payment in respect of such certificates shall, to the extent permitted by
applicable law, become the property of the Surviving Corporation, free and clear
of all claims or interest of any person previously entitled thereto .
2.9 Funding of Paying Agent. Purchaser shall transmit by wire, or other
-----------------------
acceptable means, to the Paying Agent prior to the Effective Time funds required
for
- 9 -
<PAGE>
the exchange of all Shares and Preferred Shares and cancellation of all Options
in accordance with this Agreement. The Paying Agent shall agree to hold such
funds in trust and deliver such funds (in the form of checks of the Paying
Agent) in accordance with this Section and Section 2.8. Any portion of such
funds which has not been paid to holders of the Shares, Preferred Shares or
Options pursuant to Section 2.8 within six months after the Effective Time shall
promptly be paid to the party which provided such funds, and thereafter holders
of certificates representing the right to receive the cash into which Shares,
Preferred Shares or Options formerly represented by such certificates shall have
been converted pursuant to Section 2.5(a), 2.5(b) or 2.6 who have not
theretofore complied with Section 2.8 shall look solely to the Surviving
Corporation or the Paying Agent for payment of the amount of cash to which they
are entitled pursuant to this Agreement.
2.10 Taking of Necessary Action; Further Action. Sub, Purchaser and the
------------------------------------------
Company shall use all reasonable efforts to take all such actions as may be
necessary or appropriate in order to effectuate the Offer and the Merger as
promptly as possible. If, at any time after the Effective Time, any further
actions are necessary or desirable to carry out the purposes of this Agreement
or to vest the Surviving Corporation with full right, title and possession to
all assets, property, rights, privileges, immunities, powers and franchises of
either or both of the Constituent Corporations, the officers and directors of
the Surviving Corporation are fully authorized in the name of either or both of
the Constituent Corporations or otherwise to take, and shall take, all such
actions.
2.11 Dissenting Shares. Notwithstanding anything in this Agreement to
-----------------
the contrary, Shares and Preferred Shares that are issued and outstanding
immediately prior to the Effective Time and that are held by stockholders who
(i) have not voted such Shares in favor of the Merger and (ii) have delivered
timely a written demand for appraisal of such Shares in the manner provided in
Section 262 of the Delaware Law shall not be cancelled and converted into the
right to receive the Merger Consideration described in Section 2.5(a) or 2.5(b),
unless and until such holder shall have failed to perfect, or effectively shall
have withdrawn or lost, such holder's right to appraisal and payment under the
Delaware Law. If such holder shall have so failed to perfect, or effectively
shall have withdrawn or lost such right, such holder's Shares or Preferred
Shares
- 10 -
<PAGE>
shall thereupon be deemed to have been cancelled and converted as described in
Sections 2.5(a) and 2.5(b), at the Effective Time, and each Share and Preferred
Share shall represent solely the right to receive the appropriate Merger
Consideration. From and after the Effective Time, no stockholder who has
demanded appraisal rights as provided in Section 262(d) of the Delaware Law
shall be entitled to vote his or her Shares for any purpose or to receive
payment of dividends or other distributions with respect to his or her Shares or
Preferred Shares (except dividends and other distributions payable to
stockholders of record at a date which is prior to the Effective Time). The
Company will give Purchaser prompt notice of all written demands received by the
Company for appraisal of Shares or Preferred Shares.
2.12 Merger Without Meeting of Stockholders. Notwithstanding the
--------------------------------------
foregoing in this Article II, in the event that Purchaser shall acquire at least
90 percent of the shares of each class of stock of the Company the parties
hereto agree to take all necessary and appropriate action, to cause the Merger
to become effective as soon as practicable after the expiration of the Offer
without a meeting of stockholders of the Company in accordance with Section 253
of Delaware Law.
2.13 No Further Ownership Rights in Common or Preferred Stock. From and
--------------------------------------------------------
after the Effective Time, the holders of Shares or Preferred Shares which were
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such Shares or Preferred Shares except as otherwise
provided in this Agreement or by applicable law. All cash paid upon the
surrender of Certificates in accordance with the terms hereof shall be deemed to
have been issued in full satisfaction of all rights pertaining to the Shares or
Preferred Shares.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BHP,
SUB AND PURCHASER
BHP, Sub and Purchaser hereby represent and warrant to the Company as
follows:
3.1 Organization and Qualification. BHP has been duly incorporated and
------------------------------
is validly existing as a corporation and in good standing under the laws of
Victoria, Australia and has the requisite corporate
- 11 -
<PAGE>
power to carry on its business as now conducted. Each of Sub and Purchaser has
been duly incorporated and is validly existing as a corporation and in good
standing under the laws of the State of Delaware and has the requisite corporate
power to carry on its respective business as now conducted.
3.2 Authority Relative to this Agreement. Each of BHP, Sub and
------------------------------------
Purchaser has the requisite corporate power and authority to enter into this
Agreement and to carry out its respective obligations hereunder. The execution
and delivery of this Agreement by BHP, Sub and Purchaser and the consummation by
BHP, Sub and Purchaser of the transactions contemplated hereby have been duly
authorized by the Boards of Directors of BHP, Sub and Purchaser, and no other
corporate proceedings on the part of BHP, Sub or Purchaser are necessary to
authorize this Agreement and the transactions contemplated hereby. This
Agreement has been duly executed and delivered by BHP, Sub and Purchaser and
constitutes a valid and binding obligation of each such company, enforceable in
accordance with its terms, except to the extent that enforceability thereof may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the enforcement of creditors rights
generally or by equitable principles. None of BHP, Sub or Purchaser is subject
to or obligated under any provision of (a) its respective Certificate of
Incorporation (or, in the case of BHP, its Memorandum of Association) or By-Laws
(or, in the case of BHP, its Articles of Association), (b) any contract, (c) any
license, franchise or permit or (d) any law, regulation, order, judgment or
decree, which would be breached or violated by its execution, delivery and
performance of this Agreement and the consummation by it of the transactions
contemplated hereby, other than any such breaches or violations which will not,
individually or in the aggregate, have a material adverse effect on the ability
of BHP, Sub and Purchaser to consummate the transactions contemplated by this
Agreement. Other than in connection with or in compliance with the provisions
of the Delaware Law, Arizona Law (as defined in Section 4.4), the Exchange Act,
the securities or blue-sky laws of the various states of the United States and
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (the "H-S-
R Act"), no authorization, consent or approval of or filing with, any public
body, court or authority is necessary on the part of BHP, Sub or Purchaser for
the consummation by BHP, Sub and Purchaser of the transactions contemplated by
this Agreement, except for such authorizations, consents, approvals and filings
- 12 -
<PAGE>
as to which the failure to obtain or make would not, individually or in the
aggregate, have a material adverse effect on the ability of BHP, Sub or
Purchaser to perform their respective obligations hereunder.
3.3 Financing Arrangements. Purchaser shall have funds available to it
----------------------
on the Expiration Date sufficient to purchase the Shares (including Shares
issuable upon exercise of the Options) and Preferred Shares in accordance with
the terms of this Agreement.
3.4 Ownership of Shares and Preferred Shares. As of the date hereof,
----------------------------------------
none of BHP, Sub, Purchaser or any of their subsidiaries owns (beneficially or
otherwise) any Shares or Preferred Shares (except for Shares or Preferred Shares
that may be held in any of their pension or employee benefit plans).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to BHP, Sub and Purchaser
that:
4.1 Organization and Qualification. The Company has been duly
------------------------------
incorporated and is validly existing as a corporation and in good standing under
the laws of the State of Delaware and has full corporate power and authority to
own its properties and conduct its business as presently owned and conducted.
The Company is duly qualified as a foreign corporation and in good standing in
each jurisdiction in which the character of its properties owned or leased or
the nature of its activities makes such qualification necessary except where the
failure to be so qualified, individually or in the aggregate, would not
reasonably be expected to have a material adverse effect on the business,
property, financial condition or results of operations of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect"). The copies of the
Restated Certificate of Incorporation and By-Laws of the Company previously
delivered to Purchaser are true, correct and complete as of the date hereof.
4.2 Subsidiaries. The Company has listed all subsidiaries required to
------------
be so listed on Exhibit 21 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1994. The Company has listed all of its material
subsidiaries (the "Material Subsidiaries")
- 13 -
<PAGE>
on Schedule 4.2 and each such subsidiary has been duly incorporated and is
validly existing as a corporation and is in good standing in its respective
jurisdictions and has full corporate power and authority to own its properties
and conduct its businesses as presently owned and conducted. Each Material
Subsidiary is duly qualified as a foreign corporation and in good standing in
each jurisdiction in which the character of its properties owned or leased or
the nature of its activities makes such qualification necessary except where the
failure to be so qualified, would not reasonably be expected to have a Material
Adverse Effect. The copies of the Certificate of Incorporation and By-Laws of
each Material Subsidiary previously delivered to Purchaser are true, correct and
complete as of the date hereof.
4.3 Capitalization.
--------------
(a) As of November 28, 1995, the authorized equity capitalization of
the Company consists of 100,000,000 Shares, par value $.01 per share, of which
46,420,534 are outstanding, and 50,000,000 Preferred Shares, par value $.01 per
share, of which 4,000,000 are outstanding (2,000,000 shares of 5 5/8% Series D
and 2,000,000 shares of 6% Series E). Each Series D Preferred Share is
convertible at any time at the option of the holder into Shares at the rate of
3.448 Shares per Series D Preferred Share. Each Series E Preferred Share is
convertible at any time at the option of the holder into Shares at the rate of
3.5945 Shares per Series E Preferred Share. All of the outstanding shares of
the Company's capital stock are validly issued, fully paid and nonassessable.
The aggregate number of outstanding awards of Shares that has been issued
pursuant to the Company's 1987, 1989 and 1993 Stock Option and Stock Award Plans
as of November 30, 1995 is 3,453,844. As of November 30, 1995, the Company has
granted stock awards totalling 54,124 under the 1989 Stock Option Plan and 1992
Restricted Stock Plan for Non-Employee Directors. As of November 28, 1995,
there were also outstanding warrants to acquire 1,263,794 Shares at an exercise
price of $8.50 per share, all of which warrants expired on November 30, 1995
(the "Warrants"). Effective as of December 31, 1995, non-employee directors of
the Company who have deferred retainers under the 1989 Stock Option Plan for
Non-Employee Directors will be issued options pursuant to such plan, and on
January 2, 1996, each Non-Employee director will receive a grant of 1,000 shares
of restricted stock pursuant to the 1992 Restricted Stock Plan for Non-Employee
Directors.
- 14 -
<PAGE>
(b) Except as described in paragraph (a) above or in the Company's
Restated Certificate of Incorporation or the Stock Purchase Agreement, dated as
of November 20, 1988, between WP and the Company, there are no options,
warrants, conversion privileges or other rights, agreements, arrangements or
commitments obligating the Company or any of its subsidiaries to issue or sell
any shares of capital stock of the Company or of any of its subsidiaries or
securities or obligations of any kind convertible into or exchangeable for any
shares of capital stock of the Company or any of its subsidiaries. The holders
of the outstanding Shares and Preferred Shares are not entitled to any
preemptive or other similar rights, except as set forth above. Upon
consummation of the Merger in accordance with the terms of this Agreement,
Purchaser will own the entire equity interest in the Company, and there will be
no options, warrants, conversion privileges or other rights, agreements,
arrangements or commitments obligating the Company or any of its subsidiaries to
issue or sell any shares of capital stock of the Company or any of its
subsidiaries other than such rights, options, warrants, conversion privileges or
other agreements, arrangements or commitments, that are the result of actions
taken or caused to be taken by or on behalf of Purchaser.
4.4 Authority Relative to this Agreement. The Company has the requisite
------------------------------------
corporate power and authority to enter into this Agreement and, subject to
adoption of this Agreement by its stockholders as set forth in Section 6.1, to
perform its obligations hereunder. Assuming the accuracy of Purchaser's
representation as to the ownership of Shares and Preferred Shares, the execution
and delivery of this Agreement by the Company and the consummation by the
Company of the transactions contemplated by this Agreement have been (i) duly
authorized by the Board of Directors of the Company prior to Sub or Purchaser
becoming an "Interested Stockholder" as defined in Section 203 of the Delaware
Law; (ii) approved by two-thirds of the "Continuing Directors" of the Company as
such term is defined in Article VI of the Company's Restated Certificate of
Incorporation; and (iii) approved by a Committee of "Disinterested Directors",
as such term is defined in, and in accordance with, Section 10-1221 of the
Arizona Revised Statutes ("Arizona Law") and, except for adoption of this
Agreement by its stockholders as set forth in Section 6.1, no other corporate
proceedings on the part of the Company are necessary to authorize or consummate
this Agreement and the transactions contemplated hereby. The Board of Directors
of the Company has approved Sub and Purchaser
- 15 -
<PAGE>
and or any other direct or indirect wholly-owned subsidiary of BHP to which BHP
may assign its rights hereunder becoming "Interested Stockholders" as defined in
Section 203 of the Delaware Law pursuant to the terms of this Agreement. This
Agreement has been duly executed and delivered by the Company and constitutes a
valid and binding obligation of the Company, enforceable in accordance with its
terms except to the extent that enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the enforcement of creditors rights' generally or
by equitable principles. Except as set forth on Schedule 4.4, neither the
Company nor any of its subsidiaries is subject to or obligated under any
provision of (a) its certificate or articles of incorporation or by-laws, (b)
any contract, (c) any license, franchise or permit, or (d) any law, regulation,
order, judgment or decree, which would be breached or violated or in respect of
which a right of termination or acceleration or any encumbrance on any of its or
any of its subsidiaries' assets could be created by its execution, delivery and
performance of this Agreement and the consummation by it of the transactions
contemplated hereby, other than any such breaches, violations, rights or
encumbrances which will not, and would not reasonably be expected to
individually or in the aggregate, have a Material Adverse Effect. Other than in
connection with or in compliance with the provisions of the Delaware Law,
Arizona Law, the Exchange Act, the securities or blue-sky laws of the various
states of the United States and the H-S-R Act, and except as set forth in
Schedule 4.4(b), no authorization (other than such Authorizations that are the
subject of Section 4.11), consent or approval of, or filing with, any public
body, court or authority is necessary for the consummation by the Company of the
transactions contemplated by this Agreement.
4.5 Commission Filings. The Company has made available to Purchaser
------------------
copies of the Company's (i) Annual Reports on Form 10-K for the fiscal years
ended December 31, 1993 and 1994, (ii) Quarterly Reports on Form 10-Q for the
quarters ended March 31, June 30, and September 30, 1995, (iii) proxy statements
relating to the Company's meetings of stockholders (whether annual or special)
during the years 1993 through 1995, inclusive, and (iv) filings under the
Securities Act of 1933, as amended (the "Securities Act"), since January 1,
1993, in each case as filed with the Commission. Except as set forth in
Schedule 4.5, since January 1, 1993, the Company has filed all reports,
registration statements
- 16 -
<PAGE>
and other documents required to be filed under the Exchange Act and the rules
and regulations thereunder, and all such reports, registration statements and
other documents complied, in all material respects, with the requirements of the
Exchange Act, such compliance to be determined, to the extent applicable, in
accordance with the standards applied to the Company Reports in the following
two sentences. As of their respective dates, the Company's Annual Report on Form
10-K for 1994, the Company's Quarterly Reports on Form 10-Q in 1995, the
Company's Current Report on Form 8-K with respect to events which occurred in
1995 and the Company's 1995 Proxy Statement (together, the "Company Reports")
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The audited consolidated financial statements and unaudited
consolidated interim financial statements of the Company (including any related
notes and schedules) included in the reports referred to in clauses (i) and (ii)
of the first sentence of this paragraph have been prepared in accordance with
United States generally accepted accounting principles ("GAAP") applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended, subject, in the case of the unaudited consolidated interim financial
statements, to normal year-end adjustments and any other adjustments described
therein, and the fact that the interim financial statements were prepared in
accordance with the rules and regulations of the Commission and, therefore,
certain information required by GAAP may have been omitted. Except as set forth
in Schedule 4.5, or in the Company Reports since December 31, 1994, (i) there
has not been a Material Adverse Effect, (ii) no events have occurred other than
events that affect the general economy or the Company's industry generally which
have had or which reasonably would be expected to have a Material Adverse
Effect, and (iii) except as permitted by this Agreement, there has been (1) no
direct or indirect redemption, purchase or other acquisition of any shares of
the Company's capital stock by the Company or any subsidiary, (2) no
declaration, setting aside or payment of any dividend or other distribution by
the Company in respect of the Company's Common Stock, (3) no issuance of any
shares of capital
- 17 -
<PAGE>
stock of the Company (except in connection with the exercise of Warrants or
Options, grants of restricted stock or conversion of Preferred Shares, each in
accordance with its respective terms), (4) except as permitted by Section 5.1 or
with respect to any grants under the stock option and stock award plans referred
to in Section 4.3, no granting to any person of any option to purchase or other
right to acquire shares of capital stock of the Company, (5) no stock split or
other reclassification of the Company's capital stock, and (6) no change in the
accounting principles as reflected in the first footnote of the audited
financial statements of the Company for the fiscal year ending December 31,
1994.
4.6 Litigation. Schedule 4.6 lists all pending litigation as of
----------
November 30, 1995 to which the Company or any subsidiary is a party which would
reasonably be expected to result in liability in excess of $1,000,000 other than
such matters disclosed in the Company Reports. Except as set forth in Schedule
4.6 or as disclosed in the Company Reports, there are no claims, actions,
proceedings, or investigations pending or, to the knowledge of the Company,
threatened in writing against the Company or any of its subsidiaries or any of
their officers or directors (in their capacity as such) before any court or
governmental or regulatory authority or body which would reasonably be expected
to result in a Material Adverse Effect and neither the Company nor any of its
subsidiaries or any of their officers or directors (in their capacity as such)
are subject to any writs, injunctions or decrees which would reasonably be
expected to result in a Material Adverse Effect.
4.7 Employees and Labor.
-------------------
(a) Except as disclosed in the Company Reports, there is no pending
or, to the knowledge of the Company or any subsidiary, threatened, dispute
between the Company or any subsidiary and their present or past employees other
than such disputes as do not or would not reasonably be expected to result in a
Material Adverse Effect.
(b) Except as disclosed in the Company Reports or set forth in
Schedule 4.7, there are no employment, consulting or severance agreements or
formal written policies between the Company or any of its subsidiaries on the
one hand, and any director, officer or other employee of the Company, on the
other hand, which obligate the Company to pay to any director, officer or
- 18 -
<PAGE>
employee more than $100,000 per annum or $500,000 in the aggregate and which
require more than six months notice for termination.
4.8 Taxes and Tax Returns. The Company and each of its subsidiaries
---------------------
have timely filed all tax returns, declarations and information statements that
it is required to file and has timely paid all taxes shown thereon except to the
extent that such taxes are being contested in good faith. The Company's
consolidated liability for taxes is adequately provided for by reserves. As
used in this Agreement, the term "taxes" includes all taxes of any nature
whatsoever and however denominated, including, without limitation, income,
franchise, sales, gross receipts, occupation, use, severance, real and personal
property, employment, excise, stamp, impost, governmental fees, environmental,
transfer, duties and all other charges, as well as penalties and interest
thereon, imposed by any government or instrumentality, whether federal, state,
local, foreign or other.
4.9 ERISA.
-----
(a) Each "employee benefit plan", as this term is defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), under which the Company or any of its subsidiaries has any present or
future obligations or liability on behalf of its employees or former employees
or their dependents or beneficiaries, other than a "multiemployer plan" as this
term is defined in Section 3(37) of ERISA ("Multiemployer Plan") (the "Plans"),
complies with and has been administered substantially in accordance with all
applicable requirements of ERISA and the Code, except as set forth on Schedule
4.7, and no "reportable event", as defined in section 4043 of ERISA, has
occurred with respect to any Plan for which the 30-day advance notice to the
Pension Benefit Guaranty Corporation (the "PBGC") has not been waived, or with
respect to which the PBGC has not administratively waived the imposition of
penalties for failure to report. There have been no nonexempt "prohibited
transactions", as defined in Section 4975 of the Code or Section 406 of ERISA,
which have resulted, or would reasonably be expected to result in the imposition
of a material excise tax or penalty, or material liability of the Company. No
termination has occurred with respect to any Plan or any "multiemployer plan" as
defined in Section 3(37) of ERISA under which the Company or any of its
subsidiaries has any present or future obligations or liability on
- 19 -
<PAGE>
behalf of present or former employees or their dependents or beneficiaries under
circumstances which present a material risk of liability to the Company which
would reasonably be expected to result in a Material Adverse Effect.
(b) All material contributions, premiums or other payments due from
the Company or a subsidiary to (or under) any Plan and any Multiemployer Plan
have been fully paid or adequately provided for on the books and financial
statements of the Company and its subsidiaries. All accruals relating to the
Plans (including, where appropriate, proportional accruals for partial periods)
have been made in accordance with prior practices. No Plan subject to Section
412 of the Code has any accumulated funding deficiency, as defined in Section
412(a) of the Code. No lien described in section 412 of the Code has attached
to the property of the Company or a subsidiary.
4.10 Stockholder Vote Required. Under the Delaware Law and the
-------------------------
Company's Restated Certificate of Incorporation and By-Laws, the Company's
stockholders are required to adopt this Agreement in accordance with the terms
of this Agreement by the affirmative vote of the holders of a majority of the
outstanding Shares at a meeting called for such purpose, unless the conditions
of Section 253 of the Delaware Law are met for actions without a vote of
shareholders.
4.11 Compliance with Laws. Except as set forth in Schedule 4.6, the
--------------------
Company and its subsidiaries are in compliance in all material respects with all
laws, regulations, rules, orders, policies, guidelines and other requirements of
all governmental authorities applicable to their businesses except where the
failure to do so would not individually or in the aggregate be reasonably be
expected to have a Material Adverse Effect. The Company and its subsidiaries
each hold or have filed in a timely manner applications or renewals for all
permits, licenses, certificates, grants or other authorizations of foreign,
federal, state and local governmental agencies (being collectively referred to
herein as "Authorizations") required for the conduct of its business as now
conducted, and are in compliance with all provisions and conditions thereof,
except for those Authorizations or any such noncompliance which individually or
in the aggregate would not reasonably be expected to have a material adverse
effect on the value of the relevant Principal Property (as such term is defined
in Section
- 20 -
<PAGE>
4.12). Such Authorizations constitute all Authorizations required to permit the
Company and its subsidiaries to operate the businesses of the Principal
Properties or conduct its business in all material respects in the manner so
conducted from and after the Effective Time. To the knowledge of the Company,
there is no reasonable ground to believe that (i) any of the foregoing
Authorizations will not, in the ordinary course, be renewable upon their
expiration; and (ii) any Authorization required for the Planned Developments and
the Planned Expansions (as such terms are defined in Section 4.12) will not, in
the ordinary course, be obtained. Anything in this Section 4.11 notwithstanding,
it is understood and agreed that the foregoing shall not be deemed inaccurate by
reason of the ordinary expiration of Authorizations, the renewal of which is
expected to be obtained in the ordinary course without material expense or
material interruption of existing operations.
4.12 Properties; Reserves; Water Rights.
----------------------------------
(a) For purposes of this Agreement (1) "Operating Properties" means
the San Manuel smelter refinery and rod mill real property, the real property
managed by the San Manuel Mining Division, the real property managed by the
Pinto Valley Mining Division, the real property managed by the Superior Mining
Division and the real property managed by Magma Tintaya S.A., all as referred to
in the Company Reports; (2) "Development Properties" means the real property of
the Robinson Mining Limited Partnership and the real property of the Florence
Project, both as referred to in the Company Reports; (3) "Principal Properties"
means all of the properties listed in clauses (1) and (2) above; (4) "Planned
Developments" means the planned development and operation of the Development
Properties, as described in the Company Reports; (5) "Planned Expansions" means
the planned expansion and operation of Kalamazoo, Pinto Valley 7 & 8 Slice,
Miami Expansion and Tintaya, all as described in the Company Reports; and (6)
each reference to real property includes the improvements thereon and also
includes all rights to minerals thereon.
(b) The Company Reports contain a materially accurate description of
the Company's Principal Properties and its ore reserves and mineralized rock.
Subject to the assumptions described in the Company Reports, the ore reserves
and mineralized rock were estimated in all material respects in accordance with
Guide 7 promulgated by the Commission.
- 21 -
<PAGE>
(c) Schedule 4.12 sets forth the general location and size of each of
the Principal Properties. Except as set forth in Schedule 4.12, the Company and
its subsidiaries, as applicable, hold rights to or interests in each of the
Principal Properties, either in fee simple, under valid, subsisting and
enforceable leases, or through patented or unpatented mining claims, contracts
or concessions (or, where applicable, applications for renewals thereof), as the
case may be, together with any easements, rights-of-way or other surface access
rights, necessary (i) for the current operation of each of the Operating
Properties, (ii) for each of the Planned Developments and (iii) for the Planned
Expansions, except for any rights or interests the absence of which would not be
reasonably expected to result in a material adverse effect on the value of the
applicable property. Except as set forth in Schedule 4.12, the rights of or
interests to each of the Principal Properties provide the holder with the right
to extract copper-bearing and related minerals therefrom and such rights or
interests are either unlimited in duration, or in the case of leases, contracts
or concessions, have a duration (including renewals or extensions thereof held
of right) of not less than fifteen years from the date hereof (except (i) in the
case of unpatented mining claims in the United States and (ii) foreign mining
and related concessions in Peru, both of which are of an indefinite duration;
provided that requisite fees are paid and work requirements are met). Except as
- --------
set forth in Schedule 4.12, each Principal Property is held free and clear of
(i) all royalties or other payments to third parties with respect to production,
and (ii) all liens and encumbrances, except for royalties, liens and
encumbrances which do not materially detract from the value of such property or
materially interfere with the current operation of such property, with the
Planned Developments or with the Planned Expansions.
(d) Except as disclosed in the Company Reports or set forth in
Schedule 4.12, the Company and its subsidiaries possess all water rights
necessary to support the current operation of each of the Operating Properties
and to support the Planned Developments and the Planned Expansions, except for
any such rights the absence of which would not be reasonably expected to result
in a material adverse effect on the applicable property, development or
expansion.
- 22 -
<PAGE>
4.13 Environmental Matters.
---------------------
(a) The Company and its subsidiaries are in compliance with all
applicable Environmental Laws, except as otherwise disclosed in the Company
Reports and except for noncompliance, which individually or in the aggregate,
would not reasonably be expected to result in a Material Adverse Effect.
(b) Except as disclosed in the Company Reports or as set forth in
Schedule 4.13, to the knowledge of the Company, during the period of ownership
or operation by the Company and its subsidiaries or any predecessors thereof of
any of their respective current or previously owned, operated or leased
properties, there have been no Releases of Hazardous Material in, on, under or
affecting such properties or any surrounding site and neither the Company nor
any of its subsidiaries has disposed of any Hazardous Material or any substance
in a manner that has led, or would reasonably be anticipated to lead, to a
Release except as otherwise disclosed in the Company Reports and except in each
case for those which individually or in the aggregate would not reasonably be
expected to result in a Material Adverse Effect, and except for Releases made in
compliance with Environmental Laws. Except as disclosed in the Company Reports
or in Schedule 4.13, neither the Company nor any of its subsidiaries or any
predecessors thereof has received any notice that it is a "potentially
responsible party" under any Environmental Law, except for any notice the basis
of which has been determined and the Company's liability, if any, has been paid
or provided for in the financial statements included as part of the Company
Reports.
(c) For purposes of this Agreement:
(1) "Environmental Law" means any applicable law regulating or
prohibiting Releases into any part of the environment, or pertaining to the
protection of natural resources, the environment and public and employee health
and safety including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA") (42 U.S.C. (S) 9601 et
--
seq.), the Hazardous Materials Transportation Act (49 U.S.C. (S) 1801 et seq.),
- --- -- ---
the Resource Conservation and Recovery Act (42 U.S.C. (S) 6901 et seq.), the
-- ---
Clean Water Act (33 U.S.C. (S) 1251 et seq.), the Clean Air Act (42 U.S.C. (S)
-- ---
7401 et seq.), the Toxic Substances Control Act (15 U.S.C. (S) 7401 et seq.),
-- --- -- ---
the Emergency Planning and Community Right-to-Know Act (42 U.S.C. (S) 11001 et
--
seq.,
- ---
- 23 -
<PAGE>
the Oil Pollution Act (33 U.S.C. (S) 2701 et seq.), the Safe Drinking
-- ---
Water Act (42 U.S.C. (S) 300 (et seq.), the Federal Insecticide, Fungicide, and
-- ---
Rodenticide Act (7 U.S.C. (S) 136 et seq.), and the Occupational Safety and
-- ---
Health Act (29 U.S.C. (S) 651 et seq.) ("OSHA") and the regulations promulgated
-- ---
pursuant thereto, and any such applicable state or local statutes, and the
regulations and guidelines promulgated pursuant thereto, as such laws have been
amended or supplemented through the Effective Time;
(2) "Hazardous Material" means any substance, pollutant, material or
waste which is regulated by Environmental Law, including, without limitation,
coal tar, asbestos, polychlorinated biphenyls, petroleum, and any material or
substance which is defined as a "hazardous waste," "hazardous material,"
"hazardous substance," "hazardous air pollutant," "extremely hazardous
substance" or "restricted hazardous waste," "contaminant," "pollutant," "toxic
waste" or "toxic substance" under any provision of Environmental Law; and
(3) "Release" means any release, spill, effluent, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching, or
migration in or into the indoor or outdoor environment (whether on site or off
site), or in, into or out of any property owned, operated or leased by the
applicable party or its Subsidiaries or predecessors thereof.
4.14 License Agreements. Except as disclosed in the Company Reports or
------------------
as set forth in Schedule 4.14, neither the Company nor any subsidiary is bound
by any licensing or similar agreement which (i) provides for the use by the
Company or its subsidiary of any technology or related proprietary information
relating to mining, mineral processing or conversion into copper products of a
third party, (ii) provides for the use by a third party of any material
technology or related proprietary information of the Company or any of its
subsidiaries, or (iii) materially restricts the scope of operations conducted by
the Company or any subsidiary or affiliate.
4.15 Insurance. Schedule 4.15 lists all material insurance policies the
---------
Company and its subsidiaries maintain with respect to their business and/or
assets. All such insurance policies are in full force and effect
- 24 -
<PAGE>
and, to the Company's knowledge, are not currently terminable, and the
consummation of the transactions contemplated by this Agreement would not be
expected to give rise to a right of termination, on the part of the insurance
carriers, other than those policies the absence or termination of which would
not reasonably be expected to have a Material Adverse Effect. In the judgment of
the Company, such policies, with respect to their amounts and types of coverage,
are adequate to insure against risks to which the Company and its subsidiaries
are normally exposed, or to which they reasonably could be expected to be
exposed, in the operation of their business.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
5.1 Conduct of Business by the Company Pending the Merger. The Company
-----------------------------------------------------
covenants and agrees that, prior to the Effective Time, unless Purchaser shall
otherwise agree in writing or as otherwise expressly contemplated or permitted
by this Agreement (including Schedule 5.1):
(a) the businesses and affairs of the Company and its subsidiaries
shall be conducted only in the ordinary course of business and consistent with
past practice;
(b) except as set forth in Schedule 5.1 and except in connection with
the adoption by the Company of a shareholder rights plan that would not be
applicable to, or adversely affect the transactions contemplated hereby among
the parties to this Agreement, neither the Company nor any of its subsidiaries
shall: (i) issue (except pursuant to (i) employee and non-employee director
stock options outstanding on the date hereof (ii) upon the conversion of the
Preferred Shares or (iii) upon the exercise of Warrants, each of (i), (ii) and
(iii) in accordance with its terms), sell, pledge, dispose of or encumber (or
permit any of its subsidiaries to issue, sell, pledge, dispose of or encumber):
(A) any additional shares of, or any options, warrants, conversion privileges or
rights of any kind to acquire any shares of, any capital stock of the Company or
any of its subsidiaries, or (B) any material assets of the Company or any of its
subsidiaries except in the ordinary course of business; (ii) amend or propose to
amend the certificate or articles of incorporation or bylaws or
- 25 -
<PAGE>
similar governing instruments of the Company or any of its subsidiaries; (iii)
split, combine or reclassify any outstanding Shares, or declare, set aside or
pay any dividend or other distribution, payable in cash, stock, property or
otherwise with respect to the Shares and Preferred Shares (other than regular
quarterly dividends on the Preferred Shares); (iv) redeem, purchase or acquire,
or offer to acquire (or permit any of its subsidiaries to redeem, purchase or
acquire or offer to acquire) any Shares or other securities of the Company
(other than Warrants); or (v) enter into or modify any contract, agreement,
commitment or arrangement with respect to any of the matters set forth in this
Section 5.1(b);
(c) neither the Company nor any of its subsidiaries shall (i) acquire
(by merger, consolidation, acquisition of stock or assets or otherwise) any
corporation, partnership or other business organization or division or material
assets thereof for aggregate consideration in excess of $10,000,000; (ii) incur
any indebtedness for borrowed money or issue any debt securities except the
borrowing of working capital in the ordinary course of business and consistent
with past practice; or (iii) enter into or materially modify any contract,
agreement, commitment or arrangement with respect to any of the foregoing;
(d) except as set forth in Schedule 5.1, neither the Company nor any
of its subsidiaries shall enter into or modify any employment, severance or
similar agreements or arrangements with, or grant any bonuses, salary increases,
severance or termination pay to, any officers, directors or employees;
(e) except as set forth in Schedule 5.1, neither the Company nor any
of its subsidiaries shall adopt or amend any bonus, profit sharing,
compensation, stock option, pension, retirement, deferred compensation,
employment or other employee benefit plan, agreement, trust, fund or arrangement
for the benefit or welfare of any officer, director or employee, other than (i)
in the ordinary course of business consistent with past practice for the benefit
or welfare of any employee, (ii) for the purpose of accelerating the vesting of
restricted stock that was granted on or before November 25, 1995 or (iii) to the
extent required by law;
(f) the Company shall use reasonable efforts (i) to cause its current
insurance (or reinsurance) policies not to be cancelled or terminated; and
- 26 -
<PAGE>
(ii) to not permit any of the coverage thereunder to lapse, in any such case
unless prior to or promptly after such termination, cancellation or lapse,
replacement policies underwritten by insurance and reinsurance companies of
nationally recognized standing and with Best ratings no less favorable than
those of the insurance company providing the coverage which is being replaced
are obtained;
(g) the Company (i) shall use reasonable efforts, and cause each of
its subsidiaries to use reasonable efforts, to keep intact their respective
business organizations and good will, keep available the services of their
officers and employees as a group and maintain satisfactory relationships with
suppliers and customers and others having business relationships with them.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Action of Stockholders. If required by law to approve the Merger,
----------------------
the Company shall take all action necessary in accordance with the Delaware Law
and its Restated Certificate of Incorporation and By-Laws to convene a meeting
of its stockholders promptly after the Expiration Date to consider and vote upon
this Agreement. If a meeting of the Company's stockholders is to be called, the
Company shall, if and to the extent requested by Purchaser, use all reasonable
efforts to solicit from stockholders of the Company proxies in favor of the
adoption of this Agreement and shall take all other action reasonably necessary,
or which otherwise may be reasonably requested by Purchaser, to secure a vote of
stockholders in favor of adoption of this Agreement, subject to the exercise of
fiduciary duties by the Board of Directors under applicable law. At any such
meeting, Purchaser shall vote or cause to be voted all of the Shares then owned
by Purchaser or its subsidiaries in favor of adoption of this Agreement and the
Company shall vote or cause to be voted all Shares with respect to which proxies
in the form distributed by the Company have been given, and not voted against
the adoption of this Agreement, in favor of adoption of this Agreement.
6.2 Proxy Statement. If necessary, the Company shall file with the
---------------
Commission under the Exchange Act, and shall use all reasonable efforts to have
processed
- 27 -
<PAGE>
to completion by the Commission, in each case at the earliest practicable date,
a proxy statement or information statement, as Purchaser shall designate (the
"Proxy Statement"), with respect to the adoption by the Company's stockholders
of this Agreement in form and substance reasonably satisfactory to Purchaser and
its counsel. The information provided by Purchaser and the Company,
respectively, for use in the Proxy Statement, the Schedule 14D-9 and the
Schedule 14D-1 shall be true and correct in all material respects and shall not
omit to state any material fact necessary in order to make such information and
the Proxy Statement, the Schedule 14D-1 and the Schedule 14D-9 not misleading as
of the date of the Proxy Statement, the Schedule 14D-1 and the Schedule 14D-9,
as appropriate. The Proxy Statement shall, subject to the exercise of fiduciary
duties by the Board of Directors under applicable law, contain the determination
and recommendation of the Board of Directors of the Company referred to in
Section 1.2. If no meeting of stockholders is required to approve the adoption
of this Agreement, the Company shall, promptly after the Expiration Date, take
all actions required in connection with the consummation of the Merger pursuant
to Section 253 of the Delaware Law.
6.3 Expenses. All costs and expenses incurred in connection with the
--------
Offer, this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such expenses, except as set forth in Section 8.3.
6.4 Additional Agreements. Subject to the conditions herein provided,
---------------------
each of the parties hereto agrees to use all reasonable efforts to take, or
cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by the Offer and this Agreement,
including, without limitation, cooperating with Sub and Purchaser, using
reasonable efforts to obtain all necessary waivers, consents and approvals and
effecting all necessary registrations and filings, including, without
limitation, submissions of information requested by governmental authorities.
6.5 Limitation on Negotiations.
--------------------------
(a) From the date hereof until the termination hereof, the Company and
its subsidiaries will not,
- 28 -
<PAGE>
directly or indirectly, make, solicit, initiate or encourage submission of
proposals or offers from any persons (including any of its officers or
employees) relating to an Acquisition Proposal. As used herein, the term
"Acquisition Proposal" means any proposal or offer involving a liquidation,
dissolution, recapitalization, merger, consolidation or acquisition or purchase
of all or substantially all of the assets of, or equity interest in, the Company
or other similar transaction or business combination involving the Company or
its subsidiaries.
(b) Subject to the fiduciary duty of the Board of Directors, the
Company shall:
(i) immediately cease and cause to be terminated all discussions or
negotiations with third parties with respect to any Acquisition Proposal, if
any, existing on the date hereof; and
(ii) promptly notify Purchaser after receipt of any bona fide
Acquisition Proposal or any inquiry from any person relating to an Acquisition
Proposal and promptly provide Purchaser with a reasonable summary of the
financial and other material terms of such Acquisition Proposal.
(c) To the extent that the Board of Directors of the Company shall
conclude, acting in good faith, after receiving advice from outside counsel or
its financial advisor, that the following action is necessary or appropriate in
order for the Board of Directors to act in a manner which is consistent with its
fiduciary duties under applicable law, the Company may:
(i) furnish or cause to be furnished information concerning the
Company and its businesses, properties or assets to a third party;
(ii) engage in discussions or negotiations with a third party
concerning an Acquisition Proposal initiated by such third party;
(iii) following receipt of an Acquisition Proposal, take and disclose
to its stockholders a position contemplated by Rule 14e-2(a) under the Exchange
Act or otherwise make disclosure to the Company's stockholders; and
- 29 -
<PAGE>
(iv) following receipt of an Acquisition Proposal, (1) through its
the Board of Directors, withdraw, modify or amend its recommendation referred to
in Section 1.2, and/or (2) enter into an agreement providing for the
consummation of such Acquisition Proposal.
(d) The Company will direct its financial and other advisors and
representatives to comply with each of the covenants contained in this Section
6.5.
6.6 Notification of Certain Matters. Each party shall give prompt
-------------------------------
notice to the others of (i) the occurrence or failure to occur of any event,
which occurrence or failure would cause or may cause any representation or
warranty on its part contained in this Agreement to be untrue or inaccurate in
any material respect; and (ii) any failure of such party, or any officer,
director, employee or agent thereof, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder.
6.7 Access to Information. From the date hereof to the Effective Time,
---------------------
the Company shall, and shall cause its subsidiaries, officers, directors,
employees and agents to, afford the officers, employees and agents of Purchaser
reasonable access at all reasonable times to its officers, employees, agents,
premises, books and records, and properties (including Principal Properties) and
shall furnish Purchaser all financial, operating, personal, compensation, tax
and other data and information, Purchaser, through its officers, employees or
agents, may reasonably request.
6.8 Stockholder Claims. The Company shall not settle or compromise any
------------------
claim brought by any present, former or purported holder of any securities of
the Company in connection with the Offer or the Merger prior to the Effective
Time, without the prior written consent of Purchaser, which consent may not be
unreasonably withheld, and shall notify Purchaser promptly upon receipt of all
written demands for appraisal rights. None of the parties to this Agreement
shall take any action to deprive any employee or director of the Company of the
benefits of (i) the consideration payable with respect to Options in accordance
with Section 2.6 or (ii) restricted stock grants under the Company's 1992
Restricted Stock Plan For Non-Employee Directors.
6.9 Treatment of Employee Compensation and Benefits. The Company and
-----------------------------------------------
Purchaser agree that the
- 30 -
<PAGE>
employer-provided benefits for nonunion employees under the Company's employee
benefit plans listed on Schedule 6.9 as in effect as of the Effective Time
(other than any feature of any such plan that relates to the Shares or the
Preferred Shares) shall not be reduced after the Effective Time (except to the
extent consistent with the terms of this Agreement and except to the extent
necessary to comply with applicable law) at least until the second anniversary
of the Effective Time. The Company's cash-based Long-Term Incentive Plan will
continue for one additional three-year cycle beginning January 1, 1996, with
performance measures appropriate to the business plan of the Surviving
Corporation. Purchaser affirms that its intent is to provide during the two-year
period following the Effective Time overall compensation and benefits for
persons serving on the Company's Executive Committee as of the date of this
Agreement which are competitive with those provided by the Company's
competitors.
6.10 Indemnification Rights.
----------------------
(a) From and after the Effective Time, to the extent not covered by
the insurance set forth in the next succeeding sentence, Purchaser shall
indemnify, defend and hold harmless the officers, directors and employees of the
Company or any of its subsidiaries against all losses, expenses, claims, damages
or liabilities arising out of claims brought or made by third parties,
including, without limitation, derivative claims, in connection with the
transactions contemplated by this Agreement to the fullest extent permitted or
required under applicable law and shall advance expenses prior to the final
disposition of such claims and liabilities to which this sentence applies.
Purchaser agrees that all rights to indemnification now existing in favor of the
directors, officers or employees of the Company or any of its subsidiaries
(including, without limitation, any person who was or becomes a director,
officer or employee prior to the Effective Time (the "Indemnified Parties"))
under the Delaware Law or as provided in the Company's Restated Certificate of
Incorporation or by By-Laws with respect to matters occurring on or prior to the
Effective Time shall survive the Merger and shall continue in full force and
effect for a period of not less than six years after the Effective Time (or, in
the case of claims or other matters occurring on or prior to the expiration of
such six year period which have not been resolved prior to the expiration of
such six year period, until such matters are finally resolved) and Purchaser
shall honor, and shall
- 31 -
<PAGE>
cause the Company to honor, all such rights. Purchaser shall cause to be
maintained in effect for not less than six years from the Effective Time the
current policies of the directors' and officers' liability insurance maintained
by the Company (provided that Purchaser may substitute therefor policies of at
--------
least the same coverage containing terms and conditions which are no less
advantageous) with respect to matters occurring on or prior to the Effective
Time; provided that in no event shall Purchaser or the Company be required to
--------
expend annually more than 150% of the amount that the Company spent for these
purposes in the last fiscal year to maintain or procure insurance coverage
pursuant hereto; and provided further that if Purchaser or the Company are
-------- -------
unable to obtain the insurance called for by this section Purchaser or the
Company will obtain as much comparable insurance as is available for such amount
per year.
(b) Without limiting the foregoing, in the event any claim, action,
suit, proceeding or investigation to which the provisions of this Section 6.10
are applicable is brought against any Indemnified Party (whether arising before
or after the Effective Time), (i) any counsel retained by the Indemnified
Parties for any period after the Effective Time shall be subject to the approval
of the Surviving Corporation (such approval to not be unreasonably withheld);
(ii) after the Effective Time, the Surviving Corporation shall pay all
reasonable fees and expenses of such counsel for the Indemnified Parties
promptly as statements therefor are received; and (iii) after the Effective
Time, the Surviving Corporation will use reasonable efforts to assist in the
vigorous defense of any such matter, provided that the Surviving Corporation
shall not be liable for any settlement of any claim effected without its written
consent, which consent, however, shall not be unreasonably withheld. Any
Indemnified Party wishing to claim indemnification under this Section 6.10, upon
learning of any such claim, action, suit, proceeding or investigation, shall
notify the Surviving Corporation (but the failure so to notify the Surviving
Corporation shall not relieve it from any liability which it may have under this
Section 6.10 except to the extent such failure materially prejudices the
Surviving Corporation). The Surviving Corporation shall be liable for the fees
and expenses hereunder with respect to only one law firm, in addition to local
counsel in each applicable jurisdiction, to represent the Indemnified Parties as
a group with respect to each such matter unless there is, under applicable
standards of professional conduct, a conflict
- 32 -
<PAGE>
between the positions of any two or more Indemnified Parties that would preclude
or render inadvisable joint or multiple representation of such parties.
6.11 BHP Guarantee. BHP unconditionally and irrevocably guarantees to
-------------
the Company the due, prompt and faithful performance of, and compliance with,
all agreements and obligations of Purchaser and Sub in this Agreement.
ARTICLE VII
CONDITIONS
7.1 Conditions to Obligations of Each Party to Effect the Merger. The
------------------------------------------------------------
respective obligations of each party to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Time of the following conditions:
(a) the Offer shall have been consummated in accordance with its
terms; provided, however, that this condition shall be deemed to be satisfied if
-------- -------
Purchaser fails to accept for payment and pay for Shares and Preferred Shares
pursuant to the Offer other than as a result of a failure of a condition
thereof;
(b) the waiting period applicable to the consummation of the Merger
under the H-S-R Act shall have expired or been terminated;
(c) there shall have been no law, statute, rule or regulation,
domestic or foreign, enacted or promulgated which is in effect and has the
effect of making the acquisition of Shares illegal or otherwise prohibits
consummation of the Merger; and
(d) there shall not be in effect any preliminary or final injunction
or temporary restraining order or other order or decree issued by any foreign or
United States federal or state court or foreign or United States federal or
administrative agency or authority, enjoining, restraining or otherwise
prohibiting the Offer, the Merger or the acquisition by Purchaser of Shares and
Preferred Shares.
- 33 -
<PAGE>
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated at any time prior to
-----------
the Effective Time, whether prior to or after approval by the stockholders of
the Company:
(a) by written mutual consent of Purchaser and the Company;
(b) by either Purchaser or the Company:
(i) if the Offer shall not have been consummated by May 31,
1996; or
(ii) at any time after June 30, 1996, if the conditions set forth in
Section 7.1 shall not have been satisfied or waived; or
(c) by Purchaser:
(i) if (1) the Board of Directors of the Company shall have failed to
recommend, or shall have withdrawn, its approval or recommendation of the Offer
or the Merger or shall have resolved to do any of the foregoing; or (2) if the
Company shall have entered into a definitive agreement to accept an Acquisition
Proposal;
(ii) if the Board of Directors of the Company shall have modified its
approval of the Offer or the Merger in a manner adverse to Purchaser and the
Minimum Condition shall not have been met on the Expiration Date;
(iii) if as a result of the failure of any conditions set forth in
Annex I hereto the Offer shall have terminated or expired without Purchaser or a
subsidiary of BHP having purchased any Shares thereunder; or
(d) by the Company, if the Company withdraws its recommendation of
the Offer or the Merger pursuant to in Section 6.5(c)(iv)(1), or takes the
actions described in Section 6.5(c)(iv)(2), and such action is taken pursuant
to, and in compliance with, such provision;
- 34 -
<PAGE>
Notwithstanding the above, neither the Company nor Purchaser shall be permitted
to terminate this Agreement if the event which gave rise to such termination
right is a result of or arose in connection with any action or inaction of the
party seeking to terminate taken or not taken in breach of the terms hereof.
8.2 Amendment. Subject to applicable law, this Agreement may be amended
---------
by an instrument signed by each of the parties hereto before or after approval
of the Merger by the stockholders of the Company, if required; provided,
--------
however, that after approval of the Merger by the stockholders of the Company,
- -------
no amendment may be made which decreases the amount of the Merger Consideration
or effects any change which would materially and adversely affect the
stockholders of the Company without the further approval of the stockholders of
the Company.
8.3 Fees Upon Termination. The Company agrees that if this Agreement is
---------------------
terminated pursuant to:
(a) Section 8.1(b)(ii) and at the time of such termination any
person, entity or group (as defined in Section 13(d)(3) of the Exchange Act)
(other than Sub or Purchaser) shall have become the beneficial owner of more
than 20% of the outstanding Shares (with appropriate adjustments for
reclassifications of capital stock, stock dividends, stock splits, reverse stock
splits and similar events) and such person, entity or group (or any subsidiary
of such person, entity or group) thereafter shall enter into a definitive
agreement with the Company to accept an Acquisition Proposal at any time on or
prior to the date which is six months after the termination of this Agreement
and such transaction is thereafter consummated;
(b) Sections 8.1(c)(i) or Section 8.1(d);
(c) Section 8.1(c)(ii) and at the time of termination of this
Agreement, the Tender Agreement shall have expired in accordance with Section 2
thereof and the Company shall enter into a definitive agreement to accept an
Acquisition Proposal at any time on or prior to the date which is six months
after the termination of this Agreement; or
(d) Section 8.1(c)(iii) and such failure was the result of any action
taken by or on behalf of the Company giving rise to an Event specified in
paragraph (a), (b), (c), (d), (f), (g) or (i) of Annex I and such action was in
breach of the Company's obligations
- 35 -
<PAGE>
hereunder, and with respect to an Event specified in paragraph (g), if such
action was taken by the Company for the purpose of causing Purchaser to
terminate this Agreement;
then the Company shall pay to Purchaser the sum of $40 million. Such payment
shall be made as promptly as practicable but in no event later than (i) in the
case of paragraphs (b) and (d) of this Section, two business days following
termination of this Agreement, (ii) in the case of paragraph (a) of this
Section, upon consummation of such Acquisition Proposal, and (iii) in the case
of paragraph (c) of this Section, upon entering into a definitive agreement to
accept such Acquisition Proposal. Each such payment shall be made by wire
transfer of immediately available funds to an account designated by Purchaser
without set-off or deduction.
8.4 Effect of Termination.
---------------------
(a) The provisions of Sections 6.3 (expenses), 6.7 (return of
information upon termination), 6.10 (indemnification) and 8.3 (termination fees)
shall survive the termination of this Agreement.
(b) The rights of termination provided for in Section 8.1 shall not
be an exclusive remedy hereunder but shall be in addition to any other legal or
equitable remedies that may be available to any non-defaulting party hereto
arising out of any default hereunder by any other party hereto; provided,
--------
however, that in the event that the amount set forth in Section 8.3 shall have
- -------
been paid to Purchaser, this Agreement shall forthwith become void and there
shall be no liability on the part of either the Company or its respective
officers or directors, except for a willful and intentional breach of any
representation, warranty, covenant or agreement contained herein.
8.5 Waiver. At any time prior to the Effective Time, any party hereto
------
may (i) extend the time for the performance of any of the obligations or other
acts of any other party hereto or (ii) waive compliance with any of the
agreements of any other party or with any conditions to its own obligations, in
each case only to the extent such obligations, agreements and conditions are
intended for its benefit.
- 36 -
<PAGE>
ARTICLE IX
GENERAL PROVISIONS
9.1 Brokers. The Company represents and warrants that no broker, finder
-------
or investment banker is entitled to any brokerage, finder's or other fee or
commission, or to the reimbursement of any of its expenses, in connection with
the Offer or the Merger or any similar transaction based upon arrangements made
by or on behalf of the Company, except for the arrangements between the Company
and Goldman, Sachs & Co.
9.2 Public Statements. Except as required by applicable law or stock
-----------------
exchange regulation, none of BHP, Sub or Purchaser, on the one hand, or the
Company, on the other hand, shall make any public announcement or statement with
respect to the Offer, the Merger or this Agreement without the approval of the
Company or Purchaser, respectively, which approval shall not be unreasonably
withheld. Moreover, the parties hereto agree to consult with each other prior
to issuing each public announcement or statement with respect to the Offer, the
Merger or this Agreement.
9.3 Notices. All notices and other communications hereunder shall be
-------
given by telephone and immediately confirmed in writing and shall be deemed
given if delivered personally or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to BHP, Sub or Purchaser:
The Broken Hill Proprietary
Company Limited
BHP Tower
600 Bourke Street
Melbourne, Victoria
3000, Australia
Attention: Company Secretary
With copies to:
Arnold & Porter
399 Park Avenue
New York, New York 10022
Attention: Joseph Handros, Esq.
- 37 -
<PAGE>
(b) if to the Company:
Magma Copper Company
7400 N. Oracle Road
Suite 200
Tucson, Arizona 85704
Attention: Chairman of the Board
with copies to:
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, NY 10022-4677
Attention: Jack H. Nusbaum, Esq.
9.4 Interpretation. When a reference is made in this Agreement to a
--------------
subsidiary of BHP or the Company, the word "subsidiary" means any "majority-
owned subsidiary" (as defined in Rule 12b-2 promulgated under the Exchange Act)
of BHP or the Company, as the case may be; provided, however, that the Company
-------- -------
shall in no event and at no time be considered a subsidiary of Purchaser for
purposes of this Agreement. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. References to Sections and Articles refer to
sections and articles of this Agreement unless otherwise stated.
9.5 Severability. If any term, provision, covenant or restriction of
------------
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants, and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated and the parties shall negotiate
in good faith to modify the Agreement to preserve, to the extent legally
permitted, each party's anticipated benefits and obligations under this
Agreement.
9.6 Miscellaneous. This Agreement and the Confidentiality Agreement
-------------
constitute the entire agreement, and supersede all other prior agreements and
undertakings, both written and oral, among the parties with respect to the
subject matter hereof. This Agreement (i) is not intended to confer upon any
other person any rights or remedies hereunder, except as set forth in Section
9.9; and (ii) shall not be assigned by operation of law or otherwise, except
that BHP, Sub and Purchaser
- 38 -
<PAGE>
may assign all or any portion of their rights under this Agreement to any of
their subsidiaries (provided, however, that in the event of any such assignment,
-------- -------
BHP shall cause such assignee to execute and become a party to this agreement
and such assignee shall be vested with all the rights and obligations assigned
to it by the assignor as if it were named in this Agreement), but no such
assignment shall relieve BHP, Sub or Purchaser, as applicable, of their
obligations hereunder, and except that this Agreement may be assigned by
operation of law to any corporation with or into which Purchaser may be merged;
(d) shall be governed in all respects, including validity, interpretation and
-
effect, by the internal laws of the State of Delaware, without giving effect to
the principles of conflict of laws thereof; and (e) the parties hereto expressly
consent to the personal jurisdiction of the courts of the United States of
America and of the courts of the State of Delaware, in each case sitting in the
State of Delaware.
9.7 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall constitute an original, but together shall be
construed as one document.
9.8 Survival. The representations, warranties, covenants and agreements
--------
of the parties set forth herein shall terminate as of the Effective Time,
except as provided in Sections 6.9 and 6.10.
9.9 Third Party Beneficiaries. The parties entitled to the employee
-------------------------
benefits pursuant to the terms of Section 6.9 and indemnification pursuant to
the terms of Section 6.10 are expressly made third party beneficiaries solely of
Section 6.9 and Section 6.10, respectively, of this Agreement.
- 39 -
<PAGE>
IN WITNESS WHEREOF, BHP, Sub, Purchaser and the Company have caused this
Agreement to be executed on the date first written above by their respective
officers thereunder duly authorized.
THE BROKEN HILL PROPRIETARY
COMPANY LIMITED
By: /s/ Graeme W. McGregor
______________________
Name: Graeme W. McGregor
Title: Executive General Manager
BHP HOLDINGS (USA) INC.
By: /s/ T. R. Dankmeyer
_____________________
Name: T. R. Dankmeyer
Title: Vice President
BHP SUB INC.
By: /s/ T. R. Dankmeyer
_____________________
Name: T. R. Dankmeyer
Title: Vice President
MAGMA COPPER COMPANY
By: /s/ Donald J. Donahue
_____________________
Name: Donald J. Donahue
Title: Chairman of the Board
- 40 -
<PAGE>
Annex I
-------
CONDITIONS TO THE OFFER
Purchaser shall not be required to continue the Offer or to accept for
payment, purchase or pay for any Shares or Preferred Shares tendered, may
postpone the acceptance for payment, purchase of, and/or payment for, Shares or
Preferred Shares, may amend or terminate the Offer, and may extend the Offer
beyond January 4, 1996 (the "Initial Expiration Date") in which event the
expiration date (the "Expiration Date") shall mean the latest time and date
which the Offer as so extended by Purchaser, shall expire), whether or not any
Shares or Preferred Shares have theretofore been purchased or paid for, (i) if a
number of Shares and Preferred Shares which would result in Purchaser's
ownership of at least a majority of the outstanding Shares (including Shares
into which such Preferred Shares are converted) of the Company on a fully
diluted basis shall not have been validly tendered and not withdrawn, or (ii)
if, at any time on or after December 5, 1995 and prior to the time of payment
for any such Shares or Preferred Shares (whether or not theretofore accepted for
payment pursuant to the Offer), any of the following events (each, an "Event")
shall have occurred, (an Event shall be deemed to have occurred notwithstanding,
where applicable, the provision for a cure period) (each of paragraphs (a)
through (j) providing a separate and independent condition to Purchaser's
obligations pursuant to the Offer), provided that if the Purchaser does not
--------
accept for payment, purchase or pay for any Shares or Preferred Shares tendered
due to the occurrence of any Event specified in paragraph (a), (b), (d), (e),
(f) or (g), then Purchaser shall be required to extend the Offer for the cure
period specified in such paragraph; provided, however, that Purchaser may
--------- -------
terminate the Offer at any time if any of the other conditions hereunder shall
have occurred (including during the period of any such extension) and may waive
any Event at any time (including during the period of any such extension):
(a) there shall be in effect any preliminary or final injunction or
temporary restraining order or other order or decree issued by any foreign or
United States federal or state court or foreign or United States federal or
administrative agency or authority, enjoining, restraining or otherwise
prohibiting the Offer, the Merger or the acquisition by Sub or Purchaser of
Shares and Preferred Shares, and such order or decree either shall be incapable
of being cured by, or shall not be cured by May 31, 1996;
<PAGE>
(b) an action or a proceeding shall have been commenced by any
governmental agency under federal or state antitrust laws or any other
applicable law before any court or any governmental or other administrative or
regulatory authority or agency, domestic or foreign, or there shall be an
imminent threat which, would reasonably be expected to result in the foregoing,
or any of the Authorizations listed in Section 3.2 or 4.4 shall have been
conditioned in such a manner, that would reasonably be expected to (i)
materially restrict or prohibit consummation of the Offer or the Merger or any
other merger or business combination between the Company, Sub and Purchaser,
(ii) impose material limitations on the ability of Sub or Purchaser effectively
to acquire or hold or to exercise full rights of ownership of the Shares and
Preferred Shares acquired by it, including, but not limited to, the right to
vote the Shares purchased by it on all matters properly presented to the
stockholders of the Company, or (iii) impose material limitations on the ability
of either Purchaser or the Company to continue effectively to conduct all or any
material portion of its respective business as heretofore conducted or to
continue to own or operate effectively all or any material portion of its
respective assets as heretofore owned or operated, and such action or proceeding
either shall be incapable of being cured by, or shall not be cured by, May 31,
1996;
(c) there shall have been any law, statute, rule or regulation,
domestic or foreign, enacted, promulgated or proposed that, directly or
indirectly, would reasonably be expected to result in any of the consequences
referred to in paragraph (b) above;
(d) a material adverse change in the business, property, financial
condition or results of operations of the Company and its subsidiaries taken as
a whole shall have occurred, and such change shall either be incapable of being
cured or shall not be cured within ten days of the Initial Expiration Date or,
in the event such change is discovered during any extension of the Offer, within
ten days after the discovery of such change;
(e) there shall have occurred (i) any general suspension of trading
in securities on the New York Stock Exchange, (ii) a declaration of a banking
moratorium or any suspension of payments by United States or Australian
authorities on the extension of credit by lending institutions, or (iii) a
commencement of a war, armed hostilities or other international or national
- 2 -
<PAGE>
calamity directly or indirectly involving the United States, Australia or Peru
which would reasonably be expected to have a material adverse effect on the
business, property, financial condition or results of operations of the Company
and its subsidiaries taken as a whole, and any such event shall continue to have
such material adverse effect on May 31, 1996;
(f) any representation or warranty of the Company in the Agreement
and Plan of Merger shall at any time prove to have been incorrect in any
material respect at the time made, and shall either be incapable of being cured
or shall not be cured within ten days of the Initial Expiration Date or, in the
event such breach is discovered during any extension of the Offer, ten days
after discovery of such breach;
(g) the Company shall fail to perform or comply in any material
respect with any covenant or agreement to be performed or complied with by the
Company under the Agreement and Plan of Merger and such failure is unremedied
ten days after the Initial Expiration Date or, in the event such failure is
discovered during any extension of the Offer, ten days after discovery of such
nonperformance or noncompliance;
(h) the Company and Purchaser shall have agreed to terminate the
Offer or the Agreement and Plan of Merger;
(i) the Board of Directors of the Company or the Company, as the case
may be, shall have (i) publicly (including by amendment of the Schedule 14D-9)
withdrawn its recommendation to stockholders of acceptance of the Offer and
adoption of the Agreement and Plan of Merger, or shall have resolved to do so;
or (ii) entered into an agreement with a third party providing for the
acquisition or purchase of all or substantially all of the assets of, or equity
interest in, the Company by such third party; and
(j) the Offer shall not have been consummated by May 31, 1996.
The foregoing conditions are for the sole benefit of Sub and Purchaser
and may be asserted by Sub and Purchaser regardless of the circumstances giving
rise to such condition or may be waived by Sub or Purchaser in whole at any time
or in part from time to time in its reasonable discretion. The failure by Sub or
Purchaser at any time to exercise any of the foregoing rights shall not be
- 3 -
<PAGE>
deemed a waiver of any such right and each such right shall be deemed an ongoing
right and may be asserted at any time and from time to time.
- 4 -
<PAGE>
EXHIBIT (c)(2)
<PAGE>
MAGMA COPPER COMPANY
7400 North Oracle Road
Suite 200
Tucson, Arizona 85704
October 30, 1995
The Broken Hill Proprietary
Company Limited
BHP Tower-Rourke Place
600 Rourke Street
Melbourne, Victoria 3000
Australia
Attention: Mr. J.K. Ellis
Dear Sirs:
You have requested information concerning Magma Copper Company (the
"Company") in connection with a possible transaction with the Company or its
shareholders. You will treat confidentially any information furnished to you by
or on behalf of the Company (the "Evaluation Material"; provided, however, that
the term "Evaluation Material" does not include, and your confidentiality
obligations hereunder do not apply to, (i) information which was or becomes
generally available on a non-confidential basis or (ii) has been independently
acquired or developed by you without violating any of your obligations under
this agreement).
The Evaluation Material will be used solely for the purpose of evaluating
possible transactions with the Company; provided, however, that you may disclose
any Evaluation Material to your directors, officers, employees, agents,
advisors, potential financing sources or affiliates who need to know such
information for such purpose (it being understood that they shall be informed by
you of the confidential nature of such information and that by receiving such
information they are agreeing to be bound by this agreement).
In the event that you are requested in any proceeding to disclose any
Evaluation Material, you will give the Company prompt notice of such request so
that the Company may seek an appropriate protective order. If in the absence of
a protective order you are nonetheless compelled to disclose Evaluation
Material, you may disclose such information without liability hereunder;
provided, however, that you give the Company written notice of the information
to be disclosed as far in advance of its disclosure as is practicable and, upon
the Company's request
<PAGE>
The Broken Hill Proprietary October 30, 1995
Company Limited
Page 2
and at the Company's expense, use your reasonable best efforts to obtain
assurances that confidential treatment will be accorded to such information.
You hereby acknowledge that you are aware of the restrictions imposed by
the United States securities laws on 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 forseeable that such person is likely to
purchase or sell such securities in reliance upon such information.
For a period of one year from the date hereof (the "Standstill Period") you
and you affiliates (as defined in Rule 12b-2 under the Securities Exchange Act
of 1934, as amended (the "Exchange Act")) will not (and you and they will not
assist or, encourage others to), directly or indirectly, without the prior
consent of the Company's Broad of Directors:
(a) acquire or agree, offer, seek or propose to acquire (or request
permission to do so), ownership (including, but not limited to, beneficial
ownership as defined in Rule 13d-3 under the Exchange Act) of any of the
Company's assets or businesses or any securities by the Company, or any
rights or options to acquire such ownership (including from a third party),
or
(b) seek or propose to influence or control the Company's management
or the Company's policies (or request permission to do so), or
(c) enter into any discussions, negotiations, arrangements or
understanding with any third party with respect to any of the foregoing
(or request permission to do so).
If at any time during such period to the knowledge of any of your senior
officers you are approached by any third party (other than unsolicited
presentation by financial advisors seeking business and not retained by you)
concerning your or their participation in a transaction involving the Company's
assets or businesses or securities issued by the Company, you will promptly
inform the Company of the nature of such contact and the parties thereto.
Notwithstanding the foregoing, the terms of the first sentence of this paragraph
shall not be applicable to the purchase and sale of any securities of the
Company by managers of any of your pension or other related employee benefit
plans who have not received any of the Evaluation Material and who are acting as
passive investors in the Company and shall not be applicable to ordinary
brokerage or trading transactions by your financial advisors acting as a
securities dealer or purchases by or for an institutional investor solely for
investment purposes aggregating
<PAGE>
The Broken Hill Proprietary October 30, 1995
Company Limited
Page 3
less than 5% of the Company's outstanding voting securities or 10% of any issue
of the Company's outstanding nonvoting securities.
Notwithstanding the provisions of the foregoing paragraph, but without
limiting your other obligations under this agreement:
(a) The Standstill Period shall terminate if on or prior to November 30,
1995 the Company shall solicit or initiate the submission of any proposal or
offer from any person (other than you or any of your affiliates) or encourage
any person (other than you or any of your affiliates) to make any proposal or
offer (which term shall not include the furnishing of any information to any
person who makes an unsolicited proposal or offer) for an Acquisition
Transaction (as defined below). As used herein, the term "Acquisition
Transaction" shall mean the purchase of a majority of the Company's capital
stock or all or substantially all of the assets of the Company, whether by
purchase, merger, consolidation or similar transaction.
(b) If prior to the expiration or termination of the Standstill Period (i)
the Company enters into a definitive agreement providing for an Acquisition
Transaction with a party other than you or your affiliates or (ii) a third
party commences a tender or exchange offer for more than 50% of the Company's
common stock and the Company's Board of Directors recommends that the
Company's common stockholders tender their shares in such tender or exchange
offer (any of the foregoing, an "Alternative Transaction"), the foregoing
paragraph shall not be applicable with respect to any Acquisition Transaction
proposed by you or your affiliates, provided that such proposed Acquisition
Transaction provides for (i) the purchase of, or offer to purchase, all
outstanding shares of common stock of the Company for cash, and (ii) a
purchase price per share in excess of the price proposed to be paid and/or
other value proposed to be received by the Company's common stockholders in
the Alternative Transaction.
Neither the Company nor you will, without the consent of the other, make
any disclosure concerning the subject matter of the prior paragraphs, including
that you are having or have had discussions with the Company, except as
expressly provided in this agreement; provided that both the Company and you
may make such disclosure if such disclosure is required in order to comply with
law or stock exchange regulation.
For one year from the date hereof, (i) neither the Company nor you will
initiate contact (except for those contacts made in the ordinary course of
business) with any officer or employee of the other party regarding the other
party's business,
<PAGE>
The Broken Hill Proprietary October 30, 1995
Company Limited
Page 4
operations, prospectus or finances, except with the prior consent of the other
party and (ii) neither the Company nor you will directly solicit for hire any
person known to the other party to be employed by the other party in an
executive capacity.
Upon the Company's request you will either redeliver to the Company all
copies of the Evaluation Material or, with the consent of the Company, destroy
all memoranda, notes and other writings prepared by you or your directors,
officers, employees, agents or affiliates based on the Evaluation Material. You
understand that neither the Company nor any of its representatives or advisors
makes any representation or warranty as to the accuracy or completeness of any
Evaluation Material which may be furnished to you. You agree that neither the
Company nor its representatives or advisors shall have any liability to you or
any of your representatives resulting from the use of the Evaluation Material.
You agree that money damages would not be a sufficient remedy for any
breach of this agreement by you or your directors, officers, employees, agents
or affiliates, and that in addition to all other remedies the Company shall be
entitled to specific performance and injunctive or other equitable relief as a
remedy for any such breach, and you further agree to waive and to use your best
efforts to cause your directors, officers, employees, agents or affiliates to
waive, any requirements for the securing or posting of any bond in connection
with such remedy.
This agreement shall be governed by and construed in accordance with the
laws of the State of Delaware, without giving effect to its conflict of laws
principles or rules.
During such time as the parties to this letter agreement are conducting
negotiations relating to a possible transaction between the Company and you, the
Company shall use reasonable efforts, consistent with the need to maintain
confidentiality, to respond to your reasonable requests for due diligence
information, which would not, among other things, result in unreasonable
disruption of the Company's business. It is expressly understood that this
letter does not constitute an agreement with respect to an Acquisition
Transaction or other transaction, and does not obligate you or the Company to
enter into any further discussions or agreement, and that the parties hereto may
terminate negotiations at any time.
<PAGE>
The Broken Hill Proprietary October 30, 1995
Company Limited
Page 5
If you are in agreement with the foregoing, please so indicate by signing
and returning one copy of this agreement which will constitute an agreement
between you and the Company with respect to the matters set forth herein.
Very truly yours,
MAGMA COPPER COMPANY
By: /s/ Donald J. Donahue
-------------------------------
Name: Donald J. Donahue
Title: Chairman of the Board
of Directors
Confirmed and Agreed to:
THE BROKEN HILL PROPRIETARY
COMPANY LIMITED
By: /s/ Jeremy K. Ellis
----------------------
Name: Jeremy K. Ellis
Title: General Executive Manager
<PAGE>
November 30, 1995
The Broken Hill Proprietary
Company Limited
BHP Tower-Bourke Place
600 Bourke Street
Melbourne, Victoria 3000
Australia
Attention: Mr. J.K. Ellis
Dear Sirs:
Reference is made to the (i) Letter, dated October 30, 1995, (as amended
hereby, the "Confidentiality Agreement") between Magma Copper Company and The
Broken Hill Proprietary Company Limited ("BHP"), and (ii) Agreement and Plan of
Merger, dated as of November 30, 1995, among the Company, BHP and certain of its
subsidiaries (the "Merger Agreement"). Capitalized terms used herein without
definition have the meanings attributed to them in the Confidentiality
Agreement.
The sixth paragraph of the Confidentiality Agreement is hereby amended to
add the following clause (c):
"(c) If prior to the expiration or termination of the
Standstill Period, the Agreement and Plan of Merger,
dated as of November 30, 1995, among the Company,
BHP and certain of its subsidiaries (the "Merger
Agreement") shall have been terminated without an
Offer having been consummated, and a third party
makes a proposal relating to an Acquisition
Transaction, then notwithstanding clause (b) above,
the foregoing paragraph relating to the Standstill
Period shall not be applicable with respect to any
Acquisition Transaction proposed by you or your
affiliates, provided such Acquisition Transaction is
--------
at least the equivalent of such third party's proposal.
Capitalized terms used in this paragraph (c) and not
otherwise defined in this Confidentiality Agreement
shall have the meanings attributed to them in the
Merger Agreement."
<PAGE>
The Broken Hill Proprietary
Company Limited
November 30, 1995
Page 2
This amendment shall be governed by and construed in accordance with the
laws of the State of Delaware, without giving effect to its conflict of laws
principles or rules.
If you are in agreement with the foregoing, please so indicate by signing
and returning one copy of this amendment which will constitute an agreement
between you and the Company with respect to the matters set forth herein.
Very truly yours,
Magma Copper Company
By /s/ Donald J. Donahue
-----------------------
Name: Donald J. Donahue
Title: Chairman of the Board
of Directors
Confirmed and
Agreed to:
The Broken Hill Proprietary
Company Limited
By: /s/ Graeme McGregor
----------------------
Name: Graeme McGregor
Title: Executive General Manager
<PAGE>
EXHIBIT (c)(3)
<PAGE>
TENDER AGREEMENT
----------------
TENDER AGREEMENT (this "Agreement"), dated November 30, 1995, by and
between The Broken Hill Proprietary Company Limited, a Victoria, Australia
corporation ("Parent"), and Warburg Pincus Capital Company, L.P., a Delaware
limited partnership ("Seller").
RECITALS
--------
Concurrently herewith, Parent, certain subsidiaries of Parent and
Magma Copper Company (the "Company"), a Delaware corporation, are entering into
an Agreement and Plan of Merger of even date herewith (the "Merger Agreement";
capitalized terms used but not defined herein shall have the meanings set forth
in the Merger Agreement), pursuant to which Sub will make a tender offer (the
"Offer") for all outstanding shares of common stock, par value $.01 per share
(the "Common Stock"), of the Company, at a price of $28 per share (the "Offer
Price"), net to the seller in cash, to be followed by a merger (the "Merger") of
Sub with and into the Company.
As of the date hereof, Seller beneficially owns shares of Common Stock
(such shares, together with any shares of Common Stock acquired after the date
hereof and prior to the termination hereof, whether upon the exercise of
options, conversion of convertible securities or otherwise, collectively,
referred to herein as the "Shares").
As a condition to its willingness to enter into the Merger Agreement
and Sub's willingness to make the Offer, Parent has required that Seller agree,
and Seller has agreed, to tender in the Offer all of the Shares owned by Seller
on the terms and conditions provided for herein.
AGREEMENT
---------
To implement the foregoing and in consideration of the mutual
agreements contained herein, the parties agree as follows:
1. Agreement to Tender and Vote.
----------------------------
1.1 Tender. Seller hereby agrees to validly tender pursuant to the
------
Offer, and not withdraw, all of the Shares.
<PAGE>
1.2 Voting. Seller hereby agrees that, during the time this
------
Agreement is in effect, at any meeting of the stockholders of the Company,
however called, Seller shall (a) vote the Shares in favor of the Merger; (b)
vote the Shares against any action or agreement that would result in a breach in
any material respect of any covenant, representation or warranty or any other
obligation or agreement of the Company under the Merger Agreement; and (c) vote
the Shares against any action or agreement (other than the Merger Agreement or
the transactions contemplated thereby) that would impede, interfere with, delay,
postpone or attempt to discourage the Merger or the Offer, including, but not
limited to: (i) any extraordinary corporate transaction, such as a merger,
consolidation or other business combination involving the Company and its
subsidiaries; (ii) a sale or transfer of a material amount of assets of the
Company and its subsidiaries or a reorganization, recapitalization or
liquidation of the Company and its subsidiaries; or (iii) any change in the
Company's management or in the board of directors of the Company (the "Board"),
except as otherwise agreed to in writing by Parent.
2. Expiration. This Agreement and Seller's obligation to tender and
----------
vote the Shares as provided hereto shall terminate on the Expiration Date. As
used herein, the term "Expiration Date" means the first to occur of (a) the
Effective Time, (b) termination of the Merger Agreement in accordance with its
terms, (c) the Board of Directors of the Company having withdrawn its approval
or recommendation of the Offer or the Merger, (d) the Board of Directors of the
Company having modified its approval of the Offer or the Merger in a manner
adverse to Parent, and (e) written notice of termination of this Agreement by
Parent to Seller.
3. Representations and Warranties.
------------------------------
3.1 Representations and Warranties of Parent. Parent hereby
----------------------------------------
represents and warrants to Seller as follows:
(a) Due Authorization. This Agreement has been duly authorized by
-----------------
all necessary corporate action on the part of Parent, has been duly
executed and delivered on behalf of Parent by a duly authorized officer of
Parent, and is valid, binding and enforceable against Parent in accordance
with its terms except to the extent that enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
-2-
<PAGE>
other similar laws relating to or affecting the enforcement of creditors'
rights generally or by equitable principles. The execution, delivery and
performance of this Agreement by Parent and the consummation by it of the
transactions contemplated hereunder do not require the consent, waiver,
approval, license or authorization of or any filing with any person or
domestic public authority and will not violate, result in a breach of or
the acceleration of any obligation under, or constitute a default under,
any provision of Parent's charter or by-laws, or any indenture, mortgage,
lease, agreement, contract, instrument, order, judgment, ordinance,
regulation or decree specifically applicable to Parent, the effect of which
could impair the ability of Parent to perform its obligations under this
Agreement. Parent is a corporation duly organized, validly existing and in
good standing under the laws of Victoria, Australia and has the full
corporate power and authority to execute, deliver and perform this
Agreement.
(b) Distribution. Parent is acquiring the Shares for its own account
------------
for investment only and not with a view to the distribution or resale of
the Shares so acquired. Any sale, transfer or other disposition of the
Shares by Parent will be made in compliance with all applicable provisions
of the 1933 Act, and the rules and regulations thereunder.
3.2 Representations and Warranties of Seller. Seller hereby
----------------------------------------
represents and warrants to Parent as follows:
(a) Due Authorization. This Agreement has been duly authorized by
-----------------
all necessary partnership action on the part of Seller, has been duly
executed and delivered by a duly authorized officer of Seller, and is
valid, binding and enforceable against Seller in accordance with its terms,
except to the extent that enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the enforcement of creditors' rights
generally or by equitable principles. The execution, delivery and
performance of this Agreement by Seller and the consummation by it of the
transactions contemplated hereunder do not require the consent, waiver,
approval, license or authorization of or any filing (other than in
compliance with the 1933 Act, the Exchange Act, the Hart-Scott-Rodino Act,
the rules of the New York Stock Exchange, or securities or blue sky laws),
with any person or domestic public authority and
-3-
<PAGE>
will not violate, result in a breach of or the acceleration of any
obligation under, or constitute a default under, any provision of Seller's
restriction set forth in the Certificate of Limited Partnership or
Agreement of Limited Partnership, or any indenture, mortgage, lease,
agreement, contract, instrument, order, judgment, ordinance, regulation or
decree specifically applicable to Seller, the effect of which would be
material and adverse to the ability of Seller to consummate the
transactions contemplated in this Agreement. Seller is a limited
partnership duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the full partnership power and
authority to execute, deliver and perform this Agreement.
(b) Consent of Independent Directors. Prior to the execution and
--------------------------------
delivery of this Agreement, Seller has obtained written approval of the
Company, in accordance with the terms of the Standstill Agreement dated
November 30, 1988 between Seller and the Company (the "Standstill
Agreement"), of the transactions contemplated in this Agreement, including
the approval of a majority (but not less than two) of the Independent
Directors of the Company (as such term as defined in the Standstill
Agreement) to tender and vote all of the Shares as contemplated by this
Agreement.
(c) Shares. Seller beneficially owns all of the Shares, and has
------
good and marketable title thereto, free and clear of all claims, liens,
encumbrances, security interests and charges of any nature whatsoever
(together, "Liens") other than the restrictions on transfer set forth in
the Standstill Agreement. Upon the tender of the Shares pursuant to the
Offer, Seller shall transfer to the Parent good and valid title to the
Shares free and clear of all Liens.
4. Certain Covenants of Seller. Except in accordance with the terms
---------------------------
of this Agreement, Seller hereby covenants and agrees as follows:
4.1 No Solicitation. Seller shall not, directly or indirectly,
---------------
solicit any proposal by any person or entity (other than Parent or any affiliate
of Parent) which constitutes, or may reasonably be expected to lead to, an
Acquisition Proposal. Seller will immediately cease and cause to be terminated
any existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing.
-4-
<PAGE>
4.2 Restriction on Transfer, Proxies and Non-Interference. Seller
-----------------------------------------------------
hereby agrees, while this Agreement is in effect, and except as contemplated
hereby, not to (i) sell, transfer, pledge, encumber, assign or otherwise dispose
of, or enter into any contract, option or other arrangement or understanding
with respect to the sale, transfer, pledge, encumbrance, assignment or other
disposition of, any of the Shares or (ii) grant any proxies, deposit any Shares
into a voting trust or enter into a voting agreement with respect to any Shares
or (iii) take any action that would make any representation or warranty of
Seller contained herein untrue or incorrect or have the effect of preventing or
disabling Seller from performing his obligations under this Agreement.
4.3 Fiduciary Duties. Notwithstanding anything in this Agreement to
----------------
the contrary, the covenants and agreements set forth herein shall not prevent
any of the Seller's designees serving on the Company's Board of Directors from
taking any action, subject to the applicable provisions of the Merger Agreement,
while acting in such designee's capacity as a director of the Company.
5. Further Assurances. From time to time, at the other party's
------------------
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement.
6. Miscellaneous.
-------------
6.1 Entire Agreement; Assignment. This Agreement (i) constitutes the
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entire agreement among the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof and (ii) shall not
be assigned by operation of law or otherwise, provided that Parent may assign
its rights and obligations hereunder to any direct or indirect wholly owned
subsidiary of Parent, but no such assignment shall relieve Parent of its
obligations hereunder if such assignee does not perform such obligations.
6.2 Amendments. This Agreement may not be modified, amended, altered
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or supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto.
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<PAGE>
6.3 Notices. All notices, requests, claims, demands and other
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communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
If to the Seller:
Warburg Pincus Capital Company, L.P.
466 Lexington Avenue
New York, New York 10017
Attention: John L. Vogelstein
copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Andrew R. Brownstein, Esq.
If to Parent:
The Broken Hill Proprietary
Company Limited
BHP Tower
600 Bourke Street
Melbourne, Victoria
3000, Australia
Attention: Corporate Secretary
copy to:
Arnold & Porter
399 Park Avenue
New York, New York 10022
Attention: Joseph Handros, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
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<PAGE>
6.4 Governing Law. This Agreement shall be governed by and
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construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
6.5 Specific Performance. Each of the parties hereto recognizes and
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acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
6.6 Counterparts. This Agreement may be executed in two
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counterparts, each of which shall be deemed to be an original, but both of which
shall constitute one and the same Agreement.
6.7 Descriptive Headings. The descriptive headings used herein are
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inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
6.8 Severability. Whenever possible, each provision or portion of
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any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
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<PAGE>
IN WITNESS WHEREOF, Parent and Seller have caused this Agreement to be
duly executed as of the day and year first above written.
THE BROKEN HILL PROPRIETARY
COMPANY LIMITED
By: /s/ Graeme W. McGregor
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Name: Graeme W. McGregor
Title: Executive General
Manager
WARBURG PINCUS CAPITAL
COMPANY, L.P.
By: WARBURG, PINCUS & CO.,
General Partner
By: /s/ John L. Vogelstein
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Name: John L. Vogelstein
Title: General Partner
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