<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
------------------------
THE TURNER CORPORATION
(NAME OF SUBJECT COMPANY)
RWE AG
HOCHTIEF AG
BETA ACQUISITION CORP.
(BIDDERS)
COMMON STOCK, PAR VALUE $1.00 PER SHARE (INCLUDING THE ASSOCIATED RIGHTS)
SERIES C 8 1/2% CONVERTIBLE PREFERENCE STOCK, PAR VALUE $1.00 PER SHARE
SERIES D 8 1/2% CONVERTIBLE PREFERENCE STOCK, PAR VALUE $1.00 PER SHARE
(TITLE OF CLASS OF SECURITIES)
COMMON STOCK: 900273103
SERIES C 8 1/2% CONVERTIBLE PREFERENCE STOCK: NONE
SERIES D 8 1/2% CONVERTIBLE PREFERENCE STOCK: NONE
(CUSIP NUMBER OF CLASS OF SECURITIES)
------------------------
DR.-ING. BERNHARD BURKLIN
HOCHTIEF AG
OPERNPLATZ 2
45128 ESSEN
GERMANY
(011) 49-201-824-0
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES
AND COMMUNICATIONS ON BEHALF OF BIDDERS)
WITH COPIES TO:
SPENCER D. KLEIN, ESQ.
SHEARMAN & STERLING
599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
212-848-4000
------------------------
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
TRANSACTION VALUATION AMOUNT OF FILING FEE
- -------------------------------------------------------------------------------------------------------
<S> <C>
$370,105,100.88* $74,021.02**
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
</TABLE>
* Calculated by multiplying $28.625, the per share common stock tender offer
price, by 13,753,331, the sum of the 9,181,456 currently outstanding shares
of Common Stock, the 2,400,000 shares of Common Stock currently issuable
upon conversion of Series C 8 1/2% Convertible Preference Stock and Series D
8 1/2% Convertible Preference Stock, and the 2,171,875 shares of Common
Stock currently issuable pursuant to stock options, restricted stock units
and directors stock awards and subtracting from such sum $23,583,999 (which
equals $12.63, the average exercise price for each stock option, multiplied
by 1,867,300, the number of shares subject to stock options).
** Calculated as 1/50 of 1% of the transaction value.
[ ] Check box if any part of the fee is offset as provided for by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the form of schedule and the date of its filing. Check box if
any part of the fee is offset as provided by Rule 0-11(a)(2) and identify
the filing with which the offsetting fee was previously paid. Identify the
previous filing by registration statement number, or the Form of Schedule
and the date of its filing.
AMOUNT PREVIOUSLY PAID: NOT APPLICABLE.
FORM OR REGISTRATION NO.: NOT APPLICABLE.
FILING PARTY: NOT APPLICABLE.
DATE FILED: NOT APPLICABLE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Person Above
RWE AG
- ---------------------------------------------------------------------------
2. Check the Appropriate Box if a member of a Group
(a) [ ] (b) [ ]
- ---------------------------------------------------------------------------
3. SEC Use Only
- ---------------------------------------------------------------------------
4. Sources of Funds AF
- ---------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(e) or 2(f) [ ]
- ---------------------------------------------------------------------------
6. Citizenship or Place of Incorporation
Germany
- ---------------------------------------------------------------------------
7. Aggregate Amount Beneficially Owned by Each Reporting Person
2,756,278 shares of common stock that may be deemed
beneficially owned pursuant to Stockholders Agreement
described in Section 11 ("Purpose of the Offer; Plans for
the Company after the Offer and the Merger") of the Offer to
Purchase.
- ---------------------------------------------------------------------------
8. Check Box if the Aggregate Amount in Row (7) Excludes
Certain Shares [ ]
- ---------------------------------------------------------------------------
9. Percent of Class Represented by Amount in Row (7)
23.8%
- ---------------------------------------------------------------------------
10. Type of Reporting Person CO
- ---------------------------------------------------------------------------
</TABLE>
2
<PAGE> 3
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Person Above
HOCHTIEF AG
- ---------------------------------------------------------------------------
2. Check the Appropriate Box if a member of a Group
(a) [ ] (b) [ ]
- ---------------------------------------------------------------------------
3. SEC Use Only
- ---------------------------------------------------------------------------
4. Sources of Funds
WC/BK
- ---------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(e) or 2(f)
[ ]
- ---------------------------------------------------------------------------
6. Citizenship or Place of Incorporation
Germany
- ---------------------------------------------------------------------------
7. Aggregate Amount Beneficially Owned by Each Reporting Person
2,756,278 shares of common stock that may be deemed
beneficially owned pursuant to Stockholders Agreement
described in Section 11 ("Purpose of the Offer; Plans for
the Company after the Offer and the Merger") of the Offer to
Purchase.
- ---------------------------------------------------------------------------
8. Check Box if the Aggregate Amount in Row (7) Excludes
Certain Shares
[ ]
- ---------------------------------------------------------------------------
9. Percent of Class Represented by Amount in Row (7)
23.8%
- ---------------------------------------------------------------------------
10. Type of Reporting Person
CO
- ---------------------------------------------------------------------------
</TABLE>
3
<PAGE> 4
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Person Above
BETA ACQUISITION CORP.
- ---------------------------------------------------------------------------
2. Check the Appropriate Box if a member of a Group
(a) [ ] (b) [ ]
- ---------------------------------------------------------------------------
3. SEC Use Only
- ---------------------------------------------------------------------------
4. Sources of Funds
AF
- ---------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(e) or 2(f)
[ ]
- ---------------------------------------------------------------------------
6. Citizenship or Place of Incorporation
Delaware
- ---------------------------------------------------------------------------
7. Aggregate Amount Beneficially Owned by Each Reporting Person
2,756,278 shares of common stock that may be deemed
beneficially owned pursuant to Stockholders Agreement
described in Section 11 ("Purpose of the Offer; Plans for
the Company after the Offer and the Merger") of the Offer to
Purchase.
- ---------------------------------------------------------------------------
8. Check Box if the Aggregate Amount in Row (7) Excludes
Certain Shares
[ ]
- ---------------------------------------------------------------------------
9. Percent of Class Represented by Amount in Row (7)
23.8%
- ---------------------------------------------------------------------------
10. Type of Reporting Person
CO
- ---------------------------------------------------------------------------
</TABLE>
4
<PAGE> 5
This Statement relates to the offer by Beta Acquisition Corp., a Delaware
corporation ("Purchaser") and an indirect wholly owned subsidiary of HOCHTIEF
AG, a corporation organized under the laws of Germany ("Parent"), to purchase
(i) all the issued and outstanding shares of common stock, par value $1.00 per
share ("Company Common Stock"), including the associated rights (the "Rights")
issued pursuant to the Rights Agreement, dated as of September 21, 1998, between
the Company (as defined below) and First Chicago Trust Company of New York, as
rights agent (the "Rights Agreement"), of The Turner Corporation, a Delaware
corporation (the "Company"), and (ii) all the issued and outstanding shares of
(A) Series C 8 1/2% Convertible Preference Stock, par value $1.00 per share, of
the Company ("Series C Preferred Stock") and (B) Series D 8 1/2% Convertible
Preference Stock, par value $1.00 per share, of the Company ("Series D Preferred
Stock" and, together with the Series C Preferred Stock being hereinafter
collectively referred to as the "Company Preferred Stock"), at a price of
$28.625 per share of Company Common Stock (such amount being the "Per Share
Amount"), $4,770.8333 per share of Series C Preferred Stock and $4,293.75 per
share of Series D Preferred Stock, in each case, net to the seller in cash, upon
the terms and subject to the conditions set forth in the Offer to Purchase,
dated August 20, 1999, and in the related Letters of Transmittal (each, a
"Letter of Transmittal"; which, together with the Offer to Purchase and any
amendments or supplements thereto collectively constitute the "Offer"). Shares
of Company Common Stock and shares of Company Preferred Stock are hereinafter
collectively referred to as "Shares". Parent is an indirect subsidiary of RWE
AG, a corporation organized under the laws of Germany ("RWE").
This Tender Offer Statement on Schedule 14D-1 (this "Statement") also
constitutes a Statement on Schedule 13D with respect to the acquisition by RWE,
Parent and Purchaser of beneficial ownership of the shares of Company Common
Stock and Company Preferred Stock referred to on the cover hereof. The item
numbers and responses thereto below are in accordance with the requirements of
Schedule 14D-1.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is The Turner Corporation, a Delaware
corporation (the "Company"), which has its principal executive offices at 375
Hudson Street, New York, New York 10014.
(b) The information set forth in the Introduction of the Offer to Purchase
and Section 1 ("Terms of the Offer; Expiration Date") of the Offer to Purchase
is incorporated herein by reference.
(c) The information concerning the principal market in which the Shares are
traded and certain high and low sales prices for the Shares in such principal
market set forth in Section 6 ("Price Range of Shares; Dividends") of the Offer
to Purchase is incorporated by reference.
ITEM 2. IDENTITY AND BACKGROUND
(a)-(d) and (g) This Statement is filed by RWE, Purchaser and Parent. The
information concerning the name, state or other place of organization, principal
business and address of the principal office of each of RWE, Purchaser and
Parent, and the information concerning the name, business address, present
principal occupation or employment and the name, principal business and address
of any corporation or other organization in which such employment or occupation
is conducted, material occupations, positions, offices or employments during the
last five years and citizenship of each of the executive officers and directors
of Purchaser and each of the members of the executive boards and supervisory
boards of RWE and Parent are set forth in the Introduction, Section 8 ("Certain
Information Concerning Purchaser and Parent") and Schedule I of the Offer to
Purchase and are incorporated herein by reference.
(e) and (f) During the last five years, none of RWE, Purchaser or Parent,
and, to the best knowledge of RWE, Purchaser and Parent, none of the persons
listed in Schedule I of the Offer to Purchase has been (i) convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any violation
of such laws.
5
<PAGE> 6
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) The information set forth in Section 8 ("Certain Information Concerning
RWE, Purchaser and Parent") and Section 10 ("Background of the Offer; Contacts
with the Company; the Merger Agreement and Related Agreements") of the Offer to
Purchase is incorporated herein by reference.
(b) The information set forth in the Introduction, Section 7 ("Certain
Information Concerning the Company"), Section 8 ("Certain Information Concerning
RWE, Purchaser and Parent"), Section 10 ("Background of the Offer; Contacts with
the Company; the Merger Agreement and Related Agreements") and Section 11
("Purpose of the Offer; Plans for the Company After the Offer and the Merger")
of the Offer to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(c) The information set forth under Section 9 ("Financing of the Offer
and the Merger") of the Offer to Purchase is incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in the Introduction, Section 10
("Background of the Offer; Contacts with the Company; the Merger Agreement and
Related Agreements") and Section 11 ("Purpose of the Offer; Plans for the
Company After the Offer and the Merger") of the Offer to Purchase is
incorporated herein by reference.
(f) and (g) The information set forth in Section 13 ("Effect of the Offer
on the Market for Shares; Exchange Listings and Exchange Act Registration") of
the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) and (b) The information set forth in Section 8 ("Certain Information
Concerning RWE, Purchaser and Parent") and Section 10 ("Background of the Offer;
Contacts with the Company; the Merger Agreement and Related Agreements") of the
Offer to Purchase is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, Section 8 ("Certain
Information Concerning RWE, Purchaser and Parent"), Section 10 ("Background of
the Offer; Contacts with the Company; the Merger Agreement and Related
Agreements") and Section 11 ("Purpose of the Offer; Plans for the Company After
the Offer and the Merger") of the Offer to Purchase is incorporated herein by
reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and Section 16 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 8 ("Certain Information Concerning
RWE, Purchaser and Parent") of the Offer to Purchase is incorporated herein by
reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Section 11 ("Purpose of the Offer; Plans
for the Company After the Offer and the Merger") of the Offer to Purchase is
incorporated herein by reference.
6
<PAGE> 7
(b) and (c) The information set forth under Section 15 ("Certain Legal
Matters and Regulatory Approvals") of the Offer to Purchase is incorporated
herein by reference.
(d) The information set forth under Section 13 ("Effect of the Offer and
Merger on the Market for the Shares, Exchange Listing and Exchange Act
Registration") of the Offer to Purchase is incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in the Offer to Purchase and Letter of
Transmittal and the Agreement and Plan of Merger, dated as of August 16, 1999,
among parent, Purchaser and the Company, copies of which are attached hereto as
Exhibits (a)(1), (a)(2), (a)(3) and (c)(1), is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C>
(a)(1) Form of Offer to Purchase, dated August 20, 1999.
(a)(2) Form of Letter of Transmittal with Respect to the Company
Common Stock.
(a)(3) Form of Letter of Transmittal with Respect to the Company
Preferred Stock.
(a)(4) Form of Notice of Guaranteed Delivery with Respect to the
Company Common Stock.
(a)(5) Form of Notice of Guaranteed Delivery with Respect to the
Company Preferred Stock.
(a)(6) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(7) Form of Letter from Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees to Clients.
(a)(8) Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
(a)(9) Summary Advertisement as published in The Wall Street
Journal on August 20, 1999.
(a)(10) Press Release issued by Parent on August 16, 1999.
(a)(11) Press Release issued by the Company on August 16, 1999.
(a)(12) Press Release issued by Parent on August 20, 1999.
(b) None.
(c)(1) Agreement and Plan of Merger, dated as of August 16, 1999,
among Parent, Purchaser and the Company.
(c)(2) Stockholders Agreement, dated as of August 16, 1999, among
Ellis T. Gravette, Thomas C. Leppert, Robert E. Fee, Leif
Lomo, G. Jeffrey Records, Jr., Walter G. Ehlers, Charles H.
Moore, Jr., John O. Whitney, Donald G. Sleeman, Heinrich
Baumann-Steiner, A. Gary Fieger, Peter K. Steiner, Fieger
International Inc., EBSPSW Holding AG, Parent and Purchaser.
(c)(3) Confidentiality Agreement, dated as of April 1, 1999,
between Parent and the Company.
(d) None.
(e) Not applicable.
(f) None.
</TABLE>
7
<PAGE> 8
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
August 20, 1999
RWE AG
BY: /S/ RUDOLF SCHWAN
------------------------------------
NAME: Rudolf Schwan
TITLE: Member of the Executive Board
RWE AG
BY: /s/ CLEMENS BORSIG
------------------------------------
NAME: Clemens Borsig
TITLE: Chief Financial Officer
8
<PAGE> 9
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
August 20, 1999
HOCHTIEF AG
BY: /S/ HANS-PETER KEITEL
------------------------------------
NAME: Hans-Peter Keitel
TITLE: Chairman and Chief Executive
Officer
HOCHTIEF AG
BY: /S/ HANS-WOLFGANG KOCH
------------------------------------
NAME: Hans-Wolfgang Koch
TITLE: Member of the Executive Board
9
<PAGE> 10
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
August 20, 1999
BETA ACQUISITION CORP.
BY:/S/ BERNHARD BURKLIN
------------------------------------
NAME: Bernhard Burklin
TITLE: Vice President
10
<PAGE> 11
EXHIBIT INDEX
EXHIBIT
<TABLE>
<S> <C>
(a)(1) Form of Offer to Purchase, dated August 20, 1999.
(a)(2) Form of Letter of Transmittal with Respect to the Company
Common Stock.
(a)(3) Form of Letter of Transmittal with Respect to the Company
Preferred Stock.
(a)(4) Form of Notice of Guaranteed Delivery with Respect to the
Company Common Stock.
(a)(5) Form of Notice of Guaranteed Delivery with Respect to the
Company Preferred Stock.
(a)(6) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(7) Form of Letter from Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees to Clients.
(a)(8) Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
(a)(9) Summary Advertisement as published in The Wall Street
Journal on August 20, 1999.
(a)(10) Press Release issued by Parent on August 16, 1999.
(a)(11) Press Release issued by the Company on August 16, 1999.
(a)(12) Press Release issued by Parent on August 20, 1999.
(b) None.
(c)(1) Agreement and Plan of Merger, dated as of August 16, 1999,
among Parent, Purchaser and the Company.
(c)(2) Stockholders Agreement, dated as of August 16, 1999, among
Ellis T. Gravette, Thomas C. Leppert, Robert E. Fee, Leif
Lomo, G. Jeffrey Records, Jr., Walter G. Ehlers, Charles H.
Moore, Jr., John O. Whitney, Donald G. Sleeman, Heinrich
Baumann-Steiner, A. Gary Fieger, Peter K. Steiner, Fieger
International Inc., EBSPSW Holding AG, Parent and Purchaser.
(c)(3) Confidentiality Agreement, dated as of April 1, 1999,
between Parent and the Company.
(d) None.
(e) Not applicable.
(f) None.
</TABLE>
11
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS),
SERIES C 8 1/2% CONVERTIBLE PREFERENCE STOCK
AND
SERIES D 8 1/2% CONVERTIBLE PREFERENCE STOCK
OF
THE TURNER CORPORATION
AT
$28.625 NET PER SHARE OF COMMON STOCK,
$4,770.8333 NET PER SHARE OF SERIES C 8 1/2% CONVERTIBLE PREFERENCE STOCK
AND
$4,293.75 NET PER SHARE OF SERIES D 8 1/2% CONVERTIBLE PREFERENCE STOCK
BY
BETA ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
HOCHTIEF AG
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, SEPTEMBER 17, 1999, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (i) THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST
THE NUMBER OF SHARES OF COMMON STOCK, PAR VALUE $1.00 PER SHARE ("COMPANY COMMON
STOCK"), SHARES OF SERIES C 8 1/2% CONVERTIBLE PREFERENCE STOCK ("SERIES C
PREFERRED STOCK") AND SHARES OF SERIES D 8 1/2% CONVERTIBLE PREFERENCE STOCK
("SERIES D PREFERRED STOCK" AND, TOGETHER WITH THE SERIES C PREFERRED STOCK, THE
"COMPANY PREFERRED STOCK"; SHARES OF THE COMPANY PREFERRED STOCK, TOGETHER WITH
SHARES OF THE COMPANY COMMON STOCK, THE "SHARES") (DETERMINED AS IF SHARES OF
COMPANY PREFERRED STOCK HAVE BEEN CONVERTED INTO SHARES OF COMPANY COMMON STOCK)
THAT WHEN ADDED TO THE SHARES ALREADY OWNED BY PARENT SHALL CONSTITUTE
TWO-THIRDS OF THE THEN OUTSTANDING SHARES OF COMPANY COMMON STOCK ON A FULLY
DILUTED BASIS; AND (ii) ANY APPLICABLE WAITING PERIOD UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, HAVING EXPIRED
OR BEEN TERMINATED.
------------------------
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 AND RECOMMENDS THAT STOCKHOLDERS 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 (1) 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 (2) request such stockholder's broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction for such stockholders. 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 also be obtained from the
Information Agent or from brokers, dealers, commercial banks or trust companies.
The Information Agent for the Offer is:
INISFREE LOGO
August 20, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
INTRODUCTION...................................................... 1
1. Terms of the Offer; Expiration Date......................... 4
2. Acceptance for Payment and Payment for Shares............... 6
3. Procedures for Accepting the Offer and Tendering Shares..... 6
4. Withdrawal Rights........................................... 9
5. Certain Federal Income Tax Consequences..................... 9
6. Price Range of Shares; Dividends............................ 10
7. Certain Information Concerning the Company.................. 11
8. Certain Information Concerning RWE, Purchaser and Parent.... 15
9. Financing of the Offer and the Merger....................... 17
10. Background of the Offer; Contacts with the Company; the
Merger Agreement and Related Agreements..................... 18
11. Purpose of the Offer; Plans for the Company After the Offer
and the Merger.............................................. 33
12. Dividends and Distributions................................. 35
13. Effect of the Offer on the Market for Shares, Exchange
Listings and Exchange Act Registration...................... 36
14. Certain Conditions of the Offer............................. 37
15. Certain Legal Matters and Regulatory Approvals.............. 38
16. Fees and Expenses........................................... 40
17. Miscellaneous............................................... 41
Schedule I. Directors and Executive Officers of RWE, Parent and I-1
Purchaser....................................................
</TABLE>
<PAGE> 3
To the Holders of Common Stock,
Series C 8 1/2% Convertible Preference Stock and
Series D 8 1/2% Convertible Preference Stock of
The Turner Corporation:
INTRODUCTION
Beta Acquisition Corp., a Delaware corporation ("Purchaser") and an
indirect wholly owned subsidiary of HOCHTIEF AG, a corporation organized under
the laws of Germany ("Parent"), hereby offers to purchase (i) all the issued and
outstanding shares of common stock, par value $1.00 per share ("Company Common
Stock"), including the associated rights (the "Rights") issued pursuant to the
Rights Agreement, dated as of September 21, 1998, between the Company (as
defined below) and First Chicago Trust Company of New York, as rights agent (the
"Rights Agreement"), of The Turner Corporation, a Delaware corporation (the
"Company"), and (ii) all the issued and outstanding shares of (A) Series C
8 1/2% Convertible Preference Stock, par value $1.00 per share, of the Company
("Series C Preferred Stock"), and (B) Series D 8 1/2% Convertible Preference
Stock, par value $1.00 per share, of the Company ("Series D Preferred Stock"
and, together with the Series C Preferred Stock, the "Company Preferred Stock"),
at a price of $28.625 per share of Company Common Stock (such amount being the
"Per Share Amount"), $4,770.8333 per share of Series C Preferred Stock and
$4,293.75 per share of Series D Preferred Stock, in each case, 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 Letters of Transmittal (each,
a "Letter of Transmittal", which together with this Offer to Purchase and any
amendments or supplements hereto or thereto collectively constitute the
"Offer"). Shares of Company Common Stock and shares of Company Preferred Stock
are hereinafter collectively referred to as "Shares".
The price per share of Company Preferred Stock was determined by
multiplying $28.625, the offer price per share of Company Common Stock, by the
number of shares of Company Common Stock into which each share of Company
Preferred Stock is convertible (the "Preferred Stock Conversion Ratio") under
the applicable certificate of designation of such Company Preferred Stock.
Currently, each share of Series C Preferred Stock is convertible into 166 2/3
shares of Company Common Stock and each share of Series D Preferred Stock is
convertible into 150 shares of Company Common Stock. In the event that the
Company takes any action that causes the Preferred Stock Conversion Ratio to
change, Purchaser may (subject to the provisions of the Merger Agreement) make
such adjustments to the purchase price for each share of Company Preferred Stock
as it deems appropriate to reflect such change in the Preferred Stock Conversion
Ratio.
Purchaser is a corporation formed by Parent in connection with the Offer
and the transactions contemplated thereby. Parent is an indirect subsidiary of
RWE AG, a corporation organized under the laws of Germany ("RWE"). For
information concerning RWE, Parent and Purchaser, see Section 8.
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. Purchaser will pay all charges and expenses of
First Chicago Trust Company of New York (the "Depositary") and Innisfree M&A
Incorporated (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 EACH OF THE OFFER AND THE MERGER (AS DEFINED BELOW) IS FAIR TO,
AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY, AND RECOMMENDS
THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE
OFFER.
PaineWebber Incorporated ("PaineWebber"), the Company's financial advisor,
has delivered to the Board its written opinion that the consideration to be
received by the stockholders of the Company pursuant to each of the Offer and
the Merger is fair to such stockholders from a financial point of view. A copy
of the opinion of PaineWebber 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
<PAGE> 4
"Commission") in connection with the Offer and which is being mailed to
stockholders herewith. Holders of the Shares are encouraged to read such opinion
in its entirety.
PARENT AND PURCHASER HAVE ENTERED INTO A STOCKHOLDERS AGREEMENT WITH
CERTAIN OFFICERS AND DIRECTORS OF THE COMPANY, NAMELY ELLIS T. GRAVETTE, THOMAS
C. LEPPERT, ROBERT E. FEE, LEIF LOMO, G. JEFFREY RECORDS, JR., WALTER G. EHLERS,
CHARLES H. MOORE, JR., JOHN O. WHITNEY, DONALD G. SLEEMAN, HEINRICH
BAUMANN-STEINER, A. GARY FIEGER AND PETER K. STEINER, AS WELL AS WITH CERTAIN
OTHER STOCKHOLDERS OF THE COMPANY, NAMELY FIEGER INTERNATIONAL INC., AN
AFFILIATE OF MR. FIEGER, AND EBSPSW HOLDING AG ("EBSPSW"), THE COMPANY'S LARGEST
STOCKHOLDER (COLLECTIVELY, THE "PRINCIPAL STOCKHOLDERS"), PURSUANT TO WHICH,
AMONG OTHER THINGS, THE PRINCIPAL STOCKHOLDERS HAVE AGREED TO (I) TENDER THEIR
SHARES INTO THE OFFER (WHICH SHARES CURRENTLY REPRESENT IN THE AGGREGATE
APPROXIMATELY 23.8% OF THE OUTSTANDING VOTING POWER OF THE COMPANY), PROVIDED,
HOWEVER, THAT ANY PRINCIPAL STOCKHOLDER WHO WOULD INCUR LIABILITY UNDER SECTION
16(b) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"),
AS A RESULT THEREOF SHALL NOT BE REQUIRED TO TENDER SUCH SHARES TO THE EXTENT
NECESSARY TO AVOID LIABILITY, (II) VOTE SUCH SHARES IN FAVOR OF THE MERGER AND
(III) GRANT TO PURCHASER AN OPTION TO PURCHASE SUCH SHARES AT, IN THE CASE OF
SHARES OF COMPANY COMMON STOCK, THE PER SHARE AMOUNT AND, IN THE CASE OF SHARES
OF COMPANY PREFERRED STOCK, AT AN AMOUNT IN CASH EQUAL TO THE PRODUCT OF THE PER
SHARE AMOUNT MULTIPLIED BY THE NUMBER OF SHARES OF COMPANY COMMON STOCK ISSUABLE
UPON THE CONVERSION OF SUCH SHARES OF COMPANY PREFERRED STOCK, IN EACH CASE UPON
THE TERMS AND SUBJECT TO THE CONDITIONS SET FORTH IN THE STOCKHOLDERS AGREEMENT.
PURCHASER HAS BEEN INFORMED THAT EBSPSW IS THE HOLDER OF ALL OF THE ISSUED AND
OUTSTANDING SHARES OF COMPANY PREFERRED STOCK. SEE "SECTION 10. PURPOSE OF THE
OFFER; PLANS FOR THE COMPANY AFTER THE OFFER AND THE MERGER".
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of August 16, 1999 (the "Merger Agreement"), among Parent, Purchaser and the
Company. The Merger Agreement provides that, among other things, 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"). Following consummation of the Merger, the Company will
continue as the surviving corporation (the "Surviving Corporation") and will
become an indirect wholly owned subsidiary of Parent. At the effective time of
the Merger (the "Effective Time"), (i) each share of Company Common Stock issued
and outstanding immediately prior to the Effective Time (other than any shares
of Company Common Stock held in the treasury of the Company and each share of
Company Common Stock owned by Purchaser, Parent or any direct or indirect wholly
owned subsidiary of Parent or of the Company and other than shares of Company
Common Stock held by stockholders who shall have demanded and perfected
appraisal rights under Delaware Law) shall be canceled and shall be converted
automatically into the right to receive $28.625 in cash (the "Common Stock
Merger Consideration") or any greater price that may be paid per share of
Company Common Stock in the Offer, without interest, and (ii) each share of
Company Preferred Stock issued and outstanding immediately prior to the
Effective Time (other than any shares of Company Preferred Stock held in the
treasury of the Company and each share of Company Preferred Stock owned by
Purchaser, Parent or any direct or indirect wholly owned subsidiary of Parent or
of the Company and other than shares of Company Preferred Stock held by
stockholders who shall have demanded and perfected appraisal rights under
Delaware Law) shall be canceled and shall be converted automatically into the
right to receive an amount in cash equal to the product of the Common Stock
Merger Consideration multiplied by the number of shares of Company Common Stock
into which such share of Company Preferred Stock shall be convertible
immediately prior to the Effective Time (the "Preferred Stock Merger
Consideration"), in each case, without interest. The Merger Agreement is more
fully described in Section 10.
The Merger Agreement provides that, promptly upon the purchase by Purchaser
of Shares pursuant to the Offer and from time to time thereafter, the Board
shall consist of two directors designated by the Board prior to such purchase of
Shares, three directors designated by Purchaser (who may be employees of Parent
or an Affiliate) and four independent directors, and that the Company shall, at
such time, promptly take all actions necessary to cause Purchaser's designees
and new independent directors, if any, to be elected as directors of the
Company, including increasing the size of the Board or securing the resignations
of incumbent
2
<PAGE> 5
directors, or both. The Merger Agreement also provides that notwithstanding the
foregoing, until the earlier of (i) the time Purchaser acquires two-thirds of
the voting power of the then-outstanding Shares on a fully diluted basis and
(ii) the Effective Time, the Company shall not take any action to induce any
member of the Board, as of the date of the Merger Agreement, who are not
employees of the Company to resign from the Board.
The consummation of the Merger is subject to the satisfaction or waiver of
certain conditions, including the closing of the Offer and, if necessary, the
approval and adoption of the Merger Agreement and the transactions contemplated
thereby, including the Merger, by the requisite vote of the stockholders of the
Company. See Section 11. Under the Company's Certificate of Incorporation, the
affirmative vote of the holders of at least two-thirds of the then outstanding
Shares entitled to vote thereon is required to approve and adopt the Merger
Agreement and the Merger. Consequently, if Purchaser acquires pursuant to the
Offer, the Stockholders Agreement or otherwise, at least the number of shares of
Company Common Stock and shares of Company Preferred Stock (determined as if
shares of Company Preferred Stock have been converted into shares of Company
Common Stock) that when added to the Shares already owned by Parent shall
constitute two-thirds of the outstanding shares of Company Common Stock, then
Purchaser will have sufficient voting power to approve and adopt the Merger
Agreement and the Merger without the vote of any other stockholder.
Under Delaware Law, if Purchaser acquires, pursuant to the Offer or
otherwise, at least 90% of the outstanding shares of Company Common Stock and at
least 90% of the outstanding shares of each series of Company Preferred Stock,
Purchaser will be able to approve and adopt the Merger Agreement and the
transactions contemplated thereby, including the Merger, without a vote of the
Company's stockholders (a "Short Form Merger"). 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 soon 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 of Company Common Stock and at
least 90% of the outstanding shares of each series of Company Preferred Stock,
pursuant to the Offer, the Stockholders Agreement 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.
THIS OFFER TO PURCHASE AND THE RELATED LETTERS OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
CERTAIN CONDITIONS OF THE OFFER
The Offer is subject to the fulfillment of certain conditions, including
the conditions set forth below. See Section 14, which sets forth in full the
conditions to the Offer. Purchaser reserves the right (subject to the terms and
conditions of the Merger Agreement and the applicable rules and regulations of
the Commission) to waive each of the conditions to the obligations of Purchaser
to consummate the Offer.
THE MINIMUM CONDITION. THE CONSUMMATION OF THE OFFER IS CONDITIONED UPON
THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE
OFFER AT LEAST THE NUMBER OF SHARES OF COMPANY COMMON STOCK AND SHARES OF
COMPANY PREFERRED STOCK (DETERMINED AS IF SHARES OF COMPANY PREFERRED STOCK HAVE
BEEN CONVERTED INTO SHARES OF COMPANY COMMON STOCK) THAT WHEN ADDED TO THE
SHARES ALREADY OWNED BY PARENT SHALL CONSTITUTE TWO-THIRDS OF THE THEN
OUTSTANDING SHARES OF COMPANY COMMON STOCK ON A FULLY DILUTED BASIS (I.E., AFTER
GIVING EFFECT TO THE ISSUANCE OF ALL SHARES OF COMPANY COMMON STOCK ISSUABLE
UPON THE CONVERSION OF SHARES OF COMPANY PREFERRED STOCK OR ANY OTHER
CONVERTIBLE SECURITIES AND UPON THE EXERCISE OF ANY OPTIONS, WARRANTS OR RIGHTS
(OTHER THAN THE RIGHTS)).
The Company has advised Purchaser that, as of August 13, 1999, (i)
9,181,456 shares of Company Common Stock, 9,000 shares of Series C Preferred
Stock and 6,000 shares of Series D Preferred Stock were issued and outstanding,
(ii) 558,390 shares of Company Common Stock and no shares of Company Preferred
Stock were held in the treasury of the Company, and (iii) 4,571,875 shares of
Company Common Stock were reserved for future issuance pursuant to (A) employee
stock options or stock incentive rights granted pursuant to the Company's 1998
Stock Incentive Plan, the Company's 1997 Non-Qualified Stock Option Plan, the
3
<PAGE> 6
Company's 1992 Stock Plan and any other plan, program or arrangement providing
for the issuance, grant or purchase of any other interest in respect of the
capital stock of the Company or any of its subsidiaries (collectively the
"Company Stock Plans") and (B) conversion rights with respect to Company
Preferred Stock. As of such date, Parent owned no Shares. As a result, as of
such date, the Minimum Condition would be satisfied if Purchaser acquired
9,168,888 shares of Company Common Stock (assuming conversion of all shares of
Company Preferred Stock into shares of Company Common Stock). Also, as of such
date, Purchaser could effect a Short Form Merger if Purchaser acquired 8,263,311
shares of Company Common Stock, 8,100 shares of Series C Preferred Stock and
5,400 shares of Series D Preferred Stock.
THE HSR CONDITION. THE CONSUMMATION OF THE OFFER IS CONDITIONED UPON THE
EXPIRATION OR TERMINATION, PRIOR TO THE EXPIRATION DATE (AS DEFINED BELOW), OF
THE WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF
1976, AS AMENDED (THE "HSR ACT"), APPLICABLE TO THE ACQUISITION OF THE SHARES
PURSUANT TO THE OFFER.
As promptly as practicable, RWE, as the ultimate parent company of Parent
and Purchaser, will file with the Federal Trade Commission (the "FTC") and the
Antitrust Division of the Department of Justice (the "Antitrust Division") a
Premerger Notification and Report Form under the HSR Act with respect to the
Offer. Under the provisions of the HSR Act applicable to the Offer, the purchase
of Shares pursuant to the Offer may not be consummated until the expiration of a
15-calendar day waiting period following the filing by RWE, unless such waiting
period is earlier terminated by the FTC or extended by request from the FTC or
the Antitrust Division for additional information or documentary material prior
to the expiration of the waiting period. No separate waiting period would apply
to the purchase of Shares pursuant to the Stockholders Agreement after the
expiration of the waiting period applicable to the Offer. If however, the Offer
is terminated prior to the expiration of the 15-day waiting period, the parties
would have to refile Premerger Notification and Report Forms, and a 30-day
waiting period would apply to the purchase of Shares pursuant to the
Stockholders Agreement running from the date of the original filing. Pursuant to
the HSR Act, RWE will request early termination of the waiting period applicable
to the Offer. There can be no assurance, however, that the 15-day HSR Act
waiting period will be terminated early.Prior to the expiration or termination
of such waiting period, the FTC or the Antitrust Division may extend any such
waiting period by requesting additional information from RWE with respect to the
Offer, or from RWE or the Company with respect to the Stockholders Agreement. If
such a request is made with respect to the purchase of Shares in the Offer, the
waiting period will expire at 11:59 p.m., New York City time, on the tenth
calendar day after substantial compliance by RWE with such a request.
Thereafter, the waiting period may only be extended by court order. If the
purchase of Shares is delayed pursuant to a request by the FTC or the Antitrust
Division for additional information or documentary material pursuant to the HSR
Act, the Offer shall be extended until five business days after the expiration
or termination of the applicable waiting period, subject to the right of Parent,
Purchaser or the Company to terminate the Offer. Only one extension of such
waiting period pursuant to a request for additional information is authorized by
the HSR Act and the rules promulgated thereunder, except by court order. Any
such extension of the waiting period will not give rise to any withdrawal rights
not otherwise provided for by applicable law. See Section 4. It is a condition
to the Offer that the waiting period applicable under the HSR Act to the Offer
expire or be terminated. See Section 14. See also Section 15 for additional
information regarding the HSR Act.
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 prior to the Expiration Date and not withdrawn as permitted by Section
4 at the earliest time that all conditions to the Offer are satisfied or waived
by Purchaser.
The term "Expiration Date" means 12:00 midnight, New York City time, on
September 17, 1999, 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 event the term "Expiration Date" shall mean the
latest time and date at which the Offer, as so extended by Purchaser, shall
expire.
4
<PAGE> 7
Purchaser expressly reserves the right (subject to the terms and conditions
of the Merger Agreement), from time to time, including upon the occurrence of
any of the conditions specified in Section 14, to extend the period of time
during which the Offer is open, including the occurrence of any of the
conditions specified in Section 14, by giving oral or written notice of such
extension to the Depositary. During any such extension, all Shares previously
tendered and not withdrawn will remain subject to the Offer, subject to the
rights of a tendering stockholder to withdraw such stockholder's Shares. See
Section 4.
Subject to the applicable regulations of the Commission, Purchaser also
reserves the right (subject to the terms and conditions of the Merger
Agreement), from time to time, (i) to delay acceptance for payment of, or,
regardless of whether such Shares were theretofore accepted for payment, payment
for, any Shares pending receipt of any regulatory approval specified in Section
15, (ii) to terminate the Offer and not accept for payment any Shares upon the
occurrence of any of the conditions specified in Section 14, and (iii) to waive
any condition or otherwise amend the Offer in any respect, by giving oral or
written notice of such delay, termination, waiver or amendment to the Depositary
and by making a public announcement thereof. The Merger Agreement provides that,
without the consent of the Company, Purchaser will not (i) decrease the price
per Share payable in the Offer, (ii) reduce the number of Shares to be purchased
in the Offer, (iii) change the form of consideration paid by Purchaser for the
Shares, (iv) impose conditions to the Offer in addition to those set forth in
Section 14, or (v) make any other change in the terms of the Offer that is
materially adverse to the holders of the Shares. Purchaser acknowledges that (i)
Rule 14e-1(c) under the Exchange Act requires Purchaser to pay the consideration
offered or return the Shares tendered promptly after the termination or
withdrawal of the Offer and (ii) Purchaser may not delay acceptance for payment
of, or payment for (except as provided in clause (i) of the first sentence of
this paragraph), any Shares upon the occurrence of any of the conditions
specified in Section 14 without extending the period of time during which the
Offer is open.
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 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) and
14d-6(d) 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 shall 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)
and l4d-6(d) 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 other than a Saturday, Sunday or federal holiday and consists of the time
period from 12:01 a.m. through 12:00 midnight, New York City time.
The Company has provided Purchaser with the Company's stockholder list and
security position listings for the purpose of disseminating the Offer to holders
of Shares. This Offer to Purchase and the related Letter of Transmittal will be
mailed 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,
5
<PAGE> 8
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.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will accept for payment, and will pay for, all Shares
validly tendered prior to the Expiration Date and not properly withdrawn
promptly after the later to occur of (i) the Expiration Date and, (ii) the
expiration or termination of any applicable waiting periods under the HSR Act.
Subject to applicable rules of the Commission, Purchaser expressly reserves the
right to delay acceptance for payment of, or payment for, Shares pending receipt
of any regulatory approvals specified in Section 15 or in order to comply in
whole or in part with any other applicable law.
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 which are the subject of the Book-Entry
Confirmation, that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that the Purchaser may enforce such
agreement against 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 the Book-Entry Transfer Facility pursuant to the
procedure set forth in Section 3, such Shares will be credited to an account
maintained at the Book-Entry Transfer Facility), as promptly as practicable
following the expiration or termination of the Offer.
Purchaser reserves the right to transfer or assign, in whole or from time
to time in part, to one or more of its affiliates, the right to purchase all or
any portion of the Shares tendered pursuant to the Offer, but any such transfer
or assignment will not relieve Purchaser of its obligations under the Offer and
will in no way prejudice the rights of tendering stockholders to receive payment
for Shares validly tendered and accepted for payment pursuant to the Offer.
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES.
In order for a holder of Shares validly to tender Shares pursuant to the
Offer, a 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
6
<PAGE> 9
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 does not constitute
delivery to the Depositary.
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 appropriate 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
7
<PAGE> 10
Letter of Transmittal are received by the Depositary within three New York
Stock Exchange, Inc. ("NYSE") 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
transmitted by telegram or 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 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 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, 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.
Other Requirements. By executing the Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of Purchaser as
such stockholder's proxies, each with full power of substitution, in the manner
set forth in the Letter of Transmittal, to the full extent of such stockholder's
rights with respect to the Shares tendered by such stockholder and accepted for
payment by Purchaser (and with respect to any and all other Shares or other
securities issued or issuable in respect of such Shares on or after August 16,
1999). All such proxies shall be considered 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 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 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.
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.
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.
8
<PAGE> 11
4. WITHDRAWAL RIGHTS.
Tenders 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 October 18, 1999. If Purchaser extends the
Offer, is delayed in its acceptance for payment of Shares or is unable to accept
Shares for payment pursuant to the Offer for any reason, then, without prejudice
to Purchaser's rights under the Offer, the Depositary may, nevertheless, on
behalf of Purchaser, retain tendered Shares, and such Shares may not be
withdrawn except to the extent that tendering stockholders are entitled to
withdrawal rights as described in this Section 4. 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, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover page of this Offer to Purchase.
Any such notice of withdrawal must specify the name of the person who tendered
the Shares to be withdrawn, the number of Shares to be withdrawn and the name of
the registered holder 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, the Depositary, the Information Agent or any other person will be under
any duty to give notification of any defects or irregularities in any notice of
withdrawal or incur any liability for failure to give any such notification.
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 U.S. FEDERAL INCOME TAX CONSEQUENCES.
The following is a summary of the principal U.S. 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 Common Stock Merger
Consideration, Preferred Stock Merger Consideration or pursuant to the proper
exercise of dissenter's rights). This discussion applies only to stockholders
who hold the Shares as capital assets, and may not apply to Shares received
pursuant to the exercise of employee stock options or otherwise as compensation,
or to holders of Shares who are not citizens or residents of the United States
of America.
THE TAX DISCUSSION SET FORTH BELOW IS INCLUDED FOR GENERAL INFORMATION
PURPOSES ONLY AND IS BASED UPON PRESENT 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 TO SUCH STOCKHOLDER AND
THE PARTICULAR TAX EFFECTS OF THE OFFER AND THE MERGER, INCLUDING THE
APPLICATION AND EFFECT OF STATE, LOCAL AND OTHER TAX LAWS.
The receipt of the offer price and the receipt of cash pursuant to the
Merger (whether as Common Stock Merger Consideration, Preferred Stock Merger
Consideration or pursuant to the proper exercise of dissenter's rights) will be
a taxable transaction for U.S. federal income tax purposes (and also may be a
taxable transaction under applicable state, local and other income tax laws). In
general, for U.S. federal income tax purposes, a holder of Shares will recognize
gain or loss equal to the difference between such 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. Gain or loss must be determined separately for
each block of Shares (i.e., Shares acquired at the same cost in a single
transaction) sold pursuant to the Offer or converted to cash in the Merger. Such
9
<PAGE> 12
gain or loss will be capital gain or loss. Individual holders will be subject to
U.S. federal income tax on the net amount of any gain at a maximum rate of 20%
provided that the Shares were held for more than 12 months. Special rules (and
generally lower maximum rates) apply to individuals in lower tax brackets. The
deduction of capital losses is subject to certain limitations. Stockholders
should consult their own tax advisors in this regard.
Payments in connection with the Offer or the Merger may be subject to
backup withholding at a 31% rate. Backup withholding generally applies if a
stockholder (i) fails to furnish such stockholder's social security number or
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, signed under penalties of
perjury, that the TIN provided is such stockholder's correct TIN and that such
stockholder is not subject to backup withholding. Backup withholding is not an
additional tax but merely an advance payment, which may be refunded to the
extent it results in an overpayment of tax. Certain persons, including
corporations and financial institutions generally, are exempt from backup
withholding. Certain penalties apply for failure to furnish correct information
and for failure to include the reportable payments in income. Each stockholder
should consult with such stockholder's own tax advisor as to such stockholder's
qualifications for exemption from backup withholding and the procedure for
obtaining such exemption.
6. PRICE RANGE OF SHARES; DIVIDENDS.
Company Common Stock. The shares of Company Common Stock have been listed
and principally traded on the NYSE since December 16, 1998. Before that date,
such shares were listed on the American Stock Exchange. The following table sets
forth, for the quarters indicated, the high and low sales prices per share of
Company Common Stock on the NYSE as reported by the Dow Jones News Service. The
price per share of Company Common Stock has been restated to reflect a
three-for-two stock split payable in the form of a 50% stock dividend
distributed on August 14, 1998.
COMMON STOCK MARKET DATA
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
1997:
First Quarter............................................. $ 9 1/2 $ 6 3/4
Second Quarter............................................ 11 43/64 8
Third Quarter............................................. 15 21/64 10 27/64
Fourth Quarter............................................ 17 3/4 13 5/64
1998:
First Quarter............................................. 20 16 1/2
Second Quarter............................................ 20 11/64 16 21/64
Third Quarter............................................. 18 27/64 13 11/16
Fourth Quarter............................................ 18 3/4 13 5/8
1999:
First Quarter............................................. 18 13/16 14
Second Quarter............................................ 19 1/4 14
Third Quarter (through August 19, 1999)................... 28 3/8 16 1/2
</TABLE>
On Monday, July 19, 1999, the last full trading date prior to the
appearance of certain news stories concerning a possible transaction between
Parent and the Company, the closing price per share of Company Common Stock as
reported on the NYSE was $17 1/2. On Friday, August 13, 1999, the last full
trading day prior to the announcement of the execution of the Merger Agreement
and of Purchaser's intention to commence the Offer, the closing price per share
of Company Common Stock as reported on the NYSE was $24 15/16. On August 19,
1999, the last full trading day prior to the commencement of the Offer, the
closing price per share of Company Common Stock as reported on the NYSE was
$28 1/4. HOLDERS OF SHARES OF COMPANY COMMON STOCK ARE URGED TO OBTAIN MARKET
QUOTATIONS FOR THE SHARES OF COMPANY COMMON STOCK.
10
<PAGE> 13
Pursuant to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998, no dividends were declared or paid on Company Common
Stock in 1998 or 1997.
Company Preferred Stock. The shares of Company Preferred Stock are not
registered or listed on a national exchange and, to the best knowledge of Parent
and Purchaser, they are not quoted on a interdealer quotation system. No price
quotations are available for the shares of Company Preferred Stock.
The following table sets forth (i) the aggregate amount of dividends per
share of Series C Preferred Stock and (ii) the aggregate amount of dividends per
share of Series D Preferred Stock, in each case paid during the period
indicated:
<TABLE>
<CAPTION>
SERIES C SERIES D
PREFERRED STOCK PREFERRED STOCK
--------------- ---------------
<S> <C> <C>
1997:
First Quarter................................. $21.25 --
Second Quarter................................ 21.25 --
Third Quarter................................. 21.25 $14.17
Fourth Quarter................................ 21.25 21.25
1998:
First Quarter................................. 21.25 21.25
Second Quarter................................ 21.25 21.25
Third Quarter (through August 14, 1998)....... 17.71 17.71
Fourth Quarter................................ -- --
1999:
First Quarter................................. -- --
Second Quarter................................ -- --
Third Quarter (through August 19, 1999)....... -- --
</TABLE>
The Merger Agreement prohibits the Company from declaring, setting aside,
making or paying any dividend with respect to any of its capital stock (other
than dividends and distributions by a wholly owned Subsidiary to the Company or
another wholly owned Subsidiary) until the Effective Time unless Parent agrees
otherwise in writing.
7. CERTAIN INFORMATION CONCERNING THE COMPANY.
Except as otherwise set forth herein, the information concerning the
Company contained in this Offer to Purchase, including financial information,
has been furnished by the Company or has been taken from or based upon publicly
available documents and records on file with the Commission and other public
sources. Neither Purchaser nor Parent assumes any responsibility for the
accuracy or completeness of the information concerning the Company furnished by
the Company or contained in such documents and records or for any failure by the
Company to disclose events which may have occurred or may affect the
significance or accuracy of any such information but which are unknown to
Purchaser or Parent.
General. The Company is a Delaware corporation with its principal
executive offices located at 375 Hudson Street, New York, New York 10014.
Established in 1902, the Company is a holding company predominantly engaged
through its Subsidiaries in general building construction and construction
management in the United States, with limited construction operations abroad.
The Company has also limited real estate operations in the United States. The
Company establishes general policy direction, coordination and planning, and
provides cash management, internal accounting control and other management
services for its operating Subsidiaries. The Company is one of the largest
construction contractors in the United States. The Company participates in the
general building segment of the general building construction market. The
Company is currently one of the leading companies in various sectors of the
general building construction market, including the construction of commercial
office buildings, healthcare facilities, pharmaceutical plants and research and
development laboratories, education
11
<PAGE> 14
and science centers, correctional facilities, sports complexes and
distribution/warehouse facilities. Within these market sectors, the Company has
expertise in the construction of many specialty facilities such as hospitals,
stadiums, correctional facilities, airports terminals, "clean-rooms" and
research facilities. The Company's special projects divisions perform tenant
fit-out and renovation work and build smaller, free-standing structures. The
Company does not currently participate in the single-family home market or in
heavy construction such as roads, bridges, and power plants.
Financial Information. Set forth below is certain selected consolidated
financial information relating to the Company and its Subsidiaries which has
been excerpted or derived from the audited financial statements contained in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998
(the "Form 10-K") and the unaudited financial statements contained in the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 (the
"Form 10-Q"). More comprehensive financial information is included in the Form
10-K, the Form 10-Q and other documents filed by the Company with the
Commission. The summary financial information that follows is qualified in its
entirety by reference to such reports and other documents, including the
financial statements and related notes contained therein. Such reports and other
documents may be examined and copies may be obtained from the offices of the
Commission in the manner set forth below.
12
<PAGE> 15
SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
--------------------------------------- -----------------------
1996 1997 1998 1998 1999
----------- ----------- ----------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue from construction contracts(a)......... $2,838,052 $3,170,744 $3,698,994 $1,737,854 $2,111,792
Cost of construction contracts(b).............. 2,765,901 3,084,236 3,600,311 1,694,031 2,050,687
---------- ---------- ---------- ---------- ----------
Earnings from construction contracts(c)...... 72,151 86,508 98,683 43,823 61,105
Construction operating expenses(d)............. 52,962 52,500 53,220 27,765 31,404
General and administrative expenses............ 13,885 15,823 14,289 5,213 7,204
Income from construction operations.......... 5,304 18,185 31,174 10,845 22,497
Income (loss) from real estate operations...... (383) (839) (764) (305) (376)
Income from operations......................... 4,921 17,346 30,410 10,540 22,121
Income (loss) before income taxes............ (1,032) 15,986 36,856 13,976 27,047
Net income (loss)............................ (1,695) 5,893 19,633 $ 7,687 $ 15,417
Net income (loss) available to common
stockholders............................... $ (3,522) $ 3,856 $ 17,677
PER SHARE DATA:
Basic earnings (loss) per common share:
Net income (loss)............................ $ (0.45) $ 0.49 $ 2.21 $ 0.81 $ 1.88
Diluted earnings (loss) per common share
Net income (loss)............................ (e) 0.41 $ 1.50 $ 0.58 $ 1.22
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------- JUNE 30,
1996 1997 1998 1999
----------- ----------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................. $ 121,981 $ 153,241 $ 168,879 $ 245,378
Marketable securities..................................... -- 18,902 112,766 127,965
Total assets.............................................. 894,596 972,687 1,129,063 1,377,605
Total liabilities......................................... 834,466 896,551 1,040,297 1,273,117
Stockholders' equity...................................... 60,130 76,136 88,766 104,488
</TABLE>
- ---------------
(a) Represents the value of construction completed during the period, exclusive
of costs incurred by owners in connection with work under construction
management and similar contract types. It is a measure of the gross
construction revenue that flows directly through the Company from
construction contracts.
(b) Represents all direct material, labor and subcontracting costs, and those
indirect costs related to contract performance that are identifiable with or
allocable to contracts.
(c) Represents the portion of the total earnings anticipated from construction
contracts which the cost of the work completed bears to the estimated total
cost of the work covered by the contracts in accordance with the percentage
of completion method of accounting.
(d) Represents costs incurred by the Company's construction operating units and
subsidiaries that are not directly attributable to construction contracts,
such as business development, estimating, purchasing, accounting, cost
control, general office support and similar costs attributed to our
construction activities.
(e) Antidilutive.
13
<PAGE> 16
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 non-public information provided
by the Company, including certain projected financial data (the "Projections").
The Company does not in the ordinary course publicly disclose projections and
the Projections were not prepared with a view to public disclosure. The Company
has advised Parent and Purchaser that the 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. The 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
holders of Shares 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.
INCOME STATEMENT
(AMOUNTS IN $ MILLION, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PROJECTIONS
--------------------------------
YEAR ENDING DECEMBER 31,
--------------------------------
1999 2000 2001
-------- -------- --------
<S> <C> <C> <C>
Value of Construction Completed............................. $4,500.0 $4,800.0 $5,000.0
Revenue from Construction Contracts......................... 4,275.0 4,560.0 4,750.0
Costs of Construction Contracts............................. 4,145.5 4,413.1 4,588.4
-------- -------- --------
Earnings from Construction Contracts........................ 129.5 146.9 161.6
Construction Operating Expenses............................. (58.0) (60.9) (67.8)
General and Administrative Expenses......................... (14.3) (14.9) (15.7)
-------- -------- --------
Income from Construction Operations......................... 57.2 71.1 78.1
Income from Real Estate Operations.......................... (1.4) (1.3) (1.3)
Interest Expense............................................ (1.0) (1.0) (1.0)
Other Income (Net).......................................... 10.8 11.9 12.6
-------- -------- --------
Profit Before Taxes......................................... 65.7 80.7 88.5
Taxes....................................................... (28.3) (34.7) (38.0)
Extraordinary Items......................................... (0.0) 0.0 0.0
-------- -------- --------
Net income.................................................. 37.5 46.0 50.4
</TABLE>
Certain matters discussed herein, including, but not limited to the
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, the 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 years ending December 31, 1999, 2000, 2001 may vary
materially from those shown above.
In addition, the 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 the Projections or
expressed any conclusion or provided any other form of assurance with respect to
the Projections and accordingly assume no responsibility for the Projections.
The Projections were prepared with a limited degree of precision, and were not
prepared with a view to public disclosure or compliance with the
14
<PAGE> 17
published guidelines of the Commission 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 the Projections herein should not be regarded as a representation
by Parent and Purchaser or any other person that the projected results will be
achieved. The Projections should be read in conjunction with the historical
financial information of the Company included above. None of Parent, Purchaser,
or any other person assumes any responsibility for the accuracy or validity of
the Projections. Forward-looking statements also include those preceded by,
followed by or that include the words "believes", "expects", "anticipates" or
similar expressions.
Available Information. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is required to
file periodic reports, proxy statements and other information with the
Commission relating to its business, financial condition and other matters.
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 Commission. Such
reports, proxy statements and other information should be available for
inspection at the public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and also should
be available for inspection at the Commission'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 Commission's customary fees, by writing to its principal office
at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission also maintains a World Wide Web site on the Internet at
http://www.sec.gov that contains reports and other information regarding issuers
that file electronically with the Commission.
8. CERTAIN INFORMATION CONCERNING RWE, PURCHASER AND PARENT.
General. RWE owns, directly and indirectly, approximately 56% of Parent.
RWE is a publicly held company engaged in construction, electricity generation,
mining, oil and chemicals, machinery, waste management and telecommunications.
With a workforce of more than 145,467 employees, RWE generated worldwide annual
sales of approximately DM72.7 billion and net income of DM1.4 billion for fiscal
year ended June 30, 1998. Construction and civil engineering represented about
8.1% of total net sales. RWE's principal executive offices are located
Opernplatz 1, 45128 Essen, Germany.
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 Opernplatz 2, 45128 Essen, Germany. Purchaser is an
indirect 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 Germany. Its principal
offices are located at Opernplatz 2, 45128 Essen, Germany. Established in 1875,
Parent is Germany's largest construction company. In addition to its core
business of construction, Parent is involved in airport and facility management.
The name, citizenship, business address, present principal occupation or
employment and five-year employment history of each of the directors and
executive officers of Purchaser and of each member of the Management Board and
Supervisory Board of Parent and RWE are set forth in Schedule I.
Financial Information. Set forth below is certain selected consolidated
financial information relating to Parent and its subsidiaries for Parent's last
two fiscal years. The selected consolidated financial information has been
prepared in Deutsche Mark in accordance with generally accepted accounting
principles in Germany ("German GAAP"). German GAAP differs in certain
significant respects from generally accepted account-
15
<PAGE> 18
ing principles in the United States ("U.S. GAAP"). A summary of the significant
differences between U.S. GAAP and German GAAP is set forth below. Parent,
however, believes that the differences are not material to a decision by a
holder of Shares of whether to sell, tender or hold any Shares because any such
differences would not affect the ability of Purchaser to obtain sufficient funds
to pay for Shares to be acquired pursuant to the Offer. The amounts in the table
set forth below are in Deutsche Mark unless otherwise indicated.
HOCHTIEF AG
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN DEUTSCHE MARK ("DM"), EXCEPT WHERE OTHERWISE INDICATED IN
UNITED STATES DOLLARS ("$"))
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
(IN MILLIONS)
-----------------------------
1997 1998 1998(1)
------- ------- -------
<S> <C> <C> <C>
INCOME STATEMENT DATA:
Amounts in accordance with German GAAP:
Sales..................................................... DM6,151 DM6,138 $3,678
Net income................................................ 157 172 103
Net income available for distribution..................... 84 91 55
BALANCE SHEET DATA:
Amounts in accordance with German GAAP:
Cash and securities....................................... DM2,413 DM2,887 $1,730
Current assets............................................ 4,811 5,144 3,082
Total assets.............................................. 8,098 8,169 4,895
Long-term financial liabilities........................... 264 483 289
Shareholders' equity...................................... 2,405 2,588 1,551
</TABLE>
- ---------------
(1) Amounts in this column are unaudited and have been translated solely for the
convenience of the reader at an exchange rate of DM1.669 = $1.00, the Noon
Buying Rate on December 31, 1998. No representation is made that the
Deutsche Mark has been, could have been or could be, converted into U.S.
dollars at that or any other rate.
The following represents, in the opinion of management of Parent, the
significant differences between U.S. GAAP and German GAAP that would affect the
determination of consolidated net income and shareholders' equity of Parent for
the periods for which the selected consolidated financial information has been
presented herein.
Fixed Assets. German GAAP permits, but does not require, the
capitalization of interest as a part of the historical cost of acquisition of
assets that are constructed or produced for an enterprise's own use. The
capitalization of such interest costs is required by U.S. GAAP.
In its financial statement for the year ending on December 31, 1998, Parent
utilizes a declining balance method of depreciation with respect to fixed assets
when applicable under German tax law. Under U.S. GAAP, fixed assets are
generally depreciated using the straight-line method.
Long-Term Construction Contracts. Under U.S. GAAP, accounting for work in
process and finished goods under the percentage-of-completion method is the
preferred method when estimates of costs to complete and extent of progress
toward completion of long-term contracts are reasonably dependable. Under German
GAAP, accounting for work in process and finished goods is determined using the
completed contract method.
16
<PAGE> 19
Deferred Taxes. According to German GAAP, deferred taxes only need to be
stated if they arise from consolidation procedures or are liabilities. Under
U.S. GAAP, deferred tax assets arising in single-company financial statements
are to be stated.
Accruals. Under German GAAP, the valuation of accruals is characterized by
the prudency principle. This, as a general rule, would lead to higher accruals
than would be acceptable under U.S. GAAP. Accruals for certain expenses that are
incurred in the current year but that will only lead to cash outflow in future
years are acceptable under German GAAP without an underlying liability towards
third parties. These accruals are not acceptable under U.S. GAAP.
Pension Plans. U.S. GAAP requires pension costs to be recognized and
computed as stipulated by the Statement of Financial Accounting Standard No. 87.
Under German GAAP, the unfunded accumulated benefit obligation accounted by
Parent did not reflect forecasted increase of wages and salaries and is
discounted with a steady interest rate of 3.5%.
Except as described in this Offer to Purchase, (i) none of Purchaser,
Parent, RWE or, 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, RWE or any of the persons so
listed beneficially owns or has any right to acquire, directly or indirectly,
any Shares, and (ii) none of Purchaser, Parent, RWE or, 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, the Stockholders Agreement and
as otherwise described in this Offer to Purchase, none of Purchaser, Parent, RWE
or, to the best knowledge of Purchaser and Parent, any of the persons listed in
Schedule I to this Offer to Purchase has any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of the Company, including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or voting of
such securities, finder's fees, joint ventures, loan or option arrangements,
puts or calls, guaranties of loans, guaranties against loss, guaranties of
profits, divisions of profits or loss or the giving or withholding of proxies.
Except as set forth in this Offer to Purchase, since January 1, 1996, none
of Purchaser, Parent, RWE or, to the best knowledge of Purchaser and Parent, any
of the persons listed on Schedule I hereto has had any business relationship or
transaction with the Company or any of its executive officers, directors or
affiliates that is required to be reported under the rules and regulations of
the Commission applicable to the Offer.
Except as set forth in this Offer to Purchase, since January 1, 1996, there
have been no contacts, negotiations or transactions between any of Purchaser,
Parent, RWE 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 or other
acquisition of securities, an election of directors or a sale or other transfer
of a material amount of assets.
9. FINANCING OF THE OFFER AND THE MERGER.
The Offer is not conditioned upon any financing arrangements. The amount of
funds required by Purchaser to purchase all of the outstanding Shares pursuant
to the Offer and to pay related fees and expenses is expected to be
approximately $374.5 million. Purchaser will obtain such funds from Parent.
Parent will provide such funds from its working capital or its affiliates'
working capital or from existing credit facilities or new credit facilities
established for this purpose or from a combination of the foregoing. No decision
has been made concerning which of the foregoing sources Parent will utilize.
Such decision will be made based on Parent's review from time to time of the
advisability of particular actions, as well as on prevailing interest rates and
financial and other economic conditions and such other factors as Parent may
deem appropriate.
Parent anticipates that any indebtedness incurred through borrowings under
credit facilities will be repaid from a variety of sources, which may include,
but may not be limited to, funds generated internally by Parent
17
<PAGE> 20
and its affiliates (including, following the Merger, funds generated by the
Surviving Corporation), bank refinancing, and the public or private sale of debt
or equity securities. No decision has been made concerning the method Parent
will employ to repay such indebtedness. Such decision will be made based on
Parent's review from time to time of the advisability of particular actions, as
well as on prevailing interest rates and financial and other economic conditions
and such other factors as Parent may deem appropriate.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY; THE MERGER
AGREEMENT AND RELATED AGREEMENTS.
As part of its ongoing analysis of its business strategy and operations,
Parent continually analyzes new markets into which it might expand. By the end
of 1998, Parent had concluded that it would be strategically important to be
present in a significant way in the United States market, because of both the
potential opportunities within the U.S. market and the cross-selling
opportunities between Parent's existing construction business in Europe and
multinational customers located in the United States.
Parent analyzed whether it would be optimal to build its own business in
the U.S. market or to acquire a significant construction company in the U.S.
Parent identified the Company, as its leading candidate for a business
combination due to its strong market presence, its reputation for high quality,
its strong management team and its prospects for further growth.
On March 10, 1999, Hans-Peter Keitel, President and Chief Executive Officer
of Parent and Harald Peipers, a former Member of the Executive Board of Parent,
met in New York City with Ellis T. Gravette, Jr., Chairman and Chief Executive
Officer of the Company, and Robert E. Fee, President and Chief Operating Officer
of the Company, and discussed, in general terms, the Company's business and
prospects and the possibility of an investment by Parent in the Company or other
strategic alliances between Parent and the Company. These discussions were
principally in the context of a proposal made by Parent to acquire all or some
of the Shares of the Company then the subject of a Registration Statement on
Form S-3 filed with the Commission on March 4, 1999 in connection with a
contemplated public offering of Shares then held by Karl Steiner Holding AG (the
predecessor to EBSPSW Holding AG) and the Company's pension plan.
On March 17 and 18, 1999, Hans-Wolfgang Koch, Member of the Executive Board
of Parent, and Bernhard Burklin, then Head of Corporate Development of Parent
and currently Vice President of Hochtief International, met in New York City
with Mr. Fee and Donald G. Sleeman, Senior Vice President and Chief Financial
Officer of the Company, to discuss further, in general terms, the business of
the Company and a possible Parent investment in, or other strategic transaction
with, the Company.
On March 25, 1999, Mr. Koch, Mr. Burklin and Hanno Bastlein, Comptroller of
Parent, had further discussions in New York with Messrs. Gravette, Fee and
Sleeman.
On March 31, 1999, Mr. Koch, Mr. Burklin and Busso Peus, Member of the
Executive Board of Parent, continued discussions with Messrs. Gravette, Fee and
Sleeman regarding a transaction between the parties and the Company's business,
including the possible acquisition of 100% of the Company.
On April 1, 1999, the Company and Parent entered into a confidentiality
agreement.
On April 5, 1999, Mr. Gravette had a conversation with Mr. Burklin and on
April 9, 1999, Mr. Gravette met with Messrs. Koch and Burklin.
On April 7, 1999, at a telephonic meeting of the Board, the Board was
advised as to the previous discussions with Parent.
On April 14, 1999, the Company entered into an engagement letter with
PaineWebber Incorporated to represent the Company as its exclusive financial
advisor in connection with the potential sale of the Company.
From April 15 through April 17, 1999, Parent engaged in a limited due
diligence evaluation of the business and affairs of the Company. At the
conclusion of preliminary due diligence, Parent undertook to make a written
proposal for an acquisition of the Company.
18
<PAGE> 21
From April 25 through April 27, 1999, representatives of the Company met in
Essen, Germany with representatives of Parent to gain a better understanding of
Parent's business.
On April 28, 1999, Mr. Keitel transmitted to Mr. Gravette a written
proposal to acquire the Company for total consideration of $270 million or
approximately $21.65 per share of Company Common Stock based upon the number of
shares of Company Common Stock outstanding on a fully diluted and as converted
basis. Mr. Keitel's letter indicated that further due diligence would be
required and attached a term sheet setting forth the principal terms of Parent's
offer, including Parent's requirement that the Company's significant
stockholders agree to tender their Shares pursuant to the Offer and that the
Company agree to pay a termination fee of $10 million in the event the Merger
Agreement is terminated under certain circumstances.
On April 30, 1999, during a telephonic meeting of the Board, the Board was
updated as to the discussions with Parent.
During the week of May 3, 1999, several conversations took place between
Mr. Keitel and Mr. Gravette regarding Parent's offer and the possible benefits
to be achieved by a combination. Messrs. Keitel and Gravette agreed to continue
their discussions in New York City on May 24 and 25. On May 7, 1999, during a
Board meeting in New York City, the Board was further updated as to the
discussions with Parent.
On May 12, 1999, Mr. Keitel sent a letter to Mr. Gravette in which he
confirmed their conversations of the previous week (including the meetings
scheduled for May 24 and 25) and increased Parent's offer by $15 million to an
aggregate purchase price of $285 million, or approximately $23 per share of
Company Common Stock based upon the number of shares of Company Common Stock
outstanding on a fully diluted and as converted basis.
On May 24 and 25, 1999, several meetings took place in New York City
between representatives of the two companies regarding the benefits of a
possible combination. On May 25, Parent's representatives, in a meeting with the
Company's representatives, orally increased its offer to acquire the Company for
total consideration of $310 million, or approximately $25 per share of Company
Common Stock based on the number of shares of Company Common Stock outstanding
on a fully diluted and as converted basis, on the terms and conditions set forth
in Mr. Keitel's previous letters of April 28 and May 12.
On June 9, 1999, at a Board meeting in Seattle, Washington, the Board held
a further discussion concerning a possible business combination with Parent.
On June 15, 1999, Mr. Keitel sent a letter to Mr. Gravette in which he
requested that Mr. Gravette inform him of the results of the Board's
deliberations on Parent's offer and in which he confirmed in writing the
increase in the offer price made orally on May 25, 1999. Later that day, Mr.
Gravette responded with a letter informing Mr. Keitel that the Board determined
that the offer was inadequate for further consideration. Mr. Gravette also
informed Mr. Keitel that Thomas Leppert had been elected by the Board to succeed
Mr. Gravette as Chairman of the Board of the Company effective October 1, 1999.
On June 18, 1999, Mr. Keitel and Mr. Gravette spoke by telephone. Mr.
Keitel requested that the Company inform Parent of the price at which it would
be willing to enter into a transaction with Parent. Mr. Gravette said that this
was an issue for the Board to determine and that he would undertake to provide a
proposal to Parent in July.
On July 12, 1999, Mr. Keitel delivered a letter to Messrs. Gravette and
Leppert in which Parent, having refined its valuation analysis, particularly its
evaluation of the revenue opportunities available to the combined company, and
taking into account the Company's expected 1999 after-tax income, increased its
offer to $347 million in the aggregate, or approximately $28 per share of
Company Common Stock based on the number of shares of Company Common Stock
outstanding on a fully diluted and as converted basis. The letter indicated that
it was Parent's intention to keep the Company's management team intact for the
foreseeable future. Parent further stated in the letter that its offer would
expire if not accepted by the Board by July 30. Parent attached to the letter a
revised term sheet setting forth the principal terms of Parent's offer.
On July 16, 1999, Peter Steiner and Heinrich Baumann-Steiner, each members
of the Board, and their affiliates, EBSPSW Holding AG, PSW Holding AG, EBS
Holding AG and Esther Baumann-Steiner
19
<PAGE> 22
(collectively, the "Steiner Affiliates"), filed an amendment to the Statement on
Schedule 13D with respect to the Shares previously filed by them and others. In
the amended Schedule 13D, the Steiner Affiliates disclosed that they had learned
that an offer had been made to purchase all the Shares of the Company at a
substantial premium in excess of the highest market price at which the shares of
Company Common Stock had ever traded in the public markets. The Steiner
Affiliates also stated that they intended to urge the Board to accept the offer
and believed that the offer was fair to all stockholders of the Company from a
financial point of view.
On July 20, 1999, the Board met to address Parent's offer. At that meeting,
the Board appointed a committee of independent directors (the "Special
Committee"), to consider Parent's offer and other strategic alternatives. The
Special Committee consisted of all of the directors of the Company except
Messrs. Gravette, Leppert, Steiner, Baumann-Steiner and Fieger. At the meeting,
the Board also discussed the status of Parent's proposal. A representative of
the legal advisors, Fried, Frank, Harris, Shriver & Jacobson ("Fried Frank"),
participated in the meeting.
On July 22, 1999, Messrs. Leppert, Fee and Sleeman of the Company and
Messrs. Koch and Burklin of Parent met in Frankfurt, Germany. At that meeting,
the participants discussed various issues relating to the transaction, including
matters relating to the governance of the Company following the Merger. The
Company's representatives also informed Parent's representatives of recent
changes to certain compensation and benefits arrangements for employees and
officers of the Company. The Company's representatives further informed Parent
that Parent's offer of $28 per share of Company Common Stock was not acceptable.
From July 23 through July 25, 1999, Messrs. Koch and Leppert had several
conversations regarding price, in which Parent increased its offer to $370
million in the aggregate.
On July 28, 1999, the Special Committee held a telephonic meeting to
discuss the proposal by Parent. Representatives of Fried Frank participated in
these discussions. The Special Committee determined to accept Parent's offer,
subject to agreement on various matters and full Board approval.
On July 30, 1999, Mr. Gravette informed Mr. Keitel in writing of the
Special Committee's action.
Following several follow-up conversations clarifying certain aspects of
Parent's offer, Parent indicated its willingness to move forward with its
confirmatory due diligence investigation of the Company and to begin the
negotiation of definitive agreements.
On August 2, 1999, during a telephonic meeting of the Board, the Board was
updated as to the status of the discussions with Parent. Representatives of
Fried Frank and PaineWebber participated in the meeting.
From August 3 through August 5, 1999, representatives of Parent and its
financial and legal advisors conducted a due diligence investigation of the
business and affairs of the Company. Also on August 3, Parent's legal advisors
furnished to the Company's legal advisors a draft of the Merger Agreement and
the Stockholders Agreement. In addition, on August 3, representatives of Parent
and representatives of the Company met to arrive at a price per Share given an
aggregate offer price of $370 million and determined a price per share of
Company Common Stock to be $28.625, based on the then number of outstanding
shares of Company Common Stock on a fully diluted and as converted basis and the
average exercise price per share of Company Common Stock issued upon the
exercise of outstanding stock options.
Several conversations took place during the period from August 5 through
August 12, 1999 between the legal advisors to the parties regarding the
principal issues on the Merger Agreement and the Stockholders Agreement.
On August 12, 1999, senior executives of Parent and the Company met at the
Company's headquarters to address the principal open issues between the parties.
On Friday, August 13, 1999, Parent received the requisite approval of the
Supervisory Board of RWE. Also on August 13, the Board met in person in New
York. After consideration of the presentations of legal counsel concerning the
Board's duties and the terms of the Offer, the Merger Agreement and the
Stockholders Agreement and of PaineWebber concerning its fairness opinion, the
Board unanimously approved and declared advisable the Merger Agreement and the
transactions contemplated thereby, including the Offer and
20
<PAGE> 23
the Merger, subject to final negotiation of the terms of the Merger Agreement.
The Principal Stockholders indicated that, subject to the execution of the
Merger Agreement, they were prepared to enter into the Stockholders Agreement.
During the weekend of August 14 and 15, 1999, representatives of Parent and
Purchaser and their legal advisors worked out all remaining open issues.
On August 16, 1999, Parent, Purchaser and the Company entered into the
Merger Agreement and Parent and the Principal Stockholders entered into the
Stockholders Agreement. Immediately thereafter, Parent and the Company made a
public announcement to this effect.
THE MERGER AGREEMENT
THE FOLLOWING IS A SUMMARY OF THE MERGER AGREEMENT, A COPY OF WHICH IS
FILED AS AN EXHIBIT TO THE TENDER OFFER STATEMENT ON SCHEDULE 14D-1 (THE
"SCHEDULE 14D-1") FILED BY PURCHASER AND PARENT WITH THE COMMISSION IN
CONNECTION WITH THE OFFER. SUCH SUMMARY IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE MERGER AGREEMENT.
The Offer. The Merger Agreement provides for the commencement of the Offer
as promptly as reasonably practicable, but in no event later than within five
business days after the initial public announcement of Purchaser's intention to
commence the Offer. The obligation of Purchaser to accept for payment Shares
tendered pursuant to the Offer is subject to the satisfaction of the Minimum
Condition and certain other conditions that are described in Section 14 hereof.
Purchaser and Parent have agreed that no change in the Offer may be made which
decreases the price per Share payable in the Offer, which reduces the maximum
number of Shares to be purchased in the Offer, which changes the form of
consideration paid by Purchaser for the Shares, which imposes conditions to the
Offer in addition to those set forth in Section 14 hereof or which makes any
other change in the terms of the Offer that is materially adverse to the holders
of the Shares, without the prior consent of the Company.
The Merger. The Merger Agreement provides that, upon the terms and subject
to the conditions thereof, and in accordance with Delaware Law, at the Effective
Time, Purchaser shall be merged with and into the Company. As a result of the
Merger, the separate corporate existence of Purchaser will cease and the Company
will continue as the Surviving Corporation and will become an indirect wholly
owned subsidiary of Parent. Upon consummation of the Merger (i) each share of
Company Common Stock issued and outstanding immediately prior to the Effective
Time (other than any shares of Company Common Stock held in the treasury of the
Company and each share of Company Common Stock owned by Purchaser, Parent or any
direct or indirect wholly owned subsidiary of Parent or of the Company and other
than shares of Company Common Stock held by stockholders who shall have demanded
and perfected appraisal rights under Delaware Law) shall be canceled and shall
be converted automatically into the right to receive $28.625 in cash (the
"Common Stock Merger Consideration"), or any greater price that may be paid per
share of Company Common Stock in the Offer, without interest, and (ii) each
share of Company Preferred Stock issued and outstanding immediately prior to the
Effective Time (other than any shares of Company Preferred Stock held in the
treasury of the Company and each share of Company Preferred Stock owned by
Purchaser, Parent or any direct or indirect wholly owned subsidiary of Parent or
of the Company and other than shares of Company Preferred Stock held by
stockholders who shall have demanded and perfected appraisal rights under
Delaware Law) shall be canceled and shall be converted automatically into the
right to receive an amount in cash equal to the product of the Common Stock
Merger Consideration multiplied by the number of shares of Company Common Stock
into which such share of Company Preferred Stock shall be convertible
immediately prior to the Effective Time, in each case, without interest.
Pursuant to the Merger Agreement, each share of common stock, par value
$.01 per share, of Purchaser issued and outstanding immediately prior to the
Effective Time shall be converted into and exchanged for one validly issued,
fully paid and nonassessable share of common stock, par value $.01 per share, of
the Surviving Corporation.
21
<PAGE> 24
The Merger Agreement provides that the initial directors of the Surviving
Corporation shall be two directors designated by the Board prior to the
Effective Time, three directors designated by Purchaser (who may be employees of
Parent or an affiliate) and four independent directors, each to hold office in
accordance with the Certificate of Incorporation and By-laws of the Surviving
Corporation, and the officers of the Company immediately prior to the Effective
Time shall be the initial officers of the Surviving Corporation, in each case
until their respective successors are duly elected or appointed and qualified or
until their earlier death, resignation or removal. The Merger Agreement provides
that, at the Effective Time, the Certificate of Incorporation of Purchaser, as
in effect immediately prior to the Effective Time, will be the Certificate of
Incorporation of the Surviving Corporation; provided, however, that, at the
Effective Time, Article I of the Certificate of Incorporation of the Surviving
Corporation will be amended to read as follows: "The name of the corporation is
The Turner Corporation". The Merger Agreement also provides that the By-laws of
Purchaser, as in effect immediately prior to the Effective Time, will be the
By-laws of the Surviving Corporation.
Stockholders' Meeting. Pursuant to the Merger Agreement, the Company
shall, if required by applicable law in order to consummate the Merger, duly
call, give notice of, convene and hold an annual or special meeting of its
stockholders as soon as practicable following consummation of the Offer for the
purpose of considering and taking action on the Merger Agreement and the
Transactions (the "Stockholders' Meeting"). If Purchaser acquires at least the
number of shares of Company Common Stock and shares of Company Preferred Stock
(determined as if shares of Company Preferred Stock have been converted into
shares of Company Common Stock) that, when added to the Shares already owned by
Parent, constitute two-thirds of the outstanding shares of Company Common Stock,
then 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 shall, if
required by applicable law, promptly following consummation of the Offer, file
with the Commission under the Exchange Act, and use its reasonable best efforts
to have cleared by the Commission as promptly as practicable, a proxy statement
and related proxy materials (the "Proxy Statement") with respect to the
Stockholders' Meeting and shall cause the Proxy Statement to be mailed to
stockholders of the Company at the earliest practicable time. The Company has
agreed, subject to its fiduciary duties under applicable law based upon advice
of outside legal counsel, to include in the Proxy Statement the unanimous
recommendation of the Board that the stockholders of the Company approve and
adopt the Merger Agreement and the Transactions and to use its best efforts to
obtain such approval and adoption. Parent and Purchaser have agreed to cause all
Shares then owned by them and their subsidiaries to be voted in favor of
approval and adoption of the Merger Agreement and the Transactions. The Merger
Agreement provides that, in the event that Purchaser shall acquire at least 90%
of the then outstanding shares of Company Common Stock and at least 90% of the
then outstanding shares of each series of Company Preferred Stock, Purchaser and
the Company agree, at the request of Purchaser, to take all necessary and
appropriate action to cause the Merger to become effective as soon as reasonably
practicable after such acquisition, without a meeting of the Company's
stockholders, in accordance with Delaware Law.
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 Effective Time, unless Parent shall otherwise
agree in writing, the businesses of the Company and its subsidiaries (the
"Subsidiaries" and, individually, a "Subsidiary") shall be conducted only in,
and the Company and the Subsidiaries shall not take any action except in, the
ordinary course of business and in a manner consistent with past practice; and
the Company shall use its best efforts to preserve substantially intact the
business organization of the Company and the Subsidiaries, to keep available the
services of the current officers, employees and consultants of the Company and
the Subsidiaries and to preserve the current relationships of the Company and
the Subsidiaries with customers, suppliers and other persons with which the
Company or any Subsidiary has significant business relations. The Merger
Agreement provides that by way of amplification and not limitation, and except
as contemplated therein, neither the Company nor any Subsidiary shall, between
the date of the Merger Agreement and the Effective Time, directly or indirectly
do, or propose to do, any of the following, without the prior written consent of
Parent: (a) amend or otherwise change its Certificate of Incorporation or
By-laws or equivalent organizational documents, (b) issue, sell, pledge, dispose
of, grant,
22
<PAGE> 25
encumber, or authorize the issuance, sale, pledge, disposition, grant or
encumbrance of (i) any shares of any class of capital stock of the Company or
any Subsidiary, or any options, warrants, convertible securities or other rights
of any kind to acquire any shares of such capital stock, or any other ownership
interest (including, without limitation, any phantom interest), of the Company
or any Subsidiary (except for the issuance of a maximum of 2,021,875 shares of
Company Common Stock issuable pursuant to employee stock options outstanding on
the date of the Merger Agreement and the issuance of a maximum of 2,400,000
shares of Company Common Stock upon conversion of Company Preferred Stock
outstanding on the date of the Merger Agreement) or (ii) any assets of the
Company or any Subsidiary, except in the ordinary course of business and in a
manner consistent with past practice, (c) declare, set aside, make or pay any
dividend or other distribution, payable in cash, stock, property or otherwise,
with respect to any of its capital stock (other than dividends and distributions
by a wholly owned Subsidiary to the Company or another wholly owned Subsidiary),
(d) reclassify, combine, split, subdivide or redeem, purchase or otherwise
acquire, directly or indirectly, any of its capital stock, (e) (i) acquire
(including, without limitation, by merger, consolidation, or acquisition of
stock or assets or any other business combination) any corporation, partnership,
other business organization or any division thereof or any material amount of
assets, (ii) incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee or endorse, or otherwise as an accommodation
become responsible for, the obligations of any person, or make any loans or
advances, or grant any security interest in any of its assets except in the
ordinary course of business and consistent with past practice, (iii) authorize
any single capital expenditure or capital expenditures which are, in the
aggregate, not disclosed in the Company's capital expenditure budget previously
delivered by the Company to Parent, or (iv) enter into or amend any contract,
agreement, commitment or arrangement with respect to any of the foregoing
matters, (f) (i) increase the compensation payable or to become payable or the
benefits provided to its current or former directors or executive officers, or
increase the compensation payable or to become payable or the benefits provided
to its current or former non-executive officers or employees other than in the
ordinary course in accordance with past practices, (ii) grant any severance or
termination pay to, or enter into any employment, retention, stay bonus or
severance agreement with any director or executive officer, or grant any
severance or termination pay to, or enter into any employment, retention, stay
bonus or severance agreement with any non-executive officer or employee other
than in the ordinary course in accordance with past practices, (iii) establish,
adopt, enter into or amend any collective bargaining, bonus, profit-sharing,
thrift, compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment, termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any director or
executive officer, or take any such action for the benefit of any non-executive
officer or employee other than in the ordinary course in accordance with past
practices, or (iv) amend or modify any employee benefit plan, except as required
by law (g) take any action, other than as required by generally accepted
accounting principles, with respect to accounting policies or procedures
(including, without limitation, procedures with respect to the payment of
accounts payable and collection of accounts receivable), (h) make any material
tax election or settle or compromise any material federal, state, local or
foreign income tax liability, (i) amend, modify or consent to the termination of
any material contract, or amend, waive, modify or consent to the termination of
the Company's or any Subsidiary's rights thereunder, other than in the ordinary
course of business and consistent with past practice, (j) settle any material
litigation, suit, claim, action, proceeding or investigation (other than any
settlement which involves only the payment of damages in an immaterial amount
and does not involve injunctive or other equitable relief), or (k) announce an
intention, enter into any formal or informal agreement or otherwise make a
commitment, to do any of the foregoing.
Company Board Representation. The Merger Agreement provides that, promptly
upon the purchase by Purchaser of Shares pursuant to the Offer, and from time to
time thereafter, the Board shall consist of two directors designated by the
Board prior to such purchase of Shares, three directors designated by Purchaser
(who may be employees of Parent or an affiliate of Parent) and four independent
directors, and the Company shall, at such time, promptly take all actions
necessary to cause Purchaser's designees and new independent directors, if any,
to be elected as directors of the Company, including increasing the size of the
Board or securing the resignations of incumbent directors, or both. The Merger
Agreement also provides that, at such times, the Company shall use its best
efforts to cause persons designated by Purchaser and new independent directors,
if any, to constitute the same percentage as persons designated by Purchaser and
new independent
23
<PAGE> 26
directors, if any, shall constitute of the Board of (i) each committee of the
Board, (ii) each board of directors of each domestic Subsidiary and (iii) each
committee of each such board, in each case only to the extent permitted by
applicable law. Notwithstanding the foregoing, until the earlier of (i) the time
Purchaser acquires two-thirds of the voting power of the outstanding Shares, and
(ii) the Effective Time, the Company has agreed not take any action to induce
any member of the Board, as of the date hereof, who are not employees of the
Company to resign from the Board.
The Merger Agreement provides that following the election or appointment of
Purchaser's designees in accordance with the immediately preceding paragraph and
prior to the Effective Time, any amendment of the Merger Agreement or the
Certificate of Incorporation or By-laws of the Company, any termination of the
Merger Agreement by the Company, any extension by the Company of the time for
the performance of any of the obligations or other acts of Parent or Purchaser
or waiver of any of the Company's rights thereunder, will require the
concurrence of a majority of those directors of the Company then in office who
were neither designated by Purchaser nor are employees of the Company.
Access to Information. Pursuant to the Merger Agreement, until the
Effective Time, the Company shall, and shall cause the Subsidiaries and the
officers, directors, employees, auditors and agents of the Company and the
Subsidiaries to, afford the officers, employees and agents of Parent and
Purchaser complete access at all reasonable times to the officers, employees,
agents, properties, offices, plants, building sites and other facilities, books
and records of the Company and each Subsidiary, and shall furnish Parent and
Purchaser with such financial, operating and other data and information as
Parent or Purchaser, through its officers, employees or agents, may reasonably
request and Parent and Purchaser have agreed to keep such information
confidential, except in certain circumstances.
No Solicitation of Transactions. The Company has agreed that neither it
nor any Subsidiary shall, directly or indirectly, through any officer, director,
agent or otherwise, (a) solicit, initiate, accept or knowingly encourage the
submission of, any Acquisition Proposal. "Acquisition Proposal" is defined to
mean (i) any bona fide proposal or offer from any person relating to any direct
or indirect acquisition of (A) all or a substantial part of the assets of the
Company or of any Subsidiary or (B) 30% or more of the then outstanding shares
of Company Common Stock and Company Preferred Stock (determined as if shares of
Company Preferred Stock have been converted into shares of Company Common
Stock), (ii) any tender offer or exchange offer as defined pursuant to the
Exchange Act that, if consummated, would result in any person beneficially
owning 30% or more of the then outstanding shares of Company Common Stock and
Company Preferred Stock (determined as if shares of Company Preferred Stock have
been converted into shares of Company Common Stock), (iii) any merger,
consolidation, business combination, sale of all or a substantial part of the
assets, recapitalization, liquidation, dissolution or similar transaction
involving the Company and any Subsidiary, other than the Transactions, or (iv)
any other transaction the consummation of which would reasonably be expected to
impede, interfere with, prevent or materially delay the Transaction, or (b)
except to the extent required by fiduciary obligations under applicable law
based upon advice of outside legal counsel, participate in any discussions or
negotiations regarding, or furnish to any other person any information with
respect to, or otherwise cooperate in any way with, or assist or participate in,
facilitate or encourage, any proposal that constitutes, or may reasonably be
expected to lead to, an Acquisition Proposal). Except to the extent required by
fiduciary obligations under applicable law based upon advice of outside legal
counsel, the Merger Agreement requires the Company immediately to cease and
cause to be terminated any discussions or negotiations with any parties that may
be ongoing with respect to any of the foregoing. The Company has also agreed to
promptly advise Parent orally and in writing of any Acquisition Proposal or any
request for information with respect to any Acquisition Proposal, the material
terms and conditions of such Acquisition Proposal or request and to also advise
Purchaser of the identity of the person making such Acquisition Proposal or
request. The Company has also agreed not to release any third party from any
confidentiality or standstill agreement to which the Company is a party.
Employee and Director Stock Options. The Merger Agreement provides that,
immediately prior to the Effective Time, the Company shall terminate the Company
Stock Plans and that the Company shall amend the provisions of any other company
plans, or related trust or funding vehicle, providing for the issuance, holding,
transfer or grant of any Shares, or any interest in respect of any Shares, to
provide no continuing
24
<PAGE> 27
rights to acquire, hold, transfer, or grant any Shares or any interest in any
Shares. Parent and the Company agree to take all action necessary to provide
that each option (an "Option") to purchase shares of Company Common Stock that
is an "incentive stock option" becomes fully vested and exercisable as soon as
practicable following the date of the Merger Agreement (whether or not
previously vested or exercisable). Parent and the Company have also agreed to
take all action necessary to provide that each Option and each stock unit or
other right to receive Shares (a "Unit") pursuant to the Company Stock Plans or
any stock option or stock unit agreement or other arrangement to which the
Company is a party which is outstanding immediately prior to the acceptance of
the Shares by the Purchaser pursuant to the Offer, shall become fully
exercisable and vested, whether or not previously exercisable or vested,
immediately prior to such acceptance and to provide that, with respect to each
such Option and Unit, the holder thereof becomes entitled to either, at the
election of Purchaser, (i) to receive from the Company, at the time payment is
made for the Shares tendered pursuant to the Offer, an amount in cash equal to
the Cash-Out Value (as defined below), or (ii) exercise any Option or Unit prior
to the time payment is made for the Shares tendered pursuant to the Offer,
provided, however, that any Option or Unit that is not cashed out or exercised
will terminate as of the Effective Time, and provided further that Purchaser may
elect clause (ii) above only if it provides a mechanism therefor which the
Company in its good faith judgment deems to not prejudice the holders of Options
with respect to economics or the risk of holding shares. The Merger Agreement
defines the "Cash-Out Value" to be: (i) with respect to each such Option, an
amount of cash in cancellation of such Option equal to the difference between
the Common Stock Merger Consideration and the per share exercise price of such
Option, multiplied by the number of shares of Company Common Stock to which such
Option remains unexercised, and (ii) with respect to each such Unit, an amount
of cash in cancellation of such Unit equal to the Common Stock Merger
Consideration (less, in the case of both Options and Units, any income or
employment tax withholding required under the Internal Revenue Code of 1986, as
amended or any provision of state or local law). The Company and Parent have
agreed to cooperate, and take all reasonable steps to share in advance
information, to effect the transactions contemplated by the foregoing.
Employee Benefit Matters. The Merger Agreement also provides that,
following the Effective Time, Parent will cause the Company to honor all exiting
company plans which have been disclosed to Parent. Parent also agrees, through
at least December 31, 2000, to cause the Company to continue in effect the
annual incentive program of the Company, subject to such adjustments to the
targets under such program as shall be necessary or advisable to take into
account the Transactions and the business of the Company following the Effective
Time. The Merger Agreement provides that, following the Effective Time, Parent
shall cause the Company to establish a phantom option plan and a phantom
restricted stock plan for senior officers of the Company that will replace the
Company's existing option and restricted stock plans. Such phantom option plan
shall be similar in nature and scope to the Company's existing option plan.
Parent agrees to cause the Company to continue to maintain through December
31, 2000 compensation and benefits (including severance but excluding stock
based plans except as otherwise contemplated by the foregoing) for all
continuing directors, officers and employees of the Company and the Subsidiaries
which are, in the aggregate, at least substantially equivalent to the
compensation and benefits (including severance but excluding stock based plans
except as otherwise contemplated by the foregoing) that these persons had
immediately prior to the Effective Time. For purposes of determining eligibility
and vesting under any Purchaser benefit plans, employees of the Company and the
Subsidiaries will be credited with their years of service with the Company or
the Subsidiaries. To the extent that any Purchaser benefit plan in which a
Company employee participates after the Effective Time provides medical, dental,
vision or other welfare benefits, Purchaser has agreed to cause all pre-existing
condition exclusions and actively at work requirements of such plan to be waived
for such employee and his or her covered dependents except to the extent such
employee and his or her covered dependents were subject to such requirements
under the applicable Company Plans, and Purchaser has agreed to cause any
eligible expenses incurred by such employee on or before the Effective Time to
be taken into account under such plan for purposes of satisfying all deductible,
co-insurance and maximum out-of-pocket requirements applicable to such employee
and his or her covered dependents for the applicable plan year.
25
<PAGE> 28
Directors' and Officers' Indemnification and Insurance. The Merger
Agreement further provides that the By-laws of the Surviving Corporation shall
contain provisions no less favorable with respect to indemnification than are
set forth in Article VIII of the by-laws of the Company, which provisions shall
not be amended, repealed or otherwise modified for a period of six years from
the Effective Time in any manner that would adversely affect the rights
thereunder of individuals who at the Effective Time were directors, officers,
employees, fiduciaries or agents of the Company, unless such modification shall
be required by law.
Parent has agreed to indemnify, and to cause the Surviving Corporation to
indemnify, all officers, directors, employees or agents of the Company or any of
its Subsidiaries (collectively, the "Indemnified Parties") to the fullest extent
permitted by applicable law with respect to all acts and omissions arising out
of such individuals' services as officers, directors, employees or agents of the
Company or any of its subsidiaries or as trustees or fiduciaries of any plan for
the benefit of employees of the Company or any of its subsidiaries, occurring
prior to the Effective Time including, without limitation, the transactions
contemplated by the Merger Agreement. Without limitation of the foregoing, in
the event any such Indemnified Party is or becomes involved in any capacity in
any action, proceeding or investigation in connection with any matter,
including, without limitation, the transactions contemplated by the Merger
Agreement occurring prior to and including, the Effective Time, Parent, from and
after the Effective Time, will pay as incurred such Indemnified Party's
reasonable legal and other expenses (including the cost of any investigation and
preparation) incurred in connection therewith.
In the event of any such claim, action, suit, proceeding or investigation
(whether arising before or after the Effective Time), the Merger Agreement
provides that (i) Parent or the Surviving Corporation shall have the right, from
and after the Effective Time, to assume the defense thereof (with counsel
engaged by Parent or the Surviving Corporation to be reasonably acceptable to
the relevant Indemnified Party) and Parent shall not be liable to such
Indemnified Parties for any legal expense of other counsel or any other expenses
subsequently incurred by such Indemnified Party in connection with the defense
thereof; (ii) such Indemnified Party will cooperate in the defense of any such
matter; and (iii) Parent or the Surviving Corporation shall not be liable to any
settlement effected without its prior written consent; and provided further that
Parent shall not have any obligation hereunder to any Indemnified Party when and
if a court of competent jurisdiction shall ultimately determine, and such
determination shall have become final, that the indemnification of such
Indemnified Party in the manner contemplated hereby is prohibited by applicable
law.
The Merger Agreement provides that the Surviving Corporation shall use its
best efforts to maintain in effect for six years from the Effective Time the
current directors' and officers' liability insurance policies maintained by the
Company (provided that the Surviving Corporation may substitute therefor
policies of at least the same coverage containing terms and conditions which are
not materially less favorable) with respect to matters occurring prior to the
Effective Time; provided, however, that in no event shall the Surviving
Corporation be required to expend more than an amount per year equal to 225% of
the current annual premiums paid by the Company for such insurance (which
premiums the Company has represented to Parent and Purchaser to be $269,400 in
the aggregate).
Parent, Purchaser and the Company have also agreed that in the event the
Company or the Surviving Corporation or any of their respective successors or
assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any person, then and in each such case, proper provision shall be made so
that the successors and assigns of the Company or the Surviving Corporation, as
the case may be, or at Parent's option, Parent, shall assume the foregoing
indemnity obligations.
Further Action; Reasonable Best Efforts. The Merger Agreement provides
that, subject to its terms and conditions, each of the parties thereto shall (i)
make promptly its respective filings, and thereafter make any other required
submissions, under the HSR Act with respect to the Merger Agreement and the
transactions contemplated thereby, including each of the Offer and the Merger,
and the transactions contemplated by the Stockholders Agreement (collectively,
the "Transactions") and (ii) use its reasonable best efforts to take, or cause
to be taken, all appropriate action, and to do or cause to be done, all things
necessary, proper or
26
<PAGE> 29
advisable under applicable laws and regulations to consummate and make effective
the Transactions, including, without limitation, using its reasonable best
efforts to obtain all licenses, permits, consents, approvals, authorizations,
qualifications and orders of governmental authorities and parties to contracts
with the Company and the Subsidiaries as are necessary for the consummation of
the Transactions and to fulfill the conditions to the Offer and 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
proper officers and directors of each party to the Merger Agreement are required
to use their reasonable best efforts to take all such 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 changes or events
concerning the Company's business, compliance with law, litigation, employee
benefit plans, labor matters, real property and leases, intellectual property,
Year 2000 compliance, environmental matters and taxes.
Conditions to the Merger. Under the Merger Agreement, the respective
obligations of each party to effect the Merger are subject to the satisfaction
at or prior to the Effective Time of the following conditions: (a) the Merger
Agreement and the Transactions shall have been approved and adopted by the
affirmative vote of the stockholders of the Company to the extent required by
Delaware Law and the Company's Certificate of Incorporation, (b) no United
States federal, state, county or local or any foreign government, governmental,
regulatory or administrative authority, agency, instrumentality or commission or
any court, tribunal, or judicial or arbitral body (hereinafter, a "Governmental
Authority") shall have enacted, issued, promulgated, enforced or entered any
law, rule, regulation, executive order, decree, injunction or other order
(whether temporary, preliminary or permanent) which is then in effect and has
the effect of making the acquisition of Shares by Parent or Purchaser or any
affiliate of either of them illegal or otherwise restricting in any material
manner, preventing or prohibiting consummation of the Transactions; and (c)
Purchaser or its permitted assignee shall have purchased all Shares validly
tendered and not withdrawn pursuant to the Offer; provided, however, that this
condition shall not be applicable to the obligations of Parent or Purchaser if,
in breach of the Merger Agreement, Purchaser fails to purchase any Shares
validly tendered and not withdrawn pursuant to the Offer.
Termination; Fees and Expenses. The Merger Agreement provides that it may
be terminated and the Merger and the other Transactions may be abandoned at any
time prior to the Effective Time, notwithstanding any requisite approval and
adoption of the Merger Agreement and the Transactions by the stockholders of the
Company: (a) by mutual written consent duly authorized by the Boards of
Directors of Purchaser and the Company and the Management Board of Parent, (b)
by either Parent, Purchaser or the Company if (i) the Effective Time shall not
have occurred on or before March 31, 2000; provided, however, that the right to
terminate the Merger Agreement shall not be available to any party whose failure
to fulfill any obligation under the Merger Agreement has been the cause of, or
resulted in, the failure of the Effective Time to occur on or before such date
or (ii) any Governmental Authority in the United States or the European Union
shall have enacted, issued, promulgated, enforced or entered any injunction,
order, decree or ruling which has the effect of making consummation of the
Merger illegal or otherwise preventing or prohibiting consummation of the
Merger, which injunction, order, decree or ruling has become final and
nonappealable, (c) by Parent if (i) due to an occurrence or circumstance that
would result in a failure to satisfy any condition set forth in Section 14
hereof, Purchaser shall have (A) failed to commence the Offer within 60 days
following the date of the Merger Agreement, (B) terminated the Offer without
having accepted any Shares for payment thereunder, or (C) failed to pay for
Shares pursuant to the Offer within 90 days following the commencement of the
Offer, unless such action or inaction under (A), (B) or (C) shall have been
caused by or resulted from the failure of Parent or Purchaser to perform, in any
material respect, any material covenant or agreement of either of them contained
in the Merger Agreement or the material breach by Parent or Purchaser of any
material representation or warranty of either of them contained in the Merger
Agreement or (ii) prior to the purchase of Shares pursuant to the Offer, the
Board or any committee thereof shall have withdrawn or modified in a manner
adverse to Purchaser or Parent its approval or recommendation of the Offer, the
Merger Agreement, the Merger or any other Transaction, or shall have recommended
or approved any Acquisition Proposal, or shall have resolved to do any of the
foregoing, or (d) by the Company, upon approval of the
27
<PAGE> 30
Board, if (i) due to an occurrence or circumstance that would result in a
failure to satisfy any of the conditions set forth in Section 14 hereof,
Purchaser shall have (A) failed to commence the Offer within 60 days following
the date of the Merger Agreement, (B) terminated the Offer without having
accepted any Shares for payment thereunder or (C) failed to pay for Shares
pursuant to the Offer within 90 days following the commencement of the Offer,
unless such action or inaction under (A), (B) or (C) shall have been caused by
or resulted from the failure of the Company to perform, in any material respect,
any material covenant or agreement of it contained in the Merger Agreement or
the material breach by the Company of any material representation or warranty of
it contained in the Merger Agreement or (ii) prior to the purchase of Shares
pursuant to the Offer, (A) any representation or warranty of Parent or Purchaser
in the Merger Agreement shall not be true and correct except to the extent that
the failure of such representation or warranty to be true and correct could not
reasonably be expected to prevent or materially delay consummation of the Offer
or the Merger or otherwise prevent or materially delay Parent or Purchaser from
performing its obligations under this Agreement, or (B) Parent or Purchaser
shall have failed to perform any obligation or to comply with any agreement or
covenant to be performed or complied with by it under the Merger Agreement,
except to the extent such non-performance or non-compliance could not reasonably
be expected to prevent or materially delay consummation of the Offer or the
Merger or otherwise materially reduce Purchaser's or Parent's obligations under
the Agreement, (iii) the Offer has not been timely commenced (except as a result
of actions or omissions by the Company), or (iv) prior to the purchase of Shares
pursuant to the Offer, the Board determines in good faith that it is required to
do so by its fiduciary duties under applicable law, based upon advice of outside
legal counsel in order to enter into a definitive agreement with respect to a
Superior Proposal. For purposes of the Merger Agreement, a "Superior Proposal"
means any Acquisition Proposal on terms which the Board determines, in its good
faith judgment (after consultation with a financial advisor of internationally
recognized reputation), to be more favorable to the Company's stockholders than
the Offer and the Merger and as to which, to the extent financing is required,
there shall have been obtained from a responsible financing source or sources
one or more commitment letters containing customary terms and conditions.
In the event of the termination of the Merger Agreement, the Merger
Agreement provides that it shall forthwith become void and there shall be no
liability thereunder on the part of any party thereto except under the
provisions of the Merger Agreement related to fees and expenses described below
and under certain other provisions of the Merger Agreement which survive
termination.
The Merger Agreement provides that in the event that (a) any person
(including, without limitation, the Company or any affiliate thereof), other
than Parent or any affiliate of Parent, shall have become the beneficial owner
of 30% or more of the then outstanding Shares of Company Common Stock and
Company Preferred Stock (determined as if shares of Company Preferred Stock have
been converted into shares of Company Common Stock and the Merger Agreement
shall have been terminated pursuant to the provisions described in the second
preceding paragraph above; or in the event that (b) the Merger Agreement is
terminated (x) pursuant to section (c)(ii) or (d)( iv) of the second preceding
paragraph above or (y) pursuant to section (c)(i) or (d)(i) of the second
preceding paragraph above, to the extent that the failure to commence, the
termination or the failure to accept any Shares for payment, as set forth in
section (c)(i) or (d)(i) of the second preceding paragraph above, as the case
may be, shall relate to the failure of the Company to perform, in any material
respect, any of its material covenants or agreements contained in the Merger
Agreement or the material breach by the Company of any of its material
representations or warranties contained in the Merger Agreement, then, in any
such event, the Company shall pay Parent a fee of $10 million, which amount
shall be payable in immediately available funds. The Merger Agreement also
provides that in the event that any person shall have commenced, publicly
proposed or communicated to the Company an Acquisition Proposal that is publicly
disclosed and (x) the Offer shall have remained open for at least 20 business
days, (y) the Minimum Condition shall not have been satisfied and (z) the Merger
Agreement shall have been terminated pursuant to section (c) or (d)of the second
preceding paragraph above, then, in any such event, the Company shall pay
Parent: (i) a fee of $5 million within one business day following termination of
the Merger Agreement and (ii) if the Company enters into an agreement in respect
of an Acquisition Proposal within 12 months of the termination of the Merger
Agreement, an additional fee of $7 million payable within one business day
following consummation of an Acquisition Proposal.
28
<PAGE> 31
The Merger Agreement also provides that all costs and expenses incurred in
connection with the Merger Agreement, the Stockholders Agreement and the
Transactions shall be paid by the party incurring such expenses, whether or not
any Transaction is consummated.
THE STOCKHOLDERS AGREEMENT
THE FOLLOWING IS A SUMMARY DESCRIPTION OF THE STOCKHOLDERS AGREEMENT, A
COPY OF WHICH IS FILED AS AN EXHIBIT TO THE SCHEDULE 14D-1. SUCH SUMMARY IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE STOCKHOLDERS AGREEMENT.
Parent and Purchaser have also entered into the Stockholders Agreement with
the Principal Stockholders pursuant to which the Principal Stockholders have
agreed (i) to tender their Shares into the Offer, (ii) to vote their Shares in
favor of the Merger, if applicable, in each case subject to the conditions set
forth in the Stockholders Agreement, and (iii) to grant to Purchaser an option
to purchase their shares of Company Common Stock at the Per Share Amount and
their shares of Company Preferred Stock at an amount in cash equal to the
product of the Per Share Amount multiplied by the number of shares of Company
Common Stock issuable upon the conversion of such shares of Company Preferred
Stock, in each case subject to the conditions set forth in the Stockholders
Agreement.
Tender of Shares. Each Principal Stockholder has agreed to tender,
pursuant to and in accordance with the terms of the Offer, and not withdraw, all
such Principal Stockholder's Shares, provided, however, that any Principal
Stockholder who would incur liability under Section 16(b) of the Exchange Act as
a result thereof is not required to tender such Shares to the extent necessary
to avoid such liability.
Voting Agreement. Each Principal Stockholder has also agreed that, from
and after the date of the Merger Agreement and until the close of business on
the 180th day following termination of the Merger Agreement, at any meeting of
the stockholders of the Company, however called, and in any action by consent of
the stockholders of the Company, such Principal Stockholder will vote (or will
cause to be voted) such Stockholder's Shares (a) in favor of the approval and
adoption of the Merger Agreement, the Merger and all the transactions
contemplated by the Merger Agreement and the Stockholders Agreement and
otherwise in such manner as may be necessary to consummate the Merger, (b)
against any action, proposal, agreement or transaction that would result in a
breach of any covenant, obligation, agreement, representation or warranty of the
Company contained in the Merger Agreement (whether or not theretofore
terminated) or of the Principal Stockholder contained in the Stockholders
Agreement, and (c) against any action, proposal, agreement or transaction (other
than the Merger Agreement or the Transactions) that could result in any of the
conditions to the Company's obligations under the Merger Agreement (whether or
not theretofore terminated) not being fulfilled or that is intended, or could
reasonably be expected, to impede, interfere or be inconsistent with, delay,
postpone, discourage or adversely affect the Merger Agreement (whether or not
theretofore terminated), the Offer, the Merger or the Stockholders Agreement,
including, but not limited to, any Superior Proposal.
Irrevocable Proxy. The Stockholders Agreement also provides that, if any
Principal Stockholder fails to comply with the foregoing voting agreement (as
determined by Parent in its sole discretion), such Principal Stockholder agrees
to the irrevocable appointment of Parent, and each of its officers, as such
Principal Stockholder's attorney and proxy pursuant to the provisions of Section
212(c) of Delaware Law, with full power of substitution, to vote and otherwise
act (by written consent or otherwise) with respect to such Principal
Stockholder's Shares at any meeting of stockholders of the Company, or consent
in lieu of any such meeting, or otherwise, on the matters and in the manner
specified in the foregoing paragraph.
Grant of Option. The Stockholders Agreement provides that each Principal
Stockholder grants to Purchaser an irrevocable option (each, an "Option" and,
collectively, the "Options") to purchase all, and not less than all, of such
Principal Stockholder's shares of Company Common Stock and/or such Principal
Stockholder's shares of Company Preferred Stock at the applicable Purchase
Price, net to such Principal Stockholder in cash. The Stockholders Agreement
provides further that each Option shall expire if not exercised prior to the
close of business on the 180th day following termination of the Merger
Agreement. Purchaser may exercise any or all of the Options as to any Principal
Stockholder, at any time and from time to
29
<PAGE> 32
time, following termination of the Merger Agreement, under circumstances in
which any fee (or any portion thereof) shall be payable and prior to the
expiration of such Options.
Option Closing. Under the Stockholders Agreement, if Purchaser wishes to
exercise an Option, Purchaser shall send a written notice to the applicable
Principal Stockholder of its intention to exercise the Option, specifying the
place, and, if then known, the time and the date of the closing (the "Option
Closing") of the purchase. At the Option Closing, (i) each Principal Stockholder
whose Shares are being purchased shall deliver to Purchaser (or its designee)
all of such Principal Stockholder's Shares by delivery of a certificate or
certificates evidencing such Shares, in the denominations designated by
Purchaser, duly endorsed to Purchaser or accompanied by stock powers duly
executed in favor of Purchaser, with all necessary stock transfer stamps
affixed, and (ii) Purchaser shall pay to each such Principal Stockholder the
aggregate Purchase Price for such Principal Stockholder's Shares.
Conditions to Option Closing. The Option Closing is subject to the
conditions that (i) no Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any foreign or domestic statute, law,
ordinance, regulation, rule, code, executive order, injunction, judgment, decree
or other order ("Law") (whether temporary, preliminary or permanent) which is
then in effect and has the effect of making the acquisition of Shares by
Purchaser pursuant to the exercise of the Options illegal, or otherwise
restricting, preventing or prohibiting consummation of the purchase and sale of
the Shares pursuant to the exercise of the Options, and (ii) any waiting period
applicable to the consummation of the purchase and sale of the Shares pursuant
to the exercise of the Options under the HSR Act shall have expired or been
terminated.
Recapture. The Stockholders Agreement also provides that, in the event
Purchaser sells any Shares acquired pursuant to the exercise of an Option within
the two-year period following the applicable Option Closing at a price in excess
of the Purchase Price for such Shares, Purchaser shall promptly pay to the
applicable Principal Stockholder an amount equal to such excess (less any taxes
incurred by Purchaser in connection therewith).
No Solicitation of Transactions. Each Principal Stockholder has agreed
that between the date of the Stockholders Agreement and the date of termination
of the Merger Agreement, such Principal Stockholder will not, directly or
indirectly, through any officer, agent or otherwise, (a) solicit, initiate,
accept or knowingly encourage the submission of any Acquisition Proposal, or (b)
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or otherwise cooperate in any way, or
assist or participate in, facilitate or encourage any proposal that constitutes,
or may reasonably be expected to lead to, an Acquisition Proposal. Each
Principal Stockholder has agreed to, and has agreed to direct or cause its
directors, officers, employees, representatives and agents to, immediately cease
and cause to be terminated any discussions or negotiations with any parties that
may be ongoing with respect to any Acquisition Proposal. Each Principal
Stockholder has agreed to promptly advise Parent orally and in writing of any
Acquisition Proposal or any request for information with respect to any
Acquisition Proposal, the material terms and conditions of such Acquisition
Proposal or request and the identity of the person making such Acquisition
Proposal or request.
Termination. The Stockholders Agreement provides that the Principal
Stockholders' obligation thereunder to tender, and not withdraw, their Shares
pursuant to the Offer shall terminate on the expiration date of the Offer. The
Options (including any Option as to which an exercise notice has been delivered
but for which the Option Closing has not occurred) shall expire if not exercised
prior to the close of business on the 180th day following termination of the
Merger Agreement. The remaining provisions of the Stockholders Agreement
terminate upon the earliest of (a) the effective time of the Merger and (b) the
close of business on the 180th day following the termination of the Merger
Agreement.
CONFIDENTIALITY AGREEMENT
THE FOLLOWING IS A SUMMARY OF THE CONFIDENTIALITY AGREEMENT, DATED APRIL 1,
1999, BETWEEN THE COMPANY AND PARENT (THE "CONFIDENTIALITY AGREEMENT"), A COPY
OF WHICH HAS BEEN FILED WITH THE COMMISSION AS AN EXHIBIT TO SCHEDULE 14D-1. THE
SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE CONFIDENTIALITY
AGREEMENT.
30
<PAGE> 33
Pursuant to the Confidentiality Agreement, Parent has agreed, among other
things, (i) not to use any of the Evaluation Material for any reason other than
to evaluate a possible transaction between Parent and the Company, (ii) that the
Evaluation Material will be kept strictly confidential by Parent and its
representatives and, except with the specific prior written consent of the
Company or as expressly otherwise permitted by the terms of the Confidentiality
Agreement, will not be disclosed by Parent or by its representatives. The
Confidentiality Agreement provides that Parent may disclose the Evaluation
Material to those representatives of Parent that require such material for the
purpose of evaluating a possible transaction. For purposes of the
Confidentiality Agreement, "Evaluation Material" is defined to mean non-public
information regarding the Company and any other non-public, confidential or
proprietary information concerning the Company that the Company and its advisors
furnish to Parent; provided, however, that Evaluation Material does not include
information which (i) becomes generally available to the public other than as a
result of disclosures by Parent or its representatives, (ii) was already in
Parent's possession or was independently developed by Parent without violation
of the Confidentiality Agreement prior to its disclosure to Parent by the
Company, its representatives or its agents, or (iii) becomes available to Parent
on a non-confidential basis from a source other than the Company, its
representatives or its agents, provided that such source is not, to Parent's
knowledge after reasonable investigation, bound by a confidentiality agreement
with the Company, its representatives or its agents or otherwise prohibited from
transmitting the information to Parent or Parent's representatives by a
contractual, legal or fiduciary obligation.
Pursuant to the Confidentiality Agreement, Parent has also agreed that for
a period of two years from the date of the Confidentiality Agreement, unless
Parent shall have been specifically invited in writing by the Company, neither
Parent nor any of its affiliates will in any manner, directly or indirectly, (a)
effect or seek, offer or propose to effect, or cause or participate in or in any
way assist any person to effect or seek, offer or propose (whether publicly or
otherwise) to effect or cause or participate in, (i) any acquisition of any
securities or assets of the Company or any of its subsidiaries, (ii) any tender
or exchange offer, merger or other business combination involving the Company or
any of its subsidiaries, (iii) any recapitalization, restructuring, liquidation,
dissolution or other extraordinary transaction with respect to the Company or
any of its subsidiaries, or (iv) any "solicitation" of "proxies" (as such terms
are used in the proxy rules of the Commission) or consents to vote any voting
securities of the Company, (b) form, join or in any way participate in a "group"
(as defined under the Exchange Act) with respect to any voting securities of the
Company, (c) otherwise act, alone or in concert with others, to seek to control
or influence the management, Board of Directors or policies of the Company, and
(d) take any action which might force the Company to make a public announcement
or arrangements with any third party with respect to any of the foregoing.
THE RIGHTS AGREEMENT
THE FOLLOWING IS A SUMMARY DESCRIPTION OF THE RIGHTS AGREEMENT. THE SUMMARY
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE RIGHTS AGREEMENT AND THE
AMENDMENTS THERETO WHICH ARE INCORPORATED HEREIN BY REFERENCE AND COPIES OF
WHICH HAVE BEEN FILED WITH THE COMMISSION.
On August 14, 1998, the Board declared a dividend distribution of one Right
for each outstanding share of Company Common Stock. The distribution was payable
to the stockholders of record at the close of business on September 21, 1998,
and, in addition, the Company has authorized the issuance of one Right with
respect to each share of Company Common Stock that becomes outstanding between
the close of business on September 21, 1998, and the earlier of the Distribution
Date or the Rights Expiration Date (as such terms are defined below) or the
date, if any, on which Rights may be redeemed. When exercisable, each Right
entitles the registered holder to purchase from the Company one one-hundredth of
a share of a new series of the Company's preference stock designated as Series F
Participating Preference Stock ("Series F Preferred Stock") at a price of $80
per one one-hundredth of a share (the "Rights Purchase Price"), subject to
adjustment.
Under the Rights Agreement, the Distribution Date is defined as the earlier
of the tenth business day after (i) the commencement of a tender or exchange
offer by any person (other than the Company, any subsidiary of the Company or
any employee benefit plan or employee stock plan of the Company or of any
subsidiary of the Company) for a number of the outstanding shares of the
Company's stock having in the
31
<PAGE> 34
aggregate 30% or more of the general voting power of the Company, unless the
Board declares that the tenth business day following such tender or exchange
offer shall not be considered a Distribution Date, or (ii) the date (the "Stock
Acquisition Date") of a public announcement by the Company or an Acquiring
Person that an Acquiring Person has become such. In general, under the Rights
Agreement an Acquiring Person is a person or group of affiliated or associated
persons (other than the Company, any subsidiary of the Company, any employee
benefit plan or employee stock plan of the Company or of any subsidiary of the
Company, any person who is the beneficial owner of shares of the Company's stock
having in the aggregate 30% or more of the general voting power of the Company
solely by reason of the purchase or conversion of certain specified securities,
including the Company's Series C Preferred Stock and Series D Preferred Stock,
or any person who acquires shares of the Company's stock having in the aggregate
30% or more of the general voting power of the Company in connection with a
transaction or series of transactions approved in advance by the Board) who has
acquired or obtained the right to acquire beneficial ownership of a number of
the outstanding shares of the Company's stock having in the aggregate 30% or
more of the general voting power of the Company.
The Rights are not exercisable until after the date on which the Company's
right to redeem has expired. The Rights will expire on September 21, 2008 (the
"Rights Expiration Date"), unless earlier redeemed by the Company as described
below.
The Series F Preferred Stock will be non-redeemable and will rank equally
in respect of dividends and the distribution of assets to all other classes or
series of the Company's preferred stock, unless the terms thereof shall provide
otherwise. The Series F Preferred Stock which is the subject of the Rights may
not be issued except upon exercise of Rights. Each share of Series F Preferred
Stock will have a minimum preferential quarterly dividend rate of $3 per share
but will be entitled to an aggregate of 100 times the cash and non-cash (payable
in kind) dividends and distributions (other than dividends and distributions
payable in Company Common Stock) declared on Company Common Stock. In the event
of liquidation, the holders of Series F Preferred Stock will be entitled to
receive a liquidation payment in an amount equal to the greater of $100 per
share or 100 times the payment made per share of Company Common Stock, plus an
amount equal to accrued and unpaid dividends and distributions thereon. Each
share of Series F Preferred Stock will have 100 votes, voting together with the
Company Common Stock. In the event of any merger, consolidation or other
transaction in which shares of Company Common Stock are exchanged, each share of
Series F Preferred Stock will be entitled to receive 100 times the amount
received per share of Company Common Stock. The rights of the Series F Preferred
Stock as to dividends, liquidation and voting are protected by antidilution
provisions.
In the event that, on or at any time after a Stock Acquisition Date, the
Company is acquired in a merger or other business combination transaction (in
which any shares of the Company's Company Common Stock are changed into or
exchanged for other securities or assets) or 50% or more of the assets or
earning power of the Company and its subsidiaries (taken as a whole) are sold,
proper provision shall be made so that each holder of a Right shall thereafter
have the right to receive, upon the exercise thereof at the then current
exercise price of the Right, that number of shares of Company Common Stock of
the acquiring company which at the time of such transaction would have a market
value (determined as provided in the Rights Agreement) of two times the Rights
Purchase Price.
In the event that (i) on or at any time after a Stock Acquisition Date, the
Company is the surviving corporation in a merger or other business combination
and its Company Common Stock remains outstanding and unchanged, (ii) an
Acquiring Person engages in one or more self-dealing transactions specified in
the Rights Agreement, (iii) a person (other than the Company, any subsidiary of
the Company, any employee benefit plan or employee stock plan of the Company or
of any subsidiary of the Company, or a person who acquires 30% or more of the
general voting power of the Company in connection with a transaction or series
of transactions approved prior to such transaction or transactions by the Board)
alone, or together with his, her or its affiliates or associates, becomes the
beneficial owner of a number of the outstanding shares of the Company's stock
having in the aggregate 30% or more of the general voting power of the Company
or (iv) during such time as there is an Acquiring Person, any of certain events
described in the Rights Agreement occurs which results in such Acquiring
Person's ownership interest being increased by more than 1%, then, and in each
such case, proper provision shall be made so that each holder of a Right (except
as
32
<PAGE> 35
noted below) will thereafter have the right to receive, upon payment of the
Rights Purchase Price, that number of shares of Company Common Stock, or in the
discretion of the Board, one one-hundredths of a share of Series F Preferred
Stock as shall equal the result obtained by (A) multiplying the then current
Rights Purchase Price by the then number of one one-hundredths of a share of
Series F Preferred Stock for which an associated Right was exercisable
immediately prior to the first occurrence of any one of the events listed above
in this paragraph and (B) dividing that product by 50% of the current market
price per one share of Company Common Stock.
Up to and including the tenth business day after a Stock Acquisition Date,
which time period may be extended by the Board to any time up to and including
the twentieth business day after a Stock Acquisition Date, the Company may
redeem the rights in whole, but not in part, at a price of $.01 per Right, which
amount may be adjusted as provided in the Rights Agreement (the "Redemption
Price"). Promptly upon the action of the Board electing to redeem the Rights,
the Company shall make an announcement thereof and, upon such announcement, the
right to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
Any of the provisions of the Rights Agreement may be amended by the Board
prior to the Distribution Date. On or after the Distribution Date, the Board may
amend the Rights Agreement in various respects, including (i) to shorten or
lengthen certain time periods and (ii) in a manner not adverse to the interests
of the Rights holders.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Board. The Rights should not interfere with any
merger or other business combination approved by the Board since the Rights may
be redeemed by the Company at $.01 per Right, subject to adjustment, at any time
up to and including the tenth business day (twentieth business day if the Board
so determines) following the Stock Acquisition Date.
In connection with and prior to the Company entering into the Merger
Agreement, on August 13, 1999, the Company amended its Right Agreement so that
none of the execution, delivery or performance of the Merger Agreement or the
Stockholders Agreement, the making of the Offer or the acceptance for payment or
payment for Shares by Purchaser pursuant to the Offer will cause (i) the Rights
to become exercisable under the Rights Agreement, (ii) Parent or Purchaser or
any of their affiliates to be deemed an Acquiring Person or (iii) the Stock
Acquisition Date to occur upon any such event.
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 to enable Parent to
acquire control of, and the entire equity interest in, the Company. Upon
consummation of the Merger, the Company will become an indirect 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 contemplated thereby, including
the Merger. In addition, Article 6 of the Company's Certificate of Incorporation
provides that the affirmative vote of the holders of at least two-thirds of all
outstanding shares entitled to vote is required to authorize a merger approved
by a majority of disinterested directors.
The Board of Directors of the Company has unanimously (A) determined that
the Merger Agreement and the Transactions, including each of the Offer and the
Merger, and the transactions contemplated by the Stockholders Agreement, are
fair to and in the best interests of the holders of Shares, (B) approved,
adopted and declared advisable the Merger Agreement and the Transactions (such
approval and adoption having been made in accordance with Delaware Law,
including, without limitation, Section 203 thereof) and (C) recommended that the
holders of Shares accept the Offer and tender the Shares pursuant to the Offer,
and approve and adopt the Merger Agreement. 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 transactions contemplated thereby by
the affirmative vote of the holders of at least two-thirds of all outstanding
shares entitled to vote. Accordingly, if the Minimum Condition is satisfied,
Purchaser will have sufficient voting power to cause the
33
<PAGE> 36
approval and adoption of the Merger Agreement and the transactions contemplated
thereby without the affirmative vote of any other stockholder.
In the Merger Agreement, the Company has agreed to take all action
necessary to convene a meeting of its stockholders as soon as practicable after
the consummation of the Offer for the purpose of considering and taking action
on the Merger Agreement and the transactions contemplated thereby, if such
action is required by applicable 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 transactions contemplated
thereby.
Promptly upon the purchase by Purchaser of Shares pursuant to the Offer,
the Merger Agreement provides that the Board shall consist of two directors
designated by the Board prior to such purchase of Share, three directors
designated by Purchaser and four independent directors. 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 of Company
Common Stock and at least 90% of the then outstanding shares of each series of
Company Preferred Stock, 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 in the Merger Agreement to take, at the request of
Purchaser, all necessary and appropriate action to cause the Merger to become
effective as soon 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 of Company Common Stock and at least
90% of the then outstanding shares of each series of Company Preferred Stock
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. Holders of the Shares do not have appraisal rights in
connection with the Offer. However, if the Merger is consummated, stockholders
will have certain rights under Delaware Law to dissent and demand appraisal of,
and to receive payment in cash of the fair value of, their Shares. Such rights
to dissent, if the statutory procedures are complied with, could lead to a
judicial determination of the fair value of the Shares, as of the day prior to
the date on which the stockholders' vote was taken approving the Merger or
similar business combination (excluding any element of value arising from the
accomplishment or expectation of the Merger), required to be paid in cash to
such dissenting holders for their Shares. 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. Therefore,
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.
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.
The foregoing summary of the rights of dissenting stockholder under
Delaware Law does not purport to be a complete statement of the procedures to be
followed by stockholders desiring to exercise any dissenters'
34
<PAGE> 37
rights available under Delaware Law. The preservation and exercise of
dissenter's rights require strict adherence to the applicable provisions of
Delaware Law.
Going Private Transactions. The Commission 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, however, that Rule 13e-3 is not 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 Commission and disclosed to stockholders prior to
consummation of the transaction.
Plans for the Company. Parent's current intention is to operate the
businesses of the Company and the Subsidiaries following the Effective Time in a
manner substantially consistent with the manner in which such businesses are
currently operated. As a result, Parent currently intends that the Company and
the Subsidiaries shall maintain their current names for the foreseeable future
and shall, for the foreseeable future, be the principal entities through which
Parent conducts the businesses in the United States that are currently conducted
by the Company and the Subsidiaries. Notwithstanding the foregoing, 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 may change any of the foregoing if it deems it advisable under the
circumstances then existing in the exercise of its business judgment.
Following the Effective Time, Parent intends to cause the Company to honor
the existing company plans and annual incentive programs and to cause the
Company to establish a phantom option plan and a phantom restricted stock plan
for senior officers of the Company, all as more fully described in the
description of the Merger Agreement. See Section 10.
Except as indicated in this Offer to Purchase, Parent does not have any
present plans or proposals which relate to or would result in an extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
involving the Company or any Subsidiary, a sale or transfer of a material amount
of assets of the Company or any Subsidiary.
12. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that neither the Company nor any Subsidiary
shall, between the date of the Merger Agreement and the Effective Time, 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, grant, encumber,
or authorize the issuance, sale, pledge, disposition, grant or encumbrance of,
any shares of any class of capital stock of the Company or any Subsidiary, or
any options, warrants, convertible securities or other rights of any kind to
acquire any shares of such capital stock, or any other ownership interest
(including, without limitation, any phantom interest), of the Company or any
Subsidiary (except for the issuance of a maximum of 2,021,875 shares of Company
Common Stock issuable pursuant to employee stock options outstanding on August
16, 1999, and the issuance of a maximum of 2,400,000 shares of the Company
Common Stock upon conversion of Company Preferred Stock outstanding on August
16, 1999); (b) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to any
of its capital stock (other than dividends and distributions by a wholly owned
Subsidiary to the Company or another wholly owned Subsidiary); or (c)
reclassify, combine, split, subdivide or redeem, or repurchase or otherwise
acquire, directly or indirectly, any of its capital stock. See Section 10. If,
however, the Company should, during the pendency of the Offer, (i) split,
combine or otherwise change the Shares or its capitalization, (ii) acquire or
otherwise cause a reduction in the number of outstanding Shares or (iii) issue
or sell any additional Shares, shares of any other class or series of capital
stock, other voting securities or any securities convertible into, or options,
rights, or warrants, conditional or otherwise, to acquire, any of the foregoing,
then, without prejudice to Purchaser's rights under Section 14, Purchaser may
(subject to the provisions of the Merger Agreement) make such adjustments to the
purchase price and other terms of the Offer (including the number and type of
securities to be purchased) and the Merger as it deems appropriate to reflect
such split, combination or other change.
35
<PAGE> 38
13. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES, EXCHANGE LISTING AND
EXCHANGE ACT REGISTRATION.
The purchase of shares of Company Common Stock by Purchaser pursuant to the
Offer will reduce the number of shares of Company Common Stock that might
otherwise trade publicly and will reduce the number of holders of shares of
Company Common Stock, which could adversely affect the liquidity and market
value of the remaining shares of Company Common Stock held by the public and the
value of the shares of Company Preferred Stock.
Depending upon the number of shares of Company Common Stock purchased
pursuant to the Offer, the shares of Company Common Stock may no longer meet the
requirements of the NYSE for continued listing and may be delisted from the
NYSE. Parent intends to cause the delisting of the shares of Company Common
Stock by the NYSE following consummation of the Offer.
According to the NYSE's published guidelines, the NYSE would consider
delisting the shares of Company Common Stock if, among other things, the number
of record holders of at least 100 shares of Company Common Stock should fall
below 1,200, the number of publicly held shares of Company Common Stock
(exclusive of holdings of officers, directors and their families and other
concentrated holdings of 10% or more ("NYSE Excluded Holdings")) should fall
below 600,000 or the aggregate market value of publicly held shares of Company
Common Stock (exclusive of NYSE Excluded Holdings) should fall below $5,000,000.
The Company has advised Purchaser that, as of August 13, 1999, there were
9,181,456 shares of Company Common Stock outstanding, held by approximately
2,027 holders of record. If, as a result of the purchase of shares of Company
Common Stock pursuant to the Offer or otherwise, the shares of Company Common
Stock no longer meet the requirements of the NYSE for continued listing and the
listing of the shares of Company Common Stock is discontinued, the market for
the shares of Company Common Stock could be adversely affected.
If the NYSE were to delist the shares of Company Common Stock, it is
possible that the shares of Company Common Stock would continue to trade on
another securities exchange or in the over-the-counter market and that price or
other quotations would be reported by such exchange or through the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") or other
sources. The extent of the public market therefor and the availability of such
quotations would depend, however, upon such factors as the number of
stockholders and/or the aggregate market value of such securities remaining at
such time, the interest in maintaining a market in the shares of Company Common
Stock on the part of securities firms, the possible termination of registration
under the Exchange Act as described below, and other factors. Purchaser cannot
predict whether the reduction in the number of shares of Company Common Stock
that might otherwise trade publicly would have an adverse or beneficial effect
on the market price for or marketability of the shares of Company Common Stock
or whether it would cause future market prices to be greater or less than the
Per Share Amount.
The shares of Company Common Stock 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 of Company Common Stock might no longer constitute "margin securities"
for purposes of the margin regulations of the Federal Reserve Board, in which
event such shares of Company Common Stock could no longer be used as collateral
for loans made by brokers.
The shares of Company Common Stock are currently registered under the
Exchange Act. Such registration may be terminated upon application by the
Company to the Commission if the shares of Company Common Stock are not listed
on a national securities exchange and there are fewer than 300 record holders.
The termination of the registration of the shares of Company Common Stock under
the Exchange Act would substantially reduce the information required to be
furnished by the Company to holders of shares of Company Common Stock and to the
Commission and would make certain provisions of the Exchange Act, such as the
short-swing profit recovery provisions of Section 16(b), the requirement of
furnishing a proxy statement in connection with stockholders' meetings and the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions, no longer applicable to the Shares. In addition,
"affiliates" of
36
<PAGE> 39
the Company and persons holding "restricted securities" of the Company may be
deprived of the ability to dispose of such securities pursuant to Rule 144
promulgated under the Securities Act of 1933, as amended. If registration of the
shares of Company Common Stock under the Exchange Act were terminated, the
shares of Company Common Stock would no longer be "margin securities" or be
eligible for NASDAQ reporting. Purchaser currently intends to seek to cause the
Company to terminate the registration of the shares of Company Common Stock
under the Exchange Act as soon after consummation of the Offer as the
requirements for termination of registration are met.
14. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment Shares tendered pursuant to the Offer, and may
extend, terminate or amend the Offer, if (i) immediately prior to the expiration
of the Offer, the Minimum Condition shall not have been satisfied, (ii) any
applicable waiting period under the HSR Act shall not have expired or been
terminated prior to the expiration of the Offer, or (iii) at any time on or
after the date of the Merger Agreement and prior to the expiration of the Offer,
any of the following conditions shall exist:
(a) there shall have been enacted, issued, promulgated, enforced or
entered any Law (whether temporary, preliminary or permanent) which is then
in effect and which (i) makes illegal, materially delays, or otherwise,
directly or indirectly, restrains or prohibits or makes materially more
costly, the making of the Offer, the acceptance for payment of, or payment
for, any Shares by Parent, Purchaser or any other affiliate of Parent or
the purchase of Shares pursuant to any Stockholders Agreement, or the
consummation of any other Transaction, or obtains material damages in
connection with any Transaction, (ii) prohibits or limits materially the
ownership or operation by the Company, Parent or any of their subsidiaries
of all or any of the business or assets of the Company, Parent or any of
their subsidiaries that is material to either Parent and its subsidiaries
or the Company and its Subsidiaries, in either case, taken as a whole, or
compels the Company, Parent or any of their subsidiaries, as a result of
the Transactions, to dispose of or to hold separate all or any portion of
the business or assets of the Company, Parent or any of their subsidiaries
that is material to either Parent and its subsidiaries or the Company and
its Subsidiaries, in either case, taken as a whole, (iii) imposes or
confirms limitations on the ability of Parent, Purchaser or any other
affiliate of Parent to exercise effectively full rights of ownership of any
Shares, including, without limitation, the right to vote any Shares
acquired by Purchaser pursuant to the Offer or any Stockholders Agreement
or otherwise on all matters properly presented to the Company's
stockholders, including, without limitation, the approval and adoption of
the Merger Agreement and the Merger, (iv) requires divestiture by Parent,
Purchaser or any other affiliate of Parent of any Shares, or (v) which
otherwise has a Material Adverse Effect, provided that Purchaser shall
extend or amend, and not terminate, the Offer pursuant to this paragraph
(a) if the applicable law is a temporary or preliminary order, decree or
injunction and the Company is using all reasonable efforts to have such
order, decree or injunction reversed, vacated or lifted; and provided,
further that Purchaser's right to invoke this condition is subject to
Parent and Purchaser having used all reasonable efforts to prevent the
enactment, issuance, promulgation, enforcement or entry of such Law.
"Material Adverse Effect" is defined to mean any circumstance, change or
effect that, individually or when taken together with all other
circumstances, changes and effects, is or is reasonably likely to be
materially adverse to the business, operations, condition (financial or
otherwise), assets or liabilities (including, without limitation,
contingent liabilities) of the Company and the Subsidiaries taken as a
whole, except any such effect resulting from or arising in connection with
(A) changes or conditions (including changes in generally accepted
accounting principles, law, regulation or judicial or other interpretation)
affecting the general building construction industry generally or the
construction management industry generally, or (B) changes in economic or
financial market conditions generally;
(b) there shall have been instituted or be pending any litigation,
suit, claim, action, proceeding or investigation instituted by or on behalf
of any Governmental Authority seeking the entry of any order, decree or
injunction (whether temporary, preliminary or permanent) that is reasonably
likely to result, directly or indirectly, in any of the consequences
referred to in clauses (i) through (v) of paragraph (a) above;
37
<PAGE> 40
(c) there shall have occurred any Material Adverse Effect;
(d) there shall have occurred (i) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States or Germany, or (ii) any limitation (whether or not mandatory) by any
government or Governmental Authority, on the extension of credit by banks
or other lending institutions;
(e) any representation or warranty of the Company in the Merger
Agreement (i) which is qualified as to Material Adverse Effect shall not be
true and correct, subject to such Material Adverse Effect qualification, in
all respects or, (ii) any such representation or warranty that is not so
qualified shall not be true and correct except to the extent that the
failure of such representation or warranty to be true and correct could not
reasonably be expected to have a Material Adverse Effect or prevent or
materially delay consummation of the Offer or the Merger or otherwise
prevent or materially delay the Company from performing its obligations
under the Merge Agreement, in each case as if such representation or
warranty was made as of such time on or after the date of the Merger
Agreement, and except that any representation or warranty that addresses
matters only as of a particular date shall not be true and correct, subject
to the qualifications described above, as of such date;
(f) the Company shall have failed to perform, in any material respect,
any obligation or to comply, in any material respect, with any agreement or
covenant of the Company to be performed or complied with by it under the
Merger Agreement or any Stockholder shall have failed to perform in any
material respect, any obligation or to comply, in any material respect,
with any agreement or covenant of such Stockholder to be performed or
complied with by it under the Stockholders Agreement;
(g) the Merger Agreement shall have been terminated in accordance with
its terms; or
(h) Purchaser and the Company shall have agreed that Purchaser shall
terminate the Offer or postpone the acceptance for payment of or payment
for Shares thereunder,
which, in the reasonable judgment of Purchaser in any such case, and regardless
of the circumstances (including any action or inaction by Parent or any of its
affiliates) giving rise to any such condition, makes it inadvisable to proceed
with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Purchaser and Parent
and may be asserted by Purchaser or Parent regardless of the circumstances
giving rise to any such condition or may be waived by Purchaser or Parent in
whole or in part at any time and from time to time in their sole discretion. The
failure by Parent or Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right; the waiver of any such
right with respect to particular facts and other circumstances shall not be
deemed a waiver with respect to any other facts and circumstances; and each such
right shall be deemed an ongoing right that may be asserted at any time and from
time to time.
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 of representatives of Parent with
representatives of the Company during Parent's investigation of the Company (see
Section 10), neither Purchaser nor Parent is aware of any license or other
regulatory permit that appears to be material to the business of the Company and
the Subsidiaries, taken as a whole, which might be adversely affected by the
acquisition of Shares by Purchaser pursuant to the Offer or, except as set forth
below, of any approval or other action by any domestic (federal or state) or
foreign governmental, administrative or regulatory authority or agency 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
38
<PAGE> 41
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.
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 August 13, 1999, prior to the execution of the Merger Agreement,
the Board, by unanimous vote of all directors present at a meeting held on such
date, (A) determined that the Merger Agreement and the transactions determined
thereby, including each of the Offer and the Merger, and the transaction
contemplated by the Stockholders Agreement, are fair to and in the best interest
of the holders of Shares, (B) approved, adopted and declared advisable the
Merger Agreement and the Transactions. Accordingly, Section 203 is inapplicable
to the Offer and the Merger.
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 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 HSR Act and the rules that have been promulgated
thereunder by the FTC, certain acquisition transactions may not be consummated
unless certain information has been furnished to the Antitrust Division and the
FTC and certain waiting period requirements have been satisfied. The acquisition
of Shares by Purchaser pursuant to the Offer and the Stockholders Agreement are
subject to such requirements. See Section 2.
Pursuant to the HSR Act, RWE will file, as promptly as practicable, a
Premerger Notification and Report Form in connection with the purchase of Shares
pursuant to the Offer and the Stockholder Agreements with the Antitrust Division
and the FTC. Under the provisions of the HSR Act applicable to the Offer, the
purchase of Shares pursuant to the Offer may not be consummated until the
expiration of a 15-calendar day waiting period following the filing by RWE.
Accordingly, its is anticipated that the waiting period
39
<PAGE> 42
under the HSR Act applicable to the purchase of Shares pursuant to the Offer
will expire at 11:59 p.m., New York City time, 15 calendar days after RWE has
made its filing, unless such waiting period is earlier terminated by the FTC or
extended by a request from the FTC or the Antitrust Division for additional
information or documentary material prior to the expiration of the waiting
period. No separate waiting period would apply to the purchase of Shares
pursuant to the Stockholders Agreement after the expiration of the waiting
period applicable to the Offer. If, however, the Offer is terminated prior to
the expiration of the 15-day waiting period, the parties would have to refile
Premerger Notification and Report Forms, and a 30-day waiting period would apply
to the purchase of Shares pursuant to the Stockholders Agreement running from
the date of the original filing. Pursuant to the HSR Act, RWE will request early
termination of the waiting period applicable to the Offer. There can be no
assurance, however, that the 15-day HSR Act waiting period will be terminated
early. If either the FTC or the Antitrust Division were to request additional
information or documentary material from RWE and/or the Company with respect to
the Offer, the purchase of Shares pursuant to the Offer would not be consummated
until the expiration of a 10-calendar day waiting period commencing on the date
that requested additional information is received by the requesting authority.
Thereafter, the waiting period could be extended only by court order. If the
acquisition of Shares is delayed pursuant to a request by the FTC or the
Antitrust Division for additional information or documentary material pursuant
to the HSR Act, the Offer may, but need not, be extended and, in any event, the
purchase of and payment for Shares will be deferred until 10 days after the
request is substantially complied with, unless the extended period expires on or
before the date when the initial 15-day period would otherwise have expired, or
unless the waiting period is sooner terminated by the FTC and the Antitrust
Division. Only one extension of such waiting period pursuant to a request for
additional information is authorized by the HSR Act and the rules promulgated
thereunder, except by court order. Any such extension of the waiting period will
not give rise to any withdrawal rights not otherwise provided for by applicable
law. If, on the initial scheduled expiration date of the Offer, the applicable
waiting period under the HSR Act has not expired or been terminated, then
Purchaser shall extend the Offer from time to time until five business days
after the expiration or termination of the applicable waiting period under the
HSR Act. See Section 4. It is a condition to the Offer that the waiting period
applicable under the HSR Act to the Offer expire or be terminated. See Section 2
and Section 14.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
Purchaser pursuant to the Offer or the Stockholders Agreement. At any time
before or after the purchase of Shares pursuant to the Offer or the Stockholders
Agreement by Purchaser, the FTC or the Antitrust Division could take such action
under the antitrust laws as it deems necessary or desirable in the public
interest, including seeking to enjoin the purchase of Shares pursuant to the
Offer or the Stockholders Agreement or seeking the divestiture of Shares
purchased by Purchaser or the divestiture of substantial assets of RWE, Parent,
the Company or their respective subsidiaries. Private parties and state
attorneys general may also bring legal action under federal or state antitrust
laws under certain circumstances. Based upon an examination of information
available to RWE and Parent relating to the businesses in which RWE, Parent, the
Company and their respective subsidiaries are engaged, RWE, Parent and Purchaser
believe that the Offer will not violate the antitrust laws. Nevertheless, there
can be no assurance that a challenge to the Offer on antitrust grounds will not
be made or, if such a challenge is made, what the result would be. See Section
14 for certain conditions to the Offer, including conditions with respect to
litigation.
16. FEES AND EXPENSES.
Except as set forth below, Purchaser or Parent will not pay any fees or
commissions to any broker, dealer or other person for soliciting tenders of
Shares pursuant to the Offer.
Parent has engaged Goldman, Sachs & Co. to act as its financial adviser.
Pursuant to a letter agreement dated April 6, 1999, Parent has agreed to pay a
minimum fee of $250,000 to Goldman, Sachs & Co. and will pay such firm a
transaction fee of $2,750,000 (against which the $250,000 minimum fee will be
credited), contingent upon consummation of the acquisition of the Company.
Parent has also agreed to reimburse Goldman, Sachs & Co. for its reasonable
out-of-pocket expenses related to its engagement, including the fees
40
<PAGE> 43
and disbursements of legal counsel, and to indemnify Goldman, Sachs & Co.
against certain liabilities and expenses in connection with its engagement,
including certain liabilities under federal securities laws.
Purchaser and Parent have retained Innisfree M&A Incorporated, as the
Information Agent, and First Chicago Trust Company of New York, 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.
The Information Agent and the Depositary will each receive its customary
compensation for its services, will be reimbursed for certain out-of-pocket
expenses and will be indemnified against certain liabilities and expenses in
connection with the Offer, including certain liabilities under federal
securities laws.
17. MISCELLANEOUS.
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 LETTERS 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 Commission the Schedule
14D-1, together with exhibits, furnishing certain additional information with
respect to the Offer. The Schedule 14D-1 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 Commission).
BETA ACQUISITION CORP.
August 20, 1999
41
<PAGE> 44
Manually executed facsimiles of the Letter of Transmittal 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:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Overnight Courier: By Mail: By Hand:
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
Corporate Action Corporate Action Corporate Action
Suite 4680 Suite 4660 c/o Securities Transfer and
14 Wall Street, 8th Floor P.O. Box 2569 Reporting Services, Inc.
New York, NY 10005 Jersey City, NJ 07303-2569 100 William Street, Galleria
New York, NY 10038
</TABLE>
------------------------------------
Questions or requests for assistance may be directed to the Information
Agent at its respective 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:
INISFREE LOGO
501 MADISON AVENUE, 20TH FLOOR
NEW YORK, NEW YORK 10022
BANKS AND BROKERS CALL COLLECT: (212) 750-5833
ALL OTHERS CALL TOLL-FREE: (888) 750-5834
42
<PAGE> 45
SCHEDULE I
INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS
OF PARENT, RWE AND PURCHASER
A. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT
The following table sets forth the name, principal business address,
present principal occupation or employment, five-year employment history and
certain other information concerning the directors and executive officers of
Parent. Unless otherwise indicated, the business address of each individual
listed below is Parent, Opernplatz 2, 45128 Essen, Germany, and the position is
with Parent. Each person listed is citizen of Germany.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OR EMPLOYMENT
NAME AGE AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- --- --------------------------------
<S> <C> <C>
Hans-Peter Keitel 52 Chairman and Chief Executive Officer of Parent since
(Dr.-Ing. Dr.-Ing E.h.) 1992; Member of the Executive Board of RWE since 1992;
Member of the Supervisory Board of DEA Mineraloel AG
(manufacturing and marketing of petroleum products &
petrochemicals; Hamburg, Germany) since 1993; Member of
the Supervisory Board of Iveco Magirus AG (truck
builder; Munich, Germany) since 1998; Member of the
Supervisory Board of Lahmeyer AG (industrial systems;
Guiollettstrasse 48, 60325 Frankfurt am Main, Germany)
since 1997; Member of the Supervisory Board of Raab
Karcher AG-Veba Immobilien Management (real estate;
Germany) since 1993; Member of the Supervisory Board of
RWE Telliance AG (telecommunications; Gutenbergstrasse
3, 45128 Essen, Germany) since 1998; Director of Ballast
Nedam N.V.(construction business; Laan van Kronenburg 2,
1183 AS Amstelveen, Netherlands) since 1994; Director of
Leighton Holdings Limited (construction business;
Leighton House, 472 Pacific Highway, St. Leonards NSW
2065, Australia) since 1992; Director of Pilkington plc
(glass manufacturer; Prescot Road, St. Helens, WA10 3TT,
United Kingdom) since 1995; Member of the Board of
Directors of HOCHTIEF Inc. (Wilmington, Delaware) since
1996.
Friedel Abel 54 Member of the Executive Board of Parent since 1995;
Member of the Supervisory Board of Streif AG (real
estate; 54595 Weinsheim/Eifel, Germany) since 1997.
Hans-Wolfgang Koch 58 Member of the Executive Board of Parent since 1999;
Chairman of the Executive Board of Balcke Durr AG
between 1990 and 1999.
Wolfhard Leichnitz 46 Member of the Executive Board of Parent since 1992;
(Dr.-Ing.) Member of the Supervisory Board of BUL-Bergbausanierung
und Landschaftsgestaltung Brandenburg GmbH (Chairman)
(environmental restoration; Senftenberg, Germany)
between 1994 and 1999; Member of the Supervisory Board
of Flughafen Dusseldorf GmbH (airport; Dusseldorf,
Germany) since 1998; Member of the Supervisory Board of
Mannesmann Demag AG (Krauss-Maffei Strasse 2, 80997
Munich, Germany) since 1994; Member of the Supervisory
Board of Rheinelektra Technik GmbH (engineering and
electrical supply; Augustaanlage 32, 68165 Mannheim,
Germany); Director of Concor Limited (construc-
</TABLE>
I-1
<PAGE> 46
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OR EMPLOYMENT
NAME AGE AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- --- --------------------------------
<S> <C> <C>
tion; Concor House, 13 Church Street Ext., Crown
Industria, Johannesburg 2092, South Africa) since 1993;
Member of the Supervisory Board of Athens International
Airport S.A. (airport operator; Athens, Greece) since
1999.
Busso Peus 57 Member of the Executive Board of Parent since 1994;
(Dr. jur.) Director of Ballast Nedam N.V.(construction; Laan van
Kronenburg 2, 1183 AS Amstelveen, Netherlands) since
1994; Director of Leighton Holdings Limited
(construction; Leighton House, 472 Pacific Highway, St.
Leonards NSW 2065, Australia) since 1994; Director of
Gatanti-Koza Insaat Sanayi ve Ticaret A.S.(structual and
civil engineering & property development; Baglarbasi
Kisikli Caddesi 28, Altunizade 81180 Uskudar-Istanbul,
Turkey) since 1997.
Karl Ronnberg 56 Member of the Executive Board of Parent since 1994;
(Dr.-Ing.) Director of Construcciones LAIN, S.A. (construction;
Madrid, Spain) since 1997; HOCHTIEF do Brasil
S.A.(construction; Av. Alfredo Egidio de Souza, Aranha
145, Sao Paulo 04726, Brazil) since 1995; Director of
Leighton Asia Limited (construction, Cayman Islands /
British West Indies) since 1993; Director of Kitchell
Corporation (construction & property development; 1707
East Highland, Phoenix Arizona 85016, USA) since 1993.
Director of Hochtief Construcciones S.A. (Av. Corrientes
222-10 y 11 Piso, 1043 Buenos Aires, Argentina) since
1997; President of HT Construction, Inc. (Dover,
Delaware) since 1990.
Hans-Georg Vater 57 Member of the Executive Board of Parent since 1996; CEO
(Dr. rer. pol.) of MAN Gutehoffnungshutte AG (engineering;
Bahnhofstrasse 66, 46145 Oberhausen, Germany) from 1988
to 1995; Member of the Supervisory Board of
Deilmann-Haniel GmbH (special civil engineering;
Dortmund, Germany) between 1998 and 1999; Member of the
Supervisory Board of Monachia Grundstucks-AG (real
estate; Nymphenburger Strasse 48, 80335 Munich, Germany)
since 1998; Member of the Supervisory Board of Streif AG
(Chairman) (housing construction; 54595 Wein-
sheim/Eifel, Germany) since 1996; Director of Athens
International Airport S.A. (airport operator; Athens,
Greece) between 1996 and 1999; Director of Gatanti-Koza
Insaat Sanayi ve Ticaret A.S.(structual and civil
engineering & property development; Baglarbasi Kisikli
Caddesi 28, Altunizade 81180 Uskudar-Istanbul, Turkey)
since 1997.
Dietmar Kuhnt Chairman of the Supervisory Board of Parent; Chairman of
(Dr. jur.) the Board of Management of RWE. Member of the
RWE AG Supervisory Board of Allianz Versicherungs-AG
Opernplatz 1 (insurance) (Koniginstrasse 28, 80802 Munich, Germany);
45128 Essen Member of the Supervisory Board of Dresdner Bank AG
Germany (bank; Frankfurt am Main, Germany); Member of the
Supervisory Board of Hapag-Lloyd AG (transportation
Germany); Member of the Supervisory Board of
Heidelberger Druckmaschinen AG (Chairman)
(Kurfursten-Anlage 52-60, 69115 Heidelberg, Germany);
Mem-
</TABLE>
I-2
<PAGE> 47
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OR EMPLOYMENT
NAME AGE AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- --- --------------------------------
<S> <C> <C>
ber of the Supervisory Board of Lahmeyer AG (Chairman)
(industrial systems; Guiollettstrasse 48, Frankfurt am
Main, Germany); Member of the Supervisory Board of
Metallgesellschaft AG (Germany); Member of the
Supervisory Board of Preussag AG, (Germany); Member of
the Supervisory Board of Rheinbraun AG (Chairman)
(mining and raw materials; Stuttgenweg 2, 50935 Cologne,
Germany); Member of the Supervisory Board of RWE-DEA AG
fur Mineraloel und Chemie (Chairman); (Hamburg,
Germany); Member of the Supervisory Board of RWE Energie
AG (Chairman) (energy; Kruppstrasse 5, 45128 Essen,
Germany); Member of the Supervisory Board of RWE Umwelt
AG (Chairman) (environmental services; Opernplatz 1,
45128 Essen, Germany).
Gerhard Peters 51 Deputy Chairman of the Supervisory Board of Parent;
HOCHTIEF AG Administrative Officer since 1972.
Bockenheimer
Landstrasse 24
60323 Frankfurt am Main
Germany
Joachim Albrecht 61 Construction Plant Operator since 1959; Member of the
HOCHTIEF AG Supervisory Board of Parent.
Dusseldorf -- branch
Zollhof 30
40221 Dusseldorf
Germany
Alois Binder 51 Electrician since 1968; Member of the Supervisory Board
HOCHTIEF AG of Parent.
Waltershofenerstrasse 21
79111 Freiburg
Germany
Clemens Borsig 51 Member of the Executive Board of Parent since 1997;
(Prof. Dr.) Between 1994 and 1997 at Robert Bosch GmbH (Germany);
RWE AG Member of the Supervisory Board of Parent; Member of the
Opernplatz 1 Supervisory Board of Commerzbank AG (bank; business
45128 Essen located at Frankfurt am Main, Germany); Member of the
Germany Supervisory Board of DEA Mineraloel AG (Chairman)
(manufacturing and marketing of petroleum products &
petrochemicals; Hamburg, Germany); Member of the
Supervisory Board of Gerling Konzern Speziale
Kreditversicherungs-AG (Germany); Member of the
Supervisory Board of Heidelberger Druckmaschinen AG
(Kurfursten-Anlage 52-60, 69115 Heidelberg, Germany);
Member of the Supervisory Board of Lahmeyer AG
(industrial systems; Guiollettstrasse 48, 60325
Frankfurt am Main, Germany); Member of the Supervisory
Board of Rheinbraun AG (mining and raw materials;
Stuttgenweg 2, 50935 Cologne, Germany); Member of the
Supervisory Board of RWE-DEA AG fur Mineraloel und
Chemie (Hamburg, Germany); Member of the Supervisory
Board of RWE Energie AG (energy;
</TABLE>
I-3
<PAGE> 48
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OR EMPLOYMENT
NAME AGE AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- --- --------------------------------
<S> <C> <C>
Kruppstrasse 5, 45128 Essen, Germany); Member of the
Supervisory Board of RWE Telliance AG (Chairman) (tele-
communications; business located at Gutenbergstrasse 3,
45128 Essen, Germany); Member of the Supervisory Board
of RWE Umwelt AG (environmental services; business
located at Opernplatz 1, 45128 Essen, Germany); Director
of Foreign & Colonial Eurotrust plc.; Director of
o.tel.o communications Geschaftsfuhrungs GmbH
(Dusseldorf, Germany).
Detlev Bremkamp 55 Member of the Executive Board of Allianz AG (insurance;
Allianz AG Koniginstrasse 28, 80802 Munich, Germany) since 1980;
Koniginstrasse 28, Member of the Supervisory Board of Parent since 1996;
80802 Munich Member of the Supervisory Board of Asea Brown Boveri AG
Germany (technology; Gottlieb-Daimler-Strasse 8, 68165 Mannheim,
Germany) since 1995; Arab International Insurance Co.
(insurance; Cairo, Egypt) since 1989; Banco Popular
Espanol (bank; Madrid, Spain) since 1997; Banco Portuges
de Investimento (bank; Porto, Portugal) since 1997;
Dresdner ABD Securities Ltd (bank; Hong Kong) since
1990.
Helmut Dreisbach Foreman Fitter; Member of the Supervisory Board of
Streif AG Parent.
54595 Weinsheim/Eifel
Germany
</TABLE>
I-4
<PAGE> 49
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OR EMPLOYMENT
NAME AGE AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- --- --------------------------------
<S> <C> <C>
Ulrich Hartmann 61 Chairman of the Executive Board of VEBA AG (energy and
VEBA AG, chemicals; Germany), since 1993; Member of the
Bennigsenplatz 1, Supervisory Board of Parent since 1996; Member of the
40474 Dusseldorf Supervisory Board of Degussa AG (Chairman) (chemicals;
Germany Weissfrauenstrasse 9, 60287 Frankfurt am Main, Germany)
between 1998 and 1999; Member of the Supervisory Board
of Huls AG (Chairman) (chemicals; business located at
Paul-Baumann-Strasse 1, 45764 Marl, Germany) between
1993 and 1999; Member of the Supervisory Board of
Degussa-Huls AG (Chairman) (chemicals; business located
at Weissfrauenstrasse 9, 60287 Frankfurt am Main,
Germany) since 1999; Member of the Supervisory Board of
Deutsche Lufthansa AG (airline; Lufthansa-Basis, 60546
Frankfurt, Germany) since 1998; Member of the Supervi-
sory Board of IKB Deutsche Industriebank AG (long-term
credit financing; Wilhelm-Botzkes-Strasse 1, 40474
Dusseldorf, Germany) since 1995; Member of the
Supervisory Board of Munchener
Ruckversicherungs-Gesellschaft AG (reinsurance;
Koniginstrasse 107, 80791 Munich, Germany) between 1993
and 1996, and Chairman since 1996; Member of the
Supervisory Board of PreussenElektra AG (Chairman)
(utility; Tresckowstrasse 5, 30457 Hanover, Germany)
since 1993; Member of the Supervisory Board of Raab
Karcher AG (distribution/services;
Rudolf-von-Bennigsen-Foerder-Platz 1, 45131 Essen,
Germany) between 1993 and 1998; Member of the
Supervisory Board of VEBA Immobilien AG (currently known
as) Viterra AG (Chairman) (real estate/energy services;
Grugaplatz 2, 45131 Essen, Germany), since 1996; Member
of the Supervisory Board of RAG AG (Chairman) (mining;
Rellinghauserstrasse 1, 45128 Essen, Germany since 1993;
Member of the Supervisory Board of Daimler-Benz AG (car
manufacturer; Epplestrasse 225, 70546 Stuttgart,
Germany) between 1996 and 1998; Member of the
Supervisory Board of VEBA OEL AG (Chairman) (oil
company; Alexander-von-Humboldt-Strasse, 45896
Gelsenkirchen, Germany, since 1993; Member of the
Supervisory Board of Stinnes AG (logistics; Humboldtring
15, 45472 Muhlheim/ Ruhr, Germany) since 1993; Member of
the Supervisory Board of Hapag Lloyd AG (transportation;
Ballindamm 25, 20095 Hamburg, Germany) between 1993 and
1998; Member of the Share holders Committee of Henkel
KGaA (chemicals; Henkelstrasse 67, 40191 Dusseldorf,
Germany) since 1994; Member of the Board of Directors of
VEBA Corporation (holding located at 605 Third Avenue;
New York, N.Y. 10158 USA) between 1997 and 1999,
Chairman of the above Board of Directors between 1993
and 1997, Member of the Supervisory Board of VEBA
Telecom GmbH (telecommunications, business located at
Benningsenplatz 1, 40474 Dusseldorf/Germany) between
1997 and 1999; Member of the Shareholders Committee of
o.tel.o communications GmbH & Co. (telecommunications,
business located at Heerdter Lohweg 35, 40459
Dusseldorf/Germany) between 1997 and 1999; Member of the
Board of Directors of Cable & Wirless plc.
(telecommunications, business located at
</TABLE>
I-5
<PAGE> 50
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OR EMPLOYMENT
NAME AGE AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- --- --------------------------------
<S> <C> <C>
124 Theobalds Road, London WC1X 8RX/Great Britain)
between 1995 and 1997.
Josef Hess 52 Warehousekeeper since 1970; Member of the Supervisory
HOCHTIEF AG Board of Parent since 1986.
Hansastrasse 12-16
80686 Munich
Germany
Gerhard Hilke 46 Head Manager at the Frankfurt am Main Subbranch since
HOCHTIEF AG 1997; Division Manager of the Frankfurt am Main
Niederlassung Frankfurt/Main Subbranch between 1993 and 1997; Member of the
Bockenheimer Landstrasse 24, 60323 Supervisory Board of Parent since 1998.
Frankfurt am Main
Germany
Martin Kohlhausen 63 Chairman of the Executive Board of Commerzbank AG (bank;
(Dr. rer. pol. h c.) Frankfurt am Main, Germany) since 1991; Member of the
Commerzbank AG Supervisory Board of Parent since 1996; Member of the
Frankfurt am Main Supervisory Board of Bayer AG (Leverkusen, Germany)
Germany since 1991; Member of the Supervisory Board of
Bertelsmann AG (publishing; Germany) since 1995; Member
of the Supervisory Board of GKN Automotive International
GmbH (Chairman) (automotive; Germany); Member of the
Supervisory Board of Karstadt AG (Germany) since 1991;
Member of the Supervisory Board of RHEINHYP Rheinische
Hypothekenbank AG (Chairman) (bank; Germany) since 1991;
Member of the Supervisory Board of Schering AG (Germany)
since 1993; Director of Commerzbank International S.A.
(CISAL) (Chairman) since 1991; Director of Commerzbank
(Schweiz) AG (President)(Switzerland) since 1991;
Director of Commerzbank (South East Asia ) Ltd.
(Chairman) since 1991; Director of DaimlerChrysler AG
(Germany) since 1998; Director of Jupiter International
Group PLC (Chairman)(United Kingdom) since 1993;
Director of Kreditanstalt fur Wiederaufbau (Germany)
since 1998; Director of Liquiditats-Konsortialbank GmbH
(located at Germany) since 1997.
</TABLE>
I-6
<PAGE> 51
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OR EMPLOYMENT
NAME AGE AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- --- --------------------------------
<S> <C> <C>
Horst Moritz 59 Chairman of the Westphalia Branch of the Construction,
IG-Bauen-Agrar-Umwelt Agricultural and Environmental Employees' Union; Member
Landesverband Westfalen, of the Supervisory Board of Parent.
Kreuzstrasse 22,
44139 Dortmund Germany
Heinrich v. Pierer 58 Chairman of the Executive Board of Siemens AG
(Dr. jur.; Dr.-Ing. E.h.) (electronics; Wittelsbacherplatz 2, 80333 Munich,
Siemens AG Germany) since 1992; Member of the Supervisory Board of
Wittelsbacherplatz 2 Parent since 1991; Member of the Supervisory Board of
80333 Munich Germany Bayer AG (chemicals; Leverkusen, Germany) since 1993;
Member of the Supervisory Board of Volkswagen AG (car
manufacturer; Wolfsburg, Germany), since 1996; Chairman
of the Supervisory Board of Siemens AG Austria Vienna,
Austria) since 1993; Member of the Supervisory Board of
Munchener Ruckversicherungs AG, Munich, Germany, since
1999.
Jurgen Strube Chairman of the Executive Board of BASF AG
(Dr. jur.) (manufacturing; Ludwigshafen, Germany) since 1990;
BASF AG Member of the Supervisory Board of Allianz
67056 Ludwigshafen Lebensversicherungs-AG (life insurance; Stuttgart,
Germany Germany) since 1990; Member of the Supervisory Board of
Commerzbank AG (bank; Frankfurt am Main, Germany) since
1998; Member of the Supervisory Board of Hapag-Lloyd AG
(transportation; Hamburg, Germany) since 1995; Member of
the Supervisory Board of Parent since 1996; Germany Fund
(fund business; New York) since 1986; Central European
Equity Fund (fund business; New York) since 1990; BASFIN
Corporation (Chairman) (holding; New Jersey) since 1990.
Heinrich Weiss 57 Chairman of the Executive Board of SMS AG (Eduard-
SMS AG Schloemann-Strasse 4, 40237 Dusseldorf, Germany) since
Eduard-Schloemann-Strasse 4 1974; Member of the Supervisory Board of Parent since
40237 Dusseldorf 1996. Member of the Supervisory Board of Bertelsmann AG
Germany (publishing; Germany) since 1991; Member of the
Supervisory Board of Commerzbank AG (bank; Frankfurt am
Main, Germany) since 1986; Member of the Supervisory
Board of Ferrostaal AG (Germany) since 1997; Member of
the Supervisory Board of Heraeus Holding GmbH (Germany);
Member of the Supervisory Board of J.M. Voith AG
(Germany); Member of the Supervisory Board of SMS
Schloemann-Siemag AG (Chairman) (Germany); Member of the
Supervisory Board of SIEMAG TRANSPLAN GmbH (Germany).
Klaus Wiesehugel 46 Chairman of the National Executive Committee of the Con-
IG-Bauen-Agrar-Umwelt struction, Agricultural and Environmental Employees
Bundesvorstand Union since 1995; Member of the National Executive
Olaf-Palme-Strasse 19 Committee between 1991 and 1995; Member of the
60439 Frankfurt am Main Germany Supervisory Board of Parent. Member of the Supervisory
Board of Union Druckerei GmbH (Germany).
</TABLE>
I-7
<PAGE> 52
B. DIRECTORS AND EXECUTIVE OFFICERS OF RWE.
The following table sets forth the name, principal business address,
present principal occupation or employment, five-year employment history and
certain other information concerning the directors and executive officers of
RWE. Unless otherwise indicated, the business address of each individual listed
below is RWE, Opernplatz 1, 45128 Essen, Germany, and the position is with RWE.
Each person listed is citizen of Germany.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OR EMPLOYMENT
NAME AGE AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- --- --------------------------------
<S> <C> <C>
Dietmar Kuhnt 61 See information provided above under "A. Directors and
(Dr. jur.) Executive Officers of Parent".
Clemens Borsig 51 See information provided above under "A. Directors and
(Prof. Dr.) Executive Officers of Parent".
Dieter Drager 60 Chairman of the Board of Management of RWE-DEA AG fur
RWE-DEA AG fur Mineraloel und Chemie (Uberseering 40, 22297 Hamburg,
Mineraloel und Chemie Germany) since 1997; Chairman of the Board of Management
Uberseering 40 of DEA Mineraloel AG (Hamburg, Germany) since 1998;
22297 Hamburg Member of the Board of Management of RWE since 1997;
Germany Member of the Board of Management of Deutsche Texaco
GmbH (1989 change of the company name: RWE-DEA AG fur
Mineraloel und Chemie) (Uberseering 40, 22297 Hamburg,
Germany) between 1979 and 1997; Member of the
Supervisory
</TABLE>
I-8
<PAGE> 53
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OR EMPLOYMENT
NAME AGE AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- --- --------------------------------
<S> <C> <C>
Board of rhenag Rheinische Energie AG (Cologne,
Germany); Director of CONDEA Augusta S.p.A.(Palermo,
Italy); CONDEA Nanjing Chemical Company; No. 68 Fang
Shui Road Large Chang Lu Town, Dachang District,
Nanjing, Jiangsu Province, Post Code:210047, P.R.China);
Director of CONDEA Vista Company (900 Threadneedle, POB
19029, Houston/Texas 77224-9020/USA).
Thomas Geitner 44 Chairman of the Board of Management of VR Telecommunica-
tions Geschaftsfuhrungs GmbH (change of the company name
from o.tel.o Telecommunications Geschaftsfuhrungs GmbH
to VR Telecommunications Geschaftsfuhrungs GmbH )
(telecommunication; Bennigsenplatz 1, Dusseldorf,
Germany) since 1998; Member of the Board of Management
of RWE, since 1998; Leybold AG (vacuum technology &
plant engineering; Wilhelm-Rohn-Strasse 25, 63450 Hanau,
Germany) between 1992 and 1995; Rheinelektra AG
(engineering & electrical supply business; Germany)
between 1995 and 1997; Lahmeyer AG fur Energiewirtschaft
Germany) between 1995 and 1997; Lahmeyer AG (industrial
systems; Guiollettstrasse 48, 60325 Frankfurt am Main,
Germany) between 1997 and 1998; Member of the
Supervisory Board of Deutsche Babcock AG (Germany);
Member of the Supervisory Board of E-Plus Mobilfunk GmbH
(telecommunications; Dusseldorf, Germany); Member of the
Supervisory Board of Heidelberger Druckmaschinen AG
(Kurfursten-Anlage 52-60, 69115 Heidelberg, Germany);
Member of the Supervisory Board of
Lech-Elektrizitatswerke AG (Augsburg, Germany); Member
of the Supervisory Board of MAQUET AG (Chairman)
(Rastatt, Germany); Member of the Supervisory Board of
Pfalzwerke AG (Germany); Member of the Supervisory Board
of SINGULUS TECHNOLOGIES AG (Germany).
Dieter Henning 63 Chairman of the Board of Management of Rheinbraun AG
(Dr. Dr. E.h.) (mining and raw materials; Stuttgenweg 2, 50935 Cologne,
Rheinbraun AG Germany) since 1993; Member of the Board of Management
Stuttgenweg 2 of RWE since 1993; Member of the Supervisory Board of
50935 Cologne DEA Mineraloel AG (refining and marketing of petroleum;
Germany Hamburg, Germany); Member of the Supervisory Board of
Energieversorgung Spree-Schwarze Elster AG (Cottbus,
Germany); Member of the Supervisory Board of Krupp
Engineering GmbH (engineering; Germany); Member of the
Supervisory Board of Lausitzer Braunkohle GmbH
(Chairman) (Senftenberg, Germany); Director of Consol
Energy Inc. (coal mining; Wilmington, Delaware) since
1994; Director of Consol Inc. (coal mining; Pittsburgh,
Pennsylvania) since 1994; Director of MATRA Rt (Visonta,
Hungary).
</TABLE>
I-9
<PAGE> 54
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OR EMPLOYMENT
NAME AGE AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- --- --------------------------------
<S> <C> <C>
Hans-Peter Keitel See information provided above under "A. Directors and
(Dir.-Ing. Dir.-Ing. E.h.) Executive Officers of Parent".
Richard R. Klein 55 Chairman of the Board of Management of RWE Umwelt AG
(Dr. rer. pol.) (environmental services; Opernplatz 1, 45128 Essen,
RWE Umwelt AG. Germany) since 1996; Member of the Board of Management
Opernplats 1 of RWE since 1996; Member of the Board of Management of
45128 Esse RWE Energie AG (energy; Kruppstrasse 5, 45128 Essen,
Germany Germany) between 1994 and 1996; Member of the
Supervisory Board of DEA Mineraloel AG (refining and
marketing of petroleum; Hamburg, Germany); Member of the
Supervisory Board of Rheinbraun AG (mining and raw
materials; Stuttgenweg 2, 50935 Cologne, Germany);
Member of the Supervisory Board of RWE Telliance AG
(telecommunications; Gutenbergstrasse 3, 45128 Essen,
Germany); Member of the Supervisory Board of Trienekens
Entsorgung GmbH (Chairman) (Waste management; Viersen,
Germany) Director of ENSR International Consulting GmbH
(Chairman); Director of Hungariavisz Vagyonkezelo Rt.
(Hungary); Director of NUKEM GmbH (Industriestrasse 13,
63755 Alzenau, Germany); Director of o.tel.o
communications Geschaftsfuhrungs GmbH
(telecommunications; Dusseldorf, Germany); Director of
REO RWE Entsorgung s.r.o.; Director of REP Environmental
Processes Inc./ENSR Corp. (Chairman) (Acton,
Massachusetts); Director of R+T Entsorgung GmbH
(Viersen, Germany); Director of R+T Umwelt GmbH (Chair-
man) (Essen, Germany); Director of RWE Aqua GmbH
(Chairman) (Essen, Germany); Director of RWE Umwelt
International GmbH (Chairman) (Essen, Germany); Director
of VEKS-Verwertung und Entsorgung Karnap-Stadte Holding
GmbH (Germany).
Hartmut Mehdorn 57 Chairman of the Board of Management of Lahmeyer AG
Heidelberger (industrial systems; Guiollettstrasse 48, 60325
Druckmaschinen AG Frankfurt am Main, Germany); Chairman of the Board of
Kurfursten-Anlage 52-60 Management of Heidelberger Druckmaschinen AG
69115 Heidelberg (Kurfursten-Anlage 52-60, 69115 Heidelberg, Germany);
Germany Member of the Board of Management of RWE since 1998;
Director of Deutsche Aerospace AG (aerospace; Germany);
Director of Deutsche Aerospace -- Airbus GmbH
(aerospace; Germany.)
Manfred Remmel 53 Chairman of the Board of Management of RWE Energy AG
RWE Energy AG (energy; Kruppstrasse 5, 45128 Essen, Germany) since
Kruppstrasse 5 1999; Member of the Board of Management of RWE since
45128 Essen 1999; Deputy Member of the Board of Management of
Germany Mercedes Benz AG (car manufacturer; Stuttgart, Germany)
between 1992 and 1996; Member of the Divisional Board of
Daimler-Benz AG (Stuttgart, Germany) between 1997 and
1998.
Rudolf Schwan 53 Member of the Board of Management of RWE since 1997;
Member of the Board of of Management of RWE Energie AG
(energy; business located at Kruppstrasse 5, 45128
Essen, Germany) between 1992 and 1997; Member of the
Supervisory Board of Elektrizitatswerk Rheinhessen AG
(Germany); Member of the Supervisory Board of
Energieversorgung Spree-
</TABLE>
I-10
<PAGE> 55
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OR EMPLOYMENT
NAME AGE AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- --- --------------------------------
<S> <C> <C>
Schwarze Elster AG (Chairman) Cottbus, Germany) since;
Member of the Supervisory Board of Felten & Guilleaume
Energietechnik AG (Germany) Member of the Supervisory
Board of Hannover Ruckversicherungs-AG (reinsurance;
Hanover, Germany); Member of the Supervisory Board of
Koblenzer Elektrizitatswerk und Verkehrs-AG (Koblenz,
Germany); Member of the Supervisory Board of
Rheinkraftwerk Albbruck-Dogern AG (Germany); Member of
the Supervisory Board of rhenag Rheinische Energie AG
(Cologne, Germany); Member of the Supervisory Board of
RWE-DEA AG fur Mineraloel und Chemie (Hamburg, Germany).
Jan Zilius 53 Member of the Board of Management of RWE since 1998;
Member of the Board of Management of Rheinbraun AG
(mining an raw materials; Stuttgenweg 2, 50935 Cologne,
Germany) between 1990 and 1998; Member of the
Supervisory Board of Anhaltinische
Braunkohlesanierungsgesellschaft mbH (Germany); Member
of the Supervisory Board of Energieversorgung Oberhausen
AG (Germany); Member of the Supervisory Board of
Koblenzer Elektrizitatswerk und Verkehrs-AG (Koblenz,
Germany); Member of the Supervisory Board of Rheinbraun
AG (mining and raw materials; business located at
Stuttgenweg 2, 50935 Cologne, Germany); Member of the
Supervisory Board of rhenag Rheinische Energie AG
(Cologne, Germany); Member of the Supervisory Board of
Schluchseewerke AG (Germany); Member of the Supervisory
Board of Vereinigte SaarElektrizitats-AG (Germany).
Friedel Neuber 64 Chairman of the Supervisory Board of RWE; Chairman of
(Dr. h.c.) the Executive Board of Westdeutsche Landesbank
Westdeutsche Girozentrale (bank; Westdeutsche Landesbank
Landesbank Girozentrale Girozentrale, Herzogstrasse 15, 40217 Dusseldorf,
Herzogstrasse 15, Germany) since 1981; Member of the Supervisory Board of
40217 Dusseldorf Deutsche Babcock AG (Chairman) (Germany); Member of the
Supervisory Board of Deutsche Bahn AG (railway;Germany);
Member of the Supervisory Board of Douglas Holding AG
(Germany); Member of the Supervisory Board of Fried.
Krupp AG Hoesch-Krupp (Germany); Member of the
Supervisory Board of Hapag-Lloyd AG (transportation;
Ballindamm 25, 20095 Hamburg, Germany); Member of the
Supervisory Board of Preussag AG (Chairman)
(Karl-Wiechert Allee 4, 30625 Hanover, Germany);
Director of AXA-UAP S.A. (insurance; France); Director
of Bank Austria AG (bank; Vienna, Austria).
Alwin Fitting 46 Deputy Chairman of RWE; Power Plant Engineer; Member of
RWE Energie AG the Supervisory Board of RWE Energie AG (energy; Krupp-
Kraftwerk Biblis strasse 5, 45128 Essen, Germany).
Postfach 11 40
68643 Biblis
Klaus Peter Balthasar 45 County comissioner Landkreis Cochem-Zell since 1990;
Endentplatz 2 Member of the Supervisory Board of RWE; Member of the
56812 Cochem Supervisory Board of RW Holding AG holding Germany);
Germany Director of Hunsruck Touristik GmbH (tourism; Germany);
</TABLE>
I-11
<PAGE> 56
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OR EMPLOYMENT
NAME AGE AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- --- --------------------------------
<S> <C> <C>
Director of Kreissparkasse Cochem-Zell (bank; Germany);
Director of Moselland-Touristik GmbH (tourism; Germany).
Carl-Ludwig von Member of the Board of Management of Deutsche Bank AG
Boehm-Bezing (bank; Frankfurt am Main, Germany); Member of the
Deutsche Bank AG Supervisory Board of RWE; Member of the Supervisory
Frankfurt am Main Board of Frankfurter Hypothekenbank Centralboden AG
Germany (Chairman) (bank; Germany); Member of the Supervisory
Board of Messer Griesheim GmbH (Germany); Member of the
Supervisory Board of Philipp Holzmann AG (Chairman)
(construction; Germany); Member of the Supervisory Board
of Rutgers AG (Germany); Member of the Supervisory Board
of Steigenberger Hotels AG (hotels; Germany); Member of
the Supervisory Board of Thyssen AG (Germany).
Diethart Breipohl Member of the Board of Management of Allianz AG (insur-
Allianz AG ance; Allianz AG Koniginstrasse 28 80802 Munich Germany)
Koniginstrasse 28 Member of the Supervisory Board of RWE; Member of the
80802 Munich Supervisory Board of Allianz
Germany Unternehmensbeteiligungsgesellschaft AG (Germany);
Member of the Supervisory Board of Beiersdorf AG
(Germany); Member of the Supervisory Board of BHF-Bank
AG (bank; Germany); Member of the Supervisory Board of
Continental AG ( Germany); Member of the Supervisory
Board of Karstadt AG (Germany); Member of the
Supervisory Board of Metallgesellschaft AG (Germany).
Friedhelm Gieske 71 Member of the Supervisory Board of RWE and Former
Chairman of the Board of Management of RWE (retired
December 1994); Member of the Supervisory Board of
Karstadt AG (Germany); Member of the Supervisory Board
of MAN AG (Germany); Member of the Supervisory Board of
National-Bank AG (bank; Germany); Member of the
Supervisory Board of Thyssen AG (Germany).
Erwin Hahn 57 Electrician since April; Member of the Supervisory Board
Hochtief AG of RWE.
Cologne Branch
Neusserstrasse 155
50733 Cologne
Johann Heiss Electrical Fitter (electrician); Member of the
Supervisory Board of RWE; Member of the Supervisory
Board of Starkstrom-Anlagen-Gesellschaft mbH (Frankfurt
am Main, Germany).
Rudolf Kersting 61 Senior Director of District Administration; Member of
Nassaue, Allee 15-23 the Supervisory Board of RWE; Member of the Supervisory
47533 Kleve Board of GVV-Kommunal Versicherung VvaG (Chairman)
Germany (insurance; Germany); Member of the Supervisory Board of
GVV-Privatversicherung AG (Chairman) (insurance;
Germany).
Berthold Krell 55 Works council chairman at RWE Energie AG,
RWE Energie AG Friedrichstrasse 60, 57072 Siegen, Germany, since 1999;
Friedrichstrasse 60 Member of the works council between 1994 and 1999;
57072 Siegen Member of the Supervisory Board of RWE.
Germany
</TABLE>
I-12
<PAGE> 57
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OR EMPLOYMENT
NAME AGE AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- --- --------------------------------
<S> <C> <C>
Walter Mende 55 Mayor, Leverkusen; Member of the Supervisory Board of
Rathaus (city hall) RWE; Member of the Supervisory Board of Kraftverkehr
51373 Leverkusen Wupper-Sieg AG (Germany); Member of the Supervisory
Germany Board of RW Holding AG (Chairman)(Germany); Director of
Wirtschaftsforderungsgesellschaft mbH Leverkusen
(Chairman) (Leverkusen, Germany).
Wilhelm Nowack 48 Managing Director of Buro Nowack, Gesellschaft fur
Buro Nowack Projektsplanung mbH (project development; Am
Waldthausenpark 445127 Essen Germany) since 1994; Member
of State Parliament, North Rhine-Westphalia; Member of
the City Council, Essen; Member of the Supervisory Board
of RWE; Member of the Supervisory Board of Messe Essen
GmbH (Essen, Germany); Director of Essener
Entsorgungsbetriebe GmbH (Chairman) (waste management;
Essen, Germany); Sparkasse; Essen (bank; Essen,
Germany); VEKS-Verwertung und Entsorgung Karnap-Stadte
Holding GmbH (Chairman) (waste management; Germany).
Bernhard von Rothkirch 48 Chief Engineer, Head of Mine Planning and Surveying
Rheinbraun AG Department, Inden Opencast Mine of Rheinbraun AG (mining
Tagebau Inden and raw materials; Stuttgenweg 2, 50935 Cologne,
Durwisserstrasse Germany) since November 1980; Member of the Supervisory
52249 Eschweiler Board of RWE.
Klaus Schmid Head of Department, Executive Board of IGM; Member of
the Supervisory Board of Thyssen AG (Germany); Member of
the Supervisory Board of RWE.
Manfred Schneider 60 Chairman of the Board of Management of Bayer AG (51368
Bayer AG Leverkusen, Germany) since 1992; Member of the
51368 Leverkusen Supervisory Board of RWE; Member of the Supervisory
Germany Board of Allianz AG (insurance; Koniginstrasse 28, 80802
Munich, Germany); Member of the Supervisory Board of
Daimler-Benz AG; Member of the Supervisory Board of
METRO AG (Germany).
Ernst-W. Stuckert 60 Chairman of the Works Council of RWE-DEA AG fur
RWE-DEA AG fur Mineraloel Mineraloel und Chemie (Hamburg, Germany); Member of the
und Chemie Supervisory Board of RWE; Commercial Staff Member at
Uberseering 40 RWE-DEA AG fur Mineraloel und Chemie since 1974.
22297 Hamburg
Germany
Klaus-Dieter Sudhofer 55 Deputy Chairman of IG Bergbau, Chemie und Energie IG
IG BCE BCE, Konigsworther Platz 6, 30167 Hanover, Germany)
Konigsworther Platz 6 since 1997; Member of the Supervisory Board of BHW
30167 Hanover Holding, (Germany); Member of the Supervisory Board of
Germany Rheinbraun AG (mining and raw materials; Stuttgenweg 2,
50935 Cologne, Germany); Member of the Supervisory Board
of RAG AG (Rellinghauserstrasse 1, 45128 Essen,
Germany); Member of the Supervisory Board of Ruhrkohle
Immobilien AG (Germany); Member of the Supervisory Board
of RWE-DEA AG fur Mineraloel und Chemie Hamburg,
Germany); Member of the Supervisory Board of RWE;
Director of GSG Wohnungsbau Braunkohle GmbH (Germany).
</TABLE>
I-13
<PAGE> 58
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OR EMPLOYMENT
NAME AGE AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- --- --------------------------------
<S> <C> <C>
Alfons Friedrich Titzrath 67 Chairman of the Supervisory Board of Dresdner Bank AG
Dresdner Bank AG (bank; 60301 Frankfurt am Main, Germany) since 1997;
60301 Frankfurt am Member of the Board of Management of Dresdner Bank AG
Main between 1985 and January; Member of the Supervisory
Germany Board of Dresdner Bank AG between 1996 and 1997; Member
of the Supervisory Board of RWE; Member of the
Supervisory Board of Allianz AG (insurance;
Koniginstrasse 28, 80802 Munich, Germany); Member of the
Supervisory Board of Hoechst AG (chemicals; Frankfurt am
Main, Germany); Member of the Supervisory Board of IVG
Holding AG (Germany); Member of the Supervisory Board of
VAW aluminium AG (Germany).
Erwin Winkler 41 Power Plant Electronics Engineer at Rheinbraun AG
Rheinbraun AG (mining and raw materials; Stuttgenweg 2, 50935 Cologne,
Stuttgenweg 2 Germany) since 1973; Member of the Supervisory Board of
50935 Cologne RWE.
Germany
Ralf Zimmermann 43 Member of the Board of OTV (Union of Public Services,
Gewerkschaft OTV Transportation and Traffic) since 1988; Member of the
(Union of Public Supervisory Board of RWE.
Services, Transportation
and Traffic) Theodor-Heuss-Strasse 2
70174 Stuttgart
Germany
</TABLE>
C. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER
The following table sets forth the name, principal business address,
present principal occupation or employment, five-year employment history and
certain other information concerning the directors and executive officers of
Purchaser. Unless otherwise indicated, the business address of each individual
listed below is Purchaser, Opernplatz 2, 45128 Essen, Germany, and the position
is with Purchaser. Each person listed is citizen of Germany.
<TABLE>
<S> <C> <C>
Bernhard Burklin 43 Vice President, Treasurer and Secretary of Purchaser
(Dr.-Ing.) since 1999; Managing Director of Parent since 1994;
Vice President of HOCHTIEF International since 1999;
Member of the Supervisory Board of HOCHTIEF Polska
(construction; Warsaw, Poland) since 1997.
Hans-Wolfgang Koch 58 President and Chairman of Purchaser since 1999; See
also information provided under "A. Directors and
Executive Officers of Parent".
</TABLE>
I-14
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
THE TURNER CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED AUGUST 20, 1999
OF
BETA ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
HOCHTIEF AG
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, SEPTEMBER 17, 1999, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
<TABLE>
<S> <C> <C>
By Overnight Courier: By Mail: By Hand:
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
Corporate Actions Corporate Actions Corporate Actions
Suite 4680 Suite 4660 c/o Securities Transfer and
14 Wall Street, 8th Floor P.O. Box 2569 Reporting Services, Inc.
New York, NY 10005 Jersey City, NJ 07303-2569 100 William Street, Galleria
New York, NY 10038
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- -----------------------------------------------------------------------------------------------------------------------------------
SHARE TOTAL NUMBER OF NUMBER OF
CERTIFICATE SHARES EVIDENCED BY SHARES
NUMBER(S)* SHARE CERTIFICATE(S)* TENDERED**
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
TOTAL SHARES
- -----------------------------------------------------------------------------------------------------------------------------------
* Need not be completed by stockholders delivering Shares by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced by each Share Certificate delivered to the
Depositary are being tendered hereby. See Instruction 4.
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 2
This Letter of Transmittal is to be completed by stockholders of The Turner
Corporation either if certificates evidencing Shares (as defined below) are to
be forwarded herewith or if delivery of Shares is to be made by book-entry
transfer to an account maintained by the Depositary at the Book-Entry Transfer
Facility (as defined in and pursuant to the procedures set forth in Section 3 of
the Offer to Purchase). DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY
DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Stockholders whose certificates evidencing Shares ("Share Certificates")
are not immediately available or who cannot deliver their Share Certificates and
all other documents required hereby to the Depositary prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase) or who cannot complete
the procedure for delivery by book-entry transfer on a timely basis and who wish
to tender their Shares must do so pursuant to the guaranteed delivery procedure
described in Section 3 of the Offer to Purchase. See Instruction 2.
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE
FOLLOWING:
Name of Tendering Institution:
- --------------------------------------------------------------------------------
Account Number:
- --------------------------------------------------------------------------------
Transaction Code Number:
- --------------------------------------------------------------------------------
[ ] CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s)
- --------------------------------------------------------------------------------
Window Ticket No. (if any)
- --------------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
- ---------------------------------------------------------------
Name of Institution which Guaranteed Delivery
- --------------------------------------------------------------------
If delivery is by book-entry transfer, give the following information:
Account Number:
- --------------------------------------------------------------------------------
Transaction Code Number:
- --------------------------------------------------------------------------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE,
WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE
READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Beta Acquisition Corp., a Delaware
corporation ("Purchaser") and an indirect wholly owned subsidiary of HOCHTIEF
AG, a corporation organized under the laws of Germany, the above-described
shares of common stock, par value $1.00 per share ("Common Stock"), of The
Turner Corporation, a Delaware corporation (the "Company") (all shares of such
Common Stock from time to time outstanding being collectively referred to as the
"Shares"), including the associated rights (the "Rights") issued pursuant to the
Rights Agreement, dated as of September 21, 1998, between the Company and First
Chicago Trust Company of New York, pursuant to Purchaser's offer to purchase all
Shares at $28.625 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated August 20,
1999 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in
this Letter of Transmittal (which, together with the Offer to Purchase and any
amendments or supplements hereto or thereto, collectively constitute the
"Offer").
The undersigned understands that Purchaser reserves the right to transfer
or assign, in whole or from time to time in part, to one or more of its
affiliates, the right to purchase all or any portion of the Shares tendered
pursuant to the Offer.
Upon the terms and subject to the conditions of the Offer (and if the Offer
is extended or amended, the terms of any such extension or amendment), subject
to, and effective upon, acceptance for payment of the Shares tendered herewith,
in accordance with the terms of the Offer, the undersigned hereby sells, assigns
and transfers to, or upon the order of, Purchaser all right, title and interest
in and to all the Shares that are being tendered hereby and all dividends,
distributions (including, without limitation, distributions of additional
Shares) and rights declared, paid or distributed in respect of such Shares on or
after August 16, 1999 (collectively, "Distributions"), and irrevocably appoints
the Depositary the true and lawful agent and attorney-in-fact of the undersigned
with respect to such Shares (and all Distributions), with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (i) deliver Share Certificates evidencing such
Shares (and all Distributions), or transfer ownership of such Shares (and all
Distributions) on the account books maintained by the Book-Entry Transfer
Facility, together, in either case, with all accompanying evidences of transfer
and authenticity, to or upon the order of Purchaser, (ii) present such Shares
(and all Distributions) for transfer on the books of the Company and (iii)
receive all benefits and otherwise exercise all rights of beneficial ownership
of such Shares (and all Distributions), all in accordance with the terms of the
Offer.
<PAGE> 4
By executing this Letter of Transmittal, the undersigned hereby irrevocably
appoints Messrs. Hans-Peter Keitel, Hans-Wolfgang Koch and Bernhard Burklin and
each of them, as the attorneys and proxies of the undersigned, each with full
power of substitution, to vote in such manner as each such attorney and proxy or
his substitute shall, in his sole discretion, deem proper and otherwise act (by
written consent or otherwise) with respect to all the Shares tendered hereby
which have been accepted for payment by Purchaser prior to the time of such vote
or other action and all Shares and other securities issued in Distributions in
respect of such Shares, which the undersigned is entitled to vote at any meeting
of stockholders of the Company (whether annual or special and whether or not an
adjourned or postponed meeting) or consent in lieu of any such meeting or
otherwise. This proxy and power of attorney is coupled with an interest in the
Shares tendered hereby, is irrevocable and is granted in consideration of, and
is effective upon, the acceptance for payment of such Shares by Purchaser in
accordance with other terms of the Offer. Such acceptance for payment shall
revoke all other proxies and powers of attorney granted by the undersigned at
any time with respect to such Shares (and all Shares and other securities issued
in Distributions in respect of such Shares), and no subsequent proxies, powers
of attorney, consents or revocations may be given by the undersigned with
respect thereto (and if given will not be deemed effective). The undersigned
understands that, in order for Shares or Distributions to be deemed validly
tendered, immediately upon Purchaser's acceptance of such Shares for payment,
Purchaser must be able to exercise full voting and other rights with respect to
such Shares (and any and all Distributions), including, without limitation,
voting at any meeting of the Company's stockholders then scheduled.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and all Distributions, that when such Shares are accepted for
payment by Purchaser, Purchaser will acquire good, marketable and unencumbered
title thereto and to all Distributions, free and clear of all liens,
restriction, charges and encumbrances, and that none of such Shares and
Distributions will be subject to any adverse claim. The undersigned, upon
request, shall execute and deliver all additional documents deemed by the
Depositary or Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby and all Distributions. In
addition, the undersigned shall remit and transfer promptly to the Depositary
for the account of Purchaser all Distributions in respect of the Shares tendered
hereby, accompanied by appropriate documentation of transfer, and pending such
remittance and transfer or appropriate assurance thereof, Purchaser shall be
entitled to all rights and privileges as owner of each such Distribution and may
withhold the entire purchase price of the Shares tendered hereby, or deduct from
such purchase price, the amount or value of such Distribution as determined by
Purchaser in its sole discretion.
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding upon
the heirs, personal representatives, successors and assigns of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned understands that the valid tender of Shares pursuant to any
one of the procedures described in Section 3 of the Offer to Purchase and in the
Instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the Offer. Purchaser's acceptance of such Shares for payment
will constitute a binding agreement between the undersigned and Purchaser upon
the terms and subject to the conditions of the Offer (and if the Offer is
extended or amended, the terms or conditions of any such extension or
amendment).
<PAGE> 5
Unless otherwise indicated below in the box entitled "Special Payment
Instructions", please issue the check for the purchase price of all Shares
purchased and return all Share Certificates evidencing Shares not tendered or
not accepted for payment in the name(s) of the registered holder(s) appearing
under "Description of Shares Tendered" on the reverse hereof. Similarly, unless
otherwise indicated below in the box entitled "Special Delivery Instructions",
please mail the check for the purchase price of all Shares purchased and return
all Share Certificates evidencing Shares not tendered or not accepted for
payment (and accompanying documents, as appropriate) to the address(es) of the
registered holder(s) appearing under "Description of Shares Tendered" on the
reverse hereof. In the event that the boxes entitled "Special Payment
Instructions" and "Special Delivery Instructions" are both completed, please
issue the check for the purchase price of all Shares purchased and return all
Share Certificates evidencing Shares not tendered or not accepted for payment in
the name(s) of, and deliver such check and return such Share Certificates (and
any accompanying documents, as appropriate) to, the person(s) so indicated.
Unless otherwise indicated below in the box entitled "Special Payment
Instructions", please credit any Shares tendered hereby and delivered by
book-entry transfer that are not accepted for payment by crediting the account
at the Book-Entry Transfer Facility designated above. The undersigned recognizes
that Purchaser has no obligation, pursuant to the Special Payment Instructions,
to transfer any Shares from the name of the registered holder(s) thereof if
Purchaser does not accept for payment any of the Shares tendered hereby.
<PAGE> 6
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares and
Share Certificates evidencing Shares not tendered or not purchased are to be
issued in the name of someone other than the undersigned.
Issue Check and Share Certificate(s) to:
Name:
- --------------------------------------------------
(PLEASE PRINT)
Address:
- ------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
(ZIP CODE)
- ------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
Account Number:
- --------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased and Share Certificates evidencing Shares not tendered or not purchased
are to be mailed to someone other than the undersigned, or the undersigned at an
address other than that shown under "Description of Shares Tendered".
Mail Check and Share Certificate(s) to:
Name:
- --------------------------------------------------
(PLEASE PRINT)
- ------------------------------------------------------------
Address:
- ------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
(ZIP CODE)
- ------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
<PAGE> 7
IMPORTANT
STOCKHOLDERS: SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW)
................................................................................
................................................................................
SIGNATURE(S) OF HOLDER(S)
Dated: ............ , 1999
(Must be signed by registered holder(s) exactly as name(s) appear(s) on Share
Certificates or on a security position listing by a person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, please provide the following information and see
Instruction 5.)
Name(s): .......................................................................
PLEASE PRINT
Capacity (full title): .........................................................
Address: .......................................................................
................................................................................
INCLUDE ZIP CODE
Daytime Area Code and Telephone No.: ...........................................
Taxpayer Identification or
Social Security No.: ...........................................................
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY.
FINANCIAL INSTITUTIONS: PLACE MEDALLION
GUARANTEE IN SPACE BELOW
<PAGE> 8
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. All signatures on this Letter 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 promulgated under the Securities
Exchange Act of 1934, as amended (each of the foregoing being an "Eligible
Institution") unless (i) this Letter of Transmittal is signed by the registered
holder(s) of the Shares (which term, for purposes of this document, shall
include any participant in the Book-Entry Transfer Facility whose name appears
on a security position listing as the owner of Shares) tendered hereby and such
holder(s) has (have) completed the box entitled "Special Payment Instructions"
on the reverse hereof or (ii) such Shares are tendered for the account of an
Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Share Certificates. This Letter of
Transmittal is to be used either if Share Certificates are to be forwarded
herewith or if tenders are to be made pursuant to the procedures for tenders by
book-entry transfer pursuant to the procedure set forth in Section 3 of the
Offer to Purchase. Share Certificates evidencing all physically tendered Shares,
or a confirmation of a book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility of all Shares delivered by book-entry transfer as
well as a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile thereof) and any other documents required by this
Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth below prior to the Expiration Date (as defined in Section 1
of the Offer to Purchase). If Share Certificates are forwarded to the Depositary
in multiple deliveries, a properly completed and duly executed Letter of
Transmittal must accompany each such delivery. Stockholders whose Share
Certificates are not immediately available, who cannot deliver their Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date or who cannot complete the procedure for delivery by book-entry
transfer on a timely basis may tender their Shares pursuant to the guaranteed
delivery procedure described in Section 3 of the Offer to Purchase. Pursuant to
such procedure: (i) such tender must be made by or through an Eligible
Institution; (ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by Purchaser, must be
received by the Depositary prior to the Expiration Date; and (iii) the Share
Certificates evidencing all physically delivered Shares in proper form for
transfer by delivery, or a confirmation of a book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility of all Shares delivered
by book-entry transfer, in each case together with a 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 (as defined in Section 3 of the Offer to Purchase)) and any
other documents required by this Letter of Transmittal, must be received by the
Depositary within three New York Stock Exchange, Inc. ("NYSE") trading days
after the date of execution of such Notice of Guaranteed Delivery, all as
described in Section 3 of the Offer to Purchase.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, 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.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. By execution of this Letter of Transmittal
(or a manually signed facsimile hereof), all tendering stockholders waive any
right to receive any notice of the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided herein under "Description of
Shares Tendered" on the reverse hereof is inadequate, the Share Certificate
numbers, the number of Shares evidenced by such Share Certificates and the
number of Shares tendered should be listed on a separate signed schedule and
attached hereto.
4. Partial Tenders (not applicable to stockholders who tender by book-entry
transfer). If fewer than all the Shares evidenced by any Share Certificate
delivered to the Depositary herewith are to be tendered hereby, fill in the
number of Shares that are to be tendered in the box entitled "Number of Shares
Tendered" on the reverse hereof. In such cases, new Share Certificate(s)
evidencing the remainder of the Shares that were evidenced by the Share
Certificates delivered to the Depositary herewith will be sent to the person(s)
signing this Letter of Transmittal, unless otherwise provided in the box
entitled "Special Delivery Instructions" on the reverse hereof, as soon as
practicable after the Expiration Date or the termination of the Offer, all
Shares evidenced by Share Certificates delivered to the Depositary will be
deemed to have been tendered unless otherwise indicated.
<PAGE> 9
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the Share Certificates evidencing such Shares without alteration,
enlargement or any other change whatsoever.
If any Share tendered hereby is held of record by two or more persons, all
such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names, it
will be necessary to complete, sign and submit as many separate Letters of
Transmittal as there are different registrations of such Shares.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Share Certificates or separate stock
powers are required, unless payment is to be made to, or Share Certificates
evidencing Shares not tendered or not accepted for payment are to be issued in
the name of, a person other than the registered holder(s). If this Letter of
Transmittal is signed by a person other than the registered holder(s) of the
Share Certificate(s) evidencing the Shares tendered, the Share Certificate(s)
tendered hereby must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name(s) of the registered holder(s) appear(s)
on such Share Certificate(s). Signatures on such Share Certificate(s) and stock
powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Purchaser of such person's authority so to act must be
submitted.
6. Stock Transfer Taxes. Except as otherwise provided in this Instruction
6, Purchaser will pay or cause to be paid all stock transfer taxes with respect
to the sale and transfer of any Shares to it, or to its order, pursuant to the
Offer. If, however, payment of the purchase price of any Shares purchased is to
be made to, or Share Certificate(s) evidencing Shares not tendered or not
accepted for payment are to be issued in the name of, any person other than the
registered holder(s) or if tendered certificates are registered in the name of
any person other than the person(s) signing the Letter of Transmittal, the
amount of any stock transfer taxes (whether imposed on the registered holder(s),
or such other person, or otherwise) payable on account of the transfer to such
other person will be deducted from the purchase price of such Shares purchased,
unless evidence satisfactory to Purchaser of the payment of such taxes, or
exemption therefrom, is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Share Certificates evidencing the
Shares tendered hereby.
7. Special Payment and Delivery Instructions. If a check for the purchase
price of any Shares tendered hereby is to be issued in the name of, and/or Share
Certificate(s) evidencing Shares not tendered or not accepted for payment are to
be issued in the name of and/or returned to, a person other than the person(s)
signing this Letter of Transmittal or if such check or any such Share
Certificate is to be sent to a person other than the signor of this Letter of
Transmittal or to the person(s) signing this Letter of Transmittal but at an
address other than that shown in the box entitled "Description of Shares
Tendered" on the reverse hereof, the appropriate boxes herein must be completed.
8. Questions and Requests for Assistance or Additional Copies. Questions
and requests for assistance may be directed to the Information Agent at its
address or telephone numbers set forth on the reverse hereof. Additional copies
of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed
Delivery and the Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9 may be obtained from the Information Agent.
<PAGE> 10
9. Substitute Form W-9. Unless an exemption from backup withholding and
information reporting requirements is otherwise established with the Depositary,
each tendering stockholder (or other payee) is required to provide the
Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" on the
reverse hereof, and to certify, under penalty of perjury, that such number is
correct and that such stockholder (or other payee) is not subject to backup
withholding of federal income tax. If a tendering stockholder (or other payee)
has been notified by the Internal Revenue Service that such stockholder is
subject to backup withholding, such stockholder must cross out item (2) of the
Certification box of the Substitute Form W-9, unless such stockholder has since
been notified by the Internal Revenue Service that such stockholder (or other
payee) is no longer subject to backup withholding. Failure to provide the
information on the Substitute Form W-9 may subject the tendering stockholder (or
other payee) to 31% federal income tax withholding on the payment of the
purchase price of all Shares purchased from such stockholder (or other payee).
If the tendering stockholder has not been issued a TIN and has applied for one
or intends to apply for one in the near future, such stockholder (or other
payee) should write "Applied For" in the space provided for the TIN in Part I of
the Substitute Form W-9, and sign and date the Substitute Form W-9. If "Applied
For" is written in Part I and the Depositary is not provided with a TIN within
60 days, the Depositary will withhold 31% on all payments of the purchase price
to such stockholder (or other payee) until a TIN is provided to the Depositary.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE
HEREOF), 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 SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL
OTHER REQUIRED DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF
GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION
DATE (AS DEFINED IN THE OFFER TO PURCHASE).
IMPORTANT TAX INFORMATION
Under the federal income tax law, a stockholder whose tendered Shares are
accepted for payment is generally required by law to provide the Depositary (as
payer) with such stockholder's correct TIN on Substitute Form W-9 provided
herewith. If such stockholder is an individual, the TIN generally is such
stockholder's social security number. If the Depositary is not provided with the
correct TIN, the stockholder may be subject to a $50 penalty imposed by the
Internal Revenue Service and payments that are made to such stockholder with
respect to Shares purchased pursuant to the Offer may be subject to backup
withholding of 31%. In addition, if a stockholder makes a false statement that
results in no imposition of backup withholding, and there was no reasonable
basis for making such statement, a $500 penalty may also be imposed by the
Internal Revenue Service.
Certain stockholders (including, among others, corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit a statement (Internal Revenue Service
Form W-8), signed under penalties of perjury, attesting to such individual's
exempt status. Forms of such statements can be obtained from the Depositary. See
the enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for additional instructions. A stockholder should consult
his or her tax advisor as to such stockholder's qualification for exemption from
backup withholding and the procedure for obtaining such exemption.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the stockholder. Backup withholding is not an additional
tax. Rather, the federal income tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained provided that the
required information is furnished to the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of such stockholder's correct TIN by
completing the form below certifying that (a) the TIN provided on Substitute
Form W-9 is correct (or that such stockholder is awaiting a TIN), and (b)(i)
such stockholder has not been notified by the Internal Revenue Service that he
is subject to backup withholding as a result of a failure to report all interest
or dividends or (ii) the Internal Revenue Service has notified such stockholder
that such stockholder is no longer subject to backup withholding.
<PAGE> 11
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record holder of the
Shares tendered hereby. If the Shares are in more than one name or are not in
the name of the actual owner, consult the enclosed Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9 for additional guidance
on which number to report. If the tendering stockholder has not been issued a
TIN and has applied for a number or intends to apply for a number in the near
future, the stockholder should write "Applied For" in the space provided for the
TIN in Part I, and sign and date the Substitute Form W-9. If "Applied For" is
written in Part I and the Depositary is not provided with a TIN by the time of
payment, the Depositary will withhold 31% of all payments of the purchase price
to such stockholder until a TIN is provided to the Depositary.
<PAGE> 12
<TABLE>
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
- ---------------------------------------------------------------------------------------------
PART I -- Taxpayer Identification Num-
ber -- For all accounts, enter your taxpayer
SUBSTITUTE identification number in the box at right.
FORM W-9 (For most individuals, this is your social
DEPARTMENT OF THE security number. If you do not have a number,
TREASURY see Obtaining a Number in the enclosed
INTERNAL REVENUE SERVICE Guidelines.) Certify by signing and dating
below. Note: If the account is in more than
PAYER'S REQUEST FOR TAXPAYER one name, see the chart in the enclosed
IDENTIFICATION NUMBER (TIN) Guidelines to determine which number to give
the payer.
- ---------------------------------------------------------------------------------------------
------------------------------------------
Social security number
or
------------------------------------------
Employer Identification Number
(If awaiting TIN write
"Applied For")
- ---------------------------------------------------------------------------------------------
PART II -- For Payees Exempt from Backup
Withholding, see the enclosed Guidelines and
complete as instructed therein.
- ---------------------------------------------------------------------------------------------
CERTIFICATION -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am
waiting for a number to be issued to me), and
(2) I am not subject to backup withholding because: (a) I am exempt from backup
withholding, or (b) I have not been notified by the Internal Revenue Service (the
"IRS") that I am subject to back-up withholding as a result of failure to report all
interest or dividends, or (c) the IRS has notified me that I am no longer subject to
backup withholding.
CERTIFICATE INSTRUCTIONS -- You must cross out item (2) above if you have been notified by
the IRS that you are currently subject to backup withholding because of underreporting
interest or dividends on your tax return. However, if after being notified by the IRS that
you were subject to backup withholding you received another notification from the IRS that
you are no longer subject to backup withholding, do not cross out item (2). (Also see
instructions in the enclosed Guidelines.)
- ---------------------------------------------------------------------------------------------
SIGNATURE DATE ________________________
- ---------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A $50 PENALTY
IMPOSED BY THE INTERNAL REVENUE SERVICE AND BACKUP WITHHOLDING OF 31% OF
ANY PAYMENTS MADE TO YOU PURSUANT TO THIS OFFER. PLEASE REVIEW THE
ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
NOTE: YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING A TAXPAYER
IDENTIFICATION NUMBER
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER HAS
NOT BEEN ISSUED TO ME, AND EITHER (1) I HAVE MAILED OR DELIVERED AN APPLICATION
TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE INTERNAL REVENUE
SERVICE CENTER OR SOCIAL SECURITY ADMINISTRATION OFFICE OR (2) I INTEND TO MAIL
OR DELIVER AN APPLICATION IN THE NEAR FUTURE. I UNDERSTAND THAT IF I DO NOT
PROVIDE A TAXPAYER IDENTIFICATION NUMBER BY THE TIME OF PAYMENT, 31% OF ALL
REPORTABLE CASH PAYMENTS MADE TO ME THEREAFTER WILL BE WITHHELD UNTIL I PROVIDE
A TAXPAYER IDENTIFICATION NUMBER.
SIGNATURE: DATE: ___________________
<PAGE> 13
Facsimilies of the Letter of Transmittal, properly completed and duly
signed, 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 such stockholder's broker, dealer, commercial bank, trust company
or other nominee to the Depositary at one of its addresses or to the facsimile
number set forth below.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Overnight Courier: By Mail: By Hand:
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
Corporate Actions Corporate Actions Corporate Actions
Suite 4680 Suite 4660 c/o Securities Transfer and
14 Wall Street, 8th Floor P.O. Box 2569 Reporting Services Inc.
New York, NY 10005 Jersey City, NJ 07303-2569 100 William Street, Galleria
New York, NY 10038
</TABLE>
------------------------------------
Questions or requests for assistance may be directed to the Information Agent at
its address and telephone numbers listed below. Additional copies of the Offer
to Purchase, this 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:
[Innisfree Logo]
501 Madison Avenue, 20th Floor
New York, New York 10022
Banks and Brokers Call Collect: (212) 750-5833
All Others Call Toll Free: (888) 750-5834
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER SHARES OF
SERIES C 8 1/2% CONVERTIBLE PREFERENCE STOCK
AND
SERIES D 8 1/2% CONVERTIBLE PREFERENCE STOCK
OF
THE TURNER CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED AUGUST 20, 1999
OF
BETA ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
HOCHTIEF AG
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, SEPTEMBER 17, 1999, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
<TABLE>
<S> <C> <C>
By Overnight Courier: By Mail: By Hand:
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
Corporate Actions Corporate Actions Corporate Actions
Suite 4680 Suite 4660 c/o Securities Transfer and
14 Wall Street, 8th Floor P.O. Box 2569 Reporting Services, Inc.
New York, NY 10005 Jersey City, NJ 07303-2569 100 William Street, Galleria
New York, NY 10038
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- -----------------------------------------------------------------------------------------------------------------------------------
SHARE TOTAL NUMBER OF NUMBER AND SERIES
CERTIFICATE SHARES EVIDENCED BY OF SHARES
NUMBER(S)* SHARE CERTIFICATE(S)* TENDERED**
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
TOTAL SHARES
- -----------------------------------------------------------------------------------------------------------------------------------
* Need not be completed by stockholders delivering Shares by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced by each Share Certificate delivered to the
Depositary are being tendered hereby. See Instruction 4.
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 2
This Letter of Transmittal is to be completed by stockholders of The Turner
Corporation either if certificates evidencing Shares (as defined below) are to
be forwarded herewith or if delivery of Shares is to be made by book-entry
transfer to an account maintained by the Depositary at the Book-Entry Transfer
Facility (as defined in and pursuant to the procedures set forth in Section 3 of
the Offer to Purchase). DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY
DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Stockholders whose certificates evidencing Shares ("Share Certificates")
are not immediately available or who cannot deliver their Share Certificates and
all other documents required hereby to the Depositary prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase) or who cannot complete
the procedure for delivery by book-entry transfer on a timely basis and who wish
to tender their Shares must do so pursuant to the guaranteed delivery procedure
described in Section 3 of the Offer to Purchase. See Instruction 2.
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE
FOLLOWING:
Name of Tendering Institution:
- --------------------------------------------------------------------------------
Account Number:
- --------------------------------------------------------------------------------
Transaction Code Number:
- --------------------------------------------------------------------------------
[ ] CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s)
- --------------------------------------------------------------------------------
Window Ticket No. (if any)
- --------------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
- ---------------------------------------------------------------
Name of Institution which Guaranteed Delivery
- --------------------------------------------------------------------
If delivery is by book-entry transfer, give the following information:
Account Number:
- --------------------------------------------------------------------------------
Transaction Code Number:
- --------------------------------------------------------------------------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE,
WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE
READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Beta Acquisition Corp., a Delaware
corporation ("Purchaser") and an indirect wholly owned subsidiary of HOCHTIEF
AG, a corporation organized under the laws of Germany, the above-described
shares of Series C 8 1/2% Convertible Preference Stock, par value $1.00 per
share (the "Series C Preferred Stock"), of The Turner Corporation, a Delaware
corporation (the "Company") and shares of Series D 8 1/2% Convertible Preference
Stock, par value $1.00 per share, of the Company (the "Series D Preferred Stock"
and, together with the Series C Preferred Stock, the "Shares"), pursuant to
Purchaser's offer to purchase all shares of Series C Preferred Stock at a price
of $4,770.8333 per share of Series C Preferred Stock and all shares of Series D
Preferred Stock at a price of $4,293.75 per share of Series D Preferred Stock,
in each case, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated August 20, 1999 (the "Offer
to Purchase"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which, together with the Offer to Purchase and any amendments or
supplements hereto or thereto, collectively constitute the "Offer").
The price per share of Series C Preferred Stock and per share of Series D
Preferred Stock was determined by multiplying $28.625, the offer price per share
of Common Stock, par value $1.00 per share, of the Company (the "Company Common
Stock"), by the number of shares of Company Common Stock into which each share
of Series C Preferred Stock and each share of Series D Preferred Stock is
convertible (the "Preferred Stock Conversion Ratio") under the applicable
certificate of designation of such share of Series C Preferred Stock or share of
Series D Preferred Stock. Currently, each share of Series C Preferred Stock is
convertible into 166 2/3 shares of Company Common Stock and each share of Series
D Preferred Stock is convertible into 150 shares of Company Common Stock. In the
event that the Company takes any action that causes the Preferred Stock
Conversion Ratio to change, Purchaser may (subject to the provisions of the
Merger Agreement) make such adjustments to the purchase price for each share of
Series C Preferred Stock or each share of Series D Preferred Stock as it deems
appropriate to reflect such change in the Preferred Stock Conversion Ratio.
The undersigned understands that Purchaser reserves the right to transfer
or assign, in whole or from time to time in part, to one or more of its
affiliates, the right to purchase all or any portion of the Shares tendered
pursuant to the Offer.
Upon the terms and subject to the conditions of the Offer (and if the Offer
is extended or amended, the terms of any such extension or amendment), subject
to, and effective upon, acceptance for payment of the Shares tendered herewith,
in accordance with the terms of the Offer, the undersigned hereby sells, assigns
and transfers to, or upon the order of, Purchaser all right, title and interest
in and to all the Shares that are being tendered hereby and all dividends,
distributions (including, without limitation, distributions of additional
Shares) and rights declared, paid or distributed in respect of such Shares on or
after August 16, 1999 (collectively, "Distributions"), and irrevocably appoints
the Depositary the true and lawful agent and attorney-in-fact of the undersigned
with respect to such Shares (and all Distributions), with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (i) deliver Share Certificates evidencing such
Shares (and all Distributions), or transfer ownership of such Shares (and all
Distributions) on the account books maintained by the Book-Entry Transfer
Facility, together, in either case, with all accompanying evidences of transfer
and authenticity, to or upon the order of Purchaser, (ii) present such Shares
(and all Distributions) for transfer on the books of the Company and (iii)
receive all benefits and otherwise exercise all rights of beneficial ownership
of such Shares (and all Distributions), all in accordance with the terms of the
Offer.
<PAGE> 4
By executing this Letter of Transmittal, the undersigned hereby irrevocably
appoints Messrs. Hans-Peter Keitel, Hans-Wolfgang Koch and Bernhard Burklin and
each of them, as the attorneys and proxies of the undersigned, each with full
power of substitution, to vote in such manner as each such attorney and proxy or
his substitute shall, in his sole discretion, deem proper and otherwise act (by
written consent or otherwise) with respect to all the Shares tendered hereby
which have been accepted for payment by Purchaser prior to the time of such vote
or other action and all Shares and other securities issued in Distributions in
respect of such Shares, which the undersigned is entitled to vote at any meeting
of stockholders of the Company (whether annual or special and whether or not an
adjourned or postponed meeting) or consent in lieu of any such meeting or
otherwise. This proxy and power of attorney is coupled with an interest in the
Shares tendered hereby, is irrevocable and is granted in consideration of, and
is effective upon, the acceptance for payment of such Shares by Purchaser in
accordance with other terms of the Offer. Such acceptance for payment shall
revoke all other proxies and powers of attorney granted by the undersigned at
any time with respect to such Shares (and all Shares and other securities issued
in Distributions in respect of such Shares), and no subsequent proxies, powers
of attorney, consents or revocations may be given by the undersigned with
respect thereto (and if given will not be deemed effective). The undersigned
understands that, in order for Shares or Distributions to be deemed validly
tendered, immediately upon Purchaser's acceptance of such Shares for payment,
Purchaser must be able to exercise full voting and other rights with respect to
such Shares (and any and all Distributions), including, without limitation,
voting at any meeting of the Company's stockholders then scheduled.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and all Distributions, that when such Shares are accepted for
payment by Purchaser, Purchaser will acquire good, marketable and unencumbered
title thereto and to all Distributions, free and clear of all liens,
restriction, charges and encumbrances, and that none of such Shares and
Distributions will be subject to any adverse claim. The undersigned, upon
request, shall execute and deliver all additional documents deemed by the
Depositary or Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby and all Distributions. In
addition, the undersigned shall remit and transfer promptly to the Depositary
for the account of Purchaser all Distributions in respect of the Shares tendered
hereby, accompanied by appropriate documentation of transfer, and pending such
remittance and transfer or appropriate assurance thereof, Purchaser shall be
entitled to all rights and privileges as owner of each such Distribution and may
withhold the entire purchase price of the Shares tendered hereby, or deduct from
such purchase price, the amount or value of such Distribution as determined by
Purchaser in its sole discretion.
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding upon
the heirs, personal representatives, successors and assigns of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned understands that the valid tender of Shares pursuant to any
one of the procedures described in Section 3 of the Offer to Purchase and in the
Instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the Offer. Purchaser's acceptance of such Shares for payment
will constitute a binding agreement between the undersigned and Purchaser upon
the terms and subject to the conditions of the Offer (and if the Offer is
extended or amended, the terms or conditions of any such extension or
amendment).
<PAGE> 5
Unless otherwise indicated below in the box entitled "Special Payment
Instructions", please issue the check for the purchase price of all Shares
purchased and return all Share Certificates evidencing Shares not tendered or
not accepted for payment in the name(s) of the registered holder(s) appearing
under "Description of Shares Tendered" on the reverse hereof. Similarly, unless
otherwise indicated below in the box entitled "Special Delivery Instructions",
please mail the check for the purchase price of all Shares purchased and return
all Share Certificates evidencing Shares not tendered or not accepted for
payment (and accompanying documents, as appropriate) to the address(es) of the
registered holder(s) appearing under "Description of Shares Tendered" on the
reverse hereof. In the event that the boxes entitled "Special Payment
Instructions" and "Special Delivery Instructions" are both completed, please
issue the check for the purchase price of all Shares purchased and return all
Share Certificates evidencing Shares not tendered or not accepted for payment in
the name(s) of, and deliver such check and return such Share Certificates (and
any accompanying documents, as appropriate) to, the person(s) so indicated.
Unless otherwise indicated below in the box entitled "Special Payment
Instructions", please credit any Shares tendered hereby and delivered by
book-entry transfer that are not accepted for payment by crediting the account
at the Book-Entry Transfer Facility designated above. The undersigned recognizes
that Purchaser has no obligation, pursuant to the Special Payment Instructions,
to transfer any Shares from the name of the registered holder(s) thereof if
Purchaser does not accept for payment any of the Shares tendered hereby.
<PAGE> 6
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares and
Share Certificates evidencing Shares not tendered or not purchased are to be
issued in the name of someone other than the undersigned.
Issue Check and Share Certificate(s) to:
Name:
- --------------------------------------------------
(PLEASE PRINT)
Address:
- ------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
(ZIP CODE)
- ------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
Account Number:
- --------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased and Share Certificates evidencing Shares not tendered or not purchased
are to be mailed to someone other than the undersigned, or the undersigned at an
address other than that shown under "Description of Shares Tendered".
Mail Check and Share Certificate(s) to:
Name:
- --------------------------------------------------
(PLEASE PRINT)
- ------------------------------------------------------------
Address:
- ------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
(ZIP CODE)
- ------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
<PAGE> 7
IMPORTANT
STOCKHOLDERS: SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW)
................................................................................
................................................................................
SIGNATURE(S) OF HOLDER(S)
Dated: ............ , 1999
(Must be signed by registered holder(s) exactly as name(s) appear(s) on Share
Certificates or on a security position listing by a person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, please provide the following information and see
Instruction 5.)
Name(s): .......................................................................
PLEASE PRINT
Capacity (full title): .........................................................
Address: .......................................................................
................................................................................
INCLUDE ZIP CODE
Daytime Area Code and Telephone No.: ...........................................
Taxpayer Identification or
Social Security No.: ...........................................................
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY.
FINANCIAL INSTITUTIONS: PLACE MEDALLION
GUARANTEE IN SPACE BELOW
<PAGE> 8
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. All signatures on this Letter 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 promulgated under the Securities
Exchange Act of 1934, as amended (each of the foregoing being an "Eligible
Institution") unless (i) this Letter of Transmittal is signed by the registered
holder(s) of the Shares (which term, for purposes of this document, shall
include any participant in the Book-Entry Transfer Facility whose name appears
on a security position listing as the owner of Shares) tendered hereby and such
holder(s) has (have) completed the box entitled "Special Payment Instructions"
on the reverse hereof or (ii) such Shares are tendered for the account of an
Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Share Certificates. This Letter of
Transmittal is to be used either if Share Certificates are to be forwarded
herewith or if tenders are to be made pursuant to the procedures for tenders by
book-entry transfer pursuant to the procedure set forth in Section 3 of the
Offer to Purchase. Share Certificates evidencing all physically tendered Shares,
or a confirmation of a book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility of all Shares delivered by book-entry transfer as
well as a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile thereof) and any other documents required by this
Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth below prior to the Expiration Date (as defined in Section 1
of the Offer to Purchase). If Share Certificates are forwarded to the Depositary
in multiple deliveries, a properly completed and duly executed Letter of
Transmittal must accompany each such delivery. Stockholders whose Share
Certificates are not immediately available, who cannot deliver their Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date or who cannot complete the procedure for delivery by book-entry
transfer on a timely basis may tender their Shares pursuant to the guaranteed
delivery procedure described in Section 3 of the Offer to Purchase. Pursuant to
such procedure: (i) such tender must be made by or through an Eligible
Institution; (ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by Purchaser, must be
received by the Depositary prior to the Expiration Date; and (iii) the Share
Certificates evidencing all physically delivered Shares in proper form for
transfer by delivery, or a confirmation of a book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility of all Shares delivered
by book-entry transfer, in each case together with a 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 (as defined in Section 3 of the Offer to Purchase)) and any
other documents required by this Letter of Transmittal, must be received by the
Depositary within three New York Stock Exchange, Inc. ("NYSE") trading days
after the date of execution of such Notice of Guaranteed Delivery, all as
described in Section 3 of the Offer to Purchase.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, 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.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. By execution of this Letter of Transmittal
(or a manually signed facsimile hereof), all tendering stockholders waive any
right to receive any notice of the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided herein under "Description of
Shares Tendered" on the reverse hereof is inadequate, the Share Certificate
numbers, the number of Shares evidenced by such Share Certificates and the
number of Shares tendered should be listed on a separate signed schedule and
attached hereto.
4. Partial Tenders (not applicable to stockholders who tender by book-entry
transfer). If fewer than all the Shares evidenced by any Share Certificate
delivered to the Depositary herewith are to be tendered hereby, fill in the
number of Shares that are to be tendered in the box entitled "Number of Shares
Tendered" on the reverse hereof. In such cases, new Share Certificate(s)
evidencing the remainder of the Shares that were evidenced by the Share
Certificates delivered to the Depositary herewith will be sent to the person(s)
signing this Letter of Transmittal, unless otherwise provided in the box
entitled "Special Delivery Instructions" on the reverse hereof, as soon as
practicable after the Expiration Date or the termination of the Offer, all
Shares evidenced by Share Certificates delivered to the Depositary will be
deemed to have been tendered unless otherwise indicated.
<PAGE> 9
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the Share Certificates evidencing such Shares without alteration,
enlargement or any other change whatsoever.
If any Share tendered hereby is held of record by two or more persons, all
such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names, it
will be necessary to complete, sign and submit as many separate Letters of
Transmittal as there are different registrations of such Shares.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Share Certificates or separate stock
powers are required, unless payment is to be made to, or Share Certificates
evidencing Shares not tendered or not accepted for payment are to be issued in
the name of, a person other than the registered holder(s). If this Letter of
Transmittal is signed by a person other than the registered holder(s) of the
Share Certificate(s) evidencing the Shares tendered, the Share Certificate(s)
tendered hereby must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name(s) of the registered holder(s) appear(s)
on such Share Certificate(s). Signatures on such Share Certificate(s) and stock
powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Purchaser of such person's authority so to act must be
submitted.
6. Stock Transfer Taxes. Except as otherwise provided in this Instruction
6, Purchaser will pay or cause to be paid all stock transfer taxes with respect
to the sale and transfer of any Shares to it, or to its order, pursuant to the
Offer. If, however, payment of the purchase price of any Shares purchased is to
be made to, or Share Certificate(s) evidencing Shares not tendered or not
accepted for payment are to be issued in the name of, any person other than the
registered holder(s) or if tendered certificates are registered in the name of
any person other than the person(s) signing the Letter of Transmittal, the
amount of any stock transfer taxes (whether imposed on the registered holder(s),
or such other person, or otherwise) payable on account of the transfer to such
other person will be deducted from the purchase price of such Shares purchased,
unless evidence satisfactory to Purchaser of the payment of such taxes, or
exemption therefrom, is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Share Certificates evidencing the
Shares tendered hereby.
7. Special Payment and Delivery Instructions. If a check for the purchase
price of any Shares tendered hereby is to be issued in the name of, and/or Share
Certificate(s) evidencing Shares not tendered or not accepted for payment are to
be issued in the name of and/or returned to, a person other than the person(s)
signing this Letter of Transmittal or if such check or any such Share
Certificate is to be sent to a person other than the signor of this Letter of
Transmittal or to the person(s) signing this Letter of Transmittal but at an
address other than that shown in the box entitled "Description of Shares
Tendered" on the reverse hereof, the appropriate boxes herein must be completed.
8. Questions and Requests for Assistance or Additional Copies. Questions
and requests for assistance may be directed to the Information Agent at its
address or telephone numbers set forth on the reverse hereof. Additional copies
of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed
Delivery and the Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9 may be obtained from the Information Agent.
<PAGE> 10
9. Substitute Form W-9. Unless an exemption from backup withholding and
information reporting requirements is otherwise established with the Depositary,
each tendering stockholder (or other payee) is required to provide the
Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" on the
reverse hereof, and to certify, under penalty of perjury, that such number is
correct and that such stockholder (or other payee) is not subject to backup
withholding of federal income tax. If a tendering stockholder (or other payee)
has been notified by the Internal Revenue Service that such stockholder is
subject to backup withholding, such stockholder must cross out item (2) of the
Certification box of the Substitute Form W-9, unless such stockholder has since
been notified by the Internal Revenue Service that such stockholder (or other
payee) is no longer subject to backup withholding. Failure to provide the
information on the Substitute Form W-9 may subject the tendering stockholder (or
other payee) to 31% federal income tax withholding on the payment of the
purchase price of all Shares purchased from such stockholder (or other payee).
If the tendering stockholder has not been issued a TIN and has applied for one
or intends to apply for one in the near future, such stockholder (or other
payee) should write "Applied For" in the space provided for the TIN in Part I of
the Substitute Form W-9, and sign and date the Substitute Form W-9. If "Applied
For" is written in Part I and the Depositary is not provided with a TIN within
60 days, the Depositary will withhold 31% on all payments of the purchase price
to such stockholder (or other payee) until a TIN is provided to the Depositary.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE
HEREOF), 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 SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL
OTHER REQUIRED DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF
GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION
DATE (AS DEFINED IN THE OFFER TO PURCHASE).
IMPORTANT TAX INFORMATION
Under the federal income tax law, a stockholder whose tendered Shares are
accepted for payment is generally required by law to provide the Depositary (as
payer) with such stockholder's correct TIN on Substitute Form W-9 provided
herewith. If such stockholder is an individual, the TIN generally is such
stockholder's social security number. If the Depositary is not provided with the
correct TIN, the stockholder may be subject to a $50 penalty imposed by the
Internal Revenue Service and payments that are made to such stockholder with
respect to Shares purchased pursuant to the Offer may be subject to backup
withholding of 31%. In addition, if a stockholder makes a false statement that
results in no imposition of backup withholding, and there was no reasonable
basis for making such statement, a $500 penalty may also be imposed by the
Internal Revenue Service.
Certain stockholders (including, among others, corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit a statement (Internal Revenue Service
Form W-8), signed under penalties of perjury, attesting to such individual's
exempt status. Forms of such statements can be obtained from the Depositary. See
the enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for additional instructions. A stockholder should consult
his or her tax advisor as to such stockholder's qualification for exemption from
backup withholding and the procedure for obtaining such exemption.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the stockholder. Backup withholding is not an additional
tax. Rather, the federal income tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained provided that the
required information is furnished to the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of such stockholder's correct TIN by
completing the form below certifying that (a) the TIN provided on Substitute
Form W-9 is correct (or that such stockholder is awaiting a TIN), and (b)(i)
such stockholder has not been notified by the Internal Revenue Service that he
is subject to backup withholding as a result of a failure to report all interest
or dividends or (ii) the Internal Revenue Service has notified such stockholder
that such stockholder is no longer subject to backup withholding.
<PAGE> 11
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record holder of the
Shares tendered hereby. If the Shares are in more than one name or are not in
the name of the actual owner, consult the enclosed Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9 for additional guidance
on which number to report. If the tendering stockholder has not been issued a
TIN and has applied for a number or intends to apply for a number in the near
future, the stockholder should write "Applied For" in the space provided for the
TIN in Part I, and sign and date the Substitute Form W-9. If "Applied For" is
written in Part I and the Depositary is not provided with a TIN by the time of
payment, the Depositary will withhold 31% of all payments of the purchase price
to such stockholder until a TIN is provided to the Depositary.
<PAGE> 12
<TABLE>
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
- ---------------------------------------------------------------------------------------------
PART I -- Taxpayer Identification Num-
ber -- For all accounts, enter your taxpayer
SUBSTITUTE identification number in the box at right.
FORM W-9 (For most individuals, this is your social
DEPARTMENT OF THE security number. If you do not have a number,
TREASURY see Obtaining a Number in the enclosed
INTERNAL REVENUE SERVICE Guidelines.) Certify by signing and dating
below. Note: If the account is in more than
PAYER'S REQUEST FOR TAXPAYER one name, see the chart in the enclosed
IDENTIFICATION NUMBER (TIN) Guidelines to determine which number to give
the payer.
- ---------------------------------------------------------------------------------------------
------------------------------------------
Social security number
or
------------------------------------------
Employer Identification Number
(If awaiting TIN write
"Applied For")
- ---------------------------------------------------------------------------------------------
PART II -- For Payees Exempt from Backup
Withholding, see the enclosed Guidelines and
complete as instructed therein.
- ---------------------------------------------------------------------------------------------
CERTIFICATION -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am
waiting for a number to be issued to me), and
(2) I am not subject to backup withholding because: (a) I am exempt from backup
withholding, or (b) I have not been notified by the Internal Revenue Service (the
"IRS") that I am subject to back-up withholding as a result of failure to report all
interest or dividends, or (c) the IRS has notified me that I am no longer subject to
backup withholding.
CERTIFICATE INSTRUCTIONS -- You must cross out item (2) above if you have been notified by
the IRS that you are currently subject to backup withholding because of underreporting
interest or dividends on your tax return. However, if after being notified by the IRS that
you were subject to backup withholding you received another notification from the IRS that
you are no longer subject to backup withholding, do not cross out item (2). (Also see
instructions in the enclosed Guidelines.)
- ---------------------------------------------------------------------------------------------
SIGNATURE DATE ________________________
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A $50 PENALTY
IMPOSED BY THE INTERNAL REVENUE SERVICE AND BACKUP WITHHOLDING OF 31% OF
ANY PAYMENTS MADE TO YOU PURSUANT TO THIS OFFER. PLEASE REVIEW THE
ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
NOTE: YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING A TAXPAYER
IDENTIFICATION NUMBER
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER HAS
NOT BEEN ISSUED TO ME, AND EITHER (1) I HAVE MAILED OR DELIVERED AN APPLICATION
TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE INTERNAL REVENUE
SERVICE CENTER OR SOCIAL SECURITY ADMINISTRATION OFFICE OR (2) I INTEND TO MAIL
OR DELIVER AN APPLICATION IN THE NEAR FUTURE. I UNDERSTAND THAT IF I DO NOT
PROVIDE A TAXPAYER IDENTIFICATION NUMBER BY THE TIME OF PAYMENT, 31% OF ALL
REPORTABLE CASH PAYMENTS MADE TO ME THEREAFTER WILL BE WITHHELD UNTIL I PROVIDE
A TAXPAYER IDENTIFICATION NUMBER.
SIGNATURE: DATE: ___________________
<PAGE> 13
Facsimilies of the Letter of Transmittal, properly completed and duly
signed, 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 such stockholder's broker, dealer, commercial bank, trust company
or other nominee to the Depositary at one of its addresses or to the facsimile
number set forth below.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Overnight Courier: By Mail: By Hand:
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
Corporate Actions Corporate Actions Corporate Actions
Suite 4680 Suite 4660 c/o Securities Transfer and
14 Wall Street, 8th Floor P.O. Box 2569 Reporting Services Inc.
New York, NY 10005 Jersey City, NJ 07303-2569 100 William Street, Galleria
New York, NY 10038
</TABLE>
------------------------------------
Questions or requests for assistance may be directed to the Information Agent at
its address and telephone numbers listed below. Additional copies of the Offer
to Purchase, this 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:
[Innisfree Logo]
501 Madison Avenue, 20th Floor
New York, New York 10022
Banks and Brokers Call Collect: (212) 750-5833
All Others Call Toll Free: (888) 750-5834
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
THE TURNER CORPORATION
TO
BETA ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
HOCHTIEF AG
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed delivery, or a form substantially equivalent
hereto, must be used to accept the Offer (as defined below) (i) if certificates
("Share Certificates"), evidencing shares of Common Stock, par value $1.00 per
share (the "Shares"), of The Turner Corporation, a Delaware corporation (the
"Company"), are not immediately available, (ii) if Share Certificates and all
other required documents cannot be delivered to First Chicago Trust Company of
New York, as Depositary (the "Depositary"), prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase (as defined below)) or (iii) if
the procedure for delivery by book-entry transfer cannot be completed on a
timely basis. This Notice of Guaranteed Delivery may be delivered by hand or
mail or transmitted by telegram, or facsimile transmission to the Depositary.
See Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By Facsimile Transmission (for Eligible Institutions only):
(201) 222-4720 or (201) 222-4721
Confirm by Telephone: (201) 222-4707
<TABLE>
<S> <C> <C>
By Overnight Courier: By Mail: By Hand:
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
Corporate Actions Corporate Actions Corporate Actions
Suite 4680 Suite 4660 c/o Securities Transfer and
14 Wall Street, 8th Floor P.O. Box 2569 Reporting Services, Inc.
New York, NY 10005 Jersey City, NJ 07303-2569 100 William Street, Galleria
New York, NY 10038
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to Beta Acquisition Corp., a Delaware
corporation and an indirect wholly owned subsidiary of HOCHTIEF AG, a
corporation organized under the laws of Germany, upon the terms and subject to
the conditions set forth in the Offer to Purchase, dated August 20, 1999 (the
"Offer to Purchase"), and the related Letter of Transmittal (which, together
with the Offer to Purchase and any amendments or supplements thereto,
collectively constitute the "Offer"), receipt of each of which is hereby
acknowledged, the number of Shares specified below pursuant to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase.
<TABLE>
<S> <C>
- ------------------------------------------------------ ------------------------------------------------------
Number of Shares:--------------------------------- -----------------------------------------------------
-----------------------------------------------------
Certificate Nos. (If Available): Signature(s) of Holder(s)
- -----------------------------------------------------
Dated:--------------------------, 1999
[ ] Check this box if Shares will be delivered by -----------------------------------------------------
book-entry transfer: Please Type or Print
-----------------------------------------------------
Book-Entry Transfer Facility Address
-----------------------------------------------------
Account No.---------------------------------------- Zip Code
-----------------------------------------------------
- ------------------------------------------------------ Daytime Area Code and Telephone No.
------------------------------------------------------
</TABLE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agents Medallion
Program or an "eligible guarantor institution," as such term is defined in Rule
17 Ad-15 under the Securities Exchange Act of 1934, as amended, guarantees to
deliver to the Depositary either certificates representing the Shares tendered
hereby, in proper form for transfer, or confirmation of book-entry transfer of
such Shares into the Depositary's account at The Depositary Trust Company, in
each case with delivery of a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof), with any required
signature guarantees, or an Agent's Message (as defined in the Offer to
Purchase), and any other documents required by the Letter of Transmittal, within
three New York Stock Exchange trading days (as defined in the Offer to Purchase)
after the date hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
Name of Firm:
Address:
- ------------------------------------------------------
Zip Code
Area Code and Tel. No.:
- ------------------------------------------------------
Authorized Signature
Name:
Please Type or Print
Title:
Dated: , 1999
DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE.
SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
2
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF
SERIES C 8 1/2% CONVERTIBLE PREFERENCE STOCK
AND
SERIES D 8 1/2% CONVERTIBLE PREFERENCE STOCK
OF
THE TURNER CORPORATION
TO
BETA ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
HOCHTIEF AG
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed delivery, or a form substantially equivalent
hereto, must be used to accept the Offer (as defined below) (i) if certificates
("Share Certificates"), evidencing shares of Series C 8 1/2% Convertible
Preference Stock, par value $1.00 per share (the "Series C Preferred Stock"), of
The Turner Corporation, a Delaware corporation (the "Company") and shares of
Series D 8 1/2% Convertible Preference Stock, par value $1.00 per share, of the
Company (the "Series D Preferred Stock", and, together with the Series C
Preferred Stock, the "Shares"), are not immediately available, (ii) if Share
Certificates and all other required documents cannot be delivered to First
Chicago Trust Company of New York, as Depositary (the "Depositary"), prior to
the Expiration Date (as defined in Section 1 of the Offer to Purchase (as
defined below)) or (iii) if the procedure for delivery by book-entry transfer
cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be
delivered by hand or mail or transmitted by telegram, or facsimile transmission
to the Depositary. See Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By Facsimile Transmission (for Eligible Institutions only):
(201) 222-4720 or (201) 222-4721
Confirm by Telephone: (201) 222-4707
<TABLE>
<S> <C> <C>
By Overnight Courier: By Mail: By Hand:
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
Corporate Actions Corporate Actions Corporate Actions
Suite 4680 Suite 4660 c/o Securities Transfer and
14 Wall Street, 8th Floor P.O. Box 2569 Reporting Services, Inc.
New York, NY 10005 Jersey City, NJ 07303-2569 100 William Street, Galleria
New York, NY 10038
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to Beta Acquisition Corp., a Delaware
corporation and an indirect wholly owned subsidiary of HOCHTIEF AG, a
corporation organized under the laws of Germany, upon the terms and subject to
the conditions set forth in the Offer to Purchase, dated August 20, 1999 (the
"Offer to Purchase"), and the related Letter of Transmittal (which, together
with the Offer to Purchase and any amendments or supplements thereto,
collectively constitute the "Offer"), receipt of each of which is hereby
acknowledged, the number of Shares specified below pursuant to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase.
<TABLE>
<S> <C>
- ------------------------------------------------------ ------------------------------------------------------
Number of Shares and -----------------------------------------------------
Series of each Share:------------------------------- -----------------------------------------------------
Signature(s) of Holder(s)
Certificate Nos. (If Available):
- ----------------------------------------------------- Dated:--------------------------, 1999
-----------------------------------------------------
[ ] Check this box if Shares will be delivered by Please Type or Print
book-entry transfer: -----------------------------------------------------
Address
Book-Entry Transfer Facility -----------------------------------------------------
Zip Code
Account No.---------------------------------------- -----------------------------------------------------
Daytime Area Code and Telephone No.
- ------------------------------------------------------ ------------------------------------------------------
</TABLE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agents Medallion
Program or an "eligible guarantor institution," as such term is defined in Rule
17 Ad-15 under the Securities Exchange Act of 1934, as amended, guarantees to
deliver to the Depositary either certificates representing the Shares tendered
hereby, in proper form for transfer, or confirmation of book-entry transfer of
such Shares into the Depositary's account at The Depositary Trust Company, in
each case with delivery of a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof), with any required
signature guarantees, or an Agent's Message (as defined in the Offer to
Purchase), and any other documents required by the Letter of Transmittal, within
three New York Stock Exchange trading days (as defined in the Offer to Purchase)
after the date hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
Name of Firm: ----------------------------------------
Address: ---------------------------------------------
- ------------------------------------------------------
Zip Code
Area Code and Tel. No.: ------------------------------
- ------------------------------------------------------
Authorized Signature
Name: ------------------------------------------------
Please Type or Print
Title: -----------------------------------------------
Dated: ---------------------------------------- , 1999
2
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS),
SERIES C 8 1/2 CONVERTIBLE PREFERENCE STOCK AND
SERIES D 8 1/2 CONVERTIBLE PREFERENCE STOCK
OF
THE TURNER CORPORATION
AT
$28.625 NET PER SHARE OF COMMON STOCK,
$4,770.8333 NET PER SHARE OF SERIES C 8 1/2% CONVERTIBLE PREFERENCE STOCK,
AND
$4,293.75 NET PER SHARE OF SERIES D 8 1/2% CONVERTIBLE PREFERENCE STOCK
BY
BETA ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
HOCHTIEF AG
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, SEPTEMBER 17, 1999 UNLESS THE OFFER IS EXTENDED.
August 20, 1999
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Beta Acquisition Corp., a Delaware corporation
("Purchaser") and an indirect wholly owned subsidiary of HOCHTIEF AG, a company
organized under the laws of Germany ("Parent"), to act as Information Agent in
connection with Purchaser's offer to purchase (i) all the issued and outstanding
shares of common stock, par value $1.00 per share (the "Company Common Stock"),
of The Turner Corporation, a Delaware corporation (the "Company"), including the
associated rights (the "Rights") issued pursuant to the Rights Agreement, dated
as of September 21, 1998, between the Company and First Chicago Trust Company of
New York, and (ii) all the issued and outstanding shares of (A) Series C 8 1/2%
Convertible Preference Stock, par value $1.00 per share, of the Company ("Series
C Preferred Stock"), and (B) Series D 8 1/2% Convertible Preference Stock, par
value $1.00 per share, of the Company ("Series D Preferred Stock" and, together
with the Series C Preferred Stock, the "Company Preferred Stock"), at a price of
$28.625 per share of Company Common Stock, $4,770.8333 per share of Series C
Preferred Stock and $4,293.75 per share of Series D Preferred Stock, in each
case, net to the seller in cash, upon the terms and subject to the conditions
set forth in Purchaser's Offer to Purchase, dated August 20, 1999 (the "Offer to
Purchase"), and the related Letter of Transmittal (which, together with the
Offer to Purchase and any amendments or supplements thereto, collectively
constitute the "Offer") enclosed herewith. The price per share of Company
Preferred Stock was determined by multiplying $28.625, the offer price per share
of Company Common Stock, by the number of shares of Company Common Stock into
which each Company Preferred Stock is convertible (the "Preferred Stock
Conversion Ratio") under the applicable certificate of designation of such
Company Preferred Stock. Currently, each share of Series C Preferred Stock is
convertible into 166 2/3 shares of Company Common Stock and each share of Series
D Preferred Stock is convertible into 150 shares of Company Common Stock. In the
event that the Company takes any action that causes the Preferred Stock
Conversion Ratio to change, Purchaser may (subject to the provisions of the
Merger Agreement) make such adjustments to the purchase price for each share of
Company Preferred Stock as it deems appropriate to reflect such change in the
Preferred Stock Conversion Ratio.
<PAGE> 2
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold shares of Company Common Stock or shares of Company
Preferred Stock (hereinafter collectively referred to as "Shares") registered in
your name or in the name of your nominee.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (i) THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST
THE NUMBER OF SHARES OF COMPANY COMMON STOCK AND SHARES OF COMPANY PREFERRED
STOCK (DETERMINED AS IF SHARES OF COMPANY PREFERRED STOCK HAD BEEN CONVERTED
INTO SHARES OF COMPANY COMMON STOCK) THAT, TOGETHER WITH THE SHARES ALREADY
OWNED BY PARENT, SHALL CONSTITUTE TWO-THIRDS OF THE OUTSTANDING SHARES OF
COMPANY COMMON STOCK ON A FULLY DILUTED BASIS AND (ii) ANY APPLICABLE WAITING
PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS
AMENDED, HAVING EXPIRED OR BEEN TERMINATED.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
1. Offer to Purchase, dated August 20, 1999;
2. Letter of Transmittal for your use in accepting the Offer and
tendering Shares and for the information of your clients;
3. Notice of Guaranteed Delivery to be used to accept the Offer if the
Shares and all other required documents are not immediately available or
cannot be delivered to First Chicago Trust Company of New York (the
"Depositary") prior to the Expiration Date (as defined in the Offer to
Purchase) or if the procedure for book-entry transfer cannot be completed
prior to the Expiration Date;
4. A letter to stockholders of the Company from Ellis T. Gravette, Jr.,
Chairman and Chief Executive Officer of the Company, together with a
Solicitation/Recommendation Statement on Schedule 14D-9 filed with the
Securities and Exchange Commission by the Company;
5. A letter which may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominee, with
space provided for obtaining such clients' instructions with regard to the
Offer;
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. Return envelope addressed to the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, SEPTEMBER 17, 1999, UNLESS THE OFFER IS EXTENDED.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates
evidencing such Shares (or a confirmation of a book-entry transfer of such
Shares into the Depositary's account at the Book-Entry Transfer Facility (as
defined in the Offer to Purchase)), (ii) a 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 (as defined in the Offer to Purchase) and (iii) any other required
documents.
If holders of Shares wish to tender, but it is impracticable for them to
forward their certificates or other required documents prior to the expiration
of the Offer, a tender may be effected by following the guaranteed delivery
procedure described in Section 3 of the Offer to Purchase.
Purchaser will not pay any fees or commissions to any broker, dealer or
other person (other than the Depositary and the Information Agent as described
in the Offer to Purchase) in connection with the solicitation of tenders of
Shares pursuant to the Offer. However, Purchaser will reimburse you for
customary mailing and handling expenses incurred by you in forwarding any of the
enclosed materials to your clients. Purchaser will pay or cause to be paid any
stock transfer taxes payable with respect to the transfer of Shares to it,
except as otherwise provided in Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to
Innisfree M&A Incorporated (the "Information Agent") at its address and
telephone numbers set forth on the back cover page of the Offer to Purchase.
Additional copies of the enclosed material may be obtained from the
Information Agent, at the address and telephone number set forth on the back
cover page of the Offer to Purchase.
Very truly yours,
INNISFREE M&A INCORPORATED
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF PARENT, PURCHASER, THE COMPANY, THE INFORMATION
AGENT OR THE DEPOSITARY, OR OF ANY AFFILIATE OF ANY OF THE FOREGOING, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR TO MAKE ANY STATEMENT
ON BEHALF OF ANY OF THE FOREGOING IN CONNECTION WITH THE OFFER OTHER THAN THE
ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
2
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS),
SERIES C 8 1/2% CONVERTIBLE PREFERENCE STOCK AND
SERIES D 8 1/2% CONVERTIBLE PREFERENCE STOCK
OF
THE TURNER CORPORATION
AT
$28.625 NET PER SHARE OF COMMON STOCK,
$4,770.8333 NET PER SHARE OF SERIES C 8 1/2% CONVERTIBLE PREFERENCE STOCK
AND
$4,293.75 NET PER SHARE OF SERIES D 8 1/2% CONVERTIBLE PREFERENCE STOCK
BY
BETA ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
HOCHTIEF AG
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, SEPTEMBER 17, 1999, UNLESS THE OFFER IS EXTENDED.
To Our Clients: August 20, 1999
Enclosed for your consideration are an Offer to Purchase, dated August 20,
1999 (the "Offer to Purchase"), and a related Letter of Transmittal (which,
together with the Offer to Purchase and any amendments or supplements thereto,
collectively, constitute the "Offer") in connection with the offer by Beta
Acquisition Corp., a Delaware corporation ("Purchaser") and an indirect wholly
owned subsidiary of HOCHTIEF AG, a corporation organized under the laws of
Germany ("Parent"), to purchase (i) all the issued and outstanding shares of
common stock, par value $1.00 per share ("Company Common Stock"), of The Turner
Corporation, a Delaware corporation (the "Company"), including the associated
rights (the "Rights") issued pursuant to the Rights Agreement, dated as of
September 21, 1998, between the Company and First Chicago Trust Company of New
York, and (ii) all the issued and outstanding shares of (A) Series C 8 1/2%
Convertible Preference Stock, par value $1.00 per share, of the Company ("Series
C Preferred Stock"), and (B) Series D 8 1/2% Convertible Preference Stock, par
value $1.00 per share, of the Company ("Series D Preferred Stock" and, together
with the Series C Preferred Stock, the "Company Preferred Stock"), at a price of
$28.625 per share of Company Common Stock, $4,770.8333 per share of Series C
Preferred Stock and $4,293.75 per share of Series D Preferred Stock, in each
case, net to the seller in cash, upon the terms and subject to the conditions
set forth in the Offer to Purchase. We are (or our nominee is) the holder of
record of shares of Company Common Stock and/or shares of Company Preferred
Stock (such shares of Company Common Stock and Company Preferred Stock being
hereinafter collectively referred to as "Shares") held for your account. A
TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND
PURSUANT TO YOUR INSTRUCTIONS. THE ENDORSED LETTER OF TRANSMITTAL IS FURNISHED
TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD
BY US FOR YOUR ACCOUNT.
<PAGE> 2
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares held by us for your account, upon the terms and
subject to the conditions set forth in the Offer.
YOUR ATTENTION IS INVITED TO THE FOLLOWING:
1. The tender price is $28.625 per share of Company Common Stock,
$4,770.8333 per share of Series C Preferred Stock and $4,293.75 per share
of Series D Preferred Stock, in each case, net to you in cash. The price
per share of Company Preferred Stock was determined by multiplying $28.625,
the offer price per share of Company Common Stock, by the number of shares
of Company Common Stock into which each Company Preferred Stock is
convertible (the "Preferred Stock Conversion Ratio") under the applicable
certificate of designation of such Company Preferred Stock. Currently, each
share of Series C Preferred Stock is convertible into 166 2/3 shares of
Company Common Stock and each share of Series D Preferred Stock is
convertible into 150 shares of Company Common Stock. In the event that the
Company takes any action that causes the Preferred Stock Conversion Ratio
to change, Purchaser may (subject to the provisions of the Merger
Agreement) make such adjustments to the purchase price for each share of
Company Preferred Stock as it deems appropriate to reflect such change in
the Preferred Stock Conversion Ratio.
2. The Offer is being made for all outstanding Shares.
3. 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 and recommends that the stockholders
accept the Offer and tender their Shares pursuant to the Offer.
4. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON FRIDAY, SEPTEMBER 17, 1999, UNLESS THE OFFER IS
EXTENDED.
5. The Offer is conditioned upon, among other things, (i) there having
been validly tendered and not withdrawn prior to the expiration of the
Offer at least the number of shares of Company Common Stock and shares of
Company Preferred Stock (determined as if shares of Company Preferred Stock
had been converted into shares of Company Common Stock) that when added to
the Shares already owned by Parent shall constitute two-thirds of the then
outstanding shares of Company Common Stock on a fully diluted basis, and
(ii) any applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, having expired or been terminated.
6. 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.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form contained
in this letter. An envelope in which to return your instructions to us is
enclosed. If you authorize the tender of your Shares, all such Shares will be
tendered unless otherwise specified in your instructions. YOUR INSTRUCTIONS
SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR
BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and is being made to all holders of Shares. Purchaser is not aware
of any state where the making of the Offer is prohibited by 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 such state statute. If, after such good faith effort, Purchaser cannot
comply with 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.
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMPANY COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS),
SERIES C 8 1/2% CONVERTIBLE PREFERENCE STOCK AND
SERIES D 8 1/2% CONVERTIBLE PREFERENCE STOCK
OF
THE TURNER CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated August 20, 1999, and the related Letter of Transmittal
(which, together with the Offer to Purchase and any amendments or supplements
thereto, collectively constitute the "Offer") in connection with the offer by
Beta Acquisition Corp., a Delaware corporation and an indirect wholly owned
subsidiary of HOCHTIEF AG, a corporation organized under the laws of Germany, to
purchase (i) all the issued and outstanding shares of common stock, par value
$1.00 per share ("Company Common Stock"), of The Turner Corporation, a Delaware
corporation (the "Company"), including the associated rights (the "Rights")
issued pursuant to the Rights Agreement, dated as of September 21, 1998, between
the Company and First Chicago Trust Company of New York, and (ii) all the issued
and outstanding shares of (A) Series C 8 1/2% Convertible Preference Stock, par
value $1.00 per share, of the Company ("Series C Preferred Stock") and (B)
Series D 8 1/2% Convertible Preference Stock, par value $1.00 per share, of the
Company ("Series D Preferred Stock" and, together with the Series C Preferred
Stock, the "Company Preferred Stock") (such shares of Company Common Stock and
Company Preferred Stock being hereinafter collectively referred to as "Shares").
3
<PAGE> 4
This will instruct you to tender the number of Shares indicated below (or,
if no number is indicated below, all Shares) that are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer.
Dated: , 1999
- ------------------------------------------------------
NUMBER OF SHARES TO BE TENDERED:
----------------------------------- Common Shares*
-------------------------- Series C Preferred Shares*
-------------------------- Series D Preferred Shares*
- ------------------------------------------------------
- ------------------------------------------------------
SIGN HERE
--------------------------------------------------
--------------------------------------------------
Signature(s)
--------------------------------------------------
--------------------------------------------------
Please type or print names(s)
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
Please type or print address
--------------------------------------------------
Area Code and Telephone Number
--------------------------------------------------
Taxpayer Identification or Social Security Number
- ------------------------------------------------------
- ---------------
* Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
4
<PAGE> 1
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER. -- Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e. 00-0000000. The table below will help determine the number
to give the payer.
<TABLE>
<C> <S> <C>
- ------------------------------------------------------------
GIVE THE
FOR THIS TYPE OF ACCOUNT SOCIAL SECURITY
NUMBER OF --
- ------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals The actual owner of
(joint account) the account or, if
combined funds, the
first individual on
the account(1)
3. Husband and wife The actual owner of
the account or, if
joint funds, either
person(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if
the minor is the
only contributor,
the minor(1)
6. Account in the name of guardian or The ward, minor or
committee for a designated ward, incompetent
minor or incompetent person person(3)
7. a. The unusual revocable savings The grantor-
trust (grantor is also trustee) trustee(1)
b. So-called trust account that is The actual owner(1)
not a legal or valid trust
under State law
- ------------------------------------------------------------
- ------------------------------------------------------------
GIVE THE
FOR THIS TYPE OF ACCOUNT SOCIAL SECURITY
NUMBER OF --
- ------------------------------------------------------------
8. Sole proprietorship account The owner(4)
9. A valid trust, estate or pension The legal entity
trust (Do not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization account
12. Partnership account The partnership
13. Association, club or other The organization
tax-exempt organization
14. A broker or registered nominee The broker or
nominee
15. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a state or
local government, school district,
or prison) that receives
agricultural program payments
- ------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner. If the owner does not have an employer
identification number, furnish the owner's social security number.
(5) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), at the local office of the Social Security
Administration or the Internal Revenue Service (the "IRS") and apply for a
number.
PAYEE AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING
The following is a list of payees exempt from backup withholding and for which
no information reporting is required. For interest and dividends, all listed
payees are exempt except item (9). For broker transactions, payees listed in
items (1) through (13) and a person registered under the Investment Advisors Act
of 1940 who regularly acts as a broker are exempt. Payments subject to reporting
under sections 6401 and 6041A are generally exempt from backup withholding only
if made to payees described in items (1) through (7), except a corporation
(other than certain hospitals described in Regulations section 1.6041-3(c)) that
provides medical and health care services or bills and collects payments for
such services is not exempt from backup withholding or information reporting.
Only payees described in items (1) through (5) are exempt from backup
withholding for barter exchange transactions and patronage dividends.
(1) An organization exempt from tax under section 501(a), or an IRA, or a
custodial account under section 403(b)(7), if the account satisfies the
requirements of section 401(f)(2).
(2) The United States or any of its agencies or instrumentalities.
(3) A state, the District of Columbia, a possession of the United States, or
any of their political subdivisions or instrumentalities.
(4) A foreign government or any of its political subdivisions, agencies or
instrumentalities.
(5) An international organization or any of its agencies or instrumentalities.
(6) A corporation.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the United
States, the District of Columbia or a possession of the United States.
(9) A futures commission merchant registered with the Commodity Futures Trading
Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the Investment
Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in the
most recent publication of the American Society of Corporate Secretaries,
Inc., Nominee List.
(15) A trust exempt from tax under section 664 or described in section 4947.
Payments of dividends and patronage dividends that generally are exempt from
backup withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident alien partner.
- Payments of patronage dividends where the amount is not paid in money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest that generally are exempt from backup withholding include
the following:
- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to non-resident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file substitute Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND
DATE THE FORM AND RETURN IT TO THE PAYER. IF YOU ARE A NON-RESIDENT ALIEN OR A
FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER A COMPLETED
INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
Certain payments other than interest, dividends and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see sections 6041, 6041A, 6042, 6044, 6045, 6049 and
6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payors
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Payers must generally withhold 31%
of taxable interest, dividend and certain other payments to a payee who does not
furnish a taxpayer identification number to a payer. Certain penalties may also
apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your correct taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
<PAGE> 1
EXHIBIT (a)(9)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares (as defined below). The Offer (as defined below) is made solely
by the Offer to Purchase dated August 20, 1999 and the related Letters of
Transmittal, and is being made to all holders of Shares. Purchaser (as defined
below) is not aware of any state where the making of the Offer is prohibited by
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 shall make a good
faith effort to comply with such state statute. If, after such good faith
effort, Purchaser cannot comply with 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 is being made on behalf of Purchaser by one or more registered brokers or
dealers licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash All Outstanding Shares of Common Stock
(including the Associated Rights), Series C 8 1/2% Convertible Preference Stock
and Series D 8 1/2% Convertible Preference Stock of The Turner Corporation at
$28.625 Net Per Share of Common Stock, $4,770.8333 Net Per Share of Series C
8 1/2% Convertible Preference Stock and $4,293.75 Net Per Share of Series D
8 1/2% Convertible Preference Stock by Beta Acquisition Corp. an indirect wholly
owned subsidiary of HOCHTIEF AG Beta Acquisition Corp., a Delaware corporation
("Purchaser") and an indirect wholly owned subsidiary of HOCHTIEF AG, a
corporation organized under the laws of Germany ("Parent"), is offering to
purchase (i) all the issued and outstanding shares of common stock, par value
$1.00 per share ("Company Common Stock"), of The Turner Corporation, a Delaware
corporation (the "Company"), including the associated rights (the "Rights")
issued pursuant to the Rights Agreement dated September 21, 1998, between the
Company and First Chicago Trust Company of New York, and (ii) all the issued and
outstanding shares of (A) Series C 8 1/2% Convertible Preference Stock, par
value $1.00 per share, of the Company ("Series C Preferred Stock"), and (B)
Series D 8 1/2% Convertible Preference Stock, par value $1.00 per share, of the
Company ("Series D Preferred Stock" and, together with the Series C Preferred
Stock, the "Company Preferred Stock") (shares of Company Common Stock and
Company Preferred Stock are hereinafter collectively referred to as the
"Shares"), at a price of $28.625 per share of Company Common Stock, $4,770.8333
per share of Series C Preferred Stock and $4,293.75 per share of Series D
Preferred Stock, in each case, net to the seller in cash, without interest, upon
the terms and subject to the conditions set forth in the Offer to Purchase,
dated August 20, 1999 (the "Offer to Purchase"), and in the related Letters of
Transmittal (which, together with the Offer to Purchase and any amendments or
supplements thereto, collectively constitute the "Offer"). Following the Offer,
Purchaser intends to effect the Merger described below. The price per share of
Company Preferred Stock was determined by multiplying $28.625, the offer price
per share of Company Common Stock, by the number of shares of Company Common
Stock into which each share of Company Preferred Stock is convertible (the
"Preferred Stock Conversion Ratio") under the applicable certificate of
designation of such series of Company Preferred Stock. Currently, each share of
Series C Preferred Stock is convertible into 166 2/3 shares of Company Common
Stock and each share of Series D Preferred Stock is convertible into 150 shares
of Company Common Stock. In the event that the Preferred Stock Conversion Ratio
changes, Purchaser may (subject to the provisions of the Merger Agreement) make
such adjustments to the purchase price for each share of Company Preferred Stock
as it deems appropriate to reflect such change in the Preferred Stock Conversion
Ratio.
<PAGE> 2
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, SEPTEMBER 17, 1999, UNLESS THE OFFER IS EXTENDED. The Offer is
conditioned upon, among other things, (i) there having been validly tendered and
not withdrawn prior to the expiration of the Offer at least the number of shares
of Company Common Stock and shares of Company Preferred Stock (determined as if
shares of Company Preferred Stock had been converted into shares of Company
Common Stock) that when added to the Shares already owned by Parent shall
constitute two-thirds of the then outstanding shares of Company Common Stock on
a fully diluted basis, and (ii) any applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, having expired
or been terminated.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of
August 16, 1999 (the "Merger Agreement"), among Parent, Purchaser and the
Company. The Merger Agreement provides that, among other things, as soon as
practicable after the purchase of Shares pursuant to the Offer and the
satisfaction or waiver 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"). Following consummation of the Merger, the Company
will continue as the surviving corporation (the "Surviving Corporation") and
will become an indirect wholly owned subsidiary of Parent. At the effective time
of the Merger (the "Effective Time"), (i) each share of Company Common Stock
issued and outstanding immediately prior to the Effective Time (other than any
shares of Company Common Stock held in the treasury of the Company and each
share of Company Common Stock owned by Purchaser, Parent or any direct or
indirect wholly owned subsidiary of Parent or of the Company and other than
shares of Company Common Stock held by stockholders who shall have demanded and
perfected appraisal rights under Delaware Law) shall be canceled and shall be
converted automatically into the right to receive $28.625 cash, or any greater
price that may be paid per share of Company Common Stock in the Offer (the
"Common Stock Merger Consideration"), without interest, and (ii) each share of
Company Preferred Stock issued and outstanding immediately prior to the
Effective Time (other than any shares of Company Preferred Stock held in the
treasury of the Company and each share of Company Preferred Stock owned by
Purchaser, Parent or any direct or indirect wholly owned subsidiary of Parent or
of the Company and other than shares of Company Preferred Stock held by
stockholders who shall have demanded and perfected appraisal rights under
Delaware Law) shall be canceled and shall be converted automatically into the
right to receive an amount in cash equal to the product of the Common Stock
Merger Consideration multiplied by the number of shares of Company Common Stock
into which such share of Company Preferred Stock shall be convertible
immediately prior to the Effective Time, without interest.
The Board of Directors of the Company has unanimously approved the Merger
Agreement and the making of the Offer by Purchaser and has determined that the
terms of the Offer and the Merger are fair to, and in the best interests of, the
holders of Shares, and recommends that the holders of Shares accept the Offer
and tender their Shares pursuant to the Offer.
For purposes of the Offer, Purchaser will be deemed to have accepted for payment
(and thereby purchased) Shares properly tendered and not withdrawn as, if and
when Purchaser gives oral or written notice to First Chicago Trust Company of
New York (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 extension of the Offer
or any delay in making such payment. 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 of a book-entry transfer of such
Shares into the Depositary's account at the Book-Entry Transfer Facility (as
defined in the Offer to Purchase) pursuant to the procedure set forth in Section
3 of the Offer to Purchase, (ii) a Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees or,
in the case of a book-entry transfer, an Agent's Message (as defined in the
Offer to Purchase) and (iii) any other documents required under the Letters of
Transmittal.
<PAGE> 3
Subject to the terms of the Merger Agreement and the applicable rules and
regulations of the Securities and Exchange Commission, Purchaser expressly
reserves the right (but subject to the terms and conditions of the Merger
Agreement), at any time and from time to time, to extend for any reason the
period of time during which the Offer is open, including the occurrence of any
of the conditions specified in Section 14 of the Offer to Purchase, by giving
oral or written notice of such extension to the Depositary. Any such extension
will be followed as promptly as practicable by public announcement thereof, such
announcement to be made no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date (as defined below)
of the Offer. During any such extension, all Shares previously tendered and not
withdrawn will remain subject to the Offer, subject to the rights of a tendering
stockholder to withdraw such stockholder's Shares.
The term "Expiration Date" means 12:00 Midnight, New York City time, on Friday,
September 17, 1999, unless and until Purchaser (in accordance with the terms and
conditions of the Merger Agreement), shall have extended the period of time
during which the Offer is open, in which event the term "Expiration Date" shall
mean the latest time and date at which the Offer, as so extended by Purchaser,
will expire. Tenders 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 Monday, October 18, 1999. For the withdrawal
to be effective, a written, telegraphic, or facsimile transmission notice of
withdrawal must be timely received by the Depositary at one of its addresses set
forth on the back cover page of the Offer to Purchase. 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 Section 4 of the Offer to Purchase. Any such
delay will be by an extension of the Offer to the extent required by law. Any
such notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder 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 (as
defined in Section 3 of the Offer to Purchase), 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 of the Offer to Purchase, 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. 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 of the
Offer to Purchase. All questions as to the form and validity (including the time
of receipt) of any notice of withdrawal will be determined by Purchaser, in its
sole discretion, whose determination will be final and binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended, is
contained in the Offer to Purchase and is incorporated herein by reference.
The Company has provided Purchaser with the Company's stockholder list and
security position listings for the purpose of disseminating the Offer to holders
of Shares. The Offer to Purchase, the related Letters of Transmittal and other
relevant documents will be mailed 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, 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.
The Offer to Purchase and the related Letters of Transmittal contain important
information which should be read carefully before any decision is made with
respect to the Offer.
Questions and requests for assistance or additional copies of the Offer to
Purchase and the related Letters of Transmittal and other tender offer materials
may be directed to the Information Agent at its address and telephone numbers as
set forth below, and copies will be furnished promptly at Purchaser's expense.
Neither Parent nor Purchaser will pay any fees or commissions to any brokers,
dealers or other
<PAGE> 4
persons (other than the Information Agent) for soliciting tenders of Shares
pursuant to the Offer.
The Information Agent for the Offer is:
[Innisfree logo]
501 Madison Avenue, 20th Floor
New York, New York 10022
Banks and Brokers Call Collect: (212) 750-5833
All Others Call Toll-Free: (888) 750-5834
August 20, 1999
<PAGE> 1
Exhibit (a)(10)
ESSEN, August 16, 1999 (Construction & Civil Engineering)
HOCHTIEF AGREES TO MERGE WITH LEADING U.S. CONSTRUCTION FIRM
PLANNED MERGER EXPANDS THE GROUP'S PRESENCE TO COVER THE ENTIRE AMERICAN
MARKET
HOCHTIEF and The Turner Corporation, New York, today entered into merger
agreement under which HOCHTIEF will acquire all of the outstanding common stock
of Turner. The two companies reached agreement to that effect in New York
following intensive negotiations. The Board of Directors of Turner has
unanimously approved the merger agreement. As a result, HOCHTIEF will move a
huge step closer to its objective of being fully represented throughout the U.S.
market.
Certain officers and directors of Turner, as well as Turner's largest
stockholder, EBSPSW Holding AG, have agreed to tender Turner shares owned by
them, representing in the aggregate approximately 22 percent of the outstanding
voting power of Turner, and to grant HOCHTIEF an option to buy such shares in
accordance with, and subject to, the terms of an agreement among HOCHTIEF and
such stockholders.
The Turner Corporation, founded in 1902, is today primarily involved in general
construction. Like HOCHTIEF, Turner focuses on planning and building complex
projects, both as general contractor and as construction manager. With work
completed in 1998 valued at US$4.1 billion, Turner is the second largest company
in the U.S. general building market.
HOCHTIEF is offering existing Turner's common shareholders US$28.625 per share.
As a first step, a U.S. subsidiary of HOCHTIEF will make a tender offer for all
Turner shares. HOCHTIEF will not be obliged to purchase the stock offered by
present shareholders unless the amount of stock tendered is sufficient to attain
a two-thirds majority of the total voting power of Turner. HOCHTIEF's obligation
to purchase shares in the tender offer will also be conditioned upon the
satisfaction or waiver of certain customary conditions, including expiration or
termination of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976. The offer to shareholders will remain in force until
mid-September.
Dr. Hans-Peter Keitel, President and Chief Executive Officer of HOCHTIEF: "A
takeover only creates synergies if both parties have a similar vision of the
future. We have found just such a partner in Turner. This company will greatly
enrich our global strategy."
Ellis T. Gravette, Jr., Chairman and Chief Executive Officer of Turner:
"HOCHTIEF has the full support of our Board. We are delighted to have such a
strong partner take this interest in Turner, and we are confident that together
we will be a powerful combination in the marketplace."
HOCHTIEF anticipates that synergies will be reaped in all of its corporate
divisions:
- BUILDING: Turner has been extraordinarily successful in the building
market. The projects it has brought to fruition include Madison
Square Garden in New York, the Boeing Sheet Metal Center in
Washington state, the Chrysler Electronics City in Alabama, United
Airlines Terminal One in Chicago, Carnegie Mellon University in
Pittsburgh, and Warner Bros. Pavilion in California.
- CIVIL: In the years ahead, an extensive public infrastructure
program is due to be implemented in the United States. This will
also provide considerable impetus to Turner's operations. This is a
good opportunity for HOCHTIEF to inject some of its own experience
gained in the infrastructure business.
- AIRPORT: Turner has collaborated with U.S. airlines and airports for
many years, which means it already has excellent good contacts in
these fields. Numerous U.S. airports are likely to be privatized in
the years ahead - and this is a business in which HOCHTIEF is
already active today.
- INTERNATIONAL: Turner's 3,000 employees are distributed among 41
offices, thus covering the whole of the U.S.A. This allows HOCHTIEF
to provide international key accounts in North America with
outstanding support.
With its work completed valued at DM12.3 billion last year, HOCHTIEF is
Germany's largest construction firm. Roughly 48 percent of the Group's business
is done outside Germany. HOCHTIEF is increasingly involved not only in planning
and building, but also in financing and operating complex infrastructure and
other projects.
HOCHTIEF's operations in North America have in the past been channeled via its
participating interest in Kitchell Corporation, of Phoenix, Arizona. It will
retain its current holding of 35.34 percent of Kitchell's equity unchanged.
Kitchell primarily operates in the traditional construction and general
contracting business in the South Western United States.
<PAGE> 1
Exhibit (a)(11)
The Turner Corporation Announces Merger With
HOCHTIEF AG
NEW YORK, Aug. 16 /PRNewswire/ -- The Turner Corporation (NYSE: TUR - news)
announced that it has entered into a merger agreement with HOCHTIEF AG under
which it will acquire all of the outstanding common stock of Turner for $28.625
per share. As a first step, HOCHTIEF will make a tender offer for all Turner
shares. The Board of Directors of Turner has unanimously approved the merger
agreement.
Certain Officers and Directors of Turner, as well as Turner's largest
stockholder EBSPSW Holdings AG, have agreed to tender Turner shares owned by
them, representing in the aggregate approximately 22 percent of the outstanding
voting power of Turner, and to grant HOCHTIEF an option to buy such shares in
accordance with, and subject to, the terms of an agreement among HOCHTIEF and
such shareholders.
With its work completed valued at $6.7 billion last year, HOCHTIEF AG is
Germany's largest construction firm. Roughly 48 percent of the Group's business
is done outside Germany. HOCHTIEF is increasingly involved not only in planning
and building, but also in financing and operating complex infrastructure and
other projects.
Commenting on an offer from HOCHTIEF, Turner Chairman E.T. Gravette, Jr. said,
"HOCHTIEF has the full support of our Board. We are delighted to have such a
strong partner take this interest in Turner and we are confident that together
we will be a powerful combination in the marketplace.
"This bid from HOCHTIEF recognizes the full value of Turner shares and the
strategic importance and potential of Turner as one of America's leading general
contractors. With $6.7 billion of work completed in 1998, HOCHTIEF is one of the
leaders in the worldwide construction industry. Joined with Turner, which
completed more than $4.1 billion in 1998 construction, HOCHTIEF substantially
reinforces its position as a leader on the cutting edge of total construction
project leadership."
Mr. Gravette emphasized the merger with HOCHTIEF will result in a win/win
situation. "The Turner Corporation will continue to operate as an autonomous
subsidiary with no change in U.S. management. From Turner's perspective, this is
a growth-driven transaction, not a cost-reduction deal. There are no layoffs
anticipated for Turner operations by reason of the merger."
HOCHTIEF's obligation to purchase shares in the offer will be conditioned upon
the tender of shares representing at least two-thirds of the outstanding voting
power of Turner and will be further subject to the satisfaction or waiver of
certain customary conditions, including expiration or termination of the waiting
period under the Hart Scott Rodino Anti-Trust Improvements Act of 1976.
Headquartered in New York City, The Turner Corporation, through Turner
Construction Company and other construction subsidiaries, is one of the nation's
leading general contractors, providing a complete range of construction and
program management services to the building market. Special emphasis is placed
on the commercial, retail, education, pharmaceutical, healthcare, sports and
justice sectors.
With more than sixty percent of Turner Corporation's business coming from repeat
clients, Turner is recognized as an industry leader in providing quality service
in diverse markets. The Company has a strong knowledge of the local markets in
which it operates, providing excellent service to key areas that offer the
greatest potential and highest return.
Operating through 41 offices, Turner has construction projects underway
throughout the United States and abroad. During 1998, The Turner Corporation
completed in excess of $4.1 billion in construction.
HOCHTIEF AG, based in Essen, Germany, has 37,000 employees around the world.
HOCHTIEF's operations in North America have in the past been channeled via its
participating interest in Kitchell Corporation of Phoenix, Arizona. HOCHTIEF
will retain its current holding of 35.46 percent of Kitchell's equity unchanged.
Kitchell primarily operates in the traditional construction and general
contracting business in the South Western United States.
For more information, visit Turner's Website at
http://www.turnerconstruction.com.
The statements contained in this release which are not historical facts may be
forward-looking statements with respect to events, the occurrence of which
involve risks and uncertainties, including without limitation, demand and
competition for these and other risks or uncertainties detailed in the Company's
Securities and Exchange Commission filings.
<PAGE> 1
HOCHTIEF AG Commences Tender Offer for The Turner Corporation
Essen, Germany, August 20, 1999 -- HOCHTIEF AG today announced that,
in accordance with its previously announced merger agreement with The Turner
Corporation, HOCHTIEF'S indirect wholly owned subsidiary, Beta Acquisition
Corp., today commenced a tender offer for all the issued and outstanding shares
of Turner Common Stock, including the associated Rights, and all issued and
outstanding shares of Turner's Series C 8 1/2% Convertible Preference Stock and
Series D 8 1/2% Convertible Preference Stock, at a price of $28.625 per share of
Turner Common Stock, $4,770.8333 per share of Series C 8 1/2% Convertible
Preference Stock and $4,293.75 per share of Series D 8 1/2% Convertible
Preference Stock, in each case, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated August 20,
1999, and in the related Letters of Transmittal.
The offer will expire at 12:00 midnight, New York City time, on
Friday, September 17, 1999, unless the Offer is extended. The Offer is
conditioned upon, among other things, (i) there having been validly tendered and
not withdrawn prior to the expiration of the Offer at least the number of shares
of Turner Common Stock, shares of Series C 8 1/2% Convertible Preference Stock
and Series D 8 1/2% Convertible Preference Stock (collectively, the "Turner
Preferred Stock") (determined as if shares of Turner Preferred Stock had been
converted into shares of Turner Common Stock) that, together with the shares
already owned by HOCHTIEF, shall constitute two-thirds of the outstanding shares
of Turner Common Stock on a fully diluted
<PAGE> 2
basis; and (ii) any applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, having expired or been
terminated.
First Chicago Trust Company of New York will act as depositary for
the tender and Innisfree M&A Incorporated will act as the Information Agent.
# # #
Headquartered in New York City, The Turner Corporation, through
Turner Construction Company and other construction subsidiaries, is one of the
nation's leading general contractors, providing a complete range of construction
and program management services to the building market. Special emphasis is
placed on the commercial, retail, education, pharmaceutical, healthcare, sports
and justice sectors.
With more than sixty percent of Turner Corporation's business coming
from repeat clients, Turner is recognized as an industry leader in providing
quality service in diverse markets. The Company has a strong knowledge of the
local markets in which it operates, providing excellent service to key areas
that offer the greatest potential and highest return.
Operating through 41 offices, Turner has construction projects
underway throughout the United States and abroad. During 1998, The Turner
Corporation completed in excess of $4.1 billion in construction.
With its work done valued at DM 12.3 billion last year, HOCHTIEF is
Germany's largest construction firm. Roughly 48 percent of the Group's business
is done outside Germany. HOCHTIEF is increasingly involved not just in planning
and building, but also in financing and operating complex infrastructure and
other projects. As natural complements to its core business segment of
building, HOCHTIEF is continuously expanding its range of services: Airport
Management, Project Development, Software, Environmental Technology and
Facility Management now feature more and more strongly in the framework of its
business.
<PAGE> 3
HOCHTIEF's operations in North America have in the past been
channeled via its participating interest in Kitchell Corporation, of Phoenix,
Arizona. It will retain its current holding of 35.34 percent of Kitchell's
equity unchanged. Kitchell primarily operates in the traditional construction
and general contracting business in the southwestern United States. HOCHTIEF
also runs operations in Western Europe, Eastern Europe, Latin America, Southeast
Asia and Africa.
<PAGE> 1
Exhibit (c)(1)
AGREEMENT AND PLAN OF MERGER, dated as of August 16, 1999
(this "Agreement"), among HOCHTIEF AG, a corporation organized under the laws of
Germany ("Parent"), BETA ACQUISITION CORP., a Delaware corporation and an
indirect wholly owned subsidiary of Parent ("Purchaser"), and THE TURNER
CORPORATION, a Delaware corporation (the "Company").
WHEREAS, the Boards of Directors of Purchaser and the Company
and the Supervisory Board and Management Board of Parent have each determined
that it is in the best interests of their respective stockholders for Parent to
acquire the Company upon the terms and subject to the conditions set forth
herein;
WHEREAS, in furtherance of such acquisition, it is proposed
that Purchaser shall make a cash tender offer (the "Offer") to acquire (i) all
the issued and outstanding shares of common stock, par value $1.00 per share, of
the Company ("Company Common Stock") (including the associated rights (the
"Rights") issued pursuant to the Rights Agreement, dated as of September 21,
1998 (the "Rights Agreement"), between the Company and First Chicago Trust
Company of New York, as rights agent), for $28.625 per share of Company Common
Stock (such amount, or any greater amount per share of Company Common Stock paid
pursuant to the Offer, being the "Per Share Amount") and (ii) all the issued and
outstanding shares of (A) Series C 8 1/2% Convertible Preference Stock, par
value $1.00 per share, of the Company ("Series C Preferred Stock") and (B)
Series D 8 1/2% Convertible Preference Stock, par value $1.00 per share, of the
Company ("Series D Preferred Stock" and, together with the Series C Preferred
Stock being hereinafter collectively referred to as the "Company Preferred
Stock"), for an amount in cash per share of Company Preferred Stock equal to the
product of the Per Share Amount multiplied by the number of shares of Company
Common Stock issuable upon the conversion of such share of Company Preferred
Stock, in each case, net to the seller in cash, upon the terms and subject to
the conditions of this Agreement and the Offer (shares of Company Common Stock
and Company Preferred Stock being hereinafter collectively referred to as
"Shares");
WHEREAS, the Board of Directors of the Company (the "Board")
has unanimously approved the making of the Offer and resolved and agreed to
recommend that holders of Shares accept the Offer and tender their Shares
pursuant to the Offer;
WHEREAS, also in furtherance of such acquisition, the Boards
of Directors of Purchaser and the Company have each approved the merger (the
"Merger") of Purchaser with and into the Company in accordance with the General
Corporation Law of the State of Delaware ("Delaware Law"), following the
consummation of the Offer and upon the terms and subject to the conditions set
forth herein; and
WHEREAS, Parent, Purchaser and certain stockholders of the
Company (the "Stockholders") have entered into Stockholders Agreements, dated as
of the date hereof (the "Stockholders Agreements"), providing that, among other
things, the Stockholders will (i) tender their Shares into the Offer, (ii) vote
their Shares in favor of the Merger, if applicable, in each case
<PAGE> 2
subject to the conditions set forth therein, and (iii) grant to Purchaser an
option to purchase their shares of Company Common Stock at the Per Share Amount
and their shares of Company Preferred Stock at an amount in cash equal to the
product of the Per Share Amount multiplied by the number of shares of Company
Common Stock issuable upon the conversion of such shares of Company Preferred
Stock, in each case subject to the conditions set forth therein;
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, Parent, Purchaser and the Company hereby agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01. The Offer. (a) Provided that this Agreement
shall not have been terminated in accordance with Section 8.01 and none of the
events set forth in Annex A hereto shall have occurred or be continuing,
Purchaser shall commence the Offer as promptly as reasonably practicable after
the date hereof, but in no event later than within five business days of the
initial public announcement of Purchaser's intention to commence the Offer. The
obligation of Purchaser to accept for payment Shares tendered pursuant to the
Offer shall be subject to the condition (the "Minimum Condition") that there
shall have been validly tendered and not withdrawn prior to the expiration of
the Offer at least the number of shares of Company Common Stock and shares of
Company Preferred Stock (determined as if shares of Company Preferred Stock have
been converted into shares of Company Common Stock) that when added to the
Shares already owned by Parent shall constitute two-thirds of the then
outstanding shares of Company Common Stock on a fully diluted basis and also
shall be subject to the satisfaction of each of the other conditions set forth
in Annex A hereto. Purchaser expressly reserves the right to waive any such
condition, 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
no change may be made which decreases the price per Share payable in the Offer,
which reduces the maximum number of Shares to be purchased in the Offer, which
changes the form of consideration paid by Purchaser for the Shares, which
imposes conditions to the Offer in addition to those set forth in Annex A hereto
or which makes any other change in the terms of the Offer that is materially
adverse to the holders of the Shares. Notwithstanding the foregoing, Purchaser
may, without the consent of the Company, (i) extend the Offer beyond the
scheduled expiration date, which shall be 20 business days following the
commencement of the Offer, if, at the scheduled expiration of the Offer, any of
the conditions to Purchaser's obligation to accept for payment, and to pay for,
the Shares, shall not be satisfied or waived, (ii) extend the Offer for any
period required by any rule, regulation or interpretation of the Securities and
Exchange Commission (the "SEC"), or the staff thereof, applicable to the Offer,
or (iii) extend the Offer for an aggregate period of not more than 10 business
days beyond the latest applicable date that would otherwise be permitted under
clause (i) or (ii) of this sentence, if, as of such date, all of the conditions
to Purchaser's obligations to accept for payment, and to pay for, the Shares are
satisfied or waived, but the number of shares of Company Common Stock and
Company
<PAGE> 3
Preferred Stock validly tendered and not withdrawn pursuant to the Offer,
together with the shares of Company Common Stock and Company Preferred Stock
then owned by Parent, equals 80% or more, but less than 90%, of the outstanding
shares of Company Common Stock and 80% or more, but less than 90%, of each
series of Company Preferred Stock, in each case, on a fully diluted basis. If,
on the initial scheduled expiration date of the Offer, the waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), shall not have expired or been terminated, then Purchaser shall extend
the Offer from time to time until five business days after the expiration or
termination of the applicable waiting period under the HSR Act, subject to the
right of Parent, Purchaser or the Company to terminate this Agreement pursuant
to the terms hereof. The price per Share payable in the Offer shall, subject to
applicable withholding of taxes, be net to the seller in cash, upon the terms
and subject to the conditions of the Offer. Purchaser shall pay, as promptly as
practicable after expiration of the Offer and acceptance for payment of the
tendered Shares, for all Shares validly tendered and not withdrawn.
Notwithstanding the immediately preceding sentence and subject to the applicable
rules of the SEC and the terms and conditions of the Offer, the Purchaser
expressly reserves the right 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 Securities Exchange Act of 1934, as
amended (the "Exchange Act")
(b) As promptly as reasonably practicable on the date of
commencement of the Offer, Purchaser shall file with the SEC a Tender Offer
Statement on Schedule 14D-1 (together with all amendments and supplements
thereto, the "Schedule 14D-1") with respect to the Offer. The Schedule 14D-1
shall contain or shall incorporate by reference an offer to purchase (the "Offer
to Purchase") and forms of the related letter of transmittal and any related
summary advertisement (the Schedule 14D-1, the Offer to Purchase and such other
documents, together with all supplements and amendments thereto, being referred
to herein collectively as the "Offer Documents"). Parent, Purchaser and the
Company agree to correct promptly any information provided by any of them for
use in the Offer Documents that shall have become false or misleading, and
Parent and Purchaser further agree to take all steps necessary to cause the
Schedule 14D-1, as so corrected, to be filed with the SEC, and the other Offer
Documents, as so corrected, to be disseminated to holders of Shares, in each
case as and to the extent required by applicable federal securities laws.
(c) Promptly following Purchaser's acceptance for payment of
the Shares, Parent shall provide to Purchaser, or cause Purchaser to be
provided, with sufficient funds to pay in cash the purchase price for such
Shares.
SECTION 1.02. Company Action. (a) The Company hereby approves
of and consents to the Offer and represents that (i) the Board, at a meeting
duly called and held on August 13, 1999, has unanimously (A) determined that
this Agreement and the transactions contemplated hereby, including each of the
Offer and the Merger, and the transactions contemplated by the Stockholders
Agreements (collectively, the "Transactions"), are fair to and in the best
interests of the holders of Shares, (B) approved, adopted and declared advisable
this Agreement and the Transactions (such approval and adoption having been made
in accordance with Delaware Law, including, without limitation, Section 203
thereof) and (C) recommended
<PAGE> 4
that the holders of Shares accept the Offer and tender the Shares pursuant to
the Offer, and approve and adopt this Agreement, (ii) a majority of
Disinterested Directors (as such term is defined in paragraph E(5) of Article 6
of the Company's certificate of incorporation) has approved, adopted and
declared advisable this Agreement and the Transactions in a manner sufficient to
render Article 6 of the Company's certificate of incorporation inapplicable to
the Transactions and (iii) PaineWebber Incorporated has delivered to the Board a
written opinion that the consideration to be received by the holders of Shares
pursuant to each of the Offer and the Merger is fair to the holders of Shares
from a financial point of view. Except as required by the fiduciary duties of
the Board under applicable law based upon advice of outside legal counsel, the
Company hereby consents to the inclusion in the Offer Documents of the
recommendation of the Board described in the immediately preceding sentence, and
the Company shall not withdraw or modify such recommendation in any manner
adverse to Purchaser or Parent. The Company has been advised by its directors
and executive officers that they intend either to tender all Shares beneficially
owned by them to Purchaser pursuant to the Offer, or to vote such Shares in
favor of the approval and adoption by the stockholders of the Company of this
Agreement; provided that any directors and officers who would incur liability
under Section 16(b) of the Exchange Act as a result thereof shall not be
required to tender such Shares to the extent necessary to avoid such liability.
(b) As promptly as reasonably practicable on the date of
commencement of the Offer, the Company shall file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto, the "Schedule 14D-9") containing, except as
required by the fiduciary duties of the Board under applicable law based upon
advice of outside legal counsel, the recommendation of the Board described in
Section 1.02(a), and shall disseminate the Schedule 14D-9 to the extent required
by Rule 14d-9 promulgated under the Exchange Act, and any other applicable
federal securities laws. The Company, Parent and Purchaser agree to correct
promptly any information provided by any of them for use in the Schedule 14D-9
which shall have become false or misleading, and the Company further agrees to
take all steps necessary to cause the Schedule 14D-9, as so corrected, to be
filed with the SEC and disseminated to holders of Shares, in each case as and to
the extent required by applicable federal securities laws.
(c) The Company shall promptly furnish Purchaser with mailing
labels containing the names and addresses of all record holders of Shares and
with security position listings of Shares held in stock depositories, each as of
a recent date, together with all other available listings and computer files
containing names, addresses and security position listings of record holders and
beneficial owners of Shares. The Company shall promptly furnish Purchaser with
such additional information, including, without limitation, updated listings and
computer files of stockholders, mailing labels and security position listings,
and such other assistance in disseminating the Offer Documents to holders of the
Shares as Parent or Purchaser or their agents may reasonably request. Subject to
the requirements of applicable law, and except for such steps as are necessary
to disseminate the Offer Documents and any other documents necessary to
consummate the Offer or the Merger, Parent and Purchaser shall hold in
confidence the information contained in such labels, listings and files, shall
use such information only in connection with the Offer and the Merger, and, if
this Agreement shall be terminated in
<PAGE> 5
accordance with Section 8.01, shall deliver to the Company all copies of such
information then in their possession.
ARTICLE II
THE MERGER
SECTION 2.01. The Merger. Upon the terms and subject to the
conditions set forth in Article VII, and in accordance with Delaware Law, at the
Effective Time (as hereinafter defined) Purchaser shall be merged with and into
the Company. As a result of the Merger, the separate corporate existence of
Purchaser shall cease and the Company shall continue as the surviving
corporation of the Merger (the "Surviving Corporation").
SECTION 2.02. Effective Time; Closing. As promptly as
practicable after the satisfaction or, if permissible, waiver of the conditions
set forth in Article VII, the parties hereto shall cause the Merger to be
consummated by filing this Agreement or a certificate of merger or certificate
of ownership and merger (in either case, the "Certificate of Merger") with the
Secretary of State of the State of Delaware, in such form as is required by, and
executed in accordance with the relevant provisions of, Delaware Law (the date
and time of such filing being the "Effective Time").
SECTION 2.03. Effect of the Merger. At the Effective Time, the
effect of the Merger shall be as provided in the applicable provisions of
Delaware Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the property, rights, privileges, powers and
franchises of the Company and Purchaser shall vest in the Surviving Corporation,
and all debts, liabilities, obligations, restrictions, disabilities and duties
of the Company and Purchaser shall become the debts, liabilities, obligations,
restrictions, disabilities and duties of the Surviving Corporation.
SECTION 2.04. Certificate of Incorporation; By-laws. (a) At
the Effective Time, the certificate of incorporation of Purchaser, as in effect
immediately prior to the Effective Time, shall be the certificate of
incorporation of the Surviving Corporation until thereafter amended as provided
by law and such certificate of incorporation; provided, however, that, at the
Effective Time, Article I of the certificate of incorporation of the Surviving
Corporation shall be amended to read as follows: "The name of the corporation is
The Turner Corporation."
(b) Unless otherwise determined by Parent prior to the
Effective Time and subject to Section 6.07, the by-laws of Purchaser, as in
effect immediately prior to the Effective Time, shall be the by-laws of the
Surviving Corporation until thereafter amended as provided by law, the
certificate of incorporation of the Surviving Corporation and such by-laws.
SECTION 2.05. Directors and Officers. The initial directors of
the Surviving Corporation shall be two directors designated by the Board prior
to the Effective Time, three directors designated by Purchaser (who may be
employees of Parent or an Affiliate) and four
<PAGE> 6
independent directors, each to hold office in accordance with the certificate of
incorporation and by-laws of the Surviving Corporation, and the officers of the
Company immediately prior to the Effective Time shall be the initial officers of
the Surviving Corporation, in each case until their respective successors are
duly elected or appointed and qualified or until their earlier death,
resignation or removal.
SECTION 2.06. Conversion of Securities. At the Effective Time,
by virtue of the Merger and without any action on the part of Purchaser, the
Company or the holders of any of the following securities:
(a) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than any shares of
Company Common Stock to be canceled pursuant to Section 2.06(c) and any
Dissenting Shares (as hereinafter defined)) shall be canceled and shall
be converted automatically into the right to receive an amount equal to
the Per Share Amount (the "Common Stock Merger Consideration") payable,
without interest, to the holder of such share of Company Common Stock,
upon surrender, in the manner provided in Section 2.09, of the
certificate that formerly evidenced such share of Company Common Stock;
(b) Each share of Company Preferred Stock issued and
outstanding immediately prior to the Effective Time (other than any
shares of Company Preferred Stock to be canceled pursuant to Section
2.06(c) and any Dissenting Shares) shall be canceled and shall be
converted automatically into the right to receive an amount in cash
equal to the product of the Common Stock Merger Consideration
multiplied by the number of shares of Company Common Stock into which
such share of Company Preferred Stock shall be convertible immediately
prior to the Effective Time (the "Preferred Stock Merger
Consideration"), payable, without interest, to the holder of such share
of Company Preferred Stock, upon surrender, in the manner provided in
Section 2.09, of the certificate that formerly evidenced such share of
Company Preferred Stock;
(c) Each Share held in the treasury of the Company and each
Share owned by Purchaser, Parent or any direct or indirect wholly owned
subsidiary of Parent or of the Company immediately prior to the
Effective Time shall be canceled without any conversion thereof and no
payment or distribution shall be made with respect thereto; and
(d) Each share of common stock, par value $.01 per share, of
Purchaser issued and outstanding immediately prior to the Effective
Time shall be converted into and exchanged for one validly issued,
fully paid and nonassessable share of common stock, par value $.01 per
share, of the Surviving Corporation.
SECTION 2.07. Employee and Director Stock Options. (a) The
Company shall, immediately prior to the Effective Time, (i) terminate the
Company 1998 Stock Incentive Plan, the Company 1997 Non-Qualified Stock Option
Plan and the Company's 1992 Stock Plan and any other plan, program or
arrangement providing for the issuance, grant or purchase of any other interest
in respect of the capital stock of the Company or any of its Subsidiaries
<PAGE> 7
(collectively, the "Company Stock Plans") without prejudice to the holders of
Options and Units (as defined in Section 2.07(b) and (c) below, respectively),
and (ii) amend the provisions of any other Company Plans, or related trust or
funding vehicle, providing for the issuance, holding, transfer or grant of any
Shares, or any interest in respect of any Shares, to provide no continuing
rights to acquire, hold, transfer, or grant any Shares or any interest in any
Shares.
(b) Parent and the Company shall take all action necessary to
provide that each option (an "Option") to purchase shares of Company Common
Stock which is an "incentive stock option" (within the meaning of Section 422(b)
of the Code) (an "ISO") shall, for the purpose of tendering the Shares
underlying such ISO in the Offer, become fully vested and exercisable as soon as
practicable following the date hereof (whether or not previously vested or
exercisable).
(c) Parent and the Company shall take all action necessary to
(i) provide that each Option and each stock unit or other right to receive
Shares (a "Unit") pursuant to the Company Stock Plans or any stock option or
stock unit agreement or other arrangement (including the right of certain
directors of the Company to receive Shares by reason of termination of the
Company's Directors' Retirement Plan and the restricted stock units granted to
Thomas C. Leppert on June 9, 1999) to which the Company is a party which is
outstanding immediately prior to the acceptance of the Shares by the Purchaser
pursuant to the Offer, shall become fully exercisable and vested, whether or not
previously exercisable or vested, immediately prior to such acceptance and (ii)
provide that, with respect to each such Option and Unit, the holder thereof
shall be entitled to either, at the election of Purchaser, (x) receive from the
Company, at the time payment is made for the Shares tendered pursuant to the
Offer, an amount in cash equal to the Cash-Out Value or (y) exercise any Option
or Unit prior to the time payment is made for the Shares tendered pursuant to
the Offer; provided, however, that any Option or Unit that is not cashed out or
exercised shall terminate as of the Effective Time; and provided, further that
Purchaser may elect clause (y) above only if it provides a mechanism therefor
which the Company in its good faith judgment deems to not prejudice the holders
of Options with respect to economics or the risk of holding shares. For purposes
of this Section 2.07, the "Cash-Out Value" shall be: (i) with respect to each
such Option, an amount of cash in cancellation of such Option equal to the
difference between the Common Stock Merger Consideration and the per share
exercise price of such Option, multiplied by the number of shares of Company
Common Stock to which such Option remains unexercised; and (ii) with respect to
each such Unit, an amount of cash in cancellation of such Unit equal to the
Common Stock Merger Consideration (less, in the case of both Options and Units,
any income or employment tax withholding required under the Code (as hereinafter
defined) or any provision of state or local law). Prior to the acceptance of the
Shares by the Purchaser pursuant to the Offer, the Company shall make all
amendments to the Company Stock Plans and related option agreements necessary,
and take all actions necessary, to effect the transactions contemplated by this
Section 2.07 and Annex B. The Company and Parent shall cooperate, and take all
reasonable steps to share in advance information, to effect the transactions
contemplated by this Section 2.07.
SECTION 2.08. Dissenting Shares. (a) Notwithstanding any
provision of this
<PAGE> 8
Agreement to the contrary, Shares that are outstanding immediately prior to the
Effective Time and that are held by stockholders who shall have neither voted in
favor of the Merger nor consented thereto in writing and who shall have demanded
properly in writing appraisal for such Shares in accordance with Section 262 of
Delaware Law (collectively, the "Dissenting Shares") shall not be converted
into, or represent the right to receive, either the Common Stock Merger
Consideration or the Preferred Stock Merger Consideration. Such stockholders
shall be entitled to receive payment of the appraised value of such Shares held
by them in accordance with the provisions of such Section 262, except that all
Dissenting Shares held by stockholders who shall have failed to perfect or who
effectively shall have withdrawn or lost their rights to appraisal of such
Shares under such Section 262 shall thereupon be deemed to have been converted
into, and to have become exchangeable for, as of the Effective Time, the right
to receive the Common Stock Merger Consideration or the Preferred Stock Merger
Consideration, as applicable, without any interest thereon, upon surrender, in
the manner provided in Section 2.09, of the certificate or certificates that
formerly evidenced such Shares.
(b) The Company shall give Parent (i) prompt notice of any
demands for appraisal received by the Company, withdrawals of such demands, and
any other instruments served pursuant to Delaware Law and received by the
Company and (ii) the opportunity to direct all negotiations and proceedings with
respect to demands for appraisal under Delaware Law. The Company shall not,
except with the prior written consent of Parent, make any payment with respect
to any demands for appraisal or offer to settle or settle any such demands.
SECTION 2.09. Surrender of Shares; Stock Transfer Books. (a)
Prior to the Effective Time, Purchaser shall designate a bank or trust company,
which shall be reasonably satisfactory to the Company, to act as agent (the
"Paying Agent") for the holders of Shares in connection with the Merger to
receive the funds to which holders of Shares shall become entitled pursuant to
Section 2.06(a) or 2.06(b). As of the Effective Time, Purchaser shall deposit,
or shall cause to be deposited, with the Paying Agent cash in the aggregate
amount required to be paid as the Common Stock Merger Consideration and the
Preferred Stock Merger Consideration. Such funds shall be invested by the Paying
Agent as directed by the Surviving Corporation.
(b) Promptly after the Effective Time, the Surviving
Corporation shall cause to be mailed to each person who was, at the Effective
Time, a holder of record of Shares entitled to receive the Common Stock Merger
Consideration pursuant to Section 2.06(a) or a holder of record of Shares
entitled to receive the Preferred Stock Merger Consideration pursuant to Section
2.06(b) a form of letter of transmittal (which shall specify that delivery shall
be effected, and risk of loss and title to the certificates evidencing such
Shares (the "Certificates") shall pass, only upon proper delivery of the
Certificates to the Paying Agent) and instructions for use in effecting the
surrender of the Certificates pursuant to such letter of transmittal. Upon
surrender to the Paying Agent of a Certificate, together with such letter of
transmittal, duly completed and validly executed in accordance with the
instructions thereto, and such other documents as may be required pursuant to
such instructions, the holder of such Certificate shall be entitled to receive
in exchange therefor the Common Stock Merger Consideration for each share of
Company Common Stock formerly evidenced by such Certificate or the Preferred
Stock Merger Consideration for each share of Company Preferred Stock formerly
evidenced by such
<PAGE> 9
Certificate, as applicable, and such Certificate shall then be canceled. No
interest shall accrue or be paid on the Common Stock Merger Consideration or
Preferred Stock Merger Consideration, payable upon the surrender of any
Certificate for the benefit of the holder of such Certificate. If the payment
equal to the Common Stock Merger Consideration or Preferred Stock Merger
Consideration, as applicable, is to be made to a person other than the person in
whose name the surrendered certificate formerly evidencing Shares is registered
on the stock transfer books of the Company, it shall be a condition of payment
that the certificate so surrendered shall be endorsed properly or otherwise be
in proper form for transfer and that the person requesting such payment shall
have paid all transfer and other taxes required by reason of the payment of the
Common Stock Merger Consideration or Preferred Stock Merger Consideration, as
applicable, to a person other than the registered holder of the certificate
surrendered, or shall have established to the satisfaction of Purchaser that
such taxes either have been paid or are not applicable.
(c) At any time following the sixth month after the Effective
Time, the Surviving Corporation shall be entitled to require the Paying Agent to
deliver to it any funds which had been made available to the Paying Agent and
not disbursed to holders of Shares (including, without limitation, all interest
and other income received by the Paying Agent in respect of all funds made
available to it), and, thereafter, such holders shall be entitled to look to the
Surviving Corporation (subject to abandoned property, escheat and other similar
laws) only as general creditors thereof with respect to any Common Stock Merger
Consideration or Preferred Stock Merger Consideration that may be payable upon
due surrender of the Certificates held by them. Notwithstanding the foregoing,
neither the Surviving Corporation nor the Paying Agent shall be liable to any
holder of a Share for any Common Stock Merger Consideration or Preferred Stock
Merger Consideration, as applicable, delivered in respect of such Share to a
public official pursuant to any abandoned property, escheat or other similar
law.
(d) At the close of business on the day of the Effective Time,
the stock transfer books of the Company shall be closed and thereafter there
shall be no further registration of transfers of Shares on the records of the
Company. From and after the Effective Time, the holders of Shares outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such Shares except as otherwise provided herein or by applicable law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As an inducement to Parent and Purchaser to enter into this
Agreement, except as set forth in the disclosure schedule delivered by the
Company to Parent on the date hereof (the "Disclosure Schedule"), the Company
hereby represents and warrants to Parent and Purchaser as follows (it being
understood that information set forth in one section of the Disclosure Schedule
shall be deemed to be disclosed for purposes of all relevant sections of the
Disclosure Schedule except to the extent that the information set forth therein
could not be reasonably determined to apply to such other sections of the
Disclosure Schedule):
<PAGE> 10
SECTION 3.01. Organization and Qualification; Subsidiaries.
(a) Each of the Company and each subsidiary of the Company (each, a
"Subsidiary") is a corporation or other legal entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or formation and has the requisite power and authority and all
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as it is now being conducted, except where the failure to
be so organized, existing or in good standing or to have such power, authority
and governmental approvals would not prevent or materially delay consummation of
the Offer or the Merger or otherwise prevent or materially delay the Company
from performing its obligations under this Agreement and would not have a
Material Adverse Effect (as defined below). The Company and each Subsidiary is
duly qualified or licensed as a foreign corporation to do business, and is in
good standing, in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its business makes such qualification
or licensing necessary, except for such failures to be so qualified or licensed
and in good standing that would not have a Material Adverse Effect. The term
"Material Adverse Effect" means any circumstance, change or effect that,
individually or when taken together with all other circumstances, changes and
effects, is or is reasonably likely to be materially adverse to the business,
operations, condition (financial or otherwise), assets or liabilities
(including, without limitation, contingent liabilities) of the Company and the
Subsidiaries taken as a whole, except any such effect resulting from or arising
in connection with (A) changes or conditions (including changes in generally
accepted accounting principles ("GAAP"), law, regulation or judicial or other
interpretation) affecting the general building construction industry generally
or the construction management industry generally, or (B) changes in economic or
financial market conditions generally.
(b) A true and complete list of all the Subsidiaries, together
with the jurisdiction of incorporation of each Subsidiary and the percentage of
the outstanding capital stock of each Subsidiary owned by the Company and each
other Subsidiary, is set forth in Section 3.01(a) of the Disclosure Schedule,
which has been delivered prior to the execution and delivery of this Agreement
by the Company to Parent and Purchaser. Except as disclosed in Section 3.01(a)
of the Disclosure Schedule, the Company does not directly or indirectly own any
equity or similar interest in, or any interest convertible into or exchangeable
or exercisable for any equity or similar interest in, any corporation,
partnership, joint venture or other business association or entity.
SECTION 3.02. Certificate of Incorporation and By-laws. The
Company has heretofore furnished to Parent a complete and correct copy of the
certificate of incorporation and the by-laws or equivalent organizational
documents, each as amended to date, of the Company and Turner Construction
Company, a New York corporation and wholly owned subsidiary of the Company. Such
certificates of incorporation, by-laws or equivalent organizational documents
are in full force and effect. Neither the Company nor any Subsidiary is in
violation of any of the provisions of its certificate of incorporation, by-laws
or equivalent organizational documents.
SECTION 3.03. Capitalization. The authorized capital stock of
the Company consists of (i) 20,000,000 shares of Company Common Stock and
2,000,000 shares of Company Preferred Stock, of which 850,000 shares have been
designated Series B ESOP Convertible
<PAGE> 11
Preferred Stock, par value $1.00 per share (the "Series B Preferred Stock"),
9,000 shares have been designated Series C Preferred Stock, 6,000 shares have
been designated Series D Preferred Stock, 9,000 shares have been designated
Series E 8 1/2% Convertible Preference Stock ("Series E Preferred Stock") and
200,000 shares have been designated Series F Preferred Participating Preference
Stock ("Series F Preferred Stock"). As of August 13, 1999, (i) 9,181,456 shares
of Company Common Stock, 9,000 shares of Series C Preferred Stock and 6,000
shares of Series D Preferred Stock are issued and outstanding, all of which are
validly issued, fully paid and nonassessable, and no shares of Series B
Preferred Stock, Series E Preferred Stock or Series F Preferred Stock are issued
and outstanding, (ii) 558,390 shares of Company Common Stock and no shares of
Company Preferred Stock are held in the treasury of the Company, (iii) no shares
of Company Common Stock and no shares of Company Preferred Stock are held by
Subsidiaries, (iv) 4,571,875 shares of Company Common Stock are reserved for
future issuance pursuant to (A) employee stock options or stock incentive rights
granted pursuant to the Company Stock Plans and (B) conversion rights with
respect to Company Preferred Stock and (v) 200,000 shares of Series F Preferred
Stock are reserved for issuance pursuant to the Rights Agreement. Except
as set forth in this Section 3.03, and except for the Stockholders Agreements,
the Agreement Regarding Security Holder's Rights, Obligations and Options, dated
June 20, 1992, between the Company and Karl Steiner Holding AG (the "Steiner
Agreement"), and the Rights, there are no options, warrants or other rights,
agreements, arrangements or commitments of any character issued by the Company
or any Subsidiary or to which the Company or any Subsidiary is a party, or to
the knowledge of the Company issued by any other person or to which any other
person is a party, relating to the issued or unissued capital stock of the
Company or any Subsidiary or obligating the Company or any Subsidiary to issue
or sell any shares of capital stock of, or other equity interests in, the
Company or any Subsidiary. All Shares subject to issuance as aforesaid, upon
issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, will be duly authorized, validly issued, fully paid and
nonassessable. Except as contained in the Steiner Agreement, there are no
outstanding contractual obligations of the Company or any Subsidiary to
repurchase, redeem or otherwise acquire any Shares or any capital stock of any
Subsidiary or to provide funds to, or make any investment (in the form of a
loan, capital contribution or otherwise) in, any Subsidiary or any other person.
Each outstanding share of capital stock of each Subsidiary is duly authorized,
validly issued, fully paid and nonassessable, and each such share is owned by
the Company or a Subsidiary free and clear of all security interests, liens,
claims, pledges, options, rights of first refusal, agreements, limitations on
the Company's or any Subsidiary's voting rights, charges and other encumbrances
of any nature whatsoever.
SECTION 3.04. Authority Relative to this Agreement. The
Company has all necessary power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
Transactions. The execution and delivery of this Agreement by the Company, the
performance by the Company of its obligations hereunder and the consummation by
the Company of the Transactions have been duly and validly authorized by all
necessary corporate action and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the
Transactions (other than, with respect to the Merger, the approval and adoption
of this Agreement by the holders of two-thirds of the voting power of the
then-outstanding Shares, if and to the extent required by applicable
<PAGE> 12
law, and the filing and recordation of appropriate merger documents as required
by Delaware Law). This Agreement has been duly executed and delivered by the
Company and, assuming the due authorization, execution and delivery by Parent
and Purchaser, constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms. The restrictions
on business combinations contained in Section 203 of Delaware Law and in Article
Six of the certificate of incorporation of the Company, as amended, have been
satisfied with respect to the Transactions.
SECTION 3.05. No Conflict; Required Filings and Consents. (a)
The execution and delivery of this Agreement by the Company do not, and the
performance of this Agreement by the Company and the consummation by the Company
of the Transactions will not, (i) conflict with or violate the certificate of
incorporation or by-laws or equivalent organizational documents of the Company
or any Subsidiary, (ii) assuming satisfaction of the requirements set forth in
Section 3.05(b) below, conflict with or violate any foreign or domestic statute,
law, ordinance, regulation, rule, code, executive order, injunction, judgment,
decree or other order ("Law") applicable to the Company or any Subsidiary or by
which any property or asset of the Company or any Subsidiary is bound or
affected, or (iii) result in any breach of or constitute a default (or an event
which, with notice or lapse of time or both, would become a default) under, or
give to others any right of termination, amendment, acceleration or cancellation
of, or result in the creation of a lien or other encumbrance on any property or
asset of the Company or any Subsidiary pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation, except, with respect to clauses (ii) and (iii), for
any such conflicts, violations, breaches, defaults or other occurrences which
would not prevent or materially delay consummation of the Offer or the Merger,
or otherwise prevent or materially delay the Company from performing its
obligations under this Agreement, and would not have a Material Adverse Effect.
(b) The execution and delivery of this Agreement by the
Company do not, and the performance of this Agreement by the Company and the
consummation by the Company of the Transactions will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
United States federal, state, county or local or any foreign government,
governmental, regulatory or administrative authority, agency, instrumentality or
commission or any court, tribunal, or judicial or arbitral body (hereinafter, a
"Governmental Authority"), except (i) for applicable requirements, if any, of
the Exchange Act, state securities or "blue sky" laws ("Blue Sky Laws") and
state takeover laws, the pre-merger notification requirements of the HSR Act,
and filing and recordation of appropriate merger documents as required by
Delaware Law, and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not
prevent or materially delay consummation of the Offer or the Merger, or
otherwise prevent or materially delay the Company from performing its
obligations under this Agreement, and would not have a Material Adverse Effect.
SECTION 3.06. Permits; Compliance. Each of the Company and the
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Authority necessary for each of the
Company or the Subsidiaries to own, lease
<PAGE> 13
and operate its properties or to carry on its business as it is now being
conducted (the "Permits"), except where the failure to have any of the Permits
would not have a Material Adverse Effect. As of the date hereof, no suspension
or cancellation of any of the Permits is pending or, to the knowledge of the
Company, threatened, except where the suspension or cancellation of any of the
Permits would not have a Material Adverse Effect. Neither the Company nor any
Subsidiary is in conflict with, or in default, breach or violation of, (i) any
Law applicable to the Company or any Subsidiary or by which any property or
asset of the Company or any Subsidiary is bound or affected, or (ii) any note,
bond, mortgage, indenture, contract, agreement, lease, license, Permit,
franchise or other instrument or obligation to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary or any property
or asset of the Company or any Subsidiary is bound or affected, except for any
such conflicts, defaults, breaches or violations that would not have a Material
Adverse Effect.
SECTION 3.07. SEC Filings; Financial Statements. (a) The
Company has filed all forms, reports and documents required to be filed by it
with the SEC since December 31, 1996 and has heretofore delivered to Parent, in
the form filed with the SEC, (i) its Annual Reports on Form 10-K for the fiscal
years ended December 31, 1998, 1997, and 1996, respectively, (ii) its Quarterly
Reports on Form 10-Q for the period ended March 31, 1999, (iii) all proxy
statements relating to the Company's meetings of stockholders (whether annual or
special) held since December 31, 1996 and (iv) all other forms, reports and
other registration statements (other than Quarterly Reports on Form 10-Q not
referred to in clause (ii) above) filed by the Company with the SEC since
December 31, 1996 (the forms, reports and other documents referred to in clauses
(i), (ii), (iii) and (iv) above being, collectively, the "SEC Reports"). The SEC
Reports (i) were prepared in accordance with the requirements of the Securities
Act of 1933, as amended (the "Securities Act"), or the Exchange Act, as the case
may be, and the rules and regulations promulgated thereunder, and (ii) did not,
at the time they were filed, or, if amended, as of the date of such amendment,
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading. No Subsidiary is required to file any form, report or other document
with the SEC.
(b) Each of the consolidated financial statements (including,
in each case, any notes thereto) contained in the SEC Reports was prepared in
accordance with GAAP applied on a consistent basis throughout the periods
indicated (except as may be indicated in the notes thereto) and each fairly
presents, in all material respects, the consolidated financial position, results
of operations and cash flows of the Company and its consolidated Subsidiaries as
at the respective dates thereof and for the respective periods indicated therein
except as otherwise noted therein (subject, in the case of unaudited statements,
to normal and recurring year-end adjustments which would not have had, and would
not have, a Material Adverse Effect).
(c) Except as and to the extent set forth on the consolidated
balance sheet of the Company and the consolidated Subsidiaries as at December
31, 1998, including the notes thereto (the "1998 Balance Sheet"), neither the
Company nor any Subsidiary has any liability or obligation of any nature
(whether accrued, absolute, contingent or otherwise) which would be required to
be reflected on a balance sheet, or in the notes thereto, prepared in accordance
with
<PAGE> 14
GAAP, except for liabilities and obligations (i) that in the aggregate would not
have a Material Adverse Effect or (ii) incurred in the ordinary course of
business consistent with past practice since December 31, 1998.
(d) The Company has heretofore furnished to Parent complete
and correct copies of all amendments and modifications that have not been filed
by the Company with the SEC to all agreements, documents and other instruments
that previously had been filed by the Company with the SEC and are currently in
effect.
SECTION 3.08. Absence of Certain Changes or Events. Since
December 31, 1998, except as set forth in Section 3.08 of the Disclosure
Schedule, or as expressly contemplated by this Agreement, or specifically
disclosed in any SEC Report filed since December 31, 1998 and prior to the date
of this Agreement, (a) the Company and the Subsidiaries have conducted their
businesses only in the ordinary course and in a manner consistent with past
practice, (b) there has not been any Material Adverse Effect, and (c) none of
the Company or any Subsidiary has taken any action that, if taken after the date
of this Agreement, would constitute a breach of any of the covenants set forth
in Section 5.01.
SECTION 3.09. Absence of Litigation. Except as specifically
disclosed in the SEC Reports filed prior to the date of this Agreement, as of
the date hereof, there is no litigation, suit, claim, action, proceeding or
investigation (an "Action") pending or, to the knowledge of the Company,
threatened against the Company or any Subsidiary, or any property or asset of
the Company or any Subsidiary, before any court or arbitrator, domestic or
foreign, or Governmental Authority that (i) would have a Material Adverse Effect
(after giving effect to insurance payments in respect of such Action) or (ii)
seeks to delay or prevent the consummation of any Transaction. Neither the
Company nor any Subsidiary nor any property or asset of the Company or any
Subsidiary is subject to any continuing order of, consent decree, settlement
agreement or similar written agreement with, or, to the knowledge of the
Company, continuing investigation by, any Governmental Authority, or any order,
writ, judgment, injunction, decree, determination or award of any Governmental
Authority that would have a Material Adverse Effect.
SECTION 3.10. Employee Benefit Plans. (a) Section 3.10 of the
Disclosure Schedule contains a true and complete list of (i) all compensation
and benefit plans (including, without limitation, each "employee benefit plan"
within the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")), all bonus, stock option, stock purchase,
restricted stock, incentive, deferred compensation, retiree medical or life
insurance, supplemental retirement, severance or other compensation or benefit
plans, programs or arrangements, and all employment, termination, severance or
other contracts or agreements, in each case, to which the Company or any
Subsidiary is a party, with respect to which the Company or any Subsidiary has
any obligation or which are maintained, contributed to or sponsored by the
Company or any Subsidiary for the benefit of any current or former employee,
officer or director of the Company or any Subsidiary and (ii) each employee
benefit plan for which the Company or any Subsidiary could incur liability under
Section 4069 or 4212 of ERISA (but in the case of each of (i) and (ii),
excluding any plan, program, arrangement, contract or agreement that is not
individually material or is primarily subject to the laws of any
<PAGE> 15
jurisdiction outside of the United States (or both)) (collectively, the "Company
Plans"). Each Company Plan is in writing and the Company has previously
furnished Parent with or made available to Parent a true and complete copy of
each Company Plan and a true and complete copy of (i) each trust or other
funding arrangement, (ii) each summary plan description and summary of material
modifications, (iii) the Internal Revenue Service ("IRS") Form 5500, filed with
respect to the three most recent plan years (iv) the most recently received IRS
determination letter for each such Company Plan, and (v) the actuarial report
and financial statement prepared in connection with each such Company Plan with
respect to the most recent plan year.
(b) None of the Company Plans is a multiemployer plan, within
the meaning of Section 3(37) or 4001(a)(3) of ERISA (a "Multiemployer Plan"), or
a single employer pension plan, within the meaning of Section 4001(a)(15) of
ERISA, for which the Company or any Subsidiary could incur liability under
Section 4063 or 4064 of ERISA (a "Multiple Employer Plan"). Other than as
specifically disclosed in Section 3.10(b)(ii) of the Disclosure Schedule, no
payment or benefit made to an employee of the Company under any Company Plan or
otherwise will constitute an excess parachute payment under Section 280G of the
Code or be subject to an excise tax under Section 4999 of the Code.
(c) Each Company Plan that is intended to be qualified under
Section 401(a) of the Code has received a favorable determination letter from
the IRS within the applicable remedial amendment period under Section 401(b) of
the Code that such Company Plan is so qualified, and, to the knowledge of the
Company, no fact or event has occurred since the date of any such determination
letter from the IRS that could cause such Company Plan no longer to be
qualified. Each trust maintained or contributed to by the Company or any
Subsidiary that is intended to be qualified as a voluntary employees'
beneficiary association exempt from federal income taxation under Sections
501(a) and 501(c)(9) of the Code has received a favorable determination letter
from the IRS that it is so qualified and so exempt, and, to the knowledge of the
Company, no fact or event has occurred since the date of such determination by
the IRS that could cause such trust no longer to be so qualified and so exempt.
(d) (i) The Company has not incurred any liability for any
prohibited transaction (within the meaning of Section 406 of ERISA or Section
4975 of the Code) with respect to any Company Plan; and (ii) none of the
Company, any Subsidiary or any ERISA Affiliate is currently liable or has
previously incurred any liability for any tax or penalty arising under Section
4971, 4972, 4976, 4979, 4979A, 4980, 4980B or 4989D of the Code or Section
502(c) or 4204 of ERISA, and no fact or event exists which is reasonably likely
to result in any such liability. Each loan, guarantee or other indebtedness
("ESOP Indebtedness") by the Company or any Subsidiary or any Company Plan which
is an "employee stock ownership plan" (within the meaning of Section 4975(e)(7)
of the Code) incurred or entered into in connection with the purchase or
refinance of the prior purchase of "qualifying employer securities" (within the
meaning of Section 4975(e)(8) of the Code) has been repaid in full. None of the
Company, any Subsidiary or any ERISA Affiliate has incurred any liability under,
arising out of or by operation of Title IV of ERISA (other than liability for
premiums to the Pension Benefit Guaranty Corporation arising in the ordinary
course), including, without limitation, any liability in connection with (x) the
termination or reorganization of any employee pension benefit plan
<PAGE> 16
subject to Title IV of ERISA or (y) the withdrawal from any Multiemployer Plan
or Multiple Employer Plan, and no fact or event exists which is reasonably
likely to result in any such liability under (x) or (y) above. No asset of the
Company or any Subsidiary is the subject of any lien arising under Section
302(f) of ERISA or Section 412(n) of the Code; neither the Company nor any
Subsidiary has been required to post any security under Section 307 of ERISA or
Section 401(a)(29) of the Code; and no fact or event exists which is reasonably
likely to result in any such lien or requirement to post any such security.
(e) Each Company Plan is now and has been operated in all
respects in accordance with the requirements of all applicable laws, including,
without limitation, ERISA and the Code, and the Company and each Subsidiary has
performed all obligations required to be performed by them under, are not in any
respect in default under or in violation of, and have no knowledge of any
default or violation by any party to, any Company Plan. No Company Plan has
incurred an "accumulated funding deficiency" (within the meaning of Section 302
of ERISA or Section 412 of the Code), whether or not waived.
(f) The Company and the Subsidiaries have not incurred any
liability under the Worker Adjustment and Retraining Notification Act and the
regulations promulgated thereunder and all similar state and local
"plant-closing" laws, and do not reasonably expect to incur any such liability
as a result of actions taken or not taken prior to the Effective Time.
(g) The Company does not maintain any compensation and/or
benefit plan that (i) is subject to the laws of any jurisdiction outside of the
United States and (ii) has liabilities that are material to the Company.
SECTION 3.11. Labor Matters. Except as set forth in Section
3.11 of the Disclosure Schedule, neither the Company nor any Subsidiary is a
party to any collective bargaining agreement or other labor union contract
applicable to persons employed by the Company or any Subsidiary, nor, to the
knowledge of the Company, are there any activities or proceedings of any labor
union to organize any such employees. Except as set forth in Section 3.11 of the
Disclosure Schedule, and except as would not have a Material Adverse Effect, (i)
there are no controversies pending or, to the knowledge of the Company,
threatened between the Company or any Subsidiary and any of their respective
employees; (ii) neither the Company nor any Subsidiary has breached or otherwise
failed to comply with any provision of any collective bargaining agreement or
labor union contract, and there are no grievances outstanding against the
Company or any Subsidiary under any such agreement or contract; (iii) there are
no unfair labor practice complaints pending against the Company or any
Subsidiary before the National Labor Relations Board or any current union
representation questions involving employees of the Company or any Subsidiary;
and (iv) there is no strike, slowdown, work stoppage or lockout, or, to the
knowledge of the Company, threat thereof, by or with respect to any employees of
the Company or any Subsidiary. No consent of any labor union is required to
consummate the Transactions. Neither the Company nor any Subsidiary has any
liability (whether current or contingent) under any of the collective bargaining
agreements listed on Section 3.11 of the Disclosure Schedule, which individually
or in the aggregate would have a Material Adverse Effect.
<PAGE> 17
SECTION 3.12. Offer Documents; Schedule 14D-9; Proxy
Statement. Neither the Schedule 14D-9 nor any information supplied by the
Company for inclusion in the Offer Documents shall, at the times the Schedule
14D-9, the Offer Documents or any amendments or supplements thereto are filed
with the SEC or are first published, sent or given to stockholders of the
Company, as the case may be, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. Neither the proxy statement (if any) to be sent to
the stockholders of the Company in connection with the Stockholders' Meeting (as
hereinafter defined) or the information statement to be sent to such
stockholders, as appropriate (such proxy statement or information statement, as
amended or supplemented, being referred to herein as the "Proxy Statement"),
shall, at the date the Proxy Statement (or any amendment or supplement thereto)
is first mailed to stockholders of the Company, at the time of the Stockholders'
Meeting and at the Effective Time, contain any statement which, at the time and
in light of the circumstances under which it was made, is false or misleading
with respect to any material fact, or which omits to state any material fact
necessary in order to make the statements therein not false or misleading or
necessary to correct any statement in any earlier communication with respect to
the solicitation of proxies for the Stockholders' Meeting which shall have
become false or misleading. Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to any information supplied by Parent,
Purchaser or any of Parent's or Purchaser's representatives for inclusion in the
foregoing documents. The Schedule 14D-9 and the Proxy Statement shall comply in
all material respects as to form with the requirements of the Exchange Act and
the rules and regulations thereunder.
SECTION 3.13. Real Property and Leases. (a) The Company and
the Subsidiaries have sufficient title to all their properties and assets to
conduct their respective businesses as currently conducted or as contemplated to
be conducted, with only such exceptions as would not have a Material Adverse
Effect.
(b) Except as disclosed in the 1998 Balance Sheet or the notes
thereto, each parcel of real property owned or leased by the Company or any
Subsidiary (i) is owned or leased free and clear of all mortgages, pledges,
liens, security interests, conditional and installment sale agreements,
encumbrances, charges or other claims of third parties of any kind, including,
without limitation, any easement, right of way or other encumbrance to title, or
any option, right of first refusal, or right of first offer (collectively,
"Liens"), other than (A) Liens for current taxes and assessments not yet past
due, (B) inchoate mechanics' and materialmen's Liens for construction in
progress, (C) workmen's, repairmen's, warehousemen's and carriers' Liens arising
in the ordinary course of business of the Company or such Subsidiary consistent
with past practice, and (D) all matters of record, Liens and other imperfections
of title and encumbrances that, individually or in the aggregate, would not have
a Material Adverse Effect (collectively, "Permitted Liens"), and (ii) is neither
subject to any governmental decree or order to be sold nor is being condemned,
expropriated or otherwise taken by any public authority with or without payment
of compensation therefor, nor, to the knowledge of the Company, has any such
condemnation, expropriation or taking been proposed, except as would not have a
Material
<PAGE> 18
Adverse Effect.
(c) All leases of real property leased for the use or benefit
of the Company or any Subsidiary to which the Company or any Subsidiary is a
party requiring rental payments in excess of $250,000 per annum during the
period of the lease, and all amendments and modifications thereto, are in full
force and effect and have not been modified or amended, and there exists no
material default under any such lease by the Company or any Subsidiary, nor any
event which, with notice or lapse of time or both, would constitute a material
default thereunder by the Company or any Subsidiary, except as would not have a
Material Adverse Effect.
SECTION 3.14. Intellectual Property. (a) The Company and the
Subsidiaries own or possess adequate licenses or other valid rights to use all
material Intellectual Property used or held for use in connection with the
business of the Company and the Subsidiaries as currently conducted or as
contemplated to be conducted.
(b) No current or prior use of any Intellectual Property by
the Company and the Subsidiaries infringes on or otherwise violates the rights
of any person and such use is and has been in accordance with all applicable
licenses, pursuant to which the Company or any of the Subsidiaries acquired the
right to use such Intellectual Property, other than as would not have a Material
Adverse Effect.
(c) No Intellectual Property owned/or licensed by the Company
or the Subsidiaries is being used or enforced in a matter that would result in
the abandonment, cancellation or unenforceability of such Intellectual Property
other than as would not have a Material Adverse Effect.
(d) For purposes of this Agreement, "Intellectual Property"
means all trademarks, trademark rights, trade name, trade name rights, trade
dress and other indications of origin, brand names, certification rights,
service marks, applications for trademarks and for service marks, know-how and
other proprietary rights and information; inventions, discoveries and ideas,
whether patentable or not, in any jurisdiction; patents, patent rights and trade
secrets; writings and other works, whether copyrightable or not, in any
jurisdiction; and any similar intellectual property or proprietary rights.
SECTION 3.15. Year 2000 Compliance. The Company has (i)
undertaken an assessment of those Company Systems that could be adversely
affected by a failure to be Year 2000 Compliant, (ii) developed a plan and time
line for rendering such Company Systems Year 2000 Compliant, and (iii) to date,
implemented such plan in accordance with such timetable in all material
respects. Based on such assessment, all Company Systems are Year 2000 Compliant
or will be Year 2000 Compliant as required to avoid having a Material Adverse
Effect. The Company estimates that the total remaining cost of rendering the
Company Systems Year 2000 Compliant is not material and will be funded with cash
flows from operations. For purposes hereof, "Company Systems" means all
computer, hardware, software, systems, and equipment (including embedded
microcontrollers in non-computer equipment) embedded within or required to
operate the current products of the Company and the Subsidiaries, and/or
material to or
<PAGE> 19
necessary for the Company and the Subsidiaries to carry on their businesses as
currently conducted. For purposes hereof, "Year 2000 Compliant" means that the
Company Systems provide uninterrupted millennium functionality in that the
Company Systems will record, store, process and present calendar dates falling
on or after January 1, 2000, in the same manner and with the same functionality
as the Company Systems record, store, process, and present calendar dates
falling on or before December 31, 1999.
SECTION 3.16. Taxes. The Company and the Subsidiaries have
filed all federal, state, local and foreign Tax returns and reports required to
be filed by them and have paid and discharged all Taxes required to be paid or
discharged, other than (i) such payments as are being contested in good faith
and for which adequate reserves have been set aside and are reflected on the
books of the Company, (ii) payments for which adequate reserves have been set
aside and are reflected on the books of the Company and which are identified in
Section 3.16 of the Disclosure Schedule, and (iii) such filings, payments or
other occurrences that would not have a Material Adverse Effect. Neither the IRS
nor any other taxing authority or agency, domestic or foreign, has notified the
Company in writing that it is now asserting or to the knowledge of the Company
threatening to assert (whether or not in writing) against the Company or any
Subsidiary any deficiency or claim for any Taxes or interest thereon or
penalties in connection therewith which, if upheld, would have a Material
Adverse Effect. Neither the Company nor any Subsidiary has granted any waiver of
any statute of limitations with respect to, or any extension of a period for the
assessment of any Tax. The accruals and reserves for Taxes reflected in the 1998
Balance Sheet are adequate to cover all Taxes accruable through such date
(including interest and penalties, if any, thereon) in accordance with GAAP.
Neither the Company nor any Subsidiary has made an election under Section 341(f)
of the Code. There are no Tax liens upon any property or assets of the Company
or any of the Subsidiaries except liens for current Taxes not yet due. Neither
the Company nor any of its Subsidiaries has been required to include in income
any adjustment pursuant to Section 481 of the Code by reason of a voluntary
change in accounting method initiated by the Company or any of its Subsidiaries,
and the IRS has not initiated or proposed any such adjustment or change in
accounting method, in either case which adjustment or change has had or is
reasonably likely to have a Material Adverse Effect. Except as set forth in the
financial statements described in Section 3.07, neither the Company nor any of
its Subsidiaries has entered into a transaction which is being accounted for
under the installment method of Section 453 of the Code, which would have a
Material Adverse Effect. For purposes of this Agreement, "Taxes" means any and
all taxes, fees, levies, duties, tariffs, imposts and other charges of any kind
(together with any and all interest, penalties, additions to tax and additional
amounts imposed with respect thereto) imposed by any Governmental Authority or
taxing authority, including, without limitation: taxes or other charges on or
with respect to income, franchise, windfall or other profits, gross receipts,
property, sales, use, capital stock, payroll, employment, social security,
workers' compensation, unemployment compensation or net worth; taxes or other
charges in the nature of excise, withholding, ad valorem, stamp, transfer,
value-added or gains taxes; license, registration and documentation fees; and
customers' duties, tariffs and similar charges.
SECTION 3.17. Environmental Matters. Except as described in
Section 3.17 of the Disclosure Schedule or as would not have a Material Adverse
Effect: (i) the Company has
<PAGE> 20
not violated and is not in violation of any Environmental Law; (ii) none of the
properties currently or, to the knowledge of the Company, formerly owned, leased
or operated by the Company (including, without limitation, soils and surface and
ground waters) are contaminated with any Hazardous Substance; (iii) there is no
Action pending or, to the knowledge of the Company, threatened against the
Company with respect to any off-site contamination by Hazardous Substances (as
hereinafter defined); (iv) there is no Action pending or, to the knowledge of
the Company, threatened against under any Environmental Law (as hereinafter
defined) (including, without limitation, pending or threatened liens); (v) the
Company has all permits, licenses and other authorizations required under any
Environmental Law ("Environmental Permits"); (vi) the Company is in compliance
with its Environmental Permits; and (vii) neither the execution of this
Agreement nor the consummation of the Transactions contemplated hereby will
require any investigation, remediation or other action with respect to Hazardous
Substances, or any notice to or consent of Governmental Authorities, pursuant to
any applicable Environmental Law, including, without limitation, the Connecticut
Transfer Act and the New Jersey Industrial Site Recovery Act.
SECTION 3.18. Amendment to Rights Agreement. (a) The Board has
taken all necessary action to irrevocably amend the Rights Agreement so that
none of the execution, delivery or performance of this Agreement or the
Stockholders Agreement, the making of the Offer or the acceptance for payment or
payment for Shares by Purchaser pursuant to the Offer will cause (i) the Rights
to become exercisable under the Rights Agreement, (ii) Parent or Purchaser or
any of their affiliates to be deemed an "Acquiring Person" (as defined in the
Rights Agreement) or (iii) the "Stock Acquisition Date" (as defined in the
Rights Agreement) to occur upon any such event.
(b) The "Distribution Date" (as defined in the Rights
Agreement) has not occurred.
SECTION 3.19. Material Contracts. (a) Subsections (i) through
(iii) of Section 3.19 of the Disclosure Schedule contain a list of the following
types of contracts and agreements to which the Company or any Subsidiary is a
party on the date hereof (such contracts, agreements and arrangements as are
required to be set forth in Section 3.19(a) of the Disclosure Schedule and
policies of insurance maintained by the Company and the Subsidiaries being the
"Material Contracts"):
(i) as of June 30, 1999, each guaranteed maximum price, lump
sum and cost plus fee contract and agreement which is likely to involve
revenues to the Company of more than $50,000,000, in the aggregate,
over the remaining term of such contract;
(ii) all contracts and agreements evidencing indebtedness in
excess of $5,000,000; and
(iii) all contracts and agreements that limit the ability of
the Company or any Subsidiary to compete in any line of business or
with any person or entity or in any geographic area or during any
period of time.
<PAGE> 21
(b) Except as would not have a Material Adverse Effect, each
Material Contract is a legal, valid and binding agreement, and none of the
Material Contracts is in default by its terms or has been canceled by the other
party; to the Company's knowledge, no other party is in breach or violation of,
or default under, any Material Contract; and the Company and the Subsidiary are
not in receipt of any claim of default under any such agreement. The Company has
furnished or made available to Parent true and complete copies of all Material
Contracts, including any amendments thereto.
SECTION 3.20. Insurance. The Company and each Subsidiary
maintain policies of insurance on terms, and in amounts, that are adequate for
the conduct of the Company's business and the business of such Subsidiary, in
each case as such business is currently conducted and consistent with customary
practices and standards of companies engaged in businesses similar to that of
the Company and the Subsidiaries, and with insurers reasonably believed by the
Company to be responsible.
SECTION 3.21. Brokers. No broker, finder or investment banker
(other than PaineWebber Incorporated) is entitled to any brokerage, finder's or
other fee or commission in connection with the Transactions based upon
arrangements made by or on behalf of the Company. The Company has heretofore
furnished to Parent a complete and correct copy of all agreements between the
Company and PaineWebber Incorporated pursuant to which such firm would be
entitled to any payment relating to the Transactions.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
As an inducement to the Company to enter into this Agreement,
Parent and Purchaser hereby, jointly and severally, represent and warrant to the
Company that:
SECTION 4.01. Corporate Organization. Each of Parent and
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation and has the requisite
corporate power and authority and all necessary governmental approvals to own,
lease and operate its properties and to carry on its business as it is now being
conducted, except where the failure to be so organized, existing or in good
standing or to have such power, authority and governmental approvals would not
prevent or materially delay consummation of the Offer or the Merger or otherwise
prevent or materially delay Parent or Purchaser from performing its obligations
under this Agreement.
SECTION 4.02. Authority Relative to This Agreement and the
Stockholders Agreements. Each of Parent and Purchaser has all necessary
corporate power and authority to execute and deliver this Agreement and the
Stockholders Agreements, to perform its obligations hereunder and thereunder and
to consummate the Transactions. The execution and delivery of this Agreement and
the Stockholders Agreements by Parent and Purchaser, the performance by
<PAGE> 22
Parent and Purchaser of their obligations hereunder and thereunder and the
consummation by Parent and Purchaser of the Transactions have been duly and
validly authorized by all necessary corporate action and no other corporate
proceedings on the part of Parent or Purchaser are necessary to authorize this
Agreement or the Stockholders Agreements or to consummate the Transactions
(other than, with respect to the Merger, the filing and recordation of
appropriate merger documents as required by Delaware Law). This Agreement and
the Stockholders Agreements have been duly and validly executed and delivered by
Parent and Purchaser and, assuming due authorization, execution and delivery by
the Company and, in the case of the Stockholders Agreements, the respective
Stockholder(s), constitute legal, valid and binding obligations of each of
Parent and Purchaser enforceable against each of Parent and Purchaser in
accordance with their terms.
SECTION 4.03. No Conflict; Required Filings and Consents. (a)
The execution and delivery of this Agreement and the Stockholders Agreements by
Parent and Purchaser do not, and the performance of this Agreement and the
Stockholders Agreements by Parent and Purchaser will not, (i) conflict with or
violate the certificate of incorporation or by-laws or equivalent organizational
documents of either Parent or Purchaser, (ii) assuming satisfaction of the
requirements set forth in Section 4.03(b) below, conflict with or violate any
Law, applicable to Parent or Purchaser or by which any property or asset of
either of them is bound or affected, or (iii) result in any breach of, or
constitute a default (or an event which, with notice or lapse of time or both,
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or other encumbrance on any property or asset of Parent or Purchaser pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which Parent or Purchaser
is a party or by which Parent or Purchaser or any property or asset of either of
them is bound or affected, except, with respect to clauses (ii) and (iii), for
any such conflicts, violations, breaches, defaults or other occurrences which
would not prevent or materially delay consummation of the Offer or the Merger,
or otherwise prevent or materially delay Parent or Purchaser from performing its
obligations under this Agreement.
(b) The execution and delivery of this Agreement and the
Stockholders Agreements by Parent and Purchaser do not, and the performance of
this Agreement and the Stockholders Agreements by Parent and Purchaser will not,
require any consent, approval, authorization or permit of, or filing with, or
notification to, any Governmental Authority, except (i) for applicable
requirements, if any, of the Exchange Act, Blue Sky Laws and state takeover
laws, the HSR Act, and filing and recordation of appropriate merger documents as
required by Delaware Law, and (ii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not prevent or materially delay consummation of the Offer or the Merger,
or otherwise prevent Parent or Purchaser from performing its obligations under
this Agreement.
SECTION 4.04. Financing. Purchaser has, or shall have,
sufficient funds to permit Purchaser to acquire all the outstanding Shares
pursuant to the Offer and the Merger.
SECTION 4.05. Absence of Litigation. As of the date hereof,
there is no action
<PAGE> 23
pending, or, to the knowledge of Parent or Purchaser, threatened against Parent
or Purchaser, or any property or asset of Parent or Purchaser, before any court
or arbitrator, domestic or foreign, or Governmental Authority that seeks to
delay or prevent the consummation of any Transaction.
SECTION 4.06. Offer Documents; Proxy Statement. The Offer
Documents shall not, at the time the Offer Documents are filed with the SEC or
are first published, sent or given to stockholders of the Company, as the case
may be, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. The information supplied by Parent for inclusion in the
Proxy Statement shall not, at the date the Proxy Statement (or any amendment or
supplement thereto) is first mailed to stockholders of the Company, at the time
of the Stockholders' Meeting and at the Effective Time, contain any untrue
statement of a material fact, or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not false or misleading, or
necessary to correct any statement in any earlier communication with respect to
the solicitation of proxies for the Stockholders' Meeting which shall have
become false or misleading. Notwithstanding the foregoing, Parent and Purchaser
make no representation or warranty with respect to any information supplied by
the Company or any of its representatives for inclusion in any of the foregoing
documents or the Offer Documents. The Offer Documents shall comply in all
material respects as to form with the requirements of the Exchange Act and the
rules and regulations thereunder.
SECTION 4.07. Brokers. No broker, finder or investment banker
(other than Goldman, Sachs & Co. oHG) is entitled to any brokerage, finder's or
other fee or commission in connection with the Transactions based upon
arrangements made by or on behalf of Parent or Purchaser.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01. Conduct of Business by the Company Pending the
Merger. The Company agrees that, between the date of this Agreement and the
Effective Time, unless Parent shall otherwise agree in writing, the businesses
of the Company and the Subsidiaries shall be conducted only in, and the Company
and the Subsidiaries shall not take any action except in, the ordinary course of
business and in a manner consistent with past practice; and the Company shall
use its reasonable best efforts to preserve substantially intact the business
organization of the Company and the Subsidiaries, to keep available the services
of the current officers, employees and consultants of the Company and the
Subsidiaries and to preserve the current relationships of the Company and the
Subsidiaries with customers, suppliers and other persons with which the Company
or any Subsidiary has significant business relations. By way of amplification
and not limitation, except as expressly contemplated by this Agreement and
Section 5.01 of the
<PAGE> 24
Disclosure Schedule, neither the Company nor any Subsidiary shall, between the
date of this Agreement and the Effective Time, directly or indirectly, do, or
propose to do, any of the following without the prior written consent of Parent:
(a) amend or otherwise change its certificate of incorporation
or by-laws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, encumber, or
authorize the issuance, sale, pledge, disposition, grant or encumbrance
of, (i) any shares of any class of capital stock of the Company or any
Subsidiary, or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of such capital stock, or any
other ownership interest (including, without limitation, any phantom
interest), of the Company or any Subsidiary (except for the issuance of
a maximum of 2,021,875 shares of Company Common Stock issuable pursuant
to employee stock options outstanding on the date hereof and the
issuance of a maximum of 2,400,000 shares of Company Common Stock upon
conversion of Company Preferred Stock outstanding on the date hereof)
or (ii) any assets of the Company or any Subsidiary, except in the
ordinary course of business and in a manner consistent with past
practice;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock (other than dividends and
distributions by a wholly owned Subsidiary to the Company or another
wholly owned Subsidiary);
(d) reclassify, combine, split, subdivide or redeem, or
purchase or otherwise acquire, directly or indirectly, any of its
capital stock;
(e) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets or any other business
combination) any corporation, partnership, other business organization
or any division thereof or any material amount of assets; (ii) incur
any indebtedness for borrowed money or issue any debt securities or
assume, guarantee or endorse, or otherwise as an accommodation become
responsible for, the obligations of any person, or make any loans or
advances, or grant any security interest in any of its assets except in
the ordinary course of business and consistent with past practice;
(iii) authorize any single capital expenditure or capital expenditures
which are, in the aggregate, not disclosed in the Company's capital
expenditure budget previously delivered by the Company to Parent; or
(iv) enter into or amend any contract, agreement, commitment or
arrangement with respect to any matter set forth in this Section
5.01(e);
(f) (i) increase the compensation payable or to become payable
or the benefits provided to its current or former directors or
executive officers, or increase the compensation payable or to become
payable or the benefits provided to its current or former non-executive
officers or employees other than in the ordinary course in accordance
with past practices; (ii) grant any severance or termination pay to, or
enter
<PAGE> 25
into any employment, retention, stay bonus or severance agreement with
any director or executive officer, or grant any severance or
termination pay to, or enter into any employment, retention, stay bonus
or severance agreement with any non-executive officer or employee other
than in the ordinary course in accordance with past practices; (iii)
establish, adopt, enter into or amend any collective bargaining, bonus,
profit-sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, deferred compensation, employment, termination,
severance or other plan, agreement, trust, fund, policy or arrangement
for the benefit of any director or executive officer, or take any such
action for the benefit of any non-executive officer or employee other
than in the ordinary course in accordance with past practices; or (iv)
amend or modify any Company Plans except as required by law;
(g) take any action, other than as required by GAAP, with
respect to accounting policies or procedures (including, without
limitation, procedures with respect to the payment of accounts payable
and collection of accounts receivable);
(h) make any material tax election or settle or compromise any
material federal, state, local or foreign income tax liability;
(i) amend, modify or consent to the termination of any
Material Contract, or amend, waive, modify or consent to the
termination of the Company's or any Subsidiary's rights thereunder,
other than in the ordinary course of business and consistent with past
practice;
(j) settle any material Action other than any settlement which
involves only the payment of damages in an immaterial amount and does
not involve injunctive or other equitable relief; or
(k) announce an intention, enter into any formal or informal
agreement or otherwise make a commitment, to do any of the foregoing.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Stockholders' Meeting. (a) If required by
applicable law in order to consummate the Merger, the Company, acting through
the Board, shall, in accordance with applicable law and the Company's
certificate of incorporation and by-laws, (i) duly call, give notice of, convene
and hold an annual or special meeting of its stockholders as soon as practicable
following consummation of the Offer for the purpose of considering and taking
action on this Agreement and the Transactions (the "Stockholders' Meeting") and
(ii) except as required by its fiduciary duties under applicable law based upon
advice of outside legal counsel, (A) include in the Proxy Statement, and not
subsequently withdraw or modify in any manner adverse to Purchaser or Parent,
the unanimous recommendation of the Board that the
<PAGE> 26
stockholders of the Company approve and adopt this Agreement and the
Transactions and (B) use its best efforts to obtain such approval and adoption.
At the Stockholders' Meeting, Parent and Purchaser shall cause all Shares then
owned by them and their subsidiaries to be voted in favor of the approval and
adoption of this Agreement and the Transactions.
(b) Notwithstanding the foregoing, in the event that Purchaser
shall acquire at least 90% of the then outstanding shares of Company Common
Stock and 90% of the then outstanding shares of each series of Company Preferred
Stock, the parties hereto agree, at the request of Purchaser, subject to Article
VII, to take all necessary and appropriate action to cause the Merger to become
effective, in accordance with Section 253 of Delaware Law, as soon as reasonably
practicable after such acquisition, without a meeting of the stockholders of the
Company.
SECTION 6.02. Proxy Statement. If required by applicable law,
promptly following consummation of the Offer, the Company shall file the Proxy
Statement with the SEC under the Exchange Act, and shall use its reasonable best
efforts to have the Proxy Statement cleared by the SEC as promptly as
practicable. Parent, Purchaser and the Company shall cooperate with each other
in the preparation of the Proxy Statement, and the Company shall notify Parent
of the receipt of any comments of the SEC with respect to the Proxy Statement
and of any requests by the SEC for any amendment or supplement thereto or for
additional information and shall provide to Parent promptly copies of all
correspondence between the Company or any representative of the Company and the
SEC. The Company shall give Parent and its counsel the opportunity to review the
Proxy Statement, including all amendments and supplements thereto, prior to its
being filed with the SEC and shall give Parent and its counsel the opportunity
to review all responses to requests for additional information and replies to
comments prior to their being filed with, or sent to, the SEC. Each of the
Company, Parent and Purchaser agrees to use its reasonable best efforts, after
consultation with the other parties hereto, to respond promptly to all such
comments of and requests by the SEC and to cause the Proxy Statement and all
required amendments and supplements thereto to be mailed to the holders of
Shares entitled to vote at the Stockholders' Meeting at the earliest practicable
time.
SECTION 6.03. Company Board Representation; Section 14(f). (a)
Promptly upon the purchase by Purchaser of Shares pursuant to the Offer and from
time to time thereafter, the Board shall consist of two directors designated by
the Board prior to such purchase of Shares, three directors designated by
Purchaser (who may be employees of Parent or an Affiliate) and four independent
directors, and the Company shall, at such time, promptly take all actions
necessary to cause Purchaser's designees and new independent directors, if any,
to be elected as directors of the Company, including increasing the size of the
Board or securing the resignations of incumbent directors, or both. At such
times, the Company shall use its best efforts to cause persons designated by
Purchaser and new independent directors, if any, to constitute the same
percentage as persons designated by Purchaser and new independent directors, if
any, shall constitute of the Board of (i) each committee of the Board, (ii) each
board of directors of each domestic Subsidiary, and (iii) each committee of each
such board, in each case only to the extent permitted by applicable law.
Notwithstanding the foregoing, until the earlier of (i) the time Purchaser
acquires two-thirds of the voting power of the then-outstanding Shares on a
fully
<PAGE> 27
diluted basis and (ii) the Effective Time, the Company shall not take any action
to induce any member of the Board, as of the date hereof, who are not employees
of the Company to resign from the Board.
(b) To the extent applicable, the Company shall promptly take
all actions required pursuant to Section 14(f) of the Exchange Act and Rule
14f-1 promulgated thereunder to fulfill its obligations under this Section 6.03,
and shall include in the Schedule 14D-9 such information with respect to the
Company and its officers and directors as is required under Section 14(f) and
Rule 14f-1 to fulfill such obligations. To the extent applicable, Parent or
Purchaser shall supply to the Company, and be solely responsible for, any
information with respect to either of them and their nominees, officers,
directors and affiliates required by such Section 14(f) and Rule 14f-1.
(c) Following the election of designees of Purchaser pursuant
to this Section 6.03, prior to the Effective Time, any amendment of this
Agreement or the certificate of incorporation or by-laws of the Company, any
termination of this Agreement by the Company, any extension by the Company of
the time for the performance of any of the obligations or other acts of Parent
or Purchaser, or waiver of any of the Company's rights hereunder, shall require
the concurrence of a majority of the directors of the Company then in office who
neither were designated by Purchaser nor are employees of the Company.
SECTION 6.04. Access to Information; Confidentiality. (a) From
the date hereof to the Effective Time, the Company shall, and shall cause the
Subsidiaries and the officers, directors, employees, auditors and agents of the
Company and the Subsidiaries to, afford the officers, employees and agents of
Parent and Purchaser complete access at all reasonable times to the officers,
employees, agents, properties, offices, plants, building sites and other
facilities, books and records of the Company and each Subsidiary, and shall
furnish Parent and Purchaser with such financial, operating and other data and
information as Parent or Purchaser, through its officers, employees or agents,
may reasonably request.
(b) All information obtained by Parent or Purchaser pursuant
to this Section 6.04 shall be kept confidential in accordance with the
confidentiality agreement, dated April 1, 1999 (the "Confidentiality
Agreement"), between Parent and the Company.
(c) No investigation pursuant to this Section 6.04 shall
affect any representation or warranty in this Agreement of any party hereto or
any condition to the obligations of the parties hereto.
SECTION 6.05. No Solicitation of Transactions. (a) Neither the
Company nor any Subsidiary shall, directly or indirectly, through any officer,
director, agent or otherwise, (i) solicit, initiate, accept, or knowingly
encourage the submission of, any Acquisition Proposal (as defined below) or (ii)
except as required by the fiduciary duties of the Board under applicable law
based upon advice of outside legal counsel, participate in any discussions or
negotiations regarding, or furnish to any person any information with respect
to, or otherwise cooperate in any way with respect to, or assist or participate
in, facilitate or encourage, any proposal that
<PAGE> 28
constitutes, or may reasonably be expected to lead to, an Acquisition Proposal.
For purposes of this Agreement, "Acquisition Proposal" means (i) any bona fide
proposal or offer from any person relating to any direct or indirect acquisition
of (A) all or a substantial part of the assets of the Company or of any
Subsidiary or (B) 30% or more of the then-outstanding shares of Company Common
Stock and Company Preferred Stock (determined as if shares of Company Preferred
Stock have been converted into shares of Company Common Stock); (ii) any tender
offer or exchange offer as defined pursuant to the Exchange Act that, if
consummated, would result in any person beneficially owning 30% or more of the
then-outstanding shares of Company Common Stock and Company Preferred Stock
(determined as if shares of Company Preferred Stock have been converted into
shares of Company Common Stock); (iii) any merger, consolidation, business
combination, sale of all or a substantial part of the assets, recapitalization,
liquidation, dissolution or similar transaction involving the Company and any
Subsidiary, other than the Transactions; or (iv) any other transaction the
consummation of which would reasonably be expected to impede, interfere with,
prevent or materially delay the Transaction.
(b) Except as set forth in this Section 6.05(b), neither the
Board nor any committee thereof shall (i) withdraw or modify, or propose to
withdraw or modify, in a manner adverse to Parent or Purchaser, the approval or
recommendation by the Board or any such committee of the Offer, this Agreement,
the Merger or any other Transactions, (ii) approve or recommend, or propose to
approve or recommend, any Acquisition Proposal or (iii) enter into any agreement
with respect to any Acquisition Proposal. Notwithstanding the foregoing, in the
event that, prior to the time of acceptance for payment of Shares pursuant to
the Offer, the Board determines in good faith that it is required to do so by
its fiduciary duties under applicable law based upon advice of outside legal
counsel, the Board may withdraw or modify its approval or recommendation of the
Offer, the Merger, this Agreement or any other Transactions, but only in order
to enter into a definitive agreement with respect to a Superior Proposal (as
defined below) and terminate this Agreement in accordance with Section
8.01(d)(ii) (and, concurrently with such termination, cause the Company to enter
into an agreement with respect to any Superior Proposal). For purposes of this
Agreement, a "Superior Proposal" means any Acquisition Proposal on terms which
the Board determines, in its good faith judgment (after consultation with a
financial advisor of internationally recognized reputation), to be more
favorable to the Company's stockholders than the Offer and the Merger and as to
which, to the extent financing is required, there shall have been obtained from
a responsible financing source or sources one or more commitment letters
containing customary terms and conditions.
(c) The Company shall, and shall direct or cause its
directors, officers, employees, representatives and agents to, immediately cease
and cause to be terminated any discussions or negotiations with any parties that
may be ongoing with respect to any Acquisition Proposal.
(d) The Company shall promptly advise Parent orally and in
writing of any Acquisition Proposal or any request for information with respect
to any Acquisition Proposal, the material terms and conditions of such
Acquisition Proposal or request and the identity of the person making such
Acquisition Proposal or request.
<PAGE> 29
(e) Nothing contained in this Section 6.05 shall prohibit the
Company from taking and disclosing to its stockholders a position contemplated
by Rule 14e-2(a) promulgated under the Exchange Act or from making any
disclosure to the Company's stockholders, if the Board determines in good faith
that it is required to do so by its fiduciary duties under applicable law as
advised in writing by outside legal counsel; provided, however, that neither the
Company nor the Board nor any committee thereof shall, except as permitted by
Section 6.05(b), withdraw or modify, or propose publicly to withdraw or modify,
its position with respect to the Offer, this Agreement, the Merger or any other
Transactions or to approve or recommend, or propose publicly to approve or
recommend, an Acquisition Proposal.
(f) The Company agrees not to release any third party from, or
waive any provision of, any confidentiality or standstill agreement to which the
Company is a party, except pursuant to Section 6.11.
SECTION 6.06. Employee Benefits Matters. Annex B hereto sets
forth certain agreements among the parties hereto with respect to the Company
Plans and other employee benefits matters.
SECTION 6.07. Directors' and Officers' Indemnification and
Insurance. (a) The By-laws of the Surviving Corporation shall contain provisions
no less favorable with respect to indemnification than are set forth in Article
VIII of the by-laws of the Company, which provisions shall not be amended,
repealed or otherwise modified for a period of six years from the Effective Time
in any manner that would affect adversely the rights thereunder of any
individual who is now, or has been at any time prior to the date hereof, or who
becomes, prior to the Effective Time, a director, officer, employee, fiduciary
or agent of the Company, unless such modification shall be required by law.
Notwithstanding the foregoing, if written notice of a claim setting forth in
reasonable detail the basis of such claim has been given to the Surviving
Corporation prior to the expiration of the six-year period from the Effective
Time, then the indemnification provided pursuant to the previous sentence shall
survive as to such claim until such claim has been finally resolved.
(b) The Surviving Corporation shall use its reasonable best
efforts to maintain in effect for six years from the Effective Time the current
directors' and officers' liability insurance policies maintained by the Company
(provided that the Surviving Corporation may substitute therefor policies of at
least the same coverage containing terms and conditions that are not materially
less favorable) with respect to matters occurring prior to the Effective Time;
provided, however, that in no event shall the Surviving Corporation be required
to expend pursuant to this Section 6.07(b) more than an amount per year equal to
225% of current annual premiums paid by the Company for such insurance (which
premiums the Company represents and warrants to be $269,400 in the aggregate and
if such premiums for such insurance would at any time exceed 225% of current or
substitute annual premiums paid by the Company, then Parent shall cause to be
maintained policies of insurance which in Parent's good faith determination
provide the maximum coverage available at an annual premium equal to 225% of
current or substitute annual premiums paid by the Company); provided, however,
that in the event of an expiration, termination or cancellation of such current
policies, Purchaser or the
<PAGE> 30
Surviving Corporation shall be required to obtain as much coverage as is
possible under substantially similar policies for 225% of the Company's current
or substitute annual premiums.
(c) In the event the Company or the Surviving Corporation or
any of their respective successors or assigns (i) consolidates with or merges
into any other person and shall not be the continuing or surviving corporation
or entity of such consolidation or merger or (ii) transfers all or substantially
all of its properties and assets to any person, then, and in each such case,
proper provision shall be made so that the successors and assigns of the Company
or the Surviving Corporation, as the case may be, or at Parent's option, Parent,
shall assume the obligations set forth in this Section 6.07.
(d) (i) Parent agrees to indemnify, and to cause the Surviving
Corporation to indemnify, all officers, directors, employees or agents of the
Company or any of its Subsidiaries (collectively, the "Indemnified Parties") to
the fullest extent permitted by applicable law with respect to all acts and
omissions arising out of such individuals' services as officers, directors,
employees or agents of the Company or any of its subsidiaries or as trustees or
fiduciaries of any plan for the benefit of employees of the Company or any of
its subsidiaries, occurring prior to the Effective Time including, without
limitation, the transactions contemplated by this Agreement. Without limitation
of the foregoing, in the event any such Indemnified Party is or becomes involved
in any capacity in any action, proceeding or investigation in connection with
any matter, including, without, limitation, the transactions contemplated by
this Agreement, occurring prior to, and including, the Effective Time, Parent,
from and after the Effective Time, will pay as incurred such Indemnified Party's
reasonable legal and other expenses (including the cost of any investigation and
preparation) incurred in connection therewith. Subject to clause (ii) below,
Parent shall pay all reasonable expenses, including attorneys' fees, that may be
incurred by any Indemnified Party in enforcing this Section 6.07 or any action
involving an Indemnified Party resulting from the transactions contemplated by
this Agreement. If the indemnity provided for in this Section 6.07 is not
available with respect to any Indemnified Party, then the Surviving Corporation
and the Indemnified Party shall contribute to the amount payable in such
proportion as is appropriate to reflect relative faults and benefits.
(ii) Any Indemnified Party wishing to claim indemnification
under this Section, upon learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify Parent thereof. In the event of any such
claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time), (x) Parent or the Surviving Corporation shall have
the right, from and after the Effective Time, to assume the defense thereof
(with counsel engaged by Parent or the Surviving Corporation to be reasonably
acceptable to the relevant Indemnified Party) and Parent shall not be liable to
such Indemnified Parties for any legal expense of other counsel or any other
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof, (y) such Indemnified Party will cooperate in the defense of any
such matter and (z) Parent or the Surviving Corporation shall not be liable for
any settlement effected without its prior written consent; and provided further
that Parent shall not have any obligation hereunder to any Indemnified Party
when and if a court of competent jurisdiction shall ultimately determine, and
such determination shall have become final, that the indemnification of such
Indemnified Party in the manner contemplated hereby is prohibited by
<PAGE> 31
applicable law.
(e) The provisions of this Section 6.07 are intended for the
benefit of, and shall be enforceable by, each person entitled to indemnification
under this Section 6.07, his or her heirs and his or her personal
representatives.
SECTION 6.08. Notification of Certain Matters. The Company
shall give prompt notice to Parent, and Parent shall give prompt notice to the
Company, of (i) the occurrence, or non-occurrence, of any event the occurrence,
or non-occurrence, of which reasonably could be expected to cause any of its
representations or warranties contained in this Agreement to be untrue or
inaccurate in any material respect and (ii) any failure of the Company, Parent
or Purchaser, as the case may be, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that the delivery of any notice pursuant to this Section 6.08
shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
SECTION 6.09. Further Action; Reasonable Best Efforts. (a)
Upon the terms and subject to the conditions hereof, each of the parties hereto
shall (i) make promptly its respective filings, and thereafter make any other
required submissions under the HSR Act with respect to the Transactions and (ii)
use its reasonable best efforts to take, or cause to be taken, all appropriate
action, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the Transactions, including, without limitation, using its reasonable best
efforts to obtain all Permits, consents, approvals, authorizations,
qualifications and orders of Governmental Authorities and parties to contracts
with the Company and the Subsidiaries as are necessary for the consummation of
the Transactions and to fulfill the conditions to the Offer and the Merger;
provided that neither Purchaser nor Parent will be required by this Section 6.09
to take any action, including entering into any consent decree, that requires
the divestiture of a material amount of assets of any of the Purchaser, Parent,
Company or their respective subsidiaries. In case, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and directors of each party to
this Agreement shall use their reasonable best efforts to take all such action.
(b) Each of the parties hereto agrees to cooperate and use
their reasonable best efforts to vigorously contest and resist any Action,
including administrative or judicial Action, and to have vacated, lifted,
reversed or overturned any decree, judgment, injunction or other order (whether
temporary, preliminary or permanent) that is in effect and that restricts,
prevents or prohibits consummation of the Transactions, including, without
limitation, by vigorously pursuing all available avenues of administrative and
judicial appeal.
SECTION 6.10. Public Announcements. Parent and the Company
shall agree on the form and substance of an initial press release and other
initial statements with respect to this Agreement or any Transaction, and
thereafter, the Company shall not issue any press release or make any such
public statement without the prior consent of Parent, except as may be required
by Law or any listing agreement with a securities exchange to which the Company
or any of its
<PAGE> 32
affiliates is a party.
SECTION 6.11. Confidentiality Agreement. The Company hereby
waives the provisions of the Confidentiality Agreement as and to the extent
necessary to permit the consummation of each Transaction. Upon the acceptance
for payment of Shares pursuant to the Offer, the Confidentiality Agreement shall
be deemed to have terminated without further action by the parties thereto.
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. Conditions to the Merger. The respective
obligations of each party to effect the Merger shall be subject to the
satisfaction, at or prior to the Effective Time of the following conditions:
(a) Stockholder Approval. This Agreement and the Transactions
shall have been approved and adopted by the affirmative vote of the
stockholders of the Company to the extent required by Delaware Law and
the certificate of incorporation of the Company;
(b) No Order. No Governmental Authority shall have enacted,
issued, promulgated, enforced or entered any Law (whether temporary,
preliminary or permanent) which is then in effect and has the effect of
making the acquisition of Shares by Parent or Purchaser or any
affiliate of either of them illegal or otherwise restricting in any
material manner, preventing or prohibiting consummation of the
Transactions; and
(c) Offer. Purchaser or its permitted assignee shall have
purchased all Shares validly tendered and not withdrawn pursuant to the
Offer; provided, however, that this condition shall not be applicable
to the obligations of Parent or Purchaser if, in breach of this
Agreement or the terms of the Offer, Purchaser fails to purchase any
Shares validly tendered and not withdrawn pursuant to the Offer.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination. This Agreement may be terminated
and the Merger and the other Transactions may be abandoned at any time prior to
the Effective Time, notwithstanding any requisite approval and adoption of this
Agreement and the Merger by the stockholders of the Company:
(a) By mutual written consent of each of Parent, Purchaser and
the Company duly authorized by the Boards of Directors of Purchaser and
the Company and the
<PAGE> 33
Management Board of Parent; or
(b) By either Parent, Purchaser or the Company if (i) the
Effective Time shall not have occurred on or before March 31, 2000;
provided, however, that the right to terminate this Agreement under
this Section 8.01(b) shall not be available to any party whose failure
to fulfill any obligation under this Agreement has been the cause of,
or resulted in, the failure of the Effective Time to occur on or before
such date or (ii) any Governmental Authority in the United States or
the European Union shall have enacted, issued, promulgated, enforced or
entered any injunction, order, decree or ruling which has the effect of
making consummation of the Merger illegal or otherwise preventing or
prohibiting consummation of the Merger, which injunction, order, decree
or ruling has become final and non-appealable; or
(c) By Parent if (i) due to an occurrence or circumstance that
would result in a failure to satisfy any condition set forth in Annex A
hereto, Purchaser shall have (A) failed to commence the Offer within 60
days following the date of this Agreement, (B) terminated the Offer
without having accepted any Shares for payment thereunder or (C) failed
to pay for Shares pursuant to the Offer within 90 days following the
commencement of the Offer (provided, however, that the applicable time
period shall be extended until the fifth business day following
expiration or termination of any applicable waiting period under the
HSR Act), unless such action or inaction under (A), (B) or (C) shall
have been caused by or resulted from the failure of Parent or Purchaser
to perform, in any material respect, any of their material covenants or
agreements contained in this Agreement, or the material breach by
Parent or Purchaser of any of their material representations or
warranties contained in this Agreement, or (ii) prior to the purchase
of Shares pursuant to the Offer, the Board or any committee thereof
shall have withdrawn or modified in a manner adverse to Purchaser or
Parent its approval or recommendation of the Offer, this Agreement, the
Merger or any other Transaction, or shall have recommended or approved
any Acquisition Proposal, or shall have resolved to do any of the
foregoing; or
(d) By the Company, upon approval of the Board, if (i) due to
an occurrence or circumstance that would result in a failure to satisfy
any of the conditions set forth in Annex A hereto, Purchaser shall have
(A) failed to commence the Offer within 60 days following the date of
this Agreement, (B) terminated the Offer without having accepted any
Shares for payment thereunder or (C) failed to pay for Shares pursuant
to the Offer within 90 days following the commencement of the Offer
(provided, however, that the applicable time period shall be extended
until the fifth business day following expiration or termination of any
applicable waiting period under the HSR Act), unless such action or
inaction under (A), (B) or (C) shall have been caused by or resulted
from the failure of the Company to perform, in any material respect,
any of its material covenants or agreements contained in this Agreement
or the material breach by the Company of any of its material
representations or warranties contained in this Agreement, (ii) prior
to the purchase of Shares pursuant to the Offer, (A) any representation
or warranty of Parent or Purchaser in this Agreement shall not be true
and correct except to the extent that the failure of such
representation or warranty to be true and correct could not reasonably
be
<PAGE> 34
expected to prevent or materially delay consummation of the Offer or
the Merger or otherwise prevent or materially delay Parent or Purchaser
from performing its obligations under this Agreement, or (B) Parent or
Purchaser shall have failed to perform any obligation or to comply with
any agreement or covenant to be performed or complied with by it under
this Agreement, except to the extent such non-performance or
non-compliance could not reasonably be expected to prevent or
materially delay consummation of the Offer or the Merger or otherwise
materially reduce Purchaser's or Parent's obligations under the
Agreement, (iii) the Offer has not been timely commenced (except as a
result of actions or omissions by the Company) in accordance with
Section 1.01, or (iv) prior to the purchase of Shares pursuant to the
Offer, the Board determines in good faith that it is required to do so
by its fiduciary duties under applicable law, based upon advice of
outside legal counsel in order to enter into a definitive agreement
with respect to a Superior Proposal, upon five days' prior written
notice to Parent, setting forth in reasonable detail the identity of
the person making, and the final terms and conditions of, the Superior
Proposal and after giving effect to any concessions that may be offered
by Parent; provided, however, that any termination of this Agreement
pursuant to Section 8.01(d)(i) or (iv) shall not be effective until the
Company has made full payment of all amounts required to be paid under
Section 8.03.
SECTION 8.02. Effect of Termination. In the event of the
termination of this Agreement pursuant to Section 8.01, this Agreement shall
forthwith become void, and there shall be no liability on the part of any party
hereto, except (i) as set forth in Sections 8.03 and (ii) nothing herein shall
relieve any party from liability for any breach hereof.
SECTION 8.03. Fees. (a) In the event that:
(i) any person (including, without limitation, the Company or
any affiliate thereof), other than Parent or any affiliate of Parent,
shall have become the beneficial owner of 30% or more than the
then-outstanding shares of Company Common Stock and Company Preferred
Stock (determined as if shares of Company Preferred Stock have been
converted into shares of Company Common Stock) and this Agreement shall
have been terminated pursuant to Section 8.01(c) or (d); or
(ii) this Agreement is terminated (x) pursuant to Section
8.01(c)(ii) or 8.01(d)(iv) or (y) pursuant to Section 8.01(c)(i) or
8.01(d)(i), to the extent that the failure to commence, the termination
or the failure to accept any Shares for payment, as set forth in
Section 8.01(c)(i) or 8.01(d)(i), as the case may be, shall relate to
the failure of the Company to perform, in any material respect, any of
its material covenants or agreements contained in this Agreement or the
material breach by the Company of any of its material representations
or warranties contained in this Agreement;
then, in any such event, the Company shall pay Parent a fee of $10 million,
which amount shall be payable in immediately available funds. Payment of such
amount shall be payable within one business day following termination of this
Agreement.
<PAGE> 35
(b) In the event that any person shall have commenced,
publicly proposed or communicated to the Company an Acquisition Proposal that is
publicly disclosed and (x) the Offer shall have remained open for at least 20
business days, (y) the Minimum Condition shall not have been satisfied and (z)
this Agreement shall have been terminated pursuant to Section 8.01(c) or (d),
then, in any such event, the Company shall pay Parent: (i) a fee of $5 million
within one business day following termination of this Agreement and (ii) if the
Company enters into an agreement in respect of an Acquisition Proposal within 12
months of the termination of this Agreement, an additional fee of $7 million
payable within one business day following consummation of an Acquisition
Proposal.
(c) The fee payable pursuant to Section 8.03(a) or the fee
payable pursuant to Section 8.03(b), as applicable, is referred to herein as the
"Fee".
(d) All costs and expenses incurred in connection with this
Agreement, the Stockholders Agreements and the Transactions shall be paid by the
party incurring such expenses, whether or not any Transaction is consummated.
(e) In the event that the Company shall fail to pay the Fee
when due, the Company shall be responsible for, and shall pay to Parent and
Purchaser, the costs and expenses actually incurred or accrued by Parent and
Purchaser (including, without limitation, fees and expenses of counsel) in
connection with the collection under and enforcement of this Section 8.03,
together with interest on such unpaid Fee, commencing on the date that the Fee
became due, at a rate equal to the rate of interest publicly announced by
Citibank, N.A, from time to time, in the City of New York, as such bank's Base
Rate plus 5.0%.
(f) Parent agrees that, in the event that Parent has received
the Fee when required to be received pursuant to this Article VIII, it shall not
(i) assert or pursue in any manner, directly or indirectly, any claim or cause
of action based in whole or in part upon alleged tortious or other interference
with rights under this Agreement against any entity or person submitting an
Acquisition Proposal or (ii) assert or pursue in any manner, directly or
indirectly, any claim or cause of action against the Company or any of its
officers or directors for breach of this Agreement based in whole or in part
upon its or their receipt, consideration, recommendation, or approval of an
Acquisition Proposal or the Company's exercise of its right to terminate this
Agreement other than any claim or cause of action against the Company or any of
its officers or directors arising out of or in connection with an alleged breach
of Section 6.05; provided that the Company and any third parties to a Superior
Proposal irrevocably waive in writing their right, if any, to contest or object
to payment of the Fee or any portion thereof which shall have been paid or be
due to Parent in accordance with this Article VIII. In no event shall the Fee be
paid under more than one of the Sections set forth above or in an amount in
excess of $10 million.
SECTION 8.04. Amendment. Subject to Section 6.03, this
Agreement may be amended by the parties hereto by action taken by or on behalf
of their respective Boards of Directors at any time prior to the Effective Time;
provided, however, that, after the approval and adoption of this Agreement by
the stockholders of the Company, no amendment may be made
<PAGE> 36
that would reduce the amount or change the type of consideration into which each
Share shall be converted upon consummation of the Merger or that would otherwise
violate Section 251(d) of Delaware Law. This Agreement may not be amended except
by an instrument in writing signed by the parties hereto.
SECTION 8.05. Waiver. At any time prior to the Effective Time,
any party hereto may (i) extend the time for the performance of any obligation
or other act of any other party hereto, (ii) waive any inaccuracy in the
representations and warranties of another party contained herein or in any
document delivered pursuant hereto and (iii) waive compliance with any agreement
of another party contained herein. Any such extension or waiver shall be valid
if set forth in an instrument in writing signed by the party or parties to be
bound thereby.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations and Warranties.
The representations and warranties in this Agreement shall terminate at the
Effective Time or upon the termination of this Agreement pursuant to Section
8.01, as the case may be.
SECTION 9.02. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person, by
telecopy, or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice given in accordance
with this Section 9.02):
if to Parent or Purchaser:
Hochtief AG
Opernplatz 2
45128 Essen
Germany
Telecopier No.: (011) 49-201-824-2859
Attention: Dr. Ing. Bernhard Burklin
with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Telecopier No: (212) 848-7179
Attention: Spencer D. Klein, Esq.
<PAGE> 37
if to the Company:
The Turner Corporation
375 Hudson Street
New York, New York 10014
Telecopier No.: (212) 229-6487
Attention: Sara J. Gozo, Esq.
with a copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10019
Telecopier No.: (212) 859-4000
Attention: Kenneth R. Blackman, Esq.
SECTION 9.03. Certain Definitions. For purposes of this
Agreement, the term:
(a) "affiliate" of a specified person means a person who,
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified person;
(b) "beneficial owner", with respect to any Shares, means a
person who shall be deemed to be the beneficial owner of such Shares
(i) which such person or any of its affiliates or associates (as such
term is defined in Rule 12b-2 promulgated under the Exchange Act)
beneficially owns, directly or indirectly, (ii) which such person or
any of its affiliates or associates has, directly or indirectly, (A)
the right to acquire (whether such right is exercisable immediately or
subject only to the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of consideration
rights, exchange rights, warrants or options, or otherwise, or (B) the
right to vote pursuant to any agreement, arrangement or understanding
or (iii) which are beneficially owned, directly or indirectly, by any
other persons with whom such person or any of its affiliates or
associates or person with whom such person or any of its affiliates or
associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of any Shares;
(c) "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;
(d) "control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly, or
as trustee or executor, of the power to direct or cause the direction
of the management and policies of a person, whether through the
ownership of voting securities, as trustee or executor, by contract or
credit
<PAGE> 38
arrangement or otherwise;
(e) "Environmental Laws" means any federal, state, local or
foreign laws relating to (A) releases or threatened releases of
Hazardous Substances or materials containing Hazardous Substances; (B)
the manufacture, handling, transport, use, treatment, storage or
disposal of Hazardous Substances or materials containing Hazardous
Substances; or (C) otherwise relating to pollution or protection of the
environment, health, safety or natural resources;
(f) "fully diluted basis" means after giving effect to the
issuance of all shares of Company Common Stock issuable upon the
conversion of shares of Company Preferred Stock or any other
convertible securities or upon the exercise of any options, warrants or
rights (other than the Rights);
(g) "Hazardous Substances" means (A) those substances defined
in or regulated under the following federal statutes and their state
counterparts, as each may be amended from time to time, and all
regulations thereunder: the Hazardous Materials Transportation Act, the
Resource Conservation and Recovery Act, the Comprehensive Environmental
Response, Compensation and Liability Act, the Clean Water Act, the Safe
Drinking Water Act, the Atomic Energy Act, the Federal Insecticide,
Fungicide, and Rodenticide Act and the Clean Air Act; (B) petroleum and
petroleum products, including crude oil and any fractions thereof; (C)
natural gas, synthetic gas, and any mixtures thereof; (D)
polychlorinated biphenyls, asbestos and radon; (E) any other
contaminant; and (F) any substance, material or waste regulated by any
federal, state, local or foreign Governmental Authority pursuant to any
Environmental Law;
(h) "knowledge of the Company" means the knowledge of the
executive officers of the Company, after due inquiry;
(i) "person" means an individual, corporation, partnership,
limited partnership, limited liability company, syndicate, person
(including, without limitation, a "person" as defined in Section
13(d)(3) of the Exchange Act), trust, association or entity or
government, political subdivision, agency or instrumentality of a
government; and
(j) "subsidiary" or "subsidiaries" of the Company, the
Surviving Corporation, Parent or any other person means an affiliate
controlled by such person, directly or indirectly, through one or more
intermediaries.
SECTION 9.04. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the Transactions is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a
<PAGE> 39
mutually acceptable manner in order that the Transactions be consummated as
originally contemplated to the fullest extent possible.
SECTION 9.05. Entire Agreement; Assignment. This Agreement and
the Stockholders Agreements constitute the entire agreement among the parties
with respect to the subject matter hereof and supersede all prior agreements and
undertakings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof. This Agreement shall not be assigned by
operation of law or otherwise, except that Parent and Purchaser may assign all
or any of their rights and obligations hereunder to any affiliate of Parent,
provided that no such assignment shall relieve the assigning party of its
obligations hereunder if such assignee does not perform such obligations.
SECTION 9.06. Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto, and nothing
in this Agreement, express or implied, is intended to or shall confer upon any
other person any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement, other than Section 6.07 (which is intended to be for
the benefit of the persons covered thereby and may be enforced by such persons).
SECTION 9.07. Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
were not performed in accordance with the terms hereof and that the parties
shall be entitled to specific performance of the terms hereof, in addition to
any other remedy at law or in equity.
SECTION 9.08. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York (other
than those provisions set forth herein which are required to be governed by
Delaware Law). All actions and proceedings arising out of or relating to this
Agreement shall be heard and determined in any New York state or federal court
sitting in The City of New York. The parties hereto hereby (i) submit to the
exclusive jurisdiction of any New York state or federal court sitting in The
City of New York for the purpose of any Action arising out of or relating to
this Agreement brought by any party hereto, and (ii) waive, and agree not to
assert by way of motion, defense, or otherwise, in any such Action, any claim
that it is not subject personally to the jurisdiction of the above-named courts,
that its property is exempt or immune from attachment or execution, that the
Action is brought in an inconvenient forum, that the venue of the Action is
improper, or that this Agreement or the Transactions may not be enforced in or
by any of the above-named courts.
SECTION 9.09. Waiver of Jury Trial. Each of the parties hereto
hereby waives to the fullest extent permitted by applicable law any right it may
have to a trial by jury with respect to any actions or proceedings directly or
indirectly arising out of, under or in connection with this Agreement or the
Transactions.
SECTION 9.10. Headings. The descriptive headings contained in
this Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
SECTION 9.11. Counterparts. This Agreement may be executed and
delivered
<PAGE> 40
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
<PAGE> 41
IN WITNESS WHEREOF, Parent, Purchaser and the Company have
caused this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
HOCHTIEF AG
By /s/ Hans-Peter Keitel
---------------------------------------
Name: Hans-Peter Keitel
Title: President and CEO
By /s/ Hans-Wolfgang Koch
----------------------------------------
Name: Hans-Wolfgang Koch
Title: Member of the Executive Board
BETA ACQUISITION CORP.
By /s/ Hans-Wolfgang Koch
-----------------------------------------
Name: Hans-Wolfgang Koch
Title: Member of the Executive Board
THE TURNER CORPORATION
By /s/ E. T. Gravette, Jr.
------------------------------------------
Name: E. T. Gravette, Jr.
Title: Chairman and CEO
<PAGE> 42
ANNEX A
Conditions to the Offer
Notwithstanding any other provision of the Offer, Purchaser
shall not be required to accept for payment Shares tendered pursuant to the
Offer, and may extend, terminate or amend the Offer, if (i) immediately prior to
the expiration of the Offer, the Minimum Condition shall not have been
satisfied, (ii) any applicable waiting period under the HSR Act shall not have
expired or been terminated prior to the expiration of the Offer, or (iii) at any
time on or after the date of this Agreement and prior to the expiration of the
Offer, any of the following conditions shall exist:
(a) there shall have been enacted, issued, promulgated,
enforced or entered any Law (whether temporary, preliminary or
permanent) which is then in effect and which (i) makes illegal,
materially delays, or otherwise, directly or indirectly, restrains or
prohibits or makes materially more costly, the making of the Offer, the
acceptance for payment of, or payment for, any Shares by Parent,
Purchaser or any other affiliate of Parent or the purchase of Shares
pursuant to any Stockholders Agreement, or the consummation of any
other Transaction, or obtains material damages in connection with any
Transaction; (ii) prohibits or limits materially the ownership or
operation by the Company, Parent or any of their subsidiaries of all or
any of the business or assets of the Company, Parent or any of their
subsidiaries that is material to either Parent and its subsidiaries or
the Company and its Subsidiaries, in either case, taken as a whole, or
compels the Company, Parent or any of their subsidiaries, as a result
of the Transactions, to dispose of or to hold separate all or any
portion of the business or assets of the Company, Parent or any of
their subsidiaries that is material to either Parent and its
subsidiaries or the Company and its Subsidiaries, in either case, taken
as a whole; (iii) imposes or confirms limitations on the ability of
Parent, Purchaser or any other affiliate of Parent to exercise
effectively full rights of ownership of any Shares, including, without
limitation, the right to vote any Shares acquired by Purchaser pursuant
to the Offer or any Stockholders Agreement or otherwise on all matters
properly presented to the Company's stockholders, including, without
limitation, the approval and adoption of this Agreement and the Merger;
(iv) requires divestiture by Parent, Purchaser or any other affiliate
of Parent of any Shares; or (v) which otherwise has a Material Adverse
Effect; provided that Purchaser shall extend or amend, and not
terminate, the Offer pursuant to this paragraph (a) if the applicable
law is a temporary or preliminary order, decree or injunction and the
Company is using all reasonable efforts to have such order, decree or
injunction reversed, vacated or lifted; and provided, further that
Purchaser's right to invoke this condition is subject to Parent and
Purchaser having used all reasonable efforts to prevent the enactment,
issuance, promulgation, enforcement or entry of such Law;
(b) there shall have been instituted or be pending any Action
instituted by or
<PAGE> 43
on behalf of any Governmental Authority seeking the entry of any order,
decree or injunction (whether temporary, preliminary or permanent) that
is reasonably likely to result, directly or indirectly, in any of the
consequences referred to in clauses (i) through (v) of paragraph (a)
above;
(c) there shall have occurred any Material Adverse Effect;
(d) there shall have occurred (i) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the
United States or Germany or (ii) any limitation (whether or not
mandatory) by any government or Governmental Authority, on the
extension of credit by banks or other lending institutions;
(e) any representation or warranty of the Company in this
Agreement (i) which is qualified as to Material Adverse Effect shall
not be true and correct, subject to such Material Adverse Effect
qualification, in all respects or (ii) any such representation or
warranty that is not so qualified shall not be true and correct except
to the extent that the failure of such representation or warranty to be
true and correct could not reasonably be expected to have a Material
Adverse Effect or prevent or materially delay consummation of the Offer
or the Merger or otherwise prevent or materially delay the Company from
performing its obligations under this Agreement, in each case as if
such representation or warranty was made as of such time on or after
the date of this Agreement and except that any representation or
warranty that addresses matters only as of a particular date shall not
be true and correct, subject to the qualifications described above, as
of such date;
(f) the Company shall have failed to perform, in any material
respect, any obligation or to comply, in any material respect, with any
agreement or covenant of the Company to be performed or complied with
by it under the Agreement or any Stockholder shall have failed to
perform in any material respect, any obligation or to comply, in any
material respect, with any agreement or covenant of such Stockholder to
be performed or complied with by it under a Stockholders Agreements;
(g) the Agreement shall have been terminated in accordance
with its terms; or
(h) Purchaser and the Company shall have agreed that Purchaser
shall terminate the Offer or postpone the acceptance for payment of or
payment for Shares thereunder;
which, in the reasonable judgment of Purchaser in any such case, and
regardless of the circumstances (including any action or inaction by
Parent or any of its affiliates) giving rise to any such condition,
makes it inadvisable to proceed with such acceptance for payment or
payment.
The foregoing conditions are for the sole benefit of Purchaser
and Parent and may be asserted by Purchaser or Parent regardless of the
circumstances giving rise to any such
<PAGE> 44
condition or may be waived by Purchaser or Parent in whole or in part at any
time and from time to time in their sole discretion. The failure by Parent or
Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right; the waiver of any such right with respect to
particular facts and other circumstances shall not be deemed a waiver with
respect to any other facts and circumstances; and each such right shall be
deemed an ongoing right that may be asserted at any time and from time to time.
<PAGE> 45
ANNEX B
Agreement Respecting the Company Plans
and Other Employee Benefits Matters
1. Following the Effective Time, Parent shall cause the
Company to honor all Company Plans which have been disclosed in Section 3.10(a)
of the Disclosure Schedule; provided that the foregoing shall not prohibit or
restrict the Company from amending, modifying or terminating any Company Plan in
accordance with its terms following the Effective Time.
2. From the Effective Time through at least December 31, 2000
Parent shall cause the Company to continue in effect the annual incentive
program of the Company listed on Section 3.10(a) of the Disclosure Schedule,
subject to such adjustments to the targets under such program as shall be
necessary or advisable to take into account the Transactions and the business of
the Company following the Effective Time. Parent's present intention is to cause
the Company to continue such plan in effect after December 31, 2000.
3. Following the Effective Time, Parent shall cause the
Company to establish a phantom option plan and a phantom restricted stock plan
for senior officers of the Company that will replace the Company's existing
option and restricted stock plans disclosed on Section 3.10(a) of the Disclosure
Schedule. Such phantom option plan shall be similar in nature and scope to the
Company's existing option plan. Such phantom restricted stock plan shall allow
grants in the range of approximately 5.42% of the current equity of the Company
and shall provide that all senior officers will be eligible to participate in
such grants.
4. It is Parent's present intention to operate the businesses
of the Company and the Subsidiaries following the Effective Time in a manner
substantially consistent with the manner in which such businesses are currently
operated. As a result, Parent presently intends that the Company and the
Subsidiaries shall maintain their current names for the foreseeable future and
shall for the foreseeable future be the principal entities through which Parent
conducts the businesses in the United States that are currently conducted by the
Company and the Subsidiaries. Notwithstanding the foregoing, Parent may change
any of the foregoing if it deems advisable in the exercise of its business
judgment.
5. Parent shall cause the Company to continue to maintain
through December 31, 2000 compensation and benefits (including severance but
excluding stock based plans except as otherwise contemplated by this Annex B)
for all continuing directors, officers and employees of the Company and the
Subsidiaries which are, in the aggregate, at least substantially equivalent to
the compensation and benefits (including severance but excluding stock based
plans except as otherwise contemplated by this Annex B) that these persons had
immediately prior to the Effective Time.
6. For purposes of determining eligibility and vesting under
any Purchaser
<PAGE> 46
benefit plans, employees of the Company and the Subsidiaries shall be credited
with their years of service with the Company or the Subsidiaries. To the extent
that any Purchaser benefit plan in which a Company employee participates after
the Effective Time provides medical, dental, vision or other welfare benefits,
Purchaser shall cause all pre-existing condition exclusions and actively at work
requirements of such plan to be waived for such employee and his or her covered
dependents except to the extent such employee and his or her covered dependents
were subject to such requirements under the applicable Company Plans, and
Purchaser shall cause any eligible expenses incurred by such employee on or
before the Effective Time to be taken into account under such plan for purposes
of satisfying all deductible, co-insurance and maximum out-of-pocket
requirements applicable to such employee and his or her covered dependents for
the applicable plan year.
<PAGE> 47
Exhibit (c)(1)
AGREEMENT AND PLAN OF MERGER
Among
HOCHTIEF AG,
BETA ACQUISITION CORP.
and
THE TURNER CORPORATION
Dated as of August 16, 1999
<PAGE> 48
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I
THE OFFER
SECTION 1.01. The Offer................................................................................. 2
SECTION 1.02. Company Action............................................................................ 3
ARTICLE II
THE MERGER
SECTION 2.01. The Merger................................................................................ 5
SECTION 2.02. Effective Time; Closing................................................................... 5
SECTION 2.03. Effect of the Merger...................................................................... 5
SECTION 2.04. Certificate of Incorporation; By-laws..................................................... 5
SECTION 2.05. Directors and Officers.................................................................... 6
SECTION 2.06. Conversion of Securities.................................................................. 6
SECTION 2.07. Employee and Director Stock Options....................................................... 7
SECTION 2.08. Dissenting Shares......................................................................... 8
SECTION 2.09. Surrender of Shares; Stock Transfer Books................................................. 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01. Organization and Qualification; Subsidiaries............................................. 10
SECTION 3.02. Certificate of Incorporation and By-laws................................................. 11
SECTION 3.03. Capitalization........................................................................... 11
SECTION 3.04. Authority Relative to this Agreement..................................................... 12
SECTION 3.05. No Conflict; Required Filings and Consents............................................... 12
SECTION 3.06. Permits; Compliance...................................................................... 13
SECTION 3.07. SEC Filings; Financial Statements........................................................ 14
SECTION 3.08. Absence of Certain Changes or Events..................................................... 15
SECTION 3.09. Absence of Litigation.................................................................... 15
SECTION 3.10. Employee Benefit Plans................................................................... 15
SECTION 3.11. Labor Matters............................................................................ 17
SECTION 3.12. Offer Documents; Schedule 14D-9; Proxy Statement......................................... 18
SECTION 3.13. Real Property and Leases................................................................. 18
SECTION 3.14. Intellectual Property.................................................................... 19
SECTION 3.15. Year 2000 Compliance..................................................................... 19
SECTION 3.16. Taxes.................................................................................... 20
SECTION 3.17. Environmental Matters.................................................................... 21
SECTION 3.18. Amendment to Rights Agreement............................................................ 21
</TABLE>
<PAGE> 49
<TABLE>
<S> <C>
PAGE
SECTION 3.19. Material Contracts....................................................................... 21
SECTION 3.20. Insurance................................................................................ 22
SECTION 3.21. Brokers.................................................................................. 22
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
SECTION 4.01. Corporate Organization................................................................... 23
SECTION 4.02. Authority Relative to This Agreement and the
Stockholders Agreements...................................................... 23
SECTION 4.03. No Conflict; Required Filings and Consents............................................... 23
SECTION 4.04. Financing................................................................................ 24
SECTION 4.05. Absence of Litigation.................................................................... 24
SECTION 4.06. Offer Documents; Proxy Statement......................................................... 24
SECTION 4.07. Brokers.................................................................................. 25
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01. Conduct of Business by the Company Pending the Merger.................................... 25
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Stockholders' Meeting.................................................................... 27
SECTION 6.02. Proxy Statement.......................................................................... 28
SECTION 6.03. Company Board Representation; Section 14(f).............................................. 28
SECTION 6.04. Access to Information; Confidentiality................................................... 29
SECTION 6.05. No Solicitation of Transactions.......................................................... 29
SECTION 6.06. Employee Benefits Matters................................................................ 31
SECTION 6.07. Directors' and Officers' Indemnification and Insurance................................... 31
SECTION 6.08. Notification of Certain Matters.......................................................... 33
SECTION 6.09. Further Action; Reasonable Best Efforts.................................................. 33
SECTION 6.10. Public Announcements..................................................................... 34
SECTION 6.11. Confidentiality Agreement................................................................ 34
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. Conditions to the Merger................................................................. 34
</TABLE>
<PAGE> 50
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination.............................................................................. 35
SECTION 8.02. Effect of Termination.................................................................... 37
SECTION 8.04. Amendment................................................................................ 38
SECTION 8.05. Waiver................................................................................... 38
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations and Warranties........................................... 39
SECTION 9.02. Notices.................................................................................. 39
SECTION 9.03. Certain Definitions...................................................................... 40
SECTION 9.04. Severability............................................................................. 41
SECTION 9.05. Entire Agreement; Assignment............................................................. 42
SECTION 9.06. Parties in Interest...................................................................... 42
SECTION 9.07. Specific Performance..................................................................... 42
SECTION 9.08. Governing Law............................................................................ 42
SECTION 9.09. Waiver of Jury Trial..................................................................... 42
SECTION 9.10. Headings................................................................................. 42
SECTION 9.11. Counterparts............................................................................. 43
ANNEX A Conditions to the Offer
ANNEX B Agreement Respecting the Plans and Other Employee Benefit Matters
</TABLE>
<PAGE> 51
Glossary of Defined Terms
<TABLE>
<CAPTION>
Defined Term Location of Definition
- ------------ ----------------------
<S> <C>
1998 Balance Sheet............................................................. Section 3.07(c)
Action......................................................................... Section 3.09
Acquiring Person............................................................... Section 3.18(a)
Acquisition Proposal........................................................... Section 6.05(a)
affiliate...................................................................... Section 9.03(a)
Agreement...................................................................... Preamble
beneficial owner............................................................... Section 9.03(b)
Blue Sky Laws.................................................................. Section 3.05(b)
Board.......................................................................... Recitals
business day................................................................... Section 9.03(c)
Cash-Out Value................................................................. Section 2.07(c)
Certificate of Merger.......................................................... Section 2.02
Certificates................................................................... Section 2.09(b)
COBRA.......................................................................... Section 3.10(a)
Code........................................................................... Section 3.10(a)
Common Stock Merger Consideration.............................................. Section 2.06(a)
Company........................................................................ Preamble
Company Common Stock........................................................... Recitals
Company Plans.................................................................. Section 3.10(a)
Company Preferred Stock........................................................ Recitals
Company Stock Plans............................................................ Section 2.07(a)
Company Systems................................................................ Section 3.15
Confidentiality Agreement...................................................... Section 6.04(b)
control........................................................................ Section 9.03(d)
Delaware Law................................................................... Recitals
Disclosure Schedule............................................................ Article III
Disinterested Directors........................................................ Section 1.02(b)
Dissenting Shares.............................................................. Section 2.08(a)
Distribution Date.............................................................. Section 3.18(b)
Effective Time................................................................. Section 2.02
Environmental Laws............................................................. Section 9.03(e)
Environmental Permits.......................................................... Section 3.17
ERISA.......................................................................... Section 3.10(a)
ESOP Indebtedness.............................................................. Annex B
Exchange Act................................................................... Section 1.01(a)
Fee............................................................................ Section 8.03(c)
fully diluted basis............................................................ Section 9.03(f)
GAAP........................................................................... Section 3.01(a)
</TABLE>
<PAGE> 52
<TABLE>
<CAPTION>
Defined Term Location of Definition
- ------------ ----------------------
<S> <C>
Governmental Authority......................................................... Section 3.05(b)
Hazardous Substances........................................................... Section 9.03(g)
HSR Act........................................................................ Section 1.01(a)
Indemnified Parties............................................................ Section 6.07(d)
Intellectual Property.......................................................... Section 3.14(c)
IRS............................................................................ Section 3.10(a)
ISO............................................................................ Section 7.01(b)
knowledge of the Company....................................................... Section 9.03(h)
Law............................................................................ Section 3.05(a)
Liens.......................................................................... Section 3.13(b)
Material Adverse Effect........................................................ Section 3.01(a)
Material Contracts............................................................. Section 3.19(a)
Merger......................................................................... Recitals
Minimum Condition.............................................................. Section 1.01(a)
Multiemployer Plan............................................................. Section 3.10(b)
Multiple Employer Plan......................................................... Section 3.10(b)
Offer.......................................................................... Recitals
Offer Documents................................................................ Section 1.01(b)
Offer to Purchase.............................................................. Section 1.01(b)
Option......................................................................... Section 2.07(b)
Parent......................................................................... Preamble
Per Share Amount............................................................... Recitals
Paying Agent................................................................... Section 2.09(a)
Permits........................................................................ Section 3.06
Permitted Liens................................................................ Section 3.13(b)
person......................................................................... Section 9.03(i)
Preferred Stock Merger Consideration........................................... Section 2.06(b)
Proxy Statement................................................................ Section 3.12
Purchaser...................................................................... Preamble
Rights......................................................................... Recitals
Rights Agreement............................................................... Recitals
Schedule 14D-9................................................................. Section 1.02(b)
Schedule 14D-1................................................................. Section 1.01(b)
SEC............................................................................ Section 1.01(a)
SEC Reports.................................................................... Section 3.07(a)
Securities Act................................................................. Section 3.07(a)
Series B Preferred Stock....................................................... Section 3.03
Series C Preferred Stock....................................................... Recitals
Series D Preferred Stock....................................................... Recitals
Series E Preferred Stock....................................................... Section 3.03
</TABLE>
<PAGE> 53
<TABLE>
<CAPTION>
Defined Term Location of Definition
- ------------ ----------------------
<S> <C>
Series F Preferred Stock....................................................... Section 3.03
Shares......................................................................... Recitals
Stock Acquisition Date......................................................... Section 3.18(a)
Stockholders................................................................... Recitals
Stockholders Agreements........................................................ Recitals
Stockholders' Meeting.......................................................... Section 6.01(a)
Steiner Agreement.............................................................. Section 3.03
Subsidiary..................................................................... Section 3.01(a)
subsidiary..................................................................... Section 9.03(j)
Superior Proposal.............................................................. Section 6.05(b)
Surviving Corporation.......................................................... Section 2.01
Taxes.......................................................................... Section 3.16
Transactions................................................................... Section 1.02(a)
Unit........................................................................... Section 2.07(c)
Year 2000 Compliant............................................................ Section 3.15
</TABLE>
<PAGE> 1
Exhibit (c) (2)
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT dated as of August 16, 1999 (this
"Agreement"), among the several stockholders of THE TURNER CORPORATION, a
Delaware corporation (the "Company"), that are parties hereto (each, a
"Stockholder" and, collectively, the "Stockholders"), HOCHTIEF AG, a corporation
organized under the laws of Germany ("Parent"), and BETA ACQUISITION CORP., a
Delaware corporation and an indirect wholly owned subsidiary of Parent
("Purchaser").
WHEREAS, Parent and Purchaser are entering into an Agreement
and Plan of Merger dated as of the date hereof (as amended from time to time,
the "Merger Agreement"; capitalized terms being used herein as defined therein
unless otherwise defined herein), with the Company, pursuant to which (i)
Purchaser agrees to commence a cash tender offer (as such tender offer may
hereafter be amended from time to time, the "Offer") to acquire (A) all the
issued and outstanding shares of Company Common Stock, including the associated
Rights, for $28.625 per share of Company Common Stock (such amount, or any
greater amount per share of Company Common Stock paid pursuant to the Offer,
being the "Per Share Amount") and (B) all the issued and outstanding shares of
Series C Preferred Stock and Series D Preferred Stock (collectively, the
"Company Preferred Stock"), for an amount in cash equal to the product of the
Per Share Amount multiplied by the number of shares of Company Common Stock
issuable upon the conversion of such shares of Company Preferred Stock, in each
case, net to the seller in cash (such amount, or any greater amount paid per
share of Company Preferred Stock pursuant to the Offer, being the "Per Preferred
Share Amount") (such Per Share Amount or Per Preferred Share Amount, as
applicable, being hereinafter the "Purchase Price"); and (ii) following
consummation of the Offer, Purchaser will merge with and into the Company (the
"Merger");
WHEREAS, as of the date hereof, each Stockholder is the record
or beneficial owner of the number of shares of Company Common Stock and/or
shares of Company Preferred Stock set forth on the signature page hereof beneath
such Stockholder's name (with respect to each Stockholder, such Stockholder's
"Existing Shares" and, together with (i) any shares of Company Common Stock or
shares of Company Preferred Stock acquired after the date hereof, whether upon
the exercise of warrants, options, conversion of convertible securities or
otherwise and (ii) any shares of Company Common Stock or shares of Company
Preferred Stock transferred to a Permitted Transferee in accordance with Section
6.01, such Stockholder's "Shares"); and
WHEREAS, as an inducement and a condition to entering into the
Merger Agreement and incurring the obligations set forth therein, including the
Offer, Parent and Purchaser have required that the Stockholders agree to enter
into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein, and intending to be legally
bound hereby, the parties hereto
<PAGE> 2
2
agree as follows:
ARTICLE I
TENDER OF SHARES
SECTION 1.01. Tender of Shares. Each Stockholder, severally
and not jointly, agrees to tender, pursuant to and in accordance with the terms
of the Offer, and not withdraw, all such Stockholder's Shares; provided,
however, that any Stockholder who would incur liability under Section 16(b) of
the Exchange Act as a result thereof shall not be required to tender such Shares
to the extent necessary to avoid such liability. Each Stockholder, severally and
not jointly, acknowledges and agrees that Purchaser's obligation to accept for
payment the Shares in the Offer, including any Shares tendered by such
Stockholder, is subject to the terms and conditions of the Offer.
ARTICLE II
VOTING AGREEMENT
SECTION 2.01. Voting Agreement. Each Stockholder, severally
and not jointly, hereby agrees that, from and after the date hereof and until
the close of business on the 180th day following termination of the Merger
Agreement, at any meeting of the stockholders of the Company, however called,
and in any action by consent of the stockholders of the Company, such
Stockholder will vote (or cause to be voted) such Stockholder's Shares (a) in
favor of the approval and adoption of the Merger Agreement, the Merger and all
the transactions contemplated by the Merger Agreement and this Agreement and
otherwise in such manner as may be necessary to consummate the Merger; (b)
except as otherwise agreed to in writing in advance by Parent, against any
action, proposal, agreement or transaction that would result in a breach of any
covenant, obligation, agreement, representation or warranty of the Company
contained in the Merger Agreement (whether or not theretofore terminated) or of
the Stockholder contained in this Agreement; and (c) against any action,
proposal, agreement or transaction (other than the Merger Agreement or the
Transactions) that could result in any of the conditions to the Company's
obligations under the Merger Agreement (whether or not theretofore terminated)
not being fulfilled or that is intended, or could reasonably be expected, to
impede, interfere or be inconsistent with, delay, postpone, discourage or
adversely affect the Merger Agreement (whether or not theretofore terminated),
the Offer, the Merger or this Agreement, including, but not limited to, any
Superior Proposal.
SECTION 2.02. Irrevocable Proxy. If, and only if, any
Stockholder fails to comply with the provisions of Section 2.01 (as determined
by Parent in its sole discretion), such Stockholder hereby agrees that such
failure shall result, without any further action by such Stockholder, in the
irrevocable appointment of Parent, and each of its officers, as such
Stockholder's attorney and proxy pursuant to the provisions of Section 212(c) of
Delaware Law,
<PAGE> 3
3
with full power of substitution, to vote and otherwise act (by written consent
or otherwise) with respect to such Stockholder's Shares at any meeting of
stockholders of the Company (whether annual or special and whether or not an
adjourned or postponed meeting) or consent in lieu of any such meeting or
otherwise, on the matters and in the manner specified in Section 2.01. THIS
PROXY AND POWER OF ATTORNEY ARE IRREVOCABLE AND COUPLED WITH AN INTEREST AND, TO
THE EXTENT PERMITTED UNDER APPLICABLE LAW, SHALL BE VALID AND BINDING ON ANY
PERSON TO WHOM A STOCKHOLDER MAY TRANSFER ANY OF HIS SHARES IN BREACH OF THIS
AGREEMENT. Each Stockholder hereby revokes all other proxies and powers of
attorney with respect to such Stockholder's Shares that may have heretofore been
appointed or granted (the "Irrevocable Proxy"), and no subsequent proxy or power
of attorney shall be given or written consent executed (and if given or
executed, shall not be effective) by any Stockholder with respect thereto. All
authority herein conferred or agreed to be conferred shall survive the death or
incapacity of any Stockholder and the termination of the Irrevocable Proxy and
any obligation of the Stockholder under this Agreement shall be binding upon the
heirs, personal representatives, successors and assigns of such Stockholder.
SECTION 2.03. Conflicts. In the case of any Stockholder who is
an officer or director of the Company, no provision of this Agreement shall
prevent or interfere with such Stockholder's performance of his or her
obligations, if any, solely in his capacity as an officer or director of the
Company, including, without limitation, the fulfillment of his or her fiduciary
duties under Delaware Law.
ARTICLE III
THE OPTION
SECTION 3.01. Grant of Option. Each Stockholder, severally and
not jointly, hereby grants to Purchaser an irrevocable option (each, an "Option"
and, collectively, the "Options") to purchase all, and not less than all, of
such Stockholder's shares of Company Common Stock and/or such Stockholder's
shares of Company Preferred Stock at the applicable Purchase Price, net to such
Stockholder in cash. Each Option shall expire if not exercised prior to the
close of business on the 180th day following termination of the Merger
Agreement.
SECTION 3.02. Exercise of Option. (a) Any or all of the
Options may be exercised by Purchaser as to any Stockholder, at any time and
from time to time, following termination of the Merger Agreement under
circumstances in which the Fee (or any portion thereof) shall be payable and
prior to the expiration of such Options.
(b) If Purchaser wishes to exercise an Option, Purchaser shall
send a written notice (the "Exercise Notice") to the applicable Stockholder of
its intention to exercise the Option, specifying the place, and, if then known,
the time and the date (the "Closing Date") of the closing (the "Closing") of the
purchase. The Closing Date shall occur on the third business
<PAGE> 4
4
day (or such longer period as may be required by applicable law or regulation)
after the later of (i) the date on which such Exercise Notice is delivered and
(ii) the satisfaction of the conditions set forth in Section 3.02(d). For the
purposes of this Agreement, the term "business day" means a Saturday, a Sunday
or a day on which banks are not required or authorized by law or executive order
to be closed in the City of New York.
(c) At the Closing, (i) each Stockholder whose Shares are
being purchased shall deliver to Purchaser (or its designee) all of such
Stockholder's Shares by delivery of a certificate or certificates evidencing
such Shares in the denominations designated by Purchaser, in its Exercise Notice
delivered pursuant to Section 3.02(b), duly endorsed to Purchaser or accompanied
by stock powers duly executed in favor of Purchaser, with all necessary stock
transfer stamps affixed, and (ii) Purchaser shall pay to each such Stockholder
the aggregate Purchase Price for such Stockholder's Shares.
(d) The Closing shall be subject to the satisfaction of each
of the following conditions:
(i) No Governmental Authority shall have enacted,
issued, promulgated, enforced or entered any Law (whether temporary,
preliminary or permanent) which is then in effect and has the effect of
making the acquisition of Shares by Purchaser pursuant to the exercise
of the Options illegal or otherwise restricting, preventing or
prohibiting consummation of the purchase and sale of the Shares
pursuant to the exercise of the Options; and
(ii) any waiting period applicable to the
consummation of the purchase and sale of the Shares pursuant to the
exercise of the Options under the HSR Act shall have expired or been
terminated.
SECTION 3.03. Recapture. In the event Purchaser sells any
Shares acquired pursuant to the exercise of an Option hereunder within the
two-year period following the applicable Closing at a price in excess of the
Purchase Price for such Shares, Purchaser shall promptly pay to the applicable
Stockholder an amount equal to such excess (less any taxes incurred by Purchaser
in connection therewith).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each Stockholder, severally and not jointly, hereby represents
and warrants to Parent and to Purchaser in respect of such Stockholder as
follows:
SECTION 4.01. Organization, Qualification. (a) Such
Stockholder, if it is an
<PAGE> 5
5
individual, has all legal capacity to enter into this Agreement, to carry out
his or her obligations hereunder and to consummate the transactions contemplated
hereby.
(b) Such Stockholder, if it is a corporation or other legal
entity, (i) is duly organized, validly existing and, if applicable, in good
standing under the laws of the jurisdiction of its incorporation or formation
and has the requisite power and authority and all necessary governmental
approvals to own, lease and operate its properties and to carry on its business
as it is now being conducted, except where the failure to be so organized,
existing or, if applicable, in good standing or to have such power, authority
and governmental approvals would not prevent or materially delay consummation of
the transactions contemplated by this Agreement or otherwise prevent or
materially delay such Stockholder from performing its obligations under this
Agreement and (ii) is duly qualified or licensed as a foreign corporation to do
business, and is, if applicable, in good standing, in each jurisdiction where
the character of the properties owned, leased or operated by such Stockholder or
the nature of its business makes such qualification or licensing necessary,
except for such failures to be so qualified or licensed and, if applicable, in
good standing that would not prevent or materially delay consummation of the
transactions contemplated by this Agreement or otherwise prevent or materially
delay such Stockholder from performing its obligations under this Agreement.
(c) Such Stockholder, if it is a corporation, has heretofore
furnished to Parent and Purchaser a complete and correct copy of the certificate
of incorporation and the by-laws or equivalent organizational documents, each as
amended to date, of such Stockholder. Such Stockholder, if it is a trust, has
heretofore furnished to Parent and Purchaser a complete and correct copy of the
trust agreement or equivalent agreement, as amended to date, of such
Stockholder. Such certificates of incorporation, by-laws or equivalent
organizational documents and any of the provisions of such certificate of
incorporation, by-laws or equivalent organizational documents are in full force
and effect. Such Stockholder is not in violation of any of the provisions of its
certificate of incorporation, by-laws or equivalent organizational documents.
SECTION 4.02. Authority Relative to this Agreement. Such
Stockholder has all necessary power and authority to execute and deliver this
Agreement, to perform such Stockholder's obligations hereunder and to consummate
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by such Stockholder and constitutes a legal, valid and binding
obligation of such Stockholder, enforceable against such Stockholder in
accordance with its terms.
SECTION 4.03. No Conflict. (a) The execution and delivery of
this Agreement by such Stockholder do not, and the performance of this Agreement
by such Stockholder shall not, (i) conflict with or violate the certificate of
incorporation or by-laws of such Stockholder that is a corporation, (ii)
assuming satisfaction of the requirements set forth in Section 4.03(b) below,
conflict with or violate the terms of any trust agreements or equivalent
organizational documents of any Stockholder that is a trust, (iii) conflict with
or violate any Law applicable to such Stockholder or by which the Shares owned
by such Stockholder are bound or affected or
<PAGE> 6
6
(iv) result in any breach of, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, or result
in the creation of a lien or encumbrance on any of the Shares owned by such
Stockholder pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which such Stockholder is a party or by which such Stockholder or the Shares
owned by such Stockholder are bound or affected, except for any such conflicts,
violations, breaches, defaults or other occurrences that would not prevent or
materially delay consummation of the transactions contemplated by this Agreement
or otherwise prevent or materially delay such Stockholder from performing its
obligations under this Agreement.
(b) The execution and delivery of this Agreement by such
Stockholder do not, and the performance of this Agreement by such Stockholder
shall not, require any consent, approval, authorization or permit of, or filing
with or notification to, any Governmental Authority, except (i) for applicable
requirements, if any, of the Exchange Act, Blue Sky Laws, state takeover laws
and the pre-merger notification requirements of the HSR Act, and (ii) where the
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not prevent or materially delay
consummation of the transactions contemplated by this Agreement, or otherwise
prevent such Stockholder from performing its material obligations under this
Agreement.
SECTION 4.04. Title to the Shares. As of the date hereof, such
Stockholder is the record or beneficial owner of the number of shares of Company
Common Stock, Series C Preferred Stock and/or Series D Preferred Stock set forth
beneath such Stockholder's name on the signature page hereof. Such Shares are
all the securities of the Company owned, either of record or beneficially, by
such Stockholder (other than Shares owned by others as to which such Stockholder
may also be deemed a beneficial owner). The Shares owned by such Stockholder are
owned free and clear of all Liens, other than any Liens created by this
Agreement. Except as provided in this Agreement, such Stockholder has not
appointed or granted any proxy, which appointment or grant is still effective,
with respect to the Shares owned by such Stockholder. At the Closing, such
Stockholder will deliver, and upon such delivery and payment of the Purchase
Price therefor, as applicable, Purchaser will receive good, valid and marketable
title to such Stockholder's Shares free and clear of any Liens, other than
pursuant to this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser hereby, jointly and severally, represent
and warrant to each Stockholder as follows:
SECTION 5.01. Corporate Organization. Each of Parent and
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the
<PAGE> 7
7
jurisdiction of its incorporation and has the requisite corporate power and
authority and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted, except
where the failure to be so organized, existing or in good standing or to have
such power, authority and governmental approvals would not prevent or materially
delay consummation of the transactions contemplated by this Agreement or
otherwise prevent or materially delay Parent or Purchaser from performing its
obligations under this Agreement.
SECTION 5.02. Authority Relative to this Agreement. Each of
Parent and Purchaser has all necessary corporate power and authority to execute
and deliver this Agreement and to perform its obligations hereunder. The
execution and delivery of this Agreement by Parent and Purchaser and the
performance by Parent and Purchaser of their obligations hereunder have been
duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of Parent or Purchaser is necessary to
authorize this Agreement. This Agreement has been duly and validly executed and
delivered by Parent and Purchaser and, assuming due authorization, execution and
delivery by the Stockholders, constitutes a legal, valid and binding obligation
of each of Parent and Purchaser enforceable against each of Parent and Purchaser
in accordance with its terms.
SECTION 5.03. No Conflict; Required Filings and Consents. (a)
The execution and delivery of this Agreement by Parent and Purchaser do not, and
the performance of this Agreement by Parent and Purchaser will not, (i) conflict
with or violate the certificate of incorporation or by-laws or equivalent
organizational documents of Parent or Purchaser, (ii) assuming satisfaction of
the requirements set forth in 5.03(b) below, conflict with or violate any Law
applicable to Parent or Purchaser or by which any property or asset of either of
them is bound or affected, or (iii) result in any breach of, or constitute a
default (or an event which, with notice or lapse of time or both, would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or other
encumbrance on any property or asset of Parent or Purchaser pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Parent or Purchaser is a
party or by which Parent or Purchaser or any property or asset of either of them
is bound or affected, except, with respect to clauses (ii) and (iii), any such
conflicts, violations, breaches, defaults or other occurrences that would not
prevent or materially delay consummation of the transactions contemplated by
this Agreement or otherwise prevent or materially delay Parent or Purchaser from
performing its obligations under this Agreement.
(b) The execution and delivery of this Agreement by Parent and
Purchaser do not, and the performance of this Agreement by Parent and Purchaser
will not, require any consent, approval, authorization or permit of, or filing
with, or notification to, any Governmental Authority, except (i) for applicable
requirements, if any, of the Exchange Act, Blue Sky Laws and state takeover laws
and the pre-merger notification requirements of the HSR Act, and (ii) where the
failure to obtain such consents, approvals, authorizations or permits, or to
make
<PAGE> 8
8
such filings or notifications, would not prevent or materially delay
consummation of the transactions contemplated by this Agreement, or otherwise
prevent Parent or Purchaser from performing their material obligations under
this Agreement.
SECTION 5.04. Investment Intent. The purchase of Shares from
the Stockholders pursuant to this Agreement is for the account of Purchaser
solely for the purpose of investment and not with a view to, or for offer or
sale in connection, with any distribution thereof within the meaning of the
Securities Act.
ARTICLE VI
COVENANTS OF THE STOCKHOLDERS
SECTION 6.01. No Disposition or Encumbrance of Shares. Each
Stockholder, severally and not jointly, hereby agrees that, except as
contemplated by this Agreement, such Stockholder shall not (i) sell, transfer,
tender, assign, contribute to the capital of any entity, hypothecate, give or
otherwise dispose of, grant a proxy or power of attorney with respect to,
deposit into any voting trust, or create or permit to exist any Liens of any
nature whatsoever with respect to, any of such Stockholder's Shares (or agree or
consent to, or offer to do, any of the foregoing), (ii) take any action that
would make any representation or warranty of such Stockholder herein untrue or
incorrect in any material respect or have the effect of preventing or disabling
such Stockholder from performing such Stockholder's obligations hereunder or
(iii) directly or indirectly, initiate, solicit or encourage any person to take
actions that could reasonably be expected to lead to the occurrence of any of
the foregoing; provided that each Stockholder shall be entitled to transfer all
or any portion of such Stockholder's Shares to any Permitted Transferee who or
which, as applicable, agrees in writing to be bound by the provisions of this
Agreement. As used herein, "Permitted Transferee" means, in the case of any
Stockholder who is a natural person and who is a signatory to this Agreement on
the date hereof, a person who is the descendent or spouse of such Stockholder or
a partnership, corporation or trust the entire beneficial interest of which is
owned or controlled by such descendant or spouse and to whom or to which, as
applicable, Shares are transferred from such Stockholder (i) by will or the laws
of descent and distribution or (ii) by gift without consideration of any kind.
SECTION 6.02. No Solicitation of Transactions. Each
Stockholder, severally and not jointly, agrees that between the date of this
Agreement and the date of termination of the Merger Agreement, such Stockholder
will not, directly or indirectly, through any officer, agent or otherwise, (a)
solicit, initiate, accept or knowingly encourage the submission of any
Acquisition Proposal, or (b) participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to, or
otherwise cooperate in any way, or assist or participate in, facilitate or
encourage any proposal that constitutes, or may reasonably be expected to lead
to an Acquisition Proposal. Each Stockholder shall, and shall direct or cause
its directors, officers, employees, representatives and agents to, immediately
cease and cause to be terminated any discussions or negotiations with any
parties that may be ongoing with respect to
<PAGE> 9
9
any Acquisition Proposal. Each Stockholder shall promptly advise Parent orally
and in writing of any Acquisition Proposal or any request for information with
respect to any Acquisition Proposal, the material terms and conditions of such
Acquisition Proposal or request and the identity of the person making such
Acquisition Proposal or request.
SECTION 6.03. Further Action; Reasonable Best Efforts. Upon
the terms and subject to the conditions hereof, Parent, Purchaser and each
Stockholder shall (i) if necessary, make promptly their respective filings, and
thereafter make any other required submissions, under the HSR Act, with respect
to this Agreement and (ii) use their reasonable best efforts to take, or cause
to be taken, all appropriate action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective this Agreement, including, without limitation,
using its reasonable best efforts to obtain all Permits, consents, approvals,
authorizations, qualifications and orders of Governmental Authorities and
parties to contracts with the Company and the Subsidiaries as are necessary for
the consummation of this Agreement; provided that neither Purchaser nor Parent
will be required by this Section 6.03 to take any action, including entering
into any consent decree, that requires the divestiture of a material amount of
assets of any of Purchaser or Parent or their respective subsidiaries. In case
any further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of each party to this Agreement
shall use their reasonable best efforts to take all such action.
ARTICLE VII
TERMINATION
SECTION 7.01. Termination. The Stockholders' obligation
hereunder to tender, and not withdraw, their Shares pursuant to the Offer shall
terminate on the expiration date of the Offer. The Options (including any Option
as to which an Exercise Notice has been delivered but for which the Closing has
not occurred) shall terminate in accordance with the provisions of Section
3.02(a). The remaining provisions of this Agreement shall terminate, and no
party shall have any rights or obligations hereunder and this Agreement shall
become null and void and have no further effect upon the earliest of (a) the
effective time of the Merger and (b) the close of business on the 180th day
following the termination of the Merger Agreement. Nothing in this Section 7.01
shall relieve any party of liability for any breach of this Agreement. Parent
and Purchaser acknowledge that, in the event of termination of this Agreement,
Stockholders shall no longer have the obligation to tender, and may withdraw,
their Shares.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendment. This Agreement may not be amended
except by an instrument in writing signed by all the parties hereto.
<PAGE> 10
10
SECTION 8.02. Waiver. Any party to this Agreement may (i)
extend the time for the performance of any obligation or other act of any other
party hereto, (ii) waive any inaccuracy in the representations and warranties of
another party contained herein or in any document delivered pursuant hereto and
(iii) waive compliance with any agreement of another party contained herein. Any
such extension or waiver shall be valid if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
SECTION 8.03. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person, by
telecopy, or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice given in accordance
with this Section 8.03):
(a) if to Heinrich Baumann-Steiner, A. Gary Fieger, A. Gary Fieger
Associates, Inc., Peter K. Steiner and EBSPSW Holding AG,
addressed to it at:
Hagenholzstrasse 60
8050 Zurich
Switzerland
Telecopy: 011-411-305-2440
Attention: Heinrich Baumann-Steiner
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Telecopy: (212) 558-3588
Attention: Richard R. Howe, Esq.
(b) if to any other Stockholder, addressed to such Stockholder:
c/o The Turner Corporation
375 Hudson Street
New York, New York 10014
Telecopy: (212) 229-6487
Attention: Sara J. Gozo, Esq.
with a copy to:
<PAGE> 11
11
Fried, Frank, Harris Shriver & Jacobson
One New York Plaza
New York, New York 10019
Telecopy: (212) 859-4000
Attention: Kenneth R. Blackman, Esq.
(c) if to Parent or Purchaser:
Hochtief AG
Opernplatz 2
45128 Essen
Germany
Telecopy: 011-49-201-824-2859
Attention: Dr. Ing. Bernhard Burklin
with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Telecopy: (212) 848-7179
Attention: Spencer D. Klein, Esq.
SECTION 8.04. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated by this Agreement is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated by this Agreement be consummated as originally contemplated to the
fullest extent possible.
SECTION 8.05. Further Assurances. Each Stockholder, Parent and
Purchaser will execute and deliver all such further documents and instruments
and take all such further action as may be necessary in order to consummate the
transactions contemplated hereby.
SECTION 8.06. Assignment. This Agreement shall not be assigned
by operation of law or otherwise, except that Parent and Purchaser may assign
all or any of their rights and obligations hereunder to any affiliate of Parent,
provided that no such assignment shall relieve Parent or Purchaser of its
obligations hereunder if such assignee does not perform such obligations.
<PAGE> 12
12
SECTION 8.07. Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto, and nothing
in this Agreement, express or implied, is intended to or shall confer upon any
other person any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.
SECTION 8.08. Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
were not performed in accordance with the terms hereof and that the parties
shall be entitled to specific performance of the terms hereof, in addition to
any other remedy at law or in equity.
SECTION 8.09. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York. All
actions and proceedings arising out of or relating to this Agreement shall be
heard and determined in any New York state or federal court sitting in The City
of New York. The parties hereto hereby (i) submit to the exclusive jurisdiction
of any New York state or federal court sitting in The City of New York for the
purpose of any Action arising out of or relating to this Agreement brought by
any party hereto, and (ii) waive, and agree not to assert by way of motion,
defense, or otherwise, in any such Action, any claim that it is not subject
personally to the jurisdiction of the above-named courts, that its property is
exempt or immune from attachment or execution, that the Action is brought in an
inconvenient forum, that the venue of the Action is improper, or that this
Agreement may not be enforced in or by any of the above-named courts.
SECTION 8.10. Waiver of Jury Trial. Each of the parties hereto
hereby waives to the fullest extent permitted by applicable law any right it may
have to a trial by jury with respect to any actions or proceedings directly or
indirectly arising out of, under or in connection with this Agreement.
SECTION 8.11. Expenses. Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants, incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses, whether or not the Closing
shall have occurred.
SECTION 8.12. Headings. The descriptive headings contained in
this Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
SECTION 8.13. Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
<PAGE> 13
13
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the day and year first above written.
/s/ ELLIS T. GRAVETTE, JR.
-----------------------------
Name: Ellis T. Gravette, Jr.
Shares of Company
Common Stock: 95,855
/s/ THOMAS C. LEPPERT
-----------------------------
Name: Thomas C. Leppert
Shares of Company
Common Stock: 0
/s/ ROBERT E. FEE
-----------------------------
Name: Robert E. Fee
Shares of Company
Common Stock: 15,350
/s/ LEIF LOMO
-----------------------------
Name: Leif Lomo
Shares of Company
Common Stock: 4,500
/s/ G. JEFFREY RECORDS, JR.
-----------------------------
Name: G. Jeffrey Records, Jr.
Shares of Company
Common Stock: 123,248
/s/ WALTER G. EHLERS
-----------------------------
Name: Walter G. Ehlers
Shares of Company
Common Stock: 61,750
<PAGE> 14
14
/s/ CHARLES H. MOORE, JR.
--------------------------
Name: Charles H. Moore, Jr.
Shares of Company
Common Stock: 8,000
/s/ JOHN O. WHITNEY
--------------------------
Name: John O. Whitney
Shares of Company
Common Stock: 0
/s/ DONALD G. SLEEMAN
---------------------------
Name: Donald G. Sleeman
Shares of Company
Common Stock: 285
<PAGE> 15
15
/s/ Heinrich Baumann-Steiner
-----------------------------
Name: Heinrich Baumann-Steiner
Shares of Company
Common Stock: 0
------
/s/ A. Gary Fieger
-----------------------------
Name: A. Gary Fieger
Shares of Company
Common Stock: 12,000
------
FIEGER INTERNATIONAL INC.
By: /s/ A. Gary Fieger
-------------------------
Name: A. Gary Fieger
Title: President
Shares of Company
Common Stock: 4,500
------
/s/ Peter K. Steiner
-----------------------------
Name: Peter K. Steiner
Shares of Company
Common Stock: 0
------
<PAGE> 16
16
EBSPSW HOLDING AG
Shares of Series C
Preferred Stock: 9,000
Shares of Series D
Preferred Stock: 6,000
Shares of Company
Common Stock: 30,750
By: /s/ Heinrich Baumann-Steiner
-----------------------------
Name: Heinrich Baumann-Steiner
Title: Chairman
By: /s/ Peter K. Steiner
-----------------------------
Name: Peter K. Steiner
Title: Vice-Chairman
HOCHTIEF AG
By: /s/ Hans-Peter Keitel
-----------------------------
Name: Hans-Peter Keitel
Title: President and
Chief Executive Officer
By: /s/ Hans-Wolfgang Koch
-----------------------------
Name: Hans-Wolfgang Koch
Title: Member of the
Executive Board
BETA ACQUISITION CORP.
By: /s/ Hans-Wolfgang Koch
-----------------------------
Name: Hans-Wolfgang Koch
Title: President and Chairman
<PAGE> 1
Exhibit (c)3
[THE TURNER CORPORATION LETTERHEAD]
April 1, 1999
Dr. Hans-Wolfgang Koch
Dr. Bernhard Burklin
Hochtief
Opernplatz 2
45128 Essen, Germany
Gentlemen:
You have requested certain non-public information regarding The Turner
Corporation and its subsidiaries (collectively, the "Company"), in connection
with your consideration of a possible transaction between you and the Company (a
"Transaction"). In consideration thereof, and as a condition to our furnishing
such information to you, the Company hereby requests that you agree, as set
forth below, to treat confidentially such information and any other non-public,
confidential or proprietary information (in each case, regardless of the form in
which it has been communicated or maintained) that the Company and its
affiliates, directors, officers, employees, advisors, agents or representatives
(including attorneys and financial advisors) furnish to you or your directors,
officers, employees, agents, advisors, prospective bank or institutional
lenders, affiliates or representatives of your agents, advisors, prospective
lenders or affiliates (all of the foregoing collectively referred to as "your
Representatives"), whether furnished before or after the date of this letter
agreement (the "Agreement"), and all notes, reports, analyses, compilations,
studies, files or other documents or material, whether prepared by you or
others, which are based on, contain or otherwise reflect such information
(collectively, the "Evaluation Material").
The term "Evaluation Material" does not include information which (i) becomes
generally available to the public other than as a result of disclosure by you or
your Representatives, (ii) was already in your possession or was independently
developed by you without violation of this Agreement prior to its disclosure to
you by the Company, its representatives or its agents, or (iii) becomes
available to you on a non-confidential basis from a source other than the
Company, its representatives or its agents, provided that such source is not, to
your knowledge after reasonable investigation, bound by a confidentiality
agreement with the Company, its representatives or its agents or otherwise
prohibited from transmitting the information to you or your Representatives by a
contractual, legal or fiduciary obligation.
continued...
<PAGE> 2
TO: DR. HANS-WOLFGANG KOCH 4/1/99
DR. BERNHARD BURKLIN PAGE 2
You agree that you and your Representatives will not use any of the Evaluation
Material for any reason or purpose other than to evaluate a possible
Transaction. Unless and until you have consummated a Transaction pursuant to a
definitive agreement between you and the Company, you agree that the Evaluation
Material will be kept strictly confidential by you and your Representatives and,
except with the specific prior written consent of the Company or as expressly
otherwise permitted by the terms hereof, will not be disclosed by you or your
Representatives. You may disclose the Evaluation Material to those of your
Representatives who require such material for the purpose of evaluating a
possible Transaction (it being understood that prior to such disclosure, each
such Representative shall be informed by you of the confidential nature of the
Evaluation Material and acknowledge its obligations under this Agreement to the
same extent as if it were a part hereto). You agree that you will be responsible
for any breach of this Agreement by any of your Representatives.
Without prior written consent of the Company, you and your Representatives will
not disclose to any person (subject to the following paragraph): (1) the fact
that the Evaluation Material has been made available to you or that you have
inspected any portion of the Evaluation Material, (2) the fact that any
discussions or negotiations are taking place concerning a possible Transaction,
or (3) any of the terms, conditions or other facts with respect to any possible
Transaction, including the status thereof, unless and only to the extent that
such disclosure (after making reasonable efforts to avoid such disclosure and
after advising and consulting with the Company about your intentions to make,
and the proposed contents of, such disclosure), is, in the opinion of your
counsel, required by the applicable United States securities laws or the
requirements of the New York Stock Exchange. The term "person" as used in this
Agreement shall be broadly interpreted to include, without limitation, any
corporation, company, partnership or individual.
Furthermore, without your written prior consent, the Company, its directors,
officers, employees and agents will not disclose to any person (1) the fact that
any discussion or negotiations are taking place concerning the possible
Transaction, or (2) any of the terms, conditions or other facts with respect to
any possible Transaction, including the status thereof, unless and only to the
extent that such disclosure (after making reasonable efforts to avoid such
disclosure and after advising and consulting with you about the Company's
counsel, required by the applicable United States securities laws or the
requirements of the New York Stock Exchange).
In the event that you or any of your Representatives are requested or required
(by oral questions, interrogatories, requests for information or documents,
subpoena, Civil Investigative Demand or similar process) to disclose any of the
Evaluation Material, it is agreed that you or such Representative, as the case
may be, will (i) provide the Company with prompt notice of the existence of and
the terms and circumstances surrounding such request(s) and (ii) consult with
the Company on the advisability of taking legally available steps to resist or
narrow such request. In the event that disclosure of such information is
required, you or such Representative may furnish that portion (and only that
portion) of the Evaluation Material which, in the opinion of your counsel, you
are legally compelled to disclose and you will cooperate with the Company in the
Company's efforts to obtain an order or other reliable assurance that
confidential treatment will be accorded any Evaluation Material so furnished.
continued...
<PAGE> 3
TO: DR. HANS-WOLFGANG KOCH 4/1/99
DR. BERNHARD BURKLIN PAGE 3
In addition, you hereby acknowledge that you are aware (and that your
Representatives who receive any Evaluation Material will be advised) that the
United States securities laws restrict persons with material non-public
information concerning the matters which are the subject of this Agreement from
purchasing or selling securities of the Company, or from communicating such
information to any other person under circumstances in which it is reasonably
foreseeable that such person is likely to purchase or sell securities of the
Company.
In view of the fact that the Evaluation Material consists of confidential and
non-public information, you agree that for a period of two years from the date
of this Agreement, unless such shall have been specifically invited in writing
by the Company, neither you nor any of your affiliates (as such term is defined
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) will
in any manner, directly or indirectly, (a) effect or seek, offer or propose
(whether publicly or otherwise) to effect, or cause or participate in or in any
way assist (including, without limitation, through the provision of financing)
any other person to effect or seek, offer or propose (whether publicly or
otherwise) to effect or cause or participate in, (i) any acquisition of any
securities (or beneficial ownership thereof) or assets of the Company or any of
its subsidiaries; (ii) any tender or exchange offer, merger or other business
combination involving the Company or any of its subsidiaries; (iii) any
recapitalization, restructuring, liquidation, dissolution or other extraordinary
transaction with respect to the Company or any of its subsidiaries; or (iv) any
"solicitation" of "proxies" (as such terms are used in the proxy rules of the
Securities and Exchange Commission) or consents to vote any voting securities of
the Company; (b) form, join or in any way participate in a "group" (as defined
under the Exchange Act) with respect to any voting securities of the Company;
(c) otherwise act, alone or in concert with others, to seek to control or
influence the management, Board of Directors or policies of the Company; (d)
take any action which might force the Company to make a public announcement or
arrangements with any third party with respect to any of the foregoing. You also
agree during such period not to request the Company (or its directors, officers,
employees or agents), directly or indirectly, to amend or waive any provision of
this paragraph (including this sentence).
Without the prior written consent of the Company, (1) neither you nor those of
your Representatives who are aware of the Evaluation Material and/or the
possibility of a Transaction will initiate or cause to be initiated any
communications with any employee of the Company concerning the Evaluation
Material or any possible transaction and (2) none of your Representatives will,
for the two year period from the date of this Agreement, initiate or maintain
contact (except for those contacts being made in the ordinary course of
business) with any officer, director or employee of the Company regarding the
business, operations, prospects or financing of the Company or the employment of
any officer, director or employee of the Company; provided, however, that
nothing herein shall restrict or preclude your right to make generalized
searches for employees by use of advertisements in the media (including trade
media) which are not targeted on employees of the Company or respond to any
employee who contacts you regarding his or her own employment with you entirely
on his or her own initiative without any direct or indirect solicitation by you.
continued...
<PAGE> 4
TO: DR. HANS-WOLFGANG KOCH 4/1/99
DR. BERNHARD BURKLIN PAGE 4
If you decide that you do not wish to proceed with a Transaction, you will
promptly inform the Company in writing of that decision. In that case, or upon
the written request of the Company, you will promptly deliver to the Company all
documents or other materials furnished by the Company to you or your
Representatives constituting Evaluation Material, together with all copies,
reproductions, summaries, analyses or extracts thereof or based thereon in the
possession of you or your Representatives. In the event of such decision or
request, all other documents or other matter constituting Evaluation Material in
the possession of you or your Representatives will be destroyed, with any such
destruction confirmed by you in writing to the Company. Notwithstanding the
return or destruction of Evaluation Material, you and your Representatives will
continue to be bound by your obligations (including, without limitation, your
obligation of confidentiality) hereunder.
Although you understand that the Company has endeavored to include in the
Evaluation Material information known to it which it believes to be relevant for
the purpose of your investigation, you further understand and acknowledge that
neither the Company nor its agents or its representatives makes any
representation or warranty, express or implied, as to the accuracy or
completeness of the Evaluation Material or any other information provided to you
by the Company, its agents or representatives. You agree that neither the
Company nor its agents or its representatives nor any of their respective
officers, directors, employees, agents or control persons (within the meaning of
the Exchange Act) shall have any liability to you or any other party (including,
without limitation, any of your Representatives) resulting from the use of the
Evaluation Material by you or such Representatives. Only those representations
and warranties that may be made to you or your affiliates in a definitive
written agreement for a Transaction, when, as and if executed and subject to
such limitations and restrictions as may be specified therein, shall have any
legal effect, and you agree that if you determine to engage in a Transaction
such determination will be based solely on the terms of such written agreement
and on your own investigation, analysis and assessment of the business to be
acquired. Moreover, unless and until such a definitive written agreement is
entered into, none of the Company, or its agents, representatives or affiliates
or you or your Representatives will be under any legal obligation of any kind
whatsoever with respect to any such Transaction by virtue of (i) this Agreement
or (ii) any written or oral expression with respect to such a Transaction by any
of the Company's directors, officers, employees, agents, advisors or
representatives, except for the matters specifically agreed to in this
Agreement. Without limiting the generality of the foregoing, you specifically
acknowledge and agree that the Company may conduct and change the process with
respect to any possible Transaction as it in its sole discretion shall
determine, including, without limitation, at any time terminating access to the
Evaluation Material by you and your Representatives, rejecting any and all
offers without stating reasons, and negotiating with one or more other parties
and entering into a definitive agreement for a Transaction without prior notice
to you or any other person. You agree and acknowledge that the Company has not
granted you any license, copyright, or similar right with the respect to any of
the Evaluation Material or any other information provided to you by the Company
or its representatives. The agreements set forth in this Agreement may be
modified or waived only by a separate writing signed by the Company and you
expressly so modifying or waiving such agreements.
continued...
<PAGE> 5
TO: DR. HANS-WOLFGANG KOCH 4/1/99
DR. BERNHARD BURKLIN PAGE 5
You acknowledge that money damages would be both incalculable and an
insufficient remedy for any breach of this Agreement by you or your
Representatives and that any such breach would cause the Company irreparable
harm. Accordingly, you also agree that in the event of any breach or threatened
breach of this Agreement by you or your Representatives, the Company, in
addition to any other remedies at law or in equity it may have, shall be
entitled, without the requirement of posting a bond or other security, to
equitable relief, including injunctive relief and specific performance. In the
event of any litigation relating to this Agreement, if a court of competent
jurisdiction determines that you or any of your Representatives have breached
this Agreement, you shall be liable and pay to the Company the reasonable legal
fees incurred by the Company in connection with such litigation, including any
appeal therefrom.
It is understood and agreed that no failure or delay by the Company in
exercising any right, power, or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any right, power or privilege
hereunder.
The invalidity or unenforeceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision this Agreement,
which shall remain in full force and effect.
You agree and consent to personal jurisdiction and service and venue in any
federal or state court within the State of New York having subject matter
jurisdiction, for the purposes of any action, suit or proceeding arising out of
or relating to this Agreement. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
The benefits of this Agreement shall inure to the respective successors and
assigns of the parties hereto and their successors and assigns and
representatives, and the obligations and liabilities assumed in this Agreement
by the parties hereto shall be binding upon their respective successors and
assigns.
This Agreement embodies the entire agreement and understanding of the parties
hereto and supersedes any and all prior agreements, arrangements and
understanding relating to the matters provided for herein.
Please sign in the space provided below and return one fully executed copy
hereof to the undersigned, whereupon this will constitute our agreement with
respect to the subject matter hereof.
Sincerely,
/s/ E.T. Gravette, Jr.
Confirmed and agreed to as of the date first above written:
By:___________________________
Title:
ETG/pak
