<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION
14(d)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
FLUOR DANIEL GTI, INC.
(Name of Subject Company)
INTERNATIONAL TECHNOLOGY CORPORATION
TIGER ACQUISITION CORPORATION
(Bidder)
COMMON STOCK, PAR VALUE $.001 PER SHARE
(TITLE OF CLASS OF SECURITIES)
34386C 10 6
(CUSIP Number of Class of Securities)
ANTHONY J. DELUCA
PRESIDENT AND CHIEF EXECUTIVE OFFICER
INTERNATIONAL TECHNOLOGY CORPORATION
2790 MOSSIDE BOULEVARD
MONROEVILLE, PENNSYLVANIA 15146-2792
(412) 372-7701
(Name, Address and Telephone Number of Person Authorizing to Receive Notices
and Communications on Behalf of Bidder)
COPIES TO:
PETER F. ZIEGLER GORDON H. HAYES, JR., ESQ.
GIBSON, DUNN & CRUTCHER LLP TESTA HURWITZ & THIBEAULT LLP
333 S. GRAND AVENUE HIGH STREET TOWER
LOS ANGELES, CALIFORNIA 90071 125 HIGH STREET
(213) 229-7000 BOSTON, MASSACHUSETTS 02110
(617) 248-7000
Calculation of Filing Fee
================================================================================
TRANSACTION VALUATION AMOUNT OF FILING FEE
- --------------------------------------------------------------------------------
$69,397,069.50* $13,885**
- --------------------------------------------------------------------------------
* For purposes of fee calculation only. The total transaction value is based
on 8,411,766 Shares, the number of shares for which the Offer (as defined
herein) is made, multiplied by the offer price of $8.25 per Share.
** The amount of the filing fee calculated in accordance with Regulation 240.0-
11 of the Securities Exchange Act of 1934 equals 1/50 of 1% of the value of
the Shares to be purchased.
[ ] 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 Filing party: Not Applicable
Form or registration no.: Not Applicable Date filed: Not Applicable
<PAGE>
SCHEDULE 14D-1
- -----------------------
CUSIP NO. 34386C 10 6
- -----------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSONS
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Parent: I.R.S. No. 33-0001212
Tiger Acquisition Corporation: I.R.S. No.: 25-1820341
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [x]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
SC, BK and AF
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(e) or 2(f) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
International Technology Corporation - Incorporated in the State of
Delaware
Tiger Acquisition Corporation - Incorporated in the State of Delaware
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7
None
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
8
N/A [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
9
N/A
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
10
International Technology Corporation - CO
Tiger Acquisition Corporation - CO
- ------------------------------------------------------------------------------
<PAGE>
INTRODUCTION
This Tender Offer Statement on Schedule 14D-1 (this "Statement") relates to
the offer by Tiger Acquisition Corporation, a Delaware corporation
("Purchaser"), and a wholly-owned subsidiary of International Technology
Corporation, a Delaware corporation doing business as The IT Group, Inc.
("Parent"), to purchase all of the issued and outstanding shares (the "Shares")
of common stock, par value $.001 per share (the "Common Stock"), of Fluor Daniel
GTI, Inc., a Delaware corporation (the "Company"), at a price of $8.25 per
Share, net to each seller in cash, without interest (such amount, or any greater
amount per share paid pursuant to the Offer (as defined below) being hereinafter
referred to as the "Offer Price"), upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated as of November 3, 1998 (the "Offer to
Purchase"), and the related Letter of Transmittal (the "Letter of Transmittal,"
which, together with the Offer to Purchase, constitute the "Offer"), copies of
which are attached hereto as Exhibits (a)(1) and (a)(2), respectively. The
Offer is being made pursuant to the terms of the Agreement and Plan of Merger
(the "Merger Agreement"), dated as of October 27, 1998, by and among Parent,
Purchaser, the Company, and Fluor Daniel, Inc., a California corporation ("FD"),
which provides, among other things, for the commencement of the Offer by
Purchaser and further provides that, following the purchase of Shares pursuant
to the Offer, Purchaser will be merged with and into the Company (the "Merger"),
with the Company continuing as the surviving corporation. The consummation of
the Merger is subject to the satisfaction or, if permissible, waiver of certain
conditions, including approval of the adoption of the Merger Agreement by the
requisite vote of the stockholders of the Company. If Purchaser acquires the
Minimum Share Number (as defined below) of Shares, it will acquire sufficient
Shares in the Offer to assure such stockholder approval. If Purchaser acquires
at least 90% of the Shares in the Offer, under Delaware law it will be able to
consummate the Merger without a vote of the Company's stockholders
At the effective time of the Merger (the "Effective Time"), each issued and
outstanding Share (other than Shares held by Parent, Purchaser or any other
direct or indirect subsidiary of Parent or Shares that are owned by the Company
or any direct or indirect subsidiary of the Company, which will be canceled and
retired without any payment with respect thereto, or Shares (the "Dissenting
Shares") with respect to which the holder properly exercises such holder's
appraisal rights in accordance with the Delaware General Corporation Law
("DGCL") (collectively, the "Excluded Shares")) shall be converted into, and
become exchangeable for the Offer Price, and the Offer Price multiplied by the
number of such Shares shall be referred to as the "Merger Consideration."
At the Effective Time, all Shares other than Dissenting Shares shall be
canceled and retired and shall cease to exist, and each certificate formerly
representing any of such Shares (other than any Excluded Shares) shall
thereafter represent only the right to receive the Merger Consideration.
The Offer is conditioned upon, among other things, there being validly
tendered prior to the Expiration Date and not withdrawn at least 4,400,000
Shares owned by FD, representing approximately 52.3% of the Shares as of October
30, 1998, and at least a majority of the
<PAGE>
Shares not owned by FD (the "Minimum Share Number"). The Offer is also subject
to certain other conditions set forth under the caption "THE TENDER OFFER--19.
Certain Conditions of the Offer" in the Offer to Purchase.
The information contained in this Schedule 14D-1 concerning the Company,
including, without limitation, information concerning the deliberations,
approvals and recommendations of the Special Committee of the Board of Directors
of the Company (the "Special Committee") and the full Board of Directors of the
Company in connection with the transaction, the opinion of the financial advisor
to such Special Committee and Board of Directors, and the Company's capital
structure and historical and projected financial information, was supplied by
the Company. The information contained in the Offer to Purchase concerning the
Offer, the Merger, Parent and Purchaser was supplied by Purchaser.
ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.
(a) The name of the subject company is Fluor Daniel GTI, Inc., a Delaware
corporation, which has its principal executive offices at 100 River Ridge Drive,
Norwood, Massachusetts 02062.
(b) The class of equity securities being sought is the Company's Common
Stock. The information set forth in the Offer to Purchase under the caption
"INTRODUCTION" is incorporated herein by reference.
(c) The information concerning the principal market in which the Shares are
traded and certain high and low sales prices for the Shares in such principal
market set forth in the Offer to Purchase under the caption "THE TENDER OFFER--
6. Price Range of the Shares" is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND
(a) - (d), (g) This Statement is filed by Purchaser and Parent. The
information concerning the name, state or other place of organization, principal
business and address of the principal office of Purchaser and Parent, and the
name, business address, present principal occupation or employment and the name,
principal business and address of any corporation or other organization in which
such employment or occupation is conducted, material occupations, positions,
offices or employment during the last five years and citizenship of each of the
executive officers and directors of Purchaser and Parent are set forth in the
Offer to Purchase under the captions "INTRODUCTION," and "THE TENDER OFFER--8.
Certain Information Concerning Purchaser and Parent," and in Schedule II to the
Offer to Purchase, and are incorporated herein by reference.
(e) - (f) During the last five years, neither Purchaser, Parent, nor, to
the knowledge of Purchaser or Parent, any of the persons listed in Schedule II
to the Offer to Purchase has been (i) convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining
2
<PAGE>
future violations of, or prohibiting activities subject to, federal or state
securities laws or finding any violations of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.
(a) The information set forth in the Offer to Purchase under the captions
"INTRODUCTION," "THE TENDER OFFER--8. Certain Information Concerning Purchaser
and Parent," and "THE TENDER OFFER--10. Certain Transactions among Parent,
the Company and their Respective Affiliates" is incorporated herein by
reference.
(b) The information set forth in the Offer to Purchase under the captions
"INTRODUCTION," "THE TENDER OFFER--8. Certain Information Concerning Purchaser
and Parent," "THE TENDER OFFER--10. Certain Transactions among Parent, the
Company and their Respective Affiliates," and "THE TENDER OFFER--11. Contacts
with the Company; Background of the Offer and the Merger" is incorporated herein
by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATIONS.
(a) The information set forth in the Offer to Purchase under the caption
"THE TENDER OFFER--9. Source and Amount of Funds" is incorporated herein by
reference.
(b) The information set forth in the Offer to Purchase under the caption
"THE TENDER OFFER--9. Source and Amount of Funds" is incorporated herein by
reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSAL OF THE BIDDER.
(a) - (e) The information set forth in the Offer to Purchase under the
caption "INTRODUCTION" is incorporated herein by reference.
(f) - (g) The information set forth in the Offer to Purchase under the
caption "THE TENDER OFFER--18. Effects of the Offer on the Market for Shares;
Exchange Listing and Exchange Act Registration" is incorporated herein by
reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) - (b) The information set forth in the Offer to Purchase under the
caption "THE TENDER OFFER--10. Certain Transactions among Parent, the
Company and their Respective Affiliates" is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Offer to Purchase under the captions "THE
TENDER OFFER--10. Certain Transactions among Parent, the Company and their
Respective Affiliates," "THE TENDER OFFER--12. Purpose of the Offer and the
Merger," "THE TENDER OFFER--13. Plans for the
3
<PAGE>
Company" and "THE TENDER OFFER--14. The Merger Agreement and Related
Agreements--Dissenters' Rights in the Merger" is incorporated herein by
reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Offer to Purchase under the caption "THE
TENDER OFFER--21. Fees and Expenses" is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in the Offer to Purchase under the caption "THE
TENDER OFFER--8. Certain Information Concerning Purchaser and Parent" is
incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in the Offer to Purchase under the captions
"THE TENDER OFFER--12. Purpose of the Offer and the Merger," "THE TENDER OFFER--
13. Plans for the Company," "THE TENDER OFFER--14. The Merger Agreement and
Related Agreements--Dissenters' Rights in the Merger" is incorporated herein by
reference.
(b), (c) and (d) The information set forth in the Offer to Purchase under
the caption "THE TENDER OFFER--20. Certain Legal Matters; Regulatory Approvals"
is incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal, to the extent not otherwise incorporated by reference, is
incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated November 3, 1998.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees, dated November 3, 1998.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees, dated November 3, 1998.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Summary Advertisement, dated November 3, 1998.
4
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(a)(8) Press Release, dated November 3, 1998, issued by Parent.
(b)(1) Credit Agreement dated as of February 25, 1998, among Parent, IT
Corporation ("IT Corporation"), a wholly-owned subsidiary of Parent, certain
other direct and indirect subsidiaries of Parent and Citicorp USA, Inc. and
BankBoston, N.A., individually and as agents for a group of lenders, and those
lenders.(1)
(b)(2) Amended and Restated Credit Agreement, dated as of June 11, 1998,
among Parent, IT Corporation, OHM Corporation ("OHM Corporation"), a wholly-
owned subsidiary of Parent, the institutions from time to time party thereto as
lenders, the institutions from time to time party thereto as issuing banks,
Citicorp USA, Inc., in its capacity as administrative agent and BankBoston,
N.A., in its capacity as documentation agent.(2)
(b)(3) First Amendment to the Credit Agreement, dated as of September 16,
1998, among Parent, IT Corporation, OHM Corporation, OHM Remediation Services
Corp. ("OHM Remediation") and Beneco Enterprises, Inc. ("Beneco"), the
institutions from time to time party thereto as lenders, the institutions from
time to time party thereto as issuing banks, Citicorp USA, Inc., in its capacity
as administrative agent and BankBoston, N.A., in its capacity as documentation
agent.
(b)(4) Second Amendment to the Credit Agreement, dated as of October 26,
1998, among Parent, IT Corporation, OHM Corporation, OHM Remediation and Beneco,
the institutions from time to time party thereto as lenders, the institutions
from time to time party thereto as issuing banks, Citicorp USA, Inc., in its
capacity as administrative agent and BankBoston, N.A., in its capacity as
documentation agent.
(c)(1) Agreement and Plan of Merger, dated as of October 27, 1998, among
the Company, FD, Purchaser and Parent.
(c)(2) Amended and Restated Marketing Agreement dated as of October 27,
1998 among the Company, FD and Parent.
(c)(3) Intercompany Services Agreement, dated as of October 27, 1998, among
the Company, FD and Parent.
(d) None.
(e) Not Applicable.
(f) None.
- -----------
(1) Filed as Exhibit (b)(2) to Amendment No. 6 to the Schedule 14D-1
filed by the Parent and IT-Ohio, Inc. on February 26, 1998 and incorporated
herein by reference.
(2) Filed as Exhibit 99.1 to the Current Report on Form 8-K filed by
Parent on June 18, 1998 and incorporated herein by reference.
5
<PAGE>
SIGNATURE
After due inquiry and to the best of his knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: November 3, 1998
TIGER ACQUISITION CORPORATION
By /s/ Anthony J. DeLuca
--------------------------------------
Anthony J. DeLuca
President and Chief Executive Officer
SIGNATURE
After due inquiry and to the best of his knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: November 3, 1998
INTERNATIONAL TECHNOLOGY CORPORATION
By /s/ Anthony J. DeLuca
--------------------------------------
Anthony J. DeLuca
President and Chief Executive Officer
6
<PAGE>
EXHIBIT INDEX
(a)(1) Offer to Purchase, dated November 3, 1998.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees, dated November 3, 1998.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees, dated November 3, 1998.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Summary Advertisement, dated November 3, 1998.
(a)(8) Press Release, dated November 3, 1998, issued by Parent.
(b)(1) Credit Agreement dated as of February 25, 1998, among Parent, IT
Corporation ("IT Corporation"), a wholly-owned subsidiary of Parent, certain
other direct and indirect subsidiaries of Parent and Citicorp USA, Inc. and
BankBoston, N.A., individually and as agents for a group of lenders, and those
lenders.(1)
(b)(2) Amended and Restated Credit Agreement, dated as of June 11, 1998,
among Parent, IT Corporation, OHM Corporation ("OHM Corporation"), a wholly-
owned subsidiary of Parent, the institutions from time to time party thereto as
lenders, the institutions from time to time party thereto as issuing banks,
Citicorp USA, Inc., in its capacity as administrative agent and BankBoston,
N.A., in its capacity as documentation agent.(2)
(b)(3) First Amendment to the Credit Agreement, dated as of September 16,
1998, among Parent, IT Corporation, OHM Corporation, OHM Remediation Services
Corp. ("OHM Remediation") and Beneco Enterprises, Inc. ("Beneco"), the
institutions from time to time party thereto as lenders, the institutions from
time to time party thereto as issuing banks, Citicorp USA, Inc., in its capacity
as administrative agent and BankBoston, N.A., in its capacity as documentation
agent.
(b)(4) Second Amendment to the Credit Agreement, dated as of October 26,
1998, among Parent, IT Corporation, OHM Corporation, OHM Remediation and
Beneco, the institutions from time to time party thereto as lenders, the
institutions from time to time party thereto as issuing banks, Citicorp USA,
Inc., in its capacity as administrative agent and BankBoston, N.A., in its
capacity as documentation agent.
(c)(1) Agreement and Plan of Merger, dated as of October 27, 1998, among
the Company, FD, Purchaser and Parent.
(c)(2) Amended and Restated Marketing Agreement dated as of October 27,
1998 among the Company, FD and Parent.
(c)(3) Intercompany Services Agreement, dated as of October 27, 1998, among
the Company, FD and Parent.
(d) None.
(e) Not Applicable.
(f) None.
- -----------
(1) Filed as Exhibit (b)(2) to Amendment No. 6 to the Schedule 14D-1
filed by the Parent and IT-Ohio, Inc. on February 26, 1998 and incorporated
herein by reference.
(2) Filed as Exhibit 99.1 to the Current Report on Form 8-K filed by
Parent on June 18, 1998 and incorporated herein by reference.
<PAGE>
EXHIBIT (a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
FLUOR DANIEL GTI, INC.
AT
$8.25 NET PER SHARE
BY
TIGER ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY
OF
THE IT GROUP, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, DECEMBER 2, 1998, UNLESS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED PRIOR TO THE EXPIRATION DATE AND NOT WITHDRAWN THE FD SHARES (AS
DEFINED HEREIN) AND AT LEAST A MAJORITY OF THE REMAINING ISSUED AND
OUTSTANDING SHARES OF COMMON STOCK, $.001 PAR VALUE, OF FLUOR DANIEL GTI, INC.
(THE "COMPANY"). THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER CONDITIONS SET
FORTH IN THIS OFFER TO PURCHASE. SEE "THE TENDER OFFER--19. CERTAIN CONDITIONS
OF THE OFFER."
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD"), ACTING ON THE UNANIMOUS
RECOMMENDATION OF A SPECIAL COMMITTEE OF INDEPENDENT DIRECTORS (THE "SPECIAL
COMMITTEE"), HAS UNANIMOUSLY DETERMINED THAT THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, ARE
FAIR TO, AND IN THE BEST INTERESTS OF THE STOCKHOLDERS OF THE COMPANY, HAS
UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
THEREBY, INCLUDING THE OFFER AND THE MERGER, AND RECOMMENDS THAT THE
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES HEREUNDER.
---------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares (as defined herein) should either (1) complete and sign the letter of
transmittal, dated as of November 3, 1998 (the "Letter of Transmittal"), or a
facsimile copy thereof, in accordance with the instructions in the Letter of
Transmittal, mail or deliver it and any other required documents to the
Depositary (as defined herein) and either deliver the certificates for such
Shares to the Depositary along with the Letter of Transmittal or tender such
Shares pursuant to the procedure for book-entry transfer set forth in this
Offer to Purchase under the caption "THE TENDER OFFER--2. Procedure for
Accepting the Offer and Tendering Shares" or (2) request such stockholder's
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for the stockholder. Stockholders having Shares registered in the
name of a broker, dealer, commercial bank, trust company or other nominee must
contact such broker, dealer, commercial bank, trust company or other nominee
if they desire to tender such Shares.
A stockholder who desires to tender Shares and whose certificates for Shares
are not immediately available, or who cannot comply with the procedures for
book-entry transfer described in this Offer to Purchase on a timely basis, may
tender such Shares by following the procedure for guaranteed delivery set
forth in this Offer to Purchase under the caption "THE TENDER OFFER--2.
Procedure for Accepting the Offer and Tendering Shares."
Questions and 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 (as defined herein) at its address
and telephone number set forth on the back cover of this Offer to Purchase.
Holders of Shares may also contact brokers, dealers, commercial banks or trust
companies for assistance concerning the Offer.
---------------
The Information Agent for the Offer is:
MACKENZIE PARTNERS, INC.
November 3, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
INTRODUCTION............................................................ 1
THE TENDER OFFER........................................................ 3
1. Terms of the Offer; Expiration Date............................. 3
2. Procedure for Accepting the Offer and Tendering Shares.......... 5
3. Withdrawal Rights............................................... 7
4. Acceptance for Payment and Payment for Shares................... 8
5. Certain Federal Income Tax Consequences......................... 9
6. Price Range of the Shares....................................... 10
7. Certain Information Concerning the Company...................... 10
8. Certain Information Concerning Purchaser and Parent............. 13
9. Source and Amount of Funds...................................... 14
10. Certain Transactions Among Parent, the Company and their
Respective Affiliates.......................................... 16
11. Contacts with the Company; Background of the Offer and the
Merger......................................................... 17
12. Purpose of the Offer and the Merger............................. 19
13. Plans for the Company........................................... 20
14. The Merger Agreement and Related Agreements..................... 20
15. Going Private Transactions...................................... 29
16. Interests Of Certain Persons in the Offer and the Merger........ 30
17. Dividends and Distributions..................................... 32
18. Effects of the Offer on the Market for Shares; Exchange Listing
and Exchange Act Registration.................................. 32
19. Certain Conditions of the Offer................................. 33
20. Certain Legal Matters; Regulatory Approvals..................... 35
21. Fees and Expenses............................................... 36
22. Miscellaneous................................................... 37
SCHEDULE I.............................................................. S-1
SCHEDULE II............................................................. S-3
ANNEX A................................................................. A-1
</TABLE>
<PAGE>
To the Holders of Common Stock of Fluor Daniel GTI, Inc.:
INTRODUCTION
Tiger Acquisition Corporation, a Delaware corporation ("Purchaser"), which
is a wholly-owned subsidiary of International Technology Corporation, a
Delaware corporation doing business as The IT Group, Inc. ("Parent"), hereby
offers to purchase all of the issued and outstanding shares (the "Shares") of
common stock, par value $.001 per share (the "Common Stock"), of the Company,
upon the terms and subject to the conditions set forth in this Offer to
Purchase, dated as of November 3, 1998 (the "Offer to Purchase"), and the
related Letter of Transmittal (which, together with the Offer to Purchase,
constitute the "Offer"), at a price of $8.25 per Share, net to each seller in
cash, without interest (such amount, or any greater amount per Share paid
pursuant to the Offer being hereinafter referred to as the "Offer Price").
THE BOARD, ACTING ON THE UNANIMOUS RECOMMENDATION OF THE SPECIAL COMMITTEE,
HAS UNANIMOUSLY DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, ARE FAIR TO, AND IN
THE BEST INTERESTS OF THE STOCKHOLDERS OF THE COMPANY, HAS UNANIMOUSLY
APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING THE OFFER AND THE MERGER, AND RECOMMENDS THAT THE STOCKHOLDERS
ACCEPT THE OFFER AND TENDER THEIR SHARES HEREUNDER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED PRIOR TO THE EXPIRATION DATE AND NOT WITHDRAWN 4,400,000 SHARES (THE
"FD SHARES"), OWNED BY FLUOR DANIEL, INC., A CALIFORNIA CORPORATION ("FD") AND
CONSTITUTING APPROXIMATELY 52.3% OF THE SHARES, AND AT LEAST A MAJORITY OF THE
REMAINING ISSUED AND OUTSTANDING SHARES OF THE COMPANY. THE OFFER IS ALSO
SUBJECT TO CERTAIN OTHER CONDITIONS SET FORTH IN THIS OFFER TO PURCHASE. SEE
"THE TENDER OFFER--19. CERTAIN CONDITIONS OF THE OFFER."
Pursuant to the Merger Agreement (as defined herein) FD has agreed, among
other things, to tender in, and not withdraw from, the Offer, all Shares
(including the FD Shares) owned by it and its affiliates. As of October 30,
1998, FD owned 4,400,000 Shares representing approximately 52.3% of the
Shares. As used in this Offer to Purchase, the "Minimum Condition" shall be
satisfied when the FD Shares and at least a majority of the Shares not owned
by FD are validly tendered, and not withdrawn, pursuant to the Offer. The
number of Shares that would satisfy the Minimum Condition is referred to
herein as the "Minimum Share Number."
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, DECEMBER 2, 1998, UNLESS EXTENDED. SEE "THE TENDER OFFER--
1. TERMS OF THE OFFER; EXPIRATION DATE."
The Offer is being made pursuant to the terms of the Agreement and Plan of
Merger (the "Merger Agreement"), dated as of October 27, 1998, by and among
Parent, Purchaser, the Company and FD, which provides, among other things, for
the commencement of the Offer by Purchaser and further provides that,
following the purchase of Shares pursuant to the Offer, Purchaser will be
merged with and into the Company (the "Merger"), with the Company continuing
as the surviving corporation (the "Surviving Corporation"). The consummation
of the Merger is subject to the satisfaction or, if permissible, waiver of
certain conditions, including approval of the adoption of the Merger Agreement
by the requisite vote of the stockholders of the Company. If Purchaser
acquires the Minimum Share Number, it will have sufficient voting power to
approve and adopt the Merger Agreement and the Merger without the vote of any
other stockholder of the Company. If Purchaser acquires at least 90% of the
Shares in the Offer, under Delaware law it will be able to consummate the
Merger without a vote of the Company's stockholders.
At the effective time of the Merger (the "Effective Time"), each issued and
outstanding Share (other than Shares held by Parent, Purchaser or any other
direct or indirect subsidiary of Parent or Shares that are owned by
<PAGE>
the Company or any direct or indirect subsidiary of the Company, which will be
canceled and retired without any payment with respect thereto, or Shares (the
"Dissenting Shares") with respect to which the holder properly exercises such
holder's appraisal rights in accordance with the Delaware General Corporation
Law ("DGCL") (collectively, the "Excluded Shares")) shall be converted into,
and become exchangeable for the Offer Price, and the Offer Price multiplied by
the number of such Shares shall be referred to as the "Merger Consideration."
At the Effective Time, all Shares other than Dissenting Shares shall be
canceled and retired and shall cease to exist, and each certificate (a
"Certificate") formerly representing any of such Shares (other than any
Excluded Shares) shall thereafter represent only the right to receive the
Merger Consideration.
BT ALEX. BROWN INCORPORATED ("BT ALEX. BROWN"), FINANCIAL ADVISOR TO THE
COMPANY, HAS DELIVERED A WRITTEN OPINION TO THE SPECIAL COMMITTEE AND THE
BOARD, DATED AS OF THE DATE OF THE MERGER AGREEMENT (THE "OPINION"), TO THE
EFFECT THAT, AS OF THAT DATE, THE CONSIDERATION TO BE RECEIVED BY THE
STOCKHOLDERS OF THE COMPANY (OTHER THAN FD AND PARENT AND THEIR RESPECTIVE
AFFILIATES) PURSUANT TO THE MERGER AGREEMENT IS FAIR FROM A FINANCIAL POINT OF
VIEW TO SUCH STOCKHOLDERS. THE FULL TEXT OF THE OPINION IS CONTAINED IN THE
COMPANY'S SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 (THE
"SCHEDULE 14D-9") FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE
"COMMISSION") IN CONNECTION WITH THE OFFER, A COPY OF WHICH IS BEING PROVIDED
TO STOCKHOLDERS CONCURRENTLY WITH THIS OFFER TO PURCHASE. STOCKHOLDERS ARE
URGED TO READ SUCH OPINION CAREFULLY AND IN ITS ENTIRETY.
The Company has informed Purchaser that as of October 19, 1998 all of the
executive officers and directors of the Company as a group owned 37,326 Shares
and held options to purchase 265,388 shares of Common Stock. See "THE TENDER
OFFER--16. Interests of Certain Persons in the Offer and the Merger."
The Offer and withdrawal rights will expire at 12:00 Midnight, New York City
time, on Wednesday, December 2, 1998, unless extended. See "THE TENDER OFFER--
1. Terms of the Offer; Expiration Date."
THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY MEETING OF
THE COMPANY'S STOCKHOLDERS. ANY SUCH SOLICITATION, IF REQUIRED, WILL BE MADE
ONLY PURSUANT TO SEPARATE PROXY MATERIALS COMPLYING WITH THE REQUIREMENTS OF
SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE
"EXCHANGE ACT").
Tendering stockholders will not be obligated to pay brokerage commissions,
solicitation fees or, subject to Instruction 6 of the Letter of Transmittal,
stock transfer taxes on the purchase of Shares by Purchaser pursuant to the
Offer. 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 backup federal income tax withholding of 31% of
the gross proceeds payable to such stockholder or other payee pursuant to the
Offer. See "THE TENDER OFFER--5. Certain Federal Income Tax Consequences."
Purchaser will pay all charges and expenses of BankBoston, N.A., as Depositary
(in such capacity, the "Depositary"), and MacKenzie Partners, Inc., as
Information Agent (in such capacity, the "Information Agent"), incurred in
connection with the Offer. For a description of the fees and expenses to be
paid by Purchaser, see "THE TENDER OFFER--21. Fees and Expenses."
Consummation of the Merger is subject to a number of conditions, including
approval of the Merger Agreement and the transactions contemplated thereby by
the stockholders of the Company. See "THE TENDER OFFER--20. Certain Legal
Matters; Regulatory Approvals." The Board has recommended that the Company's
stockholders approve the Merger and has taken all lawful action to solicit
such approval. If Purchaser acquires the Minimum Share Number in the Offer, it
will have sufficient voting power to approve and adopt the Merger
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Agreement and the Merger without the vote of any other stockholder of the
Company. If Purchaser acquires at least 90% of the Shares in the Offer, under
Delaware law it will be able to consummate the Merger without a vote of the
Company's stockholders.
The information contained in this Offer to Purchase concerning the Company,
including, without limitation, information concerning the deliberations,
approvals and recommendations of the Special Committee and the Board in
connection with the transaction, the Opinion, and the Company's capital
structure and historical and projected financial information, was supplied by
the Company. The information contained in this Offer to Purchase concerning
the Offer, the Merger, Parent and Purchaser was supplied by Purchaser.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS
MADE WITH RESPECT TO THE OFFER. SEE ALSO "THE TENDER OFFER--22. MISCELLANEOUS"
FOR INFORMATION REGARDING CERTAIN ADDITIONAL DOCUMENTS FILED WITH THE
COMMISSION IN CONNECTION WITH THE OFFER.
THE TENDER OFFER
1. TERMS OF THE OFFER; EXPIRATION DATE.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will accept for payment and pay for all of the Shares
validly tendered pursuant to the Offer prior to the Expiration Date (as
defined below) and not withdrawn in accordance with the provisions set forth
in this Offer to Purchase under the caption "THE TENDER OFFER--3. Withdrawal
Rights." The term "Expiration Date" shall mean 12:00 Midnight, New York City
time, on Wednesday, December 2, 1998, unless and until Parent, in its sole
discretion (but subject to restrictions contained in the Merger Agreement),
shall from time to time have extended the period of time during which the
Offer is open, in which event the term "Expiration Date" shall mean the latest
time and date at which the Offer, as so extended by Parent, shall expire. Any
determination concerning the satisfaction of the terms and conditions of the
Offer will be made by Purchaser in its good faith judgment and such
determination will be final and binding on all tendering stockholders.
Parent expressly reserves the right to increase the Offer Price or to make
any other changes in the terms and conditions of the Offer, provided that,
unless previously approved by the Special Committee and the Board in writing,
no change may be made which (i) decreases the Offer Price, (ii) changes the
form of consideration payable in the Offer, (iii) reduces the maximum number
of Shares to be purchased in the Offer, (iv) amends the conditions to the
Offer set forth in "THE TENDER OFFER--19. Certain Conditions of the Offer" to
broaden their scope, (v) imposes additional conditions of the Offer or amend
any other term of the Offer in any manner adverse to holders of Shares or
extend the Offer if all of the conditions to the Offer are satisfied or
waived, or (vi) amends the Minimum Condition. See paragraph (f) of "THE TENDER
OFFER--19. Certain Conditions of the Offer."
As used in this Offer to Purchase, "business day" means any day other than a
day on which banks in the State of New York are authorized to close or the New
York Stock Exchange (the "NYSE") is closed. Parent expressly reserves the
right, in its sole discretion (but subject to the terms and conditions of the
Merger Agreement), at any time and from time to time, without the consent of
the Special Committee and the Board to (i) from time to time extend the Offer
(each such individual extension not to exceed ten (10) business days after the
previously scheduled Expiration Date), if at the scheduled Expiration Date of
the Offer any of the conditions to the Offer shall not have been satisfied or
waived, until such time as such conditions are satisfied or waived;
(ii) extend the Offer for any period required by any rule, regulation,
interpretation or position of the Commission or the staff thereof applicable
to the Offer; or (iii) extend the Offer for any reason on up to two
(2) occasions in each case for a period of not more than five (5) business
days beyond the latest Expiration Date that would otherwise be permitted under
clause (i) or (ii) of this sentence if on such Expiration Date there shall
3
<PAGE>
have been tendered more than the number of Shares sufficient to satisfy the
Minimum Condition but less than 90% of the Shares, provided the Purchaser
agrees to permanently waive the conditions set forth in paragraphs (b) and (e)
of "THE TENDER OFFER--19. Certain Conditions of the Offer." If all of the
conditions to the Offer set forth in "THE TENDER OFFER--19. Certain Conditions
of the Offer" are not satisfied on any scheduled Expiration Date of the Offer
then, provided that all such conditions are reasonably capable of being
satisfied prior to December 31, 1998, Parent shall extend the Offer from time
to time (each such individual extension not to exceed ten (10) business days
after the previously scheduled Expiration Date) until such conditions are
satisfied or waived, provided that Parent shall not be required to extend the
Offer beyond December 31, 1998. Such extension by Parent shall be effected by
giving oral or written notice of such extension to the Depositary. During any
such extension, all Shares previously tendered and not withdrawn will remain
subject to the Offer, subject to the rights of a tendering stockholder to
withdraw such stockholder's Shares. See "THE TENDER OFFER--3. Withdrawal
Rights."
Subject to the applicable regulations of the Commission, Purchaser also
expressly reserves the right, in its sole discretion (but subject to the terms
and conditions of the Merger Agreement), at any time and from time to time,
(i) to delay acceptance for payment of, or, regardless of whether such Shares
were theretofore accepted for payment, payment for, any Shares pending receipt
of any regulatory or governmental approval described in this Offer to Purchase
under the caption "THE TENDER OFFER--20. Certain Legal Matters; Regulatory
Approvals," (ii) to terminate the Offer and not accept for payment any Shares
upon the occurrence of any of the conditions specified in "THE TENDER OFFER--
19. Certain Conditions of the Offer," and (iii) to waive any condition or
otherwise amend the Offer in any respect, by giving oral or written notice of
such delay, termination, waiver or amendment to the Depositary and by making a
public announcement thereof. Purchaser acknowledges that (i) Rule 14e-1(c)
under the Exchange Act requires Purchaser to pay the consideration offered or
return the Shares tendered promptly after the termination or withdrawal of the
Offer and (ii) Purchaser may not delay acceptance for payment of, or payment
for (except as provided in clause (i) of the first sentence of this
paragraph), any Shares upon the occurrence of any of the conditions specified
in "THE TENDER OFFER--19. Certain Conditions of the Offer" without extending
the period of time during which the Offer is open.
If Parent extends the Offer, or if Purchaser (whether before or after its
acceptance for payment of Shares) is delayed in its payment for Shares or is
unable to pay for Shares pursuant to the Offer for any reason, then, without
prejudice to Purchaser's rights under the Offer, the Depositary may retain
tendered Shares on behalf of Purchaser, and such Shares may not be withdrawn
except to the extent tendering stockholders are entitled to withdrawal rights
as described in this Offer to Purchase under the caption "THE TENDER OFFER--3.
Withdrawal Rights." However, the ability of Purchaser to delay payment for
Shares that Purchaser has accepted for payment is limited by Rule 14e-1(c)
under the Exchange Act.
Any extension, amendment or termination of the Offer will be followed as
promptly as practicable by public announcement in accordance with the public
announcement requirements of Rule 14e-1(d) under the Exchange Act. Subject to
applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act,
which require that any material change in the information published, sent or
given to stockholders in connection with the Offer be promptly disseminated to
stockholders in a manner reasonably designed to inform stockholders of such
change) and without limiting the manner in which Purchaser may choose to make
any public announcement, Purchaser shall have no obligation to publish,
advertise or otherwise communicate any such public announcement other than by
making a release to the Dow Jones News Service.
The Company has provided Purchaser with the Company stockholder list, a
nonobjecting beneficial owners list, and security position listings for the
purpose of disseminating the Offer to holders of Shares. This Offer to
Purchase and the Letter of Transmittal and other relevant materials will be
mailed to record holders of Shares and furnished to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the
names of whose nominees, appear on the 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.
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<PAGE>
2. PROCEDURE FOR ACCEPTING THE OFFER AND TENDERING SHARES.
VALID TENDER OF SHARES
For a stockholder to validly tender Shares pursuant to the Offer, either
(a)(i) a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), together with any required signature guarantees, or an
Agent's Message (as defined herein) in connection with a book-entry delivery
of Shares and any other required documents, must be timely received by the
Depositary at one of its addresses set forth on the back cover of the Offer to
Purchase and (ii) either certificates ("Share Certificates") for tendered
Shares must be timely received by the Depositary at one of such addresses or
such Shares must be timely delivered pursuant to the procedure for book-entry
transfer set forth herein (and a Book-Entry Confirmation (as defined herein)
timely received by the Depositary) or (b) the tendering stockholder must
comply with the guaranteed delivery procedures set forth herein and the Letter
of Transmittal.
BOOK-ENTRY TRANSFERS
The Depositary will establish an account with respect to the Shares at The
Depositary Trust Company (the "Book-Entry Transfer Facility") for purposes of
the Offer within two business days after the date of this Offer to Purchase.
Any financial institution that is a participant in the Book-Entry Transfer
Facility may make book-entry delivery of the Shares by causing the book-entry
transfer system to transfer such Shares into the Depositary's account at the
Book-Entry Transfer Facility in accordance with the Book-Entry Transfer
Facility's procedure for such transfer. Although delivery of Shares may be
effected through book-entry transfer at the Book-Entry Transfer Facility, a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees, or an Agent's Message (as
defined herein), in connection with a book-entry transfer, and any other
required documents, must, in any case, be transmitted to, and received by, the
Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase prior to the Expiration Date, or the tendering stockholder must
comply with the guaranteed delivery procedures described below. The
confirmation of a book-entry transfer of Shares into the Depositary's account
at the Book-Entry Transfer Facility as described above is referred to herein
as a "Book-Entry Confirmation." DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY
TRANSFER FACILITY IN ACCORDANCE WITH ITS BOOK-ENTRY PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of
the Book-Entry Confirmation, which states that the Book-Entry Transfer
Facility has received an express acknowledgment from the participant in the
Book-Entry Transfer Facility tendering the Shares that such participant has
received the Letter of Transmittal and agrees to be bound by the terms of the
Letter of Transmittal and that Purchaser may enforce such agreement against
such participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE ELECTION AND SOLE RISK OF THE TENDERING
STOCKHOLDER AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED AT
THE DEPOSITARY. IF DELIVERY IS BY MAIL, THEN INSURED OR REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD
BE ALLOWED TO ENSURE TIMELY DELIVERY.
SIGNATURE GUARANTEES
No signature guarantee on the Letter of Transmittal is required if (i) the
Letter of Transmittal is signed by the registered holder of the Shares (which
term, for purposes of this Section, includes any participant in a Book-Entry
Transfer Facility system whose name appears on a security position listing as
the owner of the Shares) tendered therewith and such registered holder has not
completed either the box entitled "Special Delivery Instructions" or the box
entitled "Special Payment Instructions" on such Letter of Transmittal, or (ii)
such Shares are tendered for the account of a bank, broker, dealer, credit
union, savings association or other entity that is a member in good standing
of the Securities Transfer Agents Medallion Program, the New York Stock
5
<PAGE>
Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion
Program (each, an "Eligible Institution"). In all other cases, all signatures
on the Letter of Transmittal must be guaranteed by an Eligible Institution.
See Instructions 1 and 5 to the Letter of Transmittal. If the Share
Certificates are registered in the name of a person other than the signer of
the Letter of Transmittal, or if payment is to be made to, or Share
Certificates not validly tendered or not accepted for payment or not purchased
are to be issued or returned to, a person other than the registered holder of
the Share Certificates, the tendered Share Certificates must be endorsed in
blank or accompanied by appropriate stock powers, signed exactly as the name
of the registered holder appears on the Share Certificates with the signature
on such Share Certificates or stock powers guaranteed by an Eligible
Institution. See Instructions 1 and 5 to the Letter of Transmittal.
GUARANTEED DELIVERY
If a stockholder desires to tender Shares pursuant to the Offer and such
stockholder's Share Certificates are not immediately available or the
procedures for book-entry transfer cannot be completed on a timely basis or
time will not permit all required documents to reach the Depositary prior to
the Expiration Date, such Shares may nevertheless be tendered provided that
all of the following guaranteed delivery procedures are duly complied with:
(a) such tender is made by or through an Eligible Institution;
(b) the Depositary receives (by hand, mail, telegram or facsimile
transmission) on or prior to the Expiration Date, a properly completed and
duly executed Notice of Guaranteed Delivery, substantially in the form
provided by Purchaser; and
(c) the Share Certificates representing all tendered Shares, in proper
form for transfer (or Book-Entry Confirmation with respect to such Shares),
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 within three NYSE trading days
after the date of such Notice of Guaranteed Delivery. An "NYSE trading day"
is any day on which securities are traded on the NYSE.
The Notice of Guaranteed Delivery may be delivered by hand, or may be
transmitted by telegram, facsimile transmission or mail, to the Depositary and
must include a guarantee by an Eligible Institution in the form set forth in
such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) Share Certificates for (or a timely Book-
Entry Confirmation with respect to) such Shares, (ii) a properly completed and
duly executed Letter of Transmittal (or facsimile thereof), or, in the case of
book-entry transfer, an Agent's Message, and (iii) any other documents
required by the Letter of Transmittal. Accordingly, tendering stockholders may
be paid at different times depending upon when Share Certificates, Book-Entry
Confirmations and such other documents are actually received by the
Depositary. Under no circumstances will interest be paid by Purchaser on the
purchase price of the Shares to any tendering stockholders, regardless of any
extension of the Offer or any delay in making such payment.
DETERMINATION OF VALIDITY
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance for payment of any tender of Shares will be determined
by Purchaser in its sole discretion, which determination will be final and
binding. Purchaser reserves the absolute right to reject any or all tenders of
any Shares that it determines are not in proper form or the acceptance for
payment of or payment for which may be unlawful. Purchaser also reserves the
absolute right to waive any of the conditions of the Offer or any defect or
irregularity in the tender of any Shares with respect to any particular
stockholder, whether or not similar defects or irregularities are waived in
the case of other stockholders. None of Purchaser, Parent, the Depositary, the
Information Agent or any other person will be under any duty to give notice of
any defects or irregularities in tenders or incur any liability for failure to
give any such notice. Purchaser's interpretation of the terms and conditions
of the Offer (including the Letter of Transmittal and the instructions
thereto) will be final and binding.
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OTHER REQUIREMENTS
By executing the Letter of Transmittal as set forth herein, a tendering
stockholder irrevocably appoints designees of Purchaser as such stockholder's
proxies, each with full power of substitution, in the manner set forth in the
Letter of Transmittal, to the full extent of such stockholder's rights with
respect to the Shares tendered by such stockholder and accepted for payment by
Purchaser (and with respect to any and all other Shares or other securities or
rights issued or issuable in respect of such Shares on or after the Expiration
Date), effective when, if and to the extent that Purchaser accepts such Shares
for payment pursuant to the Offer. All such proxies shall be considered
coupled with an interest in the tendered Shares. Upon such acceptance for
payment, all prior proxies given by such stockholder with respect to such
Shares accepted for payment or other securities or rights will, without
further action, be revoked, and no subsequent proxies may be given. Such
designees of Purchaser will, with respect to such Shares for which the
appointment is effective, be empowered to exercise all voting and other rights
of such stockholder as they in their sole discretion may deem proper in
respect of any annual or special meeting of the Company's stockholders or any
adjournment or postponement thereof, by written consent in lieu of any such
meeting or otherwise. Purchaser reserves the right to require that, in order
for Shares to be deemed validly tendered, immediately upon Purchaser's payment
for such Shares, Purchaser must be able to exercise full voting rights with
respect to such Shares.
Purchaser's acceptance for payment of Shares tendered pursuant to any of the
procedures described herein will constitute a binding agreement between the
tendering stockholder and Purchaser upon the terms and subject to the
conditions of the Offer.
BACKUP FEDERAL INCOME TAX WITHHOLDING
To prevent backup federal income tax withholding on payments of cash
pursuant to the Offer, a stockholder tendering Shares in the offer must
provide the Depositary with such stockholder's correct taxpayer identification
number ("TIN") on a Substitute Form W-9 and certify under penalties of perjury
that such TIN is correct and that such stockholder is not subject to backup
withholding. If a stockholder does not provide its correct TIN or fails to
provide the certification described herein, under federal income tax laws, the
Depositary will be required to withhold 31% of the amount of any payment made
to such stockholder pursuant to the Offer. All stockholders tendering Shares
pursuant to the Offer should complete and sign the Substitute Form W-9
included as a part of the Letter of Transmittal to provide the information and
certification necessary to avoid backup withholding. Noncorporate foreign
stockholders should complete and sign a Form W-8, Certificate of Foreign
Status, a copy of which may be obtained from the Depositary, in order to avoid
backup withholding. See Instruction 10 to the Letter of Transmittal.
3. WITHDRAWAL RIGHTS.
Tenders of Shares made pursuant to the Offer will be irrevocable, except
that Shares tendered may be withdrawn at any time prior to the Expiration
Date, and, unless theretofore accepted for payment and paid for as provided
herein, may also be withdrawn at any time on or after January 2, 1999. If
Purchaser extends the Offer, is delayed in its acceptance for payment of
Shares or is unable to accept Shares for payment pursuant to the Offer for any
reason, then, without prejudice to Purchaser's rights under the Offer, the
Depositary may, nevertheless, on behalf of Purchaser, retain tendered Shares,
and such Shares may not be withdrawn except to the extent that tendering
stockholders are entitled to withdrawal rights as described in this Section.
Any such delay will be by an extension of the Offer to the extent required by
law. The reservation by Purchaser of the right to delay the acceptance or
purchase of or payment for Shares is subject to the provisions of Rule 14e-
1(c) under the Exchange Act, which requires Purchaser to pay the consideration
offered or to return Shares deposited by or on behalf of stockholders promptly
after the termination or withdrawal of the Offer.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase.
Any notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn and the name of
the registered holder of the Shares to be withdrawn as set forth on such Share
Certificates if different from the name of the person who tendered such
Shares. If Share
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Certificates have been delivered or otherwise identified to the Depositary,
then, prior to the physical release of such Share Certificates, the serial
numbers shown on such Share Certificates must be furnished to the Depositary
and, unless such Shares have been tendered by an Eligible Institution, the
signatures on the notice of withdrawal must be guaranteed by an Eligible
Institution. If Shares have been delivered pursuant to the procedures for
book-entry transfer set forth in Section 2 above, any notice of withdrawal
must specify the name and number of the account at the appropriate Book-Entry
Transfer Facility to be credited with such withdrawn Shares and otherwise
comply with such Book-Entry Transfer Facility's procedures for withdrawal, in
which case a notice of withdrawal will be effective if delivered to the
Depositary by any method of delivery described in the first sentence of this
paragraph.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser in its sole discretion,
and its determination will be final and binding. No withdrawal of Shares will
be deemed to have been properly made until all defects and irregularities have
been cured or waved. None of Purchaser, the Dealer Manager, the Depositary,
the Information Agent or any other person will be obligated to give notice of
any defects or irregularities in any notice of withdrawal, nor shall any of
them incur any liability for failure to give any such notice.
Withdrawals of tenders of Shares may not be rescinded, and any Shares
properly withdrawn will thereafter be deemed not validly tendered for purposes
of the Offer. However, withdrawn Shares may be retendered by following one of
the procedures described in Section 2 above at any time on or prior to the
Expiration Date.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any extension or
amendment), Purchaser will accept for payment, and will pay for all of the
Shares validly tendered on or prior to the Expiration Date and not properly
withdrawn in accordance with the procedures set forth in "THE TENDER OFFER--3.
Withdrawal Rights" promptly after the latest to occur of (i) the Expiration
Date, (ii) the expiration or termination of any applicable waiting periods
under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended (the
"HSR Act"), and (iii) the satisfaction or waiver of the other conditions to
the Offer set forth under "THE TENDER OFFER--19. Certain Conditions of the
Offer." Any determination concerning the satisfaction of the terms and
conditions of the Offer will be made by Purchaser in its good faith judgment
and such determination will be final and binding on all tendering
stockholders. Subject to applicable rules of the Commission and the terms and
conditions of the Merger Agreement, Purchaser expressly reserves the right, in
its sole discretion, to delay acceptance for payment of, or payment for,
Shares in order to comply in whole or in part with any applicable law or
governmental regulation.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i)
the Share Certificates (or timely Book-Entry Confirmation of the book-entry
transfer of such Shares into the Depositary's account at a Book-Entry Transfer
Facility pursuant to the procedures set forth under Section 2 above), (ii) the
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, together with any required signature guarantees, or an Agent's
Message in connection with a book-entry transfer, and (iii) any other
documents required by the Letter of Transmittal.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, the Shares validly tendered to Purchaser and
not properly withdrawn as, if and when Purchaser gives oral or written notice
to the Depositary of Purchaser's acceptance for payment of such Shares
pursuant to the Offer. In all cases, upon the terms and subject to the
conditions of the Offer, payment for Shares so accepted for payment will be
made by the deposit of the purchase price therefor with the Depositary, which
will act as agent for tendering stockholders for the purpose of receiving
payment from Purchaser and transmitting payment to validly tendering
stockholders. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID BY PURCHASER ON THE
PURCHASE PRICE OF THE SHARES TENDERED PURSUANT TO THE OFFER, REGARDLESS OF ANY
EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT. Upon the deposit
of funds with the Depositary for the purpose of making payments to tendering
stockholders, Purchaser's obligation to make such payments shall be satisfied
and tendering stockholders must
8
<PAGE>
thereafter look solely to the Depositary for payment of amounts owed to them
by reason of the acceptance for payment of Shares pursuant to the Offer.
Purchaser will pay any stock transfer taxes with respect to the transfer and
sale to it or its order pursuant to the Offer, except as otherwise provided in
Instruction 6 of the Letter of Transmittal, as well as any charges and
expenses of the Depositary and the Information Agent.
If Purchaser is delayed in its acceptance for payment of, or payment for,
tendered Shares or is unable to accept for payment or pay for such Shares
pursuant to the Offer for any reason, then, without prejudice to Purchaser's
rights under the Offer (but subject to Purchaser's obligations under Rule 14e-
1(c) under the Exchange Act to pay for or return the tendered Shares promptly
after the termination or withdrawal of the Offer), the Depositary may,
nevertheless, retain tendered Shares on behalf of Purchaser, and such Shares
may not be withdrawn except to the extent tendering stockholders are entitled
to exercise, and duly exercise, withdrawal rights as described under "THE
TENDER OFFER--3. Withdrawal Rights."
If any tendered Shares are not purchased pursuant to the Offer because of an
invalid tender or for any reason, Share Certificates for any such Shares will
be returned, without expense, to the tendering stockholder (or, in the case of
Shares delivered by book-entry transfer of such Shares into the Depositary's
account at a Book-Entry Transfer Facility pursuant to the procedures set forth
under Section 2 above, such Shares will be credited to an account maintained
at such Book-Entry Transfer Facility) as promptly as practicable following the
expiration or termination of the Offer.
Purchaser reserves the right to transfer or assign, in whole or from time to
time in part, to one or more of Purchaser's subsidiaries or affiliates, the
right to purchase all or any Shares tendered pursuant to the Offer, but any
such transfer or assignment will not relieve Purchaser of its obligations
under the Offer or prejudice the rights of tendering stockholders to receive
payment for Shares validly tendered and accepted for purchase.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The summary of Federal income tax consequences set forth below is for
general information only and is based on Purchaser's understanding of the law
as currently in effect. The tax consequences to each stockholder will depend
in part upon such stockholder's particular situation. Special tax consequences
not described herein may be applicable to particular classes of taxpayers,
such as financial institutions, broker-dealers, persons who are not citizens
or residents of the United States and stockholders who acquired their Shares
through the exercise of an employee stock option or otherwise as compensation.
ALL STOCKHOLDERS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS AS TO THE
PARTICULAR TAX CONSEQUENCES OF THE OFFER AND THE MERGER TO THEM, INCLUDING THE
APPLICABILITY AND EFFECT OF THE ALTERNATIVE MINIMUM TAX AND ANY STATE, LOCAL
OR FOREIGN INCOME AND OTHER TAX LAWS AND OF CHANGES IN SUCH TAX LAWS.
The receipt of cash for Shares tendered pursuant to the Offer (or the
Merger) will be a taxable transaction for federal income tax purposes and may
also be a taxable transaction under applicable state, local or foreign tax
laws. Generally, for federal income tax purposes, a stockholder who receives
cash for Shares pursuant to the Offer (or the Merger) will recognize gain or
loss equal to the difference between the amount of cash received in exchange
for the Shares sold and such stockholder's adjusted tax basis in such Shares.
Provided that the Shares constitute capital assets in the hands of the
stockholder, such gain or loss will be capital gain or loss, and will be long
term capital gain or loss if the holder has held the Shares for more than one
year at the time of sale. Gain or loss will be calculated separately for each
block of Shares (i.e., a group of Shares with the same tax basis and holding
period) tendered pursuant to the Offer. The maximum federal income tax rate
applicable to non-corporate taxpayers on long-term capital gains is generally
20% for transactions after 1997.
A stockholder (other than certain exempt stockholders including, among
others, all corporations and certain foreign individuals and entities) who
tenders Shares may be subject to 31% backup withholding unless the stockholder
provides its TIN and certifies that such number is correct or properly
certifies that it is awaiting a TIN, or unless an exemption applies. A
stockholder who does not furnish its TIN may be subject to a penalty imposed
by the Internal Revenue Service (the "IRS"). See "THE TENDER OFFER--3.
Procedure for Accepting the Offer and Tendering Shares."
9
<PAGE>
If backup withholding applies to a stockholder, the Depositary is required
to withhold 31% from payments to such stockholder. Backup withholding is not
an additional tax. Rather, the amount of the backup withholding can be
credited against the federal income tax liability of the person subject to the
backup withholding, provided that the required information is given to the
IRS. If backup withholding results in an overpayment of tax, a refund can be
obtained by the stockholder upon filing an appropriate income tax return.
6. PRICE RANGE OF THE SHARES.
The Shares are traded on the Nasdaq National Market ("Nasdaq") under the
symbol FDGT. The following table sets forth, for the periods indicated, the
high and low sales prices of the Common Stock as reported on Nasdaq:
<TABLE>
<CAPTION>
HIGH LOW
------- --------
<S> <C> <C>
Year Ended October 31, 1997:
First Quarter............................................. $9 3/8 $7
Second Quarter............................................ $8 7/8 $6 1/4
Third Quarter............................................. $8 $6
Fourth Quarter............................................ $9 1/4 $6 5/8
Year Ended October 31, 1998:
First Quarter............................................. $9 7/8 $9 13/32
Second Quarter............................................ $9 5/8 $5 7/8
Third Quarter............................................. $9 7/16 $4 5/8
Fourth Quarter............................................ $8 1/4 $4 5/8
</TABLE>
On October 27, 1998, the last full day of trading prior to the public
announcement of the execution of the Merger Agreement, according to published
sources, the last reported sale quotation of the Shares on Nasdaq was $5 7/8
per Share. On November 2, 1998 the last full day of trading before the
commencement of the Offer, according to published sources, the last reported
sale quotation of the Shares on Nasdaq was $8 1/32 per Share. STOCKHOLDERS ARE
URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE COMMON STOCK.
7. CERTAIN INFORMATION CONCERNING THE COMPANY.
GENERAL
The Company is a Delaware corporation with its principal offices located at
100 River Ridge Drive, Norwood, Massachusetts 02062.
The Company provides a broad range of environmental, consulting, engineering
and remediation services to a variety of commercial customers and federal,
state and local government agencies. The Company was incorporated in Delaware
in October 1975 and currently operates from 57 consulting offices throughout
the United States and in four foreign countries including Australia, the
United Kingdom, Canada and Italy.
COMPANY AVAILABLE INFORMATION
The Company is subject to the informational filing requirements of the
Exchange Act and, in accordance therewith, is required to file periodic
reports, proxy statements and other information with the Commission relating
to its business, financial condition and other matters. Certain information,
as of particular dates, concerning the Company's directors and executive
officers (including their remuneration, stock options granted to them and
Shares held by them), the principal holders of the Company's securities, and
any material interest of such persons in transactions with the Company is
required to be disclosed in proxy statements and annual reports distributed to
the Company's stockholders and filed with the Commission. Such reports, proxy
statements and other information are available for inspection and copying at
the public reference facilities of the Commission located in Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of
the
10
<PAGE>
Commission located in Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and Seven World Trade Center, Suite 1300, New York,
New York 10048. Copies of this material may also be obtained by mail, upon
payment of the Commission's customary fees from the Commission's principal
office at 450 Fifth Street N.W., Washington, D.C. 20549. The Commission also
maintains an Internet site on the World Wide Web at (http://www.sec.gov) that
contains reports, proxy statements and other information. In addition, such
material should also be available for inspection at The NYSE, 20 Broad Street,
New York, NY 10005.
DIRECTORS AND OFFICERS
The name, address, principal occupation or employment, five-year employment
history and citizenship of each director and executive officer of the Company
is set forth in Schedule I hereto.
SUMMARY FINANCIAL INFORMATION
The following tables set forth certain summary consolidated financial
information with respect to the Company and its consolidated subsidiaries
derived from the audited financial statements contained in the Company's
Annual Report on Form 10-K for the fiscal year ended October 31, 1997 and the
unaudited financial statements contained in the Company's Quarterly Report on
Form 10-Q for the period ended July 31, 1998. The following summary is
qualified in its entirety by reference to the more comprehensive financial
information included in such documents, including the financial statements and
related notes contained therein as well as other documents filed by the
Company with the Commission, which are available for inspection in the manner
set forth under "Company Available Information."
THE COMPANY AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FISCAL PERIOD TRANSITION PERIOD
ENDED ENDED
OCTOBER 31, OCTOBER 31,
1997 1996(1)
------------- -----------------
<S> <C> <C>
Revenues...................................... $190,536 $ 89,063
Income before provision for income taxes...... 1,290 215
Net income.................................... 755 91
Earnings per share of common stock............ 0.09 0.01
Working capital............................... 59,779 56,955
Total assets.................................. 103,136 100,393
Weighted average shares outstanding........... 8,267 8,141
<CAPTION>
NINE MONTHS ENDED
JULY 31,
-------------------------------
1998 1997
(UNAUDITED)
<S> <C> <C>
Revenues...................................... $148,309 $142,530
Income before provision for income taxes...... 2,082 784
Net income.................................... 833 455
Basic and diluted earnings per share of common
stock........................................ 0.10 0.06
Shares used to compute basic earnings per
common share................................. 8,375 8,247
Shares used to compute diluted earnings per
common share................................. 8,388 8,247
<CAPTION>
QUARTER ENDED
-------------------------------
JULY 31, OCTOBER 31,
1998 1997
------------- -----------------
(UNAUDITED)
<S> <C> <C>
Total assets.................................. $106,585 $103,136
</TABLE>
- --------
(1) Reflects the six month period from May 1, 1996 through October 31, 1996,
during which time the Company changed its fiscal year end from April 30 to
October 31 in connection with the Fluor Daniel Transactions (as defined
herein). See "THE TENDER OFFER--16. Interests of Certain Persons in the
Offer and the Merger--Beneficial Ownership of Shares."
11
<PAGE>
Except as otherwise noted in this Offer to Purchase, all of the information
with respect to the Company set forth in this Offer to Purchase has been
derived from publicly available information. Although Purchaser has no
knowledge that any such information is untrue, Purchaser takes no
responsibility for the accuracy or completeness of information contained in
this Offer to Purchase with respect to the Company or for any failure by the
Company to disclose events which may have occurred or may affect the
significance or accuracy of any such information.
CERTAIN COMPANY PROJECTIONS
In the course of discussions giving rise to the Merger Agreement (see "The
TENDER OFFER--11. Contacts with the Company; Background of the Offer and the
Merger"), representatives of the Company furnished representatives of Parent
certain business and financial information that was not publicly available.
The information provided to Parent included income and cash flow statements
which projected for the Company and its subsidiaries, on a consolidated basis,
for the fiscal year ending October 31, 1998 (excluding adjustments for non-
recurring charges), (a) gross revenue of approximately $193.6 million, (b) net
revenue of approximately $116.5 million, (c) total project profit of
approximately $64.2 million, (d) gross profit of approximately $44.3 million,
(e) total indirect expenses of approximately $35.7 million, (f) earnings
before interest, taxes, depreciation and amortization of approximately $9.1
million, and (g) earnings before interest and taxes of approximately $5.8
million. Subsequently, Parent received revised financial information which
projected for the Company and its subsidiaries, on a consolidated basis, for
the fiscal year ending October 31, 1998 (including adjustments for non-
recurring charges), (a) gross revenue of approximately $192.6 million, (b)
gross margin of approximately $36.2 million, (c) selling, general and
administrative costs of approximately $32.9 million, (d) earnings before
interest and tax of approximately $3.3 million, (e) interest income of
approximately $700,000, and (f) earnings before tax of approximately $4.0
million. None of such projected financial information provided by the Company
to Parent was prepared for publication or with a view to complying with the
published guidelines of the Commission regarding projections or with the
American Institute of Certified Public Accountants Guide for Prospective
Financial Statements, and such information is being included in the Offer to
Purchase solely because it was furnished to Parent in connection with the
discussions giving rise to the Merger Agreement. The independent accountants
of the Company have neither examined nor compiled the prospective financial
information set forth below and, accordingly, do not express an opinion or any
other form of assurance with respect thereto. The reports of such independent
accountants incorporated by reference in this Offer to Purchase relate to the
historical financial information of the Company and do not extend to the
prospective financial information and should not be read to do so.
THE COMPANY HAS ADVISED PURCHASER AND PARENT THAT ITS INTERNAL FINANCIAL
FORECASTS (UPON WHICH THE PROJECTIONS PROVIDED TO PARENT WERE BASED IN PART)
ARE, IN GENERAL, PREPARED SOLELY FOR INTERNAL USE AND CAPITAL BUDGETING AND
OTHER MANAGEMENT DECISIONS, AND ARE SUBJECTIVE IN MANY RESPECTS AND THUS
SUSCEPTIBLE TO INTERPRETATIONS AND PERIODIC REVISION BASED ON ACTUAL
EXPERIENCE AND BUSINESS DEVELOPMENTS. BECAUSE THE ESTIMATES AND ASSUMPTIONS
UNDERLYING THE PROJECTIONS ARE INHERENTLY SUBJECT TO SIGNIFICANT ECONOMIC AND
COMPETITIVE UNCERTAINTIES AND CONTINGENCIES WHICH ARE DIFFICULT OR IMPOSSIBLE
TO PREDICT ACCURATELY AND ARE BEYOND THE COMPANY'S, PURCHASER'S AND PARENT'S
CONTROL, THERE CAN BE NO ASSURANCE THAT THE PROJECTIONS WILL BE REALIZED.
ACCORDINGLY, IT IS EXPECTED THAT THERE WILL BE DIFFERENCES BETWEEN ACTUAL AND
PROJECTED RESULTS, AND ACTUAL RESULTS MAY BE MATERIALLY HIGHER OR LOWER THAN
THOSE PROJECTED. THE INCLUSION OF THIS INFORMATION SHOULD NOT BE REGARDED AS
AN INDICATION THAT THE COMPANY, PARENT OR ANYONE ELSE WHO RECEIVED THIS
INFORMATION CONSIDERED IT A RELIABLE PREDICTOR OF FUTURE EVENTS, AND THIS
INFORMATION SHOULD NOT BE RELIED ON AS SUCH. NONE OF PARENT, PURCHASER OR ANY
OF THEIR RESPECTIVE REPRESENTATIVES ASSUMES ANY RESPONSIBILITY FOR THE
VALIDITY, REASONABLENESS, ACCURACY OR COMPLETENESS OF THE PROJECTED FINANCIAL
INFORMATION.
12
<PAGE>
8. CERTAIN INFORMATION CONCERNING PURCHASER AND PARENT.
GENERAL
Purchaser is a Delaware corporation with its principal executive offices
located at 2790 Mosside Boulevard, Monroeville, Pennsylvania 15146-2792.
Purchaser is a wholly-owned subsidiary of Parent which was organized to
acquire the Company and has not conducted any unrelated activities since its
organization.
Parent is a Delaware corporation with its principal office located at 2790
Mosside Boulevard, Monroeville, Pennsylvania 15146-2792. Parent provides a
wide range of environmental management services and technologies including the
assessment, engineering, and remediation of situations involving hazardous
materials and pollution prevention and minimization. Parent was incorporated
in 1983; the earliest antecedent of the Company commenced operations in
California in 1926.
DIRECTORS AND OFFICERS
The name, business address, citizenship, present principal employment or
occupation and five-year employment history of each of the executive officers
of Parent and Purchaser are set forth in Schedule II hereto.
Except as described in this Offer to Purchase (i) none of Parent or
Purchaser nor, to the best of Parent's knowledge, any of the persons listed in
Schedule II hereto, or any associate or majority-owned subsidiary of Parent or
any of the persons so listed, beneficially owns or has any right to acquire
directly or indirectly any Shares or has any contract, arrangement,
understanding or relationship with any other person with respect to any
Shares, including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or the voting of any
Shares, joint ventures, loan or option arrangements, puts or calls, guaranties
of loans, guaranties against loss, or the giving or withholding of proxies,
and (ii) none of Parent or Purchaser nor to the best knowledge of Parent, any
of the other persons referred to above, or any of the respective directors,
executive officers or subsidiaries of any of the foregoing, has effected any
transaction in any Shares during the past 60 days.
Except as set forth in this Offer to Purchase, since January 1, 1995,
neither Parent or Purchaser nor, to the best knowledge of Parent, any of the
persons listed on Schedule II hereto, has had any transaction with the Company
or any of its executive officers, directors or affiliates that is required to
be reported under the rules and regulations of the Commission applicable to
the Offer. Except as set forth in this Offer to Purchase, since January 1,
1995 there have been no contracts, negotiations or transactions between
Parent, Purchaser, or any of their subsidiaries or, to the best knowledge of
Parent, any of the persons listed in Schedule II to this Offer to Purchase, on
the one hand, and the Company or its affiliates, on the other hand, concerning
a merger, consolidation or acquisition; a tender offer for or other
acquisition of securities of any class of the Company; an election of
directors of the Company; or a sale or other transfer of a material amount of
assets of the Company or any of its subsidiaries.
13
<PAGE>
SUMMARY FINANCIAL INFORMATION
The following tables set forth certain selected consolidated financial
information with respect to Parent and its subsidiaries excerpted from the
information contained in Parent's Annual Report on Form 10-K for the fiscal
year ended March 27, 1998 and Parent's Quarterly Reports on Form 10-Q for the
periods ended June 26, 1998 and June 27, 1997. The following summary is
qualified in its entirety by reference to the more comprehensive financial
information included in such documents, including the financial statements and
related notes contained therein as well as other documents filed by Parent
with the Commission, which are available for inspection in the manner set
forth under "Parent Available Information."
PARENT AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED FISCAL YEAR ENDED
------------------ -----------------------------
JUNE 26, JUNE 27, MARCH 27, MARCH 28, MARCH 29,
1998 1997 1998 1997 1996
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Summary of Earnings Data:
Revenues.................... $225,188 $98,181 $442,216 $362,131 $400,042
Loss from continuing
operations (net of
preferred stock
dividends)................. (20,860) (4,447) (12,527) (13,693) (3,654)
Income (loss) per share from
continuing operations
(basic and diluted)........ (1.76) (0.46) (1.28) (1.48) (.41)
Weighted average shares..... 11,881 9,742 9,737 9,227 8,982
</TABLE>
<TABLE>
<CAPTION>
AT JUNE 26, AT JUNE 27, AT MARCH 27, AT MARCH 28,
1998 1997 1998 1997
----------- ----------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Balance Sheet Data:
Working capital............ $108,030 $ 95,538 $74,924 $110,705
Total assets............... 834,157 337,280 709,217 342,531
Long-term debt............. 369,209 65,608 284,697 65,874
Long-term accrued
liabilities............... 35,104 12,705 27,528 15,184
Stockholders' equity....... 228,611 165,099 148,150 168,853
</TABLE>
PARENT AVAILABLE INFORMATION
Parent is subject to the informational requirements of the Exchange Act and,
in accordance therewith, files reports relating to its business, financial
condition and other matters. Information, as of particular dates, concerning
Parent's directors and officers, their remuneration, stock options and other
matters, the principal holders of Parent's securities and any material
interest of such persons in transactions with Parent is required to be
disclosed in proxy statements distributed to Parent's stockholders and filed
with the Commission. Such reports, proxy statements and other information
should be available for inspection at the Commission and copies thereof should
be obtainable from the Commission in the same manner as is set forth with
respect to the Company in Section 7.
9. SOURCE AND AMOUNT OF FUNDS.
Purchaser estimates that the total amount of funds required to purchase
Shares pursuant to the Offer and to complete the Merger will be approximately
$71.4 million (including approximately $2.0 million for payment of estimated
costs and expenses).
14
<PAGE>
Parent, IT Corporation, a wholly-owned subsidiary of Parent ("IT"), certain
other direct and indirect subsidiaries of Parent (including Purchaser) are
party to a credit agreement dated as of February 25, 1998, as amended and
restated as of June 11, 1998 (as amended to date, the "Credit Facility"), with
Citicorp USA, Inc. ("Citicorp" and, in its capacity as administrative agent,
the "Administrative Agent") and BankBoston, N.A. ("BankBoston" and, in its
capacity as agent, together with the Administrative Agent, the "Agents"),
individually and as agent banks for a group of lenders, and those lenders,
that provides for a term loan and revolving credit facilities of up to $413
million in the aggregate. The Credit Facility consists of an eight-year
amortizing term loan of $228 million and a six-year revolving credit facility
of up to $185 million.
The proceeds of revolving credit loans made to Parent (or a subsidiary of
Parent) under the Credit Facility will be used to finance the Offer and the
Merger. Approximately $51.0 million of proceeds from the revolving loans and
from Parent's cash on hand will be made available to Purchaser. These funds,
together with the Company's cash on hand (a portion of which will be loaned to
Purchaser), will be used by Purchaser to pay for Shares accepted for payment
in the Offer and to pay cash consideration in the Merger. Existing cash and
the proceeds of revolving credit loans will be used to pay certain expenses
and costs related to the Offer and the Merger. The proceeds of revolving loans
made under the Credit Facility also will be used to provide working capital
for Parent and its subsidiaries (including, after the Merger, the Company and
its subsidiaries) and for general corporate purposes of Parent and its
subsidiaries.
The availability of financing under the Credit Facility is subject to the
following conditions: (i) no default, (ii) continued accuracy of
representations and warranties, (iii) no material adverse change with respect
to Parent or certain of its principal operating subsidiaries and (iv) certain
other conditions customary for credit facilities of this type.
The Credit Facility also requires that, with respect to the Offer and the
Merger, (i) revolving credit availability under the Credit Facility shall be
at least equal to $25 million plus the amount necessary to complete the Merger
on the date of the purchase of Shares pursuant to the Offer, (ii) average
revolving credit availability under the Credit Facility after subtracting the
amount of revolving loans made to finance the purchase of Shares in the Offer,
shall not be less than $25 million for the 60 days prior to the date of such
purchase, (iii) the Company have at least $15 million of cash and marketable
securities on the date of purchase of Shares pursuant to the Offer, and that,
not later than the time of completion of the Merger, such cash be used to
purchase Shares accepted for payment in the Offer or to complete the Merger or
be applied to repay revolving loans under the Credit Facility, (iv) the Board
shall have recommended that stockholders tender their Shares in the Offer, (v)
the Merger be completed no later than February 15, 1999, and that all
conditions to the Merger contained in the Merger Agreement are satisfied or
waived with the consent of the lenders, and (vi) the Merger Agreement shall
not be amended, waived or modified in any material respect without approval of
the Agents and the lenders.
The Credit Facility is secured by a security interest in substantially all
of the assets of Parent and its subsidiaries (including the Shares acquired by
Purchaser upon completion of the Offer and the assets of the Company and its
subsidiaries).
Parent expects that the Credit Facilities will provide sufficient
availability to finance the Offer and the Merger and related costs and
expenses and to provide for Parent's and its subsidiaries' (including the
Company's) ongoing working capital needs.
The term loans made under the Credit Facility bear interest at a rate equal
to LIBOR plus 2.50% per annum (or Citibank's base rate plus 1.50% per annum)
and revolving loans made under the Credit Facility bear interest at a rate
equal to LIBOR plus 2.00% per annum (or Citibank's base rate plus 1.00% per
annum) through no later than 30 days from the end of Parent's fiscal quarter
ending December 25, 1998, with certain exceptions to be determined as of the
date of Parent's filing a compliance certificate regarding its financial
position in accordance with the Credit Facility, with adjustments thereafter
based on the ratio of Parent's consolidated total debt to consolidated EBITDA.
A commitment fee will accrue on the portion of the revolving credit facility
that is unused from time to time at a rate initially equal to 0.375% per
annum, subject to adjustment based on the ratio of
15
<PAGE>
Parent's consolidated total debt to consolidated EBITDA. As of October 29,
1998, based on the prevailing one-month LIBOR rate of 5.22%, the interest rate
applicable to revolving loans under the Credit Facility is estimated to be
approximately 7.22%.
The term loan made under the Credit Facility amortizes on a semi-annual
basis in aggregate annual installments of $4.5 million for the first six years
after June 1998, with the remainder payable in eight equal quarterly
installments in the seventh and eighth years thereafter. Parent will also be
required to prepay the loans under the Credit Facility with the net proceeds
of asset sales and certain debt and equity financings, and loans under the
Credit Facility will be required to be prepaid with a portion of Parent's
consolidated excess cash flow.
The Credit Facility includes certain representations and warranties and
covenants customary for facilities of this type, including: (i) financial
covenants consisting of a minimum fixed charge coverage ratio, a minimum
interest expense coverage ratio, a maximum leverage ratio, a minimum liquidity
requirement, a minimum EBITDA requirement (applicable only in 1998), a maximum
capital expenditure limitation and a minimum net worth requirement; (ii)
maintenance of cash concentration accounts and lockboxes, (iii) preservation
of corporate existence, compliance with laws, payment of taxes, maintenance of
properties and insurance and financial and other reporting requirements; and
(iv) limitations (subject to certain exceptions) on indebtedness, guarantees,
liens, lease obligations, mergers and acquisitions, sales of assets and other
fundamental changes, joint ventures and other investments, transactions with
affiliates, dividends and stock repurchases and redemptions, prepayment or
modification of debt, and certain hedging obligations. The Credit Facility
also includes customary events of default, including payment defaults,
breaches of representations and warranties, covenant defaults, cross defaults
to other indebtedness, bankruptcy events, defaults in satisfaction of money
judgments, material adverse change, certain events under the Employee
Retirement Income Security Act of 1974, as amended, a change of control of the
Parent.
Purchaser's obligation to purchase Shares tendered pursuant to the Offer is
not subject to financing.
10. CERTAIN TRANSACTIONS AMONG PARENT, THE COMPANY AND THEIR RESPECTIVE
AFFILIATES.
Certain affiliates of Parent and FD have entered into, or proposed to
perform, a number of contracts in the ordinary course of business. IT is a
subcontractor to Fluor Daniel Fernald, Inc. ("FDF"), a wholly-owned subsidiary
of FD. Pursuant to the multi-year subcontract, which was awarded in September
1997, IT anticipates performing in excess of $120 million in remediation
services in connection with remediation of the United States Department of
Energy's Fernald Environmental Management Project. IT is in negotiation with
FDF with respect to additional compensation or work resulting from changed
conditions at the site. Also with respect to the Fernald facility, IT has been
awarded an additional subcontract to perform approximately $305,000 in
stabilization testing regarding certain wastes at the facility. In September
1998, IT submitted a competitive bid (but to date has not been awarded a
contract) to perform, as a subcontractor to FDF, certain accelerated waste
retrieval services at the project, which FDF has publicly estimated to involve
between $25 million and $35 million of work. In October 1998 IT submitted a
competitive bid (but to date has not been awarded a contract) to perform, as a
subcontractor to FDF, additional waste removal, stabilization, and disposal
services at the project, which FDF has publicly estimated to involve between
$20 million and $25 million of work. In addition, in October 1997, FDF awarded
OHM Remediation Services Corp. ("OHMRSC"), an indirect wholly-owned subsidiary
of Parent, a subcontract to perform approximately $250,000 in engineering
studies at the facility. FDF has an option, which is exercisable until March
1999, to order from OHMRSC approximately $529,000 in remediation services with
respect to previously-studied thorium wastes.
In connection with the Merger and the Offer, the Company and FD have entered
into the Amended and Restated Marketing Agreement, dated as of October 27,
1998, among the Company, FD and Parent (the "Amended Marketing Agreement"),
described in "THE TENDER OFFER--14. The Merger Agreement and Related
Agreements."
16
<PAGE>
11. CONTACTS WITH THE COMPANY; BACKGROUND OF THE OFFER AND THE MERGER.
Background of the Transaction: Past Contracts, Transactions and Negotiations
with Parent and Purchaser
In June, 1998, Parent was informally contacted by BT Alex. Brown regarding
Parent's possible interest in a transaction with the Company. At that time,
Parent did not express a preliminary interest in an acquisition.
However, in late July 1998, Parent was again approached by BT Alex. Brown, the
Company and Parent entered into the Confidentiality Agreement dated July 28,
1998 and Parent was provided with non-public information about the Company.
During August 1998, Parent conducted a due diligence review of the Company and
met with Mr. Walter C. Barber, President and Chief Executive Officer of the
Company, and other members of the Company's senior management to discuss the
desirability of combining operations and general approaches to a potential
acquisition, to exchange non-public information and to review likely synergies
that could be created in a combination.
On September 9, 1998, following authorization by the Board of Directors of
Parent, Parent submitted a non-binding letter of interest outlining a proposed
acquisition of the Company (the "September 9 Proposal"). In the September 9
Proposal, Parent proposed to acquire all of the issued and outstanding Shares
for aggregate cash in the range of $65 to $70 million. The September 9
Proposal contemplated a tender offer to the stockholders, which would be
conditioned on the ability of Parent to acquire in excess of 50% of the Shares
in the proposed tender offer, the continuation of the existing marketing
agreement between FD and the Company and agreement on specific due diligence
issues in addition to other customary conditions to be contained in a
definitive merger agreement. The September 9 Proposal was also subject to
Parent's completing a due diligence review of the Company.
In a telephone conversation with BT Alex. Brown on September 11, 1998,
Philip O. Strawbridge, Senior Vice President and Chief Administrative Officer
of Parent, indicated a price of $8.00 per Share in the proposed tender offer
and Parent's willingness to consider increasing the price to $8.50 per Share
if FD would finance a portion of the transaction. They also discussed the
possibility of Parent making payments to FD in exchange for certain revenue
commitments in a new marketing agreement.
Following the meetings of the Board on September 10 and 11, 1998, there were
several telephone conversations between BT Alex. Brown and Mr. Strawbridge
regarding terms of a possible transaction and one telephone conversation
between management of FD and Parent regarding a possible new marketing
agreement. As a result of these conversations, Parent submitted a revised non-
binding letter of interest outlining a proposed acquisition of the Company
(the "September 16 Proposal"). In the September 16 Proposal, Parent proposed
to acquire all of the issued and outstanding Shares for $8.50 per Share in
cash in a tender offer to the stockholders. The September 16 Proposal was
expressly conditioned on the ability of Parent to acquire in excess of 50% of
the Shares, the Company having available at least $19 to $20 million in cash,
the making by FD of a $20 million subordinated loan to Parent to be used in
financing the acquisition, FD and the Company entering into a new, five-year
marketing agreement that would generate certain levels of annual revenues to
the Company and Parent, and for which FD would receive annual payments
totaling $3.0 million, and other conditions to be contained in a definitive
merger agreement. The September 16 Proposal was also subject to Parent's
completing a due diligence review of the Company.
On September 18, 1998 legal counsel for Parent distributed a proposed draft
merger agreement to the Company, FD and BT Alex Brown.
On September 22, 1998, the Board met to consider Parent's September 16
Proposal. At that meeting, it was decided to proceed with further negotiations
and the Special Committee was established. Parent's legal counsel and legal
counsel for the Special Committee began negotiations regarding the draft
merger agreement.
Between September 22, 1998 and October 5, 1998, representatives of FD and
Parent, along with BT Alex. Brown, discussed the possible terms of a loan from
FD to Parent and a possible new marketing agreement between FD and the Company
following the proposed acquisition. On October 4, 5 and 6, 1998, Mr. David
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Myers, Group President--Industrial of FD and a director of the Company, and
Mr. Strawbridge discussed the loan and the new marketing agreement requested
by Parent in its September 16 Proposal. Mr. Strawbridge indicated that, if no
loan from FD was possible and the new marketing agreement did not include
revenue commitments, Parent would lower the price set forth in the September
16 Proposal to $8.25 per Share and would not pay FD annual payments in
connection with the new marketing agreement. During this period, legal counsel
for the Special Committee negotiated terms of the proposed merger agreement
with FD and legal counsel for Parent, including the Minimum Condition,
approval of changes to the Offer after a definitive merger agreement was
executed by the parties and several other provisions.
At a regularly scheduled meeting of the Board of Directors of Parent held on
October 6, 1998, members of management of Parent made a comprehensive
presentation regarding the Company, its operations, financial condition and
competitive position, as well as the potential synergies that could be
realized from a combination between the Company and Parent and the benefits to
be derived from the proposed new marketing agreement. Parent's Board of
Directors also discussed the terms of and the financing for the transaction,
including the availability of cash at the Company and the alternatives
available to Parent in light of FD's decision not to provide the loan
requested in Parent's proposal. Management updated the Board of Directors of
Parent on the progress of negotiations with Parent's lenders regarding
amendments to the Credit Facility that would be required in order to
consummate the transaction. Following a full discussion of the proposed
transaction, it was the consensus of Parent's Board of Directors that Parent
should proceed with the acquisition of the Company. Final approval of the
acquisition of the Company and the terms and adequacy of the financing for the
acquisition was delegated to the Executive Committee of Parent's Board of
Directors.
On October 13, 1998 the Executive Committee of Parent's Board of Directors
held a telephonic meeting at which they reviewed financial and operating data
for the Company, the final terms of the proposed acquisition of the Company
and the arrangements for financing the acquisition with borrowings under the
Credit Facility and available cash at the Company. After discussion and
pursuant to the authority delegated to the Executive Committee at the October
6, 1998 meeting of Parent's Board of Directors, the Executive Committee
approved the transaction and directed management to complete negotiation of
the definitive merger agreement as soon as practicable.
Parent's legal counsel and legal counsel for the Special Committee continued
to negotiate the proposed draft merger agreement and FD and Parent continued
to negotiate the proposed marketing agreement through October 27, 1998. The
changes finally agreed upon in respect of the Merger Agreement included:
(i) imposing as a condition to the Offer the Minimum Condition, which requires
a majority of the Shares not held by FD to be tendered, (ii) reducing the fees
payable by the Company to Parent on certain terminations of the Merger
Agreement from $2.5 million to $1.5 million (plus reimbursement of expenses of
up to $400,000); (iii) requiring the approval of the Special Committee for
certain changes to or conditions of the Offer; and (iv) eliminating a
provision prohibiting the Company from entering into an agreement with a third
party that was more favorable to the stockholders unless it first provided
Parent the opportunity to make an offer at least as favorable as such third
party offer. As agreed between Parent and FD, no annual payments are to be
made by Parent to FD and no revenue commitments are made by FD under the final
Amended Marketing Agreement.
On October 26, 1998, Parent advised the Company that it had received the
necessary consent from its lenders to enter into the Merger Agreement and
consummate the Offer, and that it had completed its selective due diligence.
Parent further advised the Company that it was prepared to immediately
commence and diligently complete all regulatory and governmental filings
necessary to effectuate a transaction and was prepared to execute the Merger
Agreement and Amended Marketing Agreement.
On the afternoon of October 27, 1998, the Special Committee and the full
Board held a special telephonic meeting with legal counsel to the Special
Committee, legal counsel to FD and representatives of BT Alex. Brown
participating, and discussed a revised proposal from a third party (the "Third
Party Proposal") and the status of negotiations with Parent regarding the
proposed transaction, including the Amended Marketing Agreement. Legal counsel
to the Special Committee reviewed the Third Party Proposal and the terms of
the Merger
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Agreement. Legal counsel to FD reviewed the terms of the proposed Amended
Marketing Agreement. BT Alex. Brown then presented a review of its financial
analysis of the proposed tender offer of $8.25 per Share for all Shares and
then presented its opinion to the Special Committee and the full Board that
the consideration to be received in the proposed transaction was fair from a
financial point of view to the stockholders, other than FD, Parent or any
affiliate either thereof (the "Public Stockholders"). At the conclusion of the
presentation by BT Alex. Brown, the FD representatives on the Board informed
the Special Committee that, other than the Amended Marketing Agreement, there
were no agreements or understandings between FD and Parent other than existing
contractual arrangements in the ordinary course of business.
The Special Committee then held a separate meeting without representatives
of FD present, reviewed the Third Party Proposal and determined it was not in
the best interests of the stockholders to delay entering into the Merger
Agreement with Parent given, among other things, the conditions that proposal
contained regarding financing, the proposed schedule of due diligence and the
need to negotiate a definitive agreement. Legal counsel to the Special
Committee discussed the Committee's fiduciary duties in reviewing and
approving the proposed transaction with Parent. The Special Committee
determined that, based on the opinion of BT Alex. Brown as to the fairness of
the consideration from a financial point of view to the Public Stockholders
and all other relevant factors in relation to the proposed transaction with
Parent, it would recommend that the full Board of Directors approve the
transaction as in the best interests of the Company and the stockholders.
After the separate meeting of the Special Committee, the full Board
continued its meeting. The Special Committee discussed with the Board its
review of the terms and conditions of the proposed transaction with Parent and
the Third Party Proposal. At the conclusion of those discussions and upon the
unanimous recommendation of the Special Committee, the Board of Directors
unanimously voted to approve the Merger Agreement and the Amended Marketing
Agreement and to terminate discussions with the third party (as required by
the Merger Agreement).
Following the Board meeting, the Special Committee's legal counsel and
Parent's legal counsel continued the final negotiation of the transaction
documents. The Merger Agreement and Amended Marketing Agreement were executed
in the evening of October 27, 1998, and press releases were issued by the
parties announcing the execution of the Merger Agreement on the morning of
October 28, 1998.
12. PURPOSE OF THE OFFER AND THE MERGER.
The purpose of the Offer is for Purchaser to acquire all of the Shares. The
purpose of the Merger is for Parent to acquire the remaining equity interest
in the Company not acquired pursuant to the Offer. Upon consummation of the
Merger, the Company will become a direct, wholly-owned subsidiary of Parent.
The acquisition of Shares has been structured as a cash tender offer followed
by a cash merger in order to provide for the prompt and orderly cancellation
of all Shares (other than Excluded Shares) and the transfer of ownership of
the equity interest in the Company held by the Company's stockholders (other
than the Excluded Shares) from such stockholders to Parent.
Under the DGCL, the approval of the Board and the affirmative vote of the
holders of a majority of the Shares may be required to approve and adopt the
Merger Agreement and the transactions contemplated thereby, including the
Merger. If a vote of the stockholders of the Company is required, the Company
has agreed in the Merger Agreement to take all action necessary to convene a
special meeting of its stockholders (the "Stockholders Meeting") as promptly
as practicable after the consummation of the Offer for the purpose of
considering and taking action on the Merger Agreement and the transactions
contemplated thereby. The Proxy Statement containing detailed information
concerning the Merger will be furnished to stockholders of the Company in
connection with any Stockholders Meeting. Notwithstanding the foregoing, if
Parent, Purchaser and/or any other subsidiary of Parent shall acquire at least
90% of the Shares, the parties shall take all necessary and appropriate action
to cause the Merger to become effective as soon as practicable after
consummation of the Offer without a Stockholders Meeting in accordance with
Section 253 of the DGCL.
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The Board, acting on the unanimous recommendation of the Special Committee,
has unanimously determined that the transactions contemplated by the Merger
Agreement are fair to, and in the best interests of the Company stockholders,
and have approved and adopted the Merger Agreement and the transactions
contemplated thereby. As described above, the only remaining corporate action
of the Company that may be required is the approval and adoption of the Merger
Agreement and the transactions contemplated thereby by the holders of a
majority of the Shares. If Purchaser acquires the Minimum Share Number, it
will have sufficient voting power to cause the approval and adoption of the
Merger Agreement and the transactions contemplated thereby without the
affirmative vote of any other stockholder of the Company. If Purchaser
acquires at least 90% of the Shares in the Offer, under Delaware law it will
be able to consummate the Merger without a vote of the Company's stockholders.
Purchaser reserves the right to purchase additional Shares in the open market
after termination of the Offer.
Pursuant to the Merger Agreement, FD has agreed, among other things, to
tender in, and not withdraw from, the Offer, all Shares (including the FD
Shares representing approximately 52.3% of the Shares) owned by it or any of
its affiliates.
13. PLANS FOR THE COMPANY.
It is anticipated that, following the consummation of the Offer, the
Company's business will be integrated into Parent's operations. Parent plans
to reorganize the Company into Parent's existing business line/project
delivery organizational structure, which is expected to produce administrative
and operational efficiencies and to result in the elimination of redundant
positions in the combined organization and the closure or consolidation of
certain Parent and Company locations. Pursuant to the Merger Agreement,
immediately following the delivery to the Depositary of Parent's notice of
acceptance of Shares pursuant to the Offer (the "Notice of Acceptance"), if
the Minimum Condition has been met, Parent shall be entitled to designate four
of the six authorized directors on the Board (the "Parent Directors"). The
Parent Directors shall be Anthony J. DeLuca, Philip O. Strawbridge, James G.
Kirk and James R. Mahoney. Immediately following delivery to the Depositary of
the Notice of Acceptance, the resignations as directors of the Company of
Walter C. Barber, David L. Myers and Ronald G. Peterson, delivered to Parent
in connection with the execution and delivery of the Merger Agreement, shall
be deemed effective and Allan S. Bufferd and Ernie Green, as the remaining
directors of the Company (the "Continuing Directors"), shall execute and
deliver a written consent or shall otherwise take effective action electing
the Parent Directors to the Board. The Continuing Directors shall remain
members of such Board until the Effective Time, and, in lieu of Continuing
Directors, if such directors will not serve, the Company shall use reasonable
efforts to ensure that the Board shall consist of at least two members who are
neither officers, stockholders, designees nor affiliates of Parent or FD or
their respective affiliates (the "Special Directors"). Therefore, Parent will
be entitled to designate a majority of the Board and will control the Company,
subject to certain limitations set forth in the Merger Agreement. Except for
the Merger and as otherwise described in this section and elsewhere herein,
Purchaser and Parent have no current plans or proposals that would result in
an extraordinary corporate transaction, such as a merger, reorganization, or
consolidation of the Surviving Corporation with or into any third entity, the
sale or transfer of substantially all of the Surviving Corporation's assets to
a third party, a material change in the Company's capitalization or dividend
structure or any other material changes in the Surviving Corporation's
corporate structure or business to reorganize the Company. Following the
consummation of the Offer, Parent intends to continue its evaluation and
review the Surviving Corporation's operations and the potential opportunities
for synergies with Parent's operations, and consideration of what, if any,
additional changes would be desirable in light of the results of such
evaluations and reviews.
14. THE MERGER AGREEMENT AND RELATED AGREEMENTS.
The following summary of certain provisions of the Merger Agreement is
presented only as a summary and is qualified in its entirety by reference to
the Merger Agreement, a copy of which is filed as an exhibit to Parent's
Schedule 14D-1.
The Offer. The Merger Agreement provides for the making of the Offer.
Pursuant to the Offer, each tendering stockholder shall receive the Offer
Price for each share tendered in the Offer. Purchaser's obligation to
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accept for payment or pay for Shares is subject to the satisfaction of the
conditions that are described in "THE TENDER OFFER--19. Certain Conditions of
the Offer." Any determination concerning the satisfaction of the terms and
conditions of the Offer will be made by Purchaser in its good faith judgment
and such determination will be final and binding on all tendering
stockholders. Parent expressly reserves the right to increase the price per
Share payable in the Offer (although it has no present intention of doing so)
or to make any other changes in the terms and conditions of the Offer, except
that, pursuant to the Merger Agreement, unless previously approved by the
Special Committee and the Board in writing, Parent may not (i) decrease the
Offer Price, (ii) change the form of consideration payable in the Offer, (iii)
reduce the maximum number of Shares to be purchased in the Offer, (iv) amend
the conditions to the Offer set forth in "THE TENDER OFFER--19. Certain
Conditions of the Offer" to broaden their scope, (v) impose additional
conditions of the Offer or amend any other term of the Offer in any manner
adverse to holders of Shares or extend the Offer if all of the conditions to
the Offer are satisfied or waived, or (vi) amend the Minimum Condition.
Notwithstanding the foregoing, Parent expressly reserves the right, in its
sole discretion (but subject to the terms and conditions of the Merger
Agreement), at any time and from time to time, without the consent of the
Special Committee or the Board, to (i) from time to time extend the Offer
(each such individual extension not to exceed 10 business days after the
previously scheduled Expiration Date), if at the scheduled Expiration Date of
the Offer any of the conditions to the Offer shall not have been satisfied or
waived, until such time as such conditions are satisfied or waived; (ii)
extend the Offer for any period required by any rule, regulation,
interpretation or position of the Commission or the staff thereof applicable
to the Offer; or (iii) extend the Offer for any reason on up to two (2)
occasions in each case for a period of not more than five (5) business days
beyond the latest Expiration Date that would otherwise be permitted under
clause (i) or (ii) of this sentence if on such Expiration Date there shall
have been tendered more than the number of Shares sufficient to satisfy the
Minimum Condition but less than 90% of the Shares, provided the Purchaser
agrees to permanently waive the conditions set forth in paragraphs (b) and (e)
of "THE TENDER OFFER--19. Certain Conditions of the Offer." If all of the
conditions to the Offer set forth in "THE TENDER OFFER--19. Certain Conditions
of the Offer" are not satisfied on any scheduled Expiration Date of the Offer
then, provided that all such conditions are reasonably capable of being
satisfied prior to December 31, 1998, Parent shall extend the Offer from time
to time (each such individual extension not to exceed 10 business days after
the previously scheduled Expiration Date) until such conditions are satisfied
or waived, provided that Parent shall not be required to extend the Offer
beyond December 31, 1998.
Board Representation. Pursuant to the Merger Agreement, immediately
following the delivery of the Notice of Acceptance, if the Minimum Condition
has been met, Parent shall be entitled to designate the Parent Directors as
described above in above section entitled "THE TENDER OFFER--13. Plans for the
Company." Immediately following the election of the Parent Directors, the
Company will use its reasonable efforts to cause persons designated by Parent
to constitute the same percentage as the Parent Directors represent on the
Board of (i) each committee of such Board (other than any committee of such
Board established to take action under the Merger Agreement), (ii) each board
of directors of each subsidiary of the Company and (iii) each committee of
each such board. The Company's obligations to appoint designees of Parent to
the Board shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder.
The Merger. As soon as practicable after the satisfaction or waiver of the
conditions to the Merger, Purchaser or another direct or indirect wholly-owned
subsidiary of Parent will be merged with and into the Company, the separate
corporate existence of Purchaser or of such other subsidiary of Parent, as the
case may be, will cease and the Company will continue as the Surviving
Corporation. The Effective Time will occur at the date and time that a
certificate of merger, in such form as is required by, and executed in
accordance with, the relevant provisions of the DGCL (the "Certificate of
Merger"), is filed with the Secretary of State of the State of Delaware. The
Surviving Corporation shall continue its corporate existence under the laws of
the State of Delaware. The Certificate of Incorporation of the Company in
effect at the Effective Time will be the Certificate of Incorporation of the
Surviving Corporation until duly amended in accordance with the terms thereof
and the DGCL, except that the Article FOURTH of the Certificate of
Incorporation shall be amended such that the Surviving Corporation shall have
the authority to issue 1,000 shares of its common stock, par value $.01 per
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share. The Bylaws of the Company in effect at the Effective Time shall be the
Bylaws of the Surviving Corporation. The directors of Purchaser at the
Effective Time will be the directors of the Surviving Corporation until their
successors are duly elected and qualified, and the officers of the Company at
the Effective Time will be the officers of the Surviving Corporation until
replaced in accordance with the Bylaws of the Surviving Corporation. It is
expected that, immediately following the Effective Time, the Board of
Directors of the Surviving Corporation will appoint Anthony J. DeLuca, Philip
O. Strawbridge, James R. Mahoney and James G. Kirk as the President, Executive
Vice President, Senior Vice President and Senior Vice President and Secretary
of the Surviving Corporation, respectively.
Parent Stock Option. Pursuant to the Merger Agreement, after Purchaser has
accepted for payment Shares tendered pursuant to the Offer (including the
Minimum Share Number), Parent has the irrevocable option (the "Parent Option")
to purchase that number of authorized and unissued shares of the Company's
Common Stock equal to 14% of the Shares outstanding immediately after the
exercise of the Parent Option (the "Option Shares") at a purchase price equal
to the Offer Price. The Company's sole obligation to issue and deliver the
Option Shares is subject to certain conditions set forth in the Merger
Agreement, including the requirement that the number of Option Shares plus the
number of Shares accepted for payment pursuant to the Offer, upon issuance of
the Option Shares, will constitute at least 90% of then outstanding Shares.
Use of Company Cash. Pursuant to the Merger Agreement, the Company has
agreed that prior to the initial Expiration Date it will take all steps
reasonably necessary, after consulting with Parent, to sell any marketable
securities owned by it so that on the initial Expiration Date the Company will
have maximized its available cash and will thereafter until such time as the
Parent Directors are elected invest such cash in overnight investments. Upon
the election of the Parent Directors and at the direction of the Company's
Board, up to $20 million of the available cash of the Company will be loaned
to Parent and evidenced by an interest bearing promissory note payable on
demand. The proceeds of such loan will be delivered to the Depositary to be
used solely to fund the purchase of Shares in the Offer.
Consideration to Be Paid in the Merger. At the Effective Time, each issued
and outstanding Share (other than Excluded Shares), shall be converted into,
and become exchangeable for the Offer Price.
Employee/Director Stock Options. Pursuant to the Merger Agreement, at the
Effective Time, all options to purchase a share of Common Stock (whether
vested or unvested) (each a "Company Option") granted under the Company's
Amended and Restated 1987 Stock Plan, the Company's 1997 Stock Plan and the
Company's Amended and Restated 1995 Director Stock Option Plan, in each case
as amended to the date hereof (the "Stock Plans") that have an exercise price
that is lower than the Offer Price (the "In-the Money Options") will be cashed
out by the Company by payment to each holder of such In-the-Money Options the
difference between the exercise price and the Offer Price. In accordance with
the terms of the Stock Plans or interpretations thereof by the Board, the
Company will notify all holders of Company Options that have an exercise price
that is equal to or higher than the Offer Price (the "Underwater Options"),
promptly after the Effective Time, that the Stock Plans have been terminated
and that, in connection with such termination, the Company will pay to such
holders an amount equal to the number of such Underwater Options (whether vest
or unvested) multiplied by $.10. Pursuant to the provisions of the Merger
Agreement, the Company will make aggregate payments equal to approximately
$116,388. Of that total, Mr. Barber will receive approximately $19,472; Mr.
Glenn V. Batchelder will receive approximately $6,508; Mr. J. Steve Paquette
will receive approximately $5,125; Mr. David L. Backus will receive
approximately $500; Ms. Anne Nolan will receive approximately $2,019; and Ms.
Mary C. Stack will receive approximately $479. The Company will make aggregate
payments to non-employee directors in the amount of $2,119. Of that total,
Mr. Allan S. Bufferd will receive approximately $1,221 and Mr. Ernie Green
will receive approximately $898.
The Board will take the following actions with respect to the Amended and
Restated 1986 Employee Stock Purchase Plan (the "Stock Purchase Plan"): (1)
accelerate the current Payment Period (as defined in the Stock Purchase Plan)
to November 27, 1998 (the "Acceleration Date") and (2) pay each participant in
lieu of each share that could have been purchased under the Stock Purchase
Plan when the Payment Period ends on the
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Acceleration Date, an amount (subject to any applicable withholding tax) in
cash equal to the difference between the Offer Price and the Option Price (as
defined in the Stock Purchase Plan). Pursuant to the provisions of the Merger
Agreement, the Company will make aggregate payments equal to approximately
$91,126. Of that total, Mr. Barber will receive approximately $1,005;
Mr. Batchelder, Mr. Paquette and Ms. Nolan will each receive $0; Mr. Backus
will receive approximately $3,145; and Ms. Stack will receive approximately
$1,933. In addition, all funds contributed to the Stock Purchase Plan which
have not been used to purchase shares of the Common Stock as of the
Acceleration Date will be returned, in cash, without interest, to participants
of the Stock Purchase Plan as soon as administratively feasible after the
Acceleration Date.
Representations and Warranties. The Merger Agreement contains various
representations and warranties of the parties thereto. These include
representations and warranties of the Company, Purchaser and Parent with
respect to corporate existence and power, capitalization, subsidiaries,
corporate authorization relative to the Merger Agreement, governmental
consents and approvals, Commission reports, financial statements, absence of
certain changes or events, litigation and liabilities, employee benefits,
compliance with laws, environmental laws, intellectual property, taxes,
government contracts, documents relating to the Offer and the Merger and other
matters. No representations or warranties made by the Company, Parent or
Purchaser will survive beyond the Effective Time, and no covenants or
agreements made in the Merger Agreement will survive beyond the Effective
Time, except for those covenants or agreements which by their terms
contemplate performance after the Effective Time. Certain of the
representations and warranties of the Company set forth in the Merger
Agreement will not be breached unless the matter constituting the breach would
have a material adverse effect on the financial condition, properties,
business, results of operations or prospects of the Company and its
subsidiaries taken as a whole (a "Company Material Adverse Effect"); provided,
however, that any adverse effect that is caused by conditions affecting the
economy or security markets generally shall not be taken into account in
determining whether there has been a Company Material Adverse Effect and any
adverse effect that is caused by conditions affecting the primary industry in
which the Company currently competes shall not be taken into account in
determining whether there has been a Company Material Adverse Effect (provided
that such effect does not adversely affect the Company in a disproportionate
manner). Certain of the representations and warranties of the Parent set forth
in the Merger Agreement will not be breached unless the matter constituting
the breach would have a material adverse effect on the ability of Parent or
Purchaser to conduct the Offer or consummate the Merger or any of the other
material transactions contemplated by the Merger Agreement (a "Parent Material
Adverse Effect").
Agreements of FD. Pursuant to the terms of the Merger Agreement, FD has
agreed, among other things, to tender in, and not withdraw from, the Offer,
all Shares (including the FD Shares) owned by it and its affiliates. In
addition, FD currently holds an option (the "FD Option") to purchase 1,768,970
Shares which will be canceled upon consummation of the Offer. The FD Option
has an exercise price of $13.1274 per share, which is greater than the Offer
Price, and, if not canceled in connection with the Offer, would expire on
December 11, 1998.
Conduct of Business. The Company has agreed that, prior to the date on which
Parent's representatives are elected to the Board (unless Parent shall
otherwise approve in writing, which approval shall not be unreasonably
withheld or delayed, and except as otherwise expressly contemplated by the
Merger Agreement):
(a) the business of the Company and its subsidiaries will be conducted
only in the ordinary and usual course consistent with past practice;
(b) the Company will not, among other things (i) issue, sell or otherwise
dispose of or encumber any of its subsidiaries' capital stock owned by it;
(ii) amend its charter, bylaws, except for any amendment which will not
hinder, delay or make more costly to Parent the Offer or the Merger; (iii)
split, combine or reclassify its outstanding shares of capital stock; (iv)
declare, set aside or pay any dividend payable in cash, stock or property
in respect of any capital stock; (v) repurchase, redeem or otherwise
acquire or permit any of its subsidiaries to purchase or otherwise acquire,
any shares of its capital stock or any securities convertible into or
exchangeable or exercisable for any shares of its capital stock; or (vi)
adopt a plan of
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complete or partial liquidation or dissolution, merger or otherwise
restructure or recapitalize or consolidate with any Person (as defined in
the Merger Agreement) other than Purchaser or another wholly-owned
subsidiary of Parent;
(c) neither the Company nor any of its subsidiaries will (i) authorize
for issuance or issue, sell or otherwise dispose of or encumber any shares
of, or securities convertible into or exchangeable or exercisable for, or
options, warrants, calls, commitments or rights of any kind to acquire, any
shares of its capital stock of any class or any voting debt (other than
shares of Common Stock issuable pursuant to Company Options outstanding on
the date hereof); (ii) other than in the ordinary and usual course of
business consistent with past practices, transfer, lease, license,
guarantee, sell or otherwise dispose of or encumber any other property or
assets or incur or modify any material indebtedness or other liability
(except for additional borrowings in the ordinary course under lines of
credit in existence on the date hereof); (iii) assume, guarantee, endorse
or otherwise become liable or responsible (whether directly, contingently
or otherwise) for the obligations of any other Person except in the
ordinary course of business consistent with past practices and except for
obligations of subsidiaries of the Company incurred in the ordinary course
of business; (iv) make any loans to any other Person (other than to
subsidiaries of the Company or, customary loans or advances to employees in
connection with business-related travel in the ordinary course of business
consistent with past practices); (v) make any commitments for, make or
authorize any capital expenditures other than in amounts less than $50,000
individually and $250,000 in the aggregate or, by any means, make any
acquisition of, or investment in, assets or stock of any other Person; (vi)
except as may be required by applicable law or by existing contractual
commitments, enter into any new agreements or commitments for any severance
or termination pay to, or enter into any employment or severance agreement
with, any of its directors, officers or employees or consultants except for
those which have been previously disclosed to Parent and reasonable
severance payments made to employees in the ordinary course of business and
consistent with past practices; (vii) except as may be required by
applicable law or by existing contractual commitments, terminate,
establish, adopt, enter into, make any new grants or awards under, amend or
otherwise modify, any compensation and benefit plan or increase or
accelerate the salary, wage, bonus or other compensation of any employees
or directors (except for increases occurring in the ordinary and usual
course of business, which shall include normal periodic performance reviews
and related compensation and benefit increases, but not any general across-
the-board increases) or consultants or pay or agree to pay any pension,
retirement allowance or other employee benefit not required by any existing
compensation and benefit plan; (viii) except as may be required as a result
of a change in law or in GAAP, change any of the accounting principles or
practices used by it; (ix) revalue in any respect any of its material
assets, including writing down the value of inventory or writing-off notes
or accounts receivable, other than in the ordinary course of business
consistent with past practices; (x) settle or compromise any material
claims or litigation or terminate or materially amend or modify any of its
material Contracts or waive, release or assign any material rights or
claims; (xi) make any tax election or permit any insurance policy naming it
as a beneficiary or loss-payable payee to be canceled or terminated; (xii)
take any action or omit to take any action that would cause any of its
representations and warranties herein to become untrue in any material
respect; and (xiii) authorize or enter into any agreement to do any of the
foregoing.
Indemnification. Pursuant to the Merger Agreement, Parent and the Surviving
Corporation will jointly and severally, after the Effective Time, indemnify,
defend and hold harmless, each person who is now, or has been at any time
prior to the date of the Merger Agreement or who becomes prior to the
Effective Time a director, officer, employee or agent of the Company or any of
its subsidiaries (when acting in such capacity), against any costs or expenses
(including reasonable attorneys' fees and expenses), judgments, settlement
amounts, fines, losses, claims, demands, damages or liabilities (collectively,
"Costs") incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal or administrative arising out of
matters existing or occurring prior to or after the Effective Time, whether
threatened, asserted or claimed prior to, at or after the Effective Time,
which is based in whole or in part on, or arising in whole or in part out of
the fact that such person is or was a director (including as a member of the
Special Committee) or officer of the Company or any of its Subsidiaries
including, without limitation, all Costs based in whole or in part on, or
arising in whole or in part out of, or pertaining to the Merger Agreement or
the transactions contemplated thereby, to the fullest extent
24
<PAGE>
that the Company would have been permitted under the DGCL and its certificate
of incorporation, bylaws and other agreements in effect as of the date of the
Merger Agreement to indemnify such individual. In addition, pursuant to the
Merger Agreement, the Company will purchase, and Parent will reimburse the
Company at the Closing (as defined in the Merger Agreement) for the fully
prepaid premium expense incurred for "Prior Acts" Directors' & Officers'
Liability Insurance (the "D&O Insurance") to be effective as of the date of
the Merger Agreement. The term of the D&O Insurance will be six (6) years from
the date of the Merger Agreement without restriction as to when any alleged or
actual wrongful acts or omissions may have occurred up to and including the
date of sale of the FD Shares to Purchaser pursuant to the Offer. Subject to
the provisions and limitations of the Merger Agreement, the D&O Insurance will
provide individual directors and officers liability coverage and corporate
reimbursement coverage. In addition, the D&O Insurance is noncancellable
except for the nonpayment of premium or the ultimate failure of the FD Shares
being purchased by Purchaser.
Conditions to the Merger. Pursuant to the Merger Agreement, if Purchaser
shall have purchased Shares pursuant to the Offer, the respective obligations
of Parent, Purchaser and the Company to consummate the Merger shall be subject
to the fulfillment of each of the following conditions, any or all of which
may be waived in whole or in part by Parent, Purchaser or the Company, as the
case may be:
(a) The Merger Agreement and the Merger shall have been approved and
adopted by the holders of a majority of the Shares;
(b) The waiting period applicable to the consummation of the Merger under
the HSR Act shall have expired or been terminated and, other than filing
the Delaware Certificate of Merger, all filings with any governmental
entity required to be made prior to the Effective Time by the Company or
Parent or any of their respective subsidiaries, with, and all government
consents required to be obtained prior to the Effective Time by the Company
or Parent or any of their respective Subsidiaries in connection with the
execution and delivery of the Merger Agreement and the consummation of the
transactions contemplated thereby by the Company, Parent and Purchaser
shall have been made or obtained (as the case may be), except where the
failure to so make or obtain will not result in either a Company Material
Adverse Effect or a Parent Material Adverse Effect; and
(c) No court or other governmental entity of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, judgment, decree, injunction or other order (whether temporary,
preliminary or permanent) that is in effect and restrains, enjoins or
otherwise prohibits consummation of the transactions contemplated by the
Merger Agreement (collectively, an "Order"), and no governmental entity
shall have instituted any proceeding or formally threatened to institute
any proceeding seeking any such Order and such proceeding or threat remains
unresolved.
The respective obligations of Parent and Purchaser to consummate the Merger
shall be subject to the fulfillment of each of the following conditions, any
or all of which may be waived in whole or in part by Parent:
(a) The representations and warranties of the Company set forth in the
Merger Agreement shall be true and correct in all material respects as of
the date of the Merger Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the
Closing Date (as defined in the Merger Agreement) as though made on and as
of the Closing Date it being understood that representations and warranties
shall be deemed to be true and correct unless the respects in which the
representations and warranties (without giving effect to any "materiality"
limitations or references to "material adverse effect" set forth therein)
are untrue or incorrect in the aggregate is likely to have a Company
Material Adverse Effect; and
(b) The Company and FD shall have performed in all material respects all
obligations required to be performed by it under the Merger Agreement at or
prior to the Closing Date;
The obligations of the Company to consummate the Merger shall be subject to
the fulfillment of each of the following conditions, any or all of which may
be waived in whole or in part by the Company:
(a) The representations and warranties of Parent and Purchaser set forth
in the Merger Agreement shall be true and correct in all material respects
as of the date of the Merger Agreement and (except to the extent
25
<PAGE>
such representations and warranties speak as of an earlier date) as of the
Closing Date as though made on and as of the Closing Date it being
understood that representations and warranties shall be deemed to be true
and correct unless the respects in which the representations and warranties
(without giving effect to any "materiality" limitations or references to
"material adverse effect" set forth therein) are untrue or incorrect in the
aggregate is likely to have a Parent Material Adverse Effect;
(b) Parent and Purchaser shall have performed in all material respects
all obligations to be performed by it under the Merger Agreement at or
prior to the Closing Date.
Acquisition Proposals. Pursuant to the Merger Agreement, the Company has
agreed that neither it nor any of its subsidiaries nor any director or
employee of the Company or its subsidiaries will, and that it will direct and
use its best efforts to cause its and its subsidiaries' agents and
representatives (including any investment banker, attorney or accountant
retained by it or any of its subsidiaries) not to, directly or indirectly
through another person or entity, initiate, solicit or otherwise facilitate
any inquiries or the making of any proposal or offer with respect to a merger,
reorganization, share exchange, consolidation or similar transaction
involving, or any purchase of all or any significant portion of the assets or
any equity securities of, the Company or any of its subsidiaries (any such
proposal or offer being hereinafter referred to as an "Acquisition Proposal").
The Company has further agreed that neither it nor any of its subsidiaries nor
any of their respective directors or employees will, and that it will direct
and use its best efforts to cause its and its subsidiaries agents and
representatives (including any investment banker, attorney or accountant
retained by it or any of its subsidiaries) not to, directly or indirectly
through another person or entity, engage or participate in any negotiations
concerning, or provide any confidential information or data to, or have any
discussions with, any person relating to an Acquisition Proposal, or otherwise
attempt to make or implement an Acquisition Proposal; provided, however, that
if at any time prior to the acceptance for payment of Shares pursuant to the
Offer, the Board determines in good faith, after taking into consideration the
advice of its outside legal counsel, that it is likely to be required in order
for its members to comply with their fiduciary duties under applicable law,
the Company may, in response to an inquiry, proposal or offer for an
Acquisition Proposal which was not solicited subsequent to the date of the
Merger Agreement, (x) furnish non-public information with respect to the
Company to any such person pursuant to a confidentiality agreement on terms
substantially similar to the Confidentiality Agreement entered into between
the Company and Parent prior to the execution of the Merger Agreement and (y)
participate in discussions and negotiations regarding such inquiry, proposal
or offer; and provided, further, that nothing contained in the Merger
Agreement shall prevent the Company or its Board from complying with Rules
14d-9 and 14e-2 promulgated under the Exchange Act with regard to any proposed
Acquisition Proposal.
The Board may withdraw its recommendation of the Merger and the other
transactions contemplated by the Merger Agreement, or approve or recommend or
cause the Company to enter into an agreement with respect to a Superior
Proposal (as defined below), if the Board determines in its good faith
judgment, after taking into consideration the advice of its outside legal
counsel, that it is likely to be required in order for its members to comply
with their fiduciary duties under applicable law; provided, however, that the
Company shall not be entitled to enter into any agreement with respect to a
Superior Proposal unless the Merger Agreement is concurrently terminated in
accordance with its terms. A "Superior Proposal" means any bona fide proposal
to acquire directly or indirectly for consideration consisting of cash and/or
securities more than 50% of the Shares then outstanding or all or
substantially all the assets of the Company and its subsidiaries, taken as a
whole, and otherwise on terms which the Board by a majority vote determines in
its good faith judgment (after consultation with the Company's financial
advisor or another financial adviser of nationally recognized reputation) to
be reasonably capable of being completed (taking into account all material
legal, financial, regulatory and other aspects of the proposal and the Person
making the proposal, including the availability of financing therefor) and
more favorable to the Company's stockholders from a financial point of view
than transactions contemplated by the Merger Agreement.
Termination of the Merger Agreement. Subject to certain conditions and
exceptions set forth in the Merger Agreement, the Merger Agreement may be
terminated at any time prior to the Effective Time, whether before or after
its approval by the stockholders of the Company thereof, (i) by mutual written
consent of the Company
26
<PAGE>
(through the Continuing Directors, the Special Directors or their designated
successors), Parent and Purchaser, by action of their respective boards of
directors; (ii) by either Parent or the Company, by action of their respective
boards of directors if (A) any Order permanently restraining, enjoining or
otherwise prohibiting the Merger shall be entered (whether before or after the
approval by the stockholders of the Company) and such Order is or shall have
become nonappealable, provided that the party seeking to terminate this
Agreement shall have used its reasonable efforts to remove or lift such Order,
or (B) the Minimum Condition shall not have been satisfied on or before
December 31, 1998; (iii) by the Company if (A) (1) Parent fails to commence
the Offer as provided by the Merger Agreement or (2) after December 31, 1998,
Parent shall have failed to accept Shares for payment pursuant to the Offer,
(B) the Offer is terminated or withdrawn pursuant to its terms without any
Shares being purchased thereunder, (C) prior to Parent's purchase of Shares
pursuant to the Offer, (1) the Company enters into a binding written agreement
with respect to a Superior Proposal after fully complying with the terms of
the Merger Agreement and (2) the Company concurrently with such termination
pays to Parent in immediately available funds all expense reimbursements due
Parent pursuant to the terms of the Merger Agreement, including the
termination fee, or (D) there has been a material breach by Parent or
Purchaser of any representation, warranty, covenant or agreement contained in
this Agreement that is not curable or, if curable, is not cured prior to the
earlier of (1) twenty (20) days after written notice of such breach is given
by the Company to Parent and (2) two (2) business days before the date on
which the Offer expires; and (iv) by Parent and Purchaser if (A) after
December 31, 1998, Parent shall not have paid for Shares pursuant to the
Offer, (B) the Board shall have withdrawn or modified its approval or
recommendation of this Agreement in a manner materially adverse to Parent, or
(C) Parent shall have terminated the Offer in accordance with the provisions
of the section entitled "THE TENDER OFFER--19. Certain Conditions of the
Offer."
If the Merger Agreement is terminated for any of the above reasons (subject
to the provisions of the Merger Agreement), the Merger Agreement shall become
void and be of no further effect; provided, however, that such a termination
shall not relieve any party to the Merger Agreement of any liability or
damages resulting from any breach of the Merger Agreement and, provided,
further, that, subject to certain exceptions set forth in the Merger
Agreement, the Company shall reimburse Parent in the amount of $400,000 as
reimbursement for all of Parent's costs and expenses in connection with the
Merger Agreement, the Offer and the Merger. Subject to certain exceptions, the
Company shall promptly, but in no event later than two days after the date of
such request, pay Parent a termination fee of $1.5 million in lieu of any
liability or obligation to pay damages (other than the $400,000 reimbursement
payable to Parent for its costs and expenses) if (i) there shall be an
Acquisition Proposal existing at the time of termination of the Merger
Agreement by Parent and Purchaser and (A) Parent and Purchaser shall have
terminated the Merger Agreement because the Board has withdrawn or modified
its approval or recommendation of the Merger Agreement in a manner materially
adverse to Parent or (B) Parent and Purchaser shall have terminated the Merger
Agreement because of Parent's termination of the Offer in accordance with the
provisions of the section entitled "THE TENDER OFFER--19. Certain Conditions
of the Offer." of the Merger Agreement or (ii) if there shall not have been a
material breach of any representation, warranty, covenant or agreement on the
part of Parent or Purchaser and the Company shall have terminated the Merger
Agreement to accept a Superior Proposal.
Amendment and Waiver. The Merger Agreement can only be amended by a written
agreement executed by the parties signatory thereto.
Expenses. Whether or not the Merger is consummated, all costs and expenses
incurred in connection with the negotiation, execution and delivery of the
Merger Agreement, the Merger and the other transactions contemplated by the
Merger Agreement, including the Offer, shall be paid by the party incurring
such expense, except that expenses incurred in connection with the filing fee
for the Proxy Statement and the printing and mailing of such documents shall
be borne by the Parent.
THE CONFIDENTIALITY AGREEMENT
Pursuant to a letter agreement, dated July 28, 1998 (the "Confidentiality
Agreement"), the Company proposed to disclose to Parent certain non-public or
confidential information in order to evaluate a possible
27
<PAGE>
transaction involving the two companies. Pursuant to the Confidentiality
Agreement, Parent agreed not to use or disclose such confidential information
and to abstain from soliciting executive, management and other key employees
for a period of two (2) years after the date of the Confidentiality Agreement.
THE AMENDED MARKETING AGREEMENT
Worldwide Use of Parent for Environmental Services. Effective upon the
consummation of the Offer, the Amended Marketing Agreement provides that,
subject to the conditions set forth therein, FD and subsidiaries of which FD
owns more than 50% (collectively, the "Fluor Daniel Group"), will promote the
use of Parent and subsidiaries of which Parent owns more than 50%
(collectively, the "IT Group"), on a worldwide basis for certain environmental
services (the "Environmental Services") that are related or incidental to FD's
engineering and construction business. There was no separate monetary
consideration given in connection with the execution of this agreement. The
agreement provides for the continuation of the services under contracts
presently being performed by FD for the Company, and by the Company for FD, on
the terms previously agreed to by such parties under the existing marketing
agreement as well as a Steering Committee consisting of two senior executives
of each of FD and Parent, for purposes of discussing and promoting joint
marketing efforts under the agreement. The Amended Marketing Agreement has a
term of four (4) years. The Amended Marketing Agreement is filed as Exhibit
(c)(2) to the Schedule 14D-1 filed by Parent and Purchaser and is incorporated
herein by reference.
Specified Environmental Services. Subject to specific exceptions set forth
in the Amended Marketing Agreement, the Environmental Services for which the
Fluor Daniel Group will promote the IT Group, are investigation, evaluation,
design, feasibility studies, management and pollution prevention, project
management, remediation, permitting, quality control, start-up assistance,
licensing and consulting (including incidental project finance, procurement,
construction and maintenance) relating to (i) the treatment of groundwater,
wastewater, soil and hazardous waste, or (ii) air emissions controls. The
Environmental Services exclude certain projects, such as FD's Fernald and
Hanford projects and other U.S. Department of Energy management and
operations, operating and maintenance, and management and integration
projects, and certain categories of projects.
The IT Group has committed to use commercially reasonable efforts to perform
Environmental Services as may be requested by FD, but will not be obligated to
provide such services. With respect to any clients common to the Fluor Daniel
Group and the IT Group, the IT Group will have the marketing lead for projects
that primarily involve Environmental Services and FD will have the marketing
lead for projects that primarily involve engineering and construction
services. In addition, pursuant to the Amended Marketing Agreement, the Fluor
Daniel Group and the IT Group have agreed to explore mutually beneficial ways
to involve each other in other future projects.
Restrictions on Environmental Acquisitions. The Amended Marketing Agreement
also provides that the Fluor Daniel Group will not acquire or merge with any
entity which is engaged primarily in performing Environmental Services without
the prior written consent of the Company. If the Fluor Daniel Group acquires
or merges with an entity which is not engaged primarily in performing
Environmental Services, but which performs some Environmental Services, the
Fluor Daniel Group will be permitted to perform Environmental Services through
such entity and the Amended Marketing Agreement will continue on a non-
exclusive basis. However, the Fluor Daniel Group would be required to enter
into discussions with the IT Group with a view to determining whether the IT
Group would have any interest in acquiring the portion of the entity acquired
by the Fluor Daniel Group which performs Environmental Services, other than
services for the United States government (the "Environmental Portion").
If after 60 days following any such acquisition, Parent and the Fluor Daniel
Group have not reached an agreement concerning the Environmental Portion, then
the Fluor Daniel Group will be required to engaged in a good faith effort to
divest the Environmental Portion. If the Fluor Daniel Group does not divest
the Environmental Portion or decide to liquidate or phase out the business of
the Environmental Portion, then the Fluor Daniel Group will give consideration
to any request by Parent that the terms and conditions of the
28
<PAGE>
Amended Marketing Agreement be adjusted to avoid an inequitable hardship to
Parent resulting from any material diminution of value of the Amended
Marketing Agreement arising from such acquisition by the Fluor Daniel Group.
Intercompany Services. The Amended Marketing Agreement also allows for
certain services to be provided between Parent and FD at specified rates of
compensation. The Intercompany Services Agreement, dated October 27, 1998, by
and among Parent, the Company and FD (the "Intercompany Agreement") sets forth
certain terms for performance and payment, as well as a form of written
request for services and work releases. The Intercompany Agreement is filed as
Exhibit (c)(3) to the Schedule 14D-1 filed by Parent and Purchaser and is
incorporated herein by reference.
Offices; Prohibition on Use of FD Name. The Amended Marketing Agreement
provides for the orderly disentanglement of the seven offices of the Company
presently co-located with offices of FD as well as for the Company to promptly
stop using the name and logo of FD, and to obtain such third-party consents,
licenses and permits as may be necessary to allow the complete disentanglement
of the Company and FD promptly following consummation of the Offer.
DISSENTERS' RIGHTS IN THE MERGER
No appraisal rights are available in connection with the Offer. If the
Merger is consummated, however, stockholders of the Company will have certain
rights under the DGCL to dissent and demand appraisal of, and to receive
payment in cash of the fair value of, their Shares. Stockholders who perfect
such rights by complying with the procedures set forth in Section 262 will
have the fair value of their Shares determined by the Delaware trial court and
will be entitled to receive a cash payment equal to such fair value from the
Surviving Corporation. In addition, such dissenting stockholders would be
entitled to receive payment of a fair rate of interest from the date of
consummation of the Merger on the amount determined to be the fair value of
their Shares. In determining the fair value of the Shares, the court is
required to take into account all relevant factors; provided, however, that
any appreciation or depreciation in market value resulting from the
transactions contemplated by the Merger Agreement will be excluded.
Accordingly, such determination could be based upon considerations other than,
or in addition to, the market value of the Shares, including, among other
things, asset values and earning capacity.
THE FOREGOING SUMMARY OF THE RIGHTS OF DISSENTING STOCKHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
STOCKHOLDERS DESIRING TO EXERCISE ANY AVAILABLE APPRAISAL RIGHTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF SECTION 262
INCLUDED HEREWITH IN ANNEX A. THE PRESERVATION AND EXERCISE OF APPRAISAL
RIGHTS ARE CONDITIONED ON STRICT ADHERENCE TO THE APPLICABLE PROVISIONS OF THE
DGCL.
15. GOING PRIVATE TRANSACTIONS
The Merger or another business combination following the purchase of Shares
pursuant to the Offer in which the Purchaser seeks to acquire the remaining
Shares not held by it would have to comply with any applicable Federal law
operating at the time of its consummation. Rule 13e-3 under the Exchange Act
is applicable to certain "going private" transactions. If applicable, Rule
13e-3 would require, among other things, that certain financial information
concerning the Company and certain information relating to the fairness of the
Merger or such other business combination and the consideration offered to
minority stockholders be filed with the Commission and disclosed to minority
stockholders prior to the consummation of the Merger or such other business
combination. However, Rule 13e-3 will not be applicable to the Merger or any
such other business combination if (i) the Shares are deregistered under the
Exchange Act prior to the Merger or other business combination or (ii) the
Merger or other business combination is consummated within one year after the
Purchase of the Shares pursuant to the Offer and the value of the
consideration paid per Share in the Merger or other business combination
(measured at the time of consummation of the Merger) is at least equal to the
Offer Price.
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<PAGE>
16. INTERESTS OF CERTAIN PERSONS IN THE OFFER AND THE MERGER
Consummation of the Offer and the Merger will have certain effects under
certain compensation and incentive plans and arrangements in which officers
and directors of the Company are participants, as summarized below.
Retention Plan. The Company has in place an executive retention plan (the
"Retention Plan") covering six key executives including all executive officers
of the Company. The Retention Plan provides that participating executives will
be paid bonuses as follows: 33% of the executive's 1998 base salary on January
1, 1999; and 67% of the executive's 1998 base salary on January 1, 2000. In
the event a participating executive is terminated because of a change of
control or an involuntary reduction in force, the balance due to such
executive will be paid in full. If a participating executive leaves
voluntarily or is terminated for cause or for lack of performance, the balance
to be paid is forfeited. As of the date hereof, none of the executive officers
of the Company covered by the Retention Plan, other than Mr. Barber, have been
informed by Parent that their employment will be terminated in connection with
the Offer or the Merger.
Severance Plan. The Company has in place a severance plan (the "Severance
Plan") covering 12 employees, including all executive officers of the Company
other than Mr. Barber, which is activated upon a Change of Control of the
Company (as defined in the Severance Plan), which includes the Merger. The
Severance Plan provides for the payment of the following compensation upon the
termination in certain circumstances of a participant's employment with the
Company within one year following a Change of Control of the Company; (i) a
cash lump sum equal to the sum of (a) the participant's annual salary through
the date of such termination, to the extent not theretofore paid, (b) the
participant's target bonus amount, pro-rated for the period ending on the date
of termination, and (c) any deferred compensation and accrued time off with
pay, to the extent not theretofore paid, and (ii) an amount equal to a
multiple of either one or two times the participant's base salary as
determined by the Compensation Committee of the Board. As of the date hereof,
none of the executive officers of the Company covered by the Severance Plan
have been informed by Parent that their employment will be terminated in
connection with the Offer or the Merger. A copy of the Severance Plan has been
filed as Exhibit 4 to the Schedule 14D-9.
Settlement and Release Agreement. Mr. Barber entered into a Settlement and
Release Agreement with the Company dated as of September 11, 1998 (the
"Settlement and Release Agreement"), which has been filed as Exhibit 5 to the
Schedule 14D-9. Pursuant to the Settlement and Release Agreement, Mr. Barber
has agreed to resign his employment with the Company, as well as all offices
and directorships he holds with the Company upon a Change of Control of the
Company (as defined in the Settlement and Release Agreement), which includes
the consummation of the Offer. In exchange for such resignation, the Company
has agreed to provide Mr. Barber with (i) a lump sum payment of $780,000, net
of any federal withholding taxes and other deductions the Company is required
to make by law, and (ii) payment for outplacement services in accordance with
the Company's customary procedures not to exceed $20,000. Pursuant to the
Settlement and Release Agreement, Mr. Barber agrees to release the Company and
any related companies, and their employees and directors, from any claims or
demands based on Mr. Barber's employment with the Company or the termination
of that employment (including all claims under his employment agreement); and
the Company agrees to release Mr. Barber from all claims or demands based on
Mr. Barber's employment with the Company or the termination of that
employment. Mr. Barber further agrees that he will not, from the date of the
Settlement and Release Agreement through June 1, 1999, directly or indirectly,
provide services, advice or other assistance to a competitor of the Company
concerning or with respect to historic clients of the Company.
In addition, the Merger Agreement contains certain provisions with respect
to indemnification of directors and executive officers, advancement of
expenses and maintenance of directors' and officers' liability insurance
subsequent to the Effective Time. See "THE TENDER OFFER--14. The Merger
Agreement and Related Agreements--Indemnification."
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<PAGE>
BENEFICIAL OWNERSHIP OF SHARES
The following table sets forth information as of October 19, 1998 concerning
the ownership of Common Shares by each current member of the Board of
Directors, each of the executive officers named in the Summary Compensation
Table included in the Information Statement attached as Annex A to the
Schedule 14D-9 and all current directors and executive officers of the Company
as a group and each stockholder known by the Company to be the beneficial
owner of more than 5 percent of its outstanding Common Stock. As of October
19, 1998, none of the Parent Directors owned any shares of the Company's
Common Stock. Except as otherwise noted, the persons or entities identified
have sole voting and investment power with respect to such shares.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER** BENEFICIAL OWNERSHIP OF CLASS
-------------------------------------- -------------------- --------
<S> <C> <C>
Ronald G. Peterson............................. 1,000 *
David L. Myers................................. 750 *
Walter C. Barber............................... 173,236(1) 2.0%
Allan S. Bufferd............................... 13,253(2) *
Ernie Green.................................... 6,817 *
J. Steven Paquette............................. 35,815(3) *
David L. Backus................................ 3,215(4) *
Glenn V. Batchelder............................ 52,636(5) *
Anne Nolan..................................... 12,476(6) *
All Current Directors and Executive Officers
(as a group 10 persons)....................... 302,707(7) 3.6%
Fluor Daniel, Inc.
3353 Michelson Drive
Irvine, CA 92698.............................. 6,168,970(8) 60.8%
The TCW Group, Inc.
865 South Figueroa Street
Los Angeles, CA 90017......................... 464,053(9) 5.6%
</TABLE>
- --------
* Represents beneficial ownership of less than 1 percent of the Company's
outstanding Common Stock.
** Addresses are given for beneficial owners of more than 5 percent of the
outstanding Common Stock only.
(1) Includes 142,785 shares subject to options under the Company's 1997 Stock
Plan which are exercisable at October 19, 1998, or within 60 days
thereafter.
(2) Includes 12,213 shares subject to options under the Company's Amended and
Restated 1995 Director Plan exercisable at October 19, 1998, or within 60
days thereafter. The Massachusetts Institute of Technology ("M.I.T.") owns
12,964 shares with respect to which Mr. Bufferd has voting and investment
power by virtue of his position as Deputy Treasurer and Director of
Investments of M.I.T., subject to the policies and procedures of the
Investment Committee of M.I.T. Mr. Bufferd disclaims beneficial owenership
of such shares.
(3) Includes 34,744 shares subject to options granted under the Company's 1997
Stock Plan which are exercisable at October 19, 1998, or within 60 days
thereafter.
(4) Includes 1,000 shares subject to options granted under the Company's 1997
Stock Plan which are exercisable at October 19, 1998, or within 60 days
thereafter.
(5) Includes 52,365 shares subject to options granted under the Company's 1997
Stock Plan which are exercisable at October 19, 1998, or within 60 days
thereafter. Includes 116 shares owned by Mr. Batchelder's spouse. Mr.
Batchelder is deemed to be the beneficial owner of such shares.
31
<PAGE>
(6) Includes 11,960 shares subject to options granted under the Company's 1997
Stock Plan which are exercisable at October 19, 1998, or within 60 days
thereafter.
(7) Includes 265,381 shares subject to options granted under the Company's
1997 Stock Plan and Amended and Restated 1995 Director Plan which are
exercisable at October 19, 1998, or within 60 days thereafter.
(8) On May 10, 1996 (the "Closing Date") the Company closed a series of
transactions (the "Fluor Daniel Transactions") pursuant to which it issued
to FD the FD Shares (approximately 54.5 percent of the total shares
outstanding on the Closing Date). On December 11, 1996, the Company
granted FD an option to purchase 1,366,000 shares of Common Stock at a
purchase price of $17.00 per share, which option was adjusted pursuant to
the Fluor Daniel Transactions to represent the right to purchase 1,768,970
shares of Common Stock at a purchase price of $13.1274 per share, which is
exercisable between December 11, 1996 and December 11, 1998.
(9) According to a Schedule 13G received by the Company, these shares may also
be deemed owned by Robert Day, an individual who may be deemed to control
The TCW Group, Inc., and other holders of the Common Stock of the Company.
Mr. Day's address is 200 Park Avenue, Suite 2200, New York, NY 10166.
17. DIVIDENDS AND DISTRIBUTIONS.
According to the Company's 1997 Annual Report on Form 10-K, the Company has
not paid cash dividends to date and intends to retain any future earnings for
use in the business.
Pursuant to the terms of the Merger Agreement, prior to the time that the
Parent Directors are elected to the Board and represent at least a majority of
such directors, the Company will not, without the consent of Parent, split,
combine or reclassify the Shares or declare, set aside or pay any dividend
payable in cash, stock or property with respect to the Shares.
18. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; EXCHANGE LISTING AND
EXCHANGE ACT REGISTRATION.
The purchase of Shares pursuant to the Offer will reduce the number of
Shares that might otherwise trade publicly and could reduce the number of
holders of Shares, which could adversely affect the liquidity and market value
of any remaining Shares held by the public. It is expected that, following the
Offer, a large percentage of the Shares will be owned by Purchaser.
Possible Effects of the Offer on the Market for the Shares. The purchase of
Shares pursuant to the Offer will reduce the number of Shares that might
otherwise trade publicly and could adversely affect the liquidity and market
value of the remaining Shares held by the public. The purchase of Shares
pursuant to the Offer can also be expected to reduce the number of holders of
Shares. Purchaser cannot predict whether the reduction in the number of Shares
that might otherwise trade publicly would have an adverse or beneficial effect
on the market price for or marketability of the Shares or whether it would
cause future market prices to be greater or less than the Offer Price
therefor.
Stock Quotation. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the requirements of the National
Association of Securities Dealers, Inc. (the "NASD") for continued inclusion
on Nasdaq, which require that an issuer have at least 200,000 publicly held
shares, held by a least 400 stockholders or 300 stockholders of round lots,
with a market value of at least $1 million, and have net tangible assets of at
least $1 million or $4 million, depending on profitability levels during the
issuer's four most recent fiscal years. If these standards are not met, the
Shares might nevertheless continue to be included in The Nasdaq Stock Market,
with quotations published in the NASD Automatic Quotation System "additional
list" or in one of the "local lists." However, if the number of holders of the
Shares were to fall below 300, or if the number of publicly-held Shares were
to fall below 100,000 or there were not at least two registered and active
market makers for the Shares, the NASD's rules provide that the Shares would
no longer be "qualified" for listing on Nasdaq, and The Nasdaq Stock Market
would cease to provide any quotations. Shares held directly or
32
<PAGE>
indirectly by directors, officers or beneficial owners of more than 10% of the
Shares are not considered as being publicly held for this purpose. If, as a
result of the purchase of Shares pursuant to the Offer or otherwise, the
Shares no longer meet the requirements of the NASD for continued inclusion on
Nasdaq or in any other tier of The Nasdaq Stock Market, as the case may be,
the market for Shares could be adversely affected.
In the event that the Shares no longer meet the requirements of the NASD for
continued inclusion in any tier of The Nasdaq Stock Market, it is possible
that the Shares would continue to trade in the over-the-counter market and
that price quotations would be reported by other sources. The extent of the
public market for the Shares and the availability of such quotations would,
however, depend upon the number of holders of Shares remaining at such time,
the interest in maintaining a market in Shares on the part of securities
firms, the possible termination of registration of the Shares under the
Exchange Act, as described below, and other factors.
EXCHANGE ACT REGISTRATION
The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application by the Company to the
Commission if the Shares are not listed on a national securities exchange and
there are fewer than 300 record holders. The termination of the registration
of the Shares under the Exchange Act would substantially reduce the
information required to be furnished by the Company to holders of Shares and
to the Commission and would make certain provisions of the Exchange Act, such
as the short-swing profit recovery provisions of Section 16(b), the
requirements of furnishing a proxy statement in connection with stockholders'
meetings and the requirements of Rule 13e-3 under the Exchange Act with
respect to "going private" transactions, no longer applicable to the Shares.
In addition, "affiliates" of the Company and persons holding "restricted
securities" of the Company may be deprived of the ability to dispose of such
securities pursuant to Rule 144 promulgated under the Securities Act of 1933,
as amended. If registration of the Shares under the Exchange Act were
terminated, the Shares would no longer be "margin securities" or be eligible
for Nasdaq market reporting. Parent currently intends to seek to cause the
Company to terminate the registration of the Shares under the Exchange Act as
soon after the Effective Time as the requirements for termination of
registration are met.
MARGIN REGULATIONS
The Shares are currently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve
Board"), which has the effect, among other things, of allowing brokers to
extend credit on the collateral of such Shares for the purpose of buying,
carrying or trading in securities ("Purpose Loans"). Depending upon factors
similar to those described above regarding the continued listing, public
trading and market quotations of the Shares, it is possible that, following
the consummation of the transactions contemplated by the Merger Agreement, the
Shares would no longer constitute "margin securities" for the purposes of the
margin regulations of the Federal Reserve Board and therefore could no longer
be used as collateral for Purpose Loans made by brokers.
19. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer or the Merger Agreement,
and subject to any applicable rules and regulations of the Commission,
including Rule 14e-1(c) relating to Parent's obligation to pay for or return
tendered Shares after termination or withdrawal of the Offer, Parent shall not
be required to accept for payment or pay for any Shares tendered pursuant to
the Offer, shall delay the acceptance for payment of any Shares and if
required by the Merger Agreement, shall extend the Offer by one or more
extensions until December 31, 1998, and may terminate the Offer at any time
after December 31, 1998 if (i) less than the Minimum Share Number is tendered
pursuant to the Offer by the expiration of the Offer and not withdrawn;
(ii) any applicable waiting period under the HSR Act has not expired or
terminated prior to the Expiration Date of the Offer; or (iii) at any time
after the date of the Merger Agreement, and before acceptance for payment of
any Shares, any of the following events shall occur and be continuing on or
after December 31, 1998:
(a) there shall have been any action taken, or any statute, rule,
regulation, judgment, order or injunction promulgated, entered, enforced,
enacted, issued or deemed applicable to the Offer or the Merger
33
<PAGE>
by any domestic or foreign court or other governmental entity (other than
the application of the waiting period provisions of the HSR Act to the
Offer or to the Merger) that, in the reasonable judgment of Parent, would
be expected to, directly or indirectly (i) prohibit, or impose any material
limitations on, Parent's ownership or operation of all or a material
portion of the Company's businesses or assets, or compel Parent to dispose
of or hold separate any material portion of the business or assets of the
Company or Parent and its respective subsidiaries, in each case taken as a
whole, (ii) prohibit, or make illegal, the acceptance for payment, payment
for or purchase of Shares or the consummation of the Offer, the Merger or
the other transactions contemplated by the Merger Agreement, (iii) result
in the material delay in or restricts the ability of Parent, or renders
Parent unable, to accept for payment, pay for or purchase some or all of
the Shares, or (iv) impose material limitations on the ability of Parent
effectively to exercise full rights of ownership of the Shares, including
the right to vote the Shares purchased by it on all matters properly
presented to the Company's stockholders;
(b) (i) the representations and warranties of the Company set forth in
this Agreement shall not be true and correct in any material respect as of
the date of the Merger Agreement and as of consummation of the Offer as
though made on or as of such date (except for representations and
warranties made as of a specified date) but only if the respects in which
the representations and warranties made by the Company (without giving
effect to any "materiality" limitations or references to "material adverse
effect" set forth therein) are inaccurate would in the aggregate have a
Company Material Adverse Effect, (ii) the Company shall have failed to
comply with its covenants and agreements contained in this Agreement in all
material respects which failure is likely to have a Company Material Effect
and, with respect to any breach or failure described in clause (b)(i) or
(b)(ii) above that can be cured, the breach or failure shall not have been
cured prior to ten (10) business days after Parent has furnished the
Company with written notice of such breach or failure or (iii) there shall
have occurred any events or changes which have had or which are likely to
have a Company Material Adverse Effect;
(c) the Board shall have withdrawn, or modified or changed in a manner
adverse to Parent (including by amendment of the Schedule 14D-9), its
recommendation of the Offer, the Merger Agreement or the Merger, or
recommended another proposal or offer for the acquisition of the Company,
or the Board, shall have resolved to do any of the foregoing;
(d) the Merger Agreement shall have terminated in accordance with its
terms; or
(e) there shall have occurred and continue to exist (i) any general
suspension of, or limitation on prices for, trading in securities on the
NYSE (other than a shortening of trading hours or any coordinated trading
halt triggered solely as a result of a specified increase or decrease in a
market index), (ii) the declaration of any banking moratorium or any
suspension of payments in respect of banks, or any limitation (whether or
not mandatory) by any Governmental Entity (as defined in the Merger
Agreement) on, or other event materially adversely affecting, the extension
of credit by lending institutions in the United States, or (iii) a
commencement of a war or armed hostilities directly involving the United
States which has and continues to have a material adverse effect on the
trading of securities on the NYSE;
which in the reasonable judgment of Parent, in any such case, makes it
inadvisable to proceed with the Offer or the acceptance for payment of or
payment for the Shares.
The foregoing conditions, other than condition (i) above, are for the sole
benefit of Parent and may be waived by Parent, in whole or in part at any time
and from time to time, in the sole discretion of Parent. The failure by Parent
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, except as otherwise
provided for in the Merger Agreement.
34
<PAGE>
20. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
GENERAL
Except as described below, based upon an examination of publicly available
filings made by the Company with the Commission, other publicly available
information about the Company and the representations and warranties of the
Company in the Merger Agreement, neither Purchaser nor Parent is aware of any
license or regulatory permit that appears to be material to the business of
the Company and its subsidiaries, taken as a whole, that might be adversely
affected by Purchaser's acquisition of Shares pursuant to the Offer, or of any
approval or other action by any governmental, administrative or regulatory
agency or authority or public body, domestic or foreign, that would be
required for the acquisition or ownership of Shares by Purchaser pursuant to
the Offer. Should any such approval or other action be required, it is
presently contemplated that such approval or action would be sought except as
described below in this Section under "State Takeover Statutes." While, except
as otherwise expressly described herein, Purchaser does not currently intend
to delay acceptance for payment of Shares tendered pursuant to the Offer
pending the outcome of any such matter, there can be no assurance that any
such approval or other action, if needed, would be obtained without
substantial conditions or that adverse consequences might not result to the
Company's business or that certain parts of the Company's business might not
have to be disposed of in the event that such approvals were not obtained or
such other actions were not taken or in order to obtain any such approval or
other action, any of which could cause Purchaser to decline to accept for
payment or pay for any Shares tendered. Purchaser's obligation under the Offer
to accept for payment and pay for Shares is subject to the Offer Conditions,
including conditions relating to legal matters discussed in this Section 20.
ANTITRUST
Under the HSR Act and the rules that have been promulgated thereunder by the
Federal Trade Commission ("FTC"), certain acquisition transactions may not be
consummated unless certain information has been furnished to the Antitrust
Division of the Department of Justice (the "Antitrust Division") and the FTC
and certain waiting period requirements have been satisfied. The acquisition
of Shares pursuant to the Offer is subject to such requirements.
Parent expects to file a Notification and Report Form with respect to the
Offer under the HSR Act as soon as practicable following commencement of the
Offer. The waiting period under the HSR Act with respect to the Offer will
expire at 11:59 p.m. Washington D.C. time, on the 15th day after the date such
form is filed, unless early termination of the waiting period is granted. In
addition, the Antitrust Division or the FTC may extend such waiting period by
requesting additional information or documentary material from Parent. If such
a request is made with respect to the Offer, the waiting period related to the
Offer will expire at 11:59 p.m. Washington D.C. time on the 10th day after
substantial compliance by Parent with such request. With respect to each
acquisition, the Antitrust Division or the FTC may issue only one request for
additional information. In practice, complying with a request for additional
information or material can take a significant amount of time. In addition, if
the Antitrust Division or the FTC raises substantive issues in connection with
a proposed transaction, the parties may engage in negotiations with the
relevant governmental agency concerning possible means of addressing those
issues and may agree to delay consummation of the transaction while such
negotiations continue. Expiration or termination of applicable waiting periods
under the HSR Act is a condition to Purchaser's obligation to accept for
payment and pay for Shares tendered pursuant to the Offer.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed purchase of the Shares
by Purchaser pursuant to the Offer. At any time before or after such purchase,
the Antitrust Division or the FTC could take such action under the antitrust
laws as it deems necessary or desirable in the public interest, including
seeking to enjoin the transaction or seeking divestiture of the Shares so
acquired or divestiture of substantial assets of Purchaser, Parent or the
Company. Litigation seeking similar relief could be brought by private
parties.
35
<PAGE>
Parent does not believe that consummation of the Offer and the other
transactions contemplated by the Merger Agreement will result in violation of
any applicable antitrust laws. However, there can be no assurance that a
challenge to the Offer and the other transactions contemplated by the Merger
Agreement on antitrust grounds will not be made, or if such a challenge is
made, what the result will be. See Section 19 for certain conditions to the
purchase of the Shares in the Offer, including conditions with respect to
litigation and certain governmental actions.
STATE TAKEOVER STATUTES
A number of states have adopted "takeover" statutes that purport to apply to
attempts to acquire corporations that are incorporated in such states, or
whose business operations have substantial economic effects in such states, or
which have substantial assets, security holders, employees, principal
executive offices or places of business in such states.
In Edgar v. MITE Corporation, the Supreme Court of the United States
invalidated on constitutional grounds the Illinois Business Takeover Act,
which, as a matter of state securities law, made takeovers of corporations
meeting certain requirements more difficult. However, in CTS Corp. v. Dynamics
Corp. of America, the Supreme Court held that a state may, as a matter of
corporate law and, in particular, those laws concerning corporate governance,
constitutionally disqualify a potential acquirer from voting on the affairs of
a target corporation without prior approval of the remaining stockholders,
provided that such laws were applicable under certain conditions, in
particular, that the corporation has a substantial number of stockholders in
the state and is incorporated there.
In 1998, the Company, directly or through subsidiaries, has leased space in
25 states and performed work in 49 states in the United States, and some of
these states have enacted takeover statutes. Purchaser does not know whether
any of these statutes will, by their terms, apply to the Offer, and Purchaser
has not complied with any such statutes. To the extent that certain provisions
of these statutes purport to apply to the Offer, Purchaser believes that there
are reasonable bases for contesting such statutes. If any person should seek
to apply any state takeover statute, Purchaser would take such action as then
appears desirable, which action may include challenging the validity or
applicability of any such statute in appropriate court proceedings. If it is
asserted that one or more takeover statutes apply to the Offer and it is not
determined by an appropriate court that such statute or statutes do not apply
or are invalid as applied to the Offer, Purchaser might be required to file
certain information with, or receive approvals from, the relevant state
authorities, and Purchaser might be unable to accept for payment or pay for
Shares tendered pursuant to the Offer, or be delayed in continuing or
consummating the Offer. In such case, Purchaser may not be obligated to accept
for payment or pay for Shares tendered pursuant to the Offer.
21. FEES AND EXPENSES.
Purchaser has retained MacKenzie Partners, Inc. to act as the Information
Agent and BankBoston, N.A. to act as the Depositary in connection with the
Offer. The Information Agent may contact holders of Shares by mail, telephone,
telegraph and personal interview and may request brokers, dealers and other
nominee stockholders to forward the Offer materials to beneficial owners. The
Information Agent will receive a fee for services as Information Agent not to
exceed $7,500 and will be reimbursed for certain out-of-pocket expenses. The
Depositary will receive reasonable and customary compensation for services
relating to the Offer and will be reimbursed for certain out-of-pocket
expenses. Purchaser has also agreed to indemnify the Information Agent and the
Depositary against certain liabilities and expenses in connection with the
Offer, including certain liabilities under the federal securities laws.
Purchaser will not pay any fees or commissions to any broker or dealer or
any other person for soliciting tenders of Shares pursuant to the Offer (other
than to the Information Agent). Brokers, dealers, commercial banks, trust
companies and other nominees will, upon request, be reimbursed by Purchaser
for customary mailing and handling expenses incurred by them in forwarding
offering materials to their customers.
36
<PAGE>
Except as set forth above, Purchaser will not pay any fees or commissions to
any broker or dealer or other person for soliciting tenders of Shares pursuant
to the Offer. Brokers, dealers, commercial banks and trust companies will be
reimbursed by Purchaser for customary mailing and handling expenses incurred
by them in forwarding the offering materials to their customers.
22. MISCELLANEOUS.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. Purchaser may, in its
discretion, however, take such action as it may deem necessary to make the
Offer in any jurisdiction and extend the Offer to holders of Shares in any
such jurisdiction.
No person has been authorized to give any information or to make any
representation on behalf of Purchaser not contained herein or in the Letter of
Transmittal and, if given or made, such information or representation must not
be relied upon as having been authorized. Neither the delivery of this Offer
to Purchase nor any purchase pursuant to the Offer shall, under any
circumstances, create any implication that there has been no change in the
affairs of Purchaser or the Company since the date as of which information is
furnished or the date of this Offer to Purchase.
Purchaser and Parent have filed with the Commission a Tender Offer Statement
on Schedule 14D-1, together with exhibits, pursuant to Rule 14d-3 under the
Exchange Act, furnishing certain additional information with respect to the
Offer. In addition, the Company has filed with the Commission the Schedule
14D-9, together with exhibits, pursuant to Rule 14d-9 under the Exchange Act,
setting forth the recommendations of the Board with respect to the Offer and
the reasons for such recommendations and furnishing certain additional related
information. Such Schedules and any amendments thereto, including exhibits,
may be inspected and copies may be obtained from the Commission in the manner
set forth in Section 7 (except that they will not be available at the regional
offices of the Commission).
TIGER ACQUISITION CORPORATION
November 3, 1998
37
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth the name, business or residence address,
principal occupation or employment at the present time and during the last
five years, the name of any corporation or other organization in which such
employment is conducted or was conducted, those securities for which there is
a right to acquire, and the aggregate amount and percentage of securities
beneficially owned, for each executive officer and director of the Company.
Except as otherwise indicated, all of the persons listed below are citizens of
the United States. The business address of each executive officer of the
Company is 100 River Ridge Drive, Norwood, Massachusetts 02062, unless
otherwise set forth below. Each occupation set forth opposite a person's name,
unless otherwise indicated, refers to employment with the Company. Directors
of the Company are indicated with an asterisk. Unless otherwise indicated,
none of the persons listed below have bought or sold any Company Common Stock
within the past 60 days.
<TABLE>
<CAPTION>
NAME, CITIZENSHIP AND PRESENT OCCUPATION MATERIAL POSITIONS HELD
CURRENT BUSINESS ADDRESS OR EMPLOYMENT DURING THE PAST FIVE YEARS
<S> <C> <C>
*Ronald G. Peterson....... Group President-- Group President--
Government, Environmental Government,
and Telecommunications of Environmental and
FD. Director of the Telecommunications of FD
Company since May 1997 and since March 1997;
Chairman of the Board President, Government
since December 1997. Services Operating
Company of FD from April
1995 to March 1997; Vice
President and General
Manager, Space and
Strategic Propulsion
Business Unit of Alliant
TechSystems from 1990 to
1995.
*Walter C. Barber......... President and Chief President and Chief
Executive Officer of the Executive Officer since
Company. Director of the 1989. Chairman of the
Company since 1989. Board from 1993 to May
1996.
*Allan S. Bufferd......... Deputy Treasurer and Deputy Treasurer and
Director of Investments of Director of Investments
M.I.T. Director of the of M.I.T. since 1986.
Company since 1988.
*Ernie Green.............. President and Chief President and Chief
Executive Officer of EGI, Executive Officer of
Inc. ("EGI"), EGI; President of
a manufacturer of Florida Engineering,
automotive components, and Inc.
President of Florida
Engineering, Inc., a sub-
sidiary of EGI. Director
of the Company since May
1996.
*David L. Myers........... Group President-- Group President--
Industrial of FD. Director Industrial of FD since
of the Company since May March 1997; President,
1996. Environmental Strategies
of FD from July 1994 to
March 1997; Vice
President of Business
Units and various other
FD subsidiaries from
1984 to July 1994.
Chairman of the Board
from May 1996 to
December 1997.
</TABLE>
S-1
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY--(CONTINUED)
<TABLE>
<CAPTION>
NAME, CITIZENSHIP AND PRESENT OCCUPATION MATERIAL POSITIONS HELD
CURRENT BUSINESS ADDRESS OR EMPLOYMENT DURING THE PAST FIVE YEARS
<S> <C> <C>
Glenn V. Batchelder....... Vice President and General Vice President, North
Manager, North Region of Region of the Company
the Company. since 1997; Vice
President Sales and
Marketing of the Company
from 1995 to 1997;
Manager of the Company's
former ORS Environmental
Equipment Division from
1992 to 1994.
J. Steven Paquette........ Vice President and General Vice President and
Manager, South Region of General Manager, South
the Company. Region of the Company
since 1996; President of
Groundwater Technology
Government Services,
Inc., a subsidiary of
the Company, from 1993
to May 1996.
David L. Backus........... Vice President and General Vice President and
Manager, West Region of General Manager, West
the Company. Region since June 1996;
Vice President of
Environmental Strategies
of FD from June 1994 to
June 1996; Vice
President of Operations
for Dow Chemical
Corporation from 1991 to
1994.
Anne Nolan................ Vice President of Business Vice President of
Administration of the Business Administration
Company. of the Company since
September 1997; Vice
President of Human
Resources from 1995 to
1997; Director of Human
Resources of the Company
from 1994 to 1995;
Senior Vice President
and Director of Training
and Organizational
Development for Fleet
Financial Group, Inc.
from August 1989 to
April 1994.
Mary C. Stack............. Vice President, Treasurer Vice President and
and Controller of the Treasurer of the Company
Company. since September 1997;
Controller of the
Company since 1993;
Manager of Financial
Planning and Analysis of
the Company from 1989 to
1993.
</TABLE>
S-2
<PAGE>
SCHEDULE II
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND PURCHASER
The following table sets forth the name, business or residence address,
principal occupation or employment at the present time and during the last
five years, and the name of any corporation or other organization in which
such employment is conducted or was conducted of each executive officer or
director of Parent. Except as otherwise indicated, all of the persons listed
below are citizens of the United States of America. Each occupation set forth
opposite a person's name, unless otherwise indicated, refers to employment
with Parent. Unless otherwise indicated, the principal business address of
each director or executive officer of Parent is 2790 Mosside Boulevard,
Monroeville, Pennsylvania 15146-2792. Directors of Parent are indicated with
an asterisk. Unless otherwise indicated, none of the persons listed below have
bought or sold any Parent Common Stock within the past 60 days.
<TABLE>
<CAPTION>
NAME, CITIZENSHIP AND PRESENT OCCUPATION MATERIAL POSITIONS HELD
CURRENT BUSINESS ADDRESS OR EMPLOYMENT DURING THE PAST FIVE YEARS
<S> <C> <C>
*Daniel A. D'Aniello.... Managing Director of the Managing Director of
Carlyle Group ("Carlyle"). Carlyle from 1987 to the
Chairman of the Executive present.
Committee, member of the
Compensation Committee and
Director since 1996.
*Anthony J. DeLuca...... Chief Executive Officer and Chief Executive Officer
President of Parent. Member and President of Parent
of the Executive Committee from July 1997 to the
and Compensation Committee present; President and
and Director since 1996. acting Chief Executive
Officer of Parent from
July 1996 to July 1997;
Senior Vice President
and Chief Financial
Officer of Parent from
March 1990 to July 1997.
*Philip B. Dolan........ Vice President of Carlyle. Vice President of
Member of the Executive Carlyle from 1989 to the
Committee and Compensation present.
Committee and Director since
1996.
*E. Martin Gibson....... Chairman of the Audit Chairman of the Board of
Committee and Director since Directors from April
1994. 1995 to November 1996;
Chairman of Corning Life
Sciences, Inc. from 1992
to December 1994.
*James C. McGill........ Director and Private Director from 1990 to
Investor. Member of the the present; Private
Audit Committee and Director investor for the last 5
since 1990. years.
*Richard W. Pogue....... Member of the Audit Consultant with Dix &
Committee and Director since Eaton--present; Partner
June 1997. of the law firm Jones,
Day, Reavis & Pogue from
1961 to June 1994.
*Robert F. Pugliese..... Special Counsel to Eckert Special Counsel to
Seamans Cherin & Mellott Eckert from 1993 to the
("Eckert"). present.
Member of the Audit
Committee and Director since
1996.
*Charles W. Schmidt..... Member of Compensation Formerly the Senior Vice
Committee and Director since President, External
June 1997. Affairs of Raytheon
Company, and President
and Chief Executive
Officer of SCA Services,
Inc.
</TABLE>
S-3
<PAGE>
SCHEDULE II
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND PURCHASER--(CONTINUED)
<TABLE>
<CAPTION>
NAME, CITIZENSHIP AND PRESENT OCCUPATION MATERIAL POSITIONS HELD
CURRENT BUSINESS ADDRESS OR EMPLOYMENT DURING THE PAST FIVE YEARS
<S> <C> <C>
*Admiral James David
Watkins................ President of the Joint President of JOI from
Oceanographic Institutions, 1993 to the present;
Inc. ("JOI"). Member of the President of Consortium
Compensation Committee and Oceanographic Research
Director since 1996. and Education from 1994
to the present;
Secretary of Energy
under President Bush
from 1989 to 1993.
James G. Kirk........... Vice President, General Vice President, General
Counsel and Secretary of Counsel and Secretary of
Parent. Parent from September
1996 to the present;
General Counsel, Eastern
Operations from 1991 to
September 1996.
James R. Mahoney........ Senior Vice President, Senior Vice President,
Consulting and Ventures and Consulting and Ventures
Corporate Development of of Parent from July 1996
Parent. through the present;
Senior Vice President,
Technical Operations and
Corporate Development of
Parent from March 1995
to July 1996; Senior
Vice President,
Corporate Development of
Parent and Sales of
Parent from April 1992
to March 1995.
Raymond J. Pompe........ Senior Vice President, Senior Vice President,
Engineering and Construction Engineering and
of Parent. Construction of Parent
from July 1996 to the
present; Senior Vice
President, Project
Operations of Parent
from March 1995 to July
1996; Vice President,
Construction and
Remediation of Parent
from 1988 to March 1995.
Philip O. Strawbridge... Senior Vice President, Chief Senior Vice President
Administrative Officer of and Chief Administrative
Parent. Officer of Parent since
May 1998; Senior Vice
President, Chief
Financial and
Administrative Officer
of OHM Corporation from
February 1996 to May
1998; Senior Director of
Contracts and Finance of
FD prior to February
1996.
</TABLE>
S-4
<PAGE>
SCHEDULE II
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND PURCHASER--(CONTINUED)
The following table sets forth the name, business or residence address,
principal occupation or employment at the present time and during the last
five years, and the name of any corporation or other organization in which
such employment is conducted or was conducted of each executive officer or
director of Purchaser. Except as otherwise indicated, all of the persons
listed below are citizens of the United States of America. Unless otherwise
indicated, the principal business address of each director or executive
officer of Purchaser is 2790 Mosside Boulevard, Monroeville, Pennsylvania
15146-2792. Directors of Purchaser are indicated with an asterisk.
<TABLE>
<CAPTION>
NAME, CITIZENSHIP AND PRESENT OCCUPATION MATERIAL POSITIONS HELD
CURRENT BUSINESS ADDRESS OR EMPLOYMENT DURING THE PAST FIVE YEARS
<S> <C> <C>
*Anthony J. DeLuca...... Chief Executive Officer and Chief Executive Officer
President of Parent. and President of Parent
Director since 1998. from July 1997 to the
present; Director of
Parent from 1996 to the
present; President and
acting Chief Executive
Officer of Parent from
July 1996 to July 1997;
Senior Vice President
and Chief Financial
Officer of Parent from
March 1990 to July 1997.
*Daniel A. D'Aniello.... Director since 1998. Managing Director of
Carlyle from 1987 to the
present. Director of
Parent from 1996 to the
present.
*Philip B. Dolan........ Director since 1998. Vice President of
Carlyle from 1989 to the
present. Director of
Parent from 1996 to the
present.
Richard R. Conte........ Treasurer. Vice President and
Treasurer of Parent from
June 1997 to present;
Chairman, President and
Principal Financial
Officer of Rymac
Mortgage Investment
Corporation, a publicly
traded REIT, which in
1996 became known as
Core Materials
Corporation, from 1992
to May 1997.
James G. Kirk........... Vice President and Secretary Vice President, General
of Parent. Counsel and Secretary of
Parent from September
1996 to the present;
General Counsel, Eastern
Operations from 1991 to
September 1996.
James M. Redwine........ Assistant Secretary of Currently Senior
Parent. Corporate Counsel and
Assistant Secretary of
Parent and has been an
employee of Parent for
the past five years. He
has held the positions
of Corporate Counsel and
Associate Counsel of
Parent.
Harry J. Soose.......... Vice President of Parent. Currently Vice
President, Finance and
Controller of Parent and
has been an employee of
Parent since 1991. He
has held the positions
of Vice President and
Controller and
Controller, Construction
and Remediation Division
of Parent.
</TABLE>
S-5
<PAGE>
SCHEDULE II
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND PURCHASER--(CONTINUED)
<TABLE>
<CAPTION>
NAME, CITIZENSHIP AND PRESENT OCCUPATION MATERIAL POSITIONS HELD
CURRENT BUSINESS ADDRESS OR EMPLOYMENT DURING THE PAST FIVE YEARS
<S> <C> <C>
Philip O. Strawbridge... Senior Vice President, Chief Senior Vice President,
Administrative Officer. Chief Administrative
Officer of Parent since
1998; Senior Vice
President, Chief
Financial and
Administrative Officer
of OHM Corporation from
February 1996 to May
1998; Senior Director of
Contracts and Finance of
FD prior to February
1996.
</TABLE>
S-6
<PAGE>
ANNEX A
TEXT OF SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW
262 APPRAISAL RIGHTS.--(a) Any stockholder of a corporation of this State
who holds shares of stock on the date of the making of a demand pursuant to
subsection (d) of this section with respect to such shares, who continuously
holds such shares through the effective date of the merger or consolidation,
who has otherwise complied with subsection (d) of this section and who has
neither voted in favor of the merger or consolidation nor consented thereto in
writing pursuant to (S) 228 of this title shall be entitled to an appraisal by
the Court of Chancery of the fair value of the stockholder's shares of stock
under the circumstances described in subsections (b) and (c) of this section.
As used in this section, the word "stockholder" means a holder of record stock
in a stock corporation and also a member of record of a nonstock corporation;
the words "stock" and "share" mean and include what is ordinarily meant by
those words and also membership or membership interest of a member of a
nonstock corporation; and the words "depository receipt" mean a receipt or
other instrument issued by a depository representing an interest in one or
more shares, or fractions thereof, solely of stock of a corporation, which
stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to
be effected pursuant to (S) 251 (other than a merger effected pursuant to (S)
251(g) of this title), (S) 252, (S) 254, (S) 257, (S) 258, (S) 263 or (S) 264
of this title:
(1) Provided, however, that no appraisal rights under this section shall
be available for the shares of any class or series of stock, which stock,
or depository receipts in respect thereof, at the record date fixed to
determine the stockholders entitled to receive notice of and to vote at the
meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no
appraisal rights shall be available for any shares of stock of the
constituent corporation surviving a merger if the merger did not require
for its approval the vote of the stockholders of the surviving corporation
as provided in subsection (t) of (S) 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required
by the terms of an agreement of merger or consolidation pursuant to (S)(S)
251, 252, 254, 257, 258, 263 and 264 of this title, to accept for such
stock anything except:
a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect
thereof;
b. Shares of stock of any other corporation, or depository receipts
in respect thereof, which shares of stock (or depository receipts in
respect thereof) or depository receipts at the effective date of the
merger or consolidation will be either listed on a national securities
exchange or designated as a national market system security on an
interdealer quotation system by the National Association of Securities
Dealers, Inc. or held of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this
paragraph; or
d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this
paragraph.
(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under (S) 253 of this title is not owned by the
parent corporation immediately prior to the merger, appraisal rights shall
be available for the shares of the subsidiary Delaware corporation.
A-1
<PAGE>
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets
of the corporation. If the certificate of incorporation contains such a
provision, the procedures of this section, including those set forth in
subsections (d) and (e) of this section, shall apply as nearly as is
practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights are
provided under this section is to be submitted for approval at a meeting of
stockholders, the corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record date for
such meeting with respect to shares for which appraisal rights are
available pursuant to subsections (b) or (c) hereof that appraisal rights
are available for any or all of the shares of the constituent corporations,
and shall include in such notice a copy of this section. Each stockholder
electing to demand the appraisal of his shares shall deliver to the
corporation, before the taking of the vote on the merger or consolidation,
a written demand for appraisal of his shares. Such demand will be
sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the
appraisal of his shares. A proxy or vote against the merger or
consolidation shall not constitute such a demand. A stockholder electing to
take such action must do so by a separate written demand as herein
provided. Within 10 days after the effective date of such merger or
consolidation, the surviving or resulting corporation shall notify each
stockholder of each constituent corporation who has complied with this
subsection and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has become
effective; or
(2) If the merger or consolidation was approved pursuant to (S) 228 or
(S) 253 of this title, each constituent corporation, either before the
effective date of the merger or consolidation or within ten days
thereafter, shall notify each of the holders of any class or series of
stock of such constituent corporation who are entitled to appraisal rights
of the approval of the merger or consolidation and that appraisal rights
are available for any or all shares of such class or series of stock of
such constituent corporation, and shall include in such notice a copy of
this section; provided that, if the notice is given on or after the
effective date of the merger or consolidation, such notice shall be given
by the surviving or resulting corporation to all such holders of any class
or series of stock of a constituent corporation that are entitled to
appraisal rights. Such notice may, and, if given on or after the effective
date of the merger or consolidation, shall, also notify such stockholders
of the effective date of the merger or consolidation. Any stockholder
entitled to appraisal rights may, within 20 days after the date of mailing
of such notice, demand in writing from the surviving or resulting
corporation the appraisal of such holder's shares. Such demand will be
sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the
appraisal of such holder's shares. If such notice did not notify
stockholders of the effective date of the merger or consolidation, either
(i) each such constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each of the holders
of any class or series of stock of such constituent corporation that are
entitled to appraisal rights of the effective date of the merger or
consolidation or (ii) the surviving or resulting corporation shall send
such a second notice to all such holders on or within 10 days after such
effective date; provided, however, that if such second notice is sent more
than 20 days following the sending of the first notice, such second notice
need only be sent to each stockholder who is entitled to appraisal rights
and who has demanded appraisal of such holder's shares in accordance with
this subsection. An affidavit of the secretary or assistant secretary or of
the transfer agent of the corporation that is required to give either
notice that such notice has been given shall, in the absence of fraud, be
prima facie evidence of the facts stated therein. For purposes of
determining the stockholders entitled to receive either notice, each
constituent corporation may fix, in advance, a record date that shall be
not more than 10 days prior to the date the notice is given, provided, that
if the notice is given on or after the effective date of the merger or
consolidation, the record date shall be such effective date. If no record
date is fixed and the notice is given prior to the effective date, the
record date shall be the close of business on the day next preceding the
day on which the notice is given.
A-2
<PAGE>
(e) Within 120 days after the effective date of the merger or consolidation,
the surviving or resulting corporation or any stockholder who has complied
with subsections (a) and (d) hereof and who is otherwise entitled to appraisal
rights, may file a petition in the Court of Chancery demanding a determination
of the value of the stock of all such stockholders. Notwithstanding the
foregoing, at any time within 60 days after the effective date of the merger
or consolidation, any stockholder shall have the right to withdraw his demand
for appraisal and to accept the terms offered upon the merger or
consolidation. Within 120 days after the effective date of the merger or
consolidation, any stockholder who has complied with the requirements of
subsections (a) and (d) hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of shares not
voted in favor of the merger or consolidation and with respect to which
demands for appraisal have been received and the aggregate number of holders
of such shares. Such written statement shall be mailed to the stockholder
within 10 days after his written request for such a statement is received by
the surviving or resulting corporation or within 10 days after expiration of
the period for delivery of demands for appraisal under subsection (d) hereof,
whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of a copy
thereof shall be made upon the surviving or resulting corporation, which shall
within 20 days after such service file in the office of the Register in
Chancery in which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded payment for their
shares and with whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the petition shall be
filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in Chancery, if so
ordered by the Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the surviving or
resulting corporation and to the stockholders shown on the list at the
addresses therein stated. Such notice shall also be given by I or more
publications at least I week before the (lay of the hearing, in a newspaper of
general circulation published in the City of Wilmington, Delaware or such
publication as the Court deems advisable. The forms of the notices by mail and
by publication shall be approved by the Court, and the costs thereof shall be
borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled
to appraisal rights. The Court may require the stockholders who have demanded
an appraisal for their shares and who hold stock represented by certificates
to submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as
to such stockholder.
(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any
element of value arising from the accomplishment or expectation of the merger
or consolidation, together with a fair rate of interest, if any, to be paid
upon the amount determined to be the fair value. In determining such fair
value, the Court shall take into account all relevant factors. In determining
the fair rate of interest, the Court may consider all relevant factors,
including the rate of interest which the surviving or resulting corporation
would have had to pay to borrow money during the pendency of the proceeding.
Upon application by the surviving or resulting corporation or by any
stockholder entitled to participate in the appraisal proceeding, the Court
may, in its discretion, permit discovery or other pretrial proceedings and may
proceed to trial upon the appraisal prior to the final determination of the
stockholder entitled to an appraisal. Any stockholder whose name appears on
the list filed by the surviving or resulting corporation pursuant to
subsection (1) of this section and who has submitted his certificates of stock
to the Register in Chancery, if such is required, may participate fully in all
proceedings until it is finally determined that he is not entitled to
appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to
the stockholders entitled thereto. Interest may be simple or compound, as the
Court may direct. Payment shall be so made to each such stockholder, in the
case of holders of uncertificated stock forthwith, and the case of holders of
shares represented by certificates upon the surrender to the corporation of
the certificates representing such stock. The Court's decree may be enforced
as other decrees in the Court of
A-3
<PAGE>
Chancery may be enforced, whether such surviving or resulting corporation be a
corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded his appraisal rights as provided in subsection
(d) of this section shall be entitled to vote such stock for any purpose or to
receive payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of record at a date
which is prior to the effective date of the merger or consolidation);
provided, however, that if no petition for an appraisal shall be filed within
the time provided in subsection (e) of this section, or if such stockholder
shall deliver to the surviving or resulting corporation a written withdrawal
of his demand for an appraisal and an acceptance of the merger or
consolidation, either within 60 days after the effective date of the merger or
consolidation as provided in subsection (e) of this section or thereafter with
the written approval of the corporation, then the right of such stockholder to
an appraisal shall cease. Notwithstanding the foregoing, no appraisal
proceeding in the Court of Chancery shall be dismissed as to any stockholder
without the approval of the Court, and such approval may be conditioned upon
such terms as the Court deems just.
(l) The shares of the surviving or resulting corporation to which the shares
of such objecting stockholders would have been converted had they assented to
the merger or consolidation shall have the status of authorized and unissued
shares of the surviving or resulting corporation. (Last amended by Ch. 120, L.
'97, eff. 7-1-97.)
A-4
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. Letters of Transmittal and certificates for Shares should be sent or
delivered by each stockholder of the Company or his broker, dealer, commercial
bank or trust company to the Depositary at one of its addresses set forth
below:
The Depositary for the Offer is:
BANKBOSTON, N.A.
<TABLE>
<CAPTION>
By Overnight Courier or
By First Class Mail: Certified Mail: By Hand:
<S> <C> <C>
Boston EquiServe, LP Boston EquiServe, LP Securities Transfer & Reporting
Attn: Corporate Reorganization Attn: Corporate Reorganization Service Inc.
P.O. Box 9061 40 Campanelli Drive c/o Boston EquiServe LP
Boston, MA 02205-8686 Braintree, MA 02184 100 William Street, Galleria
New York, NY 10038
</TABLE>
By Facsimile Confirm Facsimiles by
Transmission: Telephone:
(For Eligible Institutions Only) (781) 794-6388
(781) 794-6352
Any questions or requests for assistance may be directed to the Information
Agent at its address and telephone numbers set forth below. Requests for
additional copies of this Offer to Purchase and the Letter of Transmittal may
be directed to the Information Agent, the Dealer Manager or the Depositary.
Stockholders may also contact their brokers, dealers, commercial banks or
trust companies for assistance concerning the Offer.
The Information Agent for the Offer is:
[LOGO OF MACKENZIE PARTNERS, INC.]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
or
CALL TOLL-FREE (800) 322-2885
<PAGE>
EXHIBIT (a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
FLUOR DANIEL GTI, INC.
AT
$8.25 NET PER SHARE
PURSUANT TO THE OFFER TO PURCHASE DATED NOVEMBER 3, 1998
BY
TIGER ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY OF
THE IT GROUP, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, DECEMBER 2, 1998, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
BANKBOSTON, N.A.
<TABLE>
<S> <C> <C>
By First Class Mail: By Overnight Courier or By Hand:
Certified mail:
Boston EquiServe, LP Boston EquiServe, LP Securities Transfer & Reporting
Attn: Corporate Reorganization Attn: Corporate Reorganization Services, Inc.
P.O. Box 9061 40 Campanelli Drive c/o Boston EquiServe LP
Boston, MA 02205-8686 Braintree, MA 02184 100 William Street, Galleria
New York, NY 10038
</TABLE>
By Facsimile Transmission: Confirm Facsimiles by Telephone:
(For Eligible Institutions Only) (781) 794-6388
(781) 794-6352
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ---------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) CERTIFICATE(S) TENDERED
(PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL LIST IF NECESSARY)
- ---------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)* CERTIFICATE(S) TENDERED**
----------- -------------- ----------
<S> <C> <C> <C>
----------- -------------- ----------
----------- -------------- ----------
----------- -------------- ----------
----------- -------------- ----------
----------- -------------- ----------
----------- -------------- ----------
TOTAL SHARES
- ---------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares being
delivered to the Depositary are being tendered. See Instruction 4.
- --------------------------------------------------------------------------------
<PAGE>
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 DOES NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF
TRANSMITTAL IN THE APPROPRIATE SPACE PROVIDED THEREFOR, WITH SIGNATURE
GUARANTEE IF REQUIRED, AND COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW.
SEE INSTRUCTIONS 1, 5 AND 10 BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used either if certificates are to be
forwarded herewith or, unless an Agent's Message (as defined in the Offer to
Purchase) is utilized, if delivery is to be made by book-entry transfer to the
account maintained by the Depositary at The Depositary Trust Company (the
"Book-Entry Transfer Facility") pursuant to the procedures set forth in
Section 2 of the Offer to Purchase. Stockholders whose certificates are not
immediately available or who cannot deliver their certificates or deliver
confirmation of the book-entry transfer of their Shares (as defined below)
into the Depositary's account at the Book-Entry Transfer Facility ("Book-Entry
Confirmation") and all other documents required hereby to the Depositary prior
to the Expiration Date (as defined in the Offer to Purchase) must tender their
Shares according to the guaranteed delivery procedures set forth in Section 2
of the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO THE
BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY
TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: _____________________________________________
Account Number: ____________________________________________________________
Transaction Code Number: ___________________________________________________
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Owner(s): ____________________________________________
Window Ticket Number (if any): _____________________________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Name of Institution that Guaranteed Delivery: ______________________________
If Delivered by Book-Entry Transfer, Check box: [ ]
Account Number: ____________________________________________________________
Transaction Code Number: ___________________________________________________
2
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS TO THIS
LETTER OF TRANSMITTAL CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Tiger Acquisition Corporation, a Delaware
corporation ("Purchaser"), which is a newly-formed, wholly-owned subsidiary of
International Technology Corporation, a Delaware corporation doing business as
The IT Group, Inc. ("Parent"), the above-described shares of common stock, par
value $.001 per share (the "Common Stock"), of Fluor Daniel GTI, Inc., a
Delaware corporation (the "Company"), pursuant to Purchaser's offer to
purchase all of the issued and outstanding shares (the "Shares") of the
Company's Common Stock upon the terms and subject to the conditions set forth
in the Offer to Purchase dated November 3, 1998 (the "Offer to Purchase"),
receipt of which is hereby acknowledged, and in this Letter of Transmittal
(which, together with the Offer to Purchase, constitute the "Offer"), at the
purchase price of $8.25 per Share, net to each tendering stockholder in cash,
without interest (the "Offer Price").
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith in accordance with the terms and subject to the conditions
of the Offer, the undersigned hereby sells, and transfers to, upon the order
of Purchaser, all right, title and interest in and to all the Shares that are
being tendered hereby and irrevocably constitutes and appoints the Depositary
the true and lawful agent and attorney-in-fact of the undersigned with respect
to such Shares 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, or transfer ownership of such Shares (and any
such other Shares or securities) on the account books maintained by the Book-
Entry Transfer Facility, together in either such case with all accompanying
evidences of transfer and authenticity, to or upon the order of Purchaser, (b)
present such Shares for transfer on the books of the Company and (c) receive
all benefits and otherwise exercise all rights of beneficial ownership of such
Shares, all in accordance with the terms of the Offer.
The undersigned hereby irrevocably appoints each designee of Purchaser as
the attorney-in-fact and proxy of the undersigned, each with full power of
substitution, to vote in such manner as each such attorney and proxy or his
substitute shall in his sole discretion deem proper, and otherwise act
(including pursuant to written consent) with respect to all the Shares
tendered hereby which have been accepted for payment by Purchaser prior to the
time of such vote or action, which the undersigned is entitled to vote at any
meeting of stockholders (whether annual or special and whether or not an
adjourned meeting) of the Company, or consent in lieu of any such meeting, or
otherwise. This proxy is coupled with an interest in the Company and in the
Shares and is irrevocable and is granted in consideration of the deposit by
Purchaser with the Depositary of the Offer Price for such Shares in accordance
with the terms of the Offer. Purchaser's acceptance for payment of the Shares
shall revoke all proxies granted by the undersigned at any time with respect
to such Shares and no subsequent proxies will be given (and if given will be
deemed not to be effective) with respect thereto by the undersigned.
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 that, when the same are accepted for payment by Purchaser,
Purchaser will acquire good and unencumbered title thereto, free and clear of
all liens, restrictions, charges and encumbrances and the same will not be
subject to any adverse claim. The undersigned, upon request, will execute and
deliver any additional documents deemed by the Depositary or Purchaser to be
necessary or desirable to complete the sale, assignment and transfer of the
Shares tendered hereby.
All authority herein conferred or agreed to be conferred in this Letter of
Transmittal 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 successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned. Except as stated
in the Offer to Purchase, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 2 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the
undersigned and Purchaser upon the terms and subject to the conditions of the
Offer.
3
<PAGE>
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the total purchase price or any certificates for
Shares not tendered or accepted for payment in the name(s) of the undersigned.
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail the check for the total purchase price or return any certificates
for Shares not tendered or accepted for payment (and accompanying documents,
as appropriate) to the undersigned at the address shown below the
undersigned's signature. In the event that both the Special Delivery
Instructions and the Special Payment Instructions are completed, please issue
the check for the total purchase price or any certificates for Shares not
tendered or accepted for payment in the name of, and deliver such check or
return such certificates to the person or persons so indicated. Stockholders
delivering Shares by book-entry transfer may request that any Shares not
accepted for payment be returned by crediting such account maintained at the
Book-Entry Transfer Facility by making an appropriate entry under "Special
Payment Instructions." The undersigned recognizes that Purchaser has no
obligation pursuant to the Special Payment Instructions to transfer any Shares
from the name of the registered holder thereof if Purchaser does not accept
for payment any of the Shares so tendered.
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7) (SEE INSTRUCTIONS 1, 4, 5, 6 AND 7)
To be completed ONLY if certif- To be completed ONLY if certif-
icates for Shares not tendered icates for Shares not tendered
or not purchased and/or the or not purchased and/or the
check for the Offer Price of check for the Offer Price of
Shares purchased are to be issued Shares purchased are to be sent
in the name of someone other than to someone other than the under-
the undersigned, or if Shares signed, or to the undersigned at
delivered by book-entry transfer an address other than that shown
which are not purchased are to be above.
returned by credit to an account
maintained at the Book-Entry Issue check and/or certificate
Transfer Facility other than that to:
designated above.
Name: ___________________________
Issue check and/or certificate (PLEASE PRINT)
to:
Address: ________________________
_________________________________
Name: ___________________________ (INCLUDE ZIP CODE)
(PLEASE PRINT) _________________________________
(TAX IDENTIFICATION OR SOCIAL
Address: ________________________ SECURITY NUMBER)
_________________________________
(INCLUDE ZIP CODE)
_________________________________
(TAX IDENTIFICATION OR SOCIAL
SECURITY NUMBER)
[ ] Credit unpurchased Shares
delivered by book-entry
transfer to the Book-Entry
Transfer Facility account.
_________________________________
(ACCOUNT NUMBER)
4
<PAGE>
SIGN HERE
(Complete Substitute Form W-9 included herewith)
X____________________________________________________________________________
X____________________________________________________________________________
Signature(s) Of Owner(s)
Dated: ______________________________________________________________________
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
stock certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, agent, officer of a corporation or other person
acting in a fiduciary or representative capacity, please provide the
following information. See Instructions 1 and 5.)
Name(s) _____________________________________________________________________
_____________________________________________________________________________
(Please Print)
Capacity (Full Title) _______________________________________________________
(See Instruction 5)
Address _____________________________________________________________________
_____________________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number ______________________________________________
Tax Identification or Social Security No. ___________________________________
(Complete Substitute Form W-9 included herewith)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED--SEE INSTRUCTIONS 1 AND 5)
Authorized Signature ________________________________________________________
Name ________________________________________________________________________
(Please Print)
Title _______________________________________________________________________
Name of Firm ________________________________________________________________
Address _____________________________________________________________________
_____________________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number ______________________________________________
Dated: ______________________________________________________________________
5
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee on this Letter of
Transmittal is required (i) if this Letter of Transmittal is signed by the
registered holder of the Shares (which term, for purposes of this document,
shall include any participant in the Book-Entry Transfer Facility whose name
appears on a security position listing as the owner of Shares) tendered
herewith, unless such holder has completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions"
above, or (ii) if such Shares are tendered for the account of a bank, broker,
dealer, credit union, savings-association or other entity that is a member in
good standing of the Securities Transfer Agents Medallion Program, the
New York Stock Exchange Medallion Signature Guarantee Program or the Stock
Exchange Medallion Program (each an "Eligible Institution"). In all other
cases, all signatures on this Letter of Transmittal must be guaranteed by an
Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Certificates. This Letter of
Transmittal is to be completed by stockholders either if certificates are to
be forwarded herewith or if tenders of Shares are to be made pursuant to the
procedures for delivery by book-entry transfer set forth in Section 2 of the
Offer to Purchase. Certificates for all physically tendered Shares, or any
Book-Entry Confirmation of Shares, as the case may be, as well as a properly
completed and duly executed Letter of Transmittal (or facsimile thereof),
unless an Agent's Message (as defined in the Offer to Purchase) is utilized,
and any other documents required by this Letter of Transmittal, must be
received by the Depositary at one of its addresses set forth herein prior to
the Expiration Date (as defined in Section 1 of the Offer to Purchase).
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver their certificates and all other required documents to the
Depositary prior to the Expiration Date may tender their Shares by properly
completing and duly executing the Notice of Guaranteed Delivery pursuant to
the guaranteed delivery procedure set forth in Section 2 of the Offer to
Purchase. Pursuant to such procedure, (i) such tender must be made by or
through an Eligible Institution, (ii) a properly completed and duly executed
Notice of Guaranteed Delivery, substantially in the form provided by
Purchaser, must be received by the Depositary prior to the Expiration Date,
and (iii) the certificates for all physically tendered Shares or Book-Entry
Confirmation of Shares, as the case may be, together with a properly completed
and duly executed Letter of Transmittal (or facsimile thereof), unless an
Agent's Message is utilized, and any other documents required by this Letter
of Transmittal, must be received by the Depositary within three (3) New York
Stock Exchange trading days after the date of execution of such Notice of
Guaranteed Delivery, all as provided in Section 2 of the Offer to Purchase.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE CERTIFICATE FOR
SHARES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-
ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING
STOCKHOLDER AND, EXCEPT AS OTHERWISE PROVIDED IN THIS INSTRUCTION 2, THE
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF
DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
INSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution
of this Letter of Transmittal (or facsimile thereof), waive any right to
receive any notice of the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
signed schedule attached hereto.
4. Partial Tenders. (Not applicable to stockholders who tender by book-entry
transfer.) If fewer than all the Shares evidenced by any certificate submitted
are to be tendered, fill in the number of Shares which are to be tendered in
the box entitled "Number of Shares Tendered." In such case, new certificate(s)
for the remainder of the Shares that were evidenced by your old certificate(s)
will be sent to you, unless otherwise provided in the
6
<PAGE>
appropriate box on this Letter of Transmittal, as soon as practicable after
the Expiration Date. All Shares represented by certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond exactly with the name(s) as
written on the face of the certificate(s) without alteration, enlargement or
any change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of
a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Purchaser of such person's authority so to act must be
submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment or certificates for Shares
not tendered or purchased are to be issued to a person other than the
registered owner(s). Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Shares listed, the certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered owner or owners appear on the certificates.
Signatures on such certificates or stock powers must be guaranteed by an
Eligible Institution.
6. Stock Transfer Taxes. Except as set forth in this Instruction 6,
Purchaser will pay or cause to be paid any stock transfer taxes with respect
to the transfer and sale of purchased Shares to it or its order pursuant to
the Offer. If payment of the purchase price is to be made to, or if
certificates for Shares not tendered or purchased are to be registered in the
name of, any person other than the registered holder, or if tendered
certificates are registered in the name of any person other than the person(s)
signing this Letter of Transmittal, the amount of any stock transfer taxes
(whether imposed on the registered holder or such person) payable on account
of the transfer to such person will be deducted from the total purchase price
for all tendered Shares unless satisfactory evidence of the payment of such
taxes or exemption therefrom is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. Special Payment and Delivery Instructions. If a check or certificates for
unpurchased Shares are to be issued in the name of a person other than the
signer of this Letter of Transmittal or if a check is to be sent or such
certificates are to be returned to someone other than the signer of this
Letter of Transmittal or to an address other than that shown above, the
appropriate boxes on this Letter of Transmittal should be completed.
Stockholders tendering Shares by book-entry transfer may request that Shares
not purchased be credited to such account maintained at the Book-Entry
Transfer Facility. If no such instructions are given, such Shares not
purchased will be returned by crediting the account at the Book-Entry Transfer
Facility.
8. Requests for Assistance or Additional Copies. Requests for assistance may
be directed to, or additional copies of the Offer to Purchase and this Letter
of Transmittal may be obtained from, the Information Agent at its address set
forth below or from your broker, dealer, commercial bank or trust company.
7
<PAGE>
9. Waiver of Conditions. Subject to the terms of the Merger Agreement (as
defined in the Offer to Purchase), the conditions of the Offer may be waived
by Purchaser, in whole or in part, at any time and from time to time in the
Purchaser's sole discretion, in the case of any Shares tendered.
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,
and to certify whether the stockholder is subject to backup withholding of
Federal income tax. If a tendering stockholder is subject to backup
withholding, the stockholder must cross out item (2) of the Certification box
of the Substitute Form W-9. Failure to provide the information on the
Substitute Form W-9 may subject the tendering stockholder to 31% Federal
income tax withholding on the payment of all reportable payments made to such
stockholder. 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, he
or she should write "Applied For" in the space provided for the TIN in Part I,
and sign and date the Substitute Form W-9. If "Applied For" is written in Part
I, the Depositary will withhold 31% on all payments of the purchase price
until a TIN is provided to the Depositary.
11. 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 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, PRIOR TO THE
EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under Federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary with such
stockholder's correct TIN on Substitute Form W-9 below. If such stockholder is
an individual, the TIN is his or her social security number. If a tendering
stockholder is subject to backup withholding, he or she must cross out item
(2) of the Certification box on the Substitute Form W-9. Failure to provide
the requisite information on the Substitute Form W-9 may cause the tendering
stockholder to be subject to backup withholding. In addition, failure to
provide the correct information, including the correct TIN, on the Substitute
Form W-9 may cause the stockholder to be subject to various penalties,
including a $50 penalty for each such failure, unless such failure is due to
reasonable cause and not willful neglect.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that stockholder must submit a statement, signed under penalties of
perjury, attesting to that individual's exempt status. Such statements may be
obtained from the Depositary. Exempt stockholders, other than foreign
individuals, should furnish their TIN, write "Exempt" on the face of the
Substitute Form W-9 below and sign, date and return the Substitute Form W-9 to
the Depositary. See the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional instructions.
If 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 owed by persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained.
8
<PAGE>
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 (1) notify the Depositary of his or her correct TIN by completing
the form below certifying that the TIN provided on the Substitute Form W-9 is
correct and (2) certify that he or she is not subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record 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 guidelines on
which number to report. 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, the stockholder should write "Applied For" in the space provided for
in the TIN in Part I, and sign and date the Substitute Form W-9. If "Applied
For" is written in Part I, the Depositary will withhold 31% on all payments of
the purchase price until a TIN is provided to the Depositary.
9
<PAGE>
- -------------------------------------------------------------------------------
PAYER'S NAME AND ADDRESS:
PART I--Please provide -------------------------
your TIN in the box at Social Security Number
right and certify by or Employer
signing and dating Identification Number
below. (if awaiting TIN write
"Applied For")
-----------------------------------------------------
SUBSTITUTE PART II--For Payees exempt from backup
FORM W-9 withholding, see the attached Guidelines for
DEPARTMENT OF Certification of Taxpayer Identification Number on
THE TREASURY Substitute Form W-9 and complete as instructed
INTERNAL therein.
REVENUE SERVICE -----------------------------------------------------
CERTIFICATION--Under the penalties of perjury, I
PAYER'S REQUEST FOR certify that:
TAXPAYER (1) The number shown on this form is my correct
IDENTIFICATION Taxpayer Identification Number, or a Taxpayer
NUMBER (TIN) Identification Number has not been issued to
me and either (a) I have mailed or delivered
an application to receive a Taxpayer
Identification Number to the appropriate
Internal Revenue Service ("IRS") center or
Social Security Administration office or (b) I
intend to mail or deliver an application in
the near future. (I understand that if I do
not provide a Taxpayer Identification Number,
31% of all reportable payments made to me will
be withheld until I provide a number); and
(2) I am not subject to backup withholding either
because I have not been notified by 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.
CERTIFICATION INSTRUCTIONS--You must cross out
item (2) above if you have been notified by the
IRS that you are currently subject to backup
withholding because of underreporting interest or
dividends on your tax return. However, if after
being notified by the IRS that you were subject to
backup withholding you received another
notification from the IRS that you are no longer
subject to backup withholding, do not cross out
item (2). (Also see instructions in the enclosed
Guidelines.)
-----------------------------------------------------
SIGNATURE __________________ DATE _________________
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
10
<PAGE>
The Information Agent for the Offer is:
[LOGO OF MACKENZIE PARTNERS, INC.]
156 FIFTH AVENUE
NEW YORK, NEW YORK 10010
(212) 929-5500 (CALL COLLECT)
OR
CALL TOLL FREE (800) 322-2885
<PAGE>
EXHIBIT (a)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
FLUOR DANIEL GTI, INC.
TO
TIGER ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY
OF
THE IT GROUP, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON WEDNESDAY, DECEMBER 2, 1998, UNLESS THE OFFER IS EXTENDED.
This form, or one substantially equivalent hereto, must be used to accept
the Offer (as defined below) if certificates representing issued and
outstanding shares of common stock, par value $.001 per share (the "Shares"),
of Fluor Daniel GTI, Inc., a Delaware corporation (the "Company"), 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 required documents
to reach the Depositary (as defined in the Offer to Purchase) prior to the
Expiration Date (as defined in the Offer to Purchase). Such form may be
delivered by hand or transmitted by telegram, facsimile transmission or mail
to the Depositary. See Section 2 of the Offer to Purchase.
The Depositary for the Offer is:
BANKBOSTON, N.A.
By First Class Mail: By Overnight Courier or By Hand:
Boston EquiServe, LP Certified mail: Securities Transfer &
Attn: Corporate Boston EquiServe, LP Reporting Services, Inc.
Reorganization Attn: Corporate c/o Boston EquiServe LP
P.O. Box 9061 Reorganization 100 William Street,
Boston, MA 02205-8686 40 Campanelli Drive Galleria
Braintree, MA 02184 New York, NY 10038
By Facsimile Transmission: Confirm Facsimiles by Telephone:
(For Eligible Institutions Only) (781) 794-6388
(781) 794-6352
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Tiger Acquisition Corporation, a Delaware
corporation ("Purchaser"), which is a newly-formed, wholly-owned subsidiary of
International Technology Corporation, a Delaware corporation doing business as
The IT Group, Inc. ("Parent"), upon the terms and subject to the conditions
set forth in the Offer to Purchase dated November 3, 1998 (the "Offer to
Purchase") and the related Letter of Transmittal (which, together with the
Offer to Purchase, constitute the "Offer"), receipt of which is hereby
acknowledged. The information regarding the number of Shares indicated below
is provided pursuant to the guaranteed delivery procedures set forth in
Section 2 of the Offer to Purchase.
Certificate No(s). Name(s) of Record Holder(s): ______
(if available): ___________________ ___________________________________
Number of Shares: _________________ ___________________________________
___________________________________ (PLEASE TYPE OR PRINT)
Check box if Shares will be
tendered by book-entry transfer:
[_] Address(es): ______________________
Account Number: ___________________ Area Code and Tel. No.: ___________
Dated: ____________________________ Signature(s): _____________________
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a bank, broker, dealer, credit union, savings association
or other entity that is a member in good standing of the Securities Transfer
Agents Medallion Program, the New York Stock Exchange Medallion Signature
Guarantee Program or the Stock Exchange Medallion Program, (a) represents that
the above named person(s) "own(s)" the Shares tendered hereby within the
meaning of Rule l4e-4 promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), (b) represents that such tender of Shares
complies with Rule 14e-4 under the Exchange Act, and (c) guarantees delivery
to the Depositary, at one of its addresses set forth above, of certificates
representing the Shares tendered hereby in proper form for transfer, or
confirmation of book-entry transfer of such Shares into the Depositary's
accounts at The Depositary Trust Company, in each case with delivery of a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), and any other required documents, within three (3) New York Stock
Exchange trading days after the date hereof.
___________________________________ ___________________________________
NAME OF FIRM AUTHORIZED SIGNATURE
___________________________________ ___________________________________
ADDRESS TITLE
___________________________________ Name ______________________________
ZIP CODE PLEASE TYPE OR PRINT
Area Code and Tel. No.: ___________ Date: _____________________________
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE.
CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL
2
<PAGE>
EXHIBIT (a)(4)
OFFER TO PURCHASE FOR CASH
ALL ISSUED AND OUTSTANDING SHARES OF
COMMON STOCK
OF
FLUOR DANIEL GTI, INC.
AT
$8.25 NET PER SHARE
BY
TIGER ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY
OF
THE IT GROUP, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, DECEMBER 2, 1998, UNLESS THE OFFER IS EXTENDED.
November 3, 1998
To Brokers, Dealers, Commercial Banks,
Trust Companies And Other Nominees:
We have been engaged to act as Information Agent in connection with the
offer by Tiger Acquisition Corporation, a Delaware corporation ("Purchaser"),
which is a newly-formed, wholly-owned subsidiary of International Technology
Corporation, a Delaware corporation doing business as The IT Group, Inc.
("Parent"), to purchase all of the issued and outstanding shares of common
stock, par value $.001 per share (the "Shares"), of Fluor Daniel GTI, Inc., a
Delaware corporation (the "Company"), at $8.25 per Share, net to each
tendering stockholder in cash, without interest, upon the terms and subject to
the conditions set forth in Purchaser's Offer to Purchase dated November 3,
1998 (the "Offer to Purchase") and the related Letter of Transmittal (which,
together with the Offer to Purchase, constitute the "Offer").
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (A) THE SATISFACTION OR
WAIVER OF CERTAIN CONDITIONS TO THE OBLIGATIONS OF PURCHASER AND THE
COMPANY TO CONSUMMATE THE OFFER, INCLUDING RECEIPT BY PURCHASER AND
THE COMPANY OF CERTAIN GOVERNMENTAL AND REGULATORY APPROVALS, AND
(B) ON THE "MINIMUM SHARE NUMBER" (AS DEFINED IN THE OFFER TO
PURCHASE) BEING TENDERED.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, or who hold
Shares registered in their own names, we are enclosing the following
documents:
1. Offer to Purchase dated November 3, 1998;
2. Letter of Transmittal to be used by stockholders of the Company in
accepting the Offer and tendering Shares;
3. Letter to Clients which may be sent to your clients for whose account
you hold Shares in your name or in the name of your nominees, with space
provided for obtaining such clients' instructions with regard to the Offer;
4. Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Shares are not immediately available or time will not
permit all required documents to reach the Depositary prior to the
Expiration Date (as defined in the Offer to Purchase) or if the procedures
for book-entry transfer, as set forth in the Offer to Purchase, cannot be
completed in a timely manner;
<PAGE>
5. Guidelines for certification of taxpayer identification number on
Substitute Form W-9; and
6. Return envelope addressed to BankBoston, N.A., as Depositary.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will accept for payment and pay for all of the Shares
validly tendered pursuant to the Offer prior to the Expiration Date and not
withdrawn in accordance with the provisions set forth in the Offer to
Purchase. The term "Expiration Date" shall mean 12:00 Midnight, New York City
time, on Wednesday, December 2, 1998, unless and until Parent, in its sole
discretion (subject to restrictions set forth in the Offer to Purchase), shall
from time to time have extended the period of time during which the Offer is
open, in which event the term "Expiration Date" shall mean the latest time and
date at which the Offer, as so extended by Parent, shall expire.
Parent reserves the right, in its sole discretion (but subject to the terms
and conditions of the Offer to Purchase), to (i) from time to time extend the
Offer for a period not to exceed ten (10) business days (as defined in the
Offer to Purchase) after the previously scheduled Expiration Date of the Offer
if at any scheduled Expiration Date any of the conditions to the Offer has not
been satisfied or waived, (ii) extend the Offer for any period required by any
rule, regulation, interpretation or position of the Securities and Exchanges
Commission or the Staff thereof applicable to the Offer and (iii) extend the
Offer for any reason on up to two (2) occasions in each case for a period of
not more than five (5) business days (as defined in the Offer to Purchase)
beyond the latest Expiration Date that would be otherwise permitted under
clause (i) or (ii) of this sentence if on such Expiration Date there shall
have been tendered more than the number of Shares sufficient to satisfy the
Minimum Condition (as defined in the Offer to Purchase) but less than 90% of
the Shares, provided the Purchaser agrees to permanently waive certain
conditions, as set forth in the Offer to Purchase.
If all of the conditions to the Offer are not satisfied on any scheduled
Expiration Date of the Offer then, provided that all such conditions are
reasonably capable of being satisfied prior to December 31, 1998, Parent shall
extend the Offer from time to time (each such individual extension not to
exceed ten (10) business days) until such conditions are satisfied or waived,
provided that Parent shall not be required to extend the Offer beyond December
31, 1998.
Any extension by Parent shall be effective by giving oral or written notice
of such extension to the Depositary. During any such extension, all Shares
previously tendered and not withdrawn will remain subject to the Offer,
subject to the rights of a tendering stockholder to withdraw such
stockholder's Shares. If Parent extends the Offer, or if Purchaser (whether
before or after its acceptance for payment of Shares) is delayed in its
payment for Shares or is unable to pay for Shares pursuant to the Offer for
any reason, then, without prejudice to Purchaser's rights under the Offer, the
Depositary may retain tendered Shares on behalf of Purchaser, and such Shares
may not be withdrawn except to the extent tendering stockholders are entitled
to withdrawal rights as described in the Offer to Purchase. However, the
ability of Purchaser to delay payment for Shares that Purchaser has accepted
for payment is limited by Rule 14e-1(c) under the Exchange Act.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after either (a)(i) a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), together with any required
signature guarantees, or an Agent's Message (as defined in the Offer to
Purchase) in connection with a book-entry delivery of Shares and any other
required documents, has been timely received by the Depositary at one of its
addresses set forth on the back cover of the Offer to Purchase and (ii) either
Share certificates for tendered Shares have been timely received by the
Depositary at one of such addresses or such Shares have been timely delivered
pursuant to the procedure for book-entry transfer set forth in the Offer to
Purchase (and a Book-Entry Confirmation (as defined in the Offer to Purchase)
timely received by the Depositary) or (b) the tendering stockholder has
complied with the guaranteed delivery procedures set forth in the Offer to
Purchase.
Purchaser will not pay any fees or commissions to any broker or dealer or
other person (other than the Depositary and the Information Agent as described
in the Offer to Purchase) in connection with the solicitation of tenders of
Shares pursuant to the Offer. However, Purchaser will upon request, reimburse
you for customary mailing and handling expenses incurred by you in forwarding
the enclosed materials to your clients.
2
<PAGE>
Purchaser will pay or cause to be paid any stock transfer taxes payable on
the transfer of Shares to it, except as otherwise provided in Instruction 6 of
the enclosed Letter of Transmittal.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, DECEMBER 2, 1998, UNLESS THE
OFFER IS EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal and any other required documents should be
sent to the Depositary and certificates representing the tendered Shares
should be delivered, or such Shares should be tendered by book-entry transfer,
all in accordance with the instructions set forth in the Letter of Transmittal
and the Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their certificates or other required documents prior to the expiration
of the Offer, a tender may be effected by following the guaranteed delivery
procedures specified under Section 2 in the Offer to Purchase.
Any inquiries you may have with respect to the Offer should be addressed to
MacKenzie Partners, Inc. at its address and telephone number set forth on the
back cover page of the Offer to Purchase.
Additional copies of the enclosed materials may be obtained from the
undersigned, MacKenzie Partners, Inc., at (212) 929-5500 or (800) 322-2885.
Very truly yours,
MacKenzie Partners, Inc.
Enclosures
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY PERSON BEING DEEMED AN AGENT OF PURCHASER, THE DEPOSITARY, THE INFORMATION
AGENT OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENTS ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN
THE DOCUMENTS ENCLOSED AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE>
EXHIBIT (a)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
FLUOR DANIEL GTI, INC.
AT
$8.25 NET PER SHARE
BY
TIGER ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY
OF
THE IT GROUP, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, DECEMBER 2, 1998, UNLESS THE OFFER IS EXTENDED.
November 3, 1998
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated November 3,
1998 (the "Offer to Purchase") and the related Letter of Transmittal (which,
together with the Offer to Purchase, constitute the "Offer") relating to an
offer by Tiger Acquisition Corporation, a Delaware corporation ("Purchaser"),
which is a newly-formed, wholly-owned subsidiary of International Technology
Corporation, a Delaware corporation doing business as The IT Group, Inc.
("Parent"), to purchase all of the issued and outstanding shares of common
stock, par value $.001 per share (the "Shares"), of Fluor Daniel GTI, Inc., a
Delaware corporation (the "Company"), at a purchase price of $8.25 per Share,
net to each tendering stockholder in cash, without interest, upon the terms
and subject to the conditions set forth in the Offer (the "Offer Price"). We
are the holder of record of Shares held by us for your account. The Letter of
Transmittal is furnished to you for your information only and cannot be used
by you to tender Shares. A tender of Shares can be made only by us as the
holder of record of your Shares and pursuant to your instructions.
We request instructions as to whether you wish to tender any or all of the
Shares held by us for your account, pursuant to the terms and conditions set
forth in the Offer.
Your attention is directed to the following:
1. The Offer Price is $8.25 per Share, net to each tendering stockholder
in cash, without interest.
2. The Offer is being made for all of the Shares.
3. The Offer is being made pursuant to the terms of an Agreement and Plan
of Merger, dated as of October 27, 1998 (the "Merger Agreement"), by and
among the Company, Purchaser, Parent and Fluor Daniel, Inc., a California
corporation. The Merger Agreement provides, among other things, for the
commencement of the Offer by Purchaser, and further provides that,
following the purchase of Shares pursuant to the Offer and promptly after
the satisfaction or, if permissible, waiver of certain other conditions,
Purchaser will be merged with and into the Company (the "Merger"). The
Company will continue as the surviving corporation after the Merger.
At the effective time of the Merger (the "Effective Time"), each issued
and outstanding Share (other than Shares held by Parent, Purchaser or any
other direct or indirect subsidiary of Parent or Shares that are owned by
the Company or any direct or indirect subsidiary of the Company, which will
be canceled and retired without any payment with respect thereto, or Shares
(the "Dissenting Shares") with respect to which the holder properly
exercises such holder's appraisal rights in accordance with the Delaware
General Corporation Law (collectively, the "Excluded Shares")) shall be
converted into, and become exchangeable for the Offer Price, and the Offer
Price multiplied by the number of such Shares is the "Merger
Consideration."
<PAGE>
At the Effective Time, all Shares, other than Dissenting Shares, shall be
canceled and retired and shall cease to exist, and each certificate
formerly representing any of such Shares (other than any Excluded Shares)
shall thereafter represent only the right to receive the Merger
Consideration.
4. The Company's Board of Directors, acting on the unanimous
recommendation of a special committee of independent directors of the
Company (the "Special Committee"), has unanimously determined that the
Merger Agreement and the transactions contemplated thereby, including the
Offer and the Merger, are fair to and in the best interests of the
stockholders of the Company, has unanimously approved the Merger Agreement
and the transactions contemplated thereby, including the Offer and the
Merger, and recommends that the stockholders accept the Offer and tender
their Shares thereunder.
BT Alex. Brown Incorporated ("BT Alex. Brown"), financial advisor to the
Company, has delivered a written opinion to the Special Committee and the
Company's Board of Directors, dated as of the date of the Merger Agreement
(the "Opinion"), to the effect that, as of that date, the consideration to
be received by the stockholders of the Company pursuant to the Merger
Agreement is fair from a financial point of view to such stockholders. The
full text of the Opinion is contained in the Company's
solicitation/recommendation statement on Schedule 14D-9 filed with the
Securities and Exchange Commission in connection with the Offer.
Stockholders are urged to read the Opinion carefully and in its entirety
for assumptions made, matters considered and limits of the review of BT
Alex. Brown.
5. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Wednesday, December 2, 1998, unless extended.
6. The Offer is conditioned upon, among other things, there being validly
tendered prior to the expiration date and not withdrawn at least the
Minimum Share Number (as defined in the Offer to Purchase) of Shares. The
Offer is also subject to, among other things, the satisfaction or waiver of
certain conditions to the obligations of Parent, Purchaser and the Company
to consummate the Offer, including receipt by Purchaser and the Company of
certain governmental and regulatory approvals.
7. Stockholders who tender Shares will not be obligated to pay brokerage
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares by Purchaser pursuant
to the Offer.
If you wish to have us tender any or all of your Shares, please complete,
sign and return the form set forth below. Your instructions to us should be
forwarded in ample time to permit us to submit a tender on your behalf prior
to the expiration of the Offer.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO
THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
FLUOR DANIEL GTI, INC.
BY
TIGER ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY
OF
THE IT GROUP, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase of Tiger Acquisition Corporation, a Delaware corporation
("Purchaser"), which is a newly-formed, wholly-owned subsidiary of
International Technology Corporation, a Delaware corporation doing business as
The IT Group, Inc. ("Parent"), dated November 3, 1998, and the related Letter
of Transmittal relating to the issued and outstanding shares of common stock,
par value $.001 per share (the "Shares"), of Fluor Daniel GTI, Inc., a
Delaware corporation (the "Company").
This will instruct you to tender to Purchaser the number of Shares indicated
below held by you for the account of the undersigned, on the terms and subject
to the conditions set forth in the Offer to Purchase and Letter of
Transmittal.
NUMBER OF SHARES TO BE TENDERED: SIGN HERE
SHARES*
_____________________________________
_____________________________________
SIGNATURE(S)
_____________________________________
_____________________________________
PLEASE PRINT NAME(S) AND ADDRESS(ES)
HERE
_____________________________________
TAX IDENTIFICATION OR SOCIAL
SECURITY NUMBER
* Unless otherwise indicated, it will be assumed that all of your Shares held
by us for your account are to be tendered.
ACCOUNT NUMBER: _____________________
DATED: ______________________________
3
<PAGE>
EXHIBIT (a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.-- Social security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated
by only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- --------------------------------------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals (joint account) The actual owner of the account
or, if combined funds, any one
of the individuals(1)
3. Husband and wife (joint account) The actual owner of the account
or, if joint funds, either
person(1)
4. Custodian account of a minor (Uniform The minor(2)
Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if the minor is
the only contributor, the
minor(1)
6. Account in the name of The ward, minor,
guardian or committee or incompetent
for a designated ward, person(3)
minor, or incompetent
person
7. a. The usual revocable savings trust The grantor-trustee(1)
account (grantor is also trustee)
b. So-called trust account that is not a The actual owner(1)
legal or valid trust under State law
8. Sole proprietorship account The owner(4)
- --------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- --------------------------------------------------------------------------------
<S> <C>
9. A valid trust, estate, or pension trust The legal entity (Do not furnish
the identifying number of the
personal representative or
trustee unless the legal entity
itself is not designated in the
account title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or educational The organization
organization
12. Partnership account held in the name of The partnership
the business
13. Association, club, or other tax-exempt The organization
organization
14. A broker or registered nominee The broker or nominee
15. Account with the Department of The public entity
Agriculture in the name of a public
entity (such as a State or local
government, school district, or prison)
that receives agricultural program
payments
- --------------------------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) You must show your individual name, but you may also enter your business
name or "doing business as" name. You may use either your social security
number or employer identification number (if you have one).
(5) List first and circle the name of the legal trust, estate, or pension
trust.
NOTE: If no name is circled when there is more than one name listed, the
number will be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you do not have a taxpayer identification number, obtain Form SS-5,
Application for a Social Security Number Card, or Form SS-4, Application for
an Employer Identification Number, at the local office of the Social Security
Administration or the Internal Revenue Service and apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include
the following:
. A corporation.
. A financial institution.
. An organization exempt from tax under Section 501(a), or an individual
retirement plan.
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization or any agency, or instrumentality thereof.
. A registered dealer in securities or commodities required to register in
the United States, the District of Columbia, or a possession of the United
States.
. A real estate investment trust.
. A common trust fund operated by a bank under Section 584(a).
. An exempt charitable remainder trust described in Section 664, or a non-
exempt trust described in Section 4947(a)(1).
. An entity registered at all times under the Investment Company Act of
1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under Section 1441.
. Payments to partnerships not engaged in a trade or business in the United
States and which have at least one nonresident alien partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. Note: You may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you either have
not provided your taxpayer identification number to the payer or have
provided an incorrect taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in Section 6049(b)(5) to nonresident aliens.
. Payments on tax-free covenant bonds under Section 1451.
. Payments made by certain foreign organizations.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT
TO THE PAYER.
Certain payments, other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see Sections 6041, 6041A(a), 6045, and 6050A and the
regulations issued thereunder.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other items of income to give taxpayer identification numbers to
payers who must file information returns with the IRS to report those
payments. The IRS uses the numbers for identification purposes. Payers must be
given the numbers whether or not recipients are required to file tax returns.
Payers must generally withhold 31% of taxable interest, dividend, and certain
other payments to a payee who does not furnish a taxpayer identification
number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you
fail to furnish your taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due
to reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in a decrease in
the amount of backup withholding, you are subject to a penalty of $500.
(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 INTERNAL REVENUE
SERVICE.
<PAGE>
================================================================================
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares (as defined below). The Offer (as defined below) is
made solely by the Offer to Purchase, dated November 3, 1998, and the
related Letter of Transmittal, and is being made to all holders of
Shares. The Offer is not being made to (nor will tenders be accepted
from or on behalf of) holders of Shares in any jurisdiction in
which the making of the Offer or the acceptance thereof would
not be in compliance with the securities, blue sky or other
laws of such jurisdiction. Purchaser (as defined below)
may, in its discretion, however, take such action as it
may deem necessary to make the Offer in any jurisdiction
and extend the Offer to holders of Shares in such
jurisdiction. In any jurisdiction where the securities,
blue sky or other laws require the Offer to be made
by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of Purchaser by one
or more registered brokers or dealers licensed
under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Issued and Outstanding Shares of Common Stock
of
Fluor Daniel GTI, Inc.
at
$8.25 Net Per Share
by
Tiger Acquisition Corporation
a wholly-owned subsidiary of
The IT Group, Inc.
Tiger Acquisition Corporation, a Delaware corporation ("Purchaser"), which
is a newly-formed, wholly-owned subsidiary of International Technology
Corporation, a Delaware corporation doing business as The IT Group, Inc.
("Parent"), is offering to purchase all of the issued and outstanding shares of
common stock, par value $.001 per share (the "Shares"), of Fluor Daniel GTI,
Inc., a Delaware corporation (the "Company"), at a price of $8.25 per Share, net
to each tendering stockholder in cash, without interest (the "Offer Price"),
upon the terms and subject to the conditions set forth in the Offer to Purchase
dated November 3, 1998 (the "Offer to Purchase") and in the related Letter of
Transmittal (which, together with the Offer to Purchase, constitute the
"Offer"). The Offer is being made pursuant to the terms of an Agreement and Plan
of Merger (the "Merger Agreement"), dated as of October 27, 1998, by and among
the Company, Purchaser, Parent and Fluor Daniel, Inc., a California corporation.
The Merger Agreement provides, among other things, for the commencement of the
Offer by Purchaser, and further provides that, following the purchase of Shares
pursuant to the Offer and promptly after the satisfaction or, if permissible,
waiver of certain other conditions, Purchaser will be merged with and into the
Company (the "Merger"). The Company will continue as the surviving corporation
after the Merger.
------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON WEDNESDAY, DECEMBER 2, 1998, UNLESS THE OFFER IS EXTENDED.
------------------------------------------------------------------------
At the effective time of the Merger (the "Effective Time"), each Share
(other than Shares held by Parent, Purchaser or any other direct or indirect
subsidiary of Parent or Shares that are owned by the Company or any direct or
indirect subsidiary of the Company, which will be canceled and retired without
any payment with respect thereto, or Shares (the "Dissenting Shares") with
respect to which the holder properly exercises such holder's appraisal rights in
accordance with the Delaware General Corporation Law (collectively, the
"Excluded Shares")), shall be converted into and become exchangeable for the
Offer Price, and the Offer Price multiplied by the number of such Shares is the
"Merger Consideration."
At the Effective Time, all Shares, other than Dissenting Shares, shall be
canceled and retired and shall cease to exist, and each certificate formerly
representing any of such Shares (other than any Excluded Shares) shall
thereafter represent only the right to receive the Merger Consideration.
THE BOARD OF DIRECTORS OF THE COMPANY, ACTING ON THE UNANIMOUS
RECOMMENDATION OF A SPECIAL COMMITTEE OF INDEPENDENT DIRECTORS (THE "SPECIAL
COMMITTEE"), HAS UNANIMOUSLY DETERMINED THAT THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, ARE FAIR
TO AND IN THE BEST INTERESTS OF THE STOCKHOLDERS OF THE COMPANY, HAS UNANIMOUSLY
APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING THE OFFER AND THE MERGER, AND RECOMMENDS THAT THE STOCKHOLDERS ACCEPT
THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
The Offer is conditioned upon, among other things, there being validly
tendered prior to the Expiration Date and not withdrawn the Minimum Share Number
(as defined in the Offer to Purchase) of Shares. The Offer is also conditioned
on the satisfaction or waiver of certain other conditions, including receipt by
Purchaser and the Company of certain governmental and regulatory approvals. Any
determination concerning the satisfaction of such terms and conditions will be
made by Purchaser in its good faith judgment and such determination will be
final and binding on all tendering stockholders.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), Purchaser will accept for payment and pay for all of the Shares
validly tendered pursuant to the Offer prior to the Expiration Date and not
withdrawn in accordance with the provisions set forth in the Offer to Purchase.
The term "Expiration Date" shall mean 12:00 Midnight, New York City time, on
Wednesday, December 2, 1998, unless and until Parent, in its sole discretion
(but subject to restrictions contained in the Merger Agreement), shall from time
to time have extended the period of time during which the Offer is open, in
which event the term "Expiration Date" shall mean the latest time and date at
which the Offer, as so extended by Parent, shall expire.
Parent reserves the right, in its sole discretion (but subject to the terms
and conditions of the Offer to Purchase), to (i) from time to time extend the
Offer for a period not to exceed ten (10) business days (as defined in the Offer
to Purchase) after the previously scheduled Expiration Date of the Offer if at
any scheduled Expiration Date any of the conditions to the Offer has not been
satisfied or waived, (ii) extend the Offer for any period required by any rule,
regulation, interpretation or position of the Securities and Exchange Commission
or the Staff thereof applicable to the Offer and (iii) extend the Offer for any
reason on up to two (2) occasions in each case for a period of not more than
five (5) business days (as defined in the Offer to Purchase) beyond the latest
Expiration Date that would be otherwise permitted under clause (i) or (ii) of
this sentence if on such Expiration Date there shall have been tendered more
than the number of Shares sufficient to satisfy the Minimum Condition (as
defined in the Offer to Purchase) but less than 90% of the Shares, provided the
Purchaser agrees to permanently waive certain conditions, as set forth in the
Offer to Purchase.
If all of the conditions to the Offer are not satisfied on any scheduled
Expiration Date of the Offer then, provided that all such conditions are
reasonably capable of being satisfied prior to December 31, 1998, Parent shall
extend the Offer from time to time (each such individual extension not to
exceed ten (10) business days) until such conditions are satisfied or waived,
provided that Parent shall not be required to extend the Offer beyond December
31, 1998.
Any extension by Parent shall be effective by giving oral or written notice
of such extension to BankBoston, N.A., as Depositary (the "Depositary"). During
any such extension, all Shares previously tendered and not withdrawn will remain
subject to the Offer, subject to the rights of a tendering stockholder to
withdraw such stockholder's Shares. If Parent extends the Offer, or if Purchaser
(whether before or after its acceptance for payment of Shares) is delayed in its
payment for Shares or is unable to pay for Shares pursuant to the Offer for any
reason, then, without prejudice to Purchaser's rights under the Offer, the
Depositary may retain tendered Shares on behalf of Purchaser, and such Shares
may not be withdrawn except to the extent tendering stockholders are entitled to
withdrawal rights as described in the Offer to Purchase. However, the ability of
Purchaser to delay payment for Shares that Purchaser has accepted for payment is
limited by Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after either (a)(i) a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), together with any required
signature guarantees, or an Agent's Message (as defined in the Offer to
Purchase) in connection with a book-entry delivery of Shares and any other
required documents, has been timely received by the Depositary at one of its
addresses set forth on the back cover of the Offer to Purchase and (ii) either
Share certificates for tendered Shares have been timely received by the
Depositary at one of such addresses or such Shares have been timely delivered
pursuant to the procedure for book-entry transfer set forth in the Offer to
Purchase (and a Book-Entry Confirmation (as defined in the Offer to Purchase)
timely received by the Depositary) or (b) the tendering stockholder has complied
with the guaranteed delivery procedures set forth in the Offer to Purchase.
Pursuant to the Merger Agreement, Parent may make any changes in the terms
and conditions of the Offer, provided that, unless previously approved by the
Special Committee and the Company's Board of Directors in writing, Parent may
not (i) decrease the Offer Price, (ii) change the form of consideration payable
in the Offer, (iii) reduce the maximum number of Shares to be purchased in the
Offer, (iv) amend the conditions to the Offer set forth in the Merger Agreement
to broaden their scope, (v) impose additional conditions of the Offer or amend
any other term of the Offer in any manner adverse to holders of Shares or
extend the Offer if all of the conditions to the Offer are satisfied or waived,
or (vi) amend the Minimum Condition.
Tenders of Shares made pursuant to the Offer will be irrevocable, except
that Shares tendered may be withdrawn at any time prior to the Expiration Date,
and, unless theretofore accepted for payment and paid for as provided herein,
may also be withdrawn at any time on or after January 2, 1999. For a withdrawal
to be effective, a written, telegraphic or facsimile transmission notice of
withdrawal must be timely received by the Depositary at one of its addresses set
forth on the back cover of the Offer to Purchase. Any notice of withdrawal must
specify the name of the person who tendered the Shares to be withdrawn, the
number of Shares to be withdrawn and the name of the registered holder of the
Shares to be withdrawn as set forth on such Share certificates if different from
the name of the person who tendered such Shares. If Share certificates have been
delivered or otherwise identified to the Depositary, then, prior to the physical
release of such Share certificates, the serial numbers shown on such Share
certificates must be furnished to the Depositary and, unless such Shares have
been tendered by an Eligible Institution (as defined in the Offer to Purchase),
the signatures on the notice of withdrawal must be guaranteed by an Eligible
Institution. If Shares have been delivered pursuant to the procedures for book-
entry transfer set forth in the Offer to Purchase, any notice of withdrawal must
specify the name and number of the account at the Book-Entry Transfer Facility
(as defined in the Offer to Purchase) to be credited with such withdrawn Shares
and otherwise comply with such Book-Entry Transfer Facility's procedures for
withdrawal, in which case a notice of withdrawal will be effective if delivered
to the Depositary by any method of delivery described in the second sentence of
this paragraph. All questions as to the form and validity (including time of
receipt) of notices of withdrawal will be determined by Purchaser in its sole
discretion, and its determination will be final and binding. No withdrawal of
Shares will be deemed to have been properly made until all defects and
irregularities have been cured or waived. Withdrawals of tenders of Shares may
not be rescinded, and any Shares properly withdrawn will thereafter be deemed
not validly tendered for purposes of the Offer. However, withdrawn Shares may be
retendered by following one of the procedures described in the Offer to Purchase
at any time prior to the Expiration Date.
The Company has provided Purchaser with the Company stockholder list, a
nonobjecting beneficial owners list, and security position listings for the
purpose of disseminating the Offer to holders of Shares. The Offer to Purchase
and the Letter of Transmittal and other material relevant to the Offer will be
mailed to record holders of Shares and furnished to brokers, dealers, commercial
banks, trust companies and similar persons whose names, or the names of whose
nominees, appear on the 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 information required to be disclosed by Rule 14d-6(e)(1)(vii) and Rule
13e-3(e)(1) of the General Rules and Regulations under the Exchange Act is
contained in the Offer to Purchase and is incorporated herein by reference.
The Offer to Purchase and the Letter of Transmittal contain important
information which should be read carefully before any decision is made with
respect to the Offer.
Requests for copies of the Offer to Purchase, the Letter of Transmittal and
other materials related to the Offer may be directed to the Information Agent as
set forth below, and copies will be furnished promptly at Purchaser's expense.
Questions or requests for assistance may be directed to the Information Agent.
The Information Agent for the Offer is:
MACKENZIE
PARTNERS, INC.
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
CALL TOLL-FREE (800) 322-2885
November 3, 1998
================================================================================
<PAGE>
EXHIBIT (a)(8)
FOR IMMEDIATE RELEASE
Investor Contact: Richard R. Conte Media Contact : William L. Mulvey
(412) 372-7701 (202) 682-1147
THE IT GROUP, INC. COMMENCES TENDER OFFER FOR ALL OUTSTANDING SHARES OF FLUOR
DANIEL GTI, INC. COMMON STOCK
Pittsburgh, Pennsylvania -- November 3, 1998 -- A newly formed, wholly-owned
subsidiary of The IT Group, Inc. (NYSE: ITX), Tiger Acquisition Corporation,
today commenced its previously announced tender offer for the purchase of all of
the issued and outstanding shares of common stock, par value $.001 (the
"Shares"), of Fluor Daniel GTI, Inc. (NASDAQ: FDGT) ("FDGTI") at a price of
$8.25 per Share, net to each tendering stockholder in cash, without interest.
The offer is being made pursuant to the previously announced acquisition
agreement between Tiger Acquisition Corporation, The IT Group, FDGTI and Fluor
Daniel, Inc. in which The IT Group would acquire FDGTI in a two-step
transaction. The first step would consist of a cash tender offer for all of the
issued and outstanding Shares, and the second step would be a cash-out merger
with remaining outstanding Shares converted into the right to receive $ 8.25 per
Share.
The offer is conditioned upon, among other things, the expiration of the
applicable waiting period under the Hart-Scott-Rodino Antitrust Improvement Act
of 1976 and there being validly tendered by the Expiration Date, and not
withdrawn, all of the Shares owned by Fluor Daniel, Inc., representing
approximately 52% of the Shares as of October 30, 1998, and at least a majority
of the remaining Shares. The offer and withdrawal rights of the stockholders
wishing to participate in the tender offer will expire at 12:00 midnight, New
York City time, on Wednesday, December 2, 1998 unless Tiger Acquisition
Corporation or The IT Group elects (subject to the terms of their agreement with
FDGTI) to extend the offer.
The Board of Directors of FDGTI, acting on the unanimous recommendation of a
Special Committee of independent directors, has unanimously determined that the
offer is fair to and in the best interests of the stockholders of FDGTI.
FDGTI's Board of Directors unanimously recommends that the FDGTI stockholders
accept the offer and tender all of their Shares.
The IT Group, Inc., with more than 4,600 employees in over 60 offices, is a
leading diversified services company offering a full range of consulting,
facilities management, engineering and construction, and remediation services.
The IT Group's common stock and depositary shares are traded on the New York
Stock Exchange under the symbols ITX and ITXpr, respectively. The IT Group is in
the process of changing its name from International Technology Corporation.
Fluor Daniel GTI, Inc. is a leading global environmental services company with
approximately 1200 employees located in more than 50 offices throughout North
America, Europe and Australia. FDGTI's common stock is traded on the NASDAQ
exchange under the symbol FDGT.
MacKenzie Partners, Inc. is acting as information agent. Requests for assistance
or copies of the tender offer materials may be directed to MacKenzie Partners,
Inc. by telephoning 1-800-322-2885.
1
<PAGE>
EXHIBIT(b)(3)
FORM OF EXECUTION COPY
FIRST AMENDMENT TO CREDIT AGREEMENT
This First Amendment to Credit Agreement dated as of September 16, 1998
(this "Amendment"), is entered into among International Technology Corporation
(the "Company"), IT Corporation ("ITC"), OHM Corporation ("OHM"), OHM
Remediation Services Corp. ("OHM Remediation") and Beneco Enterprises, Inc.
("Beneco"; together with the Company, ITC, OHM and OHM Remediation, the
"Borrowers") and the Revolving Credit Lenders (as defined in the Credit
Agreement referred to below), and amends the Credit Agreement dated as of
February 25, 1998 and amended and restated as of June 11, 1998 (as amended
hereby and. as the same may be further amended, supplemented or otherwise
modified from time to time, the "Credit Agreement") entered into among the
Borrowers, the institutions from time to time party thereto as lenders (the
"Lenders"), the institutions from time to time party thereto as issuing banks
(the "Issuing Banks"), Citicorp USA, Inc., in its capacity as administrative
Agent for the Lenders and the Issuing Banks (in such capacity, the
"Administrative Agent"), BankBoston, N.A., in its capacity as documentation
agent for the Lenders and the Issuing Banks, and Royal Bank of Canada and Credit
Lyonnais New York Branch, in their respective capacities as co-agents.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to them in the Credit Agreement.
WITNESSETH:
WHEREAS, the Borrowers have requested the Revolving Credit Lenders to
increase the aggregate Revolving Credit Commitments from $150,000,000 to
$185,000,000;
WHEREAS, pursuant to Section 13.07(b)(ii) of the Credit Agreement, the
consent of each of the Revolving Credit Lenders is required to increase the
amount of the Revolving Commitments;
NOW, THEREFORE, in consideration of the above premises, the Borrower and
the Revolving Credit Lenders agree as follows:
SECTION 1. Amendment to Exhibits and Schedules to the Credit Agreement.
-----------------------------------------------------------
The Credit Agreement is, effective as of the Amendment Effective Date, hereby
amended as follows:
(a) The definition of "Revolving Credit Commitment" contained in Section
1.01 of the Credit Agreement is amended by deleting the amount "$150,000,000"
contained therein and replacing it with the amount "$185,000,000".
(b) The definition of "Revolving Credit Sublimit" contained in Section 1.01
of the Credit Agreement is amended in its entirety to read as follows:
"Revolving Credit Sublimit" means, with respect to any Borrower, the
amount set forth below opposite the name of such Borrower, which amount is the
<PAGE>
maximum amount of Revolving Credit Obligations available to be extended to such
Borrower on and after the Merger Funding Date:
<TABLE>
<CAPTION>
Borrower Amount
- -------- ------
<S> <C>
The Company $ 10,000,000
ITC 185,000,000
OHM 10,000,000
OHM Remediation 50,000,000
Beneco $ 50,000,000
</TABLE>
provided, however, the Revolving Credit Sublimit of any Borrower may be adjusted
- -------- -------
at the request of such Borrower by written notice of such request to the
Administrative Agent and the acceptance of such request by the Administrative
Agent in its reasonable discretion.
(c) The amount set forth opposite the name of each Revolving Credit Lender
under the heading "Revolving Credit Commitment" contained in Schedule 1.01.1 to
the Credit Agreement (as modified by each Assignment and Acceptance entered into
after the Merger Funding Date and prior to the date hereof) is hereby deleted in
its entirety and replaced with the amount set forth opposite the name of such
Lender on Schedule 1 attached hereto and made a part hereof
SECTION 2. Conditions Precedent to the Effectiveness of this Amendment.
-----------------------------------------------------------
This Amendment shall become effective as of the date hereof on the date (the
"Amendment Effective Date") when the following conditions precedent have been
satisfied:
(a) Certain Documents. The Administrative Agent shall have received on or
before the Amendment Effective Date all of the following, all of which shall be
in form and substance satisfactory to the Administrative Agent, in sufficient
originally executed copies for each of the Lenders:
(i) this Amendment executed by the Borrowers and each Revolving
Credit Lender,
(ii) an Acknowledgment substantially in the form of Exhibit A
attached hereto executed by each Subsidiary Guarantor;
(iii) a Certificate of the Secretary of each Borrower,
certifying, among other things, (A) resolutions of the Board of Directors
of such Borrower authorizing, this Amendment, (B) the names and signatures
of the officers of such Borrower authorized, on behalf of such Borrower, to
execute this Amendment and (iii) that there have been no changes in the
Certificate of Incorporation and Bylaws of such Borrower since the Merger
Funding Date;
(iv) an opinion of counsel to the Borrowers addressing such
matters as the Administrative Agent or the Revolving Credit Lenders may
reasonably request; and
(v) such additional documentation as the Administrative Agent or
the Revolving Credit Lenders may reasonably require.
(b) Representations and Warranties. Each of the representations and
------------------------------
warranties made by the Borrowers or the Subsidiary Guarantors in or pursuant to
the Credit Agreement, as amended by this Amendment, and the other Loan Documents
to which the Borrowers or any of the Guarantors is a party or by which the
Borrowers or any of the Subsidiary Guarantors is bound, shall be true and
correct in all
<PAGE>
material respects on and as of the Amendment Effective Date (other than
representations and warranties in any such Loan Document which expressly speak
as of a different date).
(c) Corporate and Other Proceedings. All corporate and other
-------------------------------
proceedings, and all documents, instruments and other legal matters in
connection with the transactions contemplated by this Amendment shall be
satisfactory in all respects in form and substance to the Administrative Agent
and the Revolving Credit Lenders.
(d) No Events of Default. No Event of Default or Default shall have
--------------------
occurred and be continuing on the Amendment Effective Date.
(e) Consents. Each of the Borrowers and the Subsidiary Guarantors shall
--- --------
have received all consents and authorizations required pursuant to any material
Contractual Obligation with any other Person and shall have obtained all
consents and authorizations of, and effected all notices to and filings with,
any Governmental Authority as may be necessary to allow each of the Borrowers
and the Subsidiary Guarantors lawfully to consummate the transactions
contemplated in this Amendment. No such consent or authorization shall impose
any conditions upon the Borrowers or the Subsidiary Guarantors that are not
reasonably acceptable to the Revolving Credit Lenders.
(f) Fees Paid. On the Amendment Effective Date there shall have been paid
---------
to the Administrative Agent, for the account of the Revolving Credit Lenders,
for their respective individual accounts, all fees (including, without
limitation, the reasonable legal fees of counsel to the Administrative Agent and
all fees payable pursuant to Section 5(b) of this Amendment) due and payable on
or before the Amendment Effective Date.
SECTION 3. Representations and Warranties. Each Borrower hereby represents
------------------------------
and warrants to the Lenders that (a) as of the date hereof no Event of Default
or Default under the Credit Agreement shall have occurred and be continuing and
(b) all of the representations and warranties of such Borrower contained in
Section 6.01 of the Credit Agreement and in any other Loan Document continue to
be true and correct as of the date of execution hereof in all material respects,
as though made on and as of such date (other than representations and warranties
in any such Loan Document which expressly speak as of a different date).
SECTION 4. Reference to and Effect on the Loan Documents.
---------------------------------------------
(a) Upon the effectiveness of this Amendment, on and after the date hereof,
each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof" or words of like import, and each reference in the other Loan Documents
to the Credit Agreement, shall mean and be a reference to the Credit Agreement
as amended hereby.
(b) Except as specifically amended above, all of the terms of the Credit
Agreement and all other Loan Documents shall remain unchanged and in full force
and effect.
(c) The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein, operate as a waiver of any right, power or
remedy of any Lender, any Issuing Bank or the Administrative Agent under the
Credit Agreement or any of the Loan Documents, nor constitute a waiver of any
provision of the Credit Agreement or any of the Loan Documents.
SECTION 5. Fees, Costs and Expenses.
------------------------
(a) The Borrowers agree to pay on demand in accordance with the terms of
Section 13.02 of the Credit Agreement all costs and expenses of the
Administrative Agent in connection with the preparation,
<PAGE>
reproduction, execution and delivery of this Amendment and all other Loan
Documents entered into in connection herewith, including the reasonable fees and
out-of-pocket expenses of Sidley & Austin, counsel for the Administrative Agent
with respect thereto.
(b) On the Amendment Effective Date the Borrowers agree to pay (1) to each
Revolving Credit Lender a consent fee equal to 0.075% of such Lender's Revolving
Credit Commitment on the Amendment Effective Date (immediately prior to giving
effect to any increase in such Commitment made pursuant to this Amendment) and
(2) to each Revolving Credit Lender that is increasing its Revolving Credit
Commitment on the Amendment Effective Date, a commitment fee equal to 0.375% of
the amount by which such Revolving Credit Lender's Revolving Credit Commitment
is being increased (after giving effect to this Amendment).
SECTION 6. Execution in Counterparts. This Amendment may be executed and
-------------------------
delivered in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original and all of which taken together shall constitute one and the
same original agreement.
SECTION 7. Affirmation of Borrower Guaranties. Each of the Borrowers
----------------------------------
hereby consents to the terms of this Amendment in its capacity as a guarantor
under the Borrower Guaranty to which it is a party and agrees that the terms of
this Amendment shall not affect in any way its obligations and liabilities under
its Borrower Guaranty or any other Loan Document to which it is a party, all of
which obligations and liabilities shall remain in full force and effect and each
of which is hereby reaffirmed.
SECTION 8. Governing Law. This Amendment shall be interpreted, and the
-------------
rights and liabilities of the parties determined, in accordance with the
internal law of the State of New York.
<PAGE>
IN WITNESS WHEREOF, this Amendment has been duly executed on the date set forth
above.
INTERNATIONAL TECHNOLOGY
CORPORATION
By ________________________________
Name:
Title:
IT CORPORATION
By ________________________________
Name:
Title:
OHM CORPORATION
By ________________________________
Name:
Title:
OHM REMEDIATION SERVICES CORP.
By ________________________________
Name:
Title:
BENECO ENTERPRISES, INC.
By ________________________________
Name:
Title:
<PAGE>
CITICORP USA, INC.,
By ________________________________
Name:
Title:
BANKBOSTON, N.A.
By ________________________________
Name:
Title:
ROYAL BANK OF CANADA
By ________________________________
Name:
Title:
CREDIT LYONNAIS
By ________________________________
Name:
Title:
BHF BANK AKTIENGESELLSCHAFT
By ________________________________
Name:
Title:
UNION BANK OF CALIFORNIA
By ________________________________
Name:
Title:
<PAGE>
SOCIETE GENERALE
By ________________________________
Name:
Title:
SANWA BUSINESS CREDIT CORPORATION
By ________________________________
Name:
Title:
COMERICA BANK
By ________________________________
Name:
Title:
FLEET BANK, N.A.
By ________________________________
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN,
LIMITED
By ________________________________
Name:
Title:
KEYBANK NATIONAL ASSOCIATION
By ________________________________
Name:
Title:
<PAGE>
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By ________________________________
Name:
Title:
THE BANK OF NOVA SCOTIA
By ________________________________
Name:
Title:
BANCO ESPIRITO SANTO E COMERCIAL DE
LISBOA, NASSAU BRANCH
By ________________________________
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
By ________________________________
Name:
Title:
BANK POLSKA KASA OPIEKI S.A., PEKAO
S.A. GROUP, NEW YORK BRANCH
By ________________________________
Name:
Title:
<PAGE>
SCHEDULE I
REVOLVING CREDIT COMMITMENTS
<TABLE>
<CAPTION>
Lender Amount
------ ------
<S> <C>
CITICORP USA, INC. $ 19,100,000
BANKBOSTON, N.A. 19,100,000
BHF BANK AKTIENGESELLSCHAFT 15,000,000
UNION BANK OF CALIFORNIA 15,000,000
CREDIT LYONNAIS 14,800,000
SOCIETE GENERALE 14,800,000
SANWA BUSINESS CREDIT 13,000,000
CORPORATION
ROYAL BANK OF CANADA 12,333,333
CONMERICA BANK 10,000,000
FLEET BANK, N.A. 7,400,000
THE INDUSTRIAL BANK OF 7,400,000
JAPAN, LIMITED
KEYBANK NATIONAL ASSOCIATION 7,400,000
THE MITSUBISHI TRUST AND 7,400,000
BANKING CORPORATION
THE BANK OF NOVA SCOTIA 7,400,000
PNC BANK, NATIONAL ASSOCIATION 6,166,667
BANCO ESPERIT'O SANTO E COMERCIAL 5,000,000
DE LISBOA, NASSAU BRANCH
BANK POLSKA KASA OPIEKI S.A., 3,700,000
PEKAO S.A. GROUP, NEW YORK BRANCH
Total $185,000,000
</TABLE>
<PAGE>
EXHIBIT (b)(4)
FORM OF EXECUTION COPY
SECOND AMENDMENT TO CREDIT AGREEMENT
This Second Amendment to Credit Agreement dated as of October 26, 1998
(this "Amendment"), is entered into among International Technology Corporation
(the "Company"), IT Corporation ("ITC"), OHM Corporation ("OHM"), OHM
Remediation Services Corp. ("OHM Remediation") and Beneco Enterprises, Inc.
("Beneco"; together with the Company, ITC, OHM and OHM Remediation, the
"Borrowers") and the Lenders (as defined below) party hereto, and amends the
Credit Agreement dated as of February 25, 1998, as amended and restated as of
June 11, 1998 and as further amended pursuant to the First Amendment to Credit
Agreement dated as of September 16, 1998 (as amended hereby and as the same may
be further amended, supplemented or otherwise modified from time to time, the
"Credit Agreement") entered into among the Borrowers, the institutions from time
to time party thereto as lenders (the "Lenders"), the institutions from time to
time party thereto as issuing banks (the "Issuing Banks"), Citicorp USA, Inc.,
in its capacity as administrative agent for the Lenders and the Issuing Banks
(in such capacity, the "Administrative Agent"), BankBoston, N.A., in its
capacity as documentation agent for the Lenders and the Issuing Banks, and Royal
Bank of Canada and Credit Lyonnais New York Branch, in their respective
capacities as co-agents. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the Credit Agreement.
W I T N E S S E T H:
--------------------
WHEREAS, the Company has informed the Administrative Agent that the
Company intends to acquire all of the issued and outstanding shares of the
common stock of a target company previously identified to the Administrative
Agent (the "Target") in a two step transaction for a purchase price of
approximately $69,500,000 (the "GTI Acquisition");
WHEREAS, the terms of the GTI Acquisition would be set forth in a
definitive merger agreement and would provide for a cash tender offer (the
"Tender Offer") for all outstanding shares of the common stock of the Target
(the "Shares") at a purchase price of $8.25 per Share, subject to the condition
that the Company acquire at least 50% of the voting power of the Target upon the
closing of the Tender Offer;
WHEREAS, following the consummation of the Tender Offer the Target
would be merged into a wholly-owned Subsidiary of the Company ("GTI Merger
Subsidiary"), with the Target being the surviving corporation (the "GTI
Merger");
WHEREAS, with respect to the GTI Acquisition and the transactions
contemplated thereby the Company has, among other things, requested the
Requisite Lenders, by amending the Credit Agreement or by otherwise providing
their consent, (i) to agree that, in determining whether the Company is in
compliance with clause (c) of the definition of Permitted Acquisition, the
average Revolving Credit Availability for the 60 days prior to the consummation
of the GTI Acquisition will be determined as if the Revolving Credit Commitments
were $185,000,000 for the entire period in question, (ii) to waive compliance
with (x) any requirement
<PAGE>
in the definition of Permitted Acquisition that the GTI Merger Subsidiary be the
surviving corporation in its merger with the Target in order for the GTI
Acquisition to constitute a Permitted Acquisition and (y) clause (e) of the
definition of Permitted Acquisition in respect of the GTI Acquisition, and (iii)
to amend certain financial covenants contained in Article X of the Credit
Agreement;
WHEREAS, pursuant to Section 13.07(b) of the Credit Agreement, the
consent of the Requisite Lenders is required to modify the Credit Agreement as
requested by the Company;
NOW, THEREFORE, in consideration of the above premises, the Borrowers
and the Lenders party hereto agree as follows:
SECTION 1. Amendment to the Credit Agreement. The Credit Agreement
---------------------------------
is, effective as of the Amendment Effective Date (as defined below), hereby
amended as follows:
(a) Sections 10.01 and 10.02 of the Credit Agreement are amended in
their entirety to read as follows:
10.01 Minimum Consolidated Net Worth. The Company and its
------------------------------
Subsidiaries shall maintain a Consolidated Net Worth at all times during
each period set forth below (commencing on the beginning of the first day
of such period through the end of the last day of such period) in an amount
not less than the minimum amount set forth opposite such period below:
<TABLE>
<CAPTION>
Period Minimum
- ------ -------
<S> <C>
The Merger Funding Date to the last day of the First Fiscal $210,000,000
Quarter of Fiscal Year 1999
The last day of the First Fiscal Quarter of Fiscal Year 1999 $213,600,000
to the last day of the Second Fiscal Quarter of Fiscal Year
1999
The last day of the Second Fiscal Quarter of Fiscal Year $217,300,000
1999 to the last day of the Third Fiscal Quarter of Fiscal
Year 1999
The last day of the Third Fiscal Quarter of Fiscal Year 1999 $222,800,000
to the last day of the Fourth Fiscal Quarter of Fiscal Year
1999
The last day of the Fourth Fiscal Quarter of Fiscal Year $228,200,000
1999 to the last day of the First Fiscal Quarter of Fiscal
Year 2000
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
Period Minimum
- ------ -------
<S> <C>
The last day of the First Fiscal Quarter of Fiscal Year 2000 $232,300,000
to the last day of the Second Fiscal Quarter of Fiscal Year
2000
The last day of the Second Fiscal Quarter of the Fiscal Year $236,400,000
2000 to the last day of the Third Fiscal Quarter of Fiscal
Year 2000
The last day of the Third Fiscal Quarter of the Fiscal Year $242,500,000
2000 to the last day of the Fourth Fiscal Quarter of Fiscal
Year 2000
The last day of the Fourth Fiscal Quarter of Fiscal Year $248,600,000
2000 to the last day of the First Fiscal Quarter of Fiscal
Year 2001
The last day of the First Fiscal Quarter of Fiscal Year 2001 $253,700,000
to the last day of the Second Fiscal Quarter of Fiscal Year
2001
The last day of the Second Fiscal Quarter of the Fiscal Year $258,800,000
2001 to the last day of the Third Fiscal Quarter of Fiscal
Year 2001
The last day of the Third Fiscal Quarter of the Fiscal Year $266,500,000
2001 to the last day of the Fourth Fiscal Quarter of Fiscal
Year 2001
The last day of the Fourth Fiscal Quarter of Fiscal Year $274,200,000
2001 to the last day of the First Fiscal Quarter of Fiscal
Year 2002
The last day of the First Fiscal Quarter of Fiscal Year 2002 $280,600,000
to the last day of the Second Fiscal Quarter of Fiscal Year
2002
The last day of the Second Fiscal Quarter of the Fiscal Year $286,900,000
2002 to the last day of the Third Fiscal Quarter of Fiscal
Year 2002
The last day of the Third Fiscal Quarter of the Fiscal Year $296,400,000
2002 to the last day of the Fourth Fiscal Quarter of Fiscal
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
Period Minimum
- ------ -------
<S> <C>
Year 2002
The last day of the Fourth Fiscal Quarter of Fiscal Year $306,000,000
2002 to the last day of the First Fiscal Quarter of Fiscal
Year 2003
The last day of the First Fiscal Quarter of Fiscal Year 2003 $313,600,000
to the last day of the Second Fiscal Quarter of Fiscal Year
2003
The last day of the Second Fiscal Quarter of Fiscal Year $321,300,000
2003 to the last day of the Third Fiscal Quarter of Fiscal
Year 2003
The last day of the Third Fiscal Quarter of Fiscal Year 2003 $332,800,000
to the last day of the Fourth Fiscal Quarter of Fiscal Year
2003
The last day of the Fourth Fiscal Quarter of Fiscal Year $344,300,000
2003 to the last day of the First Quarter of Fiscal Year
2004
The last day of the First Fiscal Quarter of Fiscal Year 2004 $352,600,000
to the last day of the Second Fiscal Quarter of Fiscal Year
2004
The last day of the Second Fiscal Quarter of the Fiscal Year $360,900,000
2004 to the last day of the Third Fiscal Quarter of Fiscal
Year 2004
The last day of the Third Fiscal Quarter of Fiscal Year 2004 $373,400,000
to the last day of the Fourth Fiscal Quarter of Fiscal Year
2004
The last day of the Fourth Fiscal Quarter of Fiscal Year $385,800,000
2004 to the last day of the First Fiscal Quarter of Fiscal
Year 2005
The last day of the First Fiscal Quarter of Fiscal Year 2005 $395,700,000
to the last day of the Second Fiscal Quarter of Fiscal Year
2005
The last day of the Second Fiscal Quarter of Fiscal Year $405,500,000
2005 to the last day of the Third Fiscal Quarter of Fiscal
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
Period Minimum
- ------ -------
<S> <C>
Year 2005
The last day of the Third Fiscal Quarter of the Fiscal Year
2005 to the last day of the Fourth Fiscal Quarter of Fiscal $420,300,000
Year 2005
The last day of the Fourth Fiscal Quarter of Fiscal Year $435,000,000
2005 to the last day of the First Fiscal Quarter of Fiscal
Year 2006
From and after the last day of the First Fiscal Quarter of $437,900,000
Fiscal Year 2006
</TABLE>
10.02 Minimum Fixed Charge Coverage Ratio. The Company and its
-----------------------------------
Subsidiaries shall maintain a Fixed Charge Coverage Ratio on a consolidated
basis, as determined as of the end of the last day of each fiscal quarter
occurring after the Merger Funding Date set forth below, for the four
fiscal quarter period (or, if the period from July 1, 1998 to such day is
less than four full fiscal quarters, such two or three quarter period, as
applicable) ending on such day, of at least the minimum ratio set forth
opposite such period:
<TABLE>
<CAPTION>
Fiscal Quarter Minimum Ratio
- -------------- -------------
<S> <C>
Fourth Fiscal Quarter of Fiscal Year 1998 1.05 to 1.0
First Fiscal Quarter of Fiscal Year 1999 1.40 to 1.0
Second Fiscal Quarter of Fiscal Year 1999 1.50 to 1.0
Third Fiscal Quarter of Fiscal Year 1999 1.50 to 1.0
Fourth Fiscal Quarter of Fiscal Year 1999 1.60 to 1.0
First Fiscal Quarter of Fiscal Year 2000 1.50 to 1.0
Second Fiscal Quarter of Fiscal Year 2000 1.50 to 1.0
Third Fiscal Quarter of Fiscal Year 2000 1.50 to 1.0
Fourth Fiscal Quarter of Fiscal Year 2000 1.60 to 1.0
First Fiscal Quarter of Fiscal Year 2001 1.70 to 1.0
Second Fiscal Quarter of Fiscal Year 2001 1.80 to 1.0
Third Fiscal Quarter of Fiscal Year 2001 1.80 to 1.0
Fourth Fiscal Quarter of Fiscal Year 2001 1.90 to 1.0
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
Fiscal Quarter Minimum Ratio
- -------------- -------------
<S> <C>
First Fiscal Quarter of Fiscal Year 2002 through 1.90 to 1.0
the Fourth Fiscal Quarter of Fiscal Year 2003
First Fiscal Quarter of Fiscal Year 2004 2.00 to 1.0
Second Fiscal Quarter of Fiscal Year 2004 2.00 to 1.0
Third Fiscal Quarter of Fiscal Year 2004 and each 1.00 to 1.0
Fiscal Quarter thereafter
</TABLE>
(b) Section 10.04 of the Credit Agreement is amended in its
entirety to read as follows:
10.04 Maximum Leverage Ratio. The Company and its Subsidiaries
----------------------
shall maintain a Leverage Ratio on a consolidated basis, as determined as
of the end of the last day of each fiscal quarter set forth below for the
four fiscal quarter period (or, if the period from July 1, 1998 to such day
is less than four fiscal quarters, such two or three quarter period, as
applicable) ending on such day (commencing on the beginning of the first
day of such period through the end of the last day of such period) of not
more than the maximum ratio set forth opposite such period:
<TABLE>
<CAPTION>
Fiscal Quarter Maximum Ratio
- -------------- -------------
<S> <C>
Fourth Fiscal Quarter of Fiscal Year 1998 5.20 to 1.0
First Fiscal Quarter of Fiscal Year 1999 4.40 to 1.0
Second Fiscal Quarter of Fiscal Year 1999 4.00 to 1.0
Third Fiscal Quarter of Fiscal Year 1999 3.50 to 1.0
Fourth Fiscal Quarter of Fiscal Year 1999 3.10 to 1.0
First Fiscal Quarter of Fiscal Year 2000 3.00 to 1.0
Second Fiscal Quarter of Fiscal Year 2000 2.80 to 1.0
Third Fiscal Quarter of Fiscal Year 2000 2.70 to 1.0
Fourth Fiscal Quarter of Fiscal Year 2000 2.60 to 1.0
First Fiscal Quarter of Fiscal Year 2001 and each Fiscal 2.50 to 1.0
Quarter thereafter
</TABLE>
provided, however, that in the event a Permitted Acquisition shall have been
-------- -------
consummated during any above-referenced two, three or four fiscal quarter
periods, the Leverage Ratio shall be calculated including, on an historical, pro
---
forma consolidated basis giving effect to the subject Permitted Acquisition for
- -----
such fiscal quarter period.
-6-
<PAGE>
SECTION 2. Consents. The Lenders party hereto, constituting the
--------
Requisite Lenders, hereby (i) agree that, in determining whether the Company is
in compliance with clause (c) of the definition of Permitted Acquisition in
connection with the GTI Acquisition, the average Revolving Credit Availability
for the 60 days prior to the consummation of the GTI Acquisition will be
determined as if the Revolving Credit Commitments were $185,000,000 for the
entire period in question, and (ii) waive compliance with (x) any requirement in
the definition of Permitted Acquisition that the GTI Merger Subsidiary be the
surviving corporation in its merger with the Target in order for the GTI
Acquisition to constitute a Permitted Acquisition and (y) clause (e) of the
definition of Permitted Acquisition in respect of the GTI Acquisition (it being
understood and agreed that, with respect to the GTI Acquisition, the Borrowers
shall otherwise comply with all other requirements for a Permitted Acquisition
on or prior to the consummation of the GTI Acquisition).
SECTION 3. Conditions Precedent to the Effectiveness of this
-------------------------------------------------
Amendment.
- ---------
(a) This Amendment shall become effective as of the date hereof on
the date (the "Amendment Effective Date") when the following conditions
precedent have been satisfied:
(i) Certain Documents. The Administrative Agent shall have
-----------------
received on or before the Amendment Effective Date all of the following,
all of which shall be in form and substance satisfactory to the
Administrative Agent, in sufficient originally executed copies for each of
the Lenders:
(A) this Amendment executed by the Borrowers and Lenders
constituting the Requisite Lenders;
(B) an Acknowledgment substantially in the form of Exhibit A
attached hereto executed by each Subsidiary Guarantor;
(C) an execution copy of the merger agreement for the GTI
Acquisition (the "GTI Merger Agreement");
(D) such additional documentation as the Agents or the
Requisite Lenders may reasonably require.
(ii) Representations and Warranties. Each of the
------------------------------
representations and warranties made by the Borrowers or the Subsidiary
Guarantors in or pursuant to the Credit Agreement, as amended by this
Amendment, and the other Loan Documents to which the Borrowers or any of
the Guarantors is a party or by which the Borrowers or any of the
Subsidiary Guarantors is bound, shall be true and correct in all material
respects on and as of the Amendment Effective Date (other than
representations and warranties in any such Loan Document which expressly
speak as of a different date).
-7-
<PAGE>
(iii) Corporate and Other Proceedings. All corporate and other
-------------------------------
proceedings, and all documents, instruments and other legal matters in
connection with the transactions contemplated by this Amendment shall be
satisfactory in all respects in form and substance to the Administrative
Agent and the Revolving Credit Lenders.
(iv) No Events of Default. No Event of Default or Default shall
--------------------
have occurred and be continuing on the Amendment Effective Date.
(v) Fees Paid. On the Amendment Effective Date the Borrowers
---------
shall have paid (i) to each Lender that has executed this Amendment prior
to 5 p.m. (New York time) on October 26, 1998, an amendment fee equal to
fifteen basis points (0.15%) of such Lender's outstanding Term Loans and
Revolving Credit Commitments; provided, however, in the event the Requisite
-------- -------
Lenders have not executed this Amendment by 5 p.m. (New York time) on
October 26, 1998, then the Borrowers shall have paid each additional Lender
that has executed this Amendment after 5 p.m. (New York time) on October
26, 1998 but prior to 5 p.m. (New York time) on October 28, 1998 an
amendment fee equal to ten basis points (0.10%) of such Lender's
outstanding Term Loans and Revolving Credit Commitments, and (ii) to the
Administrative Agent the fees set forth in that certain fee letter of even
date herewith.
(b) Notwithstanding anything herein to the contrary, this Amendment
shall cease to be effective (and the Revolving Loans shall not be permitted to
be used for the purpose of funding the purchase of Shares in the Tender Offer)
if any of the following conditions shall not have been satisfied on or prior to
the date of the consummation of the purchase of Shares in the Tender Offer:
(i) the Revolving Credit Availability on the date of such
purchase (after giving effect to the purchase of Shares accepted for
payment in the Tender Offer and the payment of transaction costs related
thereto paid on or prior to such date), shall not be less than $25,000,000
plus an amount equal to the sum of (A) $8.25 multiplied by the number of
----
issued and outstanding Shares that were not purchased in the Tender Offer
and (B) transaction costs related to the GTI Acquisition that were not paid
on or prior to the funding of the Tender Offer (such sum being the "GTI
Merger Amount");
(ii) (A) the consideration paid to the shareholders of the Target
(after giving effect to the purchase of the Shares in the Tender Offer)
shall not exceed an amount equal to the lesser of (I) $69,500,000 and (II)
$8.25 multiplied by the number of issued and outstanding Shares that were
accepted for payment and purchased in the Tender Offer and (B) the
transaction costs incurred in connection with the GTI Acquisition shall not
exceed $2,000,000;
(iii) the Target will have at least $15,000,000 of cash and
marketable securities on its balance sheet as of the date of such purchase;
-8-
<PAGE>
(iv) the number of Shares accepted for payment in the Tender
Offer by the Company shall be equal to no less than the minimum number of
shares, determined on a fully diluted basis, necessary to approve the
consummation of the GTI Merger in accordance with the provisions of any
applicable corporate statute, anti-takeover statute or provision in the
Target's certificate of incorporation, by-laws, etc.;
(v) the Board of Directors of the Target shall have published
its recommendation that the shareholders of the Target tender their Shares
pursuant to the Tender Offer, and such recommendation shall not have been
withdrawn or adversely modified;
(vi) all documentation and other requirements set forth in the
definition of "Permitted Acquisition" (to the extent not waived in this
Amendment) shall have been satisfied with respect to the purchase of the
Shares in the Tender Offer; and
(vii) no Event of Default or Default shall have occurred and be
continuing on the date of the purchase of the Shares in the Tender Offer or
would result from the consummation of such purchase.
(c) The Company agrees that the following conditions shall have
been met on or prior to the date of the consummation of the GTI Merger and that
the failure to meet any of the following conditions shall constitute an Event of
Default:
(i) (A) the consideration paid to the shareholders of the Target
(after giving effect to the purchase of the Shares in the Tender Offer and
the GTI Merger) shall not exceed $69,500,000 and (B) the transaction costs
incurred in connection with the GTI Acquisition shall not exceed
$2,000,000;
(ii) at least $15,000,000 of Target's cash will be used to pay a
portion of the purchase price for the GTI Acquisition (or to repay
Revolving Loans used to purchase Shares in the Tender Offer);
(iii) all documentation and other requirements set forth in the
definition of "Permitted Acquisition" (to the extent not waived in this
Amendment) shall have been satisfied with respect to the GTI Merger;
(iv) all conditions precedent to the GTI Merger contained in the
merger agreement for the GTI Acquisition shall have been satisfied (or
waived with the consent of the Requisite Lenders);
(v) the GTI Merger shall have been consummated no later than
February 15, 1999; and
(vi) no Event of Default or Default shall have occurred and be
continuing on the date of the consummation of the GTI Merger or would
result from the consummation of the GTI Merger.
-9-
<PAGE>
SECTION 4. Covenants. The Company agrees that it will not amend,
---------
supplement or otherwise modify the GTI Merger Agreement, except for amendments,
waivers or modifications of such terms that do not change the substance of such
agreement in any material respect and do not, in the aggregate, materially and
adversely affect the interests of the Agents and the Lenders in the Loans, the
Loan Documents or the Collateral. The Borrowers agree that during the period
beginning on the date of the funding of the Tender Offer and through the
consummation of the GTI Merger, there shall be in effect an Availability Reserve
in an amount equal to the GTI Merger Amount (which reserve shall be abated to
the extent of any transaction costs related to the GTI Acquisition paid during
such period, the aggregate amount of which shall not exceed $2,000,000).
SECTION 5. Representations and Warranties. Each Borrower hereby
------------------------------
represents and warrants to the Lenders that (a) as of the date hereof no Event
of Default or Default under the Credit Agreement shall have occurred and be
continuing and (b) all of the representations and warranties of such Borrower
contained in Section 6.01 of the Credit Agreement and in any other Loan Document
continue to be true and correct as of the date of execution hereof in all
material respects, as though made on and as of such date (other than
representations and warranties in any such Loan Document which expressly speak
as of a different date). In addition, the Company hereby represents, warrants
and covenants to the Lenders that, after giving effect to this Amendment,
consummation of the GTI Acquisition will constitute a Permitted Acquisition.
SECTION 6. Reference to and Effect on the Loan Documents.
---------------------------------------------
(a) Upon the effectiveness of this Amendment, on and after the date
hereof, each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof" or words of like import, and each reference in the other Loan Documents
to the Credit Agreement, shall mean and be a reference to the Credit Agreement
as amended hereby.
(b) Except as specifically amended above, all of the terms of the
Credit Agreement and all other Loan Documents shall remain unchanged and in full
force and effect.
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of any Lender, any Issuing Bank or the Administrative Agent
under the Credit Agreement or any of the Loan Documents, nor constitute a waiver
of any provision of the Credit Agreement or any of the Loan Documents.
SECTION 7. Fees, Costs and Expenses.
------------------------
(a) The Borrowers agree to pay on demand in accordance with the terms
of Section 13.02 of the Credit Agreement all costs and expenses of the
Administrative Agent in connection with the preparation, reproduction, execution
and delivery of this Amendment and all other Loan Documents entered into in
connection herewith, including the reasonable fees and out-of-pocket expenses of
counsel for the Administrative Agent with respect thereto.
-10-
<PAGE>
(b) On the Amendment Effective Date the Borrowers agree to pay
the fees set forth in Section 3(a)(v) of this Amendment.
SECTION 8. Execution in Counterparts. This Amendment may be executed
-------------------------
and delivered in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original and all of which taken together shall constitute one and the
same original agreement.
SECTION 9. Affirmation of Borrower Guaranties. Each of the Borrowers
----------------------------------
hereby consents to the terms of this Amendment in its capacity as a guarantor
under the Borrower Guaranty to which it is a party and agrees that the terms of
this Amendment shall not affect in any way its obligations and liabilities under
its Borrower Guaranty or any other Loan Document to which it is a party, all of
which obligations and liabilities shall remain in full force and effect and each
of which is hereby reaffirmed.
SECTION 10. Governing Law. This Amendment shall be interpreted, and
-------------
the rights and liabilities of the parties determined, in accordance with the
internal law of the State of New York.
-11-
<PAGE>
IN WITNESS WHEREOF, this Amendment has been duly executed on the date set forth
above.
INTERNATIONAL TECHNOLOGY
CORPORATION
By____________________________
Name:
Title:
IT CORPORATION
By____________________________
Name:
Title:
OHM CORPORATION
By____________________________
Name:
Title:
OHM REMEDIATION SERVICES CORP.
By____________________________
Name:
Title:
BENECO ENTERPRISES, INC.
By____________________________
Name:
Title:
<PAGE>
CITICORP USA, INC.,
By____________________________
Name:
Title:
BANKBOSTON, N.A.
By:____________________________
Name:
Title:
ROYAL BANK OF CANADA
By:____________________________
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By:____________________________
Name:
Title:
BHF BANK AKTIENGESELLSCHAFT
By:____________________________
Name:
Title:
<PAGE>
UNION BANK OF CALIFORNIA
By:____________________________
Name:
Title:
SOCIETE GENERALE
By:____________________________
Name:
Title:
SANWA BUSINESS CREDIT CORPORATION
By:____________________________
Name:
Title:
COMERICA BANK
By:____________________________
Name:
Title:
FLEET BANK, N.A.
By:____________________________
Name:
Title:
<PAGE>
THE INDUSTRIAL BANK OF JAPAN,
LIMITED
By:____________________________
Name:
Title:
KEYBANK NATIONAL ASSOCIATION
By:____________________________
Name:
Title:
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By:____________________________
Name:
Title:
THE BANK OF NOVA SCOTIA
By:____________________________
Name:
Title:
<PAGE>
BANCO ESPIRITO SANTO E COMERCIAL DE
LISBOA, NASSAU BRANCH
By:____________________________
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
By:____________________________
Name:
Title:
BANK POLSKA KASA OPIEKI S.A., PEKAO
S.A. GROUP, NEW YORK BRANCH
By:____________________________
Name:
Title:
<PAGE>
EXHIBIT A
ACKNOWLEDGMENT
--------------
Reference is hereby made to the Subsidiary Guaranties (as defined in
the Credit Agreement) to which each of the undersigned is a party. Each of the
undersigned hereby consents to the terms of the foregoing Second Amendment to
Credit Agreement and agrees that the terms thereof shall not affect in any way
its obligations and liabilities under the undersigned's Subsidiary Guaranty or
any other Loan Document, all of which obligations and liabilities shall remain
in full force and effect and each of which is hereby reaffirmed.
GRADIENT CORPORATION
By____________________________
Title:
IT-TULSA HOLDINGS, INC.
By____________________________
Title:
IT E&C OPERATIONS, INC.
By____________________________
Title:
PACIFIC ENVIRONMENTAL GROUP, INC.
By____________________________
Title:
UNIVERSAL PROFESSIONAL INSURANCE
COMPANY
By____________________________
Title:
<PAGE>
EXHIBIT (c)(1)
AGREEMENT AND PLAN OF MERGER
Among
FLUOR DANIEL GTI, INC.,
FLUOR DANIEL, INC.,
INTERNATIONAL TECHNOLOGY CORPORATION
and
TIGER ACQUISITION CORPORATION
Dated as of October 27, 1998
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I THE OFFER........................................................ 1
1.1. The Offer......................................................... 1
---------
1.2. Company Actions................................................... 3
---------------
1.3. Boards of Directors and Committees; Section 14(f)................. 5
-------------------------------------------------
ARTICLE II THE MERGER; CLOSING; EFFECTIVE TIME............................. 6
2.1. The Merger........................................................ 6
----------
2.2. Closing........................................................... 6
-------
2.3. Effective Time.................................................... 7
--------------
2.4. Options........................................................... 7
-------
2.5. Company Employee Stock Purchase Plan.............................. 7
------------------------------------
ARTICLE III CERTIFICATE OF INCORPORATION AND BY-LAWS
OF THE SURVIVING CORPORATION; OFFICERS AND
DIRECTORS OF THE SURVIVING CORPORATION......................... 7
3.1. Certificate of Incorporation...................................... 7
----------------------------
3.2. Bylaws............................................................ 8
------
3.3. Directors......................................................... 8
---------
3.4. Officers.......................................................... 8
--------
ARTICLE IV EFFECT OF THE MERGER ON CAPITAL STOCK;
EXCHANGE OF CERTIFICATES FOR MERGER
CONSIDERATION................................................... 8
4.1. Effect on Capital Stock........................................... 8
-----------------------
(a) Merger Consideration.......................................... 8
--------------------
(b) Cancellation of Excluded Shares............................... 8
-------------------------------
(c) Merger Sub.................................................... 8
----------
ii
<PAGE>
4.2. Exchange of Certificates for Payment.............................. 9
------------------------------------
(a) Exchange Agent................................................ 9
--------------
(b) Exchange Procedures........................................... 9
-------------------
(c) Transfers..................................................... 9
---------
(d) Termination of Merger Fund.................................... 9
--------------------------
(e) Return of Consideration....................................... 10
-----------------------
(f) Lost, Stolen or Destroyed Certificates........................ 10
--------------------------------------
4.3. Dissenters' Shares................................................ 10
------------------
ARTICLE V REPRESENTATIONS AND WARRANTIES................................... 10
5.1. Representations and Warranties of the Company..................... 10
---------------------------------------------
(a) Organization, Good Standing, Corporate Power and
------------------------------------------------
Qualification; Subsidiaries and Other Interests............ 10
-----------------------------------------------
(b) Capital Structure............................................. 11
-----------------
(c) Corporate Authority; Approval and Fairness.................... 12
------------------------------------------
(d) Governmental Filings; No Violations........................... 12
-----------------------------------
(e) Company Reports; Financial Statements......................... 13
-------------------------------------
(f) Absence of Certain Changes.................................... 14
--------------------------
(g) Litigation and Liabilities.................................... 15
--------------------------
(h) Employee Benefits............................................. 15
-----------------
(i) Compliance with Laws.......................................... 17
--------------------
(j) Takeover Statutes............................................. 17
-----------------
(k) Environmental Matters......................................... 18
---------------------
(l) Intellectual Property......................................... 19
---------------------
(m) Taxes......................................................... 19
-----
(n) Labor Matters................................................. 20
-------------
iii
<PAGE>
(o) Insurance..................................................... 20
---------
(p) Brokers and Finders........................................... 20
-------------------
(q) Certain Business Practices.................................... 21
--------------------------
(r) Customers..................................................... 21
---------
(s) Government Contracts.......................................... 21
--------------------
(t) Cash Availability............................................. 22
-----------------
5.2. Representations and Warranties of Parent and Merger Sub........... 22
-------------------------------------------------------
(a) Organization, Good Standing and Qualification................. 22
---------------------------------------------
(b) Ownership of Merger Sub....................................... 23
-----------------------
(c) Corporate Authority........................................... 23
-------------------
(d) Governmental Filings; No Violations........................... 23
-----------------------------------
(e) Brokers and Finders........................................... 24
-------------------
ARTICLE VI COVENANTS....................................................... 24
6.1. Interim Operations................................................ 24
------------------
6.2. Third Party Acquisitions.......................................... 26
------------------------
6.3. Filings; Other Actions; Notification.............................. 28
------------------------------------
6.4. Information Supplied.............................................. 29
--------------------
6.5. Stockholders Meeting.............................................. 30
--------------------
6.6. Access............................................................ 30
------
6.7. Publicity......................................................... 31
---------
6.8. Status of Company Employees; Company Stock Options;
---------------------------------------------------
Employee Benefits.............................................. 31
------------------
6.9. Expenses.......................................................... 32
--------
6.10. Indemnification; Directors' and Officers' Insurance.............. 32
---------------------------------------------------
6.11. Other Actions by the Company and Parent.......................... 34
---------------------------------------
6.12. Tender of Shares by FD; Cancellation of FD Stock Option.......... 35
-------------------------------------------------------
iv
<PAGE>
6.13. Parent Stock Option; Exercise; Adjustments....................... 35
------------------------------------------
6.14. Use of Company Cash.............................................. 36
-------------------
ARTICLE VII CONDITIONS..................................................... 36
7.1. Conditions to Each Party's Obligation to Effect Merger............ 36
------------------------------------------------------
(a) Stockholder Approval.......................................... 36
--------------------
(b) Regulatory Consents........................................... 36
-------------------
(c) Litigation.................................................... 37
----------
7.2. Conditions to Obligations of Parent and Merger Sub................ 37
--------------------------------------------------
(a) Representations and Warranties................................ 37
------------------------------
(b) Performance of Obligations of the Company and FD.............. 37
------------------------------------------------
7.3. Conditions to Obligations of the Company.......................... 37
----------------------------------------
(a) Representations and Warranties................................ 37
------------------------------
(b) Performance of Obligations of Parent and Merger Sub........... 38
---------------------------------------------------
ARTICLE VIII TERMINATION................................................... 38
8.1. Termination by Mutual Consent..................................... 38
-----------------------------
8.2. Termination by Either Parent or the Company....................... 38
-------------------------------------------
8.3. Termination by the Company........................................ 38
--------------------------
8.4. Termination by Parent and Merger Sub.............................. 39
------------------------------------
8.5. Effect of Termination and Abandonment............................. 39
-------------------------------------
8.6. Procedure for Termination......................................... 40
-------------------------
ARTICLE IX MISCELLANEOUS................................................... 40
9.1. Survival.......................................................... 40
--------
9.2. Certain Definitions............................................... 41
-------------------
9.3. No Personal Liability............................................. 42
---------------------
9.4. Modification or Amendment......................................... 42
-------------------------
v
<PAGE>
9.5. Waiver of Conditions.............................................. 42
--------------------
9.6. Counterparts...................................................... 43
------------
9.7. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL..................... 43
---------------------------------------------
9.8. Notices........................................................... 44
-------
9.9. Entire Agreement.................................................. 45
----------------
9.10. No Third Party Beneficiaries..................................... 45
----------------------------
9.11. Obligations of the Company and Surviving Corporation............. 45
----------------------------------------------------
9.12. Severability..................................................... 45
------------
9.13. Interpretation................................................... 46
--------------
9.14. Assignment....................................................... 46
----------
vi
<PAGE>
SCHEDULES
Schedule Description
- -------- -----------
Schedule 5.1(a) Company Subsidiaries and Other Interests
Schedule 5.1(d) Consents
Schedule 5.1(f) Certain Changes
Schedule 5.1(g) Litigation and Liabilities
Schedule 5.1(h)(i) Compensation and Benefit Plans
Schedule 5.1(h) Outstanding Company Options and Other Benefit Plan Matters
Schedule 5.1(h)(viii) Amendments to be Made After the Closing Date
Schedule 5.1(k) Environmental Matters
Schedule 5.1(m) Certain Tax Matters
Schedule 5.1(n) Labor Matters
Schedule 5.1(s) Government Contracts
Schedule 6.10 Indemnity Contracts
vii
<PAGE>
AGREEMENT AND PLAN OF MERGER
----------------------------
AGREEMENT AND PLAN OF MERGER (hereinafter called this "Agreement"), dated
---------
as of October 27, 1998, among FLUOR DANIEL GTI, INC., a Delaware corporation
(the "Company"), FLUOR DANIEL, INC., a California corporation ("FD"),
------- --
INTERNATIONAL TECHNOLOGY CORPORATION, a Delaware corporation ("Parent"), and
------
TIGER ACQUISITION CORPORATION, a Delaware corporation and a direct, wholly-owned
subsidiary of Parent ("Merger Sub"; the Company and Merger Sub sometimes being
----------
hereinafter together referred to as the "Constituent Corporations").
------------------------
RECITALS
WHEREAS, the respective Boards of Directors of each of Parent, Merger Sub
and the Company have approved the merger of Merger Sub with and into the Company
(the "Merger") and approved the Merger upon the terms and subject to the
------
conditions set forth in this Agreement; and
WHEREAS, in furtherance thereof, pursuant to this Agreement, within five
(5) Business Days after the public announcement of the execution of this
Agreement by the parties, Parent has agreed to commence a tender offer (the
"Offer") to acquire all of the outstanding shares (the "Shares") of common
----- ------
stock, par value $.001 per share, of the Company (the "Common Stock"), at a
------------
price of $8.25 per Share, net to the seller in cash (such amount, or any greater
amount per share paid pursuant to the Offer, being hereinafter referred to as
the "Offer Price"), in accordance with the terms and subject to the conditions
-----------
provided herein;
WHEREAS, Parent, Merger Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger; and
WHEREAS, FD owns 4,400,000 Shares (the "FD Shares") representing
approximately 52.3% of the issued and outstanding shares of Common Stock and
pursuant to this Agreement and agrees to tender in the Offer all of the Shares
owned by it.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
ARTICLE I
THE OFFER
1.1. The Offer.
---------
(a) Provided that this Agreement shall not have been terminated in
accordance with Article VIII and subject to the conditions set forth in Annex A
(as defined below), as promptly as practicable, but in no event later than five
(5) Business Days after the public announcement of the execution of this
Agreement by the parties, Parent shall commence (within
<PAGE>
the meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), the Offer for any and all of the Shares, at the Offer
------------
Price. The parties agree such public announcement shall occur promptly after the
execution and delivery of this Agreement. The obligation of Parent to accept for
payment and to pay for any Shares tendered shall be subject only to (i) the
condition that the FD Shares and at least a majority of issued and outstanding
Shares not owned by FD be validly tendered and not withdrawn (the "Minimum
-------
Condition"), and (ii) the other conditions set forth in Annex A hereto ("Annex
- --------- -----
A"). Parent expressly reserves the right to increase the Offer Price or to make
- -
any other changes in the terms and conditions of the Offer; provided, however,
that, unless previously approved by the Special Committee (the "Special
-------
Committee") of the Board of Directors (the "Company's Board") and the Company's
- --------- ---------------
Board in writing, no change may be made which (i) decreases the Offer Price,
(ii) changes the form of consideration to be paid in the Offer, (iii) reduces
the maximum number of Shares to be purchased in the Offer, (iv) imposes
conditions to the Offer in addition to those set forth in Annex A, (v) amends
the conditions set forth in Annex A to broaden the scope of such conditions,
(vi) amends any other term of the Offer in a manner adverse to the holders of
the Shares, (vii) extends the Offer except as provided in Section 1.1(b), or
(viii) amends the Minimum Condition. It is agreed that the conditions set forth
in Annex A other than the Minimum Condition are for the sole benefit of Parent
and may be waived by Parent, in whole or in part at any time and from time to
time in its sole discretion, other than the Minimum Condition, as to which prior
written approval of the Special Committee and the Company's Board is required.
The failure by Parent 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. The
Company agrees that no Shares held by the Company or any of its Subsidiaries (as
defined in Section 9.2) will be tendered in the Offer.
(b) Subject to the terms and conditions thereof, the Offer shall
expire at midnight, New York City time, on the date that is twenty (20) Business
Days after the date the Offer is commenced (the initial "Expiration Date", and
---------------
any expiration time and date established pursuant to an authorized extension of
the Offer as so extended, also an "Expiration Date"); provided, however, that
---------------
without the consent of the Special Committee and the Company's Board, Parent may
(i) from time to time extend the Offer (each such individual extension not to
exceed 10 Business Days after the previously scheduled Expiration Date), if at
the scheduled Expiration Date of the Offer any of the conditions to the Offer
shall not have been satisfied or waived, until such time as such conditions are
satisfied or waived; (ii) extend the Offer for any period required by any rule,
regulation, interpretation or position of the Securities and Exchange Commission
(the "SEC") or the staff thereof applicable to the Offer; or (iii) extend the
---
Offer for any reason on up to two occasions in each case for a period of not
more than five (5) Business Days beyond the latest Expiration Date that would
otherwise be permitted under clause (i) or (ii) of this sentence if on such
Expiration Date there shall have been tendered more than the number of Shares
sufficient to satisfy the Minimum Condition but less than 90% of the Shares;
provided, the Purchaser agrees to permanently waive the conditions set forth in
paragraphs (b) and (e) of Annex A. Parent agrees that if all of the conditions
to the Offer set forth on Annex A are not satisfied on any scheduled Expiration
Date, then if all such conditions are reasonably capable of being satisfied
prior to December 31, 1998, Parent shall extend the Offer from time to time
(each
2
<PAGE>
such individual extension not to exceed 10 Business Days after the previously
scheduled Expiration Date) until such conditions are satisfied or waived;
provided, that Parent shall not be required to extend the Offer beyond December
31, 1998. Subject to the terms and conditions of the Offer and this Agreement,
Parent shall accept for payment, and pay for, all Shares validly tendered and
not withdrawn pursuant to the Offer that Parent becomes obligated to accept for
payment and pay for pursuant to the Offer, as promptly as practicable after the
expiration of the Offer.
(c) As soon as practicable on the date the Offer is commenced, Parent
shall file with the SEC a Tender Offer Statement on Schedule 14D-1 (together
with all amendments and supplements thereto, and including all exhibits thereto,
the "Schedule 14D-1") with respect to the Offer. The Schedule 14D-1 shall
--------------
contain as an exhibit or incorporate by reference the Offer to Purchase (or
portions thereof) and forms of the related letter of transmittal and summary
advertisement. Parent and Merger Sub agree that the Schedule 14D-1, the Offer
to Purchase and all amendments or supplements thereto (which together constitute
the "Offer Documents") shall comply in all material respects with the Exchange
---------------
Act and the rules and regulations thereunder and other applicable Laws (as
defined in Section 5.1(i)). Parent and Merger Sub further agree that the Offer
Documents, on the date first published, sent or given to the Company's
stockholders, shall not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation or warranty is made by
Parent or Merger Sub with respect to information supplied by the Company or any
of its stockholders in writing specifically for inclusion or incorporation by
reference in the Offer Documents. The Company agrees that the written
information provided by the Company for inclusion or incorporation by reference
in the Offer Documents shall not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. Each of Parent, Merger Sub and the Company
agrees promptly to correct any information provided by it for use in the Offer
Documents if and to the extent that such information shall have become false or
misleading in any material respect, and Parent and Merger Sub further agree to
take all steps necessary to cause the Schedule 14D-1 as so corrected to be filed
with the SEC and the other Offer Documents as so corrected to be disseminated to
the Company's stockholders, in each case as and to the extent required by
applicable laws. The Company and counsel for the Special Committee shall be
given reasonable opportunity to review and comment on the Offer Documents prior
to the filing thereof with the SEC. Parent agrees to provide the Company and
counsel for the Special Committee in writing with any comments Parent or its
counsel may receive from the SEC or its staff with respect to the Offer
Documents promptly after receipt of such comments.
1.2. Company Actions.
---------------
(a) The Company hereby approves of and consents to the Offer and
represents that the Company's Board, at a meeting duly called and held, has,
subject to the terms and conditions set forth herein, (i) determined that this
Agreement and the transactions contemplated hereby, including the Offer and the
Merger, taken together, are fair to and in the best interests of the Company and
its stockholders (other than Parent and its Affiliates), (ii) approved this
3
<PAGE>
Agreement and the transactions contemplated hereby, including the Offer and the
Merger, in all respects and such approval constitutes approval of the Offer,
this Agreement and the Merger for purposes of Section 203 of the Delaware
General Corporation Law (the "DGCL"), and (iii) resolved to recommend that the
----
stockholders of the Company accept the Offer, tender their Shares thereunder to
Parent and approve and adopt this Agreement and the Merger; provided, however,
that such recommendation and approval may be withdrawn, modified or amended to
the extent that the Company's Board determines in good faith, after taking into
consideration the advice of its outside legal counsel, that failure to take such
action is likely to result in a breach of the fiduciary obligations of the
Company's Board under applicable law. The Company consents to the inclusion of
such recommendation and approval in the Offer Documents. The Company also
represents that the Company's Board has reviewed the opinion of BT Alex. Brown,
Incorporated, financial advisor to the Company's Board (the "Financial
---------
Advisor"), that, as of the date of this Agreement, the consideration to be
- -------
received pursuant to this Agreement is fair to the stockholders of the Company
(other than Parent, FD and their respective Affiliates) from a financial point
of view (the "Fairness Opinion"). The Company has been authorized by the
----------------
Financial Advisor to permit, subject to the prior review and consent by the
Financial Advisor (such consent not to be unreasonably withheld), the inclusion
of the Fairness Opinion (or a reference thereto) in the Offer Documents, the
Schedule 14D-9 (as defined below) and the Proxy Statement (as defined below).
(b) The Company shall file with the SEC, concurrently with or as soon
as practicable following the filing of the Schedule 14D-1, a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto, and including all exhibits thereto, the
"Schedule 14D-9") containing the recommendation described in Section 1.2(a) and
- ---------------
shall mail the Schedule 14D-9 to the stockholders of the Company to the extent
required by Rule 14d-9 promulgated under the Exchange Act and any other
applicable federal securities laws; provided, however, that if the Company's
Board determines in good faith, after taking into consideration the advice of
its outside legal counsel, that the amendment or withdrawal of such
recommendation is likely to be required in order for its members to comply with
their fiduciary duties under applicable law, then any such amendment or
withdrawal, and any related amendment of the Schedule 14D-9, shall not
constitute a breach of this Agreement. The Company agrees that the Schedule
14D-9 shall comply in all material respects with the Exchange Act and the rules
and regulations thereunder and other applicable laws. The Company further
agrees that Schedule 14D-9, on the date first published, sent or given to the
Company's stockholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that no representation or
warranty is made by the Company with respect to information supplied by the
Parent or Merger Sub in writing specifically for inclusion or incorporation by
reference in Schedule 14D-9. Each of the Company, Parent and Merger Sub agrees
promptly to correct any written information provided by it for use in the
Schedule 14D-9 or the Offer Documents if and to the extent that such information
shall have become false or misleading in any material respect, and the Company
further agrees to take all steps necessary to cause the Schedule 14D-9 as so
corrected to be filed with the SEC and be disseminated to the Company's
stockholders, in each case as and to the extent required by applicable federal
securities laws. Parent and its counsel
4
<PAGE>
shall be given reasonable opportunity to review and comment on the Schedule 14D-
9 prior to the filing thereof with the SEC.
(c) In connection with the Offer, the Company shall cause its transfer
agent to promptly furnish Parent with such information, including updated lists
of the stockholders of the Company, mailing labels and updated lists of security
positions, and such assistance as Parent or its agents may reasonably request in
communicating the Offer to the record and beneficial holders of Shares. Subject
to the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Merger, Parent and Sub and their agents shall hold in
confidence the information contained in any such labels, listings and files,
will use such information only in connection with the Offer and the Merger and,
if this Agreement shall be terminated, will deliver, and will use their
reasonable efforts to cause their agents to deliver, to the Company all copies
and any extracts or summaries from such information then in their possession or
control.
(d) Solely in connection with the tender and purchase of Shares
pursuant to the Offer and the consummation of the Merger, the Company hereby
waives any and all rights of first refusal it may have with respect to Shares
owned by, or issuable to, any Person, other than rights to repurchase unvested
shares, if any, that may be held by Persons following exercise of employee stock
options.
1.3. Boards of Directors and Committees; Section 14(f).
-------------------------------------------------
(a) Immediately following the delivery to the Depositary of Parent's
notice of acceptance of Shares pursuant to the Offer (the "Notice of
---------
Acceptance"), if the Minimum Condition has been met, Parent shall be entitled to
- ----------
designate four of the six authorized directors on the Company's Board (the
"Parent Directors"). The Parent Directors shall be Anthony J. DeLuca, Philip O.
----------------
Strawbridge, James G. Kirk and James R. Mahoney. Immediately following delivery
to the Depositary of the Notice of Acceptance, the resignations as directors of
the Company of Walter C. Barber, David L. Myers and Ronald G. Peterson,
delivered to Parent concurrently with the execution and delivery of this
Agreement, shall be deemed effective and Allan S. Bufferd and Ernie Green, as
the remaining directors of the Company (the "Continuing Directors") shall
--------------------
execute and deliver a written consent or shall otherwise take effective action
electing the Parent Directors to the Company's Board. The Continuing Directors
shall remain members of such Board until the Effective Time (as defined in
Section 2.3), and, in lieu of Continuing Directors, if the same shall not serve,
the Company shall use reasonable efforts to ensure that the Company's Board
shall consist of at least two members who are neither officers, stockholders,
designees nor Affiliates of Parent or FD or their respective Affiliates (the
"Special Directors"). In the event a Continuing Director resigns from the
-----------------
Company's Board, Parent, Merger Sub and the Company shall permit the remaining
Continuing Director or Directors to appoint the resigning director's successor
who shall be deemed to be a Continuing Director. Immediately following the
election of the Parent Directors, the Company will use reasonable efforts to
cause persons designated by Parent to constitute the same percentage as the
Parent Directors represent on the Company's Board of (i) each committee of such
Board (other than any committee of such Board established to take action under
this Agreement), (ii) each board of directors of each Subsidiary of the Company
and (iii) each committee of each such board.
5
<PAGE>
(b) The Company's obligation to appoint designees to the Company's
Board shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder. The Company shall promptly take all action required
pursuant to such Section and Rule in order to fulfill its obligations under this
Section 1.3 and shall include in the Schedule 14D-9 such information with
respect to the Company and its officers and directors as is required under such
Section and Rule in order to fulfill its obligations under this Section 1.3.
Parent will supply to the Company in writing and be solely responsible for any
information with respect to itself and its nominees, officers, directors and
Affiliates required by such Section and Rule.
(c) Following the election or appointment of Parent's designees
pursuant to this Section 1.3 and prior to the Effective Time, if there shall be
any Continuing Directors and/or Special Directors, any amendment of this
Agreement, any termination of this Agreement by the Company, any extension by
the Company of the time for the performance of any of the obligations or other
acts of Parent or any waiver of any of the Company's rights hereunder, will
require the concurrence of a majority of such Continuing Directors and Special
Directors.
ARTICLE II
THE MERGER; CLOSING; EFFECTIVE TIME
2.1. The Merger. Upon the terms and subject to the conditions set forth
----------
in this Agreement, at the Effective Time (as defined in Section 2.3) Merger Sub
shall be merged with and into the Company and the separate corporate existence
of Merger Sub shall thereupon cease. The Company shall be the surviving
corporation in the Merger (sometimes hereinafter referred to as the "Surviving
---------
Corporation") and shall continue to be governed by the laws of the State of
- -----------
Delaware, and the separate corporate existence of the Company with all its
rights, privileges, immunities, powers and franchises shall continue unaffected
by the Merger, except as set forth in Article III. At the election of Parent,
to the extent that such action would not cause a failure of a condition to the
Offer or the Merger, the Merger may be structured so that the Company shall be
merged with and into Merger Sub with the result that Merger Sub shall become the
"Surviving Corporation." The Merger shall have the effects specified in the
DGCL. Parent, as the sole stockholder of Merger Sub, hereby approves the Merger
and this Agreement.
2.2. Closing. The closing of the Merger (the "Closing") shall take place
------- -------
(i) at the offices of Gibson, Dunn & Crutcher LLP, 333 South Grand Avenue, Los
Angeles, California at 9:00 a.m., Pacific time, on the first Business Day after
the day on which the last to be fulfilled or waived of the conditions set forth
in Article VII (other than those conditions that by their nature are to be
satisfied at the Closing, but subject to the fulfillment or waiver of those
conditions) shall be satisfied or waived in accordance with this Agreement or
(ii) at such other place and time and/or on such other date as the Company and
Parent may agree in writing (the "Closing Date").
------------
2.3. Effective Time. As soon as practicable following the Closing, the
--------------
Company and Parent will cause a Certificate of Merger (the "Delaware Certificate
--------------------
of Merger") to be executed, acknowledged and filed with the Secretary of State
- ---------
of Delaware as provided in Section 251 of the DGCL. The Merger shall become
effective at the time when the Delaware Certificate of Merger has been duly
filed with the Secretary of State of Delaware (the "Effective Time").
--------------
6
<PAGE>
2.4. Options. At the Effective Time, all Company Options (as defined in
--------
Section 5.1(b)) (whether vested or unvested) that have an exercise price that is
lower than the then Offer Price (the "In-the Money Options") will be cashed out
--------------------
by the Company by payment to each holder of such In-the-Money Options the
difference between the exercise price and the Offer Price. The Company shall
notify all holders of Company Options (other than the FD stock option described
in Schedule 5.1(h) (the "FD Option")) that have an exercise price that is equal
--------------- ---------
to or higher than the then Offer Price (the "Underwater Options"), promptly
------------------
after the Effective Time, that the Stock Option Plans (as defined in Section
5.1(b)) have been terminated and that, in connection with such termination, the
Company will pay to such holders an amount equal to the number of such
Underwater Options (whether vest or unvested) multiplied by $.10. The Company
agrees that the foregoing treatment of Company Options will be in accordance
with the terms of the Stock Option Plans or interpretations thereof by the
Company's Board.
2.5. Company Employee Stock Purchase Plan. The Company's Board shall
------------------------------------
take the following actions with respect to the Amended and Restated 1986
Employee Stock Purchase Plan (the "Stock Purchase Plan"): (1) accelerate the
-------------------
current Payment Period (as defined in the Stock Purchase Plan) to November 27,
1998 (the "Acceleration Date") and (2) pay each participant in lieu of each
-----------------
share that could have been purchased under the Stock Purchase Plan when the
Payment Period ends on the Acceleration Date, an amount (subject to any
applicable withholding tax) in cash equal to the difference between the Offer
Price and the Option Price (as defined in the Stock Purchase Plan). In
addition, all funds contributed to the Stock Purchase Plan which have not been
used to purchase shares of the Common Stock as of the Acceleration Date shall be
returned, in cash, without interest, to participants of the Stock Purchase Plan
as soon as administratively feasible after the Acceleration Date.
ARTICLE III
CERTIFICATE OF INCORPORATION AND
BY-LAWS OF THE SURVIVING CORPORATION; OFFICERS AND
DIRECTORS OF THE SURVIVING CORPORATION
3.1. Certificate of Incorporation. The certificate of incorporation of
----------------------------
the Company as in effect immediately prior to the Effective Time shall be the
certificate of incorporation of the Surviving Corporation (the "Charter"), until
-------
duly amended as provided therein or by applicable Law, except that Article
Fourth of the Charter shall be amended to read in its entirety as follows: "The
aggregate number of shares that the Corporation shall have the authority to
issue is 1,000 shares of Common Stock, par value $.01 per share."
3.2. Bylaws. The bylaws of the Company in effect at the Effective Time
------
shall be the by-laws of the Surviving Corporation (the "Bylaws"), until
------
thereafter amended as provided therein or by applicable Law, subject to the
restrictions contained in Section 6.10(e).
3.3. Directors. The directors of Merger Sub at the Effective Time shall,
---------
from and after the Effective Time, be the directors of the Surviving Corporation
until their successors have been duly elected or appointed and qualified or
until their earlier death, resignation or removal in accordance with the Charter
and Bylaws.
7
<PAGE>
3.4. Officers. The officers of the Company at the Effective Time shall,
--------
from and after the Effective Time, be the officers of the Surviving Corporation
until their successors have been duly elected or appointed and qualified or
until their earlier death, resignation or removal in accordance with the Charter
and Bylaws.
ARTICLE IV
EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF
CERTIFICATES FOR MERGER CONSIDERATION
4.1. Effect on Capital Stock. At the Effective Time, as a result of the
-----------------------
Merger and without any action on the part of the holder of any Capital Stock (as
defined in Section 9.2) of the Company:
(a) Merger Consideration. Each Share issued and outstanding
--------------------
immediately prior to the Effective Time (other than Shares owned by Parent,
Merger Sub or any other direct or indirect Subsidiary of Parent or Shares that
are owned by the Company or any direct or indirect Subsidiary of the Company
(collectively, the "Excluded Shares")) shall be converted into, and become
---------------
exchangeable for the Offer Price, without interest (the "Merger Consideration").
--------------------
At the Effective Time, all Shares shall no longer be outstanding and shall be
canceled and retired and shall cease to exist, and each certificate (a
"Certificate") formerly representing any of such Shares (other than Excluded
- ------------
Shares) shall thereinafter represent only the right to receive the Merger
Consideration.
(b) Cancellation of Excluded Shares. Each Excluded Share issued
-------------------------------
and outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, cease to be
outstanding, shall be canceled and retired without payment of any consideration
therefor and shall cease to exist.
(c) Merger Sub. At the Effective Time, each share of Common Stock,
----------
par value $.01 per share, of Merger Sub issued and outstanding immediately prior
to the Effective Time shall be converted into one share of Common Stock of the
Surviving Corporation.
4.2. Exchange of Certificates for Payment.
------------------------------------
(a) Exchange Agent. As of the Effective Time, Parent shall deposit,
--------------
or shall cause to be deposited, with an exchange agent selected by Parent (the
"Exchange Agent"), for the benefit of the holders of Shares, cash in U.S.
--------------
dollars in an amount equal to the Merger Consideration multiplied by the
aggregate outstanding Shares (other than Excluded Shares) to be paid pursuant to
Section 4.1(a) in exchange for outstanding Shares upon due surrender of the
Certificates (or affidavits of loss in lieu thereof) pursuant to the provisions
of this Article IV (such aggregate cash amount when paid to the Exchange Agent
being hereinafter referred to as the "Merger Fund").
-----------
(b) Exchange Procedures. Promptly after the Effective Time, the
-------------------
Surviving Corporation shall cause the Exchange Agent to mail to each holder of
record of Shares (other
8
<PAGE>
than holders of Excluded Shares) (i) a letter of transmittal (which shall, among
other matters, specify that delivery of the Certificates shall be effected, and
risk of loss and title to the Certificates shall pass, only upon actual receipt
of the Certificates (or affidavits of loss in lieu thereof) by the Exchange
Agent) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration due and payable to such
holder. Upon surrender of a Certificate for cancellation to the Exchange Agent
together with such letter of transmittal, duly executed, the holder of such
Certificate shall be entitled to receive in exchange therefor a check in the
amount (after giving effect to any required tax withholdings) of the Merger
Consideration due and payable in respect of such holder's Shares and the
Certificate so surrendered shall forthwith be canceled. No interest will be paid
or accrued on any amount payable upon due surrender of the Certificates. All
Merger Consideration paid upon surrender for exchange of Shares in accordance
with the terms of this Agreement shall be deemed to have been paid in full
satisfaction of all rights pertaining to such Shares. In the event of a transfer
of ownership of Shares that is not registered in the transfer records of the
Company, a check for the amount of cash to be paid upon due surrender of the
Certificate may be delivered to such a transferee if the Certificate formerly
representing such Shares is presented to the Exchange Agent, accompanied by all
documents required by the Exchange Agent to evidence and effect such transfer
and to evidence that any applicable stock transfer taxes have been paid.
(c) Transfers. After the Effective Time, there shall be no
---------
transfers on the stock transfer books of the Company of the Shares that were
outstanding immediately prior to the Effective Time.
(d) Termination of Merger Fund. Any portion of the Merger Fund
--------------------------
(including the proceeds of any investments thereof) that remains unclaimed by
the stockholders of the Company for 180 days after the Effective Time shall be
paid to Parent. Any stockholders of the Company who have not theretofore
complied with this Article IV shall thereafter look only to Parent for payment
of their Merger Consideration payable pursuant to Section 4.1 upon due surrender
of their Certificates (or affidavits of loss in lieu thereof), in each case,
without any interest thereon. Notwithstanding the foregoing, neither Parent,
the Surviving Corporation, the Exchange Agent nor any other Person shall be
liable to any former holder of Shares for any amount properly delivered to a
public official pursuant to applicable abandoned property, escheat or similar
laws.
(e) Return of Consideration. Any portion of the Merger Fund
-----------------------
representing Merger Consideration payable in respect of Dissenters' Shares (as
defined in Section 4.3) for which appraisal rights have been perfected shall be
returned to Parent, upon demand.
(f) Lost, Stolen or Destroyed Certificates. In the event any
--------------------------------------
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Certificate to be lost,
stolen or destroyed and, if required by Parent, the posting by such Person of a
bond in an amount determined by Parent as indemnity against any claim that may
be made against it with respect to such Certificate, the Exchange Agent will
issue in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration payable pursuant to Section 4.1 upon due surrender of the
Certificate representing such Shares pursuant to this Agreement.
9
<PAGE>
4.3. Dissenters' Shares. Notwithstanding Section 4.1, Shares outstanding
------------------
immediately prior to the Effective Time and held by a holder who has not voted
in favor of the Merger or consented thereto in writing and who has demanded
appraisal for such Shares in accordance with the DGCL ("Dissenters' Shares")
------------------
shall not be converted into a right to receive the Merger Consideration, unless
such holder fails to perfect or withdraws or otherwise loses such holder's right
to appraisal. If after the Effective Time such holder fails to perfect or
withdraws or loses such holder's right to appraisal, such Dissenters' Shares
shall be treated as if they had been converted as of the Effective Time into a
right to receive the Merger Consideration. The Company shall give Parent prompt
notice of any demands received by the Company for appraisal of Dissenters'
Shares, and Parent shall have the right to participate in all negotiations and
proceedings with respect to such demands. The Company shall not, except with the
prior written consent of Parent, make any payment with respect to, or settle or
offer to settle, any such demands.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1. Representations and Warranties of the Company. The Company hereby
----------------------------------------------
represents and warrants to Parent and Merger Sub as follows:
(a) Organization, Good Standing, Corporate Power and Qualification;
---------------------------------------------------------------
Subsidiaries and Other Interests.
- --------------------------------
(i) Each of the Company and its Subsidiaries (x) is a
corporation duly organized, validly existing and in good standing under the laws
of its respective jurisdiction of organization, (y) has all requisite corporate
or similar power and authority to own and operate its properties and assets and
to carry on its business as presently conducted and (z) is qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
where the ownership or operation of its properties or conduct of its business
requires such qualification, except where the failure to be so qualified or in
good standing, individually or in the aggregate, has not had and is not
reasonably likely to have a Company Material Adverse Effect (as defined in
Section 9.2). The Company has made available to Parent a complete and correct
copy of the Company's and its Subsidiaries' certificates of incorporation and
bylaws (or comparable governing documents), each as amended to the date hereof.
The Company's and its Subsidiaries' certificates of incorporation and bylaws (or
comparable governing documents) made available are in full force and effect.
(ii) Schedule 5.1(a) contains a correct and complete list of each
---------------
of the Company's Subsidiaries, the jurisdiction where each of such Subsidiaries
is organized and the percentage of outstanding Capital Stock of such
Subsidiaries that is directly or indirectly owned by the Company. The Company or
another Subsidiary of the Company owns its shares of the Capital Stock of each
Subsidiary of the Company free and clear of all Liens except Permitted Liens (as
defined in Section 9.2). Schedule 5.1(a) sets forth a true and complete list of
---------------
each equity investment in an amount of $2,000,000 or more or which represents a
5% or greater ownership interest in the subject of such investment made by the
Company or any of its
10
<PAGE>
Subsidiaries in any other Person other than the Company's Subsidiaries ("Other
-----
Interests"). The Other Interests are owned by the Company, by one or more of the
- ---------
Company's Subsidiaries or by the Company and one or more of its Subsidiaries, in
each case free and clear of all Liens, except for Permitted Liens and Liens that
may be created by any partnership or joint venture agreements for Other
Interests.
(b) Capital Structure. The authorized Capital Stock of the Company
-----------------
consists of (i) twenty-five million (25,000,000) Shares, of which 8,411,766 were
outstanding as of the close of business on October 23, 1998, and (ii) one
million (1,000,000) shares of Preferred Stock, par value $.01 per share (the
"Preferred Shares"), none of which is outstanding. All of the outstanding Shares
----------------
have been duly authorized and are validly issued, fully paid and nonassessable.
The Company has no Preferred Shares reserved for issuance. Schedule 5.1(h)
---------------
contains a correct and complete list as of October 23, 1998 of each outstanding
purchase right or option (each a "Company Option") to purchase Shares, including
--------------
all Company Options issued under the Company's Amended and Restated 1987 Stock
Plan, the Company's 1997 Stock Plan, and the Company's Amended and Restated 1995
Director Stock Option Plan, in each case as amended to the date hereof
(collectively, the "Stock Option Plans"), including the holder, date of grant,
------------------
exercise price and number of Shares subject thereto. Other than the FD Stock
Option Agreement described in Schedule 5.1(h), the Stock Option Plans are the
only plans under which any Company Options are outstanding. As of October 23,
1998, other than the 3,055,853 Shares reserved for issuance upon exercise of
outstanding Company Options, there are no Shares reserved for issuance or any
commitments for the Company to issue Shares. Each of the outstanding shares of
Capital Stock or other securities of each of the Company's Subsidiaries directly
or indirectly owned by the Company is duly authorized, validly issued, fully
paid and nonassessable and owned by the Company or by a direct or indirect
Subsidiary of the Company, free and clear of any limitation or restriction
(including any restriction on the right to vote or sell the same except as may
be provided as a matter of Law). Except for Company Options, there are no
preemptive or other outstanding rights, options, warrants, conversion rights,
stock appreciation rights, redemption rights, repurchase rights, agreements or
commitments to issue or sell any shares of Capital Stock or other securities of
the Company or any of its Subsidiaries or any securities or obligations
convertible or exchangeable into or exercisable for, or giving any Person a
right to subscribe for or acquire from the Company, any shares of Capital Stock
or other securities of the Company or any of its Subsidiaries, and no securities
or obligations evidencing such rights are authorized, issued or outstanding. The
Company does not have outstanding any bonds, debentures, notes or other
obligations the holders of which have the right to vote (or convertible into or
exercisable for securities having the right to vote) with the stockholders of
the Company on any matter ("Voting Debt"). If Parent takes the actions provided
-----------
for in Section 6.8(c) hereof, after the Effective Time, the Surviving
Corporation will have no obligation to issue, transfer or sell any shares of
Capital Stock or other securities of the Surviving Corporation pursuant to the
Stock Option Plans. The Shares constitute the only class of securities of the
Company or any of its Subsidiaries registered or required to be registered under
the Exchange Act.
11
<PAGE>
(c) Corporate Authority; Approval and Fairness.
------------------------------------------
(i) The Company has all requisite corporate power and authority
and has taken all corporate action necessary in order to execute, deliver and
perform its obligations under this Agreement and to consummate the Merger,
subject (if required by law) only to approval of this Agreement by the holders
of a majority of the outstanding Shares (the "Company Requisite Vote").
----------------------
Assuming due execution and delivery by Parent and Merger Sub, this Agreement is
a valid and binding agreement of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy laws or creditors' rights generally or by general
principles of equity.
(ii) The Company's Board has unanimously approved this Agreement
and the Merger and the other transactions contemplated hereby including, without
limitation, the Offer, has received and reviewed the Fairness Opinion and duly
taken all other actions described in Sections 1.2(a) and 5.1(j).
(d) Governmental Filings; No Violations.
-----------------------------------
(i) Other than the filings and/or notices (A) pursuant to
Section 1.2, (B) with the Delaware Secretary of State, (C) under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") and the
-------
Exchange Act, (D) to comply with state securities or "blue sky" laws and (E)
with the National Association of Securities Dealers (the "NASD"), no notices,
----
reports or other filings are required to be made nor are any consents,
registrations, approvals, permits or authorizations (collectively, "Government
----------
Consents") required to be obtained by the Company from any court or other
- --------
governmental or regulatory authority, agency, commission, body or other
governmental entity (a "Governmental Entity"), in connection with the execution
-------------------
and delivery of this Agreement by the Company and the consummation by the
Company of the Merger and the other transactions contemplated hereby, except
those that the failure to make or obtain are not, individually or in the
aggregate, reasonably likely to result in a Company Material Adverse Effect or
prevent, materially delay or materially impair the ability of the Company to
consummate the transactions contemplated by this Agreement.
(ii) The execution, delivery and performance of this Agreement by
the Company does not, and the consummation by the Company of the Merger and the
other transactions contemplated hereby will not, constitute or result in (A) a
breach or violation of or a default under, the certificate of incorporation or
bylaws of the Company or the comparable governing instruments of any of its
Subsidiaries, (B) a breach or violation of, or a default under, the acceleration
of any obligations or the creation of any Lien on the assets of the Company or
any of its Subsidiaries (with or without notice, lapse of time or both) pursuant
to, any agreement, lease, contract, note, mortgage, indenture or other
obligation (a "Contract") binding upon the Company or any of its Subsidiaries or
--------
any order, writ, injunction, decree of any court or any Law or governmental or
non-governmental permit or license to which the Company or any of its
Subsidiaries is subject or (C) any change in the rights or obligations of any
party under any Contract; except, in the case of clause (B) or (C) above, for
any breach, violation, default, acceleration, creation or change that,
individually or in the aggregate, is not reasonably likely to
12
<PAGE>
have a Company Material Adverse Effect or prevent, materially delay or
materially impair the ability of the Company to consummate the transactions
contemplated by this Agreement. Except as set forth on Schedule 5.1(d), there
---------------
are no Contracts of the Company or its Subsidiaries which are material to the
Company and its Subsidiaries, taken as a whole, pursuant to which consents or
waivers are or may be required prior to consummation of the Offer or the Merger
and the other transactions contemplated by this Agreement.
(e) Company Reports; Financial Statements. The Company has made
-------------------------------------
available to Parent each registration statement, report, proxy statement or
information statement filed with the SEC by it since October 31, 1997 (the
"Audit Date"), including the Company's Annual Report on Form 10-K for the year
----------
ended October 31, 1997 (the "Company 10-K") in the form (including exhibits,
------------
annexes and any amendments thereto) filed with the SEC (collectively, including
any such reports filed subsequent to the date hereof, the "Company Reports"). As
---------------
of their respective dates, the Company Reports complied, and any Company Reports
filed with the SEC after the date hereof will comply, as to form in all material
respects with the applicable requirements of the Exchange Act and the Securities
Act of 1933, as amended (the "Securities Act"), and the Company Reports did not,
--------------
and any Company Reports filed with the SEC after the date hereof will not, at
the time of their filing, contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances in which they were
made, not misleading. Each of the consolidated balance sheets included in or
incorporated by reference into the Company Reports (including the related notes
and schedules) fairly presents, or will fairly present, the consolidated
financial position of the Company and its Subsidiaries as of its date and each
of the consolidated statements of income and of changes in financial position
included in or incorporated by reference into the Company Reports (including any
related notes and schedules) fairly presents, or will fairly present, the
results of operations, retained earnings and changes in financial position, as
the case may be, of the Company and its Subsidiaries for the periods set forth
therein (subject, in the case of unaudited statements, to notes and normal year-
end audit adjustments that will not be material in amount or effect), in each
case in accordance with United States generally accepted accounting principles
("GAAP") consistently applied during the periods involved, except as may be
----
noted therein. The Company has heretofore made available or promptly will make
available to Parent a complete and correct copy of all amendments or
modifications (in draft or final form) which are required to be filed with the
SEC but have not yet been filed with the SEC to the Company Reports, agreements,
documents or other instruments which previously had been filed by the Company
with the SEC pursuant to the Exchange Act. For purposes of this Agreement,
"Balance Sheet" means the consolidated balance sheet of the Company as of
-------------
October 31, 1997 set forth in the Company 10-K. Except as set forth in Company
Reports filed with the SEC prior to the date hereof or as incurred in the
ordinary course of business since the date of the most recent financial
statements included in the Company Reports, neither the Company nor any of its
subsidiaries has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) which would be required under GAAP to be set
forth on a consolidated balance sheet of the Company and its subsidiaries taken
as a whole and which individually or in the aggregate would have a Company
Material Adverse Effect.
(f) Absence of Certain Changes. Except as disclosed in Schedule
--------------------------
5.1(f) or in the Company Reports filed prior to the date hereof, since the Audit
Date, the Company and its
13
<PAGE>
Subsidiaries have conducted their respective businesses in all material respects
only in, and have not engaged in any material transaction other than according
to, the ordinary and usual course of such businesses consistent with past
practices, and there has not been any (i) change in the financial condition,
properties, business or results of operations of the Company and its
Subsidiaries, except for those changes that, individually or in the aggregate,
have not had and are not reasonably likely to have a Company Material Adverse
Effect; (ii) material damage, destruction or other casualty loss with respect to
any material asset or property owned, leased or otherwise used by the Company or
any of its Subsidiaries, not covered by insurance; (iii) declaration, setting
aside or payment of any dividend or other distribution in respect of the Capital
Stock of the Company or any of its Subsidiaries (other than wholly-owned
Subsidiaries) or any repurchase, redemption or other acquisition by the Company
or any of its Subsidiaries of any outstanding shares of Capital Stock or other
securities of, or other ownership interests in, the Company or any of its
Subsidiaries; (iv) amendment of any material term of any outstanding security of
the Company or any of its Subsidiaries; (v) incurrence, assumption or guarantee
by the Company or any of its Subsidiaries of any indebtedness for borrowed money
other than in the ordinary course of business and in amounts and on terms
consistent with past practices; (vi) creation or assumption by the Company or
any of its Subsidiaries of any Lien (other than Permitted Liens) on any material
asset other than in the ordinary course of business consistent with past
practices; (vii) making of any loan, advance or capital contributions by the
Company or any of its Subsidiaries to, or investment in, any Person other than
(x) loans or advances to employees in connection with business-related travel,
(y) loans made to employees consistent with past practices which are not in the
aggregate in excess of $250,000, and (z) loans, advances or capital
contributions to or investments in wholly-owned Subsidiaries, and in each case
made in the ordinary course of business consistent with past practices; (viii)
transaction or commitment made, or any contract or agreement entered into, by
the Company or any of its Subsidiaries relating to its assets or business
(including the acquisition or disposition of any assets) or any relinquishment
by the Company or any of its Subsidiaries of any Contract or other right, in
either case, material to the Company and its Subsidiaries, taken as a whole,
other than transactions and commitments in the ordinary course of business
consistent with past practices and those contemplated by this Agreement; (ix)
labor dispute, other than routine individual grievances, or any activity or
proceeding by a labor union or representative thereof to organize any employees
of the Company or any of its Subsidiaries, or any lockouts, strikes, slowdowns,
work stoppages or threats thereof by or with respect to such employees; or (x)
change by the Company or any of its Subsidiaries in accounting principles,
practices or methods. Since the Audit Date, except as disclosed in the Company
Reports filed prior to the date hereof or increases in the ordinary course of
business consistent with past practices, there has not been any increase in the
compensation payable or that could become payable by the Company or any of its
Subsidiaries to (a) officers of the Company or any of its Subsidiaries or (b)
any employee of the Company or any of its Subsidiaries whose annual cash
compensation is $150,000 or more, or any amendment of any of the Compensation
and Benefit Plans (as defined in Section 5.1(h)).
(g) Litigation and Liabilities. Except as disclosed in Schedule
-------------------------- --------
5.1(g) or in the Company Reports filed prior to the date hereof, and except for
- ------
matters which, individually or in the aggregate, have not had and are not
reasonably likely to have a Company Material Adverse Effect or prevent, delay or
impair the ability of the Company to consummate the transactions
14
<PAGE>
contemplated by this Agreement, there are no (i) civil, criminal or
administrative actions, suits, claims, hearings, investigations or proceedings
pending or, to the knowledge of the Company, threatened against the Company or
any of its Subsidiaries or (ii) obligations or liabilities, whether or not
accrued, contingent or otherwise and whether or not required to be disclosed,
including those relating to matters involving any Environmental Law (as defined
in Section 5.1(k)) or any other facts or circumstances of which the Company has
knowledge that are reasonably likely to result in any claims against, or
material obligations or liabilities of, the Company or any of its Subsidiaries.
(h) Employee Benefits.
-----------------
(i) For purposes of this Agreement, "Compensation and Benefit
------------------------
Plans" means, collectively, each bonus, deferred compensation, pension,
- -----
retirement, profit-sharing, thrift, savings, employee stock ownership, stock
bonus, stock purchase, restricted stock, stock option, employment, termination,
severance, compensation, medical, health, or other plan, agreement, policy or
arrangement, whether written or oral, that covers employees or directors of the
Company or any of its Subsidiaries, or pursuant to which former employees or
directors of the Company or any of its Subsidiaries are entitled to current or
future benefits. The Company has made available to Parent copies of all
"employee pension benefit plans" (as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) (sometimes
-----
referred to herein as "Pension Plans"), "employee welfare benefit plans" (as
-------------
defined in Section 3(1) of ERISA) and all other Compensation and Benefit Plans
maintained, or contributed to, by the Company or of its subsidiaries or any
person or entity that, together with the Company and its Subsidiaries, is
treated as a single employer under Section 414(b), (c), (m) or (o) of the
Internal Revenue Code of 1986, as amended (the "Code") (the Company and each
----
such other person or entity, a "Commonly Controlled Entity") for the benefit of
--------------------------
any current employees, officers or directors of the Company or any of its
subsidiaries. The Compensation and Benefit Plans are listed on Schedule 5(h)(i).
----------------
The Company has also made available to Parent true, complete and correct copies
of (1) the most recent annual report on Form 5500 filed with the Internal
Revenue Service with respect to each Compensation and Benefit Plan (if any such
report was required), (2) the most recent summary plan description for each
Compensation and Benefit Plan for which such summary plan description is
required and (3) each trust agreement and group annuity contract related to any
Compensation and Benefit Plan. Except as would not have a Company Material
Adverse Effect, each Compensation and Benefit Plan has been administered in
accordance with its terms. Except as would not have a Company Material Adverse
Effect, all the Compensation and Benefit Plans are in compliance with applicable
provisions of ERISA and the Code.
(ii) Except as would not have a Company Material Adverse Effect,
all Pension Plans have been the subject of determination letters from the
Internal Revenue Service to the effect that such Pension Plans are qualified and
exempt from Federal income taxes under Sections 401(a) and 501(a), respectively,
of the Code, and no such determination letter has been revoked nor has any event
occurred since the date of its most recent determination letter or application
therefor that would adversely affect its qualification or materially increase
its costs. Each Compensation and Benefit Plan is in substantial compliance with
all reporting and disclosure requirements of ERISA and the Code and the Company,
its Subsidiaries and each
15
<PAGE>
Commonly Controlled Entity is, in respect of each such plan, in compliance with
the fiduciary responsibility provisions of ERISA.
(iii) Neither the Company, nor any of its Subsidiaries, nor any
Commonly Controlled Entity has maintained, contributed or been obligated to
contribute to any Benefit Plan that is subject to Title IV of ERISA.
(iv) Schedule 5.1(h) lists all outstanding Stock Options as of
---------------
October 23, 1998, showing for each such option: (1) the number of shares
issuable, (2) the number of vested shares, (3) the date of expiration and (4)
the exercise price.
(v) All contributions required to be made under the terms of
any Compensation and Benefit Plan as of the date hereof have been timely made.
Neither the Company, nor any of its Subsidiaries, nor any Commonly Controlled
Entity nor any officer, director or employee of any of them has, in respect of
any Compensation and Benefit Plans, committed any prohibited transaction under
ERISA Section 406 or 407 or Code Section 4975 or otherwise incurred excise tax
liability under Chapters 43 and 47 under Subtitle D of the Code.
(vi) Except as provided by this Agreement or in Schedule 5.1(h),
---------------
no employee of the Company or any of its Subsidiaries will be entitled to any
additional compensation or benefits or any acceleration of the time of payment
or vesting of any compensation or benefits under any Benefit Plan as a result of
the transactions contemplated by this Agreement.
(vii) All Compensation and Benefit Plans covering current or
former non-U.S. employees of the Company or any of its Subsidiaries comply in
all material respects with applicable local Laws. The Company and its
Subsidiaries have no unfunded liabilities with respect to any Pension Plan that
covers such non-U.S. employees.
(viii) Each Compensation and Benefit Plan complies in all
material respects with all applicable requirements of (i) the Age Discrimination
in Employment Act of 1967, as amended, and the regulations thereunder and (ii)
Title VII of the Civil Rights Act of 1964, as amended, and the regulations
thereunder and all other applicable laws. All amendments and actions required to
bring each of the Employee Benefit Plans into conformity with all of the
applicable provisions of ERISA and other applicable laws have been made or taken
except to the extent that such amendments or actions are not required by law to
be made or taken until a date after the Closing Date.
(ix) Each group health plan as defined in Section 5000(b)(i) of
the Code sponsored by the Company materially complies with the health care
continuation provisions of COBRA and (ii) the Medicare Secondary Payor
Provisions of Section 1826 (b) of the Social Security Act, and the regulations
promulgated thereunder.
(x) Except as disclosed in Schedule 5.1(h)(i), neither the
Company nor any of its Subsidiaries provides any welfare benefits including
health, life, or disability insurance,
16
<PAGE>
pursuant to a welfare benefit plan (as defined in ERISA Section 3(1)) or
otherwise to any former employee except pursuant to Section 4980B of the Code.
(i) Compliance with Laws. Except as set forth in the Company Reports
--------------------
filed prior to the date hereof, the businesses of each of the Company and its
Subsidiaries have not been, and are not being, conducted in violation of any
law, ordinance, regulation, judgment, order, injunction, decree, arbitration
award, license or permit of any Governmental Entity (collectively, "Laws"),
----
except for violations or possible violations that, individually or in the
aggregate, have not had and are not reasonably likely to have a Company Material
Adverse Effect or prevent, materially delay or materially impair the ability of
the Company to consummate the transactions contemplated by this Agreement.
Except as set forth in the Company Reports filed prior to the date hereof, no
investigation or review by any Governmental Entity with respect to the Company
or any of its Subsidiaries is pending or, to the knowledge of the Company,
threatened, nor has any Governmental Entity indicated an intention to conduct
the same.
(j) Takeover Statutes. No "fair price," "moratorium" or "control
-----------------
share acquisition" anti-takeover statute or regulation of the State of Delaware
or the Commonwealth of Massachusetts (each a "Takeover Statute") is applicable
----------------
to the Company, the Shares, the Offer, the Merger or any of the other
transactions contemplated by this Agreement. The Board of Directors of the
Company has approved the Offer, the Merger and this Agreement, and such approval
is sufficient to render inapplicable to the Offer, the Merger, this Agreement,
and the transactions contemplated by this Agreement the provisions of Section
203 of DGCL to the extent, if any, such Section is applicable to the Offer, the
Merger, this Agreement and the transactions contemplated by this Agreement.
(k) Environmental Matters.
---------------------
(i) The term "Environmental Laws" means any Federal, state, local
or foreign statute, treaty, ordinance, rule, regulation, policy, permit,
consent, approval, license, judgment, order, decree or injunction relating to:
(A) Releases (as defined in 42 U.S.C. (S) 9601(22)) or threatened Releases of
Hazardous Material (as hereinafter defined) into the environment, (B) the
generation, treatment, storage, presence, disposal, use, handling,
manufacturing, transportation or shipment of Hazardous Material, (C) natural
resources, or (D) the environment, and includes all "Environmental Laws" as they
are defined in any indemnification provision in any contract, lease, or
agreement to which Company is a party. The term "Hazardous Material" means (1)
hazardous substances (as defined in 42 U.S.C. (S) 9601(14)), (2) petroleum,
including crude oil and any fractions thereof, (3) natural gas, synthetic gas
and any mixtures thereof, (4) asbestos and/or asbestos containing materials, (5)
PCBs or materials containing PCBs, (6) radioactive materials, and (7) "Hazardous
Substance" or "Hazardous Material" as those terms are defined in any
indemnification provision in any contract, lease, or agreement to which the
Company is a party.
(ii) During the period of ownership or operation by the Company
and its Subsidiaries of any of their current or previously owned or leased
properties, and to the knowledge of the executive officers of the Company there
have been no Releases of Hazardous Material by the Company or any of its
Subsidiaries in, on, under or affecting such properties or
17
<PAGE>
any surrounding site, and neither the Company nor any of its Subsidiaries has
disposed of any Hazardous Material in a manner that has led, or could reasonably
be anticipated to lead to a Release, except in each case for those which
individually or in the aggregate would not have a Company Material Adverse
Effect, and except as disclosed in the Company Reports. Except as set forth on
Schedule 5.1(k), to the knowledge of the executive officers of the Company there
have been no Releases of Hazardous Material by the Company or any of its
Subsidiaries in, on, under or affecting such properties or any surrounding site
at times outside of such periods of ownership, operation, or lease or by any
other party except in each case for those which individually on in the aggregate
would not have a Company Material Adverse Effect. To the knowledge of the
executive officers of the Company no third party property is contaminated with
any Hazardous Substances that may subject the Company or any of its Subsidiaries
to liability under any Environmental Laws. The Company and its Subsidiaries have
not received any written notice of, or entered into any order, settlement or
decree relating to: (A) any violation of any Environmental Laws or the
institution or pendency of any suit, action, claim, proceeding or investigation
by any Governmental Entity or any third party in connection with any alleged
violation of Environmental Laws, (B) the response to or remediation of Hazardous
Material at or arising from any of the Company's properties or any Subsidiary's
properties. The properties currently owned or operated by the Company or any of
its Subsidiaries possesses all material permits, licenses, authorizations and
approvals required under applicable Environmental Laws with respect to the
conduct of business thereat, and are in compliance with all Environmental Laws,
except where instances of noncompliance would not, individually or in the
aggregate, be reasonable likely to have a Company Material Adverse Effect.
(iii) To the knowledge of the executive officers of the Company
there are no circumstances or conditions involving the Company, any of its
Subsidiaries or their respective employees that could reasonably be expected to
result in any material claims, liability or investigations under any
Environmental Law or relating to Hazardous Substances arising out of the
ownership, operation, management of all or any portion of a facility, or out of
the arrangement for the treatment, transportation, or disposal of, or ownership
or possession or choice of the treatment, storage or disposal facility for, any
material with respect and to the extent to which the Company or its Subsidiaries
provided services before the Closing.
(l) Intellectual Property. The Company and its subsidiaries own, or
---------------------
are validly licensed or otherwise have the right to use all (i) foreign and
United States federal and state patents, trademarks, trade names, service marks
and copyright registrations (other than the name and mark "Fluor Daniel"), (ii)
foreign and United States federal and state patent, trademark, trade name,
service mark and copyright applications for registration, (iii) common law
claims to trademarks, service marks and trade names (other than the name and
mark "Fluor Daniel"), (iv) claims of copyright which exist although no
registrations have been issued with respect thereto, (v) fictitious business
name filings with any state or local Governmental Entity and (vi) inventions,
concepts, designs, improvements, original works of authorship, computer
programs, know-how, research and development, techniques, modifications to
existing copyrightable works of authorship, data and other proprietary and
intellectual property rights (whether or not patentable or subject to copyright,
mask work or trade secret protection), in each case which are material to the
conduct of the business of the Company and its Subsidiaries, taken as a whole
(collectively, the "Intellectual Property Rights"). There are no Liens other
----------------------------
than
18
<PAGE>
Permitted Liens on the Intellectual Property Rights. There are no outstanding
and, to the Company's knowledge, no threatened disputes or disagreements with
respect to any Contract in respect of the Intellectual Property Rights.
(m) Taxes. Except as set forth on Schedule 5.1(m), (i) the
----- ---------------
Company and its Subsidiaries have timely filed or will timely file all returns
and reports required to be filed by them with any taxing authority with respect
to Taxes for any period ending on or before the date hereof, taking into account
any extension of time to file granted to or obtained on behalf of the Company or
any of its Subsidiaries, and all such returns and reports are correct and
complete in all material respects; (ii) all Taxes shown to be payable on such
returns or reports that are due prior to the date hereof have been timely paid;
(iii) as of the date hereof, no deficiency for any amount of Tax has been
asserted or assessed or, to the Company's knowledge, has been threatened or is
likely to be assessed by a taxing authority against the Company or any of its
Subsidiaries other than deficiencies as to which adequate reserves have been
provided for in the Company's consolidated financial statements; (iv) the
Company has provided in accordance with GAAP adequate reserves in its
consolidated financial statements for any Taxes that have not been paid, whether
or not shown as being due on any returns; (v) no claim has ever been made by an
authority in a jurisdiction where the Company or any of its Subsidiaries do not
file Tax Returns that any of the Company or its Subsidiaries are or may be
subject to taxation by that jurisdiction; (vi) no contract of the Company or any
Subsidiary that is a long-term contract (for purposes of Section 460 of the
Code) has been reported on a method of tax accounting other than the 100 percent
percentage of completion method for income tax purposes; (vii) neither the
Company nor any Subsidiary has been included in any consolidated, combined or
unitary Tax Return (other than for a group of which the Company is the common
parent) provided for under the laws of the United States, any state or locality
with respect to Taxes for any taxable period for which the statute of
limitations has not expired; and neither the Company nor any Subsidiary has any
liability for the Taxes of any Person under Treasury Regulation Section 1.1502-6
(or any similar provision of state, local, or foreign law), as a transferee or
successor, by contract, or otherwise; (viii) as of the Closing Date there will
be no excess loss accounts, deferred intercompany gains or losses, or other like
items pertaining to the Company or any of its Subsidiaries; and (ix) none of the
Company or any of its Subsidiaries has entered into transfer pricing agreements
or other like arrangements with respect to any foreign jurisdiction. For
purposes of this Agreement, "Taxes" means any and all taxes, fees, levies,
-----
duties, tariffs, imposts and other charges of any kind (together with any and
all interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any Governmental Entity or other taxing authority,
including taxes or other charges on or with respect to net or gross income,
franchises, windfall or other profits, gross receipts, property, sales, use,
Capital Stock, payroll, employment, social security, workers' compensation,
unemployment compensation, or net worth; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value added or gains taxes;
license, registration and documentation fees; and customers' duties, tariffs and
similar charges. Neither the Company nor any of its Subsidiaries is subject to
any Tax sharing agreement. No payments to be made to any of the employees of
the Company or any of its Subsidiaries will, as a direct or indirect result of
the Offer or the consummation of the Merger, be subject to the deduction
limitations of Section 280G of the Code.
19
<PAGE>
(n) Labor Matters. Except as disclosed in Schedule 5.1(n), neither
------------- ---------------
the Company nor any of its Subsidiaries is a party to or otherwise bound by any
collective bargaining agreement, contract or other agreement or understanding
with a labor union or labor organization, nor is the Company or any of its
Subsidiaries the subject of any proceeding asserting that the Company or any of
its Subsidiaries has committed an unfair labor practice or is seeking to compel
it to bargain with any labor union or labor organization, nor is there pending
or, to the knowledge of the Company, threatened, any labor strike, dispute,
walkout, work stoppage, slow-down or lockout involving the Company or any of its
Subsidiaries.
(o) Insurance. The Company maintains insurance policies (the
---------
"Insurance Policies") against all risks of a character and in such amounts as
are usually insured against by similarly situated companies in the same or
similar businesses. Each Insurance Policy is in full force and effect and is
valid, outstanding and enforceable, and all premiums due thereon have been paid
in full. Other than the FD D&O Insurance policy, which has been previously
provided to Parent, none of the Insurance Policies will terminate or lapse (or
be affected in any other materially adverse manner) by reason of the
transactions contemplated by this Agreement. The Company and its Subsidiaries
have complied in all material respects with the provisions of each Insurance
Policy under which it is the insured party. No insurer under any Insurance
Policy has canceled or generally disclaimed liability under any such policy or,
to the Company's knowledge, indicated any intent to do so or not to renew any
such policy. All material claims under the Insurance Policies have been filed
in a timely fashion.
(p) Brokers and Finders. Neither the Company nor any of its
-------------------
Subsidiaries, officers, directors, or employees or other Affiliates has employed
any broker or finder or incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the Offer, the Merger or the
other transactions contemplated by this Agreement, except that the Company has
employed the Financial Advisor, the arrangements with which have been disclosed
to Parent prior to the date hereof.
(q) Certain Business Practices. Neither the Company, any of its
--------------------------
Subsidiaries nor any directors, officers, agents or employees of the Company or
any of its Subsidiaries has (i) used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to political activity;
(ii) made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns or violated
any provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iii)
made any other payment prohibited by applicable Law.
(r) Customers. The documents and information supplied by the Company
---------
to Parent, Merger Sub or any of their representatives in connection with this
Agreement with respect to relationships and volumes of business done with
significant customers was accurate in all material respects.
(s) Government Contracts. Except as disclosed in Schedule 5.1(s):
--------------------
(i) With respect to each Government Contract or Bid to which the
Company and/or any of its Subsidiaries is a party: (1) all representations and
certifications were
20
<PAGE>
current, accurate and complete when made, and the Company and its Subsidiaries
have fully complied with all such representations and certifications; (2) since
October 1, 1995, no allegation has been made, either orally or in writing, that
the Company or any of its Subsidiaries is in breach or violation of any material
statutory, regulatory or contractual requirement; (3) since October 1, 1995, no
termination for convenience, termination for default, cure notice or show cause
notice has been issued; (4) since October 1, 1995, no cost in excess of $200,000
incurred by the Company, any of its Subsidiaries or any of their respective
subcontractors has been questioned or disallowed; and (5) since October 1, 1995,
no money due to the Company or any of its Subsidiaries has been (or has
threatened to be) withheld or set off.
(ii) Neither the Company, any of its Subsidiaries, any of their
respective Affiliates, nor any of the Company's or any of its Subsidiaries'
directors, officers, employees, agents or consultants is (or for the last three
years has been) (1) under administrative, civil or criminal investigation,
indictment or information, audit or internal investigation with respect to any
alleged irregularity, misstatement or omission regarding a Government Contract
or Bid; or (2) suspended or debarred from doing business with any governmental
authority or declared nonresponsible or ineligible for government contracting.
None of the Company, any of its Subsidiaries or any of their respective
Affiliates has made a voluntary disclosure to any governmental authority with
respect to any alleged material irregularity, misstatement or omission arising
under or relating to any Government Contract or Bid. The Company knows of no
circumstances that would warrant the institution of suspension or debarment
proceedings or the finding of nonresponsibility or ineligibility on part of the
Company or any of its Subsidiaries in the future.
(iii) Since October 1, 1995, no governmental authority or any
prime contractor, subcontractor or vendor has asserted any claim or initiated
any dispute proceeding against the Company or any of its Subsidiaries, nor has
the Company or any of its Subsidiaries asserted any claim or initiated any
dispute proceeding, directly or indirectly, against any such party, concerning
any Government Contract or Bid, in each case involving an amount in excess of
$100,000. There are no facts of which the executive officers of the Company are
aware upon which such a claim or dispute proceeding may be based in the future.
(iv) Definitions. The following terms, as used herein, shall
-----------
have the following meanings:
"Bid" means any quotation, bid or proposal by the Company, any of its
---
Subsidiaries or any of their respective Affiliates which, if accepted or
awarded, would lead to a contract with a governmental authority or any other
entity, including a prime contractor or a higher tier subcontractor to a
governmental authority, for the design, manufacture or sale of products or the
provision of services by the Company or any of its Subsidiaries.
"Governmental Contract" means any prime contract, subcontract, teaming
---------------------
agreement or arrangement, joint venture, basic ordering agreement, letter
contract, purchase order, delivery order, Bid, change order, arrangement or
other commitment of any kind relating to the business of the Company or any of
its Subsidiaries between the Company and/or any of its
21
<PAGE>
Subsidiaries and (1) any governmental authority, (2) any prime contractor to a
governmental authority or (3) any subcontractor with respect to any contract
described in clause (1) or (2).
(t) Cash Availability. As of the date hereof, the Company has cash,
-----------------
cash equivalents and marketable securities which are free, unencumbered and
available for use (in the case of marketable securities, when liquidated),
including for payment for the Shares in the Offer following consummation of the
Offer, in the amount of at least $20 million.
5.2. Representations and Warranties of Parent and Merger Sub. Parent and
-------------------------------------------------------
Merger Sub each hereby represents and warrants to the Company as follows:
(a) Organization, Good Standing and Qualification. Each of Parent
---------------------------------------------
and Merger Sub (i) is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, (ii) has all requisite
corporate or similar power and authority to own and operate its properties and
assets and to carry on its business as presently conducted and (iii) is
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction where the ownership or operation of its properties or conduct
of its business requires such qualification, except where the failure to be so
qualified or in such good standing, when taken together with all other such
failures, has not had and is not reasonably likely to have a Parent Material
Adverse Effect (as defined in Section 9.2). Parent has made available to the
Company a complete and correct copy of Parent's certificate or incorporation and
bylaws, as amended to the date hereof. Parent's certificate of incorporation and
bylaws so delivered are in full force and effect.
(b) Ownership of Merger Sub. All of the issued and outstanding
-----------------------
Capital Stock of Merger Sub is, and at the Effective Time will be, owned by
Parent, and there are no (i) other outstanding shares of Capital Stock or other
voting securities of Merger Sub, (ii) securities of Merger Sub convertible into
or exchangeable for shares of Capital Stock or other voting securities of Merger
Sub or (iii) options or other rights to acquire from Merger Sub, and no
obligations of Merger Sub to issue, any Capital Stock, other voting securities
or securities convertible into or exchangeable for Capital Stock or other voting
securities of Merger Sub. Merger Sub was formed solely for the purpose of
engaging in the transactions contemplated hereby, has engaged in no other
business activities and has conducted its operations only as contemplated
hereby.
(c) Corporate Authority.
-------------------
(i) Each of Parent and Merger Sub has all requisite corporate
power and authority and has taken all corporate action necessary in order to
execute, deliver and perform its obligations under this Agreement and to
consummate the Offer and the Merger. Assuming due execution and delivery by the
Company, this Agreement is a valid and binding agreement of Parent and Merger
Sub, enforceable against each of them in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy laws or creditors'
rights generally or by general principles of equity.
22
<PAGE>
(ii) The Boards of Directors of Parent and Merger Sub have
unanimously approved this Agreement and the Merger and the other transactions
contemplated hereby, including, without limitation, the Offer.
(d) Governmental Filings; No Violations.
-----------------------------------
(i) Other than the filings and/or notices (A) pursuant to
Section 1.2, (B) under the HSR Act and the Exchange Act, (C) to comply with
state securities or "blue sky" laws, and (D) required to be made with the NASD,
no notices, reports or other filings are required to be made by Parent or Merger
Sub with, nor are any Government Consents required to be obtained by Parent or
Merger Sub from, any Governmental Entity, in connection with the execution and
delivery of this Agreement by Parent and Merger Sub, the Offer and the
consummation by Parent and Merger Sub of the Merger and the other transactions
contemplated hereby, except those that the failure to make or obtain are not,
individually or in the aggregate, reasonably likely to have a Parent Material
Adverse Effect or prevent, materially delay or materially impair the ability of
the Parent or Merger Sub to consummate the transactions contemplated by this
Agreement.
(ii) The execution, delivery and performance of this Agreement by
Parent and Merger Sub do not, and the consummation by Parent and Merger Sub of
the Merger and the other transactions contemplated hereby will not, constitute
or result in (A) a breach or violation of, or a default under, the certificate
or bylaws of Parent or Merger Sub, (B) a breach or violation of, or a default
under, the acceleration of or the creation of a Lien, on the assets of Parent or
any of its Subsidiaries (with or without notice, lapse of time or both) pursuant
to, any Contract binding upon Parent or any of its Subsidiaries or any Law to
which Parent or any of its Subsidiaries is subject or (C) any change in the
rights or obligations of any party under any such Contract, except, in the case
of clause (B) or (C) above, for any breach, violation, default, acceleration,
creation or change that, individually or in the aggregate, is not reasonably
likely to have a Parent Material Adverse Effect or prevent, materially delay or
materially impair the ability of the Parent or Merger Sub to consummate the
transactions contemplated by this Agreement.
(e) Brokers and Finders. Neither Parent nor Merger Sub, nor any of
-------------------
their respective officers, directors, employees or other Affiliates, has
employed any broker or finder or incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the Offer, the Merger or the
other transactions contemplated by this Agreement.
(f) Financing. Parent and Merger Sub have possession of, or have
---------
available to them under existing lines of credit and on the Expiration Date of
the Offer and at the Effective Time, Parent and Merger Sub will have possession
of, or have available, assuming that the Company has at least $15 million in
cash on the Expiration Date of the Offer, all the funds necessary for the
acquisition of all Shares pursuant to the Offer and to perform their respective
obligations under this Agreement, including without limitation payment in full
for all Shares validly tendered in the Offer or outstanding as of the Effective
Time.
(g) Directors' and Officers' Insurance. Parent has notified the
----------------------------------
insurance broker for its directors' and officers' insurance ("Parent D&O
----------
Insurance") of the transactions
- ---------
23
<PAGE>
contemplated hereby; within ten (10) Business Days of the date hereof will
obtain from the carrier for such insurance an acknowledgment that the Company
will become a "Subsidiary" (as that term is defined under the Parent D&O
Insurance policy) at the time that Merger Sub acquires the FD Shares pursuant to
the Offer; and will pay any additional premium required as a result of the
Company becoming a "Subsidiary".
ARTICLE VI
COVENANTS
6.1. Interim Operations. The Company covenants and agrees as to itself
------------------
and its Subsidiaries that, after the date hereof and prior to the Effective Time
(unless Parent shall otherwise approve in writing, which approval shall not be
unreasonably withheld or delayed, and except as otherwise expressly contemplated
by this Agreement):
(a) the business of it and its Subsidiaries shall be conducted in the
ordinary and usual course consistent with past practices and, to the extent
consistent therewith, it and its Subsidiaries shall use commercially reasonable
efforts to preserve its business organization intact and maintain its existing
relations and goodwill with customers, suppliers, distributors, creditors,
lessors, employees and business associates;
(b) it shall not, (i) issue, sell or otherwise dispose of or subject
to Lien (other than Permitted Liens) any of its Subsidiaries' Capital Stock
owned by it; (ii) amend its charter, bylaws or, except for any amendment which
will not hinder, delay or make more costly to Parent the Offer or the Merger;
(iii) split, combine or reclassify its outstanding shares of Capital Stock; (iv)
declare, set aside or pay any dividend payable in cash, stock or property in
respect of any Capital Stock; (v) repurchase, redeem or otherwise acquire or
permit any of its Subsidiaries to purchase or otherwise acquire, any shares of
its Capital Stock or any securities convertible into or exchangeable or
exercisable for any shares of its Capital Stock; or (vi) adopt a plan of
complete or partial liquidation or dissolution, merger or otherwise restructure
or recapitalize or consolidate with any Person other than Merger Sub or another
wholly-owned Subsidiary of Parent;
(c) neither it nor any of its Subsidiaries shall (i) authorize for
issuance or issue, sell or otherwise dispose of or subject to any Lien (other
than Permitted Liens) any shares of, or securities convertible into or
exchangeable or exercisable for, or options, warrants, calls, commitments or
rights of any kind to acquire, any shares of its Capital Stock of any class or
any Voting Debt (other than Shares issuable pursuant to Company Options
outstanding on the date hereof); (ii) other than in the ordinary and usual
course of business consistent with past practices, transfer, lease, license,
guarantee, sell or otherwise dispose of or subject to any Lien (other than
Permitted Liens) any other property or assets or incur or modify any material
indebtedness or other liability (except for additional borrowings in the
ordinary course under lines of credit in existence on the date hereof); (iii)
assume, guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other Person
except in the ordinary course of business consistent with past practices and
except for obligations of Subsidiaries of the Company incurred in the ordinary
course of business; (iv) make any loans to any other Person (other than to
Subsidiaries of the Company or, customary loans or advances
24
<PAGE>
to employees in connection with business-related travel in the ordinary course
of business consistent with past practices); or (v) make any commitments for,
make or authorize any capital expenditures other than in amounts less than
$50,000 individually and $250,000 in the aggregate or, by any means, make any
acquisition of, or investment in, assets or stock of any other Person;
(d) except as may be required to comply with applicable law or by
existing contractual commitments, neither it nor any of its Subsidiaries shall
(i) enter into any new agreements or commitments for any severance or
termination pay to, or enter into any employment or severance agreement with,
any of its directors, officers or employees or consultants except for (a)
specific arrangements with 13 of the Company's employees, including one of its
directors, which have been previously disclosed to Parent and (b) reasonable
severance payments made to employees in the ordinary course of business and
consistent with past practices, or (ii) terminate, establish, adopt, enter into,
make any new grants or awards under, amend or otherwise modify, any Compensation
and Benefit Plan or increase or accelerate the salary, wage, bonus or other
compensation of any employees or directors (except for increases occurring in
the ordinary and usual course of business, which shall include normal periodic
performance reviews and related compensation and benefit increases, but not any
general across-the-board increases) or consultants or pay or agree to pay any
pension, retirement allowance or other employee benefit not required by any
existing Compensation and Benefit Plan;
(e) neither it nor any of its Subsidiaries shall, except as may be
required as a result of a change in law or in GAAP, change any of the accounting
principles or practices used by it;
(f) neither it nor any of its Subsidiaries shall revalue in any
respect any of its material assets, including writing down the value of
inventory or writing-off notes or accounts receivable, other than in the
ordinary course of business consistent with past practices;
(g) neither it nor any of its Subsidiaries shall settle or compromise
any material claims or litigation or terminate or materially amend or modify any
of its material Contracts or waive, release or assign any material rights or
claims;
(h) neither it nor any of its Subsidiaries shall make any Tax
election or permit any insurance policy naming it as a beneficiary or loss-
payable payee to be canceled or terminated;
(i) neither it nor any of its Subsidiaries shall take any action or
omit to take any action that would cause any of its representations and
warranties herein to become untrue in any material respect; and
(j) neither it nor any of its Subsidiaries will authorize or enter
into any agreement to do any of the foregoing.
6.2. Third Party Acquisitions.
------------------------
(a) The Company agrees that neither it nor any of its Subsidiaries
nor any of its or its Subsidiaries' employees or directors shall, and it shall
direct and use its best efforts to
25
<PAGE>
cause its and its Subsidiaries' agents and representatives (including the
Financial Advisor or any other investment banker and any attorney or accountant
retained by it or any of its Subsidiaries (collectively, "Company Advisors"))
----------------
not to, directly or indirectly, initiate, solicit or otherwise facilitate any
inquiries in respect of, or the making of any proposal for, a Third Party
Acquisition (as defined in Section 6.2(b)). The Company further agrees that
neither it nor any of its Subsidiaries nor any of its or its Subsidiaries'
employees or directors shall, and it shall direct and use its best efforts to
cause all Company Advisors not to engage in any negotiations concerning, or
provide any confidential information or data to, or have any discussions with,
any Third Party (as defined in Section 6.2(b)) relating to the proposal of a
Third Party Acquisition, or otherwise attempt to make or implement a Third Party
Acquisition; provided, however, that if at any time prior to the acceptance for
payment of Shares pursuant to the Offer, the Company's Board determines in good
faith, after taking into consideration the advice of its outside legal counsel,
that it is likely to be required in order for its members to comply with their
fiduciary duties under applicable law, the Company may, in response to an
inquiry, proposal or offer for a Third Party Acquisition which was not solicited
subsequent to the date hereof, (x) furnish non-public information with respect
to the Company to any such person pursuant to a confidentiality agreement on
terms substantially similar to the confidentiality agreement entered into
between the Company and Parent prior to the execution of this Agreement and (y)
participate in discussions and negotiations regarding such inquiry, proposal or
offer; and provided, further, that nothing contained in this Agreement shall
prevent the Company or the Company's Board from complying with Rules 14d-9 and
14e-2 promulgated under the Exchange Act with regard to any proposed Third Party
Acquisition or withdrawing its recommendation of the Offer or the Merger
pursuant to Section 6.2(b). The Company shall immediately cease and cause to be
terminated any existing activities, discussions or negotiations with any Third
Parties conducted heretofore with respect to any of the foregoing. The Company
shall take the necessary steps to promptly inform all Company Advisors of the
obligations undertaken in this Section 6.2(a). The Company agrees to notify
Parent as promptly as reasonably practicable in writing if (i) any inquiries
relating to or proposals for a Third Party Acquisition are received by the
Company, any of its Subsidiaries or any of the Company Advisors, (ii) any
confidential or other non-public information about the Company or any of its
Subsidiaries is requested from the Company, any of its Subsidiaries or any of
the Company Advisors, or (iii) any negotiations or discussions in connection
with a possible Third Party Acquisition are sought to be initiated or continued
with the Company, any of its Subsidiaries or any of the Company Advisors
indicating, in connection with such notice, the principal terms and conditions
of any proposals or offers, and thereafter shall keep Parent informed in
writing, on a reasonably current basis, on the status and terms of any such
proposals or offers and the status of any such negotiations or discussions. The
Company also agrees promptly to request each Person that has heretofore executed
a confidentiality agreement in connection with its consideration of acquiring
the Company or any of its Subsidiaries, if any, to return all confidential
information heretofore furnished to such Person by or on half of the Company or
any of its Subsidiaries.
(b) Except as permitted by this Section 6.2(b), the Company's Board
shall not withdraw its recommendation of the Offer or the Merger and the other
transactions contemplated hereby or approve or recommend, or cause the Company
to enter into any agreement with respect to, any Third Party Acquisition.
Notwithstanding the preceding sentence, if the Company's
26
<PAGE>
Board determines in its good faith judgment, after taking into consideration the
advice of its outside legal counsel, that it is likely to be required in order
for its members to comply with their fiduciary duties under applicable law, the
Company's Board may withdraw its recommendation of the Offer or the Merger and
the other transactions contemplated hereby, or approve or recommend or cause the
Company to enter into an agreement with respect to a Superior Proposal (as
defined below); provided, however, that the Company shall not be entitled to
enter into any agreement with respect to a Superior Proposal unless this
Agreement is concurrently terminated by its terms pursuant to Section 8.3(c).
For purposes of this Agreement, "Third Party Acquisition" means the occurrence
-----------------------
of any of the following events: (i) the acquisition of the Company by merger or
otherwise by any Person (which includes a "person" as such term is defined in
Section 13(d)(3) of the Exchange Act) other than Parent, Merger Sub or any
Affiliate thereof (a "Third Party"); (ii) the acquisition by a Third Party of
-----------
20% or more of the total assets of the Company and its Subsidiaries, taken as a
whole (other than the purchase of the Company's products in the ordinary course
of business); (iii) the acquisition by a Third Party of 20% or more of the
outstanding Shares; (iv) the adoption by the Company of a plan of partial or
complete liquidation or the declaration or payment of an extraordinary dividend;
(v) the repurchase by the Company or any of its Subsidiaries of 20% or more of
the outstanding Shares; or (vi) the acquisition by the Company or any of its
Subsidiaries by merger, purchase of stock or assets, joint venture or otherwise
of a direct or indirect ownership interest or investment in any business whose
annual revenues, net income or assets is equal to or greater than 20% of the
annual revenues, net income or assets of the Company and its Subsidiaries, taken
as a whole. For purposes of this Agreement, a "Superior Proposal" means any bona
-----------------
fide proposal to acquire directly or indirectly for consideration consisting of
cash and/or securities more than 50% of the Shares then outstanding or all or
substantially all the assets of the Company and its Subsidiaries, taken as a
whole, and otherwise on terms which the Board of Directors of the Company by a
majority vote determines in its good faith judgment (after consultation with the
Financial Advisor or another financial adviser of nationally recognized
reputation) to be reasonably capable of being completed (taking into account all
material legal, financial, regulatory and other aspects of the proposal and the
Third Party making the proposal, including the availability of financing
therefor) and more favorable to the Company's stockholders from a financial
point of view than the transactions contemplated by this Agreement.
6.3. Filings; Other Actions; Notification.
------------------------------------
(a) If a vote of the Company's stockholders is required by law in
order to consummate the Merger, the Company shall promptly, following
consummation of the Offer, prepare and file with the SEC the Proxy Statement,
which shall include the recommendation of the Company's Board that stockholders
of the Company vote in favor of the approval and adoption of this Agreement and
the written opinion of the Financial Advisor that the cash consideration to be
received by the stockholders of the Company pursuant to the Merger is fair to
such stockholders from a financial point of view. The Company shall use all
reasonable efforts to have the Proxy Statement cleared by the SEC as promptly as
practicable after such filing, and promptly thereafter mail the Proxy Statement
to the stockholders of the Company. The Company shall also use its best efforts
to obtain all necessary state securities law or "blue sky" permits and approvals
required in connection with the Merger and to consummate the other transactions
contemplated by this Agreement and will pay all expenses incident thereto.
27
<PAGE>
(b) Upon and subject to the terms and conditions set forth in this
Agreement, the Company and Parent shall cooperate with each other and use (and
shall cause their respective Subsidiaries to use) all reasonable efforts to take
or cause to be taken all actions, and do or cause to be done all things,
necessary, proper or advisable under this Agreement and applicable Laws to
consummate and make effective the Offer, the Merger and the other transactions
contemplated by this Agreement as soon as practicable, including preparing and
filing as promptly as practicable all documentation to effect all necessary
applications, notices, petitions, filings and other documents and to obtain as
promptly as practicable all permits, consents, approvals and authorizations
necessary or advisable to be obtained from any third party and/or any
Governmental Entity in order to consummate the Offer, the Merger or any of the
other transactions contemplated by this Agreement; provided, however, that
nothing in this Section 6.3 shall require, or be construed to require, Parent to
proffer to, or agree to, sell or hold separate and agree to sell, before or
after the Effective Time, any material assets, businesses or any interest in any
material assets or businesses of Parent, the Company or any of their respective
Affiliates (or to consent to any sale, or agreement to sell, by the Company of
any of its material assets or businesses) or to agree to any material change in
or material restriction on the operations of any such assets or businesses;
provided, further, that nothing in this Section 6.3 shall require, or be
construed to require, a proffer or agreement that would, in the reasonable
judgment of Parent, be likely to have a material adverse effect on the
anticipated financial condition, properties, business or results of operations
of the Parent and its Subsidiaries after the Merger, taken as a whole, in order
to obtain any necessary or advisable consent, registration, approval, permit or
authorization from any Governmental Agency. Subject to applicable Laws relating
to the exchange of information, Parent and the Company shall have the right to
review in advance, and to the extent practicable each will consult the other on,
all the information relating to Parent or the Company, as the case may be, and
any of their respective Subsidiaries, that appears in any filing made with, or
written materials submitted to, any third party and/or any Governmental Entity
in connection with the Offer, the Merger and the other transactions contemplated
by this Agreement, including the Proxy Statement. In exercising the foregoing
right, the Company and Parent shall act reasonably and as promptly as
practicable.
(c) Each of the Company and Parent shall, upon request by the other,
furnish the other with all information concerning itself, its Subsidiaries,
directors, officers and stockholders and such other matters as may be reasonably
necessary or advisable in connection with filings pursuant to the HSR Act, the
Proxy Statement or any other statement, filing, notice or application made by or
on behalf of Parent, the Company or any of their respective Subsidiaries to any
Governmental Entity or other Person (including the NASD) in connection with the
Offer, the Merger and the other transactions contemplated by this Agreement.
(d) Each of the Company and Parent shall keep the other apprised of
the status of matters relating to completion of the transactions contemplated
hereby, including promptly furnishing the other with copies of notices or other
communications received by Parent or the Company, as the case may be, or any of
their respective Subsidiaries, from any third party and/or any Governmental
Entity alleging that the consent of such third party or Governmental Entity is
or may be required with respect to the Offer, the Merger and the other
transactions contemplated by this Agreement. Each of the Company and Parent
shall give prompt notice to the other of (i) the occurrence or non-occurrence of
any fact or event which would be reasonably likely (x) to
28
<PAGE>
cause any representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Effective Time or (y) to cause any covenant, condition or agreement under this
Agreement not to be complied with or satisfied and (ii) any failure of the
Company, Parent or Merger Sub, as the case may be, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder.
6.4. Information Supplied. Each of Parent and the Company agrees, as to
--------------------
information provided by itself and its Subsidiaries, that none of the
information included or incorporated by reference in the proxy statement, if
any, delivered by the Company to its stockholders in connection with the Merger
and any amendment or supplement thereto (the "Proxy Statement") will, at the
---------------
time the Proxy Statement is cleared by the SEC, at the date of mailing to
stockholders of the Company, and at the time of the Stockholders Meeting (as
defined in Section 6.5),contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
6.5. Stockholders Meeting.
--------------------
(a) If a vote of the Company's stockholders is required by law in
order to consummate the Merger, the Company will, following consummation of the
Offer, take, in accordance with applicable Law and its certificate of
incorporation and bylaws, all action necessary to convene a meeting of holders
of Shares (the "Stockholders Meeting") as promptly as practicable after the
--------------------
Proxy Statement is cleared by the SEC to consider and vote upon the approval of
this Agreement. The Proxy Statement shall include a statement that the
Company's Board approved this Agreement and recommended that the Company's
stockholders vote in favor of this Merger, and the Company shall use all
reasonable and customary efforts to solicit such approval; provided, however,
that if the Company's Board determines in good faith, after taking into
consideration the advice of its outside legal counsel, that the Proxy Statement
not containing such recommendation is likely to be required in order for its
members to comply with their fiduciary duties under applicable law, then any
failure of the Proxy Statement to contain such recommendation shall not
constitute a breach of this Agreement. Notwithstanding the foregoing, if
Parent, Merger Sub and/or any other Subsidiary of Parent shall acquire at least
90% of the outstanding Shares, the parties shall take all necessary and
appropriate action to cause the Merger to become effective as soon as
practicable after consummation of the Offer without a Stockholders Meeting in
accordance with Section 253 of the DGCL.
(b) Following the purchase of Shares, if any, pursuant to the Offer,
Parent shall ensure that all such Shares purchased continue to be held by
Parent, Merger Sub, and/or a direct or indirect wholly-owned subsidiary of
Parent until such time as the Merger is consummated. At the Stockholders
Meeting, Parent agrees to cause all Shares purchased pursuant to the Offer and
all other Shares owned by Parent, Merger Sub or any Subsidiary of Parent to be
voted in favor of the Merger.
6.6. Access. Upon reasonable notice, and except as may otherwise be
------
required by applicable law or relevant contractual provisions contained in such
agreements, the Company shall (and shall cause its Subsidiaries to) (i) afford
Parent's officers, employees, counsel,
29
<PAGE>
accountants and other authorized representatives (collectively,
"Representatives") access, during normal business hours throughout the period
---------------
prior to the Effective Time, to its properties, books, contracts and records
and, during such period, (ii) furnish promptly to Parent all information
concerning its business, properties and personnel as may reasonably be
requested; provided, however, that no investigation pursuant to this Section 6.6
shall affect or be deemed to modify any representation or warranty made by the
Company. All requests for information made pursuant to this Section 6.6 shall be
directed to an executive officer of the Company or such Person as may be
designated by its officers. All of the information provided to or obtained by
Parent, its Affiliates and Representatives shall be treated as "Confidential
Information" under, and the parties shall comply with, and shall cause their
respective Representatives to comply with, all their respective obligations
under, the Confidentiality Agreement, dated July 28, 1998, between the Company
and Parent (the "Confidentiality Agreement").
-------------------------
6.7. Publicity. The initial press release concerning the Merger has been
---------
approved by Parent and the Company and thereafter the Company and its
Subsidiaries, on the one hand, and Parent and Merger Sub, on the other hand,
shall consult with each other prior to issuing any press releases or otherwise
making public announcements with respect to the Merger and the other
transactions contemplated by this Agreement and prior to making any filings with
any Governmental Entity or other Person (including the New York Stock Exchange
or the NASD) with respect hereto, except as may be required by law or by
obligations pursuant to any listing agreement.
6.8. Status of Company Employees; Company Stock Options; Employee Benefits
---------------------------------------------------------------------
(a) Parent agrees that following the Effective Time, the employees of
the Company and its Subsidiaries who are employed by the Surviving Corporation
or its Subsidiaries ("Company Employees") shall become eligible to participate
-----------------
in the employee benefit plans and arrangements maintained by Parent or its
Subsidiaries ("Parent Benefit Plans") including, without limitation, severance
--------------------
plans, in the same manner as similarly situated employees of Parent. Parent or
its Subsidiaries shall grant the Company Employees credit for all service
credited by the Company for purposes of eligibility, vesting and the
determination of benefits under vacation and severance pay plans. Parent shall,
and shall cause the Surviving Corporation to, honor in accordance with their
terms all employee benefit obligations to current and former employees under the
Compensation and Benefit Plans in existence on the date hereof (including,
without limitation, the plans and agreements listed on Schedule 5.1(h)(i)) and
------------------
all employment or severance agreements entered into by the Company or adopted by
the Company's Board prior to the Effective Date (collectively, the "Employment
----------
and Severance Agreements"); it being understood that nothing contained herein
- ------------------------ -------------------
shall limit or restrict the ability of Parent to modify or terminate any
Compensation and Benefit Plan, or to merge any Compensation and Benefit Plan
with any other plan, other than the Employment and Severance Agreements,
following the Effective Time.
(b) From and after the date hereof, the Company agrees that, except
with respect to grants in connection with offers of employment outstanding on
October 23, 1998, it will not grant additional stock options under the Stock
Option Plans.
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<PAGE>
(c) Any pre-existing condition exclusion under any Parent Benefit Plan
providing medical or dental benefits shall be waived for any Company Employee
who, immediately prior to commencing participation in such Parent Benefit Plan,
was participating in a Company Benefit Plan providing medical or dental benefits
and had satisfied any pre-existing condition provision under such Company
Benefit Plan. Any expenses that were taken into account under a Company Benefit
Plan providing medical or dental benefits in which the Company Employee
participated immediately prior to commencing participation in a Parent Benefit
Plan providing medical or dental benefits shall be taken into account to the
same extent under such Parent Benefit Plan, in accordance with the terms of such
Parent Benefit Plan, for purposes of satisfying applicable deductible,
coinsurance and maximum out-of-pocket provisions and life-time benefit limits.
6.9. Expenses. The Surviving Corporation shall pay all charges and
--------
expenses, including those of the Exchange Agent, in connection with the
transactions contemplated in Article IV. Except as otherwise provided in
Sections 8.5, whether or not the Merger is consummated, all costs and expenses
incurred in connection with this Agreement and the Merger and the other
transactions contemplated by this Agreement shall be paid by the party incurring
such expense.
6.10. Indemnification; Directors' and Officers' Insurance.
---------------------------------------------------
(a) From and after the Effective Time, Parent and the Surviving
Corporation shall jointly and severally indemnify, defend and hold harmless each
person who is now, or has been at any time prior to the date of this Agreement
or who becomes prior to the Effective Time a director, officer, employee or
agent of the Company or any of its Subsidiaries (when acting in such capacity)
(each individually an "Indemnified Party", and collectively, the "Indemnified
----------------- -----------
Parties"), against any costs or expenses (including reasonable attorneys' fees
- -------
and expenses), judgments, settlement amounts, fines, losses, claims, demands,
damages or liabilities (collectively, "Costs") incurred in connection with any
-----
claim, action, suit, proceeding or investigation, whether civil, criminal or
administrative (each, a "Claim") arising out of matters existing or occurring
-----
prior to or after the Effective Time, whether threatened, asserted or claimed
prior to, at or after the Effective Time, which is based in whole or in part on,
or arising in whole or in part out of the fact that such person is or was a
director (including as a member of the Special Committee) or officer of the
Company or any of its Subsidiaries including, without limitation, all Costs
based in whole or in part on, or arising in whole or in part out of, or
pertaining to this Agreement or the transactions contemplated hereby, including
the Offer and the Merger, to the fullest extent that the Company would have been
permitted under the DGCL and its certificate of incorporation, bylaws and other
agreements in effect on the date hereof to indemnify such individual. Parent
shall, or shall cause the Company (or the Surviving Corporation after the
Effective Time) to, pay all Costs in advance of the final disposition of any
Claim to each Indemnified Party to the fullest extent provided in the Company's
certificate of incorporation or bylaws as in effect on the date hereof, subject
to receipt by Parent or the Company (or the Surviving Corporation after the
Effective Time) of an undertaking by or on behalf of such Indemnified Party
contemplated by Section 145(e) of the DGCL. Without limiting the generality or
effect of the foregoing, in the event any Claim is brought against any
Indemnified Party (whether arising before or after the Effective Time) and, in
the opinion of
31
<PAGE>
counsel to an Indemnified Party, under applicable standards of professional
conduct, there is a conflict on any significant issue between the position of
the Company and an Indemnified Party, the Indemnified Parties may retain counsel
of their choice, which counsel shall be reasonably satisfactory to Parent and
the Company (or the Surviving Corporation after the Effective Time) (it being
understood that Testa, Hurwitz & Thibeault, LLP is acceptable to Parent and the
Company (and the Surviving Corporation after the Effective Time)), and Parent
shall, or shall cause the Company (or the Surviving Corporation after the
Effective Time) to, pay all reasonable fees and expenses of such counsel for the
Indemnified Parties promptly as statements therefor are received. The
Indemnified Parties as a group may not retain more than one law firm (in
addition to local counsel) to represent them with respect to each such matter
unless there is, in the opinion of counsel to an Indemnified Party, under
applicable standards of professional conduct, a conflict on any significant
issue between the positions of any two or more Indemnified Parties. The Company,
Parent and the Merger Sub (or the Surviving Corporation after the Effective
Time) agree that all rights to indemnification, including provisions relating to
advances of Costs incurred with respect to matters occurring through the
Effective Time, shall survive six years from the Effective Time; provided,
however, that all rights to indemnification in respect of any Claim asserted or
made within such period shall continue until the disposition of such Claim.
(b) Any Indemnified Party wishing to claim indemnification under
subsection (a) of this Section 6.l0, upon learning of any such Claim, shall
promptly notify Parent and the Surviving Corporation thereof (but the failure so
to notify Parent and the Surviving Corporation shall not relieve them from any
liability which they may have under this Section 6.10 except to the extent such
failure materially prejudices such party). In the event of any such Claim
(whether arising before or after the Effective Time), Parent and the Surviving
Corporation shall have the right to assume the defense of any Claim for which an
Indemnified Party is entitled to indemnification under subsection (a) of this
Section 6.10 with counsel reasonably acceptable to such Indemnified Party (which
right shall not affect the right of the Indemnified Parties to be reimbursed for
fees and expenses of separate counsel under the circumstances specified in
Section 6.10(a)). Except as otherwise provided in this Section 6.10, neither
the Parent nor the Surviving Corporation shall be liable to any such Indemnified
Party for any legal expenses of other counsel or any other expenses incurred by
such Indemnified Party in connection with the defense thereof after either the
Parent or the Surviving Corporation, as the case may be, have assumed the
defense of such Claim. The Indemnified Party will cooperate in all respects as
reasonably requested by Parent or the Surviving Corporation, as the case may be,
in the defense of any such matter and in connection therewith, shall be entitled
to reimbursement by Parent of reasonable expenses incurred in connection
therewith on a current basis. Neither Parent nor the Surviving Corporation, as
the case may be, shall have any obligation hereunder to any Indemnified Party if
and when a court shall ultimately determine, and such determination shall have
become final and nonappealable, that the indemnification of such Indemnified
Party in the manner contemplated by this Section 6.10 is prohibited by law. If
such indemnity is not available with respect to any Indemnified Party, then
Parent, the Company and the Merger Sub (or the Surviving Corporation after the
Effective Date), on the one hand, and the Indemnified Party, on the other hand,
shall contribute to the amount payable in such proportion as is appropriate to
reflect relative faults and benefits.
32
<PAGE>
(c) The Company shall purchase, and Parent shall reimburse the Company
at the Closing for the fully prepaid premium expense incurred for "Prior Acts"
Directors' & Officers' Liability Insurance to be effective with the signing of
this Agreement. It is agreed the policy term will be for six years from the
date of this Agreement without restriction as to when any alleged or actual
wrongful acts or omissions may have occurred up to and including the date of
sale of the FD Shares to Merger Sub pursuant to the Offer. The policy limits
combining both coverage agreements A & B (individual directors & officers
liability insurance and corporate reimbursement coverage) will be no less than
$25 million limits for the policy term with no more than a $250,000 deductible
for coverage B (corporate reimbursement coverage). The corporate reimbursement
coverage part is to be extended to provide indemnity to the Company, FD and
Parent for their obligations, if any, to indemnify the individual directors and
officers of the Company, including its predecessor or successor names, if any,
for the Company directors' and officers' actual or alleged acts, errors or
omissions committed prior to or on the date of sale of the FD Shares to Merger
Sub. Other terms and conditions are to be no less advantageous to the intended
beneficiaries thereof than FD's existing directors' and officers' liability
coverage. This insurance policy is also to be primary to any other insurance or
indemnity obligation owed to the individuals from any of the parties to this
Agreement. The Company shall not, without prior written consent of Parent,
purchase such coverage if the total cost of the coverage exceeds $200,000. This
insurance is to be noncancellable except for the nonpayment of premium or the
ultimate failure of the FD Shares being purchased by Merger Sub.
(d) The provisions of this Section 6.10 are intended to be for the
benefit of, and shall be enforceable by, each of the Indemnified Parties and
their respective heirs and estates. Nothing in this Section 6.10 shall limit in
any way any other rights to indemnification that any current or former director
or officer of the Company or any of its Subsidiaries may have by contract or
otherwise.
(e) Without limiting the effect of subsections (a) or (c) of this
Section 6.10, from and after the Effective Time, the Surviving Corporation shall
fulfill, assume and honor in all respects the obligations of the Company or any
of its Subsidiaries pursuant to the Company's or any of its Subsidiaries
certificate of incorporation, bylaws and any indemnification agreement between
the Company or any of its Subsidiaries which is set forth on Schedule 6.10 and
-------------
any of their respective directors and officers existing and in force as of the
Effective Time. The Surviving Corporation agrees that the indemnification
obligations set forth in the Company's certificate of incorporation and bylaws,
in each case as of the date of this Agreement, shall survive the Merger (and, as
of or prior to the Effective Time, Parent shall cause the bylaws of Merger Sub
to reflect such provisions). No subsequent amendment of the provisions of the
bylaws of the Surviving Corporation shall affect the indemnification obligations
of Parent or the Surviving Corporation in any manner that would adversely affect
the rights of the Indemnified Parties under this Section 6.10.
(f) If Parent or the Surviving Corporation or any of its successors or
assigns (i) shall consolidate with or merge into any other Person and shall not
be the continuing or surviving corporation or Person of such consolidation or
merger or (ii) shall transfer all or substantially all of its properties and
assets to any Person, then and in each such case, proper
33
<PAGE>
provisions shall be made so that the successors and assigns of the Parent and
Surviving Corporation shall assume all of the obligations set forth in this
Section 6.10.
6.11. Other Actions by the Company and Parent. If any Takeover Statute is
---------------------------------------
or may become applicable to the Merger or the other transactions contemplated by
this Agreement, each of Parent and the Company and their respective Boards of
Directors shall grant such approvals and take such lawful actions as are
necessary so that such transactions may be consummated as promptly as
practicable on the terms contemplated by this Agreement or by the Merger and
otherwise act to eliminate or minimize the effects of such statute, and any
regulations promulgated thereunder, on such transactions.
6.12. Tender of Shares by FD; Cancellation of FD Stock Option. FD agrees
-------------------------------------------------------
that it will tender all Shares owned by it or any of its Affiliates (including
the FD Shares) in, and will not withdraw such Shares from, the Offer. FD
further agrees that FD Stock Option Agreement described in Schedule 5.1(h) shall
be deemed cancelled as of the date on which Parent delivers the Notice of
Acceptance to the Depositary.
6.13. Parent Stock Option; Exercise; Adjustments.
------------------------------------------
(a) Subject to the terms and conditions set forth herein, the Company
hereby grants to Parent an irrevocable option (the "Parent Option") to purchase
-------------
that number of authorized and unissued shares of Common Stock equal to 14% of
the outstanding Shares immediately after the exercise of the Parent Option (the
"Option Shares") at a purchase price per Option Share equal to the Offer Price
-------------
(the "Option Price"). Subject to the conditions set forth in subsection (c)
------------
below, the Parent Option may be exercised by Parent, in whole or in part, at any
time or from time to time after the date on which Parent has accepted for
payment the Shares tendered pursuant to the Offer and prior to the termination
of this Agreement pursuant to Article VIII. If Parent wishes to exercise the
Parent Option, Parent shall send a written notice to the Company (the "Exercise
--------
Notice") specifying a date (not earlier than the next Business Day following the
- ------
date such notice is given) for the closing of such purchase and containing a
representation by Parent that upon the issuance and delivery of the Option
Shares, there will be no further conditions precedent that need to be satisfied
for Parent and Merger Sub to effect the Merger, and that Parent and Merger Sub
will take all actions required on their respective parts to effect the Merger.
(b) In the event of any change in the number of issued and outstanding
Shares by reason of any stock dividend, stock split, split-up, recapitalization,
merger or other change in the corporate or capital structure of the Company, the
number of Option Shares and the Option Price shall be appropriately adjusted to
restore Parent to its rights hereunder.
(c) The Company's obligation to issue and deliver the Option Shares
upon exercise of the Parent Option is subject only to the following conditions:
(i) No preliminary or permanent injunction or other order issued
by any federal or state court of competent jurisdiction in the United States
prohibiting the delivery of the Option Shares shall be in effect;
34
<PAGE>
(ii) Any applicable waiting periods under the HSR Act, or other
applicable United States or foreign Laws shall have expired or been terminated;
and
(iii) The number of Option Shares plus the number of Shares accepted
for payment by Parent pursuant to the Offer will, upon issuance of the Option
Shares, constitute at least ninety percent (90%) of the Company's issued and
outstanding shares of Common Stock.
(d) Any closing hereunder shall take place on the date specified by Parent
in its Exercise Notice delivered pursuant to subsection (a) above at 9:00 a.m.,
Pacific time, or the first day thereafter on which all of the conditions in
subsection (c) above are met, at the offices of Gibson, Dunn & Crutcher LLP, 333
South Grand Avenue, Los Angeles, California, or at such other time and places as
the parties may agree (the "Option Closing Date"). On the Option Closing Date,
-------------------
the Company will deliver to Parent a certificate or certificates representing
the Option Shares in the denominations designated by Parent in the Exercise
Notice and Parent will purchase such Option Shares from the Company at a price
per Option Share equal to the Option Price. Any payment made by Parent to the
Company pursuant to this subsection (d) shall be made by certified, cashier's or
bank check or by wire transfer of immediately available funds to an account
designated by the Company. The certificates representing the Option Shares may
bear an appropriate legend relating to the fact that such Option Shares have not
been registered under the Securities Act.
6.14. Use of Company Cash. The Company agrees that prior to the initial
-------------------
Expiration Date it will take all steps reasonably necessary, after consulting
with Parent, to sell any marketable securities owned by it so that on the
initial Expiration Date the Company will have maximized its available cash and
will thereafter until such time as the Parent Directors are elected invest such
cash in overnight investments. Upon the election of the Parent Directors and at
the direction of the Company's Board up to $20 million of the available cash of
the Company will be loaned to Parent and evidenced by an interest bearing
promissory note payable on demand. The proceeds of such loan will be delivered
to the Depositary to be used solely to fund the purchase of Shares in the Offer.
ARTICLE VII
CONDITIONS
7.1. Conditions to Each Party's Obligation to Effect Merger. The
------------------------------------------------------
respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver at or prior to the Closing of each of the following
conditions:
(a) Stockholder Approval. If required by applicable law this
--------------------
Agreement shall have been duly approved by holders of the number of Shares
constituting at least the Company Requisite Vote.
(b) Regulatory Consents. The waiting period applicable to the
-------------------
consummation of the Merger under the HSR Act shall have expired or been
terminated and, other than filing the Delaware Certificate of Merger, all
filings with any Governmental Entity required to be made
35
<PAGE>
prior to the Effective Time by the Company or Parent or any of their respective
Subsidiaries, with, and all Government Consents required to be obtained prior to
the Effective Time by the Company or Parent or any of their respective
Subsidiaries in connection with the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby by the Company, Parent
and Merger Sub shall have been made or obtained (as the case may be), except
where the failure to so make or obtain will not result in either a Company
Material Adverse Effect or a Parent Material Adverse Effect.
(c) Litigation. No court or other Governmental Entity of competent
----------
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) that is in effect and restrains, enjoins or
otherwise prohibits consummation of the transactions contemplated by this
Agreement (collectively, an "Order"), and no Governmental Entity shall have
-----
instituted any proceeding seeking any such Order and such proceeding remains
unresolved.
7.2. Conditions to Obligations of Parent and Merger Sub. The obligations
--------------------------------------------------
of Parent and Merger Sub to effect the Merger are also subject to the
satisfaction or waiver by Parent prior to the Effective Time of the following
conditions:
(a) Representations and Warranties. The representations and
------------------------------
warranties of the Company set forth in this Agreement shall be true and correct
in all material respects as of the date of this Agreement and (except to the
extent such representations and warranties speak as of an earlier date) as of
the Closing Date as though made on and as of the Closing Date it being
understood that representations and warranties shall be deemed to be true and
correct unless the respects in which the representations and warranties (without
giving effect to any "materiality" limitations or references to "material
adverse effect" set forth therein) are untrue or incorrect in the aggregate is
likely to have a Company Material Adverse Effect.
(b) Performance of Obligations of the Company and FD. The Company and
------------------------------------------------
FD shall have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date.
7.3. Conditions to Obligations of the Company. The obligation of the
----------------------------------------
Company to effect the Merger is also subject to the satisfaction or waiver by
the Company prior to the Effective Time of the following conditions:
(a) Representations and Warranties. The representations and
------------------------------
warranties of Parent and Merger Sub set forth in this Agreement shall be true
and correct in all material respects as of the date of this Agreement and
(except to the extent such representations and warranties speak as of an earlier
date) as of the Closing Date as though made on and as of the Closing Date it
being understood that representations and warranties shall be deemed to be true
and correct unless the respects in which the representations and warranties
(without giving effect to any "materiality" limitations or references to
"material adverse effect" set forth therein) are untrue or incorrect in the
aggregate is likely to have a Parent Material Adverse Effect.
36
<PAGE>
(b) Performance of Obligations of Parent and Merger Sub. Each of
---------------------------------------------------
Parent and Merger Sub shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or prior to
the Closing Date.
ARTICLE VIII
TERMINATION
8.1. Termination by Mutual Consent. This Agreement may be terminated and
-----------------------------
the Merger may be abandoned at any time prior to the Effective Time, whether
before or after its approval by the stockholders of the Company, by mutual
written consent of the Company (through the Continuing Directors, the Special
Directors or their designated successors), Parent and Merger Sub, by action of
their respective Boards of Directors.
8.2. Termination by Either Parent or the Company. This Agreement may be
-------------------------------------------
terminated and the Merger may be abandoned at any time prior to the Effective
Time by either Parent or the Company, by action of their respective Boards of
Directors if (a) any Order permanently restraining, enjoining or otherwise
prohibiting the Merger shall be entered (whether before or after the approval by
the stockholders of the Company) and such Order is or shall have become
nonappealable, provided that the party seeking to terminate this Agreement shall
have used its reasonable efforts to remove or lift such Order, or (b) the
Minimum Condition shall not have been satisfied on or before December 31, 1998;
8.3. Termination by the Company. This Agreement may be terminated and the
--------------------------
Merger may be abandoned at any time prior to the Effective Time, whether before
or after its approval by the stockholders of the Company, by the Company if:
(a) (i) Parent fails to commence the Offer as provided in Section 1.1
or (ii) after December 31, 1998, Parent shall have failed to accept the Shares
for payment pursuant to the Offer; provided, however, that the right to
terminate this Agreement pursuant to this subsection (a) shall not be available
to the Company if it has breached in any material respects its obligations under
this Agreement in any manner that shall have proximately contributed to the
failure referenced in this subsection (a);
(b) the Offer is terminated or withdrawn pursuant to its terms without
any Shares being purchased thereunder; provided, however, that the right to
terminate this Agreement pursuant to this subsection (b) shall not be available
to the Company if it has breached in any material respects its obligations under
this Agreement in any manner that shall have proximately contributed to the
termination or withdrawal of the Offer;
(c) prior to Parent's purchase of Shares pursuant to the Offer, (i)
the Company enters into a binding written agreement with respect to a Superior
Proposal after fully complying with the procedures set forth in Section 6.2 and
(ii) the Company concurrently with such termination pays to Parent in
immediately available funds all expense reimbursements due Parent pursuant to
Section 8.5(a) and the Termination Fee pursuant to Section 8.5(b)(ii); provided,
further, that notwithstanding anything in this Agreement to the contrary, the
termination of this
37
<PAGE>
Agreement by the Company pursuant to this subsection (c) shall not be deemed to
violate or breach other obligations of the Company under this Agreement; or
(d) there has been a material breach by Parent or Merger Sub of any
representation, warranty, covenant or agreement contained in this Agreement that
is not curable or, if curable, is not cured prior to the earlier of (i) twenty
(20) days after written notice of such breach is given by the Company to Parent
and (ii) two (2) Business Days before the date on which the Offer expires.
8.4. Termination by Parent and Merger Sub. This Agreement may be
------------------------------------
terminated and the Merger may be abandoned at any time prior to the Effective
Time, whether before or after its approval by the stockholders of the Company,
by Parent and Merger Sub if:
(a) after December 31, 1998, Parent shall not have accepted Shares for
payment pursuant to the Offer; provided, however, that the right to terminate
this Agreement pursuant to this subsection (a) shall not be available to Parent
and Merger Sub if either of them has breached in any material respect its
obligations under this Agreement in any manner that shall have proximately
contributed to the occurrence of the failure referred to in this subsection (a);
(b) the Board of Directors of the Company shall have withdrawn or
modified its approval or recommendation of this Agreement in a manner materially
adverse to Parent; or
(c) Parent shall have terminated the Offer in accordance with the
provisions of Annex A; provided, however, that the right to terminate this
Agreement pursuant to this subsection (c) shall not be available to Parent and
Merger Sub if either of them has breached in any material respect its
obligations under this Agreement in any manner than shall have proximately
contributed to the termination of the Offer.
8.5. Effect of Termination and Abandonment.
-------------------------------------
(a) If this Agreement is terminated and the Merger abandoned pursuant
to this Article VIII, this Agreement (other than as set forth in Section 9.1)
shall become void and of no further effect with no liability of any party hereto
(or any of its directors, officers, employees, agents, stockholders, legal,
accounting and financial advisors or other representatives); provided, however,
that, except as otherwise provided herein, no such termination shall relieve any
party hereto of any liability or damages resulting from any breach of this
Agreement; and provided, further, that the Company shall reimburse Parent in the
amount of $400,000 as reimbursement for all of its costs and expenses in
connection with this Agreement, the Offer and the Merger unless: (i) the
Agreement has been terminated by the parties pursuant to Section 8.1 or by
either party pursuant to Section 8.2(a); (ii) the Company has terminated this
Agreement pursuant to Sections 8.3(a), 8.3(b) or 8.3(d); or (iii) the Parent has
terminated this Agreement pursuant to Section 8.4(a) or Section 8.4(c) and,
further, the Company has not breached in any material respect its obligations
under this Agreement in any manner which proximately contributed to the failure
to close the Merger or Parent's termination of the Offer, respectively.
38
<PAGE>
(b)(i) In lieu of any liability or obligation to pay damages (other
than the obligation to reimburse Parent for expenses pursuant to Section
8.5(a)), if (A) there shall be a proposal by a Third Party for a Third Party
Acquisition existing at the time of termination of the Agreement by Parent and
Merger Sub, and (B) Parent and Merger Sub shall have terminated this Agreement
pursuant to Section 8.4(b) or (c), the Company shall pay to Parent within two
(2) business days after entering into an agreement with respect to such Third
Party Acquisition a fee of $1,500,000.
(ii) In lieu of any liability or obligation to pay damages
(other than the obligation to reimburse Parent for expenses pursuant to Section
8.5(a)), (A) if there shall not have been a material breach of any
representation, warranty, covenant or agreement on the part of Parent or Merger
Sub and (B) the Company shall have terminated this Agreement pursuant to Section
8.3(c), the Company shall pay to Parent concurrently with such termination a fee
of $1,500,000. (Such amounts payable pursuant to Section 8.5(b)(i) or this
Section 8.5(b)(ii) are referred to in the aggregate in this Agreement as the
"Termination Fee".)
(c) The Company acknowledges that the agreements contained in Section
8.5 are an integral part of the transactions contemplated by this Agreement and
that, without these agreements, Parent and Merger Sub would not enter into this
Agreement; accordingly, if the Company fails promptly to pay the amounts
required pursuant to Section 8.5 and, in order to obtain such payment Parent or
Merger Sub commences a suit which results in a final nonappealable judgment
against the Company for such amounts, the Company shall pay to Parent or Merger
Sub (i) its costs and expenses (including attorneys' fees) in connection with
such suit and (ii) if (and only if) this Agreement has been terminated pursuant
to Section 8.3(c) or 8.4(c), interest on the amount at the rate announced by
Citibank, N.A. as its "reference rate" in effect on the date such payment was
required to be made.
8.6. Procedure for Termination. A termination of this Agreement pursuant
-------------------------
to this Article VIII shall, in order to be effective, require in the case of
Parent, Merger Sub or the Company, action by its Board of Directors.
ARTICLE IX
MISCELLANEOUS
9.1. Survival. This Article IX and the agreements of the Company, Parent
--------
and Merger Sub contained in Sections 6.8 (Benefits), 6.9 (Expenses) and 6.10
(Indemnification; Directors' and Officers' Insurance) shall survive the
consummation of the Merger. This Article IX and the agreements of the Company,
Parent and Merger Sub contained in Section 6.9 (Expenses), Section 8.5 (Effect
of Termination and Abandonment) and the Confidentiality Agreement shall survive
the termination of this Agreement. All other representations, warranties,
agreements and covenants in this Agreement and in any certificate or schedule
delivered pursuant hereto shall not survive the consummation of the Merger or
the termination of this Agreement.
9.2. Certain Definitions. For the purposes of this Agreement each of the
-------------------
following terms shall have the meanings set forth below:
39
<PAGE>
(a) "Affiliate" means a Person that, directly or indirectly, through
---------
one or more intermediaries controls, is controlled by or is under common control
with the first-mentioned Person.
(b) "Business Day" means any day other than a day on which banks in
------------
the State of New York are authorized to close or the New York Stock Exchange is
closed.
(c) "Capital Stock" means common stock, preferred stock, partnership
-------------
interests, limited liability company interests or other ownership interests
entitling the holder thereof to vote with respect to matters involving the
issuer thereof.
(d) "Company Material Adverse Effect" means a material adverse effect
-------------------------------
on the financial condition, properties, business, results of operations or
prospects of the Company and its Subsidiaries, taken as a whole (it being
understood that (i) any adverse effect that is caused by conditions affecting
the economy or security markets generally shall not be taken into account in
determining whether there has been a Company Material Adverse Effect and (ii)
any adverse effect that is caused by conditions affecting the primary industry
in which the Company currently competes shall not be taken into account in
determining whether there has been a Company Material Adverse Effect (provided
that such effect does not adversely affect the Company in a disproportionate
manner).
(e) "Depositary" means BankBoston, N.A. which will serve as the
----------
depositary for the Offer or its duly appointed successor.
(f) "Lien" means, with respect to any asset, any mortgage, lien,
----
pledge, charge, security interest, encumbrance, hypothecation, title defect or
adverse claim of any kind in respect of such asset.
(g) "Parent Material Adverse Effect" means a material adverse effect
------------------------------
on the ability of Parent or Merger Sub to conduct the Offer or consummate the
Merger or any of the other material transactions contemplated by this Agreement
(h) "Permitted Liens" means (i) Liens for Taxes or other governmental
---------------
assessments, charges or claims the payment of which is not yet due; (ii)
statutory liens of landlords and liens of carriers, warehousemen, mechanics,
materialmen and other similar Persons and other liens imposed by applicable Law
incurred in the ordinary course of business for sums not yet delinquent or
immaterial in amount and being contested in good faith; (iii) liens specifically
identified as such in the Balance Sheet or the notes thereto; (iv) liens
constituting or securing executory obligations under any lease that constitutes
an "operating lease" under GAAP; and (v) any other Lien arising in the ordinary
course of business, the imposition of which would not constitute a Company
Material Adverse Effect; provided, however, that, with respect to each of the
foregoing clauses (i) through (iv), to the extent that any such lien arose prior
to the Audit Date and relates to, or secures the payment of, a liability that is
required to be accrued on the Balance Sheet under GAAP, such lien shall not be a
Permitted lien unless accruals for such liability have been established therefor
on the Balance Sheet in conformity with GAAP. Notwithstanding the foregoing, no
lien arising under the Code or ERISA with respect to the
40
<PAGE>
operation, termination, restoration or funding of any Compensation and Benefit
Plan sponsored by, maintained by or contributed to by the Company or any of its
ERISA Affiliates or arising in connection with any excise tax or penalty tax
with respect to such Compensation and Benefit Plan shall be a Permitted lien.
(i) "Person" means an individual, corporation (including not-for-
------
profit), partnership, limited liability company, association, trust,
unincorporated organization, joint venture, estate, Governmental Entity or other
legal entity.
(j) "Subsidiary" or "Subsidiaries" of the Company, Parent, the
---------- ------------
Surviving Corporation or any other Person means any corporation, partnership,
limited liability company, association, trust, unincorporated association or
other legal entity of which the Company, Parent, the Surviving Corporation or
any such other Person, as the case may be, either alone or through or together
with any other Subsidiary, owns, directly or indirectly, 50% or more of the
Capital Stock, the holders of which are generally entitled to vote for the
election of the Board of Directors or other governing body of such corporation
or other legal entity.
9.3. No Personal Liability. This Agreement shall not create or be deemed
---------------------
to create any personal liability or obligation on the part of any direct or
indirect stockholder of the Company, Merger Sub or Parent, or any of their
respective officers, directors, employees, agents or representatives.
9.4. Modification or Amendment. Subject to the provisions of applicable
-------------------------
Law, at any time prior to the Effective Time, the parties hereto may modify or
amend this Agreement, by written agreement executed and delivered by duly
authorized officers of the respective parties.
9.5. Waiver of Conditions. The conditions to each of the parties'
--------------------
obligations to consummate the Merger are for the sole benefit of such party and
may be waived by such party in whole or in part to the extent permitted by
applicable Law. The failure of any party hereto to exercise any right, power or
remedy provided under this Agreement or otherwise available in respect hereof at
law or in equity, or to insist upon strict compliance by any other party hereto
with its obligations hereunder, and any custom or practice of the parties at
variance with the terms hereof, shall not constitute a waiver by such party of
its rights to exercise any such or other right, power or remedy or to demand
such compliance.
9.6. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.
9.7. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL.
---------------------------------------------
(a) THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN, AND IN ALL RESPECTS
SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAW
OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES
THEREOF. The parties hereby irrevocably submit to the jurisdiction of the
courts of the State of Delaware and the Federal courts of the
41
<PAGE>
United States of America located in the State of Delaware solely in respect of
the interpretation and enforcement of the provisions of this Agreement and of
the documents referred to in this Agreement, and in respect of the transactions
contemplated hereby, and hereby waive, and agree not to assert, as a defense in
any action, suit or proceeding for the interpretation or enforcement hereof or
of any such document, that it is not subject thereto or that such action, suit
or proceeding may not be brought or is not maintainable in said courts or that
the venue thereof may not be appropriate or that this Agreement or any such
document may not be enforced in or by such courts, and the parties hereto
irrevocably agree that all claims with respect to such action or proceeding
shall be heard and determined in such a Delaware State or Federal court. The
parties hereby consent to and grant any such court jurisdiction over the person
of such parties and over the subject matter of such dispute and agree that
mailing of process or other papers in connection with any such action or
proceeding in the manner provided in Section 9.8 or in such other manner as may
be permitted by applicable law, shall be valid and sufficient service thereof.
(b) The parties agree that irreparable damage would occur and that the
parties would not have any adequate remedy at law in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this
Agreement in any Federal court located in the State of Delaware or in Delaware
state court, this being in addition to any other remedy to which they are
entitled at law or in equity.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH SUCH PARTY HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE INITIAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 9.7.
9.8. Notices. Any notice, request, instruction or other document to be
-------
given hereunder by any party to the others shall be deemed given if in writing
and delivered personally or sent by registered or certified mail (return receipt
requested) or overnight courier (providing proof of delivery), postage prepaid,
or by facsimile (which is confirmed):
42
<PAGE>
If to Parent or Merger Sub:
--------------------------
International Technology Corporation.
2790 Mosside Boulevard
Monroeville, Pennsylvania 15146-2792
Attention: President
Fax: (412) 858-3311
with a copy to:
Peter F. Ziegler, Esq.
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071-3197
Fax: (213) 229-7520
If to the Company:
-----------------
Fluor Daniel GTI, Inc.
100 River Ridge Drive
Norwood, Massachusetts 02062
Attention: President
Fax: (781) 769-7992
with a copy to:
The Special Committee
Fluor Daniel GTI, Inc.
100 River Ridge Drive
Norwood, Massachusetts 02062
Fax: (781) 769-7992
Gordon H. Hayes, Jr.
Testa, Hurwitz & Thibeault, LLP
125 High Street
Boston, Massachusetts 02110
Fax: (617) 248-7100
If to FD:
--------
Fluor Daniel, Inc.
3353 Michelson Drive
Irvine, California 92698
Attention: Ronald G. Peterson
Fax: (949) 975-2956
43
<PAGE>
with a copy to:
Raymond M. Bukaty
Fluor Daniel, Inc.
3353 Michelson Drive
Irvine, California 92698
Fax: (949) 975-4450
or to such other Persons or addresses as may be designated in writing by the
party to receive such notice as provided above.
9.9. Entire Agreement. This Agreement (including any schedules, exhibits
----------------
or annexes hereto) and the Confidentiality Agreement constitute the entire
agreement, and supersede all other prior agreements, understandings,
representations and warranties both written and oral, among the parties, with
respect to the subject matter hereof.
9.10. No Third Party Beneficiaries. Except as provided in Section 6.8
----------------------------
(Status of Company Employees; Company Stock Options; Employee Benefits) and
Section 6.10 (Indemnification; Directors' and Officers' Insurance), this
Agreement is not intended to confer upon any Person other than the parties
hereto any rights or remedies hereunder.
9.11. Obligations of the Company and Surviving Corporation. Whenever this
----------------------------------------------------
Agreement requires a Subsidiary of the Company or Parent to take any action,
such requirement shall be deemed to include and undertaking on the part of the
Company or the Parent, as the case may be, to cause such Subsidiary to take such
action and, after the Effective Time, on the part of the Surviving Corporation
to cause such Subsidiary to take such action.
9.12. Severability. The provisions of this Agreement shall be deemed
------------
severable and the invalidity or unenforceability of any provision hereof shall
not affect the validity or enforceability of any of the other provisions hereof.
If any provision of this Agreement, or the application thereof to any Person or
any circumstance, is illegal, invalid or unenforceable, (a) a suitable and
equitable provision shall be substituted therefor in order to carry out, so far
as may be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision and (b) the remainder of this Agreement and the
application of such provision to other Persons or circumstances shall not be
affected by such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
9.13. Interpretation. The table of contents and Article, Section and
--------------
subsection headings herein are for convenience of reference only, do not
constitute a part of this Agreement and shall not be deemed to limit or
otherwise affect any of the provisions hereof. Where a reference in this
Agreement is made to a Section, Schedule, Annex or Exhibit, such reference shall
be to a Section of, or Schedule, Annex or Exhibit to, this Agreement, unless
otherwise indicated. Whenever the words "include," "includes" or "including"
are used in this Agreement, they shall be deemed to be followed by the words
"without limitation." All terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document made
44
<PAGE>
or delivered pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such term. Any agreement, instrument or statute defined or referred
to herein or in any agreement or instrument that is referred to herein means
such agreement, instrument or statute as from time to time amended, modified or
supplemented, including (in the case of agreements or instruments) by waiver or
consent and (in the case of statutes) by succession of comparable successor
statutes and references to all attachments thereto and instruments incorporated
therein. References to a Person are also to its permitted successors and assigns
and, in the case of an individual, to his or her heirs and estate, as
applicable.
9.14. Assignment. This Agreement shall not be assignable by operation of
----------
law or otherwise and any attempted assignment of this Agreement in violation of
this sentence shall be void; provided, however, that Parent may designate, by
written notice to the Company, another wholly-owned, direct subsidiary to be a
Constituent Corporation in lieu of Merger Sub, in the event of which, all
references herein to Merger Sub shall be deemed references to such other
Subsidiary except that all representations and warranties made herein with
respect to Merger Sub as of the date of this Agreement shall be deemed
representations and warranties made with respect to such other Subsidiary as of
the date of such designation.
45
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
duly authorized officers of the parties hereto as of the date hereof.
FLUOR DANIEL GTI, INC.
By: /s/ Walter C. Barber
___________________________________
Name: Walter C. Barber
Title: President
FLUOR DANIEL, INC.
By: /s/ Ronald G. Peterson
___________________________________
Name: Ronald G. Peterson
Title: Group President
INTERNATIONAL TECHNOLOGY CORPORATION
By: /s/ Anthony J. DeLuca
___________________________________
Name: Anthony J. DeLuca
Title: President and Chief
Executive Officer
TIGER ACQUISITION CORPORATION
By: /s/ Anthony J. DeLuca
___________________________________
Name: Anthony J. DeLuca
Title: President and Chief
Executive Officer
46
<PAGE>
ANNEX A
CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer or this Agreement, and
subject to any applicable rules and regulations of the SEC, including Rule 14e-
1(c) relating to Parent's obligation to pay for or return tendered shares after
termination or withdrawal of the Offer, Parent shall not be required to accept
for payment or pay for any Shares tendered pursuant to the Offer, shall delay
the acceptance for payment of any Shares and if required by Section 1.1(b) of
this Agreement, shall extend the Offer by one or more extensions until December
31, 1998, as provided in Section 1.1(b) of the Agreement, and, except as
otherwise provided in this Agreement, may terminate the Offer at any time after
December 31, 1998 if (i) less than the number of Shares necessary to satisfy the
Minimum Condition have been tendered pursuant to the Offer prior to the
expiration of the Offer and not withdrawn; (ii) any applicable waiting period
under the HSR Act has not expired or terminated prior to the Expiration Date of
the Offer; or (iii) at any time after the date of this Agreement, and before
acceptance for payment of any Shares, any of the following events shall occur
and be continuing on or after December 31, 1998:
(a) there shall have been any action taken, or any statute, rule,
regulation, judgment, order or injunction promulgated, entered, enforced,
enacted, issued or deemed applicable to the Offer or the Merger by any domestic
or foreign court or other Governmental Entity (other than the application of the
waiting period provisions of the HSR Act to the Offer or to the Merger) that, in
the reasonable judgment of Parent, would be expected to, directly or indirectly
(i) prohibit or impose any material limitations on, Parent's ownership or
operation of all or a material portion of the Company's businesses or assets, or
compel Parent to dispose of or hold separate any material portion of the
business or assets of the Company or Parent and its respective Subsidiaries, in
each case taken as a whole, (ii) prohibit, or make illegal, the acceptance for
payment, payment for or purchase of Shares or the consummation of the Offer, the
Merger or the other transactions contemplated by this Agreement, (iii) result in
the material delay in or restricts the ability of Parent, or renders Parent
unable, to accept for payment, pay for or purchase some or all of the Shares, or
(iv) impose material limitations on the ability of Parent effectively to
exercise full rights of ownership of the Shares, including the right to vote the
Shares purchased by it on all matters properly presented to the Company's
stockholders;
(b) (i) the representations and warranties of the Company set forth in this
Agreement shall not be true and correct in any material respect as of the date
of this Agreement and as of consummation of the Offer as though made on or as of
such date (except for representations and warranties made as of a specified
date) but only if the respects in which the representations and warranties made
by the Company (without giving effect to any "materiality" limitations or
references to "material adverse effect" set forth therein) are inaccurate would
in the aggregate have a Company Material Adverse Effect, (ii) the Company shall
have failed to comply with its covenants and agreements contained in this
Agreement in all material respects which failure is likely to have a Company
Material Adverse Effect and, with respect to any breach or failure described in
clause (b)(i) or (b)(ii) above that can be cured, the breach or failure shall
not have been cured prior to ten (10) Business Days after Parent has furnished
the Company written notice
<PAGE>
of such breach or failure, or (iii) there shall have occurred any events or
changes which have had or which are likely to have a Company Material Adverse
Effect;
(c) the Board of Directors of the Company shall have withdrawn, or modified
or changed in a manner adverse to Parent (including by amendment of the Schedule
14D-9), its recommendation of the Offer, this Agreement or the Merger, or
recommended another proposal or offer for the acquisition of the Company, or the
Board of Directors of the Company, shall have resolved to do any of the
foregoing;
(d) this Agreement shall have terminated in accordance with its terms; or
(e) there shall have occurred and continue to exist (i) any general
suspension of, or limitation on prices for, trading in securities on the NYSE
(other than a shortening of trading hours or any coordinated trading halt
triggered solely as a result of a specified increase or decrease in a market
index), (ii) the declaration of any banking moratorium or any suspension of
payments in respect of banks, or any limitation (whether or not mandatory) by
any Governmental Entity on, or other event materially adversely affecting, the
extension of credit by lending institutions in the United States, or (iii) a
commencement of a war or armed hostilities directly involving the United States,
which has and continues to have a material adverse effect on the trading of
securities on the NYSE;
which in the reasonable judgment of Parent, in any such case, makes it
inadvisable to proceed with the Offer or the acceptance for payment of or
payment for the Shares.
The foregoing conditions, other than condition (i) above, are for the sole
benefit of Parent and may be waived by Parent, in whole or in part at any time
and from time to time, in the sole discretion of Parent. The failure by Parent
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, except as otherwise provided in
this Agreement.
2
<PAGE>
Exhibit (c)(2)
AMENDED AND RESTATED
MARKETING AGREEMENT
BETWEEN AND AMONG,
INTERNATIONAL TECHNOLOGY CORPORATION
FLUOR DANIEL GTI, INC.
AND
FLUOR DANIEL, INC.
October 27, 1998
1
<PAGE>
THIS AMENDED AND RESTATED MARKETING AGREEMENT (this "Agreement") is entered into
effective as of the 27TH day of October, 1998.
BETWEEN AND AMONG:
INTERNATIONAL TECHNOLOGY CORPORATION, a corporation organized
under the laws of the State of Delaware, having its principal
office at 2790 Mosside, Monroeville, Pennsylvania ("IT"),
FLUOR DANIEL GTI, INC., a corporation organized under the laws
of the State of Delaware, having its principal office at 100
River Ridge Drive, Norwood, Massachusetts ("FDGTI"),
AND FLUOR DANIEL, INC. a corporation organized under the laws of
the State of California, having its principal office at 3353
Michelson Drive, Irvine, California, ("Fluor Daniel").
WHEREAS, FDGTI and Fluor Daniel previously entered into a Marketing Agreement
dated May 10, 1996 (the "Original Agreement");
WHEREAS, the Parties desire to amend and restate the Original Agreement in its
entirety by executing this Agreement, which shall become effective only upon the
consummation of that certain cash tender offer for the shares of common stock of
FDGTI proposed by IT (the "Tender Offer");
WHEREAS, the Parties wish to continue and expand upon the spirit of cooperation
which has developed between the Parties under the Original Agreement and which
has resulted in significant revenues to FDGTI and important benefits to Fluor
Daniel and its customers;
WHEREAS, Fluor Daniel recognizes that following the consummation of the Tender
Offer, FDGTI will have available the increased resources of IT, which has
greater scale and skills than FDGTI alone, and Fluor Daniel wishes to maximize
the strategic value of a relationship with FDGTI and IT;
WHEREAS, the Parties wish to strengthen the exclusive joint marketing efforts
which have been underway under the Original Agreement, and to that end wish to
establish a Steering Committee of senior management of both Parties to maintain
a high-level dialogue on these subjects; and
WHEREAS, the Parties wish to enter into this Agreement to set forth the basis
upon which such Parties will continue to engage in the global conduct of the
environmental services business on the one hand and the engineering and
construction services business on the other hand, and the basis for providing
continued mutual support and assistance in conducting their own respective
businesses.
NOW, THEREFORE, in consideration of the above premises and mutual covenants
contained herein, the Parties have agreed as follows:
2
<PAGE>
1. DEFINITIONS
-----------
The following terms as used in this Agreement shall have the meanings set forth
below:
1.1 "Affiliate" shall mean any corporation or other legal entity of which a
Party (either alone or together with other Affiliates of that Party) owns,
directly or indirectly, more than 50% of the stock or other equity
interests the holders of which are ordinarily and generally, in the absence
of contingencies or other understandings, entitled to vote for the election
of a majority of the board of directors or governing body.
1.2 "Contract Support Services" shall mean services provided by one Party
to or on behalf of the other Party, in connection with a project being
performed for a client, but which by themselves do not constitute a scope
of work within the project being performed.
1.3 "DOE Management and Operations/Operating and Maintenance/Management and
Integration (M&O/O&M/M&I) Projects" shall mean projects involving the
management and operation, and/or management integration of sites and
facilities and environmental engineering services for the U.S. Department
of Energy or any successor agencies.
1.4 "Engineering and Construction Business" and "Engineering and
Construction Services" shall mean the providing of feasibility studies,
conceptual design, detailed design, engineering, procurement, project and
construction management, construction, maintenance, plant operations,
technical, project finance, quality control, start-up assistance, site
evaluation, site location, asset optimization, licensing and consulting
with respect to actual or proposed sites or facilities.
1.5 "Environmental Business" or "Environmental Services" shall mean the
providing of investigation, evaluation, design, feasibility studies,
management and pollution prevention, project management, remediation,
permitting, quality control, start-up assistance, licensing and
consulting services (including incidental project finance,
procurement, construction and maintenance) relating to (i) the
treatment of groundwater, wastewater, soil and hazardous waste, or
(ii) air emissions controls; provided, however, that such terms shall
not include:
(a) the Excluded Projects;
(b) DOE Management and Operations/Operating and Maintenance/
Management and Integration (M&O/O&M/M&I) Projects;
(c) Infrastructure projects related to government or industrial water
supply, water treatment, wastewater treatment or pollution
control facilities; and
(d) Facilities that are built due to environmental drivers but that
are mainly capital plant investments by a client, such as
waste-to-energy, waste recycle and clean air emission process
upgrades.
3
<PAGE>
1.6 "Excluded Projects" shall mean those projects listed on Exhibit A
attached hereto and made a part hereof.
1.7 "Fluor Daniel Group" shall mean Fluor Daniel and each of its Affiliates
1.8 "FDGTI Group" shall mean FDGTI and each of its Affiliates.
1.9 "Good Faith" shall have the meaning set forth in Section 2.1.
1.10 "Intercompany Services Agreement" shall mean the Intercompany
Services. Agreement of even date herewith attached hereto as Exhibit G.
1.11 "IT Group" shall mean IT and each of its Affiliates.
1.12 "Marketing Agreement" or "Agreement" shall mean the present Agreement
together with its Exhibits, Schedules and any amendments thereof.
1.13 "Overhead and Proposal Support" shall have the meaning set forth in
Section 3.1.
1.14 "Party" means either FDGTI and IT on the one hand or Fluor Daniel on
the other hand, depending on the context. "Parties" means all of them.
1.15 "Project Services" shall mean services provided by one Party to or on
behalf of the other Party which constitute a scope of work within a project
being performed for a client.
1.16 "Steering Committee" shall have the meaning set forth in Section 2.6
1.17 The Exhibits to this Marketing Agreement are the following:
Exhibit A Excluded Projects
Exhibit B Ongoing FDGTI Services to Fluor Daniel
Exhibit C Ongoing Fluor Daniel Services to FDGTI
Exhibit D Overhead Support Services and Commercial Contract
Support - Billing Terms
Exhibit E Commercial Project Services - Billing Terms
Exhibit F Government Project Services - Billing Terms
Exhibit G Intercompany Services Agreement
Exhibit H Co-located Offices
2. BUSINESS PURPOSE
----------------
2.1 Environmental Services Worldwide. The Parties agree that the purpose of
--------------------------------
this Marketing Agreement is to establish the respective rights, roles and
responsibilities of the Parties and their Affiliates with regard to the
pursuit of the Environmental Business on a worldwide basis. The Parties
agree to enter into this Agreement and to work together during the term of
this Agreement in Good Faith and use commercially-reasonable efforts
4
<PAGE>
to provide Environmental Services to their respective clients. "Good Faith"
shall mean the Parties shall abide by a standard of good faith and fair
dealing in all aspects of their business relationship and dealings with
each other, including with respect to the performance of their respective
obligations and the exercise of their respective rights under the
Agreement.
2.2 Responsibilities. The Parties agree that, subject to the terms of this
Agreement:
(a) as between the Fluor Daniel Group and the IT Group, the IT Group
shall have primary responsibility for the marketing and execution
of the Environmental Business, and the Fluor Daniel Group shall
have primary responsibility for the marketing and execution of
Engineering and Construction Services.
(b) Fluor Daniel, on its behalf and on behalf of the Fluor Daniel
Group, will promote the use of the IT Group for Environmental
Services that are related or incidental to its Engineering and
Construction Business, provided that (i) the use of the IT Group
is not objected to by the client, (ii) the IT Group has adequate
available personnel and other resources to timely and
satisfactorily perform the work, and (iii) the IT Group proposed
commercial terms are competitive with the market. For purposes of
this Agreement, Fluor Daniel will evaluate the competitiveness of
the IT Group's commercial terms by comparing them to terms and
conditions of other providers of Environmental Services of the
same quality and scope as the IT Group in the location where the
services are to be provided, and reviewing them with the IT
Group. The Steering Committee shall attempt to resolve any
disagreements that may arise under this paragraph (b). In the
event that anyone in the Fluor Daniel Group refuses to promote
the use of the IT Group for such Environmental Services for a
particular project because of one of the reasons set forth in
clauses (i), (ii) or (iii) in this paragraph (b), the IT Group
may promptly appeal such decision to the Steering Committee for
reconsideration. The Steering Committee shall decide any such
appeal promptly, or if practical, before the proposal or bid on
the subject project is due.
(c) With respect to the types of projects referred to in paragraph
(b), (c) and (d) of Section 1.5, the Parties agree that either
Party may participate without the other in the types of projects
set forth therein. The Parties recognize that there are potential
benefits from working together in these areas, and therefore, the
Parties shall explore mutually beneficial ways in which a Party
may involve the other Party in such projects.
(d) The IT Group shall commit in Good Faith and use its commercially
reasonable efforts to perform such Environmental Services as may
be requested by Fluor Daniel, but shall not be obligated to
provide such
5
<PAGE>
Environmental Services if there is a valid business reason for
its refusal to perform such services.
(e) With any common clients the IT Group shall have the marketing
lead for projects that primarily involve Environmental Services
and Fluor Daniel shall have the marketing lead for projects that
primarily involve Engineering and Construction Services, except
as otherwise provided in Section 2.7, concerning ongoing
activities.
2.3 Fluor Daniel Notification. Fluor Daniel shall notify its management and
-------------------------
the management of its Affiliates of the marketing relationship formed
between the Parties and of the obligations of the Fluor Daniel Group under
this Agreement. Periodically throughout the term of this Agreement, Fluor
Daniel will communicate with its management and the management of its
Affiliates to remind them of the marketing relationship formed between the
Parties and of the obligations of the Fluor Daniel Group under this
Agreement.
2.4 IT Notification. Within 30 days of the date of this Agreement, IT shall
---------------
notify its management and the management of its Affiliates of the marketing
relationship formed between the Parties and of the obligations of the IT
Group under this Agreement. Periodically throughout the term of this
Agreement, IT will communicate with its management and the management of
its Affiliates to remind them of the marketing relationship formed between
the Parties and of the obligations of the IT Group under this Agreement.
2.5 Prior Review of Notification. Prior to either Party forwarding a
----------------------------
written communication to their respective management pursuant to Sections
2.3 and 2.4 above, the Party preparing to forward the communication shall
give the other Party a reasonable opportunity to review and comment on the
communication.
2.6 Steering Committee. Fluor Daniel and IT shall each designate two senior
------------------
executives to serve on a steering committee for joint efforts under this
Agreement (the "Steering Committee"). The initial members of the Steering
Committee shall be Dave Myers, Ron Peterson, Jim Mahoney and Phil
Strawbridge. The Steering Committee shall meet periodically during the term
of the Agreement to review the joint efforts of the Parties under this
Agreement, to determine any future course of cooperation between the
Parties and to make such other determinations as they may be called upon to
make pursuant to the terms of this Agreement. The Steering Committee shall
also discuss joint marketing opportunities and initiatives and may delegate
to other executives within their respective organizations the
responsibility to implement such opportunities and initiatives. The members
of the Steering Committee and their delegates shall use commercially
reasonable efforts to keep the others advised of their respective marketing
efforts with common clients and, with respect to the foregoing, establish
mutually acceptable communications procedures. The Steering Committee shall
attempt to reach consensus on all matters, and in the absence of a
consensus, shall make determinations by
6
<PAGE>
majority vote. For the first three (3) months following the Effective Date,
these representatives shall meet at least once a month. Following that
initial period, the Steering Committee shall meet at least once each
quarter during the first year and at least twice a year thereafter.
2.7 Ongoing Activities
------------------
(a) Services to Fluor Daniel. Prior to the effective date of this
------------------------
Agreement, FDGTI provided Environmental Services to members of
the Fluor Daniel Group. Attached as Exhibit B is a summary of
---------
substantially all of the ongoing projects in which FDGTI is
providing Environmental Services to the Fluor Daniel Group,
including contract numbers and contact persons. From the
effective date of this Agreement, and except as otherwise
provided in Exhibit B, the terms and conditions previously agreed
---------
to between the Parties for all projects ongoing shall govern. In
the event the terms and conditions of this Agreement are not
inconsistent with such previously agreed to terms and conditions,
the terms set forth in this Agreement shall apply. The Steering
Committee shall attempt to resolve any disagreements that may
arise under this paragraph (a).
(b) Services to FDGTI. Prior to the effective date of this Agreement,
-----------------
the Fluor Daniel Group provided Engineering and Construction
Services and certain Environmental Services to FDGTI. Attached as
Exhibit C is a summary of substantially all of the ongoing
---------
projects in which the Fluor Daniel Group is providing Engineering
and Construction Services or Environmental Services to FDGTI,
including contract numbers and contact persons. From the
effective date of this Agreement, and except as otherwise
provided in Exhibit C, the terms and conditions previously agreed
---------
to between the Parties for all ongoing projects shall govern. In
the event the terms and conditions of this Agreement are not
inconsistent with such previously agreed to terms and conditions,
the terms set forth in this Agreement shall apply. FDGTI wishes
to self perform all ongoing administrative support services
presently provided by Fluor Daniel and to that end agrees to
transition such services to FDGTI or its designee promptly, and
in no event later than six (6) months following the date of this
Agreement. During such transition, the provisions of Section 3.1
shall apply to such administrative support services. The Steering
Committee shall attempt to resolve any disagreements that may
arise under this paragraph (b).
(c) Existing Projects. The Parties understand that a number of the
-----------------
clients of the FDGTI Group view the previous involvement of the
Fluor Daniel Group in the business of the FDGTI Group as a
benefit to such clients. The Parties agree that it is in the best
interests of the clients and the Parties to minimize disruption
to such clients that may arise from the sale by the
7
<PAGE>
Fluor Daniel Group of its ownership interest in FDGTI.
Accordingly, the Parties agree that they will work together in
Good Faith to minimize any such possible disruption and to use
commercially reasonable efforts to maintain for FDGTI its
existing projects. Fluor Daniel shall not, however, be required
by the terms of this Agreement to give any corporate guarantees
or other contractual assurances to such clients.
2.8 Possible Acquisitions.
---------------------
(a) Restrictions on Environmental Acquisitions. The Fluor Daniel
------------------------------------------
Group shall not, during the term of this Agreement, acquire,
merge with, form a joint venture with or enter into a
business combination with any entity which is engaged
primarily in performing Environmental Services, without the
prior written consent of FDGTI; provided, however, that the
-------- -------
Fluor Daniel Group shall be permitted on a case-by-case
basis to team, joint venture or contract with any such
entity on any specific project (i) which the FDGTI Group
fails or refuses to perform or (ii) where the conditions set
forth in Section 2.2, paragraph (b), clauses (i), (ii) and
(iii) are not met.
(b) Non-Environmental Acquisitions. It is not the present
------------------------------
intention of Fluor Daniel to acquire an Environmental
Services capability; however, in the event that during the
term of this Agreement, the Fluor Daniel Group consummates
an acquisition, merger, or consolidation ("Acquisition")
with any entity which is not engaged primarily in performing
the Environmental Services, but which performs Environmental
Services, the Fluor Daniel Group shall be permitted to
perform Environmental Services by, through or with such
entity instead of the FDGTI Group, which shall not be deemed
a breach or violation of this Agreement. Following any such
Acquisition, this Agreement shall continue on a
non-exclusive basis, and contracts in effect on the date of
the closing of such Acquisition between the FDGTI Group and
the Fluor Daniel Group shall continue, unless otherwise
agreed.
(c) Discussions on Divestiture. In the event the Fluor Daniel
--------------------------
Group commences preparation to consummate such an
Acquisition, it shall, subject to the limitations of any
applicable confidentiality agreements, discuss such
acquisition with the Steering Committee on a confidential
basis with a view to determining whether IT would have any
interest in considering the acquisition of such portion of
the target business which performs Environmental Services,
other than services for the United States Government, (the
"Environmental Portion") if any. If the Fluor Daniel Group
consummates any such Acquisition, it shall, for a period of
60 days following the entering into of a written agreement
to consummate such Acquisition, engage in Good Faith
discussions with IT regarding the divestiture and sale of
the Environmental Portion to IT. Such discussions
8
<PAGE>
shall be exclusively with IT during such period unless
otherwise agreed (the "No-shop Period"). Following the
expiration of the No-shop Period, unless IT and the Fluor
Daniel Group have reached an agreement, the Fluor Daniel
Group shall, for a period of 120 days, engage in a Good
Faith effort to divest the Environmental Portion on
commercially reasonable terms (in its discretion). In the
event that the Fluor Daniel Group has not within such
120-day period (a) entered an agreement to sell the
Environmental Portion, or (b) decided to liquidate or phase
out the business of the Environmental Portion, then the
Fluor Daniel Group shall give consideration to any request
by IT through the Steering Committee that the terms and
conditions of this Agreement should be adjusted to avoid an
inequitable hardship to IT resulting from any material
diminution of value of this Agreement arising from such
Acquisition; provided, however, that no such adjustment
shall be made without the express written agreement of all
Parties.
3. INTERCOMPANY SERVICES
---------------------
3.1 Overhead and Proposal Support Services. Subject to
--------------------------------------
availability of qualified personnel, each Party agrees to provide to the
other Party, during the first six (6) months of the term of this Agreement,
the services of its employees (including technical, financial and
administrative personnel) and proposal support as may be reasonably
requested by the other Party in connection with activities of a general
nature which are not related to a specific contract or in connection with a
proposal ("Overhead and Proposal Support"), upon the terms and conditions
set forth in Exhibit D attached. Overhead and Proposal Support shall
---------
include without limiting the generality of the foregoing, the following
administrative services, as may be requested by a Party from time to time:
Insurance services, accounting services, payroll services, legal services,
real estate services and information technology services.
3.2 Contract Support. All Contract Support Services to be
----------------
provided by one Party to the other Party, shall be performed pursuant to
Work Releases issued pursuant to the terms of the Intercompany Services
Agreement and containing the commercial terms and conditions set forth in
Exhibit D, and in the case of government projects, in Exhibit F.
--------- ---------
3.3 Project Services. All Project Services to be provided
----------------
by one Party to the other Party shall be performed pursuant to Work
Releases issued pursuant to the terms of the Intercompany Services
Agreement and containing commercial terms and conditions set forth in
Exhibit E, and in the case of government projects in Exhibit F.
--------- ---------
3.4 Facilities. Attached hereto as Exhibit H is a list of
---------- ---------
offices of FDGTI which are co-located with offices of Fluor Daniel,
including a summary of applicable lease terms. Except as otherwise agreed
on a case-by-case basis, FDGTI shall relocate such offices at its expense
out of the offices of Fluor Daniel in an orderly and expeditious manner
following the execution of this Agreement, and in no event later than six
(6) months following the date hereof; provided, however, that Fluor Daniel
shall make available to FDGTI during the term of this Agreement, on
commercially reasonable license terms,
9
<PAGE>
office space for no more than five employees of FDGTI in areas designated
by Fluor Daniel, on the premises of Fluor Daniel, but outside the card-
keyed access areas, where practical at the following locations: Greenville,
S.C., Marlton, N. J., Sugar Land, TX. and Irvine, CA. Fluor Daniel shall
cooperate in the relocation of FDGTI offices and corresponding FDGTI
employees.
3.5 Other Activities. Each Party understands that the other Party will
----------------
be involved in other activities and undertakings not within the scope of
this Marketing Agreement. The Parties hereby agree that the execution of
this Marketing Agreement and the assumption by each of the Parties of its
duties hereunder shall be without prejudice to its rights to have such
other interests and activities and to receive and enjoy the profits or
compensation therefrom. Except as otherwise provided herein, the Parties
may engage in or possess any interest in any other business, undertaking,
or venture of any nature or description independently or with others and
neither Party shall have any right by virtue of this Marketing Agreement in
and to such business, undertaking or venture of the other Party or the
income or profits derived therefrom.
4. LIABILITIES
-----------
4.1 No Agency or Partnership; Indemnity. Neither Party shall hold
-----------------------------------
itself out as being the agent, representative, employee or the
principal of the other Party. This Marketing Agreement does not
constitute either Party the agent of the other, nor does it create a
partnership, a consortium, an association, a joint venture, or any form
of juristic person or entity. Neither Party shall have any authority or
right to assume or create obligations of any kind or nature, express or
implied, on behalf of, or in the name of the other Party, not to accept
service of any legal process of any kind addressed to or intended for
the other Party, nor to bind the other Party in any respect, without
the specific prior written authorization of the other Party. If either
Party acts in violation of the foregoing, said Party hereby covenants
to indemnify and hold harmless the other Party from and against any and
all claims, demands, losses, damages, liabilities, law suits, and other
proceedings, judgments and awards, and costs and expenses (including,
but not limited to, reasonable attorneys' fees) arising directly or
indirectly in whole or in part out of the breach of this Section 4.1 by
such Party, whether committed by the indemnifying Party, its employees,
agents, successors, assigns, or its Affiliates.
4.2 Personal Injury or Property Damage; Indemnity. Unless as otherwise
---------------------------------------------
required by any prime or subcontract pertaining to a project, each
Party shall indemnify and hold harmless the other Party from and
against any and all claims, demands, losses, damages, liabilities,
lawsuits and other proceedings, judgments and awards, and the costs and
expenses (including, but not limited to, reasonable attorneys' fees) of
any action resulting from the death of any person, or for damage or
destruction of property, but only to the extent resulting solely from
the negligent acts or omissions of such Party .
4.3 Waiver of Certain Damages. Unless as otherwise required by any
-------------------------
prime or subcontract pertaining to a project. in no event shall either
Party ever be liable to, or required to provide indemnity to, the other
Party for any incidental, special, consequential or punitive damages of
the other Party, or its Affiliates, including without limitation,
10
<PAGE>
liability for loss of profits or business interruption, however the
same may be caused.
4.4 Proposals and Contracts; Indemnity. Unless as otherwise required
----------------------------------
by any prime contract or subcontract pertaining to a project, each
Party shall be solely responsible for the accuracy and completeness of
information and representations supplied by each Party and
incorporated in any proposal, prime or sub contract, including, but
not limited to, cost or pricing data, materials, specifications, and
certifications, and each Party agrees to release defend, indemnify and
hold the other harmless from and against any and all claims,
liabilities and causes of action arising out of or relating to the
provision of such information and/or representations.
4.5 Applicability of Indemnities. Indemnities against, releases from
----------------------------
and limitation on liability expressed in Sections 4.1 through 4.4
shall apply even in the event of the fault, negligence or strict
liability of the Party indemnified or released or whose liability is
limited.
4.6 Exclusive Rights. The Parties make no other representations,
----------------
covenants, warranties or guarantees, express or implied, other than
those set forth in this Marketing Agreement, the Intercompany Services
Agreement or in a Work Release (as defined in the Intercompany
Services Agreement) or an applicable purchase order or subcontract.
The Parties' rights, and responsibilities with respect to the matters
set forth in this Marketing Agreement, shall be exclusively those set
forth in this Marketing Agreement, the Intercompany Services Agreement
or in a Work Release.
5. CONFIDENTIALITY
---------------
5.1 Restrictions on Use and Disclosure. Each Party covenants and
----------------------------------
agrees it will not, and it will not permit its Affiliates to, directly
or indirectly, or in any capacity whatsoever, divulge or disclose
Confidential Information (as hereinafter defined), in whole or in
part, to any person or entity, except to the extent such divulgence or
disclosure is specifically permitted by the Originator (as hereinafter
defined) or is required by law. The Recipient (as hereinafter defined)
shall use Confidential Information for the purpose of carrying out the
activities that are the subject of this Agreement, and the
Intercompany Services Agreement, and for no other purpose.
5.2 Confidential Information Defined. As used herein, the term
--------------------------------
"Confidential Information" shall mean: all technical, economic or
descriptive information, data, concepts, or know-how disclosed to a
Party, including any officers, directors, managers, partners or
employees of such Party or any of such Party's Affiliates (the
"Recipient") by the other Party (the "Originator") (1) in written or
documentary form marked "Confidential" or with words of similar
import, or (2) in an oral presentation or visual demonstration and
identified as confidential at the time of such disclosure, and
subsequently confirmed in written or tangible form marked
"Confidential", or with words of similar import, except any portion of
such information which:
11
<PAGE>
(i) the Recipient can show was in its possession prior to the earliest
disclosure by the Originator, provided that the Recipient has the
right of free and unlimited disclosure thereof; or
(ii) is presently or hereafter becomes a part of the public knowledge
or literature without default by the Recipient of its obligations
pursuant to this Agreement; or
(iii) the Recipient can show was developed by the Recipient from
independent information not subject to restrictions of
confidentiality; or
(iv) is or has been disclosed to the Recipient by a third party, so
long as Recipient does not know or have reason to know such third
party acquired that information directly or indirectly from the
Originator under an obligation of confidentiality, provided
Recipient's use of such information is in accordance with the
terms under which it is received.
5.3 Disclosure to Employees. The Recipient shall use all reasonable
-----------------------
efforts to (i) limit disclosure of Confidential Information within its
organization to only those employees who need to use such Confidential
Information for the purpose authorized in Section 5.1, and who are
obligated to the Recipient by a secrecy agreement with terms concerning
disclosure and use at least as restrictive as those herein in a form
acceptable to the disclosing Party, and (ii) advise each of those
employees of Recipient's obligations under this Agreement.
5.4 No License. Nothing contained herein shall be construed to grant
----------
Recipient any immunity or license under any patent or other intellectual
property right.
5.5 Term of Non-Disclosure. The Parties' obligations concerning
----------------------
non-disclosure and the use of Confidential Information contained in this
Section 5 shall continue for three (3) years from the termination of this
Agreement and shall then terminate.
6. USE OF FLUOR DANIEL NAME
------------------------
Fluor Daniel's name and logo are proprietary to Fluor Daniel. The right
of FDGTI or any member of the FDGTI Group to continue to use the Fluor
Daniel name (or any derivation thereof) shall cease upon the consummation
of the Tender Offer and the Fluor Daniel name shall be removed from all
company documents (including without limitation, its corporate name as
reflected in its charter documents) promptly and in any event within 30
days following such closing and all future use is hereby prohibited. No
further notice of Fluor Daniel's rights pursuant to this Article is
required. FDGTI shall be allowed to use the name "GTI" and "Groundwater
Technology" following the consummation of the Tender Offer. The Parties
acknowledge that the change in ownership of FDGTI will require the
written consent of certain parties to certain existing contracts with
FDGTI and its Affiliates, including certain United States government
agencies, and may require FDGTI to apply for certain permits and licenses
domestically and internationally in order
12
<PAGE>
to allow the complete disentanglement of FDGTI and Fluor Daniel in these
areas. FDGTI agrees to promptly, and in no event later than 60 days
following consummation of the Tender Offer (or such shorter period as may
be required by contract or law), apply for all of such consents, licenses
and permits and to obtain the same as promptly as reasonably possible
thereafter and in no event later than one year following the date of this
Agreement. Fluor Daniel agrees to use commercially reasonable efforts to
cooperate with FDGTI to accomplish a prompt and orderly disentanglement.
Each party shall execute and deliver such further documents and take such
other actions as may be necessary or appropriate to consummate or implement
the disentanglement contemplated hereby or to evidence such events or
matters.
7. TERM, TERMINATION
-----------------
This Marketing Agreement shall commence and become effective only on the
date of consummation of the Tender Offer and the term of this Marketing
Agreement shall be four (4) years from such date, whereupon it shall lapse
and terminate without formality unless it has been extended by mutual
written agreement.
8. ASSIGNMENT, SUBCONTRACTING
--------------------------
Neither Party shall sell, assign or in any manner transfer, convey or
alienate (by operation of law or otherwise) its interest or part thereof in
this Marketing Agreement without first obtaining the written consent of the
other Party. This Marketing Agreement shall inure to the benefit of and be
binding upon the Parties, their successors, trustees, permitted assigns,
receivers and legal representatives, but shall not inure to the benefit of
any other person or entity.
9. AMENDMENTS
----------
No amendment of this Marketing Agreement or its Exhibits or Schedules shall
be of any force or effect unless reduced to writing and executed by the
Parties.
10. NOTICES
-------
All notices under this Marketing Agreement shall be given in writing and
shall be delivered by (i) certified or registered mail, postage prepaid,
return receipt requested, or (ii) reputable overnight commercial courier or
delivery service, or (iii) by facsimile transmission confirmed by certified
or registered mail or commercial courier or delivery service as follows:
(a) To: FLUOR DANIEL, INC.
3353 Michelson Drive
Irvine, California 92698
Attention: Ronald G. Peterson
Facsimile number: 949-975-2956
13
<PAGE>
(b) To: FLUOR DANIEL GTI, INC.
River Ridge Drive
Norwood, MA 02062
Attention: President
Facsimile number: 781-769-7992
(c) To: INTERNATIONAL TECHNOLOGY CORPORATION
K Street, N. W.
Washington, D.C. 20005
Attention: Philip Strawbridge
Facsimile number: 202-682-1171
or to such other address of which either Party shall have notified the other.
All notices shall be effective only upon receipt by the receiving Party.
11. GOVERNING LAW
-------------
This Marketing Agreement shall be governed by the laws of the State of
California without regard to conflict of law rules, whose courts, state or
federal, shall have sole and exclusive jurisdiction.
12. FORCE MAJEURE
-------------
A Party shall not be liable for non-performance or delay in performance
caused by any event reasonably beyond the control of such Party including,
but not limited to, hostilities, revolutions, riots, civil commotion,
national emergency, strikes, work stoppages, slowdowns, labor disputes,
lockouts, unavailability of supplies, epidemics, fire, flood, earthquake,
force of nature, explosion, embargo, or any other Act of God, or any law,
proclamation, regulation, ordinance, or other act or order of any court,
government, or governmental agency; provided, however, that this Article
shall not affect the liability of any Party for its failure to pay any sum
of money required by this Marketing Agreement.
13. SEVERABILITY
------------
In the event that any of the provisions of this Marketing Agreement are
held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
provision thereof and this Marketing Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein and the Parties shall to the fullest extent possible modify any such
provision to the extent required to carry out the general intention of this
Marketing Agreement and to impart validity thereto.
14. EFFECT OF WAIVERS
-----------------
No forbearance, indulgence, or relaxation or inaction by any Party at any
time to require performance of any provisions of this Marketing Agreement
shall in any way affect,
14
<PAGE>
diminish or prejudice the right of a Party to require performance of that
provision and any waiver or acquiescence by either Party in any breach of
any provision of this Marketing Agreement shall not be construed as a
waiver or acquiescence in any continuing or succeeding breach of such
provision, a waiver or an amendment of the provision itself or a waiver of
any right under or arising out of this Marketing Agreement or acquiescence
in or recognition of rights and/or positions other than as expressly
stipulated in this Marketing Agreement.
15. COUNTERPARTS
------------
This Marketing Agreement may be executed in any number of counterparts each
of which shall be deemed to be an original and all of which shall
constitute one and the same Marketing Agreement.
16. ENTIRE AGREEMENT
----------------
This Agreement (including any schedules, exhibits or annexes hereto) and
the Intercompany Services Agreement constitute the entire agreement, and
supersede all other prior agreements, understandings, representations and
warranties both written and oral, among the parties, with respect to the
subject matter hereof.
17. NO THIRD PARTY BENEFICIARIES.
----------------------------
This Agreement is not intended to confer upon any person or entity other
than the Parties any rights or remedies hereunder.
18. DISPUTE RESOLUTION.
------------------
(a) All claims, disputes, and other matters in question arising out of, or
relating to, this Agreement or the breach hereof, shall be decided
first, by the Steering Committee, second, if the Steering Committee
fails to resolve the matter within 90 days, by nonbinding mediation,
and third, if mediation fails to resolve the matter within 90 days, by
binding arbitration in accordance with the Construction Industry
Mediation and Arbitration Rules of the American Arbitration
Association then prevailing unless the parties mutually agree
otherwise. This agreement to mediate and arbitrate shall be
specifically enforceable under prevailing law.
(b) Notice of the demand for mediation and/or arbitration shall be filed
in writing with the other parties to this Agreement and with the
American Arbitration Association. The demand shall be made within a
reasonable time after the Steering Committee fails to resolve the
matter in question. In no event shall the mediation and/or arbitration
be made after the date when institution of legal or equitable
proceedings based on such claim, dispute, or other matter in question
would be barred by the applicable statute of limitation.
(c) The award rendered by the Steering Committee or mediation shall not be
binding upon the parties. The award rendered by the arbitration shall
be final and binding,
15
<PAGE>
and judgment may be entered upon it in accordance with applicable law
in any court having jurisdiction thereof.
(d) All mediation and arbitration shall be conducted in Irvine,
California.
IN WITNESS WHEREOF the Parties have signed this Marketing Agreement effective as
of the date first above written.
FLUOR DANIEL GTI, INC. FLUOR DANIEL, INC.
By: /s/Walter C. Barber By: /s/Ronald G. Peterson
-------------------- ---------------------
Name: Walter C. Barber Name: Ronald G. Peterson
-------------------- --------------------
Title: President Title: Group President
-------------------- --------------------
INTERNATIONAL TECHNOLOGY CORPORATION
By: /s/Anthony J. DeLuca
---------------------------
Name:
---------------------------
Title:
---------------------------
16
<PAGE>
Exhibit (c)(3)
INTERCOMPANY SERVICES AGREEMENT
Between
INTERNATIONAL TECHNOLOGY CORPORATION
FLUOR DANIEL, INC.,
and
FLUOR DANIEL GTI, INC.
October 27, 1998
<PAGE>
INTERCOMPANY SERVICES AGREEMENT
THIS AGREEMENT for the performance of services is executed and made effective as
of October 27, 1998, between International Technology Corporation, a Delaware
corporation, Fluor Daniel, Inc., a California corporation, and Fluor Daniel GTI,
Inc., a Delaware corporation
WITNESSETH:
WHEREAS, concurrently herewith the Parties have entered into an Amended and
Restated Marketing Agreement (the "Marketing Agreement") which sets forth the
basis upon which such parties shall engage in the conduct of the environmental
services business and the basis for providing mutual support and assistance in
conducting their own respective business;
WHEREAS, Fluor Daniel, Inc. and Fluor Daniel GTI, Inc. have previously entered
into an Intercompany Services Agreement, dated as of May 10, 1996 (the "Original
ISA");
WHEREAS, the Parties desire to amend and restate the Original ISA in its
entirety by executing this Agreement, which shall become effective only upon the
effectiveness of the Marketing Agreement; and
WHEREAS, the Parties by this Agreement now desire to establish certain of the
terms and conditions which shall apply to the provision of Contract Support
Services and Project Services by one Party to another Party.
NOW, THEREFORE, it is agreed as follows:
ARTICLE I - DESCRIPTION OF AGREEMENT
1.1 Documents Included
This Agreement consists of this contract document and the following
attachments:
Attachment I: Requests for Services on a cost reimbursable basis,
Attachment II: Request for Services on a fixed or unit price basis.
<PAGE>
1.2 Entire Agreement
----------------
This Agreement, together with the Marketing Agreement, sets forth the full and
complete understanding of the parties as of the date first above stated with
regard to the subject matter hereof, and it supersedes any and all agreements
and representations made or dated prior thereto, except for contracts between
the parties in existence on the date hereof.
1.3 Conflicting Provisions
----------------------
In the event of any conflict between the Marketing Agreement and this contract
document, the terms of the Marketing Agreement shall control. In the event of
any conflict between this contract document and any of the Attachments hereto,
the terms and provisions of this contract document shall control. In the event
of any conflict among the Attachments, the Attachment of the latest date shall
control. In the event of any conflict between this Agreement and any Requests
for Services issued pursuant to Section 2, this Agreement shall control.
1.4 Definitions
-----------
Unless specifically provided otherwise herein, all capitalized terms used herein
shall have the meaning described to such term in the Marketing Agreement.
ARTICLE II - SCOPE OF SERVICES
- ------------------------------
2.1 Description of Work, Requests for Services
------------------------------------------
As and when required pursuant to the terms of the Marketing Agreement, a Party
shall perform Project Services and/or Contract Support Services (the "Services")
in accordance with a written Request for Services in a Work Release issued by
the Parties from time to time during the term of this Agreement, specimen forms
of which are attached hereto as Attachment I and Attachment II, to which may be
------------ -------------
attached plans, drawings and specifications governing such services. Such
Requests for Services shall make specific reference to this Agreement and shall
be subject to performing Party's written acceptance, and performing Party shall
accept or reject a Request for Services as promptly as practicable under the
circumstances.
2.2 Work Release
------------
Attachment I shall be used for services provided on a cost reimbursable basis
- ------------
and Attachment II shall be used for services provided on a fixed or unit price
-------------
basis. A Work Release, when accepted by the Parties, shall be binding upon the
Parties hereto and shall incorporate by reference all of the terms and
conditions hereof, and the Marketing Agreement. In addition to the description
of the Services to be performed by the performing Party, a Work Release shall
set forth the performing Party's compensation for the services and the date on
which such services are to be completed. A Work Release may vary the terms of
this Agreement only when the Work Release expressly so states and sets forth the
particular paragraph hereof that is to be varied, and any such variations shall
apply only to the Work Release in which they are included.
3
<PAGE>
A performing Party, by accepting a Work Release, represents that it has
carefully inspected the Work Release along with any attached plans, drawings and
specifications, and has called the other Party's attention to any error,
omission and question of intent associated with the Work Release. All such
questions shall be resolved to the satisfaction of the Parties prior to
execution of the Work Release.
ARTICLE III - METHOD OF PERFORMANCE
- -----------------------------------
The performing Party shall perform its Services as an independent contractor in
accordance with good engineering and construction practices, applicable laws and
regulations. Except as otherwise specifically provided in the Work Release, the
performing Party shall perform Project Services in accordance with the Prime
Contract, the terms and conditions of which are incorporated in the applicable
Work Release by reference for any such Project Services as if copied therein in
full. To the extent that the provisions of the Prime Contract are applicable to
the performing Party, the requesting Party shall provide the performing Party
with a copy of the Prime Contract (if permitted pursuant to the terms of the
Prime Contract) and, if the Prime Contract has been provided, the performing
Party represents that it is totally familiar with the terms of the Prime
Contract and agrees to be bound by the same.
ARTICLE IV - COMPENSATION
- -------------------------
The receiving Party agrees to pay the performing Party a total compensation
specified in the Work Release and such compensation shall not be subject to
adjustment for any reason except as provided for in Section VI hereof
ARTICLE V - EXCLUSIONS, LIMITATIONS
- -----------------------------------
To be determined as provided in the Marketing Agreement.
ARTICLE VI - WORK CHANGES
- -------------------------
The requesting Party may, at any time by written notice to the performing Party,
require changes in the Request for Services under a Work Release, including
increases and decreases therein. In such event the compensation payable to the
performing Party shall be adjusted by the mutual agreement of the Parties except
where the increase or decrease in the Services under a Work Release involves
items of Services to be performed on a time and material or other cost basis, or
on a basis of units of Services, in which event the performing Party shall be
compensated on such basis for all such items or units of Services performed
under a Work Release, whether there is an increase or decrease in such items or
units of Services. No claim by the performing Party for extra, additional, or
different Services under a Work Release, or any extension of time within which
to complete such Services, will be allowed without the requesting Party's
written authorization and consent given prior to the undertaking of incurring of
any expense in connection therewith.
4
<PAGE>
In the event the Request for Services under a Work Release is decreased, the
performing Party shall be entitled to all expenses and costs reasonably and
necessarily incurred by the performing Party as a result of such decrease in the
Services. In no event, however, shall by the performing Party be entitled to any
prospective profits or reimbursement of prospective overhead, general expenses,
administrative expenses or damages (consequential or otherwise) because of such
decrease in the Request for Services.
ARTICLE VII - WARRANTY FOR CONTRACT RELATED SERVICES
- ----------------------------------------------------
To be determined as provided in the Marketing Agreement.
ARTICLE VIII - METHOD OF PAYMENT
- --------------------------------
Unless otherwise specifically provided in the Work Release, the performing Party
shall promptly furnish the requesting Party with a detailed invoice for all
costs which are reimbursable to the performing Party for the Services performed
during the preceding month.
Each invoice shall be supported by one (1) copy each of all payrolls, expense
reports and/or any other documentation reasonably necessary to substantiate the
billing payment. The requesting Party shall pay such invoices in full within
thirty (30) days after receipt of each invoice, provided however, that in the
case of Project Services, payment may be withheld by the requesting Party until
the corresponding payment has been made under the Prime Contract.
All invoices shall be marked with the following:
Contract Number:
Project Name:
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first hereinabove set forth.
FLUOR DANIEL GTI, INC. FLUOR DANIEL, INC.
By: /s/Walter C. Barber By: /s/Ronald G. Peterson
---------------------------- --------------------------
Name: Walter C. Barber Name: Ronald G. Peterson
---------------------------- --------------------------
Title: President Title: Group President
---------------------------- --------------------------
5
<PAGE>
INTERNATIONAL TECHNOLOGY CORPORATION
By: /s/Anthony J. DeLuca
----------------------------
Name: Anthony J. DeLuca
----------------------------
Title:
----------------------------
6
<PAGE>
ATTACHMENT I to Intercompany Services Agreement
- SPECIMEN -
WORK RELEASE NO. ________
_________________________("Subcontractor") agrees to perform and complete the
following services ("Services") for _____________________ ("Contractor")
at________("Facility"):
(INSERT REQUEST FOR SERVICES HERE)
Contractor agrees to pay Subcontractor a total compensation for its Services in
Accordance with Attachment I consisting of Subcontractor's actual Field, Home
Office and Subcontract costs, except as noted below. Field staff labor rates
apply when the employee is assigned to a field site for an assignment of six
months or longer in expected duration. Otherwise home office labor rates apply.
(a) Subcontractor's Field Staff Labor
---------------------------------
Subcontractor shall be paid hourly billing rates established as hourly
base compensation for its Field Staff plus an allowance as a percentage
of base compensation to give a total multiplier on base compensation of
_____________. This allowance is compensation for payroll taxes and
insurance, sick leave, holidays, vacation and other employee benefits
and burdens. Overtime to be paid with Contractor's prior written
approval.
(b) Subcontractor's home office labor
---------------------------------
Subcontractor shall be paid hourly billing rates established as hourly
base compensation for its Home Office Labor plus an allowance as a
percentage of base compensation to give a total multiplier on base
compensation of __________. This allowance is compensation for payroll
taxes and insurance, sick leave, holidays, vacation and other employee
benefits and burdens. Overtime to be paid with Contractors prior
written approval. Home office expenses shall be paid at actual cost,
subject to the provisions of Paragraph (d), below.
(c) Field Costs
-----------
Subcontractor shall be paid the actual costs of material, machinery,
equipment, temporary facilities, supplies, parts, and miscellaneous
services; travel and relocation expenses; field labor wages and
benefits, and other employer portion of payroll taxes and insurance;
taxes, excluding income taxes permits, testing and inspections;
subcontracts; insurance; repairs, construction tools and equipment,
freight; and all other direct field costs incurred in connection with
the work.
7
<PAGE>
(d) Unless agreed otherwise, standard charge schedules will be used for
computer and reproduction charges; all-in rates, or lump sum values may
be used where convenient and as agreed in writing between Contractor
and Subcontractor for other items such as:
- Payroll Burdens and Benefits on Field Labor
- Small Tools, Expendables and Consumables
- Construction Equipment
The Services shall be done in accordance with the terms and provisions of the
Intercompany Services Agreement between the parties dated October 27, 1998, all
of which are incorporated herein by reference.
Subcontractor agrees to promptly commence the Services and to complete them
by________________.
Contractor and Subcontractor shall each designate a representative to consent,
approve and otherwise act on behalf of the designating party under this Work
Release. The designated representatives are:
For Contractor: For Subcontractor:
By: ____________________ By: ____________________
Title: ____________________ Title: ____________________
Dated: ____________________ Dated: ____________________
8
<PAGE>
ATTACHMENT II to Intercompany Services Agreement
- SPECIMEN -
WORK RELEASE NO.
__________________("Subcontractor") agrees to perform and complete the following
services ("Services") for ______________("Contractor") at__________________
("Facility):
(INSERT REQUEST FOR SERVICES HERE)
GENERAL
Contractor agrees to pay Subcontractor for full and complete performance of the
Services, compliance with all terms and conditions of this Work Release shall be
in the total of Section 1.0, Lump Sum Portion and Section 2.0, Fixed Unit Price
Portion, described in more detail below.
1.0 LUMP SUM PORTION*
The breakdown of the Lump Sum Portion against individual items for payment is
detailed as follows:
<TABLE>
<CAPTION>
- -------------------------- ---------------------------------------------------------------- -------------------------
ITEM DESCRIPTION LUMP SUM
- -------------------------- ---------------------------------------------------------------- -------------------------
<S> <C> <C>
1.10 Treatment Demonstration $
- -------------------------- ---------------------------------------------------------------- -------------------------
1.20 Mobilization and Demobilization $
- -------------------------- ---------------------------------------------------------------- -------------------------
1.30 Temporary Parking, Office Facilities, and Fences
- -------------------------- ---------------------------------------------------------------- -------------------------
1.40 Decontamination Pad $
- -------------------------- ---------------------------------------------------------------- -------------------------
1.50 Surveying $
- -------------------------- ---------------------------------------------------------------- -------------------------
1.60 Bonding $
- -------------------------- ---------------------------------------------------------------- -------------------------
1.6.1 100 Percent of Performance Bond $
- -------------------------- ---------------------------------------------------------------- -------------------------
1.6.2 Firm Performance bond Rae $
- -------------------------- ---------------------------------------------------------------- -------------------------
1.6.3 100 Percent Payment Bond $
- -------------------------- ---------------------------------------------------------------- -------------------------
1.6.4 Firm Payment Bond Rate $
- -------------------------- ---------------------------------------------------------------- -------------------------
</TABLE>
2.0 FIXED UNIT PRICE PORTION*
The following Unit Prices are for payment for actual quantities in the event
that the need arises for the materials or services listed below and described
herein. Unit prices will be applied to the actual quantities furnished,
installed, and documented in conformance with the Contract Documents, and
payment shall be adjusted accordingly.
9
<PAGE>
* The items described are for illustrative purposes only. Different or
additional categories may be appropriate in a particular circumstance.
<TABLE>
<CAPTION>
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
UNIT ESTIMATED
ITEM DESCRIPTION UNITS PRICE QUANTITY TOTAL
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
<S> <C> <C> <C> <C> <C>
2.10 Site Clearing and Grubbing Acre $
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
2.20 Finish Grading and Seeding Acre $
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
2.30 Site Demolition Ton $
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
2.40 Decontamination Hour $
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
2.50 Scale Rental Month $
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
2.60 Stockpile and Backfill of
Decontaminated Debris Ton $
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
2.70 Off-Site Debris Disposal Ton $
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
2.80 Soil Borings Month $
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
2.90 Waste Treatment Reagents $
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
2.9.1 Reagent X Ton $
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
2.9.2 Reagent Y Ton $
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
2.9.3 Reagent Z Ton $
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
2.10 In-Situ Waste Treatment CY $
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
2.11 Waste Retreatment CY $
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
2.12 Treated Waste Disposal Ton $
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
2.13 Contaminated Water Disposal Kgal $
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
2.14 Non-Contaminated Material CY $
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
2.15 Imported Select Fill CY $
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
2.16 Temporarily Placed Gravel SY $
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
2.17 Stand-by time (as directed)
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
2.17.1 Hourly Stand-by time Hour $
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
2.17.2 Daily Stand-by Time Day $
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
2.18 Imported Gravel (Additive
Alternative) SY $
- --------------------- --------------------------------- ------------ ----------- ------------------ -----------------
</TABLE>
10
<PAGE>
3.0 ESTIMATED CONTRACT VALUE*
The Total Contract Value for performing all Services of the Work Release is
$______, that is (in Words) _________________Dollars. The price of this Work
Release shall be the sum of the Lump Sum Portion and the product of the actual
quantities of Unit Price work ordered and the Unit Prices for the work. It is
firm and fixed for the duration of the Work Release and is not subject to
escalation for any cause, unless authorized in writing by Contractor. Payment of
the Total Contract Value shall constitute full payment for performance of the
Services of the Work Release and covers all costs of whatever nature incurred by
Subcontractor in accomplishing the Services in accordance with the provisions of
this Work Release.
<TABLE>
<CAPTION>
- ------------------------------ -------------------------------------------------- ----------------- -----------------
SUBTOTAL TOTAL
ITEM DESCRIPTION AMOUNT AMOUNT
- ------------------------------ -------------------------------------------------- ----------------- -----------------
<S> <C> <C> <C>
3.1.1 Subtotal Lump Sum
- ------------------------------ -------------------------------------------------- ----------------- -----------------
3.1.2 Subtotal Unit Rate Items
- ------------------------------ -------------------------------------------------- ----------------- -----------------
3.10 Subtotal Lump sum and Unit Rate Items (3.1. and
3.12)
$
- ------------------------------ -------------------------------------------------- ----------------- -----------------
3.20 Total Bonding $
- ------------------------------ -------------------------------------------------- ----------------- -----------------
3.30 Approval Risk Contingency $
- ------------------------------ -------------------------------------------------- ----------------- -----------------
3.40 Market Competitive Fee $
- ------------------------------ -------------------------------------------------- ----------------- -----------------
3.50 Total Contract Value (total Items 3.1 and 3.2)
- ------------------------------ -------------------------------------------------- ----------------- -----------------
Total $
- ------------------------------ -------------------------------------------------- ----------------- -----------------
</TABLE>
The Contract Price as set forth herein includes all applicable and required
taxes, duties and fees.
The Services shall be done in accordance with the terms and provisions of the
Intercompany Services Agreement between the parties dated October 27, 1998, all
of which are incorporated herein by reference.
Subcontractor agrees to promptly commence the Services and to complete them
by__________.
11
<PAGE>
Contractor and Subcontractor shall each designate a representative to consent,
approve and otherwise act on behalf of the designating party under this Work
Release. The designated representatives are:
For Contractor: For Subcontractor:
By: ____________________ By: ____________________
Title: ____________________ Title: ____________________
Dated: ____________________ Dated: ____________________
12
<PAGE>
Exhibit H
- ---------
Co-located Offices
- ------------------
Location: Term:
- -------- ----
1. Irvine, CA Expires July 31, 1999*
2. Bakersfield, CA Terminable on 30 days' notice
3. Chicago, IL Terminable on 30 days' notice
4. Golden, CO Terminable on 30 days' notice
5. Greenville, SC Terminable on 30 days' notice
6. Marlton, NJ Terminable on 30 days' notice
7. Sugar Land, TX Terminable on 30 days' notice
- ---------------------
* Fluor Daniel will accommodate earlier termination
** - vacating this office by 10/31/98
13
