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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
---------------------
HOLOPHANE CORPORATION
(Name of Subject Company)
NSI ENTERPRISES, INC.
NATIONAL SERVICE INDUSTRIES, INC.
(Bidders)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class of Securities)
43645B10
(CUSIP Number of Class of Securities)
KENYON W. MURPHY, ESQ.
VICE PRESIDENT AND ASSOCIATE COUNSEL
NATIONAL SERVICE INDUSTRIES, INC.
NSI CENTER
1420 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30309-3002
TELEPHONE: (404) 853-1000
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidders)
---------------------
COPY TO:
RUSSELL B. RICHARDS, ESQ.
KING & SPALDING
191 PEACHTREE STREET
ATLANTA, GEORGIA 30303-1763
TELEPHONE: (404) 572-4600
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CALCULATION OF FILING FEE
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TRANSACTION VALUATION* AMOUNT OF FILING FEE**
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$470,837,482.50 $94,165
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</TABLE>
* Estimated solely for the purpose of determining the registration fee assuming
that all holders of options and other rights to acquire shares of common
stock, par value $.01 per share ("Common Stock"), of the Subject Company
exercise such options and or rights and tender the shares of Common Stock
thus acquired to the Purchaser pursuant to the Offer and based on the offer
to purchase at $38.50 cash per share, net to the seller in cash, less any
required withholding taxes and without interest thereon and (i) 10,564,265
shares of Common Stock outstanding, (ii) 1,432,330 shares of Common Stock
reserved for issuance upon the exercise of outstanding stock options, (iii)
up to 78,000 shares of Common Stock issuable under additional employee
benefits plans and (iv) up to 154,590 shares of Common Stock potentially
issuable pursuant to obligations under a previous acquisition agreement, as
of June 15, 1999.
** The amount of the filing fee, calculated in accordance with Rule 0-11 under
the Securities Exchange Act of 1934, as amended, equals 1/50 of one percent
of the aggregate of the cash offered by the bidder.
[ ] 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:
Form or Registration No.:
Filing Party:
Date Filed:
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<PAGE> 2
SCHEDULE 14D-1
CUSIP NO. 43645B10
1. Name of Reporting Person
NSI Enterprises, Inc.
S.S. or I.R.S. Identification No. of above Person 582227500
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ] (b) [ ]
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3. SEC Use Only
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4. Sources of Funds (See Instructions)
AF
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5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items
2(E) or 2(F) [ ]
N/A
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6. Citizenship or Place of Organization
Delaware
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7. Aggregate Amount Beneficially Owned by Each Reporting Person
None
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8. Check Box if the Aggregate Amount in Row 7 Excludes Certain Shares (See
Instructions) [ ]
N/A
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9. Percent of Class Represented by Amount in Row 7
N/A
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10. Type of Reporting Person (See Instructions)
CO
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SCHEDULE 14D-1
CUSIP NO. 43645B10
1. Name of Reporting Person
National Service Industries, Inc.
S.S. or I.R.S. Identification No. of above Person 580364900
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ] (b) [ ]
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3. SEC Use Only
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4. Sources of Funds (See Instructions)
BK; WC
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5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items
2(E) or 2(F) [ ]
N/A
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6. Citizenship or Place of Organization
Delaware
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7. Aggregate Amount Beneficially Owned by Each Reporting Person
None
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8. Check Box if the Aggregate Amount in Row 7 Excludes Certain Shares (See
Instructions) [ ]
N/A
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9. Percent of Class Represented by Amount in Row 7
N/A
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10. Type of Reporting Person (See Instructions)
CO
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2
<PAGE> 3
THIS TENDER OFFER STATEMENT ON SCHEDULE 14D-1 RELATES TO THE OFFER BY NSI
ENTERPRISES, INC., A DELAWARE CORPORATION (THE "PURCHASER"), A WHOLLY OWNED
SUBSIDIARY OF NATIONAL SERVICE INDUSTRIES, INC., A DELAWARE CORPORATION
("PARENT"), TO PURCHASE ALL OF THE OUTSTANDING SHARES OF COMMON STOCK PAR VALUE,
$.01 PER SHARE (THE "SHARES"), OF HOLOPHANE CORPORATION, A DELAWARE CORPORATION
(THE "COMPANY"), AT A PURCHASE PRICE OF $38.50 PER SHARE, NET TO THE SELLER IN
CASH, LESS ANY REQUIRED WITHHOLDING TAXES AND WITHOUT INTEREST THEREON, UPON THE
TERMS AND SUBJECT TO THE CONDITIONS SET FORTH IN THE OFFER TO PURCHASE, DATED
JUNE 25, 1999 (THE "OFFER TO PURCHASE"), A COPY OF WHICH IS ATTACHED HERETO AS
EXHIBIT (A)(1), AND IN THE RELATED LETTER OF TRANSMITTAL (WHICH, TOGETHER WITH
THE OFFER TO PURCHASE, AS AMENDED FROM TIME TO TIME, CONSTITUTE THE "OFFER"), A
COPY OF WHICH IS ATTACHED HERETO AS EXHIBIT (A)(2).
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Holophane Corporation. The
information set forth in Section 7 ("Certain Information Concerning the
Company") of the Offer to Purchase is incorporated herein by reference.
(b) The exact title of the class of equity securities being sought in the
Offer is the Common Stock, par value $.01 per share, of the Company. The
information set forth in the Introduction (the "Introduction") of the Offer to
Purchase is incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of Shares;
Dividends") of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) This Statement is filed by the Purchaser and Parent. The
information set forth in Section 8 ("Certain Information Concerning the
Purchaser and Parent") of the Offer to Purchase and in Schedule I thereto is
incorporated herein by reference.
(e) and (f) During the last five years, neither the Purchaser nor Parent
nor, to the best knowledge of the Purchaser or Parent, any of the persons listed
in Schedule I to the Offer to Purchase (i) has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) was a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting activities
subject to, federal or state securities laws or finding any violation of such
laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) and (b) The information set forth in the Introduction, Section 8
("Certain Information Concerning the Purchaser and Parent") and Section 10
("Background of the Offer; Contacts with the Company") and Section 11 ("The
Merger Agreement") of the Offer to Purchase and in Exhibit (c) (1) of this
Schedule 14D-1 is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(c) The information set forth in Section 9 ("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 in the Introduction, Section 10
("Background of the Offer; Contacts with the Company"), Section 11 ("The Merger
Agreement"), Section 12 ("Purpose of the Offer; the Merger; Plans for the
Company") and Section 13 ("Dividends and Distributions") of the Offer to
Purchase is incorporated herein by reference.
3
<PAGE> 4
(f) and (g) The information set forth in Section 14 ("Effect of the Offer
on the Market for the Shares, Stock Exchange Listing and Exchange Act
Registration") of the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) and (b) The information set forth in the Introduction and Section 8
("Certain Information Concerning the Purchaser and Parent") of the Offer to
Purchase and Schedule I to the Offer to Purchase is incorporated herein by
reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, Section 8 ("Certain
Information Concerning the Purchaser and Parent"), Section 10 ("Background of
the Offer; Contacts with the Company"), Section 11 ("The Merger Agreement") and
Section 12 ("Purpose of the Offer; the Merger; Plans for the Company") of the
Offer to Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and Section 17 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 8 ("Certain Information Concerning the
Purchaser and Parent") of the Offer to Purchase is incorporated herein by
reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) None.
(b) and (c) The information set forth in Section 16 ("Certain Legal Matters
and Regulatory Approvals") of the Offer to Purchase is incorporated herein by
reference.
(d) The information set forth in Section 14 ("Effect of the Offer on the
Market for the Shares, Stock Exchange Listing and Exchange Act Registration")
and Section 16 ("Certain Legal Matters and Regulatory Approvals") of the Offer
to Purchase is incorporated herein by reference.
(e) None.
(f) The information set forth in the entire text of each of (i) the Offer
to Purchase and (ii) the Letter of Transmittal is incorporated herein by
reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase dated June 25, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter from the Dealer Manager to Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Form of Summary Advertisement as published on June 25, 1999.
(a)(8) Form of Press Release issued by Parent on June 21, 1999.
4
<PAGE> 5
(b)(1) Credit Agreement, dated as of July 23, 1996 among National Service
Industries, Inc., certain of its subsidiaries, certain listed banks,
Wachovia Bank of Georgia, N.A., as Agent, and Nationsbank, N.A.
(South) and SunTrust Bank, Atlanta as Co-Agents (incorporated herein
by reference to Exhibit 10(i)A of the Quarterly Report on Form 10-Q
of National Service Industries, Inc. for the fiscal quarter ended
May 31, 1998).
(b)(2) Commitment Letter regarding $250 million Credit Facility, dated June
18, 1999, among National Service Industries, Inc., The First
National Bank of Chicago and Banc One Capital Markets, Inc.
(b)(3) Commitment Letter regarding $250 million Credit Facility, dated June
18, 1999, between National Service Industries, Inc. and Wachovia
Capital Markets, Inc.
(c)(1) Agreement and Plan of Merger, dated as of June 20, 1999, among
National Service Industries, Inc., NSI Enterprises, Inc. and
Holophane Corporation.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
5
<PAGE> 6
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.
NATIONAL SERVICE INDUSTRIES, INC.
By: /s/ JAMES S. BALLOUN
------------------------------------
Name: James S. Balloun
Title: Chairman of the Board,
President and Chief
Executive Officer
NSI ENTERPRISES, INC.
By: /s/ JAMES S. BALLOUN
------------------------------------
Name: James S. Balloun
Title: Chairman of the Board,
President and Chief
Executive Officer
Date: June 25, 1999
6
<PAGE> 1
Exhibit (a)(1)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
HOLOPHANE CORPORATION
at
$38.50 Net Per Share
by
NSI ENTERPRISES, INC.
a wholly owned subsidiary
of
NATIONAL SERVICE INDUSTRIES, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, JULY 23, 1999,
UNLESS THE OFFER IS EXTENDED.
---------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT
LEAST A MAJORITY OF THE SHARES OF COMMON STOCK(DETERMINED ON A FULLY DILUTED
BASIS), OF HOLOPHANE CORPORATION (THE "COMPANY") AND (II) THE EXPIRATION OR
TERMINATION OF ALL APPLICABLE WAITING PERIODS UNDER THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR ACT"). THE OFFER IS
ALSO SUBJECT TO OTHER TERMS AND CONDITIONS. SEE THE INTRODUCTION AND SECTIONS 1
AND 15.
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THE OFFER IS BEING MADE PURSUANT TO THE AGREEMENT AND PLAN OF MERGER (THE
"MERGER AGREEMENT"), DATED AS OF JUNE 20, 1999, BY AND AMONG PARENT, THE
PURCHASER AND THE COMPANY. SEE SECTION 11.
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THE BOARD OF DIRECTORS OF HOLOPHANE CORPORATION (I) HAS UNANIMOUSLY
DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING EACH OF THE OFFER AND THE MERGER, ARE ADVISABLE AND ARE FAIR TO AND IN
THE BEST INTERESTS OF THE STOCKHOLDERS OF HOLOPHANE CORPORATION, (II) HAS
APPROVED THE OFFER AND THE MERGER AND (III) RECOMMENDS THAT ALL HOLDERS OF
SHARES ACCEPT THE OFFER AND TENDER THEIR SHARES TO THE PURCHASER.
---------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares (as defined herein) of Holophane Corporation should either (1) complete
and sign the Letter of Transmittal (or a facsimile thereof) in accordance with
the instructions in the Letter of Transmittal, mail or deliver the Letter of
Transmittal (or such facsimile) and any other required documents to the
Depositary (as defined herein), and either deliver the certificate(s)
representing the tendered Shares and any other required documents to the
Depositary or deliver an Agent's Message (as defined herein) and tender such
Shares pursuant to the procedure for book-entry transfer set forth in Section 3,
deliver an Agent's Message (as defined herein) and tender such Shares pursuant
to the procedures for book-entry transfer set forth in Section 3 or (2) request
such stockholder's broker, dealer, commercial bank, trust company or other
nominee to effect the transaction for such stockholder. Stockholders having
Shares registered in the name of a broker, dealer, commercial bank, trust
company or other nominee must contact such broker, dealer, commercial bank,
trust company or other nominee if they desire to tender Shares so registered.
A stockholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available, or who cannot comply
with the procedure for book-entry transfer on a timely basis, may tender such
Shares by following the procedures for guaranteed delivery set forth in Section
3.
Questions and requests for assistance may be directed to Wasserstein
Perella & Co., Inc. (the "Dealer Manager") or to D. F. King & Co., Inc. (the
"Information Agent") 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 the Notice of Guaranteed
Delivery may also be obtained from the Information Agent or the Dealer Manager,
or from brokers, dealers, commercial banks or trust companies.
---------------------
The Dealer Manager for the Offer is:
WASSERSTEIN PERELLA & CO., INC.
June 25, 1999
<PAGE> 2
TABLE OF CONTENTS
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PAGE
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INTRODUCTION................................................ 1
THE TENDER OFFER............................................ 2
1. Term of the Offer, Expiration Date................... 2
2. Acceptance for Payment and Payment for Shares........ 3
3. Procedure for Tendering Shares....................... 4
4. Withdrawal Rights.................................... 7
5. Certain Federal Income Tax Consequences.............. 8
6. Price Range of Shares; Dividends..................... 9
7. Certain Information Concerning the Company........... 9
8. Certain Information Concerning the Purchaser and
Parent............................................... 12
9. Source and Amount of Funds........................... 14
10. Background of the Offer; Contacts with the Company... 14
11. The Merger Agreement................................. 15
12. Purpose of the Offer; The Merger; Plans for the
Company.............................................. 23
13. Dividends and Distributions.......................... 25
14. Effect of the Offer on the Market for the Shares,
Stock Exchange Listing and Exchange Act
Registration......................................... 25
15. Certain Conditions of the Offer...................... 26
16. Certain Legal Matters and Regulatory Approvals....... 27
17. Fees and Expenses.................................... 29
18. Miscellaneous........................................ 29
SCHEDULE I -- Directors and Executive Officers of the
Purchaser and Parent...................................... S-1
</TABLE>
i
<PAGE> 3
TO THE STOCKHOLDERS OF HOLOPHANE CORPORATION:
INTRODUCTION
NSI Enterprises, Inc., a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of National Service Industries, Inc., a Delaware
corporation ("Parent"), hereby offers to purchase all of the outstanding shares
of Common Stock, par value $.01 per share (the "Shares"), of Holophane
Corporation, a Delaware corporation (the "Company"), at a purchase price of
$38.50 per Share, net to the seller in cash, less any required withholding taxes
and without interest thereon, upon the terms and subject to the conditions set
forth in this Offer to Purchase and in the related Letter of Transmittal (which,
as amended from time to time, together constitute the "Offer").
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, subject to Instruction 6 of the Letter of Transmittal, stock
transfer taxes on the transfer and sale of Shares pursuant to the Offer. The
Purchaser will pay all fees and expenses of Wasserstein Perella & Co., Inc.
("Wasserstein Perella"), which is acting as Dealer Manager for the Offer (in
such capacity, the "Dealer Manager"), First Chicago Trust Company of New York,
which is acting as the Depositary (in such capacity, the "Depositary") and D.F.
King & Co., Inc., which is acting as the Information Agent (in such capacity,
the "Information Agent"), incurred in connection with the Offer. See Section 17.
The Board of Directors of the Company (the "Board of Directors") (i) has
unanimously determined that the Merger Agreement (as defined below) and the
transactions contemplated thereby, including each of the Offer and the Merger
(as defined below), are advisable and are fair to and in the best interests of
the stockholders of the Company, (ii) has approved the Offer and the Merger and
(iii) recommends that all holders of the Shares accept the Offer and tender
their Shares to the Purchaser.
The Board of Directors has received the written opinion dated June 20, 1999
of Salomon Smith Barney Inc. ("Salomon Smith Barney"), financial advisor to the
Company, to the effect that, as of such date and based upon and subject to
certain matters stated in such opinion, the $38.50 per Share cash consideration
to be received in the Offer and the Merger by the holders of Shares (other than
Parent and its affiliates) was fair, from a financial point of view, to such
holders. A copy of Salomon Smith Barney's written opinion is attached to the
Company's Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule
14D-9") which is being distributed to the stockholders of the Company, and such
stockholders are urged to read the opinion carefully in its entirety.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED IN
SECTION 1) AT LEAST A MAJORITY OF THE SHARES OF COMMON STOCK (DETERMINED ON A
FULLY DILUTED BASIS) OF THE COMPANY (THE "MINIMUM CONDITION") AND (II) THE
EXPIRATION OR TERMINATION OF ALL APPLICABLE WAITING PERIODS UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR
ACT"). SEE SECTIONS 1 AND 15. IF THE PURCHASER PURCHASES NOT LESS THAN THAT
NUMBER OF SHARES NEEDED TO SATISFY THE MINIMUM CONDITION, IT WILL BE ABLE TO
EFFECT THE MERGER WITHOUT THE AFFIRMATIVE VOTE OF ANY OTHER STOCKHOLDER OF THE
COMPANY. SEE SECTION 12.
The Company has represented to Parent that, as of June 15, 1999, there were
(i) 10,564,265 Shares issued and outstanding, (ii) 1,432,330 Shares reserved for
issuance upon the exercise of outstanding stock options, (iii) up to 78,000
shares issuable under additional employee benefits plans and (iv) up to 154,590
shares potentially issuable pursuant to obligations under a previous acquisition
agreement. Based upon the foregoing, the Purchaser believes that approximately
6,114,593 Shares constitute a majority of the outstanding Shares on a fully
diluted basis.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of June 20, 1999 (the "Merger Agreement"), among Parent, the Purchaser and
the Company. The Merger Agreement provides, among other things, for the making
of the Offer by the Purchaser, and further provides that, following the
<PAGE> 4
completion of the Offer, upon the terms and subject to the conditions of the
Merger Agreement and in accordance with the Delaware General Corporation Law
(the "DGCL"), the Purchaser will be merged with and into the Company (the
"Merger"). Following the Merger, the Company will continue as the surviving
corporation (the "Surviving Corporation") and become a wholly owned subsidiary
of Parent, and the separate corporate existence of the Purchaser will cease.
Pursuant to the Merger Agreement, the Company has also agreed, if and to
the extent permitted by law, at the request of the Purchaser and subject to the
terms of the Merger Agreement, to take all necessary and appropriate actions to
cause the Merger to become effective as soon as reasonably practicable after the
purchase of the Shares pursuant to the Offer, without a meeting of the Company's
stockholders in accordance with Section 253 of the DGCL. See Section 11.
At the effective time of the Merger (the "Effective Time"), each Share
outstanding immediately prior to the Effective Time (other than Shares held in
the treasury of the Company and each Share, if any, owned by Parent, the
Purchaser or any other direct or indirect subsidiary of the Company, of Parent
or of the Purchaser, which shall be canceled, and other than Shares, if any
(collectively, "Dissenting Shares"), held by stockholders who have not voted in
favor of the Merger or consented thereto and who have perfected their appraisal
rights in accordance with Section 262 of the DGCL) will be converted into the
right to receive $38.50 in cash (the "Merger Consideration"), less any required
withholding taxes and without interest thereon.
The Merger Agreement is more fully described in Section 11. Certain federal
income tax consequences of the sale of the Shares pursuant to the Offer and the
exchange of Shares for the Merger Consideration pursuant to the Merger are
described in Section 5.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
THE TENDER OFFER
1. TERM OF THE OFFER, EXPIRATION DATE. 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), the Purchaser will accept
for payment and pay for all Shares validly tendered on or prior to the
Expiration Date and not properly withdrawn as permitted by Section 4. The term
"Expiration Date" means 12:00 midnight, New York City time, on Friday, July 23,
1999, unless and until the Purchaser (subject to the terms and conditions of the
Merger Agreement), shall have extended the period during which the Offer is
open, in which event the term "Expiration Date" shall mean the latest time and
date at which the Offer, as so extended by the Purchaser, shall expire.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, SATISFACTION OF THE
MINIMUM CONDITION AND THE EXPIRATION OR TERMINATION OF ALL WAITING PERIODS
IMPOSED BY THE HSR ACT. SEE SECTION 15, WHICH SETS FORTH IN FULL THE CONDITIONS
TO THE OFFER. SUBJECT TO THE PROVISIONS OF THE MERGER AGREEMENT AND THE
APPLICABLE RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION (THE
"COMMISSION"), THE PURCHASER RESERVES THE RIGHT TO WAIVE THE MINIMUM CONDITION
OR ANY OF THE OTHER CONDITIONS TO THE OFFER, TO INCREASE THE PRICE PER SHARE
PAYABLE IN THE OFFER AND TO MAKE ANY OTHER CHANGE IN THE TERMS AND CONDITIONS OF
THE OFFER. SUBJECT TO THE PROVISIONS OF THE MERGER AGREEMENT, INCLUDING THE
PROVISIONS OF THE MERGER AGREEMENT SET FORTH IN THE NEXT PARAGRAPH, AND THE
APPLICABLE RULES AND REGULATIONS OF THE COMMISSION, IF BY THE EXPIRATION DATE
ANY OR ALL OF SUCH CONDITIONS TO THE OFFER HAVE NOT BEEN SATISFIED, THE
PURCHASER RESERVES THE RIGHT (BUT SHALL NOT BE OBLIGATED) TO (I) TERMINATE THE
OFFER AND RETURN ALL TENDERED SHARES TO TENDERING STOCKHOLDERS, (II) WAIVE SUCH
2
<PAGE> 5
UNSATISFIED CONDITIONS AND PURCHASE ALL SHARES VALIDLY TENDERED OR (III) EXTEND
THE OFFER AND, SUBJECT TO THE TERMS OF THE OFFER (INCLUDING THE RIGHTS OF
STOCKHOLDERS TO WITHDRAW THEIR SHARES), RETAIN THE SHARES WHICH HAVE BEEN
TENDERED, UNTIL THE TERMINATION OF THE OFFER, AS EXTENDED.
Subject to the applicable rules and regulations of the Commission and the
terms of the Merger Agreement, the Purchaser shall not (i) waive the Minimum
Condition without the consent of the Board of Directors and (ii) without the
consent of the Board of Directors, the Purchaser shall not make any change in
the terms or conditions of the Offer which (A) changes the form of consideration
to be paid, (B) decreases the price per Share payable in the Offer, (C) reduces
the maximum number of Shares to be purchased in the Offer, (D) imposes
additional conditions to the Offer, (E) extends the Expiration Date (except as
required by law or the applicable rules and regulations of the Commission) or
(F) amends any term of the Offer in any manner adverse to holders of Shares;
provided that Purchaser shall have the right, in its sole discretion, to extend
the Offer on up to two separate occasions for up to five business days each,
notwithstanding the prior satisfaction of conditions set forth in the Merger
Agreement, in order to attempt to satisfy the Minimum Condition or to satisfy
the requirements of Section 253 of the DGCL. The Purchaser shall have no
obligation to pay interest on the purchase price of tendered Shares, including
in the event the Purchaser exercises its right to extend the period of time
during which the Offer is open. The rights reserved by the Purchaser in this
paragraph are in addition to the Purchaser's rights to terminate the Offer
pursuant to Section 15.
Any extension, delay, termination, waiver or amendment will be followed as
promptly as practicable by public announcement thereof, and such announcement in
the case of an extension will be made in accordance with Rule 14e-1(d) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), no later than
9:00 A.M., New York City time, on the next business day after the previously
scheduled Expiration Date. Without limiting the manner in which the Purchaser
may choose to make any public announcement, except as provided by applicable law
(including Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require
that material changes be promptly disseminated to holders of Shares), the
Purchaser shall have no obligation to publish, advertise or otherwise
communicate any such public announcement other than by issuing a release to the
Dow Jones News Service.
If the Purchaser makes a material change in the terms of the Offer or if it
waives a material condition of the Offer, the Purchaser will disseminate
additional tender offer materials and extend the Offer to the extent required by
Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The minimum period
during which an offer must remain open following material changes in the terms
of the offer, other than a change in price or a change in the percentage of
securities sought, will depend upon the facts and circumstances, including the
materiality, of the changes. With respect to a change in price or, subject to
certain limitations, a change in the percentage of securities sought, a minimum
ten business day period from the day of such change is generally required to
allow for adequate dissemination to stockholders. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday, or a federal holiday
and consists of the time period from 12:01 A.M. through 12:00 midnight, New York
City time.
The Company has provided the 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
and other relevant materials will be mailed by the Purchaser to record holders
of Shares and furnished to brokers, dealers, commercial banks, trust companies
and similar persons whose names, or the names of whose nominees, appear on the
stockholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing, for subsequent transmittal to beneficial
owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms and
subject to the conditions of the Offer (including, if the Offer is extended or
amended, the terms and conditions of any such extension or amendment), the
Purchaser will accept for payment and will pay for all Shares validly tendered
and not properly withdrawn on or prior to the Expiration Date as soon as
practicable after the later to occur of (i) the Expiration Date and (ii) the
satisfaction or waiver of the conditions of the Offer set forth in Section 15,
including without limitation the expiration or termination of the waiting period
applicable to the acquisition of
3
<PAGE> 6
Shares pursuant to the Offer under the HSR Act. In addition, subject to
applicable rules of the Commission, the Purchaser expressly reserves the right
to delay acceptance for payment of or payment for Shares pending receipt of any
other regulatory approvals specified in Section 16. Any such delays will be
effected in compliance with Rule 14e-1(c) under the Exchange Act.
For information with respect to approvals required to be obtained prior to
the consummation of the Offer, including under the HSR Act, see Section 16.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Shares ("Share Certificates") or timely confirmation (a
"Book-Entry Confirmation") of a book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company (the "Book-Entry Transfer
Facility") pursuant to the procedures set forth in Section 3, (ii) the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or an Agent's Message (as defined below) in
connection with a book-entry transfer and (iii) any other documents required by
the Letter of Transmittal.
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 that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against such participant.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when the Purchaser gives oral or written notice to the
Depositary of the 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 the Purchaser
and transmitting such payments to stockholders whose Shares have been accepted
for payment. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR
SHARES BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY
DELAY IN MAKING SUCH PAYMENT. If for any reason whatsoever acceptance for
payment of or payment for any Shares tendered pursuant to the Offer is delayed
or the Purchaser is unable to accept for payment or pay for Shares tendered
pursuant to the Offer, then without prejudice to the Purchaser's rights set
forth herein, the Depositary may nevertheless, on behalf of the Purchaser and
subject to Rule 14e-1(c) under the Exchange Act, retain tendered Shares and such
Shares may not be withdrawn except to the extent that the tendering stockholder
is entitled to and duly exercises withdrawal rights as described in Section 4.
If any tendered Shares are not accepted for payment for any reason or if
Share Certificates are submitted for more Shares than are tendered, Share
Certificates evidencing unpurchased or untendered 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 procedures set forth in Section 3, such Shares will be
credited to an account maintained at the Book-Entry Transfer Facility), as
promptly as practicable following the expiration, termination or withdrawal of
the Offer.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to one or more of its affiliates the right to purchase all
or any portion of the Shares tendered pursuant to the Offer, but any such
transfer or assignment will not relieve the Purchaser of its obligations under
the Offer and will in no way prejudice the rights of tendering stockholders to
receive payment for Shares validly tendered and accepted for payment pursuant to
the Offer.
3. PROCEDURE FOR TENDERING SHARES.
Valid Tenders. Except as set forth below, in order for Shares to be
validly tendered pursuant to the Offer, 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 connection with a
book-entry delivery of Shares, and any other documents required by the Letter of
Transmittal, must be received by the Depositary at one of
4
<PAGE> 7
its addresses set forth on the back cover of this Offer to Purchase on or prior
to the Expiration Date and either (i) 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 on or
prior to the Expiration Date or (ii) the guaranteed delivery procedures
described below must be complied with.
Book-Entry Transfer. The Depositary will make a request to 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 book-entry delivery of 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, 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 connection with a book-entry transfer, and any other
documents required by the Letter of Transmittal, 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 on or prior to the Expiration Date, or the guaranteed delivery
procedures described below must be complied with.
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.
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 (INCLUDING, IN THE CASE OF
BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Signature Guarantees. Signatures on Letters of Transmittal must be
guaranteed by a firm which is a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the Securities
Transfer Agents Medallion Program (each of the foregoing being referred to as an
"Eligible Institution"), except in cases where Shares are tendered (i) by a
registered holder of Shares who has not completed either the box labeled
"Special Payment Instructions" or the box labeled "Special Delivery
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution. See Instructions 1 and 5 of the Letter of Transmittal.
If the Share Certificates are registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made, or Share
Certificates not accepted for payment or not tendered are to be returned, to a
person other than the registered holder, the Share Certificates must be endorsed
or accompanied by appropriate stock powers, in either case, signed exactly as
the name of the registered holder appears on such certificates, with the
signatures on such certificates or stock powers guaranteed as aforesaid. See
Instructions 1 and 5 of the Letter of Transmittal.
If Share Certificates are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof) must accompany each such delivery.
5
<PAGE> 8
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates are not immediately
available, or such stockholder cannot deliver the Share Certificates and all
other required documents to reach the Depositary on or 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 the Purchaser is
received by the Depositary as provided below on or prior to the Expiration
Date; and
(iii) the Share Certificates (or a Book-Entry Confirmation),
representing all tendered Shares in proper form for transfer, 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
New York Stock Exchange ("NYSE") trading days after the date of execution
of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, telex, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution and a representation that the
stockholder owns the Shares tendered within the meaning of, and that the tender
of the Shares effected thereby complies with, Rule 14e-4 under the Exchange Act,
each in the form set forth in such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of Share Certificates for, or of Book-Entry
Confirmation with respect to, such Shares, a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof), together 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.
Accordingly, payment might not be made to all tendering stockholders at the same
time and will depend upon when Share Certificates or Book-Entry Confirmations of
such Shares are received into the Depositary's account at the Book-Entry
Transfer Facility.
Appointment as Proxy. By executing the Letter of Transmittal, a tendering
stockholder irrevocably appoints designees of the Purchaser as such
stockholder's proxies, 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 the Purchaser (and with respect to any and all other Shares or other
securities issued or issuable in respect of such Shares on or after June 20,
1999). All such proxies shall be considered irrevocable. Such appointment will
be effective when, and only to the extent that, the 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 consents executed (and, if given or
executed, will not be deemed effective). The designees of the Purchaser will,
with respect to the Shares (and such other Shares and securities) for which such
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. The Purchaser reserves the right to require that, in order for Shares
to be deemed validly tendered, immediately upon the Purchaser's payment for such
Shares, the Purchaser must be able to exercise full voting rights with respect
to such Shares.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by the Purchaser in its sole discretion, which
determination shall be final and binding on all parties. The 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. The Purchaser also reserves the absolute right to waive any
6
<PAGE> 9
defect or irregularity in any tender of Shares of any particular stockholder
whether or not similar defects or irregularities are waived in the case of other
stockholders. No tender of Shares will be deemed to have been validly made until
all defects and irregularities have been cured or waived. None of the Purchaser,
Parent, any of their affiliates or assigns, 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.
The 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.
Backup Federal Income Tax Withholding and Substitute Form W-9. Under the
"backup withholding" provisions of Federal income tax law, the Depositary may be
required to withhold 31% of the amount of any payments of cash pursuant to the
Offer. In order to avoid backup withholding, each stockholder surrendering
Shares in the Offer must, unless an exemption applies, provide the payor of such
cash with such stockholder's correct taxpayer identification number ("TIN") on a
substitute Form W-9 and certify, under penalties of perjury, that such TIN is
correct and that such stockholder is not subject to backup withholding. If a
stockholder does not provide its correct TIN or fails to provide the
certifications described above, the Internal Revenue Service ("IRS") may impose
a penalty on such stockholder and payment of cash to such stockholder pursuant
to the Offer may be subject to backup withholding of 31%.
All stockholders surrendering Shares pursuant to the Offer should complete
and sign the substitute Form W-9 included in the Letter of Transmittal to
provide the information and certification necessary to avoid backup withholding
(unless an applicable exemption exists and is proved in a manner satisfactory to
the Depositary). Certain stockholders (including among others all corporations
and certain foreign individuals and entities) are not subject to backup
withholding. Noncorporate foreign stockholders should complete and sign a Form
W-8, Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding. See Instruction 9 of the
Letter of Transmittal.
Other Requirements. The Purchaser's acceptance for payment of Shares
tendered pursuant to any of the procedures described above will constitute a
binding agreement between the tendering stockholder and the Purchaser upon the
terms and subject to the conditions of the Offer, including the tendering
stockholder's representation and warranty that the stockholder is the holder of
the Shares within the meaning of, and that the tender of the Shares complies
with, Rule 14e-4 under the Exchange Act.
4. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer are
irrevocable, except that Shares tendered pursuant to the Offer may be withdrawn
at any time on or prior to the Expiration Date and, unless theretofore accepted
for payment by the Purchaser pursuant to the Offer, may also be withdrawn at any
time after Monday, August 23, 1999. If the Purchaser extends the Offer, is
delayed in its acceptance for payment of Shares or is unable to purchase Shares
validly tendered pursuant to the Offer for any reason, then without prejudice to
the Purchaser's rights under the Offer, the Depositary may nevertheless, on
behalf of the 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 in this Section 4. Any such delay in acceptance
for payment will be accompanied by an extension of the Offer to the extent
required by law.
For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase. Any notice of withdrawal must specify the name of the person who
tendered the Shares to be withdrawn, the number of Shares to be withdrawn and
the name of the registered holder, if different from that of the person who
tendered such Shares. If Share Certificates to be withdrawn have been delivered
or otherwise identified to the Depositary, then prior to the physical release of
such certificates, the serial numbers shown on such certificates must be
submitted to the Depositary and the signatures on the notice of withdrawal must
be guaranteed by an Eligible Institution unless such Shares have been tendered
for the account of any Eligible Institution. If Shares have been tendered
pursuant to the procedure for book-entry transfer as set forth in Section 3, 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, in which
case a notice of withdrawal will be
7
<PAGE> 10
effective if delivered to the Depositary by any method of delivery described in
the first sentence of this paragraph.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding. None of the
Purchaser, Parent, any of their affiliates or assigns, the Dealer Manager, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in any notice of withdrawal
or incur any liability for failure to give any such notification.
Withdrawals of Shares may not be rescinded. 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 Section 3.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The summary of tax
consequences set forth below is for general information only and is based on
current law. The tax treatment of each stockholder will depend in part upon such
stockholder's particular situation. Special tax consequences not described
herein may be applicable to particular classes of taxpayers, such as financial
institutions, broker-dealers, persons who are not citizens or residents of the
United States, stockholders who acquired their Shares through the exercise of an
employee stock option or otherwise as compensation, and persons who received
payments in respect of options to acquire Shares.
ALL STOCKHOLDERS AND OPTION HOLDERS SHOULD CONSULT WITH THEIR OWN TAX
ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES OF THE OFFER AND THE MERGER TO
THEM, INCLUDING THE APPLICABILITY AND EFFECT OF THE ALTERNATIVE MINIMUM TAX AND
ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS AND CHANGES IN SUCH TAX
LAWS.
The receipt of cash pursuant to the Offer or the Merger will be a taxable
transaction for Federal income tax purposes under the Internal Revenue Code of
1986, as amended, and may also be a taxable transaction under applicable state,
local or foreign income or other tax laws. Generally, for Federal income tax
purposes, a stockholder will recognize gain or loss in an amount equal to the
difference between the cash received by the stockholder pursuant to the Offer or
the Merger and the stockholder's adjusted tax basis in the Shares sold pursuant
to the Offer or converted into cash in the Merger. For Federal income tax
purposes, such gain or loss will be a capital gain or loss if the Shares are a
capital asset in the hands of the stockholder, and a long-term capital gain or
loss if the stockholder's holding period is more than one year as of the date
the Purchaser accepts such Shares for payment pursuant to the Offer or the
effective date of the Merger, as the case may be. In the case of a stockholder
who is not a corporation, long-term capital gain is eligible for a maximum
Federal income tax rate of 20%. There are limitations on the deductibility of
capital losses.
Under the "backup withholding" rules, the Purchaser or the Depositary or
exchange agent generally will be required to withhold, and will withhold, 31% of
any cash payments to a stockholder pursuant to the Offer or the Merger unless
the stockholder provides a TIN (which is, in the case of an individual, the
taxpayer's social security number) and certifies that such number is correct and
that such stockholder is not subject to backup withholding. Accordingly, unless
an exemption to the backup withholding rules applies and is proved in a manner
satisfactory to the Purchaser or the Depositary or exchange agent, each
stockholder should complete the Substitute Form W-9 accompanying these materials
to provide the information and certification that is necessary to avoid backup
withholding. Backup withholding is not an additional tax. Any amounts withheld
under the backup withholding rules will be credited against a stockholder's
regular Federal income tax liability (which may entitle the stockholder to a
refund), provided that the required information is provided to the IRS.
8
<PAGE> 11
6. PRICE RANGE OF SHARES; DIVIDENDS. According to the Company's Annual
Report to Stockholders for the fiscal year ended December 31, 1998 (the "1998
Annual Report"), the Shares are listed and traded principally on the NYSE under
the symbol "HLP." The following table sets forth, for the periods indicated, the
high and low sales prices per Share on the NYSE as reported by the Dow Jones
News Service. The Company did not pay any cash dividends during such periods.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
1997:
First Quarter............................................. $22 18 3/4
Second Quarter............................................ 23 1/4 19 1/4
Third Quarter............................................. 24 1/4 18 3/8
Fourth Quarter............................................ 26 21 1/4
1998:
First Quarter............................................. $25 3/4 22 3/4
Second Quarter............................................ 30 21
Third Quarter............................................. 30 20 1/4
Fourth Quarter............................................ 26 18
1999:
First Quarter............................................. $26 22
Second Quarter (through June 24, 1999).................... 38 1/4 21 15/16
</TABLE>
On June 18, 1999, the last full trading day prior to announcement of the
Offer, the closing sale price per Share reported on the NYSE was $28.3125. On
June 24, 1999, the last full trading day before commencement of the Offer, the
closing sale price per Share reported on the NYSE was $38 3/16. STOCKHOLDERS ARE
URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
7. CERTAIN INFORMATION CONCERNING THE COMPANY. The information concerning
the Company contained in this Offer to Purchase, including financial
information, has been taken from or is based upon publicly available documents
and records on file with the Commission and other public sources. The summary
information concerning the Company in this Section 7 and elsewhere in this Offer
to Purchase is derived from the 1998 Annual Report and other publicly available
information. The summary information set forth below is qualified in its
entirety by reference to such reports (which may be obtained and inspected as
described below) and should be considered in conjunction with the more
comprehensive financial and other information in such reports and other publicly
available reports and documents filed by the Company with the Commission and
other publicly available information. Although the Purchaser and Parent do not
have any knowledge that would indicate that any statements contained herein
based upon such reports are untrue, neither the Purchaser nor Parent assumes any
responsibility for the accuracy or completeness of the information contained
therein, 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
which are unknown to the Purchaser and Parent.
General. The Company was incorporated under the laws of the State of
Delaware in May 1989. The Company is listed on the NYSE and is a vertically
integrated, international manufacturer and marketer of highly engineered
lighting fixtures and systems for a wide range of industrial, commercial and
outdoor applications. The Company provides standard and specialized fixtures for
both interior and exterior lighting needs. The Company uses a factory sales
force and markets its products worldwide for use in both new construction and
retrofit applications. The Company employs approximately 2,050 employees. The
Company's principal executive offices are located at 250 East Broad Street,
Suite 1400, Columbus, Ohio 43215. The telephone number of the Company at such
offices is (614) 224-3134.
9
<PAGE> 12
Financial Information. Set forth below are certain selected consolidated
financial data for the Company's last three fiscal years and the three months
ended March 31, 1999, which were derived from the 1998 Annual Report and the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1999.
Results for the three months ended March 31, 1999, are not necessarily
indicative of the results to be expected for the full fiscal year. More
comprehensive financial information (including management's discussion and
analysis of financial condition and results of operations) is included in the
reports and other documents filed by the Company with the Commission, and the
following financial data are qualified in their entirety by reference to such
reports and other documents including the financial information and related
notes contained therein. Such reports and other documents may be examined and
copies thereof may be obtained from the offices of the Commission and the NYSE
in the manner set forth below under "Available Information."
HOLOPHANE CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED FOR THE YEAR ENDED DECEMBER 31,
MARCH 31, ---------------------------------
1999 1998 1997 1996
------------ --------- --------- ---------
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales.......................................... $52,773 $214,875 $205,327 $190,939
Gross margin....................................... 20,482 84,945 80,194 73,655
Operating income................................... 6,110 31,607 30,987 28,017
Interest expense, net.............................. 301 1,133 1,305 1,612
Income before income taxes, cumulative effect of
accounting change and extraordinary item......... 5,915 30,474 29,682 26,405
Provision for income taxes......................... 2,130 11,265 11,059 9,937
Income before cumulative effect of accounting
change and extraordinary item.................... 3,785 19,209 18,623 16,468
Net income (loss).................................. 3,785 19,209 18,623 16,468
Net income (loss) available to common
stockholders..................................... 3,785 $ 19,209 $ 18,623 $ 16,468
BALANCE SHEET DATA:
Cash............................................... $ 4,890 $ 5,535 $ 11,709 $ 8,072
Total assets....................................... 137,502 136,547 126,796 123,967
Debt............................................... 15,459 21,527 19,574 25,256
Stockholders' equity............................... 86,334 82,198 75,103 67,144
PER COMMON SHARE DATA:
Basic net earnings before cumulative effect of
accounting change and extraordinary items........ $ 0.36 $ 1.77 $ 1.65 $ 1.44
Basic net earnings................................. 0.36 1.77 1.65 1.44
Diluted net earnings............................... 0.35 1.72 1.60 1.40
</TABLE>
Certain Financial Projections for the Company. Prior to entering into the
Merger Agreement, Parent conducted a due diligence review of the Company and in
connection with such review received certain non-public information provided by
the Company, including certain projected financial information (the
"Projections") for the four fiscal years ending December 31, 2002. The Company
does not in the ordinary course publicly disclose projections and the
Projections were not prepared with a view to public disclosure. The Company has
advised Parent and the Purchaser that the Projections represent what the Company
believes to be a reasonable estimate of the Company's future financial
performance and reflect significant assumptions and subjective judgments by the
Company's management regarding industry performance and general business and
economic conditions. The Projections do not give effect to the Offer or the
potential combined
10
<PAGE> 13
operations of Parent and the Company. The Projections are set forth below in
this Offer to Purchase for the limited purpose of giving the holders of the
Shares access to financial projections prepared by the Company's management that
were made available to Parent and the Purchaser in connection with the Merger
Agreement and the Offer.
HOLOPHANE CORPORATION
PROJECTED FINANCIAL PERFORMANCE
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
---------------------------------
1999 2000 2001 2002
------ ------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Net Sales................................................... $237.5 $263.2 $292.1 $324.1
EBIT(1)..................................................... 35.2 40.3 47.3 55.0
EBITDA(2)................................................... 44.5 50.6 57.5 65.4
Net Income.................................................. 21.6 25.3 30.4 36.1
</TABLE>
- ---------------
(1) EBIT means earnings before interest and income taxes.
(2) EBITDA means earnings before interest, income taxes, depreciation and
amortization.
CAUTIONARY STATEMENTS CONCERNING FORWARD-LOOKING STATEMENTS
Certain matters discussed and statements made herein may constitute
forward-looking statements within the meaning of the Securities Act of 1933 and
the Securities Exchange Act of 1934, as amended by the Private Securities
Litigation Reform Act of 1995, 15 U.S.C.A. Section 77z-2 and 78u-5 (Supp. 1996).
Such forward-looking statements are not guarantees of future performance and
involve risks and uncertainties and actual results may differ materially from
those contemplated by such forward-looking statements. Forward-looking
statements include the information set forth above in "Certain Financial
Projections for the Company." Forward-looking statements also include those
preceded by, followed by or that include the words "believes", "expects",
"anticipates" or similar expressions. Such statements should be viewed with
caution.
While presented with numerical specificity, the Projections are based upon
a variety of estimates and hypothetical assumptions which may not be accurate,
may not be realized, and are also inherently subject to significant business,
economic and competitive uncertainties and contingencies, all of which are
difficult to predict, and most of which are beyond the control of the Company,
Parent or the Purchaser. Accordingly, there can be no assurance that any of the
Projections will be realized and the actual results may vary materially from
those shown above.
In addition, the Projections were not prepared in accordance with generally
accepted accounting principles, and neither the Company's nor Parent's
independent accountants have examined or compiled any of the Projections or
expressed any conclusion or provided any other form of assurance with respect to
the Projections and accordingly assume no responsibility for the Projections.
The Projections were prepared with a limited degree of precision, and were not
prepared with a view to public disclosure or compliance with the published
guidelines of the Commission or the guidelines established by the American
Institute of Certified Public Accountants regarding projections, which could
require a more complete presentation of data than as shown above. The inclusion
of the Projections herein should not be regarded as a representation by Parent
and the Purchaser or any other person that the projected results will be
achieved. The Projections should be read in conjunction with the historical
financial information of the Company included above and in the reports and other
documents of the Company that may be obtained from the offices of the Commission
and the NYSE in the manner set forth below under "Available Information." None
of Parent, the Purchaser or any other person assumes any responsibility for the
accuracy, completeness or validity of the foregoing Projections.
11
<PAGE> 14
Available Information. The Shares are registered under the Exchange Act.
Accordingly, the Company is subject to the informational filing requirements of
the Exchange Act and in accordance therewith is obligated to file periodic
reports, proxy statements and other information with the Commission relating to
its business, financial condition and other matters. Information as of
particular dates concerning the Company's directors and officers, their
remuneration, options granted to them, the principal holders of the Company's
securities and any material interest of such persons in transactions with the
Company is required to be disclosed in such proxy statements and distributed to
the Company's stockholders and filed with the Commission. Such reports, proxy
statements and other information should be available for inspection at the
public reference facilities of the Commission located in Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and may also be available for
inspection and copying at prescribed rates at the regional offices of the
Commission located at Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and Seven World Trade Center, Suite 1300, New York, New
York 10048. Such reports, proxy statements and other information may also be
obtained at the Web site that the Commission maintains at http://www.sec.gov.
Copies of this material may also be obtained by mail, upon payment of the
Commission's customary fees, from the Commission's principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549. Such material is also available for
inspection at the offices of the NYSE, 20 Broad Street, New York, New York
10005. Except as otherwise noted in this Offer to Purchase, all of the
information with respect to the Company set forth in this Offer to Purchase has
been derived from publicly available information.
8. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT. The
Purchaser, a Delaware corporation and a wholly owned subsidiary of Parent, was
organized in 1996. The \Purchaser has not carried on any activities to date
other than those incident to its formation and commencement of the Offer. The
Purchaser has its principal executive offices at 1420 Peachtree Street, N.E.,
Atlanta, Georgia 30309-3002. The telephone number for the Purchaser at such
offices is (404) 853-1000.
Parent, a Delaware corporation formed in 1928, provides a wide variety of
products and services through the following operating segments: Lighting
Equipment, Textile Rental, Chemical and Envelope. Parent has its principal
executive offices at 1420 Peachtree Street, N.E., Atlanta, Georgia 30309-3002.
The telephone number for Parent at such offices is (404) 853-1000.
The name, citizenship, business address, principal occupation or
employment, and five-year employment history of each of the directors and
executive officers of the Purchaser and Parent and certain other information are
set forth in Schedule I hereto.
12
<PAGE> 15
Set forth below are certain selected consolidated financial data relating
to Parent and its subsidiaries for Parent's last three fiscal years which have
been derived from the financial statements contained in Parent's Annual Report
to Stockholders for the fiscal year ended August 31, 1998. More comprehensive
financial information (including management's discussion and analysis of
financial condition and results of operations) is included in the reports and
other documents filed by Parent with the Commission, and the following financial
data are qualified in its entirety by reference to such reports and other
documents, including the financial information and related notes contained
therein. Such reports and other documents may be examined and copies thereof may
be obtained from the offices of the Commission and the NYSE in the manner set
forth below under "Available Information."
NATIONAL SERVICE INDUSTRIES, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED AUGUST 31,
------------------------------------
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
SUMMARY OF OPERATIONS DATA:
Net sales of products.................................... $1,718,564 $1,542,644 $1,482,937
Service revenues......................................... 312,746 493,535 530,625
---------- ---------- ----------
Total revenues................................... 2,031,310 2,036,179 2,013,562
Cost of products sold.................................... 1,044,215 945,794 933,405
Cost of services......................................... 183,470 283,024 304,381
Selling and administrative expenses...................... 634,061 633,740 616,513
Interest expense, net.................................... 749 1,624 1,565
Gain on sale of businesses............................... (2,449) (75,097) (7,579)
Restructuring expense, asset impairments, and other
charges............................................... -- 63,091 --
Other (income) expense, net.............................. (1,857) 4,925 3,429
---------- ---------- ----------
Income before taxes........................................ 173,121 179,078 161,848
Provision for income taxes................................. 64,401 71,800 60,700
---------- ---------- ----------
Net income................................................. $ 108,720 $ 107,278 $ 101,148
========== ========== ==========
BALANCE SHEET DATA:
Total assets............................................... $1,010,684 $1,106,352 $1,094,646
Net working capital........................................ 385,056 498,758 408,955
Total debt................................................. 86,073 32,086 31,662
Stockholders' equity....................................... 578,901 671,813 718,008
PER SHARE DATA:
Basic earnings per share................................... $ 2.56 $ 2.37 $ 2.11
Diluted earnings per share................................. 2.53 2.36 2.10
</TABLE>
Available Information. Parent is subject to the informational filing
requirements of the Exchange Act and in accordance therewith is obligated to
file periodic reports, proxy statements and other information with the
Commission relating to its business, financial condition and other matters.
Information as of particular dates concerning Parent's directors and officers,
their remuneration, options granted to them, the principal holders of Parent's
securities and any material interest of such persons in transactions with Parent
is required to be disclosed in such proxy statements and distributed to Parent's
stockholders and filed with the Commission. Such reports, proxy statements and
other information should be available for inspection at the public reference
facilities of the Commission located in Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and may also be available for inspection and copying at
prescribed rates at the regional offices of the Commission located at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and Seven
World Trade Center, Suite 1300, New York, New York 10048. Such reports, proxy
statements and other information may also be obtained at the Web site that the
Commission maintains at http:// www.sec.gov. Copies of this material may also be
obtained by mail, upon payment of the Commission's customary fees, from the
Commission's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549.
13
<PAGE> 16
Such material is also available for inspection at the offices of the NYSE, 20
Broad Street, New York, New York 10005.
None of the Purchaser, Parent nor, to the best knowledge of the Purchaser
and Parent, any of the persons listed on Schedule I hereto or any associate or
majority-owned subsidiary of the Purchaser, Parent or any of the persons so
listed, beneficially owns or has a right to acquire directly or indirectly any
Shares, and none of the Purchaser, Parent nor, to the best knowledge of the
Purchaser and Parent, any of the persons or entities referred to above, or any
of the respective executive officers, directors or subsidiaries of any of the
foregoing, has effected any transactions in the Shares during the past 60 days.
9. SOURCE AND AMOUNT OF FUNDS. The Offer is not conditioned upon any
financing arrangements. The total amount of funds required by the Purchaser to
purchase all outstanding Shares (on a fully diluted basis) pursuant to the Offer
and to pay fees and expenses related to the Offer and the Merger is estimated to
be approximately $485,000,000. The Purchaser plans to obtain all funds needed
for the Offer and the Merger through capital contributions or advances made by
Parent. Parent plans to obtain certain of the funds for such capital
contributions or advances from its available cash and from working capital and
expects to obtain the balance of such funds required to purchase the Shares from
(i) Parent's current loan facility (the "Credit Facility") which is provided by
Wachovia Bank of Georgia, N.A., Bank of America and SunTrust Bank, Atlanta, and
(ii) under a loan facility (the "New Facility") to be provided by The First
National Bank of Chicago, Banc One Capital Markets, Inc. and Wachovia Capital
Markets, Inc. (the "New Banks").
The Credit Facility will expire on July 22, 2001. Borrowings under the
Credit Facility bear interest at one of the following: (i) a base rate (greater
of the prime rate or the federal funds rate plus 50 basis points) (the "Base
Rate"); (ii) a rate based on LIBOR divided by one minus the percentage
prescribed by the Board of Governors of the Federal Reserve System for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in respect of "Eurocurrency Liabilities" (the "Eurodollar Rate");
(iii) a rate based on a quote delivered by the lending bank at the time of
borrowing by Parent or one of its affiliates (the "Money Market Rate"); or (iv)
a rate based, generally, on the offered rates for certain foreign currency
deposits divided by a percentage equal to one minus the then stated maximum rate
of all reserves requirements applicable to any member bank of the Federal
Reserve System. Parent will use certain of the additional funds under the Credit
Facility to finance the purchase of Shares by the Purchaser pursuant to the
Offer.
Parent has received commitment letters (the "Commitment Letter") from the
New Banks pursuant to which the New Banks have agreed to lend to Parent and/or
one or more of its affiliates up to $250 million. The New Facility will expire
364 days after execution of the agreement evidencing the New Facility.
Borrowings under the New Facility will bear interest at a rate based on one of
(i) the Base Rate, (ii) the Eurodollar rate or (iii) the Money Market rate, plus
an applicable margin. Parent will use the funds from the New Facility to finance
the purchase of Shares by Purchaser pursuant to the Offer.
The foregoing summary of the Credit Facility is qualified in its entirety
by reference to the text of the Credit Facility, a copy of which has been
incorporated by reference as an exhibit to the Schedule 14D-1. The foregoing
summary of the New Facility is subject to the preparation and completion of a
definitive credit agreement for the New Facility and is qualified in its
entirety by reference to the text of the Commitment Letter, a copy of which has
been filed as an exhibit to the Schedule 14D-1. The Credit Facility and the
Commitment Letter may be inspected at, and copies may be obtained from, the same
places and in the manner set forth under the caption "Available Information" in
Section 8. If and when definitive agreements relating to the New Facility are
executed, copies will be filed as exhibits to an amendment to the Schedule
14D-1.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY. Over the past
several years, the members of Parent's senior management have considered various
potential transactions which could enhance the value of Parent for its
stockholders including the possibility of a strategic acquisition of the
Company.
On March 31, 1999, Parent executed a confidentiality agreement and received
a confidential memoranda distributed to the Parent and other potential
purchasers in a limited auction of the Company.
14
<PAGE> 17
First round indications of interest were due on April 28, 1999. Parent
submitted a preliminary indication of interest and was invited to visit the
Company's facilities in Newark, Ohio on May 19, 1999. Parent met with senior
management and reviewed due diligence materials in a data room.
Final bids were due on June 16, 1999. On June 11, 1999, Parent's Board of
Directors met to discuss a possible bid for the Company. After reports from
management and Parent's financial advisor, the Board approved the submission of
a bid and authorized the officers of Parent to negotiate and execute the Merger
Agreement if the Company accepted Parent's bid. Parent delivered a proposal to
the Company together with a mark-up of a draft Merger Agreement distributed by
the Company's counsel on June 16, 1999.
On the afternoon of June 17, 1999, Salomon Smith Barney informed Parent and
its financial advisor, Wasserstein Perella, that the Company's legal and
financial advisors were authorized to negotiate with Parent and Wasserstein
Perella terms and conditions (including price) within specific parameters.
Salomon Smith Barney also informed Parent and Wasserstein Perella that it was
authorized by the Company's Board of Directors to contact another bidder if
Parent declined to improve certain terms and conditions of its offer. On June
18, King & Spalding, Parent's outside legal counsel, received a revised draft of
the Merger Agreement from Vorys, Sater, Seymour and Pease LLP, the Company's
outside legal counsel, for the consideration of Parent and its advisors.
On June 18, 1999, Parent agreed to increase the Offer to $38.50 per Share,
and Parent and its financial advisors communicated the revised offer price per
Share to the Company's financial advisor, subject to the condition that Parent's
revised proposal would not be valid if the final Merger Agreement was not
negotiated promptly or if other potential purchasers were contacted.
Over the weekend of June 19 and June 20, 1999, the Company and Parent, and
their respective advisors, negotiated the terms of the Merger Agreement. On the
afternoon of Sunday, June 20, 1999, the Board of Directors of the Company met in
person and by telephone conference, and (i) unanimously determined that the
Merger Agreement and the transactions contemplated thereby, including each of
the Offer and the Merger are advisable and fair to, and in the best interests
of, the stockholders of the Company, (ii) approved the Offer and the Merger and
(iii) recommended that the stockholders of the Company accept the Offer and
tender their Shares to the Purchaser. Following such actions, the Merger
Agreement was executed and delivered by the parties thereto. On Monday, June 21,
1999, prior to the opening of trading on the NYSE, Parent and the Company
jointly announced that the Merger Agreement had been signed and that the
Purchaser intended to commence the Offer.
On June 25, 1999, the Purchaser commenced the Offer.
11. THE MERGER AGREEMENT. The following is a summary of the material terms
of the Merger Agreement, which summary is qualified in its entirety by reference
to the Merger Agreement which is filed as an exhibit to the Tender Offer
Statement on Schedule 14D-1.
The Offer. The Merger Agreement provides for the commencement of the Offer
as promptly as practicable, and in any event within five business days from the
date of public announcement of the execution thereof. The obligation of
Purchaser to accept for payment Shares tendered pursuant to the Offer is subject
to (i) the Minimum Condition and (ii) the satisfaction or waiver of certain
other conditions of the Offer. See Section 15. Under the Merger Agreement, the
Purchaser expressly reserves the right to waive the Minimum Condition or any
other conditions to the Offer, to increase the price per Share payable in the
Offer and to make any other change in the terms or conditions of the Offer. The
Minimum Condition of the Offer is that at the expiration of the Offer, at least
a majority of the Shares (determined on a fully diluted basis) shall have been
validly tendered and not properly withdrawn.
Notwithstanding the above, under the terms of the Merger Agreement, the
Purchaser shall not (i) waive the Minimum Condition without the consent of the
Board of Directors or (ii) without the consent of the Board of Directors, make
any change in the terms or conditions of the Offer which (A) changes the form of
consideration to be paid, (B) decreases the price per Share payable in the
Offer, (C) reduces the maximum number of Shares to be purchased in the Offer,
(D) imposes additional conditions to the Offer, (E) extends the Expiration Date
(except as required by law or the applicable rules and regulations of the
Commission) or
15
<PAGE> 18
(F) amends any term of the Offer in any manner adverse to holders of Shares;
provided that the Purchaser shall have the right, in its sole discretion, to
extend the Offer on up to two separate occasions for up to five business days
each, notwithstanding the prior satisfaction of conditions to the Offer, in
order to attempt to satisfy the Minimum Condition or to satisfy the requirements
of Section 253 of the DGCL. The Purchaser shall have no obligation to pay
interest on the purchase price of tendered Shares, including in the event the
Purchaser exercises its right to extend the period of time during which the
Offer is open. The rights reserved by the Purchaser in this paragraph are in
addition to the Purchaser's rights to terminate the Offer pursuant to Section
15.
The Merger. The Merger Agreement provides that subject to the terms and
conditions thereof (and including those described in Section 15) and in
accordance with the DGCL, at the Effective Time of the Merger, the Purchaser
shall be merged with and into the Company. As a result of the Merger, the
separate corporate existence of the Purchaser shall cease and the Company shall
continue as the surviving corporation of the Merger (the "Surviving
Corporation").
Pursuant to the Merger Agreement, each Share outstanding immediately prior
to the Effective Time (unless otherwise provided for) shall be converted into
the right to receive $38.50 in cash, less any required withholding taxes and
without interest thereon (the "Merger Consideration"), upon surrender of the
certificate formerly representing such Share in the manner described in the
Merger Agreement.
As soon as practicable following the date of the Merger Agreement, upon the
written request of the Purchaser, the Company (or, if appropriate, any committee
administering any stock option or compensation plan or arrangement) and the
Purchaser shall take such actions as are reasonably required (including, if
necessary, the provision of funds by the Purchaser to the Company) to provide
that at the Effective Time, each holder of a then outstanding stock option
and/or right to purchase Shares granted under any stock option or compensation
plan or arrangement of the Company (a "Company Stock Option"), whether or not
then exercisable, shall, upon surrender thereof to the Company or its designee,
receive from the Company the difference between the Merger Consideration and the
exercise price per Share for the Shares covered by such Company Stock Option,
net of any applicable tax withholding. Subject to the terms and conditions set
forth in the Merger Agreement, the Company and such committee shall further take
all actions necessary to cause each Company Stock Option to be canceled at the
Effective Time by virtue of the Merger and to cause the stock option or
compensation plan or arrangements of the Company providing for the granting of
Company Stock Options ("Option Plans") to terminate as of the Effective Time and
the provisions in any other plan, program or arrangement providing for the
issuance or grant by the Company or any of its subsidiaries of any interest in
respect of the capital stock of the Company or any of such subsidiaries to be
terminated as of the Effective Time. Without limiting the generality of the
foregoing, the Company and such committee shall have given all requisite notices
under all Option Plans and any agreements with respect to any Company Stock
Option, accelerated the vesting of Company Stock Options and shall have given
holders thereof the requisite opportunity to exercise as is required, in each
case, such that following the Effective Time no holder of Options or any
participant in the Option Plans or any other such plans, programs or
arrangements shall have the right thereunder to acquire any equity securities of
the Company or any of its subsidiaries.
The Merger Agreement provides that, unless otherwise stipulated, Shares
that are outstanding immediately prior to the Effective Time and which are held
by stockholders who have not voted in favor of or consented to the Merger in
writing and have demanded appraisal for such Shares in accordance with the DGCL
shall not be converted into a right to receive the Merger Consideration, but
shall be entitled to receive the consideration as shall be determined pursuant
to Section 262 of the DGCL; provided that if such holder shall have failed to
perfect or shall have withdrawn or otherwise lost his, her or its right to
appraisal, such holder's Shares shall be treated as if they had been converted
as of the Effective Time into a right to receive the Merger Consideration.
The Merger Agreement also provides that at the Effective Time and without
any further action on the part of the Company and the Purchaser, the (Second)
Restated Certificate of Incorporation of the Company in effect at the Effective
Time shall be the certificate of incorporation of the Surviving Corporation
until amended in accordance with applicable law. At the Effective Time and
without any further action on the part
16
<PAGE> 19
of the Company and the Purchaser, the Bylaws of the Purchaser in effect at the
Effective Time shall be the Bylaws of the Surviving Corporation until amended in
accordance with applicable law.
The Merger Agreement provides that from and after the Effective Time, until
successors are duly elected or appointed and qualified in accordance with
applicable law, (i) the directors of Purchaser at the Effective Time shall be
the directors of the Surviving Corporation and (ii) the officers of the Company
at the Effective Time shall be the officers of the Surviving Corporation.
Stockholders' Meeting; Proxy Statement. The Merger Agreement provides that
the Company shall cause a meeting of its stockholders (the "Company Stockholder
Meeting") to be duly called and held as soon as reasonably practicable for the
purpose of voting on the approval and adoption of the Merger Agreement and the
Merger and the transactions contemplated by the Merger Agreement, unless a vote
of stockholders of the Company is not required by the DGCL. The Board of
Directors of the Company shall recommend approval and, to the extent required by
the DGCL, adoption by the Company's stockholders of the Merger Agreement and the
Merger and the transactions contemplated by the Merger Agreement. In connection
with such meeting, the Company (i) will promptly prepare and file with the
Commission, will use its reasonable efforts to have cleared by the Commission
and will thereafter mail to its stockholders as promptly as practicable a proxy
or information statement of the Company (the "Company Proxy Statement") and all
other proxy materials for such meeting, (ii) will use its reasonable efforts to
obtain the necessary approvals by its stockholders of the Merger Agreement and
(iii) will otherwise comply with all legal requirements applicable to such
meeting. Notwithstanding the foregoing, if the Purchaser acquires at least 90%
of the outstanding Shares, the Company has agreed, at the request of the
Purchaser, to take all necessary and appropriate action to cause the Merger to
become effective as soon as reasonably practicable after such acquisition,
without a meeting of the Company's stockholders, in accordance with Section 253
of the DGCL.
Neither the Board of Directors nor any committee thereof will, except as
expressly permitted by the Merger Agreement, (i) withdraw, qualify or modify, or
propose publicly to withdraw, qualify or modify, in a manner adverse to Parent
or the Purchaser, its approval or recommendation of the Merger or the Merger
Agreement, (ii) approve or recommend, or propose publicly to approve or
recommend, any transaction involving any offer or proposal for, or any
indication of interest in, a merger or other business combination involving the
Company or any of its material subsidiaries or the acquisition of any equity
interest in, or substantial portion of the assets of, the Company or any of its
material subsidiaries, other than the transactions contemplated by the Merger
Agreement (an "Acquisition Proposal") from a party other than Parent or the
Purchaser (an "Alternative Transaction") or (iii) cause the Company to enter
into any letter of intent, agreement in principle, acquisition agreement or
other similar agreement (each, an "Acquisition Agreement") related to any
Alternative Transaction. Notwithstanding the foregoing, if, prior to the
approval of the Merger Agreement by the stockholders of the Company, the Board
of Directors determines in the exercise of its fiduciary duties, after it has
received a Superior Proposal (as hereinafter defined) in compliance with the
terms of the Merger Agreement, that it may (subject to this and the following
sentences) inform the stockholders of the Company that it no longer believes
that the Merger is advisable and no longer recommends approval (a "Subsequent
Determination") and enter into an Acquisition Agreement with respect to a
Superior Proposal, but only at a time that is after the fifth day following
delivery to Parent of written notice advising Parent that the Board of Directors
has received a Superior Proposal. Such written notice must specify the material
terms and conditions of such Superior Proposal, identify the person making such
Superior Proposal and state that the Board of Directors intends to make, or is
considering making, a Subsequent Determination. During the five day period, the
Company is obligated to provide an opportunity for Parent to propose such
adjustments to the terms and conditions of the Merger Agreement as would enable
the Board of Directors to proceed with its recommendation to the stockholders of
the Company without a Subsequent Determination. A "Superior Proposal" means any
proposal (on its most recently amended or modified terms, if amended or
modified) made by any person other than Parent or its affiliates to enter into
an Alternative Transaction which the Board of Directors determines in its good
faith judgment to be more favorable to the stockholders of the Company than the
Merger, taking into account all relevant factors, including, but not limited to,
whether, in the good faith judgment of the Board of Directors, after
consultation with the Company's independent
17
<PAGE> 20
financial advisor, the third party is reasonably able to finance the
transaction, and any proposed changes to the Merger Agreement that may be
proposed by Parent in response to such Alternative Transaction.
Designation of Directors. The Merger Agreement provides that, promptly
upon the purchase by Purchaser of more than a majority of the outstanding Shares
pursuant to the Offer, and from time to time thereafter, Purchaser will be
entitled to designate up to such number of directors, rounded up to the next
whole number, on the Board of Directors as shall give Purchaser representation
on the Board of Directors equal to a majority of the Board of Directors, and
that the Company will amend or cause to be amended its Bylaws as necessary to
effect such representation and will, at such time, promptly take all action
necessary to cause the Purchaser's designees to be so elected or appointed,
including either increasing the size of the Board of Directors or securing the
resignations of incumbent directors or both. The Company has also agreed to use
its reasonable best efforts to cause persons designated by the Purchaser to
constitute the same percentage as is on the Board of Directors on each committee
of the Board of Directors.
Following the election or appointment of the Purchaser's designees and
prior to the Effective Time, the concurrence of a majority of the directors of
the Company then in office who are neither designated by the Purchaser nor are
employees of the Company (the "Disinterested Directors") shall be required to
authorize any amendment, or waiver of any term or condition, of the Merger
Agreement or the certificate of incorporation or bylaws of the Company, any
termination of the Merger Agreement by the Company, any extension by the Company
of the time for the performance of any of the obligations or other acts of the
Purchaser or waiver or assertion of any of the Company's rights thereunder, and
any other consent or action by the Board of Directors with respect to the Merger
Agreement. The number of Disinterested Directors shall not be less than two.
Access to Information; Confidentiality. From the date of the Merger
Agreement until the Effective Time, upon reasonable, prior notice from Parent,
the Company will give Parent and the Purchaser, their counsel, financial
advisors, auditors and other authorized representatives reasonable access during
normal business hours and without disrupting the orderly conduct of business by
the Company and its subsidiaries to the offices, properties, books and records
of the Company and its subsidiaries, will furnish to Parent and the Purchaser,
their counsel, financial advisors, auditors and other authorized representatives
such financial and operating data and other information as such persons may
reasonably request and will instruct the Company's employees, counsel and
financial advisors to reasonably cooperate with Parent and the Purchaser in
their investigation of the business of the Company and its subsidiaries.
The Merger Agreement further provides that Parent and the Purchaser will
hold, and will cause their respective officers, directors, employees,
accountants, lenders, counsel, consultants, advisors and agents to hold, in
confidence, all confidential documents and information concerning the Company
and its subsidiaries furnished to Parent or the Purchaser in connection with the
transactions contemplated by the Merger Agreement in accordance with the
confidentiality agreement, dated on or about March 31, 1999, between Parent and
the Company.
Other Offers. The Merger Agreement provides that the Company and its
subsidiaries will not, nor shall the Company authorize or permit any officers,
directors, employees, representatives or agents of the Company and its
subsidiaries to, directly or indirectly, (i) take any action to solicit,
initiate or encourage any Acquisition Proposal or (ii) engage in negotiations
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 that may be considering
making, or has made, an Acquisition Proposal; provided, however, that nothing
contained in the Merger Agreement prevents the Company or the Board of Directors
from (a) furnishing nonpublic information to, or affording access to the
properties, books or records of the Company or any of its subsidiaries to, or
entering into discussions or an agreement with, any person in connection with an
unsolicited Acquisition Proposal by such person, if and only to the extent that
(x) the Company's Board of Directors determines in good faith after consultation
with outside legal counsel that such action is necessary to comply with their
fiduciary duties to the stockholders of the Company under applicable law, (y)
prior to furnishing any such nonpublic information to, or entering into
discussions or negotiations with, such person, the Board of Directors receives
from such person an executed confidentiality agreement
18
<PAGE> 21
with customary terms and (z) the Board of Directors concludes in the exercise of
its fiduciary duties that the Acquisition Proposal is a Superior Proposal, or
(b) taking and disclosing to the Company's stockholders any position, and making
any related filings with the Commission, as required by Rules l4e-2 and 14d-9
under the Exchange Act with respect to any Alternative Transaction that is a
tender offer; provided, that the Board of Directors shall not recommend that the
stockholders of the Company tender their Shares in connection with any such
tender offer unless the Board of Directors by majority vote determines in good
faith that failing to take such action would constitute a breach of the Board of
Directors' fiduciary duties under applicable law. The Company will promptly
notify Parent after receipt of any Acquisition Proposal or 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 that has made an Acquisition Proposal and will keep
Parent fully informed of the status and details of any such Acquisition
Proposal, indication or request. The Company has agreed not to take any action
with respect to such proposal or inquiry for five days after delivery of such
notice to Parent and will negotiate exclusively and in good faith with Parent
for such five day period to make such adjustments in the terms and conditions of
the Merger Agreement as would enable Company to proceed with the transactions
contemplated therein on such adjusted terms.
Directors' and Officers' Indemnification and Insurance. The Merger
Agreement provides that the certificate of incorporation of the Surviving
Corporation shall contain provisions no less favorable with respect to
indemnification than are set forth in the (Second) Restated Certificate of
Incorporation of the Company and these provisions are not to be amended,
repealed or otherwise modified for a period of six years from the Effective Time
in any manner that would affect materially adversely the rights thereunder of
individuals who at the Effective Time were directors or officers of the Company,
with respect to any act or omission in their capacity as an officer or director
of the Company occurring on or prior to the Effective Time, unless such
modification shall be required by law.
Parent has agreed to maintain the current policies of directors' and
officers' liability insurance maintained by the Company (or substitute policies
with substantially the same coverage and containing substantially comparable
terms and conditions) for at least six years after the Effective Time, with
respect to matters occurring prior to the Effective Time; provided that Parent
will not be required to expend more than an amount per year equal to 400% of
current annual premiums paid by the Company to maintain or procure such
coverage.
The Company will, to the fullest extent permitted under applicable law and
regardless of whether the Merger becomes effective, indemnify and hold harmless,
and after the Effective Time, the Surviving Corporation shall, to the fullest
extent permitted under applicable law, indemnify and hold harmless each present
and former director and officer of the Company (collectively, the "Indemnified
Parties") against all costs and expenses (including reasonable attorneys' fees),
judgments, fines, losses, claims, damages, liabilities and settlement amounts
paid in connection with any claim, action, suit, proceeding or investigation
(whether arising before or after the Effective Time), whether civil, criminal,
administrative or investigative, arising out of or directly pertaining to any
action or omission in their capacity as an officer or director of the Company
occurring on or prior to the Effective Time, whether asserted or claimed prior
to, at or after the Effective Time, for a period of six years after the
Effective Time, in each case to the fullest extent permitted under applicable
law (and shall pay any expenses in advance of the final disposition of such
action or proceeding to each Indemnified Party to the fullest extent permitted
under applicable law, upon receipt from the Indemnified Party to whom expenses
are advanced of an undertaking to repay such advances required under applicable
law). In the event of any such claim, action, suit, proceeding or investigation,
(i) the Company or the Surviving Corporation, as the case may be, have agreed to
pay the reasonable fees and expenses of counsel selected by the Indemnified
Parties promptly after statements therefor are received and (ii) the Company and
the Surviving Corporation shall cooperate in the defense of any such matter. In
the event that any claim for indemnification is asserted or made within such
six-year period, all rights to indemnification in respect of such claim shall
continue until the final disposition of such claim.
Conduct of Business Pending the Merger. Pursuant to the Merger Agreement,
the Company and its subsidiaries have agreed to conduct their business in the
ordinary course consistent with past practice and to
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use their reasonable efforts to preserve intact their business organizations and
relationships with third parties and to keep available the services of their
present officers and employees.
The Company and its subsidiaries will also refrain from taking various
actions without Parent's consent, which consent shall not be unreasonably
delayed, conditioned or withheld, pending consummation of the Merger. These
limitations cover, among other things (subject to certain limitations): changes
in governing documents; changes in capital stock; declaration or payment of
dividends or other distributions; increases in the compensation or benefits of
directors, officers and employees (except to the extent required under existing
plans); adopting a plan of complete or partial dissolution; incurring debt above
specified levels or entering into transactions other than in the ordinary course
of business consistent with past practice; making capital expenditures beyond
specified limits; entering into certain transactions; making any material tax
election; changing any accounting principles in a material manner; and paying or
discharging any claims, liabilities or obligations other than in the ordinary
course of business consistent with past practice or as required pursuant to
contracts or agreements existing as of the date of the Merger Agreement.
Employee Benefits Matters. As of the Effective Time, the Surviving
Corporation will employ all employees of the Company who desire employment. With
respect to each individual who is employed by the Surviving Corporation as of
the Effective Time, Parent may, at its option, either (i) cause the Surviving
Corporation to continue to provide for such individual's participation in each
medical, surgical, hospitalization and other "welfare" plan, fund or program
(within the meaning of Section 3(1) of ERISA) of the Company on the same terms
as immediately prior to the Effective Time or (ii) permit such individual to
participate in an employee welfare plan sponsored by Parent or any affiliate of
Parent (a "Purchaser Plan") which provides substantially similar benefits as
prior to the Effective Time on the same terms and to the same extent as
similarly situated employees of Parent's Lithonia Lighting unit; provided that
if Parent elects to permit an employee to participate in a Purchaser Plan
pursuant to clause (ii) above, such employee will (A) not be subject to any
preexisting condition provision or waiting period under any Purchaser Plan which
provides medical, dental, vision or prescription drug benefits and (B) to the
extent permitted by applicable law, be credited with prior service with the
Company for all purposes related to eligibility and vesting under any Purchaser
Plan in which such employee participates.
With respect to any employee of the Company as of the date of the Merger
Agreement who is not employed by the Surviving Corporation as of the Effective
Time, the Surviving Corporation will be responsible for providing continuation
coverage to such employee (and his or her dependents), as required under the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"). Further, with
respect to any former employee of the Company (or their dependents) who is
receiving continuation coverage under COBRA as of the Effective Time, the
Surviving Corporation will maintain such continuation coverage in compliance
with COBRA.
Parent has agreed to cause the Surviving Corporation to continue each of
the following plans and agreements for the remaining term thereof: (i) the
Company's Second Amended and Restated Supplemental Executive Retirement Plan
(the "SERP"); and (ii) certain Termination Benefit Agreements and Employment
Agreements between the Company and its executive officers; provided that the
Surviving Corporation shall not be obligated to make contributions to the SERP
or to permit employees to defer compensation into the SERP for more than two
years after the Effective Time. Parent has also agreed to cause the Surviving
Corporation to continue for at least two years, or offer a comparable plan to
the Company's bonus plans and educational assistance program. Any outstanding
rights under the following plans will be fully satisfied in connection with the
transactions contemplated by the Merger Agreement and, upon satisfaction of
those rights, the plans shall be terminated: (i) the Company's Employee Stock
Option (Purchase) Plan; and (ii) the Company's Performance Award Program.
Under the Merger Agreement, Parent has agreed to assume and honor, and
cause the Surviving Corporation to assume and to honor, in accordance with their
terms all employment, severance and other compensation agreements and
arrangements listed in the Disclosure Schedule delivered pursuant to the Merger
Agreement.
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<PAGE> 23
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto including
representations and warranties by the Company concerning: the Company's
capitalization; required filings and consents; the Board of Directors' approval
of the Merger Agreement and the transactions contemplated thereby (including
approvals so as to render inapplicable thereto the limitation on business
combinations contained in Section 203 of the DGCL); Commission filings and
financial statements; absence of certain changes or events; compliance with law;
absence of litigation; employee benefit plans; environmental matters; tax
matters; real estate matters; intellectual property; Year 2000 issues; and
brokers. Some of the representations are qualified by a material adverse effect
clause. "Material Adverse Effect," for the purposes of the Merger Agreement and
this Offer to Purchase, means an effect that (A) is materially adverse to the
financial condition, business, assets or results of operations of the Company
and its subsidiaries taken as a whole, excluding in all cases: (i) events or
conditions generally affecting the industry in which the Company and its
subsidiaries operate or arising from changes in general business or economic
conditions; (ii) any change or effect resulting from any change in law or
generally accepted accounting principles, which generally affect entities such
as the Company; and (iii) any change or effect resulting from the execution
and/or announcement of the Merger Agreement or compliance by the Company with
the terms of the Merger Agreement or any agreement contemplated by the Merger
Agreement, or (B) would prevent or materially delay the consummation of the
Offer or the Merger.
Conditions of the Merger. Under the Merger Agreement, the respective
obligations of Parent, the Purchaser and the Company to effect the Merger shall
be subject to the satisfaction at or prior to the Effective Time of the
following conditions: (i) the Merger Agreement and the transactions contemplated
hereby shall have been approved and adopted by the stockholders of the Company,
to the extent required by, and in accordance with, DGCL and the Company's
(Second) Restated Certificate of Incorporation and Bylaws; (ii) no governmental
entity shall have enacted, issued, promulgated, enforced or entered any law,
rule, regulation, executive order, decree, injunction or other order (whether
temporary, preliminary or permanent) which is then in effect and has the effect
of making the Merger illegal or otherwise restricting, preventing or prohibiting
consummation of the Merger; (iii) Purchaser shall have purchased all Shares
validly tendered and not withdrawn pursuant to the Offer; and (iv) all actions
by or in respect of or filings with any governmental body, agency, official or
authority required shall have been obtained or made.
Termination Events. The Merger Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time (notwithstanding any
approval thereof by the stockholders of the Company, to the extent required by
DGCL):
(a) by mutual written consent of Parent and the Company;
(b) by either the Company or Parent, if the Effective Time shall not
have occurred on or before December 31, 1999 (provided that the right to
terminate the Merger Agreement under this provision will not be available
to any party whose breach of the Merger Agreement has been the primary
cause of, or resulted in, the failure of the Effective Time to occur on or
before such date);
(c) by either the Company or Parent, if any governmental entity shall
have issued an order, decree or ruling or taken any other action (which
order, decree, ruling or other action the parties shall use their
reasonable efforts to lift), in each case permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by the
Merger Agreement and such order, decree, ruling or other action shall have
become final and non-appealable;
(d) by Parent:
(i) if the Purchaser terminates the Offer without the Purchaser
having purchased any Shares by reason of the failure to satisfy any
condition set forth in Annex I to the Merger Agreement;
(ii) if the Board of Directors (A) fails to include in the Schedule
14D-9 or the Company Proxy Statement its recommendation without
modification or qualification that the stockholders of the Company
accept the Offer and approve the Merger Agreement and the Merger, (B)
approves or recommends any other Acquisition Proposal, (C) withdraws,
modifies or qualifies its recommenda-
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<PAGE> 24
tion of the Offer, the Merger Agreement or the Merger in a manner
adverse to the interests of Parent or the Purchaser or (D) resolves to
do any of the foregoing; or
(e) by the Company:
(i) if the Purchaser fails to commence the Offer within 5 business
days following the date of the initial public announcement of the Offer;
(ii) if the Purchaser terminates the Offer without having accepted
any Shares for payment by reason of the failure to satisfy any condition
set forth in Annex I to the Merger Agreement (unless such failure
results from the failure of the Company to perform in any material
respect any of its covenants or agreements contained in the Merger
Agreement or the material breach by the Company of any of its
representations and warranties contained in the Merger Agreement);
(iii) if the Purchaser fails to pay for Shares within 90 days
following the commencement of the Offer, unless the failure to pay for
Shares is the result of the failure of the Company to perform in any
material respect any of its covenants or agreements contained in the
Merger Agreement or the material breach by the Company of any
representation or warranties contained in the Merger Agreement;
(iv) if any of Parent's or the Purchaser's representations or
warranties contained in the Merger Agreement are not true and correct in
any material respect, as if such representation or warranty was made as
of such time on or after the date of the Merger Agreement; or Parent or
the Purchaser fails to perform in any material respect any obligation or
to comply in any material respect with any agreement or covenant of
Parent or the Purchaser to be performed or complied with by it under the
Merger Agreement and which, in any such case, is not cured within 5
business days following receipt of notice thereof; or
(v) if, prior to the purchase of Shares pursuant to the Offer and
after it has received a Superior Proposal in compliance with the Merger
Agreement, the Company's Board of Directors determines that it is
obligated by its fiduciary duties under applicable law to terminate the
Merger Agreement, provided that such termination will not be deemed
effective under the Merger Agreement until the Company pays the
Termination Fee (as defined below) and reimburses certain of Parent's
and the Purchaser's expenses.
Fees and Expenses. If (i) Parent terminates the Merger Agreement because
the Board of Directors (A) fails to include its recommendation of the Offer or
the Merger in the Schedule 14D-9 or Company Proxy Statement, (B) approves or
recommends any other Acquisition Proposal, (C) withdraws, modifies or qualifies
its recommendation of the Offer or the Merger in a manner adverse to the
interests of Parent or the Purchaser or (D) resolves to do any of the foregoing,
or (ii) the Company terminates the Merger Agreement prior to the purchase of
Shares pursuant to the Offer and after it has received a Superior Proposal in
compliance with the Merger Agreement because its Board of Directors determines
that such termination is obligated by its fiduciary duties under applicable law,
then in each such case the Company has agreed to pay to Parent and the
Purchaser, within five business days of such termination, a fee, in cash, in an
amount of $20,000,000 (the "Termination Fee"). In addition, the Company has
agreed to reimburse Parent, the Purchaser and their affiliates (not later than
five business days after submission of valid statements therefor) for all actual
documented out-of-pocket fees and expenses incurred by any of them or on their
behalf in connection with the Offer and the Merger and the consummation of all
transactions contemplated by the Merger Agreement (including, without
limitation, fees and disbursements payable to financing sources, investment
bankers, counsel to Purchaser or Parent or any of the foregoing, and
accountants) up to a maximum amount of $3 million.
If within 12 months after termination of the Merger Agreement, the Company
consummates an Acquisition Proposal with a person other than Parent or the
Purchaser, then immediately prior to, and as a condition of, consummation of
such transaction the Company shall pay to Parent upon demand an amount in cash
equal to the Termination Fee to reimburse Parent for its time, expense and lost
opportunity costs of pursuing the Merger, unless the Termination Fee is payable
or has been paid in accordance with the Merger
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<PAGE> 25
Agreement or if the Merger Agreement is terminated by the Company as a result of
Parent's failure in any material respect to perform its obligations under the
Merger Agreement or as a result of a material breach of any of its
representations or a warranties.
12. PURPOSE OF THE OFFER; THE MERGER; PLANS FOR THE COMPANY. The purpose
of the Offer is to acquire control of, and the entire equity interest in, the
Company. The Offer is being made pursuant to the Merger Agreement. As promptly
as practicable following the purchase of Shares pursuant to the Offer and after
satisfaction or waiver of all conditions to the Merger set forth in the Merger
Agreement, the Purchaser intends to acquire the remaining equity interest in the
Company not acquired in the Offer by consummating the Merger.
Vote Required to Approve the Merger. The Board of Directors has approved
and adopted the Merger and the Merger Agreement in accordance with the DGCL. The
Board of Directors will be required to submit the Merger Agreement to the
Company's stockholders for approval at a stockholders' meeting convened for that
purpose in accordance with the DGCL. The Merger must be approved by the
affirmative vote of the holders of at least a majority of the outstanding
Shares. The Minimum Condition requires that there shall have been validly
tendered and not properly withdrawn, together with the Shares owned, directly or
indirectly, by Parent, a majority of the Shares (determined on a fully diluted
basis). Upon consummation of the Offer and assuming the Minimum Condition is
satisfied, the Purchaser will own sufficient Shares to enable it to effect
stockholder approval of the Merger with the affirmative vote of the Shares owned
by it. The Purchaser intends to exercise its ability in such case to approve the
Merger without the affirmative vote of any other stockholder. The Board of
Directors has approved the Merger Agreement and the transactions contemplated
thereby, so as to render inapplicable the limitation on business combinations
contained in Section 203 of the DGCL.
Pursuant to the Merger Agreement, the Company has agreed, if and to the
extent permitted by law, at the request of the Purchaser and subject to the
terms of the Merger Agreement, to take all necessary and appropriate actions to
cause the Merger to become effective as soon as reasonably practicable after the
purchase of the Shares pursuant to the Offer, without a meeting of the Company's
stockholders in accordance with Section 253 of the DGCL.
THE OFFER IS CONDITIONED UPON THE MINIMUM CONDITION BEING SATISFIED.
THIS OFFER TO PURCHASE DOES NOT CONSTITUTE A SOLICITATION OF A PROXY,
CONSENT OR AUTHORIZATION FOR OR WITH RESPECT TO THE ANNUAL MEETING OR ANY
SPECIAL MEETING OF THE COMPANY'S STOCKHOLDERS OR ANY ACTION IN LIEU THEREOF. ANY
SUCH SOLICITATION WHICH THE PURCHASER MAY MAKE WILL BE MADE ONLY PURSUANT TO
SEPARATE PROXY MATERIALS IN COMPLIANCE WITH THE REQUIREMENTS OF SECTION 14(A) OF
THE EXCHANGE ACT.
Appraisal Rights in Connection with the Offer. Stockholders do not have
appraisal rights as a result of the Offer. However, if the Merger is
consummated, stockholders of the Company at the time of the Merger who do not
vote in favor of the Merger will have the right under the DGCL to dissent and
demand appraisal of, and receive payment in cash of the fair value of, their
Shares outstanding immediately prior to the Effective Time in accordance with
Section 262 of the DGCL.
Under the DGCL, 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 such merger or similar business combination)
and to receive payment of such fair value in cash. Any such judicial
determination of the fair value of such Shares could be based upon
considerations other than or in addition to the price paid in the Offer and 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 Merger Consideration per Share.
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<PAGE> 26
In addition, several decisions by Delaware courts have held that in certain
circumstances a controlling stockholder of a corporation involved in a merger
has a fiduciary duty to other stockholders that requires that the merger be fair
to other stockholders. In determining whether a merger is fair to minority
stockholders, Delaware courts have considered, among other things, the type and
amount of the consideration to be received by the other 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.
THE FOREGOING SUMMARY OF THE RIGHTS OF OBJECTING STOCKHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
STOCKHOLDERS DESIRING TO EXERCISE ANY AVAILABLE APPRAISAL RIGHTS. THE
PRESERVATION AND EXERCISE OF APPRAISAL RIGHTS REQUIRE STRICT ADHERENCE TO THE
APPLICABLE PROVISIONS OF THE DGCL.
The foregoing description of the DGCL is not necessarily complete and is
qualified in its entirety by reference to the DGCL.
Rule 13e-3. The Commission has adopted Rule 13e-3 under the Exchange Act
which is applicable to certain "going private" transactions and which may under
certain circumstances be applicable to the Merger following the purchase of
Shares pursuant to the Offer in which the Purchaser seeks to acquire any
remaining Shares. Rule 13e-3 should not be applicable to the Merger if the
Merger is consummated within one year after the expiration or termination of the
Offer and the price paid in the Merger is not less than the per Share price paid
pursuant to the Offer. However, in the event that the Purchaser is deemed to
have acquired control of the Company pursuant to the Offer and if the Merger is
consummated more than one year after completion of the Offer or an alternative
acquisition transaction is effected whereby stockholders of the Company receive
consideration less than that paid pursuant to the Offer, in either case at a
time when the Shares are still registered under the Exchange Act, the Purchaser
may be required to comply with Rule 13e-3 under the Exchange Act. If applicable,
Rule 13e-3 would require, among other things, that certain financial information
concerning the Company and certain information relating to the fairness of the
Merger or such alternative transaction and the consideration offered to minority
stockholders in the Merger or such alternative transaction, be filed with the
Commission and disclosed to stockholders prior to consummation of the Merger or
such alternative transaction. The purchase of a substantial number of Shares
pursuant to the Offer may result in the Company being able to terminate its
Exchange Act registration. See Section 14. If such registration were terminated,
Rule 13e-3 would be inapplicable to any such future Merger or such alternative
transaction.
Plans for the Company. Subject to certain matters described below, it is
currently expected that, following the Merger, the business and operations of
the Company will generally continue as they are currently being conducted.
Parent intends to conduct the Company's operations as a part of its current
Lighting division and to cause the Company's operations to continue to be run
and managed by, among others, certain of the Company's existing executive
officers. Parent believes that the Company conducts complementary operations and
has complementary products and customers, and thus does not anticipate any
significant Merger-related terminations or facilities closings. Parent will,
however, continue to evaluate all aspects of the business, operations,
capitalization and management of the Company during the pendency of the Offer
and after the consummation of the Offer and the Merger and will take such
further actions as it deems appropriate under the circumstances then existing.
Parent intends to seek additional information about the Company during this
period. Thereafter, Parent intends to review such information as part of a
comprehensive review and integration of the Company's business, operations,
capitalization and management.
Except as described in this Offer to Purchase, none of the Purchaser,
Parent nor, to the best knowledge of the Purchaser and Parent, any of the
persons listed on Schedule I has any present plans or proposals that would
relate to or result in an extraordinary corporate transaction such as a merger,
reorganization or liquidation involving the Company or any of its subsidiaries
or a sale or other transfer of a material amount of
24
<PAGE> 27
assets of the Company or any of its subsidiaries, any material change in the
capitalization or dividend policy of the Company or any other material change in
the Company's corporate structure or business or the composition of the Board of
Directors or management.
13. DIVIDENDS AND DISTRIBUTIONS. If the Company should, on or after the
date of the Merger Agreement, split, combine or otherwise change the Shares or
its capitalization, or disclose that it has taken any such action, then without
prejudice to the Purchaser's rights under Section 15, the Purchaser may make
such adjustments to the purchase price and other terms of the Offer as it deems
appropriate to reflect such split, combination or other change.
If, on or after the date of the Merger Agreement, the Company should
declare or pay any cash or stock dividend or other distribution on, or issue any
rights with respect to, the Shares that is payable or distributable to
stockholders of record on a date prior to the transfer to the name of the
Purchaser or the nominee or transferee of the Purchaser on the Company's stock
transfer records of such Shares that are purchased pursuant to the Offer, then
without prejudice to the Purchaser's rights under Section 15, (i) the purchase
price payable per Share by the Purchaser pursuant to the Offer will be reduced
to the extent any such dividend or distribution is payable in cash and (ii) any
non-cash dividend, distribution (including additional Shares) or right received
and held by a tendering stockholder shall be required to be promptly remitted
and transferred by the tendering stockholder to the Depositary for the account
of the Purchaser, accompanied by appropriate documentation of transfer. Pending
such remittance or appropriate assurance thereof, the Purchaser will, subject to
applicable law, be entitled to all rights and privileges as owner of any such
non-cash dividend, distribution or right and may withhold the entire purchase
price or deduct from the purchase price the amount or value thereof, as
determined by the Purchaser in its sole discretion.
Pursuant to the terms of the Merger Agreement, the Company is prohibited
from taking any of the actions described in the preceding paragraphs except as
permitted, required or specifically contemplated by the Merger Agreement and
nothing herein shall constitute a waiver by Parent or the Purchaser of any of
its rights under the Merger Agreement or a limitation of remedies available to
Parent or the Purchaser for any breach of the Merger Agreement, including
termination thereof.
14. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES, STOCK EXCHANGE
LISTING AND EXCHANGE ACT REGISTRATION. The purchase of Shares pursuant to the
Offer will reduce the number of Shares that might otherwise trade publicly and
will reduce the number of holders of Shares, which could adversely affect the
liquidity and market value of the remaining Shares held by the public. Following
the purchase of Shares pursuant to the Offer, at least a majority of the
outstanding Shares will be owned by Purchaser.
According to the NYSE's published guidelines, the NYSE would consider
delisting the Shares if, among other things, the number of record holders of at
least 100 Shares should fall below 1,200, the number of publicly held Shares
(exclusive of holdings of officers, directors and their families and other
concentrated holdings of 10% or more ("NYSE Excluded Holdings")) should fall
below 600,000 or the aggregate market value of publicly held Shares (exclusive
of NYSE Excluded Holdings) should fall below $5,000,000. If, as a result of the
purchase of Shares pursuant to the Offer or otherwise, the Shares no longer meet
the requirements of the NYSE for continued listing and the listing of the Shares
is discontinued, the market for the Shares could be adversely affected.
If the NYSE were to delist the Shares, it is possible that the Shares would
continue to trade on another securities exchange or in the over-the-counter
market and that price or other quotations would be reported by such exchange or
through the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") or other sources. The extent of the public market therefor and
the availability of such quotations would depend, however, upon such factors as
the number of stockholders and/or the aggregate market value of such securities
remaining at such time, the interest in maintaining a market in the Shares on
the part of the securities firms, the possible termination of registration under
the Exchange Act as described below and other factors. The Purchaser cannot
predict whether the reduction in the number of Shares that might otherwise trade
publicly would have an adverse or beneficial effect on the market price for or
marketability of the Shares or whether it would cause future market prices to be
greater or less than the Offer price.
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The Shares are currently registered under the Exchange Act. The purchase of
Shares pursuant to the Offer may result in the Shares becoming eligible for
deregistration under the Exchange Act. Registration of the Shares may be
terminated upon application of the Company to the Commission if the Shares are
not listed on a national securities exchange and there are fewer than 300 record
holders. The termination of the registration of the Shares under the Exchange
Act would substantially reduce the information required to be furnished by the
Company to holders of the Shares and would make certain provisions of the
Exchange Act, such as the short-swing profit recovery provisions of Section
16(b), the requirement of furnishing a proxy statement in connection with
stockholders' meetings and the requirements of Rule 13e-3 under the Exchange Act
with respect to "going private" transactions, no longer applicable to the
Shares. Furthermore, "affiliates" of the Company and persons holding "restricted
securities" of the Company may be deprived of the ability to dispose of the
securities pursuant to Rule 144 under the Securities Act of 1933, as amended.
If registration of the Shares under the Exchange Act were terminated, the
Shares would no longer be eligible for NASDAQ reporting.
The Shares are currently "margin securities" under the rules 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 such Shares for the purpose of buying, carrying, or trading in
securities. Depending upon factors similar to those described above with respect
to listing and market quotations, it is possible that, following the Offer, the
Shares might no longer constitute "margin securities" for the purposes of the
Federal Reserve Board's margin regulations and therefore could no longer be used
as collateral for purpose credits made by brokers. In any event, the Shares will
cease to be "margin securities" if registration of the Shares under the Exchange
Act is terminated.
15. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other term or
provision of the Offer, the Purchaser will not be required to accept for payment
or, subject to any applicable rules and regulations of the Commission, to pay
for any Shares tendered pursuant to the Offer and may postpone the acceptance
for payment or, subject to any applicable rules and regulations of the
Commission, payment for any Shares tendered pursuant to the Offer, and, in its
good faith discretion, may amend or terminate the Offer, to the extent provided
in the Merger Agreement, unless the Minimum Condition shall have been satisfied
or waived in accordance with the terms thereof. Furthermore, notwithstanding any
other term or provision of the Offer, the Purchaser will not be required to
accept for payment or, subject as aforesaid, to pay for any Shares not
theretofore accepted for payment or paid for, and may postpone the acceptance
for payment or, subject to any applicable rules and regulations of the
Commission, payment for any Shares tendered pursuant to the Offer, and, in its
good faith discretion, may terminate or amend the Offer, to the extent provided
in the Merger Agreement, if, at any time on or after June 20, 1999, and before
the acceptance of such Shares for payment or, subject to any applicable rules
and regulations of the Commission, the payment therefor, any of the following
conditions exists:
(a) an order shall have been entered (or any governmental entity shall
have threatened in writing to seek an order) in any action or proceeding
before any federal or state court or governmental agency or other
regulatory body or a permanent injunction by any federal or state court of
competent jurisdiction in the United States shall have been issued and
remain in effect (i) making illegal the purchase of, or payment for, any
Shares by the Purchaser, Parent or any of Parent's other subsidiaries; (ii)
otherwise preventing the consummation of the Offer or the Merger; (iii)
imposing limitations on the ability of the Purchaser, Parent or any of
Parent's other subsidiaries to exercise effectively full rights of
ownership of any Shares, including, without limitation, the right to vote
any Shares acquired by Purchaser pursuant to the Offer on all matters
properly presented to the Company's stockholders; (iv) prohibiting or
materially limiting the ownership or operation by the Company or any of its
subsidiaries, or Parent or any of its subsidiaries, of all or any material
portion of the business or assets of the Company and its subsidiaries, or
Parent and its subsidiaries, or compelling Parent or any of its
subsidiaries to dispose of all or any material portion of the businesses or
assets of the Company or its subsidiaries or Parent or its subsidiaries, as
a result of transactions contemplated by the Offer or the Merger Agreement;
or (v) requiring divestiture by Parent or the Purchaser of any Shares;
26
<PAGE> 29
(b) there shall have been any federal or state statute, rule or
regulation enacted, enforced, promulgated, amended or made applicable to
the Company, the Purchaser, Parent or any other affiliate of Parent or the
Company or the Offer or the Merger on or after June 25, 1999 by any
governmental entity that could reasonably be expected to result, directly
or indirectly, in any of the consequences referred to in clauses (i)
through (v) of paragraph (a) above;
(c) (i) the Company shall have breached or failed to perform in any
material respect any of its covenants or agreements under the Merger
Agreement, which breach shall not have been cured or waived within the
earlier of (A) five business days after receipt of notice thereof by the
Company or (B) two business days prior to the date on which the Offer
expires; provided that if notice of such breach is received by the Company
within such two business day period, the Purchaser will extend the Offer by
at least two business days, or (ii) any of the representations and
warranties of the Company set forth in the Merger Agreement (disregarding
any qualifications contained therein regarding materiality or Material
Adverse Effect) shall not be true when made or at any time prior to
consummation of the Offer as if made at and as of such time, except to the
extent that such breach would not be reasonably likely to have a Material
Adverse Effect;
(d) the Merger Agreement is terminated in accordance with its terms or
the Offer is terminated with the consent of the Company;
(e) any event occurs that is reasonably likely to result in a Material
Adverse Effect;
(f) (i) the Board of Directors or any committee thereof withdraws or
modifies in a manner adverse to Parent or the Purchaser the approval or
recommendation of the Offer, the Merger or the Merger Agreement, or
approves or recommends any Alternative Transaction, (ii) any person or
group enters into a definitive agreement or an agreement in principle with
the Company with respect to an Alternative Transaction or (iii) the Board
of Directors or any committee thereof resolves to do any of the foregoing;
(g) any waiting periods under the HSR Act applicable to the purchase
of Shares pursuant to the Offer shall not have expired or been terminated;
or
(h) any consent required to be filed or obtained in connection with
the Offer, the failure of which to be so filed or obtained would have a
Material Adverse Effect, shall not have been obtained.
16. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS.
General. Except as set forth below, based upon its examination of publicly
available filings by the Company with the Commission and other publicly
available information concerning the Company, neither the Purchaser nor Parent
is aware of any licenses or other regulatory permits that appear to be material
to the business of the Company and its subsidiaries, taken as a whole, that
might be adversely affected by the Purchaser's acquisition of Shares (and the
indirect acquisition of the stock of the Company's subsidiaries) as contemplated
herein, or of any filings, approvals or other actions by or with any domestic
(Federal or state), foreign or supranational governmental authority or
administrative or regulatory agency that would be required prior to the
acquisition of Shares (or the indirect acquisition of the stock of the Company's
subsidiaries) by the Purchaser pursuant to the Offer as contemplated herein.
Should any such approval or other action be required, it is the Purchaser's
present intention to seek such approval or action. However, the Purchaser does
not presently intend to delay the purchase of Shares tendered pursuant to the
Offer pending the receipt of any such approval or the taking of any such action
(subject to the Purchaser's right to delay or decline to purchase Shares if any
of the conditions in Section 15 shall have occurred). There can be no assurance
that any such approval or other action, if needed, would be obtained without
substantial conditions or that adverse consequences might not result to the
business of the Company, Parent or the Purchaser or that certain parts of the
businesses of the Company, Parent or the Purchaser might not have to be disposed
of or held separate or other substantial conditions complied with in order to
obtain such approval or other action or in the event that such approval was not
obtained or such other action was not taken, any of which could cause the
Purchaser to elect to terminate the Offer without purchasing the Shares
thereunder. The Purchaser's obligation under the Offer to accept for payment and
pay for Shares is subject to certain conditions, including conditions relating
to the legal matters discussed in this Section 16.
27
<PAGE> 30
State Takeover Laws. A number of states have adopted takeover laws and
regulations which purport to varying degrees to be applicable to attempts to
acquire securities of corporations which are incorporated in such states or
which have or whose business operations have substantial economic effects in
such states, or which have substantial assets, security holders, principal
executive offices or principal places of business therein. To the extent that
certain provisions of certain of these state takeover statutes purport to apply
to the Offer, the Purchaser believes that such laws conflict with federal law
and constitute an unconstitutional burden on interstate commerce. In 1982, the
Supreme Court of the United States, in Edgar v. Mite Corp., invalidated on
constitutional grounds the Illinois Business Takeovers Act, which as a matter of
state securities law made takeovers of corporations meeting certain requirements
more difficult, and the reasoning in such decision is likely to apply to certain
other state takeover statutes. However, in 1987, in CTS Corp. v. Dynamics Corp.
of America, the Supreme Court of the United States held that the State of
Indiana could, as a matter of corporate law and in particular those aspects of
corporate law concerning corporate governance, constitutionally disqualify a
potential acquiror from voting on the affairs of a target corporation without
the prior approval of the remaining stockholders, provided that such laws were
applicable only under certain conditions. Subsequently, in TLX Acquisition Corp.
v. Telex Corp., a federal district court in Oklahoma ruled that the Oklahoma
statutes were unconstitutional insofar as they applied 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.
Except as described herein, the Purchaser has not attempted to comply with
any state takeover statutes in connection with the Offer. The Purchaser reserves
the right to challenge the validity or applicability of any state law allegedly
applicable to the Offer and nothing in this Offer to Purchase nor any action
taken in connection herewith is intended as a waiver of that right. In the event
that any state takeover statute is found applicable to the Offer, the Purchaser
might be unable to accept for payment or purchase Shares tendered pursuant to
the Offer or be delayed in continuing or consummating the Offer. In such case,
the Purchaser may not be obligated to accept for purchase or pay for, any Shares
tendered. See Section 15.
In connection with the regulation of control bids by tender offer in Ohio,
the Purchaser filed a Form 041 on June 25, 1999 with the Ohio Division of
Securities pursuant to R.C.1707.041 of the Ohio Securities Act.
Antitrust. 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 acquisition of Shares pursuant to the Offer is subject to such
requirements. See Section 2.
Parent has filed, on June 23, 1999, with the FTC and the Antitrust Division
a Premerger Notification and Report Form in connection with the purchase of
Shares pursuant to the Offer. Under the provisions of the HSR Act applicable to
the Offer, the purchase of Shares pursuant to the Offer may not be consummated
until the expiration of a 15-calendar day waiting period following the filing by
Parent. Accordingly, the waiting period under the HSR Act applicable to such
purchases of Shares pursuant to the Offer will expire at 11:59 p.m., New York
City time, on July 8, 1999, unless such waiting period is terminated or is
extended by a request from the FTC or the Antitrust Division for additional
information or documentary material prior to the expiration of the waiting
period. If either the FTC or the Antitrust Division were to request additional
information or documentary material from Parent, the waiting period would expire
at 11:59 p.m., New York City time, on the tenth calendar day after the date of
substantial compliance by Parent with such request. Thereafter, the waiting
period could be extended only by court order or agreement of the parties. If the
acquisition of Shares is delayed pursuant to a request by the FTC or the
Antitrust Division for additional information or documentary material pursuant
to the HSR Act, the Offer may, but need not, be extended and in any event the
purchase of and payment for Shares will be deferred until ten days after the
request is substantially complied with, unless the waiting period is sooner
terminated by the FTC and the Antitrust Division. See Section 2. Only one
extension of such waiting period pursuant to a request for additional
information is authorized by the HSR Act and the rules promulgated thereunder,
except by court order or
28
<PAGE> 31
agreement of the parties. Any such extension of the waiting period will not give
rise to any withdrawal rights not otherwise provided for by applicable law. See
Section 4.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
the Purchaser pursuant to the Offer. At any time before or after the purchase by
the Purchaser of Shares pursuant to the Offer, either of the FTC and the
Antitrust Division could take such action under the antitrust laws as it deems
necessary or desirable in the public interest, including seeking to enjoin the
purchase of Shares pursuant to the Offer or seeking the divestiture of Shares
purchased by the Purchaser or the divestiture of substantial assets of Parent,
its subsidiaries or the Company. Private parties and state attorneys general may
also bring legal action under federal or state antitrust laws under certain
circumstances.
Margin Credit Regulations. Federal Reserve Board Regulations T, U and X
(the "Margin Credit Regulations") restrict the extension or maintenance of
credit for the purpose of buying or carrying margin stock, including the Shares,
if the credit is secured directly or indirectly thereby. Such secured credit may
not be extended or maintained in an amount that exceeds the maximum loan value
of the margin stock. Under the Margin Credit Regulations, the Shares are
presently margin stock and the maximum loan value thereof is generally 50% of
their current market value. The definition of "indirectly secured" contained in
the Margin Credit Regulations provides that the term does not include an
arrangement with a customer if the lender in good faith has not relied upon
margin stock as collateral in extending or maintaining the particular credit.
17. FEES AND EXPENSES. Wasserstein Perella is acting as Dealer Manager in
connection with the Offer and serving as financial advisor to Parent in
connection with the Offer and the Merger. Parent has agreed to pay to
Wasserstein Perella a fee of $2,800,000 upon the consummation of a merger or
other business combination with, or acquisition of 50% or more of the
outstanding Shares or at least 50% of the assets of the Company. Parent will
also reimburse Wasserstein Perella for reasonable out-of-pocket expenses and has
also agreed to indemnify Wasserstein Perella against certain liabilities and
expenses in connection with the Offer and the Merger.
The Purchaser has retained D.F. King & Co., Inc. to act as the Information
Agent and First Chicago Trust Company of New York to act as the Depositary in
connection with the Offer. The Information Agent may contact holders of Shares
by mail, telephone, telex, telegraph and personal interview and may request
brokers, dealers and other nominee stockholders to forward the Offer materials
to beneficial owners. The Information Agent and the Depositary will receive
reasonable and customary compensation for services relating to the Offer and
will be reimbursed for certain out-of-pocket expenses. The Purchaser and Parent
have also agreed to indemnify the Information Agent and the Depositary against
certain liabilities and expenses in connection with the Offer, including certain
liabilities under the federal securities laws.
The Purchaser will not pay any fees or commissions to any broker or dealer
or any other person for soliciting tenders of Shares pursuant to the Offer
(other than to the Dealer Manager, the Information Agent and the Depositary).
Brokers, dealers, commercial banks and trust companies will, upon request, be
reimbursed by the Purchaser for customary mailing and handling expenses incurred
by them in forwarding offering materials to their customers.
18. MISCELLANEOUS. The Offer is being made solely by this Offer to
Purchase and the related Letter of Transmittal and is being made to all holders
of Shares. The Purchaser is not aware of any state where the making of the Offer
is prohibited by administrative or judicial action pursuant to any valid state
statute. If the Purchaser becomes aware of any valid state statute prohibiting
the making of the Offer or the acceptance of Shares pursuant thereto, the
Purchaser will make a good faith effort to comply with any such state statute.
If after such good faith effort, the Purchaser cannot comply with such state
statute, the Offer will not be made to nor will tenders be accepted from or on
behalf of the holders of Shares in such state. In any jurisdiction where the
securities, blue sky or other laws require the Offer to be made by a licensed
broker or dealer, the Offer shall be deemed to be made on behalf of the
Purchaser by the Dealer Manager or one or more registered brokers or dealers
that are licensed under the laws of such jurisdiction.
29
<PAGE> 32
The Purchaser and Parent have filed with the Commission a Schedule 14D-1
(including exhibits) pursuant to Rule 14d-3 under the Exchange Act, furnishing
certain additional information with respect to the Offer. Such statement and any
amendments thereto, including exhibits, may be inspected and copies may be
obtained from the offices of the Commission (except that they will not be
available at the regional offices of the Commission) in the manner set forth in
Section 8 of this Offer to Purchase.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR PARENT 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.
NSI ENTERPRISES, INC.
June 25, 1999
30
<PAGE> 33
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER AND PARENT
1. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The name and
position with the Purchaser of each director and executive officer of the
Purchaser are set forth below. Unless otherwise indicated, the business address
of each such director and executive officer is: c/o National Service Industries,
Inc., NSI Center, 1420 Peachtree Street, N.E., Atlanta, Georgia 30309. The other
required information with respect to each such person is set forth under
"Directors and Executive Officers of Parent" below. Except as set forth below,
all directors and executive officers listed below are citizens of the United
States.
<TABLE>
<CAPTION>
NAME POSITION WITH THE PURCHASER
- ---- ---------------------------
<S> <C>
James S. Balloun.............. Director, Chairman of the Board, Chief Executive Officer and
President of Purchaser.
Brock A. Hattox............... Director, Executive Vice President and Chief Financial
Officer of Purchaser.
David Levy.................... Director, Executive Vice President, Administration and
Counsel of Purchaser.
Stewart A. Searle III*........ Senior Vice President of Purchaser.
*Canadian citizenship
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The name, business address,
present principal occupation or employment and material occupations, positions,
offices or employments during the last five years of each director and executive
officer of Parent and certain other information are set forth below. Unless
otherwise indicated, the business address of each such director and executive
officer is: c/o National Service Industries, Inc., NSI Center, 1420 Peachtree
Street, N.E., Atlanta, Georgia 30309. Unless otherwise indicated, each
occupation set forth opposite an individual's name refers to employment with
Parent. Except as set forth below, all directors and executive officers listed
below are citizens of the United States.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT AND MATERIAL OCCUPATIONS, POSITIONS,
OFFICES OR EMPLOYMENT HELD
NAME AND ADDRESS DURING THE LAST FIVE YEARS
- ---------------- ------------------------------------------------------------
<S> <C>
James S. Balloun.............. Director of Parent (since 1996); Chairman of the Board of
Parent (since 2/96); Chief Executive Officer of Parent
(since 2/96); President of Parent (since 10/96); Director
of McKinsey & Co. (6/76 through 1/96). Director of
Georgia-Pacific Corporation, Radiant Systems, Inc. and
Wachovia Corporation.
John L. Clendenin............. Director of Parent (since 1996); Chairman of BellSouth
1873 Flagler Estates Drive Corporation (1983 through 12/97); Chairman, President and
West Palm Beach, Florida Chief Executive Officer of BellSouth (1983 through 12/96).
33411 Director of Coca-Cola Enterprises Inc., Equifax Inc., The
Home Depot, Inc., The Kroger Company, Nabisco Group
Holdings, Powerwave Technologies, Springs Industries, Inc.
and Wachovia Corporation. Director of Parent from 1984
until 1995.
Thomas C. Gallagher........... Director of Parent (since 1997); President and Chief
Genuine Parts Company Operating Officer of Genuine Parts Company (since 1990);
2999 Circle 75 Parkway Chairman and Chief Executive Officer of S.P. Richards
Atlanta, Georgia 30339 Company (various positions since 1970). Director of
Genuine Parts Company and Oxford Industries, Inc.
</TABLE>
S-1
<PAGE> 34
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT AND MATERIAL OCCUPATIONS, POSITIONS,
OFFICES OR EMPLOYMENT HELD
NAME AND ADDRESS DURING THE LAST FIVE YEARS
- ---------------- ------------------------------------------------------------
<S> <C>
George H. Gilmore, Jr......... Executive Vice President and Group President of Parent
(since 6/99); President and Chief Operating Officer of
Calmat Co. (1998 to 6/99); President of Moore Department
Solutions (1995 to 1997) and President of Moore Business
Systems (1994 to 1995) of Moore Corporation.
Brock A. Hattox............... Executive Vice President and Chief Financial Officer of
Parent (since 1996); President of Engineering and
Construction Group (1/95 through 9/96) and Chief Financial
Officer of McDermott International, Inc. (3/91 through
9/96).
Robert M. Holder, Jr.......... Director of Parent (since 1974); Chairman of the Board of
The RMH Group Holder Corporation (1960 through 3/97); Chief Executive
3333 Riverwood Parkway, S.E. Officer of Holder Corporation (1960 through 1994);
Suite 500 Chairman of the Board of The RMH Group (since 4/97).
Atlanta, Georgia 30339
James C. Kennedy.............. Director of Parent (since 1993); Chairman and Chief
Cox Enterprises, Inc. Executive Officer of Cox Enterprises, Inc. (various
P.O. Box 105357 positions since 1972). Director of Cox Communications,
Atlanta, Georgia 30348 Inc. and Cox Radio, Inc.
David Levy.................... Director of Parent (since 1984); Executive Vice President,
Administration and Counsel of Parent (since 9/92); Senior
Vice President, Secretary and Counsel of Parent (1982
through 9/92).
Bernard Marcus................ Director of Parent (since 1990); Chairman of the Board of
The Home Depot, Inc. The Home Depot, Inc. (since 1978) and Chief Executive
2455 Paces Ferry Road Officer (1978 through 1997); Chairman of the Board and
Atlanta, Georgia 30339 President of Handy Dan Improvement Centers, Inc. (1972
through 1978). Director of DBT Online, Inc. and Westfield
America, Inc.
John G. Medlin, Jr............ Director of Parent (since 1988); Chairman Emeritus of
Wachovia Corporation Wachovia Corporation; Non-executive Chairman of the Board
100 North Main Street Wachovia (1994 through 1998); Chief Executive Officer of
Winston-Salem, North Wachovia (1977 through 1993). Director of BellSouth
Carolina Corporation, Burlington Industries, Inc., Media General,
27150 Inc., USAirways Group, Inc., and Wachovia Corporation.
Sam Nunn...................... Director of Parent (since 1997); Senior Partner in King &
King & Spalding Spalding, Attorneys, Atlanta, Georgia (since 1997); United
191 Peachtree Street, N.W. States Senator (1973 through 1996). Director of The
Atlanta, Georgia 30303 Coca-Cola Company, General Electric Company,
Scientific-Atlanta, Inc., Texaco, Inc. and Total System
Services, Inc.
Herman J. Russell............. Director of Parent (since 1996); Chairman of the Board
H.J. Russell & Company (since 1959) and Chief Executive Officer (since 1998) of
504 Fair Street, S.W. H.J. Russell & Company; Chief Executive Officer of H.J.
Atlanta, Georgia 30313 Russell & Company (1959 through 1996). Director of Georgia
Power Company.
Stewart A. Searle III*........ Senior Vice President -- Planning and Development of Parent
(since 1996); Senior Vice President of Development of
Equifax Inc. (1992 through 1996).
*Canadian citizenship
</TABLE>
S-2
<PAGE> 35
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT AND MATERIAL OCCUPATIONS, POSITIONS,
OFFICES OR EMPLOYMENT HELD
NAME AND ADDRESS DURING THE LAST FIVE YEARS
- ---------------- ------------------------------------------------------------
<S> <C>
Betty L. Siegel............... Director of Parent (since 1988); President of Kennesaw State
Kennesaw State University University (since 1981). Director of AGL Resources, Inc.
1000 Chastain Road and Equifax Inc.
Kennesaw, Georgia 30144
Barrie A. Wigmore............. Director of Parent (since 1997); Limited Partner of Goldman
Goldman, Sachs & Co. Sachs Group, LP (since 1988). Director of Potash Corporation
85 Broad Street -- 2nd Floor of Saskatchewan.
New York, New York 10004
</TABLE>
3. OWNERSHIP OF SUBJECT COMPANY'S SECURITIES BY DIRECTORS AND EXECUTIVE
OFFICES OF PARENT AND PURCHASER.
To the best knowledge of the Purchaser and Parent, none of the persons
listed on this Schedule I beneficially owns or has a right to acquire directly
or indirectly any Shares, and none of the persons listed on this Schedule I has
effected any transactions in the Shares during the past 60 days.
S-3
<PAGE> 36
The Letter of Transmittal, certificates for Shares and any other required
documents should be sent or delivered by each stockholder of the Company or his
broker, dealer, commercial bank, trust company or other nominee to the
Depositary as follows:
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<CAPTION>
By Mail: By Overnight Courier: By Hand:
<S> <C> <C>
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
ATTN: Corporate Actions ATTN: Corporate Actions ATTN: Corporate Actions
Suite 4660 Suite 4680 c/o Securities Transfer
P.O. Box 2569 14 Wall Street and Reporting Services, Inc.
Jersey City, NJ 07303-2569 Eighth Floor 100 William Street -- Galleria
New York, NY 10005 New York, NY 10038
</TABLE>
<TABLE>
<CAPTION>
By Facsimile Transmission: Confirm by Telephone:
<S> <C>
(201) 222-4720 (201) 222-4707
or or
(201) 222-4721 (800) 446-2617
</TABLE>
Any questions and requests for assistance may be directed to the
Information Agent or the Dealer Manager at their respective telephone numbers
and addresses listed below. Additional copies of this Offer to Purchase, the
Letter of Transmittal and the Notice of Guaranteed Delivery may also be obtained
from the Information Agent. You may also contact your broker, dealer, commercial
bank or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, NY 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll-Free: 1-800-207-3155
The Dealer Manager for the Offer is:
WASSERSTEIN PERELLA & CO., INC.
31 West 52nd Street
New York, NY 10019
Call Collect (212) 969-2700
<PAGE> 1
Exhibit (a)(2)
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
of
HOLOPHANE CORPORATION
Pursuant to the Offer to Purchase dated June 25, 1999
by
NSI ENTERPRISES, INC.
A WHOLLY OWNED SUBSIDIARY OF
NATIONAL SERVICE INDUSTRIES, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, JULY 23, 1999, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<CAPTION>
By Mail: By Overnight Courier: By Hand:
<S> <C> <C>
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
ATTN: Corporate Actions ATTN: Corporate Actions ATTN: Corporate Actions
Suite 4660 Suite 4680 c/o Securities Transfer
P.O. Box 2569 14 Wall Street and Reporting Services, Inc.
Jersey City, NJ 07303-2569 Eighth Floor 100 William Street -- Galleria
New York, NY 10005 New York, NY 10038
</TABLE>
<TABLE>
<CAPTION>
By Facsimile Transmission Confirm Facsimile by Telephone
(for Eligible Institutions only):
<S> <C>
(201) 222-4720 (201) 222-4707
or or
(201) 222-4721 (800) 446-2617
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders, either if
certificates for Shares (as defined below) are to be forwarded herewith or,
unless an Agent's Message (as defined in the Offer to Purchase) is utilized, if
tenders of Shares are to be made by book-entry transfer into the account of
First Chicago Trust Company of New York, as Depositary (the "Depositary"), at
The Depository Trust Company ("DTC" or the "Book-Entry Transfer Facility")
pursuant to the procedures set forth in Section 3 of the Offer to Purchase (as
defined below). Stockholders who tender Shares by book-entry transfer are
referred to herein as "Book-Entry Stockholders".
Holders of Shares whose certificates for such Shares (the "Share
Certificates") are not immediately available or who cannot deliver their Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase), or who
cannot complete the procedure for book-entry transfer on a timely basis, must
tender their Shares according to the guaranteed delivery procedure set forth in
Section 3 of the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO
THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<PAGE> 2
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to NSI Enterprises, Inc., a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of National Service
Industries, Inc., a Delaware corporation ("Parent"), the below-described shares
of Common Stock, par value $.01 per share (the "Shares"), of Holophane
Corporation, a Delaware corporation (the "Company"), at a purchase price of
$38.50 per Share, net to the seller in cash, less any required withholding taxes
and without interest thereon, upon the terms and subject to the conditions set
forth in the Offer to Purchase dated June 25, 1999 (the "Offer to Purchase") and
in this Letter of Transmittal (which, as amended from time to time, together
constitute the "Offer"). The undersigned understands that the Purchaser reserves
the right to transfer or assign in whole or from time to time in part, to one or
more of its affiliates, the right to purchase all or any portion of the Shares
tendered pursuant to the Offer, receipt of which is hereby acknowledged.
Subject to, and effective upon, acceptance for payment for the Shares
tendered herewith in accordance with the terms of the Offer, the undersigned
hereby sells, assigns and transfers to, or upon the order of, the Purchaser all
right, title and interest in and to all of the Shares that are being tendered
hereby and any and all non-cash dividends, distributions (including additional
Shares) or rights declared, paid or issued with respect to the tendered Shares
on or after June 20, 1999 and payable or distributable to the undersigned on a
date prior to the transfer to the name of the Purchaser or nominee or transferee
of the Purchaser on the Company's stock transfer records of the Shares tendered
herewith (collectively, a "Distribution"), and appoints the Depositary the true
and lawful agent and attorney-in-fact of the undersigned with respect to such
Shares (and any Distribution) with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest) to
(a) deliver such Share Certificates (as defined herein) (and any Distribution),
or transfer ownership of such Shares (and any Distribution) on the account books
maintained by the Book-Entry Transfer Facility, together in either case the
appropriate evidences of transfer, to the Depositary for the account of the
Purchaser, (b) present such Shares (and any Distribution) 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 any Distribution), all in
accordance with the terms and subject to the conditions of the Offer.
The undersigned irrevocably appoints designees of the Purchaser as such
stockholder's proxy, with full power of substitution, to the full extent of such
stockholder's rights with respect to the Shares tendered by such stockholder and
accepted for payment by the Purchaser and with respect to any and all other
Shares or other securities issued or issuable in respect of such Shares on or
after June 20, 1999. Such appointment will be effective when, and only to the
extent that, the 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
consents executed (and, if given or executed, will not be deemed effective). The
designees of the Purchaser will 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. The Purchaser reserves the right to require that, in order for Shares
to be deemed validly tendered, immediately upon the Purchaser's payment for such
Shares the Purchaser must be able to exercise full voting rights with respect to
such Shares.
The undersigned hereby represents and warrants that (a) the undersigned has
full power and authority to tender, sell, assign and transfer the Shares (and
any Distribution) tendered hereby and (b) when the Shares are accepted for
payment by the Purchaser, the Purchaser will acquire good, marketable and
unencumbered title to the Shares (and any Distribution), free and clear of all
liens, restrictions, charges and encumbrances, and the same will not be subject
to any adverse claim. The undersigned, upon request, will execute and deliver
any additional documents deemed by the Depositary or the Purchaser to be
necessary or desirable to complete the sale, assignment and transfer of the
Shares tendered hereby (and any Distribution). In addition, the undersigned
shall promptly remit and transfer to the Depositary for the account of the
Purchaser any and all Distributions in respect of the Shares tendered hereby,
accompanied by appropriate documentation of transfer, and pending such
remittance or appropriate assurance thereof, the Purchaser will be, subject to
applicable law, entitled to all rights and privileges as owner of any such
Distribution and may withhold the entire purchase price or deduct from the
purchase price the amount or value thereof, as determined by the Purchaser in
its sole discretion.
<PAGE> 3
All authority herein conferred or agreed to be conferred shall not be
affected by and 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.
Tenders of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date (as defined in the Offer to Purchase) and, unless theretofore
accepted for payment by the Purchaser pursuant to the Offer, may also be
withdrawn at any time after August 23, 1999. See Section 4 of the Offer to
Purchase.
The undersigned understands that tenders of Shares pursuant to any of the
procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions set forth in the
Offer, including the undersigned's representation that the undersigned owns the
Shares being tendered.
Unless otherwise indicated herein under "Special Payment Instructions",
please issue the check for the purchase price and/or issue or return any
certificate(s) for Shares not tendered or not accepted for payment in the
name(s) of the registered holder(s) appearing under "Description of Shares
Tendered". Similarly, unless otherwise indicated herein under "Special Delivery
Instructions", please mail the check for the purchase price and/or any
certificate(s) for Shares not tendered or not accepted for payment (and
accompanying documents, as appropriate) to the address(es) of the registered
holder(s) appearing under "Description of Shares Tendered". In the event that
both the Special Delivery Instructions and the Special Payment Instructions are
completed, please issue the check for the purchase price and/or any
certificate(s) for Shares not tendered or accepted for payment in the name of,
and deliver such check and/or such certificates to, the person or persons so
indicated. The undersigned recognizes that the Purchaser has no obligation,
pursuant to the Special Payment Instructions, to transfer any Shares from the
name(s) of their registered holder(s) thereof if the Purchaser does not accept
for payment any of the Shares so tendered.
<PAGE> 4
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------------
NAME(S) & ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS SHARE CERTIFICATE(S) AND SHARE(S) TENDERED (ATTACH
NAME(S) APPEAR(S) ON CERTIFICATE(S) ADDITIONAL SIGNED LIST IF NECESSARY)
---------------------------------------------------------------
TOTAL NUMBER
OF SHARES NUMBER OF
SHARE CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
- ------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
TOTAL SHARES
- ------------------------------------------------------------------------------------------------------------------------
* Need not be completed by Book-Entry Stockholders.
** Unless otherwise indicated, all Shares represented by certificate delivered to the Depositary will be deemed to have
been tendered. See Instruction 4.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
[ ] CHECK HERE IF SHARES ARE BEING TENDERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER
FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution
-----------------------------------------------------------------------------
Check box of Book-Entry Transfer Facility:
[ ] The Depository Trust Company
Account Number
-----------------------------------------------------------------------------
Transaction Code Number
-----------------------------------------------------------------------------
[ ] CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s):
-----------------------------------------------------------------------------
Window Ticket Number (if any):
-----------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
---------------------------------------------------------------
Name of Institution that Guaranteed Delivery:
---------------------------------------------------------------------
(If delivered by Book-Entry Transfer provide the following):
The Depository Trust Company Account Number
------------------------------------------------------------------
Transaction Code Number
-----------------------------------------------------------------------------
<PAGE> 5
------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment are to be issued in the name of someone other than
the undersigned.
Issue: [ ] Check and/or [ ] Certificate(s) to:
Name ------------------------------------------------------------
(Please Print)
Address -----------------------------------------------------------
------------------------------------------------------------
(Include Zip Code)
------------------------------------------------------------
(Tax ID, or Social Security No.)
(See Substitute Form W-9 included herein)
------------------------------------------------------------
------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment are to be sent to someone other than the undersigned
or to the undersigned at an address other than that shown above.
Mail: [ ] Check and/or [ ] Certificate(s) to:
Name
------------------------------------------------------------
(Please Print)
Address -----------------------------------------------------------
------------------------------------------------------------
(Include Zip Code)
------------------------------------------------------------
------------------------------------------------------------
<PAGE> 6
SIGN HERE
AND COMPLETE SUBSTITUTE FORM W-9
X
- --------------------------------------------------------------------------------
X
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF HOLDER(S))
Dated: , 1999
- --------------------------------------------------------------------------------
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on
Share Certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, please provide the following information
and see Instruction 5.)
Name(s)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title)
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number
- --------------------------------------------------------------------------------
Tax Identification or
Social Security No.
- --------------------------------------------------------------------------------
COMPLETE SUBSTITUTE FORM W-9
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Name of Firm
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Address
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number
- --------------------------------------------------------------------------------
Dated: , 1999
- --------------------------------------------------------------------------------
<PAGE> 7
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
- -----------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT Social Security Number
FORM W-9 THE RIGHT AND CERTIFY BY SIGNING AND DATING ---------------------------
BELOW. or
---------------------------
Employer Identification Number
- -----------------------------------------------------------------------------------------------------------------------
PART 2 -- 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
DEPARTMENT OF THE (2) I am not subject to backup withholding because: (a) I am exempt from backup
TREASURY withholdings, or (b) I have not been notified by the Internal Revenue Service
INTERNAL REVENUE (the "IRS") that I am subject to backup withholding as a result of a failure
SERVICE to report all interest or dividends, or (c) the IRS has notified me that I
am no longer subject to backup withholding.
PAYER'S REQUEST FOR Certification Instructions -- You must cross out item (2) above if you have been
TAXPAYER IDENTIFICATION notified by the IRS that you are currently subject to backup withholding because
NUMBER ("TIN") of under-reporting interest or dividends on your tax return. However, if after
being notified by the IRS that you were subject to backup withholding you
received another notification from the IRS that you are no longer subject to
backup withholding, do not cross out such Item (2).
---------------------------------
SIGN HERE Signature PART 3 --
Date , 1999 Awaiting TIN [ ]
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (1) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office, or (2) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number by the time of payment, 31% of all
reportable payments made to me will be withheld.
Signature ________________________________ Date __________________ , 1999
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) of Shares tendered herewith, unless such holder(s) has
completed either the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" above, or (b) if such Shares are
tendered for the account of a firm which is a bank, broker, dealer, credit
union, savings association or other entity which is a member in good standing of
the Securities Transfer Agents Medallion Program (each of the foregoing being
referred to as an "Eligible Institution"). In all other cases, all signatures on
this Letter of Transmittal must be guaranteed by an Eligible Institution. See
Instruction 5 of this Letter of Transmittal.
2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed
by stockholders either if certificates are to be forwarded herewith or, unless
an Agent's Message it utilized, if tenders are to be made pursuant to the
procedure for tender by book-entry transfer set forth in Section 3 of the Offer
to Purchase. Share Certificates, or timely confirmation (a "Book-Entry
Confirmation") of a transfer of such Shares into the Depositary's account at the
Book-Entry Transfer Facility, as well as this Letter of Transmittal (or a
facsimile hereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message in connection with a book-entry
transfer, and any other documents required by this Letter of Transmittal, must
be received by the Depositary at one of its addresses set forth herein prior to
the Expiration Date (as defined in Section 1 of the Offer to Purchase).
Stockholders whose Share Certificates are not immediately available or 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 by
properly completing and duly executing a Notice of Guaranteed Delivery pursuant
to the guaranteed delivery procedure set forth in Section 3 of the Offer to
Purchase. Pursuant to such procedure: (i) such tender must be made by or through
an Eligible Institution; (ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form made available by the Purchaser,
must be received by the Depositary prior to the Expiration Date; and (iii) the
Share Certificates (or a Book-Entry Confirmation) representing 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 this Letter of Transmittal,
must be received by the Depositary within three New York Stock Exchange trading
days after the date of execution of such Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATE AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS
BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or a facsimile hereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares and any other required
information should be listed on a separate signed schedule attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO BOOK-ENTRY STOCKHOLDERS). If fewer
than all the Shares evidenced by any Share Certificate submitted are to be
tendered, fill in the number of Shares which are to be tendered in the box
entitled "Number of Shares Tendered". In such cases, new Share Certificates for
the Shares that were evidenced by your old Share Certificates, but were not
tendered by you, will be sent to you, unless otherwise provided in the
appropriate box on this Letter of Transmittal, as soon as practicable after the
Expiration Date. All Shares represented 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 certificate(s) without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are owned of record by two of more
joint owners, all such owners must sign this Letter of Transmittal.
<PAGE> 9
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardian attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Purchaser of their authority so to act must be submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to or
certificates for Shares not tendered or not purchased are to be issued in the
name of a person other than the registered holder(s). Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificate(s) listed, the certificate(s) must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear(s) on the
certificate(s). Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, the Purchaser will pay any stock transfer taxes with respect to the transfer
and sale of Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price is to be made to, or if certificate(s) for Shares
not tendered or accepted for payment are to be registered in the name of, any
person other than the registered holder(s), or if tendered certificate(s) are
registered in the name of any person other than the person(s) signing this
Letter of Transmittal, the amount of any stock transfer taxes (whether imposed
on the registered holder(s) or such person) payable on account of the transfer
to such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes or an exemption therefrom, is submitted.
EXCEPT AS OTHERWISE PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE
NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATE(S) LISTED IN
THIS LETTER OF TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued
in the name of, and/or certificates for Shares not tendered or not accepted for
payment are to be issued or returned to, a person other than the signer of this
Letter of Transmittal or if a check and/or such certificates are to be returned
to a person other than the person(s) signing this Letter of Transmittal or to an
address other than that shown in this Letter of Transmittal, the appropriate
boxes on this Letter of Transmittal must be completed.
8. WAIVER OF CONDITIONS. Subject to the terms and conditions of the
Agreement and Plan of Merger, dated as of June 20, 1999, by and among Purchaser,
Parent and the Company, the conditions of the Offer (other than the Minimum
Condition (as defined in the Offer to Purchase)) may be waived by the Purchaser
in whole or in part at any time and from time to time in its sole discretion.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a stockholder whose tendered Shares are accepted for payment is
required to provide the Depositary with such stockholder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 below. If the Depositary is
not provided with the correct TIN, the Internal Revenue Service may subject the
stockholder or other payee to a $50 penalty. In addition, payments that are made
to such stockholder or other payee with respect to Shares purchased pursuant to
the Offer may be subject to 31% backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, the stockholder must submit a Form W-8, signed under penalties of
perjury, attesting to that individual's exempt status. A Form W-8 can be
obtained from the Depositary. See the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for more instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any such payments made to the stockholder or other payee. Backup withholding
is not an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
<PAGE> 10
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Depositary.
The stockholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record owner of the
Shares or of the last transferee appearing on the transfers attached to, or
endorsed on, the Shares. If the Shares are in more than one name or are not in
the name of the actual owner, consult the enclosed "Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9" for additional
guidance on which number to report.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions or requests
for assistance may be directed to the Dealer Manager or the Information Agent at
their respective addresses and telephone numbers set forth below. Additional
copies of the Offer to Purchase, this Letter of Transmittal and the Notice of
Guaranteed Delivery may also be obtained from the Information Agent or the
Dealer Manager or from brokers, dealers, commercial banks or trust companies.
11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary. The stockholder will then be instructed as to
the steps that must be taken in order to replace the certificate. This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost or destroyed certificates have been followed.
<PAGE> 11
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect:
(212) 269-5550
All Others Call Toll-Free:
1-800-207-3155
The Dealer Manager for the Offer is:
WASSERSTEIN PERELLA & CO., INC.
31 West 52nd Street
New York, NY 10019
Call Collect (212) 969-2700
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED, TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES AND
SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER OR THE NOTICE OF
GUARANTEED DELIVERY, AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE).
<PAGE> 1
Exhibit (a)(3)
Notice of Guaranteed Delivery
to
Tender Shares of Common Stock
of
HOLOPHANE CORPORATION
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
As set forth in Section 3 of the Offer to Purchase described below, this
instrument or one substantially equivalent hereto must be used to accept the
Offer (as defined below) if certificates for Shares (as defined below) are not
immediately available or the certificates for Shares and all other required
documents cannot be delivered to the Depositary prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase) or if the procedure for delivery
by book-entry transfer cannot be completed on a timely basis. This instrument
may be delivered by hand or mail or transmitted by facsimile transmission to the
Depositary.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<CAPTION>
By Mail: By Overnight Courier: By Hand:
<S> <C> <C>
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
ATTN: Corporate Actions ATTN: Corporate Actions ATTN: Corporate Actions
Suite 4660 Suite 4680 c/o Securities Transfer
P.O. Box 2569 14 Wall Street and Reporting Services, Inc.
Jersey City, NJ 07303-2569 Eighth Floor 100 William Street -- Galleria
New York, NY 10005 New York, NY 10038
</TABLE>
<TABLE>
<CAPTION>
By Facsimile Transmission
(for Eligible Institutions only): Confirm by Telephone:
<S> <C>
(201) 222-4720 (201) 222-4707
or or
(201) 222-4721 (800) 446-2617
</TABLE>
DELIVERY OF THIS INSTRUMENT 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 in the Letter of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tender(s) to NSI Enterprises, Inc., a Delaware
corporation and a wholly owned subsidiary of National Service Industries, Inc.,
a Delaware corporation, upon the terms and subject to the conditions set forth
in the Offer to Purchase dated June 25, 1999 (the "Offer to Purchase"), and in
the related Letter of Transmittal (which, as amended from time to time, together
constitute the "Offer"), receipt of which is hereby acknowledged, the number of
shares of Common Stock, par value $.01 per share (the "Shares"), of Holophane
Corporation, a Delaware corporation, pursuant to the guaranteed delivery
procedure set forth in Section 3 of the Offer to Purchase.
Certificate Nos. (If Available)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Signature(s)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Address(es)
Dated: , 1999
- -------------------------------------------------------------------------------
(Check the box below if Shares will be tendered by book-entry transfer through
The Depository Trust Company)
[ ] Account Number
- ------------------------------------------------------------
Name(s) of Record Holders
- --------------------------------------------------------------------------------
Please Type or Print
- --------------------------------------------------------------------------------
Number of Shares
- --------------------------------------------------------------------------------
Address(es)
- --------------------------------------------------------------------------------
(Include Zip Code)
- --------------------------------------------------------------------------------
Area Code and Telephone Number
<PAGE> 3
<TABLE>
<S> <C>
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm which is a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the Securities Transfer
Agents Medallion Program, (a) represents 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,
as amended ("Rule 14e-4"), (b) represents that such tender of Shares complies with Rule
14e-4, and (c) guarantees to deliver to the Depositary either the certificates evidencing
all tendered Shares, in proper form for transfer, or to deliver Shares pursuant to the
procedure for book-entry transfer into the Depositary's account at The Depository Trust
Company (the "Book-Entry Transfer Facility"), in either case together with the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed, with any
required signature guarantees or an Agent's Message (as defined in the Offer to Purchase) in
the case of a book-entry delivery, and any other required documents, all within three New
York Stock Exchange trading days after the date hereof.
- ---------------------------------------------------------------------------------------------
Name of Firm:
(Authorized Signature)
Address:
Name:
(Please Type or Print)
(Zip Code) Title:
Area Code and Tel. No.: Dated: , 1999
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES SHOULD
BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE> 1
Exhibit (a)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
HOLOPHANE CORPORATION
AT
$38.50 NET PER SHARE
BY
NSI ENTERPRISES, INC.
A WHOLLY OWNED SUBSIDIARY OF
NATIONAL SERVICE INDUSTRIES, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, JULY 23, 1999, UNLESS THE OFFER IS EXTENDED.
June 25, 1999
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by NSI Enterprises, Inc., a Delaware corporation
(the "Purchaser") and a wholly owned subsidiary of National Service Industries,
Inc., a Delaware corporation ("Parent"), to act as Dealer Manager in connection
with the Purchaser's offer to purchase for cash all the outstanding shares of
Common Stock, par value $.01 per share (the "Shares"), of Holophane Corporation,
a Delaware corporation (the "Company"), at a purchase price of $38.50 per Share,
net to the seller in cash, less any required withholding taxes and without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated June 25, 1999 (the "Offer to Purchase"), and in the
related Letter of Transmittal (which, as amended from time to time, together
constitute the "Offer") enclosed herewith. Holders of Shares whose certificates
for such Shares (the "Share Certificates") are not immediately available or who
cannot deliver their Share Certificates and all other required documents to the
Depositary (as defined below) prior to the Expiration Date (as defined in the
Offer to Purchase), or who cannot complete the procedures for book-entry
transfer on a timely basis, must tender their Shares according to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares registered in your name or in the name of
your nominee.
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase, dated June 25, 1999.
2. The Letter of Transmittal to tender Shares for your use and for the
information of your clients. Facsimile copies of the Letter of Transmittal
may be used to tender Shares.
3. The Notice of Guaranteed Delivery for Shares to be used to accept
the Offer if Share Certificates are not immediately available or if such
certificates and all other required documents cannot be delivered to First
Chicago Trust Company of New York (the "Depositary") by the Expiration Date
or if the procedure for book-entry transfer cannot be completed by the
Expiration Date.
4. The Letter to Stockholders of the Company from the Chairman of the
Board, President and Chief Executive Officer of the Company, accompanied by
the Company's Solicitation/Recommendation Statement on Schedule 14D-9.
<PAGE> 2
5. A printed 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.
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
7. A return envelope addressed to First Chicago Trust Company of New
York, the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JULY 23, 1999, UNLESS THE OFFER
IS EXTENDED.
In order to take advantage of the Offer, (i) a duly executed and properly
completed Letter of Transmittal and any required signature guarantees, or an
Agent's Message (as defined in the Offer to Purchase) in connection with a
book-entry delivery of Shares, and other required documents should be sent to
the Depositary, and (ii) either Share Certificates representing the tendered
Shares should be delivered to the Depositary or such Shares should be tendered
by book-entry transfer into the Depositary's account maintained at the
Book-Entry Transfer Facility (as described in the Offer to Purchase), all in
accordance with the instructions set forth in the Letter of Transmittal and the
Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Share Certificates or other required documents on or prior to the
Expiration Date or to comply with the book-entry transfer procedures on a timely
basis, a tender may be effected by following the guaranteed delivery procedures
specified in Section 3 of the Offer to Purchase.
The Purchaser will not pay any commissions or fees to any broker, dealer or
other person (other than the Dealer Manager, the Depositary and D.F. King & Co.,
Inc. (the "Information Agent") (as described in the Offer to Purchase)) for
soliciting tenders of Shares pursuant to the Offer. The Purchaser will, however,
upon request, reimburse you for customary clerical and mailing expenses incurred
by you in forwarding any of the enclosed materials to your clients. The
Purchaser will pay or cause to be paid any stock transfer taxes payable on the
transfer of Shares to it, except as otherwise provided in Instruction 6 of the
Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to
Wasserstein Perella & Co., Inc., as Dealer Manager, or the Information Agent, at
their respective addresses and telephone numbers set forth on the back cover of
the Offer to Purchase. Additional copies of the enclosed materials may be
obtained from the Information Agent.
Very truly yours,
WASSERSTEIN PERELLA & CO., INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, PARENT, THE DEALER MANAGER, THE
COMPANY, THE DEPOSITARY OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF
THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY
DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
2
<PAGE> 1
Exhibit (a)(5)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
HOLOPHANE CORPORATION
at
$38.50 Net Per Share
by
NSI ENTERPRISES, INC.
a wholly owned subsidiary of
NATIONAL SERVICE INDUSTRIES, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, JULY 23, 1999, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration is an Offer to Purchase, dated June 25,
1999 (the "Offer to Purchase"), and the related Letter of Transmittal relating
to an offer by NSI Enterprises, Inc., a Delaware corporation (the "Purchaser")
and a wholly owned subsidiary of National Service Industries, Inc., a Delaware
corporation ("Parent"), to purchase all of the outstanding shares of Common
Stock, par value $.01 per share (the "Shares"), of Holophane Corporation, a
Delaware corporation (the "Company"), at a purchase price of $38.50 per Share,
net to the seller in cash, less any required withholding taxes and without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer to Purchase and in the related Letter of Transmittal (which, as amended
from time to time, together constitute the "Offer"). We are the holder of record
of Shares held by us 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 to have us tender on your
behalf any or all of such Shares held by us for your account, pursuant to the
terms and subject to the conditions set forth in the Offer to Purchase.
Your attention is directed to the following:
1. The tender price is $38.50 per share, net to the seller in cash,
less any required withholding taxes and without interest thereon.
2. The Offer is made for all of the outstanding Shares.
3. The Board of Directors of the Company has determined that the
Merger Agreement (as defined below) and the transactions contemplated
thereby, including each of the Offer and the Merger (as defined below), are
advisable and are fair to and in the best interests of the stockholders of
the Company, has approved the Offer and the Merger and recommends that
holders of the Shares accept the Offer and tender their Shares to the
Purchaser.
4. The Offer is being made pursuant to the Agreement and Plan of
Merger, dated as of June 20, 1999 (the "Merger Agreement"), which provides
that subsequent to the consummation of the Offer, the Purchaser will merge
with and into the Company (the "Merger"). At the effective time of the
Merger (the "Effective Time"), each Share outstanding immediately prior to
the Effective Time (other than Shares held in the treasury of the Company
and Shares, if any, owned by the Purchaser, Parent or any direct or
indirect subsidiary of Parent, of the Purchaser or of the Company and other
than Shares, if any, held by stockholders who have not voted in favor of
the Merger Agreement or consented thereto in writing and have demanded
appraisal of such Shares in accordance with the Delaware General
Corporation Law) shall be converted into the right to receive $38.50 in
cash without interest.
<PAGE> 2
5. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Friday, July 23, 1999, unless the Offer is extended.
6. Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares pursuant to the
Offer.
7. The Offer is conditioned upon, among other things, (i) there being
validly tendered and not properly withdrawn at least a majority of the
Shares (determined on a fully diluted basis) of the Company and (ii) the
expiration or termination of all applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
The Offer is being made solely by the Offer to Purchase and the related
Letter of Transmittal and is being made to all holders of Shares. The Purchaser
is not aware of any State where the making of the Offer is prohibited by
administrative or judicial action pursuant to any valid State statute. If the
Purchaser becomes aware of any valid State statute prohibiting the making of the
Offer or the acceptance of Shares pursuant thereto, the Purchaser will make a
good faith effort to comply with any such State statute. If, after such good
faith effort, the Purchaser cannot comply with such State statute, the Offer
will not be made to nor will tenders be accepted from or on behalf of the
holders of Shares in such State. In any jurisdiction where the securities, "blue
sky" or other laws require the Offer to be made by a licensed broker or dealer,
the Offer shall be deemed to be made on behalf of the Purchaser by the Dealer
Manager or one or more registered brokers or dealers that are licensed under the
laws of such jurisdiction.
If you wish to have us tender any or all of the Shares held by us for your
account, please instruct us by completing, executing and returning to us the
instruction form contained in this letter. If you authorize a tender of your
Shares, all such Shares will be tendered unless otherwise specified in such
instruction form. Your instructions should be forwarded to us in ample time to
permit us to submit a tender on your behalf prior to the expiration of the
Offer.
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF HOLOPHANE CORPORATION
The undersigned acknowledge(s) receipt of your letter enclosing the Offer
to Purchase dated June 25, 1999 (the "Offer to Purchase"), and the related
Letter of Transmittal pursuant to an offer by NSI Enterprises, Inc., a Delaware
corporation and a wholly owned subsidiary of National Service Industries, Inc.,
a Delaware corporation, to purchase all outstanding shares of Common Stock, par
value $.01 per share (the "Shares"), of Holophane Corporation, a Delaware
corporation.
This will instruct you to tender the number of Shares indicated below (or,
if no number is indicated below, all Shares) which are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer to Purchase and in the related Letter of Transmittal
furnished to the undersigned.
Dated: , 1999
---------------------------
Number of Shares to be Tendered:*
------------------ Shares
SIGN HERE
- --------------------------------------------------------------------------------
Signature(s)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please print name(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
Area Code and Telephone Number
- --------------------------------------------------------------------------------
Tax Identification or Social Security Number
* Unless otherwise indicated, it will be assumed that all of your Shares
held by us for your account are to be tendered.
<PAGE> 1
Exhibit (a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER. -- Social Security numbers have nine digits separated by two hyphens:
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: 00-0000000. The table below will help determine the number to give
the payer.
<TABLE>
<CAPTION>
- ----------------------------------------------------------
GIVE THE SOCIAL
SECURITY
FOR THIS TYPE OF ACCOUNT NUMBER OF
- ----------------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner of the
(joint account) account or, if combined
funds, the first
individual on the
account(1)
3. Husband and wife (joint The actual owner of the
account) account or, if joint
funds, either person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult, or if the
account) minor is the only
contributor, the
minor(1)
6. Account in the name of The ward, minor, or
guardian or committee for a incompetent person(1)
designated ward, minor, or
incompetent person
7. a. The usual revocable The grantor-trustee(1)
savings trust account
(grantor is also
trustee)
b. So-called trust account The actual owner(1)
that is not a legal or
valid trust under State
law
8. Sole proprietorship account The owner(3)
</TABLE>
<TABLE>
<CAPTION>
<C> <S> <C>
- ----------------------------------------------------------
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT NUMBER OF
- ----------------------------------------------------------
<C> <S> <C>
9. A valid estate or pension The legal entity (Do not
trust furnish the identifying
number of the personal
representative or
trustee unless the legal
entity itself is not
designated in the
account title.)(4)
10. Corporate account The corporation
11. Religious, charitable or The organization
educational organization
account
12. Partnership account held in The partnership
the name of the partnership
13. Association, club, or other The organization
tax-exempt organization
14. A broker or registered The broker or nominee
nominee
15. Account with the Department The public entity
of Agriculture in the name
of a public entity (such as
a State or local
government, school district
or prison) that receives
agricultural program
payments
</TABLE>
- ---------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Show the name of the owner.
(4) List first and circle the name of the legal trust, estate, or pension trust.
Do not furnish the taxpayer identification number of the personal
representative or trustee unless the legal entity itself is not designated
in the account title.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you do not know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
business and all other entities), at the local office of the Social Security
Administration or the Internal Revenue Service.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501 (a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584 (a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947 (a)(1).
- An entity registered at all times under the Investment Company Act of
1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding including the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one non-resident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049 (b)(5) to non-resident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER, ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045 and 6050A.
PRIVACY ACT NOTICE -- Section 6019 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Payers must generally withhold 31%
of taxable interest, dividends, and certain other payments to a payee who does
not furnish a taxpayer identification number to a payer. Certain penalties may
also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER -- If you fail
to furnish your taxpayer identification number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to a
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING -- If you
make a false statement with no reasonable basis which results in no
imposition of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION -- Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE> 1
Exhibit (a)(7)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares (as defined below). The Offer (as defined below) is
made solely by the Offer to Purchase dated June 25, 1999 and the related
Letter of Transmittal (and any amendments or supplements thereto), and
is being made to all holders of Shares. The Purchaser (as defined below)
is not aware of any state where the making of the Offer is prohibited
by administrative or judicial action pursuant to any valid state
statute. If the Purchaser becomes aware of any valid state statute
prohibiting the making of the Offer or the acceptance of Shares
pursuant thereto, the Purchaser shall make a good faith effort to
comply with such statute or seek to have such statute declared
inapplicable to the Offer. If, after such good faith effort,
the Purchaser cannot comply with such state statute, the
Offer will not be made to (nor will tenders be accepted
from or on behalf of) holders of Shares in such state.
In those jurisdictions where the securities, blue sky
or other laws require the Offer to be made by a
licensed broker or dealer, the Offer is being
made on behalf of the Purchaser by Wasserstein
Perella & Co., Inc. or one or more registered
brokers or dealers licensed under the laws
of such jurisdictions.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
HOLOPHANE CORPORATION
AT
$38.50 NET PER SHARE
BY
NSI ENTERPRISES, INC.
A WHOLLY OWNED SUBSIDIARY OF
NATIONAL SERVICE INDUSTRIES, INC.
NSI Enterprises, Inc., a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of National Service Industries, Inc., a Delaware
corporation ("Parent"), is offering to purchase all of the outstanding shares
of Common Stock, $.01 par value per share (the "Shares"), of Holophane
Corporation, a Delaware corporation (the "Company"), at a purchase price of
$38.50 per Share, net to the seller in cash, less any required withholding
taxes and without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated June 25, 1999 (the "Offer
to Purchase") and in the related Letter of Transmittal (which, as amended from
time to time, together constitute the "Offer").
----------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON FRIDAY, JULY 23, 1999, UNLESS THE OFFER IS EXTENDED
----------------------------------------------------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED
BELOW) AT LEAST A MAJORITY OF THE SHARES (DETERMINED ON A FULLY DILUTED BASIS)
OF THE COMPANY (THE "MINIMUM CONDITION") AND (II) THE EXPIRATION OR TERMINATION
OF ALL APPLICABLE WAITING PERIODS UNDER THE HART-SCOTT-RODINO ANTITRUST
IMPROVEMENTS ACT OF 1976, AS AMENDED.
The purpose of the Offer is to acquire control of, and the entire equity
interest in, the Company. Following the consummation of the Offer, the
Purchaser intends to effect the Merger described below. The Offer is being made
pursuant to an Agreement and Plan of Merger, dated as of June 20, 1999 (the
"Merger Agreement"), among Parent, the Purchaser and the Company. The Merger
Agreement provides, among other things, for the making of the Offer by the
Purchaser, and further provides that, following the completion of the Offer,
upon the terms and subject to the conditions of the Merger Agreement and the
Delaware General Corporation Law ("DGCL"), the Purchaser will be merged with
and into the Company (the "Merger"), and each Share outstanding immediately
prior to the effective time of the Merger (other than Shares held in the
treasury of the Company and each Share, if any, owned by Parent, the Purchaser
or any other direct or indirect subsidiary of Parent, of the Purchaser or of
the Company, which shall be cancelled, and other than Shares, if any, held by
stockholders who have not voted in favor of or consented to the Merger and who
have perfected their appraisal rights in accordance with the DGCL) will be
converted into the right to receive $38.50 in cash, less any required
withholding taxes and without interest thereon. The Merger Agreement is more
fully described in Section 11 of the Offer to Purchase.
THE BOARD OF DIRECTORS OF THE COMPANY (I) HAS UNANIMOUSLY DETERMINED THAT
THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING EACH
OF THE OFFER AND THE MERGER, ARE ADVISABLE AND ARE FAIR TO AND IN THE BEST
INTERESTS OF THE STOCKHOLDERS OF THE COMPANY, (II) HAS APPROVED THE OFFER AND
THE MERGER AND (III) RECOMMENDS THAT ALL HOLDERS OF THE SHARES ACCEPT THE OFFER
AND TENDER THEIR SHARES TO THE PURCHASER.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment (and thereby purchased) Shares validly tendered and not properly
withdrawn, if and when the Purchaser gives oral or written notice to First
Chicago Trust Company of New York (the "Depositary") of the 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 the Purchaser and transmitting such payments
to stockholders whose Shares have been accepted for payment. Under no
circumstances will interest on the purchase price for Shares be paid by the
Purchaser, regardless of any extension of the Offer or any delay in making such
payment. In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of (i) certificates for such Shares (the "Share Certificates") or timely
confirmation of a book-entry transfer of such Shares into the Depositary's
account at The Depositary Trust Company (the "Book-Entry Transfer Facility")
pursuant to the procedures set forth in Section 3 of the Offer to Purchase,
(ii) the Letter of Transmittal (or a facsimile thereof), properly completed and
duly executed, with any required signature guarantees, or an Agent's Message
(as defined in Section 2 of the Offer to Purchase) in connection with a
book-entry transfer, and (iii) any other documents required by the Letter of
Transmittal.
Subject to the applicable rules and regulations of the Securities and
Exchange Commission (the "Commission"), the Purchaser expressly reserves the
right to waive the Minimum Condition or any of the other conditions to the
Offer described in Section 15 of the Offer to Purchase, to increase the price
per Share payable in the Offer and to make any other change in the terms or
conditions of the Offer, provided that (i) the Purchaser shall not waive the
Minimum Condition without the consent of the Board of Directors of the Company
and (ii) without the consent of the Board of Directors of the Company, the
Purchaser shall not make any change in the terms or conditions of the Offer
which (A) changes the form of consideration to be paid, (B) decreases the price
per Share payable in the Offer, (C) reduces the maximum number of Shares to be
purchased in the Offer, (D) imposes conditions to the Offer in addition to
those set forth in the Merger Agreement, (E) extends the Expiration Date
(except as required by law or the applicable rules and regulations of the
Commission) or (F) amends any term of the Offer in any manner adverse to
holders of Shares; provided that the Purchaser shall have the right, in its
sole discretion, to extend the Offer on up to two separate occasions for up to
five business days each, notwithstanding the prior satisfaction of conditions
set forth in the Merger Agreement, in order to attempt to satisfy the Minimum
Condition or to satisfy the requirements of Section 253 of the DGCL. Any
extension, delay, termination, waiver or amendment will be followed as
promptly as practicable by public announcement 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. During any such extension all Shares previously
tendered and not properly withdrawn will remain subject to the Offer, subject
to the rights of a tendering stockholder to withdraw such stockholder's Shares.
The term "Expiration Date" means 12:00 Midnight, New York City time, on
Friday, July 23, 1999 unless and until the Purchaser, (subject to the terms
and conditions of the Merger Agreement), shall have extended the period during
which the Offer is open, in which event the term "Expiration Date" shall mean
the latest time and date at which the Offer, as so extended by the Purchaser,
shall expire.
Tenders of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time on or prior
to the Expiration Date and, unless theretofore accepted for payment by the
Purchaser pursuant to the Offer, may also be withdrawn at any time after
Monday, August 23, 1999. For a withdrawal to be effective, a written,
telegraphic, telex or facsimile transmission note of withdrawal must be timely
received by the Depositary at one of its addresses set forth on the back cover
of the Offer to Purchase. Any notice of withdrawal must specify the name of the
person who tendered such Shares to be withdrawn, the number of Shares to be
withdrawn and the name of the registered holder, if different from that of the
person who tendered such Shares. If Share Certificates to be withdrawn have
been delivered or otherwise identified to the Depositary, then prior to the
physical release of such certificates, the serial numbers shown on such
certificates must be submitted to the Depositary and the signature(s) on the
notice of withdrawal must be guaranteed by an Eligible Institution (as defined
in Section 3 of the Offer to Purchase) unless such Shares have been tendered
for the account of an Eligible Institution. If Shares have been tendered
pursuant to the procedure for book-entry transfer as set forth in Section 3 of
the Offer to Purchase, any notice of withdrawal must specify the name and
number of the account at the Book-Entry Transfer Facility to be credited with
the withdrawn Shares, in which case a notice of withdrawal will be effective if
delivered to the Depositary by any method of delivery described in the second
sentence of this paragraph. All questions as to the form and validity
(including time of receipt) of any notice of withdrawal will be determined by
the 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
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
The Company has provided the 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 the related Letter of Transmittal
and other relevant materials will be mailed by the Purchaser to record holders
of Shares and furnished to brokers, dealers, commercial banks, trust companies
and similar persons whose names, or the names of whose nominees, appear on the
stockholder list or, if applicable, who are listed as participants in a
clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS
MADE WITH RESPECT TO THE OFFER.
Questions and requests for assistance may be directed to the Dealer
Manager or the Information Agent as set forth below. Requests for copies of the
Offer to Purchase and the related Letter of Transmittal and all other tender
offer materials may be directed to the Information Agent or the Dealer Manager,
and copies will be furnished promptly at the Purchaser's expense. The Purchaser
will not pay any fees or commissions to any broker or dealer or any other person
(other than the Dealer Manager and the Information Agent) for soliciting
tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect (212) 259-5550
All Others Call Toll Free (800) 207-3155
The Dealer Manager for the Offer is:
WASSERSTEIN PERELLA & CO., INC.
31 West 52nd Street
New York, NY 10019
Call Collect (212) 969-2700
June 25, 1999
<PAGE> 1
Exhibit (a)(8)
Monday June 21, 6:01 am Eastern Time
Company Press Release
SOURCE: National Service Industries, Inc.
NSI to Acquire Holophane
Corporation for $38.50 Per Share in Cash
Strategic Acquisition Extends NSI's Position in North American Lighting
Equipment Business
ATLANTA and COLUMBUS, Ohio, June 21 /PRNewswire/ -- National Service Industries
(NYSE: NSI - news) and Holophane Corporation (NYSE: HLP - news) today announced
they have signed a definitive agreement under which NSI will acquire Holophane
for $38.50 per share in cash, or a total of approximately $450 million. The
transaction has been approved by the boards of directors of both companies and
is expected to be completed in the fourth quarter of NSI's fiscal 1999.
"Holophane is an excellent business with complementary products and customers
that make it an ideal strategic fit with Lithonia Lighting," said James S.
Balloun, NSI's chairman, president, and chief executive officer. The combination
will increase the scale and capabilities of NSI's lighting equipment segment.
With annual revenues of more than $1.1 billion, NSI's Lithonia Lighting is
currently the largest company in the highly fragmented North American lighting
equipment business. Holophane, with 1998 sales of $215 million, has a strong
presence in outdoor and industrial lighting equipment. This acquisition will
give NSI the leadership position in these growth segments. Holophane brings to
NSI a widely recognized brand, an innovative product development program,
significant manufacturing expertise, and a 225-person factory sales force that
is unique in the lighting equipment industry. Holophane will also expand NSI's
international lighting presence with more than $40 million in non-U.S. sales.
NSI will commence a cash tender offer for all of Holophane's outstanding common
shares by June 25, 1999. The transaction is subject to antitrust clearance, a
majority of Holophane's shares being
<PAGE> 2
tendered in the offer, and customary closing conditions. NSI will initially
finance the transaction with short-term debt. NSI plans to manage this debt and
its operating cash flow in a way that returns the company to its targeted 30-40%
debt-to-capital ratio before the end of fiscal year 2001.
NSI expects to achieve annual cost synergies of approximately $13 million by
2002 and to accelerate its lighting revenue growth as a result of sharing
capabilities between the companies. On a reported earnings basis, the
acquisition is expected to be dilutive by approximately $.13 per share in the
first fiscal year after closing and accretive by approximately $.13 per share in
the second year and approximately $.25-$.30 per share in the third year. Further
synergies and cost savings are expected beyond 2002.
"In such a fragmented market, the combined strengths of Lithonia and Holophane
will create a real powerhouse, second to none," continued Balloun. "Holophane
has built a strong reputation and widely recognized brand by providing
high-quality, reliable, and energy-efficient products. Lithonia will also
benefit from Holophane's product development expertise, especially in the area
of optical design, and its superb factory sales force, which is unusually
effective in understanding application requirements for its products and
identifying value-added solutions for its customers. All in all, Holophane's
vertically integrated manufacturing operations, strong market position in
industrial and outdoor lighting, extensive business with utilities and energy
service companies, and international capabilities will strengthen NSI's
leadership position in the lighting equipment business. At the same time,
Holophane can benefit from Lithonia's strengths, including extensive sales and
marketing capabilities, a broad product line, and recognized expertise in
information systems. This acquisition demonstrates our commitment to delivering
long-term value to our shareholders."
Said John R. DallePezze, chairman, president, and chief executive officer of
Holophane Corporation, "We are very pleased with this transaction, which
provides a full and fair price for Holophane shareholders while affording our
employees the opportunity to become part of a larger, more diversified
organization. I look forward to assisting in what I am sure will be a smooth
transition." Holophane's board has recommended that Holophane shareholders
tender their shares.
<PAGE> 3
NSI expects to realize the planned $13 million in cost synergies through
reductions in raw materials, components, and overhead. NSI has established a
post-acquisition team headed by John K. Morgan, executive vice president of
Lithonia, who will become general manager of Holophane. The post-acquisition
team, which will be comprised of senior executives of both companies, will
oversee the steps necessary to bring Holophane into NSI's lighting segment and
implement cost-saving and revenue-enhancement synergies. The work is expected to
be completed by the end of fiscal year 2000.
Wasserstein Perella & Co. served as financial advisor to NSI in this transaction
and will be dealer-manager for the tender offer. Salomon Smith Barney served as
financial advisor to Holophane in this transaction.
Holophane Corporation is a leading international manufacturer and marketer of
premium quality, highly engineered lighting fixtures and systems for a wide
range of industrial, commercial, and outdoor applications.
National Service Industries, Inc., with fiscal year 1998 sales of $2.0 billion,
has four business segments -- lighting equipment, chemicals, textile rental, and
envelopes. NSI has reported increased income and earnings per share in 35 of the
last 37 years. Dividends have been increased for 37 consecutive years and paid
for the past 63 years without a decrease.
Certain information contained in this press release is forward-looking
information based on current expectations and plans that involve risks and
uncertainties. The Private Securities Litigation Reform Act of 1995 provides a
safe harbor for forward-looking statements. Statements herein that may be
considered forward looking include: (a) statements made regarding the effect of
the Holophane acquisition on NSI's current business, growth expectations, and
market position; (b) statements made regarding the effect from Holophane's
operations on earnings per share; (c) statements made regarding the expectation
of sales and cost synergies resulting from the Holophane acquisition; (d)
statements made concerning targeted debt-to-capital ratios; and (e) statements
made concerning the process of bringing Holophane into the NSI organization. The
following factors, in addition to those discussed in the company's Annual Report
on Form 10-K for the year ended August 31, 1998 and subsequent securities
filings, could cause results to differ materially from management's expectations
<PAGE> 4
as suggested by such forward-looking information: (a) the uncertainty of general
business and economic conditions, particularly the potential for a slowdown in
non-residential construction awards; (b) unforeseen competitive reactions to the
acquisition; and (c) loss of key sales and management personnel due to the
acquisition.
<PAGE> 1
Exhibit (b)(2)
June 18, 1999
National Service Industries, Inc.
1420 Peachtree Street, NE
Atlanta, Georgia 30309-3002
Attn: Chester J. Popkowski
Vice President, Treasurer
RE: COMMITMENT LETTER
Gentlemen/Ladies:
National Service Industries, Inc., (the "Borrower"), has requested a
credit facility (the "Facility") in the aggregate principal amount of
$250,000,000 (the "Aggregate Commitment"). The First National Bank of Chicago is
pleased to offer to act as Syndication Agent (the "Syndication Agent") under the
Facility and to commit to make loans to the Borrower in the amount of up to
$125,000,000 (the "Syndication Agent Commitment") as part of the Facility and
Banc One Capital Markets, Inc. ("BOCM") is pleased to offer to act as arranger
(the "Arranger"), all on the terms and subject to the conditions set forth
herein and in the term sheet attached hereto (the "Term Sheet").
As Arranger, BOCM will use its best efforts to form a syndicate of
lenders (collectively, including the Syndication Agent in its capacity as a
lender, the "Lenders") to provide the additional commitments required to
complete the Facility. In the event that commitments in excess of the Aggregate
Commitment are received, the Arranger reserves the right to reduce the
Syndication Agent Commitment and to allocate commitments among the Lenders. The
Arranger, in consultation with the Borrower, will manage all aspects of the
syndication, including, without limitation, the timing of all offers to
potential Lenders, the acceptance of commitments and the amounts accepted. The
Borrower agrees to participate actively in the preparation of an information
package regarding the operations and prospects of the Borrower and the
presentation of the information to prospective Lenders.
The obligation of the Syndication Agent and the other Lenders to make
loans under the Facility is subject to the following: (i) the preparation,
execution and delivery of a credit agreement ("Credit Agreement") and other loan
documents (collectively, together with the Credit Agreement the "Loan
Documents") mutually acceptable to the Borrower and the Lenders incorporating,
without limitation, substantially the terms and conditions outlined herein and
in the Term Sheet; (ii) receipt of commitments from other Lenders on the terms
and conditions of the attached Term Sheet for the balance of the Aggregate
Commitment; (iii) the Syndication Agent's determination that there is no
material adverse change in the business, condition (financial or otherwise),
operations, performance, properties or prospects of the Borrower or any of its
subsidiaries from February 28, 1999; and (iv) the absence of any material
adverse change prior to closing in primary and secondary loan syndication
markets or capital markets generally.
<PAGE> 2
COMMITMENT LETTER
JUNE 18, 1999
PAGE 2
The Syndication Agent and the other Lenders have not had the
opportunity to complete their due diligence review, inspection and evaluation of
the assets and liabilities of the Borrower and its subsidiaries and their
respective financial condition and prospects. The Lenders' obligation to make
loans under the Facility is subject to their satisfaction with the foregoing and
their satisfaction with such other due diligence investigation as may be
necessary for the Lenders' credit evaluation.
The Borrower hereby agrees to reimburse the Syndication Agent and the
Arranger for all out-of-pocket expenses (including the reasonable fees, time
charges and expenses of attorneys for the Syndication Agent and the Arranger,
which attorneys may be employees of the Syndication Agent or the Arranger)
incurred in connection with the preparation, negotiation, execution, syndication
and enforcement of this commitment letter, the Term Sheet, any fee letter
delivered with the commitment, the Loan Documents and any other documentation
contemplated hereby or thereby. The Borrower hereby further agrees to indemnify
and hold harmless the Syndication Agent, the Arranger, the Lenders, and their
respective officers, employees, Syndication Agents and directors (each an
"indemnified party") against any and all losses, claims, damages, costs,
expenses (including the reasonable fees, time charges and expenses of attorneys
for the indemnified parties, which attorneys may be employees of the indemnified
parties) or liabilities of every kind whatsoever (collectively, the "Indemnified
Obligations") to which each of the indemnified parties may become subject in
connection in any way with the transaction which is the subject of this
commitment letter, including, without limitation, expenses incurred in
connection with investigating or defending against any liability or action
(whether or not such indemnified party is a party thereto), except that the
Borrower shall not be liable for any Indemnified Obligations of any indemnified
party to the extent any of the foregoing resulted from such indemnified party's
gross negligence or willful misconduct. Neither the Arranger, the Syndication
Agent nor any other Lender shall be liable under this commitment letter or any
Loan Document or in respect of any act, omission or event relating to the
transaction contemplated hereby or thereby, on any theory of liability, for any
special, indirect, consequential or punitive damages.
The Borrower's obligations under the immediately preceding paragraph
shall continue and are and shall remain absolute obligations of the Borrower,
unless and until superseded by the indemnity provisions of definitive Loan
Documents, whether or not Loan Documents are executed or any loan is made by the
Lenders or any conditions of lending are met. The obligations of the Arranger,
the Syndication Agent and the other Lenders under this commitment letter shall
be enforceable solely by the Borrower and may not be relied upon by any other
person.
This commitment letter, the Term Sheet and any fee letter delivered
with the commitment are for the Borrower's confidential use only and may not be
disclosed by it to any person other than its employees, attorneys and financial
advisors (but not commercial lenders), and then only in connection with the
proposed transaction and on a confidential basis, except where (in the
Borrower's judgment) disclosure is required by law or where the Syndication
Agent or the Arranger consents to the proposed disclosure, which consent shall
not be unreasonably withheld. Officers, directors, employees and agents of each
of the Arranger and the Syndication Agent shall at all times have the right to
share information received from the Borrower and its affiliates and their
respective officers, directors, employees and agents. The Syndication Agent
reserves the right to assign some or all of its rights and delegate some or all
of its responsibilities hereunder to one of its affiliates. This commitment
letter and the Term Sheet supersede any and all prior versions hereof or
thereof. This commitment letter may only be amended by a writing signed by all
parties hereto.
Please indicate the Borrower's acceptance of the commitment herein
contained in the space indicated below and return a copy of this commitment
letter so executed to the Arranger. By its acceptance hereof, the Borrower
agrees to pay the Syndication Agent and the Arranger the fees described in the
Term Sheet and any fee letter delivered therewith. This commitment will expire
at 5 p.m. on the fifth business day following the date hereof (where a "Business
Day" is a day other than a Saturday or Sunday when banks are generally open
<PAGE> 3
COMMITMENT LETTER
JUNE 18, 1999
PAGE 3
in Chicago), unless on or prior to such time the Arranger shall have received a
copy of this commitment letter executed by the Borrower, together with any
required fee. Notwithstanding timely acceptance of this commitment letter
pursuant to the preceding sentence, the commitment herein contained will
automatically terminate unless definitive Loan Documents are executed on or
before July 30, 1999.
IF THIS COMMITMENT LETTER, THE TERM SHEET, ANY FEE LETTER, OR ANY ACT,
OMISSION OR EVENT HEREUNDER OR THEREUNDER BECOMES THE SUBJECT OF A DISPUTE, THE
BORROWER, THE SYNDICATION AGENT AND THE ARRANGER EACH HEREBY WAIVE TRIAL BY
JURY. THIS COMMITMENT LETTER SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE
OF ILLINOIS.
Sincerely,
THE FIRST NATIONAL BANK OF CHICAGO,
individually and as Syndication Agent
By: /s/ David T. McNeela
---------------------------------
Title: Vice President
-------------------------------
BANC ONE CAPITAL MARKETS, INC.,
as Arranger
By: /s/ Nancy Dugan
---------------------------------
Title: Director
-------------------------------
ACCEPTED AND AGREED TO:
/s/ Brock A. Hattox
- -----------------------------------------
NATIONAL SERVICE INDUSTRIES, INC.
By: Brock A. Hattox
--------------------------------------
Title: Executive Vice President, CFO
-----------------------------------
<PAGE> 4
NATIONAL SERVICE INDUSTRIES, INC.
TERM SHEET
June 18, 1999
This Term Sheet is delivered with a commitment letter of even date
herewith (the "Commitment Letter") from The First National Bank of Chicago
("First Chicago") and Banc One Capital Markets, Inc. ("BOCM") to the Borrower.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings attributed to such terms in the Commitment Letter.
- --------------------------------------------------------------------------------
GENERAL TERMS
BORROWER: National Service Industries, Inc., a Delaware
corporation ("NSI") and domestic subsidiaries of NSI
designated in writing by NSI prior to execution of
the Credit Agreement (collectively, the "Borrower").
SYNDICATION
AGENT: First Chicago (the "Syndication Agent").
ADMINISTRATIVE
AGENT: Wachovia Bank (the "Administrative Agent", and with
First Chicago, the "Agents")
LEAD ARRANGER AND
BOOK RUNNER: BOCM (the "Arranger")
CO-LEAD ARRANGER: Wachovia Capital Markets (the "Co-Lead Arranger").
LENDERS: A group of lenders selected by the Borrower in
consultation with the Arranger (collectively,
together with the Agents in their capacity as
lenders, the "Lenders").
DOCUMENTATION: The Facility will be evidenced by a credit agreement
(the "Credit Agreement"), notes and other legal
documentation (collectively, together with the Credit
Agreement, the "Loan Documents") mutually
satisfactory to the Borrower and the Lenders, with
terms similar to the Borrower's existing credit
agreement dated as of July 23, 1996, as amended (the
"Existing Agreement").
<PAGE> 5
SYNDICATION
MANAGEMENT: The Arranger, in consultation with the Borrower, will
manage all aspects of the syndication including,
without limitation, the timing of offers to potential
Lenders, the amounts offered to potential Lenders,
the acceptance of commitments, and the compensation
provided. Without limiting the foregoing, upon the
Arranger's acceptance of any such commitment from a
Lender, each Agent shall be relieved of its
commitment to fund a pro rata share of such amount.
The Arranger shall, in its sole discretion, allocate
the commitments received from the Lenders.
FACILITY
TYPE: 364-day revolving credit facility (the "Facility") in
a maximum amount of up to $250,000,000 (the
"Aggregate Commitment").
PURPOSE: For commercial paper backup and other general
corporate purposes.
MATURITY: Final maturity shall be 364 days from the Closing
Date (as hereinafter defined), with an option to
extend the Facility for additional 364-day periods
with the consent of the Lenders. If any Lender (a
"Non-Extending Lender") does not consent to the
Borrower's request to extend the Facility for an
additional 364-day period, the Borrower shall have
the right to require the Non-Extending Lender to
assign its commitment and loans to another financial
institution, subject to the assignment provisions of
the Credit Agreement.
INTEREST RATES
RATE OPTIONS: At the Borrower's option, all as defined in the
Borrower's Existing Agreement:
-Base Rate
-Eurodollar plus the Applicable Margin as set
forth in the Pricing Schedule attached
hereto.
-Money Market Rate
The Credit Agreement will include customary
provisions (a) protecting the Lenders against
increased costs or loss of yield resulting from
changes in reserve, tax, capital adequacy and other
requirements of law and (b) indemnifying the Lenders
for breakage costs incurred in connection with among
other things, any prepayment of an Eurodollar loan on
a day other than the last day of an interest period
Page 2
<PAGE> 6
with respect thereto. After maturity or default, the
interest rate will be equal to the Base Rate plus 2%
per annum.
PROVISIONS RELATING
TO INTEREST RATES: Similar to the Existing Agreement.
FEES
FACILITY FEE: A facility fee equal to the per annum percentage
identified as the applicable Facility Fee in the
Pricing Schedule attached hereto multiplied by the
Aggregate Commitment, payable to the Administrative
Agent for the ratable benefit of the Lenders on the
date of execution of the Credit Agreement (the
"Closing Date") and quarterly in arrears.
UTILIZATION FEE: For any quarter in which the average daily
utilization of the Facility exceeds $62,500,000 (25%
of the Aggregate Commitment), a utilization fee equal
to the per annum percentage identified as the
applicable Utilization Fee in the Pricing Schedule
attached hereto multiplied by the average daily
utilization of the Facility, payable to the
Administrative Agent for the ratable benefit of the
Lenders quarterly in arrears from the Closing Date
until termination of the Facility.
SYNDICATION AGENT
AND
ARRANGER FEES: Such additional fees payable to the Syndication Agent
and the Arranger as are specified in the fee letter
dated June 18, 1999 among the Syndication Agent, the
Arranger and the Borrower.
ADMINISTRATIVE
AGENT FEE: Such additional fees payable to the Administrative
Agent specified in the fee letter dated June 18,
1999 among the Administrative Agent and the
Borrower.
PREPAYMENTS AND COMMITMENT REDUCTIONS
VOLUNTARY
COMMITMENT
REDUCTIONS: Similar to the Existing Agreement
Page 3
<PAGE> 7
VOLUNTARY
PREPAYMENTS: Similar to the Existing Agreement
CREDIT SUPPORT
GUARANTIES: Similar to Existing Agreement
CONDITIONS PRECEDENT
CONDITIONS TO
EACH LOAN: The Credit Agreement will contain customary
conditions to each loan (including absence of default
or unmatured default, absence of material litigation
and lack of material adverse change from the
Borrower's financial condition and operations as
reflected in the Borrower's consolidated financial
statements as of February 28, 1999 as previously
delivered to the Syndication Agent).
CONDITIONS TO
INITIAL LOAN: Additional conditions precedent to initial loan will
include, without limitation: (i) the delivery of
satisfactory loan and other closing documents,
including but not limited to the Credit Agreement,
appropriate resolutions, good standing certificates,
incumbency certificates and opinions of counsel, and
(ii) the delivery of written information reasonably
satisfactory to the Agent and the Lenders regarding
the Borrower's plan for addressing Year 2000 issues
and (iv) a compliance certificate from the chief
financial officer of the Borrower.
REPRESENTATIONS AND WARRANTIES, COVENANTS AND DEFAULTS
REPRESENTATIONS
AND WARRANTIES: The Credit Agreement will contain customary
representations and warranties to be made as of the
Closing Date and in connection with each loan similar
to representations and warranties contained in the
Existing Agreement, plus a reasonably required
representation regarding Year 2000 issues.
COVENANTS: The Credit Agreement will contain customary covenants
similar to the covenants contained in the Existing
Agreement, plus reasonably required Year 2000
compliance, and furnishing of quarterly and annual
financial statements, quarterly compliance
certificates and other financial information. The
Credit Agreement will also contain customary
restrictive covenants similar to the restrictive
covenants contained in the Existing Agreement.
Page 4
<PAGE> 8
FINANCIAL
COVENANTS: The Credit Agreement will contain certain financial
covenants, similar to the financial covenants
contained in the Existing Agreement, including, a
covenant pertaining to the following:
-leverage ratio
DEFAULTS: The Credit Agreement will contain customary events of
default similar to the events of default contained in
the Existing Agreement
OTHER PROVISIONS
ASSIGNMENTS AND
PARTICIPATIONS: Each Lender may, in its sole discretion, sell
participations in the loans and in its commitment.
Additionally, each of the Lenders will have the right
to sell assignments (and the Borrower shall release
the assignor Lender for the amount so assigned). The
consent of the Borrower and the Administrative Agent
shall be required for an assignee which is not a
Lender or an affiliate thereof (such consent not to
be unreasonably withheld or delayed); provided,
however, that if a default has occurred and is
continuing, the consent of the Borrower shall not be
required. Each such assignment shall be in an amount
not less than the lesser of (i) $10,000,000 or (ii)
the remaining amount of the assigning Lender's
commitment (calculated as at the date of such
assignment). An assignment fee of $3,000 will be
payable to the Administrative Agent for each
assignment. Each Lender may disclose information to
prospective participants and assignees.
REQUIRED LENDERS: 51% (Similar to Existing Agreement)
GOVERNING LAW: This Term Sheet and any related commitment letters
and fee letters are governed by the internal laws of
the State of Georgia.
EXPENSES: The expenses of the Agents and the
Arranger, whether incurred prior to or subsequent to
closing, in investigation, preparation, negotiation,
documentation, syndication, administration and
collection will be for the account of the Borrower,
including expenses of and fees for attorneys for the
Agents and the Arranger (who may or may not be
employees of the Agents or the Arranger) and other
advisors and professionals engaged by either the
Agents or the Arranger.
* * *
This Term Sheet is intended as an outline only and does not purport to summarize
all the conditions, covenants, representations, warranties and other provisions
which would be contained in definitive legal documentation for the financing
Page 5
<PAGE> 9
contemplated hereby. Any commitment of the Syndication Agent and Administrative
Agent and the other Lenders is subject to negotiation and execution of
definitive Loan Documents in form and substance satisfactory to the Lenders and
their respective counsel.
Page 6
<PAGE> 10
PRICING SCHEDULE
<TABLE>
<CAPTION>
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
STATUS STATUS STATUS STATUS STATUS
<S> <C> <C> <C> <C> <C>
Eurodollar margin 20.5 bps 32 bps 40 bps 47.5 bps 64 bps
Utilization Fee 10 bps 10 bps 15 bps 15 bps 20 bps
(usage >25%)
Facility Fee 7 bps 8 bps 10 bps 12.5 bps 16 bps
</TABLE>
For the purposes of this Schedule, the following terms have the
following meanings, subject to the final paragraph of this Schedule:
RATING-BASED PRICING
Pricing levels will be tied to the higher of the Company's senior unsecured
ratings from Moody's or Standard & Poors. In the event of a differential of two
or more levels between the rating agencies, the rating one below the higher
rating will be used to determine the pricing level.
"Level I Status" exists at any date if, on such date, the Borrower's
Moody's Rating is A2 or better the Borrower's S&P Rating is A or better.
"Level II Status" exists at any date if, on such date, (i) the Borrower
has not qualified for Level I Status and (ii) the Borrower's Moody's Rating is
A3 or better or the Borrower's S&P Rating is A- or better.
"Level III Status" exists at any date if, on such date, (i) the
Borrower has not qualified for Level I Status or Level II Status and (ii) the
Borrower's Moody's Rating is Baa1 or better or the Borrower's S&P Rating is BBB+
or better.
"Level IV Status" exists at any date if, on such date, (i) the Borrower
has not qualified for Level I Status or Level II Status or Level III Status and
(ii) the Borrower's Moody's Rating is Baa2 or better or the Borrower's S&P
Rating is BBB or better.
Page 7
<PAGE> 11
"Level V Status" exists at any date if, on such date, the Borrower has
not qualified for Level I Status, Level II Status, Level III Status, Level IV or
Level V Status.
"Moody's Rating" means, at any time, the rating issued by Moody's
Investors Service, Inc. and then in effect with respect to the Borrower's senior
unsecured long-term debt securities without third-party credit enhancement.
"S&P Rating" means, at any time, the rating issued by Standard and
Poor's Rating Services, a division of The McGraw Hill Companies, Inc., and then
in effect with respect to the Borrower's senior unsecured long-term debt
securities without third-party credit enhancement.
"Status" means Level I Status, Level II Status, Level III Status or
Level IV Status.
The Applicable Margin and Applicable Fee Rate shall be determined in
accordance with the foregoing table based on the Borrower's Status as determined
from its then-current Moody's and S&P Ratings. The credit rating in effect on
any date for the purposes of this Schedule is that in effect at the close of
business on such date. If at any time the Borrower has no Moody's Rating or no
S&P Rating, Level V Status shall exist.
Page 8
<PAGE> 1
Exhibit (b)(3)
June 18, 1999
Mr. Chester J. Popkowski
Vice President, Treasurer
National Service Industries, Inc.
NSI Center
1420 Peachtree Street, NE
Atlanta, GA 30309-3002
Dear Chet,
Re: $250 Million, 364-day Credit Facility
Reference is made to our numerous telephone conversations in recent days and
BOCM's Term Sheet, attached. Wachovia Bank is pleased to advise a commitment
to join BOCM/First Chicago with a $125 million underwriting of the Facility.
As is customary, our commitment is subject to satisfactory documentation. We
would appreciate your acknowledging acceptance of our commitment by signing
and returning a copy of this letter to my attention by Friday, June 25, 1999.
We appreciate the opportunity to play a significant role in this transaction
and look forward to working with you.
Sincerely,
/s/ Thomas L. Gleason
- ---------------------
Thomas L. Gleason
Senior Vice President
Accepted - National Service Industries, Inc.
/s/ Brock A. Hattox
-------------------------------------------
Signature/Date
<PAGE> 1
Exhibit (C)(1)
AGREEMENT AND PLAN OF MERGER
dated as of
June 20, 1999
among
HOLOPHANE CORPORATION
NATIONAL SERVICE INDUSTRIES, INC.
and
NSI ENTERPRISES, INC.
<PAGE> 2
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
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<S> <C>
ARTICLE I - THE OFFER.............................................................................................1
SECTION 1.01. The Offer.......................................................................................1
SECTION 1.02. Company Action..................................................................................2
ARTICLE II - THE MERGER...........................................................................................3
SECTION 2.01. The Merger......................................................................................3
SECTION 2.02. Conversion of Shares............................................................................4
SECTION 2.03. Surrender and Payment...........................................................................4
SECTION 2.04. Dissenting Shares...............................................................................5
SECTION 2.05. Stock Options...................................................................................5
ARTICLE III - THE SURVIVING CORPORATION...........................................................................6
SECTION 3.01. Certificate of Incorporation....................................................................6
SECTION 3.02. Bylaws..........................................................................................6
SECTION 3.03. Directors and Officers..........................................................................6
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................................................6
SECTION 4.01. Corporate Existence and Power...................................................................6
SECTION 4.02. Corporate Authorization.........................................................................7
SECTION 4.03. Governmental Authorization......................................................................7
SECTION 4.04. Non-Contravention...............................................................................7
SECTION 4.05. Capitalization..................................................................................8
SECTION 4.06. Subsidiaries....................................................................................8
SECTION 4.07. SEC Filings.....................................................................................9
SECTION 4.08. Financial Statements............................................................................9
SECTION 4.09. No Material Undisclosed Liabilities.............................................................9
SECTION 4.10. Absence of Certain Changes......................................................................9
SECTION 4.11. Litigation.....................................................................................10
SECTION 4.12. Employee Benefit Plans.........................................................................10
SECTION 4.13. Taxes..........................................................................................12
SECTION 4.14. Title to Properties; Encumbrances..............................................................13
SECTION 4.15. Environmental Laws.............................................................................13
SECTION 4.16. Intellectual Property..........................................................................14
SECTION 4.17. Year 2000 Compliance...........................................................................14
SECTION 4.18. Labor Matters..................................................................................15
SECTION 4.19. Employment Matters.............................................................................15
SECTION 4.20. Compliance with Laws...........................................................................16
SECTION 4.21. Contracts......................................................................................16
</TABLE>
i
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<TABLE>
<CAPTION>
<S> <C>
SECTION 4.22. Insurance.....................................................................................16
SECTION 4.23. Transactions with Affiliates..................................................................16
SECTION 4.24. Finders'Fees..................................................................................16
SECTION 4.25. Confidentiality Agreements....................................................................17
ARTICLE V - REPRESENTATIONS AND WARRANTIES
OF PARENT AND PURCHASER..........................................................................................17
SECTION 5.01. Corporate Existence and Power..................................................................17
SECTION 5.02. Corporate Authorization........................................................................17
SECTION 5.03. Governmental Authorization.....................................................................17
SECTION 5.04. Non-Contravention..............................................................................17
SECTION 5.05. Finders'Fees...................................................................................18
SECTION 5.06. Financing......................................................................................18
ARTICLE VI - COVENANTS OF THE COMPANY............................................................................18
SECTION 6.01. Conduct of the Company.........................................................................18
SECTION 6.02. Stockholder Meeting; Proxy Material............................................................20
SECTION 6.03. Disclosure Documents...........................................................................21
SECTION 6.04. Access to Information..........................................................................22
SECTION 6.05. Other Offers...................................................................................22
SECTION 6.06. Company Board Representation; Section 14(f)....................................................23
ARTICLE VII - COVENANTS OF PARENT AND PURCHASER..................................................................24
SECTION 7.01. Confidentiality................................................................................24
SECTION 7.02. Obligations of Purchaser.......................................................................24
SECTION 7.03. Disclosure Documents...........................................................................24
SECTION 7.04. Employee Matters...............................................................................25
ARTICLE VIII - COVENANTS OF PARENT, PURCHASER AND THE COMPANY....................................................26
SECTION 8.01. Reasonable Efforts.............................................................................26
SECTION 8.02. Certain Filings................................................................................26
SECTION 8.03. Public Announcements...........................................................................27
SECTION 8.04. Further Assurances.............................................................................27
SECTION 8.05. Notices of Certain Events......................................................................27
SECTION 8.06. Directors'and Officers'Indemnification and Insurance...........................................28
ARTICLE IX - CONDITIONS TO THE MERGER............................................................................29
SECTION 9.01. Conditions to the Obligations of Each Party....................................................29
</TABLE>
ii
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<TABLE>
<CAPTION>
<S> <C>
ARTICLE X - TERMINATION..........................................................................................30
SECTION 10.01. Termination...................................................................................30
SECTION 10.02. Effect of Termination.........................................................................31
SECTION 10.03. Fees and Expenses.............................................................................32
ARTICLE XI - MISCELLANEOUS.......................................................................................32
SECTION 11.01. Definitions...................................................................................32
SECTION 11.02. Notices.......................................................................................37
SECTION 11.03. Survival of Representations and Warranties....................................................38
SECTION 11.04. Amendments; No Waivers........................................................................38
SECTION 11.05. Successors and Assigns........................................................................38
SECTION 11.06. Governing Law.................................................................................39
SECTION 11.07. Severability..................................................................................39
SECTION 11.08. Counterparts; Effectiveness...................................................................39
Annex I - Conditions to the Offer
</TABLE>
iii
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of June 20, 1999 among HOLOPHANE
CORPORATION, a Delaware corporation (the "Company"), NATIONAL SERVICE
INDUSTRIES, INC., a Delaware corporation ("Parent"), and NSI ENTERPRISES, INC.,
a Delaware corporation and a wholly owned subsidiary of Parent ("Purchaser").
WHEREAS, the respective Boards of Directors of the Company, Parent and
Purchaser have determined that the merger of Purchaser with and into the Company
(the "Merger"), upon the terms and subject to the conditions set forth in this
Agreement, would be advisable and in the best interests of their respective
stockholders, and have approved the Merger, pursuant to which each Share issued
and outstanding immediately prior to the Effective Time, will, except as
otherwise provided herein, be converted into the right to receive $38.50 per
Share in cash;
WHEREAS, the Board of Directors of the Company has resolved to
recommend that the holders of such Shares accept the Offer and approve this
Agreement and, to the extent required by Delaware Law, the Merger and the
consummation of the transactions contemplated hereby upon the terms and subject
to the conditions set forth herein;
WHEREAS, in furtherance thereof, the Boards of Directors of Parent,
Purchaser and the Company have approved this Agreement, the Offer and the Merger
in accordance with Delaware Law and upon the terms and subject to the conditions
set forth herein;
WHEREAS, the Company, Parent and Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein,
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01. The Offer. (a) Provided that this Agreement shall not
have been terminated in accordance with Section 10.01 and that none of the
events set forth in Annex I hereto shall have occurred and are existing,
Purchaser shall, as promptly as practicable after the date hereof, but in no
event later than five business days following the public announcement of the
terms of this Agreement, commence an offer (the "Offer") to purchase any and all
of the outstanding shares of common stock, $.01 par value (the "Shares"), of the
Company at a price of $38.50 per Share, net to the seller in cash, less any
required withholding taxes. The Offer shall be subject to the condition that at
least a majority of the Shares (on a fully diluted basis) shall have been
validly tendered in accordance with the terms of the Offer prior to the
expiration date of the Offer and not withdrawn (the "Minimum Tender Condition")
and to the other conditions set forth
<PAGE> 6
in Annex I hereto. Purchaser expressly reserves the right to waive the Minimum
Tender Condition or any of the other conditions to the Offer, to increase the
price per Share payable in the Offer and to make any other change in the terms
or conditions of the Offer; provided that (i) the Purchaser shall not waive the
Minimum Tender Condition without the consent of the Board of Directors of the
Company and (ii) without the consent of the Board of Directors of the Company,
the Purchaser shall not make any change in the terms or conditions of the Offer
which (A) changes the form of consideration to be paid or (B) decreases the
price per Share payable in the Offer or (C) reduces the maximum number of Shares
to be purchased in the Offer or (D) imposes conditions to the Offer in addition
to those set forth in Annex I hereto or (E) extends the expiration date of the
Offer (except as required by law or the applicable rules and regulations of the
SEC) or (F) amends any term of the Offer in any manner adverse to holders of
Shares; provided that Purchaser shall have the right, in its sole discretion, to
extend the Offer on up to two separate occasions for up to five business days
each, notwithstanding the prior satisfaction of conditions set forth on Annex I
hereto, in order to attempt to satisfy the Minimum Tender Condition or to
satisfy the requirements of Section 253 of the Delaware General Corporation Law.
(b) Promptly upon commencement of the Offer, Parent and the Purchaser
shall file the Offer Documents with the SEC. Parent, the Purchaser and the
Company each agrees promptly to correct any information provided by it for use
in the Offer Documents if and to the extent that it shall have been found to be
or become false or misleading in any material respect. Parent and the Purchaser
agree to take all steps necessary to cause the Offer Documents as so corrected
to be filed with the SEC and to be disseminated to holders of Shares, in each
case as and to the extent required by applicable federal securities laws. The
Company and its counsel shall be given an opportunity to review and comment on
the Schedule 14D-l prior to the filing thereof with the SEC. Parent and the
Purchaser shall provide the Company and its counsel a copy of any written
comments or telephonic notification of any oral comments Parent or the Purchaser
may receive from the SEC or its staff with respect to the Offer Documents
promptly after the receipt thereof and shall provide the Company and its
respective counsel with a copy of any written responses thereto and telephonic
notification of any oral responses thereto of Parent or the Purchaser or their
counsel.
SECTION 1.02. Company Action. (a) The Company hereby consents to the
Offer and represents that its Board of Directors, at a meeting duly called and
held, has (i) determined that this Agreement and the transactions contemplated
hereby, including the Offer and the Merger, are fair to and in the best interest
of the Company's stockholders; (ii) approved this Agreement and the transactions
contemplated hereby, including the Offer and the Merger; and (iii) resolved to
recommend acceptance of the Offer and approval and adoption of this Agreement
and the Merger by its stockholders. The Company further represents that the
Company's financial adviser has delivered to the Company's Board of Directors
its opinion to the effect that, as of the date of this Agreement, the
consideration to be received in the Offer and the Merger by the holders of
Shares (other than Parent, Purchaser or any Affiliate thereof) is fair, from a
financial point of view, to such holders. The Company has been authorized by its
financial advisor to permit, subject to prior review and consent by such
financial advisor (such consent not to be unreasonably withheld), the inclusion
of such opinion (or a reference thereto) in the Offer Documents. The Company
hereby
2
<PAGE> 7
consents to the inclusion in the Offer Documents of the recommendation of the
Company's Board of Directors described in this Section 1.02. The Company will
promptly furnish Parent and Purchaser with a list of its stockholders, mailing
labels and any available listing or computer file containing the names and
addresses of all record holders of Shares and lists of securities positions of
Shares held in stock depositories, in each case true and correct in all material
respects as of the most recent practicable date, and will provide to Parent and
Purchaser such additional information (including, without limitation, updated
lists of stockholders, mailing labels and lists of securities positions) and
such other assistance as Parent and Purchaser may reasonably request, from time
to time in connection with the Offer.
(b) Promptly upon commencement of the Offer, the Company will file with
the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule
14D-9") which shall reflect the recommendations of the Company's Board of
Directors referred to above. The Company, Parent and Purchaser each agree
promptly to correct any information provided by it for use in the Schedule 14D-9
if and to the extent that it shall have been found to be or become false or
misleading in any material respect. The Company agrees to take all steps
reasonably necessary to cause the Schedule 14D-9 as so corrected to be filed
with the SEC and to be disseminated to holders of Shares, other than the
Purchaser, Parent and Parent's other subsidiaries, in each case as and to the
extent required by applicable federal securities laws. Parent and Purchaser and
their counsel shall be given an opportunity to review and comment on the
Schedule 14D-9 prior to its being filed with the SEC.
ARTICLE II
THE MERGER
SECTION 2.01. The Merger. (a) Subject to the terms and conditions of
this Agreement and in accordance with Delaware Law, at the Effective Time, the
Purchaser shall be merged with and into the Company, whereupon the separate
existence of Purchaser shall cease, and the Company shall be the surviving
corporation (the "Surviving Corporation").
(b) As soon as practicable after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger, the Company and
Purchaser will file a certificate of merger or, as appropriate, a certificate of
ownership and merger (either, a "Certificate of Merger") with the Secretary of
State of the State of Delaware and make all other filings or recordings required
by Delaware Law in connection with the Merger. The Merger shall become effective
at such time as the certificate of merger is duly filed with the Secretary of
State of the State of Delaware or at such later time as is specified in the
certificate of merger (the "Effective Time").
(c) From and after the Effective Time, the Surviving Corporation shall
possess all the rights, privileges, powers and franchises and be subject to all
of the restrictions, disabilities and duties of the Company and Purchaser, all
as provided under Delaware Law.
3
<PAGE> 8
SECTION 2.02. Conversion of Shares. At the Effective Time:
(a) each Share held by the Company as treasury stock or owned by the
Company, Purchaser, Parent or any of such parties' direct or indirect
subsidiaries immediately prior to the Effective Time shall be cancelled, and no
payment shall be made with respect thereto;
(b) each issued and outstanding share of common stock of Purchaser
outstanding immediately prior to the Effective Time shall be converted into and
become that number of shares of common stock of the Surviving Corporation that
equals the number of shares of common stock of the Company issued and
outstanding immediately prior to the Effective Time divided by the number of
shares of common stock of Purchaser issued and outstanding immediately prior to
the Effective Time; and
(c) each Share outstanding immediately prior to the Effective Time
shall, except as otherwise provided in Section 2.02(a) or as provided in Section
2.04 with respect to Dissenting Shares (as defined herein), be converted into
the right to receive $38.50 in cash, without interest (the "Merger
Consideration").
SECTION 2.03. Surrender and Payment. (a) Prior to the Effective Time,
Parent shall appoint an agent who shall be reasonably acceptable to the Company
(the "Exchange Agent") for the purpose of exchanging certificates representing
Shares for the Merger Consideration. Promptly, when and as needed, Parent will
make available to the Exchange Agent the Merger Consideration to be paid in
respect of the Shares. Promptly after the Effective Time, Parent will send, or
will cause the Exchange Agent to send, to each holder of Shares at the Effective
Time a letter of transmittal for use in such exchange (which shall specify that
the delivery shall be effected, and risk of loss and title shall pass, only upon
proper delivery of the certificates representing Shares to the Exchange Agent).
(b) Each holder of Shares that have been converted into a right to
receive the Merger Consideration, upon surrender to the Exchange Agent of a
certificate or certificates representing such Shares, together with a properly
completed letter of transmittal covering such Shares, will be entitled to
receive the Merger Consideration payable in respect of such Shares, less any
required withholding taxes. Until so surrendered, each such certificate shall,
after the Effective Time, represent for all purposes only the right to receive
such Merger Consideration.
(c) If any portion of the Merger Consideration is to be paid to a
Person other than the registered holder of the Shares represented by the
certificate or certificates surrendered in exchange therefor, it shall be a
condition to such payment that the certificate or certificates 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 Exchange Agent any transfer
or other taxes required as a result of such payment to a Person other than the
registered holder of such Shares or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable.
(d) After the Effective Time, there shall be no further registration of
transfers of Shares. If, after the Effective Time, certificates representing
Shares are presented to the Surviving
4
<PAGE> 9
Corporation, they shall be cancelled and exchanged for the consideration
provided for, and in accordance with the procedures set forth, in this Article
II.
(e) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 2.03(a) that remains unclaimed by the holders
of Shares six months after the Effective Time shall be returned to Parent, upon
demand, and any such holder who has not exchanged his Shares for the Merger
Consideration in accordance with this Section prior to that time shall
thereafter look only to Parent for payment of the Merger Consideration in
respect of his Shares. Notwithstanding the foregoing, Parent shall not be liable
to any holder of Shares for any amount paid to a public official pursuant to
applicable abandoned property laws.
(f) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 2.03(a) to pay for Dissenting Shares for
which appraisal rights have been perfected shall be returned to Parent, upon
demand.
SECTION 2.04. Dissenting Shares. Notwithstanding Section 2.02, Shares
outstanding immediately prior to the Effective Time and held by a holder who has
not voted in favor of the Merger or consented thereto in writing and who has
demanded appraisal for such Shares in accordance with Delaware Law ("Dissenting
Shares") shall not be converted into a right to receive the Merger
Consideration, unless such holder fails to perfect or withdraws or otherwise
loses his right to appraisal. If after the Effective Time such holder fails to
perfect or withdraws or loses his right to appraisal, such Shares shall be
treated as if they had been converted as of the Effective Time into a right to
receive the Merger Consideration. The Surviving Corporation shall give Parent
prompt notice of any demands received by the Company for appraisal of Shares,
and Parent shall have the right to participate in all negotiations and
proceedings with respect to such demands. The Surviving Corporation shall not,
except with the prior written consent of Parent, make any payment with respect
to, or settle or offer to settle, any such demands.
SECTION 2.05. Stock Options. As soon as practicable following the date
of this Agreement, upon the written request of the Purchaser, the Company (or,
if appropriate, any committee administering any stock option or compensation
plan or arrangement) and the Purchaser shall take such actions as are reasonably
required (including, if necessary, the provision of funds by the Purchaser to
the Company) to provide that at the Effective Time, each holder of a then
outstanding stock option and/or right to purchase Shares granted under any stock
option or compensation plan or arrangement of the Company (a "Company Stock
Option"), whether or not then exercisable, shall, upon surrender thereof to the
Company or its designee, receive from the Company the difference between the
Merger Consideration and the exercise price per Share for the Shares covered by
such Company Stock Option, net of any applicable tax withholding. Subject to the
terms and conditions set forth herein, the Company and such committee shall
further take all actions necessary to cause each Company Stock Option to be
canceled at the Effective Time by virtue of the Merger and to cause the stock
option or compensation plan or arrangements of the Company providing for the
granting of Company Stock Options ("Option Plans") to terminate as of the
Effective Time and the provisions in any other plan, program or arrangement
providing for the issuance or grant by the Company or any of its Subsidiaries of
any interest in respect of the capital stock of the Company or any of such
Subsidiaries to be
5
<PAGE> 10
terminated as of the Effective Time. Without limiting the generality of the
foregoing, the Company and such committee shall have given all requisite notices
under all Option Plans and any agreements with respect to any Company Stock
Option, accelerated the vesting of Company Stock Options and given holders
thereof the requisite opportunity to exercise as is required, in each case, such
that following the Effective Time no holder of Options or any participant in the
Option Plans or any other such plans, programs or arrangements shall have the
right thereunder to acquire any equity securities of the Company or any of its
Subsidiaries. The holders of Company Stock Options shall be entitled to enforce
this Section 2.05 against the Company, the Surviving Corporation and the
Purchaser.
ARTICLE III
THE SURVIVING CORPORATION
SECTION 3.01. Certificate of Incorporation. Subject to Section 8.06
hereof, the certificate of incorporation of the Company in effect at the
Effective Time shall be the certificate of incorporation of the Surviving
Corporation until amended in accordance with applicable law.
SECTION 3.02. Bylaws. Subject to Section 8.06 hereof, the bylaws of
Purchaser in effect at the Effective Time shall be the bylaws of the Surviving
Corporation until amended in accordance with applicable law.
SECTION 3.03. Directors and Officers. From and after the Effective
Time, until successors are duly elected or appointed and qualified in accordance
with applicable law, (i) the directors of Purchaser at the Effective Time shall
be the directors of the Surviving Corporation, and (ii) the officers of the
Company at the Effective Time shall be the officers of the Surviving
Corporation. If at the Effective Time, a vacancy shall exist on the Board of
Directors of the Company or in any office of the Surviving Corporation, such
vacancy may thereafter be filled in the manner provided by applicable law.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
Except as set forth in the disclosure schedule prepared and signed by
the Company and delivered to Purchaser simultaneously with the execution hereof
(the "Disclosure Schedule"), the Company represents and warrants to Parent and
Purchaser that, as of the date hereof (or, if made as of a specified date, as of
such date):
SECTION 4.01. Corporate Existence and Power. (a) The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, and has all requisite corporate powers and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted. The Company is duly
6
<PAGE> 11
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where the character of the property owned or leased by it or
the nature of its activities makes such qualification necessary, except for
those jurisdictions where the failure to be so qualified would not, individually
or in the aggregate, have or be reasonably likely to have a Material Adverse
Effect.
(b) The Company has heretofore made available to Parent and Purchaser
true and complete copies of the Company's certificate of incorporation and
bylaws as currently in effect. Such certificate of incorporation and bylaws are
in full force and effect, and no other organizational documents are applicable
or binding on the Company. The Company is not in violation in any material
respect of any of the provisions of its certificate of incorporation or bylaws.
SECTION 4.02. Corporate Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby are within the Company's corporate
powers and, except for any required approval by the Company's stockholders in
connection with the consummation of the Merger, have been duly authorized by all
necessary corporate action. This Agreement has been duly and validly executed
and delivered by the Company and constitutes a valid and binding agreement of
the Company. The Board of Directors of the Company has expressly approved this
Agreement (including as it may be amended from time to time) with the purpose of
rendering inapplicable hereto and to the Offer and the Merger the limitation on
business combinations contained in Section 203 of Delaware Law.
SECTION 4.03. Governmental Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation of the Merger
by the Company require no action by or in respect of, or filing with, any
Governmental Entity other than (i) the filing of the Certificate of Merger in
accordance with Delaware Law, (ii) the applicable requirements of the HSR Act
and (iii) compliance with any applicable requirements of the Securities Act and
the Exchange Act and the rules and regulations promulgated thereunder.
SECTION 4.04. Non-Contravention. Except as set forth in Section 4.04 of
the Disclosure Schedule and without giving effect to any change in the form of
the Merger as permitted by Section 8.07, the execution, delivery and performance
by the Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby do not and will not (i) contravene or conflict
with the certificate of incorporation or bylaws of the Company or any of its
Subsidiaries, (ii) assuming compliance with the matters referred to in Section
4.03, contravene or conflict with or constitute a violation of any provision of
any law, regulation, judgment, injunction, order or decree binding upon or
applicable to the Company or any of its Subsidiaries, (iii) constitute a default
under or give rise to a right of termination, cancellation or acceleration of
any right or obligation of the Company or any of its Subsidiaries or to a loss
of any benefit to which the Company or any of its Subsidiaries is entitled under
any provision of any agreement, contract or other instrument binding upon the
Company or any of its Subsidiaries or any license, franchise, permit or other
similar authorization held by the Company or any of its Subsidiaries, or (iv)
result in the creation or imposition of any Lien on any asset of
7
<PAGE> 12
the Company or any of its Subsidiaries, except, in the case of clauses (ii),
(iii) and (iv), for such exceptions which would not, individually or in the
aggregate, have or be reasonably likely to have a Material Adverse Effect.
SECTION 4.05. Capitalization. The authorized capital stock of the
Company consists of one million (1,000,000) shares of preferred stock, par value
$.01 per share (the "Preferred Stock"), and twenty million (20,000,000) shares
of Common Stock, par value $.01 per share. As of June 15, 1999, there were (a)
no shares of Preferred Stock and 10,564,265 shares of Common Stock outstanding
(excluding 1,331,595 shares of Common Stock held in treasury), (b) outstanding
Company Stock Options to purchase an aggregate of 1,432,330 Shares (of which
Company Stock Options to purchase an aggregate of 914,430 Shares were
exercisable), (c) up to 69,000 Shares issuable under the Company's Employee
Stock Option (Purchase) Plan, (d) up to 9,000 Shares issuable under the
Company's Performance Award Plan and (e) up to 154,590 Shares issuable pursuant
to Section 2.02 of the MetalOptics Stock Purchase Agreement. All outstanding
shares of capital stock of the Company have been duly authorized and validly
issued and are fully paid and nonassessable and were issued free of any
preemptive or similar rights. Except as set forth in this Section 4.05, and
except for changes since June 15, 1999 resulting from the exercise of Company
Stock Options outstanding on such date, there are outstanding (i) no shares of
capital stock or other voting securities of the Company, (ii) no securities of
the Company convertible into or exchangeable for shares of capital stock or
voting securities of the Company, and (iii) no options or other rights to
acquire from the Company, and no obligation of the Company to issue, any capital
stock, voting securities or securities convertible into or exchangeable for
capital stock or voting securities of the Company (the items in clauses (i),
(ii) and (iii) being referred to collectively as the "Company Securities").
There are no outstanding obligations of the Company or any of its Subsidiaries
to repurchase, redeem or otherwise acquire any Company Securities.
SECTION 4.06. Subsidiaries. (a) Each Subsidiary of the Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted and is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except for those jurisdictions where failure
to be so qualified would not, individually or in the aggregate, have a Material
Adverse Effect. All of the Company's Subsidiaries and their respective
jurisdictions of incorporation are identified in Exhibit 21 to the Company's
annual report on Form 10-K for the fiscal year ended December 31, 1998 .
(b) All of the outstanding capital stock of, or other ownership
interests in, each of the Company's Subsidiaries, is, unless otherwise required
by applicable law, 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 ownership interests). There are no outstanding (i) securities of
the Company or any of its Subsidiaries convertible into or exchangeable for
shares of capital stock or other voting securities or ownership interests in any
Subsidiary, and (ii) options or other rights to acquire from the
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Company or any of its Subsidiaries, and no other obligation of the Company or
any of its Subsidiaries to issue, any capital stock, voting securities or other
ownership interests in, or any securities convertible into or exchangeable for
any capital stock, voting securities or ownership interests in, any Subsidiary
(the items in clauses (i) and (ii) being referred to collectively as the
"Subsidiary Securities"). There are no outstanding obligations of the Company or
any of its Subsidiaries to repurchase, redeem or otherwise acquire any
outstanding Subsidiary Securities.
SECTION 4.07. SEC Filings. (a) The Company has filed with the SEC and
made available to Parent and Purchaser (i) the annual reports on Form 10-K for
its fiscal years ended December 31, 1998, 1997 and 1996 and its quarterly report
on Form l0-Q for its fiscal quarter ended March 31, 1999 (the income statements,
balance sheets and other financial statements, and the notes thereto, included
in such filings being referred to herein as the "Financial Statements"), (ii)
its proxy or information statements relating to meetings of, or actions taken
without a meeting by, the stockholders of the Company held since January 1, 1996
and (iii) all other reports, statements, schedules and registration statements
required to be filed with the SEC since January 1, 1996.
(b) As of its filing date, each such report, statement or schedule
filed with the SEC did 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.
SECTION 4.08. Financial Statements. The Financial Statements fairly
present, in all material respects, in conformity with GAAP (except as may be
indicated in the notes thereto), the consolidated financial position of the
Company and its consolidated Subsidiaries as of the dates thereof and their
consolidated results of operations and changes in financial position for the
periods then ended (subject to normal year-end adjustments and the absence of
notes thereto in the case of any unaudited interim Financial Statements).
SECTION 4.09. No Material Undisclosed Liabilities. Except (a) as
disclosed in the Financial Statements or the other documents referred to in
Section 4.07 or in the Company SEC Documents and (b) liabilities incurred in
connection with the Offer or the Merger which, to the extent they have been
incurred or were known prior to the date hereof, are disclosed in Section 4.09
of the Disclosure Schedule, neither the Company nor any of its Subsidiaries has
any liabilities or obligations of any nature, whether or not accrued, contingent
or otherwise, that have, or would be reasonably likely to have, a Material
Adverse Effect.
SECTION 4.10. Absence of Certain Changes. Since the Balance Sheet Date,
except as disclosed in the Company SEC Documents filed prior to the date hereof
or as disclosed in Section 4.10 of the Disclosure Schedule, the Company and each
Subsidiary has conducted its respective business only in the ordinary and usual
course, and there has not occurred (i) any event or change having or reasonably
likely to have a Material Adverse Effect; (ii) any material change by the
Company in its accounting methods, principles or practices; (iii) any
revaluation by the Company of any of its material assets; (iv) any declaration,
setting aside or payment of any dividends or distributions in respect of the
Shares; (v) any increase in or establishment of any bonus, insurance,
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severance, defined compensation, pension, retirement, profit sharing, stock
option (including the granting of stock options, stock appreciation rights,
performance awards or restricted stock awards), stock purchase or other employee
benefit plan or agreement or arrangement, or any other increase in the
compensation payable or to become payable to any present or former directors,
officers or employees of the Company or any of its Subsidiaries, other than
merit or equity increases in the ordinary course of business consistent with
past practice with respect to employees who are not directors or officers of the
Company or any of its Subsidiaries; or (vi) any other action which, if it had
been taken after the date hereof, would have required the consent of Parent
under Section 6.01 hereof.
SECTION 4.11. Litigation. Except as disclosed in Section 4.11 of the
Disclosure Schedule, as of the date hereof, there is no action, suit, inquiry,
proceeding or investigation by or before any court or governmental or other
regulatory or administrative agency or commission pending or, to the knowledge
of the Company, threatened against or involving the Company or any of its
Subsidiaries which, if determined or resolved adversely to the Company or such
Subsidiary, would be reasonably likely to have a Material Adverse Effect. Except
as disclosed in Section 4.11 of the Disclosure Schedule, neither the Company nor
any of its Subsidiaries is subject to any material judgment, order or decree.
SECTION 4.12. Employee Benefit Plans. (a) Section 4.12(a) of the
Disclosure Schedule contains a true and complete list of each deferred
compensation and each incentive compensation, stock purchase, stock option and
other equity compensation plan, program, agreement or arrangement (the "Company
Stock Plans"); each severance or termination pay, medical, surgical,
hospitalization, life insurance and other "welfare" plan, fund or program
(within the meaning of Section 3(1) of the ERISA); each profit-sharing, stock
bonus or other "pension" plan, fund or program (within the meaning of Section
3(2) of ERISA); each employment, termination or severance agreement; and each
other employee benefit plan, fund, program, agreement or arrangement, in each
case, that is sponsored, maintained or contributed to or required to be
contributed to by the Company or by any ERISA Affiliate, or to which the Company
or an ERISA Affiliate is party, whether written or oral, for the benefit of any
employee or former employee of the Company or any Subsidiary (each, a "Plan").
Neither the Company, any Subsidiary nor any ERISA Affiliate has any commitment
or formal plan or announced intention to create, any additional employee benefit
plan or modify or change any existing Plan that would affect any employee or
former employee of the Company or any Subsidiary, except for modifications or
changes contemplated herein or required by law as a condition of obtaining or
retaining the Company's intended ERISA, tax, securities or accounting treatment
with respect to such Plan.
(b) The Company has heretofore delivered to Parent true and complete
copies of each Plan currently in effect and any and all amendments thereto (or
if a Plan is not a written Plan, a description thereof), any related trust or
other funding vehicle, any reports or summaries required under ERISA or the Code
and the most recent determination letter received from the Internal Revenue
Service with respect to each Plan intended to qualify under Section 401 of the
Code.
(c) No liability under Title IV or Section 302 of ERISA has been
incurred by the Company or any ERISA Affiliate that has not been satisfied in
full, and no condition exists
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that presents a material risk to the Company or any ERISA Affiliate of incurring
any such liability, other than liability for premiums due the PBGC (which
premiums have been paid when due). Insofar as the representation made in this
Section 4.12(c) applies to Sections 4064, 4069 or 4204 of Title IV of ERISA, it
is made with respect to any employee benefit plan, program, agreement or
arrangement subject to Title IV of ERISA to which the Company or any ERISA
Affiliate made, or was required to make, contributions during the five year
period ending on the last day of the most recent plan year ended prior to the
Closing Date and any part of a plan year ending on the Closing Date.
(d) The PBGC has not instituted proceedings to terminate any Title IV
Plan and no condition exists that presents a material risk that such proceedings
will be instituted.
(e) With respect to each Title IV Plan, the present value of accrued
benefits under such plan, based upon the actuarial assumptions used for funding
purposes in the most recent actuarial report prepared by such plan's actuary
with respect to such plan, did not exceed, as of its latest valuation date, the
then current value of the assets of such plan allocable to such accrued
benefits. Except as set forth in Section 4.12(e) of the Disclosure Schedule, the
fair market value of the assets of each other Plan as of the end of its most
recent plan year at least equaled it liabilities or, as for a Plan which is
unfunded, its liabilities are shown on the Financial Statements.
(f) No Title IV Plan or any trust established thereunder has incurred
any "accumulated funding deficiency" (as defined in Section 302 of ERISA and
Section 412 of the Code), whether or not waived, as of the last day of the most
recent fiscal year of each Title IV Plan ended prior to the Closing Date. All
contributions required to be made with respect to any Plan on or prior to the
Closing Date have been timely made.
(g) No Title IV Plan is a "multi-employer pension plan," as defined in
Section 3(37) of ERISA, nor is any Title IV Plan a plan described in Section
4063(a) of ERISA. Neither the Company nor any ERISA Affiliate has made or
suffered a "complete withdrawal" or a "partial withdrawal," as such terms are
respectively defined in Sections 4203 and 4205 of ERISA (or any liability
resulting therefrom has been satisfied in full).
(h) Neither the Company or any Subsidiary, any Plan, any trust created
thereunder, nor any trustee or administrator thereof has engaged in a
transaction in connection with which the Company or any Subsidiary, any Plan,
any such trust, or any trustee or administrator thereof, or any party dealing
with any Plan or any such trust could reasonably be expected to be subject to
either a civil penalty assessed pursuant to Section 409 or 502(i) of ERISA or a
tax imposed pursuant to Section 4975 or 4976 of the Code.
(i) Each Plan has been operated and administered in all material
respects in accordance with its terms and applicable law, including, but not
limited to, ERISA and the Code, except where the failure to so operate or
administer such Plan would not be reasonably likely to have a Material Adverse
Effect.
(j) Each Plan intended to be "qualified" within the meaning of Section
401(a) of the Code is so qualified, and the trusts maintained thereunder are
exempt from taxation under Section 501(a) of the Code. Each Plan intended to
satisfy the requirements of Section 501(c)(9) has satisfied such requirements.
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(k) No Plan provides medical, surgical, hospitalization, death or
similar benefits (whether or not insured) for employees or former employees of
the Company or any Subsidiary for periods extending beyond their retirement or
other termination of service, other than (i) coverage mandated by applicable
law, (ii) death benefits under any "pension plan," or (iii) benefits the full
cost of which is borne by the current or former employee (or his beneficiary).
(l) Except as set forth in Section 4.12(l) of the Disclosure Schedule,
no amounts payable under the Plans will fail to be deductible for federal income
tax purposes by virtue of Section 280G of the Code.
(m) Except as set forth in Section 4.12(m) of the Disclosure Schedule
or as expressly provided in this Agreement, the consummation of the Merger will
not, either alone or in combination with another event, (i) entitle any current
or former employee or officer of the Company or any ERISA Affiliate to severance
pay, unemployment compensation or any other payment or (ii) accelerate the time
of payment or vesting, or increase the amount of compensation due any such
employee or officer.
(n) There are no pending or, to the knowledge of the Company,
threatened claims by or on behalf of any Plan, by any employee or beneficiary
covered under any such Plan, or otherwise involving any such Plan (other than
routine claims for benefits).
SECTION 4.13 Taxes. (a) The Company and its Subsidiaries (and any
consolidated, combined, unitary or aggregate group for tax purposes of which the
Company or any of its Subsidiaries is a member) timely filed (or have had timely
filed on their behalf) with the appropriate Tax Authorities all material Tax
Returns required to be filed by Company and its Subsidiaries and such Tax
Returns are true, correct, and complete in all material respects;
(b) The Company and its Subsidiaries have paid, or where payment is not
yet due, have established (or have had established on their behalf and for their
sole benefit and recourse) an adequate accrual in accordance with GAAP for the
payment of, all Taxes (as hereinafter defined) for all periods ending through
the Closing Date;
(c) There are no material Liens for Taxes upon any property or assets
of the Company or any of its Subsidiaries, except for Liens for Taxes not yet
due or being contested in good faith and for which adequate reserves have been
established in accordance with GAAP;
(d) Except as set forth in Section 4.13(d) of the Disclosure Schedule,
no federal, state, local or foreign audits, investigations, claims or other
administrative proceedings ("Audits") are presently pending with regard to any
material Taxes or material Tax Returns of the Company or any of its
Subsidiaries, and to the knowledge of the Company, no Audit is threatened.
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SECTION 4.14. Title to Properties; Encumbrances. Each of the Company
and its Subsidiaries has good, valid and marketable title to all the material
properties and assets which it purports to own (real, personal and mixed,
tangible and intangible), including, without limitation, all the properties and
assets reflected in the Balance Sheet (except for property disposed of since the
Balance Sheet Date in the ordinary course of business and consistent with past
practice), and all the material properties and assets purchased by the Company
and the Company Subsidiaries since the Balance Sheet Date, which subsequently
acquired material properties and assets (other than inventory and short term
investments) are listed in Section 4.14 of the Disclosure Schedule. All
properties and assets reflected in the Balance Sheet are free and clear of all
Liens except, with respect to all such properties and assets, (a) Liens shown on
the Balance Sheet and Liens incurred in connection with the purchase of such
property and/or assets, if such purchase was effected after the date of the
Balance Sheet, with respect to which no default exists; (b) Liens which do not
materially detract from the value or impair the use of the property subject
thereto, or materially impair the operations of the Company or any of its
Subsidiaries; and (c) Liens for current Taxes not yet due.
SECTION 4.15. Environmental Laws. Except as disclosed in the Company
SEC Documents filed prior to the date hereof, (a) the Company and each of its
Subsidiaries are, and within the period of all applicable statutes of
limitations have been, in compliance with all Environmental Laws, including, but
not limited to, compliance with any permits or other governmental authorizations
or any Governmental Entity decrees, orders or judgments or the terms and
conditions thereof except where the failure to so comply would not be reasonably
likely to have a Material Adverse Effect or otherwise require disclosure in the
Company SEC Documents; (b) neither the Company nor any of its Subsidiaries has
received any communication or notice, whether from a Governmental Entity or
otherwise, alleging any violation of or noncompliance with any Environmental
Laws by the Company or any of its Subsidiaries or for which the any of them is
responsible, and there is no pending or, to the Company's knowledge, threatened
Environmental Claim, except where such Environmental Claim would not be
reasonably likely to have a Material Adverse Effect or otherwise require
disclosure in the Company SEC Documents; and (c) to the Company's knowledge,
there are no past or present facts or circumstances that could form the basis of
any Environmental Claim against the Company or any of its Subsidiaries or
against any person or entity whose liability for any Environmental Claim the
Company or any of its Subsidiaries has retained or assumed either contractually
or by operation of law, except where such Environmental Claim, if made, would
not be reasonably likely to have a Material Adverse Effect or otherwise require
disclosure in the Company SEC Documents. All material permits and other
governmental authorizations currently held or required to be held by the Company
and its Subsidiaries pursuant to any Environmental Laws are identified in
Section 4.15 of the Disclosure Schedule. The Company has provided to Parent all
material assessments, reports, data, results of investigations or audits,
correspondence and other information that is in the possession of the Company
regarding environmental matters pertaining to, or the environmental condition of
the business, property or assets of, the Company and its Subsidiaries, or the
compliance (or noncompliance) by the Company or any of its Subsidiaries with any
Environmental Laws.
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SECTION 4.16. Intellectual Property. (a) The Company owns or has the
right to use all the Company's Intellectual Property, free and clear of all
Liens, except where the failure to own or possess such Intellectual Property
would not be reasonably likely to have a Material Adverse Effect. The Company or
one of its Subsidiaries is listed in the records of the appropriate United
States, state or foreign agency as the sole owner of record for all material
applications, registrations or patents included in the Company's Intellectual
Property, and all of the foregoing are listed on Section 4.16(a) of the
Disclosure Schedule and are validly subsisting.
(b) Section 4.16(b) of the Disclosure Schedule sets forth a list of all
license agreements under which the Company or any of its Subsidiaries has
granted the right to use the Company's Intellectual Property or received the
right to use any Intellectual Property of any third party.
(c) Except as set forth in Section 4.16(c) of the Disclosure Schedule,
no person has a right to receive a royalty or similar payment in respect of any
item of the Intellectual Property pursuant to any contractual arrangements
entered into by the Company or otherwise. To the knowledge of the Company, no
former or present employees, officers or directors of the Company hold any
right, title or interest, directly or indirectly, in whole or in part, in or to
any of the Company's Intellectual Property.
(d) To the knowledge of the Company, the conduct of the business of the
Company does not materially violate or infringe upon any Intellectual Property
right of any third party, and there is no pending or threatened opposition,
interference, re-examination, cancellation, claim of invalidity or other legal
or governmental proceeding in any jurisdiction involving any of the Company's
Intellectual Property. There are no claims or suits pending or, to the knowledge
of the Company, threatened, and the Company has received no written notice of
any claim or suit (i) alleging that the conduct of the Company's business
infringes upon or constitutes the unauthorized use of the proprietary rights of
any third party or (ii) challenging the ownership, use, validity or
enforceability of the Company's Intellectual Property which, if adversely
determined, would be reasonably likely to have a Material Adverse Effect. Except
as set forth in Section 4.16(d) of the Disclosure Schedule, to the knowledge of
the Company, none of the Intellectual Property of the Company is being violated
or infringed upon by any third party. There are no settlements, consents,
judgments, orders or other agreements which restrict the Company's rights to use
any of its Intellectual Property.
SECTION 4.17. Year 2000 Compliance. Except as set forth in Section 4.17
of the Disclosure Schedule, the Company has taken commercially reasonable steps
to ensure that all Date Data and Date-Sensitive Systems of the Company and its
Subsidiaries will be Year 2000 Compliant by December 31, 1999. Except as set
forth in Section 4.17 of the Disclosure Schedule, all statements made by the
Company since January 1, 1997 in the Company SEC Documents concerning the Year
2000 Compliant status of its Date Data and Date-Sensitive Systems did not
contain a material misstatement of fact or omit to state a material fact
necessary to be stated therein in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. As used herein:
(i) "Date Data" means any data of any type that includes date information or
which is otherwise derived from, dependent on or related to date
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information, (ii) "Date-Sensitive System" means any software, microcode or
hardware system or component, including any electronic or electronically
controlled system or component, that processes any Date Data and that is
installed, in development or on order by the Company or any of its Subsidiaries
for its internal use, or which the Company or any of its Subsidiaries sells,
leases, licenses, assigns or otherwise provides, or the provision or operation
of which the Company or any of its Subsidiaries provides the benefit, to its
customers, vendors, suppliers, affiliates or any other third party, and (iii)
"Year 2000 Compliant" means (A) with respect to Date Data, that such data is in
proper format and accurate for all dates in the twentieth and twenty-first
centuries, and (B) with respect to Date-Sensitive Systems, that each such system
accurately processes all Date Data, including for the twentieth and twenty-first
centuries, without loss of any functionality, including but not limited to
calculating, comparing, sequencing, storing and displaying such Date Data
(including all leap year considerations), when used as a stand-alone system or
in combination with other software or hardware.
SECTION 4.18. Labor Matters. Section 4.18 of the Disclosure Schedule
sets forth each collective bargaining or similar agreement between the Company
or any of its Subsidiaries with any labor organization or employee association.
Except as set forth in Section 4.18 of the Disclosure Schedule, none of the
employees of the Company or any of its Subsidiaries is represented by any labor
organization or covered by any collective bargaining or similar agreement.
Except as set forth in Section 4.18 of the Disclosure Schedule, within the past
12 months, neither the Company nor any of its Subsidiaries has received notice
from any union of its desire to terminate any collective bargaining agreements
or of its intention to seek to organize any employees of the Company or its
Subsidiaries. Except as set forth in Section 4.18 of the Disclosure Schedule,
there is no unfair labor practice charge or complaint against the Company or any
of its Subsidiaries pending or, to the knowledge of the Company, threatened
before the National Labor Relations Board. There is no labor strike, dispute,
slowdown, stoppage or lockout actually pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of its Subsidiaries
and, except as set forth in Section 4.18 of the Disclosure Schedule, during the
past five years there has not been any such action. There is no grievance or
arbitration proceeding which would be reasonably likely to have a Material
Adverse Effect.
SECTION 4.19. Employment Matters. Section 4.19 of the Disclosure
Schedule sets forth a list of all employment contracts or severance agreements
with any employees of the Company or any of its Subsidiaries. The Company has
provided each of such contracts or agreements, as well as all written personnel
policies, rules or procedures applicable to employees of the Company or any of
its Subsidiaries, to Parent. Except as set forth in Section 4.19 of the
Disclosure Schedule, the Company and its Subsidiaries are not parties to, or
bound by, any employment agreement or any other arrangement or understanding
with any Person that provides for the payment of any consideration by the
Company or any of its Subsidiaries or the Surviving Corporation to such Person
or creates any other rights or obligations as a result of a change in control of
the Company or the consummation of any of the transactions contemplated by this
Agreement.
SECTION 4.20. Compliance with Laws. The Company and its Subsidiaries
are in compliance with, and have not violated any applicable law, rule or
regulation of any United States federal, state, local, or foreign government or
agency thereof except where such non-compliance
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or violation would not be reasonably likely to have a Material Adverse Effect,
and no notice, charge, claim, action or assertion has been received by the
Company or any of its Subsidiaries or has been filed, commenced or, to the
Company's knowledge, threatened against the Company or any of its Subsidiaries
alleging any such violation, except for any matter which is not reasonably
likely to have a Material Adverse Effect. All licenses, permits and approvals
required under such laws, rules and regulations are in full force and effect
except where the failure to be in full force and effect would not be reasonably
likely to have a Material Adverse Effect.
SECTION 4.21. Contracts. Each Company Agreement is valid, binding and
enforceable and in full force and effect, except where failure to be valid,
binding and enforceable and in full force and effect would not be reasonably
likely to have a Material Adverse Effect, and there are no defaults thereunder,
except those defaults that would not be reasonably likely to have a Material
Adverse Effect. Section 4.21 of the Disclosure Schedule sets forth a true and
complete list of all material Company Agreements entered into by the Company or
any of the Company Subsidiaries since December 31, 1998 and all amendments to
any Company Agreements included as an exhibit to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1998.
SECTION 4.22. Insurance. Section 4.22 of the Disclosure Schedule
contains an accurate and complete description of all material policies of fire,
liability, workmen's compensation and other forms of insurance owned or held by
the Company or any of its Subsidiaries. All such policies are in full force and
effect, all premiums due and payable have been paid, and no notice of
cancellation or termination has been received with respect to any such policy.
SECTION 4.23. Transactions with Affiliates. Except to the extent
disclosed in the Company SEC Documents filed prior to the date of this Agreement
or as disclosed in Section 4.23 of the Disclosure Schedule, since December 31,
1998, there have been no transactions, agreements, arrangements or
understandings between the Company and any Person that would be required to be
disclosed under Item 404 of Regulation S-K under the Securities Act.
SECTION 4.24. Finders' Fees. Except for Salomon Smith Barney Inc., the
fees of which have been disclosed to Parent and Purchaser, there is no
investment banker, broker, finder or other intermediary which has been retained
by, or is authorized to act on behalf of, the Company or any of its
Subsidiaries, and which might be entitled to any fee or commission from
Purchaser, Parent or any of Parent's other subsidiaries upon consummation of the
transactions contemplated by this Agreement.
SECTION 4.25. Confidentiality Agreements. Each prospective purchaser,
other than Parent, that has received materials from Salomon Smith Barney Inc. or
the Company within the past six months with respect to a potential business
combination has executed a confidentiality agreement (each, an "Other
Confidentiality Agreement"). Each of the Other Confidentiality Agreements
executed by such prospective purchasers includes "standstill" provisions for a
duration of at least 12 months from the execution thereof.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND PURCHASER
Parent and Purchaser jointly and severally represent and warrant to the
Company that:
SECTION 5.01. Corporate Existence and Power. Parent is a corporation
duly incorporated under the laws of the State of Delaware, Purchaser is a
corporation duly organized under the laws of the State of Delaware, and each of
them is validly existing and in good standing under the laws of its jurisdiction
of incorporation and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted. Since the date of its incorporation, Purchaser has
not engaged in any activities other than in connection with or as contemplated
by this Agreement.
SECTION 5.02. Corporate Authorization. The execution, delivery and
performance by Parent and Purchaser of this Agreement and the consummation by
Parent and Purchaser of the transactions contemplated hereby are within the
corporate powers of Parent and Purchaser and have been duly authorized by all
necessary corporate action. This Agreement constitutes a valid and binding
agreement of Parent and Purchaser.
SECTION 5.03. Governmental Authorization. The execution, delivery and
performance by Parent and Purchaser of this Agreement and the consummation by
Parent and Purchaser of the transactions contemplated by this Agreement require
no action by or in respect of, or filing with, any governmental body, agency,
official or authority other than (i) the filing of the Certificate of Merger in
accordance with Delaware Law, (ii) the applicable requirements of the HSR Act
and (iii) compliance with any applicable requirements of the Securities Act and
the Exchange Act and the rules and regulations promulgated thereunder.
SECTION 5.04. Non-Contravention. The execution, delivery and
performance by Parent and Purchaser of this Agreement and the consummation by
Parent and Purchaser of the transactions contemplated hereby do not and will not
(i) contravene or conflict with the articles or certificate of incorporation or
bylaws of Parent and Purchaser, (ii) assuming compliance with the matters
referred to in Section 5.03, contravene or conflict with any provision of law,
regulation, judgment, order or decree binding upon Parent and Purchaser, or
(iii) constitute a default under or give rise to any right of termination,
cancellation or acceleration of any right or obligation of Parent or Purchaser
or to a loss of any benefit to which Parent or Purchaser is entitled under any
agreement, contract or other instrument binding upon Parent or Purchaser,
except, in the case of clauses (ii) and (iii), for any contraventions,
conflicts, defaults or other occurrences which are not, individually or in the
aggregate, reasonably likely to prevent or materially delay the consummation of
the Offer or the Merger.
SECTION 5.05. Finders' Fees. Except for Wasserstein Perella & Co.,
Inc., whose fees will be paid by Parent, there is no investment banker, broker,
finder or other intermediary who
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might be entitled to any fee or commission from the Company or any of its
affiliates upon consummation of the transactions contemplated by this Agreement.
SECTION 5.06. Financing. Parent has or will have available, prior to
the expiration of the Offer, and will provide to Purchaser on a timely basis,
sufficient funds to enable Purchaser to consummate the Offer, the Merger and the
other transactions contemplated hereby and to pay all related fees and expenses.
ARTICLE VI
COVENANTS OF THE COMPANY
SECTION 6.01. Conduct of the Company. From the date hereof until the
Effective Time, except as required to effect this Agreement or as set forth in
Section 6.01 of the Disclosure Schedule and except with the prior written
consent of Parent, which consent shall not be unreasonably delayed, conditioned
or withheld, the Company and its Subsidiaries shall conduct their business in
the ordinary course consistent with past practice and shall use their reasonable
efforts to preserve intact their business organizations and relationships with
third parties and to keep available the services of their present officers and
employees. Without limiting the generality of the foregoing, from the date
hereof until the Effective Time:
(a) neither the Company nor any of its Subsidiaries will adopt or
propose any change in its certificate of incorporation or bylaws;
(b) neither the Company nor any of its Subsidiaries will adopt a plan
of complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of the Company or any of
its Subsidiaries (other than the Merger);
(c) neither the Company nor any of its Subsidiaries will adopt or
(except as required pursuant to any Plan) pay, grant, issue, accelerate or
accrue salary or other payments or benefits pursuant to any pension,
profit-sharing, bonus, extra compensation, incentive, deferred compensation,
stock purchase, stock option, stock appreciation right, group insurance,
severance pay, retirement or other employee benefit plan, agreement or
arrangement, or any employment or consulting agreement with or for the benefit
of any director, officer, employee, agent or consultant, whether past or
present; or, except as required by law, amend in any material respect any such
existing plan, agreement or arrangement in a manner inconsistent with the
foregoing;
(d) neither the Company nor any of its Subsidiaries shall enter into
any contract or transaction relating to the purchase of material assets other
than in the ordinary course of business consistent with prior practices;
(e) neither the Company nor any of its Subsidiaries will (i) materially
change any of the accounting methods used by it unless required by GAAP or (ii)
make any material election relating to Taxes or change any material election
relating to Taxes already made;
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(f) neither the Company nor any of its Subsidiaries will issue,
deliver, sell, pledge, dispose of or encumber, or authorize or commit to the
issuance, sale, pledge, disposition or encumbrance of, (i) any shares of capital
stock of any class, or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of capital stock, or any other
ownership interest (including, but not limited to, stock appreciation rights or
phantom stock), of the Company or any of its Subsidiaries (except for the
issuance of up to approximately 1,001,785 shares of Company Common Stock
required to be issued pursuant to outstanding grants, awards and elections under
the terms of the Company's Stock Option Plans, Performance Award Plan, Employee
Stock Option (Purchase) Plan and phantom stock programs as of June 15, 1999) or
(ii) any assets of the Company or any of its Subsidiaries, except for sales of
inventory in the ordinary course of business.
(g) neither the Company nor any of its Subsidiaries shall declare, set
aside, make or pay any dividend or other distribution, whether payable in cash,
stock, property or otherwise, with respect to its capital stock;
(h) neither the Company nor any of its Subsidiaries shall reclassify,
combine, split, subdivide or redeem, purchase or otherwise acquire, directly or
indirectly, any of its capital stock;
(i) neither the Company nor any of its Subsidiaries shall (i) acquire
(by merger, consolidation or acquisition of stock or assets) any corporation,
partnership or other business organization or division thereof; (ii) incur any
indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse, or otherwise as an accommodation become responsible for,
the obligations of any Person, or make any loans, advances or capital
contributions to, or investments in any other Person, in each case other than in
the ordinary course of business consistent with past practice under the
Company's existing Revolving Credit Agreement with National City Bank in an
amount such that the aggregate outstanding balance under the Revolving Credit
Agreement shall not exceed $40 million; (iii) enter into any contract or
agreement other than in the ordinary course of business consistent with past
practice that is material to the Company and its Subsidiaries, taken as a whole;
or (iv) authorize any single capital expenditure which is in excess of $500,000
or capital expenditures which are, in the aggregate, in excess of $5 million for
the Company and its Subsidiaries taken as a whole;
(j) except to the extent required under existing employee and director
benefit plans, agreements or arrangements as in effect as of the date of this
Agreement, neither the Company nor any of its Subsidiaries shall increase the
compensation or fringe benefits of any of its directors, officers or employees,
except for increases in salary or wages of employees of the Company or its
Subsidiaries who are not officers of the Company in the ordinary course of
business in accordance with past practice, or grant any severance or termination
pay not currently required to be paid under existing severance plans to, or
enter into any employment, consulting or severance agreement or arrangement
with, any present or former director, officer or other employee of the Company
or any of its Subsidiaries;
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(k) neither the Company nor any of its Subsidiaries shall settle or
compromise any pending or threatened suit, action or claim which is material or
which relates to the transactions contemplated hereby;
(l) neither the Company nor any of its Subsidiaries shall pay,
discharge or satisfy any claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction (i) in the ordinary course of business and consistent
with past practice of liabilities reflected or reserved against in the Financial
Statements or incurred in the ordinary course of business and consistent with
past practice and (ii) of liabilities required to be paid, discharged or
satisfied pursuant to the terms of any contract or agreement in existence on the
date hereof;
(m) the Company will not, and will not permit any of its Subsidiaries
to, (i) take or agree or commit to take any action that would make any
representation and warranty of the Company hereunder inaccurate in any material
respect at or as of any time prior to the Effective Time or (ii) omit or agree
or commit to omit to take any action necessary to prevent any such
representation or warranty from being inaccurate in any material respect at any
such time; and
(n) the Company will not, and will not permit any of its Subsidiaries
to, (i) take or agree or commit to take any action that would cause any of the
conditions to the Offer set forth in Annex I hereto not to be satisfied, (ii)
omit or agree or commit to omit to take any action necessary to cause any of the
conditions to the Offer set forth in Annex I hereto to be satisfied or (iii)
take, omit to take or agree to take or omit to take any action described in
Sections 6.01(a) through 6.01(m) above.
SECTION 6.02. Stockholder Meeting; Proxy Material. (a) The Company
shall cause a meeting of its stockholders (the "Company Stockholder Meeting") to
be duly called and held as soon as reasonably practicable for the purpose of
voting on the approval and adoption of this Agreement and the Merger and the
transactions contemplated by this Agreement, unless a vote of stockholders of
the Company is not required by Delaware Law. The Board of Directors of the
Company shall recommend approval and, to the extent required by Delaware Law,
adoption by the Company's stockholders of this Agreement and the Merger and the
transactions contemplated by this Agreement. In connection with such meeting,
the Company (i) will promptly prepare and file with the SEC, will use its
reasonable efforts to have cleared by the SEC and will thereafter mail to its
stockholders as promptly as practicable the Company Proxy Statement (as defined
below) and all other proxy materials for such meeting, (ii) will use its
reasonable efforts to obtain the necessary approvals by its stockholders of this
Agreement, and (iii) will otherwise comply with all legal requirements
applicable to such meeting. Notwithstanding the foregoing, in the event that
Purchaser shall acquire at least 90% of the outstanding Shares, the Company
agrees, at the request of Purchaser, to take all necessary and appropriate
action to cause the Merger to become effective as soon as reasonably practicable
after such acquisition, without a meeting of the Company's stockholders, in
accordance with Section 253 of Delaware Law.
(b) Neither the Board of Directors of the Company nor any committee
thereof will, except as expressly permitted by this Section 6.02(b) or Section
6.05, (i) withdraw, qualify or
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modify, or propose publicly to withdraw, qualify or modify, in a manner adverse
to Parent or Purchaser, the approval or recommendation of such Board of
Directors or such committee of the Merger or this Agreement, (ii) approve or
recommend, or propose publicly to approve or recommend, any transaction
involving an Acquisition Proposal (as hereinafter defined) from a party other
than Parent or Purchaser (an "Alternative Transaction"), or (iii) cause the
Company to enter into any letter of intent, agreement in principle, acquisition
agreement or other similar agreement (each, an "Acquisition Agreement") related
to any Alternative Transaction. Notwithstanding the foregoing, if prior to the
approval of this Agreement by the stockholders of the Company, the Board of
Directors of the Company determines in the exercise of its fiduciary duties,
after it has received a Superior Proposal (as hereinafter defined) in compliance
with Section 6.05, the Board of Directors of the Company may (subject to this
and the following sentences) inform stockholders of the Company that it no
longer believes that the Merger is advisable and no longer recommends approval
(a "Subsequent Determination") and enter into an Acquisition Agreement with
respect to a Superior Proposal, but only at a time that is after the fifth day
following delivery to Parent of written notice advising Parent that the Board of
Directors of the Company has received a Superior Proposal. Such written notice
shall specify the material terms and conditions of such Superior Proposal,
identify the Person making such Superior Proposal and state that the Board of
Directors of the Company intends to make, or is considering making, a Subsequent
Determination. During such five day period, the Company shall provide an
opportunity for Parent to proposed such adjustments to the terms and conditions
of this Agreement as would enable the Board of Directors of the Company to
proceed with its recommendation to the stockholders of the Company without a
Subsequent Determination; provided, however, that any such proposed adjustments
shall be at the discretion of the parties hereto at the time.
SECTION 6.03. Disclosure Documents. (a) Each Company Disclosure
Document, including, without limitation, the Schedule 14D-9, the Company Proxy
Statement and any amendments or supplements thereto will, when filed, comply as
to form in all material respects with the applicable requirements of the
Exchange Act.
(b) At the time the Company Proxy Statement or any amendment or
supplement thereto is first mailed to stockholders of the Company, at the time
such stockholders vote on adoption of this Agreement and at the Effective Time,
the Company Proxy Statement, as supplemented or amended, if applicable, 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 of the
filing of any Company Disclosure Document other than the Company Proxy Statement
and at the time of any distribution thereof, such Company Disclosure Document
will not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. The
obligations of the Company contained in this Section 6.03(b) will not apply to
statements or omissions included in the Company Disclosure Documents based upon
information furnished to the Company in writing by Parent or Purchaser
specifically for use therein.
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(c) The information with respect to the Company or any of its
Subsidiaries that the Company furnishes to Parent or Purchaser in writing
specifically for use in the Offer Documents will not, at the time of the filing
thereof, at the time of any distribution thereof and at the time of the
consummation of the Offer, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
SECTION 6.04. Access to Information. From the date hereof until the
Effective Time, upon reasonable, prior notice from Parent, the Company will give
Parent and Purchaser, their counsel, financial advisors, auditors and other
authorized representatives reasonable access during normal business hours and
without disrupting the orderly conduct of business by the Company and its
Subsidiaries to the offices, properties, books and records of the Company and
its Subsidiaries, will furnish to Parent and Purchaser, their counsel, financial
advisors, auditors and other authorized representatives such financial and
operating data and other information as such Persons may reasonably request and
will instruct the Company's employees, counsel and financial advisors to
reasonably cooperate with Parent and Purchaser in their investigation of the
business of the Company and the Subsidiaries.
SECTION 6.05. Other Offers. From the date hereof until the termination
hereof, the Company and its Subsidiaries will not, nor shall the Company
authorize or permit any officers, directors, employees, representatives or other
agents of the Company and its Subsidiaries to, directly or indirectly, (i) take
any action to solicit, initiate or encourage any Acquisition Proposal or (ii)
engage in negotiations 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 Subsidiary to, any Person that may be
considering making, or has made, an Acquisition Proposal; provided, however,
that nothing contained in this Agreement shall prevent the Company or the Board
of Directors of the Company from (a) furnishing nonpublic information to, or
affording access to the properties, books or records of the Company or any of
its Subsidiaries to, or entering into discussions or an agreement with, any
Person in connection with an unsolicited Acquisition Proposal by such Person, if
and only to the extent that (i) the Company's Board of Directors determines in
good faith after consultation with outside legal counsel that such action is
necessary to comply with their fiduciary duties to the stockholders of the
Company under applicable law; (ii) prior to furnishing any such nonpublic
information to, or entering into discussions or negotiations with, such Person,
the Company's Board of Directors receives from such Person an executed
confidentiality agreement with customary terms and (iii) the Board of Directors
of the Company concludes in the exercise of its fiduciary duties that the
Acquisition Proposal is a Superior Proposal, or (b) taking and disclosing to the
Company's stockholders any position, and making any related filings with the
SEC, as required by Rules14e-2 and 14d-9 under the Exchange Act with respect to
any Alternative Transaction that is a tender offer; provided, that the Company's
Board of Directors shall not recommend that the stockholders of the Company
tender their Shares in connection with any such tender offer unless the Board by
majority vote shall have determined in good faith that failing to take such
action would constitute a breach of the Board's fiduciary duties under
applicable law. The Company will promptly notify Parent after receipt of any
Acquisition Proposal or any request for nonpublic information relating to the
Company or any Subsidiary or for access to the properties, books or records of
the Company or
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any Subsidiary by any Person that has made an Acquisition Proposal and will keep
Parent fully informed of the status and details of any such Acquisition
Proposal, indication or request. The Company will take no action with respect to
such proposal or inquiry for five days after delivery of such notice to Parent
and will negotiate exclusively in good faith with Parent for such five day
period to make such adjustments in the terms and conditions of this Agreement as
would enable the Company to proceed with the transactions contemplated herein on
such adjusted terms; provided, however, that any such proposed adjustments shall
be at the discretion of the parties hereto at the time. Without limiting the
foregoing, it is understood that any violations of the restrictions set forth in
the first sentence of this Section 6.05 by any officer or director of the
Company or any of its Subsidiaries or any employee, representative or other
agent of the Company or any of its Subsidiaries, acting on behalf of or at the
request of the Board of Directors of the Company, shall be deemed to be a breach
of this Section 6.05 by the Company.
SECTION 6.06. Company Board Representation; Section 14(f). (a) Promptly
upon the purchase by Purchaser of more than a majority of the outstanding Shares
pursuant to the Offer, and from time to time thereafter, Purchaser shall be
entitled to designate up to such number of directors, rounded up to the next
whole number, on the Board of Directors of the Company as shall give Purchaser
representation on the Board of Directors equal to a majority of the Board of
Directors, and the Company shall amend, or cause to be amended its bylaws to
provide for each of the matters set forth in this Section 6.06 and shall, at
such time, promptly take all action necessary to cause Purchaser's designees to
be so elected or appointed, including either increasing the size of the Board of
Directors or securing the resignations of incumbent directors or both. At such
times, the Company will use its reasonable best efforts to cause persons
designated by Purchaser to constitute the same percentage as is on the Board of
each committee of the Board of Directors.
(b) The Company's obligations to appoint designees to its Board of
Directors shall be subject to Section 14(f) of the Exchange Act and Rule 14F-1
promulgated thereunder. At the request of Parent, the Company shall promptly
take all actions required pursuant to Section 14(f) and Rule 14F-1 in order to
fulfill its obligations under this Section 6.06 and shall include in the
Schedule 14D-9 or a separate Rule14F-1 information statement provided to
stockholders of the Company such information with respect to the Company and its
officers and directors as is required under Section 14(f) and Rule 14F-1 to
fulfill its obligations under this Section 6.06. Parent or Purchaser will supply
to the Company and be solely responsible for any information with respect to
either of them and their nominees, officers, directors and Affiliates required
by Section 14(f) and Rule 14F-1.
(c) Following the election or appointment of Purchaser's designees
pursuant to this Section 6.06 and prior to the Effective Time, the concurrence
of a majority of the directors of the Company then in office who are neither
designated by Purchaser nor are employees of the Company (the "Disinterested
Directors") will be required to authorize any amendment, or waiver of any term
or condition, of this Agreement or the certificate of incorporation or bylaws of
the Company, any termination of this Agreement by the Company, any extension by
the Company of the time for the performance of the obligations or other acts of
Purchaser or waiver or assertion of any of the Company's rights hereunder, and
any other consent or action by the Board of
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Directors with respect to this Agreement. Notwithstanding Section 6.06(a)
hereof, the number of Disinterested Directors shall not be less than two.
(d) Prior to the Effective Time, the Company shall cause each of the
incumbent directors of the Company (other than Purchaser's designees pursuant to
this Section 6.06) to deliver letters of resignation from the Board of Directors
of the Company, such resignations to be effective as of the Effective Time.
ARTICLE VII
COVENANTS OF PARENT AND PURCHASER
SECTION 7.01. Confidentiality. Prior to the Effective Time and after
any termination of this Agreement, Parent and Purchaser will hold, and will
cause their respective officers, directors, employees, accountants, lenders,
counsel, consultants, advisors and agents to hold, in confidence, all
confidential documents and information concerning the Company and its
Subsidiaries furnished to Parent or Purchaser in connection with the
transactions contemplated by this Agreement in accordance with the provisions of
the Confidentiality Agreement.
SECTION 7.02. Obligations of Purchaser. Parent will take all action
necessary to cause Purchaser to perform its obligations under this Agreement and
to consummate the Merger on the terms and conditions set forth in this
Agreement.
SECTION 7.03. Disclosure Documents. (a) The information with respect to
Parent and its subsidiaries that Parent furnishes to the Company in writing
specifically for use in any Company Disclosure Document 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 (i) in the case of the Company Proxy
Statement at the time the Company Proxy Statement or any amendment or supplement
thereto is first mailed to stockholders of the Company, at the time the
stockholders vote on adoption of this Agreement and at the Effective Time, and
(ii) in the case of any Company Disclosure Document other than the Company Proxy
Statement, at the time of the filing thereof, at the time of any distribution
thereof and at the time of the consummation of the Offer.
(b) The Offer Documents, when filed, will comply as to form in all
material respects with the applicable requirements of the Exchange Act and will
not at the time of the filing thereof, at the time of any distribution thereof
or at the time of consummation of the Offer, contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading, provided, that this Section 7.04(b) will not apply to
statements or omissions in the Offer Documents based upon information furnished
to Parent or Purchaser in writing by the Company specifically for use therein.
SECTION 7.04. Employee Matters. (a) As of the Effective Time, the
Surviving Corporation shall employ all employees of the Company who desire
employment with the
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Surviving Corporation. With respect to each individual who is employed by the
Surviving Corporation as of the Effective Time, Parent shall, at its option,
either (i) cause the Surviving Corporation to continue to provide for such
individual's participation in each medical, surgical, hospitalization and other
"welfare" plan, fund or program (within the meaning of Section 3(l) of ERISA) of
the Company on the same terms as immediately prior to the Effective Time or (ii)
permit such individual to participate in an employee welfare plan sponsored by
Parent or any Affiliate of Parent (a "Purchaser Plan") which provides
substantially similar benefits as prior to the Effective Time, on the same terms
and to the same extent as similarly situated employees of Parent's Lithonia
Lighting unit; provided, that if Parent elects to permit such employee to
participate in a Purchaser Plan pursuant to clause (ii) above, such employee
shall (A) not be subject to any preexisting condition provision or waiting
period under any Purchaser Plan which provides medical, dental, vision or
prescription drug benefits; and (B) to the extent permitted by applicable law,
be credited with prior service with the Company for all purposes related to
eligibility and vesting under any Purchaser Plan in which such employee
participates.
(b) With respect to any employee of the Company as of the date hereof
who is not employed by the Surviving Corporation as of the Effective Time, the
Surviving Corporation shall be responsible for providing continuation coverage
to such employee (and his or her dependents), as required under the Consolidated
Omnibus Budget Reconciliation Act of 1985 ("COBRA"). Further, with respect to
any former employee of the Company (or their dependents) who is receiving
continuation coverage under COBRA as of the Effective Time, the Surviving
Corporation shall be responsible to maintain such continuation coverage in
compliance with COBRA.
(c) Parent shall cause the Surviving Corporation to continue each of
the following plans and agreements in full force and effect in accordance with
their respective terms for the remaining term thereof: the Company's
Supplemental Executive Retirement Plan, as amended (the "SERP"); and the
Termination Benefit Agreements and Employment Agreements set forth in Section
4.12(a) of the Disclosure Schedule; provided, that the Surviving Corporation
shall not be obligated to make contributions pursuant to Section 3 of the SERP
or to allow participating employees of the Surviving Corporation to defer a
portion of their compensation pursuant to Section 4 of the SERP for more than
two years after the Effective Time; provided, further, that for purposes of such
Termination Benefits Agreements and Employment Agreements the Option Plans shall
be deemed to continue in full force and effect notwithstanding that such Option
Plans shall be terminated for all other purposes at the Effective Time. For at
least two years, Parent shall cause the Surviving Corporation to continue, or
shall offer a comparable plan to the following: the Company's bonus plans and
educational assistance program. Any outstanding rights under the following plans
will be fully satisfied in connection with the transactions contemplated hereby
and, upon satisfaction of those rights, the plans shall be terminated: the
Company's Employee Stock Option (Purchase) Plan and the Company's Performance
Award Program (assuming payment in full of the performance award with respect to
1999). Furthermore, Parent and the Company shall negotiate in good faith with
Paolo Minissi and Michele Seghers with respect to the effect of the Offer and
the Merger on the provisions of Section 2.02 of the MetalOptics Stock Purchase
Agreement.
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(d) As of the Effective Time, Parent shall assume and honor, and shall
cause the Surviving Corporation to assume and to honor, in accordance with their
terms all employment, severance and other compensation agreements and
arrangements listed in Section 4.19 of the Disclosure Schedule.
ARTICLE VIII
COVENANTS OF PARENT, PURCHASER
AND THE COMPANY
SECTION 8.01. Reasonable Efforts. Subject to the terms and conditions
of this Agreement, each party will use reasonable efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate the
transactions contemplated by this Agreement.
SECTION 8.02. Certain Filings. (a) The Company, Parent and Purchaser
shall cooperate with one another (i) in connection with the preparation of the
Company Disclosure Documents and the Offer Documents, and (ii) in determining
whether any action by or in respect of, or filing with, any governmental body,
agency or official, or authority is required, or any actions, consents,
approvals or waivers are required to be obtained from parties to any material
contracts, in connection with the consummation of the transactions contemplated
by this Agreement and (iii) in seeking any such actions, consents, approvals or
waivers or making any such filings, furnishing information required in
connection therewith or with the Company Disclosure Documents or the Offer
Documents and seeking timely to obtain any such actions, consents, approvals or
waivers. Notwithstanding any provision of this Agreement to the contrary, Parent
and Purchaser shall not be required under the terms hereof to dispose of or hold
separate all or any material portion of the businesses or assets of Parent or
any of its Subsidiaries or of the Company or any of its Subsidiaries in order to
remedy or otherwise address the written concerns of any Governmental Entity
under the HSR Act of any other antitrust statute or regulations.
(b) The Company and Parent shall file as soon as practicable
notifications under the HSR Act and respond as promptly as practicable to any
inquiries received from the Federal Trade Commission and the Antitrust Division
of the Department of Justice for additional information or documentation and
respond as promptly as practicable to all inquiries and requests received from
any State Attorney General or other Governmental Entity in connection with
antitrust matters. Concurrently with the filing of notifications under the HSR
Act or as soon thereafter as practicable, the Company and Parent shall each
request early termination of the HSR Act waiting period.
SECTION 8.03. Public Announcements. The initial press release with
respect to the execution of this Agreement shall be a joint press release
acceptable to Parent and the Company. Thereafter, Parent, Purchaser and the
Company will consult with each other before issuing any press release or making
any public statement with respect to this Agreement and the transactions
contemplated hereby and, except as may be required by applicable law or any
listing agreement
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with any national securities exchange, will not issue any such press release or
make any such public statement prior to such consultation.
SECTION 8.04. Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or Purchaser, any
deeds, bills of sale, assignments or assurances and to take and do, in the name
and on behalf of the Company or Purchaser, any other actions and things to vest,
perfect or confirm of record or otherwise in the Surviving Corporation 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 Corporation as
a result of, or in connection with, the Merger.
SECTION 8.05. Notices of Certain Events. Each of the Company and Parent
shall promptly notify the other of:
(a) 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) any notice or other communication from any
governmental or regulatory agency or authority in connection
with the transactions contemplated by this Agreement;
(c) any actions, suits, claims, investigations or
proceedings commenced or, to its knowledge threatened against,
relating to or involving or otherwise affecting Parent,
Purchaser, the Company or any of its Subsidiaries which relate
to the consummation of the transactions contemplated by this
Agreement;
(d) any event the occurrence or non-occurrence of
which would be reasonably likely to cause any representation
or warranty contained in this Agreement to be untrue in any
material respect; and
(e) any failure of the Company, Parent or Purchaser,
as the case may be, to comply with or satisfy in any material
respect any covenant, condition or agreement herein.
SECTION 8.06. Directors' and Officers' Indemnification and Insurance.
(a) The Certificate of Incorporation of the Surviving Corporation shall contain
provisions no less favorable with respect to indemnification than are set forth
in Article ELEVENTH of the (Second) Restated Certificate of Incorporation of the
Company, which provisions shall not be amended, repealed or otherwise modified
for a period of six years from the Effective Time in any manner that would
affect materially adversely the rights thereunder of individuals who at the
Effective Time were directors or officers of the Company, with respect to any
act or omission in
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their capacity as an officer or director of the Company occurring on or prior to
the Effective Time, unless such modification shall be required by law.
(b) The Company shall, to the fullest extent permitted under applicable
law and regardless of whether the Merger becomes effective, indemnify and hold
harmless, and after the Effective Time, the Surviving Corporation shall, to the
fullest extent permitted under applicable law, indemnify and hold harmless each
present and former director and officer of the Company (collectively, the
"Indemnified Parties") against all costs and expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages, liabilities and
settlement amounts paid in connection with any claim, action, suit, proceeding
or investigation (whether arising before or after the Effective Time), whether
civil, criminal, administrative or investigative, arising out of or directly
pertaining to any action or omission in their capacity as an officer or director
of the Company occurring on or prior to the Effective Time, whether asserted or
claimed prior to, at or after the Effective Time, for a period of six years
after the later of the Effective Time and the date hereof, in each case to the
fullest extent permitted under applicable law (and shall pay any expenses in
advance of the final disposition of such action or proceeding to each
Indemnified Party to the fullest extent permitted under applicable law, upon
receipt from the Indemnified Party to whom expenses are advanced of an
undertaking to repay such advances required under applicable law). In the event
of any such claim, action, suit, proceeding or investigation, (i) the Company or
the Surviving Corporation, as the case may be, shall pay the reasonable fees and
expenses of counsel selected by the Indemnified Parties promptly after
statements therefor are received and (ii) the Company and the Surviving
Corporation shall cooperate in the defense of any such matter. In the event that
any claim for indemnification is asserted or made within such six-year period,
all rights to indemnification in respect of such claim shall continue until the
final disposition of such claim.
(c) Parent shall maintain in effect for the benefit of the Indemnified
Parties for six years after the Effective Time the current directors' and
officers' liability insurance policies maintained by the Company to cover acts
and omissions of the Indemnified Parties occurring prior to the Effective Time;
provided, that Parent may substitute therefor policies of substantially the same
coverage containing substantially comparable terms and conditions with respect
to matters occurring prior to the Effective Time; provided, further, that in no
event shall Parent be required to expend more than an amount per year equal to
400% of current annual premiums paid by the Company (which the Company
represents and warrants to be not more than $40,000) to maintain or procure such
coverage.
(d) In the event the Company or the Surviving Corporation or any of
their respective successors or assigns (i) consolidates with or merges into any
other person and shall not be the continuing or surviving corporation or entity
of such consolidation or merger or (ii) transfers all or substantially all of
its properties and assets to any person, then, and in each such case, proper
provision shall be made so that the successors and assigns of the Company or the
Surviving Corporation, as the case may be, or at Parent's option, Parent, shall
assume the obligations set forth in this Section 8.06.
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(e) The Indemnified Parties are each intended third-party beneficiaries
of the provisions of this Section 8.06, and may enforce this Section 8.06
against the Company, the Surviving Corporation or Parent, as the case may be, as
fully and effectively as if each were a party to this Agreement.
ARTICLE IX
CONDITIONS TO THE MERGER
SECTION 9.01. Conditions to the Obligations of Each Party. The
obligations of the Company, Parent and Purchaser to consummate the Merger are
subject to the satisfaction of the following conditions:
(a) this Agreement and the transactions contemplated hereby shall have
been approved and adopted by the stockholders of the Company to the extent
required by, and in accordance with, Delaware Law and the (Second) Restated
Certificate of Incorporation and Bylaws of the Company;
(b) Purchaser or its permitted assignee shall have purchased all Shares
validly tendered and not withdrawn pursuant to the Offer; provided, however,
that this condition shall not be applicable to the obligations of Parent or
Purchaser if, in breach of this Agreement or the terms of the Offer, Purchaser
fails to purchase any Shares validly tendered and not withdrawn pursuant to the
Offer;
(c) all actions by or in respect of or filings with any governmental
body, agency, official, or authority required to permit the consummation of the
Merger shall have been obtained or made; and
(d) no Governmental Entity shall have enacted, issued, promulgated,
enforced or entered any law, rule, regulation, executive order, decree,
injunction or other order (whether temporary, preliminary or permanent) which is
then in effect and has the effect of making any the Merger illegal or otherwise
restricting, preventing or prohibiting consummation of the Merger.
ARTICLE X
TERMINATION
SECTION 10.01. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time (notwithstanding
any approval of this Agreement by the stockholders of the Company, to the extent
required by Delaware Law):
(a) by mutual written consent of Parent and the Company;
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(b) by either the Company or Parent, if the Effective Time shall not
have occurred on or before December 31, 1999; provided, however, that the right
to terminate this Agreement under this Section 10.01(b) shall not be available
to any party whose breach of this Agreement has been the primary cause of, or
resulted in, the failure of the Effective Time to occur on or before such date;
(c) by either the Company or Parent, if any Governmental Entity shall
have issued an order, decree or ruling or taken any other action (which order,
decree, ruling or other action the parties hereto shall use their reasonable
efforts to lift), in each case permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement and such order,
decree, ruling or other action shall have become final and non-appealable;
(d) by Parent:
(i) if Purchaser shall have terminated the Offer
without Purchaser having purchased any Shares thereunder by reason
of the failure to satisfy any condition set forth in Annex I
hereto; or
(ii) if the Company's Board of Directors shall have
(A) failed to include in the Schedule 14D-9 or the Company Proxy
Statement, its recommendation without modification or qualification
that the stockholders of the Company accept the Offer and approve
this Agreement and the Merger, (B) approved or recommended any
other Acquisition Proposal, (C) withdrawn, modified or qualified
its recommendation of the Offer, this Agreement or the Merger in a
manner adverse to the interests of Parent or Purchaser or (D)
resolved to do any of the foregoing.
(e) by the Company:
(i) if Purchaser shall have failed to commence the
Offer within five business days following the date of the initial
public announcement of the Offer;
(ii) if Purchaser shall have terminated the Offer
without having accepted any Shares for payment thereunder by reason
of the failure to satisfy any condition set forth in Annex I hereto
(unless such failure shall have been the result of the failure of
the Company to perform in any material respect any covenant or
agreement of it contained in this Agreement or the material breach
by the Company of any representation or warranty of it contained in
this Agreement);
(iii) if Purchaser shall have failed to pay for Shares
pursuant to the Offer within 90 days following the commencement of
the
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<PAGE> 35
Offer, unless such failure to pay for Shares shall have been the
result of the failure of the Company to perform in any material
respect any covenant or agreement of it contained in this Agreement
or the material breach by the Company of any representation or
warranty of it contained in this Agreement;
(iv) if any representation or warranty of Parent and
Purchaser in this Agreement shall not be true and correct in any
material respect, as if such representation or warranty was made as
of such time on or after the date of this Agreement; or Parent or
Purchaser shall have failed to perform in any material respect any
obligation or to comply in any material respect with any agreement
or covenant of Parent or Purchaser to be performed or complied with
by it under this Agreement and which, in any such case, shall not
have been cured within five business days following receipt of
notice thereof; or
(v) if, prior to the purchase of Shares pursuant to
the Offer, after it has received a Superior Proposal in compliance
with Section 6.05, the Company's Board of Directors determines that
it is obligated by its fiduciary duties under applicable law to
terminate this Agreement; provided, that such termination under
this clause (v) shall not be effective until the Company has made
payment of the Termination Fee and the expense reimbursement
required by Section 10.03.
SECTION 10.02. Effect of Termination. If this Agreement is terminated
pursuant to Section 10.01, written notice thereof shall forthwith be given to
the other party or parties specifying the provisions hereof pursuant to which
such termination is made, and this Agreement shall become void and of no effect
with no liability on the part of any party hereto, except that (a) the
agreements contained in Sections 7.01 and 10.03 shall survive the termination
hereof and (b) nothing herein shall relieve any party from liability for any
breach hereof.
SECTION 10.03. Fees and Expenses. (a) If Parent shall terminate this
Agreement pursuant to Section 10.01(d)(ii) hereof or the Company shall terminate
this Agreement pursuant to Section 10.01(e)(v), then the Company shall pay to
Parent, within five business days of such termination, a fee, in cash, in the
amount of $20,000,000 (the "Termination Fee"). In addition, the Company shall
reimburse Parent, Purchaser and their Affiliates (not later than five business
days after submission of valid statements therefor) for all actual, documented
out-of-pocket fees and expenses actually incurred by any of them or on their
behalf in connection with the Offer and the Merger and the consummation of all
transactions contemplated by this Agreement (including, without limitation, fees
and disbursements payable to financing sources, investment bankers, counsel to
Purchaser or Parent or any of the foregoing, and accountants) up to a maximum
amount of $3,000,000.
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<PAGE> 36
(b) If within 12 months after termination of this Agreement, the
Company shall consummate an Acquisition Proposal with a Person other than Parent
or Purchaser, then immediately prior to, and as a condition of, consummation of
such transaction the Company shall pay to Parent upon demand an amount in cash
equal to the Termination Fee to reimburse Parent for its time, expense and lost
opportunity costs of pursuing the Merger; provided, that no such amount shall be
payable if the Termination Fee shall have become payable or have been paid in
accordance with Section 10.03(a) of this Agreement or if this Agreement shall
have been terminated by the Company in accordance with Section 10.01(e)(iv).
(c) Except as otherwise specifically provided in this Section 10.03,
each party shall bear its own expenses in connection with this Agreement and the
transactions contemplated hereby.
(d) Notwithstanding anything to the contrary in this Agreement, in no
event shall there be more than one payment of the Termination Fee by the Company
or Parent.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Definitions. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context clearly requires
otherwise:
"Affiliate" shall have the meaning set forth in Rule 12b-2 of the
Exchange Act.
"Acquisition Proposal" shall mean any offer or proposal for, or any
indication of interest in, a merger or other business combination involving the
Company or any of its material Subsidiaries or the acquisition of any equity
interest in, or a substantial portion of the assets of, the Company or any of
its material Subsidiaries, other than the transactions contemplated by this
Agreement.
"Alternative Transaction" shall have the meaning set in Section 6.02
hereof.
"Associate" shall have the meaning set forth in Rule 12b-2 of the
Exchange Act.
"Balance Sheet" shall mean the most recent balance sheet of the Company
and its consolidated subsidiaries included in the Financial Statements.
"Balance Sheet Date" shall mean the date of the Balance Sheet.
"Company Agreement" shall mean any note, bond, mortgage, indenture,
ease, license, contract, agreement or other instrument or obligation to which
the Company or any of its Subsidiaries is a party or by which any of them or any
of their properties or assets may be bound.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
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<PAGE> 37
"Company Disclosure Documents" shall mean each document required to be
filed by the Company with the SEC in connection with the transactions
contemplated by this Agreement.
"Company's knowledge" or "knowledge of the Company" shall mean the
actual knowledge of the executive officers of the Company.
"Company Proxy Statement" shall mean the proxy or information statement
of the Company, if any, to be filed with the SEC in connection with the Merger.
"Company SEC Documents" shall mean each form, report, schedule,
statement and other document required to be filed by the Company since January
1, 1996 under the Exchange Act or the Securities Act, including any amendment to
such document, whether or not such amendment is required to be so filed.
"Company Stock Option" shall have the meaning set forth in Section 2.05
hereof.
"Confidentiality Agreement" shall mean the letter agreement dated as of
March 31, 1999, between the Company and Parent.
"Copyrights" shall mean U.S. and foreign registered and unregistered
copyrights (including, but not limited to, those in computer software and
databases), rights of publicity and all registrations and applications to
register the same.
"Delaware Law" shall mean the General Corporation Law of the State of
Delaware.
"Dissenting Shares" shall have the meaning set forth in Section 2.04
hereof.
"Environmental Claim" shall mean any claim, action, investigation or
notice by any person or entity alleging potential liability for investigatory,
cleanup or governmental or third party response costs, or natural resources or
property damages, or personal injuries, attorneys' and consultants' fees and
expenses or penalties relating to (i) the presence, or release into the
environment, of any Hazardous Materials at any location owned or operated by the
Company or any of its Subsidiaries, now or in the past, or (ii) any violation,
or alleged violation, of any Environmental Law.
"Environmental Law" shall mean each federal, state, local and foreign
law and regulation relating to pollution, protection or preservation of public
or employee health or the environment, including, without limitation, ambient
air, surface water, ground water, land surface or subsurface strata, and natural
resources, and including, without limitation, each law and regulation relating
to emissions, discharges, releases or threatened releases of Hazardous
Materials, or otherwise relating to the generation, storage, treatment,
containment (whether above ground or underground), disposal, transport or
handling of Hazardous Materials, or the preservation of the environment or
mitigation of adverse effects thereon and each law and regulation with regard to
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<PAGE> 38
record keeping, notification, disclosure and reporting requirements respecting
Hazardous Materials.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" shall mean any trade or business, whether or not
incorporated, that together with the Company would be deemed a "single employer"
within the meaning of Section 4001(b) of ERISA.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Agent" shall have the meaning set forth in Section 2.03
hereof.
"GAAP" shall mean United States generally accepted accounting
principles, applied on a consistent basis.
"Governmental Entity" shall mean a court, arbitral tribunal,
administrative agency or commission or other governmental or other regulatory
authority or agency.
"Hazardous Materials" shall mean pollutants, contaminants, toxic or
hazardous substances, materials and wastes, petroleum and petroleum products,
asbestos and asbestos-containing materials, polychlorinated biphenyls, radon and
lead or lead-based paints and materials or any other material regulated by or
subject to Environmental Laws.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.
"Intellectual Property" shall mean all of the following: material
Trademarks, Patents, Copyrights, Trade Secrets and Licenses.
"Lien" shall mean, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset.
"Material Adverse Effect" shall mean an effect that (A) is materially
adverse to the financial condition, business, assets or results of operations of
the Company and its Subsidiaries taken as a whole, excluding in all cases: (i)
events or conditions generally affecting the industry in which the Company and
the Company's Subsidiaries operate or arising from changes in general business
or economic conditions; (ii) any change or effect resulting from any change in
law or generally accepted accounting principles, which generally affect entities
such as the Company; and (iii) any change or effect resulting from the execution
and/or announcement of this Agreement or compliance by the Company with the
terms of this Agreement or any agreement contemplated hereby, or (B) would
prevent or materially delay the consummation of the Offer or the Merger.
"Merger" shall mean the merger of the Purchaser into the Company
referred to in the Recitals.
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"Merger Consideration" shall have the meaning set forth in Section
2.02(c) hereof.
"MetalOptics Stock Purchase Agreement" means the Stock Purchase
Agreement dated as of August 31, 1996 between the Company and Paolo Minissi and
Michele Seghers.
"Minimum Tender Condition" shall have the meaning set forth in Section
1.01 hereof.
"Offer Documents" shall mean a Tender Offer Statement on Schedule 14D-l
which will contain the offer to purchase and the form of the related letter of
transmittal, together with any supplements or amendments thereto.
"Option Plans" shall have the meaning set forth in Section 2.05 hereof.
"Patents" shall mean issued U.S. and foreign patents and pending patent
applications, patent disclosures, and any and all divisions, continuations,
continuations-in-part, reissues, reexaminations, and extension thereof, any
counterparts claiming priority therefrom, utility models, patents of
importation/confirmation, certificates of invention and like statutory rights.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Person" shall mean a natural person, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Entity or other entity or organization.
"Plan" shall have the meaning set forth in Section 4.12(a).
"SEC" shall mean the United States Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shares" shall have the meaning set forth in Section 1.01 hereof.
"Subsequent Determination" shall have the meaning set forth in Section
6.02 hereof.
"Subsidiary" shall mean, as to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons performing
similar functions are directly or indirectly owned by such Person.
"Superior Proposal" shall mean any proposal (on its most recently
amended or modified terms, if amended or modified) made by any Person other than
Parent or its Affiliates to enter into an Alternative Transaction which the
Company's Board of Directors determines in its good faith judgment to be more
favorable to the Company's stockholders than the Merger, taking into account all
relevant factors, including, but not limited to, whether, in the good faith
judgment of
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<PAGE> 40
the Board of Directors of the Company, after consultation with the Company's
independent financial advisor, the third party is reasonably able to finance the
transaction, and any proposed changes to this Agreement that may be proposed by
Parent in response to such Alternative Transaction.
"Tax" or "Taxes" shall mean all taxes, charges, fees, duties, levies,
penalties or other assessments imposed by any federal, state, local or foreign
Tax Authority.
"Tax Authority" shall mean any Governmental Authority responsible for
the imposition of Taxes.
"Tax Return" shall mean any return, declaration, report, claim for
refund, or information return or other statement relating to Taxes, including
any schedule or attachment thereto, and including any amendment thereof.
"Termination Fee" shall have the meaning set forth in Section 10.03
hereof.
"Title IV Plan" shall mean a Plan that is subject to Section 302 or
Title IV of ERISA or Section 412 of the Code.
"Trademarks" shall mean U.S. and foreign registered and unregistered
trademarks, trade dress, service marks, logos, trade names, corporate names and
all registrations and applications to register the same.
"Trade Secrets" shall mean all categories of trade secrets as defined
in the Uniform Trade Secrets Act, including, but not limited to, business
information.
SECTION 11.02. Notices. All notices, requests and other communications
to any party hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by telecopy
or by registered or certified mail (postage prepaid, return receipt requested),
to the respective parties at the following addresses (or at such other address
as shall be specified in a notice given in accordance with this Section 11.02):
if to Parent or Purchaser, to:
National Service Industries, Inc.
NSI Center
1420 Peachtree Street, NE
Atlanta, Georgia 30309-3002
Attn: Stewart A. Searle, III
Telecopy: (404) 853-1211
with a copy to:
Kenyon W. Murphy, Esq.
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National Service Industries, Inc.
NSI Center
1420 Peachtree Street, NE
Atlanta, Georgia 30309-3002
Telecopy: (404) 853-1015
with an additional copy to:
Russell B. Richards
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303-1763
Telecopy: (404) 572-5100
if to the Company, to:
Holophane Corporation
250 E. Broad Street, 14th Floor
Columbus, Ohio 43215
Attn: John R. DallePezze
Telecopy: (614) 341-2142
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<PAGE> 42
with a copy to:
Ronald A. Robins, Jr.
Vorys, Sater, Seymour and Pease LLP
52 E. Gay Street
Columbus, Ohio 43215
Telecopy: (614) 719-4296
SECTION 11.03. Survival of Representations and Warranties. The
representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant hereto shall not survive the
Effective Time or the termination of this Agreement pursuant to Section 10.01,
except that (a) the agreements and obligations set forth in Sections 7.01 and
10.03 shall survive any termination hereof and (b) the agreements and
obligations set forth in Articles II and XI and Sections 7.04 and 8.06 shall
survive the Effective Time in accordance with their respective terms.
SECTION 11.04. Amendments; No Waivers. (a) Any provision of this
Agreement may be amended prior to the Effective Time if, and only if, such
amendment is in writing and signed by the Company, Parent and Purchaser;
provided, that after the approval and adoption of this Agreement by the
stockholders of the Company, to the extent required by Delaware Law, no such
amendment shall be made which would reduce the amount or change the type of
consideration into which each Share shall be converted upon consummation of the
Merger, would amend the certificate of incorporation of the Surviving
Corporation, would impose conditions to the Merger other than those set forth in
Sections 9.01 and 9.02 hereof or would otherwise amend or change the terms and
conditions of the Merger in a manner adverse to the holders of the Shares;
provided, further, that any amendment shall be approved by a majority of the
Company's Board of Directors.
(b) At any time prior to the Effective Time, any party hereto may (i)
extend the time for the performance of any obligation or other act of any other
party hereto, (ii) waive any inaccuracy in any representation or warranty
contained herein or in any document delivered pursuant hereto or (iii) waive
compliance with any agreement or condition contained herein. Any such extension
or waiver shall be valid if set forth in an instrument in writing signed by the
party to be bound thereby and, in the case of any extension or waiver by which
the Company is to be bound, only if approved by a majority of Company's Board of
Directors.
(c) 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. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 11.05. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or
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<PAGE> 43
obligations under this Agreement without the consent of the other parties hereto
except that Purchaser may transfer or assign, in whole or from time to time in
part, to one or more of its subsidiaries, the right to purchase Shares pursuant
to the Offer, but any such transfer or assignment will not relieve Purchaser of
its obligations under the Offer or prejudice the rights of tendering
stockholders to receive payment for Shares validly tendered and accepted for
payment pursuant to the Offer.
SECTION 11.06. Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of Delaware without giving
effect to the principles of conflicts of laws thereof.
SECTION 11.07. Severability. Any term or provision of this Agreement
that is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. If the final judgment of a
court of competent jurisdiction or other authority declares that any term or
provision hereof is invalid, void or unenforceable, the parties agree that the
court making such determination shall have the power to reduce the scope,
duration, area or applicability of the term or provision, to delete specific
words or phrases, or to replace any invalid, void or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision.
SECTION 11.08. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
[Signature page follows]
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<PAGE> 44
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
HOLOPHANE CORPORATION
By: /s/ John R. DallePezze
---------------------------------------
Name: John R. DallePezze
Title: Chairman, President and CEO
NATIONAL SERVICE INDUSTRIES, INC.
By: /s/ Stewart A. Searle III
---------------------------------------
Name: Stewart A. Searle III
Title: Senior Vice President, Planning
and Development
NSI ENTERPRISES, INC.
By: /s/ Stewart A. Searle III
---------------------------------------
Name: Stewart A. Searle III
Title: Senior Vice President
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<PAGE> 45
ANNEX I
Notwithstanding any other term or provision of the Offer, the Purchaser
will not be required to accept for payment or, subject to any applicable rules
and regulations of the SEC, to pay for any Shares tendered pursuant to the Offer
and may postpone the acceptance for payment or, subject to any applicable rules
and regulations of the SEC, payment for any Shares tendered pursuant to the
Offer, and, in its good faith discretion, may amend or terminate the Offer, to
the extent provided in this Agreement, unless the Minimum Tender Condition shall
have been satisfied or waived in accordance with the terms hereof. Furthermore,
notwithstanding any other term or provision of the Offer, the Purchaser will not
be required to accept for payment or, subject as aforesaid, to pay for any
Shares not theretofore accepted for payment or paid for, and may postpone the
acceptance for payment or, subject to any applicable rules and regulations of
the SEC, payment for any Shares tendered pursuant to the Offer, and, in its good
faith discretion, may terminate or amend the Offer, to the extent provided in
this Agreement, if, at any time on or after the date of this Agreement, and
before the acceptance of such Shares for payment or, subject to any applicable
rules and regulations of the SEC, the payment therefor, any of the following
conditions exists:
(a) an order shall have been entered (or any Governmental Entity shall
have threatened in writing to seek an order) in any action or proceeding before
any federal or state court or governmental agency or other regulatory body or a
permanent injunction by any federal or state court of competent jurisdiction in
the United States shall have been issued and remain in effect (i) making illegal
the purchase of, or payment for, any Shares by Purchaser, Parent or any of
Parent's other subsidiaries; (ii) otherwise preventing the consummation of the
Offer or the Merger; (iii) imposing limitations on the ability of Purchaser,
Parent or any of Parent's other subsidiaries to exercise effectively full rights
of ownership of any Shares, including, without limitation, the right to vote any
Shares acquired by Purchaser pursuant to the Offer on all matters properly
presented to the Company's stockholders; (iv) prohibiting or materially limiting
the ownership or operation by the Company or any of its Subsidiaries, or Parent
or any of its subsidiaries, of all or any material portion of the business or
assets of the Company and its Subsidiaries, or Parent and its subsidiaries, or
compelling Parent or any of its subsidiaries to dispose of all or any material
portion of the businesses or assets of the Company or its Subsidiaries, or
Parent or its subsidiaries, as a result of the transactions contemplated by the
Offer or this Agreement; or (v) requiring divestiture by Parent or Purchaser of
any Shares.
(b) there shall have been any federal or state statute, rule or
regulation enacted, enforced, promulgated, amended or made applicable to the
Company, Purchaser, Parent or any other Affiliate of Parent or the Company or
the Offer or the Merger on or after the date of the Offer by any Governmental
Entity that could reasonably be expected to result, directly or indirectly, in
any of the consequences referred to in clauses (i) through (v) of paragraph (a)
above;
(c) (i) the Company shall have breached or failed to perform in any
material respect any of its covenants or agreements under the Agreement, which
breach shall not have been cured or waived within the earlier or (A) five
business days after receipt of notice thereof by the
<PAGE> 46
Company or (B) two business days prior to the date on which the Offer expires;
provided, that if notice of such breach is received by the Company within such
two business day period, Purchaser agrees to extend the Offer by at least two
business days or (ii) any of the representations and warranties of the Company
set forth in the Agreement (disregarding any qualifications contained therein
regarding materiality or Material Adverse Effect) shall be not be true and
correct when made or at any time prior to consummation of the Offer as if made
at and as of such time, except to the extent that such breach would not be
reasonably likely to have a Material Adverse Effect; or
(d) this Agreement shall have been terminated in accordance with its
terms or the Offer shall have been terminated with the consent of the Company;
(e) there shall have occurred any event that is reasonably likely to
result in a Material Adverse Effect;
(f) (i) the Board of Directors of the Company or any committee thereof
shall have withdrawn or modified in a manner adverse to Parent or Purchaser the
approval or recommendation of the Offer, the Merger or the Merger Agreement, or
approved or recommended any Alternative Transaction, (ii) any person or group
shall have entered into a definitive agreement or an agreement in principle with
the Company with respect to an Alternative Transaction, or (iii) the Board of
Directors of the Company or any committee thereof shall have resolved to do any
of the foregoing;
(g) any waiting period under the HSR Act applicable to the purchase of
Shares pursuant to the Offer shall not have expired or been terminated; or
(h) any consent required to be filed or obtained in connection with the
Offer, the failure or which to be so filed or obtained would have a Material
Adverse Effect, shall not have been obtained.
which, in the reasonable judgment of Purchaser in any such case, and regardless
of the circumstances (including any action or inaction by Purchaser, Parent or
any of Parent's other subsidiaries) giving rise to any such condition, makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment or
payment.
The foregoing conditions are for the sole benefit of Purchaser and may
be asserted by Purchaser regardless of the circumstances giving rise to any
condition (including any action or inaction by Purchaser or any of its
Affiliates) or may be waived by Purchaser in whole or in part at any time and
from time to time in its sole discretion. The failure by Purchaser at any time
to exercise any of the foregoing rights shall not be deemed a waiver of such
right, the waiver of any such right with respect to particular facts and other
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances and each such right shall be deemed an ongoing right that may be
asserted at any time from time to time.
06/21/99 - 8501691.6
I-2
