<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 10, 1995
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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)
------------------------
AMERICAN PRESIDENT COMPANIES, LTD.
(Name of Issuer and Person Filing Statement)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class of Securities)
029103-10-8
(CUSIP Number of Class of Securities)
MARYELLEN B. CATTANI
Executive Vice President,
General Counsel and Secretary
AMERICAN PRESIDENT COMPANIES, LTD.
1111 BROADWAY
OAKLAND, CALIFORNIA 94607
(510) 272-8000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications
on Behalf of the Person Filing Statement)
COPY TO:
STANTON D. WONG, Esq.
Pillsbury Madison & Sutro
P.O. Box 7880
San Francisco, CA 94120
(415) 983-1000
AUGUST 10, 1995
(Date Tender Offer First Published,
Sent or Given to Security Holders)
<TABLE>
<S> <C>
------------------------------------------------------
------------------------------------------------------
Transaction Valuation(*) Amount of Filing Fee
------------------------------------------------------
$120,000,000 $24,000.00
------------------------------------------------------
------------------------------------------------------
</TABLE>
(*) Determined pursuant to Rule 0-11(b)(1). Assumes the purchase of 4,000,000
shares at $30 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.
Amount Previously Paid: Not applicable.
Form or Registration No.: Not applicable.
Filing Party: Not applicable.
Date Filed: Not applicable.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
This is Page One of
---- Pages
The Exhibit Index is located on Sequentially Numbered Page
----
<PAGE>
ITEM 1. SECURITY AND ISSUER.
(a) The name of the issuer is American President Companies, Ltd., a Delaware
corporation (the "Company"), that has its principal executive offices at 1111
Broadway, Oakland, California 94607.
(b) This schedule relates to the offer by the Company to purchase up to
4,000,000 outstanding shares of Common Stock, par value $.01 per share (the
"Shares"), at prices not greater than $30 nor less than $27 per share, net to
the seller in cash, all upon the terms and subject to the conditions set forth
in the Offer to Purchase dated August 10, 1995 (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 set forth on page 1 and under
"Number of Shares; Proration" in Section 1 and "Purpose of the Offer; Certain
Effects of the Offer" in Section 9 of the Offer to Purchase is incorporated
herein by reference.
(c) The information set forth under "Price Range of Shares; Dividends" in
Section 8 of the Offer to Purchase is incorporated herein by reference.
(d) Not applicable.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth under "Source and Amount of Funds" in Section
11 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 on page 1 and under "Purpose of the Offer;
Certain Effects of the Offer" in Section 9 and "Certain Information Concerning
the Company" in Section 10 of the Offer to Purchase is incorporated herein by
reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth under "Transactions and Agreements Concerning the
Shares" in Section 12 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 under "Transactions and Agreements Concerning the
Shares" in Section 12 of the Offer to Purchase is incorporated herein by
reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth under "Fees and Expenses" in Section 15 of the
Offer to Purchase is incorporated herein by reference.
ITEM 7. FINANCIAL INFORMATION.
(a) and (b) The information set forth under "Certain Information Concerning
the Company" in Section 10 of the Offer to Purchase is incorporated herein by
reference.
ITEM 8. ADDITIONAL INFORMATION.
(a) to (e) None or not applicable.
2
<PAGE>
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C>
(a)(1) Form of Offer to Purchase dated August 10, 1995.
(a)(2) Form of Letter of Transmittal dated August 10, 1995, together with
Guidelines for Certification of Taxpayer I.D. Number on Substitute Form
W-9.
(a)(3) Form of Notice dated August 10, 1995, to Participants in American
President Companies, Ltd. SMART Plan, together with Election Form.
(a)(4) Form of Letter to Stockholders from the Company, dated August 10, 1995.
(a)(5) Form of Notice of Guaranteed Delivery.
(a)(6) Form of Letter to Brokers, Dealers, Commercial Banks and Trust Companies
dated August 10, 1995.
(a)(7) Form of Letter to Clients dated August 10, 1995.
(a)(8) Form of Tombstone Advertisement.
(a)(9) Press Release dated August 8, 1995.
(a)(10) Form of Press Release dated August 10, 1995.
(b) None.
(c) None.
(d) None.
(e) Not applicable.
(f) None.
</TABLE>
3
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Dated: August 9, 1995
AMERICAN PRESIDENT COMPANIES, LTD.
By /s/ WILLIAM J. STUEBGEN
------------------------------------
William J. Stuebgen
Vice President and
Controller
4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NUMBER DESCRIPTION NUMBERED PAGE
--------- -------------------------------------------------------------------------------- -------------
<S> <C> <C>
(a)(1) Form of Offer to Purchase dated August 10, 1995.................................
(a)(2) Form of Letter of Transmittal dated August 10, 1995, together with Guidelines
for Certification of Taxpayer I.D. Number on Substitute Form W-9...............
(a)(3) Form of Notice dated August 10, 1995, to Participants in American President
Companies, Ltd. SMART Plan, together with Election Form........................
(a)(4) Form of Letter to Stockholders from the Company, dated August 10, 1995..........
(a)(5) Form of Notice of Guaranteed Delivery...........................................
(a)(6) Form of Letter to Brokers, Dealers, Commercial Banks and Trust Companies dated
August 10, 1995................................................................
(a)(7) Form of Letter to Clients dated August 10, 1995.................................
(a)(8) Form of Tombstone Advertisement.................................................
(a)(9) Press Release dated August 8, 1995..............................................
(a)(10) Form of Press Release dated August 10, 1995.....................................
(b) None............................................................................
(c) None............................................................................
(d) None............................................................................
(e) Not applicable..................................................................
(f) None............................................................................
</TABLE>
<PAGE>
AMERICAN PRESIDENT COMPANIES, LTD.
OFFER TO PURCHASE FOR CASH
4,000,000 SHARES OF ITS COMMON STOCK
AT A PURCHASE PRICE NOT GREATER THAN $30
NOR LESS THAN $27 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, SEPTEMBER 8, 1995, UNLESS THE OFFER IS EXTENDED.
American President Companies, Ltd., a Delaware corporation (the "Company"),
invites its stockholders to tender shares of its Common Stock, par value $.01
per share (the "Shares"), at prices not greater than $30 nor less than $27 per
Share, net to the seller in cash, specified by such stockholders, upon the terms
and subject to the conditions set forth herein and in the related Letter of
Transmittal (which together constitute the "Offer"). The Company will determine
a single per Share price (not greater than $30 nor less than $27 per Share) that
it will pay for the Shares validly tendered pursuant to the Offer and not
withdrawn (the "Purchase Price"), taking into account the number of Shares so
tendered and the prices specified by tendering stockholders. The Company will
select the Purchase Price that will enable it to purchase 4,000,000 Shares (or
such lesser number of Shares as are validly tendered at prices not greater than
$30 nor less than $27 per Share) pursuant to the Offer. The Company will
purchase all Shares validly tendered at prices at or below the Purchase Price
and not withdrawn, upon the terms and subject to the conditions of the Offer,
including the provisions thereof relating to proration and conditional tenders
described herein. Shares tendered at prices in excess of the Purchase Price and
Shares not purchased because of proration and conditional tenders will be
returned. Stockholders must complete the section of the Letter of Transmittal
relating to the price at which they are tendering Shares in order to validly
tender Shares.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of his or her 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, mail
or deliver it and any other required documents to the Depositary, and either
deliver the certificates for Shares to the Depositary along with the Letter of
Transmittal or deliver such Shares pursuant to the procedure for book-entry
transfer set forth in Section 3 hereof or (2) request his or her broker, dealer,
commercial bank, trust company or nominee to effect the transaction for him or
her. A stockholder whose Shares are registered in the name of a broker, dealer,
commercial bank, trust company or nominee must contact such broker, dealer,
commercial bank, trust company or nominee if he or she desires to tender such
Shares. Any stockholder who desires to tender Shares and whose certificates for
such Shares are not immediately available, or who cannot comply in a timely
manner with the procedure for book-entry transfer, should tender such Shares by
following the procedures for guaranteed delivery set forth in Section 3 hereof.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY
STOCKHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. EACH STOCKHOLDER MUST
MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY
SHARES TO TENDER AND AT WHAT PRICE. THE COMPANY HAS BEEN ADVISED NO DIRECTOR OR
EXECUTIVE OFFICER INTENDS TO TENDER SHARES PURSUANT TO THE OFFER.
The Shares are listed and principally traded on the New York Stock Exchange
("NYSE"). On August 9, 1995, the last trading day prior to the Company's
announcement and commencement of the Offer, the last reported sale price of the
Shares on the NYSE Composite Tape was $28.00 per Share. Stockholders are urged
to obtain current market quotations for the Shares.
Questions or requests for assistance or for additional copies of this Offer to
Purchase, the Letter of Transmittal or other tender offer materials may be
directed to the Information Agent or the Dealer Manager at their respective
addresses and telephone numbers set forth on the back cover of this Offer to
Purchase.
THE DEALER MANAGER FOR THE OFFER IS:
J.P. MORGAN SECURITIES INC.
August 10, 1995
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY AS TO WHETHER STOCKHOLDERS SHOULD TENDER SHARES PURSUANT TO THE OFFER.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN
OR IN THE LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH RECOMMENDATION AND SUCH
INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
--------- -----
<C> <S> <C>
1. Number of Shares; Proration....................................................................... 2
2. Tenders by Holders of Fewer Than 100 Shares....................................................... 3
3. Procedure for Tendering Shares.................................................................... 3
4. Withdrawal Rights................................................................................. 5
5. Acceptance for Payment of Shares and Payment of Purchase Price.................................... 6
6. Conditional Tender of Shares...................................................................... 7
7. Certain Conditions of the Offer................................................................... 7
8. Price Range of Shares; Dividends.................................................................. 9
9. Purpose of the Offer; Certain Effects of the Offer................................................ 10
10. Certain Information Concerning the Company........................................................ 11
11. Source and Amount of Funds........................................................................ 14
12. Transactions and Agreements Concerning the Shares................................................. 14
13. Certain Federal Income Tax Consequences........................................................... 15
14. Extension of Tender Period; Termination; Amendments............................................... 18
15. Fees and Expenses................................................................................. 19
16. Miscellaneous..................................................................................... 19
</TABLE>
<PAGE>
To the Holders of Common Stock of
American President Companies, Ltd.:
American President Companies, Ltd., a Delaware corporation (the "Company"),
invites its stockholders to tender shares of its Common Stock, par value $.01
per share (the "Shares"), at prices not greater than $30 nor less than $27 per
Share, net to the seller in cash, specified by such stockholders, upon the terms
and subject to the conditions set forth herein and in the related Letter of
Transmittal (which together constitute the "Offer"). The Company will determine
a single per Share price (not greater than $30 nor less than $27 per Share) that
it will pay for the Shares validly tendered pursuant to the Offer and not
withdrawn (the "Purchase Price"), taking into account the number of Shares so
tendered and the prices specified by tendering stockholders. The Company will
select the Purchase Price that will enable it to purchase 4,000,000 Shares (or
such lesser number of Shares as is validly tendered at prices not greater than
$30 nor less than $27 per Share) pursuant to the Offer. The Company will
purchase all Shares validly tendered at prices at or below the Purchase Price
and not withdrawn on or prior to the Expiration Date (as defined in Section 1),
upon the terms and subject to the conditions of the Offer, including the
provisions relating to proration and conditional tenders described below. The
Purchase Price will be paid in cash, net to the seller, with respect to all
Shares purchased. Shares tendered at prices in excess of the Purchase Price and
Shares not purchased because of proration or conditional tenders will be
returned.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 7.
Tendering stockholders will not be obligated to pay brokerage commissions,
solicitation fees or, subject to the Instructions to the Letter of Transmittal,
stock transfer taxes on the purchase of Shares by the Company. The Company will
pay all reasonable charges and expenses of J.P. Morgan Securities Inc. (the
"Dealer Manager"), The First National Bank of Boston (the "Depositary") and
Morrow & Co., Inc. (the "Information Agent") incurred in connection with the
Offer. See Section 15. HOWEVER, ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO
FAILS TO COMPLETE AND SIGN THE SUBSTITUTE FORM W-9 THAT IS INCLUDED IN THE
LETTER OF TRANSMITTAL MAY BE SUBJECT TO A REQUIRED FEDERAL INCOME TAX BACKUP
WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAYABLE TO SUCH STOCKHOLDER OR OTHER
PAYEE PURSUANT TO THE OFFER. SEE SECTIONS 3 AND 13.
The American President Companies, Ltd. SMART Plan (the "SMART Plan") holds
Shares in accounts for participants in the plan. Under the terms of the SMART
Plan, a participant may instruct the trustee for the plan to tender Shares
allocated to the participant's account as of August 8, 1995. See Section 3.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY STOCKHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. EACH STOCKHOLDER MUST
MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY
SHARES TO TENDER AND AT WHAT PRICE. THE COMPANY HAS BEEN ADVISED THAT NO
DIRECTOR OR EXECUTIVE OFFICER INTENDS TO TENDER SHARES PURSUANT TO THE OFFER.
SEE SECTION 9.
As of the close of business on August 8, 1995, the Company had issued and
outstanding 29,466,186 Shares (which number reflects the repurchase on such date
of 2,000,000 Shares, as described in Section 12) and had reserved for issuance
upon exercise of outstanding stock options 4,842,555 Shares. The 4,000,000
Shares that the Company is offering to purchase represent approximately 13.6% of
the Shares then outstanding, or approximately 11.7% on a fully diluted basis
(assuming the exercise of all outstanding stock options).
A tender of Shares pursuant to the Offer will include a tender of the
associated preferred stock purchase rights (the "Rights"). No separate
consideration will be paid for such Rights. See Section 8.
The Shares are listed and principally traded on the New York Stock Exchange
("NYSE"). The Shares are also listed and traded on the Pacific Stock Exchange
("PSE"). The Shares trade under the symbol "APS." See Section 8. STOCKHOLDERS
ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
1
<PAGE>
1. NUMBER OF SHARES; PRORATION.
Upon the terms and subject to the conditions described herein and in the
Letter of Transmittal, the Company will purchase up to 4,000,000 Shares that are
validly tendered on or prior to the Expiration Date (and not properly withdrawn
in accordance with Section 4) at a price (determined in the manner set forth
below) not greater than $30 nor less than $27 per Share. The later of 12:00
midnight, New York City time, on Friday, September 8, 1995, or the latest time
and date to which the Offer is extended, is referred to herein as the
"Expiration Date." If the Offer is oversubscribed as described below, only
Shares tendered at or below the Purchase Price on or prior to the Expiration
Date will be eligible for proration.
The Company will determine the Purchase Price taking into account the number
of Shares so tendered and the prices specified by tendering stockholders. The
Company will select the Purchase Price that will enable it to purchase 4,000,000
Shares (or such lesser number of Shares as is validly tendered and not withdrawn
at prices not greater than $30 nor less than $27 per Share) pursuant to the
Offer. The Company reserves the right to purchase more than 4,000,000 Shares
pursuant to the Offer, although the Company has no present intention to do so.
The Offer is not conditioned on any minimum number of Shares being tendered.
In accordance with Instruction 5 of the Letter of Transmittal, each
stockholder who wishes to tender Shares must specify the price (not greater than
$30 nor less than $27 per Share) at which such stockholder is willing to have
the Company purchase such Shares. As promptly as practicable following the
Expiration Date, the Company will determine the Purchase Price (not greater than
$30 nor less than $27 per Share) that it will pay for Shares validly tendered
pursuant to the Offer, taking into account the number of Shares so tendered and
the prices specified by tendering stockholders. All Shares purchased pursuant to
the Offer will be purchased at the Purchase Price. All Shares not purchased
pursuant to the Offer, including Shares tendered at prices greater than the
Purchase Price and Shares not purchased because of proration or conditional
tender, will be returned to the tendering stockholders at the Company's expense
as promptly as practicable following the Expiration Date.
Upon the terms and subject to the conditions of the Offer, if 4,000,000 or
fewer Shares have been validly tendered at or below the Purchase Price and not
withdrawn on or prior to the Expiration Date, the Company will purchase all such
Shares. Upon the terms and subject to the conditions of the Offer, if more than
4,000,000 Shares have been validly tendered at or below the Purchase Price and
not withdrawn on or prior to the Expiration Date, the Company will purchase
Shares in the following order of priority:
(a) all Shares validly tendered at or below the Purchase Price and not
withdrawn on or prior to the Expiration Date by any stockholder who owned
beneficially an aggregate of fewer than 100 Shares (including any Shares
held in the SMART Plan) as of the close of business on August 8, 1995 and
who validly tenders all of such Shares (partial and conditional tenders will
not qualify for this preference) and completes the box captioned "Odd Lots"
on the Letter of Transmittal (or on the Election Form for SMART Plan
participants) and, if applicable, the Notice of Guaranteed Delivery; and
(b) after purchase of all of the foregoing Shares, subject to the
conditional tender provisions described in Section 6, all other Shares
validly tendered at or below the Purchase Price and not withdrawn on or
prior to the Expiration Date on a pro rata basis, if necessary (with
appropriate adjustments to avoid purchases of fractional Shares).
If proration of tendered Shares is required, because of the difficulty in
determining the number of Shares validly tendered (including Shares tendered by
the guaranteed delivery procedure described in Section 3) and as a result of the
"odd lot" procedure described in Section 2 and conditional tender procedure
described in Section 6, the Company does not expect that it would be able to
announce the final proration factor or to commence payment for any Shares
purchased pursuant to the Offer until approximately seven NYSE trading days
after the Expiration Date. Preliminary results of proration will be announced by
press release as promptly as practicable after the Expiration Date. Holders of
Shares may obtain such preliminary information from the Dealer Manager or the
Information Agent and may also be able to obtain such information from their
brokers.
2
<PAGE>
The Company expressly 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.
See Section 14. There can be no assurance, however, that the Company will
exercise its right to extend the Offer.
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.
Copies of this Offer to Purchase and the Letter of Transmittal are being
mailed to record holders of Shares and will be furnished to brokers, banks and
similar persons whose names, or the names of whose nominees, appear on the
Company's stockholder list or, if applicable, who are listed as participants in
a clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
Participants in the SMART Plan may instruct the trustee for such plan to
tender Shares held in their accounts. However, they may not use the Letter of
Transmittal to effect the tender of Shares held for their benefit in the plan
but must use the separate Election Form furnished to them. Shares as to which no
direction is given will not be tendered. See Section 3.
2. TENDERS BY HOLDERS OF FEWER THAN 100 SHARES.
All Shares validly tendered at or below the Purchase Price and not withdrawn
on or prior to the Expiration Date by or on behalf of persons who each owned
beneficially an aggregate (including Shares held in the SMART Plan) of fewer
than 100 Shares as of the close of business on August 8, 1995, will be accepted
before proration, if any, of the purchase of other tendered Shares. See Section
1. Partial or conditional tenders will not qualify for this preference, and it
is not available to beneficial holders of 100 or more Shares, even if such
holders have separate stock certificates for fewer than 100 Shares. By accepting
the Offer, a stockholder owning beneficially fewer than 100 Shares will avoid
the payment of brokerage commissions and the applicable odd lot discount payable
in a sale of such Shares in a transaction effected on a securities exchange.
As of August 8, 1995, there were approximately 3,750 holders of record of
Shares. Approximately 1,800 of these holders of record held individually fewer
than 100 Shares and held in the aggregate approximately 60,500 Shares. Because
of the large number of Shares held in the names of brokers and nominees, the
Company is unable to estimate the number of beneficial owners of fewer than 100
Shares or the aggregate number of Shares they own. Any stockholder wishing to
tender all of his or her Shares pursuant to this Section should complete the box
captioned "Odd Lots" on the Letter of Transmittal (or on the Election Form for
SMART Plan participants) and, if applicable, on the Notice of Guaranteed
Delivery.
3. PROCEDURE FOR TENDERING SHARES.
To tender Shares validly pursuant to the Offer, either (a) a properly
completed and duly executed Letter of Transmittal or facsimile thereof, together
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 (i)
certificates for the Shares to be tendered must be received by the Depositary at
one of such addresses or (ii) such Shares must be delivered pursuant to the
procedures for book-entry transfer described below (and a confirmation of such
delivery received by the Depositary), in each case on or prior to the Expiration
Date, or (b) the tendering holder of Shares must comply with the guaranteed
delivery procedure described below.
IN ACCORDANCE WITH INSTRUCTION 5 OF THE LETTER OF TRANSMITTAL, IN ORDER TO
TENDER SHARES PURSUANT TO THE OFFER, A STOCKHOLDER MUST INDICATE IN THE SECTION
CAPTIONED "PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED" ON
THE LETTER OF TRANSMITTAL THE PRICE (IN MULTIPLES OF $.125) AT WHICH SUCH SHARES
ARE BEING TENDERED. Stockholders wishing to tender Shares at more than one price
must complete separate Letters of Transmittal for each price at which such
Shares are being tendered. The same Shares cannot be tendered at more than one
price. FOR A TENDER OF SHARES TO BE VALID, A PRICE BOX, BUT ONLY ONE PRICE BOX,
ON EACH LETTER OF TRANSMITTAL MUST BE CHECKED.
3
<PAGE>
The Depositary will establish an account with respect to the Shares at The
Depository Trust Company, Midwest Securities Trust Company and Philadelphia
Depository Trust Company (collectively referred to as the "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 by
causing such Book-Entry Transfer Facility to transfer such Shares into the
Depositary's account in accordance with the procedures of such Book-Entry
Transfer Facility. Although delivery of Shares may be effected through
book-entry transfer, a properly completed and duly executed Letter of
Transmittal or facsimile thereof, together with any required signature
guarantees and any other required documents, must, in any case, be received by
the Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase on or prior to the Expiration Date, or the tendering holder of
Shares must comply with the guaranteed delivery procedure described below.
Delivery of the Letter of Transmittal and any other required documents to a
Book-Entry Transfer Facility does not constitute delivery to the Depositary.
Except as otherwise provided below, all signatures on a Letter of
Transmittal must be guaranteed by a firm that is a bank, broker, dealer, credit
union, savings association or other entity which is a member in good standing of
the Securities Transfer Agent's Medallion Program (each of the foregoing being
referred to as an "Eligible Institution"). Signatures on a Letter of Transmittal
need not be guaranteed if (a) the Letter of Transmittal is signed by the
registered holder of the Shares tendered therewith and such holder has not
completed the box entitled "Special Payment Instructions" or the box entitled
"Special Delivery Instructions" on the Letter of Transmittal or (b) such Shares
are tendered for the account of an Eligible Institution. See Instructions 1 and
6 of the Letter of Transmittal.
If a stockholder desires to tender Shares pursuant to the Offer and cannot
deliver certificates for such Shares and all other required documents to the
Depositary on or prior to the Expiration Date or the procedure for book-entry
transfer cannot be complied with in a timely manner, 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 (with any
required signature guarantees) is received by the Depositary as provided
below on or prior to the Expiration Date; and
(iii) the certificates for such Shares (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 facsimile thereof) and any other
documents required by the Letter of Transmittal, are received by the
Depositary no later than 5:00 p.m., New York City time, on the fifth NYSE
trading day after the date of execution of the Notice of Guaranteed
Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile transmission or mail to the Depositary and must include a guarantee by
an Eligible Institution in the form set forth in such Notice.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL
CASES SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.
TO PREVENT FEDERAL INCOME TAX BACKUP WITHHOLDING EQUAL TO 31% OF THE GROSS
PAYMENTS MADE PURSUANT TO THE OFFER, EACH STOCKHOLDER WHO DOES NOT OTHERWISE
ESTABLISH AN EXEMPTION FROM SUCH WITHHOLDING MUST NOTIFY THE DEPOSITARY OF SUCH
STOCKHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER (SOCIAL SECURITY NUMBER OR
EMPLOYER IDENTIFICATION NUMBER) OR CERTIFY THAT SUCH STOCKHOLDER IS AWAITING A
STOCKHOLDER IDENTIFICATION NUMBER AND PROVIDE CERTAIN OTHER INFORMATION BY
COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL. EXCEPT
FOR STOCKHOLDERS SUBJECT TO 30% (OR LOWER TREATY RATE) WITHHOLDING ON GROSS
4
<PAGE>
PAYMENTS RECEIVED PURSUANT TO THE OFFER (SEE SECTION 13 BELOW), FOREIGN
STOCKHOLDERS MUST SUBMIT A COMPLETED FORM W-8 AND PROVIDE FURTHER CERTIFICATION
IN ORDER TO AVOID THE APPLICABLE BACKUP WITHHOLDING. For a discussion of certain
federal income tax consequences to tendering stockholders, see Section 13.
It is a violation of Rule 14e-4 promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), for a person to tender Shares for
his or her own account unless 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 stockholder's representation and
warranty that (i) such stockholder 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. The Company's
acceptance for payment of Shares tendered pursuant to the Offer will constitute
a binding agreement between the tendering stockholder and the Company upon the
terms and subject to the conditions of the Offer.
All questions as to the Purchase Price, 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,
and its determination shall be final and binding. The Company reserves the
absolute right to reject any or all tenders of Shares that it determines are not
in proper form or the acceptance for payment of or payment for Shares that may,
in the opinion of the Company's counsel, be unlawful. The Company also reserves
the absolute right to waive any defect or irregularity in any tender of Shares.
None of the Company, the Dealer Manager, the Depositary, the Information Agent
or any other person will be under any duty to give notice of any defect or
irregularity in tenders, nor shall any of them incur any liability for failure
to give any such notice.
Participants in the SMART Plan who wish to tender Shares allocated to their
accounts should so indicate by completing, executing and returning, to the
trustee indicated, the Election Form included with the notice furnished to such
participants. SMART PLAN PARTICIPANTS MAY NOT USE THE LETTER OF TRANSMITTAL TO
TENDER THEIR SMART PLAN SHARES, BUT MUST USE THE SEPARATE ELECTION FORM REFERRED
TO ABOVE.
4. WITHDRAWAL RIGHTS.
Tenders of Shares made pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date. Thereafter, such tenders are irrevocable, except
that they may be withdrawn after October 5, 1995 unless theretofore accepted for
payment as provided in this Offer to Purchase. If the Company extends the period
of time during which the Offer is open, is delayed in accepting for payment or
paying for Shares or is unable to accept for payment or pay for Shares pursuant
to the Offer for any reason, then, without prejudice to the Company's rights
under the Offer, the Depositary may, on behalf of the Company, retain all Shares
tendered, and such Shares may not be withdrawn except as otherwise provided in
this Section 4, subject to Rule 13e-4(f)(5) under the Exchange Act, which
provides that the issuer making the tender offer shall either pay the
consideration offered, or return the tendered securities, promptly after the
termination or withdrawal of the tender offer.
To be effective, a written or facsimile transmission notice of withdrawal
must be timely received by the Depositary at one of its addresses set forth on
the back cover of this Offer to Purchase and must specify the name of the person
who tendered the Shares to be withdrawn and the number of Shares to be
withdrawn. If the Shares to be withdrawn have been delivered to the Depositary,
a signed notice of withdrawal with signatures guaranteed by an Eligible
Institution (except in the case of Shares tendered by an Eligible Institution)
must be submitted prior to the release of such Shares. In addition, such notice
must specify, in the case of Shares tendered by delivery of certificates, the
name of the registered holder (if different from that of the tendering
stockholder) and the serial numbers shown on the particular certificates
evidencing the Shares to be withdrawn or, in the case of Shares tendered by
book-entry transfer, the name and number of
5
<PAGE>
the account at one of the Book-Entry Transfer Facilities to be credited with the
withdrawn Shares. Withdrawals may not be rescinded, and Shares withdrawn will
thereafter be deemed not validly tendered for purposes of the Offer. However,
withdrawn Shares may be retendered by again following one of the procedures
described in Section 3 at any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by 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 will be under
any duty to give notification of any defect or irregularity in any notice of
withdrawal or incur any liability for failure to give any such notification.
Participants in the SMART Plan should follow the procedures for withdrawal
included in the notice furnished to such participants.
5. ACCEPTANCE FOR PAYMENT OF SHARES AND PAYMENT OF PURCHASE PRICE.
Upon the terms and subject to the conditions of the Offer and as promptly as
practicable after the Expiration Date, the Company will determine the Purchase
Price, taking into account the number of Shares tendered and the prices
specified by tendering stockholders, announce the Purchase Price, and will
(subject to the proration and conditional tender provisions of the Offer) accept
for payment and pay for Shares validly tendered at or below the Purchase Price.
Thereafter, payment for all Shares validly tendered on or prior to the
Expiration Date and accepted for payment pursuant to the Offer will be made by
the Depositary by check as promptly as practicable. In all cases, payment for
Shares accepted for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of certificates for Shares (or of a confirmation of a
book-entry transfer of such Shares into the Depositary's account at one of the
Book-Entry Transfer Facilities), a properly completed and duly executed Letter
of Transmittal or facsimile thereof, and any other required documents.
For purposes of the Offer, the Company will be deemed to have accepted for
payment (and thereby purchased) Shares that are validly tendered and not
withdrawn as, if and when it gives oral or written notice to the Depositary of
its acceptance for payment of such Shares. The Company will pay for Shares that
it has purchased pursuant to the Offer by depositing the Purchase Price therefor
with the Depositary. The Depositary will act as agent for tendering stockholders
for the purpose of receiving payment from the Company and transmitting payment
to tendering stockholders. Under no circumstances will interest be paid on
amounts to be paid to tendering stockholders, regardless of any delay in making
such payment.
Certificates for all Shares not purchased will be returned (or, in the case
of Shares tendered by book-entry transfer, such Shares will be credited to an
account maintained with a Book-Entry Transfer Facility) as promptly as
practicable without expense to the tendering stockholder. The Company will pay
all stock transfer taxes, if any, payable on the transfer to it of Shares
purchased pursuant to the Offer, except as set forth in Instruction 6 to the
Letter of Transmittal.
Payment for Shares may be delayed in the event of difficulty in determining
the number of Shares properly tendered or if proration is required. See Section
1. In addition, if certain events occur, the Company may not be obligated to
purchase Shares pursuant to the Offer. See Section 7.
The Company will pay or cause to be paid any stock transfer taxes with
respect to the sale and transfer of any Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price is to be made to, or
Shares not tendered or not purchased are to be registered in the name of, any
person other than the registered holder, or if tendered Shares are registered in
the name of any person other than the person signing the Letter of Transmittal,
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 will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted. See
Instruction 7 to the Letter of Transmittal.
6
<PAGE>
6. CONDITIONAL TENDER OF SHARES.
Under certain circumstances and subject to the exceptions set forth in
Section 1, the Company may prorate the number of Shares purchased pursuant to
the Offer. As discussed in Section 13, the number of Shares to be purchased from
a particular stockholder might affect the tax treatment of such purchase to such
stockholder and such stockholder's decision whether to tender. EACH STOCKHOLDER
IS URGED TO CONSULT WITH HIS OR HER OWN TAX ADVISOR. Accordingly, a stockholder
may tender Shares subject to the condition that a specified minimum number of
such holder's Shares tendered pursuant to a Letter of Transmittal or Notice of
Guaranteed Delivery must be purchased if any such Shares so tendered are
purchased, and any stockholder desiring to make such a conditional tender must
so indicate in the box captioned "Conditional Tender" in such Letter of
Transmittal or, if applicable, the Notice of Guaranteed Delivery.
Any tendering stockholders wishing to make a conditional tender must
calculate and appropriately indicate such minimum number of Shares. If the
effect of accepting tenders on a pro rata basis would be to reduce the number of
Shares to be purchased from any stockholder (tendered pursuant to a Letter of
Transmittal or Notice of Guaranteed Delivery) below the minimum number so
specified, such tender will automatically be regarded as withdrawn (except as
provided in the next paragraph) and all Shares tendered by such stockholder
pursuant to such Letter of Transmittal or Notice of Guaranteed Delivery will be
returned as promptly as practicable thereafter.
If conditional tenders would otherwise be so regarded as withdrawn and would
cause the total number of Shares to be purchased to fall below 4,000,000, then,
to the extent feasible, the Company will select enough of such conditional
tenders that would otherwise have been so withdrawn to permit the Company to
purchase 4,000,000 Shares. In selecting among such conditional tenders, the
Company will select by lot and will limit its purchase in each case to the
designated minimum number of Shares to be purchased.
7. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, the Company will not be
required to accept for payment or pay for any Shares tendered, and may terminate
or amend and may postpone (subject to the requirements of the Exchange Act for
prompt payment for or return of Shares) the acceptance for payment of Shares
tendered, if at any time after August 8, 1995 and at or before acceptance for
payment of any Shares, any of the following shall have occurred:
(a) there shall have been threatened, instituted or pending any action
or proceeding by any government or governmental, regulatory or
administrative agency or authority or tribunal or any other person, domestic
or foreign, or before any court, authority, agency or tribunal that (i)
challenges the acquisition of Shares pursuant to the Offer or otherwise in
any manner relates to or affects the Offer or (ii) in the sole judgment of
the Company, could materially and adversely affect the business, condition
(financial or other), income, operations or prospects of the Company and its
subsidiaries, taken as a whole, or otherwise materially impair in any way
the contemplated future conduct of the business of the Company or any of its
subsidiaries or materially impair the Offer's contemplated benefits to the
Company;
(b) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered,
amended, enforced or deemed to be applicable to the Offer or the Company or
any of its subsidiaries, by any court, authority, agency or tribunal which,
in the Company's sole judgment, would or might directly or indirectly (i)
make the acceptance for payment of, or payment for, some or all of the
Shares illegal or otherwise restrict or prohibit consummation of the Offer,
(ii) delay or restrict the ability of the Company, or render the Company
unable, to accept for payment or pay for some or all of the Shares, (iii)
materially impair the contemplated benefits of the Offer to the Company, or
(iv) materially affect the business, condition (financial or other), income,
operations or prospects of the Company and its subsidiaries, taken as a
whole, or otherwise materially impair in any way the contemplated future
conduct of the business of the Company or any of its subsidiaries;
7
<PAGE>
(c) it shall have been publicly disclosed or the Company shall have
learned that (i) any person or "group" (within the meaning of Section
13(d)(3) of the Exchange Act) has acquired or proposes to acquire beneficial
ownership of more than 5% of the outstanding Shares whether through the
acquisition of stock, the formation of a group, the grant of any option or
right, or otherwise (other than as disclosed in a Schedule 13D or 13G on
file with the Securities and Exchange Commission (the "Commission") on
August 8, 1995) or (ii) any such person or group that on or prior to August
8, 1995 had filed such a Schedule with the Commission thereafter shall have
acquired or shall propose to acquire whether through the acquisition of
stock, the formation of a group, the grant of any option or right, or
otherwise, beneficial ownership of additional Shares representing 2% or more
of the outstanding Shares;
(d) 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) any significant decline in the
market price of the Shares or any change in the general political, market,
economic or financial condition in the United States or abroad that could
have a material adverse effect on the Company's business or operations or
the trading in the Shares, (iii) the declaration of a banking moratorium or
any suspension of payments in respect of banks in the United States or any
limitation on the extension of credit by lending institutions in the United
States, (iv) the commencement of a war, armed hostilities or other
international or national calamity directly or indirectly involving the
United States or (v) in the case of any of the foregoing existing at the
time of the commencement of the Offer, in the Company's sole judgment, a
material acceleration or worsening thereof;
(e) a tender or exchange offer with respect to some or all of the Shares
(other than the Offer), or a merger, acquisition or other business
combination proposal for the Company, shall have been proposed, announced or
made by another person;
(f) there shall have occurred any event that has resulted, or may in the
sole judgment of the Company result, in an actual or threatened change in
the business, condition (financial or other), income, operations, stock
ownership or prospects of the Company and its subsidiaries; or
(g) there shall have occurred any decline in the Dow Jones Industrial
Average (4693.32 at the close of business on August 8, 1995) or the Standard
& Poor's Composite 500 Stock Index (560.39 at the close of business on
August 8, 1995) by an amount in excess of 15% measured from the close of
business on August 8, 1995;
and, in the sole judgment of the Company, such event makes it inadvisable to
proceed with the Offer or with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances (including any action or
inaction by the Company) giving rise to any such condition, and any such
condition may be waived by the Company, in whole or in part, at any time and
from time to time in its sole discretion. The failure by the Company at any time
to exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be asserted
at any time and from time to time. Any determination by the Company concerning
the events described above will be final and binding on all parties.
8
<PAGE>
8. PRICE RANGE OF SHARES; DIVIDENDS.
The Shares are listed and principally traded on the NYSE. The following
table sets forth the high and low closing sales prices of the Shares on the NYSE
Composite Tape and the cash dividends per Share for the fiscal quarters
indicated. Per Share prices reflect a two-for-one stock split effected in the
form of a stock dividend on December 31, 1993.
<TABLE>
<CAPTION>
CASH
DIVIDENDS
HIGH LOW PER SHARE
--------- --------- -----------
<S> <C> <C> <C>
1993:
1st Quarter...................................................................... $ 24 3/8 $ 19 $ 0.075
2nd Quarter...................................................................... 27 3/4 23 3/8 0.075
3rd Quarter...................................................................... 28 1/2 22 3/8 0.075
4th Quarter...................................................................... 30 23 0.075
1994:
1st Quarter...................................................................... $ 34 $ 22 1/8 $ 0.10
2nd Quarter...................................................................... 23 1/8 19 0.10
3rd Quarter...................................................................... 27 1/8 20 7/8 0.10
4th Quarter...................................................................... 26 7/8 21 1/4 0.10
1995:
1st Quarter...................................................................... $ 24 1/4 $ 21 1/8 $ 0.10
2nd Quarter...................................................................... 24 3/8 22 1/4 0.10
3rd Quarter (to August 9, 1995).................................................. 28 1/2 23 1/2 0.10(1)
<FN>
--------------
(1) On July 21, 1995, the Company's Board of Directors declared a regular
quarterly dividend of $0.10 per share to be paid on August 31, 1995 to
stockholders of record on August 15, 1995. Stockholders who tender Shares
and have not withdrawn such Shares on or prior to the Expiration Date will
be entitled to receive such dividend. It is anticipated that the Shares
will trade ex-dividend beginning August 11, 1995.
</TABLE>
On August 8, 1995, the last full NYSE trading day prior to the announcement
of the Offer, the last reported sale price of the Shares on the NYSE Composite
Tape was $28 per Share. On August 9, 1995, the last full NYSE trading day prior
to the commencement of the Offer, the last reported sale price of the Shares on
the NYSE Composite Tape was $28 per Share. STOCKHOLDERS ARE URGED TO OBTAIN
CURRENT MARKET QUOTATIONS FOR THE SHARES.
On November 29, 1988, the Board of Directors of the Company adopted a
Stockholders' Rights Plan, which was amended as of October 22, 1991, pursuant to
which preferred stock rights (the "Rights") were distributed to stockholders on
the basis of one-half of a Right (as adjusted for the Company's 100% stock
dividend paid on January 28, 1994 to stockholders of record on December 31,
1993) for each Share held. In general, the Rights become exercisable or
transferable only upon the occurrence of certain events related to changes in
ownership of the Shares. Once exercisable, each Right entitles its holder to
purchase from the Company one one-hundredth of a share ("unit") of Series A
Junior Participating Preferred Stock, at a purchase price of $130 per unit,
subject to adjustment. Upon the occurrence of certain other events related to
changes in the ownership of the Shares, each holder of a Right would be entitled
to purchase shares of the Company's Common Stock, or an acquiring corporation's
common stock having a market value equal to two times the exercise price of the
Right. The Rights expire November 29, 1998 and, subject to certain conditions,
may be redeemed by the Board of Directors at any time at a price of $.05 per
Right. The Rights are not currently exercisable and trade together with the
Shares associated therewith. The Rights will not become exercisable or
separately tradable as a result of the Offer. Absent circumstances causing the
Rights to become exercisable or separately tradable prior to the Expiration
Date, the tender of any Shares pursuant to the Offer will include the tender of
the associated Rights. No separate consideration will be paid for such Rights.
Upon the purchase of Shares by the Company pursuant to the Offer, the sellers of
the Shares so purchased will no longer own the Rights associated with such
Shares.
9
<PAGE>
9. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER.
The Company believes that the purchase of its Shares at this time represents
an attractive investment opportunity that will benefit the Company and its
remaining stockholders. The Offer will afford to stockholders who are
considering the sale of all or a portion of their Shares the opportunity to
determine the price at which they are willing to sell their Shares and, in the
event the Company accepts such Shares, to dispose of Shares without the usual
transaction costs associated with a market sale. The Offer will also allow
qualifying stockholders owning beneficially fewer than 100 Shares to avoid the
payment of brokerage commissions and the applicable odd lot discount payable on
a sale of Shares in a transaction effected on a securities exchange.
Correspondingly, the costs to the Company for servicing the accounts of odd lot
holders will be reduced. See Section 2.
Stockholders who determine not to accept the Offer will obtain a
proportionate increase in their ownership interest in the Company. After
consummation of the Offer, increases or decreases in earnings per Share are
likely to be greater than is presently the case because of the smaller number of
Shares outstanding.
If fewer than 4,000,000 Shares are purchased pursuant to the Offer, the
Company may repurchase the remainder of such Shares on the open market, in
private transactions or otherwise. The Company may in the future determine to
purchase additional Shares on the open market, in private transactions, through
one or more tender offers or otherwise. Any such purchases may be on the same
terms or on terms which are more or less favorable to stockholders than the
terms of the Offer. However, Rule 13e-4 under the Exchange Act 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. Any
future purchases of Shares by the Company would depend on many factors,
including the market price of the Shares, the Company's business and financial
position, and general economic and market conditions. In addition, the Company's
credit agreements contain certain limitations on the Company's ability to
purchase additional Shares.
Shares that the Company acquires pursuant to the Offer will become
authorized but unissued Shares and will be available for issuance by the Company
without further stockholder action (except as may be required by applicable law
or the rules of the securities exchanges on which the Shares are listed). Such
Shares could be issued without stockholder approval for, among other things,
acquisitions, the raising of additional capital for use in the Company's
business, stock dividends or in connection with employee stock, stock option and
other plans, or a combination thereof. The Company has no current plans for the
Shares it may acquire pursuant to the Offer or any other authorized but unissued
Shares.
As of the close of business on August 8, 1995, the Company had issued and
outstanding 29,466,186 Shares (which number reflects the repurchase on such date
of 2,000,000 Shares, as described in Section 12) and had reserved for issuance
upon exercise of outstanding stock options 4,842,555 Shares. The 4,000,000
Shares that the Company is offering to purchase represent approximately 13.6% of
the Shares then outstanding, or approximately 11.7% on a fully diluted basis
(assuming the exercise of all outstanding stock options). As of the close of
business on August 8, 1995, all directors and executive officers of the Company
as a group owned beneficially an aggregate of 2,794,341 Shares (including an
aggregate of 4,573 Shares attributable to the accounts of all directors and
executive officers as a group under the SMART Plan and an aggregate of 673,347
Shares that may be acquired pursuant to the exercise of stock options that were
exercisable as of such date or that will become exercisable prior to the
Expiration Date), or approximately 9.3% of the Shares then outstanding, assuming
the exercise of all such options. The Company has been advised that no director
or executive officer intends to tender Shares pursuant to the Offer. If the
Company purchases 4,000,000 Shares pursuant to the Offer and no director or
executive officer of the Company tenders Shares, the percentage of outstanding
Shares owned beneficially by all directors and executive officers as a group
would increase to approximately 10.7% of the Shares outstanding after the Offer
(assuming the exercise of all stock options held by such directors and executive
officers that are currently or will become exercisable prior to the Expiration
Date). See Section 12.
Except as disclosed in this Offer to Purchase, the Company has no plans or
proposals that relate to or would result in: (a) the acquisition by any person
of additional securities of the Company or the disposition of securities of the
Company; (b) an extraordinary corporate transaction, such as a merger,
reorganization or
10
<PAGE>
liquidation, involving the Company or any of its subsidiaries; (c) a sale or
transfer of a material amount of assets of the Company or any of its
subsidiaries; (d) any change in the present Board of Directors or management of
the Company; (e) any material change in the present dividend rate or policy, or
indebtedness or capitalization of the Company; (f) any other material change in
the Company's corporate structure or business; (g) any change in the Company's
Certificate of Incorporation or By-Laws or any actions which may impede the
acquisition of control of the Company by any person; (h) a class of equity
security of the Company being delisted from a national securities exchange; (i)
a class of equity security of the Company becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Exchange Act; or (j) the
suspension of the Company's obligation to file reports pursuant to Section 15(d)
of the Exchange Act.
The Company does not believe that the Offer will result in delisting of the
Shares on the NYSE or termination of registration of the Shares under the
Exchange Act.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY STOCKHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. EACH STOCKHOLDER MUST
MAKE HIS OR HER OWN DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW MANY
SHARES TO TENDER AND AT WHAT PRICE. THE COMPANY HAS BEEN ADVISED THAT NO
DIRECTOR OR EXECUTIVE OFFICER INTENDS TO TENDER SHARES PURSUANT TO THE OFFER.
10. CERTAIN INFORMATION CONCERNING THE COMPANY.
The Company and its subsidiaries provide container transportation and
related services in Asia, the Americas, Europe and the Middle East through an
intermodal system combining ocean, rail and truck transportation.
The Company's international transportation operations are conducted through
American President Lines, Ltd., an ocean common carrier with operations
concentrated in the Pacific Basin. Another operating unit, American
Consolidation Services, Ltd., provides cargo distribution, warehousing and
freight consolidation services. Stevedoring and terminal operations on the U.S.
West Coast are conducted through Eagle Marine Services, Ltd. The Company's North
America transportation operations are conducted through APL Land Transport
Services, Inc., which provides intermodal transportation and freight brokerage.
The Company's principal executive offices are located at 1111 Broadway,
Oakland, California 94607 and its telephone number is (510) 272-8000.
11
<PAGE>
SUMMARY CONSOLIDATED HISTORICAL FINANCIAL INFORMATION
Set forth below is certain summary consolidated historical financial
information of the Company and its subsidiaries. The historical financial
information at December 30, 1994 and December 31, 1993 and for the fiscal years
then ended has been summarized from the Company's audited consolidated financial
statements as set forth in the Company's Annual Report on Form 10-K for the
fiscal year ended December 30, 1994. The historical financial information for
the 26-week periods ended June 30, 1995 and July 1, 1994 has been summarized
from the Company's unaudited consolidated financial statements as set forth in
the Company's Quarterly Report on Form 10-Q for the 26-week period ended June
30, 1995. Results for the 26-week period ended June 30, 1995 are not necessarily
indicative of results that may be expected for the entire fiscal year ending
December 29, 1995 or future periods. More comprehensive financial information
regarding the Company and its subsidiaries is included in such reports, which
are on file with the Commission. The financial information that follows is
qualified in its entirety by reference to such reports and the audited financial
statements and the related notes therein. Copies of such reports may be obtained
by calling the Company's Investor Relations Department at (510) 272-8284. Copies
of such reports may also be obtained as set forth in Section 16.
SUMMARY CONSOLIDATED HISTORICAL FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT RATIOS AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEAR ENDED 26 WEEKS ENDED
-------------------------- --------------------------
DECEMBER 31, DECEMBER 30, JULY 1, JUNE 30,
1993 1994 1994 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Revenues.............................................. $2,606,220 $2,793,468 $ 1,356,656 $ 1,414,951
Income before taxes................................... 130,501 110,304 44,044 24,710
Net income............................................ 80,109 74,198 29,157 15,320
Earnings per common share:
Primary............................................. $ 2.65 $ 2.38 $ 0.91 $ 0.43
Fully diluted....................................... 2.50 2.30 0.90 0.42
Average number of common shares outstanding:
Primary............................................. 27,700 28,300 28,400 28,000
Fully diluted....................................... 32,100 32,300 32,400 28,100
Ratio of earnings to fixed charges.................... 2.81x 2.04x 1.84x 1.34x
<CAPTION>
AT AT
-------------------------- --------------------------
DECEMBER 31, DECEMBER 30, JULY 1, JUNE 30,
1993 1994 1994 1995
------------ ------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital....................................... $ 51,414 $ 206,306 $ 231,347 $ 197,401
Total assets.......................................... 1,454,377 1,663,957 1,611,513 1,744,359
Total long-term debt and capital lease obligations.... 267,306 386,250 400,086 436,278
Redeemable preferred stock............................ 75,000 75,000 75,000 75,000
Stockholders' equity.................................. 475,453 541,383 500,586 549,775
Book value per common share........................... $ 17.72 $ 19.82 $ 18.37 $ 20.02
</TABLE>
12
<PAGE>
SUMMARY UNAUDITED CONSOLIDATED PRO FORMA FINANCIAL INFORMATION
The following summary unaudited consolidated pro forma financial information
gives effect to the conversion of all outstanding shares of the Company's 9%
Series C Cumulative Convertible Preferred Stock (the "Series C Preferred Stock")
into 3,961,498 Shares on July 28, 1995, the repurchase of 2,000,000 Shares on
August 8, 1995 described in Section 12 (the "August Repurchase"), and the
purchase of Shares pursuant to the Offer, based on certain assumptions described
in the Notes to Summary Unaudited Consolidated Pro Forma Financial Information.
The summary unaudited consolidated pro forma financial information gives effect
to the conversion of the Series C Preferred Stock, the August Repurchase and the
purchase of Shares pursuant to the Offer as if each had occurred at the
beginning of the periods presented. The summary unaudited consolidated pro forma
financial information should be read in conjunction with the summary
consolidated historical financial information and does not purport to be
indicative of the results that would actually have been obtained had the
conversion of the Series C Preferred Stock, the August Repurchase, and the
purchase of the Shares pursuant to the Offer been completed at the dates
indicated or that may be obtained in the future.
SUMMARY UNAUDITED CONSOLIDATED PRO FORMA FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT RATIOS AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 30, 1994 26 WEEKS ENDED JUNE 30, 1995
------------------------------------- -------------------------------------
PRO FORMA PRO FORMA
------------------------ ------------------------
AT $27 AT $30 AT $27 AT $30
PURCHASE PURCHASE PURCHASE PURCHASE
HISTORICAL PRICE PRICE HISTORICAL PRICE PRICE
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Revenues................................ $ 2,793,468 $ 2,793,468 $ 2,793,468 $ 1,414,951 $ 1,414,951 $ 1,414,951
Income before taxes..................... 110,304 103,543 103,021 24,710 19,767 19,394
Net income.............................. 74,198 70,005 69,682 15,320 12,255 12,024
Earnings per common share:
Primary............................... $ 2.38 $ 2.67 $ 2.65 $ 0.43 $ 0.47 $ 0.46
Fully diluted......................... 2.30 2.66 2.65 0.42 0.47 0.46
Average number of common shares
outstanding:
Primary............................... 28,300 26,300 26,300 28,000 26,000 26,000
Fully diluted......................... 32,300 26,300 26,300 28,100 26,100 26,100
Ratio of earnings to fixed charges...... 2.04x 1.97x 1.97x 1.34x 1.25x 1.25x
<CAPTION>
AT DECEMBER 30, 1994 AT JUNE 30, 1995
------------------------------------- -------------------------------------
PRO FORMA PRO FORMA
------------------------ ------------------------
AT $ 27 AT $ 30 AT $27 AT $30
PURCHASE PURCHASE PURCHASE PURCHASE
HISTORICAL PRICE PRICE HISTORICAL PRICE PRICE
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital......................... $ 206,306 $ 46,678 $ 34,355 $ 197,401 $ 35,119 $ 22,888
Total assets............................ 1,663,957 1,501,761 1,489,239 1,744,359 1,581,468 1,569,237
Total long-term debt and capital lease
obligations............................ 386,250 386,250 386,250 436,278 436,278 436,278
Redeemable preferred stock.............. 75,000 -- -- 75,000 -- --
Stockholders' equity.................... 541,383 456,755 444,432 549,775 462,493 450,262
Book value per common share............. $ 19.82 $ 18.07 $ 17.58 $ 20.02 $ 18.19 $ 17.71
</TABLE>
See Notes to Summary Unaudited Consolidated Pro Forma Financial Information.
13
<PAGE>
NOTES TO SUMMARY UNAUDITED CONSOLIDATED
PRO FORMA FINANCIAL INFORMATION
The following assumptions regarding the Offer were made in arriving at the
pro forma financial information:
(1) The information assumes 4,000,000 Shares are repurchased and retired
at a $27 per Share price and at a $30 per Share price, respectively, with
the purchase being financed with cash, cash equivalents and short-term
investments. There can be no assurance that the Company will repurchase
4,000,000 Shares or of the price at which Shares will be repurchased.
(2) Income before taxes was reduced for the interest income that the
Company would have earned on cash, cash equivalents and short-term
investments assumed to be used to finance the repurchase of Shares at the
beginning of the period shown. The assumed average interest rates for the
year ended December 30, 1994 and the 26-week period ended June 30, 1995 were
4.35% and 6.21%, respectively.
(3) The income tax benefit on the reduction of interest income related
to the above-referenced use of cash was computed at an assumed marginal tax
rate of 38% for 1994 and 1995.
(4) Expenses directly related to the Offer are assumed to be $1,000,000
and are charged against stockholders' equity.
(5) The ratio of earnings to fixed charges has been computed by dividing
the sum of income before taxes, interest expense and a portion of rental
expense representative of the interest factor by the sum of total interest,
including amounts capitalized, and the portion of rental expense
representative of the interest factor.
11. SOURCE AND AMOUNT OF FUNDS.
Assuming that the Company purchases 4,000,000 Shares pursuant to the Offer
at a price of $30 per Share, the total amount required by the Company to
purchase such Shares will be $120 million, exclusive of fees and other expenses.
The Company expects to fund the purchase of such Shares from cash, cash
equivalents and short-term investments.
12. TRANSACTIONS AND AGREEMENTS CONCERNING THE SHARES.
In July 1995, the Company announced that its Board of Directors approved a
program to repurchase up to 6,000,000 Shares, with the form and timing and the
exact number of Shares to be repurchased to depend upon market conditions. The
Offer is being made pursuant to such program and, except as described below, the
Company has not acquired any other Shares pursuant to such program.
Except as described below, based upon the Company's records and upon
information provided to the Company by its directors and executive officers,
neither the Company nor, to the Company's knowledge, any of its associates,
subsidiaries, directors, executive officers or any associate of any such
director, officer, or any director or executive officer, of its subsidiaries has
engaged in any transactions involving the Shares during the 40 business days
preceding the date hereof.
On July 14, 1995, the Company called for redemption on July 31, 1995 all
outstanding shares of Series C Preferred Stock, all of which were beneficially
owned by partnerships affiliated with Hellman & Friedman, a San Francisco-based
investment firm (the "H&F Partnerships"). The holders of all outstanding shares
of Series C Preferred Stock elected, in accordance with the terms thereof, to
convert such shares into 3,961,498 Shares on July 28, 1995. Two of the Company's
directors, F. Warren Hellman and Tully M. Friedman, could be deemed to own
beneficially all of such Shares as a result of their shared investment and
voting power over such Shares.
On August 8, 1995, the Company repurchased 2,000,000 Shares from the H&F
Partnerships at a purchase price of $27 per share, or an aggregate purchase
price of $54,000,000. The repurchase of such
14
<PAGE>
Shares was funded from cash on hand. Messrs. Hellman and Friedman have informed
the Company that the remaining 2,028,698 Shares owned beneficially by the H&F
Partnerships will continue to be held for investment purposes.
Neither the Company nor, to the Company's knowledge, any of its directors or
executive officers is a party to any contract, arrangement, understanding or
relationship relating directly or indirectly to the Offer with any other person
with respect to the Shares.
13. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following summary describes certain United States federal income tax
consequences relating to the Offer. The summary is based on the Internal Revenue
Code of 1986, as amended (the "Code"), and existing final, temporary and
proposed Treasury Regulations, Revenue Rulings and judicial decisions, all of
which are subject to prospective and retroactive changes. The summary deals only
with Shares held as capital assets within the meaning of Section 1221 of the
Code and does not address tax consequences that may be relevant to investors in
special tax situations, such as certain financial institutions, tax-exempt
organizations, life insurance companies, dealers in securities or currencies, or
stockholders holding the Shares as part of a conversion transaction, as part of
a hedge or hedging transaction, or as a position in a straddle for tax purposes.
The Company will not seek a ruling from the Internal Revenue Service (the "IRS")
with regard to the United States federal income tax treatment of the Offer and,
therefore, there can be no assurance that the IRS will agree with the
conclusions set forth below. Accordingly, each stockholder should consult his or
her own tax advisor with regard to the Offer and the application of United
States federal income tax laws, as well as the laws of any state, local or
foreign taxing jurisdiction, to his or her particular situation.
Sales of Shares by stockholders pursuant to the Offer will be taxable
transactions for federal income tax purposes and may also be taxable
transactions under applicable state, local, foreign and other tax laws. The
federal income tax consequences to a stockholder may vary depending upon the
stockholder's particular facts and circumstances. Under Section 302 of 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 such Shares (rather than as a
distribution made by the Company with respect to the Shares held by the
tendering stockholder) if the receipt of cash upon such sale (a) is
"substantially disproportionate" with respect to the stockholder, (b) results in
a "complete termination" of the stockholder's interest in the Company or (c) is
"not essentially equivalent to a dividend" with respect to the stockholder (each
as described below).
If any of the above three tests is satisfied, a tendering stockholder will
recognize gain or loss equal to the difference between the amount of cash
received by the stockholder pursuant to the Offer and the stockholder's tax
basis in the Shares sold pursuant to the Offer. Recognized gain or loss will be
a capital gain or loss, assuming the Shares are held as a capital asset, which
will be long-term capital gain or loss if the Shares are held for more than one
year.
If none of the three tests under Section 302 is satisfied, and if the
Company has sufficient earnings and profits as is anticipated, the tendering
stockholder 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
stockholder pursuant to the Offer without reduction for the tax basis of the
Shares sold pursuant to the Offer; in such case the tendering stockholder's
basis in the Shares sold pursuant to the Offer would be added to such
stockholder's basis in his remaining Shares.
In determining whether any of the tests under Section 302 of the Code is
satisfied, stockholders must take into account not only the Shares which they
actually own, but also Shares which they are deemed to own pursuant to the
constructive ownership rules of Section 318 of the Code. Pursuant to these
constructive ownership rules, a stockholder is deemed to own the Shares actually
owned, and in some cases constructively owned, by certain related individuals or
entities, and the Shares which the stockholder has the right to acquire by
exercise of an option or by conversion or exchange of a security.
The receipt of cash by a stockholder will be "substantially
disproportionate" if the percentage of the outstanding Shares actually and
constructively owned by the stockholder immediately following the sale of Shares
pursuant to the Offer (treating as not outstanding all Shares purchased pursuant
to the Offer) is less
15
<PAGE>
than 80% of the percentage of the outstanding Shares actually and constructively
owned by such stockholder immediately before the sale of Shares pursuant to the
Offer (treating as outstanding all Shares purchased pursuant to the Offer).
Stockholders should consult their tax advisors with respect to the application
of the "substantially disproportionate" test to their particular facts and
circumstances.
The receipt of cash by a stockholder will be a "complete termination" of the
stockholder's interest in the Company if (a) either (i) all of the Shares
actually and constructively owned by the stockholder are sold pursuant to the
Offer or (ii) all of the Shares actually owned by the stockholder are sold
pursuant to the Offer and (b) the stockholder is eligible to waive and does
effectively waive attribution of all Shares constructively owned by the
stockholder in accordance with Section 302(c)(2) of the Code.
Even if the receipt of cash by a stockholder fails to satisfy the
"substantially disproportionate" test or the "complete termination" test, such
stockholder may nevertheless satisfy the "not essentially equivalent to a
dividend" test, if the stockholder's sales of Shares pursuant to the Offer
results in a "meaningful reduction" in the stockholder's proportionate interest
in the Company. Whether the receipt of cash by a stockholder will be "not
essentially equivalent to a dividend" will depend upon the individual
stockholder's facts and circumstances. In the case of a small minority
stockholder, even a small reduction in his proportionate interest should satisfy
this test. The IRS held in Rev. Rul. 81-289, 1981-2 C.B. 82 that whether a
meaningful reduction in a stockholder's interest had occurred must be determined
on a stockholder-by-stockholder basis, and identified three rights inherent in
stock ownership (the stockholder's right to vote and thereby exercise control,
the stockholder's right to participate in current earnings and accumulated
surplus and the stockholder's right to share in net assets on liquidation) that
it viewed as important in making such a determination. Although a reduction in a
stockholder's proportionate interest in a redeeming corporation would clearly
not occur if the Company redeemed an equal percentage of each of the
stockholders' Shares (since each stockholder would have exactly the same
proportionate voting power, right to participate in current earnings and
accumulated surplus and right to share in net assets on liquidation both before
and after the redemption), the IRS held in Rev. Rul. 76-385, 1976-2 C.B. 92 that
a reduction in the proportionate interest of a stockholder in a publicly held
corporation who exercised no meaningful control from .0001118% to .0001081%
would constitute such a "meaningful reduction." Stockholders expecting to rely
upon the "not essentially equivalent to a dividend" test should consult with
their tax advisors as to its application in their particular situation.
It may be possible for a tendering stockholder to satisfy one of the above
three tests by contemporaneously selling or otherwise disposing of all or some
of the Shares that are actually or constructively owned by such stockholder but
are not purchased pursuant to the Offer. Correspondingly, a tendering
stockholder may not be able to satisfy one of the above three tests because of
contemporaneous acquisitions of Shares by such stockholder or a related party
whose Shares would be attributed to such stockholder. Stockholders should
consult their tax advisors regarding the tax consequences of such sales or
acquisitions in their particular circumstances.
Each stockholder should be aware that proration of the Offer may mean that
even if all the Shares actually and constructively owned by a stockholder are
tendered pursuant to the Offer, fewer than all such Shares may be purchased by
the Company, which in turn may affect the stockholder's ability to satisfy one
of the three tests for sale or exchange treatment under Section 302 of the Code,
as discussed above. See Section 6 for information regarding each stockholder's
option to make a conditional tender of a minimum number of Shares. A STOCKHOLDER
WHO DETERMINES TO MAKE A CONDITIONAL TENDER IS STRONGLY URGED TO CALCULATE THE
MINIMUM NUMBER IN CONSULTATION WITH HIS OR HER TAX ADVISOR.
The distinction between long-term capital gains and ordinary income is
relevant because certain individuals are subject to taxation at a reduced rate
on the excess of net long-term capital gains over net short-term capital losses.
Stockholders are urged to consult their own tax advisors regarding any possible
impact on their obligation to make estimated tax payments as a result of the
recognition of any capital gain (or the receipt of any ordinary income) caused
by the sale of any Shares to the Company pursuant to the Offer.
16
<PAGE>
If a sale of Shares by a corporate stockholder is treated as a dividend, the
corporate stockholder may be entitled to claim a deduction equal to 70% of the
dividend. Corporate stockholders should, however, consider the effect of Section
246(c) of the Code, which disallows the 70% dividends-received deduction with
respect to stock that is held for 45 days or less. For this purpose, the length
of time a taxpayer is deemed to have held stock may be reduced by periods during
which the taxpayer's risk of loss with respect to the stock is diminished by
reason of the existence of certain options or other transactions. Moreover,
under Section 246A of the Code, if a corporate stockholder 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 such indebtedness and the total adjusted tax basis in the
Shares. In addition, in the likely event that the Company does not purchase an
equal percentage of each stockholder's Shares, any amount received by a
corporate stockholder that is treated as a dividend would constitute an
"extraordinary dividend" under Section 1059 of the Code. Accordingly, a
corporate stockholder would be required under Section 1059(a) of the Code to
reduce its basis (but not below zero) in its Shares by the non-taxed portion of
the dividend (that is, the portion of the dividend for which a deduction is
allowed), and if such portion exceeds the stockholder's tax basis for its
Shares, to treat the excess as gain from the sale of such Shares in the year in
which a sale or disposition of such Shares occurs (which, in certain
circumstances, may be the year in which Shares are sold pursuant to the Offer).
Even if the purchase of Shares pursuant to the Offer is pro rata with respect to
all stockholders, however, any amount received by a corporate stockholder could
nevertheless be considered an "extraordinary dividend" under Section 1059 of the
Code unless such corporation's stock has been held for more than two years
(excluding periods during which the corporation's risk of loss with respect to
the stock has been diminished by reason of the existence of certain options or
other transactions).
Corporate stockholders should be aware that legislation has been introduced
in the United States House of Representatives which, if enacted in its current
form, would generally treat any non-pro rata redemption of Shares that is
otherwise eligible for the dividends-received deduction as a sale of the Shares
rather than as a dividend. It is impossible to predict whether this or similar
legislation will be enacted. Corporate stockholders should consult their own tax
advisors concerning possible legislation affecting their ability to claim a
dividends-received deduction in connection with the Offer.
The maximum federal income tax rate on ordinary income for individuals,
estates and trusts is 39.6% (although income at certain specified levels may be
subject to tax at a higher effective rate due to the phase-out of the personal
exemptions and the benefit of certain itemized deductions for high income
taxpayers); long-term capital gains are subject to tax at a maximum rate of 28%
for these taxpayers (with similar effects on phase-out of exemptions and
itemized deductions). For corporations, the maximum federal income tax rate on
ordinary income is 35% (although income at certain specified levels may be
subject to tax at a higher rate due to the phase-out of lower brackets).
Long-term capital gains recognized by corporate taxpayers are taxable at a
maximum rate of 35%.
Stockholders are urged to consult with their own tax advisors regarding any
possible impact on their obligation to make estimated tax payments as a result
of the recognition of any capital gain (or the receipt of any ordinary income)
caused by the sale of any Shares to the Company pursuant to the Offer.
See Section 3 with respect to the application of federal income tax backup
withholding.
The Company will be required to withhold federal income tax at a rate of 30%
from gross proceeds paid pursuant to the Offer to a foreign stockholder or his
agent, unless the Company determines that a reduced rate of withholding is
applicable 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 by the foreign stockholder within the United
States. For this purpose, a foreign stockholder is any stockholder 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 (iii) any estate or trust the income of which is subject to United States
federal income taxation regardless of its source. The Company will determine the
applicable rate of withholding by reference to a stockholder's address, unless
the facts and circumstances indicate such reliance is not warranted or if
applicable law (for example, an applicable tax treaty or Treasury
17
<PAGE>
regulations thereunder) requires some other method for determining a
stockholder's residence. A foreign stockholder may be eligible to file for a
refund of such tax or a portion of such tax if such stockholder meets the
"complete termination," "substantially disproportionate" or "not essentially
equivalent to a dividend" tests described above, or if such stockholder is
entitled to a reduced rate of withholding pursuant to a treaty and the Company
withheld at a higher rate. In order to claim an exemption from withholding on
the grounds that gross proceeds paid pursuant to the Offer are effectively
connected with the conduct of a trade or business by a foreign stockholder
within the United States, the foreign stockholder must deliver to the Depositary
a properly executed statement claiming such exemption. Such statements can be
obtained from the Depositary. See the Instructions to the Letter of Transmittal.
Foreign stockholders are urged to consult their own tax advisors regarding the
application of federal income tax withholding, including eligibility for a
withholding tax reduction or exemption and the refund procedure.
The foregoing discussion may not apply to Shares acquired in connection with
the exercise of stock options or pursuant to other compensation arrangements
with the Company.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY.
THE TAX CONSEQUENCES OF A SALE PURSUANT TO THE OFFER MAY VARY DEPENDING UPON,
AMONG OTHER THINGS, THE PARTICULAR CIRCUMSTANCES OF THE TENDERING STOCKHOLDER.
NO INFORMATION IS PROVIDED HEREIN AS TO THE STATE, LOCAL OR FOREIGN TAX
CONSEQUENCES OF THE TRANSACTION CONTEMPLATED BY THE OFFER. STOCKHOLDERS ARE
URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR FEDERAL,
STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF SALES MADE BY THEM PURSUANT TO THE
OFFER AND THE EFFECT OF THE STOCK OWNERSHIP ATTRIBUTION RULES MENTIONED ABOVE.
14. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS.
The Company expressly reserves the right, in its sole discretion and 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.
There can be no assurance, however, that the Company will exercise its right to
extend the Offer. During any such extension, all Shares previously tendered will
remain subject to the Offer, except to the extent that such Shares may be
withdrawn as set forth in Section 4. The Company also expressly reserves the
right, in its sole discretion, (i) to terminate the Offer and not accept for
payment any Shares not theretofore accepted for payment or, subject to Rule
13e-4(f)(5) under the Exchange Act, which requires the Company either to pay the
consideration offered or to return the Shares tendered promptly after the
termination or withdrawal of the Offer, to postpone payment for Shares upon the
occurrence of any of the conditions specified in Section 7 hereof by giving oral
or written notice of such termination to the Depositary and making a public
announcement thereof and (ii) at any time or from time to time to amend the
Offer in any respect. Amendments to the Offer may be effected by public
announcement. Without limiting the manner in which the Company may choose to
make public announcement of any termination or amendment, the Company shall have
no obligation (except as otherwise required by applicable law) to publish,
advertise or otherwise communicate any such public announcement, other than by
making a release to the Dow Jones News Service, except in the case of an
announcement of an extension of the Offer, in which case the Company shall have
no obligation to publish, advertise or otherwise communicate such announcement
other than by issuing a notice of such extension by press release or other
public announcement, which notice shall be issued no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
Expiration Date. Material changes to information previously provided to holders
of the Shares in this Offer or in documents furnished subsequent thereto will be
disseminated to holders of Shares in compliance with Rule 13e-4(e)(2) under the
Exchange Act.
If the Company materially changes 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. Those rules 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,
change in dealer's soliciting fee or change in percentage
18
<PAGE>
of securities sought) will depend on the facts and circumstances, including the
relative materiality of such terms or information. In a published release, the
Commission has stated that in its view, an offer should remain open for a
minimum of five business days from the date that notice of such a material
change is first published, sent or given. The Offer will continue or be extended
for at least ten business days from the time the Company publishes, sends or
gives to holders of Shares a notice that it will (a) increase or decrease the
price it will pay for Shares or the amount of the Dealer Manager's soliciting
fee or (b) increase (except for an increase not exceeding 2% of the outstanding
Shares) or decrease the number of Shares it seeks.
15. FEES AND EXPENSES.
J.P. Morgan Securities Inc. will act as Dealer Manager for the Company in
connection with the Offer. The Company has agreed to pay the Dealer Manager a
financial advisory fee of $350,000 and, upon acceptance for payment of Shares
pursuant to the Offer, a fee of $400,000. The Dealer Manager will also be
reimbursed by the Company for its reasonable out-of-pocket expenses, including
attorneys' fees, and will be indemnified against certain liabilities, including
liabilities under the federal securities laws, in connection with the Offer.
The Dealer Manager has rendered, is currently rendering and is expected to
continue to render various investment banking and other advisory services to the
Company. It has received, and will continue to receive, customary compensation
from the Company for such services. Affiliates of the Dealer Manager are
currently lenders to the Company and have acted as agent bank on certain of the
Company's credit arrangements.
The Company has retained The First National Bank of Boston as Depositary and
Morrow & Co., Inc. as Information Agent in connection with the Offer. The
Information Agent may contact stockholders by mail, telephone, telex, telegraph
and personal interviews, and may request brokers, dealers, and other nominee
stockholders to forward materials relating to the Offer to beneficial owners.
The Depositary and the Information Agent will receive reasonable and customary
compensation for their services and will also be reimbursed for certain
out-of-pocket expenses. The Company has agreed to indemnify the Depositary and
the Information Agent against certain liabilities, including certain liabilities
under the federal securities laws, in connection with the Offer. Neither the
Information Agent nor the Depositary has been retained to make solicitations or
recommendations in connection with the Offer.
The Company will not pay any fees or commissions to any broker, dealer or
other person for soliciting tenders of Shares pursuant to the Offer (other than
the fees of the Dealer Manager). The Company will, upon request, reimburse
brokers, dealers, commercial banks and trust companies for reasonable and
customary handling and mailing expenses incurred by them in forwarding materials
relating to the Offer to their customers.
16. MISCELLANEOUS.
The Company is subject to the informational requirements of the Exchange Act
and in accordance therewith files reports, proxy statements and other
information with the Commission relating to its business, financial condition
and other matters. Certain information as of particular dates, concerning the
Company's directors and officers, their remuneration, options granted to them,
the principal holders of the Company's securities and any material interest of
such persons in transactions with the Company is filed with the Commission. The
Company has also filed an Issuer Tender Offer Statement on Schedule 13E-4 with
the Commission, which includes certain additional information relating to the
Offer. Such reports, as well as such other material, may be inspected and copies
may be obtained at the Commission's public reference facilities at 450 Fifth
Street, N.W., Washington, D.C., and should also be available for inspection and
copying at the regional offices of the Commission located at 7 World Trade
Center, Suite 1300, New York, New York, and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois. Copies of such material may be obtained
by mail, upon payment of the Commission's customary fees, from the Commission's
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. Such
material should also be available for inspection at the offices of the NYSE, 20
Broad Street, New York, New York, and the PSE, 301 Pine Street, San Francisco,
California. The Company's Schedule 13E-4 may not be available at the
Commission's regional offices.
19
<PAGE>
The Offer is being made to all holders of Shares. The Company is not aware
of any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to a valid state statute. If the Company becomes aware
of any valid state statute prohibiting the making of the Offer, the Company will
make a good faith effort to comply with such statute. If, after such good faith
effort, the Company cannot comply with such statute, the Offer will not be made
to, nor will tenders be accepted from or on behalf of, holders of Shares in such
state. In those jurisdictions whose securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer shall be deemed
to be made on behalf of the Company by the Dealer Manager or one or more
registered brokers or dealers licensed under the laws of such jurisdictions.
AMERICAN PRESIDENT COMPANIES, LTD.
August 10, 1995
20
<PAGE>
Facsimile copies of the Letter of Transmittal will be accepted. The Letter
of Transmittal and certificates for Shares should be sent or delivered by each
stockholder of the Company or his broker, dealer, bank or trust company to the
Depositary at one of its addresses set forth below.
THE DEPOSITARY:
THE FIRST NATIONAL BANK OF BOSTON
BY MAIL: FACSIMILE TRANSMISSION: BY HAND:
Shareholder Services (617) 575-2232 BancBoston Trust Company
Division (617) 575-2233 of New York
P.O. Box 1889 (for Eligible 55 Broadway, Third Floor
Mail Stop 45-01-19 Institutions Only) New York, New York
Boston, Massachusetts Confirm by Telephone:
02105 (617) 575-3400
BY OVERNIGHT COURIER:
Shareholder Services
Division
Mail Stop 45-01-19
150 Royall Street
Canton, Massachusetts
02021
Any questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at the respective telephone numbers and addresses
listed below. Requests for additional copies of this Offer to Purchase, the
Letter of Transmittal or other tender offer materials may be directed to the
Information Agent or the Dealer Manager, and such copies will be furnished
promptly at the Company's expense. Stockholders may also contact their local
broker, dealer, commercial bank or trust company for assistance concerning the
Offer.
THE INFORMATION AGENT:
MORROW & CO., INC.
909 Third Avenue
20th Floor
New York, New York 10022
(212) 754-8000
Toll Free (800) 566-9058
Banks and Brokerage
Firms please call:
(800) 662-5200
THE DEALER MANAGER:
J.P. MORGAN SECURITIES INC.
60 Wall Street
New York, New York 10260
(212) 648-7801 (collect)
<PAGE>
Letter Of Transmittal
To Accompany Common Shares of
American President Companies, Ltd.
Tendered Pursuant to the Offer to Purchase
Dated August 10, 1995
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, SEPTEMBER 8, 1995.
To: THE FIRST NATIONAL BANK OF BOSTON, Depositary
<TABLE>
<S> <C> <C>
BY MAIL: FACSIMILE TRANSMISSION: BY HAND:
Shareholder Services Division (617) 575-2232 BancBoston Trust Company
P.O. Box 1889 (617) 575-2233 of New York
Mail Stop 45-01-19 (for Eligible Institutions Only) 55 Broadway, Third Floor
Boston, Massachusetts 02105 Confirm by Telephone: New York, New York
(617) 575-3400
BY OVERNIGHT COURIER:
Shareholder Services Division
Mail Stop 45-01-19
150 Royall Street
Canton, Massachusetts 02021
</TABLE>
<TABLE>
<CAPTION>
DESCRIPTION OF SHARES TENDERED
NAMES(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN EXACTLY AS NAME(S) APPEAR(S) ON SHARES TENDERED
CERTIFICATE(S), IF BLANK) (ATTACH ADDITIONAL LIST IF NECESSARY)
<S> <C> <C> <C>
<CAPTION>
TOTAL NUMBER OF SHARES
REPRESENTED BY NUMBER OF SHARES
CERTIFICATE NUMBERS(*) CERTIFICATE(S)* TENDERED**
<S> <C> <C> <C>
TOTAL SHARES:
<FN>
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented
by any certificates delivered to the Depositary are being
tendered. See Instruction 4.
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN ONE LISTED ABOVE
WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THE LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used if certificates are to be forwarded
herewith or if delivery of Shares (as defined below) is to be made by book-entry
transfer to the Depositary's account at The Depository Trust Company ("DTC"),
Midwest Securities Trust Company ("MSTC") or Philadelphia Depository Trust
Company ("PDTC") (hereinafter collectively referred to as the "Book-Entry
Transfer Facilities") pursuant to the procedures set forth in Section 3 of the
Offer to Purchase (as defined below).
Stockholders who cannot deliver their Shares and all other documents
required hereby to the Depositary by the Expiration Date (as defined in the
Offer to Purchase) must tender their Shares pursuant to the guaranteed delivery
procedure set forth in Section 3 of the Offer to Purchase. See Instruction 2.
Delivery of documents to the Company or to a Book-Entry Transfer Facility does
not constitute a valid delivery.
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution
------------------------------------------------------------------------
Check Applicable Box: / / DTC / / MSTC / / PDTC
Account No.
----------------------------
Transaction Code No.
----------------------------
<PAGE>
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Tendering Stockholder(s)
------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
----------------------------------------------------
Name of Institution that Guaranteed Delivery
----------------------------------------------------------
If delivery is by book-entry transfer:
Name of Tendering Institution
------------------------------------------------------------------------
Account No.
---------------------------- at / / DTC / / MSTC / / PDTC
Transaction Code No.
----------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to American President Companies, Ltd., a
Delaware corporation (the "Company"), the above-described shares of its Common
Stock, par value $.01 per share (the "Shares"), pursuant to the Company's offer
to purchase 4,000,000 Shares at a price per Share hereinafter set forth, net to
the seller in cash, upon the terms and subject to the conditions set forth in
the Offer to Purchase dated August 10, 1995 (the "Offer to Purchase"), 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 and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the undersigned hereby
sells, assigns and transfers to, or upon the order of, the Company all right,
title and interest in and to all the Shares that are being tendered hereby (and
any and all other Shares or other securities issued or issuable in respect
thereof on or after August 8, 1995 (collectively, "Distributions")) and
constitutes and appoints the Depositary the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares and all
Distributions, with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (a) deliver
certificates for such Shares and all Distributions, or transfer ownership of
such Shares and all Distributions on the account books maintained by any of the
Book-Entry Transfer Facilities, together, in any such case, with all
accompanying evidences of transfer and authenticity, to or upon the order of the
Company, (b) present such Shares and all Distributions for registration and
transfer on the books of the Company and (c) receive all benefits and otherwise
exercise all rights of beneficial ownership of such Shares and all
Distributions, all in accordance with the terms of the Offer.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and all Distributions and that, when and to the extent the same are
accepted for payment by the Company, the Company will acquire good, marketable
and unencumbered title thereto, free and clear of all liens, restrictions,
charges, encumbrances, conditional sales agreements or other obligations
relating to the sale or transfer thereof, and the same will not be subject to
any adverse claims. The undersigned will, upon request, execute and deliver any
additional documents deemed by the Depositary or the Company to be necessary or
desirable to complete the sale, assignment and transfer of the Shares tendered
hereby and all Distributions.
All authority herein conferred or agreed to be conferred shall not be
affected by, and shall survive the death or incapacity of the undersigned, and
any obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned. Except as
stated in the Offer, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in 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 the Shares being
tendered within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended, and (ii) the tender of such Shares complies
with Rule 14e-4. The Company's acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the
undersigned and the Company upon the terms and subject to the conditions of the
Offer.
The undersigned understands that the Company will determine a single per
Share price (not greater than $30 nor less than $27 per Share) (the "Purchase
Price") that it will pay for Shares validly tendered and not withdrawn pursuant
to the Offer taking into account the number of Shares so tendered and the prices
specified by tendering stockholders. The undersigned understands that the
Company will select the Purchase Price that will enable it to purchase 4,000,000
Shares (or such lesser number of Shares as are validly tendered at prices not
greater than $30 nor less than $27 per Share) pursuant to the Offer. The
undersigned understands that tenders of Shares pursuant to any one of the
procedures described in Section 2 or 3 of the Offer to Purchase and in the
instructions hereto will constitute an agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Offer. The
undersigned also understands that unless preferred stock purchase rights
associated with the Shares ("the Rights") are redeemed or become separately
transferable in accordance with their terms, by tendering Shares the Undersigned
will also be tendering the associated Rights and that no separate consideration
will be paid for such Rights.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the purchase price of any Shares purchased, and/or return
any Shares not tendered or not purchased, in the name(s) of the undersigned
(and, in the case of Shares tendered by book-entry transfer, by credit to the
account at the Book-Entry Transfer Facility designated above). Similarly, unless
otherwise indicated under "Special Delivery Instructions," please mail the check
for the purchase price of any Shares purchased and/or any certificates for
Shares not tendered or not purchased (and
<PAGE>
accompanying documents, as appropriate) to the undersigned at the address shown
below the undersigned's signature(s). In the event that both "Special Payment
Instructions" and "Special Delivery Instructions" are completed, please issue
the check for the purchase price of any Shares purchased and/or return any
Shares not tendered or not purchased in the name(s) of, and mail said check
and/or any certificates to, the person(s) so indicated. Stockholders tendering
Shares by book-entry transfer may request that any Shares not accepted for
payment be returned by crediting such account maintained at such Book-Entry
Transfer Facility as such stockholder may designate by making an appropriate
entry under "Special Payment Instructions." The undersigned recognizes that the
Company has no obligation, pursuant to the "Special Payment Instructions," to
transfer any Shares from the name of the registered holder(s) thereof if the
Company does not accept for payment any of the Shares so tendered.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
PRICE (IN DOLLARS) PER SHARE
AT WHICH SHARES ARE BEING TENDERED
(SEE INSTRUCTION 5)
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED, THERE IS NO VALID TENDER OF SHARES.
/ / $27.000 / / $28.000 / / $29.000
/ / $27.125 / / $28.125 / / $29.125
/ / $27.250 / / $28.250 / / $29.250
/ / $27.375 / / $28.375 / / $29.375
/ / $27.500 / / $28.500 / / $29.500
/ / $27.625 / / $28.625 / / $29.625
/ / $27.750 / / $28.750 / / $29.750
/ / $27.875 / / $28.875 / / $29.875
/ / $30.000
<CAPTION>
CHECK ONLY ONE BOX. IF
</TABLE>
ODD LOTS
(SEE INSTRUCTION 9)
This section is to be completed ONLY if Shares are being tendered by or on
behalf of a person owning beneficially an aggregate of fewer than 100 Shares as
of the close of business on August 8, 1995.
The undersigned either (check one box):
/ / was the beneficial owner of an aggregate of fewer than 100 Shares
(including Shares held in the SMART Plan (as defined in the Offer to
Purchase)) as of the close of business on August 8, 1995, 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 an aggregate of fewer than 100 Shares (including Shares held in
the SMART Plan) as of the close of business on August 8, 1995 and is
tendering all of such Shares.
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 6, 7 AND 8)
To be completed ONLY if the check
for the purchase price of Shares
purchased and/or certificates for Shares
not tendered or not purchased are to be
issued in the name of someone other than
the undersigned.
Issue / / check and/or
/ / certificates to:
Name
----------------------------------------
(Please Print)
Address
----------------------------------------
----------------------------------------
(Include Zip Code)
----------------------------------------
(Taxpayer Identification or Social
Security No.)
/ / Credit unpurchased Shares tendered
by book-entry transfer to the
Book-Entry Transfer Facility
account set forth below:
/ / MSTC / / PDTC / / DTC
----------------------------------------
Book Entry Transfer Facility Account
Number, if applicable
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 6, 7 AND 8)
To be completed ONLY if the check
for the purchase price of Shares
purchased and/or certificates for Shares
not tendered or not purchased are to be
mailed to someone other than the
undersigned or to the undersigned at an
address other than that shown below the
undersigned's signature(s).
Mail / / check and/or
/ / certificates to:
Name
----------------------------------------
(Please Print)
Address
----------------------------------------
----------------------------------------
(Include Zip Code)
<PAGE>
CONDITIONAL TENDER
A tendering stockholder may condition his tender of Shares upon the purchase
by the Company of a specified minimum number of the Shares tendered hereby, all
as described in the Offer to Purchase, particularly in Section 6 thereof. Unless
at least such minimum number of Shares is purchased by the Company pursuant to
the terms of the Offer, none of the Shares tendered hereby will be purchased. It
is the tendering stockholder's responsibility to calculate such minimum number
of Shares, and each stockholder is urged to consult his or her own tax advisor.
Unless this box has been completed and a minimum specified, the tender will be
deemed unconditional.
Minimum number of Shares that must be purchased, if any are purchased:
------------------------ Shares
SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
----------------------------------------------------
Signature(s) of Owner(s)
----------------------------------------------------
Dated
------------------------, 1995
Name(s)
--------------------------------------------------------------------------------
(Please Print)
--------------------------------------------------------------------------------
Capacity (full title)
--------------------------------------------------------------------------------
Address
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone No.
------------------------------------------------------------------------
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
certificate(s) or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, please set forth full title and see Instruction 6.)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 6)
Name of Firm
--------------------------------------------------------------------------------
Authorized Signature
--------------------------------------------------------------------------------
Dated
------------------------, 1995
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm that is a
bank, broker, dealer, credit union, savings association or other entity which is
a member in good standing of the Securities Transfer Agent's Medallion Program
(each, an "Eligible Institution"). Signatures on this Letter of Transmittal need
not be guaranteed (a) if this Letter of Transmittal is signed by the registered
holder(s) of the Shares (which term, for purposes of this document, shall
include any participant in one of the Book-Entry Transfer Facilities whose name
appears on a security position listing as the owner of Shares) tendered herewith
and such holder(s) have not completed the box entitled "Special Payment
Instructions" or the box entitled "Special Delivery Instructions" on this Letter
of Transmittal or (b) if such Shares are tendered for the account of an Eligible
Institution. See Instruction 6.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARES. This Letter of
Transmittal is to be used either if certificates are to be forwarded herewith or
if delivery of Shares is to be made by book-entry transfer pursuant to the
procedures set forth in Section 3 of the Offer to Purchase. Certificates for all
physically delivered Shares, or a confirmation of a book-entry transfer into the
Depositary's account at one of the Book-Entry Transfer Facilities of all Shares
delivered electronically, as well as a properly completed and duly executed
Letter of Transmittal (or facsimile thereof) and any other documents required by
this Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth on the front page of this Letter of Transmittal on or prior
to the Expiration Date (as defined in the Offer to Purchase). Stockholders who
cannot deliver their Shares and all other required documents to the Depositary
on or prior to the Expiration Date must tender their Shares pursuant to the
guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.
Pursuant to such procedure: (a) such tender must be made by or through an
Eligible Institution, (b) a properly completed and duly executed Notice of
Guaranteed Delivery substantially in the form provided by the Company (with any
required signature guarantees) must be received by the Depositary on or prior to
the Expiration Date and (c) the certificates for all physically delivered
Shares, or a confirmation of a book-entry transfer into the Depositary's account
at one of the Book-Entry Transfer Facilities of all Shares delivered
electronically, as well as a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) and any other documents required by this
Letter of Transmittal, must be received by the Depositary within five New York
Stock Exchange, Inc. trading days after the date of execution of such Notice of
Guaranteed Delivery, all as provided in Section 3 of the Offer to Purchase.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF CERTIFICATES FOR SHARES ARE
SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED,
IS RECOMMENDED.
Except as specifically permitted by Section 6 of the Offer to Purchase, no
alternative or contingent tenders will be accepted, and (except for Shares held
by participants in the SMART Plan (as defined in the Offer to Purchase)) no
fractional Shares will be purchased. By executing this Letter of Transmittal (or
facsimile thereof), the tendering stockholder waives any right to receive any
notice of the acceptance for payment of the Shares.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares represented by any certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
that are to be tendered in the box entitled "Number of Shares Tendered." In such
case, a new certificate for the remainder of the Shares represented by the old
certificate will be sent to the person(s) signing this Letter of Transmittal,
unless otherwise provided in the "Special Payment Instructions" or "Special
Delivery Instructions" boxes on this Letter of Transmittal, as promptly as
practicable following the expiration or termination of the Offer. All Shares
represented by certificates delivered to the Depositary will be deemed to have
been tendered unless otherwise indicated.
5. INDICATION OF PRICE AT WHICH SHARES ARE BEING TENDERED. For Shares to
be validly tendered, the stockholder must check the box indicating the price per
Share at which he or she is tendering Shares under "Price (In Dollars) Per Share
at Which Shares Are Being Tendered" on this Letter of Transmittal. ONLY ONE BOX
MAY BE CHECKED. If more than one box is checked, or if no box is checked, there
is no valid tender of Shares. A stockholder wishing to tender portions of his or
her Share holdings at different prices must complete a separate Letter of
Transmittal for each price at which he or she wishes to tender each such portion
of his or her Shares. The same Shares cannot be tendered (unless previously
validly withdrawn as provided in Section 4 of the Offer to Purchase) at more
than one price.
6. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificates without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby is held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.
<PAGE>
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock powers
are required unless payment of the purchase price is to be made to, or Shares
not tendered or not purchased are to be registered in the name of, any person
other than the registered holder(s). Signatures on any such certificates or
stock powers must be guaranteed by an Eligible Institution. See Instruction 1.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the certificates
for such Shares. Signature(s) on any such certificates or stock powers must be
guaranteed by an Eligible Institution. See Instruction 1.
If this Letter of Transmittal or any certificate or stock power is signed by
a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory to
the Company of the authority of such person so to act must be submitted.
7. STOCK TRANSFER TAXES. The Company will pay or cause to be paid any
stock transfer taxes with respect to the sale and transfer of any Shares to it
or its order pursuant to the Offer. If, however, payment of the purchase price
is to be made to, or Shares not tendered or not purchased are to be registered
in the name of, any person other than the registered holder(s), or if tendered
Shares are registered in the name of any person other than the person(s) signing
this Letter of Transmittal, the amount of any stock transfer taxes (whether
imposed on the registered holder(s), such other person or otherwise) payable on
account of the transfer to such person will be deducted from the purchase price
unless satisfactory evidence of the payment of such taxes, or exemption
therefrom, is submitted. EXCEPT AS PROVIDED IN THIS INSTRUCTION 7, IT WILL NOT
BE NECESSARY TO AFFIX TRANSFER TAX STAMPS TO THE CERTIFICATES REPRESENTING
SHARES TENDERED HEREBY.
8. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
purchase price of any Shares purchased is to be issued in the name of, and/or
any Shares not tendered or not purchased are to be returned to, a person other
than the person(s) signing this Letter of Transmittal or if the check and/or any
certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to an
address other than that shown above in the box captioned "Description of Shares
Tendered", then the boxes captioned "Special Payment Instructions" and/or
"Special Delivery Instructions" on this Letter of Transmittal should be
completed. Stockholders tendering Shares by book-entry transfer will have any
Shares not accepted for payment returned by crediting the account maintained by
such stockholder at the Book-Entry Transfer Facility from which such transfer
was made.
9. ODD LOTS. As described in the Offer to Purchase, if fewer than all
Shares validly tendered at or below the Purchase Price and not withdrawn on or
prior to the Expiration Date are to be purchased, the Shares purchased first
will consist of all Shares tendered by any stockholder who owned beneficially an
aggregate of fewer than 100 Shares (including Shares held in the SMART Plan) as
of the close of business on August 8, 1995 who validly and unconditionally
tendered all such Shares at or below the Purchase Price. Partial or conditional
tenders of Shares will not qualify for this preference. This preference will not
be available unless the box captioned "Odd Lots" in this Letter of Transmittal
and the Notice of Guaranteed Delivery, if any, is completed.
10. SUBSTITUTE FORM W-9. The tendering stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on
Substitute Form W-9, which is provided under "Important Tax Information" below.
Failure to provide the information on the Form may subject the tendering
stockholder to 31% federal income tax withholding on the payment of the purchase
price. The box in Part 2 of the Form may be checked if the tendering stockholder
has not been issued a TIN and has applied for a number or intends to apply for a
number in the near future. If the box in Part 2 is checked and the Depositary is
not provided with a TIN within 60 days, the Depositary will withhold 31% on all
payments of the purchase price thereafter until a TIN is provided to the
Depositary.
11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or
requests for assistance may be directed to the Information Agent or the Dealer
Manager at their respective telephone numbers and addresses listed below.
Requests for additional copies of the Offer to Purchase, this Letter of
Transmittal or other tender offer materials may be directed to the Information
Agent or the Dealer Manager and such copies will be furnished promptly at the
Company's expense. Stockholders may also contact their local broker, dealer,
commercial bank or trust company for assistance concerning the Offer.
12. IRREGULARITIES. All questions as to the Purchase Price, the form of
documents, and the validity, eligibility (including time of receipt) and
acceptance of any tender of Shares will be determined by the Company, in its
sole discretion, and its determination shall be final and binding. The Company
reserves the absolute right to reject any or all tenders of Shares that it
determines are not in proper form or the acceptance for payment of or payment
for Shares that may, in the opinion of the Company's counsel, be unlawful. The
Company also reserves the absolute right to waive any of the conditions to the
Offer or any defect or irregularity in any tender of Shares and the Company's
interpretation of the terms and conditions of the Offer (including these
instructions) shall be final and binding. 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 or any other person shall be under
<PAGE>
any duty to give notice of any defect or irregularity in tenders, nor shall any
of them incur any liability for failure to give any such notice. Tenders will
not be deemed to have been made until all defects and irregularities have been
cured or waived.
13. DIVIDENDS. On July 21, 1995, the Company's Board of Directors declared
a regular quarterly dividend of $0.10 per Share to be paid on August 31, 1995 to
stockholders of record on August 15, 1995. Stockholders who tender Shares and
have not withdrawn such Shares on or prior to the Expiration Date will be
entitled to receive such dividend. It is anticipated that the Shares will trade
ex-dividend beginning August 11, 1995.
14. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary. The stockholder will then be instructed as to
the steps that must be taken in order to replace the certificate(s). This Letter
of Transmittal and related documents cannot be processed until the procedures
for replacing lost or destroyed certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY THEREOF) TOGETHER
WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED
DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, OR THE NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE EXPIRATION DATE
(AS DEFINED IN THE OFFER TO PURCHASE).
IMPORTANT TAX INFORMATION
Under federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payer) with such
stockholder's correct TIN on Substitute Form W-9 below. If such stockholder is
an individual, the TIN is his social security number. For businesses and other
entities, the number is the employer identification number. If the Depositary is
not provided with the correct TIN, the stockholder may be subject to a $50
penalty imposed by the Internal Revenue Service. In addition, payments that are
made to such stockholder with respect to Shares purchased pursuant to the Offer
may be subject to backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a stockholder who is a foreign individual to qualify
as an exempt recipient, such stockholder must submit a statement, signed under
penalties of perjury, attesting to such individual's exempt status. Such
statements can be obtained from the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If federal income tax backup withholding applies, the Depositary is required
to withhold 31% of any payments made to the stockholder. Backup withholding is
not an additional tax. Rather, the tax liability of persons subject to federal
income tax backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of his or her correct TIN by completing the
form below certifying that the TIN provided on Substitute Form W-9 is correct
(or that such stockholder is awaiting a TIN) and that (1) the stockholder has
not been notified by the Internal Revenue Service that he or she is subject to
federal income tax backup withholding as a result of failure to report all
interest or dividends or (2) the Internal Revenue Service has notified the
stockholder that he or she is no longer subject to federal income tax backup
withholding.
<PAGE>
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the registered owner of the Shares.
If the Shares are in more than one name or are not in the name of the actual
owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.
<TABLE>
<CAPTION>
PAYOR'S NAME: THE FIRST NATIONAL BANK OF BOSTON
<S> <C> <C> <C> <C>
SUBSTITUTE Part 1--PLEASE PROVIDE YOUR TIN IN THE TIN -------------------------------------
Form W-9 BOX AT RIGHT AND CERTIFY BY SIGNING AND Social Security Number or
Department of the Treasury DATING BELOW. Employer Identification Number
Internal Revenue Service
PART 2
PAYOR'S REQUEST FOR TAXPAYER NAME (Please Print) AWAITING
IDENTIFICATION NUMBER (TIN) ----------------------------------------------------------- TIN
AND CERTIFICATION ADDRESS / /
-----------------------------------------------------------
CITY STATE ZIP CODE
Part 3--CERTIFICATION--UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT
(1) the number shown on this form is my correct taxpayer identification number (or
a TIN has not been issued to me but I have mailed or delivered an application to
receive a TIN or intend to do so in the near future),
(2) I am not subject to backup withholding either because I have not been notified
by the Internal Revenue Service (the "IRS") that I am subject to backup
withholding as a result of a failure to report all interest or dividends or
the IRS has notified me that I am no longer subject to backup withholding, and
(3) all other information provided on this form is true, correct and complete.
SIGNATURE ------------------------------- DATE -------------------------------
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.
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
THE INFORMATION AGENT:
MORROW & CO., INC.
909 Third Avenue, 20th Floor
New York, New York 10022
(212) 754-8000
Toll Free (800) 566-9058
Banks and Brokerage Firms please call
(800) 662-5200
THE DEALER MANAGER:
J.P. Morgan Securities Inc.
60 Wall Street
New York, NY 10260
(212) 648-7801 (collect)
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYOR--Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by one
hyphen: i.e., 00-0000000. The table below will help determine the number to give
the payor.
<TABLE>
<C> <S> <C>
------------------------------------------------------------
Give the
SOCIAL
SECURITY
number of--
For this type of account:
------------------------------------------------------------
1. Individual The individual
2. Two or more individuals The actual owner
(joint account) of the account or,
if combined funds,
the first
individual on the
account(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. a. The usual revocable The
savings trust (grantor is grantor-trustee(1)
also trustee)
b. So-called trust account The actual
that is not a legal or valid owner(1)
trust under State law
5. Sole proprietorship The owner(3)
------------------------------------------------------------
Give the
EMPLOYER
IDENTIFICATION
number of--
For this type of account:
------------------------------------------------------------
6. Sole proprietorship The owner(3)
7. A valid trust, estate or The legal
pension trust entity(4)
8. Corporate The corporation
9. Association, club, religious, The organization
charitable, educational or
other tax-exempt organization
10. Partnership The partnership
11. A broker or registered The broker or
nominee nominee
12. Account with the Department The public entity
of Agriculture in the name of
a public entity (such as a
state or local government,
school district, or prison)
that receives agricultural
program payments
</TABLE>
<TABLE>
<C> <S> <C>
------------------------------------------------------------
------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Show 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 indentifying number of the personal representative or
trustee unless the legal entity itself is not designated in the account
title.)
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER (TIN) ON SUBSTITUTE FORM W-9
(SECTION REFERENCES ARE TO THE INTERNAL REVENUE CODE)
PAGE 2
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.
OBTAINING A NUMBER
If you don't have a taxpayer identification number ("TIN"), apply for one
immediately. To apply, obtain Form SS-5, Application for a Social Security Card,
from your local office of the Social Security Administration, or Form SS-4,
Application for Employer Identification Number, from your local Internal Revenue
Service (the "IRS") office.
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 that 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.
(1) A corporation.
(2) An organization exempt from tax under section 501(a), or an individual
retirement plan ("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.
(6) An international organization or any of its agencies or
instrumentalities.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the U.S.
or a possession of the U.S.
(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 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 U.S. 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 PAYOR'S TRADE OR BUSINESS AND YOU HAVE
NOT PROVIDED YOUR CORRECT TIN TO THE PAYOR.
- 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 by 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 the regulations under those sections.
PRIVACY ACT NOTICE.--Section 6109 requires you to furnish your correct TIN
to persons who must file information returns with the 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
qualified to file a tax return. Payors must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish a
TIN to a payor. Certain penalties may also apply.
PENALTIES
(1) FAILURE TO FURNISH TIN.--If you fail to furnish your correct TIN to a
requester (the person asking you to furnish your TIN), you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis that results in no backup
withholding, you are subject to a $500 penalty.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT
YOUR TAX CONSULTANT OR THE IRS
<PAGE>
AMERICAN PRESIDENT COMPANIES, LTD.
OFFER TO PURCHASE FOR CASH
4,000,000 SHARES OF ITS COMMON STOCK
To Participants in the American President Companies, Ltd.
SMART Plan (the "SMART Plan"):
Participants in the SMART Plan who have accounts credited with shares of
Common Stock of American President Companies, Ltd. (the "Company"), par value
$.01 per share (the "Shares"), have the opportunity to determine if they wish to
have Fidelity Management Trust Company, as Trustee of the SMART Plan, tender
their shares pursuant to the Company's Offer to Purchase dated August 10, 1995
(the "Offer to Purchase") and the related Letter of Transmittal (which together
constitute the "Offer"). Only shares allocated to a participant's account as of
August 8, 1995 may be tendered. The number of shares allocated to your account
as of August 8, 1995 is specified on your mailing label.
Enclosed is a copy of an Election Form which, if you wish to tender your
Shares, you must fill in, sign and return promptly in accordance with the
instructions on the form. Also enclosed are the Offer to Purchase, Letter of
Transmittal and other related documents. THE LETTER OF TRANSMITTAL IS FURNISHED
TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER THE SHARES
HELD IN YOUR SMART PLAN ACCOUNT.
After you have read the enclosed documents, if you wish to sell your Shares,
you should complete the Election Form and send it to the Trustee in the enclosed
envelope. YOUR ELECTION FORM MUST BE RECEIVED BY THE TRUSTEE AT ITS ADDRESS SET
FORTH ON THE ELECTION FORM BY 11:59 P.M., BOSTON TIME, ON TUESDAY, SEPTEMBER 5,
1995. EVEN IF YOU DECIDE NOT TO PARTICIPATE IN THE OFFER, PLEASE COMPLETE AND
RETURN THE ELECTION FORM. IF YOU DO NOT RESPOND, OR IF YOUR ELECTION FORM IS NOT
RECEIVED BY THE DEADLINE SPECIFIED ABOVE, YOUR SHARES WILL NOT BE TENDERED.
In accordance with the provisions of the SMART Plan, the proceeds from the
sale of Shares in your account will not be distributed to you. Such proceeds
will be invested by the Trustee in the Fidelity Retirement Money Market
Portfolio. After you have received confirmation from the Trustee of the deposit
of any proceeds from the sale of Shares in your account into that Portfolio, you
may change the investment option in which any proceeds are invested by
telephoning Fidelity's Client Information Services at 1-800-835-5098 in
accordance with the normal procedures for changing investment options.
As more fully described in Section 4 of the Offer to Purchase, tenders will
be deemed irrevocable unless withdrawn by the dates specified therein. To be
effective, a notice of withdrawal must be in writing and must be received in a
timely manner by the Trustee at the following address: Fidelity Institutional
Operations Company, Proxy Department, P.O. Box 9107, Hingham, MA 02043-9848. Any
notice of withdrawal must specify your name, your social security number, the
full name of the SMART Plan, the number of Shares tendered and the number of
Shares to be withdrawn. Upon receipt of a timely written notice of withdrawal,
previous instructions to tender with respect to such Shares will be deemed
cancelled and the Trustee will not tender such Shares on your behalf. If you
wish to retender such Shares withdrawn, you may call Fidelity's Client
Information Services at 1-800-835-5098 to obtain a new Election Form.
If you beneficially owned fewer than 100 Shares as of the close of business
on August 8, 1995, then you may be entitled to tender your Shares without
proration, as described in Section 2 of the Offer to Purchase. To take advantage
of this preferential treatment, you must tender all of your Shares, check the
box captioned "Odd Lots" on the Election Form, and tender all of your Shares at
or below the Purchase Price, as defined in the Offer to Purchase.
If you have any questions about this information please contact Ms. Cecil
Van Wageningen, care of the Company, telephone number (510) 272-8191.
<PAGE>
ELECTION FORM
AMERICAN PRESIDENT COMPANIES, LTD.
SMART PLAN
("SMART PLAN")
BEFORE COMPLETING THIS FORM, READ
CAREFULLY THE ACCOMPANYING
OFFER TO PURCHASE
In accordance with the American President Companies, Ltd. (the "Company")
Offer to Purchase dated August 10, 1995, a copy of which I have received, I
hereby instruct Fidelity Management Trust Company, the Trustee of the SMART Plan
(the "Trustee"), to tender or not to tender all shares of Common Stock of the
Company, par value $.01 per share (the "Shares"), allocated to my account* in
the SMART Plan prior to the expiration of such Offer to Purchase, as follows:
/ / 1. I DO NOT WANT TO TENDER MY SHARES.
If you check this box, do not complete the remainder of this form except
for the signature lines.
/ / 2. I WANT TO TENDER % (INSERT A PERCENTAGE NOT TO EXCEED 100%) OF MY
SHARES AT THE PRICE INDICATED BELOW.
Please check the box indicating the price at which you are tendering
Shares. Only one box may be checked. If more than one box is checked, or
if no box is checked, there is no valid tender of Shares.
<TABLE>
<S> <C> <C>
/ / $27.000 / / $28.000 / / $29.000
/ / $27.125 / / $28.125 / / $29.125
/ / $27.250 / / $28.250 / / $29.250
/ / $27.375 / / $28.375 / / $29.375
/ / $27.500 / / $28.500 / / $29.500
/ / $27.625 / / $28.625 / / $29.625
/ / $27.750 / / $28.750 / / $29.750
/ / $27.875 / / $28.875 / / $29.875
/ / $30.000
</TABLE>
ODD LOTS
/ / By checking this box, the undersigned represents that the undersigned
owned beneficially an aggregate of fewer than 100 Shares (including
Shares held in the SMART Plan) as of the close of business on August 8,
1995 and is tendering all of such Shares.
PLEASE NOTE THAT IF NO INSTRUCTIONS ARE RECEIVED YOUR SHARES WILL NOT BE
TENDERED.
NEITHER THE COMPANY, ITS BOARD OF DIRECTORS NOR THE TRUSTEE MAKES ANY
RECOMMENDATION TO ANY SMART PLAN PARTICIPANT AS TO WHETHER TO TENDER OR REFRAIN
FROM TENDERING SHARES. YOUR INSTRUCTIONS TO THE TRUSTEE WILL BE CONFIDENTIALLY
TABULATED AND WILL NOT BE DIVULGED TO ANYONE AT THE COMPANY. THE COMPANY HAS
BEEN ADVISED THAT NO DIRECTOR OR EXECUTIVE OFFICER INTENDS TO TENDER SHARES
PURSUANT TO THE OFFER. EACH SMART PLAN PARTICIPANT MUST MAKE HIS OR HER OWN
DECISION AS TO WHETHER TO TENDER ALL OF HIS OR HER SHARES.
THIS FORM MUST BE RECEIVED BY THE TRUSTEE AT ITS ADDRESS SET FORTH ABOVE BY
11:59 P.M., BOSTON TIME, ON TUESDAY, SEPTEMBER 5, 1995.
--------------------------------------
Signature
--------------------------------------
Please print name
------------------------
*Only Shares allocated to a participant's account as of August 8, 1995 may be
tendered.
<PAGE>
[LETTER HEAD]
August 10, 1995
Dear Stockholder:
American President Companies, Ltd. is offering to purchase up to 4,000,000
shares of its common stock (representing approximately 13.6% of the currently
outstanding shares), at prices not greater than $30 nor less than $27 per share.
The Company is conducting the Offer through a procedure commonly referred to as
a "Dutch Auction." This procedure allows you to select the price within that
price range at which you are willing to sell your shares to the Company. Based
upon the number of shares tendered and the prices specified by the tendering
stockholders, the Company will determine the single per share price within that
price range that will allow it to buy 4,000,000 shares (or such lesser number of
shares that are properly tendered). All of the shares that are properly tendered
at prices at or below that purchase price (and are not withdrawn) will, subject
to possible proration and conditional tenders, be purchased for cash at that
purchase price, net to the selling stockholder. All other shares that have been
tendered and not purchased will be returned to the stockholder.
The Offer is explained in detail in the enclosed Offer to Purchase and
Letter of Transmittal. If you want to tender your shares, the instructions on
how to tender shares are also explained in detail in the enclosed materials. I
encourage you to read carefully these materials and the enclosed copy of the
Company's Form 10-Q for the second fiscal quarter of 1995 before making any
decision with respect to the Offer.
Sincerely,
JOHN M. LILLIE
CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER
<PAGE>
AMERICAN PRESIDENT COMPANIES, LTD.
NOTICE OF GUARANTEED DELIVERY
OF SHARES OF COMMON STOCK
This form, or a form substantially equivalent to this form, must be used to
accept the Offer (as defined below) if certificates for the shares of Common
Stock of American President Companies, Ltd. are not immediately available, if
the procedure for book-entry transfer cannot be completed on a timely basis, or
if time will not permit all other documents required by the Letter of
Transmittal to be delivered to the Depositary on or prior to the Expiration Date
(as defined in Section 1 of the Offer to Purchase defined below). Such form may
be delivered by hand or transmitted by mail, or (for Eligible Institutions only)
by telegram or facsimile transmission, to the Depositary. See Section 3 of the
Offer to Purchase. THE ELIGIBLE INSTITUTION, WHICH COMPLETES THIS FORM, MUST
COMMUNICATE THE GUARANTEE TO THE DEPOSITARY AND MUST DELIVER THE LETTER OF
TRANSMITTAL AND CERTIFICATES FOR SHARES TO THE DEPOSITARY WITHIN THE TIME SHOWN
HEREIN. FAILURE TO DO SO COULD RESULT IN A FINANCIAL LOSS TO SUCH ELIGIBLE
INSTITUTION.
To: The First National Bank of Boston, Depositary
BY FACSIMILE
BY MAIL: TRANSMISSION:
Shareholder Services (617) 575-2232
Division (617) 575-2233 BY HAND:
P.O. Box 1889 (for Eligible BancBoston Trust Company
Mail Stop 45-01-19 Institutions Only) Of New York
Boston, Massachusetts Confirm by Telephone 55 Broadway, Third Floor
02105 (617) 575-3400 New York, New York
BY OVERNIGHT COURIER:
Shareholder Services
Division
Mail Stop 45-01-19
150 Royall Street
Canton, Massachusetts
02021
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN ONE LISTED ABOVE
WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION
UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
Ladies and Gentlemen:
The undersigned hereby tenders to American President Companies, Ltd., a
Delaware corporation (the "Company"), upon the terms and subject to the
conditions set forth in the Offer to Purchase dated August 10, 1995 and the
related Letter of Transmittal (which together constitute the "Offer"), receipt
of which is hereby acknowledged, the number of shares of Common Stock, par value
$.01 per share (the "Shares"), of the Company listed below, pursuant to the
guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.
Number of Shares: --------------------------------------
-------------------------------------- SIGNATURE(S)
Certificate Nos. --------------------------------------
(if available): NAME(S) (PLEASE PRINT)
-------------------------------------- --------------------------------------
-------------------------------------- ADDRESS
If shares will be tendered by --------------------------------------
book-entry transfer:
Name of Tendering Institution: --------------------------------------
--------------------------------------
Account No. -------------- at --------------------------------------
(check one) AREA CODE AND TELEPHONE NUMBER
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust
Company
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
PRICE (IN DOLLARS) PER SHARE
AT WHICH SHARES ARE BEING TENDERED
-------------------------------------------------------------------------------------------
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED, THERE IS NO
PROPER TENDER OF SHARES.
<S> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------
/ / $27.000 / / $28.000 / / $29.000
/ / $27.125 / / $28.125 / / $29.125
/ / $27.250 / / $28.250 / / $29.250
/ / $27.375 / / $28.375 / / $29.375
/ / $27.500 / / $28.500 / / $29.500
/ / $27.625 / / $28.625 / / $29.625
/ / $27.750 / / $28.750 / / $29.750
/ / $27.875 / / $28.875 / / $29.875
/ / $30.000
-------------------------------------------------------------------------------------------
</TABLE>
-------------------------------------- --------------------------------------
CONDITIONAL TENDER ODD LOTS
UNLESS THIS BOX HAS BEEN To be completed ONLY if Shares are
COMPLETED AND A MINIMUM SPECIFIED, being tendered by or on behalf of
THE TENDER WILL BE DEEMED persons owning beneficially an
UNCONDITIONAL (SEE SECTIONS 6 and 13 aggregate of fewer than 100 Shares
OF THE OFFER TO PURCHASE). as of the close of business on
Minimum number of Shares that August 8, 1995.
must be purchased if any are The undersigned either (check one):
purchased: / / was the beneficial owner of an
------------------------------ Shares aggregate of fewer than 100 Shares
-------------------------------------- (including Shares held in the
American President Companies, Ltd.
SMART Plan) as of the close of
business on August 8, 1995, all of
which are 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 an
aggregate of fewer than 100 Shares
(including Shares held in the
American President Companies, Ltd.
SMART Plan) as of the close of
business on August 8, 1995 and is
tendering all of such Shares.
--------------------------------------
<PAGE>
GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a bank, broker, dealer, credit union,
savings association or other entity which is a member in good standing of the
Securities Transfer Agent's Medallion Program, guarantees (a) that the
above-named person(s) has a net long position in the Shares being tendered
within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act
of 1934, as amended, (b) that such tender of Shares complies with Rule 14e-4 and
(c) to deliver to the Depositary at one of its addresses set forth above
certificate(s) for the Shares tendered hereby, in proper form for transfer, or a
confirmation of the book-entry transfer of the Shares tendered hereby into the
Depositary's account at The Depository Trust Company, Midwest Securities Trust
Company or Philadelphia Depository Trust Company, in each case together with a
properly completed and duly executed Letter(s) of Transmittal (or facsimile(s)
thereof), with any required signature guarantee(s) and any other required
documents, all within five New York Stock Exchange, Inc. trading days after the
date hereof.
-------------------------------------- --------------------------------------
(Name of Firm) (Authorized Signature)
-------------------------------------- --------------------------------------
(Address) (Name)
-------------------------------------- --------------------------------------
(City, State, Zip Code) (Title)
--------------------------------------
(Area Code and Telephone No.)
Dated:
-------------------------------, 1995.
DO NOT SEND STOCK CERTIFICATES WITH THIS FORM.
YOUR STOCK CERTIFICATES MUST BE SENT WITH
THE LETTER OF TRANSMITTAL.
<PAGE>
AMERICAN PRESIDENT COMPANIES, LTD.
OFFER TO PURCHASE FOR CASH
4,000,000 SHARES OF ITS COMMON STOCK
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MID-
NIGHT, NEW YORK CITY TIME, ON FRIDAY, SEPTEMBER 8, 1995, UNLESS THE OFFER IS
EXTENDED.
August 10, 1995
To Brokers, Dealers, Commercial
Banks, Trust Companies and
Other Nominees:
In our capacity as Dealer Manager, we are enclosing the material listed
below relating to the offer of American President Companies, Ltd., a Delaware
corporation (the "Company"), to purchase 4,000,000 shares of its Common Stock,
par value $.01 per share (the "Shares"), at prices not greater than $30 nor less
than $27 per Share, specified by tendering stockholders, net to the seller in
cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase and in the related Letter of Transmittal (which together constitute the
"Offer"). The Company will determine a single price (not greater than $30 nor
less than $27 per Share) that it will pay for Shares validly tendered pursuant
to the Offer (the "Purchase Price"), taking into account the number of Shares so
tendered and the prices specified by tendering stockholders. The Company will
select the Purchase Price that will enable it to purchase 4,000,000 Shares (or
such lesser number of Shares as is validly tendered at prices not greater than
$30 nor less than $27 per Share) pursuant to the Offer. The Company will
purchase all Shares validly tendered at prices at or below the Purchase Price
and not withdrawn, upon the terms and subject to the conditions of the Offer,
including the provisions relating to proration and conditional tenders described
in the Offer to Purchase.
The Purchase Price will be paid in cash, net to the seller, with respect to
all Shares purchased. Shares tendered at prices in excess of the Purchase Price
and Shares not purchased because of proration and conditional tenders will be
returned.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED.
We are asking you to contact your clients for whom you hold Shares
registered in your name (or in the name of your nominee) or who hold Shares
registered in their own names. Please bring the Offer to their attention as
promptly as possible. The Company will, upon request, reimburse you for
reasonable and customary handling and mailing expenses incurred by you in
forwarding any of the enclosed materials to your clients.
For your information and for forwarding to your clients, we are enclosing
the following documents:
1. The Offer to Purchase dated August 10, 1995.
2. The Letter of Transmittal for your use and for the information of your
clients.
3. A letter to stockholders of the Company from the Chairman of the Board
and Chief Executive Officer of the Company.
4. The Company's quarterly report on Form 10-Q for the 12-week period ended
June 30, 1995.
5. The Notice of Guaranteed Delivery to be used to accept the Offer if the
Shares and all other required documents cannot be delivered to the Depositary by
the Expiration Date (as defined in the Offer to Purchase).
6. A letter which may be sent to your clients for whose accounts you hold
Shares registered in your name or in the name of your nominee, with space
provided for obtaining such clients' instructions with regard to the Offer.
<PAGE>
7. Guidelines of the Internal Revenue Service for Certification of Taxpayer
Identification Number on Substitute Form W-9 providing information relating to
backup federal income tax withholding.
8. A return envelope addressed to The First National Bank of Boston, the
Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, SEPTEMBER 8, 1995, UNLESS THE OFFER IS EXTENDED.
The Company will not pay any fees or commissions to any broker, dealer or
other person for soliciting tenders of Shares pursuant to the Offer (other than
the Dealer Manager). The Company will, upon request, reimburse brokers, dealers,
commercial banks and trust companies for reasonable and customary handling and
mailing expenses incurred by them in forwarding materials relating to the Offer
to their customers. The Company will pay all stock transfer taxes applicable to
its purchase of Shares pursuant to the Offer, subject to Instruction 7 of the
Letter of Transmittal.
As described in the Offer to Purchase, if more than 4,000,000 Shares have
been validly tendered at or below the Purchase Price and not withdrawn on or
prior to the Expiration Date, as defined in Section 1 of the Offer to Purchase,
the Company will purchase Shares in the following order of priority: (a) all
Shares validly tendered at or below the Purchase Price and not withdrawn on or
prior to the Expiration Date by any stockholder who owned beneficially an
aggregate of fewer than 100 Shares (including any Shares held in the American
President Companies, Ltd. SMART Plan) as of the close of business on August 8,
1995, and who validly tenders all of such Shares (partial and conditional
tenders will not qualify for this preference) and completes the box captioned
"Odd Lots" on the Letter of Transmittal and, if applicable, the Notice of
Guaranteed Delivery; and (b) after purchase of all the foregoing Shares, subject
to the conditional tender provisions described in Section 6 of the Offer to
Purchase, all other Shares validly tendered at or below the Purchase Price and
not withdrawn on or prior to the Expiration Date on a pro rata basis, if
necessary (with appropriate adjustments to avoid purchases of fractional
Shares).
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY STOCKHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. STOCKHOLDERS MUST
MAKE THEIR OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY
SHARES TO TENDER. THE COMPANY HAS BEEN ADVISED THAT NO DIRECTOR OR EXECUTIVE
OFFICER INTENDS TO TENDER SHARES PURSUANT TO THE OFFER.
Any questions or requests for assistance or additional copies of the
enclosed materials may be directed to the Information Agent or the Dealer
Manager at its address and telephone number set forth on the back cover of the
enclosed Offer to Purchase.
Very truly yours,
J. P. MORGAN SECURITIES INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
THE AGENT OF THE COMPANY, THE DEALER MANAGER, THE INFORMATION AGENT OR THE
DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
<PAGE>
AMERICAN PRESIDENT COMPANIES, LTD.
OFFER TO PURCHASE FOR CASH
4,000,000 SHARES OF ITS COMMON STOCK
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, SEPTEMBER 8, 1995 UNLESS THE OFFER IS EXTENDED
TO OUR CLIENTS:
Enclosed for your consideration are the Offer to Purchase dated August 10,
1995 and the related Letter of Transmittal (which together constitute the
"Offer") setting forth an offer by American President Companies, Ltd., a
Delaware corporation (the "Company"), to purchase up to 4,000,000 shares of its
Common Stock, par value $.01 per share (the "Shares"), at prices not greater
than $30 nor less than $27 per Share, net to the seller in cash, specified by
tendering stockholders, upon the terms and subject to the conditions of the
Offer. The Company will determine a single per Share price (not greater than $30
nor less than $27 per Share) that it will pay for the Shares validly tendered
pursuant to the Offer and not withdrawn (the "Purchase Price"), taking into
account the number of Shares so tendered and the prices specified by tendering
stockholders. The Company will select the Purchase Price that will enable it to
purchase 4,000,000 Shares (or such lesser number of Shares as are validly
tendered at prices not greater than $30 nor less than $27 per Share) pursuant to
the Offer. The Company will purchase all Shares validly tendered at prices at or
below the Purchase Price and not withdrawn, upon the terms and subject to the
conditions of the Offer, including the provisions thereof relating to proration
and conditional tenders.
We are the holder of record of Shares held for your account. A tender of
such Shares can be made only by us as the holder of record and pursuant to your
instructions. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION
ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the Letter of Transmittal.
Your attention is invited to the following:
(1) You may tender Shares at prices (in multiples of $.125), not greater
than $30 nor less than $27 per Share, as indicated in the attached
instruction form, net to you in cash.
(2) The Offer is for up to 4,000,000 Shares, constituting approximately
13.6% of the total Shares outstanding as of August 8, 1995. Although it has
no present intention of so doing, the Company reserves the right to purchase
more than 4,000,000 Shares pursuant to the Offer. The Offer is not
conditioned upon any minimum number of Shares being tendered.
(3) The Offer, Proration Period and Withdrawal Rights will expire at
12:00 Midnight, New York City time, on Friday, September 8, 1995, unless the
Offer is extended. Your instructions to us should be forwarded to us in
ample time to permit us to submit a tender on your behalf. If you would like
to withdraw your Shares that we have tendered, you can withdraw them so long
as the Offer remains open or any time after the expiration of forty business
days from the commencement of the Offer if they have not been accepted for
payment.
(4) As described in the Offer to Purchase, if more than 4,000,000 Shares
have been validly tendered at or below the Purchase Price and not withdrawn
on or prior to the Expiration Date, as defined in Section 1 of the Offer to
Purchase, the Company will purchase Shares in the following order of
priority: (a) all Shares validly tendered at or below the Purchase Price and
not withdrawn on or prior to the Expiration Date by any stockholder who
owned beneficially an aggregate of fewer than 100 Shares (including any
Shares held in the American President Companies, Ltd. SMART Plan (the "SMART
Plan")) as of the close of business on August 8, 1995 and who validly
tenders all of such Shares (partial and conditional tenders will not qualify
for this preference) and completes the box captioned
<PAGE>
"Odd Lots" on the Letter of Transmittal (or on the applicable Election Form
for SMART Plan participants) and, if applicable, the Notice of Guaranteed
Delivery; and (b) after purchase of all the foregoing Shares, subject to the
conditional tender provisions described in Section 6 of the Offer to
Purchase, all other Shares validly tendered at or below the Purchase Price
and not withdrawn on or prior to the Expiration Date on a pro rata basis, if
necessary (with appropriate adjustments to avoid purchases of fractional
Shares). See Section 1 of the Offer to Purchase for a discussion of
proration.
(5) Any stock transfer taxes applicable to the sale of Shares to the
Company pursuant to the Offer will be paid by the Company, except as
otherwise provided in Instruction 7 of the Letter of Transmittal. You will
not be obligated to pay any brokerage fees or commissions if you tender
Shares.
(6) If you owned beneficially an aggregate of fewer than 100 Shares
(including Shares held in the SMART Plan) as of the close of business on
August 8, 1995, and you instruct us to tender at or below the Purchase Price
on your behalf all such Shares on or prior to the Expiration Date and check
the box captioned "Odd Lots" in the instruction form, all such Shares will
be accepted for purchase before proration, if any, of the purchase of other
tendered Shares.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY STOCKHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. STOCKHOLDERS MUST
MAKE THEIR OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY
SHARES TO TENDER. THE COMPANY HAS BEEN ADVISED THAT NO DIRECTOR OR EXECUTIVE
OFFICER INTENDS TO TENDER SHARES PURSUANT TO THE OFFER.
If you wish to have us tender any or all of your Shares held by us for your
account upon the terms and subject to the conditions set forth in the Offer,
please so instruct us by completing, executing, detaching and returning to us
the instruction form on the detachable part hereof. An envelope to return your
instructions to us is enclosed. If you authorize tender of your Shares, all such
Shares will be tendered unless otherwise specified on the detachable part
hereof. Your instructions should be forwarded to us in ample time to permit us
to submit a tender on your behalf by the expiration of the Offer.
A tendering stockholder may condition the tender of Shares upon the purchase
by the Company of a specified minimum number of Shares tendered, all as
described in Section 6 of the Offer to Purchase. Unless such specified minimum
is purchased by the Company pursuant to the terms of the Offer to Purchase and
the related Letter of Transmittal, none of the Shares tendered by the
stockholder will be purchased. If you wish us to condition your tender upon the
purchase of a specified minimum number of Shares, please complete the box
entitled "Conditional Tender" on the instruction form. It is the tendering
stockholder's responsibility to calculate such minimum number of Shares, and you
are urged to consult your own tax advisor.
The Offer is being made to all holders of Shares. The Company is not aware
of any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to a valid state statute. If the Company becomes aware
of any valid state statute prohibiting the making of the Offer, the Company will
make a good faith effort to comply with such statute. If, after such good faith
effort, the Company cannot comply with such statute, the Offer will not be made
to, nor will tenders be accepted from or on behalf of, holders of Shares in such
state. In those jurisdictions whose securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer shall be deemed
to be made on behalf of the Company by the Dealer Manager or one or more
registered brokers or dealers licensed under the laws of such jurisdictions.
<PAGE>
INSTRUCTIONS
WITH RESPECT TO OFFER TO PURCHASE FOR CASH
4,000,000 SHARES OF COMMON STOCK OF
AMERICAN PRESIDENT COMPANIES, LTD.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase dated August 10, 1995, and the related Letter of Transmittal (which
together constitute the "Offer") in connection with the offer by American
President Companies, Ltd. to purchase up to 4,000,000 shares of its Common
Stock, par value $.01 per share (the "Shares"), at prices not greater than $30
nor less than $27 per Share, net to the undersigned in cash, specified by the
undersigned.
This will instruct you to tender to the Company the number of Shares
indicated below (or, if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, at the price per Share indicated
below, upon the terms and subject to the conditions of the Offer.
CONDITIONAL TENDER
By completing this box, the undersigned conditions the tender authorized
hereby on the following minimum number of Shares being purchased if any are
purchased:
------------------ Shares
Unless this box is completed, the tender authorized hereby will be made
unconditionally.
<TABLE>
<CAPTION>
PRICE (IN DOLLARS) PER SHARE
AT WHICH SHARES ARE BEING TENDERED
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED,
THERE IS NO VALID TENDER OF SHARES.
<C> <S> <C> <C> <C>
/ / $27.000 / / $28.000 / / $29.000
/ / $27.125 / / $28.125 / / $29.125
/ / $27.250 / / $28.250 / / $29.250
/ / $27.375 / / $28.375 / / $29.375
/ / $27.500 / / $28.500 / / $29.500
/ / $27.625 / / $28.625 / / $29.625
/ / $27.750 / / $28.750 / / $29.750
/ / $27.875 / / $28.875 / / $29.875
/ / $30.000
</TABLE>
ODD LOTS
/ / By checking this box, the undersigned represents that the undersigned
owned beneficially an aggregate of fewer than 100 Shares (including Shares
held in the American President Companies, Ltd. SMART Plan) as of the close
of business on August 8, 1995 and is tendering all of such Shares.
<TABLE>
<S> <C> <C>
Number of Shares to be Tendered: ------------------------------------------
------------------------ Shares* SIGNATURE(S)
Dated: --------------, 1995. Name ------------------------------------
Address ----------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
SOCIAL SECURITY OR TAX ID NO.
------------------
* Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
</TABLE>
<PAGE>
THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF
AN OFFER TO SELL SHARES. THE OFFER IS MADE SOLELY BY THE OFFER
TO PURCHASE DATED AUGUST 10, 1995 AND THE RELATED LETTER OF
TRANSMITTAL. THE OFFER IS BEING MADE TO ALL HOLDERS OF SHARES.
THE OFFER IS NOT BEING MADE TO, NOR WILL TENDERS BE ACCEPTED
FROM, OR ON BEHALF OF, HOLDERS OF SHARES IN ANY JURISDICTION
IN WHICH MAKING OR ACCEPTING THE OFFER WOULD VIOLATE THAT
JURISDICTION'S LAWS. IN THOSE JURISDICTIONS WHOSE
SECURITIES, BLUE SKY OR OTHER LAWS REQUIRE THE
OFFER TO BE MADE BY A LICENSED BROKER OR
DEALER, THE OFFER SHALL BE DEEMED TO BE
MADE ON BEHALF OF THE COMPANY BY J.P.
MORGAN SECURITIES INC. OR ONE OR MORE
REGISTERED BROKERS OR DEALERS LICENSED
UNDER THE LAWS OF SUCH JURISDICTIONS.
NOTICE OF OFFER TO PURCHASE FOR CASH
BY
AMERICAN PRESIDENT COMPANIES, LTD.
4,000,000 SHARES OF ITS COMMON STOCK
AT A PURCHASE PRICE NOT GREATER THAN
$30 NOR LESS THAN $27 PER SHARE
American President Companies, Ltd., a Delaware corporation (the "Company"),
invites its stockholders to tender shares of its Common Stock, par value $.01
per share (the "Shares"), at prices, not greater than $30 nor less than $27
per Share, net to the seller in cash, specified by such stockholders, upon the
terms and subject to the conditions set forth in the Offer to Purchase dated
August 10, 1995 (the "Offer to Purchase") and in the related Letter of
Transmittal (which together constitute the "Offer").
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS
WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, SEPTEMBER 8, 1995, UNLESS THE
OFFER IS EXTENDED.
The Company will determine a single per share price (not greater than $30
nor less than $27 per Share) that it will pay for Shares validly tendered
pursuant to the Offer and not withdrawn (the "Purchase Price"), taking into
account the number of Shares so tendered and the prices specified by tendering
stockholders. The Company will select the Purchase Price that will enable it to
buy 4,000,000 Shares (or such lesser number of Shares as are validly tendered at
prices not greater than $30 nor less than $27 per Share) pursuant to the Offer.
The Company will purchase all Shares validly tendered at prices not greater than
$30 nor less than $27 per Share pursuant to the Offer. The Company will
purchase all Shares validly tendered at prices at or below the Purchase Price
and not withdrawn, upon the terms and subject to the conditions of the Offer,
including the provisions relating to proration and conditional tenders described
below. The Purchase Price will be paid in cash, net to the seller, with respect
to all Shares purchased. SHARES TENDERED AT PRICES IN EXCESS OF THE PURCHASE
PRICE AND SHARES NOT PURCHASED BECAUSE OF PRORATION AND CONDITIONAL TENDER WILL
BE RETURNED.
Upon the terms and subject to the conditions of the Offer, if more than
4,000,000 Shares have been validly tendered at or below the Purchase Price and
not withdrawn on or prior to the Expiration Date, the
<PAGE>
Company will purchase Shares in the following order of priority: (a) first, all
Shares validly tendered at or below the Purchase Price and not withdrawn on or
prior to the Expiration Date by any stockholder who owned beneficially an
aggregate of fewer than 100 Shares (including any Shares held in the American
President Companies, Ltd. SMART Plan (the "SMART Plan")) as of the close of
business on August 8, 1995 and who validly tenders all of such Shares
(partial and conditional tenders will not qualify for this preference) and
completes the box captioned "Odd Lots" on the Letter of Transmittal (or on the
respective Election Form for SMART Plan participants) and, if applicable,
the Notice of Guaranteed Delivery, and (b) then, after purchase of all of the
foregoing Shares, subject to the conditional tender provisions described in
Section 6 of the Offer to Purchase, all other Shares validly tendered at or
below the Purchase Price and not withdrawn on or prior to the Expiration Date
on a pro rata basis, if necessary (with appropriate adjustments to avoid
purchases of fractional Shares).
The Company believes that the purchase of its Shares at this time
represents an attractive investment opportunity that will benefit the Company
and its remaining stockholders. The Offer will afford to stockholders who are
considering the sale of all or a portion of their Shares the opportunity to
determine the price at which they are willing to sell their Shares and, in the
event the Company accepts such Shares, to dispose of Shares without the usual
transaction costs associated with a market sale. The Offer will also allow
qualifying stockholders owning beneficially fewer than 100 Shares to avoid the
payment of brokerage commissions and the applicable odd lot discount payable on
a sale of Shares in a transaction effected on a securities exchange.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY STOCKHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. EACH STOCKHOLDER
MUST MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES TO TENDER AND AT WHAT PRICE. THE COMPANY HAS BEEN INFORMED
THAT NO DIRECTOR OR EXECUTIVE OFFICER INTENDS TO TENDER SHARES PURSUANT TO
THE OFFER.
Tenders of Shares made pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date. Thereafter, such tenders are irrevocable, except
that they may be withdrawn after October 5, 1995 unless theretofore accepted
for payment as provided in the Offer to Purchase. To be effective, a written or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of the Offer to
Purchase and must specify the name of the person who tendered the Shares to be
withdrawn and the number of Shares to be withdrawn. If the Shares to be
withdrawn have been delivered to the Depositary, a signed notice of withdrawal
with signatures guaranteed by an Eligible Institution (as defined in Section 3
of the Offer to Purchase) (except in the case of Shares tendered by an Eligible
Institution) must be submitted prior to the release of such Shares. In
addition, such notice must specify, in the case of Shares tendered by delivery
of certificates, the name of the registered holder (if different from that of
the tendering stockholder) and the serial numbers shown on the particular
certificates evidencing the Shares to be withdrawn or, in the case of Shares
tendered by book-entry transfer, the name and number of the account at one of
the Book-Entry Transfer Facilities (as defined in the Offer to Purchase) to be
credited with the withdrawn Shares. Withdrawals may not be rescinded, and
Shares withdrawn will thereafter be deemed not validly tendered for purposes of
the Offer. However, withdrawn Shares may be retendered by again following one
of the procedures described in Section 8 of the Offer to Purchase at any time
prior to the Expiration Date.
The information required to be disclosed by Rule 13e-4(d)(1) of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended, is
contained in the Offer to Purchase and is incorporated herein by reference.
Copies of the Offer to Purchase and the related Letter of Transmittal are
being mailed to record holders of Shares and will be furnished to brokers, banks
and similar persons whose names, or the names of whose nominees, appear on the
Company's stockholder list or, if applicable, who are listed as participants in
a clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION THAT SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
<PAGE>
Any questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective telephone numbers and addresses
listed below. Requests for additional copies of the Offer to Purchase, the
Letter of Transmittal or other tender offer materials may be directed to the
Information Agent or the Dealer Manager and such copies will be furnished
promptly at the Company's expense. Stockholders may also contact their local
broker, dealer, commercial bank or trust company for assistance concerning the
Offer.
THE INFORMATION AGENT FOR THE OFFER IS
MORROW & CO., INC.
909 Third Avenue
20th Floor
New York, New York 10022
212-754-8000
Toll Free 800-566-9058
Banks and Brokerage
Firms please call:
800-662-5200
The Dealer Manager for the Offer is
J.P. MORGAN SECURITIES, INC.
August 10, 1995
<PAGE>
News Release
AMERICAN PRESIDENT COMPANIES, LTD. BUYS BACK STOCK
OAKLAND, Calif., Aug. 8/PRNewswire/ -- American President
Companies, Ltd. (NYSE: APS) announced that today its Board of Directors
approved and the company accomplished the repurchase of 2 million shares
of its common stock from partnerships affiliated with Hellman &
Friedman, a San Francisco-based investment firm. The price of the
shares repurchased was $27 per share. The common stock closed today on
the New York Stock Exchange at $28 per share.
F. Warren Hellman and Tully M. Friedman, principals of Hellman &
Friedman, serve on the company's Board of Directors. After the
transaction, partnerships affiliated with Hellman & Friedman own
approximately 2 million shares of the company's common stock, and
F. Warren Hellman and Tully M. Friedman will continue to serve as Directors
of the company. Messrs. Hellman and Friedman stated that the remaining
shares owned by the Hellman & Friedman - affiliated partnerships will
continue to be held for investment purposes.
The company also announced a "Dutch Auction" self tender offer for
4 million shares of its common stock. The offer will commence within
the next several days and will expire at midnight, Eastern Daylight
Time, on the 20th business day after commencement of the offer, unless
the offer is extended. Under the terms of the offer, the company will
invite stockholders to tender shares at prices between $27 and $30 per
share, as specified by the tendering stockholders. Based upon the
number of shares tendered and the prices specified by the tendering
stockholders, the company will determine the single per share price
within that price range that will allow the company to buy 4 million
shares or such lesser number of shares as are properly tendered.
J.P. Morgan Securities Inc. will act as dealer manager in the offer.
Morrow & Co., Inc. will act as the information agent for the offer.
-more-
<PAGE>
Chairman John M. Lillie stated that the repurchase from the Hellman
& Friedman - affiliated partnerships was funded from cash on hand and
that funds for repurchases pursuant to the tender offer will also be
provided by existing cash. He said that the repurchase of common stock
represented an attractive investment opportunity for the company. All
repurchased shares will be retired. The company will have approximately
25.4 million shares of common stock outstanding after repurchasing the
shares from the Hellman & Friedman - affiliated partnerships and if all
4 million shares are purchased in the tender offer.
American President Companies, Ltd. provides container transportation
and related services in Asia, the Americas, Europe and the Middle East
through an intermodal system combining ocean, rail and truck transportation.
-0- 8/8/95
/CONTACT: Thomas R. Meier of American President Companies,
510-272-8284/(APS)
-0-
<PAGE>
AMERICAN PRESIDENT COMPANIES, LTD.
News Release
AMERICAN PRESIDENT COMPANIES, LTD. ANNOUNCES
COMMENCEMENT OF OFFER TO REPURCHASE UP
TO 4 MILLION SHARES OF ITS COMMON STOCK
FOR IMMEDIATE RELEASE
---------------------
Thomas R. Meier
Contact: (510) 272-8284
------------------
OAKLAND, California, August 10, 1995 . . . American President Companies,
Ltd. (NYSE:APS) today announced the commencement of its previously announced
"Dutch Auction" self tender for up to 4 million shares of its common stock.
The offer will expire at midnight, Eastern Daylight Time, on September 8, 1995,
unless the offer is extended. Under the terms of the offer, the company will
invite stockholders to tender shares at prices between $27.00 and $30.00 per
share, as specified by the tendering stockholders. Based upon the number of
shares tendered and the prices specified by the tendering stockholders, the
company will determine the single per share price within that price range that
will allow the company to buy 4 million shares or such lesser number of shares
as are properly tendered. The company expects to fund the repurchase of the
shares primarily from cash on hand. The company's common stock price closed
at $28.00 on the New York Stock Exchange on August 9, 1995.
J.P. Morgan Securities Inc. is acting as dealer manager in the offer.
Morrow & Co., Inc. is acting as the information agent for the offer.
American President Companies, Ltd. and its subsidiaries provide
container transportation and related services in Asia, the Americas, Europe
and the Middle East through an intermodal system combining ocean, rail and
truck transportation.
# # #
Common Stock Ticker Symbol: APS
