<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
TRAK AUTO CORPORATION
(Name of Issuer)
TRAK AUTO CORPORATION
(Name of Person(s) Filing Statement)
Common Stock, Par Value $0.01 Per Share
(Title of Class of Securities)
892887100
CUSIP (Number of Class of Securities)
------------------
Robert A. Marmon
Principal Financial Officer
Trak Auto Corporation
3300 75th Avenue
Landover, Maryland 20785
(301) 731-1200
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of the Person(s) Filing Statement)
Copy to:
Michael R. Klein, Esq.
Thomas W. White, Esq.
Wilmer, Cutler & Pickering
2445 M Street, N.W.
Washington, D.C. 20037
(202) 663-6000
December 21, 1994
(Date Tender Offer First Published, Sent or Given to Security Holders)
Calculation of Filing Fee
<TABLE>
<S> <C>
Transaction valuation* Amount of filing fee
$26,250,000 $5,250
</TABLE>
* Assumes purchase of 1,500,000 shares at $17.50 per share.
/ / 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.
<TABLE>
<S> <C>
Amount Previously Paid: N/A Filing Party: N/A
Form or Registration No.: N/A Date Filed: N/A
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
ITEM 1. SECURITY AND ISSUER.
(a) The name of the issuer is Trak Auto Corporation, a Delaware corporation
(the "Company"), which has its principal executive offices at 3300 75th Avenue,
Landover, Maryland 20785.
(b) This Schedule 13E-4 relates to the offer by the Company to purchase
1,500,000 outstanding shares of Common Stock, par value $0.01 per share, of the
Company (the "Shares") at a price, net to the seller in cash, of $17.50 per
Share, upon the terms and subject to the conditions set forth in the Offer to
Purchase dated December 21, 1994 (the "Offer to Purchase"), and related Letter
of Transmittal, copies of which are attached hereto as Exhibits (a)(1) and
(a)(2), respectively. The information contained in the "Introduction", "Section
1. Number of Shares; Proration", "Section 8. Purpose of the Offer; Certain
Effects of the Offer" and "Section 12. Interest of Directors and Executive
Officers; Transactions and Arrangements Concerning the Shares" of the Offer to
Purchase is incorporated herein by reference.
(c) The information set forth in the "Introduction" and "Section 7. Price
Range of Shares; Dividends" of the Offer to Purchase is incorporated herein by
reference.
(d) This statement is being filed by the Issuer.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in "Section 9. Source and Amount of Funds" of
the Offer to Purchase is incorporated herein by reference.
(b) Not applicable.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
(a)-(j) The information set forth in the "Introduction", "Section 8.
Purpose of the Offer; Certain Effects of the Offer", "Section 11. Certain
Information Concerning the Company" and "Section 12. Interest of Directors and
Executive Officers; Transactions and Arrangements Concerning the Shares" of the
Offer to Purchase is incorporated herein by reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth in "Section 8. Purpose of the Offer, Certain
Effects of the Offer" and "Section 12. Interest of Directors and Executive
Officers; Transactions and Arrangements Concerning the Shares" of the Offer to
Purchase is incorporated herein by reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE ISSUER'S SECURITIES.
The information set forth in the "Introduction" and "Section 12. Interest
of Directors and Executive Officers; Transactions and Arrangements Concerning
the Shares" of the Offer to Purchase is incorporated herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in "Section 16. Fees and Expenses" of the Offer
to Purchase is incorporated herein by reference.
ITEM 7. FINANCIAL INFORMATION.
(a)-(b) The financial information set forth in "Section 11. Certain
Information Concerning the Company" of the Offer to Purchase is incorporated
herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
(a) The information set forth in "Section 11. Certain Information
Concerning the Company" of the Offer to Purchase is incorporated herein by
references.
(b) The information set forth in "Section 13. Certain Legal Matters;
Regulatory Approvals" of the Offer to Purchase is incorporated herein by
reference.
<PAGE> 3
(c) The information set forth in "Section 8. Purpose of the Offer; Certain
Effects of the Offer" of the Offer to Purchase is incorporated herein by
reference.
(d) Not applicable.
(e) Reference is hereby made to the Offer to Purchase and the related
Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1)
and (a)(2), respectively, and incorporated in their entirety herein by
reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C>
99(a)(1) Form of Offer to Purchase dated December 21, 1994.
99(a)(2) Form of Letter of Transmittal.
99(a)(3) Form of Notice of Guaranteed Delivery.
99(a)(4) Form of letter to brokers, dealers, commercial banks, trust companies and
other nominees dated December 21, 1994.
99(a)(5) Form of letter to clients for use by brokers, dealers, commercial banks,
trust companies and other nominees dated December 21, 1994.
99(a)(6) Form of letter to shareholders from the Chairman and Chief Executive Officer
of the Company dated December 21, 1994.
99(a)(7) Form of Press Release dated December 20, 1994.
99(a)(8) Form of Summary Advertisement dated December 21, 1994.
99(b) Not applicable.
99(c) Not applicable.
99(d) Not applicable.
99(e) Not applicable.
99(f) Not applicable.
</TABLE>
<PAGE> 4
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.
TRAK AUTO CORPORATION
By: /s/ Robert A. Marmon
--------------------------------------------
Title: Principal Financial Officer
Dated: December 21, 1994
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- -------- ------------------------------------------------------------------------
<C> <C> <S>
99(a)(1) -- Form of Offer to Purchase dated December 21, 1994.
99(a)(2) -- Form of Letter of Transmittal.
99(a)(3) -- Form of Notice of Guaranteed Delivery.
99(a)(4) -- Form of letter to brokers, dealers, commercial banks, trust companies
and other nominees dated December 21, 1994.
99(a)(5) -- Form of letter to clients for use by brokers, dealers, commercial banks,
trust companies and other nominees dated December 21, 1994.
99(a)(6) -- Form of letter to shareholders from the Chairman and Chief Executive
Officer of the Company dated December 21, 1994.
99(a)(7) -- Form of Press Release dated December 20, 1994.
99(a)(8) -- Form of Summary Advertisement dated December 21, 1994.
</TABLE>
<PAGE> 1
TRAK AUTO CORPORATION
OFFER TO PURCHASE FOR CASH
1,500,000 SHARES OF ITS COMMON STOCK
AT A PURCHASE PRICE OF $17.50 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME,
ON MONDAY, JANUARY 23, 1995, UNLESS THE OFFER IS EXTENDED.
Trak Auto Corporation, a Delaware corporation (the "Company"), is offering
to purchase 1,500,000 shares of its Common Stock, par value $0.01 per share (the
"Shares"), at a price, net to the seller in cash, of $17.50 per Share (the
"Purchase Price"), upon the terms and subject to the conditions set forth in
this Offer to Purchase and in the related Letter of Transmittal (which together
constitute the "Offer").
If, prior to the Expiration Date, more than 1,500,000 Shares (or such
greater number of Shares as the Company may elect to purchase) are properly
tendered and not withdrawn, the Company will under certain circumstances, upon
the terms and subject to the conditions of the Offer, accept Shares for purchase
first from Odd Lot Owners (as defined in Section 2) who properly tender their
Shares and then on a pro rata basis from other shareholders whose Shares are
properly tendered and not withdrawn. Any shareholder may tender Shares subject
to the condition that all or a specified minimum number of Shares (which may be
represented by designated stock certificates) or none of such Shares be
purchased.
------------------------
THE OFFER IS CONDITIONED UPON A MINIMUM OF 1,500,000 SHARES BEING TENDERED
AND NOT WITHDRAWN, ON THERE BEING AT LEAST 500 BENEFICIAL OWNERS
OF SHARES FOLLOWING COMPLETION OF THE OFFER, AND ON
CERTAIN OTHER CONDITIONS. SEE SECTION 6.
------------------------
The Shares are quoted on the Nasdaq Stock Market ("Nasdaq"). On December
19, 1994, the last full trading day prior to the announcement of the Offer, the
closing per Share sales price as reported by Nasdaq was $15 1/2. On December 20,
1994, the last full trading day prior to the commencement of the Offer, the
closing per Share sales price as reported by Nasdaq was $16 7/8. SHAREHOLDERS
ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. SEE SECTION 7.
------------------------
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES.
DART GROUP CORPORATION ("DART"), THE BENEFICIAL OWNER OF
APPROXIMATELY 3,962,245 SHARES (64.8% OF THE ISSUED AND
OUTSTANDING SHARES AS OF DECEMBER 20, 1994), OFFICERS
AND DIRECTORS OF WHICH ARE OFFICERS AND DIRECTORS OF
THE COMPANY, HAS ADVISED THE COMPANY THAT IT DOES
NOT INTEND TO TENDER ANY SHARES IN RESPONSE TO
THE OFFER. THE COMPANY HAS BEEN ADVISED THAT
NO DIRECTOR OR EXECUTIVE OFFICER OF THE
COMPANY OR DART INTENDS TO TENDER ANY
SHARES PURSUANT TO THE OFFER.
SHAREHOLDERS MUST MAKE THEIR
OWN DECISIONS WHETHER TO
TENDER SHARES AND, IF
SO, HOW MANY SHARES
TO TENDER.
------------------------
The Dealer Manager for the Offer is:
WASSERSTEIN PERELLA & CO., INC.
DECEMBER 21, 1994
<PAGE> 2
IMPORTANT
Any shareholder desiring to tender all or any portion of his Shares should
either (1) complete and sign the Letter of Transmittal (or a facsimile thereof)
in accordance with the instructions in the Letter of Transmittal and deliver it
and all other required documents to The Bank of New York (the "Depositary") and
either mail or deliver the stock certificates for such Shares to the Depositary
or follow the procedure for book-entry delivery set forth in Section 3, or (2)
request his broker, dealer, commercial bank, trust company or other nominee to
effect the transaction for him. Shareholders having Shares registered in the
name of a broker, dealer, commercial bank, trust company or other nominee should
contact such person or institution if they desire to tender such Shares.
Shareholders desiring to tender Shares and whose certificates for such Shares
are not immediately available or who cannot comply with the procedure for
book-entry transfer by the expiration of the Offer must tender such Shares by
following the procedures for guaranteed delivery set forth in Section 3.
SHAREHOLDERS MUST PROPERLY COMPLETE THE LETTER OF TRANSMITTAL IN ORDER TO EFFECT
A VALID TENDER OF THEIR SHARES.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their addresses and telephone numbers set forth
on the back cover of this Offer to Purchase, and additional copies of this Offer
to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery may
be obtained from the Information Agent.
THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON
BEHALF OF THE COMPANY AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM
TENDERING SHARES PURSUANT TO THE OFFER. THE COMPANY HAS NOT AUTHORIZED ANY
PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH
THE OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER
OF TRANSMITTAL. IF GIVEN OR MADE, ANY SUCH RECOMMENDATION OR ANY SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
- -------------------------------------------------------------------------------------- ----
<S> <C>
INTRODUCTION.......................................................................... 3
1. NUMBER OF SHARES; PRORATION....................................................... 4
2. TENDERS BY HOLDERS OF FEWER THAN 100 SHARES....................................... 6
3. PROCEDURE FOR TENDERING SHARES.................................................... 6
4. WITHDRAWAL RIGHTS................................................................. 8
5. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES..................................... 9
6. CERTAIN CONDITIONS OF THE OFFER................................................... 10
7. PRICE RANGE OF SHARES; DIVIDENDS.................................................. 12
8. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER................................ 12
9. SOURCE AND AMOUNT OF FUNDS........................................................ 13
10. SHARES OUTSTANDING AND SIGNIFICANT SHAREHOLDERS................................... 13
11. CERTAIN INFORMATION CONCERNING THE COMPANY........................................ 14
12. INTEREST OF DIRECTORS AND EXECUTIVE OFFICERS; TRANSACTIONS
AND ARRANGEMENTS CONCERNING THE SHARES............................................ 18
13. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS....................................... 18
14. CERTAIN FEDERAL INCOME TAX CONSEQUENCES........................................... 19
15. EXTENSION OF THE OFFER; TERMINATION; AMENDMENTS................................... 22
16. FEES AND EXPENSES................................................................. 23
17. MISCELLANEOUS..................................................................... 23
</TABLE>
2
<PAGE> 3
TO THE HOLDERS OF COMMON STOCK OF
TRAK AUTO CORPORATION:
INTRODUCTION
The Company hereby invites its shareholders to tender Shares to the Company
at a price, net to the seller in cash, of $17.50 per Share (the "Purchase
Price"), upon the terms and conditions set forth in this Offer. The Company
seeks to purchase 1,500,000 Shares. All Shares properly tendered prior to the
Expiration Date (as defined in Section 1) and not withdrawn will be purchased at
the Purchase Price, net to the seller in cash, upon the terms and subject to the
conditions of the Offer, including the proration terms, the minimum Shares
condition and the minimum beneficial owners condition contained herein.
THE OFFER IS CONDITIONED UPON A MINIMUM OF 1,500,000 SHARES BEING TENDERED
AND NOT WITHDRAWN, ON THERE BEING AT LEAST 500 BENEFICIAL OWNERS OF SHARES
FOLLOWING COMPLETION OF THE OFFER, AND ON CERTAIN OTHER CONDITIONS. SEE SECTION
6.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. DART
GROUP CORPORATION ("DART"), THE BENEFICIAL OWNER OF APPROXIMATELY 3,962,245
SHARES (64.8% OF THE ISSUED AND OUTSTANDING SHARES AS OF DECEMBER 20, 1994),
OFFICERS AND DIRECTORS OF WHICH ARE OFFICERS AND DIRECTORS OF THE COMPANY, HAS
ADVISED THE COMPANY THAT IT DOES NOT INTEND TO TENDER ANY SHARES IN RESPONSE TO
THE OFFER. THE COMPANY HAS BEEN ADVISED THAT NO DIRECTOR OR EXECUTIVE OFFICER OF
THE COMPANY OR DART INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER.
SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES TO TENDER.
Each shareholder who has properly tendered and not withdrawn Shares will
receive the Purchase Price, net to the shareholder in cash, for all Shares
purchased, upon the terms and subject to the conditions of the Offer, including
the provisions relating to proration and the conditions described herein. If,
prior to the Expiration Date, more than 1,500,000 Shares (or such greater number
as the Company may elect to purchase) are properly tendered and not withdrawn,
the Company will, upon the terms and subject to the conditions of the Offer,
accept Shares for purchase first from Odd Lot Owners (as defined in Section 2)
who properly tender their Shares and then on a pro rata basis from other
shareholders whose Shares are properly tendered and not withdrawn.
Notwithstanding the foregoing, the Company reserves the right not to accept
Shares from Odd Lot Owners on a preferential basis under certain circumstances,
as described below. Any shareholder may tender Shares subject to the condition
that all or a specified minimum number of Shares (which may be represented by
designated stock certificates) or none of such Shares be purchased. See Section
1. The Company will return all Shares not purchased, including Shares not
purchased because of proration or conditional tenders. 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 Company pursuant to the Offer. The Company will pay
all fees and expenses of the Depositary, D.F. King & Co., Inc. (the "Information
Agent") and Wasserstein Perella & Co., Inc. (the "Dealer Manager") in connection
with the Offer.
As of December 20, 1994, there were 6,113,646 Shares outstanding, and
229,216 Shares were reserved for issuance in connection with outstanding stock
options under the Company's stock option plans. The 1,500,000 Shares that the
Company is offering to purchase represent approximately 24.5% of the Shares
outstanding at December 20, 1994, and approximately 23.6% of the fully-diluted
Shares outstanding as of such date. The Shares are quoted on Nasdaq under the
symbol "TRKA." On December 19, 1994, the last full trading day prior to the
announcement of the Offer, the closing per Share sales price as reported by
Nasdaq was $15 1/2. On December 20, 1994, the last full trading day prior to the
commencement of the Offer, the closing per Share sales price as reported by
Nasdaq was $16 7/8. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS
FOR THE SHARES. See Section 7.
3
<PAGE> 4
Shares acquired by the Company pursuant to the Offer will be retired by the
Company.
The Board of Directors of the Company has determined to make this Offer
because it believes that the Offer is an attractive investment of the Company's
cash and because the Company will realize tax deferrals if the Offer is
completed. The Company believes that the current market price of the Shares does
not adequately reflect the value of the Company's business, assets and
prospects, and that the purchase of the Shares at this time is an attractive
investment that will benefit the Company and its continuing shareholders. In
addition, as a result of the fact that Dart (which owned approximately 64.8% of
the issued and outstanding Shares as of December 20, 1994) will not tender any
Shares in response to the Offer, Dart will own in excess of 80% of the issued
and outstanding Shares following completion of the Offer, allowing Dart and the
Company to be consolidated for federal income tax purposes. Consolidation will
eliminate one level of federal income taxation and thereby result in current tax
savings to the Company, Dart and their respective shareholders. An effect of the
consolidation will be that net operating losses of Dart will offset income of
the Company. The Company will reimburse Dart for the use of these net operating
losses on a deferred basis. The Offer gives stockholders who are considering the
sale of all or a portion of their Shares an opportunity to sell such Shares for
a higher price than that available in the open market immediately prior to the
announcement of the Offer, without the usual transaction costs associated with
market sales.
1. NUMBER OF SHARES; PRORATION
Upon the terms and subject to the conditions of the Offer, the Company will
accept for payment and purchase 1,500,000 Shares at the Purchase Price. If the
Offer is oversubscribed, Shares tendered prior to the Expiration Date will be
subject to proration. The proration period also expires on the Expiration Date.
The term "Expiration Date" means 12:00 Midnight, New York City time, on Monday,
January 23, 1995, unless the Company, in its sole discretion, shall have
extended the period of time during which the Offer is open, in which event the
term "Expiration Date" shall refer to the latest time and date at which the
Offer, as so extended by the Company, shall expire. For a description of the
Company's right to extend the period of time during which the Offer is open, and
to delay, terminate or amend the Offer, see Section 15.
The Company reserves the right, in its sole discretion, to purchase
additional outstanding Shares, or to reduce the number of Shares it shall
purchase, pursuant to the Offer. If (i) the Company increases or decreases the
price to be paid for Shares, increases the number of Shares being sought and
such increase in the number of Shares being sought exceeds 2% of the outstanding
Shares or decreases the number of Shares being sought and (ii) the Offer is
scheduled to expire at any time earlier than the expiration of a period ending
on the tenth business day from, and including, the date that notice of such
increase or decrease is first published, sent or given in the manner described
in Section 15, the Offer will be extended until the expiration of such 10
business-day period. For purposes of the Offer, a "business day" means any day
other than a Saturday, Sunday or federal holiday and consists of the time period
from 12:01 A.M. through 12:00 Midnight, New York City time.
All Shares purchased pursuant to the Offer will be purchased at the
Purchase Price. All Shares not purchased pursuant to the Offer, including Shares
not purchased because of proration or conditional tenders and Shares tendered
and withdrawn, will be returned to the tendering shareholders at the Company's
expense as promptly as practicable (which, in the event of proration, is
expected to be up to approximately seven business days) following the Expiration
Date or as promptly as practicable following withdrawal, as the case may be.
If the number of Shares properly tendered prior to the Expiration Date (and
not withdrawn in accordance with Section 4) is equal to 1,500,000 Shares (or
such greater number of Shares as the Company may elect to purchase pursuant to
the Offer) and if the Company determines that, after purchase of the tendered
Shares, there will be at least 500 beneficial owners of Shares, the Company
will, upon the terms and subject to the conditions of the Offer, purchase at the
Purchase Price all Shares so tendered. If the number of Shares properly tendered
prior to the Expiration Date (and not withdrawn in accordance with Section 4) is
less than 1,500,000 Shares or if the Company determines that there would be
fewer than 500 beneficial owners of
4
<PAGE> 5
Shares if tendered Shares were purchased, the Offer will not be completed (in
accordance with the conditions set forth in Section 6) and the Company will
promptly return all tendered Shares.
Upon the terms and subject to the conditions of the Offer, in the event
that prior to the Expiration Date more than 1,500,000 Shares (or such greater
number of Shares as the Company elects to purchase) are properly tendered and
not withdrawn, the Company will accept Shares for purchase in the following
order of priority:
(a) first, all Shares properly tendered prior to the Expiration Date
(and not withdrawn) by any Odd Lot Owner (as defined in Section 2) who:
(1) tenders all Shares beneficially owned by such Odd Lot Owner
(partial tenders and conditional tenders will not qualify for this
preference); and
(2) completes the section entitled "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery;
and
(b) then, after purchase of all of the foregoing Shares, all other
Shares properly and unconditionally tendered, and all other Shares properly
and conditionally tendered for which the condition can be satisfied on the
basis of the number of Shares tendered and the conditions thereto, in each
case before the Expiration Date (and not withdrawn), on a pro rata basis,
if necessary (with adjustments to avoid purchases of fractional Shares);
and
(c) then, if all of the foregoing Shares are less than the number of
Shares the Company will accept for payment and no tenders have been
accepted on a pro rata basis, such additional number of Shares properly and
conditionally tendered before the Expiration Date (and not withdrawn) as to
which the condition was not satisfied as are necessary to reach the number
of Shares the Company will accept for payment. If such conditional tenders
are accepted, the Company will select conditional tenders by lot only from
shareholders who tender all Shares owned by them and will limit its
purchase in each case to the designated minimum number of Shares to be
purchased.
Notwithstanding the foregoing, the Company reserves the right not to accept
Shares tendered by Odd Lot Owners on a preferential basis (and instead to accept
such Shares on a pro rata basis with Shares tendered by other owners) if the
Company, in its sole discretion, determines that accepting such Shares on a
preferential basis would cause the minimum beneficial owners condition not to be
satisfied.
In the event that proration of tendered Shares is required, the Company
will determine the final proration factor as promptly as practicable after the
Expiration Date. Proration for each shareholder tendering Shares other than Odd
Lot Owners and shareholders whose Shares are purchased under (c) above shall be
based on the ratio of the number of Shares tendered by such shareholder to the
total number of Shares tendered by all shareholders other than Odd Lot Owners
and conditional tenders under (c) above. Although the Company does not expect to
be able to announce the final results of such proration until approximately
seven business days after the Expiration Date, it will announce preliminary
results of proration by press release as promptly as practicable after the
Expiration Date. Shareholders may obtain such preliminary information from the
Information Agent and may be able to obtain such information from their brokers.
As described in Section 14, the number of Shares that the Company will
purchase from a shareholder may affect the federal income tax consequences to
the shareholder of such purchase and therefore may be relevant to a
shareholder's decision whether to tender Shares. Shareholders may designate the
order in which their Shares shall be purchased in the event less than all of the
Shares tendered are purchased as a result of proration.
If as a result of the number of Shares tendered and the conditions thereto
the number of Shares to be purchased from any shareholder making a conditional
tender is reduced below the minimum number specified by such shareholder, such
tender will automatically be regarded as withdrawn, except as provided above,
and all Shares tendered by such shareholder will be returned as promptly as
practicable after the Expiration Date at the Company's expense.
5
<PAGE> 6
2. TENDERS BY HOLDERS OF FEWER THAN 100 SHARES
For purposes of the Offer, the term "Odd Lots" means all Shares properly
tendered, in accordance with the procedures set forth in Section 3, by the
Expiration Date and not withdrawn, by or on behalf of shareholders ("Odd Lot
Owners") who beneficially held, as of the close of business on December 20,
1994, an aggregate of fewer than 100 Shares. As set forth above, Odd Lots will
under certain circumstances be accepted for purchase before any proration. In
order to qualify for this preference, an Odd Lot Owner must properly tender all
Shares beneficially owned by him and must not make a conditional tender. Partial
tenders will not qualify for this preference. The preference is not available to
holders of 100 or more Shares, even if holders have separate stock certificates
for fewer than 100 shares. ANY ODD LOT OWNER WISHING TO TENDER ALL SHARES
BENEFICIALLY OWNED FREE OF PRORATION MUST COMPLETE THE SECTION ENTITLED "ODD
LOTS" IN THE LETTER OF TRANSMITTAL AND, IF APPLICABLE, ON THE NOTICE OF
GUARANTEED DELIVERY. Shareholders owning an aggregate of less than 100 Shares,
all of whose Shares are purchased pursuant to the Offer, not only will avoid the
payment of brokerage commissions, but also will avoid any applicable odd-lot
discounts payable on a sale of their Shares in a Nasdaq transaction.
3. PROCEDURE FOR TENDERING SHARES
PROPER TENDER OF SHARES. To tender Shares pursuant to the Offer, (i) a
properly completed and duly executed Letter of Transmittal (or manually executed
facsimile thereof) with any required signature guarantees 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 the Shares to be tendered must be
transmitted to and received by the Depositary at one of such addresses or such
Shares must be tendered pursuant to the procedures for book-entry transfer
described below (and a confirmation of such tender received by the Depositary),
in each case by the Expiration Date, or (ii) the guaranteed delivery procedure
described below must be followed.
In addition, Odd Lot Owners who tender all their Shares must complete the
section entitled "Odd Lots" in the Letter of Transmittal and, if applicable, on
the Notice of Guaranteed Delivery in order to qualify for the preferential
treatment which may be available to Odd Lot Owners as set forth in Section 1.
If any shareholder tenders Shares held by him and does not wish to have
such Shares subject to proration that would result in the purchase of fewer than
a specified number of Shares, such shareholder may tender Shares subject to the
condition that all or a specified minimum number of Shares or none be purchased.
Any shareholder desiring to make such a conditional tender should so indicate in
the box captioned "Conditional Tender" on the Letter of Transmittal and, if
applicable, on the Notice of Guaranteed Delivery. It is the tendering
shareholder's responsibility to determine the minimum number of Shares to be
purchased. SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE
EFFECT OF PRORATION OF THE OFFER AND THE ADVISABILITY OF MAKING A CONDITIONAL
TENDER. See Section 14. Shareholders should note that conditional tenders will
not be selected by lot pursuant to paragraph (c) in the description of proration
in Section 1 unless they tender all Shares held by them.
Notwithstanding any other provision hereof, payment for Shares tendered and
accepted for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of certificates for such Shares (or a timely
confirmation of a book-entry transfer of such Shares into the Depositary's
account at one of the Book-Entry Transfer Facilities, as defined below), a
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.
BOOK-ENTRY DELIVERY. The Depositary will establish accounts with respect
to the Shares at The Depository Trust Company, the Midwest Securities Trust
Company and the Philadelphia Depository Trust Company (collectively referred to
as "Book-Entry Transfer Facilities") for purposes of the Offer within two
business days after the date of this Offer to Purchase, and any financial
institution that is a participant in the system of any Book-Entry Transfer
Facility may make delivery of Shares into the Depositary's account in
6
<PAGE> 7
accordance with the procedures of such Book-Entry Transfer Facility. However,
although delivery of Shares may be effected through book-entry transfer into the
Depositary's account at a Book-Entry Transfer Facility, a properly completed and
duly executed Letter of Transmittal (or manually signed facsimile thereof) with
any required signature guarantees and any other required documents must, in any
case, be transmitted to and received by the Depositary at one of the addresses
set forth on the back cover of this Offer to Purchase by the Expiration Date, or
the guaranteed delivery procedure described below must be complied with.
Delivery of the Letter of Transmittal and any other required documents to a
Book-Entry Transfer Facility does not constitute delivery to the Depositary.
SIGNATURE GUARANTEES. No signature guarantee is required on the Letter of
Transmittal if the Letter of Transmittal is signed by the registered holder of
the Shares exactly as the name of the registered holder appears on the
certificate (which term, for purposes of this Section 3 includes any participant
in a Book-Entry Transfer Facility whose name appears on a security position
listing as the owner of Shares) tendered therewith, and payment is to be made
directly to such registered holder, or if Shares are tendered for the account of
a financial institution that is a member of the Securities Transfer Agents
Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) or the
New York Stock Exchange Medallion Signature Program (MSP) (each such entity, an
"Eligible Institution"). In all other cases, all signatures on the Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction 1 of
the Letter of Transmittal. If a certificate representing Shares is registered in
the name of a person other than the signer of a Letter of Transmittal, or if
payment is to be made, or Shares not purchased or tendered are to be issued to a
person other than the registered holder, the certificate must be endorsed or
accompanied by an appropriate stock power, in either case signed exactly as the
name of the registered holder appears on the certificate with the signature on
the certificate or stock power guaranteed by an Eligible Institution.
METHOD OF DELIVERY. THE METHOD OF DELIVERY OF SHARES AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER. IF
CERTIFICATES FOR SHARES ARE TO BE SENT BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
FEDERAL INCOME TAX BACKUP WITHHOLDING. To prevent federal income tax
backup withholding equal to 31% of the gross payments made pursuant to the
Offer, each shareholder who does not otherwise establish an exemption from such
withholding must notify the Depositary of such shareholder's correct taxpayer
identification number (or certify that such taxpayer is awaiting a taxpayer
identification number) and provide certain other information by completing a
Form W-9 included in the Letter of Transmittal. Foreign shareholders may be
required to submit Form W-8, certifying non-United States status, in order to
avoid backup withholding. See Instructions 13 and 14 of the Letter of
Transmittal.
GUARANTEED DELIVERY. If a shareholder desires to tender Shares pursuant to
the Offer and cannot deliver certificates for such Shares (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 by the Expiration Date,
such Shares may nevertheless be tendered if all of the following conditions are
met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Company, is received by
the Depositary by the Expiration Date; and
(iii) the certificates for all tendered Shares in proper form for
transfer (or a confirmation of a book-entry transfer of such Shares into
the Depositary's account at one of the Book-Entry Transfer Facilities),
together with a properly completed and duly executed Letter of Transmittal
(or manually executed facsimile thereof) and any other documents required
by the Letter of Transmittal, are received by the Depositary within five
business days after the date the Depositary received such Notice of
Guaranteed Delivery. The Notice of Guaranteed Delivery may be delivered by
hand 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.
7
<PAGE> 8
DETERMINATION OF VALIDITY; REJECTION OF SHARES; WAIVER OF DEFECTS; NO
OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the number of Shares
to be accepted, the form of documents and the validity, eligibility (including
time of receipt) and acceptance for payment of any tender of Shares will be
determined by the Company, in its sole discretion, which determination shall be
final and binding on all parties. The Company reserves the absolute right to
reject any or all tenders of Shares determined by it not to be in proper form or
the acceptance for payment of or payment for which may be unlawful. The Company
also reserves the absolute right to waive any of the conditions of the Offer or
any defect or irregularity in any tender of Shares. No tender of Shares will be
deemed to be properly made until all defects and irregularities have been cured
or waived. None of the Company, the Dealer Manager, the Information Agent, the
Depositary, or any other person will be under any duty to give notification of
any defect or irregularity in tenders or incur any liability for failure to give
any such notice.
TENDER CONSTITUTES AN AGREEMENT. The tender of Shares pursuant to any one
of the procedures described above will constitute a binding agreement between
the tendering shareholder and the Company upon the terms and subject to the
conditions of the Offer.
It is a violation of Rule 14e-4 promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), for a person, directly or
indirectly, to tender shares for his own account unless, at the time of the
tender and at the end of the proration period, the person so tendering (i) has a
net long position equal to or greater than the amount of (x) shares tendered or
(y) other securities immediately convertible into, exercisable, or exchangeable
for the amount of shares tendered and will acquire such shares for tender by
conversion, exercise or exchange of such other securities and (ii) will cause
such shares to be delivered in accordance with the terms of the offer. Rule
14e-4 provides a similar restriction applicable to the tender or guarantee of a
tender on behalf of another person. The tender of Shares pursuant to any one of
the procedures described above will constitute the tendering shareholder's
acceptance of the terms and conditions of the Offer as well as the tendering
shareholder's representation and warranty that (i) such shareholder has a net
long position in the Shares being tendered within the meaning of Rule 14e-4
promulgated under the Exchange Act, and (ii) the tender of such Shares complies
with Rule 14e-4.
4. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 4, tenders of Shares pursuant
to the Offer will be irrevocable. Shares tendered pursuant to the Offer may be
withdrawn at any time prior to the Expiration Date and, unless theretofore
accepted for payment by the Company as provided in this Offer to Purchase, may
also be withdrawn after 12:00 Midnight, New York City time, on February 17,
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 this Offer to Purchase. Any
such notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder, if different from that of the person who tendered such
Shares. If the certificates have been delivered or otherwise identified to the
Depositary, then, prior to the release of such certificates, the tendering
shareholder must submit the serial numbers shown on the particular certificates
evidencing the Shares to be withdrawn and the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution, except in the case of
Shares tendered by an Eligible Institution. If Shares have been tendered
pursuant to the procedure for book-entry transfer set forth in Section 3, the
notice of withdrawal must specify the name and the number of the account at the
applicable Book-Entry Transfer Facility to be credited with the withdrawn Shares
and otherwise comply with the procedures of such facility. All questions as to
the form and validity (including time of receipt) of notices of withdrawal will
be determined by the Company, in its sole discretion, which determination shall
be final and binding. None of the Company, the Dealer Manager, the Depositary,
the Information Agent or any other person shall be obligated to give any notice
of any defects or irregularities in any notice of withdrawal and none of them
shall incur any liability for failure to give any such notice. Any Shares
properly withdrawn will thereafter be deemed not tendered for purposes of the
Offer. However, withdrawn Shares may be retendered by the Expiration Date by
again following any of the procedures described in Section 3.
8
<PAGE> 9
If as a result of proration the number of Shares to be purchased from any
shareholder making a conditional tender is reduced below the minimum number
specified by such shareholder, such tender will automatically be regarded as
withdrawn, provided that such Shares will be deemed retendered if selected by
lot for purchase in accordance with Section 1 hereof.
If the Company extends the Offer, is delayed in its purchase of Shares or
is unable to purchase Shares pursuant to the Offer for any reason, then, without
prejudice to the Company's rights under the Offer, the Depositary may, subject
to applicable law, retain on behalf of the Company all tendered Shares, and the
Shares may not be withdrawn except to the extent tendering shareholders are
entitled to withdrawal rights as described in this Section 4.
5. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES
Upon the terms and subject to the conditions of the Offer (including
proration and the minimum shares condition and the minimum beneficial owners
condition), the Company will accept for payment as soon as practicable after the
Expiration Date 1,500,000 Shares (or such greater number of Shares as the
Company may elect to purchase). For purposes of the Offer, the Company will be
deemed to have accepted for payment (and thereby purchased), subject to
proration, Shares that are tendered and not withdrawn when, as and if the
Company gives oral or written notice to the Depositary of its acceptance of such
Shares for payment pursuant to the Offer.
Payment for Shares accepted for payment pursuant to the Offer will be made
by depositing the aggregate Purchase Price for such Shares with the Depositary,
which will act as agent for the tendering shareholders for the purpose of
receiving payment from the Company and transmitting such payments to tendering
shareholders.
In the event of proration, the Company will determine the proration factor
and pay for those tendered Shares accepted for payment as soon as practicable
after the Expiration Date; however, the Company does not expect to be able to
announce the final results of any such proration until approximately seven
business days after the Expiration Date. Certificates for all Shares not
purchased, including Shares not purchased due to proration or conditional
tenders, will be returned (or, in the case of Shares tendered by book-entry
transfer, such Shares will be credited to the account maintained within such
Book-Entry Transfer Facility by the participant therein who so delivered such
Shares) as soon as practicable after the Expiration Date or termination of the
Offer without expense to the tendering shareholder. Under no circumstances will
interest be paid by the Company by reason of any delay in paying for any Shares
or otherwise. In addition, if certain events occur, the Company may not be
obligated to purchase Shares pursuant to the Offer. See Section 6.
The Company will pay all stock transfer taxes, if any, payable on the
transfer to it of Shares purchased pursuant to the Offer, except if (i) payment
of the Purchase Price is to be made to, or (ii) (in the circumstances permitted
by the Offer) if Shares not tendered or not accepted for purchase are to be
registered in the name of, any person other than the registered holder, or if
tendered certificates are registered in the name of any person other than the
person signing the Letter of Transmittal. In such circumstances, the amount of
all stock transfer taxes, if any (whether imposed on the registered holder or
such other person), payable on account of the transfer to such person will be
deducted from the Purchase Price unless evidence satisfactory to the Company of
the payment of such taxes or exemption therefrom is submitted. See Instruction 6
of the Letter of Transmittal.
ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY AND
SIGN THE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL MAY BE SUBJECT TO
FEDERAL INCOME TAX BACKUP WITHHOLDING EQUAL TO 31% OF THE GROSS PROCEEDS PAID TO
SUCH SHAREHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. SEE SECTION 3.
9
<PAGE> 10
6. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, the Company shall not be
required to accept for payment, purchase or pay for any Shares tendered and may
terminate or amend the Offer or may postpone the acceptance for payment of, or
the payment for, Shares tendered, if the following conditions are not satisfied:
(1) Valid tenders have been received and not withdrawn by the
Expiration Date in respect of no less than 1,500,000 Shares.
(2) The Company determines in its sole judgment that the number of
beneficial owners of Shares after acceptance of tendered Shares pursuant to
the terms of the Offer will be at least 500 and that the Company otherwise
will continue to qualify for inclusion on the National Market System of
Nasdaq. For the purpose of this condition, beneficial owners of Shares will
be determined in accordance with the provisions of Rule 13d-3 under the
Exchange Act.
The Company does not intend to waive either of the two preceding
conditions. If the Company waives either such condition and the Offer is
scheduled to expire at any time earlier than the tenth business day from and
including the date that notice of such waiver is first published, sent or given
in the manner specified in Section 15, the Offer will be extended until no
sooner than the expiration of such ten business-day period.
In addition, the Company shall not be required to accept for payment,
purchase or pay for any Shares tendered and may terminate or amend the Offer or
may postpone the acceptance for payment of, or the payment for, Shares tendered
if at any time on or after December 21, 1994, and at or before the payment for
any such Shares, any of the following events shall have occurred (or shall have
been determined by the Company to have occurred) which, in the Company's sole
judgment in any such case and regardless of the circumstances (including any
action or omission to act by the Company), makes it inadvisable to proceed with
the Offer or with such acceptance for purchase or payment:
(a) there shall have been threatened, instituted or pending any action
or proceeding by any government or governmental authority or regulatory or
administrative agency, domestic or foreign, or by any other person,
domestic or foreign, before any court or governmental authority or
regulatory or administrative agency, domestic or foreign, (i) that
challenges or seeks to make illegal, or delay or otherwise directly or
indirectly restrain or prohibit the making of the Offer, the acceptance for
payment of or payment for some or all of the Shares by the Company or
otherwise directly or indirectly relating in any manner to or affecting the
Offer, or (ii) that otherwise, in the sole judgment of the Company, has or
may have a material adverse effect on the business, financial condition,
income, operations or prospects of the Company and its subsidiaries taken
as a whole or has or may materially impair the contemplated benefits of the
Offer to the Company; or
(b) any action shall have been threatened, instituted, pending or
taken or approval withheld or any statute, rule, regulation, judgment or
order or injunction proposed, sought, enacted, enforced, promulgated,
amended, issued or deemed applicable to the Offer or the Company or any of
its subsidiaries by any court, government or governmental authority or
regulatory or administrative agency, domestic or foreign, that, in the sole
judgment of the Company might, directly or indirectly, result in any of the
consequences referred to in clauses (i) or (ii) of paragraph (a) above; or
(c) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities
exchange or in the over-the-counter market, (ii) the declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States, (iii) the commencement of a war, armed hostilities or other
international or national calamity directly or indirectly involving the
United States, (iv) any limitation by any governmental, regulatory or
administrative authority or agency or any other event that, in the sole
judgment of the Company, might affect the extension of credit by banks or
other lending institutions, (v) any significant decrease in the market
price of the Shares or any change in the general political, market,
economic or financial conditions in the United States or abroad that has or
may have material adverse effects with respect to the Company's business,
operations or prospects or the trading in the Shares, (vi) any decline in
either the Dow Jones Industrial Average or the Standard and Poor's Index of
500 Industrial Companies by an amount in excess
10
<PAGE> 11
of 10%, measured from the close of business on December 20, 1994, or (vii)
in the case of any of the foregoing existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof; or
(d) a tender or exchange offer for some or all of the Shares (other
than the Offer) or a proposal with respect to a merger, consolidation or
other business combination with or involving the Company or any subsidiary
shall have been proposed to be made or shall have been made by another
person; or
(e) (1) any entity, "group" (as that term is used in Section 13(d)(3)
of the Exchange Act) or person (other than entities, groups or persons, if
any, who have filed with the Securities and Exchange Commission (the
"Commission"), on or before December 20, 1994, a Schedule 13G or a Schedule
13D with respect to any of the Shares) shall have acquired or proposed to
acquire beneficial ownership of more than 5% of the outstanding Shares; or
(2) such entity, group or person that has publicly disclosed any
such beneficial ownership of more than 5% of the Shares prior to such
date shall have acquired, or proposed to acquire, beneficial ownership
of additional Shares constituting more than 2% of the outstanding Shares
or shall have been granted any option or right to acquire beneficial
ownership of more than 2% of the outstanding Shares; or
(3) any entity, person or group shall have filed a Notification and
Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of
1976 reflecting an intent to acquire the Company or any of its Shares;
or
(f) any change or changes have occurred (or any development shall have
occurred involving any prospective change or changes) in the business,
assets, liabilities, condition (financial or otherwise), operations,
results of operations or prospects of the Company or any of its
subsidiaries that, in the sole judgment of the Company, have or may have a
material adverse effect with respect to the Company and its subsidiaries
taken as a whole.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company in its sole discretion regardless of the circumstances
(including any action or inaction by the Company) giving rise to any such
conditions, or may be waived by the Company in its sole discretion, in whole or
in part at any time. The failure by the Company at any time to exercise its
rights under any of the foregoing conditions 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 which may be
asserted at any time or from time to time. Any determination by the Company
concerning the events described in this Section 6 shall be final and binding on
all parties.
11
<PAGE> 12
7. PRICE RANGE OF SHARES; DIVIDENDS
The Shares are qualified for inclusion in Nasdaq. The following table sets
forth for the periods indicated the high and low sale prices per Share as
reported by Nasdaq as compiled from published financial sources. The Company has
paid no cash dividends during the periods presented.
<TABLE>
<CAPTION>
QUARTER ENDED HIGH LOW
- --------------------------------------- ---- ---
<S> <C> <C>
May 2, 1992............................ $18 1/2 $13
August 1, 1992......................... 14 3/4 11 1/8
October 31, 1992....................... 15 9 1/2
January 30, 1993....................... 22 5/8 13 3/4
May 1, 1993............................ 20 13 3/4
July 31, 1993.......................... 15 10 3/4
October 30, 1993....................... 16 1/2 12 1/2
January 29, 1994....................... 14 1/4 10 3/4
April 30, 1994......................... 13 7/8 11
July 30, 1994.......................... 17 12 1/4
October 29, 1994....................... 20 14
January 28, 1995
(through December 20, 1994).......... 18 3/4 15
</TABLE>
On December 19, 1994, the last full trading day prior to the announcement
of the Offer, the closing per Share sales price was $15 1/2. On December 20,
1994, the last full trading day prior to the commencement of the Offer, the
closing per Share sales price was $16 7/8.
SHAREHOLDERS ARE URGED TO OBTAIN CURRENT
MARKET QUOTATIONS FOR THE SHARES.
8. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER
The Board of Directors of the Company has determined to make this Offer
because it believes that the Offer is an attractive investment of the Company's
cash and because the Company will realize tax deferrals if the Offer is
completed. The Company believes that the current market price of the Shares does
not adequately reflect the value of the Company's business, assets and
prospects, and that the purchase of the Shares at this time is an attractive
investment that will benefit the Company and its continuing shareholders. In
addition, as a result of the fact that Dart (which owned approximately 64.8% of
the issued and outstanding Shares as of December 20, 1994) will not tender any
Shares in response to the Offer, Dart will own in excess of 80% of the issued
and outstanding Shares following completion of the Offer, allowing Dart and the
Company to be consolidated for federal income tax purposes. Consolidation will
eliminate one level of federal income taxation and thereby result in current tax
savings to the Company, Dart and their respective shareholders. An effect of the
consolidation will be that net operating losses of Dart will offset income of
the Company. Dart has reported cumulative total tax net operating loss
carryforwards of $23,250,000 as of October 31, 1994. All these loss
carryforwards will expire by fiscal 2010. The Company will enter into a tax
allocation agreement with Dart pursuant to which the Company will reimburse Dart
for the use of its net operating losses if and when Dart would otherwise have
been able to use such losses to offset other income. Accordingly, to the extent
that income of the Company is offset by Dart's operating losses, that will
result in the recording of a deferred tax liability on the books of the Company.
As a result, future net income on a book basis will not be affected. However,
the Company will retain cash that would otherwise be paid in income taxes until
such time as it may be required to reimburse Dart.
The Offer gives stockholders who are considering the sale of all or a
portion of their Shares an opportunity to sell such Shares for a higher price
than that available in the open market immediately prior to the announcement of
the Offer, without the usual transaction costs associated with market sales.
12
<PAGE> 13
Neither the Company nor Dart has any plans to acquire additional Shares.
The Company or Dart may in the future acquire Shares (in addition to those
purchased pursuant to the Offer) on the open market, in privately negotiated
transactions, through tender offers, mergers or otherwise, in such amounts, at
such prices and at such times as the Company or Dart may determine. Rule 13e-4
under the Exchange Act generally prohibits the Company and its affiliates from
purchasing any Shares, other than pursuant to the Offer, until at least ten
business days after the Expiration Date. Neither the Company nor Dart will
acquire any additional Shares until at least ten business days after the
Expiration Date. Future acquisitions of Shares, if any, may be on the same terms
as, or on terms more or less favorable than, those of the Offer.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ANY OR ALL OF
SUCH SHAREHOLDER'S SHARES AND NEITHER HAS AUTHORIZED ANY PERSON TO MAKE ANY SUCH
RECOMMENDATION. SHAREHOLDERS ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN
THE OFFER, CONSULT THEIR OWN INVESTMENT AND TAX ADVISORS AND MAKE THEIR OWN
DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER.
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly and is likely to reduce the
number of shareholders. Nonetheless, it is a condition to the Offer that the
number of beneficial owners of Shares after acceptance of tendered Shares
pursuant to the terms of the Offer be at least 500 and that the Company
otherwise continue to qualify for inclusion on the National Market System on
Nasdaq. See Section 6.
The Shares are currently "margin securities" under the rules of the Federal
Reserve Board. This has the effect, among other things, of allowing brokers to
extend credit on the collateral of the Shares. The Company expects that,
following the repurchase of Shares pursuant to the Offer, the Shares will
continue to be "margin securities" for purposes of the Federal Reserve Board's
margin regulations. Eligibility for treatment as margin securities will,
however, continue to depend on maintenance of minimum daily trading volume.
The Shares are registered under the Exchange Act which requires, among
other things, that the Company furnish certain information to its shareholders
and to the Commission and comply with the Commission's proxy rules in connection
with meetings of the Company's shareholders. Prior to the Offer, the Company has
fewer than 300 shareholders of record and is therefore qualified, pursuant to
the rules of the Commission, to terminate its registration under the Exchange
Act. Continued registration under the Exchange Act is, however, a qualification
for inclusion in Nasdaq, and the Company intends to retain its registration as
long as it remains otherwise qualified for inclusion in Nasdaq. As noted above,
and pursuant to the conditions of the Offer, the Company expects to remain
qualified for inclusion in Nasdaq after completion of the Offer and thus intends
to retain registration of the Shares under the Exchange Act.
9. SOURCE AND AMOUNT OF FUNDS
If the Company were to purchase 1,500,000 Shares pursuant to the Offer at a
Purchase Price of $17.50 per Share, the aggregate cost of the Offer, including
estimated fees and expenses applicable to the Offer, would be approximately
$26.7 million, which would be paid from the Company's cash on hand and amounts
realizable on the sale of short-term instruments and marketable debt securities.
As of October 29, 1994, the Company had available approximately $45.2 million in
cash, short-term instruments and marketable debt securities.
10. SHARES OUTSTANDING AND SIGNIFICANT SHAREHOLDERS
As of December 20, 1994, the Company had issued and outstanding 6,113,646
Shares and 229,416 Shares were reserved for issuance upon exercise of
outstanding stock options. The 1,500,000 Shares that Company is offering to
purchase pursuant to the Offer represent approximately 24.5% of the Shares
outstanding and approximately 23.6% of the fully-diluted Shares outstanding as
of such date.
13
<PAGE> 14
The Company has been advised that no director or executive officer of the
Company or Dart intends to tender any shares pursuant to the Offer.
If the Offer is completed, Dart will hold approximately 81.8% of the issued
and outstanding Shares (on a fully-diluted basis). On the assumption that no
Shares will be tendered by officers and directors of the Company or Dart, such
officers and directors in the aggregate will hold Shares and options to acquire
Shares representing an additional 2.7% of the issued and outstanding Shares (on
a fully-diluted basis) after completion of the Offer.
11. CERTAIN INFORMATION CONCERNING THE COMPANY
DESCRIPTION OF BUSINESS
The Company is engaged in the retail sale of a wide range of automobile
parts and accessories for the do-it-yourself market. The Company operates retail
discount specialty stores in the Washington, D.C., Richmond, Virginia, Chicago,
Illinois and Los Angeles, California metropolitan areas. On October 29, 1994,
the Company had approximately 292 stores in operation, including 101 Super Trak
stores and 4 Super Trak Warehouse stores. The Company's products include "hard
parts" (such as alternators, starters, shock absorbers, fan belts, spark plugs,
mufflers, thermostats and wheel bearings), as well as motor oil, oil filters,
headlights, batteries, waxes, polishes, car stereos, anti-freeze and windshield
wipers. A typical store normally carries 10,000 different item numbers or SKU's.
The Company does not sell tires and does not provide automotive service or
installation.
During the year ended January 30, 1993, the Company organized Super Trak
Corporation. Super Trak stores are similar to the stores described above,
however, the stores provide additional services and merchandise. Super Trak
stores carry approximately 5,000 more SKU's, concentrated primarily in
application parts categories. Additionally, the stores feature special order
services permitting customers access to virtually any automotive part, including
engines. The stores also offer extensive technical assistance through
computerized parts look-up, instruction for repairs, free use of specialized
tools and factory-trained parts people. The Company is planning a conversion to
the Super Trak concept through the opening of new stores and the conversion,
relocation and expansion of its existing stores. The Company continually reviews
store operations, has closed certain stores in various markets, and expects to
close additional underperforming stores in the future. The Company is also
developing a concept for even larger stores using the name Super Trak Warehouse.
All of the Company's stores are leased. As of January 29, 1994, the total
minimum payments for the Company's retail stores and equipment under leases
aggregated approximately $85,555,000 to lease expiration dates. The lease
expiration dates (without regard to renewal options) range from 1994 to 2013.
Twenty-seven of these leases are with entities affiliated with officers and
directors of the Company and Dart.
The Company leases a 176,000 square foot distribution center located in
Bridgeview, Illinois, and a 317,000 square foot distribution center located in
Ontario, California, from private partnerships affiliated with officers and
directors of the Company and Dart. The Company subleases from Dart 210,000
square feet of warehouse and office space located in Landover, Maryland.
The Company is a Delaware corporation incorporated in 1982 and its
principal offices are located at 3300 75th Avenue, Landover, Maryland 20785,
telephone: (301) 731-1200.
CONTROL OF DART
On September 6, 1994, Ronald S. Haft, President and Chief Operating Officer
of Dart and a director of Dart and the Company, sought to exercise options (the
"Options") to purchase 197,048 shares (the "Option Shares") of Class B Common
Stock of Dart (the "Dart Class B Stock"). Dart has rejected the validity of
Ronald S. Haft's purported exercise of the Options, and issuance of the Option
Shares has not been recorded in the stock records of Dart.
On September 14, 1994, Ronald S. Haft filed a lawsuit against Dart in the
Chancery Court of the State of Delaware seeking a court order that Dart issue
the Option Shares to him. Dart is contesting this lawsuit. On
14
<PAGE> 15
November 14, 1994, the Court entered a Memorandum Opinion denying plaintiff
Ronald S. Haft's motion for summary judgment. Separately, the Court scheduled a
trial of this case in March 1995.
The Dart Class B Stock is the only outstanding class of stock of Dart with
voting rights. If the Option Shares are not issued, then a proxy held by Herbert
H. Haft (Chairman and Chief Executive Officer of Dart and the Company and a
director of Dart and the Company) from Ronald S. Haft to vote 172,713 shares of
Dart Class B Stock will continue to give Herbert H. Haft the power to vote
approximately 57.01% of the issued and outstanding shares of Dart Class B Stock.
If the Option Shares are issued to Ronald S. Haft, then that proxy held by
Herbert H. Haft would constitute the power to vote only 34.54% of the issued and
outstanding shares of Dart Class B Stock, and the Option Shares issued to Ronald
S. Haft (together with 25,236 other shares of Dart Class B stock held by Ronald
S. Haft) would constitute 44.46% of the issued and outstanding shares of Dart
Class B Stock.
Ronald S. Haft has indicated that he contests the proxy held by Herbert H.
Haft to vote 172,713 shares of Dart Class B Stock. Ronald S. Haft also has
indicated that upon obtaining control of Dart he would seek to remove Herbert H.
Haft as a director and officer of Dart and would call a special meeting of Dart
shareholders for the purpose of pressing the issue of increasing shareholder
value.
On September 14, 1994, a Standstill Agreement agreed to on behalf of Dart
and Ronald S. Haft was ordered by the Delaware Court of Chancery. This
Standstill Agreement restricts certain actions by Dart, its subsidiaries,
including the Company, and its shareholders until further order of the Court.
These restrictions include, among others, any change in the composition of the
Board of Directors of Dart or the Company, any change in the current Haft family
officers of Dart or the Company, the issuance of any securities of Dart or the
Company, the liquidation of Dart or the Company or the sale of the Company.
There is always the possibility that the pending lawsuit by Ronald S. Haft
against Dart to enforce the Options will be resolved by a settlement between the
parties. The impact that the terms of any such potential settlement might have
on the market price or value of Shares cannot be predicted.
SELECTED HISTORICAL FINANCIAL INFORMATION
Set forth below is certain selected consolidated historical financial
information of the Company and its subsidiaries. The financial information at
and for the years ended January 30, 1993 and January 29, 1994 are derived from
the Company's audited consolidated financial statements incorporated by
reference in the Company's Annual Report on Form 10-K for the year ended January
29, 1994 (the "1994 10-K"). The historical financial information at and for the
thirty-nine weeks ended October 30, 1993 and October 29, 1994, are derived from
the Company's unaudited consolidated financial statements as set forth in the
Company's Quarterly Report on Form 10-Q for the quarterly period ended October
29, 1994 (the "1994 Third Quarter 10-Q"). The following selected consolidated
historical financial information should be read in conjunction with, and is
qualified in its entirety by reference to, such audited and unaudited financial
statements and their related notes, which may be obtained as set forth under
"Additional Information," below.
15
<PAGE> 16
SELECTED HISTORICAL FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)
<TABLE>
<CAPTION>
THIRTY-NINE WEEKS
ENDED YEAR ENDED
-------------------- --------------------
<S> <C> <C> <C> <C>
OCTOBER OCTOBER
29, 30, JANUARY JANUARY
1994 1993 29, 30,
(UNAUDITED) (UNAUDITED) 1994 1993
-------- -------- -------- --------
<CAPTION>
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Sales.......................................... $266,415 $248,589 $334,798 $315,793
Income (loss) before income taxes.............. 11,853 1,032 (464) 4,971
Income taxes (benefit)......................... 3,635 338 (545) 1,616
Net income before cumulative effect of
accounting changes........................... 8,218 694 81 3,355
Net income..................................... 8,218 694 81 5,013
Net income per share before cumulative effect
of accounting changes........................ 1.34 0.11 0.01 0.57
Net income per share........................... 1.34 0.11 0.01 0.85
Weighted average common shares and common share
equivalents outstanding...................... 6,111 6,128 6,107 5,928
Ratio of earnings to fixed charges............. 2.62 1.14 0.95 1.71
</TABLE>
<TABLE>
<CAPTION>
OCTOBER
29, JANUARY JANUARY
1994 29, 30,
(UNAUDITED) 1994 1993
-------- -------- --------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Current assets......................................... $153,135 $129,805 $119,831
Current liabilities.................................... 90,444 75,737 59,662
Working capital........................................ 62,691 54,068 60,169
Total assets........................................... 202,570 179,149 165,104
Current portion of obligations under capital leases.... 211 211 196
Obligations under capital leases (less current
portion)............................................. 26,525 26,331 26,058
Stockholders' equity................................... 78,438 69,675 69,283
Total capitalization (stockholders' equity and
long-term liabilities)............................... 112,126 103,412 105,442
Stockholders' equity per common share outstanding...... 12.83 11.51 11.47
</TABLE>
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial information sets forth
historical information as adjusted to give effect to the purchase of 1,500,000
Shares at a Purchase Price of $17.50 per Share. The pro forma adjustments assume
that the transaction occurred, for the purpose of income statement data, as of
the first day of the period presented, and for purposes of balance sheet data,
as of the balance sheet date. The pro forma information does not purport to be
indicative of the results that may be obtained in the future or that would
actually have been obtained had the transaction occurred during the periods
indicated. The pro forma information should be read in conjunction with the
Company's financial statements and related notes set forth in the 1994 10-K and
the 1994 Third Quarter 10-Q.
16
<PAGE> 17
SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)
<TABLE>
<CAPTION>
THIRTY-NINE WEEKS ENDED YEAR ENDED
OCTOBER 29, 1994 JANUARY 29, 1994
-------------------------------------- ---------------------------------------
PRO PRO
HISTORICAL ADJUSTMENTS FORMA HISTORICAL ADJUSTMENTS FORMA
---------- ----------- -------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Sales.................... $266,415 $ 0 $266,415 $334,798 $ 0 $334,798
Income (loss) before
income taxes........... 11,853 (1,076)(a) 10,777 (464) (1,324)(e) (1,788)
Income taxes (benefit)... 3,635 (330)(b) 3,305 (545) (134)(b) (679)
Net income............... 8,218 (746) 7,472 81 (1,190) (1,109)
Net income per share..... 1.34 0.28 1.62 0.01 (0.25) (0.24)
Weighted average common
shares and common share
equivalents
outstanding............ 6,111 (1,500)(c) 4,611 6,107 (1,500)(c) 4,607
Ratio of earnings to
fixed charges.......... 2.62 2.47(d) 0.95 0.81(d)
<CAPTION>
OCTOBER 29, 1994 JANUARY 29, 1994
----------------------------------- --------------------------------------
PRO PRO
HISTORICAL ADJUSTMENTS FORMA HISTORICAL ADJUSTMENTS FORMA
---------- ----------- -------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Current assets........... $153,135 $(26,650)(f) $126,485 $129,805 $(25,007)(f) $104,798
Current liabilities...... 90,444 0 90,444 75,737 1,643(g) 77,380
Working capital.......... 62,691 (26,650) 36,041 54,068 (26,650) 27,418
Total assets............. 202,570 (26,650) 175,920 179,149 (25,007) 154,142
Current portion of
obligations under
capital leases......... 211 0 211 211 0 211
Obligations under capital
leases (less current
portion)............... 26,525 0 26,525 26,331 0 26,331
Stockholders' equity..... 78,438 (26,650) 51,788 69,675 (26,650) 43,025
Total capitalization
(stockholders' equity
and long-term
liabilities)........... 112,126 (26,650) 85,476 103,412 (26,650) 76,762
Stockholders' equity per
common share
outstanding............ 12.83 (1.60) 11.23 11.51 (2.06) 9.45
</TABLE>
- ---------------
Notes to Accompany Pro Forma Financial Information
(a) The reduction in income before income taxes for the thirty-nine weeks ended
October 29, 1994 is due primarily to a reduction in interest income as a
result of lower cash and investment balances and an increase in interest
expense attributable to debt which would have been required if the purchase
of Shares pursuant to the Offer had occurred at the beginning of the period
presented.
(b) Income tax expense is reduced as a result of reduced income before income
taxes.
(c) To reflect the Company's purchase of shares pursuant to the Offer to
Purchase dated December 21, 1994, including estimated fees and expenses
related to the Offer.
(d) The reduction in the ratio of earnings to fixed charges is attributable to
reduced net income and increased fixed charges resulting from debt which
would have been required if the purchase of Shares pursuant to the Offer
had occurred at the beginning of the period presented.
(e) The reduction in income before income taxes for the fiscal year ended
January 29, 1994 is due primarily to a reduction in interest income as a
result of lower cash and investment balances and an increase in interest
expense attributable to debt which would have been required if the purchase
of Shares pursuant to the Offer had occurred at the beginning of the period
presented.
(f) To reflect the reduction of cash balances resulting from purchase of
Shares.
(g) To reflect debt which would have been required if the purchase of Shares
had occurred as of the balance sheet date.
17
<PAGE> 18
ADDITIONAL INFORMATION
The Company is subject to the information requirements of the Exchange Act,
and in accordance therewith files periodic reports, proxy statements and other
information with the Commission relating to its business, financial condition
and other matters. The Company is required to disclose in such proxy statements
certain information, as of particular dates, concerning the Company's directors
and officers, their compensation, stock options granted to them, the principal
holders of the Company's securities and any material interest of such persons in
transactions with the Company. The Company has also filed a Tender Offer
Statement on Schedule 13E-4 with the Commission. Such material and other
information may be inspected at the public reference facilities maintained by
the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W, Washington,
D.C. 20549; and (except for the Issuer Tender Offer Statement) also should be
available for inspection and copying at the following regional offices of the
Commission: Seven World Trade Center, New York, New York 10048 and Northwestern
Atrium Center, 500 West Madison, Suite 1400, Chicago, Illinois 60661. Copies of
such material can also be obtained by mail, upon paying the Commission's
customary charges, by writing to the Public Reference Section at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.
12. INTEREST OF DIRECTORS AND EXECUTIVE OFFICERS; TRANSACTIONS AND ARRANGEMENTS
CONCERNING THE SHARES
Neither the Company, nor any executive officer or director of the Company,
any person controlling the Company, any executive officer or director of any
person controlling the Company or any associate or subsidiary of any such person
(including any executive officer or director of any such subsidiary), has
engaged in any transaction involving Shares during the period of forty business
days prior to the date hereof.
Dart has advised the Company that it will not tender any Shares in response
to the Offer.
Except as described in this Offer to Purchase, neither the Company nor, to
the Company's knowledge, any of its executive officers, directors or affiliates,
is a party to any contract, arrangement, understanding or relationship relating,
directly or indirectly, to the Offer with any other person with respect to
Shares. Except as disclosed herein, none of Dart, the Company or their executive
officers or directors has current plans or proposals which relate to or would
result in any extraordinary corporate transaction involving the Company, such as
a merger, reorganization, sale or transfer of a material amount of its assets or
the assets of any of its subsidiaries, any change in its present Board of
Directors or management, any material change in its present dividend policy or
indebtedness or capitalization, any other material change in its business or
corporate structure, any material change in its Certificate of Incorporation or
Bylaws, or any actions causing a class of its equity securities to become
eligible for termination of registration pursuant to Section 12(g)(4) of the
Exchange Act, or the suspension of the Company's obligation to file reports
pursuant to Section 15(d) of the Exchange Act, or any actions similar to any of
the foregoing.
13. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS
The Company is not aware of any license or regulatory permit that it
believes is material to the Company's business that might be adversely affected
by the Company's acquisition of Shares as contemplated herein or of any approval
or other action by any government or governmental, administrative or regulatory
authority or agency, domestic or foreign, that would be required for the
acquisition or ownership of Shares by the Company as contemplated herein. Should
any such approval or other action be required, the Company will make a good
faith effort to obtain such approval or other action. The Company is unable to
predict whether it will be required 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
consideration or that the failure to obtain any such approval or other action
might not result in adverse consequences to the Company's business. The
Company's obligations under the Offer to accept for payment and pay for Shares
are subject to certain conditions. See Section 6.
18
<PAGE> 19
14. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following summary is a general discussion of certain of the United
States federal income tax consequences of the Offer. This summary is based upon
laws, regulations, rulings and decisions now in effect, all of which are subject
to change. No rulings as to any of the matters discussed in this summary have
been requested or received from the Internal Revenue Service ("IRS").
EACH SHAREHOLDER IS URGED TO CONSULT AND RELY ON THE SHAREHOLDER'S OWN TAX
ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES TO THE SHAREHOLDER OF TENDERING
SHARES PURSUANT TO THE OFFER.
IN GENERAL. A shareholder's exchange of Shares for cash pursuant to the
Offer will be a taxable transaction for federal income tax purposes, and may
also be a taxable transaction under applicable state, local, or foreign tax
laws. This summary does not discuss any aspects of state, local or foreign tax
laws. Certain shareholders (including insurance companies, tax-exempt
organizations, institutions, broker dealers and shareholders who have acquired
their Shares upon the exercise of options or otherwise as compensation) may be
subject to special rules not discussed below. Special rules apply in the case of
Shares acquired pursuant to the exercise of options granted to employees under
the Company's incentive compensation plans (see "Employee Plans" below).
TREATMENT AS A SALE OR EXCHANGE. Under Section 302 of the Internal Revenue
Code of 1986, as amended (the "Code"), a transfer of Shares to the Company
pursuant to the Offer will, as a general rule, be treated as a sale or exchange
of the Shares (rather than as a dividend distribution) if the receipt of cash
upon the sale (a) is "substantially disproportionate" with respect to the
shareholder, (b) results in a "complete termination" of the shareholder's
interest in the Company or (c) is "not essentially equivalent to a dividend"
with respect to the shareholder. These tests (the "Section 302 tests") are
explained more fully below.
If any of the Section 302 tests is satisfied, a tendering shareholder will
ordinarily recognize gain or loss equal to the difference between the amount of
cash received by the shareholder pursuant to the Offer and the shareholder's
basis in the Shares sold pursuant to the Offer. If the Shares are held as
capital assets, the gain or loss will be capital gain or loss, which will be
long-term capital gain or long-term capital loss if the Shares have been held
for more than one year. A shareholder will not be permitted to recognize loss on
the sale of a Share pursuant to the Offer if the shareholder purchases a Share
within a period beginning 30 days prior to and ending 30 days after the
completion of the Offer.
TREATMENT AS A DIVIDEND. If none of the Section 302 tests is satisfied
and, as anticipated, the Company has sufficient earnings and profits, a
tendering shareholder will be treated as having received a dividend includible
in gross income in an amount equal to the entire amount of cash received by the
shareholder pursuant to the Offer. This amount will not be reduced by the
shareholder's basis in the Shares sold pursuant to the Offer, and (except as
described below for corporate shareholders eligible for the dividends received
deduction) the shareholder's basis in those Shares will be added to the
shareholder's basis in his remaining Shares. No assurance can be given that any
of the Section 302 tests will be satisfied as to any particular shareholder, and
thus no assurance can be given that any particular shareholder will not be
treated as having received a dividend taxable as ordinary income.
TAX RATES. Net capital gain (which is the excess of net long-term capital
gain over net short-term capital loss) of individuals, trusts and estates is
currently taxed at a maximum federal income tax rate of 28%. Short-term capital
gains of individuals, trusts and estates are taxed at ordinary income rates.
Ordinary income is currently taxable to individuals, trusts and estates at a
maximum federal income tax rate of 39.6% (although it may be taxed at higher
marginal rates due to the phase-out of certain exemptions and deductions).
Capital gains and ordinary income of corporations are both taxed at the same
federal income tax rate, currently a maximum of 35% (although they may be taxed
at higher marginal rates due to the phase-out of the 15%, 25% and 34% brackets).
Shareholders are urged to consult their own tax advisors concerning the
possible impact of the receipt of cash from the Company pursuant to the Offer on
their obligation to make estimated tax payments.
19
<PAGE> 20
CONSTRUCTIVE OWNERSHIP OF STOCK. In determining whether any of the Section
302 tests is satisfied, a shareholder must take into account not only Shares
actually owned by the shareholder, but also Shares that are constructively owned
within the meaning of Section 318 of the Code. Under Section 318, a Shareholder
may constructively own Shares actually owned, and in some cases constructively
owned, by certain related individuals and certain entities in which the
shareholder has an interest, as well as any Shares the shareholder has a right
to acquire by exercise of an option or by the conversion or exchange of a
security. It is unclear whether Shares constructively owned by a shareholder by
reason of such shareholder's right to acquire the Shares from the Company are to
be considered outstanding for purposes of applying the Section 302 tests to
other shareholders.
THE SECTION 302 TESTS. One of the following tests must be satisfied in
order for the exchange of Shares pursuant to the Offer to be treated as a sale
rather than as a dividend distribution.
a. SUBSTANTIALLY DISPROPORTIONATE TEST. The receipt of cash by a
shareholder will be substantially disproportionate with respect to the
shareholder if the percentage of the outstanding Shares actually and
constructively owned by the shareholder immediately following the exchange
of Shares pursuant to the Offer (treating Shares exchanged pursuant to the
Offer as not outstanding) is less than 80% of the percentage of the
outstanding Shares actually and constructively owned by the shareholder
immediately before the exchange (treating Shares exchanged pursuant to the
Offer as outstanding).
b. COMPLETE TERMINATION TEST. The receipt of cash by a shareholder
will be a complete termination of the shareholder's interest if either (i)
all of the Shares actually and constructively owned by the shareholder are
sold pursuant to the Offer or (ii) all of the Shares actually owned by the
shareholder are sold pursuant to the Offer, the shareholder is eligible to
waive, and effectively waives, the attribution of Shares constructively
owned by the shareholder in accordance with the procedures described in
Section 302(c)(2) of the Code (relating to the waiver of family
attribution), and the shareholder is not considered to own any other Shares
pursuant to other attribution rules contained in Section 318 of the Code.
c. NOT ESSENTIALLY EQUIVALENT TO A DIVIDEND TEST. The receipt of cash
by a shareholder will not be essentially equivalent to a dividend if the
shareholder's exchange of Shares pursuant to the Offer results in a
"meaningful reduction" of the shareholder's proportionate interest in the
Company. Whether the receipt of cash by a shareholder will result in a
meaningful reduction of the shareholder's proportionate interest will
depend on the shareholder's particular facts and circumstances. However, in
the case of a small minority shareholder, even a small reduction may
satisfy this test where, as with the Offer, payments will not be pro rata
with respect to all outstanding shares of stock. The IRS has indicated in a
published ruling that, in the case of a small minority shareholder of a
publicly-held corporation who exercises no meaningful control over
corporate affairs, a reduction in the shareholder's proportionate interest
in the corporation from .0001118% to .0001081% (which represented only a
3.3% reduction in the shareholder's percentage ownership of outstanding
shares for purposes of the substantially disproportionate test) would
constitute a meaningful reduction.
Shareholders should consult their tax advisors concerning the application
of the Section 302 tests to their particular circumstances.
Under certain circumstances, it may be possible for a tendering shareholder
to satisfy one of the Section 302 tests by contemporaneously selling or
otherwise disposing of all or some of the Shares that are actually or
constructively owned by the shareholder but that are not exchanged pursuant to
the Offer. Correspondingly, a shareholder may not be able to satisfy any of the
Section 302 tests because of contemporaneous acquisitions of Shares by the
shareholder or by a related party whose Shares are constructively owned by the
shareholder. Shareholders should consult their tax advisors regarding the
consequences of such sales or acquisitions in their particular circumstances.
In the event that the Offer is oversubscribed, the Company's purchase of
Shares pursuant to the Offer will be prorated. Thus, even if all of the Shares
actually and constructively owned by a shareholder are tendered pursuant to the
Offer, not all of the Shares will be purchased by the Company, which in turn may
20
<PAGE> 21
affect the shareholder's ability to satisfy the Section 302 tests described
above. See Section 3 for information regarding each shareholder's option to make
a conditional tender of a minimum number of Shares. A SHAREHOLDER WHO DECIDES TO
MAKE A CONDITIONAL TENDER IS URGED TO CALCULATE THE MINIMUM NUMBER OF SHARES IN
CONSULTATION WITH HIS TAX ADVISOR.
SPECIAL RULES FOR CORPORATE SHAREHOLDERS. If the exchange of Shares by a
corporate shareholder does not satisfy any of the Section 302 tests and is
therefore treated as a dividend, the shareholder may be entitled to a
dividends-received deduction equal to 70% of the dividend. There are a number of
limitations on the availability of the dividends-received deduction, however.
Section 246(c) of the Code disallows the dividends-received deduction with
respect to stock that is held for 45 days or less. For this purpose, the length
of time a corporation is considered to have held stock may be reduced by periods
during which the corporation's risk of loss with respect to the stock is
diminished due to the existence of certain options or other transactions.
Further, under Section 246A of the Code, if a corporate shareholder has incurred
indebtedness directly attributable to an investment in Shares, the 70% dividends
received deduction may be reduced by a percentage generally computed based on
the amount of the indebtedness and the corporation's adjusted tax basis in the
Shares. Finally, because the Company's payments of cash pursuant to the Offer
will not be pro rata with respect to all of the outstanding Shares, any amount
that is received by a corporate shareholder that is treated as a dividend will
constitute an "extraordinary dividend" under Section 1059 of the Code. As a
result, a corporate shareholder will be required to reduce its tax basis in its
Shares (but not below zero) by the non-taxed portion of the dividend (that is,
the portion of the dividend equal to the dividends-received deduction). If the
non-taxed portion of the dividend exceeds the corporate shareholder's tax basis
in its Shares, the excess must be treated as gain from the sale of the Shares
for the taxable year in which a sale or disposition of the Shares occurs. It is
unclear whether, if the non-taxed portion of the dividend exceeds the corporate
shareholder's tax basis in its Shares, the excess is only treated as gain upon a
later disposition of the remaining Shares, or whether the exchange made pursuant
to the Offer is itself a disposition that requires treatment of such excess as
gain, despite treatment of the cash received as a dividend pursuant to Section
302.
EMPLOYEE PLANS. Special rules govern the taxation of cash received in
exchange for Shares acquired pursuant to the exercise of an incentive stock
option granted to an employee under an incentive compensation plan. An employee
who exchanges Shares acquired pursuant to the exercise of an incentive option
granted under a stock option plan of the Company will be taxed in accordance
with the rules described in the preceding sections unless the disposition of a
Share pursuant to the Offer occurs before the end of the required holding period
for the Share. The required holding period for a Share ends on the later of (i)
two years after the date the option with respect to the Share was granted or
(ii) one year after the date the Share was acquired pursuant to the exercise of
the option. If an exchange occurs before the end of the required holding period
for a Share and one of the Section 302 tests is satisfied, the employee will be
required to recognize ordinary income in an amount equal to the excess of the
fair market value of the Share at the time the option was exercised over the
exercise price of the option (the "spread"). Any remaining gain will be capital
gain, which will be long-term capital gain if the Share has been held for more
than one year. If an exchange occurs before the end of the required holding
period for a Share and none of the Section 302 tests is satisfied, the employee
may be required to treat the exchange of the Share as a disposition that
requires inclusion of the spread in ordinary income as well as including in
income the total amount of cash received as a dividend pursuant to Section 302.
If an employee exercises a nonqualified stock option granted under a stock
option plan of the Company in order to acquire Shares to tender pursuant to the
Offer, the employee will be required to recognize as ordinary income an amount
equal to the excess of the fair market value of the Shares on the date the
option is exercised over the exercise price. The employee's basis in the Shares
will be equal to the fair market value of the Shares on the date the option is
exercised, and the employee's holding period for purposes of determining
eligibility for long-term capital gain will begin after the option is exercised.
The exchange of the Shares pursuant to the Offer will be taxed in accordance
with the rules described in the preceding sections.
BACKUP WITHHOLDING. See Section 3 concerning the potential application of
federal backup withholding.
21
<PAGE> 22
FOREIGN SHAREHOLDERS. The Company will assume that the exchange is a
dividend as to foreign shareholders and will therefore withhold federal income
tax at a rate equal to 30% of the gross proceeds paid to a foreign shareholder
or his agent pursuant to the Offer, unless the Depositary determines that a
reduced rate of withholding is available pursuant to a tax treaty or that an
exemption from withholding is applicable because the gross proceeds are
effectively connected with the conduct of a trade or business by the foreign
shareholder within the United States. For this purpose, a foreign shareholder is
any shareholder that is not (a) a citizen or resident of the United States, (b)
a corporation, partnership or other entity created or organized in or under the
laws of the United States or any political subdivision thereof, or (c) any
estate or trust the income of which is subject to United States federal income
taxation regardless of the source of such income.
Generally, the determination of whether a reduced rate of withholding is
applicable is made by reference to a foreign shareholder's address or to a
properly completed Form 1001 furnished by the shareholder, and the determination
of whether an exemption from withholding is available on the grounds that gross
proceeds paid to a foreign shareholder are effectively connected with a United
States trade or business is made on the basis of a properly completed Form 4224
furnished by the shareholder. The Depositary will determine a foreign
shareholder's eligibility for a reduced rate of, or exemption from, withholding
by reference to the shareholder's address and any Forms 1001 or 4224 submitted
to the Depositary by a foreign shareholder unless facts and circumstances
indicate that such reliance is not warranted or unless applicable law requires
some other method for determining whether a reduced rate of withholding is
applicable. These forms can be obtained from the Depositary. See the
instructions to the Letter of Transmittal.
A foreign shareholder with respect to whom tax has been withheld may be
eligible to obtain a refund of all or a portion of the withheld tax if the
shareholder satisfies one of the Section 302 tests for capital gain treatment or
is otherwise able to establish that no tax or a reduced amount of tax was due.
Foreign shareholders are urged to consult their own tax advisers regarding the
application of United States federal income tax withholding, including
eligibility for a withholding tax reduction or exemption and the refund
procedure.
15. EXTENSION OF THE OFFER; TERMINATION; AMENDMENTS
The Company expressly reserves the right, in its sole discretion, and
regardless of whether or not any of the conditions specified in Section 6 shall
have occurred, at any time or from time to time, to extend the period of time
during which the Offer is open by giving oral or written notice of such
extension to the Depositary, 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. There can be no assurance that the Company
will exercise its right to extend the Offer. During any such extension, all
Shares previously tendered and not withdrawn will remain subject to the Offer.
The Company also expressly reserves the right, in its sole discretion, (i)
to delay payment for any Shares not theretofore paid for, or to terminate the
Offer and not to accept for payment any Shares not theretofore accepted for
payment, upon the occurrence of any of the conditions specified in Section 6, or
(ii) at any time or from time to time to amend the Offer in any respect,
including increasing or decreasing the number of Shares the Company may purchase
or the price it may pay pursuant to the Offer.
Any such extension, delay, termination or amendment will be followed as
promptly as practicable by a public announcement thereof. Without limiting the
manner in which the Company may choose to make any public announcement, except
as provided by applicable law (including under Rule 13e-4(e)(2) of the Exchange
Act), the Company shall have no obligation to publish, advertise or otherwise
communicate any such public announcement other than by making a release to the
Dow Jones News Service.
If the Company makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, the Company will extend the Offer to the extent required by Rules
13e-4(d)(2) and 13e-4(e)(2) under the Exchange Act, which require that the
minimum period during which an 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 percentage of securities sought) will depend upon
the facts and circumstances, including the relative materiality of such terms or
information.
22
<PAGE> 23
The Company confirms that its reservation of the right to delay payment for
Shares which it has accepted for payment is limited by Rule 13e-4(f)(5) under
the Exchange Act, which requires that an issuer pay consideration offered or
return the tendered securities promptly after the termination or withdrawal of a
tender offer. If (i) the Company increases or decreases the price to be paid for
Shares, or the Company increases the number of Shares being sought and such
increase in the number of Shares being sought exceeds 2% of the outstanding
Shares, or the Company decreases the number of Shares being sought and (ii) the
Offer is scheduled to expire at any time earlier than the expiration of a period
ending on the tenth business day from, and including, the date that notice of
such decrease is first published, sent or given, the Offer will be extended
until the expiration of such period of ten business days.
16. FEES AND EXPENSES
Wasserstein Perella & Co., Inc. ("Wasserstein Perella") has been retained
by the Company to act as Dealer Manager in connection with the Offer.
Wasserstein Perella will receive a fee of 1.2% of the total consideration paid
to shareholders in the Offer (subject to a minimum of $170,000, whether or not
the Offer is completed) for its services as Dealer Manager. The Company has also
agreed to reimburse Wasserstein Perella for certain reasonable out-of-pocket
expenses incurred in connection with the Offer, including fees and disbursements
of counsel, and to indemnify Wasserstein Perella against certain liabilities,
including certain liabilities under the federal securities laws. Wasserstein
Perella is also rendering various investment banking and other advisory services
to Dart, for which it is receiving customary compensation, and can be expected
to continue to render similar services to Dart and/or affiliates of Dart
(including the Company) in the future.
The Company has retained D.F. King & Co., Inc. to act as Information Agent
and The Bank of New York to act as Depositary in connection with the Offer. The
Information Agent may contact holders of Shares by mail, telephone, telex,
telegraph and personal interviews and may request brokers, dealers and other
nominee shareholders to forward materials relating to the Offer to beneficial
owners. The Information Agent and the Depositary will each receive reasonable
and customary compensation for their respective services, will be reimbursed for
certain reasonable out-of-pocket expenses and will be indemnified against
certain liabilities and expenses in connection with the Offer, including certain
liabilities under the federal securities laws. The Depositary has also rendered
transfer services to the Company in the past for which it has received customary
compensation, and can be expected to continue to render similar services to the
Company in the future. Neither the Dealer Manager, the Depositary nor the
Information Agent has been retained to, or is authorized to, make
recommendations in connection with the Offer.
The Company will not pay any fees or commissions to any broker or dealer or
any other person (other than the Dealer Manager, the Information Agent and the
Depositary) for soliciting tenders of Shares pursuant to the Offer. Brokers,
dealers, commercial banks and trust companies will, upon request, be reimbursed
by the Company for reasonable and necessary costs and expenses incurred by them
in forwarding materials to their customers.
17. MISCELLANEOUS
The Company is not aware of any jurisdiction in which the making of the
Offer or the acceptance for payment of Shares in connection therewith would not
be in compliance with the laws of such jurisdiction. If the Company becomes
aware of any jurisdiction where the making of the Offer would not be in
compliance with such laws, the Company will make a good faith effort to comply
with such laws or seek to have such laws declared inapplicable to the Offer. If
after such good faith effort the Company cannot comply with any such laws, the
Offer will not be made to, nor will tenders be accepted from or on behalf of,
holders of Shares in any such jurisdictions.
TRAK AUTO CORPORATION
December 21, 1994
23
<PAGE> 24
Facsimile copies of the Letter of Transmittal will be accepted from
Eligible Institutions. The Letter of Transmittal and certificates for shares and
any other required documents should be sent or delivered by each tendering
shareholder or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary at one of its addresses set forth below.
The Depositary is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: Facsimile Transmission: By Hand or Overnight Courier:
Tender and Exchange Department (for Eligible Institutions Only) Tender & Exchange Department
P.O. Box 11248 (212) 815-6213 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, NY 10286-1248 For Information Telephone: New York, NY 10286
(800) 507-9357
</TABLE>
Any questions or requests for assistance or for additional copies of the
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Information Agent at the telephone numbers and
addresses set forth below. You may also contact the Dealer Manager or your
broker, dealer, commercial bank or trust company for assistance concerning the
offer. To confirm the delivery of your shares, you are directed to contact the
Depositary.
The Information Agent is:
D.F. KING & CO., INC.
77 Water Street
New York, NY 10005
CALL COLLECT (212) 269-5550 or
CALL TOLL FREE (800) 207-3158
The Dealer Manager for the Offer is:
WASSERSTEIN PERELLA & CO., INC.
31 West 52nd Street
New York, New York 10019
(212) 969-2700
(call collect)
December 21, 1994
<PAGE> 1
LETTER OF TRANSMITTAL
TO ACCOMPANY SHARES OF COMMON STOCK
OF
TRAK AUTO CORPORATION
TENDERED PURSUANT TO THE OFFER TO PURCHASE
DATED DECEMBER 21, 1994
THIS OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, JANUARY 23, 1995, UNLESS THE OFFER IS EXTENDED.
To: THE BANK OF NEW YORK, Depositary
<TABLE>
<S> <C> <C>
By Mail: Facsimile Transmission: By Hand or Overnight Courier:
(for Eligible Institutions Only)
Tender and Exchange Department (212) 815-6213 Tender and Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive & Deliver Window
New York, NY 10286-1248 New York, NY 10286
For Information Telephone:
(800) 507-9357
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED (SEE INSTRUCTIONS 3 AND 4)
------------------------------------------------------------------------------------------------------------------------------
NAMES AND ADDRESS(ES) OF REGISTERED HOLDER(S) CERTIFICATE(S) TENDERED
(PLEASE FILL IN EXACTLY AS APPEARS ON CERTIFICATE(S)) (ATTACH SIGNED LIST IF NECESSARY)
------------------------------------------------------------------------------------------------------------------------------
NUMBER OF SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
-------------------------------------------------
<S> <C> <C> <C>
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
Total Shares Tendered
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Indicate in this box the order (by certificate number) in which Shares are to
be purchased in event of proration. (Attach additional signed list if
necessary.):*** See Instruction 9.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* Need not be completed if Shares are delivered by book-entry transfer.
** If you desire to tender fewer than all Shares evidenced by any certificates
listed above, please indicate in this column the number of Shares you wish
to tender. Otherwise, all Shares evidenced by such certificates will be
deemed to have been tendered. See Instruction 4.
*** If you do not designate an order, in the event less than all Shares tendered
are purchased due to proration, Shares will be selected for purchase by the
Depositary.
<PAGE> 2
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN ONE OF THOSE SHOWN
ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN ONE OF
THOSE LISTED ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY.
This Letter of Transmittal is to be used only if (a) certificates for
Shares (as defined below) are to be forwarded with it or (b) a tender of Shares
is to be made by book-entry transfer to the account maintained by the Depositary
at The Depository Trust Company, the Midwest Securities Trust Company or the
Philadelphia Depository Trust Company (collectively, the "Book-Entry Transfer
Facilities") pursuant to Section 3 of the Offer to Purchase.
Shareholders who desire to tender Shares pursuant to the Offer and who
cannot deliver their certificates for their Shares (or who are unable to comply
with the procedures for book-entry transfer on a timely basis) and all other
documents required by this Letter of Transmittal to the Depositary at or before
the Expiration Date (as defined in the Offer to Purchase) may tender their
Shares according to the guaranteed delivery procedures set forth in Section 3 of
the Offer to Purchase. See Instruction 2. Delivery of documents to one of the
Book-Entry Transfer Facilities does not constitute delivery to the Depositary.
<TABLE>
<S> <C>
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH ONE OF THE BOOK-ENTRY
TRANSFER FACILITIES AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
--------------------------------------------
Check Box of Applicable Book-Entry Transfer Facility:
DTC / / MSTC / / PDTC / /
Account Number:
-----------------------------------------------------------
Transaction Code Number:
--------------------------------------------------
/ / CHECK HERE IF CERTIFICATES FOR TENDERED SHARES ARE BEING DELIVERED PURSUANT
TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND
COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s):
------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
-----------------------
Name of Institution that Guaranteed Delivery:
-----------------------------
Window Ticket Number (if available):
--------------------------------------
If Delivery is by Book-Entry Transfer:
Check Box of Applicable Book-Entry Transfer Facility:
DTC / / MSTC / / PDTC / /
Account Number:
-----------------------------------------------------------
Transaction Code Number:
--------------------------------------------------
</TABLE>
ODD LOTS
(SEE INSTRUCTION 7)
This section is to be completed ONLY if Shares are being tendered by or on
behalf of a person owning beneficially as of the close of business on December
20, 1994, and continuing to own beneficially until the Expiration Date, an
aggregate of fewer than 100 Shares.
The undersigned either (check one box):
/ / was the beneficial owner as of the close of business on December
20, 1994, and will continue to be the beneficial owner until the
Expiration Date, of an aggregate of fewer than 100 Shares, all of
which are being tendered, or
/ / is a broker, dealer, commercial bank, trust company or other
nominee that (i) is tendering, for the beneficial owners thereof,
Shares with respect to which it is the record owner, and (ii)
believes, based upon representations made to it by each such
beneficial owner, that such beneficial owner owned beneficially as
of the close of business on December 20, 1994, and will continue
to own beneficially until the Expiration Date, an aggregate of
fewer than 100 Shares, and is tendering all of such Shares,
and, in either case, hereby represents that the above indicated
information is true and correct as to the undersigned.
ODD LOT SHARES CANNOT BE CONDITIONALLY TENDERED
<PAGE> 3
CONDITIONAL TENDER
(SEE INSTRUCTION 9)
/ / CHECK HERE IF TENDER OF SHARES IS CONDITIONED ON THE COMPANY
PURCHASING ALL OR A MINIMUM NUMBER OF THE TENDERED SHARES, AND
COMPLETE THE FOLLOWING:
Minimum Number of Shares to be sold: .
-------------
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Trak Auto Corporation, a Delaware
corporation (the "Company"), the above-described shares of the Company's Common
Stock, par value $0.01 per share (the "Shares"), at the price of $17.50 per
Share, net to the seller in cash, upon the terms and subject to the conditions
set forth in the Company's Offer to Purchase dated December 21, 1994, receipt of
which is hereby acknowledged, and in this Letter of Transmittal (which together
constitute the "Offer").
Subject to and effective upon acceptance for payment of the Shares tendered
hereby in accordance with the terms of the Offer (including, if the Offer is
extended or amended, the terms or conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to or upon the
order of the Company all right, title and interest in and to all Shares tendered
hereby or orders the registration of such Shares tendered by book-entry transfer
that are purchased pursuant to the Offer to or upon the order of the Company and
hereby irrevocably constitutes and appoints the Depositary as attorney-in-fact
of the undersigned with respect to such Shares, with full power of substitution
(such power of attorney being an irrevocable power coupled with an interest),
to:
(a) deliver certificates for Shares, or transfer ownership of such
Shares on the account books maintained by a Book-Entry Transfer Facility,
together in either such case with all accompanying evidences of transfer and
authenticity, to or upon the order of the Company, upon receipt by the
Depositary, as the undersigned's agent, of the Purchase Price (as defined
below) with respect to such Shares;
(b) present certificates for such Shares for cancellation and transfer
on the Company's books; and
(c) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Shares, subject to the next paragraph, all in accordance
with the terms of the Offer.
The undersigned hereby represents and warrants to the Company that:
(a) the undersigned understands that tenders of Shares pursuant to any
one of the procedures described in Section 3 of the Offer to Purchase and in
the Instructions hereto will constitute the undersigned's acceptance of the
terms and conditions of the Offer, including the undersigned's
representation and warranty that (i) the undersigned has a net long position
in Shares or equivalent securities at least equal to the Shares tendered
within the meaning of Rule 14e-4 under the Securities Exchange Act of 1934,
as amended, and (ii) such tender of Shares complies with Rule 14e-4;
(b) when and to the extent the Company accepts the Shares for purchase,
the Company will acquire good, marketable and unencumbered title to them,
free and clear of all security interests, liens, charges, encumbrances,
conditional sales agreements or other obligations relating to their sale or
transfer, and not subject to any adverse claim;
(c) on request, the undersigned will execute and deliver any additional
documents the Depositary or the Company deems necessary or desirable to
complete the assignment, transfer and purchase of the Shares tendered
hereby; and
(d) the undersigned has read, understands and agrees with all of the
terms of the Offer.
The names and addresses of the registered holders should be printed, if they
are not already printed above, exactly as they appear on the certificates
representing Shares tendered hereby. The certificate numbers, the number of
Shares represented by such certificates, and the number of Shares that the
undersigned wishes to tender, should be set forth in the appropriate boxes
above.
The undersigned understands that, if he tenders all of his Shares, he may
condition his tender of Shares upon the acceptance by the Company of all or a
minimum number of Shares tendered hereby, as described in Section 3 of the Offer
to Purchase. Such a conditional tender may be made by completing the section
under the heading "Conditional Tender" above. If such section is not completed,
the tender will be deemed unconditional.
The undersigned understands that the Company seeks to purchase 1,500,000 of
its Shares at the price of $17.50 per Share. The undersigned understands that
Shares properly tendered and not withdrawn will be purchased at the Purchase
Price, net to the seller in cash, upon the terms and subject to the conditions
of the Offer, including its proration provisions, minimum Shares condition,
minimum beneficial owners condition and conditional tender provisions, and that
the Company will return all other Shares, including Shares not purchased because
of proration or conditional tenders.
The undersigned recognizes that under certain circumstances set forth in the
Offer to Purchase, the Company may terminate or amend the Offer or may postpone
the acceptance for payment of, or the payment for, Shares tendered or may accept
for payment fewer than all of the Shares tendered hereby. In either event, the
undersigned understands that certificate(s) for any Shares not tendered or not
purchased will be returned to the undersigned at the address indicated above,
unless otherwise indicated under the "Special Payment Instructions" or "Special
Delivery Instructions" below. The undersigned recognizes that the Company has no
obligation, pursuant to the Special Payment Instructions, to transfer any
certificate for Shares from the name of their registered holder, or to order the
registration or transfer of such Shares tendered by book-entry transfer, if the
Company purchases none of the Shares represented by such certificate or tendered
by such book-entry transfer.
<PAGE> 4
The undersigned understands that acceptance of Shares by the Company for
payment will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Offer.
The check for the Purchase Price for such of the tendered Shares as are
purchased will be issued to the order of the undersigned and mailed to the
address indicated above unless otherwise indicated under the Special Payment
Instructions or the Special Delivery Instructions below.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned and any
obligations of the undersigned under this Letter of Transmittal shall be binding
upon the heirs, personal representatives, successors and assigns of the
undersigned. Except as stated in the Offer to Purchase, this tender is
irrevocable.
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 5, 6, 8, AND 10)
To be completed ONLY if certificate(s) for Shares not tendered or not purchased
and/or any check for the Purchase Price of Shares purchased are to be issued in
the name of someone other than the undersigned, or if Shares delivered by
book-entry transfer that are not purchased are to be returned by credit to an
account maintained by a Book-Entry Transfer Facility.
Issue / / Check
/ / Certificate(s) to:
Name:
---------------------------------------------------
(PLEASE PRINT)
Address:
------------------------------------------------
- ---------------------------------------------------------
- ---------------------------------------------------------
(INCLUDE ZIP CODE)
- ---------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
/ / Credit Shares tendered by book-entry transfer and not purchased to the
account set forth below:
Name of account party:
------------------------------
Account number:
-------------------------------------
Check Box of Applicable Book-Entry Transfer Facility:
/ / DTC
/ / MSTC
/ / PDTC
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 5, 6, 8 AND 10)
To be completed ONLY if certificates for Shares not tendered or not purchased
and/or any 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 above.
Deliver / / Check
/ / Certificate(s) to:
Name:
---------------------------------------------------
(PLEASE PRINT)
Address:
------------------------------------------------
- ---------------------------------------------------------
- ---------------------------------------------------------
(INCLUDE ZIP CODE)
<PAGE> 5
SHAREHOLDER(S) SIGN HERE
(SEE INSTRUCTIONS 1 AND 5)
(PLEASE COMPLETE ENCLOSED FORM W-9)
Must be signed by the registered holder(s) exactly as name(s) appear(s) on
certificate(s) or on a security position listing or by persons(s) authorized to
become registered holder(s) by certificate(s) and documents transmitted with
this Letter of Transmittal. If signature is by attorney-in-fact, executor,
administrator, trustee, guardian, officer of a corporation or another acting in
a fiduciary or representative capacity, please set forth the full title. See
Instruction 6.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF OWNER(S))
Name(s):
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title):
---------------------------------------------------------
Address:
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Area Code and Telephone Number:
------------------------------------------------
Dated: , 199 Tax ID No. or Social Security No.:
--- -- ---------------------------
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature:
----------------------------------------------------------
Name(s):
-----------------------------------------------------------------------
(PLEASE PRINT)
Title:
-------------------------------------------------------------------------
Name of Firm:
------------------------------------------------------------------
Address:
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
------------------------------------------------
Dated: , 199 Tax ID No. or Social Security No.:
--------------- -- --------------
<PAGE> 6
INSTRUCTIONS
FORMING PART OF THE TERMS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required if either:
(a) this Letter of Transmittal is signed by the registered holder of
the Shares exactly as the name of the registered holder appears on the
certificate (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) tendered with this Letter
of Transmittal and payment and delivery are to be made directly to such
owner unless such owner has completed either the box entitled "Special
Payment Instructions" or "Special Delivery Instructions" above; or
(b) such Shares are tendered for the account of a financial
institution that is a member of the Securities Transfer Agents Medallion
Program (STAMP), the Stock Exchange Medallion Program (SEMP) or the New
York Stock Exchange, Inc. Medallion Signature Program (MSP) (each such
entity, an "Eligible Institution").
In all other cases, an Eligible Institution must guarantee all signatures
on this Letter of Transmittal. See Instruction 6.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be used only if certificates are
delivered with it to the Depositary (or such certificates are being delivered
pursuant to a Notice of Guaranteed Delivery previously sent to the Depositary)
or if tenders are to be made pursuant to the procedure for tender by book-entry
transfer set forth in Section 3 of the Offer to Purchase. Certificates for all
physically tendered Shares or confirmation of a book-entry transfer into the
Depositary's account at a Book-Entry Transfer Facility of Shares tendered
electronically, together in each case with a facsimile of the Letter of
Transmittal and any other documents required by this Letter of Transmittal,
should be mailed or delivered to the Depositary at the appropriate address set
forth herein and must be delivered to the Depositary on or before the Expiration
Date.
Shareholders whose certificates are not immediately available or who cannot
deliver Shares and all other required documents to the Depositary before the
Expiration Date, or whose Shares cannot be delivered on a timely basis pursuant
to the procedures for book-entry transfer, may tender their Shares by or through
any Eligible Institution by properly completing and duly executing and
delivering a Notice of Guaranteed Delivery (or facsimile of it) and by otherwise
complying with the guaranteed delivery procedure set forth in Section 3 of the
Offer to Purchase. Pursuant to such procedure, the certificates for all
physically tendered Shares or book-entry confirmation, as the case may be, as
well as a properly completed and duly executed Letter of Transmittal and all
other documents required by this Letter of Transmittal, must be received by the
Depositary within five business days after receipt by the Depositary of such
Notice of Guaranteed Delivery, all as provided in Section 3 of the Offer to
Purchase.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by a 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. For
Shares to be tendered validly pursuant to the guaranteed delivery procedure, the
Depositary must receive the Notice of Guaranteed Delivery on or before the
Expiration Date.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES,
IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
The Company will not accept any alternative or contingent tenders, nor will
it purchase any fractional Shares, except as expressly provided in the Offer to
Purchase. All tendering shareholders, by execution of this Letter of Transmittal
(or a photocopy of it), waive any right to receive any notice of the acceptance
of their tender.
3. INADEQUATE SPACE. If the space provided in the box captioned
"Description of Shares Tendered" is inadequate, the certificate numbers and/or
the number of Shares should be listed on a separate signed schedule and attached
to this Letter of Transmittal.
4. PARTIAL TENDERS AND UNPURCHASED SHARES. (Not applicable to shareholders
who tender by book-entry transfer.) If fewer than all of the Shares evidenced by
any certificate are to be tendered, fill in the number of Shares which are to be
tendered in the column entitled "Number of Shares Tendered." In such case, if
any tendered Shares are purchased, a new certificate for the remainder of the
Shares evidenced by the old certificate(s) will be issued and sent to the
registered holder(s), unless otherwise specified in either the "Special Payment
Instructions" or "Special Delivery Instructions" box on this Letter of
Transmittal, as soon as practicable after the Expiration Date. Unless otherwise
indicated, all Shares represented by the certificates listed and delivered to
the Depositary will be deemed to have been tendered.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS.
(a) 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 any change whatsoever.
(b) If the Shares are registered in the names of two or more joint
holders, each such holder must sign this Letter of Transmittal.
(c) 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 (or photocopies of it) as there are
different registrations of certificates.
<PAGE> 7
(d) When this Letter of Transmittal is signed by the registered
holder(s) of the Shares listed and transmitted hereby, no endorsement(s) of
certificate(s) representing such Shares or separate stock powers are
required unless payment is to be made, or the certificate(s) for Shares not
tendered or not purchased are to be issued, to a person other than the
registered holder(s). Signatures on such certificates or powers must be
guaranteed by an Eligible Institution. If this Letter of Transmittal is
signed by any person other than the registered holder(s) of the
certificate(s) listed, the certificate(s) must be endorsed or accompanied
by appropriate stock powers, in either case signed exactly as the name(s)
of the registered holder(s) appears on the certificate(s), and the
signature(s) on such certificate(s) or stock powers must be guaranteed by
an Eligible Institution. See Instruction 1.
(e) 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 person should so indicate when signing and
must submit proper evidence satisfactory to the Company of their authority
so to act.
6. STOCK TRANSFER TAXES. Except as provided in this Instruction 6, no
stock transfer tax stamps or funds to cover such stamps need accompany this
Letter of Transmittal. The Company will pay or cause to be paid any stock
transfer taxes payable on the transfer to it of Shares purchased pursuant to the
Offer. If, however:
(a) payment of the Purchase Price is to be made to any person other
than the registered holder(s);
(b) Shares not tendered or not accepted for purchase are to be
registered in the name of any person other than the registered holder(s);
or
(c) tendered certificates are registered in the name of any person
other than the person(s) signing this Letter of Transmittal;
then the Depositary will deduct from the Purchase Price the amount of any stock
transfer taxes (whether imposed on the registered holder, such other person or
otherwise) payable on account of the transfer to such person unless satisfactory
evidence of the payment of such taxes or an exemption from them is submitted.
7. ODD LOTS. As described in Section 1 of the Offer to Purchase, if the
Company is to purchase fewer than all Shares tendered before the Expiration Date
and not withdrawn, the Shares purchased first will under certain circumstances
consist of all Shares tendered by any shareholder who owned of record or owned
beneficially, as of the close of business on December 20, 1994, an aggregate of
fewer than 100 Shares, and who tenders all of his Shares (an "Odd Lot Owner").
This preference will not be available unless the box captioned "Odd Lots" is
completed.
8. CONDITIONAL TENDERS. As described in Section 3 of the Offer to
Purchase, shareholders may condition their tenders on all or a minimum number of
their tendered Shares being purchased ("Conditional Tenders"). If the Company is
to purchase less than all Shares tendered before the Expiration Date and not
withdrawn, any Shares tendered pursuant to a Conditional Tender for which the
condition was not satisfied shall be deemed withdrawn, subject to reinstatement
if such Conditionally Tendered Shares are all the Shares held by the person
tendering and the Conditionally Tendered Shares are subsequently selected by lot
for purchase subject to Section 1 of the Offer to Purchase. All tendered Shares
shall be deemed unconditionally tendered unless the Conditional Tender section
is completed. The Conditional Tender alternative is made available so that
shareholders may assure that any gain that they realize will be capital gain
rather than ordinary income for federal income tax purposes. Odd Lot Shares, in
order to be eligible for preferential treatment, cannot be conditionally
tendered. It is the tendering shareholder's responsibility to calculate the
minimum number of Shares, and each shareholder is urged to consult his own tax
advisor.
9. ORDER OF PURCHASE IN EVENT OF PRORATION. As described in Section 1 of
the Offer to Purchase, shareholders may designate the order in which their
Shares are to be purchased in the event of proration. The order of purchase may
have an effect on the federal income tax classification of any gain or loss on
the Shares purchased. See Sections l and 14 of the Offer to Purchase.
10. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If certificate(s) for
Shares not tendered or not purchased and/or check(s) are to be issued in the
name of a person other than the signer of the Letter of Transmittal or if such
certificate(s) and/or check(s) are to be sent to someone other than the person
signing the Letter of Transmittal or to the signer at a different address, the
boxes captioned "Special Payment Instructions" and/or "Special Delivery
Instructions" on this Letter of Transmittal should be completed as applicable
and signatures must be guaranteed as described in Instruction 1.
11. IRREGULARITIES. All questions as to the number of Shares to be
accepted and the validity, form, eligibility (including time of receipt) and
acceptance for payment of any tender of Shares will be determined by the Company
in its sole discretion, which determinations shall be final and binding on all
parties. The Company reserves the absolute right to reject any or all tenders of
Shares it determines not to be in proper form or the acceptance of which or
payment for which may, in the opinion of the Company's counsel, be unlawful. The
Company also reserves the absolute right to waive any of the conditions of the
Offer and any defect or irregularity in the tender of any particular Shares, and
the Company's interpretation of the terms of the Offer (including these
instructions) will be final and binding on all parties. No tender of shares will
be deemed to be properly made until all defects and irregularities have been
cured or waived. Unless waived, any defects or irregularities in connection with
tenders must be cured within such time as the Company shall determine. None of
the Company, the Dealer Manager, the Depositary, the Information Agent (as
defined in the Offer to Purchase) or any other person is or will be obligated to
give notice of any defects or irregularities in tenders and none of them will
incur any liability for failure to give any such notice.
12. QUESTIONS AND REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions
and requests for assistance may be directed to, or additional copies of the
Offer to Purchase, the Notice of Guaranteed Delivery and this Letter of
Transmittal may be obtained from, the Information Agent or the Dealer Manager at
their addresses and telephone numbers set forth at the end of this Letter of
Transmittal or from your broker, dealer, commercial bank or trust company.
<PAGE> 8
13. FORM W-9 AND FORM W-8. Shareholders other than corporations and
certain foreign individuals may be subject to backup federal income tax
withholding. Each such tendering shareholder or other payee who does not
otherwise establish to the satisfaction of the Depositary an exemption from
backup federal income tax withholding is required to provide the Depositary with
a correct taxpayer identification number ("TIN") on Form W-9 which is provided
with this Letter of Transmittal, and to indicate that the shareholder or other
payee is not subject to backup withholding. For an individual, his TIN will
generally be his social security number. Failure to provide the information on
the form may subject the tendering shareholder or other payee to 31% backup
federal income tax withholding on the payments made to the shareholder or other
payee with respect to Shares purchased pursuant to the Offer and up to a $50.00
penalty imposed by the Internal Revenue Service. 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. You may submit the
form if you have applied for, but have not yet received, a TIN. If the
Depositary is not provided a TIN within sixty (60) days, the Depositary will
withhold 31% on all payments thereafter until a TIN is provided to the
Depositary. Shareholders who are foreign individuals should submit Form W-8 to
certify that they are exempt from backup withholding, unless Instruction 14
applies. Form W-8 may be obtained from the Depositary. For additional
information concerning Form W-9, see the accompanying instructions thereto.
14. WITHHOLDING ON FOREIGN SHAREHOLDERS. The Depositary will withhold
federal income tax equal to 30% of the gross proceeds payable to a foreign
shareholder or his agent unless the Depositary determines that a reduced rate of
withholding is available pursuant to a tax treaty or that an exemption from
withholding is applicable because such gross proceeds are effectively connected
with the conduct of a trade or business in the United States. For this purpose,
a foreign shareholder is any shareholder that is not (i) a citizen or resident
of the United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or any political subdivision
thereof or (iii) an estate or trust the income of which is subject to United
States federal income taxation regardless of the source of such income. In order
to apply for a reduced rate of withholding pursuant to a tax treaty, a foreign
shareholder must deliver to the Depositary a properly completed Form 1001. In
order to apply for exemption from withholding on the basis that the gross
proceeds are effectively connected with the conduct of a trade or business in
the United States, a foreign shareholder must deliver to the Depositary a
properly completed Form 4224. (Exemption from backup withholding does not exempt
a foreign shareholder from the 30% withholding.) These forms can be obtained
from the Depositary, the Information Agent, or the Dealer Manager. The
Depositary will determine a shareholder's status as a foreign shareholder and
eligibility for a reduced rate of, or an exemption from, withholding by
reference to the shareholder's address and to any submitted certificates or
statements concerning eligibility for a reduced rate of, or exemption from,
withholding, unless facts and circumstances indicate that reliance is not
warranted or applicable law requires some other method for determining
eligibility for determining whether a reduced rate of withholding is applicable.
A foreign shareholder with respect to whom tax has been withheld may be eligible
to obtain a refund of all or a portion of the withheld tax if such shareholder
meets one of the exceptions for capital gain or loss treatment described in
Section 14 of the Offer to Purchase or is otherwise able to establish that no
tax or a reduced amount of tax was due. Foreign shareholders are urged to
consult their tax advisors regarding the application of federal income tax
withholding, including eligibility for a withholding tax reduction or exemption
and the refund procedures.
<PAGE> 9
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON FORM W-9
<TABLE>
<S> <C> <C>
Form W-9 GIVE THIS FORM
(Rev. January 1993) REQUEST FOR TAXPAYER TO THE REQUESTER.
Department of the Treasury IDENTIFICATION NUMBER AND CERTIFICATION DO NOT SEND TO
Internal Revenue Service IRS.
<CAPTION>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Name (if joint names, list first and circle the name of the person or entity whose number you enter in Part
1 below. SEE INSTRUCTIONS ON PAGE 2 IF YOUR NAME HAS CHANGED.)
------------------------------------------------------------------------------------------------------------------------
Business name (Sole proprietors SEE instructions on page 2). (IF YOU ARE EXEMPT FROM BACKUP WITHHOLDING,
COMPLETE THIS FORM AND ENTER "EXEMPT" IN PART II BELOW.)
------------------------------------------------------------------------------------------------------------------------
Address (number and street) List account numbers(s) here (optional)
------------------------------------------------------------------
City, state, and ZIP code
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PART 1 TAXPAYER IDENTIFICATION NUMBER (TIN) PART II For Payees Exempt From
- -------------------------------------------------------------------------------------------- Backup Withholding (See
Enter your TIN in the appropriate box. For Social Security number Exempt Payees and
individuals, this is your social security number / / / - / - / / / / Payments on page 2)
(SSN). For sole proprietors, see the instructions ---------------------------- --------------------------------
on page 2. For other entities, it is your employer --------------------------------
identification number (EIN). If you do not have a OR Requester's name and address
number, see HOW TO OBTAIN A TIN below. (optional)
Employee identification number
NOTE: If the account is in more than one name, / / - / / / / / / /
see the chart on page 2 for guidelines on whose ----------------------------
number to enter.
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
CERTIFICATION.-- Under penalties of perjury, I certify that:
1. The number shown on this form is my correct taxpayer identification number
(or I am waiting for a number to be issued to me), and
2. I am not subject to backup withholding because: (a) I am exempt from backup
withholding, or (b) I have not been notified by the Internal Revenue Service
that I am subject to backup withholding as a result of a failure to report
all interest or dividends, or (c) the IRS has notified me that I am no longer
subject to backup withholding.
CERTIFICATION INSTRUCTIONS.-- You must cross out item 2 above if you have been
notified by the IRS that you are currently subject to backup withholding because
of underreporting interest or dividends on your tax return. For real estate
transactions, item 2 does not apply. For mortgage interest paid, the acquisition
or abandonment of secured property, contributions to an individual retirement
arrangement (IRA), and generally payments other than interest and dividends, you
are not required to sign the Certification, but you must provide your correct
TIN. (Also see SIGNING THE CERTIFICATION on page 2).
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SIGN
HERE SIGNATURE DATE
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Section references are to the Internal Revenue Code.
PURPOSE OF FORM.-- A person who is required to file an information return with
the IRS must obtain your correct TIN to report income paid to you, real estate
transactions, mortgage interest you paid, the acquisition or abandonment of
secured property, or contributions you made to an IRA. Use Form W-9 to furnish
your correct TIN to the requester (the person asking you to furnish your TIN)
and, when applicable, (1) to certify that the TIN you are furnishing is correct
(or that you are waiting for a number to be issued), (2) to certify that you are
not subject to backup withholding, and (3) to claim exemption from backup
withholding if you are an exempt payee. Furnishing your correct TIN and making
the appropriate certifications will prevent certain payments from being subject
to backup withholding.
NOTE: If a requester gives you a form other than a W-9 to request your TIN, you
must use the requester's form.
HOW TO OBTAIN A TIN.-- If you do not have a TIN, apply for one immediately. To
apply, get FORM SS-5, Application for a Social Security Card (for individuals),
from your local office of the Social Security Administration, or FORM SS-4,
Application for Employer Identification Number (for businesses and all other
entities), from your local IRS office.
To complete Form W-9 if you do not have a TIN, write "Applied for" in the space
for the TIN in Part 1, sign and date the form, and give it to the requester.
Generally, you will then have 60 days to obtain a TIN and furnish it to the
requester. If the requester does not receive your TIN within 60 days, backup
withholding, if applicable, will begin and continue until you furnish your TIN
to the requester. For reportable interest or dividend payments, the payer must
exercise one of the following options concerning backup withholding during this
60-day period. Under option (1), a payer must backup withhold on any withdrawals
you make from your account after 7 business days after the requester receives
this form back from you. Under option (2), the payer must backup withhold on any
reportable interest or dividend payments made to your account, regardless of
whether you make any withdrawals. The backup withholding under option (2) must
begin no later than 7 business days after the requester receives this form back.
Under option (2), the payer is required to refund the amounts withheld if your
certified TIN is received within the 60-day period and you were not subject to
backup withholding during that period.
NOTE: Writing "Applied for" on the form means that you have already applied for
a TIN OR that you intend to apply for one in the future.
As soon as you receive your TIN, complete another Form W-9, include your TIN,
sign and date the form, and give it to the requester.
WHAT IS BACKUP WITHHOLDING?-- Persons making certain payments to you after 1992
are required to withhold and pay to the IRS 31% of such payments under certain
conditions. This is called "backup withholding." Payments that could be subject
to backup withholding include interest, dividends, broker and barter exchange
transactions, rents, royalties, nonemployee compensation, and certain payments
from fishing boat operators, but do not include real estate transactions.
If you give the requester your correct TIN, make the appropriate
certifications, and report all your taxable interest and dividends on your tax
return, your payments will not be subject to backup withholding. Payments you
receive will be subject to backup withholding if:
1. You do not furnish your TIN to the requester, or
2. The IRS notifies the requester that you furnished an incorrect TIN, or
3. You are notified by the IRS that you are subject to backup withholding
because you failed to report all your interest and dividends on your tax return
(for reportable interest and dividends only), or
4. You do not certify to the requester that you are not subject to backup
withholding under 3 above (for reportable interest and dividend accounts opened
after 1983 only), or
5. You do not certify your TIN. This applies only to reportable interest,
dividend, broker, or barter exchange accounts opened after 1983, or broker
accounts considered inactive in 1983.
Except as explained in 5 above, other reportable payments are subject to backup
withholding only if 1 or 2 above applies. Certain payees and payments are exempt
from backup withholding and information reporting. See PAYEES AND PAYMENTS
EXEMPT FROM
- --------------------------------------------------------------------------------
1/11/93 Cat. No. 10231X Form W-9 (Rev. 1-93)
<PAGE> 10
Form W-9 (Rev. 1-93) Page 2
- --------------------------------------------------------------------------------
BACKUP WITHHOLDING, below, and Exempt PAYEES AND PAYMENTS under Specific
Instructions, below, if you are an exempt payee.
PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING.-- The following is a list of
payees exempt from backup withholding and for which no information reporting is
required. For interest and dividends, all listed payees are exempt except item
(9). For broker transactions, payees listed in (1) through (13) and a person
registered under the Investment Advisers Act of 1940 who regularly acts as a
broker are exempt. Payments subject to reporting under sections 6041 and 6041A
are generally exempt from backup withholding only if made to payees described in
items (1) through (7), except a corporation that provides medical and health
care services or bills and collects payments for such services is not exempt
from backup withholding or information reporting. Only payees described in items
(2) through (6) are exempt from backup withholding for barter exchange
transactions, patronage dividends, and payments by certain fishing boat
operators.
(1) A corporation. (2) An organization exempt from tax under section 501(a), or
an IRA or a custodial account under section 403(b)(7). (3) The United States or
any of its agencies or instrumentalities. (4) A state, the District of Columbia,
a possession of the United States, or any of their political subdivisions or
instrumentalities. (5) A foreign government or any of its political
subdivisions, agencies, or instrumentalities. (7) A foreign central bank of
issue. (8) A dealer in securities or commodities required to register in the
United States or a possession of the United States. (9) A futures commission
merchant registered with the Commodity Futures Trading Commission. (10) A real
estate investment trust. (11) An entity registered at all times during the tax
year under the Investment Company Act of 1940. (12) A common trust fund operated
by a bank under section 584(a). (13) A financial institution. (14) A middleman
known in the investment community as a nominee or listed in the most recent
publication of the American Society of Corporate Secretaries, Inc., Nominee
List. (15) A trust exempt from tax under section 664 or described in section
4947.
Payments of dividends and patronage dividends generally not subject to backup
withholding include the following:
- - Payments to nonresident aliens subject to withholding under section 1441.
- - Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident partner.
- - Payments of patronage dividends not paid in money.
- - Payments made by certain foreign organizations.
Payments of Interest generally not 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 TIN to the payer.
- - Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- - Payments described in section 6049(b)(5) to nonresident aliens.
- - Payments on tax-free covenant bonds under section 1451.
- - Payments made by certain foreign organizations.
- - Mortgage interest paid to you.
Payments that are not subject to information reporting are also not subject to
backup withholding. For details, see sections 6041, 6041A(a), 6042, 6044, 6045,
6049, 6050A, and 6050N, and their regulations.
PENALTIES
FAILURE TO FURNISH TIN.-- If you fail to furnish your correct TIN to a
requester, 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.
CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.-- If you make a
false statement with no reasonable basis that results in no backup withholding,
you are subject to a $500 penalty.
CRIMINAL PENALTY FOR FALSIFYING INFORMATION.-- Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
MISUSE OF TINS.-- If the requester discloses or uses TINs in violation of
Federal law, the requester may be subject to civil and criminal penalties.
SPECIFIC INSTRUCTIONS
NAME.-- If you are an individual, you must generally provide the name shown on
your social security card. However, if you have changed your last name, for
instance, due to marriage, without informing the Social Security Administration
of the name change, please enter your first name, the last name shown on your
social security card, and your new last name.
If you are a sole proprietor, you must furnish your individual name and either
your SSN or EIN. You may also enter your business name or "doing business as"
name on the business name line. Enter your name(s) as shown on your social
security card and/or as it was used to apply for your EIN on Form SS-4.
SIGNING THE CERTIFICATION.--
1. INTEREST, DIVIDEND, AND BARTER EXCHANGE ACCOUNTS OPENED BEFORE 1984 AND
BROKER ACCOUNTS CONSIDERED ACTIVE DURING 1983. You are required to furnish your
correct TIN, but you are not required to sign the certification.
2. INTEREST, DIVIDEND, BROKER, AND BARTER EXCHANGE ACCOUNTS OPENED AFTER 1983
AND BROKER ACCOUNTS CONSIDERED INACTIVE DURING 1983. You must sign the
certification or backup withholding will apply. If you are subject to backup
withholding and you are merely providing your correct TIN to the requester, you
must cross out item 2 in the certification before signing the form.
3. REAL ESTATE TRANSACTIONS. You must sign the certification. You may cross out
item 2 of the certification.
4. OTHER PAYMENTS.You are required to furnish your correct TIN, but you are not
required to sign the certification unless you have been notified of an incorrect
TIN. Other payments include payments made in the course of the requester's trade
or business for rents, royalties, goods (other than bills for merchandise),
medical and health care services, payments to a nonemployee for services
(including attorney and accounting fees), and payments to certain fishing boat
crew members.
5. MORTGAGE INTEREST PAID BY YOU, ACQUISITION OR ABANDONMENT OF SECURED
PROPERTY, OR IRA CONTRIBUTIONS. You are required to furnish your correct TIN,
but you are not required to sign the certification.
6. EXEMPT PAYEES AND PAYMENTS. If you are exempt from backup withholding, you
should complete this form to avoid possible erroneous backup withholding. Enter
your correct TIN in Part 1, write "EXEMPT" in the block in Part II, and sign and
date the form. If you are a nonresident alien or foreign entity not subject to
backup withholding, give the requester a completed Form W-8, Certificate of
Foreign Status.
7. TIN "APPLIED FOR". Follow the instructions under How To Obtain a TIN, on
page 1, and sign and date this form.
SIGNATURE.-- For a joint account, only the person whose TIN is shown in Part I
should sign.
PRIVACY ACT NOTICE.-- Section 6109 requires you to furnish your correct TIN to
persons who must file information returns with IRS to report interest,
dividends, and certain other income paid to you, mortgage interest you paid, the
acquisition or abandonment of secured property, or contributions you made to an
IRA. The IRS uses the numbers for identification purposes and to help verify the
accuracy of your tax return. You must provide your TIN whether or not you are
required to file a tax return. Payers must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish a
TIN to a payer. Certain penalties may also apply.
WHAT NAME AND NUMBER TO GIVE THE REQUESTER
<TABLE>
<CAPTION>
- ---------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE NAME AND SSN OF:
- ---------------------------------------------------
<S> <C>
1. Individual The individual
2. Two or more The actual owner of the
individuals (joint account or, if combined
account) funds, the first
individual on the
account.(1)
3. Custodian account of The minor(2)
a minor (Uniform
Gift to Minors Act)
4. a. The usual The grantor-trustee(1)
revocable savings
trust (grantor is
also trustee)
b. So-called trust The actual owner(1)
account that is
not a legal or
valid trust under
state law
5. Sole proprietorship The owner(3)
<CAPTION>
- --------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE NAME AND EIN OF:
- --------------------------------------------------
<S> <C>
6. Sole proprietorship The owner(3)
7. A valid trust, Legal entity(4)
estate, or pension
trust
8. Corporate The corporation
9. Association, club, The organization
religious,
charitable,
educational, or
other tax-exempt
organization
10. Partnership The partnership
11. A broker or The broker or nominee
registered nominee
12. Account with the The public entity
Department of
Agriculture in the
name of a public
entity (such as a
state or local
government, school
district, or prison)
that receives
agricultural program
payments
- --------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's SSN.
(3) Show your individual name. You may also enter your business name. You may
use your SSN or EIN.
(4) List first and circle the name of the legal trust, estate, or pension trust.
(Do not furnish the TIN of the personal representative or trustee unless the
legal entity itself is not designated in the account title.)
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
W-9.2
<PAGE> 11
Facsimile copies of the Letter of Transmittal will be accepted from
Eligible Institutions. The Letter of Transmittal and certificates for shares and
any other required documents should be sent or delivered by each tendering
shareholder or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary at one of its addresses set forth below.
The Depositary is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: Facsimile Transmission: By Hand or Overnight Courier:
Tender and Exchange Department (for Eligible Institutions Only) Tender & Exchange Department
P.O. Box 11248 (212) 815-6213 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, NY 10286-1248 For Information Telephone: New York, NY 10286
(800) 507-9357
</TABLE>
Any questions or requests for assistance or for additional copies of the
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Information Agent at the telephone numbers and
addresses set forth below. You may also contact the Dealer Manager or your
broker, dealer, commercial bank or trust company for assistance concerning the
offer. To confirm the delivery of your shares, you are directed to contact the
Depositary.
The Information Agent is:
D.F. KING & CO., INC.
77 Water Street
New York, NY 10005
CALL COLLECT (212) 269-5550 or
CALL TOLL FREE (800) 207-3158
The Dealer Manager for the Offer is:
WASSERSTEIN PERELLA & CO., INC.
31 West 52nd Street
New York, New York 10019
(212) 969-2700
(call collect)
December 21, 1994
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
OF
SHARES OF COMMON STOCK
OF
TRAK AUTO CORPORATION
A form substantially equivalent to that set forth below must be used to
accept the Offer (as defined below) if certificates for shares of Common Stock,
par value $0.01 per share ("Shares"), of Trak Auto Corporation are not
immediately available, or if the procedures for book-entry transfer, as set
forth in the Offer to Purchase, cannot be completed on a timely basis, or time
will not permit the Letter of Transmittal and other required documents to reach
the Depositary by the Expiration Date (as defined in the Offer to Purchase).
Such form may be delivered by hand, mail, telegram, telex or facsimile
transmission to the Depositary. See Section 3, "Procedure for Tendering Shares,"
of the Offer to Purchase.
To The Depositary:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: Facsimile Transmission: By Hand or Overnight Courier:
Tender and Exchange (for Eligible Institutions Tender & Exchange Department
Department Only) 101 Barclay Street
P.O. Box 11248 (212) 815-6213 Receive and Deliver Window
Church Street Station New York, NY 10286
New York, NY 10286-1248 For Information Telephone:
(800) 507-9357
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN THOSE SHOWN ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE NUMBER OTHER THAN THOSE LISTED ABOVE
DOES NOT CONSTITUTE A VALID DELIVERY.
Ladies and Gentlemen:
The undersigned hereby tenders to Trak Auto Corporation, a Delaware
corporation, upon the terms and subject to the conditions set forth in its Offer
to Purchase dated December 21, 1994 and the related Letter of Transmittal (which
together constitute the "Offer"), receipt of which is hereby acknowledged,
__________Shares at the price of $17.50 per Share pursuant to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase.
<TABLE>
<S> <C>
Share Certificate Nos. (if available): Signature(s)
--------------------------------
- ---------------------------------------- Name(s):
------------------------------------
- ---------------------------------------- Address:
If Shares will be delivered by book-entry ------------------------------------
transfer.
(Check one) --------------------------------------------
/ / The Depository Trust Company Area Code and Telephone Number:
/ / Midwestern Securities Trust Company -------------
/ / Philadelphia Depository Trust Company
Account Number:
-------------------------
</TABLE>
<PAGE> 2
GUARANTEE
The undersigned, a financial institution that is a member of the Securities
Transfer Agents Medallion Program (STAMP), the Stock Exchange Medallion Program
(SEMP) or the New York Stock Exchange Medallion Signature Program (MSP),
guarantees (a) that the above-named person(s) "own(s)" the Shares tendered
hereby within the meaning of Rule 14e-4 under the Securities Exchange Act of
1934, as amended, (b) that such tender of Shares complies with Rule 14e-4 and
(c) that we will deliver to the Depositary either certificates representing the
Shares tendered hereby, in proper form for transfer, or confirmation of the
book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company, the Midwest Securities Trust Company or the
Philadelphia Depository Trust Company pursuant to the procedures for book-entry
tender set forth in the Offer to Purchase, in either case, together with a
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, within five (5) business days after the date of
receipt hereof by the Depositary.
Firm:
--------------------------------------
Sign Here:
--------------------------------------
(Authorized Signature)
--------------------------------------
(Title)
Name:
--------------------------------------
(Please Print or Type)
Address:
-----------------------------
-----------------------------
Area Code and
Telephone Number:
--------------------
Dated: , 199
------------ ---
2
<PAGE> 1
WASSERSTEIN PERELLA & CO., INC.
31 WEST 52ND STREET
NEW YORK, NY 10019
TRAK AUTO CORPORATION
OFFER TO PURCHASE FOR CASH 1,500,000 SHARES OF ITS COMMON STOCK AT A PURCHASE
PRICE OF $17.50 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON JANUARY 23, 1995,
UNLESS THE OFFER IS EXTENDED
December 21, 1994
To: Brokers, Dealers, Commercial Banks,
Trust Companies, and Other Nominees
Trak Auto Corporation, a Delaware corporation (the "Company"), is offering
to purchase 1,500,000 shares of its Common Stock, par value $0.01 per share (the
"Shares"), at a price of $17.50 per share, net to the seller in cash, upon the
terms and subject to the conditions set forth in its Offer to Purchase dated
December 21, 1994, and the related Letter of Transmittal (which together
constitute the "Offer").
All Shares properly tendered and not withdrawn will be purchased at the
Purchase Price, net to the seller in cash, upon the terms and subject to the
conditions of the Offer, including the proration terms thereof. See Section 1 of
the Offer to Purchase.
THE OFFER IS CONDITIONED UPON A MINIMUM OF 1,500,000 SHARES BEING TENDERED
AND NOT WITHDRAWN, ON THERE BEING AT LEAST 500 BENEFICIAL OWNERS OF SHARES
FOLLOWING COMPLETION OF THE OFFER, AND ON CERTAIN OTHER CONDITIONS. SEE SECTION
6 OF THE OFFER TO PURCHASE.
We are asking you to contact your clients for whom you hold Shares
registered in your name (or in the name of your nominee). Please bring the Offer
to their attention as promptly as possible. In connection with the Offer,
enclosed for your information and for forwarding to your clients for whom you
hold Shares registered in your name or in the name of your nominee are copies of
the following documents:
1. Offer to Purchase dated December 21, 1994;
2. Letter of Transmittal for your use and for the information of your
clients (together with IRS Form W-9);
3. Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Shares and all other required documents cannot be
delivered by the Expiration Date or if the procedure for book-entry
transfer cannot be completed on a timely basis;
4. A form of letter which may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of
your nominee, with space provided for obtaining such client's
instructions with regard to the Offer; and
5. Letter dated December 21, 1994 from the Chairman and Chief Executive
Officer of the Company to the Company's stockholders.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER,
PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, JANUARY 23, 1995, UNLESS THE OFFER IS EXTENDED.
<PAGE> 2
No fees or commissions will be payable to brokers, dealers or any person
for soliciting tenders of Shares pursuant to the Offer, other than fees paid to
the Depositary, the Information Agent and the Dealer Manager as described in the
Offer to Purchase. The Company will, however, upon request, reimburse you for
customary mailing and handling expenses incurred by you in forwarding any of the
enclosed materials to the beneficial owners of Shares held by you as a nominee
or in a fiduciary capacity. The Company will pay your costs and will pay any
stock transfer taxes applicable to its purchase of Shares, except as otherwise
provided in Instruction 6 of the Letter of Transmittal.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal and any other required documents should be sent
to the Depositary with either the certificate(s) representing the tendered
Shares or confirmation of their book-entry transfer all in accordance with the
instructions set forth in the Letter of Transmittal and the Offer to Purchase.
As described in Section 3, "Procedure for Tendering Shares," of the Offer
to Purchase, tenders may be made without the concurrent deposit of stock
certificates or concurrent compliance with the procedure for book-entry transfer
if such tenders are made by or through a broker or dealer which is a financial
institution that is a member of the Securities Transfer Agents Medallion Program
(STAMP), the Stock Exchange Medallion Program (SEMP) or the New York Stock
Exchange Medallion Signature Program (MSP). Certificates for Shares so tendered
(or confirmation of a book-entry transfer of such Shares to the Depositary or
deposited to its account at one of the book-entry transfer facilities described
in the Offer to Purchase), together with a properly completed and duly executed
Letter of Transmittal and any other documents required by the Letter of
Transmittal, must be received by the Depositary within five (5) business days
after timely receipt by the Depositary of a properly completed and duly executed
Notice of Guaranteed Delivery. Any questions or requests for assistance or
additional copies of the Offer to Purchase and the Letter of Transmittal may be
directed to the Dealer Manager or the Information Agent.
Very truly yours,
WASSERSTEIN PERELLA & CO., INC.
--------------------
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON AS AN AGENT OF THE COMPANY OR ANY OF ITS AFFILIATES, THE
DEALER MANAGER, THE DEPOSITARY OR THE INFORMATION AGENT, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO USE ANY DOCUMENTS OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM
IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH.
2
<PAGE> 1
TRAK AUTO CORPORATION
OFFER TO PURCHASE FOR CASH
1,500,000 SHARES OF ITS COMMON STOCK,
AT A PURCHASE PRICE OF $ 17.50 PER SHARE
December 21, 1994
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated December
21, 1994 and the related Letter of Transmittal (which together constitute the
"Offer") in connection with the Offer by Trak Auto Corporation, a Delaware
corporation (the "Company"), to purchase for cash 1,500,000 shares of its Common
Stock, par value $0.01 per share (the "Shares"), at a price, net to the seller
in cash, of $17.50 per Share, upon the terms and subject to the conditions of
the Offer.
The Offer is conditioned upon a minimum of 1,500,000 Shares being tendered
and not withdrawn, on there being at least 500 beneficial owners of Shares
following completion of the Offer, and on certain other conditions.
WE ARE THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT. AS SUCH, WE
ARE THE ONLY ONES WHO CAN TENDER YOUR SHARES, AND THEN ONLY PURSUANT TO
INSTRUCTIONS. WE ARE SENDING YOU THE LETTER OF TRANSMITTAL FOR YOUR INFORMATION
ONLY; YOU CANNOT USE IT TO TENDER SHARES WE HOLD FOR YOUR ACCOUNT.
Please instruct us whether you wish us to tender any or all of the Shares
we hold for your account on the terms and subject to the conditions of the
Offer.
We call your attention to the following:
1. You may condition your tender of Shares on the Company purchasing
all or a minimum number of your Shares.
2. You may designate the priority in which your shares shall be
purchased in the event of proration.
3. The Offer, proration period, and withdrawal rights will expire at
12:00 midnight, New York City Time, on Monday, January 23, 1995, unless the
Company extends the Offer.
4. The Offer is for 1,500,000 Shares, constituting approximately 25%
of the Shares outstanding as of December 20, 1994.
5. Tendering stockholders will not be obligated to pay any brokerage
commissions, solicitation fees or, subject to Instruction 6 of the Letter
of Transmittal, stock transfer taxes on the Company's purchase of Shares
pursuant to the Offer.
6. If you beneficially held, as of the close of business on December
20, 1994, an aggregate of fewer than 100 Shares, and you instruct us to
tender on your behalf all such Shares before the Expiration Date and check
the box captioned "Odd Lots" in the attached Instruction Form, the Company,
upon the terms and subject to the conditions of the Offer, may accept all
such Shares for purchase before proration, if any, of the purchase of other
Shares properly tendered as described below.
7. If you wish to have us tender any or all of your Shares, please so
instruct us by completing, executing and returning to us the attached
Instruction Form. An envelope to return your instructions to us is
enclosed. If you authorize us to tender your Shares, we will tender all
such Shares unless you specify otherwise on the attached Instruction Form.
<PAGE> 2
YOUR INSTRUCTION FORM SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US
TO SUBMIT A TENDER ON YOUR BEHALF ON OR BEFORE THE EXPIRATION OF THE OFFER. THE
OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MONDAY, JANUARY 23, 1995, UNLESS THE OFFER IS EXTENDED.
As described in Section 1 of the Offer to Purchase, if before the
Expiration Date more than 1,500,000 Shares (or such greater number of Shares as
the Company elects to purchase) are properly tendered and not withdrawn, the
Company will accept Shares for purchase at the Purchase Price in the following
order of priority:
(a) first, all Shares properly tendered prior to the Expiration Date
(and not withdrawn) by any Odd Lot Owner (as defined in the Offer to
Purchase) who:
(1) tenders all Shares beneficially owned by such Odd Lot Owner
(partial tenders and conditional tenders will not qualify for this
preference); and
(2) completes the section entitled "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery;
and
(b) then, after purchase of all the foregoing Shares, all other Shares
properly and unconditionally tendered, and all other Shares properly and
conditionally tendered for which the condition can be satisfied on the
basis of the number of Shares tendered and the conditions thereto, in each
case before the Expiration Date (and not withdrawn), on a pro rata basis,
if necessary (with adjustments to avoid purchases of fractional Shares);
and
(c) then, if all the foregoing Shares are less than the number of
Shares the Company will accept for payment and no tenders have been
accepted on a pro rata basis, such additional number of Shares properly and
conditionally tendered before the Expiration Date (and not withdrawn) as to
which the condition was not satisfied as are necessary to reach the number
of Shares the Company will accept for payment. If such conditional tenders
are accepted, the Company will select conditional tenders by lot only from
shareholders who tender all Shares owned by them and will limit its
purchase in each case to the designated minimum number of Shares to be
purchased.
Notwithstanding the foregoing, the Company reserves the right not to accept
Shares tendered by Odd Lot Owners on a preferential basis (and instead to accept
such Shares on a pro rata basis with Shares tendered by other owners) if the
Company, in its sole discretion, determines that accepting such Shares on a
preferential basis would cause the minimum beneficial owners condition not to be
satisfied.
You may condition your tender on the Company purchasing a minimum number of
your tendered Shares. In such case, if as a result of the number of Shares
tendered, the Company would purchase less than the minimum number of your Shares
specified, then the Company will not purchase any of your Shares, except as
provided in (c) above.
The Offer is not being made to, nor will the Company accept tenders from,
owners of Shares in any jurisdiction in which the Offer or its acceptance would
not comply with the securities or Blue Sky law of such jurisdiction. The Company
is not aware of any jurisdiction in which the making of the Offer or the tender
of Shares would not be in compliance with the laws of such jurisdiction in which
it is asserted that the Offer cannot lawfully be made. So long as the Company
makes a good faith effort to comply with any state law deemed applicable to the
Offer, the Company believes that the exclusion of holders residing in such
jurisdiction is permitted under Rule 13e-4(f)(9) promulgated under the Exchange
Act. In any jurisdiction in which the securities or Blue Sky laws require the
Offer to be made by a licensed broker or dealer, the Offer is being made on the
Company's behalf by the Dealer Manager or one or more registered brokers or
dealers licensed under the law of such jurisdiction.
2
<PAGE> 3
TRAK AUTO CORPORATION
INSTRUCTION FORM WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH 1,500,000 SHARES OF ITS COMMON STOCK
AT A PURCHASE PRICE OF $17.50 PER SHARE
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated December 21, 1994, and the related Letter of
Transmittal (which together constitute the "Offer") in connection with the offer
by Trak Auto Corporation, a Delaware corporation (the "Company"), to purchase
1,500,000 shares of its Common Stock, par value $0.01 per share (the "Shares"),
at a price, net to the seller in cash, of $17.50 per Share, upon the terms and
subject to the conditions of the Offer.
The undersigned understands that shares properly tendered and not withdrawn
will be purchased at the Purchase Price of $17.50 per Share, net to the seller
in cash, upon the terms and subject to the conditions of the Offer, including
the proration terms, the minimum Shares condition and the minimum beneficial
owners condition described in the Offer to Purchase. The Company will return all
other Shares, including Shares not purchased because of proration or conditional
tenders. See Section 1 of the Offer to Purchase.
The undersigned hereby instruct(s) you to tender to the Company the number
of Shares indicated below, or if no number is indicated, all Shares you hold for
the account of the undersigned, pursuant to the terms and subject to the
conditions of the Offer. The Company will return Shares not purchased because of
proration.
AGGREGATE NUMBER OF SHARES TO BE TENDERED
BY YOU FOR THE ACCOUNT OF THE UNDERSIGNED; *
______________________ SHARES
* Unless otherwise indicated, all of the Shares held for the account of the
undersigned will be tendered.
3
<PAGE> 4
ODD LOTS
/ / By checking this box, the undersigned represents that the undersigned owned
beneficially as of the close of business on December 20, 1994 an aggregate
of fewer than 100 Shares and is instructing the holder to tender all such
Shares.
SHARES TENDERED PURSUANT TO THE FOREGOING
PROCEDURE CANNOT BE CONDITIONALLY TENDERED
CONDITIONAL TENDER
SEE INSTRUCTION 8 TO THE LETTER OF TRANSMITTAL
/ / Check here if tender of Shares is conditioned on the Company purchasing
all or a minimum number of the tendered Shares, and complete the
following:
Minimum number of Shares to be sold: ____________
SIGNATURE BOX
Signature(s)
-------------------------------------------------------------------
Dated
--------------------------------------------------------------------------
Name(s) and Address(es)
--------------------------------------------------------
- -------------------------------------------------------------------------------
(PLEASE PRINT)
Area Code and Telephone Number
-------------------------------------------------
Taxpayer Identification or Social Security Number
-------------------------------
4
<PAGE> 1
[TRAK AUTO LETTERHEAD]
December 21, 1994
TO OUR SHAREHOLDERS:
The Board of Directors of Trak Auto Corporation has approved an offer to
shareholders to purchase 1,500,000 shares of the Company's Common Stock,
approximately 25% of the currently outstanding shares. This offer gives
shareholders an opportunity to sell some or all of their shares. Shareholders
retaining their shares will own a proportionately larger position in the Company
after the repurchase has been completed. The Company will use available cash on
hand and proceeds from marketable securities to purchase the shares.
The Board of Directors of the Company has determined to make this offer
because it believes that the offer is an attractive investment of the Company's
cash and because the Company will realize tax deferrals if the offer is
completed. The Company believes that the current market price of the shares does
not adequately reflect the value of the Company's business, assets and
prospects, and that the purchase of the shares at this time is an attractive
investment that will benefit the Company and its continuing shareholders. In
addition, as a result of the fact that Dart Group Corporation (which owned
approximately 64.8% of the issued and outstanding shares of the Company as of
December 20, 1994) will not tender any shares in response to the offer, Dart
will own in excess of 80% of the issued and outstanding shares following
completion of the offer, allowing Dart and the Company to be consolidated for
federal income tax purposes. Consolidation will eliminate one level of federal
income taxation and thereby result in current tax savings to the Company, Dart
and their respective shareholders. An effect of the consolidation will be that
net operating losses of Dart will offset income of the Company. The Company will
reimburse Dart for the use of these net operating losses on a deferred basis.
The offer gives stockholders who are considering the sale of all or a portion of
their shares an opportunity to sell such shares for a higher price than that
available in the open market immediately prior to the announcement of the offer,
and without the usual transaction costs associated with market sales.
The offer is conditioned on at least 1,500,000 shares being tendered and on
there being at least 500 beneficial owners of shares after completion of the
offer. If either of these conditions cannot be satisfied, the Company will not
purchase any of the shares.
The price paid for shares in the offer will be $17.50 per share. The
Company will pay this price for all shares properly tendered, subject to
possible proration, the minimum shares condition and the minimum beneficial
owners condition.
Shareholders who own an aggregate of fewer than 100 shares should note that
the offer may, under certain circumstances, represent an opportunity for them to
sell all of their shares without having to pay brokerage commissions or odd lot
discounts.
Neither the Company nor your Board of Directors is making any
recommendation to shareholders as to whether to tender or refrain from tendering
shares. As explained in more detail in the enclosed Offer to Purchase, Dart
(officers and directors of which are directors of the Company) has advised the
Company that it does not intend to tender any shares. The Company has been
advised that no director or executive officer of the Company or Dart intends to
tender any shares pursuant to the offer.
Unless extended by the Company, the offer will expire at 12:00 Midnight,
New York City time, on Monday, January 23, 1995.
The Offer is explained in detail in the enclosed Offer to Purchase and
Letter of Transmittal. We encourage you to read these materials carefully before
making any decision with respect to the offer. Should you have any questions
regarding the offer or need assistance in tendering your shares, please don't
hesitate to call D.F. King & Co., Inc., the Information Agent for the offer,
collect at (212) 269-5550 or toll-free at (800) 207-3158.
HERBERT H. HAFT
Chairman and Chief Executive
Officer
<PAGE> 1
TRAK AUTO CORPORATION ANNOUNCES SELF TENDER
FOR APPROXIMATELY 24% OF ITS COMMON STOCK
Trak Auto Corporation (Nasdaq: TRKA) today announced that it will commence
an Offer to buy from its shareholders approximately 24% of the Company's
outstanding common stock, or 1,500,000 shares, at a price $17.50 per Share. The
Company will use excess cash on hand to purchase the shares. Trak Auto shares
closed at $15 1/2 per share on December 19, 1994, the last trading day prior to
this announcement.
The Offer is conditioned on a minimum of 1,500,000 shares being tendered
and on there being at least 500 beneficial owners of shares after completion of
the Offer. The Offer will also be subject to certain other conditions enumerated
in the Offer to Purchase.
Neither the Company nor its Board of Directors is making any recommendation
to shareholders as to whether to tender or refrain from tendering shares.
The Company has determined to make this offer because it believes that the
offer is an attractive investment of the Company's cash and because the Company
will realize current tax savings if the offer is completed. The Company believes
that the current market price of the shares does not adequately reflect the
value of the Company's business, assets and prospects, and that the purchase of
the shares at this time is an attractive investment that will benefit the
Company and its continuing shareholders. In addition, as a result of the fact
that Dart Group Corporation (which currently owns approximately 65% of the
shares of the Company) will not tender any shares in response to the Offer, Dart
will own in excess of 80% of the issued and outstanding shares following
completion of the Offer, allowing Dart and the Company to be consolidated for
federal income tax purposes. Consolidation will eliminate one level of federal
income taxation and thereby result in current tax savings to the Company, Dart
and their respective shareholders. An effect of the consolidation will be that
net operating losses of Dart will offset income of the Company. The Company will
reimburse Dart for the use of these net operating losses on a deferred basis.
The Offer gives stockholders who are considering the sale of all or a portion of
their shares an opportunity to sell such shares for a higher price than that
available in the open market immediately prior to the announcement of the Offer,
without the usual transaction costs associated with market sales.
The Company's executive officers and board members have elected not to sell
any shares pursuant to the Offer.
Shareholders will be receiving copies of the Offer to Purchase and
associated forms and instructions shortly.
Wasserstein Perella & Co., Inc. will be the Dealer Manager and The Bank of
New York will be the Depositary for the Offer. D.F. King & Co., Inc. will serve
as the Information Agent.
<PAGE> 1
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase, dated
December 21, 1994, and the related Letter of Transmittal. Capitalized terms not
defined in the notice have the respective meanings ascribed to such terms in the
Offer to Purchase. The Company is not aware of any jurisdiction where the making
of the Offer would not be in compliance with the laws of such jurisdiction. If
the Company becomes aware of any jurisdiction where the making of the Offer
would not be in compliance with such laws, the Company will make a good faith
effort to comply with such laws or seek to have such laws declared inapplicable
to the Offer. If after such good faith effort the Company cannot comply with any
such applicable laws, the Offer will not be made to, nor will tenders be
accepted from or on behalf of, owners of shares in any such jurisdictions. In
those jurisdictions whose laws require that the Offer be made by a licensed
broker or dealer, the Offer shall be deemed to be made on behalf of the Company
by Wasserstein Perella & Co., Inc. as Dealer Manager, or one or more registered
brokers or dealers licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
by
TRAK AUTO CORPORATION
1,500,000 Shares of its Common Stock
at a Purchase Price of $17.50 per share
Trak Auto Corporation, a Delaware corporation (the "Company"), invites its
shareholders to tender shares of its common stock, par value $.01 per share (the
"Shares"), to the Company at a price, net to the seller in cash, of $17.50 per
Share, upon the terms and subject to the conditions set forth in the Offer to
Purchase dated December 21, 1994 (the "Offer to Purchase"), and in the related
Letter of Transmittal (which together constitute the "Offer"). The information
contained in the Offer to Purchase and the Letter of Transmittal is incorporated
by reference herein in its entirety.
THE OFFER IS CONDITIONED UPON A MINIMUM OF 1,500,000 SHARES BEING TENDERED,
ON THERE BEING AT LEAST 500 BENEFICIAL OWNERS OF SHARES FOLLOWING COMPLETION OF
THE OFFER, AND ON CERTAIN OTHER CONDITIONS SET FORTH IN THE OFFER.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, JANUARY 23, 1995 UNLESS THE OFFER IS EXTENDED.
Neither the Company nor the Board of Directors of the Company is making any
recommendation to shareholders as to whether to tender or refrain from tendering
shares. Each shareholder must make his own decision whether to tender Shares. As
explained in more detail in the Offer to Purchase, Dart Group Corporation
("Dart"), the beneficial owner of approximately 3,962,245 Shares (64.8% of the
issued and outstanding shares as of December 20, 1994), officers and directors
of which are directors of the Company, has advised the Company that it does not
intend to tender any Shares in response to the Offer. The Company has been
advised that no other director or executive officer of the Company intends to
tender any Shares pursuant to the Offer.
Shares properly tendered and not withdrawn will be purchased at the
Purchase Price of $17.50 per Share, net to the Seller in cash, upon the terms
and subject to the conditions of the Offer including the proration terms, the
minimum Shares condition and the minimum beneficial owners condition of the
Offer. For purposes of the Offer, the Company will be deemed to have accepted
for payment (and thereby purchased), subject to proration, Shares that are
tendered and not withdrawn when, as and if it gives oral or written notice to
the Depositary of its acceptance of such Shares for payment pursuant to the
Offer. Payment for Shares
<PAGE> 2
accepted for payment pursuant to the Offer will be made by depositing the
aggregate Purchase Price for such Shares with the Depositary, which will act as
agent for the tendering shareholders for the purpose of receiving payment from
the Company and transmitting such payments to tendering shareholders.
Upon the terms and subject to the conditions of the Offer, in the event
that prior to the Expiration Date more than 1,500,000 Shares (or such greater
number of Shares as the Company elects to purchase) are properly tendered and
not withdrawn, the Company will accept Shares for purchase in the following
order of priority:
(a) first, all Shares properly tendered prior to the Expiration Date
(and not withdrawn) by any Odd Lot Owner who:
(1) tenders all Shares beneficially owned by such Odd Lot Owner
(partial tenders and conditional tenders will not qualify for this
preference); and
(2) completes the section entitled "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery;
and
(b) then, after purchase of all the foregoing Shares, all other Shares
properly and unconditionally tendered, and all other Shares properly and
conditionally tendered for which the condition can be satisfied on the
basis of the number of Shares tendered and the conditions thereto, in each
case before the Expiration Date (and not withdrawn), on a pro rata basis,
if necessary (with adjustments to avoid purchases of fractional Shares);
and
(c) then, if all of the foregoing Shares are less than the number of
Shares the Company will accept for payment and no tenders have been
accepted on a pro rata basis, such additional number of Shares properly and
conditionally tendered before the Expiration Date (and not withdrawn) as to
which the condition was not satisfied as are necessary to reach the number
of Shares the Company will accept for payment. If such conditional tenders
are accepted, the Company will select conditional tenders by lot only from
shareholders who tender all Shares owned by them and will limit its
purchase in each case to the designated minimum number of Shares to be
purchased.
Notwithstanding the foregoing, the Company reserves the right not to accept
Shares tendered by Odd Lot Owners on a preferential basis (and instead to accept
such Shares on a pro rata basis with Shares tendered by other owners) if the
Company, in its sole discretion, determines that accepting such Shares on a
preferential basis would cause the minimum beneficial owners condition not to be
satisfied.
Shareholders may designate the order in which their Shares shall be
purchased in the event less than all of the Shares tendered are purchased as a
result of proration.
Shareholders may condition their tender on the Company purchasing all or a
minimum percentage of their tendered Shares. In such case, if as a result of the
number of Shares tendered, the Company would purchase less than such specified
minimum number of Shares, such tender will automatically be regarded as
withdrawn, except as provided in paragraph (c), above, and all Shares tendered
by such shareholder will be returned as promptly as practicable after the
Expiration Date at the Company's expense.
The Board of Directors of the Company has determined to make this Offer
because it believes that the Offer is an attractive investment of the Company's
cash and because the Company will realize tax deferrals if the Offer is
completed. The Company believes that the current market price of the Shares does
not adequately reflect the value of the Company's business, assets and
prospects, and that the purchase of the Shares at this time is an attractive
investment that will benefit the Company and its continuing shareholders. In
addition, as a result of the fact that Dart (which owned approximately 64.8% of
the issued and outstanding Shares as of December 20, 1994) will not tender any
Shares in response to the Offer, Dart will own in excess of 80% of the issued
and outstanding shares following completion of the Offer, allowing Dart and the
Company to be consolidated for federal income tax purposes. Consolidation will
eliminate one level of federal income taxation and thereby result in current tax
savings to the Company, Dart and their respective shareholders. An effect of the
consolidation will be that net operating losses of Dart will offset income of
the Company. The Company will reimburse Dart for the use of these net operating
losses on a deferred basis. The Offer gives stockholders who are considering the
sale of all or a portion of their Shares an opportunity to sell such Shares for
a higher price than that available in the open market immediately prior to the
announcement of the Offer, without the usual transaction costs associated with
market sales.
2
<PAGE> 3
The Company reserves the right, in its sole discretion, at any time or from
time to time, to extend the period of time during which the Offer is open by
giving oral or written notice of such extension to the Depositary, followed by a
public announcement thereof no later than 9:00 a.m., New York City time on the
next following business day after the previously scheduled Expiration Date.
Subject to certain conditions, the Company also expressly reserves the right to
terminate the Offer and not accept for payment any Shares not theretofore
accepted for payment.
Except as otherwise provided in the Offer, tenders of Shares pursuant to
the Offer will be irrevocable. Shares tendered pursuant to the Offer may be
withdrawn at any time before the Expiration Date and, unless theretofore
accepted for payment by the Company, may be withdrawn after 12:00 Midnight, New
York City time, February 17, 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. Any such notice of withdrawal must specify the name of
the person who tendered the Shares to be withdrawn, the number of Shares to be
withdrawn and the name of the registered holder if different from that of the
person who tendered such Shares. If the certificates have been delivered or
otherwise identified to the Depositary, then, prior to the release of such
certificates, the tendering shareholder must also submit the serial numbers
shown on the particular certificates evidencing the Shares and the signature on
the notice of withdrawal must be guaranteed by an Eligible Institution, except
in the case of Shares tendered by an Eligible Institution. If Shares have been
tendered pursuant to the procedure for book-entry transfer set forth in the
Offer to Purchase, the notice of withdrawal must specify the name and number of
the account at the applicable Book-Entry Transfer Facility to be credited with
the withdrawn Shares and otherwise comply with the procedures of such facility.
THE OFFER TO PURCHASE AND LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION THAT SHOULD BE READ BEFORE SHAREHOLDERS DECIDE WHETHER TO ACCEPT OR
REJECT THE OFFER. THESE MATERIALS ARE BEING MAILED TO ALL RECORD OWNERS OF
SHARES AND ARE BEING FURNISHED TO BROKERS, BANKS AND SIMILAR PERSONS WHOSE
NAMES, OR THE NAMES OF WHOSE NOMINEES, APPEAR ON THE COMPANY'S SHAREHOLDER LIST
AS OF DECEMBER 20, 1994 (OR, IF APPLICABLE, WHO ARE LISTED AS PARTICIPANTS IN A
CLEARING AGENCY'S SECURITY POSITION LISTING) FOR TRANSMITTAL TO BENEFICIAL
OWNERS OF SHARES.
The information required to be disclosed by Rule 13e-4(d)(1) of the
Securities Exchange Act of 1934, as amended, is contained in the Offer to
Purchase and is incorporated in this notice by reference.
Please contact the Information Agent or the Dealer Manager at the telephone
numbers and addresses set forth below for copies of the Offer to Purchase, the
related Letter of Transmittal and other tender offer materials. They will
furnish copies promptly at the Company's expense.
The Information Agent is:
D.F. KING & CO., INC.
77 Water Street
New York, NY 10005
(212) 269-5550 (Call Collect) or
(800) 207-3158 (TOLL FREE)
The Dealer Manager for the Offer is:
WASSERSTEIN PERELLA & CO., INC.
31 West 52nd Street
New York, New York 10019
(212) 969-2700
(Call Collect)
December 21, 1994
3
