<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 3)
---------------------
MOORCO INTERNATIONAL INC.
(NAME OF SUBJECT COMPANY)
MOORCO INTERNATIONAL INC.
(NAME OF PERSON FILING STATEMENT)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(AND ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
(TITLE OF CLASS OF SECURITIES)
61559L100
(CUSIP NUMBER OF CLASS OF SECURITIES)
JAMES J. NELSON, ESQ.
VICE PRESIDENT, GENERAL COUNSEL
AND SECRETARY
MOORCO INTERNATIONAL INC.
2800 POST OAK BOULEVARD, SUITE 5701
HOUSTON, TEXAS 77056-6111
(713) 993-0999
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICE AND COMMUNICATIONS
ON BEHALF OF THE PERSON FILING STATEMENT)
COPY TO:
DANIEL A. NEFF, ESQ.
WACHTELL, LIPTON, ROSEN & KATZ
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019
(212) 403-1000
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<PAGE> 2
This Amendment No. 3 amends and supplements the Solicitation/Recommendation
Statement on Schedule 14D-9 filed with the Securities and Exchange Commission
(the "Commission") on May 19, 1995, as amended by Amendment No. 1 filed with the
Commission on May 24, 1995 and Amendment No. 2 filed with the Commission on June
12, 1995 (as so amended, the "Schedule 14D-9"), by Moorco International Inc., a
Delaware corporation (the "Company" or "Moorco"), relating to the tender offer
by MII Acquisition Corp. ("MII"), a wholly owned subsidiary of FMC Corporation
("FMC"), to purchase all of the outstanding shares of the Company's Common
Stock, par value $.01 per share (the "Common Stock"), and the associated
Preferred Stock Purchase Rights (the "Rights"), at a price of $28.00 per share,
net to the seller in cash without interest thereon, upon the terms and subject
to the conditions set forth in the Offer to Purchase, dated May 5, 1995, as
amended and supplemented by the Supplement to the Offer to Purchase dated June
13, 1995 and in the related Letters of Transmittal (which collectively
constitute the "Amended FMC Offer"). Unless otherwise indicated, all capitalized
terms used but not defined herein shall have the meanings ascribed to them in
the Schedule 14D-9.
ITEM 3. IDENTITY AND BACKGROUND.
The description under Item 3(b) is hereby amended and supplemented by
adding the following information:
On June 11, 1995, the Company, MII and FMC entered into an Agreement and
Plan of Merger, dated as of June 11, 1995 (the "Merger Agreement") which
provides, among other things, for the increase in the price to be paid pursuant
to the FMC Offer to $28.00 per share of Common Stock, net to the seller in cash
without interest thereon, and, subject to certain conditions, for the merger
(the "Merger") of MII with and into the Company as soon as practicable after the
consummation of the Amended FMC Offer. In the Merger, each outstanding share of
Common Stock (other than shares held by FMC, MII, any wholly owned subsidiary of
FMC or MII, in the treasury of the Company or by any wholly owned subsidiary of
the Company, and shares held by stockholders, if any, who perfect their
dissenters' rights under Delaware law) will be converted into the right to
receive $28.00 in cash without interest thereon.
The Merger Agreement provides that if the Merger Agreement is terminated
under certain circumstances involving a withdrawal, modification or change of
recommendation of the Company's Board with respect to the Amended FMC Offer, or
termination of the Merger Agreement by the Company if the Company's Board
approves an alternative transaction involving the Company, the Company will be
required to promptly reimburse FMC for the documented fees and expenses of FMC
and MII related to the Merger Agreement, the transactions contemplated thereby
and any related financing (subject to a maximum of $2,400,000), and pay FMC a
termination fee of $8,000,000.
A description of the Merger Agreement is contained in the Supplement to the
Offer to Purchase, dated June 13, 1995, which is filed as Exhibit 18 to the
Schedule 14D-9 and is incorporated herein by reference. Such supplement is being
mailed to the Company's stockholders together with this Amendment No. 3 to the
Schedule 14D-9. Such description is qualified in its entirety by reference to
the Merger Agreement, a copy of which is filed as Exhibit 19 to the Schedule
14D-9 and is incorporated herein by reference.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
The description under Item 4 is hereby amended and supplemented by adding
the following information:
At a meeting of the Board of Directors on June 11, 1995, the Board of
Directors of the Company determined that the Amended FMC Offer and the Merger
are fair to and in the best interests of the Company and its stockholders. THE
BOARD OF DIRECTORS RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE AMENDED
FMC OFFER AND TENDER THEIR SHARES OF COMMON STOCK PURSUANT TO THE AMENDED FMC
OFFER.
<PAGE> 3
In reaching its conclusions with respect to the Amended FMC Offer, the
Board of Directors considered a number of factors, including the following:
(a) The terms and conditions of the Amended FMC Offer and the Merger
Agreement, including the price to be paid in the Amended FMC Offer and the
Merger, and the fact that the Amended FMC Offer could be consummated as
early as midnight on Monday, June 26, 1995;
(b) The written opinion of Salomon Brothers Inc ("Salomon") that as of
the date of such opinion the $28.00 per share of Common Stock to be
received by the stockholders of the Company (other than FMC) pursuant to
the Amended FMC Offer and the Merger is fair to such stockholders from a
financial point of view (a copy of such opinion setting forth assumptions
made and matters considered and limitations set forth by Salomon, is
included as Annex A hereto and stockholders are urged to read such opinion
in its entirety);
(c) The recommendation of management of the Company that the Amended
FMC Offer and the Merger be approved;
(d) The directors' knowledge of the Company's business, financial
condition, results of operations, current business strategy and future
prospects, the nature of the markets in which the Company operates, the
Company's position in such markets, and the efforts by the Company's
management with the advice and assistance of its legal and financial
advisors, to explore other possible transactions involving the Company; and
(e) The historical and current market prices for the Common Stock.
The foregoing discussion of the information and factors considered and
given weight by the Board is not intended to be exhaustive. In view of the
variety of factors considered in connection with its evaluation of the Amended
FMC Offer, the Board did not find it practicable to, and did not, quantify or
otherwise assign relative weights to the specific factors considered in reaching
its determination. In addition, individual members of the Board may have given
different weights to different factors.
At the June 11, 1995, meeting of the Board of Directors, the Board also
approved the Amended FMC Offer and the Merger for the purposes of eliminating
the application of Section 203 of the Delaware Law.
A copy of the letter to the Company's stockholders communicating the
Board's recommendation is filed as Exhibit 21 to the Schedule 14D-9 and is
incorporated herein by reference.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.
The description under Item 7 is hereby amended and supplemented by adding
the following information:
On June 11, 1995, the Company entered into the Merger Agreement with FMC
and MII. Reference is made to the information set forth under Item 3 above.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
The following Exhibits are filed herewith:
<TABLE>
<S> <C> <C>
Exhibit 18 -- Supplement to the Offer to Purchase dated June 13, 1995
Exhibit 19 -- Agreement and Plan of Merger, dated as of June 11, 1995
Exhibit 20 -- Opinion of Salomon Brothers Inc dated June 11, 1995*
Exhibit 21 -- Letter to Moorco Stockholders dated June 13, 1995*
</TABLE>
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* Included in copy mailed to stockholders.
2
<PAGE> 4
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
MOORCO INTERNATIONAL INC.
By: /s/ MICHAEL L. TINER
------------------------------------
Michael L. Tiner
President and Chief Executive
Officer
Dated: June 13, 1995
3
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
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<C> <C> <S> <C>
Exhibit 18 -- Supplement to the Offer to Purchase dated June 13, 1995
Exhibit 19 -- Agreement and Plan of Merger, dated as of June 11, 1995
Exhibit 20 -- Opinion of Salomon Brothers Inc dated June 11, 1995
Exhibit 21 -- Letter to Moorco Stockholders dated June 13, 1995
</TABLE>
<PAGE> 1
Supplement to Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(including the Associated Preferred Stock Purchase Rights)
of
Moorco International Inc.
at
an increased cash price of
$28.00 Net Per Share
by
MII Acquisition Corp.
a wholly owned subsidiary of
FMC Corporation
THE OFFER AND WITHDRAWAL RIGHTS HAVE BEEN EXTENDED AND WILL NOW EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, JUNE 26, 1995, UNLESS THE OFFER IS
EXTENDED
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING
VALIDLY TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER
THAT NUMBER OF SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE (THE
''SHARES''), OF MOORCO INTERNATIONAL INC. (THE ''COMPANY'') WHICH, WHEN
AGGREGATED WITH THE 100 SHARES CURRENTLY OWNED BY FMC CORPORATION, REPRESENT AT
LEAST A MAJORITY OF THE TOTAL NUMBER OF OUTSTANDING SHARES ON A FULLY DILUTED
BASIS ON THE DATE OF PURCHASE (THE ''MINIMUM CONDITION''). THE OFFER IS ALSO
SUBJECT TO OTHER TERMS AND CONDITIONS CONTAINED HEREIN. SEE ''INTRODUCTION'' AND
SECTION 8 OF THIS SUPPLEMENT.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED
THAT THE OFFER AND THE MERGER DESCRIBED HEREIN ARE FAIR TO, AND IN THE BEST
INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY, HAS APPROVED THE OFFER AND THE
MERGER AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR
SHARES.
<PAGE> 2
SHARES PREVIOUSLY TENDERED AND NOT PROPERLY WITHDRAWN HAVE BEEN VALIDLY TENDERED
FOR PURPOSES OF THE OFFER.
The Dealer Manager for the Offer is:
Merrill Lynch & Co.
June 13, 1995
IMPORTANT
On June 11, 1995, the Purchaser, FMC and the Company entered into an
Agreement and Plan of Merger which is summarized in Section 7 of this Supplement
and which contains the conditions described in Section 8 of this Supplement.
Except as otherwise set forth in this Supplement, the Purchaser's
Offer continues to be governed by the terms and conditions set forth in its
Offer to Purchase dated May 5, 1995 (the ''Offer to Purchase'') and the original
GREEN Letter of Transmittal, and the information contained therein continues to
be important to each stockholder's decision with respect to the Offer.
Accordingly, this Supplement should be read carefully in conjunction with such
documents, which have been previously mailed to stockholders. Additional copies
of these documents may be obtained in the manner set forth below.
Any stockholder desiring to tender all or any portion of his or her
Shares, and the associated Preferred Stock Purchase Rights (the ''Rights'' and,
unless the context otherwise requires, deemed to be included in all references
to the ''Shares''), should either (i) complete and sign the Letter of
Transmittal (or a facsimile thereof) in accordance with the instructions in the
Letter of Transmittal and mail or deliver it together with the certificate(s)
representing tendered Shares and any other required documents, to The Chase
Manhattan Bank, N.A. (the ''Depositary'') or tender such Shares pursuant to the
procedures for book-entry transfer set forth in Section 3 of the Offer to
Purchase or (ii) request his or her broker, dealer, commercial bank, trust
company or other nominee to effect the transaction for the stockholder. A
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 the stockholder
desires to tender such Shares. A stockholder who desires to tender his or her
Shares, and whose certificates representing such Shares are not immediately
available or who cannot comply with the procedures for book-entry transfer on a
timely basis, may tender such Shares by following the procedures for guaranteed
delivery set forth in Section 3 of the Offer to Purchase.
Questions and requests for assistance may be directed to D.F. King &
Co., Inc. (the ''Information Agent'') or Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the ''Dealer Manager'') at their respective addresses and
<PAGE> 3
telephone numbers set forth on the back cover of this Supplement. Additional
copies of this Supplement, the Offer to Purchase, the revised BLUE Letter of
Transmittal, the revised YELLOW Notice of Guaranteed Delivery and other related
materials may be obtained from the Information Agent, the Dealer Manager, the
Depositary or from brokers, dealers, commercial banks and trust companies. A
stockholder may also contact brokers, dealers, commercial banks or trust
companies for assistance concerning the Offer.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
INTRODUCTION 1
THE TENDER OFFER 4
1. Amended Terms of the Offer 4
2. Procedures for Accepting the Offer and Tendering Shares 4
3. Price Range of the Shares; Dividends 5
4. Certain Information Concerning the Company 5
5. Background of the Offer; Contacts with the Company Since May 5, 1995 7
6. Plans for the Company 7
7. Merger Agreement 8
8. Certain Conditions of the Offer 16
9. Source and Amount of Funds 18
10. Certain Legal Matters 18
11. Miscellaneous 19
</TABLE>
To: All Holders of Shares of Common Stock of MOORCO INTERNATIONAL INC.
INTRODUCTION
The following information amends and supplements the Offer to
Purchase dated May 5, 1995 (the ''Offer to Purchase'') of MII Acquisition Corp.
(the ''Purchaser''), a Delaware corporation and a wholly owned subsidiary of FMC
Corporation, a Delaware corporation (''FMC''). Pursuant to this Supplement to
the Offer to Purchase (the ''Supplement''), the Purchaser is now offering to
purchase all outstanding shares of common stock, par value $.0l per share (the
''Shares''), of Moorco International Inc., a Delaware corporation (the
''Company''), and the associated Preferred Stock Purchase Rights (the ''Rights''
and, unless the context otherwise requires, deemed to be included in all
references to the ''Shares'') issued pursuant to the Rights Agreement (the
''Rights Agreement''), dated as of November 8, 1994, between the Company and The
Bank of New York, a New York banking corporation, as Rights Agent, at a purchase
price of $28.00 per Share, net to the seller in cash without interest thereon,
upon the terms and subject to the conditions set forth in the Offer to Purchase,
as amended and supplemented by this Supplement, and in the related Letters of
Transmittal (which together constitute the ''Offer''). The Company has agreed in
the Merger Agreement (as hereinafter defined), subject to the terms of the
Merger Agreement, to effect a redemption of the Rights for $.01 per Right
immediately prior to the Purchaser's acceptance for payment of Shares pursuant
to the Offer, and to cause the redemption price in respect of the Rights
attached to the Shares purchased pursuant to the Offer to be paid to and
retained by the Purchaser.
Except as otherwise set forth in this Supplement, the terms and
conditions previously set forth in the Offer to Purchase remain applicable in
all respects to the Offer, and the Supplement should be read in conjunction with
the Offer to Purchase. Unless the context requires otherwise, capitalized terms
used herein but not otherwise defined herein have the meaning given to such
terms in the Offer to Purchase.
The Purchaser, FMC and the Company have entered into an Agreement
and Plan of Merger, dated as of June 11, 1995 (the ''Merger Agreement''), which
provides for, among other things, (i) an increase in the price per Share to be
<PAGE> 4
paid pursuant to the Offer from $20.00 per Share to $28.00 per Share, net to the
seller in cash without interest thereon, (ii) the elimination of certain
conditions to the Offer, (iii) the amendment and restatement of the other
conditions to the Offer as set forth in their entirety in Section 8 of this
Supplement, (iv) the extension of the Offer to 12:00 Midnight, New York City
time, on Monday, June 26, 1995 or such later date as is required pursuant to the
Merger Agreement and (v) the merger of the Purchaser or another direct or
indirect wholly owned subsidiary of FMC with the Company (the ''Merger'')
following the consummation of the Offer. In the Merger, each Share not owned by
the Purchaser, FMC or the Company (or any of their respective wholly owned
subsidiaries), and other than Dissenting Shares (as such term is defined in the
Merger Agreement), shall be cancelled, extinguished and converted into the right
to receive $28.00 net per Share in cash without interest thereon. See Section 7
of this Supplement.
THE COMPANY HAS REPRESENTED THAT THE BOARD OF DIRECTORS OF THE
COMPANY HAS UNANIMOUSLY DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO,
AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY, HAS APPROVED THE
OFFER AND RECOMMENDS THAT THE STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR
SHARES.
Salomon Brothers Inc (''Salomon'') has delivered to the Board of
Directors of the Company its written opinion, dated June 11, 1995, that, based
upon and subject to the information contained in such opinion, as of such date,
the consideration to be received by holders of Shares, other than FMC, in the
Offer and the Merger is fair to such holders from a financial point of view.
In the Merger Agreement, the Company represents and warrants to FMC
and the Purchaser that the Company has taken all necessary action so that
neither the execution nor the delivery of the Merger Agreement nor the
commencement of the amended Offer will result in a ''Distribution Date'' (as
such term is defined in the Rights Agreement). The Company also represents and
warrants in the Merger Agreement that the Board of Directors of the Company has
taken the appropriate action such that Section 203 of the Delaware Law (the
''Business Combination Law'') will not apply to any of the transactions
contemplated by the Merger Agreement, including the Offer and the Merger.
THEREFORE, THE OFFER IS NO LONGER SUBJECT TO THE RIGHTS CONDITION OR
THE BUSINESS COMBINATION LAW CONDITION INCLUDED IN THE OFFER TO PURCHASE. THE
OFFER IS NOW CONDITIONED UPON, AMONG OTHER THINGS, THE MINIMUM CONDITION OF
THERE BEING VALIDLY TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION
OF THE OFFER THAT NUMBER OF SHARES WHICH, WHEN AGGREGATED WITH THE 100 SHARES
CURRENTLY OWNED BY FMC, REPRESENT AT LEAST A MAJORITY OF THE TOTAL NUMBER OF
OUTSTANDING SHARES ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE. THE OFFER
REMAINS SUBJECT TO CERTAIN OTHER TERMS AND CONDITIONS CONTAINED HEREIN IN
ADDITION TO THE MINIMUM CONDITION. SEE SECTION 8 OF THIS SUPPLEMENT.
Procedures for tendering shares are set forth in Section 2 of this
Supplement and Section 3 of the Offer to Purchase. Tendering stockholders will
not be obligated to pay brokerage fees or commissions or, except as set forth in
Instruction 6 of the revised BLUE Letter of Transmittal, stock transfer taxes on
the purchase of Shares pursuant to the Offer. However, any tendering stockholder
or other payee who fails to complete and sign the Substitute Form
<PAGE> 5
W-9 that is included in the revised BLUE Letter of Transmittal may be subject to
a required backup federal income tax withholding of 31% of the gross proceeds
payable to such stockholder or other payee pursuant to the Offer. See Section 3
of the Offer to Purchase. The Purchaser will pay all charges and expenses of
Merrill Lynch, Pierce, Fenner & Smith Incorporated (''Merrill Lynch''), as
Dealer Manager (in such capacity, the ''Dealer Manager''), The Chase Manhattan
Bank, N.A., as Depositary (the ''Depositary''), and D.F. King & Co., Inc. as
Information Agent (the ''Information Agent''), incurred in connection with the
Offer. See Section 16 of the Offer to Purchase.
Stockholders who have previously validly tendered and not properly
withdrawn their Shares pursuant to the Offer are not required to take any
further action, except as may be required by the Guaranteed Delivery Procedure
of Section 3 of the Offer to Purchase if such procedure was utilized. If Shares
are accepted for payment and paid for by the Purchaser pursuant to the Offer,
such stockholders will receive, subject to the conditions of the Offer, the
increased tender price of $28.00 per Share. However, such stockholders will not
receive the $.01 per Right redemption price (which will be payable to the
Purchaser) in respect of Rights attached to such Shares. See Section 4 of the
Offer to Purchase for the procedures to properly withdraw Shares tendered
pursuant to the Offer.
Based on the representations and warranties of the Company contained
in the Merger Agreement, as of May 31, 1995, there were 11,146,022 Shares
outstanding and options covering a total of 281,950 Shares were reserved for
issuance under the Company's two stock option plans. FMC currently beneficially
owns an aggregate of 100 Shares, representing less than .01% of the Shares
outstanding on May 31, 1995. Based on this information, the Minimum Condition
will be satisfied if at least 5,713,887 Shares are validly tendered and not
properly withdrawn on or prior to the Expiration Date. If the Minimum Condition
is satisfied, the Purchaser will be able to approve the Merger without the
affirmative vote of the holders of any other Shares.
This Offer to Purchase does not constitute a solicitation of a
proxy, consent or authorization for or with respect to the annual meeting or any
special meeting of the Company's stockholders or any action in lieu thereof. Any
such solicitation which FMC or the Purchaser may make will be made only pursuant
to separate proxy solicitation materials complying with all applicable
requirements of Section 14(a) of the Securities Exchange Act of 1934, as amended
(the ''Exchange Act''), and the rules and regulations promulgated thereunder.
The Offer is conditioned upon the fulfillment or waiver of certain
conditions described herein. See Section 8 of this Supplement. The Offer will
expire at 12:00 midnight, New York City time, on Monday, June 26, 1995, unless
extended.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ IN CONJUNCTION WITH THIS SUPPLEMENT
BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
<PAGE> 6
THE TENDER OFFER
1. Amended Terms of the Offer
Sections 1 and 13 of the Offer to Purchase are amended and
supplemented by this Section 1 of this Supplement.
In connection with the Merger Agreement, the price per Share to be
paid pursuant to the Offer has been increased from $20.00 per Share to $28.00
per Share, net to the seller in cash without interest thereon. Upon the terms
and subject to the conditions of the Offer (including, if the Offer is further
extended or amended pursuant to the Merger Agreement, the terms and conditions
of any extension or amendment), the Purchaser will accept for payment and pay
the increased price for all of the Shares validly tendered prior to the
Expiration Date (as herein defined) and not withdrawn in accordance with Section
4 of the Offer to Purchase (including Shares tendered prior to the date of this
Supplement). The term ''Expiration Date'' means 12:00 Midnight, New York City
time, on Monday, June 26, 1995 unless and until the Purchaser, subject to the
terms 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 the Purchaser,
shall expire. See Section 7 of this Supplement for a description of the
provisions of the Merger Agreement regarding extensions of the Offer by the
Purchaser.
By tendering Shares pursuant to the Offer, a tendering stockholder
confirms such stockholder's agreement that the amount paid by the Company in
redemption of the Rights attached to Shares of such stockholder acquired
pursuant to the Offer will be paid to and retained by the Purchaser. Amounts
paid in redemption of Rights attached to other Shares are not affected by the
foregoing and will be paid to holders of Rights in accordance with the terms of
the Rights Agreement.
The Company has provided the Purchaser with the Company's
stockholder lists and security position listings for the purpose of
disseminating the Offer, as amended pursuant to the Merger Agreement, to the
stockholders. This Supplement, the revised BLUE Letter of Transmittal and other
relevant materials will be mailed by the Company to record holders of Shares
whose names appear on the Company's stockholder list and will be furnished to
brokers, dealers, commercial banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the stockholder list or, if
applicable, who are listed as participants in a clearing agency's security
position listing for subsequent transmittal to beneficial owners of Shares.
The Offer is conditioned upon, among other things, satisfaction of
the Minimum Condition as set forth above in the Introduction and in Section 8 of
this Supplement. The Purchaser reserves the right (but shall not be obligated)
to waive any or all of such conditions, except that the Purchaser may not waive
the Minimum Condition. As described in Section 14 of the Offer to Purchase, any
such waiver may require a public announcement or extension of the Offer under
the applicable rules under the Exchange Act referred to in the Offer to
Purchase.
<PAGE> 7
2. Procedures for Accepting the Offer and Tendering Shares
Section 3 of the Offer to Purchase is amended and supplemented by
this Section 2 of this Supplement.
Tendering stockholders should use the revised BLUE Letter of
Transmittal and the revised YELLOW Notice of Guaranteed Delivery included with
this Supplement. However, to the extent either of the revised BLUE Letter of
Transmittal and the revised YELLOW Notice of Guaranteed Delivery is not
available, tendering shareholders may continue to use the GREEN Letter of
Transmittal and the GOLD Notice of Guaranteed Delivery that were provided with
the Offer to Purchase. Although such GREEN Letter of Transmittal refers only to
the Offer to Purchase and indicates that the Offer will expire at 12:00
midnight, New York City time, on Friday, June 2, 1995, stockholders using such
document to tender their shares will nevertheless receive $28.00 net per Share
in cash for each Share validly tendered and not properly withdrawn and accepted
for payment pursuant to the Offer, subject to the conditions of the Offer, and
will be able to tender their shares pursuant to the Offer until 12:00 midnight,
New York City time, on Monday, June 26, 1995 (or such later date to which the
Offer may be extended).
Stockholders who have previously validly tendered shares pursuant to
the Offer using the GREEN Letter of Transmittal or the YELLOW Notice of
Guaranteed Delivery and who have not properly withdrawn such
<PAGE> 8
Shares have validly tendered such Shares for the purposes of the Offer, as
amended, and need not take any further action, except as may be required by the
Guaranteed Delivery procedure described in Section 3 of the Offer to Purchase if
such procedure was utilized. However, such stockholders will not receive the
$.01 per Right redemption price (which will be payable to the Purchaser) in
respect of Rights attached to such Shares.
3. Price Range of the Shares; Dividends
Section 6 of the Offer to Purchase is amended and supplemented by
this Section 3 of this Supplement.
The high and low sales prices per Share on the NYSE reported by the
Dow Jones News Service during the fourth quarter of the fiscal year ending May
31, 1995 were $23.50 and $13.13, respectively, and during the first quarter
(through June 9, 1995) of the fiscal year ending May 31, 1996 were $23.63 and
$22.63, respectively. On June 9, 1995, the last full trading day prior to the
announcement of the execution of the Merger Agreement, the closing sale price
per Share reported on the NYSE by the Dow Jones News Service was $23.50. On June
12, 1995, the last full trading day prior to the mailing of this Supplement, the
closing sale price per Share reported on the NYSE by the Dow Jones News Service
was $27.88.
STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
4. Certain Information Concerning the Company
Section 8 of the Offer to Purchase is amended and supplemented by
this Section 4 of this Supplement.
After entering into the Confidentiality Agreement (as defined and
described in Section 5 of this Supplement), the Company and Salomon provided
certain non-public business and financial information regarding the Company to
FMC. This information included estimates and projections of the company's future
operating performance and of certain balance sheet information (the
''Projections'').
The following information has been excerpted or derived from the
materials provided to FMC. According to the Company, the Projections were
prepared using numerous assumptions, including assumptions with respect to an
upturn in the market, current and planned product and market development
programs and the impact of cost reduction and margin improvement programs. Some
(but not all) of these assumptions are set forth below. The Projections do not
give effect to the Offer or the Merger. NONE OF THE COMPANY, FMC, THE PURCHASER
OR THEIR RESPECTIVE ADVISORS ASSUME ANY RESPONSIBILITY FOR THE VALIDITY,
REASONABLENESS, ACCURACY OR COMPLETENESS OF THE PROJECTIONS.
<PAGE> 9
MOORCO INTERNATIONAL, INC.
SELECTED FINANCIAL PROJECTIONS
(In thousands, except operating margin and per share data)
<TABLE>
<CAPTION>
Fiscal Year Ended May 31,
Est.
1995(a) Plan 1996 1997 1998 1999 2000
<S> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA(b)
Sales $197,924 $214,195 $239,818 $259,119 $272,977 $286,766
Operating income 15,276 21,418 27,574 34,332 36,364 38,324
Operating margin 7.7% 10.0% 11.5% 13.2% 13.3% 13.4%
EBITDA 23,534 28,584 34,915 41,607 43,692 45,694
Net income 10,231 14,441 18,804 23,381 25,332 27,283
Earnings per share 0.89 1.29 1.68 2.09 2.27 2.44
Shares outstanding 11,529 11,177 11,177 11,177 11,177 11,177
BALANCE SHEET DATA
(At period end)
Working capital 60,331 59,430 74,296 96,092 118,863 143,604
Total assets 163,836 167,651 187,804 212,285 237,496 264,626
Total liabilities 61,227 53,099 56,907 60,466 62,804 65,110
Total stockholders' equity 102,609 114,552 130,897 151,819 174,692 199,516
</TABLE>
(a) Pursuant to the Merger Agreement, the Company disclosed that, based
on a preliminary closing (excluding expenses incurred in connection with the
sale of the Company), the Company's preliminary fourth quarter and 1995 fiscal
year sales were $62,000,000 and $196,000,000, respectively, and earnings per
share were $0.56 and $0.95, respectively, and that bookings for the fourth
quarter were approximately $46,000,000.
(b) In connection with the delivery of the Projections, the Company
indicated that certain corporate office, insurance and audit expenses of
approximately $7,000,000 per year in the early years to approximately $8,000,000
per year in the later years might be significantly reduced by a prospective
acquisition. The foregoing selected Financial Projections do not incorporate any
of these potential savings.
General Asumptions
- - The five-year projections assume an upturn in the Company's markets
beginning in the first or second quarter of FY 1996, continuing for a two-year
period, and moderating during FY 1998. The sales forecast also includes the
impact of current and planned product and market development programs.
- - Consolidated sales are assumed to grow at a rate of approximately 8%
in FY 1996, 12% in FY 1997, 8% in FY 1998 and approximately 5% in FY 1999 and FY
2000.
- - Operating margins (excluding corporate expenses) are assumed to
improve to 12.2% in FY 1996 to 15.3% by FY 1998 and then remain constant for FY
1999 and FY 2000. The assumed margin is based on the assumed impact of the
higher sales volume and cost reduction and margin improvement programs.
- - The Company's effective income tax rate is assumed to be 34% for FY
1996 and FY 1997 and 35% for FY 1998 through FY 2000.
- - The Company's cash is assumed to earn income at a 5% rate. The
Projections assume no material debt financing.
TO THE KNOWLEDGE OF FMC AND THE PURCHASER, THE COMPANY DOES NOT AS A
MATTER OF COURSE PUBLICLY DISCLOSE PROJECTIONS OR ESTIMATES AS TO FUTURE
REVENUES, EARNINGS, FINANCIAL CONDITION OR OPERATING PERFORMANCE. THE
PROJECTIONS ARE INCLUDED IN THIS SUPPLEMENT ONLY BECAUSE SUCH INFORMATION WAS
FURNISHED TO FMC AND THE PURCHASER BY THE COMPANY WITHOUT INDEPENDENT
VERIFICATION. THE PROJECTIONS WERE NOT PREPARED (NOR ARE THEY BEING FURNISHED)
WITH A VIEW TO COMPLIANCE WITH THE GUIDELINES ESTABLISHED BY THE SEC OR THE
AMERICAN
<PAGE> 10
INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS REGARDING PROJECTIONS AND FORECASTS.
THE PROJECTIONS REFLECT NUMEROUS ASSUMPTIONS, ALL MADE BY COMPANY
MANAGEMENT, WITH RESPECT TO INDUSTRY PERFORMANCE, GENERAL BUSINESS, ECONOMIC,
MARKET AND FINANCIAL CONDITIONS AND OTHER MATTERS, ALL OF WHICH ARE DIFFICULT TO
PREDICT AND MANY OF WHICH ARE BEYOND THE COMPANY'S CONTROL AND NONE OF WHICH
WERE SUBJECT TO APPROVAL BY FMC OR THE PURCHASER. ACCORDINGLY, THERE CAN BE NO
ASSURANCE THAT THE ASSUMPTIONS MADE IN PREPARING THE PROJECTIONS WILL BE
ACCURATE, AND ACTUAL RESULTS MAY BE MATERIALLY GREATER OR LESS THAN THOSE
CONTAINED IN THE PROJECTIONS. THE INCLUSION OF THE PROJECTIONS HEREIN SHOULD NOT
BE REGARDED AS AN INDICATION THAT ANY OF THE COMPANY, FMC, THE PURCHASER OR
THEIR RESPECTIVE ADVISORS CONSIDERED OR CONSIDER THE PROJECTIONS TO BE MATERIAL
OR A RELIABLE PREDICTION OF FUTURE EVENTS, AND THE PROJECTIONS SHOULD NOT BE
RELIED ON AS SUCH.
NEITHER THE COMPANY, FMC, THE PURCHASER NOR ANY OF THEIR ADVISORS
HAS MADE, OR MAKES, ANY REPRESENTATION TO ANY PERSON REGARDING THE INFORMATION
CONTAINED IN THE PROJECTIONS AND NONE OF THEM INTENDS TO UPDATE OR OTHERWISE
REVISE THE PROJECTIONS TO REFLECT CIRCUMSTANCES EXISTING AFTER THE DATE WHEN
MADE OR TO REFLECT THE OCCURRENCE OF FUTURE EVENTS EVEN IN THE EVENT THAT ANY OR
ALL OF THE ASSUMPTIONS UNDERLYING THE PROJECTIONS ARE SHOWN TO BE IN ERROR.
5. Background of the Offer; Contacts with the Company Since May 5, 1995
Section 10 of the Offer to Purchase is amended and supplemented by
this Section 5 of this Supplement.
On May 19, 1995, the Company responded to the initial offer by FMC
and the Purchaser, characterizing the offer as inadequate.
On May 23, 1995, a representative of the Company called a FMC
representative to report that the Company was willing to provide nonpublic
information to FMC pursuant to a confidentiality agreement without a standstill
provision. On May 23, 1995, FMC entered into a Confidentiality Agreement with
the Company, pursuant to which it generally agreed to treat confidentially any
information (except certain already known or public information) that the
Company or its agents or advisors furnish to FMC or its representatives (the
''Confidentiality Agreement'').
Subsequent to entering into the Confidentiality Agreement, the
Company and Salomon provided certain business and financial information to FMC
and its representatives, and representatives of FMC met with representatives of
the Company, conducted due diligence with respect to the Company and its
facilities and operations and reviewed various information concerning the
Company supplied to FMC.
On Friday, June 9, 1995, pursuant to procedures established by the
Company for receipt of proposals for the acquisition of the Company, FMC
submitted its proposal for the acquisition of the Company. Thereafter, until the
afternoon on Sunday, June 11, 1995, FMC and the Company and their respective
representatives negotiated and discussed the terms of FMC's proposal and the
<PAGE> 11
related Merger Agreement. On Sunday evening, June 11, 1995, an agreement was
reached between the parties on all terms, including price, of the Merger
Agreement, and the Merger Agreement was executed.
On Monday morning, June 12, 1995, FMC and the Company issued a joint
press release announcing the execution by FMC, the Purchaser and the Company of
the Merger Agreement and the amendment of the Offer.
6. Plans for the Company
Section 11 of the Offer to Purchase is amended and supplemented by
this Section 6 of this Supplement.
Pursuant to the Merger Agreement, FMC, the Purchaser and the Company
have agreed, among other things, that FMC shall be entitled to modify the
composition of the Board of Directors of the Company to include nominees of the
Purchaser following consummation of the Offer. See Section 7 of this Supplement.
7. Merger Agreement
The following is a summary of the Merger Agreement, a copy of which
has been filed as an exhibit to Amendment No. 6, filed by FMC with the
Commission on June 12 ,1995, to the Tender Offer Statement on Schedule 14D-1 of
the Purchaser and FMC, filed with the Commission on May 5, 1995. Such summary is
qualified in its entirety by reference to the Merger Agreement which is
incorporated by reference herein. Terms not defined herein have the meaning
ascribed to them in the Merger Agreement.
The Amended Offer. In the Merger Agreement, FMC and the Purchaser
agree, among other things, to amend the Offer (i) to reflect the increase in the
purchase price offered to $28.00 per Share in cash, (ii) to extend the Offer
until midnight, New York City time, on Monday, June 26, 1995, unless further
extended, and (iii) to modify the conditions of the Offer to conform to the
conditions to the Offer as set forth in Annex I to the Merger Agreement. The
obligation of FMC to accept for payment or pay for any Share tendered pursuant
to the Offer is subject only to the satisfaction of the conditions set forth in
Annex I to the Merger Agreement. Without the prior written consent of the
Company, the Purchaser may not (i) decrease the price per Share or change the
form of consideration payable, (ii) decrease the number of shares sought to be
purchased in the Offer, (iii) change the conditions set forth in Annex I to the
Merger Agreement, (iv) waive the Minimum Condition, (v) impose additional
conditions, or (vi) amend any other term of the Offer in any manner adverse to
the holders of the Shares. Subject to the terms of the Offer and the Merger
Agreement and the satisfaction of all the conditions of the Offer set forth in
Annex I to the Merger Agreement, as of any expiration date, FMC will accept for
payment and pay for all Shares validly tendered and not withdrawn pursuant to
the Offer as soon as practicable after such expiration date of the Offer. If the
conditions set forth in Annex I to the Merger Agreement are not satisfied or, to
the extent permitted by the Agreement, waived, FMC will extend the Offer from
time to time for the shortest time periods which it
<PAGE> 12
reasonably believes are necessary until the consummation of the Offer. Each of
FMC and the Purchaser shall use its reasonable best efforts to avoid or cure the
occurrence of any event set forth in Annex I to the Merger Agreement.
The Company represents that the Company's Board of Directors, at a
meeting duly called and held, has (i) determined that the Offer and the Merger
are fair to and in the best interests of the Company and its stockholders, (ii)
approved the Offer and the Merger in accordance with the Business Combination
Law and (iii) resolved to recommend acceptance of the Offer and approval and
adoption of the Merger and the Merger Agreement by the Company's stockholders
(if such approval is required by law); provided, however, that such
recommendation and approval may be withdrawn, modified or amended to the extent
that the Board of Directors determines in good faith, upon advice from its
outside counsel, that its fiduciary duties would require it to do so. The
Company further represents that Salomon Brothers Inc delivered to the Board of
Directors its written opinion that the consideration to be received for the
Shares pursuant to the Offer and the Merger is fair to the Company's
stockholders. The Company agrees to furnish the Purchaser with such information
and assistance as the Purchaser or its agents or representatives may reasonably
request in connection with communicating the Offer to the record and beneficial
holders of the Shares.
The Merger Agreement provides that FMC, upon the payment for Shares
pursuant to the Offer, and from time to time thereafter, is entitled to
designate such number of directors, rounded up to the next whole number, on the
Board as is equal to the product of the total number of directors on the Board
(determined after giving effect to the directors so elected) multiplied by the
percentage that the aggregate number of Shares beneficially owned by the
Purchaser or its affiliates bears to the total number of fully diluted Shares
then outstanding. The Company shall, upon the request of the Purchaser, promptly
take all actions necessary to cause FMC's designees to be so elected, including,
if necessary, seeking the resignations of one or more existing directors;
provided, however, that prior to the Effective Time (defined in Section 2.02 of
the Merger Agreement as ''the time the Merger becomes effective in accordance
with applicable law''), the Board shall always have at least three members who
are neither officers, directors, stockholders or designees of the Purchaser or
any of its affiliates (''Purchaser Insiders''). If the number of directors who
are not Purchaser Insiders is reduced below three for any reason prior to the
Effective Time, the remaining directors who are not Purchaser Insiders (or if
there is only one director who is not a Purchaser Insider, the remaining
director who is not a Purchaser Insider) are entitled to designate a person (or
persons) to fill such vacancy (or vacancies) who is not an officer, director,
stockholder or designee of the Purchaser or any of its affiliates and who will
be a director not deemed to be a Purchaser Insider for all purposes of the
Merger Agreement. Following the election or appointment of FMC's designees and
prior to the Effective Time, any amendment or 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 FMC or the Purchaser or
waiver of any of the Company's rights under the Merger Agreement, or any other
action taken by the Board in connection with the Merger Agreements, requires the
concurrence of a majority of the directors of the Company then in office who are
not Purchaser Insiders if such amendment, termination, extension, waiver or
action would
<PAGE> 13
have an adverse effect on the minority stockholders of the Company.
The Merger. The Merger Agreement provides that at the Effective Time
the Purchaser will be merged with and into the Company. Following the Merger,
the separate corporate existence of the Purchaser will cease and the Company
will continue as the surviving corporation (the ''Surviving Corporation''). The
Certificate of Incorporation of the Company, as in effect immediately prior to
the Effective Time, shall be the Certificate of Incorporation of the Surviving
Corporation, until thereafter amended in accordance with the provisions thereof
and of the Merger Agreement and applicable law. Subject to the provisions of the
Merger Agreement relating to indemnification, the By-Laws of the Purchaser in
effect at the time of the Effective Time shall be the By-Laws of the Surviving
Corporation until amended in accordance with the provisions thereof and
applicable law. Subject to applicable law, the directors of the Purchaser
immediately prior to the Effective Time will be the initial directors of the
Surviving Corporation and will hold office until their respective successors are
duly elected and qualified, or their earlier death, resignation or removal, and
the officers of the Company immediately prior to the Effective Time will be the
initial officers of the Surviving Corporation and will hold office until their
respective successors are duly elected and qualified, or their earlier death,
resignation or removal. By virtue of the Merger, at the Effective Time, each
Share issued and outstanding immediately prior to the Effective Time (other than
any Shares held by FMC, the Purchaser, any wholly-owned subsidiary of FMC or the
Purchaser, in the treasury of the Company or by any wholly-owned subsidiary of
the Company (which Shares, by virtue of the Merger and without any action on the
part of the holder thereof, are cancelled and retired and cease to exist with no
payment being made with respect thereto) and other than Dissenting Shares (as
defined below)) shall be converted into the right to receive in cash $28.00 (or
such higher price, if any, paid in the Offer), payable to the holder thereof,
without interest thereon, upon surrender of the certificate formerly
representing such Share. At the Effective Time, each share of common stock of
the Purchaser issued and outstanding immediately prior to the Effective Time
shall, by virtue of the Merger, be converted into and become one share of common
stock of the Surviving Corporation.
Pursuant to the Merger Agreement, the Company will use all
reasonable efforts to cause the holder of each outstanding option to purchase
Shares (an ''Option'') granted under the Company's 1987 Non-Qualified Stock
Option and Restricted Stock Award Plan or the Company's 1990 Stock Incentive
Plan (collectively, the ''Option Plans'') to agree that each such Option shall
be cancelled, upon the acceptance for payment of Shares by the Purchaser
pursuant to the Offer, at which time the Company will pay each holder of an
Option (whether or not such Option is then vested or exercisable) an amount
determined by multiplying (i) the excess, if any, of $28.00 (or such higher
price, if any, paid in the Offer) over the applicable exercise price of such
Option by (ii) the number of Shares such holder could have purchased if such
holder had exercised such Option in full immediately prior to such time (without
giving effect to any antidilutive changes in the number of Shares arising from
the Merger). In the case of the 1987 Option Plan, the Company will in any event
take such action prior to the expiration date for the Offer as is necessary to
ensure that Options issued thereunder will have been extinguished as of the
Effective Time upon payment of the amount contemplated
<PAGE> 14
by the preceding sentence for each Option. Prior to the Effective Time, the
Company shall obtain all consents necessary to give effect to the transaction
described above and shall make the payments provided above to those holders of
Options who have not consented prior to the time of acceptance for payment as
soon as possible after obtaining such consent.
The Merger Agreement provides that, if required by law in order to
consummate the Merger, the Company will convene a special meeting of its
stockholders as soon as practicable following the acceptance for payment of and
payment for Shares by the Purchaser pursuant to the Offer for the purpose of
considering and taking action upon the Merger Agreement. The Merger Agreement
further provides that, notwithstanding the foregoing, if FMC, the Purchaser or
any other subsidiary of FMC acquires at least 90% of the outstanding Shares, the
parties to the Merger Agreement will take the necessary and appropriate action
to cause the Merger to become effective as soon as practicable after the
acceptance for payment of and payment for the Shares by the Purchaser pursuant
to the Offer without a meeting of the stockholders of the Company, in accordance
with Section 253 of the Delaware Law.
Dissenting Shares. Shares outstanding immediately prior to the
Effective Time and held by a stockholder who has not voted in favor of the
Merger or consented thereto in writing and who has demanded appraisal for such
Shares in accordance with Section 262 of the Delaware Law, if such Section 262
provides for appraisal rights for such Shares in the Merger (''Dissenting
Shares''), shall not be converted into the right to receive $28.00 (or such
higher price, if any, paid in the Offer), unless and until such stockholder
fails to perfect or withdraws or otherwise loses his right to appraisal and
payment under the Delaware Law. If, after the Effective Time, any such
stockholder fails to perfect or withdraws or loses his right to appraisal, such
Dissenting Shares shall thereupon be treated as if they had been converted as of
the Effective Time into the right to receive $28.00 (or such higher price, if
any, paid in the Offer), without interest or dividends thereon. The Company
shall give FMC prompt notice of any demands received by the Company for
appraisal of Shares and, prior to the Effective Time, FMC shall have the right
to participate in all negotiations and proceedings with respect to such demands.
Prior to the Effective Time, the Company shall not, except with the prior
written consent of FMC, make any payment with respect to, or settle or offer to
settle, any such demands.
Representations and Warranties of the Company. The Merger Agreement
contains customary representations and warranties with respect to the Company,
including (i) with respect to the organization, corporate powers and
qualifications of the Company and its Significant Subsidiaries (as defined in
Section 4.01 of the Merger Agreement); (ii) that the charter and by-laws of the
Company and each of the Significant Subsidiaries are complete and correct; (iii)
with respect to the capitalization of the Company; (iv) that the execution and
delivery of the Merger Agreement by the Company and the consummation by the
Company of the transactions contemplated therein have been duly and validly
authorized and approved by the Company's Board and that no other corporate
proceedings on the part of the Company are necessary to authorize or approve the
Merger Agreement or to consummate the transactions contemplated therein (other
than, with respect to the Merger, the approval and
<PAGE> 15
adoption of the Merger and the Merger Agreement by the affirmative vote of the
holders of a majority of the Shares then outstanding, to the extent required
by applicable law); (v) with respect to the absence of any conflict between
the terms and provisions of the Merger Agreement and the transactions
contemplated thereby with any laws, regulations, agreements, contracts or
other instruments and obligations; (vi) with respect to the accuracy of the
documents filed with the SEC; (vii) with respect to the Company's financial
statements and financial condition; (viii) that the Board has taken
appropriate action such that the provisions of the Business Combination Law
will not apply to any of the transactions contemplated by the Merger
Agreement; (ix) that assuming the accuracy of FMC's representation regarding
the number of Shares it currently owned, neither the execution nor the
delivery of the Merger Agreement, nor the commencement of the Offer, will
result in a ''Distribution Date'' (as defined in the Rights Agreement); (x)
with respect to the absence of any broker or other fees or commissions, other
than fees in connection with Salomon's engagement (xi) with respect to the
absence of changes, events, conditions or developments reasonably likely to
result in a material adverse change in the business, operations, financial
condition or long-term profitability of the Company (other than changes
arising from general economic or industry conditions or from the commencement
of the Offer initially made on May 5, 1995, or the acquisition proposal made
by FMC on April 3, 1995), and that since February 28, 1995, the Company has
not taken certain material actions or agreed to take certain material actions
that the Company agrees it will not take after the date of the Merger
Agreement; and (xii) that the representations and warranties of the Company
contained in the Merger Agreement (as modified by the Company Disclosure
Schedule and certain other sections of the Merger Agreement) will be true and
correct as of the expiration date of the Offer as though then made (other than
those as of a specific date which will be true and correct in all material
respects as of such date).
Representations and Warranties of FMC and the Purchaser. The Merger
Agreement contains customary representations and warranties by FMC and the
Purchaser, including (i) with respect to the organization, corporate powers
and qualifications of FMC and Purchaser; (ii) that both FMC and the Purchaser
have the necessary corporate power and authority to execute and deliver the
Merger Agreement and to consummate the transactions contemplated therein;
(iii) with respect to the absence of any conflict between the terms and
provisions of the Merger Agreement and the transactions contemplated thereby
with any laws, regulations, agreements, contracts or other instruments and
obligations; (iv) with respect to information supplied by FMC and the
Purchaser in the Offer documents, Schedule 14D-9, the proxy statement and
other filings with the SEC or such other Governmental Entity; (v) that FMC or
the Purchaser has available to it the funds necessary to consummate the Offer
and the Merger and the transactions contemplated thereby; and (vi) that, as of
the date of the Merger Agreement, neither FMC or any of its affiliates is an
''Interested Stockholder'' as such term is defined in the Business Combination
Law, or an ''Acquiring Person'' as such term is defined in the Rights
Agreement.
Covenants. The Merger Agreement obligates the Company and its
subsidiaries, from June 11, 1995 until the Effective Time, to conduct their
operations only in the ordinary and usual course of business consistent with
past practice and
<PAGE> 16
obligates the Company and its subsidiaries to preserve intact their business
organizations, to keep available the services of their present officers and
key employees and to preserve the goodwill of those having business
relationships with it. The Merger Agreement also contains specific covenants
as to certain impermissible activities of the Company prior to the Effective
Time, which provide that the Company will not (and will not permit any of its
subsidiaries to) without the prior written consent of FMC: (i) adopt any
amendment to its charter or By-Laws or comparable organizational documents or
the Rights Agreement; (ii) except for issuances of capital stock of the
Company's subsidiaries to the Company or a wholly-owned subsidiary of the
Company, issue, reissue, pledge or sell, or authorize the issuance,
reissuance, pledge or sale of (a) additional shares of capital stock of any
class, or securities convertible into capital stock of any class, or any
rights, warrants or options to acquire any convertible securities or capital
stock, other than the issuance of Shares, in accordance with the terms of the
instruments governing such issuance on the date of the Merger Agreement,
pursuant to the exercise of options outstanding on the date hereof, or (b) any
other securities in respect of, in lieu of, or in substitution for, Shares
outstanding on the date of the Merger Agreement; (iii) declare, set aside or
pay any dividend or other distribution (whether in cash, securities or
property or any combination thereof) in respect of any class or series of its
capital stock other than between any of the Company and any of its
wholly-owned subsidiaries, except for (y) the regular quarterly dividend on
the Common Shares not in excess of $0.055 per Common Share with a record and
payment date in accordance with recent practice, provided that such dividend
may not be declared if shares are accepted for payment in accordance with the
Offer and the Merger Agreement prior to July 15, 1995 and (z) the redemption
of the Rights when and as provided in the Merger Agreement; (iv) split,
combine, subdivide, reclassify or redeem, purchase or otherwise acquire, or
propose to redeem or purchase or otherwise acquire, any shares of its capital
stock, or any of its other securities; (v) except for (a) increases in salary
and wages granted to officers and employees of the Company or its subsidiaries
in conjunction with promotions or other changes in job status or normal
compensation reviews in the ordinary course of business consistent with past
practice, or (b) increases in salary, wages and benefits to employees of the
Company pursuant to collective bargaining agreements entered into in the
ordinary course of business consistent with past practice: increase the
compensation or fringe benefits payable or to become payable to its directors,
officers or key employees (whether from the Company or any of its
subsidiaries), or pay or award any benefit not required by any existing plan
or arrangement (including, without limitation, the granting of stock options,
stock appreciation rights, shares of restricted stock or performance units
pursuant to the Option Plans or otherwise) or grant any additional severance
or termination pay to any officer, director or headquarter's employee of the
Company or to the president of either Principal Subsidiary (as defined in the
Merger Agreement) (other than as required by existing agreements or policies
described in the Company Disclosure Statement), or enter into any employment
or severance agreement with any director, officer or other key employee of the
Company or any of its subsidiaries or establish, adopt, enter into, amend or
waive any performance or vesting criteria under any collective bargaining,
bonus, profit sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, savings, welfare, deferred compensation, employment,
termination, severance or other employee benefit plan, agreement, trust, fund,
<PAGE> 17
policy or arrangement for the benefit or welfare of any directors, officers or
current or former employees (''Employee Benefit Arrangements''), except in
each case to the extent required by applicable law or regulation; provided,
however, that nothing herein will be deemed to prohibit the payment of
benefits as they become payable or prevent the payment of certain accrued
bonuses and sales incentive payments; (vi) except as set forth in the Company
Disclosure Schedule, acquire, sell, lease or dispose of any assets or
securities which are material to the Company and its subsidiaries, or enter
into any commitment to do any of the foregoing or enter into any material
commitment or transaction outside the ordinary course of business consistent
with past practice other than transactions between a wholly owned subsidiary
of the Company and the Company or another wholly owned subsidiary of the
Company; (vii) except as set forth in the Company Disclosure Schedule (x)
incur, assume or pre-pay any long-term debt or incur or assume any short-term
debt, except that the Company and its subsidiaries may incur or pre-pay debt
in the ordinary course of business in amounts and for purposes consistent with
past practice under existing lines of credit, (y) assume, guarantee, endorse
or otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other person except in the ordinary
course of business consistent with past practice, or (z) make any loans,
advances or capital contributions to, or investments in, any other person
except in the ordinary course of business consistent with past practice and
except for loans, advances, capital contributions or investments between any
wholly owned subsidiary of the Company and the Company or another wholly owned
subsidiary of the Company; (vii) settle or compromise any suit or claim or
threatened suit or claim where the amount involved was greater than $250,000;
(viii) other than in the ordinary course of business consistent with past
practice, (a) modify, amend or terminate any contract, (b) waive, release,
relinquish or assign any contract (or any of the Company's rights thereunder),
right or claim, or (c) cancel or forgive any indebtedness owed to the Company
or any of its subsidiaries in excess of $250,000 and in the case of (a) and
(b) is material to the Company and its subsidiaries taken as a whole;
provided, however, that the Company may not under any circumstance waive or
release any of its rights under any confidentiality agreement to which it is a
party (other than provisions limiting control-related activities if the
Company's Board of Directors, in good faith and upon the advice of counsel
determines that its fiduciary duties require it to do so); (ix) make any tax
election not required by law or settle or compromise any tax liability, in any
case that is material to the Company and its subsidiaries; or (x) agree in
writing or otherwise to take any of the foregoing actions prohibited under
Section 6.01 of the Merger Agreement or any action which would cause any
representation or warranty in the Merger Agreement to be or become untrue or
incorrect in any material respect.
Access to Information. The Merger Agreement provides that until the
Effective Time, the Company will, and will cause its subsidiaries, and each of
their respective officers, directors, employees, counsel, advisors and
representatives (collectively, the ''Company Representatives'') to give FMC
and the Purchaser and their respective officers, employees, counsel, advisors
and representatives (collectively, the ''FMC Representatives'') full access
(subject, however, to existing confidentiality and similar non-disclosure
obligations and the preservation of attorney-client and work product
privileges), during normal business hours, to the offices and other facilities
<PAGE> 18
and to the books and records of the Company and its subsidiaries and will
cause the Company Representatives and the Company's subsidiaries to furnish
FMC, the Purchaser and the FMC Representatives to the extent available with
such financial and operating data and such other information with respect to
the business and operations of the Company and its subsidiaries as FMC and the
Purchaser may from time to time request. In addition, FMC will comply with the
terms of the Confidentiality Agreement.
Reasonable Best Efforts. Subject to terms and conditions herein
provided and to applicable legal requirements, each of the parties to the
Merger Agreement has also agreed to use its reasonable best efforts to take, or
cause to be taken, all action, and to do, or cause to be done (in the case of
the Company consistent with the fiduciary duties of the Company's Board of
Directors under applicable law as provided in the Merger Agreement), and to
assist and cooperate with the other parties hereto in doing, as promptly as
practicable, all things necessary, proper or advisable under applicable laws
and regulations to ensure that the conditions set forth in Annex I to the
Merger Agreement and Article VII of the Merger Agreement are satisfied and to
consummate and make effective the transactions contemplated by the Offer and
the Merger Agreement. In addition, the parties have agreed that if at any time
prior to the Effective Time any event or circumstance relating to either the
Company or FMC or the Purchaser or any of their respective subsidiaries, should
be discovered by the Company or FMC and which should be set forth in an
amendment to the Offer Documents or Schedule 14D-9, the discovering party will
promptly inform the other party of such event or circumstance. If at any time
after the Effective Time any further action is necessary or desirable to carry
out the purposes of the Merger Agreement, including the execution of additional
instruments, the proper officers and directors of each party to the Merger
Agreement shall take all such necessary action.
Public Announcements. The Merger Agreement provides that until the
Purchaser purchases Shares pursuant to the Offer, FMC, the Purchaser and the
Company agree to use reasonable efforts to consult with each other before
issuing any press release or otherwise making any public statement with respect
to the transactions contemplated by the Merger Agreement.
Employee Benefit Arrangements. With respect to employee benefit
matters, the Merger Agreement provides that the Company will honor and, from
and after the Effective Time, FMC will cause the Surviving Corporation to
honor, all obligations under Employee Benefit Arrangements to which the Company
or any of its subsidiaries is presently a party which are listed in Section
6.06 of the Company Disclosure Schedule. Notwithstanding the foregoing, from
and after the Effective Time, subject to the remaining provisions of Section
6.06 to the Merger Agreement, the Surviving Corporation shall have the right to
amend, modify, alter or terminate any Employee Benefit Arrangements, provided
that any such action shall not adversely affect the rights of any employees or
other beneficiaries which shall have arisen thereunder prior to such amendment,
modification, alteration or termination and shall not affect any rights for
which the agreement of the other party or a beneficiary is required.
Notwithstanding the foregoing, for a period of two years following the
Effective Time, FMC shall cause the Surviving Corporation to continue to
provide to employees of the Company and its subsidiaries (excluding employees
covered by collective bargaining agreements) Fringe Benefits (as defined
<PAGE> 19
below) which are in the aggregate no less favorable than those provided to
such employees as of the date hereof; provided, that nothing in this sentence
shall be deemed to limit or otherwise affect the right of the Surviving
Corporation to terminate employment or change the place of work,
responsibilities, status or designation of any employee or group of employees
as the Surviving Corporation may determine in the exercise of its business
judgment and in compliance with applicable laws. Solely for purposes of
eligibility and vesting under Employee Benefit Arrangements (including without
limitation plans or programs of Parent and its affiliates after the Effective
Time), all service with the Company or any of its subsidiaries prior to the
Effective Time shall be treated as service with Parent and its affiliates.
''Fringe Benefits'' means only the following benefits: any health, dental,
pension, life insurance, long-term disability, severance, retirement or
savings plan, policy or arrangement.
Indemnification. Under the Merger Agreement, FMC has agreed that
all rights to indemnification existing in favor of any director or officer of
the Company and its subsidiaries (the ''Indemnified Parties''), as provided in
their respective charters or by-laws or, to the extent set forth in the Company
Disclosure Statement, as provided in an agreement between an Indemnified Party
and the Company or one of its subsidiaries, will survive the Merger and will
continue in full force and effect for a period of not less than six years from
the Effective Time; provided that in the event any claim or claims are asserted
or made within such six-year period, all rights to indemnification in respect
of any such claim or claims shall continue until final disposition of any and
all such claims. After the Effective Time, FMC agrees to cause the Surviving
Corporation to honor all rights to indemnification referred to in the preceding
sentence. 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, FMC will cause to be paid in
accordance with the applicable charters, by-laws and agreements, as incurred
such Indemnified Party's legal and other expenses (including the cost of any
investigation and preparation) incurred in connection therewith. FMC will also
pay all expenses, including attorney's fees, that may be incurred by any
Indemnified Party in enforcing the indemnity and other obligations provided for
in the Merger Agreement, subject to the limitations of the Delaware Law to the
extent applicable. FMC has also agreed that the Company and the Surviving
Corporation will cause to be maintained in effect for not less than four years
from the Effective Time the policies of the director's and officer's liability
insurance maintained by the Company; provided that the Surviving Corporation
may substitute other policies not materially less advantageous (other than to a
de minimis extent) to the beneficiaries of the current policies and provided
that such substitution shall not result in any gaps or lapses in coverage with
respect to matters occurring prior to the Effective Time; and provided,
further, that the Surviving Corporation shall not be required to pay an annual
premium in excess of 250% of the last annual premium paid by the Company prior
to the date of the Merger Agreement and if the Surviving Corporation is unable
to obtain the insurance, it shall obtain as much comparable insurance as
possible for an annual premium equal to such maximum amount.
Notification of Certain Matters. FMC and the Company are required to
<PAGE> 20
promptly notify each other of (i) the occurrence or non-occurrence of any fact
or event which would be reasonably likely (a) to cause any representation or
warranty contained in the Merger Agreement to be untrue or inaccurate in any
material respect at any time to the Effective Time or (b) to cause any
material covenant, condition or agreement under the Merger Agreement not to be
complied with or satisfied in all material respects and (ii) any failure of
the Company or FMC, as the case may be, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it in any
material respect; provided, however, that no such notification will affect the
representations or warranties of any party or the conditions to the
obligations of any party.
Redemption of Rights. Under the Merger Agreement, the Company has
agreed that it will redeem the Rights effective immediately prior to the
Purchaser's acceptance for payment of Shares pursuant to the Offer and will not
otherwise redeem the Rights, or amend or terminate the Rights Agreement, unless
in each such case the Board determines in good faith with the advice of outside
counsel that failure to take such action would result in a breach of its
fiduciary duties under applicable law. The Company has agreed that the Offer
will provide, and require that tendering holders of Shares confirm, that FMC
will be entitled to receive and retain the amounts paid in redemption of all
Rights attached to Shares acquired pursuant to the Offer.
State Takeover Laws. The Merger Agreement provides that the Company
will, upon the request of the Purchaser, take all reasonable steps to assist in
any challenge by the Purchaser to the validity or applicability to the
transactions contemplated by the Merger Agreement, including the Offer and the
Merger, of any state takeover law.
Disposition of Litigation and General Releases. The parties to the
Merger Agreement agree to immediately dismiss, with prejudice, with each party
bearing its own cost and litigation expenses, all proceedings pending between
them and their affiliates (including their respective directors), including any
and all counterclaims asserted against any such parties or their directors and
officers in connection with the Offer, as initially made on May 5, 1995, and
each shall thereafter sign and deliver such further papers as may be necessary
to effect such dismissals.
No Solicitation. Prior to the Effective Time, the Company may not,
and will not, authorize or permit any of its subsidiaries or any of its or its
subsidiaries' directors, officers, employees, agents or representatives,
directly or indirectly, to solicit, initiate, knowingly encourage or actively
facilitate, or furnish or disclose non-public information in furtherance of,
any inquiries or the making of any proposal with respect to any merger,
consolidation or other business combination involving the Company or either of
Smith Meter Inc. or Crosby Valve & Gage Company (the ''Principal
Subsidiaries'') or acquisition of any capital stock or any material portion of
the assets (except for acquisitions of assets in the ordinary course of
business consistent with past practice) of the Company or either of its
Principal Subsidiaries, or any combination of the foregoing (an ''Acquisition
Transaction'') or negotiate, explore or otherwise engage in substantive
discussions with any person (other than Purchaser, FMC or their respective
directors, officers, employees, agents and representatives) with respect to
<PAGE> 21
any Acquisition Transaction or enter into any agreement, arrangement or
understanding requiring it to abandon, terminate or fail to consummate the
Merger or any other transactions contemplated by the Merger Agreement;
provided that the Company may furnish information to, and negotiate or
otherwise engage in substantive discussions with, any party who delivers a
written proposal for an Acquisition Transaction if the Board of Directors of
the Company determines in good faith by a majority vote, based upon advice
from its outside legal counsel, that failing to take such action would
constitute a breach of the fiduciary duties of the Board and such proposal is,
in the written opinion of Salomon Brothers Inc, more favorable to the
Company's stockholders than the transactions contemplated by the Merger
Agreement. From and after June 11, 1995, the Merger Agreement provides that
the Company will immediately advise the Purchaser in writing of the receipt,
directly or indirectly, of any inquiries or proposals relating to an
Acquisition Transaction and furnish to the Purchaser either a copy of any such
proposal or a written summary of any such proposal.
Conditions to Consummation of the Merger. Pursuant to the Merger
Agreement, the respective obligations of FMC, the Purchaser and the Company to
consummate the Merger are subject to the satisfaction or waiver, at or before
the Effective Time, of each of the following conditions: (i) the stockholders
of the Company have duly approved the transactions contemplated by the Merger
Agreement, if required by applicable law; (ii) the Purchaser has accepted for
payment and paid for Shares pursuant to the Offer in accordance with the terms
of the Merger Agreement; provided that this condition will be satisfied with
respect to FMC and the Purchaser if the Purchaser fails to accept for payment
or pay for Shares pursuant to the Offer in violation of the terms of the Offer;
and (iii) the consummation of the Merger is not restrained, enjoined or
prohibited by any order, judgment, decree, injunction or ruling of a court of
competent jurisdiction or any Governmental Entity (as defined in the Merger
Agreement) and there is not any statute, rule or regulation enacted,
promulgated or deemed applicable to the Merger by any Governmental Entity which
prevents the consummation of the Merger.
Termination. The Merger Agreement may be terminated and the Merger
contemplated thereby may be abandoned at any time, notwithstanding approval
thereof by the stockholders of the Company (with any termination by FMC also
being an effective termination by the Purchaser): (i) by the mutual written
consent of FMC and the Company; (ii) by the Company if (a) the Purchaser fails
to commence the Offer as provided by the Merger Agreement, (b) the Purchaser
has not accepted for payment and paid for Shares pursuant to the Offer in
accordance with the terms thereof on or before September 15, 1995 or (c) the
Purchaser fails to purchase validly tendered Shares in violation of the terms
of the Offer or the Merger Agreement; (iii) by FMC or the Company if the Offer
is terminated or withdrawn pursuant to its terms without any Shares being
purchased thereunder; provided, however, that neither FMC nor the Company may
so terminate the Merger Agreement if such party shall have materially breached
the Merger Agreement or, in the case of FMC, if it or the Purchaser is in
material violation of the terms of the Offer; (iv) by FMC or the Company if
any court or other Governmental Entity has issued, enacted, entered,
promulgated or enforced any order, judgment, decree, injunction, or ruling or
taken any other action restraining, enjoining or otherwise prohibiting the
Merger and such order, judgment, decree, injunction, ruling or other action
<PAGE> 22
shall have become final and nonappealable; provided, however, that FMC may not
so terminate the Merger Agreement if any such order, judgment, decree,
injunction, ruling or other action is the result of or in any way related to
any Antitrust Laws (as defined in the Merger Agreement); and provided further
that the party seeking to terminate the Merger Agreement shall have used its
best efforts to remove or lift such order, decree or ruling; (v) by the
Company if, prior to the purchase of Shares pursuant to the Offer in
accordance with the terms of the Merger Agreement, the Board approves an
agreement to effect an Acquisition Transaction if the Board has determined in
good faith, upon advice from its outside counsel, that failure to approve such
agreement and terminate the Merger Agreement would constitute a breach of
fiduciary duties of the Board; provided that such termination shall not be
effective unless and until the Company shall have paid to FMC all of the fees
and expenses described below, (vi) by FMC if the Board withdraws, modifies or
changes its recommendation or approval in respect of the Merger Agreement or
the Offer, except due to FMC's or the Purchaser's material breach of the
Merger Agreement or material violation of the terms of the Offer, in a manner
adverse to FMC or the Purchaser or if the Board recommends or approves another
Acquisition Transaction or the Company enters into any agreement to effect an
Acquisition Transaction; (vii) by FMC if it shall not have breached, in any
material respect, any of its obligations under the Merger Agreement or under
the Offer and no Shares shall have been purchased pursuant to the Offer on or
before September 15, 1995; provided, however, that FMC may not so terminate
the Merger Agreement on or before March 31, 1996 if the conditions to FMC's
obligations to consummate the transactions contemplated hereunder have not
been satisfied on account of any impediment under any Antitrust Laws; or
(viii) by FMC if any of the conditions set forth in Annex I to the Merger
Agreement shall not have been satisfied by the expiration date or, prior
thereto, shall have become impossible to satisfy by the expiration date,
unless such circumstance results from the failure of the terminating party to
perform in any material respect any of its obligations under the Merger
Agreement; provided, however, that the Company may not so terminate the Merger
Agreement if FMC is willing to waive the relevant condition (other than the
Minimum Condition).
Pursuant to the Merger Agreement, in the event of the termination
of the Merger Agreement, the Merger Agreement becomes void and has no effect,
without any liability on the part of any party or its directors, officers or
stockholders, other than the provisions of Section 8.02, Section 8.03 and the
last sentence of Section 6.02 of the Merger Agreement, which shall survive any
such termination. Nothing contained in Section 8.02 of the Merger Agreement
shall relieve any party from liability for any breach of the Merger Agreement
or the Confidentiality Agreement.
Fees and Expenses. Whether or not the Merger is consummated, all
costs and expenses incurred in connection with the Offer, the Merger Agreement
and the transactions contemplated by the Merger Agreement shall be paid by the
party incurring such expenses. In the event that the Merger Agreement is
terminated pursuant clauses (v) or (vi) in the second preceding paragraph, then
the Company shall promptly reimburse FMC for the documented fees and expenses
of FMC and the Purchaser related to the Merger Agreement, the transactions
contemplated thereby and any related financing (subject to a maximum of
$2,400,000) and pay FMC a termination fee of $8,000,000. The prevailing party
<PAGE> 23
in any legal action undertaken to enforce the Merger Agreement or any
provision thereof shall be entitled to recover from the other party the costs
and expenses (including attorneys' and expert witness fees) incurred in
connection with such action.
Amendment. Subject to Section 1.03(c), the Merger Agreement may be
amended by the Company, FMC and the Purchaser at any time before or after any
approval of the Merger Agreement by the stockholders of the Company but, after
any such approval, no amendment shall be made which decreases the consideration
of $28.00 per share or which adversely affects the rights of the Company's
stockholders hereunder without the approval of such stockholders. The Merger
Agreement may not be amended except by an instrument in writing signed on
behalf of all the parties.
Extension; Waiver. Subject to Section 1.03(c) of the Merger
Agreement, at any time prior to the Effective Time, the parties to the Merger
Agreement may (i) extend the time for the performance of any of the obligations
or other acts of any other party hereto, (ii) waive any inaccuracies in the
representations and warranties contained herein by any other party or in any
document, certificate or writing delivered pursuant hereto by any other party
or (iii) waive compliance with any of the agreements of any other party or with
any conditions to its own obligations. Any agreement on the part of any party
to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
8. Certain Conditions of the Offer
Pursuant to the Merger Agreement, the conditions of the Offer
contained, among other places, in the Introduction and Section 14 of the Offer
to Purchase are hereby amended and restated in their entirety as follows:
Notwithstanding any other provisions of the Offer, the Purchaser
shall not be required to accept for payment or pay for any tendered Shares,
unless the Minimum Condition is satisfied. Furthermore, notwithstanding any
other provisions of the Offer, the Purchaser may, subject to the terms of the
Merger Agreement, amend the Offer or postpone the acceptance for payment of or
payment for tendered Shares if at any time on or after June 11, 1995 (unless
otherwise indicated below) and before the time of payment for any Shares, any
of the following events (each, an ''Event'') shall occur:
(a) any order or preliminary or permanent injunction shall be
entered in any action or proceeding before any court of competent jurisdiction
or any statute, rule, regulation, legislation, or order shall be enacted,
entered, enforced, promulgated, amended or issued by any United States
legislative body, court, government or governmental, administrative or
regulatory authority or agency (other than the waiting period provisions of the
HSR Act) which shall remain in effect and which shall have the effect of making
illegal or restraining or prohibiting the making of the Offer, the acceptance
for payment of, or payment for, the Shares by FMC, the Purchaser or any other
affiliate of FMC, or the consummation of the Offer or the Merger provided, that
FMC shall, if necessary to prevent the taking of such action, or the enactment,
enforcement, promulgation, amendment, issuance or
<PAGE> 24
application of any statute, rule, regulation, legislation, judgment, order
or injunction, Offer to accept an order to divest such of the Company's or
FMC's assets and businesses as may be necessary to forestall such
injunction or order and to hold separate such assets and business pending
such divestiture; or
(b) the Board or any committee thereof shall have withdrawn, or
shall have modified or amended in a manner adverse to FMC or the Purchaser, the
approval or recommendation of the Offer, the Merger or the Merger Agreement, or
approved or recommended any other acquisition of Shares other than the Offer
and the Merger; or
(c) the Company and the Purchaser and FMC shall have reached an
agreement that the Offer or the Merger Agreement be terminated, or the
Merger Agreement shall have been terminated in accordance with its terms;
or
(d) the Company shall have breached its representations and
warranties set forth in the Merger Agreement or failed to perform any of its
obligations, covenants or agreements under the Merger Agreement (other than any
breaches or failures to perform that, in the aggregate, do not have and are not
reasonably expected to have a material adverse effect on (i) the financial
condition, business, operations or long-term profitability of the Company and
its subsidiaries taken as a whole, (ii) the value reasonably attributable to
the Company by FMC or (iii) the ability of FMC to own or control the Company,
its equity securities and its assets); or
(e) Options issued and outstanding under the Company's 1990 Stock
Incentive Plan to purchase more than 25,000 Shares shall not have consented
to the changes described in Section 2.09 of the Merger Agreement; or
(f) there shall have occurred, and continued to exist, (i) any
general suspension of, or limitation on prices for, trading in securities on
the New York Stock Exchange, (ii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States, (iii) a
commencement of a war, armed hostilities or other national or international
crisis directly or indirectly involving the United States, (iv) any limitation
by any Governmental Entity on, or any other event which adversely affects, the
extension of credit by banks or other lending institutions in the United States
which has a material adverse effect on the ability of FMC to obtain financing
for the Offer, (v) in the case of any of the foregoing clauses (i) through (iv)
existing at the time of the commencement of the Offer, a material acceleration
or worsening thereof.
The foregoing conditions are for the benefit of FMC and the
Purchaser and may be asserted by FMC or the Purchaser regardless of the
circumstances giving rise to any such conditions and may be waived by FMC or
the Purchaser in whole or in part at any time and from time to time in their
reasonable discretion, in each case, subject to the terms of the Merger
Agreement. The failure by FMC or the Purchaser at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right and each
such right shall be deemed an ongoing right which may be asserted at any time
and from time to time.
<PAGE> 25
The Offer may be terminated by the Purchaser if the Merger
Agreement is terminated pursuant to its terms.
9. Source and Amount of Funds
Section 12 of the Merger Agreement is amended and supplemented by
this Section 9 of this Supplement.
The total amount of funds required by the Purchaser to purchase
the Shares pursuant to the Offer and the Merger and to pay fees and expenses
related to the Offer and the Merger is approximately $320 million. The
Purchaser plans to obtain all funds needed for the Offer and the Merger through
capital contributions or intercompany borrowings which will be made by FMC
and/or various wholly owned direct or indirect subsidiaries of FMC to the
Purchaser.
FMC and/or such subsidiaries plan to obtain such funds from general
corporate funds and through FMC's current Credit Agreements, dated December
16, 1994, as amended, among FMC, the lenders listed therein and Morgan
Guaranty Trust Company of New York, as agent, or other uncommitted credit
lines from various banks (the ''Credit Facilities''). The Credit Facilities
provide for revolving credit in an aggregate amount of $845 million for
general corporate purposes. As of June 12, 1995, approximately $397 million of
indebtedness is outstanding under the Credit Facilities. Although the Credit
Agreements originally restricted borrowings for the purpose of purchasing
''margin securities'' such as the Shares, FMC subsequently entered into
amendments to the Credit Agreements permitting FMC to purchase the Shares.
In the Merger Agreement, each of FMC and the Purchaser has
represented that it has available to it the funds necessary to consummate the
Offer and the Merger and the transactions contemplated thereby.
10. Certain Legal Matters
Section 15 of the Offer to Purchase is amended and supplemented by
this Section 10 of this Supplement.
Certain Litigation. On May 5, 1995, the Company commenced
litigation in the District Court of Nueces County of the State of Texas against
FMC alleging, among other things, that acting under false pretenses, FMC
obtained information from the Company essential to its corporate
decision-making and seeking, among other things, a temporary injunction
restraining, prohibiting and enjoining FMC to:
(a) withdraw its unsolicited offer for the Company and enter into
the confidentiality and standstill agreement which had been offered by the
Company to FMC;
(b) refrain from utilizing the allegedly fraudulently obtained
confidential information in aid or preparation for any offer to purchase
the Company;
<PAGE> 26
(c) refrain from utilizing the allegedly fraudulently obtained
confidential information in assisting or encouraging any other bid or offer
for the Company by any entity;
(d) turn over to the Company all records, reports, notes, or other
documents of whatsoever description recording, analyzing, referring to, or
otherwise reflecting any information obtained by FMC from its tours of the
Company's facilities; and
(e) turn over to the Company all nonpublic documents created by or
on behalf of the Company received from any source.
On May 8, 1995, FMC filed a separate action against the Company in
the United States District Court for the District of Delaware, which sought a
declaration that the Schedule 14D-1 filed by FMC satisfied the disclosure
requirements of the federal securities laws.
On May 11, 1995, the 214th District Court in Nueces County, Texas
entered an order staying the lawsuit that the Company had commenced against FMC
pending disposition of the case that FMC had previously filed against the
Company in Delaware Chancery Court. The court reserved the right to reconsider
the stay under certain circumstances. The Delaware Chancery Court case brought
by FMC challenged, among other things, the Company's refusal to negotiate with
FMC promptly and actively in good faith and the Company's threat to exclude
FMC from any auction or other process that may be instituted by it.
On May 22, 1995, the 214th District Court of Nueces County, Texas
denied the Company's motion for reconsideration of the order staying the
lawsuit that the Company had commenced against FMC.
As described in Section 7 above, FMC and the Company have agreed
in the Merger Agreement to immediately dismiss, with prejudice, all proceedings
pending between them and their affiliates, including any and all counterclaims
asserted against any such parties in connection with the Offer, as initially
made on May 5, 1995.
Antitrust. On May 8, 1995, FMC filed with the FTC and the Antitrust
Division a Premerger Notification and Report Form in connection with the
purchase of Shares pursuant to the Offer. The waiting period required by the
HSR Act expired at 11:59 p.m. on May 23, 1995.
Federal Republic of Germany. FMC provided to the Cartel Office
notice of the Offer pursuant to the GWB Act, and received written confirmation
from the Cartel Office that it may consummate the purchase of Shares pursuant
to the Offer.
11. Miscellaneous
The Offer is not being made to (nor will tenders be accepted from
or on behalf of) holders of Shares residing in any jurisdiction in which the
making of the Offer or the acceptance thereof would not be in compliance with
the
<PAGE> 27
securities, blue sky or other laws of such jurisdiction. However, the
Purchaser may, in its discretion, take such action as it may deem necessary to
make the Offer in any jurisdiction and extend the Offer to holders of Shares
in such jurisdiction.
In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer will be
deemed to be made on behalf of the Purchaser by the Dealer Manager or one or
more registered brokers or dealers that are licensed under the laws of such
jurisdiction.
FMC and the Purchaser have filed with the Commission amendments to
the Tender Offer Statement on Schedule 14D-1 pursuant to Rule 14d-3 of the
General Rules and Regulations under the Exchange Act furnishing certain
additional information with respect to the Offer, and may file further
amendments thereto. The Tender Offer Statement on Schedule 14D-1 and any and
all amendments thereto, including exhibits, may be examined and copies may be
obtained from the Commission in the same manner as described in Section 8 of
the Offer to Purchase with respect to information concerning the Company
(except that the amendments will not be available at the regional offices of
the Commission).
Except as modified by this Supplement, the terms and conditions
set forth in the Offer to Purchase remain applicable in all respects to the
Offer and this Supplement should be read in conjunction with the Offer to
Purchase and the related Letter of Transmittal.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF FMC OR THE PURCHASER NOT CONTAINED IN THE OFFER TO
PURCHASE AND HEREIN OR IN THE RELATED LETTER OF TRANSMITTAL AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED.
MII ACQUISITION CORP.
June 13, 1995
Facsimile copies of the Letter of Transmittal, properly completed
and duly executed, will be accepted. The Letter of Transmittal, certificate for
Shares and Rights and any other required documents should be sent or delivered
by each stockholder of the Company or by such stockholder's 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:
The Chase Manhattan Bank, N.A.
By Mail:
By Overnight Delivery:
By Hand:
<PAGE> 28
Box 3032
4 Chase MetroTech Ctr.
Brooklyn, NY 11245
c/o Chase Securities
Processing Corp
Ft. Lee Executive Park
1 Executive Dr., 6th Floor
Ft. Lee, NJ 07024
(9:00 a.m.-5:00 p.m.
New York City Time)
1 Chase Manhattan Plaza
Floor 1-B
Nassau and Liberty Streets
New York, NY 10081
By Facsimile Transmission:
(201) 592-4372
Information and Confirm by Telephone:
(201) 592-4370
Questions and requests for assistance may be directed to the
Information Agent or the Dealer Manager at their respective addresses and
telephone numbers set forth below. Additional copies of this Offer to Purchase,
the Letter of Transmittal and other tender offer materials may be obtained from
the Information Agent as set forth below, and will be furnished promptly at the
Purchaser's expense. You may also contact your broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. King & Co., Inc.
77 Water Street
New York, New York 10005
(212) 269-5550 (Call Collect)
or
(800) 758-7358
The Dealer Manager for the Offer is:
Merrill Lynch & Co.
World Financial Center
North Tower
New York, New York 10281-1305
(212) 236-4565 (Call Collect)
<PAGE> 1
[Conformed Copy]
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of June 11, 1995, by and
among FMC Corporation, a Delaware corporation ("Parent"), MII Acquisition
Corp., a Delaware corporation and a subsidiary of Parent (the "Purchaser"), and
Moorco International, Inc., a Delaware corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, the
Purchaser and the Company have approved the acquisition of the Company by
Parent on the terms and subject to the conditions set forth in this Agreement;
WHEREAS, on May 5, 1995, the Purchaser commenced a tender
offer (the "Initial Offer") to purchase all of the shares of Common Stock, par
value $.01 per share, of the Company (the "Common Shares") (including the
associated Preferred Share Purchase Rights (the "Rights") issued pursuant to
the Rights Agreement dated as of November 8, 1994 between the Company and the
Bank of New York, as Rights Agent (the "Rights Agreement"), which Rights
together with the Common Shares are hereinafter defined as the "Shares"), at a
price per Common Share of $20.00 net to the seller in cash subject to the
conditions set forth therein;
WHEREAS, the Board of Directors of the Company (the "Board")
has approved (i) the Initial Offer as amended pursuant to this Agreement (the
"Amended Offer") in order to, among other things, increase to $28.00 net to the
Seller in cash, the price to be paid thereunder for each outstanding Common
Share (such price, as it may hereafter be increased, the "Offer Price"), and
(ii) the Merger (as hereinafter defined) and is recommending that the Company's
stockholders accept the Amended Offer;
WHEREAS, the respective Boards of Directors of Parent, the
Purchaser and the Company have approved the merger of the Purchaser with and
into the Company, as set forth below (the "Merger"), in accordance with the
General Corporation Law of the State of Delaware (the "GCL") and upon the terms
and subject to the conditions set forth in this Agreement, whereby each of the
issued and outstanding Common Shares not owned directly or indirectly by Parent
or the Company will be converted into the right to receive the Offer Price in
cash;
WHEREAS, Parent, the Purchaser and the Company desire to make
certain representations, warranties, covenants and agreements in connection
with the Amended Offer and the
<PAGE> 2
Merger and also to prescribe various conditions to the Amended Offer and the
Merger.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, Parent, the Purchaser and the Company agree as follows:
ARTICLE I
THE AMENDED OFFER
SECTION 1.01 The Amended Offer.
(a) As promptly as practicable following the
execution hereof, Parent and the Purchaser shall issue a press release
announcing that the Purchaser is increasing the price to be paid for each
outstanding Common Share to $28.00, net to the seller in cash and extending the
expiration date of the Initial Offer until June 26, 1995 (the "Amended
Expiration Date"). As promptly as practicable, the Purchaser shall file with
the Securities and Exchange Commission (the "SEC") an amendment to the
Purchaser's Tender Offer Statement on Schedule 14D-1 (together with any
supplements or amendments thereto, the "Offer Documents"), which shall contain
(as an exhibit) a supplement to the Purchaser's Offer to Purchase dated May 5,
1995 (the "Offer to Purchase") which shall be mailed to the holders of Shares
with respect to the Amended Offer, which shall amend the Initial Offer as
described in the preceding sentence and shall amend Section 14 of the Offer to
Purchase to change the conditions set forth therein to those set forth in Annex
I hereto and no others; it being understood that, except for the foregoing
amendments or as otherwise provided herein, the Amended Offer shall be on the
same terms and subject to the same conditions as the Initial Offer. The
obligation of Parent to accept for payment or pay for any Common Shares
tendered pursuant to the Amended Offer will be subject only to the satisfaction
of the conditions set forth in Annex I hereto. Without the prior written
consent of the Company, the Purchaser shall not decrease the price per Common
Share or change the form of consideration payable in the Amended Offer,
decrease the number of Shares sought to be purchased in the Amended Offer,
change the conditions set forth in Annex I, waive the Minimum Condition (as
defined in Annex I), impose additional conditions to the Amended Offer or amend
any other term of the Offer in any manner adverse to the holders of Common
Shares. Subject to the terms of the Amended Offer and this Agreement and the
satisfaction of all the conditions of the Amended Offer set
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<PAGE> 3
forth in Annex I hereto as of any expiration date, Parent will accept for
payment and pay for all Common Shares validly tendered and not withdrawn
pursuant to the Amended Offer as soon as practicable after such expiration date
of the Amended Offer. Subject to Section 8.01, if the conditions set forth in
Annex I hereto are not satisfied or, to the extent permitted by this Agreement,
waived by the Parent, as of the Amended Expiration Date (or any subsequently
scheduled expiration date), Parent will extend the Amended Offer from time to
time for the shortest time periods which it reasonably believes are necessary
until the consummation of the Amended Offer. Each of Parent and the Purchaser
shall use its reasonable best efforts to avoid the occurrence of any event
specified in Annex I or to cure any such event that shall have occurred.
(b) The Offer Documents will comply in all
material respects with the provisions of applicable federal securities laws
and, on the date filed with the SEC and on the date first published, sent or
given to the Company's stockholders, shall not contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in light of
the circumstances under which they were made, not misleading, except that no
representation is made by Parent or the Purchaser with respect to information
supplied by the Company in writing for inclusion in the Offer Documents. Each
of Parent and the Purchaser, on the one hand, and the Company, on the other
hand, agrees promptly to correct any information provided by it for use in the
Offer Documents if and to the extent that it shall have become false or
misleading in any material respect and the Purchaser further agrees to take all
steps necessary to cause the Offer Documents as so corrected to be filed with
the SEC and to be disseminated to stockholders of the Company, in each case as
and to the extent required by applicable federal securities laws.
SECTION 1.02 Company Actions.
(a) The Company shall promptly file with the SEC
and mail to the holders of Shares an amendment to the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the
Offer (together with any amendments or supplements thereto, the "Schedule
14D-9"). The Schedule 14D-9 will set forth, and the Company hereby represents,
that the Board, at a meeting duly called and held, has (i) determined that the
Amended Offer and the Merger are fair to and in the best interests of the
Company and its stockholders, (ii) approved the Amended Offer and the Merger in
accordance
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<PAGE> 4
with Section 203 of the GCL, and (iii) resolved to recommend acceptance of the
Amended Offer and approval and adoption of the Merger and this Agreement by the
Company's stockholders (if such approval is required by applicable law);
provided, however, that such recommendation and approval may be withdrawn,
modified or amended to the extent that the Board determines in good faith, upon
advice from its outside counsel, that its fiduciary duties would require it to
do so. The Company further represents that, prior to the execution hereof,
Salomon Brothers Inc has delivered to the Board its written opinion that the
consideration to be received for the Common Shares pursuant to the Amended
Offer and the Merger is fair to the Company's stockholders.
(b) Each of the Company, on the one hand, and
Parent and the Purchaser, on the other hand, agree promptly to correct any
information provided by either of them for use in the Schedule 14D-9 if and to
the extent that it 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 to be disseminated to the holders of
Shares, in each case as and to the extent required by applicable federal
securities law.
(c) In connection with the Amended Offer, the
Company will furnish the Purchaser with such information and assistance as the
Purchaser or its agents or representatives may reasonably request in connection
with communicating the Amended Offer to the record and beneficial holders of
the Shares.
SECTION 1.03 Directors.
(a) Subject to compliance with applicable law,
promptly upon the payment by the Purchaser for Common Shares pursuant to the
Amended Offer, and from time to time thereafter, Parent shall be entitled to
designate such number of directors, rounded up to the next whole number, on the
Board as is equal to the product of the total number of directors on the Board
(determined after giving effect to the directors elected pursuant to this
sentence) multiplied by the percentage that the aggregate number of Common
Shares beneficially owned by Parent or its affiliates bears to the total number
of fully diluted Shares then outstanding, and the Company shall, upon request
of Parent, promptly take all actions necessary to cause Parent's designees to
be so elected, including, if necessary, seeking the resignations of one or more
existing directors; provided, however, that prior to the Effective Time (as
defined in Section 2.02), the Board
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<PAGE> 5
shall always have at least three members who are neither officers, directors,
stockholders or designees of the Purchaser or any of its affiliates ("Purchaser
Insiders"). If the number of directors who are not Purchaser Insiders is
reduced below three prior to the Effective Time, the remaining directors who
are not Purchaser Insiders (or if there is only one director who is not a
Purchaser Insider, the remaining director who is not a Purchaser Insider) shall
be entitled to designate a person (or persons) to fill such vacancy (or
vacancies) who is not an officer, director, stockholder or designee of the
Purchaser or any of its affiliates and who shall be a director not deemed to be
a Purchaser Insider for all purposes of this Agreement.
(b) The Company's obligations to appoint Parent's
designees to the Board shall be subject to Section 14(f) of the Exchange Act
and Rule 14f-1 thereunder. The Company shall promptly take all actions
required pursuant to such Section and Rule in order to fulfill its obligations
under this Section 1.03 and shall include in the Schedule 14D-9 such
information with respect to the Company and its officers and directors as is
required under such Section and Rule in order to fulfill its obligations under
this Section 1.03. Parent will supply any information with respect to itself
and its officers, directors and affiliates required by such Section and Rule to
the Company.
(c) Following the election or appointment of
Parent's designees pursuant to this Section 1.03 and prior to the Effective
Time, any amendment or 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 the Purchaser or waiver of any of the
Company's rights hereunder, or any other action taken by the Board in
connection with this Agreement, will require the concurrence of a majority of
the directors of the Company then in office who are not Purchaser Insiders if
such amendment, termination, extension, waiver or action would have an adverse
effect on the minority stockholders.
ARTICLE II
THE MERGER
SECTION 2.01 The Merger. Upon the terms and subject to the
satisfaction or waiver of the conditions hereof, and in accordance with the
applicable provisions of this Agreement and the GCL, at the Effective Time (as
defined in Section 2.02) the Purchaser shall be merged with and into the
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<PAGE> 6
Company. Following the Merger, the separate corporate existence of the
Purchaser shall cease and the Company shall continue as the surviving
corporation (the "Surviving Corporation"). At the option of Parent and
provided that such amendment does not delay the Effective Time, the Merger may
be structured so that, and this Agreement shall thereupon be amended to provide
that, the Company shall be merged with and into the Purchaser or another direct
or indirect wholly-owned subsidiary of Parent, with the Purchaser or such other
subsidiary of Parent continuing as the Surviving Corporation; provided,
however, that the Company shall be deemed not to have breached any of its
representations and warranties herein if and to the extent such breach would
have been attributable to such election.
SECTION 2.02 Effective Time; Closing. As soon as practicable
after the satisfaction or waiver of the conditions set forth in Section 7.01
(a) and (b), but subject to Section 7.01(c), the Company shall execute in the
manner required by the GCL and deliver to the Secretary of State of the State
of Delaware a duly executed and verified certificate of merger, or, if
permitted, a certificate of ownership and merger, and the parties shall take
such other and further actions as may be required by law to make the Merger
effective. The time the Merger becomes effective in accordance with applicable
law is referred to as the "Effective Time."
SECTION 2.03 Effects of the Merger. The Merger shall have the
effects set forth in Section 259 of the GCL.
SECTION 2.04 Certificate of Incorporation and By-Laws of the
Surviving Corporation.
(a) The Certificate of Incorporation of the
Company, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation, until thereafter
amended in accordance with the provisions thereof and hereof and applicable
law.
(b) Subject to the provisions of Section 6.07 of
this Agreement, the By-Laws of the Purchaser in effect at the Effective Time
shall be the By-Laws of the Surviving Corporation until amended in accordance
with the provisions thereof and applicable law.
SECTION 2.05 Directors. Subject to applicable law, the
directors of the Purchaser immediately prior to the Effective Time shall be the
initial directors of the Surviving Corporation and shall hold office until
their respective
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<PAGE> 7
successors are duly elected and qualified, or their earlier death, resignation
or removal.
SECTION 2.06 Officers. The officers of the Company
immediately prior to the Effective Time shall be the initial officers of the
Surviving Corporation and shall hold office until their respective successors
are duly elected and qualified, or their earlier death, resignation or
removal.
SECTION 2.07 Conversion of Common Shares. At the Effective
Time, by virtue of the Merger and without any action on the part of the holders
thereof, each Common Share issued and outstanding immediately prior to the
Effective Time (other than any Common Shares held by Parent, the Purchaser, any
wholly-owned subsidiary of Parent or the Purchaser, in the treasury of the
Company or by any wholly-owned subsidiary of the Company, which Common Shares,
by virtue of the Merger and without any action on the part of the holder
thereof, shall be cancelled and retired and shall cease to exist with no
payment being made with respect thereto, and other than Dissenting Shares (as
defined in Section 3.01)) shall be converted into the right to receive in cash
the Offer Price (the "Merger Price"), payable to the holder thereof, without
interest thereon, upon surrender of the certificate formerly representing such
Common Share.
SECTION 2.08 Conversion of Purchaser Common Stock. At the
Effective Time, each share of common stock, par value $.01 per share, of the
Purchaser issued and outstanding immediately prior to the Effective Time shall,
by virtue of the Merger and without any action on the part of the holder
thereof, be converted into and become one validly issued, fully paid and
non-assessable share of common stock, par value $.01 per share, of the
Surviving Corporation.
SECTION 2.09 Company Option Plans. The Company shall use all
reasonable efforts to cause the holder of each outstanding option to purchase
Common Shares (an "Option") granted under the Company's 1987 Non-Qualified
Stock Option and Restricted Stock Award Plan or the Company's 1990 Stock
Incentive Plan (collectively, the "Option Plans"), to agree that each such
Option shall be cancelled, upon the acceptance for payment of Common Shares by
the Purchaser pursuant to the Amended Offer, at which time the Company will pay
each such holder of an Option (whether or not such Option is then vested or
exercisable) an amount determined by multiplying (i) the excess, if any, of the
Offer Price over the applicable exercise price of such Option by (ii) the
number of Common Shares such holder could have purchased if such holder had
exercised such Option in full immediately prior to such
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<PAGE> 8
time (without giving effect to any antidilutive changes in the number of such
Common Shares arising from the Merger). In the case of the 1987 Option Plan,
the Company shall in any event take such action prior to the expiration date
for the Amended Offer as is necessary to ensure that Options issued thereunder
will have been extinguished as of the Effective Time upon payment of the amount
contemplated by the preceding sentence for each Option. If any consent of an
Option holder required pursuant to the second preceding sentence shall not be
obtained by the time of acceptance for payment, the Company shall, prior to the
Effective Time, obtain all consents necessary to give effect to the transaction
described in the foregoing sentence and shall make the payments provided in the
preceding sentence to those holders of Options who shall not have consented
prior to the time of acceptance for payment as soon as possible after obtaining
such consent.
SECTION 2.10 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:
(i) duly call, give notice of, convene
and hold a special meeting of its stockholders (the "Special Meeting")
as soon as practicable following the acceptance for payment of and
payment for Common Shares by the Purchaser pursuant to the Amended
Offer for the purpose of considering and taking action upon this
Agreement;
(ii) prepare and file with the SEC a
preliminary proxy statement relating to the Merger and this Agreement
and use its best efforts (x) to obtain and furnish the information
required to be included by the SEC in the Proxy Statement (as
hereinafter defined) and, after consultation with Parent, to respond
promptly to any comments made by the SEC with respect to the
preliminary proxy statement and cause a definitive proxy statement
(the "Proxy Statement") to be mailed to its stockholders and (y) to
obtain the necessary approvals of the Merger and this Agreement by its
stockholders; and
(iii) subject to the fiduciary obligations
of the Board under applicable law as provided in Section 1.02(a),
include in the Proxy Statement the recommendation of the Board that
stockholders of the Company vote in favor of the approval of the
Merger and the adoption of this Agreement.
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<PAGE> 9
(b) Parent agrees that it will vote, or
cause to be voted, all of the Common Shares then owned by it, the
Purchaser or any of its other subsidiaries in favor of the approval of
the Merger and the adoption of this Agreement.
SECTION 2.11 Merger Without Meeting of Stockholders.
Notwithstanding Section 2.10, in the event that Parent, the Purchaser or any
other subsidiary of Parent shall acquire at least 90% of the outstanding shares
of each outstanding class of capital stock of the Company pursuant to the
Amended Offer, the parties hereto agree to take all necessary and appropriate
action to cause the Merger to become effective as soon as practicable after the
acceptance for payment of and payment for Common Shares by the Purchaser
pursuant to the Amended Offer without a meeting of stockholders of the Company,
in accordance with Section 253 of the GCL.
ARTICLE III
DISSENTING SHARES; PAYMENT FOR SHARES
SECTION 3.01 Dissenting Shares. Notwithstanding anything in
this Agreement to the contrary, Common Shares outstanding immediately prior to
the Effective Time and held by a holder who has not voted in favor of the
Merger or consented thereto in writing and who has demanded appraisal for such
Shares in accordance with Section 262 of the GCL, if such Section 262 provides
for appraisal rights for such Sharesin the Merger ("Dissenting Shares"), shall
not be converted into the right to receive the Merger Price as provided in
Section 2.07, unless and until such holder fails to perfect or withdraws or
otherwise loses his right to appraisal and payment under the GCL. If, after
the Effective Time, any such holder fails to perfect or withdraws or loses his
right to appraisal, such Dissenting Shares shall thereupon be treated as if
they had been converted as of the Effective Time into the right to receive the
Merger Price, if any, to which such holder is entitled, without interest or
dividends thereon. The Company shall give Parent prompt notice of any demands
received by the Company for appraisal of Common Shares and, prior to the
Effective Time, Parent shall have the right to participate in all negotiations
and proceedings with respect to such demands. Prior to the Effective Time, the
Company shall not, except with the prior written consent of Parent, make any
payment with respect to, or settle or offer to settle, any such demands.
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<PAGE> 10
SECTION 3.02 Payment for Common Shares.
(a) From and after the Effective Time, The Chase
Manhattan Bank, N.A. or such other bank or trust company as shall be mutually
acceptable to Parent and the Company shall act as paying agent (the "Paying
Agent") in effecting the payment of the Merger Price in respect of certificates
(the "Certificates") that, prior to the Effective Time, represented Common
Shares entitled to payment of the Merger Price pursuant to Section 2.07. At
the Effective Time, Parent or the Purchaser shall deposit, or cause to be
deposited, in trust with the Paying Agent the aggregate Merger Price to which
holders of Common Shares shall be entitled at the Effective Time pursuant to
Section 2.07.
(b) Promptly after the Effective Time, the Paying
Agent shall mail to each record holder of Certificates that immediately prior
to the Effective Time represented Common Shares (other than Certificates
representing Dissenting Shares and Certificates representing Common Shares held
by Parent or the Purchaser, any wholly-owned subsidiary of Parent or the
Purchaser, in the treasury of the Company or by any wholly-owned subsidiary of
the Company) a form of letter of transmittal which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon proper delivery of the Certificates to the Paying Agent and
instructions for use in surrendering such Certificates and receiving the Merger
Price in respect thereof. Upon the surrender of each such Certificate, the
Paying Agent shall pay the holder of such Certificate the Merger Price
multiplied by the number of Common Shares formerly represented by such
Certificate, in consideration therefor, and such Certificate shall forthwith be
cancelled. Until so surrendered, each such Certificate (other than
Certificates representing Dissenting Shares and Certificates representing
Common Shares held by Parent or the Purchaser, any wholly-owned subsidiary of
Parent or the Purchaser, in the treasury of the Company or by any wholly-owned
subsidiary of the Company) shall represent solely the right to receive the
aggregate Merger Price relating thereto. No interest or dividends shall be
paid or accrued on the Merger Price. If the Merger Price (or any portion
thereof) is to be delivered to any person other than the person in whose name
the Certificate formerly representing Common Shares surrendered therefor is
registered, it shall be a condition to such right to receive such Merger Price
that the Certificate so surrendered shall be properly endorsed or otherwise be
in proper form for transfer and that the person surrendering such Common Shares
shall pay to the Paying Agent any transfer or other taxes required by reason of
the payment of the Merger Price to a
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<PAGE> 11
person other than the registered holder of the Certificate surrendered, or
shall establish to the satisfaction of the Paying Agent that such tax has been
paid or is not applicable.
(c) Promptly following the date which is 180 days
after the Effective Time, the Paying Agent shall deliver to the Surviving
Corporation all cash, Certificates and other documents in its possession
relating to the transactions described in this Agreement, and the Paying
Agent's duties shall terminate. Thereafter, each holder of a Certificate
formerly representing a Common Share may surrender such Certificate to the
Surviving Corporation and (subject to applicable abandoned property, escheat
and similar laws) receive in consideration therefor the aggregate Merger Price
relating thereto, without any interest or dividends thereon.
(d) After the Effective Time, there shall be no
transfers on the stock transfer books of the Surviving Corporation of any
Common Shares which were outstanding immediately prior to the Effective Time.
If, after the Effective Time, Certificates formerly representing Common Shares
are presented to the Surviving Corporation or the Paying Agent, they shall be
surrendered and cancelled in return for the payment of the aggregate Merger
Price relating thereto, as provided in this Article III, subject to applicable
law in the case of Dissenting Shares.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and the
Purchaser that except as set forth in the Company Disclosure Statement:
SECTION 4.01 Organization and Qualification; Subsidiaries.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Each of the Company's
significant subsidiaries (within the meaning of Regulation S-X under the
Exchange Act (the "Significant Subsidiaries")) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its incorporation. The Company and each of the Significant Subsidiaries has
the requisite corporate power and authority to own, operate or lease its
properties and to carry on its business as it is now being conducted, and is
duly qualified or licensed to do business, and is in good standing, in each
jurisdiction in which
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<PAGE> 12
the nature of its business or the properties owned, operated or leased by it
makes such qualification, licensing or good standing necessary, except where
the failure to have such power or authority, or the failure to be so qualified,
licensed or in good standing, would not have a Material Adverse Effect on the
Company. The term "Material Adverse Effect on the Company", as used in this
Agreement, means any change in or effect on the business, operations, financial
condition or long-term profitability of the Company or any of its subsidiaries
that is materially adverse to the Company and its subsidiaries taken as a
whole.
SECTION 4.02 Charter and By-Laws. The Company has heretofore
made available to Parent and the Purchaser a complete and correct copy of the
charter and the by-laws or comparable organizational documents, each as amended
to the date hereof, of the Company and each of the Significant Subsidiaries.
SECTION 4.03 Capitalization. The authorized capital stock of
the Company consists of 50,000,000 Common Shares and 5,000,000 shares of
Preferred Stock, no par value and 230,000 shares of Preferred Stock, $100 par
value (collectively "Preferred Stock"). As of the close of business on May 31,
1995, 11,146,022 Common Shares were issued and outstanding, excluding 1,118,089
Common Shares in treasury. As of the close of business on June 10, 1995 there
were no shares of Preferred Stock issued and outstanding. The Company has no
shares reserved for issuance, except that, as of May 31, 1995, there were
281,950 Common Shares reserved for issuance pursuant to outstanding Options
under the Option Plans and 500,000 shares of Series A Junior Participating Par
Preferred Stock, par value $1.00 per share, reserved for issuance upon exercise
of the Rights. As of the date hereof, the Company has no options to purchase
Common Shares outstanding other than as set forth in the Company Disclosure
Statement. Since May 31, 1995, the Company has not issued any shares of
capital stock except pursuant to the exercise of Options outstanding as of such
date. All the outstanding Common Shares are, and all Common Shares which may
be issued pursuant to the exercise of outstanding Options will be, when issued
in accordance with the respective terms thereof, duly authorized, validly
issued, fully paid and nonassessable. There are no bonds, debentures, notes or
other indebtedness having general voting rights (or convertible into securities
having such rights) ("Voting Debt") of the Company or any of its subsidiaries
issued and outstanding. Except as set forth above or for the Rights and except
for the transactions contemplated by this Agreement, there are no existing
options, warrants, calls, subscriptions or other rights, agreements,
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<PAGE> 13
arrangements or commitments of any character, relating to the issued or
unissued capital stock of the Company or any of its subsidiaries, obligating
the Company or any of its subsidiaries to issue, transfer or sell or cause to
be issued, transferred or sold any shares of capital stock or Voting Debt of,
or other equity interest in, the Company or any of its subsidiaries or
securities convertible into or exchangeable for such shares or equity interests
and neither the Company nor any of its subsidiaries is obligated to grant,
extend or enter into any such option, warrant, call, subscription or other
right, agreement, arrangement or commitment. Except as contemplated by this
Agreement or the Rights Agreement and except for the Company's obligations in
respect of the Options under the Option Plans, there are no outstanding
contractual obligations of the Company or any of its subsidiaries to
repurchase, redeem or otherwise acquire any Common Shares or the capital stock
of the Company or any of its subsidiaries. Each of the outstanding shares of
capital stock of each of the Company's subsidiaries is duly authorized, validly
issued, fully paid and nonassessable, and such shares of the Company's
subsidiaries as are owned by the Company or by a subsidiary of the Company are
owned in each case free and clear of any lien, claim, option, charge, security
interest, limitation, encumbrance and restriction of any kind (any of the
foregoing being a "Lien"), except such as would not have a Material Adverse
Effect on the Company (provided that the representation in this sentence with
respect to the Principal Subsidiaries (as hereinafter defined) is not qualified
by reference to such Material Adverse Effect).
SECTION 4.04 Authority Relative to this Agreement. The
Company has all necessary corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by the Company and the consummation by
the Company of the transactions contemplated hereby have been duly and validly
authorized and approved by the Board and no other corporate proceedings on the
part of the Company are necessary to authorize or approve this Agreement or to
consummate the transactions contemplated hereby (other than, with respect to
the Merger, the approval and adoption of the Merger and this Agreement by the
affirmative vote of the holders of a majority of the Common Shares then
outstanding, to the extent required by applicable law). This Agreement has
been duly and validly executed and delivered by the Company and, assuming the
due and valid authorization, execution and delivery of this Agreement by Parent
and the Purchaser, constitutes a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms,
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except that such enforceability (i) may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting or relating to the enforcement of
creditors' rights generally and (ii) is subject to general principles of
equity.
SECTION 4.05 No Conflict; Required Filings and Consents.
(a) None of the execution and delivery of this
Agreement by the Company, the consummation by the Company of the transactions
contemplated hereby or compliance by the Company with any of the provisions
hereof will (i) conflict with or violate the Certificate of Incorporation or
By-Laws of the Company or the comparable organizational documents of any of the
Significant Subsidiaries, (ii) conflict with or violate any statute, ordinance,
rule, regulation, order, judgment or decree applicable to the Company or its
subsidiaries, or by which any of them or any of their respective properties or
assets may be bound or affected, or (iii) result in a violation or 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 any loss of any
material benefit, or the creation of any Lien on any of the property or assets
of the Company or any of its subsidiaries (any of the foregoing referred to in
clause (ii) or this clause (iii) being a "Violation") pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
any of their respective properties may be bound or affected, except in the case
of the foregoing clauses (ii) or (iii) for any such Violations which would not
in the aggregate have a Material Adverse Effect on the Company.
(b) None of the execution and delivery of this
Agreement by the Company, the consummation by the Company of the transactions
contemplated hereby or compliance by the Company with any of the provisions
hereof will require any consent, waiver, approval, authorization or permit of,
or registration or filing with or notification to (any of the foregoing being a
"Consent"), any government or subdivision thereof, domestic, foreign or
supranational or any administrative, governmental or regulatory authority,
agency, commission, tribunal or body, domestic, foreign or supranational (a
"Governmental Entity"), except for (i) compliance with any applicable
requirements of the Exchange Act, (ii) the filing of a certificate of merger,
or, if permitted, a certificate
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of ownership and merger, pursuant to the GCL, (iii) certain state takeover and
environmental statutes, (iv) compliance with the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act") and any requirements of
any foreign or supranational Antitrust Laws (as hereinafter defined), and (v)
Consents the failure of which to obtain or make would not in the aggregate have
a Material Adverse Effect on the Company or materially adversely affect the
ability of the Company to consummate the transactions contemplated hereby.
SECTION 4.06 Reports and Financial Statements.
(a) The Company has filed with the SEC all forms,
reports, schedules, registration statements and definitive proxy statements
required to be filed by the Company with the SEC since May 31, 1992 (the "SEC
Reports"). As of their respective dates, the SEC Reports complied in all
material respects with the requirements of the Exchange Act or the Securities
Act of 1933 and the rules and regulations of the SEC promulgated thereunder
applicable, as the case may be, to such SEC Reports, and none of the SEC
Reports contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.
(b) The consolidated balance sheets as of May 31,
1994, 1993 and 1992 and the related consolidated statements of income, common
shareholders' equity and cash flows for each of the three years in the period
ended May 31, 1994 (including the related notes and schedules thereto) of the
Company contained in the Form 10-Ks for the years ended May 31, 1994, 1993 and
1992 included in the SEC Reports present fairly in all material respects the
consolidated financial position and the consolidated results of operations and
cash flows of the Company and its consolidated subsidiaries as of the dates or
for the periods presented therein in conformity with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis during
the periods involved except as otherwise noted therein, including the related
notes.
(c) The consolidated balance sheets and the
related statements of income and cash flows (including in each case the related
notes thereto) of the Company contained in the Forms 10-Q for the periods ended
August 31, 1994, November 30, 1994 and February 28, 1995 included in the SEC
Reports (collectively, the Quarterly Financial Statements) have been prepared
in accordance with the requirements for
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interim financial statements contained in Regulation S-X, which do not require
all the information and footnotes necessary for a fair presentation of
financial position, results of operations and cash flows in conformity with
generally accepted accounting principles. The Quarterly Financial Statements
reflect all adjustments, which include only normal recurring adjustments,
necessary to present fairly in all material respects the consolidated financial
position, results of operations and cash flows of the Company for all periods
presented.
SECTION 4.07 Information. None of the information supplied by
the Company in writing specifically for inclusion or incorporation by reference
in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the Proxy Statement
or (iv) any other document to be filed with the SEC or any other Governmental
Entity in connection with the transactions contemplated by this Agreement (the
"Other Filings") will, at the respective times filed with the SEC or other
Governmental Entity and, in addition, in the case of the Proxy Statement, at
the date it or any amendment or supplement is mailed to stockholders, at the
time of the Special 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 made therein, in
light of the circumstances under which they were made, not misleading. The
Schedule 14D-9 and the Proxy Statement will comply as to form in all material
respects with the provisions of the Exchange Act and the rules and regulations
thereunder, except that no representation is made by the Company with respect
to statements made therein based on information supplied by Parent or the
Purchaser in writing specifically for inclusion in the Proxy Statement.
SECTION 4.08 Certain Approvals. The Board has taken
appropriate action such that the provisions of Section 203 of the GCL will not
apply to any of the transactions contemplated by this Agreement.
SECTION 4.09 Rights Agreement. Assuming the accuracy of
Parent's representation in Section 5.06 of this Agreement, neither the
execution nor the delivery of this Agreement, nor the commencement of the
Amended Offer, will result in a "Distribution Date" (as defined in the Rights
Agreement).
SECTION 4.10 Brokers. Except for the engagement of Salomon
Brothers Inc ("Salomon"), none of the Company, any of its subsidiaries, or any
of their respective officers, directors or employees has employed any broker or
finder or
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incurred any liability for any brokerage fees, commissions or finder's fees in
connection with the transactions contemplated by this Agreement.
SECTION 4.11 Material Adverse Effect. Since February 28,
1995, except as disclosed in the SEC Reports, there has not been any material
adverse change, or any event, condition or development reasonably likely to
result in a material adverse change, in the business, operations, financial
condition or long-term profitability of the Company and its subsidiaries taken
as a whole, other than changes arising from general economic or industry
conditions or from the commencement of the Initial Offer or the acquisition
proposal made by Parent on April 3, 1995. Since February 28, 1995, (i) the
Company has not taken any action or agreed to take any action that the Company
is prohibited from taking after the date hereof by paragraphs (a) through (k)
of Section 6.01 of this Agreement and (ii) the Company has not taken any
material action or agreed to take any material action that the Company is
otherwise prohibited from taking after the date hereof by Section 6.01 of
this Agreement.
SECTION 4.12 Accuracy on Expiration Date. The representations
and warranties of the Company contained in this Article IV, as modified by the
Company Disclosure Schedule, and in the second and third sentences of Section
1.02(a) of this Agreement will be true and correct in all material respects as
of the expiration date of the Amended Offer as though then made (other than
representations and warranties as of a specific date, which will be true and
correct in all material respects as of such date).
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND THE PURCHASER
Parent and the Purchaser represent and warrant to the Company
as follows:
SECTION 5.01 Organization and Qualification. Parent is a
corporation duly organized, validly existing and in good standing under the
laws of Delaware and each material subsidiary of Parent is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Parent and each of its
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material subsidiaries (including the Purchaser) has the requisite corporate
power and authority to own, operate or lease its properties and to carry on its
business as it is now being conducted, and is duly qualified or licensed to do
business, and is in good standing, in each jurisdiction in which the nature of
its business or the properties owned, operated or leased by it makes such
qualification, licensing or good standing necessary, except where the failure
to have such power or authority, or the failure to be so qualified, licensed or
in good standing, would not have a Material Adverse Effect on Parent. The term
"Material Adverse Effect on Parent", as used in this Agreement, means any
change in or effect on the business, operations, financial condition or
long-term profitability of Parent or any of its subsidiaries that would be
materially adverse to Parent and its subsidiaries taken as a whole.
SECTION 5.02 Authority Relative to this Agreement. Each of
Parent and the Purchaser has all necessary corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Parent
and the Purchaser and the consummation by Parent and the Purchaser of the
transactions contemplated hereby have been duly and validly authorized and
approved by the Boards of Directors of Parent and the Purchaser and by Parent
as stockholder of the Purchaser and no other corporate proceedings on the part
of Parent or the Purchaser are necessary to authorize or approve this Agreement
or to consummate the transactions contemplated hereby. This Agreement has been
duly executed and delivered by each of Parent and the Purchaser and, assuming
the due and valid authorization, execution and delivery by the Company,
constitutes a valid and binding obligation of each of Parent and the Purchaser
enforceable against each of them in accordance with its terms, except that such
enforceability (i) may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting or relating to the enforcement of creditors'
rights generally and (ii) is subject to general principles of equity.
SECTION 5.03 No Conflict; Required Filings and Consents.
(a) None of the execution and delivery of this
Agreement by Parent or the Purchaser, the consummation by Parent or the
Purchaser of the transactions contemplated hereby or compliance by Parent or
the Purchaser with any of the provisions hereof will (i) conflict with or
violate the organizational documents of Parent or the Purchaser, (ii)
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conflict with or violate any statute, ordinance, rule, regulation, order,
judgment or decree applicable to Parent or the Purchaser, or any of their
subsidiaries, or by which any of them or any of their respective properties or
assets may be bound or affected, or (iii) result in a Violation pursuant to any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Parent or the Purchaser,
or any of their subsidiaries, is a party or by which any of their respective
properties or assets may be bound or affected, except in the case of the
foregoing clauses (ii) and (iii) for any such Violations which would not have a
Material Adverse Effect on Parent or materially adversely affect the ability of
Parent or the Purchaser to consummate the transactions contemplated hereby.
(b) None of the execution and delivery of this
Agreement by Parent and the Purchaser, the consummation by Parent and the
Purchaser of the transactions contemplated hereby or compliance by Parent and
the Purchaser with any of the provisions hereof will require any Consent of any
Governmental Entity, except for (i) compliance with any applicable requirements
of the Exchange Act, (ii) the filing of a certificate of merger, or, if
permitted, a certificate of ownership and merger, pursuant to the GCL, (iii)
notifications required by certain state takeover and environmental statutes and
(iv) Consents the failure of which to obtain or make would not have a Material
Adverse Effect on Parent or materially adversely affect the ability of Parent
or the Purchaser to consummate the transactions contemplated hereby.
SECTION 5.04 Information. None of the information supplied
or to be supplied by Parent and the Purchaser in writing specifically for
inclusion in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the Proxy
Statement or (iv) the Other Filings will, at the respective times filed with
the SEC or such other Governmental Entity and, in addition, in the case of the
Proxy Statement, at the date it or any amendment or supplement is mailed to
stockholders, at the time of the Special 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
made therein, in light of the circumstances under which they were made, not
misleading.
SECTION 5.05 Financing. Parent or the Purchaser has
available to it the funds necessary to consummate the Amended Offer and the
Merger and the transactions contemplated hereby.
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SECTION 5.06 Parent Not an Interested Stockholder or an
Acquiring Person. As of the date of this Agreement, neither Parent nor any of
its affiliates is an "Interested Stockholder" as such term is defined in
Section 203 of the GCL, or an "Acquiring Person" as such term is defined in the
Rights Agreement.
ARTICLE VI
COVENANTS
SECTION 6.01 Conduct of Business of the Company. Except as
contemplated by this Agreement or with the prior written consent of Parent,
during the period from the date of this Agreement to the Effective Time, the
Company will, and will cause each of its subsidiaries to, conduct its
operations only in the ordinary and usual course of business consistent with
past practice and will use its reasonable efforts, and will cause each of its
subsidiaries to use its reasonable efforts, to preserve intact the business
organization of the Company and each of its subsidiaries, to keep available the
services of its and their present officers and key employees, and to preserve
the good will of those having business relationships with it. Without limiting
the generality of the foregoing, and except as otherwise contemplated by this
Agreement, the Company will not, and will not permit any of its subsidiaries
to, prior to the Effective Time, without the prior written consent of Parent:
(a) adopt any amendment to its charter or By-Laws
or comparable organizational documents or the Rights Agreement;
(b) except for issuances of capital stock of the
Company's subsidiaries to the Company or a wholly-owned subsidiary of the
Company, issue, reissue, pledge or sell, or authorize the issuance, reissuance,
pledge or sale of (i) additional shares of capital stock of any class, or
securities convertible into capital stock of any class, or any rights, warrants
or options to acquire any convertible securities or capital stock, other than
the issuance of Common Shares (and the related Rights), in accordance with the
terms of the instruments governing such issuance on the date hereof, pursuant
to the exercise of options outstanding on the date hereof, or (ii) any other
securities in respect of, in lieu of, or in substitution for, Shares
outstanding on the date hereof;
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(c) declare, set aside or pay any dividend or other
distribution (whether in cash, securities or property or any combination
thereof) in respect of any class or series of its capital stock other than
between any of the Company and any of its wholly-owned subsidiaries, except for
(y) the regular quarterly dividend on the Common Shares not in excess of $0.055
per Common Share with a record and payment date in accordance with recent
practice, provided that such dividend may not be declared if Common Shares are
accepted for payment in accordance with the Amended Offer and this Agreement
prior to July 15, 1995 and (z) the redemption of the Rights when and as
provided in this Agreement;
(d) split, combine, subdivide, reclassify or redeem,
purchase or otherwise acquire, or propose to redeem or purchase or otherwise
acquire, any shares of its capital stock, or any of its other securities;
(e) except for (i) increases in salary, wages and
benefits granted to officers and employees of the Company or its subsidiaries
in conjunction with promotions or other changes in job status or normal
compensation reviews in the ordinary course of business consistent with past
practice, or (ii) increases in salary, wages and benefits to employees of the
Company pursuant to collective bargaining agreements entered into in the
ordinary course of business consistent with past practice: increase the
compensation or fringe benefits payable or to become payable to its directors,
officers or key employees (whether from the Company or any of its
subsidiaries), or pay or award any benefit not required by any existing plan or
arrangement to any officer, director or key employee (including, without
limitation, the granting of stock options, stock appreciation rights, shares of
restricted stock or performance units pursuant to the Option Plans or
otherwise), or grant any additional severance or termination pay to any
officer, director, or headquarters' employee of the Company or to the president
of either Principal Subsidiary (other than as required by existing agreements
or policies described in the Company Disclosure Statement), or enter into any
employment or severance agreement with, any director, officer or other key
employee of the Company or any of its subsidiaries or establish, adopt, enter
into, amend or waive any performance or vesting criteria under any collective
bargaining, bonus, profit sharing, thrift, compensation, stock option,
restricted stock, pension, retirement, savings, welfare, deferred compensation,
employment, termination, severance or other employee benefit plan, agreement,
trust, fund, policy or arrangement for the benefit or welfare of any directors,
officers or current or former employees (any of the foregoing being an
"Employee Benefit
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Arrangement"), except in each case to the extent required by applicable law or
regulation; provided, however, that nothing herein will be deemed to prohibit
the payment of benefits as they become payable or prevent the payment, prior to
the consummation of the Amended Offer, of (i) annual bonuses in respect of the
fiscal year ended May 31, 1995 in an aggregate amount up to $1,427,549 (which
bonuses have been accrued in the results set forth in the Company Disclosure
Statement and which aggregate amount is the sum of the target bonuses set forth
in the plans under which such bonuses are awarded) and (ii) sales incentive
payments pursuant to the Smith Meter Inc. Sales Incentive Plan and the Crosby
Valve and Gage Company Sales Incentive Plan in respect of the fiscal year ended
May 31, 1995 in an aggregate amount up to $275,000 (which payments have been
accrued in the results set forth in the Company Disclosure Statement and which
aggregate amount is the sum of the target incentive awards set forth in such
plans);
(f) except as set forth in the Company Disclosure
Schedule, acquire, sell, lease or dispose of any assets or securities which are
material to the Company and its subsidiaries, or enter into any commitment to
do any of the foregoing or enter into any material commitment or transaction
outside the ordinary course of business consistent with past practice other
than transactions between a wholly owned subsidiary of the Company and the
Company or another wholly owned subsidiary of the Company;
(g) except as set forth in the Company Disclosure
Schedule (i) incur, assume or pre-pay any long-term debt or incur or assume any
short-term debt, except that the Company and its subsidiaries may incur or
pre-pay debt in the ordinary course of business in amounts and for purposes
consistent with past practice under existing lines of credit, (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other person except in
the ordinary course of business consistent with past practice, or (iii) make
any loans, advances or capital contributions to, or investments in, any other
person except in the ordinary course of business consistent with past practice
and except for loans, advances, capital contributions or investments between
any wholly owned subsidiary of the Company and the Company or another wholly
owned subsidiary of the Company;
(h) settle or compromise any suit or claim or
threatened suit or claim where the amount involved was greater than $250,000;
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(i) other than in the ordinary course of business
consistent with past practice, (i) modify, amend or terminate any contract,
(ii) waive, release, relinquish or assign any contract (or any of the Company's
rights thereunder), right or claim, or (iii) cancel or forgive any indebtedness
owed to the Company or any of its subsidiaries in excess of $250,000, and that
in the case of (i) and (ii) is material to the Company and its subsidiaries
taken as a whole; provided, however, that the Company may not under any
circumstance waive or release any of its rights under any confidentiality
agreement (except that provisions limiting control-related activities may be
waived if the Company's Board of Directors determines in good faith, upon the
advice of its outside counsel, that its fiduciary duties require it to do so)
to which it is a party;
(j) make any tax election not required by law or
settle or compromise any tax liability, in any case that is material and
adverse to the Company and its subsidiaries; or
(k) agree in writing or otherwise to take any of
the foregoing actions prohibited under Section 6.01 or any action which would
cause any representation or warranty in this Agreement to be or become untrue
or incorrect in any material respect.
SECTION 6.02 Access to Information. From the date of this
Agreement until the Effective Time, the Company will, and will cause its
subsidiaries, and each of their respective officers, directors, employees,
counsel, advisors and representatives (collectively, the "Company
Representatives") to, give Parent and the Purchaser and their respective
officers, employees, counsel, advisors and representatives (collectively, the
"Parent Representatives") full access (subject, however, to existing
confidentiality and similar non-disclosure obligations and the preservation of
attorney client and work product privileges), during normal business hours, to
the offices and other facilities and to the books and records of the Company
and its subsidiaries and will cause the Company Representatives and the
Company's subsidiaries to furnish Parent, the Purchaser and the Parent
Representatives to the extent available with such financial and operating data
and such other information with respect to the business and operations of the
Company and its subsidiaries as Parent and the Purchaser may from time to time
request. In addition, Parent will comply with the terms of the Confidentiality
Agreement (as hereinafter defined).
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SECTION 6.03 Reasonable Best Efforts. Subject to the terms
and conditions herein provided and to applicable legal requirements, each of the
parties hereto agrees to use its reasonable best efforts to take, or cause to
be taken, all action, and to do, or cause to be done (in the case of the
Company consistent with the fiduciary duties of the Company's Board of
Directors under applicable law as provided in Section 1.02(a)), and to assist
and cooperate with the other parties hereto in doing, as promptly as
practicable, all things necessary, proper or advisable under applicable laws
and regulations to ensure that the conditions set forth in Annex I and Article
VII are satisfied and to consummate and make effective the transactions
contemplated by the Amended Offer and this Agreement.
In addition, if at any time prior to the Effective Time any
event or circumstance relating to either the Company or Parent or the Purchaser
or any of their respective subsidiaries, should be discovered by the Company or
Parent, as the case may be, and which should be set forth in an amendment to
the Offer Documents or Schedule 14D-9, the discovering party will promptly
inform the other party of such event or circumstance. If at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, including the execution of additional instruments,
the proper officers and directors of each party to this Agreement shall take
all such necessary action.
SECTION 6.04 Consents.
(a) Each of the parties will use its reasonable
best efforts to obtain as promptly as practicable all Consents of any
Governmental Entity or any other person required in connection with, and
waivers of any Violations that may be caused by, the consummation of the
transactions contemplated by the Amended Offer and this Agreement.
(b) In furtherance and not in limitation of the
foregoing, Parent shall use its best efforts to resolve such objections, if
any, as may be asserted with respect to the transactions contemplated by this
Agreement under any antitrust, competition or trade regulatory laws, rules or
regulations of any domestic or foreign government or governmental authority or
any multinational authority ("Antitrust Laws"). If any suit is instituted
challenging any of the transactions contemplated by this Agreement as violative
of any Antitrust Law, Parent shall take such action (including, without
limitation, agreeing to hold separate or to divest any of the businesses,
product lines or assets of Parent or
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any of its affiliates or of any of the Company, its subsidiaries or affiliates)
as may be required (a) by the applicable government or governmental or
multinational authority (including, without limitation, the Antitrust Division
of the United States Department of Justice, the Federal Trade Commission or the
European Economic Area) in order to resolve such objections as such government
or authority may have to such transactions under such Antitrust Law, or (b) by
any domestic or foreign court or similar tribunal, in any suit brought by a
private party or governmental or multinational authority challenging the
transactions contemplated by this Agreement as violative of any Antitrust Law,
in order to avoid the entry of, or to effect the dissolution of, any
injunction, temporary restraining order or other order that has the effect of
preventing the consummation of any of such transactions. The entry by a court,
in any suit brought by a private party or governmental or multinational
authority challenging the transactions contemplated by this Agreement as
violative of any Antitrust Law, of an order or decree permitting the
transactions contemplated by this Agreement, but requiring that any of the
businesses, product lines or assets of any of Parent or its affiliates, the
Company or its subsidiaries or affiliates be divested or held separate by
Parent, or that would otherwise limit Parent's freedom of action with respect
to, or its ability to retain, the Company and its subsidiaries or any portion
thereof or any of Parent's or its affiliates' other assets or businesses, shall
not be deemed a failure to satisfy the conditions specified in Annex I hereto
or Section 7.01(c) hereof.
(c) Any party hereto shall promptly inform the
others of any material communication from the United States Federal Trade
Commission, the Department of Justice, the European Economic Area or any other
domestic or foreign government or governmental or multinational authority
regarding any of the transactions contemplated by this Agreement. If any party
or any affiliate thereof receives a request for additional information or
documentary material from any such government or authority with respect to the
transactions contemplated by this Agreement, then such party will endeavor in
good faith to make, or cause to be made, as soon as reasonably practicable and
after consultation with the other party, an appropriate response in compliance
with such request. Parent will advise the Company promptly in respect of any
understandings, undertakings or agreements (oral or written) which Parent
proposes to make or enter into with the Federal Trade Commission, the
Department of Justice, the European Economic Area or any other domestic or
foreign government or governmental or multinational authority in connection
with the transactions contemplated by this Agreement.
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SECTION 6.05 Public Announcements. So long as this Agreement
is in effect, but only until the Purchaser purchases Shares pursuant to the
Offer, Parent, the Purchaser and the Company agree to use reasonable efforts to
consult with each other before issuing any press release or otherwise making
any public statement with respect to the transactions contemplated by this
Agreement.
SECTION 6.06 Employee Benefit Arrangements. Parent agrees
that the Company will honor and, from and after the Effective Time, Parent will
cause the Surviving Corporation to honor, all obligations under Employee
Benefit Arrangements to which the Company or any of its subsidiaries is
presently a party which are listed in Section 6.06 of the Company Disclosure
Schedule. Notwithstanding the foregoing, from and after the Effective Time,
subject to the remaining provisions of this Section 6.06, the Surviving
Corporation shall have the right to amend, modify, alter or terminate any
Employee Benefit Arrangements, provided that any such action shall not
adversely affect the rights of any employees or other beneficiaries which shall
have arisen thereunder prior to such amendment, modification, alteration or
termination and shall not affect any rights for which the agreement of the
other party or a beneficiary is required. Notwithstanding the foregoing, for a
period of two years following the Effective Time, Parent shall cause the
Surviving Corporation to continue to provide to employees of the Company and
its subsidiaries (excluding employees covered by collective bargaining
agreements) Fringe Benefits (as defined below) which are in the aggregate no
less favorable than those provided to such employees as of the date hereof;
provided, that nothing in this sentence shall be deemed to limit or otherwise
affect the right of the Surviving Corporation to terminate employment or change
the place of work, responsibilities, status or designation of any employee or
group of employees as the Surviving Corporation may determine in the exercise
of its business judgment and in compliance with applicable laws. Solely for
purposes of eligibility and vesting under Employee Benefit Arrangements
(including without limitation plans or programs of Parent and its affiliates
after the Effective Time), all service with the Company or any of its
subsidiaries prior to the Effective Time shall be treated as service with
Parent and its affiliates. "Fringe Benefits" means only the following
benefits: any health, dental, pension, life insurance, long-term disability,
severance, retirement or savings plan, policy or arrangement.
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SECTION 6.07 Indemnification.
(a) Parent agrees that all rights to indemnification
now existing in favor of any director or officer of the Company and its
subsidiaries (the "Indemnified Parties") as provided in their respective
charters or by-laws or, to the extent set forth in the Company Disclosure
Statement, as provided, in an agreement between an Indemnified Party and the
Company or one of its subsidiaries, shall survive the Merger and shall continue
in full force and effect for a period of not less than six years from the
Effective Time; provided that in the event any claim or claims are asserted or
made within such six-year period, all rights to indemnification in respect of
any such claim or claims shall continue until final disposition of any and all
such claims. After the Effective Time, Parent agrees to cause the Surviving
Corporation to honor all rights to indemnification referred to in the preceding
sentence. 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 will cause to be paid in
accordance with the applicable charters, by-laws and agreements, as incurred
such Indemnified Party's legal and other expenses (including the cost of any
investigation and preparation) incurred in connection therewith. Parent shall
pay all expenses, including attorneys' fees, that may be incurred by any
Indemnified Party in enforcing the indemnity and other obligations provided for
in this Section 6.07 subject to the limitations of the GCL to the extent
applicable.
(b) Parent agrees that the Company, and from and
after the Effective Time, the Surviving Corporation shall cause to be
maintained in effect for not less than four years from the Effective Time the
current policies of the directors' and officers' liability insurance maintained
by the Company; provided that the Surviving Corporation may substitute therefor
other policies not less advantageous (other than to a de minimus extent) to the
beneficiaries of the current policies and provided that such substitution shall
not result in any gaps or lapses in coverage with respect to matters occurring
prior to the Effective Time; and provided, further, that the Surviving
Corporation shall not be required to pay an annual premium in excess of 250% of
the last annual premium paid by the Company prior to the date hereof and if the
Surviving Corporation is unable to obtain the insurance
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required by this Section 6.07(b) it shall obtain as much comparable insurance
as possible for an annual premium equal to such maximum amount.
SECTION 6.08 Notification of Certain Matters. Parent and
the Company shall promptly notify each other of (a) the occurrence or
non-occurrence of any fact or event which would be reasonably likely (i) to
cause any representation or warranty contained in this Agreement to be untrue
or inaccurate in any material respect at any time from the date hereof to the
Effective Time or (ii) to cause any material covenant, condition or agreement
under this Agreement not to be complied with or satisfied in all material
respects and (b) any failure of the Company or Parent, as the case may be, to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it hereunder in any material respect; provided, however, that
no such notification shall affect the representations or warranties of any
party or the conditions to the obligations of any party hereunder.
SECTION 6.09 Redemption of Rights. The Company will redeem
the Rights effective immediately prior to the Purchaser's acceptance for
payment of Common Shares pursuant to the Amended Offer and will not otherwise
redeem the Rights, or amend or terminate the Rights Agreement, unless in each
such case the Board determines in good faith with the advice of outside counsel
that failure to take such action would result in a breach of its fiduciary
duties under applicable law. The Company agrees that the Amended Offer will
provide, and require that tendering holders of Common Shares confirm, that
Parent will be entitled to receive and retain the amounts paid in redemption of
all Rights attached to Common Shares acquired pursuant to the Amended Offer.
SECTION 6.10 State Takeover Laws. The Company shall, upon
the request of the Purchaser, take all reasonable steps to assist in any
challenge by the Purchaser to the validity or applicability to the transactions
contemplated by this Agreement, including the Amended Offer and the Merger, of
any state takeover law.
SECTION 6.11 Disposition of Litigation. The parties hereto
shall immediately dismiss, with prejudice, with each party bearing its own
costs and litigation expenses, all proceedings pending between them and their
affiliates (including their respective directors), including any and all
counterclaims asserted against any such parties or their directors and officers
in connection with the Initial Offer
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(collectively, the "Litigation") and each shall thereafter sign and deliver
such further papers as may be necessary to effect such dismissals.
SECTION 6.12 No Solicitation.
(a) The Company agrees that, prior to the Effective
Time, it shall not, and shall not authorize or permit any of its subsidiaries
or any of its or its subsidiaries' directors, officers, employees, agents or
representatives, directly or indirectly, to solicit, initiate, knowingly
encourage or actively facilitate, or furnish or disclose non-public information
in furtherance of, any inquiries or the making of any proposal with respect to
any merger, consolidation or other business combination involving the Company
or either of Smith Meter Inc. or Crosby Valve & Gage Company (the "Principal
Subsidiaries") or acquisition of any capital stock or any material portion of
the assets (except for acquisition of assets in the ordinary course of business
consistent with past practice) of the Company or either of its Principal
Subsidiaries, or any combination of the foregoing (an "Acquisition
Transaction"), or negotiate, explore or otherwise engage in substantive
discussions with any person (other than Purchaser, Parent or their respective
directors, officers, employees, agents and representatives) with respect to any
Acquisition Transaction or enter into any agreement, arrangement or
understanding requiring it to abandon, terminate or fail to consummate the
Merger or any other transactions contemplated by this Agreement; provided that
the Company may furnish information to, and negotiate or otherwise engage in
substantiative discussions with, any party who delivers a written proposal for
an Acquisition Transaction if the Board or Directors of the Company determines
in good faith by a majority vote, based upon advice from its outside legal
counsel, that failing to take such action would constitute a breach of the
fiduciary duties of the Board and such a proposal is, in the written opinion of
Salomon Brothers Inc, more favorable to the Company's stockholders from a
financial point of view than the transactions contemplated by this Agreement.
(b) From and after the execution of this Agreement,
the Company shall immediately advise the Purchaser in writing of the receipt,
directly or indirectly, of any inquiries or proposals relating to an
Acquisition Transaction and furnish to the Purchaser either a copy of any such
proposal or a written summary of any such proposal.
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ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.01 Conditions. The respective obligations of
Parent, the Purchaser and the Company to consummate the Merger are subject to
the satisfaction, at or before the Effective Time, of each of the following
conditions:
(a) Stockholder Approval. The stockholders of the
Company shall have duly approved the transactions contemplated by this
Agreement, if required by applicable law.
(b) Purchase of Common Shares. The Purchaser shall
have accepted for payment and paid for Common Shares pursuant to the Amended
Offer in accordance with the terms hereof; provided that this condition shall
be deemed to have been satisfied with respect to Parent and the Purchaser if
the Purchaser fails to accept for payment or pay for Common Shares pursuant to
the Amended Offer in violation of the terms of the Amended Offer.
(c) Injunctions; Illegality. The consummation of the
Merger shall not be restrained, enjoined or prohibited by any order, judgment,
decree, injunction or ruling of a court of competent jurisdiction or any
Governmental Entity and there shall not have been any statute, rule or
regulation enacted, promulgated or deemed applicable to the Merger by any
Governmental Entity which prevents the consummation of the Merger.
ARTICLE VIII
TERMINATION; AMENDMENTS; WAIVER
SECTION 8.01 Termination. This Agreement may be terminated
and the Merger contemplated hereby may be abandoned at any time prior to the
Effective Time, notwithstanding approval thereof by the stockholders of the
Company (with any termination by Parent also being an effective termination by
the Purchaser):
(a) by the mutual written consent of Parent and
the Company;
(b) by the Company if (i) the Purchaser fails to
commence the Amended Offer as provided in Section 1.01 hereof, (ii) the
Purchaser shall not have accepted for payment and paid for Common Shares
pursuant to the Amended Offer
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in accordance with the terms thereof on or before September 15, 1995 or (iii)
the Purchaser fails to purchase validly tendered Common Shares in violation of
the terms of the Amended Offer or this Agreement;
(c) by Parent or the Company if the Amended Offer
is terminated or withdrawn pursuant to its terms without any Common Shares
being purchased thereunder; provided, however, that neither Parent nor the
Company may terminate this Agreement pursuant to this Section 8.01(c) if such
party shall have materially breached this Agreement or, in the case of Parent,
if it or the Purchaser is in material violation of the terms of the Amended
Offer;
(d) by Parent or the Company if any court or other
Governmental Entity shall have issued, enacted, entered, promulgated or
enforced any order, judgment, decree, injunction, or ruling or taken any other
action restraining, enjoining or otherwise prohibiting the Merger and such
order, judgment, decree, injunction, ruling or other action shall have become
final and nonappealable; provided, however, that Parent may not terminate this
Agreement pursuant to this Section 8.01(d) if any such order, judgment, decree,
injunction, ruling or other action is the result of or in any way related to
any Antitrust Laws; and provided further that the party seeking to terminate
the Agreement shall have used its best efforts to remove or lift such order,
decree or ruling;
(e) by the Company if, prior to the purchase of
Common Shares pursuant to the Amended Offer in accordance with the terms of
this Agreement, the Board approves an agreement to effect an Acquisition
Transaction if the Board has determined in good faith, upon advice from its
outside counsel, that failure to approve such agreement and terminate this
Agreement would constitute a breach of fiduciary duties of the Board; provided
that the termination described in this clause (e) shall not be effective unless
and until the Company shall have paid to Parent all of the fees and expenses
described in Section 8.03(b);
(f) by Parent if the Board withdraws, modifies or
changes its recommendation or approval in respect of this Agreement or the
Amended Offer, except due to Parent or the Purchaser's material breach of this
Agreement or material violation of the terms of the Amended Offer, in a manner
adverse to Parent or the Purchaser or if the Board recommends or approves
another Acquisition Transaction or the Company enters into any agreement to
effect an Acquisition Transaction;
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<PAGE> 32
(g) by Parent if it shall not have breached, in
any material respect, any of its obligations hereunder or under the Amended
Offer and no Common Shares shall have been purchased pursuant to the Amended
Offer on or before September 15, 1995; provided, however, that Parent may not
terminate this Agreement pursuant to this Section 8.01(g) on or before March
31, 1996 if the conditions to Parent's obligations to consummate the
transactions contemplated hereunder have not been satisfied on account of any
impediment under any Antitrust Laws; or
(h) by Parent or the Company if any of the
conditions set forth in Annex I attached hereto shall be impossible to satisfy
by September 15, 1995 unless such circumstance results from the failure of the
terminating party to perform in any material respect its obligations under this
Agreement, provided, however, that the Company may not terminate this Agreement
pursuant to this Section 8.01(h) if Parent is willing to waive the relevant
condition (other than the Minimum Condition as defined in Annex I, which cannot
be waived).
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 have no effect, without any liability on the part of
any party or its directors, officers or stockholders, other than the provisions
of this Section 8.02, Section 8.03 and the last sentence of Section 6.02, which
shall survive any such termination. Nothing contained in this Section 8.02
shall relieve any party from liability for any breach of this Agreement or the
Confidentiality Agreement.
SECTION 8.03 Fees and Expenses.
(a) Whether or not the Merger is consummated, all
costs and expenses incurred in connection with the Amended Offer, this
Agreement and the transactions contemplated by this Agreement shall be paid by
the party incurring such expenses.
(b) In the event that this Agreement is
terminated pursuant to Section 8.01(e) or (f), then the Company shall promptly
reimburse Parent for the documented fees and expenses of Parent and the
Purchaser related to this Agreement, the transactions contemplated hereby and
any related financing (subject to a maximum of $2,400,000), and pay Parent a
termination fee of $8,000,000.
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<PAGE> 33
(c) The prevailing party in any legal action
undertaken to enforce this Agreement or any provision hereof shall be entitled
to recover from the other party the costs and expenses (including attorneys'
and expert witness fees) incurred in connection with such action.
SECTION 8.04 Amendment. Subject to Section 1.03(c), this
Agreement may be amended by the Company, Parent and the Purchaser at any time
before or after any approval of this Agreement by the stockholders of the
Company but, after any such approval, no amendment shall be made which
decreases the Merger Price or which adversely affects the rights of the
Company's stockholders hereunder without the approval of such stockholders.
This Agreement may not be amended except by an instrument in writing signed on
behalf of all the parties.
SECTION 8.05 Extension; Waiver. Subject to Section 1.03(c),
at any time prior to the Effective Time, the parties hereto may (i) extend the
time for the performance of any of the obligations or other acts of any other
party hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein by any other party or in any document, certificate or writing
delivered pursuant hereto by any other party or (iii) waive compliance with any
of the agreements of any other party or with any conditions to its own
obligations. Any agreement on the part of any party to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Non-Survival of Representations and Warranties.
The representations and warranties made in this Agreement shall not survive
beyond the Effective Time. Notwithstanding the foregoing, the agreements set
forth in Section 3.02, the last sentence of Section 6.03, Section 6.06 and
Section 6.07 shall survive the Effective Time indefinitely (except to the
extent a shorter period of time is explicitly specified therein).
SECTION 9.01 Entire Agreement; Assignment.
(a) This Agreement (including the documents and
the instruments referred to herein) and the letter agreement dated May 23, 1995
(the "Confidentiality Agreement"), constitute the entire agreement and
supersede all prior agreements and understandings, both written and oral,
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<PAGE> 34
among the parties with respect to the subject matter hereof and thereof.
(b) Neither this Agreement nor any of the rights,
interests or obligations hereunder will be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other party (except that Parent may assign its rights and
Purchaser may assign its rights, interest and obligations to any affiliate or
direct or indirect subsidiary of Parent without the consent of the Company).
Subject to the preceding sentence, this Agreement will be binding upon, inure
to the benefit of and be enforceable by the parties and their respective
successors and assigns.
SECTION 9.03 Validity. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, each of which shall remain in full
force and effect.
SECTION 9.04 Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be deemed to
have been duly given when delivered in person, by overnight courier or
facsimile to the respective parties as follows:
If to Parent or the Purchaser:
FMC Corporation
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Randall S. Ellis
Robert L. Day, Esq.
with a copy to:
Kirkland & Ellis
Citicorp Center
153 East 53rd Street
New York, New York 10022-4675
Attention: Glen E. Hess, P.C.
If to the Company:
Moorco International Inc.
2800 Post Oak Boulevard
Suite 5701
Houston, Texas 77056-6111
Attention: Mr. Michael Tiner
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<PAGE> 35
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Daniel A. Neff, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
SECTION 9.05 Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
SECTION 9.06 Descriptive Headings. The descriptive headings
herein are inserted for convenience of reference only and are not intended to
be part of or to affect the meaning or interpretation of this Agreement.
SECTION 9.07 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an original, but
all of which shall constitute one and the same agreement.
SECTION 9.08 Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto, and, except
with respect to Sections 1.03(c), 2.09, 6.06 and 6.07, nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
SECTION 9.09 Certain Definitions. As used in this Agreement:
(a) the term "affiliate", as applied to any person,
shall mean any other person directly or indirectly controlling, controlled by,
or under common control with, that person. For the purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), as applied to
any person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of that person,
whether through the ownership of voting securities, by contract or otherwise;
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<PAGE> 36
(b) the term "Person" or "person" shall include
individuals, corporations, partnerships, trusts, other entities and groups
(which term shall include a "group" as such term is defined in Section 13(d)(3)
of the Exchange Act); and
(c) the term "Subsidiary" or "subsidiaries" means,
with respect to Parent, the Company or any other person, any corporation,
partnership, joint venture or other legal entity of which Parent, the Company
or such other person, as the case may be (either alone or through or together
with any other subsidiary), owns, directly or indirectly, stock or other equity
interests the holders of which are generally entitled to more than 50% of the
vote for the election of the board of directors or other governing body of such
corporation or other legal entity.
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<PAGE> 37
SECTION 9.10 Specific Performance. The parties hereto agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.
IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed on its behalf by its respective officer thereunto duly
authorized, all as of the day and year first above written.
FMC CORPORATION
By: /s/ Robert N. Burt
--------------------------------
Name: Robert N. Burt
Title: Chairman and CEO
MII ACQUISITION CORP.
By: /s/ Charlotte Mitchell Smith
--------------------------------
Name: Charlotte Mitchell Smith
Title: Secretary
MOORCO INTERNATIONAL INC.
By: /s/ Michael L. Tiner
-------------------------------
Name: Michael L. Tiner
Title: President & CEO
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<PAGE> 38
ANNEX I
Conditions to the Amended Offer. Notwithstanding any other
provisions of the Amended Offer, the Purchaser shall not be required to accept
for payment or pay for any tendered Common Shares, unless there are validly
tendered and not properly withdrawn prior to the expiration date for the
Amended Offer (the "Expiration Date") that number of Common Shares which, when
aggregated with the 100 Common Shares currently owned by Parent, represent at
least a majority of the total number of outstanding Common Shares on a fully
diluted basis on the date of purchase (not taking into account the Rights) (the
"Minimum Condition"). Furthermore, notwithstanding any other provisions of the
Amended Offer, the Purchaser may, subject to the terms of the Merger Agreement,
amend the Amended Offer or postpone the acceptance for payment of or payment
for tendered Common Shares if at any time on or after June 11, 1995 (unless
otherwise indicated below) and before the time of payment for any Common
Shares, any of the following events (each, an "Event") shall occur:
(a) any order or preliminary or permanent
injunction shall be entered in any action or proceeding before any
court of competent jurisdiction or any statute, rule, regulation,
legislation, or order shall be enacted, entered, enforced,
promulgated, amended or issued by any United States legislative body,
court, government or governmental, administrative or regulatory
authority or agency (other than the waiting period provisions of the
HSR Act) which shall remain in effect and which shall have the effect
of making illegal or restraining or prohibiting the making of the
Amended Offer, the acceptance for payment of, or payment for, the
Common Shares by Parent, the Purchaser or any other affiliate of
Parent, or the consummation of the Amended Offer or the Merger
provided, that Parent shall, if necessary to prevent the taking of
such action, or the enactment, enforcement, promulgation, amendment,
issuance or application of any statute, rule, regulation, legislation,
judgment, order or injunction, offer to accept an order to divest such
of the Company's or Parent's assets and businesses as may be necessary
to forestall such injunction or order and to hold separate such assets
and business pending such divestiture; or
(b) the Board or any committee thereof shall have
withdrawn, or shall have modified or amended in a manner adverse to
Parent or the Purchaser, the approval or recommendation of the Amended
Offer, the Merger or the Merger Agreement, or approved or recommended
any other acquisition of Common Shares other than the Amended Offer
and the Merger; or
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<PAGE> 39
(c) the Company and the Purchaser and Parent shall
have reached an agreement that the Amended Offer or the Merger
Agreement be terminated, or the Merger Agreement shall have been
terminated in accordance with its terms; or
(d) the Company shall have breached its
representations and warranties set forth in the Merger Agreement or
failed to perform any of its obligations, covenants or agreements
under the Merger Agreement (other than any breaches or failures to
perform that, in the aggregate, do not have and are not reasonably
expected to have a material adverse effect on (i) the financial
condition, business, operations or long-term profitability of the
Company and its subsidiaries taken as a whole, (ii) the value
reasonably attributable to the Company by Parent or (iii) the ability
of Parent to own or control the Company, its equity securities and
its assets); or
(e) Options issued and outstanding under the
Company's 1990 Stock Incentive Plan to purchase more than 25,000
Common Shares shall not have consented to the changes described in
Section 2.09 of the Merger Agreement; or
(f) there shall have occurred, and continued to
exist, (i) any general suspension of, or limitation on prices for,
trading in securities on the New York Stock Exchange, (ii) a
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States, (iii) a commencement of a war,
armed hostilities or other national or international crisis directly
or indirectly involving the United States, (iv) any limitation by any
Governmental Entity on, or any other event which adversely affects,
the extension of credit by banks or other lending institutions in the
United States which has a material adverse effect on the ability of
Parent to obtain financing for the Amended Offer, or (v) in the case
of any of the foregoing clauses (i) through (iv) existing at the time
of the commencement of the Amended Offer, a material acceleration or
worsening thereof.
The foregoing conditions are for the benefit of Parent and the
Purchaser and may be asserted by Parent or the Purchaser regardless of the
circumstances giving rise to any such conditions and may be waived by Parent or
the Purchaser in whole or in part at any time and from time to time in their
reasonable discretion, in each case, subject to the
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<PAGE> 40
terms of the Merger Agreement. The failure by Parent or the Purchaser at any
time to exercise any of the foregoing rights shall not be deemed a waiver of
any such right and each such right shall be deemed an ongoing right which may
be asserted at any time and from time to time.
The Offer may be terminated by Purchaser if the Merger
Agreement is terminated pursuant to its terms.
The capitalized terms used in this Annex I shall have the
meanings set forth in the Agreement to which it is annexed, except that the
term "Merger Agreement" shall be deemed to refer to the Agreement to which this
Annex I is appended.
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<PAGE> 1
[Salomon Brothers Inc Letterhead]
June 11, 1995
Moorco International Inc.
2800 Post Oak Boulevard
Suite 5701
Houston, TX 77056
Attention: Members of the Board of Directors
Dear Sirs:
You have requested our opinion as to the fairness, from a
financial point of view, to the holders of common stock, par value $.01 per
share (including the associated Preferred Stock Purchase Rights) (the "Shares")
of Moorco International Inc., a Delaware corporation (the "Company"), of the
consideration to be received by such holders in connection with the proposed
tender offer (the "Offer") by MII Acquisition Corp. ("Acquisition Sub"), a
Delaware corporation and a subsidiary of FMC Corporation ("FMC"), pursuant to
which all outstanding Shares will be purchased at a price equal to $28.00 per
Share, in cash (the "Consideration"), and the proposed merger of Acquisition
Sub with and into the Company (the "Merger"; together with the Offer, the
"Transaction"), pursuant to which all Shares remaining outstanding after the
consummation of the Offer (other than the Shares whose holders exercise their
appraisal rights) will be converted into the right to receive an amount in cash
equal to the Consideration, all pursuant to the Agreement and Plan of Merger to
be dated as of June 11, 1995 (the "Merger Agreement") among the Company, FMC
and Acquisition Sub.
In connection with rendering our opinion, we have reviewed and
analyzed, among other things, the following: (i) a draft of the Merger
Agreement in the form to be executed; (ii) certain publicly available business
and financial information concerning the Company and FMC; (iii) certain
internal information of the Company, primarily financial in nature (including
projections, forecasts and analyses prepared by or on behalf of
<PAGE> 2
Moorco International Inc.
Page 2
June 11, 1995
the Company's management), concerning the business, assets, liabilities,
operations and prospects of the Company, furnished to us by the Company for
purposes of our analysis; (iv) certain publicly available and other information
concerning the trading of, and the trading market for, the Shares; (v) the
nature and terms of certain recent transactions which we believe to be
reasonably comparable to the Transaction or otherwise relevant to our inquiry;
and (vi) certain publicly available information with respect to other companies
that we believe to be relevant or comparable in certain respects to the Company
or one or more of its businesses or assets and the trading markets for certain
of such other companies' securities. In addition, we have taken into account
various discussions with third parties with respect to such third parties'
potential interest in the acquisition of all or part of the Company or other
strategic transactions involving the Company. We have also met with certain
officers and employees of the Company to discuss the foregoing as well as other
matters we believe relevant to our inquiry. We have taken into account our
assessment of general economic, market and financial conditions and our
experience in securities valuation generally. We have also considered such
other information, financial studies, analyses, investigations and financial,
economic, market and trading criteria that we considered relevant to our
inquiry.
In our review and analysis and in arriving at our opinion, we
have assumed and relied upon the accuracy and completeness of all of the
financial and other information provided to, reviewed for or discussed with us
or publicly available, and have not assumed any responsibility for independent
verification of any such information. We have also relied upon the
reasonableness and accuracy of the financial projections, forecasts and
analyses provided to us and we have assumed that they were reasonably prepared
on bases reflecting the best currently available estimates and judgment of the
Company's management, and we express no opinion with respect to such forecasts,
projections and analyses or the assumptions on which they are based. We have
not made or obtained any independent evaluations or appraisals of any of the
Company's assets, properties or facilities, nor have we been furnished with any
such evaluations or appraisals. Our opinion is necessarily based upon
business, market, economic and other conditions and circumstances as they exist
on, and can be evaluated as of, the date hereof and does not address the
Company's underlying business decision to effect the Transaction or constitute
a recommendation to any holder of Shares as to whether such holder should
tender Shares in the Offer or as to how such holder should vote with respect to
the Merger.
<PAGE> 3
Moorco International Inc.
Page 3
June 11, 1995
As you are aware, Salomon Brothers Inc has acted as financial
advisor to the Company in connection with the Transaction and will receive a
fee for our services. Additionally, Salomon Brothers Inc is currently engaged
by the Company to render financial advisory and investment banking services
(including with respect to the Company's publicly announced proposal to acquire
Daniel Industries, Inc.) and has received, and would under certain
circumstances receive, fees for the rendering of such services. In addition,
in the ordinary course of our business we may actively trade the debt on equity
securities of the Company and FMC for our own account and for the accounts of
customers and, accordingly, may at any time hold a long or short position in
such securities.
Based upon and subject to the foregoing, it is our opinion
that, as of the date hereof, the Consideration to be received by the holders of
Shares (other than FMC) in connection with the Transaction is fair to such
holders from a financial point of view.
Very truly yours,
SALOMON BROTHERS INC
<PAGE> 1
[Moorco Letterhead]
June 13, 1995
To Our Stockholders:
Moorco International Inc. has entered into a merger agreement with FMC
Corporation which provides for a wholly owned subsidiary of FMC to amend its
existing cash tender offer to increase the price offered for all outstanding
common shares of Moorco from $20.00 per share to $28.00 per share. The FMC
tender offer will be followed by a merger of the FMC subsidiary with Moorco. In
the merger, each Moorco share which is not purchased in the tender offer will be
converted into $28.00 in cash.
THE BOARD OF DIRECTORS OF MOORCO HAS UNANIMOUSLY APPROVED THE TRANSACTION
WITH FMC, HAS DETERMINED THAT THE AMENDED OFFER AND THE MERGER ARE FAIR TO AND
IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS THAT
STOCKHOLDERS ACCEPT THE $28.00 AMENDED OFFER AND TENDER THEIR SHARES. The
amended offer is scheduled to expire at midnight on Monday, June 26, 1995.
Enclosed is FMC's Supplement dated June 13, 1995 to its Offer to Purchase
dated May 5, 1995, and a revised Letter of Transmittal. These documents set
forth the amended terms and conditions of the FMC tender offer and contain other
important information relating to the tender offer and the merger. These
documents also provide instructions as to how to tender your Moorco shares. Also
attached is a copy of an amendment to Moorco's Schedule 14D-9, as filed with the
Securities and Exchange Commission. The attached Schedule 14D-9 describes in
more detail the reasons for your Board's decision. Among other things, the Board
considered the opinion of Salomon Brothers Inc, its financial advisor, that the
consideration to be received by Moorco stockholders (other than FMC) pursuant to
the tender offer and the merger is fair to such stockholders from a financial
point of view. We urge you to read all of these materials carefully.
Your Board of Directors, the management and employees of Moorco thank you
sincerely for your loyal support.
On behalf of the Board of Directors,
<TABLE>
<S> <C>
/s/ KEITH S. WELLIN /s/ MICHAEL L. TINER
Keith S. Wellin Michael L. Tiner
Chairman of the Board President and Chief
Executive Officer
</TABLE>
