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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
WORLDWAY CORPORATION
(Name of Subject Company)
ABC ACQUISITION CORPORATION
ARKANSAS BEST CORPORATION
(Bidders)
COMMON STOCK, PAR VALUE $0.50 PER SHARE
(Title of Class of Securities)
98155F 10 3
(CUSIP Number of Class of Securities)
RICHARD F. COOPER, ESQ.
ARKANSAS BEST CORPORATION
3801 OLD GREENWOOD ROAD
FORT SMITH, ARKANSAS 72903
(501) 785-6000
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidders)
Copies To:
PETER A. ATKINS, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
(212) 735-3000
CALCULATION OF FILING FEE
<TABLE>
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TRANSACTION VALUATION* AMOUNT OF FILING FEE**
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<S> <C>
$81,808,342 $16,362.00
</TABLE>
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* For purposes of calculating the filing fee only. This calculation assumes
the purchase of all 6,561,672 outstanding shares (7,437,122 shares on a
fully diluted basis, assuming the exercise of all outstanding stock options)
of Common Stock, par value $0.50 per share, of WorldWay Corporation at
$11.00 per share net to the seller in cash.
** The fee, calculated in accordance with Rule 0-11(d) of the Securities
Exchange Act of 1934, is 1/50 of one percent of the aggregate Transaction
Valuation.
/ / 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: None Filing Party: N/A
Form of Registration No.: N/A Date Filed: N/A
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14D-1
CUSIP No. 98155F 10 3 Page 2 of 8 pages
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1. Name of reporting persons:
S.S. or I.R.S. Identification No. of above person
ABC ACQUISITION CORPORATION
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2. Check the appropriate box if a member of a group
(a) / /
(b) / /
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3. SEC use only
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4. Source of funds:
BK, AF
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5. Check if disclosure of legal proceedings is required pursuant to
items 2(e) or 2(f) / /
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6. Citizenship or place of organization:
NORTH CAROLINA
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7. Aggregate amount beneficially owned by each reporting person:
0
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8. Check if the aggregate amount in row (7) excludes certain shares / /
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9. Percent of class represented by amount in row (7):
0
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10. Type of reporting person:
CO
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14D-1
CUSIP No. 98155F 10 3 Page 3 of 8 pages
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1. Name of reporting persons:
S.S. or I.R.S. Identification No. of above person
ARKANSAS BEST CORPORATION (71-0673405)
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2. Check the appropriate box if a member of a group
(a) / /
(b) / /
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3. SEC use only
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4. Source of funds:
BK
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5. Check if disclosure of legal proceedings is required pursuant to
items 2(e) or 2(f) / /
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6. Citizenship or place of organization:
DELAWARE
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7. Aggregate amount beneficially owned by each reporting person:
0
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8. Check if the aggregate amount in row (7) excludes certain shares / /
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9. Percent of class represented by amount in row (7):
0
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10. Type of reporting person:
CO
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This Schedule 14D-1 relates to the offer by ABC Acquisition Corporation
(the "Purchaser"), a North Carolina corporation and a wholly owned subsidiary of
Arkansas Best Corporation, a Delaware corporation ("Parent"), to purchase all
outstanding shares of Common Stock, par value $0.50 per share (the "Shares"), of
WorldWay Corporation, a North Carolina corporation (the "Company"), at a
purchase price of $11.00 per Share, net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth in the Offer to
Purchase and in the related Letter of Transmittal (which together constitute the
"Offer"), which are annexed to and filed with this Schedule 14D-1 as Exhibits
(a)(1) and (a)(2), respectively. This Schedule 14D-1 is being filed on behalf of
the Purchaser and Parent.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is WorldWay Corporation, which has its
principal executive offices at 2400 Yorkmont Road, Suite 400, Charlotte, North
Carolina 28217.
(b) Information concerning the number of outstanding Shares, the exact
amount of Shares being sought and the consideration being offered therefor is
set forth in the "Introduction," Section 1 ("Terms of the Offer") and Section 13
("Purpose of the Offer; the Merger Agreement; Plans for the Company") of the
Offer to Purchase and is incorporated herein by reference.
(c) Information concerning the principal market in which the Shares are
traded and the high and low sales prices of the Shares for each quarterly period
during the past two years is set forth in Section 7 ("Price Range of the Shares;
Dividends") of the Offer to Purchase and is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) This Schedule 14D-1 is being filed by the Purchaser and
Parent. The information set forth in Section 10 ("Certain Information Concerning
Parent and the Purchaser") of the Offer to Purchase is incorporated herein by
reference. The names, business addresses, present principal occupations or
employment, material occupations, positions, offices or employments during the
last five years and citizenship of the directors and executive officers of the
Purchaser and Parent are set forth in Schedule I to the Offer to Purchase and
are incorporated herein by reference.
(e) and (f) The information set forth in Section 10 ("Certain Information
Concerning Parent and the Purchaser") and Section 16 ("Certain Legal Matters;
Required Regulatory Approvals") of the Offer to Purchase is incorporated herein
by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) The information set forth in Section 12 ("Background of the Offer;
Contacts with the Company") of the Offer to Purchase is incorporated herein by
reference.
(b) The information set forth in Section 12 ("Background of the Offer;
Contacts with the Company") and Section 13 ("Purpose of the Offer; The Merger
Agreement; Plans for the Company") of the Offer to Purchase is incorporated
herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) and (b) The information set forth in Section 11 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDERS.
(a)-(e) The information set forth in Section 13 ("Purpose of the Offer; The
Merger Agreement; Plans for the Company") of the Offer to Purchase is
incorporated herein by reference.
4
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(f) and (g) The information set forth in Section 8 ("Possible Effects of
the Offer on the Market for Shares; Stock Exchange Listing and Exchange Act
Registration; Margin Regulations") of the Offer to Purchase is incorporated
herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) and (b) The information set forth in "Introduction," Section 10
("Certain Information Concerning Parent and the Purchaser") and Section 13
("Purpose of the Offer; The Merger Agreement; Plans for the Company") and
Schedule I of the Offer to Purchase is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
The information set forth in "Introduction," Section 10 ("Certain
Information Concerning Parent and the Purchaser"), Section 12 ("Background of
the Offer; Contacts with the Company") and Section 13 ("Purpose of the Offer;
The Merger Agreement; 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 "Introduction" and Section 17 ("Certain 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 10 ("Certain Information Concerning
Parent and Purchaser") of the Offer to Purchase is incorporated herein by
reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Section 6 ("Certain Information with
Respect to the Debentures") and Section 13 ("Purpose of the Offer; The Merger
Agreement; Plans for the Company") of the Offer to Purchase is incorporated
herein by reference.
(b), (c) and (e) The information set forth in Section 16 ("Certain Legal
Matters; Required Regulatory Approvals") of the Offer to Purchase is
incorporated herein by reference.
(d) The information set forth in Section 8 ("Possible Effects of the Offer
on the Market for Shares; Stock Exchange Listing and Exchange Act Registration;
Margin Regulations") of the Offer to Purchase is incorporated herein by
reference.
(f) The information set forth in the Offer to Purchase, the Letter of
Transmittal, the Agreement and Plan of Merger dated as of July 8, 1995, among
Parent, the Purchaser and the Company, copies of which are attached hereto as
Exhibits (a)(1), (a)(2) and (c)(1), respectively, is incorporated herein by
reference.
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ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
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(a)(1) Offer to Purchase.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(5) Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9.
(a)(7) Form of Summary Advertisement dated July 14, 1995.
(a)(8) Text of Press Release dated July 10, 1995 issued by Parent.
(a)(9) Text of Press Release dated July 14, 1995 issued by Parent.
(a)(10) Memorandum Regarding the Company's Employee Stock Purchase Plan.
(a)(11) Memorandum Regarding the Company's Employee Savings and Protection Plan.
(b) Commitment letter, dated July 7, 1995 from Societe Generale, Southwest Agency
and NationsBank of Texas, N.A. to the Company.
(c)(1) Agreement and Plan of Merger dated as of July 8, 1995 among Parent, Purchaser
and the Company.
(c)(2) Form of Voting Trust Agreement to be entered into among Parent, the
Purchaser, the Company and the Trustee.
(d) None.
(e) Not applicable.
(f) None.
</TABLE>
6
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: July 14, 1995
ABC Acquisition Corporation
By: /s/ DONALD L. NEAL
Name:
Title: Senior Vice President --
Chief Financial Officer
Arkansas Best Corporation
By: /s/ DONALD L. NEAL
Name:
Title: Senior Vice President and
Chief Financial Officer
7
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EXHIBIT INDEX
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EXHIBIT PAGE
NUMBER EXHIBIT NAME NUMBER
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<S> <C> <C>
(a)(1) Offer to Purchase.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
(a)(5) Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Form of Summary Advertisement dated July 14, 1995.
(a)(8) Text of Press Release dated July 10, 1995 issued by Parent.
(a)(9) Text of Press Release dated July 14, 1995 issued by Parent.
(a)(10) Memorandum Regarding the Company's Employee Stock Purchase Plan.
(a)(11) Memorandum Regarding the Company's Employee Savings and Protection Plan.
(b) Commitment letter, dated July 7, 1995 from Societe Generale, Southwest
Agency and NationsBank of Texas, N.A. to the Company.
(c)(1) Agreement and Plan of Merger dated as of July 8, 1995 among Parent,
Purchaser and the Company.
(c)(2) Form of Voting Trust Agreement to be entered into among Parent, the
Purchaser, the Company and the Trustee.
(d) None.
(e) Not applicable.
(f) None.
</TABLE>
<PAGE> 1
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
WorldWay Corporation
at
$11.00 Net Per Share
by
ABC Acquisition Corporation
a wholly owned subsidiary of
Arkansas Best Corporation
------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY,
AUGUST 10, 1995, UNLESS EXTENDED.
------------------------
THE BOARD OF DIRECTORS OF WORLDWAY CORPORATION UNANIMOUSLY HAS
DETERMINED THAT THE CONSIDERATION TO BE PAID FOR EACH SHARE
IN THE OFFER AND THE MERGER DESCRIBED HEREIN IS FAIR TO
THE SHAREHOLDERS OF THE COMPANY (AS HEREINAFTER
DEFINED) AND THAT THE OFFER AND THE MERGER
ARE OTHERWISE IN THE BEST INTERESTS
OF THE COMPANY AND ITS SHAREHOLDERS,
HAS APPROVED THE OFFER AND THE
MERGER AND RECOMMENDS THAT
SHAREHOLDERS ACCEPT THE
OFFER AND TENDER THEIR
SHARES PURSUANT TO
THE OFFER.
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THE OFFER IS CONDITIONED UPON (I) THERE BEING VALIDLY TENDERED AND NOT
WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF SHARES WHICH WOULD
REPRESENT AT LEAST A MAJORITY OF ALL THEN OUTSTANDING SHARES ON A FULLY DILUTED
BASIS, (II) RECEIPT OF AN INFORMAL WRITTEN OPINION IN FORM AND SUBSTANCE
SATISFACTORY TO PARENT (AS HEREINAFTER DEFINED) FROM THE STAFF OF THE INTERSTATE
COMMERCE COMMISSION, WITHOUT THE IMPOSITION OF ANY CONDITIONS REASONABLY
UNACCEPTABLE TO PARENT, THAT THE VOTING TRUSTS TO BE USED IN CONNECTION WITH THE
OFFER AND THE PROPOSED MERGER ARE CONSISTENT WITH THE POLICIES OF THE ICC
AGAINST UNAUTHORIZED ACQUISITIONS OF CONTROL OF A REGULATED CARRIER, (III) THE
ICC SHALL HAVE GRANTED PARENT OR PURCHASER (AS HEREINAFTER DEFINED) TEMPORARY
AUTHORITY TO OPERATE THE PROPERTIES OF THE COMPANY PENDING RECEIPT OF THE
EXEMPTION FROM OR APPROVAL BY THE ICC WITHOUT IMPOSING ANY CONDITIONS REASONABLY
UNACCEPTABLE TO PARENT OR PURCHASER AND (IV) THE OTHER CONDITIONS DESCRIBED
HEREIN.
------------------------
IMPORTANT
Any shareholder desiring to tender all or any portion of such shareholder's
Shares (as defined herein) should either (1) complete and sign the Letter of
Transmittal (or a facsimile copy thereof) in accordance with the instructions in
the Letter of Transmittal, have such shareholder's signature thereon guaranteed
if required by Instruction 1 to the Letter of Transmittal, mail or deliver the
Letter of Transmittal or such facsimile and any other required documents to the
Depositary and either deliver the certificates for such Shares to the Depositary
along with the Letter of Transmittal or facsimile or deliver such Shares
pursuant to the procedure for book-entry transfer set forth in Section 2 or (2)
request such shareholder's broker, dealer, commercial bank, trust company or
other nominee to effect the transaction for such shareholder. A shareholder
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 such shareholder desires to tender such
Shares.
A shareholder who desires to tender Shares and whose certificates for such
Shares are not immediately available or who cannot comply in a timely manner
with the procedure for book-entry transfer, or who cannot deliver all required
documents to the Depositary prior to the expiration of the Offer, may tender
such Shares by following the procedure for guaranteed delivery set forth in
Section 2.
Questions and requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to the Information Agent or to the Dealer Manager at their
respective addresses and telephone numbers set forth on the back cover of this
Offer to Purchase.
------------------------
The Dealer Manager for the Offer is:
MORGAN STANLEY & CO.
Incorporated
July 14, 1995
<PAGE> 2
TABLE OF CONTENTS
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PAGE
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INTRODUCTION............................................................................ 3
1. Terms of the Offer............................................................... 5
2. Procedures for Accepting the Offer and Tendering Shares.......................... 7
3. Withdrawal Rights................................................................ 10
4. Acceptance for Payment and Payment............................................... 11
5. Certain Tax Consequences......................................................... 12
6. Certain Information with Respect to the Debentures............................... 13
7. Price Range of the Shares; Dividends............................................. 13
8. Possible Effects of the Offer on the Market for Shares; Stock Exchange Listing
and Exchange Act Registration; Margin Regulations.............................. 14
9. Certain Information Concerning the Company....................................... 15
10. Certain Information Concerning Parent and the Purchaser.......................... 18
11. Source and Amount of Funds....................................................... 20
12. Background of the Offer; Contacts with the Company............................... 21
13. Purpose of the Offer; The Merger Agreement; Plans for the Company................ 22
14. Dividends and Distributions...................................................... 30
15. Certain Conditions of the Offer.................................................. 31
16. Certain Legal Matters; Required Regulatory Approvals............................. 33
17. Certain Fees and Expenses........................................................ 36
18. Miscellaneous.................................................................... 36
Schedule I -- Directors and Executive Officers of Parent and the Purchaser.............. 38
</TABLE>
2
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To: All Holders of Shares of Common Stock of WorldWay Corporation
INTRODUCTION
ABC Acquisition Corporation, a North Carolina corporation (the "Purchaser")
and a wholly owned subsidiary of Arkansas Best Corporation, a Delaware
corporation ("Parent"), hereby offers to purchase all outstanding shares of
Common Stock (the "Common Stock"), par value $.50 per share (the "Shares"), of
WorldWay Corporation, a North Carolina corporation (the "Company"), at $11.00
per Share (the "Offer Price"), net to the seller in cash, upon the terms and
subject to the conditions set forth in this Offer to Purchase and in the related
Letter of Transmittal (which, together with any amendments or supplements hereto
or thereto, collectively constitute the "Offer"). Promptly upon the acquisition
of at least a majority of the Shares (determined on a fully diluted basis)
pursuant to the Offer, the Company will cause the shares of each of its
Interstate Commerce Commission (the "ICC") regulated subsidiaries (the "ICC
Subsidiaries") to be deposited in separate voting trusts (the "Voting Trusts").
Each such Voting Trust shall be substantially in accordance with the terms and
conditions of a voting trust agreement to be entered into with the trustee
thereof (the "Voting Trust Agreement") pending receipt of the exemption from or
approval by the ICC of the acquisition by Parent of the Company. The Offer is
conditioned upon issuance by the staff of the ICC of an informal, non-binding
opinion, without the imposition of any conditions reasonably unacceptable to the
Purchaser, to the effect that the use of the Voting Trusts are consistent with
the policies of the ICC against unauthorized acquisitions of control of a
regulated carrier. Parent has filed with the ICC an application for temporary
authority to operate the ICC Subsidiaries pending the exemption from or approval
by the ICC of the acquisition by Parent of the Company. See Section 16. The
Offer is conditioned upon the ICC granting Parent or the Purchaser of such
temporary authority without imposing any conditions reasonably unacceptable to
Parent or the Purchaser.
Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by the Purchaser
pursuant to the Offer. However, any tendering shareholder or other payee who
fails to complete and sign the Substitute Form W-9 that is included in the
Letter of Transmittal may be subject to a required backup federal income tax
withholding of 31% of the gross proceeds payable to such shareholder or other
payee pursuant to the Offer. See Section 2. The Purchaser will pay all charges
and expenses of Morgan Stanley & Co. Incorporated, as the Dealer Manager (the
"Dealer Manager"), First Union National Bank of North Carolina, as the
Depositary (the "Depositary"), and MacKenzie Partners, Inc., as the Information
Agent (the "Information Agent"), incurred in connection with the Offer. See
Section 17.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY HAS DETERMINED THAT THE
CONSIDERATION TO BE PAID FOR EACH SHARE IN THE OFFER AND THE MERGER DESCRIBED
HEREIN IS FAIR TO THE SHAREHOLDERS OF THE COMPANY AND THAT THE OFFER AND THE
MERGER ARE OTHERWISE IN THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS,
HAS APPROVED THE OFFER AND THE MERGER AND RECOMMENDS THAT SHAREHOLDERS ACCEPT
THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
The Offer is conditioned upon, among other things, (1) there being validly
tendered and not withdrawn prior to the Expiration Date (as defined in Section
1) such number of Shares which would represent at least a majority of all
outstanding Shares on a fully diluted basis (the "Minimum Condition"), (2)
receipt of an informal written opinion in form and substance satisfactory to
Parent from the staff of the ICC, without the imposition of any conditions
reasonably unacceptable to Parent, that the Voting Trusts to be used in
connection with the Offer and the Merger are consistent with the policies of the
ICC against unauthorized acquisitions of control of a regulated carrier (the
"Voting Trust Approval Condition") and (3) the ICC shall have granted Parent or
the Purchaser temporary authority to operate the properties of the Company
pending receipt of the exemption from or approval by the ICC without imposing
any conditions reasonably unacceptable to Parent or the Purchaser (the
"Temporary Authority Condition"). The Offer is also subject to other terms and
conditions contained in this Offer to Purchase. The Purchaser expressly reserves
the right
3
<PAGE> 4
(subject to the applicable rules and regulations of the Securities and Exchange
Commission (the "Commission") and the provisions of the Merger Agreement (as
defined below)), which it presently has no intention of exercising, to waive or
reduce the Minimum Condition and to elect to purchase, pursuant to the Offer, a
smaller number of Shares, provided, however, that the Purchaser shall not,
without the Company's written consent, waive the Minimum Condition. See Section
15, which sets forth in full the conditions to the Offer.
The Voting Trust Approval Condition. The Voting Trust Approval Condition
requires that the staff of the ICC issue an informal, non-binding opinion,
without the imposition of any conditions reasonably unacceptable to the
Purchaser, to the effect that the use of Voting Trusts is consistent with the
policies of the ICC against unauthorized acquisitions of control of a regulated
carrier. The Voting Trust Agreements provide that the trustees would have sole
power to vote shares of the ICC Subsidiaries they hold. Parent and the Purchaser
have requested the staff of the ICC to issue such an opinion. See Section 16.
The Temporary Authority Condition. The Temporary Authority Condition
requires that the ICC authorize Parent or the Purchaser to operate the
properties of the Company pending receipt of the exemption from or approval by
the ICC. Parent filed an application with the ICC for temporary authority on
July 10, 1995. See Section 16.
The Offer is being made pursuant to the Agreement and Plan of Merger dated
as of July 8, 1995 (the "Merger Agreement"), among Parent, the Purchaser and the
Company pursuant to which, following the consummation of the Offer and the
satisfaction or waiver of certain conditions, the Purchaser will be merged with
and into the Company (the "Merger"), with the Company continuing as the
surviving corporation (the "Surviving Corporation") as a wholly owned subsidiary
of Parent. In the Merger, each outstanding Share (other than Shares held by
Parent, the Purchaser or any subsidiary of Parent or the Purchaser which Shares,
by virtue of the Merger and without any action on the part of the holder
thereof, shall be cancelled with no payment being made with respect thereto, and
other than Shares, if any, held by shareholders who are entitled to and who
properly exercise dissenters' rights under North Carolina law) will, by virtue
of the Merger and without any action by the holder thereof, be converted into
the right to receive the per Share price paid in the Offer in cash (the "Merger
Consideration"), payable to the holder thereof, without interest thereon, upon
the surrender of the certificate formerly representing such Share. All shares of
Preferred Stock (as defined below) issued and outstanding prior to the Merger
shall remain issued and outstanding and unaffected by the Merger. All holders of
Preferred Stock will have the right to notice of the shareholders' meeting to
approve the Merger but will not be entitled to vote thereon. In addition, the
holders of Preferred Stock will have dissenters' rights in connection with the
Merger. The Merger Agreement is more fully described in Section 13 below.
Certain federal income tax consequences of the sale of Shares pursuant to the
Offer and the Merger, as the case may be, are described in Section 5 below.
Donaldson, Lufkin & Jenrette Securities Corporation, the Company's
financial advisor, has delivered to the Board of Directors of the Company its
written opinion that, based upon certain considerations and assumptions, as of
the date of such opinion, the consideration to be received by the holders of
Shares pursuant to the Merger Agreement is fair to such shareholders from a
financial point of view. Such opinion is set forth in full as an exhibit to the
Company's Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule
14D-9"), which is being mailed to shareholders of the Company together with this
Offer to Purchase, and shareholders are urged to read the opinion in its
entirety for a description of the assumptions made, matters considered and
limitations of the review undertaken by Donaldson, Lufkin & Jenrette Securities
Corporation.
The Company has advised the Purchaser that, to the knowledge of the
Company, all of its executive officers and directors intend to tender all Shares
which are held of record or beneficially owned by such persons pursuant to the
Offer (other than Shares which if tendered would cause such persons to incur
liability under the federal securities laws).
The Merger is subject to a number of conditions, including approval of the
Merger Agreement by the holders of a majority of the Shares outstanding at that
time as required by the North Carolina Business Corporation Act (the "NCBCA").
The Purchaser intends to vote all Shares purchased by it pursuant to the Offer
in favor of the Merger. See Section 13.
4
<PAGE> 5
The Company has represented to the Purchaser that as of July 7, 1995, there
were 6,561,672 Shares, 22,112 shares of preferred stock, par value $1.00 per
share (the "Preferred Stock") and no shares of preference stock issued and
outstanding, 875,450 Shares reserved for issuance upon the exercise of
outstanding stock options, and 1,052,505 Shares reserved for issuance in respect
of the Company's 6.25% Convertible Subordinated Debentures due 2011. If the
Minimum Condition is satisfied and the Purchaser accepts for payment Shares
tendered pursuant to the Offer, pursuant to the Merger Agreement the Purchaser
may designate a majority of the members of the Company's Board of Directors and
the Purchaser will be able to effect the Merger without the affirmative vote of
any other shareholder of the Company.
In April 1986, the Company issued $50 million principal amount of 6.25%
Convertible Subordinated Debentures due April 15, 2011 (the "Debentures") which
are convertible by the holders thereof into Shares at a conversion price of
$47.50 per Share, subject to adjustments in certain events. The outstanding
principal amount of Debentures on July 7, 1995 was $49,994,000. Interest on the
Debentures is payable semi-annually on April 15 and October 15 of each year. The
Debentures are currently redeemable in whole or in part at the option of the
Company at 100.625% (and declining annually to 100% on or after April 15, 1996)
of their principal amount plus accrued interest. Sinking fund payments
sufficient to retire $2,500,000 aggregate principal amount of the Debentures
annually, commencing April 15, 1997, are calculated to retire 70% of the
Debentures prior to maturity. The Debentures are listed on the New York Stock
Exchange, Inc. (the "NYSE").
The Purchaser expects that the Debentures will continue to remain
outstanding following the Merger. The Purchaser is not soliciting, and will not
accept, tenders of the Debentures. However, Shares acquired by converting the
Debentures may be tendered pursuant to the Offer by following one of the
procedures for tendering Shares, including the guaranteed delivery procedure,
described in Section 2 below. A conversion of the Debentures into Shares could
have tax consequences to the holders of such Debentures. Such holders are urged
to consult their financial and tax advisors. For further information regarding
the Debentures, see Section 6.
THE OFFER IS CONDITIONED UPON THE FULFILLMENT OF CERTAIN CONDITIONS
DESCRIBED IN SECTION 15 BELOW. THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON THURSDAY, AUGUST 10, 1995, UNLESS EXTENDED.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment and pay for all Shares
validly tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 3. The term "Expiration Date" means 12:00 Midnight, New
York City time, on Thursday, August 10, 1995, unless and until the Purchaser
shall have extended the period of time during which the Offer is open, in which
event the term "Expiration Date" shall mean the latest time and date at which
the Offer, as so extended by the Purchaser, shall expire.
Subject to the terms of the Merger Agreement and the applicable rules and
regulations of the Commission, the Purchaser expressly reserves the right, in
its sole discretion, at any time and from time to time, and regardless of
whether or not any of the events set forth in Section 15 hereof shall have
occurred or shall have been determined by the Purchaser to have occurred, to (i)
extend the period of time during which the Offer is open, and thereby delay
acceptance for payment of and the payment for any Shares, by giving oral or
written notice of such extension to the Depositary and (ii) amend the Offer in
any other respect by giving oral or written notice of such amendment to the
Depositary. THE PURCHASER SHALL NOT HAVE ANY OBLIGATION TO PAY INTEREST ON THE
PURCHASE PRICE FOR TENDERED SHARES, WHETHER OR NOT THE PURCHASER EXERCISES ITS
RIGHT TO EXTEND THE OFFER.
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If by 12:00 Midnight, New York City time, on Thursday, August 10, 1995 (or
any other date or time then set as the Expiration Date), any or all conditions
to the Offer have not been satisfied or waived, the Purchaser reserves the right
(but shall not be obligated), subject to the terms and conditions contained in
the Merger Agreement and to the applicable rules and regulations of the
Commission, to (i) terminate the Offer and not accept for payment any Shares and
return all tendered Shares to tendering shareholders, (ii) waive all the
unsatisfied conditions, provided, however that the Purchaser shall not, without
the Company's prior written consent, waive the Minimum Condition, and, subject
to complying with the terms of the Merger Agreement and the applicable rules and
regulations of the Commission, accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not theretofore withdrawn, (iii)
extend the Offer and, subject to the right of shareholders to withdraw Shares
until the Expiration Date, retain the Shares that have been tendered during the
period or periods for which the Offer is extended or (iv) amend the Offer.
There can be no assurance that the Purchaser will exercise its right to
extend the Offer. See Section 16. Any extension, delay, waiver, amendment or
termination will be followed as promptly as practicable by public announcement.
In the case of an extension, Rule 14e-l(d) under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), requires that the announcement be issued
no later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date in accordance with the public announcement
requirements of Rule 14d-4(c) under the Exchange Act. Subject to applicable law
(including Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require
that any material change in the information published, sent or given to
shareholders in connection with the Offer be promptly disseminated to
shareholders in a manner reasonably designed to inform shareholders of such
change), and without limiting the manner in which the Purchaser may choose to
make any public announcement, the Purchaser will not have any obligation to
publish, advertise or otherwise communicate any such public announcement other
than by issuing a release to the Dow Jones News Service.
In the Merger Agreement, the Purchaser may, without the consent of the
Company, extend the Offer (i) beyond any scheduled Expiration Date if at such
scheduled Expiration Date any of the conditions to the Purchaser's obligation to
accept for payment, and pay for, Shares are not satisfied or waived, until such
time as such conditions are satisfied or waived and (ii) for any period required
by any rule, regulation, interpretation or position of the Commission or the
staff thereof applicable to the Offer.
In addition, the Purchaser has agreed in the Merger Agreement that it will
not, without the consent of the Company, (i) reduce the number of Shares subject
to the Offer, (ii) reduce the Offer Price (other than as permitted by the terms
of the Offer), (iii) modify or add to the conditions set forth in Section 15 of
this Offer to Purchase, or (iv) change the form of consideration payable in the
Offer.
If the Purchaser extends the Offer or if the Purchaser (whether before or
after its acceptance for payment of Shares) is delayed in its acceptance for
payment of or payment for Shares or it is unable to pay for Shares pursuant to
the Offer for any reason, then, without prejudice to the Purchaser's rights
under the Offer, the Depositary may retain tendered Shares on behalf of the
Purchaser, and such Shares may not be withdrawn except to the extent tendering
shareholders are entitled to withdrawal rights as described in Section 3.
However, the ability of the Purchaser to delay the payment for Shares that the
Purchaser has accepted for payment is limited by Rule 14e-1 under the Exchange
Act, which requires that a bidder pay the consideration offered or return the
securities deposited by or on behalf of holders of securities promptly after the
termination or withdrawal of such bidder's offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer
(including a waiver of the Minimum Condition), the Purchaser will disseminate
additional tender offer materials and extend the Offer to the extent required by
Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The minimum period
during which the Offer must remain open following material changes in the terms
of the Offer or information concerning the Offer, other than a change in price
or a change in the percentage of securities sought, will depend upon the facts
and circumstances then existing, including the materiality of the changed terms
or information. In the Commission's view, an offer should remain open for a
minimum of five business days from the date the material change is first
published, sent or given to shareholders, and, if material changes are made with
respect to
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information that approaches the significance of price and the percentage of
securities sought, a minimum of ten business days may be required to allow for
adequate dissemination and investor response. With respect to a change in price,
a minimum ten-business-day period from the date of such change is generally
required to allow for adequate dissemination to shareholders. Accordingly, if
prior to the Expiration Date, the Purchaser decreases the number of Shares being
sought, or increases or decreases the consideration offered pursuant to the
Offer, and if the Offer is scheduled to expire at any time earlier than the
period ending on the tenth business day from the date that notice of such
increase or decrease is first published, sent or given to holders of Shares, the
Offer will be extended at least until the expiration of such period of ten
business days. For purposes of the Offer, a "business day" means any day other
than a Saturday, Sunday or a federal holiday and consists of the time period
from 12:01 a.m. through 12:00 Midnight, New York City time.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OF THE
MINIMUM CONDITION.
Consummation of the Offer is also conditioned upon satisfaction of the
Voting Trust Approval Condition, the Temporary Authority Condition and the other
conditions set forth in Section 15. Subject to the terms and conditions
contained in the Merger Agreement, the Purchaser reserves the right (but shall
not be obligated) to waive any or all such conditions. In the event that the
Purchaser waives any condition set forth in Section 15, the Commission may, if
the waiver is deemed to constitute a material change to the information
previously provided to the shareholders, require that the Offer remain open for
an additional period of time and/or that the Purchaser disseminate information
concerning such waiver.
The Company has provided the Purchaser with the Company's shareholder lists
and security position listings for the purpose of disseminating the Offer to
holders of the Shares. This Offer to Purchase, the related Letter of Transmittal
and other relevant materials will be mailed by the Purchaser to record holders
of Shares and will be furnished by the Purchaser to brokers, dealers, commercial
banks, trust companies and similar persons whose names, or the names of whose
nominees, appear on the shareholder lists or, if applicable, who are listed as
participants in a clearing agency's security position listing, for subsequent
transmittal to beneficial owners of Shares.
2. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES.
Valid Tender of Shares. For a shareholder validly to tender Shares pursuant
to the Offer, either (i) a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), together with any required signature
guarantees (or, in the case of a book-entry transfer, an Agent's Message (as
defined below)) and any other documents required by the Letter of Transmittal,
must be received by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase and either certificates for tendered Shares must
be received by the Depositary at one of such addresses or such Shares must be
delivered pursuant to the procedure for book-entry transfer set forth below (and
a Book-Entry Confirmation (as defined below) received by the Depositary), in
each case prior to the Expiration Date, or (ii) the tendering shareholder must
comply with the guaranteed delivery procedure set forth below.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY,
IS AT THE OPTION AND SOLE RISK OF THE TENDERING SHAREHOLDER. SHARES WILL BE
DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN
THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS
BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Book-Entry Transfer. The Depositary will make request to establish accounts
with respect to the Shares at The Depository Trust Company (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 Book-Entry Transfer Facility's system may make book-entry delivery of
Shares by causing the Book-Entry Transfer Facility to transfer such Shares into
the Depositary's account at such Book-Entry Transfer Facility in
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<PAGE> 8
accordance with such Book-Entry Transfer Facility's procedures for such
transfer. However, although delivery of Shares may be effected through
book-entry transfer into the Depositary's account at a Book-Entry Transfer
Facility, the Letter of Transmittal (or facsimile thereof), 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 required documents,
must, in any case, be transmitted to, and received by, the Depositary at one of
its addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date, or the tendering shareholder must comply with the guaranteed
delivery procedure described below. The confirmation of a book-entry transfer of
Shares into the Depositary's account at a Book-Entry Transfer Facility as
described above is referred to herein as a "Book-Entry Confirmation".
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH
SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgement from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal if (i) the Letter of Transmittal is signed by the registered holder
of Shares (which term, for purposes of this Section, includes any participant in
any of the Book-Entry Transfer Facility's systems whose name appears on a
security position listing as the owner of the Shares) tendered therewith and
such registered holder has not completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" on the
Letter of Transmittal or (ii) such Shares are tendered for the account of a
financial institution (including most commercial banks, savings and loan
associations and brokerage houses) that is a participant in the Securities
Transfer Association Medallion Signature Guarantee Program (an "Eligible
Institution"). In all other cases, all signatures on the Letters of Transmittal
must be guaranteed by an Eligible Institution. See Instructions 1 and 5 to the
Letter of Transmittal. If the certificates for Shares are registered in the name
of a person other than the signer of the Letter of Transmittal, or if payment is
to be made or certificates for Shares not tendered or not accepted for payment
are to be issued to a person other than the registered holder of the
certificates surrendered, the tendered certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered holders or owners appear on the certificates,
with the signatures on the certificates or stock powers guaranteed as aforesaid.
See Instruction 5 to the Letter of Transmittal.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's certificates for Shares are not immediately
available or the procedures for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such Shares may nevertheless be
tendered if all the following guaranteed delivery procedures are duly complied
with:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser, is received
by the Depositary, as provided below, prior to the Expiration Date; and
(iii) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation with respect to such Shares),
together with a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), with any required signature guarantees (or in the
case of book-entry transfer, an Agent's Message) and any other documents
required by the Letter of Transmittal, are received by the Depositary
within five trading days on the NYSE after the date of execution of such
Notice of Guaranteed Delivery.
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The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by telegram, facsimile transmission or mail to the
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such Notice of Guaranteed Delivery and a representation that the
shareholder on whose behalf the tender is being made is deemed to own the Shares
being tendered within the meaning of Rule 14e-4 under the Exchange Act.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for (or a timely Book-Entry
Confirmation with respect to) such Shares, (ii) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees (or, in the case of a book-entry transfer, an Agent's
Message) and (iii) any other documents required by the Letter of Transmittal.
Accordingly, tendering shareholders may be paid at different times depending
upon when certificates for Shares or Book-Entry Confirmations are actually
received by the Depositary. Under no circumstances will interest be paid on the
purchase price of the Shares, regardless of any extension of the Offer or any
delay in making such payment.
Dividend Reinvestment Plan. Participants in the Company's Dividend
Reinvestment Plan (the "Dividend Reinvestment Plan") who wish to tender all or a
portion of the Shares (the "Dividend Reinvestment Plan Shares") held in such
participants' Dividend Reinvestment Plan accounts pursuant to the Offer should
so indicate by checking the box captioned "Tender of Dividend Reinvestment Plan
Shares" in the Letter of Transmittal and returning to the Depositary the
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) with any required signature guarantees and any other documents required
by the Letter of Transmittal. Fractional Shares will not, however, be accepted
for payment pursuant to the Offer or otherwise sold, unless a participant is
deemed to have withdrawn from the Dividend Reinvestment Plan pursuant to the
following paragraph. Any Dividend Reinvestment Plan Shares tendered but not
purchased will be returned to the participant's Dividend Reinvestment Plan
account.
If a participant tenders all of his or her Dividend Reinvestment Plan
Shares and all such Dividend Reinvestment Plan Shares (other than fractional
Shares) are purchased under the terms of the Offer, such tender will be deemed
to be authorization and written notice to the Company of such participant's
withdrawal from the Dividend Reinvestment Plan (a "Withdrawing Participant"),
unless otherwise indicated by such participant. Such authorization will also be
deemed to constitute authorization by such Withdrawing Participant to sell at
the Offer Price any fractional Dividend Reinvestment Plan Share remaining in his
or her account after the purchase of his or her Dividend Reinvestment Plan
Shares pursuant to the Offer. The proceeds of any such sale will be forwarded
directly to the Withdrawing Participant.
Appointment as Proxy. By executing a Letter of Transmittal as set forth
above, the tendering shareholder will irrevocably appoint designees of the
Purchaser as such shareholder's attorneys-in-fact and proxies in the manner set
forth in the Letter of Transmittal, each with full power of substitution, to the
full extent of such shareholder's rights with respect to the Shares tendered by
such shareholder and accepted for payment by the Purchaser and with respect to
any and all other Shares or other securities or rights issued or issuable in
respect of such Shares on or after that date of this Offer to Purchase. Upon
acceptance of the Shares for payment by the Purchaser, all such powers of
attorney and proxies shall be considered irrevocable and coupled with an
interest in the Company and the tendered Shares and other securities or rights.
Such appointment will be effective upon the acceptance for payment of such
Shares by the Purchaser in accordance with the terms of the Offer. Upon such
acceptance for payment, all prior powers of attorney and proxies given by such
shareholder with respect to such Shares or other securities or rights will,
without further action, be revoked and no subsequent powers of attorney and
proxies may be given (and, if given, will not be deemed effective). The
designees of the Purchaser will thereby be empowered to exercise all voting and
other rights with respect to such Shares or other securities or rights in
respect of any annual, special or adjourned meeting of the Company's
shareholders, or otherwise, as they in their sole discretion deem proper,
including the special meeting to be called to approve the Merger Agreement as
described in Section 13 below. The Purchaser reserves the right to require that,
in order for Shares to be deemed validly tendered, immediately upon the
Purchaser's acceptance for payment of such Shares, the Purchaser must be able to
exercise full voting and
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other rights with respect to such Shares and other securities or rights,
including voting at any meeting of shareholders then scheduled.
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, whose
determination will be final and binding on all parties. The Purchaser reserves
the absolute right to reject any or all tenders determined by it not to be in
proper form or the acceptance for payment of or payment for which may, in the
opinion of the Purchaser's counsel, be unlawful. The Purchaser also reserves the
absolute right to waive any of the conditions of the Offer or any defect or
irregularity in any tender of Shares of any particular shareholder, whether or
not similar defects or irregularities are waived in the case of other
shareholders. No tender of Shares will be deemed to have been validly made until
all defects or irregularities relating thereto have been cured or waived by the
Purchaser. None of the Purchaser, Parent, the Depositary, the Information Agent,
the Dealer Manager 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. In order to avoid "backup
withholding" of federal income tax on payments of cash pursuant to the Offer, a
shareholder surrendering Shares in the Offer must provide the Depositary with
such shareholder'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 shareholder is not subject to backup withholding. Certain
shareholders (including, among others, all corporations and certain foreign
individuals and entities) are not subject to backup withholding. If a
shareholder 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 shareholder and payment of cash to such shareholder pursuant
to the Offer may be subject to backup withholding at a rate of 31%. All
shareholders surrendering Shares pursuant to the Offer should complete and sign
the main signature form and the Substitute Form W-9 included as part of the
Letter of Transmittal to provide the information and certification necessary to
avoid backup withholding (unless an applicable exemption exists and is proved in
a manner satisfactory to the Purchaser and the Depositary). Noncorporate foreign
shareholders should complete and sign the main signature form and a Form W-8,
Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding. See Instruction 9 to the
Letter of Transmittal. For other federal income tax consequences, see Section 5.
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 shareholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
3. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 3, tenders of Shares made
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may
be withdrawn pursuant to the procedures set forth below at any time prior to the
Expiration Date and, unless theretofore accepted for payment and paid for by the
Purchaser pursuant to the Offer, may also be withdrawn at any time after
September 11, 1995 (or such later date as may apply in case the Offer is
extended).
If, for any reason whatsoever, acceptance for payment of 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, retain tendered Shares and such Shares
may not be withdrawn except to the extent that the tendering shareholder is
entitled to and duly exercises withdrawal rights as described in this Section 3.
Any such delay will be by an extension of the Offer to the extent required by
law.
In order for a withdrawal to be effective, a written, telegraphic or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase and must specify the name of the person having tendered the Shares to
be withdrawn, the
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number of Shares to be withdrawn and the name of the registered holder of the
Shares to be withdrawn, if different from the name of the person who tendered
the Shares. If certificates for Shares have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
certificates, the serial numbers shown on such certificates must be submitted to
the Depositary and, unless such Shares have been tendered by an Eligible
Institution, the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution. If Shares have been tendered pursuant to the procedure for
book-entry transfer as set forth in Section 2, any notice of withdrawal must
also specify the name and number of the account at the appropriate Book-Entry
Transfer Facility to be credited with the withdrawn Shares and otherwise comply
with such Book-Entry Transfer Facility's procedures. Withdrawals of tenders of
Shares may not be rescinded, and any Shares property withdrawn will thereafter
be deemed not validly tendered for any purposes of the Offer. However, withdrawn
Shares may be rendered by again following one of the procedures described in
Section 2 at any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser in its sole
discretion, whose determination will be final and binding. None of the
Purchaser, Parent, the Depositary, the Information Agent, the Dealer Manager 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.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT.
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 purchase, by accepting for payment, and will
pay for, all Shares validly tendered prior to the Expiration Date and not
properly withdrawn in accordance with Section 3 promptly after the later to
occur of (i) the Expiration Date and (ii) the satisfaction or waiver of the
conditions to the Offer set forth in Section 15. Any determination concerning
the satisfaction of such terms and conditions will be within the sole discretion
of the Purchaser, and such determination will be final and binding on all
tendering shareholders. See Sections 1 and 15. Subject to the terms of the
Merger Agreement, the Purchaser expressly reserves the right, in its sole
discretion, to delay acceptance for payment of or payment for Shares in order to
comply in whole or in part with any applicable law, including, without
limitation, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the regulations thereunder (the "HSR Act") and the Interstate
Commerce Act. Any such delays will be effected in compliance with Rule 14e-1(c)
under the Exchange Act (relating to the Purchaser's obligation to pay for or
return tendered Shares promptly after the termination or withdrawal of the
Offer).
See Section 16 for further information concerning the need for approvals
under the Interstate Commerce Act prior to the purchase of Shares pursuant to
the Offer.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) certificates for such
Shares (or timely Book-Entry Confirmation of a transfer of such Shares as
described in Section 2), (ii) a Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees and
(iii) any other documents required by the Letter of Transmittal.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares properly tendered to the Purchaser
and not withdrawn as, if and when the Purchaser gives oral or written notice to
the Depositary of the Purchaser's acceptance for payment of such Shares. Payment
for Shares accepted for payment pursuant to the Offer will be made by deposit of
the purchase price therefor with the Depositary, which will act as agent for
tendering shareholders for the purpose of receiving payment from the Purchaser
and transmitting payment to tendering shareholders.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE
SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR
ANY DELAY IN MAKING SUCH PAYMENT.
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If the Purchaser is delayed in its acceptance for payment of or payment for
Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer (but subject to compliance with Rule 14e-1(c) under the Exchange Act,
which requires that a tender offeror pay the consideration offered or return the
tendered securities promptly after the termination or withdrawal of a tender
offer), the Depositary may, nevertheless, on behalf of the Purchaser, retain
tendered Shares, and any such Shares may not be withdrawn except to the extent
tendering shareholders are entitled to exercise, and duly exercise, withdrawal
rights as described in Section 3.
If any tendered Shares are not purchased pursuant to the Offer because of
an invalid tender or otherwise, certificates for any such Shares will be
returned, without expense to the tendering shareholder (or, in the case of
Shares delivered by book-entry transfer of such Shares into the Depositary's
account at a Book-Entry Transfer Facility pursuant to the procedure set forth in
Section 2, such Shares will be credited to an account maintained at the
appropriate Book-Entry Transfer Facility), as promptly as practicable after the
expiration or termination of the Offer.
IF, PRIOR TO THE EXPIRATION DATE, THE PURCHASER SHALL INCREASE THE
CONSIDERATION OFFERED TO HOLDERS OF SHARES PURSUANT TO THE OFFER, SUCH INCREASED
CONSIDERATION SHALL BE PAID TO ALL HOLDERS OF SHARES THAT ARE PURCHASED PURSUANT
TO THE OFFER, WHETHER OR NOT SUCH SHARES WERE TENDERED PRIOR TO SUCH INCREASE IN
CONSIDERATION.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to Parent, or to one or more direct or indirect wholly
owned subsidiaries of Parent, the right to purchase Shares tendered pursuant to
the Offer, but any such transfer or assignment will not relieve the Purchaser of
its obligations under the Offer and will in no way prejudice the rights of
tendering shareholders to receive payment for Shares validly tendered and
accepted for payment pursuant to the Offer.
5. CERTAIN TAX CONSEQUENCES.
Sales of Shares pursuant to the Offer (and the receipt of the right to
receive cash by the shareholders of the Company pursuant to the Merger) will be
taxable transactions for federal income tax purposes and may also be taxable
transactions under applicable state, local, foreign and other tax laws. For
federal income tax purposes, a tendering shareholder will generally recognize
gain or loss equal to the difference between the amount of cash received by the
shareholder pursuant to the Offer (or to be received pursuant to the Merger) and
the tax basis in the Shares tendered by the shareholder and purchased pursuant
to the Offer (or cancelled pursuant to the Merger). Gain or loss will be
calculated separately for each block of Shares tendered and purchased pursuant
to the Offer (or cancelled pursuant to the Merger). Such gain or loss will be
capital gain or loss (assuming the Shares are held as a capital asset), and any
such capital gain or loss will be long term if the Shares were held for more
than one year.
The foregoing discussion may not be applicable with respect to Shares
received pursuant to the exercise of employee stock options or otherwise as
compensation or with respect to holders of Shares who are subject to special tax
treatment under the federal income tax laws such as non-U.S. persons, life
insurance companies, tax-exempt organizations and financial institutions, and
may not apply to a holder of Shares in light of its individual circumstances.
SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE
SPECIFIC CONSEQUENCES TO THEM (INCLUDING THE APPLICATION AND EFFECT OF ANY
STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS) OF THE OFFER AND THE MERGER.
12
<PAGE> 13
6. CERTAIN INFORMATION WITH RESPECT TO THE DEBENTURES.
The Purchaser expects that the Debentures will continue to remain
outstanding following the Merger. The Purchaser is not soliciting, and will not
accept, tenders of the Debentures. However, Shares acquired by converting the
Debentures may be tendered pursuant to the Offer by following one of the
procedures for tendering Shares, including the guaranteed delivery procedure,
described in Section 2. The Debentures may be converted for Shares by
surrendering the Debentures to:
First Union National Bank of North Carolina
as Trustee
Corporate Trust Operations
Attention: Corporate Action Unit
2 First Union Center
Charlotte, North Carolina 28288-1153
The notice of conversion in the form provided on the Debentures (or such
other notice which is acceptable to the Company) must be duly endorsed by the
registered holder or the registered holder's duly authorized attorney and given
to the Company at such office or agency that the holder of the Debenture elects
to convert such Debenture or the portion thereof specified in said notice. Such
notice shall also state the name or names (with address and taxpayer
identification number) in which the certificate or certificates of Shares are to
be issued, and shall be accompanied by transfer taxes, if required.
7. PRICE RANGE OF THE SHARES; DIVIDENDS.
According to the Company's Annual Report on Form 10-K for the year ended
December 31, 1994 (the "Form 10-K"), the Shares are listed and traded on the
NYSE and the Pacific Stock Exchange (the "PSE") under the symbol "WCN". The
following table sets forth, for each of the fiscal quarters since January 1,
1993, the reported high and low sales prices per Share as reported in the Form
10-K with respect to the periods occurring in 1993 and 1994, and as reported
thereafter by published financial sources.
WORLDWAY CORPORATION
<TABLE>
<CAPTION>
SALES PRICE
---------------
HIGH LOW
----- -----
<S> <C> <C>
1993
First Quarter....................................................... $16 $13 1/8
Second Quarter...................................................... 15 11 3/8
Third Quarter....................................................... 14 3/4 11 1/2
Fourth Quarter...................................................... 13 3/4 11 1/2
1994
First Quarter....................................................... 13 9 1/4
Second Quarter...................................................... 12 7/8 9 1/2
Third Quarter....................................................... 10 5/8 8 3/4
Fourth Quarter...................................................... 11 1/8 8 5/8
1995
First Quarter....................................................... 12 1/8 9 1/4
Second Quarter...................................................... 10 1/4 8 7/8
Third Quarter (through July 13, 1995)............................... 11 1/4 9 1/4
</TABLE>
On July 7, 1995, the last full day of trading before the public
announcement of the execution of the Merger Agreement, the reported closing sale
price of the Shares on the NYSE was $9 1/2 per Share. On July 13, 1995, the last
full day of trading before the commencement of the Offer, the reported closing
sale price of the Shares on the NYSE was $11.00 per Share. SHAREHOLDERS ARE
URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
13
<PAGE> 14
In 1993 the Company paid a cash dividend of $.05 per Share. Since January
10, 1994 the Company has paid no cash dividends in respect of the Shares.
According to the Form 10-K, the Company has no current plans for declaring any
dividends.
8. POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; STOCK EXCHANGE
LISTING AND EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS.
Possible Effects of the Offer on the Market for the Shares. The purchase of
Shares pursuant to the Offer will reduce the number of holders of Shares and the
number of Shares that might otherwise trade publicly and could adversely affect
the liquidity and market value of the remaining Shares held by the public. 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 therefor.
Stock Exchange Listing. Depending upon the number of Shares purchased
pursuant to the Offer, the Shares may no longer meet the requirements of the
NYSE or the PSE for continued listing. 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 management and other concentrated
holdings) should fall below 600,000 or the aggregate market value of publicly
held Shares (exclusive of management and other concentrated holdings) should
fall below $5 million. According to the PSE's published guidelines, the PSE
would consider delisting the Shares if, among other things, the number of
beneficial holders of at least 100 Shares should fall below 300, the number of
beneficial holders should fall below 400, the number of publicly held Shares
(exclusive of any Shares held by directors, officers or their immediate families
and other concentrated holdings of 5% or more of the total outstanding Shares)
should fall below 200,000 and a market value of such Shares should fall below $1
million. If as a result of the purchase of Shares pursuant to the Offer, the
Shares no longer meet the requirements of the NYSE or the PSE for continued
listing and the listing of the Shares is discontinued on either exchange, the
market for the Shares could be adversely affected.
If the NYSE and the PSE were to delist the Shares, it is possible that the
Shares would continue to trade on other securities exchanges or in the
over-the-counter market and that price quotations would be reported by such
exchanges or through the Nasdaq Stock Market or other sources. The extent of the
public market for the Shares and the availability of such quotations would,
however, depend upon the number of shareholders remaining at such time, the
interest in maintaining a market in the Shares on the part of securities firms,
the possible termination of registration of the Shares under the Exchange Act,
as described below, and other factors.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Registration of the Shares under the Exchange Act may be
terminated upon application of the Company to the Commission if the Shares are
neither listed on a national exchange nor held by 300 or more holders of record.
Termination of registration of the Shares under the Exchange Act would
substantially reduce the information required to be furnished by the Company to
its shareholders and to the Commission, and would make certain provisions of the
Exchange Act no longer applicable to the Company, such as the short-swing profit
recovery provisions of Section 16(b) of the Exchange Act, the requirement of
furnishing a proxy statement pursuant to Section 14(a) of the Exchange Act in
connection with shareholders' meetings and the related requirement of furnishing
an annual report to shareholders, and the requirements of Rule 13e-3 under the
Exchange Act with respect to going private transactions. Furthermore, the
ability of "affiliates" of the Company and persons holding "restricted
securities" of the Company to dispose of such securities pursuant to Rule 144
promulgated under the Securities Act of 1933, as amended, may be impaired or
eliminated. The Purchaser reserves the right to seek to cause the Company to
apply for termination of registration of the Shares under the Exchange Act as
soon as possible after the completion of the Offer if the requirements for such
termination are met. If registration of Shares under the Exchange Act were
terminated, the Shares would no longer be "margin securities" or be eligible for
stock exchange listing or Nasdaq Stock Market reporting.
14
<PAGE> 15
If registration of the Shares is not terminated prior to the Merger, then
the Shares will cease to be listed on the NYSE and the PSE and the registration
of the Shares under the Exchange Act will be terminated following the
consummation of the Merger.
Margin Regulations. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of allowing
brokers to extend credit on the collateral of the Shares for the purpose of
buying, carrying or trading in securities ("Purpose Loans"). Depending upon
factors such as the number of record holders of the Shares and the number and
market value of publicly held Shares, following the purchase of Shares pursuant
to the Offer, the Shares might no longer constitute "margin securities" for
purposes of the margin regulations of the Federal Reserve Board and therefore
could no longer be used as collateral for Purpose Loans made by brokers. In
addition, if registration of the Shares under the Exchange Act were terminated,
the Shares would no larger constitute "margin securities."
9. CERTAIN INFORMATION CONCERNING THE COMPANY.
The Company is a North Carolina corporation with its principal executive
offices at 400 Two Coliseum Center, 2400 Yorkmont Road, Charlotte, North
Carolina 28217. The following description of the Company's business has been
taken from the Form 10-K and is qualified in its entirety by reference to the
Form 10-K. The Company is a freight transportation holding company. The Company
has seven operating subsidiaries that offer domestic and international surface
transportation services as well as logistics management and third-party
services.
15
<PAGE> 16
Set forth below is certain selected consolidated financial information with
respect to the Company and its subsidiaries excerpted or derived from the
information contained in the Form 10-K and the Company's Quarterly Report on
Form 10-Q for the quarter ended March 25, 1995, which are incorporated by
reference herein. More comprehensive financial information is included in such
reports and other documents filed by the Company with the Commission, and the
following summary is qualified in its entirety by reference to such reports and
such other documents and all the financial information (including any related
notes) contained therein. Such reports and other documents should be available
for inspection and copies thereof should be obtainable in the manner set forth
below under "Available Information".
WORLDWAY CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
TWELVE WEEKS ENDED
------------------- YEAR ENDED DECEMBER 31,
MARCH 25 MARCH 26 ------------------------------
1995 1994 1994 1993 1992
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Operating revenue........................... $191,337 $192,630 $935,940 $845,350 $801,138
Earnings (loss) from operations............. (4,697) (1,922) 26,208 5,038 (615)
Operating ratio(1).......................... 102.5% 101.1% 97.2% 99.4% 100.0%
Pre-tax earnings (loss)..................... $ (7,356) $ (4,325) $ 14,828 $ (5,329) $ (9,900)
Net earnings (loss) before cumulative effect
of changes in accounting principles....... (4,846) (2,918) 8,000 (4,162) (6,188)
Net earnings (loss)......................... (4,846) (4,140) 6,778 (4,162) 3,648
Net earnings (loss) per share before
cumulative effect of changes in accounting
principles................................ (.74) (.44) 1.21 (.65) (.96)
Net earnings (loss) per common share........ (.74) (.63) 1.02 (.65) .54
</TABLE>
<TABLE>
<CAPTION>
AT
MARCH 25, AT DECEMBER 31,
--------- -------------------
1995 1994 1993
--------- -------------------
(UNAUDITED)
<S> <C> <C> <C>
BALANCE SHEET DATA:
Total current assets........................................... $116,016 $114,841 $ 96,806
Total assets................................................... 360,507 370,314 363,938
Total current liabilities...................................... 110,193 120,923 118,053
Current maturities of long-term debt........................... 3,383 3,206 5,494
Total long-term debt, excluding current portion................ 66,792 68,277 71,176
Total shareholders' equity..................................... 123,478 128,346 121,612
</TABLE>
- ---------------
(1) The operating ratio is the ratio of operating expenses, which is the
difference between operating revenue and earnings (loss) from operations,
to operating revenue.
On June 8, 1995, the Company issued a press release stating that it
expected to incur a loss of between $11 million and $12.5 million, or between
$1.65 and $1.90 per Share, for the second quarter. The Company stated in its
press release that the losses were caused by continuing costs from the
implementation of the metropolitan and regional distribution centers system. In
addition, the Company said that its less-than-truckload operations have
experienced declines in tonnage and shipments during the first half of 1995.
However, the Company noted in its press release that several of its subsidiaries
continued to experience substantial increases in revenue compared with results
from a year ago. According to the Company's press release, Cardinal Freight
Carriers Corporation second quarter revenue was up 29% from last year's period;
CaroTrans International Inc. achieved second quarter revenue growth of 4.87% and
The Complete Logistics Company had second quarter revenue growth of 31.24%.
16
<PAGE> 17
Certain Company Projections. During the course of Parent's due diligence
investigation relating to the Company (see Section 12), the Company provided
Parent or its representatives with certain projections of future operating
performance for the Company on a consolidated basis based upon the Company's
three year financial plan, as revised. The Company had made available a previous
financial plan on a subsidiary by subsidiary basis which did not take account of
current losses and Parent requested that a revision be made in this regard and
on a consolidated basis. The Company does not as a matter of course make public
any projections as to future performance or earnings, and the projections set
forth below are included in this Offer to Purchase only because the information
was provided to Parent. The inclusion of this information should not be regarded
as an indication that Parent or the Purchaser or anyone who received this
information considered it a reliable predictor of future operating results and
this information should not be relied on as such. The projections 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 or forecasts.
Projections of this type are based on estimates and assumptions that are
inherently subject to significant economic, industry and competitive
uncertainties and contingencies, all of which are difficult to predict and many
of which are beyond the Company's control. The projections were based on a
number of assumptions that are beyond the control of the Company, the Purchaser
or Parent or their respective financial advisors, including economic forecasting
(both general and specific to the Company's business), which is inherently
uncertain and subjective. None of the Company, the Purchaser or Parent or their
respective financial advisors assumes any responsibility for the accuracy of any
of the projections. The inclusion of the projections should not be regarded as
an indication that the Company, the Purchaser, Parent or any other person who
received such information considers it an accurate prediction of future events.
There can be no assurance that the projections will be realized, and actual
results may vary materially from those shown. The summary projected financial
information provided by the Company to Parent is as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1995 1996 1997
------ ------ -------
(IN MILLIONS)
<S> <C> <C> <C>
Total consolidated revenues............................... $856.5 $962.5 $1,067.5
Total operating income (loss)............................. (15.0) 23.1 39.0
Net income (loss)......................................... (20.0) 2.4 12.1
</TABLE>
In addition, the Company provided Parent with certain information relating
to one subsidiary's budgeted financial plan for 1995.
Available Information. The Company is subject to the reporting requirements
of the Exchange Act and, in accordance therewith, is required to file reports
and other information with the Commission relating to its business, financial
condition and other matters. Information, as of particular dates, concerning the
Company's directors and officers, their remuneration, stock options and other
matters, 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 proxy statements distributed to the Company's shareholders 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 at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
regional offices of the Commission located in the Citicorp Center, 500 West
Madison Street (Suite 1400), Chicago, Illinois 60661 and Seven World Trade
Center, 13th Floor, New York, New York 10048. Copies should be obtainable, by
mail, upon payment of the Commission's customary charges, by writing to the
Commission's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549.
Such information should also be available for inspection at the library of the
NYSE, 20 Broad Street, New York, New York 10005.
Except as otherwise stated in this Offer to Purchase, the information
concerning the Company contained herein has been taken from or based upon
publicly available documents on file with the Commission and other publicly
available information. Although the Purchaser and Parent do not have any
knowledge that any such information is untrue, neither the Purchaser nor Parent
takes any responsibility for the accuracy or completeness of such information 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.
17
<PAGE> 18
10. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER.
Parent, which had 1994 consolidated revenues of $1.1 billion, is primarily
engaged in business through its subsidiaries: ABF Freight System, Inc., in less
than truckload shipments of general commodities; Clipper Exxpress Company, in
rail intermodal; Integrated Distribution Inc., in logistics; and Parent is also
engaged in truck tire retreading and new truck tire sales through Treadco, Inc.,
its 46%-owned subsidiary ("Treadco"). Parent, a Delaware corporation, is
headquartered at 3801 Old Greenwood Road, Fort Smith, Arkansas 72903,
501-785-6000.
The Purchaser, a North Carolina corporation, is a wholly owned subsidiary
of Parent. It was organized to acquire the Shares and has not conducted any
unrelated activities since its organization. The principal offices of the
Purchaser are located at 3801 Old Greenwood Road, Fort Smith, Arkansas 72903.
All outstanding shares of capital stock of the Purchaser are owned by Parent.
Financial Information. Set forth below is certain selected consolidated
financial information relating to Parent and its subsidiaries excerpted or
derived from the information contained in Parent's Annual Report on Form 10-K
for the fiscal year ended December 31, 1994, or Parent's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1995, which are incorporated by
reference herein. More comprehensive financial information is included in such
reports and other documents filed by Parent with the Commission, and the
following summary is qualified in its entirety by reference to such reports and
such other documents and all the financial information (including any related
notes) contained therein. Such reports and other documents should be available
for inspection and copies thereof should be obtainable in the manner set forth
below under "Available Information".
ARKANSAS BEST CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31, YEAR ENDED DECEMBER 31,
-------------------- ----------------------------------
1995 1994 1994 1993 1992
-------- -------- --------- --------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Operating revenue.................... $311,207 $264,981 $1,098,421 $1,009,918 $959,949
Operating income..................... 13,354 12,618 48,115 51,369 57,255
Operating ratio(1)................... 95.7% 95.2% 95.6% 94.9% 94.0%
Income before extraordinary item and
cumulative effect of accounting
change............................. $ 5,142 $ 5,575 $ 18,707 $ 20,972 $ 18,755
Net income (loss).................... 5,142 5,575 18,707 20,311 (583)
Income per common share before
extraordinary item and cumulative
effect of accounting change........ .21 .23 .74 .89 .99
Net income (loss) per common share... .21 .23 .74 .85 (.03)
</TABLE>
18
<PAGE> 19
<TABLE>
<CAPTION>
AT DECEMBER 31,
AT MARCH 31, --------------------
1995 1994 1993
------------ -------- --------
(UNAUDITED)
<S> <C> <C> <C>
BALANCE SHEET DATA:
Total current assets........................................ $184,249 $185,799 $150,562
Total assets................................................ 567,585 569,045 447,733
Total current liabilities................................... 222,808 223,399 140,222
Current portion of long-term debt........................... 64,472 65,161 15,239
Long-term debt (including capital leases and excluding
current portion).......................................... 57,016 59,295 43,731
Total shareholders' equity.................................. 220,476 216,605 201,990
</TABLE>
- ---------------
(1) The operating ratio is the ratio of operating expenses, which is the
difference between operating revenue and operating income, to operating
revenue.
The name, business address, present principal occupation or employment,
five-year employment history and citizenship of each of the directors and
executive officers of Parent and the Purchaser are set forth in Schedule I
hereto.
Except as described in this Offer to Purchase, neither of the Purchaser or
Parent (together, the "Corporate Entities") nor, to the best knowledge of the
Corporate Entities, any of the persons listed in Schedule I or any associate or
majority-owned subsidiary of the Corporate Entities or any of the persons so
listed, beneficially owns any equity security of the Company, and none of the
Corporate Entities or, to the best knowledge of the Corporate Entities, any of
the other persons referred to above, or any of the respective directors,
executive officers or subsidiaries of any of the foregoing, has effected any
transaction in any equity security of the Company during the past 60 days.
Except as described in this Offer to Purchase, (i) there have not been any
contacts, transactions or negotiations between the Corporate Entities, any of
their respective subsidiaries or, to the best knowledge of the Corporate
Entities, any of the persons listed in Schedule I, on the one hand, and the
Company or any of its directors, officers or affiliates, on the other hand, that
are required to be disclosed pursuant to the rules and regulations of the
Commission and (ii) none of the Corporate Entities or, to the best knowledge of
the Corporate Entities, any of the persons listed in Schedule I has any
contract, arrangement, understanding or relationship with any person with
respect to any securities of the Company.
Except as described in this Offer to Purchase, during the last five years,
none of the Corporate Entities or, to the best knowledge of the Corporate
Entities, any of the persons listed in Schedule I (i) has been convicted in a
criminal proceeding (excluding traffic violations and 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.
Available Information. Parent is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports and other information with the Commission relating to its business,
financial condition and other matters. Information, as of particular dates,
concerning Parent's directors and officers, their remuneration, stock options
and other matters, the principal holders of Parent's securities and any material
interest of such persons in transactions with Parent is required to be disclosed
in proxy statements distributed to Parent's shareholders and filed with the
Commission. Such reports, proxy statements and other information should be
available for inspection at the Commission, and copies thereof should be
obtainable from the Commission, in the same manner as set forth with respect to
information concerning the Company in Section 9. Such material should also be
available for inspection at the library of the NYSE, 20 Broad Street, New York,
New York 10005.
19
<PAGE> 20
11. SOURCE AND AMOUNT OF FUNDS.
The total amount of funds required by the Purchaser to purchase all
outstanding Shares pursuant to the Offer and to pay fees and expenses related to
the Offer and the Merger is estimated to be approximately $75 million. The
Purchaser plans to obtain all funds needed for the Offer and the Merger through
a capital contribution that will be made by Parent to the Purchaser. Parent
plans to obtain the funds for such capital contribution pursuant to a financing
for which it has received a commitment letter (the "Commitment"), dated July 7,
1995 from Societe Generale, Southwest Agency ("SocGen") and NationsBank of
Texas, N.A. ("NationsBank") (SocGen and NationsBank are collectively referred to
as the "Agents"). The Purchaser has conditioned the Offer on Parent receiving
sufficient funds pursuant to the Commitment (or any alternate financing
commitment obtained by Parent) to consummate the Offer and the Merger and the
transactions contemplated thereby. Set forth below is a summary of the principal
terms of the Commitment.
Pursuant to the Commitment, the Agents have agreed to provide up to
$350,000,000 (of which SocGen has committed up to $200,000,000 and NationsBank
up to $150,000,000) comprised of a (i) $75,000,000 Senior Secured Term Loan (the
"Term Loan") and (ii) $275,000,000 Senior Secured Revolving Credit (the
"Revolving Loan") (the Term Loan and the Revolving Loan are collectively
referred to as the "Facility"). The Agents have the right to syndicate all or a
portion of the Facility. The proceeds of the Term Loan may be used to finance
the acquisition of Shares pursuant to the Offer and the Merger and related costs
and expenses. The proceeds of the Revolving Loan may be used (a) to support
working capital needs and general corporate purposes and to facilitate the
issuance of standby letters of credit of Parent and its subsidiaries, (b) to pay
off existing senior indebtedness of the Company and (c) to pay off or refinance
the existing revolving credit facility and receivables facility of Parent.
The Commitment is conditioned upon (i) the negotiation and execution of a
definitive bank credit agreement, security documentation, and other related
documentation satisfactory to the Agents, (ii) there being no material adverse
change, in the reasonable opinion of the Agents, in the financial condition,
business, operations, properties or prospects of Parent and the Company from the
date of the audited financial statements most recently provided prior to the
date of the Commitment, with certain exceptions in the case of the Company, or
in the markets for primary and secondary syndication of loans after the date of
delivery of the Commitment, (iii) at the time of the proposed initial funding,
no injunction or other restraining order having been issued or filed, or a
hearing therefor being pending or noticed, (iv) the use of the proceeds being
legal and proper under applicable corporate law, (v) the Plan of Merger being in
form and substance reasonably satisfactory to the Agents, (vi) satisfactory
completion of the Agents' due diligence with respect to the Company and (vii)
the provisions of the Offer being reasonably satisfactory to the Agents.
The Facility will be secured by (a) a first lien on all accounts
receivables and eligible revenue equipment of Parent and its subsidiaries, (b) a
pledge of stock of all material subsidiaries of Parent, including Treadco, and
the shares of the Purchaser, and (c) a negative pledge of any remaining assets
of Parent and its subsidiaries (other than the Shares), including real estate of
Parent and its subsidiaries. The Facility will also include an unconditional
guaranty by all present and future direct and indirect material subsidiaries of
Parent, except Treadco.
The repayment of the Term Loan is based on a five-year amortization table,
as set forth in the Commitment, commencing on the earlier of the date of the
first advance or the issuance of the initial letter of credit under the Facility
(the "Effective Date"), with quarterly payments of principal beginning 15 months
from the Effective Date. The Revolving Loan is available on a fully revolving
basis for three years from the Effective Date. All outstanding Revolving Loans
are due in full at maturity. The commitment under the Revolving Loan may be
extended for additional one year periods with the approval of all lenders.
Interest rates under the Facility will be, at Parent's option, either the
base rate or the London Interbank Offered Rate ("LIBOR") plus a margin, which
fluctuates based on a ratio of Parent's total debt to earnings before interest,
taxes, depreciation and amortization. In addition, Parent will pay a quarterly
commitment fee on the unused portion of the Revolving Loan. Parent will also be
required to pay an issuance fee for each standby letter of credit equal to the
applicable LIBOR margin.
20
<PAGE> 21
The credit agreement relating to the Facility will contain customary
representations and warranties, events of default and affirmative and negative
covenants.
Parent has agreed to pay the Agents customary commitment and facility fees
as well as certain of the fees and expenses of the Agents arising in connection
with the syndication, preparation, negotiation, execution and administration of
the Facility whether or not the Facility closes. In addition, Parent has agreed
to indemnify each of the Agents and certain related persons against certain
liabilities and expenses arising out of the Facility.
No final decisions have been made concerning the method Parent will employ
to refinance and repay the indebtedness incurred by Parent under the Facility.
Such decisions will be based on Parent's review from time to time of the
advisability of particular actions, including the availability of cash flow
generated by Parent, prevailing interest rates, market conditions and other
financial and economic conditions.
The foregoing summary of the Commitment is qualified in its entirety by
reference to the Commitment, which is filed as an exhibit to the Schedule 14D-1.
12. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.
Robert A. Young, III, President and Chief Executive Officer of Parent, and
Lary R. Scott, Chairman and Chief Executive Officer of the Company, have been
acquainted with each other for a number of years through their activities in the
transportation industry.
At Mr. Young's request, Mr. Young and Mr. Scott met on January 31, 1994, to
discuss the potential of Parent pursuing the acquisition of the Company. On
February 16, 1994, Mr. Young, Mr. William A. Marquard, Chairman of Parent, and a
representative from Morgan Stanley & Co. Incorporated ("Morgan Stanley"),
financial advisor to Parent, met with Mr. Scott and Mr. K.G. Younger, the former
Chairman of the Company, to discuss the issues and possibilities surrounding
such a transaction. During the remainder of the first quarter of 1994, certain
executives of Parent commenced an analysis of the Company based upon publicly
available information, but this activity was halted in April 1994 when Parent
was in the midst of a strike and, subsequently, Parent pursued and completed two
other acquisitions in the second half of 1994.
At a meeting of Parent's Board of Directors on May 9, 1995 Mr. Young
reviewed why he believed the acquisition of the Company would be beneficial to
Parent and received the authorization of Parent's Board of Directors to contact
Mr. Scott and initiate discussions concerning the possibility of acquiring the
Company. Mr. Young and Mr. Scott met in Charlotte on May 25, 1995 and discussed
generally the idea of a merger. Mr. Young and Mr. Scott met again on June 8 and
9, 1995 at Parent's headquarters in Fort Smith to further discuss the idea of a
merger. During these meetings, Messrs. Young and Scott tentatively discussed a
premium in the range of 15% to 20% above the then prevailing price per Share to
be paid to the Company's shareholders. At the time of these meetings the price
per Share was approximately $9.50, which, applying the range of premiums
discussed, would have resulted in a price per Share of between $10.93 and $11.40
to be paid to the Company's shareholders. These discussions were preliminary and
Mr. Scott noted that the Company had not yet involved its independent investment
banker for financial advice. No decisions or commitments were made, but it was
agreed that discussions would continue. It was recognized that Parent would need
to complete its due diligence of the Company and it was mutually expected that
the issue of price would again be discussed. Concurrently with these meetings,
Parent and the Company executed a confidentiality agreement.
Parent conducted business and legal due diligence at the Company's
executive headquarters and at certain of the Company's subsidiaries. The initial
phase of this due diligence occurred from June 13 to June 15, 1995 at the
Company's executive headquarters. Parent's due diligence involved
representatives from Parent and Morgan Stanley. On June 20, 1995, Parent's Board
of Directors held an informational meeting with representatives of Morgan
Stanley and Parent's legal counsel at which Mr. Young reviewed his discussions
with Mr. Scott and the preliminary results of the due diligence sessions to
date. Following discussion of these matters, the Board of Directors authorized
management to proceed with its discussions
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with the Company, subject to the positive outcome of additional due diligence
sessions scheduled for June 23, 26, and 27, 1995 with certain of the Company's
subsidiaries.
Negotiations of the Merger Agreement commenced on June 30, 1995 between
representatives of Parent and the Company and included a meeting in Charlotte on
July 5, 1995. As part of the negotiations over the Merger Agreement, on July 5,
1995, Mr. Young and Mr. Scott tentatively agreed on the price per Share of
$11.00 and the principal provisions reflected in the Merger Agreement, subject
to the completion of negotiation with respect to all other aspects of the
definitive agreement and the approval of the respective Boards of Directors of
Parent and the Company. Negotiations between the Company and Parent continued
through July 8, 1995, culminating with the execution of the Merger Agreement.
On July 7, 1995, Parent's Board of Directors held a special telephonic
conference meeting during which Mr. Young presented a summary of Parent's due
diligence and Parent's legal advisors reviewed the terms of the proposed Merger
Agreement. Mr. Young presented the Board with a summary of the Commitment and
Morgan Stanley made presentations regarding the financial terms and fairness to
Parent, from a financial point of view, of the consideration to be paid to the
holders of Shares pursuant to the Merger Agreement. Parent's Board of Directors
then approved the terms of the Merger Agreement and authorized Mr. Young to
continue final negotiations, which led to the approval of the Merger Agreement
by the Board of Directors of the Company on July 8, 1995.
13. PURPOSE OF THE OFFER; THE MERGER AGREEMENT; PLANS FOR THE COMPANY.
Purpose. The purpose of the Offer and the Merger is to acquire control of,
and the entire equity interest in, the Company. Following the Offer, the
Purchaser and Parent intend to acquire any remaining Shares in the Company not
acquired in the Offer by consummating the Merger. Following consummation of the
Offer, Parent expects a majority of the Company's Board of Directors to be
comprised of persons designated by Parent as provided in the Merger Agreement.
Following the Merger, Parent expects the Company's entire Board of Directors to
be comprised of persons designated by Parent, a majority of whom will be
officers or employees of Parent or its subsidiaries (including the Company).
The Merger Agreement. The Merger Agreement provides that following the
satisfaction or waiver of the conditions described below under "Conditions to
Each Party's Obligations to Effect the Merger" and "Additional Conditions to
Obligations of Parent and the Purchaser to Effect the Merger", the Purchaser
will be merged with and into the Company, and each then outstanding Share (other
than Shares held by Parent, the Purchaser or any subsidiary of Parent or the
Purchaser which Shares, by virtue of the Merger and without any action on the
part of the holder thereof, shall be cancelled with no payment being made with
respect thereto, and other than Shares, if any, held by shareholders who are
entitled to and who properly exercise dissenters' right under North Carolina
law) will be converted into the right to receive an amount in cash equal to the
price per Share paid pursuant to the Offer. Shares of Preferred Stock will
remain outstanding and unaffected by the Merger.
Vote Required to Approve Merger. The Board of Directors of the Company has
unanimously approved the Merger Agreement and has recommended approval of the
Merger by the holders of the Shares in accordance with Section 55-11-01 of the
NCBCA. The affirmative vote of the holders of a majority of the then outstanding
Shares is required for approval of the Merger in accordance with Section
55-11-03 of the NCBCA. The Company has agreed, as promptly as practicable, to
call, send notice of, convene and hold a special meeting of the holders of the
Shares to approve the Merger. Holders of Preferred Stock will not be entitled to
vote on the Plan of Merger but holders of Preferred Stock will receive notice of
such meeting. The proxy granted in a duly executed Letter of Transmittal permits
the Purchaser to vote the Shares accompanied by such Letter of Transmittal at
such meeting once the Shares have been accepted for payment, and the Purchaser
intends to vote all Shares accepted for payment or purchased by it pursuant to
the Offer in favor of the Merger.
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Termination of the Merger Agreement. The Merger Agreement may be terminated
at any time prior to the effective time of the Merger (the "Effective Time"),
whether before or after approval of matters presented in connection with the
Merger by the shareholders of the Company:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company if (i) as a result of the failure,
occurrence or existence of any of the conditions described in Section 15 of
this Offer to Purchase, the Offer shall have terminated or expired in
accordance with its terms without the Purchaser having accepted for payment
any Shares pursuant to the Offer or (ii) the Purchaser shall not have
accepted for payment any Shares pursuant to the Offer by October 31, 1995,
provided, however, that the right to terminate pursuant to the provisions
described in this subparagraph (b) shall not be available to either party
if its failure to perform any of its obligations under the Merger Agreement
results in the failure, occurrence or existence of any such condition;
(c) by either Parent or the Company if any Governmental Entity (as
defined below) shall have issued an order, decree or ruling or taken any
other action permanently enjoining, restraining or otherwise prohibiting
the acceptance for payment of, or payment for, the Shares pursuant to the
Offer or the Merger and such order, decree or ruling or other action shall
have become final and nonappealable;
(d) by Parent or the Purchaser prior to the purchase of the Shares
pursuant to the Offer in the event of a breach by the Company of any
representation, warranty, covenant or other agreement contained in the
Merger Agreement which (A) would give rise to the failure of a condition
described in paragraph (e) or (f) of Section 15 and (B) cannot be or has
not been cured within 20 days after the giving of written notice to the
Company;
(e) by Parent or the Purchaser if either Parent or the Purchaser is
entitled to terminate the Offer as a result of the occurrence of any event
set forth in paragraph (d) of Section 15;
(f) by the Company in connection with entering into a definitive
agreement in accordance with the provisions described in the second
paragraph under "Acquisition Proposals", provided it has complied with all
provisions thereof, including the notice provisions therein, and that it
makes simultaneous payment of the Expenses and the Termination Fee (as such
terms are defined below under "Fees and Expenses"); or
(g) by the Company, if the Purchaser or Parent shall have breached in
any material respect any of their respective representations, warranties,
covenants or other agreements contained in the Merger Agreement, which
failure to perform is incapable of being cured or has not been cured within
20 days after the giving of written notice to Parent or the Purchaser, as
applicable, except, in any case, such failures which are not reasonably
likely to affect adversely Parent's or the Purchaser's ability to complete
the Offer or the Merger.
Conduct of Business. Until the acquisition of the Shares pursuant to the
Offer, except as specifically contemplated by the Merger Agreement or in
accordance with the temporary authority granted by the ICC to Parent or the
Purchaser, the Company shall and shall cause its subsidiaries to carry on their
respective businesses in the ordinary course and use all reasonable efforts
consistent with good business judgment to preserve intact their current business
organizations, keep available the services of their current officers and key
employees and preserve their relationships consistent with past practice with
desirable customers, suppliers, licensors, licensees, distributors and others
having business dealings with them to the end that their goodwill and ongoing
businesses shall be unimpaired in all material respects at the Effective Time.
Without limiting the generality of the foregoing, and except as specifically
contemplated by the Merger Agreement, prior to the Effective Time the Company
shall not, and shall not permit any of its subsidiaries to (without Parent's
prior written consent, which consent may not be unreasonably withheld):
(i) (A) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock, other than the
dividend on the Preferred Stock to be paid in July 1995 and other than
dividends and distributions by any direct or indirect wholly owned
subsidiary of the Company to its
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parent, (B) split, combine or reclassify any of its capital stock or issue
or authorize the issuance of any other securities in respect of, in lieu of
or in substitution for shares of its capital stock or (C) purchase, redeem
or otherwise acquire any shares of capital stock of the Company or any of
its subsidiaries or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities (except for the
acquisition of Shares from holders of stock options in full or partial
payment of the exercise price payable by such holder upon exercise of stock
options outstanding on the date of the Merger Agreement);
(ii) issue, deliver, sell, pledge or otherwise encumber or amend any
shares of its capital stock, any other voting securities or any securities
convertible into, or any rights, warrants or options to acquire, any such
shares, voting securities or convertible securities (other than the
issuance of Shares upon the exercise of employee stock options outstanding
on the date of the Merger Agreement in accordance with their present
terms);
(iii) amend its Articles of Incorporation, as amended, Amended and
Restated By-laws or other comparable charter or organizational documents;
(iv) acquire or agree to acquire (A) by merging or consolidating with,
or by purchasing a substantial portion of the assets of, or by any other
manner, any business or any corporation, partnership, joint venture,
association or other business organization or division thereof or (B) any
assets, including real estate, except (x) purchases of inventory,
furnishings, equipment and fuel in the ordinary course of business
consistent with past practice or (y) expenditures consistent with the
Company's current capital budget previously provided to Parent as set forth
in a schedule to the Merger Agreement;
(v) sell, lease, license, mortgage or otherwise encumber or subject to
any lien or otherwise dispose of any of its properties or assets, except
obsolete equipment that is traded in or sold, in each case pursuant to the
commitment letter, dated April 22, 1994, between Carolina Freight Carriers
Corporation and Midway Ford Truck Center Inc. and the Truck Broker
Agreement, dated May 16, 1995, between Carolina Freight Carriers
Corporation and Boulevard Truck Sales and Service;
(vi) except as set forth in a schedule to the Merger Agreement, other
than ordinary course working capital borrowings consistent with past
practice, incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or
warrants or other rights to acquire any debt securities of the Company or
any of its subsidiaries, guarantee any debt securities of another person,
enter into any "keep well" or other agreement to maintain any financial
statement condition of another person or enter into any arrangement having
the economic effect of any of the foregoing or make any loans, advances or
capital contributions to, or investments in, any other person (other than
routine advances after the date of the Merger Agreement to employees not to
exceed $50,000 in the aggregate and consistent with past practice);
(vii) make any material tax election or settle or compromise any
material tax liability;
(viii) pay, discharge, settle or satisfy any material claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge, settlement or
satisfaction, in the ordinary course of business consistent with past
practice or in accordance with their terms, of liabilities reflected or
reserved against in, the most recent consolidated financial statements (or
the notes thereto) of the Company included in all required reports, proxy
statements, forms and other documents filed with the SEC since January 1,
1993 (the "SEC Documents") and publicly available prior to the date of the
Merger Agreement or incurred in the ordinary course of business consistent
with past practice, or, except in the ordinary course of business
consistent with past practice, waive the benefits of, or agree to modify in
any manner, any confidentiality, standstill or similar agreement to which
the Company or any of its subsidiaries is a party;
(ix) except as required to comply with applicable law, disclosed in a
disclosure schedule to the Merger Agreement or expressly provided in the
Merger Agreement, (A) adopt, enter into, terminate or amend any Benefit
Plan (as defined in the Merger Agreement) or other arrangement for the
current or future benefit or welfare of any director, officer or current or
former employee, except to the extent
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<PAGE> 25
necessary to coordinate any such benefit plans with the terms of the Merger
Agreement, (B) increase in any manner the compensation or fringe benefits
of, or pay any bonus to, any director, officer or employee (except for
normal increases or bonuses in the ordinary course of business consistent
with past practice to employees other than directors, officers or senior
management personnel and that, in the aggregate, do not result in a
significant increase in benefits or compensation expense to the Company and
its subsidiaries relative to the level in effect prior to such action (but
in no event shall the aggregate amount of all such increases exceed 3% of
the aggregate annualized compensation expense of the Company and its
subsidiaries reported in the most recent audited financial statements of
the Company included in the SEC Documents)), (C) pay any benefit not
provided for under any Benefit Plan, (D) grant any awards under any bonus,
incentive, performance or other compensation plan or arrangement or Benefit
Plan (including the grant of stock options, stock appreciation rights,
stock based or stock related awards, performance units or restricted stock,
or the removal of existing restrictions in any Benefit Plans or agreements
or awards made thereunder) or (E) take any action to fund or in any other
way secure the payment of compensation or benefits under any employee plan,
agreement, contract or arrangement or Benefit Plan;
(x) make any new capital expenditure or expenditures, other than
capital expenditures not to exceed, in the aggregate, the amounts provided
for capital expenditures (x) in respect of projects approved prior to the
date of the Merger Agreement and (y) in the capital budget of the Company
provided to Parent, except as set forth in clause (iv) above;
(xi) except in the ordinary course of business and except as otherwise
permitted by the Merger Agreement, modify, amend or terminate any contract
or agreement set forth in the SEC Documents to which the Company or any
subsidiary is a party or waive, release or assign any material rights or
claims; or
(xii) authorize any of, or commit or agree to take any of, the
foregoing actions except as otherwise permitted by the Merger Agreement.
In addition, the Merger Agreement provides that the Company shall not, and
shall not permit any of its subsidiaries to, take any action that would result
in (i) any of its representations and warranties set forth in the Merger
Agreement that are qualified as to materiality becoming untrue, (ii) any of such
representations and warranties that are not so qualified becoming untrue in any
material respect or (iii) any of the conditions to the Offer described in
Section 15 below not being satisfied (subject to the Company's right to take
action specifically permitted by the provisions described under "Acquisition
Proposals").
Acquisition Proposals. The Merger Agreement provides that the Company shall
not, nor shall it permit any of its subsidiaries to, nor shall it authorize (and
shall use its best efforts not to permit) any officer, director or employee of,
or any investment banker, attorney or other advisor or representative of, the
Company or any of its subsidiaries to, (i) solicit or initiate, or knowingly
encourage the submission of, any takeover proposal or (ii) participate in any
discussions or negotiations regarding, or furnish to any person any information
with respect to, or take any other action to knowingly facilitate the making of
any proposal that constitutes, or may reasonably be expected to lead to, any
takeover proposal; provided, however, that, prior to the acceptance for payment
of the Shares pursuant to the Offer, if in the opinion of the Board of Directors
of the Company, after consultation with outside legal counsel to the Company,
such failure to act would likely be inconsistent with its fiduciary duties to
the Company's shareholders under applicable law, the Company may, in response to
an unsolicited takeover proposal, and subject to compliance with the provisions
described in the second succeeding paragraph, (A) furnish information with
respect to the Company to any person pursuant to a confidentiality agreement and
(B) participate in negotiations regarding such takeover proposal. Without
limiting the foregoing, it is understood that any violation of the restrictions
set forth in the preceding sentence by any director or executive officer of the
Company or any of its subsidiaries, whether or not such person is purporting to
act on behalf of the Company or any of its subsidiaries or otherwise, shall be
deemed to be a breach of the provisions described in this paragraph by the
Company. For purposes of the Merger Agreement, "takeover proposal" means any
proposal or offer from any person relating to any direct or indirect acquisition
or purchase of all or a substantial part of the assets of the Company or any of
its subsidiaries or of over 15% of
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any class of equity securities of the Company or any of its subsidiaries or any
tender offer or exchange offer that if consummated would result in any person
beneficially owning shares of any class of equity securities of the Company or
any of its subsidiaries, or any merger, consolidation, business combination,
sale of substantially all of the assets, recapitalization, liquidation,
dissolution or similar transaction involving the Company or any of its
subsidiaries other than the transactions contemplated by the Merger Agreement,
or any other transaction the consummation of which would reasonably be expected
to impede, interfere with, prevent or materially delay the Offer or the Merger
or which would reasonably be expected to dilute materially the benefits to
Parent of the transactions contemplated hereby.
The Merger Agreement provides that, except as set forth in the provisions
described in this paragraph, neither the Board of Directors of the Company nor
any committee thereof shall (i) withdraw or modify, or propose to withdraw or
modify, in a manner adverse to Parent or the Purchaser, the approval or
recommendation by the Board of Directors or any such committee of the Offer, the
Merger Agreement or the Merger, (ii) approve or recommend, or propose to approve
or recommend, any takeover proposal or (iii) enter into any agreement with
respect to any takeover proposal. Notwithstanding the foregoing, in the event
prior to the time of acceptance for payment of the Shares in the Offer if in the
opinion of the Board of Directors of the Company, after consultation with
outside legal counsel to the Company, failure to do so would likely be
inconsistent with its fiduciary duties to the Company's shareholders under
applicable law, the Board of Directors of the Company may (subject to the terms
of this and the following sentences) withdraw or modify its approval or
recommendation of the Offer, the Merger Agreement or the Merger, approve or
recommend a competitive proposal, or enter into an agreement with respect to a
competitive proposal, in each case at any time after midnight on the next
business day following Parent's receipt of written notice (a "Notice of
Competitive Proposal") advising Parent that the Board of Directors of the
Company has received a competitive proposal, specifying the material terms and
conditions of such competitive proposal and identifying the person making such
competitive proposal; provided that the Company shall not enter into an
agreement with respect to a competitive proposal unless the Company shall have
furnished Parent with a Notice of Competitive Proposal within the time frame
provided in the immediately preceding clause in advance of any date that it
intends to enter into such agreement. In addition, if the Company proposes to
enter into an agreement with respect to any takeover proposal, it shall
concurrently with entering into such agreement pay, or cause to be paid, to
Parent the Expenses (as defined below) and the Termination Fee (as defined
below). For purposes of the Merger Agreement, a "competitive proposal" means any
bona fide takeover proposal to acquire, directly or indirectly, for
consideration consisting of cash and/or securities, more than 50% of the Shares
then outstanding or all or a substantial part of the assets of the Company and
otherwise on terms which the Company's Board of Directors reasonably determined
in good faith (after consultation with its financial advisors) are more
favorable to the Company's shareholders from a financial point of view than the
Offer and the Merger (taking into account any improvements to the Offer and the
Merger proposed in writing by Parent).
The Merger Agreement provides that in addition to the obligations of the
Company described in the immediately preceding paragraph, (i) the Company shall
advise Parent of any request for information or of any takeover proposal, or any
proposal with respect to any takeover proposal, the material terms and
conditions of such request or takeover proposal, and the identity of the person
making any such takeover proposal or inquiry, and (ii) the Company will keep
Parent fully informed of the status and details (including amendments or
proposed amendments) of any such request, takeover proposal or inquiry.
Conditions to Each Party's Obligation To Effect the Merger. The Merger
Agreement provides that the respective obligation of each party to effect the
Merger is subject to the satisfaction or waiver of the following conditions:
(a) The Merger Agreement shall have been approved and adopted by the
affirmative vote of the holders of a majority of all Shares entitled to be
cast in accordance with applicable law and the Company's Articles of
Incorporation, as amended; provided that Parent and the Purchaser shall
vote all their Shares in favor of the Merger, and
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<PAGE> 27
(b) No statute, rule, regulation, executive order, decree, temporary
restraining order, preliminary or permanent injunction or other order
enacted, entered, promulgated, enforced or issued by any Governmental
Entity or other legal restraint or prohibition preventing the consummation
of the Merger or the transactions contemplated thereby shall be in effect;
provided, however, that, in the case of a decree, injunction or other
order, each of the parties shall have used reasonable efforts to prevent
the entry of any such injunction or other order and to appeal as promptly
as possible any decree, injunction or other order that may be entered.
Board of Directors. The Merger Agreement provides that promptly upon the
acceptance for payment of any Shares by the Purchaser pursuant to the Offer, the
Purchaser shall be entitled to designate such number of directors, rounded up to
the next whole number, on the Board of Directors of the Company as will give the
Purchaser, subject to compliance with Section 14(f) of the Exchange Act,
representation on the Board of Directors equal to at least that number of
directors that equals the product of the total number of directors on such Board
(giving effect to the directors elected pursuant to this sentence) multiplied by
the percentage that the aggregate number of Shares held by the Purchaser,
including Shares accepted for payment pursuant to the Offer, bears to the number
of Shares then outstanding, and the Company and its Board of Directors shall, at
such time, take any and all such action needed to cause the Purchaser's
designees to be appointed to the Company's Board of Directors (including to
cause directors to resign).
Fees and Expenses. The Merger Agreement provides that, except as provided
below, all fees and expenses incurred in connection with the Offer, the Merger,
the Merger Agreement and the transactions contemplated hereby shall be paid by
the party incurring such fees or expenses, whether or not the Offer or the
Merger is consummated.
The Merger Agreement provides that the Company shall pay, or cause to be
paid, in same day funds to Parent the sum of (x) all of Parent's reasonably
documented out-of-pocket expenses in an amount up to but not to exceed $500,000
(the "Expenses") and (y) $1,750,000 (the "Termination Fee") upon demand if (i)
Parent or the Purchaser terminates the Merger Agreement under the provisions
described in subparagraph (e) of "Termination of the Merger Agreement", (ii) the
Company terminates the Merger Agreement pursuant to the provisions described in
subparagraph (f) of "Termination of the Merger Agreement", or (iii) prior to any
termination of the Merger Agreement, a takeover proposal shall have been made
and within nine months of the termination of the Merger Agreement a transaction
constituting a takeover proposal is consummated or the Company enters into an
agreement with respect to, or approves or recommends a takeover proposal
(whether or not related to a takeover proposal made prior to any termination of
the Merger Agreement); provided, however, that in the case of (iii) above, if
such transaction has a value to the shareholders of the Company equivalent to or
less favorable than the proposed Offer and the Merger, then the Company shall
pay to Parent the Expenses (but not the Termination Fee) and, provided, further,
that no payment shall be made to the extent that the Merger Agreement has been
terminated pursuant to the provisions described in subparagraph (g) of
"Termination of the Merger Agreement". In addition, if prior to any termination
of the Merger Agreement, any person or group purchases or otherwise acquires,
directly or indirectly, beneficial ownership of 30% or more of the outstanding
voting securities of the Company, all of Parent's Expenses shall promptly be
paid by the Company to Parent and, additionally, if at any time prior to 12
months following the termination of the Merger Agreement any such person or
group consummates a transaction that would otherwise constitute a takeover
proposal, there shall be paid to Parent immediately prior to the consummation of
such transaction the Termination Fee (provided that no such payment shall be
made if the Merger Agreement has been terminated pursuant to the provisions
described in subparagraph (g) of "Termination of the Merger Agreement"). The
amount of Expenses so payable shall be the amount set forth in an estimate
delivered by Parent, subject to upward or downward adjustment (not to be in
excess of the amount set forth in clause (x) above) upon delivery of reasonable
documentation therefor. In no event shall the Company be required to pay more
than one Termination Fee.
Indemnification and Insurance. The Merger Agreement provides that Parent
and the Surviving Corporation agree that the indemnification obligations set
forth in the Company's Articles of Incorporation, as amended, and the Amended
and Restated By-laws on the date of the Merger Agreement and the
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<PAGE> 28
indemnification obligations set forth on a schedule to the Merger Agreement
shall survive the Merger and shall not be amended, repealed or otherwise
modified for a period of six years after the Effective Time in any manner that
would adversely affect the rights thereunder of individuals who on or prior to
the Effective Time were directors, officers, employees or agents of the Company
(the "Indemnified Parties").
The Merger Agreement provides that for six years from the Effective Time,
the Surviving Corporation shall either (x) maintain in effect the Company's
current directors' and officers' liability insurance covering those persons who
are covered on the date of the Merger Agreement by the Company's directors' and
officers' liability insurance policy; provided, however, that in no event shall
the Surviving Corporation be required to expend in any one year an amount in
excess of 200% of the annual premiums currently paid by the Company for such
insurance which the Company represented to be $105,000 for the twelve month
period ended May 12, 1996; and, provided, further, that if the annual premiums
of such insurance coverage exceed such amount, the Surviving Corporation shall
be obligated to obtain a policy with the greatest coverage available for a cost
not exceeding such amount or (y) cause Parent's directors' and officers'
liability insurance then in effect to cover those persons who are covered on the
date of the Merger Agreement by the Company's directors' and officers' liability
insurance policy with respect to those matters covered by the Company's
directors' and officers' liability policy (such coverage to be not less
favorable than the coverage provided under such policy to Parent's directors and
officers). Notwithstanding the foregoing, on and after the date two years from
the Effective Time, Parent, at its option, may agree in writing to guarantee or
assume the indemnification obligations set forth in the preceding paragraph in
lieu of maintaining the insurance described in clauses (x) or (y) above.
For two years from the Effective Time, the Surviving Corporation shall
maintain in effect the Company's current or similar professional liability
insurance with respect to Company employee attorneys so long as premium amounts
do not exceed $8,000 per year provided, however, that if the annual premiums of
such insurance coverage exceed such amount, the Surviving Corporation shall be
obligated to obtain a policy with the greatest coverage available for a cost not
exceeding such amount.
Shareholder Meeting. The Merger Agreement provides that the Company will,
as soon as practicable following the commencement of the Offer, duly call, give
notice of, convene and hold a meeting of holders of Shares for the purpose of
approving the Merger Agreement and the transactions contemplated by the Merger
Agreement. Subject to the provisions described above under "Acquisition
Proposals," the Merger Agreement provides that the Company will through its
Board of Directors recommend to its shareholders approval of the Merger
Agreement, the Merger and the other transactions contemplated by the Merger
Agreement.
Representations and Warranties. The Merger Agreement contains standard
representations and warranties from the Company, Parent and the Purchaser.
Stock Options. Based upon information provided by the Company, the current
directors and executive officers of the Company as a group hold stock options
granted under the Option Plans (as defined in the Merger Agreement) to purchase
an aggregate of 607,000 Shares at exercise prices ranging from $6.625 to $14.50
per Share. In accordance with the terms of the Merger Agreement, the Company
shall use its best efforts to assure that (i) each stock option shall be
accelerated to be fully exercisable prior to the consummation of the Offer and
(ii) each holder of a stock option granted under the Option Plans which is
outstanding immediately prior to the consummation of the Offer will be cancelled
in exchange for an amount in cash equal to the product of (y) the number of
Shares subject to such stock option immediately prior to the consummation of the
Offer and (z) the excess of the price per Share to be paid in the Offer over the
per Share exercise price of such stock options. Any stock option not cancelled
in accordance with this paragraph immediately prior to the consummation of the
Offer, shall be cancelled at the Effective Time in exchange for an amount in
cash, payable at the Effective Time, equal to the amount which would have been
paid had such stock option been cancelled immediately prior to the consummation
of the Offer.
Approvals. Parent and the Company shall, and each shall cause each of its
subsidiaries to, take all such actions as are necessary to (i) cooperate with
one another to prepare and present to the ICC, relevant labor unions and
appropriate changes of operations committees under any existing collective
bargaining agreements to which the Company is a party as soon as practicable all
filings and other presentations in connection with
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seeking any ICC, relevant labor unions or change of operations committees'
approval, exemption or other authorization necessary to consummate the
transactions contemplated by the Merger Agreement, including, without
limitation, all information regarding the Company pertinent to the application
for temporary authority, (ii) prosecute such filings and other presentations
with diligence, (iii) diligently oppose any objections to, appeals or petitions
to reconsider or to reopen any such ICC, relevant labor unions or change of
operations committees approval or exemptions by persons not party to the Merger
Agreement, and (iv) take all such further action, including appeal of any
adverse decision, as reasonably may be necessary to obtain a final order or
orders of the ICC, or approval of the relevant labor unions or appropriate
change of operations committees, in each case approving such transactions
consistent with the Merger Agreement.
As used in this Offer to Purchase, the term "Governmental Entity" means any
Federal, state or local government or any court, administrative or regulatory
agency, domestic or foreign.
Voting Trusts. Promptly upon the acquisition of the Shares pursuant to the
Offer, the Company shall cause the shares of the ICC Subsidiaries to be
deposited in the Voting Trusts.
Temporary Authority. In the event the ICC grants Parent or the Purchaser
temporary authority pursuant to 49 U.S.C. 11349, the Company agrees, following
the purchase of Shares pursuant to the Offer, to allow Parent and the Purchaser
to manage and operate the properties of the ICC Subsidiaries consistent with
such temporary authority and shall not interfere with such temporary authority.
Supplemental Indenture. In connection with the Merger, the Company shall
execute a supplemental indenture with respect to the Debentures, provide such
notices and take any such other action as may be required by the indenture.
Although the foregoing summary of the Merger Agreement includes all
material terms of such agreements, other terms are contained in such agreements.
Copies of the Merger Agreement have been filed as an exhibit to the Schedule
14D-1 of which this Offer to Purchase is a part.
Dissenters' Rights. Holders of Shares do not have dissenters' rights as a
result of the Offer. Holders of Shares who do not vote in favor of the Merger
and all holders of Preferred Stock will have certain rights pursuant to the
provisions of Article 13 of the NCBCA to dissent and demand determination of,
and to receive payment in cash of the fair value of, their shares. If the
statutory procedures were complied with, such rights could lead to a judicial
determination of the fair value required to be paid in cash to such dissenting
holders for their shares. Any such judicial determination of the fair value of
the Shares or the market value of their shares could be more or less than the
Offer Price or the price provided for in the Merger Agreement. Section 55-13-01
of the NCBCA defines "fair value" as the value of the shares immediately before
the effectuation of the transaction to which the dissenter objects, excluding
any appreciation or depreciation in anticipation of the transaction unless such
exclusion would be inequitable. Such "fair value" of the Shares as finally
determined may be more or less than the consideration to be received by other
holders of the Shares under the terms of the Merger Agreement. Any holder of
Shares or Preferred Stock who asserts dissenters' rights under the NCBCA and
fails to comply with the statutory requirements as provided in the NCBCA, shall
be deemed to have withdrawn his dissent and demand for payment.
THE FOREGOING SUMMARY OF THE RIGHTS OF DISSENTING SHAREHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
SHAREHOLDERS DESIRING TO EXERCISE ANY AVAILABLE DISSENTERS' RIGHTS.
FAILURE TO FOLLOW THE STEPS REQUIRED BY THE NCBCA FOR PERFECTING
DISSENTERS' RIGHTS MAY RESULT IN THE LOSS OF SUCH RIGHTS.
Going Private Transactions. The Merger would have to comply with any
applicable Federal law operative at the time of its consummation. Rule 13e-3
under the Exchange Act is applicable to certain "going private" transactions.
The Purchaser does not believe that Rule 13e-3 will be applicable to the Merger
unless the Merger is consummated more than one year after the termination of the
Offer. If applicable, Rule 13e-3 would require, among other things, that certain
financial information concerning the Company and certain
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information relating to the fairness of the Merger and the consideration offered
to minority shareholders be filed with the Commission and disclosed to minority
shareholders prior to consummation of the Merger.
Amendment to Certain Severance Agreements. The Company and certain
executives, including Messrs. Scott and Hertwig, have entered into, as of July
8, 1995, certain amendments to the severance agreements between the Company and
such executives. The severance agreements generally provide for severance
payments to be made to an executive if his employment is terminated for certain
reasons following a change in control. The amendments provide that, during the
six (6) month period immediately following the first anniversary of the change
in control, the executive is entitled to receive his severance benefits if he
terminates his employment for any reason.
Plans for the Company. Parent conducted a due diligence review of the
Company (see Section 12) and generally intends to conduct a further detailed
review of the Company and its assets, corporate structure, capitalization,
operations, properties, policies, management and personnel. Parent expects to
consider, subject to the terms of the Merger Agreement, what, if any, changes
would be desirable in light of the circumstances then existing, and reserves the
right to take such actions or effect such changes as it deems desirable. Such
changes could include changes in the Company's business, corporate structure,
capitalization or management.
Upon consummation of the Offer, Purchaser intends to review the Company on
an in-depth basis with a view toward considering if any changes would be
desirable following receipt of the exemption from or approval by the ICC. In
addition, if temporary authority is granted by the ICC to Parent, subject to the
terms of such temporary authority and the Merger Agreement, Parent will be
entitled to operate the ICC Subsidiaries pending receipt of the exemption from
or approval by the ICC of Parent's acquisition of control of the ICC
Subsidiaries. Upon consummation of the Merger, Parent intends to continue to
review the businesses of the Company and identify potential synergies and cost
savings. Parent currently anticipates continuing losses at the Company in the
near term and believes that it must take appropriate action to halt such losses.
Upon Parent's receipt of the exemption from or approval by the ICC and in
accordance with the decision of the relevant change of operations committee
under its collective bargaining agreement, Parent currently plans to consolidate
the operations of Carolina Freight Carriers Corporation, a subsidiary of the
Company ("CFCC"), into ABF Freight System, Inc. ("ABF"), a subsidiary of Parent.
Parent regards the consolidation of CFCC into ABF as an opportunity to achieve
certain cost savings and synergies. Parent estimates that once implemented this
consolidation will result in $24 million annually of pre-tax cost savings from
increased efficiencies in equipment utilization and synergies achieved through
the consolidated operation. After CFCC's consolidation into ABF, Parent intends
to sell any excess assets. Parent estimates that cost savings and cash from
asset sales will be partly offset by differences in accounting methods and
CFCC's continuing losses prior to consolidation with ABF. The foregoing
estimates of cost savings and synergies are inherently subject to substantial
uncertainty and there can be no assurance that they will be achieved.
Except as otherwise described in this Offer to Purchase, neither Parent nor
the Purchaser has any present plans or proposals which relate to or would result
in an extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Company or any of its subsidiaries, a sale or
transfer of a material amount of assets of the Company or any of its
subsidiaries or any material change in the Company's capitalization, corporate
structure, business or the composition of the Board of Directors or management.
14. DIVIDENDS AND DISTRIBUTIONS.
Pursuant to the terms of the Merger Agreement, the Company is prohibited
from taking certain of the actions described in the two succeeding paragraphs,
and nothing herein shall constitute a waiver by the Purchaser or Parent of any
of its rights under the Merger Agreement or a limitation of remedies available
to the Purchaser or Parent for any breach of the Merger Agreement, including
termination thereof.
If on or after the date of the Merger Agreement, the Company should (i)
split, combine or otherwise change the Shares or its capitalization, (ii)
acquire currently outstanding Shares or otherwise cause a reduction in the
number of outstanding Shares or (iii) issue or sell additional Shares, shares of
any other class of capital stock, other voting securities or any securities
convertible into, or rights, warrants or options,
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conditional or otherwise, to acquire, any of the foregoing, other than Shares
issued pursuant to the exercise of outstanding employee stock options, then
subject to the provisions of Section 15 below, the Purchaser, in its sole
discretion, may make such adjustments as it deems appropriate in the Offer Price
and other terms of the Offer, including, without limitation, the number or type
of securities offered to be purchased.
If, on or after the date of the Merger Agreement, the Company should
declare or pay any cash dividend on the Shares or other distribution on the
Shares, or issue with respect to the Shares any additional Shares, shares of any
other class of capital stock, other voting securities or any securities
convertible into, or rights, warrants or options, conditional or otherwise, to
acquire, any of the foregoing, payable or distributable to shareholders of
record on a date prior to the transfer of the Shares purchased pursuant to the
Offer to the Purchaser or its nominee or transferee on the Company's stock
transfer records, then, subject to the provisions of Section 15 below, (i) the
Offer Price may, in the sole discretion of the Purchaser, be reduced by the
amount of any such cash dividend or cash distribution and (ii) the whole of any
such noncash dividend, distribution or issuance to be received by the tendering
shareholders will (A) be received and held by the tendering shareholders for the
account of the Purchaser and will be required to be promptly remitted and
transferred by each tendering shareholder to the Depositary for the account of
the Purchaser, accompanied by appropriate documentation of transfer, or (B) at
the direction of the Purchaser, be exercised for the benefit of the Purchaser,
in which case the proceeds of such exercise will promptly be remitted to the
Purchaser. Pending such remittance and subject to applicable law, the Purchaser
will be entitled to all rights and privileges as owner of any such noncash
dividend, distribution, issuance or proceeds and may withhold the entire Offer
Price or deduct from the Offer Price the amount or value thereof, as determined
by the Purchaser in its sole discretion.
15. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other term of the Offer or the Merger Agreement, the
Purchaser shall not be required to accept for payment or, subject to any
applicable rules and regulations of the Commission, including Rule 14e-1(c)
under the Exchange Act (relating to the Purchaser's obligation to pay for or
return tendered Shares after the termination or withdrawal of the Offer), to pay
for any Shares tendered pursuant to the Offer unless, (i) there shall have been
validly tendered and not withdrawn prior to the expiration of the Offer such
number of Shares which satisfy the Minimum Condition, (ii) any waiting period
under the HSR Act applicable to the purchase of Shares pursuant to the Offer
shall have expired or been terminated, (iii) Parent or the Purchaser shall have
received an informal, non-binding opinion of the staff of the ICC pursuant to 49
C.F.R. Part 1013, without imposing any conditions reasonably unacceptable to
Parent, that the Voting Trusts effectively insulate the settlor from any
violations of the ICC's policy against unauthorized acquisitions of control of a
regulated carrier and (iv) the ICC shall have granted Parent or the Purchaser
temporary authority pursuant to 49 U.S.C. sec. 11349 to operate the properties
of the Company pending receipt of the exemption from or approval by the ICC
without imposing any conditions reasonably unacceptable to Parent or the
Purchaser. Furthermore, notwithstanding any other term of the Offer or the
Merger Agreement, the Purchaser shall 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 terminate the Offer if, at any time on or after the date of
the Merger Agreement and before the acceptance of such Shares for payment or the
payment therefor, any of the following conditions exists (other than as a result
of any action or inaction of Parent or any of its subsidiaries which constitutes
a breach of the Merger Agreement):
(a) there shall be instituted or pending any suit, action or
proceeding (in the case of a suit, action or proceeding by a person other
than a Governmental Entity, such suit, action or proceeding having a
substantial likelihood of success or, in the case of a suit, action or
proceeding by a Governmental Entity, such suit, action or proceeding having
a reasonable likelihood of success), (i) challenging the acquisition by
Parent or the Purchaser of any Shares under the Offer, seeking to restrain
or prohibit the making or consummation of the Offer or the Merger, or
seeking to obtain from the Company, Parent or the Purchaser any damages
that are material in relation to the Company and its subsidiaries taken as
whole, (ii) seeking to prohibit or materially limit the ownership or
operation by the Company, Parent or any of their respective subsidiaries of
a material portion of the business or assets of the Company and its
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subsidiaries, taken as a whole, or Parent and its subsidiaries, taken as a
whole, or to compel the Company or Parent to dispose of or hold separate
any material portion of the business or assets of the Company and its
subsidiaries, taken as a whole, or Parent and its subsidiaries, taken as a
whole, as a result of the Offer or any of the other transactions
contemplated by the Merger Agreement, (iii) seeking to impose material
limitations on the ability of Parent or the Purchaser to acquire or hold,
or exercise full rights of ownership of, any Shares accepted for payment
pursuant to the Offer including, without limitation, the right to vote such
Shares on all matters properly presented to the shareholders of the Company
or (iv) seeking to prohibit Parent or any of its subsidiaries from
effectively controlling in any material respect the business or operations
of the Company and its subsidiaries, taken as a whole;
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable to
the Offer or the Merger, or any other action shall be taken by any
Governmental Entity or court that is reasonably likely to result, directly
or indirectly, in any of the consequences referred to in clauses (i)
through (iv) of paragraph (a) above;
(c) there shall have occurred any material adverse change (or any
development that, insofar as reasonably can be foreseen, is reasonably
likely to result in any material adverse change) in the business,
properties, assets, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole;
(d) (i) the Board of Directors of the Company or any committee thereof
shall have withdrawn or modified in a manner adverse to Parent or the
Purchaser its approval or recommendation of the Offer, the Merger or the
Merger Agreement, or approved or recommended any takeover proposal, (ii)
the Company shall have entered into any agreement with respect to any
competitive proposal in accordance with Section 5.2(b) of the Merger
Agreement or (iii) the Board of Directors of the Company or any committee
thereof shall have resolved to take any of the foregoing actions;
(e) any of the representations and warranties of the Company set forth
in the Merger Agreement that are qualified as to materiality shall not be
true and correct and any such representations and warranties that are not
so qualified shall not be true and correct in any material respect, in each
case at the date of the Merger Agreement and at the scheduled expiration of
the Offer;
(f) the Company shall have failed to perform in any material respect
any obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under the
Merger Agreement;
(g) there shall have occurred and be continuing (i) any general
suspension of trading in, or limitation on prices for, securities on the
NYSE, (ii) a decline in either the Dow Jones Average of Industrial Stocks
or Standard & Poor's 500 Index by an amount of at least 20% measured from
the close of business on the trading day next preceding the date of the
Merger Agreement, (iii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States, (iv) any
material limitation (whether or not mandatory) by any Governmental Entity
on, or other event that materially impairs, the extension of credit by
banks or other lending institutions or (v) in case of any of the foregoing
existing on the date of the Merger Agreement, material acceleration or
worsening thereof;
(h) Parent shall not have received sufficient funds pursuant to the
Commitment (or any alternative financing commitment obtained by Parent) to
consummate the Offer and the Merger and the transactions contemplated
thereby, provided that such failure to receive funds shall not have
resulted from the failure of Parent to use its reasonable efforts to
consummate the transactions contemplated by the Commitment;
(i) immediately prior to the acceptance for payment of any Shares by
the Purchaser, a sufficient number of directors shall have not resigned
from the Company's Board of Directors to enable the Purchaser to designate
directors to the Company's Board of Directors in accordance with Section
1.5 of the Merger Agreement;
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(j) any person, entity or "group" (as defined in Section 13(d)(3) of
the Exchange Act), other than Parent, the Purchaser or their affiliates or
any group of which any of them is a member, shall have acquired beneficial
ownership (determined pursuant to Rule 13d-3 promulgated under the Exchange
Act) of more than 30% of the outstanding Shares through the acquisition of
Shares, the formation of a group or otherwise; or
(k) the Merger Agreement shall have been terminated in accordance with
its terms.
The foregoing conditions are for the sole benefit of the Purchaser and
Parent and may, subject to the terms of the Merger Agreement, be waived by the
Purchaser and Parent in whole or in part at any time and from time to time in
their sole discretion. The failure by Parent or the Purchaser at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and
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 and from time to time.
16. CERTAIN LEGAL MATTERS; REQUIRED REGULATORY APPROVALS.
General. Based on a review of publicly available filings made by the
Company with the Commission and other publicly available information concerning
the Company and the review of certain information furnished by the Company to
Parent and discussions of representatives of Parent with representatives of the
Company during Parent's investigation of the Company, except as otherwise
described in this Offer to Purchase, neither the Purchaser nor Parent is aware
of any license or regulatory permit that appears to be material to the business
of the Company and its subsidiaries, taken as a whole, that might be adversely
affected by the Purchaser's acquisition of Shares as contemplated herein or of
any approval or other action by any Governmental Entity that would be required
for the acquisition or ownership of Shares by the Purchaser as contemplated
herein. Should any such approval or other action be required, the Purchaser and
Parent currently contemplate that such approval or other action will be sought,
except as described below under "State-Takeover Laws." While, except as
otherwise expressly described in this Section 16, the Purchaser does not
presently intend to delay the acceptance for payment of or payment for Shares
tendered pursuant to the Offer pending the outcome of any such matter, there can
be no assurance that any such approval or other action, if needed, would be
obtained or would be obtained without substantial conditions or that failure to
obtain any such approval or other action might not result in consequences
adverse to the Company's business or that certain parts of the Company's
business might not have to be disposed of if such approvals were not obtained or
such other actions were not taken or in order to obtain any such approval or
other action. If certain types of adverse action are taken with respect to the
matters discussed below, the Purchaser could decline to accept for payment or
pay for any Shares tendered. See Section 15 for certain conditions to the Offer.
ICC Matters: The Voting Trusts. The ICC Subsidiaries are comprised of six
corporations which engage in the interstate transportation of property, an
activity causing those subsidiaries, and acquisition of control of those
subsidiaries, to be subject to the jurisdiction of the ICC. Provisions of the
Interstate Commerce Act require approval of, or the granting of an exemption
from approval by, the ICC for the acquisition of control of two or more carriers
subject to the jurisdiction of the ICC ("Carriers") by a person that is not a
Carrier and for the acquisition or control of a Carrier by a person that is not
a Carrier but that controls any number of Carriers. ICC exemption or approval is
required for Purchaser to acquire control of the ICC Subsidiaries. The exemption
from or approval by the ICC of the acquisition by Parent or Purchaser of the
Company or its ICC Subsidiaries is not a condition of the Offer.
To ensure that the Purchaser does not acquire and directly or indirectly
exercise control over the ICC Subsidiaries in violation of the requirements of
the Interstate Commerce Act, the Purchaser intends to cause the Company, and the
Company has agreed in the Merger Agreement, to deposit the shares of its ICC
Subsidiaries in the Voting Trusts promptly upon Purchaser's acquisition of
Shares pursuant to the Offer. The Offer is conditioned upon the issuance by the
staff of the ICC of an informal, non-binding opinion, without the imposition of
any conditions reasonably unacceptable to the Purchaser, that the use of the
Voting Trusts in this transaction is consistent with the policies of the ICC
against unauthorized acquisitions of control of a
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regulated carrier. Parent and the Purchaser have requested the staff of the ICC
to issue such an opinion. Pursuant to ICC regulations, the ICC staff has the
power to issue such opinions. Generally, the ICC staff has issued such opinions
within one or two weeks of a request, although there can be no assurance that
Parent and the Purchaser will be able to obtain an opinion this quickly.
Pursuant to the terms of the form of Voting Trust Agreements, it is
expected that the Trustees would hold the shares of the ICC Subsidiaries until
(i) the effective date of the ICC's approval or exemption from approval of
Parent's and Purchaser's acquisition of control of the ICC Subsidiaries, (ii)
the shares of the ICC Subsidiaries are sold to a third party or otherwise
disposed of, or (iii) the Voting Trusts are otherwise terminated. The Voting
Trust Agreements are expected to provide that the Trustees will have the sole
power to vote such shares of the ICC Subsidiaries. In addition, it is expected
that the Voting Trust Agreements will provide that the Company or its successor
in interest will be entitled to receive any cash dividends paid by the ICC
Subsidiaries.
ICC Matters; Notice of Exemption. The ICC has provided by regulation that
it will exempt from the requirement for its prior approval all acquisitions of
control involving only motor carriers of property subject to the ICC's
jurisdiction unless it determines that such an exemption is not warranted
because of issues regarding competition, impact on employees or the safety
ratings of the parties. The ICC regulations require parties to such acquisitions
to file a notice of exemption with the ICC, and they provide that the exemption
from approval will automatically become effective 60 days after the ICC
publishes the notice of exemption in the ICC Register unless complaints
concerning the notice of exemption are filed. The regulations further provide
that the ICC will generally decide any complaints within 30 days after receiving
them; such decisions may deny the complaint and permit the exemption to become
effective or may prevent the exemption from becoming effective.
Parent, the Purchaser and Company filed with the ICC a notice of exemption
(the "Notice of Exemption") on July 10, 1995 to permit Parent and Purchaser to
acquire control of the ICC Subsidiaries. The ICC generally publishes such
notices in the ICC Register three to four weeks after they are filed, although
there can be no assurance that the Notice of Exemption will be published that
quickly. Parent and Purchaser expect that the Notice of Exemption will become
effective 60 days after it is published.
ICC Matters; Temporary Authority. Pending receipt of the exemption from or
approval by the ICC, a provision of the Interstate Commerce Act authorizes the
ICC to permit Parent temporarily to operate through management the properties of
the ICC Subsidiaries if the ICC concludes that failure to grant such temporary
operating authority may result in injury to those properties or substantially
interfere with their future usefulness in providing adequate and continuous
service to the public. Parent has applied for such temporary authority to permit
Parent to operate the properties of the ICC Subsidiaries pending the
effectiveness of the Notice of Exemption. Purchaser's obligations under the
Offer are conditioned upon the ICC's granting of such temporary authority.
State Takeover Laws. A number of states throughout the United States have
enacted takeover statutes that purport, in varying degrees, to be applicable to
attempts to acquire securities of corporations that are incorporated or have
assets, shareholders, executive offices or places of business in such states. In
Edgar v. MITE Corp., the Supreme Court of the United States held that the
Illinois Business Takeover Act, which involved state securities laws that made
the takeover of certain corporations more difficult, imposed a substantial
burden on interstate commerce and therefore was unconstitutional. In 1987,
however, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court of the
United States held that a state may, as a matter of corporate law and, in
particular, those laws concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without prior approval of the remaining shareholders, 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 apply to
corporations incorporated outside Oklahoma in that they would subject such
corporations to inconsistent regulations. Similarly, in Tyson Foods, Inc. v.
McReynolds, a Federal District court in Tennessee ruled that four Tennessee
takeover statutes were unconstitutional as applied to corporations incorporated
outside Tennessee. This decision was affirmed by the
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United States Court of Appeals for the Sixth Circuit. In December 1988, a
Federal district court in Florida held, in Grand Metropolitan PLC v.
Butterworth, that the provisions of the Florida Affiliated Transactions Act and
Florida Control Share Acquisition Act were unconstitutional as applied to
corporations incorporated outside of Florida.
The North Carolina Tender Offer Disclosure Act (the "TODA") applies to
tender offers for equity securities of a company that has its principal place of
business and substantial assets in North Carolina. The TODA requires Purchaser
to file a statement with the North Carolina Secretary of State relating to the
Offer and contains prohibitions against deceptive practices in connection with
making a tender offer. In Eure v. Grand Metropolitan Limited, the North Carolina
Superior Court held that the TODA's 30-day waiting period prior to the
commencement of a tender offer is unenforceable and preempted by the Exchange
Act. Consequently, Purchaser has filed concurrently with the Commission and the
North Carolina Secretary of State a Tender Offer Statement on Schedule 14D-1,
together with all exhibits thereto, pursuant to Rule 14d-3 of the General Rules
and Regulations under the Exchange Act, and Section 78B-4 of the TODA.
Section 55-9-01 et seq. of the NCBCA purports to regulate certain business
combinations of certain public corporations organized under North Carolina law,
such as the Company, with a shareholder beneficially owning 20% or more of the
voting stock of such corporation after the date the relevant person or entity
first becomes a 20% shareholder. Section 55-9-02 provides that the corporation
shall not engage at any time in any business combination with such a shareholder
without approval of the holders of 95% of the outstanding shares (other than the
shares owned by the 20% shareholder), with certain exceptions. As permitted
under North Carolina law, the Company's Amended and Restated By-Laws provide
that the provisions of Section 55-9-01 et seq. shall not apply to the Company
and therefore, Section 55-9-02 of the NCBCA is inapplicable to the Merger.
Section 55-9A-01 et seq. of the NCBCA provides that an acquiror that
acquires control shares of certain public North Carolina corporations may not
vote such shares without the approval of a majority of the outstanding shares
entitled to vote in the election of directors that are not owned by the
acquiror, subject to certain exceptions. As permitted under North Carolina law,
the Company's Amended and Restated By-Laws provide that the provisions of
Section 55-9A-01 et seq. shall not apply to the Company and, therefore, Section
55-9A-05 of the NCBCA is inapplicable to such acquisitions.
Based on information supplied by the Company, the Purchaser does not
believe that any other state takeover statutes purport to apply to the Offer.
Neither the Purchaser nor Parent has currently complied with any state takeover
statute or regulation. The Purchaser reserves the right to challenge the
applicability or validity of any state law purportedly applicable to the Offer
or the Merger and nothing in this Offer to Purchase or any action taken in
connection with the Offer or the Merger is intended as a waiver of such right.
If it is asserted that any state takeover statute is applicable to the Offer and
an appropriate court does not determine that it is inapplicable or invalid as
applied to the Offer, the Purchaser might be required to file certain
information with, or to receive approvals from, the relevant state authorities,
and the Purchaser might be unable to accept for payment or pay for Shares
tendered pursuant to the Offer, or be delayed in consummating the Offer or the
Merger. In such case, the Purchaser may not be obliged to accept payment or pay
for any Shares tendered pursuant to the Offer.
Antitrust. The jurisdiction of the ICC is exclusive with respect to the ICC
Subsidiaries. If the ICC exempts or approves the acquisition of control of the
ICC Subsidiaries, such transaction is exempt from the antitrust laws.
Certain of the Company's subsidiaries are not ICC regulated carriers.
Because the fair market value of the allocable portion of the purchase price for
the Shares attributable to the Company's non-ICC regulated subsidiaries is less
than $15 million and the sales and assets of these subsidiaries are less than
$25 million, the transaction is not subject to the HSR Act. Nevertheless, the
Federal Trade Commission (the "FTC") and the Antitrust Division of the
Department of Justice (the "Antitrust Division") may scrutinize the legality
under antitrust laws of the acquisition of the Company's non-ICC regulated
subsidiaries.
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At any time before or after the Purchaser's purchase of Shares pursuant to
the Offer, the Antitrust Division or FTC 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 acquired by the Purchaser or the divestiture
of substantial assets of Parent or its subsidiaries, or the Company or its
subsidiaries. Private parties may also bring legal action under the antitrust
laws under certain circumstances. There can be no assurance that a challenge to
the Offer on antitrust grounds will not be made or, if such a challenge is made,
of the results thereof.
17. CERTAIN FEES AND EXPENSES.
Except as set forth below, the Purchaser will not pay any fees or
commissions to any broker, dealer or another person for soliciting tender of
Shares pursuant to the Offer.
Morgan Stanley is acting as Dealer Manager in connection with the Offer and
has provided certain financial advisory services to Parent in connection with
the Offer and the Merger. Parent has agreed to pay Morgan Stanley (i) an
advisory fee of up to $200,000, (ii) a commencement fee of $500,000 (against
which the advisory fee will be credited), each of which is currently payable,
(iii) a fee of $1,350,000 which is payable when the acquisition of the Company
by Parent is concluded (against which the advisory fee and the commencement fee
will be credited) and (iv) reimbursement of certain out-of-pocket expenses. Such
an acquisition would be considered concluded for this purpose upon any
transaction resulting in Parent's ownership of more than 50% of the Shares. In
addition, Parent has agreed to indemnify Morgan Stanley against certain
liabilities and expenses, including certain liabilities under the Federal
securities laws.
The Purchaser has retained MacKenzie Partners, Inc. to act as the
Information Agent and First Union National Bank of North Carolina to serve as
the Depositary in connection with the Offer. The Information Agent and the
Depositary each will receive reasonable and customary compensation for their
services, be reimbursed for certain reasonable out-of-pocket expenses and be
indemnified against certain liabilities and expenses in connection therewith,
including certain liabilities under the Federal securities laws.
Neither the Purchaser nor Parent will pay any fees or commissions to any
broker or dealer or other person (other than the Dealer Manager and the
Information Agent) in connection with the solicitation of tenders of Shares
pursuant to the Offer. Brokers, dealers, banks and trust companies will be
reimbursed by the Purchaser upon request for customary mailing and handling
expenses incurred by them in forwarding material to their customers.
18. MISCELLANEOUS.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. Neither the Purchaser nor Parent is aware of any jurisdiction in
which the making of the Offer or the tender of Shares in connection therewith
would not be in compliance with the laws of such jurisdiction. To the extent the
Purchaser or Parent becomes aware of any state law that would limit the class of
offerees in the Offer, the Purchaser will amend the Offer and, depending on the
timing of such amendment, if any, will extend the Offer to provide adequate
dissemination of such information to holders of Shares prior to the expiration
of the Offer. In any jurisdiction the securities, blue sky or other laws of
which require the Offer to be made by a licensed broker or dealer, the Offer is
being made on behalf of the Purchaser by the Dealer Managers or one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR 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.
36
<PAGE> 37
The Purchaser or Parent has filed with the Commission the Schedule 14D-1
pursuant to Rule 14d-3 under the Exchange Act, furnishing certain additional
information with respect to the Offer. In addition, the Company has filed with
the Commission the Schedule 14D-9 pursuant to Rule 14d-9 under the Exchange Act,
setting forth its recommendation with respect to the Offer and the reasons for
such recommendation and furnishing certain additional related information. Such
Schedules and any amendments thereto, including exhibits, should be available
for inspection and copies should be obtainable in the manner set forth in
Sections 9 and 10 (except that they will not be available at the regional
offices of the Commission).
ABC ACQUISITION CORPORATION
July 14, 1995
37
<PAGE> 38
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The name, business address,
present principal occupation or employment and five-year employment history of
each of the directors and executive officers of Parent are set forth below.
Unless otherwise indicated below, the business address of each such director and
each such executive officer is 3801 Old Greenwood Road, Fort Smith, Arkansas
72903. Unless otherwise indicated below, each occupation set forth opposite an
individual's name refers to employment with Parent. All such directors and
executive officers listed below are citizens of the United States.
<TABLE>
<CAPTION>
POSITION WITH PARENT; PRINCIPAL OCCUPATION
NAME AND BUSINESS ADDRESS OR 5-YEAR EMPLOYMENT HISTORY
- ----------------------------------- --------------------------------------------------------
<S> <C>
Richard F. Cooper.................. Mr. Cooper has been Vice President -- Administration of
the Parent since May 1995, Vice President -- Risk
Management since April 1991, and Vice
President -- General Counsel since 1986. Mr. Cooper has
been Secretary since 1987. Mr. Cooper has also been
Secretary of Treadco, Inc. since June 1991.
Frank Edelstein.................... Mr. Edelstein is a Class III Director whose term expires
May 1998. He has been a director since November 1988. He
is also a consultant for Kelso & Company, Inc. and The
Gordon + Morris Group, and served as a Vice President of
Kelso & Co. from 1986 to March 1992. Prior to 1986, Mr.
Edelstein served as Chairman and President of
International Central Bank & Trust Company and CPI
Pension Services, Inc., as well as Senior Vice
President, Financial Services Group, for the Continental
Insurance Corporation, Executive Vice President of
Automatic Data Processing, Inc., and Executive Vice
President of Olivetti Corp. of America. Mr. Edelstein is
currently a Director of Americold Corp., Ceradyne, Inc.,
IHOP Corp., and DMI, Inc.
Arthur J. Fritz, Jr. .............. Mr. Fritz is a Class II Director whose term expires in
May 1997. He has been a director since April 1989. From
1971 to 1986, Mr. Fritz was President of Fritz
Companies, Inc. and its Chairman from 1986 to 1988. Mr.
Fritz has served as Chairman of JABAR Enterprises since
October 1988 and is a Director of Intercargo Corporation
and Landstar Systems, Inc. Mr. Fritz is former Presi-
dent and Chairman of the National Association of Customs
Brokers and Freight Forwarders of America.
William A. Marquard................ Mr. Marquard is a Class I Director whose term expires in
May 1996. He has been Chairman of the Board and a
director since 1988, and has been a director of Treadco,
Inc. since June 1991. In April 1992, Mr. Marquard was
elected as a Director and Vice Chairman of the Board of
Kelso & Company, Inc. From 1971 to 1983, Mr. Marquard
was President and Chief Executive Officer of American
Standard, Inc. and from 1979 to 1985, he was Chairman of
the Board of American Standard, Inc. Mr. Marquard
resumed his position as Chairman of the Board of
American Standard, Inc. on February 1989 until March 31,
1992 when he was named Chairman Emeritus. Mr. Marquard
also became Chairman of the Board of ASI Holding
Corporation in February 1989 until March 31, 1992, when
he was named Chairman Emeritus. Mr. Marquard is a
Director of Mosler, Inc., Americold Corporation, Earle
M. Jorgensen Co., and EarthShell Container Corporation.
</TABLE>
38
<PAGE> 39
<TABLE>
<CAPTION>
POSITION WITH PARENT; PRINCIPAL OCCUPATION
NAME AND BUSINESS ADDRESS OR 5-YEAR EMPLOYMENT HISTORY
- ----------------------------------- --------------------------------------------------------
<S> <C>
John R. Meyers..................... Mr. Meyers has been Vice President -- Treasurer of the
Parent since 1979. Mr. Meyers also has been Treasurer of
Treadco, Inc. since June 1991.
John H. Morris..................... Mr. Morris is a Class II Director whose term expires in
May 1997. He has been a director since July 1988 and a
director of Treadco, Inc. since June 1991. Mr. Morris
currently serves as President of the Gordon + Morris
Group. Mr. Morris also served as a Managing Director of
Kelso & Company, Inc. from March 1989 to March 1992, was
a General Partner from 1987 to March, 1989, and prior to
1987 was a Vice President of LBO Capital Corp.
Donald L. Neal..................... Mr. Neal has been Senior Vice President of the Parent
since 1979 and Chief Financial Officer since 1984. Prior
to 1984, Mr. Neal was Senior Vice
President -- Comptroller. Mr. Neal has been Vice
President -- Chief Financial Officer of Treadco, Inc.
since June 1991.
R. David Slack..................... Mr. Slack has been Vice President -- Comptroller of the
Parent since January 1990. From January 1989 to January
1990, Mr. Slack was Comptroller. Prior to November 1990,
Mr. Slack was a director in the Accounting Department.
Robert A. Young III................ Mr. Young is a Class III Director whose term expires May
1998. He has been a director since 1970. He has also
been the Chief Executive Officer of Parent since August,
1988, President of Parent since 1973, and was Chief
Operating Officer from 1973 to 1988. Mr. Young has been
the Chief Executive Officer and a director of Treadco,
Inc. since June 1991. He is also a director of Mosler,
Inc.
Alan J. Zakon, Ph.D. .............. Dr. Zakon is a Class I Director whose term expires in
May 1996. He has been a director since February 1993.
Dr. Zakon was a Managing Director of Bankers Trust
Company through March 1995, for which he previously
served as Chairman, Strategic Policy Committee from 1989
to 1990. From 1980 to 1986, Dr. Zakon was President of
Boston Consulting Group before being named its Chairman
in 1986, having previously served as Consultant from
1967 to 1969 and Vice President from 1969 to 1980. Dr.
Zakon is currently serving as a member of the Board of
Directors of several companies, including Augat
Corporation, Autotote Corporation, Hechinger
Corporation, and Laurentian Capital Corporation, and is
a former member of the Advisory Committee to the
Stanford University Graduate School of Business.
</TABLE>
39
<PAGE> 40
2. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The name, business
address, present principal occupation or employment and five-year employment
history of the sole director and each of the executive officers of the Purchaser
are set forth below. The business address of each such director and executive
officer is ABC Acquisition Corporation, c/o Arkansas Best Corporation, 3801 Old
Greenwood Road, Fort Smith, Arkansas 72903. Unless otherwise indicated below,
each occupation set forth opposite an individual's name refers to employment
with the Purchaser. The sole director and all such executive officers listed
below are citizens of the United States.
<TABLE>
<CAPTION>
POSITION WITH THE PURCHASER;
PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND BUSINESS ADDRESS 5-YEAR EMPLOYMENT HISTORY
----------------------------------- ----------------------------------------------
<S> <C>
SOLE DIRECTOR OF THE PURCHASER
Richard F. Cooper Vice President -- Secretary. (For further
information see paragraph 1 above.)
EXECUTIVE OFFICERS OF THE PURCHASER
Robert A. Young III President -- Chief Executive Officer. (For
further information see paragraph 1 above.)
Richard F. Cooper Vice President -- Secretary. (For further
information see paragraph 1 above.)
Donald L. Neal Senior Vice President -- Chief Financial
Officer. (For further information see
paragraph 1 above.)
John R. Meyers Vice President -- Treasurer. (For further
information see paragraph 1 above.)
</TABLE>
40
<PAGE> 41
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by each shareholder of the
Company or such shareholder's broker, dealer, commercial bank, trust company or
other nominee to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
<TABLE>
<S> <C> <C>
By Hand/Overnight Courier: By Mail: Facsimile Transmission:
(for Eligible Institutions only):
First Union National Bank First Union National Bank 704-374-6114
of North Carolina of North Carolina
Corporate Trust Operations Corporate Trust Operations
Attention: Corporate Action Attention: Corporate Action
Unit Unit
230 South Tryon Street, 2 First Union Center
11th Floor Charlotte, North Carolina
Charlotte, North Carolina 28202-1153
28228-1153
</TABLE>
Confirm Receipt of Notice of Guaranteed Delivery by Telephone:
1-800-829-8432
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may be directed to the Information Agent or the Dealer Manager at their
respective telephone numbers and locations listed below. You may also contact
your broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the Offer.
The Information Agent for the Offer is:
MACKENZIE PARTNERS, INC.
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
or
Call Toll-Free (800) 322-2885
The Dealer Manager for the Offer is:
MORGAN STANLEY & CO.
Incorporated
1251 Avenue of the Americas
New York, New York 10020
(212) 703-7186
41
<PAGE> 1
Letter of Transmittal
To Tender Shares of Common Stock
of
WorldWay Corporation
Pursuant to the Offer to Purchase
dated July 14, 1995
by
ABC Acquisition Corporation
a wholly owned subsidiary
of
Arkansas Best Corporation
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON THURSDAY, AUGUST 10, 1995, UNLESS EXTENDED.
- -------------------------------------------------------------------------------
The Depositary for the Offer is:
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
<TABLE>
<S> <C>
By Mail: By Facsimile Transmission:
First Union National Bank of North Carolina 704-374-6114
Corporate Trust Operations
Attention: Corporate Action Unit
2 First Union Center
Charlotte, North Carolina 28202-1153
By Hand: By Overnight Courier:
First Union National Bank of North Carolina First Union National Bank of North Carolina
Corporate Trust Operations Corporate Trust Operations
Attention: Corporate Action Unit Attention: Corporate Action Unit
230 South Tryon Street, 11th Floor 230 South Tryon Street, 11th Floor
Charlotte, North Carolina 28202-1153 Charlotte, North Carolina 28202-1153
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A
NUMBER 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 shareholders either if
certificates for Shares (as defined in the Offer to Purchase dated July 14, 1995
(the "Offer to Purchase")) 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 to an account maintained by First Union
National Bank of North Carolina (the "Depositary") at The Depository Trust
Company (a "Book-Entry Transfer Facility"), pursuant to the procedures set forth
in Section 2 of the Offer to Purchase. Shareholders who tender Shares by
book-entry transfer are referred to herein as "Book-Entry Shareholders."
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 on or 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 2 of
the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY
TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<PAGE> 2
NOTE: SIGNATURES MUST BE PROVIDED ON THE INSIDE AND REVERSE BACK COVER. PLEASE
READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
/ / CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
--------------------------------------------
Name of Book-Entry Transfer Facility:
/ / The Depository Trust Company (DTC)
Account Number:
-----------------------------------------------------------
Transaction Code Number:
--------------------------------------------------
/ / CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING. PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED
DELIVERY.
Name(s) of Registered Holder(s):
------------------------------------------
Window Ticket Number (if any):
--------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
-----------------------
Name of Institution which Guaranteed Delivery:
----------------------------
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------------------
SHARE CERTIFICATE(S) AND
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARE(S) TENDERED
(PLEASE FILL IN, IF BLANK, EXACTLY AS (ATTACH ADDITIONAL LIST,
NAME(S) APPEAR(S) ON SHARE CERTIFICATE(S)) IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF
SHARES
REPRESENTED NUMBER
SHARE CERTIFICATE BY SHARE OF SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
TOTAL SHARES
- -----------------------------------------------------------------------------------------------------------------------------
* Need not be completed by Book-Entry Shareholders.
** Unless otherwise indicated it will be assumed that all Shares
represented by Share Certificates delivered to the Depositary are being
tendered. See Instruction 4.
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 3
Ladies and Gentlemen:
The undersigned hereby tenders to ABC Acquisition Corporation (the
"Purchaser"), a North Carolina corporation and a wholly owned subsidiary of
Arkansas Best Corporation, a Delaware corporation ("Parent"), the above
described shares of Common Stock, par value $0.50 per share (the "Shares"), of
WorldWay Corporation, a North Carolina corporation (the "Company"), pursuant to
the Purchaser's offer to purchase all outstanding Shares at a price of $11.00
per Share, net to the seller in cash, without interest thereon, upon the terms
and subject to the conditions set forth in the Offer to Purchase, receipt of
which is hereby acknowledged, and in this Letter of Transmittal (which together
with the Offer to Purchase 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 subsidiaries or affiliates the right
to purchase all or any portion of the Shares tendered pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions 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 dividends on
the Shares (including, without limitation, the issuance of additional Shares
pursuant to a stock dividend or stock split, the issuance of other securities or
the issuance of rights for the purchase of any securities, payable on the
Company's customary dividend payment dates) with respect to the Shares that are
declared or paid by the Company on or after the date of the Offer to Purchase
and are payable or distributable to shareholders of record on a date prior to
the transfer into the name of the Purchaser or its nominees or transferees on
the Company's stock transfer records of the Shares purchased pursuant to the
Offer (collectively "Distributions"), and constitutes and irrevocably appoints
the Depositary the true and lawful agent, attorney-in-fact and proxy of the
undersigned to the full extent of the undersigned's rights with respect to such
Shares (and Distributions) with full power of substitution (such power of
attorney and proxy being deemed to be an irrevocable power coupled with an
interest), to (a) deliver Share Certificates (and Distributions), or transfer
ownership of such Shares on the account books maintained by the Book-Entry
Transfer Facilities, together in either such case with all accompanying
evidences of transfer and authenticity, to or upon the order of the Purchaser
upon receipt by the Depositary, as the undersigned's agent, of the purchase
price, (b) present such Shares (and Distributions) 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 Distributions), all in accordance with
the terms of the Offer.
Subject to and on the terms and conditions set forth in this paragraph, the
undersigned hereby irrevocably appoints Robert A. Young III and Donald L. Neal,
and each of them, the attorneys-in-fact and proxies of the undersigned, each
with full power of substitution, to vote in such manner as each such attorney
and proxy or his or her substitute shall, in his or her sole discretion, deem
proper, and otherwise act (including pursuant to written consent) with respect
to all of the Shares tendered hereby which have been accepted for payment by the
Purchaser prior to the time of such vote or action which the undersigned is
entitled to vote at any meeting of shareholders of the Company (whether annual
or special and whether or not an adjourned meeting), including, by way of
illustration and not limitation, any meeting at which the Merger (as defined in
the Offer) is submitted for approval by shareholders of the Company or by
written consent in lieu of such meeting, or otherwise. This power of attorney
and proxy is coupled with an interest in the Company and in the Shares and is
irrevocable and is granted in consideration of, and is effective upon, the
acceptance for payment of such Shares by the Purchaser in accordance with the
terms of the Offer. Such acceptance for payment shall revoke, without further
action, any other power of attorney or proxy granted by the undersigned at any
time with respect to such Shares (and Distributions) and no subsequent powers of
attorney or proxies will be given (and if given will be deemed not to be
effective) with respect thereto by the undersigned. The undersigned understands
that the Purchaser reserves the right to require that, in order for Shares to be
deemed validly tendered, immediately upon the Purchaser's acceptance for payment
of such Shares, the Purchaser is able to exercise full voting rights with
respect to such Shares and other securities, including voting at any meeting of
shareholders.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby (and Distributions) and that when the same are accepted for
payment by the Purchaser, the Purchaser will acquire good, marketable and
unencumbered title thereto and all voting entitlements of such Shares, free and
clear of all liens, restrictions, charges, and irrevocable proxies (except as
granted herein) 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. In
addition, the undersigned shall promptly remit and transfer to the Depositary
for the account of the Purchaser any and all other Distributions in respect of
the Shares tendered hereby, accompanied by appropriate documentation of transfer
and, pending such remittance or appropriate assurance thereof, the Purchaser
shall be entitled to all rights and privileges as owner of such Distributions
and may
<PAGE> 4
withhold the entire purchase price or deduct from the purchase price of Shares
tendered hereby the amount or value thereof, as determined by the Purchaser in
its sole discretion.
All authority herein conferred or herein 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,
executors, administrators, legal representatives, successors and assigns of the
undersigned. Tenders of Shares 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
pursuant to the Offer, may also be withdrawn at any time after September 11,
1995. See Section 3 of the Offer to Purchase.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 2 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any Share
Certificates not tendered or accepted for payment in the name(s) of the
undersigned. Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the purchase price and/or return any
Share Certificate not tendered or accepted for payment (and accompanying
documents as appropriate) to the undersigned at the address shown below the
undersigned's signature. 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 return any Share Certificates not
tendered or accepted for payment in the name(s) of, and deliver said check
and/or return certificates to, the person or persons so indicated. Shareholders
tendering Shares by book-entry transfer may request that any Shares not accepted
for payment be returned by crediting such account maintained at such Book-Entry
Transfer Facility as such stockholder may designate by making an appropriate
entry under "Special Payment Instructions." The undersigned recognizes that the
Purchaser has no obligation pursuant to the "Special Payment Instructions" to
transfer any Shares from the name of the registered holder thereof if the
Purchaser does not accept for payment any of such Shares.
<PAGE> 5
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share Certificates not tendered or not purchased
and/or the check for the purchase price of Shares purchased are to be issued in
the name of someone other than the undersigned, or if Shares tendered by
book-entry transfer which are not purchased are to be returned by credit to an
account maintained at a Book-Entry Transfer Facility other than that designated
on the front cover.
Issue check and/or certificates to:
Name: ..........................................................................
(Please Print)
Address: .......................................................................
................................................................................
................................................................................
(Include Zip Code)
................................................................................
(Tax Identification or Social Security No.)
(See Substitute Form W-9)
Credit unpurchased Shares tendered by book-entry transfer to the Book-Entry
Transfer Facility account set forth below:
/ / The Depository Trust Company
................................................................................
(Account Number)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share Certificates not tendered or not purchased
and/or the check for the purchase price of Shares purchased are to be sent to
someone other than the undersigned, or to the undersigned at an address other
than that shown on the front cover.
Mail check and/or certificates to:
Name: ..........................................................................
(Please Print)
Address: .......................................................................
................................................................................
................................................................................
(Include Zip Code)
................................................................................
(Tax Identification or Social Security No.)
<PAGE> 6
TENDER OF DIVIDEND REINVESTMENT
PLAN SHARES
(SEE INSTRUCTION 11)
To be completed ONLY if the undersigned intends to tender all or a portion
of Shares by him or her in the Company's Dividend Reinvestment Plan.
(check one)
/ / ALL SHARES
/ / ------------------ SHARES
[Number]
IMPORTANT -- SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9)
................................................................................
................................................................................
Signature(s) of Owner(s)
Dated:..........................................................................
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
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 necessary information.
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.:............................................................
(See Substitute Form W-9)
GUARANTEE OF SIGNATURES
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
Authorized Signature:...........................................................
Name (Please print):............................................................
Name of Firm:...................................................................
Address:........................................................................
................................................................................
(Include Zip Code)
Area Code and Telephone Number:.................................................
Dated:......, 199
<PAGE> 7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures.
No signature guarantee on this Letter of Transmittal is required (i) if
this Letter of Transmittal is signed by the registered holder(s) (which term,
for purposes of this document, shall include any participant in a Book-Entry
Transfer Facility whose name appears on a security position listing as the owner
of Shares) of the Shares tendered herewith, unless such holder(s) has completed
either the box entitled "Special Payment Instructions" or the box entitled
"Special Delivery Instructions" on the inside front cover hereof or (ii) if such
Shares are tendered for the account of a firm that is a bank, broker, dealer,
credit union, savings association or other entity which is a member in good
standing of the Securities Transfer Association Medallion Signature Guarantee
Program (an "Eligible Institution"). In all other cases, all signatures on this
Letter of Transmittal must be guaranteed by an Eligible Institution. See
Instruction 5.
2. Delivery of Letter of Transmittal and Certificates.
This Letter of Transmittal is to be used either if Share Certificates are
to be forwarded herewith or, unless an Agent's Message is utilized, if tenders
are to be made pursuant to the procedures for tender by book-entry transfer set
forth in Section 2 of the Offer to Purchase. Share Certificates, or timely
confirmation of a book-entry transfer (a "Book-Entry Confirmation") of such
Shares into the Depositary's account at a 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
the case of a book-entry delivery, and any other documents required by this
Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth herein prior to the Expiration Date. Shareholders 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 procedures 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 procedures set forth in Section 2 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 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 a properly completed and duly
executed Letter of Transmittal (or a facsimile hereof), with any required
signature guarantees (or in the case of a book-entry delivery an Agent's
Message) and any other documents required by this Letter of Transmittal, must be
received by the Depositary within five New York Stock Exchange, Inc. ("NYSE")
trading days after the date of execution of such Notice of Guaranteed Delivery.
If Share Certificates are forwarded separately to the Depositary, a properly
completed and duly executed Letter of Transmittal (or facsimile hereof) must
accompany each such delivery.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THIS LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
SHAREHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY
THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering shareholders, by execution of
this Letter of Transmittal or 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 schedule attached hereto and separately signed on each page thereof in
the same manner as this Letter of Transmittal is signed.
4. Partial Tenders (Not Applicable to Shareholders who Tender by Book-Entry
Transfer).
If fewer than all the Shares evidenced by any 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 case, new certificate(s) for the
<PAGE> 8
remainder of the Shares that were evidenced by your old certificate(s) will be
sent to you, unless otherwise provided in the appropriate box marked "Special
Payment Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal, as soon as practicable after the Expiration Date. All Shares
represented by certificates delivered to the Depositary will be deemed to have
been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal, Stock Powers and Endorsements.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, the signature(s) must correspond exactly 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 or more
joint owners, all such owners must sign this Letter of Transmittal.
If any 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, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Purchaser of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(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 purchased are to be issued in the name
of a person other than the registered owner(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 owner(s) of the Shares listed, the certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered owner(s) appear(s) on the certificates.
Signatures on such certificates or stock powers must be guaranteed by an
Eligible Institution.
6. Stock Transfer Taxes.
Except as set forth in this Instruction 6, the Purchaser will pay or cause
to be paid any stock transfer taxes with respect to the transfer and sale of
purchased Shares to it or its order pursuant to the Offer. If, however, payment
of the purchase price is to be made to, or if certificates for Shares not
tendered or purchased are to be registered in the name of, any person other than
the registered holder(s), or if tendered certificates are registered in the name
of any person other than the person(s) signing this Letter of Transmittal, the
amount of any stock transfer taxes (whether imposed on the registered holder(s)
or such person) payable on account of the transfer to such person will be
deducted from the purchase price received by such holder(s) pursuant to this
Offer (i.e., such purchase price will be reduced) unless satisfactory evidence
of the payment of such taxes or exemption therefrom is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. Special Payment and Delivery Instructions.
If (i) a check is to be issued in the name of and/or (ii) certificates for
unpurchased Shares are to be returned to a person other than the signer of this
Letter of Transmittal or if a check is to be sent and/or such certificates are
to be returned to someone other than the signer of this Letter of Transmittal or
to an address other than that shown on the front cover hereof, the appropriate
boxes on this Letter of Transmittal should be completed. Shareholders tendering
Shares by book-entry transfer (i.e., Book-Entry Shareholders) may request that
Shares not purchased be credited to such account maintained at such Book-Entry
Transfer Facility as such Book-Entry Shareholder may designate hereon. If no
such instructions are given, such Shares not purchased will be returned by
crediting the account at the Book-Entry Transfer Facility designated above. See
Instruction 1.
<PAGE> 9
8. Requests for Assistance or Additional Copies.
Requests for assistance may be directed to the Information Agent at its
addresses set forth below. Requests for additional copies of the Offer to
Purchase and this Letter of Transmittal may be directed to the Information Agent
or to brokers, dealers, commercial banks or trust companies.
9. 31% Backup Withholding: Substitute Form W-9.
Under U.S. Federal income tax law, a shareholder whose tendered Shares are
accepted for payment is required to provide the Depositary with such
shareholder'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 shareholder or other payee to a $50 penalty. In
addition, payments that are made to such shareholder or other payee with respect
to Shares purchased pursuant to the Offer may be subject to 31% backup
withholding.
Certain shareholders (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 shareholder 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 shareholder 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.
To prevent backup withholding on payments that are made to a shareholder
with respect to Shares purchased pursuant to the Offer, the shareholder is
required to notify the Depositary of such shareholder's correct TIN by
completing a Substitute Form W-9 certifying (i) that the TIN provided on
Substitute Form W-9 is correct (or that such shareholder is awaiting a TIN), and
(ii) that (a) such shareholder has not been notified by the Internal Revenue
Service that such shareholder is subject to backup withholding as a result of a
failure to report all interest or dividends or (b) the Internal Revenue Service
has notified such stockholder that such shareholder is no longer subject to
backup withholding.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering shareholder 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 shareholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below 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 shareholder 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. Lost, Destroyed or Stolen Certificates.
If any certificate(s) representing Shares has been lost, destroyed or
stolen, the shareholder should promptly notify the Depositary. The shareholder
will then be instructed as to the steps that must be taken in order to replace
the certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost or destroyed certificates have
been followed.
11. Dividend Reinvestment Plan.
Shares held in the Company's Dividend Reinvestment Plan may be tendered by
checking the box captioned "Tender of Dividend Reinvestment Plan Shares" in this
Letter of Transmittal.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY HEREOF) OR AN
AGENT'S MESSAGE TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY
TRANSFER OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY
AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR
TO THE EXPIRATION DATE.
<PAGE> 10
TO BE COMPLETED BY ALL TENDERING SHAREHOLDERS
(SEE INSTRUCTION 9)
PAYER'S NAME: FIRST UNION NATIONAL BANK OF NORTH CAROLINA
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT Social Security Number or
SUBSTITUTE RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. Employer ID Number
--------------------------------------------
------------------------------------------------------------------------------------------------
FORM W-9 PART 2 -- Certifications -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting
DEPARTMENT OF THE TREASURY for a number to be issued to me and have checked the box in Part 3) and
INTERNAL REVENUE SERVICE
(2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or
(b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to
backup withholding as a result of a failure to report all interest or dividends, or (c) the
IRS has notified me that I am no longer subject to backup withholding.
Payer's Request for
Taxpayer Identification CERTIFICATION INSTRUCTIONS -- YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE
Number ("TIN") IRS THAT YOU ARE CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING INTEREST OR
DIVIDENDS ON YOUR TAX RETURN. HOWEVER, IF AFTER BEING NOTIFIED BY THE IRS THAT YOU WERE SUBJECT
TO BACKUP WITHHOLDING YOU RECEIVED ANOTHER NOTIFICATION FROM THE IRS THAT YOU ARE NO LONGER
SUBJECT TO BACKUP WITHHOLDING, DO NOT CROSS OUT SUCH ITEM (2).
------------------------------------------------------------------------------------------------
PART 3 --
SIGNATURE DATE 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, but that such amounts
will be refunded to me if I then provide a Taxpayer Identification Number within
sixty (60) days.
Signature: Date:
-------------------------- ----------------------------------
- --------------------------------------------------------------------------------
<PAGE> 11
FACSIMILE COPIES OF THE LETTER OF TRANSMITTAL, PROPERLY COMPLETED AND DULY
EXECUTED, WILL BE ACCEPTED. THE LETTER OF TRANSMITTAL, CERTIFICATES FOR SHARES
AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT OR DELIVERED BY EACH STOCKHOLDER
OF THE COMPANY OR HIS BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER
NOMINEE TO THE DEPOSITARY AT ONE OF ITS ADDRESSES SET FORTH BELOW:
THE DEPOSITARY FOR THE OFFER IS:
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
<TABLE>
<S> <C>
By Mail: By Facsimile Transmission:
First Union National Bank of North Carolina 704-374-6114
Corporate Trust Operations
Attention: Corporate Action Unit
2 First Union Center
Charlotte, North Carolina 28202-1153
By Hand: By Overnight Courier:
First Union National Bank of North Carolina First Union National Bank of North Carolina
Corporate Trust Operations Corporate Trust Operations
Attention: Corporate Action Unit Attention: Corporate Action Unit
230 South Tryon Street, 11th Floor 230 South Tryon Street, 11th Floor
Charlotte, North Carolina 28202-1153 Charlotte, North Carolina 28202-1153
</TABLE>
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
listed below. Additional copies of the Offer to Purchase, the Letter of
Transmittal and other tender offer materials may be obtained from the
Information Agent as set forth below, and will be furnished promptly at the
Purchaser's expense. You may also contact your broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
MACKENZIE
PARTNERS, INC.
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
or
Call Toll-Free (800) 322-2885
The Dealer Manager for the Offer is:
MORGAN STANLEY & CO.
Incorporated
1251 Avenue of the Americas
New York, New York 10020
(212) 703-7186
<PAGE> 12
SAMPLE
DO NOT COMPLETE
<PAGE> 1
Notice of Guaranteed Delivery
for
Tender of Shares of Common Stock
of
WorldWay Corporation
(Not to be Used for Signature Guarantees)
This Notice of Guaranteed Delivery or one substantially equivalent hereto
must be used to accept the Offer (as defined below) if certificates representing
shares of Common Stock, par value $0.50 per share (the "Shares"), of WorldWay
Corporation, Inc., a North Carolina corporation (the "Company"), are not
immediately available or time will not permit all required documents to reach
First Union National Bank of North Carolina (the "Depositary") on or prior to
the Expiration Date (as defined in the Offer to Purchase), or the procedures for
delivery by book-entry transfer cannot be completed on a timely basis. This
Notice of Guaranteed Delivery may be delivered by hand or sent by facsimile
transmission or mail to the Depositary. See Section 2 of the Offer to Purchase.
The Depositary for the Offer is:
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
<TABLE>
<S> <C>
By Mail: By Facsimile Transmission:
First Union National Bank of North Carolina 704-374-6114
Corporate Trust Operations
Attention: Corporate Action Unit
2 First Union Center
Charlotte, North Carolina 28202-1153
By Hand: By Overnight Courier:
First Union National Bank of North Carolina First Union National Bank of North Carolina
Corporate Trust Operations Corporate Trust Operations
Attention: Corporate Action Unit Attention: Corporate Action Unit
230 South Tryon Street, 11th Floor 230 South Tryon Street, 11th Floor
Charlotte, North Carolina 28202-1153 Charlotte, North Carolina 28202-1153
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO
A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to ABC Acquisition Corporation, a North
Carolina corporation (the "Purchaser") and a wholly owned subsidiary of Arkansas
Best Corporation, a Delaware corporation, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated July 14, 1995 (the "Offer
to Purchase"), and in the related Letter of Transmittal (which together
constitute the "Offer"), receipt of each of which is hereby acknowledged, the
number of Shares indicated below pursuant to the guaranteed delivery procedures
set forth in Section 2 of the Offer to Purchase.
Number of Shares:
-------------------------------------
Certificate No(s).
(if available):
---------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
If Share(s) will be tendered by book-entry transfer, check the box.
/ / The Depository Trust Company
Account Number:
---------------------------------------
Date:
-------------------------------------------------
- ------------------------------------------------------
Name(s) of Record Holder(s):
- ------------------------------------------------------
- ------------------------------------------------------
(Please Print)
Address(es):
- ------------------------------------------------------
- ------------------------------------------------------
(Zip Code)
Area Code and Telephone Number(s):
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
Signature(s):
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
THE GUARANTEE BELOW MUST BE COMPLETED
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a bank, broker, dealer, credit union,
savings association or other entity which is a member in good standing of the
Securities Transfer Agents Medallion Program, hereby (a) represents that the
tender of Shares effected hereby complies with Rule 14e-4 under the Securities
Exchange Act of 1934, as amended, and (b) guarantees to deliver to the
Depositary at one of its addresses set forth above either the certificates
representing all tendered Shares, in proper form for transfer, a Book-Entry
Confirmation (as defined in the Offer to Purchase), together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees, or, in the case of book-entry delivery of
Shares, an Agent's Message (as defined in the Offer to Purchase), and any other
documents required by the Letter of Transmittal within five New York Stock
Exchange, Inc. ("NYSE") trading days after the date of execution of this Notice
of Guaranteed Delivery.
Name of Firm:
--------------------------------------------
Address:
-------------------------------------------------
- ---------------------------------------------------------
(Zip Code)
Area Code and
Telephone Number:
----------------------------------------
- ---------------------------------------------------------
(Authorized Signature)
Title:
---------------------------------------------------
Name:
----------------------------------------------------
(Please type or print)
Date:
----------------------------------------------------
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED
DELIVERY. CERTIFICATES FOR SHARES SHOULD BE SENT WITH YOUR LETTER OF
TRANSMITTAL.
<PAGE> 1
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
WorldWay Corporation
at
$11.00 Net Per Share
by
ABC Acquisition Corporation
a wholly owned subsidiary
of
Arkansas Best Corporation
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, AUGUST 10, 1995, UNLESS EXTENDED.
- --------------------------------------------------------------------------------
July 14, 1995
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by ABC Acquisition Corporation, a North Carolina
corporation (the "Purchaser"), and Arkansas Best Corporation, a Delaware
corporation ("Parent"), to act as financial advisor and Dealer Manager in
connection with the Purchaser's offer to purchase all outstanding shares of
Common Stock, par value $0.50 per share (the "Shares"), of WorldWay Corporation,
a North Carolina corporation (the "Company"), at a purchase price of $11.00 per
Share, net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated July 14,
1995 (the "Offer to Purchase"), and in the related Letter of Transmittal (which
together constitute the "Offer") enclosed herewith.
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.
The Offer is conditioned upon, among other things, Shares representing at
least a majority of the total number of outstanding Shares on a fully-diluted
basis being validly tendered and not withdrawn prior to the expiration of the
Offer. The Offer is also subject to other terms and conditions contained in the
Offer to Purchase. See the Introduction and Sections 1, 15 and 16 of the Offer
to Purchase.
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase, dated July 14, 1995.
2. The Letter of Transmittal for your use to tender Shares and for the
information of your clients. Facsimile copies of the Letter of Transmittal
may be used to tender Shares.
3. 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.
4. The Notice of Guaranteed Delivery for Shares to be used to accept
the Offer if certificates for Shares ("Share Certificates") and all other
required documents are not immediately available or cannot be delivered to
the Depositary (the "Depositary") by the Expiration Date (as defined in the
Offer to Purchase) or if the procedure for book-entry transfer cannot be
completed by the Expiration Date.
5. A Letter to shareholders from the Chairman and Chief Executive
Officer of the Company accompanied by the Company's
Solicitation/Recommendation Statement on Schedule 14D-9.
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 Union National Bank of North
Carolina, the Depositary.
<PAGE> 2
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, AUGUST 10, 1995,
UNLESS EXTENDED.
In order to accept the Offer, 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 any other required documents should be sent to the Depositary and
either Share Certificates representing the tendered Shares should be delivered
to the Depositary, or 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 2 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, 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, and additional copies of the enclosed material may be obtained from, the
Information Agent or the undersigned, at their respective addresses and
telephone numbers set forth on the back cover of the Offer to Purchase.
Very truly yours,
MORGAN STANLEY & CO.
Incorporated
- --------------------------------------------------------------------------------
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON, THE AGENT OF PARENT, THE PURCHASER, 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.
- --------------------------------------------------------------------------------
<PAGE> 1
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
WorldWay Corporation
at
$11.00 Net Per Share
by
ABC Acquisition Corporation
a wholly owned subsidiary
of
Arkansas Best Corporation
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, AUGUST 10, 1995, UNLESS EXTENDED.
- -------------------------------------------------------------------------------
July 14, 1995
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated July 14,
1995 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") relating to the offer by ABC Acquisition
Corporation, a North Carolina corporation (the "Purchaser"), and a wholly owned
subsidiary of Arkansas Best Corporation, a Delaware corporation, to purchase all
outstanding shares of Common Stock, par value $0.50 per share (the "Shares"), of
WorldWay Corporation, a North Carolina corporation (the "Company") (as defined
in the Offer to Purchase), at a purchase price of $11.00 per Share, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase and in the related Letter of
Transmittal 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 on or 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 2 of the Offer to Purchase.
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.
<PAGE> 2
Accordingly, we request instructions as to whether you wish to have us
tender on your behalf any or all Shares held by us for your account pursuant to
the terms and conditions set forth in the Offer.
Please note the following:
1. The tender price is $11.00 per Share net to you in cash without
interest thereon, upon the terms and subject to the conditions set forth in
the Offer.
2. The Offer is being made for all outstanding Shares.
3. The Offer is conditioned upon, among other things, Shares
representing at least a majority of the total number of outstanding Shares
on a fully-diluted basis being validly tendered and not withdrawn prior to
the expiration of the Offer. The Offer is also subject to other terms and
conditions contained in the Offer to Purchase. See the Introduction and
Sections 1, 15 and 16 of the Offer to Purchase.
4. Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, except as otherwise provided in Instruction 6 of the
Letter of Transmittal, stock transfer taxes on the purchase of Shares by
the Purchaser pursuant to the Offer.
5. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Thursday, August 10, 1995, unless extended.
6. Payment for Shares purchased pursuant to the Offer will in all
cases be made only after timely receipt by First Union National Bank of
North Carolina (the "Depositary") of (a) Share Certificates or timely
confirmation of the book-entry transfer of such Shares into the account
maintained by the Depositary at The Depository Trust Company (the
"Book-Entry Transfer Facility"), pursuant to the procedures set forth in
Section 2 of the Offer to Purchase, (b) 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 connection with a book-entry delivery, and (c) any other
documents required by the Letter of Transmittal. Accordingly, payment may
not be made to all tendering stockholders at the same time depending upon
when certificates for or confirmations of book-entry transfer of such
Shares into the Depositary's account at a Book-Entry Transfer Facility are
actually received by the Depositary.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form set forth on the back page of this letter. If you
authorize the tender of your Shares, all such Shares will be tendered unless
otherwise specified on the back page of this letter. An envelope to return your
instructions to us is enclosed. 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.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. However, the Purchaser
may, in its discretion, take such action as it may deem necessary to make the
Offer in any jurisdiction and extend the Offer to holders of Shares in such
jurisdiction.
In any jurisdiction where the securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer is being made on
behalf of the Purchaser by Morgan Stanley & Co. Incorporated, the Dealer Manager
for the Offer, or one or more registered brokers or dealers that are licensed
under the laws of such jurisdiction.
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL OUTSTANDING
SHARES OF COMMON STOCK
OF
WORLDWAY CORPORATION
BY
ABC Acquisition Corporation
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated July 14, 1995 (the "Offer to Purchase"), and the
related Letter of Transmittal (which together constitute the "Offer") in
connection with the offer by ABC Acquisition Corporation, a North Carolina
corporation (the "Purchaser"), and a wholly owned subsidiary of Arkansas Best
Corporation, a Delaware corporation, to purchase all outstanding shares of
Common Stock, par value $1.00 per share (the "Shares"), of WorldWay Corporation,
a North Carolina corporation, at a purchase price of $11.00 per Share, net to
the seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase.
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
Number of Shares to Be Tendered: Shares*
-----------------
Date:
-------------------------------------------
- ---------------
* Unless otherwise indicated, it will be assumed that you instruct us to tender
all Shares held by us for your account.
- --------------------------------------------------------------------------------
SIGN HERE
Signature(s)
-------------------------------------------------------------------
------------------------------------------------------------------------------
(Print Name(s))
----------------------------------------------------------------
------------------------------------------------------------------------------
(Print Address(es))
------------------------------------------------------------
------------------------------------------------------------------------------
(zip code)
(Area Code and Telephone Number(s))
-------------------------------------------
(Taxpayer Identification or Social Security Number(s))
-------------------------
- --------------------------------------------------------------------------------
<PAGE> 1
GUIDELINES FOR CERTIFICATIONS OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification to Give the
Payer -- Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen, i.e. 000-000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
FOR THIS TYPE OF ACCOUNT: GIVE THE SOCIAL SECURITY NUMBER OF:
<S> <C> <C>
1. An individual's account The individual
2. Two or more individuals (joint account) The actual owner of the account or, if
combined funds, any one of the individual's(1)
3. Husband and wife (joint account) The actual owner of the account or, if joint
funds, either person(1)
4. Custodian account of a minor (Uniform Gift to The minor(2)
Minors Act)
5. Adult and minor (joint account) The adult or, if the minor is the only
contributor, the minor(1)
6. Account in the name of guardian or committee The ward, minor, or incompetent person(3)
for a designated ward, minor, or incompetent
person
7. a. The usual revocable savings trust account The grantor-trustee(1)
(grantor is also trustee)
b. So-called trust account that is not a legal The actual owner(1)
or valid trust under State law
</TABLE>
<TABLE>
<CAPTION>
FOR THIS TYPE OF ACCOUNT: GIVE THE EMPLOYER IDENTIFICATION NUMBER OF:
<S> <C> <C>
8. Sole proprietorship account The owner(4)
9. A valid trust, estate, or pension trust Legal entity (Do not furnish the identifying
number of the personal representative or
trustee unless the legal entity itself is not
designated in the account title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or educational The organization
organization account
12. Partnership account held in the name of the The partnership
business
13. Association, club, or other tax-exempt The organization
organization
14. A broker or registered nominee The broker or nominee
15. Account with the Department of Agriculture in The public entity
the name of a public entity (such as a state
or local government, school district, or
prison) that receives agricultural program
payments
</TABLE>
- ---------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
Note: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
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
agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S.
or a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of
1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
- Payment of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include
the following:
- Payments of interest on obligations issued by individuals.
Note: You may be subject to backup withholding if this interest is $600 or
more and is paid in the course of the payer's trade or business and you
have not provided your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt interest dividends
under section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments of 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, IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE
DIVIDENDS, ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
Privacy Act Notice. Section 6109 requires most recipients of dividends,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1993, 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 payer, you are subject to
a penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) Civil Penalty for False Information With Respect to Withholding. If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) Criminal Penalty for Falsifying Information. 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. The Offer is made solely by the Offer to Purchase
dated July 14, 1995 and the related Letter of Transmittal and is being made to
all holders of Shares. The Offer is not being made to (nor will tenders be
accepted from or on behalf of) holders of Shares in any jurisdiction in which
the making of the Offer or the acceptance thereof would not be in compliance
with the laws of such jurisdiction. 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 shall be deemed to be made on behalf of ABC
Acquisition Corporation by Morgan Stanley & Co. Incorporated or one or more
registered brokers or dealers under the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
WORLDWAY CORPORATION
AT
$11.00 NET PER SHARE
BY
ABC ACQUSISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
ARKANSAS BEST CORPORATION
ABC Acquisition Corporation, a North Carolina corporation (the
"Purchaser") and a wholly owned subsidiary of Arkansas Best Corporation, a
Delaware corporation ("Parent"), is offering to purchase all outstanding shares
of Common Stock, par value $0.50 per share (the "Shares"), of WorldWay
Corporation, a North Carolina corporation (the "Company"), at a purchase price
of $11.00 per Share, net to the seller in cash, upon the terms and subject to
the conditions set forth in the Offer to Purchase dated July 14, 1995 (the
"Offer to Purchase") and in the related Letter of Transmittal (which, together
with any amendments or supplements thereto, collectively constitute the
"Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, AUGUST 10, 1995, UNLESS EXTENDED.
The Offer is being made pursuant to an Agreement and Plan of Merger
dated as of July 8, 1995 (the "Merger Agreement"), among Parent, the Purchaser
and the Company pursuant to which, following the satisfaction or waiver of
certain conditions, the Purchaser will be merged with and into the Company (the
"Merger"), with the Company continuing as the surviving corporation. On the
effective date of the Merger, each outstanding Share (other than any shares
held by Parent or any subsidiary of Parent, and other than shares, if any, held
by shareholders who perfect their dissenters' rights under North Carolina
laws), will be converted into the right to receive $11.00 in cash or such other
price paid for each Share in the Offer, in either case without interest.
THE OFFER IS CONDITIONED UPON (i) THERE BEING VALIDLY TENDERED AND NOT
WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF SHARES WHICH
WOULD REPRESENT AT LEAST A MAJORITY OF ALL OUTSTANDING SHARES ON A FULLY
DILUTED BASIS, (ii) RECEIPT OF AN INFORMAL WRITTEN OPINION IN FORM AND
SUBSTANCE SATISFACTORY TO PARENT FROM THE STAFF OF THE INTERSTATE COMMERCE
COMMISSION ("ICC"), WITHOUT THE IMPOSITION OF ANY CONDITIONS REASONABLY
UNACCEPTABLE TO PARENT, THAT THE VOTING TRUSTS TO BE USED IN CONNECTION WITH
THE OFFER AND THE MERGER ARE CONSISTENT WITH THE POLICIES OF THE ICC AGAINST
UNAUTHORIZED ACQUISITIONS OF CONTROL OF A REGULATED CARRIER, (iii) THE ICC
SHALL HAVE GRANTED PARENT OR THE PURCHASER TEMPORARY AUTHORITY TO OPERATE THE
PROPERTIES OF THE COMPANY PENDING RECEIPT OF THE EXEMPTION FROM OR APPROVAL BY
THE ICC WITHOUT IMPOSING ANY CONDITIONS REASONABLY UNACCEPTABLE TO PARENT OR
THE PURCHASER AND (iv) THE OTHER CONDITIONS DESCRIBED IN THE OFFER TO PURCHASE.
SEE THE INTRODUCTION AND SECTION 15 OF THE OFFER TO PURCHASE.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT
THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE
SHAREHOLDERS OF THE COMPANY, AND RECOMMENDS THAT SHAREHOLDERS OF THE COMPANY
ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
For purposes of the Offer, the Purchaser shall be deemed to have
accepted for payment, and thereby purchased, Shares properly tendered to the
Purchaser and not withdrawn as, if and when the Purchaser gives oral or written
notice to First Union National Bank of North Carolina, as Depositary (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 shareholders for the purpose of receiving payment
from the Purchaser and transmitting payment to tendering shareholders. In all
cases, payment for Shares accepted for payment pursuant to the Offer will be
made only after timely receipt by the Depositary of (a) certificates for such
Shares or timely confirmation of book-entry transfer of such Shares into the
Depositary's account at a Book-Entry Transfer Facility (as defined in the Offer
to Purchase) as described in Section 2 of the Offer to Purchase (b) a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) with
any required guarantees or, in the case of a book-entry transfer, an Agent's
Message (as defined in the Offer to Purchase) and (c) any other documents
required by the Letter of Transmittal. UNDER NO CIRCUMSTANCES WILL INTEREST BE
PAID BY THE PURCHASER ON THE PURCHASE PRICE OF THE SHARES, REGARDLESS OF ANY
EXTENSION OF THE OFFER OR DELAY IN MAKING SUCH PAYMENT.
<PAGE> 2
The term "Expiration Date" means 12:00 Midnight, New York City time,
on Thursday, August 10, 1995, unless and until the Purchaser, in its sole
discretion (but subject to the terms of the Merger Agreement), shall have
extended the period of time during which the Offer is open, in which event the
term "Expiration Date" shall mean the latest time and date on which the Offer,
as so extended by the Purchaser, shall expire. Subject to the terms of the
Merger Agreement and the applicable rules and regulations of the Securities and
Exchange Commission, the Purchaser expressly reserves the right, in its sole
discretion, at any time or from time to time, and regardless of whether or not
any of the events set forth in Section 15 of the Offer to Purchase shall have
occurred, to extend the period of time during which the Offer is open, and
thereby delay acceptance for payment of, and the payment for, any Shares, by
giving oral or written notice of such extension to the Depositary. There can be
no assurance that the Purchaser will exercise its right to extend the Offer.
Any such extension will be followed by a public announcement thereof no later
than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date. During any such extension, all Shares
previously tendered and not withdrawn will remain subject to the Offer, subject
to the right of a tendering shareholder to withdraw such shareholder's Shares
as provided in the Offer.
Except as otherwise provided below, tenders of Shares are irrevocable.
Shares tendered pursuant to the 0ffer may be withdrawn at any time prior
to the Expiration Date or, if the Purchaser shall have extended the
period of time during which the Offer is open, the latest time and date at
which the Offer, as so extended by the Purchaser, shall expire and, unless
theretofore accepted for payment and paid for pursuant to the Offer, may also
be withdrawn at any time after September 11, 1995. For a withdrawal to be
effective, a written, telegraphic or facsimile transmission notice of
withdrawal must be timely received by the Depositary at one of its addresses
set forth on the back cover of the Offer to Purchase and must specify the name
of the person having tendered the Shares to be withdrawn, the number of Shares
to be withdrawn and the name of the registered holder of the Shares to be
withdrawn, if different from the name of the person who tendered the Shares.
If certificates for Shares have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of such certificates, the
serial numbers shown on such certificates must be submitted to the Depositary
and, unless such Shares have been tendered by an Eligible Institution (as
defined in Section 2 of the Offer to Purchase), the signatures on the notice of
withdrawal must be guaranteed by an Eligible Institution. If Shares have been
delivered pursuant to the procedures for book-entry transfer as set forth in
Section 2 of the Offer to Purchase, any notice of withdrawal must also specify
the name and number of the account at the appropriate Book-Entry Transfer
Facility to be credited with the withdrawn Shares and otherwise comply with
such Book-Entry Transfer Facility's procedures. Withdrawals of tenders of
Shares may not be rescinded, and any shares properly withdrawn will thereafter
be deemed not validly tendered for any purposes of the Offer. However,
withdrawn Shares may be retendered by again following one of the procedures
described in Section 2 of the Offer to Purchase at any time prior to the
Expiration Date. All questions as to the form and validity (including time of
receipt) of notice of withdrawal will be determined by the Purchaser, in its
sole discretion, whose determination will be final and binding.
The Offer to Purchase and the related Letter of Transmittal and other
relevant materials will be mailed to record holders of Shares and furnished to
brokers, dealers, commercial banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the shareholder lists or, if
applicable, who are listed as participants in a clearing agency's security
position listing, for subsequent transmittal to beneficial owners of Shares.
The information required to be disclosed by Rule 14d-6(e)(1)(vii)
under the Securities Exchange Act of 1934, as amended, is contained in the Offer
to Purchase and is incorporated herein by reference.
THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION THAT SHOULD BE READ BEFORE MAKING ANY DECISION WITH RESPECT TO THE
OFFER.
Requests for copies of the Offer to Purchase, the Letter of
Transmittal and all other tender offer materials may be directed to the
Information Agent or the Dealer Manager as set forth below, and copies will be
furnished promptly at the Purchaser's expense.
The Information Agent for the Offer is:
MACKENZIE PARTNERS, INC.
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Collect)
or
CALL TOLL-FREE (800) 322-2885
The Dealer Manager for the Offer is:
MORGAN STANLEY & CO.
INCORPORATED
1251 Avenue of the Americas
New York, New York 10020
(212) 703-7186
July 14, 1995
<PAGE> 1
EXHIBIT (a)(8)
ARKANSAS BEST CORPORATION AND
WORLDWAY CORPORATION AGREE TO MERGER
(Fort Smith, Arkansas, July 10, 1995) -- Arkansas Best Corporation
(NASDAQ/NMS:"ABFS") ("Arkansas Best") announced today the signing of a
definitive agreement providing for the merger of a subsidiary of Arkansas Best
with WorldWay Corporation ("WorldWay", formerly known as Carolina Freight
Corporation) (NYSE: "WCN" and PSE: "WCN"), pursuant to which WorldWay will
become a wholly owned subsidiary of Arkansas Best.
The first step of the acquisition will be a cash tender offer for all
outstanding shares of WorldWay at $11.00 per share net which will commence by
July 17, 1995. Arkansas Best will acquire any shares (other than dissenting
shares) not purchased in the tender offer in a subsequent, cash merger at the
same $11.00 per share net price. WorldWay currently has approximately 6,561,672
common shares outstanding and approximately $70 million of debt.
"WorldWay, which had 1994 consolidated revenues of $935 million,
represents a tremendous opportunity for Arkansas Best," Robert A. Young III,
Chief Executive Officer of Arkansas Best stated. "The acquisition helps
Arkansas Best create one of the premier LTL motor carriers in the United States
and expands our international and logistics offerings. It will
<PAGE> 2
also give us an entry into the truckload industry. The transaction is expected
to be non-dilutive and to contribute to earnings in 1996. Moreover, Arkansas
Best expects to take advantage of substantial synergies in the near term."
Lary Scott, Chairman of WorldWay, said, "Our board and management
team have endorsed the combination of WorldWay and Arkansas Best in order to
provide our shareholders, employees, customers and programs with the support
necessary to continue to grow and prosper within the transportation industry.
Arkansas Best will help support our efforts to effectively serve our
customers."
The tender offer is subject to the receipt of an informal written
opinion satisfactory to Arkansas Best from the Interstate Commerce
Commission (the "ICC") regarding the use of voting trusts in connection with
tho offer and the proposd merger and the ICC granting Arkansas Best temporary
authority to operate the properties of WorldWay pending ICC approval or
exemption from approval. The offer is also subject to other customary
conditions.
Morgan Stanley & Co. Incorporated is acting as financial advisor to
Arkansas Best and dealer manager for the tender offer. The tender offer will be
made only pursuant to definitive offering documents to be filed with the
Securities and Exchange Commission.
WorldWay, headquartered in Charlotte, North Carolina, through its
subsidiaries, offers domestic and international
2
<PAGE> 3
surface transportation services as well as logistics management and third-party
services.
Arkansas Best, which had 1994 consolidated revenues of $1.1 billion,
headquartered in Fort Smith, Arkansas, is primarily engaged, through its
subsidiaries: ABF Freight System, Inc. in LTL shipments of general commodities,
Clipper Exxpress Company in rail intermodal, Integrated Distribution Inc. in
logistics, and is also engaged in truck tire retreading and new truck tire
sales through Treadco, Inc., its 46%-owned subsidiary.
END OF RELEASE
For further information, contact Mr. Randall M. Loyd, Director of Financial
Reporting, at (501) 785-6200.
3
<PAGE> 1
EXHIBIT (a)(9)
[LETTERHEAD OF ARKANSAS BEST CORPORATION]
DATE: July 14, 1995
CONTACT: Randall M. Loyd
TELEPHONE: 501-785-6200
FOR IMMEDIATE RELEASE
ARKANSAS BEST CORPORATION COMMENCES TENDER OFFER FOR
WORLDWAY CORPORATION
New York, NY, July 14, 1995 -- Arkansas Best Corporation (NASDAQ/NMS:
"ABFS") announced that it commenced today its previously announced tender offer
at $11.00 per share for all the outstanding shares of WorldWay Corporation
(NYSE: "WCN" and PSE: "WCN"). The offer is scheduled to expire at 12:00
Midnight, New York City time, on Thursday, August 10, 1995, unless extended.
The tender offer is subject to the receipt of an informal written opinion
satisfactory to Arkansas Best Corporation from the Interstate Commerce
Commission (the "ICC") regarding the use of voting trusts in connection with the
offer and the proposed merger and the ICC granting Arkansas Best Corporation
temporary authority to operate the properties of WorldWay pending receipt of the
exemption from or approval by the ICC. The tender offer is also subject to other
customary conditions.
<PAGE> 1
EXHIBIT (a)(10)
MEMORANDUM
EMPLOYEE STOCK PURCHASE PLAN
TO: Participants in the Employee Stock Purchase Plan of Carolina Freight
Corporation ("Plan")
FROM: John B. Yorke, Vice President and General Counsel
DATE: July 14, 1995
I am sending this Memorandum on behalf of WorldWay Corporation
("Company") to each Participant in the Plan.
Section 10 of the Plan provides that Participants may direct the Agent
of the Plan, First Union National Bank of North Carolina, to sell all or a
portion of the shares held in such Participant's account.
Therefore, we are enclosing for you the information that the Company is
sending to shareholders about the tender offer made for the Company by ABC
Acquisition Corporation, a wholly owned subsidiary of Arkansas Best
Corporation. These materials include a sample letter of transmittal (on blue
paper) for reference only. YOU DO NOT NEED TO COMPLETE OR RETURN ANY PART OF
THE LETTER OF TRANSMITTAL.
We are also enclosing an instruction form, printed on pink paper, by
which you may indicate how you wish to direct the Agent to respond to the
tender offer with respect to the shares of the Company's stock allocated to
your account. In addition, you must complete and return the Substitute W-9 form
printed on the reverse side of the instruction form. Please see the
instructions on the reverse side of this memorandum and the enclosed
Guidelines.
YOUR INSTRUCTION FORM AND SUBSTITUTE W-9 SHOULD BE RETURNED IN THE
ENCLOSED ENVELOPE. YOUR INSTRUCTION FORM AND W-9 MUST BE RECEIVED NO LATER
THAN AUGUST 10, 1995. IF YOU FAIL TO RETURN YOUR INSTRUCTION FORM, THE SHARES
IN YOUR ACCOUNT WILL NOT BE TENDERED.
CONFIDENTIALITY: THE COMPANY WILL ESTABLISH PROCEDURES DESIGNED TO
ENSURE THAT YOUR DECISION REGARDING HOW TO DIRECT THE AGENT TO RESPOND TO THE
TENDER OFFER, INCLUDING YOUR DECISION NOT TO RETURN THE INSTRUCTION FORM, WILL
REMAIN CONFIDENTIAL. YOUR DECISION WILL NOT BE DISCLOSED TO MANAGEMENT OR
DIRECTORS OF THE COMPANY, ANY AFFILIATE OF THE COMPANY, ARKANSAS BEST
CORPORATION OR ANY AFFILIATE OF ARKANSAS BEST CORPORATION.
CONFIDENTIAL
<PAGE> 2
INSTRUCTIONS FOR SUBSTITUTE FORM W-9
Under U.S. Federal income tax law, a shareholder whose tendered Shares are
accepted for payment is required to provide the Agent with such shareholder's
correct taxpayer identification number ("TIN") on Substitute Form W-9 below. If
the Agent is not provided with the correct TIN, the Internal Revenue Service may
subject the shareholder or other payee to a $50 penalty. In addition, payments
that are made to such shareholder or other payee with respect to Shares
purchased pursuant to the Offer may be subject to 31% backup withholding.
Certain shareholders (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 shareholder 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 Agent. See the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for more instructions.
If backup withholding applies, the Agent is required to withhold 31% of any
such payments made to the shareholder 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.
To prevent backup withholding on payments that are made to a shareholder
with respect to Shares purchased pursuant to the Offer, the shareholder is
required to notify the Agent of such shareholder's correct TIN by completing a
Substitute Form W-9 certifying (i) that the TIN provided on Substitute Form W-9
is correct (or that such shareholder is awaiting a TIN), and (ii) that (a) such
shareholder has not been notified by the Internal Revenue Service that such
shareholder is subject to backup withholding as a result of a failure to report
all interest or dividends or (b) the Internal Revenue Service has notified such
shareholder that such shareholder is no longer subject to backup withholding.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering shareholder 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 shareholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below 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 Agent will withhold
31% of all payments made prior to the time a properly certified TIN is provided
to the Agent.
The shareholder is required to give the Agent 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.
<PAGE> 3
INSTRUCTION FORM
RE: WORLDWAY CORPORATION
EMPLOYEE STOCK PURCHASE PLAN ("PLAN")
To First Union National Bank of North Carolina As Agent for the Employee Stock
Purchase Plan of Carolina Freight Corporation and Depositary for the Arkansas
Best Corporation Offer to Purchase All Outstanding Common Shares of WorldWay
Corporation:
I am a participant in the above-stated Plan and, as such, I received a copy
of the Offer to Purchase (and related tender offer materials), dated July 14,
1995, made by ABC Acquisition Corporation, a wholly owned subsidiary of Arkansas
Best Corporation, under which all outstanding common shares of WorldWay
Corporation are to be acquired at $11.00 net per share in cash.
I wish to direct you, in your capacities as the Agent and Depositary for
the stated offer, to tender
/ / all
(check one): held for my account.
/ / __________ shares
[Number]
....................................
(Signature of Participant)
....................................
(Signature of Participant)
....................................
(Date)
If shares are held in joint names,
each co-owner must sign.
PLEASE COMPLETE THE SUBSTITUTE W-9
ON THE REVERSE SIDE OF THIS FORM.
<PAGE> 4
TO BE COMPLETED BY ALL TENDERING SHAREHOLDERS
PAYER'S NAME: FIRST UNION NATIONAL BANK OF NORTH CAROLINA
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT Social Security Number or
SUBSTITUTE RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. Employer ID Number
__________________________________________
------------------------------------------------------------------------------------------------
FORM W-9 PART 2 -- Certifications -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting
DEPARTMENT OF THE TREASURY for a number to be issued to me and have checked the box in Part 3) and
INTERNAL REVENUE SERVICE
(2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or
(b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to
backup withholding as a result of a failure to report all interest or dividends, or (c) the
IRS has notified me that I am no longer subject to backup withholding.
Payer's Request for
Taxpayer Identification CERTIFICATION INSTRUCTIONS -- YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE
Number ("TIN") IRS THAT YOU ARE CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING INTEREST OR
DIVIDENDS ON YOUR TAX RETURN. HOWEVER, IF AFTER BEING NOTIFIED BY THE IRS THAT YOU WERE SUBJECT
TO BACKUP WITHHOLDING YOU RECEIVED ANOTHER NOTIFICATION FROM THE IRS THAT YOU ARE NO LONGER
SUBJECT TO BACKUP WITHHOLDING, DO NOT CROSS OUT SUCH ITEM (2).
------------------------------------------------------------------------------------------------
PART 3 --
SIGNATURE ___________________________ DATE __________ 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, but that such amounts
will be refunded to me if I then provide a Taxpayer Identification Number within
sixty (60) days.
Signature: _________________________________ Date: ____________________________
<PAGE> 5
GUIDELINES FOR CERTIFICATIONS OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification to Give the
Payer -- Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen, i.e. 000-000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
FOR THIS TYPE OF ACCOUNT: GIVE THE SOCIAL SECURITY NUMBER OF:
<S> <C> <C>
1. An individual's account The individual
2. Two or more individuals (joint account) The actual owner of the account or, if
combined funds, any one of the
individual's(1)
3. Husband and wife (joint account) The actual owner of the account or, if
joint funds, either person(1)
4. Custodian account of a minor (Uniform The minor(2)
Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if the minor is the only
contributor, the minor(1)
6. Account in the name of guardian or The ward, minor, or incompetent person(3)
committee for a designated ward, minor,
or incompetent person
7. a. The usual revocable savings trust The grantor-trustee(1)
account (grantor is also trustee)
b. So-called trust account that is not a The actual owner(1)
legal or valid trust under State law
FOR THIS TYPE OF ACCOUNT: GIVE THE EMPLOYER IDENTIFICATION NUMBER OF:
8. Sole proprietorship account The owner(4)
9. A valid trust, estate, or pension trust Legal entity (Do not furnish the
identifying number of the personal
representative or trustee unless the
legal entity itself is not designated in
the account title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or educational The organization
organization account
12. Partnership account held in the name of The partnership
the business
13. Association, club, or other tax-exempt The organization
organization
14. A broker or registered nominee The broker or nominee
15. Account with the Department of The public entity
Agriculture in the name of a public
entity (such as a state or local
government, school district, or prison)
that receives agricultural program
payments
</TABLE>
- ---------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
Note: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 1
EXHIBIT (a)(11)
MEMORANDUM
PAYSOP
TO: Members in the Carolina Freight Corporation Employee Savings and
Protection Plan ("Plan")
FROM: John B. Yorke, Chairman of the Carolina Freight Corporation Employee
Savings and Protection Plan Committee ("Committee")
DATE: July 14, 1995
I am sending this Memorandum, on behalf of the Committee and WorldWay
Corporation ("Company"), to each Member in the Plan with a PAYSOP
Subaccount.
In general, Section 17.14(d) of the Plan provides that Plan Members
whose accounts hold shares of the Company's stock may direct the Trustee of the
Plan, First Union National Bank of North Carolina, how to respond to tender or
exchange offers. A copy of Section 17.14(d) is printed on the reverse side of
this Memorandum. (Beneficiaries of deceased Members have the same right and are
also receiving this Memorandum.)
Therefore, we are enclosing for you the information that the Company is
sending to shareholders about the tender offer made for the Company by ABC
Acquisition Corporation, a wholly owned subsidiary of Arkansas Best
Corporation. These materials include a sample letter of transmittal (on blue
paper) for reference only. YOU DO NOT NEED TO COMPLETE OR RETURN ANY PART OF
THE LETTER OF TRANSMITTAL.
We are also enclosing a direction form, printed on yellow paper, by
which you may indicate how you wish to direct the Trustee to respond to the
tender offer with respect to the shares of the Company's stock allocated to
your PAYSOP Subaccount. Your direction form should be returned in the enclosed
envelope. Your direction form must be received no later than August 10, 1995.
The Committee will decide how to respond to the tender offer for all
Plan Members whose direction forms have not been received by August 10, 1995.
The Committee and the Trustee will disregard the last sentence of Section
17.14(d), which provides that the Trustee will tender any such shares for which
no instruction is received in the same proportion as the tendering of shares
for which instructions are received, because the Committee has determined that
such sentence is not consistent with applicable law.
CONFIDENTIALITY: THE COMMITTEE WILL ESTABLISH PROCEDURES DESIGNED TO
ENSURE THAT YOUR DECISION REGARDING HOW TO DIRECT THE TRUSTEE TO RESPOND TO THE
TENDER OFFER, INCLUDING YOUR DECISION NOT TO RETURN THE DIRECTION FORM, WILL
REMAIN CONFIDENTIAL. YOUR DECISION WILL NOT BE DISCLOSED TO MANAGEMENT OR
DIRECTORS OF THE COMPANY, ANY AFFILIATE OF THE COMPANY, ARKANSAS BEST
CORPORATION OR ANY AFFILIATE OF ARKANSAS BEST CORPORATION.
CONFIDENTIAL
<PAGE> 2
SECTION 17.14(D) OF THE CAROLINA FREIGHT CORPORATION EMPLOYEE SAVINGS AND
PROTECTION PLAN:
The Company shall notify each Member of each tender or exchange offer for
the Shares and utilize its best efforts to distribute or cause to be distributed
to each Member in a timely manner all information distributed to shareholders of
the Company in connection with any such tender or exchange offer. Each Member
shall have the right from time to time with respect to the Shares allocated to
such Member's Account (including fractional Shares to 1/100th of a Share) to
instruct the Trustee in writing as to the manner in which to respond to any
tender or exchange offer which shall be pending or which may be made in the
future for all such Shares or any portion thereof. A Member's instructions shall
remain in force until superseded in writing by the Member. The Trustee shall
tender or exchange whole Shares only as and to the extent so instructed. If the
Trustee shall not receive instructions from a Member regarding any tender or
exchange offer for Shares, the Trustee shall tender or exchange any Shares
allocated to such Member's Account in the same proportion as the tendering of
Shares for which instructions were received.
<PAGE> 3
DIRECTION FORM
TO: FIRST UNION NATIONAL BANK OF NORTH CAROLINA
CORPORATE TRUST OPERATIONS
ATTENTION: CORPORATE ACTION UNIT
2 FIRST UNION CENTER
230 S. TRYON ST., 11TH FLOOR
CHARLOTTE, NC 28202-1153
Pursuant to Section 17.14(d) of the Carolina Freight Corporation Employee
Savings and Protection Plan ("Plan"), I hereby direct that you tender the shares
of WorldWay Corporation allocated to my PAYSOP Subaccount in the Plan to ABC
Acquisition Corporation, a wholly owned subsidiary of Arkansas Best Corporation,
as follows:
_______ Tender all of such shares.
_______ Tender ______________________ [insert number] of such shares only, and
do not tender the remaining shares.
_______ Do not tender any of such shares.
I hereby acknowledge that I am a member in the Plan and that I have received a
copy of the Offer to Purchase and tender offer materials dated July 14, 1995.
Date:___________________________ Signed:______________________________________
Plan Member (or Beneficiary) Name, Number of Shares and Address:
CONFIDENTIAL
<PAGE> 1
EXHIBIT (b)
CONFIDENTIAL
July 7, 1995
Arkansas Best Corporation
3801 Old Greenwood Road
P.O. Box 10048
Fort Smith, Arkansas 72917-0048
Attn: Donald L. Neal, Senior Vice President and
Chief Financial Officer
Ladies and Gentlemen:
Societe Generale, Southwest Agency ("SocGen") and NationsBank of Texas, N.A.
("NationsBank") (SocGen and NationsBank are hereinafter collectively
referred to as the "Arrangers") are pleased to advise you that each such
institution is willing, subject to the terms and conditions contained in this
letter and in the attached Summary of Terms and Conditions (the "Term Sheet"),
to commit in the aggregate up to $350,000,000 (the "Commitment") toward a (i)
$75,000,000 Senior Secured Term Loan and (ii) a $275,000,000 Senior Secured
Revolving Credit (the "Facility") in favor of Arkansas Best Corporation
("ABest") for the purpose of and for providing a portion of the purchase price
for the common stock of WorldWay Corporation (the "Target") and for refinancing
existing indebtedness, providing for working capital needs, general corporate
purposes and to pay related fees and expenses of ABest and the Target in the
respective amounts as follows:
SocGen $200,000,000
NationsBank $150,000,000
Upon your acceptance of this commitment, the Arrangers will endeavor to form a
group of financial institutions (together with SocGen and NationsBank, the
"Banks") acceptable to ABest and to the Arrangers, for which SocGen will act as
Managing Agent and Administrative Agent and NationsBank will serve as
Documentation Agent. The Managing and Administration Agent and the
Documentation Agent are hereinafter referred to as the "Agents". No other
titles may be awarded without the mutual consent of the Agents and ABest.
<PAGE> 2
Arkansas Best Corporation
July 7, 1995
Page 2
The various fees payable to the Arrangers and to the Agents in connection with
the Facility are set forth in a separate letter of even date herewith (the "Fee
Letter").
The Term Sheet attached hereto and incorporated herein by this reference, sets
forth certain terms and conditions which will govern the Facility. This letter
and the Term Sheet are not meant to be and shall not be construed as an attempt
to define all of the terms and conditions of the Facility which shall be set
forth in the definitive financing agreements.
To assist the Arrangers in their syndication effort, you agree to assist and
cooperate with the Arrangers in their syndication efforts, including, but not
limited to promptly preparing and providing upon their request all information
reasonably deemed necessary by them to complete successfully the syndication of
the Facility, including but not limited to information and projections prepared
by you or on your behalf relating to the transactions contemplated hereby. The
Arrangers reserve the right (in consultation with ABest and the Agents) to
allocate the commitments offered by the Banks.
In addition to the conditions to funding or closing set forth in the Term
Sheet, SocGen and NationsBanks' commitment to provide financing hereunder is
subject to, among other conditions, (i) the negotiation and execution of a
definitive bank credit agreement, security documentation, and other
related documentation satisfactory to the Agents, (ii) there being no material
adverse change in the reasonable opinion of the Agents in the financial
condition, business, operations, properties or prospects of ABest and the
Target from the date of the audited financial statements most recently provided
prior to the date hereof or in the markets for primary and secondary
syndication of loans after the date of delivery of this letter and (iii) at the
time of the proposed initial funding, no injunction or other restraining order
shall have been issued or filed, or a hearing therefor be pending or noticed.
As you know, we have submitted this letter after conducting certain due
diligence. Our commitment is subject to the satisfactory completion of our due
diligence. In the event that the results of our continuing due diligence
inquires are, in our opinion, unsatisfactory, the Arrangers may, in their sole
discretion, suggest alternative financing structures that insure adequate
protection for the Banks.
Whether or not the transactions contemplated hereby are consummated, ABest
hereby agrees to indemnify and hold harmless each of the Arrangers and the
Agents, and their respective directors, officers, employees and affiliates
(each, an "indemnified person") from and against any and all losses, claims,
damages, liabilities (or actions or other proceedings commenced or threatened
in respect thereof) and expenses that arise out
<PAGE> 3
Arkansas Best Corporation
July 7, 1995
Page 3
of, result from or in any way relate to this commitment letter, or the
providing or syndication of the Facility, and to reimburse each indemnified
person, upon its demand, for any legal or other expenses incurred in connection
with investigation, defending or participating in any such loss, claim, damage,
liability or action or other proceeding (whether or not such indemnified person
is a party to any action or proceeding out of which any such expenses arise),
other than any of the foregoing claimed by any indemnified person to the extent
incurred by reason of the gross negligence or willful misconduct of such
person. Neither the Arrangers nor the Agents, nor any of their affiliates,
shall be responsible or liable to ABest or any other person for any
consequential damages which may be alleged. The obligations contained in this
paragraph will survive the closing of the Facility.
In addition, the Borrowers hereby agree to reimburse the Arrangers and the
Agents from time to time upon demand for the reasonable out-of-pocket costs and
expenses of Bracewell & Patterson, L.L.P., special counsel to the Agents, in
connection with the Facility, regardless of whether the credit agreement is
executed or the Facility closes.
The terms contained in this letter, the Fee Letter and the Term Sheet are
confidential and, except for disclosure to your Board of Directors, officers
and employees, professional advisors retained by you in connection with this
transaction, or as may be required by law, may not be disclosed in whole or in
part to any other person or entity without our prior written consent, except
that, following your acceptance hereof, you may make public disclosure of this
letter and may file a copy of this letter and the Term Sheet in any public
record in which it is required by law to be filed.
NationsBank reserves the right to employ the services of Nationsbanc Capital
Markets, Inc. as Arranger ("NCMI") in providing the services contemplated
hereunder and to allocate, in whole or in part, to NCMI certain fees payable to
NaitonsBank in such manner as NationsBank and NCMI may agree in their sole
discretion. You acknowledge that NationsBank may share with any of its
affiliates (including NCMI) any information relating to ABest and the Target
and their subsidiaries and affiliates.
This offer will terminate on July 12, 1995 unless on or before that date you
sign and return an enclosed counterpart of this letter and the Fee Letter, and
it will expire on October 31, 1995 if the initial borrowing has not occurred on
or before that date. Furthermore, the Arrangers may terminate their obligation
to provide the Facility if (i) in our opinion any information submitted to the
Arrangers proves to have been inaccurate, incomplete or misleading in any
material respect when submitted, (ii) any of the fees or expenses provided for
in this letter and the Term Sheet are not paid or delivered when due or (iii)
our ability to conduct our due diligence is hampered in any
<PAGE> 4
Arkansas Best Corporation
July 7, 1995
Page 4
material respect. Notwithstanding the foregoing, the compensation,
reimbursement and indemnification provisions hereof shall survive any
termination hereof.
By signing this letter, you represent and warrant to the Arrangers that ABest's
financial statements for the period ended December 31, 1994 (including balance
sheets, income statements, and statements of cash flows), copies of which have
been furnished to the Arrangers, fairly present the financial condition of
ABest and its subsidiaries at such date and all such statements and information
were prepared in accordance with United States' generally accepted accounting
principles.
The Commitment Letter, the Fee Letter and the Term Sheet shall be governed by,
and construed in accordance with, the internal laws of the State of Texas
without reference to principles of conflict of law. All parties to this letter
agreement irrevocably waive all right to trial by jury in any judicial
proceeding arising out of this letter agreement, the Fee Letter and the Term
Sheet or the transactions contemplated hereby or thereby. In the event of
litigation, this letter agreement may be filed as a written consent to a trial
by the court.
This Commitment Letter, the Fee Letter and the Term Sheet shall not be
assignable by you without the prior written consent of Agents and may not be
amended or any provision hereof or thereof waived or modified except by an
instrument in writing signed by each of the parties hereto.
This Commitment Letter, the Fee Letter and the Term Sheet shall not be
assignable by you without the prior written consent of Agents and may not be
amended or any provision hereof or thereof waived or modified except by an
instrument in writing signed by each of the parties hereto.
This Commitment Letter, the Fee Letter and the Term Sheet constitute the entire
agreement among the parties pertaining to the subject matter hereof and thereof
and supersede all prior and contemporaneous agreements, understandings,
representations or other arrangements, whether express or implied, written or
oral, of the parties in connection therewith except to the extent expressly
incorporated or specifically referred to herein or therein.
If the foregoing is satisfactory to you, please indicate your agreement and
acceptance below and return a copy of this letter to us. Upon your delivery to
us of a signed copy of this letter and the Fee Letter and payment of the
initial installment of the arrangement fee as set forth in the Fee Letter, this
letter agreement shall become a binding agreement under laws of the State of
Texas as of the date so accepted.
<PAGE> 5
Arkansas Best Corporation
July 7, 1995
Page 5
We are pleased to have this opportunity and look forward to
working with you.
Very truly yours,
SOCIETE GENERALE, SOUTHWEST AGENCY
By: /s/ MATTHEW C. FRANMAN
Name: Matthew C. Franman
Title: First Vice President &
Manager
NATIONSBANK OF TEXAS, N.A.
By: /s/ BIANCA HOMERMEN
Name: Bianca Homermen
Title: Senior Vice President
Accepted and Agreed to:
ARKANSAS BEST CORPORATION
By: /s/ DONALD L. NEAL
Name: Donald L. Neal
Title: Senior Vice President CEO
<PAGE> 6
SUMMARY OF TERMS
ARKANSAS BEST CORPORATION
CONFIDENTIAL
BORROWER: Arkansas Best Corporation ("ABest")
MANAGING AGENT AND
ADMINISTRATIVE AGENT: Societe Generale, Southwest Agency ("SocGen")
DOCUMENTATION AGENT: NationsBank of Texas, N.A. ("NationsBank")
ARRANGERS: SocGen and NationsBank
LENDERS: SocGen and NationsBank and such other Banks
mutually acceptable to ABest and the Arrangers.
GUARANTORS: Unconditional Guaranty by all present and
future direct and indirect material
subsidiaries of ABest (except Treadco)
FACILITY: Senior Secured Credit Facility in an aggregate
amount up to $350,000,000 comprised of the
following:
1. $75,000,000 Senior Secured Term Loan
("Term Loan")
2. $275,000,000 Senior Secured Revolving
Credit ("Revolving Loan")
PURPOSE: 1. Term Loan: (a) to finance the acquisition
of WorldWay Corporation ("Target") for
cash at no more than $11.00 per share or
such higher price as may be mutually
acceptable to Arrangers the proceeds of
the Term Loan to be contributed/advanced
by ABest to a newly formed acquisition
subsidiary ("ABC Acquisition
<PAGE> 7
CONFIDENTIAL
Corporation") and (b) costs and expenses
of such acquisition. The Term Loan will
be a multi advance facility.
2. Revolving Loan: (a) to support working
capital needs and general corporate
purposes of ABest and its subsidiaries
and to facilitate the issuance of standby
letters of credit for ABest and its
subsidiaries (sublimit of $80,000,000 for
letters of credit), (b) to pay off the
existing senior indebtedness of the
Target not to exceed $126,000,000,
including as a portion thereof
refinancing of approximately $35,000,000
in standby letters of credit and (c) to
pay off/refinance existing revolver
facility and receivables facility of
ABest.
REPAYMENT/MATURITY: 1. Term Loan: A five year amortization
commencing on the earlier of (i) the date
of the first advance or (ii) issuance of
initial letter of credit under the
Facility ("Effective Date"), with
quarterly payments of principal beginning
15 months from the Effective Date,
according to the following amortization
table:
Year Annual Amount ($MM)
---- -------------------
1 $0
2 $10
3 $20
4 $20
5 $25
2. Revolving Loan: Available on a fully
revolving basis for three years from the
Effective Date. All outstanding
Revolving Loans are due in full at
maturity. The Revolving Commitments may
be extended for additional one-year
periods with approval of all Lenders.
-2-
<PAGE> 8
CONFIDENTIAL
FEES: As separately documented in the letter dated
July 6, 1995 (the "Fee Letter") between the
Agents, the Arrangers and ABest.
PRICING: Principal shall bear interest, at ABest's
option, at either the Base Rate or
LIBOR plus a margin and ABest shall pay a
quarterly unused commitment fee on the
Revolving Commitments -- in each case based on
a calculation of the Total Debt to EBITDA ratio
on trailing-four-quarter basis. The Initial
Applicable Margin shall be 175 b.p. from the
closing date until receipt of ABest's and
Target's initial consolidated financial
statements at which time the following
Performance Pricing Grid shall become effective
(calculated as of each subsequent calendar
quarter end):
Total Debt/ Base Commitment
EBITDA LIBOR+ Rate+ Fee
----------- ------ ----- ----------
less than 2.50 1.00% -0-% 1/4%
less than or
equal to
2.50 - 3.50 1.25% .25% 1/4%
less than or
equal to
3.50 - 4.00 1.50% .50% 3/8%
less than or
equal to
4.00 - 4.50 1.75% .75% 3/8%
less than or
equal to
4.50 2.00% 1.00% 1/2%
LETTER OF CREDIT PRICING: ABest shall pay to the Letter of Credit
Issuing Bank for each standby letter of
credit, an issuance fee equal to the
applicable LIBOR margin (on a per annum basis)
reflected above. Such fees shall be payable
quarterly in arrears.
SECURITY/NEGATIVE PLEDGE: - First lien security interest on all
Accounts Receivable;
- Pledge of stock of all material
subsidiaries, including Treadco and
Acquisition Co. shares;
- First Lien on all Eligible Revenue
Equipment;
- Negative Pledge of any remaining assets of
ABest and its Subsidiaries (other than
common stock of the Target) including Real
Estate of ABest and its subsidiaries;
-3-
<PAGE> 9
CONFIDENTIAL
BORROWING BASE: The aggregate of outstanding Advances under
the Borrowing Base shall not exceed the sum
of:
(a) a percentage of the book value of
eligible accounts receivable of
ABest and its subsidiaries (other
than the Target) and a percentage
for those of Target all of which
shall be mutually agreed upon;
(b) a percentage of the net book value
of eligible revenue equipment of
ABest and a percentage of the net
book value of eligible revenue
equipment of Target to be mutually
agreed upon;
(c) a percentage of market value of
pledged Treadco shares to be
mutually agreed upon.
VOLUNTARY PREPAYMENT OF
TERM LOAN/REDUCTION OF
REVOLVING COMMITMENTS: 1. Term Loan Prepayments: ABest may, by
giving notice to the Lenders no later
than three business days before the date
of prepayment, prepay, without penalty
and in whole or in part, prepay principal
under the Term Loan so long as (i) the
notice by ABest specifies the amounts to
be prepaid, (ii) each voluntary partial
prepayment must be in a principal amount
of not less than $5,000,000, or a greater
integral multiple of $1,000,000, plus
accrued interest to the date of the
prepayment, and (iii) ABest shall pay any
related funding loss upon demand.
Voluntary prepayments of the Term Loan
may not be reborrowed and shall be
applied on a pro rata basis. Conversions
between interest options are not
prepayments.
2. Reduction of Revolving Commitments: ABest
may, upon at least three business days
notice to Lenders, fully or partially
terminate the unused Revolving
Commitments. Each partial reduction
-4-
<PAGE> 10
CONFIDENTIAL
must be at least $5,000,000 or a greater
multiple of $1,000,000 and may not be
reinstated.
MANDATORY PREPAYMENT
OF TERM LOAN: ABest shall prepay the following amounts on
the Term Loan:
Source Percentage
------ ----------
Net cash proceeds of Permitted
Asset Sales (to exclude
certain to be agreed upon
asset sales) 100%
Net cash proceeds of equity
issuance of subordinated (to be mutually
debt issuance agreed upon)
Excess cash flow (to be mutually
agreed upon)
Mandatory prepayment provisions exclude
certain de minimis asset sales and adequately
replaced assets. "Excess Cash Flow" to be
further defined and as agreed upon, calculated
on a trailing-four-quarter basis.
Mandatory prepayments from asset sales
and equity and debt issuances are payable on
the last day of each calendar quarter, unless
such amount exceeds $10,000,000 during any
such calendar quarter in which case such
amounts shall be payable within ten days after
they occur. Mandatory prepayments from Excess
Cash Flow are payable annually by the date
audited financial statements are either
actually delivered to Lenders or required to
be delivered to Lenders, whichever first
occurs. Such prepayments shall be applied to
future Term Loan installments (which may not
be reborrowed) on a pro rata basis.
INTEREST PERIODS: LIBOR rate Interest Periods of one, two, three
or six months, with no more than five in
effect at any time.
-5-
<PAGE> 11
CONFIDENTIAL
INTEREST PAYMENTS: Quarterly in arrears for Base Rate
Advances and the earlier of quarterly or the
last day of each Interest Period for LIBOR
Rate Advances.
DRAWDOWNS: At least $5,000,000 or greater multiples
of $1,000,000 for LIBOR Rate Advances and
$1,000,000 or greater multiples of $100,000
for Base Rate Advances. Drawdowns are at
ABest's option with same-business day
notice for Base Rate Advances and
three-business days notice for LIBOR Rate
Advances. Interest on Base Rate Advances will
be calculated on the basis of a 365 day year.
All other payments shall be calculated on the
basis of a 360 day year. Reserves will be
assessed by syndicate banks as actually
incurred.
YIELD PROTECTION: Usual and customary provisions for increased
costs, capital adequacy, protection,
withholding, other taxes and illegality.
REPRESENTATIONS
AND WARRANTIES: Usual and customary for similar transactions
and appropriate others for this particular
transaction.
AFFIRMATIVE COVENANTS: Usual and customary for similar transactions
and appropriate others for this particular
transaction, including, but not limited to,
annual and quarterly financial statements;
monthly Borrowing Base reports; financial
projections, insurance; notice of any material
litigation, claims, adverse effect, or
contingency.
NEGATIVE COVENANTS: Usual and customary for similar transactions
and appropriate others for this particular
transaction.
EVENTS OF DEFAULT: Usual and customary for similar
transactions and appropriate others for this
particular transaction, including, but not
limited to, nonpayment of fees, interest, or
principal when due; breach of representation,
warranties, or covenants; breach of other
material agreements or contracts; cross
default to other indebtedness; bankruptcy
-6-
<PAGE> 12
CONFIDENTIAL
or insolvency; material judgments; certain
ERISA events; and a change in control.
CONDITIONS PRECEDENT TO
CLOSING AND FUNDING: Usual and customary for similar transactions,
including, but not limited to the following:
(i) No material adverse change in the
* Except as respect to Target business or financial condition of
those items listed on either ABest or the Target.*
Schedule 4.1(g) attached
hereto. (ii) The use of loan proceeds shall be legal
and proper under applicable corporate
law -- Reg U issues.
(iii) Plan of Merger entered into between the
Target and ABC Acquisition Co. in form
and substance reasonably satisfactory
to Agents.
(iv) Satisfactory completion of Arranger's
due diligence of the Target.
(v) Tender Offer provisions reasonably
satisfactory to the Agents.
ASSIGNMENTS: Each Lender may assign its loan or
commitments. Assignments must be in amounts at
least $10,000,000 and on a pro rata basis
between the assigning Lender's Term Commitment
and its Revolving Commitment. A $2,500
administration fee is payable before an
assignment becomes effective. Participations
with limited voting rights are permitted.
INDEMNIFICATION: ABEST SHALL INDEMNIFY AND HOLD HARMLESS
THE AGENTS, ARRANGERS, LENDERS AND THEIR
RESPECTIVE AFFILIATES, AND THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND
COUNSEL FROM AND AGAINST LIABILITIES ARISING
OUT OF THE FACILITY, INCLUDING LIABILITIES
CAUSED BY THE NEGLIGENCEY OF THE PARTY SEEKING
INDEMNIFICATION
-7-
<PAGE> 13
CONFIDENTIAL
BUT EXCLUDING LIABILITIES CAUSED BY THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PARTY
SEEKING INDEMNIFICATION.
TRANSACTION EXPENSES: ABest will pay the reasonable legal
fees of the Arrangers and the Agents. ABest
shall reimburse Lenders for all costs and
expenses, including reasonable attorneys' fees
and expenses incurred by Lenders in connection
with the enforcement and collection of
obligations under the Facility. ABest shall
additionally reimburse the Arrangers for all
out of pocket fees and expenses in connection
with the syndication, preparation,
negotiation, execution and administration of
the Facility whether or not the Facility
closes, in no event to exceed $10,000 in the
aggregate.
GOVERNING LAW: State of Texas.
-8-
<PAGE> 14
SCHEDULE 4.1(g)
Except as set forth on this schedule since December 31, 1994, the company and
its subsidiaries have conducted their respective businesses only in the
ordinary course, and there has not been:
(i) Material Adverse Change
A. Reduction in available credit under the Revolving Credit and Letter
of Credit Agreement dated March 15, 1994, among Carolina Freight
Carriers Corporation and Red Arrow Freight Lines with the Bank
Group due to borrowing base reductions.
B. Reduction in credit capacity due to the slow release of collateral
held by Protective Insurance Co. (formerly insurance carriers) and
the increased collateral needs of AIG Risk Management (new insurance
carrier).
C. Periodic posting of "cure funds" pursuant to the Carolina Freight
Trade Receivables Master Trust Pooling and Servicing Agreement as a
result of a Temporary Partial Amortization Period.
D. Projected covenant violations in the Revolving Credit and Letter of
Credit Agreement and the Master Lease Agreements with General
Electric Capital Corporation for Carolina Freight Carriers
Corporation and Cardinal Freight Carriers, Inc.
E. Anticipate consolidated net loss for WorldWay Corporation of $11.0
million to $12.5 million in the second quarter of 1995. A copy of the
press release is attached.
F. Schedule termination date of July 24, 1995, for the Revolving Credit
and Letter of Credit Agreements with Carolina Freight Carriers/Red
Arrow Freight Lines and Cardinal Freight Carriers, CaroTrans
International, The Complete Logistics Company, Innovative Logics
Incorporated.
<PAGE> 1
EXHIBIT (c)(1)
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
Dated as of July 8, 1995
Among
Arkansas Best Corporation,
ABC Acquisition Corporation
And
WorldWay Corporation
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I The Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.1 The Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.2 Company Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 1.3 Voting Trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 1.4 Permanent and Temporary ICC Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 1.5 Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.2 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.3 Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.4 Effects of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.5 Articles of Incorporation and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.6 Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.7 Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE III Effect of the Merger on the Capital Stock of the Constituent Corporations; Exchange of
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.1 Effect on Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.2 Exchange of Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE IV Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.1 Representations and Warranties of the Company . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.2 Representations and Warranties of Parent and Sub . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE V Covenants Relating to Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.1 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.2 No Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 5.3 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.4 Voting Trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.5 Temporary Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.6 Supplemental Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE VI Additional Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.1 Shareholder Meeting; Preparation of the Proxy Statement . . . . . . . . . . . . . . . . . . . 43
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 6.2 Access to Information; Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.3 Reasonable Efforts; Notification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.4 Stock Option Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 6.5 Indemnification and Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 6.6 Fees and Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 6.7 Public Announcements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.8 Title Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 6.9 Transfer Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE VII Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 7.1 Conditions to Each Party's Obligation to Effect the Merger. . . . . . . . . . . . . . . . . . 51
ARTICLE VIII Termination, Amendment and Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 8.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 8.2 Effect of Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 8.3 Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 8.4 Extension; Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 8.5 Procedure for Termination, Amendment, Extension or Waiver. . . . . . . . . . . . . . . . . . . 54
ARTICLE IX General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 9.1 Nonsurvival of Representations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 9.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 9.3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 9.4 Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 9.5 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 9.6 Entire Agreement; No Third-Party Beneficiaries. . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 9.7 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 9.8 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 9.9 Enforcement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 9.10 Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
</TABLE>
EXHIBIT A Conditions of the Offer
EXHIBIT B Voting Trust Agreement
EXHIBIT C Plan of Merger of ABC Acquisition Corporation with and
into Worldway Corporation
ii
<PAGE> 4
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of July 8, 1995, among
Arkansas Best Corporation, a Delaware corporation ("Parent"), ABC Acquisition
Corporation, a North Carolina corporation ("Sub") and a wholly owned subsidiary
of Parent, and WorldWay Corporation, a North Carolina corporation (the
"Company").
WHEREAS the respective Boards of Directors of Parent, Sub and
the Company have approved the acquisition of the Company by Parent on the terms
and subject to the conditions set forth in this Agreement and Plan of Merger,
including, without limitation, the Plan of Merger and all other exhibits
attached hereto (collectively, the "Agreement");
WHEREAS in furtherance of such acquisition, Parent will cause
Sub to make a tender offer (as it may be amended from time to time as permitted
under this Agreement, the "Offer") to purchase all the issued and outstanding
shares of common stock, par value $.50 per share, of the Company (the "Company
Common Stock"), at a price per share of Company Common Stock of $11.00 net to
the seller in cash (such price, the "Offer Price"), upon the terms and subject
to the conditions set forth in this Agreement; and the Board of Directors of
the Company has approved the Offer and is recommending that the Company's
shareholders accept the Offer;
WHEREAS the respective Boards of Directors of Parent, Sub and
the Company have approved the Offer and the merger of Sub into the Company, as
set forth below (the "Merger"), upon the terms and subject to the conditions
set forth in this Agreement, whereby each issued and outstanding share of
Company Common Stock, other than shares owned directly or indirectly by Parent
or by any subsidiary of the Company and other than Dissenting Shares (as
defined in Section 3.1(e)), will be converted into the right to receive the
price per share paid in the Offer;
WHEREAS, upon consummation of the Offer, the Company will
cause the shares of the Company's ICC-regulated subsidiaries (the "ICC
Subsidiaries") to be deposited in independent voting trusts (the "Voting
Trusts"), pending receipt of the exemption from or approval by the
<PAGE> 5
Interstate Commerce Commission (the "ICC") of the acquisition by Parent of the
Company; and
WHEREAS Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe various conditions to the Offer and
the Merger.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement, the parties
agree as follows:
ARTICLE I
The Offer
SECTION 1.1 The Offer. (a) Subject to the provisions of this
Agreement, as promptly as practicable, but in no event later than five business
days after the public announcement of the Offer, Sub shall, and Parent shall
cause Sub to, commence the Offer. The obligation of Sub to, and of Parent to
cause Sub to, commence the Offer and accept for payment, and pay for, any and
all shares of Company Common Stock tendered pursuant to the Offer shall be
subject to the conditions set forth in Exhibit A (any of which may be waived in
whole or in part by Sub in its sole discretion) and to the terms and conditions
of this Agreement; provided, however, that Sub shall not, without the Company's
written consent, waive the Minimum Condition (as defined in Exhibit A). Sub
expressly reserves the right to modify the terms of the Offer, except that,
without the consent of the Company, Sub shall not (i) reduce the number of
shares of Company Common Stock which Sub is offering to purchase in the Offer,
(ii) reduce the Offer Price (other than as permitted by the terms of the
Offer), (iii) modify or add to the conditions set forth in Exhibit A, or (iv)
change the form of consideration payable in the Offer. Notwithstanding the
foregoing, Sub may, without the consent of the Company, (i) extend the Offer
beyond any scheduled expiration date if at any scheduled expiration date of the
Offer, any of the conditions to Sub's obligation to accept for payment, and pay
for, shares of Company Common Stock shall not be satisfied or waived, until
such time as such conditions are satisfied or waived and (ii)
2
<PAGE> 6
extend the Offer for any period required by any rule, regulation,
interpretation or position of the Securities and Exchange Commission (the
"SEC") or the staff thereof applicable to the Offer.
(b) On the date of commencement of the Offer, Parent and
Sub shall file with the SEC a Tender Offer Statement on Schedule 14D-1 with
respect to the Offer, which shall contain an offer to purchase and a related
letter of transmittal and summary advertisement (such Schedule 14D-1 and the
documents included therein pursuant to which the Offer will be made, together
with any supplements or amendments thereto, the "Offer Documents"). Parent and
Sub agree that the Offer Documents shall comply as to form in all material
respects with the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and the rules and regulations promulgated thereunder and, on the date
filed with the SEC and first published, sent or given to the Company's
shareholders, shall not 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 therein, in light of the circumstances under which they
were made, not misleading, except that no representation is made by Parent or
Sub with respect to information supplied in writing by the Company for
inclusion or incorporation by reference in the Offer Documents. Each of
Parent, Sub and the Company agrees promptly to correct any information provided
by it for use in the Offer Documents if and to the extent that such information
shall have become false or misleading in any material respect, and each of
Parent and Sub further agrees to take all steps necessary to amend or
supplement the Offer Documents and to cause the Offer Documents as so amended
or supplemented to be filed with the SEC and to be disseminated to the
Company's shareholders, in each case as and to the extent required by
applicable Federal securities laws. The Company and its counsel shall be given
a reasonable opportunity to review and comment upon the Offer Documents and all
amendments and supplements thereto prior to their filing with the SEC or
dissemination to shareholders of the Company. Parent and Sub agree to provide
the Company and its counsel any comments Parent, Sub or their counsel may
receive from the SEC or its staff with respect to the Offer Documents promptly
after the receipt of such comments and shall provide the Company and its
counsel an opportunity to participate, includ-
3
<PAGE> 7
ing by way of discussion with the SEC or its staff, in the response of Parent
and/or Sub to such comments.
(c) Parent shall provide or cause to be provided to Sub
on a timely basis the funds necessary to accept for payment, and pay for, any
shares of Company Common Stock that Sub accepts for payment, and becomes
obligated to pay for, pursuant to the Offer.
SECTION 1.2 Company Actions. (a) The Company hereby approves
of and consents to the Offer and represents that the Board of Directors of the
Company, at a meeting duly called and held, duly and unanimously by vote of all
directors adopted resolutions approving this Agreement, the Offer and the
Merger determining that the terms of the Offer and the Merger are fair to, and
in the best interests of, the Company's shareholders and recommending that the
Company's shareholders approve and adopt this Agreement, and accept the Offer
and tender their shares pursuant to the Offer. The Company has been advised by
each of its directors and by each executive officer who as of the date hereof
is actually aware (to the knowledge of the Company) of the transactions
contemplated hereby that each such person either intends to tender pursuant to
the Offer all shares of Company Common Stock owned by such person or vote all
shares of Company Common Stock owned by such person in favor of the Merger.
(b) Not later than the date the Offer Documents are filed
with the SEC or as shortly thereafter as is practicable, the Company shall file
with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 with
respect to the Offer (such Schedule 14D-9, as amended from time to time, the
"Schedule 14D-9") containing the recommendation described in Section 1.2(a) and
shall mail the Schedule 14D-9 to the shareholders of the Company. The Schedule
14D-9 shall comply as to form in all material respects with the Exchange Act
and the rules and regulations promulgated thereunder and, on the date filed
with the SEC and on the date first published, sent or given to the Company's
shareholders, shall not 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 therein, in light of the circumstances under which they
were made, not misleading, except that no representation is made by the Company
with respect to information supplied in writing
4
<PAGE> 8
by Parent or Sub for inclusion or incorporation by reference in the Schedule
14D-9. Each of the Company, Parent and Sub agrees promptly to correct any
information provided by it for use in the Schedule 14D-9 if and to the extent
that such information shall have become false or misleading in any material
respect, and the Company further agrees to take all steps necessary to amend or
supplement the Schedule 14D-9 and to cause the Schedule 14D-9 as so amended or
supplemented to be filed with the SEC and disseminated to the Company's
shareholders, in each case as and to the extent required by applicable Federal
securities laws. Parent and its counsel shall be given a reasonable
opportunity to review and comment upon the Schedule 14D-9 and all amendments
and supplements thereto prior to their filing with the SEC or dissemination to
shareholders of the Company. The Company agrees to provide Parent and its
counsel with any comments the Company or its counsel may receive from the SEC
or its staff with respect to the Schedule 14D-9 promptly after the receipt of
such comments and shall provide Parent and its counsel an opportunity to
participate, including by way of discussions with the SEC or its staff, in the
response of the Company to such comments.
(c) In connection with the Offer, the Company shall cause
its transfer agent to furnish Sub promptly with mailing labels containing the
names and addresses of the record holders of Company Common Stock as of a
recent date and of those persons becoming record holders subsequent to such
date, together with copies of all lists of shareholders, security position
listings and computer files and all other information in the Company's
possession or control regarding the beneficial owners of Company Common Stock,
and shall furnish to Sub such information and assistance (including updated
lists of shareholders, security position listings and computer files) as Parent
may reasonably request in communicating the Offer to the Company's
shareholders.
SECTION 1.3 Voting Trusts. Promptly upon the acquisition of
Company Common Stock pursuant to the Offer, the Company will cause the shares
of each ICC Subsidiary to be deposited in separate Voting Trusts. Each such
Voting Trust shall be substantially in accordance with the terms and conditions
of a voting trust agreement in the form of Exhibit B hereto (the "Voting Trust
Agreement").
5
<PAGE> 9
SECTION 1.4 Permanent and Temporary ICC Authority. Upon
execution of this Agreement or as soon thereafter as practical, Parent, Sub and
the Company shall file a Notice of Exemption with the ICC pursuant to 49 C.F.R.
Part 1186 to exempt this transaction from regulatory approval and shall file
with the ICC an application for temporary authority pursuant to 49 U.S.C. 11349
to authorize Parent or Sub to operate the properties of the Company pending
receipt of the exemption from or approval by the ICC. If the application for
temporary authority is granted, following the purchase of Company Common Stock
pursuant to the Offer, Parent or Sub shall have the full authority to manage
and operate the properties of the Company subject only to whatever restrictions
and conditions may be imposed by the ICC.
SECTION 1.5 Directors. (a) Promptly upon the acceptance for
payment of any shares of Company Common Stock by Sub pursuant to the Offer, Sub
shall be entitled to designate such number of directors, rounded up to the next
whole number, on the Board of Directors of the Company as will give Sub,
subject to compliance with Section 14(f) of the Exchange Act, representation on
the Board of Directors equal to at least that number of directors that equals
the product of the total number of directors on such Board (giving effect to
the directors elected pursuant to this sentence) multiplied by the percentage
that the aggregate number of shares of Company Common Stock held by Sub,
including shares of Company Common Stock accepted for payment pursuant to the
Offer, bears to the number of shares of Company Common Stock then outstanding,
and the Company and its Board of Directors shall, at such time, take any and
all such action needed to cause Sub's designees to be appointed to the
Company's Board of Directors (including to cause directors to resign).
(b) The Company's obligations to appoint designees to the
Board shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder. 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 1.5 and shall include in the Schedule 14D-9 mailed to
shareholders promptly after the commencement of the Offer such information with
respect to the Company and its officers
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and directors as is required under Section 14(f) and Rule 14f-1 to fulfill its
obligations under this Section 1.5.
ARTICLE II
The Merger
SECTION 2.1 The Merger. Upon the terms and subject to the
conditions set forth in this Agreement and in accordance with the North
Carolina Business Corporation Act (the "NCBCA"), Sub shall be merged with and
into the Company at the Effective Time (as hereinafter defined). Following the
Merger, the separate corporate existence of Sub shall cease and the Company
shall continue as the surviving corporation (the "Surviving Corporation") and
shall succeed to and assume all the rights and obligations of the Company in
accordance with the NCBCA. At the election of Parent prior to the commencement
of the Offer, any direct or indirect wholly owned subsidiary (as defined in
Section 9.3) of Parent may be substituted for Sub as a constituent corporation
in the Merger. In such event, the parties agree to execute an appropriate
amendment to this Agreement in order to reflect the foregoing.
SECTION 2.2 Closing. The closing of the Merger will take
place at 10:00 a.m. on a date to be specified by the Parent or Sub, which may
be on, but shall be no later than the third business day after, the day on
which there shall have been satisfaction or waiver of the conditions set forth
in Article VII (the "Closing Date"), at the offices of Skadden, Arps, Slate,
Meagher & Flom, 919 Third Avenue, New York, N.Y. 10022, unless another date or
place is agreed to in writing by the parties hereto.
SECTION 2.3 Effective Time. On the Closing Date, or as soon
as practicable thereafter, the parties shall file articles of merger or other
appropriate documents (in any such case, the "Articles of Merger") executed in
accordance with the relevant provisions of the NCBCA and shall make all other
filings or recordings required under the NCBCA. The Merger shall become
effective at such time as the Articles of Merger are duly filed with the North
Carolina Secretary of State, or at such other later time as Sub and the Company
shall agree
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and specify in the Articles of Merger (the time the Merger becomes effective
being the "Effective Time").
SECTION 2.4 Effects of the Merger. The Merger shall have the
effects set forth in Section 55-11-06 of the NCBCA.
SECTION 2.5 Articles of Incorporation and Bylaws.(a) The
Articles of Incorporation, as amended, of the Company, as in effect immediately
prior to the Effective Time of the Merger, shall become the Articles of
Incorporation of the Surviving Corporation after the Effective Time, and
thereafter may be amended in accordance with its terms and as provided by law
and this Agreement.
(b) The Amended and Restated By-laws of the Company as in
effect on the Effective Time shall become the By-laws of the Surviving
Corporation.
SECTION 2.6 Directors. The directors of Sub immediately
prior to the Effective Time shall become the directors of the Surviving
Corporation, until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be.
SECTION 2.7 Officers. The officers of the Company
immediately prior to the Effective Time shall become the officers of the
Surviving Corporation, until the earlier of their resignation or removal or
until their respective successors are duly elected and qualified, as the case
may be.
ARTICLE III
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 3.1 Effect on Capital Stock. As of the Effective
Time, by virtue of the Merger and without any action on the part of the holder
of any shares of Company Common Stock or any shares of capital stock of Sub:
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(a) Capital Stock of Sub. Each share of the capital
stock of Sub issued and outstanding immediately prior to the Effective Time
shall be converted into and become one fully paid and nonassessable share of
Common Stock, par value $.50 per share, of the Surviving Corporation.
(b) Cancellation of Certain Stock. Each share of Company
Common Stock that is owned by Parent or any subsidiary thereof or by any
subsidiary of the Company shall automatically be cancelled and retired and
shall cease to exist, and no consideration shall be delivered in exchange
therefor.
(c) Conversion of Common Stock. Each issued and
outstanding share of Company Common Stock (other than shares cancelled pursuant
to Section 3.1(b) and Dissenting Shares, as defined in Section 3.1(e), except
to the extent permitted under Section 3.1(e)) shall be converted into the right
to receive from the Surviving Corporation in cash, without interest, the price
paid for each share of Company Common Stock in the Offer (the "Merger
Consideration"). If the Merger Consideration for the Company Common Stock
shall be different from $11.00 per share, the parties hereto agree to execute
an amendment to this Agreement including an amended Plan of Merger reflecting
such different price. As of the Effective Time, all such shares of Company
Common Stock shall no longer be outstanding and shall automatically be canceled
and retired and shall cease to exist, and each holder of a certificate
representing any such shares of Company Common Stock shall cease to have any
rights with respect thereto, except the right to receive the Merger
Consideration, without interest.
(d) Company Preferred Stock. Subject to exercise of
dissenters' rights under Article 13 of the NCBCA, all shares of preferred
stock, par value $1.00 per share, of the Company ("Company Preferred Stock"),
issued and outstanding immediately prior to the Effective Time shall remain
issued and outstanding and unaffected by the Merger.
(e) Shares of Dissenting Holders. Notwithstanding
anything in this Agreement to the contrary, any issued and outstanding shares
of Company Common Stock that are issued and outstanding as of the Effective
Time
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and that are held by a shareholder who has exercised his right (to the extent
such right is available by law) to demand and to receive the fair value of such
shares (the "Dissenting Shares") under Article 13 of the NCBCA shall not be
converted into the right to receive the Merger Consideration unless and until
the holder shall have failed to perfect or shall have effectively withdrawn or
lost his right to dissent from the Merger under the NCBCA to receive such
consideration as may be determined to be due with respect to such Dissenting
Shares pursuant to and subject to the requirements of Article 13 of the NCBCA.
If any such holder shall have so failed to perfect or have effectively
withdrawn or lost such right, such holder's Company Common Stock shall
thereupon be deemed to have been converted into and to have become, as of the
Effective Time, the right to receive the Merger Consideration. The Company
shall give Parent (i) prompt notice of any notice or demands for appraisal or
payment for, shares of Company Common Stock or Company Preferred Stock received
by the Company and (ii) the opportunity to participate in and direct all
negotiations and proceedings with respect to any such demands or notices. The
Company shall not, without the prior written consent of Parent, make any
payment with respect to, or settle, offer to settle or otherwise negotiate, any
such demands.
SECTION 3.2 Exchange of Certificates. (a) Paying Agent.
Prior to the Effective Time, Parent shall designate a bank or trust company
(reasonably acceptable to the Company) to act as paying agent in the Merger
(the "Paying Agent"), and, from time to time on, prior to or after the
Effective Time, Parent shall deposit, or cause the Surviving Corporation to
deposit, with the Paying Agent immediately available funds in amounts and at
the times necessary for the payment of the Merger Consideration upon surrender
of certificates representing Company Common Stock as part of the Merger
pursuant to Section 3.1, it being understood that any and all interest earned
on funds made available to the Paying Agent pursuant to this Agreement shall be
turned over to Parent.
(b) Exchange Procedure. As soon as reasonably
practicable after the Effective Time, the Surviving Corporation shall require
the Paying Agent to mail to each holder of record of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding shares of Company Common Stock (the "Certifi-
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cates") whose shares were converted into the right to receive the Merger
Consideration pursuant to Section 3.1, (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Paying
Agent and shall be in such form and have such other provisions as Parent may
reasonably specify) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for the Merger Consideration. Upon surrender of a
Certificate for cancellation to the Paying Agent or to such other agent or
agents as may be appointed by the Parent, together with such letter of
transmittal, duly executed, and such other documents as may reasonably be
required by the Paying Agent, the holder of such Certificate shall be entitled
to receive in exchange therefor the amount of cash into which the shares of
Company Common Stock theretofore represented by such Certificate shall have
been converted pursuant to Section 3.1, and the Certificate so surrendered
shall forthwith be cancelled. In the event of a transfer of ownership of
Company Common Stock which is not registered in the transfer records of the
Company, payment may be made to a person other than the person in whose name
the Certificate so surrendered is registered, if such Certificate shall be
properly endorsed or otherwise be in proper form for transfer and the person
requesting such payment shall pay any transfer or other taxes required by
reason of the payment to a person other than the registered holder of such
Certificate or establish to the satisfaction of Parent that such tax has been
paid or is not applicable. Until surrendered as contemplated by this Section
3.2, each Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the amount of cash,
without interest, into which the shares of Company Common Stock theretofore
represented by such Certificate shall have been converted pursuant to Section
3.1. No interest will be paid or will accrue on the cash payable upon the
surrender of any Certificate.
(c) No Further Ownership Rights in Company Common Stock.
All cash paid upon the surrender of Certificates in accordance with the terms
of this Article III shall be deemed to have been paid in full satisfaction of
all rights pertaining to the shares of Company Common Stock theretofore
represented by such Certificates, and, from and after the Effective Time, there
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shall be no further registration of transfers on the stock transfer books of
the Surviving Corporation of the shares of Company Common Stock which were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation or the Paying
Agent for any reason, they shall be cancelled and exchanged as provided in this
Article III, except as otherwise provided by law.
(d) No Liability. None of Parent, Sub, the Company or
the Paying Agent shall be liable to any person in respect of any cash delivered
to a public official pursuant to any applicable abandoned property, escheat or
similar law.
ARTICLE IV
Representations and Warranties
SECTION 4.1 Representations and Warranties of the Company.
The Company represents and warrants to Parent and Sub as follows:
(a) Organization, Standing and Corporate Power. Each of
the Company and each of its Significant Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized and has the requisite corporate power and
authority to carry on its business as now being conducted. Each of the Company
and its subsidiaries is duly qualified or licensed to do business and is in
good standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so
qualified or licensed (individually or in the aggregate) would not have a
material adverse effect on the Company. The Company has made available to
Parent complete and correct copies of the Articles of Incorporation, as
amended, and Amended and Restated By-laws of the Company, in each case as
amended to the date of this Agreement, and has delivered the certificates of
incorporation and by-laws or other organizational documents of its Significant
Subsidiaries, in each case as amended to the date of this Agreement. The
respective certificates of incorporation and by-laws or other organizational
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<PAGE> 16
documents of the Significant Subsidiaries of the Company do not contain any
provision limiting or otherwise restricting the ability of the Company to
control such subsidiaries. For purposes of this Agreement, a "Significant
Subsidiary" means any subsidiary of the Company that constitutes a significant
subsidiary within the meaning of Rule 1-02 of Regulation S-X of the SEC.
(b) Subsidiaries. The list of subsidiaries of the
Company filed by the Company with its most recent Report on Form 10-K is a true
and accurate list of all the subsidiaries of the Company which are required to
be set forth therein. All the outstanding shares of capital stock of each
Significant Subsidiary are owned by the Company or by another wholly owned
subsidiary of the Company, free and clear of all liens, except as set forth in
Schedule 4.1(b).
(c) Capital Structure. The authorized capital stock of
the Company consists of 20,000,000 shares of Company Common Stock, par value
$.50 per share, 2,000,000 shares of Company Preferred Stock and 25,000 shares
of preference stock, par value $100.000 per share ("Company Preference Stock").
At the close of business on July 7, 1995, (i) 6,561,672 shares of Company
Common Stock, 22,112 shares of Company Preferred Stock and no shares of
Company Preference Stock were issued and outstanding, (ii) 875,450 shares of
Company Common Stock were reserved for issuance upon exercise of outstanding
Stock Options (as defined in Section 6.4), and (iii) 1,052,505 shares of
Company Common Stock were reserved for issuance in respect of the Company's
6.25% Convertible Subordinated Debentures due 2011 (the "Debentures") issued
pursuant to the Indenture, dated as of April 15, 1986 between the Company and
First Union National Bank, as Trustee (the "Indenture"), $49,994,000 principal
amount of which are currently outstanding. Except as set forth above, as of
the date of this Agreement: (i) no shares of capital stock or other voting
securities of the Company were issued, reserved for issuance or outstanding;
(ii) there were no stock appreciation rights, restricted stock grant or
contingent stock grants and there are no other outstanding contractual rights
to which the Company is a party the value of which is based on the value of
shares of Company Common Stock; (iii) all outstanding shares of capital stock
of the Company are, and all shares which may be issued will be, when issued,
duly authorized,
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validly issued, fully paid and nonassessable and not subject to preemptive
rights; and (iv) there are no bonds, debentures, notes or other indebtedness of
the Company having the right to vote (or convertible into, or exchangeable for,
securities having the right to vote) on any matters on which shareholders of
the Company may vote. Except as set forth above, as of the date of this
Agreement, there are no outstanding securities, options, warrants, calls,
rights, commitments, agreements, arrangements or undertakings of any kind to
which the Company or any of its subsidiaries is a party or by which any of them
is bound obligating the Company or any of its subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of capital
stock or other voting securities of the Company or of any of its subsidiaries
or obligating the Company or any of its subsidiaries to issue, grant, extend or
enter into any such security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking. There are not any outstanding
contractual obligations of the Company or any of its subsidiaries to
repurchase, redeem or otherwise acquire any shares of capital stock of the
Company or any of its subsidiaries.
(d) Authority; Noncontravention. The Company has the
requisite corporate power and authority to enter into this Agreement and,
subject to approval of this Agreement by the holders of a majority of the
outstanding shares of Company Common Stock, to consummate the transactions
contemplated by this Agreement. The execution and delivery of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate action on the part of the Company, subject, in the case of this
Agreement, to approval of this Agreement by the holders of a majority of the
outstanding shares of Company Common Stock. This Agreement has been duly
executed and delivered by the Company and, assuming this Agreement constitutes
the valid and binding obligation of Parent and Sub, constitutes the valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except that (i) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii) the remedy
of specific performance and injunctive relief may be subject to equitable
defenses
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and to the discretion of the court before which any proceeding therefor may be
brought. Except as set forth in Schedule 4.1(d), the execution and delivery of
this Agreement do not, and the consummation of the transactions contemplated by
this Agreement (including the changes in the composition of the Board of
Directors of the Company) and compliance with the provisions of this Agreement
will not, conflict with, or result in any violation of, or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to loss of a
material benefit under, or result in the creation of any lien upon any of the
properties or assets of the Company or any of its subsidiaries under, (i) the
Articles of Incorporation, as amended, or Amended and Restated By-laws of the
Company or the comparable charter or organizational documents of any of its
Significant Subsidiaries, (ii) any loan or credit agreement note, bond,
mortgage, indenture, lease or other agreement, instrument, permit, concession,
franchise or license applicable to the Company or any of its Significant
Subsidiaries or their respective properties or assets (including all agreements
described pursuant to Section 4.1(u)) or (iii) any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the Company or any of
its subsidiaries or their respective properties or assets, other than, in the
case of clauses (ii) or (iii), any such conflicts, violations, defaults, rights
or liens that individually or in the aggregate would not (x) impair in any
material respect the ability of the Company to perform its obligations under
this Agreement or (y) prevent or impede, in any material respect, the
consummation of any of the transactions contemplated by this Agreement. No
consent, approval, order or authorization of, or registration, declaration or
filing with, any Federal, state or local government or any court,
administrative or regulatory agency or commission or other governmental
authority or agency, domestic or foreign (a "Governmental Entity"), is required
by the Company or any of its subsidiaries in connection with the execution and
delivery of this Agreement by the Company or the consummation by the Company of
the transactions contemplated by this Agreement, except for (i) if required,
the filing of a premerger notification and report form by the Company under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act"), (ii) the
filing with the SEC of (x) the Schedule 14D-9, (y) a proxy
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statement relating to any required approval by the Company's shareholders of
this Agreement (as amended or supplemented from time to time, the "Proxy
Statement") and (z) such reports under Section 13(a) of the Exchange Act as may
be required in connection with this Agreement and the transactions contemplated
by this Agreement, (iii) the filing of the Articles of Merger with the North
Carolina Secretary of State and appropriate documents with the relevant
authorities of other states in which the Company is qualified to do business,
(iv) compliance with any applicable requirements relating to approval, or
exemption from approval, of the Voting Trusts, the Offer and the Merger and the
application for temporary authority by the ICC, (v) as may be required by any
applicable state securities or "blue sky" laws, (vi) as may be required by the
New Jersey Industrial Site Recovery Act or similar state environmental laws and
(vii) such other consents, approvals, orders, authorizations, registrations,
declarations and filings the failure of which to be obtained or made would not,
individually or in the aggregate, (x) impair, in any material respect, the
ability of the Company to perform its obligations under this Agreement or (y)
prevent or significantly delay the consummation of the transactions
contemplated by this Agreement.
(e) SEC Documents; Financial Statements. The Company has
filed all required reports, proxy statements, forms, and other documents with
the SEC since January 1, 1993 (the "SEC Documents"). As of their respective
dates, (i) the SEC Documents complied in all material respects with the
requirements of the Securities Act of 1933 (the "Securities Act"), or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such SEC Documents, and (ii) none of the
SEC Documents contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading. The financial statements of the Company included in
the SEC Documents comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with generally accepted
accounting principles (except, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC) applied
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on a consistent basis during the periods involved (except as may be indicated
in the notes thereto) and fairly present the consolidated financial position of
the Company and its consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments). Except as set forth in Schedule 4.1(e) and except as set forth
in the SEC Documents filed and publicly available prior to the date of this
Agreement, and except for liabilities and obligations incurred in the ordinary
course of business consistent with past practice since the date of the most
recent consolidated balance sheet included in the SEC Documents filed and
publicly available prior to the date of this Agreement, neither the Company nor
any of its subsidiaries has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) required by generally
accepted accounting principles to be set forth on a consolidated balance sheet
of the Company and its consolidated subsidiaries or in the notes thereto.
(f) Information Supplied. None of the information
supplied or to be supplied by the Company expressly for inclusion or
incorporation by reference in (i) the Offer Documents or (ii) the proxy
statement to be distributed to the Company's shareholders in connection with
the Merger (the "Proxy Statement"), will, and in the case of the Offer
Documents, at the time the Offer Documents are filed with the SEC and first
published, sent or given to the Company's shareholders, or, in the case of the
Proxy Statement, on the date the Proxy Statement is first mailed to the
Company's shareholders and at the time of the meeting of the Company's
shareholders held to vote on approval and adoption of this Agreement, 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
therein, in light of the circumstances under which they are made, not
misleading or necessary to correct any statement in any earlier communication
with respect to the solicitation of proxies for the Company shareholder meeting
which shall have become false or misleading. The Proxy Statement will comply
as to form in all material respects with the Exchange Act and the rules and
regulations thereunder, except that no representation or warranty is made by
the Company with respect to statements made or incorporated
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by reference therein based on information supplied by Parent or Sub for
inclusion or incorporation by reference therein.
(g) Absence of Certain Changes or Events. Except as set
forth in Schedule 4.1(g), since December 31, 1994, the Company and its
subsidiaries have conducted their respective businesses only in the ordinary
course, and there has not been (i) any material adverse change in the Company,
(ii) any declaration, setting aside or payment of any dividend or other
distribution with respect to its capital stock, (iii) any split, combination or
reclassification of any of its capital stock or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of
or in substitution for shares of its capital stock, (iv) (x) any granting by
the Company or any of its subsidiaries to any officer of the Company or any of
its subsidiaries of any increase in compensation, except in the ordinary course
of business consistent with prior practice, (y) any granting by the Company or
any of its subsidiaries to any such officer of any increase in severance or
termination pay, except as part of a standard employment package to any person
promoted or hired (but not including the five most senior officers), or (z)
except termination arrangements in the ordinary course of business consistent
with past practice with employees other than any executive officer of the
Company, any entry by the Company or any of its subsidiaries into any
employment, severance or termination agreement with any such officer, (v) any
damage, destruction or loss, whether or not covered by insurance, that has or
reasonably could be expected to have a material adverse effect on the Company
or (vi) any change in accounting methods, principles or practices by the
Company materially affecting its assets, liabilities or business, except
insofar as may have been required by a change in generally accepted accounting
principles.
(h) Litigation. Except as set forth in Schedule 4.1(h)
or to the extent reserved for as reflected on the Company's financial
statements for the year ended December 31, 1994 or otherwise fully covered by
insurance, there are (i) no suits, actions or proceeding pending or, to the
knowledge of the Company, threatened against the Company or any of its
subsidiaries, (ii) no complaints, lawsuits or other proceedings pending or, to
the knowledge of the Company, threatened in any forum by
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or on behalf of any present or former employee of the Company or any of its
subsidiaries, any applicant for employment or classes of the foregoing alleging
breach of any express or implied contract of employment, any law or regulation
governing employment or the termination thereof or other discriminatory,
wrongful or tortious conduct in connection with the employment relationship,
and (iii) no judgments, decrees, injunctions or orders of any Governmental
Entity or arbitrator outstanding against the Company that, individually or in
the aggregate, could reasonably be expected to result in money damages in
excess of $100,000 (or in excess of $75,000 in the case of an arbitration) or
have a material adverse effect on the Company.
(i) Absence of Changes in Benefit Plans; SEC Disclosure.
Except as disclosed in Schedule 4.1(i), there has not been any adoption or
amendment by the Company or any of its subsidiaries or any ERISA Affiliate (as
defined in Section 4.1(j) hereof) of any Benefit Plan (as defined in Section
4.1(j) hereof) since December 31, 1994. Except as disclosed in Schedule
4.1(i), neither the Company nor any of its subsidiaries, nor any ERISA
Affiliate has any formal plan or commitment, whether legally binding or not, to
create any additional Benefit Plan or modify or change any existing Benefit
Plan that would affect any employee or terminated employee of the Company, a
subsidiary of the Company or any ERISA Affiliate. All employment, consulting,
severance, termination or indemnification agreements, arrangements or
understandings between the Company or any of its subsidiaries and any current
or former officer or director of the Company or any of its subsidiaries which
are required to be disclosed in the SEC Documents have been disclosed therein.
(j) Employee Benefits; ERISA. (i) Schedule 4.1(j)(i)
contains a true and complete list of each bonus, deferred compensation,
incentive compensation, stock purchase, stock option, severance or termination
pay, hospitalization or other medical, life or other insurance, supplemental
unemployment benefits, profit-sharing, pension, or retirement plan, program,
agreement or arrangement, and each other employee benefit plan, program,
agreement or arrangement, sponsored, maintained or contributed to or required
to be contributed to or by the Company, any of its subsidiaries or by any trade
or
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business, whether or not incorporated (an "ERISA Affiliate"), that together
with the Company or any subsidiary of the Company would be deemed a "single
employer" within the meaning of section 4001 of the Employee Retirement Income
Security Act of 1974, as amended, and the rules and regulations promulgated
thereunder ("ERISA"), for the benefit of any employee or terminated employee of
the Company, its subsidiaries or any ERISA Affiliate, whether formal or
informal and whether legally binding or not (the "Benefit Plans"), except for
Benefit Plans whose aggregate annualized cost to the Company is not in excess
of $50,000. The Company has amended Sections 4 and 6 of the Carolina Freight
Corporation and Subsidiaries 1995 Non-Qualified Stock Option Plan so as not to
be required to issue options thereunder.
(ii) Except as set forth in Schedule 4.1(j), with respect to
each Benefit Plan, the Company has delivered if requested by Parent a true and
complete copy thereof (including all amendments thereto), as well as true and
complete copies of the annual reports, if required under ERISA, with respect
thereto for the last two completed plan years; the actuarial reports, if
required under ERISA, with respect thereto for the last two completed plan
years; the most recent report prepared with respect thereto in accordance with
Statement of Financial Accounting Standards No. 87, Employer's Accounting for
Pensions; the most recent Summary Plan Description, together with each Summary
of Material Modifications, if required under ERISA with respect thereto; if the
Benefit Plan is funded through a trust or any third party funding vehicle, the
trust or other funding agreement (including all amendments thereto) and the
latest financial statements thereof; and the most recent determination letter
received from the Internal Revenue Service with respect to each Benefit Plan
that is intended to be qualified under section 401 of the Internal Revenue Code
of 1986, as from time to time amended (the "Code").
(iii) Except as set forth in Schedule 4.1(j), no liability
under Title IV of ERISA has been incurred by the Company, its subsidiaries or
any ERISA Affiliate since the effective date of ERISA that has not been
satisfied in full, and no condition exists that presents a material risk to the
Company, its subsidiaries or any ERISA Affiliate of incurring a liability under
such Title, other than liability for premiums due the Pension
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Benefit Guaranty Corporation ("PBGC") (which premiums have been paid when due).
The maximum aggregate potential liability for benefits relating to individuals
who were previously covered under the G.I. Trucking Company Employees
Retirement Plan and who were not fully vested when such plan was frozen is no
greater than $600,000.
(iv) The PBGC has not instituted proceedings to terminate any
Benefit Plan and no condition exists that presents a material risk that such
proceedings will be instituted.
(v) Except as set forth in Schedule 4.1(j), with respect to
each Benefit Plan which is subject to Title IV of ERISA, neither (a) 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 nor (b) the "benefit
liabilities" (as defined in section 4001(a)(18) of ERISA) thereunder, exceeded,
as of its latest valuation date, the then current value of the assets of such
plan allocable to such accrued benefits.
(vi) Neither the Company, nor any subsidiary of the Company,
nor any ERISA Affiliate, nor any Benefit Plan, nor any trust created
thereunder, nor any trustee or administrator thereof has engaged in a
transaction in connection with which the Company, any subsidiary of the Company
or any ERISA Affiliate, any Benefit Plan, any such trust, or any trustee or
administrator thereof, or any party dealing with any Benefit Plan or any such
trust could 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.
(vii) Contributions which the Company, any subsidiary of the
Company or an ERISA Affiliate are required to make with respect to each Benefit
Plan (for which contribution deductions are governed by section 404(a) of the
Code) for the plan years of such plans ending with or within the most recent
tax year of the Company, the subsidiary or ERISA Affiliate ended prior to the
date of this Agreement either (A) were made prior to the last day of such tax
year or (B) have been or will be made subsequent to such last day within the
time required by section 404(a)(6) of the Code in order to be deemed to
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have been made on the last day of such tax year; and all contribution amounts
properly accrued through the Closing Date with respect to the current plan year
of each Benefit Plan will be paid by the Company, a subsidiary of the Company
or ERISA Affiliate, as appropriate, on or prior to the Closing Date or will be
properly recorded on the Balance Sheet in accordance with Financial Accounting
Standards Board Statement No. 87; and no Benefit 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 Benefit Plan ended prior to
the date of this Agreement; and all contributions required to be made with
respect thereto (whether pursuant to the terms of any Benefit Plan or
otherwise) on or prior to the date of this Agreement have been timely made.
(viii) With respect to any Benefit Plan that is a
"multiemployer pension plan," as such term is defined in section 3(37) of
ERISA, covering employees of the Company, any subsidiary of the Company or any
ERISA Affiliate, (a) neither the Company nor any subsidiary of the Company nor
any ERISA Affiliate has, since July 1, 1989, made or suffered a "complete
withdrawal" or a "partial withdrawal," as such terms are respectively defined
in sections 4203 and 4205 of ERISA, (b) no event has occurred that presents a
material risk of a partial withdrawal, (c) neither the Company, nor any
subsidiary of the Company nor any ERISA Affiliate has any contingent liability
under section 4204 of ERISA, and (d) to the actual knowledge of the Company, no
such plan is in reorganization within the meaning of section 4241 of ERISA and
no circumstances exist that present a material risk that any such plan will go
into reorganization.
(ix) Each Benefit 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, since July 1, 1989.
(x) Except as set forth in Schedule 4.1(j), each Benefit Plan
which is 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.
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(xi) No Benefit Plan provides benefits, including without
limitation death or medical benefits (whether or not insured), with respect to
current or former employees of the Company, its subsidiaries or any ERISA
Affiliate beyond their retirement or other termination of service (other than
(a) coverage mandated by applicable law, (b) death benefits or retirement
benefits under any "employee pension plan," as that term is defined in section
3(2) of ERISA, (c) deferred compensation benefits accrued as liabilities on the
books of the Company or the ERISA Affiliates or (d) benefits the full cost of
which is borne by the current or former employee (or his beneficiary).
(xii) Except as disclosed in Schedule 4.1(j) or expressly
provided in this Agreement, the consummation of the transactions contemplated
by this Agreement will not (a) entitle any current or former employee or
officer of the Company or any ERISA Affiliate to severance pay, unemployment
compensation or any other payment, (b) accelerate the time of payment or
vesting, or increase the amount of compensation due any such employee or
officer, or (c) result in any prohibited transaction described in section 406
of ERISA or section 4975 of the Code for which an exemption is not available.
(xiii) Except as set forth in Schedule 4.1(j), there are no
pending, threatened or, to the knowledge of the Company or any ERISA Affiliate,
anticipated claims by or on behalf of any Benefit Plan, by any employee or
beneficiary covered under any such Benefit Plan, or otherwise involving any
such Benefit Plan (other than routine claims for benefits).
(xiv) No Benefit Plan of the Company or its subsidiaries or
other arrangement authorizes grants of either stock appreciation rights or
restricted stock of the Company and there are no outstanding stock appreciation
rights or restricted stock of the Company.
(xv) Each Benefit Plan that is not covered by ERISA
pursuant to Section 4(b)(4) of ERISA (hereinafter a "Foreign Benefit Plan") is
in compliance in all material respects with all requirements of law applicable
thereto and the respective requirements of the governing documents of such
plan. Neither the Company nor any subsidiary or ERISA Affiliate has incurred
any liability with
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<PAGE> 27
respect to a Foreign Benefit Plan (other than for contributions not yet due)
that, when aggregated with other such liabilities, would result in a material
liability to the Company or any of its subsidiaries or ERISA Affiliates, which
liability has not been satisfied in full as of the date hereof. To the
knowledge of the Company, no condition exists and no event has occurred with
respect to any Foreign Benefit Plan that presents a risk that the Company or
any of its subsidiaries or ERISA Affiliates will incur a material liability
with respect to such plan.
(k) Taxes. (i) Each of the Company and each of its
subsidiaries has filed all Federal, and all material state, local and foreign
income tax returns and all other material tax returns and reports required to
be filed by it. To the knowledge of the Company, all such returns are complete
and correct in all material respects. To the knowledge of the Company, each of
the Company and each of its subsidiaries has paid (or the Company has paid on
its subsidiaries' behalf) all taxes shown as due on such returns and all
material taxes for which no return was required to be filed, and the most
recent financial statements contained in the SEC Documents reflect reserves in
accordance with generally accepted accounting principles for all taxes payable
by the Company and its subsidiaries for all taxable periods and portions
thereof through the date of such financial statements.
(ii) Except as set forth in Schedule 4.1(k), no deficiencies
for any taxes have been threatened, proposed, asserted or assessed against the
Company or any of its subsidiaries, which are not reserved for. The Federal
income tax returns of the Company and each of its subsidiaries consolidated in
such returns have been examined by and settled with the Internal Revenue
Service for all years through December 31, 1988 and all returns thereafter are
open and subject to examination.
(iii) As used in this Agreement, "taxes" shall include all
Federal, state, local and foreign income, payroll, franchise, property, sales,
excise and any and all other taxes, tariffs, duties, fees, assessments or
governmental charges of any nature whatsoever, including interest, additions
and penalties.
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(l) No Excess Parachute Payments. To the knowledge of
the Company, no amounts payable as a result of the transactions contemplated by
this Agreement under the Benefit Plans or any other plans or arrangements will
fail to be deductible for Federal income tax purposes by virtue of section 280G
of the Code.
(m) Compliance with Applicable Laws. Except as set forth
in Schedule 4.1(m), (i) to the knowledge of the Company, the Company and each
of its subsidiaries have in the past five (5) years complied and are presently
complying in all material respects with all applicable laws (whether statutory
or otherwise), rules, regulations, orders, ordinances, judgments or decrees of
all governmental authorities (federal, state, local or otherwise)
(collectively, "Laws"), including, but not limited to, the Federal Occupational
Safety and Health Act and all Laws relating to the safe conduct of business and
environmental protection and conservation, the Civil Rights Act of 1964 and
Executive Order 11246 concerning equal employment opportunity obligations of
federal contractors and any applicable health, sanitation, fire, safety, labor,
zoning and building laws and ordinances, and neither the Company nor any of its
subsidiaries has received notification of any asserted present or past failure
to so comply, except such non-compliance that has not and will not prevent the
Company from carrying on its business substantially as now conducted or might
reasonably be expected to result in the payment of more than $150,000 in the
aggregate.
(ii) To the knowledge of the Company, each of the Company and
its subsidiaries has in effect all Federal, state, local and foreign
governmental approvals, authorizations, certificates, filings, franchises,
licenses, notices, permits and rights, including all authorizations under
Environmental Laws and the Interstate Commerce Act ("Permits"), necessary for
it to own, lease or operate its properties and assets and to carry on its
business substantially as now conducted, there are no appeals nor any other
actions pending to revoke any such Permits, and there has occurred no material
default or violation under any such Permits. The Company has listed such
Permits under the Interstate Commerce Act, Environmental Laws and involving
intra-state authorization to do business as a motor carrier on Schedule
4.1(m)(ii).
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(iii) To the knowledge of the Company, each of the Company
and its subsidiaries is, and, within the preceding five years, has been, and
each of the Company's former subsidiaries, while a subsidiary of the Company,
was, within the preceding five years, in compliance in all material respects
with all applicable Environmental Laws, except such non-compliance that has not
and will not prevent the Company from carrying on its business substantially as
now conducted or might reasonably be expected to result in the payment of more
than $75,000 in the aggregate. To the knowledge of the Company, as of the date
of this Agreement, there are no circumstances or conditions that may prevent or
interfere with compliance by the Company or its subsidiaries in the future with
Environmental Laws (or Permits issued thereunder) in effect as of the date of
this Agreement, except such circumstances or conditions that have not and will
not prevent the Company from carrying on its business substantially as now
conducted or might reasonably be expected to result in the payment of more than
$75,000 in the aggregate.
(iv) Except as set forth on Schedule 4.1(m)(iv), neither the
Company nor any subsidiary of the Company has received any written claim,
demand, notice, complaint, court order, administrative order or request for
information from any Governmental Entity or private party, alleging violation
of, or asserting any noncompliance with or liability under or potential
liability under, any Environmental Laws, except for matters which are no longer
threatened or pending and for which the Company or its subsidiaries are not
subject to further requirements pursuant to an administrative or court order,
judgment, or a settlement agreement.
(v) To the knowledge of the Company, during the period of
ownership or operation by the Company and its subsidiaries of any of their
respective current or previously owned or leased properties, there have been no
Releases of Hazardous Material in, on, under or affecting such properties and
none of the Company or its subsidiaries have disposed of any Hazardous Material
or any other substance in a manner that has led, or could reasonably be
anticipated to lead to a Release except in each case for those which
individually or in the aggregate are not reasonably likely to have a cost,
after the date hereof, to the Company in excess of $75,000. Prior to the
period
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<PAGE> 30
of ownership or operation by the Company and its subsidiaries of any of their
respective current or previously owned or leased properties, to the knowledge
of the Company, no Hazardous Material was generated, treated, stored, disposed
of, used, handled or manufactured at, or transported shipped or disposed of
from, such current or previously owned or leased properties, and there were no
Releases of Hazardous Material in, on, under or affecting any such property,
except in each case for those which individually or in the aggregate would not
be reasonably likely to have a cost, after the date hereof, to the Company in
excess of $75,000.
(vi) Schedule 4.1(m)(vi) identifies all environmental
audits, assessments or studies within the possession of the Company or any
subsidiary of the Company with respect to the facilities or real property
currently or previously owned, leased or operated by the Company or any
subsidiary of the Company, or to facilities or real property owned or leased by
former subsidiaries of the Company (when such companies were subsidiaries of
the Company), which were conducted within the last five years. The Company has
furnished to Parent complete and correct copies of all such audits, assessments
and studies.
(vii) Except for leases entered into in the ordinary course of
business, as to which no notice of a claim for indemnity or reimbursement has
been received by the Company, and except as set forth on Schedule 4.1(m)(vii),
the Company has no knowledge that either the Company or any of its subsidiaries
has entered into any agreement that may require it to pay to, reimburse,
guarantee, pledge, defend, indemnify, or hold harmless any person for or
against any Environmental Liabilities and Costs.
(viii) Neither the Company nor any of its subsidiaries has
transported "hazardous waste", as that term is defined in the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., analogous state
laws, or the regulations promulgated thereunder such that the Company or any of
its subsidiaries would be required to obtain a permit under said laws for such
transportation, except for the transportation of processed oil used by the
Company in the ordinary course of its business.
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(ix) Without limiting any of the foregoing, the Company
has listed, on Schedule 4.1(m)(ix), all of the underground storage tanks
currently owned or operated by the Company or any of its subsidiaries, or tanks
that were removed or closed in place since 1989. Said schedule shall include
(A) the size of each tank; (B) the type of material last stored in each such
tank; (C) whether such tank is currently in operation or has been removed or
closed in place. For certain of the tanks on Schedule 4.1(m)(ix) that are
currently in operation or existence, the Company has provided information
regarding whether each such tank has been upgraded to meet all currently
applicable technical and financial standards (including financial assurance)
promulgated pursuant to federal, state or local law, or standards that have
been promulgated but will not be applicable to such tanks until some date in
the future (describing the required actions needed to bring such tanks into
compliance with any such current or future standard).
(n) State Takeover Statutes; By-Law Provisions. The
Board of Directors of the Company has approved the Offer, the Merger and this
Agreement and the provisions of Article II, Sections 13 and 14 of the Company's
Amended and Restated By-Laws are sufficient to render inapplicable to the
Offer, the Merger and this Agreement and the other transactions contemplated by
this Agreement, the provisions of Section 55-9-01 et seq. of the NCBCA, and the
provisions of Section 55-9A-01 et seq. of the NCBCA.
(o) Voting Requirements. The affirmative vote of the
holders of a majority of all the shares of Company Common Stock entitled to
vote approving this Agreement is the only vote of the holders of any class or
series of the Company's capital stock necessary to approve this Agreement and
the transactions contemplated by this Agreement.
(p) Brokers. No broker, investment banker, financial
advisor or other person, other than Donaldson Lufkin & Jenrette Securities
Corporation ("DLJ"), the fees and expenses of which will be paid by the
Company, is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the
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<PAGE> 32
Company. The Company has provided Parent true and correct copies of all
agreements between the Company and DLJ.
(q) Opinion of Financial Advisor. The Company has
received an opinion of Donaldson Lufkin & Jenrette, to the effect that, as of
the date of this Agreement, the consideration to be received in the Offer and
the Merger by the Company's shareholders is fair to the Company's shareholders
from a financial point of view, and a complete and correct signed copy of such
opinion has been, or promptly upon receipt thereof will be, delivered to
Parent.
(r) Trademarks, etc. The material patents, trademarks
(registered or unregistered), trade names, service marks and copyrights and
applications therefor owned, used or filed by or licensed to the Company and
its subsidiaries (collectively, "Intellectual Property Rights") are sufficient
to allow each of the Company and each of its Significant Subsidiaries to
conduct, and continue to conduct, its business as currently conducted in all
material respects. To the knowledge of the Company, each of the Company and
each of its Significant Subsidiaries owns or has sufficient unrestricted right
to use the Intellectual Property Rights in order to allow it to conduct, and
continue to conduct, its business as currently conducted in all material
respects, and the consummation of the transactions contemplated hereby will not
alter or impair such ability in any respect. To the knowledge of the Company,
neither the Company nor any of its Significant Subsidiaries has received any
written notice from any other person pertaining to or challenging the right of
the Company or any of its Significant Subsidiaries to use any of the
Intellectual Property Rights. To the knowledge of the Company, no claims are
pending by any person with respect to the ownership, validity, enforceability
or use of any such Intellectual Property Rights challenging or questioning the
validity or effectiveness of any of the foregoing. To the knowledge of the
Company, neither the Company nor any of its Significant Subsidiaries has made
any claim of a violation or infringement by others of its rights to or in
connection with the Intellectual Property Rights.
(s) Title to Properties. Each of the Company and each of
its Significant Subsidiaries has sufficiently
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good and valid title to, or an adequate leasehold interest in, its material
tangible properties and assets in order to allow it to conduct, and continue to
conduct, its business as currently conducted in all material respects. Except
as set forth in Schedule 4.1(s), such material tangible assets and properties
are sufficiently free of liens to allow each of the Company and each of its
subsidiaries to conduct, and continue to conduct, its business as currently
conducted in all material respects and, to the knowledge of the Company, the
consummation of the transactions contemplated by this Agreement will not alter
or impair such ability in any material respect. To the knowledge of the
Company, each of the Company and each of its subsidiaries enjoys peaceful and
undisturbed possession under all material leases, except for such breaches of
the right to peaceful and undisturbed possession that do not materially
interfere with the ability of the Company and its subsidiaries to conduct its
business as currently conducted. Schedule 4.1(s) sets forth a complete list of
all material real property and material interests in real property owned in fee
by the Company or one of its subsidiaries and sets forth all material real
property and interests in real property leased by the Company or one of its
subsidiaries as of the date hereof.
(t) Insurance. To the knowledge of the Company, the
Company and its Significant Subsidiaries have obtained and maintained in full
force and effect insurance with responsible and reputable insurance companies
or associations in such amounts, on such terms and covering such risks,
including fire and other risks insured against by extended coverage, as is
reasonably prudent, and each has maintained in full force and effect public
liability insurance, insurance against claims for personal injury or death or
property damage occurring in connection with any activities of the Company or
its Significant Subsidiaries or any properties owned, occupied or controlled by
the Company or its Significant Subsidiaries, in such amount as reasonably
deemed necessary by the Company or its Significant Subsidiaries.
(u) Contracts; Debt Instruments. Except as set forth in
Schedule 4.1(u), there are no (i) agreements of the Company or any of its
subsidiaries containing an unexpired covenant not to compete or similar
restriction applying to the Company or any of its subsidiaries, (ii) interest
rate, currency or commodity hedging, swap
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or similar derivative transactions to which the Company is a party or (iii)
other contracts or amendments thereto that would be required to be filed as an
exhibit to a Form 10-K filed by the Company with the SEC as of the date of this
Agreement. To the knowledge of the Company, each of the agreements listed in
Schedule 4.1(u) is a valid and binding obligation of the Company or its
subsidiary, as the case may be, and, to the Company's knowledge, of each other
party thereto, and each such agreement is in full force and effect and is
enforceable by the Company or its subsidiary in accordance with its terms,
except that (i) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) the remedy of specific
performance and injunctive relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be brought
and except to the extent any covenant not to compete contained therein may be
unenforceable. Except to the extent set forth in Schedule 4.1(u), to the
knowledge of the Company, there are no existing defaults (or circumstances or
events that, with the giving of notice or lapse of time or both would become
defaults) of the Company or any of its subsidiaries (or, to the knowledge of
the Company, any other party thereto) under any of the agreements set forth in
Schedule 4.1(u).
(v) Labor Relations. Except to the extent set forth in
Schedule 4.1(v), (i) to the knowledge of the Company, the Company and each of
its subsidiaries is, and has at all times been, in material compliance with all
applicable laws respecting employment and employment practices, terms and
conditions of employment, wages, hours of work and occupational safety and
health, and are not engaged in any unfair labor practices as defined in the
National Labor Relations Act or other applicable law, ordinance or regulation,
except where the failure to comply would not be reasonably likely to cause a
material adverse effect; (ii) 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
during the past three years there has not been any such action; (iii) no union
claims to represent the employees of the Company or any of its subsidiaries;
(iv) the Company or any of its subsidiaries is not a party to or bound by any
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collective bargaining or similar agreement with any labor organization, or work
rules or practices agreed to with any labor organization or employee
association applicable to employees of the Company or any of its subsidiaries;
(v) none of the employees of the Company or any of its subsidiaries is
represented by any labor organization and, to the knowledge of the Company,
there is no current union organizing activities among the employees of the
Company or any of its subsidiaries, nor does any question concerning
representation exist concerning such employees; (vi) there are no written
personnel policies, rules or procedures applicable to employees of the Company
or any of its subsidiaries; (vii) 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
or any similar state or foreign agency; (viii) there is no grievance arising
out of any collective bargaining agreement or other grievance procedure against
the Company or any of its subsidiaries, except such grievances that have not
and will not prevent the Company from carrying on its business substantially as
now conducted or might reasonably be expected to result in the payment of more
than $75,000 in the aggregate; (ix) no charges with respect to or relating to
the Company or any of its subsidiaries are pending before the Equal Employment
Opportunity Commission or any other agency responsible for the prevention of
unlawful employment practices, except such charges that have not and will not
prevent the Company from carrying on its business substantially as now
conducted or might reasonably be expected to result in the payment of more than
$75,000 in the aggregate; (x) neither of the Company or any of its subsidiaries
has received notice of the intent of any federal, state, local or foreign
agency responsible for the enforcement of labor or employment laws to conduct
an investigation; and (xi) there are no employment contracts or severance
agreement with any employees of the Company or any of its subsidiaries, except
as set forth in Schedule 4.1(j).
(w) Compliance with WARN Act. Since the enactment of the
Worker Adjustment and Retraining Notification Act of 1988 (the "WARN Act"),
neither of the Company or any of its subsidiaries has effectuated (i) a "plant
closing" (as defined in the WARN Act) affecting any site of employment or one
or more facilities or
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operating units within any site of employment or facility of the Company or any
of its subsidiaries or (ii) a "mass layoff" (as defined in the WARN Act)
affecting any site of employment or facility of the Company or any of its
subsidiaries; nor has the Company or any of its subsidiaries been affected by
any transaction or engaged in layoffs or employment terminations sufficient in
number to trigger application of any similar state or local law, except as set
forth in Schedule 4.1(w) for the period since June 1, 1993 to the extent such
plant closings and mass layoffs were effectuated in compliance with the WARN
Act. None of the employees of the Company or any of its subsidiaries has
suffered an "employment loss" (as defined in the WARN Act) since June 1, 1993.
SECTION 4.2 Representations and Warranties of Parent and Sub.
Parent and Sub represent and warrant to the Company as follows:
(a) Organization, Standing and Corporate Power. Each of
Parent and Sub is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which each is incorporated and
has the requisite corporate power and authority to carry on its business as now
being conducted. Each of Parent and Sub is duly qualified or licensed to do
business and is in good standing in each jurisdiction in which the nature of
its business or the ownership or leasing of its properties makes such
qualification or licensing necessary, other than in such jurisdictions where
the failure to be so qualified or licensed (individually or in the aggregate)
would not have a material adverse effect on Parent.
(b) Authority; Noncontravention. Parent and Sub have the
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement by Parent and Sub and the consummation by Parent and
Sub of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate action on the part of Parent and Sub, as
applicable. This Agreement has been duly executed and delivered by Parent and
Sub and, assuming this Agreement constitutes the valid and binding obligation
of the Company, constitutes a valid and binding obligation of each such party,
enforceable against each such party
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in accordance with its terms, except that (i) such enforcement may be subject
to bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally and (ii) the
remedy of specific performance and injunctive relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. The execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated by this
Agreement will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any obligation or to loss
of a material benefit under, or result in the creation of any lien upon any of
the properties or assets of Parent under, (i) the certificate of incorporation
or by-laws of Parent or Sub, (ii) any loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, instrument, permit, concession,
franchise or license applicable to Parent or (iii) any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Parent or Sub or
their respective properties or assets, other than, in the case of clauses (ii)
or (iii), any such conflicts, violations, defaults, rights or liens that
individually or in the aggregate would not (x) impair in any material respect
the ability of Parent and Sub to perform their respective obligations under
this Agreement or (y) prevent or impede the consummation of any of the
transactions contemplated by this Agreement. No consent, approval, order or
authorization of, or registration, declaration or filing with, any Governmental
Entity is required by Parent or Sub in connection with the execution and
delivery of this Agreement or the consummation by Parent or Sub, as the case
may be, of any of the transactions contemplated by this Agreement, except for
(i) if required, the filing of a premerger notification and report form under
the HSR Act, (ii) the filing with the SEC of (x) the Offer Documents and (y)
such reports under the Exchange Act as may be required in connection with this
Agreement and the transactions contemplated by this Agreement, (iii) the filing
of the Articles of Merger with the North Carolina Secretary of State and
appropriate documents with the relevant authorities of other states in which
the Company is qualified to do business, (iv) compliance with any applicable
requirements relating to approval, or exemption from
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approval, of the Voting Trusts, the Offer and the Merger and the application
for temporary authority by the ICC, (v) as may be required by an applicable
state securities or "blue sky" laws, (vi) as may be required by the New Jersey
Industrial Site Recovery Act or similar state environmental laws and (vii) such
other consents, approvals, orders, authorizations, registrations, declarations
and filings the failure of which to be obtained or made would not, individually
or in the aggregate, (x) impair, in any material respect, the ability of Parent
to perform its obligations under this Agreement or (y) prevent or significantly
delay the consummation of the transactions contemplated by this Agreement.
(c) Information Supplied. None of the information
supplied or to be supplied by Parent or Sub expressly for inclusion or
incorporation by reference in the Schedule 14D-9 or the Proxy Statement will,
in the case of the Schedule 14D-9, at the time the Schedule 14D-9 is filed with
the SEC and first published, sent or given to the Company's shareholders or, in
the case of the Proxy Statement, on the date the Proxy Statement is first
mailed to the Company's shareholders and at the time of the meeting of the
Company's shareholders held to vote on approval and adoption of this Agreement,
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
therein, in light of the circumstances under which they are made, not
misleading.
(d) Brokers. No broker, investment banker, financial
advisor or other person, other than Morgan Stanley & Co. Incorporated, the fees
and expenses of which will be paid by Parent, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Parent or Sub.
(e) Financing. Parent has a bank commitment to provide
the financing for and pursuant to such commitment shall provide Sub with the
funds necessary to consummate the Offer and the Merger and the transactions
contemplated thereby in accordance with the terms hereof and thereof (the
"Financing Commitment"). A copy of the bank commitment letter has been made
available to the
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Company. Parent has accepted the Financing Commitment pursuant to its terms and
has paid all fees due thereunder as of the date of this Agreement.
(f) Interim Operations of Sub. Sub was formed solely for
the purpose of engaging in the transactions contemplated hereby and has not
engaged in any business activities or conducted any operations other than in
connection with the transactions contemplated hereby.
ARTICLE V
Covenants Relating to Conduct of Business
SECTION 5.1 (a) Conduct of Business. Until the acquisition
of the Shares pursuant to the Offer, except as specifically contemplated by
this Agreement or in accordance with the temporary authority granted by the ICC
to Parent or Sub, the Company shall and shall cause its subsidiaries to carry
on their respective businesses in the ordinary course and use all reasonable
efforts consistent with good business judgment to preserve intact their current
business organizations, keep available the services of their current officers
and key employees and preserve their relationships consistent with past
practice with desirable customers, suppliers, licensors, licensees,
distributors and others having business dealings with them to the end that
their goodwill and ongoing businesses shall be unimpaired in all material
respects at the Effective Time. Without limiting the generality of the
foregoing, and except as specifically contemplated by this Agreement, prior to
the Effective Time the Company shall not, and shall not permit any of its
subsidiaries to (without Parent's prior written consent, which consent may not
be unreasonably withheld):
(i) (A) declare, set aside or pay any dividends on,
or make any other distributions in respect of, any of its capital
stock, other than the dividend on the Company Preferred Stock to be
paid in July 1995 and other than dividends and distributions by any
direct or indirect wholly owned subsidiary of the Company to its
parent, (B) split, combine or reclassify any of its capital stock or
issue or authorize the issuance of any other securities in respect of,
in lieu of or in substitution
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for shares of its capital stock or (C) purchase, redeem or otherwise
acquire any shares of capital stock of the Company or any of its
subsidiaries or any other securities thereof or any rights, warrants
or options to acquire any such shares or other securities (except for
the acquisition of shares from holders of stock options in full or
partial payment of the exercise price payable by such holder upon
exercise of stock options outstanding on the date of this Agreement);
(ii) issue, deliver, sell, pledge or otherwise
encumber or amend any shares of its capital stock, any other voting
securities or any securities convertible into, or any rights, warrants
or options to acquire, any such shares, voting securities or
convertible securities (other than the issuance of Company Common
Stock upon the exercise of employee stock options outstanding on the
date of this Agreement in accordance with their present terms);
(iii) amend its Articles of Incorporation, as
amended, Amended and Restated By-laws or other comparable charter or
organizational documents;
(iv) acquire or agree to acquire (A) by merging or
consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any corporation,
partnership, joint venture, association or other business organization
or division thereof or (B) any assets, including real estate, except
(x) purchases of inventory, furnishings, equipment and fuel in the
ordinary course of business consistent with past practice or (y)
expenditures consistent with the Company's current capital budget
previously provided to Parent as set forth on Schedule 5.1(a)(iv);
(v) sell, lease, license, mortgage or otherwise
encumber or subject to any lien or otherwise dispose of any of its
properties or assets, except obsolete equipment that is traded in or
sold, in each case pursuant to the Commitment Letter, dated April 22,
1994, between Carolina Freight Carriers Corporation and Midway Ford
Truck Center
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Inc. and the Truck Broker Agreement dated May 16, 1995 between
Carolina Freight Carriers Corporation and Boulevard Truck Sales and
Service.
(vi) except as set forth in Schedule 5.1(a)(vi)
other than ordinary course working capital borrowings consistent with
past practice incur any indebtedness for borrowed money or guarantee
any such indebtedness of another person, issue or sell any debt
securities or warrants or other rights to acquire any debt securities
of the Company or any of its subsidiaries, guarantee any debt
securities of another person, enter into any "keep well" or other
agreement to maintain any financial statement condition of another
person or enter into any arrangement having the economic effect of any
of the foregoing or make any loans, advances or capital contributions
to, or investments in, any other person (other than routine advances
after the date hereof to employees not to exceed $50,000 in the
aggregate and consistent with past practice);
(vii) make any material tax election or settle or
compromise any material tax liability;
(viii) pay, discharge, settle or satisfy any
material claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than the
payment, discharge, settlement or satisfaction, in the ordinary course
of business consistent with past practice or in accordance with their
terms, of liabilities reflected or reserved against in the most recent
consolidated financial statements (or the notes thereto) of the
Company included in the SEC Documents filed and publicly available
prior to the date of this Agreement or incurred in the ordinary course
of business consistent with past practice, or, except in the ordinary
course of business consistent with past practice, waive the benefits
of, or agree to modify in any manner, any confidentiality, standstill
or similar agreement to which the Company or any of its subsidiaries
is a party;
(ix) except as required to comply with applicable
law, disclosed in Schedule 4.1(i) or expressly provided in this
Agreement, (A) adopt,
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enter into, terminate or amend any Benefit Plan or other arrangement
for the current or future benefit or welfare of any director, officer
or current or former employee, except to the extent necessary to
coordinate any such benefit plans with the terms of this Agreement,
(B) increase in any manner the compensation or fringe benefits of, or
pay any bonus to, any director, officer or employee (except for normal
increases or bonuses in the ordinary course of business consistent
with past practice to employees other than directors, officers or
senior management personnel and that, in the aggregate, do not result
in a significant increase in benefits or compensation expense to the
Company and its subsidiaries relative to the level in effect prior to
such action (but in no event shall the aggregate amount of all such
increases exceed 3% of the aggregate annualized compensation expense
of the Company and its subsidiaries reported in the most recent
audited financial statements of the Company included in the SEC
Documents)), (C) pay any benefit not provided for under any Benefit
Plan, (D) grant any awards under any bonus, incentive, performance or
other compensation plan or arrangement or Benefit Plan (including the
grant of stock options, stock appreciation rights, stock based or
stock related awards, performance units or restricted stock, or the
removal of existing restrictions in any Benefit Plans or agreements or
awards made thereunder) or (E) take any action to fund or in any other
way secure the payment of compensation or benefits under any employee
plan, agreement, contract or arrangement or Benefit Plan.
(x) make any new capital expenditure or
expenditures, other than capital expenditures not to exceed, in the
aggregate, the amounts provided for capital expenditures (x) in
respect of projects approved prior to the date of this Agreement and
(y) in the capital budget of the Company provided to Parent, except as
set forth in Section 5.1(a)(iv);
(xi) except in the ordinary course of business and
except as otherwise permitted by this Agreement, modify, amend or
terminate any contract or agreement set forth in the SEC Documents or
in Schedule 4.1(u) to which the Company or any subsid-
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iary is a party or waive, release or assign any material rights or
claims; or
(xii) authorize any of, or commit or agree to take
any of, the foregoing actions except as otherwise permitted by this
Agreement.
(b) Other Actions. The Company shall not, and shall not
permit any of its subsidiaries to, take any action that would result in (i) any
of its representations and warranties set forth in this Agreement that are
qualified as to materiality becoming untrue, (ii) any of such representations
and warranties that are not so qualified becoming untrue in any material
respect or (iii) any of the conditions to the Offer set forth in Exhibit A not
being satisfied (subject to the Company's right to take action specifically
permitted by Section 5.2).
SECTION 5.2 No Solicitation. (a) The Company shall not, nor
shall it permit any of its subsidiaries to, nor shall it authorize (and shall
use its best efforts not to permit) any officer, director or employee of, or
any investment banker, attorney or other advisor or representative of, the
Company or any of its subsidiaries to, (i) solicit or initiate, or knowingly
encourage the submission of, any takeover proposal or (ii) participate in any
discussions or negotiations regarding, or furnish to any person any information
with respect to, or take any other action to knowingly facilitate the making of
any proposal that constitutes, or may reasonably be expected to lead to, any
takeover proposal; provided, however, that, prior to the acceptance for payment
of shares of Company Common Stock pursuant to the Offer, if in the opinion of
the Board of Directors, after consultation with outside legal counsel to the
Company, such failure to act would likely be inconsistent with its fiduciary
duties to the Company's shareholders under applicable law, the Company may, in
response to an unsolicited takeover proposal, and subject to compliance with
Section 5.2(c), (A) furnish information with respect to the Company to any
person pursuant to a confidentiality agreement and (B) participate in
negotiations regarding such takeover proposal. Without limiting the foregoing,
it is understood that any violation of the restrictions set forth in the
preceding sentence by any director or executive officer of the Company or any
of its subsid-
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iaries, whether or not such person is purporting to act on behalf of the
Company or any of its subsidiaries or otherwise, shall be deemed to be a breach
of this Section 5.2(a) by the Company. For purposes of this Agreement,
"takeover proposal" means any proposal or offer from any person relating to any
direct or indirect acquisition or purchase of all or a substantial part of the
assets of the Company or any of its subsidiaries or of over 15% of any class of
equity securities of the Company or any of its subsidiaries or any tender offer
or exchange offer that if consummated would result in any person beneficially
owning shares of any class of equity securities of the Company or any of its
subsidiaries, or any merger, consolidation, business combination, sale of
substantially all of the assets, recapitalization, liquidation, dissolution or
similar transaction involving the Company or any of its subsidiaries other than
the transactions contemplated by this Agreement, or any other transaction the
consummation of which would reasonably be expected to impede, interfere with,
prevent or materially delay the Offer or the Merger or which would reasonably
be expected to dilute materially the benefits to Parent of the transactions
contemplated hereby.
(b) Except as set forth in this Section 5.2(b), neither
the Board of Directors of the Company nor any committee thereof shall (i)
withdraw or modify, or propose to withdraw or modify, in a manner adverse to
Parent or Sub, the approval or recommendation by the Board of Directors or any
such committee of the Offer, this Agreement or the Merger, (ii) approve or
recommend, or propose to approve or recommend, any takeover proposal or (iii)
enter into any agreement with respect to any takeover proposal.
Notwithstanding the foregoing, in the event prior to the time of acceptance for
payment of shares of Company Common Stock in the Offer if in the opinion of the
Board of Directors, after consultation with outside legal counsel to the
Company, failure to do so would likely be inconsistent with its fiduciary
duties to the Company's shareholders under applicable law, the Board of
Directors may (subject to the terms of this and the following sentences)
withdraw or modify its approval or recommendation of the Offer, this Agreement
or the Merger, approve or recommend a competitive proposal, or enter into an
agreement with respect to a competitive proposal, in each case at any time
after midnight on the next business day following Parent's receipt of written
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notice (a "Notice of Competitive Proposal") advising Parent that the Board of
Directors has received a competitive proposal, specifying the material terms
and conditions of such competitive proposal and identifying the person making
such competitive proposal; provided that the Company shall not enter into an
agreement with respect to a competitive proposal unless the Company shall have
furnished Parent with a Notice of Competitive Proposal within the time frame
provided in the immediately preceding clause in advance of any date that it
intends to enter into such agreement. In addition, if the Company proposes to
enter into an agreement with respect to any takeover proposal, it shall
concurrently with entering into such agreement pay, or cause to be paid, to
Parent the Expenses (as defined in Section 6.6(b)) and the Termination Fee (as
defined in Section 6.6(b)). For purposes of this Agreement, a "competitive
proposal" means any bona fide takeover proposal to acquire, directly or
indirectly, for consideration consisting of cash and/or securities, more than
50% of the shares of Company Common Stock then outstanding or all or a
substantial part of the assets of the Company and otherwise on terms which the
Company's Board of Directors reasonably determined in good faith (after
consultation with its financial advisors) are more favorable to all of the
Company's shareholders from a financial point of view than the Offer and the
Merger (taking into account any improvements to the Offer and the Merger
proposed in writing by Parent).
(c) In addition to the obligations of the Company set
forth in paragraph (b) (i) the Company shall advise Parent of any request for
information or of any takeover proposal, or any proposal with respect to any
takeover proposal, the material terms and conditions of such request or
takeover proposal, and the identity of the person making any such takeover
proposal or inquiry, and (ii) the Company will keep Parent fully informed of
the status and details (including amendments or proposed amendments) of any
such request, takeover proposal or inquiry.
SECTION 5.3 Approvals. Parent and the Company shall, and
each shall cause each of its subsidiaries to, take all such actions as are
necessary to (i) cooperate with one another to prepare and present to the ICC,
relevant labor unions and appropriate change of operations
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committees under any existing collective bargaining agreements to which the
Company is a party as soon as practicable all filings and other presentations
in connection with seeking any ICC, relevant labor unions or change of
operations committees approval, exemption or other authorization necessary to
consummate the transactions contemplated by this Agreement, including without
limitation all information regarding the Company pertinent to the application
for temporary authority, (ii) prosecute such filings and other presentations
with diligence, (iii) diligently oppose any objections to, appeals or petitions
to reconsider or to reopen any such ICC, relevant labor unions or change of
operations committees approval or exemptions by persons not party to this
Agreement, and (iv) take all such further action, including appeal of any
adverse decision, as reasonably may be necessary to obtain a final order or
orders of the ICC, or approval of the relevant labor unions or appropriate
change of operations committees, in each case approving such transactions
consistent with this Agreement.
SECTION 5.4 Voting Trusts. Promptly upon the acquisition of
Company Common Stock pursuant to the Offer, the Company shall cause the shares
of the ICC Subsidiaries to be deposited in the Voting Trusts.
SECTION 5.5 Temporary Authority. In the event the ICC grants
Parent or Sub temporary authority pursuant to 49 U.S.C. 11349, the Company
agrees, following the purchase of Company Common Stock pursuant to the Offer,
to allow Parent and Sub to manage and operate the properties of the Company
consistent with such temporary authority and shall not interfere with such
temporary authority.
SECTION 5.6 Supplemental Indenture. In connection with the
Merger, the Company shall execute a supplemental indenture, provide such
notices and take any such other action as may be required by the Indenture.
ARTICLE VI
Additional Agreements
SECTION 6.1 Shareholder Meeting; Preparation of the Proxy
Statement. (a) The Company will, as soon as
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practicable following the commencement of the Offer, duly call, give notice of,
convene and hold a meeting of the holders of the Company Common Stock (the
"Shareholders Meeting") for the purpose of approving this Agreement and the
transactions contemplated by this Agreement. Subject to the provisions of
Section 5.2(b), the Company will, through its Board of Directors, recommend to
its shareholders approval of this Agreement, the Merger and the other
transactions contemplated by this Agreement. At the Shareholders Meeting,
Parent shall cause all of the shares of Company Common Stock then actually or
beneficially owned by Parent, Sub or any of their subsidiaries, or as to which
Parent, Sub or any of their subsidiaries has voting rights by proxy or
otherwise to be voted in favor of the Merger.
(b) The Company will, at Parent's request, as soon as
practicable prepare and file a preliminary Proxy Statement with the SEC and the
Company and Parent will cooperate in responding to any comments of the SEC or
its staff and the Company will cause the Proxy Statement to be mailed to the
Company's shareholders as promptly as practicable after responding to all such
comments to the satisfaction of the staff. The Company will notify Parent
promptly of the receipt of any comments from the SEC or its staff and of any
request by the SEC or its staff for amendments or supplements to the Proxy
Statement or for additional information and will supply Parent with copies of
all correspondence between the Company or any of its representatives, on the
one hand, and the SEC or its staff, on the other hand, with respect to the
Proxy Statement or the Merger. If at any time prior to the Shareholders
Meeting there shall occur any event that should be set forth in an amendment or
supplement to the Proxy Statement, the Company will promptly prepare and if
relating to Parent, Parent will also promptly notify and cooperate with the
Company in preparing, and the Company will mail to its shareholders such an
amendment or supplement. The Company will not file or mail any Proxy
Statement, or any amendment or supplement thereto, to which Parent reasonably
objects.
SECTION 6.2 Access to Information; Confidentiality. As
permitted by law, the Company shall afford to Parent, and to Parent's officers,
employees, accountants, counsel, financial advisers and other representatives,
reasonable access during normal business hours
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during the period prior to the Effective Time to all the properties, books,
contracts, commitments and records of the Company and its subsidiaries and,
during such period, the Company shall furnish promptly to Parent (a) a copy of
each report, schedule, registration statement and other document filed by it or
its subsidiaries during such period pursuant to the requirements of Federal or
state securities laws and (b) all other information concerning its or its
subsidiaries, business, properties and personnel as Parent may reasonably
request. Except as otherwise agreed to by the Company, unless and until Parent
and Sub shall have purchased at least a majority of the outstanding shares of
Company Common Stock pursuant to the Offer, Parent will be bound by the terms
of a confidentiality agreement with the Company dated June 8, 1995.
SECTION 6.3 Reasonable Efforts; Notification. (a) Upon the
terms and subject to the conditions set forth in this Agreement, each of the
parties agrees to use all reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with the
other parties in doing, all things necessary, proper or advisable to consummate
and make effective, in the most expeditious manner practicable, the Offer and
the Merger, and the other transactions contemplated by this Agreement,
including (i) the obtaining of all necessary actions or nonactions, waivers,
consents and approvals from Governmental Entities and the making of all
necessary registrations and filings (including filings with Governmental
Entities, if any) and the taking of all reasonable steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by, any
Governmental Entity, (ii) the obtaining of all necessary consents, approvals or
waivers from third parties, (iii) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement or
the consummation of any of the transactions contemplated by this Agreement,
including seeking to have any stay or temporary restraining order entered by
any court or other Governmental Entity vacated or reversed, (iv) the
consummation of the transactions contemplated by the Financing Commitment and
(v) the execution and delivery of any additional instruments necessary to
consummate the transactions contemplated by, and to fully carry out the
purposes of, this Agreement. In connection with and without limiting
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the foregoing, the Company and its Board of Directors shall (i) take all action
necessary to ensure that no state takeover statute or similar statute or
regulation is or becomes applicable to the Offer, the Merger, this Agreement or
any of the other transactions contemplated by this Agreement and (ii) if any
state takeover statute or similar statute or regulation becomes applicable to
the Offer, the Merger or this Agreement or any other transaction contemplated
by this Agreement, take all action necessary to ensure that the Offer, the
Merger and the other transactions contemplated by this Agreement may be
consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise to minimize the effect of such statute or regulation on
the Offer, the Merger, this Agreement and the other transactions contemplated
by this Agreement.
(b) The Company shall give prompt notice to Parent of (i)
any representation or warranty made by it contained in this Agreement that is
qualified as to materiality becoming untrue or inaccurate in any respect
(including in the case of representations or warranties by the Company, the
Company or Parent receiving knowledge of any fact, event or circumstance which
may cause any representation qualified as to the knowledge of the Company to be
or become untrue or inaccurate in any respect) or (ii) the failure by it to
comply with or satisfy in any material respect any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement;
provided, however, that no such notification shall affect the representations,
warranties, covenants or agreements of the parties or the conditions to the
obligations of the parties under this Agreement. The Company acknowledges that
if after the date of this Agreement the Company receives knowledge of any fact,
event or circumstance that would cause any representation or warranty that is
conditioned as to the knowledge of the Company to be or become untrue or
inaccurate in any respect, the receipt of such knowledge shall constitute a
breach of the representation or warranty that is so conditioned as of the date
of such receipt.
SECTION 6.4 Stock Option Plans. (a) As soon as practicable
following the date of this Agreement, the Board of Directors of the Company
(or, if appropriate, any committee administering the Stock Option Plans (as
defined below)) shall adopt such resolutions or use its
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best efforts to take such other actions as are required to provide that each
outstanding stock option to purchase shares of Company Common Stock (a "Stock
Option") heretofore granted under any stock option or stock purchase plan,
program or arrangement or other option agreement or contingent stock grant plan
of the Company or its subsidiaries (collectively, the "Stock Option Plans")
shall be accelerated so as to be fully exercisable prior to the consummation of
the Offer, and the Company shall use its best efforts to assure that any such
Stock Options outstanding immediately prior to the consummation of the Offer
shall be cancelled immediately prior to the consummation of the Offer in
exchange for an amount in cash, payable at the time of such cancellation, equal
to the product of (y) the number of shares of Company Common Stock subject to
such Stock Option immediately prior to the consummation of the Offer and (z)
the excess of the price per share to be paid in the Offer over the per share
exercise price of such Stock Option. Any Stock Option not cancelled in
accordance with this paragraph (a) immediately prior to the consummation of the
Offer, shall be cancelled at the Effective Time in exchange for an amount in
cash, payable at the Effective Time, equal to the amount which would have been
paid had such Stock Option been cancelled immediately prior to the consummation
of the Offer. A listing of all outstanding Stock Options as of July 7, 1995,
showing what portions of such Stock Options are exercisable as of such date,
the dates upon which such Stock Options expire, and the exercise price of such
Stock Options, is set forth in Schedule 6.4.
(b) All Stock Option Plans shall terminate as of the
Effective Time and the provisions in any other Benefit Plan providing for the
issuance, transfer or grant of any capital stock of the Company or any interest
in respect of any capital stock of the Company shall be deleted as of the
Effective Time, and the Company shall use its best efforts to ensure that
following the Effective Time no holder of a Stock Option or any participant in
any Stock Option Plan shall have any right thereunder to acquire any capital
stock of the Company, Parent or the Surviving Corporation, except as provided
in Section 6.4(a).
SECTION 6.5 Indemnification and Insurance. (a) Parent and the
Surviving Corporation agree that the
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indemnification obligations set forth in the Company's Articles of
Incorporation, as amended, the Amended and Restated By-laws on the date of this
Agreement and the indemnification obligations set forth on Schedule 6.5(a)
hereto shall survive the Merger and shall not be amended, repealed or otherwise
modified for a period of six years after the Effective Time in any manner that
would adversely affect the rights thereunder of individuals who on or prior to
the Effective Time were directors, officers, employees or agents of the Company
(the "Indemnified Parties").
(b) For six years from the Effective Time, the Surviving
Corporation shall either (x) maintain in effect the Company's current
directors' and officers' liability insurance covering those persons who are
covered on the date of this Agreement by the Company's directors' and officers'
liability insurance policy (a copy of which has been made available to Parent);
provided, however, that in no event shall the Surviving Corporation be required
to expend in any one year an amount in excess of 200% of the annual premiums
currently paid by the Company for such insurance which the Company represents
to be $105,000 for the twelve-month period ended May 12, 1996; and, provided,
further, that if the annual premiums of such insurance coverage exceed such
amount, the Surviving Corporation shall be obligated to obtain a policy with
the greatest coverage available for a cost not exceeding such amount or (y)
cause the Parent's directors' and officers' liability insurance then in effect
to cover those persons who are covered on the date of this Agreement by the
Company's directors' and officers' liability insurance policy with respect to
those matters covered by the Company's directors' and officers' liability
policy (such coverage to be not less favorable than the coverage provided under
such policy to the Parent's directors and officers). Notwithstanding the
foregoing, on and after the date two years from the Effective Time, Parent, at
its option, may agree in writing to guarantee or assume the indemnification
obligations set forth in Section 6.5(a) in lieu of maintaining the insurance
described in clauses (x) or (y) above.
(c) For two years from the Effective Time, the Surviving
Corporation shall maintain in effect the Company's current or similar
professional liability insurance with respect to Company employee attorneys so
long as
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premium amounts do not exceed $8,000 per year; provided, however, that if the
annual premiums of such insurance coverage exceed such amount, the Surviving
Corporation shall be obligated to obtain a policy with the greater coverage
available for a cost not exceeding such amount.
(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 or shall not be the continuing or surviving
corporation or entity in such consolidation or merger or (ii) transfers all or
substantially all its properties and assets to any person, then, and in each
case, proper provision shall be made so that the successors and assigns of the
Company or the Surviving Corporation, as the case may be, honor the
indemnification obligations set forth in this Section 6.5.
(e) The obligations of the Company, the Surviving
Corporation, and Parent under this Section 6.5 shall not be terminated or
modified in such a manner as to adversely affect any director or officer to
whom this Section 6.5 applies without the consent of such affected director or
officer (it being expressly agreed that the directors and officers to whom this
Section 6.5 applies shall be third-party beneficiaries of this Section 6.5).
SECTION 6.6 Fees and Expenses. (a) Except as provided below,
all fees and expenses incurred in connection with the Offer, the Merger, this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such fees or expenses, whether or not the Offer or the Merger is
consummated.
(b) The Company shall pay, or cause to be paid, in same
day funds to Parent the sum of (x) all of Parent's reasonably documented
out-of-pocket expenses in an amount up to but not to exceed $500,000 (the
"Expenses") and (y) $1,750,000 (the "Termination Fee") upon demand if (i)
Parent or Sub terminates this Agreement under Section 8.1(e), (ii) the Company
terminates this Agreement pursuant to Section 8.1(f) or (iii) prior to any
termination of this Agreement, a takeover proposal shall have been made and
within nine months of the termination of this Agreement a transaction
constituting a takeover proposal is consummated or the Company enters into an
agreement with respect to, or approves or recom-
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mends a takeover proposal (whether or not related to a takeover proposal made
prior to any termination of this Agreement); provided, however, that in the
case of (iii) above in this paragraph (b) if such transaction has a value to
the shareholders of the Company equivalent to or less favorable than the
proposed Offer and the Merger, then the Company shall pay to Parent the
Expenses (but not the Termination Fee) and, provided, further, that no payment
shall be made if this Agreement has been terminated pursuant to Section 8.1(g)
hereof. In addition, if prior to any termination of this Agreement, any person
or group purchases or otherwise acquires, directly or indirectly, beneficial
ownership of 30% or more of the outstanding voting securities of the Company,
all of Parent's Expenses shall promptly be paid by the Company to Parent and,
additionally, if at any time prior to 12 months following the termination of
this Agreement any such person or group consummates a transaction that would
otherwise constitute a takeover proposal, there shall be paid to Parent
immediately prior to the consummation of such transaction the Termination Fee
(provided that no such payment shall be made if this Agreement has been
terminated pursuant to Section 8.1(g) hereof). The amount of Expenses so
payable shall be the amount set forth in an estimate delivered by Parent,
subject to upward or downward adjustment (not to be in excess of the amount set
forth in clause (x) above) upon delivery of reasonable documentation therefor.
In no event shall the Company be required to pay more than one Termination Fee
pursuant to this Section 6.6.
SECTION 6.7 Public Announcements. Parent and Sub, on the one
hand, and the Company, on the other hand, will consult with each other before
issuing, and provide each other the opportunity to review and comment upon, any
press release or other public statements with respect to the transactions
contemplated by this Agreement, including the Offer and the Merger, and shall
not issue any such press release or make any such public statement prior to
such consultation, except as may be required by applicable law, court process
or by obligations pursuant to any listing agreement with any national
securities exchange or national securities quotation system. The parties agree
that the initial press release to be issued with respect to the transactions
contemplated by this Agreement shall be in the form heretofore agreed to by the
parties. Provided that such consultation shall have
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occurred, nothing in this Agreement shall prohibit accurate disclosure by the
Company that is required in any SEC Document, proxy statement or other filing
or otherwise under applicable law or for the transactions contemplated hereby
or any takeover proposal.
SECTION 6.8 Title Policies. The Company agrees that, prior
to the consummation of the Offer, it will use its reasonable efforts to cause
such officers of the Company and its Significant Subsidiaries, as Parent's or
Sub's title insurer may reasonably require, to execute such reasonable and
customary affidavits as shall permit such title insurer to issue an endorsement
to its title insurance policies insuring title to the real properties owned or
leased by the Company or any of its Significant Subsidiaries to the effect that
the title insurer will not claim as a defense under any such policy failure of
insured to disclose to the title insurer prior to the date of the relevant
policy any defects, liens, encumbrances or adverse claims not shown by public
records and known to the insured (but not known to Parent or Sub) prior to the
Effective Time.
SECTION 6.9 Transfer Taxes. All liability for transfer or
other similar taxes arising out of or related to the Offer and the Merger or
the consummation of any other transaction contemplated by this Agreement, and
due to the property owned by the Company or any of its subsidiaries or
affiliates ("Transfer Taxes") shall be borne by the Company, and the Company
shall file or cause to be filed all returns relating to such Transfer Taxes
which are due, and, to the extent appropriate or required by law, the
shareholders of the Company shall cooperate with respect to the filing of such
returns.
ARTICLE VII
Conditions Precedent
SECTION 7.1 Conditions to Each Party's Obligation to Effect
the Merger. The respective obligation of each party to effect the Merger is
subject to the satisfaction or waiver on or prior to the Closing Date of the
following conditions:
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(a) Shareholder Approval. This Agreement shall have been
approved and adopted by the affirmative vote of the holders of a majority of
all shares of Company Common Stock entitled to be cast in accordance with
applicable law and the Company's Articles of Incorporation, as amended;
provided that Parent and Sub shall vote all their shares of Company Common
Stock in favor of the Merger.
(b) No Injunctions or Restraints. No statute, rule,
regulation, executive order, decree, temporary restraining order, preliminary
or permanent injunction or other order enacted, entered, promulgated, enforced
or issued by any Governmental Entity or other legal restraint or prohibition
preventing the consummation of the Merger or the transactions contemplated
thereby shall be in effect; provided, however, that, in the case of a decree,
injunction or other order, each of the parties shall have used reasonable
efforts to prevent the entry of any such injunction or other order and to
appeal as promptly as possible any decree, injunction or other order that may
be entered.
ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.1 Termination. This Agreement may be terminated at
any time prior to the Effective Time, whether before or after approval of
matters presented in connection with the Merger by the shareholders of the
Company:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company if (i) as a result of
the failure, occurrence or existence of any of the conditions set forth in
Exhibit A to this Agreement the Offer shall have terminated or expired in
accordance with its terms without Sub having accepted for payment any shares of
Company Common Stock pursuant to the Offer or (ii) Sub shall not have accepted
for payment any shares of Company Common Stock pursuant to the Offer by October
31, 1995; provided, however, that the right to terminate this Agreement
pursuant to this Section 8.1(b)
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shall not be available to either party if its failure to perform any of its
obligations under this Agreement results in the failure, occurrence or
existence of any such condition;
(c) by either Parent or the Company if any Governmental
Entity shall have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the acceptance for
payment of, or payment for, shares of Company Common Stock pursuant to the
Offer or the Merger and such order, decree or ruling or other action shall have
become final and nonappealable;
(d) by Parent or Sub prior to the purchase of shares of
Company Common Stock pursuant to the Offer in the event of a breach by the
Company of any representation, warranty, covenant or other agreement contained
in this Agreement which (A) would give rise to the failure of a condition set
forth in paragraph (e) or (f) of Exhibit A and (B) cannot be or has not been
cured within 20 days after the giving of written notice to the Company;
(e) by Parent or Sub if either Parent or Sub is entitled
to terminate the Offer as a result of the occurrence of any event set forth in
paragraph (d) of Exhibit A to this Agreement;
(f) by the Company in connection with entering into a
definitive agreement in accordance with Section 5.2(b), provided it has
complied with all provisions thereof, including the notice provisions therein,
and that it makes simultaneous payment of the Expenses and the Termination Fee;
or
(g) by the Company, if Sub or Parent shall have breached
in any material respect any of their respective representations, warranties,
covenants or other agreements contained in this Agreement, which failure to
perform is incapable of being cured or has not been cured within 20 days after
the giving of written notice to Parent or Sub, as applicable, except, in any
case, such failures which are not reasonably likely to affect adversely
Parent's or Sub's ability to complete the Offer or the Merger.
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<PAGE> 57
SECTION 8.2 Effect of Termination. In the event of
termination of this Agreement by either the Company or Parent as provided in
Section 8.1, this Agreement shall forthwith become void and have no effect,
without any liability or obligation on the part of Parent, Sub or the Company,
other than the provisions of Section 4.1(p), Section 4.2(d), the last sentence
of Section 6.2, Section 6.6, this Section 8.2 and Article IX and except to the
extent that such termination results from the wilful and material breach by a
party of any of its representations, warranties, covenants or agreements set
forth in this Agreement.
SECTION 8.3 Amendment. This Agreement may be amended by the
parties at any time before or after any required approval of matters presented
in connection with the Merger by the shareholders of the Company; provided,
however, that after any such approval, there shall not be made any amendment
that by law requires further approval by such shareholders without the further
approval of such shareholders. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties.
SECTION 8.4 Extension; Waiver. At any time prior to the
Effective Time, the parties may (a) extend the time for the performance of any
of the obligations or other acts of the other parties, (b) waive any
inaccuracies in the representations and warranties contained in this Agreement
or in any document delivered pursuant to this Agreement or (c) subject to the
proviso of Section 8.3, waive compliance with any of the agreements or
conditions contained in this Agreement. Any agreement on the part of a party
to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. The failure of any party
to this Agreement to assert any of its rights under this Agreement or otherwise
shall not constitute a waiver of those rights.
SECTION 8.5 Procedure for Termination, Amendment, Extension
or Waiver. A termination of this Agreement pursuant to Section 8.1, an
amendment of this Agreement pursuant to Section 8.3 or an extension or waiver
pursuant to Section 8.4 shall, in order to be effective, require in the case of
Parent, Sub or the Company, action by its Board of Directors or the duly
authorized designee
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of its Board of Directors; provided, however, that in the event that Sub's
designees are appointed or elected to the Board of Directors of the Company as
provided in Section 1.5, after the acceptance for payment of shares of Company
Common Stock pursuant to the Offer and prior to the Effective Time, except as
otherwise contemplated by this Agreement the affirmative vote of a majority of
the directors of the Company that were not designated by Parent or Sub shall be
required by the Company to amend this Agreement by the Company.
ARTICLE IX
General Provisions
SECTION 9.1 Nonsurvival of Representations. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time or, in the case of
the Company, shall survive the acceptance for payment of, and payment for,
shares of Company Common Stock by Sub pursuant to the Offer. This Section 9.1
shall not limit any covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time of the Merger.
SECTION 9.2 Notices. All notices, requests, claims, demands
and other communications under this Agreement shall be in writing and shall be
deemed given if delivered personally or sent by overnight courier (providing
proof of delivery) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Parent or Sub, to:
Arkansas Best Corporation
3801 Old Greenwood Road
Fort Smith, Arkansas 72903
Facsimile: 501-785-6124
Attention: Richard F. Cooper, Esq.
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with copies to:
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, NY 10022
Facsimile: (212) 735-2000
Attention: Peter A. Atkins, Esq.
(b) if to the Company, to
WorldWay Corporation
400 Two Coliseum Center
2400 Yorkmount Road
Charlotte, North Carolina 28217
Facsimile: 704-329-0749
Attention: John B. Yorke, Esq.
with copies to:
Robinson, Bradshaw & Hinson
1900 Independence Center
101 North Tryon Street
Charlotte, North Carolina 28246
Facsimile: 704-378-4000
Attention: Robin L. Hinson, Esq.
SECTION 9.3 Definitions. For purposes of this Agreement:
(a) an "affiliate" of any person means another person
that directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first person;
(b) "competitive proposal" has the meaning assigned
thereto in Section 5.2(b);
(c) "Environmental Laws" means all foreign, federal,
state and local laws, regulations, rules and ordinances relating to pollution
or protection of the environment, including, without limitation, laws relating
to Releases or threatened Releases of Hazardous Materials
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into the indoor or outdoor environment (including, without limitation, ambient
air, surface water, groundwater, land, surface and subsurface strata) or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, Release, transport or handling of Hazardous Materials, and
all laws and regulations with regard to recordkeeping, notification, disclosure
and reporting requirements respecting Hazardous Materials, and all laws
relating to endangered or threatened species of fish, wildlife and plants and
the management or use of natural resources;
(d) "Environmental Liabilities and Costs" means all
liabilities, obligations, responsibilities, obligations to conduct cleanup,
losses, damages, deficiencies, punitive damages, consequential damages, treble
damages, costs and expenses (including, without limitation, all reasonable
fees, disbursements and expenses of counsel, expert and consulting fees and
costs of investigations and feasibility studies and responding to government
requests for information or documents), fines, penalties, restitution and
monetary sanctions, interest, direct or indirect, known or unknown, absolute or
contingent, past, present or future, resulting from any claim or demand, by any
person or entity, whether based in contract, tort, implied or express warranty,
strict liability, joint and several liability, criminal or civil statute,
including any Environmental Law, or arising from environmental, health or
safety conditions, or the Release or threatened Release of Hazardous Materials
into the environment;
(e) "Hazardous Materials" means all substances defined as
hazardous substances in the National Oil and Hazardous Substances Pollution
Contingency Plan, 40 C.F.R. Section 300.5, or substances defined as hazardous
substances, hazardous materials, toxic substances, hazardous wastes, pollutants
or contaminants, under any Environmental Law, or substances regulated under any
Environmental Law, including, but not limited to, petroleum (including crude
oil or any fraction thereof), asbestos, and polychlorinated biphenyls;
(f) "indebtedness" means, with respect to any person,
without duplication, (A) all obligations of such person for borrowed money, or
with respect to deposits or advances of any kind, (B) all obligations of such
person
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evidenced by bonds, debentures, notes or similar instruments, (C) all
obligations of such person upon which interest charges are customarily paid
(other than trade payables incurred in the ordinary course of business), (D)
all obligations of such person under conditional sale or other title retention
agreements relating to property purchased by such person, (E) all obligations
of such person issued or assumed as the deferred purchase price of property or
services (excluding obligations of such person to creditors for raw materials,
inventory, services and supplies incurred in the ordinary course of such
person's business), (F) all lease obligations of such person capitalized on the
books and records of such person, (G) all obligations of others secured by any
lien on property or assets owned or acquired by such person, whether or not the
obligations secured thereby have been assumed, (H) all obligations of such
person under interest rate, or currency or commodity hedging, swap or similar
derivative transactions (valued at the termination value thereof), (I) all
letters of credit issued for the account of such person (excluding letters of
credit issued for the benefit of suppliers or lessors to support accounts
payable to suppliers incurred in the ordinary course of business) and (J) all
guarantees and arrangements having the economic effect of a guarantee of such
person of any indebtedness of any other person;
(g) "lien" means any conditional sale agreement, default
of title, easement, encroachment, encumbrance, hypothecation, infringement,
lien, mortgage, pledge, reservation, restriction, security interest, title
retention or other security arrangement, or any adverse right or interest,
charge or claim of any nature whatsoever of, on, or with respect to any asset,
property or property interest; provided, however, that the term "lien" shall
not include (i) liens for water and sewer charges and current taxes not yet due
and payable or being contested in good faith, (ii) mechanics', carriers',
workers', repairers', materialmens', warehousemens' and other similar liens
arising or incurred in the ordinary course of business or (iii) all liens
approved in writing by the other party hereto;
(h) "material adverse change" or "material adverse
effect" means, when used in connection with the Company or Parent, any change
or effect (or any development that, insofar as can reasonably be foreseen, is
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likely to result in any change or effect) that is materially adverse to the
business, properties, assets, financial condition or results of operations of
such party and its subsidiaries taken as a whole or on the ability of the
Company or Parent to perform its obligations hereunder;
(i) "Person" means an individual, corporation,
partnership, joint venture, association, trust, unincorporated organization or
other entity;
(j) "Release" means any release, spill, emission, discharge,
leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching
or migration into the indoor or outdoor environment (including, without
limitation, ambient air, surface water, groundwater, and surface or subsurface
strata) or into or out of any property, including the movement of Hazardous
Materials through or in the air, soil, surface water, groundwater or property;
(k) a "subsidiary" of any person means another person, an
amount of the voting securities, other voting ownership or voting partnership
interests of which is sufficient to elect at least a majority of its Board of
Directors or other governing body (or, if there are no such voting interests,
50% or more of the equity interests of which) is owned directly or indirectly
by such first person; and
(l) "takeover proposal", has the meaning assigned thereto
in Section 5.2(a).
SECTION 9.4 Interpretation. When a reference is made in this
Agreement to a Section, Exhibit or Schedule, such reference shall be to a
Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation".
SECTION 9.5 Counterparts. This Agreement may be executed in
one or more counterparts, all of which
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shall be considered one and the same agreement and shall become effective when
one or more counterparts have been signed by each of the parties and delivered
to the other parties.
SECTION 9.6 Entire Agreement; No Third-Party Beneficiaries.
This Agreement constitutes the entire agreement, and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter of this Agreement and is not intended to confer
upon any person other than the parties any rights or remedies hereunder.
SECTION 9.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE,
WITHOUT REGARD TO ANY APPLICABLE CONFLICTS OF LAW, EXCEPT TO THE EXTENT THE
NCBCA SHALL BE HELD TO GOVERN THE TERMS OF THE MERGER.
SECTION 9.8 Assignment. Neither this Agreement nor any of
the rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties
without the prior written consent of the other parties, except that Sub may
assign, in its sole discretion, any of or all its rights, interests and
obligations under this Agreement to Parent or to any direct or indirect wholly
owned subsidiary of Parent, but no such assignment shall relieve Sub of any of
its obligations under this Agreement. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns.
SECTION 9.9 Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any court of the
United States located in the State of Delaware or in Delaware state court, this
being in addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto (a) consents to submit itself
to the personal jurisdiction of
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any Federal court located in the State of Delaware or any Delaware state court
in the event any dispute arises out of this Agreement or any of the
transactions contemplated by this Agreement, (b) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court and (c) agrees that it will not bring any action
relating to this Agreement or any of the transactions contemplated by this
Agreement in any court other than a Federal or state court sitting in the State
of Delaware.
SECTION 9.10 Schedules. For purposes of this Agreement,
"Schedules" shall mean the Schedules contained in the Confidential Disclosure
Schedule, dated the date hereof, delivered in connection with this Agreement.
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<PAGE> 65
IN WITNESS WHEREOF, Parent, Sub and the Company have caused
this Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
Arkansas Best Corporation
by /s/ Robert A. Young III
Name: Robert A. Young III
Title: President-Chief
Executive Officer
ABC Acquisition Corporation
by /s/ Robert A. Young III
Name: Robert A. Young III
Title: President-Chief
Executive Officer
WorldWay Corporation
by /s/ John B. Yorke
Name: John B. Yorke
Title: Vice President and
General Counsel
<PAGE> 66
EXHIBIT A
CONDITIONS OF THE OFFER
Notwithstanding any other term of the Offer or this Agreement,
Sub shall not be required to accept for payment or, subject to any applicable
rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange
Act (relating to Sub's obligation to pay for or return tendered shares of
Company Common Stock after the termination or withdrawal of the Offer), to pay
for any shares of Company Common Stock tendered pursuant to the Offer unless,
(i) there shall have been validly tendered and not withdrawn prior to the
expiration of the Offer such number of shares of Company Common Stock which
would constitute a majority of the outstanding shares (determined on a fully
diluted basis) of Company Common Stock (the "Minimum Condition"), (ii) any
waiting period under the HSR Act applicable to the purchase of shares of
Company Common Stock pursuant to the Offer shall have expired or been
terminated, (iii) Parent or Sub shall have received an informal, non-binding
opinion of the staff of the ICC pursuant to 49 CFR Part 1013, without imposing
any conditions reasonably unacceptable to Parent, that the Voting Trusts
effectively insulate the settlor from any violations of the ICC's policy
against unauthorized acquisitions of control of a regulated carrier and (iv)
the ICC shall have granted Parent or Sub temporary authority pursuant to 49
U.S.C. Section 11349 to operate the properties of the Company pending receipt
of the exemption from or approval by the ICC without imposing any conditions
reasonably unacceptable to Parent or Sub. Furthermore, notwithstanding any
other term of the Offer or this Agreement, Sub shall not be required to accept
for payment or, subject as aforesaid, to pay for any shares of Company Common
Stock not theretofore accepted for payment or paid for, and may terminate the
Offer if, at any time on or after the date of this Agreement and before the
acceptance of such shares for payment or the payment therefor, any of the
following conditions exists (other than as a result of any action or inaction
of Parent or any of its subsidiaries which constitutes a breach of this
Agreement):
(a) there shall be instituted or pending any suit, action
or proceeding (in the case of a suit, action or proceeding by a person other
than a Governmental
<PAGE> 67
Entity, such suit, action or proceeding having a substantial likelihood of
success or, in the case of a suit, action or proceeding by a Governmental
Entity, such suit, action or proceeding having a reasonable likelihood of
success), (i) challenging the acquisition by Parent or Sub of any shares of
Company Common Stock under the Offer, seeking to restrain or prohibit the
making or consummation of the Offer or the Merger, or seeking to obtain from
the Company, Parent or Sub any damages that are material in relation to the
Company and its subsidiaries taken as whole, (ii) seeking to prohibit or
materially limit the ownership or operation by the Company, Parent or any of
their respective subsidiaries of a material portion of the business or assets
of the Company and its subsidiaries, taken as a whole, or Parent and its
subsidiaries, taken as a whole, or to compel the Company or Parent to dispose
of or hold separate any material portion of the business or assets of the
Company and its subsidiaries, taken as a whole, or Parent and its subsidiaries,
taken as a whole, as a result of the Offer or any of the other transactions
contemplated by this Agreement, (iii) seeking to impose material limitations on
the ability of Parent or Sub to acquire or hold, or exercise full rights of
ownership of, any shares of Company Common Stock accepted for payment pursuant
to the Offer including, without limitation, the right to vote such Company
Common Stock on all matters properly presented to the shareholders of the
Company or (iv) seeking to prohibit Parent or any of its subsidiaries from
effectively controlling in any material respect the business or operations of
the Company and its subsidiaries, taken as a whole;
(b) there shall be any statute, rule, regulation,
judgment, order or injunction enacted, entered, enforced, promulgated or deemed
applicable to the Offer or the Merger, or any other action shall be taken by
any Governmental Entity or court that is reasonably likely to result, directly
or indirectly, in any of the consequences referred to in clauses (i) through
(iv) of paragraph (a) above;
(c) there shall have occurred any material adverse change
(or any development that, insofar as reasonably can be foreseen, is reasonably
likely to result in any material adverse change) in the business, properties,
assets, financial condition or results of
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operations of the Company and its subsidiaries, taken as a whole;
(d) (i) the Board of Directors of the Company or any
committee thereof shall have withdrawn or modified in a manner adverse to
Parent or Sub its approval or recommendation of the Offer, the Merger or this
Agreement, or approved or recommended any takeover proposal, (ii) the Company
shall have entered into any agreement with respect to any competitive proposal
in accordance with Section 5.2(b) of this Agreement or (iii) the Board of
Directors of the Company or any committee thereof shall have resolved to take
any of the foregoing actions;
(e) any of the representations and warranties of the
Company set forth in this Agreement that are qualified as to materiality shall
not be true and correct and any such representations and warranties that are
not so qualified shall not be true and correct in any material respect, in each
case at the date of this Agreement and at the scheduled expiration of the
Offer;
(f) the Company shall have failed to perform in any
material respect any obligation or to comply in any material respect with any
agreement or covenant of the Company to be performed or complied with by it
under this Agreement;
(g) there shall have occurred and be continuing (i) any
general suspension of trading in, or limitation on prices for, securities on
the New York Stock Exchange, (ii) a decline in either the Dow Jones Average of
Industrial Stocks or Standard & Poor's 500 Index by an amount of at least 20%
measured from the close of business on the trading day next preceding the date
of this Agreement, (iii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States, (iv) any
material limitation (whether or not mandatory) by any Governmental Entity on,
or other event that materially impairs, the extension of credit by banks or
other lending institutions or (v) in case of any of the foregoing existing on
the date of this Agreement, material acceleration or worsening thereof;
(h) Parent shall not have received sufficient funds
pursuant to the Financing Commitment (or any alternate financing commitment
obtained by Parent) to consum-
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mate the Offer and the Merger and the transactions contemplated thereby,
provided that such failure to receive funds shall not have resulted from the
failure of Parent to use its reasonable efforts to consummate the transactions
contemplated by the Financing Commitment;
(i) immediately prior to the acceptance for payment of
any shares of Company Common Stock by Sub, a sufficient number of directors
shall have not resigned from the Company's Board of Directors to enable Sub to
designate directors to the Company's Board of Directors in accordance with
Section 1.5 of this Agreement;
(j) any person, entity or "group" (as defined in Section
13(d)(3) of the Exchange Act), other than Parent, Sub or their affiliates or
any group of which any of them is a member, shall have acquired beneficial
ownership (determined pursuant to Rule 13d-3 promulgated under the Exchange
Act) of more than 30% of the outstanding shares of Company Common Stock through
the acquisition of shares of Company Common Stock, the formation of a group or
otherwise; or
(k) the Agreement shall have been terminated in
accordance with its terms.
The foregoing conditions are for the sole benefit of Sub and
Parent and may, subject to the terms of the Agreement, be waived by Sub and
Parent in whole or in part at any time and from time to time in their sole
discretion. The failure by Parent or Sub at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right, the waiver of
any such right with respect to particular facts and 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 and
from time to time.
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EXHIBIT B
VOTING TRUST AGREEMENT
THIS VOTING TRUST AGREEMENT, dated as of ______, 1995, by and among
[ ] Corporation ("Parent"), [ ] Corporation, a Delaware
Corporation and a wholly-owned subsidiary of Parent ("Acquisition") and ______,
an attorney admitted to practice law in the state of _____________________
(the "Trustee").
W I T N E S S E T H:
WHEREAS, Parent is a non-carrier holding company which owns and
controls several subsidiary corporations engaged in motor carrier
transportation of property for hire or in brokerage of such transportation and
possessing certificates, licenses, and permits issued by the Interstate
Commerce Commission ("ICC") authorizing them to provide such transportation and
brokerage services;
WHEREAS, [ ] ("[ ]"), a [ ]
corporation, is engaged in motor carrier transportation of property for hire or
in brokerage of such transportation and which holds certificates, licenses, and
permits issued by the ICC authorizing such transportation and brokerage
services, and is a wholly-owned subsidiary of [ ]
Corporation, ("[ ]");
WHEREAS, Parent, Acquisition and [ ] have executed an
Agreement and Plan of Merger ("Merger Agreement") pursuant to which Acquisition
will acquire [ ] and its subsidiary
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corporations including, with ICC approval or exemption from approval, [ ];
WHEREAS, pursuant to the Merger Agreement, Acquisition has commenced a
tender offer ("Offer") to purchase all the issued and outstanding shares of
common stock of [ ] ("[ ] Common Stock") upon the terms and
subject to the conditions set forth in the Merger Agreement, and under such
conditions shares acquired pursuant to the Offer will constitute at least a
majority of the outstanding shares of [ ] Common Stock;
WHEREAS, Parent, Acquisition, and [ ] have filed a Notice of
Exemption pursuant to 49 C.F.R. Part 1186 ("Notice of Exemption") to permit
Parent and Acquisition to acquire control of [ ]'s ICC subsidiaries
[including [ ]] and have also applied for temporary authority pursuant
to 49 U.S.C. Section 11349 to permit Parent to operate through management the
properties of the ICC Subsidiaries [including [ ] pending the effectiveness
of the exemption;
WHEREAS, Acquisition wishes and intends, immediately upon acquiring
shares of [ ] Common Stock, pursuant to the Offer to cause [ ]
to deposit all of the issued and outstanding shares of common stock of
[ ] ("Shares") in an independent, irrevocable voting trust, pursuant to the
ICC's rules, in order to avoid any allegation or assertion that Parent or
Acquisition is controlling [ ] in violation of the provisions of the
Interstate Commerce Act prior to the receipt of any required ICC approval or
exemption;
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WHEREAS, [ ] has also agreed in the Merger Agreement to cause
the Shares to be deposited in an independent, irrevocable voting trust;
WHEREAS, the Trustee is willing to act as voting trustee pursuant to
the terms of this Voting Trust Agreement and the rules of the Commission; and
WHEREAS, neither the Trustee nor any member of [his] law firm is an
officer or board member of or has any direct or indirect business arrangements
or dealings with Parent, Acquisition, [ ] or of their affiliates,
NOW THEREFORE, the Parties hereto agree as follows:
APPOINTMENT AND ASSIGNMENT
1. Parent and Acquisition hereby appoint ________ as Trustee
hereunder, and _____________ hereby accepts said appointment and agrees to act
as Trustee hereunder all as provided more fully herein.
2. Parent and Acquisition agree that, immediately upon
Acquisition's acquisition of a majority of the outstanding shares of [ ]'s
Common Stock, Acquisition shall cause [ ] to transfer and deliver to
the Trustee all of its Shares, which shares shall be duly endorsed or
accompanied by proper instruments duly executed for transfer. Such Shares shall
be exchanged for one or more Trust Certificates substantially in the form
attached hereto as Exhibit A, with the blanks therein appropriately filled (the
"Trust Certificates").
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<PAGE> 73
3. This Voting Trust Agreement shall be irrevocable and shall
terminate only in accordance with the provisions of Section 10 hereof.
4. The Trustee shall be entitled and it shall be [his] duty to
exercise any and all voting rights in respect of the Shares either in person or
by proxy, unless otherwise directed by the ICC or a court of competent
jurisdiction, Except as otherwise provided in this Agreement, the Trustee shall
not exercise the voting powers of the Shares in any way so as to create any
dependence or intercorporate relationship between Parent, Acquisition, or their
affiliates, on the one hand, and of [ ], on the other hand. The term
"affiliate" or "affiliates" wherever used in this Voting Trust Agreement shall
have the meaning specified in 49 U.S.C. Section 11343(c), as amended. The
Trustee shall use [his] best judgment to elect suitable directors of [ ]
and in exercising the voting rights and performing [his] duties provided for in
this Voting Trust Agreement. Notwithstanding the foregoing provisions of this
Paragraph 4, however, the registered holder of any Trust Certificate may at any
time -- but only with the prior approval of the ICC -- instruct the Trustee in
writing to vote the shares of [ ] represented by such Trust Certificate
in any manner, in which case the Trustee shall vote such shares in accordance
with such instructions.
5. During the term of this Voting Trust Agreement the Trustee
shall not dispose of or in any way encumber the shares of
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<PAGE> 74
[ ] except as specifically provided herein or as directed by the ICC or a
court of competent jurisdiction.
6. The Trustee may take or approve any action as may be necessary
to cause [ ] to guarantee indebtedness of Parent of Acquisition incurred
in connection with or as a consequence of the acquisition of [ ] and its
subsidiaries and to pledge, assign, hypothecate, bargain, sell, convey,
mortgage, and grant a security interest in or a general lien upon all or any
part of the property and assets of [ ] as security therefor.
7. In the event the ICC grants the application for temporary
authority pursuant to 49 U.S.C. Section 11349 to permit Parent or Acquisition
to operate through management the properties of [ ] pending the
effectiveness of any approval or exemption from approval by the ICC of
permanent authority to control [ ], Parent or Acquisition shall have the
right to operate [ ] through management upon such grant subject to any
conditions the ICC may impose, and Trustee shall exercise [his] voting rights
and duties hereunder consistently with such temporary authority of Parent or
Acquisition and shall not interfere with such temporary authority.
8. All Trust Certificates shall be transferrable on the books of
the Trustee by the registered holder upon the surrender thereof properly
assigned, in accordance with rules from time to time established for the
purpose by the Trustee. Until so transferred, the Trustee may treat the
registered holder as owner for all purposes. Each transferee of a Trust
Certificate issued
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<PAGE> 75
hereunder shall, by [his] acceptance thereof, assent to and become a party to
this Voting Trust Agreement, and shall assume all attendant rights and
obligations.
9. Pending the termination of this Voting Trust as hereinafter
provided, the Trustee shall, immediately following the receipt of each cash
dividend or cash distribution as may be declared and paid upon the Shares, pay
the same over to or as directed the holder of Trust Certificates hereunder as
then known to the Trustee. The Trustee shall receive and hold dividends and
distributions other than cash upon the same terms and conditions as the Shares
and shall issue Trust Certificates representing an new or additional securities
that may be paid as dividends upon the Shares or distributed to the registered
holders of Trust Certificates in proportion to their respective interests.
10. (a) This Voting Trust is accepted by the Trustee subject
to the right hereby reserved in Acquisition at any time to cause the sale or
any other disposition of the whole or any part of the Shares, whether or not an
event described in subparagraph (b) below has occurred. The Trustee shall take
all actions reasonably requested by Acquisition (including, without limitation,
exercising all voting rights in respect of the Shares in favor of any proposal
or action necessary or desirable to effect, or consistent with the effectuation
of any proposal) with respect to any proposed sale or other disposition of the
whole or any part of the Shares by Acquisition. The Trustee shall at any time
upon the receipt of a direction from Acquisition, signed by
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its President or one of its Vice Presidents and under its corporate seal
designating the person or entity to whom Acquisition has directly or indirectly
sold or otherwise disposed of the whole or any part of the Shares and certifying
that such person or entity is not an affiliate of Acquisition and has all
necessary regulatory authority, if any, to purchase the Shares (upon which
certification the Trustee shall be entitled to rely) immediately transfer to
the person or entity therein named all of the Trustee's rights, title, and
interest in such amount of the Shares as may be set forth in said direction.
If the foregoing direction shall specify all of the Shares, then following
transfer of the Trustee's right, title, and interest therein, and in the event
of a sale thereof, upon delivery to or upon the order of Acquisition of the
proceeds of such sale, this Voting Trust shall cease and come to an end. If
the foregoing direction is as to only a part of the Shares, then this Voting
Trust shall cease as to said part upon such transfer, and receipt of proceeds in
the event of sale, but shall remain in full force and effect as to the
remaining part of the Shares, provided, however, that upon the receipt by
Trustee of a written opinion of counsel for Acquisition, a copy of which is
submitted to the ICC, stating that the transfer of voting rights in all the
remaining Shares to Acquisition would not give the Parent or Acquisition control
of the company within the meaning of 49 U.S.C. Section 11343, this Voting Trust
shall cease and come to an end and all Shares and other property then held by
the Trustee shall be distributed to or upon
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the order of Acquisition or the holder or holders of Trust Certificates. In
the event of a sale of Shares by Acquisition, the Trustee shall, to the extent
the consideration therefor is payable to or controllable by the Trustee,
promptly pay, or cause to be paid, upon the order of Acquisition the net
proceeds of such sale to the registered holders of the Trust Certificates in
proportion to their respective interests. It is the intention of this
paragraph that no violations of 49 U.S.C. Section 11343 will result from a
termination of this Voting Trust.
(b) In the event that (i) an exemption from the ICC
requirements for prior approval pursuant to 49 U.S.C. Section 11343 shall
become effective as to [ ]; or (ii) the ICC by final order shall approve
the acquisition of control of [ ] by Acquisition, the Parent or any of its
affiliates; or, (iii) in the event that Title 49 of the United States Code, or
other controlling law, is amended to allow Acquisition, the Parent or their
affiliates to acquire control of [ ] without obtaining ICC or other
governmental approval, upon delivery of an opinion of independent counsel
selected by the Trustee that no order or exemption of the ICC or other
governmental authority is required, or exemption, then the Trustee shall
transfer to or upon the order of Acquisition, the Parent or the holder or
holders of Trust Certificates hereunder as then known to the Trustee, its
rights, title, and interest in and to all of the Shares then held by it in
accordance with the terms, conditions and agreements of this Voting Trust
Agreement and not theretofore transferred by it
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<PAGE> 78
as provided in subparagraph (a) hereof, and upon any such transfer or merger
this Voting Trust shall cease and come to an end.
(c) In the event that the ICC should issue an order denying, or
approving subject to conditions unacceptable to the Parent, any Notice of
Exemption or any application or petition by Acquisition, the Parent or their
affiliates to acquire or otherwise exercise control over [ ],
and such order becomes final after judicial review or failure to appeal,
Acquisition shall use its best efforts to sell the Shares or all of the assets
of [ ] to one or more eligible purchasers, to sell or distribute the
Shares in one Offering or Distribution, or otherwise to dispose of the shares,
during a period of two years after such order becomes final after judicial
review or failure to appeal. At all times, the Trustee shall continue to
perform [his] duties under this Voting Trust Agreement and, should Acquisition
be unsuccessful in [its] efforts to sell or distribute the Shares or all of the
assets of [ ], the Trustee shall as soon as practicable sell the Shares
for cash to one or more eligible purchasers in such manner and for such price
as the Trustee in [his] discretion shall deem reasonable after consultation
with Acquisition. (An "eligible purchaser" hereunder shall be a person or
entity that is not affiliated with the Parent and which has all necessary
regulatory authority, if any is needed, to purchase the Shares.) Acquisition
agrees to cooperate with the Trustee in effecting such disposition and the
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Trustee agrees to act in accordance with any direction made by Acquisition as
to any specific terms or method of disposition, to the extent not inconsistent
with the requirements of the terms of any ICC or court order. The proceeds of
the sale shall be distributed as ordered by Acquisition or, on a pro rata
basis, to the holder or holders of the Trust Certificates hereunder as then
known to the Trustee. The Trustee may, in its reasonable discretion, require
the surrender to [him] of the Trust Certificates hereunder before paying to its
holder his share of the proceeds.
(d) Unless sooner terminated pursuant to any other
provision herein contained, this Voting Trust Agreement shall terminate on
_______________, 2004, and may be extended by the parties hereto, so long as no
violation of 49 U.S.C. Section 11343 will result from such termination or
extension. All Shares and any other property held by the Trustee hereunder upon
such termination shall be distributed to or upon the order of Acquisition or
the holder or holders of Trust Certificates hereunder as then known to the
Trustee. The Trustee may, in [his] reasonable discretion, require the surrender
to [him] of the Trust Certificates hereunder before the release or transfer of
the stock interests evidenced thereby.
(e) The Trustee shall promptly inform the ICC of any
transfer or disposition of Shares pursuant to this Paragraph 10.
(f) The Trustee shall, upon direction by Acquisition,
take all actions that are necessary, appropriate or desirable to
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cause a registration statement if required for the Shares under the Securities
Act of 1933, as amended, and/or an information statement for the Shares under
the Securities Exchange Act of 1934, as amended, and, in either case, a
registration statement or information statement under any other applicable
securities laws, to be filed and to become effective in accordance with the
terms set forth in the Merger Agreement. To the extent that registration is
required under the Securities Act of 1933, as amended, the Securities Exchange
Act of 1934, as amended, or any other applicable securities laws in respect of
any distribution of Shares as contemplated herein, Acquisition or the Parent
shall reimburse the Trustee for any reasonable expenses incurred by [him] and
indemnify and hold the Trustee harmless from and against any loss, liability,
cost or expense related thereto or arising therefrom.
(g) Except as provided in this Paragraph 10, or in
Paragraph 6, the Trustee shall not dispose of, or in any way encumber, the
Shares.
11. Neither the Trustee nor any member of [his] law firm serves as
(i) an officer or member of their respective boards of directors in common with
Acquisition, the Parent, or any affiliate of either, or (ii) have any direct or
indirect business arrangements or dealings, financial or otherwise, with
Acquisition, the Parent or any affiliate of either, other than dealings
pertaining to establishment and carrying out of this voting trust. Mere
investment in the stock or securities of
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Acquisition or Parent or any affiliate of either by the Trustee or member of
[his] law firm, short of obtaining a controlling interest, will not be
considered a proscribed business arrangement or dealing, but in no event shall
any such investment by the Trustee or member of [his] law firm in voting
securities of Acquisition, the Parent or their affiliates exceed 5 percent of
the outstanding voting securities of Parent or their affiliates and in no event
shall the Trustee or member of [his] law firm hold a proportion of such voting
securities so substantial as to permit the Trustee or member of [his] law firm
in any way to control or direct the affairs of Acquisition, the Parent or their
affiliates.
12. The duties and responsibilities of the Trustee shall be limited
to those expressly set forth in this Voting Trust Agreement. The Trustee shall
be fully protected by acting in reliance upon any notice, advice, direction or
other document or signature believed by the Trustee to be genuine. The Trustee
shall not be responsible for the sufficiency or accuracy of the form,
execution, validity or genuineness of the Shares, or of an other documents, or
of any endorsement thereon; or for any lack of endorsement thereon, or for any
description therein, nor shall the Trustee be responsible for or liable in any
respect on account of the identity, authority or rights of the persons
executing or delivering or purporting to execute or deliver any such Shares or
other document or endorsement or this Voting Trust Agreement, except for the
execution and delivery of this Voting
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<PAGE> 82
Trust Agreement by this Trustee. Acquisition and the Parent agree that they
will at all times jointly and severally protect, indemnify and save harmless
the Trustee from any loss, damages, liability, cost or expense of any kind or
character whatsoever in connection with this Voting Trust except those, if any,
resulting from the gross negligence or willful misconduct of the Trustee, and
will at all times themselves undertake, assume full responsibility for, and pay
on a current basis, but at least quarterly, all cost and expense of any suit or
litigation of any character, whether or not involving a third party, including
any proceedings before the ICC, with respect to the Shares or this Voting Trust
Agreement, and if the Trustee shall be made a party thereto, or be the subject
of an investigation or proceeding (whether formal or informal), Acquisition or
the Parent will pay all costs, damages and expenses, including reasonable
counsel fees, to which the Trustee may be subject by reason thereof; provided,
however, that Acquisition and the Parent shall not be responsible for the cost
and expense of any suit that the Trustee shall settle without first obtaining
the Parent's written consent. The indemnification obligations of Acquisition
and the Parent shall survive any termination of this Voting Trust Agreement or
the removal, resignation or other replacement of the Trustee. The Trustee may
consult with counsel selected by [him] and the opinion of such counsel shall be
full and complete authorization and protection in respect of any action taken
or
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<PAGE> 83
omitted or suffered by the Trustee hereunder in good faith and in accordance
with such opinion.
13. To the extent requested to do so by Acquisition or any
registered holder of a Trust Certificate, the Trustee shall furnish to the
party making such request full information with respect to (i) all property
theretofore delivered to it as Trustee, (ii) all property then held by it as
Trustee, and (iii) all action theretofore taken by it as Trustee.
14. The Trustee, or any trustee hereafter appointed, may at any
time resign by giving sixty days' written notice of resignation to the Parent
and the ICC. The Parent shall, at least fifteen days prior to the effective
date of such notice, appoint a successor trustee which shall satisfy the
requirements of Paragraph 11 hereof. If no successor trustee shall have been
appointed and shall have accepted appointment at least fifteen days prior to
the effective date of such notice of resignation, the resigning Trustee may
petition any authority or court of competent jurisdiction for the appointment
of a successor trustee. Upon written assumption by the successor trustee of
the Trustee's powers and duties hereunder, a copy of the assumption shall be
delivered by the Trustee to the Parent and the ICC and all registered holders
of Trust Certificates shall be notified of such assumption, whereupon the
Trustee shall be discharged of [his] powers and duties hereunder and the
successor trustee shall become vested herewith. In the event of any material
violation by the Trustee of the terms and conditions of this Voting Trust
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Agreement, the Trustee shall become disqualified from acting as trustee
hereunder as soon as a successor trustee shall have been selected in the manner
provided by this paragraph.
15. This Voting Trust Agreement may from time to time be modified
or amended by agreement executed by the Trustee, Acquisition, the Parent and
all registered holders of the Trust Certificates under one or more of the
following circumstances: (i) pursuant to an order of the ICC, (ii) with the
prior approval of the ICC, (iii) in order to comply with any order of the ICC
or (iv) upon receipt of an opinion of counsel satisfactory to the Trustee and
the holders of Trust Certificates that an order of the ICC approving such
modification or amendment is not required and that the amendment is consistent
with the ICC's regulations regarding voting trusts.
16. The provisions of this Voting Trust Agreement and of the
rights and obligations of the parties hereunder shall be governed by the laws
of the State of Delaware, except that to the extent any provision hereof may be
found inconsistent with the Interstate Commerce Act or regulations promulgated
thereunder by the ICC, such Act and regulations shall control and such
provision hereof shall be given effect only to the extent permitted by such Act
and regulations. In the event that the ICC shall, at any time hereafter by
final order, find that compliance with law requires any other or different
action by the Trustee than is provided herein, the Trustee shall act in
accordance with
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such final order instead of the provisions of this Voting Trust Agreement.
17. This Voting Trust Agreement is executed in duplicate, each of
which shall constitute an original, and one of which shall be retained by the
Parent and the other shall be held by the Trustee.
18. A copy of this Voting Trust Agreement and any amendments or
modifications thereto shall be filed with the ICC by Acquisition.
19. This Voting Trust Agreement shall be binding upon the
successors and assigns to the parties hereto, including without limitation
successors to Acquisition and Parent by merger, consolidation or otherwise.
20. As used in this Voting Trust Agreement, the terms "Interstate
Commerce Commission" and "ICC" shall refer to the Interstate Commerce
commission and any successor agency to which the regulatory functions pertinent
to this Voting Trust Agreement may be transferred.
21. (a) Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall mailed by U.S.
mail, certified mail, return receipt requested o by Federal Express, Express
Mail, or similar overnight delivery or courier service or delivered (in person
or by telecopy) against receipt to the party to whom it is to be given at the
address of such party set forth below (or to such other address
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as the party shall have given notice of) with a copy to each of the other
parties hereto:
To the Trustee:
To the Parent:
To Acquisition:
(b) Unless otherwise specifically provided herein, any
notice to or communication with the holders of the Trust Certificates hereunder
shall be deemed to be sufficiently given or made if enclosed in postpaid
envelopes (regular and not registered mail) addressed to such holders at their
respective addresses appearing on the Trustee's transfer books, and deposited
in any post office or post office box. The addresses of the holders of Trust
Certificates, as shown on the Trustee's transfer books, shall in all cases be
deemed to be the address of Trust Certificate holders for all purposes under
this Voting Trust Agreement, without regard to what other or different
addresses the Trustee may have for any Trust Certificate holder on any other
books or records of the Trustee. Every notice so given of mailing shall be the
date such notice is deemed given for all purposes.
22. Each of the parties hereto acknowledges and agrees that in the
event of any breach of this Voting Trust Agreement, each
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<PAGE> 87
non-breaching party would be irreparably and immediately harmed and could not
be made whole by monetary damages. It is accordingly agreed that the parties
hereto (a) will waive, in any action for specific performance, the defense of
adequacy of a remedy at law and (b) shall be entitled, in addition to any other
remedy to which they may be entitled at law or in equity, to compel specific
performance of this Voting Trust Agreement in any action instituted in any
state or federal court sitting in Wilmington, Delaware. Each party hereto
consents to personal jurisdiction in any such action brought in any state or
federal court sitting in Wilmington, Delaware,
IN WITNESS WHEREOF, [ ] Corporation and [ ]
Corporation have caused this Voting Trust Agreement to be executed by their
Treasurers and their corporate seals to be affixed, attested by their
Secretaries, and has caused this Voting Trust Agreement to be executed by one
of its duly authorized corporate officers and its corporate seal to be affixed,
attested to by its Corporate Secretary or one of its Assistant Corporate
Secretaries, the day and year first above written.
Attest: [ ] CORPORATION
_________________________ By_______________________________
Secretary Treasurer
Attest: [ ] CORPORATION
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__________________________ By_______________________________
Secretary Treasurer
Attest: ________________________________
__________________________ By_______________________________
Voting Trustee
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EXHIBIT A
No. ______________
Shares
VOTING TRUST CERTIFICATE
for
COMMON STOCK,
____ PAR VALUE
of
________________________
INCORPORATED UNDER THE LAWS OF THE STATE OF __________________
THIS IS TO CERTIFY that ___________________ will be entitled, on the
surrender of this Certificate, to receive on the termination of the Voting Trust
Agreement hereinafter referred to, or otherwise as provided in Paragraph 8 of
said Voting Trust Agreement, a certificate or certificates for __________ share
of the Common Stock, $1 par value, of ___________________, a _______________
corporation (the "Company"). This certificate is issued pursuant to, and the
rights of the holder hereof are subject to and limited by, the terms of a
Voting Trust Agreement, dated as of ________________, 1995, executed by [ ]
Corporation, a Delaware Corporation, [ ] corporation, a Delaware
Corporation, and _______________, as Voting Trustee, a copy of which Voting
Trust Agreement is on file in the registered office of said corporation at
________________, and open to inspection of any stockholder of the Company and
the holder hereof. The Voting Trust Agreement, unless earlier terminated (or
extended) pursuant to the terms thereof, will terminate on ________________,
2004, so long as no violation of 49 U.S.C. Section 11343 will result from such
termination.
The holder of this Certificate shall be entitled to the benefits of
said Voting Trust Agreement, including the right to receive payment equal to the
cash dividends, if any, paid by the Company with respect to the number of shares
represented by this Certificate.
<PAGE> 90
This Certificate shall be transferable only on the books of the
undersigned Voting Trustee or any successor, to be kept by said Trustee or
successor, on surrender hereof by the registered holder in person or by attorney
duly authorized in accordance with the provisions of said Voting Trust
Agreement, and until so transferred, the Voting Trustee may treat the
registered holder as the owner of this Voting Trust Certificate for all
purposes whatsoever, unaffected by any notice to the contrary.
By accepting this Certificate, the holder hereof assents to all the
revisions of, and becomes a party to, said Voting Trust Agreement.
IN WITNESS WHEREOF, the Voting Trustee has caused this Certificate to
be signed.
Dated:
By_____________________________
Voting Trustee
<PAGE> 91
EXHIBIT C
PLAN OF MERGER
OF
ABC ACQUISITION CORPORATION
WITH AND INTO
WORLDWAY CORPORATION
1. Corporations Proposing to Merge and Surviving
Corporation. ABC Acquisition Corporation, a North Carolina corporation
("Sub"), shall be merged (the "Merger") with and into WorldWay Corporation, a
North Carolina corporation (the "Company"), pursuant to an Agreement and Plan
of Merger dated as of July 8, 1995, by and among Arkansas Best Corporation, a
Delaware corporation ("Parent"), ABC Acquisition Corporation and the Company
(the "Agreement"). The effective time for the Merger (the "Effective Time")
shall be at 11:59 p.m. on the date articles of merger with respect to the
Merger are filed by the Secretary of State of North Carolina as evidenced by
the Secretary of State's date and time endorsement thereon. The Company shall
continue as the surviving corporation (the "Surviving Corporation") following
the Merger and the separate corporate existence of Sub shall cease.
2. Effects of the Merger. The Merger shall have the
effects set forth in Section 55-11-06 of the North Carolina Business
Corporation Act (the "NCBCA").
3. Articles of Incorporation and Bylaws. The Articles
of Incorporation, as amended, and the Amended and Restated Bylaws of the
Company, as constituted immediately prior to the Effective Time shall be the
Articles of Incorporation, as amended, and the Amended and Restated Bylaws of
the Surviving Corporation.
4. Officers and Directors. The directors of Sub
immediately prior to the Effective Time shall become the directors of the
Surviving Corporation until the earlier of their resignation or removal or
until their respective successors are duly elected and qualified, as the case
may be. The officers of the Company immediately prior to the Effective Time
shall become the officers of the Surviving Corporation, until the earlier of
their
<PAGE> 92
resignation or removal or until their respective successors are duly elected
and qualified, as the case may be.
5. Conversion of Shares. (a) Each share of the capital
stock of Sub issued and outstanding immediately prior to the Effective Time
shall be converted into and become one fully paid and nonassessable share of
common stock, par value $.50 per share, of the Surviving Corporation.
(b) Each issued and outstanding share of common stock of
the Company (other than shares held by the Parent or any subsidiary thereof or
by a subsidiary of the Company and other than Dissenting Shares as defined in
and except to the extent permitted under Section 7 below) at the Effective Time
shall be converted into the right to receive from the Surviving Corporation in
cash, without interest, $11.00 per share of common stock in the Offer (the
"Merger Consideration"). As of the Effective Time, all such shares of common
stock shall no longer be outstanding and shall automatically be canceled and
retired and shall cease to exist, and each holder of a certificate representing
any such shares of common stock shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration, without
interest. Each share of common stock that is owned by the Parent or any
subsidiary thereof of by any subsidiary of the Company shall automatically be
cancelled and retired and shall cease to exist, and no consideration shall be
delivered in exchange therefor. Each share of preferred stock of the Company
issued and outstanding at the Effective Time shall remain issued and
outstanding and unaffected by the Merger.
6. Exchange of Certificates.
(a) Prior to the Effective Time, Parent shall designate a
bank or trust company to act as paying agent in the Merger (the "Paying
Agent"), and, from time to time on, prior to or after the Effective Time,
Parent shall make available, or cause the Surviving Corporation to make
available, to the Paying Agent immediately available funds in amounts and at
the times necessary for the payment of the Merger Consideration (as defined in
the Agreement) upon surrender of certificates representing common stock of the
Company as part of the Merger it being understood that any and all interest
earned on
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<PAGE> 93
funds made available to the Paying Agent pursuant to the Agreement shall be
turned over to Parent.
(b) As soon as reasonably practicable after the Effective
Time, the Paying Agent shall mail to each holder of record of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding shares of common stock of the Company (the "Certificates") whose
shares were converted into the right to receive the Merger Consideration
pursuant to the Agreement, (i) a letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates to the Paying Agent and
shall be in such form and have such other provisions as Parent may reasonably
specify) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration. Upon surrender of a
Certificate for cancellation to the Paying Agent or to such other agent or
agents as may be appointed by the Parent, together with such letter of
transmittal, duly executed, and such other documents as may reasonably be
required by the Paying Agent, the holder of such Certificate shall be entitled
to receive in exchange therefor the amount of cash into which the shares of
common stock of the Company theretofore represented by such Certificate shall
have been converted pursuant to the Agreement, and the Certificate so
surrendered shall forthwith be cancelled. In the event of a transfer of
ownership of common stock of the Company which is not registered in the
transfer records of the Company, payment may be made to a person other than the
person in whose name the Certificate so surrendered is registered, if such
Certificate shall be properly endorsed or otherwise be in proper form for
transfer and the person requesting such payment shall pay any transfer or other
taxes required by reason of the payment to a person other than the registered
holder of such Certificate or establish to the satisfaction of Parent that such
tax has been paid or is not applicable. Until surrendered as contemplated by
this Section 6, each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender the
amount of cash, without interest, into which the shares of common stock of the
Company theretofore represented by such Certificate shall have been converted
pursuant to the Agreement. No
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<PAGE> 94
interest will be paid or will accrue on the cash payable upon the surrender of
any Certificate.
7. Dissenting Shares.
(a) Notwithstanding anything to the contrary contained in
this Plan of Merger, shares of the Company's common stock that are issued and
outstanding immediately prior to the Effective Time and that are held by a
shareholder who has exercised his right (to the extent such right is available
by law) to demand and to receive payment of the fair value of such shares (the
"Dissenting Shares") under Article 13 of the NCBCA shall not be converted into
the right to receive the Merger Consideration, unless and until such holder
shall have failed to perfect or shall have effectively withdrawn or lost such
right to dissent under the NCBCA, as the case may be but such shares shall, at
the Effective Time, be cancelled and shall become the right to perfect demand
for and to receive such consideration as may be determined to be due with
respect to such Dissenting Shares pursuant to and subject to the requirements
of Article 13 of the NCBCA. If any such holder shall have so failed to
perfect or shall have effectively withdrawn or lost such right, such holder's
shares of the Company's common stock shall thereupon be deemed to have been
converted into and to have become, as of the Effective Time, the right to
receive the Merger Consideration. If the holder of any Dissenting Shares shall
become entitled to receive payment for such shares under Article 13 of the
NCBCA, such payment shall be made by the Surviving Corporation.
(b) All holders of Preferred Stock who comply with
certain notice requirements and other procedures will have the right to dissent
and to be paid cash for the "fair value" of their shares to the extent
permitted under Article 13 of the NCBCA.
8. Termination. Prior to the Effective Time, this Plan
of Merger shall terminate and be abandoned upon a termination of the Agreement,
notwithstanding approval of this Plan of Merger by the shareholders of the
Company.
9. Conditions to Merger. The respective obligation of
each party to effect the Merger is subject to the satisfaction or waiver of the
following conditions:
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<PAGE> 95
(i) this Plan of Merger shall have been approved
and adopted by the affirmative vote of the holders of a majority of all shares
of common stock of the Company entitled to be cast in accordance with
applicable law and the Company's Articles of Incorporation, as amended; and
(ii) No statute, rule, regulation, executive
order, decree, temporary restraining order, preliminary or permanent injunction
or other order enacted, entered, promulgated, enforced or issued by any
governmental entity or other legal restraint or prohibition preventing the
consummation of the Merger or the transactions contemplated thereby shall be in
effect; provided, however, that, in the case of a decree, injunction or other
order, each of the parties shall have used reasonable efforts to prevent the
entry of any such injunction or other order and to appeal as promptly as
possible any decree, injunction or other order that may be entered.
10. Amendment. At any time before the Effective Time,
this Plan of Merger may be amended, provided that no such amendment made
subsequent to the submission of this Plan of Merger to the shareholders of the
Company shall be effective without the further approval of such shareholders.
5
<PAGE> 1
EXHIBIT (c)(2)
VOTING TRUST AGREEMENT
THIS VOTING TRUST AGREEMENT, dated as of ______, 1995, by and among
[ ] Corporation ("Parent"), [ ] Corporation, a Delaware Corporation and a
wholly-owned subsidiary of Parent ("Acquisition") and ___________, an attorney
admitted to practice law in the state of ____________ (the "Trustee") .
W I T N E S E T H:
WHEREAS, Parent is a non-carrier holding company which owns and
controls several subsidiary corporations engaged in motor carrier
transportation of property for hire or in brokerage of such transportation and
possessing certificates, licenses, and permits issued by the Interstate
Commerce Commission ("ICC") authorizing them to provide such transportation and
brokerage services;
WHEREAS, [ ] ("[ ]"), a [ ] corporation, is engaged in motor
carrier transportation of property for hire or in brokerage of such
transportation and which holds certificates, licenses, and permits issued by
the ICC authorizing such transportation and brokerage services, and is a
wholly-owned subsidiary of [ ] Corporation, ("[ ]");
WHEREAS, Parent, Acquisition and [ ] have executed an Agreement and
Plan of Merger ("Merger Agreement") pursuant to which Acquisition will acquire
[ ] and its subsidiary
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<PAGE> 2
corporations including, with ICC approval or exemption from approval, [ ];
WHEREAS, pursuant to the Merger Agreement, Acquisition has commenced a
tender offer ("Offer") to purchase all the issued and outstanding shares of
common stock of [ ] ("[ ] Common Stock") upon the terms and subject to the
conditions set forth in the Merger Agreement, and under such conditions shares
acquired pursuant to the Offer will constitute at least a majority of the
outstanding shares of [ ] Common Stock;
WHEREAS, Parent, Acquisition, and [ ] have filed a Notice of
Exemption pursuant to 49 C.F.R. Part 1186 ("Notice of Exemption") to permit
Parent and Acquisition to acquire control of [ ]'s ICC subsidiaries
[including [ ]] and have also applied for temporary authority pursuant
to 49 U.S.C. Section 11349 to permit Parent to operate through management the
properties of the ICC Subsidiaries [including [ ] pending the
effectiveness of the exemption;
WHEREAS, Acquisition wishes and intends, immediately upon acquiring
shares of [ ] Common Stock, pursuant to the Offer to cause [ ] to
deposit all of the issued and outstanding shares of common stock of [ ]
("Shares") in an independent, irrevocable voting trust, pursuant to the ICC's
rules, in order to avoid any allegation or assertion that Parent or Acquisition
is controlling [ ] in violation of the provisions of the Interstate Commerce
Act prior to the receipt of any required ICC approval or exemption;
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<PAGE> 3
WHEREAS, [ ] has also agreed in the Merger Agreement to cause
the Shares to be deposited in an independent, irrevocable voting trust;
WHEREAS, the Trustee is willing to act as voting trustee pursuant to
the terms of this Voting Trust Agreement and the rules of the Commission; and
WHEREAS, neither the Trustee nor any member of [his] law firm is an
officer or board member of or has any direct or indirect business arrangements
or dealings with Parent, Acquisition, [ ] or of their affiliates,
NOW THEREFORE, the Parties hereto agree as follows:
APPOINTMENT AND ASSIGNMENT
1. Parent and Acquisition hereby appoint ___________ as Trustee
hereunder, and ___________ hereby accepts said appointment and agrees to act
as Trustee hereunder all as provided more fully herein.
2. Parent and Acquisition agree that, immediately upon
Acquisition's acquisition of a majority of the outstanding shares of
[ ]'s Common Stock, Acquisition shall cause [ ] to transfer and
deliver to the Trustee all of its Shares, which shares shall be duly endorsed or
accompanied by proper instruments duly executed for transfer. Such Shares shall
be exchanged for one or more Trust Certificates substantially in the form
attached hereto as Exhibit A, with the blanks therein appropriately filled
(the "Trust Certificates").
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<PAGE> 4
3. This Voting Trust Agreement shall be irrevocable and shall
terminate only in accordance with the Provisions of Section 10 hereof.
4. The Trustee shall be entitled and it shall be [his] duty to
exercise any and all voting rights in respect of the Shares either in person or
by proxy, unless otherwise directed by the ICC or a court of competent
jurisdiction. Except as otherwise provided in this Agreement, the Trustee shall
not exercise the voting powers of the Shares in any way so as to create any
dependence or intercorporate relationship between Parent, Acquisition, or their
affiliates, on the one hand, and of [ ], on the other hand. The term
"affiliate" or "affiliates" wherever used in this Voting Trust Agreement shall
have the meaning specified in 49 U.S.C. Section 11343(c), as amended. The
Trustee shall use [his] best judgment to elect suitable directors of [ ]
and in exercising the voting rights and performing [his] duties provided for in
this Voting Trust Agreement. Notwithstanding the foregoing provisions of this
Paragraph 4, however, the registered holder of any Trust Certificate may at any
time -- but only with the prior approval of. the ICC -- instruct the Trustee in
writing to vote the shares of [ ] represented by such Trust Certificate in
any manner, in which case the Trustee shall vote such shares in accordance with
such instructions.
5. During the term of this Voting Trust Agreement the Trustee
shall not dispose of or in any way encumber the shares of
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<PAGE> 5
[ ] except as specifically provided herein or as directed by the ICC or
a court of competent jurisdiction.
6. The Trustee may take or approve any action as may be necessary
to cause [ ] to guarantee indebtedness of Parent or Acquisition incurred in
connection with or as a consequence of the acquisition of [ ] and its
subsidiaries and to pledge, assign, hypothecate, bargain, sell, convey,
mortgage, and grant a security interest in or a general lien upon all or any
part of the property and assets of [ ] as security therefor.
7. In the event the ICC grants the application for temporary
authority pursuant to 49 U.S.C. Section 11349 to permit Parent or
Acquisition to operate through management the properties of [ ] pending the
effectiveness of any approval or exemption from approval by the ICC of
permanent authority to control [ ], Parent or Acquisition shall have the
right to operate [ ] through management upon such grant subject to any
conditions the ICC may impose, and Trustee shall exercise [his] voting rights
and duties hereunder consistently with such temporary authority of Parent or
Acquisition and shall not interfere with such temporary authority.
8. All Trust Certificates shall be transferable on the books of
the Trustee by the registered holder upon the surrender thereof properly
assigned, in accordance with rules from time to time established for the
purpose by the Trustee. Until so transferred, the Trustee may treat the
registered holder as owner for all purposes. Each transferee of a Trust
Certificate issued
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<PAGE> 6
hereunder shall, by [his] acceptance thereof, assent to and become a party to
this Voting Trust Agreement, and shall assume all attendant rights and
obligations.
9. Pending the termination of this Voting Trust as hereinafter
provided, the Trustee shall, immediately following the receipt of each cash
dividend or cash distribution as may be declared and paid upon the Shares, pay
the same over to or as directed the holder of Trust Certificates hereunder as
then known to the Trustee. The Trustee shall receive and hold dividends and
distributions other than cash upon the same terms and conditions as the Shares
and shall issue Trust Certificates representing any new or additional
securities that may be paid as dividends upon the Shares or distributed to the
registered holders of Trust Certificates in proportion to their respective
interests.
10. (a) This Voting Trust is accepted by the Trustee subject
to the right hereby reserved in Acquisition at any time to cause the sale or
any other disposition of the whole or any part of the Shares, whether or not an
event described in subparagraph (b) below has occurred. The Trustee shall take
all actions reasonably requested by Acquisition (including, without limitation,
exercising all voting rights in respect of the Shares in favor of any proposal
or action necessary or desirable to effect, or consistent with the effectuation
of any proposal) with respect to any proposed sale or other disposition of the
whole or any part of the Shares by Acquisition. The Trustee shall at any time
upon the receipt of a direction from Acquisition, signed by
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<PAGE> 7
its President or one of its Vice Presidents and under its corporate seal
designating the person or entity to whom Acquisition has directly or indirectly
sold or otherwise disposed of the whole or any part of the Shares and
certifying that such person or entity is not an affiliate of Acquisition and
has all necessary regulatory authority, if any, to Purchase the Shares (upon
which certification the Trustee shall be entitled to rely), immediately
transfer to the person or entity therein named all of the Trustee's rights,
title, and interest in such amount of the Shares as may be set forth in said
direction. If the foregoing direction shall specify all of the Shares, then
following transfer of the Trustee's right, title, and interest therein, and in
the event of a sale thereof, upon delivery to or upon the order of Acquisition
of the proceeds of such sale, this Voting Trust shall cease and come to an end.
If the foregoing direction is as to only a part of the Shares, then this Voting
Trust shall cease as to said part upon such transfer, and receipt of proceeds
in the event of sale, but shall remain in full force and effect the remaining
part of the Shares, provided, however, that upon the receipt by Trustee of a
written opinion of counsel for Acquisition, a copy of which is submitted to the
ICC, stating that the transfer of voting rights in all the remaining Shares to
Acquisition would not give the Parent or Acquisition control of the Company
within the meaning of 49 U.S.C. Section 11343, this Voting Trust shall cease
and come to an end and all Shares and other property then held by the Trustee
shall be distributed to or upon
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<PAGE> 8
the order of Acquisition or the holder or holders of Trust Certificates. In the
event of a sale of Shares by Acquisition, the Trustee shall, to the extent the
consideration therefor is payable to or controllable by the Trustee, promptly
pay, or cause to be paid, upon the order of Acquisition the net proceeds of
such sale to the registered holders of the Trust Certificates in proportion to
their respective interests. It is the intention of this paragraph that no
violations of 49 U.S.C. Section 11343 will result from a termination of this
Voting Trust.
(b) In the event that (i) an exemption from the ICC
requirements for prior approval pursuant to 49 U.S.C. Section 11343 shall
become effective as to [ ]; or (ii) the ICC by final order shall
approve the acquisition of control of [ ] by Acquisition, the Parent or
any of its affiliates; or, (iii) in the event that Title 49 of the United
States Code, or other controlling law, is amended to allow Acquisition, the
Parent or their affiliates to acquire control of [ ] without obtaining
ICC or other governmental approval, upon delivery of an opinion of independent
counsel selected by the Trustee that no order or exemption of the ICC or other
governmental authority is required, or exemption, then the Trustee shall
transfer to or upon the order of Acquisition, the Parent or the holder or
holders of Trust Certificates hereunder as then known to the Trustee, its
rights, title, and interest in and to all of the Shares then held in accordance
with the terms, conditions and agreements of this Voting Trust Agreement and
not theretofore transferred by it
- 8 -
<PAGE> 9
As provided in subparagraph (a) hereof, and upon any such transfer or merger
this Voting Trust shall cease and come to an end.
(c) In the event that the ICC should issue an order
denying, or approving subject to conditions unacceptable to the Parent, any
Notice of Exemption or any application or Petition by Acquisition, the Parent
or their affiliates to acquire or otherwise exercise control over [ ], and
such order becomes final after judicial review or failure to appeal,
Acquisition shall use its best efforts to sell the Shares or all of the assets
of [ ] to one or more eligible purchasers, to sell or distribute the Shares in
one Offering or Distribution, or otherwise to dispose of the Shares, during a
period of two years after such order becomes final after judicial review or
failure to appeal. At all times, the Trustee shall continue to perform [his]
duties under this Voting Trust Agreement and, should Acquisition be
unsuccessful in [its] efforts to sell or distribute the Shares or all of the
assets of [ ], the Trustee shall as soon as Practicable sell the Shares for
cash to one or more eligible purchasers in such manner and for such price as
the Trustee in [his] discretion shall deem reasonable after consultation with
Acquisition. (An "eligible purchaser" hereunder shall be a person or entity
that is not affiliated with the Parent and which has all necessary regulatory
authority, if any is needed, to purchase the Shares.) Acquisition agrees to
cooperate with the Trustee in effecting such disposition and the
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<PAGE> 10
Trustee agrees to act in accordance with any direction made by Acquisition as
to any specific terms or method of disposition, to the extent not inconsistent
with the requirements of the terms of any ICC or court order. The proceeds of
the sale shall be distributed as ordered by Acquisition or on a pro rata basis,
to the holder or holders of the Trust Certificates hereunder as then known to
the Trustee. The Trustee may, in its reasonable discretion, require the
surrender to [him] of the Trust Certificates hereunder before paying to its
holder his share of the proceeds.
(d) Unless sooner terminated pursuant to any other
provision herein contained, this Voting Trust Agreement shall terminate on
___________, 2004, and may be extended by the parties hereto, so long
as no violation of 49 U.S.C. Section 11343 will result from such termination or
extension. All Shares and any other property held by the Trustee hereunder upon
such termination shall be distributed to or upon the order of Acquisition or
the holder or holders of Trust Certificates hereunder as then known to the
Trustee. The Trustee may, in [his] reasonable discretion, require the surrender
to [him] of the Trust Certificates hereunder before the release or transfer of
the stock interests evidenced thereby.
(e) The Trustee shall promptly inform the ICC of any
transfer or disposition of Shares pursuant to this Paragraph 10.
(f) The Trustee shall, upon direction by Acquisition,
take all actions that are necessary, appropriate or desirable to
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<PAGE> 11
cause a registration statement if required for the Shares under the Securities
Act of 1933, as amended, and/or an information statement for the Shares under
the Securities Exchange Act of 1934, as amended, and, in either case, a
registration statement or information statement under any other applicable
securities laws, to be filed and to become effective in accordance with the
terms set forth in the Merger Agreement. To the extent that registration is
required under the Securities Act of 1933, as amended, the Securities Exchange
Act of 1934, as amended, or any other applicable securities laws in respect of
any distribution of Shares as contemplated herein, Acquisition or the Parent
shall reimburse the Trustee for any reasonable expenses incurred by [him] and
indemnify and hold the Trustee harmless from and against any loss, liability,
cost or expense related thereto or arising therefrom.
(g) Except as provided in this Paragraph 10, or in
Paragraph 6, the Trustee shall not dispose of, or in any way encumber, the
Shares.
11. Neither the Trustee nor any member of [his] law firm serves as
(i) an officer or member of their respective boards of directors in common with
Acquisition, the Parent, or any affiliate of either, or (ii) have any direct or
indirect business arrangements or dealings, financial or otherwise, with
Acquisition, the Parent or any affiliate of either, other than dealings
pertaining to establishment and carrying out of this voting trust. Mere
investment in the stock or securities of
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<PAGE> 12
Acquisition or Parent or any affiliate of either by the Trustee or member of
[his] law firm, short of obtaining a controlling interest, will not be
considered a proscribed business arrangement or dealing, but in no event shall
any such investment by the Trustee or member of [his] law firm in voting
securities of Acquisition, the Parent or their affiliates exceed 5 percent of
the outstanding voting securities of Parent or their affiliates and in no event
shall the Trustee or member of [his] law firm hold a proportion of such voting
securities so substantial as to permit the Trustee or member of [his] law firm
in any way to control or direct the affairs of Acquisition, the Parent or their
affiliates.
12. The duties and responsibilities of the Trustee shall be
limited to those expressly set forth in this Voting Trust Agreement. The
Trustee shall be fully protected by acting in reliance upon any notice, advice,
direction or other document or signature believed by the Trustee to be
genuine. The Trustee shall not be responsible for the sufficiency or accuracy
of the form, execution, validity or genuineness of the Shares, or of any other
documents, or of any endorsement thereon, or for any lack of endorsement
thereon, or for any description therein, nor shall the Trustee be responsible
for or liable in any respect on account of the identity, authority or rights of
the persons executing or delivering or purporting to execute or deliver any
such Shares or other document or endorsement or this Voting Trust Agreement,
except for the execution and delivery of this Voting
- 12 -
<PAGE> 13
Trust Agreement by this Trustee. Acquisition and the Parent agree that they
will at all times jointly and severally protect, indemnify and save harmless
the Trustee from any loss, damages, liability, cost or expense of any kind or
character whatsoever in connection with this Voting Trust except those, if any,
resulting from the gross negligence or willful misconduct of the Trustee, and
will at all times themselves undertake, assume full responsibility for, and pay
on a current basis, but at least quarterly, all cost and expense of any suit or
litigation of any character, whether or not involving a third party, including
any proceedings before the ICC, with respect to the Shares or this Voting Trust
Agreement, and if the Trustee shall be made a party thereto, or be the subject
of an investigation or proceeding (whether formal or informal), Acquisition or
the Parent will pay all costs, damages and expenses, including reasonable
counsel fees, to which the Trustee may be subject by reason thereof; provided,
however, that Acquisition and the Parent shall not be responsible for the cost
and expense of any suit that the Trustee shall settle without first obtaining
the Parent's written consent. The indemnification obligations of Acquisition
and the Parent shall survive any termination of this Voting Trust Agreement or
the removal, resignation or other replacement of the Trustee. The Trustee may
consult with counsel selected by [him] and the opinion of such counsel shall be
full and complete authorization and protection in respect of any action taken
or
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<PAGE> 14
omitted or suffered by the Trustee hereunder in good faith and in accordance
with such opinion.
13. To the extent requested to do so by Acquisition or any
registered holder of a Trust Certificate, the Trustee shall furnish to the
party making such request full information with respect to (i) all property
theretofore delivered to it as Trustee, (ii) all property then held by it as
Trustee, and (iii) all action theretofore taken by it as Trustee.
14. The Trustee, or any trustee hereafter appointed, may at any
time resign by giving sixty days' written notice of resignation to the Parent
and the ICC. The Parent shall, at least fifteen days prior to the effective
date of such notice, appoint a successor trustee which shall satisfy the
requirements of Paragraph 11 hereof. If no successor trustee shall have been
appointed and shall have accepted appointment at least fifteen days prior to
the effective date of such notice of resignation, the resigning Trustee may
petition any authority or court of competent jurisdiction for the appointment
of a successor trustee. Upon written assumption by the successor trustee of the
Trustee's powers and duties hereunder, a copy of the assumption shall be
delivered by the Trustee to the Parent and the ICC and all registered holders
of Trust Certificates shall be notified of such assumption, whereupon the
Trustee shall be discharged of [his] powers and duties hereunder and the
successor trustee shall become vested herewith. In the event of any material
violation by the Trustee of the terms and conditions of this Voting Trust
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<PAGE> 15
Agreement, the Trustee shall become disqualified from acting as trustee
hereunder as soon as a successor trustee shall have been selected in the manner
provided by this paragraph.
15. This Voting Trust Agreement may from time to time be modified
or amended by agreement executed by the Trustee, Acquisition, the Parent and
all registered holders of the Trust Certificates under one or more of the
following circumstances: (i) pursuant to an order of the ICC, (ii) with the
prior approval of the ICC, (iii) in order to comply with any order of the ICC
or (iv) upon receipt of an opinion of counsel satisfactory to the Trustee and
the holders of Trust Certificates that an order of the ICC approving such
modification or amendment is not required and that the amendment is consistent
with the ICC's regulations regarding voting trusts.
16. The provisions of this Voting Trust Agreement and of the
rights and obligations of the parties hereunder shall be governed by the laws
of the State of Delaware, except that to the extent any provision hereof may be
found inconsistent with the Interstate Commerce Act or regulations promulgated
thereunder by the ICC, such Act and regulations shall control and such
provision hereof shall be given effect only to the extent permitted by such Act
and regulations. In the event that the ICC shall, at any time hereafter by
final order, find that compliance with law requires any other or different
action by the Trustee than is provided herein, the Trustee shall act in
accordance with
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<PAGE> 16
such final order instead of the provisions of this Voting Trust Agreement.
17. This Voting Trust Agreement is executed in duplicate, each of
which shall constitute an original, and one of which shall be retained by the
Parent and the other shall be held by the Trustee.
18. A copy of this Voting Trust Agreement and any amendments or
modifications thereto shall be filed with the ICC by Acquisition.
19. This Voting Trust Agreement shall be binding upon the
successors and assigns to the parties hereto, including without limitation
successors to Acquisition and Parent by merger, consolidation or otherwise.
20. As used in this Voting Trust Agreement, the terms "Interstate
Commerce Commission, and "ICC" shall refer to the Interstate Commerce
Commission and any successor agency to which the regulatory functions pertinent
to this voting Trust Agreement may be transferred.
21. (a) Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be mailed by U.S.
mail, certified mail, return receipt requested or by Federal Express, Express
Mail, or similar overnight delivery or courier service or delivered (in person
or by telecopy) against receipt to the party to whom it is to be given at the
address of such party set forth below (or to such other address
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<PAGE> 17
as the party shall have given notice of) with a copy to each of the other
parties hereto:
To the Trustee:
To the Parent:
To Acquisition:
(b) Unless otherwise specifically provided herein, any
notice to or communication with the holders of the Trust Certificates hereunder
shall be deemed to be sufficiently given or made if enclosed in postpaid
envelopes (regular and not registered mail) addressed to such holders at their
respective addresses appearing on the Trustee's transfer books, and deposited
in any post office or post office box. The addresses of the holders of Trust
Certificates, as shown on the Trustee's transfer books, shall in all cases be
deemed to be the addresses of Trust Certificate holders for all purposes under
this Voting Trust Agreement, without regard to what other or different
addresses the Trustee may have for any Trust Certificate holder on any other
books or records of the Trustee. Every notice so given of mailing shall be the
date such notice is deemed given for all purposes.
22. Each of the parties hereto acknowledges and agrees that in the
event of any breach of this Voting Trust Agreement, each
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<PAGE> 18
non-breaching party would be irreparably and immediately harmed and could not
be made whole by monetary damages. It is accordingly agreed that the parties
hereto (a) will waive, in any action for specific performance, the defense of
adequacy of a remedy at law and (b) shall be entitled, in addition to any other
remedy to which they may be entitled at law or in equity, to compel specific
performance of this Voting Trust Agreement in any action instituted in any
state or federal court sitting in Wilmington, Delaware. Each party hereto
consents to personal jurisdiction in any such action brought in any state or
federal court sitting in Wilmington, Delaware.
IN WITNESS WHEREOF, [ ] Corporation and [ ] Corporation have
caused this Voting Trust Agreement to be executed by their Treasurers and their
corporate seals to be affixed, attested by their Secretaries, and has caused
this Voting Trust Agreement to be executed by one of its duly authorized
corporate officers and its corporate seal to be affixed, attested to by its
Corporate Secretary or one of its Assistant Corporate Secretaries, the day and
year first above written.
Attest: [ ] CORPORATION
__________________________ By___________________________
Secretary Treasurer
Attest: [ ] CORPORATION
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<PAGE> 19
___________________________ By____________________________
Secretary Treasurer
Attest: ____________________________
___________________________ By____________________________
Voting Trustee
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<PAGE> 20
EXHIBIT A
No.________ ___________
Shares
VOTING TRUST CERTIFICATE
for
COMMON STOCK,
______ PAR VALUE
of
_________________________
INCORPORATED UNDER THE LAWS OF THE STATE OF ___________
THIS IS TO CERTIFY that _________ will be entitled, on the surrender
of this Certificate, to receive on the termination of the Voting Trust
Agreement hereinafter referred to, or otherwise as provided in Paragraph 8 of
said Voting Trust Agreement, a certificate or certificates for _________ share
of the Common Stock, $1 par value, of ________ , a ______________ corporation
(the "Company"). This Certificate is issued pursuant to, and the rights of the
holder hereof are subject to and limited by, the terms of a Voting Trust
Agreement, dated as of ___________, 1995, executed by [ ] Corporation, a
Delaware Corporation, [ ] corporation, a Delaware Corporation, and
___________ , as Voting Trustee, a copy of which Voting Trust Agreement is on
file in the registered office of said corporation at ______________, and open
to inspection of any stockholder of the Company and the holder hereof. The
Voting Trust Agreement, unless earlier terminated (or extended) pursuant to the
terms thereof, will terminate on ___________, 2004, so long as no violation of
49 U.S.C. Section 11343 will result from such termination.
The holder of this Certificate shall be entitled to the benefits of
said Voting Trust Agreement, including the right to receive payment equal to
the cash dividends, if any, paid by the Company with respect to the number of
shares represented by this Certificate.
<PAGE> 21
This Certificate shall be transferable only on the books of the
undersigned Voting Trustee or any successor, to be kept by said Trustee or
successor, on surrender hereof by the registered holder in person or by
attorney duly authorized in accordance with the provisions of said Voting Trust
Agreement, and until so transferred, the Voting Trustee may treat the
registered holder as the owner of this Voting Trust Certificate for all
purposes whatsoever, unaffected by any notice to the contrary.
By accepting this Certificate, the holder hereof assents to all the
provisions of, and becomes a party to, said Voting Trust Agreement.
IN WITNESS WHEREOF, the Voting Trustee has caused this Certificate to
be signed.
Dated:
By____________________________
Voting Trustee
