<PAGE>
As filed with the Securities and Exchange Commission on November 19, 1999
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section
14(d)(1) of the Securities Exchange Act of 1934
AIR EXPRESS INTERNATIONAL
CORPORATION
(Name of Subject Company)
DEUTSCHE POST AG
DP ACQUISITION CORPORATION
a wholly-owned subsidiary of
DEUTSCHE POST AG
(Bidders)
---------------
Common Stock, Par Value $0.01 Per Share
(Title of Class of Securities)
---------------
009104100
(Cusip Number)
Dr. Klaus Engelen
Deutsche Post AG
Heinrich-von-Stephan-Str. 1
53175 Bonn, Germany
Telephone: 011-49-228-182-3600
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications on Behalf of Bidders)
Copies to:
Christopher Mayer
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telephone: (212) 450-4000
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
================================================================================
Transaction Valuation* Amount of Filing Fee**
- --------------------------------------------------------------------------------
<S> <C>
$1,194,476,580 $238,896
================================================================================
</TABLE>
* Calculated by multiplying $33.00, the per share tender offer price, by
33,628,769, the sum of the number of shares of Common Stock sought in the
Offer and the 2,567,491 shares of Common Stock subject to options that will
be vested and exercisable as of the date of the Closing of the Offer.
** Calculated as 1/50 of 1% of the transaction value.
[_] 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.
Form or Registration No.: Not applicable.
Filing Party: Not applicable.
Date Filed: Not applicable.
================================================================================
<PAGE>
- -------------------- -----------------
CUSIP No. 009104100 14D-1 Page 2 of 8 Pages
- -------------------- -----------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
S.S. or I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Deutsche Post AG
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [_]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
BK, WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(e) OR 2(f)
[_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Federal Republic of Germany
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
0
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7)
EXCLUDES CERTAIN SHARES
[_]
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
0%
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON
HC
- --------------------------------------------------------------------------------
<PAGE>
- -------------------- ----------------------
CUSIP No. 009104100 14D-1 Page 3 of 8 Pages
- -------------------- ----------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
S.S. or I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
DP Acquisition Corporation
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [_]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(e) OR 2(f)
[_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
0
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7)
EXCLUDES CERTAIN SHARES
[_]
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
0%
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON
CO
- ----------------------------------------------------------------
<PAGE>
Item l. Security and Subject Company
(a) The name of the subject company is Air Express International Corporation,
a Delaware corporation (the "Company"), and the address of its principal
executive offices is 120 Tokeneke Road, Darien, Connecticut 06820.
(b) This Statement relates to the offer by DP Acquisition Corporation
("Purchaser"), a Delaware corporation and a wholly-owned subsidiary of Deutsche
Post AG, a German corporation ("Parent"), to purchase all outstanding shares of
common stock, par value $0.01 per share (the "Shares"), of the Company at $33.00
per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase (the "Offer to Purchase") and in
the related Letter of Transmittal, copies of which are attached hereto as
Exhibits (a)(l) and (a)(2) (which are herein collectively referred to as the
"Offer"). The information set forth in the introduction to the Offer to
Purchase (the "Introduction") is incorporated herein by reference.
(c) The information concerning the principal market in which the Shares are
traded and certain high and low sales prices for the Shares in such principal
market is set forth in "Price Range of Shares; Dividends" of the Offer to
Purchase and is incorporated herein by reference.
Item 2. Identity and Background.
(a)-(d), (g) The infromation set forth in "Certain Information Concerning
Parent and Purchaser" and Schedule I of the Offer to Purchase is incorporated
herein by reference.
(e)-(f) During the last five years, neither Parent nor Purchaser nor, to the
best knowledge of Parent and Purchaser, any of the persons listed in Schedule I
of the Offer to Purchase has been (i) convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting activities subject
to, federal or state securities laws or finding any violation of such laws.
Item 3. Past Contacts, Transactions or Negotiations with the Subject Company.
(a) The information set forth under "Background of the Offer; Past Contacts
or Negotiations with the Company", "The Merger Agreement; Other Arrangements",
"Certain Information Concerning Parent and Purchaser" and "Purpose of the Offer;
Plans for the Company" in the Offer to Purchase is incorporated herein by
reference.
(b) The information set forth under "Introduction", "Background of the Offer;
Past Contacts or Negotiations with the Company", "Purpose of the Offer; Plans
for the Company", "The Merger Agreement; Other Arrangements", "Certain
Information Concerning the Company" and "Certain Information Concerning Parent
and Purchaser" of the Offer to Purchase is incorporated herein by reference.
Item 4. Source and Amount of Funds or Other Consideration.
(a)-(c) The information set forth in "Source and Amount of Funds" of the
Offer to Purchase is incorporated herein by reference.
Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder.
(a)-(e) The information set forth under "Introduction", "Background of the
Offer; Past Contacts or Negotiations with the Company", "Purpose of the Offer;
Plans for the Company", "The Merger Agreement; Other Arrangements", "Certain
Information Concerning the Company" and "Source and Amount of Funds" of the
Offer to Purchase is incorporated herein by reference.
(f)-(g) The information set forth under "Purpose of the Offer; Plans for the
Company" and "Certain Effects of the Offer" of the Offer to Purchase is
incorporated herein by reference.
<PAGE>
Item 6. Interest in Securities of the Subject Company.
The information set forth under "Introduction", "Certain Information
Concerning the Company", "Certain Information Concerning Parent and Purchaser"
and Schedule I of the Offer to Purchase is incorporated herein by reference.
Item 7. Contracts, Arrangements, Understandings or Relationships with Respect
to the Subject Company's Securities.
The information set forth under "Introduction", "Background of the Offer; Past
Contacts and Negotiations with the Company", "Purpose of the Offer; Plans for
the Company", "The Merger Agreement; Other Arrangements", "Certain Information
Concerning the Company" and "Certain Information Concerning Parent and
Purchaser" of the Offer to Purchase is incorporated herein by reference.
Item 8. Persons Retained, Employed or to be Compensated.
The information set forth under "Introduction" and "Fees and Expenses" of the
Offer to Purchase is incorporated herein by reference.
Item 9. Financial Statements of Certain Bidders.
The information set forth under "Certain Information Concerning Parent and
Purchaser" of the Offer to Purchase is incorporated herein by reference.
Item 10. Additional Information.
(a) The information set forth under "Purpose of the Offer; Plans for the
Company" of the Offer to Purchase is incorporated herein by reference.
(b)-(c) The information set forth in "Certain Legal Matters; Regulatory
Approvals" of the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in "Certain Effects of the Offer" of the Offer
to Purchase is incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal is incorporated herein by reference in its entirety.
Item 11. Material to be Filed as Exhibits.
(a)(l) Offer to Purchase dated November 19, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
<PAGE>
(a)(7) Text of Joint Press Release issued by Parent and the Company on
November 15, 1999.
(a)(8) Summary Advertisement as published in The Wall Street Journal on
November 19, 1999.
(b)(1) Credit confirmation, dated April 20, 1999, from Bayerische Landesbank
Girozentrale to Parent, extending credit line in the amount of DM1.5
billion.
(b)(2) Credit Agreement, dated June 2, 1999, between Parent and Westdeutsche
Landesbank Girozentrale, London Branch, extending credit line in the
amount of EURO 150 million.
(b)(3) Credit confirmation, dated November 15, 1999, from Deutsche Postbank
AG to Parent, extending credit line in the amount of DM1.0 billion.
(c)(1) Tender Offer and Merger Agreement, dated as of November 15, 1999,
among Parent, Purchaser and the Company.
(c)(2) Confidentiality Agreement, dated July 12, 1999, between Danzas
Management Ltd. and the Company
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Dated: November 19, 1999
DP ACQUISITION CORPORATION
By: /s/ Dr. Klaus Engelen
------------------------------------
Name: Dr. Klaus Engelen
Title: General Counsel, Executive
Vice President and Secretary
DEUTSCHE POST AG
By: /s/ Dr. Bern Boecken
------------------------------------
Name: Dr. Bern Boecken
Title: Director of Finance
By: /s/ Dr. Klaus Engelen
------------------------------------
Name: Dr. Klaus Engelen
Title: General Counsel
<PAGE>
EXHIBIT INDEX
Exhibit No.
-----------
(a)(1) Offer to Purchase dated November 19, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Text of Joint Press Release issued by Parent and the Company on
November 15, 1999.
(a)(8) Summary Advertisement as published in The Wall Street Journal on
November 19, 1999.
(b)(1) Credit confirmation, dated April 20, 1999, from Bayerische
Landesbank Girozentrale to Parent, extending credit line in the
amount of DM1.5 billion.
(b)(2) Credit Agreement, dated June 2, 1999, between Parent and
Westdeutsche Landesbank Girozentrale, London Branch, extending
credit line in the amount of EURO 150 million.
(b)(3) Credit confirmation, dated November 15, 1999, from Deutsche
Postbank AG to Parent, extending credit line in the amount of
DM1.0 billion.
(c)(1) Tender Offer and Merger Agreement, dated as of November 15, 1999,
among Parent, Purchaser and the Company.
(c)(2) Confidentiality Agreement, dated July 12, 1999, between Danzas
Management Ltd. and the Company.
<PAGE>
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Air Express International Corporation
at
$33.00 Net Per Share
by
DP Acquisition Corporation
a wholly-owned subsidiary of
Deutsche Post AG
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, DECEMBER 17, 1999, UNLESS THE OFFER IS EXTENDED.
The Board of Directors of Air Express International Corporation (the
"Company") has unanimously approved the Merger Agreement and the transactions
contemplated thereby and determined that the Merger Agreement and the
transactions contemplated thereby, including the Offer and the Merger, are
fair to, and in the best interests of, the holders of Shares (as defined
herein). The Board of Directors of the Company recommends that the Company's
stockholders tender their Shares pursuant to the Offer and approve and adopt
the Merger Agreement (if such approval is required under Delaware Law).
The Offer is conditioned upon, among other things, (1) there being validly
tendered and not withdrawn prior to the expiration of the Offer a number of
the shares of common stock, par value $0.01 per share (the "Shares"), of the
Company which, together with any Shares then beneficially owned by Deutsche
Post AG ("Parent"), represent at least a majority of the outstanding Shares on
a fully diluted basis (the "Minimum Condition"), (2) any waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 having expired or
having been terminated and (3) clearance under the European Commission's
Council Regulation No. 4064/89 having been received. See "Certain Conditions
of the Offer."
IMPORTANT
Any stockholder who desires to tender all or any portion of such
stockholder's Shares should either (1) complete and sign the Letter of
Transmittal (or a facsimile thereof) that accompanies this Offer to Purchase
in accordance with the instructions in such Letter of Transmittal and deliver
the Letter of Transmittal (or such facsimile) together with the certificate(s)
("Share Certificates") representing the tendered Shares and any other required
documents to ChaseMellon Shareholder Services, L.L.C. (the "Depositary") (at
the Depositary's address set forth on the back cover of this Offer to
Purchase) or tender such stockholder's Shares pursuant to the procedure for
book-entry transfer set forth in "Procedures for Accepting the Offer and
Tendering Shares" or (2) request such stockholder's broker, dealer, commercial
bank, trust company or other nominee to effect the transaction for such
stockholder. A stockholder whose Shares are registered in the name of a
broker, dealer, bank, trust company or other nominee must contact such broker,
dealer, bank, trust company or other nominee if such stockholder desires to
tender such Shares.
A stockholder who desires to tender such stockholder's Shares and whose
Share Certificates are not immediately available, or who cannot comply with
the procedure for book-entry transfer on a timely basis, or who cannot deliver
all required documents to the Depositary prior to the expiration of the Offer,
may tender such Shares by following the procedures for guaranteed delivery set
forth under the caption "Procedures for Accepting the Offer and Tendering
Shares."
Questions or requests for assistance may be directed to Georgeson
Shareholder Communications Inc. (the "Information Agent") or Deutsche Bank
Securities Inc. (sometimes referred to herein as 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 and other related materials may be obtained from the
Information Agent or the Dealer Manager.
---------------
The Dealer Manager for the Offer is:
Deutsche Banc Alex. Brown
November 19, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
INTRODUCTION............................................................. 1
THE TENDER OFFER......................................................... 3
Terms of the Offer..................................................... 3
Acceptance for Payment and Payment for Shares.......................... 4
Procedures for Accepting the Offer and Tendering Shares................ 5
Withdrawal Rights...................................................... 8
Certain United States Federal Income Tax Considerations................ 8
Price Range of Shares; Dividends....................................... 9
Certain Information Concerning the Company............................. 10
Certain Information Concerning Parent and Purchaser.................... 12
Source and Amount of Funds............................................. 13
Background of the Offer; Past Contacts or Negotiations with the
Company............................................................... 14
The Merger Agreement; Other Arrangements............................... 16
Purpose of the Offer; Plans for the Company............................ 22
Certain Effects of the Offer........................................... 24
Dividends and Distributions............................................ 25
Extension of Tender Period; Termination; Amendment..................... 25
Certain Conditions of the Offer........................................ 26
Certain Legal Matters; Regulatory Approvals............................ 27
Fees and Expenses...................................................... 31
Miscellaneous.......................................................... 32
SCHEDULE I--Directors and Executive Officers of Parent and Purchaser and
Parent's Designees...................................................... S-1
</TABLE>
i
<PAGE>
INTRODUCTION
To the Holders of Shares of Common Stock
of Air Express International Corporation
DP Acquisition Corporation ("Purchaser"), a Delaware corporation and a
wholly-owned subsidiary of Deutsche Post AG ("Parent"), hereby offers to
purchase all outstanding shares of common stock, par value $0.01 per share
(the "Shares"), of Air Express International Corporation (the "Company") at a
price of $33.00 per Share, net to the seller in cash (the "Offer Price"), upon
the terms and subject to the conditions set forth in this Offer to Purchase
and in the related Letter of Transmittal (which, together with any amendments
or supplements hereto or thereto, collectively constitute the "Offer").
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, stock transfer taxes with respect to the purchase of Shares by
Purchaser pursuant to the Offer. Parent or Purchaser will pay all charges and
expenses of Deutsche Bank Securities Inc. ("Deutsche Bank"), as dealer manager
(the "Dealer Manager"), ChaseMellon Shareholder Services, L.L.C., as
depositary (the "Depositary"), and Georgeson Shareholder Communications Inc.,
as information agent (the "Information Agent"), incurred in connection with
the Offer. See "Fees and Expenses."
THE BOARD OF DIRECTORS OF THE COMPANY (THE "COMPANY BOARD") HAS UNANIMOUSLY
APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY AND
DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
THEREBY, INCLUDING THE OFFER AND THE MERGER, ARE FAIR TO, AND IN THE BEST
INTERESTS OF, THE HOLDERS OF SHARES. THE COMPANY BOARD RECOMMENDS THAT THE
COMPANY'S STOCKHOLDERS TENDER THEIR SHARES PURSUANT TO THE OFFER AND APPROVE
AND ADOPT THE MERGER AGREEMENT (IF SUCH APPROVAL IS REQUIRED UNDER DELAWARE
LAW).
Morgan Stanley & Co. Incorporated, financial advisor to the Company
("Morgan Stanley"), has delivered to the Company Board its written opinion as
investment bankers that, as of the date of such opinion and based on and
subject to the matters stated in such opinion, the consideration to be paid in
the Offer and the Merger is fair from a financial point of view to the holders
of Shares. The full text of the written opinion of Morgan Stanley containing
the assumptions made, the matters considered and the scope of the review
undertaken in rendering such opinion as well as the limitations of such
opinion is included with the Company's Solicitation/Recommendation Statement
on Schedule 14D-9 ("Schedule 14D-9"), which is being mailed to stockholders
concurrently herewith. Stockholders are urged to read the full text of such
opinion in conjunction with this Offer.
The Offer is conditioned upon, among other things, (1) there being validly
tendered and not withdrawn prior to the expiration of the Offer a number of
the Shares which, together with any Shares then beneficially owned by Parent,
represent at least a majority of the outstanding Shares on a fully diluted
basis (the "Minimum Condition"), (2) any waiting period under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") having
expired or having been terminated and (3) clearance under the European
Commission's Council Regulation No. 4064/89 having been received. See "Certain
Conditions of the Offer."
Based upon information provided by the Company, as of the close of business
on November 12, 1999, there were outstanding 33,628,769 Shares and options to
purchase an aggregate of 2,567,491 Shares. Based upon the foregoing, there
were approximately 36,196,260 Shares outstanding on a fully diluted basis.
Neither Parent nor Purchaser or any person listed on Schedule I hereto
beneficially owns any Shares. Accordingly, Purchaser believes that the Minimum
Condition would be satisfied if approximately 18,098,131 Shares are validly
tendered and not withdrawn prior to the Expiration Date (as defined herein).
The Offer is being made pursuant to the Tender Offer and Merger Agreement
dated as of November 15, 1999 (the "Merger Agreement") among the Company,
Purchaser and Parent. The Merger Agreement provides that as promptly as
practicable after the purchase of Shares pursuant to the Offer and the
satisfaction (or waiver, to the extent permissible under the
1
<PAGE>
Merger Agreement) of the conditions to the Merger, Purchaser shall, in
accordance with the General Corporation Law of the State of Delaware
("Delaware Law"), be merged into the Company (the "Merger"), whereupon the
separate existence of Purchaser shall cease, and the Company shall continue as
the surviving corporation (the "Surviving Company"). Pursuant to the Merger,
each Share outstanding immediately prior to the effective time of the Merger
(the "Effective Time") (other than Shares beneficially owned by Parent, Shares
held by the Company in treasury and Shares held by stockholders properly
exercising appraisal rights under Delaware Law) shall be converted into the
right to receive the per Share price paid in the Offer in cash, without
interest (the "Merger Consideration"). The Merger Agreement is more fully
described in "The Merger Agreement; Other Arrangements." For a discussion of
the treatment of stock options, see "The Merger Agreement; Other
Arrangements."
The Merger Agreement provides that upon the acceptance for payment of
Shares pursuant to the Offer, Parent shall be entitled to designate such
number of directors, rounded up to the next whole number, on the Company Board
that equals the product of (i) the total number of directors on the Company
Board and (ii) the percentage that the number of votes represented by Shares
beneficially owned by Parent (including Shares accepted for payment pursuant
to the Offer) bears to the total number of votes represented by Shares then
outstanding. See "The Merger Agreement; Other Arrangements." Notwithstanding
the foregoing, in the event that Parent's designees are appointed or elected
to the Company Board, until the Effective Time, such Board shall have at least
two directors who are directors as of the date hereof and who are not officers
or affiliates of the Company, Parent or any of their respective subsidiaries.
See "The Merger Agreement; Other Arrangements."
The Merger is subject to the satisfaction or waiver of certain conditions,
including, if required, the approval and adoption of the Merger Agreement by a
majority of the stockholders of the Company. See "The Merger Agreement; Other
Arrangements." If the Minimum Condition is satisfied, Purchaser would have
sufficient voting power to approve the Merger without the affirmative vote of
any other stockholder of the Company. The Company has agreed, if required, to
cause a meeting of its stockholders to be held as promptly as practicable
following consummation of the Offer for the purpose of voting on the approval
and adoption of the Merger and the Merger Agreement. Parent and Purchaser have
agreed to vote their Shares in favor of the Merger.
This Offer to Purchase and the related Letter of Transmittal contain
important information that should be read carefully before any decision is
made with respect to the Offer.
2
<PAGE>
THE TENDER OFFER
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 such extension
or amendment), Purchaser will accept for payment and pay for all Shares
validly tendered prior to the Expiration Date and not properly withdrawn as
permitted by "Withdrawal Rights." The term "Expiration Date" means 12:00
midnight, New York City time, on Friday, December 17, 1999, unless Purchaser,
in accordance with the Merger Agreement, extends the period during which the
Offer is open, in which event the term "Expiration Date" means the latest time
and date on which the Offer, as so extended, expires.
Purchaser expressly reserves the right, in its sole discretion (but subject
to the terms and conditions of the Merger Agreement), at any time and from
time to time, to extend the period of time during which the Offer is open by
giving oral or written notice of such extension to the Depositary. During any
such extension, all Shares previously tendered and not withdrawn will remain
subject to the Offer, subject to the rights of a tendering stockholder to
withdraw such stockholder's Shares. See "Withdrawal Rights."
Parent and Purchaser have agreed to extend the Expiration Date in
increments of not less than five business days until February 15, 2000, if on
a scheduled Expiration Date:
(i) the applicable waiting period under the HSR Act shall not have
expired or been terminated;
(ii) approvals under the European Commission's Council Regulation No.
4064/89 (the "European Approval"), the United States Department of
Transportation's Aviation Economic Regulations (the "DOT Approval") and
Section 721 of the Defense Production Act of 1950 (the "Exon-Florio
Provision") have not been completed, obtained or satisfied; or
(iii) any other domestic or foreign approvals, consents, filings,
notifications or other requirements of law, statute, rule or regulation
necessary in connection with the transactions contemplated by the Merger
Agreement shall not have been completed, obtained or satisfied, except for
such matters as would not reasonably be expected to have, individually or
in the aggregate, a material adverse effect (as defined herein) on the
Company or materially impair the ability of Parent or Purchaser to
consummate the transactions contemplated by the Merger Agreement or to own
or exercise control over the Company and its subsidiaries following the
Offer.
Subject to the applicable rules and regulations of the Securities and
Exchange Commission (the "Commission"), Purchaser also expressly reserves the
right, in its sole discretion (but subject to the terms and conditions of the
Merger Agreement, including the obligation of Purchaser to extend the Offer
until February 15, 2000 as described in the paragraph above), at any time and
from time to time, (i) to terminate the Offer and not accept for payment any
Shares upon the occurrence of any of the conditions specified in "Certain
Conditions of the Offer," (ii) to waive any condition except as described in
the following paragraph or (iii) to amend the Offer in any respect, except as
described in the following paragraph. Purchaser acknowledges that (i) Rule
14e-1(c) under the Securities and Exchange Act of 1934, as amended (the "1934
Act"), requires Purchaser to pay the consideration offered or return the
Shares tendered promptly after the termination or withdrawal of the Offer and
(ii) Purchaser may not delay acceptance for payment of, or payment for, any
Shares upon the occurrence of any of the conditions specified in "Certain
Conditions of the Offer" without extending the period of time during which the
Offer is open.
In addition, Purchaser has agreed in the Merger Agreement that, without the
prior written consent of the Company, Purchaser will not amend the Offer to
(i) reduce the cash price per Share to be paid in the Offer, (ii) reduce the
number of Shares to be purchased under the Offer, (iii) change the form of
consideration to be paid in the Offer, (iv) increase the minimum number of
Shares which must be tendered to satisfy the Minimum Condition, (v) impose
additional conditions to the Offer or (vi) otherwise amend the terms of the
Offer in a manner that is materially adverse to the stockholders of the
Company.
3
<PAGE>
Any such extension, delay, termination, waiver or amendment will be
followed as promptly as practicable by public announcement thereof, such
announcement in the case of an extension to be made no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date. Subject to applicable law (including Rules 14d-4(c), 14d-6(d)
and 14e-1 under the 1934 Act, which require that material changes be promptly
disseminated to stockholders in a manner reasonably designed to inform them of
such changes) and without limiting the manner in which Purchaser may choose to
make any public announcement, Purchaser shall have no obligation to publish,
advertise or otherwise communicate any such public announcement other than by
issuing a press release to the Dow Jones News Service.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, Purchaser will extend the Offer to the extent required by Rules 14d-
4(c), 14d-6(d) and 14e-1 under the 1934 Act.
Subject to the terms of the Merger Agreement, if, prior to the Expiration
Date, Purchaser should decide to decrease the number of Shares being sought or
to increase or decrease the consideration being offered in the Offer, such
decrease in the number of Shares being sought or such increase or decrease in
the consideration being offered will be applicable to all stockholders whose
Shares are accepted for payment pursuant to the Offer and, if at the time
notice of any such decrease in the number of Shares being sought or such
increase or decrease in the consideration being offered is first published,
sent or given to holders of such Shares, the Offer is scheduled to expire at
any time earlier than the period ending on the tenth business day from and
including the date that such notice is first so published, sent or given, the
Offer will be extended at least until the expiration of such ten business day
period. For purposes of the Offer, a "business day" means any day other than a
Saturday, Sunday or United States federal holiday and consists of the time
period from 12:01 a.m. through 12:00 midnight, New York City time.
If, prior to the Expiration Date, Purchaser shall increase the
consideration offered to any holders of Shares pursuant to the Offer, such
increased consideration shall be paid to all holders of Shares that are
purchased pursuant to the Offer, whether or not such Shares were tendered
prior to such increase in consideration.
Consummation of the Offer is conditioned upon satisfaction of the Minimum
Condition and the other conditions specified in "Certain Conditions of the
Offer."
The Company has provided Purchaser with the Company's stockholder list and
security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of
Transmittal will be mailed to record holders of Shares whose names appear on
the Company's stockholder list and will be furnished, for subsequent
transmittal to beneficial owners of Shares, to brokers, dealers, commercial
banks, trust companies and similar persons whose names, or the names of whose
nominees, appear on the stockholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing.
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 properly
withdrawn, promptly after the Expiration Date.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance for payment of such Shares pursuant to
the Offer. Upon the terms and subject to the conditions of the Offer, payment
for Shares accepted for payment pursuant to the Offer will be made by deposit
of the purchase price therefor with the Depositary, which will act as agent
for tendering stockholders for the purpose of receiving payments from
Purchaser and transmitting such payments to tendering stockholders whose
Shares have been accepted for payment. UNDER NO CIRCUMSTANCES WILL INTEREST ON
THE PURCHASE PRICE FOR SHARES BE PAID, REGARDLESS OF ANY DELAY IN MAKING SUCH
PAYMENT.
4
<PAGE>
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) the
certificates evidencing such Shares (the "Share Certificates") or confirmation
(a "Book-Entry Confirmation") of a book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company (the "Book-Entry Transfer
Facility") pursuant to the procedures set forth in "Procedures for Accepting
the Offer and Tendering Shares," (ii) the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees or, in the case of a book-entry transfer, an Agent's
Message (as defined below) in lieu of the Letter of Transmittal and (iii) any
other documents required under the Letter of Transmittal.
If any tendered Shares are not accepted for payment for any reason pursuant
to the terms and conditions of the Offer, or if Share Certificates are
submitted evidencing more Shares than are tendered, Share Certificates
evidencing unpurchased Shares will be returned, without expense to the
tendering stockholder (or, in the case of Shares tendered by book-entry
transfer into the Depositary's account at the Book-Entry Transfer Facility
pursuant to the procedure set forth in "Procedures for Accepting the Offer and
Tendering Shares," such Shares will be credited to an account maintained at
the Book-Entry Transfer Facility), as promptly as practicable following the
expiration or termination of the Offer.
Purchaser reserves the right to transfer or assign, in whole or from time
to time in part, to one or more of its affiliates, the right to purchase all
or any portion of the Shares tendered pursuant to the Offer, but any such
transaction or assignment will not relieve Purchaser of its obligations under
the Offer and will in no way prejudice the rights of tendering stockholders to
receive payment for Shares validly tendered and accepted for payment pursuant
to the Offer.
Procedures for Accepting the Offer and Tendering Shares
In order for a holder of Shares to validly tender Shares pursuant to the
Offer, (i) the Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, together with any required signature guarantees
(or, in the case of a book-entry transfer, an Agent's Message in lieu of the
Letter of Transmittal) and any other documents required by the Letter of
Transmittal must be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase and either the Share
Certificates evidencing tendered Shares must be received by the Depositary at
such address or such Shares must be tendered pursuant to the procedure for
book-entry transfer described below and a Book-Entry Confirmation must be
received by the Depositary, in each case prior to the Expiration Date, or (ii)
the tendering stockholder must comply with the guaranteed delivery procedures
described below. The term "Agent's Message" means a message transmitted by the
Book-Entry Transfer Facility to and received by the Depositary and forming a
part of a Book-Entry Confirmation which states that the Book-Entry Transfer
Facility has received an express acknowledgment from the participant in the
Book-Entry Transfer Facility tendering the Shares, which are the subject of
such book-entry confirmation, 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 such participant.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT
THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Book-Entry Transfer
The Depositary will establish an account with respect to the Shares at the
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 the system of the Book-Entry Transfer Facility may make a
book-entry delivery of
5
<PAGE>
Shares by causing the Book-Entry Transfer Facility to transfer such Shares
into the Depositary's account at the Book-Entry Transfer Facility in
accordance with the Book-Entry Transfer Facility's procedures for such
transfer. However, although delivery of Shares may be effected through book-
entry transfer at the Book-Entry Transfer Facility, either the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed,
together with any required signature guarantees, or an Agent's Message in lieu
of the Letter of Transmittal, and any other required documents, must, in any
case, be received by the Depositary at one of its addresses set forth on the
back cover of this Offer to Purchase prior to the Expiration Date, or the
tendering stockholder must comply with the guaranteed delivery procedure
described below. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY
DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Signature Guarantees
Signatures on all Letters of Transmittal must be guaranteed by a firm which
is a member of a recognized Medallion Program approved by The Securities
Transfer Associations, Inc. (an "Eligible Institution"), except in cases where
Shares are tendered (i) by a registered holder of Shares who has not completed
the box entitled "Special Payment Instructions" on the Letter of Transmittal
or (ii) for the account of an Eligible Institution. If a Share Certificate is
registered in the name of a person other than the signer of the Letter of
Transmittal, or if payment is to be made, or a Share Certificate not accepted
for payment or not tendered is to be issued, in the name of a person other
than the registered holder(s), then the Share Certificate must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear on the Share Certificate, with the
signature(s) on such Share Certificate or stock powers guaranteed by an
Eligible Institution. See Instructions 1 and 5 of the Letter of Transmittal.
Guaranteed Delivery
If a stockholder desires to tender Shares pursuant to the Offer and the
Share Certificates evidencing such stockholder's Shares are not immediately
available or such stockholder cannot deliver the Share Certificates and all
other required documents to the Depositary prior to the Expiration Date, or
such stockholder cannot complete the procedure for delivery by book-entry
transfer on a timely basis, such Shares may nevertheless be tendered; provided
that all of the following conditions are satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by Purchaser, is
received prior to the Expiration Date by the Depositary as provided below;
and
(iii) the Share Certificates (or a Book-Entry Confirmation) evidencing
all tendered Shares, in proper form for transfer, in each case together
with the Letter of Transmittal (or a facsimile thereof), properly completed
and duly executed, with any required signature guarantees (or, in the case
of a book-entry transfer, an Agent's Message), and any other documents
required by the Letter of Transmittal are received by the Depositary within
three National Association of Securities Dealers, Inc. Automated Quotation
("Nasdaq") National Market System trading days after the date of execution
of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by telegram or facsimile transmission to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in the
form of Notice of Guaranteed Delivery made available by Purchaser.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of the
Share Certificates evidencing such Shares, or a Book-Entry Confirmation of the
delivery of such Shares, and the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees (or, in the case of a book-entry transfer, an Agent's Message), and
any other documents required by the Letter of Transmittal.
6
<PAGE>
Determination of Validity
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance for payment of any tender of Shares will be determined
by Purchaser in its sole discretion, which determination shall be final and
binding on all parties. Purchaser reserves the absolute right to reject any
and all tenders determined by it not to be in proper form or the acceptance
for payment of which may, in the opinion of its counsel, be unlawful. Subject
to the terms of the Merger Agreement, Purchaser also reserves the absolute
right to waive any condition of the Offer or any defect or irregularity in the
tender of any Shares of any particular stockholder, whether or not similar
defects or irregularities are waived in the case of other stockholders. No
tender of Shares will be deemed to have been validly made until all defects
and irregularities have been cured or waived. None of Purchaser, the Dealer
Manager, the Depositary, the Information Agent or any other person will be
under any duty to give notification of any defects or irregularities in
tenders or incur any liability for failure to give any such notification.
Purchaser's interpretation of the terms and conditions of the Offer (including
the Letter of Transmittal and the instructions thereto) will be final and
binding.
Other Requirements
By executing the Letter of Transmittal as set forth above, a tendering
stockholder irrevocably appoints designees of Purchaser as such stockholder's
proxies, each with full power of substitution, in the manner set forth in the
Letter of Transmittal, to the full extent of such stockholder's rights with
respect to the Shares tendered by such stockholder and accepted for payment by
Purchaser (and with respect to any and all other Shares or other securities
issued or issuable in respect of such Shares on or after November 15, 1999).
All such proxies shall be considered coupled with an interest in the tendered
Shares. Such appointment will be effective when, and only to the extent that,
Purchaser accepts such Shares for payment. Upon such acceptance for payment,
all prior proxies given by such stockholder with respect to such Shares (and
such other Shares and securities) will be revoked without further action, and
no subsequent proxies may be given nor any subsequent written consent executed
by such stockholder (and, if given or executed, will not be deemed to be
effective) with respect thereto. The designees of Purchaser will, with respect
to the Shares for which the appointment is effective, be empowered to exercise
all voting and other rights of such stockholder as they in their sole
discretion may deem proper at any annual or special meeting of the Company's
stockholders or any adjournment or postponement thereof, by written consent in
lieu of any such meeting or otherwise. Purchaser reserves the right to require
that, in order for Shares to be deemed validly tendered, immediately upon
Purchaser's payment for such Shares, Purchaser must be able to exercise full
voting rights with respect to such Shares.
The tender of Shares pursuant to any one of the procedures described above
will constitute the tendering stockholder's acceptance of the Offer, as well
as the tendering stockholder's representation and warranty that (a) such
stockholder owns the Shares being tendered within the meaning of Rule 14e-4
promulgated under the 1934 Act, (b) the tender of such Shares complies with
Rule 14e-4 and (c) such stockholder has the full power and authority to tender
and assign the Shares tendered, as specified in the Letter of Transmittal.
Purchaser's acceptance for payment of Shares tendered pursuant to the Offer
will constitute a binding agreement between the tendering stockholder and
Purchaser upon the terms and subject to the conditions of the Offer.
TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING WITH RESPECT TO PAYMENT TO
STOCKHOLDERS OF THE PURCHASE PRICE OF SHARES PURCHASED PURSUANT TO THE OFFER,
EACH UNITED STATES STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH SUCH
STOCKHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER OR SOCIAL SECURITY NUMBER
OR CERTIFY THAT SUCH STOCKHOLDER IS NOT SUBJECT TO BACKUP WITHHOLDING BY
COMPLETING THE SUBSTITUTE FORM W-9 IN THE LETTER OF TRANSMITTAL. IF BACKUP
WITHHOLDING APPLIES TO A STOCKHOLDER, THE DEPOSITARY IS REQUIRED TO WITHHOLD
31% OF ANY PAYMENTS MADE TO SUCH STOCKHOLDER. SEE INSTRUCTION 8 OF THE LETTER
OF TRANSMITTAL. IF A STOCKHOLDER IS A NONRESIDENT ALIEN OR FOREIGN ENTITY NOT
SUBJECT TO BACKUP WITHHOLDING, THE STOCKHOLDER IS URGED TO GIVE THE DEPOSITARY
A COMPLETED W-8BEN (CERTIFICATE OF FOREIGN STATUS) PRIOR TO RECEIPT OF
PAYMENT.
7
<PAGE>
Withdrawal Rights
Tenders of Shares made pursuant to the Offer are irrevocable except that
such Shares may be withdrawn at any time prior to the Expiration Date and,
unless theretofore accepted for payment by Purchaser pursuant to the Offer,
may also be withdrawn at any time after January 17, 2000. If Purchaser extends
the Offer, is delayed in its acceptance for payment of Shares or is unable to
accept Shares for payment pursuant to the Offer for any reason, then, without
prejudice to Purchaser's rights under the Offer, the Depositary may,
nevertheless, on behalf of Purchaser, retain tendered Shares, and such Shares
may not be withdrawn except to the extent that tendering stockholders are
entitled to withdrawal rights as described herein.
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 page of this Offer to
Purchase. Any such notice of withdrawal must specify the name, address and
taxpayer identification number of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the name of the registered
holder of such Shares, if different from that of the person who tendered such
Shares. If Share Certificates evidencing Shares to be withdrawn have been
delivered or otherwise identified to the Depositary, then, prior to the
physical release of such Share Certificates, the serial numbers shown on such
Share Certificates must be submitted to the Depositary and the signature(s) on
the notice of withdrawal must be guaranteed by an Eligible Institution, unless
such Shares have been tendered for the account of an Eligible Institution. If
Shares have been tendered pursuant to the procedure for book-entry transfer as
set forth in "Procedures for Accepting the Offer and Tendering Shares," any
notice of withdrawal must 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 time of receipt) of
any notice of withdrawal will be determined by Purchaser, in its sole
discretion, whose determination will be final and binding. None of Purchaser,
the Dealer Manager, the Depositary, the Information Agent or any other person
will be under duty to give notification of any defects or irregularities in
any notice of withdrawal or incur any liability for failure to give any such
notification.
Any Shares properly withdrawn will thereafter be deemed not to have been
validly tendered for purposes of the Offer. However, withdrawn Shares may be
re-tendered at any time prior to the Expiration Date by following one of the
procedures described in "Procedures for Accepting the Offer and Tendering
Shares."
Certain United States Federal Income Tax Considerations
The receipt of cash pursuant to the Offer or the Merger will constitute a
taxable transaction for federal income tax purposes under the Internal Revenue
Code of 1986, as amended (the "Code"), and may also constitute a taxable
transaction under applicable state, local, foreign and other tax laws. As a
result, a tendering stockholder will generally recognize gain or loss for
federal income tax purposes in an amount equal to the difference between the
amount of cash received by the stockholder pursuant to the Offer or the Merger
and such stockholder's aggregate adjusted tax basis in the Shares tendered and
purchased pursuant to the Offer or the Merger. Gain or loss will be calculated
separately for each block of Shares tendered and purchased pursuant to the
Offer or the Merger. If tendered Shares are held by a tendering stockholder as
capital assets (within the meaning of Section 1221 of the Code), any gain or
loss recognized by the tendering stockholder will constitute capital gain or
loss, and will constitute long-term capital gain or loss if the tendering
stockholder held the underlying Shares for more than 12 months as of the date
of disposition.
A stockholder that tenders Shares may be subject to backup withholding
unless the stockholder provides its taxpayer identification number and
certifies that such number is correct or properly certifies that it is
awaiting a taxpayer identification number, or unless an exemption applies. A
stockholder who does not furnish its taxpayer identification number may be
subject to a penalty imposed by the Internal Revenue Service. See "Procedures
for Accepting the Offer and Tendering the Shares."
If backup withholding applies to a stockholder, the Depositary is required
to withhold 31% from payments to such stockholder. Backup withholding is not
an additional tax. Rather, the amount of the backup withholding
8
<PAGE>
can be credited against the federal income tax liability of the person subject
to the backup withholding, provided that the required information is given to
the Internal Revenue Service. If backup withholding results in an overpayment
of tax, a refund can be obtained by the stockholder upon filing an appropriate
income tax return.
The foregoing discussion may not be applicable with respect to Shares
received pursuant to the exercise of employee stock options or otherwise as
compensation or to stockholders who perfect their appraisal rights under
Delaware Law or with respect to holders of Shares who are subject to special
tax treatment under the Code, such as non-U.S. persons, life insurance
companies, dealers in securities, tax-exempt organizations and financial
institutions, and may not apply to a holder of Shares in light of its
individual circumstances.
THE SUMMARY OF TAX CONSEQUENCES SET FORTH ABOVE IS FOR GENERAL INFORMATION
ONLY AND IS BASED ON THE LAW AS CURRENTLY IN EFFECT. STOCKHOLDERS ARE URGED TO
CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO
THEM (INCLUDING THE APPLICATION AND EFFECT OF ANY STATE, LOCAL OR FOREIGN
INCOME AND OTHER TAX LAWS) OF THE OFFER AND THE MERGER.
Price Range of Shares; Dividends
The Shares are traded on the Nasdaq National Market System under the symbol
"AEIC". The following table sets forth, for the periods indicated, the high
and low sale prices per Share (as quoted on the Nasdaq National Market System,
as reported in the Company's Annual Report on Form 10-K for the year ended
December 31, 1998 with respect to the fiscal years ended December 31, 1997 and
December 31, 1998, and thereafter as reported in published financial sources)
and cash dividends paid per Share.
<TABLE>
<CAPTION>
Market Price
------------------ Dividends
High Low Declared
--------- -------- ---------
<S> <C> <C> <C>
1997
First Quarter................................. $22 1/8 $19 7/8 $0.04
Second Quarter................................ 26 5/8 20 1/2 0.05
Third Quarter................................. 36 1/2 24 1/2 0.05
Fourth Quarter................................ 37 1/8 26 3/8 0.05
1998
First Quarter................................. $31 3/8 $24 5/16 0.05
Second Quarter................................ 29 3/8 24 1/8 0.06
Third Quarter................................. 29 15 1/4 0.06
Fourth Quarter................................ 25 7/8 14 1/4 0.06
1999
First Quarter................................. $22 5/8 $14 1/8 $0.06
Second Quarter................................ 30 14 7/8 0.07
Third Quarter................................. 27 15/16 20 3/4 0.07
Fourth Quarter (through November 12).......... 32 11/16 20 3/4 --
</TABLE>
On November 12, 1999, there were 33,628,769 outstanding Shares.
On November 11, 1999, the last full day of trading before the public
announcement of the execution of the Merger Agreement, the closing price of
the Shares on the Nasdaq National Market System was $30 9/16 per Share. On
November 12, 1999, trading on the Nasdaq National Market was suspended at
approximately 2:50 p.m. (New York time) due to market rumors of an impending
transaction involving the Company. On November 12, 1999, the last reported
sales price was $32 1/2 per Share. On November 18, 1999, the last full day of
trading before the commencement of the Offer, the closing price of the Shares
on the Nasdaq National Market System was $32 1/8 per Share. Stockholders are
urged to obtain a current market quotation for the Shares.
9
<PAGE>
Certain Information Concerning the Company
General
The Company is a Delaware corporation with its principal offices located at
120 Tokeneke Road, Darien, Connecticut 06820. According to the Company's Form
10-K for the fiscal year ended December 31, 1998, the Company is the oldest
and largest international airfreight forwarder based in the United States and
a leading provider of global logistics services for importers and exporters
worldwide. The Company is primarily engaged in providing cargo transportation
logistics management, including international air and ocean freight
forwarding, customs brokerage and warehousing and distribution services.
The Company is subject to the informational filing requirements of the 1934
Act and, in accordance therewith, is required to file periodic reports, proxy
statements and other information with the Commission relating to its business,
financial condition and other matters. Such reports, proxy statements and
other information can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and at the Commission's regional offices located at
Seven World Trade Center, Suite 1300, New York, New York 10048 and Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Information regarding the public reference facilities may be obtained from the
Commission by telephoning 1-800-SEC-0330. The Company's filings are also
available to the public on the Commission's internet site
(http://www.sec.gov). Copies of such materials may also be obtained by mail
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Such material should also be
available for inspection at the offices of Nasdaq National Market operations,
1735 K Street, N.W., Washington D.C. 20006.
Selected Financial Information
The following selected consolidated financial data relating to the Company
and its subsidiaries has been taken or derived from the audited financial
statements contained in the Company's Form 10-Ks for the fiscal years ended
December 31, 1998, December 31, 1997 and December 31, 1996, respectively, and
the unaudited financial statements contained in the Company's quarterly
reports on Form 10-Q for its fiscal quarters ended September 30, 1998 and
September 30, 1999, respectively. More comprehensive financial information is
included in the Company's Form 10-Ks and Form 10-Qs and the other documents
filed by the Company with Commission, and the financial data set forth below
is qualified in its entirety by reference to such reports and other documents
and all of the financial statements and notes contained therein. Such reports
and other documents may be examined and copies may be obtained from the
offices of the Commission in the manner set forth above.
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
(unaudited) Year Ended December 31,
--------------------- --------------------------------
1999 1998 1998 1997 1996
---------- ---------- ---------- ---------- ----------
(Amounts in Thousands, Except Per Share Amounts)
<S> <C> <C> <C> <C> <C>
Revenues................ $1,135,485 $1,123,831 $1,513,196 $1,545,720 $1,335,447
Operating profit........ 49,741 51,423 62,074 70,912 58,755
Income before taxes..... 62,096 57,828 69,502 79,122 62,096
Net income.............. 39,120 36,401 43,756 49,451 38,500
Earnings per share:
Basic................. 1.17 1.05 1.27 1.44 1.23
Diluted............... 1.15 1.04 1.26 1.41 1.16
At end of period:
Total current assets.. 457,874 430,403 440,947 442,079 399,134
Total assets.......... 711,018 652,763 675,478 634,570 581,329
Long-term debt........ 51,250 35,910 42,578 31,008 16,612
Stockholders'
investment........... 327,037 299,786 310,871 291,562 259,086
</TABLE>
Except as otherwise stated in this Offer to Purchase, the information
concerning the Company contained herein has been taken from or is based upon
reports and other documents on file with the Commission or
10
<PAGE>
otherwise publicly available. Although neither Purchaser nor Parent have any
knowledge that would indicate that any statements contained herein based upon
such reports and documents are untrue, neither Purchaser nor Parent takes any
responsibility for the accuracy or completeness of the information contained
in such reports and other documents or for any failure by the Company to
disclose events that may have occurred and may affect the significance or
accuracy of any such information but that are unknown to Purchaser or Parent.
Certain Projections
The Company does not, as a matter of course, make public any forecasts as
to its future financial performance. However, in connection with Parent's
review of the transactions contemplated by the Offer and the Merger, the
Company has provided Parent with certain nonpublic information concerning the
Company and its subsidiaries. Such information included, among other things,
the Company's projections of consolidated net revenues, operating expenses,
income before income taxes, net income and earnings per share for the Company
for the fiscal years 1999 through 2002. Set forth below is a summary of such
projections. These projections should be read together with the financial
statements of the Company referred to herein.
<TABLE>
<CAPTION>
Fiscal Year Ended December 31,
---------------------------------------------------
1999 2000 2001 2002
------------ ------------ ------------ ------------
(Amounts in Thousands, Except Per Share Amounts)
<S> <C> <C> <C> <C>
Net Revenue............. $ 528,323 $ 595,000 $ 656,000 $ 723,000
Operating Expenses:
Terminal.............. 296,266 333,000 361,000 389,000
Selling, general and
administration....... 157,908 174,000 190,000 207,000
Income before Income
Taxes.................. 80,746 96,300 115,700 141,000
Net Income.............. 51,025 60,800 72,800 88,800
Earnings per Share:
Basic................. 1.52 1.81 2.17 2.64
Diluted............... 1.50 1.79 2.15 2.62
</TABLE>
The foregoing projections were prepared solely for internal use and not
with a view to public disclosure or compliance with the published guidelines
of the Commission or the American Institute of Certified Public Accountants
regarding projections and were not prepared with the assistance of, or
reviewed by, independent accountants. Such projections are included by
Purchaser in this Offer to Purchase solely because such information was
furnished to Parent and Purchaser by the Company. The projections were not
prepared in accordance with generally accepted accounting principles and were
not audited or reviewed by any independent accounting firm, nor did any such
firm perform any other services with respect thereto. While presented with
numerical specificity, the projections are based on a variety of assumptions
relating to the businesses of the Company, industry performance, general
business and economic conditions, and other matters which are inherently
subject to significant uncertainties and contingencies, many of which are
beyond the Company's control and are not capable of precise prediction. These
assumptions involve judgments with respect to, among other things, future
economic and competitive conditions, inflation rates and future business
conditions. Therefore, such projections are inherently imprecise and there can
be no assurance that they will prove to be reliable. Also, actual future
results may vary materially from those shown in the projections. None of
Parent, Purchaser, the Company, Morgan Stanley or Deutsche Bank is under any
obligation to or has any intention to update the projections at any future
time and the inclusion of such projected information in this Offer to Purchase
should not be regarded as a representation by any such persons that such
projected outcomes will be achieved.
11
<PAGE>
Certain Information Concerning Parent and Purchaser
General
Parent is a German corporation with its principal offices located at
Heinrich-von-Stephan-Str. 1, 53175 Bonn, Germany. Parent is Europe's largest
postal company and is principally engaged in letter services and logistics.
Parent's principal business involves the transportation of letters and parcels
up to 31.5 kg. In addition to providing letter and parcel services, Parent
provides its customers with an array of global logistics services, including
warehousing and distribution services and freight forwarding.
Purchaser is a Delaware corporation with its principal offices located at
Heinrich-von-Stephan-Str. 1, 53175 Bonn, Germany. Purchaser is a wholly-owned
subsidiary of Parent. Purchaser was organized on November 12, 1999 and has not
carried on any activities other than in connection with the Merger Agreement.
The name, citizenship, business address, principal occupation or employment
and five-year employment history for each of the directors and executive
officers of Parent and Purchaser and certain other information are set forth
in Schedule I hereto.
The consolidated financial statements of Deutsche Post AG were prepared in
accordance with the accounting rules of the German Commercial Code (sections
290ff), and are published in German Deutsche Marks ("DM").
DEUTSCHE POST AG
SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------
1998(1)
in U.S.
Dollars 1998 1997 1996
------- -------- -------- --------
(Amounts in Millions)
<S> <C> <C> <C> <C>
Income Statement Data:
Net sales................................. $17,210 DM28,689 DM27,640 DM27,469
Operating income.......................... 765 1,276 758 643
Net income................................ 190 318 (402) 393
Balance Sheet Data:
Current assets............................ $ 5,262 DM8,771 DM5,081 DM3,859
Total assets.............................. 14,845 24,747 22,374 20,455
Long-term debt (including current
portion)................................. 1,640 2,734 3,032 3,579
Shareholder's equity...................... 3,244 5,408 6,141 5,721
</TABLE>
- --------
(1) DM amounts have been translated into U.S. Dollars using the December 31,
1998 exchange rate of $1.00 = DM1.6670.
For the six months ended June 30, 1999, Parent had net sales of DM19,742
million ($11,843 million), operating income of DM982 million ($589 million)
and net income of DM424 million ($254 million). DM amounts for the six months
ended June 30, 1999 have been translated into U.S. Dollars using the December
31, 1998 exchange rate of $1.00 = DM1.6670.
12
<PAGE>
The following table sets forth, for the periods and dates indicated,
certain information concerning the exchange rate between DM and U.S. Dollars
based on the noon buying rate in The City of New York for cable transfers in
DM, as certified for customs purposes by the Federal Reserve Bank of New York
(the "Noon Buying Rate") (expressed as DM per U.S. Dollar). For the period
starting on January 1, 1999, the table reflects the conversion of the Noon
Buying Rate for Euro to DM at the legally fixed conversion rate of (Euro)1.00
= DM1.95583. From January 1, 1999, upon the introduction of the Euro, until
December 31, 2001, Germany and each other country which is part of the
European Monetary Union may use two currencies (the Euro and its local
currency). During this transitional period, the exchange rate between Euro and
DM is legally fixed at the exchange rate stated above. On January 1, 2002, DM
will cease to exist.
<TABLE>
<CAPTION>
DM per U.S. Dollar
---------------------------------
Period-end Average
Calendar Year Rate Rate (1) High Low
------------- ---------- -------- ------ ------
<S> <C> <C> <C> <C>
1996....................................... 1.5387 1.5070 1.5835 1.4354
1997....................................... 1.7991 1.7394 1.8810 1.5413
1998....................................... 1.6670 1.7588 1.8542 1.6060
1999 (through November 12, 1999)........... 1.8961 1.8354 1.9290 1.6558
</TABLE>
- --------
(1) The average of the Noon Buying Rate on the last business day of each full
month during the relevant period with the exception of 1999 which is the
average of the last business day of each month and the average of each
business day thereafter.
Except as described in this Offer to Purchase, (i) none of Parent,
Purchaser nor, to the best knowledge of Parent and Purchaser, any of the
persons listed in Schedule I to this Offer to Purchase or any associate or
majority-owned subsidiary of Parent or Purchaser or any of the persons so
listed beneficially owns or has any right to acquire, directly or indirectly,
any Shares and (ii) none of Parent, Purchaser nor, to the best knowledge of
Parent and Purchaser, any of the persons or entities referred to above nor any
director, executive officer or subsidiary of any of the foregoing has effected
any transaction in the Shares during the past 60 days.
Except as provided in the Merger Agreement or as otherwise described in
this Offer to Purchase, none of Parent, Purchaser nor, to the best knowledge
of Parent and Purchaser, any of the persons listed in Schedule 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, but
not limited to, any contract, arrangement, understanding or relationship
concerning the transfer or voting of such securities, finder's fees, joint
ventures, loan or option arrangements, puts or call, guarantees of loans,
guarantees against loss, guarantees of profits, division of profits or loss or
the giving or withholding of proxies.
Except as set forth in this Offer to Purchase, since January 1, 1996, none
of Parent, Purchaser nor, to the best knowledge of Parent and Purchaser, any
of the persons listed on Schedule I hereto, has had any business relationship
or transaction with the Company or any of its executive officers, directors or
affiliates that is required to be reported under the rules and regulations of
the Commission applicable to the Offer. Except as set forth in this Offer to
Purchase, since January 1, 1996, there have been no contracts, negotiations or
transactions between Parent or any of its subsidiaries or, to the best
knowledge of Parent, any of the persons listed in Schedule I to this Offer to
Purchase, on the one hand, and the Company or its affiliates, on the other
hand, concerning a merger, consolidation or acquisition, tender offer or other
acquisition of securities, an election of directors or a sale or other
transfer of a material amount of assets.
Source and Amount of Funds
The total amount of funds required by Purchaser to purchase Shares pursuant
to the Offer and the Merger is estimated to be approximately $1.14 billion.
Purchaser will obtain such funds from Parent. Parent will obtain such funds
from its general corporate funds, and if necessary, by drawing upon three of
Parent's committed lines of credit at three German banks. Such lines of credit
total approximately $1.46 billion. There are no conditions to drawdown under
such lines of credit which Parent believes will not be satisfied at or prior
to the Expiration
13
<PAGE>
Date. Parent expects that any such borrowings would be repaid from general
corporate funds or from proceeds of further borrowings (the interest rates and
other terms of which would depend upon market conditions and other factors
prevailing at such time or times as such borrowings are made).
By credit confirmation dated April 20, 1999, Bayerische Landesbank
Girozentrale extended to Parent a credit line in the amount of DM 1.5 billion.
This line of credit is unsecured and is available to Parent until April 19,
2000 with interest rates to be determined at the time of borrowing.
By agreement dated June 2, 1999 between Parent and Westdeutsche Landesbank
Girozentrale, London Branch ("WestLB"), WestLB extended to Parent a credit
line of (Euro)150 million. This line of credit is unsecured and is available
to Parent until June 1, 2000 with interest rates to be determined at the time
of borrowing.
By credit confirmation dated November 15, 1999, Deutsche Postbank AG
extended to Parent a credit line in the amount of DM 1 billion. This line of
credit is unsecured and is available to Parent until November 15, 2000 and
provides for loans with fixed or floating rates of interest to be determined
at the time of borrowing.
Background of the Offer; Past Contacts or Negotiations with the Company
Interested in expanding its international freight forwarding operations,
Parent, through its Swiss subsidiary Danzas Holding Ltd. ("Danzas"), began in
January of 1999 to investigate possible acquisitions of freight forwarding
companies. Shortly thereafter, representatives of the Danzas Intercontinental
Business Unit, contacted representatives of the Company to express Parent's
interest in a possible strategic transaction with the Company. (All references
to Parent in this section shall include Danzas.)
At approximately the same time, as a result of increasing competition and
consolidation in the industry in which the Company's business is conducted,
the Company Board had been actively studying the Company's strategic position,
near and long-term prospects and as a result began reviewing its strategic
alternatives, including alternatives to remaining an independent company, in
order to increase stockholder value.
In April of 1999, a meeting of the Company Board was held at which it was
announced that four unrelated third parties, one of which was Parent, had
contacted the Company to express an interest in pursuing a strategic
transaction with the Company. Representatives of Morgan Stanley attended the
meeting and Morgan Stanley was retained to advise the Company Board in
connection with pursuing its strategic alternatives. The Company Board
authorized Morgan Stanley to approach each of the four parties and assess
their level of interest in entering into a strategic transaction with the
Company. Morgan Stanley proceeded to contact these four parties and forwarded
to each interested party public information regarding the Company. Parent
expressed the greatest level of interest in exploring a strategic transaction
with the Company.
During the period from June through July of 1999, senior management from
the Company and Parent engaged in preliminary discussions regarding a possible
strategic transaction, including an acquisition of the Company by Parent. The
parties discussed each other's growth strategies and issues relating to
integrating their respective businesses, including systems compatibility,
potential revenue losses and likely synergies.
In anticipation of conducting a financial, legal and other due diligence
review of the Company, Danzas executed a confidentiality and standstill
agreement dated as of July 12, 1999.
On August 2, 1999, senior officers of the Company and Parent and
representatives from Morgan Stanley met. At that meeting, the Company provided
to Parent certain confidential information regarding the Company and its
business, and the parties discussed the possibility of a strategic
transaction.
Throughout August of 1999, Parent, together with representatives of the
management consulting firm McKinsey & Company ("McKinsey") and representatives
of Deutsche Bank, Parent's financial advisor, analyzed the Company, its
activities and its prospects as a potential acquisition candidate.
14
<PAGE>
During August and September of 1999, Parent met with its financial and
legal advisors to discuss various alternatives for a strategic transaction
with the Company, including the purchase of a minority stake in the Company,
the purchase of 51% of the Company and a 100% acquisition of the Company.
During the months of September and October of 1999, executive officers of
the Company met with representatives of Parent on several occasions to further
discuss the possibility of a strategic transaction and to allow Parent to
conduct certain basic business due diligence concerning the Company.
On September 24, 1999, a meeting was held between senior officers of the
Company and senior officers of Parent. At this meeting, Mr. Hendrik Hartong,
Chairman of the Company Board, informed Dr. Klaus Zumwinkel, Chairman of
Parent's Management Board, that the Company Board was of the belief that a
100% acquisition would create the greatest value for the Company's
stockholders.
In meetings on October 14 and 15, 1999, Parent communicated to the Company
a preliminary indication of interest to acquire the Company at a price of $29
per Share, subject to completion of business, legal and other due diligence,
negotiation of a satisfactory definitive acquisition agreement and receipt of
Parent Supervisory Board approval. The Company indicated to Parent that the
proposed price of $29 per Share was unsatisfactory to the Company. However, on
the understanding that Parent would be prepared to increase its indication of
interest above $29 per Share, the Company agreed to permit Parent to continue
its due diligence review in order to better evaluate the Company.
From October 18 to October 20, 1999, additional commercial due diligence
took place. Senior management of the Company briefed senior management of
Parent on the Company's business and current and future growth strategies.
On October 21, 1999, Parent communicated to the Company a revised
preliminary indication of interest at $31 per Share, subject to completion of
business, legal and other due diligence, negotiation of a satisfactory
definitive acquisition agreement and receipt of Parent Supervisory Board
approval.
On October 22, 1999, the Company Board held a special meeting to review the
revised preliminary indication of interest and, after consideration and
consultation with Morgan Stanley, indicated that the revised price was
inadequate.
On November 2, 1999, Parent communicated to the Company a revised
preliminary indication of interest at $33 per Share, subject to completion of
business, legal and other due diligence, negotiation of a satisfactory
definitive acquisition agreement, and receipt of Parent Supervisory Board
approval.
On November 3, 1999, the Company Board held a special meeting (i) approving
the continued due diligence by Parent and (ii) authorizing the Company's
representatives to negotiate with representatives of Parent to determine
whether a mutually satisfactory agreement could be reached. Due diligence by
and negotiations with representatives of Parent continued through November 13,
1999.
On November 8, 1999, the Company signed an exclusivity agreement in which
the Company confirmed it had ceased all discussions and negotiations with
other parties and, subject to certain exceptions, agreed to negotiate
exclusively with Parent until November 15, 1999.
Between November 4 and November 12, Parent and its legal, financial, tax,
and benefits advisors conducted extensive due diligence of the Company. During
the same time period, the Company, Cummings & Lockwood, the Company's counsel,
Parent and Davis Polk & Wardwell, Parent's counsel, reviewed and negotiated
the terms of a definitive merger agreement.
15
<PAGE>
On November 13, 1999, Parent's Supervisory Board met to discuss the
proposed transaction and a draft of the Merger Agreement. At the conclusion of
the meeting, the Supervisory Board approved the Merger Agreement and the
transactions contemplated thereby.
On November 13, 1999, the Company Board held a special telephonic meeting
to review the terms of the proposed transaction and a draft of the Merger
Agreement. The Company Board, after analyzing the Company's current position
and analyzing and reviewing the Offer and the Merger Agreement, unanimously
approved the Merger Agreement and the transactions contemplated thereby and
unanimously recommended that all of the Company's stockholders accept the
Offer and tender their Shares pursuant to the Offer and approve the Merger
Agreement.
The Merger Agreement was executed by the parties on November 14, 1999, and
publicly announced by both parties on November 15, 1999.
The Merger Agreement; Other Arrangements
The Merger Agreement
The following is a summary of the material provisions of the Merger
Agreement, a copy of which is filed as an exhibit to the Tender Offer
Statement on Schedule 14D-1 filed by Parent and Purchaser pursuant to Rule
14d-3 of the General Rules and Regulations under the 1934 Act with the
Commission in connection with the Offer (the "Schedule 14D-1"). The summary is
qualified in its entirety by reference to the Merger Agreement.
The Offer
The Merger Agreement provides for the making of the Offer. The obligation
of Purchaser to accept for payment and pay for Shares tendered pursuant to the
Offer is subject to the satisfaction or waiver of the Minimum Condition and
certain other conditions that are described in "Certain Conditions of the
Offer." Pursuant to the Merger Agreement, Purchaser may waive any condition to
the Offer or change any of the terms or conditions of the Offer, except that,
without the prior written approval of the Company, Purchaser may not reduce
the cash price per Share, change the form of consideration to be paid in the
Offer, reduce the number of Shares to be purchased, increase the minimum
number of Shares which must be tendered to satisfy the Minimum Condition,
impose additional conditions to the Offer, or otherwise amend the terms of the
Offer in a manner that is materially adverse to the stockholders of the
Company.
For information concerning directors of the Company prior to consummation
of the Merger, see "Purpose of the Offer; Plans for the Company."
Directors
The Merger Agreement provides that effective upon the acceptance for
payment of Shares, Parent shall be entitled, subject to applicable law, to
designate the number of directors, rounded up to the next whole number, on the
Company Board that equals the product of (i) the total number of directors on
the Company Board and (ii) the percentage that the number of votes represented
by Shares beneficially owned by Parent (including Shares accepted for payment
pursuant to the Offer) bears to the total number of votes represented by
Shares then outstanding. The Company has agreed promptly to take all action
(including, without limitation, increasing the number of Directors and
securing the resignations of incumbent directors) necessary to cause Parent's
designees to be elected or appointed to the Company Board.
If Parent exercises its right to designate directors, Parent currently
intends to designate one or more of the persons listed on Schedule I(C) hereto
to serve as directors of the Company. The foregoing and certain other
information contained in this Offer to Purchase and Schedule I hereto and in
the Schedule 14D-9 being mailed to stockholders herewith are being provided in
accordance with the requirements of Section 14(f) of the 1934 Act and Rule
14f-1 thereunder.
16
<PAGE>
The Merger Agreement provides that if Parent's designees are elected to the
Company Board, the Company Board shall have, until the Effective Time, at
least two directors who are directors as of the date hereof and who are not
officers or affiliates of the Company, Parent or any of their respective
subsidiaries (the "Independent Directors"). In such case, any amendment or
termination of the Merger Agreement by the Company, or any waiver by the
Company of any obligation of Parent or Purchaser, may be effected only by the
action of a majority of the Independent Directors.
Stock Options
Upon consummation of the Offer, the options to purchase Shares ("Stock
Options") outstanding under the Company's stock option and other compensation
plans, whether or not then vested or exercisable, shall automatically be
converted into the right to receive cash in an amount equal to (i) the excess
of the Merger Consideration over the exercise price per Share provided in such
Stock Option, multiplied by (ii) the number of Shares subject to such Stock
Option.
The Merger
The Merger Agreement provides that as promptly as practicable after all
conditions to the Merger set forth therein have been satisfied or, to the
extent permitted thereunder, waived, but in no event later than two business
days thereafter, Purchaser will be merged into the Company in accordance with
Delaware Law. As a result of the Merger, the separate existence of Purchaser
will cease, and the Company will continue as the Surviving Company.
Pursuant to the Merger, each Share outstanding immediately prior to the
Effective Time (other than Shares beneficially owned by Parent and Shares held
by the Company in treasury) will be converted into the right to receive the
Merger Consideration except as described below. Stockholders who perfect their
right to appraisal of their Shares under Delaware Law shall be entitled to the
amounts determined pursuant to such proceedings. See "Purpose of the Offer;
Plans for the Company."
Representations and Warranties
The Merger Agreement contains customary representations and warranties of
the parties thereto, including representations by the Company as to its
corporate existence and power, capitalization, corporate authorizations,
subsidiaries, Commission filings, financial statements, absence of certain
changes (including any change or effect that, individually or in the
aggregate, is or could reasonably be expected to be materially adverse to the
business, assets, prospects, financial condition or results of operations of
the Company and its subsidiaries, taken as a whole, other than those changes
in economic or financial conditions generally or affecting the freight
forwarding and global logistics industries generally (a "Material Adverse
Effect"), absence of undisclosed material liabilities, government
authorizations, no violations, absence of litigation, compliance with laws,
employee matters, labor matters, certain contracts, taxes, intellectual
property, brokers, antitakeover statutes, year 2000 compliance, proxy
statement information, recommendation documents and customs broker licenses
and approvals.
Covenants
The Merger Agreement contains various customary covenants of the parties
thereto. A description of certain of these covenants follows:
Conduct of Business. Prior to the date on which Parent's designees
constitute a majority of the Company Board (the "Control Date") or earlier
termination of the Merger Agreement, except as otherwise set forth in the
Merger Agreement, neither the Company nor any of its subsidiaries will
directly or indirectly do any of the following without Parent's prior written
consent, which shall not unreasonably be withheld:
(i) amend or otherwise change its certificate of incorporation or by-
laws;
17
<PAGE>
(ii) issue, sell, pledge, dispose of or encumber, any of its capital
stock or any options, warrants, convertible securities or other rights of
any kind to acquire any capital stock (except for the issuance of Shares
pursuant to Stock Options outstanding as of the date of the Merger
Agreement);
(iii) sell, lease, license or otherwise dispose of or encumber any
assets except (a) in the ordinary course of business consistent with past
practice or (b) obsolete, worthless, or immaterial assets not in excess of
$1,000,000 in the aggregate;
(iv) (a) declare, set aside, or pay any dividend except for a dividend
declared and paid by a subsidiary to the Company, (b) split, combine or
reclassify any class of capital stock or issue or authorize or propose the
issuance of any other securities in substitution for shares of its capital
stock or (c) amend the terms of, or repurchase, redeem or otherwise acquire
any securities of the Company or any subsidiary, except for repurchases of
the capital stock of any subsidiaries in accordance with contractual
obligations entered into in connection with joint ventures which were
entered into in the ordinary course of business consistent with past
practice;
(v) (a) acquire any company, corporation, partnership, or other business
organization or division thereof or acquire a material amount of stock or
assets of any other person, (b) incur any indebtedness for borrowed money
or issue any debt securities (except in the ordinary course and in amounts
less than $2,000,000 in the aggregate) or assume, guarantee, endorse or
otherwise become responsible for the obligations of any person (other than
guarantees of indebtedness of a wholly-owned subsidiary of the Company), or
make any loans or advances, except in the ordinary course of business
consistent with past practice and in amounts not in excess of $1,000,000 in
the aggregate, (c) enter into or amend any material contract except in the
ordinary course of business and only in a manner that does not have a
Material Adverse Effect, or (d) authorize any new capital expenditures or
purchase of fixed assets except in the ordinary course of business
consistent with past practice and in amounts not in excess of $5,000,000 in
the aggregate;
(vi) increase the compensation payable to its officers or employees,
except for increases in salary or wages of employees who are not officers
of the Company in the ordinary course of business and not in excess of 5%
of the aggregate annual salary or wages of all such employees, or grant any
new severance or termination pay to, or enter into any new employment or
severance agreement with any director, officer or employee or establish,
adopt or enter into or amend any collective bargaining, bonus, profit
sharing, thrift, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment, termination, severance or
other plan, agreement, trust, fund, policy or arrangement for the benefit
of any current or former directors, officers or employees, except, in each
case, as may be required by law, and except that the foregoing shall not
restrict the routine hiring of new lower level personnel in the ordinary
course of business consistent with past practice, immaterial changes in
policies affecting the workplace generally, or any of the foregoing
restrictions not including officers or directors of the Company that will
not, in the aggregate, increase the obligations of the Company thereunder
by more than $150,000;
(vii) change accounting policies or procedures, except for changes which
may be required under United States generally accepted accounting
principles or pursuant to Commission rules or regulations;
(viii) make any material tax election inconsistent with past practices
or settle or compromise any material federal, state, local or foreign tax
liability or agree to an extension of a statute of limitations;
(ix) pay, discharge or satisfy any material claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise) other than in the ordinary course of business consistent with
past practice of liabilities reflected or reserved against in the financial
statements included in its Commission filings or incurred in the ordinary
course of business and consistent with past practice; or
(x) take or agree to take any of the actions described above, or any
action which would make any of the representations or warranties of the
Company contained in the Merger Agreement untrue or incorrect in any
material respect or prevent the Company from performing or cause the
Company not to perform its covenants under the Merger Agreement in any
material respect.
18
<PAGE>
No Solicitation. Prior to the Control Date or earlier termination of the
Merger Agreement, the Company and its subsidiaries shall not, and shall cause
their officers, directors, employees, investment bankers, attorneys,
accountants, or other representatives not to, directly or indirectly, (i)
initiate, solicit or encourage the making, submission or announcement of any
Alternative Transaction (as hereinafter defined) (ii) take any other action
intended to facilitate any inquiries or the making of any proposal to effect
an Alternative Transaction, (iii) approve, endorse or recommend any
Alternative Transaction, (iv) enter into any letter of intent or similar
document or contract contemplating or otherwise relating to any Alternative
Transaction, (v) enter into discussions or negotiate with or disclose any
nonpublic information relating to the Company or any of its subsidiaries to
any person regarding an Alternative Transaction, or (vi) grant any waiver or
release under any standstill or similar agreement with respect to any class of
equity securities of the Company or any of its subsidiaries. The Company will
notify Parent promptly (but in no event later than 48 hours) after receipt by
the Company of any Alternative Transaction, any indication that any person is
considering proposing an Alternative Transaction or any request for nonpublic
information relating to the Company or any of its subsidiaries. The Company
shall identify the person proposing, and the terms and conditions of, any such
Alternative Transaction, indication or request and shall keep Parent fully
informed, on a current basis, of the status and details of any such
Alternative Transaction or request. Nothing contained in the Merger Agreement
shall prevent the Company Board from complying with Rule 14e-2 under the 1934
Act with respect to any Alternative Transaction.
Notwithstanding the foregoing, the Company Board is permitted to furnish
nonpublic information to, or enter into discussions or negotiations with, any
person in response to a Superior Proposal if (i) the Company has complied in
all material respects with the foregoing provisions of the "No Solicitation"
covenant, (ii) the Company Board determines in good faith, based on advice of
outside legal counsel, that it is reasonably likely that the failure to
consider the Superior Proposal would constitute a breach of its fiduciary
duties under applicable law, (iii) such person enters into a confidentiality
agreement with the Company with terms no less favorable to the Company than
those contained in the Confidentiality Agreement, and (iv) the Company shall
have given Parent written notice of the identity of such person and of the
Company's intention to take such action.
The Company Board shall be permitted to withdraw, or modify in a manner
adverse to Parent, its recommendation that the stockholders accept the Offer
and approve the Merger, if (i) the Company has complied in all material
respects with the foregoing provisions of the "No Solicitation" covenant, (ii)
a Superior Proposal is pending at the time the Company Board determines to
take such action, (iii) the Company Board determines in good faith, based on
advice of outside legal counsel, that it is reasonably likely that the failure
to do so would constitute a breach of its fiduciary duties under applicable
law, and (iv) the Company shall have delivered to Parent a prior written
notice advising Parent that it intends to take such action.
"Alternative Transaction" means any inquiry, proposal or offer for, or any
indication of interest in (other than the transactions contemplated by the
Merger Agreement) among other things, any merger, consolidation, amalgamation,
share exchange, business combination, issuance of securities, acquisition of
securities, tender offer, exchange offer or other similar transaction
involving (i) the Company or any subsidiary or the capital stock of the
Company, (ii) the acquisition of more than 15% of the Company's business or
assets, or more than 15% of the outstanding securities of any class of voting
securities of the Company or any of its subsidiaries, or (iii) any liquidation
or dissolution of the Company or any material subsidiary.
"Superior Proposal" means a bona fide, unsolicited, written proposal for an
Alternative Transaction on terms and conditions that the Company Board
determines, in its good faith judgment, based on advice of a financial advisor
of nationally recognized reputation, and taking into account all the terms and
conditions of the Alternative Transaction, is more favorable to the Company's
stockholders than the transaction contemplated in the Merger Agreement (after
giving effect to any changes to the Merger Agreement and the Offer as may be
proposed by Parent in response to the Alternative Transaction), and for which
financing, to the extent required, is then fully committed or reasonably
determined to be available by the Company Board.
Company Stockholders' Meeting. If required by Delaware Law, the Company
shall call and hold a meeting of its stockholders (the "Company Stockholders'
Meeting") promptly following consummation of the Offer for
19
<PAGE>
the purpose of voting upon the approval of the Merger Agreement. If requested
by Parent, the Company shall use its reasonable best efforts to solicit from
its stockholders proxies in favor of the approval of the Merger Agreement. At
any such meeting all outstanding Shares then owned by Parent or any of its
affiliates shall be voted in favor of approval of the Merger.
Consents; Approvals. The Company and Parent agree to use their reasonable
efforts to obtain all consents and approvals (including all governmental and
regulatory approvals) and to make all filings (including all governmental or
regulatory filings) required in connection with the transactions contemplated
by the Merger Agreement.
Employees, Employee Benefits. The Merger Agreement contains certain
covenants relating to the treatment of employees of the Company after
consummation of the Offer. These include the continuation for one year of
benefits in the aggregate no less favorable than the level in effect
immediately prior to the consummation of the Offer; continuation of certain
compensation plans and insurance coverage for certain members of senior
management for specified time periods following consummation of the Offer; an
agreement to honor all employment, severance, change of control and other
compensation arrangements disclosed in the Merger Agreement; and payment of
severance benefits at specified levels to employees not covered by statutory
or contractual arrangements whose employment is terminated other than for
cause within 120 days following the Effective Time.
Indemnification and Insurance. After the Effective Time, the Surviving
Company shall indemnify and hold harmless each present and former director or
officer of the Company from liabilities for acts or omissions occurring at or
prior to the Effective Time to the fullest extent permitted under applicable
law and the Company's certificate of incorporation and bylaws and shall assume
any indemnification agreements of the Company in effect as of the date of the
Merger Agreement. The Surviving Company shall also advance expenses, as
incurred, to the fullest extent permitted under applicable law or any
applicable indemnification agreement.
In addition, the Merger Agreement provides that for seven years after the
Effective Time, the Surviving Company shall provide directors' and officers'
liability insurance covering acts or omissions occurring prior to the
Effective Time with respect to those persons who are currently covered by the
Company's directors' and officers' liability insurance policy on terms with
respect to coverage and amounts no less favorable than those of such policy in
effect as of the date of the Merger Agreement, provided that in satisfying
this obligation the Surviving Company shall not be obligated to pay more than
$300,000.
Conditions to the Merger
The obligations to consummate the Merger are subject to the satisfaction of
the following conditions:
(i) if required by Delaware Law, the approval of the Merger Agreement by
the stockholders of the Company in accordance with such law;
(ii) no injunction, order, decree, ruling, statute, rule, or regulation
shall prohibit consummation of the Merger; and
(iii) Purchaser shall have purchased Shares pursuant to the Offer.
Termination
The Merger Agreement may be terminated at any time prior to the Effective
Time, notwithstanding approval of the Merger Agreement by the stockholders of
the Company:
(i) prior to the consummation of the Offer by mutual written consent of
Parent and the Company;
(ii) by either Parent or the Company, if the Offer shall not have been
consummated by March 31, 2000 (provided that the right to terminate shall
not be available to any party whose failure to fulfill any obligation under
the Merger Agreement has caused or resulted in the failure of the Offer to
occur on or before such date);
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(iii) by either Parent or the Company, if any statute, rule or
regulation makes consummation of the Offer or the Merger illegal or
otherwise prohibited, or any final nonappealable judgment, injunction,
order or decree of any court or governmental body having competent
jurisdiction enjoins the Offer or the Merger; provided, however, that the
party seeking to terminate the Merger Agreement pursuant to this clause
shall have used commercially reasonable best efforts to remove any such
judgment, injunction, order or decree;
(iv) by Parent, if prior to the purchase of any Shares pursuant to the
Offer:
(a) the Company Board shall have failed to recommend or withdrawn or
materially modified in a manner adverse to Parent its approval
or recommendation of the Offer and the Merger;
(b) the Company shall have entered into, or shall have publicly
announced its intention to enter into, an agreement with respect
to any Superior Proposal; or
(c) any person other than Parent and its subsidiaries shall have
acquired, directly or indirectly, beneficial ownership of at least
a majority of the Shares outstanding;
(v) by the Company, if, prior to the consummation of the Offer, (a) the
Company notifies Parent in writing at least 72 hours prior to such termination
that it intends to enter into an agreement with respect to a Superior
Proposal, attaching the most current version of such agreement (or a
description of all material terms and conditions thereof), provided the
Company has complied in all material respects with the provisions of the "No
Solicitation" covenant described above; (b) Parent does not make, within 72
hours after receipt of the Company's notification, an offer that the Company
Board determines, in good faith based on the advice of a financial advisor of
nationally recognized reputation, and taking into account all the terms and
conditions of such offer, is at least as favorable to the Company's
stockholders as the Superior Proposal (it being understood that the Company
shall not enter into any binding agreement regarding such Superior Proposal
during such 72-hour period) and (c) prior to or simultaneously with such
termination, the Company makes payment to Parent of the amounts payable
pursuant to the Merger Agreement. See "The Merger Agreement; Other
Arrangements--Fees and Expenses"; or
(vi) by the Company, if the Offer has not been consummated by February
15, 2000 as a result of a breach by Parent or Purchaser of any of their
representations and warranties or covenants such that Parent and Purchaser
are unable to perform their obligations under the Merger Agreement after
the conditions to their obligations have been satisfied (but for those
conditions which are not satisfied due to or resulting from the facts
constituting such breach) and the Company is not in material breach of any
of its representations and warranties or covenants set forth in the Merger
Agreement.
If the Merger Agreement is terminated, it will become void and there shall
be no liability on the part of the Company, Parent or the Purchaser, except
(i) for certain fees and expenses payable pursuant to the Merger Agreement
(see "The Merger Agreement; Other Arrangements--Fees and Expenses"), (ii) as
provided pursuant to the Confidentiality Agreement and under certain other
provisions of the Merger Agreement that shall survive termination, and (iii)
no such termination shall relieve any party from liability for any willful
breach of the Merger Agreement.
Fees and Expenses
Except as otherwise specified in the following sentence, all costs and
expenses incurred in connection with the Merger Agreement and the transactions
contemplated thereby shall be paid by the party incurring such cost or
expense.
The Merger Agreement provides that the Company shall pay to Parent in
immediately available funds (i) an amount equal to $23 million prior to or
simultaneously with the termination of the Merger Agreement pursuant to
subparagraphs (iv) and (v) under "The Merger Agreement; Other Arrangements--
Termination," and (ii) $2,000,000 as liquidated damages if the Offer shall not
have been consummated as a result of a material breach by the Company of its
representations and warranties set forth in the Merger Agreement, provided
that such breach existed as of the date of the Merger Agreement and provided
further that all of the other conditions to the
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Offer shall have been satisfied (but for those conditions which are not
satisfied due to or resulting from the facts constituting such breach) and
Parent and the Purchaser are not in material breach of any of their
representations and warranties or covenants set forth in the Merger Agreement.
Amendments and Waivers
Any provision of the Merger Agreement may be amended or waived prior to the
Effective Time, but only if such amendment or waiver is in writing and is
signed, in the case of an amendment, by each party to the Merger Agreement or,
in the case of a waiver, by each party to be bound thereby; provided, however,
that after approval of the Merger Agreement by the stockholders of the Company
no amendment may be made which by law requires further approval by such
stockholders without such further approval.
Confidentiality Agreement
On July 12, 1999, Danzas and the Company entered into a Confidentiality
Agreement (the "Confidentiality Agreement") containing customary provisions
pursuant to which, among other matters, Danzas and its affiliates agreed to
keep confidential all nonpublic, confidential or proprietary information
furnished to it by the Company relating to the Company, subject to certain
exceptions (the "Information"), and to use the Information solely in
connection with evaluating a possible transaction involving the Company and
Danzas. For a period of three years from the date of the Confidentiality
Agreement, Danzas has agreed to certain restrictions on its ability to acquire
or to offer to acquire Shares or take certain other actions, without the prior
written consent of the Company or the Company Board. Danzas further agreed
that, prior to September 7, 2002, it would not, directly or indirectly,
solicit for employment or hire any employee of the Company or any of its
subsidiaries with whom Danzas has had contact or who became known to Danzas in
connection with Danzas' consideration of a possible transaction involving
Danzas and the Company, subject to certain exceptions. A copy of the
Confidentiality Agreement is filed as an Exhibit to the Schedule 14D-1 and the
foregoing summary is qualified in its entirety by reference to such agreement.
Purpose of the Offer; Plans for the Company
Purpose of the Offer
The purpose of the Offer is to acquire control of, and the entire equity
interest in, the Company. The purpose of the Merger is to acquire all
outstanding Shares not tendered and purchased pursuant to the Offer. If the
Offer is successful, Purchaser intends to consummate the Merger as promptly as
practicable.
The Company Board has approved the Merger and adopted the Merger Agreement.
Depending upon the number of Shares purchased by Purchaser pursuant to the
Offer, the Company Board may be required to submit the Merger Agreement to the
Company's stockholders for approval at a stockholder's meeting convened for
that purpose in accordance with Delaware Law. If stockholder approval is
required, the Merger Agreement must be approved by a majority of all votes
entitled to be cast at such meeting.
If the Minimum Condition is satisfied, Purchaser will have sufficient
voting power to approve the Merger Agreement at the stockholders' meeting
without the affirmative vote of any other stockholder. If Purchaser acquires
at least 90% of the Shares pursuant to the Offer, the Merger may be
consummated without a stockholders' meeting and without the approval of the
Company's stockholders. The Merger Agreement provides that Purchaser will be
merged into the Company and that the certificate of incorporation and by-laws
of Purchaser will be the certificate of incorporation and by-laws of the
Surviving Company following the Merger provided that, at the Effective Time,
such certificate of incorporation shall be amended to provide that the name of
the corporation shall be Danzas Air Express International Corporation.
Under Delaware Law, holders of Shares do not have appraisal rights as a
result of the Offer. In connection with the Merger, however, stockholders of
the Company may have the right to dissent and demand appraisal of their Shares
under Delaware Law. Dissenting stockholders who comply with the applicable
statutory procedures
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under Delaware Law will be entitled to receive a judicial determination of the
fair value of their Shares (exclusive of any element of value arising from the
accomplishment or expectation of the Merger) and to receive payment of such
fair value in cash. Any such judicial determination of the fair value of the
Shares could be based upon considerations other than or in addition to the
price per Share paid in the Merger and the market value of the Shares. In
Weinberger v. UOP, Inc., the Delaware Supreme Court stated, among other
things, that "proof of value by any techniques or methods which are generally
considered acceptable in the financial community and otherwise admissible in
court" should be considered in an appraisal proceeding. Stockholders should
recognize that the value so determined could be higher or lower than the price
per Share paid pursuant to the Offer or the consideration per Share to be paid
in the Merger. Moreover, Purchaser may argue in an appraisal proceeding that,
for purposes of such a proceeding, the fair value of the Shares is less than
the price paid in the Offer or 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 stated in Weinberger and Rabkin v. Philip A. Hunt
Chemical Corp. that the remedy ordinarily available to minority stockholders
in a cash-out merger is the right to appraisal described above. However, a
damages remedy or injunctive relief may be available if a merger is found to
be the product of procedural unfairness, including fraud, misrepresentation or
other misconduct.
Plans for the Company
Pursuant to the terms of the Merger Agreement, effective upon the
acceptance for payment of Shares pursuant to the Offer, Parent currently
intends to seek maximum representation on the Company Board, subject to the
Company's right to maintain through the Effective Time at least two directors
who are currently directors of the Company and are not officers or affiliates
of the Company, Parent or any of their respective subsidiaries. Purchaser
currently intends, as soon as practicable after consummation of the Offer, to
consummate the Merger.
In connection with its consideration of the Offer, Purchaser and Parent
have made a preliminary review, and will continue to review, on the basis of
available information, various possible business strategies that they might
consider in the event that Purchaser acquires control of the Company. Such
strategies are expected to include the integration of certain assets or lines
of business of the Company with those of Parent. Parent plans to integrate all
activities of the Company into Parent's Danzas Intercontinental Business Unit.
As a result, Parent will gain a major presence in the United States logistics
industry and Danzas will become one of the leading airfreight forwarders
worldwide. If Purchaser acquires Shares pursuant to the Offer, Purchaser and
Parent intend to continue their detailed review of the Company and its assets,
businesses, operations, properties, policies, corporate structure,
capitalization and the responsibilities and qualifications of the Company's
management and personnel and consider what changes Purchaser and Parent deem
desirable in light of the circumstances which then exist.
There have been some preliminary discussions between representatives of
Parent and senior management of the Company concerning their continued
employment with the Company. During these discussions, Parent indicated its
desire that the current senior management of the Company remain with the
Company after the consummation of the Merger. Parent did not propose or agree
to any specific arrangements as to compensation or benefits.
Upon consummation of the Merger, Guenter Rohrmann, Chief Executive Officer
of the Company, will be appointed Vice Chairman of the Surviving Company by
Parent; Peter Wagner, Chief Executive Officer of Logistics of Parent and Chief
Executive Officer of Danzas, will be elected Chairman of the Board of the
Surviving Company by Parent; Renato Chiavi, head of intercontinental business
at Danzas, will be appointed Chief Executive Officer of the Surviving Company
by Parent; and Hendrik J. Hartong Jr., Chairman of the Company Board, will
join the board of Danzas. Mr. Hartong shall be compensated for his attendance
at any board meetings in accordance with Danzas' practices generally for the
compensation of its directors.
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Except as described above or elsewhere in this Offer to Purchase, Purchaser
and Parent have no present plans or proposals that would relate to or result
in an extraordinary corporate transaction involving the Company or any of
their respective subsidiaries (such as a merger, reorganization, liquidation,
relocation of any operations or sale or other transfer of a material amount of
assets), any sale or transfer of a material amount of assets of the Company or
any of its subsidiaries, any change in the Company Board or management, any
material change in the Company's capitalization or dividend policy or any
other material change in the Company's corporate structure or business.
Certain Effects of the Offer
Market for the Shares
The purchase of Shares pursuant to the Offer will reduce the number of
holders of Shares and the number of Shares that might otherwise trade
publicly, which could adversely affect the liquidity and market value of the
remaining Shares held by stockholders other than Purchaser. Purchaser cannot
predict whether the reduction in the number of Shares that might otherwise
trade publicly would have an adverse or beneficial effect on the market price
for, or marketability of, the Shares or whether such reduction would cause
future market prices to be greater or less than the Offer Price.
Stock Quotation
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the standards for continued inclusion in the Nasdaq
National Market System. If, as a result of the purchase of Shares pursuant to
the Offer, the Shares no longer meet the criteria for continuing inclusion in
the Nasdaq National Market System, the market for the Shares could be
adversely affected. According to Nasdaq's published guidelines, the Shares
would not be eligible for continued listing if, among other things, the number
of Shares publicly held falls below 750,000, the number of beneficial holders
of Shares falls below 400 (round lot holders) or the aggregate market value of
such publicly-held Shares does not exceed $5 million. If the Shares were no
longer eligible for inclusion in the Nasdaq National Market System, they may
nevertheless continue to be included in the Nasdaq SmallCap Market unless,
among other things, the public float was less than 500,000 Shares, or there
were fewer than 300 stockholders (round lot holders) in total, or the market
value of public float was less than $1 million. If the Shares are no longer
eligible for inclusion in the Nasdaq National Market System or the Nasdaq
SmallCap Market, the Shares might still be quoted on the OTC Bulletin Board.
The extent of the public market for the Shares and the availability of such
quotations would, however, depend upon the number of holders of such Shares
remaining at such time, the interest in maintaining a market in such Shares on
the part of securities firms, the possible termination of registration of such
Shares under the 1934 Act as described below, and other factors.
Margin Regulations
The Shares are currently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve
Board"), which 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 the market for the Shares and stock
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.
Exchange Act Registration
The Shares are currently registered under Section 12(g) of the 1934 Act.
Such registration may be terminated upon application of the Company to the
Commission if the Shares are neither listed on a national securities exchange
nor held by 300 or more holders of record. Termination of registration of the
Shares under the 1934 Act would substantially reduce the information required
to be furnished by the Company to its stockholders and to the Commission and
would make certain provisions of the 1934 Act no longer applicable to the
Company, such as the short-swing profit recovery provisions of Section 16(b)
of the 1934 Act, the requirement of furnishing a proxy statement pursuant to
Section 14(a) of the 1934 Act in connection with
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stockholders' meetings and the related requirement of furnishing an annual
report to stockholders and the requirements of Rule 13e-3 under the 1934 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 promulgated under
the Securities Act of 1933, as amended, may be impaired or eliminated. If
registration of the Shares under the 1934 Act were terminated, the Shares
would no longer be "margin securities" or be eligible for inclusion on the
Nasdaq National Market System. Parent and Purchaser currently intend to seek
to cause the Company to terminate the registration of the Shares under the
1934 Act as soon after consummation of the Offer as the requirements for
termination of registration are met.
Dividends and Distributions
If on or after November 15, 1999, the Company should (i) split, combine or
otherwise change the Shares or its capitalization, (ii) acquire or otherwise
cause a reduction in the number of outstanding Shares or (iii) issue or sell
any additional Shares (other than Shares issued pursuant to and in accordance
with the terms in effect on November 15, 1999 of employee stock options
outstanding prior to such date), shares of any other class or series of
capital stock, other voting securities or any securities convertible into, or
options, rights, or warrants, conditional or otherwise, to acquire, any of the
foregoing, then, without prejudice to Purchaser's rights under "Extension of
Tender Period; Termination; Amendment" and "Certain Conditions of the Offer,"
Purchaser may, in its sole discretion, make such adjustments in the purchase
price and other terms of the Offer as it deems appropriate, including the
number or type of securities to be purchased.
If, on or after November 15, 1999, the Company should declare or pay any
dividend on the Shares or any distribution with respect to the Shares
(including the issuance of additional Shares or other securities or rights to
purchase any securities) that is payable or distributable to stockholders of
record on a date prior to the transfer to the name of Purchaser or its nominee
or transferee on the Company's stock transfer records of the Shares purchased
pursuant to the Offer, then, without prejudice to Purchaser's rights under
"Extension of Tender Period; Termination; Amendment" and "Certain Conditions
of the Offer," (i) the purchase price per Share payable by Purchaser pursuant
to the Offer will be reduced to the extent of any such cash dividend or
distribution and (ii) the whole of any such non-cash dividend or distribution
to be received by the tendering stockholders will (a) be received and held by
the tendering stockholders for the account of Purchaser and will be required
to be promptly remitted and transferred by each tendering stockholder to the
Depositary for the account of Purchaser, accompanied by appropriate
documentation of transfer, or (b) at the direction of Purchaser, be exercised
for the benefit of Purchaser, in which case the proceeds of such exercise will
promptly be remitted to Purchaser. Pending such remittance and subject to
applicable law, Purchaser will be entitled to all rights and privileges as
owner of any such non-cash dividend or distribution or proceeds thereof and
may withhold the entire purchase price or deduct from the purchase price the
amount or value thereof, as determined by Purchaser in its sole discretion.
Extension of Tender Period; Termination; Amendment
Parent and Purchaser expressly reserve the right, in their sole discretion
and regardless of whether or not any of the conditions specified in "Certain
Conditions to the Offer" shall have been satisfied, (i) to extend the period
of time during which the Offer is open by giving oral or written notice of
such extension to the Depositary and by making a public announcement of such
extension; provided, that pursuant to the Merger Agreement, Parent and
Purchaser are required to extend the period during which the Offer is open, in
increments of not less than five business days but not past February 15, 2000,
if, at the earlier scheduled or any extended expiration date of the Offer, (x)
the applicable waiting period under the HSR Act shall not have expired or been
terminated, (y) the European Approval, the DOT Approval and the Exon-Florio
Provision shall not have been completed, obtained or satisfied, or (z) any
other domestic or foreign approvals, consents, filings, notifications or other
requirements of law, statute, rule or regulation necessary in connection with
the transactions contemplated by the Merger Agreement shall not have been
completed, obtained or satisfied, except for such matters as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect or materially impair the ability of Parent or Purchaser to
consummate the transactions contemplated by the Merger Agreement or to own or
exercise control over the Company and its subsidiaries following the Offer;
and (ii) to waive any of the
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conditions to the Offer and to modify the terms and conditions of the Offer
from time in their sole discretion, provided that the prior written approval
of the Company shall be required to (i) reduce the cash price per Share to be
paid in the Offer, (ii) reduce the number of Shares to be purchased under the
Offer, (iii) change the form of consideration to be paid in the Offer, (iv)
increase the minimum number of Shares which must be tendered to satisfy the
Minimum Condition, (v) impose additional conditions to the Offer or (vi)
otherwise amend the terms of the Offer in a manner that is materially adverse
to the stockholders of the Company.
If, with the Company's consent, Purchaser decreases the percentage of
Shares being sought or increases or decreases the consideration to be paid for
Shares pursuant to the Offer and the Offer is scheduled to expire at any time
before the expiration of a period of 10 business days from, and including, the
date that notice of such increase or decrease is first published, sent or
given in the manner specified below, the Offer will be extended until the
expiration of such period of 10 business days. If Purchaser makes a material
change in the terms of the Offer (other than a change in price or percentage
of securities sought) or in the information concerning the Offer, or waives a
material condition of the Offer, Purchaser will extend the Offer, if required
by applicable law, for a period sufficient to allow the Company's stockholders
to consider the amended terms of the Offer. In a published release, the
Commission has stated that in its view an offer must remain open for a minimum
period of time following a material change in the terms of such offer and that
the waiver of a condition such as the Minimum Condition is a material change
in the terms of an offer. The release states that an offer should remain open
for a minimum of five business days from the date the material change is first
published, sent or given to security holders, and that if material changes are
made with respect to information that approaches the significance of price and
share levels, a minimum of 10 business days may be required to allow adequate
dissemination and investor response.
Purchaser also reserves the right, in its sole discretion, in the event any
of the conditions specified in "Certain Conditions to the Offer" shall not
have been satisfied and so long as Shares have not theretofore been accepted
for payment, to delay (except as otherwise required by applicable law)
acceptance for payment of or payment for Shares or, except as described above,
to terminate the Offer and not accept for payment or pay for Shares.
If Purchaser extends the period of time during which the Offer is open, is
delayed in accepting for payment or paying for Shares or is unable to accept
for payment or pay for Shares pursuant to the Offer for any reason, then,
without prejudice to Purchaser's rights under the Offer, the Depositary may,
on behalf of Purchaser, retain all Shares tendered, and such Shares may not be
withdrawn except as otherwise provided in "Withdrawal Rights." The reservation
by Purchaser of the right to delay acceptance for payment of or payment for
Shares is subject to applicable law, which requires that Purchaser pay the
consideration offered or return the Shares deposited by or on behalf of
stockholders promptly after the termination or withdrawal of the Offer.
Any extension, termination or amendment of the Offer will be followed as
promptly as practicable by a public announcement thereof. Without limiting the
manner in which Purchaser may choose to make any public announcement,
Purchaser will have no obligation (except as otherwise required by applicable
law) to publish, advertise or otherwise communicate any such public
announcement other than by making a release to the Dow Jones News Service. In
the case of an extension of the Offer, Purchaser will make a public
announcement of such extension no later than 9:00 a.m., New York City time, on
the next business day after the previously scheduled Expiration Date.
Certain Conditions of the Offer
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment or pay for any Shares tendered pursuant to the
Offer and may, subject to the terms of the Merger Agreement, terminate the
Offer, if:
(i) at the Expiration Date (as it may be extended in accordance with the
terms of the Merger Agreement):
(a) the Minimum Condition has not been satisfied;
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(b) the applicable waiting period under the HSR Act shall not have
expired or been terminated;
(c) the European Approval, the DOT Approval and the Exon-Florio
Provision shall not have been completed, obtained or satisfied; or
(d) any other domestic or foreign approvals, consents, filings,
notifications or other requirements of law, statute, rule or regulation
necessary in connection with the transactions contemplated by this
Agreement shall not have been completed, obtained or satisfied, except
for such matters as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect or
materially impair the ability of Parent or Purchaser to consummate the
transactions contemplated by the Merger Agreement or to own or exercise
control over the Company and its subsidiaries following the Offer; or
(ii) at any time on or after November 15, 1999 and prior to the
acceptance for payment of Shares, any of the following conditions exist:
(a) any order, decree or injunction of a court or governmental agency
of competent jurisdiction or any law or regulation enjoins or prohibits
the consummation of the transactions contemplated by the Merger
Agreement (including the Offer or the Merger) or the ownership or
exercise of control by the Parent over the Company and its subsidiaries
following the Offer;
(b) any representations and warranties of the Company contained in
the Merger Agreement that are qualified as to materiality shall not be
true and correct and any of the representations and warranties that are
not so qualified shall not be true and correct in any material respects
on and as of the date of consummation of the Offer as if such
representations and warranties were made on and as of such date (except
where such representations and warranties are stated as of a specific
date), or the Company shall have breached the agreements and covenants
required by the Merger Agreement to be performed by it on or prior to
such date in any material respect (provided that the Company may, prior
to the expiration of the Offer, seek to cure any such breach); or
(c) the Merger Agreement shall have been terminated in accordance
with its terms.
The foregoing conditions are for the sole benefit of Parent and Purchaser
and may, subject to the terms of the Merger Agreement, be waived by Parent and
Purchaser in whole or in part at any time and from time to time in their
discretion.
Certain Legal Matters; Regulatory Approvals
General
Purchaser is not aware of any material pending legal proceeding relating to
the Offer. Based on its examination of publicly available information filed by
the Company with the Commission and other publicly available information
concerning the Company, Purchaser is not aware of any governmental license or
regulatory permit that appears to be material to the Company's business that
might be adversely affected by Purchaser's acquisition of Shares as
contemplated herein or, except as set forth below, of any approval or other
action by any government or governmental administrative or regulatory
authority or agency, domestic or foreign, that would be required for the
acquisition or ownership of Shares by Purchaser or Parent as contemplated
herein. Should any such approval or other action be required, Purchaser
currently contemplates that, except as described below under "State Takeover
Statutes", such approval or other action will be sought. There can be no
assurance that any such approval or other action, if needed, would be obtained
or would be obtained without substantial conditions or that if such approvals
were not obtained or such other actions were not taken, adverse consequences
might not result to the Company's business, or certain parts of the Company's
business might not have to be disposed of, any of which could cause Purchaser
to elect to terminate the Offer without the purchase of Shares thereunder
under certain conditions. See "Certain Conditions of the Offer."
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State Takeover Statutes
A number of states have adopted laws which purport, to varying degrees, to
apply to attempts to acquire corporations that are incorporated in, or which
have substantial assets, stockholders, principal executive offices or
principal places of business or whose business operations otherwise have
substantial economic effects in, such states. The Company, directly or through
subsidiaries, conducts business in a number of states throughout the United
States, some of which have enacted such laws. Except as described herein,
Purchaser does not know whether any of these laws will, by their terms, apply
to the Offer or the Merger or any other business combination between Purchaser
or any of its affiliates and the Company, and has not complied with any such
laws. To the extent that certain provisions of these laws purport to apply to
the Offer or the Merger or other business combination, Purchaser believes that
there are reasonable bases for contesting such laws.
In 1982, in Edgar v. MITE Corp., the Supreme Court of the United States
invalidated on constitutional grounds the Illinois Business Takeover Statute
which, as a matter of state securities law, made takeovers of corporations
meeting certain requirements more difficult. However, in 1987 in CTS Corp. v.
Dynamics Corp. of America, the Supreme Court held that the State of Indiana
could, as a matter of corporate law, constitutionally disqualify a potential
acquiror from voting shares of a target corporation without the prior approval
of the remaining stockholders where, among other things, the corporation is
incorporated in, and has a substantial number of stockholders in, the state.
Subsequently, in TLX Acquisition Corp. v. Telex Corp., a Federal District
Court in Oklahoma ruled that the Oklahoma statutes were unconstitutional
insofar as they apply to corporations incorporated outside Oklahoma in that
they would subject such corporations to inconsistent regulations. Similarly,
in Tyson Foods, Inc. v. McReynolds, a Federal District Court in Tennessee
ruled that four Tennessee takeover statutes were unconstitutional as applied
to corporations incorporated outside Tennessee. This decision was affirmed by
the United States Court of Appeals for the Sixth Circuit.
If any government official or third party should seek to apply any state
takeover law to the Offer or the Merger or other business combination between
Purchaser or any of its affiliates and the Company, Purchaser will take such
action as then appears desirable, which action may include challenging the
applicability or validity of such statute in appropriate court proceedings. In
the event it is asserted that one or more state takeover statutes 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 or holders of Shares,
and Purchaser might be unable to accept for payment or pay for Shares tendered
pursuant to the Offer, or be delayed in continuing or consummating the Offer
or the Merger. In such case, Purchaser may not be obligated to accept for
payment or pay for any tendered Shares. See "Extension of Tender Period;
Termination; Amendment" and "Certain Conditions of the Offer."
Antitrust in the United States
Under the HSR Act and the rules that have been promulgated thereunder by
the Federal Trade Commission (the "FTC"), certain acquisition transactions may
not be consummated unless certain information has been furnished to the
Antitrust Division of the Department of Justice (the "Antitrust Division") and
the FTC and certain waiting period requirements have been satisfied. The
purchase of Shares pursuant to the Offer is subject to such requirements.
Pursuant to the requirements of the HSR Act, Purchaser expects to file a
Notification and Report Form with respect to the Offer and Merger with the
Antitrust Division and the FTC on or about November 30, 1999. As a result, the
waiting period applicable to the purchase of Shares pursuant to the Offer is
scheduled to expire at 11:59 p.m., New York City time, 15 days after such
filing. However, prior to such time, the Antitrust Division or the FTC may
extend the waiting period by requesting additional information or documentary
material relevant to the Offer from Purchaser. If such a request is made, the
waiting period will be extended until 11:59 p.m., New York City time, on the
tenth day after substantial compliance by Purchaser with such request.
Thereafter, such waiting period can be extended only by court order.
A request is being made pursuant to the HSR Act for early termination of
the waiting period applicable to the Offer. There can be no assurance,
however, that the applicable 15-day HSR Act waiting period will be
28
<PAGE>
terminated early. Shares will not be accepted for payment or paid for pursuant
to the Offer until the expiration or early termination of the applicable
waiting period under the HSR Act. See "Certain Conditions of the Offer." Any
extension of the waiting period will not give rise to any withdrawal rights
not otherwise provided for by applicable law. See "Withdrawal Rights." If
Purchaser's acquisition of Shares is delayed pursuant to a request by the
Antitrust Division or the FTC for additional information or documentary
material pursuant to the HSR Act, the Offer will be extended in certain
circumstances. See "Extension of Tender Period; Termination; Amendment" and
"Certain Conditions of the Offer."
The Antitrust Division and the FTC scrutinize the legality under the
antitrust laws of transactions such as the acquisition of Shares by Purchaser
pursuant to the Offer. At any time before or after the consummation of any
such transactions, the Antitrust Division or the FTC could take such action
under the antitrust laws of the United States as it deems necessary or
desirable in the public interest, including seeking to enjoin the purchase of
Shares pursuant to the Offer or seeking divestiture of the Shares so acquired
or divestiture of substantial assets of Parent or the Company. Private parties
(including individual states) may also bring legal actions under the antitrust
laws of the United States. Purchaser does not believe that the consummation of
the Offer will result in a violation of any applicable antitrust laws.
However, there can be no assurance that a challenge to the Offer on antitrust
grounds will not be made, or if such a challenge is made, what the result will
be. See "Certain Conditions of the Offer", including conditions with respect
to litigation and certain governmental actions and "The Merger Agreement;
Other Arrangements" for certain termination rights.
European Approval
The European Commission's Council Regulation No. 4064/89 of December 21,
1989, as amended, requires notification to the European Commission, within one
week of the conclusion of an agreement, the announcement of a public bid or
the acquisition of a controlling interest, of all concentrations between
companies which are deemed to have a "Community dimension" because they exceed
certain global and European turnover thresholds. Such concentrations may not
be consummated until the European Commission, acting within fixed deadlines,
approves them as being "compatible with the Common Market." A concentration is
compatible with the European Common Market if it does not create or strengthen
a dominant position as a result of which effective competition would be
significantly impeded in the European Common Market, or in a substantial part
thereof.
The European Commission has exclusive competence for approving or
prohibiting concentrations with a Community dimension; however, it may, upon
request, refer the case to the national antitrust authority of a particular
member state if the concentration has a specific effect on the territory of
such member state.
The notification involves the disclosure to the European Commission of
detailed information, including the structure of the relevant markets and the
parties' competitive position. Upon receipt of a notification, the European
Commission conducts a preliminary review with a maximum duration of one month
from notification, which may be extended to six weeks in certain
circumstances. The preliminary review concludes with a decision either to
approve the notified concentration (with or without conditions) or to initiate
an in-depth investigation if the concentration raises serious doubts as to its
compatibility with the European Common Market. Such an in-depth investigation
has a maximum duration of four months, and must end with a European Commission
decision either approving the concentration (with or without conditions) or
prohibiting it. If the European Commission raises substantive issues in
connection with the proposed concentration, the parties may negotiate with the
European Commission to find a solution, which may take the form of an
undertaking to make structural modifications to the entity resulting from the
concentration, on conditions and within a timeframe agreed to with the
European Commission.
Parent, the Company, and their respective affiliates each conduct
substantial operations within the European Common Market and satisfy the
applicable turnover thresholds, with the result that the acquisition of Shares
will amount to a concentration with a Community dimension and will therefore
be subject to the requirement of notification to, and approval by, the
European Commission.
29
<PAGE>
Parent and Purchaser believe that the concentration effected by the
acquisition of the Shares by Purchaser will be considered to be compatible
with the European Common Market, and approved by the European Commission
during the preliminary review phase of one month. However, there can be no
assurance of approval by the European Commission, and it is possible that the
European Commission might seek to require structural undertakings as a
condition to its approval, and/or to open a second phase investigation to
examine serious doubts regarding the concentration's compatibility with the
Common Market.
DOT Approval
Under the federal aviation laws and the regulations promulgated thereunder
by the United States Department of Transportation ("DOT"), a foreign air
freight forwarder (i.e., an air freight forwarder that does not qualify as a
"citizen of the United States") doing business in the United States is
required to hold an effective registration issued by DOT. To date, the Company
has not needed such a registration because it has been able to qualify as a
citizen of the United States. Upon consummation of the transaction
contemplated by the Merger Agreement, however, the percentage of the Company's
Shares owned by non-U.S. citizens will be such that the Company will no longer
be characterized as a U.S. citizen for purposes of federal aviation law.
Accordingly, in order to continue its air freight forwarding activities in
the United States, the Company will be required to apply for a registration.
DOT's regulations require that a foreign air freight forwarder apply for a
registration not less than 60 days prior to the launch of operations, but do
not set forth registration procedures specifically applicable to existing air
freight forwarders that lose their U.S. citizenship through an acquisition by
non-U.S. citizens. Consistent with the practices applicable to the
registration of new foreign air freight forwarders and with DOT's notification
practices on other change-of-ownership matters, the Company will promptly
inform DOT in writing of the proposed change in ownership, file a registration
application (OST Form 4506), and seek a waiver of the 60-day waiting period.
Upon receipt of the application form, DOT will publish a notice in its
weekly summary of filings. Interested persons have twenty-eight days from the
date of filing within which to comment on the application. At the end of the
comment period, DOT will consider whether the application is consistent with
the public interest (including, but not limited to, whether there is
sufficient reciprocity between the U.S. and Germany to support the issuance of
the registration) and may take any of the following actions: approve the
application, reject the application, request additional information, approve
the application subject to limitations, or institute a proceeding to evaluate
the application. Although Purchaser and Parent believe that DOT will approve
the application, there is no deadline by which DOT must act and there can be
no assurance that DOT Approval will be obtained. Under the Merger Agreement,
Purchaser is not required to accept for payment or pay for any Shares, and
may, subject to the terms of the Merger Agreement, terminate the Offer, if DOT
Approval has not been obtained. See "Certain Conditions of the Offer" and
"Extension of Tender Period; Termination; Amendment."
Exon-Florio Provision
Under the Exon-Florio Provision, the President of the United States is
authorized to investigate and, if necessary, prohibit or suspend acquisitions
of U.S. entities by non-U.S. persons if such acquisitions threaten to impair
the national security of the United States. Under the Exon-Florio Provision,
the President is required to undertake an investigation if (1) the acquirer is
a government-controlled entity and (2) the acquisition is one which "could
result in control of a person engaged in interstate commerce in the United
States that could affect the national security of the United States." Pursuant
to the Exon-Florio Provision, notice of an acquisition by a foreign person may
be made to the Committee on Foreign Investment in the United States ("CFIUS")
either voluntarily by the parties to such proposed acquisition, or by any
member of CFIUS. Acquisitions for which no notice is filed remain indefinitely
subject to divestment or other appropriate action by the President.
If an investigation is to be conducted, it must commence no later than 30
days after receipt by CFIUS of written notification of a proposed acquisition
as prescribed by regulations promulgated under the Exon-Florio Provision. Any
such investigation must be completed within 45 days after its commencement,
and any decision by the President to take action must be announced within 15
days of the completion of the investigation.
30
<PAGE>
Parent and the Company intend promptly to file with CFIUS a joint written
notification of the transactions contemplated by the Merger Agreement.
Although Parent believes that the transactions contemplated by the Merger
Agreement should not raise any national security concerns, there can be no
assurance that CFIUS will not determine to conduct an investigation of the
proposed transactions and, if an investigation is commenced, there can be no
assurance regarding the outcome of such investigation. Under the Merger
Agreement, Purchaser is not required to accept for payment or pay for any
Shares, and may, subject to the terms of the Merger Agreement, terminate the
Offer, if the Exon-Florio Provision process has not been satisfactorily
concluded and clearance has not been obtained. See "Certain Conditions of the
Offer."
Other Foreign Filings
Based upon Purchaser's examination of publicly available information
concerning the Company, it appears that the Company and its subsidiaries own
property and conduct business in a number of foreign countries. In connection
with the acquisition of Shares pursuant to the Offer, the laws of certain of
these foreign countries may require the filing of information with, or the
obtaining of the approval of, governmental authorities therein. After
commencement of the Offer, Purchaser will seek further information regarding
the applicability of any such laws and currently intends to take such action
as they may require, but no assurance can be given that such approvals will be
obtained. If any action is taken prior to completion of the Offer by any such
government or governmental authority, Purchaser may not be obligated to accept
for payment or pay for any tendered Shares. See "Extension of Tender Period;
Termination; Amendment" and "Certain Conditions of the Offer."
Appraisal Rights
If the Merger is consummated, stockholders of the Company may have the
right to dissent and demand appraisal of their Shares under Delaware Law. See
"Purpose of the Offer; Plans for the Company." Under Delaware Law, dissenting
stockholders who comply with the applicable statutory procedures will be
entitled to receive a judicial determination of the fair value of their Shares
(exclusive of any element of value arising from the accomplishment or
expectation of the Merger) and to receive payment of such fair value in cash,
together with a fair rate of interest, if any. Any such judicial determination
of the fair value of the Shares could be based upon considerations other than
or in addition to the Offer Price, the consideration per Share to be paid in
the Merger and the market value of the Shares, including asset values and the
investment value of the Shares. Stockholders should recognize that the value
so determined could be higher or lower than the price per Share paid pursuant
to the Offer or the consideration per Share to be paid in the Merger.
Fees and Expenses
Except as set forth below, Parent and Purchaser will not pay any fees or
commissions to any broker, dealer or other person for soliciting tenders of
Shares pursuant to the Offer.
Pursuant to the terms of Deutsche Bank's engagement, Parent has agreed to
pay Deutsche Bank for its services as financial advisor and Dealer Manager in
connection with the Offer and the Merger an aggregate fee of $6,860,000.
Parent has also agreed to reimburse Deutsche Bank for its reasonable travel
and other out-of-pocket expenses, including those incurred in connection with
Deutsche Bank's activities as Dealer Manager and the fees and expenses of its
legal counsel, and to indemnify Deutsche Bank and certain related parties
against certain liabilities, including liabilities under the federal
securities laws, arising out of Deutsche Bank's engagement.
Parent and Purchaser have retained Georgeson Shareholder Communications
Inc. to be the Information Agent and ChaseMellon Shareholder Services, L.L.C.
to be the Depositary in connection with the Offer. The Information Agent may
contact holders of Shares by mail, telephone, telecopy, telegraph and personal
interview and may request banks, brokers, dealers and other nominees to
forward materials relating to the Offer to beneficial owners of Shares.
31
<PAGE>
The Information Agent and the Depositary each will receive reasonable and
customary compensation for their respective services in connection with the
Offer, will be reimbursed for reasonable out-of-pocket expenses, and will be
indemnified against certain liabilities and expenses in connection therewith,
including certain liabilities under federal securities laws. Brokers, dealers,
commercial banks and trust companies will be reimbursed by Purchaser for
customary handling and mailing expenses incurred by them in forwarding
material to their customers.
Miscellaneous
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of
such jurisdiction. However, Purchaser may, in its discretion, take such action
as it may deem necessary to make the Offer in any such jurisdiction and extend
the Offer to holders of Shares in such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PARENT OR PURCHASER NOT CONTAINED HEREIN OR IN THE
LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Purchaser has filed with the Commission a Tender Offer Statement on
Schedule 14D-1 pursuant to Rule 14d-3 of the General Rules and Regulations
under the 1934 Act, together with exhibits 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, together with
exhibits, pursuant to Rule 14d-9 under the 1934 Act, setting forth the
recommendations of the Company Board with respect to the Offer and the reasons
for such recommendations and furnishing certain additional related
information. A copy of such documents, and any amendments thereto, may be
examined at, and copies may be obtained from, the Commission (but not the
regional offices of the Commission) in the manner set forth under "Certain
Information Concerning the Company" above.
DP Acquisition Corporation
November 19, 1999
32
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
PARENT AND PURCHASER AND PARENT'S DESIGNEES
The following table sets forth (i) the name, current business or residence
address and present principal occupation or employment and (ii) material
occupations, positions, offices or employments for the past five years, in
each case of each director and executive officer of Parent and Purchaser, and
persons who may be designated by Parent to serve as directors on the Company's
Board following the Offer and Merger. Except as otherwise indicated, each of
Parent's and Purchaser's directors and officers, and each person who may be
designated by Parent to serve as directors on the Company's Board upon
consummation of the Offer, is a citizen of the Federal Republic of Germany.
Except as otherwise indicated, the business address of each director and
executive officer of Parent and Purchaser is Heinrich-von-Stephan-Str. 1,
53175 Bonn, Germany. Except as otherwise indicated, each occupation set forth
opposite a person's name refers to employment with Parent or Purchaser,
respectively. Where no date is shown, the individual has occupied the position
indicated for a period of time beyond five years. No director or executive
officer of Parent or Purchaser beneficially owns more than 1% of the
outstanding Shares. Directors of each of Parent and Purchaser are indicated
with an asterisk.
A. Directors and Executive Officers of Parent.
<TABLE>
<CAPTION>
Name, Citizenship Present Principal Occupation or Employment and
and Current Business Address Material Positions Held During the Past Five Years
- ---------------------------- --------------------------------------------------
<S> <C>
* William G. van Agtmael.... Managing Partner of E. Breuninger GmbH & Co.
E. Breuninger GmbH & Co since 1984. Mr. van Agtmael has served as a
Markstr. 1-3 member of the Supervisory Board of Parent since
70173 Stuttgart Germany January 1995.
Dutch Citizen
* Hero Brahms............... Executive Officer of Finance of Linde AG. Mr.
Linde AG Brahms has served as a member of the Supervisory
Abraham-Lincoln-Str. 21 Board of Parent since January 1995.
65030 Wiesbaden
Germany
* Kurt von Haaren........... Chairman of Deutsche Postgewerkschaft. Prior to
Deutsche Postgewerkschaft Mr. von Haaren's appointment as Chairman, he
Hauptvorstand held various positions at Deutsche
Rhonestr. 2 Postgewerkschaft. Mr. von Haaren has served as a
60525 Frankfurt am Main member of the Supervisory Board of Parent since
Germany January 1995.
* Josef Hattig.............. Senator (Minister of Land of the Federal
Bremer Landesvertretung Republic of Germany) for economy and harbours
Zweite Schlachforte 3 since 1997. Managing Director of Brauerei Beck &
28195 Bremen Co. from 1992 to 1997. Mr. Hattig has served as
Germany a member of the Supervisory Board of Parent
since July 1996.
* Petra Heinze.............. Member of the works council of Parent since
Deutsche Post AG 1995. Ms. Heinze has served as a member of the
Niederlassung Briefpost Supervisory Board of Parent since September
Halle 1997.
An der Spitze 1
06188 Hohenthrum
Germany
</TABLE>
S-1
<PAGE>
<TABLE>
<CAPTION>
Name, Citizenship Present Principal Occupation or Employment and
and Current Business Address Material Positions Held During the Past Five Years
- ---------------------------- --------------------------------------------------
<S> <C>
* Henry Hillmann............ Member of the management of the general works
council of Parent. Mr. Hillman has served as a
member of the Supervisory Board of Parent since
January 1995.
* Adolf Kracht.............. Executive Officer of Gerling-Konzern Rheinische
Gerling-Konzern Rheinische Versicherungs-Gruppe AG. Mr. Kracht has served
Versicherungs-Gruppe AG as a member of the Supervisory Board of Parent
Theodor-Heuss-Ring 7 since January 1995.
50668 Koln
Germany
* Prof. Dr. Ralf Kruger..... Senior advisor Lazard & Co. GmbH. Prof. Dr.
Lazard & Co. GmbH Kruger is a professor of strategy and finance at
Ulmenstr. 37-39 Fachhochschule Wiesbaden. Prof. Dr. Kruger also
60325 Frankfurt am Main serves on the Supervisory Board of CT-Centrale
Germany Treuhand AG, Munchen, Germany, and has served as
a member of the Supervisory Board of Parent
since May 1996.
* Dr. Ing. Manfred Consultant for Schmachtenbergstr since February
Lennings.................. 1999. Consultant for Westdeutsche Landesbank,
Schmachtenbergstr. 142 Dusseldorf, Germany, from March 1984 to February
45219 Essen-Kettwig 1999. Dr. Lennings served as Chairman of the
Germany Supervisory Board of Fried Krupp AG from June
1989 to February 1999; member of Supervisory
Board of Thyssen Krupp AG since April 1999;
Chairman of Supervisory Board of Gildemeister AG
since January 1985; Chairman of Supervisory
Board of IVG AG since November 1985; and member
of Supervisory Board of Bayer AG since June
1978. Dr. Lennings has served as a member of the
Supervisory Board of Parent since January 1995.
* Pauline Mayer............. Member of works council of Parent. Ms. Mayer has
Deutsche Post AG served as a member of the Supervisory Board of
Niederlassung Briefpost Parent since January 1998.
Munchen
Arnulfstr. 195
80634 Munchen
Germany
* Dr. Manfred Overhaus...... Undersecretary of State, Ministry of Finance of
Bundesministerium der the Federal Republic of Germany. Member of
Finanzen Supervisory Boards of Deutsche Bahn AG and EXPO
Graurheindorfer Str. 108 2000. Senator of Max-Planck-Gesellschaft. Member
53117 Bonn of Stiftungsrat PreuBisher Kulturbesitz,
Germany Kuratorium der Deutsche Bundesstiftung Umwelt,
Beirat der Bundesakademie fur offentliche
Verwaltung and Kuratorium der
Arbeitsgemeinschaft fur wirtschaftliche
Verwaltung E.V. Dr. Overhause has served as a
member of the Supervisory Board of Parent since
January 1995.
* Dr. Klaus Rauscher........ Executive Officer of Bayerische Landesbank
Bayerische Landesbank Girozentrale since 1992. Dr. Rauscher has served
Girozentrale as a member of the Supervisory Board of Parent
Brienner Str. 20 since January 1995.
80333 Munchen
Germany
</TABLE>
S-2
<PAGE>
<TABLE>
<CAPTION>
Name, Citizenship Present Principal Occupation or Employment and
and Current Business Address Material Positions Held During the Past Five Years
- ---------------------------- --------------------------------------------------
<S> <C>
* Prof. Dr. Jurgen Richter.. Chairman of business management of Berteilsmann
Berteilsmann Fachinformation since June 1998. Chief Executive
Fachinformation Officer of Springer Verlag AG, Hamburg, Germany,
Carl Berteilsmann Str. 270 from May 1994 to December 1997. Member of
33311 Gutersloh Supervisory Boards of Gerling Globale
Germany Versicherungs AG from July 1994 to June 1998;
Borse Berlin from July 1994 to May 1998; and
Borse Hamburg from January 1996 to December
1997. Prof. Dr. Richter has served as a member
of the Supervisory Board of Parent since January
1995.
* Walter Scheurle........... Management of Deutsche Postgewerkschaft. Mr.
Deutsche Postgewerkschaft Scheurle has served as a member of the
Hauptvorstand Rhonestr. 2 Supervisory Board of Parent since February 1996.
60525 Frankfurt
Germany
* Franz Schierer............ District Chairman of Deutsche Postgewerkschaft.
Deutsche Postgewerkschaft Mr. Schierer has served as a member of the
Bezirksverwaltung Sudwest Supervisory Board of Parent since February 1996.
Landhausstr. 44
70190 Stuttgard
Germany
* Siegfried Schulze......... Vice-Chairman of the General Works Council of
Parent. Member of the Supervisory Board of VPV
Versicherungsgruppe, Stuttgart, Germany, for
over ten years. Mr. Schulze has served as a
member of the Supervisory Board of Parent since
January 1995.
* Ulrike Staake............. Member of the Management Board of Deutsche Bank
Deutsche Bank AG AG. Mr. Staake has served as a member of the
Adolphsplatz Supervisory Board of Parent since January 1995.
20457 Hamburg
Germany
* Armin Stoffleth........... Managing Director of Parent. Member of the
Deutsche Post AG Supervisory Board of PSD-Bank, Nuremberg,
Postfach 70 00 Germany, from 1991 to July 1999. Mr. Stoffleth
30001 Hannover has served as a member of the Supervisory Board
Germany of Parent since January 1998.
* Erwin Wohlketzetter....... Chairman of the General Works Council of Parent.
Mr. Wohlketzetter has served as a member of the
Supervisory Board of Parent since January 1998.
Dr. Klaus Zumwinkel........ Chief Executive Officer of Parent. Dr. Zumwinkel
is also a Director of Deutsche Lufthansa AG,
Tchibo Holding AG, DHL Intl. Ltd., Bermuda, and
Thyssen Krupp Materials and Services AG.
Dr. Hans-Dieter Petram..... Chief Executive Officer of Marketing of Parent.
Prof. Dr. Gunter Walter Chief Executive Officer of Parcels and Express
Tumm....................... Mail of Parent. Dr. Tumm is also a Director of
Deutsche Bahn Netz AG.
</TABLE>
S-3
<PAGE>
<TABLE>
<CAPTION>
Name, Citizenship
and Current Business Present Principal Occupation or Employment and
Address Material Positions Held During the Past Five Years
-------------------- --------------------------------------------------
<S> <C>
Uwe Rolf Dorken......... Chief Executive Officer of International
Operations of Parent since June 1999. Mr. Dorken
served as Director of International Operations
from 1994 to 1995.
</TABLE>
<TABLE>
<S> <C>
Wolfhard Friedrich Bender.. Chief Executive Officer of Mail Communications
and Productions of Parent. Mr. Bender also
serves as director of Deutsche Bundesdruckerei
and Central fur Coordination GmbH.
Prof. Dr. Wulf von Chief Executive Officer of Financial Services of
Schimmelmann............... Parent since 1999. Executive Officer of REGUS
Deutsche Postbank AG GmbH & Co. KK from 1997 to 1999. Executive
Friedrich-Ebert-Allee 114- Officer BHF-Bank AG prior to 1997.
126
53113 Bonn
Germany
Horst Eugen Kissel......... Chief Executive Officer of Human Resources of
Parent since 1996. Prior to 1996, Mr. Kissel
served as an Executive Officer of Deutsche
Postgewerkschaft.
Dr. Edgar Ernst............ Chief Financial Officer of Parent.
Peter Wagner............... Chief Executive Officer of Logistics of Parent
Danzas Management Ltd. and Chief Executive Officer of Danzas. Mr.
Leimenstrasse 1 Wagner has served as a board member of TT Club
P. O. Box 4002 Basel (through Transport Mutual Insurance Association
Switzerland Limited) Bermuda since 1997; Vontobel Holding
Swiss Citizen AG, Zurich since 1996; and Bank J. Vontobel AG,
Zurich since 1994.
B. Directors and Executive Officers of Purchaser.
<CAPTION>
Name, Citizenship Present Principal Occupation or Employment and
and Current Business Address Material Positions Held During the Past Five Years
- ---------------------------- --------------------------------------------------
<S> <C>
* Renato Chiavi............. President and Director since the Purchaser was
Danzas Management Ltd. founded. Mr. Chiavi has served as a Member of
Leimenstrasse 1 Group Management and Head of the
P. O. Box 4002 Basel Intercontinental Business Unit of Danzas since
Switzerland March 1996. Mr. Chiavi served as Head of the
Swiss Citizen Intercontinental Traffic Business Unit of Danzas
from 1994 to 1996.
* Dr. Klaus Engelen......... General Counsel, Executive Vice President and
Secretary since the Purchaser was founded. Dr.
Engelen has served as General Counsel of Parent
since April 1998. Prior to April 1998, Dr.
Engelen served as General Counsel of De Te Mobil
Deutsche Telekom MobilNet GmbH.
</TABLE>
S-4
<PAGE>
C. Persons Who May Be Designated by Parent to Serve as Directors on the
Company's Board upon Consummation of the Offer.
<TABLE>
<CAPTION>
Name, Citizenship
and Current Business Present Principal Occupation or Employment and
Address Material Positions Held During the Past Five Years
-------------------- --------------------------------------------------
<S> <C>
Peter Wagner............ See above for his principal occupation and
previous five year employment history.
Renato Chiavi........... See above for his principal occupation and
previous five year employment history.
Jim Fredholm............ Mr. Fredholm has served as a Member of Group
Danzas Management Ltd. Management and Chief Financial Officer of Danzas
Leimenstrasse 1 since 1998. From 1979 to 1998, Mr. Fredholm held
P. O. Box 4002 Basel various financial management positions in the
Switzerland transportation and retailing industries.
U.S. Citizen
Dr. Hans Oskar Director of the Department of Mergers and
Zieschang............... Corporations for Parent since 1998. Director
Marketing and Sales of Deutsche Post Parcelpost
of Parent from 1996 to 1998. Chief Executive
Officer of PSG Postdienst Services mbH from 1990
to 1996.
Dr. Bernd Boecken....... Director of Finance of Parent since April 1995.
Prior to 1995, Mr. Boecken served as Director of
Finance of BAYER AG, Leverkusen, Germany.
Dr. Klaus Engelen....... See above for his principal occupation and
previous five year employment history.
Dr. Andreas Hunziker.... Mr. Hunziker has served as a Member of Group
Danzas Management Ltd. Management and Head of Information Technology of
Leimenstrasse 1 Danzas since October 1996. From October 1992 to
P. O. Box 4002 Basel October 1996, Mr. Kunziker was a Senior Lecturer
Switzerland for Management Information at the University of
Swiss Citizen St. Gallen (HSG).
</TABLE>
S-5
<PAGE>
Facsimile copies of the Letter of Transmittal will be accepted. The Letter
of Transmittal, Share Certificates and any other required documents should be
sent or delivered by each stockholder of the Company or such stockholder's
broker, dealer, commercial bank, trust company or other nominee to the
Depositary at its addresses set forth below.
The Depositary for the Offer is:
ChaseMellon Shareholder Services, L.L.C.
By Mail: By Overnight Delivery: By Hand:
P.O. Box 3301 85 Challenger Road 120 Broadway, 13th Floor
South Hackensack, NJ Mail Drop-Reorg New York, NY 10271
07606 Ridgefield Park, NJ 07660 Attn: Reorganization
Attn: Reorganization Attn: Reorganization Department
Department Department
By Facsimile Transmission
(for Eligible Institutions only):
(201) 296-4293
Confirm By Telephone:
(201) 296-4860
Questions or requests for assistance or additional copies of this Offer to
Purchase and the Letter of Transmittal may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone
numbers set forth below. Stockholders may also contact their broker, dealer,
commercial bank or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
GEORGESON
SHAREHOLDER
COMMUNICATIONS INC.
17 State Street
10th Floor
New York, New York 10004
Bankers and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
The Dealer Manager for the Offer is:
Deutsche Banc Alex. Brown
Deutsche Bank Securities Inc.
31 West 52nd Street
New York, New York 10019
(212) 250-6000
(Call Collect)
<PAGE>
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
of
Air Express International Corporation
Pursuant to the Offer to Purchase
dated November 19, 1999
of
DP Acquisition Corporation
a wholly-owned subsidiary of
Deutsche Post AG
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, DECEMBER 17, 1999, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
ChaseMellon Shareholder Services, L.L.C.
By Mail: By Overnight Delivery: By Hand:
P.O. Box 3301 85 Challenger Road 120 Broadway, 13th Floor
South Hackensack, NJ Mail Drop-Reorg New York, NY 10271
07606 Ridgefield Park, NJ 07660 Attn: Reorganization
Attn: Reorganization Attn: Reorganization Department
Department Department
By Facsimile Transmission
(for Eligible Institutions only):
(201) 296-4293
Confirm By Telephone:
(201) 296-4860
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
<TABLE>
<CAPTION>
DESCRIPTION OF SHARES TENDERED
- -------------------------------------------------------------------------------
Name(s) and
Address(es)
of
Registered
Holder(s)
(Please
fill in, if Shares Tendered
blank) (Attach additional list if necessary)
- --------------------------------------------------------------
Total Number of
Shares
Represented Number of
Certificate by Shares
Number(s)* Certificate(s)* Tendered**
<S> <C> <C> <C>
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
Total Shares
</TABLE>
- -------------------------------------------------------------------------------
-------
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented
by any certificates delivered to the Depositary are being tendered. See
Instruction 4.
<PAGE>
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 either if certificates for Shares
(as defined below) are to be forwarded herewith or if delivery of Shares is to
be made by book-entry transfer to the Depositary's account at The Depository
Trust Company (the "Book-Entry Transfer Facility") pursuant to the book-entry
transfer procedure described under "Procedures for Accepting the Offer and
Tendering Shares" in the Offer to Purchase (as defined below). DELIVERY OF
DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY
TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Stockholders who wish to tender their Shares and whose certificates
evidencing Shares ("Share Certificates") are not immediately available or who
cannot deliver their Share Certificates and all other documents required hereby
to the Depositary prior to the Expiration Date (as defined in the Offer to
Purchase) or who cannot complete the procedure for delivery by book-entry
transfer on a timely basis, must do so pursuant to the guaranteed delivery
procedure described under "Procedures for Accepting the Offer and Tendering
Shares" in the Offer to Purchase. See Instruction 2.
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE
THE FOLLOWING:
Name of Tendering Institution _______________________________________________
Account No. _________________________________ at The Depository Trust Company
Transaction Code No. ________________________________________________________
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Stockholder(s) ________________________________________
Date of Execution of Notice of Guaranteed Delivery __________________________
Name of Institution which Guaranteed Delivery _______________________________
If delivery is by book-entry transfer: ______________________________________
Name of Tendering Institution _____________________________________________
Account No. _________________________________ at The Depository Trust Company
Transaction Code No. ________________________________________________________
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
2
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to DP Acquisition Corporation, a Delaware
corporation ("Purchaser") and a wholly-owned subsidiary of Deutsche Post AG
("Parent"), the above-described shares of common stock, par value $0.01 per
share (the "Shares"), of Air Express International Corporation, a Delaware
corporation (the "Company"), upon the terms and subject to the conditions set
forth in Purchaser's Offer to Purchase dated November 19, 1999 (the "Offer to
Purchase") and this Letter of Transmittal (which, together with any amendments
or supplements thereto or hereto, collectively constitute the "Offer"),
receipt of which is hereby acknowledged. 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 of its affiliates, the right to purchase all or
any portion of the Shares tendered pursuant to the Offer.
Upon the terms and subject to the terms and conditions of the Offer and
effective upon acceptance for payment of and payment for the Shares tendered
herewith, the undersigned hereby sells, assigns and transfers to or upon the
order of Purchaser all right, title and interest in and to all the Shares that
are being tendered hereby (and any and all other Shares or other securities
issued or issuable in respect thereof on or after November 15, 1999) and
appoints the Depositary the true and lawful agent and attorney-in-fact of the
undersigned with respect to such Shares (and all such other Shares or
securities), with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (a) deliver
Share Certificates (and all such other Shares or securities), or transfer
ownership of such Shares (and all such other Shares or securities) on the
account books maintained by the Book-Entry Transfer Facility, together, in any
such case, with all accompanying evidences of transfer and authenticity, to or
upon the order of Purchaser, (b) present such Shares (and all such other
Shares or securities) for transfer on the books of the Company and (c) receive
all benefits and otherwise exercise all rights of beneficial ownership of such
Shares (and all such other Shares or securities), all in accordance with the
terms of the Offer.
The undersigned hereby irrevocably appoints Renato Chiavi, Klaus Engelen,
and Wolfgang Betz and each of them, as the attorneys and proxies of the
undersigned, each with full power of substitution, to exercise all voting and
other rights of the undersigned in such manner as each such attorney and proxy
or his substitute shall in his sole discretion deem proper, with respect to
all of the Shares tendered hereby which have been accepted for payment by
Purchaser prior to the time of any vote or other action (and any and all other
Shares or other securities issued or issuable in respect thereof on or after
November 15, 1999), at any meeting of stockholders of the Company (whether
annual or special and whether or not an adjourned meeting), by written consent
or otherwise. This proxy is irrevocable and is granted in consideration of,
and is effective upon, the acceptance for payment of such Shares by Purchaser
in accordance with the terms of the Offer. Such acceptance for payment shall
revoke any other proxy or written consent granted by the undersigned at any
time with respect to such Shares (and all such other Shares or securities),
and no subsequent proxies will be given or written consents will be executed
by the undersigned (and if given or executed, will not be deemed to be
effective).
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby (and any and all other Shares or other securities issued or
issuable in respect thereof on or after November 15, 1999) and that when the
same are accepted for payment by Purchaser, Purchaser will acquire good and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances and not subject to any adverse claims. The undersigned will,
upon request, execute and deliver any additional documents deemed by the
Depositary or Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby (and all such other
Shares or securities).
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned. Except as stated in the Offer, this
tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in the Offer to Purchase under "Procedure for
Accepting the Offer and Tendering Shares" and in the instructions hereto will
constitute an agreement between the undersigned and Purchaser upon the terms
and subject to the conditions of the Offer.
3
<PAGE>
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions", please issue the check for the purchase price of all Shares
purchased, and return all Share Certificates evidencing Shares not purchased
or not tendered in the name(s) of the registered holder(s) appearing above
under "Description of Shares Tendered". Similarly, unless otherwise indicated
in the box entitled "Special Delivery Instructions", please mail the check for
the purchase price of all Shares purchased and all Share Certificates
evidencing Shares not tendered or not purchased (and accompanying documents,
as appropriate) to the address(es) of the registered holder(s) appearing above
under "Description of Shares Tendered". In the event that the boxes entitled
"Special Payment Instructions" and "Special Delivery Instructions" are both
completed, please issue the check for the purchase price of all Shares
purchased and return all Share Certificates evidencing Shares not purchased or
not tendered in the name(s) of, and mail such check and Share Certificates to,
the person(s) so indicated. Unless otherwise indicated herein in the box
entitled "Special Payment Instructions," please credit any Shares tendered
hereby and delivered by book-entry transfer, but which are not purchased by
crediting the account at the Book-Entry Transfer Facility. The undersigned
recognizes that Purchaser has no obligation, pursuant to the "Special Payment
Instructions," to transfer any Shares from the name of the registered
holder(s) thereof if Purchaser does not purchase any of the Shares tendered
hereby.
4
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS (See
Instructions 1, 6, 7 and 8)
To be completed ONLY if the check
for the purchase price of Shares
purchased (less the amount of any
applicable withholding tax) or
Share Certificates not tendered or
not purchased are to be issued in
the name of someone other than the
undersigned.
Issue:
[_] check
[_] certificate(s) to:
Name(s):__________________________
(Please Print)
_______________________________
_______________________________
_______________________________
Address:__________________________
__________________________________
(Zip Code)
__________________________________
(Taxpayer Identification No.)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 6, 7 and 8)
To be completed ONLY if the check
for the purchase price of Shares
purchased (less the amount of any
applicable withholding tax) or
Share Certificates not tendered or
not purchased are to be mailed to
someone other than the undersigned
or to the undersigned at an address
other than that shown below the
undersigned's signature(s).
Mail:
[_] check
[_] certificate(s) to:
Name(s):____________________________
(Please Print)
________________________________
________________________________
________________________________
Address:____________________________
____________________________________
(Zip Code)
5
<PAGE>
SIGN HERE
(Please complete Substitute Form W-9 below)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Signature(s) of Owners
Dated
---------------------------------------------------------------------
Name(s)
----------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please Print)
Capacity (full title)
----------------------------------------------------------
Address
----------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
Daytime Area Code and Telephone Number
-----------------------------------------
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
certificate(s) or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by a trustee, executor, administrator, guardian, attorney-in-
fact, agent, officer of a corporation or other person acting in a fiduciary or
representative capacity, please set forth full title and see Instruction 5.)
Guarantee of Signature(s)
(If required; see Instructions 1 and 5)
Name of Firm
-------------------------------------------------------------------
Authorized Signature
-----------------------------------------------------------
Dated
---------------------------------------------------------------------
6
<PAGE>
- -------------------------------------------------------------------------------
Payer: ChaseMellon Shareholder Services, L.L.C.
- -------------------------------------------------------------------------------
Part I Taxpayer Identification No.-- Part II For Payees
SUBSTITUTE For All Accounts Exempt
-------------------------------------- From
Form W-9 Enter your taxpayer Backup
Department of the identification num- Withholding
Treasury Internal ber in the appro- (see
Revenue Service priate box. For in- -------------- enclosed
individuals and sole Guidelines)
proprietors, this --------------
is your Social Se- Social
Payer's Request curity Number. For Security Number
for Taxpayer other entities, it
Identification No. is your Employer
Identification Num-
ber. If you do not OR
have a number, see
"How to Obtain a
TIN" in the
enclosed Guide-
lines.
Note: If the ac- --------------
count is in more
than one name, see --------------
the chart in the Employee
enclosed Guidelines Identification
to determine what Number
number to enter.
- -------------------------------------------------------------------------------
Certification--Under penalties of perjury, I certify that:
(1) 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 either
(a) 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 (b) I intend to mail or
deliver an application in the near future). I understand that if I do not
provide a taxpayer identification number within (60) days, 31% of all
reportable payments made to me thereafter will be withheld until I
provide a number;
(2) I am not subject to backup withholding either because (a) I am exempt
from backup withholding, or (b) I have not been notified by the Internal
Revenue Service ("IRS") that I am subject to backup withholding as a
result of a failure to report all interest or dividends, or (c) the IRS
has notified me that I am no longer subject to backup withholding; and
(3) Any information provided on this form is true, correct and complete.
- -------------------------------------------------------------------------------
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 ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
7
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm which is
a member of a recognized Medallion Program approved by The Securities Transfer
Associations, Inc. (an "Eligible Institution"). Signatures on this Letter of
Transmittal need not be guaranteed (a) if this Letter of Transmittal is signed
by the registered holder(s) of the Shares (which term, for purposes of this
document, shall include any participant in the Book-Entry Transfer Facility
whose name appears on a security position listing as the owner of Shares)
tendered herewith and such holder(s) have not completed the instruction
entitled "Special Payment Instructions" on this Letter of Transmittal or
(b) if such Shares are tendered for the account of an Eligible Institution.
See Instruction 5.
2. Delivery of Letter of Transmittal and Shares. This Letter of Transmittal
is to be used either if Share Certificates are to be forwarded herewith or if
delivery of Shares is to be made by book-entry transfer pursuant to the
procedures set forth in "Procedure for Accepting the Offer and Tendering
Shares" in the Offer to Purchase. Share Certificates evidencing all physically
delivered Shares, or a confirmation of a book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility of all Shares
delivered electronically, as well as a properly completed and duly executed
Letter of Transmittal (or facsimile thereof or, in the case of a book-entry
transfer, an Agent's Message) and any other documents required by this Letter
of Transmittal, must be received by the Depositary at one of its addresses set
forth on the front page of this Letter of Transmittal by the Expiration Date
(as defined in the Offer to Purchase). Stockholders whose Share Certificates
are not immediately available, who cannot deliver their Share Certificates and
all other required documents to the Depositary prior to the Expiration Date or
who cannot complete the procedure for delivery by book-entry transfer on a
timely basis may tender their Shares pursuant to the guaranteed delivery
procedure described under "Procedures for Accepting the Offer and Tendering
Shares" in the Offer to Purchase. Pursuant to such procedure: (a) such tender
must be made by or through an Eligible Institution, (b) a properly completed
and duly executed Notice of Guaranteed Delivery, substantially in the form
provided by Purchaser, must be received by the Depositary by the Expiration
Date and (c) the Share Certificates evidencing all physically delivered
Shares, or a confirmation of a book-entry transfer into the Depositary's
account at the Book-Entry Transfer Facility of all Shares delivered
electronically, in each case together with a Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, and any other documents required by this Letter of
Transmittal, must be received by the Depositary within three National
Association of Securities Dealers, Inc. Automated National Market System
trading days after the date of execution of such Notice of Guaranteed
Delivery, all as described under "Procedures for Accepting the Offer and
Tendering Shares" in the Offer to Purchase.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY
TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER.
SHARES WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY.
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. By executing this Letter of Transmittal
(or facsimile thereof), the tendering stockholder waives any right to receive
any notice of the acceptance for payment of their Shares.
3. Inadequate Space. If the space provided herein under "Description of
Shares Tendered" is inadequate, the Share Certificate numbers, the number of
Shares evidenced by such Share Certificates and the number of Shares tendered
should be listed on a separate schedule and attached hereto.
8
<PAGE>
4. Partial Tenders (not applicable to stockholders who tender by book-entry
transfer). If fewer than all the Shares evidenced by any Share Certificate
delivered to the Depositary herewith are to be tendered hereby, fill in the
number of Shares which are to be tendered in the box entitled "Number of
Shares Tendered." In such cases, new Share Certificate(s) evidencing the
remainder of the Shares that were evidenced by the Share Certificates
delivered to the Depositary herewith will be sent to the person(s) signing
this Letter of Transmittal, unless otherwise provided in the box entitled
"Special Delivery Instructions" on the reverse hereof, as soon as practicable
after the expiration or termination of the Offer. All Shares evidenced by
Share Certificates delivered to the Depositary will be deemed to have been
tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written
on the face of the Share Certificates without alteration, enlargement or any
change whatsoever.
If any of the Shares tendered hereby are held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in the names of
different holders, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of such
Shares.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Share Certificates or separate
stock powers are required, unless payment is to be made to, or Share
Certificates evidencing Shares not tendered or not purchased are to be issued
in the name of, a person other than the registered holder(s), in which case,
the Share Certificate(s) evidencing the Shares tendered hereby must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear(s) on such Share
Certificate(s). Signatures on such Share Certificate(s) and stock powers must
be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Share Certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such Share Certificate(s). Signatures on
such Share Certificate(s) and stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to Purchaser of such person's authority so to act
must be submitted.
6. Stock Transfer Taxes. Except as otherwise provided in this Instruction
6, Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or
Share Certificate(s) evidencing Shares not tendered or not purchased are to be
issued in the name of, a person other than the registered holder(s), the
amount of any stock transfer taxes (whether imposed on the registered
holder(s), such other person or otherwise) payable on account of the transfer
to such other person will be deducted from the purchase price of such Shares
purchased, unless evidence satisfactory to Purchaser of the payment of such
taxes, or exemption therefrom, is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE CERTIFICATES EVIDENCING THE
SHARES TENDERED HEREBY.
9
<PAGE>
7. Special Payment and Delivery Instructions. If a check for the purchase
price of any Shares tendered hereby is to be issued, or Share Certificate(s)
evidencing Shares not tendered or not purchased are to be returned, in the
name of a person other than the person(s) signing this Letter of Transmittal
or if such check or any such Share Certificate is to be sent to someone other
than the person(s) signing this Letter of Transmittal or to the person(s)
signing this Letter of Transmittal but at an address other than that shown in
the box entitled "Description of Shares Tendered," the appropriate boxes on
this Letter of Transmittal must be completed. All such Shares tendered hereby
by book-entry transfer and not purchased will be returned by crediting the
account at the Book-Entry Transfer Facility from which such Shares were
delivered.
8. Substitute Form W-9. Under the federal income tax laws, the Depositary
will be required to withhold 31% of the amount of any payments made to certain
stockholders pursuant to the Offer. In order to avoid such backup withholding,
each tendering stockholder, and, if applicable, each other payee, must provide
the Depositary with such stockholder's or payee's correct taxpayer
identification number and certify that such stockholder or payee is not
subject to backup withholding by completing the Substitute Form W-9 set forth
above. In general, if a stockholder or payee is an individual, the taxpayer
identification number is the Social Security Number of such individual. If the
Depositary is not provided with the correct taxpayer identification number,
the stockholder or payee may be subject to a $50 penalty imposed by the
Internal Revenue Service. Certain stockholders or payees (including, among
others, all corporations) are not subject to these backup withholding and
reporting requirements. In order to satisfy the Depositary that a stockholder
or payee qualifies as an exempt recipient, such stockholder or payee must
submit a statement, signed under penalties of perjury, attesting to that
individual's exempt status. For further information concerning backup
withholding and instructions for completing the Substitute Form W-9 (including
how to obtain a taxpayer identification number if you do not have one, and how
to complete the Substitute Form W-9 if Shares are held in more than one name),
consult the enclosed Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9. Stockholders who are non-resident aliens or
foreign entities not subject to backup withholding must complete a Form W-8BEN
(Certificate of Foreign Status) (and not a Substitute Form W-9) and give the
Depositary a completed Form W-8BEN prior to the receipt of any payments to
avoid backup withholding. Such Form W-8BEN may be obtained from the
Depositary.
Failure to complete the Substitute Form W-9 will not, by itself, cause
Shares or Share Certificates to be deemed invalidly tendered, but may require
the Depositary to withhold 31% of the amount of any payments made pursuant to
the Offer. Backup withholding is not an additional federal income tax. Rather,
the federal income tax liability of a person 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 provided that the required
information is furnished to the Internal Revenue Service. NOTE: FAILURE TO
COMPLETE AND RETURN THE SUBSTITUTE FORM W-9 MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE
ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
9. Requests for Assistance or Additional Copies. Requests for assistance or
additional copies of the Offer to Purchase and this Letter of Transmittal may
be obtained from the Information Agent or the Dealer Manager at their
respective addresses or telephone numbers set forth below.
10
<PAGE>
The Information Agent is:
GEORGESON
SHAREHOLDER
COMMUNICATIONS INC.
17 State Street
10th Floor
New York, NY 10004
Banks and Brokerage Firms Call:
(212) 440-9800
Stockholders Please Call:
(800) 223-2064
The Dealer Manager is:
Deutsche Banc Alex. Brown
Deutsche Bank Securities Inc.
130 Liberty Street
New York, New York 10006
(212) 250-6000
(Call Collect)
<PAGE>
Notice of Guaranteed Delivery
To Tender Shares of Common Stock
of
Air Express International Corporation
Pursuant to the Offer to Purchase
dated November 19, 1999
of
DP Acquisition Corporation
a wholly-owned subsidiary of
Deutsche Post AG
This Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to accept the Offer (as defined below) (i) if
certificates ("Share Certificates") evidencing shares (the "Shares") of common
stock, par value $0.01 per share, of Air Express International Corporation, a
Delaware corporation (the "Company"), are not immediately available, (ii) if
Share Certificates and all other required documents cannot be delivered to
ChaseMellon Shareholder Services, L.L.C., as Depositary (the "Depositary"),
prior to the Expiration Date (as defined under "Terms of the Offer" in the
Offer to Purchase (as defined below)) or (iii) if 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 mail to the Depositary. See
"Procedures for Accepting the Offer and Tendering Shares" in the Offer to
Purchase.
The Depositary for the Offer is:
ChaseMellon Shareholder Services, L.L.C.
By Mail: By Overnight Delivery: By Hand:
P.O. Box 3301 85 Challenger Road 120 Broadway, 13th Floor
South Hackensack, NJ Mail Drop-Reorg New York, NY 10271
07606 Ridgefield Park, NJ 07660 Attn: Reorganization
Attn: Reorganization Attn: Reorganization Department
Department Department
By Facsimile Transmission
(for Eligible Institutions only):
(201) 296-4293
Confirm By Telephone:
(201) 296-4860
---------------
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible
Institution" under the instructions thereto, such signature guarantee must
appear in the applicable space provided in the signature box on the Letter of
Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to DP Acquisition Corporation, a
Delaware corporation (the "Purchaser") and a wholly-owned subsidiary of
Deutsche Post AG, upon the terms and subject to the conditions set forth
in the Offer to Purchase dated November 19, 1999 (the "Offer to Purchase")
and the related Letter of Transmittal (the "Letter of Transmittal" and,
together with the Offer to Purchase, the "Offer"), receipt of which is
hereby acknowledged, shares of common stock, par value $0.01 per
share (the "Shares"), of Air Express International Corporation, a Delaware
corporation, pursuant to the guaranteed delivery procedure set forth under
"Procedures for Accepting the Offer and Tendering Shares" in the Offer to
Purchase.
Certificate Nos. (if available): SIGN HERE
------------------------------------ ------------------------------------
(Signature(s) of Holder(s))
------------------------------------
Dated: _____________________________
If Shares will be tendered by book- Name(s) of Holder(s): ______________
entry transfer: Please Print or Type
Account No. ________________________ ------------------------------------
at The Depository Trust Company Address
------------------------------------
Zip Code
------------------------------------
Area Code and Telephone Number
2
<PAGE>
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm which is a member of a registered national
securities exchange or the National Association of Securities Dealers, Inc.,
or a commercial bank or trust company having an office or correspondent in
the United States, guarantees (a) that the above named person(s) "own(s)" the
Shares tendered hereby within the meaning of Rule 14e-4 under the Securities
Exchange Act of 1934, (b) that such tender of Shares complies with Rule 14e-4
and (c) to deliver to the Depositary the Shares tendered hereby, together
with a properly completed and duly executed Letter(s) of Transmittal (or
facsimile(s) thereof) or, in the case of a book-entry transfer, an Agent's
Message (as defined in the Offer to Purchase) in lieu of the Letter of
Transmittal, and any other required documents, all within three National
Association of Securities Dealers, Inc. Automated Quotation National Market
System trading days of the date hereof.
------------------------------------- -------------------------------------
Name of Firm Authorized Signature
------------------------------------- -------------------------------------
Address Title
------------------------------------- Name: _______________________________
Zip Code Please Print or Type
------------------------------------- Dated:
--------------------------------
Area Code and Telephone Number
DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE.
SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
3
<PAGE>
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Air Express International Corporation
at
$33.00 Net Per Share
by
DP Acquisition Corporation
a wholly-owned subsidiary of
Deutsche Post AG
November 19, 1999
To Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees:
We have been appointed by DP Acquisition Corporation, a Delaware corporation
(the "Purchaser") and a wholly-owned subsidiary of Deutsche Post AG ("Parent"),
to act as Dealer Manager in connection with its offer to purchase all
outstanding shares of common stock, par value $0.01 per share (the "Shares"),
of Air Express International Corporation, a Delaware corporation (the
"Company"), at $33.00 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Purchaser's Offer to Purchase dated
November 19, 1999 and the related Letter of Transmittal (which together
constitute the "Offer").
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
1. Offer to Purchase dated November 19, 1999;
2. Letter of Transmittal for your use and for the information of your
clients, together with Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 providing information relating
to backup federal income tax withholding;
3. Notice of Guaranteed Delivery to be used to accept the Offer if the
Shares and all other required documents cannot be delivered to ChaseMellon
Shareholder Services, L.L.C. (the "Depositary") by the Expiration Date (as
defined in the Offer to Purchase);
4. A form of letter which may be sent to your clients for whose accounts
you hold Shares registered in your name or in the name of your nominee,
with space provided for obtaining such clients' instructions with regard to
the Offer; and
5. Return envelope addressed to ChaseMellon Shareholder Services,
L.L.C., as the Depositary.
<PAGE>
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, DECEMBER 17, 1999, UNLESS THE OFFER IS EXTENDED.
The Purchaser will not pay any fees or commissions to any broker or dealer
or other person (other than the Dealer Manager, the Information Agent or the
Depositary as described in the Offer to Purchase) for soliciting tenders of
Shares pursuant to the Offer. The Purchaser will, however, upon request,
reimburse brokers, dealers, commercial banks and trust companies for
reasonable and necessary costs and expenses incurred by them in forwarding
materials to their customers. The Purchaser will pay all stock transfer taxes
applicable to its purchase of Shares pursuant to the Offer, subject to
Instruction 6 of the Letter of Transmittal.
In order to accept the Offer, a duly executed and properly completed Letter
of Transmittal and any required signature guarantees or, in the case of a
book-entry transfer of Shares, an Agent's Message (as defined in the Offer to
Purchase) in lieu of the Letter of Transmittal, and any other required
documents, should be sent to the Depositary by 12:00 midnight, New York City
time, on Friday, December 17, 1999.
Any inquiries you may have with respect to the Offer should be addressed
to, and additional copies of the enclosed materials may be obtained from, the
Information Agent or the undersigned at the addresses and telephone numbers
set forth on the back cover of the Offer to Purchase.
Very truly yours,
Deutsche Bank Securities Inc.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
THE AGENT OF DP ACQUISITION CORPORATION, THE DEALER MANAGER, THE INFORMATION
AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY
DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE
OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED
THEREIN.
2
<PAGE>
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Air Express International Corporation
at
$33.00 Net Per Share
by
DP Acquisition Corporation
a wholly-owned subsidiary of
Deutsche Post AG
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated November
19, 1999 and the related Letter of Transmittal (which together constitute the
"Offer") in connection with the offer by DP Acquisition Corporation, a
Delaware corporation (the "Purchaser") and a wholly-owned subsidiary of
Deutsche Post AG ("Parent"), to purchase for cash all outstanding shares of
common stock, par value $0.01 per share (the "Shares"), of Air Express
International Corporation, a Delaware corporation (the "Company"). We are the
holder of record of Shares held for your account. A tender of such Shares can
be made only by us as the holder of record and pursuant to your instructions.
The 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.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the Letter of Transmittal.
Your attention is invited to the following:
1. The tender price is $33.00 per Share in cash.
2. The Offer and withdrawal rights expire at 12:00 Midnight, New York
City time, on Friday, December 17, 1999, unless the Offer is extended.
3. The Board of Directors of the Company has unanimously approved the
Merger Agreement and the transactions contemplated thereby and determined
that the Merger Agreement and the transactions contemplated thereby,
including the Offer and the Merger, are fair to, and in the best interests
of, the holders of Shares. The Board of Directors of the Company recommends
that the Company's stockholders tender their Shares pursuant to the Offer.
4. The Offer is conditioned upon, among other things, (1) there being
validly tendered and not withdrawn prior to the expiration of the Offer a
number of Shares which, together with any Shares then beneficially owned by
Parent, represent at least a majority of the outstanding Shares on a fully
diluted basis, (2) any waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 having expired or having been terminated and (3)
clearance under the European Commission's Council Regulation No. 4064/89
having been received.
<PAGE>
5. Any stock transfer taxes applicable to the sale of Shares to the
Purchaser pursuant to the Offer will be paid by the Purchaser, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing, detaching and returning to us the instruction
form on the following page. 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 detachable part hereof. Your
instructions should be forwarded to us in ample time to permit us to submit a
tender on your behalf by the expiration of the Offer.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares in any jurisdiction in which the making of the
Offer or acceptance thereof would not be in compliance with the laws of such
jurisdiction.
Payment for Shares accepted for payment pursuant to the Offer will be made
only after timely receipt by ChaseMellon Shareholder Services, L.L.C. (the
"Depositary") of (a) certificates evidencing such Shares or confirmation of
the book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company (the "Book-Entry Transfer Facility"), pursuant to the
procedures set forth in the Offer to Purchase under "Procedures for Accepting
the Offer and Tendering the Shares", (b) the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees or, in the case of a book-entry transfer, an Agent's
Message (as defined in the Offer to Purchase) in lieu of the Letter of
Transmittal, and (c) any other documents required by the Letter of
Transmittal. Accordingly, payment may not be made to all tendering
shareholders at the same time depending upon when certificates for or
confirmations of book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility are actually received by the
Depositary.
2
<PAGE>
Instructions with Respect to
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Air Express International Corporation
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated November 19, 1999, and the related Letter of
Transmittal, in connection with the offer by DP Acquisition Corporation to
purchase all outstanding shares of common stock, par value $0.01 per share
(the "Shares"), of Air Express International Corporation.
This will instruct you to tender the number of Shares indicated below held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the related Letter of
Transmittal.
Number of Shares to be Tendered: SIGN HERE
- ----------------------------------- Shares/1/ ---------------------------------
Signature(s)
Dated
---------------------------------- ---------------------------------
---------------------------------
---------------------------------
Please print name(s) and
addresses here
THIS FORM MUST BE RETURNED TO THE BROKERAGE FIRM MAINTAINING YOUR ACCOUNT.
- --------
/1/Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
3
<PAGE>
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
Give the EMPLOYER
For this type of SOCIAL SECURITY For this type of IDENTIFICATION
account number of: account number of:
- --------------------- -------------------- -------------------- --------------------
<S> <C> <C> <C>
1. An individual's The individual 6. A valid trust, Legal entity (Do not
account estate, or pension furnish the
trust identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated in
the account title).4
2. Two or more The actual owner of 7. Corporate account The corporation
individuals (joint the account or, if
account) combined funds, the
first individual on
the account/1/
3. Custodian account The minor/2/ 8. Association, The organization
of a minor (Uniform club, religious,
Gift to Minors Act) charitable,
educational or
other tax-exempt
organization
account
4. a. The usual The grantor- 9. Partnership The partnership
revocable savings trustee/1/ account
trust account
(grantor is also
trustee)
b. So-called trust The actual owner/1/ 10. A broker or The broker or
account that is not registered nominee nominee
a legal or valid
trust under State
law
5. Sole The owner/3/ 11. Account with the The public entity
proprietorship Department of
account 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/You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your social security number or
employer identification number.
/4/List first and circle the name of the legal trust, estate, or pension
trust.
Note: if no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
How to Obtain a TIN
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5 (or, in the case of resident aliens who do not have
and are not eligible for Social Security numbers, Form W-7, Application for
Individual Taxpayer Identification Number), Application for a Social Security
Number Card, or Form SS-4, Application for Employer Identification Number, at
the local office of the Social Security Administration or the Internal Revenue
Service and apply for a number.
Payees Exempt from Backup Withholding
Even if the payee does not provide a TIN in the manner required, you are not
required to backup withhold on any payments you make if the payee is:
. An organization exempt from tax under section 501(a), any IRA, or a
custodial account under section 403(b)(7) if the account satisfies the
requirements of Section 401(f)(2).
. The United States or any of its agencies or instrumentalities.
. A state, the District of Columbia, a possession of the United States, or
any of their political subdivisions or instrumentalities.
. A foreign government or any of its political subdivisions, agencies, or
instrumentalities.
. An international organization or any of its agencies or instrumentalities.
Other payees that may be exempt from backup withholding include:
. A corporation.
. A foreign central bank of issue.
. A dealer in securities or commodities required to register in the United
States, the District of Columbia, or a possession of the United States.
. A futures commission merchant registered with the Commodity Futures Trading
Commission.
. A real estate investment trust.
. An entity registered at all times during the tax year under the Investment
Company Act of 1940.
. A common trust fund operated by a bank under section 584(a).
. A financial institution.
. A middleman known in the investment community as a nominee or who is listed
in the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List.
. A trust exempt from tax under section 664 or described in section 4947.
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 United
States and that have at least one nonresident alien partner.
. Payments of patronage dividends not paid in money.
. Payments made by certain foreign organizations.
. Section 404(k) distributions made by an ESOP.
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 of 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.
. Mortgage interest paid to you.
Exempt payees described above should file Substitute Form W-9 to avoid
possible erroneous backup withholding. FURNISH YOUR TAXPAYER IDENTIFICATION
NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM IN PART II, SIGN AND DATE THE
FORM, AND RETURN IT TO THE PAYER.
Certain payments, other than interest, dividends and patronage dividends
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045 and 6050A.
Privacy Act Notice.--Section 6109 requires most recipients of dividend,
interest or other payments to give their correct 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.--Wilfully 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.
2
<PAGE>
Exhibit (a)(7)
Darien, CT, Frankfurt/Main, Basel, November 15, 1999
Press Release
Air Express International (AEI)
signs definitive merger agreement
with Deutsche Post
Deutsche Post gains base in the USA
Air Express International Corporation (NASDAQ: AEIC), the largest U.S.-based
international freight forwarder, and Deutsche Post, Europe's largest mail,
parcels, and logistics company, today announced that they have signed a
definitive merger agreement. Under the terms of the merger agreement, Deutsche
Post will acquire AEI for $33 per share in cash or approximately $1.14 billion.
AEI's Board of Directors and Deutsche Post's supervisory board approved the
agreement.
Pursuant to the merger agreement, Deutsche Post will commence a tender offer for
all outstanding shares of AEI at a price of $33 per share in cash. Upon
consummation of the tender offer, any remaining shares of Air Express will be
acquired in a cash merger at the same price.
The tender offer is subject to various conditions including the tender of a
majority of the outstanding shares on a fully diluted basis, and subject to U.S.
and European governmental and regulatory approvals and other conditions
customary for similar transactions.
Deutsche Post plans to integrate all activities into the Danzas Intercontinental
Business Unit. As a result, Deutsche Post gains a major stronghold in the
U.S.A., and Danzas becomes the leading airfreight forwarder worldwide.
The new Chief Executive Officer (CEO) of Danzas-AEI will be Renato Chiavi, who
now heads up intercontinental business at Danzas. AEI's present CEO, Guenter
Rohrmann, will assume the position of Vice Chairman of Danzas-AEI and will be
responsible for the integration. Peter Wagner will be Chairman of the combined
company. Hendrik J. Hartong jr., AEI's present Chairman, will join the Danzas
board.
Commenting on the proposed transaction, Dr. Klaus Zumwinkel, Board Chairman of
Deutsche Post, stated: "With Air Express International, Deutsche Post gains an
ideal base in the U.S. The acquisition is another milestone on the strategic
road to becoming the leading international logistics firm." Zumwinkel continued:
"The Deutsche Post group expects to achieve total sales of about DM 55 billion
(about $29.3 billion or EURO 28.1 billion) in the year 2000 with some 270,000
employees. In the year of its IPO, therefore, Deutsche Post will be Number One
in Europe in its mail, parcel/express, and logistics activities plus a strong
position in financial services."
Peter Wagner, member of the Deutsche Post Board and CEO of Danzas, stated: "We
believe the acquisition of AEI will
<PAGE>
create substantial synergies. This joining of forces will position Danzas even
better in the U.S. and therefore in transatlantic and transpacific business.
When the transaction is completed, Danzas will be the leading global airfreight
forwarder, as AEI is already the leading US-based airfreight forwarder. This
will help us give customers what they want - one-stop-shopping."
AEI's Chairman Hartong declared: "AEI and Danzas have each been very strong
forwarders in their own rights, and they will be even stronger as partners. By
teaming up, the two companies will be a formidable force worldwide as a provider
of integrated logistics solutions." Hartong continued: "We believe this
transaction generates excellent value for our shareholders, and we urge them to
accept the offer."
Guenter Rohrmann, AEI's president and CEO, added: "This transaction is very
favorable for the customers of both AEI and Danzas. They will be able to draw
upon the greatly expanded resources of the combined organizations, whose sum
will be much greater than the parts."
Headquartered in Darien, CT, AEI is the oldest and largest airfreight forwarder
in the U.S. and the world leader in integrated logistics services delivering
multi-modal transportation, warehousing and distribution, customs brokerage and
information management solutions across a network of 705 locations in more than
135 countries. With 7,700 employees worldwide, the Company generates gross
revenues of more than $1.5 billion (DM 2.8 billion, EURO 1.4 billion) in 1998.
Information on AEI is available on the World Wide Web at www.aeilogistics.com.
Danzas is one of Europe's leading logistics providers. Around 29,000 employees
produce annual sales of over $5.9 billion (DM 10.4 billion, EURO 5.4 billion).
Founded in 1815 and headquartered in Basel, Switzerland, Danzas is present in
104 countries on all continents. Information on Danzas is available on the World
Wide Web at www.danzas.com.
Further information on Deutsche Post is available on the World Wide Web at
www.deutschepost.com.
Contact:
Deutsche Post Prof. Dr. Gert Schukies,
Dr. Martin Dopychai
Tel.: ++49 228 182-99 88
Danzas Management AG Patrick Kaiser, Michele Thuring
Tel.: ++41 61 268-7612/-7514
Air Express International Mike Lorelli
Tel.: ++1 203 655 5730
<PAGE>
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 November
19, 1999 and the related Letter of Transmittal and is not being made to, nor
will tenders be accepted from or on behalf of, holders of Shares in any
jurisdiction in which the making of the Offer or acceptance thereof would not be
in compliance with the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Air Express International Corporation
at
$33.00 Net Per Share
by
DP Acquisition Corporation
a wholly-owned subsidiary of
Deutsche Post AG
DP Acquisition Corporation, a Delaware corporation ("Purchaser") and a
wholly-owned subsidiary of Deutsche Post AG, a German corporation ("Parent"), is
offering to purchase all outstanding shares of common stock, par value $0.01 per
share (the "Shares"), of Air Express International Corporation, a Delaware
corporation (the "Company"), at a price of $33.00 per Share, net to the seller
in cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase dated November 19, 1999 (the "Offer to Purchase") and in the related
Letter of Transmittal (which, together with any amendments or supplements
thereto, constitute the "Offer").
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, DECEMBER 17, 1999 UNLESS THE OFFER IS
EXTENDED (SUCH DATE, AS EXTENDED FROM TIME TO
TIME, THE "EXPIRATION DATE").
- --------------------------------------------------------------------------------
The Offer is conditioned upon, among other things, (1) there being validly
tendered and not withdrawn prior to the expiration of the Offer a number of
Shares which, together with any Shares then beneficially owned by Parent,
represent at least a majority of the outstanding Shares on a fully diluted basis
(the "Minimum Condition"), (2) any waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 having expired or having been terminated and
(3) clearance under the European Commission's Council Regulation No. 4064/89
having been received.
The Offer is being made pursuant to the Tender Offer and Merger Agreement
dated as of November 15, 1999 (the "Merger Agreement") among the Company,
Purchaser and Parent. The Merger Agreement provides, among other things, that as
promptly as practicable after the purchase of Shares pursuant to the Offer and
the satisfaction (or waiver, to the extent permissible under the Merger
Agreement) of the conditions to the Merger, Purchaser shall, in accordance with
the General Corporation Law of the State of Delaware ("Delaware Law"), be merged
into the Company (the "Merger"), whereupon the separate existence of Purchaser
shall cease, and the Company shall continue as the surviving corporation.
Pursuant to the Merger, each outstanding Share shall be converted into the right
to receive the per Share price paid in the Offer in cash, without interest.
The Board of Directors of the Company has unanimously approved the Merger
Agreement and the transactions contemplated thereby and determined that the
Merger Agreement and the transactions contemplated thereby, including the Offer
and the Merger, are fair to, and in the best interests of, the holders of
Shares. The Board of Directors of the Company recommends that the Company's
stockholders tender their Shares pursuant to the Offer and approve and adopt the
Merger Agreement (if such approval is required under Delaware Law).
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when Purchaser gives oral or written notice to ChaseMellon
Shareholder Services, L.L.C. (the "Depositary") of Purchaser's acceptance for
payment of such Shares pursuant to the Offer. Upon the terms and subject to the
conditions of the Offer, payment for Shares accepted for payment pursuant to the
Offer will be made by deposit of the purchase price therefor with the
Depositary, which will act as agent for tendering stockholders for the purpose
of receiving payments from Purchaser and transmitting such payments to tendering
stockholders whose Shares have been accepted for payment. Under no circumstances
will interest on the purchase price for Shares be paid, regardless of any delay
in making such payment. In all cases, payment for Shares accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of (A) the certificates evidencing such Shares (the "Share Certificates") or
confirmation of a book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility (as defined in the Offer to
Purchase), (B) the Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, with any required signature guarantees or, in the
case of a book-entry transfer, an Agent's Message (as defined in the Offer to
Purchase) and (C) any other documents required under the Letter of Transmittal.
Accordingly, payment may be made to tendering stockholders at different times if
delivery of the Shares and other required documents occurs at different times.
Purchaser expressly reserves the right, in its sole discretion (but subject
to the terms and conditions of the Merger Agreement), at any time and from time
to time, to extend the period of time during which the Offer is open by giving
oral or written notice of such extension to the Depositary. Any such extension
will be followed by a public announcement thereof no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
Expiration Date.
Tenders of Shares made pursuant to the Offer are irrevocable except that
such Shares may be withdrawn at any time prior to the Expiration Date and,
unless theretofore accepted for payment by Purchaser pursuant to the Offer, may
also be withdrawn at any time after January 17, 2000. 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 page of the Offer to Purchase. Any such notice of withdrawal must
specify the name, address and taxpayer identification number of the person who
tendered the Shares to be withdrawn, the number of Shares to be withdrawn and
the name of the registered holder of such Shares, if different from that of the
person who tendered such Shares. If Share Certificates evidencing Shares to be
withdrawn have been delivered or otherwise identified to the Depositary, then,
prior to the physical release of such Share Certificates, the serial numbers
shown on such Share Certificates must be submitted to the Depositary and the
signature(s) on the notice of withdrawal must be guaranteed by an Eligible
Institution (as defined in the Offer to Purchase), unless such Shares have been
tendered for the account of an Eligible Institution. If Shares have been
tendered pursuant to the procedure for book-entry transfer as set forth in the
Offer to Purchase, any notice of withdrawal must specify the name and number of
the account at the Book-Entry Transfer Facility to be credited with the
withdrawn Shares. Withdrawn Shares may be retendered by again following one of
the procedures described in the Offer to Purchase at any time prior to the
Expiration Date. All questions as to the form and validity (including time of
receipt) of any notice of withdrawal will be determined by Purchaser, in its
sole discretion, whose determination will be final and binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
Securities Exchange Act of 1934, as amended, is contained in the Offer to
Purchase and is incorporated herein by reference.
The 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.
The Company has provided Purchaser with the Company's stockholder list and
security position listings for the purpose of disseminating the Offer to holders
of Shares. The Offer to Purchase and Letter of Transmittal will be mailed to
record holders of Shares whose names appear on the Company's stockholder list
and will be furnished, for subsequent transmittal to beneficial owners of
Shares, to brokers, dealers, commercial banks, trust companies, and similar
persons whose names, or the names of whose nominees, appear on the stockholder
list or, if applicable, who are listed as participants in a clearing agency's
security position listing.
Questions or requests for assistance may be directed to Georgeson
Shareholder Communications Inc., the Information Agent, or Deutsche Bank
Securities Inc., the Dealer Manager, at their respective addresses and telephone
numbers set forth below. Additional copies of the Offer to Purchase, the Letter
of Transmittal and other related materials may be obtained from the Information
Agent or the Dealer Manager. No fees or commissions will be paid to brokers,
dealers or other persons (other than the Dealer Manager and the Information
Agent) for soliciting tenders of the Shares pursuant to the Offer.
<PAGE>
The Information Agent for the Offer is:
GEORGESON
SHAREHOLDER
COMMUNICATIONS INC.
17 State Street
10th Floor
New York, NY 10004
Banks and Brokerage Firms Call: (212) 440-9800
Shareholders Please Call: (800) 223-2064
The Dealer Manager for the Offer is:
Deutsche Banc Alex. Brown
Deutsche Bank Securities Inc.
31 West 52nd Street
New York, NY 10004
(212) 250-6000
(Call Collect)
November 19, 1999
<PAGE>
Exhibit (b)(1)
Postbank
Page 13
Bayerische Landesbank Corporate Customers
Domestic &
International
[stamp:]
Deutsche Post AG
General Manager
Rec'd April [20], 1999
Dr. Boecken, Division Manager
- Secretary's Office -
Deutsche Post AG
Dr. Bernd Boecken
Division Manager
Corporate Financing
53105 Bonn
Your Letter of Please reference in Telephone Date
correspondence Our File
-2456-/Martin Kellner (0 89) 21 7-2382 April 20, 1999
Re: Credit Line for DM 1.5 Billion
Dear Dr. Boecken:
We refer to our recent conversations. We are pleased to confirm our willingness
to extend to Deutsche Post AG, Bonn, a credit line of
DM 1,500,000,000
----------------
(one billion five hundred million German marks).
The credit line is valid until
April 19, 2000.
During the term of the credit line it may be utilized through all versions of
short-term credit transactions, e.g. current accounts, money transactions,
taking out euro loans (at our discretion through our foreign branches or
subsidiaries). Foreign exchange transactions may also be offset against the
credit line.
<PAGE>
Postbank
Page 14
We will agree on the conditions upon conclusion of each credit transaction. You
will receive a separate confirmation of such conclusions, which will become an
integral part of the agreement.
[letterhead]
<PAGE>
Postbank
Page 15
Bayerische Landesbank Page 2
of Letter Dated
April 20, 1999
It has also been agreed that during the term of the credit line you will provide
to us your annual financial statements certified by an auditing company
(individual and consolidated financial statements), no later than nine months
after the balance sheet closing date. Moreover, you will provide upon our
request more extensive notes to the financial statements.
For the duration of the period in which we extend this credit, you promise not
to rank other creditors higher with respect to collateral and information than
our bank for comparable credits extended or yet to be extended (non-
discrimination declaration).
In addition, our General Terms and Conditions apply; you already have them on
file.
Please indicate your agreement with the above conditions by signing the attached
copy of this letter with binding force and returning it to us.
We are looking forward to continuing our pleasant business relationship.
Bayerische Landesbank Girozentrale
s/ s/
Norbert Enck Martin Kellner
Enclosure
<PAGE>
Exhibit (b)(2)
Credit Line in the Amount of Euro 150,000,000
for Deutsche Post AG ("Borrower")
(S) 1
Credit Line
Westdeutsche Landesbank Girozentrale, London branch ("the Bank") shall make
available to Borrower a variable credit line from June 2, 1999 through June 1,
2000 (365-day term) in the amount of euro 150,000,000 (one hundred and fifty
million euros).
(S) 2
Utilization
(1) Borrower may utilize drawdowns under the credit line during the entire term.
(2) For each drawdown, Borrower may elect utilization in euros or in an
Alternative Currency subject to the provisions of (S) 4. Alternative
Currencies are the British Pound ("GBP") and every currency which is freely
convertible and transferable on the London interbank market. The interbank
market is the European interbank market for euros and for GBP and the other
Alternative Currencies the London interbank market (the "relevant interbank
market" respectively).
(3) The conditions for utilization are:
(a) Borrower must have provided to the Bank no later than two banking days
before the first payout a copy of a current certificate of registration
together with the latest signature records.
(b) Borrower must have sent to the Bank by no later than 10:00 a.m. (London
time) two banking days before the Payout Date a written drawdown
declaration (using the form attached hereto) specifying the date ("Payout
Date"), the amount, the desired currency, the interest period (one, two,
three, or six months) and the account to which the amount is to be
transferred, if different from the account referred to in (S) 9 (1). If
the drawdown declaration is transmitted by fax, the Bank shall confirm
receipt of the declaration and at the same time advise Borrower of the
interest rate. A banking day within the meaning of this agreement is a
day on which the banks in Dusseldorf and London are open for business,
or, in the case of utilizations in euros, the banks in Dusseldorf,
London, and Brussels.
(S) 3
Interest Periods
Each interest period shall begin on the respective Payout Date (inclusive of
that date) and shall end on the Repayment Date (exclusive of that date). If an
interest period would end on a day which is not a banking day, the interest
period shall automatically be extended until the following banking day.
However, the foregoing shall not apply if the following banking day would fall
in a new calendar month. In such case, the interest period shall end on the
banking day immediately preceding the end of the interest period.
(S) 4
Alternative Currency
(1) In the event of selecting one of the Alternative Currencies, Borrower is
entitled, subject to the approval of the Bank, to make use of the
utilization or extension ((S) 5) of a tranche ("Drawdown") in
<PAGE>
2
an Alternative Currency. The Bank shall approve of the Drawdown if in its
opinion the currency is available on the respective relevant interbank
market. If this is not the case, or if it is impractical for the Drawdown to
be paid out in an Alternative Currency due to other circumstances relating
to the international currency markets, the Bank shall advise Borrower of
same without delay.
(2) In the case of a Drawdown in an Alternative Currency, the Bank shall pay out
to Borrower the respective euro equivalent in the Alternative Currency after
the Bank has determined same on the basis of the exchange rate for which it
would be able to buy the Alternative Currency on the interbank market at
11:00 a.m. London time on the second banking day before the payout. The
Bank shall advise Borrower without delay of the equivalent value of the
Drawdown in the Alternative Currency and of the underlying exchange rate.
(3) In the event that the drawdown amount is to be extended in a different
currency than the one in which it was due in the current interest period,
Borrower shall repay the drawdown amount on the last day of the current
interest period in the currency in which it is due and make the following
amount available to the Bank on the first day of the next interest period:
(a) in the case of an extension of the drawdown amount due in an Alternative
Currency, the original euro amount in euros and (b) in the case of an
extension of a drawdown amount due in euros or an Alternative Currency,
the amount calculated in accordance with the provision stipulated in
paragraph 2.
(4) In the event that the drawdown amount is to be extended in the same
Alternative Currency at the beginning of the next interest period as the
currency in which it was due in the current interest period, and if the euro
amount of the drawdown amount determined by the Bank on the basis of the
exchange rate for which it could have purchased euros with the respective
Alternative Currency on the interbank market at 11:00 a.m. London time two
banking days before the beginning of the next interest period for the
drawdown amount to be extended should be higher than 105% of the original
euro amount, the Borrower shall repay in the respective currency the amount
exceeding the original euro amount. If the euro amount of the drawdown
amount thus determined should be lower than 95% of the original euro amount,
the Bank shall make available to Borrower in the Alternative Currency the
amount falling short of the original euro amount, providing there are no
grounds for termination pursuant to (S) 9.
(5) No more than five currencies may be utilized at any one time.
(S) 5
Repayment, Extension
(1) The repayment of each Drawdown shall occur on the last day of the applicable
interest period in the currency of the respective Drawdown, unless the
Borrower declares to the Bank that it wishes to utilize the funds made
available to it for an additional interest period (which need not have the
same term). The provisions concerning the drawdown declaration shall apply
analogously to this extension declaration. If the repayment date should
fall on a day which is not a banking day, the repayment date shall be the
banking day immediately preceding that day.
(2) In the event of an extension in accordance with the foregoing paragraph, the
repayment date of the expired interest period shall be deemed the payout
date of the new interest period.
(S) 6
Interest
(1) Borrower shall pay the interest due on the amount of the respective
utilization on the last day of each interest period.
(2) Interest shall be calculated on the basis of the days actually elapsed and a
year of 360 days.
<PAGE>
3
(3) The interest rate shall consist of the respective reference interest rate
(paragraph 5) and a margin of 0.125%. The definitive interest rate shall be
EURIBOR for utilizations in euros and LIBOR for utilizations in an
Alternative Currency.
(4) The minimum reserve costs arising for a drawdown in GBP in London shall in
any event be borne by the Borrower.
(5) (a)(i) LIBOR is the interest rate, expressed as an annual interest rate,
determined and published by the information vendor appointed by the British
Bankers Association at the relevant time (currently published on the
respective Reuters page for the respective currency or on pages 3750 or 3740
of the Bridge Telerate Screen) which is quoted on the London interbank
market two banking days prior to the first day of the respective interest
period (interest determination date) around 11:00 a.m. (London time) for
deposits in the respective currency having a term equivalent to the interest
period.
(ii) In the event that LIBOR cannot be determined in the manner described
above because neither the information vendor nor another publication service
publishes the interest rate in question, or if the Bank cannot determine the
interest rate for other reasons, LIBOR for the following interest period
shall be the arithmetic mean ascertained by the Bank (if applicable rounded
up to the next sixteenth of a percent) of the interest rates cited to the
Bank by the reference banks as the rate they offer on the interest
determination date at or around 11:00 a.m. (London time) to first-class
banks on the London interbank market for loans in the respective currency
for the respective interest period. If one or more reference banks do not
name such an interest rate, the arithmetic mean shall be calculated as
described above on the basis of at least two quotations. Reference banks are
the London headquarters of the following banks: Westdeutsche Landesbank
Girozentrale, Midland Bank, and National Westminster Bank.
(b)(i) EURIBOR is the interest rate, expressed as an annual interest rate,
published on page 248 of the Bridge Telerate Screen or the Reuters page
entitled "EURIBOR01" which is quoted on the European interbank market two
banking days before the first day of the respective interest period around
11:00 a.m. Brussels time for deposits in euros having a term corresponding
to the interest period; or
(ii) if these pages or services are no longer available or relevant, that
other page or that other service selected by WestLB for the purpose of
advertising the average EURIBOR rate; or
(iii) in the event that EURIBOR cannot be determined in the manner described
above because neither the information vendor nor another publication service
publishes the interest rate in question, or if the Bank cannot determine the
interest rate for other reasons, EURIBOR for the interest period shall be
the arithmetic mean ascertained by the Bank (if applicable rounded up to the
next sixteenth of a percent) of the interest rates cited to the Bank by the
reference banks as the rate they offer on the interest determination date at
or around 11:00 a.m. (Brussels time) to first-class banks on the European
interbank market for loans in euros for the respective interest period. Such
arithmetic mean shall be based on at least two quotations.
The reference banks are three first-class banks on the European interbank
market to be named by WestLB.
(c) In the event that on an interest determination date the provisions of
(S) 6 (5)(a) or (b) are not applicable or cannot be implemented, the Bank
shall as soon after the interest determination date as possible refinance
the loan on an alternative basis in coordination with Borrower in such a
manner that the refinancing costs plus the margin to be agreed upon pursuant
to (S) 6 (3) prior to submission of the drawdown declaration are covered and
the refinancing is retroactively effective as of the beginning of the new
interest period.
<PAGE>
4
(S) 7
Interest for Late Payment
Amounts not paid by Borrower on the due date shall accrue interest as of the due
date at the rate resulting from the sum of the interest rate for call money on
the London interbank market or for euros on the European interbank market
(respective selling rate), the margin to be agreed upon pursuant to (S) 6 (3),
and a surcharge of 1% p.a. The right to provide proof of higher damages is
reserved.
(S) 8
Duties of the Borrower
Borrower has the following obligations from the day of concluding this Agreement
until repayment of all amounts outstanding under this Agreement has been made in
full:
(1) Borrower affirms that the payment obligations under this credit line
represent direct, unconditional, unsecured, and unsubordinated obligations
of the Borrower which subject to peremptory statutory exceptions rank
equally with all other present and future unsecured and unsubordinated
liabilities of the Borrower.
(2) Borrower shall ensure that until all of the amounts outstanding under this
Agreement have been repaid in full it shall not pledge to other lenders or
creditors for their accounts receivable from Borrower for loans provided for
a term of up to four years any real or obligatory collateral without either
involving the Bank in such collateral at equal ranking or pledging
collateral of equivalent value. Pledging collateral on behalf of a national
or supranational institution or body corporate under public law shall be
excluded from this obligation as a condition for the granting of credit,
providing the pledging of collateral is absolutely essential for the
granting of a loan and the pledging of collateral which are officially or
statutorily required.
(3) Borrower shall provide to the Bank its consolidated annual report and its
individual financial statements as soon as same become available.
(4) Borrower guarantees that the fulfillment of its obligations under this
Agreement shall not be adversely affected by insufficient Y2K compliance of
its technical equipment. In the event that despite the aforementioned
provision problems should arise with Borrower's technical equipment in
connection with conversion to the year 2000, Borrower shall advise Bank of
same immediately.
(S) 9
Grounds for Termination
The Bank is entitled to demand immediate repayment of the outstanding principal
plus accrued interest if:
(1) Borrower fails to repay any sum outstanding under this Agreement within
three days of the due date despite being reminded of same by the Bank in due
time, or
(2) Borrower fails to fulfill some other obligation under this Agreement within
30 days of being reminded to do so by the Bank, or
(3) there are any other important factors which could potentially prevent the
Borrower from complying with the payment obligation or which could endanger
the claims of the Bank.
<PAGE>
5
(S) 10
Payments
(1) The Bank shall make payments to Borrower free of charges by transferring
funds available on the due date to the account of the Borrower at Deutsche
Postbank AG, Bank Routing No. 370 100 50, Account No. 2752 502 (or to
another account to be named by Borrower to the Bank no later than with the
drawdown declaration).
(2) Borrower shall make the payment by transferring free of charges the
respective due amounts to an account to be named by the Bank for each
instance. In the event that the Bank should fail to specify such an account
on time, such account shall be the Bank's account at Landeszentralbank
Nordrhein-Westfalen in Dusseldorf, Account No. 300 500 00. Funds shall be
available on the due date. Borrower may specify a purpose for the funds
when making the transfer.
(3) None of the parties is entitled to offset counterclaims from the payment
claims of the other party or to assert rights of retention.
(S) 11
Increase of the Refinancing Costs
(1) If after the conclusion of this Agreement statutory or official provisions
should be issued or if the previous applicability of existing provisions
should change and as a result increase the refinancing costs of the Bank, or
if the Bank is obligated to make additional payments, Borrower shall be
obligated upon corresponding proof supplied by the Bank to compensate same
for increased costs or payments expended. The Bank shall advise Borrower of
such provisions immediately following the announcement of same.
(2) If the Bank should assert a claim against Borrower pursuant to (S) 11 (1),
[Borrower] shall be entitled to repay the respective loans together with
accrued interest in advance after giving three banking days' notice.
(S) 12
Correspondence
Correspondence in connection with this Agreement shall be made in writing in the
form of letters, telexes, faxes, or telegrams to the following addresses:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
For the Borrower: For the Bank:
- -----------------------------------------------------------------------------------------------
<S> <C>
Deutsche Post AG Westdeutsche Landesbank Girozentrale, London
Head Office Branch
Attn: Dr. Brakmann/Mr. Wonneberger Attention: Paul Lowder
51 Moorgate
- -----------------------------------------------------------------------------------------------
Money and Capital Transactions Dept. GB - London EC2R 6AE
- -----------------------------------------------------------------------------------------------
Fax: (49) 228/182 8961 Fax: (44) 171 3748546
- -----------------------------------------------------------------------------------------------
</TABLE>
(S) 13
Assignments
The Bank may assign in whole or in part its claims under this Agreement and the
Agreement as such within the WestLB group at any time without the approval of
the Borrower.
<PAGE>
6
(S) 14
Final Provisions
(1) Any changes to this Agreement shall be made in writing.
(2) In the event that individual provisions of this Agreement should be invalid
or unenforceable, the validity of the other provisions shall remain
unaffected thereby. The invalid or unenforceable provisions shall be
replaced by valid and enforceable provisions which most closely approximate
the original intent in consideration of the interests of both parties.
(3) This Agreement is subject to the laws of the Federal Republic of Germany.
(4) The parties agree that Dusseldorf shall be the jurisdictional venue and
place of performance for any lawsuits arising under this Agreement.
[initials]
Bonn, June 2, 1999 London, June 2, 1999
DEUTSCHE POST AG WESTDEUTSCHE LANDESBANK GIROZENTRALE
LONDON BRANCH
s/ s/ s/
<PAGE>
7
Drawdown Declaration
--------------------
From: DEUTSCHE POST AG
To: Westdeutsche Landesbank Girozentrale, London Branch
Re: DEUTSCHE POST AG
Euro 150,000,000 Credit Line Dated June 2, 1999
Dear Sir or Madam:
We intend to utilize the above-referenced credit line. With reference to (S) 2
of the underlying agreement dated June 2, 1999, we request payout under the
following conditions:
1. Payout Date:
2. Drawdown Amount in Euros:
3. Drawdown Currency:
4. Term of Interest Period:
5. Account Number:
(if different from (S) 10(1) of the agreement)
Sincerely,
DEUTSCHE POST AG
<PAGE>
Exhibit (b)(3)
[LETTERHEAD OF POSTBANK (GERMAN POSTAL BANK)]
Deutsche Post AG
General Management
Dr. Edgar Ernst
Member of the Management Board
Heinrich-von-Stephan-Strasse 1
63105 Bonn
Your ref:
Our ref: Klaus Houben
Phone: (0228) 220-6500
Date: 11/15/99
Subject: Credit confirmation
Dear Dr. Ernst:
I am pleased to confirm to you that we have extended the term of the general
credit line for Deutsche Post AG, in the amount of
DM 1,000,000,000.00
(in words: one billion German marks)
until 11/15/2000, for the present. Of course the corresponding amount in Euros
is available to you, if you choose.
You can utilize this general credit line, at your option, by transfer to your
current account, by short-term loans at fixed interest with terms up to 180
days, and, according to your credit agreement, also by a grant of credit to your
subsidiaries. We already made a corresponding sample of a credit order available
to you.
Up to the equivalent of DM 800 million, calculated on the basis of the daily
current cash average rate of exchange, you can also utilize this general credit
line in the following currencies:
US dollars
Swiss francs
British pounds
at our office in Luxemborg, provided these currencies are available to us. For
possible changes in the value of the Euro, we reserve a safety margin of 10% of
the credit line = DM 80 million.
This safety margin relates exclusively to any foreign currency borrowing that
would be current at a specific time.
<PAGE>
Page 2
For the credit amount being utilized at any time, the interest and commission
rates established by Deutsche Postbank AG for credits of this type will be
applied. The interest rate for utilization in a current account is currently
6.5% p.a. We will inform you of any changes in this interest rate that might be
caused by market conditions, well in advance.
Furthermore, there is the possibility of utilizing fixed-interest short-term
loans within the scope of this credit line, after arrangements have been made
between Deutsche Postbank AG, Luxembourg branch, and us. This agreement applies
for loans with terms up to six months and also expires on 11/15/2000. For the
assumption of short-term loans at fixed interest within the scope of the
approved credit line, we are willing, on the basis of current money market
practices, to bill a margin of maximum 1/8 percent above Eurolibor for borrowing
in the aforementioned currencies, or above Eurolibor for borrowing in the
domestic currency.
The credit lines for credit cards which you have been granted is applied to the
general credit line, as are the bill guaranties which we have taken on, in the
total amount of DM 1,852,954.27, at present.
As long as you and, according to your credit agreement, your subsidiaries are
borrowing against the credit line from us and/or from Deutsche Postbank AG,
Luxembourg branch, you and your subsidiaries will not provide any security for
third parties, for credit granted by them to you or to your subsidiaries, with
an original term of up to five years, without having provided equivalent
security to us or to Deutsche Postbank AG, Luxembourg branch. Security provided
in connection with normal supplier credits, by reservation of ownership (also in
the form of extensions and expansions) is excluded from this provision.
You explicitly confirm that you have not given any third parties security for
credit granted, with an original term of up to five years.
You will allow us to gain insight into your financial situation at any time, by
presenting your year-end financial statements including appendices and situation
report, for the term of this general credit line.
If any agreements reached in this contract should lack legal validity, in whole
or in part, or are not implemented, the remaining provisions shall nevertheless
remain in effect.
<PAGE>
Page 3
We explicitly point out that our General Business Conditions (Allgerneine
Geschaftsbedingungen-AGB) are an integral part of this contract. We enclose the
AGB with this letter.
On the basis of the current limits for large credits, in accordance with the law
on granting credit, which limit us to 20% of our equity capital, we must reserve
the right to reduce your general credit line in case of any change in our
available equity. If such a situation seems to be developing, we will contact
you as early as possible, in order to reach an agreement in this regard.
Please confirm your agreement with the content of this letter on the enclosed
copy.
We thank you for your cooperation with us in the past, and remain,
Sincerely,
Deutsche Postbank AG
/s/ Achim Scholz /s/ Volker Mai
Enclosure
We agree with the above conditions and have received the AGB.
The borrower is acting for its own account: yes/no
Bonn, on
- -----------------------------
Deutsche Post AG
<PAGE>
Exhibit (c)(1)
TENDER OFFER AND MERGER AGREEMENT
by and among
DEUTSCHE POST AG,
DP ACQUISITION CORPORATION,
and
AIR EXPRESS INTERNATIONAL CORPORATION
Dated as of November 15, 1999
<PAGE>
This TENDER OFFER AND MERGER AGREEMENT, dated as of November 15, 1999 (this
"Agreement"), by and among DEUTSCHE POST AG, a corporation organized under the
laws of the Federal Republic of Germany ("Parent"), DP ACQUISITION CORPORATION,
a Delaware corporation and a direct or indirect wholly owned Subsidiary of
Parent ("Merger Sub"), and AIR EXPRESS INTERNATIONAL CORPORATION, a Delaware
corporation (the "Company").
WITNESSETH:
WHEREAS, the Board of Directors of the Company has (i) determined that each
of the Offer and the Merger (as hereinafter defined) is advisable, fair and in
the best interests of the Company and its stockholders and (ii) resolved to
approve and adopt this Agreement and the transactions contemplated hereby and to
recommend acceptance of the Offer and approval and adoption by the stockholders
of the Company of this Agreement and the Merger;
WHEREAS, Merger Sub shall make a cash tender offer to acquire all of the
issued and outstanding shares of common stock of the Company, $0.01 par value
(such issued and outstanding shares being the "Shares"), for $33.00 per Share,
net to the selling stockholder in cash, in accordance with the terms and subject
to the terms and conditions set forth herein and in the offering documents
relating to the Offer (as defined in Section 1.1);
WHEREAS, pursuant to the Merger, each outstanding Share shall be exchanged
for the right to receive the Merger Consideration (hereinafter defined), and
each outstanding Stock Option (as hereafter defined) shall be settled out upon
the terms and subject to the conditions set forth herein.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent, Merger Sub and the Company hereby agree as follows:
ARTICLE 1
THE OFFER
Section 1.1. The Offer.
(a) Each of the Company and the Parent shall publicly announce the
execution of this Agreement promptly following its execution, and shall
cooperate with the timing of such announcements consistent with Company's
obligations as a reporting company under the Securities Exchange Act of 1934
(the "Exchange Act").
(b) Provided that nothing shall have occurred that has resulted in a
failure to satisfy any of the conditions set forth in Annex I to this Agreement,
not later than
<PAGE>
five business days after execution of this Agreement, Merger Sub shall, and
Parent shall cause Merger Sub to, commence (within the meaning of Rule l4d-2
under the Exchange Act) an offer to purchase all Shares at a price of $33.00 per
Share, net to the selling stockholder in cash (the "Offer," which term shall
include any amendments to such Offer not prohibited by this Agreement). The
obligation to consummate the Offer shall be subject to the condition that there
shall be validly tendered in accordance with the terms of the Offer and not
withdrawn a number of Shares that, together with the Shares then beneficially
owned by Parent, represents at least a majority of the Shares outstanding on a
fully diluted basis (the "Minimum Condition") and to the other conditions set
forth in Annex I to this Agreement. The Offer shall be made by means of an offer
to purchase containing the Minimum Condition and the further conditions set
forth in Annex I. Merger Sub hereby covenants and agrees that it shall hold the
Offer open for not less than 20 business days. Simultaneously with the
commencement of the Offer, Merger Sub shall file with the Securities and
Exchange Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1, as
amended and supplemented, with respect to the Offer (the "Schedule 14D-1") and
the related Letter of Transmittal, as amended or supplemented, (collectively
with the Schedule 14D-1 the "Offer Documents") provided that prior to the filing
of the Offer Documents, Merger Sub shall have afforded the Company's counsel
with a reasonable opportunity to review and make comments with respect to the
Offer Documents. The Parent agrees to provide the Company and its counsel with
any comments that the Parent or its counsel may receive from the SEC or its
staff with respect to the Offer Documents promptly after receipt thereof. Each
of the Parent, Company and Merger Sub shall promptly correct any information
provided by it for use in the Offer Documents that shall have become false or
misleading in any material respect and Merger Sub further agrees to take all
steps necessary to cause the Offer Documents as so corrected to be filed with
the SEC and disseminated to the holders of Shares, as and to the extent required
by applicable federal securities laws.
(c) Parent and Merger Sub expressly reserve the right to waive any of the
conditions to the Offer and to modify the terms and conditions of the Offer from
time to time, except that, without the prior written approval of the Company,
the Offer shall not be amended (i) to reduce the cash price per Share to be paid
pursuant thereto, (ii) to reduce the number of Shares to be purchased
thereunder, (iii) to change the form of consideration to be paid in the Offer,
(iv) to increase the minimum number of Shares which must be tendered to satisfy
the Minimum Condition, (v) to impose additional conditions to the Offer or (vi)
otherwise to amend the terms of the Offer in a manner that is materially adverse
to the stockholders of the Company. In the event that the conditions set forth
in paragraphs (a)(ii), (a)(iii) or (a)(iv) of Annex I shall not have been
satisfied or waived at the scheduled or any extended expiration date of the
Offer, Parent and Merger Sub shall extend the expiration date of the Offer in
increments of not less than five business days; provided that Parent and Merger
Sub shall not be required to extend the expiration date of the Offer past
February 15, 2000.
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Section 1.2. Company Action.
(a) The Company hereby consents to the Offer and represents that its Board
of Directors has adopted and approved this Agreement and the transactions
contemplated hereby including the Offer and the Merger, has determined that this
Agreement and the transactions contemplated hereby including the Offer and the
Merger are advisable, fair to and in the best interest of the Company and its
stockholders, and has resolved (subject to Section 5.2) to recommend acceptance
of the Offer to the Company's stockholders, and to recommend that the Company's
stockholders tender their Shares in the Offer and vote to approve and adopt this
Agreement and the Merger. The Company hereby consents to the inclusion in the
Offer Documents of the recommendation of the Board of Directors described in the
first sentence of this Section 1.2(a), except as such consent may be withdrawn
by the Board of Directors of the Company in accordance with Section 5.2 hereof.
The Company represents that it has received the opinion (the "Fairness Opinion")
of Morgan Stanley Dean Witter ("Company Financial Advisor") to the effect that
the consideration offered pursuant to the Offer and Merger is fair to
stockholders of the Company from a financial point of view; it being understood
and acknowledged that such opinion has been rendered to the Board of Directors
of the Company.
(b) On the date the Offer Documents are filed with the SEC, the Company
shall file with the SEC and mail to the holders of Shares a
Solicitation/Recommendation Statement on Schedule 14D-9, as amended and
supplemented (the "Schedule 14D-9"), which shall reflect the recommendation of
the Board of Directors that the Company's stockholders accept the Offer and, if
applicable, vote to approve and adopt this Agreement and the Merger; provided
that prior to the filing of such Schedule 14D-9, the Company shall have provided
Merger Sub's counsel with a reasonable opportunity to review and make comments
with respect to such Schedule 14D-9 provided that no representation is made by
the Company with respect to information supplied by the Parent or Merger Sub
specifically for inclusion in the Schedule 14D-9. Such recommendation shall not
be withdrawn or adversely modified except in accordance with Section 5.2 hereof.
The Company agrees to provide Parent and its counsel with any comments that the
Company or its counsel may receive from the SEC or its staff with respect to the
Schedule 14D-9 promptly after receipt thereof. Each of the Company, Parent and
Merger Sub shall promptly correct any information provided by it for use in the
Schedule 14D-9 that shall have become false or misleading in any material
respect and the Company further agrees to take all steps necessary to cause such
Schedule 14D-9 as so corrected to be filed with the SEC and disseminated to the
stockholders of the Company, in each case as and to the extent required by
applicable federal securities laws.
(c) The Company shall promptly furnish Parent and Merger Sub the names and
addresses of the holders of Shares and, if available, of non-objecting
beneficial owners of Shares and lists of securities positions of Shares held in
stock depositories, each as of the most recent practicable date, and shall from
time to time furnish Parent and Merger Sub with such additional information,
including updated or additional lists of
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stockholders, mailing labels and lists of securities positions, and other
assistance as Merger Sub may reasonably request in order to be able to
communicate the Offer to all stockholders of the Company including those
stockholders who become stockholders after the date of the mailing of the Offer
Documents. Subject to the requirements of law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Merger, Parent and Merger Sub shall, and shall cause each of
their affiliates to, hold the information contained in any of such labels and
lists in confidence, use such information only in connection with the Offer and
the Merger, and, if this Agreement is terminated, deliver to the Company all
copies of such information or extracts therefrom then in their possession or
under their control.
Section 1.3. Directors.
(a) Effective upon the acceptance for payment of Shares pursuant to the
Offer, Parent shall be entitled to designate such number of directors, rounded
up to the next whole number, on the Board of Directors of the Company as will
give Parent, 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
(i) the total number of directors on the Board of Directors of the Company
(giving effect to the increase in the size of such Board pursuant to this
Section 1.3) and (ii) the percentage that the number of votes represented by
Shares beneficially owned by Parent (including Shares accepted for payment
pursuant to the Offer) bears to the number of votes represented by Shares then
outstanding. In furtherance thereof, at such time the Company shall, upon
request of Parent and in compliance with Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder, promptly take all action (including, without
limitation, increasing the size of its Board of Directors or securing the
resignations of such number of its incumbent directors, or both), as is
necessary to enable such designees of Parent to be so elected or appointed to
the Company's Board of Directors, and the Company shall take all actions
available to the Company to cause such designees of Parent to be so elected or
appointed. At such time, the Company shall, if requested by Parent, also take
all action necessary to cause persons designated by Parent to constitute at
least the same percentage (rounded up to the next whole number) as is on the
Company's Board of Directors of (i) each committee of the Company's Board of
Directors, (ii) each board of directors (or similar body) of each Subsidiary of
the Company and (iii) each committee (or similar body) of each such board.
Subject to applicable law, the Company shall promptly take all action requested
by Parent necessary to effect any such election, including mailing to its
stockholders the information required by Section 14(f) of the Exchange Act and
Rule 14(f)-1 promulgated thereunder (or, at Parent's request, furnishing such
information to Parent for inclusion in the Offer Documents initially filed with
the SEC and distributed to the stockholders of the Company) as is necessary to
enable Parent's designees to be elected to the Company's Board of Directors.
Each of Parent and Merger Sub shall furnish to the Company, and be solely
responsible for, any information with respect to itself and its nominees,
directors and affiliates required by Section 14(f) of the Exchange Act and Rule
14f-1 promulgated thereunder.
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(b) Notwithstanding the foregoing, the Company shall use its reasonable
efforts to ensure that, in the event that Parent's designees are elected to the
Board of Directors of the Company, such Board of Directors shall have, at all
times prior to the Effective Time, at least two directors who are directors on
the date of this Agreement and who are not officers or affiliates of the Company
(it being understood that for purposes of this sentence, a director of the
Company shall not be deemed an affiliate of the Company solely as a result of
his status as a director or stockholder of the Company), Parent or any of their
respective Subsidiaries (the "Independent Directors"); and provided further,
that, in such event, if the number of Independent Directors shall be reduced
below two for any reason whatsoever the remaining Independent Director(s) may
designate a person to fill such vacancy who shall be deemed to be an Independent
Director for purposes of this Agreement or, if no Independent Directors then
remain, the other directors may designate two persons to fill such vacancies who
shall not be officers or affiliates of the Company, Parent or any of their
respective Subsidiaries, and such persons shall be deemed to be Independent
Directors for purposes of this Agreement.
(c) From and after the time, if any, that Parent's designees constitute a
majority of the Company's Board of Directors and prior to the Effective Time,
any amendment of this Agreement, any termination of this Agreement by the
Company, any extension of time for performance of any of the obligations of
Parent or Merger Sub hereunder, or any waiver of any condition to the Company's
obligations hereunder or any of the Company's rights hereunder may be effected
only by the action of a majority of the Independent Directors of the Company,
which action shall be deemed to constitute the action of any committee
specifically designated by the Board of Directors of the Company to approve the
actions contemplated hereby and the full Board of Directors of the Company.
Section 1.4. Stock Options.
(a) Upon consummation of the Offer, each of the outstanding options to
purchase Company Common Stock (collectively, a "Stock Option") granted under the
Company's 1991 Employee Incentive Stock Plan and 1996 Employees Incentive Stock
Plan, as amended, or any other employee or director stock option or compensation
plan or arrangement of the Company (collectively, the "Company Stock Option
Plans"), whether or not then vested or exercisable, shall automatically and
without any action on the part of the holder thereof (the "Option Holder"), be
converted into the right to receive cash in an amount equal to (i) the excess of
the Merger Consideration over the exercise price per share provided in such
Stock Option, multiplied by (ii) the number of shares of Company Stock subject
to such Stock Option. Promptly after the consummation of the Offer, the Company
shall cause each Option Holder to be paid the amount necessary to redeem such
holder's Stock Options in accordance with this Section 1.4. Notwithstanding any
other provisions of this Section, payment may be withheld in respect of any
Stock Option until necessary consents, if any, are obtained.
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ARTICLE 2
THE MERGER
Section 2.1. The Merger; Closing.
(a) The Merger. At the Effective Time (as defined in Section 2.2 hereof),
and subject to and upon the terms and conditions of this Agreement and in
accordance with the Delaware General Corporation Law (the "DGCL"), Merger Sub
shall be merged (the "Merger") with and into the Company, the separate corporate
existence of Merger Sub shall cease, and the Company shall continue as the
surviving corporation being the successor to all the property, rights, powers,
privileges, liabilities and obligations of both Merger Sub and the Company. The
Company as the surviving corporation after the Merger is hereinafter sometimes
referred to as the "Surviving Company."
(b) The Closing. Upon the terms and subject to the conditions set forth in
this Agreement, the closing of the Merger (the "Closing") shall take place at a
time and on a date to be specified by the parties hereto, which shall be no
later than the second business day after satisfaction or waiver of the
conditions set forth in Article VII, unless another time or date is agreed to in
writing by the parties hereto. The Closing will be held at the offices of Davis
Polk & Wardwell, 450 Lexington Avenue, New York, NY, unless another place is
agreed to in writing by the parties hereto.
Section 2.2. Effective Time. As promptly as practicable after the
satisfaction of or, to the extent permitted hereunder, waiver of the conditions
to the Merger set forth herein, but in no event later than two (2) business days
thereafter, the parties hereto shall file all necessary documentation, together
with any required related certificates, 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 DGCL (the time of such filing, or such later date as
is set forth in the Certificate of Merger, being the "Effective Time").
Section 2.3. Effect of the Merger. The Merger shall have the effects set
forth in the relevant provisions of the DGCL.
Section 2.4. Certificate of Incorporation in Bylaws. The certificate of
incorporation and bylaws of Merger Sub as in effect immediately prior to the
Effective Time shall be the certificate of incorporation and bylaws of the
Surviving Company until thereafter changed or amended as provided therein or by
the DGCL provided that, at the Effective Time, such certificate of incorporation
shall be amended to provide that the name of the corporation shall be Danzas Air
Express International Corporation.
Section 2.5. Directors and Officers
(a) Directors. The directors of Merger Sub immediately prior to the
Effective Time shall be the initial directors of the Surviving Company, each to
hold office
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in accordance with the certificate of incorporation and bylaws, until their
respective successors are duly elected or appointed and qualified in accordance
with the certificate of incorporation and bylaws or until their earlier death,
resignation or removal.
(b) Officers. The officers of the Company immediately prior to the
Effective Time shall serve as the officers of the Surviving Company until their
successors shall have been duly elected or appointed and shall have been
qualified in accordance with the certificate of incorporation and bylaws or
until their earlier death, resignation or removal.
Section 2.6. Merger Consideration; Cancellation of Securities. At the
Effective Time, by virtue of the Merger and without any action on the part of
Parent, Merger Sub, the Company or the holders of any of the Shares:
(a) Merger Consideration. Each Share issued and outstanding
immediately prior to the Effective Time (excluding (i) any Shares to be
canceled pursuant to Section 2.6(b) and (ii) Shares that are owned by
stockholders of the Company who satisfy all of the requirements to demand
payment for such Shares in accordance with Section 262 of the DGCL) shall
be converted into the right to receive $33.00 in cash or any higher price
per Share paid pursuant to the Offer, without interest (the amount payable
for one Share being referred to as the "Merger Consideration").
(b) Cancellation of Shares. Each Share owned by Parent, Merger Sub or
any Subsidiary of the Company or Parent immediately prior to the Effective
Time and each Share held by the Company in treasury shall, by virtue of the
Merger and without any action on the part of the holder thereof, be
canceled and retired without payment of any consideration therefor and
cease to exist.
(c) Common Stock of Merger Sub. Each share of the common stock of
Merger Sub issued and outstanding immediately prior to the Effective Time
shall be converted into and exchanged for one validly issued, fully paid
and nonassessable share of common stock of the Surviving Company with the
same rights, powers and privileges as the shares so converted. Each
certificate of Merger Sub evidencing ownership of any common stock of
Merger Sub shall evidence, from and after the Effective Time, ownership of
shares of the Surviving Company.
Section 2.7. Dissenting Shares.
(a) Notwithstanding Section 2.6, Shares that are issued and outstanding
immediately prior to the Effective Time and which are held by stockholders who
have not voted such Shares in favor of the Merger (or consented thereto in
writing), who shall have delivered a written objection to the Merger and a
demand for appraisal of such Shares in accordance with Section 262 of the DGCL
(insofar as such Section is applicable to the Merger and provides for appraisal
rights with respect thereto) and who shall not have failed to perfect or shall
not have effectively withdrawn or lost their rights to
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appraisal and payment under the DGCL (the "Dissenting Shares"), shall not be
converted into the right to receive the Merger Consideration, but shall instead
entitle the holder thereof to receive that consideration determined pursuant to
Section 262 of the DGCL; provided, however, that if such holder shall have
failed to perfect or shall have effectively withdrawn or otherwise lost such
holder's right to appraisal, such holder's Shares shall thereupon be deemed to
have been converted, at the Effective Time, into the right to receive the Merger
Consideration, without any interest thereon.
(b) The Company shall give Parent (i) prompt notice of any demands for
appraisal pursuant to the applicable provisions of the DGCL received by the
Company, withdrawals of such demands, and any other instruments served pursuant
to the DGCL and received by the Company and (ii) the opportunity to participate
in all negotiations and proceedings with respect to demands for appraisal under
the DGCL. The Company shall not, except with the prior written consent of
Parent, make any payment with respect to any such demands for appraisal or offer
to settle or settle any such demands.
Section 2.8. Transmittal of Merger Consideration.
(a) Payment Agent. Parent shall appoint a bank or trust company which is
reasonably satisfactory to the Company to act as paying agent (the "Payment
Agent") for the purpose of exchanging certificates representing Shares for the
Merger Consideration. At or before the Closing, Parent shall deposit, or shall
cause to be deposited, with the Payment Agent, for the benefit of the holders of
Shares, the amount of the product of the Merger Consideration multiplied by the
number of Shares then issued and outstanding minus the sum of (i) the number of
Dissenting Shares and (ii) the number of Shares to be cancelled and retired
pursuant to Section 2.6(b) (the "Payment Fund").
(b) Payment Procedures. Promptly after the Effective Time, Parent and the
Surviving Corporation shall cause the Payment Agent to mail to each holder of a
certificate or certificates which immediately prior the Effective Time evidenced
outstanding Shares (the "Certificates"), (i) a Letter of Transmittal specifying
that delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates (or affidavits of loss in
lieu thereof in accordance with Section 2.8(e)) to the Payment Agent, and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for payment of the applicable Merger Consideration. Upon surrender of a
Certificate for cancellation or submission of an affidavit of loss in lieu
thereof in accordance with Section 2.8(e) herein to the Payment Agent together
with such Letter of Transmittal, duly executed, the holder of such Certificate
shall be entitled to receive in exchange therefor and the Payment Agent shall
send to the holder of such Certificate a check in the amount (after giving
effect to any required tax withholdings) equal to the Merger Consideration
multiplied by the number of Shares theretofore represented by such Certificate,
and the Certificate so surrendered shall forthwith be canceled. Such payment
shall be mailed promptly after receipt of such Certificate together with a
properly completed Letter of Transmittal. No interest will be paid or accrued on
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any amount payable upon due surrender of the Certificates. Until so surrendered,
each such Certificate shall represent after the Effective Time for all purposes
only the right to receive such Merger Consideration, without interest thereon.
If any portion of the Merger Consideration is to be paid to a Person other than
the Person in whose name the surrendered Certificate is registered, it shall be
a condition to such payment that the Certificate so surrendered shall be
properly endorsed or otherwise be in proper form for transfer and that the
Person requesting such payment shall pay to the Payment Agent any transfer or
other taxes required as a result of such payment to a Person other than the
registered holder of such Certificate or establish to the satisfaction of the
Payment Agent that such tax has been paid or is not payable.
(c) Termination of Payment Fund. Any portion of the Payment Fund that
remains unclaimed by the stockholders of the Company for six months after the
Effective Time shall be returned to Parent. Any stockholders of the Company who
have not theretofore complied with this Article 2 shall thereafter look only to
Parent for payment of the applicable Merger Consideration upon due surrender of
their Certificates (or affidavits of loss in lieu thereof in accordance with
Section 2.8(e)), in each case, without any interest thereon. Notwithstanding the
foregoing, none of Parent, the Surviving Corporation, the Payment Agent or any
other Person shall be liable to any former holder of Shares for any amount
properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws. Any amounts remaining unclaimed by holders of
Shares two years after the Effective Time (or such earlier date immediately
prior to such time when the amounts would otherwise escheat to or become
property of any governmental authority) shall become, to the extent permitted by
applicable law, the property of Parent free and clear of any claims or interest
of any Person previously entitled thereto.
(d) Any portion of the Merger Consideration made available to the Payment
Agent pursuant to Section 2.8(a) to pay for Shares for which appraisal rights
have been perfected shall be returned to Parent, upon demand.
(e) Lost, Stolen or Destroyed Certificates. In the event any Certificate
shall have been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the Person claiming such Certificate to be lost, stolen or
destroyed, in form reasonably satisfactory to the Surviving Company, and, if
required by the Surviving Company, the posting by such Person of a bond, in such
reasonable amount as the Surviving Company may direct, as indemnity against any
claim that may be made against it with respect to such Certificate, the Payment
Agent will pay in exchange for such lost, stolen or destroyed Certificate the
applicable Merger Consideration in respect thereof pursuant to Section 2. 8(b)
upon receipt by the Payment Agent of such affidavit.
(f) Withholding Rights. Each of Parent, the Company and the Surviving
Company shall deduct and withhold from any amounts otherwise payable pursuant to
this Agreement to any holder of Shares or Stock Options such amounts as it is
required to deduct and withhold with respect to the making of such payment under
the
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Internal Revenue Code of 1986 (the "Code"), or any provision of state, local or
foreign tax law. To the extent that amounts are so withheld, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of the Shares or Stock Options, as the case may be, in respect of
which such deduction and withholding was made by Parent, the Company or the
Surviving Company, as the case may be.
Section 2.9. Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed, the Merger Consideration
delivered upon the surrender of a Certificate or an affidavit of loss in lieu
thereof in accordance with Section 2.8(e) herein in accordance with the terms
hereof shall be deemed to have been paid in full satisfaction of all rights
pertaining to the Shares theretofore represented by such Certificate, and there
shall be no further registration of transfers on the records of the Surviving
Company of Shares which were outstanding immediately prior to the Effective
Time. If, after the Effective Time, Certificates are presented to the Surviving
Company for any reason, they shall be canceled and exchanged as provided in this
Article 2 provided that the Payment Agent shall have received an appropriate
Letter of Transmittal.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Merger Sub as
follows:
Section 3.1. Organization and Qualification; Subsidiaries. The Company is a
corporation and each of its Subsidiaries is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
formation, has the requisite corporate power and authority and is in possession
of all franchises, grants, authorizations, licenses, permits, easements,
consents, certificates, approvals and orders ("Approvals") necessary to own,
lease and operate the properties it purports to own, lease or operate and to
carry on its business as it is now being conducted, except for such matters as
would not have, individually or in the aggregate, a Company Material Adverse
Effect (as defined below). The Company and each of its Subsidiaries is duly
qualified or licensed as a foreign entity to do business, and is in good
standing in each jurisdiction where the character of its properties owned,
leased or operated or the nature of its activities make such qualification or
licensing necessary, except for such matters as would not have, either
individually or in the aggregate, a Company Material Adverse Effect. The Company
has heretofore made available to Parent true and complete copies of the
certificate of incorporation and bylaws or equivalent organizational documents
of the Company and of each Material Subsidiary as currently in effect on the
date hereof.
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Section 3.2. Capitalization.
(a) The authorized capital stock of the Company consists of 100,000,000
shares of common stock, par value $.01 per share ("Company Common Stock"), and
1,000,000 shares of preferred stock, par value $1.00 per share ("Company
Preferred Stock"). As of November 12, 1999 (i) 33,628,769 shares of Company
Common Stock were issued and outstanding, all of which have been duly authorized
and validly issued and are fully paid and nonassessable, (ii) 1,797,600 shares
of Company Common Stock were held by the Company in its treasury, and (iii)
Stock Options to purchase an aggregate of 2,567,491 shares of Company Common
Stock at a weighed average exercise price of $19.98 per share were outstanding.
As of the date hereof, no shares of Company Preferred Stock are issued and
outstanding.
(b) Except as set forth in Section 3.2 of the written disclosure schedule
provided by Company to Parent prior to the date hereof (the "Company Disclosure
Schedule") or as set forth in this Section, there are no outstanding (i) shares
of capital stock or voting securities of the Company (except for Shares issued
after November 12, 1999 pursuant to Stock Options outstanding on November 12,
1999 under the Company Stock Option Plans), (ii) securities of the Company
convertible into or exchangeable or exercisable for shares of capital stock or
voting securities of the Company or (iii) options, warrants or other rights,
agreements, arrangements or commitments of any character relating to the issued
or unissued capital stock or other securities or other equity interests of the
Company obligating the Company to issue any capital stock, voting securities or
securities convertible into or exchangeable or exercisable for capital stock or
voting securities of the Company. All shares of Company Common Stock subject to
issuance pursuant to the exercise of Stock Options shall, upon issuance on the
terms and conditions specified in the instruments pursuant to which they are
issuable, be duly authorized, validly issued, fully paid and nonassessable.
Except as set forth in Section 3.2 of the Company Disclosure Schedule, there are
no obligations, contingent or otherwise, of the Company or of any Subsidiary of
the Company to repurchase, redeem or otherwise acquire any of the securities
referred to in clauses (i), (ii) or (iii) above.
Section 3.3. Authority Relative to this Agreement. The execution, delivery
and performance by the Company of this Agreement and the consummation of the
transactions contemplated hereby are within the Company's corporate powers and,
except for the affirmative vote of the holders of a majority of the outstanding
Shares in connection with the consummation of the Merger (if required by law),
have been duly authorized by all necessary corporate action on the part of the
Company. The affirmative vote of the holders of a majority of the outstanding
Shares (if required by law) is the only vote of the holders of any of the
Company's capital stock necessary in connection with the consummation of the
Merger. The Board of Directors of the Company has determined that it is
advisable, fair and in the best interest of the Company's stockholders for the
Company to enter into this Agreement, has adopted and approved the Offer, the
Merger and this Agreement and has or will recommend that the Company's
stockholders accept the Offer and approve this Agreement, the Merger and the
transactions contemplated hereby. This
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Agreement has been duly and validly executed and delivered by the Company and,
assuming the due authorization, execution and delivery by Parent and Merger Sub,
as applicable, constitutes a legal, valid and binding obligation of the Company.
Section 3.4. Subsidiaries. All of the outstanding capital stock of, or
other voting securities or ownership interests in, each Material Subsidiary of
the Company, is owned by the Company, directly or indirectly, free and clear of
any Lien and free of any other limitation or restriction (including any
restriction on the right to vote, sell or otherwise dispose of such capital
stock or other voting securities or ownership interests). There are no
outstanding (i) securities of the Company or any of its Material Subsidiaries
convertible into or exchangeable or exercisable for shares of capital stock or
other voting securities or ownership interests in any Material Subsidiary of the
Company or (ii) options or other rights to acquire from the Company or any of
its Material Subsidiaries, or other obligations of the Company or any of its
Material Subsidiaries to issue, any capital stock or other voting securities or
ownership interests in, or any securities convertible into or exchangeable or
exercisable for any capital stock or other voting securities or ownership
interests in, any Material Subsidiary of the Company. There are no outstanding
obligations of the Company or any of its Material Subsidiaries to repurchase,
redeem or otherwise acquire any of the securities referred to in clauses (i) or
(ii) above.
Section 3.5. SEC Filings; Financial Statements
(a) SEC Filings. The Company has filed all forms, reports, exhibits and
other documents required to be filed with the SEC under the Exchange Act since
March 31, 1997 and has made available to Parent accurate and complete copies of
(i) its Quarterly Reports on Form 10-Q for the periods ended March 31, 1997,
June 30, 1997, September 30, 1997, March 31, 1998, June 30, 1998, September 30,
1998, March 31, 1999, June 30, 1999 and September 30, 1999 and its Annual Report
on Form 10-K for the fiscal years ended December 31, 1997 and December 31, 1998,
(ii) all Form 8-K's filed and all proxy or information statements relating to
the Company's meetings of, or actions taken without a meeting by, the Company's
stockholders (whether annual or special) held since December 31, 1997, (iii) all
other reports or registration statements (other than reports on Forms 3, 4 or 5
filed on behalf of affiliates of the Company) filed by the Company with the SEC
under the Exchange Act and the Securities Act of 1933 (the "Securities Act"),
since March 31, 1997, and (iv) all amendments and supplements to all such
reports and registration statements filed by the Company with the SEC
(collectively, the "Company SEC Reports"). As of its filing date, each Company
SEC Report (i) complied as to form in all material respects with the
requirements of the Exchange Act, or the Securities Act, as applicable, and (ii)
did not at the time it was filed or declared effective, as the case may be, (or
if amended or superseded by a filing prior to the date of this Agreement, then
on the date of such filing) contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. No Subsidiary of the Company has any class of
securities registered pursuant to the Exchange Act.
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(b) Financial Statements. Each of the consolidated financial statements
(including, in each case, any related notes thereto) contained in the Company
SEC Reports was prepared in accordance with generally accepted accounting
principles in effect in the United States of America applied on a consistent
basis throughout the periods involved ("GAAP") (except as may be indicated in
the notes thereto) and each fairly presents the consolidated financial position
of the Company and its Subsidiaries as at the respective dates thereof and the
consolidated results of its operations and cash flows for the periods indicated,
except that the unaudited interim financial statements were or are subject to
normal and recurring year-end adjustments which were not or are not expected to
be, in the aggregate, material in amount.
Section 3.6. Absence of Certain Changes. Except as specifically disclosed
in the Company's SEC Reports filed prior to the date hereof or as set forth in
Section 3.6 of the Company Disclosure Schedule, since December 31, 1998, the
Company directly and through its Subsidiaries has conducted the business of the
Company only in the ordinary course consistent with past practices, and during
such period there has not been any event, occurrence, development or state of
circumstances or facts that, individually or in the aggregate, has had or could
reasonably be expected to have a Company Material Adverse Effect and the Company
is not aware of any event, occurrence, development or state of circumstances or
facts which may reasonably be expected to occur or exist that, individually or
in the aggregate, would have a Company Material Adverse Effect. Except as
disclosed in the Company SEC Reports filed prior to the date hereof or as set
forth in Section 3.6 of the Company Disclosure Schedule, (I) since December 31,
1998 there has not been: (a) any declaration, setting aside or payment of any
dividend or other distribution in respect of any class of capital stock of the
Company or any repurchase, redemption or other acquisition by the Company or any
of its Subsidiaries of any outstanding shares of capital stock or other
securities of, or other ownership interests in, the Company or any of its
Subsidiaries, except in the administration of the Company Stock Option Plans
consistent with past practice and, in the case of Subsidiaries other than
Material Subsidiaries or wholly-owned Subsidiaries, repurchases of capital stock
of such Subsidiary in accordance with contractual arrangements entered into in
connection with joint ventures disclosed on Section 3.13 of the Company
Disclosure Schedule which were entered into in the ordinary course of business
consistent with past practice; (b) any damage, destruction or loss, whether or
not covered by insurance, that, individually or in the aggregate, has had or
could reasonably be expected to have a Company Material Adverse Effect; (c) any
material change in accounting methods, principles or practices by the Company,
except insofar as may have been required by a concurrent change in GAAP or
otherwise by the rules and regulations of the SEC applicable to the Company; (d)
any amendment of any term of any outstanding security of the Company or any of
its Subsidiaries that would materially increase the obligations of the Company
and its Subsidiaries; (e) any incurrence, assumption or guarantee by the Company
or any of its Subsidiaries of any indebtedness for borrowed money other than in
the ordinary course of business and in amounts and on terms consistent with past
practices; (f) any creation or other incurrence by the Company or any of its
Subsidiaries of any material Lien on any assets other than in the ordinary
course of business consistent with past practices; (g) any
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making of any material loan, advance or capital contribution to or investment in
any Person by the Company or any of its Subsidiaries other than loans, advances
or capital contributions to or investments in wholly-owned Subsidiaries of the
Company made in the ordinary course of business consistent with past practices;
or (h) any transaction or commitment made, or any contract or agreement entered
into, by the Company or any of its Subsidiaries relating to its assets or
business (including the acquisition or disposition of any assets) or any
relinquishment by the Company or any of its Subsidiaries of any contract,
license or other right, in either case, material to the Company and its
Subsidiaries, taken as a whole, other than transactions, commitments, contracts
or agreements in the ordinary course of business consistent with past practices
and those contemplated by this Agreement; and (II) since June 30, 1999, there
has not been any (1) grant of any severance or termination pay to (or amendment
to any existing arrangement with) any director, officer or employee of the
Company or any of its Subsidiaries, (2) increase in benefits payable under any
existing severance or termination pay policies or employment agreements, (3) any
entering into any employment, deferred compensation or other similar agreement
(or any amendment to any such existing agreement) with any director, officer or
employee of the Company or any of its Subsidiaries, (4) establishment, adoption
or amendment (except as required by applicable law) of any collective
bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred
compensation, compensation, stock option, restricted stock or other benefit plan
or arrangement covering any director, officer or employee of the Company or any
of its Subsidiaries, or (5) increase in compensation, bonus or other benefits
payable to any director, officer or employee of the Company or any of its
Subsidiaries, other than in the case of (II), in the ordinary course of business
consistent with past practice or, with respect to employees other than officers
or directors of the Company or any of its Subsidiaries, in amounts which in the
aggregate are de minimus. "Lien" means, with respect to any property or asset,
any mortgage, lien, pledge, charge, security interest, encumbrance or other
adverse claim of any kind in respect of such property or asset.
Section 3.7. No Undisclosed Liabilities. Except as set forth in Section 3.7
of the Company Disclosure Schedule or as reflected in the Company SEC Reports
filed prior to the date hereof, neither the Company nor any Subsidiary of the
Company has any liabilities or obligations (absolute, accrued, contingent or
otherwise) which are, in the aggregate, material to the business, operations or
financial condition of the Company and its Subsidiaries taken as a whole, except
liabilities or obligations (a) adequately provided for in the Company's balance
sheet as of September 30, 1999 (including any related notes thereto) included in
the SEC Reports filed prior to the date hereof, (b) disclosed elsewhere in the
SEC Reports filed prior to the date hereof; or (c) incurred since September 30,
1999 in the ordinary course of business consistent with past practices and which
could not, individually or in the aggregate, be reasonably expected to have a
Company Material Adverse Effect.
Section 3.8. Governmental Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby require no action by or in respect of,
or filing with,
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any governmental body, agency, official or authority, domestic or foreign, other
than (i) the filing of a certificate of merger with respect to the Merger with
the Delaware Secretary of State; (ii) compliance with any applicable
requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the
"HSR Act"), Section 721 of the Defense Production Act of 1950 (the "Exon-Florio
Provision), the United States Department of Transportations Aviation Economic
Regulations (the "DOT Approval"), and the European Commission under Council
Regulation (EEC) No. 4064/89 (the "European Approval"), (iii) compliance with
any applicable requirements of the Exchange Act or any other applicable
securities or takeover laws, whether state or foreign, and (iv) and any actions
or filings the absence of which would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect or
materially to impair the ability of the Company to consummate the transactions
contemplated by this Agreement. Notwithstanding anything contained in this
Section 3.8, the Company makes no representation or warranty with respect to
governmental consents or approvals in foreign jurisdictions which are necessary
in connection with the transactions contemplated hereby and not otherwise
identified in this Section.
Section 3.9. No Violation. Except as set forth in Section 3.9 of the
Company Disclosure Schedule or as reflected in the Company SEC Reports filed
prior to the date hereof, and subject to the approval and adoption of this
Agreement by the Company's stockholders, if applicable, the execution and
delivery of this Agreement by the Company does not, and the performance of this
Agreement by the Company will not, and the consummation by the Company of the
transactions contemplated hereby will not: (i) contravene, conflict with, or
result in any violation or breach of any provision of the certificate of
incorporation or bylaws of the Company, (ii) assuming compliance with the
matters referred to in Section 3.8, contravene, conflict with, result in any
violation or breach of any provision of any federal, foreign, state or
provincial law, rule, regulation, order, judgment or decree (collectively,
"Laws") applicable to the Company or any Subsidiary of the Company or by which
any of their respective properties are bound or affected, or (iii) require any
consent or other action by any Person under, constitute a default under, or
cause or permit the termination, cancellation, acceleration or other change of
any right or obligation or the loss of any benefit to which the Company or any
of its Subsidiaries is entitled under any provision of any agreement or other
instrument binding upon the Company or any of its Subsidiaries or any license,
franchise, permit, certificate, approval or other similar authorization
affecting the assets or business of the Company and its Subsidiaries, or (iv)
result in the creation of a Lien on any of the properties or assets of the
Company or any Subsidiary of the Company pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or any Subsidiary of the Company
is a party or by which the Company or any Subsidiary of the Company or any of
their respective properties are bound or affected, except in the cases of
clauses (ii), (iii) and (iv) for such matters that could not, individually or in
the aggregate, have a Company Material Adverse Effect.
Section 3.10. Absence of Litigation; Compliance with Law. Except as set
forth in Section 3.10 of the Company Disclosure Schedule or as reflected in the
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Company SEC Reports filed prior to the date hereof, (i) there are no claims,
actions, suits, proceedings or investigations pending against or, to the
knowledge of the Company, threatened against or affecting the Company or against
or affecting any Subsidiary of the Company or any of their respective properties
before any court or arbitrator or before or by any governmental body, agency or
official, domestic or foreign, which could reasonably be expected to have a
Company Material Adverse Effect or materially impair the ability of the Company
to consummate the transactions contemplated by this Agreement, and (ii) there is
no judgment, decree, injunction, rule or order outstanding against the Company
or any of its Subsidiaries other than, in each case, those that the outcome of
which, individually or in the aggregate, could not reasonably be expected to
have a Company Material Adverse Effect or a material adverse effect on the
Company's ability to consummate the transactions contemplated by this Agreement.
Each of the Company and its Subsidiaries is and has been in compliance with all
applicable Laws, except where the failure to comply has not had and would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
Section 3.11. Employee Benefit Plan; Employment Agreement.
Except as set forth in Section 3.11 of the Company Disclosure Schedule or
as reflected in the Company SEC Reports filed prior to the date hereof, and
except for such matters as could not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect:
(a) neither the Company nor any Subsidiary of the Company maintains,
sponsors, contributes or is party to, nor has at any time in the past three
years maintained, sponsored, contributed or was a party to, (i) any
employee pension benefit plan (as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) or any
similar pension benefit plan under the laws of any foreign jurisdiction (a
"Pension Plan"), (ii) any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) or any similar welfare benefit plan under the laws
of any foreign jurisdiction (a "Welfare Plan"), or (iii) any employment,
severance or similar contract, plan, arrangement or policy and any other
plan or arrangement (written or oral) providing for compensation, bonuses,
profit-sharing, stock option or other stock related rights or other forms
of incentive or deferred compensation for the benefit of any current or
former employee or director of any of the Company or any Subsidiary of the
Company (collectively, "Employee Plans");
(b) with respect to each Employee Plan, the Company has made available
to Parent (i) an accurate and complete copy of such Employee Plan
(including all amendments thereto); (ii) an accurate and complete copy of
the annual report, if required under ERISA, with respect to such Employee
Plan for each of the last two years; (iii) an accurate and complete copy of
the most recent summary plan description, together with each Summary of
Material Modifications, if required under ERISA, with respect to such
Employee Plan, (iv) if such Employee Plan is funded through a trust or any
third party funding vehicle, an accurate and complete copy of the trust or
other funding agreement
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(including all amendments thereto) and accurate and complete copies of the
most recent financial statements thereof; and (v) accurate and complete
copies of all material Contracts relating to such Employee Plan, including
service provider agreements, insurance contracts, minimum premium
contracts, stop-loss agreements, investment management agreements,
subscription and participation agreements and recordkeeping agreements;
(c) neither the Company nor any Subsidiary of the Company is or has
ever been required to be treated as a single employer with any other Person
under Section 4001(b)(1) of ERISA or Section 414(b), (c), (m) or (o) of the
Code; neither the Company nor any Subsidiary of the Company has ever been a
member of an "affiliated service group" within the meaning of Section
414(m) of the Code; neither the Company nor any Subsidiary of the Company
has ever made a complete or partial withdrawal from a multiemployer plan
resulting in "withdrawal liability," as such term is defined in Section
4201 of ERISA (without regard to any subsequent reduction or waiver of such
liability under either Section 4207 or 4208 of ERISA);
(d) neither the Company nor any Subsidiary of the Company has any
commitment to create any Welfare Plan or any Pension Plan, or to modify or
change any existing Welfare Plan or Pension Plan (other than to comply with
applicable law) in a manner that would affect any current or former
employee or director of any of the Company or any Subsidiary of the
Company;
(e) no Employee Plan provides death, medical or health benefits
(whether or not insured) with respect to any current or former employee or
director of any of the Company or any Subsidiary of the Company after any
termination of service of such employee or director (other than (i) benefit
coverage mandated by applicable law, including coverage provided pursuant
to Section 4980B of the Code, and (ii) benefits the full cost of which are
borne by current or former employees or directors of the Company or any
Subsidiary of the Company (or their beneficiaries));
(f) with respect to any Employee Plan constituting a group health plan
within the meaning of Section 4980B(g)(2) of the Code, the provisions of
Section 4980B of the Code ("COBRA") have been complied with in all material
respects;
(g) neither the Company nor any Subsidiary nor any predecessor thereof
sponsors, maintains or contributes to, or has in the past three years
sponsored, maintained or contributed to, any Employee Plan subject to Title
IV of ERISA (other than a Multiemployer Plan, as defined below); neither
the Company nor any Subsidiary has (i) engaged in, or is a successor or
parent corporation to an entity that has engaged in, a transaction
described in Sections 4069 or 4212(c) of ERISA or (ii) incurred, or
reasonably expects to incur prior to the Consummation Time, (A) any
liability under Title IV of ERISA arising in connection with the
termination of, or a complete or partial withdrawal from, any plan covered
or previously covered by Title IV of ERISA or (B) any liability under
Section 4971 of the Code that in either case could become a liability of
the Surviving Corporation or any of its Subsidiaries or the Parent or any
of its ERISA
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Affiliates after the Effective Time; and if a "complete withdrawal" by the
Company and all of its ERISA Affiliates were to occur immediately prior to
the Effective Time with respect to all Employee Plans that are
multiemployer plans, as defined in Section 3(37) of ERISA ("Multiemployer
Plans"), none of the Company or the Surviving Company, any of their
Subsidiaries or any of their ERISA Affiliates would incur any withdrawal
liability under Title IV of ERISA ("ERISA Affiliate" of any Person means
any other Person which, together with such Person, would be treated as a
single employer under Section 414 of the Code);
(h) each of the Employee Plans has been operated and administered in
all material respects in accordance with applicable Laws, and no events
have occurred with respect to any Employee Plan that could result in
payment or assessment of any excise taxes under Sections 4972, 4975, 4976,
4977, 4979, 4980B, 4980D, 4980E or 5000 of the Code;
(i) each of the Employee Plans intended to be qualified under Section
401(a) of the Code has received a favorable determination letter from the
Internal Revenue Service, and the Company is not aware of any reason why
any such determination letter could be revoked;
(j) the consummation of the transactions contemplated by this
Agreement will not (either alone or together with any other event) entitle
any employee or director of the Company or any of its Subsidiaries to
severance pay or accelerate the time of payment or vesting or trigger any
payment or funding (through a grantor trust or otherwise) of compensation
or benefits under, increase the amount payable or trigger any other
material obligation pursuant to, any Employee Plan; and there is no
contract, agreement, plan or arrangement covering any employee or former
employee of the Company or any affiliate that, individually or
collectively, could give rise to the payment of any amount that would not
be deductible pursuant to Sections 162(m) or 280G of the Code;
(k) there has been no amendment to, written interpretation or
announcement (whether or not written) by the Company or any Subsidiary
relating to, or change in employee participation or coverage under, any
Employee Plan which would increase the expense of maintaining such Employee
Plan above the level of the expense incurred in respect thereof for the
fiscal year ended December 31, 1998; and
(l) all contributions and payments accrued under each Employee Plan,
determined in accordance with prior funding and accrual practices, as
adjusted to include proportional accruals for the period ending as of
September 30, 1999, have been discharged and paid on or prior to the date
hereof except to the extent reflected as a liability on the Company's
balance sheet dated as of September 30, 1999.
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Section 3.12. Labor Matters.
(a) Except as set forth in Section 3.12 of the Company Disclosure Schedule
or as reflected in the Company SEC Reports filed prior to the date hereof, (i)
there are no lawsuits or administrative proceedings pending or, to the knowledge
of the Company, threatened, between the Company or any Subsidiary of the Company
and any of their respective employees, other than such pending or threatened
lawsuits or administrative proceedings which, individually or in the aggregate,
could not reasonably be expected to have a Company Material Adverse Effect; and
(ii) the Company has no knowledge of any material labor dispute, other than
routine individual grievances, or any material activity or proceeding by a labor
union or representative thereof to organize any employees of the Company or any
of its Subsidiaries, which employees were not subject to a collective bargaining
agreement on December 31, 1998, or any material strikes, slowdowns, work
stoppages, lockouts, or threats thereof, by or with respect to any employees of
the Company or of any Subsidiary of the Company.
(b) Set forth on Section 3.12 of the Company Disclosure Schedule is a list
of all collective bargaining agreements to which the Company or any of its
Material Subsidiaries is a party.
Section 3.13. Contracts. Neither Company nor any of the Subsidiaries is in
default under or in violation of any provision of any note, bond, indenture,
mortgage, deed of trust, loan agreement or any other agreement to which it is a
party or by which it is bound or to which any of their respective properties or
assets is subject, other than such defaults or violations as could not
reasonably be expected to have a Company Material Adverse Effect. All such
contracts and agreements to which Company or any of its Subsidiaries is a party
or by which any of their respective assets is bound are valid, except to the
extent of an invalidity which could not reasonably be expected to have a Company
Material Adverse Effect. All such material contracts or agreements are listed as
exhibits in the Company SEC Reports filed prior to the date hereof or are set
forth on Section 3.13 to the Company Disclosure Schedule.
Section 3.14. Taxes.
(a) Except as set forth on Schedule 3.14(a) to the Company Disclosure
Schedule or as reflected in the Company SEC Reports filed prior to the date
hereof, the Company has duly and timely filed all federal, state and local or
foreign Tax Returns (as hereinafter defined) required under applicable law to be
filed by the Company on its own behalf and on behalf of its Subsidiaries on a
consolidated basis. All such Tax Returns are accurate and complete in all
material respects. Except as set forth in Schedule 3.14(a) of the Company
Disclosure Schedule or as reflected in the Company SEC Reports filed prior to
the date hereof, all Taxes (as defined hereinafter) due and payable by the
Company and its Subsidiaries prior to the date hereof have been paid except as
would not have, individually or in the aggregate, a Company Material Adverse
Effect. There are no outstanding agreements or waivers extending the statutory
period of limitation applicable
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to any Tax Return of the Company or any of its Subsidiaries for any period,
except for such extensions or waivers which, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect.
(b) Except as would not have, individually or in the aggregate, a Company
Material Adverse Effect, neither the Company nor any of its Subsidiaries is a
party to any action, suit or proceeding by any governmental, quasi-governmental
or regulatory department or authority for the assessment or collection of Taxes,
and there is no audit, examination, deficiency or refund litigation or matter in
controversy with respect to any Taxes and no claim by any taxing department or
authority is pending in any jurisdiction where the Company or its Subsidiaries
do not file Tax Returns to the effect that the Company or any of its
Subsidiaries is or may be subject to taxation by that jurisdiction.
(c) The Company and its Subsidiaries have withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor, stockholder or other party,
except as would not have, individually or in the aggregate, a Company Material
Adverse Effect.
(d) "Taxes" shall mean any and all taxes, charges, fees, levies or other
assessments, including income, gross receipts, excise, real or personal
property, sales, withholding, social security, retirement, unemployment,
occupation, use, goods and services, license, value added, capital, net worth,
payroll, profits, franchise, transfer and recording taxes, fees and charges, and
any other taxes, assessment or similar charges imposed by the Internal Revenue
Service or any taxing authority (whether domestic or foreign including any
state, county, local or foreign government or any subdivision or taxing agency
thereof (including a United States possession)) (a "Taxing Authority"), whether
computed on a separate, consolidated, unitary, combined or any other basis; and
such term shall include any interest whether paid or received, fines, penalties
or additional amounts attributable to, or imposed upon, or with respect to, any
such taxes, charges, fees, levies or other assessments. "Tax Return" shall mean
any report, return, document, declaration or other information or filing
required to be supplied to any Taxing Authority, including information returns,
any documents with respect to or accompanying payments of estimated Taxes, or
with respect to or accompanying requests for the extension of time in which to
file any such report, return, document, declaration or other information.
Section 3.15. Intellectual Property. The Company and its Subsidiaries own,
or are licensed or otherwise possess the right to use, all patents, trademarks,
tradenames, servicemarks, copyrights, computer software and all other rights
with respect to intellectual property that is material to the conduct of the
Company's business.
Section 3.16. Brokers. Except for the Company Financial Advisor and its
affiliates with respect to which the Company is solely liable, no broker, finder
or investment banker is entitled to any brokerage, finder's or other fee or
commission from the Company or any of its Subsidiaries in connection with the
transactions contemplated by this Agreement.
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Section 3.17. Environmental Matters.
(a) Except as set forth in the Company SEC Reports filed prior to the date
hereof and except for such matters as would not have, individually or in the
aggregate, a Company Material Adverse Effect:
(i) no Hazardous Substance has been discharged, emitted, released or
is present at any property now or previously owned, leased or operated by
the Company or any of its Subsidiaries, in any such case in violation of
Environmental Laws; and
(ii) the Company and its Subsidiaries are and have been in compliance
with all Environmental Laws and all Environmental Permits.
(b) None of the transactions contemplated by this Agreement will trigger
any filing or other action under any environmental transfer statute, including
without limitation, the Connecticut Hazardous Waste Establishment Transfer Act.
(c) For purposes of this Section, the following terms shall have the
meanings set forth below:
(i) "Company" and "Subsidiary" shall include any entity which is, in
whole or in part, a predecessor of the Company or any Subsidiary of the
Company;
(ii) "Environmental Laws" means any federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, codes, plans, injunctions, permits,
concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to human health, the environment or to emissions,
discharges or releases of pollutants, contaminants, or other hazardous
substances or wastes into the environment, including without limitation
ambient air, surface water, ground water or land, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants or other
hazardous substances or wastes or the clean-up or other remediation
thereof;
(iii) "Environmental Permits" means, with respect to any Person, all
permits, licenses, franchises, certificates, approvals and other similar
authorizations of governmental authorities relating to or required by
Environmental Laws and affecting, or relating in any way to, the business
of such Person as currently conducted; and
(iv) "Hazardous Substances" means any toxic, radioactive, corrosive or
otherwise hazardous substance, including petroleum, its derivatives,
by-products and other hydrocarbons, or any substance having any constituent
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elements displaying any of the foregoing characteristics, which in any
event is regulated under Environmental Laws.
Section 3.18. Antitakeover Statutes. The Company has taken all action
necessary to exempt the Offer, the Merger, this Agreement and the transactions
contemplated hereby from the provisions of Section 203 of DGCL, and,
accordingly, no such Section applies or purports to apply to any such
transactions.
Section 3.19. Year 2000 Compliance. The Company has (i) initiated a review
and assessment of all areas within the business and operations of the Company
and its Subsidiaries (including those areas affected by suppliers and vendors)
that could be adversely affected by the "Year 2000 Problem" (that is, the risk
that computer software and systems used by the Company or any of its
Subsidiaries (or their respective suppliers and vendors) may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date after December 31, 1999), (ii) developed a plan and
timeline for addressing the Year 2000 Problem on a timely basis, which plan and
timeline have been made available to Parent and (iii) to date, implemented such
plan in accordance with such timetable. The Company reasonably believes that all
computer software and systems (including those of suppliers and vendors) that
are material to the business or operations of the Company and its Subsidiaries
as presently conducted will on a timely basis be able to perform properly
date-sensitive functions for all dates before and from and after January 1,
2000.
Section 3.20. Proxy Statement. If applicable, the information supplied by
the Company for inclusion or incorporation by reference in the proxy or
information statement to be sent to the stockholders of the Company in
connection with the meeting of the stockholders of the Company to consider
approval of this Agreement ((the "Company Stockholders' Meeting") and such proxy
or information statement, the "Proxy Statement") will not, on the date the Proxy
Statement or any amendment thereof or supplement thereto is first mailed to
stockholders of the Company, at the time of the Company Stockholders' Meeting,
and at the Effective Time contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading. If at any time prior to the Effective Time any event relating to the
Company or any of its respective affiliates, officers or directors should be
discovered by the Company which should be set forth in an amendment or a
supplement to the Proxy Statement, the Company shall promptly inform Parent and
Merger Sub. The Proxy Statement shall comply in all material respects as to form
and substance with the requirements of the Exchange Act.
Section 3.21. Recommendation Documents. The Schedule 14D-9 and any other
documents required to be filed with the SEC by the Company or required to be
distributed or otherwise disseminated to the Company's stockholders in
connection with the transactions contemplated by this Agreement, and any
amendments or supplements thereto, when filed, distributed or disseminated, as
applicable, shall in all material respects conform with the requirements of the
Exchange Act (except that the foregoing
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representation shall not apply with respect to the accuracy of information
relating to Parent which has been furnished in writing by Parent specifically
for inclusion in the Schedule 14D-9). As of its filing date, and on the date it
is first published, sent or given to holders of Shares, the Schedule 14D-9 or
any supplement or amendment thereto and any other documents provided therewith
shall not contain any misstatement of material fact or omit to state any
material fact necessary in order to make the statements contained therein, in
light of the circumstances in which they were made, not misleading. The Company
agrees to correct the Schedule 14D-9 and any other documents sent or delivered
to the holders of Shares therewith if and to the extent that any of them shall
become false or misleading in any material respects, and the Company further
agrees to take all steps necessary to cause the Schedule 14D-9 as so corrected
to be disseminated to holders of Shares, in each case as and to the extent
required by applicable law.
Section 3.22. Customs Broker Licenses and Approvals.
Except for such matters as would not have, individually or in the
aggregate, Company Material Adverse Effect:
(a) The Company and each of its Subsidiaries that is engaged in the
Customs business is a duly licensed Customs broker, and holds a valid
permit in each location where it conducts Customs business, under 19 U.S.C.
ss. 1641 and applicable Customs regulations. Such licenses and permits are
in full force and effect and have not been surrendered, suspended or
revoked by operation of law or otherwise. The Company and each of its
Subsidiaries that is engaged in the Customs business maintains a licensed
officer required under 19 C.F.R. ss. 111.11(c) in support of its corporate
license and employs a licensed person in each Customs broker district as
required under 19 C.F.R. ss. 111.19.
(b) The Company and each of its Subsidiaries that is engaged in the
Customs business has complied in all respects with 19 U.S.C. ss. 1641 and
19 C.F.R. Part III.
(c) The Company and each separately incorporated branch office where
the Company acts as an ocean freight forwarder or a non-vessel-operating
common carrier is duly licensed as an ocean transportation intermediary by
the Federal Maritime Commission and is in full compliance with all laws and
regulations applicable to ocean transportation intermediaries. Such
licenses are in full force and effect and have not been surrendered,
suspended or revoked by operation of law or otherwise.
(d) The Company and each of its Subsidiaries that is engaged in the
Customs business or as an air freight forwarder or ocean transportation
intermediary is in compliance with the laws and regulations administered by
the United States Customs Service ("Customs"), United States Department of
Commerce, and Federal Maritime Commission. There are no claims pending
against, or to the knowledge of the Company, threatened against or
affecting the Company or any of its Subsidiaries, by Customs, U.S.
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Department of Commerce, or Federal Maritime Commission for duties, taxes,
fees, penalties or liquidated damages in excess of $10,000 each or $300,000
in the aggregate.
(e) The Company and each of its Subsidiaries that is engaged in the
Customs business or as an air freight forwarder or ocean transportation
intermediary is not the subject of any investigation, audit, debarment,
denial order, charging letter, or license revocation or suspension
proceeding by Customs, U.S. Department of Commerce, or Federal Maritime
Commission.
(f) "Customs business" means those activities involving transactions
with Customs concerning the entry and admissibility of merchandise, its
classification and valuation, the payment of duties, taxes, or other
charges assessed or collected by Customs upon merchandise by reason of its
importation, or the refund, rebate, or drawback thereof.
(g) "Ocean transportation intermediary" means an ocean freight
forwarder or a non-vessel-operating common carrier. For the purposes of
this part, the term:
(i) "Ocean freight forwarder" means a person that:
1. in the United States, dispatches shipments from the
United States via a common carrier and books or otherwise
arranges space for those shipments on behalf of shippers; and
2. processes the documentation or performs related
activities incident to those shipments; and
(ii) "Non-vessel-operating common carrier" means a common carrier
that does not operate the vessels by which the ocean transportation is
provided, and is a shipper in its relationship with an ocean common
carrier.
(h) "Air freight forwarder" means a Person that dispatches shipments
from the United States via an air carrier and books or otherwise arranges
space for those shipments on behalf of shippers or acts as a shipper and
processes the documentation or performs related activities incident to
those shipments.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF
PARENT AND MERGER SUB
Parent and Merger Sub hereby represent and warrant to the Company as
follows:
Section 4.1. Organization and Qualification; Subsidiaries. Each of Parent
and Merger Sub is an entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation and has the
requisite corporate power and authority and is in possession of all Approvals
necessary to own, lease and operate the properties it purports to own, lease or
operate and to carry on its business as it is now being conducted, except for
such matters as would have, individually or in the aggregate, a Parent Material
Adverse Effect (as defined below). Parent owns directly or indirectly all of the
outstanding capital stock of Merger Sub.
Section 4.2. Authority Relative to this Agreement. Each of Parent and
Merger Sub has all necessary corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Parent and Merger Sub and the consummation by Parent and
Merger Sub of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of Parent and Merger
Sub, and no other corporate proceedings on the part of Parent or Merger Sub are
necessary to authorize this Agreement or to consummate the transactions so
contemplated. This Agreement has been duly and validly executed and delivered by
Parent and Merger Sub and, assuming the due authorization, execution and
delivery by the Company, constitutes a legal, valid and binding obligation of
Parent and Merger Sub.
Section 4.3. Acquisition Funding. At the expiration of the Offer, the
Merger Sub will have available cash sufficient to consummate the Offer and the
Merger and to pay all fees and expenses in connection therewith.
Section 4.4. Governmental Authorization. The execution, delivery and
performance by Parent and Merger Sub of this Agreement and the consummation by
Parent and Merger Sub of the transactions contemplated hereby require no action
by or in respect of, or filing with, any governmental body, agency, official or
authority, domestic or foreign, other than (i) the filing of a certificate of
merger with respect to the Merger with the Delaware Secretary of State; (ii)
compliance with any applicable requirements of the HSR Act, the Exon-Florio
Provision, the DOT Approval, and the European Approval, (iii) compliance with
any applicable requirements of the Exchange Act and any other applicable
securities or takeover laws, whether state or foreign; and (iv) any actions or
filings the absence of which would not reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect or materially
to impair the ability of Parent and Merger Subsidiary to consummate the
transactions contemplated by this Agreement. Notwithstanding anything contained
in this Section 4.4, Parent and Merger Sub make no
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representation or warranty with respect to governmental consents or approvals in
foreign jurisdictions which are necessary in connection with the transactions
contemplated hereby and are not otherwise identified in this Section.
Section 4.5. No Violation. The execution and delivery of this Agreement by
Parent and Merger Sub does not, and the performance of this Agreement by Parent
and Merger Sub will not, and the consummation by Parent and Merger Sub of the
transactions contemplated hereby will not, (i) contravene, conflict with, result
in any violation or breach of any provision of the certificate of incorporation
or bylaws of Parent or Merger Sub, (ii) assuming compliance with the matters
referred to in Section 4.4, contravene, conflict with, result in any violation
or breach of any provision of any Laws applicable to Parent or Merger Sub or by
which any of their respective properties are bound or affected, (iii) require
any consent or other action by any Person under, constitute a default under, or
cause or permit the termination, cancellation, acceleration or other change of
any right or obligation or the loss of any benefit to which Parent or any of its
Subsidiaries is entitled under any provision of any agreement or other
instrument binding upon Parent or any of its Subsidiaries or any license,
franchise, permit, certificate, approval or other similar authorization
affecting the assets or business of Parent and its Subsidiaries or (iv) result
in the creation of a Lien on any of the properties or assets of Parent or Merger
Sub pursuant to, any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instruction or obligation to which
Parent or Merger Sub is a party or by which Parent or Merger Sub or any of their
respective properties are bound or affected, except in the case of clauses (ii),
(iii) and (iv) for any such matters that could not, individually or in the
aggregate, reasonably be expected to have a Parent Material Adverse Effect. The
Chairman, Chief Executive Officer and General Counsel of Parent, and the head of
Danzas Intercontinental Business Unit (or such other individual as shall be
designated as the lead representative of Parent overseeing the integration of
the Company and Danzas during the period prior to the Effective Time) (the
"Parent Officers") are not aware of any fact that causes them to believe that
Parent and Merger Sub will be unable to perform their obligations under this
Agreement assuming the conditions to their obligations set forth in Annex I are
satisfied.
Section 4.6. Offer Documents. The Offer and the Offer Documents shall in
all material respects conform with the requirements of the Exchange Act (except
that the foregoing representation shall not apply with respect to the accuracy
of information relating to the Company which has been excerpted or derived from
public sources or furnished in writing by the Company specifically for inclusion
in the Offer Documents). As of their respective dates, and on the date they are
first published, sent or given to holders of Shares, the Offer Documents shall
not contain any misstatement of material fact or omit to state any material fact
necessary to make the statements contained therein, in light of the
circumstances in which they were made, not misleading. Parent and Merger Sub
agree to correct the Schedule 14D-1 and the other Offer Documents if and to the
extent that any of them shall become false or misleading in any material
respects, and Parent and Merger Sub further agree to take all steps necessary to
cause the Schedule 14D-1 as so corrected to be disseminated to holders of
Shares, in each case as and to the extent
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required by applicable law. If applicable, the information with respect to
Parent and any of its Subsidiaries that Parent furnishes to the Company in
writing specifically for use in the Proxy Statement will not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading at the time such Proxy Statement or
any amendment or supplement thereto is first mailed to stockholders of the
Company and at the time of the Company's Stockholders' Meeting.
Section 4.7. Brokers. Except for Deutsche Banc Alex. Brown, Deutsche Bank
Securities Inc. and their affiliates, with respect to which Parent is solely
liable, no broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission from Parent in connection with the
transactions contemplated by this Agreement.
ARTICLE 5
CONDUCT OF BUSINESS
Section 5.1. Conduct of Business by the Company. During the period from the
date of this Agreement and continuing until the earlier of the termination of
this Agreement or the Consummation Time, the Company covenants and agrees that
neither the Company nor any Subsidiary of the Company shall directly or
indirectly do any of the following without the prior written consent of Parent,
which shall not unreasonably be withheld:
(a) amend or otherwise change the Company's certificate of
incorporation or bylaws;
(b) issue, sell, pledge, dispose of or encumber, or authorize the
issuance, sale, pledge, disposition or encumbrance of, any capital stock of
the Company or any of its Subsidiaries of any class, or any options,
warrants, convertible securities or other rights of any kind to acquire any
capital stock of the Company or any of its Subsidiaries of any class
(except for the issuance of Shares issuable pursuant to Stock Options under
the Company Stock Option Plans which Stock Options are outstanding on the
date hereof);
(c) sell, lease, license, pledge, or otherwise dispose of or encumber
any assets of the Company or of any Subsidiary except for (i) sale of
assets in the ordinary course of business and in a manner consistent with
past practice, (ii) disposition of obsolete or worthless assets and (iii)
sales of immaterial assets, provided that any sale, lease, license, pledge
or other disposition of assets pursuant to Subsection 5.1(c)(ii) or (iii)
shall not exceed $1,000,000 in the aggregate;
(d) except as set forth in Section 5.1(d) of the Company Disclosure
Schedule, (i) declare, set aside, or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect
of any class of capital stock (or other equity interest) of the Company,
except that a Subsidiary of the Company may
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declare and pay a dividend to the Company, (ii) split, combine or
reclassify any class of capital stock (or other equity interest) of the
Company or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of, or in substitution for shares of any
class of capital stock (or other equity interest) of the Company or (iii)
amend the terms of, repurchase, redeem or otherwise acquire, or permit any
Subsidiary of the Company to repurchase, redeem or otherwise acquire, any
securities of the Company or any Subsidiary of the Company, except, in the
case of Subsidiaries other than Material Subsidiaries or wholly-owned
Subsidiaries, repurchases of capital stock of such Subsidiaries in
accordance with contractual arrangements entered into in connection with
joint ventures disclosed in Section 13.3 of the Company Disclosure Schedule
which were entered into in the ordinary course of business consistent with
past practice;
(e) except as set forth on Schedule 5.1(e), (i) acquire (by merger,
consolidation, acquisition of stock or assets) any company, corporation,
partnership, or other business organization or division thereof, or acquire
a material amount of stock or assets of any other Person, (ii) incur any
indebtedness for borrowed money or issue any debt securities (except in the
ordinary course of business and in amounts not in excess of $2 million in
the aggregate) or assume, guarantee or otherwise become responsible for the
obligations of any Person (other than indebtedness of wholly-owned
Subsidiaries of the Company) or make any loans or advances, except in the
ordinary course of business consistent with past practice and in amounts
not in excess of $1,000,000 in the aggregate, (iii) enter into or amend any
material Contract, except in the ordinary course of business and only in a
manner that does not have a Company Material Adverse Effect, or (iv)
authorize any new capital expenditures or purchase of fixed assets except
in the ordinary course of business consistent with past practice and in
amounts not in excess of $5,000,000 in the aggregate;
(f) except as set forth in Section 5.1(f) of the Company Disclosure
Schedule, increase the compensation payable or to become payable to its
officers or employees, except for increases in salary or wages of employees
of the Company or of any Subsidiary of the Company who are not officers of
the Company, which increases are in the ordinary course of business and do
not exceed 5% of the aggregate annual salary or wages of all such
employees, or grant any new severance or termination pay to, or enter into
any new employment or severance agreement with any director, officer or
employee of the Company or of any Subsidiary of the Company, except as
disclosed in this Agreement, or establish, adopt or enter into or amend any
collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund,
policy or arrangement for the benefit of any current or former directors,
officers or employees, except, in each case, as may be required by law and
except that the foregoing shall not restrict routine hiring of new lower
level personnel in the ordinary course of business consistent with past
practice, immaterial changes in policies affecting the workplace generally,
or any of the foregoing restrictions not involving officers or directors of
the Company that will not, in the aggregate, increase the obligations of
the Company thereunder by more than $150,000.
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(g) take any action to change accounting policies or procedures
(including, without limitation, procedures with respect to revenue
recognition, payments of accounts payable and collection of accounts
receivable) except for changes which may be required under GAAP or pursuant
to SEC rules or regulations;
(h) make any material Tax election inconsistent with past practices or
settle or compromise any material federal, state, local or foreign Tax
liability or agree to an extension of a statute of limitations;
(i) pay, discharge or satisfy any material claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise) other than the payment, discharge or satisfaction in the
ordinary course of business and consistent with past practice of
liabilities (i) reflected or reserved against in the financial statements
of the Company included in the Company SEC Reports made available to the
Parent prior to the date hereof, or (ii) incurred in the ordinary course of
business and consistent with past practice; or
(j) take, or agree in writing or otherwise to take, any of the actions
described in Sections 5.1 (a) through (i) above, or any action which would
make any of the representations or warranties of the Company contained in
this Agreement untrue or incorrect in any material respect or prevent the
Company from performing or cause the Company not to perform its covenants
under this Agreement in any material respect.
Section 5.2. No Solicitation.
(a) Non-Solicitation of Alternative Transactions. During the period from
the date of this Agreement and continuing until the earlier of the termination
of this Agreement or the Consummation Time, the Company and its Subsidiaries
shall not, and shall cause their officers, directors or employees or any
investment banker, attorney or accountant or other representative retained by
them (any of the foregoing being a "Company Representative") not to, directly or
indirectly, (i) initiate, solicit or encourage the making, submission or
announcement of any Alternative Transaction (as defined below), (ii) take any
other action intended to facilitate any inquiries or the making of any proposal
to effect an Alternative Transaction, (iii) approve, endorse or recommend any
Alternative Transaction, (iv) enter into any letter of intent or similar
document or any contract contemplating or otherwise relating to any Alternative
Transaction, (v) enter into discussions or negotiate with or disclose any
nonpublic information relating to the Company or any of its Subsidiaries or
afford access to the properties, books or records of the Company or any of its
Subsidiaries to any Person regarding an Alternative Transaction, (vi) grant any
waiver or release under any standstill or similar agreement with respect to any
class of equity securities of the Company or any of its Subsidiaries, or (vii)
authorize or permit any of the officers, directors, or employees of the Company
or its Subsidiaries or any Company Representative to take any such action set
forth in clauses (i) through (vi). The Company will notify Parent promptly (but
in no event later than 48 hours) after receipt by the Company (or any Company
Representative) of (x) any Alternative Transaction, (y)
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any indication that any Person is considering proposing an Alternative
Transaction or (z) any request for nonpublic information relating to the Company
or any of its Subsidiaries or for access to the properties, books or records of
the Company or any of its Subsidiaries by any Person who may be considering
proposing, or has proposed, an Alternative Transaction. The Company shall
provide such notice orally and in writing and shall identify the Person
proposing, and the terms and conditions of, any such Alternative Transaction,
indication or request. The Company shall keep Parent fully informed, on a
current basis, of the status and details of any such Alternative Transaction or
request. Nothing contained in this Agreement shall prevent the Board of
Directors of the Company from complying with Rule 14e-2 under the Exchange Act
with respect to any Alternative Transaction.
(b) Notwithstanding the foregoing, nothing contained in Section 5.2(a)
shall prohibit the Board of Directors of the Company (through the Company
Representative) from furnishing non-public information to, or entering into
discussions or negotiations with, any Person in response to a Superior Proposal
(defined below) made by such Person (and not withdrawn) if (i) the Company has
complied in all material respects with the provisions of this Section 5.2,
including the notice provisions hereof, (ii) the Board of Directors of the
Company determines in good faith, based on advice of outside legal counsel, that
it is reasonably likely that the failure to consider the Superior Proposal would
constitute a breach of its fiduciary duties to the Company's stockholders under
applicable law, (iii) prior to furnishing such nonpublic information to, or
entering into discussions or negotiations with, such Person the Company requires
such Person to enter into a confidentiality agreement with the Company with
terms no less favorable to the Company than those contained in the
Confidentiality Agreement, and (iv) prior to furnishing any such nonpublic
information to, or entering into discussions or negotiations with any such
Person, the Company gives Parent written notice of the identity of such Person
and of the Company's intention to take such action.
(c) The Board of Directors of the Company shall be permitted to withdraw,
or modify in a manner adverse to Parent, its recommendation referred to in
Sections 1.2 and 6.1, but only if (i) the Company has complied in all material
respects with the provisions of this Section 5.2, including the notice
provisions hereof, (ii) a Superior Proposal is pending at the time the Board of
Directors of the Company determines to take such action, (iii) the Board of
Directors of the Company determines in good faith, based on advice of outside
legal counsel, that it is reasonably likely that the failure to do so would
constitute a breach of its fiduciary duties to the Company's stockholders under
applicable law, and (iv) the Company shall have delivered to Parent a prior
written notice advising Parent that it intends to take such action.
(d) Definitions. The following terms shall have the meanings set forth
below:
(i) "Alternative Transaction" means any inquiry, proposal or offer
for, or any indication of interest in,
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1. any merger, consolidation, amalgamation, share exchange,
business combination, issuance of securities, acquisition of
securities, tender offer, exchange offer, or other similar transaction
(i) in which the Company or any Subsidiary of the Company is a
constituent corporation or involving the capital stock of the Company,
(ii) in which a Person or "group" (as defined in the Exchange Act and
the rules promulgated thereunder) or Persons directly or indirectly
acquires the Company or any Subsidiary of the Company or more than 15%
of the Company's business or assets, or directly or indirectly becomes
the beneficial owner (as such term is used in Section 13d-3 of the
Exchange Act) or record owner of securities representing, or
exchangeable for or convertible into, more than 15% of the outstanding
securities of any class of voting securities of the Company or any of
the Company's Subsidiaries, or filing a registration statement in
connection therewith or (iii) in which the Company or any Subsidiary
of the Company issues securities representing more than 15% of the
outstanding securities of any class of voting securities of the
Company;
2. any sale, lease, exchange, transfer, license, acquisition or
disposition of more than 15% of the assets of the Company and its
Subsidiaries, taken as a whole;
3. any liquidation or dissolution of the Company or any material
Subsidiary of the Company; or
4. any other transaction involving a proposal or offer from a
third party which the Board of Directors of the Company determines in
good faith is of the nature of transaction contemplated hereby;
provided that an Alternative Transaction shall not include the transactions
contemplated hereby.
(ii) "Superior Proposal" means a bona fide, unsolicited, written
proposal for an Alternative Transaction, on terms and conditions that the
Board of Directors of the Company determines, in its good faith judgment,
based on advice of the Company Financial Advisor or other financial advisor
of nationally recognized reputation, and taking into account all the terms
and conditions of the Alternative Transaction, is more favorable to the
Company's stockholders than the transaction contemplated hereby (after
giving effect to any changes to this Agreement and the Offer as may be
proposed by Parent in response to the Alternative Transaction), and for
which financing, to the extent required, is then fully committed or
reasonably determined to be available by the Board of Directors of the
Company.
(e) Termination of Existing Discussions. The Company shall, and shall cause
its Subsidiaries and the directors, employees and other agents and advisors of
the Company and its Subsidiaries to, immediately cease and cause to be
terminated any existing discussions or negotiations with any parties (other than
Parent and Merger Sub), conducted heretofore with respect to any Alternative
Transaction.
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(f) Agreement With Others. Nothing in this Section 5.2 shall (i) permit the
Company to terminate this Agreement or (ii) permit the Company to enter into any
written agreement with respect to an Alternative Transaction during the term of
this Agreement (it being agreed that during the term of this Agreement the
Company shall not enter into any written agreement with any Person that provides
for, or in any way facilitates, an Alternative Transaction, other than a
confidentiality agreement in the form referred to above), it being understood
that Section 8.1(e) and (f) sets forth the rights of the Company to terminate
this Agreement.
ARTICLE 6
ADDITIONAL AGREEMENTS
Section 6.1. Proxy Statement. If required by the DGCL, as promptly as
practicable following the consummation of the Offer, the Company shall, in
consultation with Parent, prepare and file with the SEC and will use its best
efforts to have cleared by the SEC and thereafter mail to its stockholders as
promptly as practicable, the Proxy Statement. The Proxy Statement shall, subject
to Section 5.2 of this Agreement, include the recommendation of the Board of
Directors of the Company in favor of the approval of this Agreement.
Section 6.2. Company Stockholders' Meeting. If required by the DGCL, the
Company shall call and hold the Company Stockholders' Meeting as promptly as
practicable following consummation of the Offer for the purpose of voting upon
the approval of this Agreement, and the Company shall use its reasonable efforts
to hold the Company Stockholders' Meeting as soon as practicable, subject to
applicable law. If requested by Parent, the Company shall use its reasonable
best efforts to solicit from its stockholders proxies in favor of the approval
of this Agreement. Subject to Section 5.2, the Board of Directors of the Company
shall recommend approval of this Agreement by the Company's stockholders, and
shall take all other action necessary or advisable to secure the vote or consent
of stockholders required by the DGCL and the certificate of incorporation and
bylaws of the Company to obtain such approval. At any such meeting all
outstanding Shares then owned by Parent, Merger Sub or their Subsidiaries or
affiliates shall be voted in favor of the Merger and for approval and adoption
of this Agreement.
Section 6.3. Employee Benefits and Stock Options. The Parent, Merger Sub
and the Company hereby acknowledge and agree that the Surviving Company shall
not assume or continue any outstanding stock options under the Company Stock
Option Plans, or any other stock options, or substitute any additional options
for such outstanding options.
Section 6.4. Consents; Approvals. The Company and Parent shall each use
their reasonable efforts to obtain all consents, waivers, approvals,
authorizations or orders (including, without limitation, all governmental and
regulatory rulings and approvals), and the Company and Parent shall make all
filings (including without limitation, all filings with governmental or
regulatory agencies) required in connection
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with the authorization, execution and delivery of this Agreement by the Company
and Parent and the consummation by them of the transactions contemplated hereby.
The Company and Parent shall furnish all information required to be included in
any proxy statement or information statement prepared in connection with the
Company Stockholders' Meeting, or for any application or other filing to be made
pursuant to the rules and regulations of any Governmental Body in connection
with the transactions contemplated by this Agreement. Without limiting the
generality of the foregoing, the Company and Parent shall, promptly after the
date of this Agreement, prepare and file the notifications required under the
HSR Act, the Exon-Florio Provision, the DOT Approval, the European Approval and
any other domestic or foreign approvals, filings, notifications or other
requirements of law, statute, rule or regulation necessary in connection with
the transactions contemplated by this Agreement which would, if not obtained or
satisfied, have a Company Material Adverse Effect or a Parent Material Adverse
Effect. The Company and Parent shall respond as promptly as practicable to any
inquiries or requests received from any governmental agency with respect to such
approvals, filings, notifications or other requirements. Each of the Company and
Parent shall (i) give the other party prompt notice of the commencement of any
legal or administrative proceeding or other action before any Governmental Body
and of any notice or other communication from any governmental or regulatory
agency or authority in connection with the Offer, the Merger or the transactions
contemplated hereby and (ii) keep the other party informed as to the status of
any such proceeding, including any communications received by or transmitted to
any Governmental Body relating to the Offer, the Merger or the transactions
contemplated hereby. The Company and Parent will consult and cooperate with one
another, and will consider in good faith the views of one another, in connection
with any analysis, appearance, presentation, memorandum, brief, argument,
opinion or proposal made or submitted in connection with any legal or
administrative proceeding under or relating to the HSR Act, the Exon-Florio
Provision, the DOT Approval, the European Approval, or any other federal, state
or foreign antitrust or fair trade law.
Section 6.5. Further Assurances. Upon the terms and subject to the
conditions hereof, each of the parties hereto shall use all reasonable efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
other things necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement, to
obtain in a timely manner all necessary waivers, consents and approvals and to
effect all necessary registrations and filings, and to otherwise satisfy or
cause to be satisfied all conditions precedent to its obligations under this
Agreement. At and after the Effective Time, the officers and directors of the
Surviving Company will be authorized to execute and deliver, in the name and on
behalf of the Company or Merger Sub, any deeds, bills of sale, assignments or
assurances and to take and do, in the name and on behalf of the Company or
Merger Sub, any other actions and things to vest, perfect or confirm of record
or otherwise in the Surviving Company any and all right, title and interest in,
to and under any of the rights, properties or assets of the Company acquired or
to be acquired by the Surviving Company as a result of, or in connection with,
the Merger.
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Section 6.6. Employees, Employee Benefits.
(a) Affected Employees. Individuals who are employed by the Company and its
Subsidiaries as of the consummation of the Offer shall remain employees of the
Company and its Subsidiaries following the consummation of the Offer (each such
employee, an "Affected Employee"); provided however that this Section shall not
be construed to limit the ability of the applicable employer to terminate the
employment of any Affected Employee at any time.
(b) Past Service Credit. Parent will, or will cause the Company to, give
individuals who are employed by the Company and its Subsidiaries as of the
consummation of the Offer full credit for purposes of eligibility, vesting,
benefit accrual (excluding, however, benefit accrual under any defined benefit
pension plans) and determination of the level of benefits under any employee
benefit plans or arrangements maintained by Parent or any Subsidiary of Parent
for such Affected Employees' service with the Company or any Subsidiary of the
Company to the same extent recognized by the Company immediately prior to the
consummation of the Offer.
(c) Limitations and Deductibles. Parent will, or will cause the Company to,
(i) waive all limitations as to preexisting conditions, exclusions and waiting
periods imposed by Parent or the Company with respect to participation and
coverage requirements applicable to the Affected Employees under any welfare
benefit plans that such employees may be eligible to participate in after the
consummation of the Offer, other than limitations or waiting periods that are
already in effect with respect to such employees and that have not been
satisfied as of the consummation of the Offer under any welfare plan maintained
for the Affected Employees immediately prior to the consummation of the Offer,
and (ii) provide each Affected Employee with credit for any co-payments and
deductibles paid prior to the consummation of the Offer in satisfying any
applicable deductible or out-of-pocket requirements under any welfare plans that
such employees are eligible to participate in after the consummation of the
Offer.
(d) Post Closing Coverage and Benefits. For a period of one year
immediately following the consummation of the Offer, the coverage and benefits
provided to the Affected Employees who remain employed with the Surviving
Company, Parent or any Subsidiary of Parent pursuant to employee benefit plans
or arrangements maintained by Parent, or any Subsidiary of Parent shall be, in
the aggregate, no less favorable than those provided to such employees
immediately prior to the consummation of the Offer. For a period of two years
immediately following the consummation of the Offer, the Company shall, and,
following the Effective Time, the Surviving Company shall and the Parent shall
cause the Surviving Company to, maintain in effect on substantially the same
terms as in effect immediately prior to the consummation of the Offer the
Deferred Compensation Plan, as amended by Amendment No. 1, effective as of
January 1, 1997, as amended by Amendment No. 2, effective as of January 1, 1999
(the "Deferred Compensation Plan"). For a period of ten years thereafter, the
Surviving Company shall maintain in effect the Rabbi Trust established under the
Deferred Compensation Plan. For
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a period of not less than the premium schedules set forth in the Split Dollar
Life Insurance Plan, the Surviving Company shall and the Parent shall cause the
Surviving Company to maintain in effect on substantially the same terms as
immediately prior to the consummation of the Offer the Split Dollar Life
Insurance Plan for the employees, officers and directors of the Company named
therein.
(e) Executive Agreements. As of the consummation of the Offer, Parent shall
cause the Surviving Company to honor in accordance with their terms all
employment, severance, change of control, and other compensation agreements and
arrangements disclosed in Section 3.11 or 6.6(e) of the Company Disclosure
Schedule (each an "Executive Agreement"). Parent and the Company hereby agree
that the consummation of the Offer by the Company's stockholders shall
constitute a "Change in Control" (or words of similar effect) for purposes of
any Executive Agreement and all other Employee Plans, pursuant to the terms of
such plan.
(f) Severance Pay. Parent shall, or shall cause the Surviving Company, to
pay severance benefits to each of the Affected Employees (other than those who
(i) are parties to the Executive Agreements referred to in Section 6.6(e) or
(ii) are entitled to receive severance benefits under any existing contract,
statute, regulation or law) whose employment is terminated other than for Cause
within 120 days following the Effective Time, equal to two weeks of the Affected
Employee's base earnings on the date the Affected Employee's employment is
terminated for each year of service with the Company or an affiliate, up to a
maximum of six months of base earnings. "Cause" shall mean conduct by the
Affected Employee constituting a crime related to his employment, or
constituting a felony.
Section 6.7. Public Announcements. Parent and the Company shall consult
with each other before issuing any press release with respect to the Offer, the
Merger or this Agreement, and shall not issue any such press release or make any
such public statement without the prior consent of the other party, which shall
not be unreasonably withheld; provided, however, that a party may, without prior
consent of the other party, issue such press release or make such public
statement as may upon the advice of counsel be required by law or the NASDAQ
Stock Market Inc. if it has used all reasonable efforts to consult with the
other party.
Section 6.8. Conveyance Taxes. Parent and the Company shall cooperate in
the preparation, execution and filing of all returns, questionnaires,
applications, or other documents regarding any real property transfer or gains,
sales, use, transfer, value added, stock transfer and stamp taxes, any transfer,
recording, registration and other fees, and any similar taxes which become
payable by, and are imposed on, the Company in connection with the transactions
contemplated hereby that are required to be filed on or before the Effective
Time.
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Section 6.9. Indemnification, Exculpation and Insurance.
(a) Indemnification. The Surviving Company shall indemnify and hold
harmless from liabilities for acts or omissions occurring at or prior to the
Effective Time each present and former director or officer of the Company (each
an "Indemnified Person") to the fullest extent permitted under applicable law
and the Company's certificate of incorporation and bylaws, and shall assume,
without further action, as of the Effective Time, any indemnification agreements
of the Company in effect as of the date hereof. The Surviving Company shall also
advance expenses, as incurred, to the fullest extent permitted under applicable
law, the Company's certificate of incorporation and bylaws, or any applicable
indemnification agreement.
(b) Successors and Assigns. In the event that the Surviving Company or any
of its successors or assigns (i) consolidates with or merges into any other
Person and is not the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers or conveys all or substantially all of
its properties and assets to any Person, then, and in each such case, proper
provision will be made so that the successors and assigns of Parent assume the
obligations set forth in this Section 6.9.
(c) Directors and Officers Liability Insurance. For seven years after the
Effective Time, the Surviving Company shall maintain in effect the Company's
current directors' and officers' liability insurance covering acts or omissions
occurring prior to the Effective Time with respect to those persons who are
currently covered by the Company's directors' and officers' liability insurance
policy on terms with respect to such coverage and amount no less favorable than
those of such policy in effect on the date hereof; provided, however, that (i)
the Surviving Company may substitute therefor policies of Parent or its
Subsidiaries containing terms with respect to coverage and amount no less
favorable to such directors or officers, as long as full coverage continues for
the period of their service prior to the Effective Time, and (ii) that in
satisfying its obligation under this Section 6.9(c), the Surviving Company shall
not be obligated to pay more than $300,000.
(d) Rights of Indemnified Parties. The provisions of this Section 6.9. (i)
are intended to be for the benefit of, and will be enforceable by, each
Indemnified Person, and (ii) are in addition to, and not in substitution for,
any other rights to indemnification or contribution that any such Indemnified
Person may have by contract or otherwise.
Section 6.10. Access to Information
(a) From the date hereof until the later of the Effective Time or the
termination of this Agreement, the Company shall (i) give to Parent and its
authorized representatives reasonable access to the offices, properties, books
and records of the Company and its Subsidiaries and such financial and other
information as may reasonably be requested upon reasonable prior notice and (ii)
shall instruct the Company's employees and authorized representatives to
cooperate with Parent in its investigation of the business
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of the Company and its Subsidiaries. Any access pursuant to this Section shall
be conducted in such manner as not to interfere unreasonably with the conduct of
the business of the Company and will be coordinated through the executive
officers of the Company. No information or knowledge obtained in any
investigation pursuant to this Section shall affect or be deemed to modify any
representation or warranty made by any party hereunder. Parent shall instruct
its representatives to cooperate with the Company in minimizing any disruption
to the Company's business.
(b) All information obtained by Parent pursuant to this Section shall be
held in confidence to the extent required by, and in accordance with, the
provisions of the letter agreement dated July 12, 1999 between Parent and the
Company (the "Confidentiality Agreement") which shall continue in effect.
Section 6.11. Notices of Certain Events.
(a) The Company and Parent shall promptly notify each other of any notice
or other communication from any Person alleging that the consent of such Person
is or may be required in connection with the transactions contemplated by this
Agreement.
(b) The Company shall promptly notify Parent of any actions, suits, claims,
investigations or proceedings commenced or, to its knowledge threatened against,
relating to or involving or otherwise affecting the Company or any of its
Subsidiaries that, if pending on the date of this Agreement, would have been
disclosed pursuant to Section 3.10 or that relate to the consummation of the
transactions contemplated by this Agreement.
(c) Parent shall promptly notify the Company of any actions, suits, claims,
investigations or proceedings commenced or, to its knowledge threatened against,
relating to or involving or otherwise affecting Parent or any of its
Subsidiaries that relate to the consummation of the transactions contemplated by
this Agreement.
Section 6.12. Merger Without Meeting of Shareholders. If Parent, Merger Sub
or any other Subsidiary of Parent shall acquire at least 90% of the outstanding
Shares pursuant to the Offer or otherwise, the parties hereto agree, at the
request of Parent, to take all necessary and appropriate action to cause the
Merger to be effective as soon as practicable after the acceptance for payment
of, and payment for, the Shares pursuant to the Offer without a meeting of
stockholders of the Company in accordance with the DGCL.
Section 6.13. Certain Notices.
(a) The Company shall, in a timely manner, give all notices and take such
other actions in respect of the transactions contemplated hereby as may be
required under the terms of each collective bargaining agreement to which the
Company or its Subsidiaries is a party.
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(b) If a Parent Officer becomes aware of any fact that causes such Parent
Officer to believe that the Company has breached its representations and
warranties or covenants so that the condition in paragraph (b)(ii) of Annex I
will not be satisfied, such Parent Officer will promptly notify the Company of
such fact.
ARTICLE 7
CONDITIONS TO THE MERGER
Section 7.1. Conditions to the Obligations of Each Party. The respective
obligations of the Company, Parent and Merger Sub to consummate the Merger are
subject to the satisfaction of the following conditions:
(a) if required by the DGCL, this Agreement shall have been approved
and adopted by the stockholders of the Company in accordance with such law;
(b) no preliminary or permanent injunction or other order, decree or
ruling by any court or governmental body or regulatory authority, domestic
or foreign, which prevents consummation of the Merger shall have been
issued and remain in effect (each party agreeing to use its reasonable
efforts to have any such injunction, order, decree or ruling lifted);
(c) no statute, rule or regulation of any government or governmental
agency, domestic or foreign, shall prevent the consummation of the Merger;
and
(d) Merger Sub shall have purchased Shares pursuant to the Offer.
ARTICLE 8
TERMINATION
Section 8.1. Termination. This Agreement may be terminated at any time
prior to the Effective Time, notwithstanding approval hereof by the stockholders
of the Company:
(a) at any time prior to the consummation of the Offer by mutual
written consent of the Parent and the Company;
(b) by either Parent or the Company if the Offer shall not have been
consummated by March 31, 2000 (provided that the right to terminate this
Agreement under this Section 8.1(b) shall not be available to any party
whose failure to fulfill any obligation under this Agreement has been the
cause of or resulted in the failure of the Offer to occur on or before such
date);
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(c) by either Parent or the Company, if there shall be any statute,
rule or regulation of any government or governmental agency, domestic or
foreign, that makes acceptance for payment of, and payment for, the Shares
pursuant to the Offer or consummation of the Merger illegal or otherwise
prohibited, or any judgment, injunction, order or decree of any court or
governmental body having competent jurisdiction enjoining the acceptance
for payment of, and payment for, the Shares pursuant to the Offer or
consummation of the Merger and such judgment, injunction, order or decree
shall have become final and nonappealable; provided, however, that the
party seeking to terminate this Agreement pursuant to this Section 8.1(c)
shall have used commercially reasonable best efforts to remove any such
judgment, injunction, order or decree;
(d) by Parent, if prior to the purchase of any Shares pursuant to the
Offer,
(i) the Board of Directors of the Company shall have failed to
recommend or withdrawn or materially modified in a manner adverse to
Parent its approval or recommendation of the Offer and the Merger, or
(ii) the Company shall have entered into, or shall have publicly
announced its intention to enter into, an agreement with respect to
any Superior Proposal; or
(iii) any Person other than Parent and its Subsidiaries shall
have acquired, directly or indirectly, beneficial ownership of at
least a majority of the Shares outstanding;
(e) by the Company, if, prior to purchase of any Shares pursuant to
the Offer, (i) the Company notifies Parent in writing at least 72 hours
prior to such termination that it intends to enter into an agreement with
respect to a Superior Proposal, attaching the most current version of such
agreement (or a description of all material terms and conditions thereof),
provided the Company has complied in all material respects with the
provisions of Section 5.2, including the notice provisions therein; (ii)
Parent does not make, within 72 hours after receipt of the Company's
notification pursuant to clause (i), an offer that the Board of Directors
of the Company determines, in good faith based on the advice of the Company
Financial Advisor or other financial advisor of nationally recognized
reputation, and taking into account all the terms and conditions of such
offer, is at least as favorable to the Company's stockholders as the
Superior Proposal (it being understood that the Company shall not enter
into any binding agreement regarding such Superior Proposal during such
72-hour period) and (iii) prior to or simultaneously with such termination,
the Company makes payment to Parent of the amounts payable pursuant to
Section 8.3.
(f) by the Company, if the Offer has not been consummated by February
15, 2000 as a result of a breach by Parent or Merger Sub of any of their
representations and warranties or covenants such that Parent and Merger Sub
are unable to
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perform their obligations under this Agreement after the conditions to
their obligations set forth in Annex I have been satisfied (but for those
conditions which are not satisfied due to or resulting from the facts
constituting such breach) and the Company is not in material breach of any
of its representations and warranties or covenants set forth in this
Agreement.
(g) The party desiring to terminate this Agreement pursuant to this
Section 8.1 (other than pursuant to Section 8.1(a)) shall give written
notice of such termination to the other parties hereto.
Section 8.2. Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 8.1, this Agreement shall forthwith become void
and there shall be no liability on the part of any party hereto or any of its
affiliates, directors, officers, stockholders or any other agent or advisor of
such party except (i) as set forth in Section 8.3 hereof, (ii) as provided
pursuant to the Confidentiality Agreement, and (iii) nothing herein shall
relieve any party from liability for any willful breach hereof. Notwithstanding
the foregoing, the agreements contained in this Section 8.2, and in Sections
6.7, 6.10(b), 8.3, 9.10, and 9.11 shall survive any termination hereof pursuant
to Section 8.1.
Section 8.3. Fees and Expenses.
(a) Except as otherwise specified in this Section 8.3, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such cost or expense.
(b) The Company agrees to pay to Parent (by wire transfer of immediately
available funds) an amount equal to
(i) $23 million prior to or simultaneously with the termination of
this Agreement as a result of the occurrence of any of the events set forth
in Sections 8.1(d) or 8.1(e); and
(ii) $2,000,000 as liquidated damages (and not as a penalty) if the
condition set forth in paragraph (b)(ii) of Annex I hereto shall not have
been met as a result of a breach by the Company of its representations and
warranties set forth in this Agreement; provided that such breach existed
as of the date hereof and provided further that all of the other conditions
set forth in Annex I shall have been satisfied (but for those conditions
which are not satisfied due to or resulting from the facts constituting
such breach) and Parent and Merger Sub are not in material breach of any of
their representations and warranties or covenants set forth in this
Agreement.
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ARTICLE 9
GENERAL PROVISIONS
Section 9.1. Effectiveness of Representations, Warranties and Agreements;
Knowledge, Etc.
(a) Survival. Except as otherwise provided in this Section 9.1 the
representations, warranties and agreements of each party hereto shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any other party hereto, any person controlling any such party or
any of their officers or directors, whether prior to or after the execution of
this Agreement. The representations, warranties and agreements in this Agreement
shall terminate at the consummation of the Offer or upon the earlier termination
of this Agreement pursuant to Section 8.1, as the case may be, except those
agreements which by their terms are designed to survive, including Sections 6.6,
6.7 and 6.9, shall survive the consummation of the Offer indefinitely.
Section 9.2. Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered or otherwise received by the parties at the
following addresses (or at such other address for a party as shall be specified
by like changes of address which shall be effective upon receipt):
(a) If to Parent or Merger Sub:
Deutsche Post AG
D-53105
Bonn, Germany
Fax: (49 228 182 6932)
Attention: Klaus Engelen
With copies to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Fax: (212) 450-4800
Attention: Christopher Mayer
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(b) If to the Company:
Air Express International Corporation
120 Tokeneke Road
PO Box 1231
Darien, CT 06820
Fax: (203) 655-5734
Attention: Daniel J. McCauley
With copies to:
Cummings & Lockwood
4 Stamford Plaza, PO Box 120
107 Elm Street
Stamford, CT 06904
Fax: (203) 708-3889
Attention: Katherine P. Burgeson
Section 9.3. Certain Definitions. For purposes of this Agreement, the term:
(a) "affiliate" means a Person that directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with, the first mentioned Person;
(b) "business day" shall have the meaning ascribed to such term under
Rule 14D-1 of the Exchange Act;
(c) "Consummation Time" means the time at which (i) Merger Sub shall
have accepted Shares for payment pursuant to the Offer and (ii) persons
designated by Parent shall constitute a majority of the Board of Directors
of the Company.
(d) "Contract" shall mean any written, oral or other agreement,
contract, subcontract, lease, understanding, instrument, note, warranty,
insurance policy, benefit plan, or legally binding commitment or
undertaking of any nature;
(e) "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ownership of stock, by contract or otherwise;
(f) "Governmental Body" shall mean any: (a) nation, state,
commonwealth, province, territory, county, city, municipality, district or
other jurisdiction of any nature; (b) federal, state, local, municipal,
foreign or other government; or (c) governmental or quasi-governmental
authority of any nature (including any
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governmental division, department, agency, commission, board,
instrumentality, official, organization, unit, body, Person or entity and
any court or other tribunal);
(g) "knowledge" or "to the knowledge" when used with respect to Parent
or of the Parent and its Subsidiaries means the actual knowledge of any
executive officer of Parent after reasonable inquiry; when used with
respect to the Company means the actual knowledge of an executive officer
of the Company after reasonable inquiry;
(h) "Material Adverse Effect" when used with respect to the Company
and its Subsidiaries or the Parent and its Subsidiaries shall have the
meaning described below. When used in conjunction with the Company or any
of its Subsidiaries, or Parent or any of its respective Subsidiaries, as
the case may be, the term "Material Adverse Effect" means any change or
effect that, individually or in the aggregate, is materially adverse to the
business, assets, prospects, financial condition or results of operations
of the Company and its Subsidiaries taken as a whole ("Company Material
Adverse Effect") or of Parent and its Subsidiaries taken as a whole
("Parent Material Adverse Effect"), respectively, but other than those
adverse effects occurring as a result of (i) changes in economic or
financial conditions generally or (ii) changes in conditions affecting the
freight forwarding and global logistics industries generally.
(i) "Material Subsidiary" means any Subsidiary that constitutes a
"significant subsidiary" of the Company within the meaning of Rule 1-02 of
Regulation S-X of the Exchange Act.
(j) "Person" or "person" means an individual, corporation,
partnership, limited liability company, association, trust, unincorporated
organization, Governmental Body, other entity or group (as defined in
Section 13(d)(3) of the Exchange Act);
(k) "Subsidiary" or "Subsidiaries" of the Company, the Surviving
Company, Parent or any other Person means any corporation, partnership,
joint venture or other legal entity of which the Company, the Surviving
Company, Parent or such other Person, as the case may be, (either alone or
through or together with any other Subsidiary) owns, directly or
indirectly, such amount of the stock or other equity interests, the holders
of which are generally entitled to vote for the election of the board of
directors or other governing body of such corporation or other legal
entity, that the Company, the Surviving Company, Parent or such other
Person has the power to elect a majority of the directors or members of the
governing body of such corporation or other legal entity.
(l) A reference in this Agreement to any statute shall be such
statute, as amended from time to time, and the rules and regulations
promulgated thereunder.
(m) A reference in this Agreement to "material" means material to the
applicable entity and its Subsidiaries, taken as a whole.
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Section 9.4. Amendment. This Agreement may be amended by the parties hereto
at any time prior to the Effective Time; provided, however, that, after approval
of this Agreement by the stockholders of the Company, no amendment may be made
which by law requires further approval by such stockholders without further
approval. This Agreement may not be amended except by an instrument in writing
signed by the parties hereto.
Section 9.5. Waiver. At any time prior to the Effective Time, any party
hereto may with respect to any other party hereto (a) extend the time for the
performance of any of the obligations or other acts, (b) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto and (c) waive compliance with any of the agreements or
conditions contained herein. Any such extension or waiver shall be valid only if
set forth in an instrument in writing signed by the party or parties to be bound
thereby. No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
Section 9.6. Headings. 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.
Section 9.7. Severability. If any term or other provision of this Agreement
is held by a court of competent jurisdiction or other authority to be invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereof is not affected in any manner adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
Section 9.8. Entire Agreement. This Agreement and the Company Disclosure
Schedule together constitute the entire agreement and supersede all prior
agreements and undertakings (other than the Confidentiality Agreement), both
written and oral, among the parties, or any of them, with respect to the subject
matter hereof and, except as otherwise expressly provided herein, are not
intended to confer upon any other person any rights or remedies hereunder.
Section 9.9. Assignment, Merger Sub. This Agreement shall not be assigned
by operation of law or otherwise without the prior written consent of each party
hereto, except that Parent and Merger Sub may assign all or any of their rights
hereunder to any affiliate provided that no such assignment shall relieve the
assigning party of its obligations hereunder.
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Section 9.10. Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and their respective successors
and assigns, and, except as expressly provided in Section 6.9(d), nothing
contained in this Agreement, express or implied, is intended to or shall confer
upon any other Person any right, benefit or remedy of any nature whatsoever
under or by reason of this Agreement.
Section 9.11. Governing Law; Consent to Jurisdiction. This Agreement shall
be governed by, and construed in accordance with, the internal laws of the State
of Delaware applicable to Contracts executed and fully performed within the
State of Delaware, without regard to the conflicts of laws provisions thereof.
In addition, the Company, Parent and Merger Sub hereby (i) consent to submit to
the personal jurisdiction of any Federal court located in the State of Delaware
or any Delaware court in the event any dispute arises of this Agreement or any
of the transactions contemplated thereby; (ii) agree not to attempt to deny or
defeat such personal jurisdiction by motion or other request to leave from any
such court; (iii) agree not to bring any action relating to this Agreement or
any of the transactions contemplated hereby in any court other than the Federal
court located in the State of Delaware or a Delaware state court; (iv) waive any
right to trial by jury with respect to any claim or proceeding relating or
arising out of this Agreement and (v) waive the right, if any, to seek or claim
protection under sovereign immunity or other similar provision under any law,
rule, regulation, treaty or otherwise. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
Section 9.12. Specific Performance. The parties hereto agree that
irreparable damage would occur if any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
or to enforce specifically the performance of the terms and provisions hereof in
any federal court located in the State of Delaware or any Delaware state court,
in addition to any other remedy to which they are entitled at law or in equity.
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IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
DEUTSCHE POST AG
By: /s/ Klaus Zumwinkel
----------------------------------------
Name: Klaus Zumwinkel
Title: Chairman of the Board of Management
By: /s/ Peter Wagner
----------------------------------------
Name: Peter Wagner
Title: Member of the Board of Management
DP ACQUISITION CORPORATION
By: /s/ Renato Chiavi
----------------------------------------
Name: Renato Chiavi
Title: President
By: /s/ Klaus Engelen
----------------------------------------
Name: Klaus Engelen
Title: Executive Vice President, General
Counsel and Secretary
AIR EXPRESS INTERNATIONAL CORPORATION
By: /s/ Hendrik J. Hartong, Jr.
----------------------------------------
Name: Hendrik J. Hartong, Jr.
Title: Chairman of the Board of Directors
By: /s/ Guenter Rohrmann
----------------------------------------
Name: Guenter Rohrmann
Title: President and Chief Executive Officer
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ANNEX I
Conditions of the Offer
Notwithstanding any other provision of the Offer, Merger Sub shall not be
required to accept for payment or pay for any Shares, and may, subject to the
terms of this Agreement, terminate the Offer, if:
(a) at the expiration of the Offer (as it may be extended in accordance
with the terms hereof), (i) the Minimum Condition has not been satisfied or (ii)
the applicable waiting period under the HSR Act shall not have expired or been
terminated, (iii) the Exon-Florio Provision, the DOT Approval and the European
Approval shall not have been completed, obtained or satisfied, or (iv) any other
domestic or foreign approvals, consents, filings, notifications or other
requirements of law, statute, rule or regulation necessary in connection with
the transactions contemplated by this Agreement shall not have been completed,
obtained or satisfied, except for such matters as would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect or materially impair the ability of Parent or Merger Sub to consummate
the transactions contemplated by this Agreement or to own or exercise control
over the Company and its Subsidiaries following the Offer; or
(b) at any time on or after November 15, 1999 and prior to the acceptance
for payment of Shares, any of the following conditions exist:
(i) any order, decree or injunction of a court or governmental agency
of competent jurisdiction or any law or regulation enjoins or prohibits the
consummation of the transactions contemplated by this Agreement (including
the Offer or the Merger) or the ownership or exercise of control by the
Parent over the Company and its Subsidiaries following the Offer; or
(ii) any representations and warranties of the Company contained in
this Agreement that are qualified as to materiality shall not be true and
correct and any of the representations and warranties that are not so
qualified shall not be true and correct in any material respects on and as
of the date of consummation of the Offer as if such representations and
warranties were made on and as of such date (except where such
representations and warranties are stated as of a specific date), or the
Company shall have breached the agreements and covenants required by this
Agreement to be performed by it on or prior to such date in any material
respect (provided that the Company may, prior to the expiration of the
Offer, seek to cure any such breach); or
(iii) this Agreement shall have been terminated in accordance with its
terms.
The foregoing conditions are for the sole benefit of Parent and Merger Sub
and may, subject to the terms of this Agreement, be waived by Parent and Merger
Sub in whole or in part at any time and from time to time in their discretion.
A-1
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Exhibit (c)(2)
MORGAN STANLEY DEAN WITTER
1585 Broadway
New York, New York 10056
(212) 761-4000
Danzas Holding Ltd. July 12, 1999
Leimenstrasse 1
4002 Basel
Switzerland
CONFIDENTIALITY AGREEMENT
-------------------------
Dear Sirs:
In connection with your possible interest in the acquisition (the "Transaction")
of the business of Air Express International Corp., and its subsidiaries (the
"Company"), you have requested that we or our representatives furnish you or
your representatives with certain information relating to the Company or the
Transaction. All such information (whether written or oral) furnished (whether
before or after the date hereof) by us or our directors, officers, employees,
affiliates, representatives (including, without limitation, financial advisors,
attorneys and accountants) or agents (collectively, "our Representatives") to
you or your directors, officers, employees, affiliates, representatives
(including, without limitation, financial advisors, attorneys and accountants)
or agents or your potential sources of financing for the Transaction
(collectively, "your Representatives") and all analyses, compilations,
forecasts, studies or other documents prepared by you or your Representatives
in connection with your or their review of, or your interest in, the Transaction
which contain or reflect any such information is hereinafter referred to as the
"Information". The term Information will not, however, include information which
(i) is or becomes publicly available other than as a result of a disclosure by
you or your Representatives or (ii) is or becomes available to you on a
nonconfidential basis from a source (other than us or our Representatives)
which, to the best of your knowledge after due inquiry, is not prohibited from
disclosing such information to you by a legal, contractual or fiduciary
obligation to us.
Accordingly, you hereby agree that:
1. You and your Representatives (i) will keep this Information confidential and
will not (except as required by applicable law, regulation or legal process,
and only after compliance with paragraph 3 below), without our prior written
consent, disclose any Information in any manner whatsoever, and (ii) will
not use any Information other than in connection with the Transaction;
provided, however, that you may reveal the Information to your
Representatives (a) who need to know the Information for the purpose of
evaluating the Transaction, (b) who are informed by you of the confidential
nature of the Information and (c) who agree to act in accordance with the
terms of this letter agreement. You will cause your Representatives to
observe the terms of this letter agreement, and you will be responsible for
any breach of this letter agreement by any of your Representatives.
<PAGE>
MORGAN STANLEY DEAN WITTER
2. You and your Representatives will not (except as required by applicable
law, regulation or legal process, and only after compliance with paragraph
3 below), without our prior written consent, disclose to any person the
fact that the Information exists or has been made available, that you are
considering the Transaction or any other transaction involving the
Company, or that discussions or negotiations are taking or have taken
place concerning the Transaction or involving the Company or any term,
condition or other fact relating to the Transaction or such discussions or
negotiations, including, without limitation, the status thereof.
3. In the event that you or any of your Representatives are requested
pursuant to, or required by, applicable law, regulation or legal process
to disclose any of the information, you will notify us promptly so that we
may seek a protective order or other appropriate remedy or, in our sole
discretion, waive compliance with the terms of this letter agreement. In
the event that no such protective order or other remedy is obtained, or
that the Company does not waive compliance with the terms of this latter
agreement, you will furnish only that portion of the Information which you
are advised by counsel is legally required and will exercise all
reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded the Information.
4. If you determine not to proceed with the Transaction, you will promptly
inform our Representative, Morgan Stanley & Co. Incorporated ("Morgan
Stanley"), of that decision and, in that case, and at any time upon the
request of the Company or any of our Representatives, you will either (i)
promptly destroy all copies of the written Information in your or your
Representatives' possession and confirm such destruction to us in writing,
or (ii) promptly deliver to the Company at your own expense all copies of
the written Information in your or your Representatives' possession. Any
oral Information will continue to be subject to the terms of this letter
agreement.
5. You acknowledge that neither we, nor Morgan Stanley or its affiliates, nor
our other Representatives, nor any of our or their respective officers,
directors, employees, agents or controlling persons within the meaning of
Section 20 of the Securities Exchange Act of 1934, as amended, makes any
express or implied representation or warranty as in the accuracy or
completeness of the Information, and you agree that no such person will
have any liability relating to the Information or for any errors therein
or omissions therefrom. You further agree that you are not entitled to
rely on the accuracy or completeness of the Information and that you will
be entitled to rely solely on such representations and warranties as may
be included in any definitive agreement with respect to the Transaction,
subject to such limitations and restrictions as may be contained therein.
6. You are aware, and you will advise your Representatives who are informed
of the matters that are the subject of this letter agreement, of the
restrictions imposed by the United States securities laws on the purchase
or sale of securities by any person who has received material, non-public
information from the issuer of such securities and on the communication of
such information to any other person whom it is reasonably foreseeable
that such other person is likely to purchase or sell such securities in
reliance upon such information.
7. You agree that, for a period of three years from the date of this letter
agreement, neither you nor any of your affiliates will, without the prior
written consent of the Company or its Board of Directors: (i) acquire,
offer to acquire, or agree to acquire, directly or indirectly, by purchase
or otherwise, any voting securities or direct or indirect rights to
acquire any voting securities of the Company or any subsidiary thereof, or
of any successor to or person in control of the Company, or any assets of
the Company or any subsidiary or division thereof or of any such successor
or
<PAGE>
MORGAN STANLEY DEAN WITTER
controlling person; (ii) make, or in any way participate in, directly
or indirectly, any "solicitation" of "proxies" (as such terms are used in
the rules of the Securities Exchange Commission) to vote, or seek to
advise or influence any person or entity with respect to the voting of,
any voting securities of the Company; (iii) make any public announcement
with respect to, or submit a proposal for, or offer of (with or without
conditions) any extraordinary transaction involving the Company or its
securities or agents; (iv) form, join or in any way participate in a
"group" (as defined in Section 13 (d)(3) of the Securities Exchange Act
of 1934, as amended) in connection with any of the foregoing; or (v)
request the Company or any of our Representatives, directly or
indirectly, to amend or waive any provisions of this paragraph. You will
promptly advise the Company of any inquiry or proposal made to you with
respect to any of the foregoing.
8. You agree that, for a period of three years from the date of this letter
agreement, you will not, directly or indirectly, solicit for employment
or hire any employee of the Company or any of its subsidiaries with whom
you have had contact or who became known to you in connection with your
consideration of this Transaction; provided, however, that the foregoing
provision will not prevent you from employing any such person who
contacts you on his or her own initiative without any direct or indirect
solicitation by or encouragement from you.
9. You agree that all (i) communications regarding the Transaction, (ii)
requests for additional information, facility tours or management
meetings, and (iii) discussions or questions regarding procedures with
respect to the Transaction, will be first submitted or directed to Morgan
Stanley and not to the Company. You acknowledge and agree that (a) we and
our Representatives are free to conduct the process leading up to a
possible Transaction as we and our Representatives, in our sole
discretion, determine (including, without limitation, by negotiating with
any prospective buyer and entering into a preliminary or definitive
agreement without prior notice to you or any other person), (b) we
reserve the right, in our sole discretion, to change the procedures
relating to our consideration of the Transaction at any time without
prior notice to you or of any other person, to reject any and all
proposals made by you or any of your Representatives with regard to the
Transaction, and to terminate discussions and negotiations with you at
any time and for any reason, and (c) unless and until a written
definitive agreement concerning the Transaction has been executed,
neither we nor any of our Representatives will have any liability to you
with respect to the Transaction, whether by virtue of this latter
agreement, any other written or oral expression with respect to the
Transaction or otherwise.
10. You acknowledge that remedies of law may be inadequate to protect us
against any actual or threatened breach of this letter agreement by you
or by your Representatives, and, without prejudice to any other rights
and remedies otherwise available to us, you agree to the granting of
injunctive relief in our favor without proof of actual damages. In the
event of litigation relating to this letter agreement, if a court of
competent jurisdiction determines in a final, nonappealable order that
this letter agreement has been breached by you or by your
Representatives, then you will reimburse the Company for its costs and
expenses (including, without limitation, legal fees and expenses)
incurred in connection with all such litigation.
11. You agree that no failure or delay by us for exercising any right, power
or privilege hereunder will operate as a waiver thereof, nor will any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of my right, power or privilege hereunder.
12. This letter agreement will be governed by and construed in accordance
with the laws of the State of New York applicable to contracts between
residents of the State and executed in and to be performed in that State.
<PAGE>
MORGAN STANLEY DEAN WITTER
13. This letter agreement contains the entire agreement between you and us
concerning the confidentiality of the Information, and no modifications of
this letter agreement or waiver of the terms and conditions hereof will be
binding upon you or us, unless approved in writing by each of you and us.
Please confirm your agreement with the foregoing by signing and returning to the
undersigned the duplicate copy of this letter enclosed herewith.
Very truly yours,
DANZAS Holding Ltd.
By: /s/ Per Utnegaard
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Name Per Utnegaard
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Title Senior Vice President
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Accepted and Agreed as of the date
first written above:
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AIR EXPRESS INTERNATIONAL CORP.
By:
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Name:
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Title:
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