<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
MARINE TRANSPORT CORPORATION
AT
$7.00 NET PER SHARE
BY
SHILOH ACQUISITION, INC.
A WHOLLY OWNED SUBSIDIARY
OF
CROWLEY MARITIME CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, FEBRUARY 5, 2001, UNLESS THE OFFER IS EXTENDED.
The Offer is being made pursuant to the terms of an Agreement of Merger,
dated as of December 20, 2000 (the "Merger Agreement"), among Crowley Maritime
Corporation ("Parent"), Shiloh Acquisition, Inc. ("Purchaser") and Marine
Transport Corporation (the "Company").
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST
THE NUMBER OF SHARES (AS DEFINED HEREIN) THAT SHALL CONSTITUTE A MAJORITY OF THE
THEN OUTSTANDING SHARES ON A FULLY DILUTED BASIS (INCLUDING, WITHOUT LIMITATION,
ALL SHARES ISSUABLE UPON THE CONVERSION OF ANY CONVERTIBLE SECURITIES OR UPON
THE EXERCISE OF ANY OPTIONS, WARRANTS, OR RIGHTS) (THE "MINIMUM TENDER
CONDITION").
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING EACH OF
THE OFFER AND THE MERGER (EACH AS DEFINED HEREIN), ARE ADVISABLE AND FAIR TO,
AND IN THE BEST INTERESTS OF, THE COMPANY AND THE HOLDERS OF SHARES, HAS
APPROVED AND ADOPTED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
THEREBY, INCLUDING EACH OF THE OFFER AND THE MERGER, AND HAS RECOMMENDED THAT
THE HOLDERS OF SHARES ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE
OFFER.
------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either:
- complete and sign the accompanying Letter of Transmittal (or a manually
signed facsimile thereof) in accordance with the instructions in the
Letter of Transmittal and mail or deliver it together with the
certificate(s) evidencing tendered Shares, and any other required
documents, to the Depositary or tender such Shares pursuant to the
procedure for book-entry transfer set forth in Section 3; or
- request such stockholder's broker, dealer, commercial bank, trust company
or other nominee to effect the transaction for such stockholder.
Any stockholder whose Shares are registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact such broker,
dealer, commercial bank, trust company or other nominee if such stockholder
desires to tender such Shares.
A stockholder who desires to tender Shares and whose certificates
evidencing such Shares are not immediately available, or who cannot comply with
the procedure for book-entry transfer on a timely basis, may tender such Shares
by following the procedure for guaranteed delivery set forth in Section 3.
Questions or requests for assistance may be directed to the Information
Agent at its address and telephone numbers set forth on the back cover of this
Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of
Transmittal and the Notice of Guaranteed Delivery may be obtained from the
Information Agent.
January 5, 2001
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
SUMMARY TERM SHEET.......................................... i
INTRODUCTION................................................ 1
1. TERMS OF THE OFFER; EXPIRATION DATE................... 3
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES......... 4
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING
SHARES................................................. 5
4. WITHDRAWAL RIGHTS..................................... 7
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES............... 8
6. PRICE RANGE OF SHARES; DIVIDENDS...................... 10
7. CERTAIN INFORMATION CONCERNING THE COMPANY............ 10
8. CERTAIN INFORMATION CONCERNING PURCHASER AND PARENT... 12
9. FINANCING OF THE OFFER AND THE MERGER................. 13
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY;
THE MERGER AGREEMENT; THE CONFIDENTIALITY AGREEMENT... 13
11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY AFTER THE
OFFER AND THE MERGER.................................. 23
12. DIVIDENDS AND DISTRIBUTIONS........................... 25
13. POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR
SHARES, NASDAQ LISTING, MARGIN REGULATIONS AND
EXCHANGE ACT REGISTRATION............................. 26
14. CERTAIN CONDITIONS OF THE OFFER....................... 27
15. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS........ 28
16. FEES AND EXPENSES..................................... 30
17. MISCELLANEOUS......................................... 30
Schedule I -- Directors and Executive Officers of Parent
and Purchaser.......................................... S-1
</TABLE>
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SUMMARY TERM SHEET
This summary term sheet highlights selected information from this Offer to
Purchase, and may not contain all of the information that is important to you.
To better understand our offer to you and for a complete description of the
terms of the offer, you should read this entire Offer to Purchase and the
accompanying Letter of Transmittal carefully. Questions or requests for
assistance may be directed to the Information Agent at its addresses and
telephone numbers on the back cover of this Offer to Purchase.
WHO IS OFFERING TO BUY MY SECURITIES?
- We are Shiloh Acquisition, Inc., a newly formed Delaware corporation and a
wholly owned subsidiary of Crowley Maritime Corporation. We have been
organized in connection with this offer and have not carried on any activities
other than in connection with this offer.
- Crowley is primarily a family- and employee-owned company engaged in
integrated logistics, marine transportation and related services. Founded in
1892, Crowley has more than 100 offices in major ports and cities around the
world and has several operating subsidiaries.
WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THIS OFFER?
- We are seeking to purchase all the issued and outstanding shares of common
stock, par value $0.50 per share, of Marine Transport Corporation. See the
"Introduction" and Section 1.
HOW MUCH ARE YOU OFFERING TO PAY AND WHAT IS THE FORM OF PAYMENT?
- We are offering to pay $7.00 per share, net to each seller in cash and without
interest. See the "Introduction" and Section 1.
- If you tender your shares in the offer, you will not be obligated to pay
brokerage fees or commissions or, except as otherwise provided in Instruction
6 of the Letter of Transmittal, stock transfer taxes with respect to the sale
of your shares. See the "Introduction."
WHAT ARE THE MOST SIGNIFICANT CONDITIONS OF THE OFFER?
- We are not obligated to purchase any shares unless at least a majority of the
outstanding shares (on a fully diluted basis) are validly tendered and not
withdrawn prior to the expiration of the offer. See Sections 1 and 14.
- We are not obligated to purchase any shares if the Merger Agreement is
terminated by Marine Transport Corporation or Crowley in accordance with its
terms. See Section 10.
These and other conditions to our obligation to purchase shares tendered in the
offer are described in greater detail in Sections 1 and 14.
DO YOU HAVE FINANCIAL RESOURCES TO MAKE PAYMENT?
- Crowley will provide us with the funds necessary to purchase the shares in the
offer. See Section 9.
IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
- Because the form of payment consists solely of cash and all of the funding
will be provided from Crowley, and also because of the lack of any relevant
historical information concerning Shiloh Acquisition, Inc., we do not think
our financial condition is relevant to your decision to tender in the offer.
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
- You will have at least until 12:00 midnight, New York City time, on Monday,
February 5, 2001, to tender your shares of Marine Transport Corporation common
stock in the offer. If you cannot deliver everything
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that is required in order to make a valid tender by that time, you may be able
to use a guaranteed delivery procedure which is described in Section 3 of this
Offer to Purchase. See Section 3.
CAN THE OFFER BE EXTENDED, AND UNDER WHAT CIRCUMSTANCES?
- We expressly reserve the right, in our sole discretion, but subject to the
terms of the Merger Agreement between us, Crowley and Marine Transport
Corporation and applicable law, to extend the period of time during which the
offer remains open. We have agreed in the Merger Agreement that we may extend
the offer if certain conditions to the offer have not been satisfied or
waived.
- We may extend the offer for any period required or permitted by any rule,
regulation, interpretation or position of the Securities and Exchange
Commission or its staff applicable to the offer.
- We may provide a "subsequent offering period" during which stockholders whose
shares have not been accepted for payment may tender, but not withdraw, their
shares and receive the offer price of $7.00 per share. We are not permitted
under the federal securities laws to provide a subsequent offering period of
less than three or more than 20 business days. For more details on our ability
to extend the offer, see Section 1.
HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
- If we decide to extend the offer, we will inform Citibank, N.A., the
Depositary, of that fact, and will issue a press release giving the new
expiration date no later than 9:00 a.m., New York City time, on the next
business day after the day on which the offer was previously scheduled to
expire. See Section 1.
HOW DO I TENDER MY SHARES?
To tender your shares in the offer, you must:
- complete and sign the accompanying Letter of Transmittal (or a manually
signed facsimile of the Letter of Transmittal) in accordance with the
instructions in the Letter of Transmittal and mail or deliver it together
with your share certificates, and any other required documents, to
Citibank, the Depositary;
- tender your shares pursuant to the procedure for book-entry transfer set
forth in Section 3; or
- if your share certificates are not immediately available or if you cannot
deliver your share certificates and any other required documents to
Citibank prior to the expiration of the offer, or you cannot complete the
procedure for delivery by book-entry transfer on a timely basis, you may
still tender your shares if you comply with the guaranteed delivery
procedures described in Section 3.
UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
- You may withdraw previously tendered shares any time prior to the time that we
have accepted the shares pursuant to the offer. See Section 4.
HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
- To withdraw previously tendered shares, you must deliver a written or
facsimile notice of withdrawal with the required information to Citibank while
you still have the right to withdraw. If you tendered shares by giving
instructions to a broker or bank, you must instruct the broker or bank to
arrange for the withdrawal of your shares. See Section 4.
WHAT DOES MARINE TRANSPORT CORPORATION'S BOARD OF DIRECTORS THINK OF THE OFFER?
- The Board of Directors of Marine Transport Corporation has unanimously
determined that the Merger Agreement and the transactions contemplated
thereby, including each of the offer and the merger, are fair to, and in the
best interests of, the holders of shares, has approved, adopted and declared
advisable the
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Merger Agreement and the transactions contemplated thereby, and has
recommended that the holders of shares accept the offer and tender shares
pursuant to the offer.
WILL MARINE TRANSPORT CORPORATION CONTINUE AS A PUBLIC COMPANY?
- No. If the merger occurs, Marine Transport Corporation will no longer be
publicly owned. Even if the merger does not occur, if we purchase all the
tendered shares, there may be so few remaining stockholders and publicly held
shares that the shares may no longer be eligible to be traded through the
Nasdaq National Market System or any other securities market, there may not be
a public trading market for the shares and Marine Transport Corporation may
cease making filings with the SEC or otherwise cease being required to comply
with SEC rules relating to publicly held companies. See Section 13.
WILL THE TENDER OFFER BE FOLLOWED BY A MERGER IF ALL THE SHARES ARE NOT
TENDERED?
- If we accept for payment and pay for at least a majority of the outstanding
shares on a fully diluted basis, we intend to merge with and into Marine
Transport Corporation. If the merger occurs, Marine Transport Corporation will
become a wholly owned subsidiary of Crowley, and each share that remains
outstanding (other than any shares owned by Crowley, Shiloh Acquisition, Inc.
or Marine Transport Corporation or held in the treasury of Marine Transport
Corporation, and any shares held by stockholders seeking appraisal for their
shares) will be canceled and converted automatically into the right to receive
$7.00 per share in cash (or any greater amount per share paid pursuant to the
offer).
IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
- If you decide not to tender your shares in the offer and the merger occurs,
you will receive in the merger the same amount of cash per share as you would
if you had tendered your shares in the offer.
- If you decide not to tender your shares in the offer and the merger does not
occur, if we purchase all the tendered shares, there may be so few remaining
stockholders and publicly held shares that the shares will no longer be
eligible to be traded through Nasdaq National Market or any other securities
market, there may not be a public trading market for the shares and Marine
Transport Corporation may cease making filings with the SEC or otherwise cease
being required to comply with SEC rules relating to publicly held companies.
See Section 13.
WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
- On December 19, 2000, the last full trading day before we announced our offer,
the last reported closing price per share reported on the Nasdaq National
Market was $5.00 per share. See Section 6.
WITH WHOM MAY I TALK IF I HAVE QUESTIONS ABOUT THE OFFER?
- You can call MacKenzie Partners, Inc., the Information Agent, at (212)
929-5500 or (800) 322-2885. See the back cover of this Offer to Purchase.
iii
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TO ALL HOLDERS OF COMMON STOCK OF
MARINE TRANSPORT CORPORATION:
INTRODUCTION
Shiloh Acquisition, Inc., a Delaware corporation ("Purchaser") and a wholly
owned subsidiary of Crowley Maritime Corporation, a Delaware corporation
("Parent"), hereby offers to purchase all the shares of common stock, par value
$0.50 per share ("Common Stock"), of Marine Transport Corporation, a Delaware
corporation (the "Company"), that are issued and outstanding (the "Shares"), for
$7.00 per Share, net to the seller in cash, without interest, upon the terms and
subject to the conditions set forth in this Offer to Purchase and in the related
Letter of Transmittal (which, together with this Offer to Purchase and any
amendments or supplements hereto or thereto, collectively constitute the
"Offer"). See Section 8 for additional information concerning Parent and
Purchaser.
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, stock transfer taxes with respect to 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 back-up U.S. federal
income tax withholding of 31% of the gross proceeds payable to such stockholder
or other payee pursuant to the Offer. See Section 5. Purchaser or Parent will
pay all charges and expenses of Citibank, N.A., (the "Depositary") and MacKenzie
Partners, Inc. (the "Information Agent") incurred in connection with the Offer.
See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") HAS UNANIMOUSLY
DETERMINED THAT THE AGREEMENT OF MERGER, DATED AS OF DECEMBER 20, 2000 (THE
"MERGER AGREEMENT") AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING EACH OF
THE OFFER AND THE MERGER (EACH AS DEFINED HEREIN), ARE ADVISABLE AND FAIR TO,
AND IN THE BEST INTERESTS OF, THE COMPANY AND THE HOLDERS OF SHARES, HAS
APPROVED AND ADOPTED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
THEREBY, INCLUDING EACH OF THE OFFER AND THE MERGER, AND HAS RECOMMENDED THAT
THE HOLDERS OF SHARES ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE
OFFER.
ING Barings LLC ("ING Barings") has delivered to the Board its written
opinion dated December 18, 2000 to the effect that, based upon and subject to
various considerations and assumptions set forth in such opinion, that the offer
price was fair, from a financial point of view, to the Company's stockholders. A
copy of the written opinion of ING Barings is contained in the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9"),
which has been filed with the Securities and Exchange Commission (the "SEC") in
connection with the Offer and which is being mailed to stockholders concurrently
herewith, and stockholders are urged to read such opinion carefully in its
entirety for a description of the assumptions made, matters considered and
limitations of the review undertaken by ING Barings.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST
THE NUMBER OF SHARES THAT SHALL CONSTITUTE A MAJORITY OF THE THEN OUTSTANDING
SHARES ON A FULLY DILUTED BASIS (INCLUDING, WITHOUT LIMITATION, ALL SHARES
ISSUABLE UPON THE EXERCISE OF ANY OPTIONS) (THE "MINIMUM TENDER CONDITION"). THE
OFFER IS ALSO SUBJECT TO CERTAIN OTHER CONDITIONS CONTAINED IN THIS OFFER TO
PURCHASE. SEE SECTIONS 1 AND 14, WHICH SET FORTH IN FULL THE CONDITIONS TO THE
OFFER.
The Offer is being made pursuant to the Merger Agreement, among Parent,
Purchaser and the Company. The Merger Agreement provides, among other things,
that as promptly as practicable after the purchase of Shares pursuant to the
Offer and the satisfaction of the other conditions set forth in the Merger
Agreement and in accordance with the relevant provisions of the General
Corporation Law of the State of Delaware ("Delaware Law"), Purchaser will be
merged with and into the Company (the "Merger"). As a result of the Merger, the
Company will continue as the surviving corporation (the "Surviving Corporation")
and will become a wholly owned subsidiary of Parent. At the effective time of
the Merger (the "Effective Time"), each Share issued and outstanding immediately
prior to the Effective Time (other than Shares held in the
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treasury of the Company or Shares owned by Purchaser, Parent or any direct or
indirect wholly owned subsidiary of Parent or of the Company, and other than
Shares held by stockholders who shall have demanded and perfected appraisal
rights under Delaware Law) shall be canceled and converted automatically into
the right to receive $7.00 in cash, or any higher price that may be paid per
Share in the Offer, without interest (the "Merger Consideration"). Stockholders
who demand and fully perfect appraisal rights under Delaware Law will be
entitled to receive, in connection with the Merger, cash for the fair value of
their Shares as determined pursuant to the procedures prescribed by Delaware
Law. See Section 11. The Merger Agreement is more fully described in Section 10.
Certain federal income tax consequences of the sale of Shares pursuant to the
Offer and the Merger, as the case may be, are described in Section 5.
The Merger Agreement provides that, promptly following the purchase of, and
payment for, a number of Shares that satisfies the Minimum Tender Condition
pursuant to the Offer and from time to time thereafter, Purchaser shall be
entitled to designate the number of directors, rounded up to the next whole
number, on the Board that equals the product of the total number of directors on
the Board and the percentage that the number of Shares beneficially owned by
Purchaser following such purchase bears to the total number of Shares then
outstanding. In the Merger Agreement, the Company has agreed that at such time,
upon the election of Purchaser, it will either increase the number of directors
in accordance with the Company's Certificate of Incorporation and By-laws, or
seek and accept resignations of incumbent directors, in order that Purchaser's
designees may be elected or appointed to the Board.
The consummation of the Merger is subject to the satisfaction or waiver of
certain conditions, including the consummation of the Offer, and, if necessary,
the approval and adoption of the Merger Agreement and the Merger by the
requisite vote of the stockholders of the Company. For a more detailed
description of the conditions to the Merger, see Section 10. Under the Company's
Certificate of Incorporation and Delaware Law, the affirmative vote of the
holders of a majority of the outstanding Shares is required to approve and adopt
the Merger Agreement and the Merger. Consequently, if Purchaser acquires
(pursuant to the Offer or otherwise) at least a majority of the outstanding
Shares, then Purchaser will have sufficient voting power to approve and adopt
the Merger Agreement and the Merger without the vote of any other stockholder.
See Sections 10 and 11.
Under Delaware Law, if Purchaser acquires, pursuant to the Offer or
otherwise, at least 90% of the then outstanding Shares, Purchaser will be able
to approve and adopt the Merger Agreement and the Merger without a vote of the
Company's stockholders. In such event, Parent, Purchaser and the Company have
agreed to take, at the request of Purchaser, all necessary and appropriate
action to cause the Merger to become effective in accordance with Delaware Law
as promptly as reasonably practicable after such acquisition, without a meeting
of the Company's stockholders. If, however, Purchaser does not acquire at least
90% of the then outstanding Shares pursuant to the Offer or otherwise and a vote
of the Company's stockholders is required under Delaware Law, a significantly
longer period of time will be required to effect the Merger. See Section 11.
The Company has advised Purchaser that as of December 19, 2000, 6,555,013
shares of Common Stock were issued, consisting of 6,205,013 shares of Common
Stock outstanding and 350,000 shares of Common Stock held in the treasury of the
Company. In addition, the Company has advised Parent that as of December 19,
2000, there were outstanding employee stock options to purchase an aggregate of
636,975 Shares and 106,000 Shares of Restricted Stock (as defined in Section
10). As a result, as of such date, the Minimum Tender Condition would be
satisfied if Purchaser acquired 3,473,995 Shares. Also, as of such date,
Purchaser could cause the Merger to become effective in accordance with Delaware
Law, without a meeting of the Company's stockholders, if Purchaser acquired
6,253,190 Shares.
No appraisal rights are available in connection with the Offer; however,
stockholders may have appraisal rights in connection with the Merger regardless
of whether the Merger is consummated with or without a vote of the Company's
stockholders. See Section 11.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER. THIS OFFER TO PURCHASE CONTAINS
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FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES, INCLUDING THE
RISKS ASSOCIATED WITH SATISFYING THE VARIOUS CONDITIONS TO THE 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 such extension or
amendment), Purchaser will accept for payment and pay for all Shares validly
tendered (and not withdrawn in accordance with the procedures set forth in
Section 4) on or prior to the Expiration Date. "Expiration Date" means 12:00
midnight, New York City time, on Monday, February 5, 2001, unless and until
Purchaser (subject to the terms and conditions of the Merger Agreement) shall
have extended the period during which the Offer is open, in which case
Expiration Date shall mean the latest time and date at which the Offer, as it
may be extended by Purchaser, shall expire.
The Offer is subject to the conditions specified in Section 14. Subject to
the applicable rules and regulations of the SEC and subject to the terms and
conditions of the Merger Agreement, Purchaser expressly reserves the right to
waive any such condition (other than the Minimum Tender Condition) in whole or
in part, in its sole discretion. Purchaser and Parent shall determine, in their
reasonable judgment, whether any such conditions exist. Subject to the
applicable rules and regulations of the SEC and subject to the terms and
conditions of the Merger Agreement, Purchaser expressly reserves the right to
increase the price per Share payable in the Offer and to make any other changes
in the terms and conditions of the Offer; provided, however, that Purchaser may
not, without the prior written consent of the Company, (i) decrease or change
the form of consideration payable in the Offer, (ii) decrease the number of
Shares sought pursuant to the Offer, (iii) impose additional conditions to the
Offer, (iv) change the conditions to the Offer, or (v) make any other change in
the terms or conditions of the Offer that is materially adverse to the holders
of the Shares.
The Merger Agreement also provides that, without the consent of the
Company, Purchaser shall have the right to: (i) extend the initial offering
period of the Offer if at any scheduled expiration of the initial offering
period any of the conditions to the Offer set forth in Section 14 have not been
satisfied or waived; (ii) extend the Offer for any period required or permitted
by any rule, regulation, interpretation or position of the SEC or the staff
thereof applicable to the Offer; or (iii) elect to provide a subsequent offering
period for the Offer in accordance with Rule 14d-11 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). During any extension, all
Shares previously tendered and not withdrawn will remain subject to the Offer
and subject to the right of a tendering stockholder to withdraw such
stockholder's Shares. No rights of withdrawal will be available to stockholders
during any subsequent offering period. See Section 4. Under no circumstances
will interest be paid on the purchase price for tendered Shares, whether or not
the Offer is extended. Any extension of the Offer may be effected by Purchaser
giving oral or written notice of such extension to the Depositary.
Subject to the terms and conditions of the Merger Agreement and the
satisfaction or waiver of the conditions to the Offer specified in Section 14,
Purchaser shall accept for payment and pay for the Shares validly tendered and
not withdrawn pursuant to the Offer as soon as practicable after such scheduled
expiration. Notwithstanding the immediately preceding sentence and subject to
the applicable rules of the SEC and the terms and conditions of the Offer and
the Merger Agreement, Purchaser also expressly reserves the right (i) to delay
payment for Shares in order to comply in whole or in part with applicable laws
(any such delay shall be effected in compliance with 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), (ii) to extend or terminate the Offer
and not to accept for payment or pay for any Shares not theretofore accepted for
payment or paid for, upon the occurrence of any of the conditions to the Offer
specified in Section 14, and (iii) to amend the Offer or to waive any conditions
to the Offer in any respect consistent with the provisions of the Merger
Agreement described above, in each case by giving oral or written notice of such
delay, termination, waiver or amendment to the Depositary and by making public
announcement thereof. All conditions to the Offer, other than necessary
governmental approvals, will be satisfied or waived prior to the expiration of
the Offer.
Any such extension, delay, termination, waiver or amendment will be
followed as promptly as practicable by public announcement thereof, such
announcement in the case of an extension to be made no later than
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9:00 a.m., New York City time, on the next business day after the previously
scheduled Expiration Date. Subject to applicable law (including Rules 14d-4(c),
14d-6(d) and 14e-1 under the Exchange Act, which require that material changes
be promptly disseminated to stockholders in a manner reasonably designed to
inform them of such changes) and without limiting the manner in which Purchaser
may choose to make any public announcement, Purchaser will have no obligation to
publish, advertise or otherwise communicate any such public announcement other
than by issuing a press release to the Dow Jones News Service or the Public
Relations Newswire.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, Purchaser will extend the Offer to the extent required by Rules l4d-4(c),
l4d-6(d) and 14e-1 under the Exchange Act. Subject to the terms of the Merger
Agreement, if, prior to the Expiration Date, Purchaser should decide to increase
the consideration being offered in the Offer, such increase in the consideration
being offered will be applicable to all stockholders whose Shares are accepted
for payment pursuant to the Offer and, if at the time notice of any such
increase in the consideration being offered is first published, sent or given to
holders of such Shares, the Offer is scheduled to expire at any time earlier
than the period ending on the tenth business day from and including the date
that such notice is first so published, sent or given, the Offer will be
extended at least until the expiration of such ten business day period.
For purposes of the Offer, a "business day" means any day on which the
principal offices of the SEC in Washington, D.C. are open to accept filings, or,
in the case of determining a date when any payment is due, any day on which
banks are not required or authorized to close in The City of New York, and
consists of the time period from 12:01 a.m. through 12:00 midnight, New York
City time.
The Company has provided Purchaser with the Company's stockholder list and
security position listings, including the most recent list of names, addresses
and security positions of non-objecting beneficial owners in the possession of
the Company, for the purpose of disseminating the Offer to holders of Shares.
This Offer to Purchase and the related Letter of Transmittal will be mailed by
Purchaser to record holders of Shares whose names appear on the Company's
stockholder list and will be furnished, for subsequent transmittal to beneficial
owners of Shares, 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.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Subject to the terms and conditions of the Merger Agreement and to the
satisfaction or waiver of the conditions to the Offer specified in Section 14
(including, if the Offer is extended or amended, the terms and conditions of any
such extension or amendment) as of any scheduled expiration of the initial
offering period of the Offer, Purchaser will accept for payment all Shares
validly tendered (and not properly withdrawn in accordance with Section 4) as
soon as practicable after such scheduled expiration. Purchaser shall pay for all
Shares validly tendered and not withdrawn promptly following the acceptance of
Shares for payment pursuant to the Offer. Notwithstanding the immediately
preceding sentence and subject to applicable rules and regulations of the SEC
and the terms of the Merger Agreement, Purchaser expressly reserves the right to
delay payment for Shares in order to comply in whole or in part with applicable
laws. See Sections 1 and 15.
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
certificates evidencing such Shares (the "Share Certificates") or timely
confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such
Shares into the Depositary's account at The Depository Trust Company (the
"Book-Entry Transfer Facility") pursuant to the procedures set forth in Section
3, (ii) the Letter of Transmittal (or a manually signed facsimile thereof),
properly completed and duly executed, with any required signature guarantees or
an Agent's Message (as defined below), in connection with the book-entry
transfer and (iii) any other documents required under the Letter of Transmittal.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of 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 are the
4
<PAGE> 10
subject of such Book-Entry Confirmation, that such participant has received and
agrees to be bound by the Letter of Transmittal and that Purchaser may enforce
such agreement against such participant.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered 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. Upon the terms and subject to the conditions of the Offer, payment for
Shares accepted for payment pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payments from Purchaser and
transmitting such payments to tendering stockholders whose Shares have been
accepted for payment.
UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE
PAID, REGARDLESS OF ANY DELAY IN MAKING SUCH PAYMENT.
If any tendered Shares are not accepted for payment for any reason pursuant
to the terms and conditions of the Offer, or if Share Certificates are submitted
evidencing more Shares than are tendered, Share Certificates evidencing
unpurchased Shares will be returned, without expense to the tendering
stockholder (or, in the case of Shares tendered by book-entry transfer into the
Depositary's account at a Book-Entry Transfer Facility pursuant to the procedure
set forth in Section 3, 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.
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES.
Valid Tender of Shares. In order for a holder of Shares validly to tender
Shares pursuant to the Offer, the Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly executed, together with any
required signature guarantees or, in the case of a book-entry transfer, an
Agent's Message, and any other documents required by the Letter of Transmittal,
must be received by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase and either (i) the Share Certificates evidencing
tendered Shares must be received by the Depositary at such address or such
Shares must be tendered pursuant to the procedure for book-entry transfer
described below and a Book-Entry Confirmation must be received by the Depositary
(including an Agent's Message if the tendering stockholder has not delivered a
Letter of Transmittal), in each case prior to the Expiration Date, or (ii) the
tendering stockholder must comply with the guaranteed delivery procedures
described below.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT
THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Book-Entry Transfer. The Depositary will establish accounts with respect to
the Shares at the Book-Entry Transfer Facility for purposes of the Offer within
two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in the system of the Book-Entry Transfer
Facility may make a book-entry delivery of Shares by causing the Book-Entry
Transfer Facility to transfer such Shares into the Depositary's account at the
Book-Entry Transfer Facility in accordance with the Book-Entry Transfer
Facility's procedures for such transfer. However, although delivery of Shares
may be effected through book-entry transfer at the Book-Entry Transfer Facility,
the Letter of Transmittal (or a manually signed facsimile thereof), properly
completed and duly executed, together with any required signature guarantees, or
an Agent's Message, and any other required documents, must, in any case, be
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase prior to the Expiration Date, or the tendering
stockholder must comply with the guaranteed delivery procedure described below.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY, IN ACCORDANCE
WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES, DOES NOT CONSTITUTE DELIVERY
TO THE DEPOSITARY.
5
<PAGE> 11
Signature Guarantees. Signatures on all Letters of Transmittal must be
guaranteed by a firm which is a member of the Security Transfer Agent Medallion
Signature Program, or by any other "eligible guarantor institution," as such
term is defined in Rule 17Ad-15 under the Exchange Act (each of the foregoing
being referred to as an "Eligible Institution"), except in cases where Shares
are tendered (i) by a registered holder of Shares who has not completed either
the box entitled "Special Payment Instructions" or the box entitled "Special
Delivery Instructions" on the Letter of Transmittal or (ii) for the account of
an Eligible Institution. If a Share Certificate is registered in the name of a
person other than the signer of the Letter of Transmittal, or if payment is to
be made, or a Share Certificate not accepted for payment or not tendered is to
be returned, to a person other than the registered holder(s), then the Share
Certificate must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name(s) of the registered holder(s) appear on
the Share Certificate, with the signature(s) on such Share Certificate or stock
powers guaranteed by an Eligible Institution. See Instructions 1 and 5 of the
Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates evidencing such Shares are
not immediately available or such stockholder cannot deliver the Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date, or such stockholder cannot complete the procedure for delivery
by book-entry transfer on a timely basis, such Shares may nevertheless be
tendered, provided that all the following conditions are satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by Purchaser, is
received prior to the Expiration Date by the Depositary as provided below;
and
(iii) the Share Certificates (or a Book-Entry Confirmation) evidencing
all tendered Shares, in proper form for transfer, in each case together
with the Letter of Transmittal (or a manually signed facsimile thereof),
properly completed and duly executed, with any required signature
guarantees or, in the case of a book-entry transfer, an Agent's Message,
and any other documents required by the Letter of Transmittal are received
by the Depositary within three Nasdaq National Market ("Nasdaq") trading
days after the date of execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or mail or by
facsimile transmission to the Depositary and must include a guarantee by an
Eligible Institution in the form set forth in the form of Notice of Guaranteed
Delivery made available by Purchaser.
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 the
Share Certificates evidencing such Shares, or a Book-Entry Confirmation of the
delivery of such Shares, and the Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly executed, with any required
signature guarantees or, in the case of a book-entry transfer, an Agent's
Message, and any other documents required by the Letter of Transmittal.
Determination of Validity. ALL QUESTIONS AS TO THE FORM OF DOCUMENTS AND
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 SHALL BE FINAL AND BINDING ON ALL PARTIES.
Purchaser reserves the absolute right to reject any and all tenders determined
by it not to be in proper form or the acceptance for payment of which may, in
the opinion of its counsel, be unlawful. Purchaser also reserves the absolute
right to waive any condition of the Offer to the extent permitted by applicable
law and the Merger Agreement or any defect or irregularity in the tender of any
Shares of any particular stockholder, whether or not similar defects or
irregularities are waived in the case of other stockholders. NO TENDER OF SHARES
WILL BE DEEMED TO HAVE BEEN VALIDLY MADE UNTIL ALL DEFECTS AND IRREGULARITIES
HAVE BEEN CURED OR WAIVED. NONE OF PURCHASER, PARENT OR ANY OF THEIR RESPECTIVE
AFFILIATES OR ASSIGNS, THE DEPOSITARY, THE INFORMATION AGENT OR ANY OTHER PERSON
WILL BE UNDER ANY DUTY TO GIVE NOTIFICATION OF ANY DEFECTS OR IRREGULARITIES IN
TENDERS OR INCUR ANY LIABILITY FOR FAILURE TO GIVE ANY SUCH NOTIFICATION.
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.
6
<PAGE> 12
A tender of Shares pursuant to any of the procedures described above will
constitute the tendering stockholder's acceptance of the terms and conditions of
the Offer, as well as the tendering stockholder's representation and warranty to
Purchaser that (i) such stockholder has the full power and authority to tender,
sell, assign and transfer the tendered Shares (and any and all other Shares or
other securities issued or issuable in respect of such Shares), and (ii) 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 not subject to any adverse claims.
The acceptance for payment by Purchaser of Shares pursuant to any of the
procedures described above will constitute a binding agreement between the
tendering stockholder and Purchaser upon the terms and subject to the conditions
of the Offer.
Appointment as Proxy. By executing the Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of Purchaser as
such stockholder's agents, attorneys-in-fact and 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 issued or issuable in respect of such
Shares on or after December 20, 2000). All such powers of attorney and proxies
shall be considered irrevocable and coupled with an interest in the tendered
Shares. Such appointment will be effective when, and only to the extent that,
Purchaser accepts such Shares for payment. Upon such acceptance for payment, all
prior powers of attorney and proxies given by such stockholder with respect to
such Shares (and such other Shares and securities) will be revoked, without
further action, and no subsequent powers of attorney or proxies may be given nor
any subsequent written consent executed by such stockholder (and, if given or
executed, will not be deemed to be effective) with respect thereto. The
designees of Purchaser will, with respect to the 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 at any
annual or special meeting of the Company's stockholders or any adjournment or
postponement thereof, by written consent in lieu of any such meeting or
otherwise. 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 (and such other Shares and securities).
UNDER THE "BACKUP WITHHOLDING" PROVISIONS OF U.S. FEDERAL INCOME TAX LAW,
THE DEPOSITARY MAY BE REQUIRED TO WITHHOLD 31% OF ANY PAYMENTS OF CASH PURSUANT
TO THE OFFER. TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING WITH RESPECT TO
PAYMENT TO CERTAIN STOCKHOLDERS OF THE PURCHASE PRICE OF SHARES PURCHASED
PURSUANT TO THE OFFER, EACH SUCH STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH
SUCH STOCKHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER AND CERTIFY THAT SUCH
STOCKHOLDER IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY
COMPLETING THE SUBSTITUTE FORM W-9 IN THE LETTER OF TRANSMITTAL. SEE INSTRUCTION
9 OF THE LETTER OF TRANSMITTAL. FOREIGN STOCKHOLDERS MAY INSTEAD PROVIDE A
STATEMENT (INTERNAL REVENUE SERVICE FORM W-8BEN), SIGNED UNDER PENALTY OF
PERJURY, ATTESTING TO SUCH INDIVIDUAL'S EXEMPT STATUS IN ORDER TO AVOID BACKUP
WITHHOLDING.
4. WITHDRAWAL RIGHTS.
Tender of Shares made pursuant to the Offer are irrevocable except that
such Shares may be withdrawn at any time prior to the Expiration Date and,
unless theretofore accepted for payment by Purchaser pursuant to the Offer, may
also be withdrawn at any time after March 6, 2001. 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 4, subject to Rule 14e-1(c) under
the Exchange Act. Any such delay will be by an extension of the Offer to the
extent required by law.
For a withdrawal to be effective, a written or manually signed facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover page of this Offer to Purchase
or by facsimile at (212) 505-2248. Any such notice of withdrawal must specify
the name of the
7
<PAGE> 13
person who tendered the Shares to be withdrawn, the number of Shares to be
withdrawn and the name of the registered holder of such Shares, if different
from that of the person who tendered such Shares. If Share Certificates
evidencing Shares to be withdrawn 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 submitted to the
Depositary and the signature(s) on the notice of withdrawal must be guaranteed
by an Eligible Institution, unless such Shares have been tendered for the
account of an Eligible Institution. If Shares have been tendered pursuant to the
procedure for book-entry transfer as set forth in Section 3, any notice of
withdrawal must specify the name and number of the account at the Book-Entry
Transfer Facility to be credited with the withdrawn Shares.
ALL QUESTIONS AS TO THE FORM AND VALIDITY (INCLUDING TIME OF RECEIPT) OF
ANY NOTICE OF WITHDRAWAL WILL BE DETERMINED BY PURCHASER, IN ITS SOLE
DISCRETION, WHOSE DETERMINATION WILL BE FINAL AND BINDING. NONE OF PURCHASER,
PARENT OR ANY OF THEIR RESPECTIVE AFFILIATES OR ASSIGNS, THE DEPOSITARY, THE
INFORMATION AGENT OR ANY OTHER PERSON WILL BE UNDER ANY DUTY TO GIVE ANY
NOTIFICATION OF ANY DEFECTS OR IRREGULARITIES IN ANY NOTICE OF WITHDRAWAL OR
INCUR ANY LIABILITY FOR FAILURE TO GIVE ANY SUCH NOTIFICATION.
Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn
will thereafter be deemed not to have been validly tendered for purposes of the
Offer. However, withdrawn Shares may be re-tendered at any time prior to the
Expiration Date by following one of the procedures described in Section 3.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following is a summary of the material United States federal income tax
consequences of the Offer and the Merger to holders whose Shares are purchased
pursuant to the Offer or whose Shares are converted into the right to receive
cash in the Merger (whether upon receipt of the Merger Consideration or pursuant
to the proper exercise of appraisal rights). The summary is based on the
Internal Revenue Code, applicable current and proposed United States Treasury
Regulations issued thereunder, judicial authority and administrative rulings and
pronouncements, all of which are subject to change, possibly with retroactive
effect. The discussion applies only to Shares held as capital assets, and does
not address the tax consequences that may be relevant to holders of Shares that
are subject to special tax rules, such as insurance companies, United States
expatriates, tax-exempt organizations, broker-dealers, financial institutions,
traders in securities that elect to mark to market, or holders who hold the
Shares as part of a hedge, straddle, constructive sale or conversion
transaction, or who acquired the Shares pursuant to the exercise of employee
stock options or otherwise as compensation. For purposes of this summary, a
United States holder means a beneficial owner of Shares that is a citizen or
resident of the United States, a partnership or corporation created or organized
in the United States or any State thereof (including the District of Columbia),
or any estate or trust the income of which is subject to United States federal
income tax regardless of its source. The term non-United States holder refers to
any beneficial owner of Shares other than a United States holder.
THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW ARE
INCLUDED FOR GENERAL INFORMATIONAL PURPOSES ONLY AND ARE BASED UPON CURRENT LAW.
BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH HOLDER OF SHARES SHOULD
CONSULT SUCH HOLDER'S OWN TAX ADVISOR TO DETERMINE THE APPLICABILITY OF THE
RULES DISCUSSED BELOW TO SUCH STOCKHOLDER AND THE PARTICULAR TAX EFFECTS OF THE
OFFER AND THE MERGER, INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS.
a. United States Holders
The receipt of cash by a United States holder for Shares pursuant to the
Offer or the Merger (whether upon receipt of the Merger Consideration or
pursuant to the proper exercise of appraisal rights) will be a taxable
transaction for United States federal income tax purposes (and also may be a
taxable transaction under applicable state, local, foreign and other income tax
laws). In general, for United States federal income tax purposes, a United
States holder will recognize gain or loss equal to the difference between the
holder's adjusted tax basis in the Shares sold pursuant to the Offer or
converted to cash in the Merger and the amount of cash received therefor. Such
gain or loss generally will be capital gain or loss, and will be long term
capital gain or loss if the Shares have been held for more than one year. The
deductibility of capital losses are
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<PAGE> 14
restricted and, in general, may only be used to reduce capital gains to the
extent thereof. However, individual taxpayers generally may deduct annually
$3,000 of capital losses in excess of their capital gains.
Payments made to a United States holder in connection with the Offer or the
Merger may be subject to backup withholding at a 31% rate. Backup withholding
generally applies if a United States holder (i) fails to furnish its Taxpayer
Identification Number ("TIN"), (ii) furnishes an incorrect TIN, (iii) fails
properly to report interest or dividends, or (iv) under certain circumstances,
fails to provide a certified statement, under penalty of perjury, that the TIN
provided is correct and such holder is not subject to backup withholding. The
amount of any backup withholding from a payment to a United States holder will
be allowed as a credit against such holder's federal income tax liability and
may entitle such holder to a refund, provided that the required information is
furnished to the IRS. Certain persons, including corporations and financial
institutions are exempt from backup withholding. United States holders should
consult their tax advisors regarding their qualification for exemption from
backup withholding and the procedure for obtaining such an exemption.
b. Non-United States Holders
The receipt of cash by a non-United States holder for Shares pursuant to
the Offer or the Merger (whether upon receipt of the Merger Consideration or
pursuant to the proper exercise of appraisal rights) generally will not be
subject to United States federal income tax on any gain realized on the
disposition, unless (i) such holder is an individual who is present in the
United States for 183 days or more during the taxable year of such disposition
and certain other conditions are met, or (ii) the gain is effectively connected
with the conduct of a trade or business in the United States by the non-United
States holder.
Backup withholding and information reporting imposed at a rate of 31% may
apply to the payment of cash received by a non-United States holder for Shares
pursuant to the Offer or the Merger unless the holder certifies under penalties
of perjury to its non-United States holder status or otherwise establishes an
exemption. Backup withholding is not an additional tax. Amounts so withheld can
be credited against such holder's federal income tax liability and may entitle
such holder to a refund, provided that the required information is furnished to
the IRS. To avoid backup withholding, a tendering non-United States holder
should complete IRS Form W-8BEN.
Non-United States holders should consult their tax advisors regarding the
application of United States federal income tax laws, including information
reporting and backup withholding, to their particular situations.
9
<PAGE> 15
6. PRICE RANGE OF SHARES; DIVIDENDS.
As of the date immediately preceding the date of the Merger Agreement,
6,205,013 shares of Common Stock were issued and outstanding.
On or about June 18, 1998, the Company began trading on Nasdaq under the
symbol "MTLX." The table below sets forth, for the periods indicated, the
quarterly high and low closing sales prices of the shares of Common Stock on
Nasdaq:
SHARE PRICE DATA
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
FISCAL 1999:
Year Ended December 31, 1999:
First Quarter............................................. $3 5/16 $ 2 1/8
Second Quarter............................................ $4 3/8 $ 2 11/16
Third Quarter............................................. $4 $ 2 5/8
Fourth Quarter............................................ $3 3/8 $ 2 1/8
FISCAL 2000:
Year Ended December 31, 2000:
First Quarter............................................. $3 1/2 $ 2 1/2
Second Quarter............................................ $3 $ 2 1/16
Third Quarter............................................. $3 1/16 $ 2 1/8
Fourth Quarter............................................ $6 29/32 $ 2 31/32
</TABLE>
On December 19, 2000, the last full trading day prior to the public
announcement of the offer, the reported closing sales price of the shares of
Common Stock on Nasdaq was $5 per share of Common Stock. On January 4, 2001, the
last full trading day prior to the date of this Offer to Purchase, the last
reported closing sales price of the shares of Common Stock was $6.875 per share.
Stockholders are urged to obtain current market quotations for the Common Stock.
The Company has not paid any dividends with respect to the shares of Common
Stock at any time during the past two years. Pursuant to the Merger Agreement,
during the period from the date of the Merger Agreement to the date on which a
majority of the Company's directors are designees of the Parent or the
Purchaser, the Company will not, and will cause each of its subsidiaries not to,
(i) issue, deliver, sell or authorize or propose the issuance, delivery or sale
of any equity securities, other than the issuance of shares of Common Stock
pursuant to the exercise of the options outstanding at the date of the Merger
Agreement; or (ii) split, combine or reclassify any of the Company's capital
stock or issue or authorize or propose the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock, or
declare, set aside, make or pay any dividend or distribution (whether in cash,
stock or property) on any shares of its capital stock (other than cash dividends
paid to the Company by its wholly owned Subsidiaries with regard to their
capital stock).
7. CERTAIN INFORMATION CONCERNING THE COMPANY.
All information contained in this Offer to Purchase or incorporated herein
by reference concerning the Company, or actions or events with respect to it,
was provided to the Purchaser and Parent by the Company, and the Purchaser and
Parent take no responsibility for the accuracy or completeness of such
information or for any failure by the Company to disclose events or
circumstances that may have occurred and may affect the significance,
completeness or accuracy of any such information.
General. The Company is a Delaware corporation, with its principal
executive offices located at 1200 Harbor Boulevard, Weehawken, New Jersey,
07087-0901, and its telephone number is (201) 330-0200. The Company is a
U.S.-based supplier of marine transportation services. The Company owns and
operates a
10
<PAGE> 16
fleet of vessels for its own account, and it also manages vessels for other
vessel owners. It presently operates one of the largest U.S.-based fleets of
ocean-going vessels.
Certain Projected Financial Data of the Company. Prior to entering into the
Merger Agreement, Parent conducted a due diligence review of the Company and in
connection with such review received certain projections of the Company's future
operating performance. The Company does not in the ordinary course publicly
disclose projections and these projections were not prepared with a view to
public disclosure. The Company has advised Parent and Purchaser that these
projections were prepared by the Company's management based on numerous
assumptions including, among others, projections of revenues, operating income,
benefits and other expenses, depreciation and amortization, capital expenditure
and working capital requirements. No assurances can be given with respect to any
such assumptions. These projections do not give effect to the Offer or the
potential combined operations of Parent and the Company or any alterations
Parent may make to the Company's operations or strategy after the consummation
of the Offer. The information set forth below is presented for the limited
purpose of giving the stockholders access to the material financial projections
prepared by the Company's management that were made available to Parent and
Purchaser in connection with the Merger Agreement and the Offer.
MARINE TRANSPORT CORPORATION
PROJECTED FINANCIAL PERFORMANCE (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
FISCAL YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------
2000 2001 2002 2003 2004 2005 2006
-------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues....................... $234,358 228,277 224,272 193,702 159,231 157,956 150,272
Operating expenses............. $228,146 216,134 205,797 176,490 148,405 146,612 137,945
Operating income............... $ 6,212 12,143 18,475 17,213 10,826 11,344 12,327
</TABLE>
CERTAIN MATTERS DISCUSSED HEREIN, INCLUDING, BUT NOT LIMITED TO, THESE
PROJECTIONS, ARE FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. FORWARD-LOOKING STATEMENTS INCLUDE THE INFORMATION SET FORTH
ABOVE UNDER "CERTAIN PROJECTED FINANCIAL DATA OF THE COMPANY". WHILE PRESENTED
WITH NUMERICAL SPECIFICITY, THESE PROJECTIONS WERE NOT PREPARED BY THE COMPANY
IN THE ORDINARY COURSE AND ARE BASED UPON A VARIETY OF ESTIMATES AND
HYPOTHETICAL ASSUMPTIONS WHICH MAY NOT BE ACCURATE, MAY NOT BE REALIZED, AND ARE
ALSO INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC AND COMPETITIVE
UNCERTAINTIES AND CONTINGENCIES, ALL OF WHICH ARE DIFFICULT TO PREDICT, AND MOST
OF WHICH ARE BEYOND THE CONTROL OF THE COMPANY. ACCORDINGLY, THERE CAN BE NO
ASSURANCE THAT ANY OF THE PROJECTIONS WILL BE REALIZED AND THE ACTUAL RESULTS
FOR THE FISCAL YEARS ENDING DECEMBER 31, 2000, 2001, 2002, 2003, 2004, 2005 AND
2006 MAY VARY MATERIALLY FROM THOSE SHOWN ABOVE.
In addition, these projections were not prepared in accordance with
generally accepted accounting principles, and neither the Company's nor Parent's
independent accountants have examined or compiled any of these projections or
expressed any conclusion or provided any other form of assurance with respect to
these projections and accordingly assume no responsibility for these
projections. These projections were prepared with a limited degree of precision,
and were not prepared with a view to public disclosure or compliance with the
published guidelines of the SEC or the guidelines established by the American
Institute of Certified Public Accountants regarding projections, which would
require a more complete presentation of data than as shown above. The inclusion
of these projections herein should not be regarded as a representation by the
Company, Parent or Purchaser or any other person to whom these projections were
provided that the projected results will be achieved. These projections should
be read in conjunction with the historical financial information of the Company.
None of Parent, Purchaser, or any other person to whom these projections were
provided assumes any responsibility for the accuracy or validity of the
foregoing projections. Forward-looking statements also include those preceded
by, followed by or that include the words "believes," "expects," "anticipates"
or similar expressions.
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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 SEC
relating to its business, financial condition and other matters. Information as
of particular dates concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal holders of the
Company's securities and any material interest of such persons in transactions
with the Company is required to be disclosed in proxy statements distributed to
the Company's stockholders and filed with the SEC. Such reports, proxy
statements and other information should be available for inspection at the
public reference facilities maintained by the SEC at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and also should be available for
inspection at the SEC's regional offices located at Seven World Trade Center,
13th Floor, New York, New York 10048 and the Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such
materials may also be obtained by mail, upon payment of the SEC's customary
fees, by writing to its principal office at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549. The SEC also maintains a World Wide Website on the
Internet at http://www.sec.gov that contains reports and other information
regarding issuers that file electronically with the SEC.
8. CERTAIN INFORMATION CONCERNING PURCHASER AND PARENT.
Purchaser is a newly incorporated Delaware corporation organized in
connection with the Offer and the Merger and has not carried on any activities
other than in connection with the Offer and the Merger. The principal offices of
Purchaser are located at 155 Grand Avenue, 7th Floor, Oakland, California 94612
and its telephone number is (510) 251-7500. Purchaser is a wholly owned
subsidiary of Parent.
Until immediately prior to the time that Purchaser will purchase Shares
pursuant to the Offer, it is not anticipated that Purchaser will have any
significant assets or liabilities or engage in activities other than those
incident to its formation and capitalization and the transactions contemplated
by the Offer and the Merger. Because Purchaser is newly formed and has minimal
assets and capitalization, no meaningful financial information regarding
Purchaser is available.
Parent is a corporation organized under the laws of Delaware. Its principal
offices are located at 155 Grand Avenue, 7th Floor, Oakland, California 94612,
and its telephone number is (510) 251-7500. Crowley is primarily a family- and
employee-owned company engaged in integrated logistics, marine transportation
and related services. Founded in 1892, Crowley has more than 100 offices in
major ports and cities around the world and has several operating subsidiaries.
The name, citizenship, business address, business telephone number,
principal occupation or employment, and five-year employment history for each of
the directors and executive officers of Purchaser and Parent and certain other
information are set forth in Schedule I hereto. Except as described in this
Offer to Purchase and in Schedule I hereto, none of Parent, Purchaser or, to the
best knowledge of such corporations, any of the persons listed on Schedule I to
the Offer of Purchase has during the last five years (i) been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) been a party to any judicial or administrative proceeding (except for
matters that were dismissed without sanction or settlement) that resulted in a
judgment, decree or final order enjoining the person from future violations of,
or prohibiting activities subject to, federal or state securities laws or
finding any violation of such laws.
Except as provided in the Merger Agreement, as otherwise described in this
Offer to Purchase, and for one Share beneficially owned by Parent, (i) none of
Purchaser, Parent nor, to the best knowledge of Purchaser and Parent, any of the
persons listed in Schedule I to this Offer to Purchase or any associate or
majority owned subsidiary of Purchaser, Parent or any of the persons so listed,
beneficially owns or has any right to acquire any Shares and (ii) none of
Purchaser, Parent nor, to the best knowledge of Purchaser and Parent, any of the
persons or entities referred to above nor any director, executive officer or
subsidiary of any of the foregoing has effected any transaction in the Shares
during the past 60 days.
Except as provided in the Merger Agreement or as otherwise described in
this Offer to Purchase, none of Purchaser, Parent nor, to the best knowledge of
Purchaser and Parent, any of the persons listed in Schedule I to this Offer to
Purchase, has any agreement, arrangement, understanding, whether or not legally
enforceable,
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<PAGE> 18
with any other person with respect to any securities of the Company, including,
but not limited to, the transfer or voting of such securities, joint ventures,
loan or option arrangements, puts or calls, guaranties of loans, guaranties
against loss or the giving or withholding of proxies, consents or
authorizations. Except as set forth in this Offer to Purchase, since January 1,
1998, neither Purchaser nor Parent nor, to the best knowledge of Purchaser and
Parent, any of the persons listed on Schedule I 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 SEC applicable
to the Offer. Except as set forth in this Offer to Purchase, since January 1,
1998 there have been no negotiations, transactions or material contacts between
any of Purchaser, Parent, or any of their respective subsidiaries or, to the
best knowledge of Purchaser and Parent, any of the persons listed in Schedule I
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, tender
offer for or other acquisition of any class of the Company's securities, an
election of the Company's directors or a sale or other transfer of a material
amount of assets of the Company.
9. FINANCING OF THE OFFER AND THE MERGER.
The total amount of funds required by Purchaser to consummate the Offer and
the Merger and to pay related fees and expenses is estimated to be approximately
$49 million. Purchaser will obtain all of such funds from Parent. Parent will
provide such funds from existing resources. No alternative financing plan
exists.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY; THE MERGER
AGREEMENT; THE CONFIDENTIALITY AGREEMENT.
In mid-June 2000, Richard Oster, the former Chief Financial Officer of
Parent, met James Dowling and Jeffrey Pribor of ING Barings at a conference. The
ING Barings representatives described a potential transaction involving the
Company to Mr. Oster at that time.
Parent and the Company entered into a confidentiality agreement on June 20,
2000 (see below), and the Company provided Parent with a confidential offering
memorandum dated June 30, 2000 shortly thereafter.
Throughout the summer, ING Barings and the Company management provided
supplemental information to Parent, in response to requests for additional
information.
On August 4, 2000, Parent submitted a letter of its continuing interest
indicating an equity purchase price of between $3.50 and $5.00 per Share.
On September 21 and 22, 2000, Thomas B. Crowley, Jr., Chairman and Chief
Executive Officer, and William P. Verdon, Senior Vice President and General
Counsel, of Parent, met in Chicago with Richard du Moulin, President of the
Company, and Mr. Dowling, to discuss the Company and a potential transaction
with Parent.
On October 3 and 4, 2000, Richard Swinton, Vice President, Taxation and
Audit, of Parent, Rockwell Smith, Vice President, Crowley Petroleum Transport,
Inc., and Daniel Conaton, former Assistant General Counsel of Parent, conducted
a preliminary due diligence review of the Company at the offices of ING Barings
in New York City. In the course of their review, the executives met with Mr. du
Moulin, Mark Filanowski, Senior Vice President, Chief Financial Officer and
Treasurer, and Jonathan Fantell, Manager, Financial Planning and Analysis, of
the Company, Mr. Dowling and Christine Jakomovich of ING Barings.
On October 13, 2000, Mr. Crowley sent a letter to Mr. Dowling which
contained a conditional offer of $4.25 per Share for 100% of the Shares, subject
to the approval of Parent's Board of Directors and its lenders, and to the
results of its further due diligence review of the Company.
On October 17 Mr. Dowling informed Mr. Verdon by telephone that the Company
had rejected the conditional offer made in Mr. Crowley's October 13, 2000
letter.
Following some additional discussions between the parties concerning due
diligence matters, on October 31, 2000, Mr. Crowley sent a letter to Mr. Dowling
containing a conditional offer to purchase 100% of the Shares at a price of
$7.00 per Share, subject to the same conditions as in the letter of October 13,
2000.
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On November 1, 2000, Mr. Dowling advised Mr. Verdon of the Company's
interest in pursuing a potential transaction with Parent and establishing a
schedule for a continued due diligence review of the Company by Purchaser.
At a November 13, 2000 meeting of Parent's Board of Directors, management
made a presentation concerning the potential transaction. Following the
presentation, Parent's Board authorized management (i) to make an offer of $7.00
per Share for all of the outstanding Shares, subject to the completion of due
diligence satisfactory to Parent's Board and (ii) to negotiate a contract which
would also be subject to the satisfaction of Parent's Board.
On November 16 and 17, 2000, executives of Parent conducted additional due
diligence in the Company's data room at the offices of the Company's counsel in
New York City. During this time discussions were held with Mr. du Moulin and Mr.
Filanowski.
On November 17, 2000, Parent received a draft Agreement of Merger for the
transaction and an invitation to submit, in conformity with auction-process
guidelines, a firm offer to acquire the Company.
During the week of November 27 to December 1, 2000, executives of Purchaser
and certain of their legal and accounting advisors continued the due diligence
review of the Company in the data room in New York City.
On November 27, 2000, Mr. Crowley and Mark Tabbutt of Saltchuk Resources
Inc. ("Saltchuk") met with Mr. du Moulin and Mr. Dowling in Los Angeles to
discuss the potential transaction in general, as well as the possible
involvement of Saltchuk in the transaction.
During the month of December, numerous telephone discussions were held
between the executives of Purchaser and the Company concerning Parent's on-going
due diligence review of the Company and the terms of the proposed transaction.
On December 8, 2000, Parent and Saltchuk submitted a firm offer of $7.00
per Share, along with a detailed markup of the agreement of merger. The offer
was conditioned upon approval by the Company's Board by the close of business on
December 12, 2000, and execution of the agreement of merger by the close of
business on December 15, 2000. Shortly after the submission of the firm offer,
Saltchuk informed Parent that, for a variety of internal reasons, it was not
prepared to pursue the transaction at this time. Parent informed the Company
that Parent would proceed with the transaction without Saltchuk.
On December 14, 2000, Parent's and Purchaser's Boards met to receive
management's report on its due diligence investigation of the Company and an
oral summary of the terms of the draft Agreement of Merger. The Boards expressed
satisfaction with the due diligence review and requested a written summary of
the terms of the current draft agreement of merger. Such summary was provided to
the members of Parent's and Purchaser's Boards on December 18, 2000.
On December 20, 2000, Parent's and Purchaser's Boards approved the tender
offer and the final form of the Merger Agreement, and authorized management to
execute the Merger Agreement and take the other actions necessary to conclude
the Offer and the Merger.
The Merger Agreement was finalized and executed on December 20, 2000, and a
joint press release announcing the proposed offer was issued by Parent and the
Company that same day.
On January 5, 2001, Parent and Purchaser commenced the Offer.
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<PAGE> 20
THE MERGER AGREEMENT
THE FOLLOWING IS A SUMMARY OF CERTAIN PROVISIONS OF THE MERGER AGREEMENT.
THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MERGER AGREEMENT,
WHICH IS INCORPORATED HEREIN BY REFERENCE, AND A COPY OF WHICH HAS BEEN FILED AS
AN EXHIBIT TO THE TENDER OFFER STATEMENT ON SCHEDULE TO (THE "SCHEDULE TO")
FILED BY PURCHASER AND PARENT WITH THE SEC IN CONNECTION WITH THE OFFER. THE
MERGER AGREEMENT MAY BE EXAMINED AND COPIES MAY BE OBTAINED AT THE PLACES SET
FORTH IN SECTION 7. DEFINED TERMS USED HEREIN AND NOT DEFINED HEREIN SHALL HAVE
THE RESPECTIVE MEANINGS ASSIGNED TO THOSE TERMS IN THE MERGER AGREEMENT.
The Offer. The Merger Agreement provides for the commencement of the Offer
as promptly as practicable, but in no event later than ten business days after
the public announcement of the terms of the Merger Agreement. The obligation of
Purchaser to accept for payment Shares tendered pursuant to the Offer is subject
to the satisfaction of the Minimum Tender Condition and certain other conditions
that are described in Section 14 hereof. Purchaser and Parent have agreed that
they shall not, without the prior written consent of the Company, (i) decrease
or change the form of the consideration payable in the Offer, (ii) decrease the
number of Shares sought pursuant to the Offer, (iii) impose additional
conditions to the Offer, (iv) change the conditions to the Offer, or (v) make
any other change in the terms or conditions of the Offer that is materially
adverse to the holders of the Shares.
The Merger. The Merger Agreement provides that, upon the terms and subject
to the conditions thereof, and in accordance with Delaware Law, Purchaser will
be merged with and into the Company. As a result of the Merger, the Company will
continue as the Surviving Corporation and will become a wholly owned subsidiary
of Parent, and the separate corporate existence of Purchaser will cease in
accordance with Delaware Law. Upon consummation of the Merger, each issued and
outstanding Share (other than any Shares held in the treasury of the Company, or
owned by Parent, Purchaser or any subsidiary of Parent or of the Company and any
Shares which are held by stockholders who have not voted in favor of the Merger
or consented thereto in writing and who shall have demanded properly in writing
appraisal for such Shares in accordance with Delaware Law) will convert into the
right to receive the Merger Consideration. The Merger Agreement also provides
that, prior to the Expiration Date, the Company will take all actions necessary
and appropriate to provide that, upon the Effective Time, each outstanding stock
option granted under any of the Company's or its Subsidiaries' stock option
plans or any other equity plan (collectively, the "Equity Plans") or under any
other plan or arrangement, and each outstanding warrant and option to purchase
shares, whether or not then exercisable or vested, shall be cancelled and, in
exchange therefor, each holder of such stock option, warrant, option or right to
purchase shall receive an amount in cash in respect thereof, if any, equal to
the product of (i) the excess, if any, of the Merger Consideration over the per
share exercise price thereof and (ii) the number of shares subject thereto (such
payment to be net of applicable withholding taxes).
The Company shall use its reasonable best efforts to obtain all necessary
waivers, consents or releases from holders of Company stock options, other
options, warrants and rights to purchase Shares and shall take any such action
as may be reasonably necessary to give effect to, and to accomplish the above
transactions involving Company stock options.
At the Effective Time, each then outstanding Share of Company restricted
stock which is subject to any vesting requirement and which was issued pursuant
to any of the Equity Plans (the "Restricted Stock") shall become 100% vested. At
the Effective Time, a holder of such Shares shall, by virtue of the Merger and
without any action on the part of such holder, be entitled to receive the Merger
Consideration (subject to any applicable withholding taxes), upon the surrender
of the Certificate representing such Shares. With respect to any Certificates
for Shares of Restricted Stock which are in possession of the Company, the
Company shall surrender such Certificates on behalf of the holder.
In the Merger Agreement, the Company agreed that the Equity Plans will
terminate as of the Effective Time and that the Company will ensure that
following the Effective Time no holder of options or participant in the Equity
Plans will have any right thereunder to acquire any equity securities of the
Company, the Surviving Corporation, or any Subsidiary thereof.
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Pursuant to the Merger Agreement, each share of common stock, par value
$0.001 per share, of Purchaser issued and outstanding immediately prior to the
Effective Time will be converted into and become one fully paid and
non-assessable share of common stock, par value $0.001 per share, of the
Surviving Corporation.
The Merger Agreement provides that the directors of Purchaser at the
Effective Time will be the initial directors of the Surviving Corporation, and
that the officers of the Company as of the Effective Time will be the initial
officers of the Surviving Corporation. The Certificate of Incorporation and
Bylaws of Purchaser in effect immediately prior to the Effective Time will
become the Certificate of Incorporation and Bylaws of the Surviving Corporation,
except that Purchaser's name shall be changed to "Marine Transport Corporation"
in the Merger.
Stockholders' Meeting. Pursuant to the Merger Agreement, the Company,
acting through the Board, shall, if required by applicable law to consummate the
Merger, duly call and hold a special meeting of its stockholders as soon as
practicable following the date on which Purchaser completes the purchase of
Shares pursuant to the Offer for the purpose of considering and taking action
upon the Merger Agreement (the "Stockholders' Meeting"). If Purchaser acquires
at least a majority of the outstanding Shares (on a fully diluted basis),
Purchaser will have sufficient voting power to approve the Merger, even if no
other stockholder votes in favor of the Merger.
Proxy Statement. The Merger Agreement provides that the Company, acting
through the Board, shall, if required by applicable law to consummate the
Merger, prepare and file with the SEC a preliminary proxy or information
statement (the "Proxy Statement") relating to the Merger Agreement and the
Merger and shall use its reasonable best efforts to cause a definitive Proxy
Statement to be mailed to its stockholders at the earliest practicable time
following the expiration or termination of the Offer. The Company, subject to
its fiduciary duties under applicable law, has agreed to use its reasonable best
efforts to obtain the necessary approval of the Merger by its stockholders.
Parent and Purchaser and any of their respective subsidiaries have agreed to
vote, or cause to be voted, all Shares owned by them in favor of the Merger
Agreement and the Merger. The Merger Agreement provides that, in the event
Parent, Purchaser, or any other subsidiary of Parent shall acquire at least 90%
of the outstanding Shares, Parent, Purchaser and the Company will take all
necessary and appropriate action to cause the Merger to be effective, as soon as
practicable after the consummation of the Offer, without the Stockholders'
Meeting.
Conduct of Business by the Company Pending the Merger. Pursuant to the
Merger Agreement, the Company has covenanted and agreed that, between the date
of the Merger Agreement and the date on which a majority of the Company's
directors are designees of Parent or Purchaser, unless Parent shall otherwise
agree in writing (and except as contemplated in the Merger Agreement), the
Company and each of its Subsidiaries shall conduct its operations in the
ordinary and usual course consistent with past practice, and the Company and its
Subsidiaries will each endeavor to preserve intact its business organization, to
keep available the services of its current officers and employees and to
preserve the goodwill of and maintain satisfactory relations with those persons
and entities having business relationships with it. The Company has also agreed
to promptly advise Parent and Purchaser in writing of any material change in the
condition (financial or otherwise) of the Company's or any of its Subsidiaries'
properties, customer or supplier relationships, assets, liabilities, business
prospects or results of operations. The Merger Agreement provides that, by way
of amplification and not limitation, except as contemplated by the Merger
Agreement (including the Company Disclosure Letter), neither the Company nor any
of its Subsidiaries shall directly or indirectly do, or propose to do, any of
the following, without the prior written consent of Parent: (a) issue, sell,
pledge, dispose of or encumber, or authorize the issuance, sale, pledge,
disposition or encumbrance of, any shares of capital stock, or any options,
warrants, convertible securities or other rights of any kind to acquire any
shares of capital stock, or any other ownership interest (including any phantom
interest) in the Company, any of its Subsidiaries or affiliates (except for the
issuance of Shares issuable pursuant to the Equity Plans in respect of options
that are outstanding on the date hereof); (b) sell, pledge, dispose of or
encumber any assets of the Company or any of its Subsidiaries, except in the
ordinary course of business and except as listed in the Company Disclosure
Letter; (c) acquire or redeem, directly or indirectly, or amend any securities
of the Company; (d) split, combine or reclassify any of its capital stock or
issue or authorize or propose the issuance of any other
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securities in respect of, in lieu of or in substitution for shares of its
capital stock, or declare, set aside, make or pay any dividend or distribution
(whether in cash, stock or property) on any shares of its capital stock (other
than cash dividends paid to the Company by its wholly-owned Subsidiaries with
regard to their capital stock); (e)(i) make or offer to make any acquisition, by
means of a merger or otherwise, of assets or securities, or any sale, lease,
encumbrance or other disposition of assets or securities, in each case involving
the payment or receipt of consideration of $500,000 or more, or (ii) except as
listed in the Company Disclosure Letter, enter into a Material Contract (as
defined in the Merger Agreement) or amend any Material Contract or grant any
release or relinquishment of any rights under any Material Contract; (f) incur
or assume any long-term debt or short-term debt except for short-term debt
incurred in the ordinary course of business; (g) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other person except wholly owned
Subsidiaries of the Company; (h) make any loans, advances or capital
contributions to, or investments in, any other Person (other than wholly owned
Subsidiaries of the Company and other than Stolt Marine Tankers, LLC, which is a
75%-owned Subsidiary); (i) take any action to change any of the accounting
principles or policies; or take any action to change in any material respect any
of the procedures or practices (including procedures with respect to revenue
recognition, payments of accounts payable and collection of accounts receivable)
used by it; (j) make any tax election or settle or compromise any material
federal, state or local tax liability (except as set forth in the Company
Disclosure Letter); (k) propose or adopt any amendments to its Certificate of
Incorporation or Bylaws (or similar documents); (l) grant any stock-related,
performance or similar awards or bonuses (except as set forth in the Company
Disclosure Letter); (m) forgive any loans to employees, officers or directors or
any of their respective affiliates or associates; (n) enter into any new, or
amend any existing, employment, severance, consulting or salary continuation
agreements with or for the benefit of any officers, directors or employees, or
grant any increases in the compensation or benefits to officers, directors or
employees (other than in the Ordinary Course of Business with respect to
employees, other than pursuant to and in accordance with the terms of any
existing or recently satisfied collective bargaining agreement, and other than
any existing employment agreements that were disclosed to Parent and Purchaser);
(o) make any deposits or contributions of cash or other property to or take any
other action to fund or in any other way secure the payment of compensation or
benefits under the Company's benefit plans or agreements subject to the
Company's benefit plans or any other plan, agreement, contract or arrangement of
the Company other than in the Ordinary Course of Business; (p) enter into,
amend, adopt or extend any collective bargaining or other labor agreement
(except for the agreements specified in the Company Disclosure Letter in
accordance with the parameters specified in the Company Disclosure Letter); (q)
adopt, amend or terminate any Company benefit plan or any other bonus,
severance, insurance, trust, fund, pension or other employee benefit plan,
policy or arrangement for the benefit of any current or former directors,
officers or employees, except for such amendments as may be required by
applicable law or by the terms of an existing collective bargaining agreement;
(r) commence any claim, suit or other action (except where delay in obtaining
the prior written consent of Parent would result in such claim, suit or action
being time-barred) or settle or agree to settle any suit, action, claim,
proceeding or investigation (not including any suit, action, claim, proceeding
or investigation relating to the Merger Agreement or the transactions
contemplated thereby) or pay, discharge or satisfy or agree to pay, discharge or
satisfy any claim, liability or obligation (absolute or accrued, asserted or
unasserted, contingent or otherwise) other than the payment, discharge or
satisfaction of liabilities reflected or reserved against in full in the
financial statements as at September 30, 2000 or incurred in the Ordinary Course
of Business subsequent to September 30, 2000; (s) except as specifically
permitted by the Merger Agreement, take, or agree to commit to take, or fail to
take any action that would result or is reasonably likely to result in any of
the Offer conditions or any of the conditions to the Merger set forth in the
Merger Agreement not being satisfied, or would make any representation or
warranty of the Company contained therein inaccurate in any material respect at,
or as of any time prior to, the Effective Time (except in the case of
representations and warranties that speak as of a specific date other than the
Effective Time), or that would impair the ability to consummate the Offer or the
Merger in accordance with the terms of the Merger Agreement or materially delay
such consummation; (t) enter into any contract or agreement which is material to
the Company other than in the Ordinary Course of Business, or amend or modify in
any material respect or consent to the termination of any existing Material
Contract; (u) except as set forth in the Company Disclosure Letter, sell any
vessel or grant any lien on any
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<PAGE> 23
vessel in respect of borrowed money; or (v) take, or agree in writing or
otherwise to take, any of the foregoing actions.
Company Board Representation. The Merger Agreement provides that, promptly
following the purchase of, and payment for, a number of Shares that satisfies
the Minimum Tender Condition, and from time to time thereafter, Purchaser shall
be entitled to designate the number of directors, rounded up to the next whole
number, on the Board that equals the product of the total number of directors on
the Board, and the percentage that the number of Shares beneficially owned by
Parent or Purchaser following such purchase bears to the total number of Shares
then outstanding, and the Company shall upon the election of the Purchaser
either increase the number of directors, or seek and accept resignations of
incumbent directors; provided, that until the Effective Time there shall always
be at least one director that was a member of the Board on the date that the
execution and delivery of the Merger Agreement was approved by the Board and who
is neither designated by Purchaser nor otherwise affiliated with Purchaser. The
Merger Agreement also provides that, at such time, the Company shall use its
reasonable best efforts to cause individual directors designated by Purchaser to
constitute the number of members, rounded up to the next whole number, on (i)
each committee of the Board and (ii) each board of directors of each Subsidiary
of the Company, and each committee thereof.
The Merger Agreement provides that, following the election or appointment
of Purchaser's designees and prior to the Effective Time, any termination or
amendment of the Merger Agreement, any extension of time for performance of any
obligation or action thereunder by Parent or Purchaser, any waiver of compliance
with any of the agreements or conditions contained therein for the benefit of
the Company, or any amendment of the Certificate of Incorporation or Bylaws of
the Company or the charter documents of any Subsidiary will be accomplished only
in accordance with the Company's Certificate of Incorporation and Bylaws.
Access to Information. Pursuant to the Merger Agreement, the Company
agreed, and agreed to cause its Subsidiaries to, afford to the officers,
employees, accountants, counsel, financing sources and other representatives of
Parent reasonable access during normal business hours to its properties, books,
contracts, commitments and records; to furnish to Parent all information
concerning its business, properties and personnel as Parent may reasonably
request or has reasonably requested; and to make available during normal
business hours to the officers, employees, accountants, counsel, financing
sources and other representatives of Parent the appropriate individuals for
discussion of the Company's business, properties, prospects and personnel as
Parent may reasonably request, and Parent has agreed to keep such information
confidential, in accordance with the terms of the Confidentiality Agreement
described below.
No Solicitation of Transactions. The Company has agreed not to, and to
cause its Subsidiaries and their representatives (including investment bankers,
attorneys and accountants), agents or affiliates not to, directly or indirectly,
encourage, solicit, initiate or participate in any way in any discussions or
negotiations with, or provide any information to, or afford any access to the
properties, books or records of the Company or any of its Subsidiaries to, or
otherwise take any other action to assist or facilitate, any person or group
(other than Parent or Purchaser or any affiliate or associate of Parent or
Purchaser and their respective officers, directors, employees, representatives
and agents) concerning any Acquisition Proposal (as defined below) or the
possible making of any Acquisition Proposal. Notwithstanding the foregoing and
subject to compliance with the Merger Agreement and the prior execution by such
person or group of a confidentiality agreement substantially in the form of the
Confidentiality Agreement, the Company may furnish information to or enter into
discussions or negotiations with any person or entity that has made an
Acquisition Proposal that is received after December 20, 2000 and that did not
result from a breach of the Merger Agreement if, prior to taking such actions,
the Board of the Company resolves in good faith that (i) such Acquisition
Proposal is bona fide, (ii) such Acquisition Proposal is reasonably likely to
constitute a Superior Proposal (as defined below), and (iii) the failure to take
such actions would be inconsistent with the Board of the Company's fiduciary
duties to the Company's stockholders under applicable law.
The Company has agreed to notify Parent promptly if any such proposal or
offer, or any inquiry or contact with any person with respect thereto, is made
and in any such notice to Parent indicate in reasonable detail the identity of
the person making such proposal, offer, inquiry or contact and the material
terms of such proposal,
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<PAGE> 24
offer, inquiry or contact, and to advise Parent from time to time of the status
and any developments (including a change in such terms) concerning the same.
Concurrently with so informing Parent, the Company agreed to deliver to Parent
copies of any written communications received from the person making such
Acquisition Proposal at the same time it informs Parent of such Acquisition
Proposal. If the Company (or any of its Subsidiaries or its or their respective
officers, directors, employees, representatives, agents or affiliates)
participates in discussions or negotiations with, or provides information to,
any person (whether or not such action is in accordance with the Merger
Agreement), the Company has agreed to immediately inform Parent of all
developments with respect thereto.
In the Merger Agreement, the Company agreed, and agreed to cause its
Subsidiaries and its and their respective officers, directors, employees,
representatives, agents and affiliates to, immediately cease and cause to be
terminated any existing activities, discussions, or negotiations with any
persons (other than Parent, Purchaser or any of their respective affiliates or
associates) conducted prior to December 20, 2000 with respect to any Acquisition
Proposal, to use its commercially reasonable efforts to have returned to the
Company any confidential information that had been provided in any such
discussions or negotiations, and to notify any such person with whom it has had
any such discussions during the 60 days prior to December 20, 2000 that the
Company is no longer seeking an Acquisition Proposal from such person and
withdraws any request for an Acquisition Proposal.
Unless and until the Merger Agreement has been terminated in accordance
with its terms, the Company shall not (i) withdraw or modify, or propose
publicly to withdraw or modify, in a manner adverse to Parent or Purchaser, the
approval or recommendation of the Offer or the Merger (ii) release any third
party from any confidentiality or standstill provisions in any agreement to
which the Company is a party, or (iii) enter into any letter of intent,
agreement in principle, acquisition agreement or other agreement related to any
Acquisition Proposal.
The Merger Agreement does not prohibit the Company or its Board of
Directors from taking and disclosing to the Company's stockholders a position
with respect to a tender offer by a third party pursuant to Rules 14d-9 and
14e-2(a) promulgated under the Exchange Act.
"Acquisition Proposal" means any offer or other inquiry or proposal that,
if consummated, would result in an Acquisition Transaction; provided that solely
for purposes of the definition of Superior Proposal, all references to 20% in
the definition of Acquisition Transaction shall be deemed references to 50%.
"Acquisition Transaction" means a transaction or series of transactions
that, directly or indirectly, constitutes an acquisition by a person of (A)
assets or businesses that constitute or represent more than 20% of the total
revenue, operating income, assets or earnings before interest, taxes,
depreciation and amortization of the Company and its Subsidiaries, taken as a
whole, or (B) more than 20% of the outstanding shares of the voting securities
of the Company or capital stock of, or other equity voting interest in, any
Subsidiary or Subsidiaries of the Company which, taken together, directly or
indirectly hold at least the share of assets or businesses referred to in clause
(A) above, whether by means of (a) a merger, share exchange or consolidation, or
any similar transaction, or (b) a purchase, lease or other sale, transfer or
disposition, consolidation, share exchange or otherwise.
"Superior Proposal" means any unsolicited, bona fide Acquisition Proposal
made in writing by a third party on terms which the Board of the Company
determines in its good faith judgment, after consultation with its financial
advisor and counsel, to be more favorable to stockholders, from a financial
point of view, than the Offer and the Merger, (x) after taking into account (A)
the likelihood and timing of consummation of such transaction on the terms set
forth therein, (B) the material legal, financial (including the financing terms
of any such proposal), regulatory and other aspects of such proposal, and (C)
any other relevant factors permitted under applicable law, (y) after giving
Parent, in order to respond to such third-party Superior Proposal, the greater
of (A) five business days following Parent's receipt of the information, or (B)
three business days after receipt by Parent of a written notice from the Board
of the Company that in the absence of any further action by Parent it would
consider such proposal to be a Superior Proposal, and (z) taking into account
any amendment or modification to the Merger Agreement proposed by Parent.
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Indemnification; Insurance. The Merger Agreement provides that all rights
to indemnification existing in favor of the present or former directors,
officers and employees of the Company or any of its Subsidiaries as provided in
the Company's Certificate of Incorporation or Bylaws, or the certificate of
incorporation, bylaws or similar documents of any of the Company's Subsidiaries
as in effect as of December 20, 2000, with respect to matters occurring prior to
the Effective Time, shall survive the Merger and shall continue in full force
and effect for a period of not less than the statutes of limitations applicable
to such matters, and Parent agrees to cause the Surviving Corporation to comply
fully with its obligations under the Merger Agreement and such charter
documents.
The Surviving Corporation will cause to be maintained in effect for a
period of six years after the Effective Time policies of directors' and
officers' liability insurance covering the persons currently covered by the
Company's existing directors' and officers' liability insurance policies and
providing substantially similar coverage to such existing policies subject to
certain limitations set forth in the Merger Agreement relating to the
availability and cost thereof.
Employee Matters. After the Effective Time, the Surviving Corporation shall
honor in accordance with their terms all existing employment and severance
agreements between the Company or any of its Subsidiaries and any officer,
director or employee of the Company or any of its Subsidiaries which are listed
in the Disclosure Letter.
Parent will cause the Surviving Corporation and its Subsidiaries, for a
period ending no earlier than the fifth anniversary of the Effective Time, to
provide pension and welfare benefits to their employees (excluding employees
covered by collective bargaining agreements and excluding benefits that are
based on the value of, or require the issuance of, securities) that, in the
aggregate, are no less favorable than those currently provided by the Company
and its Subsidiaries in the aggregate to such employees.
If the Plans maintained for the employees of the Company and its
Subsidiaries are replaced by plans of the Parent or the Surviving Corporation,
(i) Parent will, and will cause the Surviving Corporation to, cause service
rendered by employees of the Company and its Subsidiaries prior to the Effective
Time to be taken into account for all purposes under employee benefit plans of
Parent, the Surviving Corporation and its Subsidiaries (except for purposes of
benefit accruals under any defined benefit pension plan), to the same extent as
such service was taken into account under the corresponding plans of the Company
and its Subsidiaries for those purposes, and (ii) employees of the Company and
its Subsidiaries will not be subject to any pre-existing condition limitation
under any health plan of Parent, the Surviving Corporation or its Subsidiaries
for any condition for which they would have been entitled to coverage under the
corresponding plan of the Company or its Subsidiaries in which they participated
prior to the Effective Time. Parent will, and will cause the Surviving
Corporation and its Subsidiaries to, give such employees credit under such plans
for co-payments made and deductibles satisfied prior to the Effective Time.
Consents; Approvals. The Merger Agreement provides that, subject to its
terms and conditions, the Parent, Purchaser and Company shall cooperate to
obtain as expeditiously as possible all necessary permits, consents, waivers,
approvals, agreements, orders and authorizations of all Governmental Entities
and other persons or entities required to be obtained by such party to the
Merger Agreement in connection with the execution, delivery and performance of
the Merger Agreement and the consummation of the transactions contemplated
thereby by such party.
Other Cooperation and Further Assurances. Parent, Purchaser and the Company
have also agreed that if required by applicable law, as soon as practicable
following consummation of the Offer, Parent and the Company shall together, or
pursuant to any reasonable allocation of responsibility between them, cooperate
with one another in taking all commercially reasonable efforts in order to lift
any injunctions or remove any other impediment to the consummation of the
Merger. In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of the Merger Agreement, the
officers and directors of Parent and the Surviving Company shall take all such
necessary action.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto including
representations by the Company as to the absence of certain
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changes or events concerning the Company's business, compliance with law,
litigation, employee benefit matters, labor matters, intellectual property,
environmental matters, taxes, material contracts and brokers.
Conditions to the Merger. Under the Merger Agreement, the respective
obligations of each party to effect the Merger are subject to the fulfillment or
waiver at or prior to the Effective Time of the following conditions: (a) if
required by the Delaware Law, the Merger Agreement and the Merger shall have
been approved and adopted by the affirmative vote or consent of the stockholders
of the Company to the extent required by Delaware Law and the Certificate of
Incorporation of the Company; (b) all approvals, consents and authorizations of,
filings and registrations with, and applications and notifications to all
governmental authorities required for the consummation of the Merger shall have
been obtained or made and shall be in full force and effect and all waiting
periods required by law shall have expired; (c) no temporary restraining order,
preliminary or permanent injunction or other order issued by any governmental
entity of competent jurisdiction nor any statute, rule, regulation or executive
order promulgated or enacted by any governmental entity, nor other legal
restriction, restraint or prohibition, preventing the consummation of the Merger
shall be in effect; and (d) the Shares shall have been purchased pursuant to the
Offer.
Termination. The Merger Agreement provides that it may be terminated at any
time prior to the Effective Time, notwithstanding approval of the Merger
Agreement by the stockholders of the Company: (a) by mutual written consent of
the Company and Parent duly authorized by the Boards of Directors of Parent and
the Company; (b) by Parent or the Company if any court of competent jurisdiction
or other Governmental Entity shall have issued an order, decree or ruling, or
taken any other action restraining, enjoining or otherwise prohibiting any of
the transactions contemplated by the Merger Agreement and such order, decree,
ruling or other action shall have become final and non-appealable; (c) by Parent
if, due to an occurrence or circumstance that would result in a failure to
satisfy any of the conditions to the Offer, Purchaser shall (i) not have
commenced the Offer within the time required by Regulation 14D under the
Exchange Act, (ii) have terminated the Offer without purchasing any Shares
pursuant to the Offer or (iii) have failed to accept for payment Shares pursuant
to the Offer prior to February 28, 2001; (d) by Parent, prior to the purchase of
Shares pursuant to the Offer, if the Company has breached in any material
respect its covenants to not (i) withdraw or modify (or propose publicly to
withdraw or modify), its approval or recommendation of the Offer or the Merger,
(ii) release any third party from any confidentiality or standstill provision in
any agreement to which Company is a party or (iii) enter into an agreement or
letter of intent related to any Acquisition Proposal or the Board of Directors
of the Company has resolved to effect any of the actions referred to above in
this subsection (d); (e) by Parent, if a Triggering Event (as defined below)
shall have occurred; (f) by the Company if, other than due to an occurrence or
circumstance that would result in a failure to satisfy any of the conditions to
the Offer, (i) Purchaser fails to commence the Offer in violation of the Merger
Agreement, (ii) Purchaser shall not have accepted for payment and paid for
Shares pursuant to the Offer in accordance with the terms thereof on or before
February 28, 2001, or (iii) Purchaser fails to purchase validly tendered Shares
in violation of the terms of the Merger Agreement; (g) by the Company, prior to
the purchase of Shares pursuant to the Offer, if the Company has received an
Acquisition Proposal that the Board of Directors, subject to compliance with the
Merger Agreement, has determined constitutes a Superior Proposal.
A "Triggering Event" shall be deemed to have occurred if: (i) the Board of
the Company or any committee thereof shall for any reason have withdrawn or
shall have amended or modified in a manner adverse to Parent its approval or
recommendation in favor of the Merger Agreement, the Offer and the Merger; (ii)
the Company shall have failed to include in the Schedule 14D-9 or Proxy
Statement the recommendation of the Board of the Company in favor of the Merger
Agreement, the Offer or the Merger; (iii) the Board of the Company or any
committee thereof shall have approved or recommended any Acquisition Proposal;
(iv) a tender or exchange offer relating to securities of the Company shall have
been commenced by a Person unaffiliated with Parent and the Company shall not
have sent to its security holders pursuant to Rule 14e-2 promulgated under the
Exchange Act, within ten business days after such tender or exchange offer is
first published sent or given to Company security holders, a statement
disclosing that the Company recommends rejection of such tender or exchange
offer; or (v) the Board of the Company takes any public position or makes any
disclosures to the Company's stockholders that has the effect of any of the
foregoing.
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Effect of Termination. If the Merger Agreement is terminated, the Merger
Agreement becomes void and of no effect with no liability on the part of any
party, except that breach of an obligation contained in the Merger Agreement,
the agreements in the Merger Agreement with respect to confidentiality, certain
miscellaneous provisions and, if applicable, provisions with respect to certain
termination payments described below survive the termination.
Fees and Expenses. The Merger Agreement provides that, if the Merger is
consummated, then all costs and expenses incurred in connection with the Offer,
the Merger Agreement and the transactions contemplated by the Merger Agreement,
shall be paid by the Surviving Corporation or the Parent. If the Merger is not
consummated, except as specified in the following sentence, all costs and
expenses incurred in connection with the Offer, the Merger Agreement and the
transactions contemplated by the Merger Agreement shall be paid by the party
incurring such expenses. In the event that the Merger Agreement is terminated
(i) by Parent after a Triggering Event, (ii) by Parent or Company if any court
of competent jurisdiction or other Governmental Entity shall have issued an
order, decree or ruling, or taken any other action restraining, enjoining or
otherwise prohibiting any of the transactions contemplated by the Merger
Agreement and the same shall have become final and non-appealable, (iii) by
Parent, prior to the purchase of Shares pursuant to the Offer, because the
Company has breached in any material respect its covenant to not (A) withdraw or
modify its approval or recommendation of the Offer or the Merger, (B) release
any third party from any confidentiality or standstill provision, in any
agreement to which Company is a party or (C) enter into an agreement or letter
of intent related to any Acquisition Proposal, (iv) by the Company, prior to the
purchase of Shares pursuant to the Offer, if the Company has received an
Acquisition Proposal that the Board of Directors, subject to compliance with the
Merger Agreement, has determined constitutes a Superior Proposal, (v) by Parent
if, due to an occurrence or circumstance that would result in a failure to
satisfy any of the Offer Conditions, Purchaser shall (A) not have commenced the
Offer within the time required by Regulation 14D under the Exchange Act, (B)
have terminated the Offer without purchasing any Shares pursuant to the Offer or
(C) have failed to accept for payment Shares pursuant to the Offer prior to
February 28, 2001; or (vi) by the Company if, other than due to an occurrence or
circumstance that would result in a failure to satisfy any of the conditions of
the Offer, (A) Purchaser fails to commence the Offer in violation of the Merger
Agreement, (B) Purchaser shall not have accepted for payment and paid for Shares
pursuant to the Offer in accordance with the terms thereof on or before February
28, 2001, or (C) Purchaser fails to purchase validly tendered Shares in
violation of the terms of this Agreement; and (in the case of clauses (v) and
(vi) only), either (I) prior to such termination a Superior Proposal shall have
been made or publicly announced, or (II) within nine months thereafter a
Superior Proposal shall have been consummated or an agreement to consummate a
Superior Proposal shall have been entered into by the Company, then (in the case
of clauses (i) through (vi)) the Company shall reimburse Parent for the
reasonably documented out-of-pocket fees and expenses of Parent and the
Purchaser (including printing fees, filing fees and fees and expenses of its
legal and financial advisors) related to the Offer, the Merger Agreement, the
transactions contemplated thereby and any related financing up to a maximum of
$750,000; and the Company shall pay Parent a termination fee of $2,500,000, in
each case, in immediately available funds.
THE CONFIDENTIALITY AGREEMENT
THE FOLLOWING IS A SUMMARY OF CERTAIN PROVISIONS OF THE CONFIDENTIALITY
AGREEMENT, DATED JUNE 20, 2000, BETWEEN THE COMPANY AND PARENT (THE
"CONFIDENTIALITY AGREEMENT"). THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE CONFIDENTIALITY AGREEMENT, WHICH IS INCORPORATED HEREIN BY
REFERENCE, AND A COPY OF WHICH HAS BEEN FILED WITH THE SEC AS AN EXHIBIT TO THE
SCHEDULE TO. THE CONFIDENTIALITY AGREEMENT MAY BE EXAMINED AND COPIES MAY BE
OBTAINED AT THE PLACES SET FORTH IN SECTION 7.
On June 20, 2000, the Company and Parent executed the Confidentiality
Agreement. Pursuant to the terms of the Confidentiality Agreement, the Company
agreed to provide to Parent certain information concerning the Company.
As a condition for the disclosure of the information concerning the
Company, the Parent agreed, among other things, (i) to hold such information and
any analyses, compilations, forecasts, studies, documents or records which
contain or otherwise reflect or are generated from such information by the
Purchaser or its
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representatives (the "Evaluation Material") in confidence and use it solely for
the purposes of pursuing a potential transaction between the Company and Parent,
and not use the Evaluation Material for any other purpose nor disclose it to any
third party without the prior written consent of the Company; and (ii) that
disclosure of Evaluation Material to its officers, directors, employees, agents,
attorneys, accountants, experts, consultants, bankers and financial advisors
working in connection with the transaction would be permitted to the extent
necessary to carry out that purpose and would be subject to all the requirements
of confidentiality set forth in the Confidentiality Agreement.
The obligations of the Confidentiality Agreement do not apply to
information that (i) was or becomes generally available to the public other than
as a result of a disclosure by Parent or its representatives; (ii) was or
becomes available to Parent on a non-confidential basis from a source other than
the Company or its advisors provided that such source is not known to Parent,
after due inquiry, to be bound by a confidentiality agreement with the Company,
or otherwise prohibited from transmitting the information to Parent by a
contractual, legal or fiduciary obligation or (iii) was within the possession of
Parent prior to its being furnished to Parent by or on behalf of the Company,
provided that such source of information is not bound by a confidentiality
agreement with the Company, or otherwise prohibited from transmitting the
information to Parent by a contractual, legal or fiduciary obligation.
Parent also agreed to not, without prior written consent of Company, and to
direct its representatives to not to disclose the existence of the Evaluation
Material or its provision to Parent, that Parent is considering a transaction
with Company, that negotiations have or are taking place nor any terms,
conditions of facts with respect to such transaction.
Parent agreed that in the event that Parent or its representatives are
requested or required (by deposition, interrogatories, requests for information
or documents in legal proceedings, subpoena, civil investigative demand or other
similar process) to disclose any of the Evaluation Materials, that it will give
prompt written notice to the Company of the receipt of any such request or
requirement so that Company may seek a protective order or other remedy and/or
waive compliance with the Confidentiality Agreement. If in the absence of a
protective order or other appropriate remedy or the receipt of a waiver by the
Company, Parent or any of its representatives is, in the written opinion of its
counsel, legally compelled to disclose Evaluation Material or else stand liable
for contempt or suffer other censure or penalty, Parent may disclose only that
portion of the Evaluation Material that such counsel advises is legally required
to be disclosed; provided Parent exercises its best efforts to preserve the
confidentiality of the Evaluation Material, including by cooperating with the
Company to obtain a protective order or other assurance that confidential
treatment will be accorded the Evaluation Material.
Parent also agreed not to solicit for employment any of Company's employees
during the transaction discussions and for a period of two years thereafter. If
Parent does not proceed with the Offer and the Merger, then within a reasonable
time or upon request by Company, Parent agreed to promptly return (unless
destroyed pursuant to the immediately following sentence) to the Company all
materials and information comprising the Evaluation Material, including any and
all copies, facsimiles and reproductions thereof, and any other material
containing or reflecting any materials or information in the Evaluation
Material. In such event, all other documents, memoranda, notes and other
writings whatsoever prepared by Parent or the Parent's representatives based on
the materials or information in the Evaluation Material would be destroyed by
Parent.
The Confidentiality Agreement remains in effect for three years commencing
on June 20, 2000.
11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY AFTER THE OFFER AND THE
MERGER.
Purpose of the Offer. The Offer is being made pursuant to the Merger
Agreement. The purpose of the Offer and the Merger is for Parent to acquire
control of, and the entire equity interest in, the Company. The purpose of the
Merger is for Parent to acquire all Shares not purchased pursuant to the Offer.
Upon consummation of the Merger, the Company will become a wholly owned
subsidiary of Parent.
Under Delaware Law, the approval of the Board and the affirmative vote of
the holders of a majority of the outstanding Shares is required to approve and
adopt the Merger Agreement and the transactions
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contemplated thereby, including the Merger. The Board of Directors of the
Company has unanimously determined that each of the Offer and the Merger is fair
to, and in the best interests of, the stockholders of the Company, has approved,
adopted and declared advisable the Merger Agreement and the Merger (such
approval and adoption having been made in accordance with Delaware Law,
including, without limitation, Section 203 thereof) and has resolved to
recommend that the stockholders accept the Offer and tender their Shares
pursuant to the Offer. Unless the Merger is consummated pursuant to the
short-form merger provisions under Delaware Law described below, the only
remaining required corporate action of the Company is the approval and adoption
of the Merger Agreement and the Merger by the affirmative vote of the holders of
a majority of the Shares. Accordingly, if the Minimum Tender Condition is
satisfied, Purchaser will have sufficient voting power to cause the approval and
adoption of the Merger Agreement and the Merger without the affirmative vote of
any other stockholder.
In the Merger Agreement, the Company has agreed to take all actions to
cause a meeting of its stockholders to be held as promptly as practicable
following consummation of the Offer for the purpose of considering and taking
action on the Merger Agreement and the Merger, if such action is required by
Delaware Law. Parent and Purchaser have agreed that all Shares owned by them and
their subsidiaries will be voted in favor of the approval and adoption of the
Merger Agreement and the Merger.
The Merger Agreement provides that, promptly following the purchase by
Purchaser of a number of Shares that satisfies the Minimum Tender Condition,
Purchaser will be entitled to designate representatives to serve on the Board in
proportion to Purchaser's ownership of Shares following such purchase. See
Section 10. Purchaser expects that such representation would permit Purchaser to
exert substantial influence over the Company's conduct of its business and
operations.
Short-Form Merger. Under Delaware Law, if Purchaser acquires, pursuant to
the Offer or otherwise, at least 90% of the then outstanding Shares, Purchaser
will be able to approve the Merger without a vote of the Company's stockholders.
In such event, Parent, Purchaser and the Company have agreed to take, at the
request of Purchaser, all necessary and appropriate action to cause the Merger
to become effective as promptly as reasonably practicable after such
acquisition, without a meeting of the Company's stockholders. If, however,
Purchaser does not acquire at least 90% of the outstanding Shares pursuant to
the Offer or otherwise and a vote of the Company's stockholders is required
under Delaware Law, a significantly longer period of time would be required to
effect the Merger.
Appraisal Rights. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders who have not tendered
their Shares will have certain rights under Delaware Law to dissent from the
Merger 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 of Delaware Law ("Section 262") will have
the "fair value" of their Shares (exclusive of any element of value arising from
the accomplishment or expectation of the Merger) determined by the Delaware
Court of Chancery and will be entitled to receive a cash payment equal to such
fair value for 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. 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. In Weinberger v. UOP, Inc., the Delaware Supreme Court stated,
among other things, that "proof of value by any techniques or methods which are
generally considered acceptable in the financial community and otherwise
admissible in court" should be considered in an appraisal proceeding. The
Weinberger court also noted that under Section 262, fair value is to be
determined "exclusive of any element of value arising from the accomplishment or
expectation of the merger." In Cede & Co. v. Technicolor, Inc., however, the
Delaware Supreme Court stated that, in the context of a two-step cash merger,
"to the extent that value has been added following a change in majority control
before cash-out, it is still value attributable to the going concern," to be
included in the appraisal process. As a consequence, the value so determined in
any appraisal proceeding could be the same, more or less than the purchase price
per Share in the Offer or the Merger Consideration.
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In addition, several decisions by Delaware courts have held that, in
certain circumstances, a controlling stockholder of a company involved in a
merger has a fiduciary duty to other stockholders which requires that the merger
be fair to such other stockholders. In determining whether a merger is fair to
minority stockholders, Delaware courts have considered, among other things, the
type and amount of consideration to be received by the stockholders and whether
there was fair dealing among the parties. The Delaware Supreme Court stated in
Weinberger and Rabkin v. Philip A. Hunt Chemical Corp. that the remedy
ordinarily available to minority stockholders in a cash-out merger is the right
to appraisal described above. However, a damages remedy or injunctive relief may
be available if a merger is found to be the product of procedural unfairness,
including fraud, misrepresentation or other misconduct.
Parent does not intend to object, assuming the proper procedures are
followed, to the exercise of appraisal rights by any stockholder and the demand
for appraisal of, and payment in cash for the fair value of, the Shares. Parent
intends, however, to cause the Surviving Corporation to argue in an appraisal
proceeding that, for purposes of such proceeding, the fair value of each Share
is less than or equal to the Merger Consideration. In this regard, stockholders
should be aware that opinions of investment banking firms as to the fairness
from a financial point of view (including ING Barings LLC) are not necessarily
opinions as to "fair value" under Section 262.
The foregoing summary of the rights of dissenting stockholders under
Delaware Law does not purport to be a complete statement of the procedures to be
followed by stockholders desiring to exercise any appraisal rights under
Delaware Law. The preservation and exercise of appraisal rights require strict
adherence to the applicable provisions of Delaware Law.
Going Private Transactions. The SEC has adopted Rule 13e-3 under the
Exchange Act which is applicable to certain "going private" transactions and
which may under certain circumstances be applicable to the Merger or another
business combination following the purchase of Shares pursuant to the Offer in
which Purchaser seeks to acquire the remaining Shares not held by it. Purchaser
believes that Rule 13e-3 will not be applicable to the Merger. Rule 13e-3
requires, among other things, that certain financial information concerning the
Company and certain information relating to the fairness of the proposed
transaction and the consideration offered to minority stockholders in such
transaction be filed with the SEC and disclosed to stockholders prior to
consummation of the transaction.
Plans for the Company. It is expected that, initially following the Merger,
the business and operations of the Company will, except as set forth in this
Offer to Purchase, be continued by the Company substantially as they are
currently being conducted. Parent will continue to evaluate the business and
operations of the Company during the pendency of the Offer and after the
consummation of the Offer and the Merger, and will take such actions as it deems
appropriate under the circumstances then existing. Parent intends to seek
additional information about the Company during this period. Thereafter, Parent
intends to review such information as part of a comprehensive review of the
Company's business, operations, capitalization and management with a view to
optimizing exploitation of the Company's potential in conjunction with Parent's
businesses. It is expected that the business and operations of the Company would
form an important part of Parent's future business plans. Parent is engaged in
discussions with the management of Saltchuk Resources Inc. concerning a possible
joint venture whereby Saltchuk and Parent would each have interests in the
Company at some time following the Merger. No agreements of any kind have been
entered into with respect to any such arrangement, including any agreement with
respect to the management or ownership structure of such an arrangement.
12. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that, during the period from December 20,
2000 to the date on which a majority of the Company's directors are designees of
Parent or Purchaser, the Company will not: (i) issue sell, pledge, dispose of or
encumber, or authorize the issuance, sale, pledge, disposition or encumbrance
of, any shares of capital stock, or any options, warrants, convertible
securities or other rights of any kind to acquire any shares of capital stock,
or any other ownership interest (including any phantom interest) in the Company,
any of its subsidiaries or affiliates (except for the issuance of Shares
issuable pursuant to any stock option or similar plan of the Company or a
Subsidiary in respect of options that were outstanding as of December 20,
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2000), (ii) acquire or redeem, directly or indirectly, or amend any securities
of the Company, or (iii) split, combine or reclassify any of its capital stock
or issue or authorize or propose the issuance of any other securities in respect
of, in lieu of or in substitution for shares of its capital stock, or declare,
set aside, make or pay any dividend or distribution (whether in cash, stock or
property) on any shares of its capital stock (other than cash dividends paid to
the Company by its wholly owned Subsidiaries with regard to their capital
stock).
13. POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR SHARES, NASDAQ LISTING,
MARGIN REGULATIONS AND EXCHANGE ACT REGISTRATION.
Possible Effects of the Offer on the Market for the Shares. The purchase of
Shares by Purchaser pursuant to the Offer will reduce the number of Shares that
might otherwise trade publicly and will reduce the number of holders of Shares,
which could adversely affect the liquidity and market value of the remaining
Shares held by the public.
Parent intends to cause the delisting of the Shares by Nasdaq following
consummation of the Offer.
Nasdaq Listing. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the standards for continued listing on
Nasdaq. According to Nasdaq's published guidelines, the Shares would not be
eligible to be included for listing if, among other things, the number of Shares
publicly held falls below 500,000, the number of holders of Shares falls below
300 or the market value of such publicly held Shares is not at least $1,000,000.
If, as a result of the purchase of Shares pursuant to the Offer, the Merger or
otherwise, the Shares no longer meet the requirements of Nasdaq for continued
listing, the listing of the Shares will be discontinued. In such event, the
market for the Shares would be adversely affected. In the event that the Shares
were no longer eligible for listing on Nasdaq, quotations might still be
available from 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 such Shares remaining at such time, the interest in maintaining a
market in such Shares on the part of securities firms, the possible termination
of registration of such 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 SEC 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 SEC and would make certain provisions of the Exchange Act, such as the
short-swing profit recovery provisions of Section 16(b), the requirement of
furnishing a proxy statement in connection with stockholders' meetings pursuant
to Section 14(a) or 14(c) of the Exchange Act and the related requirements of an
annual report, 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 (for a period of time, in the latter
case) 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
eligible for Nasdaq reporting. Purchaser currently intends to seek to cause the
Company to terminate the registration of the Shares under the Exchange Act as
soon after consummation of the Offer as the requirements for termination of
registration are met.
Margin Regulations. The Shares are currently "margin securities," as such
term is defined under the rules of the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), which has the effect, among other things,
of allowing brokers to extend credit on the collateral of such securities.
Depending upon factors similar to those described above regarding listing and
market quotations, following the Offer, it is possible that the Shares might no
longer constitute "margin securities" for purposes of the margin regulations of
the Federal Reserve Board, in which event such Shares could no longer be used as
collateral for loans made by brokers. In addition, if registration of the Shares
under the Exchange Act were terminated, the Shares would no longer constitute
"margin securities."
26
<PAGE> 32
14. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment, to purchase or to pay for any Shares tendered in
connection with the Offer and may terminate or, subject to the terms of the
Merger Agreement, amend the Offer, if:
(a) there shall not be validly tendered and not properly withdrawn
prior to the expiration of the initial offering period for the Offer (the
"Expiration Date") that number of Shares which, together with any Shares
beneficially owned by one or more of Purchaser, Parent and their respective
affiliates, represents a majority of the Shares on a fully diluted basis;
or
(b) any applicable waiting period under the HSR Act shall not have
expired or been terminated; or
(c) a preliminary or permanent injunction or other order by any
federal, state or foreign court which prevents the acceptance for payment
of, or payment for, some of or all the Shares shall have been filed,
pending or issued and shall remain in effect; or
(d) there shall have been instituted or be pending any action or
proceeding by any Governmental Entity: (i) challenging the acquisition by
the Purchaser of Shares or otherwise seeking to restrain, materially delay
or prohibit the consummation of the Offer or the Merger or seeking damages
that could make the Offer, the Merger or any other transaction contemplated
by the Merger Agreement materially more costly to Parent or the Purchaser,
(ii) seeking to prohibit or limit materially the ownership or operation by
the Purchaser or Parent of all or a material portion of the business or
assets of the Company and its Subsidiaries, or to compel the Purchaser or
Parent to dispose of or hold separate all or a material portion of the
business or assets of the Company and its Subsidiaries or the Purchaser or
Parent, as a result of the Offer or the Merger, (iii) seeking to impose or
confirm limitations on the ability of Parent or the Purchaser effectively
to exercise full rights of ownership of the Shares, including, without
limitation, the right to vote the Shares purchased by it on all matters
properly presented to the Company's stockholders, including, without
limitation, the approval and adoption of the Merger Agreement and the
transactions contemplated hereby, or (iv) seeking to require divestiture by
Parent, the Purchaser or any other affiliate of Parent of any Shares; or
(e) there shall have been any action taken, or any statute, rule,
regulation or order enacted, promulgated or issued or deemed applicable to
the Offer, the Merger or any other transaction contemplated hereby, Parent,
the Company or any affiliate of Parent or the Company by any Governmental
Entity, except for the waiting period provisions of the HSR Act, which is
reasonably likely to result, directly or indirectly, in any of the
consequences referred to in clauses (i) through (iv) of paragraph (d)
above; or
(f) any change or effect that, individually or in the aggregate, is or
is reasonably likely to constitute a Material Adverse Effect (as defined in
the Merger Agreement) shall have occurred following the date of the Merger
Agreement; or
(g) the Company shall have breached or failed to comply with any
material respect any of its representations, warranties, obligations,
covenants or agreements under the Merger Agreement; or
(h) the Merger Agreement shall have been terminated by the Company or
Parent in accordance with its terms; or
(i) Parent and the Company shall have agreed in writing that Purchaser
shall amend the Offer to terminate the Offer or postpone the payment for
shares of Company Common Stock pursuant thereto; or
(j) the Board shall have modified or amended its recommendation of the
Offer in any manner adverse to Parent or shall have withdrawn its
recommendation of the Offer, or shall have recommended acceptance of any
Acquisition Proposal or shall have resolved to do any of the foregoing;
which in the reasonable judgment of Parent or the Purchaser, in any such
case, and regardless of the circumstances giving rise to such condition,
makes it inadvisable to proceed with the Offer and/or with such acceptance
for payment or payments; or
27
<PAGE> 33
(k) any person other than Parent, Purchaser or any of their respective
affiliates shall have become the beneficial owner (as that term is used in
Rule 13d-3 under the Exchange Act) of more than 20% of the then outstanding
Shares.
The foregoing conditions are for the sole benefit of Parent and Purchaser
and may be asserted by Parent and Purchaser regardless of the circumstances
giving rise to any such condition, and, except for the Minimum Tender Condition,
may be waived by Parent and Purchaser, in whole or in part, at any time and from
time to time, in the sole discretion of Parent and Purchaser. Parent and
Purchaser shall determine, in their reasonable judgment, whether any such
conditions exist.
The determination as to whether any condition has been satisfied shall be
deemed a continuing right which may be asserted at any time and from time to
time. Notwithstanding the fact that the Parent and Purchaser reserve the right
to assert the failure of a condition following acceptance for payment but prior
to payment in order to delay payment or cancel their obligation to pay for
properly tendered Shares, the Parent and Purchaser will either promptly pay for
such Shares or promptly return such Shares.
Should the Offer be terminated pursuant to the foregoing provisions, all
tendered Shares not theretofore accepted for payment pursuant thereto shall
forthwith be returned to the tendering stockholders.
15. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS.
General. Based upon its examination of publicly available information with
respect to the Company and the review of certain information furnished by the
Company to Parent and discussions between representatives of Parent with
representatives of the Company during Parent's investigation of the Company (see
Section 10), neither Purchaser nor Parent is aware (i) of any license or other
regulatory permit that appears to be material to the business of the Company or
any of its Subsidiaries, taken as a whole, which might be adversely affected by
the acquisition of Shares by Purchaser pursuant to the Offer or (ii) except as
set forth below, of any approval or other action by any domestic (federal or
state) or foreign governmental entity which would be required prior to the
acquisition of Shares by Purchaser pursuant to the Offer. Should any such
approval or other action be required, it is Purchaser's present intention to
seek such approval or action. Purchaser does not currently intend, however, to
delay the purchase of Shares tendered pursuant to the Offer, pending the outcome
of any such action or the receipt of any such approval (subject to Purchaser's
right to decline to purchase Shares if any of the conditions in Section 14 shall
have occurred). There can be no assurance that any such approval or other
action, if needed, would be obtained without substantial conditions or that
adverse consequences might not result to the business of the Company, Purchaser
or Parent or that certain parts of the businesses of the Company, Purchaser or
Parent might not have to be disposed of or held separate or other substantial
conditions complied with in order to obtain such approval or other action or in
the event that such approval was not obtained or such other action was not
taken. Purchaser's obligation under the Offer to accept for payment and pay for
Shares is subject to certain conditions, including conditions relating to the
legal matters discussed in this Section 15. See Section 14 for certain
conditions of the Offer.
State Takeover Laws. The Company is incorporated under the laws of the
State of Delaware. In general, Section 203 of Delaware Law prevents an
"interested stockholder" (generally a person who owns or has the right to
acquire 15% or more of a corporation's outstanding voting stock, or an affiliate
or associate thereof) from engaging in a "business combination" (defined to
include mergers and certain other transactions) with a Delaware corporation for
a period of three years following the date such person became an interested
stockholder unless, among other things, prior to such date the board of
directors of the corporation approved either the business combination or the
transaction in which the interested stockholder became an interested
stockholder. On December 18, 2000, prior to the execution of the Merger
Agreement, the Board of Directors of the Company, by unanimous vote of all
directors present at a meeting held on such date, approved the Merger Agreement,
determined that each of the Offer and the Merger is advisable and fair to, and
in the best interest of, the stockholders of the Company. (Remaining open items
were resolved by the Company's Chairman and Chief Executive Officer pursuant to
authority delegated by the Board of the Company.) Accordingly, Section 203 is
inapplicable to the Offer and the Merger.
28
<PAGE> 34
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In Edgar v. MITE Corp., the Supreme Court of
the United States invalidated on constitutional grounds the Illinois Business
Takeover Statute, which, as a matter of state securities law, made takeovers of
corporations meeting certain requirements more difficult. However, in 1987, in
CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of
Indiana may, as a matter of corporate law and, in particular, with respect to
those aspects of corporate law concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without the prior approval of the remaining stockholders. The state
law before the Supreme Court was by its terms applicable only to corporations
that had a substantial number of stockholders in the state and were incorporated
there.
The Company, directly or through its subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws. Purchaser does not know whether any of these laws will, by their
terms, apply to the Offer or the Merger and has not complied with any such laws.
Should any person seek to apply any state takeover law, Purchaser will take such
action as then appears desirable, which may include challenging the validity or
applicability of any such statute in appropriate court proceedings. In the event
it is asserted that one or more state takeover laws is applicable to the Offer
or the Merger, and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer, Purchaser might be required to
file certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, Purchaser might be unable to accept for
payment any Shares tendered pursuant to the Offer, or be delayed in continuing
or consummating the Offer, and the Merger. In such case, Purchaser may not be
obligated to accept for payment any Shares tendered. See Section 14.
Antitrust. Under the Hart Scott Rodino Antitrust Improvements Act of 1976,
as amended, and the rules that have been promulgated thereunder by the Federal
Trade Commission, certain acquisition transactions may not be consummated unless
certain information has been furnished to the Antitrust Division of the
Department of Justice and to the FTC and certain waiting period requirements
have been satisfied. Purchaser does not believe that the acquisition of Shares
by Purchaser pursuant to the Offer and the Merger will be subject to such
requirements.
Maritime. The Company, through its subsidiaries Frances ODS Corporation and
Julius ODS Corporation, has two Operating Differential Subsidy Agreements with
the Maritime Administration, each dated as of September 30, 1998. Pursuant to
these agreements, Frances ODS Corporation receives an operating differential
subsidy for SMT CHEMICAL EXPLORER and Julius ODS Corporation receives an
operating differential subsidy for SMT CHEMICAL TRADER. The agreement for SMT
CHEMICAL EXPLORER will terminate by its terms on September 18, 2001, and the
agreement for SMT CHEMICAL TRADER will terminate by its terms on March 25, 2001.
The Company receives approximately $8,500 per day pursuant to the agreement for
SMT CHEMICAL EXPLORER and approximately $8,100 per day pursuant to the agreement
for SMT CHEMICAL TRADER. Parent, through its subsidiaries, owns and operates
vessels engaged in the domestic intercoastal or coastwise service. As such, it
cannot receive the operating differential subsidies referred to above unless and
until it receives a waiver from the Secretary of Transportation under Section
805(a) of the Merchant Marine Act, 1936, (the "Act") as amended. Parent is in
the process of filing for and seeking such a waiver under the Act.
According to certain provisions of contracts between the United States
Department of Transportation and the Maritime Administration on the one hand,
and each of Marine Transport Lines, Inc. and Mormac Marine Enterprises, Inc.,
both subsidiaries of the Company, on the other hand, each of Marine Transport
Lines, Inc. and Mormac Marine Enterprises, Inc. is required to notify the
Administrative Contracting Officer in writing within 30 days (a) when a change
in its ownership has occurred or is certain to occur which could result in
changes in the valuation of its capitalized assets in its accounting records;
and (b) of any change to asset valuations or any cost changes which have
occurred or are certain to occur as a result of a change of ownership.
29
<PAGE> 35
16. FEES AND EXPENSES.
Except as set forth below, Purchaser will not pay any fees or commissions
to any broker, dealer or other person for soliciting tenders of Shares pursuant
to the Offer.
Purchaser and Parent have retained MacKenzie Partners, Inc., as the
Information Agent, and Citibank, N.A., as the Depositary, in connection with the
Offer. The Information Agent may contact holders of Shares by mail, telephone,
telex, telecopy, telegraph and personal interview and may request banks,
brokers, dealers and other nominee stockholders to forward materials relating to
the Offer to beneficial owners. As compensation for acting as Information Agent
in connection with the Offer, MacKenzie Partners, Inc. will be paid a fee of
$5,000 and will also be reimbursed for certain out-of-pocket expenses and may be
indemnified against certain liabilities and expenses in connection with the
Offer, including certain liabilities under the federal securities laws.
Purchaser will pay the Depositary reasonable and customary compensation for
its services in connection with the Offer, plus reimbursement for out-of-pocket
expenses, and will indemnify the Depositary against certain liabilities and
expenses in connection therewith, including under federal securities laws.
Brokers, dealers, commercial banks and trust companies will be reimbursed by
Purchaser for customary handling and mailing expenses incurred by them in
forwarding material to their customers.
17. MISCELLANEOUS.
The Offer is being made solely by this Offer to Purchase and the related
Letter of Transmittal and is being made to holders of Shares. Purchaser is not
aware of any jurisdiction where the making of the Offer is prohibited by any
administrative or judicial action pursuant to any valid state statute. If
Purchaser becomes aware of any valid state statute prohibiting the making of the
Offer or the acceptance of Shares pursuant thereto, Purchaser will make a good
faith effort to comply with any such state statute. If, after such good faith
effort, Purchaser cannot comply with any such state statute, the Offer will not
be made to (nor will tenders be accepted from or on behalf of) the holders of
Shares in such state. In any jurisdiction where the securities, blue sky or
other laws require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on behalf of Purchaser by one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of Purchaser or the Company not contained in this Offer
to Purchase or in the Letter of Transmittal, and if given or made, such
information or representation must not be relied upon as having been authorized.
Pursuant to Rule 14d-3 of the General Rules and Regulations under the
Exchange Act, Parent and Purchaser have filed with the SEC the Schedule TO,
together with exhibits, furnishing certain additional information with respect
to the Offer. The Schedule TO and any amendments thereto, including exhibits,
may be inspected at, and copies may be obtained from, the same places and in the
same manner as set forth in Section 7 (except that they will not be available at
the regional offices of the SEC).
Shiloh Acquisition, Inc.
Dated: January 5, 2001
30
<PAGE> 36
SCHEDULE I
INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE
OFFICERS OF PARENT AND PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT.
The following table sets forth the name, current business address,
citizenship and current principal occupation or employment, and material
occupations, positions, offices or employments and business addresses thereof
for the past five years of each director and executive officer of Parent. All of
the persons listed below are citizens of the United States. Unless otherwise
indicated, the current business address of each person is 155 Grand Avenue,
Oakland, CA 94612.
<TABLE>
<CAPTION>
CURRENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND CURRENT MATERIAL POSITIONS HELD DURING THE
BUSINESS ADDRESS PAST FIVE YEARS AND BUSINESS ADDRESSES THEREOF
---------------- ----------------------------------------------
<S> <C>
Thomas B. Crowley, Jr. .............. Thomas B. Crowley, Jr. has been Chairman of the Board of
Directors, President and Chief Executive Officer of Parent
since May 1994.
Philip E. Bowles..................... Philip E. Bowles has been a Director of Parent since January
1987, and has served as a member of the Audit and
Compensation Committee of Parent since May 1987.
Additionally, Mr. Bowles is President of Bowles Farming
Company, Inc., the Managing Partner for B&N Mineras
Partnership, and Secretary and a Director for Midland
Tractor Company, Inc.(1)
Molly M. Crowley..................... Molly M. Crowley has been a Director of Parent since July
1994. Ms. Crowley is self-employed.(2)
Gary L. Depolo....................... Gary L. Depolo has been a Director of Parent since June
1994. Mr. Depolo is a Director of Foster Farms and Jones
Sand Company. Mr. Depolo is self-employed.(3)
William A. Pennella.................. William A. Pennella has been Vice Chairman of the Board of
Directors of Parent since September 2000. Mr. Pennella has
been an Executive Vice President of Parent since January
1996.
Leland S. Prussia.................... Leland S. Prussia has been a Director of Parent since June
1994. Mr. Prussia has been a Director and consultant for
ePlanning, Inc. since March 1999.(4)
James B. Rettig...................... James B. Rettig has been a Director of Parent since May
1975. Mr. Rettig is retired.
Cameron W. Wolfe, Jr. ............... Cameron W. Wolfe has been a Director of Parent since June
1989. Mr. Wolfe is also a partner in the law firm of Orrick,
Herrington & Sutcliffe LLP.(5)
James A. Juergens.................... James A. Juergens has been Vice President, Risk Management,
of Parent since March 1991.
Edgar B. Love........................ Edgar B. Love has been Corporate Counsel for Parent since
December 1988 and has been Corporate Secretary for Parent
since May 2000.
Michael Lucero....................... Michael Lucero has been Vice President, Purchasing, for
Parent since July 1990.
Albert M. Marucco.................... Albert M. Marucco has been Vice President and Treasurer of
Parent since November 1982.
Niel E. Nielsen...................... Niel E. Nielsen has been Director of Compensation and
Benefits for Parent since January 1993.
Nancy G. Ritter...................... Nancy G. Ritter has been Vice President, Information
Technology, of Parent since May 2000. From May 1995 to May
2000, Ms. Ritter held various information technology
positions for Parent.
</TABLE>
S-1
<PAGE> 37
<TABLE>
<CAPTION>
CURRENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND CURRENT MATERIAL POSITIONS HELD DURING THE
BUSINESS ADDRESS PAST FIVE YEARS AND BUSINESS ADDRESSES THEREOF
---------------- ----------------------------------------------
<S> <C>
Susan L. Rodgers..................... Susan L. Rodgers has been Director of Human Resources for
Parent since November 1996. From Jan 1980 to October 1996,
Ms. Rodgers was Director of Human Resources for Crowley
American Transport.
Richard L. Swinton................... Richard L. Swinton has been Vice President, Tax and Audit,
for Parent since September 2000. From 1994 to 2000, Mr.
Swinton served as Corporate Controller of Parent.
William P. Verdon.................... William P. Verdon has been Senior Vice President and General
Counsel of Parent since April 1992. Mr. Verdon is also a
Director of Signal Mutual Insurance Co.
</TABLE>
---------------
(1) Mr. Bowles' business address is 505 Sansome Street, Suite 1975, San
Francisco, CA 94111.
(2) Ms. Crowley's business address is 55 Hazel Lane, Piedmont, CA 94612.
(3) Mr. Depolo's business address is 37 Charles Hill Circle, Orinda, CA 94563.
(4) Mr. Prussia's business address is 650 California Street, 29th Floor, San
Francisco, CA 94108.
(5) Mr. Wolfe's business address is 400 Sansome Street, San Francisco, CA 94111.
2. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER.
The following table sets forth the name, current business address,
citizenship and current principal occupation or employment, and material
occupations, positions, offices or employments for the past five years of each
director and executive officer of Purchaser. All of the persons listed below are
citizens of the United States. The current business address of each person is
155 Grand Avenue, Oakland, CA 94612.
<TABLE>
<CAPTION>
NAME AND CURRENT CURRENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
BUSINESS ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
---------------- --------------------------------------------------
<S> <C>
Thomas B. Crowley, Jr. .............. Thomas B. Crowley, Jr. has been President of Purchaser since
December 20, 2000. He has been Chairman of the Board of
Directors, President and Chief Executive Officer of Parent
since May 1994.
Edgar B. Love........................ Mr. Love, the sole Director of Purchaser, has been Corporate
Counsel for Parent since December 1988 and Corporate
Secretary for Parent since May 2000.
Richard L. Swinton................... Richard L. Swinton has been Chief Financial Officer of
Purchaser since December 20, 2000. Mr. Swinton has also been
Vice President, Tax and Audit, for Parent since September
2000. From 1994 to 2000, Mr. Swinton served as Corporate
Controller of Parent.
William P. Verdon.................... William P. Verdon has been Secretary of Purchaser since
December 20, 2000. Mr. Verdon has also been Senior Vice
President and General Counsel of Parent since April 1992. He
is also a Director of Signal Mutual Insurance Co.
</TABLE>
S-2
<PAGE> 38
Manually signed facsimiles of the Letter of Transmittal, properly
completed, will be accepted. The Letter of Transmittal and certificates
evidencing Shares and any other required documents should be sent or delivered
by each stockholder or his broker, dealer, commercial bank, trust company or
other nominee to the Depositary at one of its addresses set forth below:
The Depositary for the Offer is:
CITIBANK, N.A.
By Facsimile Transmission
(for Eligible Institutions only):
(212) 505-2248
Confirm by Telephone:
(212) 270-0808
By Overnight Courier
Citibank, N.A.
915 Broadway, 5th Floor
New York, New York 10010
By Mail
Citibank, N.A.
P.O. Box 685
Old Chelsea Station
New York, New York 10113
By Hand
Citibank, N.A.
Corporate Trust Window
111 Wall Street, 14th Floor
New York, New York 10043
OTHER INFORMATION
Questions or requests for assistance may be directed to the Information
Agent at its address and telephone numbers listed below. Additional copies of
this Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may be obtained from the Information Agent. A stockholder 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. LOGO)
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
CALL TOLL FREE (800) 322-2885
